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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07704
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
Schwab Capital Trust
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 636-7000
Date of fiscal year end: October 31
Date of reporting period: October 31, 2012
Item 1: Report(s) to Shareholders.
Table of Contents
Annual report dated October 31, 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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Table of Contents
This wrapper is not part of the shareholder report.
Table of Contents
Schwab Equity Index Funds
Annual Report
October 31, 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
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Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of MSCI and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
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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) | 15.09% | |||
S&P 500® Index | 15.21% | |||
Fund Category: Morningstar Large-Cap Blend | 12.55% | |||
Performance Details | pages 6-7 | |||
Schwab 1000 Index® Fund (Ticker Symbol: SNXFX) | 14.38% | |||
Schwab 1000 Index® | 14.67% | |||
Fund Category: Morningstar Large-Cap Blend | 12.55% | |||
Performance Details | pages 8-9 | |||
Schwab Small-Cap Index Fund® (Ticker Symbol: SWSSX) | 11.87% | |||
Russell 2000® Index* | 12.08% | |||
Fund Category: Morningstar Small-Cap Blend | 10.82% | |||
Performance Details | pages 10-11 | |||
Schwab Total Stock Market Index Fund® (Ticker Symbol: SWTSX) | 14.71% | |||
Dow Jones U.S. Total Stock Market IndexSM | 14.73% | |||
Fund Category: Morningstar Large-Cap Blend | 12.55% | |||
Performance Details | pages 12-13 | |||
Schwab International Index Fund®1 (Ticker Symbol: SWISX) | 6.07% | |||
MSCI EAFE Index®** | 5.15% | |||
Fund Category: Morningstar Foreign Large-Cap Blend | 6.15% | |||
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 from the Schwab Small-Cap Index to the Russell 2000 Index in connection with a change to the fund’s investment strategy. See Glossary for index definitions. | |
** | Effective December 20, 2011, the fund changed its primary benchmark index from the Schwab International Index to the MSCI EAFE Index® in connection with a change to the fund’s investment strategy. See Glossary for index definitions. | |
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 the funds’ prospectus for further detail and eligibility requirements. |
2 Schwab Equity Index Funds
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From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctpchandom.jpg)
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. These funds employ an indexing strategy to track the performance of a particular cap-weighted stock market index, seeking returns by modeling portfolios according to each fund’s respective benchmark index.
For the 12 months ended October 31, 2012, all but one of the Schwab Equity Index Funds generated double-digit returns, as U.S. stocks solidly outperformed international equities. The continued low rate backdrop and governmental efforts to speed up economic growth supported the performance of U.S. stocks. The Federal Reserve extended its forecast for keeping short-term interest rates at 0-0.25% from late 2014 to mid-2015, and announced policies aimed at quickening the pace of economic expansion. Large-cap stocks generated higher returns than small-cap stocks, while value outperformed growth. From a sector standpoint, Health Care and Financials were two of the strongest performers, while Materials and Energy were two of the weakest.
The euro zone’s sovereign debt crisis represented an ongoing challenge, particularly for international equities. Overseas stocks endured particularly sharp losses in May amid concerns regarding Greek elections and worries that the crisis might spread. However, meaningful subsequent progress by European leaders helped international equities recover.
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.
![]() | 15.21% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 12.08% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 5.15% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.25% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.06% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctcaptst02.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management’s views and portfolio holdings may have changed since the report date.
Schwab Equity Index Funds 3
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From the President continued
For the 12 months ended October 31, 2012, all but one of the Schwab Equity Index Funds generated double-digit returns, as U.S. stocks solidly outperformed international equities.
The outperformance of U.S. stocks compared with international equities was readily apparent when looking at several key performance gauges. Specifically, the S&P 500 Index returned 15.2%, the Russell 2000 Index returned 12.1%, and in U.S. dollar terms, the MSCI EAFE Index returned 5.2%.
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 frequently asked questions or for more information about the Schwab Equity Index Funds, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Equity Index Funds
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Fund Management
![]() | Agnes Hong, CFA, Managing Director and Head of Passive Equity Strategies, leads the portfolio management teams of Schwab’s index mutual funds and equity ETFs. She also has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2009, Ms. Hong spent five years as a portfolio manager at Barclays Global Investors (subsequently acquired by BlackRock), where she managed institutional index funds and quantitative active funds. Prior to that, Ms. Hong worked in management consulting and product management, servicing global financial services clients. | |
![]() | Larry Mano, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of each of the funds. Prior to joining CSIM in 1998, Mr. Mano was a vice president and principal in the Institutional Services Group at Wilshire Associates, Inc., where he directed the product development and client servicing of analytical tools to aid in the management of structured equity and indexed portfolios. He has over 20 years of experience in asset management. | |
![]() | Ron Toll, Portfolio Manager, is responsible for the day-to-day co-management of each of the funds, except for the Schwab Total Stock Market Index Fund. Mr. Toll has been a portfolio manager with CSIM since 2007, and has held a number of positions at the firm since beginning his tenure in 1998. His previous roles include serving as a manager in Portfolio Operations, and as a manager in Portfolio Operations and Analytics. |
Schwab Equity Index Funds 5
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Schwab® S&P 500 Index Fund
The Schwab S&P 500 Index Fund (the fund) seeks to track the total return of the S&P 500 Index (the index), which includes the stocks of 500 leading U.S. publicly traded companies from a broad range of industries. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 15.09% for the 12-month period that ended October 31, 2012, compared with the index, which returned 15.21%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index.
Market Highlights. Large-cap U.S. stocks generated double-digit overall returns for the 12-month report period. The low-rate environment and governmental efforts aimed at increasing the pace of economic growth helped to support this performance. Challenges included the euro zone’s ongoing sovereign debt crisis, worries over the November elections, and the upcoming fiscal cliff—the potential expiration of many tax cuts and governmental spending policies in 2013.
Contributors and Detractors. The Financials sector was the biggest contributor to the fund’s total return. The large average weight of this sector reflected part of the reason for this contribution, with Financials stocks comprising more than 14% of the fund. Financials stocks also performed well, returning approximately 20%. One significant contributor in this sector was Wells Fargo & Co., a diversified financial services company. The fund’s Wells Fargo & Co. holdings returned more than 33% over the 12 months.
The Health Care sector, which represented an average weight of nearly 12% of the fund, also provided a meaningful total return contribution. The fund’s Health Care stocks returned approximately 22%, reflecting the overall performance of companies involved in health care and equipment services, biotechnology, and pharmaceuticals. One significant contributor in this sector was Pfizer Inc., a global pharmaceutical company. The fund’s Pfizer Inc. holdings returned more than 34% over the report period.
The Materials sector generated positive returns for the fund, but was the weakest total return contributor. The Materials sector represented an average weight of more than 3% of the fund, and returned more than 7%. One significant detractor in this sector was Newmont Mining Corporation, which acquires, explores, and develops mineral properties. The fund’s Newmont Mining Corporation holdings returned approximately -16%.
As of 10/31/12:
Statistics
Number of Holdings | 503 | |||
Weighted Average Market Cap ($ x 1,000,000) | $111,376 | |||
Price/Earnings Ratio (P/E) | 15.8 | |||
Price/Book Ratio (P/B) | 2.2 | |||
Portfolio Turnover Rate | 2% |
Sector Weightings % of Investments
Information Technology | 18.9% | |||
Financials | 15.0% | |||
Health Care | 12.0% | |||
Energy | 11.1% | |||
Consumer Discretionary | 10.9% | |||
Consumer Staples | 10.8% | |||
Industrials | 9.8% | |||
Utilities | 3.6% | |||
Materials | 3.4% | |||
Telecommunication Services | 3.1% | |||
Other | 1.4% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 4.3% | |||
Exxon Mobil Corp. | 3.3% | |||
General Electric Co. | 1.7% | |||
Chevron Corp. | 1.7% | |||
Microsoft Corp. | 1.7% | |||
International Business Machines Corp. | 1.6% | |||
AT&T, Inc. | 1.6% | |||
Johnson & Johnson | 1.5% | |||
The Procter & Gamble Co. | 1.5% | |||
Pfizer, Inc. | 1.4% | |||
Total | 20.3% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Equity Index Funds
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Schwab® S&P 500 Index Fund
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsspif.gif)
Pre-Tax Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab® S&P 500 Index Fund (5/19/97) | 15.09 | % | 0.37 | % | 6.86 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 12.55 | % | -0.71 | % | 6.42 | % |
Fund Expense Ratios4: Net 0.09%; Gross 0.10%
Average Annual Total Returns After Tax1,2,3
1 Year | 5 Years | 10 Years | |||||||||||||
Fund: Schwab® S&P 500 Index Fund (5/19/97) | |||||||||||||||
Pre-Liquidation (still own shares) | 14.72 | % | 0.06 | % | 6.45 | % | |||||||||
Post-Liquidation (shares were sold) | 10.16 | % | 0.25 | % | 5.87 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | |||||||||||||||
Pre-Liquidation (still own shares) | 10.71 | % | -1.57 | % | 5.73 | % | |||||||||
Post-Liquidation (shares were sold) | 7.44 | % | -1.05 | % | 5.31 | % |
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 Schwab S&P 500 Index Fund. The Schwab S&P 500 Index 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 10/31/12 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. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | 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 past performance and financial history of the fund are that of the fund’s former Select Shares. On September 9, 2009, the Schwab Institutional Select S&P 500 Fund merged into the fund. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 7
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Schwab 1000 Index® Fund
The Schwab 1000 Index Fund (the fund) seeks to match the total return of the Schwab 1000 Index (the index), which includes the stocks of the largest 1,000 publicly traded companies in the U.S., with size being determined by market capitalization (total market value of all shares outstanding). To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 14.38% for the 12-month period that ended October 31, 2012, compared with the index, which returned 14.67%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index.
Market Highlights. Large-cap U.S. stocks generated double-digit overall returns for the 12-month report period. The low-rate environment and governmental efforts aimed at increasing the pace of economic growth helped to support this performance. Challenges included the euro zone’s ongoing sovereign debt crisis, worries over the November elections, and the upcoming fiscal cliff—the potential expiration of many tax cuts and governmental spending policies in 2013.
Contributors and Detractors. The Financials sector was the biggest contributor to the fund’s return. The large average weight of this sector reflected part of the reason for this contribution, with Financials stocks comprising approximately 15% of the fund. The fund’s Financials stocks also performed well, returning nearly 20%. One significant contributor in this sector was Wells Fargo & Co., a diversified financial services company. The fund’s Wells Fargo & Co. holdings returned more than 33% over the 12 months.
The Health Care sector, which represented an average weight of more than 11% of the fund, also provided a meaningful contribution to the fund’s total return. The fund’s Health Care stocks returned approximately 22%, reflecting the overall performance of companies involved in health care and equipment services, biotechnology, and pharmaceuticals. One significant contributor in this sector was Pfizer Inc., a global pharmaceutical company. The fund’s Pfizer Inc. holdings returned more than 34% over the report period.
The Materials sector generated positive returns for the fund, but was the weakest total return contributor. The Materials sector represented an average weight of nearly 4% of the fund, and returned approximately 10%. One significant detractor in this sector was Newmont Mining Corporation, which acquires, explores, and develops mineral properties. The fund’s Newmont Mining Corporation holdings returned approximately -16%.
As of 10/31/12:
Statistics
Number of Holdings | 981 | |||
Weighted Average Market Cap ($ x 1,000,000) | $99,495 | |||
Price/Earnings Ratio (P/E) | 16.6 | |||
Price/Book Ratio (P/B) | 2.2 | |||
Portfolio Turnover Rate | 4% |
Sector Weightings % of Investments
Information Technology | 18.4% | |||
Financials | 15.8% | |||
Consumer Discretionary | 12.0% | |||
Health Care | 11.8% | |||
Energy | 10.6% | |||
Industrials | 10.5% | |||
Consumer Staples | 9.9% | |||
Materials | 3.8% | |||
Utilities | 3.8% | |||
Telecommunication Services | 2.9% | |||
Other | 0.5% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 3.9% | |||
Exxon Mobil Corp. | 2.9% | |||
General Electric Co. | 1.6% | |||
Chevron Corp. | 1.5% | |||
Microsoft Corp. | 1.5% | |||
International Business Machines Corp. | 1.5% | |||
AT&T, Inc. | 1.4% | |||
Johnson & Johnson | 1.4% | |||
The Procter & Gamble Co. | 1.3% | |||
Pfizer, Inc. | 1.3% | |||
Total | 18.3% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Equity Index Funds
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Schwab 1000 Index® Fund
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020cts1if.gif)
Pre-Tax Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab 1000 Index® Fund (4/2/91) | 14.38 | % | 0.35 | % | 6.99 | % | |||||||||
Schwab 1000 Index® | 14.67 | % | 0.56 | % | 7.31 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 12.55 | % | -0.71 | % | 6.42 | % |
Fund Expense Ratios4: Net 0.29%; Gross 0.34%
Average Annual Total Returns After Tax1,2,3
1 Year | 5 Years | 10 Years | |||||||||||||
Fund: Schwab 1000 Index® Fund (4/2/91) | |||||||||||||||
Pre-Liquidation (still own shares) | 13.33 | % | -0.09 | % | 6.57 | % | |||||||||
Post-Liquidation (shares were sold) | 10.43 | % | 0.22 | % | 6.01 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | |||||||||||||||
Pre-Liquidation (still own shares) | 10.71 | % | -1.57 | % | 5.73 | % | |||||||||
Post-Liquidation (shares were sold) | 7.44 | % | -1.05 | % | 5.31 | % |
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 10/31/12 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. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On September 18, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The past performance and financial history of the fund are that of the fund’s former Investor Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 9
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Schwab Small-Cap Index Fund®
The Schwab Small-Cap Index Fund (the fund) seeks to track the total return of the Russell 2000 Index (the index), which is designed to measure the performance of the small-cap sector of the U.S. equity market. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 11.87% for the 12-month period that ended October 31, 2012. In December 2011, the fund transitioned from the Schwab Small-Cap Index, which returned 13.68% for the 12-month period, to the new index, which returned 12.08%. The Small-Cap Spliced Index returned 11.60% for the same period. In addition, the fund engaged in securities lending, which positively contributed to the fund’s performance versus the index. Because the return of an index does not include operational and transactional costs, the return of the fund tends to differ from that of an index.
Market Highlights. Small-cap U.S. stocks generated double-digit overall returns for the 12-month report period. The low-rate environment and governmental efforts aimed at increasing the pace of economic growth helped to support this performance. Challenges included the euro zone’s ongoing sovereign debt crisis, worries over the November elections, and the upcoming fiscal cliff—the potential expiration of many tax cuts and governmental spending policies in 2013.
Contributors and Detractors. The Financials sector was the biggest contributor to the fund’s return. The large average weight of this sector reflected part of the reason for this contribution, with Financials stocks comprising nearly 22% of the fund. The fund’s Financials stocks also performed well, returning almost 21%. One significant contributor in this sector was Ocwen Financial Corporation, a diversified financial services holding company. The fund’s Ocwen Financial Corporation holdings returned approximately 166% over the 12 months.
The Health Care sector, which represented an average weight of nearly 13% of the fund, also provided a meaningful contribution to the fund’s total return. The fund’s Health Care stocks returned more than 20%, reflecting the overall performance of companies involved in health care and equipment services, biotechnology, and pharmaceuticals. One significant contributor in this sector was Medivation Inc., a company involved in biomedical technologies. The fund’s Medivation Inc. holdings returned roughly 392% over the report period.
The Energy sector detracted the most from the fund’s total return. The Energy sector represented an average weight of more than 6% of the fund, and returned roughly -11%. One significant detractor in this sector was Bill Barrett Corporation, an independent oil and gas company. The fund’s Bill Barrett Corporation holdings returned approximately -45%.
As of 10/31/12:
Statistics
Number of Holdings | 1988 | |||
Weighted Average Market Cap ($ x 1,000,000) | $1,285 | |||
Price/Earnings Ratio (P/E) | 43.5 | |||
Price/Book Ratio (P/B) | 1.9 | |||
Portfolio Turnover Rate | 41% |
Sector Weightings % of Investments
Financials | 21.9% | |||
Information Technology | 16.2% | |||
Industrials | 14.9% | |||
Consumer Discretionary | 13.6% | |||
Health Care | 12.1% | |||
Energy | 5.8% | |||
Materials | 5.0% | |||
Utilities | 3.6% | |||
Consumer Staples | 3.6% | |||
Telecommunication Services | 0.7% | |||
Other | 2.6% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Ocwen Financial Corp. | 0.3% | |||
Two Harbors Investment Corp. | 0.3% | |||
Pharmacyclics, Inc. | 0.3% | |||
Genesee & Wyoming, Inc., Class A | 0.3% | |||
Starwood Property Trust, Inc. | 0.3% | |||
The Warnaco Group, Inc. | 0.2% | |||
WEX, Inc. | 0.2% | |||
CommVault Systems, Inc. | 0.2% | |||
Coeur d’Alene Mines Corp. | 0.2% | |||
Dril-Quip, Inc. | 0.2% | |||
Total | 2.5% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Equity Index Funds
Table of Contents
Schwab Small-Cap Index Fund®
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctssif.gif)
Pre-Tax Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Small-Cap Index Fund® (5/19/97) | 11.87 | % | 2.62 | % | 9.94 | % | |||||||||
Russell 2000® Index4 | 12.08 | % | 1.19 | % | 9.58 | % | |||||||||
Schwab Small-Cap Index® | 13.68 | % | 3.04 | % | 10.24 | % | |||||||||
Small-Cap Spliced Index5 | 11.60 | % | 2.66 | % | 10.04 | % | |||||||||
Fund Category: Morningstar Small-Cap Blend | 10.82 | % | 0.75 | % | 9.07 | % |
Fund Expense Ratios6: Net 0.17%; Gross 0.19%
Average Annual Total Returns After Tax1,2,3
1 Year | 5 Years | 10 Years | |||||||||||||
Fund: Schwab Small-Cap Index Fund® (5/19/97) | |||||||||||||||
Pre-Liquidation (still own shares) | 9.79 | % | 1.45 | % | 8.91 | % | |||||||||
Post-Liquidation (shares were sold) | 8.30 | % | 1.83 | % | 8.44 | % | |||||||||
Fund Category: Morningstar Small-Cap Blend | |||||||||||||||
Pre-Liquidation (still own shares) | 9.12 | % | -0.13 | % | 8.05 | % | |||||||||
Post-Liquidation (shares were sold) | 6.66 | % | 0.24 | % | 7.66 | % |
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 10/31/12 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. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On August 21, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The past performance and financial history of the fund are that of the fund’s former Select Shares. | |
4 | Effective December 14, 2011, the fund changed its primary benchmark index from the Schwab Small-Cap Index to the Russell 2000 Index in connection with a change to the fund’s investment strategy. See Glossary for index definitions. | |
5 | The Small-Cap Spliced Index is an internally calculated index, 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. | |
6 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 11
Table of Contents
Schwab Total Stock Market Index Fund®
The Schwab Total Stock Market Index Fund (the fund) seeks to track the total return of the entire U.S. stock market, as measured by the Dow Jones U.S. Total Stock Market Index (the index), which includes the stocks of all publicly traded companies headquartered in the U.S. for which pricing information is readily available—approximately 3,800 stocks. To pursue its investment objective, the funds uses a sampling investment approach that involves investing in a representative sample of stocks with similar risk and return characteristics as the index, and maintains a tight allocation across all sectors, market capitalizations, and valuation measures compared with the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 14.71% for the 12-month period that ended October 31, 2012, compared with the index, which returned 14.73%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index.
Market Highlights. U.S. stocks generated double-digit overall returns for the 12-month report period. Governmental efforts aimed at increasing the pace of economic growth and the low-rate environment helped to support this performance. Challenges included the euro zone’s ongoing sovereign debt crisis, worries over the November elections, and the upcoming fiscal cliff—the potential expiration of many tax cuts and governmental spending policies in 2013.
Contributors and Detractors. The Financials sector was the biggest contributor to the fund’s return. The large average weight of this sector reflected part of the reason for this contribution, with Financials stocks comprising approximately 16% of the fund. Financials stocks also performed well, returning more than 19% for the fund. One significant contributor in this sector was Wells Fargo & Co., a diversified financial services company. The fund’s Wells Fargo & Co. holdings returned more than 33% over the 12 months.
The Health Care sector, which represented an average weight of approximately 12% of the fund, also provided a meaningful contribution to the fund’s total return. The fund’s Health Care stocks returned more than 22%, reflecting the overall performance of companies involved in health care and equipment services, biotechnology, and pharmaceuticals. One significant contributor in this sector was Pfizer Inc., a global pharmaceutical company. The fund’s Pfizer Inc. holdings returned more than 34% over the report period.
The Utilities sector generated positive returns for the fund, but was the weakest total return contributor. The Utilities sector represented an average weight of approximately 4% of the fund, and returned roughly 11%. One significant detractor in this sector was Exelon Corporation, a utility services holding company. The fund’s Exelon Corporation holdings returned approximately -15%.
As of 10/31/12:
Statistics
Number of Holdings | 2451 | |||
Weighted Average Market Cap ($ x 1,000,000) | $91,599 | |||
Price/Earnings Ratio (P/E) | 17.5 | |||
Price/Book Ratio (P/B) | 2.2 | |||
Portfolio Turnover Rate | 3% |
Sector Weightings % of Investments
Information Technology | 18.1% | |||
Financials | 16.4% | |||
Consumer Discretionary | 12.0% | |||
Health Care | 11.7% | |||
Industrials | 10.7% | |||
Energy | 10.3% | |||
Consumer Staples | 9.4% | |||
Materials | 3.9% | |||
Utilities | 3.6% | |||
Telecommunication Services | 2.8% | |||
Other | 1.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 3.6% | |||
Exxon Mobil Corp. | 2.7% | |||
General Electric Co. | 1.4% | |||
Chevron Corp. | 1.4% | |||
Microsoft Corp. | 1.4% | |||
International Business Machines Corp. | 1.3% | |||
AT&T, Inc. | 1.3% | |||
Johnson & Johnson | 1.2% | |||
The Procter & Gamble Co. | 1.2% | |||
Pfizer, Inc. | 1.2% | |||
Total | 16.7% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Equity Index Funds
Table of Contents
Schwab Total Stock Market Index Fund®
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctstsmif.gif)
Pre-Tax Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Total Stock Market Index Fund® (6/1/99) | 14.71 | % | 0.93 | % | 7.70 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 14.73 | % | 0.76 | % | 7.75 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 12.55 | % | -0.71 | % | 6.42 | % |
Fund Expense Ratios4: Net 0.09%; Gross 0.11%
Average Annual Total Returns After Tax1,2,3
�� | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Total Stock Market Index Fund® (6/1/99) | |||||||||||||||
Pre-Liquidation (still own shares) | 14.36 | % | 0.64 | % | 7.33 | % | |||||||||
Post-Liquidation (shares were sold) | 9.87 | % | 0.73 | % | 6.64 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | |||||||||||||||
Pre-Liquidation (still own shares) | 10.71 | % | -1.57 | % | 5.73 | % | |||||||||
Post-Liquidation (shares were sold) | 7.44 | % | -1.05 | % | 5.31 | % |
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 IndexSM” are service marks of Dow Jones & Company, Inc. and have been licensed for certain purposes by CSIM. The Schwab Total Stock Market Index Fund, based on The Dow Jones U.S. Total Stock Market IndexSM, is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation regarding the advisability of investing in such a product.
1 | 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 10/31/12 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. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On September 18, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The past performance and financial history of the fund are that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 13
Table of Contents
Schwab International Index Fund®
The Schwab International Index Fund (the fund) seeks to track the performance of the MSCI EAFE Index (the index), which measures the total return of large, publicly traded non-U.S. companies from international countries with developed equity markets. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 6.07% for the 12 months ended October 31, 2012. In December 2011, the fund transitioned from the Schwab International Index (net), which returned 4.78% for the 12-month period, to the new index, which returned 5.15%. The International Spliced Index returned 5.05% for the same period. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index. In addition, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings contributed positively to the fund’s relative performance.*
Market Highlights. The euro zone’s sovereign debt crisis and decelerating economic growth represented challenges for international stocks. However, meaningful eventual progress by European leaders toward resolving the crisis helped, while major currencies finished mixed versus the U.S. dollar.
Contributors and Detractors. U.K. stocks were the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of more than 22%. U.K. investments benefitted from being alternatives to the crisis-plagued euro zone, and returned approximately 9% for the fund in U.S. dollar terms. HSBC Holdings plc—an international banking and financial services company—was a significant contributor in this market, with the fund’s holdings returning more than 18%.
The fund’s Canadian stocks returned approximately -8% in U.S. dollar terms, the biggest detractors from a country standpoint. Holdings of Canadian companies represented a 9% weight in the fund prior to the index conversion, and these holdings were subsequently eliminated.
As of 10/31/12:
Country Weightings % of Equity Investments
United Kingdom | 22.9% | |||
Japan | 19.3% | |||
France | 9.2% | |||
Australia | 8.9% | |||
Switzerland | 8.6% | |||
Germany | 8.5% | |||
Hong Kong | 3.1% | |||
Sweden | 3.1% | |||
Spain | 2.9% | |||
Netherlands | 2.5% | |||
Other Countries | 11.0% | |||
Total | 100.0% |
Statistics
Number of Holdings | 927 | |||
Weighted Average Market Cap ($ x 1,000,000) | $50,565 | |||
Price/Earnings Ratio (P/E) | 18.3 | |||
Price/Book Ratio (P/B) | 0.8 | |||
Portfolio Turnover Rate | 31% |
Sector Weightings % of Investments
Financials | 23.7% | |||
Industrials | 12.3% | |||
Consumer Staples | 11.8% | |||
Consumer Discretionary | 10.0% | |||
Health Care | 10.0% | |||
Materials | 9.5% | |||
Energy | 8.1% | |||
Telecommunication Services | 5.0% | |||
Information Technology | 4.2% | |||
Utilities | 3.9% | |||
Other | 1.5% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Nestle S.A. – Reg’d | 2.0% | |||
HSBC Holdings plc | 1.7% | |||
iShares MSCI EAFE Index Fund | 1.5% | |||
Novartis AG – Reg’d | 1.3% | |||
BP plc | 1.3% | |||
Roche Holding AG | 1.3% | |||
Vodafone Group plc | 1.3% | |||
Royal Dutch Shell plc, A Shares | 1.2% | |||
BHP Billiton Ltd. | 1.1% | |||
GlaxoSmithKline plc | 1.1% | |||
Total | 13.8% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk.
* | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST). Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. | |
1 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Equity Index Funds
Table of Contents
Schwab International Index Fund®
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsiif.gif)
Pre-Tax Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab International Index Fund® (5/19/97) | 6.07 | % | -5.76 | % | 7.51 | % | |||||||||
MSCI EAFE Index®4 | 5.15 | % | -5.35 | % | 8.21 | % | |||||||||
Schwab International Index® (Net) | 4.78 | % | -5.64 | % | 7.74 | % | |||||||||
International Spliced Index5 | 5.05 | % | -5.59 | % | 7.77 | % | |||||||||
Fund Category: Morningstar Foreign Large-Cap Blend | 6.15 | % | -5.92 | % | 7.31 | % |
Fund Expense Ratios6: Net 0.19%; Gross 0.21%
Average Annual Total Returns After Tax1,2,3
1 Year | 5 Years | 10 Years | |||||||||||||
Fund: Schwab International Index Fund® (5/19/97) | |||||||||||||||
Pre-Liquidation (still own shares) | 5.48 | % | -6.10 | % | 6.97 | % | |||||||||
Post-Liquidation (shares were sold) | 4.70 | % | -4.72 | % | 6.49 | % | |||||||||
Fund Category: Morningstar Foreign Large-Cap Blend | |||||||||||||||
Pre-Liquidation (still own shares) | 4.14 | % | -7.11 | % | 6.32 | % | |||||||||
Post-Liquidation (shares were sold) | 3.20 | % | -5.46 | % | 6.01 | % |
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 10/31/12 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. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On August 21, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The past performance and financial history of the fund are that of the fund’s former Select Shares. | |
4 | Effective December 20, 2011, the fund changed its primary benchmark index from the Schwab International Index to the MSCI EAFE Index® in connection with a change to the fund’s investment strategy. See Glossary for index definitions. | |
5 | The International Spliced Index is an internally calculated index, 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. | |
6 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 15
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2012 and held through October 31, 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 5/1/12 | at 10/31/12 | 5/1/12–10/31/12 | |||||||||||||
Schwab® S&P 500 Index Fund | ||||||||||||||||
Actual Return | 0.09% | $ | 1,000 | $ | 1,021.00 | $ | 0.46 | |||||||||
Hypothetical 5% Return | 0.09% | $ | 1,000 | $ | 1,024.68 | $ | 0.46 | |||||||||
Schwab 1000 Index® Fund | ||||||||||||||||
Actual Return | 0.29% | $ | 1,000 | $ | 1,015.40 | $ | 1.47 | |||||||||
Hypothetical 5% Return | 0.29% | $ | 1,000 | $ | 1,023.68 | $ | 1.48 | |||||||||
Schwab Small-Cap Index Fund® | ||||||||||||||||
Actual Return | 0.17% | $ | 1,000 | $ | 1,010.50 | $ | 0.86 | |||||||||
Hypothetical 5% Return | 0.17% | $ | 1,000 | $ | 1,024.28 | $ | 0.87 | |||||||||
Schwab Total Stock Market Index Fund® | ||||||||||||||||
Actual Return | 0.09% | $ | 1,000 | $ | 1,017.80 | $ | 0.46 | |||||||||
Hypothetical 5% Return | 0.09% | $ | 1,000 | $ | 1,024.68 | $ | 0.46 | |||||||||
Schwab International Index Fund® | ||||||||||||||||
Actual Return | 0.19% | $ | 1,000 | $ | 1,024.50 | $ | 0.97 | |||||||||
Hypothetical 5% Return | 0.19% | $ | 1,000 | $ | 1,024.18 | $ | 0.97 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 366 days of the fiscal year. |
16 Schwab Equity Index Funds
Table of Contents
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– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 19.82 | 18.70 | 16.28 | 15.28 | 24.28 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.44 | 0.39 | 0.35 | 0.20 | 0.44 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.49 | 1.09 | 2.31 | 1.22 | (9.02 | ) | ||||||||||||||||
Total from investment operations | 2.93 | 1.48 | 2.66 | 1.42 | (8.58 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.40 | ) | (0.36 | ) | (0.24 | ) | (0.42 | ) | (0.42 | ) | ||||||||||||
Net asset value at end of period | 22.35 | 19.82 | 18.70 | 16.28 | 15.28 | |||||||||||||||||
Total return (%) | 15.09 | 7.97 | 16.50 | 9.81 | (35.92 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.09 | 0.09 | 0.09 | 0.13 | 2 | 0.19 | ||||||||||||||||
Gross operating expenses | 0.10 | 0.10 | 0.10 | 0.16 | 0.21 | |||||||||||||||||
Net investment income (loss) | 2.09 | 1.96 | 1.97 | 2.09 | 2.06 | |||||||||||||||||
Portfolio turnover rate | 2 | 3 | 2 | 3 | 3 | 3 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 12,687 | 10,909 | 10,007 | 8,718 | 2,598 |
1 Effective September 9, 2009, the Investor Share class, the e.Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
3 Portfolio turnover excludes the impact of investment activity resulting from a merger with another fund.
See financial notes 17
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2012
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .4% | Common Stock | 9,225,822,139 | 12,480,987,418 | ||||||||
1 | .4% | Short-Term Investments | 179,821,589 | 179,821,589 | ||||||||
99 | .8% | Total Investments | 9,405,643,728 | 12,660,809,007 | ||||||||
0 | .2% | Collateral Invested for Securities on Loan | 31,508,589 | 31,508,589 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | (5,367,984 | ) | ||||||||
100 | .0% | Net Assets | 12,686,949,612 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.4% of net assets | ||||||||||||
Automobiles & Components 0.6% | ||||||||||||
Other Securities | 0.6 | 80,260,645 | ||||||||||
Banks 2.8% | ||||||||||||
U.S. Bancorp | 1,872,428 | 0.5 | 62,183,334 | |||||||||
Wells Fargo & Co. | 4,854,909 | 1.3 | 163,561,884 | |||||||||
Other Securities | 1.0 | 132,516,025 | ||||||||||
2.8 | 358,261,243 | |||||||||||
Capital Goods 7.5% | ||||||||||||
3M Co. | 628,619 | 0.4 | 55,067,024 | |||||||||
Caterpillar, Inc. | 645,662 | 0.4 | 54,758,594 | |||||||||
General Electric Co. | 10,435,252 | 1.7 | 219,766,407 | |||||||||
United Technologies Corp. | 829,035 | 0.5 | 64,797,376 | |||||||||
Other Securities | 4.5 | 561,454,899 | ||||||||||
7.5 | 955,844,300 | |||||||||||
Commercial & Professional Supplies 0.7% | ||||||||||||
Other Securities | 0.7 | 83,683,994 | ||||||||||
Consumer Durables & Apparel 1.0% | ||||||||||||
Other Securities | 1.0 | 130,109,338 | ||||||||||
Consumer Services 1.8% | ||||||||||||
McDonald’s Corp. | 996,638 | 0.7 | 86,508,178 | |||||||||
Other Securities | 1.1 | 143,576,565 | ||||||||||
1.8 | 230,084,743 | |||||||||||
Diversified Financials 6.1% | ||||||||||||
American Express Co. | 973,041 | 0.4 | 54,461,105 | |||||||||
Bank of America Corp. | 10,650,811 | 0.8 | 99,265,558 | |||||||||
Citigroup, Inc. | 2,898,147 | 0.9 | 108,361,716 | |||||||||
JPMorgan Chase & Co. | 3,754,331 | 1.2 | 156,480,516 | |||||||||
The Charles Schwab Corp. (a) | 1,085,681 | 0.1 | 14,743,548 | |||||||||
The Goldman Sachs Group, Inc. | 445,369 | 0.4 | 54,508,712 | |||||||||
Other Securities | 2.3 | 284,800,054 | ||||||||||
6.1 | 772,621,209 | |||||||||||
Energy 11.1% | ||||||||||||
Chevron Corp. | 1,939,134 | 1.7 | 213,711,958 | |||||||||
ConocoPhillips | 1,200,290 | 0.5 | 69,436,776 | |||||||||
Exxon Mobil Corp. | 4,561,941 | 3.3 | 415,912,161 | |||||||||
Occidental Petroleum Corp. | 800,450 | 0.5 | 63,203,532 | |||||||||
Schlumberger Ltd. | 1,311,515 | 0.7 | 91,189,638 | |||||||||
Other Securities | 4.4 | 550,945,804 | ||||||||||
11.1 | 1,404,399,869 | |||||||||||
Food & Staples Retailing 2.4% | ||||||||||||
CVS Caremark Corp. | 1,258,851 | 0.5 | 58,410,686 | |||||||||
Wal-Mart Stores, Inc. | 1,661,002 | 1.0 | 124,608,370 | |||||||||
Other Securities | 0.9 | 122,798,638 | ||||||||||
2.4 | 305,817,694 | |||||||||||
Food, Beverage & Tobacco 6.0% | ||||||||||||
Altria Group, Inc. | 2,008,991 | 0.5 | 63,885,914 | |||||||||
PepsiCo, Inc. | 1,538,063 | 0.8 | 106,495,482 | |||||||||
Philip Morris International, Inc. | 1,665,946 | 1.2 | 147,536,178 | |||||||||
The Coca-Cola Co. | 3,826,356 | 1.1 | 142,263,916 | |||||||||
Other Securities | 2.4 | 298,304,914 | ||||||||||
6.0 | 758,486,404 | |||||||||||
Health Care Equipment & Services 3.8% | ||||||||||||
UnitedHealth Group, Inc. | 1,011,410 | 0.4 | 56,638,960 | |||||||||
Other Securities | 3.4 | 423,558,985 | ||||||||||
3.8 | 480,197,945 | |||||||||||
Household & Personal Products 2.4% | ||||||||||||
The Procter & Gamble Co. | 2,721,990 | 1.5 | 188,470,588 | |||||||||
Other Securities | 0.9 | 109,021,461 | ||||||||||
2.4 | 297,492,049 | |||||||||||
Insurance 3.9% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 1,812,330 | 1.2 | 156,494,696 | |||||||||
Other Securities | 2.7 | 334,390,634 | ||||||||||
3.9 | 490,885,330 | |||||||||||
Materials 3.4% | ||||||||||||
Other Securities | 3.4 | 435,381,741 |
18 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Media 3.5% | ||||||||||||
Comcast Corp., Class A | 2,644,464 | 0.8 | 99,193,845 | |||||||||
The Walt Disney Co. | 1,773,283 | 0.7 | 87,014,997 | |||||||||
Other Securities | 2.0 | 255,040,771 | ||||||||||
3.5 | 441,249,613 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.2% | ||||||||||||
Abbott Laboratories | 1,550,986 | 0.8 | 101,620,603 | |||||||||
Amgen, Inc. | 760,959 | 0.5 | 65,857,197 | |||||||||
Bristol-Myers Squibb Co. | 1,659,364 | 0.4 | 55,173,853 | |||||||||
Johnson & Johnson | 2,724,725 | 1.5 | 192,965,025 | |||||||||
Merck & Co., Inc. | 3,010,014 | 1.1 | 137,346,939 | |||||||||
Pfizer, Inc. | 7,382,033 | 1.4 | 183,591,161 | |||||||||
Other Securities | 2.5 | 304,382,993 | ||||||||||
8.2 | 1,040,937,771 | |||||||||||
Real Estate 2.1% | ||||||||||||
Other Securities | 2.1 | 270,996,641 | ||||||||||
Retailing 4.0% | ||||||||||||
Amazon.com, Inc. * | 357,380 | 0.7 | 83,205,212 | |||||||||
The Home Depot, Inc. | 1,491,550 | 0.7 | 91,551,339 | |||||||||
Other Securities | 2.6 | 332,561,522 | ||||||||||
4.0 | 507,318,073 | |||||||||||
Semiconductors & Semiconductor Equipment 1.9% | ||||||||||||
Intel Corp. | 4,944,405 | 0.8 | 106,922,758 | |||||||||
Other Securities | 1.1 | 139,066,042 | ||||||||||
1.9 | 245,988,800 | |||||||||||
Software & Services 9.3% | ||||||||||||
eBay, Inc. * | 1,146,269 | 0.4 | 55,353,330 | |||||||||
Google, Inc., Class A * | 261,796 | 1.4 | 177,961,067 | |||||||||
International Business Machines Corp. | 1,061,590 | 1.6 | 206,511,103 | |||||||||
Microsoft Corp. | 7,456,731 | 1.7 | 212,777,819 | |||||||||
Oracle Corp. | 3,786,586 | 0.9 | 117,573,495 | |||||||||
Visa, Inc., Class A | 516,600 | 0.6 | 71,683,416 | |||||||||
Other Securities | 2.7 | 336,172,775 | ||||||||||
9.3 | 1,178,033,005 | |||||||||||
Technology Hardware & Equipment 7.6% | ||||||||||||
Apple, Inc. | 926,434 | 4.3 | 551,320,873 | |||||||||
Cisco Systems, Inc. | 5,241,228 | 0.7 | 89,834,648 | |||||||||
QUALCOMM, Inc. | 1,683,365 | 0.8 | 98,603,105 | |||||||||
Other Securities | 1.8 | 222,519,840 | ||||||||||
7.6 | 962,278,466 | |||||||||||
Telecommunication Services 3.1% | ||||||||||||
AT&T, Inc. | 5,695,136 | 1.6 | 196,994,754 | |||||||||
Verizon Communications, Inc. | 2,815,578 | 1.0 | 125,687,402 | |||||||||
Other Securities | 0.5 | 72,916,996 | ||||||||||
3.1 | 395,599,152 | |||||||||||
Transportation 1.6% | ||||||||||||
Union Pacific Corp. | 464,175 | 0.5 | 57,107,450 | |||||||||
Other Securities | 1.1 | 145,373,069 | ||||||||||
1.6 | 202,480,519 | |||||||||||
Utilities 3.6% | ||||||||||||
Other Securities | 3.6 | 452,578,874 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $9,225,822,139) | 12,480,987,418 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 1.4% of net assets | ||||||||||||
Time Deposits 1.3% | ||||||||||||
BNP Paribas | ||||||||||||
0.03%, 11/01/12 | 88,564,698 | 0.7 | 88,564,698 | |||||||||
Other Securities | 0.6 | 80,478,432 | ||||||||||
1.3 | 169,043,130 | |||||||||||
U.S. Treasury Obligations 0.1% | ||||||||||||
Other Securities | 0.1 | 10,778,459 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $179,821,589) | 179,821,589 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.2% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund | 31,508,589 | 0.2 | 31,508,589 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $31,508,589) | 31,508,589 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12, tax basis cost of the fund’s investments was $9,446,008,739 and the unrealized appreciation and depreciation were $4,389,637,779 and ($1,174,837,511), respectively, with a net unrealized appreciation of $3,214,800,268.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is on loan. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
See financial notes 19
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 2,500 | 175,850,000 | (5,136,125 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $12,480,987,418 | $— | $— | $12,480,987,418 | ||||||||||||
Short-Term Investments1 | — | 179,821,589 | — | 179,821,589 | ||||||||||||
Total | $12,480,987,418 | $179,821,589 | $— | $12,660,809,007 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $31,508,589 | $— | $— | $31,508,589 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($5,136,125 | ) | $— | $— | ($5,136,125 | ) |
1 | As categorized in complete schedule of holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
20 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated issuers, at value (cost $12,551,700) | $14,743,548 | |||||
Investments in unaffiliated issuers, at value (cost $9,393,092,028) including securities on loan of $31,036,509 | + | 12,646,065,459 | ||||
Total investments, at value (cost $9,405,643,728) | 12,660,809,007 | |||||
Cash | 51,475 | |||||
Collateral invested for securities on loan | 31,508,589 | |||||
Receivables: | ||||||
Fund shares sold | 29,246,054 | |||||
Dividends | 14,737,433 | |||||
Income from securities on loan | 54,232 | |||||
Foreign tax reclaims | 22,821 | |||||
Prepaid expenses | + | 255,858 | ||||
Total assets | 12,736,685,469 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 31,508,589 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 56,667 | |||||
Shareholder service fees | 22,157 | |||||
Fund shares redeemed | 17,773,209 | |||||
Due to brokers for futures | 100,000 | |||||
Accrued expenses | + | 275,235 | ||||
Total liabilities | 49,735,857 | |||||
Net Assets | ||||||
Total assets | 12,736,685,469 | |||||
Total liabilities | − | 49,735,857 | ||||
Net assets | $12,686,949,612 | |||||
Net Assets by Source | ||||||
Capital received from investors | 9,687,771,668 | |||||
Net investment income not yet distributed | 200,192,592 | |||||
Net realized capital losses | (451,043,802 | ) | ||||
Net unrealized capital gains | 3,250,029,154 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$12,686,949,612 | 567,542,349 | $22.35 |
See financial notes 21
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated issuer | $251,479 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $72) | 259,344,993 | |||||
Interest | 57,705 | |||||
Securities on loan | + | 906,094 | ||||
Total investment income | 260,560,271 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 7,167,350 | |||||
Shareholder service fees | 2,319,964 | |||||
Transfer agent fees | 556,280 | |||||
Shareholder reports | 316,052 | |||||
Portfolio accounting fees | 279,665 | |||||
Custodian fees | 219,042 | |||||
Registration fees | 189,844 | |||||
Professional fees | 95,087 | |||||
Trustees’ fees | 83,697 | |||||
State filing fee reimbursement (Note 4) | (27,175 | ) | ||||
Other expenses | + | 357,449 | ||||
Total expenses | 11,557,255 | |||||
Expense reduction by CSIM and its affiliates1 | − | 806,252 | ||||
Net expenses | − | 10,751,003 | ||||
Net investment income | 249,809,268 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on investments | (1,233,233 | ) | ||||
Net realized gains on futures contracts | + | 36,168,842 | ||||
Net realized gains | 34,935,609 | |||||
Net unrealized gains on affiliated issuer | 1,290,265 | |||||
Net unrealized gains on unaffiliated investments | 1,377,702,361 | |||||
Net unrealized losses on futures contracts | + | (13,253,988 | ) | |||
Net unrealized gains | + | 1,365,738,638 | ||||
Net realized and unrealized gains | 1,400,674,247 | |||||
Increase in net assets resulting from operations | $1,650,483,515 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $27,175. See financial note 4 for additional information. |
22 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $249,809,268 | $212,608,956 | ||||||||
Net realized gains | 34,935,609 | 137,575,248 | ||||||||
Net unrealized gains | + | 1,365,738,638 | 450,444,867 | |||||||
Increase in net assets from operations | 1,650,483,515 | 800,629,071 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($218,494,240 | ) | ($191,615,698 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 94,452,205 | $2,011,893,595 | 93,309,499 | $1,842,476,643 | ||||||||||||||
Shares reinvested | 10,225,170 | 196,221,005 | 9,010,183 | 172,725,206 | ||||||||||||||
Shares redeemed | + | (87,533,037 | ) | (1,861,743,855 | ) | (87,190,945 | ) | (1,722,551,980 | ) | |||||||||
Net transactions in fund shares | 17,144,338 | $346,370,745 | 15,128,737 | $292,649,869 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 17,144,338 | 1,778,360,020 | 15,128,737 | 901,663,242 | |||||||||||||
End of period | 567,542,349 | $12,686,949,612 | 550,398,011 | $10,908,589,592 | ||||||||||||||
Net investment income not yet distributed | $200,192,592 | $171,894,015 |
See financial notes 23
Table of Contents
Schwab 1000 Index® Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 37.44 | 35.79 | 31.00 | 28.69 | 45.81 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.71 | 2 | 0.62 | 2 | 0.57 | 2 | 0.54 | 2 | 0.66 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 4.32 | 2.07 | 4.80 | 2.41 | (17.13 | ) | ||||||||||||||||
Total from investment operations | 5.03 | 2.69 | 5.37 | 2.95 | (16.47 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.72 | ) | (0.57 | ) | (0.58 | ) | (0.64 | ) | (0.62 | ) | ||||||||||||
Distributions from net realized gains | (1.52 | ) | (0.47 | ) | — | — | (0.03 | ) | ||||||||||||||
Total distributions | (2.24 | ) | (1.04 | ) | (0.58 | ) | (0.64 | ) | (0.65 | ) | ||||||||||||
Net asset value at end of period | 40.23 | 37.44 | 35.79 | 31.00 | 28.69 | |||||||||||||||||
Total return (%) | 14.38 | 7.60 | 17.51 | 10.72 | (36.43 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.29 | 0.29 | 0.29 | 0.38 | 3 | 0.49 | ||||||||||||||||
Gross operating expenses | 0.34 | 0.34 | 0.35 | 0.44 | 0.49 | |||||||||||||||||
Net investment income (loss) | 1.85 | 1.64 | 1.71 | 1.96 | 1.68 | |||||||||||||||||
Portfolio turnover rate | 4 | 5 | 5 | 4 | 4 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 4,848 | 4,552 | 4,575 | 4,279 | 2,260 |
1 Effective September 18, 2009, the Select Share class and the Investor Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Investor Shares.
2 Calculated based on the average shares outstanding during the period.
3 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
24 See financial notes
Table of Contents
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2012
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 | .5% | Common Stock | 1,982,137,394 | 4,824,056,196 | ||||||||
0 | .4% | Other Investment Company | 20,278,008 | 20,278,008 | ||||||||
0 | .1% | Short-Term Investment | 1,430,820 | 1,430,820 | ||||||||
100 | .0% | Total Investments | 2,003,846,222 | 4,845,765,024 | ||||||||
0 | .5% | Collateral Invested for Securities on Loan | 23,866,457 | 23,866,457 | ||||||||
(0 | .5)% | Other Assets and Liabilities, Net | (21,633,884 | ) | ||||||||
100 | .0% | Net Assets | 4,847,997,597 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.5% of net assets | ||||||||||||
Automobiles & Components 0.9% | ||||||||||||
Other Securities | 0.9 | 42,006,982 | ||||||||||
Banks 2.9% | ||||||||||||
U.S. Bancorp | 641,705 | 0.4 | 21,311,023 | |||||||||
Wells Fargo & Co. | 1,666,696 | 1.2 | 56,150,988 | |||||||||
Other Securities | 1.3 | 62,754,309 | ||||||||||
2.9 | 140,216,320 | |||||||||||
Capital Goods 7.9% | ||||||||||||
3M Co. | 215,754 | 0.4 | 18,900,050 | |||||||||
Caterpillar, Inc. | 221,596 | 0.4 | 18,793,557 | |||||||||
General Electric Co. | 3,580,702 | 1.6 | 75,409,584 | |||||||||
United Technologies Corp. | 284,603 | 0.5 | 22,244,571 | |||||||||
Other Securities | 5.0 | 248,406,917 | ||||||||||
7.9 | 383,754,679 | |||||||||||
Commercial & Professional Supplies 0.8% | ||||||||||||
Other Securities | 0.8 | 37,601,568 | ||||||||||
Consumer Durables & Apparel 1.3% | ||||||||||||
Other Securities | 1.3 | 63,321,355 | ||||||||||
Consumer Services 2.0% | ||||||||||||
McDonald’s Corp. | 341,436 | 0.6 | 29,636,645 | |||||||||
Other Securities | 1.4 | 67,563,335 | ||||||||||
2.0 | 97,199,980 | |||||||||||
Diversified Financials 5.8% | ||||||||||||
American Express Co. | 334,677 | 0.4 | 18,731,872 | |||||||||
Bank of America Corp. | 3,646,541 | 0.7 | 33,985,762 | |||||||||
Citigroup, Inc. | 994,956 | 0.8 | 37,201,405 | |||||||||
JPMorgan Chase & Co. | 1,288,878 | 1.1 | 53,720,435 | |||||||||
The Charles Schwab Corp. (a) | 367,065 | 0.1 | 4,984,743 | |||||||||
The Goldman Sachs Group, Inc. | 152,932 | 0.4 | 18,717,348 | |||||||||
Other Securities | 2.3 | 112,737,600 | ||||||||||
5.8 | 280,079,165 | |||||||||||
Energy 10.6% | ||||||||||||
Chevron Corp. | 666,837 | 1.5 | 73,492,106 | |||||||||
ConocoPhillips | 412,066 | 0.5 | 23,838,018 | |||||||||
Exxon Mobil Corp. | 1,566,163 | 2.9 | 142,787,081 | |||||||||
Occidental Petroleum Corp. | 274,816 | 0.4 | 21,699,471 | |||||||||
Schlumberger Ltd. | 450,647 | 0.6 | 31,333,486 | |||||||||
Other Securities | 4.7 | 221,016,585 | ||||||||||
10.6 | 514,166,747 | |||||||||||
Food & Staples Retailing 2.2% | ||||||||||||
CVS Caremark Corp. | 433,511 | 0.4 | 20,114,910 | |||||||||
Wal-Mart Stores, Inc. | 570,227 | 0.9 | 42,778,430 | |||||||||
Other Securities | 0.9 | 45,886,238 | ||||||||||
2.2 | 108,779,578 | |||||||||||
Food, Beverage & Tobacco 5.4% | ||||||||||||
Altria Group, Inc. | 689,705 | 0.5 | 21,932,619 | |||||||||
PepsiCo, Inc. | 526,885 | 0.8 | 36,481,517 | |||||||||
Philip Morris International, Inc. | 571,965 | 1.0 | 50,653,220 | |||||||||
The Coca-Cola Co. | 1,313,648 | 1.0 | 48,841,433 | |||||||||
Other Securities | 2.1 | 103,757,155 | ||||||||||
5.4 | 261,665,944 | |||||||||||
Health Care Equipment & Services 3.9% | ||||||||||||
UnitedHealth Group, Inc. | 350,392 | 0.4 | 19,621,952 | |||||||||
Other Securities | 3.5 | 168,713,730 | ||||||||||
3.9 | 188,335,682 | |||||||||||
Household & Personal Products 2.2% | ||||||||||||
The Procter & Gamble Co. | 934,519 | 1.3 | 64,706,096 | |||||||||
Other Securities | 0.9 | 44,335,635 | ||||||||||
2.2 | 109,041,731 | |||||||||||
Insurance 4.1% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 622,212 | 1.1 | 53,728,006 | |||||||||
Other Securities | 3.0 | 144,722,572 | ||||||||||
4.1 | 198,450,578 | |||||||||||
Materials 3.8% | ||||||||||||
Other Securities | 3.8 | 185,543,441 |
See financial notes 25
Table of Contents
Schwab 1000 Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Media 3.6% | ||||||||||||
Comcast Corp., Class A | 909,123 | 0.7 | 34,101,204 | |||||||||
The Walt Disney Co. | 608,760 | 0.6 | 29,871,853 | |||||||||
Other Securities | 2.3 | 109,294,723 | ||||||||||
3.6 | 173,267,780 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.9% | ||||||||||||
Abbott Laboratories | 532,446 | 0.7 | 34,885,862 | |||||||||
Amgen, Inc. | 260,702 | 0.5 | 22,562,455 | |||||||||
Bristol-Myers Squibb Co. | 569,639 | 0.4 | 18,940,497 | |||||||||
Johnson & Johnson | 935,387 | 1.4 | 66,244,107 | |||||||||
Merck & Co., Inc. | 1,033,318 | 1.0 | 47,150,300 | |||||||||
Pfizer, Inc. | 2,530,651 | 1.3 | 62,937,290 | |||||||||
Other Securities | 2.6 | 132,420,969 | ||||||||||
7.9 | 385,141,480 | |||||||||||
Real Estate 3.0% | ||||||||||||
Other Securities | 3.0 | 147,502,663 | ||||||||||
Retailing 4.3% | ||||||||||||
Amazon.com, Inc. * | 122,741 | 0.6 | 28,576,560 | |||||||||
The Home Depot, Inc. | 511,435 | 0.6 | 31,391,880 | |||||||||
Other Securities | 3.1 | 146,699,964 | ||||||||||
4.3 | 206,668,404 | |||||||||||
Semiconductors & Semiconductor Equipment 1.9% | ||||||||||||
Intel Corp. | 1,700,280 | 0.8 | 36,768,555 | |||||||||
Other Securities | 1.1 | 56,818,666 | ||||||||||
1.9 | 93,587,221 | |||||||||||
Software & Services 9.3% | ||||||||||||
eBay, Inc. * | 393,470 | 0.4 | 19,000,666 | |||||||||
Google, Inc., Class A * | 89,876 | 1.3 | 61,095,009 | |||||||||
International Business Machines Corp. | 364,440 | 1.5 | 70,894,513 | |||||||||
Microsoft Corp. | 2,559,938 | 1.5 | 73,047,831 | |||||||||
Oracle Corp. | 1,292,110 | 0.8 | 40,120,015 | |||||||||
Visa, Inc., Class A | 177,300 | 0.5 | 24,602,148 | |||||||||
Other Securities | 3.3 | 161,756,831 | ||||||||||
9.3 | 450,517,013 | |||||||||||
Technology Hardware & Equipment 7.2% | ||||||||||||
Apple, Inc. | 318,050 | 3.9 | 189,271,555 | |||||||||
Cisco Systems, Inc. | 1,794,815 | 0.6 | 30,763,129 | |||||||||
QUALCOMM, Inc. | 578,278 | 0.7 | 33,872,634 | |||||||||
Other Securities | 2.0 | 92,902,316 | ||||||||||
7.2 | 346,809,634 | |||||||||||
Telecommunication Services 2.9% | ||||||||||||
AT&T, Inc. | 1,957,377 | 1.4 | 67,705,670 | |||||||||
Verizon Communications, Inc. | 966,557 | 0.9 | 43,147,105 | |||||||||
Other Securities | 0.6 | 31,500,815 | ||||||||||
2.9 | 142,353,590 | |||||||||||
Transportation 1.8% | ||||||||||||
Union Pacific Corp. | 159,662 | 0.4 | 19,643,216 | |||||||||
Other Securities | 1.4 | 66,441,334 | ||||||||||
1.8 | 86,084,550 | |||||||||||
Utilities 3.8% | ||||||||||||
Other Securities | 3.8 | 181,960,111 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $1,982,137,394) | 4,824,056,196 | |||||||||||
Other Investment Company 0.4% of net assets | ||||||||||||
Money Market Fund 0.4% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund | 20,278,008 | 0.4 | 20,278,008 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $20,278,008) | 20,278,008 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 1,430,820 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $1,430,820) | 1,430,820 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.5% of net assets | ||||||||||||
State Street Institutional U.S. Government Money Market Fund | 23,866,457 | 0.5 | 23,866,457 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $23,866,457) | 23,866,457 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12, tax basis cost of the fund’s investments was $1,980,916,319 and the unrealized appreciation and depreciation were $2,967,356,004 and ($102,507,299), respectively, with a net unrealized appreciation of $2,864,848,705.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is on loan. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
26 See financial notes
Table of Contents
Schwab 1000 Index Fund
Portfolio Holdings continued
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 280 | 19,695,200 | (665,290 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $4,617,387,792 | $— | $— | $4,617,387,792 | ||||||||||||
Retailing | 206,603,407 | — | 64,997 | 206,668,404 | ||||||||||||
Other Investment Company1 | 20,278,008 | — | — | 20,278,008 | ||||||||||||
Short-Term Investments1 | — | 1,430,820 | — | 1,430,820 | ||||||||||||
Total | $4,844,269,207 | $1,430,820 | $64,997 | $4,845,765,024 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $23,866,457 | $— | $— | $23,866,457 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($665,290 | ) | $— | $— | ($665,290 | ) |
1 | As categorized in complete schedule of holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | $— | $— | $4,047 | $60,950 | $— | $— | $— | $64,997 | ||||||||||||||||||||||||
Total | $— | $— | $4,047 | $60,950 | $— | $— | $— | $64,997 | ||||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was $4,047.
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 27
Table of Contents
Schwab 1000 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated issuers, at value (cost $1,803,228) | $4,984,743 | |||||
Investments in unaffiliated issuers, at value (cost $2,002,042,994) including securities on loan of $23,386,814 | + | 4,840,780,281 | ||||
Total investments, at value (cost $2,003,846,222) | 4,845,765,024 | |||||
Collateral invested for securities on loan | 23,866,457 | |||||
Receivables: | ||||||
Dividends | 5,589,281 | |||||
Fund shares sold | 2,870,135 | |||||
Income from securities on loan | 69,208 | |||||
Foreign tax reclaims | 7,846 | |||||
Interest | 956 | |||||
Prepaid expenses | + | 124,756 | ||||
Total assets | 4,878,293,663 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 23,866,457 | |||||
Payables: | ||||||
Investments bought | 60,950 | |||||
Investment adviser and administrator fees | 69,378 | |||||
Shareholder service fees | 40,344 | |||||
Fund shares redeemed | 6,091,741 | |||||
Due to brokers for futures | 14,778 | |||||
Accrued expenses | + | 152,418 | ||||
Total liabilities | 30,296,066 | |||||
Net Assets | ||||||
Total assets | 4,878,293,663 | |||||
Total liabilities | − | 30,296,066 | ||||
Net assets | $4,847,997,597 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,716,239,836 | |||||
Net investment income not yet distributed | 69,309,270 | |||||
Net realized capital gains | 221,194,979 | |||||
Net unrealized capital gains | 2,841,253,512 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$4,847,997,597 | 120,492,478 | $40.23 |
28 See financial notes
Table of Contents
Schwab 1000 Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated issuer | $86,284 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $89,066) | 100,914,058 | |||||
Interest | 10,650 | |||||
Securities on loan | + | 723,591 | ||||
Total investment income | 101,734,583 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 10,852,291 | |||||
Shareholder service fees | 4,633,485 | |||||
Shareholder reports | 195,027 | |||||
Portfolio accounting fees | 141,638 | |||||
Transfer agent fees | 137,141 | |||||
Custodian fees | 93,457 | |||||
Professional fees | 63,835 | |||||
Registration fees | 53,091 | |||||
Trustees’ fees | 48,806 | |||||
Interest expense | 2,292 | |||||
Other expenses | + | 118,816 | ||||
Total expenses | 16,339,879 | |||||
Expense reduction by CSIM and its affiliates | − | 2,559,048 | ||||
Custody credits | − | 141 | ||||
Net expenses | − | 13,780,690 | ||||
Net investment income | 87,953,893 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 195,449,231 | |||||
Net realized gains on futures contracts | + | 1,432,658 | ||||
Net realized gains | 196,881,889 | |||||
Net unrealized gains on affiliated issuer | 474,466 | |||||
Net unrealized gains on unaffiliated investments | 349,984,546 | |||||
Net unrealized losses on futures contracts | + | (665,290 | ) | |||
Net unrealized gains | + | 349,793,722 | ||||
Net realized and unrealized gains | 546,675,611 | |||||
Increase in net assets resulting from operations | $634,629,504 |
See financial notes 29
Table of Contents
Schwab 1000 Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $87,953,893 | $78,010,205 | ||||||||
Net realized gains | 196,881,889 | 201,802,116 | ||||||||
Net unrealized gains | + | 349,793,722 | 69,288,970 | |||||||
Increase in net assets from operations | 634,629,504 | 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
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 6,643,918 | $254,453,021 | 8,119,509 | $304,265,267 | ||||||||||||||
Shares reinvested | 6,777,525 | 235,112,352 | 3,151,858 | 114,822,202 | ||||||||||||||
Shares redeemed | + | (14,504,214 | ) | (557,797,536 | ) | (17,520,002 | ) | (660,242,679 | ) | |||||||||
Net transactions in fund shares | (1,082,771 | ) | ($68,232,163 | ) | (6,248,635 | ) | ($241,155,210 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (1,082,771 | ) | 296,443,133 | (6,248,635 | ) | (23,760,425 | ) | ||||||||||
End of period | 120,492,478 | $4,847,997,597 | 121,575,249 | $4,551,554,464 | ||||||||||||||
Net investment income not yet distributed | $69,309,270 | $68,967,233 |
30 See financial notes
Table of Contents
Schwab Small-Cap Index Fund®
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 20.55 | 19.18 | 15.14 | 13.85 | 25.35 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.33 | 2 | 0.25 | 2 | 0.22 | 2 | 0.18 | 2 | 0.33 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 1.89 | 1.37 | 3.97 | 1.40 | (7.89 | ) | ||||||||||||||||
Total from investment operations | 2.22 | 1.62 | 4.19 | 1.58 | (7.56 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.35 | ) | (0.20 | ) | (0.15 | ) | (0.29 | ) | (0.32 | ) | ||||||||||||
Distributions from net realized gains | (1.16 | ) | (0.05 | ) | — | — | (3.62 | ) | ||||||||||||||
Total distributions | (1.51 | ) | (0.25 | ) | (0.15 | ) | (0.29 | ) | (3.94 | ) | ||||||||||||
Net asset value at end of period | 21.26 | 20.55 | 19.18 | 15.14 | 13.85 | |||||||||||||||||
Total return (%) | 11.87 | 8.45 | 27.85 | 11.98 | (34.48 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.17 | 0.19 | 0.19 | 0.28 | 3 | 0.42 | ||||||||||||||||
Gross operating expenses | 0.21 | 0.19 | 0.20 | 0.33 | 0.42 | |||||||||||||||||
Net investment income (loss) | 1.63 | 1.18 | 1.23 | 1.41 | 1.78 | |||||||||||||||||
Portfolio turnover rate | 41 | 4 | 26 | 33 | 26 | 64 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,675 | 1,502 | 1,406 | 1,142 | 628 |
1 Effective August 21, 2009, the Investor Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Calculated based on the average shares outstanding during the period.
3 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
4 Portfolio turnover rate increase was mainly the result of trading activities in connection with the change in primary benchmark index effective December 14, 2011.
See financial notes 31
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2012
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 | .4% | Common Stock | 1,363,052,199 | 1,630,498,243 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | 591 | ||||||||
2 | .6% | Short-Term Investments | 43,991,885 | 43,991,885 | ||||||||
100 | .0% | Total Investments | 1,407,044,084 | 1,674,490,719 | ||||||||
5 | .6% | Collateral Invested for Securities on Loan | 93,407,211 | 93,407,211 | ||||||||
(5 | .6)% | Other Assets and Liabilities, Net | (93,156,428 | ) | ||||||||
100 | .0% | Net Assets | 1,674,741,502 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 97.4% of net assets | ||||||||||||
Automobiles & Components 0.8% | ||||||||||||
Other Securities | 0.8 | 13,785,346 | ||||||||||
Banks 8.2% | ||||||||||||
Hancock Holding Co. | 106,049 | 0.2 | 3,350,088 | |||||||||
Ocwen Financial Corp. * | 149,200 | 0.3 | 5,754,644 | |||||||||
Other Securities | 7.7 | 127,203,896 | ||||||||||
8.2 | 136,308,628 | |||||||||||
Capital Goods 8.8% | ||||||||||||
A.O. Smith Corp. | 54,295 | 0.2 | 3,299,507 | |||||||||
Acuity Brands, Inc. | 58,800 | 0.2 | 3,804,360 | |||||||||
CLARCOR, Inc. | 69,900 | 0.2 | 3,162,276 | |||||||||
Hexcel Corp. * | 138,383 | 0.2 | 3,537,070 | |||||||||
Middleby Corp. * | 26,152 | 0.2 | 3,267,692 | |||||||||
Robbins & Myers, Inc. | 53,500 | 0.2 | 3,171,480 | |||||||||
Teledyne Technologies, Inc. * | 51,200 | 0.2 | 3,278,336 | |||||||||
Woodward, Inc. | 96,000 | 0.2 | 3,216,000 | |||||||||
Other Securities | 7.2 | 121,273,685 | ||||||||||
8.8 | 148,010,406 | |||||||||||
Commercial & Professional Supplies 3.6% | ||||||||||||
Other Securities | 3.6 | 60,913,847 | ||||||||||
Consumer Durables & Apparel 3.1% | ||||||||||||
The Warnaco Group, Inc. * | 57,200 | 0.2 | 4,037,176 | |||||||||
Other Securities | 2.9 | 48,009,190 | ||||||||||
3.1 | 52,046,366 | |||||||||||
Consumer Services 4.1% | ||||||||||||
Domino’s Pizza, Inc. | 80,679 | 0.2 | 3,277,181 | |||||||||
Six Flags Entertainment Corp. | 55,000 | 0.2 | 3,141,050 | |||||||||
Other Securities | 3.7 | 62,867,321 | ||||||||||
4.1 | 69,285,552 | |||||||||||
Diversified Financials 3.2% | ||||||||||||
Other Securities | 3.2 | 54,217,032 | ||||||||||
Energy 5.8% | ||||||||||||
Dril-Quip, Inc. * | 55,800 | 0.2 | 3,864,708 | |||||||||
Energy XXI (Bermuda) Ltd. | 109,500 | 0.2 | 3,624,450 | |||||||||
Kodiak Oil & Gas Corp. * | 366,300 | 0.2 | 3,384,612 | |||||||||
Oasis Petroleum, Inc. * | 111,100 | 0.2 | 3,263,007 | |||||||||
Rosetta Resources, Inc. * | 73,600 | 0.2 | 3,388,544 | |||||||||
Other Securities | 4.8 | 79,522,559 | ||||||||||
5.8 | 97,047,880 | |||||||||||
Food & Staples Retailing 1.1% | ||||||||||||
United Natural Foods, Inc. * | 67,882 | 0.2 | 3,614,038 | |||||||||
Other Securities | 0.9 | 13,930,129 | ||||||||||
1.1 | 17,544,167 | |||||||||||
Food, Beverage & Tobacco 1.9% | ||||||||||||
Other Securities | 1.9 | 32,257,694 | ||||||||||
Health Care Equipment & Services 6.5% | ||||||||||||
athenahealth, Inc. * | 49,700 | 0.2 | 3,195,213 | |||||||||
Other Securities | 6.3 | 105,020,861 | ||||||||||
6.5 | 108,216,074 | |||||||||||
Household & Personal Products 0.6% | ||||||||||||
Other Securities | 0.6 | 9,613,379 | ||||||||||
Insurance 2.5% | ||||||||||||
First American Financial Corp. | 147,800 | 0.2 | 3,362,450 | |||||||||
Other Securities | 2.3 | 38,238,627 | ||||||||||
2.5 | 41,601,077 | |||||||||||
Materials 5.0% | ||||||||||||
Coeur d’Alene Mines Corp. * | 125,350 | 0.2 | 3,874,569 | |||||||||
Eagle Materials, Inc. | 67,890 | 0.2 | 3,596,133 | |||||||||
Other Securities | 4.6 | 76,406,191 | ||||||||||
5.0 | 83,876,893 | |||||||||||
Media 1.2% | ||||||||||||
Other Securities | 1.2 | 19,764,535 |
32 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.7% | ||||||||||||
Alkermes plc * | 170,242 | 0.2 | 3,154,584 | |||||||||
Cubist Pharmaceuticals, Inc. * | 87,932 | 0.2 | 3,772,283 | |||||||||
Jazz Pharmaceuticals plc * | 57,900 | 0.2 | 3,110,967 | |||||||||
Medicis Pharmaceutical Corp., Class A | 80,149 | 0.2 | 3,479,268 | |||||||||
Pharmacyclics, Inc. * | 75,400 | 0.3 | 4,604,678 | |||||||||
Seattle Genetics, Inc. * | 131,798 | 0.2 | 3,316,038 | |||||||||
Other Securities | 4.4 | 73,114,074 | ||||||||||
5.7 | 94,551,892 | |||||||||||
Real Estate 8.0% | ||||||||||||
CYS Investments, Inc. | 242,900 | 0.2 | 3,259,718 | |||||||||
Highwoods Properties, Inc. | 102,800 | 0.2 | 3,315,300 | |||||||||
Invesco Mortgage Capital, Inc. | 160,500 | 0.2 | 3,439,515 | |||||||||
Omega Healthcare Investors, Inc. | 147,000 | 0.2 | 3,372,180 | |||||||||
Starwood Property Trust, Inc. | 187,900 | 0.3 | 4,306,668 | |||||||||
Two Harbors Investment Corp. | 387,300 | 0.3 | 4,620,489 | |||||||||
Other Securities | 6.6 | 111,753,534 | ||||||||||
8.0 | 134,067,404 | |||||||||||
Retailing 4.3% | ||||||||||||
Other Securities | 4.3 | 72,242,319 | ||||||||||
Semiconductors & Semiconductor Equipment 3.3% | ||||||||||||
Cirrus Logic, Inc. * | 89,800 | 0.2 | 3,660,248 | |||||||||
Cymer, Inc. * | 43,165 | 0.2 | 3,439,819 | |||||||||
Other Securities | 2.9 | 48,790,324 | ||||||||||
3.3 | 55,890,391 | |||||||||||
Software & Services 8.1% | ||||||||||||
Aspen Technology, Inc. * | 130,200 | 0.2 | 3,226,356 | |||||||||
CommVault Systems, Inc. * | 62,100 | 0.2 | 3,879,387 | |||||||||
CoStar Group, Inc. * | 39,175 | 0.2 | 3,247,607 | |||||||||
Parametric Technology Corp. * | 166,100 | 0.2 | 3,351,898 | |||||||||
Ultimate Software Group, Inc. * | 37,100 | 0.2 | 3,760,456 | |||||||||
WEX, Inc. * | 54,076 | 0.2 | 3,989,727 | |||||||||
Other Securities | 6.9 | 113,710,935 | ||||||||||
8.1 | 135,166,366 | |||||||||||
Technology Hardware & Equipment 4.8% | ||||||||||||
Other Securities | 4.8 | 80,389,726 | ||||||||||
Telecommunication Services 0.7% | ||||||||||||
Other Securities | 0.7 | 11,516,315 | ||||||||||
Transportation 2.5% | ||||||||||||
Alaska Air Group, Inc. * | 98,800 | 0.2 | 3,778,112 | |||||||||
Genesee & Wyoming, Inc., Class A * | 61,600 | 0.3 | 4,464,152 | |||||||||
Old Dominion Freight Line, Inc. * | 99,124 | 0.2 | 3,324,619 | |||||||||
Other Securities | 1.8 | 29,861,864 | ||||||||||
2.5 | 41,428,747 | |||||||||||
Utilities 3.6% | ||||||||||||
Cleco Corp. | 84,600 | 0.2 | 3,650,490 | |||||||||
IDACORP, Inc. | 69,800 | 0.2 | 3,121,456 | |||||||||
Piedmont Natural Gas Co., Inc. | 99,700 | 0.2 | 3,177,439 | |||||||||
Other Securities | 3.0 | 50,806,822 | ||||||||||
3.6 | 60,756,207 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $1,363,052,199) | 1,630,498,243 | |||||||||||
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 | 591 | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | 591 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 2.6% of net assets | ||||||||||||
Time Deposit 2.5% | ||||||||||||
Royal Bank of Canada | ||||||||||||
0.03%, 11/01/12 | 41,374,248 | 2.5 | 41,374,248 | |||||||||
U.S. Treasury Obligations 0.1% | ||||||||||||
Other Securities | 0.1 | 2,617,637 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $43,991,885) | 43,991,885 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 5.6% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund | 93,407,211 | 5.6 | 93,407,211 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $93,407,211) | 93,407,211 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12 tax basis cost of the fund’s investments was $1,412,644,938 and the unrealized appreciation and depreciation were $406,103,935 and ($144,258,154), respectively, with a net unrealized appreciation of $261,845,781.
See financial notes 33
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
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 $320,070 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/21/12 | 510 | 41,631,300 | (1,350,122 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $1,482,487,837 | $— | $— | $1,482,487,837 | ||||||||||||
Capital Goods | 147,690,927 | — | 319,479 | 148,010,406 | ||||||||||||
Rights1 | — | — | — | — | ||||||||||||
Warrants | 591 | — | — | 591 | ||||||||||||
Short-Term Investments1 | — | 43,991,885 | — | 43,991,885 | ||||||||||||
Total | $1,630,179,355 | $43,991,885 | $319,479 | $1,674,490,719 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $93,407,211 | $— | $— | $93,407,211 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($1,350,122 | ) | $— | $— | ($1,350,122 | ) |
1 | As categorized in complete schedule of holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | $127,375 | ($3,526,188 | ) | $3,697,493 | $116,631 | ($95,832 | ) | $— | $— | $319,479 | ||||||||||||||||||||||
Total | $127,375 | ($3,526,188 | ) | $3,697,493 | $116,631 | ($95,832 | ) | $— | $— | $319,479 | ||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was $202,848.
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
34 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $1,407,044,084) including securities on loan of $90,461,226 | $1,674,490,719 | |||||
Collateral invested for securities on loan | 93,407,211 | |||||
Receivables: | ||||||
Investments sold | 350,272 | |||||
Fund shares sold | 3,865,849 | |||||
Dividends | 666,468 | |||||
Income from securities on loan | 379,680 | |||||
Due from broker for futures | 224,400 | |||||
Interest | 35 | |||||
Prepaid expenses | + | 38,106 | ||||
Total assets | 1,773,422,740 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 93,407,211 | |||||
Payables: | ||||||
Investments bought | 4,110,730 | |||||
Investment adviser and administrator fees | 12,497 | |||||
Shareholder service fees | 2,825 | |||||
Fund shares redeemed | 980,247 | |||||
Accrued expenses | + | 167,728 | ||||
Total liabilities | 98,681,238 | |||||
Net Assets | ||||||
Total assets | 1,773,422,740 | |||||
Total liabilities | − | 98,681,238 | ||||
Net assets | $1,674,741,502 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,351,648,137 | |||||
Net investment income not yet distributed | 21,861,474 | |||||
Net realized capital gains | 35,135,356 | |||||
Net unrealized capital gains | 266,096,535 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,674,741,502 | 78,771,380 | $21.26 |
See financial notes 35
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $27,069) | $24,289,577 | |||||
Interest | 6,664 | |||||
Securities on loan | + | 4,304,672 | ||||
Total investment income | 28,600,913 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,382,479 | |||||
Shareholder service fees | 311,248 | |||||
Index fee | 137,671 | |||||
Shareholder reports | 121,934 | |||||
Portfolio accounting fees | 88,897 | |||||
Transfer agent fees | 71,860 | |||||
Professional fees | 71,084 | |||||
Registration fees | 62,659 | |||||
Custodian fees | 50,916 | |||||
Trustees’ fees | 16,343 | |||||
Interest expense | 1,041 | |||||
State filing fee reimbursement (Note 4) | (4,304 | ) | ||||
Other expenses | + | 40,274 | ||||
Total expenses | 3,352,102 | |||||
Expense reduction by CSIM and its affiliates1 | − | 650,918 | ||||
Net expenses | − | 2,701,184 | ||||
Net investment income | 25,899,729 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 41,537,460 | |||||
Net realized gains on futures contracts | 1,218,580 | |||||
Net realized gains on foreign currency transactions | + | 19 | ||||
Net realized gains | 42,756,059 | |||||
Net unrealized gains on investments | 107,250,891 | |||||
Net unrealized losses on futures contracts | (1,557,114 | ) | ||||
Net unrealized gains on foreign currency translations | + | 22 | ||||
Net unrealized gains | + | 105,693,799 | ||||
Net realized and unrealized gains | 148,449,858 | |||||
Increase in net assets resulting from operations | $174,349,587 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $4,304. See financial note 4 for additional information. |
36 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $25,899,729 | $18,466,000 | ||||||||
Net realized gains | 42,756,059 | 95,376,181 | ||||||||
Net unrealized gains | + | 105,693,799 | 8,082,589 | |||||||
Increase in net assets from operations | 174,349,587 | 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
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 13,103,409 | $271,438,282 | 14,936,269 | $309,163,569 | ||||||||||||||
Shares reinvested | 5,456,861 | 101,552,188 | 814,081 | 16,827,051 | ||||||||||||||
Shares redeemed | + | (12,880,545 | ) | (264,077,786 | ) | (15,965,406 | ) | (333,977,185 | ) | |||||||||
Net transactions in fund shares | 5,679,725 | $108,912,684 | (215,056 | ) | ($7,986,565 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 5,679,725 | 173,065,492 | (215,056 | ) | 95,652,237 | ||||||||||||
End of period | 78,771,380 | $1,674,741,502 | 73,091,655 | $1,501,676,010 | ||||||||||||||
Net investment income not yet distributed | $21,861,474 | $21,301,466 |
See financial notes 37
Table of Contents
Schwab Total Stock Market Index Fund®
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 22.92 | 21.57 | 18.50 | 17.08 | 27.04 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.47 | 0.41 | 0.37 | 0.24 | 0.40 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.83 | 1.33 | 3.02 | 1.55 | (9.93 | ) | ||||||||||||||||
Total from investment operations | 3.30 | 1.74 | 3.39 | 1.79 | (9.53 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.42 | ) | (0.39 | ) | (0.32 | ) | (0.37 | ) | (0.37 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.06 | ) | ||||||||||||||||
Total distributions | (0.42 | ) | (0.39 | ) | (0.32 | ) | (0.37 | ) | (0.43 | ) | ||||||||||||
Net asset value at end of period | 25.80 | 22.92 | 21.57 | 18.50 | 17.08 | |||||||||||||||||
Total return (%) | 14.71 | 8.14 | 18.53 | 10.92 | (35.76 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.09 | 0.09 | 0.09 | 0.21 | 2 | 0.38 | ||||||||||||||||
Gross operating expenses | 0.10 | 0.11 | 0.11 | 0.28 | 0.38 | |||||||||||||||||
Net investment income (loss) | 2.02 | 1.79 | 1.85 | 2.02 | 1.71 | |||||||||||||||||
Portfolio turnover rate | 3 | 1 | 3 | 5 | 1 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,240 | 1,747 | 1,470 | 1,205 | 585 |
1 Effective September 18, 2009, the Investor Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
38 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2012
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 | 1,684,732,545 | 2,208,790,277 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
1 | .1% | Short-Term Investments | 24,098,126 | 24,098,126 | ||||||||
99 | .7% | Total Investments | 1,708,830,671 | 2,232,888,403 | ||||||||
0 | .8% | Collateral Invested for Securities on Loan | 18,504,950 | 18,504,950 | ||||||||
(0 | .5)% | Other Assets and Liabilities, Net | (11,715,225 | ) | ||||||||
100 | .0% | Net Assets | 2,239,678,128 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.6% of net assets | ||||||||||||
Automobiles & Components 0.8% | ||||||||||||
Other Securities | 0.8 | 18,343,892 | ||||||||||
Banks 3.3% | ||||||||||||
U.S. Bancorp | 270,431 | 0.4 | 8,981,014 | |||||||||
Wells Fargo & Co. | 701,006 | 1.1 | 23,616,892 | |||||||||
Other Securities | 1.8 | 41,440,364 | ||||||||||
3.3 | 74,038,270 | |||||||||||
Capital Goods 7.8% | ||||||||||||
3M Co. | 90,800 | 0.4 | 7,954,080 | |||||||||
Caterpillar, Inc. | 93,200 | 0.4 | 7,904,292 | |||||||||
General Electric Co. | 1,506,666 | 1.4 | 31,730,386 | |||||||||
United Technologies Corp. | 119,668 | 0.4 | 9,353,251 | |||||||||
Other Securities | 5.2 | 118,523,491 | ||||||||||
7.8 | 175,465,500 | |||||||||||
Commercial & Professional Supplies 1.1% | ||||||||||||
Other Securities | 1.1 | 24,726,338 | ||||||||||
Consumer Durables & Apparel 1.5% | ||||||||||||
Other Securities | 1.5 | 32,585,030 | ||||||||||
Consumer Services 2.1% | ||||||||||||
McDonald’s Corp. | 143,909 | 0.6 | 12,491,301 | |||||||||
Other Securities | 1.5 | 35,320,197 | ||||||||||
2.1 | 47,811,498 | |||||||||||
Diversified Financials 5.4% | ||||||||||||
American Express Co. | 140,750 | 0.4 | 7,877,777 | |||||||||
Bank of America Corp. | 1,537,856 | 0.6 | 14,332,818 | |||||||||
Citigroup, Inc. | 418,428 | 0.7 | 15,645,023 | |||||||||
JPMorgan Chase & Co. | 542,044 | 1.0 | 22,592,394 | |||||||||
The Charles Schwab Corp. (b) | 154,226 | 0.1 | 2,094,389 | |||||||||
The Goldman Sachs Group, Inc. | 64,300 | 0.4 | 7,869,677 | |||||||||
Other Securities | 2.2 | 50,463,170 | ||||||||||
5.4 | 120,875,248 | |||||||||||
Energy 10.2% | ||||||||||||
Chevron Corp. | 279,939 | 1.4 | 30,852,077 | |||||||||
ConocoPhillips | 173,323 | 0.4 | 10,026,735 | |||||||||
Exxon Mobil Corp. | 658,634 | 2.7 | 60,047,662 | |||||||||
Occidental Petroleum Corp. | 115,620 | 0.4 | 9,129,355 | |||||||||
Schlumberger Ltd. | 189,360 | 0.6 | 13,166,201 | |||||||||
Other Securities | 4.7 | 105,925,254 | ||||||||||
10.2 | 229,147,284 | |||||||||||
Food & Staples Retailing 2.1% | ||||||||||||
CVS Caremark Corp. | 181,590 | 0.4 | 8,425,776 | |||||||||
Wal-Mart Stores, Inc. | 239,800 | 0.8 | 17,989,796 | |||||||||
Other Securities | 0.9 | 19,781,324 | ||||||||||
2.1 | 46,196,896 | |||||||||||
Food, Beverage & Tobacco 5.2% | ||||||||||||
Altria Group, Inc. | 290,100 | 0.4 | 9,225,180 | |||||||||
PepsiCo, Inc. | 222,058 | 0.7 | 15,375,296 | |||||||||
Philip Morris International, Inc. | 240,500 | 1.0 | 21,298,680 | |||||||||
The Coca-Cola Co. | 552,500 | 0.9 | 20,541,950 | |||||||||
Other Securities | 2.2 | 51,069,761 | ||||||||||
5.2 | 117,510,867 | |||||||||||
Health Care Equipment & Services 4.1% | ||||||||||||
UnitedHealth Group, Inc. | 147,380 | 0.4 | 8,253,280 | |||||||||
Other Securities | 3.7 | 82,683,385 | ||||||||||
4.1 | 90,936,665 | |||||||||||
Household & Personal Products 2.1% | ||||||||||||
The Procter & Gamble Co. | 393,015 | 1.2 | 27,212,359 | |||||||||
Other Securities | 0.9 | 19,941,972 | ||||||||||
2.1 | 47,154,331 | |||||||||||
Insurance 4.0% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 261,674 | 1.0 | 22,595,550 | |||||||||
Other Securities | 3.0 | 66,564,740 | ||||||||||
4.0 | 89,160,290 |
See financial notes 39
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Materials 3.9% | ||||||||||||
Other Securities | 3.9 | 86,493,807 | ||||||||||
Media 3.4% | ||||||||||||
Comcast Corp., Class A | 322,304 | 0.5 | 12,089,623 | |||||||||
The Walt Disney Co. | 255,993 | 0.6 | 12,561,577 | |||||||||
Other Securities | 2.3 | 50,506,245 | ||||||||||
3.4 | 75,157,445 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.6% | ||||||||||||
Abbott Laboratories | 223,905 | 0.7 | 14,670,256 | |||||||||
Amgen, Inc. | 109,968 | 0.4 | 9,517,181 | |||||||||
Bristol-Myers Squibb Co. | 239,550 | 0.4 | 7,965,037 | |||||||||
Johnson & Johnson | 393,370 | 1.2 | 27,858,463 | |||||||||
Merck & Co., Inc. | 434,570 | 0.9 | 19,829,429 | |||||||||
Pfizer, Inc. | 1,065,901 | 1.2 | 26,508,958 | |||||||||
Other Securities | 2.8 | 64,824,705 | ||||||||||
7.6 | 171,174,029 | |||||||||||
Real Estate 3.7% | ||||||||||||
Other Securities | 3.7 | 81,728,836 | ||||||||||
Retailing 4.2% | ||||||||||||
Amazon.com, Inc. * | 51,600 | 0.5 | 12,013,512 | |||||||||
The Home Depot, Inc. | 215,070 | 0.6 | 13,200,997 | |||||||||
Other Securities | 3.1 | 68,947,583 | ||||||||||
4.2 | 94,162,092 | |||||||||||
Semiconductors & Semiconductor Equipment 2.0% | ||||||||||||
Intel Corp. | 713,932 | 0.7 | 15,438,779 | |||||||||
Other Securities | 1.3 | 29,881,171 | ||||||||||
�� | 2.0 | 45,319,950 | ||||||||||
Software & Services 9.1% | ||||||||||||
eBay, Inc. * | 165,448 | 0.4 | 7,989,484 | |||||||||
Google, Inc., Class A * | 37,765 | 1.1 | 25,671,514 | |||||||||
International Business Machines Corp. | 153,310 | 1.3 | 29,823,394 | |||||||||
Microsoft Corp. | 1,076,650 | 1.4 | 30,722,208 | |||||||||
Oracle Corp. | 543,449 | 0.8 | 16,874,091 | |||||||||
Visa, Inc., Class A | 74,600 | 0.5 | 10,351,496 | |||||||||
Other Securities | 3.6 | 83,212,469 | ||||||||||
9.1 | 204,644,656 | |||||||||||
Technology Hardware & Equipment 6.9% | ||||||||||||
Apple, Inc. | 133,800 | 3.6 | 79,624,380 | |||||||||
Cisco Systems, Inc. | 754,909 | 0.6 | 12,939,140 | |||||||||
QUALCOMM, Inc. | 243,100 | 0.6 | 14,239,582 | |||||||||
Other Securities | 2.1 | 47,544,636 | ||||||||||
6.9 | 154,347,738 | |||||||||||
Telecommunication Services 2.7% | ||||||||||||
AT&T, Inc. | 823,156 | 1.3 | 28,472,966 | |||||||||
Verizon Communications, Inc. | 406,472 | 0.8 | 18,144,910 | |||||||||
Other Securities | 0.6 | 14,696,524 | ||||||||||
2.7 | 61,314,400 | |||||||||||
Transportation 1.8% | ||||||||||||
Union Pacific Corp. | 67,600 | 0.4 | 8,316,828 | |||||||||
Other Securities | 1.4 | 31,058,374 | ||||||||||
1.8 | 39,375,202 | |||||||||||
Utilities 3.6% | ||||||||||||
Other Securities | 3.6 | 81,120,013 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $1,684,732,545) | 2,208,790,277 | |||||||||||
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 1.1% of net assets | ||||||||||||
Time Deposit 1.0% | ||||||||||||
Societe Generale | ||||||||||||
0.03%, 11/01/12 | 22,399,356 | 1.0 | 22,399,356 | |||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 1,698,770 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $24,098,126) | 24,098,126 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.8% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund | 18,504,950 | 0.8 | 18,504,950 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $18,504,950) | 18,504,950 | |||||||||||
End of Collateral Invested for Securities on Loan. |
40 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
At 10/31/12 the tax basis cost of the fund’s investments was $1,721,800,478 and the unrealized appreciation and depreciation were $678,801,448 and ($167,713,523), respectively, with a net unrealized appreciation of $511,087,925.
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 $54,704 or 0.0% of net assets. | |
(d) | All or a portion of this security is on loan. | |
(e) | All or a portion of this security is held as collateral for open futures contracts. | |
(f) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/21/12 | 45 | 3,673,350 | (74,614 | ) | ||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 310 | 21,805,400 | (427,367 | ) | ||||||||
Net unrealized losses | (501,981 | ) | ||||||||||
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $1,906,577,655 | $— | $— | $1,906,577,655 | ||||||||||||
Capital Goods | 175,412,096 | — | 53,404 | 175,465,500 | ||||||||||||
Consumer Durables & Apparel | 32,583,730 | — | 1,300 | 32,585,030 | ||||||||||||
Retailing | 94,130,405 | — | 31,687 | 94,162,092 | ||||||||||||
Rights1 | — | — | — | — | ||||||||||||
Warrants1 | — | — | — | — | ||||||||||||
Short-Term Investments1 | — | 24,098,126 | — | 24,098,126 | ||||||||||||
Total | $2,208,703,886 | $24,098,126 | $86,391 | $2,232,888,403 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $18,504,950 | $— | $— | $18,504,950 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | ($501,981 | ) | $— | $— | ($501,981 | ) |
1 | As categorized in complete schedule of holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | $8,367 | ($623,248 | ) | $649,260 | $51,105 | ($4,868 | ) | $5,775 | $— | $86,391 | ||||||||||||||||||||||
Rights | 29 | 3 | (29 | ) | (3 | ) | — | — | — | |||||||||||||||||||||||
Total | $8,396 | ($623,245 | ) | $649,231 | $51,105 | ($4,871 | ) | $5,775 | $— | $86,391 | ||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was $29,511.
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1 and Level 2 for the period ended October 31, 2012.
See financial notes 41
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated issuers, at value (cost $2,858,683) | $2,094,389 | |||||
Investments in unaffiliated issuers, at value (cost $1,705,971,988) including securities on loan of $18,013,429 | + | 2,230,794,014 | ||||
Total investments, at value (cost $1,708,830,671) | 2,232,888,403 | |||||
Cash | 75 | |||||
Collateral invested for securities on loan | 18,504,950 | |||||
Receivables: | ||||||
Fund shares sold | 5,848,955 | |||||
Dividends | 2,414,743 | |||||
Income from securities on loan | 53,363 | |||||
Due from broker for futures | 11,204 | |||||
Foreign tax reclaims | 3,253 | |||||
Prepaid expenses | + | 43,087 | ||||
Total assets | 2,259,768,033 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 18,504,950 | |||||
Payables: | ||||||
Investments bought | 259,503 | |||||
Investment adviser and administrator fees | 7,920 | |||||
Shareholder service fees | 3,787 | |||||
Fund shares redeemed | 1,220,214 | |||||
Accrued expenses | + | 93,531 | ||||
Total liabilities | 20,089,905 | |||||
Net Assets | ||||||
Total assets | 2,259,768,033 | |||||
Total liabilities | − | 20,089,905 | ||||
Net assets | $2,239,678,128 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,703,682,008 | |||||
Net investment income not yet distributed | 32,773,528 | |||||
Net realized capital losses | (20,333,159 | ) | ||||
Net unrealized capital gains | 523,555,751 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$2,239,678,128 | 86,821,058 | $25.80 |
42 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated issuer | $31,602 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $39,197) | 40,834,541 | |||||
Interest | 9,590 | |||||
Securities on loan | + | 565,075 | ||||
Total investment income | 41,440,808 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,180,226 | |||||
Shareholder service fees | 381,850 | |||||
Transfer agent fees | 107,227 | |||||
Portfolio accounting fees | 100,937 | |||||
Shareholder reports | 79,588 | |||||
Registration fees | 64,441 | |||||
Professional fees | 49,943 | |||||
Custodian fees | 45,543 | |||||
Trustees’ fees | 18,254 | |||||
Interest expense | 30 | |||||
State filing fee reimbursement (Note 4) | (11,512 | ) | ||||
Other expenses | + | 46,596 | ||||
Total expenses | 2,063,123 | |||||
Expense reduction by CSIM and its affiliates1 | − | 296,521 | ||||
Net expenses | − | 1,766,602 | ||||
Net investment income | 39,674,206 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 8,130,210 | |||||
Net realized gains on futures contracts | + | 3,929,040 | ||||
Net realized gains | 12,059,250 | |||||
Net unrealized gains on affiliated issuer | 174,471 | |||||
Net unrealized gains on unaffiliated investments | 212,369,531 | |||||
Net unrealized losses on futures contracts | + | (1,542,227 | ) | |||
Net unrealized gains | + | 211,001,775 | ||||
Net realized and unrealized gains | 223,061,025 | |||||
Increase in net assets resulting from operations | $262,735,231 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $11,512. See financial note 4 for additional information. |
See financial notes 43
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $39,674,206 | $30,636,588 | ||||||||
Net realized gains | 12,059,250 | 2,761,150 | ||||||||
Net unrealized gains | + | 211,001,775 | 81,349,337 | |||||||
Increase in net assets from operations | 262,735,231 | 114,747,075 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($32,188,219 | ) | ($26,769,873 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 21,918,622 | $541,100,465 | 22,264,739 | $513,941,756 | ||||||||||||||
Shares reinvested | 1,240,438 | 27,500,498 | 1,030,256 | 22,943,799 | ||||||||||||||
Shares redeemed | + | (12,563,348 | ) | (306,292,186 | ) | (15,226,159 | ) | (348,432,230 | ) | |||||||||
Net transactions in fund shares | 10,595,712 | $262,308,777 | 8,068,836 | $188,453,325 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 10,595,712 | 492,855,789 | 8,068,836 | 276,430,527 | |||||||||||||
End of period | 86,821,058 | $2,239,678,128 | 76,225,346 | $1,746,822,339 | ||||||||||||||
Net investment income not yet distributed | $32,773,528 | $25,269,704 |
44 See financial notes
Table of Contents
Schwab International Index Fund®
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 16.02 | 17.31 | 16.26 | 13.95 | 25.95 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.57 | 0.57 | 0.48 | 0.37 | 0.68 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.33 | (1.38 | ) | 1.01 | 2.58 | (12.13 | ) | |||||||||||||||
Total from investment operations | 0.90 | (0.81 | ) | 1.49 | 2.95 | (11.45 | ) | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.60 | ) | (0.48 | ) | (0.44 | ) | (0.64 | ) | (0.55 | ) | ||||||||||||
Net asset value at end of period | 16.32 | 16.02 | 17.31 | 16.26 | 13.95 | |||||||||||||||||
Total return (%) | 6.07 | (4.83 | ) | 9.31 | 22.55 | (45.02 | ) | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.19 | 0.19 | 0.19 | 0.32 | 2 | 0.50 | ||||||||||||||||
Gross operating expenses | 0.23 | 0.21 | 0.22 | 0.41 | 0.54 | |||||||||||||||||
Net investment income (loss) | 3.66 | 3.26 | 2.88 | 2.92 | 3.15 | |||||||||||||||||
Portfolio turnover rate | 31 | 3 | 10 | 13 | 21 | 10 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,415 | 1,375 | 1,471 | 1,369 | 711 |
1 Effective August 21, 2009, the Investor Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
3 Portfolio turnover rate increase was mainly the result of trading activities in connection with the change in primary benchmark index effective December 20, 2011.
See financial notes 45
Table of Contents
Schwab International Index Fund
Portfolio Holdings as of October 31, 2012
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 | .5% | Common Stock | 1,162,030,883 | 1,379,481,700 | ||||||||
0 | .6% | Preferred Stock | 5,868,851 | 8,184,188 | ||||||||
1 | .5% | Other Investment Company | 21,315,494 | 21,428,000 | ||||||||
0 | .0% | Short-Term Investment | 311,494 | 311,494 | ||||||||
99 | .6% | Total Investments | 1,189,526,722 | 1,409,405,382 | ||||||||
0 | .3% | Collateral Invested for Securities on Loan | 4,237,548 | 4,237,548 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 1,330,528 | |||||||||
100 | .0% | Net Assets | 1,414,973,458 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 97.5% of net assets | ||||||||||||
Australia 8.9% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | 360,234 | 0.7 | 9,503,422 | |||||||||
BHP Billiton Ltd. | 432,113 | 1.1 | 15,299,137 | |||||||||
Commonwealth Bank of Australia | 213,508 | 0.9 | 12,786,034 | |||||||||
National Australia Bank Ltd. | 300,095 | 0.6 | 8,019,955 | |||||||||
Westpac Banking Corp. | 410,808 | 0.8 | 10,860,904 | |||||||||
Other Securities | 4.8 | 69,319,607 | ||||||||||
8.9 | 125,789,059 | |||||||||||
Austria 0.3% | ||||||||||||
Other Securities | 0.3 | 3,878,772 | ||||||||||
Belgium 1.1% | ||||||||||||
Anheuser-Busch InBev N.V. | 107,945 | 0.6 | 9,027,556 | |||||||||
Other Securities | 0.5 | 6,707,248 | ||||||||||
1.1 | 15,734,804 | |||||||||||
Denmark 1.1% | ||||||||||||
Novo Nordisk A/S, Class B | 54,730 | 0.6 | 8,774,064 | |||||||||
Other Securities | 0.5 | 7,452,131 | ||||||||||
1.1 | 16,226,195 | |||||||||||
Finland 0.7% | ||||||||||||
Other Securities | 0.7 | 10,562,991 | ||||||||||
France 9.2% | ||||||||||||
BNP Paribas S.A. | 129,519 | 0.5 | 6,533,581 | |||||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 34,039 | 0.4 | 5,534,090 | |||||||||
Sanofi | 159,318 | 1.0 | 13,992,487 | |||||||||
Total S.A. | 285,793 | 1.0 | 14,395,452 | |||||||||
Other Securities | 6.3 | 89,441,363 | ||||||||||
9.2 | 129,896,973 | |||||||||||
Germany 7.9% | ||||||||||||
Allianz SE - Reg’d | 61,106 | 0.5 | 7,590,915 | |||||||||
BASF SE | 123,500 | 0.7 | 10,244,366 | |||||||||
Bayer AG - Reg’d | 111,137 | 0.7 | 9,690,373 | |||||||||
Daimler AG - Reg’d | 121,899 | 0.4 | 5,710,339 | |||||||||
Deutsche Bank AG - Reg’d | 124,475 | 0.4 | 5,669,970 | |||||||||
E.ON AG | 241,763 | 0.4 | 5,503,754 | |||||||||
SAP AG | 123,431 | 0.6 | 9,000,958 | |||||||||
Siemens AG - Reg’d | 110,665 | 0.8 | 11,150,484 | |||||||||
Other Securities | 3.4 | 47,261,205 | ||||||||||
7.9 | 111,822,364 | |||||||||||
Greece 0.1% | ||||||||||||
Other Securities | 0.1 | 780,828 | ||||||||||
Hong Kong 3.1% | ||||||||||||
Other Securities | 3.1 | 43,610,213 | ||||||||||
Ireland 0.3% | ||||||||||||
Other Securities | 0.3 | 3,748,710 | ||||||||||
Israel 0.6% | ||||||||||||
Other Securities | 0.6 | 8,325,266 | ||||||||||
Italy 2.2% | ||||||||||||
Eni S.p.A. | 340,912 | 0.6 | 7,844,694 | |||||||||
Other Securities | 1.6 | 23,606,464 | ||||||||||
2.2 | 31,451,158 | |||||||||||
Japan 19.2% | ||||||||||||
Honda Motor Co., Ltd. | 218,439 | 0.5 | 6,566,981 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 1,707,209 | 0.5 | 7,723,359 | |||||||||
Sumitomo Mitsui Financial Group, Inc. | 180,546 | 0.4 | 5,516,941 | |||||||||
Toyota Motor Corp. | 369,603 | 1.0 | 14,250,837 | |||||||||
Other Securities | 16.8 | 237,395,971 | ||||||||||
19.2 | 271,454,089 | |||||||||||
Netherlands 2.5% | ||||||||||||
Unilever N.V. CVA | 218,301 | 0.6 | 8,023,569 |
46 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 1.9 | 27,073,425 | ||||||||||
2.5 | 35,096,994 | |||||||||||
New Zealand 0.1% | ||||||||||||
Other Securities | 0.1 | 1,775,992 | ||||||||||
Norway 0.9% | ||||||||||||
Other Securities | 0.9 | 13,362,330 | ||||||||||
Portugal 0.2% | ||||||||||||
Other Securities | 0.2 | 2,337,686 | ||||||||||
Singapore 1.8% | ||||||||||||
Other Securities | 1.8 | 25,824,456 | ||||||||||
Spain 2.9% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 721,256 | 0.4 | 6,026,775 | |||||||||
Banco Santander S.A. | 1,319,541 | 0.7 | 9,935,095 | |||||||||
Telefonica S.A. | 540,302 | 0.5 | 7,131,329 | |||||||||
Other Securities | 1.3 | 17,595,930 | ||||||||||
2.9 | 40,689,129 | |||||||||||
Sweden 3.1% | ||||||||||||
Other Securities | 3.1 | 43,554,713 | ||||||||||
Switzerland 8.6% | ||||||||||||
Nestle S.A. - Reg’d | 442,233 | 2.0 | 28,076,565 | |||||||||
Novartis AG - Reg’d | 308,258 | 1.3 | 18,588,125 | |||||||||
Roche Holding AG | 94,150 | 1.3 | 18,135,653 | |||||||||
UBS AG - Reg’d * | 488,512 | 0.5 | 7,329,433 | |||||||||
Other Securities | 3.5 | 49,456,954 | ||||||||||
8.6 | 121,586,730 | |||||||||||
United Kingdom 22.7% | ||||||||||||
Anglo American plc | 186,285 | 0.4 | 5,740,225 | |||||||||
AstraZeneca plc | 169,309 | 0.6 | 7,851,663 | |||||||||
Barclays plc | 1,551,180 | 0.4 | 5,735,845 | |||||||||
BG Group plc | 456,581 | 0.6 | 8,477,284 | |||||||||
BHP Billiton plc | 283,039 | 0.6 | 9,071,742 | |||||||||
BP plc | 2,549,771 | 1.3 | 18,209,432 | |||||||||
British American Tobacco plc | 262,096 | 0.9 | 12,999,847 | |||||||||
Diageo plc | 336,445 | 0.7 | 9,618,457 | |||||||||
GlaxoSmithKline plc | 672,218 | 1.1 | 15,062,680 | |||||||||
HSBC Holdings plc | 2,431,036 | 1.7 | 23,968,271 | |||||||||
Rio Tinto plc | 179,629 | 0.6 | 8,973,620 | |||||||||
Royal Dutch Shell plc, A Shares | 495,336 | 1.2 | 16,996,320 | |||||||||
Royal Dutch Shell plc, B Shares | 354,342 | 0.9 | 12,533,927 | |||||||||
Standard Chartered plc | 320,089 | 0.5 | 7,578,602 | |||||||||
Tesco plc | 1,079,635 | 0.4 | 5,586,494 | |||||||||
Unilever plc | 173,067 | 0.5 | 6,455,942 | |||||||||
Vodafone Group plc | 6,613,226 | 1.3 | 17,959,085 | |||||||||
Other Securities | 9.0 | 129,152,812 | ||||||||||
22.7 | 321,972,248 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $1,162,030,883) | 1,379,481,700 | |||||||||||
Preferred Stock 0.6% of net assets | ||||||||||||
Germany 0.6% | ||||||||||||
Other Securities | 0.6 | 8,153,359 | ||||||||||
United Kingdom 0.0% | ||||||||||||
Other Securities | 0.0 | 30,829 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $5,868,851) | 8,184,188 | |||||||||||
Other Investment Company 1.5% of net assets | ||||||||||||
United States 1.5% | ||||||||||||
iShares MSCI EAFE Index Fund | 400,000 | 1.5 | 21,428,000 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $21,315,494) | 21,428,000 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.0% of net assets | ||||||||||||
Time Deposit 0.0% | ||||||||||||
Other Securities | 0.0 | 311,494 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $311,494) | 311,494 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.3% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund | 4,237,548 | 0.3 | 4,237,548 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $4,237,548) | 4,237,548 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12, the tax basis cost of the fund’s investments was $1,209,596,758 and the unrealized appreciation and depreciation were $364,596,385 and ($164,787,761), respectively, with a net unrealized appreciation of $199,808,624.
See financial notes 47
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
At 10/31/12, the values of certain foreign securities held by the fund aggregating $1,383,209,691 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. |
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 October 31, 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 Stock1 | $— | $833,941,880 | $— | $833,941,880 | ||||||||||||
Belgium | 108,305 | 15,626,499 | — | 15,734,804 | ||||||||||||
France | 311,361 | 129,585,612 | — | 129,896,973 | ||||||||||||
Greece | 586,074 | 194,754 | — | 780,828 | ||||||||||||
Ireland | 1,065,976 | 2,682,734 | — | 3,748,710 | ||||||||||||
Japan | 775,980 | 270,678,109 | — | 271,454,089 | ||||||||||||
Portugal | 433,164 | 1,904,522 | — | 2,337,686 | ||||||||||||
Switzerland | 1,144,508 | 120,442,222 | — | 121,586,730 | ||||||||||||
Preferred Stock1 | — | 8,153,359 | — | 8,153,359 | ||||||||||||
United Kingdom | — | — | 30,829 | 30,829 | ||||||||||||
Other Investment Company1 | 21,428,000 | — | — | 21,428,000 | ||||||||||||
Short-Term Investments1 | — | 311,494 | — | 311,494 | ||||||||||||
Total | $25,853,368 | $1,383,521,185 | $30,829 | $1,409,405,382 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $4,237,548 | $— | $— | $4,237,548 |
1 | 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 | October 31, | |||||||||||||||||||||||||
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 | — | — | 361 | 30,468 | — | — | — | 30,829 | ||||||||||||||||||||||||
Total | $32,986 | ($587 | ) | $187 | $30,468 | ($32,225 | ) | $— | $— | $30,829 | ||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was $361.
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $2,091,443 and $1,018,143 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended October 31, 2012. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation by the fund. There were no transfers in or out of Level 3 securities during the period.
48 See financial notes
Table of Contents
Schwab International Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $1,189,526,722) including securities on loan of $3,979,374 | $1,409,405,382 | |||||
Foreign currency, at value (cost $263) | 263 | |||||
Cash | 163 | |||||
Collateral invested for securities on loan | 4,237,548 | |||||
Receivables: | ||||||
Dividends | 3,538,503 | |||||
Fund shares sold | 3,188,932 | |||||
Foreign tax reclaims | 894,594 | |||||
Income from securities on loan | 12,846 | |||||
Prepaid expenses | + | 35,847 | ||||
Total assets | 1,421,314,078 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 4,237,548 | |||||
Payables: | ||||||
Investments bought | 30,829 | |||||
Investment adviser and administrator fees | 10,677 | |||||
Shareholder service fees | 2,547 | |||||
Fund shares redeemed | 1,873,434 | |||||
Accrued expenses | + | 185,585 | ||||
Total liabilities | 6,340,620 | |||||
Net Assets | ||||||
Total assets | 1,421,314,078 | |||||
Total liabilities | − | 6,340,620 | ||||
Net assets | $1,414,973,458 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,195,189,205 | |||||
Net investment income not yet distributed | 35,644,277 | |||||
Net realized capital losses | (35,658,274 | ) | ||||
Net unrealized capital gains | 219,798,250 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,414,973,458 | 86,678,890 | $16.32 |
See financial notes 49
Table of Contents
Schwab International Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $3,641,093) | $50,981,682 | |||||
Interest | 1,468 | |||||
Securities on loan | + | 1,164,903 | ||||
Total investment income | 52,148,053 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,033,613 | |||||
Shareholder service fees | 266,406 | |||||
Custodian fees | 249,578 | |||||
Index fee | 127,061 | |||||
Shareholder reports | 121,489 | |||||
Portfolio accounting fees | 99,259 | |||||
Transfer agent fees | 84,365 | |||||
Professional fees | 70,771 | |||||
Registration fees | 44,312 | |||||
Trustees’ fees | 15,243 | |||||
Interest expense | 9,848 | |||||
State filing fee reimbursement (Note 4) | (6,103 | ) | ||||
Other expenses | + | 48,368 | ||||
Total expenses | 3,164,210 | |||||
Expense reduction by CSIM and its affiliates1 | − | 578,516 | ||||
Net expenses | − | 2,585,694 | ||||
Net investment income | 49,562,359 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 54,779,055 | |||||
Net realized losses on foreign currency transactions | + | (90,061 | ) | |||
Net realized gains | 54,688,994 | |||||
Net unrealized losses on investments | (22,053,260 | ) | ||||
Net unrealized losses on foreign currency translations | + | (16,078 | ) | |||
Net unrealized losses | + | (22,069,338 | ) | |||
Net realized and unrealized gains | 32,619,656 | |||||
Increase in net assets resulting from operations | $82,182,015 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $6,103. See financial note 4 for additional information. |
50 See financial notes
Table of Contents
Schwab International Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $49,562,359 | $48,709,948 | ||||||||
Net realized gains | 54,688,994 | 35,464,233 | ||||||||
Net unrealized losses | + | (22,069,338 | ) | (151,198,441 | ) | |||||
Increase (Decrease) in net assets from operations | 82,182,015 | (67,024,260 | ) | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($51,830,156 | ) | ($40,811,469 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 14,938,008 | $230,299,984 | 15,538,810 | $265,131,011 | ||||||||||||||
Shares reinvested | 3,211,483 | 47,080,346 | 2,149,594 | 36,392,628 | ||||||||||||||
Shares redeemed | + | (17,316,607 | ) | (267,897,568 | ) | (16,818,082 | ) | (289,204,022 | ) | |||||||||
Net transactions in fund shares | 832,884 | $9,482,762 | 870,322 | $12,319,617 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 832,884 | 39,834,621 | 870,322 | (95,516,112 | ) | ||||||||||||
End of period | 86,678,890 | $1,414,973,458 | 85,846,006 | $1,375,138,837 | ||||||||||||||
Net investment income not yet distributed | $35,644,277 | $34,013,997 |
See financial notes 51
Table of Contents
Schwab Equity Index Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust, except Schwab 1000 Index Fund, which is a series of Schwab Investments. Both Schwab Capital Trust and Schwab Investments (the “trusts”) are no-load, open-end management investment companies. Each trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trusts as of the end of the period, including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) | Schwab Target 2035 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2040 Fund | |||
Schwab Small-Cap Index Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab Total Stock Market Index Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab International Index Fund | (formerly 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 Company Index Fund | |||
Schwab MarketTrack Balanced Portfolio | (formerly Schwab Fundamental International Small-Mid Company Index Fund) | |||
Schwab MarketTrack Conservative Portfolio | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Laudus Small-Cap MarketMasters Fund | (formerly Schwab Fundamental Emerging Markets Index Fund) | |||
Laudus International MarketMasters Fund | Schwab Monthly Income Fund – Moderate Payout | |||
Schwab Balanced Fund | Schwab Monthly Income Fund – Enhanced Payout | |||
Schwab Core Equity Fund | Schwab Monthly Income Fund – Maximum Payout | |||
Schwab Dividend Equity Fund | ||||
Schwab Large-Cap Growth Fund | Schwab Investments (organized October 26, 1990) | |||
Schwab Small-Cap Equity Fund | Schwab 1000 Index Fund | |||
Schwab Hedged Equity Fund | Schwab Short-Term Bond Market Fund | |||
Schwab Financial Services Fund | Schwab Premier Income Fund | |||
Schwab Health Care Fund | Schwab Total Bond Market Fund | |||
Schwab International Core Equity Fund | Schwab GNMA Fund | |||
Schwab Target 2010 Fund | Schwab Treasury Inflation Protected Securities Fund | |||
Schwab Target 2015 Fund | (formerly Schwab Inflation Protected Fund) | |||
Schwab Target 2020 Fund | Schwab Tax-Free Bond Fund | |||
Schwab Target 2025 Fund | Schwab California Tax-Free Bond Fund | |||
Schwab Target 2030 Fund | Schwab Global Real Estate 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 funds’ Board of Trustees (the “Board”) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
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:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported at halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are |
52
Table of Contents
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below. |
• | Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the procedures. | |
• | International fair valuation: The Board 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 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 forward 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. 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 |
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2. Significant Accounting Policies (continued):
close of the foreign markets. The Board 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. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 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 (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 forwards is accounted for as unrealized gains or losses until the contracts settle, at which time the gains or losses are realized.
Securities Lending: Under the trusts’ Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to have a value of at least 102% of the prior day’s market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities and is marked to market daily. The cash collateral of securities loaned is invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Securities lending income, as disclosed in a fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent which are subject to adjustments pursuant to the securities lending agreement.
If applicable, the value of the securities on loan as of October 31, 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, currency gains or losses realized between the
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2. Significant Accounting Policies (continued):
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. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures 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 GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies. 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.
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(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 and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2012, if any, are reflected in the funds’ Statements 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 December 2011, Accounting Standards Update (“ASU”) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities,” was issued and is effective for interim and annual periods beginning after January 1, 2013. The ASU enhances disclosure requirements with respect to an entity’s rights of offset and related arrangements associated with its financial and derivative instruments. Management is currently evaluating the impact the adoption of ASU 2011-11 may have on the funds’ financial statement disclosures.
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 the investment in a fund will fluctuate, which means that investors 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 index, 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 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.
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
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3. Risk Factors (continued):
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.
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.
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% |
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4. Affiliates and Affiliated Transactions (continued):
For its advisory and administrative services to the following funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
Schwab | ||||||||||||||
Schwab | Schwab | Total Stock | Schwab | |||||||||||
S&P 500 | Small-Cap | Market | International | |||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||
0.06% | 0.15% | 0.06% | 0.15% |
The Board 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 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.
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 its affiliates 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 Board, 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% |
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 | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,009,981 | 75,700 | — | 1,085,681 | $14,743,548 | $— | $251,479 | |||||||||||||||||||||
Schwab 1000 Index Fund | 351,965 | 15,100 | — | 367,065 | 4,984,743 | — | 86,284 | |||||||||||||||||||||
Schwab Total Stock Market Index Fund | 126,026 | 28,200 | — | 154,226 | 2,094,389 | — | 31,602 |
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4. Affiliates and Affiliated Transactions (continued):
Certain Schwab Funds may own shares of other Schwab Funds. The table below reflects the percentages of each fund shares in this report owned by other Schwab Funds as of October 31, 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 | 1.7% | —% | 7.0% | —% | 10.1% | |||||||||||||||
Schwab Growth Portfolio | 1.8% | —% | 6.8% | —% | 8.2% | |||||||||||||||
Schwab Balanced Portfolio | 1.0% | —% | 3.8% | —% | 4.6% | |||||||||||||||
Schwab Conservative Portfolio | 0.3% | —% | 1.1% | —% | 1.4% | |||||||||||||||
Schwab Annuity Portfolios: | ||||||||||||||||||||
Schwab Growth Portfolio II | 0.1% | 0.1% | 0.3% | —% | 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 | 0.4% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2035 Fund | 0.1% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2040 Fund | 0.4% | —% | —% | —% | —% |
* | Less than 0.05% |
Certain other related parties may own shares of Schwab funds in this report. As of October 31, 2012, the shares owned by Schwab Charitable Giving Trust (an affiliate of Schwab) as a percentage of the total shares of the Schwab Small Cap Index Fund and the Schwab Total Stock Market Fund were 2.0% and 5.0%, 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 October 31, 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 by the Board. The funds had no interfund borrowing or lending activity during the period.
During the period, the Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund received a payment of $27,175, $4,304, $11,512 and $6,103, respectively, related to state filing fees resulting from revised fee calculation methodologies being applied on sales of the funds’ shares in prior periods. These payments are presented in each fund’s Statement of Operations as “State filing fee reimbursement”.
All or a portion of the state filing fees were previously borne by CSIM through a waiver of CSIM’s management fee. As this expense was previously waived, the payments received during the period had the effect of decreasing the total “Expense reduction by CSIM and its affiliates” in each fund’s Statement of Operations. The current net operating expense ratio was not impacted by this payment.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. provides transfer agent services for each fund.
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6. Board of Trustees:
Trustees may include people who are officers and/or directors of the investment adviser or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 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 | $662,992,759 | $224,494,770 | ||||||
Schwab 1000 Index Fund | 203,243,192 | 452,111,512 | ||||||
Schwab Small-Cap Index Fund | 685,861,648 | 648,685,486 | ||||||
Schwab Total Stock Market Index Fund | 333,819,176 | 61,608,203 | ||||||
Schwab International Index Fund | 423,453,074 | 413,652,816 |
9. Derivatives:
Certain funds entered into equity index futures contracts (“futures”) during the report period. The funds invested in futures to equitize available cash. The fair value and due to brokers for futures contracts held at October 31, 2012 and the net realized/unrealized gains (losses) on futures contracts held during the period ended October 31, 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 month-end average values of futures contracts held by the funds and the month-end average number of contracts held were as follows:
Contract Values | Number of Contracts | |||||||
Schwab S&P 500 Index Fund | $174,810,802 | 2,590 | ||||||
Schwab 1000 Index Fund | 13,560,913 | 198 | ||||||
Schwab Small-Cap Index Fund | 19,799,575 | 246 | ||||||
Schwab Total Stock Market Index Fund | 21,066,829 | 294 | ||||||
Schwab International Index Fund | — | — |
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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 | |||||||
(11/1/11-10/31/12) | (11/1/10-10/31/11) | |||||||
Schwab S&P 500 Index Fund | $148,766 | $176,039 | ||||||
Schwab 1000 Index Fund | 18,501 | 35,850 | ||||||
Schwab Small-Cap Index Fund | 13,063 | 25,087 | ||||||
Schwab Total Stock Market Index Fund | 149,791 | 108,924 | ||||||
Schwab International Index Fund | 11,378 | 16,287 |
11. Federal Income Taxes:
As of October 31, 2012, the components of distributable earnings on a tax-basis were as follows:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Undistributed ordinary income | $199,865,251 | $69,090,621 | $22,010,515 | $32,024,450 | $46,346,374 | |||||||||||||||
Undistributed long-term capital gains | — | 197,818,436 | 39,237,045 | — | — | |||||||||||||||
Unrealized appreciation on investments | 4,389,637,779 | 2,967,356,004 | 406,103,935 | 678,801,448 | 364,596,385 | |||||||||||||||
Unrealized depreciation on investments | (1,174,837,511 | ) | (102,507,299 | ) | (144,258,154 | ) | (167,713,523 | ) | (164,787,761 | ) | ||||||||||
Other unrealized appreciation/(depreciation) | 1 | — | 22 | — | (80,407 | ) | ||||||||||||||
Net unrealized appreciation/(depreciation) | $3,214,800,269 | $2,864,848,705 | $261,845,803 | $511,087,925 | $199,728,217 | |||||||||||||||
The primary differences between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments are the tax deferral of losses on wash sales, Passive Foreign Investment Companies (PFIC), partnership investments, non taxable dividends and futures mark to market.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2012, 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, 2013 | $118,657,105 | $— | $— | $— | $— | |||||||||||||||
October 31, 2014 | 109,256,533 | — | — | — | — | |||||||||||||||
October 31, 2015 | 89,645,092 | — | — | — | — | |||||||||||||||
October 31, 2016 | 77,879,594 | — | — | 2,244,763 | — | |||||||||||||||
October 31, 2017 | 20,049,252 | — | — | 4,871,496 | 26,290,338 | |||||||||||||||
Total | $415,487,576 | $— | $— | $7,116,259 | $26,290,338 | |||||||||||||||
For the year ended October 31, 2012, the funds had capital losses utilized 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 | $20,828,436 | $— | $— | $12,375,982 | $50,888,806 |
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Schwab Equity Index Funds
Financial Notes (continued)
11. Federal Income Taxes (continued):
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $218,494,240 | $86,671,033 | $69,464,601 | $32,188,219 | $51,830,156 | |||||||||||||||
Long-term capital gains | — | 183,283,175 | 40,732,178 | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $191,615,698 | $72,195,700 | $14,248,616 | $26,769,873 | $40,811,469 | |||||||||||||||
Long-term capital gains | — | 59,510,806 | 4,037,352 | — | — | |||||||||||||||
Return of capital | — | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2012, the funds made the following reclassifications:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Capital shares | $— | $— | $— | $— | $— | |||||||||||||||
Undistributed net investment income | (3,016,451 | ) | (940,823 | ) | 312,668 | 17,837 | 3,898,077 | |||||||||||||
Net realized capital gains/(losses) | 3,016,451 | 940,823 | (312,668 | ) | (17,837 | ) | (3,898,077 | ) |
As of October 31, 2012, 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, 2012, 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. However, such losses must be utilized prior to the pre-enactment capital losses, which increases the likelihood that the pre-enactment capital losses will expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital loss, 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.
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Schwab Equity Index Funds
Financial Notes (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.
The funds have adopted the noted provisions of the Act for the period ending October 31, 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.
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Report of Independent Registered Public Accounting Firm
To the Boards of Trustees and Shareholders of:
Schwab S&P 500 Index Fund
Schwab 1000 Index Fund
Schwab Small-Cap Index Fund
Schwab Total Stock Market Index Fund
Schwab International Index Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab 1000 Index Fund (one of the portfolios constituting Schwab Investments), Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund (four of the portfolios constituting Schwab Capital Trust) (hereafter collectively referred to as the “Funds”) at October 31, 2012, and the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 14, 2012
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Other Federal Tax Information (unaudited)
Schwab International Index Fund may elect to pass on the benefits of the foreign tax credit of $2,551,221 to its shareholders for the year ended October 31, 2012. The respective foreign source income on the fund is $53,414,164.
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2012, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab S&P 500 Index Fund | 100.00 | ||||
Schwab 1000 Index Fund | 100.00 | ||||
Schwab Small-Cap Index Fund | 66.87 | ||||
Schwab Total Stock Market Index Fund | 97.63 | ||||
Schwab International Index Fund | 0.03 |
For the fiscal year ended October 31, 2012, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2013 via IRS form 1099 of the amounts for use in preparing their 2012 income tax return.
Schwab S&P 500 Index Fund | $218,494,240 | |||
Schwab 1000 Index Fund | 86,671,033 | |||
Schwab Small-Cap Index Fund | 47,970,693 | |||
Schwab Total Stock Market Index Fund | 31,074,492 | |||
Schwab International Index Fund | 42,736,850 |
Under Section 852 (b)(3)(C) of the Internal Revenue Code, certain funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2012:
Schwab S&P 500 Index Fund | $— | |||
Schwab 1000 Index Fund | 183,283,175 | |||
Schwab Small-Cap Index Fund | 40,732,178 | |||
Schwab Total Stock Market Index Fund | — | |||
Schwab International Index Fund | — |
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Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreements between Schwab Capital Trust and Schwab Investments (collectively, the “Trusts”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreements”) with respect to the existing funds in the Trusts, including Schwab S&P 500 Index Fund, Schwab 1000 Index Fund, Schwab Small- Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreements with respect to the Funds at meetings held on April 24, 2012, and June 5, 2012, and approved the renewal of the Agreements with respect to the Funds for an additional one year term at the meeting held on June 5, 2012. The Board’s approval of the Agreements with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreements, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds and exchange-traded funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreements with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreements with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both
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risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreements with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreements with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreements with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to Schwab 1000 Index Fund that include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreements with respect to the Funds and concluded that the compensation under the Agreements with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers of 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 91 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2000.) | Chairman of JDN Corporate Advisory LLC. | 74 | Director, Redwood Trust, Inc. (1998 – present) Director, PMI Group Inc. (2001 – 2009) | |||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2008.) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 – present). | 74 | Director, Gilead Sciences, Inc. (2005 – present) Director, Monaco Coach Corporation (2005 – 2009) | |||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 – present). | 74 | 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 and Schwab Investments since 2011.) | Private Investor. | 74 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Tercica Inc. (2004 – 2008) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2011.) | Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 – Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 – Jan. 2008). | 74 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) Director, Eaton Corp. (2003 – 2006) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2000.) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 74 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) | |||
Interested Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993 and Schwab Investments since 1991.) | Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 74 | None | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2008.) | As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. | 91 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust and Schwab Investments since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President 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 and Schwab Investments since 2004.) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present); Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; 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 and Schwab Investments since 2011.) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Capital Trust and Schwab Investments since 2011.) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies, Loomis, Sayles & Company (April 2006 – Jan. 2008); Managing Director, Head of Market-Based Strategies, State Street Research (August 2003 – Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust and Schwab Investments since 2011.) | Senior Vice President, Charles Schwab & Co., Inc., (Sept. 2011 – present); Senior Vice President and 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 and Schwab Investments since 2005.) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (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. In addition to their employment with Schwab, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation, the parent company of Schwab and the investment adviser. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays 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 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.
71
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
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We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
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Contact Us
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© 2012 Schwab Funds. All rights reserved.
Table of Contents
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 Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large Company* Index Fund
Schwab Fundamental US Small Company* Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small Company Index Fund
Schwab Fundamental Emerging Markets* Large Company Index Fund
Schwab Global Real Estate Fundtm
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab Intermediate-Term Bond Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fund
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, 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. |
Table of Contents
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Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
P.O. Box 3812, Englewood, CO 80155–3812
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
© 2012 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR13810-15
Table of Contents
Table of Contents
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Table of Contents
Annual report dated October 31, 2012, enclosed.
Schwab Active Equity Funds
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core
Equity Fund
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Table of Contents
This wrapper is not part of the shareholder report.
Table of Contents
Schwab Active Equity Funds
Annual Report
October 31, 2012
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core
Equity Fund
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Schwab Active Equity Funds
In This Report
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Performance and Fund Facts | ||
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108 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Table of Contents
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 Core Equity Fundtm (Ticker Symbol: SWANX) | 13.99% | |||
S&P 500® Index | 15.21% | |||
Fund Category: Morningstar Large-Cap Blend | 12.55% | |||
Performance Details | pages 6-7 | |||
Schwab Dividend Equity Fundtm (Ticker Symbol: SWDSX) | 12.65% | |||
S&P 500® Index | 15.21% | |||
Fund Category: Morningstar Large-Cap Value | 13.70% | |||
Performance Details | pages 8-9 | |||
Schwab Large-Cap Growth Fundtm (Ticker Symbol: SWLSX) | 12.18% | |||
Russell 1000 Growth Index | 13.02% | |||
Fund Category: Morningstar Large-Cap Growth | 10.10% | |||
Performance Details | pages 10-11 | |||
Schwab Small-Cap Equity Fundtm (Ticker Symbol: SWSCX) | 13.57% | |||
Russell 2000® Index | 12.08% | |||
Fund Category: Morningstar Small-Cap Blend | 10.82% | |||
Performance Details | pages 12-13 | |||
Schwab Hedged Equity Fundtm (Ticker Symbol: SWHEX) | 6.79% | |||
S&P 500® Index | 15.21% | |||
Fund Category: Morningstar Long-Short | 3.22% | |||
Performance Details | pages 14-15 | |||
Schwab Financial Services Fundtm (Ticker Symbol: SWFFX) | 16.92% | |||
S&P 1500 SuperComposite Financials Sector Index | 19.67% | |||
Fund Category: Morningstar Financial Services | 17.67% | |||
Performance Details | pages 16-17 | |||
Schwab Health Care Fundtm1 (Ticker Symbol: SWHFX) | 20.10% | |||
Dow Jones Global Health Care Index | 19.81% | |||
Fund Category: Morningstar Health Care | 21.91% | |||
Performance Details | pages 18-19 | |||
Schwab® International Core Equity Fund1 (Ticker Symbol: SICNX) | 11.17% | |||
MSCI EAFE Index®* | 5.15% | |||
Fund Category: Morningstar Foreign Large-Cap Blend | 6.15% | |||
Performance Details | pages 20-21 | |||
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 the funds’ prospectus for further detail and eligibility requirements. |
2 Schwab Active Equity Funds
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From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctpchandom.jpg)
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. Each Schwab Active Equity Fund employs a process to build a portfolio that seeks to provide a balance between risk and expected returns. To aid in its stock selection process, each fund utilizes Schwab Equity Ratings®, which represents Schwab’s proprietary approach to evaluating equity securities.
For the 12 months ended October 31, 2012, all but one of the Schwab Active Equity Funds generated double-digit returns, as U.S. stocks solidly outperformed international equities. Low interest rates and governmental efforts to encourage faster economic growth helped U.S. stocks generate positive returns, even as corporate earnings growth generally decelerated. The Federal Reserve extended its forecast for keeping short-term interest rates at 0-0.25% from late 2014 to mid-2015, extended “Operation Twist”—a policy of buying long-term securities and selling short-term Treasuries—and announced plans to purchase additional agency mortgage-backed securities. Value stocks generally outperformed growth stocks, while large-cap stocks posted bigger gains than small-caps. Health Care and Financials were some of the better performing sectors, while Energy and Materials comparatively underperformed.
Internationally, the euro zone’s sovereign debt crisis represented an ongoing challenge. With concerns regarding elections in Greece and worries that the crisis might spread, international equities endured sharp losses in May. Subsequently, European leaders achieved meaningful progress, and overseas stocks
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.
![]() | 15.21% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 12.08% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 5.15% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.25% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.06% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctcaptst01.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management’s views and portfolio holdings may have changed since the report date.
Schwab Active Equity Funds 3
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From the President continued
For the 12 months ended October 31, 2012, all but one of the Schwab Active Equity Funds generated double-digit returns, as U.S. stocks solidly outperformed international equities.
began to recover, while the U.S. dollar finished mixed versus major international currencies, correspondingly affecting international stock returns for U.S. investors.
Translating the solid performance of U.S. stocks and comparatively modest performance of overseas equities into quantifiable terms, the S&P 500 Index returned 15.2%, the Russell 2000 Index returned 12.1%, and in U.S. dollar terms, the MSCI EAFE Index returned 5.2%.
Thank you for investing in the Schwab Active Equity Funds. For former Schwab Premier Equity Fund shareholders, please remember that the fund was reorganized into the Schwab Core Equity Fund in September 2012, and this report contains important information about your new fund.
We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to frequently asked questions or for more information about the Schwab Active Equity Funds, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Active Equity Funds
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Fund Management
![]() | Jonas Svallin, CFA Managing Director and Head of Disciplined Active Equity Strategies, leads the portfolio management team of Schwab’s disciplined active equity funds. He also has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2012, Mr. Svallin spent nearly three years as a partner and a director of quantitative analytics and research at Fiduciary Research & Consulting, where he provided oversight of quantitative analytics and risk management efforts. From 2003 until 2009, Mr. Svallin was a principal and head portfolio manager at Algert Coldiron Investors (ACI). Prior to joining ACI, Mr. Svallin worked as a quantitative research associate at RCM Capital Management and a senior consultant at FactSet Research Systems. | |
![]() | Larry Mano, Managing Director and Senior Portfolio Manager, 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 CSIM in 1998, Mr. Mano was a vice president and principal in the Institutional Services Group at Wilshire Associates, Inc., where he directed the product development and client servicing of analytical tools to aid in the management of structured equity and indexed portfolios. He has over 20 years of experience in asset management. | |
![]() | Paul Alan Davis, CFA Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the funds. Mr. Davis has been a portfolio manager with CSIM since 2004, and also worked in performance management, competitive analysis and fund administration since beginning his tenure at the firm in 2003. Prior to joining CSIM, Mr. Davis worked for several investment advisory firms in different capacities. His roles included portfolio management, trading and compliance. He has more than 12 years of experience in portfolio management. |
Schwab Active Equity Funds 5
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Schwab Core Equity Fund™
The Schwab Core Equity Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund primarily invests in U.S. stocks. The fund expects to hold the common stocks of U.S companies that have market capitalizations of approximately $500 million or more. To aid its stock selection, the fund uses Schwab Equity Ratings. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 13.99% for the 12 months ended October 31, 2012, underperforming the S&P 500 Index (the index), which the fund uses for performance comparisons. The index returned 15.21% for the report period.
Market Highlights. All sectors within the index generated positive returns for the 12 months, as equities benefitted from the low-rate environment and governmental efforts to speed up economic growth. The Telecommunication Services and Health Care sectors performed particularly well, while the Energy and Materials sectors generated positive returns but underperformed other sectors. Stocks with mid- to low price-to-earnings ratios generally returned more than stocks with high price-to-earnings ratios, while shares of companies with low price-to-book ratios generally provided more substantial returns than shares of companies with high price-to-book ratios.
Positioning and Strategies. The fund’s strategic over- and underweights among various market-capitalization groups generally reduced the fund’s performance relative to the index, but solid stock selection within these groups provided an effective performance counterbalance. One example was the fund’s underweight compared with the index in companies with market capitalizations greater than $50 billion, which detracted from the fund’s performance compared with the index as large-cap stocks outperformed small-cap shares. However, the fund’s stock choices among market-capitalization ranges, particularly in stocks of companies with market capitalizations of $10 billion or less, enhanced the fund’s relative performance.
The fund held generally in-line sector weightings compared with the index, while stock selection results within these sectors varied. For example, holdings in the Consumer Discretionary sector enhanced the fund’s performance. One significant contributor in this sector was PetSmart, Inc., a specialty retailer of pet products and services. The fund’s PetSmart, Inc. holdings returned approximately 43% for the fund for the 12-month report period, and the fund’s overweight in this company compared with the index enhanced performance. Stock selection within the Information Technology sector generated less favorable results, with Dell Inc—a computer hardware manufacturer—representing a significant detractor. The fund’s Dell Inc. holdings returned approximately -31% for the period. When combined with the fund’s overweight in the company compared with the index, this position detracted from the fund’s relative performance.
The results of the fund’s over- and underweights among valuation groups relative to the index, and stock selection within these groups, varied. Weightings within price-to-book groups generated positive overall results compared with the index, although stock choices among these groups almost equally detracted from the fund’s relative performance. Among price-to-earnings groups, stock selection generated positive overall results, while weightings within these groups reduced performance.
As of 10/31/12:
Statistics
Number of Holdings | 152 | |||
Weighted Average Market Cap ($ x 1,000,000) | $100,963 | |||
Price/Earnings Ratio (P/E) | 15.7 | |||
Price/Book Ratio (P/B) | 2.1 | |||
Portfolio Turnover Rate1 | 45% |
Sector Weightings % of Investments
Information Technology | 19.4% | |||
Financials | 13.6% | |||
Health Care | 12.5% | |||
Energy | 11.8% | |||
Consumer Discretionary | 11.2% | |||
Consumer Staples | 10.5% | |||
Industrials | 8.4% | |||
Utilities | 3.9% | |||
Materials | 3.9% | |||
Telecommunication Services | 3.8% | |||
Other | 1.0% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets2
Apple, Inc. | 3.9% | |||
Wells Fargo & Co. | 3.1% | |||
Exxon Mobil Corp. | 3.1% | |||
Chevron Corp. | 3.1% | |||
JPMorgan Chase & Co. | 3.0% | |||
Pfizer, Inc. | 2.9% | |||
The Coca-Cola Co. | 2.7% | |||
General Electric Co. | 2.5% | |||
Verizon Communications, Inc. | 2.4% | |||
Merck & Co., Inc. | 2.2% | |||
Total | 28.9% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | Portfolio turnover excludes the impact of investment activity from a merger with another fund. | |
2 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Active Equity Funds
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Schwab Core Equity Fundtm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctscef.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Core Equity Fundtm (7/1/96) | 13.99 | % | -0.35 | % | 6.91 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 12.55 | % | -0.71 | % | 6.42 | % |
Fund Expense Ratio4: 0.73%
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. 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. And, on September 7, 2012, the Schwab Premier Equity Fund merged into the fund (see financial note 13). | |
4 | As stated in the prospectus. Reflects the total annual operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 7
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Schwab Dividend Equity Fund™
The Schwab Dividend Equity Fund (the fund) seeks current income and capital appreciation. Under normal circumstances, the fund invests at least 80% of its net assets in dividend-paying common and preferred stocks. To aid its stock selection, the fund uses Schwab Equity Ratings. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 12.65% for the 12 months ended October 31, 2012, underperforming the S&P 500 Index (the index), which the fund uses for performance comparisons. The index returned 15.21% for the report period. As of October 31, 2012, the fund’s dividend yield was 2.84%, higher than the 2.24% dividend yield of the index. As of October 31, 2012, the fund’s 30-Day SEC yield was 1.80%.
Market Highlights. The low-rate backdrop and governmental efforts to quicken the pace of economic growth helped U.S. stocks generate solid returns for the 12-month report period, enabling all sectors in the index to provide positive returns. Telecommunication Services and Health Care stocks performed particularly well, generating returns of more than 20%, while Energy and Materials stocks provided positive returns, but underperformed equities in other sectors. Stocks with mid- to lower P/E ratios generated mixed performances compared with stocks with higher P/E ratios, while shares of companies with the lowest price-to-book ratios generally provided larger returns than shares of companies with higher price-to-book ratios.
Positioning and Strategies. The outperformance of stocks in the index that do not pay dividends represented a significant catalyst for the fund’s underperformance of the index, while stock selection within sectors and market-capitalization groups also limited the fund’s relative performance.
Stock selection within the Information Technology sector provided an example. Apple Inc.—a company that designs, manufactures, and markets communications equipment—generated returns of approximately 48% for the index during the 12-month report period, and these holdings represented a meaningful position within the index’s Information Technology position. However, the fund did not hold Apple Inc. shares as the valuation models employed by the fund steered the investment adviser away from this company, and therefore was unable to benefit directly from the stock’s rally.
The fund’s choices among Consumer Discretionary stocks were more effective. For example, the fund’s holdings of Home Depot, Inc.—a home improvement retailer—returned approximately 76% for the 12-month period. As a result, the fund’s overweight in this company enhanced performance compared with the index.
Weightings within price-to-book groups generated positive overall results compared with the index, although underperforming stock selections among these categories resulted in a negative overall performance impact. Stock selection among price-to-earnings groups also reduced the fund’s relative performance, as did stock choices among market-capitalization groups.
As of 10/31/12:
Statistics
Number of Holdings | 107 | |||
Weighted Average Market Cap ($ x 1,000,000) | $93,862 | |||
Price/Earnings Ratio (P/E) | 14.7 | |||
Price/Book Ratio (P/B) | 2.1 | |||
Portfolio Turnover Rate | 55% |
Sector Weightings % of Investments
Information Technology | 16.5% | |||
Financials | 13.2% | |||
Energy | 12.1% | |||
Consumer Staples | 10.6% | |||
Industrials | 10.5% | |||
Health Care | 10.0% | |||
Consumer Discretionary | 9.4% | |||
Utilities | 6.7% | |||
Telecommunication Services | 5.3% | |||
Materials | 4.5% | |||
Other | 1.2% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Exxon Mobil Corp. | 4.4% | |||
Chevron Corp. | 3.6% | |||
General Electric Co. | 3.2% | |||
JPMorgan Chase & Co. | 3.1% | |||
Pfizer, Inc. | 3.1% | |||
Merck & Co., Inc. | 3.1% | |||
Verizon Communications, Inc. | 2.8% | |||
AT&T, Inc. | 2.5% | |||
Wal-Mart Stores, Inc. | 2.2% | |||
Costco Wholesale Corp. | 2.1% | |||
Total | 30.1% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Active Equity Funds
Table of Contents
Schwab Dividend Equity Fundtm
Performance and Fund Facts as of 10/31/12
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.
September 2, 2003 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsdef.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Dividend Equity Fundtm (9/2/03) | 12.65 | % | 0.66 | % | 6.98 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 5.86 | % | |||||||||
Fund Category: Morningstar Large-Cap Value | 13.70 | % | -1.15 | % | 5.57 | % |
Fund Expense Ratio4: 0.89%
Yields1
30-Day SEC Yield | 1.80% | |||
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. 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 past performance and financial history of the fund are that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Reflects the total annual operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 9
Table of Contents
Schwab Large-Cap Growth Fund™
The Schwab Large-Cap Growth Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund primarily invests in U.S. common stocks. Under normal circumstances, the fund invests at least 80% of its net assets in large-cap stocks of U.S. companies. To aid its stock selection, the fund uses Schwab Equity Ratings. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 12.18% for the 12 months ended October 31, 2012, underperforming the Russell 1000 Growth Index (the index), which the fund uses for performance comparisons. The index returned 13.02% for the report period.
Market Highlights. All sectors within the index generated positive returns for the 12 months, as large-cap U.S. stocks benefitted from the low-rate environment and governmental efforts to speed up economic growth. The Telecommunication Services and Health Care sectors performed particularly well, while the Utilities and Materials sectors generated positive returns but underperformed other sectors. Stocks with mid- to low price-to-earnings ratios generally returned more than stocks with the highest price-to-earnings ratios, while shares of companies with the highest price-to-book ratios generally provided more substantial returns than shares of companies with low price-to-book ratios.
Positioning and Strategies. Stock selection among the various sectors generally detracted from the fund’s performance compared with the index. Stock selection within the Information Technology sector generated particularly unfavorable results, with Western Union Company—a global money transfer services corporation—representing a significant detractor. The fund’s Western Union Company holdings returned approximately -27% for the period, and when combined with the fund’s overweight compared with the index, reduced the fund’s relative performance. Stock selection among Health Care companies also limited the fund’s relative return, while overweights in the Energy and Telecommunication Services sectors relative to the index modestly benefitted the fund.
Stock selection among the various market-capitalization groups enhanced the fund’s overall performance relative to the index, while the fund’s comparative weightings of these groups helped modestly. The fund’s stock choices among companies with market capitalizations of $5 billion or less were particularly effective, adding to the fund’s performance compared with the index. However, stock choices in companies with market capitalizations of $10 to $50 billion represented notable performance detractors.
The results of the fund’s over- and underweights among valuation groups relative to the index, and stock selection within these groups, varied. Among price-to-earnings groups, stock selection comfortably outweighed the negative impact of the fund’s allocations relative to the index. Weightings within price-to-book groups generated negative overall results compared with the index, although stock choices among these groups more than compensated for this performance.
As of 10/31/12:
Statistics
Number of Holdings | 100 | |||
Weighted Average Market Cap ($ x 1,000,000) | $110,938 | |||
Price/Earnings Ratio (P/E) | 16.0 | |||
Price/Book Ratio (P/B) | 3.2 | |||
Portfolio Turnover Rate | 79% |
Sector Weightings % of Investments
Information Technology | 30.4% | |||
Consumer Discretionary | 15.3% | |||
Consumer Staples | 12.4% | |||
Health Care | 10.7% | |||
Industrials | 10.0% | |||
Materials | 6.3% | |||
Energy | 5.6% | |||
Financials | 4.6% | |||
Telecommunication Services | 3.4% | |||
Utilities | 0.3% | |||
Other | 1.0% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 7.7% | |||
Microsoft Corp. | 3.6% | |||
Oracle Corp. | 3.3% | |||
The Coca-Cola Co. | 3.2% | |||
Verizon Communications, Inc. | 2.6% | |||
Philip Morris International, Inc. | 2.5% | |||
PPG Industries, Inc. | 2.3% | |||
Simon Property Group, Inc. | 2.1% | |||
Amgen, Inc. | 2.1% | |||
Costco Wholesale Corp. | 2.1% | |||
Total | 31.5% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Active Equity Funds
Table of Contents
Schwab Large-Cap Growth Fundtm
Performance and Fund Facts as of 10/31/12
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.
October 3, 2005 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctslgf.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Large-Cap Growth Fundtm (10/3/05) | 12.18 | % | 0.07 | % | 3.61 | % | |||||||||
Russell 1000 Growth Index | 13.02 | % | 1.95 | % | 5.30 | % | |||||||||
Fund Category: Morningstar Large-Cap Growth | 10.10 | % | -0.28 | % | 3.91 | % |
Fund Expense Ratios4: Net 0.99%; Gross 1.05%
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. 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 past performance and financial history of the fund are that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 11
Table of Contents
Schwab Small-Cap Equity Fund™
The Schwab Small-Cap Equity Fund (the fund) seeks long-term capital growth. Under normal circumstances, the fund invests at least 80% of its net assets in small-cap equity securities. To aid its stock selection, the fund uses Schwab Equity Ratings. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 13.57% for the 12 months ended October 31, 2012, comfortably outperforming the Russell 2000 Index (the index), which the fund uses for performance comparisons. The index returned 12.08% for the report period.
Market Highlights. Nearly all sectors within the index generated positive returns for the 12 months, as small-cap U.S. stocks benefitted from the low-rate environment and governmental efforts to speed up economic growth. Large-cap companies were perceived as greater beneficiaries from the low-rate environment than small-cap companies, while shares of small-cap companies generally endured higher overall market volatility compared with large-cap stocks. Small-cap U.S. stocks generally underperformed large-cap shares amid this backdrop. From a sector standpoint, Financials stocks performed particularly well in spite of intermittent bouts of volatility, rebounding from 2011 lows. By comparison, the Energy sector generated negative returns, hurt by worries about lackluster global growth, even as increased supplies from U.S. oil and shale gas exploration weighed on prices.
Positioning and Strategies. Effective stock selections across market sectors, market-capitalization groups, and valuation measures compared with the index enabled the fund’s outperformance of the index. For example, the Consumer Discretionary sector generated double-digit returns for the 12 months, and Charming Shoppes, Inc.—a women’s specialty apparel retailer—was a significant contributor. The fund’s Charming Shoppes, Inc. holdings returned approximately 111% for the fund for the 12-month report period, benefitting from the company’s acquisition by the Ascena Retail Group. When combined with the fund’s overweight in this company compared with the index, this position enhanced the fund’s performance compared with the index. Not all stock selections worked out as favorably, with holdings in the economically sensitive Industrials sector illustrating this point. EnergySolutions, Inc.—a technical service provider to the nuclear industry—was a significant detractor in this sector, with the fund’s holdings returning approximately -44% and detracting from the fund’s relative performance.
Stock selections in the various market-capitalization groups enhanced the fund’s overall performance relative to the index, with holdings performing particularly well among companies with market capitalizations of $500 million to $2 billion. From a valuation standpoint, the fund generally emphasized less expensive stocks compared with the index, benefitting the fund’s relative performance. Specifically, weightings in price-to-earnings groups and in price-to-book groups enhanced relative performance, while overall stock choices among these groups generated even greater performance benefits for the fund.
As of 10/31/12:
Statistics
Number of Holdings | 423 | |||
Weighted Average Market Cap ($ x 1,000,000) | $1,243 | |||
Price/Earnings Ratio (P/E) | 30.7 | |||
Price/Book Ratio (P/B) | 1.5 | |||
Portfolio Turnover Rate | 101% |
Sector Weightings % of Investments
Financials | 21.5% | |||
Information Technology | 19.6% | |||
Consumer Discretionary | 14.4% | |||
Industrials | 12.8% | |||
Health Care | 10.8% | |||
Energy | 7.4% | |||
Materials | 5.8% | |||
Utilities | 3.9% | |||
Consumer Staples | 2.4% | |||
Telecommunication Services | 0.8% | |||
Other | 0.6% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Acxiom Corp. | 1.0% | |||
SemGroup Corp., Class A | 1.0% | |||
PHH Corp. | 1.0% | |||
PAREXEL International Corp. | 0.9% | |||
CBL & Associates Properties, Inc. | 0.9% | |||
First American Financial Corp. | 0.9% | |||
Coeur d’Alene Mines Corp. | 0.9% | |||
Portland General Electric Co. | 0.9% | |||
Convergys Corp. | 0.9% | |||
DCT Industrial Trust, Inc. | 0.9% | |||
Total | 9.3% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Active Equity Funds
Table of Contents
Schwab Small-Cap Equity Fundtm
Performance and Fund Facts as of 10/31/12
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.
July 1, 2003 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctssef.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Small-Cap Equity Fundtm (7/1/03) | 13.57 | % | 0.78 | % | 8.86 | % | |||||||||
Russell 2000® Index | 12.08 | % | 1.19 | % | 8.04 | % | |||||||||
Fund Category: Morningstar Small-Cap Blend | 10.82 | % | 0.75 | % | 7.82 | % |
Fund Expense Ratio4: 1.12%
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The past performance and financial history of the fund are that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Reflects the total annual operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 13
Table of Contents
Schwab Hedged Equity Fund™
The Schwab Hedged Equity Fund (the fund) seeks long-term capital appreciation over market cycles with lower volatility than the broad equity market. To pursue its investment objective, the fund will establish long and short positions in equity securities issued by U.S. companies. The fund typically purchases or sells short stocks of companies that have market capitalizations of $1 billion or more at the time the stock is purchased or sold short. To aid its stocks selection, the fund uses Schwab Equity Ratings. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 6.79% for the 12 months ended October 31, 2012, significantly underperforming the S&P 500 Index (the index), which the fund uses for performance comparisons. The index returned 15.21% for the report period.
Market Highlights. U.S. equities generated impressive returns amid the low-rate environment and governmental efforts to quicken the pace of economic growth. Stocks started out on rocky footing, as the euro zone’s sovereign debt crisis and a subsequent sharp increase in financial market volatility pushed investors toward perceived safe havens. As meaningful progress in Europe emerged, and as the Federal Reserve continued to support an economic recovery in the U.S., investors shifted back into stocks. From a sector perspective, Telecommunication Services stocks outperformed equities in other sectors, while stocks of Energy companies comparatively underperformed.
Positioning and Strategies. Throughout the 12-month report period, the fund held short positions of approximately 39% of net assets on average. Given the substantial rally by stocks, most of these short positions significantly detracted from the fund’s return compared with that of the index, and provided a key reason for the performance disparity between the two.
The fund’s allocations across market sectors also weighed on performance compared with the index, particularly among the Energy and Health Care sectors, although stock selection strategies generally enhanced the fund’s performance. Not all sector strategies generated negative results, with the fund’s positions in Information Technology stocks providing one example. The fund’s overweight in this sector compared with the index benefited relative performance as the fund’s long positions returned approximately 12%, outperforming those of the index. The fund’s short positions in this sector also enhanced the fund’s relative performance. For example, the fund shorted the stock of ADTRAN, Inc.—a communications equipment servicer—which enhanced relative returns as the fund’s shares of this company fell by roughly 42% during the period.
From a valuation standpoint, stock selection in price-to-book and price-to-earnings groups yielded disappointing results. The fund’s stock choices among small-cap stocks generally benefitted the fund by comparison, as did a relative overweighting in this market-capitalization group, while allocations and stock selections among other market-capitalization ranges generally detracted from the fund’s performance.
As of 10/31/12:
Statistics
Number of Holdings | ||||
Long Holdings | 137 | |||
Short Holdings | 134 | |||
Weighted Average Market Cap ($ x 1,000,000) | ||||
Long Holdings | $63,580 | |||
Short Holdings | $5,432 | |||
Price/Earnings Ratio (P/E) | ||||
Long Holdings | 15.9 | |||
Short Holdings | 31.5 | |||
Price/Book Ratio (P/B) | ||||
Long Holdings | 1.8 | |||
Short Holdings | 2.3 | |||
Portfolio Turnover Rate | 109% | |||
Portfolio Turnover Rate excluding short sales | 53% |
Top Equity Long Holdings
% of Net Assets1
Apple, Inc. | 3.0% | |||
Exxon Mobil Corp. | 2.9% | |||
Pfizer, Inc. | 2.8% | |||
JPMorgan Chase & Co. | 2.0% | |||
Wells Fargo & Co. | 2.0% | |||
Total | 12.7% |
Top Equity Short Holdings
% of Net Assets1
MasTec, Inc. | 0.7% | |||
NetSuite, Inc. | 0.7% | |||
DreamWorks Animation SKG, Inc., Class A | 0.7% | |||
DexCom, Inc. | 0.6% | |||
Pall Corp. | 0.6% | |||
Total | 3.3% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Active Equity Funds
Table of Contents
Schwab Hedged Equity Fundtm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctshef.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Hedged Equity Fundtm (9/3/02) | 6.79 | % | 0.19 | % | 6.11 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Fund Category: Morningstar Long-Short | 3.22 | % | -0.49 | % | 5.82 | % |
Fund Expense Ratios4: Net 1.87%; Gross 1.89%
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.
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 past performance and financial history of the fund are 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. |
Schwab Active Equity Funds 15
Table of Contents
Schwab Financial Services Fund™
The Schwab Financial Services Fund (the fund) seeks long-term capital growth. To pursue its goal, the fund primarily invests in equity securities issued by companies in the financial services sector. To aid its stock selection, the fund uses Schwab Equity Ratings. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 16.92% for the 12 months ended October 31, 2012, underperforming the S&P 1500 SuperComposite Financials Sector Index (the index), which the fund uses for performance comparisons. The index returned 19.67% for the report period.
Market Highlights. U.S. stocks generated impressive returns for the 12 months, benefitting from the low-rate environment and governmental efforts to support economic growth. Diversified Financials, Regional Banks, and Life & Health Insurance stocks comprise a meaningful percentage of the index, and each of these industries generated double-digit returns for the 12 months, returning approximately 25%, 22%, and 10%, respectively. Banks and companies offering diversified financial services in particular benefitted from the low interest-rate environment, which made their products potentially more affordable for borrowers. From a market-capitalization standpoint, the largest financial firms generally outperformed the smallest financial firms, while stocks with the highest price-to-earnings ratios and shares of companies with the lowest price-to-book ratios generally produced the highest returns.
Positioning and Strategies. The fund’s overall stock selections detracted from performance compared with the index, while over- and underweights within industries weighed even more heavily on the fund’s relative performance. For example, stock selection in Diversified Financials subtracted meaningfully from the fund’s performance, with an underweight in holdings of Citigroup, Inc.—a diversified financial services company—providing one example, as Citigroup, Inc. stock returned almost 19% for the index. The fund’s weighting compared with the index in the Specialized Finance industry, as well as stock choices therein, detracted from the fund’s performance as well.
An overweight in Regional Banks and stock selections within this industry generated far more beneficial results. Given the double-digit returns of Regional Banks and relative outperformance compared with many other areas in the broader sector, the fund’s relative overweight enhanced performance. Diminishing concerns over foreclosures provided an important support for this industry, while the fund’s holdings of Regions Financial Corporation—a regional, multi-bank holding company—provided an example of solid stock selection by the fund. Holdings of this company returned approximately 67% for the report period, and when combined with the fund’s overweight of these holdings compared with the index, enhanced the fund’s relative performance.
From a valuation standpoint, overall weightings compared with the index in both price-to-book and price-to-earnings groups were beneficial, although stock selection in these areas yielded disappointing results that more than erased these benefits. The fund’s stock choices among shares of companies with market capitalizations of $5 to $10 billion generally helped the fund, although stock choices in most other market-capitalization groups detracted.
As of 10/31/12:
Statistics
Number of Holdings | 64 | |||
Weighted Average Market Cap ($ x 1,000,000) | $52,735 | |||
Price/Earnings Ratio (P/E) | 13.8 | |||
Price/Book Ratio (P/B) | 1.1 | |||
Portfolio Turnover Rate | 84% |
Industry Weightings % of Investments
Diversified Financials | 32.7% | |||
Insurance | 27.8% | |||
Banks | 22.4% | |||
Real Estate | 14.6% | |||
Commercial & Professional Services | 0.1% | |||
Other | 2.4% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Wells Fargo & Co. | 8.9% | |||
JPMorgan Chase & Co. | 8.5% | |||
Bank of America Corp. | 5.7% | |||
American Express Co. | 3.9% | |||
Simon Property Group, Inc. | 3.5% | |||
MetLife, Inc. | 3.3% | |||
Capital One Financial Corp. | 3.2% | |||
The Travelers Cos., Inc. | 3.0% | |||
Aflac, Inc. | 2.8% | |||
State Street Corp. | 2.7% | |||
Total | 45.5% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
16 Schwab Active Equity Funds
Table of Contents
Schwab Financial Services Fundtm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsfsf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Financial Services Fundtm (7/3/00) | 16.92 | % | -6.70 | % | 3.49 | % | |||||||||
S&P 1500 SuperComposite Financials Sector Index | 19.67 | % | -10.64 | % | -0.24 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Fund Category: Morningstar Financial Services | 17.67 | % | -6.40 | % | 2.23 | % |
Fund Expense Ratios3: Net 0.94%; Gross 1.06%
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.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 17
Table of Contents
Schwab Health Care Fund™
The Schwab Health Care Fund (the fund) seeks long-term capital growth. To pursue its goal, the fund primarily invests in equity securities issued by companies in the Health Care sector. The fund uses Schwab Equity Ratings to aid its U.S. stock selection and Schwab’s proprietary international stock research to aid its international stock selection. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 20.10% for the 12 months ended October 31, 2012, outperforming the Dow Jones Global Health Care Index (the index), which the fund uses for performance comparisons. The index returned 19.81% for the report period.
Market Highlights. U.S. stocks rallied amid the low-rate environment and governmental efforts to quicken the pace of economic growth during the 12 months, while the euro zone’s sovereign debt crisis represented an ongoing challenge for international equities. Within U.S. markets, Health Care stocks were some of the better performers, generating double-digit returns. By comparison, overseas stocks endured particularly sharp losses in May amid concerns regarding Greek elections and worries that the crisis might spread. However, meaningful subsequent progress by European leaders helped international equities begin to recover. Biotechnology, Pharmaceuticals, and Health Care Equipment stocks—collectively representing nearly 80% of the index—each generated double-digit returns amid that environment. In addition, the low interest rate environment likely made corporate acquisitions more affordable. Looking to replace revenue streams from medications with expiring patent protections and expand product lines, big pharmaceutical companies actively examined potential acquisition targets within the Biotechnology industry in particular, propping up returns in the process.
Positioning and Strategies. The fund’s market-capitalization strategies, and stock selection within the various groups, contributed to the fund’s outperformance of the index. Stock selection of companies with market capitalizations of $10 billion and up performed particularly well, enhancing the fund’s relative performance.
The investment adviser limited the fund’s holdings of Health Care stocks from European countries, including those from Switzerland and the U.K. Instead, Health Care companies based in the U.S. were more heavily weighted than those in the index, an allocation that improved the fund’s relative performance, although the fund’s stock selections within the U.S. generated the opposite results.
From an industry standpoint, an overweight in Biotechnology stocks—which returned more than 35% for the fund, and benefitted from the low-rate environment—enhanced relative performance. Unfortunately, stock selections within this industry reduced the fund’s performance compared with the index. Pharmaceuticals stocks contributed meaningfully to the fund’s outperformance of the index, as did stock selection within this industry. For example, the fund’s holdings of Par Pharmaceutical Cos Inc.—a distributor and manufacturer of generic drugs that was acquired and taken private by TPG Capital during the period—performed particularly well, returning more than 63%. Within the Health Care Equipment industry, the fund’s stock selections and weighting reduced relative performance.
In addition, the fund’s overall strategies compared with the index in both price-to-book and price-to-earnings groups were beneficial for performance, with stock selections in both of these areas also enhancing the fund’s relative return.
As of 10/31/12:
Statistics
Number of Holdings | 92 | |||
Weighted Average Market Cap ($ x 1,000,000) | $68,154 | |||
Price/Earnings Ratio (P/E) | 22.4 | |||
Price/Book Ratio (P/B) | 2.6 | |||
Portfolio Turnover Rate | 60% |
Industry Weightings % of Investments
Pharmaceuticals, Biotechnology & Life Sciences | 71.7% | |||
Healthcare – Services | 25.2% | |||
Materials | 0.4% | |||
Capital Goods | 0.3% | |||
Other | 2.4% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Merck & Co., Inc. | 6.9% | |||
Pfizer, Inc. | 6.6% | |||
Amgen, Inc. | 5.3% | |||
Johnson & Johnson | 5.3% | |||
Medtronic, Inc. | 3.1% | |||
Abbott Laboratories | 2.9% | |||
UnitedHealth Group, Inc. | 2.9% | |||
Eli Lilly & Co. | 2.9% | |||
Biogen Idec, Inc. | 2.8% | |||
Roche Holding AG | 2.8% | |||
Total | 41.5% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
18 Schwab Active Equity Funds
Table of Contents
Schwab Health Care Fundtm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctshcf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Health Care Fundtm (7/3/00) | 20.10 | % | 4.76 | % | 11.86 | % | |||||||||
Dow Jones Global Health Care Index | 19.81 | % | 4.41 | % | 7.79 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Fund Category: Morningstar Health Care | 21.91 | % | 5.39 | % | 9.23 | % |
Fund Expense Ratios3: Net 0.82%; Gross 0.85%
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.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 19
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Schwab® International Core Equity Fund
The Schwab International Core Equity Fund (the fund) seeks long-term capital growth. To pursue its goal, the fund primarily invests in stocks of publicly traded companies located in developed countries, excluding the U.S. To aid its stock selection, the fund uses Schwab’s proprietary international stock research. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 11.17% for the 12 months ended October 31, 2012, solidly outperforming the MSCI EAFE Index (the index), which the fund uses for performance comparisons. The index returned 5.15% for the report period. Timing differences in foreign exchange calculations and fair valuation of the fund’s holdings contributed positively to the fund’s performance compared with the index.*
Market Highlights. International equities faced myriad headwinds during the 12 months. Stocks started out on rocky footing as the euro zone’s sovereign debt crisis and a correspondingly sharp increase in financial market volatility pushed investors toward perceived safe havens. As meaningful progress in Europe emerged, and central banks around the world continued trying to support economic growth, investors began migrating back into stocks, propping up the market’s performance. Meanwhile, major currencies finished mixed versus the U.S. dollar, correspondingly affecting returns in U.S. dollar terms.
Positioning and Strategies. Multiple strategies helped the fund outperform, but effective stock selection was one of the most important overall contributors. Of the 10 primary economic sectors within the index, the fund’s stock selection enhanced performance in eight sectors, with particularly beneficial results among the Information Technology and Consumer Discretionary sectors.
Stock selection within the $5 billion and under market-capitalization group generated solid returns, as did strategies concerning the fund’s country allocations and corresponding stock selections. Stock choices among U.K. holdings, particularly in small-cap shares, generated performance-enhancing results. A key contributor to this result within the Information Technology sector was Micro Focus International PLC, an enterprise application management solutions provider. The fund’s holdings of this company returned more than 69%.
In contrast, strategies in Australia detracted from the fund’s relative performance. Stock selection within Australia’s small-capitalization market was particularly disappointing, with the fund’s holdings of St. Barbara Limited—a gold exploration and production company—providing an illustration and falling sharply, returning approximately -22%. From a valuation standpoint, the fund’s overall strategies compared with the index in both price-to-book and price-to-earnings groups enhanced performance, while stock selections in both of these areas performed well.
As of 10/31/12:
Statistics
Number of Holdings | 185 | |||
Weighted Average Market Cap ($ x 1,000,000) | $47,921 | |||
Price/Earnings Ratio (P/E) | 12.5 | |||
Price/Book Ratio (P/B) | 0.5 | |||
Portfolio Turnover Rate | 112% |
Sector Weightings % of Investments
Financials | 22.9% | |||
Industrials | 15.2% | |||
Health Care | 12.9% | |||
Consumer Discretionary | 10.1% | |||
Consumer Staples | 10.1% | |||
Energy | 9.3% | |||
Materials | 7.4% | |||
Information Technology | 5.0% | |||
Utilities | 2.8% | |||
Telecommunication Services | 2.2% | |||
Other | 2.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Nestle S.A. – Reg’d | 2.4% | |||
HSBC Holdings plc | 1.9% | |||
BP plc | 1.8% | |||
Total S.A. | 1.7% | |||
Anheuser-Busch InBev N.V. | 1.7% | |||
Sanofi | 1.7% | |||
GlaxoSmithKline plc | 1.7% | |||
Mitsubishi UFJ Financial Group, Inc. | 1.6% | |||
Rio Tinto plc | 1.6% | |||
Koninklijke Philips Electronics N.V. | 1.5% | |||
Total | 17.6% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk.
* | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST). Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. | |
1 | This list is not a recommendation of any security by the investment adviser. |
20 Schwab Active Equity Funds
Table of Contents
Schwab® International Core Equity Fund
Performance and Fund Facts as of 10/31/12
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.
May 30, 2008 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsicef.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab® International Core Equity Fund (5/30/08) | 11.17 | % | 5.56 | % | -3.18 | % | |||||||||
MSCI EAFE Index®* | 5.15 | % | 3.31 | % | -4.13 | % | |||||||||
Fund Category: Morningstar Foreign Large-Cap Blend | 6.15 | % | 3.75 | % | -4.70 | % |
Fund Expense Ratios4: Net 0.87%; Gross 1.23%
Country Weightings % of Equity Investments
United Kingdom | 21.1% | |||
Japan | 18.9% | |||
France | 9.3% | |||
Australia | 8.1% | |||
Switzerland | 7.8% | |||
Germany | 7.4% | |||
Netherlands | 4.0% | |||
Sweden | 3.6% | |||
Hong Kong | 2.8% | |||
Spain | 2.7% | |||
Other Countries | 14.3% | |||
Total | 100.0% |
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.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
* | 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 | 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 past performance and financial history of the fund are 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. |
Schwab Active Equity Funds 21
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2012 and held through October 31, 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 5/1/12 | at 10/31/12 | 5/1/12–10/31/12 | |||||||||||||
Schwab Core Equity Fundtm | ||||||||||||||||
Actual Return | 0.72% | $ | 1,000 | $ | 1,015.50 | $ | 3.65 | |||||||||
Hypothetical 5% Return | 0.72% | $ | 1,000 | $ | 1,021.52 | $ | 3.66 | |||||||||
Schwab Dividend Equity Fundtm | ||||||||||||||||
Actual Return | 0.89% | $ | 1,000 | $ | 1,017.50 | $ | 4.51 | |||||||||
Hypothetical 5% Return | 0.89% | $ | 1,000 | $ | 1,020.66 | $ | 4.52 | |||||||||
Schwab Large-Cap Growth Fundtm | ||||||||||||||||
Actual Return | 0.99% | $ | 1,000 | $ | 980.40 | $ | 4.93 | |||||||||
Hypothetical 5% Return | 0.99% | $ | 1,000 | $ | 1,020.16 | $ | 5.03 | |||||||||
Schwab Small-Cap Equity Fundtm | ||||||||||||||||
Actual Return | 1.12% | $ | 1,000 | $ | 1,029.60 | $ | 5.71 | |||||||||
Hypothetical 5% Return | 1.12% | $ | 1,000 | $ | 1,019.51 | $ | 5.69 | |||||||||
Schwab Hedged Equity Fundtm | ||||||||||||||||
Actual Return | 2.18% | $ | 1,000 | $ | 1,013.60 | $ | 11.03 | |||||||||
Hypothetical 5% Return | 2.18% | $ | 1,000 | $ | 1,014.18 | $ | 11.04 | |||||||||
Schwab Financial Services Fundtm | ||||||||||||||||
Actual Return | 0.94% | $ | 1,000 | $ | 1,020.10 | $ | 4.77 | |||||||||
Hypothetical 5% Return | 0.94% | $ | 1,000 | $ | 1,020.41 | $ | 4.77 | |||||||||
Schwab Health Care Fundtm | ||||||||||||||||
Actual Return | 0.82% | $ | 1,000 | $ | 1,069.10 | $ | 4.26 | |||||||||
Hypothetical 5% Return | 0.82% | $ | 1,000 | $ | 1,021.01 | $ | 4.17 | |||||||||
Schwab® International Core Equity Fund | ||||||||||||||||
Actual Return | 0.86% | $ | 1,000 | $ | 1,040.80 | $ | 4.41 | |||||||||
Hypothetical 5% Return | 0.86% | $ | 1,000 | $ | 1,020.81 | $ | 4.37 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 366 days of the fiscal year. |
22 Schwab Active Equity Funds
Table of Contents
Schwab Core Equity Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 16.81 | 15.78 | 14.26 | 13.43 | 20.49 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.26 | 0.19 | 0.17 | 0.17 | 0.23 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.07 | 1.01 | 1.50 | 0.88 | (7.06 | ) | ||||||||||||||||
Total from investment operations | 2.33 | 1.20 | 1.67 | 1.05 | (6.83 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.34 | ) | (0.17 | ) | (0.15 | ) | (0.22 | ) | (0.18 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.05 | ) | ||||||||||||||||
Total distributions | (0.34 | ) | (0.17 | ) | (0.15 | ) | (0.22 | ) | (0.23 | ) | ||||||||||||
Net asset value at end of period | 18.80 | 16.81 | 15.78 | 14.26 | 13.43 | |||||||||||||||||
Total return (%) | 13.99 | 7.60 | 11.77 | 8.11 | (33.71 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.72 | 0.73 | 0.73 | 0.75 | 0.75 | |||||||||||||||||
Gross operating expenses | 0.73 | 0.73 | 0.74 | 0.78 | 0.78 | |||||||||||||||||
Net investment income (loss) | 1.37 | 1.06 | 1.05 | 1.39 | 1.28 | |||||||||||||||||
Portfolio turnover rate | 45 | 1 | 35 | 49 | 41 | 1 | 35 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,880 | 1,719 | 1,792 | 1,770 | 1,449 |
1 Portfolio turnover excludes the impact of investment activity from a merger with another fund. See financial note 13 for additional information.
See financial notes 23
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings as of October 31, 2012
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 | 1,606,418,332 | 1,857,715,864 | ||||||||
0 | .9% | Other Investment Company | 17,558,841 | 17,558,841 | ||||||||
0 | .1% | Short-Term Investment | 692,901 | 692,901 | ||||||||
99 | .8% | Total Investments | 1,624,670,074 | 1,875,967,606 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 4,108,064 | |||||||||
100 | .0% | Total Net Assets | 1,880,075,670 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.8% of net assets | ||||||||
Automobiles & Components 0.4% | ||||||||
Ford Motor Co. | 550,000 | 6,138,000 | ||||||
TRW Automotive Holdings Corp. * | 31,000 | 1,441,810 | ||||||
7,579,810 | ||||||||
Banks 3.9% | ||||||||
BB&T Corp. | 65,000 | 1,881,750 | ||||||
Huntington Bancshares, Inc. | 313,200 | 2,001,348 | ||||||
KeyCorp | 900,000 | 7,578,000 | ||||||
SunTrust Banks, Inc. | 82,000 | 2,230,400 | ||||||
Wells Fargo & Co. | 1,745,000 | 58,789,050 | ||||||
72,480,548 | ||||||||
Capital Goods 6.8% | ||||||||
3M Co. | 17,000 | 1,489,200 | ||||||
AGCO Corp. * | 77,400 | 3,522,474 | ||||||
Dover Corp. | 24,000 | 1,397,280 | ||||||
Fluor Corp. | 399,000 | 22,284,150 | ||||||
General Dynamics Corp. | 84,500 | 5,752,760 | ||||||
General Electric Co. | 2,208,500 | 46,511,010 | ||||||
Northrop Grumman Corp. | 65,000 | 4,464,850 | ||||||
PACCAR, Inc. | 100,000 | 4,334,000 | ||||||
Roper Industries, Inc. | 20,500 | 2,237,985 | ||||||
Textron, Inc. | 535,000 | 13,487,350 | ||||||
The Boeing Co. | 269,500 | 18,983,580 | ||||||
Valmont Industries, Inc. | 13,000 | 1,756,300 | ||||||
Wabtec Corp. | 29,000 | 2,375,100 | ||||||
128,596,039 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Equifax, Inc. | 134,000 | 6,705,360 | ||||||
Consumer Durables & Apparel 0.8% | ||||||||
Jarden Corp. | 221,500 | 11,030,700 | ||||||
Mohawk Industries, Inc. * | 52,000 | 4,340,440 | ||||||
15,371,140 | ||||||||
Consumer Services 0.5% | ||||||||
Hyatt Hotels Corp., Class A * | 144,500 | 5,274,250 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 67,000 | 3,473,950 | ||||||
8,748,200 | ||||||||
Diversified Financials 7.0% | ||||||||
American Express Co. | 260,500 | 14,580,185 | ||||||
Bank of America Corp. | 35,000 | 326,200 | ||||||
Capital One Financial Corp. | 145,500 | 8,754,735 | ||||||
Discover Financial Services | 395,050 | 16,197,050 | ||||||
JPMorgan Chase & Co. | 1,357,140 | 56,565,595 | ||||||
SLM Corp. | 1,260,000 | 22,150,800 | ||||||
State Street Corp. | 200,000 | 8,914,000 | ||||||
The Bank of New York Mellon Corp. | 200,000 | 4,942,000 | ||||||
132,430,565 | ||||||||
Energy 11.7% | ||||||||
Anadarko Petroleum Corp. | 70,000 | 4,816,700 | ||||||
Apache Corp. | 50,000 | 4,137,500 | ||||||
Chevron Corp. | 529,000 | 58,301,090 | ||||||
EOG Resources, Inc. | 58,000 | 6,756,420 | ||||||
Exxon Mobil Corp. | 649,500 | 59,214,915 | ||||||
HollyFrontier Corp. | 43,000 | 1,661,090 | ||||||
Marathon Oil Corp. | 81,000 | 2,434,860 | ||||||
Marathon Petroleum Corp. | 45,000 | 2,471,850 | ||||||
Murphy Oil Corp. | 393,365 | 23,601,900 | ||||||
National Oilwell Varco, Inc. | 148,950 | 10,977,615 | ||||||
Occidental Petroleum Corp. | 356,690 | 28,164,242 | ||||||
Phillips 66 | 49,000 | 2,310,840 | ||||||
Tesoro Corp. | 61,000 | 2,300,310 | ||||||
Valero Energy Corp. | 458,500 | 13,342,350 | ||||||
220,491,682 | ||||||||
Food & Staples Retailing 3.2% | ||||||||
Costco Wholesale Corp. | 260,000 | 25,591,800 | ||||||
CVS Caremark Corp. | 165,000 | 7,656,000 | ||||||
The Kroger Co. | 796,400 | 20,085,208 | ||||||
Wal-Mart Stores, Inc. | 86,800 | 6,511,736 | ||||||
59,844,744 | ||||||||
Food, Beverage & Tobacco 7.1% | ||||||||
Archer-Daniels-Midland Co. | 710,000 | 19,056,400 | ||||||
Bunge Ltd. | 188,400 | 13,382,052 | ||||||
Constellation Brands, Inc., Class A * | 284,000 | 10,036,560 | ||||||
Ingredion, Inc. | 200,000 | 12,292,000 |
24 See financial notes
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
PepsiCo, Inc. | 70,000 | 4,846,800 | ||||||
Philip Morris International, Inc. | 264,700 | 23,441,832 | ||||||
The Coca-Cola Co. | 1,365,000 | 50,750,700 | ||||||
133,806,344 | ||||||||
Health Care Equipment & Services 1.9% | ||||||||
Aetna, Inc. | 100,000 | 4,370,000 | ||||||
Baxter International, Inc. | 35,000 | 2,192,050 | ||||||
Boston Scientific Corp. * | 272,500 | 1,400,650 | ||||||
Covidien plc | 147,000 | 8,077,650 | ||||||
Henry Schein, Inc. * | 78,000 | 5,754,840 | ||||||
Medtronic, Inc. | 35,000 | 1,455,300 | ||||||
UnitedHealth Group, Inc. | 214,000 | 11,984,000 | ||||||
35,234,490 | ||||||||
Household & Personal Products 0.2% | ||||||||
Colgate-Palmolive Co. | 20,000 | 2,099,200 | ||||||
Kimberly-Clark Corp. | 25,000 | 2,086,250 | ||||||
4,185,450 | ||||||||
Insurance 1.7% | ||||||||
Aflac, Inc. | 193,500 | 9,632,430 | ||||||
American Financial Group, Inc. | 29,290 | 1,136,452 | ||||||
HCC Insurance Holdings, Inc. | 43,000 | 1,532,520 | ||||||
MetLife, Inc. | 55,000 | 1,951,950 | ||||||
Prudential Financial, Inc. | 27,000 | 1,540,350 | ||||||
Reinsurance Group of America, Inc. | 76,500 | 4,048,380 | ||||||
The Travelers Cos., Inc. | 109,300 | 7,753,742 | ||||||
Torchmark Corp. | 74,000 | 3,743,660 | ||||||
31,339,484 | ||||||||
Materials 3.9% | ||||||||
Alcoa, Inc. | 348,600 | 2,987,502 | ||||||
Ashland, Inc. | 28,000 | 1,992,200 | ||||||
CF Industries Holdings, Inc. | 9,000 | 1,846,710 | ||||||
International Paper Co. | 824,000 | 29,523,920 | ||||||
MeadWestvaco Corp. | 115,000 | 3,414,350 | ||||||
PPG Industries, Inc. | 287,200 | 33,625,376 | ||||||
73,390,058 | ||||||||
Media 3.2% | ||||||||
CBS Corp., Class B - Non Voting Shares | 55,500 | 1,798,200 | ||||||
Comcast Corp., Class A | 455,000 | 17,067,050 | ||||||
Discovery Communications, Inc., Class A * | 123,500 | 7,288,970 | ||||||
Liberty Global, Inc., Class A * | 292,000 | 17,528,760 | ||||||
Omnicom Group, Inc. | 45,000 | 2,155,950 | ||||||
The Walt Disney Co. | 90,000 | 4,416,300 | ||||||
Time Warner Cable, Inc. | 74,000 | 7,334,140 | ||||||
Time Warner, Inc. | 57,000 | 2,476,650 | ||||||
60,066,020 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 10.6% | ||||||||
Amgen, Inc. | 361,052 | 31,247,245 | ||||||
Biogen Idec, Inc. * | 98,000 | 13,545,560 | ||||||
Celgene Corp. * | 21,000 | 1,539,720 | ||||||
Life Technologies Corp. * | 347,137 | 16,978,471 | ||||||
Merck & Co., Inc. | 922,080 | 42,074,511 | ||||||
Mylan, Inc. * | 162,000 | 4,105,080 | ||||||
Pfizer, Inc. | 2,184,000 | 54,316,080 | ||||||
Thermo Fisher Scientific, Inc. | 504,000 | 30,774,240 | ||||||
Warner Chilcott plc, Class A | 451,000 | 5,222,580 | ||||||
199,803,487 | ||||||||
Real Estate 1.0% | ||||||||
Simon Property Group, Inc. | 121,000 | 18,417,410 | ||||||
Retailing 6.2% | ||||||||
Foot Locker, Inc. | 482,900 | 16,177,150 | ||||||
Macy’s, Inc. | 531,500 | 20,234,205 | ||||||
PetSmart, Inc. | 186,000 | 12,348,540 | ||||||
Target Corp. | 416,000 | 26,520,000 | ||||||
The Gap, Inc. | 289,000 | 10,323,080 | ||||||
The Home Depot, Inc. | 100,000 | 6,138,000 | ||||||
The TJX Cos., Inc. | 616,800 | 25,677,384 | ||||||
�� | 117,418,359 | |||||||
Semiconductors & Semiconductor Equipment 1.8% | ||||||||
Applied Materials, Inc. | 1,000,000 | 10,600,000 | ||||||
LSI Corp. * | 2,786,000 | 19,084,100 | ||||||
NVIDIA Corp. | 266,000 | 3,184,020 | ||||||
32,868,120 | ||||||||
Software & Services 11.1% | ||||||||
Accenture plc, Class A | 143,000 | 9,639,630 | ||||||
Alliance Data Systems Corp. * | 151,500 | 21,672,075 | ||||||
BMC Software, Inc. * | 369,140 | 15,023,998 | ||||||
CA, Inc. | 862,000 | 19,412,240 | ||||||
Computer Sciences Corp. | 440,500 | 13,413,225 | ||||||
Fidelity National Information Services, Inc. | 67,000 | 2,202,290 | ||||||
IAC/InterActiveCorp | 39,000 | 1,885,650 | ||||||
International Business Machines Corp. | 81,100 | 15,776,383 | ||||||
Microsoft Corp. | 780,000 | 22,257,300 | ||||||
Oracle Corp. | 1,309,800 | 40,669,290 | ||||||
Symantec Corp. * | 1,762,000 | 32,050,780 | ||||||
Synopsys, Inc. * | 357,342 | 11,506,412 | ||||||
The Western Union Co. | 84,000 | 1,066,800 | ||||||
Total System Services, Inc. | 98,000 | 2,204,020 | ||||||
208,780,093 | ||||||||
Technology Hardware & Equipment 6.5% | ||||||||
Apple, Inc. | 123,000 | 73,197,300 | ||||||
Avnet, Inc. * | 63,000 | 1,804,950 | ||||||
Cisco Systems, Inc. | 621,000 | 10,643,940 | ||||||
EMC Corp. * | 457,400 | 11,169,708 | ||||||
Molex, Inc. | 52,000 | 1,350,440 | ||||||
Motorola Solutions, Inc. | 44,000 | 2,273,920 | ||||||
NCR Corp. * | 97,000 | 2,064,160 | ||||||
Western Digital Corp. | 366,000 | 12,528,180 | ||||||
Xerox Corp. | 1,169,533 | 7,531,793 | ||||||
122,564,391 |
See financial notes 25
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Telecommunication Services 3.8% | ||||||||
AT&T, Inc. | 189,100 | 6,540,969 | ||||||
Crown Castle International Corp. * | 225,500 | 15,052,125 | ||||||
Sprint Nextel Corp. * | 991,800 | 5,494,572 | ||||||
Telephone & Data Systems, Inc. | 35,671 | 887,138 | ||||||
Verizon Communications, Inc. | 990,400 | 44,211,456 | ||||||
72,186,260 | ||||||||
Transportation 1.2% | ||||||||
FedEx Corp. | 191,000 | 17,570,090 | ||||||
Hertz Global Holdings, Inc. * | 180,000 | 2,388,600 | ||||||
United Parcel Service, Inc., Class B | 27,000 | 1,977,750 | ||||||
21,936,440 | ||||||||
Utilities 3.9% | ||||||||
Ameren Corp. | 402,000 | 13,217,760 | ||||||
American Water Works Co., Inc. | 23,000 | 845,020 | ||||||
CenterPoint Energy, Inc. | 375,000 | 8,126,250 | ||||||
CMS Energy Corp. | 183,000 | 4,450,560 | ||||||
DTE Energy Co. | 145,900 | 9,060,390 | ||||||
Edison International | 51,000 | 2,393,940 | ||||||
NV Energy, Inc. | 88,000 | 1,672,880 | ||||||
PG&E Corp. | 311,000 | 13,223,720 | ||||||
Pinnacle West Capital Corp. | 100,000 | 5,297,000 | ||||||
The AES Corp. | 1,453,000 | 15,183,850 | ||||||
73,471,370 | ||||||||
Total Common Stock | ||||||||
(Cost $1,606,418,332) | 1,857,715,864 | |||||||
Other Investment Company 0.9% of net assets | ||||||||
Money Market Fund 0.9% | ||||||||
State Street Institutional U.S. Government Money Market Fund | 17,558,841 | 17,558,841 | ||||||
Total Other Investment Company | ||||||||
(Cost $17,558,841) | 17,558,841 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.1% of net assets | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.11%, 12/20/12 (a)(b) | 693,000 | 692,901 | ||||||
Total Short-Term Investment | ||||||||
(Cost $692,901) | 692,901 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $1,626,886,889 and the unrealized appreciation and depreciation were $291,663,236 and ($42,582,519), respectively, with a net unrealized appreciation of $249,080,717.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 180 | 12,661,200 | (426,915 | ) |
26 See financial notes
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $1,857,715,864 | $— | $— | $1,857,715,864 | ||||||||||||
Other Investment Company1 | 17,558,841 | — | — | 17,558,841 | ||||||||||||
Short-Term Investment1 | — | 692,901 | — | 692,901 | ||||||||||||
Total | $1,875,274,705 | $692,901 | $— | $1,875,967,606 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($426,915 | ) | $— | $— | ($426,915 | ) |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 27
Table of Contents
Schwab Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $1,624,670,074) | $1,875,967,606 | |||||
Receivables: | ||||||
Investments sold | 4,730,872 | |||||
Dividends | 1,121,393 | |||||
Fund shares sold | 880,978 | |||||
Interest | 786 | |||||
Prepaid expenses | + | 44,804 | ||||
Total assets | 1,882,746,439 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 71,062 | |||||
Shareholder service fees | 43,661 | |||||
Fund shares redeemed | 2,393,637 | |||||
Due to brokers for futures | 7,200 | |||||
Accrued expenses | + | 155,209 | ||||
Total liabilities | 2,670,769 | |||||
Net Assets | ||||||
Total assets | 1,882,746,439 | |||||
Total liabilities | − | 2,670,769 | ||||
Net assets | $1,880,075,670 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,736,949,953 | |||||
Net investment income not yet distributed | 3,792,266 | |||||
Net realized capital losses | (111,537,166 | ) | ||||
Net unrealized capital gains | 250,870,617 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,880,075,670 | 99,978,878 | $18.80 |
28 See financial notes
Table of Contents
Schwab Core Equity Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends | $36,145,283 | |||||
Interest | 6,784 | |||||
Securities on loan | + | 163 | ||||
Total investment income | 36,152,230 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 8,097,460 | |||||
Shareholder service fees | 4,039,253 | |||||
Shareholder reports | 90,728 | |||||
Transfer agent fees | 86,864 | |||||
Portfolio accounting fees | 71,589 | |||||
Registration fees | 43,215 | |||||
Professional fees | 37,597 | |||||
Custodian fees | 34,704 | |||||
Trustees’ fees | 17,434 | |||||
Interest expense | 165 | |||||
State filing fee reimbursement (Note 4) | (32,770 | ) | ||||
Other expenses | + | 44,733 | ||||
Total expenses | 12,530,972 | |||||
Expense reduction by CSIM and its affiliates1 | − | 54,094 | ||||
Custody credits | − | 57 | ||||
Net expenses | − | 12,476,821 | ||||
Net investment income | 23,675,409 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 139,147,493 | |||||
Net realized gains on futures contracts | + | 2,604,435 | ||||
Net realized gains | 141,751,928 | |||||
Net unrealized gains on investments | 53,752,200 | |||||
Net unrealized losses on futures contracts | + | (1,445,573 | ) | |||
Net unrealized gains | + | 52,306,627 | ||||
Net realized and unrealized gains | 194,058,555 | |||||
Increase in net assets resulting from operations | $217,733,964 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $32,770. See financial note 4 for additional information. |
See financial notes 29
Table of Contents
Schwab Core Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $23,675,409 | $19,259,987 | ||||||||
Net realized gains | 141,751,928 | 112,592,315 | ||||||||
Net unrealized gains | + | 52,306,627 | 7,883,076 | |||||||
Increase in net assets from operations | 217,733,964 | 139,735,378 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($32,156,180 | ) | ($18,535,012 | ) |
Transactions in Fund Shares1
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 6,062,795 | $109,887,310 | 12,323,341 | $209,712,682 | ||||||||||||||
Issued in connection with merger | 11,283,566 | 216,114,348 | — | — | ||||||||||||||
Shares reinvested | 836,086 | 14,755,613 | 518,572 | 8,706,829 | ||||||||||||||
Shares redeemed | + | (20,453,309 | ) | (365,280,788 | ) | (24,183,912 | ) | (413,021,730 | ) | |||||||||
Net transactions in fund shares | (2,270,862 | ) | ($24,523,517 | ) | (11,341,999 | ) | ($194,602,219 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (2,270,862 | ) | 161,054,267 | (11,341,999 | ) | (73,401,853 | ) | ||||||||||
End of period | 99,978,878 | $1,880,075,670 | 102,249,740 | $1,719,021,403 | ||||||||||||||
Net investment income not yet distributed | $3,792,266 | $12,260,865 |
1 | Effective September 7, 2012, all of the assets and liabilities of the Schwab Premier Equity Fund were transferred to the Schwab Core Equity Fund. (See financial note 13) |
30 See financial notes
Table of Contents
Schwab Dividend Equity Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.15 | 12.08 | 10.94 | 10.63 | 15.66 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.27 | 0.23 | 0.21 | 0.25 | 0.32 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.38 | 1.06 | 1.14 | 0.31 | (4.97 | ) | ||||||||||||||||
Total from investment operations | 1.65 | 1.29 | 1.35 | 0.56 | (4.65 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.28 | ) | (0.22 | ) | (0.21 | ) | (0.25 | ) | (0.33 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.05 | ) | ||||||||||||||||
Total distributions | (0.28 | ) | (0.22 | ) | (0.21 | ) | (0.25 | ) | (0.38 | ) | ||||||||||||
Net asset value at end of period | 14.52 | 13.15 | 12.08 | 10.94 | 10.63 | |||||||||||||||||
Total return (%) | 12.65 | 10.73 | 12.42 | 5.62 | (30.23 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.89 | 0.89 | 0.89 | 0.90 | 2 | 0.89 | ||||||||||||||||
Gross operating expenses | 0.89 | 0.89 | 0.89 | 0.91 | 0.89 | |||||||||||||||||
Net investment income (loss) | 1.89 | 1.77 | 1.74 | 2.40 | 2.33 | |||||||||||||||||
Portfolio turnover rate | 55 | 31 | 37 | 39 | 22 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,390 | 1,325 | 1,322 | 1,297 | 824 |
1 Effective October 7, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
See financial notes 31
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings as of October 31, 2012
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 | 1,156,012,471 | 1,373,932,166 | ||||||||
1 | .2% | Short-Term Investments | 15,976,019 | 15,976,019 | ||||||||
100 | .0% | Total Investments | 1,171,988,490 | 1,389,908,185 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 373,481 | |||||||||
100 | .0% | Total Net Assets | 1,390,281,666 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.8% of net assets | ||||||||
Banks 2.3% | ||||||||
Commerce Bancshares, Inc. | 178,237 | 6,787,265 | ||||||
KeyCorp | 290,000 | 2,441,800 | ||||||
Regions Financial Corp. | 156,100 | 1,017,772 | ||||||
Wells Fargo & Co. | 650,000 | 21,898,500 | ||||||
32,145,337 | ||||||||
Capital Goods 10.0% | ||||||||
3M Co. | 128,000 | 11,212,800 | ||||||
Fluor Corp. | 159,200 | 8,891,320 | ||||||
General Dynamics Corp. | 55,500 | 3,778,440 | ||||||
General Electric Co. | 2,086,100 | 43,933,266 | ||||||
L-3 Communications Holdings, Inc. | 37,000 | 2,730,600 | ||||||
Lockheed Martin Corp. | 210,000 | 19,670,700 | ||||||
Masco Corp. | 75,000 | 1,131,750 | ||||||
Northrop Grumman Corp. | 82,200 | 5,646,318 | ||||||
PACCAR, Inc. | 8,500 | 368,390 | ||||||
Roper Industries, Inc. | 31,000 | 3,384,270 | ||||||
The Boeing Co. | 325,000 | 22,893,000 | ||||||
United Technologies Corp. | 192,200 | 15,022,352 | ||||||
138,663,206 | ||||||||
Consumer Durables & Apparel 1.4% | ||||||||
Whirlpool Corp. | 198,600 | 19,399,248 | ||||||
Consumer Services 0.5% | ||||||||
H&R Block, Inc. | 407,200 | 7,207,440 | ||||||
Diversified Financials 7.5% | ||||||||
American Express Co. | 310,700 | 17,389,879 | ||||||
JPMorgan Chase & Co. | 1,046,984 | 43,638,293 | ||||||
Northern Trust Corp. | 39,500 | 1,887,310 | ||||||
SLM Corp. | 1,225,600 | 21,546,048 | ||||||
State Street Corp. | 228,500 | 10,184,245 | ||||||
The Bank of New York Mellon Corp. | 367,800 | 9,088,338 | ||||||
103,734,113 | ||||||||
Energy 12.1% | ||||||||
Apache Corp. | 50,000 | 4,137,500 | ||||||
Chevron Corp. | 452,500 | 49,870,025 | ||||||
EOG Resources, Inc. | 26,500 | 3,086,985 | ||||||
Exxon Mobil Corp. | 664,800 | 60,609,816 | ||||||
Marathon Petroleum Corp. | 38,200 | 2,098,326 | ||||||
Murphy Oil Corp. | 175,000 | 10,500,000 | ||||||
Occidental Petroleum Corp. | 200,000 | 15,792,000 | ||||||
The Williams Cos., Inc. | 70,000 | 2,449,300 | ||||||
Valero Energy Corp. | 675,000 | 19,642,500 | ||||||
168,186,452 | ||||||||
Food & Staples Retailing 4.8% | ||||||||
Costco Wholesale Corp. | 294,600 | 28,997,478 | ||||||
CVS Caremark Corp. | 149,000 | 6,913,600 | ||||||
Wal-Mart Stores, Inc. | 412,000 | 30,908,240 | ||||||
66,819,318 | ||||||||
Food, Beverage & Tobacco 4.5% | ||||||||
Archer-Daniels-Midland Co. | 757,000 | 20,317,880 | ||||||
Ingredion, Inc. | 190,000 | 11,677,400 | ||||||
Philip Morris International, Inc. | 188,000 | 16,649,280 | ||||||
The Coca-Cola Co. | 377,900 | 14,050,322 | ||||||
62,694,882 | ||||||||
Health Care Equipment & Services 1.5% | ||||||||
Baxter International, Inc. | 48,500 | 3,037,555 | ||||||
Covidien plc | 33,000 | 1,813,350 | ||||||
McKesson Corp. | 78,500 | 7,324,835 | ||||||
Medtronic, Inc. | 150,000 | 6,237,000 | ||||||
UnitedHealth Group, Inc. | 50,000 | 2,800,000 | ||||||
21,212,740 | ||||||||
Household & Personal Products 1.2% | ||||||||
Colgate-Palmolive Co. | 65,000 | 6,822,400 | ||||||
Kimberly-Clark Corp. | 126,000 | 10,514,700 | ||||||
17,337,100 | ||||||||
Insurance 1.4% | ||||||||
MetLife, Inc. | 65,000 | 2,306,850 | ||||||
The Travelers Cos., Inc. | 243,000 | 17,238,420 | ||||||
19,545,270 | ||||||||
Materials 4.5% | ||||||||
CF Industries Holdings, Inc. | 37,000 | 7,592,030 | ||||||
Eastman Chemical Co. | 91,900 | 5,444,156 | ||||||
International Paper Co. | 212,000 | 7,595,960 | ||||||
MeadWestvaco Corp. | 452,100 | 13,422,849 |
32 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
PPG Industries, Inc. | 244,300 | 28,602,644 | ||||||
62,657,639 | ||||||||
Media 2.0% | ||||||||
Comcast Corp., Class A | 135,000 | 5,063,850 | ||||||
The Interpublic Group of Cos., Inc. | 185,200 | 1,870,520 | ||||||
The Walt Disney Co. | 140,000 | 6,869,800 | ||||||
Time Warner Cable, Inc. | 30,000 | 2,973,300 | ||||||
Time Warner, Inc. | 240,500 | 10,449,725 | ||||||
27,227,195 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.5% | ||||||||
Amgen, Inc. | 260,452 | 22,540,818 | ||||||
Eli Lilly & Co. | 192,900 | 9,380,727 | ||||||
Merck & Co., Inc. | 933,100 | 42,577,353 | ||||||
Pfizer, Inc. | 1,731,500 | 43,062,405 | ||||||
117,561,303 | ||||||||
Real Estate 2.0% | ||||||||
Kimco Realty Corp. | 280,000 | 5,465,600 | ||||||
Liberty Property Trust | 45,000 | 1,580,400 | ||||||
Simon Property Group, Inc. | 140,800 | 21,431,168 | ||||||
28,477,168 | ||||||||
Retailing 5.6% | ||||||||
Foot Locker, Inc. | 403,000 | 13,500,500 | ||||||
Macy’s, Inc. | 548,500 | 20,881,395 | ||||||
Target Corp. | 210,000 | 13,387,500 | ||||||
The Gap, Inc. | 18,900 | 675,108 | ||||||
The Home Depot, Inc. | 319,000 | 19,580,220 | ||||||
The TJX Cos., Inc. | 222,400 | 9,258,512 | ||||||
77,283,235 | ||||||||
Semiconductors & Semiconductor Equipment 3.3% | ||||||||
Applied Materials, Inc. | 1,798,500 | 19,064,100 | ||||||
KLA-Tencor Corp. | 483,000 | 22,469,160 | ||||||
Maxim Integrated Products, Inc. | 170,000 | 4,679,250 | ||||||
46,212,510 | ||||||||
Software & Services 8.1% | ||||||||
Accenture plc, Class A | 135,000 | 9,100,350 | ||||||
CA, Inc. | 840,500 | 18,928,060 | ||||||
Computer Sciences Corp. | 304,000 | 9,256,800 | ||||||
Fidelity National Information Services, Inc. | 485,000 | 15,941,950 | ||||||
International Business Machines Corp. | 66,400 | 12,916,792 | ||||||
Microsoft Corp. | 670,000 | 19,118,450 | ||||||
Oracle Corp. | 350,300 | 10,876,815 | ||||||
The Western Union Co. | 520,000 | 6,604,000 | ||||||
Total System Services, Inc. | 454,500 | 10,221,705 | ||||||
112,964,922 | ||||||||
Technology Hardware & Equipment 5.1% | ||||||||
Amphenol Corp., Class A | 105,000 | 6,313,650 | ||||||
Cisco Systems, Inc. | 980,000 | 16,797,200 | ||||||
Jabil Circuit, Inc. | 595,500 | 10,325,970 | ||||||
Molex, Inc. | 368,000 | 9,556,960 | ||||||
Seagate Technology plc | 399,200 | 10,906,144 | ||||||
TE Connectivity Ltd. | 276,000 | 8,881,680 | ||||||
Xerox Corp. | 1,211,000 | 7,798,840 | ||||||
70,580,444 | ||||||||
Telecommunication Services 5.3% | ||||||||
AT&T, Inc. | 1,000,307 | 34,600,619 | ||||||
Verizon Communications, Inc. | 879,500 | 39,260,880 | ||||||
73,861,499 | ||||||||
Transportation 0.5% | ||||||||
FedEx Corp. | 6,500 | 597,935 | ||||||
United Parcel Service, Inc., Class B | 90,000 | 6,592,500 | ||||||
7,190,435 | ||||||||
Utilities 6.7% | ||||||||
Ameren Corp. | 525,500 | 17,278,440 | ||||||
American Electric Power Co., Inc. | 17,000 | 755,480 | ||||||
CenterPoint Energy, Inc. | 75,000 | 1,625,250 | ||||||
CMS Energy Corp. | 185,000 | 4,499,200 | ||||||
DTE Energy Co. | 443,100 | 27,516,510 | ||||||
Edison International | 175,000 | 8,214,500 | ||||||
PG&E Corp. | 237,000 | 10,077,240 | ||||||
Pinnacle West Capital Corp. | 225,000 | 11,918,250 | ||||||
Public Service Enterprise Group, Inc. | 346,000 | 11,085,840 | ||||||
92,970,710 | ||||||||
Total Common Stock | ||||||||
(Cost $1,156,012,471) | 1,373,932,166 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 1.2% of net assets | ||||||||
Time Deposits 1.2% | ||||||||
Bank of Montreal | ||||||||
0.03%, 11/01/12 | 4,931,604 | 4,931,604 | ||||||
Royal Bank of Canada | ||||||||
0.03%, 11/01/12 | 10,755,456 | 10,755,456 | ||||||
15,687,060 | ||||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
0.11%, 12/20/12 (a)(b) | 289,000 | 288,959 | ||||||
Total Short-Term Investments | ||||||||
(Cost $15,976,019) | 15,976,019 | |||||||
End of Investments. |
See financial notes 33
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings continued
At 10/31/12, the tax basis cost of the fund’s investments was $1,171,988,490 and the unrealized appreciation and depreciation were $240,407,636 and ($22,487,941), respectively, with a net unrealized appreciation of $217,919,695.
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 75 | 5,275,500 | (177,881 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $1,373,932,166 | $— | $— | $1,373,932,166 | ||||||||||||
Short-Term Investments1 | — | 15,976,019 | — | 15,976,019 | ||||||||||||
Total | $1,373,932,166 | $15,976,019 | $— | $1,389,908,185 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($177,881 | ) | $— | $— | ($177,881 | ) |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
34 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $1,171,988,490) | $1,389,908,185 | |||||
Cash | 107 | |||||
Receivables: | ||||||
Dividends | 1,409,947 | |||||
Fund shares sold | 1,045,757 | |||||
Prepaid expenses | + | 38,326 | ||||
Total assets | 1,392,402,322 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 69,656 | |||||
Shareholder service fees | 29,058 | |||||
Fund shares redeemed | 1,938,661 | |||||
Due to brokers for futures | 3,000 | |||||
Accrued expenses | + | 80,281 | ||||
Total liabilities | 2,120,656 | |||||
Net Assets | ||||||
Total assets | 1,392,402,322 | |||||
Total liabilities | − | 2,120,656 | ||||
Net assets | $1,390,281,666 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,238,083,539 | |||||
Net investment income not yet distributed | 832,279 | |||||
Net realized capital losses | (66,375,966 | ) | ||||
Net unrealized capital gains | 217,741,814 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,390,281,666 | 95,741,454 | $14.52 |
See financial notes 35
Table of Contents
Schwab Dividend Equity Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends | $39,018,315 | |||||
Interest | + | 7,941 | ||||
Total investment income | 39,026,256 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 8,716,628 | |||||
Shareholder service fees | 3,442,920 | |||||
Shareholder reports | 73,722 | |||||
Portfolio accounting fees | 67,958 | |||||
Transfer agent fees | 53,833 | |||||
Registration fees | 45,931 | |||||
Professional fees | 40,073 | |||||
Custodian fees | 33,519 | |||||
Trustees’ fees | 15,146 | |||||
Interest expense | 45 | |||||
State filing fee reimbursement (Note 4) | (13,172 | ) | ||||
Other expenses | + | 35,530 | ||||
Total expenses | 12,512,133 | |||||
Expense reduction by CSIM and its affiliates1 | − | 40,775 | ||||
Net expenses | − | 12,471,358 | ||||
Net investment income | 26,554,898 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 104,234,791 | |||||
Net realized gains on futures contracts | + | 5,102,934 | ||||
Net realized gains | 109,337,725 | |||||
Net unrealized gains on investments | 32,057,949 | |||||
Net unrealized losses on futures contracts | + | (1,948,405 | ) | |||
Net unrealized gains | + | 30,109,544 | ||||
Net realized and unrealized gains | 139,447,269 | |||||
Increase in net assets resulting from operations | $166,002,167 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $13,172. See financial note 4 for additional information. |
36 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $26,554,898 | $24,245,439 | ||||||||
Net realized gains | 109,337,725 | 43,566,448 | ||||||||
Net unrealized gains | + | 30,109,544 | 71,468,313 | |||||||
Increase in net assets from operations | 166,002,167 | 139,280,200 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($28,261,739 | ) | ($23,212,957 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 16,849,993 | $235,314,886 | 13,544,141 | $176,264,263 | ||||||||||||||
Shares reinvested | 1,092,546 | 15,437,629 | 949,738 | 12,332,976 | ||||||||||||||
Shares redeemed | + | (22,962,741 | ) | (322,803,726 | ) | (23,171,863 | ) | (301,886,000 | ) | |||||||||
Net transactions in fund shares | (5,020,202 | ) | ($72,051,211 | ) | (8,677,984 | ) | ($113,288,761 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (5,020,202 | ) | 65,689,217 | (8,677,984 | ) | 2,778,482 | |||||||||||
End of period | 95,741,454 | $1,390,281,666 | 100,761,656 | $1,324,592,449 | ||||||||||||||
Net investment income not yet distributed | $832,279 | $2,539,120 |
See financial notes 37
Table of Contents
Schwab Large-Cap Growth Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.18 | 10.48 | 9.10 | 8.22 | 12.77 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.07 | 0.07 | 0.05 | 0.05 | 0.06 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.29 | 0.69 | 1.39 | 0.87 | (4.56 | ) | ||||||||||||||||
Total from investment operations | 1.36 | 0.76 | 1.44 | 0.92 | (4.50 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.06 | ) | (0.06 | ) | (0.06 | ) | (0.04 | ) | (0.05 | ) | ||||||||||||
Net asset value at end of period | 12.48 | 11.18 | 10.48 | 9.10 | 8.22 | |||||||||||||||||
Total return (%) | 12.18 | 7.25 | 15.83 | 11.36 | (35.36 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.99 | 0.99 | 1.00 | 2 | 0.99 | 0.99 | ||||||||||||||||
Gross operating expenses | 1.05 | 1.05 | 1.04 | 1.03 | 1.01 | |||||||||||||||||
Net investment income (loss) | 0.53 | 0.56 | 0.39 | 0.65 | 0.53 | |||||||||||||||||
Portfolio turnover rate | 79 | 62 | 57 | 63 | 49 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 217 | 213 | 219 | 360 | 332 |
1 Effective October 7, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 The ratio of net operating expenses would have been 0.99%, if certain non-routine expenses had not been incurred.
38 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund
Portfolio Holdings as of October 31, 2012
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 | 188,602,224 | 214,622,286 | ||||||||
1 | .0% | Short-Term Investments | 2,172,819 | 2,172,819 | ||||||||
99 | .9% | Total Investments | 190,775,043 | 216,795,105 | ||||||||
0 | .4% | Collateral Invested for Securities on Loan | 816,098 | 816,098 | ||||||||
(0 | .3)% | Other Assets and Liabilities, Net | (513,481 | ) | ||||||||
100 | .0% | Total Net Assets | 217,097,722 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.9% of net assets | ||||||||
Automobiles & Components 0.7% | ||||||||
Delphi Automotive plc * | 24,500 | 770,280 | ||||||
Ford Motor Co. | 66,000 | 736,560 | ||||||
1,506,840 | ||||||||
Banks 0.4% | ||||||||
Wells Fargo & Co. | 26,900 | 906,261 | ||||||
Capital Goods 7.6% | ||||||||
3M Co. | 4,500 | 394,200 | ||||||
AGCO Corp. * | 32,400 | 1,474,524 | ||||||
Fluor Corp. | 37,000 | 2,066,450 | ||||||
General Electric Co. | 75,000 | 1,579,500 | ||||||
Lockheed Martin Corp. | 24,300 | 2,276,181 | ||||||
PACCAR, Inc. | 7,500 | 325,050 | ||||||
Roper Industries, Inc. | 11,800 | 1,288,206 | ||||||
Textron, Inc. | 95,000 | 2,394,950 | ||||||
The Boeing Co. | 51,500 | 3,627,660 | ||||||
United Technologies Corp. | 12,500 | 977,000 | ||||||
16,403,721 | ||||||||
Commercial & Professional Supplies 1.2% | ||||||||
Equifax, Inc. | 50,000 | 2,502,000 | ||||||
Consumer Durables & Apparel 0.6% | ||||||||
NIKE, Inc., Class B | 11,600 | 1,060,008 | ||||||
Whirlpool Corp. | 2,500 | 244,200 | ||||||
1,304,208 | ||||||||
Consumer Services 1.4% | ||||||||
H&R Block, Inc. | 35,400 | 626,580 | ||||||
Hyatt Hotels Corp., Class A * | 13,000 | 474,500 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 35,300 | 1,830,305 | ||||||
2,931,385 | ||||||||
Diversified Financials 1.3% | ||||||||
Affiliated Managers Group, Inc. * | 12,000 | 1,518,000 | ||||||
American Express Co. | 10,800 | 604,476 | ||||||
JPMorgan Chase & Co. | 11,500 | 479,320 | ||||||
SLM Corp. | 14,000 | 246,120 | ||||||
2,847,916 | ||||||||
Energy 5.6% | ||||||||
Chevron Corp. | 25,000 | 2,755,250 | ||||||
EOG Resources, Inc. | 30,000 | 3,494,700 | ||||||
Exxon Mobil Corp. | 24,000 | 2,188,080 | ||||||
Murphy Oil Corp. | 28,000 | 1,680,000 | ||||||
National Oilwell Varco, Inc. | 2,000 | 147,400 | ||||||
Occidental Petroleum Corp. | 19,500 | 1,539,720 | ||||||
Valero Energy Corp. | 11,500 | 334,650 | ||||||
12,139,800 | ||||||||
Food & Staples Retailing 4.2% | ||||||||
Costco Wholesale Corp. | 46,000 | 4,527,780 | ||||||
CVS Caremark Corp. | 30,000 | 1,392,000 | ||||||
Wal-Mart Stores, Inc. | 42,500 | 3,188,350 | ||||||
9,108,130 | ||||||||
Food, Beverage & Tobacco 7.8% | ||||||||
Archer-Daniels-Midland Co. | 36,600 | 982,344 | ||||||
Coca-Cola Enterprises, Inc. | 101,200 | 3,181,728 | ||||||
PepsiCo, Inc. | 5,000 | 346,200 | ||||||
Philip Morris International, Inc. | 62,000 | 5,490,720 | ||||||
The Coca-Cola Co. | 188,700 | 7,015,866 | ||||||
17,016,858 | ||||||||
Health Care Equipment & Services 1.9% | ||||||||
Baxter International, Inc. | 10,000 | 626,300 | ||||||
Becton, Dickinson & Co. | 5,000 | 378,400 | ||||||
Covidien plc | 25,000 | 1,373,750 | ||||||
Henry Schein, Inc. * | 24,600 | 1,814,988 | ||||||
4,193,438 | ||||||||
Household & Personal Products 0.4% | ||||||||
Herbalife Ltd. (a) | 16,600 | 852,410 | ||||||
Insurance 0.7% | ||||||||
Aflac, Inc. | 30,800 | 1,533,224 | ||||||
Materials 6.3% | ||||||||
Ashland, Inc. | 43,500 | 3,095,025 | ||||||
CF Industries Holdings, Inc. | 6,000 | 1,231,140 |
See financial notes 39
Table of Contents
Schwab Large-Cap Growth Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
International Paper Co. | 80,000 | 2,866,400 | ||||||
MeadWestvaco Corp. | 45,000 | 1,336,050 | ||||||
PPG Industries, Inc. | 43,000 | 5,034,440 | ||||||
13,563,055 | ||||||||
Media 4.5% | ||||||||
Comcast Corp., Class A | 100,000 | 3,751,000 | ||||||
Liberty Global, Inc., Class A * | 46,000 | 2,761,380 | ||||||
The Walt Disney Co. | 15,000 | 736,050 | ||||||
Time Warner Cable, Inc. | 26,000 | 2,576,860 | ||||||
9,825,290 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.8% | ||||||||
Agilent Technologies, Inc. | 3,300 | 118,767 | ||||||
Amgen, Inc. | 52,500 | 4,543,612 | ||||||
Biogen Idec, Inc. * | 21,800 | 3,013,196 | ||||||
Celgene Corp. * | 36,800 | 2,698,176 | ||||||
Eli Lilly & Co. | 12,600 | 612,738 | ||||||
Life Technologies Corp. * | 16,000 | 782,560 | ||||||
Mylan, Inc. * | 88,500 | 2,242,590 | ||||||
Pfizer, Inc. | 134,000 | 3,332,580 | ||||||
Thermo Fisher Scientific, Inc. | 27,700 | 1,691,362 | ||||||
19,035,581 | ||||||||
Real Estate 2.1% | ||||||||
Simon Property Group, Inc. | 30,000 | 4,566,300 | ||||||
Retailing 8.1% | ||||||||
Foot Locker, Inc. | 67,500 | 2,261,250 | ||||||
Macy’s, Inc. | 105,000 | 3,997,350 | ||||||
PetSmart, Inc. | 26,300 | 1,746,057 | ||||||
Target Corp. | 32,500 | 2,071,875 | ||||||
The Gap, Inc. | 69,000 | 2,464,680 | ||||||
The Home Depot, Inc. | 20,000 | 1,227,600 | ||||||
The TJX Cos., Inc. | 93,500 | 3,892,405 | ||||||
17,661,217 | ||||||||
Semiconductors & Semiconductor Equipment 2.1% | ||||||||
Applied Materials, Inc. | 109,500 | 1,160,700 | ||||||
LSI Corp. * | 350,000 | 2,397,500 | ||||||
NVIDIA Corp. | 87,000 | 1,041,390 | ||||||
4,599,590 | ||||||||
Software & Services 17.6% | ||||||||
Alliance Data Systems Corp. * | 20,000 | 2,861,000 | ||||||
BMC Software, Inc. * | 100,000 | 4,070,000 | ||||||
CA, Inc. | 100,000 | 2,252,000 | ||||||
Citrix Systems, Inc. * | 10,000 | 618,100 | ||||||
Google, Inc., Class A * | 5,500 | 3,738,735 | ||||||
International Business Machines Corp. | 19,600 | 3,812,788 | ||||||
Microsoft Corp. | 273,000 | 7,790,055 | ||||||
Oracle Corp. | 230,100 | 7,144,605 | ||||||
Symantec Corp. * | 130,000 | 2,364,700 | ||||||
Synopsys, Inc. * | 28,000 | 901,600 | ||||||
Teradata Corp. * | 5,000 | 341,550 | ||||||
The Western Union Co. | 188,900 | 2,399,030 | ||||||
38,294,163 | ||||||||
Technology Hardware & Equipment 10.6% | ||||||||
Amphenol Corp., Class A | 11,200 | 673,456 | ||||||
Apple, Inc. | 28,000 | 16,662,800 | ||||||
Dell, Inc. | 66,000 | 609,180 | ||||||
EMC Corp. * | 95,000 | 2,319,900 | ||||||
TE Connectivity Ltd. | 49,000 | 1,576,820 | ||||||
Western Digital Corp. | 31,000 | 1,061,130 | ||||||
22,903,286 | ||||||||
Telecommunication Services 3.4% | ||||||||
Crown Castle International Corp. * | 25,800 | 1,722,150 | ||||||
Verizon Communications, Inc. | 126,700 | 5,655,888 | ||||||
7,378,038 | ||||||||
Transportation 1.3% | ||||||||
Delta Air Lines, Inc. * | 47,000 | 452,610 | ||||||
Hertz Global Holdings, Inc. * | 90,500 | 1,200,935 | ||||||
United Parcel Service, Inc., Class B | 16,100 | 1,179,325 | ||||||
2,832,870 | ||||||||
Utilities 0.3% | ||||||||
CenterPoint Energy, Inc. | 21,500 | 465,905 | ||||||
The AES Corp. | 24,000 | 250,800 | ||||||
716,705 | ||||||||
Total Common Stock | ||||||||
(Cost $188,602,224) | 214,622,286 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 1.0% of net assets | ||||||||
Time Deposit 1.0% | ||||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 2,095,830 | 2,095,830 | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
0.11%, 12/20/12 (b)(c) | 77,000 | 76,989 | ||||||
Total Short-Term Investments | ||||||||
(Cost $2,172,819) | 2,172,819 | |||||||
End of Investments. | ||||||||
40 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.4% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund | 816,098 | 816,098 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $816,098) | 816,098 | |||||||
End of Collateral Invested for Securities on Loan |
At 10/31/12, the tax basis cost of the fund’s investments was $190,891,232 and the unrealized appreciation and depreciation were $30,205,312 and ($4,301,439), respectively, with a net unrealized appreciation of $25,903,873.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 20 | 1,406,800 | (47,435 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $214,622,286 | $— | $— | $214,622,286 | ||||||||||||
Short-Term Investments1 | — | 2,172,819 | — | 2,172,819 | ||||||||||||
Total | $214,622,286 | $2,172,819 | $— | $216,795,105 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $816,098 | $— | $— | $816,098 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | ($47,435 | ) | $— | $— | ($47,435 | ) |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 41
Table of Contents
Schwab Large-Cap Growth Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $190,775,043) including securities on loan of $809,790 | $216,795,105 | |||||
Collateral invested for securities on loan | 816,098 | |||||
Receivables: | ||||||
Fund shares sold | 658,717 | |||||
Dividends | 79,561 | |||||
Income from securities on loan | 178 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 8,457 | ||||
Total assets | 218,358,117 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 816,098 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 11,478 | |||||
Shareholder service fees | 4,392 | |||||
Fund shares redeemed | 372,624 | |||||
Due to brokers for futures | 800 | |||||
Accrued expenses | + | 55,003 | ||||
Total liabilities | 1,260,395 | |||||
Net Assets | ||||||
Total assets | 218,358,117 | |||||
Total liabilities | − | 1,260,395 | ||||
Net assets | $217,097,722 | |||||
Net Assets by Source | ||||||
Capital received from investors | 236,137,051 | |||||
Net investment income not yet distributed | 873,339 | |||||
Net realized capital losses | (45,885,295 | ) | ||||
Net unrealized capital gains | 25,972,627 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$217,097,722 | 17,398,027 | $12.48 |
42 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends | $3,368,656 | |||||
Interest | 833 | |||||
Securities on loan | + | 178 | ||||
Total investment income | 3,369,667 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,591,582 | |||||
Shareholder service fees | 546,098 | |||||
Portfolio accounting fees | 40,805 | |||||
Shareholder reports | 36,984 | |||||
Professional fees | 33,290 | |||||
Transfer agent fees | 24,723 | |||||
Registration fees | 24,468 | |||||
Custodian fees | 8,783 | |||||
Trustees’ fees | 7,201 | |||||
State filing fee reimbursement (Note 4) | (6,516 | ) | ||||
Other expenses | + | 6,200 | ||||
Total expenses | 2,313,618 | |||||
Expense reduction by CSIM and its affiliates1 | − | 125,209 | ||||
Net expenses | − | 2,188,409 | ||||
Net investment income | 1,181,258 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 29,012,634 | |||||
Net realized gains on futures contracts | + | 406,387 | ||||
Net realized gains | 29,419,021 | |||||
Net unrealized losses on investments | (5,386,747 | ) | ||||
Net unrealized losses on futures contracts | + | (120,196 | ) | |||
Net unrealized losses | + | (5,506,943 | ) | |||
Net realized and unrealized gains | 23,912,078 | |||||
Increase in net assets resulting from operations | $25,093,336 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $6,516. See financial note 4 for additional information. |
See financial notes 43
Table of Contents
Schwab Large-Cap Growth Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $1,181,258 | $1,283,025 | ||||||||
Net realized gains | 29,419,021 | 22,676,262 | ||||||||
Net unrealized losses | + | (5,506,943 | ) | (7,897,223 | ) | |||||
Increase in net assets from operations | 25,093,336 | 16,062,064 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,032,046 | ) | ($1,241,602 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,590,944 | $31,765,041 | 3,665,376 | $41,539,298 | ||||||||||||||
Shares reinvested | 45,504 | 506,911 | 51,489 | 572,556 | ||||||||||||||
Shares redeemed | + | (4,310,391 | ) | (52,516,380 | ) | (5,580,743 | ) | (63,063,162 | ) | |||||||||
Net transactions in fund shares | (1,673,943 | ) | ($20,244,428 | ) | (1,863,878 | ) | ($20,951,308 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (1,673,943 | ) | 3,816,862 | (1,863,878 | ) | (6,130,846 | ) | ||||||||||
End of period | 17,398,027 | $217,097,722 | 19,071,970 | $213,280,860 | ||||||||||||||
Net investment income not yet distributed | $873,339 | $724,127 |
44 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.61 | 13.96 | 11.14 | 10.55 | 18.22 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.02 | (0.01 | ) | (0.04 | ) | (0.02 | ) | (0.01 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 2.10 | 1.66 | 2.86 | 0.61 | (6.59 | ) | ||||||||||||||||
Total from investment operations | 2.12 | 1.65 | 2.82 | 0.59 | (6.60 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.01 | ) | — | — | (0.00 | )2 | — | |||||||||||||||
Distributions from net realized gains | — | — | — | — | (1.07 | ) | ||||||||||||||||
Total distributions | (0.01 | ) | — | — | (0.00 | )2 | (1.07 | ) | ||||||||||||||
Net asset value at end of period | 17.72 | 15.61 | 13.96 | 11.14 | 10.55 | |||||||||||||||||
Total return (%) | 13.57 | 11.82 | 25.31 | 5.65 | (38.16 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.12 | 1.11 | 1.12 | 1.12 | 1.11 | |||||||||||||||||
Gross operating expenses | 1.12 | 1.12 | 1.14 | 1.17 | 1.12 | |||||||||||||||||
Net investment income (loss) | 0.11 | (0.05 | ) | (0.26 | ) | (0.16 | ) | (0.09 | ) | |||||||||||||
Portfolio turnover rate | 101 | 72 | 64 | 85 | 50 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 388 | 226 | 219 | 202 | 79 |
1 Effective September 28, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Amount is less than $0.01.
See financial notes 45
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .6% | Common Stock | 348,294,937 | 386,006,596 | ||||||||
0 | .4% | Short-Term Investments | 1,713,518 | 1,713,518 | ||||||||
100 | .0% | Total Investments | 350,008,455 | 387,720,114 | ||||||||
1 | .3% | Collateral Invested for Securities on Loan | 4,939,227 | 4,939,227 | ||||||||
(1 | .3)% | Other Assets and Liabilities, Net | (5,095,098 | ) | ||||||||
100 | .0% | Total Net Assets | 387,564,243 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.6% of net assets | ||||||||
Automobiles & Components 0.4% | ||||||||
Cooper Tire & Rubber Co. | 30,900 | 622,017 | ||||||
Dana Holding Corp. | 36,458 | 479,787 | ||||||
Standard Motor Products, Inc. | 10,400 | 195,312 | ||||||
Superior Industries International, Inc. | 10,300 | 176,027 | ||||||
1,473,143 | ||||||||
Banks 6.7% | ||||||||
1st Source Corp. | 25,600 | 568,576 | ||||||
BancFirst Corp. | 21,700 | 953,932 | ||||||
BancorpSouth, Inc. | 101,200 | 1,431,980 | ||||||
Bank of Kentucky Financial Corp. | 7,400 | 186,036 | ||||||
Banner Corp. | 111,571 | 3,234,443 | ||||||
Cathay General Bancorp | 11,900 | 210,511 | ||||||
Columbia Banking System, Inc. | 34,600 | 612,766 | ||||||
Community Trust Bancorp, Inc. | 12,400 | 420,608 | ||||||
F.N.B. Corp. | 77,700 | 833,721 | ||||||
First Citizens BancShares, Inc., Class A | 9,100 | 1,535,625 | ||||||
First Defiance Financial Corp. | 17,200 | 304,440 | ||||||
First Merchants Corp. | 59,300 | 872,303 | ||||||
First Midwest Bancorp, Inc. | 36,700 | 453,979 | ||||||
Heritage Commerce Corp. * | 37,100 | 244,489 | ||||||
MainSource Financial Group, Inc. | 19,800 | 247,896 | ||||||
MB Financial, Inc. | 45,300 | 917,778 | ||||||
Metro Bancorp, Inc. * | 21,500 | 279,070 | ||||||
Ocwen Financial Corp. * | 29,000 | 1,118,530 | ||||||
PacWest Bancorp | 109,500 | 2,463,750 | ||||||
Peoples Bancorp, Inc. | 6,500 | 138,450 | ||||||
Pinnacle Financial Partners, Inc. * | 44,900 | 877,795 | ||||||
PrivateBancorp, Inc. | 141,600 | 2,288,256 | ||||||
Renasant Corp. | 12,500 | 230,125 | ||||||
StellarOne Corp. | 23,400 | 321,048 | ||||||
Sterling Financial Corp. | 21,300 | 452,838 | ||||||
Synovus Financial Corp. | 825,400 | 2,022,230 | ||||||
The Bancorp, Inc. * | 9,700 | 110,289 | ||||||
Union First Market Bankshares Corp. | 13,100 | 205,670 | ||||||
United Community Banks, Inc. * | 78,100 | 679,470 | ||||||
Virginia Commerce Bancorp, Inc. * | 22,900 | 209,764 | ||||||
WesBanco, Inc. | 24,500 | 539,000 | ||||||
Western Alliance Bancorp * | 96,600 | 991,116 | ||||||
25,956,484 | ||||||||
Capital Goods 8.7% | ||||||||
AAR Corp. | 62,700 | 946,143 | ||||||
Aceto Corp. | 94,600 | 947,892 | ||||||
Actuant Corp., Class A | 49,400 | 1,395,056 | ||||||
Aegion Corp. * | 34,400 | 635,368 | ||||||
Altra Holdings, Inc. | 20,400 | 367,608 | ||||||
American Railcar Industries, Inc. * | 28,700 | 843,206 | ||||||
American Woodmark Corp. * | 14,700 | 338,100 | ||||||
Apogee Enterprises, Inc. | 112,900 | 2,299,773 | ||||||
AZZ, Inc. | 14,508 | 572,196 | ||||||
Columbus McKinnon Corp. * | 11,600 | 173,652 | ||||||
Curtiss-Wright Corp. | 50,200 | 1,549,674 | ||||||
EnerSys, Inc. * | 91,700 | 3,161,816 | ||||||
Esterline Technologies Corp. * | 15,100 | 872,629 | ||||||
Federal Signal Corp. * | 165,500 | 954,935 | ||||||
Flow International Corp. * | 158,700 | 526,884 | ||||||
FreightCar America, Inc. | 57,700 | 1,110,725 | ||||||
Gibraltar Industries, Inc. * | 64,900 | 808,654 | ||||||
Granite Construction, Inc. | 100,600 | 3,039,126 | ||||||
Griffon Corp. | 25,000 | 253,750 | ||||||
Harsco Corp. | 100,900 | 2,016,991 | ||||||
Hurco Cos., Inc. * | 9,200 | 211,416 | ||||||
Hyster-Yale Materials Handling, Inc., Class B (c)(d)* | 19,300 | �� | 792,844 | |||||
Kadant, Inc. * | 30,000 | 728,700 | ||||||
LSI Industries, Inc. | 7,300 | 49,494 | ||||||
Lydall, Inc. * | 70,400 | 908,864 | ||||||
Moog, Inc., Class A * | 61,500 | 2,276,115 | ||||||
Mueller Water Products, Inc., Class A | 133,700 | 696,577 | ||||||
Northwest Pipe Co. * | 4,700 | 108,006 | ||||||
Pike Electric Corp. * | 28,000 | 255,080 | ||||||
Powell Industries, Inc. * | 4,400 | 175,032 | ||||||
Sauer-Danfoss, Inc. | 52,100 | 2,087,126 | ||||||
Standex International Corp. | 34,300 | 1,586,032 | ||||||
Sterling Construction Co., Inc. * | 4,200 | 37,380 | ||||||
Sypris Solutions, Inc. | 35,700 | 224,910 | ||||||
Taser International, Inc. * | 30,000 | 234,300 | ||||||
Trex Co., Inc. * | 10,900 | 380,846 | ||||||
Vicor Corp. * | 9,500 | 60,610 | ||||||
33,627,510 | ||||||||
Commercial & Professional Supplies 1.9% | ||||||||
Courier Corp. | 4,900 | 59,045 | ||||||
EnergySolutions, Inc. * | 96,400 | 275,704 | ||||||
G&K Services, Inc., Class A | 39,000 | 1,257,750 | ||||||
Heidrick & Struggles International, Inc. | 10,700 | 126,688 | ||||||
Hudson Global, Inc. * | 31,400 | 126,856 | ||||||
Intersections, Inc. (a) | 33,300 | 309,357 |
46 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Kelly Services, Inc., Class A | 45,600 | 606,024 | ||||||
Kimball International, Inc., Class B | 38,100 | 454,914 | ||||||
RPX Corp. * | 80,400 | 846,612 | ||||||
Steelcase, Inc., Class A | 119,000 | 1,191,190 | ||||||
Sykes Enterprises, Inc. * | 47,100 | 641,502 | ||||||
The Brink’s Co. | 30,100 | 791,931 | ||||||
The Corporate Executive Board Co. | 17,000 | 764,320 | ||||||
7,451,893 | ||||||||
Consumer Durables & Apparel 3.1% | ||||||||
CSS Industries, Inc. | 20,600 | 414,060 | ||||||
Culp, Inc. | 12,400 | 156,736 | ||||||
Helen of Troy Ltd. * | 11,200 | 338,464 | ||||||
Jarden Corp. | 61,000 | 3,037,800 | ||||||
Johnson Outdoors, Inc., Class A * | 5,100 | 99,501 | ||||||
La-Z-Boy, Inc. * | 51,600 | 836,952 | ||||||
LeapFrog Enterprises, Inc. * | 36,000 | 318,240 | ||||||
Movado Group, Inc. | 41,100 | 1,302,459 | ||||||
NACCO Industries, Inc., Class A | 15,600 | 789,984 | ||||||
Perry Ellis International, Inc. * | 30,200 | 623,328 | ||||||
Skechers U.S.A., Inc., Class A * | 30,400 | 504,640 | ||||||
Smith & Wesson Holding Corp. * | 42,300 | 406,080 | ||||||
The Jones Group, Inc. | 238,000 | 2,810,780 | ||||||
Unifi, Inc. * | 22,400 | 314,272 | ||||||
11,953,296 | ||||||||
Consumer Services 3.9% | ||||||||
Ascent Capital Group, Inc., Class A * | 6,800 | 404,260 | ||||||
Biglari Holdings, Inc. * | 4,100 | 1,449,801 | ||||||
Career Education Corp. * | 81,900 | 278,460 | ||||||
Coinstar, Inc. (a)* | 36,700 | 1,722,698 | ||||||
Denny’s Corp. * | 33,600 | 154,560 | ||||||
Jamba, Inc. * | 213,900 | 468,441 | ||||||
Marriott Vacations Worldwide Corp. * | 11,549 | 454,337 | ||||||
Multimedia Games Holding Co., Inc. * | 92,100 | 1,464,390 | ||||||
Pinnacle Entertainment, Inc. * | 39,400 | 502,744 | ||||||
Regis Corp. | 13,000 | 216,580 | ||||||
Ruth’s Hospitality Group, Inc. * | 36,995 | 246,017 | ||||||
Ryman Hospitality Properties * | 9,900 | 386,199 | ||||||
Scientific Games Corp., Class A * | 45,900 | 377,757 | ||||||
Service Corp. International | 135,000 | 1,895,400 | ||||||
SHFL Entertainment, Inc. * | 72,900 | 1,030,077 | ||||||
Six Flags Entertainment Corp. | 17,500 | 999,425 | ||||||
Sonic Corp. * | 37,500 | 373,875 | ||||||
Steiner Leisure Ltd. * | 31,700 | 1,392,264 | ||||||
Town Sports International Holdings, Inc. * | 93,083 | 1,172,846 | ||||||
14,990,131 | ||||||||
Diversified Financials 4.3% | ||||||||
Calamos Asset Management, Inc., Class A | 96,200 | 1,038,960 | ||||||
Cowen Group, Inc., Class A * | 167,500 | 425,450 | ||||||
FBR & Co. * | 62,100 | 185,058 | ||||||
FXCM, Inc., Class A | 133,200 | 1,198,800 | ||||||
Gain Capital Holdings, Inc. | 47,000 | 216,200 | ||||||
Interactive Brokers Group, Inc., Class A | 188,800 | 2,690,400 | ||||||
Investment Technology Group, Inc. * | 290,000 | 2,447,600 | ||||||
MicroFinancial, Inc. | 26,800 | 211,184 | ||||||
Oppenheimer Holdings, Inc., Class A | 35,300 | 574,684 | ||||||
PHH Corp. * | 176,700 | 3,677,127 | ||||||
Piper Jaffray Cos., Inc. * | 100,900 | 2,709,165 | ||||||
SWS Group, Inc. * | 94,400 | 537,136 | ||||||
Walter Investment Management Corp. * | 14,200 | 686,286 | ||||||
16,598,050 | ||||||||
Energy 7.4% | ||||||||
Alon USA Energy, Inc. | 79,700 | 1,046,461 | ||||||
Basic Energy Services, Inc. * | 58,100 | 603,659 | ||||||
Bristow Group, Inc. | 27,600 | 1,377,792 | ||||||
Contango Oil & Gas Co. * | 21,500 | 1,056,940 | ||||||
Crosstex Energy, Inc. | 76,900 | 1,051,992 | ||||||
CVR Energy, Inc. * | 14,500 | 532,875 | ||||||
Dawson Geophysical Co. * | 6,700 | 160,063 | ||||||
Delek US Holdings, Inc. | 37,500 | 965,625 | ||||||
Energy XXI (Bermuda) Ltd. | 39,400 | 1,304,140 | ||||||
EPL Oil & Gas, Inc. * | 54,400 | 1,177,216 | ||||||
Global Geophysical Services, Inc. * | 24,300 | 112,266 | ||||||
Helix Energy Solutions Group, Inc. * | 157,200 | 2,717,988 | ||||||
Hercules Offshore, Inc. * | 175,600 | 835,856 | ||||||
ION Geophysical Corp. * | 17,600 | 113,696 | ||||||
Matrix Service Co. * | 33,400 | 350,366 | ||||||
Natural Gas Services Group, Inc. * | 10,900 | 172,874 | ||||||
Parker Drilling Co. * | 395,500 | 1,712,515 | ||||||
Penn Virginia Corp. | 26,100 | 117,972 | ||||||
Pioneer Energy Services Corp. * | 130,600 | 861,960 | ||||||
REX American Resources Corp. * | 15,400 | 271,194 | ||||||
SEACOR Holdings, Inc. * | 7,400 | 649,054 | ||||||
SemGroup Corp., Class A * | 96,000 | 3,709,440 | ||||||
Stone Energy Corp. * | 32,600 | 769,034 | ||||||
Teekay Offshore Partners LP (a) | 89,800 | 2,387,782 | ||||||
VAALCO Energy, Inc. * | 122,200 | 998,374 | ||||||
Warren Resources, Inc. * | 122,300 | 348,555 | ||||||
Western Refining, Inc. | 94,800 | 2,357,676 | ||||||
Willbros Group, Inc. * | 155,600 | 795,116 | ||||||
28,558,481 | ||||||||
Food & Staples Retailing 0.6% | ||||||||
The Pantry, Inc. * | 157,700 | 2,091,891 | ||||||
Village Super Market, Inc., Class A | 2,700 | 99,009 | ||||||
2,190,900 | ||||||||
Food, Beverage & Tobacco 1.8% | ||||||||
Alico, Inc. | 1,800 | 56,502 | ||||||
Alliance One International, Inc. * | 33,500 | 101,840 | ||||||
Chiquita Brands International, Inc. * | 17,600 | 126,896 | ||||||
Coca-Cola Bottling Co. Consolidated | 22,800 | 1,567,272 | ||||||
Darling International, Inc. * | 22,274 | 368,189 | ||||||
Dean Foods Co. * | 28,900 | 486,676 | ||||||
Farmer Brothers Co. * | 45,300 | 440,769 | ||||||
Fresh Del Monte Produce, Inc. | 10,900 | 274,353 | ||||||
Post Holdings, Inc. * | 16,200 | 511,110 | ||||||
Universal Corp. | 61,100 | 3,028,116 | ||||||
6,961,723 |
See financial notes 47
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Health Care Equipment & Services 4.3% | ||||||||
Air Methods Corp. * | 5,300 | 581,039 | ||||||
Allscripts Healthcare Solutions, Inc. * | 19,900 | 257,108 | ||||||
AMN Healthcare Services, Inc. * | 42,500 | 421,600 | ||||||
Analogic Corp. | 7,500 | 552,450 | ||||||
ArthroCare Corp. * | 22,600 | 679,808 | ||||||
Bio-Reference Laboratories, Inc. (a)* | 11,400 | 316,464 | ||||||
BioScrip, Inc. * | 15,500 | 142,755 | ||||||
Cantel Medical Corp. | 55,350 | 1,439,653 | ||||||
CONMED Corp. | 44,400 | 1,228,104 | ||||||
Cross Country Healthcare, Inc. * | 17,600 | 77,440 | ||||||
CryoLife, Inc. | 46,100 | 285,359 | ||||||
Cynosure, Inc., Class A * | 24,800 | 653,232 | ||||||
Greatbatch, Inc. * | 28,300 | 622,034 | ||||||
Haemonetics Corp. * | 15,200 | 1,241,840 | ||||||
Integra LifeSciences Holdings Corp. * | 15,700 | 600,525 | ||||||
Invacare Corp. | 18,000 | 245,700 | ||||||
Magellan Health Services, Inc. * | 12,600 | 631,890 | ||||||
MedAssets, Inc. * | 49,600 | 879,408 | ||||||
Molina Healthcare, Inc. * | 33,900 | 849,873 | ||||||
National Healthcare Corp. | 16,600 | 790,492 | ||||||
NuVasive, Inc. * | 23,900 | 344,638 | ||||||
Rochester Medical Corp. * | 7,500 | 78,675 | ||||||
RTI Biologics, Inc. * | 192,700 | 782,362 | ||||||
STERIS Corp. | 20,700 | 737,127 | ||||||
SurModics, Inc. * | 10,600 | 190,588 | ||||||
Symmetry Medical, Inc. * | 19,600 | 179,536 | ||||||
The Providence Service Corp. * | 11,700 | 119,340 | ||||||
Thoratec Corp. * | 22,700 | 810,390 | ||||||
Triple-S Management Corp., Class B * | 14,000 | 252,560 | ||||||
West Pharmaceutical Services, Inc. | 10,800 | 581,796 | ||||||
16,573,786 | ||||||||
Insurance 2.3% | ||||||||
American Equity Investment Life Holding Co. | 90,900 | 1,046,259 | ||||||
American Financial Group, Inc. | 39,100 | 1,517,080 | ||||||
CNO Financial Group, Inc. | 22,400 | 214,592 | ||||||
First American Financial Corp. | 155,700 | 3,542,175 | ||||||
Maiden Holdings Ltd. | 77,900 | 658,255 | ||||||
Primerica, Inc. | 48,100 | 1,359,306 | ||||||
ProAssurance Corp. | 3,500 | 312,900 | ||||||
Stewart Information Services Corp. | 12,200 | 284,504 | ||||||
8,935,071 | ||||||||
Materials 5.8% | ||||||||
AEP Industries, Inc. * | 18,000 | 1,150,740 | ||||||
Buckeye Technologies, Inc. | 17,600 | 461,120 | ||||||
Chemtura Corp. * | 48,400 | 771,012 | ||||||
Coeur d’Alene Mines Corp. * | 113,700 | 3,514,467 | ||||||
Commercial Metals Co. | 159,600 | 2,196,096 | ||||||
Graphic Packaging Holding Co. * | 196,100 | 1,160,912 | ||||||
Handy & Harman Ltd. * | 16,500 | 245,355 | ||||||
Headwaters, Inc. * | 33,300 | 239,427 | ||||||
Landec Corp. * | 17,700 | 191,514 | ||||||
LSB Industries, Inc. * | 7,244 | 291,716 | ||||||
Minerals Technologies, Inc. | 44,600 | 3,196,036 | ||||||
Neenah Paper, Inc. | 99,400 | 2,574,460 | ||||||
OM Group, Inc. * | 56,400 | 1,140,972 | ||||||
Omnova Solutions, Inc. * | 90,100 | 706,384 | ||||||
P.H. Glatfelter Co. | 75,100 | 1,337,531 | ||||||
Rockwood Holdings, Inc. | 18,000 | 826,200 | ||||||
Spartech Corp. * | 27,900 | 238,824 | ||||||
Texas Industries, Inc. (a)* | 8,900 | 383,857 | ||||||
Tredegar Corp. | 53,500 | 907,895 | ||||||
Worthington Industries, Inc. | 47,100 | 1,018,302 | ||||||
22,552,820 | ||||||||
Media 1.1% | ||||||||
AH Belo Corp., Class A | 48,000 | 240,000 | ||||||
Journal Communications, Inc., Class A * | 78,800 | 442,068 | ||||||
Scholastic Corp. | 66,200 | 2,183,938 | ||||||
The E.W. Scripps Co., Class A * | 74,600 | 791,506 | ||||||
The New York Times Co., Class A * | 90,600 | 741,108 | ||||||
4,398,620 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.5% | ||||||||
Acorda Therapeutics, Inc. * | 120,900 | 2,895,555 | ||||||
Albany Molecular Research, Inc. * | 48,400 | 171,336 | ||||||
AMAG Pharmaceuticals, Inc. * | 23,200 | 359,136 | ||||||
Auxilium Pharmaceuticals, Inc. * | 9,100 | 186,368 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 20,700 | 2,097,945 | ||||||
BioDelivery Sciences International, Inc. (a)* | 114,800 | 586,628 | ||||||
Cambrex Corp. * | 94,800 | 1,145,184 | ||||||
Charles River Laboratories International, Inc. * | 79,800 | 2,978,136 | ||||||
Cornerstone Therapeutics, Inc. * | 30,300 | 148,167 | ||||||
DUSA Pharmaceuticals, Inc. * | 46,900 | 321,734 | ||||||
Enzo Biochem, Inc. * | 126,700 | 253,400 | ||||||
Geron Corp. * | 90,400 | 120,232 | ||||||
Harvard Bioscience, Inc. * | 20,500 | 82,410 | ||||||
Isis Pharmaceuticals, Inc. * | 35,100 | 303,615 | ||||||
Lexicon Pharmaceuticals, Inc. * | 116,800 | 241,776 | ||||||
Maxygen, Inc. | 288,300 | 703,452 | ||||||
Myriad Genetics, Inc. * | 51,500 | 1,347,755 | ||||||
Obagi Medical Products, Inc. * | 74,500 | 918,585 | ||||||
Orexigen Therapeutics, Inc. * | 21,800 | 116,194 | ||||||
PAREXEL International Corp. * | 117,900 | 3,618,351 | ||||||
PDL Biopharma, Inc. | 418,500 | 3,117,825 | ||||||
PerkinElmer, Inc. | 19,900 | 615,507 | ||||||
Santarus, Inc. * | 69,600 | 635,448 | ||||||
SciClone Pharmaceuticals, Inc. * | 192,600 | 1,061,226 | ||||||
ViroPharma, Inc. * | 29,100 | 734,775 | ||||||
Xenoport, Inc. * | 63,600 | 523,428 | ||||||
25,284,168 | ||||||||
Real Estate 8.2% | ||||||||
Acadia Realty Trust | 20,700 | 531,576 | ||||||
Apartment Investment & Management Co., Class A | 109,100 | 2,911,879 | ||||||
CapLease, Inc. | 113,700 | 583,281 | ||||||
CBL & Associates Properties, Inc. | 160,300 | 3,585,911 | ||||||
CommonWealth REIT | 36,400 | 499,044 | ||||||
Coresite Realty Corp. | 105,900 | 2,407,107 | ||||||
Cousins Properties, Inc. | 75,900 | 638,319 | ||||||
DCT Industrial Trust, Inc. | 512,000 | 3,302,400 |
48 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Extra Space Storage, Inc. | 82,100 | 2,831,629 | ||||||
FelCor Lodging Trust, Inc. * | 191,200 | 841,280 | ||||||
First Industrial Realty Trust, Inc. * | 241,500 | 3,224,025 | ||||||
Kite Realty Group Trust | 169,600 | 927,712 | ||||||
Mission West Properties, Inc. | 34,100 | 282,348 | ||||||
Pennsylvania Real Estate Investment Trust | 161,400 | 2,667,942 | ||||||
RLJ Lodging Trust | 11,300 | 201,366 | ||||||
Saul Centers, Inc. | 33,500 | 1,449,545 | ||||||
Strategic Hotels & Resorts, Inc. * | 470,300 | 2,581,947 | ||||||
Sunstone Hotel Investors, Inc. * | 252,600 | 2,495,688 | ||||||
31,962,999 | ||||||||
Retailing 5.9% | ||||||||
1-800-FLOWERS.COM, Inc., Class A * | 177,400 | 643,962 | ||||||
Aaron’s, Inc. | 74,400 | 2,293,752 | ||||||
ANN, Inc. * | 84,700 | 2,978,052 | ||||||
Ascena Retail Group, Inc. * | 14,000 | 277,200 | ||||||
Brown Shoe Co., Inc. | 119,400 | 1,884,132 | ||||||
Core-Mark Holding Co., Inc. | 21,200 | 1,014,844 | ||||||
Dillard’s, Inc., Class A | 32,700 | 2,517,900 | ||||||
Geeknet, Inc. * | 4,500 | 81,765 | ||||||
Kirkland’s, Inc. * | 52,200 | 500,598 | ||||||
New York & Co., Inc. * | 69,600 | 234,552 | ||||||
Office Depot, Inc. * | 709,500 | 1,759,560 | ||||||
OfficeMax, Inc. | 14,200 | 104,370 | ||||||
Orbitz Worldwide, Inc. * | 227,900 | 562,913 | ||||||
Rent-A-Center, Inc. | 96,900 | 3,229,677 | ||||||
rue21, Inc. * | 52,200 | 1,571,742 | ||||||
Stage Stores, Inc. | 27,400 | 671,300 | ||||||
The Bon-Ton Stores, Inc. (a) | 15,900 | 195,252 | ||||||
The Children’s Place Retail Stores, Inc. * | 15,700 | 917,351 | ||||||
The Pep Boys - Manny, Moe & Jack | 33,300 | 332,667 | ||||||
Tuesday Morning Corp. * | 129,100 | 770,727 | ||||||
Zale Corp. * | 43,500 | 312,330 | ||||||
22,854,646 | ||||||||
Semiconductors & Semiconductor Equipment 3.1% | ||||||||
Advanced Energy Industries, Inc. * | 14,500 | 171,245 | ||||||
Alpha & Omega Semiconductor Ltd. * | 14,200 | 120,984 | ||||||
Axcelis Technologies, Inc. * | 92,700 | 84,960 | ||||||
AXT, Inc. * | 49,700 | 159,537 | ||||||
Cohu, Inc. | 22,200 | 195,360 | ||||||
DSP Group, Inc. * | 26,000 | 143,000 | ||||||
Entegris, Inc. * | 251,300 | 2,063,173 | ||||||
Entropic Communications, Inc. * | 145,600 | 700,336 | ||||||
Exar Corp. * | 67,800 | 579,690 | ||||||
Fairchild Semiconductor International, Inc. * | 40,400 | 475,104 | ||||||
First Solar, Inc. (a)* | 41,700 | 1,013,727 | ||||||
FormFactor, Inc. * | 204,100 | 930,696 | ||||||
GSI Technology, Inc. * | 15,100 | 84,409 | ||||||
IXYS Corp. * | 71,600 | 681,632 | ||||||
MEMC Electronic Materials, Inc. * | 85,300 | 214,956 | ||||||
PDF Solutions, Inc. * | 22,871 | 302,812 | ||||||
Pericom Semiconductor Corp. * | 43,700 | 337,801 | ||||||
Photronics, Inc. * | 264,500 | 1,293,405 | ||||||
Rudolph Technologies, Inc. * | 37,500 | 356,625 | ||||||
Sigma Designs, Inc. * | 69,100 | 410,454 | ||||||
Spansion, Inc., Class A * | 53,500 | 593,315 | ||||||
SunPower Corp. (a)* | 39,727 | 171,223 | ||||||
Ultra Clean Holdings, Inc. * | 50,200 | 232,426 | ||||||
Ultratech, Inc. * | 20,800 | 642,928 | ||||||
11,959,798 | ||||||||
Software & Services 11.2% | ||||||||
Accelrys, Inc. * | 135,500 | 1,212,725 | ||||||
Actuate Corp. * | 31,500 | 167,895 | ||||||
Acxiom Corp. * | 214,000 | 3,905,500 | ||||||
AOL, Inc. * | 58,100 | 1,994,573 | ||||||
Blucora, Inc. * | 25,800 | 452,790 | ||||||
CACI International, Inc., Class A * | 31,000 | 1,563,330 | ||||||
CIBER, Inc. * | 29,800 | 92,976 | ||||||
Convergys Corp. | 203,100 | 3,414,111 | ||||||
CoreLogic, Inc. * | 106,600 | 2,537,080 | ||||||
CSG Systems International, Inc. * | 112,800 | 2,324,808 | ||||||
Dice Holdings, Inc. * | 82,800 | 731,124 | ||||||
Digital River, Inc. * | 45,400 | 651,036 | ||||||
DST Systems, Inc. | 8,600 | 490,544 | ||||||
EarthLink, Inc. | 73,600 | 466,624 | ||||||
EPIQ Systems, Inc. | 47,600 | 581,196 | ||||||
Euronet Worldwide, Inc. * | 145,500 | 2,952,195 | ||||||
Fair Isaac Corp. | 12,400 | 577,840 | ||||||
Heartland Payment Systems, Inc. | 23,300 | 607,664 | ||||||
IntraLinks Holdings, Inc. * | 53,400 | 298,506 | ||||||
Limelight Networks, Inc. * | 76,500 | 161,415 | ||||||
Lionbridge Technologies, Inc. * | 144,900 | 459,333 | ||||||
MAXIMUS, Inc. | 31,300 | 1,727,134 | ||||||
Mentor Graphics Corp. * | 212,600 | 3,299,552 | ||||||
MoneyGram International, Inc. * | 98,624 | 1,532,617 | ||||||
Monotype Imaging Holdings, Inc. | 37,900 | 580,249 | ||||||
Move, Inc. * | 48,100 | 398,749 | ||||||
NetScout Systems, Inc. * | 34,400 | 850,712 | ||||||
Rosetta Stone, Inc. * | 17,600 | 206,096 | ||||||
Rovi Corp. * | 15,200 | 205,656 | ||||||
SeaChange International, Inc. * | 96,800 | 876,040 | ||||||
SS&C Technologies Holdings, Inc. * | 48,200 | 1,158,246 | ||||||
Support.com, Inc. * | 76,200 | 353,568 | ||||||
Syntel, Inc. | 15,500 | 923,955 | ||||||
TechTarget, Inc. * | 6,700 | 32,026 | ||||||
The Hackett Group, Inc. * | 27,500 | 106,975 | ||||||
TNS, Inc. * | 96,500 | 1,381,880 | ||||||
Unisys Corp. * | 86,440 | 1,473,802 | ||||||
United Online, Inc. | 194,200 | 1,040,912 | ||||||
VASCO Data Security International, Inc. * | 22,800 | 161,424 | ||||||
Virtusa Corp. * | 31,900 | 547,404 | ||||||
Websense, Inc. * | 41,900 | 553,918 | ||||||
XO Group, Inc. * | 25,100 | 202,055 | ||||||
43,256,235 | ||||||||
Technology Hardware & Equipment 5.3% | ||||||||
Arris Group, Inc. * | 129,700 | 1,782,078 | ||||||
Aviat Networks, Inc. * | 177,200 | 404,016 | ||||||
Avid Technology, Inc. * | 55,300 | 324,611 | ||||||
Bel Fuse, Inc., Class B | 7,700 | 127,512 | ||||||
Benchmark Electronics, Inc. * | 43,000 | 637,260 | ||||||
Ciena Corp. * | 102,600 | 1,273,266 |
See financial notes 49
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Daktronics, Inc. | 25,300 | 221,881 | ||||||
Electro Scientific Industries, Inc. | 43,800 | 467,784 | ||||||
Electronics for Imaging, Inc. * | 30,200 | 524,272 | ||||||
Emulex Corp. * | 175,500 | 1,221,480 | ||||||
Harmonic, Inc. * | 398,100 | 1,727,754 | ||||||
Imation Corp. * | 18,400 | 84,088 | ||||||
Insight Enterprises, Inc. * | 124,400 | 2,011,548 | ||||||
Itron, Inc. * | 19,300 | 792,458 | ||||||
Ixia * | 78,800 | 1,103,988 | ||||||
KEMET Corp. * | 21,800 | 98,972 | ||||||
Littelfuse, Inc. | 6,500 | 348,400 | ||||||
Methode Electronics, Inc. | 25,500 | 258,060 | ||||||
MTS Systems Corp. | 29,300 | 1,477,013 | ||||||
Newport Corp. * | 37,200 | 402,504 | ||||||
OSI Systems, Inc. * | 8,500 | 673,625 | ||||||
Plexus Corp. * | 45,100 | 1,213,641 | ||||||
Power-One, Inc. * | 135,900 | 547,677 | ||||||
Quantum Corp. * | 156,500 | 164,325 | ||||||
Radisys Corp. * | 65,400 | 185,736 | ||||||
Richardson Electronics Ltd. | 21,700 | 252,805 | ||||||
Sanmina-SCI Corp. * | 103,400 | 919,226 | ||||||
STEC, Inc. * | 48,400 | 284,108 | ||||||
Symmetricom, Inc. * | 64,700 | 397,905 | ||||||
TTM Technologies, Inc. * | 22,600 | 203,400 | ||||||
Vishay Intertechnology, Inc. * | 40,200 | 332,856 | ||||||
Zygo Corp. * | 14,400 | 268,128 | ||||||
20,732,377 | ||||||||
Telecommunication Services 0.8% | ||||||||
Atlantic Tele-Network, Inc. | 13,100 | 542,864 | ||||||
Cbeyond, Inc. * | 62,100 | 475,686 | ||||||
IDT Corp., Class B | 86,000 | 870,320 | ||||||
Premiere Global Services, Inc. * | 166,500 | 1,415,250 | ||||||
3,304,120 | ||||||||
Transportation 2.4% | ||||||||
AMERCO | 10,100 | 1,166,954 | ||||||
Arkansas Best Corp. | 23,800 | 191,590 | ||||||
Avis Budget Group, Inc. * | 95,200 | 1,573,656 | ||||||
Celadon Group, Inc. | 70,100 | 1,198,710 | ||||||
Con-way, Inc. | 64,600 | 1,880,506 | ||||||
International Shipholding Corp. | 17,300 | 289,256 | ||||||
JetBlue Airways Corp. * | 222,700 | 1,178,083 | ||||||
Park-Ohio Holdings Corp. * | 28,200 | 623,784 | ||||||
Republic Airways Holdings, Inc. * | 52,900 | 247,043 | ||||||
Saia, Inc. * | 6,000 | 135,600 | ||||||
SkyWest, Inc. | 65,900 | 721,605 | ||||||
9,206,787 | ||||||||
Utilities 3.9% | ||||||||
American States Water Co. | 20,100 | 884,802 | ||||||
Avista Corp. | 124,800 | 3,172,416 | ||||||
Black Hills Corp. | 91,500 | 3,272,955 | ||||||
NorthWestern Corp. | 2,800 | 100,268 | ||||||
Ormat Technologies, Inc. | 38,600 | 734,558 | ||||||
Portland General Electric Co. | 127,600 | 3,496,240 | ||||||
Southwest Gas Corp. | 48,500 | 2,108,295 | ||||||
UNS Energy Corp. | 34,100 | 1,454,024 | ||||||
15,223,558 | ||||||||
Total Common Stock | ||||||||
(Cost $348,294,937) | 386,006,596 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.4% of net assets | ||||||||
Time Deposits 0.4% | ||||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 1,647,527 | 1,647,527 | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
0.11%, 12/20/12 (b) | 66,000 | 65,991 | ||||||
Total Short-Term Investments | ||||||||
(Cost $1,713,518) | 1,713,518 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 1.3% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund | 4,939,227 | 4,939,227 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $4,939,227) | 4,939,227 | |||||||
End of Collateral Invested for Securities on Loan |
At 10/31/12, the tax basis cost of the fund’s investments was $350,541,940 and the unrealized appreciation and depreciation were $53,341,509 and ($16,163,335), respectively, with a net unrealized appreciation of $37,178,174.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | The rate shown is the purchase yield. | |
(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 $792,844 or 0.2% of net assets. |
REIT — | Real Estate Investment Trust |
50 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $352,379,086 | $— | $— | $352,379,086 | ||||||||||||
Capital Goods | 32,834,666 | — | 792,844 | 33,627,510 | ||||||||||||
Short-Term Investments1 | — | 1,713,518 | — | 1,713,518 | ||||||||||||
Total | $385,213,752 | $1,713,518 | $792,844 | $387,720,114 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $4,939,227 | $— | $— | $4,939,227 |
1 | As categorized in Portfolio 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 | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | $— | $— | $273,298 | $519,546 | $— | $— | $— | $792,844 | ||||||||||||||||||||||||
Total | $— | $— | $273,298 | $519,546 | $— | $— | $— | $792,844 | ||||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was $273,298.
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 51
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $350,008,455) including securities on loan of $4,940,938 | $387,720,114 | |||||
Collateral invested for securities on loan | 4,939,227 | |||||
Receivables: | ||||||
Fund shares sold | 206,855 | |||||
Dividends | 172,627 | |||||
Income from securities on loan | 15,317 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 6,959 | ||||
Total assets | 393,061,100 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 4,939,227 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 24,645 | |||||
Shareholder service fees | 8,036 | |||||
Fund shares redeemed | 472,301 | |||||
Accrued expenses | + | 52,648 | ||||
Total liabilities | 5,496,857 | |||||
Net Assets | ||||||
Total assets | 393,061,100 | |||||
Total liabilities | − | 5,496,857 | ||||
Net assets | $387,564,243 | |||||
Net Assets by Source | ||||||
Capital received from investors | 364,180,929 | |||||
Net investment income not yet distributed | 339,903 | |||||
Net realized capital losses | (14,668,248 | ) | ||||
Net unrealized capital gains | 37,711,659 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$387,564,243 | 21,876,358 | $17.72 |
52 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends | $4,360,032 | |||||
Interest | 2,252 | |||||
Securities on loan | + | 196,532 | ||||
Total investment income | 4,558,816 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,011,522 | |||||
Shareholder service fees | 918,743 | |||||
Registration fees | 52,812 | |||||
Portfolio accounting fees | 46,526 | |||||
Shareholder reports | 45,825 | |||||
Professional fees | 34,715 | |||||
Transfer agent fees | 25,543 | |||||
Custodian fees | 23,569 | |||||
Trustees’ fees | 7,770 | |||||
State filing fee reimbursement (Note 4) | (2,710 | ) | ||||
Other expenses | + | 7,753 | ||||
Total expenses | 4,172,068 | |||||
Expense reduction by CSIM and its affiliates1 | − | 25,543 | ||||
Net expenses | − | 4,146,525 | ||||
Net investment income | 412,291 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 33,127,702 | |||||
Net realized gains on futures contracts | + | 1,456,169 | ||||
Net realized gains | 34,583,871 | |||||
Net unrealized gains on investments | 23,531,055 | |||||
Net unrealized losses on futures contracts | + | (475,396 | ) | |||
Net unrealized gains | + | 23,055,659 | ||||
Net realized and unrealized gains | 57,639,530 | |||||
Increase in net assets resulting from operations | $58,051,821 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $2,710. See financial note 4 for additional information. |
See financial notes 53
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income (loss) | $412,291 | ($107,754 | ) | |||||||
Net realized gains | 34,583,871 | 42,777,267 | ||||||||
Net unrealized gains (losses) | + | 23,055,659 | (15,822,877 | ) | ||||||
Increase in net assets from operations | 58,051,821 | 26,846,636 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($177,045 | ) | $— |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 10,994,013 | $164,489,009 | 2,170,598 | $33,586,870 | ||||||||||||||
Shares reinvested | 3,977 | 61,875 | — | — | ||||||||||||||
Shares redeemed | + | (3,628,709 | ) | (61,262,349 | ) | (3,345,626 | ) | (52,956,292 | ) | |||||||||
Net transactions in fund shares | 7,369,281 | $103,288,535 | (1,175,028 | ) | ($19,369,422 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 7,369,281 | 161,163,311 | (1,175,028 | ) | 7,477,214 | ||||||||||||
End of period | 21,876,358 | $387,564,243 | 14,507,077 | $226,400,932 | ||||||||||||||
Net investment income not yet distributed/(Distributions in excess of net investment income) | $339,903 | ($162,424 | ) |
54 See financial notes
Table of Contents
Schwab Hedged Equity Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.32 | 14.79 | 13.45 | 12.55 | 16.39 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.08 | ) | (0.05 | ) | (0.08 | ) | (0.05 | ) | (0.05 | ) | ||||||||||||
Net realized and unrealized gains (losses) | 1.12 | 0.58 | 1.42 | 0.96 | (3.63 | ) | ||||||||||||||||
Total from investment operations | 1.04 | 0.53 | 1.34 | 0.91 | (3.68 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | — | (0.01 | ) | (0.16 | ) | |||||||||||||||
Total distributions | — | — | — | (0.01 | ) | (0.16 | ) | |||||||||||||||
Net asset value at end of period | 16.36 | 15.32 | 14.79 | 13.45 | 12.55 | |||||||||||||||||
Total return (%) | 6.79 | 3.58 | 9.96 | 7.28 | (22.66 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses (including dividend expense on short sales) | 2.08 | 1.86 | 1.97 | 2.07 | 2 | 2.17 | 3 | |||||||||||||||
Net operating expenses (excluding dividend expense on short sales) | 1.53 | 4 | 1.44 | 5 | 1.38 | 6 | 1.62 | 2,6 | 1.77 | |||||||||||||
Gross operating expenses | 2.13 | 1.88 | 1.99 | 2.29 | 2.19 | |||||||||||||||||
Net investment income (loss) | (0.47 | ) | (0.25 | ) | (0.54 | ) | (0.41 | ) | (0.17 | ) | ||||||||||||
Portfolio turnover rate | 109 | 98 | 115 | 169 | 138 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 194 | 236 | 329 | 306 | 343 |
1 Effective September 28, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
3 The ratio of net operating expenses would have been 2.16%, if interest expense had not been incurred.
4 The ratio of net operating expenses would have been 1.33% for the period ended 10/31/12, if stock loan fees on short sales had not been incurred.
5 The ratio of net operating expenses would have been 1.33% for the period ended 10/31/11, if stock loan fees on short sales and payment for state filing fees had not been included.
6 The ratio of net operating expenses would have been 1.47% and 1.31% for the period ended 10/31/09, and 10/31/10, respectively, if stock loan fees on short sales had not been incurred.
See financial notes 55
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings as of October 31, 2012
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 | 169,273,330 | 192,489,748 | ||||||||
1 | .3% | Other Investment Company | 2,592,462 | 2,592,462 | ||||||||
100 | .4% | Total Investments | 171,865,792 | 195,082,210 | ||||||||
(45 | .7)% | Short Sales | (89,979,644 | ) | (88,735,500 | ) | ||||||
45 | .3% | Other Assets and Liabilities, Net | 88,019,047 | |||||||||
100 | .0% | Total Net Assets | 194,365,757 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.1% of net assets | ||||||||
Automobiles & Components 0.1% | ||||||||
The Goodyear Tire & Rubber Co. * | 9,000 | 102,690 | ||||||
Banks 4.6% | ||||||||
Fifth Third Bancorp | 78,998 | 1,147,841 | ||||||
KeyCorp (a) | 208,300 | 1,753,886 | ||||||
Regions Financial Corp. (a) | 248,600 | 1,620,872 | ||||||
SunTrust Banks, Inc. | 23,634 | 642,845 | ||||||
Wells Fargo & Co. (a) | 114,491 | 3,857,202 | ||||||
9,022,646 | ||||||||
Capital Goods 8.4% | ||||||||
3M Co. | 4,600 | 402,960 | ||||||
AGCO Corp. * | 34,373 | 1,564,315 | ||||||
Curtiss-Wright Corp. | 43,600 | 1,345,932 | ||||||
Fluor Corp. | 28,200 | 1,574,970 | ||||||
General Electric Co. (a) | 122,305 | 2,575,743 | ||||||
Masco Corp. (a) | 112,100 | 1,691,589 | ||||||
Roper Industries, Inc. | 6,500 | 709,605 | ||||||
Terex Corp. * | 10,700 | 241,285 | ||||||
Textron, Inc. | 84,735 | 2,136,170 | ||||||
The Timken Co. | 17,617 | 695,695 | ||||||
United Technologies Corp. | 4,300 | 336,088 | ||||||
Wabtec Corp. (a) | 36,300 | 2,972,970 | ||||||
16,247,322 | ||||||||
Commercial & Professional Supplies 0.8% | ||||||||
Equifax, Inc. | 13,800 | 690,552 | ||||||
Towers Watson & Co., Class A | 15,526 | 833,901 | ||||||
1,524,453 | ||||||||
Consumer Durables & Apparel 3.0% | ||||||||
Brunswick Corp. (a) | 41,478 | 978,466 | ||||||
Harman International Industries, Inc. | 20,200 | 846,986 | ||||||
Jarden Corp. (a) | 23,611 | 1,175,828 | ||||||
Mohawk Industries, Inc. (a)* | 26,220 | 2,188,583 | ||||||
Newell Rubbermaid, Inc. | 12,600 | 260,064 | ||||||
The Jones Group, Inc. | 35,300 | 416,893 | ||||||
5,866,820 | ||||||||
Consumer Services 0.7% | ||||||||
Brinker International, Inc. (a) | 42,226 | 1,300,561 | ||||||
Diversified Financials 5.2% | ||||||||
Bank of America Corp. | 118,400 | 1,103,488 | ||||||
JPMorgan Chase & Co. (a) | 93,012 | 3,876,740 | ||||||
Northern Trust Corp. | 11,700 | 559,026 | ||||||
SLM Corp. (a) | 146,709 | 2,579,144 | ||||||
State Street Corp. | 8,500 | 378,845 | ||||||
The Bank of New York Mellon Corp. | 64,500 | 1,593,795 | ||||||
10,091,038 | ||||||||
Energy 11.4% | ||||||||
Chevron Corp. | 32,596 | 3,592,405 | ||||||
EOG Resources, Inc. | 29,900 | 3,483,051 | ||||||
Exxon Mobil Corp. | 61,420 | 5,599,662 | ||||||
Helix Energy Solutions Group, Inc. * | 12,300 | 212,667 | ||||||
Marathon Oil Corp. | 79,400 | 2,386,764 | ||||||
Murphy Oil Corp. (a) | 41,553 | 2,493,180 | ||||||
Oceaneering International, Inc. (a) | 24,501 | 1,282,137 | ||||||
Schlumberger Ltd. | 10,700 | 743,971 | ||||||
Teekay Offshore Partners LP | 27,100 | 720,589 | ||||||
Tesoro Corp. | 5,327 | 200,881 | ||||||
Valero Energy Corp. (a) | 53,078 | 1,544,570 | ||||||
22,259,877 | ||||||||
Food & Staples Retailing 2.1% | ||||||||
Costco Wholesale Corp. | 8,700 | 856,341 | ||||||
Harris Teeter Supermarkets, Inc. | 12,904 | 483,255 | ||||||
The Kroger Co. (a) | 108,743 | 2,742,498 | ||||||
4,082,094 | ||||||||
Food, Beverage & Tobacco 6.7% | ||||||||
Archer-Daniels-Midland Co. | 10,300 | 276,452 | ||||||
Beam, Inc. (a) | 33,300 | 1,850,148 | ||||||
Bunge Ltd. (a) | 34,444 | 2,446,557 | ||||||
Constellation Brands, Inc., Class A (a)* | 19,379 | 684,854 | ||||||
Ingredion, Inc. (a) | 52,849 | 3,248,100 | ||||||
Smithfield Foods, Inc. (a)* | 29,003 | 593,691 | ||||||
The Coca-Cola Co. | 60,000 | 2,230,800 | ||||||
Universal Corp. | 32,400 | 1,605,744 | ||||||
12,936,346 | ||||||||
Health Care Equipment & Services 2.0% | ||||||||
Allscripts Healthcare Solutions, Inc. * | 9,400 | 121,448 | ||||||
Covidien plc | 6,300 | 346,185 |
56 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Henry Schein, Inc. * | 4,100 | 302,498 | ||||||
Masimo Corp. * | 9,800 | 215,306 | ||||||
McKesson Corp. | 18,128 | 1,691,524 | ||||||
Medtronic, Inc. | 18,900 | 785,862 | ||||||
UnitedHealth Group, Inc. | 9,200 | 515,200 | ||||||
3,978,023 | ||||||||
Household & Personal Products 0.1% | ||||||||
Nu Skin Enterprises, Inc., Class A | 5,000 | 236,650 | ||||||
Insurance 3.1% | ||||||||
American Financial Group, Inc. | 65,535 | 2,542,758 | ||||||
Genworth Financial, Inc., Class A * | 36,200 | 215,752 | ||||||
Marsh & McLennan Cos., Inc. | 8,500 | 289,255 | ||||||
MetLife, Inc. | 21,800 | 773,682 | ||||||
Principal Financial Group, Inc. | 39,132 | 1,077,695 | ||||||
Reinsurance Group of America, Inc. | 8,300 | 439,236 | ||||||
The Travelers Cos., Inc. | 9,900 | 702,306 | ||||||
6,040,684 | ||||||||
Materials 7.2% | ||||||||
CF Industries Holdings, Inc. | 944 | 193,699 | ||||||
Coeur d’Alene Mines Corp. * | 42,400 | 1,310,584 | ||||||
Huntsman Corp. (a) | 80,200 | 1,206,208 | ||||||
International Paper Co. (a) | 66,916 | 2,397,600 | ||||||
MeadWestvaco Corp. (a) | 81,747 | 2,427,069 | ||||||
Minerals Technologies, Inc. (a) | 38,946 | 2,790,870 | ||||||
PPG Industries, Inc. | 20,072 | 2,350,030 | ||||||
Rockwood Holdings, Inc. | 19,828 | 910,105 | ||||||
United States Steel Corp. | 18,500 | 377,215 | ||||||
13,963,380 | ||||||||
Media 1.6% | ||||||||
CBS Corp., Class B - Non Voting Shares (a) | 82,842 | 2,684,081 | ||||||
Omnicom Group, Inc. | 7,300 | 349,743 | ||||||
3,033,824 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.8% | ||||||||
Agilent Technologies, Inc. | 18,884 | 679,635 | ||||||
Charles River Laboratories International, Inc. (a)* | 59,200 | 2,209,344 | ||||||
Merck & Co., Inc. | 43,700 | 1,994,031 | ||||||
PerkinElmer, Inc. (a) | 82,041 | 2,537,528 | ||||||
Pfizer, Inc. (a) | 219,587 | 5,461,129 | ||||||
Warner Chilcott plc, Class A | 22,400 | 259,392 | ||||||
13,141,059 | ||||||||
Real Estate 3.1% | ||||||||
CBL & Associates Properties, Inc. (a) | 93,000 | 2,080,410 | ||||||
Host Hotels & Resorts, Inc. (a) | 176,800 | 2,556,528 | ||||||
Strategic Hotels & Resorts, Inc. (a)* | 238,600 | 1,309,914 | ||||||
5,946,852 | ||||||||
Retailing 5.1% | ||||||||
ANN, Inc. * | 5,200 | 182,832 | ||||||
Ascena Retail Group, Inc. (a)* | 53,300 | 1,055,340 | ||||||
Chico’s FAS, Inc. | 21,300 | 396,180 | ||||||
Dillard’s, Inc., Class A | 27,157 | 2,091,089 | ||||||
Expedia, Inc. | 1,900 | 112,385 | ||||||
Foot Locker, Inc. | 82,989 | 2,780,132 | ||||||
Macy’s, Inc. | 67,321 | 2,562,910 | ||||||
The TJX Cos., Inc. | 16,400 | 682,732 | ||||||
9,863,600 | ||||||||
Semiconductors & Semiconductor Equipment 2.7% | ||||||||
Amkor Technology, Inc. (a)* | 154,276 | 666,472 | ||||||
Fairchild Semiconductor International, Inc. (a)* | 120,810 | 1,420,726 | ||||||
First Solar, Inc. * | 14,100 | 342,771 | ||||||
LSI Corp. * | 206,066 | 1,411,552 | ||||||
Micron Technology, Inc. (a)* | 208,354 | 1,130,321 | ||||||
NVIDIA Corp. | 27,900 | 333,963 | ||||||
5,305,805 | ||||||||
Software & Services 10.0% | ||||||||
BMC Software, Inc. * | 15,300 | 622,710 | ||||||
CA, Inc. (a) | 112,306 | 2,529,131 | ||||||
Cadence Design Systems, Inc. (a)* | 137,800 | 1,744,548 | ||||||
Convergys Corp. (a) | 100,622 | 1,691,456 | ||||||
DST Systems, Inc. | 45,439 | 2,591,841 | ||||||
IAC/InterActiveCorp | 46,318 | 2,239,475 | ||||||
MAXIMUS, Inc. (a) | 13,003 | 717,506 | ||||||
Microsoft Corp. | 23,900 | 681,986 | ||||||
Oracle Corp. | 60,400 | 1,875,420 | ||||||
Symantec Corp. (a)* | 108,425 | 1,972,251 | ||||||
Total System Services, Inc. (a) | 123,600 | 2,779,764 | ||||||
19,446,088 | ||||||||
Technology Hardware & Equipment 7.4% | ||||||||
Apple, Inc. | 9,728 | 5,789,133 | ||||||
AVX Corp. | 63,681 | 626,621 | ||||||
Brocade Communications Systems, Inc. (a)* | 349,224 | 1,850,887 | ||||||
Cisco Systems, Inc. | 37,800 | 647,892 | ||||||
EchoStar Corp., Class A (a)* | 33,367 | 1,059,736 | ||||||
EMC Corp. * | 10,200 | 249,084 | ||||||
Jabil Circuit, Inc. | 38,188 | 662,180 | ||||||
NCR Corp. (a)* | 45,849 | 975,667 | ||||||
Tech Data Corp. (a)* | 34,245 | 1,517,396 | ||||||
Western Digital Corp. | 18,779 | 642,805 | ||||||
Xerox Corp. | 47,342 | 304,882 | ||||||
14,326,283 | ||||||||
Telecommunication Services 1.5% | ||||||||
Telephone & Data Systems, Inc. (a) | 39,620 | 985,349 | ||||||
Verizon Communications, Inc. | 45,000 | 2,008,800 | ||||||
2,994,149 | ||||||||
Transportation 2.3% | ||||||||
Con-way, Inc. | 10,500 | 305,655 | ||||||
Delta Air Lines, Inc. (a)* | 150,700 | 1,451,241 | ||||||
FedEx Corp. | 27,592 | 2,538,188 |
See financial notes 57
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hertz Global Holdings, Inc. * | 13,200 | 175,164 | ||||||
4,470,248 | ||||||||
Utilities 3.2% | ||||||||
Ameren Corp. (a) | 77,366 | 2,543,794 | ||||||
Portland General Electric Co. | 38,700 | 1,060,380 | ||||||
Southwest Gas Corp. (a) | 40,370 | 1,754,884 | ||||||
The AES Corp. (a) | 90,928 | 950,198 | ||||||
6,309,256 | ||||||||
Total Common Stock | ||||||||
(Cost $169,273,330) | 192,489,748 | |||||||
Other Investment Company 1.3% of net assets | ||||||||
Money Market Fund 1.3% | ||||||||
State Street Institutional U.S. Government Money Market Fund | 2,592,462 | 2,592,462 | ||||||
Total Other Investment Company | ||||||||
(Cost $2,592,462) | 2,592,462 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $171,867,863 and the unrealized appreciation and depreciation were $28,707,035 and ($5,489,688), respectively, with a net unrealized appreciation of $23,217,347.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for short sales. |
58 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Short Sales 45.7% of net assets | ||||||||
Automobiles & Components 0.8% | ||||||||
Gentex Corp. | 62,900 | 1,083,138 | ||||||
Johnson Controls, Inc. | 20,400 | 525,300 | ||||||
1,608,438 | ||||||||
Banks 4.1% | ||||||||
Bank of Hawaii Corp. | 22,400 | 989,184 | ||||||
Bank of the Ozarks, Inc. | 32,800 | 1,073,872 | ||||||
BankUnited, Inc. | 43,100 | 1,021,901 | ||||||
Capitol Federal Financial, Inc. | 83,900 | 999,249 | ||||||
First Niagara Financial Group, Inc. | 114,500 | 948,060 | ||||||
IBERIABANK Corp. | 19,300 | 960,947 | ||||||
New York Community Bancorp, Inc. | 77,400 | 1,072,764 | ||||||
Valley National Bancorp | 86,835 | 845,773 | ||||||
7,911,750 | ||||||||
Capital Goods 3.8% | ||||||||
Air Lease Corp. * | 52,000 | 1,082,640 | ||||||
Colfax Corp. * | 33,900 | 1,165,821 | ||||||
Fortune Brands Home & Security, Inc. * | 8,100 | 230,364 | ||||||
GrafTech International Ltd. * | 56,400 | 592,764 | ||||||
Joy Global, Inc. | 8,500 | 530,825 | ||||||
MasTec, Inc. * | 62,600 | 1,412,256 | ||||||
Owens Corning * | 4,200 | 141,078 | ||||||
Pall Corp. | 18,800 | 1,183,648 | ||||||
Rockwell Collins, Inc. | 18,300 | 980,514 | ||||||
7,319,910 | ||||||||
Commercial & Professional Supplies 1.6% | ||||||||
Corrections Corp. of America | 6,600 | 222,090 | ||||||
Stericycle, Inc. * | 11,100 | 1,051,836 | ||||||
The Advisory Board Co. * | 15,900 | 755,250 | ||||||
Waste Connections, Inc. | 32,700 | 1,073,541 | ||||||
3,102,717 | ||||||||
Consumer Durables & Apparel 1.5% | ||||||||
Carter’s, Inc. * | 8,600 | 464,916 | ||||||
D.R. Horton, Inc. | 35,200 | 737,792 | ||||||
M.D.C. Holdings, Inc. | 15,400 | 588,896 | ||||||
Meritage Homes Corp. * | 17,100 | 632,358 | ||||||
Standard Pacific Corp. * | 70,100 | 483,690 | ||||||
2,907,652 | ||||||||
Consumer Services 0.4% | ||||||||
DeVry, Inc. | 20,100 | 527,826 | ||||||
Weight Watchers International, Inc. | 5,900 | 296,475 | ||||||
824,301 | ||||||||
Diversified Financials 1.0% | ||||||||
Apollo Investment Corp. | 55,900 | 444,405 | ||||||
CME Group, Inc. | 6,000 | 335,580 | ||||||
T. Rowe Price Group, Inc. | 16,500 | 1,071,510 | ||||||
1,851,495 | ||||||||
Energy 4.2% | ||||||||
Approach Resources, Inc. * | 7,600 | 187,188 | ||||||
Cabot Oil & Gas Corp. | 21,400 | 1,005,372 | ||||||
Carrizo Oil & Gas, Inc. * | 18,400 | 493,488 | ||||||
Cheniere Energy, Inc. * | 6,400 | 102,976 | ||||||
Concho Resources, Inc. * | 2,000 | 172,240 | ||||||
Continental Resources, Inc. * | 12,100 | 869,506 | ||||||
Dril-Quip, Inc. * | 15,400 | 1,066,604 | ||||||
FMC Technologies, Inc. * | 5,100 | 208,590 | ||||||
Gulfport Energy Corp. * | 7,600 | 252,168 | ||||||
Kodiak Oil & Gas Corp. * | 98,484 | 909,992 | ||||||
Oasis Petroleum, Inc. * | 32,400 | 951,588 | ||||||
PDC Energy, Inc. * | 6,500 | 196,755 | ||||||
Range Resources Corp. | 3,700 | 241,832 | ||||||
Southwestern Energy Co. * | 33,900 | 1,176,330 | ||||||
World Fuel Services Corp. | 9,300 | 322,710 | ||||||
8,157,339 | ||||||||
Food & Staples Retailing 1.1% | ||||||||
PriceSmart, Inc. | 2,100 | 174,279 | ||||||
Sysco Corp. | 35,300 | 1,096,771 | ||||||
The Fresh Market, Inc. * | 14,500 | 822,295 | ||||||
2,093,345 | ||||||||
Food, Beverage & Tobacco 3.4% | ||||||||
B&G Foods, Inc. | 33,600 | 1,017,072 | ||||||
Dr Pepper Snapple Group, Inc. | 25,000 | 1,071,250 | ||||||
Hormel Foods Corp. | 29,100 | 859,323 | ||||||
Reynolds American, Inc. | 18,428 | 767,342 | ||||||
Sanderson Farms, Inc. | 19,600 | 887,684 | ||||||
Snyders-Lance, Inc. | 23,900 | 605,626 | ||||||
The Hain Celestial Group, Inc. * | 7,300 | 421,940 | ||||||
Vector Group Ltd. | 60,480 | 995,501 | ||||||
6,625,738 | ||||||||
Health Care Equipment & Services 1.5% | ||||||||
DexCom, Inc. * | 90,800 | 1,189,480 | ||||||
HeartWare International, Inc. * | 8,800 | 739,024 | ||||||
HMS Holdings Corp. * | 8,200 | 189,338 | ||||||
MEDNAX, Inc. * | 11,800 | 813,964 | ||||||
2,931,806 | ||||||||
Household & Personal Products 0.2% | ||||||||
Church & Dwight Co., Inc. | 7,700 | 390,852 | ||||||
Insurance 2.5% | ||||||||
Cincinnati Financial Corp. | 25,600 | 1,019,904 | ||||||
Erie Indemnity Co., Class A | 13,700 | 852,414 | ||||||
MBIA, Inc. * | 78,100 | 773,190 | ||||||
Mercury General Corp. | 12,200 | 494,466 | ||||||
RLI Corp. | 15,500 | 1,056,790 | ||||||
The Progressive Corp. | 17,100 | 381,330 | ||||||
White Mountains Insurance Group Ltd. | 700 | 358,890 | ||||||
4,936,984 |
See financial notes 59
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 3.7% | ||||||||
AK Steel Holding Corp. | 32,300 | 162,792 | ||||||
Albemarle Corp. | 9,500 | 523,545 | ||||||
Allied Nevada Gold Corp. * | 26,000 | 959,920 | ||||||
AptarGroup, Inc. | 10,300 | 528,184 | ||||||
Compass Minerals International, Inc. | 3,400 | 268,090 | ||||||
Eagle Materials, Inc. | 4,900 | 259,553 | ||||||
Louisiana-Pacific Corp. * | 38,800 | 612,652 | ||||||
NewMarket Corp. | 1,000 | 271,310 | ||||||
Praxair, Inc. | 8,700 | 924,027 | ||||||
Sealed Air Corp. | 16,200 | 262,764 | ||||||
Sigma-Aldrich Corp. | 9,900 | 694,386 | ||||||
Southern Copper Corp. | 30,985 | 1,180,528 | ||||||
Walter Energy, Inc. | 17,100 | 597,816 | ||||||
7,245,567 | ||||||||
Media 0.9% | ||||||||
DreamWorks Animation SKG, Inc., Class A * | 61,300 | 1,248,681 | ||||||
Lions Gate Entertainment Corp. * | 27,800 | 463,704 | ||||||
1,712,385 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.4% | ||||||||
Akorn, Inc. * | 24,000 | 288,240 | ||||||
Mettler-Toledo International, Inc. * | 3,400 | 575,858 | ||||||
864,098 | ||||||||
Real Estate 2.0% | ||||||||
Education Realty Trust, Inc. | 14,600 | 153,738 | ||||||
Government Properties Income Trust | 42,900 | 951,951 | ||||||
LTC Properties, Inc. | 8,100 | 267,381 | ||||||
Rayonier, Inc. | 20,400 | 999,804 | ||||||
Realty Income Corp. | 19,500 | 765,765 | ||||||
Senior Housing Properties Trust | 36,000 | 791,280 | ||||||
3,929,919 | ||||||||
Retailing 2.9% | ||||||||
AutoZone, Inc. * | 2,600 | 975,000 | ||||||
Big Lots, Inc. * | 8,300 | 241,779 | ||||||
CarMax, Inc. * | 32,300 | 1,090,125 | ||||||
Group 1 Automotive, Inc. | 16,500 | 1,023,165 | ||||||
HomeAway, Inc. * | 10,500 | 269,955 | ||||||
Kohl’s Corp. | 14,100 | 751,248 | ||||||
Pier 1 Imports, Inc. | 48,500 | 989,400 | ||||||
Shutterfly, Inc. * | 8,400 | 254,184 | ||||||
5,594,856 | ||||||||
Semiconductors & Semiconductor Equipment 1.0% | ||||||||
Cavium, Inc. * | 24,500 | 812,910 | ||||||
Cirrus Logic, Inc. * | 17,000 | 692,920 | ||||||
Lam Research Corp. * | 13,000 | 460,200 | ||||||
1,966,030 | ||||||||
Software & Services 3.0% | ||||||||
Blackbaud, Inc. | 7,300 | 173,521 | ||||||
Concur Technologies, Inc. * | 15,800 | 1,046,434 | ||||||
CoStar Group, Inc. * | 4,800 | 397,920 | ||||||
Informatica Corp. * | 14,300 | 388,102 | ||||||
Jive Software, Inc. * | 34,900 | 390,880 | ||||||
LinkedIn Corp., Class A * | 6,700 | 716,431 | ||||||
Liquidity Services, Inc. * | 8,000 | 329,840 | ||||||
NetSuite, Inc. * | 21,300 | 1,352,763 | ||||||
QLIK Technologies, Inc. * | 23,000 | 423,430 | ||||||
ServiceSource International, Inc. * | 58,800 | 529,788 | ||||||
5,749,109 | ||||||||
Technology Hardware & Equipment 2.8% | ||||||||
Acme Packet, Inc. * | 22,100 | 365,534 | ||||||
ADTRAN, Inc. | 26,600 | 449,274 | ||||||
Aruba Networks, Inc. * | 4,200 | 76,314 | ||||||
F5 Networks, Inc. * | 8,300 | 684,584 | ||||||
Fusion-io, Inc. * | 18,000 | 424,800 | ||||||
IPG Photonics Corp. * | 1,900 | 100,852 | ||||||
Loral Space & Communications, Inc. | 5,400 | �� | 424,764 | |||||
National Instruments Corp. | 37,400 | 881,144 | ||||||
SanDisk Corp. * | 24,000 | 1,002,240 | ||||||
Universal Display Corp. * | 4,400 | 144,232 | ||||||
ViaSat, Inc. * | 21,400 | 831,176 | ||||||
5,384,914 | ||||||||
Transportation 2.9% | ||||||||
Atlas Air Worldwide Holdings, Inc. * | 18,700 | 1,028,313 | ||||||
C.H. Robinson Worldwide, Inc. | 15,400 | 929,082 | ||||||
Heartland Express, Inc. | 17,200 | 239,940 | ||||||
Hub Group, Inc., Class A * | 28,600 | 886,886 | ||||||
J.B. Hunt Transport Services, Inc. | 3,000 | 176,100 | ||||||
Kirby Corp. * | 12,800 | 735,744 | ||||||
Norfolk Southern Corp. | 13,900 | 852,765 | ||||||
Spirit Airlines, Inc. * | 44,300 | 777,465 | ||||||
5,626,295 | ||||||||
Total Short Sales | ||||||||
(Proceeds $89,979,644) | 88,735,500 | |||||||
End of Short Sale Positions. |
* | Non-income producing security. |
60 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $192,489,748 | $— | $— | $192,489,748 | ||||||||||||
Other Investment Company1 | 2,592,462 | — | — | 2,592,462 | ||||||||||||
Total | $195,082,210 | $— | $— | $195,082,210 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Short Sales1 | ($88,735,500 | ) | $— | $— | ($88,735,500 | ) |
1 | As categorized in Portfolio Holdings. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 61
Table of Contents
Schwab Hedged Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $171,865,792) | $195,082,210 | |||||
Deposits with broker for short sales | 88,186,200 | |||||
Receivables: | ||||||
Fund shares sold | 425,223 | |||||
Dividends | 97,617 | |||||
Interest | 117 | |||||
Prepaid expenses | + | 7,742 | ||||
Total assets | 283,799,109 | |||||
Liabilities | ||||||
Securities sold short, at value (proceeds $89,979,644) | 88,735,500 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 15,906 | |||||
Shareholder service fees | 3,706 | |||||
Fund shares redeemed | 556,988 | |||||
Dividends on short sales | 72,330 | |||||
Accrued expenses | + | 48,922 | ||||
Total liabilities | 89,433,352 | |||||
Net Assets | ||||||
Total assets | 283,799,109 | |||||
Total liabilities | − | 89,433,352 | ||||
Net assets | $194,365,757 | |||||
Net Assets by Source | ||||||
Capital received from investors | 173,467,257 | |||||
Net investment loss | (900,099 | ) | ||||
Net realized capital losses | (2,661,963 | ) | ||||
Net unrealized capital gains | 24,460,562 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$194,365,757 | 11,880,727 | $16.36 |
62 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends | $3,408,060 | |||||
Interest | + | 2,960 | ||||
Total investment income | 3,411,020 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,221,478 | |||||
Shareholder service fees | 496,557 | |||||
Dividends on short sales | 1,158,883 | |||||
Stock loan fees on short sales | 431,834 | |||||
Professional fees | 53,784 | |||||
Transfer agent fees | 46,477 | |||||
Portfolio accounting fees | 38,936 | |||||
Registration fees | 24,245 | |||||
Custodian fees | 12,345 | |||||
Shareholder reports | 10,940 | |||||
Trustees’ fees | 7,312 | |||||
Interest expense | 274 | |||||
State filing fee reimbursement (Note 4) | (4,976 | ) | ||||
Other expenses | + | 6,827 | ||||
Total expenses | 4,504,916 | |||||
Expense reduction by CSIM and its affiliates1 | − | 100,684 | ||||
Custody credits | − | 1 | ||||
Net expenses | − | 4,404,231 | ||||
Net investment loss | (993,211 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 21,377,818 | |||||
Net realized gains on futures contracts | 804,498 | |||||
Net realized losses on short sales | + | (6,516,130 | ) | |||
Net realized gains | 15,666,186 | |||||
Net unrealized gains on investments | 5,234,203 | |||||
Net unrealized losses on futures contracts | (154,429 | ) | ||||
Net unrealized losses on short sales | + | (5,785,129 | ) | |||
Net unrealized losses | + | (705,355 | ) | |||
Net realized and unrealized gains | 14,960,831 | |||||
Increase in net assets resulting from operations | $13,967,620 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $4,976. See financial note 4 for additional information. |
See financial notes 63
Table of Contents
Schwab Hedged Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment loss | ($993,211 | ) | ($727,399 | ) | ||||||
Net realized gains | 15,666,186 | 13,253,459 | ||||||||
Net unrealized losses | + | (705,355 | ) | (2,318,472 | ) | |||||
Increase in net assets from operations | $13,967,620 | $10,207,588 |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,083,203 | $33,255,732 | 3,890,847 | $60,873,641 | ||||||||||||||
Shares redeemed | + | (5,584,279 | ) | (88,481,803 | ) | (10,766,228 | ) | (164,542,266 | ) | |||||||||
Net transactions in fund shares | (3,501,076 | ) | ($55,226,071 | ) | (6,875,381 | ) | ($103,668,625 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (3,501,076 | ) | (41,258,451 | ) | (6,875,381 | ) | (93,461,037 | ) | |||||||||
End of period | 11,880,727 | $194,365,757 | 15,381,803 | $235,624,208 | ||||||||||||||
Net investment loss | ($900,099 | ) | $— |
64 See financial notes
Table of Contents
Schwab Financial Services Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.17 | 9.74 | 8.77 | 9.05 | 15.88 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.08 | 0.05 | 0.04 | 0.08 | 0.18 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.46 | (0.58 | ) | 0.99 | (0.21 | ) | (6.78 | ) | ||||||||||||||
Total from investment operations | 1.54 | (0.53 | ) | 1.03 | (0.13 | ) | (6.60 | ) | ||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.05 | ) | (0.04 | ) | (0.06 | ) | (0.15 | ) | (0.21 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.02 | ) | ||||||||||||||||
Total distributions | (0.05 | ) | (0.04 | ) | (0.06 | ) | (0.15 | ) | (0.23 | ) | ||||||||||||
Net asset value at end of period | 10.66 | 9.17 | 9.74 | 8.77 | 9.05 | |||||||||||||||||
Total return (%) | 16.92 | (5.51 | ) | 11.79 | (1.10 | ) | (42.08 | ) | ||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.94 | 0.93 | 1 | 0.95 | 2 | 0.96 | 3 | 0.94 | ||||||||||||||
Gross operating expenses | 1.10 | 1.06 | 1.04 | 0.99 | 0.94 | |||||||||||||||||
Net investment income (loss) | 0.78 | 0.45 | 0.37 | 0.91 | 1.56 | |||||||||||||||||
Portfolio turnover rate | 84 | 77 | 54 | 47 | 59 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 47 | 40 | 52 | 64 | 84 |
1 The ratio of net operating expenses would have been 0.94%, if payment for state filing fees had not been included.
2 The ratio of net operating expenses would have been 0.94%, if certain non-routine expenses had not been incurred.
3 Effective July 1, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
See financial notes 65
Table of Contents
Schwab Financial Services Fund
Portfolio Holdings as of October 31, 2012
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% | Common Stock | 41,356,860 | 45,511,783 | ||||||||
2 | .4% | Short-Term Investments | 1,144,285 | 1,144,285 | ||||||||
99 | .9% | Total Investments | 42,501,145 | 46,656,068 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 37,969 | |||||||||
100 | .0% | Total Net Assets | 46,694,037 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.5% of net assets | ||||||||
Banks 22.4% | ||||||||
BB&T Corp. | 38,000 | 1,100,100 | ||||||
Columbia Banking System, Inc. | 7,600 | 134,596 | ||||||
Comerica, Inc. | 2,800 | 83,468 | ||||||
Commerce Bancshares, Inc. | 15,540 | 591,763 | ||||||
First Citizens BancShares, Inc., Class A | 400 | 67,500 | ||||||
First Interstate BancSystem, Inc. | 11,300 | 169,839 | ||||||
Huntington Bancshares, Inc. | 11,800 | 75,402 | ||||||
KeyCorp | 57,800 | 486,676 | ||||||
MainSource Financial Group, Inc. | 10,100 | 126,452 | ||||||
Regions Financial Corp. | 119,800 | 781,096 | ||||||
SunTrust Banks, Inc. | 41,900 | 1,139,680 | ||||||
U.S. Bancorp | 12,500 | 415,125 | ||||||
United Community Banks, Inc. * | 7,100 | 61,770 | ||||||
Wells Fargo & Co. | 124,000 | 4,177,560 | ||||||
WSFS Financial Corp. | 3,100 | 131,300 | ||||||
Zions Bancorp | 41,600 | 893,152 | ||||||
10,435,479 | ||||||||
Diversified Financials 32.8% | ||||||||
American Express Co. | 32,300 | 1,807,831 | ||||||
Bank of America Corp. | 288,300 | 2,686,956 | ||||||
Capital One Financial Corp. | 25,100 | 1,510,267 | ||||||
Interactive Brokers Group, Inc., Class A | 36,600 | 521,550 | ||||||
Investment Technology Group, Inc. * | 3,000 | 25,320 | ||||||
Jefferies Group, Inc. | 23,000 | 327,520 | ||||||
JPMorgan Chase & Co. | 95,200 | 3,967,936 | ||||||
Northern Trust Corp. | 19,200 | 917,376 | ||||||
Oppenheimer Holdings, Inc., Class A | 1,200 | 19,536 | ||||||
PHH Corp. * | 2,400 | 49,944 | ||||||
SLM Corp. | 28,700 | 504,546 | ||||||
State Street Corp. | 28,000 | 1,247,960 | ||||||
SWS Group, Inc. * | 23,000 | 130,870 | ||||||
The Bank of New York Mellon Corp. | 20,800 | 513,968 | ||||||
The Goldman Sachs Group, Inc. | 8,900 | 1,089,271 | ||||||
15,320,851 | ||||||||
Insurance 27.7% | ||||||||
Aflac, Inc. | 26,600 | 1,324,148 | ||||||
American National Insurance Co. | 2,300 | 168,038 | ||||||
Berkshire Hathaway, Inc., Class B * | 12,600 | 1,088,010 | ||||||
First American Financial Corp. | 39,200 | 891,800 | ||||||
HCC Insurance Holdings, Inc. | 24,800 | 883,872 | ||||||
Loews Corp. | 24,900 | 1,052,772 | ||||||
MetLife, Inc. | 44,000 | 1,561,560 | ||||||
Primerica, Inc. | 27,400 | 774,324 | ||||||
Prudential Financial, Inc. | 20,300 | 1,158,115 | ||||||
Reinsurance Group of America, Inc. | 15,100 | 799,092 | ||||||
Symetra Financial Corp. | 44,800 | 535,360 | ||||||
The Travelers Cos., Inc. | 20,000 | 1,418,800 | ||||||
Torchmark Corp. | 17,900 | 905,561 | ||||||
Validus Holdings Ltd. | 9,500 | 340,100 | ||||||
XL Group plc | 2,200 | 54,428 | ||||||
12,955,980 | ||||||||
Real Estate 14.6% | ||||||||
Apartment Investment & Management Co., Class A | 33,700 | 899,453 | ||||||
Camden Property Trust | 5,500 | 360,965 | ||||||
CBL & Associates Properties, Inc. | 12,800 | 286,336 | ||||||
Coresite Realty Corp. | 16,600 | 377,318 | ||||||
Extra Space Storage, Inc. | 7,500 | 258,675 | ||||||
First Industrial Realty Trust, Inc. * | 35,000 | 467,250 | ||||||
Home Properties, Inc. | 2,800 | 170,212 | ||||||
Host Hotels & Resorts, Inc. | 33,300 | 481,518 | ||||||
Kimco Realty Corp. | 13,000 | 253,760 | ||||||
Kite Realty Group Trust | 52,900 | 289,363 | ||||||
Mid-America Apartment Communities, Inc. | 3,100 | 200,601 | ||||||
Pennsylvania Real Estate Investment Trust | 12,500 | 206,625 | ||||||
RLJ Lodging Trust | 6,100 | 108,702 | ||||||
Saul Centers, Inc. | 8,900 | 385,103 | ||||||
Simon Property Group, Inc. | 10,837 | 1,649,500 | ||||||
Sunstone Hotel Investors, Inc. * | 40,900 | 404,092 | ||||||
6,799,473 | ||||||||
Total Common Stock | ||||||||
(Cost $41,356,860) | 45,511,783 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.4% of net assets | ||||||||
Time Deposit 2.3% | ||||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 1,105,290 | 1,105,290 |
66 See financial notes
Table of Contents
Schwab Financial Services Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.11%, 12/20/12 (a)(b) | 39,000 | 38,995 | ||||||
Total Short-Term Investments | ||||||||
(Cost $1,144,285) | 1,144,285 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $42,516,062 and the unrealized appreciation and depreciation were $4,552,575 and ($412,569), respectively, with a net unrealized appreciation of $4,140,006.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 10 | 703,400 | (20,168 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $45,511,783 | $— | $— | $45,511,783 | ||||||||||||
Short-Term Investments1 | — | 1,144,285 | — | 1,144,285 | ||||||||||||
Total | $45,511,783 | $1,144,285 | $— | $46,656,068 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | ($20,168 | ) | $— | $— | ($20,168 | ) |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 67
Table of Contents
Schwab Financial Services Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $42,501,145) | $46,656,068 | |||||
Receivables: | ||||||
Fund shares sold | 94,570 | |||||
Dividends | 21,294 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 1,489 | ||||
Total assets | 46,773,422 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 1,432 | |||||
Shareholder service fees | 1,913 | |||||
Fund shares redeemed | 43,596 | |||||
Due to brokers for futures | 400 | |||||
Accrued expenses | + | 32,044 | ||||
Total liabilities | 79,385 | |||||
Net Assets | ||||||
Total assets | 46,773,422 | |||||
Total liabilities | − | 79,385 | ||||
Net assets | $46,694,037 | |||||
Net Assets by Source | ||||||
Capital received from investors | 78,126,724 | |||||
Net investment income not yet distributed | 222,352 | |||||
Net realized capital losses | (35,789,794 | ) | ||||
Net unrealized capital gains | 4,134,755 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$46,694,037 | 4,381,293 | $10.66 |
68 See financial notes
Table of Contents
Schwab Financial Services Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends | $750,753 | |||||
Interest | 304 | |||||
Securities on loan | + | 17 | ||||
Total investment income | 751,074 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 235,331 | |||||
Shareholder service fees | 103,958 | |||||
Portfolio accounting fees | 36,845 | |||||
Transfer agent fees | 32,513 | |||||
Professional fees | 28,803 | |||||
Registration fees | 21,929 | |||||
Shareholder reports | 9,514 | |||||
Trustees’ fees | 5,979 | |||||
Custodian fees | 4,525 | |||||
State filing fee reimbursement (Note 4) | (1,664 | ) | ||||
Other expenses | + | 1,838 | ||||
Total expenses | 479,571 | |||||
Expense reduction by CSIM and its affiliates1 | − | 69,920 | ||||
Net expenses | − | 409,651 | ||||
Net investment income | 341,423 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 1,427,826 | |||||
Net realized gains on futures contracts | + | 75,059 | ||||
Net realized gains | 1,502,885 | |||||
Net unrealized gains on investments | 4,714,262 | |||||
Net unrealized losses on futures contracts | + | (20,168 | ) | |||
Net unrealized gains | + | 4,694,094 | ||||
Net realized and unrealized gains | 6,196,979 | |||||
Increase in net assets resulting from operations | $6,538,402 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $1,664. See financial note 4 for additional information. |
See financial notes 69
Table of Contents
Schwab Financial Services Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $341,423 | $218,566 | ||||||||
Net realized gains | 1,502,885 | 343,656 | ||||||||
Net unrealized gains (losses) | + | 4,694,094 | (2,420,332 | ) | ||||||
Increase (Decrease) in net assets from operations | 6,538,402 | (1,858,110 | ) | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($224,748 | ) | ($200,494 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,195,666 | $12,102,193 | 944,737 | $9,521,425 | ||||||||||||||
Shares reinvested | 21,793 | 196,795 | 17,076 | 178,785 | ||||||||||||||
Shares redeemed | + | (1,227,292 | ) | (12,174,120 | ) | (1,921,163 | ) | (19,499,334 | ) | |||||||||
Net transactions in fund shares | (9,833 | ) | $124,868 | (959,350 | ) | ($9,799,124 | ) | |||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (9,833 | ) | 6,438,522 | (959,350 | ) | (11,857,728 | ) | ||||||||||
End of period | 4,381,293 | $46,694,037 | 4,391,126 | $40,255,515 | ||||||||||||||
Net investment income not yet distributed | $222,352 | $108,593 |
70 See financial notes
Table of Contents
Schwab Health Care Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 17.29 | 15.48 | 13.41 | 12.55 | 17.08 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.27 | 0.15 | 0.19 | 0.13 | 0.08 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.18 | 1.85 | 2.01 | 0.82 | (4.46 | ) | ||||||||||||||||
Total from investment operations | 3.45 | 2.00 | 2.20 | 0.95 | (4.38 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.15 | ) | (0.19 | ) | (0.13 | ) | (0.09 | ) | (0.05 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.10 | ) | ||||||||||||||||
Total distributions | (0.15 | ) | (0.19 | ) | (0.13 | ) | (0.09 | ) | (0.15 | ) | ||||||||||||
Net asset value at end of period | 20.59 | 17.29 | 15.48 | 13.41 | 12.55 | |||||||||||||||||
Total return (%) | 20.10 | 13.00 | 16.49 | 7.65 | (25.87 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.82 | 0.81 | 1 | 0.82 | 0.83 | 2 | 0.82 | |||||||||||||||
Gross operating expenses | 0.85 | 0.85 | 0.86 | 0.85 | 0.82 | |||||||||||||||||
Net investment income (loss) | 1.44 | 0.85 | 1.14 | 0.88 | 0.48 | |||||||||||||||||
Portfolio turnover rate | 60 | 24 | 37 | 36 | 50 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 511 | 414 | 410 | 430 | 545 |
1 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.
2 Effective July 1, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
See financial notes 71
Table of Contents
Schwab Health Care Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
77 | .3% | Common Stock | 338,568,087 | 394,944,675 | ||||||||
20 | .1% | Foreign Common Stock | 80,166,026 | 102,593,184 | ||||||||
2 | .4% | Short-Term Investments | 12,118,579 | 12,118,579 | ||||||||
99 | .8% | Total Investments | 430,852,692 | 509,656,438 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 1,259,290 | |||||||||
100 | .0% | Total Net Assets | 510,915,728 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 77.3% of net assets | ||||||||
Health Care Equipment & Services 25.2% | ||||||||
Aetna, Inc. | 50,000 | 2,185,000 | ||||||
Alere, Inc. * | 50,000 | 960,000 | ||||||
Baxter International, Inc. | 195,000 | 12,212,850 | ||||||
Becton, Dickinson & Co. | 35,000 | 2,648,800 | ||||||
Boston Scientific Corp. * | 1,675,000 | 8,609,500 | ||||||
Cigna Corp. | 75,000 | 3,825,000 | ||||||
Community Health Systems, Inc. * | 35,000 | 959,700 | ||||||
CONMED Corp. | 25,000 | 691,500 | ||||||
Covidien plc | 135,000 | 7,418,250 | ||||||
Cynosure, Inc., Class A * | 25,000 | 658,500 | ||||||
Express Scripts Holding Co. * | 150,000 | 9,231,000 | ||||||
Greatbatch, Inc. * | 100,000 | 2,198,000 | ||||||
Haemonetics Corp. * | 15,000 | 1,225,500 | ||||||
Health Management Associates, Inc., Class A * | 96,000 | 700,800 | ||||||
Henry Schein, Inc. * | 110,000 | 8,115,800 | ||||||
Hill-Rom Holdings, Inc. | 36,000 | 1,011,240 | ||||||
ICU Medical, Inc. * | 20,000 | 1,186,600 | ||||||
Integra LifeSciences Holdings Corp. * | 25,000 | 956,250 | ||||||
Invacare Corp. | 135,000 | 1,842,750 | ||||||
LifePoint Hospitals, Inc. * | 50,000 | 1,767,000 | ||||||
McKesson Corp. | 25,000 | 2,332,750 | ||||||
MedAssets, Inc. * | 210,000 | 3,723,300 | ||||||
Medtronic, Inc. | 385,000 | 16,008,300 | ||||||
ResMed, Inc. | 35,000 | 1,397,900 | ||||||
RTI Biologics, Inc. * | 81,000 | 328,860 | ||||||
Sirona Dental Systems, Inc. * | 50,000 | 2,863,000 | ||||||
STERIS Corp. | 30,000 | 1,068,300 | ||||||
Stryker Corp. | 30,000 | 1,578,000 | ||||||
SurModics, Inc. * | 15,000 | 269,700 | ||||||
Teleflex, Inc. | 25,000 | 1,698,750 | ||||||
The Cooper Cos., Inc. | 80,000 | 7,678,400 | ||||||
Thoratec Corp. * | 25,000 | 892,500 | ||||||
UnitedHealth Group, Inc. | 265,000 | 14,840,000 | ||||||
Wright Medical Group, Inc. * | 130,000 | 2,641,600 | ||||||
Zimmer Holdings, Inc. | 50,000 | 3,210,500 | ||||||
128,935,900 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 52.1% | ||||||||
Abbott Laboratories | 228,000 | 14,938,560 | ||||||
Acorda Therapeutics, Inc. * | 130,000 | 3,113,500 | ||||||
Allergan, Inc. | 25,000 | 2,248,000 | ||||||
AMAG Pharmaceuticals, Inc. * | 76,000 | 1,176,480 | ||||||
Amgen, Inc. | 315,000 | 27,261,675 | ||||||
Astex Pharmaceuticals * | 108,000 | 257,040 | ||||||
Auxilium Pharmaceuticals, Inc. * | 75,000 | 1,536,000 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 20,000 | 2,027,000 | ||||||
Biogen Idec, Inc. * | 105,000 | 14,513,100 | ||||||
Bristol-Myers Squibb Co. | 107,000 | 3,557,750 | ||||||
Celgene Corp. * | 184,000 | 13,490,880 | ||||||
Charles River Laboratories International, Inc. * | 65,000 | 2,425,800 | ||||||
Eli Lilly & Co. | 300,000 | 14,589,000 | ||||||
Forest Laboratories, Inc. * | 200,000 | 6,742,000 | ||||||
Gilead Sciences, Inc. * | 110,000 | 7,387,600 | ||||||
Johnson & Johnson | 380,000 | 26,911,600 | ||||||
Life Technologies Corp. * | 200,000 | 9,782,000 | ||||||
Merck & Co., Inc. | 775,000 | 35,363,250 | ||||||
Mylan, Inc. * | 476,000 | 12,061,840 | ||||||
Myriad Genetics, Inc. * | 50,000 | 1,308,500 | ||||||
Obagi Medical Products, Inc. * | 35,000 | 431,550 | ||||||
PAREXEL International Corp. * | 35,000 | 1,074,150 | ||||||
PDL Biopharma, Inc. | 200,000 | 1,490,000 | ||||||
PerkinElmer, Inc. | 75,000 | 2,319,750 | ||||||
Pfizer, Inc. | 1,350,000 | 33,574,500 | ||||||
POZEN, Inc. * | 50,000 | 299,500 | ||||||
Repligen Corp. * | 30,000 | 153,000 | ||||||
Santarus, Inc. * | 50,000 | 456,500 | ||||||
SciClone Pharmaceuticals, Inc. * | 50,000 | 275,500 | ||||||
Thermo Fisher Scientific, Inc. | 225,000 | 13,738,500 | ||||||
United Therapeutics Corp. * | 100,000 | 4,567,000 | ||||||
ViroPharma, Inc. * | 75,000 | 1,893,750 | ||||||
Warner Chilcott plc, Class A | 400,000 | 4,632,000 | ||||||
Xenoport, Inc. * | 50,000 | 411,500 | ||||||
266,008,775 | ||||||||
Total Common Stock | ||||||||
(Cost $338,568,087) | 394,944,675 | |||||||
Foreign Common Stock 20.1% of net assets | ||||||||
Australia 1.8% | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Cochlear Ltd. | 10,000 | 738,517 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||
CSL Ltd. | 175,000 | 8,631,118 | ||||||
9,369,635 |
72 See financial notes
Table of Contents
Schwab Health Care Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Denmark 2.0% | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
GN Store Nord A/S | 25,000 | 391,812 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.9% | ||||||||
H. Lundbeck A/S | 21,000 | 365,333 | ||||||
Novo Nordisk A/S, Class B | 60,000 | 9,618,926 | ||||||
9,984,259 | ||||||||
10,376,071 | ||||||||
France 2.8% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.8% | ||||||||
Sanofi | 160,000 | 14,052,385 | ||||||
Germany 0.8% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Bayer AG - Reg’d | 26,000 | 2,267,019 | ||||||
Merck KGaA | 15,000 | 1,918,558 | ||||||
4,185,577 | ||||||||
Israel 0.3% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Teva Pharmaceutical Industries Ltd. | 35,000 | 1,411,950 | ||||||
Japan 3.3% | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Fukuda Denshi Co., Ltd. | 2,000 | 59,710 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 3.3% | ||||||||
Astellas Pharma, Inc. | 100,000 | 4,973,758 | ||||||
Chugai Pharmaceutical Co., Ltd. | 25,000 | 506,532 | ||||||
Dainippon Sumitomo Pharma Co., Ltd. | 244,000 | 2,806,436 | ||||||
Eisai Co., Ltd. | 70,000 | 3,114,415 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 404,000 | 4,300,267 | ||||||
Otsuka Holdings Co., Ltd. | 25,000 | 770,689 | ||||||
16,472,097 | ||||||||
16,531,807 | ||||||||
Switzerland 5.6% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.6% | ||||||||
Actelion Ltd. - Reg’d * | 10,000 | 482,675 | ||||||
Novartis AG - Reg’d | 230,000 | 13,869,125 | ||||||
Roche Holding AG | 74,400 | 14,331,307 | ||||||
28,683,107 | ||||||||
United Kingdom 3.5% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 3.5% | ||||||||
AstraZeneca plc | 180,000 | 8,347,456 | ||||||
GlaxoSmithKline plc | 430,000 | 9,635,196 | ||||||
17,982,652 | ||||||||
Total Foreign Common Stock | ||||||||
(Cost $80,166,026) | 102,593,184 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.4% of net assets | ||||||||
Time Deposit 2.3% | ||||||||
Societe Generale | ||||||||
US Dollar | ||||||||
0.03%, 11/01/12 | 11,733,634 | 11,733,634 | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.11%, 12/20/12 (a)(b) | 385,000 | 384,945 | ||||||
Total Short-Term Investments | ||||||||
(Cost $12,118,579) | 12,118,579 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $430,862,520 and the unrealized appreciation and depreciation were $86,865,680 and ($8,071,762), respectively, with a net unrealized appreciation of $78,793,918.
At 10/31/12, the values of certain foreign securities held by the fund aggregating $102,593,184 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
Reg’d — | Registered |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 100 | 7,034,000 | (236,050 | ) |
See financial notes 73
Table of Contents
Schwab Health Care Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $394,944,675 | $— | $— | $394,944,675 | ||||||||||||
Foreign Common Stock | ||||||||||||||||
Australia1 | — | 9,369,635 | — | 9,369,635 | ||||||||||||
Denmark1 | — | 10,376,071 | — | 10,376,071 | ||||||||||||
France1 | — | 14,052,385 | — | 14,052,385 | ||||||||||||
Germany1 | — | 4,185,577 | — | 4,185,577 | ||||||||||||
Israel1 | — | 1,411,950 | — | 1,411,950 | ||||||||||||
Japan1 | — | 16,531,807 | — | 16,531,807 | ||||||||||||
Switzerland1 | — | 28,683,107 | — | 28,683,107 | ||||||||||||
United Kingdom1 | — | 17,982,652 | — | 17,982,652 | ||||||||||||
Short-Term Investments1 | — | 12,118,579 | — | 12,118,579 | ||||||||||||
Total | $394,944,675 | $114,711,763 | $— | $509,656,438 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($236,050 | ) | $— | $— | ($236,050 | ) |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
74 See financial notes
Table of Contents
Schwab Health Care Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $430,852,692) | $509,656,438 | |||||
Foreign currency, at value (cost $20) | 20 | |||||
Cash | 113 | |||||
Receivables: | ||||||
Investments sold | 11,208,831 | |||||
Fund shares sold | 1,244,804 | |||||
Dividends | 387,787 | |||||
Foreign tax reclaims | 184,678 | |||||
Interest | 10 | |||||
Prepaid expenses | + | 12,075 | ||||
Total assets | 522,694,756 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 11,274,615 | |||||
Investment adviser and administrator fees | 21,673 | |||||
Shareholder service fees | 15,822 | |||||
Fund shares redeemed | 400,962 | |||||
Due to brokers for futures | 4,000 | |||||
Accrued expenses | + | 61,956 | ||||
Total liabilities | 11,779,028 | |||||
Net Assets | ||||||
Total assets | 522,694,756 | |||||
Total liabilities | − | 11,779,028 | ||||
Net assets | $510,915,728 | |||||
Net Assets by Source | ||||||
Capital received from investors | 371,224,308 | |||||
Net investment income not yet distributed | 6,599,289 | |||||
Net realized capital gains | 54,534,292 | |||||
Net unrealized capital gains | 78,557,839 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$510,915,728 | 24,810,387 | $20.59 |
See financial notes 75
Table of Contents
Schwab Health Care Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $316,372) | $10,270,323 | |||||
Interest | 5,572 | |||||
Securities on loan | + | 11,995 | ||||
Total investment income | 10,287,890 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,458,891 | |||||
Shareholder service fees | 1,101,144 | |||||
Transfer agent fees | 95,691 | |||||
Portfolio accounting fees | 54,314 | |||||
Shareholder reports | 40,350 | |||||
Registration fees | 35,158 | |||||
Professional fees | 31,491 | |||||
Custodian fees | 26,902 | |||||
Trustees’ fees | 8,654 | |||||
State filing fee reimbursement (Note 4) | (9,270 | ) | ||||
Other expenses | + | 12,698 | ||||
Total expenses | 3,856,023 | |||||
Expense reduction by CSIM and its affiliates1 | − | 118,610 | ||||
Net expenses | − | 3,737,413 | ||||
Net investment income | 6,550,477 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 67,201,641 | |||||
Net realized gains on futures contracts | 2,759,750 | |||||
Net realized gains on foreign currency transactions | + | 2,294 | ||||
Net realized gains | 69,963,685 | |||||
Net unrealized gains on investments | 7,406,220 | |||||
Net unrealized losses on futures contracts | (1,036,424 | ) | ||||
Net unrealized losses on foreign currency translations | + | (17,519 | ) | |||
Net unrealized gains | + | 6,352,277 | ||||
Net realized and unrealized gains | 76,315,962 | |||||
Increase in net assets resulting from operations | $82,866,439 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $9,270. See financial note 4 for additional information. |
76 See financial notes
Table of Contents
Schwab Health Care Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $6,550,477 | $3,549,515 | ||||||||
Net realized gains | 69,963,685 | 29,312,204 | ||||||||
Net unrealized gains | + | 6,352,277 | 17,540,015 | |||||||
Increase in net assets from operations | 82,866,439 | 50,401,734 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($3,529,101 | ) | ($4,837,988 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 4,855,710 | $92,832,540 | 3,540,237 | $60,660,382 | ||||||||||||||
Shares reinvested | 178,373 | 3,114,387 | 268,207 | 4,275,226 | ||||||||||||||
Shares redeemed | + | (4,151,453 | ) | (78,160,304 | ) | (6,338,786 | ) | (106,395,149 | ) | |||||||||
Net transactions in fund shares | 882,630 | $17,786,623 | (2,530,342 | ) | ($41,459,541 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 882,630 | 97,123,961 | (2,530,342 | ) | 4,104,205 | ||||||||||||
End of period | 24,810,387 | $510,915,728 | 23,927,757 | $413,791,767 | ||||||||||||||
Net investment income not yet distributed | $6,599,289 | $3,510,614 |
See financial notes 77
Table of Contents
Schwab® International Core Equity Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 5/30/082– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
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) | 0.16 | 0.17 | 0.16 | 0.03 | 0.06 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.62 | (0.46 | ) | 0.57 | 1.46 | (4.21 | ) | |||||||||||||||
Total from investment operations | 0.78 | (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 | 7.90 | 7.32 | 7.80 | 7.25 | 5.85 | |||||||||||||||||
Total return (%) | 11.17 | (3.89 | ) | 10.09 | 25.98 | (41.50 | )3 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.86 | 0.80 | 4 | 0.87 | 5 | 0.86 | 0.86 | 6 | ||||||||||||||
Gross operating expenses | 1.16 | 1.22 | 1.27 | 1.60 | 1.39 | 6 | ||||||||||||||||
Net investment income (loss) | 2.45 | 2.32 | 1.85 | 1.19 | 1.67 | 6 | ||||||||||||||||
Portfolio turnover rate | 112 | 86 | 91 | 7 | 94 | 56 | 3 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 78 | 60 | 53 | 37 | 3 |
1 Effective October 7, 2009, the Investor Shares class, the Select Shares class and the Institutional Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Not annualized.
4 The ratio of net operating expenses would have been 0.86%, if a voluntary reduction of Investment Adviser fees had not been included. (See financial note 4)
5 The ratio of net operating expenses would have been 0.86%, if certain non-routine expenses had not been incurred.
6 Annualized
7 Portfolio turnover excludes the impact of investment activity resulting from a merger with another fund.
78 See financial notes
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings as of October 31, 2012
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% | Common Stock | 69,994,392 | 76,187,170 | ||||||||
2 | .1% | Other Investment Companies | 1,604,027 | 1,669,684 | ||||||||
99 | .7% | Total Investments | 71,598,419 | 77,856,854 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 261,130 | |||||||||
100 | .0% | Net Assets | 78,117,984 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.6% of net assets | ||||||||
Australia 8.0% | ||||||||
Automobiles & Components 0.2% | ||||||||
Fleetwood Corp. Ltd. | 13,818 | 147,623 | ||||||
Banks 0.5% | ||||||||
Westpac Banking Corp. | 15,602 | 412,484 | ||||||
Capital Goods 0.2% | ||||||||
Emeco Holdings Ltd. | 198,530 | 142,973 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Skilled Group Ltd. | 40,827 | 112,562 | ||||||
Diversified Financials 2.0% | ||||||||
Macquarie Group Ltd. | 31,942 | 1,055,094 | ||||||
Perpetual Ltd. | 17,445 | 504,741 | ||||||
1,559,835 | ||||||||
Food & Staples Retailing 1.0% | ||||||||
Wesfarmers Ltd. | 21,409 | 771,780 | ||||||
Food, Beverage & Tobacco 0.4% | ||||||||
GrainCorp Ltd., Class A | 24,445 | 310,430 | ||||||
Health Care Equipment & Services 0.4% | ||||||||
Sigma Pharmaceuticals Ltd. | 397,524 | 278,117 | ||||||
Insurance 0.4% | ||||||||
Challenger Ltd. | 99,231 | 332,224 | ||||||
Materials 1.2% | ||||||||
Arrium Ltd. | 58,460 | 47,483 | ||||||
Iluka Resources Ltd. | 9,636 | 98,839 | ||||||
Incitec Pivot Ltd. | 33,775 | 110,623 | ||||||
OZ Minerals Ltd. | 16,483 | 139,858 | ||||||
Rio Tinto Ltd. | 6,581 | 387,987 | ||||||
St. Barbara Ltd. * | 95,287 | 188,205 | ||||||
972,995 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
CSL Ltd. | 8,716 | 429,879 | ||||||
Retailing 1.0% | ||||||||
David Jones Ltd. | 84,879 | 234,919 | ||||||
Myer Holdings Ltd | 43,891 | 88,962 | ||||||
Pacific Brands Ltd. | 486,864 | 313,143 | ||||||
Wotif.com Holdings Ltd. | 36,359 | 175,081 | ||||||
812,105 | ||||||||
6,283,007 | ||||||||
Austria 1.5% | ||||||||
Banks 0.3% | ||||||||
Raiffeisen Bank International AG | 5,291 | 211,935 | ||||||
Energy 0.2% | ||||||||
OMV AG | 5,085 | 186,087 | ||||||
Real Estate 0.2% | ||||||||
Conwert Immobilien Invest SE | 17,060 | 197,624 | ||||||
Transportation 0.8% | ||||||||
Oesterreichische Post AG | 15,840 | 610,181 | ||||||
1,205,827 | ||||||||
Belgium 1.8% | ||||||||
Food, Beverage & Tobacco 1.7% | ||||||||
Anheuser-Busch InBev N.V. | 15,813 | 1,322,458 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Barco N.V. | 921 | 63,357 | ||||||
1,385,815 | ||||||||
Canada 0.6% | ||||||||
Energy 0.6% | ||||||||
Canadian Natural Resources Ltd. | 5,300 | 159,730 | ||||||
Suncor Energy, Inc. | 8,000 | 268,495 | ||||||
428,225 | ||||||||
Denmark 1.2% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.2% | ||||||||
Novo Nordisk A/S, Class B | 5,881 | 942,815 | ||||||
Finland 1.2% | ||||||||
Capital Goods 0.7% | ||||||||
Metso Oyj | 15,978 | 561,922 | ||||||
Software & Services 0.2% | ||||||||
Tieto Oyj | 7,189 | 137,982 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Nokia Oyj | 83,716 | 225,069 | ||||||
924,973 | ||||||||
France 9.3% | ||||||||
Automobiles & Components 1.2% | ||||||||
Compagnie Generale des Etablissements Michelin | 2,239 | 193,013 | ||||||
Plastic Omnium S.A. | 2,952 | 81,617 | ||||||
Renault S.A. | 15,283 | 685,274 | ||||||
959,904 |
See financial notes 79
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Banks 0.6% | ||||||||
BNP Paribas S.A. | 9,331 | 470,702 | ||||||
Capital Goods 1.3% | ||||||||
Bouygues S.A. | 14,773 | 355,063 | ||||||
Legrand S.A. | 4,200 | 162,031 | ||||||
Schneider Electric S.A. | 5,923 | 370,866 | ||||||
Vinci S.A. | 3,674 | 162,854 | ||||||
1,050,814 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Teleperformance | 3,410 | 103,258 | ||||||
Energy 1.7% | ||||||||
Total S.A. | 26,338 | 1,326,651 | ||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Danone S.A. | 4,834 | 297,326 | ||||||
Insurance 0.3% | ||||||||
AXA S.A. | 12,260 | 195,408 | ||||||
Materials 0.2% | ||||||||
Lafarge S.A. | 2,229 | 130,685 | ||||||
Media 0.2% | ||||||||
Lagardere S.C.A. | 4,686 | 128,296 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||
Sanofi | 14,966 | 1,314,425 | ||||||
Real Estate 0.5% | ||||||||
Unibail-Rodamco SE | 1,878 | 422,992 | ||||||
Software & Services 0.4% | ||||||||
UbiSoft Entertainment S.A. * | 35,156 | 327,106 | ||||||
Telecommunication Services 0.1% | ||||||||
Vivendi S.A. | 3,878 | 79,466 | ||||||
Utilities 0.6% | ||||||||
GDF Suez | 18,716 | 429,576 | ||||||
7,236,609 | ||||||||
Germany 7.4% | ||||||||
Automobiles & Components 0.3% | ||||||||
Continental AG | 2,039 | 205,225 | ||||||
Capital Goods 0.5% | ||||||||
Pfeiffer Vacuum Technology AG | 3,067 | 313,558 | ||||||
Rheinmetall AG | 1,715 | 81,967 | ||||||
395,525 | ||||||||
Commercial & Professional Supplies 0.6% | ||||||||
Bilfinger SE | 4,772 | 467,620 | ||||||
Health Care Equipment & Services 0.8% | ||||||||
Fresenius SE & Co KGaA | 5,322 | 606,847 | ||||||
Materials 0.7% | ||||||||
BASF SE | 6,876 | 570,367 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.2% | ||||||||
Bayer AG - Reg’d | 12,347 | 1,076,573 | ||||||
Merck KGaA | 4,926 | 630,054 | ||||||
1,706,627 | ||||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||
Infineon Technologies AG | 36,553 | 249,016 | ||||||
SMA Solar Technology AG | 3,114 | 66,889 | ||||||
315,905 | ||||||||
Software & Services 0.6% | ||||||||
SAP AG | 6,847 | 499,304 | ||||||
Transportation 0.5% | ||||||||
Deutsche Lufthansa AG - Reg’d | 9,630 | 147,330 | ||||||
Deutsche Post AG - Reg’d | 12,892 | 255,596 | ||||||
402,926 | ||||||||
Utilities 0.8% | ||||||||
E.ON AG | 18,150 | 413,186 | ||||||
RWE AG | 4,038 | 184,798 | ||||||
597,984 | ||||||||
5,768,330 | ||||||||
Hong Kong 2.8% | ||||||||
Capital Goods 0.2% | ||||||||
Hutchison Whampoa Ltd. | 16,000 | 156,744 | ||||||
Energy 0.5% | ||||||||
CNOOC Ltd. | 200,000 | 411,595 | ||||||
Materials 0.4% | ||||||||
Shougang Fushan Resources Group Ltd. | 802,000 | 279,047 | ||||||
Real Estate 1.6% | ||||||||
Cheung Kong (Holdings) Ltd. | 41,000 | 604,322 | ||||||
Sino Land Co., Ltd. | 102,000 | 181,973 | ||||||
Sun Hung Kai Properties Ltd. | 30,000 | 414,718 | ||||||
1,201,013 | ||||||||
Utilities 0.1% | ||||||||
Power Assets Holdings Ltd. | 12,500 | 106,219 | ||||||
2,154,618 | ||||||||
Israel 0.9% | ||||||||
Materials 0.2% | ||||||||
Israel Chemicals Ltd. | 13,695 | 171,333 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Teva Pharmaceutical Industries Ltd. | 12,097 | 488,010 | ||||||
659,343 | ||||||||
Italy 1.9% | ||||||||
Capital Goods 0.1% | ||||||||
Finmeccanica S.p.A. * | 19,108 | 94,765 | ||||||
Energy 1.0% | ||||||||
Eni S.p.A. | 34,705 | 798,594 | ||||||
Telecommunication Services 0.3% | ||||||||
Telecom Italia S.p.A. | 231,155 | 213,267 | ||||||
Utilities 0.5% | ||||||||
Enel S.p.A. | 102,622 | 386,448 | ||||||
1,493,074 | ||||||||
Japan 18.8% | ||||||||
Automobiles & Components 2.0% | ||||||||
Aisin Seiki Co., Ltd. | 6,800 | 198,589 | ||||||
Daihatsu Motor Co., Ltd. | 8,000 | 140,010 | ||||||
Denso Corp. | 7,600 | 238,618 | ||||||
Honda Motor Co., Ltd. | 4,700 | 141,297 |
80 See financial notes
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Toyota Motor Corp. | 21,200 | 817,412 | ||||||
1,535,926 | ||||||||
Banks 5.9% | ||||||||
Aozora Bank Ltd. | 52,000 | 146,641 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 279,400 | 1,263,997 | ||||||
Mizuho Financial Group, Inc. | 280,400 | 438,736 | ||||||
Resona Holdings, Inc. | 166,000 | 718,314 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 37,700 | 1,151,998 | ||||||
The Shizuoka Bank Ltd. | 89,000 | 910,290 | ||||||
4,629,976 | ||||||||
Capital Goods 3.2% | ||||||||
Asahi Glass Co., Ltd. | 20,000 | 135,957 | ||||||
COMSYS Holdings Corp. | 9,000 | 119,642 | ||||||
Kajima Corp. | 27,000 | 74,776 | ||||||
Mitsubishi Heavy Industries Ltd. | 143,000 | 602,327 | ||||||
Mitsui & Co., Ltd. | 30,500 | 429,904 | ||||||
Sumitomo Corp. | 61,000 | 831,600 | ||||||
Taisei Corp. | 95,000 | 261,932 | ||||||
2,456,138 | ||||||||
Consumer Durables & Apparel 0.7% | ||||||||
Namco Bandai Holdings, Inc. | 28,600 | 449,393 | ||||||
Panasonic Corp. | 19,800 | 120,098 | ||||||
569,491 | ||||||||
Diversified Financials 1.3% | ||||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 11,150 | 480,751 | ||||||
ORIX Corp. | 5,150 | 528,956 | ||||||
1,009,707 | ||||||||
Energy 0.2% | ||||||||
Inpex Corp. | 32 | 182,300 | ||||||
Food, Beverage & Tobacco 2.3% | ||||||||
Ajinomoto Co., Inc. | 63,000 | 961,879 | ||||||
Japan Tobacco, Inc. | 31,000 | 857,219 | ||||||
1,819,098 | ||||||||
Household & Personal Products 0.4% | ||||||||
Kao Corp. | 10,900 | 306,198 | ||||||
Materials 0.3% | ||||||||
Nitto Denko Corp. | 5,000 | 227,140 | ||||||
Media 0.2% | ||||||||
SKY Perfect JSAT Holdings, Inc. | 310 | 141,648 | ||||||
Real Estate 0.6% | ||||||||
Nomura Real Estate Holdings, Inc. | 24,600 | 441,565 | ||||||
Software & Services 0.8% | ||||||||
NEC Networks & System Integration Corp. | 8,700 | 158,935 | ||||||
Nihon Unisys Ltd. | 66,000 | 479,888 | ||||||
638,823 | ||||||||
Technology Hardware & Equipment 0.6% | ||||||||
Canon, Inc. | 14,300 | 464,745 | ||||||
Transportation 0.3% | ||||||||
Central Japan Railway Co. | 3,100 | 266,767 | ||||||
14,689,522 | ||||||||
Mexico 0.3% | ||||||||
Materials 0.3% | ||||||||
Grupo Mexico S.A.B. de C.V., Series B | 82,000 | 262,771 | ||||||
Netherlands 4.0% | ||||||||
Capital Goods 1.7% | ||||||||
European Aeronautic Defence & Space Co., N.V. | 3,936 | 140,082 | ||||||
Koninklijke Philips Electronics N.V. | 48,271 | 1,208,998 | ||||||
1,349,080 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
TomTom N.V. * | 38,626 | 192,886 | ||||||
Diversified Financials 0.4% | ||||||||
ING Groep N.V. CVA * | 36,342 | 323,376 | ||||||
Food & Staples Retailing 0.8% | ||||||||
Koninklijke Ahold N.V. | 50,472 | 642,738 | ||||||
Materials 0.2% | ||||||||
Koninklijke DSM N.V. | 3,111 | 159,980 | ||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
ASML Holding N.V. | 4,534 | 249,244 | ||||||
STMicroelectronics N.V. | 20,080 | 118,266 | ||||||
367,510 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Gemalto N.V. | 970 | 87,611 | ||||||
3,123,181 | ||||||||
Netherlands Antilles 0.2% | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Orthofix International N.V. * | 4,400 | 174,504 | ||||||
New Zealand 0.1% | ||||||||
Materials 0.1% | ||||||||
Fletcher Building Ltd. | 13,997 | 80,958 | ||||||
Norway 0.6% | ||||||||
Energy 0.6% | ||||||||
Statoil A.S.A. | 19,372 | 477,112 | ||||||
Republic of Korea 0.2% | ||||||||
Banks 0.1% | ||||||||
Woori Finance Holdings Co., Ltd. | 9,460 | 89,304 | ||||||
Capital Goods 0.1% | ||||||||
Daelim Industrial Co., Ltd. | 955 | 66,372 | ||||||
155,676 | ||||||||
Singapore 1.1% | ||||||||
Capital Goods 0.3% | ||||||||
Noble Group Ltd. | 181,000 | 193,258 | ||||||
Real Estate 0.8% | ||||||||
UOL Group Ltd. | 137,000 | 633,902 | ||||||
827,160 |
See financial notes 81
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
South Africa 0.3% | ||||||||
Materials 0.3% | ||||||||
Kumba Iron Ore Ltd. | 3,666 | 229,288 | ||||||
Spain 2.7% | ||||||||
Capital Goods 0.7% | ||||||||
Ferrovial S.A. | 37,157 | 525,782 | ||||||
Energy 0.3% | ||||||||
Repsol S.A. | 12,887 | 258,265 | ||||||
Retailing 0.6% | ||||||||
Inditex S.A. | 3,998 | 510,513 | ||||||
Software & Services 0.4% | ||||||||
Amadeus IT Holding S.A., A Shares | 13,096 | 324,418 | ||||||
Transportation 0.3% | ||||||||
Abertis Infraestructuras S.A. | 15,555 | 234,940 | ||||||
Utilities 0.4% | ||||||||
Endesa S.A. | 13,489 | 287,361 | ||||||
2,141,279 | ||||||||
Sweden 3.6% | ||||||||
Banks 1.2% | ||||||||
Nordea Bank AB | 101,441 | 922,063 | ||||||
Capital Goods 0.7% | ||||||||
Scania AB, B Shares | 12,185 | 232,498 | ||||||
Trelleborg AB, B Shares | 25,989 | 283,196 | ||||||
515,694 | ||||||||
Materials 0.6% | ||||||||
Boliden AB | 28,492 | 499,285 | ||||||
Retailing 1.1% | ||||||||
Hennes & Mauritz AB, B Shares | 26,602 | 901,980 | ||||||
2,839,022 | ||||||||
Switzerland 7.8% | ||||||||
Capital Goods 0.7% | ||||||||
Geberit AG - Reg’d * | 2,271 | 469,064 | ||||||
OC Oerlikon Corp. AG - Reg’d * | 7,477 | 75,306 | ||||||
544,370 | ||||||||
Food, Beverage & Tobacco 2.4% | ||||||||
Nestle S.A. - Reg’d | 29,323 | 1,861,664 | ||||||
Insurance 2.1% | ||||||||
Helvetia Holding AG - Reg’d | 2,882 | 1,012,001 | ||||||
Swiss Re AG * | 7,084 | 490,194 | ||||||
Zurich Insurance Group AG * | 627 | 154,568 | ||||||
1,656,763 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.6% | ||||||||
Novartis AG - Reg’d | 13,115 | 790,841 | ||||||
Roche Holding AG | 6,242 | 1,202,366 | ||||||
1,993,207 | ||||||||
6,056,004 | ||||||||
Turkey 0.3% | ||||||||
Banks 0.3% | ||||||||
Turkiye Vakiflar Bankasi T.A.O., Class D | 95,161 | 224,152 | ||||||
United Kingdom 21.0% | ||||||||
Banks 2.3% | ||||||||
HSBC Holdings plc | 152,362 | 1,502,180 | ||||||
Standard Chartered plc | 13,903 | 329,175 | ||||||
1,831,355 | ||||||||
Capital Goods 1.3% | ||||||||
BAE Systems plc | 32,862 | 165,863 | ||||||
Bodycote plc | 55,138 | 336,656 | ||||||
Cobham plc | 62,420 | 217,009 | ||||||
Wolseley plc | 6,496 | 284,767 | ||||||
1,004,295 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Berendsen plc | 60,597 | 551,018 | ||||||
Consumer Durables & Apparel 0.7% | ||||||||
Persimmon plc | 39,340 | 506,181 | ||||||
Consumer Services 0.8% | ||||||||
William Hill plc | 119,332 | 652,024 | ||||||
Diversified Financials 1.4% | ||||||||
Aberdeen Asset Management plc | 83,310 | 436,950 | ||||||
Intermediate Capital Group plc | 121,442 | 599,415 | ||||||
Man Group plc | 42,945 | 54,573 | ||||||
1,090,938 | ||||||||
Energy 4.0% | ||||||||
BP plc | 195,147 | 1,393,661 | ||||||
Enquest plc * | 91,661 | 171,828 | ||||||
Ensco plc, Class A | 7,025 | 406,185 | ||||||
John Wood Group plc | 22,873 | 314,382 | ||||||
Royal Dutch Shell plc, B Shares | 17,266 | 610,740 | ||||||
Soco International plc * | 23,416 | 127,944 | ||||||
Tullow Oil plc | 5,899 | 134,018 | ||||||
3,158,758 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Unilever plc | 2,657 | 99,115 | ||||||
Household & Personal Products 0.5% | ||||||||
Reckitt Benckiser Group plc | 6,937 | 420,272 | ||||||
Materials 2.8% | ||||||||
Mondi plc | 83,126 | 916,332 | ||||||
Rio Tinto plc | 24,992 | 1,248,511 | ||||||
2,164,843 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.7% | ||||||||
AstraZeneca plc | 16,856 | 781,693 | ||||||
GlaxoSmithKline plc | 58,133 | 1,302,611 | ||||||
2,084,304 | ||||||||
Retailing 0.8% | ||||||||
Debenhams plc | 52,266 | 101,187 | ||||||
WH Smith plc | 53,021 | 532,065 | ||||||
633,252 | ||||||||
Software & Services 0.6% | ||||||||
Micro Focus International plc | 31,162 | 288,649 |
82 See financial notes
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Sage Group plc | 30,976 | 155,578 | ||||||
444,227 | ||||||||
Telecommunication Services 1.8% | ||||||||
BT Group plc | 71,875 | 247,005 | ||||||
Vodafone Group plc | 433,440 | 1,177,063 | ||||||
1,424,068 | ||||||||
Utilities 0.5% | ||||||||
National Grid plc | 31,501 | 359,255 | ||||||
16,423,905 | ||||||||
Total Common Stock | ||||||||
(Cost $69,994,392) | 76,187,170 | |||||||
Other Investment Companies 2.1% of net assets | ||||||||
United States 2.1% | ||||||||
iShares MSCI EAFE Index Fund | 13,144 | 704,124 | ||||||
State Street Institutional U.S. Government Money Market Fund | 965,560 | 965,560 | ||||||
Total Other Investment Companies | ||||||||
(Cost $1,604,027) | 1,669,684 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $72,188,859 and the unrealized appreciation and depreciation were $7,511,567 and ($1,843,572), respectively, with a net unrealized appreciation of $5,667,995.
At 10/31/12, the values of certain foreign securities held by the fund aggregating $74,016,655 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. |
CVA — | Dutch Certificate | |
Reg’d — | Registered |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Common Stock1 | $— | $57,691,938 | $— | $57,691,938 | ||||||||||||
Austria1 | — | 595,646 | — | 595,646 | ||||||||||||
Transportation | 610,181 | — | — | 610,181 | ||||||||||||
Canada1 | 428,225 | — | — | 428,225 | ||||||||||||
Mexico1 | 262,771 | — | — | 262,771 | ||||||||||||
Netherlands Antilles1 | 174,504 | — | — | 174,504 | ||||||||||||
United Kingdom1 | — | 12,820,920 | — | 12,820,920 | ||||||||||||
Energy | 406,185 | 2,752,573 | — | 3,158,758 | ||||||||||||
Software & Services | 288,649 | 155,578 | — | 444,227 | ||||||||||||
Other Investment Companies1 | 1,669,684 | — | — | 1,669,684 | ||||||||||||
Total | $3,840,199 | $74,016,655 | $— | $77,856,854 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $477,728 from Level 2 to Level 1 for the period ended October 31, 2012. The transfers between Level 2 and Level 1 were primarily due to the use of international fair valuation by the fund. There were no transfers in or out of Level 3 securities during the period.
See financial notes 83
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Schwab International Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $71,598,419) | $77,856,854 | |||||
Foreign currency, at value (cost $780) | 784 | |||||
Receivables: | ||||||
Dividends | 204,255 | |||||
Fund shares sold | 149,350 | |||||
Foreign tax reclaims | 62,898 | |||||
Interest | 65 | |||||
Prepaid expenses | + | 183 | ||||
Total assets | 78,274,389 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 1,640 | |||||
Shareholder service fees | 3,002 | |||||
Fund shares redeemed | 108,640 | |||||
Distribution and shareholder services fees | 695 | |||||
Accrued expenses | + | 42,428 | ||||
Total liabilities | 156,405 | |||||
Net Assets | ||||||
Total assets | 78,274,389 | |||||
Total liabilities | − | 156,405 | ||||
Net assets | $78,117,984 | |||||
Net Assets by Source | ||||||
Capital received from investors | 88,936,486 | |||||
Net investment income not yet distributed | 1,463,091 | |||||
Net realized capital losses | (18,535,601 | ) | ||||
Net unrealized capital gains | 6,254,008 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$78,117,984 | 9,891,978 | $7.90 |
84 See financial notes
Table of Contents
Schwab International Core Equity Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $148,675) | $2,120,360 | |||||
Interest | + | 49 | ||||
Total investment income | 2,120,409 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 371,481 | |||||
Shareholder service fees | 159,435 | |||||
Portfolio accounting fees | 66,579 | |||||
Custodian fees | 41,411 | |||||
Professional fees | 33,808 | |||||
Registration fees | 25,886 | |||||
Transfer agent fees | 18,218 | |||||
Shareholder reports | 13,717 | |||||
Trustees’ fees | 6,116 | |||||
Interest expense | 30 | |||||
State filing fee reimbursement (Note 4) | (11 | ) | ||||
Other expenses | + | 8,580 | ||||
Total expenses | 745,250 | |||||
Expense reduction by CSIM and its affiliates1 | − | 194,403 | ||||
Custody credits | − | 1 | ||||
Net expenses | − | 550,846 | ||||
Net investment income | 1,569,563 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on investments | (587,311 | ) | ||||
Net realized losses on foreign currency transactions | + | (22,218 | ) | |||
Net realized losses | (609,529 | ) | ||||
Net unrealized gains on investments | 6,167,081 | |||||
Net unrealized losses on foreign currency translations | + | (2,885 | ) | |||
Net unrealized gains | + | 6,164,196 | ||||
Net realized and unrealized gains | 5,554,667 | |||||
Increase in net assets resulting from operations | $7,124,230 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $11. See financial note 4 for additional information. |
See financial notes 85
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Schwab International Core Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $1,569,563 | $1,403,431 | ||||||||
Net realized gains (losses) | (609,529 | ) | 2,297,715 | |||||||
Net unrealized gains (losses) | + | 6,164,196 | (6,610,970 | ) | ||||||
Increase (Decrease) in net assets from operations | 7,124,230 | (2,909,824 | ) | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,709,354 | ) | ($1,304,611 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,640,288 | $26,971,761 | 3,331,795 | $26,421,070 | ||||||||||||||
Shares reinvested | 151,161 | 1,017,316 | 125,830 | 983,995 | ||||||||||||||
Shares redeemed | + | (2,074,860 | ) | (15,099,441 | ) | (2,027,829 | ) | (15,977,680 | ) | |||||||||
Net transactions in fund shares | 1,716,589 | $12,889,636 | 1,429,796 | $11,427,385 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 1,716,589 | 18,304,512 | 1,429,796 | 7,212,950 | |||||||||||||
End of period | 9,891,978 | $78,117,984 | 8,175,389 | $59,813,472 | ||||||||||||||
Net investment income not yet distributed | $1,463,091 | $1,302,126 |
86 See financial notes
Table of Contents
Schwab Active Equity Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”) a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) | 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 Fundamental US Large Company Index Fund | |||
Schwab International Core Equity Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab S&P 500 Index Fund | (formerly Schwab Fundamental US Small-Mid Company Index Fund) | |||
Schwab Small-Cap Index Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Total Stock Market Index Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab International Index Fund | (formerly Schwab Fundamental International Small-Mid Company Index Fund) | |||
Schwab MarketTrack All Equity Portfolio | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab MarketTrack Growth Portfolio | (formerly 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 | ||||
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 funds’ Board of Trustees (the “Board”) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
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:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported at halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below. | |
• | Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value |
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Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the procedures. |
• | International fair valuation: The Board 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 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 forward 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. 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 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. |
88
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Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 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 (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 forwards is accounted for as unrealized gains or losses until the contracts settle, at which time the gains or losses are realized.
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to have a value of at least 102% of the prior day’s market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities and is marked to market daily. The cash collateral of securities loaned is invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Securities lending income, as disclosed in a fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent which are subject to adjustments pursuant to the securities lending agreement.
If applicable, the value of the securities on loan as of October 31, 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, currency gains or losses realized between the
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Table of Contents
Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
If the fund sells securities short, it records the proceeds received as an asset and the obligation to buy back the securities as a liability. At the time a short sale is initiated, the asset and liability are of equal value and effectively cancel each other out. Subsequently, the fund values the liability side of the transaction according to the market price of the securities sold short, and values the asset side according to the value of the proceeds. When the fund closes out a short position (buys the security), it records the outcome as a realized gain or loss. Dividends accrued on securities sold short are recorded as an expense on the fund’s records and presented in the Statement of Operations. The fund may also incur stock loan fees which represent the cost of borrowing securities used for short sale transactions.
Gains realized by the funds on the sale of securities in certain foreign countries are subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures 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 GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
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Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(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 and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2012, if any, are reflected in the funds’ Statements 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 December 2011, Accounting Standards Update (“ASU”) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities,” was issued and is effective for interim and annual periods beginning after January 1, 2013. The ASU enhances disclosure requirements with respect to an entity’s rights of offset and related arrangements associated with its financial and derivative instruments. Management is currently evaluating the impact the adoption of ASU 2011-11 may have on the funds’ financial statement disclosures.
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 the investment in a fund will fluctuate, which means that investors 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 each 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, a fund may have a lower return than if it were managed using another process or strategy.
Historically, small-cap stocks have been riskier than large- and mid-cap stocks, and their prices may move sharply, especially during market upturns and downturns. Small-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments — large-cap and mid-cap stocks, for instance — a fund’s small-cap holdings could reduce performance.
Both large- and mid-cap stocks tend to go in and out of favor based on market and economic conditions. However, stocks of mid-cap companies tend to be more vulnerable to adverse business or economic events than larger, more established companies. During a period when large- and mid-cap U.S. stocks fall behind other types of investments — small-cap stocks, for instance — a fund’s large- and mid-cap holdings could reduce performance.
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Schwab Active Equity Funds
Financial Notes (continued)
3. Risk Factors (continued):
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.
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.
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 exchange-traded fund (“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 real estate investment trusts (“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. A 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 a 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.
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
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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. 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.
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 | International | |||||||||||||||||||||||
% of Average | Core | Dividend | Large-Cap | Small-Cap | Hedged | Core | ||||||||||||||||||||||
Daily Net Assets | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | Equity Fund | ||||||||||||||||||||||
Flat rate | 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 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%. 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% of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service
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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 its affiliates 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 Board, 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 | ||||||||||||||
Core | Dividend | Large-Cap | Small-Cap | Hedged | ||||||||||||||
Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||
0.75% | 0.89% | 0.99% | 1.12% | 1.33% | * |
Schwab | ||||||||||
Schwab | Schwab | International | ||||||||
Financial | Health Care | Core | ||||||||
Services Fund | Fund | Equity Fund | ||||||||
0.94% | 0.82% | 0.86% |
* | Excludes dividends and stock loan fees paid on securities sold short. |
Certain Schwab Funds may own shares of other Schwab Funds. The table below reflects the percentages of each fund shares in this report owned by other Schwab Funds as of October 31, 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% | 0.2% | 0.8% | |||||||||
Schwab Target 2020 Fund | 1.5% | 0.9% | 4.5% | |||||||||
Schwab Target 2025 Fund | 0.8% | 0.5% | 2.4% | |||||||||
Schwab Target 2030 Fund | 2.8% | 1.7% | 8.2% | |||||||||
Schwab Target 2035 Fund | 0.7% | 0.4% | 2.2% | |||||||||
Schwab Target 2040 Fund | 3.0% | 1.9% | 9.2% | |||||||||
Schwab Monthly Income Funds: | ||||||||||||
Schwab Monthly Income Fund - Moderate Payout | —% | 0.4% | —% | |||||||||
Schwab Monthly Income Fund - Enhanced Payout | —% | 0.7% | —% | |||||||||
Schwab Monthly Income Fund - Maximum Payout | —% | 0.3% | —% | |||||||||
Schwab Balanced Fund | 2.2% | —% | —% |
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 October 31, 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 by the Board. The funds had no interfund borrowing or lending activity during the period.
During the period, the Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund, Schwab Health Care Fund and Schwab International Core Equity Fund received a payment of $32,770, $13,172, $6,516, $2,710, $4,976, $1,664, $9,270 and $11, respectively, related to state filing fees resulting from revised fee calculation methodologies being applied on sales of the funds’
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shares in prior periods in certain states. These payments are presented in each fund’s Statement of Operations as “State filing fee reimbursement”.
All or a portion of the state filing fees were previously borne by CSIM through a waiver of CSIM’s management fee. As this expense was previously waived, the payments received during the period had the effect of decreasing the total “Expense reduction by CSIM and its affiliates” in each fund’s Statement of Operations. The current net operating expense ratio was not impacted by this payment.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. provides transfer agent services for each fund.
6. Board of Trustees:
Trustees may include people who are officers and/or directors of the investment adviser or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2012, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab Core Equity Fund | $761,961,218 | $1,003,484,704 | ||||||
Schwab Dividend Equity Fund | 752,904,698 | 810,263,993 | ||||||
Schwab Large-Cap Growth Fund | 171,911,919 | 192,223,592 | ||||||
Schwab Small-Cap Equity Fund | 479,469,108 | 368,633,755 | ||||||
Schwab Hedged Equity Fund* | 225,484,752 | 279,792,813 | ||||||
Schwab Financial Services Fund | 35,841,229 | 36,162,587 | ||||||
Schwab Health Care Fund | 285,495,944 | 262,785,879 | ||||||
Schwab International Core Equity Fund | 83,118,320 | 70,892,266 |
* | Including securities sold short. |
9. Derivatives:
Certain funds entered into equity index futures contracts (“futures”) during the report period. The funds invested in futures to equitize available cash. The fair value and due to brokers for futures contracts held at October 31, 2012 and the net realized/unrealized gains (losses) on futures contracts held during the period ended October 31, 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
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9. Derivatives (continued):
investing in futures contracts. During the period, the month-end average values of futures contracts held by the funds and the month-end average number of contracts held were as follows:
Contract Values | Number of Contracts | |||||||
Schwab Core Equity Fund | $11,775,454 | 173 | ||||||
Schwab Dividend Equity Fund | 20,378,323 | 304 | ||||||
Schwab Large-Cap Growth Fund | 1,357,896 | 20 | ||||||
Schwab Small-Cap Equity Fund | 3,954,540 | 51 | ||||||
Schwab Hedged Equity Fund | 2,935,242 | 44 | ||||||
Schwab Financial Services Fund | 439,950 | 6 | ||||||
Schwab Health Care Fund | 12,512,835 | 185 | ||||||
Schwab International Core Equity Fund | — | — |
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 | |||||||
(11/1/11-10/31/12) | (11/1/10-10/31/11) | |||||||
Schwab Core Equity Fund | $14,523 | $22,228 | ||||||
Schwab Dividend Equity Fund | 19,131 | 26,900 | ||||||
Schwab Large-Cap Growth Fund | 6,173 | 24,056 | ||||||
Schwab Small-Cap Equity Fund | 4,731 | 8,490 | ||||||
Schwab Hedged Equity Fund | 5,426 | 7,560 | ||||||
Schwab Financial Services Fund | 5,169 | 3,360 | ||||||
Schwab Health Care Fund | 11,650 | 17,659 | ||||||
Schwab International Core Equity Fund | 1,452 | 4,402 |
11. Federal Income Taxes:
As of October 31, 2012, the components of distributable earnings on a tax-basis were as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||
Core | Dividend | Large-Cap | Small-Cap | Hedged | ||||||||||||||||
Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||||
Undistributed ordinary income | $3,792,266 | $832,279 | $873,342 | $339,903 | $— | |||||||||||||||
Undistributed long-term capital gains | — | — | — | — | — | |||||||||||||||
Unrealized appreciation on investments | 291,663,236 | 240,407,636 | 30,205,312 | 53,341,509 | 28,707,035 | |||||||||||||||
Unrealized depreciation on investments | (42,582,519 | ) | (22,487,941 | ) | (4,301,439 | ) | (16,163,335 | ) | (5,489,688 | ) | ||||||||||
Other unrealized appreciation/(depreciation) | — | — | (3 | ) | — | 1,151,978 | ||||||||||||||
Net unrealized appreciation/(depreciation) | $249,080,717 | $217,919,695 | $25,903,870 | $37,178,174 | $24,369,325 | |||||||||||||||
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Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Undistributed ordinary income | $222,352 | $6,609,117 | $1,836,736 | |||||||||||||||||
Undistributed long-term capital gains | — | 54,298,242 | — | |||||||||||||||||
Unrealized appreciation on investments | 4,552,575 | 86,865,680 | 7,511,567 | |||||||||||||||||
Unrealized depreciation on investments | (412,569 | ) | (8,071,762 | ) | (1,843,572 | ) | ||||||||||||||
Other unrealized appreciation/(depreciation) | — | (9,857 | ) | (4,427 | ) | |||||||||||||||
Net unrealized appreciation/(depreciation) | $4,140,006 | $78,784,061 | $5,663,568 | |||||||||||||||||
The primary differences between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments are Passive Foreign Investment Companies (PFIC), Partnerships and the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2012, the following funds had capital loss carryforwards available to offset future net capital gains before the expiration dates:
Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||
Core | Dividend | Large-Cap | Small-Cap | Hedged | ||||||||||||||||
Expiration Date | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||
October 31, 2016 | $53,230,501 | $— | $— | $— | $— | |||||||||||||||
October 31, 2017 | 56,516,765 | 66,553,849 | 45,816,541 | 14,134,762 | 2,570,724 | |||||||||||||||
Total | $109,747,266 | * | $66,553,849 | $45,816,541 | $14,134,762 | $2,570,724 | ||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Expiration Date | Services Fund | Fund | Equity Fund | |||||||||||||||||
October 31, 2016 | $6,950,804 | $— | $— | |||||||||||||||||
October 31, 2017 | 28,673,848 | — | 17,505,510 | |||||||||||||||||
October 31, 2018 | 170,394 | — | — | |||||||||||||||||
No expiration | — | — | 813,296 | |||||||||||||||||
Total | $35,795,046 | $— | $18,318,806 | * | ||||||||||||||||
* | 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, 2012, the funds had capital losses deferred and capital losses utilized as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||
Core | Dividend | Large-Cap | Small-Cap | Hedged | ||||||||||||||||
Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||||
Capital losses deferred | $— | $— | $— | $— | $900,099 | |||||||||||||||
Capital losses utilized | 138,165,164 | 106,534,439 | 29,184,829 | 34,374,879 | 15,562,685 | |||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Capital losses utilized | $1,500,550 | $14,437,135 | $— |
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11. Federal Income Taxes (continued):
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||
Core | Dividend | Large-Cap | Small-Cap | Hedged | ||||||||||||||||
Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $32,156,180 | $28,261,739 | $1,032,046 | $177,045 | $— | |||||||||||||||
Long-term capital gains | — | — | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $18,535,012 | $23,212,957 | $1,241,602 | $— | $— | |||||||||||||||
Long-term capital gains | — | — | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $224,748 | $3,529,101 | $1,709,354 | |||||||||||||||||
Long-term capital gains | — | — | — | |||||||||||||||||
Return of capital | — | — | — | |||||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $200,494 | $4,837,988 | $1,304,611 | |||||||||||||||||
Long-term capital gains | — | — | — | |||||||||||||||||
Return of capital | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2012, the funds made the following reclassifications:
Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||
Core | Dividend | Large-Cap | Small-Cap | Hedged | ||||||||||||||||
Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||||
Capital shares | $41,423,309 | $— | $— | $— | ($90,124 | ) | ||||||||||||||
Undistributed net investment income | 12,172 | — | — | 267,081 | 93,113 | |||||||||||||||
Net realized capital gains/(losses) | (41,435,481 | ) | — | — | (267,081 | ) | (2,989 | ) | ||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Capital shares | $— | $— | $— | |||||||||||||||||
Undistributed net investment income | (2,916 | ) | 67,299 | 300,756 | ||||||||||||||||
Net realized capital gains/(losses) | 2,916 | (67,299 | ) | (300,756 | ) |
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11. Federal Income Taxes (continued):
As of October 31, 2012, 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, 2012, 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. However, such losses must be utilized prior to the pre-enactment capital losses, which increases the likelihood that the pre-enactment capital losses will expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital loss, 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.
The funds have adopted the noted provisions of the Act for the period ending October 31, 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.
13. Reorganization:
Under a plan of reorganization adopted by the Trust, all of the assets and liabilities of the Schwab Premier Equity Fund were transferred to the Schwab Core Equity Fund. The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed at the close of business on September 7, 2012. The following is a summary of shares outstanding, net assets, net asset value per share issued and unrealized appreciation/ depreciation immediately before and after the reorganization.
Before Reorganization | After Reorganization | |||||||||||
Schwab | Schwab | Schwab | ||||||||||
Core | Premier | Core | ||||||||||
Equity Fund | Equity Fund | Equity Fund | ||||||||||
Shares | 90,245,503 | 18,709,075 | 101,529,069 | |||||||||
Net Assets | $1,728,474,999 | $216,114,348 | $1,944,589,347 | |||||||||
Net Assets Value | $19.15 | $11.55 | $19.15 | |||||||||
Net unrealized appreciation/(depreciation) | $280,749,404 | $13,800,558 | $294,549,962 | |||||||||
Market value of investments | $1,724,850,404 | $215,621,273 | $1,940,471,677 | |||||||||
Cost of investments | $1,444,101,000 | $201,820,715 | $1,645,921,715 |
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13. Reorganization (continued):
Assuming the acquisition had been completed on November 1, 2011, the beginning of the fiscal year of Schwab Core Equity Fund, Schwab Core Equity Fund’s pro forma results of operations for the period ended October 31, 2012, would have been as follows:
Net investment income | $25,344,441 | |||
Net realized gains on investments and futures | $168,111,902 | |||
Net unrealized gains on investments and futures | $53,072,153 | |||
Net increase in net assets resulting from operations | $246,528,496 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Schwab Premier Equity Fund that have been included in Schwab Core Equity Fund’s Statement of Operation since September 7, 2012.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Core Equity Fund
Schwab Dividend Equity Fund
Schwab Large-Cap Growth Fund
Schwab Small-Cap Equity Fund
Schwab Hedged Equity Fund
Schwab Financial Services Fund
Schwab Health Care Fund
Schwab International Core Equity Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund, Schwab Health Care Fund, and Schwab International Core Equity Fund (eight of the portfolios constituting Schwab Capital Trust, hereafter referred to as the “Funds”) at October 31, 2012, and the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended and the financial highlights for each of the five years or periods in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 14, 2012
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Other Federal Tax Information (unaudited)
Schwab International Core Equity Fund elects to pass through under section 853 of the Internal Revenue Code foreign tax credit of $148,615 to its shareholders for the year ended October 31, 2012. The respective foreign source income on the fund is $2,237,890.
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2012, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Core Equity Fund | 100.00 | ||||
Schwab Dividend Equity Fund | 100.00 | ||||
Schwab Large-Cap Growth Fund | 100.00 | ||||
Schwab Small-Cap Equity Fund | 0.95 | ||||
Schwab Hedged Equity Fund | — | ||||
Schwab Financial Services Fund | 100.00 | ||||
Schwab Health Care Fund | 87.79 | ||||
Schwab International Core Equity Fund | — |
For the fiscal year ended October 31, 2012, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2013 via IRS form 1099 of the amounts for use in preparing their 2012 income tax return.
Schwab Core Equity Fund | $32,156,180 | |||
Schwab Dividend Equity Fund | 28,261,739 | |||
Schwab Large-Cap Growth Fund | 1,032,046 | |||
Schwab Small-Cap Equity Fund | 1,681 | |||
Schwab Hedged Equity Fund | — | |||
Schwab Financial Services Fund | 224,748 | |||
Schwab Health Care Fund | 3,529,101 | |||
Schwab International Core Equity Fund | 1,709,354 |
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Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund, Schwab Health Care Fund and Schwab International Core Equity Fund (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at meetings held on April 24, 2012, and June 5, 2012, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 5, 2012. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and
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shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Each of Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Hedged Equity Fund and Schwab Health Care Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Hedged Equity Fund and Schwab Health Care Fund. These factors varied from Fund to Fund, but included one or more of the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to Schwab Financial Services Fund and Schwab Health Care Fund that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers of 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 91 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-800-435-4000.
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. | 74 | 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). | 74 | 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). | 74 | 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. | 74 | 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). | 74 | 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). | 74 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 74 | 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. | 74 | 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. | 91 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President 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 and 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. In addition to their employment with Schwab, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation, the parent company of Schwab and the investment adviser. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays 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 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.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
• | WEBSITE USAGE. |
When you visit our websites, we may use devices known as “cookies,” graphic interchange format files (GIFs), or other similar web tools to enhance your web experience. These tools help us to recognize you, maintain your web session, and provide a more personalized experience. To learn more, please click the Privacy link on our website.
How We Share and Use Your Information
We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
• | when we use other companies to provide services for us, such as printing and mailing your account statements; |
• | when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control). |
State Laws
We will comply with state laws that apply to the disclosure or use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.
Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.
We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2012 Schwab Funds. All rights reserved.
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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 Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large Company* Index Fund
Schwab Fundamental US Small Company* Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small Company Index Fund
Schwab Fundamental Emerging Markets* Large Company Index Fund
Schwab Global Real Estate Fundtm
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab Intermediate-Term Bond Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fund
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, 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. |
Table of Contents
![(CHARLES SCHWAB LOGO)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschwab02.gif)
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.
MFR26298-09
Table of Contents
Table of Contents
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Table of Contents
Annual report dated October 31, 2012, enclosed.
Schwab Fundamental Index* Funds
Schwab Fundamental
US Large Company* Index Fund
Schwab Fundamental
US Small Company* Index Fund (formerly, Schwab Fundamental US Small-Mid Company Index Fund)
Schwab Fundamental
International* Large Company
Index Fund
Schwab Fundamental
International* Small Company Index Fund (formerly, Schwab Fundamental International Small-Mid Company Index Fund)
Schwab Fundamental
Emerging Markets* Large Company Index Fund (formerly, 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 COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. |
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Table of Contents
This wrapper is not part of the shareholder report.
Table of Contents
Schwab Fundamental Index* Funds
Annual Report
October 31, 2012
Schwab Fundamental
US Large Company* Index Fund
Schwab Fundamental
US Small Company* Index Fund (formerly, Schwab Fundamental US Small-Mid Company Index Fund)
Schwab Fundamental
International* Large Company
Index Fund
Schwab Fundamental
International* Small Company Index Fund (formerly, Schwab Fundamental International Small-Mid Company Index Fund)
Schwab Fundamental
Emerging Markets* Large Company Index Fund (formerly, 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 COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. |
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Schwab Fundamental Index Funds
In This Report
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Performance and Fund Facts | ||
6 | ||
8 | ||
10 | ||
12 | ||
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16 | ||
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74 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of 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.
Table of Contents
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) | 15.29% | |||
Russell Fundamental U.S. Large Company Index1 | 16.19% | |||
Performance Details | pages 6-7 | |||
Schwab Fundamental US Small Company* Index Fund (Ticker Symbol: SFSNX) | 11.37% | |||
Russell Fundamental U.S. Small Company Index2 | 12.54% | |||
Performance Details | pages 8-9 | |||
Schwab Fundamental International* Large Company Index Fund3 (Ticker Symbol: SFNNX) | 2.24% | |||
Russell Fundamental Developed ex-U.S. Large Company Index (Net)4 | 1.04% | |||
Performance Details | pages 10-11 | |||
Schwab Fundamental International* Small Company Index Fund3 (Ticker Symbol: SFILX) | 3.13% | |||
Russell Fundamental Developed ex-U.S. Small Company Index (Net)5 | 5.15% | |||
Performance Details | pages 12-13 | |||
Schwab Fundamental Emerging Markets* Large Company Index Fund3 (Ticker Symbol: SFENX) | 1.18% | |||
Russell Fundamental Emerging Markets Large Company Index (Net)6 | 3.67% | |||
Performance Details | pages 14-15 | |||
Minimum Initial Investment7 | $ | 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— each of the names identifying the Russell Fundamental Indexes is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Indexes. Russell is the owner of the trademarks and copyrights related to the Russell Indexes. The Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the 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 COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC.
1 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI US 1000 Index to the Russell Fundamental U.S. Large Company Index. See Glossary for index definitions. | |
2 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI US Mid Small 1500 Index to the Russell Fundamental U.S. Small Company Index. See Glossary for index definitions. | |
3 | 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. | |
4 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI Developed ex US 1000 Index to the Russell Fundamental Developed ex-U.S. Large Company Index (Net). See Glossary for index definitions. | |
5 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI Developed ex US Mid Small 1500 Index to the Russell Fundamental Developed ex-U.S. Small Company Index (Net). See Glossary for index definitions. | |
6 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI Emerging Index to the Russell Fundamental Emerging Markets Large Company Index (Net). See Glossary for index definitions. | |
7 | Please see the funds’ prospectus for further detail and eligibility requirements. |
2 Schwab Fundamental Index Funds
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From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctpchandom.jpg)
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., (CSIM) 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. Fundamental Index strategies have enjoyed significant asset growth in recent years, as investors have embraced the value of alternatives to traditional index funds. While most equity indices are generally weighted by market capitalization, fundamental indices select and weight stocks by non-price factors such as dividends, cash flow and sales. By utilizing this methodology, the Schwab Fundamental Index Funds seek to offset certain risks of traditional cap-weighted index products, while offering the potential for higher returns.
For the 12 months ended October 31, 2012, the Schwab Fundamental Index Funds generated a range of positive returns amid challenging conditions overseas and a comparatively favorable environment in the U.S. For overseas equities, the euro zone’s sovereign debt crisis represented an ongoing challenge, as did decelerating economic growth. Stocks in developed international markets endured particularly sharp losses in May amid concerns regarding Greek elections and worries that the crisis might spread. Subsequently, meaningful progress by European leaders helped overseas equities turnaround, while major currencies finished mixed versus the U.S. dollar. Emerging market economies generally faced decelerating economic growth that tempered the returns of stocks in such markets, resulting in limited gains during the period.
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.
![]() | 15.21% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 12.08% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 5.15% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.25% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.06% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctcaptst03.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management’s views and portfolio holdings may have changed since the report date.
Schwab Fundamental Index Funds 3
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From the President continued
For the 12 months ended October 31, 2012, the Schwab Fundamental Index Funds generated a range of positive returns amid challenging conditions overseas and a comparatively favorable environment in the U.S.
Softening corporate earnings forecasts also somewhat weighed on international stocks, as did the depreciation of most “BRIC” currencies versus the U.S. dollar.
U.S. stocks were supported by the government’s ongoing efforts to speed up economic growth. The Federal Reserve announced new policies aimed at quickening the pace of economic expansion, and extended its forecast for keeping short-term interest rates at 0-0.25% from late 2014 to mid-2015. Large-cap stocks outperformed small-cap stocks, with both generating solid returns in spite of signs of slowing corporate profit growth.
The underperformance of overseas equities versus U.S. stocks is readily apparent when looking at several widely used performance gauges. In U.S. dollar terms, the MSCI EAFE Index returned 5.2%, the MSCI Emerging Markets Index returned 3.0%, and the S&P 500 Index returned 15.2%.
Thank you for investing in the Schwab Fundamental Index Funds. As announced in August, CSIM converted the indices for these products to the Russell Fundamental Index Series on October 19, 2012. In connection with this transition, CSIM agreed to temporarily waive each fund’s operating expense ratio for a certain period of time. We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to frequently asked questions or for more information about the Schwab Fundamental Index Funds, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Fundamental Index Funds
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Fund Management
![]() | Agnes Hong, CFA, Managing Director and Head of Passive Equity Strategies, leads the portfolio management teams of Schwab’s index mutual funds and equity ETFs. She also has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2009, Ms. Hong spent five years as a portfolio manager at Barclays Global Investors (subsequently acquired by BlackRock), where she managed institutional index funds and quantitative active funds. Prior to that, Ms. Hong worked in management consulting and product management, servicing global financial services clients. | |
![]() | Larry Mano, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of each of the funds. Prior to joining CSIM in 1998, Mr. Mano was a vice president and principal in the Institutional Services Group at Wilshire Associates, Inc., where he directed the product development and client servicing of analytical tools to aid in the management of structured equity and indexed portfolios. He has over 20 years of experience in asset management. | |
![]() | Ron Toll, Portfolio Manager, is responsible for the day-to-day co-management of each of the funds. Mr. Toll has been a portfolio manager with CSIM since 2007, and has held a number of positions at the firm since beginning his tenure in 1998. His previous roles include serving as a manager in Portfolio Operations, and as a manager in Portfolio Operations and Analytics. |
Schwab Fundamental Index Funds 5
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Schwab Fundamental US Large Company* Index Fund
The Schwab Fundamental US Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell Fundamental U.S. Large Company Index (the index), which measures the performance of the large company size segment by fundamental overall company scores. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 15.29% for the 12-month period ended October 31, 2012. On October 19, 2012, the fund transitioned from tracking the FTSE RAFI US 1000 Index, which returned 15.64% for the 12-month period, to the new index, which returned 16.19%. The Fundamental U.S. Large Company Spliced Index returned 15.70% for the same period. Because the return of an index does not include operational and transaction costs, the return of a fund tends to differ from that of its respective index.
Market Highlights. Large-cap U.S. stocks generated double-digit overall returns. The low-rate environment and governmental efforts aimed at increasing the pace of economic growth helped to support this performance. Challenges included the euro zone’s ongoing sovereign debt crisis, worries over the November elections, and the upcoming fiscal cliff—the potential expiration of many tax cuts and governmental spending policies in 2013.
Contributors and Detractors. The Financials sector was the biggest contributor to the fund’s total return. The large average weight of this sector reflected part of the reason for this contribution, with Financials stocks comprising nearly 20% of the fund. Financials stocks also performed well, returning almost 21%. One significant contributor in this sector was Bank of America Corporation, a diversified financial services company that provides banking, investing, asset management, and other services. The fund’s Bank of America Corporation holdings returned more than 37% for the 12 months.
The Consumer Discretionary sector, which represented an average weight of nearly 11% of the fund, also provided a meaningful total return contribution. The fund’s Consumer Discretionary stocks returned approximately 22%, reflecting the overall performance of companies that manufacture cars, create household goods, provide consumer services, or are involved in media or retailing activities. One significant contributor in this sector was Home Depot, Inc., a home improvement retailer. The fund’s Home Depot, Inc. holdings returned nearly 76% over the report period.
The Information Technology sector was the weakest contributor to the fund’s total return. The Information Technology sector represented an average weight of nearly 11% of the fund, and generated a return of approximately 2%. One significant detractor in this sector was Hewlett-Packard Company, an imaging and printing systems, computing systems, and information technology services provider. The fund’s holdings of Hewlett-Packard Company returned approximately -47%.
As of 10/31/12:
Statistics
Number of Holdings | 620 | |||
Weighted Average Market Cap ($ x 1,000,000) | $93,898 | |||
Price/Earnings Ratio (P/E) | 16.5 | |||
Price/Book Ratio (P/B) | 1.8 | |||
Portfolio Turnover Rate | 32% |
Sector Weightings % of Investments
Energy | 15.4% | |||
Financials | 14.8% | |||
Consumer Discretionary | 12.2% | |||
Consumer Staples | 11.4% | |||
Information Technology | 11.2% | |||
Health Care | 11.0% | |||
Industrials | 10.6% | |||
Utilities | 4.6% | |||
Telecommunication Services | 4.5% | |||
Materials | 3.5% | |||
Other | 0.8% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Exxon Mobil Corp. | 5.6% | |||
Chevron Corp. | 2.6% | |||
AT&T, Inc. | 2.1% | |||
Bank of America Corp. | 1.9% | |||
General Electric Co. | 1.8% | |||
Wal-Mart Stores, Inc. | 1.7% | |||
The Procter & Gamble Co. | 1.6% | |||
ConocoPhillips | 1.6% | |||
Microsoft Corp. | 1.6% | |||
Verizon Communications, Inc. | 1.4% | |||
Total | 21.9% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Fundamental Index Funds
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Schwab Fundamental US Large Company Index Fund
Performance and Fund Facts as of 10/31/12
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.
April 2, 2007 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsfulcif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental US Large Company* Index Fund (4/2/07) | 15.29 | % | 1.83 | % | 2.96 | % | |||||||||
Russell Fundamental U.S. Large Company Index4 | 16.19 | % | n/a | n/a | |||||||||||
Fundamental US Large Company Spliced Index5 | 15.70 | % | 1.97 | % | 3.07 | % | |||||||||
FTSE RAFI US 1000 Index® | 15.64 | % | 1.96 | % | 3.06 | % |
Fund Expense Ratios6: Net 0.35%; Gross 0.44%
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 Fundamental U.S. Large Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Indexes. FTSE is a trademark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under license. Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by Russell, FTSE or RA, and Russell, FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, 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 past performance and financial history of the fund are that of the fund’s former Institutional Shares. | |
4 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI US 1000 Index to the Russell Fundamental U.S. Large Company Index. See Glossary for index definitions. | |
5 | The Fundamental U.S. Large Company Spliced Index is an internally calculated index, comprised of the FTSE RAFI US 1000 Index from inception of the fund until the close of business on October 18, 2012 and the Russell Fundamental U.S. Large Company Index from October 19, 2012 forward. | |
6 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 7
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Schwab Fundamental US Small Company* Index Fund
The Schwab Fundamental US Small Company Index Fund (the fund, formerly the Schwab Fundamental US Small-Mid Company Index Fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell Fundamental U.S. Small Company Index (the index), which measures the performance of the small company size segment by fundamental overall company scores. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 11.37% for the 12-month period ended October 31, 2012. On October 19, 2012, the fund transitioned from tracking the FTSE RAFI US Mid Small 1500 Index, which returned 12.36% for the 12-month period, to the new index, which returned 12.54%. The Fundamental U.S. Small Company Spliced Index returned 11.47% for the same period. Because the return of an index does not include operational and transaction costs, the return of a fund tends to differ from that of its respective index.
Market Highlights. Small-cap U.S. stocks generated double-digit returns for the 12-months. The low-rate environment and governmental efforts aimed at increasing the pace of economic growth helped to support this performance. Challenges included the euro zone’s ongoing sovereign debt crisis, worries over the November elections, and the upcoming fiscal cliff—the potential expiration of many tax cuts and governmental spending policies in 2013.
Contributors and Detractors. The Financials sector was the biggest contributor to the fund’s return. The large average weight of this sector reflected part of the reason for this contribution, with Financials stocks representing more than 21% of the fund. Financials stocks also performed well, returning approximately 20%. One significant contributor in this sector was Ocwen Financial Corporation, a diversified financial services holding company. The fund’s Ocwen Financial Corporation holdings returned approximately 146% over the 12 months.
The Consumer Discretionary sector, which represented an average weight of nearly 18% of the fund, also provided a meaningful total return contribution. The fund’s Consumer Discretionary stocks returned more than 19%, reflecting the overall performance of companies that manufacture cars, create household goods, provide consumer services, or are involved in media or retailing activities. One significant contributor in this sector was The Ryland Group, Inc., a homebuilder and mortgage-related finance company. The fund’s holdings of The Ryland Group, Inc. returned more than 152% over the report period.
The Energy sector detracted the most from the fund’s total return. This sector represented an average weight of more than 5% of the fund, and returned roughly -15% amid limited U.S. economic activity. One significant detractor in this sector was Patriot Coal Corporation, a coal mining company. The fund’s Patriot Coal Corp. holdings returned approximately -95%.
As of 10/31/12:
Statistics
Number of Holdings | 907 | |||
Weighted Average Market Cap ($ x 1,000,000) | $2,745 | |||
Price/Earnings Ratio (P/E) | 55.1 | |||
Price/Book Ratio (P/B) | 1.6 | |||
Portfolio Turnover Rate | 92% |
Sector Weightings % of Investments
Consumer Discretionary | 20.1% | |||
Financials | 20.0% | |||
Industrials | 19.5% | |||
Information Technology | 11.9% | |||
Health Care | 6.8% | |||
Materials | 6.3% | |||
Energy | 6.2% | |||
Utilities | 3.8% | |||
Consumer Staples | 3.4% | |||
Telecommunication Services | 1.3% | |||
Other | 0.7% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
PulteGroup, Inc. | 0.7% | |||
Lennar Corp., Class A | 0.5% | |||
Exterran Holdings, Inc. | 0.4% | |||
The Ryland Group, Inc. | 0.3% | |||
The Shaw Group, Inc. | 0.3% | |||
KB Home | 0.3% | |||
CapitalSource, Inc. | 0.3% | |||
Toll Brothers, Inc. | 0.3% | |||
Snap-on, Inc. | 0.3% | |||
iStar Financial, Inc. | 0.3% | |||
Total | 3.7% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Fundamental Index Funds
Table of Contents
Schwab Fundamental US Small Company Index Fund
Performance and Fund Facts as of 10/31/12
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.
April 2, 2007 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsfuscif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental US Small Company* Index Fund (4/2/07) | 11.37 | % | 3.32 | % | 3.62 | % | |||||||||
Russell Fundamental U.S. Small Company Index4 | 12.54 | % | n/a | n/a | |||||||||||
Fundamental US Small Company Spliced Index5 | 11.47 | % | 3.90 | % | 4.23 | % | |||||||||
FTSE RAFI US Mid Small 1500 Index® | 12.36 | % | 4.06 | % | 4.38 | % |
Fund Expense Ratios6: Net 0.35%; Gross 0.50%
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 Fundamental U.S. Small Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Indexes. FTSE is a trademark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under license. Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by Russell, FTSE or RA, and Russell, FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, 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 past performance and financial history of the fund are that of the fund’s former Institutional Shares. | |
4 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI US Mid Small 1500 Index to the Russell Fundamental U.S. Small Company Index. See Glossary for index definitions. | |
5 | The Fundamental U.S. Small Company Spliced Index is an internally calculated index, comprised of the FTSE RAFI US Mid Small 1500 Index from inception of the fund until the close of business on October 18, 2012 and the Russell Fundamental U.S. Small Company Index from October 19, 2012 forward. | |
6 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 9
Table of Contents
Schwab Fundamental International* Large Company Index Fund
The Schwab Fundamental International Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell Fundamental Developed ex-U.S. Large Company Index (Net) (the index), which measures the performance of the large company size segment by fundamental overall company scores. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 2.24% in U.S. dollar terms for the 12-month period ended October 31, 2012. On October 19, 2012, the fund transitioned from tracking the FTSE RAFI Developed ex US 1000 Index, which returned 1.64% for the 12-month period, to the new index, which returned 1.04%. The Fundamental Developed ex-U.S. Large Company Spliced Index returned 1.35% for the same period. Because the return of an index does not include operational and transaction costs, the return of a fund tends to differ from that of its respective index. In addition, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings contributed positively to the fund’s relative performance.**
Market Highlights. The euro zone’s sovereign debt crisis and decelerating economic growth represented challenges for large-cap international stocks. However, meaningful eventual progress by European leaders toward resolving the crisis helped international stocks, while major currencies finished mixed versus the U.S. dollar.
Contributors and Detractors. U.K. stocks were the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of more than 20%. U.K. investments benefitted from being alternatives to the crisis-plagued euro zone, and returned almost 10% for the fund in U.S. dollar terms. HSBC Holdings plc—an international banking and financial services company—was a significant contributor in this market, with the fund’s holdings returning more than 18%.
The fund’s Japanese stocks returned approximately -7% in U.S. dollar terms, the biggest detractors from a country standpoint. Japanese stocks represented an average weight of more than 17% of the fund, and were negatively affected by slowing private consumption in Japan, as well as the country’s dwindling economic growth. Sony Corporation—a consumer electrics manufacturer—was a significant detractor in this market’s performance, with the fund’s holdings returning approximately -44%.
As of 10/31/12:
Statistics
Number of Holdings | 801 | |||
Weighted Average Market Cap ($ x 1,000,000) | $47,197 | |||
Price/Earnings Ratio (P/E) | 241.4 | |||
Price/Book Ratio (P/B) | 0.7 | |||
Portfolio Turnover Rate | 61% |
Sector Weightings % of Investments
Financials | 21.2% | |||
Energy | 13.6% | |||
Industrials | 11.8% | |||
Consumer Discretionary | 10.1% | |||
Materials | 9.2% | |||
Consumer Staples | 8.8% | |||
Telecommunication Services | 7.9% | |||
Health Care | 6.3% | |||
Utilities | 5.7% | |||
Information Technology | 4.1% | |||
Other | 1.3% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
BP plc | 2.8% | |||
Total S.A. | 1.9% | |||
Royal Dutch Shell plc, Class A | 1.8% | |||
HSBC Holdings plc | 1.5% | |||
ING Groep N.V. CVA | 1.5% | |||
Royal Dutch Shell plc, B Shares | 1.4% | |||
Vodafone Group plc | 1.4% | |||
iShares MSCI EAFE Index Fund | 1.2% | |||
Nestle S.A. – Reg’d | 1.1% | |||
Banco Santander S.A. | 1.1% | |||
Total | 15.7% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC.
**Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST). Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Fundamental Index Funds
Table of Contents
Schwab Fundamental International Large Company Index Fund
Performance and Fund Facts as of 10/31/12
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.
April 2, 2007 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsfilcif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental International* Large Company Index Fund (4/2/07) | 2.24 | % | -6.02 | % | -3.16 | % | |||||||||
Russell Fundamental Developed ex-U.S. Large Company Index (Net)4 | 1.04 | % | n/a | n/a | |||||||||||
Fundamental Developed ex-US Large Company Spliced Index5 | 1.35 | % | -5.21 | % | -2.20 | % | |||||||||
FTSE RAFI Developed ex US 1000 Index® | 1.64 | % | -5.16 | % | -2.15 | % |
Fund Expense Ratios6: Net 0.35%; Gross 0.57%
Country Weightings % of Equity Investments
United Kingdom | 20.0% | |||
Japan | 17.7% | |||
France | 11.0% | |||
Germany | 9.4% | |||
Canada | 6.3% | |||
Netherlands | 6.2% | |||
Switzerland | 5.4% | |||
Australia | 4.7% | |||
Italy | 4.0% | |||
Spain | 3.9% | |||
Other Countries | 11.4% | |||
Total | 100.0% |
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.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Index ownership— “Russell Fundamental Developed ex-U.S. Large Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Indexes. FTSE is a trademark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under license. Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by Russell, FTSE or RA, and Russell, FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, 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 past performance and financial history of the fund are that of the fund’s former Institutional Shares. | |
4 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI Developed ex US 1000 Index to the Russell Fundamental Developed ex-U.S. Large Company Index (Net). See Glossary for index definitions. | |
5 | The Fundamental Developed ex-U.S. Large Company Spliced Index is an internally calculated index, comprised of the FTSE RAFI Developed ex US 1000 Index (Net) from inception of the fund until the close of business on October 18, 2012 and the Russell Fundamental Developed ex-U.S. Large Company Index (Net) from October 19, 2012 forward. | |
6 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 11
Table of Contents
Schwab Fundamental International* Small Company Index Fund
The Schwab Fundamental International Small Company Index Fund (the fund, formerly Schwab Fundamental International Small-Mid Company Index Fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell Fundamental Developed ex-U.S. Small Company Index (Net) (the index), which measures the performance of the small company size segment by fundamental overall company scores. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 3.13% in U.S. dollar terms for the 12 months ended October 31, 2012. On October 19, 2012, the fund transitioned from tracking the FTSE RAFI Developed ex US Mid Small 1500 Index, which returned 2.49% for the 12-month period, to the new index, which returned 5.15%. The Fundamental Developed ex-U.S. Small Company Spliced Index returned 2.27% for the same period. Because the return of an index does not include operational and transaction costs, the return of a fund tends to differ from that of its respective index. In addition, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings contributed positively to the fund’s relative performance.**
Market Highlights. The euro zone’s sovereign debt crisis and decelerating economic growth represented challenges for small-cap international stocks. However, meaningful eventual progress by European leaders toward resolving the crisis helped international stocks, while major currencies finished mixed versus the U.S. dollar.
Contributors and Detractors. U.K. stocks were the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of approximately 9%. U.K. investments benefitted from being alternatives to the crisis-plagued euro zone, and returned more than 22% for the fund in U.S. dollar terms. Ashtead Group plc—an investment holding and management company—was a significant contributor in this market, with the fund’s holdings returning more than 143%.
The fund’s South Korean stocks returned approximately -9% in U.S. dollar terms, the biggest detractors from a country standpoint. South Korean stocks represented an average weight of almost 7% of the fund, and were negatively affected by the country’s slowing exports and tempered economic growth. Daewoo Songdo Development Company Ltd.—a construction company—was a significant detractor in this market, with the fund’s holdings returning approximately -99%.
As of 10/31/12:
Statistics
Number of Holdings | 1276 | |||
Weighted Average Market Cap ($ x 1,000,000) | $3,102 | |||
Price/Earnings Ratio (P/E) | -104.4 | |||
Price/Book Ratio (P/B) | 1.0 | |||
Portfolio Turnover Rate | 89% |
Sector Weightings % of Investments
Industrials | 23.9% | |||
Consumer Discretionary | 18.6% | |||
Financials | 18.0% | |||
Materials | 9.9% | |||
Information Technology | 8.4% | |||
Consumer Staples | 7.4% | |||
Health Care | 4.5% | |||
Energy | 4.3% | |||
Utilities | 2.0% | |||
Telecommunication Services | 1.3% | |||
Other | 1.7% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
iShares MSCI EAFE Small Cap Index Fund | 1.5% | |||
Sun Hung Kai Properties Ltd. | 0.3% | |||
Pembina Pipeline Corp. | 0.3% | |||
Eurobank Ergasias S.A. | 0.2% | |||
Debenhams plc | 0.2% | |||
Bellway plc | 0.2% | |||
Mitchells & Butlers plc | 0.2% | |||
Petroleum Geo-Services A.S.A. | 0.2% | |||
AtoS | 0.2% | |||
Amadeus IT Holding S.A., A Shares | 0.2% | |||
Total | 3.5% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
Foreign securities can involve risks such as political and economic instability and currency risk.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC.
**Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST). Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Fundamental Index Funds
Table of Contents
Schwab Fundamental International Small Company Index Fund
Performance and Fund Facts as of 10/31/12
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.
January 31, 2008 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsfiscif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental International* Small Company Index Fund (1/31/08) | 3.13 | % | 5.02 | % | 1.81 | % | |||||||||
Russell Fundamental Developed ex-U.S. Small Company Index (Net)4 | 5.15 | % | n/a | n/a | |||||||||||
Fundamental Developed ex-US Small Company Spliced Index5 | 2.27 | % | 5.28 | % | 3.58 | % | |||||||||
FTSE RAFI Developed ex US Mid Small 1500 Index® | 2.49 | % | 5.36 | % | 3.62 | % |
Fund Expense Ratios6: Net 0.55%; Gross 0.99%
Country Weightings % of Equity Investments
Japan | 34.4% | |||
United Kingdom | 14.0% | |||
Canada | 8.6% | |||
France | 5.1% | |||
Australia | 4.6% | |||
Germany | 3.6% | |||
Hong Kong | 3.5% | |||
Switzerland | 2.8% | |||
Italy | 2.7% | |||
Other Countries | 20.7% | |||
Total | 100.0% |
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.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Index ownership— “Russell Fundamental Developed ex-U.S. Small Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Indexes. FTSE is a trademark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under license. Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by Russell, FTSE or RA, and Russell, FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, 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 past performance and financial history of the fund are that of the fund’s former Institutional Shares. | |
4 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI Developed ex US Mid Small 1500 Index to the Russell Fundamental Developed ex-US Small Company Index (Net). See Glossary for index definitions. | |
5 | The Fundamental Developed ex-US Small Co. Spliced Index is an internally calculated index, comprised of the FTSE RAFI Developed ex US Mid Small 1500 Index (Net) from inception of the fund until the close of business on October 18, 2012 and the Russell Fundamental Developed ex-U.S. Small Company Index (Net) from October 19, 2012 forward. | |
6 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 13
Table of Contents
Schwab Fundamental Emerging Markets* Large Company Index Fund
The Schwab Fundamental Emerging Markets Large Company Index Fund (the fund, formerly the Schwab Fundamental Emerging Markets Index Fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell Fundamental Emerging Markets Large Company Index (Net) (the index), which measures the performance of the large company size segment by fundamental overall company scores. To pursue its investment objective, the fund uses a replication investment approach (where possible), seeking a tight allocation across countries, regions, sectors, market capitalizations, and valuation measures compared with the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
The fund returned 1.18% in U.S. dollar terms for the 12 months ended October 31, 2012. On October 19, 2012, the fund transitioned from tracking the FTSE RAFI Emerging Index, which returned 1.84% the 12-month period, to the new index, which returned 3.67%. The Fundamental Emerging Markets Large Company Spliced Index returned 1.95% for the same period. Because the return of an index does not include operational and transaction costs, the return of a fund tends to differ from that of its respective index. In addition, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings contributed positively to the fund’s relative performance.**
Market Highlights. Emerging market stocks generated narrowly positive returns overall in U.S. dollar terms, as global economic growth remained soft and the euro zone’s sovereign debt crisis continued. Emerging market currencies finished mixed but generally lower versus the U.S. dollar, weighing on emerging market stock returns for U.S. investors.
Contributors and Detractors. Mexican stocks were the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of almost 4%. Mexican investments benefitted amid rising export activity, particularly to the U.S., and returned almost 28% for the fund in U.S. dollar terms. Cemex SAB de CV—a building products company—was a significant contributor in this market, with the fund’s holdings returning more than 84%.
The fund’s Brazilian stocks returned approximately -15% in U.S. dollar terms, the biggest detractors from a country standpoint. Brazilian stocks represented an average weight of approximately 18% of the fund, and were negatively affected by the greater than 15% depreciation of the Brazilian real versus the U.S. dollar, which reduced returns for investors in U.S. dollar terms. Petroleo Brasileiro S.A.—an oil and natural gas explorer and producer—shares were significant detractors in this market, with the fund’s holdings returning approximately -16% to -20%.
As of 10/31/12:
Statistics
Number of Holdings | 247 | |||
Weighted Average Market Cap ($ x 1,000,000) | $41,764 | |||
Price/Earnings Ratio (P/E) | 15.2 | |||
Price/Book Ratio (P/B) | 1.2 | |||
Portfolio Turnover Rate | 86% |
Sector Weightings % of Investments
Energy | 25.5% | |||
Financials | 15.9% | |||
Information Technology | 15.5% | |||
Materials | 12.8% | |||
Telecommunication Services | 11.1% | |||
Industrials | 5.7% | |||
Consumer Discretionary | 5.1% | |||
Utilities | 3.3% | |||
Consumer Staples | 2.5% | |||
Other | 2.6% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
LUKOIL ADR | 4.9% | |||
Samsung Electronics Co., Ltd. | 4.4% | |||
Gazprom ADR | 3.8% | |||
iShares MSCI Emerging Markets Index Fund | 2.6% | |||
Surgutneftegaz ADR | 2.0% | |||
China Mobile Ltd. | 1.9% | |||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1.9% | |||
Petroleo Brasileiro S.A. | 1.8% | |||
Petroleo Brasileiro S.A. – Petrobras | 1.6% | |||
POSCO | 1.5% | |||
Total | 26.4% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC.
**Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST). Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities.
1 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Fundamental Index Funds
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Performance and Fund Facts as of 10/31/12
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.
January 31, 2008 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsfemif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental Emerging Markets* Large Company Index Fund (1/31/08) | 1.18 | % | 3.29 | % | 0.19 | % | |||||||||
Russell Fundamental Emerging Markets Large Company Index (Net)4 | 3.67 | % | n/a | n/a | |||||||||||
Fundamental Emerging Markets Large Company Spliced Index5 | 1.95 | % | 4.72 | % | 2.30 | % | |||||||||
FTSE RAFI Emerging Index® | 1.84 | % | 4.67 | % | 2.28 | % |
Fund Expense Ratios6: Net 0.60%; Gross 0.91%
Country Weightings % of Equity Investments
Republic of Korea | 21.9% | |||
Russia | 15.1% | |||
Taiwan | 13.1% | |||
Brazil | 11.9% | |||
China | 11.0% | |||
South Africa | 6.9% | |||
Mexico | 4.2% | |||
India | 2.9% | |||
United States | 2.6% | |||
Other Countries | 10.4% | |||
Total | 100.0% |
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.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Index ownership— “Russell Fundamental Emerging Markets Large Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Indexes. FTSE is a trademark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under license. Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by Russell, FTSE or RA, and Russell, FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
*SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, 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 past performance and financial history of the fund are that of the fund’s former Institutional Shares. | |
4 | Effective October 19, 2012, the fund’s benchmark was changed from the FTSE RAFI Emerging Index to the Russell Fundamental Emerging Markets Large Company Index (Net). See Glossary for index definitions. | |
5 | The Fundamental Emerging Large Company Spliced Index is an internally calculated index, comprised of the FTSE RAFI Emerging Index (Net) from inception of the fund until the close of business on October 18, 2012 and the Russell Fundamental Emerging Markets Large Company Index (Net) from October 19, 2012 forward. | |
6 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 15
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2012 and held through October 31, 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 5/1/12 | at 10/31/12 | 5/1/12–10/31/12 | |||||||||||||
Schwab Fundamental US Large Company Index Fund | ||||||||||||||||
Actual Return | 0.29% | $ | 1,000 | $ | 1,037.60 | $ | 1.49 | |||||||||
Hypothetical 5% Return | 0.29% | $ | 1,000 | $ | 1,023.68 | $ | 1.48 | |||||||||
Schwab Fundamental US Small Company Index Fund | ||||||||||||||||
Actual Return | 0.29% | $ | 1,000 | $ | 1,001.90 | $ | 1.46 | |||||||||
Hypothetical 5% Return | 0.29% | $ | 1,000 | $ | 1,023.68 | $ | 1.48 | |||||||||
Schwab Fundamental International Large Company Index Fund | ||||||||||||||||
Actual Return | 0.28% | $ | 1,000 | $ | 1,018.50 | $ | 1.42 | |||||||||
Hypothetical 5% Return | 0.28% | $ | 1,000 | $ | 1,023.73 | $ | 1.42 | |||||||||
Schwab Fundamental International Small Company Index Fund | ||||||||||||||||
Actual Return | 0.55% | $ | 1,000 | $ | 990.20 | $ | 2.75 | |||||||||
Hypothetical 5% Return | 0.55% | $ | 1,000 | $ | 1,022.37 | $ | 2.80 | |||||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | ||||||||||||||||
Actual Return | 0.51% | $ | 1,000 | $ | 971.50 | $ | 2.53 | |||||||||
Hypothetical 5% Return | 0.51% | $ | 1,000 | $ | 1,022.57 | $ | 2.59 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 366 days of the fiscal year. |
16 Schwab Fundamental Index Funds
Table of Contents
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– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.51 | 9.05 | 7.63 | 6.47 | 10.75 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.18 | 0.14 | 0.10 | 0.20 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.22 | 0.43 | 1.37 | 1.26 | (4.38 | ) | ||||||||||||||||
Total from investment operations | 1.43 | 0.61 | 1.51 | 1.36 | (4.18 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.18 | ) | (0.15 | ) | (0.09 | ) | (0.20 | ) | (0.09 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.01 | ) | ||||||||||||||||
Total distributions | (0.18 | ) | (0.15 | ) | (0.09 | ) | (0.20 | ) | (0.10 | ) | ||||||||||||
Net asset value at end of period | 10.76 | 9.51 | 9.05 | 7.63 | 6.47 | |||||||||||||||||
Total return (%) | 15.29 | 6.74 | 19.95 | 22.04 | (39.22 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.32 | 2 | 0.35 | 0.35 | 0.35 | 0.35 | ||||||||||||||||
Gross operating expenses | 0.44 | 0.44 | 0.45 | 0.53 | 0.52 | |||||||||||||||||
Net investment income (loss) | 2.13 | 2.06 | 1.77 | 1.88 | 2.19 | |||||||||||||||||
Portfolio turnover rate | 32 | 3 | 11 | 27 | 28 | 26 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,960 | 1,490 | 1,019 | 663 | 277 |
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 The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included. See financial note 12.
3 Portfolio turnover would have been 12%, if rebalancing trades had not been included due to a change in the fund’s index. See financial note 12.
See financial notes 17
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2012
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 | .1% | Common Stock | 1,667,032,894 | 1,940,572,294 | ||||||||
0 | .7% | Other Investment Company | 14,493,390 | 14,493,390 | ||||||||
0 | .1% | Short-Term Investment | 1,838,750 | 1,838,750 | ||||||||
99 | .9% | Total Investments | 1,683,365,034 | 1,956,904,434 | ||||||||
0 | .9% | Collateral Invested for Securities on Loan | 17,726,150 | 17,726,150 | ||||||||
(0 | .8)% | Other Assets and Liabilities, Net | (14,833,460 | ) | ||||||||
100 | .0% | Net Assets | 1,959,797,124 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.1% of net assets | ||||||||||||
Automobiles & Components 0.7% | ||||||||||||
Other Securities | 0.7 | 14,771,860 | ||||||||||
Banks 2.5% | ||||||||||||
Wells Fargo & Co. | 529,425 | 0.9 | 17,836,328 | |||||||||
Other Securities | 1.6 | 30,867,993 | ||||||||||
2.5 | 48,704,321 | |||||||||||
Capital Goods 8.0% | ||||||||||||
3M Co. | 90,775 | 0.4 | 7,951,890 | |||||||||
General Electric Co. | 1,654,725 | 1.8 | 34,848,508 | |||||||||
United Technologies Corp. | 138,915 | 0.6 | 10,857,596 | |||||||||
Other Securities | 5.2 | 104,062,682 | ||||||||||
8.0 | 157,720,676 | |||||||||||
Commercial & Professional Supplies 0.9% | ||||||||||||
Other Securities | 0.9 | 17,565,662 | ||||||||||
Consumer Durables & Apparel 1.1% | ||||||||||||
Other Securities | 1.1 | 21,066,773 | ||||||||||
Consumer Services 1.4% | ||||||||||||
McDonald’s Corp. | 111,480 | 0.5 | 9,676,464 | |||||||||
Other Securities | 0.9 | 17,053,498 | ||||||||||
1.4 | 26,729,962 | |||||||||||
Diversified Financials 7.1% | ||||||||||||
Bank of America Corp. | 4,033,960 | 1.9 | 37,596,507 | |||||||||
Citigroup, Inc. | 676,633 | 1.3 | 25,299,308 | |||||||||
JPMorgan Chase & Co. | 623,742 | 1.3 | 25,997,567 | |||||||||
The Charles Schwab Corp. (a) | 145,215 | 0.1 | 1,972,020 | |||||||||
The Goldman Sachs Group, Inc. | 77,411 | 0.5 | 9,474,332 | |||||||||
Other Securities | 2.0 | 37,984,559 | ||||||||||
7.1 | 138,324,293 | |||||||||||
Energy 15.3% | ||||||||||||
Chevron Corp. | 459,305 | 2.6 | 50,620,004 | |||||||||
ConocoPhillips | 546,510 | 1.6 | 31,615,603 | |||||||||
Exxon Mobil Corp. | 1,204,984 | 5.6 | 109,858,391 | |||||||||
Marathon Oil Corp. | 348,390 | 0.5 | 10,472,603 | |||||||||
Occidental Petroleum Corp. | 97,170 | 0.4 | 7,672,543 | |||||||||
Phillips 66 | 184,555 | 0.4 | 8,703,614 | |||||||||
Valero Energy Corp. | 480,125 | 0.7 | 13,971,638 | |||||||||
Other Securities | 3.5 | 67,752,828 | ||||||||||
15.3 | 300,667,224 | |||||||||||
Food & Staples Retailing 4.2% | ||||||||||||
Costco Wholesale Corp. | 90,815 | 0.5 | 8,938,920 | |||||||||
CVS Caremark Corp. | 298,735 | 0.7 | 13,861,304 | |||||||||
Wal-Mart Stores, Inc. | 432,325 | 1.7 | 32,433,022 | |||||||||
Walgreen Co. | 266,370 | 0.5 | 9,384,215 | |||||||||
Other Securities | 0.8 | 17,986,636 | ||||||||||
4.2 | 82,604,097 | |||||||||||
Food, Beverage & Tobacco 4.9% | ||||||||||||
Altria Group, Inc. | 383,480 | 0.6 | 12,194,664 | |||||||||
PepsiCo, Inc. | 185,808 | 0.7 | 12,865,346 | |||||||||
Philip Morris International, Inc. | 140,820 | 0.6 | 12,471,019 | |||||||||
The Coca-Cola Co. | 297,430 | 0.6 | 11,058,447 | |||||||||
Other Securities | 2.4 | 48,254,199 | ||||||||||
4.9 | 96,843,675 | |||||||||||
Health Care Equipment & Services 5.0% | ||||||||||||
UnitedHealth Group, Inc. | 239,275 | 0.7 | 13,399,400 | |||||||||
WellPoint, Inc. | 189,370 | 0.6 | 11,604,593 | |||||||||
Other Securities | 3.7 | 73,554,166 | ||||||||||
5.0 | 98,558,159 | |||||||||||
Household & Personal Products 2.3% | ||||||||||||
The Procter & Gamble Co. | 456,695 | 1.6 | 31,621,562 | |||||||||
Other Securities | 0.7 | 13,171,923 | ||||||||||
2.3 | 44,793,485 | |||||||||||
Insurance 4.3% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 153,411 | 0.7 | 13,247,040 | |||||||||
The Travelers Cos., Inc. | 152,695 | 0.6 | 10,832,183 |
18 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 3.0 | 59,631,314 | ||||||||||
4.3 | 83,710,537 | |||||||||||
Materials 3.4% | ||||||||||||
Other Securities | 3.4 | 67,732,419 | ||||||||||
Media 4.3% | ||||||||||||
Comcast Corp., Class A | 289,840 | 0.6 | 10,871,899 | |||||||||
The Walt Disney Co. | 280,950 | 0.7 | 13,786,217 | |||||||||
Time Warner, Inc. | 400,988 | 0.9 | 17,422,929 | |||||||||
Other Securities | 2.1 | 42,594,335 | ||||||||||
4.3 | 84,675,380 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.0% | ||||||||||||
Abbott Laboratories | 140,190 | 0.5 | 9,185,249 | |||||||||
Amgen, Inc. | 120,155 | 0.5 | 10,398,814 | |||||||||
Johnson & Johnson | 374,095 | 1.4 | 26,493,408 | |||||||||
Merck & Co., Inc. | 290,757 | 0.7 | 13,267,242 | |||||||||
Pfizer, Inc. | 1,075,399 | 1.4 | 26,745,173 | |||||||||
Other Securities | 1.5 | 30,749,544 | ||||||||||
6.0 | 116,839,430 | |||||||||||
Real Estate 1.0% | ||||||||||||
Other Securities | 1.0 | 19,188,310 | ||||||||||
Retailing 4.7% | ||||||||||||
Lowe’s Cos., Inc. | 346,355 | 0.6 | 11,214,975 | |||||||||
Target Corp. | 166,595 | 0.5 | 10,620,431 | |||||||||
The Home Depot, Inc. | 255,696 | 0.8 | 15,694,620 | |||||||||
Other Securities | 2.8 | 54,266,026 | ||||||||||
4.7 | 91,796,052 | |||||||||||
Semiconductors & Semiconductor Equipment 2.0% | ||||||||||||
Intel Corp. | 778,410 | 0.9 | 16,833,116 | |||||||||
Other Securities | 1.1 | 23,087,238 | ||||||||||
2.0 | 39,920,354 | |||||||||||
Software & Services 5.6% | ||||||||||||
International Business Machines Corp. | 127,195 | 1.3 | 24,743,243 | |||||||||
Microsoft Corp. | 1,079,315 | 1.6 | 30,798,254 | |||||||||
Other Securities | 2.7 | 53,394,449 | ||||||||||
5.6 | 108,935,946 | |||||||||||
Technology Hardware & Equipment 3.6% | ||||||||||||
Apple, Inc. | 13,874 | 0.4 | 8,256,418 | |||||||||
Cisco Systems, Inc. | 778,365 | 0.7 | 13,341,176 | |||||||||
Hewlett-Packard Co. | 965,575 | 0.7 | 13,373,214 | |||||||||
Other Securities | 1.8 | 34,831,031 | ||||||||||
3.6 | 69,801,839 | |||||||||||
Telecommunication Services 4.5% | ||||||||||||
AT&T, Inc. | 1,168,185 | 2.1 | 40,407,519 | |||||||||
Sprint Nextel Corp. * | 2,211,100 | 0.6 | 12,249,494 | |||||||||
Verizon Communications, Inc. | 630,930 | 1.4 | 28,164,715 | |||||||||
Other Securities | 0.4 | 6,707,855 | ||||||||||
4.5 | 87,529,583 | |||||||||||
Transportation 1.7% | ||||||||||||
Other Securities | 1.7 | 32,677,868 | ||||||||||
Utilities 4.6% | ||||||||||||
Other Securities | 4.6 | 89,414,389 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $1,667,032,894) | 1,940,572,294 | |||||||||||
Other Investment Company 0.7% of net assets | ||||||||||||
Money Market Funds 0.7% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund | 14,493,390 | 0.7 | 14,493,390 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $14,493,390) | 14,493,390 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 1,838,750 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $1,838,750) | 1,838,750 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.9% of net assets | ||||||||||||
State Street Institutional U.S. Government Money Market Fund | 17,726,150 | 0.9 | 17,726,150 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $17,726,150) | 17,726,150 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12 the tax basis cost of the fund’s investments was $1,706,889,516 and the unrealized appreciation and depreciation were $299,509,514 and ($49,494,596), respectively, with a net unrealized appreciation of $250,014,918.
See financial notes 19
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is on loan. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
REIT — | Real Estate Investment Trust. |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 200 | 14,068,000 | (381,675 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $1,848,776,242 | $— | $— | $1,848,776,242 | ||||||||||||
Retailing | 91,625,192 | — | 170,860 | 91,796,052 | ||||||||||||
Other Investment Company1 | 14,493,390 | — | — | 14,493,390 | ||||||||||||
Short-Term Investments1 | — | 1,838,750 | — | 1,838,750 | ||||||||||||
Total | $1,954,894,824 | $1,838,750 | $170,860 | $1,956,904,434 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $17,726,150 | $— | $— | $17,726,150 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($381,675 | ) | $— | $— | ($381,675 | ) |
1 | As categorized in complete schedule of holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | $9,216 | ($260,695 | ) | $272,058 | $160,223 | ($9,942 | ) | $— | $— | $170,860 | ||||||||||||||||||||||
Total | $9,216 | ($260,695 | ) | $272,058 | $160,223 | ($9,942 | ) | $— | $— | $170,860 | ||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was $10,637.
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
20 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated issuers, at value (cost $2,349,218) | $1,972,020 | |||||
Investments in unaffiliated issuers, at value (cost $1,681,015,816) including securities on loan of $17,446,528 | + | 1,954,932,414 | ||||
Total investments, at value (cost $1,683,365,034) | 1,956,904,434 | |||||
Collateral invested for securities on loan | 17,726,150 | |||||
Receivables: | ||||||
Fund shares sold | 4,349,516 | |||||
Dividends | 2,662,303 | |||||
Due from investment adviser | 83,667 | |||||
Income from securities on loan | 60,052 | |||||
Foreign tax reclaims | 3,924 | |||||
Interest | 1,178 | |||||
Prepaid expenses | + | 31,878 | ||||
Total assets | 1,981,823,102 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 17,726,150 | |||||
Payables: | ||||||
Investments bought | 160,223 | |||||
Shareholder service fees | 106,497 | |||||
Fund shares redeemed | 3,506,294 | |||||
Due to brokers for futures | 8,000 | |||||
Accrued expenses | + | 518,814 | ||||
Total liabilities | 22,025,978 | |||||
Net Assets | ||||||
Total assets | 1,981,823,102 | |||||
Total liabilities | − | 22,025,978 | ||||
Net assets | $1,959,797,124 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,744,814,199 | |||||
Net investment income not yet distributed | 29,130,846 | |||||
Net realized capital losses | (87,305,646 | ) | ||||
Net unrealized capital gains | 273,157,725 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,959,797,124 | 182,061,155 | $10.76 |
See financial notes 21
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated issuer | $28,786 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $41,744) | 42,513,150 | |||||
Interest | 5,800 | |||||
Securities on loan | + | 776,775 | ||||
Total investment income | 43,324,511 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 4,290,759 | |||||
Shareholder service fees | 1,497,105 | |||||
Index fee | 1,061,840 | |||||
Transfer agent fees | 616,719 | |||||
Registration fees | 88,490 | |||||
Portfolio accounting fees | 83,024 | |||||
Custodian fees | 63,263 | |||||
Shareholder reports | 60,231 | |||||
Professional fees | 53,294 | |||||
Trustees’ fees | 16,555 | |||||
Interest expense | 504 | |||||
State filing fee reimbursement (Note 4) | (4,078 | ) | ||||
Other expenses | + | 38,295 | ||||
Total expenses | 7,866,001 | |||||
Expense reduction by CSIM and its affiliates1 | − | 2,262,634 | ||||
Custody credits | − | 36 | ||||
Net expenses | − | 5,603,331 | ||||
Net investment income | 37,721,180 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on affiliated issuer | (25,779 | ) | ||||
Net realized gains on unaffiliated investments | 36,046,952 | |||||
Net realized gains on futures contracts | + | 2,483,553 | ||||
Net realized gains | 38,504,726 | |||||
Net unrealized gains on affiliated issuer | 73,801 | |||||
Net unrealized gains on unaffiliated investments | 171,403,464 | |||||
Net unrealized losses on futures contracts | + | (791,515 | ) | |||
Net unrealized gains | + | 170,685,750 | ||||
Net realized and unrealized gains | 209,190,476 | |||||
Increase in net assets resulting from operations | $246,911,656 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $4,078. See financial note 4 for additional information. |
22 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $37,721,180 | $26,024,188 | ||||||||
Net realized gains | 38,504,726 | 2,673,938 | ||||||||
Net unrealized gains | + | 170,685,750 | 33,110,169 | |||||||
Increase in net assets from operations | 246,911,656 | 61,808,295 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($28,518,465 | ) | ($16,798,869 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 67,538,254 | $676,863,199 | 67,864,083 | $655,800,808 | ||||||||||||||
Shares reinvested | 1,765,688 | 16,261,985 | 795,894 | 7,465,485 | ||||||||||||||
Shares redeemed | + | (43,856,574 | ) | (441,499,603 | ) | (24,620,341 | ) | (237,836,004 | ) | |||||||||
Net transactions in fund shares | 25,447,368 | $251,625,581 | 44,039,636 | $425,430,289 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 25,447,368 | 470,018,772 | 44,039,636 | 470,439,715 | |||||||||||||
End of period | 182,061,155 | $1,959,797,124 | 156,613,787 | $1,489,778,352 | ||||||||||||||
Net investment income not yet distributed | $29,130,846 | $21,991,329 |
See financial notes 23
Table of Contents
Schwab Fundamental US Small Company Index Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.11 | 10.10 | 7.88 | 6.30 | 10.36 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.15 | 0.11 | 0.09 | 0.06 | 0.05 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.88 | 0.47 | 2.19 | 1.59 | (4.04 | ) | ||||||||||||||||
Total from investment operations | 1.03 | 0.58 | 2.28 | 1.65 | (3.99 | ) | ||||||||||||||||
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 | 10.31 | 10.11 | 10.10 | 7.88 | 6.30 | |||||||||||||||||
Total return (%) | 11.37 | 5.55 | 29.07 | 26.68 | (38.73 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.32 | 2 | 0.35 | 0.35 | 0.35 | 0.35 | ||||||||||||||||
Gross operating expenses | 0.50 | 0.50 | 0.53 | 0.60 | 0.71 | |||||||||||||||||
Net investment income (loss) | 1.46 | 1.18 | 1.03 | 1.00 | 1.44 | |||||||||||||||||
Portfolio turnover rate | 92 | 3 | 35 | 41 | 29 | 37 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 619 | 563 | 412 | 298 | 131 |
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 The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included. See financial note 12.
3 Portfolio turnover would have been 29%, if rebalancing trades had not been included due to a change in the fund’s index. See financial note 12.
24 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2012
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 | 570,965,988 | 615,071,735 | ||||||||
0 | .0% | Warrants | — | 46 | ||||||||
0 | .6% | Other Investment Company | 3,574,136 | 3,574,136 | ||||||||
0 | .1% | Short-Term Investment | 461,944 | 461,944 | ||||||||
100 | .0% | Total Investments | 575,002,068 | 619,107,861 | ||||||||
3 | .6% | Collateral Invested for Securities on Loan | 22,200,866 | 22,200,866 | ||||||||
(3 | .6)% | Other Assets and Liabilities, Net | (22,364,293 | ) | ||||||||
100 | .0% | Net Assets | 618,944,434 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.3% of net assets | ||||||||||||
Automobiles & Components 1.3% | ||||||||||||
Thor Industries, Inc. | 44,500 | 0.3 | 1,692,335 | |||||||||
Other Securities | 1.0 | 6,603,878 | ||||||||||
1.3 | 8,296,213 | |||||||||||
Banks 4.5% | ||||||||||||
CapitalSource, Inc. | 238,500 | 0.3 | 1,886,535 | |||||||||
First Horizon National Corp. | 159,700 | 0.2 | 1,486,807 | |||||||||
Other Securities | 4.0 | 24,379,891 | ||||||||||
4.5 | 27,753,233 | |||||||||||
Capital Goods 12.1% | ||||||||||||
AMETEK, Inc. | 41,700 | 0.2 | 1,482,435 | |||||||||
Carlisle Cos., Inc. | 30,900 | 0.3 | 1,716,495 | |||||||||
Granite Construction, Inc. | 47,100 | 0.2 | 1,422,891 | |||||||||
Lincoln Electric Holdings, Inc. | 32,200 | 0.2 | 1,396,514 | |||||||||
Snap-on, Inc. | 24,300 | 0.3 | 1,879,119 | |||||||||
The Shaw Group, Inc. * | 45,800 | 0.3 | 2,005,582 | |||||||||
The Toro Co. | 37,520 | 0.3 | 1,584,094 | |||||||||
USG Corp. (b)* | 60,200 | 0.3 | 1,607,942 | |||||||||
Other Securities | 10.0 | 61,979,532 | ||||||||||
12.1 | 75,074,604 | |||||||||||
Commercial & Professional Supplies 4.1% | ||||||||||||
Other Securities | 4.1 | 25,692,766 | ||||||||||
Consumer Durables & Apparel 5.8% | ||||||||||||
KB Home (b) | 122,600 | 0.3 | 1,959,148 | |||||||||
Lennar Corp., Class A | 79,000 | 0.5 | 2,960,130 | |||||||||
Polaris Industries, Inc. | 16,900 | 0.2 | 1,428,050 | |||||||||
PulteGroup, Inc. * | 247,600 | 0.7 | 4,293,384 | |||||||||
PVH Corp. | 13,300 | 0.2 | 1,462,867 | |||||||||
The Ryland Group, Inc. | 63,400 | 0.3 | 2,147,358 | |||||||||
The Warnaco Group, Inc. * | 20,400 | 0.2 | 1,439,832 | |||||||||
Toll Brothers, Inc. * | 57,100 | 0.3 | 1,884,871 | |||||||||
Other Securities | 3.1 | 18,466,530 | ||||||||||
5.8 | 36,042,170 | |||||||||||
Consumer Services 4.6% | ||||||||||||
Cracker Barrel Old Country Store, Inc. | 24,920 | 0.3 | 1,586,158 | |||||||||
Domino’s Pizza, Inc. | 36,000 | 0.2 | 1,462,320 | |||||||||
Other Securities | 4.1 | 25,637,841 | ||||||||||
4.6 | 28,686,319 | |||||||||||
Diversified Financials 2.6% | ||||||||||||
Eaton Vance Corp. | 53,500 | 0.2 | 1,505,490 | |||||||||
SEI Investments Co. | 64,900 | 0.2 | 1,420,012 | |||||||||
Other Securities | 2.2 | 12,876,638 | ||||||||||
2.6 | 15,802,140 | |||||||||||
Energy 6.2% | ||||||||||||
EQT Corp. | 26,500 | 0.3 | 1,606,695 | |||||||||
Exterran Holdings, Inc. * | 114,300 | 0.4 | 2,283,714 | |||||||||
Other Securities | 5.5 | 34,436,098 | ||||||||||
6.2 | 38,326,507 | |||||||||||
Food & Staples Retailing 1.2% | ||||||||||||
Other Securities | 1.2 | 7,497,415 | ||||||||||
Food, Beverage & Tobacco 1.8% | ||||||||||||
Other Securities | 1.8 | 11,071,109 | ||||||||||
Health Care Equipment & Services 5.0% | ||||||||||||
Magellan Health Services, Inc. * | 29,000 | 0.2 | 1,454,350 | |||||||||
Other Securities | 4.8 | 29,661,012 | ||||||||||
5.0 | 31,115,362 | |||||||||||
Household & Personal Products 0.4% | ||||||||||||
Other Securities | 0.4 | 2,539,222 | ||||||||||
Insurance 4.5% | ||||||||||||
Allied World Assurance Co. Holdings AG | 21,100 | 0.3 | 1,694,330 | |||||||||
CNO Financial Group, Inc. | 167,100 | 0.3 | 1,600,818 | |||||||||
HCC Insurance Holdings, Inc. | 46,900 | 0.3 | 1,671,516 | |||||||||
Old Republic International Corp. | 159,000 | 0.3 | 1,570,920 |
See financial notes 25
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 3.3 | 21,220,511 | ||||||||||
4.5 | 27,758,095 | |||||||||||
Materials 6.3% | ||||||||||||
Crown Holdings, Inc. * | 40,600 | 0.3 | 1,552,950 | |||||||||
Cytec Industries, Inc. | 25,100 | 0.3 | 1,727,382 | |||||||||
Other Securities | 5.7 | 35,570,130 | ||||||||||
6.3 | 38,850,462 | |||||||||||
Media 2.3% | ||||||||||||
Liberty Media Corp. - Liberty Capital, Class A * | 13,600 | 0.2 | 1,518,712 | |||||||||
Other Securities | 2.1 | 12,687,118 | ||||||||||
2.3 | 14,205,830 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||||||
Covance, Inc. * | 28,900 | 0.2 | 1,407,719 | |||||||||
PerkinElmer, Inc. | 55,500 | 0.3 | 1,716,615 | |||||||||
Other Securities | 1.2 | 7,647,284 | ||||||||||
1.7 | 10,771,618 | |||||||||||
Real Estate 8.5% | ||||||||||||
General Growth Properties, Inc. | 85,200 | 0.3 | 1,675,032 | |||||||||
iStar Financial, Inc. * | 211,400 | 0.3 | 1,845,522 | |||||||||
Piedmont Office Realty Trust, Inc., Class A | 79,000 | 0.2 | 1,406,200 | |||||||||
Other Securities | 7.7 | 47,586,006 | ||||||||||
8.5 | 52,512,760 | |||||||||||
Retailing 6.1% | ||||||||||||
ANN, Inc. * | 48,500 | 0.3 | 1,705,260 | |||||||||
AutoNation, Inc. (b)* | 36,300 | 0.3 | 1,611,720 | |||||||||
Chico’s FAS, Inc. | 86,600 | 0.3 | 1,610,760 | |||||||||
Group 1 Automotive, Inc. | 27,500 | 0.3 | 1,705,275 | |||||||||
OfficeMax, Inc. | 236,100 | 0.3 | 1,735,335 | |||||||||
Saks, Inc. (b)* | 141,800 | 0.2 | 1,457,704 | |||||||||
Other Securities | 4.4 | 27,632,818 | ||||||||||
6.1 | 37,458,872 | |||||||||||
Semiconductors & Semiconductor Equipment 2.8% | ||||||||||||
Other Securities | 2.8 | 17,582,023 | ||||||||||
Software & Services 4.9% | ||||||||||||
Other Securities | 4.9 | 30,132,295 | ||||||||||
Technology Hardware & Equipment 4.2% | ||||||||||||
NCR Corp. * | 79,000 | 0.3 | 1,681,120 | |||||||||
Other Securities | 3.9 | 24,462,524 | ||||||||||
4.2 | 26,143,644 | |||||||||||
Telecommunication Services 1.3% | ||||||||||||
MetroPCS Communications, Inc. * | 138,600 | 0.2 | 1,415,106 | |||||||||
Other Securities | 1.1 | 6,338,703 | ||||||||||
1.3 | 7,753,809 | |||||||||||
Transportation 3.3% | ||||||||||||
Con-way, Inc. | 48,600 | 0.2 | 1,414,746 | |||||||||
SkyWest, Inc. | 140,800 | 0.2 | 1,541,760 | |||||||||
Other Securities | 2.9 | 17,250,714 | ||||||||||
3.3 | 20,207,220 | |||||||||||
Utilities 3.8% | ||||||||||||
Vectren Corp. | 51,300 | 0.2 | 1,516,941 | |||||||||
Other Securities | 3.6 | 22,281,106 | ||||||||||
3.8 | 23,798,047 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $570,965,988) | 615,071,735 | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Energy 0.0% | ||||||||||||
Other Securities | 0.0 | 46 | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | 46 | |||||||||||
Other Investment Company 0.6% of net assets | ||||||||||||
Money Market Fund 0.6% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund | 3,574,136 | 0.6 | 3,574,136 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $3,574,136) | 3,574,136 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 461,944 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $461,944) | 461,944 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 3.6% of net assets | ||||||||||||
�� | ||||||||||||
State Street Institutional U.S. Government Money Market Fund | 22,200,866 | 3.6 | 22,200,866 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $22,200,866) | 22,200,866 | |||||||||||
End of Collateral Invested for Securities on Loan. |
26 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
At 10/31/12 the tax basis cost of the fund’s investments was $577,427,922 and the unrealized appreciation and depreciation were $70,863,797 and ($29,183,858), respectively, with a net unrealized appreciation of $41,679,939.
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 $441,245 or 0.1% of net assets. | |
(e) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust. |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/21/12 | 40 | 3,265,200 | (74,586 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $539,997,131 | $— | $— | $539,997,131 | ||||||||||||
Capital Goods | 74,633,405 | — | 441,199 | 75,074,604 | ||||||||||||
Warrants | 46 | — | — | 46 | ||||||||||||
Other Investment Company1 | 3,574,136 | — | — | 3,574,136 | ||||||||||||
Short-Term Investments1 | — | 461,944 | — | 461,944 | ||||||||||||
Total | $618,204,718 | $461,944 | $441,199 | $619,107,861 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $22,200,866 | $— | $— | $22,200,866 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($74,586 | ) | $— | $— | ($74,586 | ) |
1 | As categorized in complete schedule of holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | $40,139 | ($593,218 | ) | $793,935 | $215,508 | ($15,165 | ) | $— | $— | $441,199 | ||||||||||||||||||||||
Rights | 6,053 | 217 | (6,053 | ) | — | (217 | ) | — | — | — | ||||||||||||||||||||||
Total | $46,192 | ($593,001 | ) | $787,882 | $215,508 | ($15,382 | ) | $— | $— | $441,199 | ||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was $225,691.
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 27
Table of Contents
Schwab Fundamental US Small Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $575,002,068) including securities on loan of $22,451,989 | $619,107,861 | |||||
Foreign currency, at value (cost $34) | 30 | |||||
Collateral invested for securities on loan | 22,200,866 | |||||
Receivables: | ||||||
Fund shares sold | 479,953 | |||||
Dividends | 317,745 | |||||
Income from securities on loan | 74,653 | |||||
Due from broker for futures | 17,600 | |||||
Interest | 94 | |||||
Prepaid expenses | + | 12,187 | ||||
Total assets | 642,210,989 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 22,200,866 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 25,403 | |||||
Fund shares redeemed | 863,019 | |||||
Accrued expenses | + | 177,267 | ||||
Total liabilities | 23,266,555 | |||||
Net Assets | ||||||
Total assets | 642,210,989 | |||||
Total liabilities | − | 23,266,555 | ||||
Net assets | $618,944,434 | |||||
Net Assets by Source | ||||||
Capital received from investors | 518,976,798 | |||||
Net investment income not yet distributed | 7,645,395 | |||||
Net realized capital gains | 48,291,034 | |||||
Net unrealized capital gains | 44,031,207 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$618,944,434 | 60,008,861 | $10.31 |
28 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $4,142) | $9,213,350 | |||||
Interest | 3,909 | |||||
Securities on loan | + | 1,531,820 | ||||
Total investment income | 10,749,079 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,728,635 | |||||
Shareholder service fees | 514,693 | |||||
Index fee | 363,886 | |||||
Transfer agent fees | 110,806 | |||||
Portfolio accounting fees | 64,633 | |||||
Registration fees | 52,577 | |||||
Shareholder reports | 49,424 | |||||
Professional fees | 46,488 | |||||
Custodian fees | 45,719 | |||||
Trustees’ fees | 9,697 | |||||
Interest expense | 369 | |||||
State filing fee reimbursement (Note 4) | (4,131 | ) | ||||
Other expenses | + | 15,693 | ||||
Total expenses | 2,998,489 | |||||
Expense reduction by CSIM and its affiliates1 | − | 1,071,672 | ||||
Custody credits | − | 57 | ||||
Net expenses | − | 1,926,760 | ||||
Net investment income | 8,822,319 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 56,361,298 | |||||
Net realized losses on futures contracts | + | (215,312 | ) | |||
Net realized gains | 56,145,986 | |||||
Net unrealized losses on investments | (3,761,277 | ) | ||||
Net unrealized losses on futures contracts | (393,275 | ) | ||||
Net unrealized gains on foreign currency translations | + | 2 | ||||
Net unrealized losses | + | (4,154,550 | ) | |||
Net realized and unrealized gains | 51,991,436 | |||||
Increase in net assets resulting from operations | $60,813,755 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $4,131. See financial note 4 for additional information. |
See financial notes 29
Table of Contents
Schwab Fundamental US Small Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $8,822,319 | $6,660,972 | ||||||||
Net realized gains | 56,145,986 | 36,178,006 | ||||||||
Net unrealized losses | + | (4,154,550 | ) | (22,432,154 | ) | |||||
Increase in net assets from operations | 60,813,755 | 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
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 15,451,067 | $154,128,648 | 28,330,596 | $298,407,637 | ||||||||||||||
Shares reinvested | 1,892,528 | 17,089,526 | 863,850 | 9,079,063 | ||||||||||||||
Shares redeemed | + | (13,017,996 | ) | (130,341,328 | ) | (14,343,010 | ) | (150,006,790 | ) | |||||||||
Net transactions in fund shares | 4,325,599 | $40,876,846 | 14,851,436 | $157,479,910 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 4,325,599 | 55,783,064 | 14,851,436 | 150,822,148 | |||||||||||||
End of period | 60,008,861 | $618,944,434 | 55,683,262 | $563,161,370 | ||||||||||||||
Net investment income not yet distributed | $7,645,395 | $4,811,321 |
30 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 7.26 | 8.09 | 7.69 | 6.01 | 11.40 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.23 | 0.21 | 0.16 | 0.28 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.08 | )2 | (0.85 | ) | 0.41 | 1.81 | (5.56 | ) | ||||||||||||||
Total from investment operations | 0.14 | (0.62 | ) | 0.62 | 1.97 | (5.28 | ) | |||||||||||||||
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 | 7.16 | 7.26 | 8.09 | 7.69 | 6.01 | |||||||||||||||||
Total return (%) | 2.24 | (7.88 | ) | 8.27 | 34.89 | (46.70 | ) | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.31 | 3 | 0.35 | 0.35 | 0.35 | 0.35 | ||||||||||||||||
Gross operating expenses | 0.56 | 0.57 | 0.61 | 0.76 | 0.74 | |||||||||||||||||
Net investment income (loss) | 3.58 | 3.24 | 2.70 | 2.80 | 3.41 | |||||||||||||||||
Portfolio turnover rate | 61 | 4 | 35 | 65 | 82 | 74 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 501 | 372 | 301 | 253 | 145 |
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 The per share amount does not accord with the change in aggregate gains and losses in securities during the period because of the timing of fund transactions in relation to fluctuating market values.
3 The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included. See financial note 12.
4 Portfolio turnover would have been 37%, if rebalancing trades had not been included due to a change in the fund’s index. See financial note 12.
See financial notes 31
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2012
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .1% | Common Stock | 490,085,799 | 490,995,014 | ||||||||
0 | .4% | Preferred Stock | 1,412,454 | 2,225,322 | ||||||||
0 | .0% | Rights | — | 30,003 | ||||||||
1 | .2% | Other Investment Company | 5,336,587 | 5,892,700 | ||||||||
0 | .1% | Short-Term Investment | 430,011 | 430,011 | ||||||||
99 | .8% | Total Investments | 497,264,851 | 499,573,050 | ||||||||
0 | .1% | Collateral Invested for Securities on Loan | 664,945 | 664,945 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 342,932 | |||||||||
100 | .0% | Net Assets | 500,580,927 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.1% of net assets | ||||||||||||
Australia 4.7% | ||||||||||||
BHP Billiton Ltd. | 86,105 | 0.6 | 3,048,583 | |||||||||
Other Securities | 4.1 | 20,599,384 | ||||||||||
4.7 | 23,647,967 | |||||||||||
Austria 0.4% | ||||||||||||
Other Securities | 0.4 | 2,108,737 | ||||||||||
Belgium 0.9% | ||||||||||||
Other Securities | 0.9 | 4,697,326 | ||||||||||
Canada 6.3% | ||||||||||||
Encana Corp. | 100,909 | 0.5 | 2,273,294 | |||||||||
Other Securities | 5.8 | 29,364,481 | ||||||||||
6.3 | 31,637,775 | |||||||||||
China 0.0% | ||||||||||||
Other Securities | 0.0 | 6,079 | ||||||||||
Denmark 0.7% | ||||||||||||
Other Securities | 0.7 | 3,242,817 | ||||||||||
Finland 1.2% | ||||||||||||
Nokia Oyj | 860,431 | 0.5 | 2,313,258 | |||||||||
Other Securities | 0.7 | 3,818,223 | ||||||||||
1.2 | 6,131,481 | |||||||||||
France 10.9% | ||||||||||||
AXA S.A. | 140,870 | 0.4 | 2,245,285 | |||||||||
BNP Paribas S.A. | 63,860 | 0.6 | 3,221,415 | |||||||||
Carrefour S.A. | 87,075 | 0.4 | 2,102,916 | |||||||||
France Telecom S.A. | 297,503 | 0.7 | 3,325,342 | |||||||||
GDF Suez | 88,671 | 0.4 | 2,035,207 | |||||||||
Sanofi | 47,096 | 0.8 | 4,136,320 | |||||||||
Societe Generale S.A. * | 65,201 | 0.4 | 2,079,397 | |||||||||
Total S.A. | 193,008 | 1.9 | 9,721,853 | |||||||||
Vivendi S.A. | 120,426 | 0.5 | 2,467,696 | |||||||||
Other Securities | 4.8 | 23,383,066 | ||||||||||
10.9 | 54,718,497 | |||||||||||
Germany 9.0% | ||||||||||||
Allianz SE - Reg’d | 28,745 | 0.7 | 3,570,858 | |||||||||
BASF SE | 50,269 | 0.8 | 4,169,830 | |||||||||
Bayer AG - Reg’d | 30,255 | 0.5 | 2,638,026 | |||||||||
Daimler AG - Reg’d | 76,336 | 0.7 | 3,575,947 | |||||||||
Deutsche Bank AG - Reg’d | 42,577 | 0.4 | 1,939,428 | |||||||||
Deutsche Telekom AG - Reg’d | 310,803 | 0.7 | 3,545,795 | |||||||||
E.ON AG | 181,684 | 0.8 | 4,136,050 | |||||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 12,277 | 0.4 | 1,975,412 | |||||||||
RWE AG | 51,343 | 0.5 | 2,349,697 | |||||||||
Siemens AG - Reg’d | 33,497 | 0.7 | 3,375,121 | |||||||||
Other Securities | 2.8 | 13,667,715 | ||||||||||
9.0 | 44,943,879 | |||||||||||
Greece 0.6% | ||||||||||||
Other Securities | 0.6 | 2,739,383 | ||||||||||
Hong Kong 0.8% | ||||||||||||
Other Securities | 0.8 | 4,146,173 | ||||||||||
Ireland 0.7% | ||||||||||||
Other Securities | 0.7 | 3,628,379 | ||||||||||
Israel 0.3% | ||||||||||||
Other Securities | 0.3 | 1,496,792 | ||||||||||
Italy 4.0% | ||||||||||||
Enel S.p.A. | 705,699 | 0.5 | 2,657,483 | |||||||||
Eni S.p.A. | 206,430 | 0.9 | 4,750,142 | |||||||||
Intesa Sanpaolo S.p.A. | 1,229,513 | 0.4 | 1,980,613 | |||||||||
UniCredit S.p.A. * | 506,718 | 0.4 | 2,241,300 | |||||||||
Other Securities | 1.8 | 8,501,350 | ||||||||||
4.0 | 20,130,888 |
32 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Japan 17.7% | ||||||||||||
Honda Motor Co., Ltd. | 76,900 | 0.5 | 2,311,862 | |||||||||
Nippon Telegraph & Telephone Corp. | 44,104 | 0.4 | 2,016,792 | |||||||||
Toyota Motor Corp. | 129,400 | 1.0 | 4,989,295 | |||||||||
Other Securities | 15.8 | 79,048,873 | ||||||||||
17.7 | 88,366,822 | |||||||||||
Luxembourg 0.0% | ||||||||||||
Other Securities | 0.0 | 120,868 | ||||||||||
Netherlands 6.2% | ||||||||||||
ING Groep N.V. CVA * | 831,745 | 1.5 | 7,400,972 | |||||||||
Royal Dutch Shell plc, Class A | 267,907 | 1.8 | 9,184,191 | |||||||||
Other Securities | 2.9 | 14,301,714 | ||||||||||
6.2 | 30,886,877 | |||||||||||
New Zealand 0.1% | ||||||||||||
Other Securities | 0.1 | 641,708 | ||||||||||
Norway 0.9% | ||||||||||||
Other Securities | 0.9 | 4,532,784 | ||||||||||
Portugal 0.3% | ||||||||||||
Other Securities | 0.3 | 1,312,638 | ||||||||||
Singapore 0.7% | ||||||||||||
Other Securities | 0.7 | 3,481,684 | ||||||||||
Spain 3.9% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 352,597 | 0.6 | 2,946,281 | |||||||||
Banco Santander S.A. | 715,646 | 1.1 | 5,388,245 | |||||||||
Telefonica S.A. | 346,662 | 0.9 | 4,575,517 | |||||||||
Other Securities | 1.3 | 6,332,405 | ||||||||||
3.9 | 19,242,448 | |||||||||||
Sweden 2.4% | ||||||||||||
Other Securities | 2.4 | 12,200,966 | ||||||||||
Switzerland 5.4% | ||||||||||||
Nestle S.A. - Reg’d | 86,813 | 1.1 | 5,511,599 | |||||||||
Novartis AG - Reg’d | 61,676 | 0.7 | 3,719,096 | |||||||||
Roche Holding AG | 15,063 | 0.6 | 2,901,512 | |||||||||
Other Securities | 3.0 | 14,786,831 | ||||||||||
5.4 | 26,919,038 | |||||||||||
United Kingdom 20.0% | ||||||||||||
Anglo American plc | 79,095 | 0.5 | 2,437,250 | |||||||||
AstraZeneca plc | 75,056 | 0.7 | 3,480,703 | |||||||||
Barclays plc | 812,155 | 0.6 | 3,003,130 | |||||||||
BP plc | 1,928,270 | 2.8 | 13,770,924 | |||||||||
British American Tobacco plc | 45,303 | 0.4 | 2,247,009 | |||||||||
BT Group plc | 556,703 | 0.4 | 1,913,157 | |||||||||
GlaxoSmithKline plc | 220,580 | 1.0 | 4,942,632 | |||||||||
HSBC Holdings plc | 779,778 | 1.5 | 7,688,052 | |||||||||
Rio Tinto plc | 38,280 | 0.4 | 1,912,331 | |||||||||
Royal Dutch Shell plc, B Shares | 196,692 | 1.4 | 6,957,468 | |||||||||
Tesco plc | 512,724 | 0.5 | 2,653,054 | |||||||||
Vodafone Group plc | 2,526,553 | 1.4 | 6,861,187 | |||||||||
Other Securities | 8.4 | 42,146,111 | ||||||||||
20.0 | 100,013,008 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $490,085,799) | 490,995,014 | |||||||||||
Preferred Stock 0.4% of net assets | ||||||||||||
Germany 0.4% | ||||||||||||
Other Securities | 0.4 | 2,178,283 | ||||||||||
Italy 0.0% | ||||||||||||
Other Securities | 0.0 | 41,661 | ||||||||||
United Kingdom 0.0% | ||||||||||||
Other Securities | 0.0 | 5,378 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $1,412,454) | 2,225,322 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Hong Kong 0.0% | ||||||||||||
Other Securities | 0.0 | 30,003 | ||||||||||
Total Rights | ||||||||||||
(Cost $—) | 30,003 | |||||||||||
Other Investment Company 1.2% of net assets | ||||||||||||
United States 1.2% | ||||||||||||
iShares MSCI EAFE Index Fund | 110,000 | 1.2 | 5,892,700 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $5,336,587) | 5,892,700 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
Time Deposit 0.1% | ||||||||||||
Other Securities | 0.1 | 430,011 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $430,011) | 430,011 | |||||||||||
End of Investments. | ||||||||||||
See financial notes 33
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.1% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund | 664,945 | 0.1 | 664,945 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $664,945) | 664,945 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12, the tax basis cost of the fund’s investments was $522,514,272 and the unrealized appreciation and depreciation were $24,959,942 and ($47,901,164), respectively, with a net unrealized depreciation of ($22,941,222).
At 10/31/12, the values of certain foreign securities held by the fund aggregating $456,582,540 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 $6,079 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. |
ADR — | American Depositary Receipt | |
CVA — | Dutch Certificate | |
Reg’d — | Registered | |
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 October 31, 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 Stock1 | $— | $273,471,861 | $— | $273,471,861 | ||||||||||||
Belgium | 229,156 | 4,468,170 | — | 4,697,326 | ||||||||||||
Canada | 31,637,775 | — | — | 31,637,775 | ||||||||||||
China | — | — | 6,079 | 6,079 | ||||||||||||
Greece | 248,596 | 2,490,787 | — | 2,739,383 | ||||||||||||
Ireland | 1,018,137 | 2,610,242 | — | 3,628,379 | ||||||||||||
Netherlands | 317,376 | 30,569,501 | — | 30,886,877 | ||||||||||||
Portugal | 619,490 | 693,148 | — | 1,312,638 | ||||||||||||
Singapore | 328,890 | 3,152,794 | — | 3,481,684 | ||||||||||||
Sweden | 253,440 | 11,947,526 | — | 12,200,966 | ||||||||||||
Switzerland | 1,439,290 | 25,479,748 | — | 26,919,038 | ||||||||||||
United Kingdom | 534,189 | 99,478,819 | — | 100,013,008 | ||||||||||||
Preferred Stock1 | — | 2,219,944 | — | 2,219,944 | ||||||||||||
United Kingdom | — | — | 5,378 | 5,378 | ||||||||||||
Rights1 | — | — | 30,003 | 30,003 | ||||||||||||
Other Investment Company1 | 5,892,700 | — | — | 5,892,700 | ||||||||||||
Short-Term Investments1 | — | 430,011 | — | 430,011 | ||||||||||||
Total | $42,519,039 | $457,012,551 | $41,460 | $499,573,050 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $664,945 | $— | $— | $664,945 |
1 | As categorized in complete schedule of holdings. |
34 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Canada | $27,028 | $— | ($27,028 | ) | $— | $— | $— | $— | $— | |||||||||||||||||||||||
China | 24,258 | — | (18,179 | ) | — | — | — | — | 6,079 | |||||||||||||||||||||||
United Kingdom | 4,188 | (74 | ) | (22 | ) | — | (4,092 | ) | — | — | — | |||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
United Kingdom | — | — | 63 | 5,315 | — | — | — | 5,378 | ||||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||
Hong Kong | 20,125 | 9,267 | 9,878 | — | (9,267 | ) | — | — | 30,003 | |||||||||||||||||||||||
Republic of Korea | 1,790 | 647 | (1,790 | ) | — | (647 | ) | — | — | — | ||||||||||||||||||||||
Total | $77,389 | $9,840 | ($37,078 | ) | $5,315 | ($14,006 | ) | $— | $— | $41,460 | ||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was ($15,140).
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $433,730 and $943,456 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended October 31, 2012. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation by the fund. There were no transfers in or out of Level 3 securities during the period.
See financial notes 35
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $497,264,851) including securities on loan of $632,287 | $499,573,050 | |||||
Foreign currency, at value (cost $56) | 58 | |||||
Collateral invested for securities on loan | 664,945 | |||||
Receivables: | ||||||
Dividends | 1,173,759 | |||||
Fund shares sold | 485,707 | |||||
Foreign tax reclaims | 156,003 | |||||
Income from securities on loan | 4,027 | |||||
Prepaid expenses | + | 8,000 | ||||
Total assets | 502,065,549 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 664,945 | |||||
Payables: | ||||||
Investments bought | 5,379 | |||||
Investment adviser and administrator fees | 12,970 | |||||
Fund shares redeemed | 672,793 | |||||
Accrued expenses | + | 128,535 | ||||
Total liabilities | 1,484,622 | |||||
Net Assets | ||||||
Total assets | 502,065,549 | |||||
Total liabilities | − | 1,484,622 | ||||
Net assets | $500,580,927 | |||||
Net Assets by Source | ||||||
Capital received from investors | 612,633,260 | |||||
Net investment income not yet distributed | 12,490,163 | |||||
Net realized capital losses | (126,825,121 | ) | ||||
Net unrealized capital gains | 2,282,625 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$500,580,927 | 69,937,790 | $7.16 |
36 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,344,973) | $15,220,404 | |||||
Interest | 528 | |||||
Securities on loan | + | 481,877 | ||||
Total investment income | 15,702,809 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,207,789 | |||||
Shareholder service fees | 344,236 | |||||
Index fee | 241,988 | |||||
Custodian fees | 172,900 | |||||
Portfolio accounting fees | 82,036 | |||||
Transfer agent fees | 56,714 | |||||
Professional fees | 49,126 | |||||
Registration fees | 42,649 | |||||
Shareholder reports | 17,195 | |||||
Trustees’ fees | 8,226 | |||||
Interest expense | 1,800 | |||||
State filing fee reimbursement (Note 4) | (3,605 | ) | ||||
Other expenses | + | 29,472 | ||||
Total expenses | 2,250,526 | |||||
Expense reduction by CSIM and its affiliates1 | − | 988,108 | ||||
Net expenses | − | 1,262,418 | ||||
Net investment income | 14,440,391 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on investments | (12,790,618 | ) | ||||
Net realized losses on foreign currency transactions | + | (98,870 | ) | |||
Net realized losses | (12,889,488 | ) | ||||
Net unrealized gains on investments | 16,039,508 | |||||
Net unrealized losses on foreign currency translations | + | (11,683 | ) | |||
Net unrealized gains | + | 16,027,825 | ||||
Net realized and unrealized gains | 3,138,337 | |||||
Increase in net assets resulting from operations | $17,578,728 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $3,605. See financial note 4 for additional information. |
See financial notes 37
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $14,440,391 | $11,287,685 | ||||||||
Net realized gains (losses) | (12,889,488 | ) | 3,313,328 | |||||||
Net unrealized gains (losses) | + | 16,027,825 | (43,691,063 | ) | ||||||
Increase (Decrease) in net assets from operations | 17,578,728 | (29,090,050 | ) | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($12,260,320 | ) | ($8,005,998 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 35,480,423 | $237,479,009 | 22,477,614 | $174,921,214 | ||||||||||||||
Shares reinvested | 1,363,648 | 9,013,714 | 755,041 | 5,964,829 | ||||||||||||||
Shares redeemed | + | (18,197,244 | ) | (123,492,196 | ) | (9,127,025 | ) | (72,203,924 | ) | |||||||||
Net transactions in fund shares | 18,646,827 | $123,000,527 | 14,105,630 | $108,682,119 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 18,646,827 | 128,318,935 | 14,105,630 | 71,586,071 | |||||||||||||
End of period | 69,937,790 | $500,580,927 | 51,290,963 | $372,261,992 | ||||||||||||||
Net investment income not yet distributed | $12,490,163 | $9,453,672 |
38 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 1/31/082– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
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) | 0.21 | 3 | 0.24 | 3 | 0.16 | 3 | 0.12 | 3 | 0.27 | 3 | ||||||||||||
Net realized and unrealized gains (losses) | 0.03 | (0.40 | ) | 1.09 | 2.92 | (4.05 | ) | |||||||||||||||
Total from investment operations | 0.24 | (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 | 9.13 | 9.53 | 9.96 | 9.00 | 6.22 | |||||||||||||||||
Total return (%) | 3.13 | (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 | 7,8 | |||||||||||||||
Gross operating expenses | 0.92 | 5 | 0.99 | 1.07 | 3.82 | 5.44 | 8 | |||||||||||||||
Net investment income (loss) | 2.42 | 2.29 | 1.77 | 1.59 | 3.55 | 8 | ||||||||||||||||
Portfolio turnover rate | 89 | 9 | 63 | 63 | 81 | 132 | 4 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 90 | 93 | 74 | 47 | 3 |
1 Effective October 19, 2009, the Investor Share class, the Select Share class and the Institutional Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Calculated based on the average shares outstanding during the period.
4 Not annualized.
5 The net operating and gross operating expense ratios would have been 0.50% and 0.97%, respectively, if vendor payments had not been included.
6 The ratio of net operating expenses would have been 0.51%, if voluntary waiver by CSIM had not been included. See financial note 12.
7 The ratio of net operating expenses would have been 0.55%, if interest expenses had not been incurred.
8 Annualized.
9 Portfolio turnover would have been 48%, if rebalancing trades had not been included due to a change in the fund’s index. See financial note 12.
See financial notes 39
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2012
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 | .5% | Common Stock | 85,502,542 | 88,117,980 | ||||||||
0 | .4% | Preferred Stock | 328,969 | 403,448 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
1 | .6% | Other Investment Companies | 1,433,979 | 1,409,952 | ||||||||
0 | .2% | Short-Term Investment | 148,489 | 148,489 | ||||||||
99 | .7% | Total Investments | 87,413,979 | 90,079,869 | ||||||||
1 | .3% | Collateral Invested for Securities on Loan | 1,156,931 | 1,156,931 | ||||||||
(1 | .0)% | Other Assets and Liabilities, Net | (897,438 | ) | ||||||||
100 | .0% | Net Assets | 90,339,362 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 97.5% of net assets | ||||||||||||
Australia 4.6% | ||||||||||||
Sydney Airport | 46,956 | 0.2 | 165,158 | |||||||||
Other Securities | 4.4 | 3,953,301 | ||||||||||
4.6 | 4,118,459 | |||||||||||
Austria 0.9% | ||||||||||||
Andritz AG | 2,558 | 0.2 | 154,141 | |||||||||
Other Securities | 0.7 | 615,085 | ||||||||||
0.9 | 769,226 | |||||||||||
Belgium 1.2% | ||||||||||||
Other Securities | 1.2 | 1,068,339 | ||||||||||
Canada 8.5% | ||||||||||||
Atco Ltd., Class I | 2,100 | 0.2 | 155,153 | |||||||||
CI Financial Corp. | 7,000 | 0.2 | 163,584 | |||||||||
Pembina Pipeline Corp. | 9,200 | 0.3 | 257,278 | |||||||||
Superior Plus Corp. | 17,400 | 0.2 | 170,037 | |||||||||
West Fraser Timber Co., Ltd. | 2,823 | 0.2 | 170,977 | |||||||||
Other Securities | 7.4 | 6,799,949 | ||||||||||
8.5 | 7,716,978 | |||||||||||
Denmark 1.4% | ||||||||||||
Other Securities | 1.4 | 1,262,530 | ||||||||||
Finland 2.0% | ||||||||||||
Huhtamaki Oyj | 9,575 | 0.2 | 161,892 | |||||||||
YIT Oyj | 8,139 | 0.2 | 160,494 | |||||||||
Other Securities | 1.6 | 1,490,151 | ||||||||||
2.0 | 1,812,537 | |||||||||||
France 5.1% | ||||||||||||
AtoS | 2,945 | 0.2 | 197,733 | |||||||||
Teleperformance | 5,690 | 0.2 | 172,298 | |||||||||
Other Securities | 4.7 | 4,253,981 | ||||||||||
5.1 | 4,624,012 | |||||||||||
Germany 3.2% | ||||||||||||
Symrise AG | 4,474 | 0.2 | 160,932 | |||||||||
Other Securities | 3.0 | 2,698,110 | ||||||||||
3.2 | 2,859,042 | |||||||||||
Greece 0.7% | ||||||||||||
Eurobank Ergasias S.A. * | 188,000 | 0.2 | 219,072 | |||||||||
Other Securities | 0.5 | 412,680 | ||||||||||
0.7 | 631,752 | |||||||||||
Hong Kong 3.5% | ||||||||||||
Jardine Strategic Holdings Ltd. | 4,500 | 0.2 | 163,347 | |||||||||
New World Development Co., Ltd. | 120,000 | 0.2 | 184,630 | |||||||||
Sun Hung Kai Properties Ltd. | 20,000 | 0.3 | 276,479 | |||||||||
The Link REIT | 34,000 | 0.2 | 168,958 | |||||||||
Other Securities | 2.6 | 2,341,828 | ||||||||||
3.5 | 3,135,242 | |||||||||||
Ireland 0.9% | ||||||||||||
Grafton Group plc | 36,877 | 0.2 | 161,175 | |||||||||
Other Securities | 0.7 | 661,140 | ||||||||||
0.9 | 822,315 | |||||||||||
Israel 1.0% | ||||||||||||
Other Securities | 1.0 | 898,514 | ||||||||||
Italy 2.7% | ||||||||||||
Parmalat S.p.A. | 69,159 | 0.2 | 156,738 | |||||||||
Pirelli & C. S.p.A. | 13,992 | 0.2 | 162,540 | |||||||||
Other Securities | 2.3 | 2,101,962 | ||||||||||
2.7 | 2,421,240 | |||||||||||
Japan 34.3% | ||||||||||||
Acom Co., Ltd. * | 5,400 | 0.2 | 159,563 | |||||||||
Aiful Corp. (a)* | 63,200 | 0.2 | 173,346 | |||||||||
Canon Marketing Japan, Inc. | 11,200 | 0.2 | 163,234 | |||||||||
Chugai Pharmaceutical Co., Ltd. | 8,000 | 0.2 | 162,090 | |||||||||
COMSYS Holdings Corp. | 12,900 | 0.2 | 171,486 |
40 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Hino Motors Ltd. | 21,000 | 0.2 | 162,327 | |||||||||
Odakyu Electric Railway Co., Ltd. | 16,000 | 0.2 | 169,772 | |||||||||
Shinsei Bank Ltd. | 124,000 | 0.2 | 181,796 | |||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 51,000 | 0.2 | 154,775 | |||||||||
Tokyu Land Corp. | 29,000 | 0.2 | 162,804 | |||||||||
Other Securities | 32.3 | 29,349,602 | ||||||||||
34.3 | 31,010,795 | |||||||||||
Luxembourg 0.4% | ||||||||||||
Other Securities | 0.4 | 354,849 | ||||||||||
Netherlands 1.9% | ||||||||||||
Gemalto N.V. | 2,009 | 0.2 | 181,454 | |||||||||
Other Securities | 1.7 | 1,573,655 | ||||||||||
1.9 | 1,755,109 | |||||||||||
New Zealand 0.4% | ||||||||||||
Other Securities | 0.4 | 349,435 | ||||||||||
Norway 1.2% | ||||||||||||
Petroleum Geo-Services A.S.A. | 11,455 | 0.2 | 197,937 | |||||||||
Other Securities | 1.0 | 902,751 | ||||||||||
1.2 | 1,100,688 | |||||||||||
Portugal 0.5% | ||||||||||||
Other Securities | 0.5 | 496,620 | ||||||||||
Republic of Korea 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Singapore 1.9% | ||||||||||||
Capitaland Ltd. | 65,000 | 0.2 | 173,105 | |||||||||
Jardine Cycle & Carriage Ltd. | 4,000 | 0.2 | 160,939 | |||||||||
Other Securities | 1.5 | 1,417,625 | ||||||||||
1.9 | 1,751,669 | |||||||||||
Spain 2.1% | ||||||||||||
Amadeus IT Holding S.A., A Shares | 7,800 | 0.2 | 193,224 | |||||||||
Other Securities | 1.9 | 1,722,094 | ||||||||||
2.1 | 1,915,318 | |||||||||||
Sweden 2.4% | ||||||||||||
Other Securities | 2.4 | 2,125,533 | ||||||||||
Switzerland 2.7% | ||||||||||||
Sulzer AG - Reg’d | 1,094 | 0.2 | 158,638 | |||||||||
Other Securities | 2.5 | 2,317,185 | ||||||||||
2.7 | 2,475,823 | |||||||||||
United Kingdom 14.0% | ||||||||||||
Ashtead Group plc | 31,376 | 0.2 | 189,551 | |||||||||
Bellway plc | 12,661 | 0.2 | 206,960 | |||||||||
Berendsen plc | 18,326 | 0.2 | 166,641 | |||||||||
Debenhams plc | 109,048 | 0.2 | 211,117 | |||||||||
DS Smith plc | 46,724 | 0.2 | 161,312 | |||||||||
Evraz plc | 43,597 | 0.2 | 166,347 | |||||||||
Hiscox Ltd. | 20,700 | 0.2 | 160,643 | |||||||||
Invensys plc | 42,177 | 0.2 | 155,516 | |||||||||
Ladbrokes plc | 63,734 | 0.2 | 184,599 | |||||||||
Mitchells & Butlers plc * | 38,824 | 0.2 | 205,428 | |||||||||
Premier Foods plc * | 101,310 | 0.2 | 174,840 | |||||||||
Provident Financial plc | 7,404 | 0.2 | 164,108 | |||||||||
QinetiQ Group plc | 48,798 | 0.2 | 155,420 | |||||||||
Other Securities | 11.4 | 10,339,473 | ||||||||||
14.0 | 12,641,955 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $85,502,542) | 88,117,980 | |||||||||||
Preferred Stock 0.4% of net assets | ||||||||||||
Germany 0.4% | ||||||||||||
Other Securities | 0.4 | 402,340 | ||||||||||
United Kingdom 0.0% | ||||||||||||
Other Securities | 0.0 | 1,108 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $328,969) | 403,448 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Norway 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 Companies 1.6% of net assets | ||||||||||||
Australia 0.1% | ||||||||||||
Other Securities | 0.1 | 44,952 | ||||||||||
United States 1.5% | ||||||||||||
iShares MSCI EAFE Small Cap Index Fund | 35,000 | 1.5 | 1,365,000 | |||||||||
Total Other Investment Companies | ||||||||||||
(Cost $1,433,979) | 1,409,952 | |||||||||||
See financial notes 41
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.2% of net assets | ||||||||||||
Time Deposit 0.2% | ||||||||||||
Other Securities | 0.2 | 148,489 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $148,489) | 148,489 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 1.3% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund | 1,156,931 | 1.3 | 1,156,931 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $1,156,931) | 1,156,931 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12, the tax basis cost of the fund’s investments was $88,835,770 and the unrealized appreciation and depreciation were $8,399,844 and ($7,155,745), respectively, with a net unrealized appreciation of $1,244,099.
At 10/31/12, the values of certain foreign securities held by the fund aggregating $75,602,890 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 $4,930 or 0.0% of net assets. |
ADR — | American Depositary Receipt | |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
42 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $— | $349,435 | $— | $349,435 | ||||||||||||
Australia | 47,255 | 4,071,204 | — | 4,118,459 | ||||||||||||
Austria | 135,974 | 633,252 | — | 769,226 | ||||||||||||
Belgium | 544,574 | 523,765 | — | 1,068,339 | ||||||||||||
Canada | 7,716,978 | — | — | 7,716,978 | ||||||||||||
Denmark | 55,563 | 1,206,967 | — | 1,262,530 | ||||||||||||
Finland | 83,202 | 1,729,335 | — | 1,812,537 | ||||||||||||
France | 259,474 | 4,364,538 | — | 4,624,012 | ||||||||||||
Germany | 386,448 | 2,472,594 | — | 2,859,042 | ||||||||||||
Greece | 90,000 | 541,752 | — | 631,752 | ||||||||||||
Hong Kong | 34,914 | 3,100,328 | — | 3,135,242 | ||||||||||||
Ireland | 414,481 | 407,834 | — | 822,315 | ||||||||||||
Israel | 115,778 | 782,736 | — | 898,514 | ||||||||||||
Italy | 71,699 | 2,349,541 | — | 2,421,240 | ||||||||||||
Japan | 205,456 | 30,805,339 | — | 31,010,795 | ||||||||||||
Luxembourg | 230,820 | 124,029 | — | 354,849 | ||||||||||||
Netherlands | 126,119 | 1,624,060 | 4,930 | 1,755,109 | ||||||||||||
Norway | 38,367 | 1,062,321 | — | 1,100,688 | ||||||||||||
Portugal | 172,934 | 323,686 | — | 496,620 | ||||||||||||
Republic of Korea | — | — | — | — | ||||||||||||
Singapore | — | 1,724,370 | 27,299 | 1,751,669 | ||||||||||||
Spain | 82,688 | 1,832,630 | — | 1,915,318 | ||||||||||||
Sweden | 223,429 | 1,902,104 | — | 2,125,533 | ||||||||||||
Switzerland | 441,386 | 2,034,437 | — | 2,475,823 | ||||||||||||
United Kingdom | 1,452,614 | 11,189,341 | — | 12,641,955 | ||||||||||||
Preferred Stock1 | — | 402,340 | — | 402,340 | ||||||||||||
United Kingdom | — | — | 1,108 | 1,108 | ||||||||||||
Rights1 | — | — | — | — | ||||||||||||
Warrants1 | — | — | — | — | ||||||||||||
Other Investment Companies1 | — | 44,952 | — | 44,952 | ||||||||||||
United States | 1,365,000 | — | — | 1,365,000 | ||||||||||||
Short-Term Investments1 | — | 148,489 | — | 148,489 | ||||||||||||
Total | $14,295,153 | $75,751,379 | $33,337 | $90,079,869 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $1,156,931 | $— | $— | $1,156,931 |
1 | As categorized in complete schedule of holdings. |
See financial notes 43
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Australia | $— | ($13,386 | ) | ($40,369 | ) | $11,291 | ($6,685 | ) | $49,149 | $— | $— | |||||||||||||||||||||
Greece | — | (21,470 | ) | 9,541 | — | (1,272 | ) | 13,201 | — | — | ||||||||||||||||||||||
Netherlands | 9,824 | — | (4,894 | ) | — | — | — | — | 4,930 | |||||||||||||||||||||||
Republic of Korea | 124,137 | (94,366 | ) | 35,790 | 26,692 | (92,253 | ) | — | — | — | ||||||||||||||||||||||
Singapore | — | (2,533 | ) | (5,281 | ) | — | (5,982 | ) | 41,095 | — | 27,299 | |||||||||||||||||||||
Spain | — | — | (10,410 | ) | — | — | 10,410 | — | — | |||||||||||||||||||||||
Sweden | 64,107 | 21,795 | (22,704 | ) | — | (63,198 | ) | — | — | — | ||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
United Kingdom | 1,741 | (5 | ) | 12 | 1,100 | (1,740 | ) | — | — | 1,108 | ||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||
Australia | 3,656 | 935 | (3,656 | ) | — | (935 | ) | — | — | — | ||||||||||||||||||||||
Republic of Korea | 9,073 | 3,350 | (9,073 | ) | — | (3,350 | ) | — | — | — | ||||||||||||||||||||||
Total | $212,538 | ($105,680 | ) | ($51,044 | ) | $39,083 | ($175,415 | ) | $113,855 | $— | $33,337 | |||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was ($103,053).
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012. The transfers in the amount of $70,042 and $2,731,036 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, were primarily due to the use of international fair valuation by the fund. The 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.
44 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $87,413,979) including securities on loan of $1,038,601 | $90,079,869 | |||||
Foreign currency, at value (cost $49) | 48 | |||||
Collateral invested for securities on loan | 1,156,931 | |||||
Receivables: | ||||||
Dividends | 262,750 | |||||
Fund shares sold | 101,978 | |||||
Foreign tax reclaims | 29,234 | |||||
Income from securities on loan | 6,787 | |||||
Due from investment adviser | 4,213 | |||||
Prepaid expenses | + | 1,761 | ||||
Total assets | 91,643,571 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 1,156,931 | |||||
Payables: | ||||||
Shareholder service fees | 154 | |||||
Fund shares redeemed | 37,318 | |||||
Accrued expenses | + | 109,806 | ||||
Total liabilities | 1,304,209 | |||||
Net Assets | ||||||
Total assets | 91,643,571 | |||||
Total liabilities | − | 1,304,209 | ||||
Net assets | $90,339,362 | |||||
Net Assets by Source | ||||||
Capital received from investors | 91,084,485 | |||||
Net investment income not yet distributed | 2,170,780 | |||||
Net realized capital losses | (5,576,747 | ) | ||||
Net unrealized capital gains | 2,660,844 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$90,339,362 | 9,897,946 | $9.13 |
See financial notes 45
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $220,536) | $2,537,930 | |||||
Interest | 171 | |||||
Securities on loan | + | 110,059 | ||||
Total investment income | 2,648,160 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 367,897 | |||||
Shareholder service fees | 67,282 | |||||
Custodian fees | 115,171 | |||||
Portfolio accounting fees | 81,890 | |||||
Transfer agent fees | 48,910 | |||||
Professional fees | 47,513 | |||||
Index fee1 | 44,961 | |||||
Registration fees | 24,683 | |||||
Shareholder reports | 11,498 | |||||
Trustees’ fees | 6,341 | |||||
Interest expense | 535 | |||||
State filing fee reimbursement (Note 4) | (187 | ) | ||||
Other expenses | + | 31,863 | ||||
Total expenses | 848,357 | |||||
Expense reduction by CSIM and its affiliates2 | − | 424,355 | ||||
Net expenses | − | 424,002 | ||||
Net investment income | 2,224,158 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on investments | (3,929,058 | ) | ||||
Net realized gains on foreign currency transactions | + | 7,458 | ||||
Net realized losses | (3,921,600 | ) | ||||
Net unrealized gains on investments | 3,997,215 | |||||
Net unrealized losses on foreign currency translations | + | (1,403 | ) | |||
Net unrealized gains | + | 3,995,812 | ||||
Net realized and unrealized gains | 74,212 | |||||
Increase in net assets resulting from operations | $2,298,370 |
1 | Index fees are net of vendor payments of $40,000. | |
2 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $187. See financial note 4 for additional information. |
46 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $2,224,158 | $2,100,406 | ||||||||
Net realized gains (losses) | (3,921,600 | ) | 4,379,938 | |||||||
Net unrealized gains (losses) | + | 3,995,812 | (9,760,905 | ) | ||||||
Increase (Decrease) in net assets from operations | 2,298,370 | (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
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,585,058 | $31,904,834 | 4,357,124 | $45,080,122 | ||||||||||||||
Shares reinvested | 531,718 | 4,487,698 | 127,659 | 1,268,928 | ||||||||||||||
Shares redeemed | + | (3,924,070 | ) | (34,465,493 | ) | (2,197,870 | ) | (22,426,178 | ) | |||||||||
Net transactions in fund shares | 192,706 | $1,927,039 | 2,286,913 | $23,922,872 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 or decrease | + | 192,706 | (2,168,710 | ) | 2,286,913 | 18,634,300 | ||||||||||||
End of period | 9,897,946 | $90,339,362 | 9,705,240 | $92,508,072 | ||||||||||||||
Net investment income not yet distributed | $2,170,780 | $1,370,750 |
See financial notes 47
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 1/31/082– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
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) | 0.25 | 0.24 | 0.17 | 0.05 | 0.16 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.17 | ) | (1.37 | ) | 1.81 | 3.27 | (4.42 | ) | ||||||||||||||
Total from investment operations | 0.08 | (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 | 8.86 | 9.17 | 10.81 | 8.91 | 5.74 | |||||||||||||||||
Total return (%) | 1.18 | (10.99 | ) | 22.36 | 59.55 | (42.60 | )3 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.56 | 4 | 0.61 | 5 | 0.61 | 5 | 0.61 | 5 | 0.61 | 5,6 | ||||||||||||
Gross operating expenses | 0.91 | 0.91 | 0.98 | 1.70 | 4.06 | 6 | ||||||||||||||||
Net investment income (loss) | 2.75 | 2.51 | 2.31 | 1.56 | 2.31 | 6 | ||||||||||||||||
Portfolio turnover rate | 86 | 7 | 56 | 91 | 103 | 159 | 3 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 314 | 310 | 294 | 119 | 6 |
1 Effective October 19, 2009, the Investor Share class, the Select Share and the Institutional Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Not annualized.
4 The ratio of net operating expenses would have been 0.60%, if interest expenses and voluntary waiver by CSIM (see financial note 12) had not been included.
5 The ratio of net operating expenses would have been 0.60%, if interest expenses had not been incurred.
6 Annualized.
7 Portfolio turnover would have been 51%, if rebalancing trades had not been included due to a change in the fund’s index. See financial note 12.
48 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2012
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 | ($) | ($) | ||||||||||
89 | .5% | Common Stock | 281,228,570 | 281,193,050 | ||||||||
7 | .8% | Preferred Stock | 29,042,525 | 24,397,537 | ||||||||
2 | .6% | Other Investment Company | 8,142,635 | 8,222,000 | ||||||||
0 | .0% | Short-Term Investment | 18,822 | 18,822 | ||||||||
99 | .9% | Total Investments | 318,432,552 | 313,831,409 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 374,328 | |||||||||
100 | .0% | Net Assets | 314,205,737 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 89.5% of net assets | ||||||||||||
Brazil 4.9% | ||||||||||||
Petroleo Brasileiro S.A. - Petrobras | 486,700 | 1.6 | 5,152,040 | |||||||||
Vale S.A. | 130,900 | 0.8 | 2,413,631 | |||||||||
Other Securities | 2.5 | 7,767,941 | ||||||||||
4.9 | 15,333,612 | |||||||||||
Chile 0.7% | ||||||||||||
Other Securities | 0.7 | 2,085,982 | ||||||||||
China 11.0% | ||||||||||||
Bank of China Ltd., Class H | 6,768,234 | 0.9 | 2,772,825 | |||||||||
China Construction Bank Corp., Class H | 6,088,000 | 1.5 | 4,563,965 | |||||||||
China Mobile Ltd. | 541,500 | 1.9 | 6,006,176 | |||||||||
China Petroleum & Chemical Corp., Class H | 3,212,000 | 1.1 | 3,385,053 | |||||||||
CNOOC Ltd. | 1,215,000 | 0.8 | 2,500,441 | |||||||||
Industrial & Commercial Bank of China Ltd., Class H | 4,366,172 | 0.9 | 2,875,120 | |||||||||
PetroChina Co., Ltd., Class H | 2,639,000 | 1.1 | 3,580,906 | |||||||||
Other Securities | 2.8 | 8,916,837 | ||||||||||
11.0 | 34,601,323 | |||||||||||
Colombia 0.3% | ||||||||||||
Other Securities | 0.3 | 830,978 | ||||||||||
Czech Republic 0.7% | ||||||||||||
Other Securities | 0.7 | 2,127,930 | ||||||||||
Egypt 0.3% | ||||||||||||
Other Securities | 0.3 | 784,188 | ||||||||||
Hungary 0.9% | ||||||||||||
Other Securities | 0.9 | 2,754,515 | ||||||||||
India 2.9% | ||||||||||||
Reliance Industries Ltd. | 185,874 | 0.9 | 2,773,456 | |||||||||
Other Securities | 2.0 | 6,302,588 | ||||||||||
2.9 | 9,076,044 | |||||||||||
Indonesia 0.7% | ||||||||||||
Other Securities | 0.7 | 2,291,586 | ||||||||||
Malaysia 1.5% | ||||||||||||
Other Securities | 1.5 | 4,834,741 | ||||||||||
Mexico 4.2% | ||||||||||||
America Movil S.A.B. de C.V., Series L | 2,722,600 | 1.1 | 3,457,831 | |||||||||
Cemex S.A.B. de C.V., Series CPO * | 3,920,000 | 1.1 | 3,553,566 | |||||||||
Other Securities | 2.0 | 6,288,876 | ||||||||||
4.2 | 13,300,273 | |||||||||||
Poland 2.2% | ||||||||||||
Polski Koncern Naftowy Orlen S.A. * | 142,760 | 0.6 | 1,956,620 | |||||||||
Other Securities | 1.6 | 5,074,650 | ||||||||||
2.2 | 7,031,270 | |||||||||||
Republic of Korea 21.2% | ||||||||||||
Hyundai Motor Co. | 16,200 | 1.1 | 3,329,401 | |||||||||
Korea Electric Power Corp. * | 100,400 | 0.8 | 2,604,172 | |||||||||
KT Corp. | 58,200 | 0.6 | 1,975,686 | |||||||||
LG Corp. | 65,800 | 1.3 | 4,012,856 | |||||||||
LG Display Co., Ltd. * | 74,000 | 0.7 | 2,196,132 | |||||||||
LG Electronics, Inc. | 44,700 | 1.0 | 3,109,860 | |||||||||
POSCO | 15,300 | 1.5 | 4,809,623 | |||||||||
Samsung Electronics Co., Ltd. | 11,500 | 4.4 | 13,800,430 | |||||||||
Shinhan Financial Group Co., Ltd. | 53,500 | 0.6 | 1,836,249 | |||||||||
SK Holdings Co., Ltd. | 18,500 | 0.8 | 2,574,960 | |||||||||
SK Innovation Co., Ltd. | 12,700 | 0.6 | 1,866,727 | |||||||||
SK Telecom Co., Ltd. | 12,500 | 0.6 | 1,765,699 | |||||||||
Other Securities | 7.2 | 22,805,087 | ||||||||||
21.2 | 66,686,882 | |||||||||||
Russia 15.0% | ||||||||||||
Gazprom ADR | 1,291,900 | 3.8 | 11,866,083 | |||||||||
LUKOIL ADR | 251,535 | 4.9 | 15,265,230 | |||||||||
Mining & Metallurgical Co. Norilsk Nickel OJSC ADR | 162,116 | 0.8 | 2,491,808 |
See financial notes 49
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Mobile TeleSystems ADR | 90,651 | 0.5 | 1,553,758 | |||||||||
Rosneft Oil Co. GDR - Reg’d | 287,147 | 0.7 | 2,133,587 | |||||||||
Sberbank of Russia ADR | 182,894 | 0.7 | 2,162,803 | |||||||||
Surgutneftegaz ADR | 737,788 | 2.1 | 6,456,292 | |||||||||
Tatneft ADR | 55,840 | 0.7 | 2,171,345 | |||||||||
Other Securities | 0.8 | 3,159,110 | ||||||||||
15.0 | 47,260,016 | |||||||||||
South Africa 6.9% | ||||||||||||
MTN Group Ltd. | 178,860 | 1.0 | 3,231,903 | |||||||||
Sasol Ltd. | 78,806 | 1.1 | 3,357,141 | |||||||||
Other Securities | 4.8 | 14,934,253 | ||||||||||
6.9 | 21,523,297 | |||||||||||
Taiwan 13.0% | ||||||||||||
Asustek Computer, Inc. | 222,041 | 0.8 | 2,375,491 | |||||||||
AU Optronics Corp. * | 4,331,800 | 0.5 | 1,639,889 | |||||||||
China Steel Corp. | 2,018,544 | 0.6 | 1,733,274 | |||||||||
Chunghwa Telecom Co., Ltd. | 552,906 | 0.6 | 1,729,982 | |||||||||
Formosa Chemicals & Fibre Corp. | 654,420 | 0.5 | 1,548,652 | |||||||||
Hon Hai Precision Industry Co., Ltd. | 1,509,546 | 1.5 | 4,576,997 | |||||||||
Nan Ya Plastics Corp. | 924,160 | 0.5 | 1,627,677 | |||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1,949,689 | 1.9 | 5,940,818 | |||||||||
Other Securities | 6.1 | 19,823,041 | ||||||||||
13.0 | 40,995,821 | |||||||||||
Thailand 1.0% | ||||||||||||
PTT PCL | 151,787 | 0.5 | 1,574,821 | |||||||||
Other Securities | 0.5 | 1,546,986 | ||||||||||
1.0 | 3,121,807 | |||||||||||
Turkey 1.9% | ||||||||||||
Other Securities | 1.9 | 5,999,778 | ||||||||||
United Arab Emirates 0.2% | ||||||||||||
Other Securities | 0.2 | 553,007 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $281,228,570) | 281,193,050 | |||||||||||
Preferred Stock 7.8% of net assets | ||||||||||||
Brazil 7.0% | ||||||||||||
Banco Bradesco S.A. | 132,678 | 0.7 | 2,090,395 | |||||||||
Itau Unibanco Holding S.A. | 198,000 | 0.9 | 2,895,350 | |||||||||
Petroleo Brasileiro S.A. | 543,100 | 1.8 | 5,561,892 | |||||||||
Vale S.A., Class A | 172,000 | 1.0 | 3,078,309 | |||||||||
Other Securities | 2.6 | 8,301,279 | ||||||||||
7.0 | 21,927,225 | |||||||||||
Colombia 0.1% | ||||||||||||
Other Securities | 0.1 | 293,514 | ||||||||||
Republic of Korea 0.7% | ||||||||||||
Samsung Electronics Co., Ltd. | 2,100 | 0.5 | 1,524,471 | |||||||||
Other Securities | 0.2 | 652,327 | ||||||||||
0.7 | 2,176,798 | |||||||||||
Total Preferred Stock | ||||||||||||
(Cost $29,042,525) | 24,397,537 | |||||||||||
Other Investment Company 2.6% of net assets | ||||||||||||
United States 2.6% | ||||||||||||
iShares MSCI Emerging Markets Index Fund | 200,000 | 2.6 | 8,222,000 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $8,142,635) | 8,222,000 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.0% of net assets | ||||||||||||
Time Deposit 0.0% | ||||||||||||
Other Securities | 0.0 | 18,822 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $18,822) | 18,822 | |||||||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $322,899,341 and the unrealized appreciation and depreciation were $20,489,368 and ($29,557,300), respectively, with a net unrealized depreciation of ($9,067,932).
At 10/31/12, the values of certain foreign securities held by the fund aggregating $243,755,579 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. |
ADR — | American Depositary Receipt | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered |
50 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Common Stock1 | $— | $174,824,967 | $— | $174,824,967 | ||||||||||||
Brazil | 15,333,612 | — | — | 15,333,612 | ||||||||||||
Chile | 2,085,982 | — | — | 2,085,982 | ||||||||||||
Colombia | 830,978 | — | — | 830,978 | ||||||||||||
Czech Republic | 2,127,930 | — | — | 2,127,930 | ||||||||||||
Egypt | 784,188 | — | — | 784,188 | ||||||||||||
Mexico | 13,300,273 | — | — | 13,300,273 | ||||||||||||
Russia | 1,553,758 | 45,706,258 | — | 47,260,016 | ||||||||||||
South Africa | 475,741 | 21,047,556 | — | 21,523,297 | ||||||||||||
Thailand | 3,121,807 | — | — | 3,121,807 | ||||||||||||
Preferred Stock1 | — | 2,176,798 | — | 2,176,798 | ||||||||||||
Brazil | 21,927,225 | — | — | 21,927,225 | ||||||||||||
Colombia | 293,514 | — | — | 293,514 | ||||||||||||
Other Investment Company1 | 8,222,000 | — | — | 8,222,000 | ||||||||||||
Short-Term Investments1 | — | 18,822 | — | 18,822 | ||||||||||||
Total | $70,057,008 | $243,774,401 | $— | $313,831,409 | ||||||||||||
1 | As categorized in complete schedule of holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $341,657 and $2,463,314 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended October 31, 2012. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation by the fund. There were no transfers in or out of Level 3 securities during the period.
See financial notes 51
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $318,432,552) | $313,831,409 | |||||
Foreign currency, at value (cost $261,861) | 261,872 | |||||
Receivables: | ||||||
Investments sold | 410,991 | |||||
Fund shares sold | 581,296 | |||||
Dividends | 216,986 | |||||
Foreign tax reclaims | 3,809 | |||||
Income from securities on loan | 1,263 | |||||
Prepaid expenses | + | 5,692 | ||||
Total assets | 315,313,318 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 4,233 | |||||
Fund shares redeemed | 917,870 | |||||
Accrued expenses | + | 185,478 | ||||
Total liabilities | 1,107,581 | |||||
Net Assets | ||||||
Total assets | 315,313,318 | |||||
Total liabilities | − | 1,107,581 | ||||
Net assets | $314,205,737 | |||||
Net Assets by Source | ||||||
Capital received from investors | 326,365,347 | |||||
Net investment income not yet distributed | 7,501,592 | |||||
Net realized capital losses | (15,059,155 | ) | ||||
Net unrealized capital losses | (4,602,047 | ) | ||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$314,205,737 | 35,480,110 | $8.86 |
52 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,434,156) | $10,498,291 | |||||
Interest | 329 | |||||
Securities on loan | + | 22,835 | ||||
Total investment income | 10,521,455 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,590,196 | |||||
Shareholder service fees | 218,832 | |||||
Custodian fees | 355,059 | |||||
Index fee | 319,187 | |||||
Transfer agent fees | 112,235 | |||||
Registration fees | 76,669 | |||||
Portfolio accounting fees | 72,794 | |||||
Professional fees | 49,295 | |||||
Interest expense | 27,360 | |||||
Shareholder reports | 20,999 | |||||
Trustees’ fees | 7,918 | |||||
State filing fee reimbursement (Note 4) | (2,033 | ) | ||||
Other expenses | + | 36,551 | ||||
Total expenses | 2,885,062 | |||||
Expense reduction by CSIM and its affiliates1 | − | 1,110,402 | ||||
Net expenses | − | 1,774,660 | ||||
Net investment income | 8,746,795 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on investments (net of foreign capital gain tax of $94,067) | (10,038,109 | ) | ||||
Net realized losses on foreign currency transactions | + | (458,176 | ) | |||
Net realized losses | (10,496,285 | ) | ||||
Net unrealized gains on investments | 1,929,461 | |||||
Net unrealized losses on foreign currency translations | + | (14,508 | ) | |||
Net unrealized gains | + | 1,914,953 | ||||
Net realized and unrealized losses | (8,581,332 | ) | ||||
Increase in net assets resulting from operations | $165,463 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $2,033. See financial note 4 for additional information. |
See financial notes 53
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Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $8,746,795 | $7,932,589 | ||||||||
Net realized gains (losses) | (10,496,285 | ) | 4,801,593 | |||||||
Net unrealized gains (losses) | + | 1,914,953 | (50,393,763 | ) | ||||||
Increase (Decrease) in net assets from operations | 165,463 | (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
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 17,148,007 | $151,059,085 | 17,110,504 | $176,362,625 | ||||||||||||||
Shares reinvested | 938,276 | 7,843,989 | 806,425 | 8,346,494 | ||||||||||||||
Shares redeemed | + | (16,432,968 | ) | (141,900,887 | ) | (11,306,201 | ) | (117,012,298 | ) | |||||||||
Net transactions in fund shares | 1,653,315 | $17,002,187 | 6,610,728 | $67,696,821 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 1,653,315 | 3,871,374 | 6,610,728 | 15,998,876 | |||||||||||||
End of period | 35,480,110 | $314,205,737 | 33,826,795 | $310,334,363 | ||||||||||||||
Net investment income not yet distributed | $7,501,592 | $6,702,195 |
54 See financial notes
Table of Contents
Schwab Fundamental Index Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”) a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) | Schwab Balanced Fund | |||
Schwab Fundamental US Large Company Index Fund | Schwab Core Equity Fund | |||
Schwab Fundamental US Small Company Index Fund | Schwab Dividend Equity Fund | |||
(formerly Schwab Fundamental US Small-Mid Company Index Fund) | Schwab Large-Cap Growth Fund | |||
Schwab Fundamental International Large Company Index Fund | Schwab Small-Cap Equity Fund | |||
Schwab Fundamental International Small Company Index Fund | Schwab Hedged Equity Fund | |||
(formerly Schwab Fundamental International Small-Mid Company Index Fund) | Schwab Financial Services Fund | |||
Schwab Fundamental Emerging Markets Large Company Index Fund | Schwab Health Care Fund | |||
(formerly Schwab Fundamental Emerging Markets Index 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 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 | |||
Effective on October 19, 2012, the Schwab Fundamental US Small-Mid Company Index Fund, Schwab Fundamental International Small-Mid Company Index Fund and Schwab Fundamental Emerging Markets Index Fund changed their names to Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund, respectively. Please refer to note 12 for more details.
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 funds’ Board of Trustees (the “Board”) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
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:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported at halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below. |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
• | Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the procedures. | |
• | International fair valuation: The Board 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 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 forward 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. 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 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 |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
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 levels associated with valuing the funds’ investments as of October 31, 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 (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 forwards is accounted for as unrealized gains or losses until the contracts settle, at which time the gains or losses are realized.
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to have a value of at least 102% of the prior day’s market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities and is marked to market daily. The cash collateral of securities loaned is invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Securities lending income, as disclosed in a fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent which are subject to adjustments pursuant to the securities lending agreement.
If applicable, the value of the securities on loan as of October 31, 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, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than
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Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations 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. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures 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 GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies. 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 and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds
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Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2012, if any, are reflected in the funds’ Statements 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 December 2011, Accounting Standards Update (“ASU”) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities,” was issued and is effective for interim and annual periods beginning after January 1, 2013. The ASU enhances disclosure requirements with respect to an entity’s rights of offset and related arrangements associated with its financial and derivative instruments. Management is currently evaluating the impact the adoption of ASU 2011-11 may have on the funds’ financial statement disclosures.
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 the investment in a fund will fluctuate, which means that the investors 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 index, 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 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
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Financial Notes (continued)
3. Risk Factors (continued):
companies may be based in substantial part on future expectations rather than current achievements and may move sharply, especially during market upturns and downturns. During a period when mid- and small-cap stocks fall behind other types of investments — bonds or large-cap stocks, for instance — a fund’s small- and mid-cap holdings could reduce performance.
A fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs.
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. 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 exchange-traded funds (“ETF’’) 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.
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.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
For its advisory and administrative services to the following funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Fundamental | ||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Emerging | ||||||||||||||||
Fundamental | Fundamental | International | International | Markets | ||||||||||||||||
US Large | US Small | Large | Small | Large | ||||||||||||||||
Company | Company | Company | Company | Company | ||||||||||||||||
% 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 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 its affiliates 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 Board, 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 | Fundamental | ||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Emerging | ||||||||||||||
Fundamental | Fundamental | International | International | Markets | ||||||||||||||
US Large | US Small | Large | Small | Large | ||||||||||||||
Company | Company | Company | Company | Company | ||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||
0.35% | 0.35% | 0.35% | 0.55% | 0.60% |
Effective October 19, 2012, CSIM entered into a license agreement with Frank Russell Company to use certain Russell indices 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 Russell indices and trademarks to the funds. Under the sub-license agreement, each fund pays its pro rata share of licensing fees. Prior to October 19, 2012, the funds had a license agreement to use FTSE indices. See note 12 for additional information.
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Financial Notes (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 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 | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Schwab Fundamental US Large Company Index Fund | 94,515 | 55,000 | (4,300 | ) | 145,215 | $1,972,020 | ($25,779 | ) | $28,786 |
Certain other related parties may own shares of Schwab funds in this report. As of October 31, 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 9.6%.
The funds may engage in direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended October 31, 2012, each fund’s total aggregate security transactions with other Schwab Funds were as follows:
Schwab Fundamental US Large Company Index Fund | $149,986,004 | |||
Schwab Fundamental US Small Company Index Fund | 149,986,004 | |||
Schwab Fundamental International Large Company Index Fund | — | |||
Schwab Fundamental International Small Company Index Fund | — | |||
Schwab Fundamental Emerging Markets Large Company 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 by the Board. The funds had no interfund borrowing or lending activity during the period.
During the period, the Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund received a payment of $4,078, $4,131, $3,605, $187 and $2,033, respectively, related to state filing fees resulting from revised fee calculation methodologies being applied on sales of the funds’ shares in prior periods in certain states. These payments are presented in each fund’s Statement of Operations as “State filing fee reimbursement”.
All or a portion of the state filing fees were previously borne by CSIM through a waiver of CSIM’s management fee. As this expense was previously waived, the payments received during the period had the effect of decreasing the total “Expense reduction by CSIM and its affiliates” in each fund’s Statement of Operations. The current net operating expense ratio was not impacted by this payment.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. 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
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Schwab Fundamental Index Funds
Financial Notes (continued)
6. Board of Trustees (continued):
limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 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 | $828,159,188 | $565,610,342 | ||||||
Schwab Fundamental US Small Company Index Fund | 571,092,636 | 550,565,482 | ||||||
Schwab Fundamental International Large Company Index Fund | 371,738,206 | 246,577,106 | ||||||
Schwab Fundamental International Small Company Index Fund | 81,570,321 | 82,898,375 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 286,774,257 | 273,232,869 |
9. Derivatives:
Certain funds entered into equity index futures contracts (“futures”) during the report period. The funds invested in futures to equitize available cash. The fair value and due to brokers for futures contracts held at October 31, 2012 and the net realized/unrealized gains (losses) on futures contracts held during the period ended October 31, 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 month-end average values of futures contracts held by the funds and the month-end average number of contracts held were as follows:
Contract Values | Number of Contracts | |||||||
Schwab Fundamental US Large Company Index Fund | $13,838,950 | 203 | ||||||
Schwab Fundamental US Small Company Index Fund | 3,315,082 | 42 | ||||||
Schwab Fundamental International Large Company Index Fund | — | — | ||||||
Schwab Fundamental International Small Company Index Fund | — | — | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | — | — |
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Financial Notes (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 | |||||||
(11/1/11-10/31/12) | (11/1/10-10/31/11) | |||||||
Schwab Fundamental US Large Company Index Fund | $30,160 | $18,099 | ||||||
Schwab Fundamental US Small Company Index Fund | 6,059 | 10,864 | ||||||
Schwab Fundamental International Large Company Index Fund | 6,070 | 9,544 | ||||||
Schwab Fundamental International Small Company Index Fund | 850 | 3,703 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 9,049 | 15,248 |
11. Federal Income Taxes:
As of October 31, 2012, the components of distributable earnings on a tax-basis were as follows:
Schwab | Schwab | Schwab | ||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Fundamental | ||||||||||||||||
Fundamental | Fundamental | International | International | Emerging | ||||||||||||||||
US Large | US Small | Large | Small | Markets Large | ||||||||||||||||
Company | Company | Company | Company | Company | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Undistributed ordinary income | $28,835,585 | $7,709,936 | $13,715,953 | $2,825,843 | $7,761,844 | |||||||||||||||
Undistributed long-term capital gains | — | 50,577,759 | — | — | — | |||||||||||||||
Unrealized appreciation on investments | 299,509,514 | 70,863,797 | 24,959,942 | 8,399,844 | 20,489,368 | |||||||||||||||
Unrealized depreciation on investments | (49,494,596 | ) | (29,183,858 | ) | (47,901,164 | ) | (7,155,745 | ) | (29,557,300 | ) | ||||||||||
Other unrealized appreciation/(depreciation) | 1 | 2 | (25,574 | ) | (5,046 | ) | (904 | ) | ||||||||||||
Net unrealized appreciation/(depreciation) | $250,014,919 | $41,679,941 | ($22,966,796 | ) | $1,239,053 | ($9,068,836 | ) | |||||||||||||
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2012, the following funds had capital loss carryforwards available to offset future net capital gains before the expiration dates:
Schwab | Schwab | Schwab | ||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Fundamental | ||||||||||||||||
Fundamental | Fundamental | International | International | Emerging | ||||||||||||||||
US Large | US Small | Large | Small | Markets Large | ||||||||||||||||
Company | Company | Company | Company | Company | ||||||||||||||||
Expiration Date | Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||
October 31, 2016 | $255,601 | $— | $6,761,375 | $— | $— | |||||||||||||||
October 31, 2017 | 63,611,979 | — | 58,777,944 | — | — | |||||||||||||||
October 31, 2018 | — | — | 20,948,477 | — | — | |||||||||||||||
No expiration | — | — | 16,313,694 | 4,810,006 | 10,852,615 | |||||||||||||||
Total | $63,867,580 | $— | $102,801,490 | $4,810,006 | $10,852,615 | |||||||||||||||
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Schwab Fundamental Index Funds
Financial Notes (continued)
11. Federal Income Taxes (continued):
For the year ended October 31, 2012, the funds had capital losses utilized as follows:
Schwab | Schwab | Schwab | ||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Fundamental | ||||||||||||||||
Fundamental | Fundamental | International | International | Emerging | ||||||||||||||||
US Large | US Small | Large | Small | Markets Large | ||||||||||||||||
Company | Company | Company | Company | Company | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Capital losses utilized | $40,159,384 | $— | $— | $— | $— |
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Schwab | Schwab | Schwab | ||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Fundamental | ||||||||||||||||
Fundamental | Fundamental | International | International | Emerging | ||||||||||||||||
US Large | US Small | Large | Small | Markets Large | ||||||||||||||||
Company | Company | Company | Company | Company | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $28,518,465 | $15,388,818 | $12,260,320 | $4,093,832 | $10,735,039 | |||||||||||||||
Long-term capital gains | — | 30,518,719 | — | 2,300,287 | 2,561,237 | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $16,798,869 | $21,827,248 | $8,005,998 | $2,008,011 | $9,872,229 | |||||||||||||||
Long-term capital gains | — | 5,237,338 | — | — | 4,166,135 | |||||||||||||||
Return of capital | — | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2012, the funds made the following reclassifications:
Schwab | Schwab | Schwab | ||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Fundamental | ||||||||||||||||
Fundamental | Fundamental | International | International | Emerging | ||||||||||||||||
US Large | US Small | Large | Small | Markets Large | ||||||||||||||||
Company | Company | Company | Company | Company | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Capital shares | $— | $2,841,729 | $9 | $— | $— | |||||||||||||||
Undistributed net investment income | (2,063,198 | ) | 670,943 | 856,420 | 1,069,301 | (406,327 | ) | |||||||||||||
Net realized capital gains/(losses) | 2,063,198 | (3,512,672 | ) | (856,429 | ) | (1,069,301 | ) | 406,327 |
As of October 31, 2012, 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, 2012, the funds did not incur any interest or penalties.
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Schwab Fundamental Index Funds
Financial Notes (continued)
11. Federal Income Taxes (continued):
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. However, such losses must be utilized prior to the pre-enactment capital losses, which increases the likelihood that the pre-enactment capital losses will expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital loss, 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.
The funds have adopted the noted provisions of the Act for the period ending October 31, 2012.
12. Other:
At a meeting held on August 1, 2012, the Board approved a change to each fund’s comparative index from a FTSE RAFI Index to a Russell Fundamental Index (each an “Index”) as well as corresponding changes to (1) each fund’s investment objective such that each fund will seek to track the total return of its respective Index, and (2) each fund’s investment strategy to require each fund to invest 90% (80% in the case of Schwab Fundamental Emerging Markets Large Company Index Fund) of its net assets in stocks that are included in its respective Index. In addition (as discussed in note 1), the Board also approved changing the name of Schwab Fundamental US Small-Mid Company Index Fund, Schwab Fundamental International Small-Mid Company Index Fund and Schwab Fundamental Emerging Markets Index Fund to more closely align the name of each fund to that of its respective Index. These changes were effective on October 19, 2012.
Further, to help offset the costs of these changes to the funds, CSIM has agreed to voluntarily waive each fund’s net operating expenses to 0.00% (excluding interest, taxes, and certain non-routine expenses) from October 1, 2012 through October 31, 2012. CSIM agreed to extend this voluntary waiver for certain funds as follows: (1) from November 1, 2012 through November 15, 2012 for Schwab Fundamental International Large Company Index Fund; (2) from November 1, 2012 through December 15, 2012 for Schwab Fundamental International Small Company Index Fund; and (3) from November 1, 2012 through November 30, 2012 for Schwab Fundamental Emerging Markets Large Company Index Fund.
13. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund (formerly “Schwab Fundamental US
Small-Mid Company Index Fund”)
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund (formerly “Schwab
Fundamental International Small-Mid Company Index Fund”)
Schwab Fundamental Emerging Markets Large Company Index Fund (formerly “Schwab
Fundamental Emerging Markets Index Fund”)
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund (five of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2012, and the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 14, 2012
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Other Federal Tax Information (unaudited)
The funds elect to pass through under section 853 of the Internal Revenue Code foreign tax credit to its shareholders for the year ended October 31, 2012, and the respective foreign source income on the funds as follows.
Foreign Tax Credit | Foreign Source Income | |||||||
Schwab Fundamental US Large Company Index Fund | $— | $— | ||||||
Schwab Fundamental US Small Company Index Fund | — | — | ||||||
Schwab Fundamental International Large Company Index Fund | 1,339,418 | 16,495,366 | ||||||
Schwab Fundamental International Small Company Index Fund | 214,235 | 2,755,301 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 1,384,949 | 11,915,202 |
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2012, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Fundamental US Large Company Index Fund | 100.00 | ||||
Schwab Fundamental US Small Company Index Fund | 19.56 | ||||
Schwab Fundamental International Large Company Index Fund | — | ||||
Schwab Fundamental International Small Company Index Fund | — | ||||
Schwab Fundamental Emerging Markets Large Company Index Fund | — |
For the fiscal year ended October 31, 2012, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2013 via IRS form 1099 of the amounts for use in preparing their 2012 income tax return.
Schwab Fundamental US Large Company Index Fund | $28,518,464 | |||
Schwab Fundamental US Small Company Index Fund | 3,221,881 | |||
Schwab Fundamental International Large Company Index Fund | 11,392,204 | |||
Schwab Fundamental International Small Company Index Fund | 2,254,182 | |||
Schwab Fundamental Emerging Markets Large Company Index Fund | 5,823,211 |
Under Section 852 (b)(3)(C) of the Internal Revenue Code, certain funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2012:
Schwab Fundamental US Large Company Index Fund | $— | |||
Schwab Fundamental US Small Company Index Fund | 33,360,448 | |||
Schwab Fundamental International Large Company Index Fund | — | |||
Schwab Fundamental International Small Company Index Fund | 2,300,287 | |||
Schwab Fundamental Emerging Markets Large Company Index Fund | 2,561,237 |
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Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at meetings held on April 24, 2012, and June 5, 2012, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 5, 2012. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that many of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and
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shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Each of Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund. These factors varied from Fund to Fund, but included one or more of the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers of 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 91 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-800-435-4000.
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. | 74 | 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). | 74 | 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). | 74 | 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. | 74 | 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). | 74 | 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). | 74 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 74 | 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. | 74 | 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. | 91 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President 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 and 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. In addition to their employment with Schwab, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation, the parent company of Schwab and the investment adviser. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays 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.
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.
FTSE RAFI Developed ex US 1000 Index An index that is designed to track the performance of the largest listed companies domiciled in developed international markets (excluding the U.S.), selected based on the following four fundamental measures: dividends, cash flows, sales and book value.
FTSE RAFI Developed ex US Mid Small 1500 Index An index that is designed to track the performance of small and mid capitalization equities of companies domiciled in developed international markets (excluding the U.S.), selected based on the following four fundamental measures: dividends, cash flows, sales and book value.
FTSE RAFI Emerging Index An index that is designed to track the performance of the largest emerging market equities, selected based on the following four fundamental measures: dividends, cash flows, sales and book value.
FTSE RAFI US 1000 Index An index that is designed to track the performance of the largest listed U.S. companies, selected based on the following four fundamental measures: dividends, cash flows, sales and book value.
FTSE RAFI US Mid Small 1500 Index An index that is designed to track the performance of small and medium-sized listed U.S. companies, selected based on the following four fundamental measures: dividends, cash flows, sales and book value.
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 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.
MSCI Emerging Markets Index A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
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.
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Russell Fundamental Developed ex-U.S. Large Company Index An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell Fundamental Developed ex-U.S. Small Company Index An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell Fundamental Emerging Markets Large Company Index An index that ranks companies in the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Emerging Markets Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Emerging Markets Index measures the performance of the investable securities in emerging countries globally.
Russell Fundamental U.S. Large Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size, and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell Fundamental U.S. Small Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
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• | APPLICATION AND REGISTRATION INFORMATION. |
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Schwab Funds® direct investors: 1-800-407-0256
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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 Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large Company* Index Fund
Schwab Fundamental US Small Company* Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small Company Index Fund
Schwab Fundamental Emerging Markets* Large Company Index Fund
Schwab Global Real Estate Fundtm
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab Intermediate-Term Bond Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fund
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
P.O. Box 3812, Englewood, CO 80155–3812
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
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Annual report dated October 31, 2012, enclosed.
COMMAND PERFORMANCETM
Laudus MarketMasters Fundstm
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Annual Report October 31, 2012 | ![]() |
COMMAND PERFORMANCETM
Laudus MarketMasters Fundstm
Laudus Small-Cap MarketMasters Fundtm
Laudus International MarketMasters Fundtm
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Two distinct Funds, each combining the expertise of leading
investment managers with CSIM’s overall supervision.
In This Report
2 | ||
3 | ||
5 | ||
Performance and Fund Facts | ||
6 | ||
8 | ||
10 | ||
11 | ||
29 | ||
58 | ||
69 | ||
70 | ||
71 | ||
75 | ||
78 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of 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.
Table of Contents
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.laudus.com/prospectus.
Total Return for the Report Period | ||||
Laudus Small-Cap MarketMasters Fundtm | ||||
Investor Shares (Ticker Symbol: SWOSX) | 9.59% | |||
Select Shares® (Ticker Symbol: SWMSX) | 9.80% | |||
Russell 2000® Index* | 12.08% | |||
Fund Category: Morningstar Small-Cap Growth | 8.95% | |||
Performance Details | pages 6-7 | |||
Laudus International MarketMasters Fundtm | ||||
Investor Shares1 (Ticker Symbol: SWOIX) | 10.05% | |||
Select Shares®1 (Ticker Symbol: SWMIX) | 10.20% | |||
MSCI EAFE Index®** | 5.15% | |||
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 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 the funds’ prospectus for further detail and eligibility requirements. |
2 Laudus MarketMasters Funds
Table of Contents
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctpchandom.jpg)
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. The Laudus MarketMasters funds combine complementary strategies from leading investment managers into single products, providing diversification across multiple investment styles.
For the 12 months ended October 31, 2012, the funds generated positive returns, while U.S. stocks outperformed international equities. Low interest rates and governmental efforts to encourage faster economic growth helped U.S. stocks generate solid returns, even as corporate earnings growth generally decelerated. The Federal Reserve extended its forecast for keeping short-term interest rates at 0-0.25% from late 2014 to mid-2015, extended “Operation Twist”—a policy of buying long-term securities and selling short-term Treasuries—and announced plans to purchase additional agency mortgage-backed securities. Small-cap stocks were generally outperformed by large-cap stocks, and value outperformed growth.
Internationally, the euro zone’s sovereign debt crisis represented an ongoing challenge, particularly for overseas equities. With concerns rising regarding elections in Greece and worries that the crisis might spread, international equities endured sharp losses in May. Subsequently, European leaders achieved meaningful progress, and overseas stocks began to recover, while the U.S. dollar finished mixed versus major international currencies, correspondingly affecting international stock returns for U.S. investors.
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.
![]() | 15.21% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 12.08% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 5.15% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.25% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.06% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctcaptst09.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and 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
Table of Contents
From the President continued
For the 12 months ended October 31, 2012, the funds generated positive returns, while U.S. stocks outperformed international equities.
Translating the performance of U.S. and international stocks into quantifiable terms, the Russell 2000 Index returned 12.1%, and in U.S. dollar terms, the MSCI EAFE Index returned 5.2%.
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 frequently asked questions or for more information about the Laudus MarketMasters Funds, please visit www.laudus.com. We are also happy to hear from you at 1-800-447-3332.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Laudus MarketMasters Funds
Table of Contents
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
Table of Contents
Laudus Small-Cap MarketMasters Fund™
The Laudus MarketMasters Funds use a multi-manager strategy. Charles Schwab Investment Management, Inc. (CSIM)—the funds’ investment manager—selects investment professionals with proven long-term track records to manage a portion of each fund’s assets. In addition to selecting investment sub-advisers and allocating assets among them, CSIM is responsible for monitoring and coordinating the overall management of the funds. Each sub-adviser manages its respective portfolio relative to a comparative index that reflects its individual process and philosophy. The sub-adviser indexes may differ from the comparative index of the overall fund.
For the 12-month period ended October 31, 2012, Investor Shares of the Laudus Small-Cap MarketMasters Fund (the fund) returned 9.59%; its comparative index, the Russell 2000 Index (the index), returned 12.08% for the same period. Unlike the fund’s return, the index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow economic growth domestically and abroad, and ongoing concerns over the European debt crisis, U.S. stock markets posted strong gains over the reporting period. After dipping in late November and December 2011, they rose strongly through April. Following weakness in May and June, stocks rose again through the summer before weakening a bit in late September and through October. Although for the reporting period, U.S. large-caps outperformed their small-cap counterparts, performance of the two followed a similar trajectory, with short periods of under- or outperformance throughout the year. For the period, the large-cap Russell 1000 Index returned 14.97%, outperforming the small-cap Russell 2000 Index by nearly 3%.
Across the fund’s index, eight of the 10 sectors posted double-digit gains. The strongest performance came from the Financials sector, followed by Consumer Discretionary, Health Care and Materials. Information Technology was relatively weak, returning less than 2%. Only Energy lost ground, down more than 9% for the period.
Positioning and Strategies. In December 2011, the fund’s board removed two of the fund’s sub-advisers—Tocqueville Asset Management and TCW Investment Management—and added Mellon Capital Management. In early October 2012, Wellington Management Company was also added as a sub-adviser to the fund. Because neither Mellon nor Wellington was on board for the full reporting period, their individual performance is not addressed here. Of the fund’s two other sub-advisers, TAMRO Capital Partners, which manages the bulk of the fund’s portfolio, posted the stronger absolute performance, but slightly underperformed its small-cap core comparative index, the Russell 2000 Index. Neuberger Berman Management, which focuses on the growth side of the small-cap universe, also slightly underperformed its comparative index, the Russell 2000 Growth Index. The fund’s overall growth bias hurt it in a period in which U.S. small-cap value outperformed growth by over 4.5%.
Looking at the fund as a whole, its underperformance of the index is attributable to several of its sector allocations, most notably its underweight in Financials and its overweight in Energy. The fund’s weak stock selection within these two sectors further dragged on its relative performance. The fund’s overweight in Consumer Discretionary, on the other hand, worked in its favor for the period, as did its overweight in Health Care. The fund’s stock selection was strong within the Information Technology and Materials sectors, contributing positively to its relative performance.
From a market-capitalization perspective, although the fund’s overweight of stocks with higher market-caps than the index worked against it for the period, its stock selection among those companies overcame the drag and contributed notably to relative performance. The fund’s underweight in stocks with the smallest market-caps also detracted, further dampened by weak selection among those stocks.
As of 10/31/12:
Statistics
Number of Holdings | 1335 | |||
Weighted Average Market Cap ($ x 1,000,000) | $1,659 | |||
Price/Earnings Ratio (P/E) | 26.5 | |||
Price/Book Ratio (P/B) | 2.2 | |||
Portfolio Turnover Rate | 144% |
Sector Weightings % of Investments
Consumer Discretionary | 18.1% | |||
Industrials | 17.8% | |||
Financials | 17.8% | |||
Information Technology | 12.8% | |||
Health Care | 12.4% | |||
Energy | 5.5% | |||
Consumer Staples | 5.2% | |||
Materials | 2.5% | |||
Utilities | 2.4% | |||
Telecommunication Services | 0.1% | |||
Other | 5.4% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Chico’s FAS, Inc. | 1.5% | |||
The Advisory Board Co. | 1.3% | |||
Portfolio Recovery Associates, Inc. | 1.3% | |||
United Natural Foods, Inc. | 1.3% | |||
Waddell & Reed Financial, Inc., Class A | 1.3% | |||
CommVault Systems, Inc. | 1.3% | |||
M.D.C. Holdings, Inc. | 1.2% | |||
Analogic Corp. | 1.2% | |||
Grand Canyon Education, Inc. | 1.2% | |||
Bank of The Ozarks, Inc. | 1.2% | |||
Total | 12.8% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Laudus MarketMasters Funds
Table of Contents
Laudus Small-Cap MarketMasters Fundtm
Performance and Fund Facts as of 10/31/12
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.laudus.com/prospectus.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctlsmf1.gif)
June 9, 2004 – October 31, 2012
Performance of Hypothetical
$50,000 Investment1
Performance of Hypothetical
$50,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctlsmf2.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | |||||||||||||
Investor Shares (9/16/97) | 9.59 | % | -0.34 | % | 9.17 | % | 4.99% | ||||||||||
Select Shares® (6/9/04) | 9.80 | % | -0.19 | % | n/a | 4.49% | |||||||||||
Russell 2000® Index | 12.08 | % | 1.19 | % | 9.58 | % | (9/16/97) 5.54% | ||||||||||
(6/9/04) 5.62% | |||||||||||||||||
Fund Category: Morningstar Small-Cap Growth | 8.95 | % | 0.44 | % | 8.86 | % | (9/16/97) 5.74% | ||||||||||
(6/9/04) 5.81% |
Fund Expense Ratios3: Investor Shares: Net 1.36%; Gross 1.59% / Select Shares: Net 1.21%; Gross 1.52%
Investment Managers and Allocations4
% of | |||||||
Investment Managers | Investment Style | Net Assets | |||||
TAMRO Capital Partners LLC | Small-Cap Blend | 48.7 | % | ||||
Neuberger Berman Management LLC | Small-Cap Growth | 15.7 | % | ||||
Mellon Capital Management Corp. | Small-Cap Blend | 9.5 | % | ||||
Wellington Management Company, LLP | Small-Cap Value | 23.0 | % | ||||
Cash and other assets | — | 3.1 | % | ||||
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.
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. |
Laudus MarketMasters Funds 7
Table of Contents
Laudus International MarketMasters Fund™
The Laudus MarketMasters Funds use a multi-manager strategy. Charles Schwab Investment Management, Inc. (CSIM)—the funds’ investment manager—selects investment professionals with proven long-term track records to manage a portion of each fund’s assets. In addition to selecting investment sub-advisers and allocating assets among them, CSIM is responsible for monitoring and coordinating the overall management of the funds. Each sub-adviser manages its respective portfolio relative to a comparative index that reflects its individual process and philosophy. The sub-adviser indexes may differ from the comparative index of the overall fund.
For the 12-month period ended October 31, 2012, Investor Shares of the Laudus International MarketMasters Fund (the fund) returned 10.05%, significantly outperforming its comparative index, the MSCI EAFE Index (the index), which returned 5.15%. Unlike the fund’s return, the index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow global economic growth and ongoing concerns over the European debt crisis, world stock markets posted positive gains over the reporting period. U.S. markets significantly outperformed international ones, with the S&P 500 Index up 15.21% versus the MSCI EAFE Index and MSCI Emerging Markets Index, which gained 5.15% and 2.98%, respectively. International markets showed little differentiation between growth and value, with the MSCI EAFE Value Index eclipsing its Growth counterpart by less than 10 basis points.
Positioning and Strategies. In December 2011, the fund’s board added a new sub-adviser: Mellon Capital Management. Because Mellon was not on board for the full reporting period, its performance is not addressed here. The fund’s five other sub-advisers posted positive returns for the period. The strongest absolute performer was American Century Investment Management, up 14.75% and outperforming its international small/mid-cap growth index by more than 10%. Mondrian Investment Partners was only slightly lower, posting a 14.03% gain and outperforming its international small-cap index by more than 8%. William Blair & Company and Harris Associates also posted double-digit gains and outperformed their respective comparative indexes. Only WHV Investment Management/Hirayama Investments slightly underperformed its index, the MSCI EAFE Index. Over the period, the fund maintained its growth bias and its small-cap overweight. In addition, three of the fund’s sub-advisers used forward contracts to hedge currency risk in the Australian dollar, New Zealand dollar, Japanese yen, Swiss franc and Swedish krona.
Overall, the fund’s outperformance of the index was primarily due to stock selection. From a sector standpoint, the fund’s stock selection contributed across all 10 sectors, but stock selection in Industrials was the largest contributor. The fund’s allocation across sectors, however, detracted from its relative return, most notably due to its significant overweight in Information Technology—the index’s weakest-performing sector for the period—as well as underweights in Health Care, Consumer Staples and Financials—the index’s top three performers. The fund’s underweights in Telecommunication Services and Utilities, two sectors that lost ground for the period, contributed positively.
The fund’s allocation across regions contributed slightly to its relative performance, specifically due to its underweight in Asia and the Pacific Basin and its overweight in North America. However, the fund’s underweight in Europe detracted slightly, as did its overweight in emerging markets—to which the benchmark had no exposure.
As of 10/31/12:
Country Weightings % of Investments
United Kingdom | 20.3% | |||
Japan | 13.3% | |||
France | 7.9% | |||
Germany | 7.5% | |||
Switzerland | 7.5% | |||
Canada | 5.3% | |||
Australia | 4.5% | |||
Netherlands | 4.3% | |||
Singapore | 3.5% | |||
United States | 2.7% | |||
Hong Kong | 2.7% | |||
Other Countries | 20.5% | |||
Total | 100.0% |
Statistics
Number of Holdings | 1,283 | |||
Weighted Average Market Cap ($ x 1,000,000) | $24,598 | |||
Price/Earnings Ratio (P/E) | 20.2 | |||
Price/Book Ratio (P/B) | 1.2 | |||
Portfolio Turnover Rate | 68% |
Sector Weightings % of Investments
Industrials | 20.3% | |||
Financials | 18.0% | |||
Consumer Discretionary | 14.2% | |||
Materials | 11.5% | |||
Information Technology | 9.0% | |||
Consumer Staples | 7.8% | |||
Energy | 6.9% | |||
Health Care | 6.2% | |||
Telecommunication Services | 2.0% | |||
Utilities | 1.2% | |||
Other | 2.9% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
BNP Paribas S.A. | 1.2% | |||
Croda International plc | 1.0% | |||
Credit Suisse Group AG – Reg’d | 0.9% | |||
Rotork plc | 0.9% | |||
Symrise AG | 0.9% | |||
Nestle S.A. – Reg’d | 0.8% | |||
Toyota Motor Corp. | 0.8% | |||
Daiwa Securities Group, Inc. | 0.8% | |||
Canon, Inc. | 0.8% | |||
Daimler AG – Reg’d | 0.7% | |||
Total | 8.8% |
Management’s views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Laudus MarketMasters Funds
Table of Contents
Laudus International MarketMasters Fundtm
Performance and Fund Facts as of 10/31/12
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.laudus.com/prospectus.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctlimf1.gif)
April 2, 2004 – October 31, 2012
Performance of Hypothetical
$50,000 Investment1
Performance of Hypothetical
$50,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctlimf2.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | |||||||||||||
Investor Shares (10/16/96) | 10.05 | % | -2.67 | % | 11.06 | % | 8.47% | ||||||||||
Select Shares® (4/2/04) | 10.20 | % | -2.54 | % | n/a | 7.42% | |||||||||||
MSCI EAFE Index®* | 5.15 | % | -5.35 | % | 8.21 | % | (10/16/96) 4.35% | ||||||||||
(4/2/04) 4.68% | |||||||||||||||||
Fund Category: Morningstar Foreign Large-Cap Growth | 6.55 | % | -4.38 | % | 8.61 | % | (10/16/96) 5.90% | ||||||||||
(4/2/04) 5.61% |
Fund Expense Ratios3: Investor Shares: Net 1.41%; Gross 1.61% / Select Shares: Net 1.26%; Gross 1.48%
Investment Managers and Allocations4
% of | |||||||
Investment Managers | Investment Style | Net Assets | |||||
American Century Investment Management, Inc. | International Small/Mid-Cap Growth | 20.3 | % | ||||
WHV Investment Management/Hirayama Investments, LLC | International Large-Cap Growth | 7.8 | % | ||||
Harris Associates L.P. | International Large-Cap Value | 20.7 | % | ||||
William Blair & Company, LLC | International Multi-Cap Growth | 19.9 | % | ||||
Mondrian Investment Partners Limited | International Small-Cap Value | 20.4 | % | ||||
Mellon Capital Management Corp. | International Blend | 9.8 | % | ||||
Cash and other assets | — | 1.1 | % | ||||
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.
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 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. 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. | |
4 | For more information about each of the investment manager’s investment styles, refer to the fund’s prospectus. |
Laudus MarketMasters Funds 9
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2012 and held through October 31, 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 5/1/12 | at 10/31/12 | 5/1/12–10/31/12 | |||||||||||||
Laudus Small-Cap MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.37% | $ | 1,000 | $ | 1,001.50 | $ | 6.89 | |||||||||
Hypothetical 5% Return | 1.37% | $ | 1,000 | $ | 1,018.25 | $ | 6.95 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.22% | $ | 1,000 | $ | 1,002.30 | $ | 6.14 | |||||||||
Hypothetical 5% Return | 1.22% | $ | 1,000 | $ | 1,019.00 | $ | 6.19 | |||||||||
Laudus International MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.44% | $ | 1,000 | $ | 1,023.10 | $ | 7.32 | |||||||||
Hypothetical 5% Return | 1.44% | $ | 1,000 | $ | 1,017.90 | $ | 7.30 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.29% | $ | 1,000 | $ | 1,023.70 | $ | 6.56 | |||||||||
Hypothetical 5% Return | 1.29% | $ | 1,000 | $ | 1,018.65 | $ | 6.55 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. | |
2 | Expenses for each fund or share class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 366 days of the fiscal year. |
10 Laudus MarketMasters Funds
Table of Contents
Laudus Small-Cap MarketMasters Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
Investor Shares | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.99 | 11.52 | 9.40 | 8.78 | 13.74 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.10 | )1 | (0.09 | )1 | (0.08 | )1 | (0.05 | )1 | (0.04 | )1 | ||||||||||||
Net realized and unrealized gains (losses) | 1.25 | 0.56 | 2.20 | 0.67 | (4.59 | ) | ||||||||||||||||
Total from investment operations | 1.15 | 0.47 | 2.12 | 0.62 | (4.63 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | — | (0.00 | )2 | — | ||||||||||||||||
Distributions from net realized gains | — | — | — | — | (0.33 | ) | ||||||||||||||||
Total distributions | — | — | — | (0.00 | )2 | (0.33 | ) | |||||||||||||||
Net asset value at end of period | 13.14 | 11.99 | 11.52 | 9.40 | 8.78 | |||||||||||||||||
Total return (%) | 9.59 | 4.08 | 22.55 | 7.10 | (34.34 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.42 | 3 | 1.46 | 1.46 | 1.48 | 4 | 1.48 | |||||||||||||||
Gross operating expenses | 1.59 | 1.51 | 1.50 | 1.50 | 1.48 | |||||||||||||||||
Net investment income (loss) | (0.79 | ) | (0.70 | ) | (0.72 | ) | (0.64 | ) | (0.38 | ) | ||||||||||||
Portfolio turnover rate | 144 | 95 | 78 | 129 | 134 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 65 | 62 | 68 | 64 | 64 |
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
Select Shares | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.14 | 11.64 | 9.49 | 8.86 | 13.85 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.08 | )1 | (0.07 | )1 | (0.06 | )1 | (0.04 | )1 | (0.04 | )1 | ||||||||||||
Net realized and unrealized gains (losses) | 1.27 | 0.57 | 2.21 | 0.68 | (4.62 | ) | ||||||||||||||||
Total from investment operations | 1.19 | 0.50 | 2.15 | 0.64 | (4.66 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | — | (0.01 | ) | — | ||||||||||||||||
Distributions from net realized gains | — | — | — | — | (0.33 | ) | ||||||||||||||||
Total distributions | — | — | — | (0.01 | ) | (0.33 | ) | |||||||||||||||
Net asset value at end of period | 13.33 | 12.14 | 11.64 | 9.49 | 8.86 | |||||||||||||||||
Total return (%) | 9.80 | 4.30 | 22.66 | 7.29 | (34.28 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.27 | 3 | 1.31 | 1.32 | 5 | 1.33 | 4 | 1.37 | ||||||||||||||
Gross operating expenses | 1.51 | 1.45 | 1.45 | 1.45 | 1.44 | |||||||||||||||||
Net investment income (loss) | (0.60 | ) | (0.54 | ) | (0.58 | ) | (0.48 | ) | (0.31 | ) | ||||||||||||
Portfolio turnover rate | 144 | 95 | 78 | 129 | 134 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 88 | 219 | 337 | 292 | 260 |
1 Calculated based on the average shares outstanding during the period.
2 Per share amount was less than $0.01.
3 Effective June 6, 2012, the net operating expense limitation was lowered. The ratio presented for period ended October 31, 2012 is a blended rate. Please see financial note 4 for more information.
4 Effective February 28, 2009, the operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
5 The ratio of net operating expenses would have been 1.31% if certain non-routine expense had not been incurred.
See financial notes 11
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.laudus.com.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
95 | .0% | Common Stock | 126,764,560 | 145,257,704 | ||||||||
5 | .1% | Other Investment Company | 7,839,575 | 7,839,575 | ||||||||
0 | .3% | Short-Term Investments | 400,943 | 400,943 | ||||||||
100 | .4% | Total Investments | 135,005,078 | 153,498,222 | ||||||||
(0 | .4)% | Other Assets and Liabilities, Net | (550,890 | ) | ||||||||
100 | .0% | Net Assets | 152,947,332 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 95.0% of net assets | ||||||||
Automobiles & Components 0.1% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 1,028 | 11,174 | ||||||
Cooper Tire & Rubber Co. | 817 | 16,446 | ||||||
Dana Holding Corp. | 2,028 | 26,689 | ||||||
Dorman Products, Inc. * | 200 | 6,110 | ||||||
Drew Industries, Inc. * | 170 | 5,384 | ||||||
Fuel Systems Solutions, Inc. * | 223 | 3,628 | ||||||
Gentherm, Inc. * | 278 | 3,342 | ||||||
Modine Manufacturing Co. * | 840 | 5,712 | ||||||
Standard Motor Products, Inc. | 198 | 3,718 | ||||||
Superior Industries International, Inc. | 233 | 3,982 | ||||||
Tenneco, Inc. * | 667 | 20,377 | ||||||
Winnebago Industries, Inc. * | 791 | 9,967 | ||||||
116,529 | ||||||||
Banks 8.4% | ||||||||
1st Source Corp. | 167 | 3,709 | ||||||
Astoria Financial Corp. | 570 | 5,717 | ||||||
Banco Latinoamericano de Comercio Exterior, S.A., Class E | 540 | 12,150 | ||||||
BancorpSouth, Inc. | 1,539 | 21,777 | ||||||
Bank of the Ozarks, Inc. | 55,885 | 1,829,675 | ||||||
Banner Corp. | 363 | 10,523 | ||||||
BBCN Bancorp, Inc. | 1,367 | 16,308 | ||||||
Berkshire Hills Bancorp, Inc. | 188 | 4,414 | ||||||
BofI Holding, Inc. * | 193 | 5,427 | ||||||
Boston Private Financial Holdings, Inc. | 1,502 | 13,848 | ||||||
Brookline Bancorp, Inc. | 662 | 5,614 | ||||||
BSB Bancorp, Inc. * | 274 | 3,532 | ||||||
Cardinal Financial Corp. | 710 | 11,339 | ||||||
Cathay General Bancorp | 1,185 | 20,963 | ||||||
Chemical Financial Corp. | 186 | 4,375 | ||||||
Citizens & Northern Corp. | 209 | 3,881 | ||||||
Citizens Republic Bancorp, Inc. * | 733 | 13,297 | ||||||
City Holding Co. | 117 | 4,109 | ||||||
Columbia Banking System, Inc. | 653 | 11,565 | ||||||
Community Bank System, Inc. | 576 | 15,892 | ||||||
Community Trust Bancorp, Inc. | 325 | 11,024 | ||||||
CVB Financial Corp. | 2,189 | 23,685 | ||||||
Dime Community Bancshares, Inc. | 304 | 4,408 | ||||||
Eagle Bancorp, Inc. * | 268 | 5,590 | ||||||
F.N.B. Corp. | 1,926 | 20,666 | ||||||
First Busey Corp. | 54,909 | 259,170 | ||||||
First California Financial Group, Inc. * | 958 | 6,467 | ||||||
First Commonwealth Financial Corp. | 784 | 5,135 | ||||||
First Connecticut Bancorp, Inc. | 446 | 6,106 | ||||||
First Financial Bancorp | 1,005 | 15,778 | ||||||
First Financial Bankshares, Inc. | 484 | 17,535 | ||||||
First Financial Corp. | 124 | 3,793 | ||||||
First Midwest Bancorp, Inc. | 43,988 | 544,132 | ||||||
First Niagara Financial Group, Inc. | 39,600 | 327,888 | ||||||
FirstMerit Corp. | 1,533 | 21,247 | ||||||
Flushing Financial Corp. | 20,122 | 312,897 | ||||||
Glacier Bancorp, Inc. | 112,539 | 1,631,815 | ||||||
Great Southern Bancorp, Inc. | 288 | 8,171 | ||||||
Hancock Holding Co. | 10,911 | 344,678 | ||||||
Hanmi Financial Corp. * | 818 | 10,151 | ||||||
Home Bancshares, Inc. | 419 | 14,514 | ||||||
Home Loan Servicing Solutions Ltd. | 505 | 9,797 | ||||||
IBERIABANK Corp. | 34,742 | 1,729,804 | ||||||
Independent Bank Corp. | 171 | 5,046 | ||||||
International Bancshares Corp. | 32,410 | 588,241 | ||||||
Investors Bancorp, Inc. | 564 | 10,146 | ||||||
Kaiser Federal Financial Group, Inc. | 474 | 7,314 | ||||||
Lakeland Financial Corp. | 158 | 4,217 | ||||||
MB Financial, Inc. | 16,963 | 343,670 | ||||||
MGIC Investment Corp. * | 2,739 | 4,711 | ||||||
National Penn Bancshares, Inc. | 1,907 | 17,030 | ||||||
Nationstar Mortgage Holdings, Inc. * | 160 | 5,781 | ||||||
NBT Bancorp, Inc. | 552 | 11,741 | ||||||
Northwest Bancshares, Inc. | 49,966 | 594,595 | ||||||
OceanFirst Financial Corp. | 470 | 6,552 | ||||||
Ocwen Financial Corp. * | 1,222 | 47,133 | ||||||
Old National Bancorp | 1,439 | 17,657 | ||||||
OmniAmerican Bancorp, Inc. * | 229 | 5,242 | ||||||
Oriental Financial Group, Inc. | 942 | 11,097 | ||||||
Oritani Financial Corp. | 860 | 13,141 | ||||||
Pacific Capital Bancorp * | 93 | 4,270 | ||||||
PacWest Bancorp | 542 | 12,195 | ||||||
Park National Corp. | 92 | 6,123 | ||||||
Park Sterling Corp. * | 898 | 4,490 | ||||||
Pinnacle Financial Partners, Inc. * | 641 | 12,532 | ||||||
PrivateBancorp, Inc. | 978 | 15,804 | ||||||
Prosperity Bancshares, Inc. | 645 | 27,000 | ||||||
Provident Financial Services, Inc. | 981 | 14,715 | ||||||
Radian Group, Inc. | 1,794 | 8,414 | ||||||
Renasant Corp. | 277 | 5,100 | ||||||
S&T Bancorp, Inc. | 199 | 3,496 | ||||||
Sandy Spring Bancorp, Inc. | 230 | 4,398 | ||||||
SCBT Financial Corp. | 7,433 | 294,941 | ||||||
Signature Bank * | 4,900 | 349,076 | ||||||
Simmons First National Corp., Class A | 431 | 10,728 |
12 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Southside Bancshares, Inc. | 211 | 4,307 | ||||||
State Bank Financial Corp. | 630 | 9,557 | ||||||
Sterling Financial Corp. | 536 | 11,395 | ||||||
Susquehanna Bancshares, Inc. | 2,590 | 26,858 | ||||||
SVB Financial Group * | 4,000 | 226,360 | ||||||
Texas Capital Bancshares, Inc. * | 9,304 | 441,661 | ||||||
The Bancorp, Inc. * | 650 | 7,390 | ||||||
TriCo Bancshares | 511 | 8,585 | ||||||
TrustCo Bank Corp. | 1,765 | 9,849 | ||||||
Trustmark Corp. | 908 | 21,311 | ||||||
UMB Financial Corp. | 29,841 | 1,328,820 | ||||||
Umpqua Holdings Corp. | 1,659 | 20,057 | ||||||
United Bankshares, Inc. | 674 | 16,061 | ||||||
United Financial Bancorp, Inc. | 296 | 4,550 | ||||||
ViewPoint Financial Group, Inc. | 684 | 14,227 | ||||||
Webster Financial Corp. | 30,623 | 673,706 | ||||||
WesBanco, Inc. | 200 | 4,400 | ||||||
West Coast Bancorp | 330 | 7,267 | ||||||
Westamerica Bancorp | 4,728 | 208,599 | ||||||
Western Alliance Bancorp * | 1,437 | 14,744 | ||||||
Wilshire Bancorp, Inc. * | 1,173 | 7,636 | ||||||
Wintrust Financial Corp. | 539 | 19,916 | ||||||
12,906,418 | ||||||||
Capital Goods 9.7% | ||||||||
A.O. Smith Corp. | 543 | 32,998 | ||||||
AAON, Inc. | 212 | 4,448 | ||||||
AAR Corp. | 612 | 9,235 | ||||||
Accuride Corp. * | 1,081 | 2,886 | ||||||
Actuant Corp., Class A | 10,643 | 300,558 | ||||||
Acuity Brands, Inc. | 5,635 | 364,584 | ||||||
Aegion Corp. * | 602 | 11,119 | ||||||
Aerovironment, Inc. * | 55,142 | 1,212,573 | ||||||
Aircastle Ltd. | 931 | 10,362 | ||||||
Albany International Corp., Class A | 29,494 | 647,983 | ||||||
Altra Holdings, Inc. | 222 | 4,000 | ||||||
Ameresco, Inc., Class A * | 681 | 7,532 | ||||||
American Science & Engineering, Inc. | 132 | 8,393 | ||||||
Apogee Enterprises, Inc. | 552 | 11,244 | ||||||
Applied Industrial Technologies, Inc. | 598 | 24,273 | ||||||
Astec Industries, Inc. * | 123 | 3,542 | ||||||
AZZ, Inc. | 6,890 | 271,742 | ||||||
Barnes Group, Inc. | 804 | 18,396 | ||||||
Beacon Roofing Supply, Inc. * | 650 | 21,021 | ||||||
Belden, Inc. | 26,029 | 931,838 | ||||||
Blount International, Inc. * | 806 | 10,663 | ||||||
Brady Corp., Class A | 675 | 20,763 | ||||||
Briggs & Stratton Corp. | 735 | 14,516 | ||||||
Capstone Turbine Corp. * | 6,688 | 6,688 | ||||||
Carlisle Cos., Inc. | 24,800 | 1,377,640 | ||||||
Cascade Corp. | 157 | 10,203 | ||||||
Ceradyne, Inc. | 458 | 16,012 | ||||||
Chart Industries, Inc. * | 4,417 | 312,679 | ||||||
Chicago Bridge & Iron Co., N.V., NY Shares | 19,425 | 729,409 | ||||||
CIRCOR International, Inc. | 136 | 4,691 | ||||||
CLARCOR, Inc. | 626 | 28,320 | ||||||
Colfax Corp. * | 50,648 | 1,741,785 | ||||||
Comfort Systems USA, Inc. | 363 | 3,957 | ||||||
Cubic Corp. | 5,795 | 282,796 | ||||||
Curtiss-Wright Corp. | 628 | 19,386 | ||||||
DigitalGlobe, Inc. * | 10,195 | 264,458 | ||||||
Douglas Dynamics, Inc. | 621 | 9,433 | ||||||
DXP Enterprises, Inc. * | 129 | 6,351 | ||||||
Dycom Industries, Inc. * | 604 | 8,601 | ||||||
Edgen Group, Inc. * | 821 | 6,248 | ||||||
EMCOR Group, Inc. | 1,001 | 32,192 | ||||||
Encore Wire Corp. | 156 | 4,814 | ||||||
EnerSys, Inc. * | 680 | 23,446 | ||||||
EnPro Industries, Inc. * | 360 | 13,162 | ||||||
ESCO Technologies, Inc. | 16,850 | 630,864 | ||||||
Esterline Technologies Corp. * | 423 | 24,445 | ||||||
Federal Signal Corp. * | 998 | 5,758 | ||||||
Franklin Electric Co., Inc. | 22,025 | 1,276,128 | ||||||
FuelCell Energy, Inc. * | 4,340 | 4,038 | ||||||
GATX Corp. | 14,700 | 609,462 | ||||||
GenCorp, Inc. * | 1,156 | 10,196 | ||||||
Generac Holdings, Inc. | 223 | 7,582 | ||||||
GeoEye, Inc. * | 266 | 8,344 | ||||||
Gibraltar Industries, Inc. * | 269 | 3,352 | ||||||
Global Power Equipment Group, Inc. | 165 | 2,789 | ||||||
Graham Corp. | 193 | 3,468 | ||||||
Granite Construction, Inc. | 602 | 18,186 | ||||||
Great Lakes Dredge & Dock Corp. | 907 | 7,211 | ||||||
Griffon Corp. | 404 | 4,101 | ||||||
H&E Equipment Services, Inc. | 411 | 6,255 | ||||||
HEICO Corp. | 1,702 | 65,748 | ||||||
Hexcel Corp. * | 1,438 | 36,755 | ||||||
Houston Wire & Cable Co. | 288 | 3,188 | ||||||
Hyster-Yale Materials Handling, Inc. * | 44 | 1,808 | ||||||
Hyster-Yale Materials Handling, Inc., Class B (a)* | 44 | 1,808 | ||||||
II-VI, Inc. * | 798 | 13,175 | ||||||
John Bean Technologies Corp. | 586 | 9,036 | ||||||
Kadant, Inc. * | 176 | 4,275 | ||||||
Kaman Corp. | 176 | 6,547 | ||||||
Kaydon Corp. | 623 | 13,930 | ||||||
Kratos Defense & Security Solutions, Inc. * | 818 | 4,507 | ||||||
Layne Christensen Co. * | 382 | 8,515 | ||||||
Lindsay Corp. | 215 | 16,420 | ||||||
Lydall, Inc. * | 323 | 4,170 | ||||||
MasTec, Inc. * | 904 | 20,394 | ||||||
Meritor, Inc. * | 629 | 2,780 | ||||||
Middleby Corp. * | 214 | 26,739 | ||||||
Miller Industries, Inc. | 263 | 4,037 | ||||||
Moog, Inc., Class A * | 513 | 18,986 | ||||||
Mueller Industries, Inc. | 18,846 | 825,455 | ||||||
Mueller Water Products, Inc., Class A | 1,519 | 7,914 | ||||||
MYR Group, Inc. * | 305 | 6,460 | ||||||
Orbital Sciences Corp. * | 934 | 12,516 | ||||||
PMFG, Inc. * | 210 | 1,365 | ||||||
Primoris Services Corp. | 575 | 8,033 | ||||||
Quanex Building Products Corp. | 687 | 13,582 | ||||||
Raven Industries, Inc. | 296 | 8,078 | ||||||
RBC Bearings, Inc. * | 163 | 8,095 | ||||||
Rexnord Corp. * | 277 | 5,019 | ||||||
Robbins & Myers, Inc. | 549 | 32,545 | ||||||
Rush Enterprises, Inc., Class A * | 275 | 5,225 | ||||||
Sauer-Danfoss, Inc. | 122 | 4,887 | ||||||
Seaboard Corp. * | 2 | 4,563 | ||||||
Simpson Manufacturing Co., Inc. | 565 | 17,210 | ||||||
Standex International Corp. | 110 | 5,086 |
See financial notes 13
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sun Hydraulics Corp. | 156 | 4,156 | ||||||
TAL International Group, Inc. | 516 | 17,616 | ||||||
Taser International, Inc. * | 1,162 | 9,075 | ||||||
Teledyne Technologies, Inc. * | 502 | 32,143 | ||||||
Tennant Co. | 211 | 7,896 | ||||||
Textainer Group Holdings Ltd. | 148 | 4,470 | ||||||
The Gorman-Rupp Co. | 143 | 3,861 | ||||||
The Greenbrier Cos., Inc. * | 274 | 4,770 | ||||||
Thermon Group Holdings, Inc. * | 245 | 6,086 | ||||||
Titan International, Inc. | 54,228 | 1,137,703 | ||||||
Titan Machinery, Inc. * | 270 | 6,386 | ||||||
Trex Co., Inc. * | 174 | 6,080 | ||||||
TriMas Corp. * | 569 | 14,271 | ||||||
Tutor Perini Corp. * | 625 | 6,338 | ||||||
Twin Disc, Inc. | 334 | 5,063 | ||||||
Universal Forest Products, Inc. | 133 | 5,121 | ||||||
USG Corp. * | 1,029 | 27,485 | ||||||
Wabash National Corp. * | 916 | 5,780 | ||||||
Wabtec Corp. | 8,398 | 687,796 | ||||||
Watsco, Inc. | 388 | 26,520 | ||||||
Watts Water Technologies, Inc., Class A | 462 | 18,586 | ||||||
Woodward, Inc. | 878 | 29,413 | ||||||
14,764,585 | ||||||||
Commercial & Professional Supplies 6.4% | ||||||||
ABM Industries, Inc. | 690 | 13,110 | ||||||
Acacia Research Corp. * | 663 | 17,218 | ||||||
Acco Brands Corp. * | 73,482 | 532,010 | ||||||
CBIZ, Inc. * | 1,342 | 7,408 | ||||||
Consolidated Graphics, Inc. * | 89 | 2,626 | ||||||
Deluxe Corp. | 749 | 23,601 | ||||||
Encore Capital Group, Inc. * | 184 | 5,336 | ||||||
EnergySolutions, Inc. * | 1,191 | 3,406 | ||||||
EnerNOC, Inc. * | 768 | 9,462 | ||||||
Ennis, Inc. | 287 | 4,391 | ||||||
Exponent, Inc. * | 89 | 4,893 | ||||||
FTI Consulting, Inc. * | 589 | 15,290 | ||||||
G&K Services, Inc., Class A | 16,843 | 543,187 | ||||||
GP Strategies Corp. * | 298 | 5,737 | ||||||
Healthcare Services Group, Inc. | 18,605 | 444,660 | ||||||
Herman Miller, Inc. | 593 | 11,498 | ||||||
HNI Corp. | 637 | 17,530 | ||||||
Huron Consulting Group, Inc. * | 369 | 10,646 | ||||||
ICF International, Inc. * | 382 | 7,010 | ||||||
InnerWorkings, Inc. * | 32,698 | 471,505 | ||||||
Insperity, Inc. | 419 | 10,940 | ||||||
Interface, Inc. | 1,022 | 14,625 | ||||||
Kelly Services, Inc., Class A | 381 | 5,063 | ||||||
Kforce, Inc. * | 663 | 7,392 | ||||||
Kimball International, Inc., Class B | 165 | 1,970 | ||||||
Knoll, Inc. | 699 | 10,059 | ||||||
Korn/Ferry International * | 875 | 11,716 | ||||||
McGrath RentCorp | 2,052 | 53,886 | ||||||
Mine Safety Appliances Co. | 375 | 14,475 | ||||||
Mistras Group, Inc. * | 196 | 4,330 | ||||||
Mobile Mini, Inc. * | 226 | 3,937 | ||||||
Navigant Consulting, Inc. * | 878 | 9,122 | ||||||
On Assignment, Inc. * | 22,155 | 422,717 | ||||||
Pendrell Corp. * | 1,575 | 1,874 | ||||||
Portfolio Recovery Associates, Inc. * | 18,716 | 1,958,629 | ||||||
Quad Graphics, Inc. | 332 | 6,086 | ||||||
Resources Connection, Inc. | 916 | 11,303 | ||||||
Standard Parking Corp. * | 16,000 | 365,600 | ||||||
Steelcase, Inc., Class A | 743 | 7,437 | ||||||
Sykes Enterprises, Inc. * | 329 | 4,481 | ||||||
Team, Inc. * | 369 | 12,096 | ||||||
Tetra Tech, Inc. * | 10,216 | 265,003 | ||||||
The Advisory Board Co. * | 41,848 | 1,987,780 | ||||||
The Brink’s Co. | 692 | 18,207 | ||||||
The Corporate Executive Board Co. | 36,574 | 1,644,367 | ||||||
The Geo Group, Inc. | 872 | 24,172 | ||||||
TrueBlue, Inc. * | 715 | 9,331 | ||||||
UniFirst Corp. | 132 | 9,183 | ||||||
United Stationers, Inc. | 25,932 | 752,547 | ||||||
Viad Corp. | 380 | 8,060 | ||||||
9,806,912 | ||||||||
Consumer Durables & Apparel 4.1% | ||||||||
American Greetings Corp., Class A | 595 | 10,216 | ||||||
Arctic Cat, Inc. * | 229 | 8,306 | ||||||
Blyth, Inc. | 86 | 1,964 | ||||||
Brunswick Corp. | 1,185 | 27,954 | ||||||
Callaway Golf Co. | 1,416 | 7,731 | ||||||
Columbia Sportswear Co. | 228 | 12,859 | ||||||
Crocs, Inc. * | 1,321 | 16,645 | ||||||
Ethan Allen Interiors, Inc. | 459 | 13,499 | ||||||
Fifth & Pacific Cos., Inc. * | 1,271 | 13,956 | ||||||
G-III Apparel Group Ltd. * | 361 | 13,343 | ||||||
Harman International Industries, Inc. | 37,550 | 1,574,472 | ||||||
Helen of Troy Ltd. * | 19,987 | 604,007 | ||||||
Iconix Brand Group, Inc. * | 627 | 11,606 | ||||||
iRobot Corp. * | 262 | 4,708 | ||||||
JAKKS Pacific, Inc. | 714 | 9,218 | ||||||
KB Home | 1,166 | 18,633 | ||||||
La-Z-Boy, Inc. * | 318 | 5,158 | ||||||
LeapFrog Enterprises, Inc. * | 1,107 | 9,786 | ||||||
M.D.C. Holdings, Inc. | 49,019 | 1,874,487 | ||||||
Maidenform Brands, Inc. * | 486 | 9,093 | ||||||
Meritage Homes Corp. * | 482 | 17,824 | ||||||
Movado Group, Inc. | 8,934 | 283,118 | ||||||
NACCO Industries, Inc., Class A | 44 | 2,228 | ||||||
Oxford Industries, Inc. | 5,434 | 301,478 | ||||||
Perry Ellis International, Inc. * | 402 | 8,297 | ||||||
Quiksilver, Inc. * | 989 | 3,165 | ||||||
Skechers U.S.A., Inc., Class A * | 669 | 11,105 | ||||||
Skullcandy, Inc. * | 320 | 3,875 | ||||||
Smith & Wesson Holding Corp. * | 945 | 9,072 | ||||||
Standard Pacific Corp. * | 1,079 | 7,445 | ||||||
Steven Madden Ltd. * | 473 | 20,301 | ||||||
Sturm, Ruger & Co., Inc. | 143 | 6,754 | ||||||
Tempur-Pedic International, Inc. * | 32,479 | 858,745 | ||||||
The Jones Group, Inc. | 796 | 9,401 | ||||||
The Ryland Group, Inc. | 611 | 20,695 | ||||||
The Warnaco Group, Inc. * | 5,887 | 415,504 | ||||||
True Religion Apparel, Inc. | 421 | 10,799 | ||||||
Tumi Holdings, Inc. * | 192 | 4,301 | ||||||
Vera Bradley, Inc. * | 351 | 10,463 | ||||||
Wolverine World Wide, Inc. | 530 | 22,191 | ||||||
Zagg, Inc. * | 740 | 5,313 | ||||||
6,279,715 |
14 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Consumer Services 5.8% | ||||||||
AFC Enterprises, Inc. * | 295 | 7,469 | ||||||
American Public Education, Inc. * | 344 | 12,532 | ||||||
Ameristar Casinos, Inc. | 577 | 10,530 | ||||||
Ascent Capital Group, Inc., Class A * | 89 | 5,291 | ||||||
Biglari Holdings, Inc. * | 11 | 3,890 | ||||||
BJ’s Restaurants, Inc. * | 28,557 | 943,809 | ||||||
Bob Evans Farms, Inc. | 412 | 15,685 | ||||||
Boyd Gaming Corp. * | 838 | 5,171 | ||||||
Bravo Brio Restaurant Group, Inc. * | 556 | 7,339 | ||||||
Bridgepoint Education, Inc. * | 169 | 1,690 | ||||||
Buffalo Wild Wings, Inc. * | 278 | 21,114 | ||||||
Caesars Entertainment Corp. * | 198 | 1,146 | ||||||
Capella Education Co. * | 265 | 8,273 | ||||||
Caribou Coffee Co., Inc. * | 488 | 5,841 | ||||||
CEC Entertainment, Inc. | 15,532 | 481,492 | ||||||
Choice Hotels International, Inc. | 5,400 | 168,966 | ||||||
Churchill Downs, Inc. | 78 | 5,096 | ||||||
Coinstar, Inc. * | 24,645 | 1,156,836 | ||||||
Corinthian Colleges, Inc. * | 1,452 | 3,964 | ||||||
Cracker Barrel Old Country Store, Inc. | 275 | 17,504 | ||||||
Denny’s Corp. * | 1,027 | 4,724 | ||||||
DineEquity, Inc. * | 126 | 7,900 | ||||||
Domino’s Pizza, Inc. | 623 | 25,306 | ||||||
Grand Canyon Education, Inc. * | 84,971 | 1,848,969 | ||||||
Hillenbrand, Inc. | 654 | 13,387 | ||||||
International Speedway Corp., Class A | 500 | 12,750 | ||||||
Interval Leisure Group, Inc. | 313 | 5,966 | ||||||
Jack In The Box, Inc. * | 629 | 16,360 | ||||||
K12, Inc. * | 484 | 9,908 | ||||||
Krispy Kreme Doughnuts, Inc. * | 638 | 4,740 | ||||||
LIFE TIME FITNESS, Inc. * | 580 | 26,036 | ||||||
Lincoln Educational Services Corp. | 751 | 2,786 | ||||||
Marriott Vacations Worldwide Corp. * | 253 | 9,953 | ||||||
Matthews International Corp., Class A | 16,510 | 474,993 | ||||||
Multimedia Games Holding Co., Inc. * | 642 | 10,208 | ||||||
Orient-Express Hotels Ltd., Class A * | 45,014 | 528,014 | ||||||
Papa John’s International, Inc. * | 324 | 17,276 | ||||||
Pinnacle Entertainment, Inc. * | 404 | 5,155 | ||||||
Red Robin Gourmet Burgers, Inc. * | 30,296 | 1,011,886 | ||||||
Regis Corp. | 927 | 15,444 | ||||||
Ruby Tuesday, Inc. * | 766 | 5,531 | ||||||
Ryman Hospitality Properties * | 427 | 16,657 | ||||||
Scientific Games Corp., Class A * | 564 | 4,642 | ||||||
SHFL Entertainment, Inc. * | 798 | 11,276 | ||||||
Six Flags Entertainment Corp. | 535 | 30,554 | ||||||
Sonic Corp. * | 749 | 7,468 | ||||||
Sotheby’s | 713 | 22,196 | ||||||
Steiner Leisure Ltd. * | 4,992 | 219,249 | ||||||
Stewart Enterprises, Inc., Class A | 708 | 5,501 | ||||||
Strayer Education, Inc. | 108 | 6,206 | ||||||
Texas Roadhouse, Inc. | 92,080 | 1,499,062 | ||||||
The Cheesecake Factory, Inc. | 815 | 26,944 | ||||||
Universal Technical Institute, Inc. | 534 | 6,846 | ||||||
Vail Resorts, Inc. | 346 | 19,646 | ||||||
WMS Industries, Inc. * | 624 | 10,252 | ||||||
8,827,429 | ||||||||
Diversified Financials 3.7% | ||||||||
Apollo Investment Corp. | 2,835 | 22,538 | ||||||
Arlington Asset Investment Corp., Class A | 355 | 7,899 | ||||||
Artio Global Investors, Inc. | 947 | 2,254 | ||||||
BGC Partners, Inc., Class A | 949 | 4,441 | ||||||
BlackRock Kelso Capital Corp. | 1,294 | 12,953 | ||||||
Cash America International, Inc. | 385 | 15,050 | ||||||
Cohen & Steers, Inc. | 135 | 3,779 | ||||||
Credit Acceptance Corp. * | 80 | 6,532 | ||||||
DFC Global Corp. * | 729 | 12,284 | ||||||
Duff & Phelps Corp., Class A | 662 | 8,229 | ||||||
Evercore Partners, Inc., Class A | 390 | 10,881 | ||||||
Ezcorp, Inc., Class A * | 574 | 11,285 | ||||||
Fifth Street Finance Corp. | 1,407 | 15,350 | ||||||
Financial Engines, Inc. * | 721 | 17,311 | ||||||
First Cash Financial Services, Inc. * | 374 | 16,703 | ||||||
FXCM, Inc., Class A | 320 | 2,880 | ||||||
GFI Group, Inc. | 943 | 2,980 | ||||||
Gladstone Capital Corp. | 710 | 6,319 | ||||||
Gladstone Investment Corp. | 774 | 5,728 | ||||||
Green Dot Corp., Class A * | 689 | 7,021 | ||||||
Greenhill & Co., Inc. | 26,949 | 1,286,006 | ||||||
GSV Capital Corp. * | 173 | 1,348 | ||||||
Hercules Technology Growth Capital, Inc. | 939 | 10,141 | ||||||
HFF, Inc., Class A * | 301 | 4,193 | ||||||
Horizon Technology Finance Corp. | 383 | 6,247 | ||||||
INTL FCStone, Inc. * | 177 | 3,280 | ||||||
Investment Technology Group, Inc. * | 987 | 8,330 | ||||||
KBW, Inc. | 618 | 10,042 | ||||||
KCAP Financial, Inc. | 861 | 7,809 | ||||||
Knight Capital Group, Inc., Class A * | 1,669 | 4,389 | ||||||
Main Street Capital Corp. | 456 | 13,694 | ||||||
Manning & Napier, Inc. | 477 | 6,206 | ||||||
MarketAxess Holdings, Inc. | 468 | 14,620 | ||||||
Marlin Business Services Corp. | 14,500 | 327,555 | ||||||
MCG Capital Corp. | 1,016 | �� | 4,735 | |||||
Medallion Financial Corp. | 469 | 5,867 | ||||||
Medley Capital Corp. | 614 | 8,842 | ||||||
MVC Capital, Inc. | 721 | 8,912 | ||||||
Nelnet, Inc., Class A | 172 | 4,198 | ||||||
Netspend Holdings, Inc. * | 723 | 7,743 | ||||||
New Mountain Finance Corp. | 482 | 7,225 | ||||||
PennantPark Investment Corp. | 1,201 | 13,211 | ||||||
PHH Corp. * | 779 | 16,211 | ||||||
PICO Holdings, Inc. * | 409 | 9,055 | ||||||
Piper Jaffray Cos., Inc. * | 351 | 9,424 | ||||||
Prospect Capital Corp. | 1,919 | 22,721 | ||||||
Safeguard Scientifics, Inc. * | 419 | 6,641 | ||||||
Solar Capital Ltd. | 608 | 13,862 | ||||||
Solar Senior Capital Ltd. | 207 | 3,635 | ||||||
Stifel Financial Corp. * | 52,124 | 1,652,331 | ||||||
THL Credit, Inc. | 388 | 5,537 | ||||||
TICC Capital Corp. | 806 | 8,366 | ||||||
Triangle Capital Corp. | 472 | 12,286 | ||||||
Virtus Investment Partners, Inc. * | 53 | 5,088 | ||||||
Waddell & Reed Financial, Inc., Class A | 57,946 | 1,931,340 | ||||||
Walter Investment Management Corp. * | 318 | 15,369 |
See financial notes 15
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
World Acceptance Corp. * | 180 | 12,017 | ||||||
5,680,893 | ||||||||
Energy 5.5% | ||||||||
Alon USA Energy, Inc. | 425 | 5,580 | ||||||
Amyris, Inc. * | 611 | 1,570 | ||||||
Apco Oil & Gas International, Inc. | 55 | 699 | ||||||
Approach Resources, Inc. * | 210 | 5,172 | ||||||
Arch Coal, Inc. | 2,625 | 20,895 | ||||||
Basic Energy Services, Inc. * | 520 | 5,403 | ||||||
Berry Petroleum Co., Class A | 613 | 23,607 | ||||||
Bill Barrett Corp. * | 690 | 15,808 | ||||||
Bonanza Creek Energy, Inc. * | 16,000 | 396,320 | ||||||
BPZ Resources, Inc. * | 1,313 | 3,781 | ||||||
Bristow Group, Inc. | 7,745 | 386,630 | ||||||
C&J Energy Services, Inc. * | 525 | 10,175 | ||||||
Callon Petroleum Co. * | 775 | 4,433 | ||||||
Carrizo Oil & Gas, Inc. * | 686 | 18,399 | ||||||
Clayton Williams Energy, Inc. * | 52 | 2,202 | ||||||
Clean Energy Fuels Corp. * | 957 | 10,958 | ||||||
Cloud Peak Energy, Inc. * | 70,601 | 1,489,681 | ||||||
Comstock Resources, Inc. * | 102,615 | 1,756,769 | ||||||
Contango Oil & Gas Co. * | 23,665 | 1,163,371 | ||||||
Crosstex Energy, Inc. | 733 | 10,027 | ||||||
CVR Energy, Inc. * | 322 | 11,834 | ||||||
Dril-Quip, Inc. * | 532 | 36,846 | ||||||
Endeavour International Corp. * | 440 | 3,194 | ||||||
Energy XXI (Bermuda) Ltd. | 1,071 | 35,450 | ||||||
EPL Oil & Gas, Inc. * | 533 | 11,534 | ||||||
Exterran Holdings, Inc. * | 749 | 14,965 | ||||||
Forest Oil Corp. * | 1,042 | 7,898 | ||||||
Forum Energy Technologies, Inc. * | 266 | 5,934 | ||||||
Frontline Ltd. * | 849 | 2,691 | ||||||
FX Energy, Inc. * | 805 | 3,888 | ||||||
Geospace Technologies Corp. * | 96 | 6,214 | ||||||
Goodrich Petroleum Corp. * | 564 | 6,954 | ||||||
Green Plains Renewable Energy, Inc. * | 707 | 5,465 | ||||||
Gulf Island Fabrication, Inc. | 137 | 3,251 | ||||||
GulfMark Offshore, Inc., Class A * | 448 | 14,479 | ||||||
Gulfport Energy Corp. * | 631 | 20,937 | ||||||
Halcon Resources Corp. * | 21,575 | 139,590 | ||||||
Harvest Natural Resources, Inc. * | 1,055 | 9,210 | ||||||
Heckmann Corp. * | 1,174 | 4,109 | ||||||
Helix Energy Solutions Group, Inc. * | 1,127 | 19,486 | ||||||
Hercules Offshore, Inc. * | 1,181 | 5,622 | ||||||
Hornbeck Offshore Services, Inc. * | 476 | 16,489 | ||||||
ION Geophysical Corp. * | 1,487 | 9,606 | ||||||
Key Energy Services, Inc. * | 1,733 | 11,334 | ||||||
Knightsbridge Tankers Ltd. | 860 | 5,478 | ||||||
Kodiak Oil & Gas Corp. * | 56,262 | 519,861 | ||||||
Lufkin Industries, Inc. | 337 | 16,853 | ||||||
Magnum Hunter Resources Corp. * | 1,297 | 4,955 | ||||||
Matrix Service Co. * | 655 | 6,871 | ||||||
McMoRan Exploration Co. * | 1,169 | 13,946 | ||||||
Mitcham Industries, Inc. * | 316 | 4,282 | ||||||
Newpark Resources, Inc. * | 976 | 6,627 | ||||||
Nordic American Tankers Ltd. | 851 | 7,148 | ||||||
Northern Oil & Gas, Inc. * | 674 | 10,218 | ||||||
Oasis Petroleum, Inc. * | 9,713 | 285,271 | ||||||
Overseas Shipholding Group, Inc. | 539 | 604 | ||||||
Parker Drilling Co. * | 1,022 | 4,425 | ||||||
PDC Energy, Inc. * | 405 | 12,259 | ||||||
Penn Virginia Corp. | 16,403 | 74,142 | ||||||
PetroQuest Energy, Inc. * | 764 | 4,660 | ||||||
PHI, Inc. - Non Voting Shares * | 154 | 4,819 | ||||||
Pioneer Energy Services Corp. * | 762 | 5,029 | ||||||
Precision Drilling Corp. * | 83,840 | 603,648 | ||||||
Quicksilver Resources, Inc. * | 828 | 3,204 | ||||||
Rentech, Inc. * | 2,658 | 6,858 | ||||||
Resolute Energy Corp. * | 676 | 6,003 | ||||||
Rex Energy Corp. * | 792 | 10,486 | ||||||
Rosetta Resources, Inc. * | 7,527 | 346,543 | ||||||
Scorpio Tankers, Inc. * | 32,700 | 178,215 | ||||||
SEACOR Holdings, Inc. * | 5,000 | 438,550 | ||||||
SemGroup Corp., Class A * | 637 | 24,614 | ||||||
Ship Finance International Ltd. | 846 | 13,011 | ||||||
Solazyme, Inc. * | 249 | 2,017 | ||||||
Stone Energy Corp. * | 671 | 15,829 | ||||||
Swift Energy Co. * | 615 | 10,277 | ||||||
T.G.C. Industries, Inc. * | 707 | 5,204 | ||||||
Targa Resources Corp. | 259 | 13,191 | ||||||
Teekay Tankers Ltd., Class A | 1,281 | 4,407 | ||||||
Tesco Corp. * | 617 | 5,436 | ||||||
TETRA Technologies, Inc. * | 724 | 3,873 | ||||||
Triangle Petroleum Corp. * | 1,061 | 6,780 | ||||||
Union Drilling, Inc. * | 979 | 6,354 | ||||||
Uranium Energy Corp. * | 1,212 | 2,860 | ||||||
VAALCO Energy, Inc. * | 727 | 5,940 | ||||||
W&T Offshore, Inc. | 463 | 7,848 | ||||||
Western Refining, Inc. | 722 | 17,956 | ||||||
Willbros Group, Inc. * | 1,078 | 5,509 | ||||||
8,470,521 | ||||||||
Food & Staples Retailing 3.0% | ||||||||
Casey’s General Stores, Inc. | 9,721 | 501,118 | ||||||
Harris Teeter Supermarkets, Inc. | 589 | 22,058 | ||||||
PriceSmart, Inc. | 5,784 | 480,014 | ||||||
Rite Aid Corp. * | 5,385 | 6,247 | ||||||
Spartan Stores, Inc. | 274 | 3,935 | ||||||
SUPERVALU, Inc. | 1,788 | 5,561 | ||||||
Susser Holdings Corp. * | 282 | 10,135 | ||||||
The Andersons, Inc. | 312 | 12,255 | ||||||
The Fresh Market, Inc. * | 28,451 | 1,613,456 | ||||||
The Pantry, Inc. * | 590 | 7,826 | ||||||
United Natural Foods, Inc. * | 36,408 | 1,938,362 | ||||||
Village Super Market, Inc., Class A | 208 | 7,627 | ||||||
Weis Markets, Inc. | 99 | 4,075 | ||||||
4,612,669 | ||||||||
Food, Beverage & Tobacco 2.2% | ||||||||
Annie’s, Inc. * | 138 | 5,451 | ||||||
B&G Foods, Inc. | 714 | 21,613 | ||||||
Cal-Maine Foods, Inc. | 152 | 6,556 | ||||||
Central European Distribution Corp. * | 1,113 | 2,872 | ||||||
Chiquita Brands International, Inc. * | 1,036 | 7,470 | ||||||
Cott Corp. * | 71,303 | 545,468 | ||||||
Darling International, Inc. * | 1,618 | 26,746 | ||||||
Diamond Foods, Inc. | 440 | 8,149 | ||||||
Dole Food Co., Inc. * | 553 | 6,962 | ||||||
Fresh Del Monte Produce, Inc. | 595 | 14,976 |
16 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
J&J Snack Foods Corp. | 97 | 5,555 | ||||||
Lancaster Colony Corp. | 278 | 20,233 | ||||||
Pilgrim’s Pride Corp. * | 845 | 4,757 | ||||||
Post Holdings, Inc. * | 8,073 | 254,703 | ||||||
Sanderson Farms, Inc. | 338 | 15,308 | ||||||
Smart Balance, Inc. * | 28,948 | 344,481 | ||||||
Snyders-Lance, Inc. | 733 | 18,574 | ||||||
Star Scientific, Inc. * | 1,181 | 3,578 | ||||||
The Boston Beer Co., Inc., Class A * | 137 | 14,738 | ||||||
The Hain Celestial Group, Inc. * | 5,729 | 331,136 | ||||||
Tootsie Roll Industries, Inc. | 27,215 | 725,280 | ||||||
TreeHouse Foods, Inc. * | 16,446 | 880,683 | ||||||
Universal Corp. | 361 | 17,891 | ||||||
Vector Group Ltd. | 836 | 13,761 | ||||||
3,296,941 | ||||||||
Health Care Equipment & Services 9.9% | ||||||||
Abaxis, Inc. * | 408 | 15,006 | ||||||
ABIOMED, Inc. * | 597 | 11,833 | ||||||
Acadia Healthcare Co., Inc. * | 13,490 | 277,489 | ||||||
Accretive Health, Inc. * | 626 | 7,381 | ||||||
Accuray, Inc. * | 991 | 6,897 | ||||||
Air Methods Corp. * | 3,736 | 409,578 | ||||||
Align Technology, Inc. * | 940 | 24,985 | ||||||
Almost Family, Inc. * | 319 | 6,613 | ||||||
Amedisys, Inc. * | 709 | 7,827 | ||||||
AmSurg Corp. * | 21,625 | 616,745 | ||||||
Analogic Corp. | 25,184 | 1,855,053 | ||||||
AngioDynamics, Inc. * | 540 | 5,794 | ||||||
Antares Pharma, Inc. * | 750 | 2,858 | ||||||
ArthroCare Corp. * | 454 | 13,656 | ||||||
athenahealth, Inc. * | 20,597 | 1,324,181 | ||||||
Atrion Corp. | 18 | 3,658 | ||||||
Bio-Reference Laboratories, Inc. * | 508 | 14,102 | ||||||
BioScrip, Inc. * | 788 | 7,257 | ||||||
Cantel Medical Corp. | 196 | 5,098 | ||||||
Centene Corp. * | 677 | 25,712 | ||||||
Chemed Corp. | 304 | 20,444 | ||||||
Computer Programs & Systems, Inc. | 209 | 10,201 | ||||||
Conceptus, Inc. * | 428 | 8,064 | ||||||
CONMED Corp. | 474 | 13,111 | ||||||
CorVel Corp. * | 6,800 | 289,204 | ||||||
Cyberonics, Inc. * | 8,249 | 381,516 | ||||||
Cynosure, Inc., Class A * | 56 | 1,475 | ||||||
DexCom, Inc. * | 118,271 | 1,549,350 | ||||||
Emeritus Corp. * | 252 | 5,657 | ||||||
Endologix, Inc. * | 998 | 13,433 | ||||||
ExamWorks Group, Inc. * | 297 | 4,164 | ||||||
Gentiva Health Services, Inc. * | 688 | 6,467 | ||||||
Greatbatch, Inc. * | 463 | 10,177 | ||||||
Haemonetics Corp. * | 3,563 | 291,097 | ||||||
Hanger, Inc. * | 606 | 15,362 | ||||||
Health Management Associates, Inc., Class A * | 188,077 | 1,372,962 | ||||||
HealthSouth Corp. * | 1,124 | 24,874 | ||||||
HealthStream, Inc. * | 6,136 | 156,713 | ||||||
Healthways, Inc. * | 898 | 8,738 | ||||||
HeartWare International, Inc. * | 144 | 12,093 | ||||||
HMS Holdings Corp. * | 64,576 | 1,491,060 | ||||||
ICU Medical, Inc. * | 16,134 | 957,230 | ||||||
Insulet Corp. * | 593 | 12,578 | ||||||
Integra LifeSciences Holdings Corp. * | 303 | 11,590 | ||||||
Invacare Corp. | 587 | 8,013 | ||||||
IPC The Hospitalist Co., Inc. * | 160 | 5,518 | ||||||
Kindred Healthcare, Inc. * | 372 | 3,646 | ||||||
Landauer, Inc. | 74 | 4,288 | ||||||
LHC Group, Inc. * | 471 | 8,252 | ||||||
Magellan Health Services, Inc. * | 249 | 12,487 | ||||||
MAKO Surgical Corp. * | 590 | 8,939 | ||||||
Masimo Corp. * | 717 | 15,752 | ||||||
MedAssets, Inc. * | 683 | 12,110 | ||||||
Medidata Solutions, Inc. * | 315 | 13,236 | ||||||
Mediware Information Systems * | 257 | 5,639 | ||||||
Merge Healthcare, Inc. * | 1,173 | 4,000 | ||||||
Meridian Bioscience, Inc. | 687 | 13,568 | ||||||
Merit Medical Systems, Inc. * | 791 | 11,422 | ||||||
Metropolitan Health Networks, Inc. * | 514 | 5,618 | ||||||
Molina Healthcare, Inc. * | 333 | 8,348 | ||||||
MWI Veterinary Supply, Inc. * | 3,307 | 347,301 | ||||||
National Healthcare Corp. | 93 | 4,429 | ||||||
Natus Medical, Inc. * | 707 | 7,989 | ||||||
Neogen Corp. * | 172 | 7,360 | ||||||
NuVasive, Inc. * | 555 | 8,003 | ||||||
NxStage Medical, Inc. * | 678 | 7,594 | ||||||
Omnicell, Inc. * | 632 | 9,215 | ||||||
OraSure Technologies, Inc. * | 921 | 8,344 | ||||||
Orthofix International N.V. * | 107 | 4,244 | ||||||
Owens & Minor, Inc. | 910 | 25,908 | ||||||
PharMerica Corp. * | 487 | 5,951 | ||||||
PSS World Medical, Inc. * | 815 | 23,325 | ||||||
Quality Systems, Inc. | 584 | 10,191 | ||||||
Quidel Corp. * | 11,507 | 201,718 | ||||||
Rockwell Medical, Inc. * | 418 | 3,005 | ||||||
Select Medical Holdings Corp. * | 656 | 6,947 | ||||||
Spectranetics Corp. * | 680 | 9,901 | ||||||
STAAR Surgical Co. * | 395 | 2,544 | ||||||
STERIS Corp. | 12,218 | 435,083 | ||||||
Sun Healthcare Group, Inc. * | 971 | 8,215 | ||||||
Sunrise Senior Living, Inc. * | 817 | 11,757 | ||||||
SurModics, Inc. * | 218 | 3,920 | ||||||
Symmetry Medical, Inc. * | 969 | 8,876 | ||||||
Team Health Holdings, Inc. * | 6,609 | 175,866 | ||||||
Teleflex, Inc. | 22,824 | 1,550,891 | ||||||
The Ensign Group, Inc. | 165 | 4,811 | ||||||
The Providence Service Corp. * | 286 | 2,917 | ||||||
Triple-S Management Corp., Class B * | 424 | 7,649 | ||||||
U.S. Physical Therapy, Inc. | 16,100 | 429,870 | ||||||
Universal American Corp. * | 375 | 3,390 | ||||||
Vascular Solutions, Inc. * | 200 | 3,014 | ||||||
Volcano Corp. * | 9,104 | 260,556 | ||||||
WellCare Health Plans, Inc. * | 451 | 21,468 | ||||||
West Pharmaceutical Services, Inc. | 423 | 22,787 | ||||||
Wright Medical Group, Inc. * | 704 | 14,305 | ||||||
15,109,463 | ||||||||
Household & Personal Products 0.0% | ||||||||
Central Garden & Pet Co., Class A * | 440 | 4,959 | ||||||
Elizabeth Arden, Inc. * | 249 | 11,748 | ||||||
Medifast, Inc. * | 317 | 8,090 | ||||||
Orchids Paper Products Co. | 165 | 3,166 | ||||||
Prestige Brands Holdings, Inc. * | 755 | 13,129 | ||||||
Spectrum Brands Holdings, Inc. * | 336 | 15,285 |
See financial notes 17
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
USANA Health Sciences, Inc. * | 138 | 5,953 | ||||||
WD-40 Co. | 99 | 4,738 | ||||||
67,068 | ||||||||
Insurance 1.4% | ||||||||
Alterra Capital Holdings Ltd. | 1,229 | 30,024 | ||||||
American Equity Investment Life Holding Co. | 1,010 | 11,625 | ||||||
American Safety Insurance Holdings Ltd. * | 353 | 5,951 | ||||||
AMERISAFE, Inc. * | 14,781 | 388,001 | ||||||
AmTrust Financial Services, Inc. | 485 | 11,737 | ||||||
Argo Group International Holdings Ltd. | 467 | 16,065 | ||||||
Assured Guaranty Ltd. | 21,100 | 293,079 | ||||||
Citizens, Inc. * | 419 | 4,270 | ||||||
CNO Financial Group, Inc. | 2,377 | 22,772 | ||||||
eHealth, Inc. * | 437 | 9,483 | ||||||
Employers Holdings, Inc. | 690 | 12,592 | ||||||
Enstar Group Ltd. * | 83 | 8,300 | ||||||
FBL Financial Group, Inc., Class A | 152 | 5,188 | ||||||
First American Financial Corp. | 1,317 | 29,962 | ||||||
Flagstone Reinsurance Holdings S.A. | 502 | 4,438 | ||||||
Greenlight Capital Re Ltd., Class A * | 491 | 12,545 | ||||||
Hilltop Holdings, Inc. * | 635 | 8,630 | ||||||
Horace Mann Educators Corp. | 728 | 13,985 | ||||||
Infinity Property & Casualty Corp. | 74 | 4,226 | ||||||
Maiden Holdings Ltd. | 628 | 5,307 | ||||||
Meadowbrook Insurance Group, Inc. | 979 | 5,502 | ||||||
Montpelier Re Holdings Ltd. | 694 | 15,872 | ||||||
National Financial Partners Corp. * | 758 | 13,909 | ||||||
OneBeacon Insurance Group Ltd., Class A | 638 | 8,613 | ||||||
Platinum Underwriters Holdings Ltd. | 10,492 | 465,845 | ||||||
Presidential Life Corp. | 567 | 7,927 | ||||||
Primerica, Inc. | 19,787 | 559,181 | ||||||
RLI Corp. | 269 | 18,340 | ||||||
Safety Insurance Group, Inc. | 100 | 4,635 | ||||||
Seabright Holdings, Inc. | 692 | 7,591 | ||||||
Selective Insurance Group, Inc. | 861 | 15,920 | ||||||
Stewart Information Services Corp. | 419 | 9,771 | ||||||
Symetra Financial Corp. | 1,224 | 14,627 | ||||||
The Navigators Group, Inc. * | 89 | 4,724 | ||||||
Tower Group, Inc. | 623 | 11,226 | ||||||
United Fire Group, Inc. | 216 | 5,134 | ||||||
2,066,997 | ||||||||
Materials 2.5% | ||||||||
A. M. Castle & Co. * | 579 | 7,035 | ||||||
A. Schulman, Inc. | 536 | 13,754 | ||||||
AK Steel Holding Corp. | 2,009 | 10,125 | ||||||
AMCOL International Corp. | 426 | 13,453 | ||||||
American Vanguard Corp. | 9,604 | 343,151 | ||||||
AptarGroup, Inc. | 10,300 | 528,184 | ||||||
Arabian American Development Co. * | 682 | 5,824 | ||||||
Balchem Corp. | 442 | 15,395 | ||||||
Boise, Inc. | 1,320 | 11,075 | ||||||
Buckeye Technologies, Inc. | 577 | 15,117 | ||||||
Calgon Carbon Corp. * | 747 | 9,255 | ||||||
Century Aluminum Co. * | 969 | 6,928 | ||||||
Chemtura Corp. * | 1,191 | 18,973 | ||||||
Clearwater Paper Corp. * | 378 | 14,946 | ||||||
Coeur d’Alene Mines Corp. * | 1,298 | 40,121 | ||||||
Deltic Timber Corp. | 7,966 | 540,573 | ||||||
Eagle Materials, Inc. | 659 | 34,907 | ||||||
Ferro Corp. * | 1,023 | 2,691 | ||||||
Flotek Industries, Inc. * | 880 | 9,777 | ||||||
FutureFuel Corp. | 348 | 4,103 | ||||||
General Moly, Inc. * | 1,289 | 4,769 | ||||||
Georgia Gulf Corp. | 447 | 15,819 | ||||||
Globe Specialty Metals, Inc. | 678 | 10,190 | ||||||
Gold Resource Corp. | 374 | 6,253 | ||||||
Golden Star Resources Ltd. * | 2,257 | 4,514 | ||||||
Graphic Packaging Holding Co. * | 1,530 | 9,058 | ||||||
Greif, Inc., Class A | 7,000 | 293,720 | ||||||
H.B. Fuller Co. | 728 | 22,131 | ||||||
Haynes International, Inc. | 111 | 5,626 | ||||||
Hecla Mining Co. | 2,963 | 19,497 | ||||||
Horsehead Holding Corp. * | 873 | 7,901 | ||||||
Innophos Holdings, Inc. | 339 | 16,153 | ||||||
Innospec, Inc. * | 12,859 | 416,375 | ||||||
Kaiser Aluminum Corp. | 195 | 11,813 | ||||||
KapStone Paper & Packaging Corp. * | 645 | 14,171 | ||||||
Koppers Holdings, Inc. | 8,648 | 308,734 | ||||||
Kraton Performance Polymers, Inc. * | 526 | 11,477 | ||||||
Landec Corp. * | 585 | 6,330 | ||||||
Louisiana-Pacific Corp. * | 1,943 | 30,680 | ||||||
LSB Industries, Inc. * | 330 | 13,289 | ||||||
Materion Corp. | 153 | 3,205 | ||||||
McEwen Mining, Inc. * | 2,019 | 9,812 | ||||||
Minerals Technologies, Inc. | 149 | 10,677 | ||||||
Myers Industries, Inc. | 598 | 8,868 | ||||||
Neenah Paper, Inc. | 178 | 4,610 | ||||||
Noranda Aluminum Holding Corp. | 508 | 3,114 | ||||||
Olin Corp. | 1,038 | 21,528 | ||||||
OM Group, Inc. * | 512 | 10,358 | ||||||
P.H. Glatfelter Co. | 627 | 11,167 | ||||||
PolyOne Corp. | 832 | 15,750 | ||||||
Quaker Chemical Corp. | 100 | 5,299 | ||||||
Resolute Forest Products * | 574 | 7,003 | ||||||
RTI International Metals, Inc. * | 532 | 12,124 | ||||||
Schnitzer Steel Industries, Inc., Class A | 373 | 10,634 | ||||||
Schweitzer-Mauduit International, Inc. | 284 | 9,949 | ||||||
Sensient Technologies Corp. | 8,588 | 312,432 | ||||||
Stepan Co. | 50 | 4,790 | ||||||
Stillwater Mining Co. * | 1,215 | 12,648 | ||||||
SunCoke Energy, Inc. * | 1,128 | 18,127 | ||||||
Texas Industries, Inc. * | 321 | 13,845 | ||||||
TPC Group, Inc. * | 140 | 6,297 | ||||||
Tredegar Corp. | 361 | 6,126 | ||||||
Wausau Paper Corp. | 1,052 | 8,700 | ||||||
Worthington Industries, Inc. | 699 | 15,112 | ||||||
Zep, Inc. | 28,564 | 409,322 | ||||||
Zoltek Cos., Inc. * | 696 | 4,768 | ||||||
3,830,152 | ||||||||
Media 2.7% | ||||||||
Arbitron, Inc. | 19,930 | 724,655 | ||||||
Belo Corp., Class A | 789 | 5,902 | ||||||
Carmike Cinemas, Inc. * | 563 | 7,668 |
18 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Central European Media Enterprises Ltd., Class A * | 775 | 4,154 | ||||||
Digital Generation, Inc. * | 964 | 8,965 | ||||||
Entercom Communications Corp., Class A * | 797 | 5,188 | ||||||
Fisher Communications, Inc. | 222 | 5,603 | ||||||
Harte-Hanks, Inc. | 433 | 2,412 | ||||||
Lions Gate Entertainment Corp. * | 20,548 | 342,741 | ||||||
Live Nation Entertainment, Inc. * | 1,257 | 11,502 | ||||||
Meredith Corp. | 551 | 18,442 | ||||||
Morningstar, Inc. | 22,952 | 1,445,517 | ||||||
National CineMedia, Inc. | 417 | 6,447 | ||||||
Scholastic Corp. | 454 | 14,977 | ||||||
Sinclair Broadcast Group, Inc., Class A | 709 | 8,933 | ||||||
The E.W. Scripps Co., Class A * | 132,232 | 1,402,981 | ||||||
The New York Times Co., Class A * | 1,084 | 8,867 | ||||||
Valassis Communications, Inc. * | 705 | 18,344 | ||||||
World Wrestling Entertainment, Inc., Class A | 1,030 | 8,333 | ||||||
4,051,631 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.6% | ||||||||
Achillion Pharmaceuticals, Inc. * | 937 | 8,845 | ||||||
Acorda Therapeutics, Inc. * | 622 | 14,897 | ||||||
Affymax, Inc. * | 16,937 | 385,994 | ||||||
Affymetrix, Inc. * | 895 | 2,837 | ||||||
Akorn, Inc. * | 22,272 | 267,487 | ||||||
Alkermes plc * | 17,282 | 320,235 | ||||||
Alnylam Pharmaceuticals, Inc. * | 844 | 13,647 | ||||||
AMAG Pharmaceuticals, Inc. * | 395 | 6,115 | ||||||
Arena Pharmaceuticals, Inc. * | 2,838 | 22,449 | ||||||
ArQule, Inc. * | 769 | 1,930 | ||||||
Array BioPharma, Inc. * | 72 | 298 | ||||||
Auxilium Pharmaceuticals, Inc. * | 772 | 15,811 | ||||||
AVANIR Pharmaceuticals, Inc., Class A * | 1,614 | 4,616 | ||||||
AVEO Pharmaceuticals, Inc. * | 805 | 6,142 | ||||||
BioDelivery Sciences International, Inc. * | 653 | 3,337 | ||||||
Cadence Pharmaceuticals, Inc. * | 1,048 | 3,710 | ||||||
Cambrex Corp. * | 771 | 9,314 | ||||||
Celldex Therapeutics, Inc. * | 303 | 1,670 | ||||||
Cepheid, Inc. * | 815 | 24,703 | ||||||
Charles River Laboratories International, Inc. * | 22,700 | 847,164 | ||||||
Cubist Pharmaceuticals, Inc. * | 7,062 | 302,960 | ||||||
Curis, Inc. * | 2,066 | 7,871 | ||||||
Dendreon Corp. * | 2,516 | 9,561 | ||||||
DepoMed, Inc. * | 835 | 4,718 | ||||||
Dynavax Technologies Corp. * | 2,128 | 8,810 | ||||||
Emergent Biosolutions, Inc. * | 676 | 8,984 | ||||||
Endocyte, Inc. * | 935 | 8,948 | ||||||
Enzon Pharmaceuticals, Inc. * | 1,295 | 8,508 | ||||||
Exact Sciences Corp. * | 1,113 | 10,529 | ||||||
Exelixis, Inc. * | 1,072 | 5,092 | ||||||
Fluidigm Corp. * | 308 | 4,648 | ||||||
Genomic Health, Inc. * | 321 | 10,031 | ||||||
Halozyme Therapeutics, Inc. * | 1,180 | 6,242 | ||||||
Hi-Tech Pharmacal Co., Inc. * | 157 | 4,922 | ||||||
ICON plc Sponsored ADR * | 37,800 | 889,812 | ||||||
Idenix Pharmaceuticals, Inc. * | 816 | 2,905 | ||||||
ImmunoGen, Inc. * | 737 | 8,166 | ||||||
Immunomedics, Inc. * | 1,236 | 4,091 | ||||||
Impax Laboratories, Inc. * | 631 | 13,409 | ||||||
Infinity Pharmaceuticals, Inc. * | 193 | 4,321 | ||||||
InterMune, Inc. * | 846 | 6,726 | ||||||
Ironwood Pharmaceuticals, Inc. * | 1,036 | 12,049 | ||||||
Isis Pharmaceuticals, Inc. * | 1,124 | 9,723 | ||||||
Jazz Pharmaceuticals plc * | 482 | 25,898 | ||||||
Lexicon Pharmaceuticals, Inc. * | 596 | 1,234 | ||||||
Luminex Corp. * | 628 | 10,098 | ||||||
MannKind Corp. * | 1,477 | 2,792 | ||||||
MAP Pharmaceuticals, Inc. * | 588 | 9,067 | ||||||
Maxygen, Inc. | 1,283 | 3,130 | ||||||
Medicis Pharmaceutical Corp., Class A | 748 | 32,471 | ||||||
Momenta Pharmaceuticals, Inc. * | 705 | 8,939 | ||||||
Myriad Genetics, Inc. * | 11,100 | 290,487 | ||||||
Nektar Therapeutics * | 1,261 | 11,349 | ||||||
Neurocrine Biosciences, Inc. * | 976 | 7,154 | ||||||
NPS Pharmaceuticals, Inc. * | 1,057 | 9,767 | ||||||
Obagi Medical Products, Inc. * | 568 | 7,003 | ||||||
Oncothyreon, Inc. * | 1,086 | 5,517 | ||||||
Opko Health, Inc. * | 837 | 3,582 | ||||||
Optimer Pharmaceuticals, Inc. * | 740 | 7,060 | ||||||
PAREXEL International Corp. * | 878 | 26,946 | ||||||
PDL Biopharma, Inc. | 1,198 | 8,925 | ||||||
Pharmacyclics, Inc. * | 671 | 40,978 | ||||||
Progenics Pharmaceuticals, Inc. * | 448 | 1,277 | ||||||
Questcor Pharmaceuticals, Inc. | 697 | 17,760 | ||||||
Raptor Pharmaceutical Corp. * | 1,137 | 5,287 | ||||||
Rigel Pharmaceuticals, Inc. * | 997 | 8,883 | ||||||
Sagent Pharmaceuticals, Inc. * | 206 | 3,106 | ||||||
Santarus, Inc. * | 834 | 7,614 | ||||||
Seattle Genetics, Inc. * | 1,184 | 29,789 | ||||||
Sequenom, Inc. * | 1,119 | 3,480 | ||||||
Spectrum Pharmaceuticals, Inc. * | 952 | 10,624 | ||||||
Synageva BioPharma Corp. * | 106 | 4,482 | ||||||
Synta Pharmaceuticals Corp. * | 1,116 | 8,783 | ||||||
Targacept, Inc. * | 303 | 1,236 | ||||||
The Medicines Co. * | 692 | 15,169 | ||||||
Theravance, Inc. * | 732 | 16,477 | ||||||
Threshold Pharmaceuticals, Inc. * | 63 | 259 | ||||||
Transcept Pharmaceuticals, Inc. * | 554 | 2,820 | ||||||
Trius Therapeutics, Inc. * | 1,148 | 6,291 | ||||||
Vical, Inc. * | 1,240 | 4,228 | ||||||
ViroPharma, Inc. * | 980 | 24,745 | ||||||
VIVUS, Inc. * | 1,365 | 20,338 | ||||||
ZIOPHARM Oncology, Inc. * | 1,259 | 5,930 | ||||||
4,025,202 | ||||||||
Real Estate 4.3% | ||||||||
Acadia Realty Trust | 696 | 17,873 | ||||||
AG Mortgage Investment Trust, Inc. | 427 | 10,227 | ||||||
Agree Realty Corp. | 205 | 5,174 | ||||||
Alexander’s, Inc. | 13 | 5,771 | ||||||
American Assets Trust, Inc. | 432 | 11,737 | ||||||
American Capital Mortgage Investment Corp. | 640 | 15,955 | ||||||
American Realty Capital Trust, Inc. | 1,499 | 16,894 | ||||||
Anworth Mortgage Asset Corp. | 921 | 5,655 |
See financial notes 19
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Apollo Commercial Real Estate Finance, Inc. | 505 | 8,540 | ||||||
Apollo Residential Mortgage, Inc. | 505 | 11,196 | ||||||
Ares Commercial Real Estate Corp. | 413 | 6,971 | ||||||
ARMOUR Residential REIT, Inc. | 2,884 | 20,765 | ||||||
Ashford Hospitality Trust | 944 | 8,109 | ||||||
Associated Estates Realty Corp. | 936 | 14,031 | ||||||
Campus Crest Communities, Inc. | 29,254 | 324,427 | ||||||
CapLease, Inc. | 1,754 | 8,998 | ||||||
Capstead Mortgage Corp. | 1,033 | 12,727 | ||||||
Cedar Realty Trust, Inc. | 1,016 | 5,375 | ||||||
Chesapeake Lodging Trust | 622 | 11,725 | ||||||
Colonial Properties Trust | 1,155 | 24,983 | ||||||
Colony Financial, Inc. | 628 | 12,566 | ||||||
Coresite Realty Corp. | 441 | 10,024 | ||||||
Cousins Properties, Inc. | 947 | 7,964 | ||||||
CreXus Investment Corp. | 1,040 | 11,700 | ||||||
CubeSmart | 1,762 | 23,117 | ||||||
CYS Investments, Inc. | 1,863 | 25,001 | ||||||
DCT Industrial Trust, Inc. | 2,844 | 18,344 | ||||||
DiamondRock Hospitality Co. | 37,258 | 315,948 | ||||||
DuPont Fabros Technology, Inc. | 889 | 19,078 | ||||||
Dynex Capital, Inc. | 1,211 | 12,013 | ||||||
EastGroup Properties, Inc. | 404 | 21,032 | ||||||
Education Realty Trust, Inc. | 1,165 | 12,267 | ||||||
Entertainment Properties Trust | 618 | 27,470 | ||||||
Equity One, Inc. | 813 | 16,992 | ||||||
Excel Trust, Inc. | 688 | 8,462 | ||||||
FelCor Lodging Trust, Inc. * | 1,063 | 4,677 | ||||||
First Industrial Realty Trust, Inc. * | 851 | 11,361 | ||||||
First Potomac Realty Trust | 864 | 10,290 | ||||||
Forestar Group, Inc. * | 464 | 7,429 | ||||||
Franklin Street Properties Corp. | 1,246 | 14,217 | ||||||
Getty Realty Corp. | 550 | 10,070 | ||||||
Gladstone Commercial Corp. | 236 | 4,349 | ||||||
Glimcher Realty Trust | 1,953 | 20,838 | ||||||
Government Properties Income Trust | 586 | 13,003 | ||||||
Healthcare Realty Trust, Inc. | 1,046 | 24,570 | ||||||
Hersha Hospitality Trust | 1,259 | 5,754 | ||||||
Highwoods Properties, Inc. | 905 | 29,186 | ||||||
Hudson Pacific Properties, Inc. | 611 | 11,591 | ||||||
Inland Real Estate Corp. | 1,250 | 10,212 | ||||||
Invesco Mortgage Capital, Inc. | 1,384 | 29,659 | ||||||
Investors Real Estate Trust | 823 | 6,930 | ||||||
iStar Financial, Inc. * | 1,083 | 9,455 | ||||||
Kennedy-Wilson Holdings, Inc. | 329 | 4,672 | ||||||
LaSalle Hotel Properties | 64,694 | 1,548,774 | ||||||
Lexington Realty Trust | 1,146 | 10,875 | ||||||
LTC Properties, Inc. | 485 | 16,010 | ||||||
Mack-Cali Realty Corp. | 10,200 | 265,098 | ||||||
Medical Properties Trust, Inc. | 1,253 | 14,384 | ||||||
Monmouth Real Estate Investment Corp., Class A | 752 | 8,347 | ||||||
National Health Investors, Inc. | 197 | 10,522 | ||||||
New York Mortgage Trust, Inc. | 993 | 6,802 | ||||||
NorthStar Realty Finance Corp. | 1,614 | 10,604 | ||||||
Omega Healthcare Investors, Inc. | 1,468 | 33,676 | ||||||
Parkway Properties, Inc. | 404 | 5,563 | ||||||
Pebblebrook Hotel Trust | 785 | 16,658 | ||||||
Pennsylvania Real Estate Investment Trust | 932 | 15,406 | ||||||
PennyMac Mortgage Investment Trust | 556 | 14,145 | ||||||
Potlatch Corp. | 420 | 16,162 | ||||||
PS Business Parks, Inc. | 150 | 9,619 | ||||||
RAIT Financial Trust | 1,484 | 8,281 | ||||||
Ramco-Gershenson Properties Trust | 811 | 10,511 | ||||||
Redwood Trust, Inc. | 81,754 | 1,274,545 | ||||||
Resource Capital Corp. | 1,460 | 8,556 | ||||||
Retail Opportunity Investments Corp. | 927 | 11,736 | ||||||
RLJ Lodging Trust | 1,078 | 19,210 | ||||||
Rouse Properties, Inc. | 488 | 7,349 | ||||||
Sabra Health Care REIT, Inc. | 722 | 16,043 | ||||||
Saul Centers, Inc. | 205 | 8,870 | ||||||
Select Income REIT | 328 | 8,105 | ||||||
Sovran Self Storage, Inc. | 415 | 23,987 | ||||||
STAG Industrial, Inc. | 666 | 11,535 | ||||||
Starwood Property Trust, Inc. | 1,427 | 32,707 | ||||||
Strategic Hotels & Resorts, Inc. * | 1,779 | 9,767 | ||||||
Summit Hotel Properties, Inc. | 33,710 | 278,445 | ||||||
Sun Communities, Inc. | 354 | 14,861 | ||||||
Sunstone Hotel Investors, Inc. * | 1,227 | 12,123 | ||||||
Tejon Ranch Co. * | 159 | 4,760 | ||||||
Terreno Realty Corp. | 299 | 4,563 | ||||||
Two Harbors Investment Corp. | 3,185 | 37,997 | ||||||
Universal Health Realty Income Trust | 106 | 5,241 | ||||||
Urstadt Biddle Properties, Inc., Class A | 224 | 4,243 | ||||||
Washington Real Estate Investment Trust | 714 | 18,357 | ||||||
Western Asset Mortgage Capital Corp. | 505 | 10,832 | ||||||
Whitestone REIT, Class B | 404 | 5,442 | ||||||
Zillow, Inc. * | 39,447 | 1,473,740 | ||||||
6,641,825 | ||||||||
Retailing 5.6% | ||||||||
Aeropostale, Inc. * | 1,044 | 12,476 | ||||||
ANN, Inc. * | 10,641 | 374,138 | ||||||
Asbury Automotive Group, Inc. * | 518 | 16,431 | ||||||
Ascena Retail Group, Inc. * | 25,200 | 498,960 | ||||||
Barnes & Noble, Inc. * | 342 | 5,759 | ||||||
Bebe Stores, Inc. | 766 | 3,102 | ||||||
Blue Nile, Inc. * | 112 | 4,230 | ||||||
Body Central Corp. * | 677 | 6,763 | ||||||
Brown Shoe Co., Inc. | 764 | 12,056 | ||||||
Cabela’s, Inc. * | 6,184 | 277,105 | ||||||
Chico’s FAS, Inc. | 118,937 | 2,212,228 | ||||||
Core-Mark Holding Co., Inc. | 105 | 5,026 | ||||||
Destination Maternity Corp. | 415 | 7,868 | ||||||
Express, Inc. * | 813 | 9,049 | ||||||
Francesca’s Holdings Corp. * | 331 | 9,774 | ||||||
Fred’s, Inc., Class A | 34,210 | 463,545 | ||||||
Genesco, Inc. * | 345 | 19,768 | ||||||
Group 1 Automotive, Inc. | 250 | 15,503 | ||||||
Hibbett Sports, Inc. * | 5,504 | 297,161 | ||||||
Hot Topic, Inc. | 623 | 5,358 | ||||||
HSN, Inc. | 580 | 30,172 | ||||||
Jos. A. Bank Clothiers, Inc. * | 408 | 19,090 | ||||||
Kirkland’s, Inc. * | 479 | 4,594 | ||||||
Lithia Motors, Inc., Class A | 353 | 12,073 | ||||||
Lumber Liquidators Holdings, Inc. * | 444 | 24,784 | ||||||
Monro Muffler Brake, Inc. | 33,227 | 1,127,060 | ||||||
Nutrisystem, Inc. | 811 | 7,810 |
20 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Office Depot, Inc. * | 1,755 | 4,352 | ||||||
OfficeMax, Inc. | 1,012 | 7,438 | ||||||
Penske Automotive Group, Inc. | 689 | 21,083 | ||||||
PetMed Express, Inc. | 701 | 7,641 | ||||||
Pier 1 Imports, Inc. | 1,187 | 24,215 | ||||||
Pool Corp. | 614 | 25,862 | ||||||
Rent-A-Center, Inc. | 645 | 21,498 | ||||||
rue21, Inc. * | 288 | 8,672 | ||||||
Saks, Inc. * | 932 | 9,581 | ||||||
Select Comfort Corp. * | 849 | 23,628 | ||||||
Shutterfly, Inc. * | 572 | 17,309 | ||||||
Sonic Automotive, Inc., Class A | 732 | 14,201 | ||||||
Stage Stores, Inc. | 28,186 | 690,557 | ||||||
Stein Mart, Inc. * | 603 | 4,740 | ||||||
The Buckle, Inc. | 219 | 9,892 | ||||||
The Cato Corp., Class A | 27,166 | 770,971 | ||||||
The Children’s Place Retail Stores, Inc. * | 385 | 22,496 | ||||||
The Finish Line, Inc., Class A | 661 | 13,752 | ||||||
The Men’s Wearhouse, Inc. | 598 | 19,608 | ||||||
The Pep Boys - Manny, Moe & Jack | 705 | 7,043 | ||||||
Tilly’s, Inc., Class A * | 145 | 2,340 | ||||||
Tractor Supply Co. | 7,400 | 712,176 | ||||||
Tuesday Morning Corp. * | 1,317 | 7,862 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | 3,800 | 350,436 | ||||||
Vitamin Shoppe, Inc. * | 4,984 | 285,284 | ||||||
VOXX International Corp. * | 627 | 3,900 | ||||||
Zumiez, Inc. * | 232 | 5,872 | ||||||
8,574,292 | ||||||||
Semiconductors & Semiconductor Equipment 1.2% | ||||||||
Advanced Energy Industries, Inc. * | 853 | 10,074 | ||||||
Amkor Technology, Inc. * | 1,019 | 4,402 | ||||||
Applied Micro Circuits Corp. * | 734 | 4,257 | ||||||
ATMI, Inc. * | 546 | 10,784 | ||||||
AXT, Inc. * | 1,100 | 3,531 | ||||||
Brooks Automation, Inc. | 992 | 7,162 | ||||||
Cabot Microelectronics Corp. | 357 | 10,639 | ||||||
Cavium, Inc. * | 10,886 | 361,198 | ||||||
CEVA, Inc. * | 595 | 9,014 | ||||||
Cirrus Logic, Inc. * | 931 | 37,948 | ||||||
Cymer, Inc. * | 437 | 34,825 | ||||||
Diodes, Inc. * | 365 | 5,533 | ||||||
Entegris, Inc. * | 1,145 | 9,400 | ||||||
Entropic Communications, Inc. * | 936 | 4,502 | ||||||
First Solar, Inc. * | 980 | 23,824 | ||||||
FormFactor, Inc. * | 1,114 | 5,080 | ||||||
GT Advanced Technologies, Inc. * | 983 | 4,266 | ||||||
Hittite Microwave Corp. * | 440 | 24,922 | ||||||
Inphi Corp. * | 298 | 2,494 | ||||||
Integrated Device Technology, Inc. * | 1,097 | 5,968 | ||||||
International Rectifier Corp. * | 572 | 8,860 | ||||||
Intersil Corp., Class A | 1,102 | 7,769 | ||||||
Lattice Semiconductor Corp. * | 1,055 | 4,093 | ||||||
LTX-Credence Corp. * | 1,167 | 6,500 | ||||||
Mellanox Technologies Ltd. * | 3,400 | 261,698 | ||||||
MEMC Electronic Materials, Inc. * | 2,534 | 6,386 | ||||||
Micrel, Inc. | 970 | 9,399 | ||||||
Microsemi Corp. * | 1,110 | 21,312 | ||||||
Mindspeed Technologies, Inc. * | 764 | 2,605 | ||||||
MIPS Technologies, Inc. * | 911 | 6,368 | ||||||
MKS Instruments, Inc. | 747 | 17,652 | ||||||
Monolithic Power Systems, Inc. * | 591 | 11,483 | ||||||
Nanometrics, Inc. * | 628 | 8,641 | ||||||
OmniVision Technologies, Inc. * | 900 | 12,870 | ||||||
PDF Solutions, Inc. * | 584 | 7,732 | ||||||
Photronics, Inc. * | 877 | 4,289 | ||||||
PLX Technology, Inc. * | 904 | 3,914 | ||||||
Power Integrations, Inc. | 23,015 | 680,784 | ||||||
Rambus, Inc. * | 947 | 4,583 | ||||||
RF Micro Devices, Inc. * | 2,375 | 10,474 | ||||||
Rubicon Technology, Inc. * | 163 | 1,416 | ||||||
Rudolph Technologies, Inc. * | 940 | 8,939 | ||||||
Semtech Corp. * | 848 | 21,175 | ||||||
Sigma Designs, Inc. * | 1,220 | 7,247 | ||||||
Silicon Image, Inc. * | 1,158 | 5,095 | ||||||
Spansion, Inc., Class A * | 809 | 8,972 | ||||||
STR Holdings, Inc. * | 612 | 1,316 | ||||||
Tessera Technologies, Inc. | 654 | 9,267 | ||||||
TriQuint Semiconductor, Inc. * | 1,424 | 6,693 | ||||||
Ultratech, Inc. * | 441 | 13,631 | ||||||
Veeco Instruments, Inc. * | 483 | 14,828 | ||||||
Volterra Semiconductor Corp. * | 399 | 7,250 | ||||||
1,783,064 | ||||||||
Software & Services 6.2% | ||||||||
Accelrys, Inc. * | 24,770 | 221,691 | ||||||
ACI Worldwide, Inc. * | 502 | 19,628 | ||||||
Actuate Corp. * | 877 | 4,674 | ||||||
Acxiom Corp. * | 852 | 15,549 | ||||||
Advent Software, Inc. * | 537 | 11,653 | ||||||
Ancestry.com, Inc. * | 231 | 7,300 | ||||||
Angie’s List, Inc. * | 368 | 4,210 | ||||||
Aspen Technology, Inc. * | 14,260 | 353,363 | ||||||
Bankrate, Inc. * | 551 | 5,912 | ||||||
Blackbaud, Inc. | 657 | 15,617 | ||||||
Blucora, Inc. * | 750 | 13,162 | ||||||
Bottomline Technologies, Inc. * | 10,260 | 240,084 | ||||||
BroadSoft, Inc. * | 474 | 18,116 | ||||||
CACI International, Inc., Class A * | 332 | 16,743 | ||||||
Cardtronics, Inc. * | 652 | 18,523 | ||||||
CommVault Systems, Inc. * | 30,796 | 1,923,826 | ||||||
comScore, Inc. * | 700 | 9,919 | ||||||
Comverse Technology, Inc. * | 1,972 | 12,995 | ||||||
Concur Technologies, Inc. * | 3,700 | 245,051 | ||||||
Constant Contact, Inc. * | 187 | 2,308 | ||||||
Convergys Corp. | 1,645 | 27,652 | ||||||
CoreLogic, Inc. * | 9,100 | 216,580 | ||||||
Cornerstone OnDemand, Inc. * | 10,880 | 304,531 | ||||||
CoStar Group, Inc. * | 3,480 | 288,492 | ||||||
CSG Systems International, Inc. * | 466 | 9,604 | ||||||
DealerTrack Holdings, Inc. * | 627 | 17,136 | ||||||
Dice Holdings, Inc. * | 775 | 6,843 | ||||||
Digital River, Inc. * | 679 | 9,737 | ||||||
EarthLink, Inc. | 768 | 4,869 | ||||||
Ebix, Inc. | 353 | 7,692 | ||||||
Ellie Mae, Inc. * | 167 | 4,175 | ||||||
Envestnet, Inc. * | 355 | 4,963 | ||||||
EPIQ Systems, Inc. | 706 | 8,620 | ||||||
Euronet Worldwide, Inc. * | 707 | 14,345 | ||||||
ExlService Holdings, Inc. * | 420 | 12,449 |
See financial notes 21
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Fair Isaac Corp. | 462 | 21,529 | ||||||
Forrester Research, Inc. | 6,239 | 180,557 | ||||||
Global Cash Access Holdings, Inc. * | 785 | 5,534 | ||||||
Guidance Software, Inc. * | 23,500 | 286,230 | ||||||
Guidewire Software, Inc. * | 192 | 5,883 | ||||||
Heartland Payment Systems, Inc. | 587 | 15,309 | ||||||
Higher One Holdings, Inc. * | 570 | 7,199 | ||||||
iGATE Corp. * | 257 | 4,125 | ||||||
Interactive Intelligence Group, Inc. * | 317 | 10,052 | ||||||
Internap Network Services Corp. * | 869 | 5,953 | ||||||
InterXion Holding N.V. * | 23,000 | 491,510 | ||||||
IntraLinks Holdings, Inc. * | 807 | 4,511 | ||||||
j2 Global, Inc. | 626 | 18,805 | ||||||
JDA Software Group, Inc. * | 541 | 20,634 | ||||||
Kenexa Corp. * | 401 | 18,430 | ||||||
Keynote Systems, Inc. | 372 | 5,316 | ||||||
KIT Digital, Inc. * | 838 | 2,330 | ||||||
Liquidity Services, Inc. * | 238 | 9,813 | ||||||
LivePerson, Inc. * | 533 | 8,363 | ||||||
LogMeIn, Inc. * | 331 | 8,169 | ||||||
Manhattan Associates, Inc. * | 221 | 13,260 | ||||||
ManTech International Corp., Class A | 392 | 9,004 | ||||||
MAXIMUS, Inc. | 15,082 | 832,225 | ||||||
Mentor Graphics Corp. * | 1,019 | 15,815 | ||||||
MicroStrategy, Inc., Class A * | 122 | 11,525 | ||||||
ModusLink Global Solutions, Inc. * | 891 | 2,611 | ||||||
MoneyGram International, Inc. * | 348 | 5,408 | ||||||
Monotype Imaging Holdings, Inc. | 481 | 7,364 | ||||||
Monster Worldwide, Inc. * | 941 | 5,853 | ||||||
Move, Inc. * | 1,041 | 8,630 | ||||||
NetScout Systems, Inc. * | 369 | 9,125 | ||||||
NetSuite, Inc. * | 5,700 | 362,007 | ||||||
NIC, Inc. | 407 | 5,820 | ||||||
OpenTable, Inc. * | 363 | 17,050 | ||||||
Opnet Technologies, Inc. | 132 | 5,601 | ||||||
Parametric Technology Corp. * | 1,605 | 32,389 | ||||||
Pegasystems, Inc. | 340 | 7,980 | ||||||
Progress Software Corp. * | 788 | 15,539 | ||||||
PROS Holdings, Inc. * | 257 | 4,968 | ||||||
QLIK Technologies, Inc. * | 1,121 | 20,638 | ||||||
QuinStreet, Inc. * | 551 | 3,372 | ||||||
RealPage, Inc. * | 505 | 11,024 | ||||||
Responsys, Inc. * | 889 | 7,948 | ||||||
Rosetta Stone, Inc. * | 529 | 6,195 | ||||||
Saba Software, Inc. * | 391 | 3,941 | ||||||
Sapient Corp. * | 1,309 | 13,457 | ||||||
SciQuest, Inc. * | 370 | 5,617 | ||||||
SeaChange International, Inc. * | 681 | 6,163 | ||||||
ServiceSource International, Inc. * | 362 | 3,262 | ||||||
Sourcefire, Inc. * | 450 | 19,255 | ||||||
SS&C Technologies Holdings, Inc. * | 511 | 12,279 | ||||||
Stamps.com, Inc. * | 166 | 4,568 | ||||||
Synacor, Inc. * | 391 | 2,143 | ||||||
Synchronoss Technologies, Inc. * | 435 | 8,913 | ||||||
Syntel, Inc. | 5,087 | 303,236 | ||||||
Take-Two Interactive Software, Inc. * | 938 | 10,459 | ||||||
Tangoe, Inc. * | 530 | 6,848 | ||||||
TeleNav, Inc. * | 470 | 3,309 | ||||||
TeleTech Holdings, Inc. * | 251 | 4,227 | ||||||
The Active Network, Inc. * | 820 | 7,265 | ||||||
TiVo, Inc. * | 997 | 10,120 | ||||||
TNS, Inc. * | 238 | 3,408 | ||||||
Travelzoo, Inc. * | 203 | 3,624 | ||||||
Tyler Technologies, Inc. * | 7,166 | 342,606 | ||||||
Ultimate Software Group, Inc. * | 7,642 | 774,593 | ||||||
Unisys Corp. * | 643 | 10,963 | ||||||
United Online, Inc. | 776 | 4,159 | ||||||
ValueClick, Inc. * | 1,161 | 19,354 | ||||||
Verint Systems, Inc. * | 391 | 10,663 | ||||||
Virnetx Holding Corp. * | 369 | 11,088 | ||||||
Virtusa Corp. * | 14,200 | 243,672 | ||||||
VistaPrint N.V. * | 301 | 9,171 | ||||||
Vocus, Inc. * | 319 | 5,662 | ||||||
Web.com Group, Inc. * | 624 | 9,847 | ||||||
WebMD Health Corp. * | 647 | 9,647 | ||||||
Websense, Inc. * | 70,948 | 937,933 | ||||||
WEX, Inc. * | 524 | 38,661 | ||||||
XO Group, Inc. * | 1,010 | 8,130 | ||||||
Yelp, Inc. * | 193 | 4,651 | ||||||
Zix Corp. * | 1,368 | 3,967 | ||||||
9,526,476 | ||||||||
Technology Hardware & Equipment 5.4% | ||||||||
3D Systems Corp. * | 532 | 23,142 | ||||||
Acme Packet, Inc. * | 86,500 | 1,430,710 | ||||||
ADTRAN, Inc. | 781 | 13,191 | ||||||
Aeroflex Holding Corp. * | 348 | 2,213 | ||||||
Anaren, Inc. * | 401 | 7,230 | ||||||
Anixter International, Inc. | 400 | 23,448 | ||||||
Arris Group, Inc. * | 1,232 | 16,928 | ||||||
Aruba Networks, Inc. * | 73,629 | 1,337,839 | ||||||
Avid Technology, Inc. * | 773 | 4,538 | ||||||
Badger Meter, Inc. | 136 | 5,826 | ||||||
Benchmark Electronics, Inc. * | 698 | 10,344 | ||||||
Black Box Corp. | 134 | 2,937 | ||||||
CalAmp Corp. * | 215 | 1,909 | ||||||
Calix, Inc. * | 848 | 5,639 | ||||||
Checkpoint Systems, Inc. * | 842 | 6,837 | ||||||
Ciena Corp. * | 1,278 | 15,860 | ||||||
Cognex Corp. | 553 | 20,162 | ||||||
Coherent, Inc. * | 6,204 | 283,213 | ||||||
Comtech Telecommunications Corp. | 372 | 9,363 | ||||||
Cray, Inc. * | 899 | 10,941 | ||||||
Daktronics, Inc. | 790 | 6,928 | ||||||
Diebold, Inc. | 15,900 | 473,025 | ||||||
DTS, Inc. * | 346 | 7,259 | ||||||
Electro Rent Corp. | 245 | 3,851 | ||||||
Electro Scientific Industries, Inc. | 263 | 2,809 | ||||||
Electronics for Imaging, Inc. * | 400 | 6,944 | ||||||
Emulex Corp. * | 794 | 5,526 | ||||||
Extreme Networks, Inc. * | 1,418 | 4,623 | ||||||
Fabrinet * | 249 | 2,398 | ||||||
FARO Technologies, Inc. * | 117 | 4,703 | ||||||
FEI Co. | 544 | 29,947 | ||||||
Finisar Corp. * | 1,044 | 12,027 | ||||||
GSI Group, Inc. * | 370 | 2,875 | ||||||
Harmonic, Inc. * | 788 | 3,420 | ||||||
Imation Corp. * | 1,184 | 5,411 | ||||||
Infinera Corp. * | 804 | 3,956 | ||||||
Insight Enterprises, Inc. * | 288 | 4,657 | ||||||
InterDigital, Inc. | 644 | 24,530 | ||||||
Intermec, Inc. * | 768 | 5,207 | ||||||
InvenSense, Inc. * | 302 | 3,382 |
22 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ixia * | 101,300 | 1,419,213 | ||||||
KEMET Corp. * | 1,092 | 4,958 | ||||||
Littelfuse, Inc. | 349 | 18,706 | ||||||
Loral Space & Communications, Inc. | 67 | 5,270 | ||||||
Maxwell Technologies, Inc. * | 653 | 4,251 | ||||||
Measurement Specialties, Inc. * | 130 | 4,239 | ||||||
Mercury Computer Systems, Inc. * | 573 | 4,696 | ||||||
Methode Electronics, Inc. | 461 | 4,665 | ||||||
MTS Systems Corp. | 10,524 | 530,515 | ||||||
Multi-Fineline Electronix, Inc. * | 162 | 3,425 | ||||||
NETGEAR, Inc. * | 42,442 | 1,507,115 | ||||||
Newport Corp. * | 655 | 7,087 | ||||||
Oclaro, Inc. * | 1,205 | 2,374 | ||||||
OCZ Technology Group, Inc. * | 1,106 | 1,493 | ||||||
Oplink Communications, Inc. * | 255 | 3,789 | ||||||
OSI Systems, Inc. * | 4,337 | 343,707 | ||||||
Park Electrochemical Corp. | 140 | 3,475 | ||||||
Plantronics, Inc. | 614 | 19,918 | ||||||
Plexus Corp. * | 494 | 13,294 | ||||||
Power-One, Inc. * | 894 | 3,603 | ||||||
Procera Networks, Inc. * | 283 | 6,410 | ||||||
QLogic Corp. * | 849 | 7,964 | ||||||
Quantum Corp. * | 1,535 | 1,612 | ||||||
RealD, Inc. * | 770 | 7,199 | ||||||
Rofin-Sinar Technologies, Inc. * | 393 | 7,157 | ||||||
Rogers Corp. * | 112 | 4,414 | ||||||
Sanmina-SCI Corp. * | 993 | 8,828 | ||||||
ScanSource, Inc. * | 206 | 6,026 | ||||||
ShoreTel, Inc. * | 692 | 3,066 | ||||||
Silicon Graphics International Corp. * | 982 | 7,581 | ||||||
Sonus Networks, Inc. * | 1,630 | 3,032 | ||||||
STEC, Inc. * | 805 | 4,725 | ||||||
Stratasys, Inc. * | 201 | 13,401 | ||||||
Super Micro Computer, Inc. * | 549 | 4,343 | ||||||
Sycamore Networks, Inc. | 352 | 2,035 | ||||||
Symmetricom, Inc. * | 431 | 2,651 | ||||||
Synaptics, Inc. * | 496 | 11,487 | ||||||
SYNNEX Corp. * | 408 | 13,215 | ||||||
Tellabs, Inc. | 2,907 | 8,488 | ||||||
TTM Technologies, Inc. * | 856 | 7,704 | ||||||
Universal Display Corp. * | 598 | 19,602 | ||||||
ViaSat, Inc. * | 510 | 19,808 | ||||||
Zebra Technologies Corp., Class A * | 10,700 | 384,451 | ||||||
8,306,740 | ||||||||
Telecommunication Services 0.1% | ||||||||
8x8, Inc. * | 1,616 | 10,585 | ||||||
Cincinnati Bell, Inc. * | 1,476 | 7,690 | ||||||
Cogent Communications Group, Inc. | 787 | 17,086 | ||||||
Consolidated Communications Holdings, Inc. | 774 | 11,950 | ||||||
General Communication, Inc., Class A * | 408 | 3,566 | ||||||
inContact, Inc. * | 1,012 | 5,829 | ||||||
Iridium Communications, Inc. * | 770 | 5,690 | ||||||
Leap Wireless International, Inc. * | 917 | 4,897 | ||||||
Neutral Tandem, Inc. | 360 | 1,663 | ||||||
NTELOS Holdings Corp. | 303 | 4,621 | ||||||
Premiere Global Services, Inc. * | 1,217 | 10,344 | ||||||
USA Mobility, Inc. | 677 | 7,481 | ||||||
91,402 | ||||||||
Transportation 1.8% | ||||||||
Air Transport Services Group, Inc. * | 834 | 3,211 | ||||||
Alaska Air Group, Inc. * | 877 | 33,536 | ||||||
Allegiant Travel Co. * | 131 | 9,529 | ||||||
AMERCO | 59 | 6,817 | ||||||
Arkansas Best Corp. | 696 | 5,603 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 6,002 | 330,050 | ||||||
Avis Budget Group, Inc. * | 1,447 | 23,919 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 394 | 30,338 | ||||||
Echo Global Logistics, Inc. * | 13,378 | 224,884 | ||||||
Forward Air Corp. | 462 | 15,417 | ||||||
Genco Shipping & Trading Ltd. * | 897 | 2,727 | ||||||
Genesee & Wyoming, Inc., Class A * | 7,329 | 531,133 | ||||||
Hawaiian Holdings, Inc. * | 681 | 4,038 | ||||||
Heartland Express, Inc. | 778 | 10,853 | ||||||
Hub Group, Inc., Class A * | 309 | 9,582 | ||||||
JetBlue Airways Corp. * | 2,129 | 11,262 | ||||||
Kirby Corp. * | 11,100 | 638,028 | ||||||
Knight Transportation, Inc. | 763 | 11,537 | ||||||
Matson, Inc. | 3,000 | 63,750 | ||||||
Old Dominion Freight Line, Inc. * | 12,181 | 408,551 | ||||||
Pacer International, Inc. * | 762 | 2,728 | ||||||
Republic Airways Holdings, Inc. * | 284 | 1,326 | ||||||
Roadrunner Transportation Systems, Inc. * | 377 | 6,571 | ||||||
SkyWest, Inc. | 318 | 3,482 | ||||||
Spirit Airlines, Inc. * | 270 | 4,738 | ||||||
Swift Transportation Co. * | 1,381 | 13,465 | ||||||
US Airways Group, Inc. * | 2,272 | 27,673 | ||||||
Uti Worldwide, Inc. | 19,200 | 266,688 | ||||||
Werner Enterprises, Inc. | 547 | 12,669 | ||||||
XPO Logistics, Inc. * | 521 | 7,153 | ||||||
Zipcar, Inc. * | 991 | 6,214 | ||||||
2,727,472 | ||||||||
Utilities 2.4% | ||||||||
ALLETE, Inc. | 473 | 19,686 | ||||||
American States Water Co. | 334 | 14,703 | ||||||
Atlantic Power Corp. | 1,045 | 15,696 | ||||||
Atmos Energy Corp. | 12,000 | 431,640 | ||||||
Avista Corp. | 816 | 20,743 | ||||||
Black Hills Corp. | 624 | 22,321 | ||||||
California Water Service Group | 614 | 11,310 | ||||||
CH Energy Group, Inc. | 114 | 7,413 | ||||||
Chesapeake Utilities Corp. | 100 | 4,697 | ||||||
Cleco Corp. | 792 | 34,175 | ||||||
El Paso Electric Co. | 612 | 20,802 | ||||||
GenOn Energy, Inc. * | 9,125 | 23,451 | ||||||
IDACORP, Inc. | 679 | 30,365 | ||||||
MGE Energy, Inc. | 177 | 9,317 | ||||||
New Jersey Resources Corp. | 4,669 | 207,584 | ||||||
Northwest Natural Gas Co. | 32,621 | 1,517,855 | ||||||
NorthWestern Corp. | 542 | 19,409 | ||||||
Ormat Technologies, Inc. | 443 | 8,430 | ||||||
Otter Tail Corp. | 608 | 14,671 | ||||||
Piedmont Natural Gas Co., Inc. | 906 | 28,874 | ||||||
PNM Resources, Inc. | 1,035 | 22,936 | ||||||
Portland General Electric Co. | 1,012 | 27,729 | ||||||
South Jersey Industries, Inc. | 425 | 21,501 | ||||||
Southwest Gas Corp. | 635 | 27,603 |
See financial notes 23
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Empire District Electric Co. | 692 | 15,023 | ||||||
The Laclede Group, Inc. | 160 | 6,662 | ||||||
UIL Holdings Corp. | 691 | 24,994 | ||||||
UNS Energy Corp. | 10,141 | 432,412 | ||||||
Westar Energy, Inc. | 11,600 | 344,520 | ||||||
WGL Holdings, Inc. | 7,714 | 306,786 | ||||||
3,693,308 | ||||||||
Total Common Stock | ||||||||
(Cost $126,764,560) | 145,257,704 | |||||||
Other Investment Company 5.1% of net assets | ||||||||
Money Market Fund 5.1% | ||||||||
State Street Institutional U.S. Government Money Market Fund | 7,839,575 | 7,839,575 | ||||||
Total Other Investment Company | ||||||||
(Cost $7,839,575) | 7,839,575 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.3% of net assets | ||||||||
U.S. Treasury Obligations 0.3% | ||||||||
U.S. Treasury Bills | ||||||||
0.10%, 12/20/12 (b)(c) | 11,000 | 10,999 | ||||||
0.11%, 12/20/12 (b)(c) | 390,000 | 389,944 | ||||||
Total Short-Term Investments | ||||||||
(Cost $400,943) | 400,943 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $136,878,505 and the unrealized appreciation and depreciation were $21,768,143 and ($5,148,426), respectively, with a net appreciation of $16,619,717.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. |
ADR — | American Depositary Receipt | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/21/12 | 63 | 5,142,690 | (205,362 | ) |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $130,493,119 | $— | $— | $130,493,119 | ||||||||||||
Capital Goods | 14,762,777 | — | 1,808 | 14,764,585 | ||||||||||||
Other Investment Company1 | 7,839,575 | — | — | 7,839,575 | ||||||||||||
Short-Term Investments1 | — | 400,943 | — | 400,943 | ||||||||||||
Total | $153,095,471 | $400,943 | $1,808 | $153,498,222 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | ($205,362 | ) | $— | $— | ($205,362 | ) |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
24 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
��
Portfolio Holdings continued
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2011 | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | ||||||||||||||||||||||||
Common Stock | $— | $— | $357 | $1,451 | $— | $— | $— | $1,808 | ||||||||||||||||||||||||
Total | $— | $— | $357 | $1,451 | $— | $— | $— | $1,808 | ||||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was $357.
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 25
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $135,005,078) | $153,498,222 | |||||
Receivables: | ||||||
Investments sold | 814,630 | |||||
Dividends | 50,659 | |||||
Fund shares sold | 42,261 | |||||
Due from broker for futures | 27,720 | |||||
Interest | 340 | |||||
Prepaid expenses | + | 7,291 | ||||
Total assets | 154,441,123 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 1,098,136 | |||||
Investment adviser and administrator fees | 10,705 | |||||
Shareholder service fees | 1,759 | |||||
Due to custodian | 293,583 | |||||
Fund shares redeemed | 33,422 | |||||
Accrued expenses | + | 56,186 | ||||
Total liabilities | 1,493,791 | |||||
Net Assets | ||||||
Total assets | 154,441,123 | |||||
Total liabilities | − | 1,493,791 | ||||
Net assets | $152,947,332 | |||||
Net Assets by Source | ||||||
Capital received from investors | 187,904,823 | |||||
Net investment loss | (899,903 | ) | ||||
Net realized capital losses | (52,345,370 | ) | ||||
Net unrealized capital gains | 18,287,782 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $64,861,687 | 4,936,119 | $13.14 | |||||||||||
Select Shares | $88,085,645 | 6,608,891 | $13.33 |
26 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,598) | $1,048,713 | |||||
Interest | + | 5,936 | ||||
Total investment income | 1,054,649 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,897,518 | |||||
Shareholder service fees: | ||||||
Investor Shares | 152,023 | |||||
Select Shares | 179,083 | |||||
Portfolio accounting fees | 73,830 | |||||
Professional fees | 56,628 | |||||
Transfer agent fees | 43,587 | |||||
Registration fees | 36,029 | |||||
Custodian fees | 31,028 | |||||
Shareholder reports | 19,095 | |||||
Trustees’ fees | 7,220 | |||||
Interest expense | 4 | |||||
State filing fee reimbursement (Note 4) | (10,573 | ) | ||||
Other expenses | + | 7,831 | ||||
Total expenses | 2,493,303 | |||||
Expense reduction by CSIM and its affiliates1 | − | 344,381 | ||||
Custody credits | − | 6 | ||||
Net expenses | − | 2,148,916 | ||||
Net investment loss | (1,094,267 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 14,405,116 | |||||
Net realized gains on futures contracts | 2,928,431 | |||||
Net realized losses on foreign currency transactions | + | (1 | ) | |||
Net realized gains | 17,333,546 | |||||
Net unrealized losses on investments | (9,782,125 | ) | ||||
Net unrealized losses on futures contracts | + | (1,023,234 | ) | |||
Net unrealized losses | + | (10,805,359 | ) | |||
Net realized and unrealized gains | 6,528,187 | |||||
Increase in net assets resulting from operations | $5,433,920 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $10,573. See financial note 4 for additional information. |
See financial notes 27
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment loss | ($1,094,267 | ) | ($1,841,609 | ) | ||||||
Net realized gains | 17,333,546 | 57,475,908 | ||||||||
Net unrealized losses | + | (10,805,359 | ) | (36,471,721 | ) | |||||
Increase in net assets from operations | $5,433,920 | $19,162,578 |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 481,008 | $6,525,131 | 126,703 | $1,624,965 | ||||||||||||||
Select Shares | + | 1,179,826 | 15,072,446 | 2,023,632 | 24,972,114 | |||||||||||||
Total shares sold | 1,660,834 | $21,597,577 | 2,150,335 | $26,597,079 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (745,538 | ) | ($9,511,650 | ) | (827,089 | ) | ($10,514,720 | ) | ||||||||||
Select Shares | + | (12,619,122 | ) | (146,015,616 | ) | (12,892,563 | ) | (158,472,758 | ) | |||||||||
Total shares redeemed | (13,364,660 | ) | ($155,527,266 | ) | (13,719,652 | ) | ($168,987,478 | ) | ||||||||||
Net transactions in fund shares | (11,703,826 | ) | ($133,929,689 | ) | (11,569,317 | ) | ($142,390,399 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (11,703,826 | ) | (128,495,769 | ) | (11,569,317 | ) | (123,227,821 | ) | |||||||||
End of period | 11,545,010 | $152,947,332 | 23,248,836 | $281,443,101 | ||||||||||||||
Net investment loss | ($899,903 | ) | $— |
28 See financial notes
Table of Contents
Laudus International MarketMasters Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
Investor Shares | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 17.45 | 18.36 | 15.04 | 11.78 | 25.96 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.16 | 0.09 | 0.14 | 0.20 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.52 | (0.85 | ) | 3.41 | 3.63 | (12.25 | ) | |||||||||||||||
Total from investment operations | 1.73 | (0.69 | ) | 3.50 | 3.77 | (12.05 | ) | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.15 | ) | (0.22 | ) | (0.18 | ) | (0.51 | ) | (0.10 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (2.03 | ) | ||||||||||||||||
Total distributions | (0.15 | ) | (0.22 | ) | (0.18 | ) | (0.51 | ) | (2.13 | ) | ||||||||||||
Net asset value at end of period | 19.03 | 17.45 | 18.36 | 15.04 | 11.78 | |||||||||||||||||
Total return (%) | 10.05 | (3.87 | ) | 23.47 | 33.64 | (49.97 | ) | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.53 | 1 | 1.59 | 1.60 | 1.62 | 1.59 | ||||||||||||||||
Gross operating expenses | 1.62 | 1.60 | 1.62 | 1.63 | 1.59 | |||||||||||||||||
Net investment income (loss) | 1.19 | 0.80 | 0.53 | 0.95 | 0.95 | |||||||||||||||||
Portfolio turnover rate | 68 | 78 | 83 | 96 | 88 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 592 | 665 | 849 | 931 | 918 |
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
Select Shares | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 17.46 | 18.38 | 15.05 | 11.80 | 26.00 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.25 | 0.19 | 0.10 | 0.15 | 0.23 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.50 | (0.86 | ) | 3.43 | 3.64 | (12.27 | ) | |||||||||||||||
Total from investment operations | 1.75 | (0.67 | ) | 3.53 | 3.79 | (12.04 | ) | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.18 | ) | (0.25 | ) | (0.20 | ) | (0.54 | ) | (0.13 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (2.03 | ) | ||||||||||||||||
Total distributions | (0.18 | ) | (0.25 | ) | (0.20 | ) | (0.54 | ) | (2.16 | ) | ||||||||||||
Net asset value at end of period | 19.03 | 17.46 | 18.38 | 15.05 | 11.80 | |||||||||||||||||
Total return (%) | 10.20 | (3.76 | ) | 23.68 | 33.82 | (49.91 | ) | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.37 | 1 | 1.45 | 1.48 | 2 | 1.47 | 1.48 | 2 | ||||||||||||||
Gross operating expenses | 1.47 | 1.47 | 1.50 | 1.58 | 1.54 | |||||||||||||||||
Net investment income (loss) | 1.40 | 0.99 | 0.69 | 1.08 | 1.08 | |||||||||||||||||
Portfolio turnover rate | 68 | 78 | 83 | 96 | 88 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,062 | 961 | 948 | 630 | 540 |
1 Effective June 6, 2012, the net operating expense limitation was lowered. The ratio presented for period ended October 31, 2012 is a blended rate. Please see financial note 4 for more information.
2 The ratio of net operating expenses would have been 1.47% if certain non-routine expenses had not been incurred.
See financial notes 29
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2012
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.laudus.com.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .5% | Common Stock | 1,334,136,678 | 1,596,251,875 | ||||||||
0 | .1% | Preferred Stock | 846,024 | 990,687 | ||||||||
2 | .6% | Other Investment Companies | 42,714,640 | 42,919,842 | ||||||||
0 | .2% | Corporate Bonds | 2,217,930 | 2,973,649 | ||||||||
0 | .0% | Rights | 295,591 | 297,467 | ||||||||
0 | .1% | Short-Term Investments | 1,242,824 | 1,242,824 | ||||||||
99 | .5% | Total Investments | 1,381,453,687 | 1,644,676,344 | ||||||||
0 | .5% | Other Assets and Liabilities, Net | 8,984,216 | |||||||||
100 | .0% | Net Assets | 1,653,660,560 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 96.5% of net assets | ||||||||
Australia 4.4% | ||||||||
Banks 0.3% | ||||||||
Australia & New Zealand Banking Group Ltd. | 41,746 | 1,101,312 | ||||||
Bendigo & Adelaide Bank Ltd. | 6,444 | 53,972 | ||||||
Commonwealth Bank of Australia | 24,885 | 1,490,251 | ||||||
National Australia Bank Ltd. | 34,895 | 932,559 | ||||||
Westpac Banking Corp. | 47,563 | 1,257,466 | ||||||
4,835,560 | ||||||||
Capital Goods 0.4% | ||||||||
Leighton Holdings Ltd. | 2,271 | 42,138 | ||||||
Monadelphous Group Ltd. | 329,486 | 7,204,089 | ||||||
7,246,227 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
ALS Ltd. | 5,060 | 48,574 | ||||||
Brambles Ltd. | 24,655 | 185,645 | ||||||
McMillan Shakespeare Ltd. | 95,276 | 1,275,072 | ||||||
Transfield Services Ltd. | 2,043,374 | 3,365,659 | ||||||
4,874,950 | ||||||||
Consumer Services 0.2% | ||||||||
Crown Ltd. | 6,204 | 62,530 | ||||||
Echo Entertainment Group Ltd. | 12,297 | 44,692 | ||||||
Flight Centre Ltd. | 138,423 | 3,819,030 | ||||||
TABCORP Holdings Ltd. | 10,270 | 30,244 | ||||||
Tatts Group Ltd. | 19,773 | 57,427 | ||||||
4,013,923 | ||||||||
Diversified Financials 0.0% | ||||||||
ASX Ltd. | 2,806 | 86,397 | ||||||
Macquarie Group Ltd. | 5,112 | 168,857 | ||||||
255,254 | ||||||||
Energy 0.1% | ||||||||
Caltex Australia Ltd. | 2,024 | 35,764 | ||||||
Origin Energy Ltd. | 16,850 | 198,343 | ||||||
Santos Ltd. | 14,656 | 174,746 | ||||||
Whitehaven Coal Ltd. | 6,829 | 21,565 | ||||||
Woodside Petroleum Ltd. | 10,416 | 371,395 | ||||||
WorleyParsons Ltd. | 3,314 | 84,745 | ||||||
886,558 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Metcash Ltd. | 14,377 | 54,611 | ||||||
Wesfarmers Ltd. | 15,635 | 563,631 | ||||||
Woolworths Ltd. | 19,162 | 584,477 | ||||||
1,202,719 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Coca-Cola Amatil Ltd. | 8,985 | 125,357 | ||||||
Treasury Wine Estates Ltd. | 142,250 | 728,844 | ||||||
854,201 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Ansell Ltd. | 44,192 | 716,034 | ||||||
Cochlear Ltd. | 14,451 | 1,067,231 | ||||||
Ramsay Health Care Ltd. | 1,970 | 48,582 | ||||||
Sonic Healthcare Ltd. | 5,555 | 74,909 | ||||||
1,906,756 | ||||||||
Insurance 0.0% | ||||||||
AMP Ltd. | 44,364 | 211,072 | ||||||
Insurance Australia Group Ltd. | 32,789 | 155,920 | ||||||
QBE Insurance Group Ltd. | 18,204 | 248,702 | ||||||
Suncorp Group Ltd. | 20,038 | 195,181 | ||||||
810,875 | ||||||||
Materials 1.6% | ||||||||
Alumina Ltd. | 36,590 | 36,525 | ||||||
Amcor Ltd. | 973,293 | 7,973,510 | ||||||
Atlas Iron Ltd. | 708,737 | 1,125,514 | ||||||
BHP Billiton Ltd. | 50,171 | 1,776,325 | ||||||
BHP Billiton Ltd. ADR | 110,025 | 7,783,169 | ||||||
Boral Ltd. | 10,945 | 40,765 | ||||||
Fortescue Metals Group Ltd. | 21,499 | 90,589 | ||||||
Iluka Resources Ltd. | 6,278 | 64,395 | ||||||
Incitec Pivot Ltd. | 26,096 | 85,472 | ||||||
Lynas Corp., Ltd. * | 25,698 | 19,389 | ||||||
Newcrest Mining Ltd. | 11,930 | 329,029 | ||||||
Orica Ltd. | 200,276 | 5,216,948 | ||||||
OZ Minerals Ltd. | 4,856 | 41,203 | ||||||
Regis Resources Ltd. * | 333,561 | 1,859,852 | ||||||
Rio Tinto Ltd. | 6,777 | 399,542 | ||||||
Sims Metal Management Ltd. | 2,464 | 24,077 | ||||||
26,866,304 | ||||||||
Media 0.0% | ||||||||
Fairfax Media Ltd. | 33,502 | 13,716 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
CSL Ltd. | 8,053 | 397,180 | ||||||
Mesoblast Ltd. * | 72,291 | 433,549 | ||||||
830,729 |
30 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Real Estate 0.6% | ||||||||
Centro Retail Australia REIT | 18,828 | 41,978 | ||||||
CFS Retail Property Trust Group | 32,493 | 65,837 | ||||||
Commonwealth Property Office Fund | 7,794,134 | 8,725,964 | ||||||
Dexus Property Group | 72,559 | 74,056 | ||||||
Goodman Group | 23,713 | 108,859 | ||||||
GPT Group | 22,446 | 82,890 | ||||||
Lend Lease Group | 8,133 | 73,016 | ||||||
Mirvac Group | 51,235 | 79,938 | ||||||
Stockland | 35,733 | 128,210 | ||||||
Westfield Group | 34,384 | 380,085 | ||||||
Westfield Retail Trust | 45,683 | 146,691 | ||||||
9,907,524 | ||||||||
Retailing 0.1% | ||||||||
David Jones Ltd. | 671,225 | 1,857,745 | ||||||
Harvey Norman Holdings Ltd. | 7,965 | 15,733 | ||||||
1,873,478 | ||||||||
Software & Services 0.1% | ||||||||
carsales.com Ltd. | 199,893 | 1,546,935 | ||||||
Computershare Ltd. | 6,665 | 60,023 | ||||||
1,606,958 | ||||||||
Telecommunication Services 0.3% | ||||||||
Telstra Corp., Ltd. | 1,158,392 | 4,978,185 | ||||||
Transportation 0.0% | ||||||||
Asciano Ltd. | 14,625 | 69,220 | ||||||
Qantas Airways Ltd. * | 16,643 | 22,945 | ||||||
QR National Ltd. | 25,611 | 99,345 | ||||||
Sydney Airport | 5,582 | 19,633 | ||||||
Toll Holdings Ltd. | 10,116 | 46,603 | ||||||
Transurban Group | 20,579 | 129,886 | ||||||
387,632 | ||||||||
Utilities 0.0% | ||||||||
AGL Energy Ltd. | 8,346 | 125,864 | ||||||
APA Group | 10,654 | 57,026 | ||||||
SP AusNet | 24,580 | 27,042 | ||||||
209,932 | ||||||||
73,561,481 | ||||||||
Austria 0.4% | ||||||||
Banks 0.0% | ||||||||
Erste Group Bank AG * | 3,290 | 82,933 | ||||||
Raiffeisen Bank International AG | 733 | 29,361 | ||||||
112,294 | ||||||||
Capital Goods 0.1% | ||||||||
Andritz AG | 35,095 | 2,114,774 | ||||||
Energy 0.1% | ||||||||
OMV AG | 2,275 | 83,254 | ||||||
Schoeller-Bleckmann Oilfield Equipment AG | 6,200 | 598,200 | ||||||
681,454 | ||||||||
Insurance 0.0% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 576 | 24,750 | ||||||
Materials 0.0% | ||||||||
Voestalpine AG | 1,648 | 51,892 | ||||||
Real Estate 0.0% | ||||||||
Immofinanz AG * | 15,816 | 61,138 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
AMS AG | 26,957 | 2,871,637 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG | 4,982 | 31,386 | ||||||
Utilities 0.0% | ||||||||
Verbund AG | 1,021 | 23,807 | ||||||
5,973,132 | ||||||||
Belgium 0.2% | ||||||||
Banks 0.0% | ||||||||
KBC GROEP N.V. | 2,415 | 56,809 | ||||||
Diversified Financials 0.0% | ||||||||
Groupe Bruxelles Lambert S.A. | 1,210 | 89,455 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Colruyt S.A. | 21,473 | 981,706 | ||||||
Delhaize Group S.A. | 1,527 | 58,464 | ||||||
1,040,170 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Anheuser-Busch InBev N.V. | 12,511 | 1,046,308 | ||||||
Insurance 0.0% | ||||||||
Ageas | 3,791 | 96,652 | ||||||
Materials 0.0% | ||||||||
Solvay S.A. | 938 | 112,937 | ||||||
Umicore S.A. | 16,870 | 866,921 | ||||||
979,858 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
UCB S.A. | 1,687 | 98,534 | ||||||
Telecommunication Services 0.0% | ||||||||
Belgacom S.A. | 2,281 | 66,688 | ||||||
Mobistar S.A. | 450 | 11,904 | ||||||
Telenet Group Holding N.V. | 838 | 38,391 | ||||||
116,983 | ||||||||
3,524,769 | ||||||||
Bermuda 0.2% | ||||||||
Insurance 0.2% | ||||||||
RenaissanceRe Holdings Ltd. | 30,246 | 2,460,815 | ||||||
Brazil 1.5% | ||||||||
Capital Goods 0.2% | ||||||||
Mills Estruturas e Servicos de Engenharia S.A. | 180,900 | 2,773,554 |
See financial notes 31
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Commercial & Professional Supplies 0.0% | ||||||||
Valid Solucoes e Servicos de Seguranca em Meios de Pagamento e Identificacao S.A. | 21,000 | 395,278 | ||||||
Consumer Services 0.2% | ||||||||
Anhanguera Educacional Participacoes S.A. | 51,800 | 907,944 | ||||||
Estacio Participacoes S.A. | 154,100 | 2,936,250 | ||||||
3,844,194 | ||||||||
Diversified Financials 0.0% | ||||||||
CETIP SA - Mercados Organizado | 11,623 | 133,910 | ||||||
Energy 0.0% | ||||||||
QGEP Participacoes S.A. | 106,500 | 658,595 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Brazil Pharma S.A. | 400,000 | 2,432,240 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
OdontoPrev S.A. | 37,000 | 191,280 | ||||||
Qualicorp S.A. * | 36,300 | 372,464 | ||||||
563,744 | ||||||||
Household & Personal Products 0.1% | ||||||||
Hypermarcas S.A. * | 147,200 | 1,170,468 | ||||||
Materials 0.3% | ||||||||
Vale S.A. ADR | 245,350 | 4,494,812 | ||||||
Media 0.0% | ||||||||
T4F Entretenimento S.A. | 24,900 | 140,986 | ||||||
Real Estate 0.2% | ||||||||
BR Malls Participacoes S.A. | 89,300 | 1,173,930 | ||||||
BR Properties S.A. | 182,100 | 2,384,904 | ||||||
3,558,834 | ||||||||
Retailing 0.1% | ||||||||
Cia. Hering | 56,300 | 1,293,399 | ||||||
Software & Services 0.1% | ||||||||
Cielo S.A. | 41,940 | 1,037,633 | ||||||
Transportation 0.1% | ||||||||
CCR S.A. | 170,600 | 1,500,168 | ||||||
Utilities 0.1% | ||||||||
Tractebel Energia S.A. | 47,300 | 815,096 | ||||||
24,812,911 | ||||||||
Cambodia 0.1% | ||||||||
Consumer Services 0.1% | ||||||||
NagaCorp Ltd. | 2,266,000 | 1,257,723 | ||||||
Canada 5.3% | ||||||||
Banks 0.1% | ||||||||
Canadian Western Bank | 76,499 | 2,264,141 | ||||||
Capital Goods 0.0% | ||||||||
Finning International, Inc. | 13,350 | 313,449 | ||||||
Diversified Financials 0.1% | ||||||||
CI Financial Corp. | 58,328 | 1,363,079 | ||||||
Energy 1.0% | ||||||||
Africa Oil Corp. * | 112,759 | 1,119,969 | ||||||
Canadian Natural Resources Ltd. | 89,300 | 2,696,860 | ||||||
Pason Systems, Inc. | 363,200 | 5,916,660 | ||||||
Peyto Exploration & Development Corp. | 81,268 | 1,985,421 | ||||||
Precision Drilling Corp. * | 66,305 | 474,674 | ||||||
Suncor Energy, Inc. | 137,725 | 4,630,315 | ||||||
16,823,899 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Alimentation Couche-Tard, Inc., Class B | 56,953 | 2,797,611 | ||||||
Metro, Inc. | 29,669 | 1,750,285 | ||||||
4,547,896 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Catamaran Corp. * | 32,332 | 1,518,269 | ||||||
Materials 1.1% | ||||||||
Agrium, Inc. | 24,300 | 2,564,622 | ||||||
Detour Gold Corp. | 63,792 | 1,797,354 | ||||||
First Quantum Minerals Ltd. | 40,785 | 916,769 | ||||||
Franco-Nevada Corp. | 20,976 | 1,207,840 | ||||||
Inmet Mining Corp. | 15,787 | 814,048 | ||||||
New Gold, Inc. * | 35,080 | 410,598 | ||||||
Potash Corp. of Saskatchewan, Inc. | 196,525 | 7,933,714 | ||||||
West Fraser Timber Co., Ltd. | 37,169 | 2,251,167 | ||||||
Yamana Gold, Inc. | 42,166 | 852,175 | ||||||
18,748,287 | ||||||||
Media 0.5% | ||||||||
Imax Corp. * | 14,947 | 337,653 | ||||||
Thomson Reuters Corp. | 264,700 | 7,452,680 | ||||||
7,790,333 | ||||||||
Real Estate 0.6% | ||||||||
Brookfield Asset Management, Inc., Class A | 151,024 | 5,201,267 | ||||||
Morguard REIT | 111,590 | 2,011,134 | ||||||
Northern Property REIT | 106,700 | 3,348,163 | ||||||
10,560,564 | ||||||||
Retailing 0.3% | ||||||||
Dollarama, Inc. | 67,970 | 4,293,594 | ||||||
Transportation 1.2% | ||||||||
Canadian National Railway Co. | 130,557 | 11,277,514 | ||||||
Canadian Pacific Railway Ltd. | 91,475 | 8,421,188 | ||||||
19,698,702 | ||||||||
87,922,213 | ||||||||
Cayman Islands 0.1% | ||||||||
Consumer Services 0.0% | ||||||||
MGM China Holdings Ltd. | 14,000 | 25,155 | ||||||
Real Estate 0.1% | ||||||||
KWG Property Holding Ltd. | 4,014,000 | 2,376,865 | ||||||
2,402,020 | ||||||||
Chile 0.3% | ||||||||
Diversified Financials 0.0% | ||||||||
Inversiones La Construccion S.A. | 19,921 | 352,152 |
32 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 0.1% | ||||||||
Sociedad Quimica y Minera de Chile S.A. ADR | 20,899 | 1,209,007 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
CFR Pharmaceuticals S.A. | 2,284,194 | 551,169 | ||||||
Real Estate 0.1% | ||||||||
Parque Arauco S.A. | 489,662 | 1,117,425 | ||||||
Software & Services 0.0% | ||||||||
Sonda S.A. | 145,520 | 445,225 | ||||||
Telecommunication Services 0.1% | ||||||||
ENTEL Chile S.A. | 57,296 | 1,172,296 | ||||||
4,847,274 | ||||||||
China 0.8% | ||||||||
Automobiles & Components 0.1% | ||||||||
Great Wall Motor Co., Ltd., Class H | 687,500 | 1,875,845 | ||||||
Capital Goods 0.1% | ||||||||
Haitian International Holdings Ltd. | 247,000 | 304,044 | ||||||
Zhuzhou CSR Times Electric Co., Ltd., Class H | 178,000 | 520,461 | ||||||
824,505 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Ginko International Co., Ltd. | 303,233 | 3,725,833 | ||||||
Household & Personal Products 0.1% | ||||||||
Vinda International Holdings Ltd. | 826,000 | 1,149,232 | ||||||
Materials 0.1% | ||||||||
AMVIG Holdings Ltd. | 4,556,000 | 1,349,428 | ||||||
China Bluechemical Ltd., Class H | 1,248,000 | 787,995 | ||||||
2,137,423 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Sino Biopharmaceutical Ltd. | 2,896,000 | 1,152,441 | ||||||
WuXi PharmaTech Cayman, Inc. ADR * | 22,248 | 315,699 | ||||||
1,468,140 | ||||||||
Real Estate 0.1% | ||||||||
Longfor Properties Co., Ltd. | 508,500 | 893,164 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Spreadtrum Communications, Inc. ADR | 23,536 | 542,505 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Hollysys Automation Technologies Ltd. * | 37,761 | 391,959 | ||||||
13,008,606 | ||||||||
Colombia 0.2% | ||||||||
Energy 0.2% | ||||||||
Ecopetrol S.A. | 864,682 | 2,572,665 | ||||||
Cyprus 0.0% | ||||||||
Transportation 0.0% | ||||||||
Globaltrans Investment plc GDR - Reg’d | 40,475 | 748,788 | ||||||
Denmark 1.1% | ||||||||
Banks 0.0% | ||||||||
Danske Bank A/S * | 10,154 | 158,846 | ||||||
Capital Goods 0.1% | ||||||||
Rockwool International A/S, B Shares | 12,005 | 1,130,021 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Pandora A/S | 104,501 | 1,659,289 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Carlsberg A/S, Class B | 1,681 | 145,101 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Coloplast A/S, Class B | 11,199 | 2,456,455 | ||||||
William Demant Holding A/S * | 443 | 38,100 | ||||||
2,494,555 | ||||||||
Insurance 0.0% | ||||||||
Tryg A/S | 368 | 24,028 | ||||||
Materials 0.7% | ||||||||
Christian Hansen Holding A/S | 352,821 | 11,040,672 | ||||||
Novozymes A/S, B Shares | 3,747 | 103,526 | ||||||
11,144,198 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Novo Nordisk A/S, Class B | 6,345 | 1,017,201 | ||||||
Software & Services 0.0% | ||||||||
SimCorp A/S | 2,573 | 562,851 | ||||||
Telecommunication Services 0.0% | ||||||||
TDC A/S | 7,940 | 54,744 | ||||||
Transportation 0.0% | ||||||||
AP Moller - Maersk A/S, Series A | 9 | 59,632 | ||||||
AP Moller - Maersk A/S, Series B | 20 | 139,593 | ||||||
DSV A/S | 3,059 | 68,810 | ||||||
268,035 | ||||||||
18,658,869 | ||||||||
Finland 0.5% | ||||||||
Automobiles & Components 0.1% | ||||||||
Nokian Renkaat Oyj | 31,565 | 1,314,580 | ||||||
Capital Goods 0.2% | ||||||||
Kone Oyj, Class B | 34,750 | 2,491,890 | ||||||
Metso Oyj | 1,916 | 67,383 | ||||||
Outotec Oyj | 26,091 | 1,274,853 | ||||||
Wartsila Oyj Abp | 2,658 | 107,643 | ||||||
3,941,769 | ||||||||
Diversified Financials 0.0% | ||||||||
Pohjola Bank plc, A Shares | 2,071 | 28,251 | ||||||
Energy 0.0% | ||||||||
Neste Oil Oyj | 1,922 | 24,069 |
See financial notes 33
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food & Staples Retailing 0.0% | ||||||||
Kesko Oyj, B Shares | 1,003 | 31,364 | ||||||
Insurance 0.0% | ||||||||
Sampo Oyj, A Shares | 6,533 | 204,833 | ||||||
Materials 0.2% | ||||||||
Huhtamaki Oyj | 157,282 | 2,659,292 | ||||||
Stora Enso Oyj, R Shares | 8,723 | 55,179 | ||||||
UPM-Kymmene Oyj | 8,330 | 89,437 | ||||||
2,803,908 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 1,428 | 35,334 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Nokia Oyj | 57,419 | 154,370 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 2,120 | 45,493 | ||||||
Utilities 0.0% | ||||||||
Fortum Oyj | 6,918 | 128,038 | ||||||
8,712,009 | ||||||||
France 7.8% | ||||||||
Automobiles & Components 0.0% | ||||||||
Compagnie Generale des Etablissements Michelin | 2,795 | 240,942 | ||||||
Peugeot S.A. * | 3,449 | 22,124 | ||||||
Renault S.A. | 2,997 | 134,382 | ||||||
397,448 | ||||||||
Banks 1.2% | ||||||||
BNP Paribas S.A. | 387,626 | 19,553,778 | ||||||
Credit Agricole S.A. * | 14,982 | 113,087 | ||||||
Natixis | 13,865 | 45,506 | ||||||
Societe Generale S.A. * | 11,050 | 352,408 | ||||||
20,064,779 | ||||||||
Capital Goods 0.5% | ||||||||
Alstom S.A. | 3,268 | 111,710 | ||||||
Bouygues S.A. | 2,833 | 68,090 | ||||||
Compagnie de Saint-Gobain | 6,158 | 216,917 | ||||||
Legrand S.A. | 3,780 | 145,828 | ||||||
Mersen S.A. | 92,004 | 2,328,629 | ||||||
Nexans S.A. | 88,971 | 3,788,545 | ||||||
Rexel S.A. | 1,590 | 28,798 | ||||||
Safran S.A. | 3,491 | 139,060 | ||||||
Schneider Electric S.A. | 8,154 | 510,559 | ||||||
Thales S.A. | 1,517 | 53,400 | ||||||
Vallourec S.A. | 1,597 | 65,695 | ||||||
Vinci S.A. | 7,282 | 322,783 | ||||||
Zodiac Aerospace | 9,969 | 1,022,166 | ||||||
8,802,180 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Bureau Veritas S.A. | 819 | 86,983 | ||||||
Edenred | 23,985 | 694,104 | ||||||
Societe BIC S.A. | 7,043 | 859,411 | ||||||
1,640,498 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Christian Dior S.A. | 25,151 | 3,613,408 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 3,964 | 644,470 | ||||||
4,257,878 | ||||||||
Consumer Services 0.0% | ||||||||
Accor S.A. | 2,211 | 69,088 | ||||||
Sodexo | 1,491 | 114,860 | ||||||
183,948 | ||||||||
Diversified Financials 0.0% | ||||||||
Eurazeo | 496 | 22,737 | ||||||
Wendel S.A. | 493 | 43,463 | ||||||
66,200 | ||||||||
Energy 0.2% | ||||||||
Compagnie Generale de Geophysique - Veritas * | 2,163 | 70,416 | ||||||
Technip S.A. | 19,262 | 2,172,577 | ||||||
Total S.A. | 33,224 | 1,673,500 | ||||||
3,916,493 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Carrefour S.A. | 8,960 | 216,390 | ||||||
Casino Guichard Perrachon S.A. | 826 | 72,102 | ||||||
288,492 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Danone S.A. | 57,530 | 3,538,516 | ||||||
Pernod-Ricard S.A. | 3,348 | 360,569 | ||||||
Remy Cointreau S.A. | 330 | 34,227 | ||||||
3,933,312 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Essilor International S.A. | 3,114 | 280,800 | ||||||
Medica S.A. | 167,290 | 2,990,125 | ||||||
3,270,925 | ||||||||
Household & Personal Products 0.0% | ||||||||
L’Oreal S.A. | 3,741 | 476,781 | ||||||
Insurance 0.5% | ||||||||
AXA S.A. | 391,257 | 6,236,128 | ||||||
CNP Assurances | 2,227 | 31,470 | ||||||
Euler Hermes S.A. | 24,338 | 1,679,473 | ||||||
SCOR SE | 2,591 | 69,183 | ||||||
8,016,254 | ||||||||
Materials 0.2% | ||||||||
Air Liquide S.A. | 4,878 | 575,858 | ||||||
Arkema S.A. | 31,827 | 2,904,200 | ||||||
Imerys S.A. | 509 | 28,635 | ||||||
Lafarge S.A. | 2,886 | 169,204 | ||||||
3,677,897 | ||||||||
Media 0.7% | ||||||||
Eutelsat Communications S.A. | 1,976 | 63,273 | ||||||
Ipsos | 88,381 | 3,107,057 | ||||||
JC Decaux S.A. | 997 | 21,106 | ||||||
Lagardere S.C.A. | 1,770 | 48,460 | ||||||
Publicis Groupe S.A. | 163,278 | 8,800,277 | ||||||
12,040,173 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Boiron S.A. | 64,897 | 2,077,670 | ||||||
Eurofins Scientific | 21,491 | 3,326,746 |
34 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sanofi | 91,611 | 8,045,957 | ||||||
13,450,373 | ||||||||
Real Estate 0.3% | ||||||||
Fonciere des Regions | 412 | 33,161 | ||||||
Gecina S.A. | 329 | 36,496 | ||||||
ICADE | 350 | 31,500 | ||||||
Klepierre | 1,564 | 58,014 | ||||||
Unibail-Rodamco SE | 19,973 | 4,498,629 | ||||||
4,657,800 | ||||||||
Retailing 0.6% | ||||||||
CFAO | 12,543 | 605,499 | ||||||
PPR | 54,882 | 9,675,052 | ||||||
10,280,551 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
STMicroelectronics N.V. | 9,557 | 56,288 | ||||||
Software & Services 0.2% | ||||||||
Altran Technologies S.A. * | 309,692 | 2,086,151 | ||||||
AtoS | 901 | 60,495 | ||||||
Cap Gemini S.A. | 2,219 | 93,350 | ||||||
Dassault Systemes S.A. | 981 | 103,500 | ||||||
2,343,496 | ||||||||
Technology Hardware & Equipment 0.9% | ||||||||
Alcatel-Lucent * | 34,792 | 35,574 | ||||||
Gemalto N.V. | 30,321 | 2,738,602 | ||||||
Ingenico S.A. | 110,561 | 5,854,034 | ||||||
Neopost S.A. | 106,678 | 5,848,620 | ||||||
14,476,830 | ||||||||
Telecommunication Services 0.4% | ||||||||
France Telecom S.A. | 28,871 | 322,706 | ||||||
Iliad S.A. | 13,042 | 2,009,682 | ||||||
Vivendi S.A. | 163,415 | 3,348,600 | ||||||
5,680,988 | ||||||||
Transportation 0.0% | ||||||||
Aeroports de Paris | 519 | 40,166 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 8,871 | 67,557 | ||||||
107,723 | ||||||||
Utilities 0.5% | ||||||||
EDF S.A. | 3,627 | 76,752 | ||||||
GDF Suez | 19,790 | 454,227 | ||||||
Rubis | 110,312 | 6,730,669 | ||||||
Suez Environnement Co. | 4,195 | 44,533 | ||||||
Veolia Environnement S.A. | 5,454 | 53,984 | ||||||
7,360,165 | ||||||||
129,447,472 | ||||||||
Germany 7.5% | ||||||||
Automobiles & Components 1.0% | ||||||||
Bayerische Motoren Werke AG | 5,152 | 411,881 | ||||||
Continental AG | 1,266 | 127,423 | ||||||
Daimler AG - Reg’d | 259,942 | 12,176,940 | ||||||
ElringKlinger AG | 111,371 | 3,104,725 | ||||||
Volkswagen AG | 442 | 86,436 | ||||||
15,907,405 | ||||||||
Banks 0.0% | ||||||||
Commerzbank AG * | 56,777 | 109,073 | ||||||
Capital Goods 1.4% | ||||||||
Brenntag AG | 10,649 | 1,343,679 | ||||||
Duerr AG | 26,292 | 1,972,322 | ||||||
GEA Group AG | 20,825 | 651,572 | ||||||
Gildemeister AG | 78,415 | 1,455,339 | ||||||
Hochtief AG * | 480 | 23,843 | ||||||
KUKA AG * | 74,624 | 2,240,120 | ||||||
MAN SE | 665 | 67,203 | ||||||
MTU Aero Engines Holding AG | 90,789 | 7,632,153 | ||||||
NORMA Group | 156,639 | 4,328,547 | ||||||
Rational AG | 9,724 | 2,461,536 | ||||||
Siemens AG - Reg’d | 12,817 | 1,291,427 | ||||||
23,467,741 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
Bilfinger SE | 56,908 | 5,576,552 | ||||||
Consumer Durables & Apparel 0.3% | ||||||||
Adidas AG | 3,242 | 276,338 | ||||||
Gerry Weber International AG | 100,938 | 4,589,925 | ||||||
Hugo Boss AG | 414 | 41,552 | ||||||
4,907,815 | ||||||||
Diversified Financials 0.1% | ||||||||
Deutsche Bank AG - Reg’d | 44,100 | 2,008,802 | ||||||
Deutsche Boerse AG | 3,030 | 164,183 | ||||||
2,172,985 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Metro AG | 1,944 | 56,043 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Suedzucker AG | 994 | 38,532 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Celesio AG | 1,275 | 24,718 | ||||||
Fresenius Medical Care AG & Co KGaA | 3,256 | 228,780 | ||||||
Fresenius SE & Co KGaA | 22,384 | 2,552,361 | ||||||
2,805,859 | ||||||||
Household & Personal Products 0.0% | ||||||||
Beiersdorf AG | 1,597 | 116,181 | ||||||
Henkel AG & Co. KGaA | 2,052 | 132,865 | ||||||
249,046 | ||||||||
Insurance 0.7% | ||||||||
Allianz SE - Reg’d | 92,456 | 11,485,379 | ||||||
Hannover Rueckversicherung AG - Reg’d | 904 | 63,690 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 2,793 | 449,404 | ||||||
11,998,473 | ||||||||
Materials 1.4% | ||||||||
BASF SE | 14,308 | 1,186,854 | ||||||
BASF SE ADR | 60,150 | 4,968,992 | ||||||
HeidelbergCement AG | 2,226 | 118,294 | ||||||
K&S AG - Reg’d | 2,720 | 128,913 | ||||||
Lanxess AG | 18,933 | 1,566,300 | ||||||
Linde AG | 2,914 | 490,375 | ||||||
Salzgitter AG | 586 | 25,342 | ||||||
Symrise AG | 402,677 | 14,484,488 | ||||||
ThyssenKrupp AG | 6,015 | 137,067 |
See financial notes 35
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Wacker Chemie AG | 235 | 13,287 | ||||||
23,119,912 | ||||||||
Media 0.2% | ||||||||
Axel Springer AG | 593 | 25,445 | ||||||
GfK SE | 64,695 | 2,945,805 | ||||||
Kabel Deutschland Holding AG | 1,448 | 104,479 | ||||||
3,075,729 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.5% | ||||||||
Bayer AG - Reg’d | 59,291 | 5,169,763 | ||||||
Merck KGaA | 1,024 | 130,973 | ||||||
QIAGEN N.V. * | 150,175 | 2,616,206 | ||||||
7,916,942 | ||||||||
Real Estate 0.2% | ||||||||
Deutsche Wohnen AG | 28,477 | 521,535 | ||||||
GSW Immobilien AG | 31,056 | 1,276,534 | ||||||
TAG Immobilien AG | 158,483 | 1,828,833 | ||||||
3,626,902 | ||||||||
Retailing 0.3% | ||||||||
Fielmann AG | 51,870 | 5,053,951 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Aixtron SE | 42,987 | 563,863 | ||||||
Infineon Technologies AG | 16,932 | 115,348 | ||||||
679,211 | ||||||||
Software & Services 0.7% | ||||||||
SAP AG | 84,239 | 6,142,960 | ||||||
United Internet AG - Reg’d | 1,612 | 32,259 | ||||||
Wirecard AG | 198,834 | 4,553,829 | ||||||
10,729,048 | ||||||||
Telecommunication Services 0.0% | ||||||||
Deutsche Telekom AG - Reg’d | 43,678 | 498,300 | ||||||
Transportation 0.0% | ||||||||
Deutsche Lufthansa AG - Reg’d | 3,433 | 52,522 | ||||||
Deutsche Post AG - Reg’d | 13,117 | 260,057 | ||||||
Fraport AG | 551 | 32,335 | ||||||
344,914 | ||||||||
Utilities 0.1% | ||||||||
E.ON AG | 28,119 | 640,131 | ||||||
RWE AG | 7,633 | 349,322 | ||||||
989,453 | ||||||||
123,323,886 | ||||||||
Greece 0.0% | ||||||||
Consumer Services 0.0% | ||||||||
OPAP S.A. | 3,348 | 21,399 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca Cola Hellenic Bottling Co., S.A. * | 3,321 | 71,025 | ||||||
92,424 | ||||||||
Hong Kong 2.6% | ||||||||
Automobiles & Components 0.1% | ||||||||
Brilliance China Automotive Holdings Ltd. * | 1,326,000 | 1,638,432 | ||||||
Banks 0.0% | ||||||||
Bank of East Asia Ltd. | 21,000 | 77,580 | ||||||
BOC Hong Kong (Holdings) Ltd. | 58,000 | 177,831 | ||||||
Hang Seng Bank Ltd. | 12,000 | 183,920 | ||||||
439,331 | ||||||||
Capital Goods 0.1% | ||||||||
China State Construction International Holdings Ltd. | 556,000 | 659,045 | ||||||
Hopewell Holdings Ltd. | 8,500 | 30,556 | ||||||
Hutchison Whampoa Ltd. | 33,000 | 323,284 | ||||||
Noble Group Ltd. | 58,000 | 61,928 | ||||||
NWS Holdings Ltd. | 20,000 | 30,142 | ||||||
1,104,955 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
China Everbright International Ltd. | 3,973,000 | 2,037,865 | ||||||
Consumer Durables & Apparel 0.4% | ||||||||
Man Wah Holdings Ltd. | 1,300,000 | 797,247 | ||||||
Techtronic Industries Co., Ltd. | 3,152,500 | 5,975,604 | ||||||
Yue Yuen Industrial Holdings Ltd. | 11,000 | 37,861 | ||||||
6,810,712 | ||||||||
Consumer Services 0.0% | ||||||||
Galaxy Entertainment Group Ltd. * | 24,000 | 81,978 | ||||||
Melco Crown Entertainment Ltd. ADR * | 18,790 | 272,643 | ||||||
Sands China Ltd. | 38,000 | 142,048 | ||||||
Shangri-La Asia Ltd. | 26,000 | 50,191 | ||||||
SJM Holdings Ltd. | 29,683 | 64,330 | ||||||
Wynn Macau Ltd. | 23,200 | 65,358 | ||||||
676,548 | ||||||||
Diversified Financials 0.0% | ||||||||
First Pacific Co., Ltd. | 32,000 | 35,577 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 15,900 | 260,961 | ||||||
Value Partners Group Ltd. | 533,000 | 289,343 | ||||||
585,881 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Biostime International Holdings Ltd. | 65,500 | 167,548 | ||||||
Insurance 0.3% | ||||||||
AIA Group Ltd. | 1,268,600 | 5,002,682 | ||||||
Real Estate 0.5% | ||||||||
Cheung Kong (Holdings) Ltd. | 21,410 | 315,574 | ||||||
China Overseas Grand Oceans Group Ltd. | 3,329,250 | 3,464,607 | ||||||
China Overseas Land & Investment Ltd. | 758,000 | 1,973,716 | ||||||
Hang Lung Group Ltd. | 14,000 | 82,749 | ||||||
Hang Lung Properties Ltd. | 35,000 | 121,191 | ||||||
Henderson Land Development Co., Ltd. | 15,000 | 103,445 | ||||||
Hysan Development Co., Ltd. | 10,000 | 44,113 | ||||||
Kerry Properties Ltd. | 11,000 | 54,535 | ||||||
New World Development Co., Ltd. | 62,000 | 95,392 |
36 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sino Land Co., Ltd. | 44,000 | 78,499 | ||||||
Sun Hung Kai Properties Ltd. | 25,000 | 345,598 | ||||||
Swire Pacific Ltd., Class A | 10,500 | 124,192 | ||||||
The Link REIT | 195,500 | 971,508 | ||||||
Wharf Holdings Ltd. | 23,349 | 159,200 | ||||||
Wheelock & Co., Ltd. | 14,000 | 61,067 | ||||||
7,995,386 | ||||||||
Retailing 0.2% | ||||||||
Emperor Watch & Jewellery Ltd. | 21,750,000 | 2,063,604 | ||||||
Li & Fung Ltd. | 90,000 | 150,135 | ||||||
Lifestyle International Holdings Ltd. | 9,000 | 19,185 | ||||||
Sa Sa International Holdings Ltd. | 958,000 | 655,956 | ||||||
2,888,880 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASM Pacific Technology Ltd. | 210,600 | 2,342,752 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
AAC Technologies Holdings, Inc. | 1,123,500 | 4,000,205 | ||||||
China High Precision Automation Group Ltd. (a) | 766,000 | 30,640 | ||||||
Foxconn International Holdings Ltd. * | 32,000 | 11,102 | ||||||
Lenovo Group Ltd. | 1,596,000 | 1,277,881 | ||||||
5,319,828 | ||||||||
Telecommunication Services 0.1% | ||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | 1,820,000 | 754,780 | ||||||
PCCW Ltd. | 60,000 | 24,172 | ||||||
SmarTone Telecommunications Holdings Ltd. | 447,000 | 900,683 | ||||||
1,679,635 | ||||||||
Transportation 0.2% | ||||||||
Cathay Pacific Airways Ltd. | 18,000 | 32,509 | ||||||
MTR Corp., Ltd. | 21,500 | 83,864 | ||||||
Orient Overseas International Ltd. | 3,500 | 22,036 | ||||||
Pacific Basin Shipping Ltd. | 5,924,000 | 3,161,768 | ||||||
3,300,177 | ||||||||
Utilities 0.1% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 7,400 | 43,355 | ||||||
CLP Holdings Ltd. | 28,000 | 238,571 | ||||||
Hong Kong & China Gas Co., Ltd. | 81,400 | 216,086 | ||||||
Power Assets Holdings Ltd. | 22,000 | 186,946 | ||||||
684,958 | ||||||||
42,675,570 | ||||||||
India 0.9% | ||||||||
Automobiles & Components 0.1% | ||||||||
Tata Motors Ltd. | 425,937 | 2,025,835 | ||||||
Banks 0.1% | ||||||||
IndusInd Bank Ltd. | 58,275 | 393,191 | ||||||
Yes Bank Ltd. | 85,272 | 650,981 | ||||||
1,044,172 | ||||||||
Capital Goods 0.1% | ||||||||
Cummins India Ltd. | 167,212 | 1,515,725 | ||||||
Diversified Financials 0.1% | ||||||||
Crisil Ltd. | 12,335 | 217,077 | ||||||
Mahindra & Mahindra Financial Services Ltd. | 75,750 | 1,220,575 | ||||||
Shriram Transport Finance Co., Ltd. | 21,928 | 253,962 | ||||||
1,691,614 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
McLeod Russel India Ltd. | 199,859 | 1,124,665 | ||||||
Tata Global Beverages Ltd. | 76,719 | 213,526 | ||||||
1,338,191 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Apollo Hospitals Enterprise Ltd. | 86,452 | 1,253,429 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Ipca Laboratories Ltd. | 56,559 | 482,689 | ||||||
Lupin Ltd. | 69,805 | 733,851 | ||||||
Sun Pharmaceutical Industries Ltd. | 98,088 | 1,263,432 | ||||||
Wockhardt Ltd. * | 49,776 | 1,385,541 | ||||||
3,865,513 | ||||||||
Real Estate 0.0% | ||||||||
Oberoi Realty Ltd. | 79,710 | 404,926 | ||||||
Software & Services 0.1% | ||||||||
HCL Technologies Ltd. | 47,279 | 532,818 | ||||||
Hexaware Technologies Ltd. | 288,141 | 597,619 | ||||||
1,130,437 | ||||||||
14,269,842 | ||||||||
Indonesia 0.5% | ||||||||
Banks 0.1% | ||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 1,630,000 | 1,249,082 | ||||||
Capital Goods 0.1% | ||||||||
PT United Tractors Tbk | 654,893 | 1,429,959 | ||||||
Materials 0.0% | ||||||||
PT Semen Gresik (Persero) Tbk | 668,000 | 1,032,744 | ||||||
Media 0.0% | ||||||||
Media Nusantara Citra Tbk PT | 2,077,000 | 609,108 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Kalbe Farma Tbk PT | 13,819,000 | 1,392,178 | ||||||
Real Estate 0.0% | ||||||||
Alam Sutera Realty Tbk PT | 8,386,500 | 503,694 | ||||||
Retailing 0.1% | ||||||||
PT Mitra Adiperkasa Tbk | 1,765,500 | 1,199,065 | ||||||
Transportation 0.1% | ||||||||
PT Jasa Marga | 1,980,000 | 1,192,375 | ||||||
8,608,205 |
See financial notes 37
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ireland 1.5% | ||||||||
Banks 0.3% | ||||||||
The Governor & Company of the Bank of Ireland * | 46,134,700 | 5,449,761 | ||||||
Capital Goods 0.6% | ||||||||
Cooper Industries plc | 92,300 | 6,916,962 | ||||||
Ingersoll-Rand plc | 43,200 | 2,031,696 | ||||||
8,948,658 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Experian plc | 209,235 | 3,619,966 | ||||||
Consumer Services 0.1% | ||||||||
Paddy Power plc | 9,742 | 718,715 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Glanbia plc | 452,894 | 4,314,585 | ||||||
Kerry Group plc, Class A | 2,289 | 119,773 | ||||||
4,434,358 | ||||||||
Materials 0.0% | ||||||||
CRH plc | 11,148 | 207,505 | ||||||
Media 0.0% | ||||||||
WPP plc | 19,544 | 252,611 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Elan Corp. plc * | 7,936 | 86,369 | ||||||
Shire plc | 8,617 | 242,306 | ||||||
328,675 | ||||||||
23,960,249 | ||||||||
Israel 0.2% | ||||||||
Banks 0.0% | ||||||||
Bank Hapoalim B.M. * | 15,869 | 62,430 | ||||||
Bank Leumi Le-Israel B.M. * | 21,774 | 70,183 | ||||||
Mizrahi Tefahot Bank Ltd. * | 1,853 | 16,826 | ||||||
149,439 | ||||||||
Capital Goods 0.0% | ||||||||
Delek Group Ltd. | 68 | 12,931 | ||||||
Materials 0.0% | ||||||||
Israel Chemicals Ltd. | 6,666 | 83,396 | ||||||
The Israel Corp., Ltd. | 35 | 23,785 | ||||||
107,181 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Teva Pharmaceutical Industries Ltd. | 14,712 | 593,503 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Mellanox Technologies Ltd. * | 40,633 | 3,126,602 | ||||||
Software & Services 0.0% | ||||||||
NICE Systems Ltd. * | 898 | 29,996 | ||||||
Telecommunication Services 0.0% | ||||||||
Bezeq Israeli Telecommunication Corp., Ltd. | 26,399 | 32,162 | ||||||
4,051,814 | ||||||||
Italy 2.0% | ||||||||
Automobiles & Components 0.1% | ||||||||
Fiat S.p.A. * | 13,397 | 65,565 | ||||||
Pirelli & C. S.p.A. | 166,492 | 1,934,075 | ||||||
1,999,640 | ||||||||
Banks 0.7% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. * | 73,168 | 20,226 | ||||||
Banco Popolare Scarl * | 26,443 | 42,197 | ||||||
Intesa Sanpaolo S.p.A. | 7,189,720 | 11,581,863 | ||||||
Intesa Sanpaolo S.p.A. - RSP | 13,982 | 18,499 | ||||||
UniCredit S.p.A. * | 64,240 | 284,144 | ||||||
Unione di Banche Italiane S.C.P.A. | 14,686 | 57,851 | ||||||
12,004,780 | ||||||||
Capital Goods 0.7% | ||||||||
Fiat Industrial S.p.A. | 914,233 | 9,909,350 | ||||||
Finmeccanica S.p.A. * | 6,068 | 30,094 | ||||||
Prysmian S.p.A. | 34,023 | 655,995 | ||||||
10,595,439 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Luxottica Group S.p.A. | 1,751 | 66,832 | ||||||
Salvatore Ferragamo Italia S.p.A. | 55,829 | 1,137,017 | ||||||
Tod’s S.p.A. | 6,991 | 819,415 | ||||||
2,023,264 | ||||||||
Consumer Services 0.0% | ||||||||
Autogrill S.p.A. | 1,717 | 17,576 | ||||||
Diversified Financials 0.3% | ||||||||
Azimut Holding S.p.A. | 41,522 | 527,499 | ||||||
Banca Generali S.p.A. | 280,964 | 4,126,188 | ||||||
Exor S.p.A. | 961 | 24,801 | ||||||
Mediobanca S.p.A. | 7,747 | 44,295 | ||||||
4,722,783 | ||||||||
Energy 0.1% | ||||||||
Eni S.p.A. | 39,846 | 916,893 | ||||||
Saipem S.p.A. | 4,111 | 185,238 | ||||||
Tenaris S.A. | 7,371 | 138,166 | ||||||
1,240,297 | ||||||||
Insurance 0.0% | ||||||||
Assicurazioni Generali S.p.A. | 18,525 | 301,662 | ||||||
Media 0.0% | ||||||||
Mediaset S.p.A. | 10,627 | 18,668 | ||||||
Telecommunication Services 0.0% | ||||||||
Telecom Italia S.p.A. | 146,192 | 134,879 | ||||||
Telecom Italia S.p.A. - RSP | 90,360 | 72,357 | ||||||
207,236 | ||||||||
Transportation 0.0% | ||||||||
Atlantia S.p.A. | 4,962 | 82,071 | ||||||
Utilities 0.0% | ||||||||
Enel Green Power S.p.A. | 26,240 | 44,693 | ||||||
Enel S.p.A. | 102,618 | 386,433 | ||||||
Snam S.p.A. | 25,417 | 112,632 |
38 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 21,282 | 80,016 | ||||||
623,774 | ||||||||
33,837,190 | ||||||||
Japan 13.3% | ||||||||
Automobiles & Components 2.2% | ||||||||
Aisin Seiki Co., Ltd. | 21,800 | 636,654 | ||||||
Bridgestone Corp. | 10,100 | 235,926 | ||||||
Daihatsu Motor Co., Ltd. | 3,000 | 52,504 | ||||||
Denso Corp. | 7,500 | 235,478 | ||||||
F.C.C. Co., Ltd. | 248,900 | 4,470,156 | ||||||
Fuji Heavy Industries Ltd. | 72,000 | 694,087 | ||||||
Honda Motor Co., Ltd. | 336,407 | 10,113,479 | ||||||
Isuzu Motors Ltd. | 18,317 | 96,889 | ||||||
Koito Manufacturing Co., Ltd. | 2,000 | 24,843 | ||||||
Mazda Motor Corp. * | 39,000 | 46,516 | ||||||
Mitsubishi Motors Corp. * | 58,000 | 49,994 | ||||||
NGK Spark Plug Co., Ltd. | 3,000 | 33,596 | ||||||
NHK Spring Co., Ltd. | 2,200 | 18,374 | ||||||
Nifco, Inc. | 262,000 | 5,953,913 | ||||||
Nissan Motors Co., Ltd. | 38,700 | 323,662 | ||||||
NOK Corp. | 1,600 | 25,669 | ||||||
Stanley Electric Co., Ltd. | 2,200 | 30,276 | ||||||
Sumitomo Rubber Industries Ltd. | 2,600 | 30,652 | ||||||
Suzuki Motor Corp. | 5,900 | 133,805 | ||||||
Toyoda Gosei Co., Ltd. | 1,000 | 19,693 | ||||||
Toyota Boshoku Corp. | 1,000 | 9,482 | ||||||
Toyota Industries Corp. | 2,514 | 71,930 | ||||||
Toyota Motor Corp. | 331,477 | 12,780,807 | ||||||
Yamaha Motor Co., Ltd. | 4,200 | 40,102 | ||||||
36,128,487 | ||||||||
Banks 0.8% | ||||||||
Aozora Bank Ltd. | 9,000 | 25,380 | ||||||
Fukuoka Financial Group, Inc. | 12,000 | 46,927 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 198,500 | 898,008 | ||||||
Mizuho Financial Group, Inc. | 356,400 | 557,652 | ||||||
Resona Holdings, Inc. | 29,500 | 127,652 | ||||||
Seven Bank Ltd. | 856,700 | 2,449,320 | ||||||
Shinsei Bank Ltd. | 21,000 | 30,788 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 228,300 | 6,976,159 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 49,000 | 148,705 | ||||||
Suruga Bank Ltd. | 86,000 | 1,032,775 | ||||||
The Bank of Kyoto Ltd. | 5,000 | 42,976 | ||||||
The Bank of Yokohama Ltd. | 19,000 | 87,439 | ||||||
The Chiba Bank Ltd. | 12,000 | 70,094 | ||||||
The Chugoku Bank Ltd. | 3,000 | 41,288 | ||||||
The Gunma Bank Ltd. | 6,000 | 28,946 | ||||||
The Hachijuni Bank Ltd. | 7,000 | 36,161 | ||||||
The Iyo Bank Ltd. | 4,000 | 30,927 | ||||||
The Joyo Bank Ltd. | 10,000 | 48,395 | ||||||
The Nishi-Nippon City Bank Ltd. | 10,000 | 22,802 | ||||||
The Shizuoka Bank Ltd. | 8,454 | 86,467 | ||||||
Yamaguchi Financial Group, Inc. | 3,274 | 27,126 | ||||||
12,815,987 | ||||||||
Capital Goods 1.1% | ||||||||
Amada Co., Ltd. | 6,000 | 30,466 | ||||||
Asahi Glass Co., Ltd. | 16,000 | 108,765 | ||||||
Chiyoda Corp. | 33,417 | 539,796 | ||||||
Daikin Industries Ltd. | 3,500 | 96,888 | ||||||
Ebara Corp. | 98,000 | 384,321 | ||||||
Fanuc Corp. | 13,051 | 2,079,229 | ||||||
Fuji Electric Co., Ltd. | 8,000 | 16,229 | ||||||
Furukawa Electric Co., Ltd. * | 10,000 | 19,942 | ||||||
GS Yuasa Corp. | 5,000 | 19,491 | ||||||
Hino Motors Ltd. | 4,000 | 30,919 | ||||||
Hitachi Construction Machinery Co., Ltd. | 1,600 | 26,305 | ||||||
IHI Corp. | 20,000 | 42,119 | ||||||
ITOCHU Corp. | 23,300 | 233,223 | ||||||
JGC Corp. | 3,000 | 103,216 | ||||||
JTEKT Corp. | 3,300 | 24,782 | ||||||
Kajima Corp. | 13,000 | 36,003 | ||||||
Kawasaki Heavy Industries Ltd. | 23,000 | 47,314 | ||||||
Kinden Corp. | 2,000 | 12,522 | ||||||
Komatsu Ltd. | 14,400 | 301,747 | ||||||
Kubota Corp. | 17,000 | 173,827 | ||||||
Kurita Water Industries Ltd. | 1,700 | 38,592 | ||||||
LIXIL Group Corp. | 33,700 | 745,049 | ||||||
Mabuchi Motor Co., Ltd. | 400 | 16,951 | ||||||
Makita Corp. | 18,700 | 740,348 | ||||||
Marubeni Corp. | 25,445 | 164,881 | ||||||
Misumi Group, Inc. | 7,100 | 174,438 | ||||||
Mitsubishi Corp. | 21,649 | 386,498 | ||||||
Mitsubishi Electric Corp. | 30,000 | 224,240 | ||||||
Mitsubishi Heavy Industries Ltd. | 48,000 | 202,180 | ||||||
Mitsui & Co., Ltd. | 27,000 | 380,571 | ||||||
Miura Co., Ltd. | 68,900 | 1,574,612 | ||||||
Monotaro Co., Ltd. | 92,314 | 2,424,146 | ||||||
Nabtesco Corp. | 1,400 | 26,128 | ||||||
NGK Insulators Ltd. | 4,000 | 44,600 | ||||||
Nidec Corp. | 1,700 | 120,979 | ||||||
NSK Ltd. | 7,000 | 38,448 | ||||||
NTN Corp. | 7,000 | 12,558 | ||||||
Obayashi Corp. | 10,000 | 44,736 | ||||||
Sanwa Holdings Corp. | 394,000 | 1,575,139 | ||||||
Shimizu Corp. | 9,000 | 30,110 | ||||||
SMC Corp. | 837 | 131,960 | ||||||
Sojitz Corp. | 18,800 | 23,338 | ||||||
Sumitomo Corp. | 17,400 | 237,210 | ||||||
Sumitomo Electric Industries Ltd. | 11,800 | 126,941 | ||||||
Sumitomo Heavy Industries Ltd. | 9,000 | 32,267 | ||||||
Taisei Corp. | 15,000 | 41,358 | ||||||
Tatsuta Electric Wire and Cable Co., Ltd. | 120,000 | 1,193,727 | ||||||
The Japan Steel Works Ltd. | 5,000 | 29,639 | ||||||
THK Co., Ltd. | 1,800 | 29,924 | ||||||
Toshiba Plant Systems & Services Corp. | 104,000 | 1,407,126 | ||||||
TOTO Ltd. | 4,313 | 32,324 | ||||||
Toyota Tsusho Corp. | 3,200 | 69,897 |
See financial notes 39
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ushio, Inc. | 179,800 | 1,897,090 | ||||||
18,545,109 | ||||||||
Commercial & Professional Supplies 0.6% | ||||||||
Dai Nippon Printing Co., Ltd. | 9,000 | 63,774 | ||||||
Meitec Corp. | 120,000 | 2,642,071 | ||||||
Park24 Co., Ltd. | 53,500 | 919,230 | ||||||
Secom Co., Ltd. | 106,900 | 5,444,850 | ||||||
Toppan Printing Co., Ltd. | 9,000 | 52,017 | ||||||
9,121,942 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Arnest One Corp. | 33,600 | 498,484 | ||||||
Asics Corp. | 2,200 | 31,972 | ||||||
Casio Computer Co., Ltd. | 3,600 | 27,549 | ||||||
Namco Bandai Holdings, Inc. | 2,900 | 45,568 | ||||||
Nikon Corp. | 145,900 | 3,721,806 | ||||||
Panasonic Corp. | 33,900 | 205,622 | ||||||
Rinnai Corp. | 500 | 34,150 | ||||||
Sankyo Co., Ltd. | 800 | 36,245 | ||||||
Sega Sammy Holdings, Inc. | 3,200 | 60,315 | ||||||
Sekisui Chemical Co., Ltd. | 7,000 | 57,488 | ||||||
Sekisui House Ltd. | 8,355 | 85,430 | ||||||
Sharp Corp. | 15,419 | 33,263 | ||||||
Shimano, Inc. | 6,945 | 437,812 | ||||||
Sony Corp. | 15,500 | 183,526 | ||||||
Yamaha Corp. | 2,400 | 21,567 | ||||||
5,480,797 | ||||||||
Consumer Services 0.0% | ||||||||
Benesse Holdings, Inc. | 1,000 | 48,169 | ||||||
McDonald’s Holdings Co., Ltd. | 6,200 | 172,275 | ||||||
Oriental Land Co., Ltd. | 800 | 109,124 | ||||||
329,568 | ||||||||
Diversified Financials 1.3% | ||||||||
Aeon Credit Service Co., Ltd. | 117,800 | 2,502,847 | ||||||
Credit Saison Co., Ltd. | 2,600 | 57,133 | ||||||
Daiwa Securities Group, Inc. | 3,188,000 | 12,717,446 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 870 | 37,511 | ||||||
Nomura Holdings, Inc. | 56,200 | 203,155 | ||||||
ORIX Corp. | 57,300 | 5,885,280 | ||||||
SBI Holdings, Inc. | 3,360 | 23,530 | ||||||
21,426,902 | ||||||||
Energy 0.0% | ||||||||
Cosmo Oil Co., Ltd. | 9,000 | 16,008 | ||||||
Idemitsu Kosan Co., Ltd. | 340 | 29,263 | ||||||
Inpex Corp. | 34 | 193,693 | ||||||
Japan Petroleum Exploration Co. | 400 | 15,056 | ||||||
JX Holdings, Inc. | 34,900 | 185,879 | ||||||
Showa Shell Sekiyu K.K. | 2,800 | 15,588 | ||||||
TonenGeneral Sekiyu K.K. | 4,367 | 39,631 | ||||||
495,118 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Aeon Co., Ltd. | 9,500 | 103,612 | ||||||
Ain Pharmaciez, Inc. | 6,500 | 460,287 | ||||||
Cosmos Pharmaceutical Corp. | 3,000 | 295,853 | ||||||
FamilyMart Co., Ltd. | 33,600 | 1,628,286 | ||||||
Lawson, Inc. | 28,229 | 2,074,551 | ||||||
Seven & I Holdings Co., Ltd. | 11,700 | 360,821 | ||||||
Sundrug Co., Ltd. | 12,800 | 471,442 | ||||||
Tsuruha Holdings, Inc. | 6,700 | 507,862 | ||||||
5,902,714 | ||||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Ajinomoto Co., Inc. | 10,000 | 152,679 | ||||||
Ariake Japan Co., Ltd. | 112,700 | 2,403,140 | ||||||
Asahi Group Holdings Ltd. | 6,100 | 139,222 | ||||||
Calbee, Inc. | 27,500 | 2,526,058 | ||||||
Coca-Cola West Co., Ltd. | 900 | 13,797 | ||||||
Japan Tobacco, Inc. | 127,600 | 3,528,425 | ||||||
Kikkoman Corp. | 3,000 | 39,833 | ||||||
Kirin Holdings Co., Ltd. | 14,000 | 175,744 | ||||||
Meiji Holdings Co., Ltd. | 1,000 | 45,754 | ||||||
Nippon Meat Packers, Inc. | 3,000 | 37,230 | ||||||
Nisshin Seifun Group, Inc. | 3,000 | 37,489 | ||||||
Nissin Food Holdings Co., Ltd. | 900 | 34,032 | ||||||
Toyo Suisan Kaisha Ltd. | 2,000 | 49,839 | ||||||
Yakult Honsha Co., Ltd. | 1,500 | 69,881 | ||||||
Yamazaki Baking Co., Ltd. | 2,000 | 24,038 | ||||||
9,277,161 | ||||||||
Health Care Equipment & Services 1.4% | ||||||||
Alfresa Holdings Corp. | 600 | 27,125 | ||||||
Hogy Medical Co., Ltd. | 97,200 | 4,973,090 | ||||||
M3, Inc. | 1,005 | 1,930,471 | ||||||
Medipal Holdings Corp. | 2,200 | 28,018 | ||||||
Miraca Holdings, Inc. | 105,500 | 4,455,366 | ||||||
Nihon Kohden Corp. | 58,700 | 2,183,573 | ||||||
Olympus Corp. * | 395,900 | 6,917,286 | ||||||
Ship Healthcare Holdings, Inc. | 77,100 | 2,570,936 | ||||||
Suzuken Co., Ltd. | 1,100 | 34,723 | ||||||
Sysmex Corp. | 14,600 | 686,502 | ||||||
Terumo Corp. | 2,400 | 103,370 | ||||||
23,910,460 | ||||||||
Household & Personal Products 0.1% | ||||||||
Kao Corp. | 8,200 | 230,351 | ||||||
Pigeon Corp. | 27,000 | 1,244,086 | ||||||
Shiseido Co., Ltd. | 5,400 | 68,338 | ||||||
Unicharm Corp. | 1,800 | 97,389 | ||||||
1,640,164 | ||||||||
Insurance 0.1% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 7,810 | 132,448 | ||||||
NKSJ Holdings, Inc. | 5,900 | 107,554 | ||||||
Sony Financial Holdings, Inc. | 2,600 | 46,365 | ||||||
T&D Holdings, Inc. | 8,700 | 95,067 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 131 | 151,040 | ||||||
Tokio Marine Holdings, Inc. | 11,200 | 296,466 | ||||||
828,940 | ||||||||
Materials 0.4% | ||||||||
Nippon Steel & Sumitomo Metal Corp. | 117,000 | 258,257 | ||||||
Air Water, Inc. | 2,278 | 28,544 | ||||||
Asahi Kasei Corp. | 19,463 | 107,071 | ||||||
Daicel Corp. | 5,000 | 30,019 | ||||||
Daido Steel Co., Ltd. | 4,373 | 18,964 | ||||||
Denki Kagaku Kogyo K.K. | 7,000 | 21,614 | ||||||
FP Corp. | 15,800 | 1,187,750 | ||||||
Hitachi Chemical Co., Ltd. | 1,600 | 22,565 | ||||||
Hitachi Metals Ltd. | 3,000 | 28,106 |
40 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
JFE Holdings, Inc. | 7,200 | 101,620 | ||||||
JSR Corp. | 2,700 | 46,314 | ||||||
Kaneka Corp. | 4,337 | 21,157 | ||||||
Kansai Paint Co., Ltd. | 152,373 | 1,641,396 | ||||||
Kobe Steel Ltd. | 37,000 | 32,481 | ||||||
Kuraray Co., Ltd. | 5,200 | 60,438 | ||||||
Maruichi Steel Tube Ltd. | 700 | 14,557 | ||||||
Mitsubishi Chemical Holdings Corp. | 20,500 | 81,192 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 6,000 | 29,645 | ||||||
Mitsubishi Materials Corp. | 17,000 | 49,427 | ||||||
Mitsui Chemicals, Inc. | 12,000 | 24,807 | ||||||
Nippon Paper Group, Inc. | 1,500 | 17,155 | ||||||
Nisshin Steel Holdings Co., Ltd. * | 1,000 | 6,627 | ||||||
Nitto Denko Corp. | 2,500 | 113,570 | ||||||
Oji Holdings Corp. | 13,000 | 38,121 | ||||||
Shin-Etsu Chemical Co., Ltd. | 6,324 | 357,073 | ||||||
Showa Denko K.K. | 22,000 | 33,652 | ||||||
Sumitomo Chemical Co., Ltd. | 24,000 | 67,447 | ||||||
Sumitomo Metal Mining Co., Ltd. | 8,000 | 105,359 | ||||||
Taiheiyo Cement Corp. | 16,000 | 34,110 | ||||||
Taiyo Holdings Co., Ltd. | 74,200 | 2,087,776 | ||||||
Taiyo Nippon Sanso Corp. | 4,000 | 21,954 | ||||||
Teijin Ltd. | 14,000 | 32,106 | ||||||
Toray Industries, Inc. | 23,000 | 134,255 | ||||||
Tosoh Corp. | 8,000 | 15,661 | ||||||
Toyo Seikan Kaisha Ltd. | 2,300 | 24,452 | ||||||
Ube Industries Ltd. | 15,000 | 34,259 | ||||||
Yamato Kogyo Co., Ltd. | 600 | 16,854 | ||||||
6,946,355 | ||||||||
Media 0.0% | ||||||||
Dentsu, Inc. | 2,900 | 68,503 | ||||||
Hakuhodo DY Holdings, Inc. | 350 | 20,975 | ||||||
Jupiter Telecommunications Co., Ltd. | 35 | 47,570 | ||||||
Toho Co., Ltd. | 1,700 | 29,650 | ||||||
166,698 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Astellas Pharma, Inc. | 47,000 | 2,337,666 | ||||||
Chugai Pharmaceutical Co., Ltd. | 3,400 | 68,888 | ||||||
Daiichi Sankyo Co., Ltd. | 10,500 | 160,713 | ||||||
Dainippon Sumitomo Pharma Co., Ltd. | 2,400 | 27,604 | ||||||
Eisai Co., Ltd. | 4,000 | 177,967 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 900 | 46,535 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 4,000 | 42,577 | ||||||
Mitsubishi Tanabe Pharma Corp. | 3,400 | 49,010 | ||||||
Ono Pharmaceutical Co., Ltd. | 1,300 | 78,493 | ||||||
Otsuka Holdings Co., Ltd. | 5,800 | 178,800 | ||||||
Santen Pharmaceutical Co., Ltd. | 1,100 | 48,186 | ||||||
Shionogi & Co., Ltd. | 4,500 | 74,709 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. | 600 | 48,456 | ||||||
Takeda Pharmaceutical Co., Ltd. | 12,400 | 576,362 | ||||||
Tsumura & Co. | 900 | 28,781 | ||||||
3,944,747 | ||||||||
Real Estate 0.4% | ||||||||
Aeon Mall Co., Ltd. | 1,100 | 28,532 | ||||||
Daito Trust Construction Co., Ltd. | 23,000 | 2,321,546 | ||||||
Daiwa House Industry Co., Ltd. | 8,000 | 121,322 | ||||||
Hulic Co., Ltd. * | 3,700 | 29,444 | ||||||
Japan Prime Realty Investment Corp. | 14 | 42,193 | ||||||
Japan Real Estate Investment Corp. | 10 | 100,133 | ||||||
Japan Retail Fund Investment Corp. | 28 | 51,046 | ||||||
Mitsubishi Estate Co., Ltd. | 20,000 | 395,811 | ||||||
Mitsui Fudosan Co., Ltd. | 13,000 | 262,792 | ||||||
Nippon Building Fund, Inc. | 10 | 107,432 | ||||||
Nomura Real Estate Holdings, Inc. | 1,400 | 25,130 | ||||||
Nomura Real Estate Office Fund, Inc. | 4 | 25,164 | ||||||
NTT Urban Development Corp. | 17 | 14,008 | ||||||
Sumitomo Realty & Development Co., Ltd. | 127,000 | 3,509,278 | ||||||
Tokyu Land Corp. | 7,000 | 39,297 | ||||||
7,073,128 | ||||||||
Retailing 0.7% | ||||||||
ABC-Mart, Inc. | 400 | 17,543 | ||||||
Fast Retailing Co., Ltd. | 9,600 | 2,137,631 | ||||||
H2O Retailing Corp. | 163,000 | 1,676,712 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 5,600 | 54,816 | ||||||
J. Front Retailing Co., Ltd. | 7,000 | 36,401 | ||||||
Jin Co., Ltd. | 44,000 | 1,322,998 | ||||||
Marui Group Co., Ltd. | 3,300 | 23,738 | ||||||
Nitori Holdings Co., Ltd. | 21,260 | 1,736,159 | ||||||
Rakuten, Inc. | 11,400 | 102,477 | ||||||
Ryohin Keikaku Co., Ltd. | 8,000 | 529,787 | ||||||
Sanrio Co., Ltd. | 700 | 23,047 | ||||||
Seria Co., Ltd. | 68,100 | 1,376,854 | ||||||
Shimamura Co., Ltd. | 9,842 | 1,025,865 | ||||||
Takashimaya Co., Ltd. | 4,000 | 26,309 | ||||||
United Arrows Ltd. | 63,200 | 1,619,319 | ||||||
USS Co., Ltd. | 330 | 34,697 | ||||||
Yamada Denki Co., Ltd. | 1,420 | 61,602 | ||||||
11,805,955 | ||||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
Advantest Corp. | 2,200 | 27,826 | ||||||
Rohm Co., Ltd. | 239,300 | 7,728,497 | ||||||
Sumco Corp. * | 1,700 | 11,659 | ||||||
Tokyo Electron Ltd. | 2,700 | 121,582 | ||||||
7,889,564 | ||||||||
Software & Services 0.2% | ||||||||
Dena Co., Ltd. | 1,800 | 56,180 | ||||||
Gree, Inc. | 1,400 | 24,404 | ||||||
Internet Initiative Japan, Inc. | 17,700 | 462,485 | ||||||
Itochu Techno-Solutions Corp. | 400 | 20,694 | ||||||
Konami Corp. | 1,400 | 32,139 | ||||||
Nexon Co., Ltd. * | 1,600 | 19,513 |
See financial notes 41
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Nintendo Co., Ltd. | 1,700 | 219,469 | ||||||
Nomura Research Institute Ltd. | 1,500 | 31,885 | ||||||
NTT Data Corp. | 19 | 61,927 | ||||||
Oracle Corp., Japan | 600 | 26,683 | ||||||
Otsuka Corp. | 4,346 | 354,335 | ||||||
Square Enix Holdings Co., Ltd. | 1,000 | 14,096 | ||||||
Trend Micro, Inc. | 1,600 | 44,852 | ||||||
Yahoo Japan Corp. | 5,699 | 1,961,295 | ||||||
3,329,957 | ||||||||
Technology Hardware & Equipment 1.7% | ||||||||
Anritsu Corp. | 50,000 | 628,978 | ||||||
Brother Industries Ltd. | 3,500 | 33,009 | ||||||
Canon, Inc. | 381,660 | 12,403,819 | ||||||
Citizen Holdings Co., Ltd. | 3,900 | 19,793 | ||||||
FUJIFILM Holdings Corp. | 7,200 | 121,539 | ||||||
Fujitsu Ltd. | 29,000 | 111,573 | ||||||
Hamamatsu Photonics K.K. | 1,000 | 34,670 | ||||||
Hirose Electric Co., Ltd. | 500 | 53,517 | ||||||
Hitachi High-Technologies Corp. | 900 | 19,724 | ||||||
Hitachi Ltd. | 73,000 | 387,132 | ||||||
Horiba Ltd. | 97,400 | 2,657,611 | ||||||
Hoya Corp. | 6,800 | 137,717 | ||||||
Ibiden Co., Ltd. | 1,800 | 22,699 | ||||||
Japan Aviation Electronics Industry Ltd. | 126,000 | 1,004,549 | ||||||
Keyence Corp. | 700 | 185,842 | ||||||
Konica Minolta Holdings, Inc. | 8,000 | 53,223 | ||||||
Kyocera Corp. | 2,400 | 211,101 | ||||||
Murata Manufacturing Co., Ltd. | 3,124 | 151,969 | ||||||
NEC Corp. * | 39,000 | 74,804 | ||||||
Nippon Electric Glass Co., Ltd. | 6,000 | 30,538 | ||||||
Omron Corp. | 454,200 | 9,055,061 | ||||||
Ricoh Co., Ltd. | 10,000 | 83,689 | ||||||
Seiko Epson Corp. | 1,900 | 10,566 | ||||||
Shimadzu Corp. | 4,000 | 26,937 | ||||||
TDK Corp. | 1,900 | 71,447 | ||||||
Toshiba Corp. | 62,000 | 230,373 | ||||||
Yaskawa Electric Corp. | 3,321 | 23,802 | ||||||
Yokogawa Electric Corp. | 47,600 | 541,841 | ||||||
28,387,523 | ||||||||
Telecommunication Services 0.1% | ||||||||
KDDI Corp. | 4,200 | 326,257 | ||||||
Nippon Telegraph & Telephone Corp. | 6,800 | 310,951 | ||||||
NTT DoCoMo, Inc. | 237 | 343,419 | ||||||
Softbank Corp. | 13,700 | 432,678 | ||||||
1,413,305 | ||||||||
Transportation 0.1% | ||||||||
All Nippon Airways Co., Ltd. | 19,000 | 40,240 | ||||||
Central Japan Railway Co. | 2,300 | 197,924 | ||||||
East Japan Railway Co. | 5,238 | 359,519 | ||||||
Hankyu Hanshin Holdings, Inc. | 19,000 | 105,182 | ||||||
Japan Airlines Co., Ltd. * | 900 | 42,841 | ||||||
Kamigumi Co., Ltd. | 4,000 | 32,260 | ||||||
Kawasaki Kisen Kaisha Ltd. * | 11,000 | 13,943 | ||||||
Keikyu Corp. | 7,000 | 65,927 | ||||||
Keio Corp. | 9,000 | 68,304 | ||||||
Keisei Electric Railway Co., Ltd. | 4,266 | 39,109 | ||||||
Kintetsu Corp. | 26,000 | 101,893 | ||||||
Mitsubishi Logistics Corp. | 2,000 | 25,793 | ||||||
Mitsui O.S.K. Lines, Ltd. | 17,000 | 40,748 | ||||||
Nippon Express Co., Ltd. | 13,000 | 47,573 | ||||||
Nippon Yusen K.K. | 27,000 | 51,466 | ||||||
Odakyu Electric Railway Co., Ltd. | 10,000 | 106,108 | ||||||
Tobu Railway Co., Ltd. | 16,000 | 85,023 | ||||||
Tokyu Corp. | 17,000 | 86,474 | ||||||
West Japan Railway Co. | 2,700 | 117,876 | ||||||
Yamato Holdings Co., Ltd. | 6,000 | 91,402 | ||||||
1,719,605 | ||||||||
Utilities 0.1% | ||||||||
Chubu Electric Power Co., Inc. | 9,931 | 102,331 | ||||||
Electric Power Development Co., Ltd. | 1,900 | 48,666 | ||||||
Hokkaido Electric Power Co., Inc. | 2,700 | 22,236 | ||||||
Hokuriku Electric Power Co. | 2,500 | 24,829 | ||||||
Kyushu Electric Power Co., Inc. | 6,400 | 48,530 | ||||||
Osaka Gas Co., Ltd. | 30,000 | 123,646 | ||||||
Shikoku Electric Power Co., Inc. | 2,700 | 28,867 | ||||||
The Chugoku Electric Power Co., Inc. | 4,500 | 48,406 | ||||||
The Kansai Electric Power Co., Inc. | 11,700 | 89,990 | ||||||
Toho Gas Co., Ltd. | 6,330 | 38,365 | ||||||
Tohoku Electric Power Co., Inc. * | 6,800 | 50,089 | ||||||
Tokyo Electric Power Co., Inc. * | 21,700 | 35,424 | ||||||
Tokyo Gas Co., Ltd. | 39,000 | 206,658 | ||||||
868,037 | ||||||||
219,448,223 | ||||||||
Luxembourg 0.4% | ||||||||
Energy 0.4% | ||||||||
Subsea 7 S.A. | 35,180 | 771,218 | ||||||
Tenaris S.A. ADR | 126,350 | 4,753,287 | ||||||
5,524,505 | ||||||||
Materials 0.0% | ||||||||
ArcelorMittal | 14,370 | 212,453 | ||||||
Media 0.0% | ||||||||
SES S.A. | 4,941 | 136,767 | ||||||
Telecommunication Services 0.0% | ||||||||
Millicom International Cellular S.A. SDR | 976 | 84,262 | ||||||
5,957,987 | ||||||||
Mexico 0.1% | ||||||||
Materials 0.1% | ||||||||
Grupo Mexico S.A.B. de C.V., Series B | 438,600 | 1,405,503 | ||||||
Media 0.0% | ||||||||
Grupo Televisa S.A. ADR | 34,800 | 786,480 | ||||||
2,191,983 |
42 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Netherlands 4.3% | ||||||||
Capital Goods 1.2% | ||||||||
European Aeronautic Defence & Space Co., N.V. | 6,354 | 226,138 | ||||||
Koninklijke Boskalis Westminster N.V. | 283,785 | 10,823,733 | ||||||
Koninklijke Philips Electronics N.V. | 354,435 | 8,877,197 | ||||||
19,927,068 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Brunel International N.V. | 35,221 | 1,698,271 | ||||||
Randstad Holding N.V. | 1,794 | 58,656 | ||||||
1,756,927 | ||||||||
Diversified Financials 0.0% | ||||||||
ING Groep N.V. CVA * | 59,627 | 530,569 | ||||||
Energy 1.2% | ||||||||
Core Laboratories N.V. | 34,100 | 3,534,806 | ||||||
Fugro N.V. CVA | 20,459 | 1,384,533 | ||||||
Royal Dutch Shell plc, B Shares | 210,826 | 7,457,422 | ||||||
SBM Offshore N.V. * | 2,566 | 33,591 | ||||||
Schlumberger Ltd. | 98,825 | 6,871,302 | ||||||
19,281,654 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Koninklijke Ahold N.V. | 316,780 | 4,034,049 | ||||||
Food, Beverage & Tobacco 0.8% | ||||||||
DE Master Blenders 1753 N.V. * | 9,102 | 111,638 | ||||||
Heineken Holding N.V. | 95,159 | 4,834,808 | ||||||
Heineken N.V. | 3,567 | 220,129 | ||||||
Unilever N.V. CVA | 170,368 | 6,261,810 | ||||||
Unilever N.V., NY Shares | 47,850 | 1,755,616 | ||||||
13,184,001 | ||||||||
Insurance 0.0% | ||||||||
Aegon N.V. | 26,811 | 149,944 | ||||||
Delta Lloyd N.V. | 2,520 | 41,909 | ||||||
191,853 | ||||||||
Materials 0.4% | ||||||||
Akzo Nobel N.V. | 91,438 | 4,976,793 | ||||||
James Hardie Industries plc CDI | 110,718 | 1,059,089 | ||||||
Koninklijke DSM N.V. | 2,431 | 125,012 | ||||||
6,160,894 | ||||||||
Media 0.0% | ||||||||
Reed Elsevier N.V. | 10,856 | 145,725 | ||||||
Wolters Kluwer N.V. | 4,864 | 94,105 | ||||||
239,830 | ||||||||
Real Estate 0.0% | ||||||||
Corio N.V. | 1,077 | 47,978 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASML Holding N.V. | 29,620 | 1,628,278 | ||||||
Software & Services 0.1% | ||||||||
InterXion Holding N.V. * | 100,002 | 2,137,043 | ||||||
Telecommunication Services 0.0% | ||||||||
Koninklijke (Royal) KPN N.V. | 15,435 | 97,297 | ||||||
Ziggo NV | 13,890 | 449,908 | ||||||
547,205 | ||||||||
Transportation 0.1% | ||||||||
Koninklijke Vopak N.V. | 20,560 | 1,431,392 | ||||||
TNT Express N.V. | 5,294 | 55,784 | ||||||
1,487,176 | ||||||||
71,154,525 | ||||||||
New Zealand 0.5% | ||||||||
Consumer Services 0.2% | ||||||||
SKYCITY Entertainment Group Ltd. | 984,592 | 3,140,336 | ||||||
Materials 0.0% | ||||||||
Fletcher Building Ltd. | 10,175 | 58,851 | ||||||
Retailing 0.1% | ||||||||
Trade Me Ltd. | 368,872 | 1,300,820 | ||||||
Telecommunication Services 0.0% | ||||||||
Telecom Corp. of New Zealand Ltd. | 28,860 | 57,053 | ||||||
Transportation 0.2% | ||||||||
Auckland International Airport Ltd. | 1,456,859 | 3,213,618 | ||||||
Utilities 0.0% | ||||||||
Contact Energy Ltd. * | 5,211 | 23,729 | ||||||
7,794,407 | ||||||||
Nigeria 0.0% | ||||||||
Banks 0.0% | ||||||||
Guaranty Trust Bank plc GDR - Reg’d | 101,544 | 629,573 | ||||||
Norway 1.7% | ||||||||
Banks 0.0% | ||||||||
DnB A.S.A. | 15,192 | 189,924 | ||||||
�� | ||||||||
Capital Goods 0.0% | ||||||||
Orkla A.S.A. | 11,571 | 91,661 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Tomra Systems A.S.A. | 184,375 | 1,514,687 | ||||||
Energy 1.2% | ||||||||
Aker Solutions A.S.A. | 113,149 | 2,229,760 | ||||||
Det Norske Oljeselskap A.S.A * | 86,190 | 1,327,811 | ||||||
Farstad Shipping A.S.A. | 76,299 | 1,632,967 | ||||||
Fred Olsen Energy A.S.A | 101,054 | 4,732,167 | ||||||
Petroleum Geo-Services A.S.A. | 320,099 | 5,531,154 | ||||||
Seadrill Ltd. | 5,407 | 219,093 | ||||||
Statoil A.S.A. | 227,861 | 5,611,976 | ||||||
21,284,928 | ||||||||
Insurance 0.0% | ||||||||
Gjensidige Forsikring A.S.A. | 2,999 | 43,792 | ||||||
Materials 0.1% | ||||||||
Norsk Hydro A.S.A. | 13,961 | 62,853 | ||||||
Yara International A.S.A. | 2,941 | 138,606 | ||||||
Yara International A.S.A. ADR | 14,200 | 670,098 | ||||||
871,557 |
See financial notes 43
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Media 0.1% | ||||||||
Schibsted A.S.A. | 22,612 | 846,259 | ||||||
Telecommunication Services 0.2% | ||||||||
Telenor A.S.A. | 181,310 | 3,566,027 | ||||||
Transportation 0.0% | ||||||||
Norwegian Air Shuttle A.S.A. * | 22,400 | 484,172 | ||||||
28,893,007 | ||||||||
Panama 0.1% | ||||||||
Transportation 0.1% | ||||||||
Copa Holdings S.A., Class A | 11,196 | 1,039,213 | ||||||
Papua New Guinea 0.0% | ||||||||
Energy 0.0% | ||||||||
Oil Search Ltd. | 103,900 | 800,633 | ||||||
Philippines 0.2% | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Puregold Price Club, Inc. | 439,400 | 319,007 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Universal Robina Corp. | 719,400 | 1,254,578 | ||||||
Real Estate 0.0% | ||||||||
SM Prime Holdings, Inc. | 1,900,000 | 667,772 | ||||||
Transportation 0.1% | ||||||||
International Container Terminal Services, Inc. | 558,500 | 961,440 | ||||||
3,202,797 | ||||||||
Portugal 0.0% | ||||||||
Banks 0.0% | ||||||||
Banco Espirito Santo, S.A. - Reg’d * | 30,126 | 29,320 | ||||||
Energy 0.0% | ||||||||
Galp Energia, SGPS, S.A. | 3,469 | 55,531 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Jeronimo Martins, SGPS, S.A. | 3,303 | 57,823 | ||||||
Telecommunication Services 0.0% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d | 10,082 | 50,716 | ||||||
Utilities 0.0% | ||||||||
EDP - Energias de Portugal S.A. | 28,618 | 77,787 | ||||||
271,177 | ||||||||
Republic of Korea 1.6% | ||||||||
Automobiles & Components 0.3% | ||||||||
Hyundai Motor Co. | 17,240 | 3,543,140 | ||||||
Kolao Holdings | 71,380 | 1,275,944 | ||||||
Nexen Tire Corp. | 17,370 | 270,660 | ||||||
5,089,744 | ||||||||
Capital Goods 0.2% | ||||||||
Daewoo International Corp. | 14,490 | 555,847 | ||||||
Sung Kwang Bend Co., Ltd. | 106,237 | 2,567,984 | ||||||
3,123,831 | ||||||||
Consumer Services 0.1% | ||||||||
Hotel Shilla Co., Ltd. | 58,075 | 2,449,379 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Orion Corp. | 1,103 | 1,035,866 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Osstem Implant Co., Ltd. * | 9,070 | 262,727 | ||||||
Household & Personal Products 0.1% | ||||||||
Cosmax, Inc. | 33,680 | 1,502,164 | ||||||
Insurance 0.1% | ||||||||
Samsung Fire & Marine Insurance Co., Ltd. | 4,840 | 1,056,596 | ||||||
Materials 0.1% | ||||||||
Soulbrain Co., Ltd. | 49,173 | 1,976,668 | ||||||
Media 0.1% | ||||||||
Cheil Worldwide, Inc. | 84,780 | 1,632,944 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Celltrion, Inc. | 42,604 | 1,049,287 | ||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
Samsung Electronics Co., Ltd. | 5,198 | 6,237,794 | ||||||
Transportation 0.1% | ||||||||
Hyundai Glovis Co., Ltd. | 4,585 | 953,485 | ||||||
26,370,485 | ||||||||
Singapore 3.5% | ||||||||
Banks 0.1% | ||||||||
DBS Group Holdings Ltd. | 28,000 | 317,980 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 40,000 | 297,294 | ||||||
United Overseas Bank Ltd. | 20,000 | 298,256 | ||||||
913,530 | ||||||||
Capital Goods 0.2% | ||||||||
Cosco Corp., (Singapore) Ltd. | 15,000 | 10,768 | ||||||
Fraser & Neave Ltd. | 14,000 | 104,890 | ||||||
Keppel Corp., Ltd. | 409,500 | 3,562,841 | ||||||
SembCorp Industries Ltd. | 15,000 | 66,571 | ||||||
SembCorp Marine Ltd. | 13,000 | 49,935 | ||||||
Singapore Technologies Engineering Ltd. | 23,000 | 66,196 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 29,000 | 21,386 | ||||||
3,882,587 | ||||||||
Consumer Services 0.0% | ||||||||
Genting Singapore plc | 96,000 | 104,283 | ||||||
Diversified Financials 0.0% | ||||||||
Singapore Exchange Ltd. | 13,000 | 71,450 | ||||||
Energy 0.4% | ||||||||
Ezion Holdings Ltd. | 2,241,000 | 2,365,394 | ||||||
Ezra Holdings Ltd. * | 4,244,000 | 3,861,216 | ||||||
6,226,610 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Olam International Ltd. | 22,000 | 35,341 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
First Resources Ltd. | 368,000 | 617,080 |
44 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Golden Agri-Resources Ltd. | 100,000 | 51,074 | ||||||
Wilmar International Ltd. | 29,000 | 73,203 | ||||||
741,357 | ||||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. | 26,000 | 85,968 | ||||||
Real Estate 1.2% | ||||||||
Ascendas REIT | 2,967,000 | 5,724,666 | ||||||
Capitaland Ltd. | 41,000 | 109,189 | ||||||
CapitaMall Trust | 5,796,200 | 9,972,938 | ||||||
CapitaMalls Asia Ltd. | 20,000 | 30,180 | ||||||
City Developments Ltd. | 8,000 | 74,696 | ||||||
Global Logistic Properties Ltd. | 1,754,000 | 3,680,052 | ||||||
Keppel Land Ltd. | 11,000 | 30,470 | ||||||
UOL Group Ltd. | 7,000 | 32,389 | ||||||
19,654,580 | ||||||||
Retailing 0.1% | ||||||||
Jardine Cycle & Carriage Ltd. | 2,000 | 80,469 | ||||||
Osim International Ltd. | 750,000 | 996,016 | ||||||
1,076,485 | ||||||||
Telecommunication Services 0.3% | ||||||||
Singapore Telecommunications Ltd. | 123,000 | 323,901 | ||||||
StarHub Ltd. | 1,821,000 | 5,478,678 | ||||||
5,802,579 | ||||||||
Transportation 1.0% | ||||||||
ComfortDelGro Corp., Ltd. | 28,000 | 38,720 | ||||||
Hutchison Port Holdings Trust, Class U | 78,000 | 60,560 | ||||||
Neptune Orient Lines Ltd. * | 14,000 | 13,250 | ||||||
SATS Ltd. | 2,741,000 | 6,249,530 | ||||||
SIA Engineering Co., Ltd. | 2,182,000 | 7,506,738 | ||||||
Singapore Airlines Ltd. | 8,331 | 72,116 | ||||||
SMRT Corp., Ltd. | 1,379,553 | 1,960,079 | ||||||
15,900,993 | ||||||||
Utilities 0.2% | ||||||||
Hyflux Ltd. | 2,671,000 | 2,944,529 | ||||||
57,440,292 | ||||||||
South Africa 0.6% | ||||||||
Capital Goods 0.1% | ||||||||
Bidvest Group Ltd. | 67,148 | 1,602,749 | ||||||
Diversified Financials 0.1% | ||||||||
FirstRand Ltd. | 554,269 | 1,842,169 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Tiger Brands Ltd. | 29,914 | 951,121 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Life Healthcare Group Holdings Pte Ltd. | 184,719 | 698,639 | ||||||
Insurance 0.0% | ||||||||
Discovery Holdings Ltd. | 80,141 | 512,741 | ||||||
Media 0.1% | ||||||||
Naspers Ltd., Class N | 29,705 | 1,928,914 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Aspen Pharmacare Holdings Ltd. * | 89,985 | 1,642,200 | ||||||
Retailing 0.0% | ||||||||
Mr. Price Group Ltd. | 19,397 | 299,658 | ||||||
9,478,191 | ||||||||
Spain 1.5% | ||||||||
Banks 0.8% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 85,771 | 716,694 | ||||||
Banco de Sabadell S.A. * | 43,301 | 105,587 | ||||||
Banco Popular Espanol S.A. * | 23,027 | 36,009 | ||||||
Banco Santander S.A. | 1,509,870 | 11,368,120 | ||||||
Bankia S.A. * | 18,673 | 28,185 | ||||||
CaixaBank | 11,809 | 44,849 | ||||||
12,299,444 | ||||||||
Capital Goods 0.0% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 2,274 | 48,597 | ||||||
Ferrovial S.A. | 6,567 | 92,925 | ||||||
Zardoya Otis S.A. | 2,201 | 27,224 | ||||||
168,746 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Prosegur Cia de Seguridad S.A. - Reg’d | 621,880 | 3,392,906 | ||||||
Diversified Financials 0.0% | ||||||||
Bolsas y Mercados Espanoles | 17,145 | 370,459 | ||||||
Energy 0.0% | ||||||||
Repsol S.A. | 12,993 | 260,390 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 10,559 | 63,968 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Viscofan S.A. | 21,134 | 1,023,980 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 11,544 | 32,023 | ||||||
Materials 0.0% | ||||||||
Acerinox S.A. | 1,495 | 15,605 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Grifols S.A. * | 34,009 | 1,181,159 | ||||||
Retailing 0.2% | ||||||||
Inditex S.A. | 31,449 | 4,015,788 | ||||||
Software & Services 0.0% | ||||||||
Amadeus IT Holding S.A., A Shares | 4,972 | 123,168 | ||||||
Telecommunication Services 0.1% | ||||||||
Telefonica S.A. | 62,549 | 825,571 | ||||||
Transportation 0.0% | ||||||||
Abertis Infraestructuras S.A. | 5,664 | 85,548 | ||||||
International Consolidated Airlines Group S.A. * | 13,910 | 36,617 | ||||||
122,165 | ||||||||
Utilities 0.0% | ||||||||
Acciona S.A. | 381 | 23,418 | ||||||
Enagas S.A. | 2,685 | 53,412 | ||||||
Gas Natural SDG S.A. | 5,204 | 80,853 | ||||||
Iberdrola S.A. | 62,546 | 323,923 |
See financial notes 45
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Red Electrica Corp. S.A. | 1,623 | 76,151 | ||||||
557,757 | ||||||||
24,453,129 | ||||||||
Sweden 1.7% | ||||||||
Banks 0.1% | ||||||||
Nordea Bank AB | 40,968 | 372,385 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 21,986 | 182,435 | ||||||
Svenska Handelsbanken AB, A Shares | 7,591 | 260,502 | ||||||
Swedbank AB, A Shares | 12,741 | 236,657 | ||||||
1,051,979 | ||||||||
Capital Goods 0.6% | ||||||||
Alfa Laval AB | 5,063 | 88,082 | ||||||
Assa Abloy AB, B Shares | 133,458 | 4,446,247 | ||||||
Atlas Copco AB, A Shares | 144,807 | 3,560,981 | ||||||
Atlas Copco AB, B Shares | 63,950 | 1,402,309 | ||||||
Sandvik AB | 15,586 | 216,575 | ||||||
Scania AB, B Shares | 4,798 | 91,549 | ||||||
Skanska AB, B Shares | 5,997 | 93,943 | ||||||
SKF AB, B Shares | 6,116 | 138,024 | ||||||
Volvo AB, B Shares | 21,880 | 295,254 | ||||||
10,332,964 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
AF AB, B Shares | 151,926 | 3,374,661 | ||||||
Securitas AB, B Shares | 4,695 | 34,192 | ||||||
3,408,853 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, B Shares | 48,993 | 1,255,966 | ||||||
Husqvarna AB, B Shares | 6,685 | 38,831 | ||||||
JM AB | 21,240 | 382,597 | ||||||
1,677,394 | ||||||||
Diversified Financials 0.0% | ||||||||
Industrivarden AB, C Shares | 1,765 | 24,929 | ||||||
Investment AB Kinnevik, B Shares | 3,084 | 59,016 | ||||||
Investor AB, B Shares | 7,103 | 156,793 | ||||||
Ratos AB, B Shares | 2,873 | 24,668 | ||||||
265,406 | ||||||||
Energy 0.1% | ||||||||
Lundin Petroleum AB * | 53,857 | 1,292,244 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
AarhusKarlshamn AB | 45,514 | 1,792,886 | ||||||
Swedish Match AB | 19,448 | 663,075 | ||||||
2,455,961 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Elekta AB, B Shares | 69,167 | 984,610 | ||||||
Getinge AB, B Shares | 99,014 | 3,046,873 | ||||||
4,031,483 | ||||||||
Household & Personal Products 0.0% | ||||||||
Svenska Cellulosa AB, B Shares | 9,015 | 175,758 | ||||||
Materials 0.1% | ||||||||
Boliden AB | 4,101 | 71,865 | ||||||
Hexpol AB | 15,487 | 692,505 | ||||||
Holmen AB, B Shares | 792 | 23,340 | ||||||
SSAB AB, A Shares | 2,347 | 16,813 | ||||||
804,523 | ||||||||
Media 0.0% | ||||||||
Modern Times Group AB, B Shares | 731 | 22,299 | ||||||
Retailing 0.0% | ||||||||
Hennes & Mauritz AB, B Shares | 14,664 | 497,205 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Axis Communications AB | 3,958 | 92,515 | ||||||
Hexagon AB, B Shares | 59,947 | 1,384,852 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 46,837 | 414,932 | ||||||
1,892,299 | ||||||||
Telecommunication Services 0.0% | ||||||||
Tele2 AB, B Shares | 4,754 | 79,358 | ||||||
TeliaSonera AB | 33,575 | 220,729 | ||||||
300,087 | ||||||||
28,208,455 | ||||||||
Switzerland 7.5% | ||||||||
Banks 0.0% | ||||||||
Banque Cantonale Vaudoise - Reg’d | 44 | 23,316 | ||||||
Capital Goods 0.3% | ||||||||
ABB Ltd. - Reg’d * | 34,336 | 620,105 | ||||||
Burckhardt Compression Holding AG | 85 | 24,363 | ||||||
Geberit AG - Reg’d * | 14,517 | 2,998,414 | ||||||
Kaba Holding AG - Reg’d, Series B * | 3,523 | 1,332,156 | ||||||
Schindler Holding AG | 729 | 96,211 | ||||||
Schindler Holding AG - Reg’d | 323 | 41,793 | ||||||
Sulzer AG - Reg’d | 360 | 52,202 | ||||||
5,165,244 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Adecco S.A. - Reg’d * | 182,287 | 8,839,535 | ||||||
DKSH Holding Ltd. * | 14,790 | 941,745 | ||||||
SGS S.A. - Reg’d | 996 | 2,111,440 | ||||||
11,892,720 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 110,114 | 7,146,177 | ||||||
The Swatch Group AG - Bearer Shares | 479 | 198,271 | ||||||
The Swatch Group AG - Reg’d | 651 | 47,351 | ||||||
7,391,799 | ||||||||
Diversified Financials 1.2% | ||||||||
Credit Suisse Group AG - Reg’d * | 659,906 | 15,346,344 | ||||||
GAM Holding AG * | 72,979 | 1,020,640 | ||||||
Julius Baer Group Ltd. * | 3,257 | 113,024 | ||||||
Pargesa Holding S.A. | 405 | 27,270 | ||||||
Partners Group Holding AG | 7,736 | 1,637,616 |
46 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
UBS AG - Reg’d * | 56,818 | 852,474 | ||||||
18,997,368 | ||||||||
Energy 0.9% | ||||||||
Noble Corp. | 204,650 | 7,723,491 | ||||||
Transocean Ltd. | 60,321 | 2,756,066 | ||||||
Transocean Ltd. * | 5,512 | 252,140 | ||||||
Weatherford International Ltd. * | 334,675 | 3,781,828 | ||||||
14,513,525 | ||||||||
Food, Beverage & Tobacco 1.3% | ||||||||
Aryzta AG * | 1,308 | 65,345 | ||||||
Barry Callebaut AG - Reg’d | 27 | 25,787 | ||||||
Lindt & Spruengli AG * | 15 | 47,401 | ||||||
Lindt & Spruengli AG - Reg’d * | 2 | 72,803 | ||||||
Nestle S.A. - Reg’d | 203,899 | 12,945,175 | ||||||
Nestle S.A. - Reg’d ADR | 140,112 | 8,874,694 | ||||||
22,031,205 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Sonova Holding AG - Reg’d * | 737 | 74,213 | ||||||
Straumann Holding AG - Reg’d | 118 | 14,541 | ||||||
88,754 | ||||||||
Insurance 0.1% | ||||||||
Baloise Holding AG - Reg’d | 712 | 59,428 | ||||||
Swiss Life Holding AG - Reg’d * | 457 | 57,713 | ||||||
Swiss Re AG * | 5,522 | 382,108 | ||||||
Zurich Insurance Group AG * | 2,303 | 567,735 | ||||||
1,066,984 | ||||||||
Materials 1.3% | ||||||||
Clariant AG - Reg’d * | 82,334 | 882,289 | ||||||
Givaudan S.A. - Reg’d * | 5,361 | 5,362,540 | ||||||
Glencore International plc | 884,063 | 4,905,883 | ||||||
Holcim Ltd. - Reg’d * | 105,636 | 7,209,256 | ||||||
Sika AG | 35 | 72,934 | ||||||
Syngenta AG - Reg’d | 8,084 | 3,151,867 | ||||||
21,584,769 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Actelion Ltd. - Reg’d * | 1,659 | 80,076 | ||||||
Lonza Group AG - Reg’d * | 754 | 38,242 | ||||||
Novartis AG - Reg’d | 102,376 | 6,173,328 | ||||||
Novartis AG ADR | 45,375 | 2,743,372 | ||||||
Roche Holding AG | 15,329 | 2,952,750 | ||||||
11,987,768 | ||||||||
Real Estate 0.0% | ||||||||
Swiss Prime Site AG - Reg’d * | 723 | 60,360 | ||||||
Telecommunication Services 0.0% | ||||||||
Swisscom AG - Reg’d | 365 | 151,935 | ||||||
Transportation 0.5% | ||||||||
Kuehne & Nagel International AG - Reg’d | 71,510 | 8,365,466 | ||||||
123,321,213 | ||||||||
Taiwan 0.6% | ||||||||
Banks 0.0% | ||||||||
First Financial Holding Co., Ltd. | 550,000 | 312,036 | ||||||
Capital Goods 0.1% | ||||||||
CTCI Corp. | 936,000 | 1,859,958 | ||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
Chipbond Technology Corp. | 1,643,000 | 2,780,999 | ||||||
Novatek Microelectronics Corp. | 179,000 | 673,206 | ||||||
Radiant Opto-Electronics Corp. | 394,540 | 1,638,680 | ||||||
5,092,885 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Asustek Computer, Inc. | 102,000 | 1,091,240 | ||||||
Chicony Electronics Co., Ltd. | 808,000 | 1,771,270 | ||||||
2,862,510 | ||||||||
10,127,389 | ||||||||
Thailand 0.4% | ||||||||
Banks 0.1% | ||||||||
Kasikornbank PCL | 295,100 | 1,725,668 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Thai Union Frozen Products PCL | 161,680 | 379,803 | ||||||
Media 0.0% | ||||||||
BEC World PCL | 291,800 | 561,703 | ||||||
Real Estate 0.1% | ||||||||
Asian Property Development PCL | 4,090,700 | 1,161,145 | ||||||
Retailing 0.1% | ||||||||
Home Product Center PCL | 3,117,600 | 1,159,564 | ||||||
Telecommunication Services 0.1% | ||||||||
Advanced Info Service PCL - Reg’d | 240,400 | 1,549,070 | ||||||
6,536,953 | ||||||||
Turkey 0.1% | ||||||||
Banks 0.0% | ||||||||
Turkiye Halk Bankasi A/S | 131,857 | 1,163,312 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Bizim Toptan Satis Magazalari A/S | 85,827 | 1,175,320 | ||||||
2,338,632 | ||||||||
United Kingdom 20.1% | ||||||||
Automobiles & Components 0.0% | ||||||||
GKN plc | 23,289 | 78,330 | ||||||
Banks 0.9% | ||||||||
Barclays plc | 181,256 | 670,236 | ||||||
HSBC Holdings plc | 283,350 | 2,793,628 | ||||||
Lloyds Banking Group plc * | 16,468,366 | 10,844,446 | ||||||
Royal Bank of Scotland Group plc * | 31,734 | 141,695 | ||||||
Standard Chartered plc | 37,481 | 887,420 | ||||||
15,337,425 | ||||||||
Capital Goods 3.9% | ||||||||
Ashtead Group plc | 1,624,572 | 9,814,491 | ||||||
BAE Systems plc | 49,915 | 251,933 | ||||||
Balfour Beatty plc | 10,304 | 52,523 | ||||||
Bodycote plc | 676,912 | 4,133,025 | ||||||
Bunzl plc | 72,024 | 1,193,033 | ||||||
Cobham plc | 857,630 | 2,981,627 |
See financial notes 47
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Fenner plc | 523,721 | 3,059,782 | ||||||
IMI plc | 4,746 | 73,277 | ||||||
Interserve plc | 548,522 | 3,455,610 | ||||||
Invensys plc | 12,175 | 44,892 | ||||||
Meggitt plc | 190,603 | 1,188,801 | ||||||
Melrose plc | 18,513 | 72,114 | ||||||
Rolls-Royce Holdings plc * | 262,665 | 3,629,868 | ||||||
Rotork plc | 404,191 | 14,890,955 | ||||||
Smiths Group plc | 211,185 | 3,608,463 | ||||||
Spirax-Sarco Engineering plc | 151,649 | 4,747,900 | ||||||
The Weir Group plc | 3,386 | 95,423 | ||||||
Ultra Electronics Holdings plc | 217,762 | 5,958,880 | ||||||
Wolseley plc | 129,678 | 5,684,738 | ||||||
64,937,335 | ||||||||
Commercial & Professional Supplies 1.1% | ||||||||
Aggreko plc | 46,551 | 1,619,042 | ||||||
Babcock International Group plc | 249,586 | 3,945,306 | ||||||
Capita plc | 10,322 | 120,604 | ||||||
De La Rue plc | 434,063 | 7,423,631 | ||||||
G4S plc | 21,153 | 89,024 | ||||||
Intertek Group plc | 17,043 | 776,857 | ||||||
RPS Group plc | 98,469 | 371,867 | ||||||
Serco Group plc | 451,945 | 4,136,948 | ||||||
18,483,279 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Bellway plc | 304,844 | 4,983,065 | ||||||
Berkeley Group Holdings plc * | 82,293 | 2,025,070 | ||||||
Burberry Group plc | 6,834 | 128,944 | ||||||
Taylor Wimpey plc | 685,061 | 677,089 | ||||||
7,814,168 | ||||||||
Consumer Services 0.6% | ||||||||
Carnival plc | 2,747 | 109,420 | ||||||
Compass Group plc | 29,081 | 319,542 | ||||||
Greene King plc | 359,078 | 3,445,139 | ||||||
InterContinental Hotels Group plc | 121,683 | 3,010,652 | ||||||
Millennium & Copthorne Hotels plc | 178,151 | 1,445,631 | ||||||
TUI Travel plc | 7,543 | 30,604 | ||||||
Whitbread plc | 17,724 | 673,566 | ||||||
9,034,554 | ||||||||
Diversified Financials 1.1% | ||||||||
3i Group plc | 14,557 | 50,744 | ||||||
Aberdeen Asset Management plc | 878,975 | 4,610,109 | ||||||
Ashmore Group plc | 253,023 | 1,489,631 | ||||||
Hargreaves Lansdown plc | 20,195 | 241,011 | ||||||
ICAP plc | 8,336 | 43,856 | ||||||
IG Group Holdings plc | 120,097 | 845,676 | ||||||
Investec plc | 8,046 | 47,448 | ||||||
Jupiter Fund Management plc | 143,817 | 608,480 | ||||||
London Stock Exchange Group plc | 2,950 | 46,547 | ||||||
Man Group plc | 28,276 | 35,932 | ||||||
Schroders plc | 388,995 | 9,598,505 | ||||||
Schroders plc, Non Voting Shares | 1,100 | 21,965 | ||||||
17,639,904 | ||||||||
Energy 1.0% | ||||||||
AMEC plc | 133,341 | 2,287,831 | ||||||
BG Group plc | 52,903 | 982,244 | ||||||
BP plc | 296,987 | 2,120,961 | ||||||
Enquest plc * | 689,767 | 1,293,043 | ||||||
John Wood Group plc | 370,227 | 5,088,644 | ||||||
Ophir Energy plc * | 18,256 | 163,448 | ||||||
Petrofac Ltd. | 3,889 | 100,966 | ||||||
Royal Dutch Shell plc, A Shares | 57,694 | 1,979,637 | ||||||
Tullow Oil plc | 120,584 | 2,739,518 | ||||||
16,756,292 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
J. Sainsbury plc | 18,294 | 104,891 | ||||||
Tesco plc | 1,030,580 | 5,332,663 | ||||||
WM Morrison Supermarkets plc | 36,511 | 158,083 | ||||||
5,595,637 | ||||||||
Food, Beverage & Tobacco 1.7% | ||||||||
Associated British Foods plc | 5,619 | 125,745 | ||||||
British American Tobacco plc | 30,557 | 1,515,614 | ||||||
British American Tobacco plc ADR | 60,200 | 5,981,472 | ||||||
Diageo plc | 396,228 | 11,327,563 | ||||||
Diageo plc ADR | 63,625 | 7,268,520 | ||||||
Imperial Tobacco Group plc | 15,625 | 590,928 | ||||||
SABMiller plc | 14,906 | 639,736 | ||||||
Tate & Lyle plc | 7,497 | 87,872 | ||||||
Unilever plc | 20,023 | 746,921 | ||||||
28,284,371 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Smith & Nephew plc | 13,959 | 147,619 | ||||||
Household & Personal Products 0.0% | ||||||||
Reckitt Benckiser Group plc | 10,300 | 624,017 | ||||||
Insurance 1.0% | ||||||||
Admiral Group plc | 3,040 | 54,475 | ||||||
Amlin plc | 178,071 | 1,073,452 | ||||||
Aviva plc | 44,994 | 240,961 | ||||||
Hiscox Ltd. | 87,728 | 680,816 | ||||||
Lancashire Holdings Ltd. | 277,139 | 3,864,683 | ||||||
Legal & General Group plc | 91,272 | 197,852 | ||||||
Old Mutual plc | 75,509 | 210,176 | ||||||
Prudential plc | 247,659 | 3,401,247 | ||||||
Resolution Ltd. | 21,377 | 75,367 | ||||||
RSA Insurance Group plc | 58,282 | 105,790 | ||||||
St. James’s Place plc | 85,237 | 547,312 | ||||||
Standard Life plc | 36,765 | 173,598 | ||||||
Willis Group Holdings plc | 189,500 | 6,380,465 | ||||||
17,006,194 | ||||||||
Materials 3.2% | ||||||||
Anglo American plc | 21,535 | 663,584 | ||||||
Antofagasta plc | 6,425 | 130,711 | ||||||
AZ Electronic Materials S.A. | 1,259,505 | 7,224,667 | ||||||
BHP Billiton plc | 32,910 | 1,054,805 | ||||||
Croda International plc | 452,577 | 16,113,650 | ||||||
Elementis plc | 501,910 | 1,698,808 | ||||||
Eurasian Natural Resources Corp. | 3,862 | 20,473 | ||||||
Evraz plc | 4,952 | 18,895 |
48 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Filtrona plc | 153,802 | 1,424,857 | ||||||
Fresnillo plc | 2,689 | 83,481 | ||||||
Johnson Matthey plc | 81,484 | 2,965,074 | ||||||
Kazakhmys plc | 3,210 | 36,829 | ||||||
Lonmin plc | 2,431 | 20,172 | ||||||
Randgold Resources Ltd. | 1,346 | 160,897 | ||||||
Rexam plc | 874,712 | 6,315,937 | ||||||
Rio Tinto plc | 20,982 | 1,048,185 | ||||||
Rio Tinto plc ADR | 126,300 | 6,312,474 | ||||||
Vedanta Resources plc | 1,793 | 32,945 | ||||||
Victrex plc | 295,482 | 6,810,945 | ||||||
Xstrata plc | 33,067 | 523,826 | ||||||
52,661,215 | ||||||||
Media 0.7% | ||||||||
British Sky Broadcasting Group plc | 17,235 | 197,252 | ||||||
ITV plc | 1,830,449 | 2,562,649 | ||||||
Pearson plc | 12,645 | 254,252 | ||||||
Reed Elsevier plc | 223,161 | 2,185,933 | ||||||
Rightmove plc | 73,766 | 1,920,403 | ||||||
UBM plc | 352,082 | 3,980,245 | ||||||
11,100,734 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Abcam plc | 96,745 | 602,131 | ||||||
AstraZeneca plc | 19,597 | 908,806 | ||||||
GlaxoSmithKline plc | 130,935 | 2,933,917 | ||||||
4,444,854 | ||||||||
Real Estate 0.3% | ||||||||
British Land Co., plc | 13,671 | 116,773 | ||||||
Capital Shopping Centres Group plc | 8,375 | 45,081 | ||||||
Derwent London plc | 32,479 | 1,080,807 | ||||||
Great Portland Estates plc | 330,912 | 2,498,831 | ||||||
Hammerson plc | 10,685 | 81,480 | ||||||
Land Securities Group plc | 12,150 | 157,892 | ||||||
Segro plc | 11,121 | 42,641 | ||||||
4,023,505 | ||||||||
Retailing 0.6% | ||||||||
ASOS plc * | 43,171 | 1,575,125 | ||||||
Debenhams plc | 48,872 | 94,617 | ||||||
Dunelm Group plc | 96,847 | 1,049,367 | ||||||
Howden Joinery Group plc | 616,224 | 1,694,160 | ||||||
Kingfisher plc | 36,805 | 172,321 | ||||||
Marks & Spencer Group plc | 24,746 | 157,498 | ||||||
Next plc | 2,596 | 149,650 | ||||||
Ocado Group plc * | 348,147 | 364,180 | ||||||
Signet Jewelers Ltd. | 98,100 | 5,077,656 | ||||||
10,334,574 | ||||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
ARM Holdings plc | 311,695 | 3,358,681 | ||||||
Imagination Technologies Group plc * | 220,422 | 1,628,441 | ||||||
4,987,122 | ||||||||
Software & Services 0.4% | ||||||||
Anite plc | 277,630 | 633,839 | ||||||
Aveva Group plc | 4,215 | 135,634 | ||||||
Moneysupermarket.com Group plc | 289,927 | 627,895 | ||||||
Telecity Group plc | 381,949 | 5,563,726 | ||||||
The Sage Group plc | 19,846 | 99,677 | ||||||
7,060,771 | ||||||||
Technology Hardware & Equipment 1.7% | ||||||||
Diploma plc | 525,288 | 3,794,230 | ||||||
Domino Printing Sciences plc | 534,479 | 4,685,868 | ||||||
Halma plc | 607,808 | 4,051,075 | ||||||
Laird plc | 1,271,820 | 4,320,982 | ||||||
Oxford Instruments | 17,006 | 369,030 | ||||||
Spectris plc | 332,796 | 9,321,322 | ||||||
TT Electronics plc | 830,179 | 1,677,727 | ||||||
28,220,234 | ||||||||
Telecommunication Services 0.2% | ||||||||
BT Group plc | 120,927 | 415,576 | ||||||
Inmarsat plc | 98,321 | 900,749 | ||||||
Vodafone Group plc | 770,213 | 2,091,615 | ||||||
3,407,940 | ||||||||
Utilities 0.3% | ||||||||
Centrica plc | 80,473 | 421,302 | ||||||
National Grid plc | 55,684 | 635,051 | ||||||
Severn Trent plc | 3,562 | 92,381 | ||||||
SSE plc | 166,805 | 3,901,438 | ||||||
United Utilities Group plc | 10,763 | 117,675 | ||||||
5,167,847 | ||||||||
333,147,921 | ||||||||
United States 0.2% | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Bunge Ltd. | 14,600 | 1,037,038 | ||||||
Insurance 0.1% | ||||||||
PartnerRe Ltd. | 20,725 | 1,678,725 | ||||||
2,715,763 | ||||||||
Total Common Stock | ||||||||
(Cost $1,334,136,678) | 1,596,251,875 | |||||||
Preferred Stock 0.1% of net assets | ||||||||
Germany 0.1% | ||||||||
Bayerische Motoren Werke AG | 783 | 43,377 | ||||||
Henkel AG & Co. KGaA | 2,771 | 221,563 | ||||||
Porsche Automobil Holding SE | 2,393 | 159,503 | ||||||
ProSiebenSat.1 Media AG | 1,514 | 42,215 | ||||||
RWE AG | 585 | 24,242 | ||||||
Volkswagen AG | 2,252 | 467,573 | ||||||
958,473 | ||||||||
United Kingdom 0.0% | ||||||||
Rolls-Royce Holdings plc, C Shares (a)* | 19,962,540 | 32,214 | ||||||
Total Preferred Stock | ||||||||
(Cost $846,024) | 990,687 | |||||||
See financial notes 49
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 2.6% of net assets | ||||||||
Equity Funds 0.3% | ||||||||
iShares Asia Trust - iShares FTSE A50 China Index ETF | 970,760 | 1,222,523 | ||||||
Market Vectors Junior Gold Miners ETF | 148,796 | 3,591,936 | ||||||
4,814,459 | ||||||||
Money Market Fund 2.3% | ||||||||
State Street Institutional U.S. Government Money Market Fund | 38,105,383 | 38,105,383 | ||||||
Total Other Investment Companies | ||||||||
(Cost $42,714,640) | 42,919,842 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Corporate Bonds 0.2% of net assets | ||||||||
Brazil 0.0% | ||||||||
Lupatech S.A. (a) | ||||||||
6.50%, 04/15/18 | 226,000 | 28,510 | ||||||
Guernsey 0.2% | ||||||||
CSG Guernsey V Ltd. | ||||||||
4.00%, 03/29/13 | 2,053,000 | 2,945,139 | ||||||
Total Corporate Bonds | ||||||||
(Cost $2,217,930) | 2,973,649 | |||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Rights 0.0% of net assets | ||||||||
Spain 0.0% | ||||||||
Banco Santander S.A. * | 1,509,870 | 297,467 | ||||||
Total Rights | ||||||||
(Cost $295,591) | 297,467 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.11%, 12/20/12 (b)(c) | 1,088,000 | 1,087,845 | ||||||
0.10%, 12/20/12 (b)(c) | 155,000 | 154,979 | ||||||
Total Short-Term Investments | ||||||||
(Cost $1,242,824) | 1,242,824 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $1,426,864,617 and the unrealized appreciation and depreciation were $270,011,741 and ($52,200,014), respectively, with a net unrealized appreciation of $217,811,727.
At 10/31/12, the values of certain foreign securities held by the fund aggregating $1,332,720,767 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. |
ADR — | American Depositary Receipt | |
CVA — | Dutch Certificate | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
AUD — | Australian dollar | |
CHF — | Swiss franc | |
EUR — | euro currency | |
GBP — | Great British pound | |
JPY — | Japanese yen | |
NZD — | New Zealand dollar | |
SEK — | Swedish krona | |
USD — | U.S. dollar |
In addition to the above the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/21/12 | 16 | 1,214,720 | (11,121 | ) | ||||||||
Russell 2000 Index, mini, Long, expires 12/21/12 | 115 | 9,387,450 | (341,256 | ) | ||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 126 | 8,862,840 | (241,041 | ) | ||||||||
Net unrealized losses | (593,418 | ) | ||||||||||
50 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Amount of | Amount of | Unrealized | ||||||||||||||||||||
Currency | Currency | Currency | Currency | Gains / | ||||||||||||||||||
Expiration | to be | to be | to be | to be | (Losses) | |||||||||||||||||
Date | Counterparty | Received | Received | Delivered | Delivered | ($) | ||||||||||||||||
Forward Foreign Currency Exchange Contracts | ||||||||||||||||||||||
12/19/2012 | State Street Bank & Trust Co. | CHF | 4,000,000 | USD | 4,298,271 | 192,759 | ||||||||||||||||
12/17/2012 | Morgan Stanley & Co., Inc. | EUR | 5,859,000 | USD | 7,597,502 | (4,955 | ) | |||||||||||||||
12/18/2012 | Bank of New York Mellon | GBP | 8,619,000 | USD | 13,906,878 | 55,283 | ||||||||||||||||
01/31/2013 | State Street Bank London | USD | 8,329,398 | AUD | 8,081,000 | (21,968 | ) | |||||||||||||||
03/20/2013 | State Street Bank & Trust Co. | USD | 8,821,533 | AUD | 8,590,000 | (355,658 | ) | |||||||||||||||
12/19/2012 | State Street Bank & Trust Co. | USD | 26,004,539 | CHF | 24,200,000 | 585,654 | ||||||||||||||||
12/17/2012 | Morgan Stanley & Co., Inc. | USD | 7,597,502 | EUR | 5,859,000 | 48,979 | ||||||||||||||||
12/18/2012 | Bank of New York Mellon | USD | 13,906,878 | GBP | 8,619,000 | (11,568 | ) | |||||||||||||||
12/14/2012 | State Street Bank & Trust Co. | USD | 6,933,206 | JPY | 553,258,000 | 105,163 | ||||||||||||||||
12/14/2012 | State Street Bank & Trust Co. | USD | 5,975,240 | JPY | 476,814,000 | 41,796 | ||||||||||||||||
06/19/2013 | State Street Bank & Trust Co. | USD | 30,328,182 | JPY | 2,415,000,000 | 750,500 | ||||||||||||||||
01/31/2013 | State Street Bank London | USD | 3,952,886 | NZD | 4,834,500 | (6,822 | ) | |||||||||||||||
09/18/2013 | State Street Bank & Trust Co. | USD | 2,034,778 | SEK | 13,600,000 | 11,134 | ||||||||||||||||
Net unrealized gains on Forward Foreign Currency Exchange Contracts | 1,390,297 | |||||||||||||||||||||
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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 Stock1 | $— | $221,526,498 | $— | $221,526,498 | ||||||||||||
Australia1 | — | 46,695,177 | — | 46,695,177 | ||||||||||||
Materials | 7,783,169 | 19,083,135 | — | 26,866,304 | ||||||||||||
Belgium1 | — | 3,407,786 | — | 3,407,786 | ||||||||||||
Telecommunication Services | 11,904 | 105,079 | — | 116,983 | ||||||||||||
Bermuda1 | 2,460,815 | — | — | 2,460,815 | ||||||||||||
Brazil1 | 24,812,911 | — | — | 24,812,911 | ||||||||||||
Canada1 | 87,922,213 | — | — | 87,922,213 | ||||||||||||
Chile1 | 4,847,274 | — | — | 4,847,274 | ||||||||||||
China1 | — | 10,606,002 | — | 10,606,002 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 315,699 | 1,152,441 | — | 1,468,140 | ||||||||||||
Semiconductors & Semiconductor Equipment | 542,505 | — | — | 542,505 | ||||||||||||
Technology Hardware & Equipment | 391,959 | — | — | 391,959 | ||||||||||||
Colombia1 | 2,572,665 | — | — | 2,572,665 | ||||||||||||
Cyprus1 | 748,788 | — | — | 748,788 | ||||||||||||
Denmark1 | — | 18,096,018 | — | 18,096,018 | ||||||||||||
Software & Services | 562,851 | — | — | 562,851 | ||||||||||||
France1 | — | 108,792,862 | — | 108,792,862 | ||||||||||||
Food, Beverage & Tobacco | 34,227 | 3,899,085 | — | 3,933,312 | ||||||||||||
Health Care Equipment & Services | 2,990,125 | 280,800 | — | 3,270,925 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 2,077,670 | 11,372,703 | — | 13,450,373 |
See financial notes 51
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Germany1 | $— | $70,033,602 | $— | $70,033,602 | ||||||||||||
Capital Goods | 4,328,547 | 19,139,194 | — | 23,467,741 | ||||||||||||
Materials | 4,968,992 | 18,150,920 | — | 23,119,912 | ||||||||||||
Media | 2,945,805 | 129,924 | — | 3,075,729 | ||||||||||||
Real Estate | 1,828,833 | 1,798,069 | — | 3,626,902 | ||||||||||||
Greece1 | — | 21,399 | — | 21,399 | ||||||||||||
Food, Beverage & Tobacco | 71,025 | — | — | 71,025 | ||||||||||||
Hong Kong1 | — | 36,679,194 | — | 36,679,194 | ||||||||||||
Consumer Services | 272,643 | 403,905 | — | 676,548 | ||||||||||||
Technology Hardware & Equipment | — | 5,289,188 | 30,640 | 5,319,828 | ||||||||||||
India1 | — | 9,150,900 | — | 9,150,900 | ||||||||||||
Health Care Equipment & Services | 1,253,429 | — | — | 1,253,429 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 482,689 | 3,382,824 | — | 3,865,513 | ||||||||||||
Ireland1 | — | 10,577,233 | — | 10,577,233 | ||||||||||||
Capital Goods | 8,948,658 | — | — | 8,948,658 | ||||||||||||
Food, Beverage & Tobacco | 4,434,358 | — | — | 4,434,358 | ||||||||||||
Israel1 | — | 925,212 | — | 925,212 | ||||||||||||
Semiconductors & Semiconductor Equipment | 3,080,416 | 46,186 | — | 3,126,602 | ||||||||||||
Japan1 | — | 210,615,565 | — | 210,615,565 | ||||||||||||
Materials | 6,627 | 6,939,728 | — | 6,946,355 | ||||||||||||
Media | 47,570 | 119,128 | — | 166,698 | ||||||||||||
Transportation | 42,841 | 1,676,764 | — | 1,719,605 | ||||||||||||
Luxembourg1 | — | 433,482 | — | 433,482 | ||||||||||||
Energy | 4,753,287 | 771,218 | — | 5,524,505 | ||||||||||||
Mexico1 | 2,191,983 | — | — | 2,191,983 | ||||||||||||
Netherlands1 | — | 36,004,622 | — | 36,004,622 | ||||||||||||
Energy | 10,406,108 | 8,875,546 | — | 19,281,654 | ||||||||||||
Food, Beverage & Tobacco | 1,755,616 | 11,428,385 | — | 13,184,001 | ||||||||||||
Software & Services | 2,137,043 | — | — | 2,137,043 | ||||||||||||
Telecommunication Services | 449,908 | 97,297 | — | 547,205 | ||||||||||||
Nigeria1 | 629,573 | — | — | 629,573 | ||||||||||||
Norway1 | — | 28,021,450 | — | 28,021,450 | ||||||||||||
Materials | 670,098 | 201,459 | — | 871,557 | ||||||||||||
Panama1 | 1,039,213 | — | — | 1,039,213 | ||||||||||||
Portugal1 | — | 220,461 | — | 220,461 | ||||||||||||
Telecommunication Services | 50,716 | — | — | 50,716 | ||||||||||||
South Africa1 | — | 9,178,533 | — | 9,178,533 | ||||||||||||
Retailing | 299,658 | — | — | 299,658 |
52 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Switzerland1 | $— | $57,647,075 | $— | $57,647,075 | ||||||||||||
Banks | 23,316 | — | — | 23,316 | ||||||||||||
Capital Goods | 41,793 | 5,123,451 | — | 5,165,244 | ||||||||||||
Commercial & Professional Supplies | 941,745 | 10,950,975 | — | 11,892,720 | ||||||||||||
Energy | 14,261,385 | 252,140 | — | 14,513,525 | ||||||||||||
Food, Beverage & Tobacco | 8,874,694 | 13,156,511 | — | 22,031,205 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 2,743,372 | 9,244,396 | — | 11,987,768 | ||||||||||||
Real Estate | 60,360 | — | — | 60,360 | ||||||||||||
Thailand1 | — | 1,725,668 | — | 1,725,668 | ||||||||||||
Food, Beverage & Tobacco | 379,803 | — | — | 379,803 | ||||||||||||
Media | 561,703 | — | — | 561,703 | ||||||||||||
Real Estate | 1,161,145 | — | — | 1,161,145 | ||||||||||||
Retailing | 1,159,564 | — | — | 1,159,564 | ||||||||||||
Telecommunication Services | 1,549,070 | — | — | 1,549,070 | ||||||||||||
United Kingdom1 | — | 196,641,333 | — | 196,641,333 | ||||||||||||
Food, Beverage & Tobacco | 13,249,992 | 15,034,379 | — | 28,284,371 | ||||||||||||
Insurance | 6,380,465 | 10,625,729 | — | 17,006,194 | ||||||||||||
Materials | 6,312,474 | 46,348,741 | — | 52,661,215 | ||||||||||||
Retailing | 5,077,656 | 5,256,918 | — | 10,334,574 | ||||||||||||
Technology Hardware & Equipment | 3,794,230 | 24,426,004 | — | 28,220,234 | ||||||||||||
United States1 | 2,715,763 | — | — | 2,715,763 | ||||||||||||
Preferred Stock1 | — | 958,473 | — | 958,473 | ||||||||||||
United Kingdom | — | — | 32,214 | 32,214 | ||||||||||||
Other Investment Companies1 | 42,919,842 | — | — | 42,919,842 | ||||||||||||
Rights1 | 297,467 | — | — | 297,467 | ||||||||||||
Short-Term Investments1 | — | 1,242,824 | — | 1,242,824 | ||||||||||||
Corporate Bonds1 | — | 2,945,139 | — | 2,945,139 | ||||||||||||
Brazil | — | — | 28,510 | 28,510 | ||||||||||||
Total | $307,676,250 | $1,336,908,730 | $91,364 | $1,644,676,344 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Forward Foreign Currency Exchange Contracts2 | $1,791,268 | $— | $— | $1,791,268 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | ($593,418 | ) | $— | $— | ($593,418 | ) | ||||||||||
Forward Foreign Currency Exchange Contracts2 | (400,971 | ) | — | — | (400,971 | ) |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts and forward foreign currency exchange contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
See financial notes 53
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings 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 | October 31, | ||||||||||||||||||||||||||||
Investments in Securities | 2011 | (Premiums) | (Losses) | (Losses) | Purchases | Sales | in | out | 2012 | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||
Hong Kong | $82,530 | $— | $— | ($138,110 | ) | $86,220 | $— | $— | $— | $30,640 | ||||||||||||||||||||||||||
United Kingdom | 27,850 | — | (496 | ) | (147 | ) | — | (27,207 | ) | — | — | — | ||||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||||||
United Kingdom | — | — | — | 377 | 31,837 | — | — | — | 32,214 | |||||||||||||||||||||||||||
Corporate Bonds | ||||||||||||||||||||||||||||||||||||
Brazil | 67,455 | (302 | ) | — | (38,643 | ) | — | — | — | — | 28,510 | |||||||||||||||||||||||||
Total | $177,835 | ($302 | ) | ($496 | ) | ($176,523 | ) | $118,057 | ($27,207 | ) | $— | $— | $91,364 | |||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2012 was ($277,789).
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $9,463,260 and $18,892,710 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended October 31, 2012. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation by the fund. There were no transfers in or out of Level 3 securities during the period.
54 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments, at value (cost $1,381,453,687) | $1,644,676,344 | |||||
Foreign currency, at value (cost $1,111,014) | 1,109,341 | |||||
Cash | 7,880 | |||||
Receivables: | ||||||
Investments sold | 5,203,700 | |||||
Fund shares sold | 6,509,089 | |||||
Dividends | 2,906,611 | |||||
Foreign tax reclaims | 804,631 | |||||
Interest | 35,585 | |||||
Due from broker for futures | 32,606 | |||||
Unrealized gains on forward foreign currency exchange contracts | 1,791,268 | |||||
Prepaid expenses | + | 161,776 | ||||
Total assets | 1,663,238,831 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 6,833,192 | |||||
Investment adviser and administrator fees | 143,273 | |||||
Shareholder service fees | 330,742 | |||||
Fund shares redeemed | 1,870,093 | |||||
Unrealized losses on forward foreign currency exchange contracts | + | 400,971 | ||||
Total liabilities | 9,578,271 | |||||
Net Assets | ||||||
Total assets | 1,663,238,831 | |||||
Total liabilities | − | 9,578,271 | ||||
Net assets | $1,653,660,560 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,767,019,959 | |||||
Net investment income not yet distributed | 20,990,598 | |||||
Net realized capital losses | (398,325,628 | ) | ||||
Net unrealized capital gains | 263,975,631 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $591,555,332 | 31,088,403 | $19.03 | |||||||||||
Select Shares | $1,062,105,228 | 55,803,448 | $19.03 |
See financial notes 55
Table of Contents
Laudus International MarketMasters Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $3,266,346) | $43,338,010 | |||||
Interest (net of foreign withholding taxes of $571) | + | 44,245 | ||||
Total investment income | 43,382,255 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 20,044,201 | |||||
Shareholder service fees: | ||||||
Investor Shares | 1,438,766 | |||||
Select Shares | 872,945 | |||||
Custodian fees | 958,743 | |||||
Transfer agent fees | 193,608 | |||||
Professional fees | 165,708 | |||||
Portfolio accounting fees | 159,328 | |||||
Shareholder reports | 155,257 | |||||
Registration fees | 64,961 | |||||
Trustees’ fees | 16,934 | |||||
Interest expense | 175 | |||||
State filing fee reimbursement (Note 4) | (9,194 | ) | ||||
Other expenses | + | 64,941 | ||||
Total expenses | 24,126,373 | |||||
Expense reduction by CSIM and its affiliates1 | − | 1,561,611 | ||||
Custody credits | − | 32 | ||||
Net expenses | − | 22,564,730 | ||||
Net investment income | 20,817,525 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 974,304 | |||||
Net realized gains on futures contracts | 6,946,489 | |||||
Net realized gains on foreign currency transactions | + | 8,812,772 | ||||
Net realized gains | 16,733,565 | |||||
Net unrealized gains on investments | 120,907,278 | |||||
Net unrealized losses on futures contracts | (3,092,983 | ) | ||||
Net unrealized losses on foreign currency translations | + | (2,854,650 | ) | |||
Net unrealized gains | + | 114,959,645 | ||||
Net realized and unrealized gains | 131,693,210 | |||||
Increase in net assets resulting from operations | $152,510,735 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $9,194. See financial note 4 for additional information. |
56 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $20,817,525 | $16,424,222 | ||||||||
Net realized gains | 16,733,565 | 111,994,929 | ||||||||
Net unrealized gains (losses) | + | 114,959,645 | (183,591,536 | ) | ||||||
Increase (Decrease) in net assets from operations | 152,510,735 | (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
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 1,866,086 | $33,699,589 | 5,069,725 | $93,748,039 | ||||||||||||||
Select Shares | + | 14,627,352 | 259,539,496 | 14,896,939 | 281,255,337 | |||||||||||||
Total shares sold | 16,493,438 | $293,239,085 | 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 | (9,205,299 | ) | ($164,437,304 | ) | (13,644,152 | ) | ($260,043,586 | ) | ||||||||||
Select Shares | + | (14,236,435 | ) | (249,904,027 | ) | (11,964,535 | ) | (226,246,386 | ) | |||||||||
Total shares redeemed | (23,441,734 | ) | ($414,341,331 | ) | (25,608,687 | ) | ($486,289,972 | ) | ||||||||||
Net transactions in fund shares | (6,232,009 | ) | ($109,714,184 | ) | (4,668,356 | ) | ($92,918,403 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (6,232,009 | ) | 27,824,897 | (4,668,356 | ) | (170,875,042 | ) | ||||||||||
End of period | 86,891,851 | $1,653,660,560 | 93,123,860 | $1,625,835,663 | ||||||||||||||
Net investment income not yet distributed | $20,990,598 | $2,951,994 |
See financial notes 57
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Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”) a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) | Schwab International Core Equity Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Target 2010 Fund | |||
Laudus International MarketMasters Fund | 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 | |||
Schwab MarketTrack All Equity Portfolio | Schwab Target 2040 Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Fundamental US Large Company Index Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Fundamental US Small Company Index Fund | |||
Schwab MarketTrack Conservative Portfolio | (formerly Schwab Fundamental US Small-Mid Company Index Fund) | |||
Schwab Balanced Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Dividend Equity Fund | (formerly Schwab Fundamental International Small-Mid Company Index Fund) | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab Small-Cap Equity Fund | (formerly Schwab Fundamental Emerging Markets Index Fund) | |||
Schwab Hedged Equity Fund | Schwab Monthly Income Fund – Moderate Payout | |||
Schwab Financial Services Fund | Schwab Monthly Income Fund – Enhanced Payout | |||
Schwab Health Care 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 funds’ Board of Trustees (the “Board”) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
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:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported at halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below. | |
• | Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a |
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2. Significant Accounting Policies (continued):
price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the procedures. |
• | International fair valuation: The Board 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 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 forward 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. 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 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. |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 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 (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 forwards is 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, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange 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. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures 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”).
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Financial Notes (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.
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 GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies. 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 and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2012, if any, are reflected in the funds’ Statements 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.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(l) New Accounting Pronouncements:
In December 2011, Accounting Standards Update (“ASU”) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities,” was issued and is effective for interim and annual periods beginning after January 1, 2013. The ASU enhances disclosure requirements with respect to an entity’s rights of offset and related arrangements associated with its financial and derivative instruments. Management is currently evaluating the impact the adoption of ASU 2011-11 may have on the funds’ financial statement disclosures.
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 the investment in a fund will fluctuate, which means that investors 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.
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.
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.
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.
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. 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
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Financial Notes (continued)
3. Risk Factors (continued):
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.
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 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 its affiliates 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 Board, to limit the total annual fund operating expenses, excluding interest, taxes and certain non-routine expenses. The expense limitation, effective June 6, 2012, as a percentage of average daily net assets is as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Investor Shares | 1.35% | 1.40% | ||||||
Select Shares | 1.20% | 1.25% |
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Prior to June 6, 2012, the expense limitation as a percentage of average daily net assets were as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Investor Shares | 1.46% | 1.65% | ||||||
Select Shares | 1.31% | 1.47% |
Certain Schwab Funds may own shares of other Schwab Funds. The table below reflects the percentage of each fund shares in this report owned by other Schwab Funds as of October 31, 2012:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Schwab Target Funds: | ||||||||
Schwab Target 2010 Fund | 0.7% | 0.1% | ||||||
Schwab Target 2015 Fund | 1.1% | 0.2% | ||||||
Schwab Target 2020 Fund | 6.0% | 1.0% | ||||||
Schwab Target 2025 Fund | 3.2% | 0.6% | ||||||
Schwab Target 2030 Fund | 11.1% | 1.9% | ||||||
Schwab Target 2035 Fund | 3.0% | 0.5% | ||||||
Schwab Target 2040 Fund | 12.4% | 2.1% | ||||||
Schwab Monthly Income Funds: | ||||||||
Schwab Monthly Income Fund - Moderate Payout | —% | 0.1% | ||||||
Schwab Monthly Income Fund - Enhanced Payout | —% | 0.2% | ||||||
Schwab Balanced Fund | 7.5% | —% |
The funds may engage in direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended October 31, 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 by the Board. The funds had no interfund borrowing or lending activity during the period.
During the period, the Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund received a payment of $10,573 and $9,194, respectively, related to state filing fees resulting from revised fee calculation methodologies being applied on sales of the funds’ shares in prior periods in certain states. These payments are presented in each fund’s Statement of Operations as “State filing fee reimbursement”.
All or a portion of the state filing fees were previously borne by CSIM through a waiver of CSIM’s management fee. As this expense was previously waived, the payments received during the period had the effect of decreasing the total “Expense reduction by CSIM and its affiliates” in each fund’s Statement of Operations. The current net operating expense ratio was not impacted by this payment.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. 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.
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7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street, an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 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 | $217,431,910 | $340,374,851 | ||||||
Laudus International MarketMasters Fund | 1,032,671,229 | 1,107,600,149 |
9. Derivatives:
The funds entered into equity index futures contracts (“futures”) during the report period. The funds invested in futures to equitize available cash. The fair value and due to (from) brokers for futures contracts held at October 31, 2012 and the net realized/unrealized gains (losses) on futures contracts held during the period ended October 31, 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 month-end average values of futures contracts held by the funds and the month-end average number of contracts held were as follows:
Contract Values | Number of Contracts | |||||||
Laudus Small-Cap MarketMasters Fund | $6,741,663 | 87 | ||||||
Laudus International MarketMasters Fund | 51,765,359 | 364 |
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 policies with respect to forwards and financial note 3 for disclosures concerning the risks of investing in forwards. During the period, the month-end average notional amount and the month-end average unrealized gains (losses) in forwards were $178,401,960 and $3,709,819, respectively.
As of October 31, 2012, the derivatives contracts held by the Laudus International MarketMasters Fund, categorized by primary risk exposure, were:
Asset Derivatives | Fair Value | |||
Forward Foreign Currency Exchange Contracts1 | $1,791,268 | |||
Liability Derivatives | ||||
Equity Index - Futures Contracts2 | $593,418 | |||
Forward Foreign Currency Exchange Contracts3 | 400,971 | |||
Total | $994,389 |
1 | Statement of Assets and Liabilities location: Unrealized gains on forward foreign currency exchange contracts. | |
2 | Includes cumulative unrealized losses of futures contracts as reported in the Schedule of Portfolio Holdings. Only current day’s variation margin is reported within the Statement of Assets and Liabilities. | |
3 | Statement of Assets and Liabilities location: Unrealized losses on forward foreign currency exchange contracts. |
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Laudus MarketMasters Funds
Financial Notes (continued)
9. Derivatives (continued):
During the period ending October 31, 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 Gains (Losses)1 | $6,946,489 | $8,414,879 | ||||||
Change in Unrealized Gains (Losses)2 | (3,092,983 | ) | (2,753,322 | ) |
1 | Statement of Operations location: Net realized gains/losses on futures contracts and net realized gains/losses on foreign currency transactions. | |
2 | Statement of Operations location: Net unrealized gains/losses on futures contracts and net unrealized gains/losses on foreign currency translations. |
10. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/11-10/31/12) | (11/1/10-10/31/11) | |||||||
Laudus Small-Cap MarketMasters Fund | $394 | $3,545 | ||||||
Laudus International MarketMasters Fund | 7,324 | 32,578 |
11. Federal Income Taxes:
As of October 31, 2012, the components of distributable earnings on a tax-basis were as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Undistributed ordinary income | $— | $37,296,622 | ||||||
Undistributed long-term capital gains | — | — | ||||||
Unrealized appreciation on investments | 21,768,143 | 270,011,741 | ||||||
Unrealized depreciation on investments | (5,148,426 | ) | (52,200,014 | ) | ||||
Other unrealized appreciation/(depreciation) | (2 | ) | (43,906 | ) | ||||
Net unrealized appreciation/(depreciation) | $16,619,715 | $217,767,821 | ||||||
The primary differences between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments are Passive Foreign Investment Companies (PFIC), Partnerships and the tax deferral of losses on wash sale.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2012, 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 | $— | $1,774,547 | ||||||
October 31, 2017 | 50,679,960 | 366,649,297 | ||||||
Total | $50,679,960 | $368,423,844 | ||||||
For the year ended October 31, 2012, the funds had capital losses deferred and capital losses utilized as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Capital losses deferred | $897,248 | $— | ||||||
Capital losses utilized | 12,666,636 | 2,234,908 |
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Laudus MarketMasters Funds
Financial Notes (continued)
11. Federal Income Taxes (continued):
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Current period distributions | ||||||||
Ordinary income | $— | $14,971,654 | ||||||
Long-term capital gains | — | — | ||||||
Return of capital | — | — | ||||||
Prior period distributions | ||||||||
Ordinary income | $— | $22,784,254 | ||||||
Long-term capital gains | — | — | ||||||
Return of capital | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2012, the funds made the following reclassifications:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Capital shares | ($195,440 | ) | $— | |||||
Undistributed net investment income | 194,364 | 12,192,733 | ||||||
Net realized capital gains/(losses) | 1,076 | (12,192,733 | ) |
As of October 31, 2012, 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, 2012, 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. However, such losses must be utilized prior to the pre-enactment capital losses, which increases the likelihood that the pre-enactment capital losses will expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital loss, 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.
The funds have adopted the noted provisions of the Act for the period ending October 31, 2012.
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Laudus MarketMasters Funds
Financial Notes (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.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Laudus Small-Cap MarketMasters Fund
Laudus International MarketMasters Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund (two of the portfolios constituting Schwab Capital Trust, hereafter referred to as the “Funds”) at October 31, 2012, and the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 14, 2012
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Other Federal Tax Information (unaudited)
The Laudus International MarketMasters Fund elects to pass through, under section 853 of the Internal Revenue Code, the foreign tax credit of $3,169,118 to its shareholders for the year ended October 31, 2012. The respective foreign source income on the fund is $46,594,575.
For the fiscal year ended October 31, 2012, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2013 via IRS form 1099 of the amounts for use in preparing their 2012 income tax return.
Laudus Small-Cap MarketMasters Fund | $— | |||
Laudus International MarketMasters Fund | 18,000,654 |
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Approval of Investment Advisory and Sub-Advisory Agreements
Approval of Renewal of Investment Advisory and Sub-Advisory Agreements
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreements must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund1 and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreements or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreements.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in part, to considering whether to renew the investment advisory agreements between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) with respect to the existing funds in the Trust, including Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund (the “Funds”), and the subadvisory agreements between CSIM and Neuberger Berman Management LLC and TAMRO Capital Partners, LLC relating to Laudus Small-Cap MarketMasters Fund; and CSIM and American Century Global Investment Management, Inc., Harris Associates L.P., William Blair & Company, LLC, Mondrian Investment Partners Limited and WHV Investment Management relating to the Laudus International Market-Masters Fund (collectively, the “Sub-Advisers”). Such investment advisory and sub-advisory agreements are collectively referred to herein as the “Agreements”. The Trustees also review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM and the Sub-Advisers, including information about their affiliates, personnel and operations. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM. The Board also discusses with CSIM the Funds’ operations and CSIM’s ability, consistent with the “manager of managers” structure of each of the Funds to (i) identify and recommend to the Trustees sub-advisers for each Fund, (ii) monitor and oversee the performance and investment capabilities of each sub-adviser, and (iii) recommend the replacement of a sub-adviser when appropriate. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM and CSIM sends an information request letter to each of the Sub-Advisers seeking certain relevant information. The responses by CSIM and the Sub-Advisers are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreements with respect to the Funds at meetings held on April 24, 2012, and June 5, 2012, and approved the renewal of the Agreements with respect to the Funds for an additional one year term at the meeting held on June 5, 2012. The Board’s approval of the Agreements with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreements, including the resources of CSIM and its affiliates, and the Sub-Advisers, dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds, and other types of accounts; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates, as well as the profitability of the Sub-Advisers; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The
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Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. In addition, the Trustees considered that many of the Funds’ shareholders are also brokerage clients of Schwab. The Board also considered the nature, extent and quality of the sub-advisory services provided by the Sub-Advisers to the Funds and the resources each dedicates to the Funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM and the Sub-Advisers to the Funds and the resources of CSIM, and its affiliates, and the Sub-Advisers dedicated to the Funds supported renewal of the Agreements with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreements with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. In addition, the Trustees considered whether irrespective of relative performance, each Sub-Adviser’s absolute performance was consistent with expectations for such Sub-Adviser’s unique investment methodology. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser and Sub-Adviser profitability discussed below. Each of Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund. These factors included the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreements with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM and the Sub-Advisers to other mutual funds, and to other types of accounts, such as separate accounts, pooled vehicles, wrap accounts and offshore funds, but, with respect to such other types of accounts, accorded less weight to such comparisons due to the different legal, regulatory, compliance and operating features of mutual funds as compared to these other types of accounts. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreements with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to CSIM, the Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM, and its respective affiliates. The Trustees also considered the compensation flowing to the Sub-Advisers, directly or indirectly. The Trustees also considered any other benefits derived by the Sub-Advisers from their relationship with the Funds, such as whether, by virtue of its management of the Funds, any Sub-Adviser obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to the Sub-Advisers, the Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by the Sub-Advisers, and their respective affiliates. The Board also considered the profitability of the Sub-Advisers with respect to the sub-advisory services they provide to the Funds, although, when doing so, the Board took into account the fact that the Sub-Advisers are compensated by CSIM, and not by the Funds directly, and such compensation with respect to any Sub-Adviser reflects an arms-length negotiation between the Sub-Adviser and CSIM. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM and the Sub-Advisers is reasonable and supported renewal of the Agreements with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated
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investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreements with respect to the Funds and concluded that the compensation under the Agreements with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
Approval of New Sub-Advisory Agreements
At a meeting of the Board held on December 8, 2011, CSIM recommended, and the Trustees, including each of the Independent Trustees, approved the a new investment sub-advisory agreement between CSIM and Mellon Capital Management Corp. (“Mellon Capital”), pursuant to which Mellon Capital was appointed as a sub-adviser to each of Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund (each, a “Fund,” collectively, the “Funds”). Also, at a meeting of the Board held on September 25, 2012, CSIM recommended, and the Trustees, including a majority of the Independent Trustees, approved a new investment sub-advisory agreement between CSIM and Wellington Management Company LLP (“Wellington Management”), pursuant to which Wellington Management was appointed as a sub-adviser to Laudus Small-Cap MarketMasters Fund (“New Sub-Advisory Agreement,” together with the sub-advisory agreement with Mellon Capital, “New Sub-Advisory Agreements”). As appropriate, each of Mellon Capital and Wellington Management is hereinafter refers to as “sub-adviser,” and together, “sub-advisers.”
For each New Sub-Advisory Agreement, the Board was provided with detailed materials related to Mellon Capital and Wellington Management in advance of and at each meeting. The materials included, but were not limited to, information about each sub-adviser’s (a) quality of investment management and other services; (b) investment management personnel; (c) operations and financial condition; (d) brokerage practices (including any soft dollar arrangements) and other investment strategies; (f) compliance systems; (g) policies on, and compliance procedures for, personal securities transactions; (h) reputation, expertise and resources; (i) performance compared with similar advisers; and (j) performance with respect to similar accounts managed by each sub-adviser. In addition, the Board was provided with information about the level of the sub-advisory fees to be paid to each sub-adviser, and comparable fees paid to each sub-adviser for managing similar accounts. The Independent Trustees received advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of Trustees for the approval of each New Sub-Advisory Agreement. The proposed appointments of Mellon Capital and Wellington Management were first reviewed and discussed in the Investment Oversight Committee of the Board (the “Committee”) on December 8, 2011 and September 24, 2012, respectively. Following such discussions, the Committee recommended each New Sub-Advisory Agreement to the Board for approval.
In its consideration of the approval of each New Sub-Advisory Agreement, the Board considered a variety of specific factors, including:
1. | the nature, extent and quality of the services to be provided to each Fund under the applicable New Sub-Advisory Agreement, including the resources of each sub-adviser to be dedicated to each applicable Fund; |
2. | each sub-adviser’s investment performance in providing sub-advisory services with respect to similar accounts; |
3. | each applicable Fund’s expenses and how those expenses would be impacted by the hiring of each sub-adviser; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale may be realized as each Fund grows and whether fee levels in each New Sub-Advisory Agreement reflect the economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the sub-advisory services to be provided by each sub-adviser to the applicable Fund and the resources the sub-adviser will dedicate to the Fund. In this regard, the Trustees considered the information provided by each sub-adviser with respect to its history, reputation, expertise, qualifications of its personnel, and experience in managing the type of strategies for which the sub-adviser was being engaged. The Board also considered reports regarding the search process undertaken by CSIM that led to the identification of Mellon Capital and Wellington Management by CSIM as a well-qualified sub-advisers to each applicable Fund with an investment
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style consistent with the Fund’s investment objective and strategies, and CSIM’s desired risk/return profile. The Trustees also considered the Trust’s Chief Compliance Officer’s evaluation of each sub-adviser’s compliance program and the recommended compliance monitoring program for the sub-adviser. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by sub-advisers to each applicable Fund and the resources of the sub-adviser to be dedicated to such Fund supported approval of the applicable New Sub-Advisory Agreement.
Investment Performance. The Board considered each sub-adviser’s investment performance in determining whether to approve the applicable New Sub-Advisory Agreement. Specifically, the Trustees considered each sub-adviser’s tracking error relative to appropriate benchmarks as well as its overall relative performance in providing investment advisory services to similar accounts. Following such evaluation, the Board concluded, within the context of its full deliberations, that the investment performance of each sub-adviser supported approval of the applicable New Sub-Advisory Agreement.
Fund Expenses. With respect to each Fund’s expenses, the Trustees considered the rate of compensation to be paid under the applicable New Sub-Advisory Agreement, and the Fund’s net operating expense ratio. When considering the fees to be paid to Mellon Capital or Wellington Management, the Trustees took into account the fact that each sub-adviser will be compensated by CSIM, and not by the applicable Fund directly, and that the fees paid to each sub-adviser would not impact the fees paid by the Fund to CSIM. The Trustees also considered fees charged by each sub-adviser to comparable accounts, such as separately managed accounts. Finally, the Board considered CSIM’s statements that the fees to be paid to each sub-adviser are reasonable in light of the anticipated quality of services to be provided by the sub-adviser. Following such evaluation, the Board concluded, within the context of its full deliberations, that the fees to be paid to each sub-adviser are reasonable and supported approval of the applicable New Sub-Advisory Agreement.
Profitability. With respect to the profitability of CSIM, the Trustees considered projected profitability to CSIM before and after the appointment of Mellon Capital or Wellington Management as a new sub-adviser. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the expected profitability of CSIM supported approval of the each New Sub-Advisory Agreement. With respect to each sub-adviser, no historical information regarding the profitability of its relationship to the applicable Fund was available. The Trustees took into account, however, the fact that the sub-advisers will be compensated by CSIM, and not by the applicable Fund directly, and that the compensation paid to each sub-adviser reflects an arms-length negotiation between CSIM and the sub-adviser, which are unaffiliated with each other.
Economies of Scale. The Board considered the existence of any economies of scale and whether those are passed along to each Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In connection with its evaluation, the Board took into account the fact that the existing contractual investment advisory fee schedules and the proposed sub-advisory fee schedules relating to each Fund include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that each Fund obtains reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including each Independent Trustee (or a majority of the Independent Trustees, in the case of Wellington Management), approved each New Sub-Advisory Agreement for an initial two-year term and concluded that the compensation under the New Sub-Advisory Agreement is fair and reasonable in light of such services, and such other matters as the Trustees considered to be relevant in the exercise of their reasonable judgment.
1 | Laudus MarketMasters Funds and the investment adviser have received exemptive relief from the Securities and Exchange Commission to permit the investment adviser and the Funds to hire or terminate investment managers without shareholder approval, subject to certain conditions. One of the conditions requires approval by the Funds’ Board of Trustees before any such hiring is implemented. |
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Trustees and Officers
The tables below give information about the trustees and officers of 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 91 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-800-435-4000.
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. | 74 | 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). | 74 | 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). | 74 | 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. | 74 | 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). | 74 | 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). | 74 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 74 | 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. | 74 | 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. | 91 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President 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 and 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. In addition to their employment with Schwab, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation, the parent company of Schwab and the investment adviser. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays 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 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.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
• | WEBSITE USAGE. |
When you visit our websites, we may use devices known as “cookies,” graphic interchange format files (GIFs), or other similar web tools to enhance your web experience. These tools help us to recognize you, maintain your web session, and provide a more personalized experience. To learn more, please click the Privacy link on our website.
How We Share and Use Your Information
We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
• | when we use other companies to provide services for us, such as printing and mailing your account statements; |
• | when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control). |
State Laws
We will comply with state laws that apply to the disclosure or use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.
Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.
We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Laudus Funds® direct investors: 1-800-447-3332
© 2012 Laudus Funds. All rights reserved.
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Notes
Table of Contents
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.laudus.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.laudus.com/prospectus or the SEC’s website at http://www.sec.gov.
The Laudus Fundstm
Laudus Growth Investors
Laudus Growth Investors U.S. Large Cap Growth Fund
Laudus MarketMasters Fundstm
Laudus International MarketMasters Fundtm
Laudus Small-Cap MarketMasters Fundtm
Laudus Mondrian Fundstm
Laudus Mondrian International Equity Fund
Laudus Mondrian Emerging Markets Fund
Laudus Mondrian International Fixed Income Fund
Laudus Mondrian Global Fixed Income Fund
Laudus Mondrian Institutional Fundstm
Laudus Mondrian Institutional Emerging Markets Fund
Laudus Mondrian Institutional International Equity Fund
The Laudus Funds includes the Laudus Growth Investors U.S. Large Cap Growth Fund and the Laudus Mondrian Funds, which are part of the Laudus Trust and Laudus Institutional Trust and distributed by ALPS Distributors Inc.; and the Laudus MarketMasters Funds, which are part of the Schwab Capital Trust, and distributed by Charles Schwab & Co., Inc. Charles Schwab & Co., Inc. and ALPS Distributors Inc. are unaffiliated entities.
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For More Information about the Funds:
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Laudus MarketMasters Funds
P.O. Box 3812, Englewood, CO 80155–3812
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
© 2012 Charles Schwab & Co., Inc. All rights reserved. Member SIPC®. Printed on recycled paper. | MFR13812-15 |
Table of Contents
Table of Contents
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COMMAND PERFORMANCETM
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Annual report dated October 31, 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.
Table of Contents
Schwab Target Funds
Annual Report
October 31, 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
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Schwab Target Funds
In This Report
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Performance and Fund Facts | ||
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Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Table of Contents
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) | 7.63% | |||
Target 2010 Composite Index | 7.40% | |||
Fund Category: Morningstar Target-Date 2000-2010 | 7.43% | |||
Performance Details | pages 8-9 | |||
Schwab Target 2015 Fund (Ticker Symbol: SWGRX) | 8.41% | |||
Target 2015 Composite Index | 8.23% | |||
Fund Category: Morningstar Target-Date 2011-2015 | 8.12% | |||
Performance Details | pages 10-11 | |||
Schwab Target 2020 Fund (Ticker Symbol: SWCRX) | 9.52% | |||
Target 2020 Composite Index | 9.40% | |||
Fund Category: Morningstar Target-Date 2016-2020 | 8.79% | |||
Performance Details | pages 12-13 | |||
Schwab Target 2025 Fund (Ticker Symbol: SWHRX) | 10.14% | |||
Target 2025 Composite Index | 10.17% | |||
Fund Category: Morningstar Target-Date 2021-2025 | 9.27% | |||
Performance Details | pages 14-15 | |||
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.
Schwab Target Funds 3
Table of Contents
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) | 10.52% | |||
Target 2030 Composite Index | 10.64% | |||
Fund Category: Morningstar Target-Date 2026-2030 | 9.53% | |||
Performance Details | pages 16-17 | |||
Schwab Target 2035 Fund (Ticker Symbol: SWIRX) | 10.89% | |||
Target 2035 Composite Index | 11.20% | |||
Fund Category: Morningstar Target-Date 2031-2035 | 9.90% | |||
Performance Details | pages 18-19 | |||
Schwab Target 2040 Fund (Ticker Symbol: SWERX) | 11.33% | |||
Target 2040 Composite Index | 11.49% | |||
Fund Category: Morningstar Target-Date 2036-2040 | 9.88% | |||
Performance Details | pages 20-21 | |||
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 the funds’ prospectus for further detail and eligibility requirements. |
4 Schwab Target Funds
Table of Contents
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctpchandom.jpg)
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. The Schwab Target Funds offer a diversified blend of active, passive, proprietary, and third-party strategies. These funds are professionally managed according to projected retirement dates, rebalancing from aggressive asset allocation to more conservative as a target date approaches and beyond.
For the 12 months ended October 31, 2012, the funds generated positive returns, as U.S. stocks solidly outperformed international equities, and as U.S. fixed-income securities outperformed the narrowly positive returns of international fixed-income securities.
U.S. equities benefitted from low rates and continued governmental efforts to encourage faster economic growth, while the euro zone’s sovereign debt crisis represented an ongoing challenge, particularly for international equities. With concerns regarding elections in Greece and worries that the debt crisis might spread, international equities endured sharp losses in May. Subsequently, European leaders achieved meaningful progress, and international equities began to recover.
Bonds—in the U.S. and internationally—experienced intermittent periods of strength, while economic growth decelerated in many parts of the world. The European Central Bank, Bank of England, Bank of Japan, and U.S. Federal
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.
![]() | 15.21% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 12.08% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 5.15% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.25% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.06% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctcaptst05.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management’s views and portfolio holdings may have changed since the report date.
Schwab Target Funds 5
Table of Contents
From the President continued
For the 12 months ended October 31, 2012, the funds generated positive returns, as U.S. stocks solidly outperformed international equities, and as U.S. fixed-income securities outperformed the narrowly positive returns of international fixed-income securities.
Reserve were among the world’s central banks that maintained low interest-rate policies geared toward improving their region’s or country’s economic prospects.
U.S. stocks and bonds outperformed their international counterparts for the report period. In spite of softening U.S. corporate profit growth, the Russell 1000 Index returned 15.0%, compared with the 5.2% return of the MSCI EAFE Index and the 3.0% return of the MSCI Emerging Markets Index in U.S. dollar terms. The Barclays U.S. Aggregate Bond Index returned 5.3%, and in U.S. dollar terms, the Citigroup Non-U.S. Dollar World Government Bond Index returned 1.6%.
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 frequently asked questions or for more information about the Schwab Target Funds, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
6 Schwab Target Funds
Table of Contents
Fund Management
![]() | Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the funds. She was appointed portfolio manager of the funds in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. Ms. Tang replaced Jake Gilliam as portfolio manager during the reporting period. |
Schwab Target Funds 7
Table of Contents
Schwab Target 2010 Fund
The Schwab Target 2010 Fund (the 2010 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2010 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment on January 5, 2012, the 2010 Fund’s asset allocation was approximately 39% equity securities, 54% fixed-income securities and 7% money market funds. (For portfolio allocations as of the end of this reporting period, please see the 2010 Fund’s Portfolio Holdings included in this report.)
For the 12-month period ended October 31, 2012, the 2010 Fund returned 7.63%, while its internally calculated comparative index, the Target 2010 Composite Index (the composite index), returned 7.40%. Unlike the 2010 Fund’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow global economic growth and ongoing concerns over the European debt crisis, world stock markets posted gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% versus the MSCI EAFE Index and MSCI Emerging Markets Index, which gained 5.15% and 2.98%, respectively. Global real estate was strong for the period, up more than 16%, with non–U.S. real estate up nearly 19%. In the U.S., large-cap stocks outperformed small-cap stocks by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while Treasury Inflation-Protected Securities (TIPS) posted the strongest return among U.S. fixed-income—up 8.03%.
Positioning and Strategies. The 2010 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2010 Fund’s U.S. equity exposures provided the greatest contribution to total return, although most underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73%. The Schwab Core Equity Fund was the top contributor to absolute return, gaining 13.99% for the period, but dragged on the 2010 Fund’s relative return as it underperformed the composite index’s U.S. equity allocation component. The position in the Schwab S&P 500 Index Fund, which returned 15.09%, added to both absolute and relative performance. The Laudus Growth Investors U.S. Large Cap Growth Fund—the largest U.S. equity position—returned 10.11%, detracting from relative performance.
Within the 2010 Fund’s U.S. fixed-income allocation, the top contributor to total return was the Schwab Total Bond Market Fund, which gained 4.94%. On a relative basis, however, it slightly underperformed the composite index’s U.S. fixed-income component, the Barclays U.S. Aggregate Bond Index, which returned 5.25%. The PIMCO Total Return Fund (Institutional Shares) and the Loomis Sayles Investment Grade Bond Fund contributed positively to both absolute and relative performance, gaining 10.39% and 9.69%, respectively.
The 2010 Fund’s international equity allocation boosted absolute and relative performance. The Laudus International MarketMasters Fund (Select Shares)—the largest international equity position—was particularly valuable; it returned 10.20%, significantly outpacing the composite index’s international equity allocation component, the MSCI EAFE Index, which returned 5.15%. The 2010 Fund’s positions in the William Blair Institutional Small Cap Growth Fund (Institutional Shares) and American Century International Growth Fund (Institutional Shares) also contributed positively, returning 9.35% and 9.55%, respectively.
As of 10/31/12:
Statistics
Number of Holdings | 23 | |||
Portfolio Turnover Rate | 13% |
Asset Class Weightings % of Investments1
Fixed-Income Funds – Intermediate-Term Bond | 34.5% | |||
Equity Funds – Large-Cap | 22.5% | |||
Fixed-Income Funds – Short-Term Bond | 12.8% | |||
Equity Funds – International | 9.4% | |||
Equity Funds – Small-Cap | 5.5% | |||
Fixed Income Funds – Inflation-Protected Bond | 4.2% | |||
Short-Term Investments | 3.7% | |||
Money Market Funds | 3.3% | |||
Fixed-Income Funds – International Bond | 2.1% | |||
Equity Funds – Global Real Estate | 2.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Total Bond Market Fund | 19.3% | |||
Schwab Short-Term Bond Market Fund | 12.8% | |||
PIMCO Total Return Fund, Institutional Shares | 6.9% | |||
Laudus Growth Investors U.S. Large Cap Growth Fund | 6.0% | |||
Schwab Core Equity Fund | 5.6% | |||
Schwab S&P 500 Index Fund | 5.5% | |||
Schwab Premier Income Fund | 4.4% | |||
Schwab Treasury Inflation Protected Securities Fund | 4.2% | |||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 3.9% | |||
Laudus International MarketMasters Fund, Select Shares | 3.7% | |||
Total | 72.3% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
8 Schwab Target Funds
Table of Contents
Schwab Target 2010 Fund
Performance and Fund Facts as of 10/31/12
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.
July 1, 2005 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctst10f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2010 Fund (7/1/05) | 7.63 | % | 0.42 | % | 4.07 | % | |||||||||
Target 2010 Composite Index3 | 7.40 | % | 2.04 | % | 5.18 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 14.73 | % | 0.76 | % | 4.92 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.38 | % | 5.57 | % | |||||||||
Fund Category: Morningstar Target-Date 2000-2010 | 7.43 | % | 1.64 | % | 4.24 | % |
Fund Expense Ratios4: Net 0.55%; Gross 0.69%
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. 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. |
Schwab Target Funds 9
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Schwab Target 2015 Fund
The Schwab Target 2015 Fund (the 2015 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2015 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment on January 5, 2012, the 2015 Fund’s asset allocation was approximately 49% equity securities, 46% fixed income securities, and 5% money market funds. At its target date, the 2015 Fund’s allocation will be approximately 40% equity securities, 53% fixed-income securities and 7% money market funds. (For portfolio allocations as of the end of this reporting period, please see the 2015 Fund’s Portfolio Holdings included in this report.)
For the 12-month period ended October 31, 2012, the 2015 Fund returned 8.41%, while its internally calculated comparative index, the Target 2015 Composite Index (the composite index), returned 8.23%. Unlike the 2015 Fund’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow global economic growth and ongoing concerns over the European debt crisis, world stock markets posted gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% versus the MSCI EAFE Index and MSCI Emerging Markets Index, which gained 5.15% and 2.98%, respectively. Global real estate was strong for the period, up more than 16%, with non–U.S. real estate up nearly 19%. In the U.S., large-cap stocks outperformed small-cap stocks by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while Treasury Inflation-Protected Securities (TIPS) posted the strongest return among U.S. fixed-income—up 8.03%.
Positioning and Strategies. The 2015 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2015 Fund’s U.S. equity exposures provided the greatest contribution to total return, although most underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73%. The Schwab Core Equity Fund was the top contributor to absolute return, gaining 13.99% for the period, but dragged on the 2015 Fund’s relative return as it underperformed the composite index’s U.S. equity allocation component. The position in the Schwab S&P 500 Index Fund, which returned 15.09%, added to both absolute and relative performance. The Laudus Growth Investors U.S. Large Cap Growth Fund—the largest U.S. equity position—returned 10.11%, detracting from relative performance.
Within the 2015 Fund’s U.S. fixed-income allocation, the top contributor to total return was the Schwab Total Bond Market Fund, which gained 4.94%. On a relative basis, however, it slightly underperformed the composite index’s U.S. fixed-income component, the Barclays U.S. Aggregate Bond Index, which returned 5.25%. The PIMCO Total Return Fund (Institutional Shares) and the Loomis Sayles Investment Grade Bond Fund contributed positively to both absolute and relative performance, gaining 10.39% and 9.69%, respectively.
The 2015 Fund’s international equity allocation boosted absolute and relative performance. The Laudus International MarketMasters Fund (Select Shares)—the largest international equity position—was particularly valuable; it returned 10.20%, significantly outpacing the composite index’s international equity allocation component, the MSCI EAFE Index, which returned 5.15%. The 2015 Fund’s positions in the William Blair Institutional Small Cap Growth Fund (Institutional Shares) and American Century International Growth Fund (Institutional Shares) also contributed positively, returning 9.35% and 9.55%, respectively.
As of 10/31/12:
Statistics
Number of Holdings | 23 | |||
Portfolio Turnover Rate | 13% |
Asset Class Weightings % of Investments1
Fixed-Income Funds – Intermediate-Term Bond | 31.7% | |||
Equity Funds – Large-Cap | 28.2% | |||
Equity Funds – International | 11.8% | |||
Fixed-Income Funds – Short-Term Bond | 8.6% | |||
Equity Funds – Small-Cap | 7.0% | |||
Short-Term Investments | 3.8% | |||
Fixed-Income Funds – Inflation-Protected Bond | 3.1% | |||
Equity Funds – Global Real Estate | 2.5% | |||
Fixed-Income Funds – International Bond | 2.1% | |||
Money Market Funds | 1.2% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Total Bond Market Fund | 18.3% | |||
Schwab Short-Term Bond Market Fund | 8.6% | |||
Laudus Growth Investors U.S. Large Cap Growth Fund | 7.4% | |||
Schwab Core Equity Fund | 6.9% | |||
Schwab S&P 500 Index Fund | 6.8% | |||
PIMCO Total Return Fund, Institutional Shares | 5.9% | |||
Laudus International MarketMasters Fund, Select Shares | 4.6% | |||
Schwab Small-Cap Equity Fund | 4.5% | |||
TCW Relative Value Large Cap Fund | 4.0% | |||
Schwab Premier Income Fund | 3.8% | |||
Total | 70.8% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
10 Schwab Target Funds
Table of Contents
Schwab Target 2015 Fund
Performance and Fund Facts as of 10/31/12
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.
March 12, 2008 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctst15f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2015 Fund (3/12/08) | 8.41 | % | 8.97 | % | 4.01 | % | |||||||||
Target 2015 Composite Index3 | 8.23 | % | 8.77 | % | 4.00 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 14.73 | % | 13.76 | % | 4.27 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.08 | % | 6.31 | % | |||||||||
Fund Category: Morningstar Target-Date 2011-2015 | 8.12 | % | 8.21 | % | 3.10 | % |
Fund Expense Ratios4: Net 0.63%; Gross 0.85%
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. 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. |
Schwab Target Funds 11
Table of Contents
Schwab Target 2020 Fund
The Schwab Target 2020 Fund (the 2020 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2020 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment on January 5, 2012, the 2020 Fund’s asset allocation was approximately 61% equity securities, 37% fixed income securities, and 2% money market funds. At its target date, the 2020 Fund’s allocation will be approximately 40% equity securities, 53% fixed-income securities and 7% money market funds. (For portfolio allocations as of the end of this reporting period, please see the 2020 Fund’s Portfolio Holdings included in this report.)
For the 12-month period ended October 31, 2012, the 2020 Fund returned 9.52%, while its internally calculated comparative index, the Target 2020 Composite Index (the composite index), returned 9.40%. Unlike the 2020 Fund’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow global economic growth and ongoing concerns over the European debt crisis, world stock markets posted gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% versus the MSCI EAFE Index and MSCI Emerging Markets Index, which gained 5.15% and 2.98%, respectively. Global real estate was strong for the period, up more than 16%, with non–U.S. real estate up nearly 19%. In the U.S., large-cap stocks outperformed small-cap stocks by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while Treasury Inflation-Protected Securities (TIPS) posted the strongest return among U.S. fixed-income—up 8.03%.
Positioning and Strategies. The 2020 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2020 Fund’s U.S. equity exposures provided the greatest contribution to total return for the period, although most underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73% for the reporting period. The top contributor to absolute return was the Schwab Core Equity Fund—the largest U.S. equity position—which gained 13.99% for the period, but dragged on the 2020 Fund’s relative return as it underperformed the composite index’s U.S. equity allocation component. The position in the Schwab S&P 500 Index Fund, which returned 15.09%, added to both absolute and relative performance. The Laudus Growth Investors U.S. Large Cap Growth Fund and Laudus Small-Cap MarketMasters Fund (Select Shares) detracted from relative performance, returning 10.11% and 9.80%, respectively.
Within the 2020 Fund’s U.S. fixed-income allocation, the top contributor to total return was the Schwab Total Bond Market Fund, which gained 4.94%. On a relative basis, however, it slightly underperformed the composite index’s U.S. fixed-income component, the Barclays U.S. Aggregate Bond Index, which returned 5.25%. The PIMCO Total Return Fund (Institutional Shares) and the Loomis Sayles Investment Grade Bond Fund contributed positively to both absolute and relative performance, gaining 10.39% and 9.69%, respectively.
The 2020 Fund’s international equity allocation boosted absolute and relative performance. The Laudus International MarketMasters Fund (Select Shares)—the largest international equity position—was particularly valuable; it returned 10.20%, significantly outpacing the composite index’s international equity allocation component, the MSCI EAFE Index, which returned 5.15%. The 2020 Fund’s positions in the William Blair Institutional Small Cap Growth Fund (Institutional Shares) and American Century International Growth Fund (Institutional Shares) also contributed positively, returning 9.35% and 9.55%, respectively.
As of 10/31/12:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 13% |
Asset Class Weightings % of Investments1
Equity Funds – Large-Cap | 35.0% | |||
Fixed-Income Funds – Intermediate-Term Bond | 28.6% | |||
Equity Funds – International | 14.7% | |||
Equity Funds – Small-Cap | 8.6% | |||
Equity Funds – Global Real Estate | 3.1% | |||
Fixed-Income Funds – Short-Term Bond | 3.0% | |||
Fixed Income Funds – Inflation-Protected Bond | 2.7% | |||
Fixed Income Funds – International Bond | 2.3% | |||
Short-Term Investments | 2.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Total Bond Market Fund | 18.4% | |||
Schwab Core Equity Fund | 9.3% | |||
Laudus Growth Investors U.S. Large Cap Growth Fund | 8.9% | |||
Schwab S&P 500 Index Fund | 8.0% | |||
Schwab Small-Cap Equity Fund | 5.6% | |||
Laudus International MarketMasters Fund, Select Shares | 5.6% | |||
PIMCO Total Return Fund, Institutional Shares | 4.8% | |||
TCW Relative Value Large Cap Fund | 4.6% | |||
Schwab Dividend Equity Fund | 4.3% | |||
Schwab Global Real Estate Fund | 3.1% | |||
Total | 72.6% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
12 Schwab Target Funds
Table of Contents
Schwab Target 2020 Fund
Performance and Fund Facts as of 10/31/12
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.
July 1, 2005 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctst20f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2020 Fund (7/1/05) | 9.52 | % | 1.18 | % | 4.84 | % | |||||||||
Target 2020 Composite Index3 | 9.40 | % | 1.88 | % | 5.35 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 14.73 | % | 0.76 | % | 4.92 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.38 | % | 5.57 | % | |||||||||
Fund Category: Morningstar Target-Date 2016-2020 | 8.79 | % | 0.63 | % | 3.95 | % |
Fund Expense Ratios4: Net 0.68%; Gross 0.74%
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. 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. |
Schwab Target Funds 13
Table of Contents
Schwab Target 2025 Fund
The Schwab Target 2025 Fund (the 2025 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2025 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment on January 5, 2012, the 2025 Fund’s asset allocation was approximately 70% equity securities, 28% fixed income securities, and 2% money market funds. At its target date, the 2025 Fund’s allocation will be approximately 40% equity securities, 53% fixed-income securities and 7% money market funds. (For portfolio allocations as of the end of this reporting period, please see the 2025 Fund’s Portfolio Holdings included in this report.)
For the 12-month period ended October 31, 2012, the 2025 Fund returned 10.14%, while its internally calculated comparative index, the Target 2025 Composite Index (the composite index), returned 10.17%. Unlike the 2025 Fund’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow global economic growth and ongoing concerns over the European debt crisis, world stock markets posted gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% versus the MSCI EAFE Index and MSCI Emerging Markets Index, which gained 5.15% and 2.98%, respectively. Global real estate was strong for the period, up more than 16%, with non–U.S. real estate up nearly 19%. In the U.S., large-cap stocks outperformed small-cap stocks by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while Treasury Inflation-Protected Securities (TIPS) posted the strongest return among U.S. fixed-income—up 8.03%.
Positioning and Strategies. The 2025 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2025 Fund’s U.S. equity exposures provided the greatest contribution to total return, although most underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73%. The Schwab Core Equity Fund was the top contributor to absolute return, gaining 13.99% for the period, but dragged on the 2025 Fund’s relative return as it underperformed the composite index’s U.S. equity allocation component. The position in the Schwab S&P 500 Index Fund, which returned 15.09%, added to both absolute and relative performance. The Laudus Growth Investors U.S. Large Cap Growth Fund—the largest U.S. equity position—returned 10.11%, detracting from relative performance.
Within the 2025 Fund’s U.S. fixed-income allocation, the top contributor to total return was the Schwab Total Bond Market Fund, which gained 4.94%. On a relative basis, however, it slightly underperformed the composite index’s U.S. fixed-income component, the Barclays U.S. Aggregate Bond Index, which returned 5.25%. The PIMCO Total Return Fund (Institutional Shares) and the Loomis Sayles Investment Grade Bond Fund contributed positively to both absolute and relative performance, gaining 10.39% and 9.69%, respectively.
The 2025 Fund’s international equity allocation boosted absolute and relative performance. The Laudus International MarketMasters Fund (Select Shares)—the largest international equity position—was particularly valuable; it returned 10.20%, significantly outpacing the composite index’s international equity allocation component, the MSCI EAFE Index, which returned 5.15%. The 2025 Fund’s positions in the William Blair Institutional Small Cap Growth Fund (Institutional Shares) and American Century International Growth Fund (Institutional Shares) also contributed positively, returning 9.35% and 9.55%, respectively.
As of 10/31/12:
Statistics
Number of Holdings | 20 | |||
Portfolio Turnover Rate | 13% |
Asset Class Weightings % of Investments1
Equity Funds – Large-Cap | 40.1% | |||
Fixed-Income Funds – Intermediate-Term Bond | 24.1% | |||
Equity Funds – International | 16.8% | |||
Equity Funds – Small-Cap | 10.0% | |||
Equity Funds – Global Real Estate | 3.5% | |||
Short-Term Investments | 1.9% | |||
Fixed-Income Funds – Inflation-Protected Bond | 1.9% | |||
Fixed-Income Funds – International Bond | 1.7% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Total Bond Market Fund | 15.9% | |||
Laudus Growth Investors U.S. Large Cap Growth Fund | 10.5% | |||
Schwab Core Equity Fund | 10.1% | |||
Schwab S&P 500 Index Fund | 9.5% | |||
Laudus International MarketMasters Fund, Select Shares | 6.5% | |||
Schwab Small-Cap Equity Fund | 6.5% | |||
TCW Relative Value Large Cap Fund | 5.6% | |||
Schwab Dividend Equity Fund | 4.4% | |||
PIMCO Total Return Fund, Institutional Shares | 3.8% | |||
William Blair International Small Cap Growth Fund, Institutional Shares | 3.5% | |||
Total | 76.3% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
14 Schwab Target Funds
Table of Contents
Schwab Target 2025 Fund
Performance and Fund Facts as of 10/31/12
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.
March 12, 2008 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctst25f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2025 Fund (3/12/08) | 10.14 | % | 10.23 | % | 5.08 | % | |||||||||
Target 2025 Composite Index3 | 10.17 | % | 9.81 | % | 4.11 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 14.73 | % | 13.76 | % | 4.27 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.08 | % | 6.31 | % | |||||||||
Fund Category: Morningstar Target-Date 2021-2025 | 9.27 | % | 9.21 | % | 2.83 | % |
Fund Expense Ratios4: Net 0.74%; Gross 0.88%
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. 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. |
Schwab Target Funds 15
Table of Contents
��
Schwab Target 2030 Fund
The Schwab Target 2030 Fund (the 2030 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2030 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment on January 5, 2012, the 2030 Fund’s asset allocation was approximately 77% equity securities, 21% fixed income securities, and 2% money market funds. At its target date, the 2030 Fund’s allocation will be approximately 40% equity securities, 53% fixed-income securities and 7% money market funds. (For portfolio allocations as of the end of this reporting period, please see the 2030 Fund’s Portfolio Holdings included in this report.)
For the 12-month period ended October 31, 2012, the 2030 Fund returned 10.52%, while its internally calculated comparative index, the Target 2030 Composite Index (the composite index), returned 10.64%. Unlike the 2030 Fund’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow global economic growth and ongoing concerns over the European debt crisis, world stock markets posted gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% versus the MSCI EAFE Index and MSCI Emerging Markets Index, which gained 5.15% and 2.98%, respectively. Global real estate was strong for the period, up more than 16%, with non–U.S. real estate up nearly 19%. In the U.S., large-cap stocks outperformed small-cap stocks by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while Treasury Inflation-Protected Securities (TIPS) posted the strongest return among U.S. fixed-income—up 8.03%.
Positioning and Strategies. The 2030 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2030 Fund’s U.S. equity exposures provided the greatest contribution to total return for the period, although most underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73% for the reporting period. The top contributor to absolute return was the Schwab Core Equity Fund—the largest U.S. equity position—which gained 13.99% for the period, but dragged on the 2030 Fund’s relative return as it underperformed the composite index’s U.S. equity allocation component. The position in the Schwab S&P 500 Index Fund, which returned 15.09%, added to both absolute and relative performance. The Laudus Growth Investors U.S. Large Cap Growth Fund and Laudus Small-Cap MarketMasters Fund (Select Shares) detracted from relative performance, returning 10.11% and 9.80%, respectively.
The 2030 Fund’s international equity allocation boosted absolute and relative performance. The Laudus International MarketMasters Fund (Select Shares)—the largest international equity position—was particularly valuable; it returned 10.20%, significantly outpacing the composite index’s international equity allocation component, the MSCI EAFE Index, which returned 5.15%. The 2030 Fund’s positions in the William Blair Institutional Small Cap Growth Fund (Institutional Shares) and American Century International Growth Fund (Institutional Shares) also contributed positively, returning 9.35% and 9.55%, respectively.
Within the 2030 Fund’s U.S. fixed-income allocation, the top contributor to total return was the Schwab Total Bond Market Fund, which gained 4.94%. On a relative basis, however, it slightly underperformed the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index, which returned 5.25%. The PIMCO Total Return Fund (Institutional Shares) contributed positively to both absolute and relative performance, gaining 10.39%.
As of 10/31/12:
Statistics
Number of Holdings | 19 | |||
Portfolio Turnover Rate | 12% |
Asset Class Weightings % of Investments1
Equity Funds – Large-Cap | 44.3% | |||
Equity Funds – International | 18.6% | |||
Fixed-Income Funds – Intermediate-Term Bond | 17.2% | |||
Equity Funds – Small-Cap | 11.1% | |||
Equity Funds – Global Real Estate | 3.8% | |||
Short-Term Investments | 2.0% | |||
Fixed Income Funds – International Bond | 1.6% | |||
Fixed Income Funds – Inflation-Protected Bond | 1.4% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Total Bond Market Fund | 12.2% | |||
Schwab Core Equity Fund | 11.8% | |||
Laudus Growth Investors U.S. Large Cap Growth Fund | 11.2% | |||
Schwab S&P 500 Index Fund | 10.1% | |||
Schwab Small-Cap Equity Fund | 7.2% | |||
Laudus International MarketMasters Fund, Select Shares | 7.1% | |||
TCW Relative Value Large Cap Fund | 5.8% | |||
Schwab Dividend Equity Fund | 5.3% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 3.9% | |||
Schwab Global Real Estate Fund | 3.9% | |||
Total | 78.5% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
16 Schwab Target Funds
Table of Contents
Schwab Target 2030 Fund
Performance and Fund Facts as of 10/31/12
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.
July 1, 2005 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctst30f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2030 Fund (7/1/05) | 10.52 | % | 1.22 | % | 5.11 | % | |||||||||
Target 2030 Composite Index3 | 10.64 | % | 1.45 | % | 5.31 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 14.73 | % | 0.76 | % | 4.92 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.38 | % | 5.57 | % | |||||||||
Fund Category: Morningstar Target-Date 2026-2030 | 9.53 | % | -0.62 | % | 3.63 | % |
Fund Expense Ratios4: Net 0.77%; Gross 0.82%
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. 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. |
Schwab Target Funds 17
Table of Contents
Schwab Target 2035 Fund
The Schwab Target 2035 Fund (the 2035 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2035 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment on January 5, 2012, the 2035 Fund’s asset allocation was approximately 84% equity securities, 14% fixed income securities, and 2% money market funds. At its target date, the 2035 Fund’s allocation will be approximately 40% equity securities, 53% fixed-income securities and 7% money market funds. (For portfolio allocations as of the end of this reporting period, please see the 2035 Fund’s Portfolio Holdings included in this report.)
For the 12-month period ended October 31, 2012, the 2035 Fund returned 10.89%, while its internally calculated comparative index, the Target 2035 Composite Index (the composite index), returned 11.20%. Unlike the 2035 Fund’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow global economic growth and ongoing concerns over the European debt crisis, world stock markets posted gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% versus the MSCI EAFE Index and MSCI Emerging Markets Index, which gained 5.15% and 2.98%, respectively. Global real estate was strong for the period, up more than 16%, with non–U.S. real estate up nearly 19%. In the U.S., large-cap stocks outperformed small-cap stocks by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while Treasury Inflation-Protected Securities (TIPS) posted the strongest return among U.S. fixed-income—up 8.03%.
Positioning and Strategies. The 2035 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2035 Fund’s U.S. equity exposures provided the greatest contribution to total return, although most underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73%. The Schwab Core Equity Fund was the top contributor to absolute return, gaining 13.99% for the period, but dragged on the 2035 Fund’s relative return as it underperformed the composite index’s U.S. equity allocation component. The position in the Schwab S&P 500 Index Fund, which returned 15.09%, added to both absolute and relative performance. The Laudus Growth Investors U.S. Large Cap Growth Fund—the largest U.S. equity position—returned 10.11%, detracting from relative performance.
The 2035 Fund’s international equity allocation boosted absolute and relative performance. The Laudus International MarketMasters Fund (Select Shares)—the largest international equity position—was particularly valuable; it returned 10.20%, significantly outpacing the composite index’s international equity allocation component, the MSCI EAFE Index, which returned 5.15%. The 2035 Fund’s positions in the William Blair Institutional Small Cap Growth Fund (Institutional Shares) and American Century International Growth Fund (Institutional Shares) also contributed positively, returning 9.35% and 9.55%, respectively.
Within the 2035 Fund’s U.S. fixed-income allocation, the top contributor to total return was the Schwab Total Bond Market Fund, which gained 4.94%. On a relative basis, however, it slightly underperformed the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index, which returned 5.25%. The PIMCO Total Return Fund (Institutional Shares) contributed positively to both absolute and relative performance, gaining 10.39%.
As of 10/31/12:
Statistics
Number of Holdings | 19 | |||
Portfolio Turnover Rate | 11% |
Asset Class Weightings % of Investments1
Equity Funds – Large-Cap | 48.2% | |||
Equity Funds – International | 20.2% | |||
Equity Fund – Small-Cap | 12.0% | |||
Fixed-Income Funds – Intermediate-Term Bond | 11.5% | |||
Equity Funds – Global Real Estate | 4.2% | |||
Short-Term Investments | 2.0% | |||
Fixed-Income Funds – International Bond | 1.0% | |||
Fixed-Income Funds – Inflation-Protected Bond | 0.9% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Laudus Growth Investors U.S. Large Cap Growth Fund | 12.5% | |||
Schwab Core Equity Fund | 12.3% | |||
Schwab S&P 500 Index Fund | 11.4% | |||
Schwab Total Bond Market Fund | 8.1% | |||
Schwab Small-Cap Equity Fund | 7.8% | |||
Laudus International MarketMasters Fund, Select Shares | 7.8% | |||
TCW Relative Value Large Cap Fund | 6.6% | |||
Schwab Dividend Equity Fund | 5.5% | |||
Schwab Global Real Estate Fund | 4.2% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.2% | |||
Total | 80.4% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
18 Schwab Target Funds
Table of Contents
Schwab Target 2035 Fund
Performance and Fund Facts as of 10/31/12
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.
March 12, 2008 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctst35f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2035 Fund (3/12/08) | 10.89 | % | 10.73 | % | 4.84 | % | |||||||||
Target 2035 Composite Index3 | 11.20 | % | 10.23 | % | 3.87 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 14.73 | % | 13.76 | % | 4.27 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.08 | % | 6.31 | % | |||||||||
Fund Category: Morningstar Target-Date 2031-2035 | 9.90 | % | 9.57 | % | 2.38 | % |
Fund Expense Ratios4: Net 0.82%; 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.
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. |
Schwab Target Funds 19
Table of Contents
Schwab Target 2040 Fund
The Schwab Target 2040 Fund (the 2040 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2040 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment on January 5, 2012, the 2040 Fund’s asset allocation was approximately 89% equity securities, 9% fixed income securities, and 2% money market funds. At its target date, the 2040 Fund’s allocation will be approximately 40% equity securities, 53% fixed-income securities and 7% money market funds. (For portfolio allocations as of the end of this reporting period, please see the 2040 Fund’s Portfolio Holdings included in this report.)
For the 12-month period ended October 31, 2012, the 2040 Fund returned 11.33%, while its internally calculated comparative index, the Target 2040 Composite Index (the composite index), returned 11.49%. Unlike the 2040 Fund’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow global economic growth and ongoing concerns over the European debt crisis, world stock markets posted gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% versus the MSCI EAFE Index and MSCI Emerging Markets Index, which gained 5.15% and 2.98%, respectively. Global real estate was strong for the period, up more than 16%, with non–U.S. real estate up nearly 19%. In the U.S., large-cap stocks outperformed small-cap stocks by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while Treasury Inflation-Protected Securities (TIPS) posted the strongest return among U.S. fixed-income—up 8.03%.
Positioning and Strategies. The 2040 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2040 Fund’s U.S. equity exposures provided the greatest contribution to total return for the period, although most underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73% for the reporting period. The top contributor to absolute return was the Schwab Core Equity Fund—the largest U.S. equity position—which gained 13.99% for the period, but dragged on the 2040 Fund’s relative return as it underperformed the composite index’s U.S. equity allocation component. The position in the Schwab S&P 500 Index Fund, which returned 15.09%, added to both absolute and relative performance. The Laudus Growth Investors U.S. Large Cap Growth Fund and Laudus Small-Cap MarketMasters Fund (Select Shares) detracted from relative performance, returning 10.11% and 9.80%, respectively.
The 2040 Fund’s international equity allocation boosted absolute and relative performance. The Laudus International MarketMasters Fund (Select Shares)—the largest international equity position—was particularly valuable; it returned 10.20%, significantly outpacing the composite index’s international equity allocation component, the MSCI EAFE Index, which returned 5.15%. The 2040 Fund’s positions in the William Blair Institutional Small Cap Growth Fund (Institutional Shares) and American Century International Growth Fund (Institutional Shares) also contributed positively, returning 9.35% and 9.55%, respectively.
Within the 2040 Fund’s U.S. fixed-income allocation, the top contributor to total return was the Schwab Total Bond Market Fund, which gained 4.94%. On a relative basis, however, it slightly underperformed the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index, which returned 5.25%. The PIMCO Total Return Fund (Institutional Shares) contributed positively to both absolute and relative performance, gaining 10.39%.
As of 10/31/12:
Statistics
Number of Holdings | 19 | |||
Portfolio Turnover Rate | 12% |
Asset Class Weightings % of Investments1
Equity Funds – Large-Cap | 50.8% | |||
Equity Funds – International | 21.4% | |||
Equity Funds – Small-Cap | 12.6% | |||
Fixed-Income Funds – Intermediate-Term Bond | 7.3% | |||
Equity Funds – Global Real Estate | 4.4% | |||
Short-Term Investments | 2.0% | |||
Fixed-Income Funds – International Bond | 0.8% | |||
Fixed-Income Funds – Inflation-Protected Bond | 0.7% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Core Equity Fund | 13.1% | |||
Laudus Growth Investors U.S. Large Cap Growth Fund | 13.0% | |||
Schwab S&P 500 Index Fund | 11.8% | |||
Schwab Small-Cap Equity Fund | 8.2% | |||
Laudus International MarketMasters Fund, Select Shares | 8.1% | |||
TCW Relative Value Large Cap Fund | 6.8% | |||
Schwab Dividend Equity Fund | 6.0% | |||
Schwab Total Bond Market Fund | 5.3% | |||
Schwab Global Real Estate Fund | 4.5% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.4% | |||
Total | 81.2% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. | |
3 | The holdings listed exclude any temporary liquidity investments. |
20 Schwab Target Funds
Table of Contents
Schwab Target 2040 Fund
Performance and Fund Facts as of 10/31/12
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.
July 1, 2005 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctst40f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2040 Fund (7/1/05) | 11.33 | % | 0.99 | % | 5.26 | % | |||||||||
Target 2040 Composite Index3 | 11.49 | % | 0.97 | % | 5.27 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 14.73 | % | 0.76 | % | 4.92 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.38 | % | 5.57 | % | |||||||||
Fund Category: Morningstar Target-Date 2036-2040 | 9.88 | % | -1.18 | % | 3.57 | % |
Fund Expense Ratios4: Net 0.84%; Gross 0.90%
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. 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. |
Schwab Target Funds 21
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2012 and held through October 31, 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 5/1/12 | at 10/31/12 | 5/1/12–10/31/12 | |||||||||||||
Schwab Target 2010 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 1,019.30 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 | |||||||||
Schwab Target 2015 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 1,018.30 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 | |||||||||
Schwab Target 2020 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 1,017.90 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 | |||||||||
Schwab Target 2025 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 1,016.50 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 | |||||||||
Schwab Target 2030 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 1,015.50 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 | |||||||||
Schwab Target 2035 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 1,013.90 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 | |||||||||
Schwab Target 2040 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 1,013.60 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. The expenses incurred by the underlying funds in which the funds invest are not included in this ratio. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 366 days of the fiscal year. |
22 Schwab Target Funds
Table of Contents
Schwab Target 2010 Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.56 | 10.34 | 9.46 | 8.76 | 12.65 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.23 | 0.23 | 0.28 | 0.32 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.57 | 0.24 | 0.89 | 0.75 | (3.73 | ) | ||||||||||||||||
Total from investment operations | 0.79 | 0.47 | 1.12 | 1.03 | (3.41 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.25 | ) | (0.24 | ) | (0.33 | ) | (0.38 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.10 | ) | ||||||||||||||||
Total distributions | (0.25 | ) | (0.25 | ) | (0.24 | ) | (0.33 | ) | (0.48 | ) | ||||||||||||
Net asset value at end of period | 11.10 | 10.56 | 10.34 | 9.46 | 8.76 | |||||||||||||||||
Total return (%) | 7.63 | 4.63 | 1 | 11.99 | 12.24 | (27.87 | ) | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses2 | — | — | 0.00 | 3 | 0.03 | 4 | 0.06 | |||||||||||||||
Gross operating expenses2 | 0.18 | 0.14 | 0.16 | 0.16 | 0.11 | |||||||||||||||||
Net investment income (loss) | 1.95 | 2.11 | 2.21 | 3.04 | 2.89 | |||||||||||||||||
Portfolio turnover rate | 13 | 11 | 24 | 47 | 50 | 5 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 60 | 64 | 73 | 75 | 80 |
1 Includes proceeds from a litigation settlement related to an affiliated underlying fund. Without the litigation proceeds, performance would have been lower.
2 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
3 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
4 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
5 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.
See financial notes 23
Table of Contents
Schwab Target 2010 Fund
Portfolio Holdings as of October 31, 2012
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 | .4% | Other Investment Companies | 48,353,413 | 57,463,094 | ||||||||
3 | .7% | Short-Term Investments | 2,228,039 | 2,228,039 | ||||||||
100 | .1% | Total Investments | 50,581,452 | 59,691,133 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (65,898 | ) | ||||||||
100 | .0% | Total Net Assets | 59,625,235 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.4% of net assets | ||||||||
Equity Funds 39.5% | ||||||||
Global Real Estate 2.0% | ||||||||
Schwab Global Real Estate Fund (a) | 177,346 | 1,184,668 | ||||||
International 9.4% | ||||||||
American Century International Growth Fund, Institutional Shares | 103,954 | 1,134,140 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 116,581 | 2,218,538 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 26,234 | 245,026 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 117,378 | 842,777 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 88,054 | 1,180,809 | ||||||
5,621,290 | ||||||||
Large-Cap 22.5% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a)* | 253,807 | 3,591,368 | ||||||
Schwab Core Equity Fund (a) | 176,428 | 3,316,855 | ||||||
Schwab Dividend Equity Fund (a) | 90,825 | 1,318,783 | ||||||
Schwab S&P 500 Index Fund (a) | 146,513 | 3,274,559 | ||||||
TCW Relative Value Large Cap Fund | 128,288 | 1,912,775 | ||||||
13,414,340 | ||||||||
Small-Cap 5.6% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 85,620 | 1,141,309 | ||||||
Schwab Small-Cap Equity Fund (a) | 122,940 | 2,178,492 | ||||||
3,319,801 | ||||||||
23,540,099 | ||||||||
Fixed-Income Funds 53.6% | ||||||||
Inflation-Protected Bond 4.2% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (a) | 204,985 | 2,513,120 | ||||||
Intermediate-Term Bond 34.5% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 183,656 | 2,352,639 | ||||||
PIMCO Total Return Fund, Institutional Shares | 355,863 | 4,124,452 | ||||||
Schwab Premier Income Fund (a) | 247,103 | 2,619,287 | ||||||
Schwab Total Bond Market Fund (a) | 1,177,680 | 11,482,377 | ||||||
20,578,755 | ||||||||
International Bond 2.1% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 103,637 | 1,240,537 | ||||||
Short-Term Bond 12.8% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 817,827 | 7,622,152 | ||||||
31,954,564 | ||||||||
Money Market Fund 3.3% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 1,968,431 | 1,968,431 | ||||||
Total Other Investment Companies | ||||||||
(Cost $48,353,413) | 57,463,094 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.7% of net assets | ||||||||
Time Deposits 3.7% | ||||||||
BNP Paribas | ||||||||
0.03%, 11/01/12 | 437,221 | 437,221 | ||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 1,790,818 | 1,790,818 | ||||||
Total Short-Term Investments | ||||||||
(Cost $2,228,039) | 2,228,039 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $51,519,195 and the unrealized appreciation and depreciation were $8,171,938 and ($0), respectively, with a net unrealized appreciation of $8,171,938.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
24 See financial notes
Table of Contents
Schwab Target 2010 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $57,463,094 | $— | $— | $57,463,094 | ||||||||||||
Short-Term Investments1 | — | 2,228,039 | — | 2,228,039 | ||||||||||||
Total | $57,463,094 | $2,228,039 | $— | $59,691,133 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 25
Table of Contents
Schwab Target 2010 Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $39,288,739) | $46,758,279 | |||||
Investments in unaffiliated issuers, at value (cost $11,292,713) | + | 12,932,854 | ||||
Total investments, at value (cost $50,581,452) | 59,691,133 | |||||
Receivables: | ||||||
Investments sold | 50,000 | |||||
Dividends | 45,110 | |||||
Fund shares sold | 8,728 | |||||
Due from investment adviser | 1,128 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 1,828 | ||||
Total assets | 59,797,929 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 137,486 | |||||
Accrued expenses | + | 35,208 | ||||
Total liabilities | 172,694 | |||||
Net Assets | ||||||
Total assets | 59,797,929 | |||||
Total liabilities | − | 172,694 | ||||
Net assets | $59,625,235 | |||||
Net Assets by Source | ||||||
Capital received from investors | 68,628,712 | |||||
Net investment income not yet distributed | 692,441 | |||||
Net realized capital losses | (18,805,599 | ) | ||||
Net unrealized capital gains | 9,109,681 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$59,625,235 | 5,372,117 | $11.10 |
26 See financial notes
Table of Contents
Schwab Target 2010 Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $898,388 | |||||
Dividends received from unaffiliated underlying funds | 323,958 | |||||
Interest | + | 498 | ||||
Total investment income | 1,222,844 | |||||
Expenses | ||||||
Professional fees | 35,996 | |||||
Registration fees | 24,122 | |||||
Portfolio accounting fees | 16,898 | |||||
Transfer agent fees | 13,253 | |||||
Shareholder reports | 10,661 | |||||
Trustees’ fees | 6,136 | |||||
Custodian fees | 4,461 | |||||
State filing fee reimbursement (Note 4) | (765 | ) | ||||
Other expenses | + | 2,222 | ||||
Total expenses | 112,984 | |||||
Expense reduction by CSIM1 | − | 112,984 | ||||
Net expenses | − | — | ||||
Net investment income | 1,222,844 | |||||
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* | 1,437,081 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 54,802 | ||||
Net realized gains | 1,641,572 | |||||
Net unrealized gains on affiliated underlying funds | 1,078,518 | |||||
Net unrealized gains on unaffiliated underlying funds | + | 692,372 | ||||
Net unrealized gains | + | 1,770,890 | ||||
Net realized and unrealized gains | 3,412,462 | |||||
Increase in net assets resulting from operations | $4,635,306 |
* | Includes $2,765 from a litigation settlement related to an affiliated underlying fund. | |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $765. See financial note 4 for additional information. |
See financial notes 27
Table of Contents
Schwab Target 2010 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $1,222,844 | $1,473,932 | ||||||||
Net realized gains | 1,641,572 | 1,864,017 | ||||||||
Net unrealized gains (losses) | + | 1,770,890 | (88,618 | ) | ||||||
Increase in net assets from operations | 4,635,306 | 3,249,331 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,479,450 | ) | ($1,782,231 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,010,257 | $10,890,550 | 1,007,663 | $10,502,110 | ||||||||||||||
Shares reinvested | 135,161 | 1,389,450 | 163,465 | 1,673,878 | ||||||||||||||
Shares redeemed | + | (1,834,755 | ) | (19,810,132 | ) | (2,213,519 | ) | (23,100,427 | ) | |||||||||
Net transactions in fund shares | (689,337 | ) | ($7,530,132 | ) | (1,042,391 | ) | ($10,924,439 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (689,337 | ) | (4,374,276 | ) | (1,042,391 | ) | (9,457,339 | ) | |||||||||
End of period | 5,372,117 | $59,625,235 | 6,061,454 | $63,999,511 | ||||||||||||||
Net investment income not yet distributed | $692,441 | $912,470 |
28 See financial notes
Table of Contents
Schwab Target 2015 Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 3/12/081– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
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) | 0.20 | 0.19 | 0.16 | 0.19 | 0.06 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.66 | 0.32 | 1.06 | 0.91 | (1.91 | ) | ||||||||||||||||
Total from investment operations | 0.86 | 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 | 11.13 | 10.48 | 10.16 | 9.09 | 8.15 | |||||||||||||||||
Total return (%) | 8.41 | 5.10 | 13.55 | 13.82 | (18.50 | )3 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses4 | — | — | 0.00 | 5 | 0.02 | 6 | 0.05 | 7 | ||||||||||||||
Gross operating expenses4 | 0.19 | 0.22 | 0.39 | 0.85 | 1.90 | 7 | ||||||||||||||||
Net investment income (loss) | 1.85 | 1.94 | 1.91 | 2.57 | 1.87 | 7 | ||||||||||||||||
Portfolio turnover rate | 13 | 16 | 13 | 39 | 35 | 3 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 70 | 53 | 37 | 17 | 6 |
1 Commencement of operations.
2 Amount less than $0.01.
3 Not annualized
4 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
5 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
6 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
7 Annualized
See financial notes 29
Table of Contents
Schwab Target 2015 Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .1% | Other Investment Companies | 58,351,616 | 66,908,256 | ||||||||
3 | .8% | Short-Term Investments | 2,655,793 | 2,655,793 | ||||||||
99 | .9% | Total Investments | 61,007,409 | 69,564,049 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 102,041 | |||||||||
100 | .0% | Total Net Assets | 69,666,090 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.1% of net assets | ||||||||
Equity Funds 49.4% | ||||||||
Global Real Estate 2.5% | ||||||||
Schwab Global Real Estate Fund (a) | 258,572 | 1,727,263 | ||||||
International 11.8% | ||||||||
American Century International Growth Fund, Institutional Shares | 153,915 | 1,679,209 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 166,741 | 3,173,074 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 37,971 | 354,653 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 179,270 | 1,287,162 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 127,797 | 1,713,760 | ||||||
8,207,858 | ||||||||
Large-Cap 28.1% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a)* | 366,369 | 5,184,123 | ||||||
Schwab Core Equity Fund (a) | 255,575 | 4,804,802 | ||||||
Schwab Dividend Equity Fund (a) | 146,381 | 2,125,457 | ||||||
Schwab S&P 500 Index Fund (a) | 211,081 | 4,717,671 | ||||||
TCW Relative Value Large Cap Fund | 185,316 | 2,763,066 | ||||||
19,595,119 | ||||||||
Small-Cap 7.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 125,994 | 1,679,494 | ||||||
Schwab Small-Cap Equity Fund (a) | 178,503 | 3,163,078 | ||||||
4,842,572 | ||||||||
34,372,812 | ||||||||
Fixed-Income Funds 45.6% | ||||||||
Inflation-Protected Bond 3.2% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (a) | 178,532 | 2,188,797 | ||||||
Intermediate-Term Bond 31.7% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 203,736 | 2,609,859 | ||||||
PIMCO Total Return Fund, Institutional Shares | 353,419 | 4,096,128 | ||||||
Schwab Premier Income Fund (a) | 246,466 | 2,612,543 | ||||||
Schwab Total Bond Market Fund (a) | 1,307,532 | 12,748,440 | ||||||
22,066,970 | ||||||||
International Bond 2.1% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 124,364 | 1,488,634 | ||||||
Short-Term Bond 8.6% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 643,712 | 5,999,392 | ||||||
31,743,793 | ||||||||
Money Market Fund 1.1% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 791,651 | 791,651 | ||||||
Total Other Investment Companies | ||||||||
(Cost $58,351,616) | 66,908,256 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.8% of net assets | ||||||||
Time Deposits 3.8% | ||||||||
Bank of Montreal | ||||||||
0.03%, 11/01/12 | 2,088,717 | 2,088,717 | ||||||
Royal Bank of Canada | ||||||||
0.03%, 11/01/12 | 567,076 | 567,076 | ||||||
Total Short-Term Investments | ||||||||
(Cost $2,655,793) | 2,655,793 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $61,468,712 and the unrealized appreciation and depreciation were $8,095,337 and ($0), respectively, with a net unrealized appreciation of $8,095,337.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
30 See financial notes
Table of Contents
Schwab Target 2015 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $66,908,256 | $— | $— | $66,908,256 | ||||||||||||
Short-Term Investments1 | — | 2,655,793 | — | 2,655,793 | ||||||||||||
Total | $66,908,256 | $2,655,793 | $— | $69,564,049 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 31
Table of Contents
Schwab Target 2015 Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $46,697,055) | $54,046,234 | |||||
Investments in unaffiliated issuers, at value (cost $14,310,354) | + | 15,517,815 | ||||
Total investments, at value (cost $61,007,409) | 69,564,049 | |||||
Receivables: | ||||||
Fund shares sold | 183,833 | |||||
Dividends | 46,257 | |||||
Due from investment adviser | 851 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 1,067 | ||||
Total assets | 69,796,059 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 95,091 | |||||
Accrued expenses | + | 34,878 | ||||
Total liabilities | 129,969 | |||||
Net Assets | ||||||
Total assets | 69,796,059 | |||||
Total liabilities | − | 129,969 | ||||
Net assets | $69,666,090 | |||||
Net Assets by Source | ||||||
Capital received from investors | 61,367,703 | |||||
Net investment income not yet distributed | 644,418 | |||||
Net realized capital losses | (902,671 | ) | ||||
Net unrealized capital gains | 8,556,640 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$69,666,090 | 6,261,098 | $11.13 |
32 See financial notes
Table of Contents
Schwab Target 2015 Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $851,202 | |||||
Dividends received from unaffiliated underlying funds | 275,899 | |||||
Interest | + | 568 | ||||
Total investment income | 1,127,669 | |||||
Expenses | ||||||
Professional fees | 36,353 | |||||
Registration fees | 24,020 | |||||
Portfolio accounting fees | 16,859 | |||||
Transfer agent fees | 13,112 | |||||
Shareholder reports | 10,280 | |||||
Trustees’ fees | 6,077 | |||||
Custodian fees | 4,607 | |||||
State filing fee reimbursement (Note 4) | (178 | ) | ||||
Other expenses | + | 1,966 | ||||
Total expenses | 113,096 | |||||
Expense reduction by CSIM1 | − | 113,096 | ||||
Net expenses | − | — | ||||
Net investment income | 1,127,669 | |||||
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 | 58,178 | |||||
Net realized losses on sales of unaffiliated underlying funds | + | (24,215 | ) | |||
Net realized gains | 158,165 | |||||
Net unrealized gains on affiliated underlying funds | 2,743,443 | |||||
Net unrealized gains on unaffiliated underlying funds | + | 865,243 | ||||
Net unrealized gains | + | 3,608,686 | ||||
Net realized and unrealized gains | 3,766,851 | |||||
Increase in net assets resulting from operations | $4,894,520 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $178. See financial note 4 for additional information. |
See financial notes 33
Table of Contents
Schwab Target 2015 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $1,127,669 | $923,076 | ||||||||
Net realized gains (losses) | 158,165 | (16,926 | ) | |||||||
Net unrealized gains | + | 3,608,686 | 1,064,571 | |||||||
Increase in net assets from operations | 4,894,520 | 1,970,721 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,073,035 | ) | ($789,680 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,292,650 | $24,620,260 | 2,925,717 | $30,532,243 | ||||||||||||||
Shares reinvested | 100,440 | 1,025,491 | 74,372 | 760,827 | ||||||||||||||
Shares redeemed | + | (1,182,917 | ) | (12,715,068 | ) | (1,635,376 | ) | (17,009,209 | ) | |||||||||
Net transactions in fund shares | 1,210,173 | $12,930,683 | 1,364,713 | $14,283,861 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 1,210,173 | 16,752,168 | 1,364,713 | 15,464,902 | |||||||||||||
End of period | 6,261,098 | $69,666,090 | 5,050,925 | $52,913,922 | ||||||||||||||
Net investment income not yet distributed | $644,418 | $561,631 |
34 See financial notes
Table of Contents
Schwab Target 2020 Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.13 | 10.80 | 9.63 | 8.59 | 12.88 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.22 | 0.20 | 0.24 | 0.30 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.82 | 0.34 | 1.18 | 1.08 | (4.11 | ) | ||||||||||||||||
Total from investment operations | 1.04 | 0.56 | 1.38 | 1.32 | (3.81 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.23 | ) | (0.23 | ) | (0.21 | ) | (0.28 | ) | (0.38 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.10 | ) | ||||||||||||||||
Total distributions | (0.23 | ) | (0.23 | ) | (0.21 | ) | (0.28 | ) | (0.48 | ) | ||||||||||||
Net asset value at end of period | 11.94 | 11.13 | 10.80 | 9.63 | 8.59 | |||||||||||||||||
Total return (%) | 9.52 | 5.18 | 14.47 | 15.89 | (30.59 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | 0.00 | 2 | 0.00 | 2 | 0.02 | 3 | 0.04 | ||||||||||||||
Gross operating expenses1 | 0.06 | 0.06 | 0.07 | 0.09 | 0.08 | |||||||||||||||||
Net investment income (loss) | 1.89 | 1.92 | 2.01 | 2.75 | 2.67 | |||||||||||||||||
Portfolio turnover rate | 13 | 15 | 15 | 48 | 34 | 4 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 306 | 273 | 240 | 198 | 163 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
2 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
3 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
4 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.
See financial notes 35
Table of Contents
Schwab Target 2020 Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .1% | Other Investment Companies | 247,109,939 | 299,684,961 | ||||||||
2 | .0% | Short-Term Investment | 6,127,783 | 6,127,783 | ||||||||
100 | .1% | Total Investments | 253,237,722 | 305,812,744 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (163,163 | ) | ||||||||
100 | .0% | Total Net Assets | 305,649,581 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 98.1% of net assets | ||||||||
Equity Funds 61.5% | ||||||||
Global Real Estate 3.1% | ||||||||
Schwab Global Real Estate Fund (a) | 1,411,094 | 9,426,105 | ||||||
International 14.7% | ||||||||
American Century International Growth Fund, Institutional Shares | 792,404 | 8,645,130 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 896,916 | 17,068,305 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 230,704 | 2,154,776 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 1,097,893 | 7,882,873 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 675,916 | 9,064,030 | ||||||
44,815,114 | ||||||||
Large-Cap 35.0% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a)* | 1,920,567 | 27,176,017 | ||||||
Schwab Core Equity Fund (a) | 1,506,321 | 28,318,832 | ||||||
Schwab Dividend Equity Fund (a) | 897,769 | 13,035,607 | ||||||
Schwab S&P 500 Index Fund (a) | 1,100,514 | 24,596,494 | ||||||
TCW Relative Value Large Cap Fund | 933,990 | 13,925,795 | ||||||
107,052,745 | ||||||||
Small-Cap 8.7% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 689,754 | 9,194,415 | ||||||
Schwab Small-Cap Equity Fund (a) | 974,191 | 17,262,660 | ||||||
26,457,075 | ||||||||
187,751,039 | ||||||||
Fixed-Income Funds 36.6% | ||||||||
Inflation-Protected Bond 2.7% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (a) | 678,365 | 8,316,759 | ||||||
Intermediate-Term Bond 28.6% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 601,877 | 7,710,047 | ||||||
PIMCO Total Return Fund, Institutional Shares | 1,254,936 | 14,544,709 | ||||||
Schwab Premier Income Fund (a) | 841,848 | 8,923,586 | ||||||
Schwab Total Bond Market Fund (a) | 5,768,889 | 56,246,669 | ||||||
87,425,011 | ||||||||
International Bond 2.3% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 581,669 | 6,962,580 | ||||||
Short-Term Bond 3.0% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 990,297 | 9,229,572 | ||||||
111,933,922 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $247,109,939) | 299,684,961 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.0% of net assets | ||||||||
Time Deposit 2.0% | ||||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 6,127,783 | 6,127,783 | ||||||
Total Short-Term Investment | ||||||||
(Cost $6,127,783) | 6,127,783 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $255,572,234 and the unrealized appreciation and depreciation were $50,868,108 and ($627,598), respectively, with a net unrealized appreciation of $50,240,510.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
36 See financial notes
Table of Contents
Schwab Target 2020 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $299,684,961 | $— | $— | $299,684,961 | ||||||||||||
Short-Term Investment1 | — | 6,127,783 | — | 6,127,783 | ||||||||||||
Total | $299,684,961 | $6,127,783 | $— | $305,812,744 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 37
Table of Contents
Schwab Target 2020 Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $201,181,486) | $245,795,250 | |||||
Investments in unaffiliated issuers, at value (cost $52,056,236) | + | 60,017,494 | ||||
Total investments, at value (cost $253,237,722) | 305,812,744 | |||||
Cash | 4,914 | |||||
Receivables: | ||||||
Fund shares sold | 458,840 | |||||
Dividends | 177,565 | |||||
Due from investment adviser | 1,254 | |||||
Prepaid expenses | + | 6,452 | ||||
Total assets | 306,461,769 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 761,311 | |||||
Accrued expenses | + | 50,877 | ||||
Total liabilities | 812,188 | |||||
Net Assets | ||||||
Total assets | 306,461,769 | |||||
Total liabilities | − | 812,188 | ||||
Net assets | $305,649,581 | |||||
Net Assets by Source | ||||||
Capital received from investors | 289,785,446 | |||||
Net investment income not yet distributed | 2,791,705 | |||||
Net realized capital losses | (39,502,592 | ) | ||||
Net unrealized capital gains | 52,575,022 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$305,649,581 | 25,588,203 | $11.94 |
38 See financial notes
Table of Contents
Schwab Target 2020 Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,384,750 | |||||
Dividends received from unaffiliated underlying funds | 1,075,136 | |||||
Interest | + | 1,328 | ||||
Total investment income | 5,461,214 | |||||
Expenses | ||||||
Professional fees | 38,794 | |||||
Registration fees | 31,487 | |||||
Shareholder reports | 31,158 | |||||
Transfer agent fees | 21,580 | |||||
Portfolio accounting fees | 21,443 | |||||
Custodian fees | 8,149 | |||||
Trustees’ fees | 7,638 | |||||
State filing fee reimbursement (Note 4) | (2,967 | ) | ||||
Other expenses | + | 7,004 | ||||
Total expenses | 164,286 | |||||
Expense reduction by CSIM1 | − | 164,286 | ||||
Net expenses | − | — | ||||
Net investment income | 5,461,214 | |||||
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* | 1,527,959 | |||||
Net realized losses on sales of unaffiliated underlying funds | + | (16,659 | ) | |||
Net realized gains | 2,164,132 | |||||
Net unrealized gains on affiliated underlying funds | 14,302,127 | |||||
Net unrealized gains on unaffiliated underlying funds | + | 4,066,318 | ||||
Net unrealized gains | + | 18,368,445 | ||||
Net realized and unrealized gains | 20,532,577 | |||||
Increase in net assets resulting from operations | $25,993,791 |
* | Includes $2,327 from a litigation settlement related to an affiliated underlying fund. | |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $2,967. See financial note 4 for additional information. |
See financial notes 39
Table of Contents
Schwab Target 2020 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $5,461,214 | $5,133,317 | ||||||||
Net realized gains (losses) | 2,164,132 | (66,826 | ) | |||||||
Net unrealized gains | + | 18,368,445 | 7,056,875 | |||||||
Increase in net assets from operations | 25,993,791 | 12,123,366 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($5,540,387 | ) | ($5,113,390 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 4,916,576 | $56,647,459 | 6,727,716 | $75,400,663 | ||||||||||||||
Shares reinvested | 494,589 | 5,361,345 | 452,434 | 4,949,629 | ||||||||||||||
Shares redeemed | + | (4,343,392 | ) | (49,793,312 | ) | (4,872,189 | ) | (54,205,363 | ) | |||||||||
Net transactions in fund shares | 1,067,773 | $12,215,492 | 2,307,961 | $26,144,929 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 1,067,773 | 32,668,896 | 2,307,961 | 33,154,905 | |||||||||||||
End of period | 25,588,203 | $305,649,581 | 24,520,430 | $272,980,685 | ||||||||||||||
Net investment income not yet distributed | $2,791,705 | $2,735,899 |
40 See financial notes
Table of Contents
Schwab Target 2025 Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 3/12/081– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
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) | 0.19 | 0.19 | 0.16 | 0.17 | 0.05 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.89 | 0.38 | 1.24 | 1.21 | (2.06 | ) | ||||||||||||||||
Total from investment operations | 1.08 | 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 | 11.73 | 10.84 | 10.46 | 9.21 | 7.99 | |||||||||||||||||
Total return (%) | 10.14 | 5.44 | 15.34 | 17.61 | (20.10 | )2 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses3 | 0.00 | 4 | — | 0.00 | 4 | 0.01 | 5 | 0.04 | 6 | |||||||||||||
Gross operating expenses3 | 0.10 | 0.14 | 0.24 | 0.57 | 1.27 | 6 | ||||||||||||||||
Net investment income (loss) | 1.73 | 1.66 | 1.62 | 2.15 | 1.60 | 6 | ||||||||||||||||
Portfolio turnover rate | 13 | 9 | 13 | 44 | 3 | 2 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 141 | 104 | 63 | 26 | 8 |
1 Commencement of operations.
2 Not annualized.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
5 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
6 Annualized.
See financial notes 41
Table of Contents
Schwab Target 2025 Fund
Portfolio Holdings as of October 31, 2012
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 | 119,272,615 | 138,367,122 | ||||||||
1 | .9% | Short-Term Investment | 2,684,419 | 2,684,419 | ||||||||
99 | .8% | Total Investments | 121,957,034 | 141,051,541 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 261,452 | |||||||||
100 | .0% | Total Net Assets | 141,312,993 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.9% of net assets | ||||||||
Equity Funds 70.3% | ||||||||
Global Real Estate 3.5% | ||||||||
Schwab Global Real Estate Fund (a) | 738,602 | 4,933,862 | ||||||
International 16.8% | ||||||||
American Century International Growth Fund, Institutional Shares | 434,431 | 4,739,643 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 482,662 | 9,185,049 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 107,098 | 1,000,299 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 541,190 | 3,885,746 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 368,268 | 4,938,479 | ||||||
23,749,216 | ||||||||
Large-Cap 40.0% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a)* | 1,045,290 | 14,790,848 | ||||||
Schwab Core Equity Fund (a) | 756,512 | 14,222,420 | ||||||
Schwab Dividend Equity Fund (a) | 432,893 | 6,285,609 | ||||||
Schwab S&P 500 Index Fund (a) | 601,049 | 13,433,448 | ||||||
TCW Relative Value Large Cap Fund | 526,475 | 7,849,749 | ||||||
56,582,074 | ||||||||
Small-Cap 10.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 366,578 | 4,886,487 | ||||||
Schwab Small-Cap Equity Fund (a) | 517,658 | 9,172,902 | ||||||
14,059,389 | ||||||||
99,324,541 | ||||||||
Fixed-Income Funds 27.6% | ||||||||
Inflation-Protected Bond 1.9% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (a) | 218,488 | 2,678,662 | ||||||
Intermediate-Term Bond 24.0% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 179,074 | 2,293,940 | ||||||
PIMCO Total Return Fund, Institutional Shares | 459,208 | 5,322,217 | ||||||
Schwab Premier Income Fund (a) | 364,703 | 3,865,848 | ||||||
Schwab Total Bond Market Fund (a) | 2,309,976 | 22,522,269 | ||||||
34,004,274 | ||||||||
International Bond 1.7% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 197,130 | 2,359,645 | ||||||
39,042,581 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $119,272,615) | 138,367,122 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 1.9% of net assets | ||||||||
Time Deposit 1.9% | ||||||||
Royal Bank of Canada | ||||||||
0.03%, 11/01/12 | 2,684,419 | 2,684,419 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,684,419) | 2,684,419 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $123,043,601 and the unrealized appreciation and depreciation were $18,007,940 and ($0), respectively, with a net unrealized appreciation of $18,007,940.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
42 See financial notes
Table of Contents
Schwab Target 2025 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $138,367,122 | $— | $— | $138,367,122 | ||||||||||||
Short-Term Investment1 | — | 2,684,419 | — | 2,684,419 | ||||||||||||
Total | $138,367,122 | $2,684,419 | $— | $141,051,541 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 43
Table of Contents
Schwab Target 2025 Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $96,508,212) | $113,223,094 | |||||
Investments in unaffiliated issuers, at value (cost $25,448,822) | + | 27,828,447 | ||||
Total investments, at value (cost $121,957,034) | 141,051,541 | |||||
Receivables: | ||||||
Fund shares sold | 562,931 | |||||
Dividends | 66,952 | |||||
Due from investment adviser | 932 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 2,032 | ||||
Total assets | 141,684,390 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 240,000 | |||||
Fund shares redeemed | 92,837 | |||||
Accrued expenses | + | 38,560 | ||||
Total liabilities | 371,397 | |||||
Net Assets | ||||||
Total assets | 141,684,390 | |||||
Total liabilities | − | 371,397 | ||||
Net assets | $141,312,993 | |||||
Net Assets by Source | ||||||
Capital received from investors | 123,038,323 | |||||
Net investment income not yet distributed | 1,040,989 | |||||
Net realized capital losses | (1,860,826 | ) | ||||
Net unrealized capital gains | 19,094,507 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$141,312,993 | 12,051,294 | $11.73 |
44 See financial notes
Table of Contents
Schwab Target 2025 Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,758,351 | |||||
Dividends received from unaffiliated underlying funds | 355,615 | |||||
Interest | + | 634 | ||||
Total investment income | 2,114,600 | |||||
Expenses | ||||||
Professional fees | 37,225 | |||||
Registration fees | 25,648 | |||||
Portfolio accounting fees | 18,093 | |||||
Shareholder reports | 16,567 | |||||
Transfer agent fees | 15,654 | |||||
Trustees’ fees | 6,456 | |||||
Custodian fees | 5,457 | |||||
Interest expense | 12 | |||||
State filing fee reimbursement (Note 4) | (184 | ) | ||||
Other expenses | + | 3,083 | ||||
Total expenses | 128,011 | |||||
Expense reduction by CSIM1 | − | 127,999 | ||||
Net expenses | − | 12 | ||||
Net investment income | 2,114,588 | |||||
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 | (416,573 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (17,311 | ) | |||
Net realized losses | (170,384 | ) | ||||
Net unrealized gains on affiliated underlying funds | 7,742,662 | |||||
Net unrealized gains on unaffiliated underlying funds | + | 1,827,499 | ||||
Net unrealized gains | + | 9,570,161 | ||||
Net realized and unrealized gains | 9,399,777 | |||||
Increase in net assets resulting from operations | $11,514,365 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $184. See financial note 4 for additional information. |
See financial notes 45
Table of Contents
Schwab Target 2025 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $2,114,588 | $1,434,137 | ||||||||
Net realized losses | (170,384 | ) | (122,004 | ) | ||||||
Net unrealized gains | + | 9,570,161 | 1,690,609 | |||||||
Increase in net assets from operations | 11,514,365 | 3,002,742 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,878,136 | ) | ($1,192,290 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 4,252,040 | $48,020,992 | 4,868,311 | $53,244,649 | ||||||||||||||
Shares reinvested | 174,782 | 1,847,442 | 109,885 | 1,176,870 | ||||||||||||||
Shares redeemed | + | (1,997,080 | ) | (22,465,465 | ) | (1,355,247 | ) | (14,727,440 | ) | |||||||||
Net transactions in fund shares | 2,429,742 | $27,402,969 | 3,622,949 | $39,694,079 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 2,429,742 | 37,039,198 | 3,622,949 | 41,504,531 | |||||||||||||
End of period | 12,051,294 | $141,312,993 | 9,621,552 | $104,273,795 | ||||||||||||||
Net investment income not yet distributed | $1,040,989 | $757,736 |
46 See financial notes
Table of Contents
Schwab Target 2030 Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.43 | 11.05 | 9.69 | 8.51 | 13.15 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.19 | 0.19 | 0.17 | 0.20 | 0.28 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.99 | 0.38 | 1.36 | 1.23 | (4.47 | ) | ||||||||||||||||
Total from investment operations | 1.18 | 0.57 | 1.53 | 1.43 | (4.19 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.19 | ) | (0.17 | ) | (0.25 | ) | (0.35 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.10 | ) | ||||||||||||||||
Total distributions | (0.19 | ) | (0.19 | ) | (0.17 | ) | (0.25 | ) | (0.45 | ) | ||||||||||||
Net asset value at end of period | 12.42 | 11.43 | 11.05 | 9.69 | 8.51 | |||||||||||||||||
Total return (%) | 10.52 | 5.20 | 15.97 | 17.31 | (32.83 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | 0.00 | 2 | 0.01 | 3 | 0.03 | |||||||||||||||
Gross operating expenses1 | 0.05 | 0.05 | 0.08 | 0.11 | 0.10 | |||||||||||||||||
Net investment income (loss) | 1.62 | 1.60 | 1.64 | 2.37 | 2.35 | |||||||||||||||||
Portfolio turnover rate | 12 | 8 | 14 | 50 | 31 | 4 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 444 | 372 | 296 | 200 | 129 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
2 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
3 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
4 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.
See financial notes 47
Table of Contents
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2012
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 | 352,619,475 | 434,731,447 | ||||||||
2 | .0% | Short-Term Investment | 8,919,951 | 8,919,951 | ||||||||
99 | .9% | Total Investments | 361,539,426 | 443,651,398 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 405,649 | |||||||||
100 | .0% | Total Net Assets | 444,057,047 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.9% of net assets | ||||||||
Equity Funds 77.7% | ||||||||
Global Real Estate 3.9% | ||||||||
Schwab Global Real Estate Fund (a) | 2,551,100 | 17,041,346 | ||||||
International 18.6% | ||||||||
American Century International Growth Fund, Institutional Shares | 1,491,479 | 16,272,036 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 1,659,346 | 31,577,352 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 428,307 | 4,000,384 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 1,925,261 | 13,823,377 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 1,250,551 | 16,769,891 | ||||||
82,443,040 | ||||||||
Large-Cap 44.2% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a)* | 3,513,555 | 49,716,803 | ||||||
Schwab Core Equity Fund (a) | 2,778,306 | 52,232,149 | ||||||
Schwab Dividend Equity Fund (a) | 1,621,619 | 23,545,902 | ||||||
Schwab S&P 500 Index Fund (a) | 2,009,168 | 44,904,897 | ||||||
TCW Relative Value Large Cap Fund | 1,741,843 | 25,970,884 | ||||||
196,370,635 | ||||||||
Small-Cap 11.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 1,283,238 | 17,105,565 | ||||||
Schwab Small-Cap Equity Fund (a) | 1,799,946 | 31,895,052 | ||||||
49,000,617 | ||||||||
344,855,638 | ||||||||
Fixed-Income Funds 20.2% | ||||||||
Inflation-Protected Bond 1.4% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (a) | 515,949 | 6,325,538 | ||||||
Intermediate-Term Bond 17.2% | ||||||||
PIMCO Total Return Fund, Institutional Shares | 1,108,184 | 12,843,849 | ||||||
Schwab Premier Income Fund (a) | 875,743 | 9,282,881 | ||||||
Schwab Total Bond Market Fund (a) | 5,559,975 | 54,209,758 | ||||||
76,336,488 | ||||||||
International Bond 1.6% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 602,655 | 7,213,783 | ||||||
89,875,809 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $352,619,475) | 434,731,447 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.0% of net assets | ||||||||
Time Deposit 2.0% | ||||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 8,919,951 | 8,919,951 | ||||||
Total Short-Term Investment | ||||||||
(Cost $8,919,951) | 8,919,951 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $365,735,788 and the unrealized appreciation and depreciation were $78,158,964 and ($243,354), respectively, with a net unrealized appreciation of $77,915,610.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
48 See financial notes
Table of Contents
Schwab Target 2030 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $434,731,447 | $— | $— | $434,731,447 | ||||||||||||
Short-Term Investment1 | — | 8,919,951 | — | 8,919,951 | ||||||||||||
Total | $434,731,447 | $8,919,951 | $— | $443,651,398 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 49
Table of Contents
Schwab Target 2030 Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $291,282,082) | $362,874,787 | |||||
Investments in unaffiliated issuers, at value (cost $70,257,344) | + | 80,776,611 | ||||
Total investments, at value (cost $361,539,426) | 443,651,398 | |||||
Receivables: | ||||||
Fund shares sold | 1,112,226 | |||||
Dividends | 162,225 | |||||
Due from investment adviser | 1,579 | |||||
Interest | 8 | |||||
Prepaid expenses | + | 8,198 | ||||
Total assets | 444,935,634 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 470,000 | |||||
Fund shares redeemed | 351,869 | |||||
Accrued expenses | + | 56,718 | ||||
Total liabilities | 878,587 | |||||
Net Assets | ||||||
Total assets | 444,935,634 | |||||
Total liabilities | − | 878,587 | ||||
Net assets | $444,057,047 | |||||
Net Assets by Source | ||||||
Capital received from investors | 393,483,479 | |||||
Net investment income not yet distributed | 2,920,540 | |||||
Net realized capital losses | (34,458,944 | ) | ||||
Net unrealized capital gains | 82,111,972 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$444,057,047 | 35,762,653 | $12.42 |
50 See financial notes
Table of Contents
Schwab Target 2030 Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $5,792,147 | |||||
Dividends received from unaffiliated underlying funds | 842,423 | |||||
Interest | + | 2,031 | ||||
Total investment income | 6,636,601 | |||||
Expenses | ||||||
Shareholder reports | 45,033 | |||||
Professional fees | 40,492 | |||||
Registration fees | 37,251 | |||||
Transfer agent fees | 29,678 | |||||
Portfolio accounting fees | 23,836 | |||||
Custodian fees | 10,418 | |||||
Trustees’ fees | 8,378 | |||||
State filing fee reimbursement (Note 4) | (3,461 | ) | ||||
Other expenses | + | 9,333 | ||||
Total expenses | 200,958 | |||||
Expense reduction by CSIM1 | − | 200,958 | ||||
Net expenses | − | — | ||||
Net investment income | 6,636,601 | |||||
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* | (1,303,151 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (37,840 | ) | |||
Net realized losses | (485,756 | ) | ||||
Net unrealized gains on affiliated underlying funds | 28,030,927 | |||||
Net unrealized gains on unaffiliated underlying funds | + | 6,017,537 | ||||
Net unrealized gains | + | 34,048,464 | ||||
Net realized and unrealized gains | 33,562,708 | |||||
Increase in net assets resulting from operations | $40,199,309 |
* | Includes $1,189 from a litigation settlement related to an affiliated underlying fund. | |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $3,461. See financial note 4 for additional information. |
See financial notes 51
Table of Contents
Schwab Target 2030 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $6,636,601 | $5,671,726 | ||||||||
Net realized losses | (485,756 | ) | (992,639 | ) | ||||||
Net unrealized gains | + | 34,048,464 | 9,985,667 | |||||||
Increase in net assets from operations | 40,199,309 | 14,664,754 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($6,263,907 | ) | ($5,459,742 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,178,626 | $97,318,546 | 10,393,929 | $120,477,375 | ||||||||||||||
Shares reinvested | 547,142 | 6,095,164 | 465,434 | 5,296,644 | ||||||||||||||
Shares redeemed | + | (5,482,400 | ) | (64,862,336 | ) | (5,173,535 | ) | (59,799,151 | ) | |||||||||
Net transactions in fund shares | 3,243,368 | $38,551,374 | 5,685,828 | $65,974,868 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 3,243,368 | 72,486,776 | 5,685,828 | 75,179,880 | |||||||||||||
End of period | 35,762,653 | $444,057,047 | 32,519,285 | $371,570,271 | ||||||||||||||
Net investment income not yet distributed | $2,920,540 | $2,407,745 |
52 See financial notes
Table of Contents
Schwab Target 2035 Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 3/12/081– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
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) | 0.16 | 0.16 | 0.13 | 0.15 | 0.04 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.99 | 0.38 | 1.33 | 1.23 | (2.28 | ) | ||||||||||||||||
Total from investment operations | 1.15 | 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 | 11.69 | 10.70 | 10.32 | 9.00 | 7.76 | |||||||||||||||||
Total return (%) | 10.89 | 5.27 | 16.29 | 18.22 | (22.40 | )2 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses3 | — | — | 0.00 | 4 | 0.01 | 5 | 0.02 | 6 | ||||||||||||||
Gross operating expenses3 | 0.13 | 0.17 | 0.30 | 0.67 | 1.57 | 6 | ||||||||||||||||
Net investment income (loss) | 1.45 | 1.41 | 1.38 | 1.92 | 1.32 | 6 | ||||||||||||||||
Portfolio turnover rate | 11 | 4 | 14 | 49 | 7 | 2 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 111 | 77 | 49 | 22 | 6 |
1 Commencement of operations.
2 Not annualized.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
5 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
6 Annualized
See financial notes 53
Table of Contents
Schwab Target 2035 Fund
Portfolio Holdings as of October 31, 2012
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% | Other Investment Companies | 91,882,699 | 108,264,956 | ||||||||
2 | .0% | Short-Term Investment | 2,237,202 | 2,237,202 | ||||||||
100 | .0% | Total Investments | 94,119,901 | 110,502,158 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 7,641 | |||||||||
100 | .0% | Total Net Assets | 110,509,799 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 98.0% of net assets | ||||||||
Equity Funds 84.6% | ||||||||
Global Real Estate 4.2% | ||||||||
Schwab Global Real Estate Fund (a) | 696,043 | 4,649,570 | ||||||
International 20.2% | ||||||||
American Century International Growth Fund, Institutional Shares | 406,434 | 4,434,190 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 452,339 | 8,608,006 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 103,661 | 968,190 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 524,753 | 3,767,724 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 342,672 | 4,595,234 | ||||||
22,373,344 | ||||||||
Large-Cap 48.2% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a)* | 974,826 | 13,793,792 | ||||||
Schwab Core Equity Fund (a) | 721,316 | 13,560,739 | ||||||
Schwab Dividend Equity Fund (a) | 416,050 | 6,041,052 | ||||||
Schwab S&P 500 Index Fund (a) | 562,467 | 12,571,145 | ||||||
TCW Relative Value Large Cap Fund | 486,459 | 7,253,107 | ||||||
53,219,835 | ||||||||
Small-Cap 12.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 346,414 | 4,617,693 | ||||||
Schwab Small-Cap Equity Fund (a) | 486,881 | 8,627,525 | ||||||
13,245,218 | ||||||||
93,487,967 | ||||||||
Fixed-Income Funds 13.4% | ||||||||
Inflation-Protected Bond 0.9% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (a) | 82,497 | 1,011,407 | ||||||
Intermediate-Term Bond 11.5% | ||||||||
PIMCO Total Return Fund, Institutional Shares | 185,569 | 2,150,745 | ||||||
Schwab Premier Income Fund (a) | 153,909 | 1,631,434 | ||||||
Schwab Total Bond Market Fund (a) | 912,826 | 8,900,054 | ||||||
12,682,233 | ||||||||
International Bond 1.0% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 90,505 | 1,083,349 | ||||||
14,776,989 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $91,882,699) | 108,264,956 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.0% of net assets | ||||||||
Time Deposit 2.0% | ||||||||
Royal Bank of Canada | ||||||||
0.03%, 11/01/12 | 2,237,202 | 2,237,202 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,237,202) | 2,237,202 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $95,028,266 and the unrealized appreciation and depreciation were $15,473,892 and ($0), respectively, with a net unrealized appreciation of $15,473,892.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
54 See financial notes
Table of Contents
Schwab Target 2035 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $108,264,956 | $— | $— | $108,264,956 | ||||||||||||
Short-Term Investment1 | — | 2,237,202 | — | 2,237,202 | ||||||||||||
Total | $108,264,956 | $2,237,202 | $— | $110,502,158 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 55
Table of Contents
Schwab Target 2035 Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $75,415,539) | $89,831,680 | |||||
Investments in unaffiliated issuers, at value (cost $18,704,362) | + | 20,670,478 | ||||
Total investments, at value (cost $94,119,901) | 110,502,158 | |||||
Receivables: | ||||||
Fund shares sold | 275,412 | |||||
Dividends | 26,640 | |||||
Due from investment adviser | 978 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 1,548 | ||||
Total assets | 110,806,738 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 135,000 | |||||
Fund shares redeemed | 124,151 | |||||
Accrued expenses | + | 37,788 | ||||
Total liabilities | 296,939 | |||||
Net Assets | ||||||
Total assets | 110,806,738 | |||||
Total liabilities | − | 296,939 | ||||
Net assets | $110,509,799 | |||||
Net Assets by Source | ||||||
Capital received from investors | 95,076,811 | |||||
Net investment income not yet distributed | 557,615 | |||||
Net realized capital losses | (1,506,884 | ) | ||||
Net unrealized capital gains | 16,382,257 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$110,509,799 | 9,453,479 | $11.69 |
56 See financial notes
Table of Contents
Schwab Target 2035 Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,181,349 | |||||
Dividends received from unaffiliated underlying funds | 158,078 | |||||
Interest | + | 512 | ||||
Total investment income | 1,339,939 | |||||
Expenses | ||||||
Professional fees | 36,800 | |||||
Registration fees | 23,862 | |||||
Portfolio accounting fees | 17,438 | |||||
Shareholder reports | 15,695 | |||||
Transfer agent fees | 14,613 | |||||
Trustees’ fees | 6,257 | |||||
Custodian fees | 4,952 | |||||
State filing fee reimbursement (Note 4) | (193 | ) | ||||
Other expenses | + | 2,505 | ||||
Total expenses | 121,929 | |||||
Expense reduction by CSIM1 | − | 121,929 | ||||
Net expenses | − | — | ||||
Net investment income | 1,339,939 | |||||
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 | (371,999 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (12,458 | ) | |||
Net realized losses | (188,323 | ) | ||||
Net unrealized gains on affiliated underlying funds | 6,719,027 | |||||
Net unrealized gains on unaffiliated underlying funds | + | 1,474,533 | ||||
Net unrealized gains | + | 8,193,560 | ||||
Net realized and unrealized gains | 8,005,237 | |||||
Increase in net assets resulting from operations | $9,345,176 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $193. See financial note 4 for additional information. |
See financial notes 57
Table of Contents
Schwab Target 2035 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $1,339,939 | $927,810 | ||||||||
Net realized gains (losses) | (188,323 | ) | 18,391 | |||||||
Net unrealized gains | + | 8,193,560 | 1,171,771 | |||||||
Increase in net assets from operations | 9,345,176 | 2,117,972 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,173,912 | ) | ($819,461 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,123,482 | $35,158,038 | 3,517,865 | $38,278,820 | ||||||||||||||
Shares reinvested | 110,095 | 1,149,391 | 74,569 | 798,641 | ||||||||||||||
Shares redeemed | + | (1,018,757 | ) | (11,399,175 | ) | (1,062,462 | ) | (11,556,596 | ) | |||||||||
Net transactions in fund shares | 2,214,820 | $24,908,254 | 2,529,972 | $27,520,865 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 2,214,820 | 33,079,518 | 2,529,972 | 28,819,376 | |||||||||||||
End of period | 9,453,479 | $110,509,799 | 7,238,659 | $77,430,281 | ||||||||||||||
Net investment income not yet distributed | $557,615 | $364,231 |
58 See financial notes
Table of Contents
Schwab Target 2040 Fund
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.55 | 11.16 | 9.71 | 8.48 | 13.45 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.17 | 0.17 | 0.15 | 0.18 | 0.28 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.12 | 0.40 | 1.46 | 1.27 | (4.80 | ) | ||||||||||||||||
Total from investment operations | 1.29 | 0.57 | 1.61 | 1.45 | (4.52 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.17 | ) | (0.18 | ) | (0.16 | ) | (0.22 | ) | (0.36 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.09 | ) | ||||||||||||||||
Total distributions | (0.17 | ) | (0.18 | ) | (0.16 | ) | (0.22 | ) | (0.45 | ) | ||||||||||||
Net asset value at end of period | 12.67 | 11.55 | 11.16 | 9.71 | 8.48 | |||||||||||||||||
Total return (%) | 11.33 | 5.08 | 16.71 | 17.66 | (34.60 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | 0.00 | 2 | 0.00 | 2,3 | 0.01 | |||||||||||||||
Gross operating expenses1 | 0.06 | 0.06 | 0.10 | 0.15 | 0.15 | |||||||||||||||||
Net investment income (loss) | 1.42 | 1.42 | 1.44 | 2.15 | 2.22 | |||||||||||||||||
Portfolio turnover rate | 12 | 3 | 15 | 51 | 36 | 4 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 435 | 342 | 259 | 163 | 94 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
2 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
3 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
4 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.
See financial notes 59
Table of Contents
Schwab Target 2040 Fund
Portfolio Holdings as of October 31, 2012
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 | 346,645,692 | 425,829,366 | ||||||||
2 | .0% | Short-Term Investment | 8,664,678 | 8,664,678 | ||||||||
99 | .9% | Total Investments | 355,310,370 | 434,494,044 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 330,258 | |||||||||
100 | .0% | Total Net Assets | 434,824,302 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.9% of net assets | ||||||||
Equity Funds 89.1% | ||||||||
Global Real Estate 4.5% | ||||||||
Schwab Global Real Estate Fund (a) | 2,884,647 | 19,269,443 | ||||||
International 21.3% | ||||||||
American Century International Growth Fund, Institutional Shares | 1,653,454 | 18,039,186 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 1,853,396 | 35,270,134 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 470,587 | 4,395,286 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 2,259,474 | 16,223,026 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 1,402,413 | 18,806,364 | ||||||
92,733,996 | ||||||||
Large-Cap 50.7% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a)* | 4,006,125 | 56,686,668 | ||||||
Schwab Core Equity Fund (a) | 3,039,424 | 57,141,171 | ||||||
Schwab Dividend Equity Fund (a) | 1,795,863 | 26,075,929 | ||||||
Schwab S&P 500 Index Fund (a) | 2,293,002 | 51,248,602 | ||||||
TCW Relative Value Large Cap Fund | 1,969,945 | 29,371,873 | ||||||
220,524,243 | ||||||||
Small-Cap 12.6% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 1,433,445 | 19,107,827 | ||||||
Schwab Small-Cap Equity Fund (a) | 2,021,083 | 35,813,590 | ||||||
54,921,417 | ||||||||
387,449,099 | ||||||||
Fixed-Income Funds 8.8% | ||||||||
Inflation-Protected Bond 0.7% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (a) | 259,785 | 3,184,966 | ||||||
Intermediate-Term Bond 7.3% | ||||||||
PIMCO Total Return Fund, Institutional Shares | 415,000 | 4,809,854 | ||||||
Schwab Premier Income Fund (a) | 379,919 | 4,027,144 | ||||||
Schwab Total Bond Market Fund (a) | 2,359,356 | 23,003,724 | ||||||
31,840,722 | ||||||||
International Bond 0.8% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 280,249 | 3,354,579 | ||||||
38,380,267 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $346,645,692) | 425,829,366 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.0% of net assets | ||||||||
Time Deposit 2.0% | ||||||||
Royal Bank of Canada | ||||||||
0.03%, 11/01/12 | 8,664,678 | 8,664,678 | ||||||
Total Short-Term Investment | ||||||||
(Cost $8,664,678) | 8,664,678 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $359,699,714 and the unrealized appreciation and depreciation were $74,794,330 and ($0), respectively, with a net unrealized appreciation of $74,794,330.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
60 See financial notes
Table of Contents
Schwab Target 2040 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $425,829,366 | $— | $— | $425,829,366 | ||||||||||||
Short-Term Investment1 | — | 8,664,678 | — | 8,664,678 | ||||||||||||
Total | $425,829,366 | $8,664,678 | $— | $434,494,044 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 61
Table of Contents
Schwab Target 2040 Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $285,820,705) | $354,802,089 | |||||
Investments in unaffiliated issuers, at value (cost $69,489,665) | + | 79,691,955 | ||||
Total investments, at value (cost $355,310,370) | 434,494,044 | |||||
Receivables: | ||||||
Fund shares sold | 999,330 | |||||
Dividends | 67,000 | |||||
Due from investment adviser | 1,831 | |||||
Interest | 7 | |||||
Prepaid expenses | + | 7,418 | ||||
Total assets | 435,569,630 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 200,000 | |||||
Fund shares redeemed | 465,582 | |||||
Accrued expenses | + | 79,746 | ||||
Total liabilities | 745,328 | |||||
Net Assets | ||||||
Total assets | 435,569,630 | |||||
Total liabilities | − | 745,328 | ||||
Net assets | $434,824,302 | |||||
Net Assets by Source | ||||||
Capital received from investors | 381,450,081 | |||||
Net investment income not yet distributed | 2,067,958 | |||||
Net realized capital losses | (27,877,411 | ) | ||||
Net unrealized capital gains | 79,183,674 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$434,824,302 | 34,322,288 | $12.67 |
62 See financial notes
Table of Contents
Schwab Target 2040 Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,902,230 | |||||
Dividends received from unaffiliated underlying funds | 620,118 | |||||
Interest | + | 2,055 | ||||
Total investment income | 5,524,403 | |||||
Expenses | ||||||
Shareholder reports | 71,114 | |||||
Transfer agent fees | 40,516 | |||||
Professional fees | 40,329 | |||||
Registration fees | 39,667 | |||||
Portfolio accounting fees | 23,388 | |||||
Custodian fees | 10,148 | |||||
Trustees’ fees | 8,190 | |||||
State filing fee reimbursement (Note 4) | (2,996 | ) | ||||
Other expenses | + | 8,694 | ||||
Total expenses | 239,050 | |||||
Expense reduction by CSIM1 | − | 239,050 | ||||
Net expenses | − | — | ||||
Net investment income | 5,524,403 | |||||
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* | (2,098,990 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (56,501 | ) | |||
Net realized losses | (1,275,324 | ) | ||||
Net unrealized gains on affiliated underlying funds | 30,212,994 | |||||
Net unrealized gains on unaffiliated underlying funds | + | 6,194,173 | ||||
Net unrealized gains | + | 36,407,167 | ||||
Net realized and unrealized gains | 35,131,843 | |||||
Increase in net assets resulting from operations | $40,656,246 |
* | Includes $853 from a litigation settlement related to an affiliated underlying fund. | |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $2,996. See financial note 4 for additional information. |
See financial notes 63
Table of Contents
Schwab Target 2040 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $5,524,403 | $4,533,448 | ||||||||
Net realized losses | (1,275,324 | ) | (391,406 | ) | ||||||
Net unrealized gains | + | 36,407,167 | 7,589,199 | |||||||
Increase in net assets from operations | 40,656,246 | 11,731,241 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($5,065,636 | ) | ($4,347,408 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 9,337,484 | $113,340,523 | 10,468,609 | $123,614,335 | ||||||||||||||
Shares reinvested | 440,155 | 4,960,552 | 366,999 | 4,260,852 | ||||||||||||||
Shares redeemed | + | (5,085,156 | ) | (61,428,310 | ) | (4,450,866 | ) | (52,299,460 | ) | |||||||||
Net transactions in fund shares | 4,692,483 | $56,872,765 | 6,384,742 | $75,575,727 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | 4,692,483 | 92,463,375 | 6,384,742 | 82,959,560 | |||||||||||||
End of period | 34,322,288 | $434,824,302 | 29,629,805 | $342,360,927 | ||||||||||||||
Net investment income not yet distributed | $2,067,958 | $1,492,095 |
64 See financial notes
Table of Contents
Schwab Target Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”) a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) | Schwab Core Equity Fund | |||
Schwab Target 2010 Fund | Schwab Dividend Equity Fund | |||
Schwab Target 2015 Fund | Schwab Large-Cap Growth Fund | |||
Schwab Target 2020 Fund | Schwab Small-Cap Equity Fund | |||
Schwab Target 2025 Fund | Schwab Hedged Equity Fund | |||
Schwab Target 2030 Fund | Schwab Financial Services Fund | |||
Schwab Target 2035 Fund | Schwab Health Care Fund | |||
Schwab Target 2040 Fund | Schwab International Core Equity Fund | |||
Schwab S&P 500 Index Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab Small-Cap Index Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab Total Stock Market Index Fund | (formerly 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 Company Index Fund | |||
Schwab MarketTrack Growth Portfolio | (formerly Schwab Fundamental International Small-Mid Company Index Fund) | |||
Schwab MarketTrack Balanced Portfolio | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab MarketTrack Conservative Portfolio | (formerly Schwab Fundamental Emerging Markets Index 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 | |||
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 funds’ Board of Trustees (the “Board”) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
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:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Underlying funds: valued at their respective net asset values. | |
• | Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the procedures. |
• | Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. |
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. 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 levels associated with valuing the funds’ investments as of October 31, 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.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(d) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(e) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(f) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(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 December 2011, Accounting Standards Update (“ASU”) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities,” was issued and is effective for interim and annual periods beginning after January 1, 2013. The ASU enhances disclosure requirements with respect to an entity’s rights of offset and related arrangements associated with its financial and derivative instruments. Management is currently evaluating the impact the adoption of ASU 2011-11 may have on the funds’ financial statement disclosures.
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.
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Schwab Target Funds
Financial Notes (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. | |
• | Exchange-Traded Funds (ETFs) Risk. When an underlying 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 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, |
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Schwab Target Funds
Financial Notes (continued)
3. Risk Factors (continued):
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 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. | |
• | 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 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 transaction 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 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 its affiliates 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 Board.
The agreement to limit the funds’ total expenses charged is limited to each fund’s direct operating expenses and, therefore, does not apply to underlying fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
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Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
The funds may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the funds may invest in other related funds. As of October 31, 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% | 0.8% | 4.4% | 2.3% | 8.0% | 2.2% | 9.1% | |||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund | 0.1% | 0.2% | 1.0% | 0.6% | 1.9% | 0.5% | 2.1% | |||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund | 0.2% | 0.2% | 1.3% | 0.6% | 2.5% | 0.6% | 2.7% | |||||||||||||||||||||
Laudus Mondrian International Equity Fund | 0.6% | 1.0% | 6.0% | 3.0% | 10.5% | 2.9% | 12.4% | |||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 0.3% | 0.4% | 2.0% | 1.1% | 3.6% | 1.0% | 4.1% | |||||||||||||||||||||
Schwab Core Equity Fund | 0.2% | 0.3% | 1.5% | 0.8% | 2.8% | 0.7% | 3.0% | |||||||||||||||||||||
Schwab Dividend Equity Fund | 0.1% | 0.2% | 0.9% | 0.5% | 1.7% | 0.4% | 1.9% | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 0.0% | * | 0.0% | * | 0.2% | 0.1% | 0.4% | 0.1% | 0.4% | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund | 0.7% | 1.1% | 6.0% | 3.2% | 11.1% | 3.0% | 12.4% | |||||||||||||||||||||
Schwab Small-Cap Equity Fund | 0.6% | 0.8% | 4.5% | 2.4% | 8.2% | 2.2% | 9.2% | |||||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 0.6% | 0.5% | 2.0% | 0.6% | 1.5% | 0.2% | 0.8% | |||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 0.6% | 0.6% | 2.2% | 0.9% | 2.2% | 0.4% | 1.0% | |||||||||||||||||||||
Schwab Total Bond Market Fund | 1.2% | 1.3% | 5.9% | 2.4% | 5.7% | 0.9% | 2.4% | |||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 0.1% | 0.2% | 0.8% | 0.3% | 0.8% | 0.1% | 0.4% | |||||||||||||||||||||
Short-Term Bond: | ||||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 1.7% | 1.3% | 2.1% | —% | —% | —% | —% | |||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.0% | * | 0.0% | * | —% | —% | —% | —% | —% |
* | Less than 0.05% |
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Below is a summary of the funds’ transactions with their affiliated underlying funds during the period ended October 31, 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 | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 207,569 | 10,261 | (40,484 | ) | 177,346 | $1,184,668 | ($46,130 | ) | $36,285 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 136,896 | 20,350 | (40,665 | ) | 116,581 | 2,218,538 | $136,121 | 25,457 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 94,911 | — | (68,677 | ) | 26,234 | 245,026 | 32,035 | 17,255 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 152,484 | 20,980 | (56,086 | ) | 117,378 | 842,777 | 53,759 | 59,581 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 198,308 | 93,064 | (37,565 | ) | 253,807 | 3,591,368 | 30,750 | 55,303 | ||||||||||||||||||||
Schwab Core Equity Fund | 304,554 | 7,602 | (135,728 | ) | 176,428 | 3,316,855 | 327,714 | 85,605 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 95,242 | 38,314 | (42,731 | ) | 90,825 | 1,318,783 | 50,638 | 32,067 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 229,811 | 25,241 | (108,539 | ) | 146,513 | 3,274,559 | 651,792 | 91,024 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 75,447 | 29,760 | (19,587 | ) | 85,620 | 1,141,309 | 24,286 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 110,790 | 41,050 | (28,900 | ) | 122,940 | 2,178,492 | 41,845 | 864 | ||||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 162,879 | 66,237 | (24,131 | ) | 204,985 | 2,513,120 | 9,117 | 49,331 | ||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 359,700 | 9,479 | (122,076 | ) | 247,103 | 2,619,287 | 78,249 | 98,467 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 1,326,136 | 116,937 | (265,393 | ) | 1,177,680 | 11,482,377 | (8,849 | ) | 329,205 | |||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 126,926 | 11,063 | (34,352 | ) | 103,637 | 1,240,537 | 45,111 | 61,931 | ||||||||||||||||||||
Short-Term Bond: | ||||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 859,166 | 80,307 | (121,646 | ) | 817,827 | 7,622,152 | 7,878 | 79,174 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3,468,431 | — | (1,500,000 | ) | 1,968,431 | 1,968,431 | — | 1,432 | ||||||||||||||||||||
Total | $46,758,279 | $1,434,316 | $1,022,981 | |||||||||||||||||||||||||
71
Table of Contents
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2015 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/11 | 11/01/11 | ||||||||||||||||||||||
Underlying Funds | 10/31/11 | Additions | Sales | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 298,566 | 48,897 | (88,891 | ) | 258,572 | $1,727,263 | ($75,423 | ) | $47,299 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 136,706 | 45,417 | (15,382 | ) | 166,741 | 3,173,074 | ($32,568 | ) | 25,738 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 114,210 | 3,736 | (79,975 | ) | 37,971 | 354,653 | (35,483 | ) | 20,763 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 162,344 | 22,976 | (6,050 | ) | 179,270 | 1,287,162 | (5,832 | ) | 63,219 | |||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 199,713 | 195,529 | (28,873 | ) | 366,369 | 5,184,123 | (18,262 | ) | 56,488 | |||||||||||||||||||
Schwab Core Equity Fund | 319,081 | 32,013 | (95,519 | ) | 255,575 | 4,804,802 | 96,079 | 98,479 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 98,443 | 58,385 | (10,447 | ) | 146,381 | 2,125,457 | 6,978 | 38,455 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 240,503 | 66,322 | (95,744 | ) | 211,081 | 4,717,671 | 111,745 | 96,185 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 100,280 | 28,087 | (2,373 | ) | 125,994 | 1,679,494 | (1,443 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 150,005 | 37,743 | (9,245 | ) | 178,503 | 3,163,078 | 12,425 | 1,182 | ||||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 132,905 | 45,627 | — | 178,532 | 2,188,797 | — | 40,414 | |||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 196,056 | 61,148 | (10,738 | ) | 246,466 | 2,612,543 | (482 | ) | 65,696 | |||||||||||||||||||
Schwab Total Bond Market Fund | 997,635 | 327,552 | (17,655 | ) | 1,307,532 | 12,748,440 | 444 | 298,506 | ||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 102,177 | 22,187 | — | 124,364 | 1,488,634 | — | 54,776 | |||||||||||||||||||||
Short-Term Bond: | ||||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 426,993 | 216,719 | — | 643,712 | 5,999,392 | — | 50,377 | |||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1,791,651 | — | (1,000,000 | ) | 791,651 | 791,651 | — | 623 | ||||||||||||||||||||
Total | $54,046,234 | $58,178 | $958,200 | |||||||||||||||||||||||||
72
Table of Contents
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2020 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/11 | 11/01/11 | ||||||||||||||||||||||
Underlying Funds | 10/31/11 | Additions | Sales | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 1,660,883 | 18,149 | (267,938 | ) | 1,411,094 | $9,426,105 | ($553,035 | ) | $274,408 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 864,568 | 92,671 | (60,323 | ) | 896,916 | 17,068,305 | (25,789 | ) | 160,074 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 744,546 | 17,278 | (531,120 | ) | 230,704 | 2,154,776 | (334,037 | ) | 135,358 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 1,022,140 | 83,023 | (7,270 | ) | 1,097,893 | 7,882,873 | (6,398 | ) | 392,621 | |||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 1,263,479 | 699,878 | (42,790 | ) | 1,920,567 | 27,176,017 | 54,729 | 355,796 | ||||||||||||||||||||
Schwab Core Equity Fund | 2,110,854 | 27,639 | (632,172 | ) | 1,506,321 | 28,318,832 | 30,314 | 614,036 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 632,350 | 265,419 | — | 897,769 | 13,035,607 | — | 233,270 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,518,287 | 63,246 | (481,019 | ) | 1,100,514 | 24,596,494 | 2,389,829 | 600,323 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 586,685 | 125,677 | (22,608 | ) | 689,754 | 9,194,415 | 11,276 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 841,120 | 187,980 | (54,909 | ) | 974,191 | 17,262,660 | 9,906 | 6,525 | ||||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 573,400 | 104,965 | — | 678,365 | 8,316,759 | — | 163,262 | |||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 761,332 | 80,516 | — | 841,848 | 8,923,586 | 252,168 | ||||||||||||||||||||||
Schwab Total Bond Market Fund | 5,288,857 | 833,152 | (353,120 | ) | 5,768,889 | 56,246,669 | (38,604 | ) | 1,438,978 | |||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 527,811 | 88,112 | (34,254 | ) | 581,669 | 6,962,580 | (12,559 | ) | 275,515 | |||||||||||||||||||
Short-Term Bond: | ||||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 871,286 | 119,011 | — | 990,297 | 9,229,572 | — | 85,591 | |||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3,187,964 | — | (3,187,964 | ) | — | — | — | 359 | ||||||||||||||||||||
Total | $245,795,250 | $1,525,632 | $4,988,284 | |||||||||||||||||||||||||
73
Table of Contents
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2025 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/11 | 11/01/11 | ||||||||||||||||||||||
Underlying Funds | 10/31/11 | Additions | Sales | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 703,826 | 121,061 | (86,285 | ) | 738,602 | $4,933,862 | ($80,468 | ) | $130,655 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 381,082 | 120,113 | (18,533 | ) | 482,662 | 9,185,049 | (49,590 | ) | 72,210 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 312,968 | 12,199 | (218,069 | ) | 107,098 | 1,000,299 | (130,860 | ) | 57,757 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 452,359 | 88,831 | — | 541,190 | 3,885,746 | — | 177,524 | |||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 553,297 | 549,627 | (57,634 | ) | 1,045,290 | 14,790,848 | (35,741 | ) | 161,376 | |||||||||||||||||||
Schwab Core Equity Fund | 956,556 | 76,402 | (276,446 | ) | 756,512 | 14,222,420 | (90,186 | ) | 292,636 | |||||||||||||||||||
Schwab Dividend Equity Fund | 289,198 | 157,141 | (13,446 | ) | 432,893 | 6,285,609 | 5,425 | 111,708 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 627,841 | 176,992 | (203,784 | ) | 601,049 | 13,433,448 | (48,067 | ) | 252,112 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 260,766 | 116,159 | (10,347 | ) | 366,578 | 4,886,487 | (3,130 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 399,641 | 131,794 | (13,777 | ) | 517,658 | 9,172,902 | 14,361 | 3,158 | ||||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 173,927 | 44,561 | — | 218,488 | 2,678,662 | — | 52,159 | |||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 213,823 | 150,880 | — | 364,703 | 3,865,848 | — | 88,402 | |||||||||||||||||||||
Schwab Total Bond Market Fund | 1,738,844 | 606,607 | (35,475 | ) | 2,309,976 | 22,522,269 | 1,683 | 519,839 | ||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 156,064 | 41,066 | — | 197,130 | 2,359,645 | — | 89,394 | |||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1,398,128 | — | (1,398,128 | ) | — | — | — | 161 | ||||||||||||||||||||
Total | $113,223,094 | ($416,573 | ) | $2,009,091 | ||||||||||||||||||||||||
74
Table of Contents
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2030 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/11 | 11/01/11 | ||||||||||||||||||||||
Underlying Funds | 10/31/11 | Additions | Sales | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 2,726,695 | 72,131 | (247,726 | ) | 2,551,100 | $17,041,346 | ($513,558 | ) | $479,566 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 1,429,231 | 244,550 | (14,435 | ) | 1,659,346 | 31,577,352 | (23,796 | ) | 263,552 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 1,301,561 | 56,040 | (929,294 | ) | 428,307 | 4,000,384 | (847,548 | ) | 236,624 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 1,725,566 | 208,718 | (9,023 | ) | 1,925,261 | 13,823,377 | (10,647 | ) | 667,912 | |||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 2,020,252 | 1,587,495 | (94,192 | ) | 3,513,555 | 49,716,803 | (100,299 | ) | 568,903 | |||||||||||||||||||
Schwab Core Equity Fund | 3,881,565 | 123,551 | (1,226,810 | ) | 2,778,306 | 52,232,149 | (186,523 | ) | 1,125,853 | |||||||||||||||||||
Schwab Dividend Equity Fund | 1,011,752 | 609,867 | — | 1,621,619 | 23,545,902 | 410,843 | ||||||||||||||||||||||
Schwab S&P 500 Index Fund | 2,342,665 | 175,895 | (509,392 | ) | 2,009,168 | 44,904,897 | 398,410 | 928,867 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 1,143,509 | 165,633 | (25,904 | ) | 1,283,238 | 17,105,565 | 5,022 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 1,676,570 | 199,580 | (76,204 | ) | 1,799,946 | 31,895,052 | (14,740 | ) | 12,742 | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 424,155 | 91,794 | — | 515,949 | 6,325,538 | — | 124,720 | |||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 544,479 | 331,264 | — | 875,743 | 9,282,881 | — | 221,964 | |||||||||||||||||||||
Schwab Total Bond Market Fund | 4,880,271 | 684,843 | (5,139 | ) | 5,559,975 | 54,209,758 | 514 | 1,377,195 | ||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 392,824 | 222,729 | (12,898 | ) | 602,655 | 7,213,783 | (11,175 | ) | 228,122 | |||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 4,558,910 | — | (4,558,910 | ) | — | — | — | 519 | ||||||||||||||||||||
Total | $362,874,787 | ($1,304,340 | ) | $6,647,382 | ||||||||||||||||||||||||
75
Table of Contents
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2035 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/11 | 11/01/11 | ||||||||||||||||||||||
Underlying Funds | 10/31/11 | Additions | Sales | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 610,226 | 121,492 | (35,675 | ) | 696,043 | $4,649,570 | ($56,841 | ) | $117,768 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 315,685 | 136,654 | — | 452,339 | 8,608,006 | $— | 59,378 | |||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 278,801 | 20,471 | (195,611 | ) | 103,661 | 968,190 | (132,349 | ) | 52,388 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 387,136 | 137,617 | — | 524,753 | 3,767,724 | — | 150,376 | |||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 481,457 | 518,716 | (25,347 | ) | 974,826 | 13,793,792 | (27,156 | ) | 138,960 | |||||||||||||||||||
Schwab Core Equity Fund | 884,176 | 102,241 | (265,101 | ) | 721,316 | 13,560,739 | (87,984 | ) | 264,181 | |||||||||||||||||||
Schwab Dividend Equity Fund | 242,036 | 174,014 | — | 416,050 | 6,041,052 | — | 100,665 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 488,875 | 150,643 | (77,051 | ) | 562,467 | 12,571,145 | (63,846 | ) | 194,918 | |||||||||||||||||||
Small-Cap:- | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 258,735 | 87,679 | — | 346,414 | 4,617,693 | — | — | |||||||||||||||||||||
Schwab Small-Cap Equity Fund | 378,817 | 123,996 | (15,932 | ) | 486,881 | 8,627,525 | (4,073 | ) | 2,879 | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 63,489 | 19,008 | — | 82,497 | 1,011,407 | — | 19,109 | |||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 90,073 | 63,836 | — | 153,909 | 1,631,434 | — | 34,911 | |||||||||||||||||||||
Schwab Total Bond Market Fund | 695,859 | 227,417 | (10,450 | ) | 912,826 | 8,900,054 | 250 | 207,846 | ||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 57,293 | 33,212 | — | 90,505 | 1,083,349 | — | 34,007 | |||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 846,451 | — | (846,451 | ) | — | — | — | 97 | ||||||||||||||||||||
Total | $89,831,680 | ($371,999 | ) | $1,377,483 | ||||||||||||||||||||||||
76
Table of Contents
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2040 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/11 | 11/01/11 | ||||||||||||||||||||||
Underlying Funds | 10/31/11 | Additions | Sales | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 2,878,926 | 263,634 | (257,913 | ) | 2,884,647 | $19,269,443 | ($551,310 | ) | $524,736 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 1,433,985 | 419,411 | — | 1,853,396 | 35,270,134 | — | 266,503 | |||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 1,317,623 | 48,575 | (895,611 | ) | 470,587 | 4,395,286 | (960,072 | ) | 243,847 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 1,868,526 | 390,948 | — | 2,259,474 | 16,223,026 | — | 702,752 | |||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 2,242,301 | 1,821,764 | (57,940 | ) | 4,006,125 | 56,686,668 | (63,074 | ) | 631,432 | |||||||||||||||||||
Schwab Core Equity Fund | 4,125,083 | 191,839 | (1,277,498 | ) | 3,039,424 | 57,141,171 | (386,952 | ) | 1,211,192 | |||||||||||||||||||
Schwab Dividend Equity Fund | 1,166,029 | 629,834 | — | 1,795,863 | 26,075,929 | — | 455,132 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 2,173,959 | 359,296 | (240,253 | ) | 2,293,002 | 51,248,602 | (122,172 | ) | 861,975 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 1,178,238 | 255,207 | — | 1,433,445 | 19,107,827 | — | — | |||||||||||||||||||||
Schwab Small-Cap Equity Fund | 1,759,299 | 293,357 | (31,573 | ) | 2,021,083 | 35,813,590 | (20,903 | ) | 13,370 | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 225,421 | 34,364 | — | 259,785 | 3,184,966 | — | 64,072 | |||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 340,348 | 72,361 | (32,790 | ) | 379,919 | 4,027,144 | (389 | ) | 111,065 | |||||||||||||||||||
Schwab Total Bond Market Fund | 1,919,689 | 517,066 | (77,399 | ) | 2,359,356 | 23,003,724 | 5,029 | 586,053 | ||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 206,204 | 74,045 | — | 280,249 | 3,354,579 | — | 109,723 | |||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 4,790,619 | — | (4,790,619 | ) | — | — | — | 545 | ||||||||||||||||||||
Total | $354,802,089 | ($2,099,843 | ) | $5,782,397 | ||||||||||||||||||||||||
* | 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 to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
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Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
During the period, the Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 Fund and Schwab Target 2040 Fund received a payment of $765, $178, $2,967, $184, $3,461, $193 and $2,996, respectively, related to state filing fees resulting from revised fee calculation methodologies being applied on sales of the funds’ shares in prior periods in certain states. These payments are presented in each fund’s Statement of Operations as “State filing fee reimbursement”.
All or a portion of the state filing fees were previously borne by CSIM through a reimbursement of fund expenses. As this expense was previously reimbursed, the payments received during the period had the effect of decreasing the total “Expense reduction by CSIM” in the fund’s Statement of Operations. The current net operating expense ratio was not impacted by this payment.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. provides transfer agent services for the fund.
6. Board of Trustees:
Trustees may include people who are officers and/or directors of the investment adviser or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 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 | $8,204,000 | $16,953,000 | ||||||
Schwab Target 2015 Fund | 18,869,000 | 7,474,000 | ||||||
Schwab Target 2020 Fund | 45,743,000 | 36,775,964 | ||||||
Schwab Target 2025 Fund | 40,763,000 | 15,143,128 | ||||||
Schwab Target 2030 Fund | 83,229,000 | 49,777,910 | ||||||
Schwab Target 2035 Fund | 33,620,000 | 9,848,451 | ||||||
Schwab Target 2040 Fund | 96,806,000 | 45,351,619 |
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Schwab Target Funds
Financial Notes (continued)
9. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/11-10/31/12) | (11/1/10-10/31/11) | |||||||
Schwab Target 2010 Fund | $1,527 | $3,912 | ||||||
Schwab Target 2015 Fund | 3,540 | 6,220 | ||||||
Schwab Target 2020 Fund | 1,559 | 7,631 | ||||||
Schwab Target 2025 Fund | 7,669 | 10,063 | ||||||
Schwab Target 2030 Fund | 9,707 | 11,408 | ||||||
Schwab Target 2035 Fund | 2,370 | 3,665 | ||||||
Schwab Target 2040 Fund | 13,870 | 16,855 |
10. Federal Income Taxes:
As of October 31, 2012, the components of distributable earnings on a tax-basis were as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||
Undistributed ordinary income | $685,426 | $643,845 | $2,775,271 | $1,040,495 | $2,913,074 | $557,615 | $2,065,172 | |||||||||||||||||||||
Undistributed long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized appreciation on investments | 8,171,938 | 8,095,337 | 50,868,108 | 18,007,940 | 78,158,964 | 15,473,892 | 74,794,330 | |||||||||||||||||||||
Unrealized depreciation on investments | — | — | (627,598 | ) | — | (243,354 | ) | — | — | |||||||||||||||||||
Other unrealized appreciation/(depreciation) | — | — | — | — | — | — | — | |||||||||||||||||||||
Net unrealized appreciation/(depreciation) | $8,171,938 | $8,095,337 | $50,240,510 | $18,007,940 | $77,915,610 | $15,473,892 | $74,794,330 | |||||||||||||||||||||
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2012, 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 | $4,601,462 | $— | $9,049,980 | $— | $6,715,916 | $— | $6,366,179 | |||||||||||||||||||||
October 31, 2017 | 13,259,379 | 440,793 | 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 | |||||||||||||||||||||
No expiration | — | — | — | 146,556 | 1,416,200 | 130,468 | 1,587,618 | |||||||||||||||||||||
Total | $17,860,841 | $440,793 | $37,151,646 | $773,764 | $30,255,115 | $598,518 | $23,485,283 | |||||||||||||||||||||
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Schwab Target Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
For the year ended October 31, 2012, 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 | $1,614,007 | $134,139 | $765,836 | $— | $— | $— | $— |
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||||||
Ordinary income | $1,479,450 | $1,073,035 | $5,540,387 | $1,878,136 | $6,263,907 | $1,173,912 | $5,065,636 | |||||||||||||||||||||
Long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — | — | — | — | — | |||||||||||||||||||||
Prior period distributions | ||||||||||||||||||||||||||||
Ordinary income | $1,782,231 | $789,680 | $5,113,390 | $1,192,290 | $5,459,742 | $819,461 | $4,347,408 | |||||||||||||||||||||
Long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2012, the funds made the following reclassifications:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||
Capital shares | $— | $— | $— | $— | $— | $— | $— | |||||||||||||||||||||
Undistributed net investment income | 36,577 | 28,153 | 134,979 | 46,801 | 140,101 | 27,357 | 117,096 | |||||||||||||||||||||
Net realized capital gains/(losses) | (36,577 | ) | (28,153 | ) | (134,979 | ) | (46,801 | ) | (140,101 | ) | (27,357 | ) | (117,096 | ) |
As of October 31, 2012, 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, 2012, 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. However, such losses must be utilized prior to the pre-enactment capital losses, which increases the likelihood that the pre-
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Schwab Target Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
enactment capital losses will expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital loss, 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.
The funds have adopted the noted provisions of the Act for the period ending October 31, 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.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 Fund, and Schwab Target 2040 Fund (seven of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2012, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities and investments in the underlying funds at October 31, 2012 by correspondence with the custodian and transfer agent of the underlying funds, respectively, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 14, 2012
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Other Federal Tax Information (unaudited)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2012, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Target 2010 Fund | 11.60 | ||||
Schwab Target 2015 Fund | 21.57 | ||||
Schwab Target 2020 Fund | 17.63 | ||||
Schwab Target 2025 Fund | 25.27 | ||||
Schwab Target 2030 Fund | 22.80 | ||||
Schwab Target 2035 Fund | 31.15 | ||||
Schwab Target 2040 Fund | 44.82 |
For the fiscal year ended October 31, 2012, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2013 via IRS form 1099 of the amounts for use in preparing their 2012 income tax return.
Schwab Target 2010 Fund | $725,226 | |||
Schwab Target 2015 Fund | 394,626 | |||
Schwab Target 2020 Fund | 3,073,845 | |||
Schwab Target 2025 Fund | 700,197 | |||
Schwab Target 2030 Fund | 3,840,842 | |||
Schwab Target 2035 Fund | 625,904 | |||
Schwab Target 2040 Fund | 3,433,656 |
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Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 Fund, and Schwab Target 2040 Fund (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at meetings held on April 24, 2012, and June 5, 2012, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 5, 2012. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the
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appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Schwab Target 2010 Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Schwab Target 2010 Fund. These factors varied from Fund to Fund, but included one or more of the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers of 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 91 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-800-435-4000.
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. | 74 | 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). | 74 | 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). | 74 | 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. | 74 | 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). | 74 | 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). | 74 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 74 | 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. | 74 | 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. | 91 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President 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 and 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. In addition to their employment with Schwab, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation, the parent company of Schwab and the investment adviser. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays 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.
Citigroup Non-U.S. Dollar World Government Bond Index An index that measures the total rate of return performance for the government bonds of 23 countries, excluding the U.S., with a remaining maturity of at least one year.
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 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.
MSCI Emerging Markets Index A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
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.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
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How We Share and Use Your Information
We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
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• | when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control). |
State Laws
We will comply with state laws that apply to the disclosure or use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.
Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.
We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2012 Schwab Funds. All rights reserved.
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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 Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large Company* Index Fund
Schwab Fundamental US Small Company* Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small Company Index Fund
Schwab Fundamental Emerging Markets* Large Company Index Fund
Schwab Global Real Estate Fundtm
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab Intermediate-Term Bond Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fund
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
P.O. Box 3812, Englewood, CO 80155–3812
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
© 2012 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR33732-07
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Annual report dated October 31, 2012, enclosed.
Schwab Balanced Fundtm
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This wrapper is not part of the shareholder report.
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Schwab Balanced Fundtm
Annual Report
October 31, 2012
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Schwab Balanced Fundtm
In This Report
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Performance and Fund Facts | 6 | |
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Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
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Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/prospectus.
Total Return for the Report Period | ||||
Schwab Balanced Fundtm (Ticker Symbol: SWOBX) | 9.36% | |||
Balanced Blended Index | 11.28% | |||
Fund Category: Morningstar Moderate Allocation | 9.47% | |||
Performance Details | pages 6-7 | |||
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 the fund’s prospectus for further detail and eligibility requirements. |
2 Schwab Balanced Fund
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From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctpchandom.jpg)
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. The fund combines equity and fixed income strategies in U.S. markets, seeking income, diversification, and an opportunity for long-term growth.
For the 12 months ended October 31, 2012, the fund generated a positive return, as U.S. stocks solidly outperformed international equities, and as U.S. fixed-income securities outperformed the narrowly positive returns of international fixed-income securities.
U.S. equities benefitted from low rates and continued governmental efforts to encourage faster economic growth, while the euro zone’s sovereign debt crisis represented an ongoing challenge, particularly for international equities. With concerns regarding elections in Greece and worries that the debt crisis might spread, international equities endured sharp losses in May. Subsequently, European leaders achieved meaningful progress, and international equities began to recover.
Bonds—in the U.S. and internationally—experienced intermittent periods of strength, while economic growth decelerated in many parts of the world. The European Central Bank, Bank of England, Bank of Japan, and U.S. Federal Reserve were among the world’s central banks that maintained low interest-rate policies geared toward improving their region’s or country’s economic prospects.
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.
![]() | 15.21% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 12.08% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 5.15% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.25% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.06% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctcaptst06.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management’s views and portfolio holdings may have changed since the report date.
Schwab Balanced Fund 3
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From the President continued
For the 12 months ended October 31, 2012, the fund generated a positive return, as U.S. stocks solidly outperformed international equities, and as U.S. fixed-income securities outperformed the narrowly positive returns of international fixed-income securities.
U.S. stocks and bonds outperformed their international counterparts for the report period. In spite of softening U.S. corporate profit growth, the Russell 1000 Index returned 15.0%, compared with the 5.2% return of the MSCI EAFE Index and the 3.0% return of the MSCI Emerging Markets Index in U.S. dollar terms. The Barclays U.S. Aggregate Bond Index returned 5.3%, and in U.S. dollar terms, the Citigroup Non-U.S. Dollar World Government Bond Index returned 1.6%.
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 frequently asked questions or for more information about the Schwab Balanced Fund, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Balanced Fund
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Fund Management
![]() | Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the fund. She was appointed portfolio manager of the fund in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. Ms. Tang replaced Jake Gilliam as portfolio manager during the reporting period. |
Schwab Balanced Fund 5
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Schwab Balanced Fund™
The Schwab Balanced Fund (the fund) seeks capital growth and income. To pursue its goal, the fund generally invests in a diversified group of other Schwab and/or Laudus Funds, in accordance with its target portfolio allocation. Normally, the fund invests 55% to 65% of its assets in equity securities (including stocks and equity funds) and 35% to 45% in fixed-income securities (including bonds and fixed-income funds), money market funds, and cash or cash equivalents. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
For the 12-month period ended October 31, 2012, the fund returned 9.36%, while its internally calculated comparative index—the Balanced Blended Index (the index)—returned 11.28%. Unlike the fund’s return, the index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow economic growth both domestically and abroad and ongoing concerns over the European debt crisis, U.S. stock markets posted strong gains over the reporting period. U.S. large-cap stocks outperformed their small-cap counterparts, with the Russell 1000 Index up 14.97%, outperforming the Russell 2000 Index by nearly 3%. Value stocks outperformed growth stocks by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while the Barclays U.S. Treasury Index returned 3.66%.
Positioning and Strategies. Over the reporting period, the fund’s asset allocations were broadly in line with those of the index.
Within the fund’s equity allocation, all three of the fund’s underlying fund positions contributed positively to total return, however, they all underperformed the S&P 500 Index, which returned 15.21%. Relative to the index, the Laudus Growth Investors U.S. Large Cap Growth Fund was the largest detractor, returning 10.11% for the period. The Laudus Small-Cap MarketMasters Fund, Select Shares, which returned 9.8%, and the Schwab Core Equity Fund, which returned 13.99%, also detracted from the fund’s performance relative to the index.
In the fixed income arena, the top contributor to the fund’s total return was the Schwab Total Bond Market Fund, which gained 4.94% for the reporting period. The Schwab Premier Income Fund also contributed positively, gaining 3.87%. On a relative basis, however, both funds underperformed the Barclays U.S. Aggregate Bond Index, which returned 5.25%. As a result, the fund’s fixed income allocation subtracted from the fund’s performance relative to the index. In addition, the fund’s cash allocation detracted from its relative performance, given the meager returns on cash as compared to those of the broader U.S. bond market.
As of 10/31/12:
Statistics
Number of Holdings | 6 | |||
Portfolio Turnover Rate | 38% |
Asset Class Weightings % of Investments
Equity Funds – Large-Cap | 50.2% | |||
Fixed-Income Funds – Intermediate-Term Bond | 37.0% | |||
Equity Funds – Small-Cap | 9.8% | |||
Money Market Funds | 3.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Core Equity Fund | 34.6% | |||
Schwab Total Bond Market Fund | 24.6% | |||
Laudus Growth Investors U.S. Large Cap Growth Fund | 15.7% | |||
Schwab Premier Income Fund | 12.4% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 9.8% | |||
Total | 97.1% |
Management’s views and 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 | This list is not a recommendation of any security by the investment adviser. | |
2 | The holdings listed exclude any temporary liquidity investments. |
6 Schwab Balanced Fund
Table of Contents
Schwab Balanced Fundtm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsbf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Balanced Fundtm (11/18/96) | 9.36 | % | 1.93 | % | 6.48 | % | |||||||||
Balanced Blended Index3 | 11.28 | % | 3.19 | % | 6.60 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.38 | % | 5.39 | % | |||||||||
Fund Category: Morningstar Moderate Allocation | 9.47 | % | 1.43 | % | 6.37 | % |
Fund Expense Ratios4: Net 0.64%; Gross 0.80%
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.
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. |
Schwab Balanced Fund 7
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2012 and held through October 31, 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 5/1/12 | at 10/31/12 | 5/1/12–10/31/12 | |||||||||||||
Schwab Balanced Fundtm | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 1,006.40 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.14 | $ | 0.00 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. The expenses incurred by the underlying funds in which the funds invest are not included in this ratio. | |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 366 days of the fiscal year. |
8 Schwab Balanced Fund
Table of Contents
Schwab Balanced Fund™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/081 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.61 | 11.00 | 9.99 | 9.82 | 13.86 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.19 | 2 | 0.17 | 2 | 0.17 | 2 | 0.22 | 2 | 0.20 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 0.88 | 0.63 | 1.03 | 0.64 | (3.26 | ) | ||||||||||||||||
Total from investment operations | 1.07 | 0.80 | 1.20 | 0.86 | (3.06 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.17 | ) | (0.19 | ) | (0.19 | ) | (0.37 | ) | (0.29 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.32 | ) | (0.69 | ) | |||||||||||||||
Total distributions | (0.17 | ) | (0.19 | ) | (0.19 | ) | (0.69 | ) | (0.98 | ) | ||||||||||||
Net asset value at end of period | 12.51 | 11.61 | 11.00 | 9.99 | 9.82 | |||||||||||||||||
Total return (%) | 9.36 | 7.28 | 12.08 | 9.45 | (23.56 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses3 | 0.00 | 4 | 0.00 | 4 | 0.00 | 4 | 0.00 | 0.36 | ||||||||||||||
Gross operating expenses3 | 0.16 | 0.16 | 0.20 | 0.17 | 0.53 | |||||||||||||||||
Net investment income (loss) | 1.54 | 1.52 | 1.67 | 2.41 | 1.81 | |||||||||||||||||
Portfolio turnover rate | 38 | 53 | 8 | 21 | 267 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 117 | 109 | 88 | 86 | 85 |
1 Effective February 28, 2008, the Investor Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Investor Shares.
2 Calculated based on the average shares outstanding during the period.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
See financial notes 9
Table of Contents
Schwab Balanced Fund
Portfolio Holdings as of October 31, 2012
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 | ($) | ($) | ||||||||||
100 | .2% | Other Investment Companies | 105,909,626 | 117,656,518 | ||||||||
100 | .2% | Total Investments | 105,909,626 | 117,656,518 | ||||||||
(0 | .2)% | Other Assets and Liabilities, Net | (243,127 | ) | ||||||||
100 | .0% | Net Assets | 117,413,391 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 100.2% of net assets | ||||||||
Equity Funds 60.1% | ||||||||
Large-Cap 50.3% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a)* | 1,303,273 | 18,441,312 | ||||||
Schwab Core Equity Fund (a) | 2,160,527 | 40,617,906 | ||||||
59,059,218 | ||||||||
Small-Cap 9.8% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 866,818 | 11,554,683 | ||||||
70,613,901 | ||||||||
Fixed-Income Funds 37.0% | ||||||||
Intermediate-Term Bond 37.0% | ||||||||
Schwab Premier Income Fund (a) | 1,370,897 | 14,531,508 | ||||||
Schwab Total Bond Market Fund (a) | 2,967,154 | 28,929,754 | ||||||
�� | 43,461,262 | |||||||
Money Market Fund 3.1% | ||||||||
State Street Institutional U.S. Government Money Market Fund | 3,581,355 | 3,581,355 | ||||||
Total Other Investment Companies | ||||||||
(Cost $105,909,626) | 117,656,518 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $108,127,553 and the unrealized appreciation and depreciation were $9,528,965 and ($0), respectively, with a net unrealized appreciation of $9,528,965.
* | 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 fund’s investments as of October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $117,656,518 | $— | $— | $117,656,518 | ||||||||||||
Total | $117,656,518 | $— | $— | $117,656,518 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
10 See financial notes
Table of Contents
Schwab Balanced Fund
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $102,328,271) | $114,075,163 | |||||
Investments in unaffiliated issuers, at value (cost $3,581,355) | + | 3,581,355 | ||||
Total investments, at value (cost $105,909,626) | 117,656,518 | |||||
Receivables: | ||||||
Investments sold | 125,000 | |||||
Fund shares sold | 184,016 | |||||
Dividends | 82,388 | |||||
Due from investment adviser | 1,281 | |||||
Interest | 149 | |||||
Prepaid expenses | + | 2,910 | ||||
Total assets | 118,052,262 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 572,392 | |||||
Accrued expenses | + | 66,479 | ||||
Total liabilities | 638,871 | |||||
Net Assets | ||||||
Total assets | 118,052,262 | |||||
Total liabilities | − | 638,871 | ||||
Net assets | $117,413,391 | |||||
Net Assets by Source | ||||||
Capital received from investors | 110,926,369 | |||||
Net investment income not yet distributed | 1,031,813 | |||||
Net realized capital losses | (6,291,683 | ) | ||||
Net unrealized capital gains | 11,746,892 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$117,413,391 | 9,384,867 | $12.51 |
See financial notes 11
Table of Contents
Schwab Balanced Fund
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,646,168 | |||||
Interest | + | 1,217 | ||||
Total investment income | 1,647,385 | |||||
Expenses | ||||||
Professional fees | 43,979 | |||||
Shareholder reports | 43,517 | |||||
Registration fees | 28,091 | |||||
Transfer agent fees | 23,387 | |||||
Portfolio accounting fees | 17,377 | |||||
Trustees’ fees | 6,388 | |||||
Custodian fees | 2,532 | |||||
Interest expense | 416 | |||||
State filing fee reimbursement (Note 4) | (617 | ) | ||||
Other expenses | + | 3,006 | ||||
Total expenses | 168,076 | |||||
Expense reduction by CSIM1 | − | 167,659 | ||||
Custody credits | − | 1 | ||||
Net expenses | − | 416 | ||||
Net investment income | 1,646,969 | |||||
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 | (864,983 | ) | ||||
Net realized gains on unaffiliated investments | + | 674 | ||||
Net realized losses | (417,870 | ) | ||||
Net unrealized gains on affiliated underlying funds | + | 7,101,600 | ||||
Net realized and unrealized gains | 6,683,730 | |||||
Increase in net assets resulting from operations | $8,330,699 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $617. See financial note 4 for additional information. |
12 See financial notes
Table of Contents
Schwab Balanced Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $1,646,969 | $1,492,259 | ||||||||
Net realized losses | (417,870 | ) | (268,656 | ) | ||||||
Net unrealized gains | + | 7,101,600 | 6,134,481 | |||||||
Increase in net assets from operations | 8,330,699 | 7,358,084 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,421,426 | ) | ($1,483,071 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 4,301,668 | $52,887,809 | 3,803,797 | $43,245,177 | ||||||||||||||
Shares reinvested | 115,862 | 1,332,417 | 123,329 | 1,393,617 | ||||||||||||||
Shares redeemed | + | (4,446,198 | ) | (53,006,629 | ) | (2,534,648 | ) | (29,444,848 | ) | |||||||||
Net transactions in fund shares | (28,668 | ) | $1,213,597 | 1,392,478 | $15,193,946 | |||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 or decrease | + | (28,668 | ) | 8,122,870 | 1,392,478 | 21,068,959 | ||||||||||||
End of period | 9,384,867 | $117,413,391 | 9,413,535 | $109,290,521 | ||||||||||||||
Net investment income not yet distributed | $1,031,813 | $765,784 |
See financial notes 13
Table of Contents
Schwab Balanced Fund
Financial Notes
1. Business Structure of the Fund:
Schwab Balanced Fund is a series of Schwab Capital Trust (the “trust”) a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:
Schwab Capital Trust (organized May 7, 1993) | Schwab International Core Equity Fund | |||
Schwab Balanced Fund | Schwab Target 2010 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2015 Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2020 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2025 Fund | |||
Schwab International Index Fund | Schwab Target 2030 Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Target 2035 Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Target 2040 Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Fundamental US Large Company Index Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Fundamental US Small Company Index Fund | |||
Laudus Small-Cap MarketMasters Fund | (formerly Schwab Fundamental US Small-Mid Company Index Fund) | |||
Laudus International MarketMasters Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Dividend Equity Fund | (formerly Schwab Fundamental International Small-Mid Company Index Fund) | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab Small-Cap Equity Fund | (formerly Schwab Fundamental Emerging Markets Index Fund) | |||
Schwab Hedged Equity Fund | Schwab Monthly Income Fund-Moderate Payout | |||
Schwab Financial Services Fund | Schwab Monthly Income Fund-Enhanced Payout | |||
Schwab Health Care 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 fund’s Board of Trustees (the “Board”) 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:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The fund values the securities in its portfolio every business day. The fund uses the following policies to value various types of securities:
• | Underlying funds: valued at their respective net asset values. | |
• | Securities for which no quoted value is available: The Board has adopted procedures to fair value the fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is |
14
Table of Contents
Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. The fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the procedures. |
• | 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 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. 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 levels associated with valuing the fund’s investments as of October 31, 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.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(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 records 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.
(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 (“State Street’), 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 GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The fund intends to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the fund distributes substantially all of its net investment income and realized net capital gains, if any, to its respective shareholders 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 December 2011, Accounting Standards Update (“ASU”) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities,” was issued and is effective for interim and annual periods beginning after January 1, 2013. The ASU enhances disclosure requirements with respect to an entity’s rights of offset and related arrangements associated with its financial and derivative instruments. Management is currently evaluating the impact the adoption of ASU 2011-11 may have on the fund’s financial statement disclosures.
3. Risk Factors:
Investing in the fund may involve certain risks, as discussed in the fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The fund is subject to asset allocation risk, which is the risk that the selection of the underlying funds and the allocation of the fund’s assets among the various asset classes and market segments will cause the fund to underperform other funds with a similar investment objective.
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Financial Notes (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 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 an 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. | |
• | Exchange-Traded Funds (ETFs) Risk. When an underlying 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. |
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Schwab Balanced Fund
Financial Notes (continued)
3. Risk Factors (continued):
• | 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 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 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. | |
• | 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 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 transaction 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 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 its affiliates 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 Board.
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 underlying fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
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Schwab Balanced Fund
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
The fund may engage in direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended October 31, 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 October 31, 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 | 1.3% | |||
Schwab Core Equity Fund | 2.2% | |||
Small-Cap: | ||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 7.5% | |||
Fixed-Income Funds: | ||||
Intermediate-Term Bond: | ||||
Schwab Premier Income Fund | 3.5% | |||
Schwab Total Bond Market Fund | 3.0% |
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 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 | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 1,231,320 | 624,710 | (552,757 | ) | 1,303,273 | $18,441,312 | ($354,020 | ) | $320,666 | |||||||||||||||||||
Schwab Core Equity Fund | 2,251,895 | 704,922 | (796,290 | ) | 2,160,527 | 40,617,906 | (877,609 | ) | 697,584 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 904,643 | 260,265 | (298,090 | ) | 866,818 | 11,554,683 | 161,371 | — | ||||||||||||||||||||
Fixed-Income Fund: | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 1,239,024 | 519,300 | (387,427 | ) | 1,370,897 | 14,531,508 | 30,055 | 377,249 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 2,878,871 | 1,107,859 | (1,019,576 | ) | 2,967,154 | 28,929,754 | 175,220 | 697,108 | ||||||||||||||||||||
Total | $114,075,163 | ($864,983 | ) | $2,092,607 | ||||||||||||||||||||||||
* | 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 by the Board. The fund had no interfund borrowing or lending activity during the period.
During the period, the Schwab Balanced Fund received a payment of $617, related to state filing fees resulting from revised fee calculation methodologies being applied on sales of the fund’s shares in prior periods. This payment is presented in the fund’s Statement of Operations as “State filing fee reimbursement”.
All or a portion of the state filing fees were previously borne by CSIM through a reimbursement of fund expenses. As this expense was previously reimbursed, the payments received during the period had the effect of decreasing the total “Expense reduction by CSIM” in the fund’s Statement of Operations. The current net operating expense ratio was not impacted by this payment.
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Schwab Balanced Fund
Financial Notes (continued)
5. Transfer Agent Services:
Boston Financial Data Services, Inc. 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, an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The fund pays interest on the amount it borrows at rates that are negotiated periodically. The fund also pays an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the fund during the period. However, the fund may have utilized its overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2012, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||
$41,410,000 | $39,099,000 |
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 | |||||
(11/1/11-10/31/12) | (11/1/10-10/31/11) | |||||
$141,969 | $7,174 |
10. Federal Income Taxes:
As of October 31, 2012, the components of distributable earnings on a tax-basis were as follows:
Undistributed ordinary income | $1,031,813 | |||
Undistributed long-term capital gains | — | |||
Unrealized appreciation on investments | 9,528,965 | |||
Other unrealized appreciation/(depreciation) | — | |||
Net unrealized appreciation/(depreciation) | $9,528,965 | |||
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2012, the fund had capital loss carryforwards $4,073,757 available to offset future net capital gains before October 31, 2017.
For the year ended October 31, 2012, the fund had capital losses utilized as follows:
Capital losses utilized | $162,978 |
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Schwab Balanced Fund
Financial Notes (continued)
10. Federal Income Taxes (continued):
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Current period distributions | ||||
Ordinary income | $1,421,426 | |||
Long-term capital gains | — | |||
Return of capital | — | |||
Prior period distributions | ||||
Ordinary income | $1,483,071 | |||
Long-term capital gains | — | |||
Return of capital | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2012, the fund made the following reclassifications:
Capital shares | $— | |||
Undistributed net investment income | 40,486 | |||
Net realized capital gains/(losses) | (40,486 | ) |
As of October 31, 2012, 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, 2012, the fund did not incur any interest or penalties.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. However, such losses must be utilized prior to the pre-enactment capital losses, which increases the likelihood that the pre-enactment capital losses will expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital loss, 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.
The fund has adopted the noted provisions of the Act for the period ending October 31, 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.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Balanced Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Balanced Fund (one of the portfolios constituting Schwab Capital Trust, hereafter referred to as the “Fund”) at October 31, 2012, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities and investments in the underlying funds at October 31, 2012 by correspondence with the custodian and transfer agent of the underlying funds, respectively, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 14, 2012
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Other Federal Tax Information (unaudited)
For corporate shareholders, 41.16% of the fund’s dividend distributions paid during the fiscal year ended October 31, 2012, qualify for the corporate dividends received deduction.
For the fiscal year ended October 31, 2012, the fund designates $210,992 of the dividend distributions as qualified dividends for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2013 via IRS form 1099 of the amounts for use in preparing their 2012 income tax return.
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Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Balanced Fund (the “Fund”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Fund that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Fund at meetings held on April 24, 2012, and June 5, 2012, and approved the renewal of the Agreement with respect to the Fund for an additional one year term at the meeting held on June 5, 2012. The Board’s approval of the Agreement with respect to the Fund was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates dedicated to the Fund; |
2. | the Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | the Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to the Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Fund and its shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that many of the Fund’s shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund supported renewal of the Agreement with respect to the Fund.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Fund. Specifically, the Trustees considered the Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of the Fund, the Trustees considered both risk and shareholder risk expectations for the Fund and the appropriateness of the benchmark used to compare the performance of the Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund
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expenses and adviser profitability discussed below. The Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to the Fund. These factors included the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Fund supported renewal of the Agreement with respect to the Fund.
Fund Expenses. With respect to the Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreement, and the Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep the Fund’s expense cap for so long as CSIM serves as the adviser to the Fund. The Trustees also considered fees charged by CSIM to other mutual funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Fund are reasonable and supported renewal of the Agreement with respect to the Fund.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Fund, such as whether, by virtue of its management of the Fund, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Fund.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to the Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Fund obtains reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Fund and concluded that the compensation under the Agreement with respect to the Fund is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the fund covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 91 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 fund’s 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. | 74 | 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). | 74 | 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). | 74 | 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. | 74 | 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). | 74 | 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). | 74 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 ��� Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 74 | 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. | 74 | 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. | 91 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President 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 and 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. In addition to their employment with Schwab, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation, the parent company of Schwab and the investment adviser. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays 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.
Citigroup Non-U.S. Dollar World Government Bond Index An index that measures the total rate of return performance for the government bonds of 23 countries, excluding the U.S., with a remaining maturity of at least one year.
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 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.
MSCI Emerging Markets Index A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
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.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
• | WEBSITE USAGE. |
When you visit our websites, we may use devices known as “cookies,” graphic interchange format files (GIFs), or other similar web tools to enhance your web experience. These tools help us to recognize you, maintain your web session, and provide a more personalized experience. To learn more, please click the Privacy link on our website.
How We Share and Use Your Information
We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
• | when we use other companies to provide services for us, such as printing and mailing your account statements; |
• | when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control). |
State Laws
We will comply with state laws that apply to the disclosure or use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.
Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.
We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2012 Schwab Funds. All rights reserved.
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Notes
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Notes
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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 Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large Company* Index Fund
Schwab Fundamental US Small Company* Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small Company Index Fund
Schwab Fundamental Emerging Markets* Large Company Index Fund
Schwab Global Real Estate Fundtm
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab Intermediate-Term Bond Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fund
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
P.O. Box 3812, Englewood, CO 80155–3812
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
© 2012 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR36112-06
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Annual report dated October 31, 2012, enclosed.
Schwab MarketTrack Portfolios®
Schwab MarketTrack
All Equity Portfoliotm
Schwab MarketTrack
Growth Portfoliotm
Schwab MarketTrack
Balanced Portfoliotm
Schwab MarketTrack
Conservative Portfoliotm
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This wrapper is not part of the shareholder report.
Table of Contents
Schwab MarketTrack Portfolios®
Annual Report
October 31, 2012
Schwab MarketTrack
All Equity Portfoliotm
Schwab MarketTrack
Growth Portfoliotm
Schwab MarketTrack
Balanced Portfoliotm
Schwab MarketTrack
Conservative Portfoliotm
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Schwab MarketTrack Portfolios®
In This Report
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Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
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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) | 11.02% | |||
All Equity Composite Index | 11.71% | |||
Fund Category: Morningstar Large-Cap Blend | 12.55% | |||
Performance Details | pages 6-7 | |||
Schwab MarketTrack Growth Portfoliotm (Ticker Symbol: SWHGX) | 10.03% | |||
Growth Composite Index | 10.65% | |||
Fund Category: Morningstar Aggressive Allocation | 9.03% | |||
Performance Details | pages 8-9 | |||
Schwab MarketTrack Balanced Portfoliotm (Ticker Symbol: SWBGX) | 8.61% | |||
Balanced Composite Index | 9.31% | |||
Fund Category: Morningstar Moderate Allocation | 9.47% | |||
Performance Details | pages 10-11 | |||
Schwab MarketTrack Conservative Portfoliotm (Ticker Symbol: SWCGX) | 7.07% | |||
Conservative Composite Index | 7.93% | |||
Fund Category: Morningstar Conservative Allocation | 7.85% | |||
Performance Details | pages 12-13 | |||
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.
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 the funds’ prospectus for further detail and eligibility requirements. |
2 Schwab MarketTrack Portfolios
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From the President
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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. The Schwab MarketTrack Portfolios combine a variety of passive strategies in U.S. and international markets, seeking to provide diversification, while targeting varying degrees of risk.
For the 12 months ended October 31, 2012, the portfolios generated positive returns, as U.S. stocks solidly outperformed international equities, and as U.S. fixed-income securities outperformed the narrowly positive returns of international fixed-income securities.
U.S. equities benefitted from low rates and continued governmental efforts to encourage faster economic growth, while the euro zone’s sovereign debt crisis represented an ongoing challenge, particularly for international equities. With concerns regarding elections in Greece and worries that the debt crisis might spread, international equities endured sharp losses in May. Subsequently, European leaders achieved meaningful progress, and international equities began to recover.
Bonds—in the U.S. and internationally—experienced intermittent periods of strength, while economic growth decelerated in many parts of the world. The European Central Bank, Bank of England, Bank of Japan, and U.S. Federal Reserve were among the world’s central banks that maintained low interest-rate policies geared toward improving their region’s or country’s economic prospects.
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.
![]() | 15.21% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 12.08% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 5.15% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.25% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.06% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctcaptst04.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management’s views and portfolio holdings may have changed since the report date.
Schwab MarketTrack Portfolios 3
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From the President continued
For the 12 months ended October 31, 2012, the portfolios generated positive returns, as U.S. stocks solidly outperformed international equities, and as U.S. fixed-income securities outperformed the narrowly positive returns of international fixed-income securities.
U.S. stocks and bonds outperformed their international counterparts for the report period. In spite of softening U.S. corporate profit growth, the Russell 1000 Index returned 15.0%, compared with the 5.2% return of the MSCI EAFE Index and the 3.0% return of the MSCI Emerging Markets Index in U.S. dollar terms. The Barclays U.S. Aggregate Bond Index returned 5.3%, and in U.S. dollar terms, the Citigroup Non-U.S. Dollar World Government Bond Index returned 1.6%.
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 frequently asked questions or for more information about the Schwab MarketTrack Portfolios, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab MarketTrack Portfolios
Table of Contents
Portfolio Management
![]() | Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the funds. She was appointed portfolio manager of the funds in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. Ms. Tang replaced Jake Gilliam as portfolio manager during the reporting period. |
Schwab MarketTrack Portfolios 5
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Schwab MarketTrack All Equity Portfolio™
The Schwab MarketTrack All Equity Portfolio (the portfolio) seeks high capital growth through an all-stock portfolio. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation is 100% in stock investments, with certain percentages for different segments of the stock market. The portfolio seeks to remain close to the target allocations of 45% in U.S. large-cap, 30% in international, and 25% in U.S. small-cap stocks, and typically does not change its target allocation. The portfolio invests mainly in other Schwab Funds including index funds, which seek to track the total returns of various market indices. For more information concerning the portfolio’s investment objective, strategies, and risks, please see the portfolio’s prospectus.
For the 12-month period ended October 31, 2012, the portfolio returned 11.02%; its internally calculated comparative index, the All Equity Composite Index (the composite index), returned 11.71%. Unlike the portfolio’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow economic growth both domestically and abroad and ongoing concerns over the European debt crisis, world stock markets posted positive gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% for the reporting period versus the MSCI EAFE Index’s gain of 5.15%. Emerging markets were weaker, with the MSCI Emerging Markets Index up just 2.98%. International markets showed little differentiation between growth and value, with the MSCI EAFE Value Index eclipsing its Growth counterpart by less than 10 basis points. In the U.S., large-cap stocks outperformed small-caps by nearly 3%, with value outperforming growth by nearly 4%.
Positioning and Strategies. Over the reporting period, the portfolio’s asset allocations were broadly in line with those of the composite index.
The portfolio’s U.S. equity exposures provided the greatest contribution to the portfolio’s total return for the period. The largest contribution came from the portfolio’s position in the Schwab S&P 500 Index Fund, which gained 15.09% for the period; it also represented the portfolio’s largest position. The portfolio’s next-largest contributor was the Schwab Small-Cap Index Fund, which returned 11.87%. On a relative basis, the Schwab S&P 500 Index Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73% for the reporting period. However, the Schwab Small-Cap Index Fund underperformed that same benchmark, contributing to the portfolio’s underperformance relative to the composite index.
The portfolio’s international equity exposure also added both absolute and relative value. The portfolio’s position in the Schwab International Index Fund gained 6.07% for the period, comfortably outpacing the composite index’s international equity allocation component, the MSCI EAFE Index (Net), which returned 4.61%.
As of 10/31/12:
Statistics
Number of Holdings | 4 | |||
Portfolio Turnover Rate | 6% |
Asset Class Weightings % of Investments
Equity Funds – Large-Cap | 44.7% | |||
Equity Funds – International | 30.0% | |||
Equity Funds – Small-Cap | 24.9% | |||
Short-Term Investments | 0.4% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab S&P 500 Index Fund | 44.7% | |||
Schwab International Index Fund | 30.0% | |||
Schwab Small-Cap Index Fund | 24.9% | |||
Total | 99.6% |
Management’s views and 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 | This list is not a recommendation of any security by the investment adviser. | |
2 | The holdings listed exclude any temporary liquidity investments. |
6 Schwab MarketTrack Portfolios
Table of Contents
Schwab MarketTrack All Equity Portfoliotm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsmaep.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack All Equity Portfoliotm (5/19/98) | 11.02 | % | -1.26 | % | 7.45 | % | |||||||||
All Equity Composite Index3 | 11.71 | % | -1.16 | % | 7.82 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 12.55 | % | -0.71 | % | 6.42 | % |
Fund Expense Ratios4: Net 0.65%; Gross 0.68%
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 | 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. |
Schwab MarketTrack Portfolios 7
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Schwab MarketTrack Growth Portfolio™
The Schwab MarketTrack Growth Portfolio (the portfolio) seeks high capital growth with less volatility than an all-stock portfolio. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation includes stock, bond, and cash investments. The portfolio seeks to remain close to the target allocations of 80% stocks, 15% bonds, and 5% cash, and typically does not change its target allocation. The portfolio invests mainly in other Schwab Funds including index funds, which seek to track the total returns of various market indices. For more information concerning the portfolio’s investment objective, strategies, and risks, please see the portfolio’s prospectus.
For the 12-month period ended October 31, 2012, the portfolio’s Investor Shares returned 10.03%; the portfolio’s internally calculated comparative index, the Growth Composite Index (the composite index), returned 10.65%. Unlike the return of the portfolio, the return of the composite index does not include operational and transactional costs.
Market Highlights. Despite continued slow economic growth both domestically and abroad and ongoing concerns over the European debt crisis, world stock markets posted positive gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% for the reporting period versus the MSCI EAFE Index’s gain of 5.15%. Emerging markets were weaker, with the MSCI Emerging Markets Index up just 2.98%. International markets showed little differentiation between growth and value, with the MSCI EAFE Value Index eclipsing its Growth counterpart by less than 10 basis points. In the U.S., large-cap stocks outperformed small-caps by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while the Barclays U.S. Treasury Index returned 3.66%.
Positioning and Strategies. Over the reporting period, the portfolio’s asset allocations were broadly in line with those of the composite index.
The portfolio’s U.S. equity exposures provided the greatest contribution to the total return for the period. The largest contribution came from the portfolio’s position in the Schwab S&P 500 Index Fund, which gained 15.09% for the period; it also represented the portfolio’s largest position. The portfolio’s next-largest contributor was the Schwab Small-Cap Index Fund, which returned 11.87%. On a relative basis, the Schwab S&P 500 Index Fund outperformed the composite index’s U.S. equity component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73% for the reporting period. The Schwab Small-Cap Index Fund, however, underperformed that same benchmark, contributing to the portfolio’s underperformance relative to the composite index.
The portfolio’s international equity exposure also added both absolute and relative value. The portfolio’s position in the Schwab International Index Fund gained 6.07% for the period, comfortably outpacing the composite index’s international equity allocation component, the MSCI EAFE Index (Net), which returned 4.61%.
The fixed-income allocation also generated positive returns that boosted the portfolio’s total return. The Schwab Total Bond Market Fund gained 4.94% for the reporting period; however, it slightly underperformed the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index, which was up 5.25%. As a result, the allocation slightly detracted from the portfolio’s relative performance.
As of 10/31/12:
Statistics
Number of Holdings | 7 | |||
Portfolio Turnover Rate | 9% |
Asset Class Weightings % of Investments
Equity Funds – Large-Cap | 40.1% | |||
Equity Funds – International | 20.3% | |||
Equity Funds – Small-Cap | 19.9% | |||
Fixed-Income Funds – Intermediate-Term Bond | 14.8% | |||
Short-Term Investments | 3.7% | |||
Money Market Funds | 1.2% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab S&P 500 Index Fund | 40.4% | |||
Schwab International Index Fund | 20.4% | |||
Schwab Small-Cap Index Fund | 20.0% | |||
Schwab Total Bond Market Fund | 14.9% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.2% | |||
Total | 96.9% |
Management’s views and 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 | This list is not a recommendation of any security by the investment adviser. | |
2 | The holdings listed exclude any temporary liquidity investments. |
8 Schwab MarketTrack Portfolios
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Schwab MarketTrack Growth Portfoliotm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsmgp.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Growth Portfoliotm (11/20/95) | 10.03 | % | 0.22 | % | 6.86 | % | |||||||||
Growth Composite Index3 | 10.65 | % | 0.63 | % | 7.37 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Fund Category: Morningstar Aggressive Allocation | 9.03 | % | -0.32 | % | 6.54 | % |
Fund Expense Ratios4: Net 0.66%; Gross 0.68%
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 | 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. |
Schwab MarketTrack Portfolios 9
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Schwab MarketTrack Balanced Portfolio™
The Schwab MarketTrack Balanced Portfolio (the portfolio) seeks both capital growth and income. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation includes bond, stock, and cash investments. The portfolio seeks to remain close to the target allocations of 60% stocks, 35% bonds, and 5% cash, and typically does not change its target allocation. The portfolio invests mainly in other Schwab Funds including index funds, which seek to track the total returns of various market indices. For more information concerning the portfolio’s investment objective, strategies, and risks, please see the portfolio’s prospectus.
For the 12-month period ended October 31, 2012, the portfolio returned 8.61%; its internally calculated comparative index, the Balanced Composite Index (the composite index), returned 9.31%. Unlike the return of the portfolio, the return of the composite index does not include operational and transactional costs.
Market Highlights. Despite continued slow economic growth both domestically and abroad and ongoing concerns over the European debt crisis, world stock markets posted positive gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% for the reporting period versus the MSCI EAFE Index’s gain of 5.15%. Emerging markets were weaker, with the MSCI Emerging Markets Index up just 2.98%. International markets showed little differentiation between growth and value, with the MSCI EAFE Value Index eclipsing its Growth counterpart by less than 10 basis points. In the U.S., large-cap stocks outperformed small-caps by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while the Barclays U.S. Treasury Index returned 3.66%.
Positioning and Strategies. Over the reporting period, the portfolio’s asset allocations were broadly in line with those of the composite index.
The portfolio’s U.S. equity exposures provided the greatest contribution to the total return for the period. The largest contribution came from the portfolio’s position in the Schwab S&P 500 Index Fund, which gained 15.09% for the period; it also represented the portfolio’s largest position. The portfolio’s next-largest contributor was the Schwab Small-Cap Index Fund, which returned 11.87%. On a relative basis, the Schwab S&P 500 Index Fund outperformed the composite index’s U.S. equity component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73% for the reporting period. However, the Schwab Small-Cap Index Fund underperformed that same benchmark, contributing to the portfolio’s underperformance relative to its index.
The fixed-income allocation also generated positive returns that boosted the portfolio’s total return. The Schwab Total Bond Market Fund gained 4.94% for the reporting period; however, it slightly underperformed the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index, which was up 5.25%. As a result, the allocation slightly detracted from the portfolio’s relative performance.
The portfolio’s international equity exposure also added both absolute and relative value. The portfolio’s position in the Schwab International Index Fund gained 6.07% for the period, comfortably outpacing the composite index’s international equity allocation component, the MSCI EAFE Index (Net), which returned 4.61%.
As of 10/31/12:
Statistics
Number of Holdings | 7 | |||
Portfolio Turnover Rate | 12% |
Asset Class Weightings % of Investments
Fixed-Income Funds – Intermediate-Term Bond | 35.0% | |||
Equity Funds – Large-Cap | 30.0% | |||
Equity Funds – International | 15.1% | |||
Equity Funds – Small-Cap | 15.0% | |||
Short-Term Investments | 3.8% | |||
Money Market Funds | 1.1% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Total Bond Market Fund | 35.2% | |||
Schwab S&P 500 Index Fund | 30.2% | |||
Schwab International Index Fund | 15.2% | |||
Schwab Small-Cap Index Fund | 15.0% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.1% | |||
Total | 96.7% |
Management’s views and 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 | This list is not a recommendation of any security by the investment adviser. | |
2 | The holdings listed exclude any temporary liquidity investments. |
10 Schwab MarketTrack Portfolios
Table of Contents
Schwab MarketTrack Balanced Portfoliotm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsmbf.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Balanced Portfoliotm (11/20/95) | 8.61 | % | 1.18 | % | 6.19 | % | |||||||||
Balanced Composite Index3 | 9.31 | % | 2.23 | % | 7.00 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.38 | % | 5.39 | % | |||||||||
Fund Category: Morningstar Moderate Allocation | 9.47 | % | 1.43 | % | 6.37 | % |
Fund Expense Ratios4: Net 0.69%; Gross 0.71%
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 | 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. |
Schwab MarketTrack Portfolios 11
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Schwab MarketTrack Conservative Portfolio™
The Schwab MarketTrack Conservative Portfolio (the portfolio) seeks income and more growth potential than an all-bond portfolio. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation includes bond, stock, and cash investments. The portfolio seeks to remain close to the target allocations of 55% bonds, 40% stocks, 5% cash, and typically does not change its target allocation. The portfolio invests mainly in other Schwab Funds including index funds, which seek to track the total returns of various market indices. For more information concerning the portfolio’s investment objective, strategies, and risks, please see the portfolio’s prospectus.
For the 12-month period ended October 31, 2012, the portfolio returned 7.07%; its internally calculated comparative index, the Conservative Composite Index (the composite index), returned 7.93%. Unlike the portfolio’s return, the composite index’s return does not include operational and transactional costs.
Market Highlights. Despite continued slow economic growth both domestically and abroad and ongoing concerns over the European debt crisis, world stock markets posted positive gains over the reporting period. U.S. markets significantly outperformed international markets, with the S&P 500 Index up 15.21% for the reporting period versus the MSCI EAFE Index’s gain of 5.15%. Emerging markets were weaker, with the MSCI Emerging Markets Index up just 2.98%. International markets showed little differentiation between growth and value, with the MSCI EAFE Value Index eclipsing its Growth counterpart by less than 10 basis points. In the U.S., large-cap stocks outperformed small-caps by nearly 3%, with value outperforming growth by nearly 4%. U.S. bonds, as measured by the Barclays U.S. Aggregate Bond Index, returned 5.25% for the period, while the Barclays U.S. Treasury Index returned 3.66%.
Positioning and Strategies. Over the reporting period, the portfolio’s asset allocations were broadly in line with those of the composite index.
The portfolio’s U.S. equity exposures provided the greatest contribution to the total return for the period. The largest contribution came from the portfolio’s position in the Schwab S&P 500 Index Fund, which gained 15.09% for the period; it also represented the portfolio’s largest position. The portfolio’s next-largest contributor was the Schwab Small-Cap Index Fund, which returned 11.87%. On a relative basis, the Schwab S&P 500 Index Fund outperformed the composite index’s U.S. equity component, the Dow Jones U.S. Total Stock Market Index, which returned 14.73% for the reporting period. However, the Schwab Small-Cap Index Fund underperformed that same benchmark, contributing to the portfolio’s underperformance relative to the composite index.
The fixed-income allocation also generated positive returns that boosted the portfolio’s total return. The Schwab Total Bond Market Fund gained 4.94% for the reporting period; however, it slightly underperformed the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index, which was up 5.25%. As a result, the allocation slightly detracted from the portfolio’s relative performance.
The portfolio’s international equity exposure also added both absolute and relative value. The portfolio’s position in the Schwab International Index Fund gained 6.07% for the period, comfortably outpacing the composite index’s international equity allocation component, the MSCI EAFE Index (Net), which returned 4.61%.
As of 10/31/12:
Statistics
Number of Holdings | 7 | |||
Portfolio Turnover Rate | 19% |
Asset Class Weightings % of Investments
Fixed-Income Funds – Intermediate-Term Bond | 55.0% | |||
Equity Funds – Large-Cap | 20.0% | |||
Equity Funds – International | 10.1% | |||
Equity Funds – Small-Cap | 9.9% | |||
Short-Term Investments | 3.9% | |||
Money Market Funds | 1.1% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Total Bond Market Fund | 55.3% | |||
Schwab S&P 500 Index Fund | 20.1% | |||
Schwab International Index Fund | 10.2% | |||
Schwab Small-Cap Index Fund | 9.9% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.0% | |||
Total | 96.5% |
Management’s views and 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 | This list is not a recommendation of any security by the investment adviser. | |
2 | The holdings listed exclude any temporary liquidity investments. |
12 Schwab MarketTrack Portfolios
Table of Contents
Schwab MarketTrack Conservative Portfoliotm
Performance and Fund Facts as of 10/31/12
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.
October 31, 2002 – October 31, 2012
Performance of Hypothetical
$10,000 Investment1,3
Performance of Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctsmcp.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Conservative Portfoliotm (11/20/95) | 7.07 | % | 2.00 | % | 5.41 | % | |||||||||
Conservative Composite Index3 | 7.93 | % | 3.67 | % | 6.51 | % | |||||||||
S&P 500® Index | 15.21 | % | 0.36 | % | 6.91 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 5.25 | % | 6.38 | % | 5.39 | % | |||||||||
Fund Category: Morningstar Conservative Allocation | 7.85 | % | 3.07 | % | 5.80 | % |
Fund Expense Ratios4: Net 0.72%; Gross 0.77%
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 | 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. |
Schwab MarketTrack Portfolios 13
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2012 and held through October 31, 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 5/1/12 | at 10/31/12 | 5/1/12–10/31/12 | |||||||||||||
Schwab MarketTrack All Equity Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,017.50 | $ | 2.54 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.62 | $ | 2.54 | |||||||||
Schwab MarketTrack Growth Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,018.00 | $ | 2.54 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.62 | $ | 2.54 | |||||||||
Schwab MarketTrack Balanced Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,018.70 | $ | 2.54 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.62 | $ | 2.54 | |||||||||
Schwab MarketTrack Conservative Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,019.60 | $ | 2.54 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.62 | $ | 2.54 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. The expenses incurred by the underlying funds in which the portfolios invest are not included in this ratio. | |
2 | Expenses for each portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 366 days of the fiscal year. |
14 Schwab MarketTrack Portfolios
Table of Contents
Schwab MarketTrack All Equity Portfolio™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.52 | 11.30 | 9.82 | 9.44 | 15.58 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.25 | 0.16 | 0.12 | 0.30 | 0.20 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.02 | 0.27 | 1.50 | 0.83 | (6.11 | ) | ||||||||||||||||
Total from investment operations | 1.27 | 0.43 | 1.62 | 1.13 | (5.91 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | (0.21 | ) | (0.14 | ) | (0.23 | ) | (0.22 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | (0.52 | ) | (0.01 | ) | |||||||||||||||
Total distributions | — | (0.21 | ) | (0.14 | ) | (0.75 | ) | (0.23 | ) | |||||||||||||
Net asset value at end of period | 12.79 | 11.52 | 11.30 | 9.82 | 9.44 | |||||||||||||||||
Total return (%) | 11.02 | 3.76 | 16.62 | 13.54 | (38.46 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.54 | 0.53 | 0.54 | 0.67 | 0.73 | |||||||||||||||||
Net investment income (loss) | 1.93 | 1.37 | 1.14 | 3.46 | 1.46 | |||||||||||||||||
Portfolio turnover rate | 6 | 12 | 8 | 10 | 10 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 475 | 476 | 489 | 461 | 429 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
See financial notes 15
Table of Contents
Schwab MarketTrack All Equity Portfolio
Portfolio Holdings as of October 31, 2012
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 | 384,617,735 | 473,017,258 | ||||||||
0 | .4% | Short-Term Investment | 1,943,668 | 1,943,668 | ||||||||
100 | .0% | Total Investments | 386,561,403 | 474,960,926 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | (191,046 | ) | ||||||||
100 | .0% | Total Net Assets | 474,769,880 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.6% of net assets | ||||||||
Equity Funds 99.6% | ||||||||
International 30.0% | ||||||||
Schwab International Index Fund (a) | 8,737,494 | 142,595,897 | ||||||
Large-Cap 44.7% | ||||||||
Schwab S&P 500 Index Fund (a) | 9,503,472 | 212,402,603 | ||||||
Small-Cap 24.9% | ||||||||
Schwab Small-Cap Index Fund (a) | 5,551,212 | 118,018,758 | ||||||
Total Other Investment Companies | ||||||||
(Cost $384,617,735) | 473,017,258 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.4% of net assets | ||||||||
Time Deposit 0.4% | ||||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 1,943,668 | 1,943,668 | ||||||
Total Short-Term Investment | ||||||||
(Cost $1,943,668) | 1,943,668 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $401,436,404 and the unrealized appreciation and depreciation were $73,524,522 and ($0), respectively, with a net unrealized appreciation of $73,524,522.
(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 October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $473,017,258 | $— | $— | $473,017,258 | ||||||||||||
Short-Term Investment1 | — | 1,943,668 | — | 1,943,668 | ||||||||||||
Total | $473,017,258 | $1,943,668 | $— | $474,960,926 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
16 See financial notes
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $384,617,735) | $473,017,258 | |||||
Investments in unaffiliated issuers, at value (cost $1,943,668) | + | 1,943,668 | ||||
Total investments, at value (cost $386,561,403) | 474,960,926 | |||||
Receivables: | ||||||
Investments sold | 300,000 | |||||
Fund shares sold | 581,404 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 12,554 | ||||
Total assets | 475,854,886 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 300,000 | |||||
Investment adviser and administrator fees | 7,109 | |||||
Shareholder service fees | 9,640 | |||||
Fund shares redeemed | 668,773 | |||||
Accrued expenses | + | 99,484 | ||||
Total liabilities | 1,085,006 | |||||
Net Assets | ||||||
Total assets | 475,854,886 | |||||
Total liabilities | − | 1,085,006 | ||||
Net assets | $474,769,880 | |||||
Net Assets by Source | ||||||
Capital received from investors | 441,103,071 | |||||
Net investment income not yet distributed | 12,560,360 | |||||
Net realized capital losses | (67,293,074 | ) | ||||
Net unrealized capital gains | 88,399,523 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$474,769,880 | 37,119,331 | $12.79 |
See financial notes 17
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $11,540,081 | |||||
Interest | + | 498 | ||||
Total investment income | 11,540,579 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,093,550 | |||||
Shareholder service fees | 1,165,102 | |||||
Shareholder reports | 98,648 | |||||
Transfer agent fees | 45,144 | |||||
Professional fees | 37,824 | |||||
Registration fees | 33,384 | |||||
Portfolio accounting fees | 24,613 | |||||
Custodian fees | 11,143 | |||||
Trustees’ fees | 8,994 | |||||
State filing fee reimbursement (Note 4) | (7,153 | ) | ||||
Other expenses | + | 65,858 | ||||
Total expenses | 2,577,107 | |||||
Expense reduction by CSIM and its affiliates1 | − | 199,825 | ||||
Net expenses | − | 2,377,282 | ||||
Net investment income | 9,163,297 | |||||
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 | 3,972,006 | |||||
Net realized gains on unaffiliated investments | + | 14 | ||||
Net realized gains | 10,527,329 | |||||
Net unrealized gains on affiliated underlying funds | + | 30,350,130 | ||||
Net realized and unrealized gains | 40,877,459 | |||||
Increase in net assets resulting from operations | $50,040,756 |
1 | Expense reduction by CSIM was decreased by a payment to adviser for state registration fees of $7,153. See financial note 4 for additional information. |
18 See financial notes
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $9,163,297 | $6,999,406 | ||||||||
Net realized gains | 10,527,329 | 415,209 | ||||||||
Net unrealized gains | + | 30,350,130 | 12,035,738 | |||||||
Increase in net assets from operations | 50,040,756 | 19,450,353 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | $— | ($9,214,430 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,182,278 | $38,781,401 | 5,888,921 | $70,518,573 | ||||||||||||||
Shares reinvested | — | — | 719,642 | 8,721,290 | ||||||||||||||
Shares redeemed | + | (7,420,620 | ) | (90,468,387 | ) | (8,520,403 | ) | (101,904,500 | ) | |||||||||
Net transactions in fund shares | (4,238,342 | ) | ($51,686,986 | ) | (1,911,840 | ) | ($22,664,637 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 decrease | + | (4,238,342 | ) | (1,646,230 | ) | (1,911,840 | ) | (12,428,714 | ) | |||||||||
End of period | 37,119,331 | $474,769,880 | 41,357,673 | $476,416,110 | ||||||||||||||
Net investment income not yet distributed | $12,560,360 | $— |
See financial notes 19
Table of Contents
Schwab MarketTrack Growth Portfolio™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 16.85 | 16.35 | 14.51 | 13.71 | 21.09 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.30 | 0.24 | 0.19 | 0.39 | 0.37 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.35 | 0.51 | 1.95 | 1.25 | (6.94 | ) | ||||||||||||||||
Total from investment operations | 1.65 | 0.75 | 2.14 | 1.64 | (6.57 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.42 | ) | (0.25 | ) | (0.30 | ) | (0.40 | ) | (0.41 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.44 | ) | (0.40 | ) | |||||||||||||||
Total distributions | (0.42 | ) | (0.25 | ) | (0.30 | ) | (0.84 | ) | (0.81 | ) | ||||||||||||
Net asset value at end of period | 18.08 | 16.85 | 16.35 | 14.51 | 13.71 | |||||||||||||||||
Total return (%) | 10.03 | 4.55 | 14.86 | 12.95 | (32.27 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.53 | 0.52 | 0.52 | 0.66 | 0.71 | |||||||||||||||||
Net investment income (loss) | 1.78 | 1.39 | 1.25 | 3.03 | 1.99 | |||||||||||||||||
Portfolio turnover rate | 9 | 17 | 14 | 23 | 10 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 566 | 562 | 549 | 507 | 454 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
20 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Portfolio Holdings as of October 31, 2012
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 | .9% | Other Investment Companies | 386,865,364 | 548,961,214 | ||||||||
3 | .7% | Short-Term Investments | 21,053,959 | 21,053,959 | ||||||||
100 | .6% | Total Investments | 407,919,323 | 570,015,173 | ||||||||
(0 | .6)% | Other Assets and Liabilities, Net | (3,572,784 | ) | ||||||||
100 | .0% | Total Net Assets | 566,442,389 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.9% of net assets | ||||||||
Equity Funds 80.8% | ||||||||
International 20.4% | ||||||||
Schwab International Index Fund (a) | 7,071,253 | 115,402,857 | ||||||
Large-Cap 40.4% | ||||||||
Schwab S&P 500 Index Fund (a) | 10,227,080 | 228,575,241 | ||||||
Small-Cap 20.0% | ||||||||
Schwab Small-Cap Index Fund (a) | 5,342,344 | 113,578,231 | ||||||
457,556,329 | ||||||||
Fixed-Income Fund 14.9% | ||||||||
Intermediate-Term Bond 14.9% | ||||||||
Schwab Total Bond Market Fund (a) | 8,652,421 | 84,361,107 | ||||||
Money Market Fund 1.2% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 7,043,778 | 7,043,778 | ||||||
Total Other Investment Companies | ||||||||
(Cost $386,865,364) | 548,961,214 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.7% of net assets | ||||||||
Time Deposits 3.7% | ||||||||
BNP Paribas | ||||||||
0.03%, 11/01/12 | 3,964,424 | 3,964,424 | ||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 17,089,535 | 17,089,535 | ||||||
Total Short-Term Investments | ||||||||
(Cost $21,053,959) | 21,053,959 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $412,886,278 and the unrealized appreciation and depreciation were $157,128,895 and ($0), respectively, with a net unrealized appreciation of $157,128,895.
(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 October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $548,961,214 | $— | $— | $548,961,214 | ||||||||||||
Short-Term Investments1 | — | 21,053,959 | — | 21,053,959 | ||||||||||||
Total | $548,961,214 | $21,053,959 | $— | $570,015,173 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 21
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $386,865,364) | $548,961,214 | |||||
Investments in unaffiliated issuers, at value (cost $21,053,959) | + | 21,053,959 | ||||
Total investments, at value (cost $407,919,323) | 570,015,173 | |||||
Cash | 9,984 | |||||
Receivables: | ||||||
Investments sold | 535,000 | |||||
Fund shares sold | 321,257 | |||||
Dividends | 175,638 | |||||
Prepaid expenses | + | 17,085 | ||||
Total assets | 571,074,137 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 175,098 | |||||
Investment adviser and administrator fees | 9,215 | |||||
Shareholder service fees | 11,702 | |||||
Fund shares redeemed | 4,360,249 | |||||
Accrued expenses | + | 75,484 | ||||
Total liabilities | 4,631,748 | |||||
Net Assets | ||||||
Total assets | 571,074,137 | |||||
Total liabilities | − | 4,631,748 | ||||
Net assets | $566,442,389 | |||||
Net Assets by Source | ||||||
Capital received from investors | 422,675,653 | |||||
Distributions in excess of net investment income | (526,634 | ) | ||||
Net realized capital losses | (17,802,480 | ) | ||||
Net unrealized capital gains | 162,095,850 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$566,442,389 | 31,330,478 | $18.08 |
22 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $15,117,427 | |||||
Interest | + | 4,971 | ||||
Total investment income | 15,122,398 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,486,366 | |||||
Shareholder service fees: | ||||||
Investor Shares | 1,396,721 | |||||
P Shares1 | 78,153 | |||||
Shareholder reports | 77,631 | |||||
Transfer agent fees | 50,992 | |||||
Professional fees | 40,712 | |||||
Portfolio accounting fees | 28,740 | |||||
Registration fees | 27,870 | |||||
Custodian fees | 15,056 | |||||
Trustees’ fees | 10,317 | |||||
Other expenses | + | 83,048 | ||||
Total expenses | 3,295,606 | |||||
Expense reduction by CSIM and its affiliates | − | 182,936 | ||||
Net expenses | − | 3,112,670 | ||||
Net investment income | 12,009,728 | |||||
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 | 16,065,726 | |||||
Net realized gains on unaffiliated investments | + | 2,140 | ||||
Net realized gains | 23,457,290 | |||||
Net unrealized gains on affiliated underlying funds | + | 25,141,652 | ||||
Net realized and unrealized gains | 48,598,942 | |||||
Increase in net assets resulting from operations | $60,608,670 |
1 | Effective December 6, 2012, the P Share class was terminated. See financial note 11 for additional information. |
See financial notes 23
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $12,009,728 | $9,458,447 | ||||||||
Net realized gains | 23,457,290 | 3,584,842 | ||||||||
Net unrealized gains | + | 25,141,652 | 16,466,332 | |||||||
Increase in net assets from operations | 60,608,670 | 29,509,621 | ||||||||
Distributions to Shareholders1 | ||||||||||
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 Shares1
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 3,069,722 | $53,342,242 | 4,827,264 | $82,645,614 | ||||||||||||||
P Shares | 1,037,994 | 17,419,210 | 1,047,316 | 17,774,937 | ||||||||||||||
Total shares sold | 4,107,716 | $70,761,452 | 5,874,580 | $100,420,551 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 797,108 | $13,048,670 | 462,317 | $7,831,643 | ||||||||||||||
P Shares | + | 161,786 | 2,646,818 | 91,343 | 1,545,531 | |||||||||||||
Total shares reinvested | 958,894 | $15,695,488 | 553,660 | $9,377,174 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (5,854,994 | ) | ($101,946,667 | ) | (5,542,830 | ) | ($94,754,492 | ) | ||||||||||
P Shares | + | (6,937,729 | ) | (120,546,911 | ) | (808,713 | ) | (13,850,276 | ) | |||||||||
Total shares redeemed | (12,792,723 | ) | ($222,493,578 | ) | (6,351,543 | ) | ($108,604,768 | ) | ||||||||||
Net transactions in fund shares | (7,726,113 | ) | ($136,036,638 | ) | 76,697 | $1,192,957 | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (7,726,113 | ) | (91,793,644 | ) | 76,697 | 20,942,134 | |||||||||||
End of period | 31,330,478 | $566,442,389 | 39,056,591 | $658,236,033 | ||||||||||||||
Distributions in excess of net investment income | ($526,634 | ) | $— |
1 | Effective December 6, 2012, the P Share class was terminated. See financial note 11 for additional information. |
24 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.41 | 14.96 | 13.54 | 12.74 | 18.13 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.29 | 0.25 | 0.23 | 0.38 | 0.42 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.01 | 0.46 | 1.50 | 1.11 | (5.06 | ) | ||||||||||||||||
Total from investment operations | 1.30 | 0.71 | 1.73 | 1.49 | (4.64 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.38 | ) | (0.26 | ) | (0.31 | ) | (0.44 | ) | (0.48 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.25 | ) | (0.27 | ) | |||||||||||||||
Total distributions | (0.38 | ) | (0.26 | ) | (0.31 | ) | (0.69 | ) | (0.75 | ) | ||||||||||||
Net asset value at end of period | 16.33 | 15.41 | 14.96 | 13.54 | 12.74 | |||||||||||||||||
Total return (%) | 8.61 | 4.80 | 12.92 | 12.41 | (26.59 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.53 | 0.52 | 0.52 | 0.66 | 0.72 | |||||||||||||||||
Net investment income (loss) | 1.86 | 1.64 | 1.59 | 3.09 | 2.57 | |||||||||||||||||
Portfolio turnover rate | 12 | 25 | 22 | 30 | 17 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 425 | 432 | 450 | 434 | 405 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
See financial notes 25
Table of Contents
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .7% | Other Investment Companies | 300,927,760 | 410,963,158 | ||||||||
3 | .8% | Short-Term Investments | 16,315,070 | 16,315,070 | ||||||||
100 | .5% | Total Investments | 317,242,830 | 427,278,228 | ||||||||
(0 | .5)% | Other Assets and Liabilities, Net | (2,175,276 | ) | ||||||||
100 | .0% | Total Net Assets | 425,102,952 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.7% of net assets | ||||||||
Equity Funds 60.4% | ||||||||
International 15.2% | ||||||||
Schwab International Index Fund (a) | 3,962,723 | 64,671,638 | ||||||
Large-Cap 30.2% | ||||||||
Schwab S&P 500 Index Fund (a) | 5,736,144 | 128,202,810 | ||||||
Small-Cap 15.0% | ||||||||
Schwab Small-Cap Index Fund (a) | 3,002,467 | 63,832,447 | ||||||
256,706,895 | ||||||||
Fixed-Income Fund 35.2% | ||||||||
Intermediate-Term Bond 35.2% | ||||||||
Schwab Total Bond Market Fund (a) | 15,356,682 | 149,727,653 | ||||||
Money Market Fund 1.1% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 4,528,610 | 4,528,610 | ||||||
Total Other Investment Companies | ||||||||
(Cost $300,927,760) | 410,963,158 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.8% of net assets | ||||||||
Time Deposits 3.8% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/12 | 3,503,750 | 3,503,750 | ||||||
Royal Bank of Canada | ||||||||
0.03%, 11/01/12 | 12,811,320 | 12,811,320 | ||||||
Total Short-Term Investments | ||||||||
(Cost $16,315,070) | 16,315,070 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $325,556,539 and the unrealized appreciation and depreciation were $101,721,689 and ($0), respectively, with a net unrealized appreciation of $101,721,689.
(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 October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $410,963,158 | $— | $— | $410,963,158 | ||||||||||||
Short-Term Investments1 | — | 16,315,070 | — | 16,315,070 | ||||||||||||
Total | $410,963,158 | $16,315,070 | $— | $427,278,228 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
26 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $300,927,760) | $410,963,158 | |||||
Investments in unaffiliated issuers, at value (cost $16,315,070) | + | 16,315,070 | ||||
Total investments, at value (cost $317,242,830) | 427,278,228 | |||||
Cash | 8,707 | |||||
Receivables: | ||||||
Investments sold | 250,000 | |||||
Fund shares sold | 315,119 | |||||
Dividends | 312,126 | |||||
Interest | 13 | |||||
Prepaid expenses | + | 11,748 | ||||
Total assets | 428,175,941 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 311,578 | |||||
Investment adviser and administrator fees | 6,464 | |||||
Shareholder service fees | 8,705 | |||||
Fund shares redeemed | 2,683,482 | |||||
Accrued expenses | + | 62,760 | ||||
Total liabilities | 3,072,989 | |||||
Net Assets | ||||||
Total assets | 428,175,941 | |||||
Total liabilities | − | 3,072,989 | ||||
Net assets | $425,102,952 | |||||
Net Assets by Source | ||||||
Capital received from investors | 330,133,175 | |||||
Net investment income not yet distributed | 1,408,068 | |||||
Net realized capital losses | (16,473,689 | ) | ||||
Net unrealized capital gains | 110,035,398 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$425,102,952 | 26,025,317 | $16.33 |
See financial notes 27
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $10,113,465 | |||||
Interest | + | 3,309 | ||||
Total investment income | 10,116,774 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 986,019 | |||||
Shareholder service fees | 1,056,018 | |||||
Shareholder reports | 50,706 | |||||
Professional fees | 37,520 | |||||
Registration fees | 30,815 | |||||
Transfer agent fees | 27,917 | |||||
Portfolio accounting fees | 23,893 | |||||
Custodian fees | 10,890 | |||||
Trustees’ fees | 8,696 | |||||
Other expenses | + | 47,386 | ||||
Total expenses | 2,279,860 | |||||
Expense reduction by CSIM and its affiliates | − | 136,341 | ||||
Net expenses | − | 2,143,519 | ||||
Net investment income | 7,973,255 | |||||
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 | 5,482,244 | |||||
Net realized gains on unaffiliated investments | + | 1,243 | ||||
Net realized gains | 9,088,999 | |||||
Net unrealized gains on affiliated underlying funds | + | 18,512,082 | ||||
Net realized and unrealized gains | 27,601,081 | |||||
Increase in net assets resulting from operations | $35,574,336 |
28 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $7,973,255 | $7,417,603 | ||||||||
Net realized gains | 9,088,999 | 4,873,465 | ||||||||
Net unrealized gains | + | 18,512,082 | 8,580,707 | |||||||
Increase in net assets from operations | 35,574,336 | 20,871,775 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($10,347,778 | ) | ($7,870,626 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,144,255 | $49,804,826 | 4,114,207 | $63,537,948 | ||||||||||||||
Shares reinvested | 647,049 | 9,725,147 | 488,528 | 7,420,735 | ||||||||||||||
Shares redeemed | + | (5,822,667 | ) | (91,987,712 | ) | (6,613,253 | ) | (101,539,037 | ) | |||||||||
Net transactions in fund shares | (2,031,363 | ) | ($32,457,739 | ) | (2,010,518 | ) | ($30,580,354 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 decrease | + | (2,031,363 | ) | (7,231,181 | ) | (2,010,518 | ) | (17,579,205 | ) | |||||||||
End of period | 26,025,317 | $425,102,952 | 28,056,680 | $432,334,133 | ||||||||||||||
Net investment income not yet distributed | $1,408,068 | $1,914,159 |
See financial notes 29
Table of Contents
Schwab MarketTrack Conservative Portfolio™
Financial Statements
Financial Highlights
11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | ||||||||||||||||||
10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.59 | 13.22 | 12.15 | 11.34 | 14.90 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.26 | 0.25 | 0.24 | 0.37 | 0.43 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.69 | 0.37 | 1.08 | 0.91 | (3.40 | ) | ||||||||||||||||
Total from investment operations | 0.95 | 0.62 | 1.32 | 1.28 | (2.97 | ) | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.31 | ) | (0.25 | ) | (0.25 | ) | (0.38 | ) | (0.46 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.09 | ) | (0.13 | ) | |||||||||||||||
Total distributions | (0.31 | ) | (0.25 | ) | (0.25 | ) | (0.47 | ) | (0.59 | ) | ||||||||||||
Net asset value at end of period | 14.23 | 13.59 | 13.22 | 12.15 | 11.34 | |||||||||||||||||
Total return (%) | 7.07 | 4.72 | 10.98 | 11.72 | (20.59 | ) | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.55 | 0.55 | 0.56 | 0.68 | 0.74 | |||||||||||||||||
Net investment income (loss) | 1.96 | 1.84 | 1.93 | 3.31 | 3.12 | |||||||||||||||||
Portfolio turnover rate | 19 | 30 | 25 | 25 | 16 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 189 | 198 | 194 | 181 | 182 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
30 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings as of October 31, 2012
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 | .5% | Other Investment Companies | 143,812,313 | 182,123,061 | ||||||||
4 | .0% | Short-Term Investments | 7,468,310 | 7,468,310 | ||||||||
100 | .5% | Total Investments | 151,280,623 | 189,591,371 | ||||||||
(0 | .5)% | Other Assets and Liabilities, Net | (909,838 | ) | ||||||||
100 | .0% | Total Net Assets | 188,681,533 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.5% of net assets | ||||||||
Equity Funds 40.2% | ||||||||
International 10.2% | ||||||||
Schwab International Index Fund (a) | 1,175,359 | 19,181,862 | ||||||
Large-Cap 20.1% | ||||||||
Schwab S&P 500 Index Fund (a) | 1,694,351 | 37,868,742 | ||||||
Small-Cap 9.9% | ||||||||
Schwab Small-Cap Index Fund (a) | 882,000 | 18,751,324 | ||||||
75,801,928 | ||||||||
Fixed-Income Fund 55.3% | ||||||||
Intermediate-Term Bond 55.3% | ||||||||
Schwab Total Bond Market Fund (a) | 10,701,111 | 104,335,831 | ||||||
Money Market Fund 1.0% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 1,985,302 | 1,985,302 | ||||||
Total Other Investment Companies | ||||||||
(Cost $143,812,313) | 182,123,061 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 4.0% of net assets | ||||||||
Time Deposits 4.0% | ||||||||
BNP Paribas | ||||||||
0.03%, 11/01/12 | 1,792,394 | 1,792,394 | ||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 5,675,916 | 5,675,916 | ||||||
Total Short-Term Investments | ||||||||
(Cost $7,468,310) | 7,468,310 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $159,117,093 and the unrealized appreciation and depreciation were $30,474,278 and ($0), respectively, with a net unrealized appreciation of $30,474,278.
(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 October 31, 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) | Total2 | ||||||||||||
Other Investment Companies1 | $182,123,061 | $— | $— | $182,123,061 | ||||||||||||
Short-Term Investments1 | — | 7,468,310 | — | 7,468,310 | ||||||||||||
Total | $182,123,061 | $7,468,310 | $— | $189,591,371 | ||||||||||||
1 | As categorized in Portfolio Holdings. | |
2 | The fund had no Other Financial Instruments. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended October 31, 2012.
See financial notes 31
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Assets and Liabilities
As of October 31, 2012
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $143,812,313) | $182,123,061 | |||||
Investments in unaffiliated issuers, at value (cost $7,468,310) | + | 7,468,310 | ||||
Total investments, at value (cost $151,280,623) | 189,591,371 | |||||
Receivables: | ||||||
Dividends | 217,141 | |||||
Fund shares sold | 196,483 | |||||
Interest | 6 | |||||
Prepaid expenses | + | 5,089 | ||||
Total assets | 190,010,090 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 216,822 | |||||
Investment adviser and administrator fees | 2,705 | |||||
Shareholder service fees | 3,495 | |||||
Fund shares redeemed | 1,061,819 | |||||
Accrued expenses | + | 43,716 | ||||
Total liabilities | 1,328,557 | |||||
Net Assets | ||||||
Total assets | 190,010,090 | |||||
Total liabilities | − | 1,328,557 | ||||
Net assets | $188,681,533 | |||||
Net Assets by Source | ||||||
Capital received from investors | 166,398,053 | |||||
Net investment income not yet distributed | 145,970 | |||||
Net realized capital losses | (16,173,238 | ) | ||||
Net unrealized capital gains | 38,310,748 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$188,681,533 | 13,255,160 | $14.23 |
32 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Operations
For November 1, 2011 through October 31, 2012
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,834,542 | |||||
Interest | + | 1,650 | ||||
Total investment income | 4,836,192 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 452,621 | |||||
Shareholder service fees | 481,760 | |||||
Professional fees | 37,804 | |||||
Shareholder reports | 24,972 | |||||
Registration fees | 21,593 | |||||
Transfer agent fees | 21,562 | |||||
Portfolio accounting fees | 19,281 | |||||
Trustees’ fees | 7,066 | |||||
Custodian fees | 6,880 | |||||
Interest expense | 186 | |||||
Other expenses | + | 15,089 | ||||
Total expenses | 1,088,814 | |||||
Expense reduction by CSIM and its affiliates | − | 104,672 | ||||
Net expenses | − | 984,142 | ||||
Net investment income | 3,852,050 | |||||
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 | 2,866,171 | |||||
Net realized gains on unaffiliated investments | + | 264 | ||||
Net realized gains | 4,027,215 | |||||
Net unrealized gains on affiliated underlying funds | + | 6,051,777 | ||||
Net realized and unrealized gains | 10,078,992 | |||||
Increase in net assets resulting from operations | $13,931,042 |
See financial notes 33
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||
Net investment income | $3,852,050 | $3,594,414 | ||||||||
Net realized gains | 4,027,215 | 1,473,232 | ||||||||
Net unrealized gains | + | 6,051,777 | 3,857,853 | |||||||
Increase in net assets from operations | 13,931,042 | 8,925,499 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($4,482,834 | ) | ($3,583,353 | ) |
Transactions in Fund Shares
11/1/11-10/31/12 | 11/1/10-10/31/11 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,227,193 | $44,181,272 | 3,029,561 | $40,809,530 | ||||||||||||||
Shares reinvested | 308,192 | 4,188,027 | 250,464 | 3,340,890 | ||||||||||||||
Shares redeemed | + | (4,855,488 | ) | (67,192,496 | ) | (3,372,192 | ) | (45,344,064 | ) | |||||||||
Net transactions in fund shares | (1,320,103 | ) | ($18,823,197 | ) | (92,167 | ) | ($1,193,644 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/11-10/31/12 | 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 | + | (1,320,103 | ) | (9,374,989 | ) | (92,167 | ) | 4,148,502 | ||||||||||
End of period | 13,255,160 | $188,681,533 | 14,575,263 | $198,056,522 | ||||||||||||||
Net investment income not yet distributed | $145,970 | $175,220 |
34 See financial notes
Table of Contents
Schwab MarketTrack Portfolios
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”) a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) | Schwab International Core Equity Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Target 2010 Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Target 2015 Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Target 2020 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Target 2025 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2030 Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2035 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2040 Fund | |||
Schwab International Index Fund | Schwab Fundamental US Large Company Index Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Fundamental US Small Company Index Fund | |||
Laudus International MarketMasters Fund | (formerly Schwab Fundamental US Small-Mid Company Index Fund) | |||
Schwab Balanced Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Dividend Equity Fund | (formerly Schwab Fundamental International Small-Mid Company Index Fund) | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab Small-Cap Equity Fund | (formerly Schwab Fundamental Emerging Markets Index Fund) | |||
Schwab Hedged Equity Fund | Schwab Monthly Income Fund-Moderate Payout | |||
Schwab Financial Services Fund | Schwab Monthly Income Fund-Enhanced Payout | |||
Schwab Health Care 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 (see note 11 for additional information regarding P Share class termination). 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 funds’ Board of Trustees (the “Board”) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
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:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available�� or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the procedures. | |
• | 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 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. 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 levels associated with valuing the funds’ investments as of October 31, 2012 are disclosed in the Portfolio Holdings.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(b) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains or losses from security transactions are based on the identified costs of the securities involved.
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(d) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
For funds offering multiple share classes, the net investment income, other than class specific expenses, and the realized and unrealized gains or losses, are allocated daily to each class in proportion to their average daily net assets.
(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 GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(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 December 2011, Accounting Standards Update (“ASU”) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities,” was issued and is effective for interim and annual periods beginning after January 1, 2013. The ASU enhances disclosure requirements with respect to an entity’s rights of offset and related arrangements associated with its financial and derivative instruments. Management is currently evaluating the impact the adoption of ASU 2011-11 may have on the funds’ financial statement disclosures.
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.
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Financial Notes (continued)
3. Risk Factors (continued):
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 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 - large-cap and mid-cap stocks, for instance - an underlying fund’s small-cap holdings could reduce performance. | |
• | Foreign Investment Risk. An underlying fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets. | |
• | Currency Risk. As a result of an underlying fund’s investments in securities denominated in, and/or receiving revenues in foreign currencies, the fund will be subject to currency risk. This is the risk that those currencies will decline in value |
38
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Schwab MarketTrack Portfolios
Financial Notes (continued)
3. Risk Factors (continued):
relative to the U.S. dollar, or, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency hedged. In either event, the dollar value of an investment in a fund would be adversely affected. |
• | Derivatives Risk. An underlying fund’s use of 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. | |
• | 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. An underlying fund may lend its portfolio securities to brokers, dealers and other financial institutions. 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 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 its affiliates 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
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Schwab MarketTrack Portfolios
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
amended or terminated with the approval of the Board, to limit the total annual fund operating expenses, excluding interest, taxes and certain non-routine expenses. The expense limitation as a percentage of average daily net assets is as follows:
Schwab | Schwab | Schwab | Schwab | |||||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||||
Investor Shares | 0.50% | 0.50% | 0.50% | 0.50% | ||||||||||||||
P Shares | * | n/a | 0.35% | n/a | n/a |
* | P Shares are only offered by Schwab MarketTrack Growth Portfolio. See note 11 for additional information regarding P Share class termination. |
The agreement to limit the funds’ total expenses charged is limited to each fund’s direct operating expenses and, therefore, does not apply to underlying fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
The funds may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the funds may invest in other related funds. As of October 31, 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 | 10.1% | 8.2% | 4.6% | 1.4% | ||||||||||||
Large-Cap: | ||||||||||||||||
Schwab S&P 500 Index Fund | 1.7% | 1.8% | 1.0% | 0.3% | ||||||||||||
Small-Cap: | ||||||||||||||||
Schwab Small-Cap Index Fund | 7.0% | 6.8% | 3.8% | 1.1% | ||||||||||||
Fixed-Income Funds: | ||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||
Schwab Total Bond Market Fund | —% | 8.8% | 15.7% | 10.9% | ||||||||||||
Money Market Fund: | ||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | —% | 0.0% | * | 0.0% | * | 0.0% | * |
* | Less than 0.05% |
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Below is a summary of the funds’ transactions with their affiliated underlying funds during the period ended October 31, 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 | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Schwab International Index Fund | 8,806,065 | 888,623 | (957,194 | ) | 8,737,494 | $142,595,897 | ($187,066 | ) | $5,384,670 | |||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 10,805,051 | 354,412 | (1,655,991 | ) | 9,503,472 | 212,402,603 | $2,913,427 | 4,166,405 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Schwab Small-Cap Index Fund | 5,814,864 | 522,278 | (785,930 | ) | 5,551,212 | 118,018,758 | 1,245,645 | 8,544,315 | ||||||||||||||||||||
Total | $473,017,258 | $3,972,006 | $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 | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Schwab International Index Fund | 8,089,359 | 1,295,866 | (2,313,972 | ) | 7,071,253 | $115,402,857 | $1,073,852 | $5,060,757 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 13,296,624 | 466,601 | (3,536,145 | ) | 10,227,080 | 228,575,241 | 8,952,362 | 5,247,785 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Schwab Small-Cap Index Fund | 6,450,906 | 738,225 | (1,846,787 | ) | 5,342,344 | 113,578,231 | 5,495,541 | 9,631,517 | ||||||||||||||||||||
Fixed-Income Fund: | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 10,461,993 | 1,333,344 | (3,142,916 | ) | 8,652,421 | 84,361,107 | 543,971 | 2,560,339 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 25,037,593 | 6,185 | (18,000,000 | ) | 7,043,778 | 7,043,778 | — | 6,453 | ||||||||||||||||||||
�� | ||||||||||||||||||||||||||||
Total | $548,961,214 | $16,065,726 | $22,506,851 | |||||||||||||||||||||||||
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Financial Notes (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 | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Schwab International Index Fund | 3,955,647 | 696,980 | (689,904 | ) | 3,962,723 | $64,671,638 | $516,260 | $2,482,753 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 6,549,863 | 455,092 | (1,268,811 | ) | 5,736,144 | 128,202,810 | 3,661,884 | 2,564,792 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Schwab Small-Cap Index Fund | 3,148,403 | 513,645 | (659,581 | ) | 3,002,467 | 63,832,447 | 1,149,552 | 4,699,494 | ||||||||||||||||||||
Fixed-Income Fund: | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 16,055,272 | 1,987,018 | (2,685,608 | ) | 15,356,682 | 149,727,653 | 154,548 | 3,967,708 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 17,024,549 | 4,061 | (12,500,000 | ) | 4,528,610 | 4,528,610 | — | 4,230 | ||||||||||||||||||||
Total | $410,963,158 | $5,482,244 | $13,718,977 | |||||||||||||||||||||||||
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 | 10/31/12 | 10/31/12 | to 10/31/12 | to 10/31/12 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Schwab International Index Fund | 1,197,306 | 278,553 | (300,500 | ) | 1,175,359 | $19,181,862 | $201,592 | $791,725 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,989,652 | 275,919 | (571,220 | ) | 1,694,351 | 37,868,742 | 2,083,148 | 820,490 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Schwab Small-Cap Index Fund | 957,292 | 197,263 | (272,555 | ) | 882,000 | 18,751,324 | 512,806 | 1,512,983 | ||||||||||||||||||||
Fixed-Income Fund: | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 11,540,635 | 2,402,211 | (3,241,735 | ) | 10,701,111 | 104,335,831 | 68,625 | 2,868,301 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 7,333,553 | 1,749 | (5,350,000 | ) | 1,985,302 | 1,985,302 | — | 1,823 | ||||||||||||||||||||
Total | $182,123,061 | $2,866,171 | $5,995,322 | |||||||||||||||||||||||||
* | Distributions received include distributions from net investment income and capital gains from the underlying funds. |
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Schwab MarketTrack Portfolios
Financial Notes (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 October 31, 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 by the Board. The funds had no interfund borrowing or lending activity during the period.
During the period, the Schwab MarketTrack All Equity Portfolio received a payment of $7,153, related to state filing fees resulting from revised fee calculation methodologies being applied on sales of the fund’s shares in prior periods. This payment is presented in the fund’s Statement of Operations as “State filing fee reimbursement”.
All or a portion of the state filing fees were previously borne by CSIM through a waiver of CSIM’s management fee. As this expense was previously waived, the payment received during the period had the effect of decreasing the total “Expense reduction by CSIM and its affiliates” in the fund’s Statement of Operations. The current net operating expense ratio was not impacted by this payment.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. provides transfer agent services for each fund.
6. Board of Trustees:
Trustees may include people who are officers and/or directors of the investment adviser or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 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 | $29,955,390 | $65,984,999 | ||||||
Schwab MarketTrack Growth Portfolio | 54,812,104 | 197,599,995 | ||||||
Schwab MarketTrack Balanced Portfolio | 48,279,576 | 89,390,000 | ||||||
Schwab MarketTrack Conservative Portfolio | 36,360,808 | 58,875,000 |
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Schwab MarketTrack Portfolios
Financial Notes (continued)
9. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/11-10/31/12) | (11/1/10-10/31/11) | |||||||
Schwab MarketTrack All Equity Portfolio | $7,838 | $100,836 | ||||||
Schwab MarketTrack Growth Portfolio | 20,976 | 9,915 | ||||||
Schwab MarketTrack Balanced Portfolio | 2,893 | 5,707 | ||||||
Schwab MarketTrack Conservative Portfolio | 4,280 | 10,851 |
10. Federal Income Taxes:
As of October 31, 2012, the components of distributable earnings on a tax-basis were as follows:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Undistributed ordinary income | $12,560,360 | $— | $1,408,069 | $145,970 | ||||||||||||
Undistributed long-term capital gains | — | — | — | — | ||||||||||||
Unrealized appreciation on investments | 73,524,522 | 157,128,895 | 101,721,689 | 30,474,278 | ||||||||||||
Other unrealized appreciation/(depreciation) | — | — | — | — | ||||||||||||
Net unrealized appreciation/(depreciation) | $73,524,522 | $157,128,895 | $101,721,689 | $30,474,278 | ||||||||||||
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2012, 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 | 11,917,090 | 8,159,980 | 8,336,771 | ||||||||||||
October 31, 2018 | 8,349,147 | 918,434 | — | — | ||||||||||||
No expiration | 1,262,743 | — | — | — | ||||||||||||
Total | $52,418,074 | $12,835,524 | $8,159,980 | $8,336,771 | ||||||||||||
For the year ended October 31, 2012, the funds had capital losses deferred and capital losses utilized as follows:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Capital losses deferred | $— | $526,634 | $— | $— | ||||||||||||
Capital losses utilized | — | 18,018,499 | 6,437,506 | 2,706,067 |
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Schwab MarketTrack Portfolios
Financial Notes (continued)
10. Federal Income Taxes (continued):
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Current period distributions | ||||||||||||||||
Ordinary income | $— | $16,365,676 | $10,347,778 | $4,482,834 | ||||||||||||
Long-term capital gains | — | — | — | — | ||||||||||||
Return of capital | — | — | — | — | ||||||||||||
Prior period distributions | ||||||||||||||||
Ordinary income | $9,214,430 | $9,760,444 | $7,870,626 | $3,583,353 | ||||||||||||
Long-term capital gains | — | — | — | — | ||||||||||||
Return of capital | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2012, the funds made the following reclassifications:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Capital shares | $— | $— | $— | $— | ||||||||||||
Undistributed net investment income | 3,397,063 | 3,829,314 | 1,868,432 | 601,534 | ||||||||||||
Net realized capital gains/(losses) | (3,397,063 | ) | (3,829,314 | ) | (1,868,432 | ) | (601,534 | ) |
As of October 31, 2012, 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, 2012, 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. However, such losses must be utilized prior to the pre-enactment capital losses, which increases the likelihood that the pre-enactment capital losses will expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital loss, 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.
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Schwab MarketTrack Portfolios
Financial Notes (continued)
10. Federal Income Taxes (continued):
Finally, the Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
The funds have adopted the noted provisions of the Act for the period ending October 31, 2012.
11. Subsequent Events:
Based upon its evaluation of the profile of the current and prospective investors of the MarketTrack Growth Portfolio, CSIM recommended to the Board that the fund terminate its P Share Class. At a Board meeting held on December 4, 2012, the Board approved the termination of MarketTrack Growth Portfolio’s P Shares. Effective December 6, 2012, the P Share class was terminated.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab MarketTrack All Equity Portfolio
Schwab MarketTrack Growth Portfolio
Schwab MarketTrack Balanced Portfolio
Schwab MarketTrack Conservative Portfolio
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio, and Schwab MarketTrack Conservative Portfolio (four of the portfolios constituting Schwab Capital Trust, hereafter referred to as the “Funds”) at October 31, 2012, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities and investments in the underlying funds at October 31, 2012 by correspondence with the custodian and transfer agent of the underlying funds, respectively, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 14, 2012
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Other Federal Tax Information (unaudited)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2012, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab MarketTrack All Equity Portfolio | — | ||||
Schwab MarketTrack Growth Portfolio | 26.27 | ||||
Schwab MarketTrack Balanced Portfolio | 25.11 | ||||
Schwab MarketTrack Conservative Portfolio | 14.76 |
For the fiscal year ended October 31, 2012, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2013 via IRS form 1099 of the amounts for use in preparing their 2012 income tax return.
Schwab MarketTrack All Equity Portfolio | $— | |||
Schwab MarketTrack Growth Portfolio | 8,385,936 | |||
Schwab MarketTrack Balanced Portfolio | 4,727,862 | |||
Schwab MarketTrack Conservative Portfolio | 1,277,365 |
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Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”)requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio and Schwab MarketTrack Conservative Portfolio (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at meetings held on April 24, 2012, and June 5, 2012, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 5, 2012. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the
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appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. The Funds had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to the Funds. These factors varied from Fund to Fund, but included one or more of the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers of 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 91 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-800-435-4000.
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. | 74 | 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). | 74 | 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). | 74 | 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. | 74 | 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). | 74 | 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). | 74 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 74 | 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. | 74 | 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. | 91 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President 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 and 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. In addition to their employment with Schwab, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation, the parent company of Schwab and the investment adviser. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays 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.
Citigroup Non-U.S. Dollar World Government Bond Index An index that measures the total rate of return performance for the government bonds of 23 countries, excluding the U.S., with a remaining maturity of at least one year.
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 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.
MSCI Emerging Markets Index A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
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.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
• | WEBSITE USAGE. |
When you visit our websites, we may use devices known as “cookies,” graphic interchange format files (GIFs), or other similar web tools to enhance your web experience. These tools help us to recognize you, maintain your web session, and provide a more personalized experience. To learn more, please click the Privacy link on our website.
How We Share and Use Your Information
We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
• | when we use other companies to provide services for us, such as printing and mailing your account statements; |
• | when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control). |
State Laws
We will comply with state laws that apply to the disclosure or use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.
Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.
We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2012 Schwab Funds. All rights reserved.
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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 Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large Company* Index Fund
Schwab Fundamental US Small Company* Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small Company Index Fund
Schwab Fundamental Emerging Markets* Large Company Index Fund
Schwab Global Real Estate Fundtm
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab Intermediate-Term Bond Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fund
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE COMPANY, FUNDAMENTAL US SMALL COMPANY, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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![(CHARLES SCHWAB LOGO)](https://capedge.com/proxy/N-CSR/0000950123-13-000032/f30020ctschwab02.gif)
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.
MFR13813-15
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Item 2: Code of Ethics.
(a) | Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other persons who perform a similar function, regardless of whether these individuals are employed by Registrant or a third party. | |
(c) | During the period covered by the report, no amendments were made to the provisions of this code of ethics. | |
(d) | During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics. | |
(f)(1) | Registrant has filed this code of ethics as an exhibit pursuant to Item 12(a)(1) of Form N-CSR. |
Item 3: Audit Committee Financial Expert.
(a) (1) Disclose that the registrant’s board of directors has determined that the registrant either:
(i) Has at least one audit committee financial expert serving on its audit committee; or
(ii) Does not have an audit committee financial expert serving on its audit committee.
(2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is “independent.” In order to be considered “independent” for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or
(ii) Be an “interested person” of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)).
(3) If the registrant provides the disclosure required by paragraph (a)(1)(ii) of this Item, it must explain why it does not have an audit committee financial expert.
3(a)(1) THE REGISTRANT’S BOARD OF DIRECTORS HAS DETERMINED THAT THE REGISTRANT HAS AT LEAST ONE AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS AUDIT COMMITTEE.
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3(a)(2) THE AUDIT COMMITTEE FINANCIAL EXPERTS ARE MARIANN BYERWALTER, WILLIAM HASLER AND KIRAN PATEL WHO ARE “INDEPENDENT” FOR PURPOSES OF THIS ITEM 3 OF FORM N-CSR.
Item 4: Principal Accountant Fees and Services.
Registrant is composed of thirty-five series. Thirty-two series have a fiscal year-end of October 31, whose annual financial statements are reported in Item 1, and three series has a fiscal year-end of December 31. Principal accountant fees disclosed in Items 4(a)-(d) and 4(g) include fees billed for services rendered to each of the thirty-five series, based on their respective 2010 and 2009 fiscal years, as applicable.
(a) Below are the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
Audit Fees
2012: $1,236,570 2011: $1,200,554
(b) Below are the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of Registrant’s financial statements and are not reported under paragraph (a) above.
Audit-Related Fees
For services rendered to Registrant:
2012: $85,159 2011: $82,667
Nature of these services: tax provision review and procedures performed related to Registrant’s service provider conversion.
In each of the last two fiscal years there were no “Audit-Related Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(c) Below are the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.
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Tax Fees
For services rendered to Registrant:
2012: $93,457 2011: $90,725
Nature of these services: | preparation and review of tax returns. |
In each of the last two fiscal years there were no “Tax Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(d) Below are the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
All Other Fees
For services rendered to Registrant:
2012: $17,500 2011: $11,986
Nature of these services: |
- | review of the methodology of allocation of Charles Schwab & Co., Inc. (“Schwab”) expenses for purposes of Section 15(c) of the Investment Company Act of 1940. |
- | review of regulatory filing in connection with merger of Schwab Premier Equity Fund and Schwab Core Equity Fund. |
In each of the last two fiscal years there were no “All Other Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(e)(1) Registrant’s audit committee does not have pre-approval policies and procedures as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by Registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) Below are the aggregate non-audit fees billed in each of the last two fiscal years by Registrant’s principal accountant for services rendered to Registrant, to Registrant’s investment adviser, and to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant.
2012: $196,116 2011: $185,378
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Although not required to be included in the amounts disclosed under this paragraph (g) or any other paragraph of this Item 4, below are the aggregate fees billed in each of the last two fiscal years by Registrant’s principal accountant for tax compliance services rendered to U.S. Trust, an entity under common control with Registrant’s investment adviser that does not provide services to Registrant.
(h) | During the past fiscal year, all non-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant were pre-approved. Included in the audit committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence. |
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
Except as noted below, the schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form. The schedules of investments for the Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund, Schwab International Index Fund, Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small-Mid Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small-Mid Company Index Fund and Schwab Fundamental Emerging Markets Index Fund are filed under this Item.
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Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .4% | Common Stock | 9,225,822,139 | 12,480,987,418 | ||||||||
1 | .4% | Short-Term Investments | 179,821,589 | 179,821,589 | ||||||||
99 | .8% | Total Investments | 9,405,643,728 | 12,660,809,007 | ||||||||
0 | .2% | Collateral Invested for Securities on Loan | 31,508,589 | 31,508,589 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | (5,367,984 | ) | ||||||||
100 | .0% | Net Assets | 12,686,949,612 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.4% of net assets | ||||||||
Automobiles & Components 0.6% | ||||||||
BorgWarner, Inc. * | 111,000 | 7,306,020 | ||||||
Ford Motor Co. | 3,769,297 | 42,065,355 | ||||||
Harley-Davidson, Inc. | 231,470 | 10,823,537 | ||||||
Johnson Controls, Inc. | 675,859 | 17,403,369 | ||||||
The Goodyear Tire & Rubber Co. * | 233,336 | 2,662,364 | ||||||
80,260,645 | ||||||||
Banks 2.8% | ||||||||
BB&T Corp. | 692,113 | 20,036,671 | ||||||
Comerica, Inc. | 188,270 | 5,612,329 | ||||||
Fifth Third Bancorp | 904,029 | 13,135,541 | ||||||
First Horizon National Corp. | 238,860 | 2,223,787 | ||||||
Hudson City Bancorp, Inc. | 481,992 | 4,089,702 | ||||||
Huntington Bancshares, Inc. | 821,893 | 5,251,896 | ||||||
KeyCorp | 941,198 | 7,924,887 | ||||||
M&T Bank Corp. | 121,098 | 12,606,302 | ||||||
People’s United Financial, Inc. | 343,300 | 4,129,899 | ||||||
PNC Financial Services Group, Inc. | 523,178 | 30,443,728 | ||||||
Regions Financial Corp. | 1,354,945 | 8,834,242 | ||||||
SunTrust Banks, Inc. | 532,216 | 14,476,275 | ||||||
U.S. Bancorp | 1,872,428 | 62,183,334 | ||||||
Wells Fargo & Co. | 4,854,909 | 163,561,884 | ||||||
Zions Bancorp | 174,698 | 3,750,766 | ||||||
358,261,243 | ||||||||
Capital Goods 7.5% | ||||||||
3M Co. | 628,619 | 55,067,024 | ||||||
Caterpillar, Inc. | 645,662 | 54,758,594 | ||||||
Cooper Industries plc | 154,700 | 11,593,218 | ||||||
Cummins, Inc. | 182,562 | 17,084,152 | ||||||
Danaher Corp. | 577,274 | 29,862,384 | ||||||
Deere & Co. | 395,286 | 33,773,236 | ||||||
Dover Corp. | 174,270 | 10,145,999 | ||||||
Eaton Corp. | 338,678 | 15,992,375 | ||||||
Emerson Electric Co. | 713,815 | 34,570,060 | ||||||
Fastenal Co. | 283,398 | 12,667,891 | ||||||
Flowserve Corp. | 50,100 | 6,788,049 | ||||||
Fluor Corp. | 160,582 | 8,968,505 | ||||||
General Dynamics Corp. | 327,760 | 22,313,901 | ||||||
General Electric Co. | 10,435,252 | 219,766,407 | ||||||
Honeywell International, Inc. | 771,429 | 47,242,312 | ||||||
Illinois Tool Works, Inc. | 426,236 | 26,141,054 | ||||||
Ingersoll-Rand plc | 277,800 | 13,064,934 | ||||||
Jacobs Engineering Group, Inc. * | 119,534 | 4,612,817 | ||||||
Joy Global, Inc. | 100,000 | 6,245,000 | ||||||
L-3 Communications Holdings, Inc. | 105,783 | 7,806,785 | ||||||
Lockheed Martin Corp. | 266,091 | 24,924,744 | ||||||
Masco Corp. | 347,388 | 5,242,085 | ||||||
Northrop Grumman Corp. | 242,467 | 16,655,058 | ||||||
PACCAR, Inc. | 343,250 | 14,876,455 | ||||||
Pall Corp. | 107,030 | 6,738,609 | ||||||
Parker Hannifin Corp. | 155,336 | 12,218,730 | ||||||
Pentair Ltd. | 208,982 | 8,827,400 | ||||||
Precision Castparts Corp. | 143,627 | 24,857,525 | ||||||
Quanta Services, Inc. * | 231,900 | 6,013,167 | ||||||
Raytheon Co. | 331,388 | 18,743,305 | ||||||
Rockwell Automation, Inc. | 132,521 | 9,416,942 | ||||||
Rockwell Collins, Inc. | 147,405 | 7,897,960 | ||||||
Roper Industries, Inc. | 97,200 | 10,611,324 | ||||||
Snap-on, Inc. | 58,282 | 4,506,947 | ||||||
Stanley Black & Decker, Inc. | 166,181 | 11,516,343 | ||||||
Textron, Inc. | 259,904 | 6,552,180 | ||||||
The Boeing Co. | 668,654 | 47,099,988 | ||||||
United Technologies Corp. | 829,035 | 64,797,376 | ||||||
W.W. Grainger, Inc. | 57,927 | 11,667,077 | ||||||
Xylem, Inc. | 173,800 | 4,216,388 | ||||||
955,844,300 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Avery Dennison Corp. | 103,076 | 3,337,601 | ||||||
Cintas Corp. | 111,376 | 4,656,631 | ||||||
Equifax, Inc. | 119,661 | 5,987,836 | ||||||
Iron Mountain, Inc. | 149,300 | 5,165,780 | ||||||
Pitney Bowes, Inc. (b) | 196,591 | 2,823,047 | ||||||
R.R. Donnelley & Sons Co. (b) | 194,869 | 1,952,587 | ||||||
Republic Services, Inc. | 299,934 | 8,503,129 | ||||||
Robert Half International, Inc. | 123,342 | 3,316,666 | ||||||
Stericycle, Inc. * | 80,700 | 7,647,132 | ||||||
The ADT Corp. * | 227,100 | 9,426,921 | ||||||
The Dun & Bradstreet Corp. | 46,500 | 3,768,360 | ||||||
Tyco International Ltd. | 454,200 | 12,204,354 | ||||||
Waste Management, Inc. | 454,916 | 14,893,950 | ||||||
83,683,994 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Coach, Inc. | 278,728 | 15,622,704 |
See financial notes 1
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
D.R. Horton, Inc. | 260,616 | 5,462,511 | ||||||
Fossil, Inc. * | 50,000 | 4,355,000 | ||||||
Harman International Industries, Inc. | 64,756 | 2,715,219 | ||||||
Hasbro, Inc. | 107,917 | 3,883,933 | ||||||
Leggett & Platt, Inc. | 157,894 | 4,188,928 | ||||||
Lennar Corp., Class A | 151,118 | 5,662,392 | ||||||
Mattel, Inc. | 336,894 | 12,390,961 | ||||||
Newell Rubbermaid, Inc. | 276,450 | 5,705,928 | ||||||
NIKE, Inc., Class B | 363,362 | 33,204,020 | ||||||
PulteGroup, Inc. * | 328,586 | 5,697,681 | ||||||
Ralph Lauren Corp. | 62,826 | 9,655,728 | ||||||
VF Corp. | 90,291 | 14,128,736 | ||||||
Whirlpool Corp. | 76,122 | 7,435,597 | ||||||
130,109,338 | ||||||||
Consumer Services 1.8% | ||||||||
Apollo Group, Inc., Class A * | 109,790 | 2,204,583 | ||||||
Carnival Corp. | 433,221 | 16,410,411 | ||||||
Chipotle Mexican Grill, Inc. * | 30,000 | 7,635,900 | ||||||
Darden Restaurants, Inc. | 128,248 | 6,748,410 | ||||||
H&R Block, Inc. | 286,205 | 5,065,829 | ||||||
International Game Technology | 280,660 | 3,603,674 | ||||||
Marriott International, Inc., Class A | 267,172 | 9,746,435 | ||||||
McDonald’s Corp. | 996,638 | 86,508,178 | ||||||
Starbucks Corp. | 751,062 | 34,473,746 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 192,168 | 9,963,911 | ||||||
Wyndham Worldwide Corp. | 148,464 | 7,482,586 | ||||||
Wynn Resorts Ltd. | 74,700 | 9,043,182 | ||||||
Yum! Brands, Inc. | 444,985 | 31,197,898 | ||||||
230,084,743 | ||||||||
Diversified Financials 6.1% | ||||||||
American Express Co. | 973,041 | 54,461,105 | ||||||
Ameriprise Financial, Inc. | 215,714 | 12,591,226 | ||||||
Bank of America Corp. | 10,650,811 | 99,265,558 | ||||||
BlackRock, Inc. | 123,700 | 23,463,416 | ||||||
Capital One Financial Corp. | 574,174 | 34,548,050 | ||||||
Citigroup, Inc. | 2,898,147 | 108,361,716 | ||||||
CME Group, Inc. | 299,885 | 16,772,568 | ||||||
Discover Financial Services | 524,873 | 21,519,793 | ||||||
E*TRADE Financial Corp. * | 243,719 | 2,037,491 | ||||||
Federated Investors, Inc., Class B | 76,906 | 1,787,295 | ||||||
Franklin Resources, Inc. | 139,335 | 17,807,013 | ||||||
IntercontinentalExchange, Inc. * | 71,958 | 9,426,498 | ||||||
Invesco Ltd. | 436,147 | 10,607,095 | ||||||
JPMorgan Chase & Co. | 3,754,331 | 156,480,516 | ||||||
Legg Mason, Inc. | 143,998 | 3,669,069 | ||||||
Leucadia National Corp. | 177,151 | 4,021,328 | ||||||
Moody’s Corp. | 188,529 | 9,079,557 | ||||||
Morgan Stanley | 1,366,654 | 23,752,447 | ||||||
Northern Trust Corp. | 225,818 | 10,789,584 | ||||||
NYSE Euronext | 245,500 | 6,078,580 | ||||||
SLM Corp. | 494,418 | 8,691,868 | ||||||
State Street Corp. | 466,026 | 20,770,779 | ||||||
T. Rowe Price Group, Inc. | 243,179 | 15,792,044 | ||||||
The Bank of New York Mellon Corp. | 1,163,073 | 28,739,534 | ||||||
The Charles Schwab Corp. (a) | 1,085,681 | 14,743,548 | ||||||
The Goldman Sachs Group, Inc. | 445,369 | 54,508,712 | ||||||
The NASDAQ OMX Group, Inc. | 119,900 | 2,854,819 | ||||||
772,621,209 | ||||||||
Energy 11.1% | ||||||||
Anadarko Petroleum Corp. | 493,809 | 33,978,997 | ||||||
Apache Corp. | 386,606 | 31,991,647 | ||||||
Baker Hughes, Inc. | 434,463 | 18,234,412 | ||||||
Cabot Oil & Gas Corp. | 199,600 | 9,377,208 | ||||||
Cameron International Corp. * | 243,400 | 12,325,776 | ||||||
Chesapeake Energy Corp. | 512,966 | 10,392,691 | ||||||
Chevron Corp. | 1,939,134 | 213,711,958 | ||||||
ConocoPhillips | 1,200,290 | 69,436,776 | ||||||
CONSOL Energy, Inc. | 212,018 | 7,454,553 | ||||||
Denbury Resources, Inc. * | 377,200 | 5,782,476 | ||||||
Devon Energy Corp. | 387,858 | 22,577,214 | ||||||
Diamond Offshore Drilling, Inc. | 65,300 | 4,521,372 | ||||||
Ensco plc, Class A | 224,500 | 12,980,590 | ||||||
EOG Resources, Inc. | 267,306 | 31,138,476 | ||||||
EQT Corp. | 140,100 | 8,494,263 | ||||||
Exxon Mobil Corp. | 4,561,941 | 415,912,161 | ||||||
FMC Technologies, Inc. * | 230,000 | 9,407,000 | ||||||
Halliburton Co. | 912,468 | 29,463,592 | ||||||
Helmerich & Payne, Inc. | 118,300 | 5,654,740 | ||||||
Hess Corp. | 293,240 | 15,324,722 | ||||||
Kinder Morgan, Inc. | 624,744 | 21,684,864 | ||||||
Marathon Oil Corp. | 696,752 | 20,944,365 | ||||||
Marathon Petroleum Corp. | 335,326 | 18,419,457 | ||||||
Murphy Oil Corp. | 184,892 | 11,093,520 | ||||||
Nabors Industries Ltd. * | 287,890 | 3,883,636 | ||||||
National Oilwell Varco, Inc. | 428,324 | 31,567,479 | ||||||
Newfield Exploration Co. * | 120,000 | 3,254,400 | ||||||
Noble Corp. | 258,800 | 9,767,112 | ||||||
Noble Energy, Inc. | 175,784 | 16,701,238 | ||||||
Occidental Petroleum Corp. | 800,450 | 63,203,532 | ||||||
Peabody Energy Corp. | 261,564 | 7,297,636 | ||||||
Phillips 66 | 621,295 | 29,300,272 | ||||||
Pioneer Natural Resources Co. | 119,800 | 12,656,870 | ||||||
QEP Resources, Inc. | 162,691 | 4,718,039 | ||||||
Range Resources Corp. | 160,600 | 10,496,816 | ||||||
Rowan Cos. plc, Class A * | 126,263 | 4,003,800 | ||||||
Schlumberger Ltd. | 1,311,515 | 91,189,638 | ||||||
Southwestern Energy Co. * | 344,100 | 11,940,270 | ||||||
Spectra Energy Corp. | 645,209 | 18,627,184 | ||||||
Tesoro Corp. | 138,207 | 5,211,786 | ||||||
The Williams Cos., Inc. | 605,998 | 21,203,870 | ||||||
Valero Energy Corp. | 549,440 | 15,988,704 | ||||||
WPX Energy, Inc. * | 182,099 | 3,084,757 | ||||||
1,404,399,869 | ||||||||
Food & Staples Retailing 2.4% | ||||||||
Costco Wholesale Corp. | 427,292 | 42,058,352 | ||||||
CVS Caremark Corp. | 1,258,851 | 58,410,686 | ||||||
Safeway, Inc. (b) | 210,296 | 3,429,928 | ||||||
Sysco Corp. | 563,357 | 17,503,502 | ||||||
The Kroger Co. | 562,047 | 14,174,825 | ||||||
Wal-Mart Stores, Inc. | 1,661,002 | 124,608,370 | ||||||
Walgreen Co. | 838,911 | 29,554,834 |
2 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Whole Foods Market, Inc. | 169,716 | 16,077,197 | ||||||
305,817,694 | ||||||||
Food, Beverage & Tobacco 6.0% | ||||||||
Altria Group, Inc. | 2,008,991 | 63,885,914 | ||||||
Archer-Daniels-Midland Co. | 633,199 | 16,995,061 | ||||||
Beam, Inc. | 161,179 | 8,955,105 | ||||||
Brown-Forman Corp., Class B | 149,692 | 9,589,270 | ||||||
Campbell Soup Co. | 168,411 | 5,939,856 | ||||||
Coca-Cola Enterprises, Inc. | 295,862 | 9,301,901 | ||||||
ConAgra Foods, Inc. | 401,749 | 11,184,692 | ||||||
Constellation Brands, Inc., Class A * | 175,065 | 6,186,797 | ||||||
Dean Foods Co. * | 154,970 | 2,609,695 | ||||||
Dr Pepper Snapple Group, Inc. | 203,200 | 8,707,120 | ||||||
General Mills, Inc. | 634,980 | 25,449,998 | ||||||
H.J. Heinz Co. | 316,443 | 18,198,637 | ||||||
Hormel Foods Corp. | 119,300 | 3,522,929 | ||||||
Kellogg Co. | 234,434 | 12,265,587 | ||||||
Kraft Foods Group, Inc. * | 584,618 | 26,588,427 | ||||||
Lorillard, Inc. | 129,697 | 15,046,149 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 132,602 | 8,170,935 | ||||||
Mead Johnson Nutrition Co. | 205,300 | 12,658,798 | ||||||
Molson Coors Brewing Co., Class B | 147,030 | 6,342,874 | ||||||
Mondelez International, Inc., Class A | 1,753,854 | 46,547,285 | ||||||
Monster Beverage Corp. * | 148,900 | 6,651,363 | ||||||
PepsiCo, Inc. | 1,538,063 | 106,495,482 | ||||||
Philip Morris International, Inc. | 1,665,946 | 147,536,178 | ||||||
Reynolds American, Inc. | 327,596 | 13,641,098 | ||||||
The Coca-Cola Co. | 3,826,356 | 142,263,916 | ||||||
The Hershey Co. | 145,128 | 9,992,063 | ||||||
The JM Smucker Co. | 106,275 | 9,101,391 | ||||||
Tyson Foods, Inc., Class A | 277,090 | 4,657,883 | ||||||
758,486,404 | ||||||||
Health Care Equipment & Services 3.8% | ||||||||
Aetna, Inc. | 347,780 | 15,197,986 | ||||||
AmerisourceBergen Corp. | 247,246 | 9,751,382 | ||||||
Baxter International, Inc. | 538,489 | 33,725,566 | ||||||
Becton, Dickinson & Co. | 202,390 | 15,316,875 | ||||||
Boston Scientific Corp. * | 1,434,274 | 7,372,168 | ||||||
C.R. Bard, Inc. | 74,873 | 7,202,034 | ||||||
Cardinal Health, Inc. | 330,733 | 13,603,048 | ||||||
CareFusion Corp. * | 207,066 | 5,499,673 | ||||||
Cerner Corp. * | 137,400 | 10,468,506 | ||||||
Cigna Corp. | 274,508 | 13,999,908 | ||||||
Coventry Health Care, Inc. | 138,985 | 6,065,305 | ||||||
Covidien plc | 474,500 | 26,073,775 | ||||||
DaVita, Inc. * | 90,400 | 10,171,808 | ||||||
DENTSPLY International, Inc. | 132,400 | 4,877,616 | ||||||
Edwards Lifesciences Corp. * | 115,800 | 10,054,914 | ||||||
Express Scripts Holding Co. * | 801,295 | 49,311,694 | ||||||
Humana, Inc. | 159,403 | 11,838,861 | ||||||
Intuitive Surgical, Inc. * | 39,467 | 21,399,797 | ||||||
Laboratory Corp. of America Holdings * | 89,691 | 7,599,518 | ||||||
McKesson Corp. | 234,575 | 21,888,193 | ||||||
Medtronic, Inc. | 1,007,839 | 41,905,946 | ||||||
Patterson Cos., Inc. | 83,947 | 2,803,830 | ||||||
Quest Diagnostics, Inc. | 156,880 | 9,055,114 | ||||||
St. Jude Medical, Inc. | 319,387 | 12,219,747 | ||||||
Stryker Corp. | 285,740 | 15,029,924 | ||||||
Tenet Healthcare Corp. * | 112,904 | 2,664,534 | ||||||
UnitedHealth Group, Inc. | 1,011,410 | 56,638,960 | ||||||
Varian Medical Systems, Inc. * | 110,706 | 7,390,733 | ||||||
WellPoint, Inc. | 321,329 | 19,691,041 | ||||||
Zimmer Holdings, Inc. | 177,223 | 11,379,489 | ||||||
480,197,945 | ||||||||
Household & Personal Products 2.4% | ||||||||
Avon Products, Inc. | 423,620 | 6,561,874 | ||||||
Colgate-Palmolive Co. | 440,497 | 46,234,565 | ||||||
Kimberly-Clark Corp. | 387,795 | 32,361,493 | ||||||
The Clorox Co. | 127,857 | 9,244,061 | ||||||
The Estee Lauder Cos., Inc., Class A | 237,252 | 14,619,468 | ||||||
The Procter & Gamble Co. | 2,721,990 | 188,470,588 | ||||||
297,492,049 | ||||||||
Insurance 3.9% | ||||||||
ACE Ltd. | 335,100 | 26,355,615 | ||||||
Aflac, Inc. | 462,773 | 23,036,840 | ||||||
American International Group, Inc. * | 1,152,577 | 40,259,515 | ||||||
Aon plc | 311,450 | 16,802,728 | ||||||
Assurant, Inc. | 89,346 | 3,378,172 | ||||||
Berkshire Hathaway, Inc., Class B * | 1,812,330 | 156,494,696 | ||||||
Cincinnati Financial Corp. | 155,203 | 6,183,288 | ||||||
Genworth Financial, Inc., Class A * | 496,064 | 2,956,541 | ||||||
Hartford Financial Services Group, Inc. | 413,495 | 8,976,976 | ||||||
Lincoln National Corp. | 294,671 | 7,304,894 | ||||||
Loews Corp. | 308,816 | 13,056,740 | ||||||
Marsh & McLennan Cos., Inc. | 541,179 | 18,416,321 | ||||||
MetLife, Inc. | 1,049,777 | 37,256,586 | ||||||
Principal Financial Group, Inc. | 271,367 | 7,473,447 | ||||||
Prudential Financial, Inc. | 460,531 | 26,273,294 | ||||||
The Allstate Corp. | 476,210 | 19,038,876 | ||||||
The Chubb Corp. | 267,893 | 20,622,403 | ||||||
The Progressive Corp. | 541,420 | 12,073,666 | ||||||
The Travelers Cos., Inc. | 377,260 | 26,762,824 | ||||||
Torchmark Corp. | 95,511 | 4,831,902 | ||||||
Unum Group | 276,440 | 5,606,203 | ||||||
XL Group plc | 312,199 | 7,723,803 | ||||||
490,885,330 | ||||||||
Materials 3.4% | ||||||||
Air Products & Chemicals, Inc. | 203,601 | 15,785,185 | ||||||
Airgas, Inc. | 75,000 | 6,672,750 | ||||||
Alcoa, Inc. | 1,054,364 | 9,035,899 | ||||||
Allegheny Technologies, Inc. | 101,170 | 2,665,829 | ||||||
Ball Corp. | 152,738 | 6,541,769 | ||||||
Bemis Co., Inc. | 88,735 | 2,932,692 | ||||||
CF Industries Holdings, Inc. | 66,225 | 13,588,708 |
See financial notes 3
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Cliffs Natural Resources, Inc. | 136,800 | 4,961,736 | ||||||
E.I. du Pont de Nemours & Co. | 919,504 | 40,936,318 | ||||||
Eastman Chemical Co. | 151,116 | 8,952,112 | ||||||
Ecolab, Inc. | 260,228 | 18,111,869 | ||||||
FMC Corp. | 134,200 | 7,182,384 | ||||||
Freeport-McMoran Copper & Gold, Inc. | 927,140 | 36,047,203 | ||||||
International Flavors & Fragrances, Inc. | 80,543 | 5,204,689 | ||||||
International Paper Co. | 419,089 | 15,015,959 | ||||||
LyondellBasell Industries N.V., Class A | 335,300 | 17,901,667 | ||||||
MeadWestvaco Corp. | 155,750 | 4,624,217 | ||||||
Monsanto Co. | 521,800 | 44,911,326 | ||||||
Newmont Mining Corp. | 490,946 | 26,781,104 | ||||||
Nucor Corp. | 312,900 | 12,556,677 | ||||||
Owens-Illinois, Inc. * | 157,500 | 3,069,675 | ||||||
PPG Industries, Inc. | 153,048 | 17,918,860 | ||||||
Praxair, Inc. | 294,679 | 31,297,857 | ||||||
Sealed Air Corp. | 183,368 | 2,974,229 | ||||||
Sigma-Aldrich Corp. | 116,454 | 8,168,084 | ||||||
The Dow Chemical Co. | 1,184,035 | 34,692,225 | ||||||
The Mosaic Co. | 283,200 | 14,822,688 | ||||||
The Sherwin-Williams Co. | 88,636 | 12,637,721 | ||||||
Titanium Metals Corp. | 82,800 | 969,588 | ||||||
United States Steel Corp. (b) | 134,613 | 2,744,759 | ||||||
Vulcan Materials Co. | 123,471 | 5,675,962 | ||||||
435,381,741 | ||||||||
Media 3.5% | ||||||||
Cablevision Systems Corp., Class A | 220,000 | 3,832,400 | ||||||
CBS Corp., Class B - Non Voting Shares | 588,236 | 19,058,847 | ||||||
Comcast Corp., Class A | 2,644,464 | 99,193,845 | ||||||
DIRECTV * | 620,502 | 31,713,857 | ||||||
Discovery Communications, Inc., Class A * | 255,000 | 15,050,100 | ||||||
Gannett Co., Inc. | 207,114 | 3,500,227 | ||||||
News Corp., Class A | 2,012,101 | 48,129,456 | ||||||
Omnicom Group, Inc. | 257,747 | 12,348,659 | ||||||
Scripps Networks Interactive, Class A | 91,193 | 5,537,239 | ||||||
The Interpublic Group of Cos., Inc. | 454,565 | 4,591,106 | ||||||
The McGraw-Hill Cos., Inc. | 276,967 | 15,310,736 | ||||||
The Walt Disney Co. | 1,773,283 | 87,014,997 | ||||||
The Washington Post Co., Class B (b) | 5,369 | 1,790,615 | ||||||
Time Warner Cable, Inc. | 300,201 | 29,752,921 | ||||||
Time Warner, Inc. | 930,674 | 40,437,785 | ||||||
Viacom Inc., Class B | 467,853 | 23,986,823 | ||||||
441,249,613 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.2% | ||||||||
Abbott Laboratories | 1,550,986 | 101,620,603 | ||||||
Agilent Technologies, Inc. | 333,666 | 12,008,639 | ||||||
Alexion Pharmaceuticals, Inc. * | 195,700 | 17,687,366 | ||||||
Allergan, Inc. | 298,758 | 26,864,319 | ||||||
Amgen, Inc. | 760,959 | 65,857,197 | ||||||
Biogen Idec, Inc. * | 231,991 | 32,065,796 | ||||||
Bristol-Myers Squibb Co. | 1,659,364 | 55,173,853 | ||||||
Celgene Corp. * | 421,213 | 30,883,337 | ||||||
Eli Lilly & Co. | 1,009,223 | 49,078,514 | ||||||
Forest Laboratories, Inc. * | 231,064 | 7,789,167 | ||||||
Gilead Sciences, Inc. * | 747,675 | 50,213,853 | ||||||
Hospira, Inc. * | 157,282 | 4,826,985 | ||||||
Johnson & Johnson | 2,724,725 | 192,965,025 | ||||||
Life Technologies Corp. * | 173,435 | 8,482,706 | ||||||
Merck & Co., Inc. | 3,010,014 | 137,346,939 | ||||||
Mylan, Inc. * | 404,751 | 10,256,390 | ||||||
PerkinElmer, Inc. | 105,660 | 3,268,064 | ||||||
Perrigo Co. | 95,800 | 11,017,958 | ||||||
Pfizer, Inc. | 7,382,033 | 183,591,161 | ||||||
Thermo Fisher Scientific, Inc. | 353,637 | 21,593,075 | ||||||
Waters Corp. * | 92,152 | 7,538,955 | ||||||
Watson Pharmaceuticals, Inc. * | 125,746 | 10,807,869 | ||||||
1,040,937,771 | ||||||||
Real Estate 2.1% | ||||||||
American Tower Corp. | 390,500 | 29,400,745 | ||||||
Apartment Investment & Management Co., Class A | 127,314 | 3,398,011 | ||||||
AvalonBay Communities, Inc. | 95,799 | 12,986,512 | ||||||
Boston Properties, Inc. | 148,976 | 15,836,149 | ||||||
CBRE Group, Inc., Class A * | 307,440 | 5,540,069 | ||||||
Equity Residential | 297,522 | 17,080,738 | ||||||
HCP, Inc. | 424,500 | 18,805,350 | ||||||
Health Care REIT, Inc. | 250,900 | 14,910,987 | ||||||
Host Hotels & Resorts, Inc. | 714,111 | 10,326,045 | ||||||
Kimco Realty Corp. | 378,159 | 7,381,664 | ||||||
Plum Creek Timber Co., Inc. | 158,777 | 6,970,310 | ||||||
ProLogis, Inc. | 461,289 | 15,817,600 | ||||||
Public Storage | 143,278 | 19,862,629 | ||||||
Simon Property Group, Inc. | 297,753 | 45,320,984 | ||||||
Ventas, Inc. | 289,700 | 18,329,319 | ||||||
Vornado Realty Trust REIT | 178,456 | 14,313,956 | ||||||
Weyerhaeuser Co. | 531,440 | 14,715,573 | ||||||
270,996,641 | ||||||||
Retailing 4.0% | ||||||||
Abercrombie & Fitch Co., Class A | 78,745 | 2,408,022 | ||||||
Amazon.com, Inc. * | 357,380 | 83,205,212 | ||||||
AutoNation, Inc. (b)* | 40,833 | 1,812,985 | ||||||
AutoZone, Inc. * | 36,998 | 13,874,250 | ||||||
Bed Bath & Beyond, Inc. * | 226,869 | 13,085,804 | ||||||
Best Buy Co., Inc. | 296,557 | 4,510,632 | ||||||
Big Lots, Inc. * | 72,567 | 2,113,877 | ||||||
CarMax, Inc. * | 225,700 | 7,617,375 | ||||||
Dollar Tree, Inc. * | 230,600 | 9,194,022 | ||||||
Expedia, Inc. | 95,113 | 5,625,934 | ||||||
Family Dollar Stores, Inc. | 92,430 | 6,096,683 | ||||||
GameStop Corp., Class A (b) | 146,800 | 3,351,444 | ||||||
Genuine Parts Co. | 147,638 | 9,239,186 | ||||||
J.C. Penney Co., Inc. | 153,021 | 3,674,034 | ||||||
Kohl’s Corp. | 213,210 | 11,359,829 | ||||||
Limited Brands, Inc. | 227,535 | 10,896,651 | ||||||
Lowe’s Cos., Inc. | 1,142,988 | 37,009,951 | ||||||
Macy’s, Inc. | 399,926 | 15,225,183 | ||||||
Netflix, Inc. (b)* | 58,300 | 4,610,947 |
4 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Nordstrom, Inc. | 151,296 | 8,589,074 | ||||||
O’Reilly Automotive, Inc. * | 121,200 | 10,384,416 | ||||||
PetSmart, Inc. | 106,900 | 7,097,091 | ||||||
Priceline.com, Inc. * | 49,242 | 28,253,582 | ||||||
Ross Stores, Inc. | 221,300 | 13,488,235 | ||||||
Staples, Inc. | 653,469 | 7,524,695 | ||||||
Target Corp. | 642,708 | 40,972,635 | ||||||
The Gap, Inc. | 294,662 | 10,525,327 | ||||||
The Home Depot, Inc. | 1,491,550 | 91,551,339 | ||||||
The TJX Cos., Inc. | 716,106 | 29,811,493 | ||||||
Tiffany & Co. | 116,328 | 7,354,256 | ||||||
TripAdvisor, Inc. * | 95,113 | 2,880,973 | ||||||
Urban Outfitters, Inc. * | 111,100 | 3,972,936 | ||||||
507,318,073 | ||||||||
Semiconductors & Semiconductor Equipment 1.9% | ||||||||
Advanced Micro Devices, Inc. (b)* | 559,039 | 1,146,030 | ||||||
Altera Corp. | 304,846 | 9,291,706 | ||||||
Analog Devices, Inc. | 296,254 | 11,586,494 | ||||||
Applied Materials, Inc. | 1,262,472 | 13,382,203 | ||||||
Broadcom Corp., Class A * | 508,218 | 16,026,655 | ||||||
First Solar, Inc. (b)* | 47,800 | 1,162,018 | ||||||
Intel Corp. | 4,944,405 | 106,922,758 | ||||||
KLA-Tencor Corp. | 160,681 | 7,474,880 | ||||||
Lam Research Corp. * | 199,374 | 7,057,840 | ||||||
Linear Technology Corp. | 214,968 | 6,719,900 | ||||||
LSI Corp. * | 573,376 | 3,927,626 | ||||||
Microchip Technology, Inc. | 208,823 | 6,546,601 | ||||||
Micron Technology, Inc. * | 940,775 | 5,103,704 | ||||||
NVIDIA Corp. | 601,582 | 7,200,936 | ||||||
Teradyne, Inc. * | 168,449 | 2,462,724 | ||||||
Texas Instruments, Inc. | 1,109,254 | 31,158,945 | ||||||
Xilinx, Inc. | 269,163 | 8,817,780 | ||||||
245,988,800 | ||||||||
Software & Services 9.3% | ||||||||
Accenture plc, Class A | 621,200 | 41,875,092 | ||||||
Adobe Systems, Inc. * | 495,676 | 16,852,984 | ||||||
Akamai Technologies, Inc. * | 169,341 | 6,433,265 | ||||||
Autodesk, Inc. * | 214,381 | 6,825,891 | ||||||
Automatic Data Processing, Inc. | 470,873 | 27,211,751 | ||||||
BMC Software, Inc. * | 162,339 | 6,607,197 | ||||||
CA, Inc. | 370,925 | 8,353,231 | ||||||
Citrix Systems, Inc. * | 184,808 | 11,422,982 | ||||||
Cognizant Technology Solutions Corp., Class A * | 289,448 | 19,291,709 | ||||||
Computer Sciences Corp. | 144,040 | 4,386,018 | ||||||
eBay, Inc. * | 1,146,269 | 55,353,330 | ||||||
Electronic Arts, Inc. * | 305,892 | 3,777,766 | ||||||
Fidelity National Information Services, Inc. | 232,234 | 7,633,532 | ||||||
Fiserv, Inc. * | 132,652 | 9,940,941 | ||||||
Google, Inc., Class A * | 261,796 | 177,961,067 | ||||||
International Business Machines Corp. | 1,061,590 | 206,511,103 | ||||||
Intuit, Inc. | 284,809 | 16,923,351 | ||||||
MasterCard, Inc., Class A | 106,070 | 48,890,845 | ||||||
Microsoft Corp. | 7,456,731 | 212,777,819 | ||||||
Oracle Corp. | 3,786,586 | 117,573,495 | ||||||
Paychex, Inc. | 305,065 | 9,893,258 | ||||||
Red Hat, Inc. * | 194,100 | 9,543,897 | ||||||
SAIC, Inc. | 252,000 | 2,769,480 | ||||||
Salesforce.com, Inc. * | 130,527 | 19,054,331 | ||||||
Symantec Corp. * | 692,550 | 12,597,485 | ||||||
Teradata Corp. * | 161,371 | 11,023,253 | ||||||
The Western Union Co. | 630,625 | 8,008,937 | ||||||
Total System Services, Inc. | 177,100 | 3,982,979 | ||||||
VeriSign, Inc. * | 149,825 | 5,554,013 | ||||||
Visa, Inc., Class A | 516,600 | 71,683,416 | ||||||
Yahoo!, Inc. * | 1,030,255 | 17,318,587 | ||||||
1,178,033,005 | ||||||||
Technology Hardware & Equipment 7.6% | ||||||||
Amphenol Corp., Class A | 161,800 | 9,729,034 | ||||||
Apple, Inc. | 926,434 | 551,320,873 | ||||||
Cisco Systems, Inc. | 5,241,228 | 89,834,648 | ||||||
Corning, Inc. | 1,500,787 | 17,634,247 | ||||||
Dell, Inc. | 1,453,085 | 13,411,974 | ||||||
EMC Corp. * | 2,074,145 | 50,650,621 | ||||||
F5 Networks, Inc. * | 74,000 | 6,103,520 | ||||||
FLIR Systems, Inc. | 149,700 | 2,908,671 | ||||||
Harris Corp. | 129,300 | 5,919,354 | ||||||
Hewlett-Packard Co. | 1,919,608 | 26,586,571 | ||||||
Jabil Circuit, Inc. | 170,686 | 2,959,695 | ||||||
JDS Uniphase Corp. * | 191,981 | 1,860,296 | ||||||
Juniper Networks, Inc. * | 520,465 | 8,624,105 | ||||||
Molex, Inc. | 126,666 | 3,289,516 | ||||||
Motorola Solutions, Inc. | 282,922 | 14,621,409 | ||||||
NetApp, Inc. * | 345,174 | 9,285,181 | ||||||
QUALCOMM, Inc. | 1,683,365 | 98,603,105 | ||||||
SanDisk Corp. * | 229,524 | 9,584,922 | ||||||
Seagate Technology plc | 367,000 | 10,026,440 | ||||||
TE Connectivity Ltd. | 416,600 | 13,406,188 | ||||||
Western Digital Corp. | 223,300 | 7,643,559 | ||||||
Xerox Corp. | 1,284,866 | 8,274,537 | ||||||
962,278,466 | ||||||||
Telecommunication Services 3.1% | ||||||||
AT&T, Inc. | 5,695,136 | 196,994,754 | ||||||
CenturyLink, Inc. | 613,843 | 23,559,294 | ||||||
Crown Castle International Corp. * | 289,600 | 19,330,800 | ||||||
Frontier Communications Corp. (b) | 937,945 | 4,427,100 | ||||||
MetroPCS Communications, Inc. * | 312,500 | 3,190,625 | ||||||
Sprint Nextel Corp. * | 3,071,908 | 17,018,371 | ||||||
Verizon Communications, Inc. | 2,815,578 | 125,687,402 | ||||||
Windstream Corp. (b) | 565,074 | 5,390,806 | ||||||
395,599,152 | ||||||||
Transportation 1.6% | ||||||||
C.H. Robinson Worldwide, Inc. | 155,995 | 9,411,178 | ||||||
CSX Corp. | 1,013,291 | 20,742,067 | ||||||
Expeditors International of Washington, Inc. | 199,300 | 7,296,373 | ||||||
FedEx Corp. | 288,568 | 26,545,370 | ||||||
Norfolk Southern Corp. | 325,292 | 19,956,664 | ||||||
Ryder System, Inc. | 60,702 | 2,738,874 |
See financial notes 5
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Southwest Airlines Co. | 753,336 | 6,644,424 | ||||||
Union Pacific Corp. | 464,175 | 57,107,450 | ||||||
United Parcel Service, Inc., Class B | 710,418 | 52,038,119 | ||||||
202,480,519 | ||||||||
Utilities 3.6% | ||||||||
AGL Resources, Inc. | 108,840 | 4,443,937 | ||||||
Ameren Corp. | 230,420 | 7,576,210 | ||||||
American Electric Power Co., Inc. | 469,202 | 20,851,337 | ||||||
CenterPoint Energy, Inc. | 448,566 | 9,720,425 | ||||||
CMS Energy Corp. | 261,884 | 6,369,019 | ||||||
Consolidated Edison, Inc. | 295,865 | 17,864,329 | ||||||
Dominion Resources, Inc. | 566,664 | 29,908,526 | ||||||
DTE Energy Co. | 178,612 | 11,091,805 | ||||||
Duke Energy Corp. | 695,899 | 45,713,605 | ||||||
Edison International | 321,993 | 15,114,351 | ||||||
Entergy Corp. | 173,453 | 12,589,219 | ||||||
Exelon Corp. | 843,593 | 30,183,758 | ||||||
FirstEnergy Corp. | 413,294 | 18,895,802 | ||||||
Integrys Energy Group, Inc. | 71,494 | 3,863,536 | ||||||
NextEra Energy, Inc. | 417,838 | 29,273,730 | ||||||
NiSource, Inc. | 302,662 | 7,708,801 | ||||||
Northeast Utilities | 298,700 | 11,738,910 | ||||||
NRG Energy, Inc. | 240,000 | 5,174,400 | ||||||
ONEOK, Inc. | 200,400 | 9,478,920 | ||||||
Pepco Holdings, Inc. | 205,700 | 4,087,259 | ||||||
PG&E Corp. | 434,406 | 18,470,943 | ||||||
Pinnacle West Capital Corp. | 104,861 | 5,554,487 | ||||||
PPL Corp. | 573,970 | 16,978,033 | ||||||
Public Service Enterprise Group, Inc. | 485,170 | 15,544,847 | ||||||
SCANA Corp. | 129,800 | 6,370,584 | ||||||
Sempra Energy | 222,169 | 15,496,288 | ||||||
TECO Energy, Inc. | 194,819 | 3,481,415 | ||||||
The AES Corp. | 623,349 | 6,513,997 | ||||||
The Southern Co. | 855,125 | 40,054,055 | ||||||
Wisconsin Energy Corp. | 218,600 | 8,409,542 | ||||||
Xcel Energy, Inc. | 497,586 | 14,056,804 | ||||||
452,578,874 | ||||||||
Total Common Stock | ||||||||
(Cost $9,225,822,139) | 12,480,987,418 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 1.4% of net assets | ||||||||
Time Deposits 1.3% | ||||||||
Bank of Montreal | ||||||||
0.03%, 11/01/12 | 11,374,525 | 11,374,525 | ||||||
Bank of Nova Scotia | ||||||||
0.03%, 11/01/12 | 15,000,000 | 15,000,000 | ||||||
BNP Paribas | ||||||||
0.03%, 11/01/12 | 88,564,698 | 88,564,698 | ||||||
DNB | ||||||||
0.03%, 11/01/12 | 29,067,447 | 29,067,447 | ||||||
Societe General | ||||||||
0.03%, 11/01/12 | 25,036,460 | 25,036,460 | ||||||
169,043,130 | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.11%, 12/20/12 (c)(d) | 10,780,000 | 10,778,459 | ||||||
Total Short-Term Investments | ||||||||
(Cost $179,821,589) | 179,821,589 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.2% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund | 31,508,589 | 31,508,589 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $31,508,589) | 31,508,589 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12, tax basis cost of the fund’s investments was $9,446,008,739 and the unrealized appreciation and depreciation were $4,389,637,779 and ($1,174,837,511), respectively, with a net unrealized appreciation of $3,214,800,268.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is on loan. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 2,500 | 175,850,000 | (5,136,125 | ) |
6 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .4% | Common Stock | 1,363,052,199 | 1,630,498,243 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | 591 | ||||||||
2 | .6% | Short-Term Investments | 43,991,885 | 43,991,885 | ||||||||
100 | .0% | Total Investments | 1,407,044,084 | 1,674,490,719 | ||||||||
5 | .6% | Collateral Invested for Securities on Loan | 93,407,211 | 93,407,211 | ||||||||
(5 | .6)% | Other Assets and Liabilities, Net | (93,156,428 | ) | ||||||||
100 | .0% | Net Assets | 1,674,741,502 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.4% of net assets | ||||||||
Automobiles & Components 0.8% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 93,000 | 1,010,910 | ||||||
Cooper Tire & Rubber Co. | 85,523 | 1,721,578 | ||||||
Dana Holding Corp. | 205,600 | 2,705,696 | ||||||
Dorman Products, Inc. * | 33,600 | 1,026,480 | ||||||
Drew Industries, Inc. * | 26,200 | 829,754 | ||||||
Exide Technologies * | 103,700 | 316,285 | ||||||
Federal-Mogul Corp. * | 25,400 | 191,516 | ||||||
Fuel Systems Solutions, Inc. * | 22,300 | 362,821 | ||||||
Gentherm, Inc. * | 39,700 | 477,194 | ||||||
Modine Manufacturing Co. * | 62,300 | 423,640 | ||||||
Shiloh Industries, Inc. | 7,200 | 81,936 | ||||||
Spartan Motors, Inc. | 44,700 | 210,090 | ||||||
Standard Motor Products, Inc. | 28,800 | 540,864 | ||||||
Stoneridge, Inc. * | 42,600 | 211,722 | ||||||
Superior Industries International, Inc. | 31,400 | 536,626 | ||||||
Tenneco, Inc. * | 84,600 | 2,584,530 | ||||||
Tower International, Inc. * | 8,800 | 62,304 | ||||||
Winnebago Industries, Inc. * | 39,000 | 491,400 | ||||||
13,785,346 | ||||||||
Banks 8.2% | ||||||||
1st Source Corp. | 20,121 | 446,887 | ||||||
1st United Bancorp, Inc. * | 43,000 | 258,430 | ||||||
Access National Corp. | 10,100 | 133,219 | ||||||
Alliance Financial Corp. | 6,400 | 289,792 | ||||||
American National Bankshares, Inc. | 10,700 | 224,593 | ||||||
Ameris Bancorp * | 31,800 | 339,306 | ||||||
Ames National Corp. | 11,100 | 219,558 | ||||||
Arrow Financial Corp. (c) | 13,871 | 338,452 | ||||||
Astoria Financial Corp. | 120,800 | 1,211,624 | ||||||
BancFirst Corp. | 8,716 | 383,155 | ||||||
Banco Latinoamericano de Comercio Exterior, S.A., Class E | 39,200 | 882,000 | ||||||
BancorpSouth, Inc. | 132,900 | 1,880,535 | ||||||
Bank Mutual Corp. | 61,600 | 277,816 | ||||||
Bank of Kentucky Financial Corp. | 7,700 | 193,578 | ||||||
Bank of Marin Bancorp | 7,100 | 265,043 | ||||||
Bank of the Ozarks, Inc. | 40,100 | 1,312,874 | ||||||
BankFinancial Corp. | 28,200 | 226,446 | ||||||
Banner Corp. | 26,700 | 774,033 | ||||||
Bar Harbor Bankshares | 5,300 | 187,938 | ||||||
BBCN Bancorp, Inc. | 107,100 | 1,277,703 | ||||||
Beneficial Mutual Bancorp, Inc. * | 44,503 | 421,888 | ||||||
Berkshire Bancorp, Inc. * | 8,700 | 72,384 | ||||||
Berkshire Hills Bancorp, Inc. | 34,300 | 805,364 | ||||||
BofI Holding, Inc. * | 13,500 | 379,620 | ||||||
Boston Private Financial Holdings, Inc. | 106,600 | 982,852 | ||||||
Bridge Bancorp, Inc. | 11,800 | 236,000 | ||||||
Bridge Capital Holdings * | 12,200 | 182,390 | ||||||
Brookline Bancorp, Inc. | 95,522 | 810,027 | ||||||
Bryn Mawr Bank Corp. | 16,400 | 371,296 | ||||||
BSB Bancorp, Inc. * | 11,300 | 145,657 | ||||||
C&F Financial Corp. | 4,400 | 172,700 | ||||||
Camden National Corp. | 10,300 | 359,470 | ||||||
Cape Bancorp, Inc. * | 15,400 | 136,444 | ||||||
Capital City Bank Group, Inc. * | 15,300 | 155,295 | ||||||
Cardinal Financial Corp. | 42,500 | 678,725 | ||||||
Cascade Bancorp (c)* | 17,770 | 88,495 | ||||||
Cathay General Bancorp | 108,022 | 1,910,909 | ||||||
Center Bancorp, Inc. | 16,200 | 184,518 | ||||||
Centerstate Banks, Inc. | 40,200 | 348,534 | ||||||
Central Pacific Financial Corp. * | 29,700 | 426,789 | ||||||
Century Bancorp, Inc., Class A | 4,700 | 153,737 | ||||||
Charter Financial Corp. | 9,029 | 88,213 | ||||||
Chemical Financial Corp. | 38,603 | 907,943 | ||||||
Citizens & Northern Corp. | 16,300 | 302,691 | ||||||
Citizens Republic Bancorp, Inc. * | 55,000 | 997,700 | ||||||
City Holding Co. | 20,400 | 716,448 | ||||||
Clifton Savings Bancorp, Inc. | 11,400 | 126,084 | ||||||
CNB Financial Corp. | 16,500 | 283,470 | ||||||
CoBiz Financial, Inc. | 49,300 | 351,509 | ||||||
Columbia Banking System, Inc. | 55,100 | 975,821 | ||||||
Community Bank System, Inc. | 54,200 | 1,495,378 | ||||||
Community Trust Bancorp, Inc. | 19,800 | 671,616 | ||||||
Crescent Financial Bancshares, Inc. (c)* | 13,000 | 56,290 | ||||||
CVB Financial Corp. | 122,919 | 1,329,984 | ||||||
Dime Community Bancshares, Inc. | 44,600 | 646,700 | ||||||
Doral Financial Corp. * | 171,000 | 162,433 | ||||||
Eagle Bancorp, Inc. * | 22,400 | 467,264 | ||||||
Enterprise Bancorp, Inc. | 8,190 | 139,803 | ||||||
Enterprise Financial Services Corp. | 24,300 | 340,200 | ||||||
ESB Financial Corp. | 16,700 | 225,283 |
18 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
ESSA Bancorp, Inc. | 15,200 | 153,216 | ||||||
EverBank Financial Corp. | 30,700 | 467,868 | ||||||
F.N.B. Corp. | 195,937 | 2,102,404 | ||||||
Farmers National Banc Corp. (c) | 25,800 | 159,702 | ||||||
Federal Agricultural Mortgage Corp., Class C | 13,200 | 371,844 | ||||||
Fidelity Southern Corp. | 13,245 | 129,670 | ||||||
Financial Institutions, Inc. | 18,500 | 352,240 | ||||||
First Bancorp | 20,200 | 211,090 | ||||||
First BanCorp * | 96,500 | 409,160 | ||||||
First Bancorp, Inc. | 12,096 | 199,342 | ||||||
First Busey Corp. | 103,200 | 487,104 | ||||||
First California Financial Group, Inc. * | 30,800 | 207,900 | ||||||
First Commonwealth Financial Corp. | 146,256 | 957,977 | ||||||
First Community Bancshares, Inc. | 24,600 | 368,508 | ||||||
First Connecticut Bancorp, Inc. | 23,900 | 327,191 | ||||||
First Defiance Financial Corp. | 13,000 | 230,100 | ||||||
First Federal Bancshares of Arkansas, Inc. * | 4,700 | 47,235 | ||||||
First Financial Bancorp | 82,689 | 1,298,217 | ||||||
First Financial Bankshares, Inc. (c) | 44,131 | 1,598,866 | ||||||
First Financial Corp. | 14,900 | 455,791 | ||||||
First Financial Holdings, Inc. | 22,100 | 311,610 | ||||||
First Financial Northwest, Inc. * | 22,000 | 173,800 | ||||||
First Interstate BancSystem, Inc. | 24,600 | 369,738 | ||||||
First Merchants Corp. | 39,300 | 578,103 | ||||||
First Midwest Bancorp, Inc. | 103,863 | 1,284,785 | ||||||
First PacTrust Bancorp, Inc. | 13,600 | 159,936 | ||||||
FirstMerit Corp. | 153,000 | 2,120,580 | ||||||
Flushing Financial Corp. | 42,000 | 653,100 | ||||||
FNB United Corp. (c)* | 13,700 | 163,989 | ||||||
Fox Chase Bancorp, Inc. | 19,500 | 303,420 | ||||||
Franklin Financial Corp. * | 21,500 | 370,445 | ||||||
German American Bancorp, Inc. | 16,900 | 381,095 | ||||||
Glacier Bancorp, Inc. | 100,711 | 1,460,310 | ||||||
Great Southern Bancorp, Inc. | 13,600 | 385,832 | ||||||
Guaranty Bancorp * | 104,600 | 191,418 | ||||||
Hancock Holding Co. | 106,049 | 3,350,088 | ||||||
Hanmi Financial Corp. * | 45,900 | 569,619 | ||||||
Heartland Financial USA, Inc. | 19,900 | 571,130 | ||||||
Heritage Commerce Corp. * | 27,900 | 183,861 | ||||||
Heritage Financial Corp. | 21,000 | 290,430 | ||||||
Heritage Financial Group, Inc. | 11,900 | 159,222 | ||||||
Heritage Oaks Bancorp * | 27,600 | 150,144 | ||||||
Hingham Institution for Savings | 1,800 | 122,310 | ||||||
Home Bancorp, Inc. * | 9,400 | 177,754 | ||||||
Home Bancshares, Inc. | 29,990 | 1,038,854 | ||||||
Home Federal Bancorp, Inc. | 22,200 | 253,524 | ||||||
Home Loan Servicing Solutions Ltd. | 40,300 | 781,820 | ||||||
HomeStreet, Inc. * | 6,000 | 268,680 | ||||||
HomeTrust Bancshares, Inc. * | 29,400 | 401,310 | ||||||
Horizon Bancorp | 6,600 | 191,400 | ||||||
Hudson Valley Holding Corp. | 20,900 | 336,699 | ||||||
IBERIABANK Corp. | 41,500 | 2,066,285 | ||||||
Independent Bank Corp. | 30,100 | 888,251 | ||||||
International Bancshares Corp. | 73,100 | 1,326,765 | ||||||
Investors Bancorp, Inc. | 62,000 | 1,115,380 | ||||||
Kaiser Federal Financial Group, Inc. | 12,400 | 191,332 | ||||||
Kearny Financial Corp. | 22,000 | 207,900 | ||||||
Lakeland Bancorp, Inc. | 37,050 | 367,907 | ||||||
Lakeland Financial Corp. | 23,200 | 619,208 | ||||||
MainSource Financial Group, Inc. | 27,000 | 338,040 | ||||||
MB Financial, Inc. | 75,024 | 1,519,986 | ||||||
Mercantile Bank Corp. * | 11,800 | 195,054 | ||||||
Merchants Bancshares, Inc. | 6,446 | 188,739 | ||||||
Meridian Interstate Bancorp, Inc. * | 11,800 | 199,302 | ||||||
Metro Bancorp, Inc. * | 18,600 | 241,428 | ||||||
MetroCorp Bancshares, Inc. * | 21,700 | 220,038 | ||||||
MGIC Investment Corp. * | 251,400 | 432,408 | ||||||
Middleburg Financial Corp. | 7,400 | 124,764 | ||||||
MidSouth Bancorp, Inc. | 10,200 | 158,100 | ||||||
MidWestOne Financial Group, Inc. | 9,300 | 187,860 | ||||||
NASB Financial, Inc. (c)* | 5,800 | 132,820 | ||||||
National Bankshares, Inc. | 9,300 | 292,950 | ||||||
National Penn Bancshares, Inc. | 172,878 | 1,543,801 | ||||||
Nationstar Mortgage Holdings, Inc. * | 26,300 | 950,219 | ||||||
NBT Bancorp, Inc. | 46,085 | 980,228 | ||||||
Northfield Bancorp, Inc. (c) | 22,800 | 370,272 | ||||||
Northrim BanCorp, Inc. | 8,900 | 200,517 | ||||||
Northwest Bancshares, Inc. | 134,009 | 1,594,707 | ||||||
OceanFirst Financial Corp. | 19,600 | 273,224 | ||||||
Ocwen Financial Corp. * | 149,200 | 5,754,644 | ||||||
Old National Bancorp | 140,783 | 1,727,407 | ||||||
OmniAmerican Bancorp, Inc. * | 15,900 | 363,951 | ||||||
Oriental Financial Group, Inc. | 55,500 | 653,790 | ||||||
Oritani Financial Corp. | 62,450 | 954,236 | ||||||
Pacific Capital Bancorp * | 5,500 | 252,505 | ||||||
Pacific Continental Corp. | 24,700 | 229,463 | ||||||
Pacific Mercantile Bancorp * | 14,600 | 104,682 | ||||||
PacWest Bancorp | 42,216 | 949,860 | ||||||
Park National Corp. (c) | 15,553 | 1,035,052 | ||||||
Park Sterling Corp. * | 42,900 | 214,500 | ||||||
Peapack-Gladstone Financial Corp. | 12,200 | 188,978 | ||||||
Penns Woods Bancorp, Inc. | 5,100 | 206,703 | ||||||
Peoples Bancorp, Inc. | 14,100 | 300,330 | ||||||
Peoples Federal Bancshares, Inc. | 8,400 | 143,220 | ||||||
Pinnacle Financial Partners, Inc. * | 47,932 | 937,071 | ||||||
Preferred Bank * | 16,100 | 228,781 | ||||||
PrivateBancorp, Inc. | 85,376 | 1,379,676 | ||||||
Prosperity Bancshares, Inc. | 66,100 | 2,766,946 | ||||||
Provident Financial Holdings, Inc. | 13,400 | 197,918 | ||||||
Provident Financial Services, Inc. | 83,551 | 1,253,265 | ||||||
Provident New York Bancorp | 60,100 | 548,713 | ||||||
Radian Group, Inc. | 181,900 | 853,111 | ||||||
Renasant Corp. | 36,300 | 668,283 | ||||||
Republic Bancorp, Inc., Class A | 13,300 | 287,546 | ||||||
Rockville Financial, Inc. | 39,500 | 524,955 | ||||||
Roma Financial Corp. | 10,100 | 88,981 | ||||||
S&T Bancorp, Inc. | 41,981 | 737,606 | ||||||
S.Y. Bancorp, Inc. | 16,100 | 379,638 | ||||||
Sandy Spring Bancorp, Inc. | 34,900 | 667,288 | ||||||
SCBT Financial Corp. | 20,700 | 821,376 | ||||||
Seacoast Banking Corp. of Florida * | 97,100 | 155,360 | ||||||
SI Financial Group, Inc. | 14,500 | 159,500 | ||||||
Sierra Bancorp | 15,900 | 178,875 | ||||||
Simmons First National Corp., Class A | 23,200 | 577,448 |
See financial notes 19
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Southside Bancshares, Inc. | 25,300 | 516,373 | ||||||
Southwest Bancorp, Inc. * | 26,000 | 280,540 | ||||||
State Bank Financial Corp. | 44,800 | 679,616 | ||||||
StellarOne Corp. | 30,800 | 422,576 | ||||||
Sterling Bancorp | 41,400 | 395,370 | ||||||
Sterling Financial Corp. | 37,900 | 805,754 | ||||||
Suffolk Bancorp * | 13,000 | 195,260 | ||||||
Sun Bancorp, Inc. * | 50,400 | 155,736 | ||||||
Susquehanna Bancshares, Inc. | 261,608 | 2,712,875 | ||||||
Taylor Capital Group, Inc. * | 22,200 | 414,696 | ||||||
Territorial Bancorp, Inc. | 16,000 | 361,600 | ||||||
Texas Capital Bancshares, Inc. * | 55,700 | 2,644,079 | ||||||
The Bancorp, Inc. * | 39,200 | 445,704 | ||||||
The First of Long Island Corp. | 10,200 | 305,898 | ||||||
Tompkins Financial Corp. | 15,400 | 623,392 | ||||||
TowneBank | 35,879 | 558,636 | ||||||
Tree.com, Inc. * | 8,300 | 119,935 | ||||||
TriCo Bancshares | 21,900 | 367,920 | ||||||
TrustCo Bank Corp. | 131,702 | 734,897 | ||||||
Trustmark Corp. | 90,877 | 2,132,883 | ||||||
UMB Financial Corp. | 45,300 | 2,017,209 | ||||||
Umpqua Holdings Corp. | 157,495 | 1,904,115 | ||||||
Union First Market Bankshares Corp. | 27,100 | 425,470 | ||||||
United Bankshares, Inc. (c) | 69,022 | 1,644,794 | ||||||
United Community Banks, Inc. * | 55,700 | 484,590 | ||||||
United Financial Bancorp, Inc. | 21,600 | 331,992 | ||||||
Univest Corp. of Pennsylvania | 22,500 | 380,700 | ||||||
ViewPoint Financial Group, Inc. | 46,700 | 971,360 | ||||||
Virginia Commerce Bancorp, Inc. * | 36,800 | 337,088 | ||||||
Walker & Dunlop, Inc. * | 14,400 | 239,184 | ||||||
Washington Banking Co. | 20,500 | 280,235 | ||||||
Washington Trust Bancorp, Inc. | 21,000 | 566,790 | ||||||
Waterstone Financial, Inc. * | 20,600 | 111,240 | ||||||
Webster Financial Corp. | 101,200 | 2,226,400 | ||||||
WesBanco, Inc. | 32,998 | 725,956 | ||||||
West Bancorp, Inc. | 20,800 | 226,928 | ||||||
West Coast Bancorp | 25,800 | 568,116 | ||||||
Westamerica Bancorp | 38,700 | 1,707,444 | ||||||
Western Alliance Bancorp * | 97,200 | 997,272 | ||||||
Westfield Financial, Inc. | 37,600 | 274,104 | ||||||
Wilshire Bancorp, Inc. * | 90,100 | 586,551 | ||||||
Wintrust Financial Corp. | 49,855 | 1,842,142 | ||||||
WSFS Financial Corp. | 10,500 | 444,728 | ||||||
136,308,628 | ||||||||
Capital Goods 8.8% | ||||||||
A.O. Smith Corp. | 54,295 | 3,299,507 | ||||||
A123 Systems, Inc. * | 147,000 | 21,139 | ||||||
AAON, Inc. | 25,150 | 527,647 | ||||||
AAR Corp. | 56,097 | 846,504 | ||||||
Accuride Corp. * | 65,000 | 173,550 | ||||||
Aceto Corp. | 35,700 | 357,714 | ||||||
Actuant Corp., Class A | 101,048 | 2,853,596 | ||||||
Acuity Brands, Inc. | 58,800 | 3,804,360 | ||||||
Aegion Corp. * | 55,000 | 1,015,850 | ||||||
Aerovironment, Inc. * | 24,300 | 534,357 | ||||||
Aircastle Ltd. | 80,600 | 897,078 | ||||||
Alamo Group, Inc. | 10,500 | 351,750 | ||||||
Albany International Corp., Class A | 39,000 | 856,830 | ||||||
Altra Holdings, Inc. | 38,200 | 688,364 | ||||||
Ameresco, Inc., Class A * | 27,700 | 306,362 | ||||||
American Railcar Industries, Inc. * | 13,000 | 381,940 | ||||||
American Science & Engineering, Inc. | 12,200 | 775,676 | ||||||
American Superconductor Corp. (c)* | 59,800 | 214,682 | ||||||
American Woodmark Corp. * | 12,600 | 289,800 | ||||||
Ampco-Pittsburgh Corp. | 11,400 | 201,324 | ||||||
API Technologies Corp. * | 44,400 | 117,216 | ||||||
Apogee Enterprises, Inc. | 40,100 | 816,837 | ||||||
Applied Industrial Technologies, Inc. | 59,166 | 2,401,548 | ||||||
Argan, Inc. | 13,500 | 240,165 | ||||||
Astec Industries, Inc. * | 28,095 | 809,136 | ||||||
Astronics Corp. * | 15,600 | 362,076 | ||||||
Astronics Corp., Class B * | 2,340 | 53,469 | ||||||
AZZ, Inc. | 35,000 | 1,380,400 | ||||||
Barnes Group, Inc. | 75,740 | 1,732,931 | ||||||
Beacon Roofing Supply, Inc. * | 64,382 | 2,082,114 | ||||||
Belden, Inc. | 63,500 | 2,273,300 | ||||||
Blount International, Inc. * | 68,262 | 903,106 | ||||||
BlueLinx Holdings, Inc. * | 33,100 | 69,841 | ||||||
Brady Corp., Class A | 67,329 | 2,071,040 | ||||||
Briggs & Stratton Corp. | 67,593 | 1,334,962 | ||||||
Builders FirstSource, Inc. * | 60,900 | 335,559 | ||||||
CAI International, Inc. * | 18,200 | 403,312 | ||||||
Capstone Turbine Corp. * | 409,800 | 409,800 | ||||||
Cascade Corp. | 13,300 | 864,367 | ||||||
Ceradyne, Inc. | 33,312 | 1,164,588 | ||||||
Chart Industries, Inc. * | 41,700 | 2,951,943 | ||||||
CIRCOR International, Inc. | 24,300 | 838,107 | ||||||
CLARCOR, Inc. | 69,900 | 3,162,276 | ||||||
Coleman Cable, Inc. | 11,200 | 106,288 | ||||||
Columbus McKinnon Corp. * | 25,800 | 386,226 | ||||||
Comfort Systems USA, Inc. | 50,800 | 553,720 | ||||||
Commercial Vehicle Group, Inc. * | 33,500 | 254,265 | ||||||
CPI Aerostructures, Inc. * | 7,700 | 84,777 | ||||||
Cubic Corp. | 22,615 | 1,103,612 | ||||||
Curtiss-Wright Corp. | 66,000 | 2,037,420 | ||||||
DigitalGlobe, Inc. * | 49,300 | 1,278,842 | ||||||
Douglas Dynamics, Inc. | 30,400 | 461,776 | ||||||
DXP Enterprises, Inc. * | 12,500 | 615,375 | ||||||
Dycom Industries, Inc. * | 47,200 | 672,128 | ||||||
Dynamic Materials Corp. | 17,900 | 240,218 | ||||||
Edgen Group, Inc. * | 20,600 | 156,766 | ||||||
EMCOR Group, Inc. | 93,100 | 2,994,096 | ||||||
Encore Wire Corp. | 26,241 | 809,797 | ||||||
Energy Recovery, Inc. * | 61,300 | 182,061 | ||||||
EnerSys, Inc. * | 66,878 | 2,305,953 | ||||||
Enphase Energy, Inc. * | 11,400 | 41,838 | ||||||
EnPro Industries, Inc. * | 28,800 | 1,052,928 | ||||||
ESCO Technologies, Inc. | 37,769 | 1,414,071 | ||||||
Esterline Technologies Corp. * | 43,000 | 2,484,970 | ||||||
Federal Signal Corp. * | 83,200 | 480,064 | ||||||
Flow International Corp. * | 63,400 | 210,488 | ||||||
Franklin Electric Co., Inc. | 32,218 | 1,866,711 | ||||||
FreightCar America, Inc. | 16,000 | 308,000 | ||||||
FuelCell Energy, Inc. * | 215,500 | 200,523 | ||||||
Furmanite Corp. * | 49,500 | 249,975 | ||||||
GenCorp, Inc. * | 83,200 | 733,824 | ||||||
Generac Holdings, Inc. | 35,300 | 1,200,200 | ||||||
GeoEye, Inc. * | 20,700 | 649,359 |
20 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Gibraltar Industries, Inc. * | 40,700 | 507,122 | ||||||
Global Power Equipment Group, Inc. | 23,600 | 398,840 | ||||||
Graham Corp. | 13,200 | 237,204 | ||||||
Granite Construction, Inc. | 54,500 | 1,646,445 | ||||||
Great Lakes Dredge & Dock Corp. | 85,200 | 677,340 | ||||||
Griffon Corp. | 63,821 | 647,783 | ||||||
H&E Equipment Services, Inc. | 40,500 | 616,410 | ||||||
Hardinge, Inc. | 16,000 | 166,080 | ||||||
HEICO Corp. | 73,545 | 2,841,043 | ||||||
Hexcel Corp. * | 138,383 | 3,537,070 | ||||||
Houston Wire & Cable Co. | 23,800 | 263,466 | ||||||
Hurco Cos., Inc. * | 8,600 | 197,628 | ||||||
Hyster-Yale Materials Handling, Inc. * | 7,777 | 319,479 | ||||||
Hyster-Yale Materials Handling, Inc., Class B (a)(b)* | 7,777 | 319,479 | ||||||
II-VI, Inc. * | 72,200 | 1,192,022 | ||||||
Insteel Industries, Inc. | 23,600 | 273,760 | ||||||
John Bean Technologies Corp. | 40,900 | 630,678 | ||||||
Kadant, Inc. * | 16,500 | 400,785 | ||||||
Kaman Corp. | 37,349 | 1,389,383 | ||||||
Kaydon Corp. | 43,635 | 975,679 | ||||||
Kratos Defense & Security Solutions, Inc. * | 54,700 | 301,397 | ||||||
L.B. Foster Co., Class A | 12,700 | 419,227 | ||||||
Layne Christensen Co. * | 28,311 | 631,052 | ||||||
Lindsay Corp. | 18,000 | 1,374,660 | ||||||
LMI Aerospace, Inc. * | 12,300 | 246,984 | ||||||
LSI Industries, Inc. | 26,100 | 176,958 | ||||||
Lydall, Inc. * | 23,000 | 296,930 | ||||||
MasTec, Inc. * | 79,973 | 1,804,191 | ||||||
Meritor, Inc. * | 131,700 | 582,114 | ||||||
Met-Pro Corp. | 19,600 | 177,968 | ||||||
Michael Baker Corp. * | 11,200 | 253,232 | ||||||
Middleby Corp. * | 26,152 | 3,267,692 | ||||||
Miller Industries, Inc. | 15,800 | 242,530 | ||||||
Moog, Inc., Class A * | 63,200 | 2,339,032 | ||||||
Mueller Industries, Inc. | 29,224 | 1,280,011 | ||||||
Mueller Water Products, Inc., Class A | 218,000 | 1,135,780 | ||||||
MYR Group, Inc. * | 29,000 | 614,220 | ||||||
National Presto Industries, Inc. (c) | 7,100 | 527,885 | ||||||
NCI Building Systems, Inc. * | 26,400 | 295,944 | ||||||
NN, Inc. * | 22,500 | 186,300 | ||||||
Nortek, Inc. * | 10,600 | 630,806 | ||||||
Northwest Pipe Co. * | 12,500 | 287,250 | ||||||
Omega Flex, Inc. * | 3,702 | 46,275 | ||||||
Orbital Sciences Corp. * | 80,436 | 1,077,842 | ||||||
Orion Marine Group, Inc. * | 36,200 | 242,178 | ||||||
Patrick Industries, Inc. * | 5,800 | 102,486 | ||||||
PGT, Inc. * | 26,800 | 115,776 | ||||||
Pike Electric Corp. * | 21,800 | 198,598 | ||||||
PMFG, Inc. * | 27,700 | 180,050 | ||||||
Powell Industries, Inc. * | 13,000 | 517,140 | ||||||
Preformed Line Products Co. | 3,300 | 177,771 | ||||||
Primoris Services Corp. | 41,100 | 574,167 | ||||||
Proto Labs, Inc. * | 6,600 | 229,020 | ||||||
Quanex Building Products Corp. | 50,804 | 1,004,395 | ||||||
Raven Industries, Inc. | 49,800 | 1,359,042 | ||||||
RBC Bearings, Inc. * | 30,500 | 1,514,630 | ||||||
Rexnord Corp. (c)* | 39,500 | 715,740 | ||||||
Robbins & Myers, Inc. | 53,500 | 3,171,480 | ||||||
Rush Enterprises, Inc., Class A * | 48,087 | 913,653 | ||||||
Sauer-Danfoss, Inc. | 16,600 | 664,996 | ||||||
Seaboard Corp. * | 400 | 912,532 | ||||||
SeaCube Container Leasing Ltd. | 14,800 | 274,096 | ||||||
SIFCO Industries, Inc. | 3,400 | 56,950 | ||||||
Simpson Manufacturing Co., Inc. | 55,694 | 1,696,439 | ||||||
Standex International Corp. | 17,600 | 813,824 | ||||||
Sterling Construction Co., Inc. * | 22,000 | 195,800 | ||||||
Sun Hydraulics Corp. | 30,150 | 803,196 | ||||||
Sypris Solutions, Inc. | 14,500 | 91,350 | ||||||
TAL International Group, Inc. | 40,100 | 1,369,014 | ||||||
Taser International, Inc. * | 76,200 | 595,122 | ||||||
Teledyne Technologies, Inc. * | 51,200 | 3,278,336 | ||||||
Tennant Co. | 26,700 | 999,114 | ||||||
Textainer Group Holdings Ltd. | 19,200 | 579,840 | ||||||
The Eastern Co. | 8,500 | 136,000 | ||||||
The Gorman-Rupp Co. | 20,425 | 551,475 | ||||||
The Greenbrier Cos., Inc. * | 31,400 | 546,674 | ||||||
The KEYW Holding Corp. (c)* | 34,500 | 418,830 | ||||||
Thermon Group Holdings, Inc. * | 20,200 | 501,768 | ||||||
Titan International, Inc. | 66,300 | 1,390,974 | ||||||
Titan Machinery, Inc. * | 23,200 | 548,680 | ||||||
Trex Co., Inc. * | 19,000 | 663,860 | ||||||
TriMas Corp. * | 44,200 | 1,108,536 | ||||||
Tutor Perini Corp. * | 49,030 | 497,164 | ||||||
Twin Disc, Inc. | 11,300 | 171,308 | ||||||
Universal Forest Products, Inc. | 28,162 | 1,084,237 | ||||||
USG Corp. (c)* | 101,700 | 2,716,407 | ||||||
Vicor Corp. * | 26,200 | 167,156 | ||||||
Wabash National Corp. * | 98,800 | 623,428 | ||||||
Watsco, Inc. | 41,000 | 2,802,350 | ||||||
Watts Water Technologies, Inc., Class A | 41,407 | 1,665,804 | ||||||
Willis Lease Finance Corp. * | 7,500 | 106,650 | ||||||
Woodward, Inc. | 96,000 | 3,216,000 | ||||||
148,010,406 | ||||||||
Commercial & Professional Supplies 3.6% | ||||||||
A.T. Cross Co., Class A * | 12,800 | 121,216 | ||||||
ABM Industries, Inc. | 73,809 | 1,402,371 | ||||||
Acacia Research Corp. * | 72,500 | 1,882,825 | ||||||
Acco Brands Corp. * | 155,100 | 1,122,924 | ||||||
Acorn Energy, Inc. (c) | 24,600 | 209,346 | ||||||
American Reprographics Co. * | 49,600 | 189,968 | ||||||
Asset Acceptance Capital Corp. * | 21,800 | 139,084 | ||||||
ASTA Funding, Inc. | 15,200 | 142,576 | ||||||
Barrett Business Services, Inc. | 10,200 | 304,266 | ||||||
Casella Waste Systems, Inc., Class A * | 52,000 | 238,160 | ||||||
CBIZ, Inc. * | 52,800 | 291,456 | ||||||
CDI Corp. | 19,400 | 333,486 | ||||||
CECO Environmental Corp. | 9,800 | 86,730 | ||||||
Cenveo, Inc. * | 73,800 | 148,338 | ||||||
Compx International, Inc. | 6,699 | 93,987 | ||||||
Consolidated Graphics, Inc. * | 11,400 | 336,414 | ||||||
Courier Corp. | 13,800 | 166,290 | ||||||
CRA International, Inc. * | 14,500 | 242,730 | ||||||
Deluxe Corp. | 70,746 | 2,229,206 | ||||||
Encore Capital Group, Inc. * | 30,100 | 872,900 | ||||||
EnergySolutions, Inc. * | 106,900 | 305,734 |
See financial notes 21
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
EnerNOC, Inc. * | 35,000 | 431,200 | ||||||
Ennis, Inc. | 38,200 | 584,460 | ||||||
Exponent, Inc. * | 18,700 | 1,028,126 | ||||||
Franklin Covey Co. * | 17,900 | 215,158 | ||||||
FTI Consulting, Inc. * | 59,000 | 1,531,640 | ||||||
G&K Services, Inc., Class A | 26,330 | 849,143 | ||||||
GP Strategies Corp. * | 19,900 | 383,075 | ||||||
Healthcare Services Group, Inc. | 96,025 | 2,294,997 | ||||||
Heidrick & Struggles International, Inc. | 24,100 | 285,344 | ||||||
Heritage-Crystal Clean, Inc. * | 10,600 | 187,620 | ||||||
Herman Miller, Inc. | 80,100 | 1,553,139 | ||||||
Hill International, Inc. * | 33,600 | 113,904 | ||||||
HNI Corp. | 62,500 | 1,720,000 | ||||||
Hudson Global, Inc. * | 43,900 | 177,356 | ||||||
Huron Consulting Group, Inc. * | 31,500 | 908,775 | ||||||
ICF International, Inc. * | 28,200 | 517,470 | ||||||
InnerWorkings, Inc. * | 43,600 | 628,712 | ||||||
Insperity, Inc. | 30,710 | 801,838 | ||||||
Interface, Inc. | 80,400 | 1,150,524 | ||||||
Intersections, Inc. (c) | 12,300 | 114,267 | ||||||
Kelly Services, Inc., Class A | 35,723 | 474,759 | ||||||
Kforce, Inc. * | 38,800 | 432,620 | ||||||
Kimball International, Inc., Class B | 45,500 | 543,270 | ||||||
Knoll, Inc. | 66,903 | 962,734 | ||||||
Korn/Ferry International * | 65,261 | 873,845 | ||||||
McGrath RentCorp | 33,798 | 887,535 | ||||||
Metalico, Inc. * | 53,700 | 114,381 | ||||||
Mine Safety Appliances Co. | 37,889 | 1,462,515 | ||||||
Mistras Group, Inc. * | 21,400 | 472,726 | ||||||
Mobile Mini, Inc. * | 52,468 | 913,993 | ||||||
Multi-Color Corp. | 18,500 | 420,320 | ||||||
Navigant Consulting, Inc. * | 72,548 | 753,774 | ||||||
NL Industries, Inc. | 8,900 | 90,513 | ||||||
Odyssey Marine Exploration, Inc. (c)* | 97,500 | 281,775 | ||||||
On Assignment, Inc. * | 59,000 | 1,125,720 | ||||||
Pendrell Corp. * | 202,500 | 240,975 | ||||||
Performant Financial Corp. * | 12,500 | 123,375 | ||||||
Portfolio Recovery Associates, Inc. * | 23,943 | 2,505,635 | ||||||
Quad Graphics, Inc. (c) | 37,000 | 678,210 | ||||||
Resources Connection, Inc. | 57,950 | 715,103 | ||||||
RPX Corp. * | 29,000 | 305,370 | ||||||
Schawk, Inc. | 17,700 | 218,418 | ||||||
Standard Parking Corp. * | 21,200 | 484,420 | ||||||
Steelcase, Inc., Class A | 106,542 | 1,066,485 | ||||||
Swisher Hygiene, Inc. (c)* | 154,600 | 228,808 | ||||||
Sykes Enterprises, Inc. * | 54,193 | 738,109 | ||||||
Team, Inc. * | 27,100 | 888,338 | ||||||
Tetra Tech, Inc. * | 88,900 | 2,306,066 | ||||||
The Advisory Board Co. * | 48,952 | 2,325,220 | ||||||
The Brink’s Co. | 64,900 | 1,707,519 | ||||||
The Corporate Executive Board Co. | 46,200 | 2,077,152 | ||||||
The Dolan Co. * | 40,700 | 188,441 | ||||||
The Geo Group, Inc. | 85,400 | 2,367,288 | ||||||
TMS International Corp., Class A * | 17,200 | 180,256 | ||||||
TRC Cos., Inc. * | 23,700 | 170,877 | ||||||
TrueBlue, Inc. * | 57,576 | 751,367 | ||||||
UniFirst Corp. | 19,935 | 1,386,878 | ||||||
United Stationers, Inc. | 56,834 | 1,649,323 | ||||||
US Ecology, Inc. | 24,500 | 581,385 | ||||||
Viad Corp. | 27,296 | 578,948 | ||||||
VSE Corp. | 5,500 | 130,075 | ||||||
WageWorks, Inc. * | 8,900 | 172,571 | ||||||
60,913,847 | ||||||||
Consumer Durables & Apparel 3.1% | ||||||||
American Greetings Corp., Class A (c) | 48,211 | 827,783 | ||||||
Arctic Cat, Inc. * | 17,200 | 623,844 | ||||||
Bassett Furniture Industries, Inc. | 15,500 | 177,785 | ||||||
Beazer Homes USA, Inc. * | 34,140 | 562,969 | ||||||
Black Diamond, Inc. * | 28,600 | 271,700 | ||||||
Blyth, Inc. (c) | 14,000 | 319,760 | ||||||
Brunswick Corp. | 124,400 | 2,934,596 | ||||||
Callaway Golf Co. | 94,069 | 513,617 | ||||||
Cavco Industries, Inc. * | 10,200 | 493,068 | ||||||
Cherokee, Inc. | 11,400 | 164,274 | ||||||
Columbia Sportswear Co. (c) | 16,700 | 941,880 | ||||||
Crocs, Inc. * | 125,100 | 1,576,260 | ||||||
CSS Industries, Inc. | 13,400 | 269,340 | ||||||
Culp, Inc. | 12,000 | 151,680 | ||||||
Delta Apparel, Inc. * | 9,500 | 143,830 | ||||||
Ethan Allen Interiors, Inc. | 34,179 | 1,005,204 | ||||||
Fifth & Pacific Cos., Inc. * | 149,300 | 1,639,314 | ||||||
Flexsteel Industries, Inc. | 6,200 | 124,806 | ||||||
G-III Apparel Group Ltd. * | 23,500 | 868,560 | ||||||
Helen of Troy Ltd. * | 43,500 | 1,314,570 | ||||||
Hooker Furniture Corp. | 14,800 | 201,872 | ||||||
Hovnanian Enterprises, Inc., Class A (c)* | 137,000 | 589,100 | ||||||
Iconix Brand Group, Inc. * | 97,700 | 1,808,427 | ||||||
iRobot Corp. * | 37,700 | 677,469 | ||||||
JAKKS Pacific, Inc. | 36,400 | 469,924 | ||||||
Johnson Outdoors, Inc., Class A * | 8,500 | 165,835 | ||||||
K-Swiss, Inc., Class A * | 35,100 | 80,028 | ||||||
KB Home (c) | 107,000 | 1,709,860 | ||||||
La-Z-Boy, Inc. * | 72,500 | 1,175,950 | ||||||
LeapFrog Enterprises, Inc. * | 69,300 | 612,612 | ||||||
Libbey, Inc. * | 29,300 | 525,935 | ||||||
Lifetime Brands, Inc. | 12,400 | 137,640 | ||||||
M.D.C. Holdings, Inc. | 52,500 | 2,007,600 | ||||||
M/I Homes, Inc. * | 29,700 | 660,825 | ||||||
Maidenform Brands, Inc. * | 33,200 | 621,172 | ||||||
Marine Products Corp. | 13,700 | 81,241 | ||||||
Meritage Homes Corp. * | 42,385 | 1,567,397 | ||||||
Movado Group, Inc. | 24,700 | 782,743 | ||||||
NACCO Industries, Inc., Class A | 7,777 | 393,827 | ||||||
Oxford Industries, Inc. | 19,200 | 1,065,216 | ||||||
Perry Ellis International, Inc. * | 16,800 | 346,752 | ||||||
Quiksilver, Inc. * | 189,900 | 607,680 | ||||||
R. G. Barry Corp. | 11,500 | 175,260 | ||||||
Sealy Corp. (c)* | 66,200 | 147,626 | ||||||
Skechers U.S.A., Inc., Class A * | 53,778 | 892,715 | ||||||
Skullcandy, Inc. (c)* | 22,200 | 268,842 | ||||||
Smith & Wesson Holding Corp. * | 89,100 | 855,360 | ||||||
Standard Pacific Corp. * | 160,600 | 1,108,140 | ||||||
Steinway Musical Instruments, Inc. * | 10,700 | 258,298 | ||||||
Steven Madden Ltd. * | 55,000 | 2,360,600 | ||||||
Sturm, Ruger & Co., Inc. (c) | 26,100 | 1,232,703 |
22 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Jones Group, Inc. | 112,600 | 1,329,806 | ||||||
The Ryland Group, Inc. | 61,200 | 2,072,844 | ||||||
The Warnaco Group, Inc. * | 57,200 | 4,037,176 | ||||||
True Religion Apparel, Inc. | 36,300 | 931,095 | ||||||
Tumi Holdings, Inc. (c)* | 29,600 | 663,040 | ||||||
Unifi, Inc. * | 18,700 | 262,361 | ||||||
Universal Electronics, Inc. * | 20,100 | 344,916 | ||||||
Vera Bradley, Inc. (c)* | 27,400 | 816,794 | ||||||
Wolverine World Wide, Inc. | 67,436 | 2,823,545 | ||||||
Zagg, Inc. (c)* | 35,000 | 251,300 | ||||||
52,046,366 | ||||||||
Consumer Services 4.1% | ||||||||
AFC Enterprises, Inc. * | 33,200 | 840,624 | ||||||
American Public Education, Inc. * | 25,200 | 918,036 | ||||||
Ameristar Casinos, Inc. | 47,375 | 864,594 | ||||||
Ascent Capital Group, Inc., Class A * | 20,200 | 1,200,890 | ||||||
Biglari Holdings, Inc. * | 1,600 | 565,776 | ||||||
BJ’s Restaurants, Inc. * | 33,700 | 1,113,785 | ||||||
Bloomin’ Brands, Inc. * | 25,600 | 349,952 | ||||||
Bluegreen Corp. * | 19,700 | 116,821 | ||||||
Bob Evans Farms, Inc. | 40,546 | 1,543,586 | ||||||
Boyd Gaming Corp. * | 81,300 | 501,621 | ||||||
Bravo Brio Restaurant Group, Inc. * | 28,900 | 381,480 | ||||||
Bridgepoint Education, Inc. (c)* | 23,900 | 239,000 | ||||||
Buffalo Wild Wings, Inc. * | 25,500 | 1,936,725 | ||||||
Caesars Entertainment Corp. (c)* | 49,400 | 286,026 | ||||||
Capella Education Co. * | 19,400 | 605,668 | ||||||
Career Education Corp. * | 71,100 | 241,740 | ||||||
Caribou Coffee Co., Inc. * | 29,000 | 347,130 | ||||||
Carriage Services, Inc. | 21,800 | 231,734 | ||||||
Carrols Restaurant Group, Inc. * | 26,300 | 168,846 | ||||||
CEC Entertainment, Inc. | 24,938 | 773,078 | ||||||
Churchill Downs, Inc. | 17,861 | 1,166,859 | ||||||
Chuy’s Holdings, Inc. * | 9,300 | 227,199 | ||||||
Coinstar, Inc. (c)* | 43,900 | 2,060,666 | ||||||
Collectors Universe | 7,300 | 87,600 | ||||||
Corinthian Colleges, Inc. * | 104,400 | 285,012 | ||||||
Cracker Barrel Old Country Store, Inc. | 26,453 | 1,683,733 | ||||||
Del Frisco’s Restaurant Group, Inc. * | 8,100 | 119,880 | ||||||
Denny’s Corp. * | 132,500 | 609,500 | ||||||
DineEquity, Inc. * | 21,500 | 1,348,050 | ||||||
Domino’s Pizza, Inc. | 80,679 | 3,277,181 | ||||||
Education Management Corp. (c)* | 36,600 | 116,388 | ||||||
Einstein Noah Restaurant Group, Inc. | 8,000 | 123,440 | ||||||
Fiesta Restaurant Group, Inc. * | 22,200 | 293,484 | ||||||
Frisch’s Restaurants, Inc. | 4,300 | 76,884 | ||||||
Grand Canyon Education, Inc. * | 54,800 | 1,192,448 | ||||||
Hillenbrand, Inc. | 75,700 | 1,549,579 | ||||||
Ignite Restaurant Group, Inc. * | 9,100 | 104,286 | ||||||
International Speedway Corp., Class A | 39,400 | 1,004,700 | ||||||
Interval Leisure Group, Inc. | 53,900 | 1,027,334 | ||||||
Isle of Capri Casinos, Inc. * | 27,300 | 165,984 | ||||||
Jack In The Box, Inc. * | 60,688 | 1,578,495 | ||||||
Jamba, Inc. * | 88,300 | 193,377 | ||||||
K12, Inc. (c)* | 36,600 | 749,202 | ||||||
Krispy Kreme Doughnuts, Inc. * | 84,200 | 625,606 | ||||||
LIFE TIME FITNESS, Inc. * | 59,777 | 2,683,390 | ||||||
Lincoln Educational Services Corp. | 30,200 | 112,042 | ||||||
Luby’s, Inc. * | 25,200 | 161,028 | ||||||
Mac-Gray Corp. | 15,900 | 206,700 | ||||||
Marriott Vacations Worldwide Corp. * | 36,500 | 1,435,910 | ||||||
Matthews International Corp., Class A | 39,484 | 1,135,955 | ||||||
Monarch Casino & Resort, Inc. * | 11,900 | 108,528 | ||||||
Morgans Hotel Group Co. * | 29,500 | 190,275 | ||||||
MTR Gaming Group, Inc. * | 31,000 | 108,190 | ||||||
Multimedia Games Holding Co., Inc. * | 38,500 | 612,150 | ||||||
Nathan’s Famous, Inc. * | 3,700 | 102,527 | ||||||
National American University Holdings, Inc. | 21,900 | 89,790 | ||||||
Orient-Express Hotels Ltd., Class A * | 132,900 | 1,558,917 | ||||||
Papa John’s International, Inc. * | 24,855 | 1,325,269 | ||||||
Pinnacle Entertainment, Inc. * | 86,685 | 1,106,101 | ||||||
Premier Exhibitions, Inc. * | 35,300 | 96,722 | ||||||
Red Lion Hotels Corp. * | 19,700 | 129,823 | ||||||
Red Robin Gourmet Burgers, Inc. * | 20,200 | 674,680 | ||||||
Regis Corp. | 79,849 | 1,330,284 | ||||||
Ruby Tuesday, Inc. * | 87,200 | 629,584 | ||||||
Ruth’s Hospitality Group, Inc. * | 47,100 | 313,215 | ||||||
Ryman Hospitality Properties * | 42,635 | 1,663,191 | ||||||
Scientific Games Corp., Class A * | 77,900 | 641,117 | ||||||
SHFL Entertainment, Inc. * | 75,400 | 1,065,402 | ||||||
Six Flags Entertainment Corp. | 55,000 | 3,141,050 | ||||||
Sonic Corp. * | 82,829 | 825,805 | ||||||
Sotheby’s | 94,300 | 2,935,559 | ||||||
Speedway Motorsports, Inc. | 15,784 | 257,279 | ||||||
Steiner Leisure Ltd. * | 21,009 | 922,715 | ||||||
Stewart Enterprises, Inc., Class A | 105,500 | 819,735 | ||||||
Strayer Education, Inc. (c) | 16,400 | 942,344 | ||||||
Texas Roadhouse, Inc. | 86,596 | 1,409,783 | ||||||
The Cheesecake Factory, Inc. | 75,300 | 2,489,418 | ||||||
The Marcus Corp. | 27,300 | 297,570 | ||||||
Town Sports International Holdings, Inc. * | 31,800 | 400,680 | ||||||
Universal Technical Institute, Inc. | 28,600 | 366,652 | ||||||
Vail Resorts, Inc. | 50,371 | 2,860,065 | ||||||
WMS Industries, Inc. * | 75,600 | 1,242,108 | ||||||
69,285,552 | ||||||||
Diversified Financials 3.2% | ||||||||
Apollo Investment Corp. | 284,700 | 2,263,365 | ||||||
Arlington Asset Investment Corp., Class A | 15,300 | 340,425 | ||||||
Artio Global Investors, Inc. | 41,900 | 99,722 | ||||||
BGC Partners, Inc., Class A | 135,100 | 632,268 | ||||||
BlackRock Kelso Capital Corp. | 100,400 | 1,005,004 | ||||||
Calamos Asset Management, Inc., Class A | 25,400 | 274,320 | ||||||
California First National Bancorp | 5,400 | 98,658 | ||||||
Capital Southwest Corp. | 4,400 | 474,100 | ||||||
Cash America International, Inc. | 40,370 | 1,578,063 | ||||||
CIFC Corp. * | 8,700 | 58,725 |
See financial notes 23
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Cohen & Steers, Inc. (c) | 25,328 | 708,931 | ||||||
Cowen Group, Inc., Class A * | 120,100 | 305,054 | ||||||
Credit Acceptance Corp. * | 10,800 | 881,820 | ||||||
DFC Global Corp. * | 60,000 | 1,011,000 | ||||||
Diamond Hill Investment Group | 4,100 | 315,618 | ||||||
Duff & Phelps Corp., Class A | 42,500 | 528,275 | ||||||
Epoch Holding Corp. | 21,900 | 480,048 | ||||||
Evercore Partners, Inc., Class A | 39,300 | 1,096,470 | ||||||
Ezcorp, Inc., Class A * | 65,800 | 1,293,628 | ||||||
FBR & Co. * | 56,146 | 167,315 | ||||||
Fidus Investment Corp. (c) | 16,500 | 277,200 | ||||||
Fifth Street Finance Corp. | 126,500 | 1,380,115 | ||||||
Financial Engines, Inc. * | 63,600 | 1,527,036 | ||||||
First Cash Financial Services, Inc. * | 39,300 | 1,755,138 | ||||||
Firsthand Technology Value Fund, Inc. * | 11,700 | 209,898 | ||||||
FXCM, Inc., Class A | 33,700 | 303,300 | ||||||
Gain Capital Holdings, Inc. | 20,400 | 93,840 | ||||||
GAMCO Investors, Inc., Class A | 9,700 | 475,300 | ||||||
GFI Group, Inc. | 92,868 | 293,463 | ||||||
Gladstone Capital Corp. | 28,200 | 250,980 | ||||||
Gladstone Investment Corp. | 29,600 | 219,040 | ||||||
Golub Capital BDC, Inc. | 19,600 | 306,348 | ||||||
Green Dot Corp., Class A (c)* | 32,900 | 335,251 | ||||||
Greenhill & Co., Inc. | 39,900 | 1,904,028 | ||||||
GSV Capital Corp. * | 26,500 | 206,435 | ||||||
Harris & Harris Group, Inc. * | 41,500 | 142,345 | ||||||
Hercules Technology Growth Capital, Inc. | 69,200 | 747,360 | ||||||
HFF, Inc., Class A * | 44,800 | 624,064 | ||||||
Horizon Technology Finance Corp. | 11,100 | 181,041 | ||||||
ICG Group, Inc. * | 54,400 | 570,112 | ||||||
INTL FCStone, Inc. * | 20,400 | 378,012 | ||||||
Investment Technology Group, Inc. * | 55,265 | 466,437 | ||||||
JMP Group, Inc. | 20,300 | 112,462 | ||||||
KBW, Inc. | 47,700 | 775,125 | ||||||
KCAP Financial, Inc. (c) | 30,300 | 274,821 | ||||||
Knight Capital Group, Inc., Class A * | 252,500 | 664,075 | ||||||
Ladenburg Thalmann Financial Services, Inc. * | 142,600 | 185,380 | ||||||
Main Street Capital Corp. (c) | 38,400 | 1,153,152 | ||||||
Manning & Napier, Inc. | 20,900 | 271,909 | ||||||
MarketAxess Holdings, Inc. | 50,060 | 1,563,874 | ||||||
Marlin Business Services Corp. | 11,600 | 262,044 | ||||||
MCG Capital Corp. | 103,200 | 480,912 | ||||||
Medallion Financial Corp. | 24,600 | 307,746 | ||||||
Medley Capital Corp. | 32,000 | 460,800 | ||||||
MicroFinancial, Inc. | 11,600 | 91,408 | ||||||
MVC Capital, Inc. | 32,100 | 396,756 | ||||||
Nelnet, Inc., Class A | 34,400 | 839,704 | ||||||
Netspend Holdings, Inc. * | 42,600 | 456,246 | ||||||
New Mountain Finance Corp. | 17,600 | 263,824 | ||||||
NewStar Financial, Inc. * | 36,500 | 456,250 | ||||||
NGP Capital Resources Co. | 29,000 | 212,570 | ||||||
Nicholas Financial, Inc. | 13,000 | 169,130 | ||||||
Oppenheimer Holdings, Inc., Class A | 13,800 | 224,664 | ||||||
PennantPark Investment Corp. | 91,000 | 1,001,000 | ||||||
PHH Corp. * | 77,763 | 1,618,248 | ||||||
PICO Holdings, Inc. * | 32,300 | 715,122 | ||||||
Piper Jaffray Cos., Inc. * | 22,239 | 597,117 | ||||||
Prospect Capital Corp. | 207,900 | 2,461,536 | ||||||
Pzena Investment Management, Inc., Class A | 13,700 | 77,268 | ||||||
Regional Management Corp. (c)* | 6,600 | 115,368 | ||||||
Resource America, Inc., Class A | 16,500 | 111,540 | ||||||
Safeguard Scientifics, Inc. * | 27,700 | 439,045 | ||||||
Solar Capital Ltd. | 53,700 | 1,224,360 | ||||||
Solar Senior Capital Ltd. | 13,000 | 228,280 | ||||||
Stifel Financial Corp. * | 75,000 | 2,377,500 | ||||||
SWS Group, Inc. * | 39,000 | 221,910 | ||||||
TCP Capital Corp. | 7,900 | 121,107 | ||||||
The First Marblehead Corp. * | 73,900 | 69,466 | ||||||
THL Credit, Inc. | 20,900 | 298,243 | ||||||
TICC Capital Corp. | 62,800 | 651,864 | ||||||
Triangle Capital Corp. (c) | 38,000 | 989,140 | ||||||
Virtus Investment Partners, Inc. * | 8,200 | 787,200 | ||||||
Walter Investment Management Corp. * | 49,600 | 2,397,168 | ||||||
Westwood Holdings Group, Inc. | 9,500 | 368,790 | ||||||
WisdomTree Investments, Inc. * | 80,400 | 515,364 | ||||||
World Acceptance Corp. * | 14,200 | 947,992 | ||||||
54,217,032 | ||||||||
Energy 5.8% | ||||||||
Abraxas Petroleum Corp. (c)* | 110,200 | 228,114 | ||||||
Adams Resources & Energy, Inc. | 2,900 | 88,218 | ||||||
Alon USA Energy, Inc. | 15,200 | 199,576 | ||||||
Amyris, Inc. (c)* | 41,500 | 106,655 | ||||||
Apco Oil & Gas International, Inc. | 12,200 | 155,062 | ||||||
Approach Resources, Inc. * | 46,200 | 1,137,906 | ||||||
Arch Coal, Inc. | 298,100 | 2,372,876 | ||||||
Basic Energy Services, Inc. * | 42,300 | 439,497 | ||||||
Berry Petroleum Co., Class A | 73,000 | 2,811,230 | ||||||
Bill Barrett Corp. * | 66,000 | 1,512,060 | ||||||
Bolt Technology Corp. | 11,800 | 169,920 | ||||||
Bonanza Creek Energy, Inc. * | 13,400 | 331,918 | ||||||
BPZ Resources, Inc. * | 145,300 | 418,464 | ||||||
Bristow Group, Inc. | 49,587 | 2,475,383 | ||||||
C&J Energy Services, Inc. (c)* | 61,200 | 1,186,056 | ||||||
Cal Dive International, Inc. (c)* | 127,800 | 161,028 | ||||||
Callon Petroleum Co. * | 52,400 | 299,728 | ||||||
Carrizo Oil & Gas, Inc. * | 54,300 | 1,456,326 | ||||||
Ceres, Inc. (c)* | 17,700 | 93,279 | ||||||
Clayton Williams Energy, Inc. * | 7,900 | 334,565 | ||||||
Clean Energy Fuels Corp. (c)* | 90,700 | 1,038,515 | ||||||
Cloud Peak Energy, Inc. * | 86,000 | 1,814,600 | ||||||
Comstock Resources, Inc. * | 65,600 | 1,123,072 | ||||||
Contango Oil & Gas Co. * | 17,500 | 860,300 | ||||||
Crimson Exploration, Inc. * | 29,200 | 105,704 | ||||||
Crosstex Energy, Inc. | 57,500 | 786,600 | ||||||
CVR Energy, Inc. * | 22,600 | 830,550 | ||||||
Dawson Geophysical Co. * | 10,600 | 253,234 | ||||||
Delek US Holdings, Inc. | 23,300 | 599,975 | ||||||
Dril-Quip, Inc. * | 55,800 | 3,864,708 | ||||||
Emerald Oil, Inc. * | 8,985 | 48,519 | ||||||
Endeavour International Corp. (c)* | 64,600 | 468,996 | ||||||
Energy XXI (Bermuda) Ltd. | 109,500 | 3,624,450 | ||||||
EPL Oil & Gas, Inc. * | 38,800 | 839,632 | ||||||
Evolution Petroleum Corp. * | 21,500 | 176,300 |
24 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Exterran Holdings, Inc. * | 89,000 | 1,778,220 | ||||||
Forbes Energy Services Ltd. * | 20,200 | 57,772 | ||||||
Forest Oil Corp. * | 161,700 | 1,225,686 | ||||||
Forum Energy Technologies, Inc. * | 30,500 | 680,455 | ||||||
Frontline Ltd. (c)* | 69,000 | 218,730 | ||||||
FX Energy, Inc. * | 75,100 | 362,733 | ||||||
GasLog Ltd. * | 32,300 | 372,742 | ||||||
Gastar Exploration Ltd. * | 77,800 | 87,136 | ||||||
Geospace Technologies Corp. * | 17,400 | 1,126,302 | ||||||
Gevo, Inc. (c)* | 42,300 | 85,446 | ||||||
Global Geophysical Services, Inc. * | 24,300 | 112,266 | ||||||
Goodrich Petroleum Corp. (c)* | 34,700 | 427,851 | ||||||
Green Plains Renewable Energy, Inc. * | 34,200 | 264,366 | ||||||
Gulf Island Fabrication, Inc. | 21,000 | 498,330 | ||||||
GulfMark Offshore, Inc., Class A * | 36,800 | 1,189,376 | ||||||
Gulfport Energy Corp. * | 78,000 | 2,588,040 | ||||||
Halcon Resources Corp. * | 153,021 | 990,046 | ||||||
Hallador Energy Co. | 8,900 | 87,220 | ||||||
Harvest Natural Resources, Inc. * | 51,000 | 445,230 | ||||||
Heckmann Corp. (c)* | 183,700 | 642,950 | ||||||
Helix Energy Solutions Group, Inc. * | 147,100 | 2,543,359 | ||||||
Hercules Offshore, Inc. * | 217,500 | 1,035,300 | ||||||
Hornbeck Offshore Services, Inc. * | 49,645 | 1,719,703 | ||||||
ION Geophysical Corp. * | 187,300 | 1,209,958 | ||||||
Isramco, Inc. * | 1,400 | 141,015 | ||||||
Key Energy Services, Inc. * | 207,300 | 1,355,742 | ||||||
KiOR, Inc., Class A (c)* | 36,200 | 238,920 | ||||||
Knightsbridge Tankers Ltd. | 33,300 | 212,121 | ||||||
Kodiak Oil & Gas Corp. * | 366,300 | 3,384,612 | ||||||
Lufkin Industries, Inc. | 46,890 | 2,344,969 | ||||||
Magnum Hunter Resources Corp. * | 207,900 | 794,178 | ||||||
Matador Resources Co. * | 18,500 | 163,355 | ||||||
Matrix Service Co. * | 35,400 | 371,346 | ||||||
McMoRan Exploration Co. (c)* | 140,200 | 1,672,586 | ||||||
Midstates Petroleum Co, Inc. * | 33,000 | 203,610 | ||||||
Miller Energy Resources, Inc. (c)* | 41,600 | 188,032 | ||||||
Mitcham Industries, Inc. * | 18,500 | 250,675 | ||||||
Natural Gas Services Group, Inc. * | 16,400 | 260,104 | ||||||
Newpark Resources, Inc. * | 126,710 | 860,361 | ||||||
Nordic American Tankers Ltd. (c) | 74,300 | 624,120 | ||||||
Northern Oil & Gas, Inc. * | 87,200 | 1,321,952 | ||||||
Oasis Petroleum, Inc. * | 111,100 | 3,263,007 | ||||||
Overseas Shipholding Group, Inc. (c) | 33,900 | 37,968 | ||||||
Panhandle Oil & Gas, Inc., Class A | 9,400 | 254,552 | ||||||
Parker Drilling Co. * | 165,165 | 715,164 | ||||||
PDC Energy, Inc. * | 41,703 | 1,262,350 | ||||||
Penn Virginia Corp. | 61,178 | 276,524 | ||||||
PetroQuest Energy, Inc. * | 84,900 | 517,890 | ||||||
PHI, Inc. - Non Voting Shares * | 17,500 | 547,575 | ||||||
Pioneer Energy Services Corp. * | 87,600 | 578,160 | ||||||
Quicksilver Resources, Inc. (c)* | 161,200 | 623,844 | ||||||
Renewable Energy Group, Inc. * | 9,600 | 47,328 | ||||||
Rentech, Inc. * | 316,700 | 817,086 | ||||||
Resolute Energy Corp. * | 66,300 | 588,744 | ||||||
REX American Resources Corp. * | 8,200 | 144,402 | ||||||
Rex Energy Corp. * | 58,900 | 779,836 | ||||||
RigNet, Inc. * | 16,900 | 313,833 | ||||||
Rosetta Resources, Inc. * | 73,600 | 3,388,544 | ||||||
Sanchez Energy Corp. * | 15,900 | 287,154 | ||||||
Saratoga Resources, Inc. (c)* | 24,900 | 123,504 | ||||||
Scorpio Tankers, Inc. * | 51,700 | 281,765 | ||||||
SemGroup Corp., Class A * | 58,800 | 2,272,032 | ||||||
Ship Finance International Ltd. (c) | 62,800 | 965,864 | ||||||
Solazyme, Inc. (c)* | 44,900 | 363,690 | ||||||
Stone Energy Corp. * | 67,968 | 1,603,365 | ||||||
Swift Energy Co. * | 60,701 | 1,014,314 | ||||||
Synergy Resources Corp. * | 53,700 | 228,225 | ||||||
T.G.C. Industries, Inc. * | 20,000 | 147,200 | ||||||
Targa Resources Corp. | 41,600 | 2,118,688 | ||||||
Teekay Tankers Ltd., Class A (c) | 86,500 | 297,560 | ||||||
Tesco Corp. * | 40,400 | 355,924 | ||||||
TETRA Technologies, Inc. * | 108,974 | 583,011 | ||||||
Triangle Petroleum Corp. * | 63,800 | 407,682 | ||||||
Union Drilling, Inc. * | 20,300 | 131,747 | ||||||
Uranerz Energy Corp. (c)* | 86,500 | 143,590 | ||||||
Uranium Energy Corp. (c)* | 136,000 | 320,960 | ||||||
VAALCO Energy, Inc. * | 79,400 | 648,698 | ||||||
Vantage Drilling Co. (c)* | 262,900 | 483,736 | ||||||
W&T Offshore, Inc. | 49,000 | 830,550 | ||||||
Warren Resources, Inc. * | 95,700 | 272,745 | ||||||
Western Refining, Inc. | 80,422 | 2,000,095 | ||||||
Westmoreland Coal Co. * | 13,300 | 136,724 | ||||||
Willbros Group, Inc. * | 53,400 | 272,874 | ||||||
ZaZa Energy Corp. (c)* | 34,100 | 49,445 | ||||||
97,047,880 | ||||||||
Food & Staples Retailing 1.1% | ||||||||
Arden Group, Inc., Class A | 1,800 | 177,210 | ||||||
Casey’s General Stores, Inc. | 53,100 | 2,737,305 | ||||||
Harris Teeter Supermarkets, Inc. | 61,200 | 2,291,940 | ||||||
Ingles Markets, Inc., Class A | 16,831 | 272,662 | ||||||
Nash Finch Co. | 16,200 | 311,526 | ||||||
Natural Grocers by Vitamin Cottage, Inc. * | 9,900 | 200,772 | ||||||
PriceSmart, Inc. | 25,000 | 2,074,750 | ||||||
Rite Aid Corp. * | 906,000 | 1,050,960 | ||||||
Roundy’s, Inc. (c) | 25,800 | 135,192 | ||||||
Spartan Stores, Inc. | 30,300 | 435,108 | ||||||
SUPERVALU, Inc. (c) | 291,400 | 906,254 | ||||||
Susser Holdings Corp. * | 15,400 | 553,476 | ||||||
The Andersons, Inc. | 25,300 | 993,784 | ||||||
The Chefs’ Warehouse, Inc. * | 17,000 | 262,480 | ||||||
The Pantry, Inc. * | 34,000 | 451,010 | ||||||
United Natural Foods, Inc. * | 67,882 | 3,614,038 | ||||||
Village Super Market, Inc., Class A | 11,600 | 425,372 | ||||||
Weis Markets, Inc. | 15,800 | 650,328 | ||||||
17,544,167 | ||||||||
Food, Beverage & Tobacco 1.9% | ||||||||
Alico, Inc. | 4,700 | 147,533 | ||||||
Alliance One International, Inc. * | 116,600 | 354,464 | ||||||
Annie’s, Inc. * | 6,900 | 272,550 | ||||||
B&G Foods, Inc. | 73,000 | 2,209,710 | ||||||
Cal-Maine Foods, Inc. | 20,100 | 866,913 | ||||||
Calavo Growers, Inc. | 15,900 | 375,399 | ||||||
Central European Distribution Corp. * | 97,400 | 251,292 |
See financial notes 25
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Chiquita Brands International, Inc. * | 60,802 | 438,382 | ||||||
Coca-Cola Bottling Co. Consolidated | 6,800 | 467,432 | ||||||
Craft Brewers Alliance, Inc. * | 13,900 | 105,362 | ||||||
Darling International, Inc. * | 163,900 | 2,709,267 | ||||||
Diamond Foods, Inc. (c) | 31,900 | 590,788 | ||||||
Dole Food Co., Inc. (c)* | 48,100 | 605,579 | ||||||
Farmer Brothers Co. * | 9,100 | 88,543 | ||||||
Fresh Del Monte Produce, Inc. | 52,300 | 1,316,391 | ||||||
Griffin Land & Nurseries, Inc. | 3,800 | 98,610 | ||||||
Inventure Foods, Inc. * | 17,900 | 106,684 | ||||||
J&J Snack Foods Corp. | 20,300 | 1,162,581 | ||||||
John B. Sanfilippo & Son, Inc. * | 10,900 | 183,338 | ||||||
Lancaster Colony Corp. | 25,700 | 1,870,446 | ||||||
Lifeway Foods, Inc. | 10,100 | 94,536 | ||||||
Limoneira Co. (c) | 11,400 | 256,158 | ||||||
National Beverage Corp. * | 15,001 | 223,065 | ||||||
Omega Protein Corp. * | 25,900 | 168,609 | ||||||
Pilgrim’s Pride Corp. * | 81,849 | 460,810 | ||||||
Post Holdings, Inc. * | 37,900 | 1,195,745 | ||||||
Sanderson Farms, Inc. | 31,500 | 1,426,635 | ||||||
Seneca Foods Corp., Class A * | 12,400 | 354,454 | ||||||
Smart Balance, Inc. * | 83,800 | 997,220 | ||||||
Snyders-Lance, Inc. | 62,300 | 1,578,682 | ||||||
Star Scientific, Inc. (c)* | 200,000 | 606,000 | ||||||
The Boston Beer Co., Inc., Class A (c)* | 11,000 | 1,183,380 | ||||||
The Hain Celestial Group, Inc. * | 51,431 | 2,972,712 | ||||||
Tootsie Roll Industries, Inc. (c) | 32,851 | 875,479 | ||||||
TreeHouse Foods, Inc. * | 50,400 | 2,698,920 | ||||||
Universal Corp. | 31,945 | 1,583,194 | ||||||
Vector Group Ltd. | 76,273 | 1,255,454 | ||||||
Westway Group, Inc. * | 16,700 | 105,377 | ||||||
32,257,694 | ||||||||
Health Care Equipment & Services 6.5% | ||||||||
Abaxis, Inc. * | 30,200 | 1,110,756 | ||||||
ABIOMED, Inc. * | 45,900 | 909,738 | ||||||
Acadia Healthcare Co., Inc. * | 31,600 | 650,012 | ||||||
Accretive Health, Inc. * | 77,300 | 911,367 | ||||||
Accuray, Inc. * | 97,300 | 677,208 | ||||||
Air Methods Corp. * | 18,000 | 1,973,340 | ||||||
Align Technology, Inc. * | 99,800 | 2,652,684 | ||||||
Almost Family, Inc. * | 11,000 | 228,030 | ||||||
Alphatec Holdings, Inc. * | 72,200 | 124,184 | ||||||
Amedisys, Inc. * | 42,200 | 465,888 | ||||||
AMN Healthcare Services, Inc. * | 58,300 | 578,336 | ||||||
AmSurg Corp. * | 43,400 | 1,237,768 | ||||||
Analogic Corp. | 16,854 | 1,241,466 | ||||||
AngioDynamics, Inc. * | 33,500 | 359,455 | ||||||
Anika Therapeutics, Inc. * | 16,200 | 181,602 | ||||||
Antares Pharma, Inc. (c)* | 148,500 | 565,785 | ||||||
ArthroCare Corp. * | 38,000 | 1,143,040 | ||||||
Assisted Living Concepts, Inc., Class A | 26,200 | 207,242 | ||||||
athenahealth, Inc. * | 49,700 | 3,195,213 | ||||||
AtriCure, Inc. * | 18,800 | 120,696 | ||||||
Atrion Corp. | 2,300 | 467,452 | ||||||
Bio-Reference Laboratories, Inc. (c)* | 34,300 | 952,168 | ||||||
BioScrip, Inc. * | 60,300 | 555,363 | ||||||
Cantel Medical Corp. | 29,050 | 755,591 | ||||||
Capital Senior Living Corp. * | 40,400 | 649,632 | ||||||
Cardiovascular Systems, Inc. * | 27,700 | 323,536 | ||||||
Centene Corp. * | 71,792 | 2,726,660 | ||||||
Cerus Corp. * | 72,600 | 225,786 | ||||||
Chemed Corp. | 26,500 | 1,782,125 | ||||||
Chindex International, Inc. * | 15,200 | 157,624 | ||||||
Computer Programs & Systems, Inc. | 15,700 | 766,317 | ||||||
Conceptus, Inc. * | 44,000 | 828,960 | ||||||
CONMED Corp. | 39,400 | 1,089,804 | ||||||
CorVel Corp. * | 8,300 | 352,999 | ||||||
Cross Country Healthcare, Inc. * | 37,200 | 163,680 | ||||||
CryoLife, Inc. | 37,400 | 231,506 | ||||||
Cyberonics, Inc. * | 38,000 | 1,757,500 | ||||||
Cynosure, Inc., Class A * | 12,900 | 339,786 | ||||||
Derma Sciences, Inc. (c)* | 12,700 | 143,383 | ||||||
DexCom, Inc. * | 94,100 | 1,232,710 | ||||||
Emeritus Corp. * | 43,000 | 965,350 | ||||||
Endologix, Inc. * | 76,000 | 1,022,960 | ||||||
EnteroMedics, Inc. * | 34,800 | 104,748 | ||||||
Epocrates, Inc. * | 25,600 | 250,368 | ||||||
Exactech, Inc. * | 11,400 | 190,380 | ||||||
ExamWorks Group, Inc. * | 40,100 | 562,202 | ||||||
Five Star Quality Care, Inc. * | 56,200 | 295,612 | ||||||
Gentiva Health Services, Inc. * | 40,996 | 385,362 | ||||||
Globus Medical, Inc., Class A * | 13,300 | 228,228 | ||||||
Greatbatch, Inc. * | 32,900 | 723,142 | ||||||
Greenway Medical Technologies * | 10,300 | 170,877 | ||||||
Haemonetics Corp. * | 35,100 | 2,867,670 | ||||||
Hanger, Inc. * | 46,800 | 1,186,380 | ||||||
Hansen Medical, Inc. (c)* | 95,500 | 216,785 | ||||||
HealthSouth Corp. * | 133,000 | 2,943,290 | ||||||
HealthStream, Inc. * | 26,800 | 684,472 | ||||||
Healthways, Inc. * | 45,500 | 442,715 | ||||||
HeartWare International, Inc. * | 20,300 | 1,704,794 | ||||||
HMS Holdings Corp. * | 119,200 | 2,752,328 | ||||||
ICU Medical, Inc. * | 17,200 | 1,020,476 | ||||||
Insulet Corp. * | 65,600 | 1,391,376 | ||||||
Integra LifeSciences Holdings Corp. * | 27,048 | 1,034,586 | ||||||
Invacare Corp. | 43,711 | 596,655 | ||||||
IPC The Hospitalist Co., Inc. * | 22,600 | 779,474 | ||||||
IRIS International, Inc. (c)* | 23,800 | 463,862 | ||||||
Kindred Healthcare, Inc. * | 72,175 | 707,315 | ||||||
Landauer, Inc. | 13,300 | 770,735 | ||||||
LHC Group, Inc. * | 21,100 | 369,672 | ||||||
Magellan Health Services, Inc. * | 37,800 | 1,895,670 | ||||||
MAKO Surgical Corp. (c)* | 49,600 | 751,440 | ||||||
Masimo Corp. * | 69,900 | 1,535,703 | ||||||
MedAssets, Inc. * | 80,100 | 1,420,173 | ||||||
Medidata Solutions, Inc. * | 30,500 | 1,281,610 | ||||||
Mediware Information Systems * | 5,400 | 118,476 | ||||||
Merge Healthcare, Inc. (c)* | 80,500 | 274,505 | ||||||
Meridian Bioscience, Inc. | 58,750 | 1,160,312 | ||||||
Merit Medical Systems, Inc. * | 59,000 | 851,960 | ||||||
Metropolitan Health Networks, Inc. * | 65,000 | 710,450 | ||||||
Molina Healthcare, Inc. * | 41,100 | 1,030,377 | ||||||
MWI Veterinary Supply, Inc. * | 17,500 | 1,837,850 | ||||||
National Healthcare Corp. | 15,388 | 732,777 |
26 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
National Research Corp. | 3,500 | 177,380 | ||||||
Natus Medical, Inc. * | 42,800 | 483,640 | ||||||
Navidea Biopharmaceuticals, Inc. (c)* | 136,800 | 383,040 | ||||||
Neogen Corp. * | 32,350 | 1,384,256 | ||||||
NuVasive, Inc. * | 59,300 | 855,106 | ||||||
NxStage Medical, Inc. * | 67,600 | 757,120 | ||||||
Omnicell, Inc. * | 47,300 | 689,634 | ||||||
OraSure Technologies, Inc. * | 75,100 | 680,406 | ||||||
Orthofix International N.V. * | 25,700 | 1,019,262 | ||||||
Owens & Minor, Inc. | 88,700 | 2,525,289 | ||||||
Palomar Medical Technologies, Inc. * | 25,500 | 220,065 | ||||||
PDI, Inc. * | 13,800 | 94,530 | ||||||
PharMerica Corp. * | 43,100 | 526,682 | ||||||
PhotoMedex, Inc. (c)* | 18,000 | 239,580 | ||||||
PSS World Medical, Inc. * | 69,266 | 1,982,393 | ||||||
Quality Systems, Inc. | 54,300 | 947,535 | ||||||
Quidel Corp. * | 38,200 | 669,646 | ||||||
Rochester Medical Corp. * | 14,600 | 153,154 | ||||||
Rockwell Medical, Inc. (c)* | 28,600 | 205,634 | ||||||
RTI Biologics, Inc. * | 73,900 | 300,034 | ||||||
Select Medical Holdings Corp. * | 48,000 | 508,320 | ||||||
Skilled Healthcare Group, Inc., Class A * | 25,900 | 201,243 | ||||||
Solta Medical, Inc. * | 95,100 | 280,545 | ||||||
Spectranetics Corp. * | 48,000 | 698,880 | ||||||
STAAR Surgical Co. * | 52,900 | 340,676 | ||||||
STERIS Corp. | 80,500 | 2,866,605 | ||||||
Sun Healthcare Group, Inc. * | 33,600 | 284,256 | ||||||
Sunrise Senior Living, Inc. * | 81,400 | 1,171,346 | ||||||
SurModics, Inc. * | 20,400 | 366,792 | ||||||
Symmetry Medical, Inc. * | 53,900 | 493,724 | ||||||
Team Health Holdings, Inc. * | 39,000 | 1,037,790 | ||||||
The Ensign Group, Inc. | 23,900 | 696,924 | ||||||
The Providence Service Corp. * | 17,400 | 177,480 | ||||||
Tornier N.V. * | 20,700 | 353,970 | ||||||
Triple-S Management Corp., Class B * | 26,500 | 478,060 | ||||||
U.S. Physical Therapy, Inc. | 15,800 | 421,860 | ||||||
Unilife Corp. (c)* | 115,000 | 315,100 | ||||||
Universal American Corp. * | 51,602 | 466,482 | ||||||
Utah Medical Products, Inc. | 4,500 | 153,090 | ||||||
Vanguard Health Systems, Inc. * | 45,100 | 436,568 | ||||||
Vascular Solutions, Inc. * | 22,700 | 342,089 | ||||||
Vocera Communications, Inc. * | 9,200 | 247,388 | ||||||
Volcano Corp. * | 74,900 | 2,143,638 | ||||||
WellCare Health Plans, Inc. * | 60,000 | 2,856,000 | ||||||
West Pharmaceutical Services, Inc. | 47,365 | 2,551,553 | ||||||
Wright Medical Group, Inc. * | 57,500 | 1,168,400 | ||||||
Young Innovations, Inc. | 7,600 | 259,540 | ||||||
Zeltiq Aesthetics, Inc. * | 23,000 | 133,860 | ||||||
108,216,074 | ||||||||
Household & Personal Products 0.6% | ||||||||
Central Garden & Pet Co., Class A * | 53,000 | 597,310 | ||||||
Elizabeth Arden, Inc. * | 34,598 | 1,632,334 | ||||||
Harbinger Group, Inc. * | 56,600 | 495,250 | ||||||
Inter Parfums, Inc. | 21,600 | 394,416 | ||||||
Medifast, Inc. * | 20,200 | 515,504 | ||||||
Nature’s Sunshine Products, Inc. | 15,000 | 257,850 | ||||||
Nutraceutical International Corp. * | 12,300 | 195,078 | ||||||
Oil-Dri Corp. of America | 6,887 | 154,269 | ||||||
Orchids Paper Products Co. | 7,900 | 151,601 | ||||||
Prestige Brands Holdings, Inc. * | 69,900 | 1,215,561 | ||||||
Revlon, Inc., Class A * | 14,502 | 223,331 | ||||||
Schiff Nutrition International, Inc. * | 18,200 | 615,888 | ||||||
Spectrum Brands Holdings, Inc. * | 31,546 | 1,435,027 | ||||||
Synutra International, Inc. (c)* | 23,200 | 97,208 | ||||||
The Female Health Co. | 24,700 | 172,900 | ||||||
USANA Health Sciences, Inc. (c)* | 9,100 | 392,574 | ||||||
WD-40 Co. | 22,300 | 1,067,278 | ||||||
9,613,379 | ||||||||
Insurance 2.5% | ||||||||
Alterra Capital Holdings Ltd. | 119,400 | 2,916,942 | ||||||
American Equity Investment Life Holding Co. | 83,164 | 957,218 | ||||||
American Safety Insurance Holdings Ltd. * | 14,000 | 236,040 | ||||||
AMERISAFE, Inc. * | 24,600 | 645,750 | ||||||
AmTrust Financial Services, Inc. | 36,525 | 883,905 | ||||||
Argo Group International Holdings Ltd. | 35,138 | 1,208,747 | ||||||
Baldwin & Lyons, Inc., Class B | 13,000 | 316,550 | ||||||
Citizens, Inc. * | 54,800 | 558,412 | ||||||
CNO Financial Group, Inc. | 293,900 | 2,815,562 | ||||||
Crawford & Co., Class B | 34,500 | 190,095 | ||||||
Donegal Group, Inc., Class A | 10,400 | 134,784 | ||||||
Eastern Insurance Holdings, Inc. | 9,100 | 153,062 | ||||||
eHealth, Inc. * | 28,600 | 620,620 | ||||||
EMC Insurance Group, Inc. | 6,200 | 138,756 | ||||||
Employers Holdings, Inc. | 44,900 | 819,425 | ||||||
Enstar Group Ltd. * | 11,594 | 1,159,400 | ||||||
FBL Financial Group, Inc., Class A | 13,868 | 473,315 | ||||||
First American Financial Corp. | 147,800 | 3,362,450 | ||||||
Flagstone Reinsurance Holdings S.A. | 76,029 | 672,096 | ||||||
Fortegra Financial Corp. * | 8,200 | 72,816 | ||||||
Global Indemnity plc * | 15,655 | 347,228 | ||||||
Greenlight Capital Re Ltd., Class A * | 39,189 | 1,001,279 | ||||||
Hallmark Financial Services, Inc. * | 21,200 | 161,756 | ||||||
Hilltop Holdings, Inc. * | 53,339 | 724,877 | ||||||
Homeowners Choice, Inc. | 9,900 | 219,780 | ||||||
Horace Mann Educators Corp. | 55,678 | 1,069,574 | ||||||
Independence Holding Co. | 11,248 | 98,308 | ||||||
Infinity Property & Casualty Corp. | 16,592 | 947,569 | ||||||
Investors Title Co. | 1,700 | 111,520 | ||||||
Kansas City Life Insurance Co. (c) | 5,700 | 207,138 | ||||||
Maiden Holdings Ltd. | 67,700 | 572,065 | ||||||
Meadowbrook Insurance Group, Inc. | 71,400 | 401,268 | ||||||
Montpelier Re Holdings Ltd. | 68,800 | 1,573,456 | ||||||
National Financial Partners Corp. * | 56,800 | 1,042,280 | ||||||
National Interstate Corp. | 8,594 | 223,014 | ||||||
National Western Life Insurance Co., Class A | 2,994 | 420,268 | ||||||
OneBeacon Insurance Group Ltd., Class A | 33,400 | 450,900 |
See financial notes 27
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Platinum Underwriters Holdings Ltd. | 49,000 | 2,175,600 | ||||||
Presidential Life Corp. | 29,000 | 405,420 | ||||||
Primerica, Inc. | 64,600 | 1,825,596 | ||||||
RLI Corp. | 29,155 | 1,987,788 | ||||||
Safety Insurance Group, Inc. | 17,770 | 823,639 | ||||||
Seabright Holdings, Inc. | 26,800 | 293,996 | ||||||
Selective Insurance Group, Inc. | 75,214 | 1,390,707 | ||||||
State Auto Financial Corp. | 19,600 | 316,344 | ||||||
Stewart Information Services Corp. | 24,400 | 569,008 | ||||||
Symetra Financial Corp. | 106,300 | 1,270,285 | ||||||
The Navigators Group, Inc. * | 13,685 | 726,400 | ||||||
The Phoenix Cos., Inc. * | 7,790 | 234,791 | ||||||
Tower Group, Inc. | 49,365 | 889,557 | ||||||
United Fire Group, Inc. | 28,800 | 684,576 | ||||||
Universal Insurance Holdings, Inc. | 25,100 | 99,145 | ||||||
41,601,077 | ||||||||
Materials 5.0% | ||||||||
A. M. Castle & Co. * | 22,400 | 272,160 | ||||||
A. Schulman, Inc. | 41,309 | 1,059,989 | ||||||
ADA-ES, Inc. * | 12,400 | 241,676 | ||||||
AEP Industries, Inc. * | 5,800 | 370,794 | ||||||
AK Steel Holding Corp. (c) | 151,800 | 765,072 | ||||||
AMCOL International Corp. | 34,652 | 1,094,310 | ||||||
American Vanguard Corp. | 38,200 | 1,364,886 | ||||||
Arabian American Development Co. * | 27,400 | 233,996 | ||||||
Balchem Corp. | 40,200 | 1,400,166 | ||||||
Boise, Inc. | 138,000 | 1,157,820 | ||||||
Buckeye Technologies, Inc. | 54,700 | 1,433,140 | ||||||
Calgon Carbon Corp. * | 77,700 | 962,703 | ||||||
Century Aluminum Co. * | 69,100 | 494,065 | ||||||
Chase Corp. | 8,600 | 158,498 | ||||||
Chemtura Corp. * | 138,400 | 2,204,712 | ||||||
Clearwater Paper Corp. * | 33,200 | 1,312,728 | ||||||
Coeur d’Alene Mines Corp. * | 125,350 | 3,874,569 | ||||||
Deltic Timber Corp. | 15,204 | 1,031,743 | ||||||
Eagle Materials, Inc. | 67,890 | 3,596,133 | ||||||
Ferro Corp. * | 115,900 | 304,817 | ||||||
Flotek Industries, Inc. * | 70,900 | 787,699 | ||||||
FutureFuel Corp. | 25,000 | 294,750 | ||||||
General Moly, Inc. * | 90,300 | 334,110 | ||||||
Georgia Gulf Corp. | 48,100 | 1,702,259 | ||||||
Globe Specialty Metals, Inc. | 84,400 | 1,268,532 | ||||||
Gold Reserve, Inc. (c)* | 71,800 | 232,632 | ||||||
Gold Resource Corp. (c) | 41,000 | 685,520 | ||||||
Golden Minerals Co. (c)* | 59,200 | 258,704 | ||||||
Golden Star Resources Ltd. (c)* | 346,300 | 692,600 | ||||||
Graphic Packaging Holding Co. * | 229,915 | 1,361,097 | ||||||
GSE Holding, Inc. * | 10,800 | 85,968 | ||||||
H.B. Fuller Co. | 70,116 | 2,131,526 | ||||||
Handy & Harman Ltd. * | 7,800 | 115,986 | ||||||
Hawkins, Inc. | 12,400 | 484,840 | ||||||
Haynes International, Inc. | 17,125 | 867,895 | ||||||
Headwaters, Inc. * | 88,600 | 637,034 | ||||||
Hecla Mining Co. | 401,200 | 2,639,896 | ||||||
Horsehead Holding Corp. * | 63,600 | 575,580 | ||||||
Innophos Holdings, Inc. | 29,900 | 1,424,735 | ||||||
Innospec, Inc. * | 31,800 | 1,029,684 | ||||||
Kaiser Aluminum Corp. | 27,250 | 1,650,805 | ||||||
KapStone Paper & Packaging Corp. * | 55,500 | 1,219,335 | ||||||
KMG Chemicals, Inc. | 12,300 | 210,084 | ||||||
Koppers Holdings, Inc. | 28,900 | 1,031,730 | ||||||
Kraton Performance Polymers, Inc. * | 44,000 | 960,080 | ||||||
Landec Corp. * | 35,300 | 381,946 | ||||||
Louisiana-Pacific Corp. * | 191,900 | 3,030,101 | ||||||
LSB Industries, Inc. * | 25,600 | 1,030,912 | ||||||
Materion Corp. | 29,600 | 620,120 | ||||||
McEwen Mining, Inc. * | 270,700 | 1,315,602 | ||||||
Metals USA Holdings Corp. * | 15,500 | 225,990 | ||||||
Midway Gold Corp. (c)* | 186,800 | 317,560 | ||||||
Minerals Technologies, Inc. | 24,461 | 1,752,875 | ||||||
Myers Industries, Inc. | 46,000 | 682,180 | ||||||
Neenah Paper, Inc. | 21,300 | 551,670 | ||||||
Noranda Aluminum Holding Corp. | 45,700 | 280,141 | ||||||
Olin Corp. | 112,300 | 2,329,102 | ||||||
Olympic Steel, Inc. | 12,200 | 219,600 | ||||||
OM Group, Inc. * | 44,500 | 900,235 | ||||||
Omnova Solutions, Inc. * | 65,700 | 515,088 | ||||||
P.H. Glatfelter Co. | 58,700 | 1,045,447 | ||||||
Paramount Gold & Silver Corp. (c)* | 179,300 | 476,938 | ||||||
PolyOne Corp. | 125,075 | 2,367,670 | ||||||
Quaker Chemical Corp. | 18,100 | 959,119 | ||||||
Resolute Forest Products (c)* | 111,200 | 1,356,640 | ||||||
Revett Minerals, Inc. * | 33,600 | 120,288 | ||||||
RTI International Metals, Inc. * | 42,166 | 960,963 | ||||||
Schnitzer Steel Industries, Inc., Class A | 34,700 | 989,297 | ||||||
Schweitzer-Mauduit International, Inc. | 43,200 | 1,513,296 | ||||||
Sensient Technologies Corp. | 69,625 | 2,532,958 | ||||||
Spartech Corp. * | 41,300 | 353,528 | ||||||
Stepan Co. | 11,500 | 1,101,700 | ||||||
Stillwater Mining Co. * | 158,900 | 1,654,149 | ||||||
SunCoke Energy, Inc. * | 97,100 | 1,560,397 | ||||||
Texas Industries, Inc. (c)* | 31,551 | 1,360,795 | ||||||
TPC Group, Inc. * | 17,800 | 800,644 | ||||||
Tredegar Corp. | 35,100 | 595,647 | ||||||
UFP Technologies, Inc. * | 7,500 | 124,500 | ||||||
United States Lime & Minerals, Inc. * | 2,700 | 118,287 | ||||||
Universal Stainless & Alloy Products, Inc. * | 9,500 | 326,800 | ||||||
US Antimony Corp. (c)* | 73,800 | 150,552 | ||||||
US Silica Holdings, Inc. (c)* | 15,800 | 202,240 | ||||||
Vista Gold Corp. (c)* | 79,400 | 264,402 | ||||||
Wausau Paper Corp. | 60,100 | 497,027 | ||||||
Worthington Industries, Inc. | 71,760 | 1,551,451 | ||||||
Zep, Inc. | 32,600 | 467,158 | ||||||
Zoltek Cos., Inc. * | 37,200 | 254,820 | ||||||
83,876,893 | ||||||||
Media 1.2% | ||||||||
Arbitron, Inc. | 36,356 | 1,321,904 | ||||||
Beasley Broadcasting Group, Inc., Class A * | 13,100 | 63,666 | ||||||
Belo Corp., Class A | 129,700 | 970,156 | ||||||
Carmike Cinemas, Inc. * | 24,300 | 330,966 |
28 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Central European Media Enterprises Ltd., Class A (c)* | 49,100 | 263,176 | ||||||
Crown Media Holdings, Inc., Class A (c)* | 46,700 | 81,258 | ||||||
Cumulus Media, Inc., Class A * | 77,100 | 189,666 | ||||||
Daily Journal Corp. (c)* | 1,300 | 122,876 | ||||||
Dial Global, Inc. (c)* | 24,300 | 59,292 | ||||||
Digital Generation, Inc. * | 36,700 | 341,310 | ||||||
Entercom Communications Corp., Class A * | 32,400 | 210,924 | ||||||
Entravision Communications Corp., Class A | 67,300 | 90,855 | ||||||
Fisher Communications, Inc. | 11,800 | 297,832 | ||||||
Global Sources Ltd. * | 25,900 | 148,148 | ||||||
Harte-Hanks, Inc. | 61,316 | 341,530 | ||||||
Journal Communications, Inc., Class A * | 57,900 | 324,819 | ||||||
LIN TV Corp., Class A * | 39,700 | 222,717 | ||||||
Lions Gate Entertainment Corp. * | 116,400 | 1,941,552 | ||||||
Live Nation Entertainment, Inc. * | 194,200 | 1,776,930 | ||||||
Martha Stewart Living Omnimedia, Inc., Class A | 36,500 | 105,485 | ||||||
MDC Partners, Inc., Class A | 33,600 | 380,016 | ||||||
Meredith Corp. (c) | 50,600 | 1,693,582 | ||||||
National CineMedia, Inc. | 77,000 | 1,190,420 | ||||||
Nexstar Broadcasting Group, Inc., Class A * | 14,700 | 159,789 | ||||||
Outdoor Channel Holdings, Inc. | 19,200 | 139,392 | ||||||
ReachLocal, Inc. * | 13,400 | 165,356 | ||||||
Reading International, Inc., Class A * | 23,000 | 139,150 | ||||||
Rentrak Corp. * | 12,700 | 215,773 | ||||||
Saga Communications, Inc., Class A * | 4,800 | 203,616 | ||||||
Salem Communications Corp., Class A | 14,100 | 84,036 | ||||||
Scholastic Corp. | 35,569 | 1,173,422 | ||||||
Sinclair Broadcast Group, Inc., Class A | 71,000 | 894,600 | ||||||
The E.W. Scripps Co., Class A * | 44,100 | 467,901 | ||||||
The McClatchy Co., Class A (c)* | 77,300 | 220,305 | ||||||
The New York Times Co., Class A * | 188,900 | 1,545,202 | ||||||
Valassis Communications, Inc. * | 59,600 | 1,550,792 | ||||||
Value Line, Inc. | 4,100 | 40,836 | ||||||
World Wrestling Entertainment, Inc., Class A | 36,500 | 295,285 | ||||||
19,764,535 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.7% | ||||||||
Achillion Pharmaceuticals, Inc. * | 82,600 | 779,744 | ||||||
Acorda Therapeutics, Inc. * | 55,000 | 1,317,250 | ||||||
Acura Pharmaceuticals, Inc. (c)* | 43,800 | 66,138 | ||||||
Aegerion Pharmaceuticals, Inc. * | 33,200 | 746,336 | ||||||
Affymax, Inc. * | 50,100 | 1,141,779 | ||||||
Affymetrix, Inc. * | 94,400 | 299,248 | ||||||
Agenus, Inc. * | 31,300 | 139,911 | ||||||
Akorn, Inc. * | 78,100 | 937,981 | ||||||
Alkermes plc * | 170,242 | 3,154,584 | ||||||
Alnylam Pharmaceuticals, Inc. * | 63,600 | 1,028,412 | ||||||
AMAG Pharmaceuticals, Inc. * | 28,300 | 438,084 | ||||||
Amicus Therapeutics, Inc. * | 41,400 | 209,898 | ||||||
Ampio Pharmaceuticals, Inc. (c)* | 41,300 | 165,200 | ||||||
Anacor Pharmaceuticals, Inc. * | 21,300 | 122,475 | ||||||
Arena Pharmaceuticals, Inc. (c)* | 301,000 | 2,380,910 | ||||||
ArQule, Inc. * | 83,300 | 209,083 | ||||||
Array BioPharma, Inc. * | 122,400 | 506,736 | ||||||
Astex Pharmaceuticals * | 127,800 | 304,164 | ||||||
Auxilium Pharmaceuticals, Inc. * | 66,400 | 1,359,872 | ||||||
AVANIR Pharmaceuticals, Inc., Class A (c)* | 190,900 | 545,974 | ||||||
AVEO Pharmaceuticals, Inc. * | 53,400 | 407,442 | ||||||
BG Medicine, Inc. (c)* | 11,800 | 27,140 | ||||||
BioCryst Pharmaceuticals, Inc. * | 67,500 | 196,425 | ||||||
BioDelivery Sciences International, Inc. * | 29,200 | 149,212 | ||||||
Biospecifics Technologies Corp. * | 6,600 | 105,600 | ||||||
Biotime, Inc. (c)* | 51,000 | 194,310 | ||||||
Cadence Pharmaceuticals, Inc. (c)* | 82,600 | 292,404 | ||||||
Cambrex Corp. * | 43,300 | 523,064 | ||||||
Celldex Therapeutics, Inc. * | 86,700 | 477,717 | ||||||
Cempra, Inc. * | 11,200 | 75,152 | ||||||
Cepheid, Inc. * | 91,300 | 2,767,303 | ||||||
ChemoCentryx, Inc. * | 9,300 | 104,997 | ||||||
Clovis Oncology, Inc. (c)* | 18,800 | 405,516 | ||||||
Codexis, Inc. * | 32,900 | 85,540 | ||||||
Corcept Therapeutics, Inc. * | 68,400 | 171,000 | ||||||
Cornerstone Therapeutics, Inc. * | 10,800 | 52,812 | ||||||
Coronado Biosciences, Inc. * | 25,700 | 136,210 | ||||||
Cubist Pharmaceuticals, Inc. * | 87,932 | 3,772,283 | ||||||
Cumberland Pharmaceuticals, Inc. * | 16,300 | 95,681 | ||||||
Curis, Inc. * | 107,800 | 410,718 | ||||||
Cytori Therapeutics, Inc. (c)* | 78,000 | 287,820 | ||||||
Dendreon Corp. (c)* | 211,400 | 803,320 | ||||||
DepoMed, Inc. * | 79,800 | 450,870 | ||||||
Discovery Laboratories, Inc. (c)* | 59,500 | 143,395 | ||||||
Durata Therapeutics, Inc. * | 13,000 | 103,480 | ||||||
DUSA Pharmaceuticals, Inc. * | 32,700 | 224,322 | ||||||
Dyax Corp. * | 132,200 | 396,600 | ||||||
Dynavax Technologies Corp. * | 245,200 | 1,015,128 | ||||||
Emergent Biosolutions, Inc. * | 35,500 | 471,795 | ||||||
Endocyte, Inc. * | 40,600 | 388,542 | ||||||
Enzon Pharmaceuticals, Inc. * | 58,000 | 381,060 | ||||||
Exact Sciences Corp. * | 88,400 | 836,264 | ||||||
Exelixis, Inc. (c)* | 254,472 | 1,208,742 | ||||||
Fluidigm Corp. * | 33,700 | 508,533 | ||||||
Furiex Pharmaceuticals, Inc. * | 10,000 | 191,700 | ||||||
Genomic Health, Inc. * | 22,800 | 712,500 | ||||||
Geron Corp. * | 195,900 | 260,547 | ||||||
GTx, Inc. * | 40,400 | 162,004 | ||||||
Halozyme Therapeutics, Inc. * | 123,200 | 651,728 | ||||||
Harvard Bioscience, Inc. * | 30,800 | 123,816 | ||||||
Hi-Tech Pharmacal Co., Inc. * | 15,100 | 473,385 | ||||||
Horizon Pharma, Inc. (c)* | 49,200 | 126,936 | ||||||
Hyperion Therapeutics, Inc. * | 2,000 | 22,180 | ||||||
Idenix Pharmaceuticals, Inc. * | 125,100 | 445,356 | ||||||
ImmunoCellular Therapeutics Ltd. * | 54,700 | 97,913 | ||||||
ImmunoGen, Inc. * | 114,500 | 1,268,660 | ||||||
Immunomedics, Inc. * | 88,100 | 291,611 | ||||||
Impax Laboratories, Inc. * | 94,000 | 1,997,500 | ||||||
Infinity Pharmaceuticals, Inc. * | 33,500 | 750,065 |
See financial notes 29
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
InterMune, Inc. * | 89,800 | 713,910 | ||||||
Ironwood Pharmaceuticals, Inc. * | 103,200 | 1,200,216 | ||||||
Isis Pharmaceuticals, Inc. * | 137,500 | 1,189,375 | ||||||
Jazz Pharmaceuticals plc * | 57,900 | 3,110,967 | ||||||
Keryx Biopharmaceuticals, Inc. (c)* | 92,500 | 230,325 | ||||||
Lannett Co., Inc. * | 21,700 | 95,697 | ||||||
Lexicon Pharmaceuticals, Inc. * | 272,500 | 564,075 | ||||||
Ligand Pharmaceuticals, Inc., Class B * | 23,700 | 365,454 | ||||||
Luminex Corp. * | 57,200 | 919,776 | ||||||
MannKind Corp. (c)* | 154,800 | 292,572 | ||||||
MAP Pharmaceuticals, Inc. * | 39,000 | 601,380 | ||||||
Maxygen, Inc. | 40,500 | 98,820 | ||||||
Medicis Pharmaceutical Corp., Class A | 80,149 | 3,479,268 | ||||||
Merrimack Pharmaceuticals, Inc. (c)* | 20,900 | 129,162 | ||||||
Momenta Pharmaceuticals, Inc. * | 64,244 | 814,614 | ||||||
Nektar Therapeutics * | 162,271 | 1,460,439 | ||||||
Neurocrine Biosciences, Inc. * | 91,000 | 667,030 | ||||||
NewLink Genetics Corp. (c)* | 17,400 | 239,946 | ||||||
Novavax, Inc. (c)* | 159,100 | 334,110 | ||||||
NPS Pharmaceuticals, Inc. * | 120,400 | 1,112,496 | ||||||
Obagi Medical Products, Inc. * | 24,800 | 305,784 | ||||||
Omeros Corp. * | 35,800 | 336,520 | ||||||
OncoGenex Pharmaceutical, Inc. * | 19,500 | 241,800 | ||||||
Oncothyreon, Inc. (c)* | 76,700 | 389,636 | ||||||
Opko Health, Inc. (c)* | 145,900 | 624,452 | ||||||
Optimer Pharmaceuticals, Inc. (c)* | 67,200 | 641,088 | ||||||
Orexigen Therapeutics, Inc. (c)* | 82,800 | 441,324 | ||||||
Osiris Therapeutics, Inc. * | 22,300 | 234,150 | ||||||
Pacific Biosciences of California, Inc. * | 45,400 | 59,020 | ||||||
Pacira Pharmaceuticals, Inc. * | 25,300 | 401,764 | ||||||
Pain Therapeutics, Inc. * | 49,400 | 230,698 | ||||||
PAREXEL International Corp. * | 84,018 | 2,578,513 | ||||||
PDL Biopharma, Inc. | 197,500 | 1,471,375 | ||||||
Pernix Therapeutics Holdings * | 9,800 | 77,224 | ||||||
Pharmacyclics, Inc. * | 75,400 | 4,604,678 | ||||||
POZEN, Inc. * | 35,400 | 212,046 | ||||||
Progenics Pharmaceuticals, Inc. * | 39,300 | 112,005 | ||||||
Questcor Pharmaceuticals, Inc. (c) | 74,800 | 1,905,904 | ||||||
Raptor Pharmaceutical Corp. (c)* | 73,100 | 339,915 | ||||||
Repligen Corp. * | 42,300 | 215,730 | ||||||
Repros Therapeutics, Inc. * | 20,300 | 292,726 | ||||||
Rigel Pharmaceuticals, Inc. * | 118,400 | 1,054,944 | ||||||
Sagent Pharmaceuticals, Inc. * | 12,900 | 194,532 | ||||||
Sangamo BioSciences, Inc. (c)* | 70,100 | 389,756 | ||||||
Santarus, Inc. * | 77,800 | 710,314 | ||||||
SciClone Pharmaceuticals, Inc. * | 78,000 | 429,780 | ||||||
Seattle Genetics, Inc. * | 131,798 | 3,316,038 | ||||||
Sequenom, Inc. (c)* | 166,100 | 516,571 | ||||||
SIGA Technologies, Inc. (c)* | 46,100 | 133,690 | ||||||
Spectrum Pharmaceuticals, Inc. (c)* | 81,700 | 911,772 | ||||||
Sucampo Pharmaceuticals, Inc., Class A * | 17,000 | 84,830 | ||||||
Sunesis Pharmaceuticals, Inc. (c)* | 38,100 | 164,211 | ||||||
Supernus Pharmaceuticals, Inc. (c)* | 10,600 | 121,582 | ||||||
Synageva BioPharma Corp. * | 14,300 | 604,604 | ||||||
Synergy Pharmaceuticals, Inc. (c)* | 56,400 | 223,344 | ||||||
Synta Pharmaceuticals Corp. (c)* | 51,000 | 401,370 | ||||||
Targacept, Inc. * | 37,100 | 151,368 | ||||||
TESARO, Inc. * | 6,000 | 97,560 | ||||||
The Medicines Co. * | 75,708 | 1,659,519 | ||||||
Theravance, Inc. * | 85,038 | 1,914,205 | ||||||
Threshold Pharmaceuticals, Inc. (c)* | 61,700 | 253,587 | ||||||
Transcept Pharmaceuticals, Inc. * | 17,300 | 88,057 | ||||||
Trius Therapeutics, Inc. * | 31,300 | 171,524 | ||||||
Vanda Pharmaceuticals, Inc. * | 37,600 | 127,464 | ||||||
Ventrus Biosciences, Inc. * | 17,100 | 53,694 | ||||||
Verastem, Inc. (c)* | 11,700 | 92,898 | ||||||
Vical, Inc. * | 113,400 | 386,694 | ||||||
ViroPharma, Inc. * | 96,674 | 2,441,019 | ||||||
VIVUS, Inc. (c)* | 138,900 | 2,069,610 | ||||||
Xenoport, Inc. * | 59,600 | 490,508 | ||||||
XOMA Corp. (c)* | 93,500 | 256,190 | ||||||
ZIOPHARM Oncology, Inc. (c)* | 89,200 | 420,132 | ||||||
Zogenix, Inc. * | 75,600 | 184,464 | ||||||
94,551,892 | ||||||||
Real Estate 8.0% | ||||||||
Acadia Realty Trust | 64,036 | 1,644,445 | ||||||
AG Mortgage Investment Trust, Inc. | 31,500 | 754,425 | ||||||
Agree Realty Corp. | 15,200 | 383,648 | ||||||
Alexander’s, Inc. | 2,900 | 1,287,484 | ||||||
American Assets Trust, Inc. | 45,400 | 1,233,518 | ||||||
American Capital Mortgage Investment Corp. | 49,800 | 1,241,514 | ||||||
American Realty Capital Trust, Inc. | 221,200 | 2,492,924 | ||||||
AmREIT, Inc., Class B | 4,000 | 65,160 | ||||||
Anworth Mortgage Asset Corp. | 188,300 | 1,156,162 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 32,500 | 549,575 | ||||||
Apollo Residential Mortgage, Inc. | 33,000 | 731,610 | ||||||
Ares Commercial Real Estate Corp. | 10,600 | 178,928 | ||||||
ARMOUR Residential REIT, Inc. | 413,000 | 2,973,600 | ||||||
Ashford Hospitality Trust | 74,800 | 642,532 | ||||||
Associated Estates Rlty Corp | 67,900 | 1,017,821 | ||||||
AV Homes, Inc. * | 15,600 | 229,320 | ||||||
Campus Crest Communities, Inc. | 53,500 | 593,315 | ||||||
CapLease, Inc. | 91,200 | 467,856 | ||||||
Capstead Mortgage Corp. | 137,000 | 1,687,840 | ||||||
Cedar Realty Trust, Inc. | 81,800 | 432,722 | ||||||
Chatham Lodging Trust | 18,500 | 239,575 | ||||||
Chesapeake Lodging Trust | 55,000 | 1,036,750 | ||||||
Colonial Properties Trust | 122,600 | 2,651,838 | ||||||
Colony Financial, Inc. | 57,300 | 1,146,573 | ||||||
Consolidated-Tomoka Land Co. | 5,600 | 183,792 | ||||||
Coresite Realty Corp. | 28,200 | 640,986 | ||||||
Cousins Properties, Inc. | 127,173 | 1,069,525 | ||||||
CreXus Investment Corp. | 91,900 | 1,033,875 | ||||||
CubeSmart | 173,000 | 2,269,760 | ||||||
CYS Investments, Inc. | 242,900 | 3,259,718 | ||||||
DCT Industrial Trust, Inc. | 346,900 | 2,237,505 | ||||||
DiamondRock Hospitality Co. | 262,017 | 2,221,904 | ||||||
DuPont Fabros Technology, Inc. | 86,000 | 1,845,560 | ||||||
Dynex Capital, Inc. | 76,500 | 758,880 | ||||||
EastGroup Properties, Inc. | 39,990 | 2,081,879 |
30 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Education Realty Trust, Inc. | 156,900 | 1,652,157 | ||||||
Entertainment Properties Trust | 65,200 | 2,898,140 | ||||||
Equity One, Inc. | 75,337 | 1,574,543 | ||||||
Excel Trust, Inc. | 46,200 | 568,260 | ||||||
FelCor Lodging Trust, Inc. * | 170,200 | 748,880 | ||||||
First Industrial Realty Trust, Inc. * | 136,600 | 1,823,610 | ||||||
First Potomac Realty Trust | 73,300 | 873,003 | ||||||
Forestar Group, Inc. * | 47,400 | 758,874 | ||||||
Franklin Street Properties Corp. | 99,465 | 1,134,896 | ||||||
Getty Realty Corp. | 34,542 | 632,464 | ||||||
Gladstone Commercial Corp. (c) | 14,700 | 270,921 | ||||||
Glimcher Realty Trust | 198,900 | 2,122,263 | ||||||
Government Properties Income Trust (c) | 59,700 | 1,324,743 | ||||||
Gramercy Capital Corp. * | 63,000 | 183,330 | ||||||
Gyrodyne Co of America, Inc. * | 1,600 | 170,848 | ||||||
Healthcare Realty Trust, Inc. | 121,081 | 2,844,193 | ||||||
Hersha Hospitality Trust | 236,100 | 1,078,977 | ||||||
Highwoods Properties, Inc. | 102,800 | 3,315,300 | ||||||
Hudson Pacific Properties, Inc. | 49,200 | 933,324 | ||||||
Inland Real Estate Corp. | 109,036 | 890,824 | ||||||
Invesco Mortgage Capital, Inc. | 160,500 | 3,439,515 | ||||||
Investors Real Estate Trust | 126,200 | 1,062,604 | ||||||
iStar Financial, Inc. * | 115,100 | 1,004,823 | ||||||
Kennedy-Wilson Holdings, Inc. | 59,200 | 840,640 | ||||||
Kite Realty Group Trust | 91,000 | 497,770 | ||||||
LaSalle Hotel Properties | 119,026 | 2,849,482 | ||||||
Lexington Realty Trust | 183,484 | 1,741,263 | ||||||
LTC Properties, Inc. | 42,967 | 1,418,341 | ||||||
Medical Properties Trust, Inc. | 186,100 | 2,136,428 | ||||||
Mission West Properties, Inc. | 23,700 | 196,236 | ||||||
Monmouth Real Estate Investment Corp., Class A | 54,900 | 609,390 | ||||||
National Health Investors, Inc. | 33,568 | 1,792,867 | ||||||
New York Mortgage Trust, Inc. | 68,800 | 471,280 | ||||||
NorthStar Realty Finance Corp. | 186,300 | 1,223,991 | ||||||
Omega Healthcare Investors, Inc. | 147,000 | 3,372,180 | ||||||
One Liberty Properties, Inc. | 14,900 | 281,461 | ||||||
Parkway Properties, Inc. | 21,800 | 300,186 | ||||||
Pebblebrook Hotel Trust | 78,800 | 1,672,136 | ||||||
Pennsylvania Real Estate Investment Trust | 76,312 | 1,261,437 | ||||||
PennyMac Mortgage Investment Trust | 81,800 | 2,080,992 | ||||||
Potlatch Corp. | 55,403 | 2,131,907 | ||||||
PS Business Parks, Inc. | 25,538 | 1,637,752 | ||||||
RAIT Financial Trust (c) | 66,800 | 372,744 | ||||||
Ramco-Gershenson Properties Trust | 64,800 | 839,808 | ||||||
Redwood Trust, Inc. | 108,500 | 1,691,515 | ||||||
Resource Capital Corp. | 138,300 | 810,438 | ||||||
Retail Opportunity Investments Corp. (c) | 69,800 | 883,668 | ||||||
RLJ Lodging Trust | 148,800 | 2,651,616 | ||||||
Rouse Properties, Inc. (c) | 30,400 | 457,824 | ||||||
Sabra Health Care REIT, Inc. | 51,866 | 1,152,463 | ||||||
Saul Centers, Inc. | 10,800 | 467,316 | ||||||
Select Income REIT | 12,600 | 311,346 | ||||||
Sovran Self Storage, Inc. | 40,726 | 2,353,963 | ||||||
STAG Industrial, Inc. | 43,200 | 748,224 | ||||||
Starwood Property Trust, Inc. | 187,900 | 4,306,668 | ||||||
Strategic Hotels & Resorts, Inc. * | 252,400 | 1,385,676 | ||||||
Summit Hotel Properties, Inc. | 59,100 | 488,166 | ||||||
Sun Communities, Inc. | 41,300 | 1,733,774 | ||||||
Sunstone Hotel Investors, Inc. * | 192,410 | 1,901,011 | ||||||
Tejon Ranch Co. * | 19,092 | 571,614 | ||||||
Terreno Realty Corp. | 17,900 | 273,154 | ||||||
Thomas Properties Group, Inc. | 44,200 | 236,028 | ||||||
Two Harbors Investment Corp. | 387,300 | 4,620,489 | ||||||
UMH Properties, Inc. | 19,000 | 199,690 | ||||||
Universal Health Realty Income Trust | 16,900 | 835,536 | ||||||
Urstadt Biddle Properties, Inc., Class A | 30,900 | 585,246 | ||||||
Washington Real Estate Investment Trust | 92,600 | 2,380,746 | ||||||
Western Asset Mortgage Capital Corp. | 25,900 | 555,555 | ||||||
Whitestone REIT, Class B | 19,200 | 258,624 | ||||||
Winthrop Realty Trust | 42,800 | 468,232 | ||||||
Zillow, Inc. * | 7,000 | 261,520 | ||||||
134,067,404 | ||||||||
Retailing 4.3% | ||||||||
1-800-FLOWERS.COM, Inc., Class A * | 34,800 | 126,324 | ||||||
Aeropostale, Inc. * | 111,600 | 1,333,620 | ||||||
America’s Car-Mart, Inc. * | 11,500 | 481,390 | ||||||
ANN, Inc. * | 67,700 | 2,380,332 | ||||||
Asbury Automotive Group, Inc. * | 39,100 | 1,240,252 | ||||||
Barnes & Noble, Inc. (c)* | 38,900 | 655,076 | ||||||
Bebe Stores, Inc. | 51,449 | 208,368 | ||||||
Big 5 Sporting Goods Corp. | 22,600 | 201,818 | ||||||
Blue Nile, Inc. (c)* | 19,000 | 717,630 | ||||||
Body Central Corp. * | 22,200 | 221,778 | ||||||
Brown Shoe Co., Inc. | 59,375 | 936,938 | ||||||
Cabela’s, Inc. * | 64,936 | 2,909,782 | ||||||
CafePress, Inc. * | 6,300 | 37,359 | ||||||
Casual Male Retail Group, Inc. * | 56,400 | 217,704 | ||||||
Citi Trends, Inc. * | 20,100 | 246,828 | ||||||
Conn’s, Inc. * | 21,600 | 547,128 | ||||||
Core-Mark Holding Co., Inc. | 16,200 | 775,494 | ||||||
Destination Maternity Corp. | 18,400 | 348,864 | ||||||
Express, Inc. * | 125,700 | 1,399,041 | ||||||
Five Below, Inc. * | 15,400 | 510,356 | ||||||
Francesca’s Holdings Corp. * | 47,800 | 1,411,534 | ||||||
Fred’s, Inc., Class A | 52,800 | 715,440 | ||||||
Geeknet, Inc. * | 5,900 | 107,203 | ||||||
Genesco, Inc. * | 34,344 | 1,967,911 | ||||||
Gordmans Stores, Inc. * | 11,600 | 174,696 | ||||||
Group 1 Automotive, Inc. | 31,500 | 1,953,315 | ||||||
Haverty Furniture Cos, Inc. | 25,200 | 378,252 | ||||||
hhgregg, Inc. (c)* | 27,700 | 167,308 | ||||||
Hibbett Sports, Inc. * | 36,675 | 1,980,083 | ||||||
Hot Topic, Inc. | 59,000 | 507,400 | ||||||
HSN, Inc. | 52,600 | 2,736,252 | ||||||
Jos. A. Bank Clothiers, Inc. * | 38,218 | 1,788,220 | ||||||
Kayak Software Corp. (c)* | 4,900 | 162,337 | ||||||
Kirkland’s, Inc. * | 22,400 | 214,816 | ||||||
Lithia Motors, Inc., Class A | 29,600 | 1,012,320 | ||||||
Lumber Liquidators Holdings, Inc. * | 37,800 | 2,109,996 | ||||||
MarineMax, Inc. * | 31,100 | 255,953 |
See financial notes 31
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Mattress Firm Holding Corp. * | 15,100 | 483,351 | ||||||
Monro Muffler Brake, Inc. | 42,450 | 1,439,904 | ||||||
New York & Co., Inc. * | 36,400 | 122,668 | ||||||
Nutrisystem, Inc. | 39,948 | 384,699 | ||||||
Office Depot, Inc. * | 389,700 | 966,456 | ||||||
OfficeMax, Inc. | 122,500 | 900,375 | ||||||
Orbitz Worldwide, Inc. * | 28,000 | 69,160 | ||||||
Orchard Supply Hardware Stores Corp., Class A * | 4,800 | 59,616 | ||||||
Overstock.com, Inc. (c)* | 15,500 | 233,740 | ||||||
Penske Automotive Group, Inc. | 59,516 | 1,821,190 | ||||||
Perfumania Holdings, Inc. * | 9,800 | 55,762 | ||||||
PetMed Express, Inc. | 29,500 | 321,550 | ||||||
Pier 1 Imports, Inc. | 134,700 | 2,747,880 | ||||||
Pool Corp. | 65,877 | 2,774,739 | ||||||
RadioShack Corp. (c) | 136,500 | 305,760 | ||||||
Rent-A-Center, Inc. | 82,705 | 2,756,558 | ||||||
rue21, Inc. * | 21,600 | 650,376 | ||||||
Saks, Inc. * | 153,400 | 1,576,952 | ||||||
Select Comfort Corp. * | 79,600 | 2,215,268 | ||||||
Shoe Carnival, Inc. | 20,250 | 473,445 | ||||||
Shutterfly, Inc. * | 49,100 | 1,485,766 | ||||||
Sonic Automotive, Inc., Class A | 56,200 | 1,090,280 | ||||||
Stage Stores, Inc. | 41,627 | 1,019,861 | ||||||
Stein Mart, Inc. * | 36,800 | 289,248 | ||||||
Systemax, Inc. * | 14,500 | 158,630 | ||||||
Teavana Holdings, Inc. * | 13,000 | 137,150 | ||||||
The Bon-Ton Stores, Inc. (c) | 16,500 | 202,620 | ||||||
The Buckle, Inc. (c) | 38,064 | 1,719,351 | ||||||
The Cato Corp., Class A | 38,404 | 1,089,906 | ||||||
The Children’s Place Retail Stores, Inc. * | 33,913 | 1,981,537 | ||||||
The Finish Line, Inc., Class A | 71,619 | 1,490,033 | ||||||
The Men’s Wearhouse, Inc. | 70,600 | 2,314,974 | ||||||
The Pep Boys - Manny, Moe & Jack | 74,800 | 747,252 | ||||||
The Wet Seal, Inc., Class A * | 121,200 | 346,632 | ||||||
Tilly’s, Inc., Class A * | 12,600 | 203,364 | ||||||
Tuesday Morning Corp. * | 57,700 | 344,469 | ||||||
US Auto Parts Network, Inc. * | 24,800 | 74,152 | ||||||
Vitacost.com, Inc. * | 30,300 | 193,920 | ||||||
Vitamin Shoppe, Inc. * | 41,300 | 2,364,012 | ||||||
VOXX International Corp. * | 24,200 | 150,524 | ||||||
West Marine, Inc. * | 19,800 | 204,732 | ||||||
Weyco Group, Inc. | 9,100 | 213,668 | ||||||
Winmark Corp. | 3,000 | 159,840 | ||||||
Zumiez, Inc. * | 30,100 | 761,831 | ||||||
72,242,319 | ||||||||
Semiconductors & Semiconductor Equipment 3.3% | ||||||||
Advanced Energy Industries, Inc. * | 57,600 | 680,256 | ||||||
Alpha & Omega Semiconductor Ltd. * | 28,000 | 238,560 | ||||||
Amkor Technology, Inc. (c)* | 109,518 | 473,118 | ||||||
ANADIGICS, Inc. * | 90,300 | 131,838 | ||||||
Applied Micro Circuits Corp. * | 84,865 | 492,217 | ||||||
ATMI, Inc. * | 43,554 | 860,191 | ||||||
Axcelis Technologies, Inc. * | 142,100 | 130,235 | ||||||
AXT, Inc. * | 42,800 | 137,388 | ||||||
Brooks Automation, Inc. | 93,731 | 676,738 | ||||||
Cabot Microelectronics Corp. | 32,800 | 977,440 | ||||||
Cavium, Inc. * | 69,800 | 2,315,964 | ||||||
CEVA, Inc. * | 33,700 | 510,555 | ||||||
Cirrus Logic, Inc. * | 89,800 | 3,660,248 | ||||||
Cohu, Inc. | 32,200 | 283,360 | ||||||
Cymer, Inc. * | 43,165 | 3,439,819 | ||||||
Diodes, Inc. * | 49,381 | 748,616 | ||||||
DSP Group, Inc. * | 31,400 | 172,700 | ||||||
Entegris, Inc. * | 188,400 | 1,546,764 | ||||||
Entropic Communications, Inc. * | 119,200 | 573,352 | ||||||
Exar Corp. * | 49,000 | 418,950 | ||||||
First Solar, Inc. (c)* | 82,700 | 2,010,437 | ||||||
FormFactor, Inc. * | 68,473 | 312,237 | ||||||
GSI Technology, Inc. * | 27,000 | 150,930 | ||||||
GT Advanced Technologies, Inc. (c)* | 168,600 | 731,724 | ||||||
Hittite Microwave Corp. * | 43,709 | 2,475,678 | ||||||
Inphi Corp. * | 32,100 | 268,677 | ||||||
Integrated Device Technology, Inc. * | 198,500 | 1,079,840 | ||||||
Integrated Silicon Solutions, Inc. * | 35,900 | 306,945 | ||||||
Intermolecular, Inc. * | 19,000 | 133,190 | ||||||
International Rectifier Corp. * | 95,000 | 1,471,550 | ||||||
Intersil Corp., Class A | 175,000 | 1,233,750 | ||||||
IXYS Corp. * | 32,400 | 308,448 | ||||||
Kopin Corp. * | 100,300 | 377,128 | ||||||
Lattice Semiconductor Corp. * | 170,200 | 660,376 | ||||||
LTX-Credence Corp. * | 66,300 | 369,291 | ||||||
M/A-COM Technology Solutions Holdings, Inc. * | 8,300 | 103,667 | ||||||
Mattson Technology, Inc. * | 100,300 | 90,019 | ||||||
MaxLinear, Inc., Class A * | 30,400 | 172,672 | ||||||
MEMC Electronic Materials, Inc. * | 316,900 | 798,588 | ||||||
Micrel, Inc. | 67,505 | 654,123 | ||||||
Microsemi Corp. * | 124,419 | 2,388,845 | ||||||
Mindspeed Technologies, Inc. * | 44,900 | 153,109 | ||||||
MIPS Technologies, Inc. * | 65,300 | 456,447 | ||||||
MKS Instruments, Inc. | 73,899 | 1,746,233 | ||||||
Monolithic Power Systems, Inc. * | 43,900 | 852,977 | ||||||
MoSys, Inc. * | 43,700 | 176,548 | ||||||
Nanometrics, Inc. * | 32,200 | 443,072 | ||||||
NeoPhotonics Corp. * | 26,800 | 140,700 | ||||||
NVE Corp. * | 6,400 | 331,520 | ||||||
OmniVision Technologies, Inc. * | 71,873 | 1,027,784 | ||||||
PDF Solutions, Inc. * | 35,700 | 472,668 | ||||||
Peregrine Semiconductor Corp. * | 8,800 | 155,848 | ||||||
Pericom Semiconductor Corp. * | 33,500 | 258,955 | ||||||
Photronics, Inc. * | 85,200 | 416,628 | ||||||
PLX Technology, Inc. (c)* | 59,600 | 258,068 | ||||||
Power Integrations, Inc. | 39,862 | 1,179,118 | ||||||
QuickLogic Corp. (c)* | 53,100 | 139,122 | ||||||
Rambus, Inc. * | 151,600 | 733,744 | ||||||
RF Micro Devices, Inc. * | 381,900 | 1,684,179 | ||||||
Rubicon Technology, Inc. (c)* | 23,500 | 204,215 | ||||||
Rudolph Technologies, Inc. * | 46,700 | 444,117 | ||||||
Semtech Corp. * | 91,829 | 2,292,970 | ||||||
Sigma Designs, Inc. * | 43,000 | 255,420 | ||||||
Silicon Image, Inc. * | 113,600 | 499,840 | ||||||
Spansion, Inc., Class A * | 67,400 | 747,466 | ||||||
STR Holdings, Inc. * | 40,500 | 87,075 | ||||||
SunPower Corp. (c)* | 54,600 | 235,326 | ||||||
Supertex, Inc. * | 14,800 | 282,828 | ||||||
Tessera Technologies, Inc. | 71,290 | 1,010,179 |
32 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
TriQuint Semiconductor, Inc. * | 231,400 | 1,087,580 | ||||||
Ultra Clean Holdings, Inc. * | 30,500 | 141,215 | ||||||
Ultratech, Inc. * | 36,000 | 1,112,760 | ||||||
Veeco Instruments, Inc. (c)* | 54,200 | 1,663,940 | ||||||
Volterra Semiconductor Corp. * | 34,800 | 632,316 | ||||||
55,890,391 | ||||||||
Software & Services 8.1% | ||||||||
Accelrys, Inc. * | 80,500 | 720,475 | ||||||
ACI Worldwide, Inc. * | 55,315 | 2,162,817 | ||||||
Actuate Corp. * | 67,700 | 360,841 | ||||||
Acxiom Corp. * | 107,176 | 1,955,962 | ||||||
Advent Software, Inc. * | 43,928 | 953,238 | ||||||
American Software, Inc., Class A | 30,400 | 248,976 | ||||||
Ancestry.com, Inc. * | 41,000 | 1,295,600 | ||||||
Angie’s List, Inc. (c)* | 48,800 | 558,272 | ||||||
Aspen Technology, Inc. * | 130,200 | 3,226,356 | ||||||
AVG Technologies NV * | 10,800 | 113,292 | ||||||
Bankrate, Inc. * | 63,400 | 680,282 | ||||||
Bazaarvoice, Inc. (c)* | 14,600 | 186,296 | ||||||
Blackbaud, Inc. | 61,969 | 1,473,003 | ||||||
Blucora, Inc. * | 55,500 | 974,025 | ||||||
Bottomline Technologies, Inc. * | 48,100 | 1,125,540 | ||||||
Brightcove, Inc. * | 7,700 | 97,174 | ||||||
BroadSoft, Inc. * | 37,700 | 1,440,894 | ||||||
CACI International, Inc., Class A * | 31,500 | 1,588,545 | ||||||
Callidus Software, Inc. * | 55,900 | 259,376 | ||||||
Carbonite, Inc. (c)* | 15,500 | 119,815 | ||||||
Cardtronics, Inc. * | 60,600 | 1,721,646 | ||||||
Cass Information Systems, Inc. | 12,400 | 520,428 | ||||||
CIBER, Inc. * | 100,000 | 312,000 | ||||||
CommVault Systems, Inc. * | 62,100 | 3,879,387 | ||||||
Computer Task Group, Inc. * | 20,200 | 376,730 | ||||||
comScore, Inc. * | 48,500 | 687,245 | ||||||
Comverse Technology, Inc. * | 300,700 | 1,981,613 | ||||||
Constant Contact, Inc. * | 41,800 | 515,812 | ||||||
Convergys Corp. | 162,800 | 2,736,668 | ||||||
Cornerstone OnDemand, Inc. * | 46,200 | 1,293,138 | ||||||
CoStar Group, Inc. * | 39,175 | 3,247,607 | ||||||
CSG Systems International, Inc. * | 46,400 | 956,304 | ||||||
DealerTrack Holdings, Inc. * | 58,236 | 1,591,590 | ||||||
Demand Media, Inc. (c)* | 41,100 | 350,583 | ||||||
Demandware, Inc. (c)* | 9,000 | 267,210 | ||||||
Dice Holdings, Inc. * | 64,900 | 573,067 | ||||||
Digimarc Corp. | 10,300 | 202,292 | ||||||
Digital River, Inc. * | 52,800 | 757,152 | ||||||
E2open, Inc. * | 8,500 | 148,750 | ||||||
EarthLink, Inc. | 147,381 | 934,396 | ||||||
Ebix, Inc. (c) | 38,600 | 841,094 | ||||||
Ellie Mae, Inc. * | 34,500 | 862,500 | ||||||
Eloqua, Inc. * | 12,900 | 300,957 | ||||||
Envestnet, Inc. * | 29,000 | 405,420 | ||||||
Envivio, Inc. * | 40,100 | 86,215 | ||||||
EPAM Systems, Inc. * | 7,300 | 131,254 | ||||||
EPIQ Systems, Inc. | 42,100 | 514,041 | ||||||
ePlus, Inc. * | 5,200 | 186,004 | ||||||
Euronet Worldwide, Inc. * | 70,936 | 1,439,291 | ||||||
Exa Corp. * | 8,000 | 98,880 | ||||||
ExactTarget, Inc. * | 13,400 | 312,488 | ||||||
ExlService Holdings, Inc. * | 32,100 | 951,444 | ||||||
Fair Isaac Corp. | 47,800 | 2,227,480 | ||||||
FalconStor Software, Inc. * | 41,100 | 91,242 | ||||||
Forrester Research, Inc. | 19,717 | 570,610 | ||||||
Global Cash Access Holdings, Inc. * | 91,800 | 647,190 | ||||||
Glu Mobile, Inc. (c)* | 74,200 | 235,214 | ||||||
Guidance Software, Inc. * | 18,600 | 226,548 | ||||||
Guidewire Software, Inc. * | 26,600 | 815,024 | ||||||
Heartland Payment Systems, Inc. | 53,200 | 1,387,456 | ||||||
Higher One Holdings, Inc. (c)* | 43,800 | 553,194 | ||||||
iGATE Corp. * | 44,140 | 708,447 | ||||||
Imperva, Inc. * | 13,400 | 422,502 | ||||||
Infoblox, Inc. * | 10,700 | 177,727 | ||||||
Innodata, Inc. * | 30,500 | 109,495 | ||||||
Interactive Intelligence Group, Inc. * | 20,500 | 650,055 | ||||||
Internap Network Services Corp. * | 75,700 | 518,545 | ||||||
IntraLinks Holdings, Inc. * | 50,600 | 282,854 | ||||||
Ipass, Inc. * | 71,300 | 138,322 | ||||||
j2 Global, Inc. | 63,528 | 1,908,381 | ||||||
JDA Software Group, Inc. * | 58,369 | 2,226,194 | ||||||
Jive Software, Inc. (c)* | 23,300 | 260,960 | ||||||
Kenexa Corp. * | 37,500 | 1,723,500 | ||||||
Keynote Systems, Inc. | 21,500 | 307,235 | ||||||
KIT Digital, Inc. (c)* | 80,200 | 222,956 | ||||||
Limelight Networks, Inc. * | 90,900 | 191,799 | ||||||
Lionbridge Technologies, Inc. * | 82,500 | 261,525 | ||||||
Liquidity Services, Inc. * | 32,300 | 1,331,729 | ||||||
LivePerson, Inc. * | 75,500 | 1,184,595 | ||||||
LogMeIn, Inc. * | 30,300 | 747,804 | ||||||
Manhattan Associates, Inc. * | 28,247 | 1,694,820 | ||||||
ManTech International Corp., Class A | 31,200 | 716,664 | ||||||
Marchex, Inc., Class B | 28,600 | 116,974 | ||||||
Market Leader, Inc. * | 30,300 | 206,040 | ||||||
Mattersight Corp. * | 13,900 | 76,867 | ||||||
MAXIMUS, Inc. | 47,248 | 2,607,145 | ||||||
MeetMe, Inc. (c)* | 47,000 | 198,810 | ||||||
Mentor Graphics Corp. * | 128,967 | 2,001,568 | ||||||
MicroStrategy, Inc., Class A * | 11,662 | 1,101,709 | ||||||
Millennial Media, Inc. (c)* | 15,700 | 251,671 | ||||||
ModusLink Global Solutions, Inc. * | 58,700 | 171,991 | ||||||
MoneyGram International, Inc. * | 29,500 | 458,430 | ||||||
Monotype Imaging Holdings, Inc. | 49,900 | 763,969 | ||||||
Monster Worldwide, Inc. * | 166,500 | 1,035,630 | ||||||
Move, Inc. * | 53,100 | 440,199 | ||||||
NetScout Systems, Inc. * | 52,000 | 1,285,960 | ||||||
NIC, Inc. | 89,400 | 1,278,420 | ||||||
OpenTable, Inc. (c)* | 31,500 | 1,479,555 | ||||||
Opnet Technologies, Inc. | 20,700 | 878,301 | ||||||
Parametric Technology Corp. * | 166,100 | 3,351,898 | ||||||
Pegasystems, Inc. | 23,600 | 553,892 | ||||||
Perficient, Inc. * | 43,800 | 498,006 | ||||||
Pervasive Software, Inc. * | 18,200 | 156,156 | ||||||
PRGX Global, Inc. * | 32,500 | 254,150 | ||||||
Progress Software Corp. * | 87,820 | 1,731,810 | ||||||
Proofpoint, Inc. * | 8,700 | 114,927 | ||||||
PROS Holdings, Inc. * | 31,300 | 605,029 | ||||||
QAD, Inc., Class A * | 8,800 | 107,624 | ||||||
QLIK Technologies, Inc. * | 119,000 | 2,190,790 | ||||||
QuinStreet, Inc. * | 44,900 | 274,788 | ||||||
RealNetworks, Inc. * | 28,257 | 213,905 | ||||||
RealPage, Inc. * | 49,200 | 1,074,036 |
See financial notes 33
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Responsys, Inc. * | 49,100 | 438,954 | ||||||
Rosetta Stone, Inc. * | 14,700 | 172,137 | ||||||
Saba Software, Inc. * | 43,200 | 435,456 | ||||||
Sapiens International Corp. N.V. (c)* | 19,400 | 66,930 | ||||||
Sapient Corp. * | 169,163 | 1,738,996 | ||||||
SciQuest, Inc. * | 24,500 | 371,910 | ||||||
SeaChange International, Inc. * | 40,700 | 368,335 | ||||||
ServiceSource International, Inc. * | 68,100 | 613,581 | ||||||
Sourcefire, Inc. * | 40,600 | 1,737,274 | ||||||
Spark Networks, Inc. (c)* | 15,700 | 102,992 | ||||||
SPS Commerce, Inc. * | 17,200 | 623,500 | ||||||
SS&C Technologies Holdings, Inc. * | 46,500 | 1,117,395 | ||||||
Stamps.com, Inc. * | 19,400 | 533,888 | ||||||
Support.com, Inc. * | 64,900 | 301,136 | ||||||
Synacor, Inc. (c)* | 9,300 | 50,964 | ||||||
Synchronoss Technologies, Inc. * | 37,900 | 776,571 | ||||||
Syntel, Inc. | 21,400 | 1,275,654 | ||||||
Take-Two Interactive Software, Inc. * | 107,304 | 1,196,440 | ||||||
Tangoe, Inc. * | 40,900 | 528,428 | ||||||
TechTarget, Inc. * | 19,600 | 93,688 | ||||||
TeleNav, Inc. * | 22,100 | 155,584 | ||||||
TeleTech Holdings, Inc. * | 34,000 | 572,560 | ||||||
The Active Network, Inc. * | 53,300 | 472,238 | ||||||
The Hackett Group, Inc. * | 40,800 | 158,712 | ||||||
TiVo, Inc. * | 171,203 | 1,737,710 | ||||||
TNS, Inc. * | 34,100 | 488,312 | ||||||
Travelzoo, Inc. * | 9,800 | 174,930 | ||||||
Tyler Technologies, Inc. * | 41,300 | 1,974,553 | ||||||
Ultimate Software Group, Inc. * | 37,100 | 3,760,456 | ||||||
Unisys Corp. * | 60,150 | 1,025,558 | ||||||
United Online, Inc. | 126,687 | 679,042 | ||||||
Unwired Planet, Inc. * | 114,100 | 160,881 | ||||||
ValueClick, Inc. * | 110,700 | 1,845,369 | ||||||
VASCO Data Security International, Inc. * | 40,200 | 284,616 | ||||||
Verint Systems, Inc. * | 29,900 | 815,373 | ||||||
Virnetx Holding Corp. (c)* | 57,600 | 1,730,880 | ||||||
Virtusa Corp. * | 25,600 | 439,296 | ||||||
VistaPrint N.V. (c)* | 50,800 | 1,547,876 | ||||||
Vocus, Inc. * | 28,300 | 502,325 | ||||||
Web.com Group, Inc. * | 48,100 | 759,018 | ||||||
WebMD Health Corp. * | 69,600 | 1,037,736 | ||||||
Websense, Inc. * | 53,504 | 707,323 | ||||||
WEX, Inc. * | 54,076 | 3,989,727 | ||||||
XO Group, Inc. * | 39,800 | 320,390 | ||||||
Yelp, Inc. (c)* | 11,600 | 279,560 | ||||||
Zix Corp. * | 88,900 | 257,810 | ||||||
135,166,366 | ||||||||
Technology Hardware & Equipment 4.8% | ||||||||
3D Systems Corp. (c)* | 64,900 | 2,823,150 | ||||||
ADTRAN, Inc. (c) | 88,700 | 1,498,143 | ||||||
Aeroflex Holding Corp. * | 26,600 | 169,176 | ||||||
Agilysys, Inc. * | 24,000 | 196,080 | ||||||
Ambient Corp. (c)* | 9,400 | 36,096 | ||||||
Anaren, Inc. * | 20,200 | 364,206 | ||||||
Anixter International, Inc. | 38,800 | 2,274,456 | ||||||
Arris Group, Inc. * | 158,760 | 2,181,362 | ||||||
Aruba Networks, Inc. * | 155,900 | 2,832,703 | ||||||
Audience, Inc. * | 8,300 | 62,458 | ||||||
Aviat Networks, Inc. * | 81,200 | 185,136 | ||||||
Avid Technology, Inc. * | 39,705 | 233,068 | ||||||
Aware, Inc. | 15,800 | 96,222 | ||||||
Badger Meter, Inc. | 20,203 | 865,497 | ||||||
Bel Fuse, Inc., Class B | 14,100 | 233,496 | ||||||
Benchmark Electronics, Inc. * | 81,294 | 1,204,777 | ||||||
Black Box Corp. | 24,092 | 528,097 | ||||||
CalAmp Corp. * | 39,400 | 349,872 | ||||||
Calix, Inc. * | 58,800 | 391,020 | ||||||
Checkpoint Systems, Inc. * | 53,744 | 436,401 | ||||||
Ciena Corp. * | 138,900 | 1,723,749 | ||||||
Cognex Corp. | 60,109 | 2,191,574 | ||||||
Coherent, Inc. * | 32,451 | 1,481,388 | ||||||
Comtech Telecommunications Corp. | 24,500 | 616,665 | ||||||
Cray, Inc. * | 51,800 | 630,406 | ||||||
CTS Corp. | 46,000 | 380,880 | ||||||
Daktronics, Inc. | 50,700 | 444,639 | ||||||
Datalink Corp. * | 20,900 | 170,126 | ||||||
Digi International, Inc. * | 33,900 | 319,338 | ||||||
DTS, Inc. * | 24,942 | 523,283 | ||||||
Echelon Corp. * | 60,600 | 200,586 | ||||||
Electro Rent Corp. | 25,200 | 396,144 | ||||||
Electro Scientific Industries, Inc. | 30,200 | 322,536 | ||||||
Electronics for Imaging, Inc. * | 65,209 | 1,132,028 | ||||||
Emulex Corp. * | 117,590 | 818,426 | ||||||
Extreme Networks, Inc. * | 135,200 | 440,752 | ||||||
Fabrinet * | 30,100 | 289,863 | ||||||
FARO Technologies, Inc. * | 23,200 | 932,640 | ||||||
FEI Co. | 52,600 | 2,895,630 | ||||||
Finisar Corp. * | 125,300 | 1,443,456 | ||||||
Globecomm Systems, Inc. * | 34,300 | 372,155 | ||||||
GSI Group, Inc. * | 40,000 | 310,800 | ||||||
Harmonic, Inc. * | 160,400 | 696,136 | ||||||
Imation Corp. * | 40,200 | 183,714 | ||||||
Immersion Corp. * | 38,200 | 165,024 | ||||||
Infinera Corp. * | 150,600 | 740,952 | ||||||
Insight Enterprises, Inc. * | 60,600 | 979,902 | ||||||
InterDigital, Inc. (c) | 62,300 | 2,373,007 | ||||||
Intermec, Inc. * | 87,540 | 593,521 | ||||||
Intevac, Inc. * | 30,600 | 153,000 | ||||||
InvenSense, Inc. (c)* | 50,000 | 560,000 | ||||||
Ixia * | 57,864 | 810,675 | ||||||
KEMET Corp. * | 59,100 | 268,314 | ||||||
Key Tronic Corp. * | 14,400 | 163,440 | ||||||
KVH Industries, Inc. * | 19,900 | 275,018 | ||||||
Littelfuse, Inc. | 30,400 | 1,629,440 | ||||||
Loral Space & Communications, Inc. | 15,000 | 1,179,900 | ||||||
Maxwell Technologies, Inc. * | 43,400 | 282,534 | ||||||
Measurement Specialties, Inc. * | 21,300 | 694,593 | ||||||
Mercury Computer Systems, Inc. * | 44,600 | 365,497 | ||||||
Mesa Laboratories, Inc. | 3,600 | 175,572 | ||||||
Methode Electronics, Inc. | 49,500 | 500,940 | ||||||
MTS Systems Corp. | 22,075 | 1,112,801 | ||||||
Multi-Fineline Electronix, Inc. * | 12,100 | 255,794 | ||||||
Neonode, Inc. (c)* | 30,900 | 117,111 | ||||||
NETGEAR, Inc. * | 53,400 | 1,896,234 | ||||||
Newport Corp. * | 52,100 | 563,722 | ||||||
NumereX Corp., Class A * | 12,800 | 146,944 |
34 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Oclaro, Inc. * | 101,300 | 199,561 | ||||||
OCZ Technology Group, Inc. (c)* | 95,200 | 128,520 | ||||||
Oplink Communications, Inc. * | 26,200 | 389,332 | ||||||
OSI Systems, Inc. * | 27,300 | 2,163,525 | ||||||
Park Electrochemical Corp. | 29,300 | 727,226 | ||||||
ParkerVision, Inc. (c)* | 104,200 | 162,552 | ||||||
PC Connection, Inc. | 12,500 | 128,625 | ||||||
PC-Tel, Inc. | 25,400 | 165,608 | ||||||
Plantronics, Inc. | 59,193 | 1,920,221 | ||||||
Plexus Corp. * | 48,962 | 1,317,567 | ||||||
Power-One, Inc. * | 91,200 | 367,536 | ||||||
Procera Networks, Inc. * | 28,000 | 634,200 | ||||||
QLogic Corp. * | 133,800 | 1,255,044 | ||||||
Quantum Corp. * | 321,700 | 337,785 | ||||||
Radisys Corp. * | 38,000 | 107,920 | ||||||
RealD, Inc. (c)* | 60,400 | 564,740 | ||||||
Richardson Electronics Ltd. | 18,900 | 220,185 | ||||||
Rofin-Sinar Technologies, Inc. * | 40,036 | 729,056 | ||||||
Rogers Corp. * | 22,367 | 881,483 | ||||||
Sanmina-SCI Corp. * | 111,200 | 988,568 | ||||||
ScanSource, Inc. * | 37,878 | 1,107,932 | ||||||
ShoreTel, Inc. * | 63,200 | 279,976 | ||||||
Silicon Graphics International Corp. (c)* | 46,000 | 355,120 | ||||||
Sonus Networks, Inc. * | 309,258 | 575,220 | ||||||
STEC, Inc. * | 49,000 | 287,630 | ||||||
Stratasys, Inc. * | 29,900 | 1,993,433 | ||||||
Super Micro Computer, Inc. * | 40,000 | 316,400 | ||||||
Sycamore Networks, Inc. | 30,211 | 174,620 | ||||||
Symmetricom, Inc. * | 58,000 | 356,700 | ||||||
Synaptics, Inc. * | 46,200 | 1,069,992 | ||||||
SYNNEX Corp. * | 36,100 | 1,169,279 | ||||||
Tellabs, Inc. | 502,800 | 1,468,176 | ||||||
Telular Corp. | 22,800 | 227,772 | ||||||
TESSCO Technologies, Inc. | 7,400 | 153,920 | ||||||
TTM Technologies, Inc. * | 72,500 | 652,500 | ||||||
Ubiquiti Networks, Inc. (c)* | 17,300 | 204,140 | ||||||
Universal Display Corp. * | 55,500 | 1,819,290 | ||||||
ViaSat, Inc. * | 51,519 | 2,000,998 | ||||||
Viasystems Group, Inc. * | 7,000 | 107,170 | ||||||
Vishay Precision Group, Inc. * | 16,500 | 215,325 | ||||||
Westell Technologies, Inc., Class A * | 71,100 | 145,044 | ||||||
Zygo Corp. * | 23,500 | 437,570 | ||||||
80,389,726 | ||||||||
Telecommunication Services 0.7% | ||||||||
8x8, Inc. * | 97,100 | 636,005 | ||||||
Atlantic Tele-Network, Inc. | 12,600 | 522,144 | ||||||
Boingo Wireless, Inc. (c)* | 21,700 | 158,844 | ||||||
Cbeyond, Inc. * | 37,400 | 286,484 | ||||||
Cincinnati Bell, Inc. * | 275,345 | 1,434,547 | ||||||
Cogent Communications Group, Inc. | 64,300 | 1,395,953 | ||||||
Consolidated Communications Holdings, Inc. | 57,625 | 889,730 | ||||||
Fairpoint Communications, Inc. (c)* | 28,900 | 212,126 | ||||||
General Communication, Inc., Class A * | 50,300 | 439,622 | ||||||
Hawaiian Telcom Holdco, Inc. * | 14,100 | 240,687 | ||||||
HickoryTech Corp. | 17,900 | 190,635 | ||||||
IDT Corp., Class B | 23,500 | 237,820 | ||||||
inContact, Inc. * | 51,900 | 298,944 | ||||||
Iridium Communications, Inc. * | 68,200 | 503,998 | ||||||
Leap Wireless International, Inc. (c)* | 73,500 | 392,490 | ||||||
Lumos Networks Corp. | 20,100 | 158,187 | ||||||
magicJack VocalTec Ltd. (c)* | 20,700 | 421,245 | ||||||
Neutral Tandem, Inc. | 38,300 | 176,946 | ||||||
NTELOS Holdings Corp. | 20,150 | 307,288 | ||||||
ORBCOMM, Inc. * | 46,400 | 162,400 | ||||||
Premiere Global Services, Inc. * | 70,000 | 595,000 | ||||||
Primus Telecommunications Group, Inc. | 16,700 | 244,321 | ||||||
Shenandoah Telecommunications Co. | 34,800 | 547,056 | ||||||
Towerstream Corp. (c)* | 68,400 | 240,768 | ||||||
USA Mobility, Inc. | 29,600 | 327,080 | ||||||
Vonage Holdings Corp. * | 218,500 | 495,995 | ||||||
11,516,315 | ||||||||
Transportation 2.5% | ||||||||
Air Transport Services Group, Inc. * | 72,100 | 277,585 | ||||||
Alaska Air Group, Inc. * | 98,800 | 3,778,112 | ||||||
Allegiant Travel Co. * | 20,500 | 1,491,170 | ||||||
AMERCO | 12,004 | 1,386,942 | ||||||
Arkansas Best Corp. | 34,072 | 274,280 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 36,300 | 1,996,137 | ||||||
Avis Budget Group, Inc. * | 148,700 | 2,458,011 | ||||||
Celadon Group, Inc. | 26,900 | 459,990 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 39,100 | 3,010,700 | ||||||
Echo Global Logistics, Inc. * | 20,300 | 341,243 | ||||||
Forward Air Corp. | 40,582 | 1,354,221 | ||||||
Genco Shipping & Trading Ltd. (c)* | 48,200 | 146,528 | ||||||
Genesee & Wyoming, Inc., Class A * | 61,600 | 4,464,152 | ||||||
Hawaiian Holdings, Inc. * | 75,200 | 445,936 | ||||||
Heartland Express, Inc. | 67,500 | 941,625 | ||||||
Hub Group, Inc., Class A * | 50,892 | 1,578,161 | ||||||
International Shipholding Corp. | 7,300 | 122,056 | ||||||
JetBlue Airways Corp. * | 326,500 | 1,727,185 | ||||||
Knight Transportation, Inc. | 81,700 | 1,235,304 | ||||||
Marten Transport Ltd. | 20,800 | 384,800 | ||||||
Old Dominion Freight Line, Inc. * | 99,124 | 3,324,619 | ||||||
Pacer International, Inc. * | 46,900 | 167,902 | ||||||
Park-Ohio Holdings Corp. * | 11,200 | 247,744 | ||||||
Patriot Transportation Holding, Inc. * | 8,700 | 243,600 | ||||||
Quality Distribution, Inc. * | 29,300 | 251,980 | ||||||
Rand Logistics, Inc. * | 24,300 | 157,464 | ||||||
Republic Airways Holdings, Inc. * | 64,600 | 301,682 | ||||||
Roadrunner Transportation Systems, Inc. * | 17,600 | 306,768 | ||||||
Saia, Inc. * | 23,400 | 528,840 | ||||||
SkyWest, Inc. | 70,812 | 775,391 | ||||||
Spirit Airlines, Inc. * | 57,100 | 1,002,105 | ||||||
Swift Transportation Co. * | 110,900 | 1,081,275 | ||||||
Universal Truckload Services, Inc. | 7,300 | 115,632 | ||||||
US Airways Group, Inc. * | 226,500 | 2,758,770 | ||||||
Werner Enterprises, Inc. | 60,743 | 1,406,808 |
See financial notes 35
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Wesco Aircraft Holdings, Inc. * | 24,000 | 320,400 | ||||||
XPO Logistics, Inc. (c)* | 24,200 | 332,266 | ||||||
Zipcar, Inc. (c)* | 36,900 | 231,363 | ||||||
41,428,747 | ||||||||
Utilities 3.6% | ||||||||
ALLETE, Inc. | 52,390 | 2,180,472 | ||||||
American DG Energy, Inc. (c)* | 53,400 | 134,568 | ||||||
American States Water Co. | 25,700 | 1,131,314 | ||||||
Artesian Resources Corp., Class A | 10,500 | 241,605 | ||||||
Atlantic Power Corp. | 159,500 | 2,395,690 | ||||||
Avista Corp. | 82,412 | 2,094,913 | ||||||
Black Hills Corp. | 62,298 | 2,228,400 | ||||||
Cadiz, Inc. * | 16,200 | 139,320 | ||||||
California Water Service Group | 58,174 | 1,071,565 | ||||||
CH Energy Group, Inc. | 20,797 | 1,352,429 | ||||||
Chesapeake Utilities Corp. | 13,800 | 648,186 | ||||||
Cleco Corp. | 84,600 | 3,650,490 | ||||||
Connecticut Water Service, Inc. | 11,500 | 352,245 | ||||||
Consolidated Water Co., Ltd. | 19,500 | 153,075 | ||||||
Delta Natural Gas Co., Inc. | 9,300 | 182,838 | ||||||
El Paso Electric Co. | 55,916 | 1,900,585 | ||||||
Genie Energy Ltd., Class B | 18,600 | 130,386 | ||||||
GenOn Energy, Inc. * | 1,076,600 | 2,766,862 | ||||||
IDACORP, Inc. | 69,800 | 3,121,456 | ||||||
MGE Energy, Inc. | 32,260 | 1,698,166 | ||||||
Middlesex Water Co. | 20,900 | 404,206 | ||||||
New Jersey Resources Corp. | 57,900 | 2,574,234 | ||||||
Northwest Natural Gas Co. | 36,795 | 1,712,071 | ||||||
NorthWestern Corp. | 49,912 | 1,787,349 | ||||||
Ormat Technologies, Inc. | 24,000 | 456,720 | ||||||
Otter Tail Corp. | 50,109 | 1,209,130 | ||||||
Piedmont Natural Gas Co., Inc. | 99,700 | 3,177,439 | ||||||
PNM Resources, Inc. | 111,700 | 2,475,272 | ||||||
Portland General Electric Co. | 105,200 | 2,882,480 | ||||||
SJW Corp. | 20,700 | 501,768 | ||||||
South Jersey Industries, Inc. | 41,760 | 2,112,638 | ||||||
Southwest Gas Corp. | 64,296 | 2,794,947 | ||||||
The Empire District Electric Co. | 57,900 | 1,257,009 | ||||||
The Laclede Group, Inc. | 30,677 | 1,277,390 | ||||||
The York Water Co. | 17,000 | 295,290 | ||||||
UIL Holdings Corp. | 70,710 | 2,557,581 | ||||||
Unitil Corp. | 18,500 | 491,915 | ||||||
UNS Energy Corp. | 55,317 | 2,358,717 | ||||||
WGL Holdings, Inc. | 71,800 | 2,855,486 | ||||||
60,756,207 | ||||||||
Total Common Stock | ||||||||
(Cost $1,363,052,199) | 1,630,498,243 | |||||||
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. (b)* | 19,700 | 591 | ||||||
Total Warrants | ||||||||
(Cost $—) | 591 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.6% of net assets | ||||||||
Time Deposit 2.5% | ||||||||
Royal Bank of Canada | ||||||||
0.03%, 11/01/12 | 41,374,248 | 41,374,248 | ||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.07%, 12/20/12 (d)(e) | 100,000 | 99,991 | ||||||
0.09%, 12/20/12 (d)(e) | 250,000 | 249,969 | ||||||
0.10%, 12/20/12 (d)(e) | 170,000 | 169,977 | ||||||
0.11%, 12/20/12 (d)(e) | 1,848,000 | 1,847,736 | ||||||
0.11%, 12/20/12 (d)(e) | 250,000 | 249,964 | ||||||
2,617,637 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $43,991,885) | 43,991,885 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 5.6% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund | 93,407,211 | 93,407,211 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $93,407,211) | 93,407,211 | |||||||
End of Collateral Invested for Securities on Loan. |
36 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
At 10/31/12 tax basis cost of the fund’s investments was $1,412,644,938 and the unrealized appreciation and depreciation were $406,103,935 and ($144,258,154), respectively, with a net unrealized appreciation of $261,845,781.
* | 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 $320,070 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/21/12 | 510 | 41,631,300 | (1,350,122 | ) |
See financial notes 37
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .6% | Common Stock | 1,684,732,545 | 2,208,790,277 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
1 | .1% | Short-Term Investments | 24,098,126 | 24,098,126 | ||||||||
99 | .7% | Total Investments | 1,708,830,671 | 2,232,888,403 | ||||||||
0 | .8% | Collateral Invested for Securities on Loan | 18,504,950 | 18,504,950 | ||||||||
(0 | .5)% | Other Assets and Liabilities, Net | (11,715,225 | ) | ||||||||
100 | .0% | Net Assets | 2,239,678,128 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.6% of net assets | ||||||||
Automobiles & Components 0.8% | ||||||||
Allison Transmission Holdings, Inc. (d) | 5,200 | 104,988 | ||||||
American Axle & Manufacturing Holdings, Inc. * | 8,300 | 90,221 | ||||||
BorgWarner, Inc. * | 16,000 | 1,053,120 | ||||||
Cooper Tire & Rubber Co. | 8,900 | 179,157 | ||||||
Dana Holding Corp. | 19,500 | 256,620 | ||||||
Dorman Products, Inc. * | 3,000 | 91,650 | ||||||
Drew Industries, Inc. * | 2,400 | 76,008 | ||||||
Exide Technologies * | 15,500 | 47,275 | ||||||
Federal-Mogul Corp. * | 12,900 | 97,266 | ||||||
Ford Motor Co. | 544,236 | 6,073,674 | ||||||
General Motors Co. * | 108,000 | 2,754,000 | ||||||
Gentex Corp. | 20,600 | 354,732 | ||||||
Harley-Davidson, Inc. | 32,300 | 1,510,348 | ||||||
Johnson Controls, Inc. | 96,300 | 2,479,725 | ||||||
Lear Corp. | 14,000 | 596,400 | ||||||
Modine Manufacturing Co. * | 12,100 | 82,280 | ||||||
Standard Motor Products, Inc. | 7,500 | 140,850 | ||||||
Stoneridge, Inc. * | 8,200 | 40,754 | ||||||
Strattec Security Corp. | 1,500 | 34,080 | ||||||
Tenneco, Inc. * | 7,480 | 228,514 | ||||||
Tesla Motors, Inc. (d)* | 9,400 | 264,422 | ||||||
The Goodyear Tire & Rubber Co. * | 33,900 | 386,799 | ||||||
Thor Industries, Inc. | 7,500 | 285,225 | ||||||
TRW Automotive Holdings Corp. * | 14,400 | 669,744 | ||||||
Visteon Corp. * | 8,000 | 352,800 | ||||||
Winnebago Industries, Inc. * | 7,400 | 93,240 | ||||||
18,343,892 | ||||||||
Banks 3.3% | ||||||||
1st Source Corp. | 5,528 | 122,777 | ||||||
Ameris Bancorp * | 4,048 | 43,192 | ||||||
Arrow Financial Corp. (d) | 3,324 | 81,106 | ||||||
Associated Banc-Corp. | 21,500 | 277,135 | ||||||
Astoria Financial Corp. | 11,300 | 113,339 | ||||||
BancFirst Corp. | 2,300 | 101,108 | ||||||
BancorpSouth, Inc. | 10,112 | 143,085 | ||||||
BancTrust Financial Group, Inc. * | 2,100 | 5,964 | ||||||
Bank Mutual Corp. | 11,668 | 52,623 | ||||||
Bank of Hawaii Corp. | 6,500 | 287,040 | ||||||
Bank of the Ozarks, Inc. | 5,600 | 183,344 | ||||||
BankUnited, Inc. | 6,000 | 142,260 | ||||||
Banner Corp. | 3,171 | 91,927 | ||||||
BB&T Corp. | 98,458 | 2,850,359 | ||||||
BBCN Bancorp, Inc. | 11,000 | 131,230 | ||||||
Beneficial Mutual Bancorp, Inc. * | 7,500 | 71,100 | ||||||
Berkshire Bancorp, Inc. * | 3,600 | 29,952 | ||||||
Berkshire Hills Bancorp, Inc. | 3,400 | 79,832 | ||||||
BOK Financial Corp. | 3,740 | 219,351 | ||||||
Boston Private Financial Holdings, Inc. | 12,129 | 111,829 | ||||||
Brookline Bancorp, Inc. | 11,705 | 99,258 | ||||||
Bryn Mawr Bank Corp. | 3,400 | 76,976 | ||||||
Camco Financial Corp. * | 700 | 1,295 | ||||||
Camden National Corp. | 1,700 | 59,330 | ||||||
Capital City Bank Group, Inc. * | 4,375 | 44,406 | ||||||
CapitalSource, Inc. | 32,900 | 260,239 | ||||||
Capitol Federal Financial, Inc. | 21,963 | 261,579 | ||||||
Cathay General Bancorp | 9,200 | 162,748 | ||||||
Central Pacific Financial Corp. * | 5,169 | 74,279 | ||||||
Century Bancorp, Inc., Class A | 800 | 26,168 | ||||||
Chemical Financial Corp. | 5,383 | 126,608 | ||||||
CIT Group, Inc. * | 27,900 | 1,038,438 | ||||||
Citizens Republic Bancorp, Inc. * | 5,900 | 107,026 | ||||||
City Holding Co. | 4,800 | 168,576 | ||||||
City National Corp. | 6,100 | 311,710 | ||||||
Columbia Banking System, Inc. | 4,951 | 87,682 | ||||||
Comerica, Inc. | 27,659 | 824,515 | ||||||
Commerce Bancshares, Inc. | 10,461 | 398,355 | ||||||
Community Bank System, Inc. | 4,400 | 121,396 | ||||||
Community Trust Bancorp, Inc. | 2,487 | 84,359 | ||||||
Cullen/Frost Bankers, Inc. | 8,300 | 458,990 | ||||||
CVB Financial Corp. | 10,311 | 111,565 | ||||||
Dime Community Bancshares, Inc. | 6,875 | 99,687 | ||||||
East West Bancorp, Inc. | 19,600 | 417,284 | ||||||
EverBank Financial Corp. | 8,900 | 135,636 | ||||||
F.N.B. Corp. | 19,661 | 210,963 | ||||||
Fifth Third Bancorp | 129,314 | 1,878,932 | ||||||
First BanCorp * | 26,579 | 112,695 | ||||||
First Busey Corp. | 20,200 | 95,344 | ||||||
First Citizens BancShares, Inc., Class A | 900 | 151,875 | ||||||
First Commonwealth Financial Corp. | 13,504 | 88,451 | ||||||
First Financial Bancorp | 10,339 | 162,322 | ||||||
First Financial Bankshares, Inc. | 6,000 | 217,380 | ||||||
First Financial Corp. | 2,600 | 79,534 |
38 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
First Financial Holdings, Inc. | 3,900 | 54,990 | ||||||
First Horizon National Corp. | 32,816 | 305,517 | ||||||
First M&F Corp. | 2,000 | 16,900 | ||||||
First Merchants Corp. | 9,041 | 132,993 | ||||||
First Midwest Bancorp, Inc. | 9,125 | 112,876 | ||||||
First Niagara Financial Group, Inc. | 50,265 | 416,194 | ||||||
First Republic Bank | 11,000 | 377,850 | ||||||
First United Corp. * | 2,200 | 15,180 | ||||||
FirstMerit Corp. | 13,406 | 185,807 | ||||||
Flagstar Bancorp, Inc. * | 8,060 | 111,228 | ||||||
Flushing Financial Corp. | 6,800 | 105,740 | ||||||
Fulton Financial Corp. | 28,262 | 274,707 | ||||||
Glacier Bancorp, Inc. | 7,697 | 111,606 | ||||||
Great Southern Bancorp, Inc. | 3,400 | 96,458 | ||||||
Hancock Holding Co. | 10,844 | 342,562 | ||||||
Hawthorn Bancshares, Inc. | 876 | 7,665 | ||||||
Heritage Financial Corp. | 4,235 | 58,570 | ||||||
Home Bancshares, Inc. | 3,300 | 114,312 | ||||||
Hudson City Bancorp, Inc. | 69,231 | 587,425 | ||||||
Huntington Bancshares, Inc. | 120,799 | 771,906 | ||||||
IBERIABANK Corp. | 3,875 | 192,936 | ||||||
Independent Bank Corp. | 3,000 | 88,530 | ||||||
Independent Bank Corp., Michigan * | 431 | 1,483 | ||||||
International Bancshares Corp. | 7,784 | 141,280 | ||||||
Investors Bancorp, Inc. | 9,600 | 172,704 | ||||||
Kearny Financial Corp. | 9,000 | 85,050 | ||||||
KeyCorp | 132,490 | 1,115,566 | ||||||
Lakeland Financial Corp. | 3,700 | 98,753 | ||||||
M&T Bank Corp. | 17,549 | 1,826,851 | ||||||
MainSource Financial Group, Inc. | 3,235 | 40,502 | ||||||
MB Financial, Inc. | 8,133 | 164,775 | ||||||
Merchants Bancshares, Inc. | 1,450 | 42,456 | ||||||
MGIC Investment Corp. * | 45,600 | 78,432 | ||||||
MutualFirst Financial, Inc. | 2,000 | 24,320 | ||||||
National Penn Bancshares, Inc. | 13,175 | 117,653 | ||||||
Nationstar Mortgage Holdings, Inc. * | 3,100 | 112,003 | ||||||
NBT Bancorp, Inc. | 4,400 | 93,588 | ||||||
New York Community Bancorp, Inc. | 60,985 | 845,252 | ||||||
North Valley Bancorp * | 300 | 4,176 | ||||||
Northrim BanCorp, Inc. | 4,281 | 96,451 | ||||||
Northwest Bancshares, Inc. | 11,250 | 133,875 | ||||||
OceanFirst Financial Corp. | 5,050 | 70,397 | ||||||
Ocwen Financial Corp. * | 16,420 | 633,319 | ||||||
Old National Bancorp | 16,800 | 206,136 | ||||||
Oriental Financial Group, Inc. | 8,163 | 96,160 | ||||||
Oritani Financial Corp. | 6,000 | 91,680 | ||||||
Pacific Capital Bancorp * | 3,117 | 143,101 | ||||||
PacWest Bancorp | 6,000 | 135,000 | ||||||
Park National Corp. (d) | 2,845 | 189,335 | ||||||
People’s United Financial, Inc. | 49,587 | 596,532 | ||||||
Peoples Financial Corp. | 3,000 | 25,500 | ||||||
Pinnacle Financial Partners, Inc. * | 6,475 | 126,586 | ||||||
PNC Financial Services Group, Inc. | 75,532 | 4,395,207 | ||||||
Popular, Inc. * | 14,720 | 284,538 | ||||||
Premier Financial Bancorp, Inc. | 245 | 2,345 | ||||||
PrivateBancorp, Inc. | 8,000 | 129,280 | ||||||
Prosperity Bancshares, Inc. | 6,400 | 267,904 | ||||||
Provident Financial Holdings, Inc. | 2,750 | 40,617 | ||||||
Provident Financial Services, Inc. | 5,217 | 78,255 | ||||||
Radian Group, Inc. | 24,500 | 114,905 | ||||||
Regions Financial Corp. | 201,662 | 1,314,836 | ||||||
Renasant Corp. | 4,125 | 75,941 | ||||||
Republic Bancorp, Inc., Class A | 6,521 | 140,984 | ||||||
Roma Financial Corp. | 4,000 | 35,240 | ||||||
S&T Bancorp, Inc. | 4,400 | 77,308 | ||||||
S.Y. Bancorp, Inc. | 2,370 | 55,885 | ||||||
Sandy Spring Bancorp, Inc. | 5,900 | 112,808 | ||||||
SCBT Financial Corp. | 3,000 | 119,040 | ||||||
Seacoast Banking Corp. of Florida * | 1,980 | 3,168 | ||||||
Shore Bancshares, Inc. | 1,250 | 7,062 | ||||||
Signature Bank * | 6,700 | 477,308 | ||||||
Simmons First National Corp., Class A | 4,000 | 99,560 | ||||||
Southside Bancshares, Inc. | 4,300 | 87,763 | ||||||
Southwest Bancorp, Inc. * | 5,300 | 57,187 | ||||||
State Bank Financial Corp. | 6,200 | 94,054 | ||||||
StellarOne Corp. | 6,000 | 82,320 | ||||||
Sterling Bancorp | 9,018 | 86,122 | ||||||
Sterling Financial Corp. | 5,000 | 106,300 | ||||||
Suffolk Bancorp * | 2,400 | 36,048 | ||||||
Sun Bancorp, Inc. * | 11,218 | 34,664 | ||||||
SunTrust Banks, Inc. | 76,842 | 2,090,102 | ||||||
Susquehanna Bancshares, Inc. | 23,468 | 243,363 | ||||||
SVB Financial Group * | 6,400 | 362,176 | ||||||
Synovus Financial Corp. | 110,700 | 271,215 | ||||||
TCF Financial Corp. | 22,900 | 261,976 | ||||||
Texas Capital Bancshares, Inc. * | 5,400 | 256,338 | ||||||
TFS Financial Corp. * | 19,500 | 174,525 | ||||||
The First of Long Island Corp. | 4,000 | 119,960 | ||||||
Timberland Bancorp, Inc. * | 2,000 | 12,400 | ||||||
Tompkins Financial Corp. | 4,024 | 162,892 | ||||||
Tree.com, Inc. * | 1,044 | 15,086 | ||||||
TriCo Bancshares | 1,900 | 31,920 | ||||||
TrustCo Bank Corp. | 14,857 | 82,902 | ||||||
Trustmark Corp. | 8,300 | 194,801 | ||||||
U.S. Bancorp | 270,431 | 8,981,014 | ||||||
UMB Financial Corp. | 5,274 | 234,851 | ||||||
Umpqua Holdings Corp. | 15,743 | 190,333 | ||||||
Union First Market Bankshares Corp. | 7,050 | 110,685 | ||||||
United Bankshares, Inc. | 7,400 | 176,342 | ||||||
United Community Banks, Inc. * | 11,678 | 101,599 | ||||||
Valley National Bancorp | 25,542 | 248,779 | ||||||
ViewPoint Financial Group, Inc. | 4,900 | 101,920 | ||||||
Washington Federal, Inc. | 14,942 | 250,727 | ||||||
Washington Trust Bancorp, Inc. | 3,600 | 97,164 | ||||||
Webster Financial Corp. | 8,663 | 190,586 | ||||||
Wells Fargo & Co. | 701,006 | 23,616,892 | ||||||
WesBanco, Inc. | 4,456 | 98,032 | ||||||
West Coast Bancorp | 3,916 | 86,230 | ||||||
Westamerica Bancorp | 5,200 | 229,424 | ||||||
Western Alliance Bancorp * | 9,500 | 97,470 | ||||||
Wintrust Financial Corp. | 5,800 | 214,310 | ||||||
WSFS Financial Corp. | 2,000 | 84,710 | ||||||
Zions Bancorp | 25,425 | 545,875 | ||||||
74,038,270 |
See financial notes 39
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 7.8% | ||||||||
3M Co. | 90,800 | 7,954,080 | ||||||
A.O. Smith Corp. | 4,950 | 300,811 | ||||||
AAON, Inc. | 4,569 | 95,858 | ||||||
AAR Corp. | 5,000 | 75,450 | ||||||
Aceto Corp. | 5,000 | 50,100 | ||||||
Actuant Corp., Class A | 10,280 | 290,307 | ||||||
Acuity Brands, Inc. | 6,000 | 388,200 | ||||||
AECOM Technology Corp. * | 16,100 | 345,667 | ||||||
Aegion Corp. * | 4,300 | 79,421 | ||||||
Aerosonic Corp. * | 300 | 981 | ||||||
Aerovironment, Inc. * | 2,900 | 63,771 | ||||||
AGCO Corp. * | 13,862 | 630,860 | ||||||
Air Lease Corp. * | 9,400 | 195,708 | ||||||
Aircastle Ltd. | 14,100 | 156,933 | ||||||
Alamo Group, Inc. | 2,500 | 83,750 | ||||||
Albany International Corp., Class A | 3,918 | 86,078 | ||||||
Alliant Techsystems, Inc. | 4,437 | 254,196 | ||||||
Altra Holdings, Inc. | 4,300 | 77,486 | ||||||
American Railcar Industries, Inc. * | 2,800 | 82,264 | ||||||
American Science & Engineering, Inc. | 2,000 | 127,160 | ||||||
American Superconductor Corp. (d)* | 5,200 | 18,668 | ||||||
American Woodmark Corp. * | 4,000 | 92,000 | ||||||
AMETEK, Inc. | 34,625 | 1,230,919 | ||||||
Ampco-Pittsburgh Corp. | 2,800 | 49,448 | ||||||
Apogee Enterprises, Inc. | 6,600 | 134,442 | ||||||
Applied Industrial Technologies, Inc. | 6,525 | 264,850 | ||||||
Armstrong World Industries, Inc. | 3,500 | 181,300 | ||||||
Astec Industries, Inc. * | 2,500 | 72,000 | ||||||
Astronics Corp. * | 3,438 | 79,796 | ||||||
Astronics Corp., Class B * | 516 | 11,784 | ||||||
AZZ, Inc. | 3,500 | 138,040 | ||||||
B/E Aerospace, Inc. * | 14,600 | 658,314 | ||||||
Barnes Group, Inc. | 6,600 | 151,008 | ||||||
Beacon Roofing Supply, Inc. * | 6,600 | 213,444 | ||||||
Belden, Inc. | 6,900 | 247,020 | ||||||
Blount International, Inc. * | 6,200 | 82,026 | ||||||
Brady Corp., Class A | 6,400 | 196,864 | ||||||
Breeze-Eastern Corp. * | 500 | 4,000 | ||||||
Briggs & Stratton Corp. | 6,500 | 128,375 | ||||||
Builders FirstSource, Inc. * | 17,100 | 94,221 | ||||||
Carlisle Cos., Inc. | 9,200 | 511,060 | ||||||
Cascade Corp. | 1,700 | 110,483 | ||||||
Caterpillar, Inc. | 93,200 | 7,904,292 | ||||||
Ceradyne, Inc. | 2,500 | 87,400 | ||||||
Chart Industries, Inc. * | 4,400 | 311,476 | ||||||
CIRCOR International, Inc. | 3,750 | 129,337 | ||||||
CLARCOR, Inc. | 6,400 | 289,536 | ||||||
Coleman Cable, Inc. | 1,500 | 14,235 | ||||||
Colfax Corp. * | 9,400 | 323,266 | ||||||
Columbus McKinnon Corp. * | 2,400 | 35,928 | ||||||
Comfort Systems USA, Inc. | 7,700 | 83,930 | ||||||
Cooper Industries plc | 22,300 | 1,671,162 | ||||||
Crane Co. | 8,000 | 335,840 | ||||||
Cubic Corp. | 2,000 | 97,600 | ||||||
Cummins, Inc. | 24,900 | 2,330,142 | ||||||
Curtiss-Wright Corp. | 6,600 | 203,742 | ||||||
Danaher Corp. | 83,300 | 4,309,109 | ||||||
Deere & Co. | 55,900 | 4,776,096 | ||||||
DigitalGlobe, Inc. * | 5,500 | 142,670 | ||||||
Donaldson Co., Inc. | 19,300 | 622,811 | ||||||
Dover Corp. | 26,100 | 1,519,542 | ||||||
Ducommun, Inc. * | 3,200 | 43,648 | ||||||
DXP Enterprises, Inc. * | 1,700 | 83,691 | ||||||
Dycom Industries, Inc. * | 5,300 | 75,472 | ||||||
Eaton Corp. | 47,500 | 2,242,950 | ||||||
EMCOR Group, Inc. | 9,400 | 302,304 | ||||||
Emerson Electric Co. | 103,700 | 5,022,191 | ||||||
Encore Wire Corp. | 2,500 | 77,150 | ||||||
EnerSys, Inc. * | 7,500 | 258,600 | ||||||
Engility Holdings, Inc. * | 2,516 | 47,804 | ||||||
EnPro Industries, Inc. * | 3,000 | 109,680 | ||||||
ESCO Technologies, Inc. | 2,800 | 104,832 | ||||||
Esterline Technologies Corp. * | 4,400 | 254,276 | ||||||
Exelis, Inc. | 23,400 | 258,804 | ||||||
Fastenal Co. | 37,900 | 1,694,130 | ||||||
Federal Signal Corp. * | 5,300 | 30,581 | ||||||
Flow International Corp. * | 900 | 2,988 | ||||||
Flowserve Corp. | 7,700 | 1,043,273 | ||||||
Fluor Corp. | 23,200 | 1,295,720 | ||||||
Fortune Brands Home & Security, Inc. * | 21,700 | 617,148 | ||||||
Foster Wheeler AG * | 15,200 | 338,504 | ||||||
Franklin Electric Co., Inc. | 2,800 | 162,232 | ||||||
FreightCar America, Inc. | 2,500 | 48,125 | ||||||
FuelCell Energy, Inc. * | 1,200 | 1,117 | ||||||
Furmanite Corp. * | 1,400 | 7,070 | ||||||
Gardner Denver, Inc. | 6,400 | 443,712 | ||||||
GATX Corp. | 6,600 | 273,636 | ||||||
GenCorp, Inc. * | 11,600 | 102,312 | ||||||
Generac Holdings, Inc. | 3,900 | 132,600 | ||||||
General Cable Corp. * | 6,700 | 191,151 | ||||||
General Dynamics Corp. | 47,300 | 3,220,184 | ||||||
General Electric Co. | 1,506,666 | 31,730,386 | ||||||
GeoEye, Inc. * | 6,000 | 188,220 | ||||||
Gibraltar Industries, Inc. * | 2,500 | 31,150 | ||||||
Graco, Inc. | 8,812 | 423,505 | ||||||
GrafTech International Ltd. * | 16,600 | 174,466 | ||||||
Granite Construction, Inc. | 4,850 | 146,518 | ||||||
Great Lakes Dredge & Dock Corp. | 11,600 | 92,220 | ||||||
Griffon Corp. | 15,100 | 153,265 | ||||||
H&E Equipment Services, Inc. | 4,900 | 74,578 | ||||||
Hardinge, Inc. | 4,800 | 49,824 | ||||||
Harsco Corp. | 11,300 | 225,887 | ||||||
HEICO Corp., Class A | 6,263 | 190,896 | ||||||
Hexcel Corp. * | 13,000 | 332,280 | ||||||
Honeywell International, Inc. | 111,362 | 6,819,809 | ||||||
Hubbell, Inc., Class B | 7,900 | 661,388 | ||||||
Huntington Ingalls Industries, Inc. * | 6,972 | 295,473 | ||||||
Hyster-Yale Materials Handling, Inc. * | 2,000 | 82,160 | ||||||
Hyster-Yale Materials Handling, Inc., Class B (a)(c)* | 1,300 | 53,404 | ||||||
IDEX Corp. | 11,725 | 498,664 | ||||||
II-VI, Inc. * | 7,600 | 125,476 | ||||||
Illinois Tool Works, Inc. | 61,500 | 3,771,795 | ||||||
Ingersoll-Rand plc | 41,500 | 1,951,745 | ||||||
Integrated Electrical Services, Inc. * | 5,105 | 27,567 | ||||||
ITT Corp. | 11,700 | 243,360 |
40 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Jacobs Engineering Group, Inc. * | 18,000 | 694,620 | ||||||
John Bean Technologies Corp. | 4,983 | 76,838 | ||||||
Joy Global, Inc. | 16,350 | 1,021,057 | ||||||
Kadant, Inc. * | 3,001 | 72,894 | ||||||
Kaman Corp. | 3,000 | 111,600 | ||||||
Kaydon Corp. | 3,300 | 73,788 | ||||||
KBR, Inc. | 21,000 | 585,060 | ||||||
Kennametal, Inc. | 11,300 | 400,246 | ||||||
Kratos Defense & Security Solutions, Inc. * | 3,180 | 17,522 | ||||||
L-3 Communications Holdings, Inc. | 13,600 | 1,003,680 | ||||||
Lawson Products, Inc. | 3,000 | 21,330 | ||||||
Layne Christensen Co. * | 3,200 | 71,328 | ||||||
Lennox International, Inc. | 6,771 | 338,889 | ||||||
Lincoln Electric Holdings, Inc. | 11,800 | 511,766 | ||||||
Lindsay Corp. | 1,800 | 137,466 | ||||||
Lockheed Martin Corp. | 38,452 | 3,601,799 | ||||||
Lydall, Inc. * | 5,500 | 71,005 | ||||||
Magnetek, Inc. * | 1,650 | 18,942 | ||||||
Masco Corp. | 50,700 | 765,063 | ||||||
MasTec, Inc. * | 8,550 | 192,888 | ||||||
Meritor, Inc. * | 9,900 | 43,758 | ||||||
Michael Baker Corp. * | 3,000 | 67,830 | ||||||
Middleby Corp. * | 2,600 | 324,870 | ||||||
Moog, Inc., Class A * | 5,787 | 214,177 | ||||||
MRC Global, Inc. * | 3,700 | 90,465 | ||||||
MSC Industrial Direct Co., Inc., Class A | 6,300 | 469,980 | ||||||
Mueller Industries, Inc. | 5,400 | 236,520 | ||||||
Mueller Water Products, Inc., Class A | 23,139 | 120,554 | ||||||
National Presto Industries, Inc. (d) | 1,200 | 89,220 | ||||||
Navistar International Corp. (d)* | 9,500 | 178,125 | ||||||
NCI Building Systems, Inc. * | 580 | 6,502 | ||||||
NN, Inc. * | 1,800 | 14,904 | ||||||
Nordson Corp. | 8,000 | 472,240 | ||||||
Nortek, Inc. * | 1,800 | 107,118 | ||||||
Northrop Grumman Corp. | 35,232 | 2,420,086 | ||||||
Omega Flex, Inc. * | 700 | 8,750 | ||||||
Orbital Sciences Corp. * | 7,600 | 101,840 | ||||||
Oshkosh Corp. * | 12,900 | 386,742 | ||||||
Owens Corning * | 16,700 | 560,953 | ||||||
PACCAR, Inc. | 49,625 | 2,150,747 | ||||||
Pall Corp. | 16,600 | 1,045,136 | ||||||
Parker Hannifin Corp. | 21,300 | 1,675,458 | ||||||
Pentair Ltd. | 29,528 | 1,247,263 | ||||||
Polypore International, Inc. (d)* | 6,100 | 215,208 | ||||||
Powell Industries, Inc. * | 2,800 | 111,384 | ||||||
Precision Castparts Corp. | 20,702 | 3,582,895 | ||||||
Primoris Services Corp. | 6,900 | 96,393 | ||||||
Proto Labs, Inc. * | 2,800 | 97,160 | ||||||
Quanex Building Products Corp. | 5,625 | 111,206 | ||||||
Quanta Services, Inc. * | 29,271 | 758,997 | ||||||
Raven Industries, Inc. | 5,600 | 152,824 | ||||||
Raytheon Co. | 47,400 | 2,680,944 | ||||||
RBC Bearings, Inc. * | 3,000 | 148,980 | ||||||
Regal-Beloit Corp. | 5,900 | 384,562 | ||||||
Rexnord Corp. (d)* | 9,300 | 168,516 | ||||||
Robbins & Myers, Inc. | 6,970 | 413,182 | ||||||
Rockwell Automation, Inc. | 20,200 | 1,435,412 | ||||||
Rockwell Collins, Inc. | 20,100 | 1,076,958 | ||||||
Roper Industries, Inc. | 13,700 | 1,495,629 | ||||||
Rush Enterprises, Inc., Class A * | 4,600 | 87,400 | ||||||
Sauer-Danfoss, Inc. | 2,800 | 112,168 | ||||||
Seaboard Corp. * | 100 | 228,133 | ||||||
Simpson Manufacturing Co., Inc. | 6,200 | 188,852 | ||||||
Snap-on, Inc. | 8,200 | 634,106 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 14,500 | 226,635 | ||||||
SPX Corp. | 7,110 | 487,675 | ||||||
Standex International Corp. | 3,000 | 138,720 | ||||||
Stanley Black & Decker, Inc. | 23,552 | 1,632,154 | ||||||
Sun Hydraulics Corp. | 3,000 | 79,920 | ||||||
TAL International Group, Inc. | 3,900 | 133,146 | ||||||
Taser International, Inc. * | 1,700 | 13,277 | ||||||
Tecumseh Products Co., Class A * | 3,200 | 16,096 | ||||||
Teledyne Technologies, Inc. * | 5,157 | 330,203 | ||||||
Tennant Co. | 4,200 | 157,164 | ||||||
Terex Corp. * | 14,400 | 324,720 | ||||||
Textainer Group Holdings Ltd. | 2,500 | 75,500 | ||||||
Textron, Inc. | 38,700 | 975,627 | ||||||
The Babcock & Wilcox Co. * | 15,500 | 399,435 | ||||||
The Boeing Co. | 96,500 | 6,797,460 | ||||||
The Gorman-Rupp Co. | 4,113 | 111,051 | ||||||
The Greenbrier Cos., Inc. * | 4,100 | 71,381 | ||||||
The Manitowoc Co., Inc. | 18,500 | 263,625 | ||||||
The Shaw Group, Inc. * | 9,300 | 407,247 | ||||||
The Timken Co. | 11,000 | 434,390 | ||||||
The Toro Co. | 8,200 | 346,204 | ||||||
Thermon Group Holdings, Inc. * | 3,500 | 86,940 | ||||||
Titan International, Inc. | 4,125 | 86,542 | ||||||
Titan Machinery, Inc. * | 2,400 | 56,760 | ||||||
TransDigm Group, Inc. | 6,600 | 879,186 | ||||||
Trex Co., Inc. * | 2,700 | 94,338 | ||||||
TriMas Corp. * | 4,700 | 117,876 | ||||||
Trinity Industries, Inc. | 13,650 | 426,972 | ||||||
Triumph Group, Inc. | 7,000 | 457,940 | ||||||
Tutor Perini Corp. * | 5,000 | 50,700 | ||||||
United Rentals, Inc. * | 13,100 | 532,646 | ||||||
United Technologies Corp. | 119,668 | 9,353,251 | ||||||
Universal Forest Products, Inc. | 2,500 | 96,250 | ||||||
URS Corp. | 10,700 | 358,236 | ||||||
USG Corp. * | 12,500 | 333,875 | ||||||
Valmont Industries, Inc. | 3,200 | 432,320 | ||||||
Vicor Corp. * | 4,200 | 26,796 | ||||||
W.W. Grainger, Inc. | 8,600 | 1,732,126 | ||||||
Wabash National Corp. * | 8,000 | 50,480 | ||||||
WABCO Holdings, Inc. * | 9,233 | 540,777 | ||||||
Wabtec Corp. | 6,628 | 542,833 | ||||||
Watsco, Inc. | 4,200 | 287,070 | ||||||
Watts Water Technologies, Inc., Class A | 4,000 | 160,920 | ||||||
WESCO International, Inc. * | 6,300 | 408,744 | ||||||
Woodward, Inc. | 8,000 | 268,000 | ||||||
Xylem, Inc. | 26,100 | 633,186 | ||||||
175,465,500 | ||||||||
Commercial & Professional Supplies 1.1% | ||||||||
A.T. Cross Co., Class A * | 2,900 | 27,463 | ||||||
ABM Industries, Inc. | 7,200 | 136,800 | ||||||
Acacia Research Corp. * | 6,200 | 161,014 | ||||||
Acco Brands Corp. * | 15,378 | 111,337 | ||||||
American Reprographics Co. * | 7,000 | 26,810 |
See financial notes 41
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
AMREP Corp. * | 2,500 | 16,250 | ||||||
Asset Acceptance Capital Corp. * | 2,500 | 15,950 | ||||||
ASTA Funding, Inc. | 6,000 | 56,280 | ||||||
Avery Dennison Corp. | 14,600 | 472,748 | ||||||
Casella Waste Systems, Inc., Class A * | 6,500 | 29,770 | ||||||
CDI Corp. | 3,700 | 63,603 | ||||||
Cenveo, Inc. * | 7,300 | 14,673 | ||||||
Cintas Corp. | 15,350 | 641,783 | ||||||
Clean Harbors, Inc. * | 6,500 | 379,275 | ||||||
Compx International, Inc. | 2,000 | 28,060 | ||||||
Consolidated Graphics, Inc. * | 3,900 | 115,089 | ||||||
Copart, Inc. * | 17,618 | 507,222 | ||||||
Corrections Corp. of America | 14,484 | 487,387 | ||||||
Covanta Holding Corp. | 18,900 | 343,602 | ||||||
CRA International, Inc. * | 2,500 | 41,850 | ||||||
Deluxe Corp. | 6,800 | 214,268 | ||||||
Encore Capital Group, Inc. * | 5,600 | 162,400 | ||||||
EnergySolutions, Inc. * | 10,500 | 30,030 | ||||||
Ennis, Inc. | 4,500 | 68,850 | ||||||
Equifax, Inc. | 16,895 | 845,426 | ||||||
Exponent, Inc. * | 1,900 | 104,462 | ||||||
FTI Consulting, Inc. * | 5,700 | 147,972 | ||||||
G&K Services, Inc., Class A | 4,100 | 132,225 | ||||||
GP Strategies Corp. * | 1,500 | 28,875 | ||||||
Healthcare Services Group, Inc. | 12,656 | 302,478 | ||||||
Heidrick & Struggles International, Inc. | 3,100 | 36,704 | ||||||
Herman Miller, Inc. | 8,700 | 168,693 | ||||||
HNI Corp. | 6,400 | 176,128 | ||||||
Hudson Global, Inc. * | 3,220 | 13,009 | ||||||
Huron Consulting Group, Inc. * | 3,000 | 86,550 | ||||||
ICF International, Inc. * | 2,800 | 51,380 | ||||||
IHS, Inc., Class A * | 7,800 | 658,242 | ||||||
InnerWorkings, Inc. * | 7,400 | 106,708 | ||||||
Insperity, Inc. | 6,800 | 177,548 | ||||||
Interface, Inc. | 5,800 | 82,998 | ||||||
Iron Mountain, Inc. | 23,180 | 802,028 | ||||||
KAR Auction Services, Inc. * | 11,300 | 226,000 | ||||||
Kelly Services, Inc., Class A | 5,700 | 75,753 | ||||||
Kforce, Inc. * | 4,905 | 54,691 | ||||||
Kimball International, Inc., Class B | 9,100 | 108,654 | ||||||
Knoll, Inc. | 7,000 | 100,730 | ||||||
Korn/Ferry International * | 6,600 | 88,374 | ||||||
Manpower, Inc. | 11,191 | 424,586 | ||||||
Mastech Holdings, Inc. * | 540 | 2,673 | ||||||
McGrath RentCorp | 4,600 | 120,796 | ||||||
Mine Safety Appliances Co. | 4,700 | 181,420 | ||||||
Mistras Group, Inc. * | 4,000 | 88,360 | ||||||
Mobile Mini, Inc. * | 6,200 | 108,004 | ||||||
Multi-Color Corp. | 4,625 | 105,080 | ||||||
Navigant Consulting, Inc. * | 14,000 | 145,460 | ||||||
Nielsen Holdings N.V. * | 17,300 | 500,316 | ||||||
NL Industries, Inc. | 7,800 | 79,326 | ||||||
On Assignment, Inc. * | 4,700 | 89,676 | ||||||
Performant Financial Corp. * | 7,700 | 75,999 | ||||||
Pitney Bowes, Inc. (d) | 28,200 | 404,952 | ||||||
Portfolio Recovery Associates, Inc. * | 2,400 | 251,160 | ||||||
Quad Graphics, Inc. (d) | 5,600 | 102,648 | ||||||
R.R. Donnelley & Sons Co. (d) | 23,500 | 235,470 | ||||||
Republic Services, Inc. | 42,445 | 1,203,316 | ||||||
Resources Connection, Inc. | 11,300 | 139,442 | ||||||
Robert Half International, Inc. | 19,700 | 529,733 | ||||||
Rollins, Inc. | 9,218 | 208,972 | ||||||
RPX Corp. * | 7,400 | 77,922 | ||||||
Steelcase, Inc., Class A | 11,500 | 115,115 | ||||||
Stericycle, Inc. * | 11,900 | 1,127,644 | ||||||
Sykes Enterprises, Inc. * | 11,026 | 150,174 | ||||||
Team, Inc. * | 3,000 | 98,340 | ||||||
Tetra Tech, Inc. * | 12,031 | 312,084 | ||||||
The ADT Corp. * | 32,566 | 1,351,815 | ||||||
The Advisory Board Co. * | 4,600 | 218,500 | ||||||
The Brink’s Co. | 5,600 | 147,336 | ||||||
The Corporate Executive Board Co. | 4,700 | 211,312 | ||||||
The Dun & Bradstreet Corp. | 6,940 | 562,417 | ||||||
The Geo Group, Inc. | 8,680 | 240,610 | ||||||
The Standard Register Co. | 4,100 | 2,624 | ||||||
Towers Watson & Co., Class A | 8,100 | 435,051 | ||||||
TRC Cos., Inc. * | 3,350 | 24,153 | ||||||
TrueBlue, Inc. * | 6,000 | 78,300 | ||||||
Tyco International Ltd. | 65,133 | 1,750,124 | ||||||
UniFirst Corp. | 2,100 | 146,097 | ||||||
United Stationers, Inc. | 5,800 | 168,316 | ||||||
Verisk Analytics, Inc., Class A * | 20,600 | 1,050,600 | ||||||
Viad Corp. | 3,625 | 76,886 | ||||||
Virco Mfg. Corp. * | 1,170 | 2,820 | ||||||
WageWorks, Inc. * | 5,000 | 96,950 | ||||||
Waste Connections, Inc. | 16,712 | 548,655 | ||||||
Waste Management, Inc. | 61,300 | 2,006,962 | ||||||
24,726,338 | ||||||||
Consumer Durables & Apparel 1.5% | ||||||||
American Greetings Corp., Class A (d) | 8,500 | 145,945 | ||||||
Arctic Cat, Inc. * | 2,400 | 87,048 | ||||||
Blyth, Inc. (d) | 3,400 | 77,656 | ||||||
Brunswick Corp. | 11,900 | 280,721 | ||||||
Callaway Golf Co. | 12,800 | 69,888 | ||||||
Carter’s, Inc. * | 8,000 | 432,480 | ||||||
Cavco Industries, Inc. * | 1,010 | 48,824 | ||||||
Coach, Inc. | 40,108 | 2,248,054 | ||||||
Columbia Sportswear Co. | 1,750 | 98,700 | ||||||
Crocs, Inc. * | 15,000 | 189,000 | ||||||
CSS Industries, Inc. | 3,400 | 68,340 | ||||||
D.R. Horton, Inc. | 38,504 | 807,044 | ||||||
Deckers Outdoor Corp. (d)* | 5,200 | 148,876 | ||||||
DGSE Cos., Inc. (a)(c)(d)* | 700 | 1,300 | ||||||
Ethan Allen Interiors, Inc. | 4,200 | 123,522 | ||||||
Fifth & Pacific Cos., Inc. * | 15,900 | 174,582 | ||||||
Flexsteel Industries, Inc. | 600 | 12,078 | ||||||
Foamex International, Inc. (a)(c)* | 2,278 | — | ||||||
Fossil, Inc. * | 7,662 | 667,360 | ||||||
Furniture Brands International, Inc. * | 4,700 | 7,144 | ||||||
G-III Apparel Group Ltd. * | 2,800 | 103,488 | ||||||
Garmin Ltd. (d) | 17,400 | 661,026 | ||||||
Hanesbrands, Inc. * | 13,847 | 463,459 | ||||||
Harman International Industries, Inc. | 8,800 | 368,984 | ||||||
Hasbro, Inc. | 16,500 | 593,835 | ||||||
Helen of Troy Ltd. * | 5,000 | 151,100 |
42 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hovnanian Enterprises, Inc., Class A (d)* | 10,000 | 43,000 | ||||||
Iconix Brand Group, Inc. * | 9,600 | 177,696 | ||||||
iRobot Corp. * | 7,300 | 131,181 | ||||||
JAKKS Pacific, Inc. | 5,100 | 65,841 | ||||||
Jarden Corp. | 11,359 | 565,678 | ||||||
K-Swiss, Inc., Class A * | 2,400 | 5,472 | ||||||
KB Home (d) | 10,900 | 174,182 | ||||||
Kid Brands, Inc. * | 3,000 | 5,430 | ||||||
La-Z-Boy, Inc. * | 7,500 | 121,650 | ||||||
LeapFrog Enterprises, Inc. * | 9,000 | 79,560 | ||||||
Leggett & Platt, Inc. | 19,200 | 509,376 | ||||||
Lennar Corp., Class A | 22,690 | 850,194 | ||||||
M.D.C. Holdings, Inc. | 5,503 | 210,435 | ||||||
M/I Homes, Inc. * | 3,000 | 66,750 | ||||||
Maidenform Brands, Inc. * | 5,000 | 93,550 | ||||||
Marine Products Corp. | 405 | 2,402 | ||||||
Mattel, Inc. | 48,600 | 1,787,508 | ||||||
Meritage Homes Corp. * | 3,900 | 144,222 | ||||||
Michael Kors Holdings Ltd. * | 16,100 | 880,509 | ||||||
Mohawk Industries, Inc. * | 8,319 | 694,387 | ||||||
Movado Group, Inc. | 2,500 | 79,225 | ||||||
NACCO Industries, Inc., Class A | 1,900 | 96,216 | ||||||
Nautilus, Inc. * | 4,125 | 11,591 | ||||||
Newell Rubbermaid, Inc. | 40,800 | 842,112 | ||||||
NIKE, Inc., Class B | 52,300 | 4,779,174 | ||||||
NVR, Inc. * | 700 | 632,618 | ||||||
Oxford Industries, Inc. | 2,500 | 138,700 | ||||||
Perry Ellis International, Inc. * | 5,500 | 113,520 | ||||||
Polaris Industries, Inc. | 9,100 | 768,950 | ||||||
PulteGroup, Inc. * | 46,776 | 811,096 | ||||||
PVH Corp. | 9,900 | 1,088,901 | ||||||
Quiksilver, Inc. * | 25,900 | 82,880 | ||||||
Ralph Lauren Corp. | 8,700 | 1,337,103 | ||||||
Skechers U.S.A., Inc., Class A * | 6,500 | 107,900 | ||||||
Skyline Corp. * | 2,600 | 11,960 | ||||||
Smith & Wesson Holding Corp. * | 8,800 | 84,480 | ||||||
Standard Pacific Corp. * | 15,600 | 107,640 | ||||||
Stanley Furniture Co., Inc. * | 6,875 | 31,969 | ||||||
Steven Madden Ltd. * | 6,075 | 260,739 | ||||||
Sturm, Ruger & Co., Inc. (d) | 2,700 | 127,521 | ||||||
Superior Uniform Group, Inc. | 1,600 | 18,768 | ||||||
Tandy Brands Accessories, Inc. * | 1,000 | 1,510 | ||||||
Tempur-Pedic International, Inc. * | 8,000 | 211,520 | ||||||
The Jones Group, Inc. | 12,156 | 143,562 | ||||||
The Ryland Group, Inc. | 6,700 | 226,929 | ||||||
The Warnaco Group, Inc. * | 5,500 | 388,190 | ||||||
Toll Brothers, Inc. * | 20,900 | 689,909 | ||||||
True Religion Apparel, Inc. | 3,000 | 76,950 | ||||||
Tumi Holdings, Inc. * | 4,500 | 100,800 | ||||||
Tupperware Brands Corp. | 7,800 | 460,980 | ||||||
Under Armour, Inc., Class A * | 10,900 | 569,634 | ||||||
Universal Electronics, Inc. * | 5,200 | 89,232 | ||||||
Vera Bradley, Inc. (d)* | 3,000 | 89,430 | ||||||
VF Corp. | 12,700 | 1,987,296 | ||||||
Whirlpool Corp. | 10,749 | 1,049,962 | ||||||
Wolverine World Wide, Inc. | 7,800 | 326,586 | ||||||
32,585,030 | ||||||||
Consumer Services 2.1% | ||||||||
AFC Enterprises, Inc. * | 3,900 | 98,748 | ||||||
Ambassadors Group, Inc. | 3,400 | 17,408 | ||||||
American Public Education, Inc. * | 2,500 | 91,075 | ||||||
Ameristar Casinos, Inc. | 6,400 | 116,800 | ||||||
Apollo Group, Inc., Class A * | 14,550 | 292,164 | ||||||
Ascent Capital Group, Inc., Class A * | 3,116 | 185,246 | ||||||
Bally Technologies, Inc. * | 5,900 | 294,528 | ||||||
Biglari Holdings, Inc. * | 279 | 98,657 | ||||||
BJ’s Restaurants, Inc. * | 3,000 | 99,150 | ||||||
Bloomin’ Brands, Inc. * | 6,000 | 82,020 | ||||||
Bob Evans Farms, Inc. | 4,200 | 159,894 | ||||||
Boyd Gaming Corp. * | 12,300 | 75,891 | ||||||
Brinker International, Inc. | 12,350 | 380,380 | ||||||
Buffalo Wild Wings, Inc. * | 3,000 | 227,850 | ||||||
Burger King Worldwide, Inc. * | 12,200 | 181,292 | ||||||
Career Education Corp. * | 16,214 | 55,128 | ||||||
Carnival Corp. | 63,000 | 2,386,440 | ||||||
CEC Entertainment, Inc. | 2,925 | 90,675 | ||||||
Chipotle Mexican Grill, Inc. * | 4,600 | 1,170,838 | ||||||
Choice Hotels International, Inc. | 3,800 | 118,902 | ||||||
Churchill Downs, Inc. | 2,900 | 189,457 | ||||||
Coinstar, Inc. (d)* | 5,000 | 234,700 | ||||||
Corinthian Colleges, Inc. * | 9,200 | 25,116 | ||||||
Cracker Barrel Old Country Store, Inc. | 3,446 | 219,338 | ||||||
Darden Restaurants, Inc. | 17,900 | 941,898 | ||||||
DeVry, Inc. | 7,800 | 204,828 | ||||||
DineEquity, Inc. * | 3,000 | 188,100 | ||||||
Domino’s Pizza, Inc. | 8,100 | 329,022 | ||||||
Dover Downs Gaming & Entertainment, Inc. | 5,899 | 14,040 | ||||||
Dover Motorsports, Inc. * | 1,400 | 2,072 | ||||||
Dunkin’ Brands Group, Inc. | 10,200 | 316,200 | ||||||
Education Management Corp. (d)* | 12,500 | 39,750 | ||||||
Grand Canyon Education, Inc. * | 5,000 | 108,800 | ||||||
H&R Block, Inc. | 41,000 | 725,700 | ||||||
Hillenbrand, Inc. | 8,800 | 180,136 | ||||||
Hyatt Hotels Corp., Class A * | 7,900 | 288,350 | ||||||
International Game Technology | 38,100 | 489,204 | ||||||
International Speedway Corp., Class A | 3,245 | 82,748 | ||||||
Interval Leisure Group, Inc. | 6,269 | 119,487 | ||||||
Isle of Capri Casinos, Inc. * | 7,400 | 44,992 | ||||||
ITT Educational Services, Inc. (d)* | 5,600 | 120,344 | ||||||
Jack In The Box, Inc. * | 8,400 | 218,484 | ||||||
K12, Inc. * | 4,900 | 100,303 | ||||||
Krispy Kreme Doughnuts, Inc. * | 14,100 | 104,763 | ||||||
Lakes Entertainment, Inc. * | 6,800 | 16,252 | ||||||
Las Vegas Sands Corp. | 49,800 | 2,312,712 | ||||||
Learning Tree International, Inc. * | 1,400 | 8,064 | ||||||
LIFE TIME FITNESS, Inc. * | 5,500 | 246,895 | ||||||
Luby’s, Inc. * | 2,400 | 15,336 | ||||||
Marriott International, Inc., Class A | 35,408 | 1,291,684 | ||||||
Marriott Vacations Worldwide Corp. * | 4,080 | 160,507 | ||||||
Matthews International Corp., Class A | 2,900 | 83,433 | ||||||
McDonald’s Corp. | 143,909 | 12,491,301 | ||||||
MGM Resorts International * | 52,300 | 539,213 | ||||||
Monarch Casino & Resort, Inc. * | 8,000 | 72,960 | ||||||
MTR Gaming Group, Inc. * | 5,800 | 20,242 |
See financial notes 43
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Multimedia Games Holding Co., Inc. * | 5,500 | 87,450 | ||||||
Orient-Express Hotels Ltd., Class A * | 12,600 | 147,798 | ||||||
Panera Bread Co., Class A * | 4,200 | 708,288 | ||||||
Papa John’s International, Inc. * | 3,400 | 181,288 | ||||||
Penn National Gaming, Inc. * | 9,800 | 396,214 | ||||||
Pinnacle Entertainment, Inc. * | 6,800 | 86,768 | ||||||
Regis Corp. | 6,900 | 114,954 | ||||||
Royal Caribbean Cruises Ltd. | 19,500 | 656,565 | ||||||
Ruby Tuesday, Inc. * | 9,400 | 67,868 | ||||||
Ryman Hospitality Properties * | 6,925 | 270,144 | ||||||
School Specialty, Inc. (d)* | 2,600 | 4,810 | ||||||
Scientific Games Corp., Class A * | 9,500 | 78,185 | ||||||
Service Corp. International | 30,100 | 422,604 | ||||||
SHFL Entertainment, Inc. * | 8,012 | 113,210 | ||||||
Six Flags Entertainment Corp. | 7,800 | 445,458 | ||||||
Sonic Corp. * | 7,968 | 79,441 | ||||||
Sotheby’s | 8,438 | 262,675 | ||||||
Speedway Motorsports, Inc. | 4,800 | 78,240 | ||||||
Starbucks Corp. | 108,400 | 4,975,560 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 27,530 | 1,427,430 | ||||||
Steiner Leisure Ltd. * | 3,000 | 131,760 | ||||||
Stewart Enterprises, Inc., Class A | 10,000 | 77,700 | ||||||
Strayer Education, Inc. (d) | 1,700 | 97,682 | ||||||
Texas Roadhouse, Inc. | 8,300 | 135,124 | ||||||
The Cheesecake Factory, Inc. | 7,087 | 234,296 | ||||||
The Wendy’s Co. | 50,775 | 216,809 | ||||||
Vail Resorts, Inc. | 5,300 | 300,934 | ||||||
Weight Watchers International, Inc. (d) | 3,800 | 190,950 | ||||||
WMS Industries, Inc. * | 8,250 | 135,547 | ||||||
Wyndham Worldwide Corp. | 20,044 | 1,010,218 | ||||||
Wynn Resorts Ltd. | 11,200 | 1,355,872 | ||||||
Yum! Brands, Inc. | 64,900 | 4,550,139 | ||||||
47,811,498 | ||||||||
Diversified Financials 5.4% | ||||||||
Affiliated Managers Group, Inc. * | 7,200 | 910,800 | ||||||
American Express Co. | 140,750 | 7,877,777 | ||||||
Ameriprise Financial, Inc. | 30,930 | 1,805,384 | ||||||
Bank of America Corp. | 1,537,856 | 14,332,818 | ||||||
BGC Partners, Inc., Class A | 28,300 | 132,444 | ||||||
BlackRock, Inc. | 18,300 | 3,471,144 | ||||||
Calamos Asset Management, Inc., Class A | 5,000 | 54,000 | ||||||
Capital One Financial Corp. | 82,810 | 4,982,678 | ||||||
Cash America International, Inc. | 4,100 | 160,269 | ||||||
CBOE Holdings, Inc. | 11,800 | 347,982 | ||||||
Citigroup, Inc. | 418,428 | 15,645,023 | ||||||
CME Group, Inc. | 44,250 | 2,474,902 | ||||||
Cohen & Steers, Inc. (d) | 5,400 | 151,146 | ||||||
CompuCredit Holdings Corp. (d)* | 4,629 | 17,729 | ||||||
Cowen Group, Inc., Class A * | 11,889 | 30,198 | ||||||
Credit Acceptance Corp. * | 1,300 | 106,145 | ||||||
DFC Global Corp. * | 9,750 | 164,287 | ||||||
Discover Financial Services | 73,350 | 3,007,350 | ||||||
Duff & Phelps Corp., Class A | 12,500 | 155,375 | ||||||
E*TRADE Financial Corp. * | 32,433 | 271,140 | ||||||
Eaton Vance Corp. | 16,600 | 467,124 | ||||||
Epoch Holding Corp. | 4,800 | 105,216 | ||||||
Evercore Partners, Inc., Class A | 6,500 | 181,350 | ||||||
Ezcorp, Inc., Class A * | 8,500 | 167,110 | ||||||
FBR & Co. * | 4,000 | 11,920 | ||||||
Federated Investors, Inc., Class B | 14,650 | 340,466 | ||||||
Financial Engines, Inc. * | 5,700 | 136,857 | ||||||
First Cash Financial Services, Inc. * | 3,000 | 133,980 | ||||||
Franklin Resources, Inc. | 19,500 | 2,492,100 | ||||||
GAMCO Investors, Inc., Class A | 3,200 | 156,800 | ||||||
GFI Group, Inc. | 18,700 | 59,092 | ||||||
Greenhill & Co., Inc. | 4,500 | 214,740 | ||||||
HFF, Inc., Class A * | 5,900 | 82,187 | ||||||
ICG Group, Inc. * | 8,050 | 84,364 | ||||||
Interactive Brokers Group, Inc., Class A | 5,400 | 76,950 | ||||||
IntercontinentalExchange, Inc. * | 10,300 | 1,349,300 | ||||||
INTL FCStone, Inc. * | 4,437 | 82,218 | ||||||
Invesco Ltd. | 63,000 | 1,532,160 | ||||||
Investment Technology Group, Inc. * | 8,050 | 67,942 | ||||||
Janus Capital Group, Inc. | 26,200 | 222,700 | ||||||
Jefferies Group, Inc. | 18,200 | 259,168 | ||||||
JPMorgan Chase & Co. | 542,044 | 22,592,394 | ||||||
KBW, Inc. | 6,000 | 97,500 | ||||||
Knight Capital Group, Inc., Class A * | 9,700 | 25,511 | ||||||
Legg Mason, Inc. | 19,050 | 485,394 | ||||||
Leucadia National Corp. | 27,408 | 622,162 | ||||||
LPL Financial Holdings, Inc. | 7,700 | 224,840 | ||||||
MarketAxess Holdings, Inc. | 5,300 | 165,572 | ||||||
MicroFinancial, Inc. | 1,900 | 14,972 | ||||||
Moody’s Corp. | 27,600 | 1,329,216 | ||||||
Morgan Stanley | 197,300 | 3,429,074 | ||||||
MSCI, Inc. * | 17,000 | 457,980 | ||||||
Netspend Holdings, Inc. * | 11,800 | 126,378 | ||||||
NewStar Financial, Inc. * | 13,500 | 168,750 | ||||||
Northern Trust Corp. | 30,500 | 1,457,290 | ||||||
NYSE Euronext | 35,400 | 876,504 | ||||||
PHH Corp. * | 7,186 | 149,541 | ||||||
PICO Holdings, Inc. * | 3,700 | 81,918 | ||||||
Piper Jaffray Cos., Inc. * | 3,950 | 106,058 | ||||||
Raymond James Financial, Inc. | 15,850 | 604,519 | ||||||
Resource America, Inc., Class A | 4,000 | 27,040 | ||||||
SEI Investments Co. | 19,400 | 424,472 | ||||||
SLM Corp. | 68,300 | 1,200,714 | ||||||
State Street Corp. | 68,183 | 3,038,916 | ||||||
Stifel Financial Corp. * | 7,400 | 234,580 | ||||||
SWS Group, Inc. * | 8,211 | 46,721 | ||||||
T. Rowe Price Group, Inc. | 35,700 | 2,318,358 | ||||||
TD Ameritrade Holding Corp. | 32,300 | 506,787 | ||||||
The Bank of New York Mellon Corp. | 168,434 | 4,162,004 | ||||||
The Charles Schwab Corp. (b) | 154,226 | 2,094,389 | ||||||
The First Marblehead Corp. * | 7,500 | 7,050 | ||||||
The Goldman Sachs Group, Inc. | 64,300 | 7,869,677 | ||||||
The NASDAQ OMX Group, Inc. | 17,100 | 407,151 | ||||||
Virtus Investment Partners, Inc. * | 1,775 | 170,400 | ||||||
Waddell & Reed Financial, Inc., Class A | 12,250 | 408,292 | ||||||
Walter Investment Management Corp. * | 5,325 | 257,357 |
44 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Westwood Holdings Group, Inc. | 4,285 | 166,344 | ||||||
WisdomTree Investments, Inc. * | 12,000 | 76,920 | ||||||
World Acceptance Corp. * | 1,800 | 120,168 | ||||||
120,875,248 | ||||||||
Energy 10.2% | ||||||||
Abraxas Petroleum Corp. * | 8,500 | 17,595 | ||||||
Adams Resources & Energy, Inc. | 1,400 | 42,588 | ||||||
Alon USA Energy, Inc. | 8,700 | 114,231 | ||||||
Alpha Natural Resources, Inc. * | 29,330 | 251,358 | ||||||
Anadarko Petroleum Corp. | 71,260 | 4,903,401 | ||||||
Apache Corp. | 55,872 | 4,623,408 | ||||||
Apco Oil & Gas International, Inc. | 1,800 | 22,878 | ||||||
Approach Resources, Inc. * | 4,000 | 98,520 | ||||||
Arch Coal, Inc. | 26,500 | 210,940 | ||||||
Atwood Oceanics, Inc. * | 8,000 | 382,400 | ||||||
Baker Hughes, Inc. | 61,850 | 2,595,845 | ||||||
Basic Energy Services, Inc. * | 6,000 | 62,340 | ||||||
Berry Petroleum Co., Class A | 6,600 | 254,166 | ||||||
Bill Barrett Corp. * | 6,700 | 153,497 | ||||||
Bonanza Creek Energy, Inc. * | 3,800 | 94,126 | ||||||
Bristow Group, Inc. | 5,000 | 249,600 | ||||||
C&J Energy Services, Inc. (d)* | 5,500 | 106,590 | ||||||
Cabot Oil & Gas Corp. | 30,000 | 1,409,400 | ||||||
Cal Dive International, Inc. * | 9,000 | 11,340 | ||||||
Callon Petroleum Co. * | 12,000 | 68,640 | ||||||
Cameron International Corp. * | 35,147 | 1,779,844 | ||||||
CARBO Ceramics, Inc. (d) | 2,700 | 199,665 | ||||||
Carrizo Oil & Gas, Inc. * | 5,100 | 136,782 | ||||||
Cheniere Energy, Inc. * | 29,800 | 479,482 | ||||||
Chesapeake Energy Corp. | 73,100 | 1,481,006 | ||||||
Chevron Corp. | 279,939 | 30,852,077 | ||||||
Cimarex Energy Co. | 12,108 | 692,335 | ||||||
Clayton Williams Energy, Inc. * | 2,500 | 105,875 | ||||||
Clean Energy Fuels Corp. (d)* | 9,200 | 105,340 | ||||||
Cloud Peak Energy, Inc. * | 8,700 | 183,570 | ||||||
Cobalt International Energy, Inc. * | 26,500 | 551,465 | ||||||
Comstock Resources, Inc. * | 4,500 | 77,040 | ||||||
Concho Resources, Inc. * | 14,600 | 1,257,352 | ||||||
ConocoPhillips | 173,323 | 10,026,735 | ||||||
CONSOL Energy, Inc. | 32,500 | 1,142,700 | ||||||
Contango Oil & Gas Co. * | 2,000 | 98,320 | ||||||
Continental Resources, Inc. * | 7,900 | 567,694 | ||||||
Crosstex Energy, Inc. | 6,200 | 84,816 | ||||||
CVR Energy, Inc. * | 2,500 | 91,875 | ||||||
Delek US Holdings, Inc. | 3,400 | 87,550 | ||||||
Denbury Resources, Inc. * | 54,325 | 832,802 | ||||||
Devon Energy Corp. | 53,760 | 3,129,370 | ||||||
Diamond Offshore Drilling, Inc. | 9,900 | 685,476 | ||||||
Dresser-Rand Group, Inc. * | 10,600 | 546,218 | ||||||
Dril-Quip, Inc. * | 6,100 | 422,486 | ||||||
Energen Corp. | 10,200 | 475,830 | ||||||
ENGlobal Corp. * | 4,000 | 1,641 | ||||||
Ensco plc, Class A | 32,700 | 1,890,714 | ||||||
EOG Resources, Inc. | 38,500 | 4,484,865 | ||||||
EPL Oil & Gas, Inc. * | 4,900 | 106,036 | ||||||
EQT Corp. | 20,800 | 1,261,104 | ||||||
EXCO Resources, Inc. (d) | 22,000 | 178,200 | ||||||
Exterran Holdings, Inc. * | 10,720 | 214,186 | ||||||
Exxon Mobil Corp. | 658,634 | 60,047,662 | ||||||
FMC Technologies, Inc. * | 34,064 | 1,393,218 | ||||||
Forest Oil Corp. * | 12,450 | 94,371 | ||||||
Forum Energy Technologies, Inc. * | 6,800 | 151,708 | ||||||
Geospace Technologies Corp. * | 1,800 | 116,514 | ||||||
Goodrich Petroleum Corp. (d)* | 3,500 | 43,155 | ||||||
Gulf Island Fabrication, Inc. | 2,800 | 66,444 | ||||||
GulfMark Offshore, Inc., Class A * | 4,100 | 132,512 | ||||||
Gulfport Energy Corp. * | 7,000 | 232,260 | ||||||
Halcon Resources Corp. * | 22,300 | 144,281 | ||||||
Halliburton Co. | 132,600 | 4,281,654 | ||||||
Harvest Natural Resources, Inc. * | 6,000 | 52,380 | ||||||
Helix Energy Solutions Group, Inc. * | 14,064 | 243,166 | ||||||
Helmerich & Payne, Inc. | 14,900 | 712,220 | ||||||
Hercules Offshore, Inc. * | 22,900 | 109,004 | ||||||
Hess Corp. | 42,800 | 2,236,728 | ||||||
HollyFrontier Corp. | 29,854 | 1,153,260 | ||||||
Hornbeck Offshore Services, Inc. * | 5,000 | 173,200 | ||||||
Houston American Energy Corp. * | 4,000 | 2,560 | ||||||
ION Geophysical Corp. * | 13,900 | 89,794 | ||||||
James River Coal Co. (d)* | 5,500 | 27,555 | ||||||
Key Energy Services, Inc. * | 22,300 | 145,842 | ||||||
Kinder Morgan, Inc. | 89,315 | 3,100,124 | ||||||
KiOR, Inc., Class A (d)* | 10,900 | 71,940 | ||||||
Kodiak Oil & Gas Corp. * | 37,100 | 342,804 | ||||||
Laredo Petroleum Holdings, Inc. * | 4,800 | 97,392 | ||||||
Lufkin Industries, Inc. | 4,700 | 235,047 | ||||||
Magnum Hunter Resources Corp. * | 15,839 | 60,505 | ||||||
Marathon Oil Corp. | 100,108 | 3,009,246 | ||||||
Marathon Petroleum Corp. | 48,004 | 2,636,860 | ||||||
Matador Resources Co. * | 8,600 | 75,938 | ||||||
Matrix Service Co. * | 8,000 | 83,920 | ||||||
McDermott International, Inc. * | 32,400 | 347,004 | ||||||
McMoRan Exploration Co. (d)* | 14,100 | 168,213 | ||||||
Midstates Petroleum Co, Inc. * | 10,300 | 63,551 | ||||||
Murphy Oil Corp. | 26,800 | 1,608,000 | ||||||
Nabors Industries Ltd. * | 40,834 | 550,851 | ||||||
National Oilwell Varco, Inc. | 60,922 | 4,489,951 | ||||||
Natural Gas Services Group, Inc. * | 7,500 | 118,950 | ||||||
Newfield Exploration Co. * | 18,800 | 509,856 | ||||||
Newpark Resources, Inc. * | 11,500 | 78,085 | ||||||
Noble Corp. | 36,500 | 1,377,510 | ||||||
Noble Energy, Inc. | 25,418 | 2,414,964 | ||||||
Northern Oil & Gas, Inc. * | 8,200 | 124,312 | ||||||
Oasis Petroleum, Inc. * | 9,900 | 290,763 | ||||||
Occidental Petroleum Corp. | 115,620 | 9,129,355 | ||||||
Oceaneering International, Inc. | 15,000 | 784,950 | ||||||
Oil States International, Inc. * | 7,700 | 562,870 | ||||||
Overseas Shipholding Group, Inc. (d) | 3,700 | 4,144 | ||||||
Panhandle Oil & Gas, Inc., Class A | 2,000 | 54,160 | ||||||
Parker Drilling Co. * | 18,300 | 79,239 | ||||||
Patterson-UTI Energy, Inc. | 21,500 | 347,870 | ||||||
PDC Energy, Inc. * | 4,000 | 121,080 | ||||||
Peabody Energy Corp. | 37,500 | 1,046,250 | ||||||
Penn Virginia Corp. | 5,000 | 22,600 | ||||||
PetroQuest Energy, Inc. * | 7,200 | 43,920 | ||||||
PHI, Inc. - Non Voting Shares * | 4,000 | 125,160 | ||||||
Phillips 66 | 89,461 | 4,218,981 | ||||||
Pioneer Energy Services Corp. * | 9,200 | 60,720 | ||||||
Pioneer Natural Resources Co. | 17,533 | 1,852,361 |
See financial notes 45
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Plains Exploration & Production Co. * | 18,765 | 669,160 | ||||||
QEP Resources, Inc. | 24,500 | 710,500 | ||||||
Quicksilver Resources, Inc. * | 14,900 | 57,663 | ||||||
Range Resources Corp. | 23,200 | 1,516,352 | ||||||
Rentech, Inc. * | 37,400 | 96,492 | ||||||
Resolute Energy Corp. * | 5,000 | 44,400 | ||||||
REX American Resources Corp. * | 4,875 | 85,849 | ||||||
Rex Energy Corp. * | 8,000 | 105,920 | ||||||
Rosetta Resources, Inc. * | 7,500 | 345,300 | ||||||
Rowan Cos. plc, Class A * | 17,500 | 554,925 | ||||||
RPC, Inc. | 9,318 | 106,784 | ||||||
Sanchez Energy Corp. * | 4,500 | 81,270 | ||||||
SandRidge Energy, Inc. * | 49,331 | 306,839 | ||||||
Schlumberger Ltd. | 189,360 | 13,166,201 | ||||||
SEACOR Holdings, Inc. * | 2,850 | 249,973 | ||||||
SemGroup Corp., Class A * | 6,000 | 231,840 | ||||||
SM Energy Co. | 9,200 | 496,064 | ||||||
Solazyme, Inc. (d)* | 4,700 | 38,070 | ||||||
Southwestern Energy Co. * | 49,700 | 1,724,590 | ||||||
Spectra Energy Corp. | 91,878 | 2,652,518 | ||||||
Stone Energy Corp. * | 7,383 | 174,165 | ||||||
Superior Energy Services, Inc. * | 22,399 | 455,372 | ||||||
Swift Energy Co. * | 5,500 | 91,905 | ||||||
Targa Resources Corp. | 4,000 | 203,720 | ||||||
Teekay Corp. | 6,000 | 183,660 | ||||||
Tesoro Corp. | 19,400 | 731,574 | ||||||
TETRA Technologies, Inc. * | 8,300 | 44,405 | ||||||
The Williams Cos., Inc. | 89,760 | 3,140,702 | ||||||
Tidewater, Inc. | 7,700 | 365,827 | ||||||
Transocean Ltd. | 50,600 | 2,311,914 | ||||||
Ultra Petroleum Corp. (d)* | 21,500 | 490,415 | ||||||
Union Drilling, Inc. * | 2,500 | 16,225 | ||||||
Unit Corp. * | 7,400 | 298,590 | ||||||
USEC, Inc. (d)* | 14,300 | 9,660 | ||||||
VAALCO Energy, Inc. * | 9,000 | 73,530 | ||||||
Valero Energy Corp. | 78,680 | 2,289,588 | ||||||
Verenium Corp. (d)* | 91 | 224 | ||||||
W&T Offshore, Inc. | 7,500 | 127,125 | ||||||
Warren Resources, Inc. * | 12,000 | 34,200 | ||||||
Weatherford International Ltd. * | 108,400 | 1,224,920 | ||||||
Western Refining, Inc. | 7,700 | 191,499 | ||||||
Westmoreland Coal Co. * | 6,500 | 66,820 | ||||||
Whiting Petroleum Corp. * | 16,400 | 689,128 | ||||||
World Fuel Services Corp. | 10,200 | 353,940 | ||||||
WPX Energy, Inc. * | 28,053 | 475,218 | ||||||
229,147,284 | ||||||||
Food & Staples Retailing 2.1% | ||||||||
Arden Group, Inc., Class A | 600 | 59,070 | ||||||
Casey’s General Stores, Inc. | 5,100 | 262,905 | ||||||
Costco Wholesale Corp. | 61,700 | 6,073,131 | ||||||
CVS Caremark Corp. | 181,590 | 8,425,776 | ||||||
Harris Teeter Supermarkets, Inc. | 6,100 | 228,445 | ||||||
Ingles Markets, Inc., Class A | 2,300 | 37,260 | ||||||
Nash Finch Co. | 1,700 | 32,691 | ||||||
PriceSmart, Inc. | 3,500 | 290,465 | ||||||
Rite Aid Corp. * | 75,000 | 87,000 | ||||||
Safeway, Inc. (d) | 33,700 | 549,647 | ||||||
Spartan Stores, Inc. | 500 | 7,180 | ||||||
SUPERVALU, Inc. (d) | 24,332 | 75,673 | ||||||
Susser Holdings Corp. * | 2,500 | 89,850 | ||||||
Sysco Corp. | 83,036 | 2,579,928 | ||||||
The Andersons, Inc. | 2,400 | 94,272 | ||||||
The Fresh Market, Inc. * | 5,800 | 328,918 | ||||||
The Kroger Co. | 76,700 | 1,934,374 | ||||||
The Pantry, Inc. * | 1,000 | 13,265 | ||||||
United Natural Foods, Inc. * | 6,800 | 362,032 | ||||||
Wal-Mart Stores, Inc. | 239,800 | 17,989,796 | ||||||
Walgreen Co. | 121,600 | 4,283,968 | ||||||
Weis Markets, Inc. | 2,400 | 98,784 | ||||||
Whole Foods Market, Inc. | 24,200 | 2,292,466 | ||||||
46,196,896 | ||||||||
Food, Beverage & Tobacco 5.2% | ||||||||
Alico, Inc. | 500 | 15,695 | ||||||
Alliance One International, Inc. * | 16,800 | 51,072 | ||||||
Altria Group, Inc. | 290,100 | 9,225,180 | ||||||
Archer-Daniels-Midland Co. | 92,758 | 2,489,625 | ||||||
B&G Foods, Inc. | 7,400 | 223,998 | ||||||
Beam, Inc. | 22,600 | 1,255,656 | ||||||
Brown-Forman Corp., Class B | 22,035 | 1,411,562 | ||||||
Bunge Ltd. | 20,300 | 1,441,909 | ||||||
Campbell Soup Co. | 26,400 | 931,128 | ||||||
Chiquita Brands International, Inc. * | 6,200 | 44,702 | ||||||
Coca-Cola Bottling Co. Consolidated | 1,300 | 89,362 | ||||||
Coca-Cola Enterprises, Inc. | 41,000 | 1,289,040 | ||||||
ConAgra Foods, Inc. | 57,493 | 1,600,605 | ||||||
Constellation Brands, Inc., Class A * | 20,700 | 731,538 | ||||||
Darling International, Inc. * | 15,500 | 256,215 | ||||||
Dean Foods Co. * | 27,113 | 456,583 | ||||||
Diamond Foods, Inc. (d) | 3,000 | 55,560 | ||||||
Dole Food Co., Inc. (d)* | 8,300 | 104,497 | ||||||
Dr Pepper Snapple Group, Inc. | 29,600 | 1,268,360 | ||||||
Flowers Foods, Inc. | 17,737 | 349,242 | ||||||
Fresh Del Monte Produce, Inc. | 4,200 | 105,714 | ||||||
General Mills, Inc. | 92,500 | 3,707,400 | ||||||
Green Mountain Coffee Roasters, Inc. (d)* | 17,250 | 416,760 | ||||||
Griffin Land & Nurseries, Inc. | 300 | 7,785 | ||||||
H.J. Heinz Co. | 45,700 | 2,628,207 | ||||||
Hillshire Brands Co. | 17,000 | 442,170 | ||||||
Hormel Foods Corp. | 18,900 | 558,117 | ||||||
Ingredion, Inc. | 11,800 | 725,228 | ||||||
J&J Snack Foods Corp. | 2,093 | 119,866 | ||||||
John B. Sanfilippo & Son, Inc. * | 5,000 | 84,100 | ||||||
Kellogg Co. | 35,900 | 1,878,288 | ||||||
Kraft Foods Group, Inc. * | 84,404 | 3,838,694 | ||||||
Lancaster Colony Corp. | 3,400 | 247,452 | ||||||
Lorillard, Inc. | 18,648 | 2,163,354 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 18,700 | 1,152,294 | ||||||
Mead Johnson Nutrition Co. | 29,100 | 1,794,306 | ||||||
Molson Coors Brewing Co., Class B | 23,000 | 992,220 | ||||||
Mondelez International, Inc., Class A | 252,613 | 6,704,349 | ||||||
Monster Beverage Corp. * | 21,600 | 964,872 | ||||||
National Beverage Corp. * | 6,400 | 95,168 |
46 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
PepsiCo, Inc. | 222,058 | 15,375,296 | ||||||
Philip Morris International, Inc. | 240,500 | 21,298,680 | ||||||
Pilgrim’s Pride Corp. * | 30,966 | 174,339 | ||||||
Post Holdings, Inc. * | 4,650 | 146,707 | ||||||
Primo Water Corp. * | 1,000 | 745 | ||||||
Ralcorp Holdings, Inc. * | 7,700 | 555,863 | ||||||
Reynolds American, Inc. | 45,928 | 1,912,442 | ||||||
Rocky Mountain Chocolate Factory, Inc. | 3,427 | 36,018 | ||||||
Sanderson Farms, Inc. | 2,850 | 129,076 | ||||||
Smart Balance, Inc. * | 9,100 | 108,290 | ||||||
Smithfield Foods, Inc. * | 19,800 | 405,306 | ||||||
Snyders-Lance, Inc. | 8,900 | 225,526 | ||||||
The Boston Beer Co., Inc., Class A (d)* | 1,200 | 129,096 | ||||||
The Coca-Cola Co. | 552,500 | 20,541,950 | ||||||
The Hain Celestial Group, Inc. * | 6,306 | 364,487 | ||||||
The Hershey Co. | 22,000 | 1,514,700 | ||||||
The JM Smucker Co. | 15,246 | 1,305,667 | ||||||
Tootsie Roll Industries, Inc. | 2,852 | 76,006 | ||||||
TreeHouse Foods, Inc. * | 4,922 | 263,573 | ||||||
Tyson Foods, Inc., Class A | 39,340 | 661,305 | ||||||
Universal Corp. | 4,800 | 237,888 | ||||||
Vector Group Ltd. | 7,900 | 130,034 | ||||||
117,510,867 | ||||||||
Health Care Equipment & Services 4.1% | ||||||||
Abaxis, Inc. * | 2,000 | 73,560 | ||||||
ABIOMED, Inc. * | 5,300 | 105,046 | ||||||
Acadia Healthcare Co., Inc. * | 4,000 | 82,280 | ||||||
Accretive Health, Inc. * | 6,700 | 78,993 | ||||||
Accuray, Inc. * | 15,200 | 105,792 | ||||||
Aetna, Inc. | 47,100 | 2,058,270 | ||||||
Air Methods Corp. * | 1,500 | 164,445 | ||||||
Alere, Inc. * | 12,441 | 238,867 | ||||||
Align Technology, Inc. * | 10,100 | 268,458 | ||||||
Alliance HealthCare Services, Inc. * | 1,800 | 2,484 | ||||||
Allscripts Healthcare Solutions, Inc. * | 23,460 | 303,103 | ||||||
Amedisys, Inc. * | 10,834 | 119,607 | ||||||
AMERIGROUP Corp. * | 7,300 | 666,782 | ||||||
AmerisourceBergen Corp. | 35,796 | 1,411,794 | ||||||
AMN Healthcare Services, Inc. * | 10,010 | 99,299 | ||||||
AmSurg Corp. * | 4,300 | 122,636 | ||||||
Analogic Corp. | 1,400 | 103,124 | ||||||
Antares Pharma, Inc. (d)* | 20,000 | 76,200 | ||||||
ArthroCare Corp. * | 3,000 | 90,240 | ||||||
Assisted Living Concepts, Inc., Class A | 4,000 | 31,640 | ||||||
athenahealth, Inc. * | 5,200 | 334,308 | ||||||
Baxter International, Inc. | 77,618 | 4,861,215 | ||||||
Becton, Dickinson & Co. | 28,100 | 2,126,608 | ||||||
Bio-Reference Laboratories, Inc. (d)* | 3,500 | 97,160 | ||||||
BioScrip, Inc. * | 8,372 | 77,106 | ||||||
Boston Scientific Corp. * | 201,068 | 1,033,490 | ||||||
Brookdale Senior Living, Inc. * | 14,300 | 335,478 | ||||||
C.R. Bard, Inc. | 11,700 | 1,125,423 | ||||||
Cantel Medical Corp. | 5,356 | 139,310 | ||||||
Cardinal Health, Inc. | 47,960 | 1,972,595 | ||||||
CareFusion Corp. * | 31,280 | 830,797 | ||||||
Centene Corp. * | 7,000 | 265,860 | ||||||
Cerner Corp. * | 20,800 | 1,584,752 | ||||||
Chemed Corp. | 3,900 | 262,275 | ||||||
Chindex International, Inc. * | 3,300 | 34,221 | ||||||
Cigna Corp. | 41,100 | 2,096,100 | ||||||
Community Health Systems, Inc. * | 12,100 | 331,782 | ||||||
Computer Programs & Systems, Inc. | 1,900 | 92,739 | ||||||
Conceptus, Inc. * | 8,400 | 158,256 | ||||||
CONMED Corp. | 4,200 | 116,172 | ||||||
CorVel Corp. * | 2,850 | 121,211 | ||||||
Coventry Health Care, Inc. | 18,837 | 822,047 | ||||||
Covidien plc | 68,500 | 3,764,075 | ||||||
Cross Country Healthcare, Inc. * | 7,100 | 31,240 | ||||||
CryoLife, Inc. | 4,250 | 26,308 | ||||||
Cyberonics, Inc. * | 4,200 | 194,250 | ||||||
DaVita, Inc. * | 11,950 | 1,344,614 | ||||||
DENTSPLY International, Inc. | 19,800 | 729,432 | ||||||
DexCom, Inc. * | 8,600 | 112,660 | ||||||
Edwards Lifesciences Corp. * | 16,500 | 1,432,695 | ||||||
Emeritus Corp. * | 5,400 | 121,230 | ||||||
Endologix, Inc. * | 7,600 | 102,296 | ||||||
ExamWorks Group, Inc. * | 6,200 | 86,924 | ||||||
Express Scripts Holding Co. * | 115,663 | 7,117,901 | ||||||
Five Star Quality Care, Inc. * | 3,635 | 19,120 | ||||||
Gentiva Health Services, Inc. * | 6,050 | 56,870 | ||||||
Globus Medical, Inc., Class A * | 5,500 | 94,380 | ||||||
Greatbatch, Inc. * | 4,100 | 90,118 | ||||||
Greenway Medical Technologies * | 5,800 | 96,222 | ||||||
Haemonetics Corp. * | 3,700 | 302,290 | ||||||
Hanger, Inc. * | 5,400 | 136,890 | ||||||
HCA Holdings, Inc. | 23,000 | 653,430 | ||||||
Health Management Associates, Inc., Class A * | 32,700 | 238,710 | ||||||
Health Net, Inc. * | 11,100 | 238,872 | ||||||
HealthSouth Corp. * | 13,500 | 298,755 | ||||||
HealthStream, Inc. * | 3,500 | 89,390 | ||||||
Healthways, Inc. * | 8,100 | 78,813 | ||||||
Henry Schein, Inc. * | 12,600 | 929,628 | ||||||
Hill-Rom Holdings, Inc. | 7,800 | 219,102 | ||||||
HMS Holdings Corp. * | 12,200 | 281,698 | ||||||
Hologic, Inc. * | 36,612 | 754,939 | ||||||
Humana, Inc. | 22,800 | 1,693,356 | ||||||
ICU Medical, Inc. * | 1,750 | 103,828 | ||||||
IDEXX Laboratories, Inc. * | 8,000 | 769,600 | ||||||
Insulet Corp. * | 6,800 | 144,228 | ||||||
Integra LifeSciences Holdings Corp. * | 3,100 | 118,575 | ||||||
Intuitive Surgical, Inc. * | 5,650 | 3,063,543 | ||||||
Invacare Corp. | 10,700 | 146,055 | ||||||
IPC The Hospitalist Co., Inc. * | 2,000 | 68,980 | ||||||
Kindred Healthcare, Inc. * | 9,208 | 90,238 | ||||||
Laboratory Corp. of America Holdings * | 13,700 | 1,160,801 | ||||||
Landauer, Inc. | 2,100 | 121,695 | ||||||
LCA-Vision, Inc. * | 2,500 | 9,550 | ||||||
LeMaitre Vascular, Inc. | 2,000 | 12,000 | ||||||
LifePoint Hospitals, Inc. * | 6,707 | 237,025 | ||||||
Magellan Health Services, Inc. * | 3,907 | 195,936 | ||||||
MAKO Surgical Corp. (d)* | 5,000 | 75,750 | ||||||
Masimo Corp. * | 8,500 | 186,745 |
See financial notes 47
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
McKesson Corp. | 33,700 | 3,144,547 | ||||||
MedAssets, Inc. * | 6,000 | 106,380 | ||||||
Medical Action Industries, Inc. * | 6,250 | 18,438 | ||||||
Medidata Solutions, Inc. * | 3,400 | 142,868 | ||||||
MEDNAX, Inc. * | 7,200 | 496,656 | ||||||
Medtronic, Inc. | 145,574 | 6,052,967 | ||||||
Meridian Bioscience, Inc. | 5,850 | 115,538 | ||||||
Merit Medical Systems, Inc. * | 10,277 | 148,400 | ||||||
Molina Healthcare, Inc. * | 3,750 | 94,013 | ||||||
MWI Veterinary Supply, Inc. * | 1,700 | 178,534 | ||||||
National Healthcare Corp. | 2,100 | 100,002 | ||||||
Natus Medical, Inc. * | 7,600 | 85,880 | ||||||
Neogen Corp. * | 3,105 | 132,863 | ||||||
NuVasive, Inc. * | 10,000 | 144,200 | ||||||
NxStage Medical, Inc. * | 8,400 | 94,080 | ||||||
Omnicare, Inc. | 15,000 | 517,950 | ||||||
Omnicell, Inc. * | 7,400 | 107,892 | ||||||
OraSure Technologies, Inc. * | 7,800 | 70,668 | ||||||
Orthofix International N.V. * | 2,800 | 111,048 | ||||||
Owens & Minor, Inc. | 9,100 | 259,077 | ||||||
Patterson Cos., Inc. | 13,100 | 437,540 | ||||||
PDI, Inc. * | 2,900 | 19,865 | ||||||
PharMerica Corp. * | 5,913 | 72,257 | ||||||
PSS World Medical, Inc. * | 5,800 | 165,996 | ||||||
Quality Systems, Inc. | 4,000 | 69,800 | ||||||
Quest Diagnostics, Inc. | 22,620 | 1,305,626 | ||||||
Quidel Corp. * | 5,200 | 91,156 | ||||||
ResMed, Inc. | 20,000 | 798,800 | ||||||
RTI Biologics, Inc. * | 11,900 | 48,314 | ||||||
Select Medical Holdings Corp. * | 7,000 | 74,130 | ||||||
Sirona Dental Systems, Inc. * | 7,800 | 446,628 | ||||||
Spectranetics Corp. * | 6,700 | 97,552 | ||||||
St. Jude Medical, Inc. | 44,800 | 1,714,048 | ||||||
STERIS Corp. | 8,200 | 292,002 | ||||||
Stryker Corp. | 41,000 | 2,156,600 | ||||||
Sunrise Senior Living, Inc. * | 6,400 | 92,096 | ||||||
SurModics, Inc. * | 4,200 | 75,516 | ||||||
Symmetry Medical, Inc. * | 8,200 | 75,112 | ||||||
Team Health Holdings, Inc. * | 5,500 | 146,355 | ||||||
Teleflex, Inc. | 5,900 | 400,905 | ||||||
Tenet Healthcare Corp. * | 13,912 | 328,323 | ||||||
The Cooper Cos., Inc. | 6,981 | 670,036 | ||||||
The Ensign Group, Inc. | 3,000 | 87,480 | ||||||
The Providence Service Corp. * | 3,000 | 30,600 | ||||||
Thoratec Corp. * | 8,636 | 308,305 | ||||||
Triple-S Management Corp., Class B * | 5,300 | 95,612 | ||||||
U.S. Physical Therapy, Inc. | 3,500 | 93,450 | ||||||
Unilife Corp. * | 15,200 | 41,648 | ||||||
UnitedHealth Group, Inc. | 147,380 | 8,253,280 | ||||||
Universal American Corp. * | 9,300 | 84,072 | ||||||
Universal Health Services, Inc., Class B | 12,000 | 496,680 | ||||||
Utah Medical Products, Inc. | 2,500 | 85,050 | ||||||
Vanguard Health Systems, Inc. * | 10,500 | 101,640 | ||||||
Varian Medical Systems, Inc. * | 15,800 | 1,054,808 | ||||||
VCA Antech, Inc. * | 12,400 | 242,792 | ||||||
Vocera Communications, Inc. * | 3,700 | 99,493 | ||||||
Volcano Corp. * | 7,500 | 214,650 | ||||||
WellCare Health Plans, Inc. * | 6,200 | 295,120 | ||||||
WellPoint, Inc. | 45,823 | 2,808,033 | ||||||
West Pharmaceutical Services, Inc. | 4,600 | 247,802 | ||||||
Wright Medical Group, Inc. * | 4,200 | 85,344 | ||||||
Young Innovations, Inc. | 2,000 | 68,300 | ||||||
Zimmer Holdings, Inc. | 24,600 | 1,579,566 | ||||||
90,936,665 | ||||||||
Household & Personal Products 2.1% | ||||||||
Avon Products, Inc. | 61,700 | 955,733 | ||||||
Central Garden & Pet Co., Class A * | 8,600 | 96,922 | ||||||
Church & Dwight Co., Inc. | 19,300 | 979,668 | ||||||
Colgate-Palmolive Co. | 63,600 | 6,675,456 | ||||||
Elizabeth Arden, Inc. * | 3,500 | 165,130 | ||||||
Energizer Holdings, Inc. | 9,333 | 681,029 | ||||||
Harbinger Group, Inc. * | 19,100 | 167,125 | ||||||
Herbalife Ltd. (d) | 15,600 | 801,060 | ||||||
Inter Parfums, Inc. | 5,613 | 102,493 | ||||||
Kimberly-Clark Corp. | 56,339 | 4,701,490 | ||||||
Medifast, Inc. * | 3,500 | 89,320 | ||||||
Nu Skin Enterprises, Inc., Class A | 8,300 | 392,839 | ||||||
Nutraceutical International Corp. * | 5,000 | 79,300 | ||||||
Oil-Dri Corp. of America | 500 | 11,200 | ||||||
Orchids Paper Products Co. | 2,500 | 47,975 | ||||||
Prestige Brands Holdings, Inc. * | 6,500 | 113,035 | ||||||
Revlon, Inc., Class A * | 5,400 | 83,160 | ||||||
Schiff Nutrition International, Inc. * | 3,500 | 118,440 | ||||||
Spectrum Brands Holdings, Inc. * | 3,500 | 159,215 | ||||||
The Clorox Co. | 18,500 | 1,337,550 | ||||||
The Estee Lauder Cos., Inc., Class A | 33,800 | 2,082,756 | ||||||
The Female Health Co. | 3,500 | 24,500 | ||||||
The Procter & Gamble Co. | 393,015 | 27,212,359 | ||||||
WD-40 Co. | 1,600 | 76,576 | ||||||
47,154,331 | ||||||||
Insurance 4.0% | ||||||||
ACE Ltd. | 48,400 | 3,806,660 | ||||||
Aflac, Inc. | 66,800 | 3,325,304 | ||||||
Alleghany Corp. * | 2,340 | 813,384 | ||||||
Allied World Assurance Co. Holdings AG | 4,900 | 393,470 | ||||||
American Equity Investment Life Holding Co. | 6,400 | 73,664 | ||||||
American Financial Group, Inc. | 10,750 | 417,100 | ||||||
American International Group, Inc. * | 166,396 | 5,812,212 | ||||||
American National Insurance Co. | 1,300 | 94,978 | ||||||
American Safety Insurance Holdings Ltd. * | 3,000 | 50,580 | ||||||
AMERISAFE, Inc. * | 4,000 | 105,000 | ||||||
AmTrust Financial Services, Inc. | 3,750 | 90,750 | ||||||
Aon plc | 45,996 | 2,481,484 | ||||||
Arch Capital Group Ltd. * | 20,700 | 913,905 | ||||||
Argo Group International Holdings Ltd. | 4,556 | 156,726 | ||||||
Arthur J. Gallagher & Co. | 17,000 | 602,480 | ||||||
Aspen Insurance Holdings Ltd. | 9,000 | 291,150 | ||||||
Assurant, Inc. | 13,500 | 510,435 | ||||||
Assured Guaranty Ltd. | 27,300 | 379,197 | ||||||
Axis Capital Holdings Ltd. | 18,200 | 659,204 | ||||||
Baldwin & Lyons, Inc., Class B | 1,950 | 47,482 |
48 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Berkshire Hathaway, Inc., Class B * | 261,674 | 22,595,550 | ||||||
Brown & Brown, Inc. | 16,200 | 413,910 | ||||||
Cincinnati Financial Corp. | 21,150 | 842,616 | ||||||
Citizens, Inc. * | 16,000 | 163,040 | ||||||
CNA Financial Corp. | 3,800 | 111,644 | ||||||
CNO Financial Group, Inc. | 30,900 | 296,022 | ||||||
Crawford & Co., Class B | 1,600 | 8,816 | ||||||
Eastern Insurance Holdings, Inc. | 2,500 | 42,050 | ||||||
EMC Insurance Group, Inc. | 1,200 | 26,856 | ||||||
Employers Holdings, Inc. | 4,200 | 76,650 | ||||||
Endurance Specialty Holdings Ltd. | 6,200 | 251,410 | ||||||
Enstar Group Ltd. * | 1,300 | 130,000 | ||||||
Erie Indemnity Co., Class A | 3,600 | 223,992 | ||||||
Everest Re Group Ltd. | 7,300 | 810,665 | ||||||
FBL Financial Group, Inc., Class A | 2,890 | 98,636 | ||||||
Federated National Holding Co. * | 1,500 | 9,375 | ||||||
Fidelity National Financial, Inc., Class A | 30,927 | 662,147 | ||||||
First American Financial Corp. | 16,800 | 382,200 | ||||||
Flagstone Reinsurance Holdings S.A. | 18,800 | 166,192 | ||||||
Genworth Financial, Inc., Class A * | 70,200 | 418,392 | ||||||
Greenlight Capital Re Ltd., Class A * | 3,000 | 76,650 | ||||||
Hartford Financial Services Group, Inc. | 61,600 | 1,337,336 | ||||||
HCC Insurance Holdings, Inc. | 13,950 | 497,178 | ||||||
Hilltop Holdings, Inc. * | 12,926 | 175,664 | ||||||
Horace Mann Educators Corp. | 4,300 | 82,603 | ||||||
Independence Holding Co. | 2,970 | 25,958 | ||||||
Infinity Property & Casualty Corp. | 2,500 | 142,775 | ||||||
Kemper Corp. | 7,700 | 238,700 | ||||||
Lincoln National Corp. | 39,926 | 989,766 | ||||||
Loews Corp. | 44,045 | 1,862,223 | ||||||
Maiden Holdings Ltd. | 9,800 | 82,810 | ||||||
Markel Corp. * | 1,300 | 613,522 | ||||||
Marsh & McLennan Cos., Inc. | 76,600 | 2,606,698 | ||||||
MBIA, Inc. * | 25,250 | 249,975 | ||||||
Mercury General Corp. | 5,400 | 218,862 | ||||||
MetLife, Inc. | 151,600 | 5,380,284 | ||||||
Montpelier Re Holdings Ltd. | 8,100 | 185,247 | ||||||
National Financial Partners Corp. * | 9,600 | 176,160 | ||||||
National Western Life Insurance Co., Class A | 1,100 | 154,407 | ||||||
Old Republic International Corp. | 34,422 | 340,089 | ||||||
OneBeacon Insurance Group Ltd., Class A | 8,200 | 110,700 | ||||||
PartnerRe Ltd. | 8,900 | 720,900 | ||||||
Platinum Underwriters Holdings Ltd. | 4,500 | 199,800 | ||||||
Presidential Life Corp. | 6,200 | 86,676 | ||||||
Primerica, Inc. | 7,500 | 211,950 | ||||||
Principal Financial Group, Inc. | 39,100 | 1,076,814 | ||||||
ProAssurance Corp. | 4,270 | 381,738 | ||||||
Protective Life Corp. | 10,500 | 286,650 | ||||||
Prudential Financial, Inc. | 66,500 | 3,793,825 | ||||||
Reinsurance Group of America, Inc. | 10,100 | 534,492 | ||||||
RenaissanceRe Holdings Ltd. | 7,200 | 585,792 | ||||||
RLI Corp. | 2,800 | 190,904 | ||||||
Safety Insurance Group, Inc. | 3,400 | 157,590 | ||||||
Selective Insurance Group, Inc. | 7,800 | 144,222 | ||||||
StanCorp Financial Group, Inc. | 6,300 | 216,405 | ||||||
State Auto Financial Corp. | 5,500 | 88,770 | ||||||
Stewart Information Services Corp. | 3,600 | 83,952 | ||||||
Symetra Financial Corp. | 11,500 | 137,425 | ||||||
The Allstate Corp. | 68,274 | 2,729,595 | ||||||
The Chubb Corp. | 37,494 | 2,886,288 | ||||||
The Hanover Insurance Group, Inc. | 6,900 | 249,159 | ||||||
The Navigators Group, Inc. * | 1,500 | 79,620 | ||||||
The Phoenix Cos., Inc. * | 475 | 14,317 | ||||||
The Progressive Corp. | 79,500 | 1,772,850 | ||||||
The Travelers Cos., Inc. | 55,350 | 3,926,529 | ||||||
Torchmark Corp. | 13,400 | 677,906 | ||||||
Tower Group, Inc. | 4,000 | 72,080 | ||||||
United Fire Group, Inc. | 5,000 | 118,850 | ||||||
Unum Group | 39,814 | 807,428 | ||||||
Validus Holdings Ltd. | 13,220 | 473,276 | ||||||
W. R. Berkley Corp. | 15,850 | 616,406 | ||||||
White Mountains Insurance Group Ltd. | 900 | 461,430 | ||||||
XL Group plc | 43,400 | 1,073,716 | ||||||
89,160,290 | ||||||||
Materials 3.9% | ||||||||
A. M. Castle & Co. * | 4,000 | 48,600 | ||||||
A. Schulman, Inc. | 5,300 | 135,998 | ||||||
AEP Industries, Inc. * | 1,900 | 121,467 | ||||||
Air Products & Chemicals, Inc. | 29,800 | 2,310,394 | ||||||
Airgas, Inc. | 9,800 | 871,906 | ||||||
AK Steel Holding Corp. (d) | 32,127 | 161,920 | ||||||
Albemarle Corp. | 12,600 | 694,386 | ||||||
Alcoa, Inc. | 152,264 | 1,304,903 | ||||||
Allegheny Technologies, Inc. | 14,492 | 381,864 | ||||||
Allied Nevada Gold Corp. * | 11,500 | 424,580 | ||||||
AMCOL International Corp. | 3,000 | 94,740 | ||||||
American Vanguard Corp. | 3,000 | 107,190 | ||||||
AptarGroup, Inc. | 9,500 | 487,160 | ||||||
Ashland, Inc. | 10,323 | 734,481 | ||||||
Balchem Corp. | 4,200 | 146,286 | ||||||
Ball Corp. | 21,400 | 916,562 | ||||||
Bemis Co., Inc. | 14,700 | 485,835 | ||||||
Boise, Inc. | 13,500 | 113,265 | ||||||
Buckeye Technologies, Inc. | 7,700 | 201,740 | ||||||
Cabot Corp. | 8,400 | 300,384 | ||||||
Calgon Carbon Corp. * | 7,000 | 86,730 | ||||||
Carpenter Technology Corp. | 6,200 | 301,382 | ||||||
Celanese Corp., Series A | 22,700 | 862,373 | ||||||
Century Aluminum Co. * | 20,800 | 148,720 | ||||||
CF Industries Holdings, Inc. | 8,800 | 1,805,672 | ||||||
Chase Corp. | 200 | 3,686 | ||||||
Chemtura Corp. * | 14,000 | 223,020 | ||||||
Clearwater Paper Corp. * | 3,272 | 129,375 | ||||||
Cliffs Natural Resources, Inc. | 19,800 | 718,146 | ||||||
Coeur d’Alene Mines Corp. * | 12,800 | 395,648 | ||||||
Commercial Metals Co. | 15,000 | 206,400 | ||||||
Compass Minerals International, Inc. | 5,000 | 394,250 | ||||||
Crown Holdings, Inc. * | 21,300 | 814,725 | ||||||
Cytec Industries, Inc. | 6,600 | 454,212 | ||||||
Deltic Timber Corp. | 1,500 | 101,790 | ||||||
Domtar Corp. | 5,250 | 418,688 |
See financial notes 49
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
E.I. du Pont de Nemours & Co. | 132,795 | 5,912,033 | ||||||
Eagle Materials, Inc. | 6,543 | 346,583 | ||||||
Eastman Chemical Co. | 21,480 | 1,272,475 | ||||||
Ecolab, Inc. | 38,004 | 2,645,078 | ||||||
Ferro Corp. * | 8,200 | 21,566 | ||||||
Flotek Industries, Inc. * | 8,000 | 88,880 | ||||||
FMC Corp. | 19,300 | 1,032,936 | ||||||
Freeport-McMoran Copper & Gold, Inc. | 135,144 | 5,254,399 | ||||||
FutureFuel Corp. | 8,300 | 97,857 | ||||||
Georgia Gulf Corp. | 4,900 | 173,411 | ||||||
Globe Specialty Metals, Inc. | 9,100 | 136,773 | ||||||
Graphic Packaging Holding Co. * | 18,300 | 108,336 | ||||||
Greif, Inc., Class A | 4,300 | 180,428 | ||||||
H.B. Fuller Co. | 6,500 | 197,600 | ||||||
Hawkins, Inc. | 1,900 | 74,290 | ||||||
Haynes International, Inc. | 2,500 | 126,700 | ||||||
Headwaters, Inc. * | 12,000 | 86,280 | ||||||
Hecla Mining Co. | 40,200 | 264,516 | ||||||
Horsehead Holding Corp. * | 12,800 | 115,840 | ||||||
Huntsman Corp. | 27,400 | 412,096 | ||||||
Innophos Holdings, Inc. | 3,100 | 147,715 | ||||||
International Flavors & Fragrances, Inc. | 11,500 | 743,130 | ||||||
International Paper Co. | 61,604 | 2,207,271 | ||||||
Intrepid Potash, Inc. * | 6,500 | 141,245 | ||||||
Kaiser Aluminum Corp. | 2,000 | 121,160 | ||||||
KapStone Paper & Packaging Corp. * | 5,400 | 118,638 | ||||||
Koppers Holdings, Inc. | 2,500 | 89,250 | ||||||
Kraton Performance Polymers, Inc. * | 3,500 | 76,370 | ||||||
Kronos Worldwide, Inc. | 5,320 | 71,022 | ||||||
Landec Corp. * | 6,500 | 70,330 | ||||||
Louisiana-Pacific Corp. * | 17,300 | 273,167 | ||||||
LSB Industries, Inc. * | 3,000 | 120,810 | ||||||
LyondellBasell Industries N.V., Class A | 47,800 | 2,552,042 | ||||||
Martin Marietta Materials, Inc. | 6,500 | 535,015 | ||||||
Materion Corp. | 4,000 | 83,800 | ||||||
McEwen Mining, Inc. * | 28,300 | 137,538 | ||||||
MeadWestvaco Corp. | 24,474 | 726,633 | ||||||
Metals USA Holdings Corp. * | 6,300 | 91,854 | ||||||
Minerals Technologies, Inc. | 3,100 | 222,146 | ||||||
Mod-Pac Corp. * | 500 | 3,355 | ||||||
Molycorp, Inc. (d)* | 8,900 | 92,560 | ||||||
Monsanto Co. | 76,090 | 6,549,066 | ||||||
Myers Industries, Inc. | 8,080 | 119,826 | ||||||
Neenah Paper, Inc. | 4,231 | 109,583 | ||||||
NewMarket Corp. | 1,500 | 406,965 | ||||||
Newmont Mining Corp. | 70,751 | 3,859,467 | ||||||
Noranda Aluminum Holding Corp. | 11,800 | 72,334 | ||||||
Nucor Corp. | 44,700 | 1,793,811 | ||||||
Olin Corp. | 10,320 | 214,037 | ||||||
OM Group, Inc. * | 4,400 | 89,012 | ||||||
Omnova Solutions, Inc. * | 6,400 | 50,176 | ||||||
Owens-Illinois, Inc. * | 23,200 | 452,168 | ||||||
P.H. Glatfelter Co. | 7,000 | 124,670 | ||||||
Packaging Corp. of America | 14,000 | 493,780 | ||||||
Penford Corp. * | 6,200 | 47,740 | ||||||
PolyOne Corp. | 15,200 | 287,736 | ||||||
PPG Industries, Inc. | 21,800 | 2,552,344 | ||||||
Praxair, Inc. | 42,500 | 4,513,925 | ||||||
Quaker Chemical Corp. | 1,800 | 95,382 | ||||||
Reliance Steel & Aluminum Co. | 10,500 | 570,571 | ||||||
Resolute Forest Products (d)* | 14,000 | 170,800 | ||||||
Rock-Tenn Co., Class A | 10,113 | 740,170 | ||||||
Rockwood Holdings, Inc. | 10,900 | 500,310 | ||||||
Royal Gold, Inc. | 9,200 | 810,336 | ||||||
RPM International, Inc. | 18,600 | 495,876 | ||||||
RTI International Metals, Inc. * | 4,500 | 102,555 | ||||||
Schnitzer Steel Industries, Inc., Class A | 3,450 | 98,360 | ||||||
Schweitzer-Mauduit International, Inc. | 6,600 | 231,198 | ||||||
Sealed Air Corp. | 22,700 | 368,194 | ||||||
Sensient Technologies Corp. | 6,200 | 225,556 | ||||||
Sigma-Aldrich Corp. | 17,000 | 1,192,380 | ||||||
Silgan Holdings, Inc. | 6,900 | 298,839 | ||||||
Sonoco Products Co. | 13,500 | 420,255 | ||||||
Spartech Corp. * | 8,200 | 70,192 | ||||||
Steel Dynamics, Inc. | 30,900 | 390,885 | ||||||
Stepan Co. | 1,200 | 114,960 | ||||||
Stillwater Mining Co. * | 14,733 | 153,371 | ||||||
SunCoke Energy, Inc. * | 9,017 | 144,903 | ||||||
Texas Industries, Inc. (d)* | 4,000 | 172,520 | ||||||
The Dow Chemical Co. | 170,966 | 5,009,304 | ||||||
The Mosaic Co. | 38,900 | 2,036,026 | ||||||
The Scotts Miracle-Gro Co., Class A | 5,600 | 239,736 | ||||||
The Sherwin-Williams Co. | 12,000 | 1,710,960 | ||||||
The Valspar Corp. | 12,300 | 689,169 | ||||||
Titanium Metals Corp. | 16,307 | 190,955 | ||||||
TPC Group, Inc. * | 2,400 | 107,952 | ||||||
Tredegar Corp. | 5,100 | 86,547 | ||||||
Tronox Ltd., Class A | 3,600 | 73,404 | ||||||
United States Steel Corp. (d) | 20,400 | 415,956 | ||||||
US Silica Holdings, Inc. (d)* | 5,900 | 75,520 | ||||||
Valhi, Inc. | 7,200 | 90,288 | ||||||
Vulcan Materials Co. | 19,592 | 900,644 | ||||||
W.R. Grace & Co. * | 9,900 | 635,184 | ||||||
Walter Energy, Inc. | 8,900 | 311,144 | ||||||
Wausau Paper Corp. | 8,700 | 71,949 | ||||||
Westlake Chemical Corp. | 2,800 | 212,968 | ||||||
Worthington Industries, Inc. | 7,200 | 155,664 | ||||||
Zep, Inc. | 6,600 | 94,578 | ||||||
86,493,807 | ||||||||
Media 3.4% | ||||||||
AH Belo Corp., Class A | 7,880 | 39,400 | ||||||
AMC Networks, Inc., Class A * | 7,400 | 345,728 | ||||||
Arbitron, Inc. | 3,720 | 135,259 | ||||||
Belo Corp., Class A | 9,400 | 70,312 | ||||||
Cablevision Systems Corp., Class A | 33,200 | 578,344 | ||||||
Carmike Cinemas, Inc. * | 2,500 | 34,050 | ||||||
CBS Corp., Class B - Non Voting Shares | 86,006 | 2,786,594 | ||||||
Charter Communications, Inc., Class A * | 6,500 | 503,165 | ||||||
Cinemark Holdings, Inc. | 14,500 | 358,005 | ||||||
Clear Channel Outdoor Holdings, Inc., Class A * | 20,700 | 137,862 |
50 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Comcast Corp., Class A | 322,304 | 12,089,623 | ||||||
Comcast Corp., Special Class A | 61,200 | 2,230,128 | ||||||
Crown Media Holdings, Inc., Class A * | 6,000 | 10,440 | ||||||
Cumulus Media, Inc., Class A * | 14,651 | 36,041 | ||||||
Digital Generation, Inc. * | 5,700 | 53,010 | ||||||
DIRECTV * | 89,626 | 4,580,785 | ||||||
Discovery Communications, Inc., Class A * | 34,761 | 2,051,594 | ||||||
DISH Network Corp., Class A | 32,100 | 1,143,723 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 10,200 | 207,774 | ||||||
Entercom Communications Corp., Class A * | 3,000 | 19,530 | ||||||
Gannett Co., Inc. | 31,000 | 523,900 | ||||||
Harte-Hanks, Inc. | 12,400 | 69,068 | ||||||
John Wiley & Sons, Inc., Class A | 6,300 | 273,294 | ||||||
Journal Communications, Inc., Class A * | 16,900 | 94,809 | ||||||
Lamar Advertising Co., Class A * | 9,200 | 361,100 | ||||||
Liberty Global, Inc., Class A * | 35,875 | 2,153,576 | ||||||
Liberty Media Corp. - Liberty Capital, Class A * | 16,195 | 1,808,496 | ||||||
Live Nation Entertainment, Inc. * | 19,957 | 182,607 | ||||||
Martha Stewart Living Omnimedia, Inc., Class A | 3,900 | 11,271 | ||||||
Media General, Inc., Class A * | 5,000 | 21,000 | ||||||
Meredith Corp. (d) | 5,100 | 170,697 | ||||||
Morningstar, Inc. | 3,200 | 201,536 | ||||||
National CineMedia, Inc. | 7,900 | 122,134 | ||||||
News Corp., Class A | 290,550 | 6,949,956 | ||||||
Omnicom Group, Inc. | 38,000 | 1,820,580 | ||||||
Pandora Media, Inc. (d)* | 13,400 | 112,426 | ||||||
Regal Entertainment Group, Class A (d) | 12,100 | 185,856 | ||||||
Salem Communications Corp., Class A | 900 | 5,364 | ||||||
Scholastic Corp. | 3,700 | 122,063 | ||||||
Scripps Networks Interactive, Class A | 12,500 | 759,000 | ||||||
Sinclair Broadcast Group, Inc., Class A | 7,300 | 91,980 | ||||||
Sirius XM Radio, Inc. * | 559,600 | 1,566,880 | ||||||
The E.W. Scripps Co., Class A * | 7,000 | 74,270 | ||||||
The Interpublic Group of Cos., Inc. | 60,437 | 610,414 | ||||||
The Madison Square Garden Co., Class A * | 8,475 | 348,831 | ||||||
The McGraw-Hill Cos., Inc. | 40,000 | 2,211,200 | ||||||
The New York Times Co., Class A * | 17,300 | 141,514 | ||||||
The Walt Disney Co. | 255,993 | 12,561,577 | ||||||
The Washington Post Co., Class B (d) | 600 | 200,106 | ||||||
Time Warner Cable, Inc. | 44,011 | 4,361,930 | ||||||
Time Warner, Inc. | 135,350 | 5,880,957 | ||||||
Valassis Communications, Inc. * | 5,700 | 148,314 | ||||||
Viacom Inc., Class B | 67,506 | 3,461,033 | ||||||
World Wrestling Entertainment, Inc., Class A | 17,100 | 138,339 | ||||||
75,157,445 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.6% | ||||||||
Abbott Laboratories | 223,905 | 14,670,256 | ||||||
Acorda Therapeutics, Inc. * | 5,000 | 119,750 | ||||||
Acura Pharmaceuticals, Inc. (d)* | 4,500 | 6,795 | ||||||
Affymax, Inc. * | 4,900 | 111,671 | ||||||
Affymetrix, Inc. * | 17,400 | 55,158 | ||||||
Agilent Technologies, Inc. | 49,017 | 1,764,122 | ||||||
Akorn, Inc. * | 8,000 | 96,080 | ||||||
Albany Molecular Research, Inc. * | 8,600 | 30,444 | ||||||
Alexion Pharmaceuticals, Inc. * | 27,700 | 2,503,526 | ||||||
Alkermes plc * | 17,100 | 316,863 | ||||||
Allergan, Inc. | 43,868 | 3,944,611 | ||||||
Alnylam Pharmaceuticals, Inc. * | 7,400 | 119,658 | ||||||
AMAG Pharmaceuticals, Inc. * | 4,700 | 72,756 | ||||||
Amgen, Inc. | 109,968 | 9,517,181 | ||||||
Amicus Therapeutics, Inc. * | 5,700 | 28,899 | ||||||
Arena Pharmaceuticals, Inc. (d)* | 28,200 | 223,062 | ||||||
ARIAD Pharmaceuticals, Inc. * | 23,300 | 502,115 | ||||||
ArQule, Inc. * | 8,800 | 22,088 | ||||||
Array BioPharma, Inc. * | 17,100 | 70,794 | ||||||
Astex Pharmaceuticals * | 16,100 | 38,318 | ||||||
Auxilium Pharmaceuticals, Inc. * | 7,000 | 143,360 | ||||||
AVANIR Pharmaceuticals, Inc., Class A (d)* | 28,700 | 82,082 | ||||||
AVEO Pharmaceuticals, Inc. * | 15,100 | 115,213 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 3,000 | 304,050 | ||||||
BioCryst Pharmaceuticals, Inc. * | 4,900 | 14,259 | ||||||
Biogen Idec, Inc. * | 33,725 | 4,661,470 | ||||||
BioMarin Pharmaceuticals, Inc. * | 17,400 | 644,496 | ||||||
Bristol-Myers Squibb Co. | 239,550 | 7,965,037 | ||||||
Bruker Corp. * | 14,600 | 176,514 | ||||||
Cambrex Corp. * | 7,200 | 86,976 | ||||||
Celgene Corp. * | 61,845 | 4,534,475 | ||||||
Celldex Therapeutics, Inc. * | 15,200 | 83,752 | ||||||
Cepheid, Inc. * | 8,500 | 257,635 | ||||||
Charles River Laboratories International, Inc. * | 7,416 | 276,765 | ||||||
Clovis Oncology, Inc. (d)* | 4,300 | 92,751 | ||||||
Codexis, Inc. * | 1,870 | 4,862 | ||||||
Covance, Inc. * | 8,800 | 428,648 | ||||||
Cubist Pharmaceuticals, Inc. * | 8,900 | 381,810 | ||||||
Dendreon Corp. (d)* | 23,500 | 89,300 | ||||||
DepoMed, Inc. * | 13,800 | 77,970 | ||||||
Durect Corp. * | 14,500 | 19,865 | ||||||
Dyax Corp. * | 22,200 | 66,600 | ||||||
Dynavax Technologies Corp. * | 20,500 | 84,870 | ||||||
Eli Lilly & Co. | 145,700 | 7,085,391 | ||||||
Emergent Biosolutions, Inc. * | 6,000 | 79,740 | ||||||
Endo Health Solutions, Inc. * | 16,000 | 458,560 | ||||||
Endocyte, Inc. * | 8,100 | 77,517 | ||||||
Enzo Biochem, Inc. * | 9,281 | 18,562 | ||||||
Enzon Pharmaceuticals, Inc. * | 15,100 | 99,207 | ||||||
Exact Sciences Corp. * | 8,300 | 78,518 | ||||||
Exelixis, Inc. (d)* | 25,800 | 122,550 | ||||||
Fluidigm Corp. * | 6,000 | 90,540 | ||||||
Forest Laboratories, Inc. * | 32,900 | 1,109,059 | ||||||
FRD Acquisition Co. (a)(c)* | 8,700 | — | ||||||
Furiex Pharmaceuticals, Inc. * | 1,000 | 19,170 | ||||||
Genomic Health, Inc. * | 5,000 | 156,250 | ||||||
Geron Corp. * | 26,700 | 35,511 |
See financial notes 51
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Gilead Sciences, Inc. * | 107,440 | 7,215,670 | ||||||
GTx, Inc. * | 3,000 | 12,030 | ||||||
Halozyme Therapeutics, Inc. * | 17,000 | 89,930 | ||||||
Harvard Bioscience, Inc. * | 6,500 | 26,130 | ||||||
Hi-Tech Pharmacal Co., Inc. * | 3,000 | 94,050 | ||||||
Hospira, Inc. * | 23,270 | 714,156 | ||||||
Idenix Pharmaceuticals, Inc. * | 28,800 | 102,528 | ||||||
Illumina, Inc. * | 17,200 | 817,172 | ||||||
ImmunoGen, Inc. * | 10,000 | 110,800 | ||||||
Immunomedics, Inc. * | 15,200 | 50,312 | ||||||
Impax Laboratories, Inc. * | 8,500 | 180,625 | ||||||
Incyte Corp. (d)* | 18,400 | 293,664 | ||||||
Infinity Pharmaceuticals, Inc. * | 4,300 | 96,277 | ||||||
InterMune, Inc. * | 12,600 | 100,170 | ||||||
Ironwood Pharmaceuticals, Inc. * | 11,200 | 130,256 | ||||||
Isis Pharmaceuticals, Inc. * | 14,200 | 122,830 | ||||||
Jazz Pharmaceuticals plc * | 6,600 | 354,618 | ||||||
Johnson & Johnson | 393,370 | 27,858,463 | ||||||
Lexicon Pharmaceuticals, Inc. * | 69,600 | 144,072 | ||||||
Life Technologies Corp. * | 25,062 | 1,225,782 | ||||||
Ligand Pharmaceuticals, Inc., Class B * | 4,948 | 76,298 | ||||||
Luminex Corp. * | 7,800 | 125,424 | ||||||
MannKind Corp. (d)* | 40,800 | 77,112 | ||||||
MAP Pharmaceuticals, Inc. * | 10,400 | 160,368 | ||||||
Maxygen, Inc. | 10,000 | 24,400 | ||||||
Medicis Pharmaceutical Corp., Class A | 7,900 | 342,939 | ||||||
Medivation, Inc. * | 10,000 | 511,200 | ||||||
Merck & Co., Inc. | 434,570 | 19,829,429 | ||||||
Merrimack Pharmaceuticals, Inc. (d)* | 11,000 | 67,980 | ||||||
Mettler-Toledo International, Inc. * | 4,800 | 812,976 | ||||||
Momenta Pharmaceuticals, Inc. * | 7,000 | 88,760 | ||||||
Mylan, Inc. * | 59,100 | 1,497,594 | ||||||
Myrexis, Inc. * | 7,200 | 17,280 | ||||||
Myriad Genetics, Inc. * | 14,800 | 387,316 | ||||||
Nabi Biopharmaceuticals * | 10,300 | 18,025 | ||||||
Nektar Therapeutics * | 13,300 | 119,700 | ||||||
Neurocrine Biosciences, Inc. * | 10,900 | 79,897 | ||||||
Novavax, Inc. * | 20,200 | 42,420 | ||||||
NPS Pharmaceuticals, Inc. * | 12,300 | 113,652 | ||||||
Obagi Medical Products, Inc. * | 3,000 | 36,990 | ||||||
Oncothyreon, Inc. (d)* | 10,200 | 51,816 | ||||||
Onyx Pharmaceuticals, Inc. * | 8,900 | 697,404 | ||||||
Opko Health, Inc. (d)* | 19,000 | 81,320 | ||||||
Optimer Pharmaceuticals, Inc. (d)* | 13,900 | 132,606 | ||||||
Pacira Pharmaceuticals, Inc. * | 6,500 | 103,220 | ||||||
Pain Therapeutics, Inc. * | 7,400 | 34,558 | ||||||
PAREXEL International Corp. * | 7,800 | 239,382 | ||||||
PDL Biopharma, Inc. | 16,000 | 119,200 | ||||||
PerkinElmer, Inc. | 16,077 | 497,262 | ||||||
Perrigo Co. | 12,400 | 1,426,124 | ||||||
Pfizer, Inc. | 1,065,901 | 26,508,958 | ||||||
Pharmacyclics, Inc. * | 7,500 | 458,025 | ||||||
POZEN, Inc. * | 4,800 | 28,752 | ||||||
Questcor Pharmaceuticals, Inc. (d) | 8,000 | 203,840 | ||||||
Regeneron Pharmaceuticals, Inc. * | 10,500 | 1,494,150 | ||||||
Rigel Pharmaceuticals, Inc. * | 9,800 | 87,318 | ||||||
Sagent Pharmaceuticals, Inc. * | 5,500 | 82,940 | ||||||
Salix Pharmaceuticals Ltd. * | 7,000 | 273,280 | ||||||
Sangamo BioSciences, Inc. * | 9,900 | 55,044 | ||||||
Santarus, Inc. * | 10,500 | 95,865 | ||||||
Savient Pharmaceuticals, Inc. (d)* | 6,800 | 9,792 | ||||||
Seattle Genetics, Inc. * | 14,700 | 369,852 | ||||||
Sequenom, Inc. (d)* | 23,200 | 72,152 | ||||||
Spectrum Pharmaceuticals, Inc. (d)* | 6,500 | 72,540 | ||||||
Sucampo Pharmaceuticals, Inc., Class A * | 6,500 | 32,435 | ||||||
Synageva BioPharma Corp. * | 2,100 | 88,788 | ||||||
Synta Pharmaceuticals Corp. (d)* | 12,000 | 94,440 | ||||||
Techne Corp. | 5,800 | 390,688 | ||||||
The Medicines Co. * | 8,300 | 181,936 | ||||||
Theravance, Inc. * | 9,700 | 218,347 | ||||||
Thermo Fisher Scientific, Inc. | 52,202 | 3,187,454 | ||||||
United Therapeutics Corp. * | 6,900 | 315,123 | ||||||
Vertex Pharmaceuticals, Inc. * | 30,344 | 1,463,795 | ||||||
Vical, Inc. * | 24,600 | 83,886 | ||||||
ViroPharma, Inc. * | 9,700 | 244,925 | ||||||
VIVUS, Inc. (d)* | 13,700 | 204,130 | ||||||
Warner Chilcott plc, Class A | 25,000 | 289,500 | ||||||
Waters Corp. * | 12,900 | 1,055,349 | ||||||
Watson Pharmaceuticals, Inc. * | 18,232 | 1,567,040 | ||||||
Xenoport, Inc. * | 8,900 | 73,247 | ||||||
Zalicus, Inc. (d)* | 10,500 | 5,880 | ||||||
ZIOPHARM Oncology, Inc. (d)* | 15,900 | 74,889 | ||||||
171,174,029 | ||||||||
Real Estate 3.7% | ||||||||
Acadia Realty Trust | 6,000 | 154,080 | ||||||
AG Mortgage Investment Trust, Inc. | 5,000 | 119,750 | ||||||
Alexander & Baldwin, Inc. * | 6,400 | 185,152 | ||||||
Alexander’s, Inc. | 300 | 133,188 | ||||||
Alexandria Real Estate Equities, Inc. | 8,800 | 619,784 | ||||||
American Assets Trust, Inc. | 4,700 | 127,699 | ||||||
American Campus Communities, Inc. | 12,300 | 557,313 | ||||||
American Capital Agency Corp. | 48,100 | 1,588,262 | ||||||
American Capital Mortgage Investment Corp. | 5,000 | 124,650 | ||||||
American Realty Capital Trust, Inc. | 21,000 | 236,670 | ||||||
American Realty Investors, Inc. * | 1,537 | 4,872 | ||||||
American Tower Corp. | 56,400 | 4,246,356 | ||||||
Annaly Capital Management, Inc. | 139,100 | 2,245,074 | ||||||
Anworth Mortgage Asset Corp. | 24,200 | 148,588 | ||||||
Apartment Investment & Management Co., Class A | 20,511 | 547,439 | ||||||
Apollo Residential Mortgage, Inc. | 3,400 | 75,378 | ||||||
ARMOUR Residential REIT, Inc. | 38,100 | 274,320 | ||||||
Ashford Hospitality Trust | 9,000 | 77,310 | ||||||
Associated Estates Rlty Corp | 6,900 | 103,431 | ||||||
AV Homes, Inc. * | 4,500 | 66,150 | ||||||
AvalonBay Communities, Inc. | 13,692 | 1,856,088 | ||||||
BioMed Realty Trust, Inc. | 20,000 | 382,400 | ||||||
Boston Properties, Inc. | 21,200 | 2,253,560 | ||||||
Brandywine Realty Trust | 21,063 | 244,331 | ||||||
BRE Properties, Inc. | 11,000 | 531,850 | ||||||
Camden Property Trust | 11,900 | 780,997 | ||||||
Capstead Mortgage Corp. | 13,440 | 165,581 | ||||||
CBL & Associates Properties, Inc. | 22,285 | 498,515 |
52 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
CBRE Group, Inc., Class A * | 41,600 | 749,632 | ||||||
Chesapeake Lodging Trust | 4,100 | 77,285 | ||||||
Chimera Investment Corp. | 146,600 | 391,422 | ||||||
Colonial Properties Trust | 10,067 | 217,749 | ||||||
Colony Financial, Inc. | 4,800 | 96,048 | ||||||
CommonWealth REIT | 11,850 | 162,464 | ||||||
Consolidated-Tomoka Land Co. | 1,100 | 36,102 | ||||||
Coresite Realty Corp. | 3,400 | 77,282 | ||||||
Corporate Office Properties Trust | 11,400 | 284,430 | ||||||
Cousins Properties, Inc. | 9,145 | 76,909 | ||||||
CreXus Investment Corp. | 9,000 | 101,250 | ||||||
CubeSmart | 14,500 | 190,240 | ||||||
CYS Investments, Inc. | 21,700 | 291,214 | ||||||
DCT Industrial Trust, Inc. | 45,000 | 290,250 | ||||||
DDR Corp. | 33,884 | 520,458 | ||||||
DiamondRock Hospitality Co. | 26,686 | 226,297 | ||||||
Digital Realty Trust, Inc. | 17,000 | 1,044,310 | ||||||
Douglas Emmett, Inc. | 19,200 | 450,240 | ||||||
Duke Realty Corp. | 37,490 | 542,855 | ||||||
DuPont Fabros Technology, Inc. | 7,500 | 160,950 | ||||||
EastGroup Properties, Inc. | 3,900 | 203,034 | ||||||
Education Realty Trust, Inc. | 16,500 | 173,745 | ||||||
Entertainment Properties Trust | 6,600 | 293,370 | ||||||
Equity Lifestyle Properties, Inc. | 6,000 | 403,980 | ||||||
Equity One, Inc. | 12,100 | 252,890 | ||||||
Equity Residential | 43,000 | 2,468,630 | ||||||
Essex Property Trust, Inc. | 5,200 | 780,000 | ||||||
Extra Space Storage, Inc. | 14,600 | 503,554 | ||||||
Federal Realty Investment Trust | 9,100 | 981,253 | ||||||
FelCor Lodging Trust, Inc. * | 18,200 | 80,080 | ||||||
First Industrial Realty Trust, Inc. * | 15,900 | 212,265 | ||||||
First Potomac Realty Trust | 6,000 | 71,460 | ||||||
Forest City Enterprises, Inc., Class A * | 18,400 | 295,320 | ||||||
Forestar Group, Inc. * | 4,933 | 78,977 | ||||||
Franklin Street Properties Corp. | 14,000 | 159,740 | ||||||
General Growth Properties, Inc. | 63,409 | 1,246,621 | ||||||
Getty Realty Corp. | 9,500 | 173,945 | ||||||
Glimcher Realty Trust | 20,000 | 213,400 | ||||||
Government Properties Income Trust (d) | 6,000 | 133,140 | ||||||
Gramercy Capital Corp. * | 17,528 | 51,007 | ||||||
Hatteras Financial Corp. | 13,800 | 376,326 | ||||||
HCP, Inc. | 64,448 | 2,855,046 | ||||||
Health Care REIT, Inc. | 35,800 | 2,127,594 | ||||||
Healthcare Realty Trust, Inc. | 10,900 | 256,041 | ||||||
Healthcare Trust of America, Inc., Class A | 8,800 | 88,000 | ||||||
Hersha Hospitality Trust | 22,500 | 102,825 | ||||||
Highwoods Properties, Inc. | 10,800 | 348,300 | ||||||
Home Properties, Inc. | 6,800 | 413,372 | ||||||
Hospitality Properties Trust | 16,100 | 372,232 | ||||||
Host Hotels & Resorts, Inc. | 103,063 | 1,490,291 | ||||||
Howard Hughes Corp. * | 3,500 | 245,000 | ||||||
Hudson Pacific Properties, Inc. | 9,100 | 172,627 | ||||||
Inland Real Estate Corp. | 20,300 | 165,851 | ||||||
Invesco Mortgage Capital, Inc. | 18,000 | 385,740 | ||||||
Investors Real Estate Trust | 11,500 | 96,830 | ||||||
iStar Financial, Inc. * | 13,390 | 116,895 | ||||||
Jones Lang LaSalle, Inc. | 6,100 | 474,214 | ||||||
Kennedy-Wilson Holdings, Inc. | 6,400 | 90,880 | ||||||
Kilroy Realty Corp. | 9,800 | 435,218 | ||||||
Kimco Realty Corp. | 56,595 | 1,104,734 | ||||||
LaSalle Hotel Properties | 11,600 | 277,704 | ||||||
Lexington Realty Trust | 18,867 | 179,048 | ||||||
Liberty Property Trust | 16,300 | 572,456 | ||||||
LTC Properties, Inc. | 4,800 | 158,448 | ||||||
Mack-Cali Realty Corp. | 11,400 | 296,286 | ||||||
Maui Land & Pineapple Co., Inc. * | 800 | 1,760 | ||||||
Medical Properties Trust, Inc. | 16,800 | 192,864 | ||||||
MFA Financial, Inc. | 51,000 | 416,670 | ||||||
Mid-America Apartment Communities, Inc. | 5,500 | 355,905 | ||||||
Mission West Properties, Inc. | 8,000 | 66,240 | ||||||
MPG Office Trust, Inc. (d)* | 18,500 | 59,940 | ||||||
National Health Investors, Inc. | 3,400 | 181,594 | ||||||
National Retail Properties, Inc. (d) | 15,220 | 482,170 | ||||||
New Century Financial Corp. (a)(c)* | 3,600 | — | ||||||
NorthStar Realty Finance Corp. | 18,900 | 124,173 | ||||||
Omega Healthcare Investors, Inc. | 14,984 | 343,733 | ||||||
Parkway Properties, Inc. | 12,800 | 176,256 | ||||||
Pebblebrook Hotel Trust | 8,000 | 169,760 | ||||||
Pennsylvania Real Estate Investment Trust | 8,500 | 140,505 | ||||||
PennyMac Mortgage Investment Trust | 8,100 | 206,064 | ||||||
Piedmont Office Realty Trust, Inc., Class A | 23,000 | 409,400 | ||||||
Plum Creek Timber Co., Inc. | 22,847 | 1,002,983 | ||||||
PMC Commercial Trust | 4,500 | 29,115 | ||||||
Post Properties, Inc. | 8,200 | 400,242 | ||||||
Potlatch Corp. | 5,753 | 221,375 | ||||||
ProLogis, Inc. | 65,734 | 2,254,019 | ||||||
PS Business Parks, Inc. | 3,000 | 192,390 | ||||||
Public Storage | 20,290 | 2,812,803 | ||||||
RAIT Financial Trust (d) | 16,199 | 90,390 | ||||||
Ramco-Gershenson Properties Trust | 6,900 | 89,424 | ||||||
Rayonier Inc | 17,082 | 837,189 | ||||||
Realogy Holdings Corp. * | 5,700 | 202,578 | ||||||
Realty Income Corp. (d) | 18,800 | 738,276 | ||||||
Redwood Trust, Inc. | 11,300 | 176,167 | ||||||
Regency Centers Corp. | 12,700 | 609,854 | ||||||
Resource Capital Corp. | 28,600 | 167,596 | ||||||
Retail Opportunity Investments Corp. (d) | 7,000 | 88,620 | ||||||
Retail Properties of America, Inc., Class A | 9,700 | 118,728 | ||||||
RLJ Lodging Trust | 15,000 | 267,300 | ||||||
Rouse Properties, Inc. (d) | 5,815 | 87,574 | ||||||
Sabra Health Care REIT, Inc. | 8,000 | 177,760 | ||||||
Saul Centers, Inc. | 2,000 | 86,540 | ||||||
Select Income REIT | 4,500 | 111,195 | ||||||
Senior Housing Properties Trust | 25,150 | 552,797 | ||||||
Simon Property Group, Inc. | 43,283 | 6,588,105 | ||||||
SL Green Realty Corp. | 12,650 | 952,545 | ||||||
Sovran Self Storage, Inc. | 3,800 | 219,640 | ||||||
STAG Industrial, Inc. | 6,800 | 117,776 | ||||||
Starwood Property Trust, Inc. | 16,300 | 373,596 | ||||||
Strategic Hotels & Resorts, Inc. * | 25,000 | 137,250 | ||||||
Sun Communities, Inc. | 3,900 | 163,722 | ||||||
Sunstone Hotel Investors, Inc. * | 19,300 | 190,684 | ||||||
Tanger Factory Outlet Centers, Inc. | 12,200 | 383,934 |
See financial notes 53
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Taubman Centers, Inc. | 8,800 | 691,240 | ||||||
Tejon Ranch Co. * | 3,674 | 110,000 | ||||||
The Macerich Co. | 18,605 | 1,060,485 | ||||||
The St. Joe Co. (d)* | 12,900 | 255,420 | ||||||
Two Harbors Investment Corp. | 39,900 | 476,007 | ||||||
UDR, Inc. | 35,261 | 855,784 | ||||||
UMH Properties, Inc. | 5,100 | 53,601 | ||||||
Urstadt Biddle Properties, Inc., Class A | 4,500 | 85,230 | ||||||
Ventas, Inc. | 41,550 | 2,628,869 | ||||||
Vornado Realty Trust REIT | 23,841 | 1,912,287 | ||||||
Washington Real Estate Investment Trust | 8,100 | 208,251 | ||||||
Weingarten Realty Investors | 17,175 | 463,725 | ||||||
Weyerhaeuser Co. | 76,692 | 2,123,602 | ||||||
Winthrop Realty Trust | 10,000 | 109,400 | ||||||
WP Carey, Inc. | 8,100 | 443,070 | ||||||
Zillow, Inc. * | 4,500 | 168,120 | ||||||
81,728,836 | ||||||||
Retailing 4.2% | ||||||||
Aaron’s, Inc. | 9,375 | 289,031 | ||||||
Abercrombie & Fitch Co., Class A | 11,800 | 360,844 | ||||||
Advance Auto Parts, Inc. | 10,340 | 733,520 | ||||||
Aeropostale, Inc. * | 9,900 | 118,305 | ||||||
ALCO Stores, Inc. * | 1,800 | 17,856 | ||||||
Amazon.com, Inc. * | 51,600 | 12,013,512 | ||||||
America’s Car-Mart, Inc. * | 1,850 | 77,441 | ||||||
American Eagle Outfitters, Inc. | 27,450 | 572,881 | ||||||
ANN, Inc. * | 6,625 | 232,935 | ||||||
Asbury Automotive Group, Inc. * | 4,100 | 130,052 | ||||||
Ascena Retail Group, Inc. * | 17,636 | 349,193 | ||||||
AutoNation, Inc. * | 6,600 | 293,040 | ||||||
AutoZone, Inc. * | 5,300 | 1,987,500 | ||||||
Barnes & Noble, Inc. * | 7,400 | 124,616 | ||||||
Bed Bath & Beyond, Inc. * | 32,500 | 1,874,600 | ||||||
Best Buy Co., Inc. | 39,225 | 596,612 | ||||||
Big Lots, Inc. * | 11,100 | 323,343 | ||||||
Brown Shoe Co., Inc. | 6,675 | 105,332 | ||||||
Cabela’s, Inc. * | 6,500 | 291,265 | ||||||
CarMax, Inc. * | 31,546 | 1,064,677 | ||||||
Chico’s FAS, Inc. | 22,800 | 424,080 | ||||||
Christopher & Banks Corp. * | 2,900 | 9,048 | ||||||
Coldwater Creek, Inc. * | 2,125 | 8,819 | ||||||
Core-Mark Holding Co., Inc. | 2,000 | 95,740 | ||||||
Destination Maternity Corp. | 5,000 | 94,800 | ||||||
Dick’s Sporting Goods, Inc. | 13,700 | 685,000 | ||||||
Dillard’s, Inc., Class A | 4,300 | 331,100 | ||||||
Dollar General Corp. * | 37,800 | 1,837,836 | ||||||
Dollar Tree, Inc. * | 32,150 | 1,281,820 | ||||||
DSW, Inc., Class A | 4,480 | 280,403 | ||||||
Expedia, Inc. | 13,172 | 779,124 | ||||||
Express, Inc. * | 12,600 | 140,238 | ||||||
Family Dollar Stores, Inc. | 13,700 | 903,652 | ||||||
Five Below, Inc. * | 2,500 | 82,850 | ||||||
Foot Locker, Inc. | 21,400 | 716,900 | ||||||
Francesca’s Holdings Corp. * | 4,900 | 144,697 | ||||||
Fred’s, Inc., Class A | 6,700 | 90,785 | ||||||
GameStop Corp., Class A (d) | 17,548 | 400,621 | ||||||
Geeknet, Inc. * | 452 | 8,213 | ||||||
Genesco, Inc. * | 4,300 | 246,390 | ||||||
Genuine Parts Co. | 21,600 | 1,351,728 | ||||||
GNC Holdings, Inc., Class A | 11,200 | 433,104 | ||||||
Group 1 Automotive, Inc. | 4,400 | 272,844 | ||||||
Groupon, Inc. * | 42,300 | 174,276 | ||||||
Guess?, Inc. | 7,900 | 195,762 | ||||||
Hibbett Sports, Inc. * | 3,543 | 191,287 | ||||||
HomeAway, Inc. * | 3,900 | 100,269 | ||||||
HSN, Inc. | 6,269 | 326,113 | ||||||
J.C. Penney Co., Inc. | 20,000 | 480,200 | ||||||
Jos. A. Bank Clothiers, Inc. * | 3,600 | 168,444 | ||||||
Kayak Software Corp. (d)* | 2,800 | 92,764 | ||||||
Kirkland’s, Inc. * | 6,000 | 57,540 | ||||||
Kohl’s Corp. | 30,400 | 1,619,712 | ||||||
Liberty Interactive Corp., Class A * | 72,809 | 1,456,180 | ||||||
Liberty Ventures, Series A * | 4,165 | 237,030 | ||||||
Limited Brands, Inc. | 34,920 | 1,672,319 | ||||||
Lithia Motors, Inc., Class A | 3,300 | 112,860 | ||||||
LKQ Corp. * | 40,800 | 852,312 | ||||||
Lowe’s Cos., Inc. | 162,800 | 5,271,464 | ||||||
Lumber Liquidators Holdings, Inc. * | 3,400 | 189,788 | ||||||
Macy’s, Inc. | 58,252 | 2,217,654 | ||||||
MarineMax, Inc. * | 800 | 6,584 | ||||||
Monro Muffler Brake, Inc. | 4,462 | 151,351 | ||||||
Netflix, Inc. (d)* | 7,900 | 624,811 | ||||||
Nordstrom, Inc. | 22,500 | 1,277,325 | ||||||
O’Reilly Automotive, Inc. * | 16,699 | 1,430,770 | ||||||
Office Depot, Inc. * | 69,900 | 173,352 | ||||||
OfficeMax, Inc. | 22,400 | 164,640 | ||||||
Pacific Sunwear of California, Inc. * | 7,475 | 12,708 | ||||||
Penske Automotive Group, Inc. | 5,000 | 153,000 | ||||||
PetSmart, Inc. | 15,100 | 1,002,489 | ||||||
Pier 1 Imports, Inc. | 13,500 | 275,400 | ||||||
Pool Corp. | 6,662 | 280,603 | ||||||
Priceline.com, Inc. * | 7,083 | 4,064,013 | ||||||
RadioShack Corp. (d) | 13,700 | 30,688 | ||||||
Rent-A-Center, Inc. | 7,750 | 258,307 | ||||||
Ross Stores, Inc. | 31,700 | 1,932,115 | ||||||
Saks, Inc. * | 14,800 | 152,144 | ||||||
Sally Beauty Holdings, Inc. * | 22,050 | 530,964 | ||||||
Sears Canada, Inc. (a)* | 2,734 | 31,687 | ||||||
Sears Holdings Corp. (d)* | 6,385 | 400,148 | ||||||
Select Comfort Corp. * | 7,300 | 203,159 | ||||||
Shoe Carnival, Inc. | 6,300 | 147,294 | ||||||
Shutterfly, Inc. * | 4,600 | 139,196 | ||||||
Signet Jewelers Ltd. | 12,500 | 647,000 | ||||||
Sonic Automotive, Inc., Class A | 4,400 | 85,360 | ||||||
Stage Stores, Inc. | 5,700 | 139,650 | ||||||
Staples, Inc. | 95,900 | 1,104,288 | ||||||
Stein Mart, Inc. * | 10,300 | 80,958 | ||||||
Systemax, Inc. * | 5,000 | 54,700 | ||||||
Target Corp. | 93,400 | 5,954,250 | ||||||
The Buckle, Inc. (d) | 3,875 | 175,034 | ||||||
The Cato Corp., Class A | 3,800 | 107,844 | ||||||
The Children’s Place Retail Stores, Inc. * | 3,600 | 210,348 | ||||||
The Finish Line, Inc., Class A | 7,161 | 148,985 | ||||||
The Gap, Inc. | 42,000 | 1,500,240 | ||||||
The Home Depot, Inc. | 215,070 | 13,200,997 | ||||||
The Men’s Wearhouse, Inc. | 6,600 | 216,414 |
54 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Pep Boys - Manny, Moe & Jack | 7,900 | 78,921 | ||||||
The TJX Cos., Inc. | 104,600 | 4,354,498 | ||||||
The Wet Seal, Inc., Class A * | 21,100 | 60,346 | ||||||
Tiffany & Co. | 17,500 | 1,106,350 | ||||||
Tractor Supply Co. | 10,000 | 962,400 | ||||||
Trans World Entertainment Corp. * | 1,500 | 5,100 | ||||||
TripAdvisor, Inc. * | 15,672 | 474,705 | ||||||
Tuesday Morning Corp. * | 2,500 | 14,925 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | 8,300 | 765,426 | ||||||
Urban Outfitters, Inc. * | 15,800 | 565,008 | ||||||
Vitamin Shoppe, Inc. * | 4,200 | 240,408 | ||||||
VOXX International Corp. * | 1,600 | 9,952 | ||||||
West Marine, Inc. * | 5,500 | 56,870 | ||||||
Williams-Sonoma, Inc. | 12,200 | 564,006 | ||||||
Winmark Corp. | 1,700 | 90,576 | ||||||
Zale Corp. * | 10,520 | 75,534 | ||||||
Zumiez, Inc. * | 3,000 | 75,930 | ||||||
94,162,092 | ||||||||
Semiconductors & Semiconductor Equipment 2.0% | ||||||||
Advanced Energy Industries, Inc. * | 6,900 | 81,489 | ||||||
Advanced Micro Devices, Inc. (d)* | 84,700 | 173,635 | ||||||
Altera Corp. | 45,100 | 1,374,648 | ||||||
Amkor Technology, Inc. (d)* | 21,000 | 90,720 | ||||||
Amtech Systems, Inc. * | 3,500 | 11,270 | ||||||
ANADIGICS, Inc. * | 8,150 | 11,899 | ||||||
Analog Devices, Inc. | 42,700 | 1,669,997 | ||||||
Applied Materials, Inc. | 179,398 | 1,901,619 | ||||||
Applied Micro Circuits Corp. * | 9,200 | 53,360 | ||||||
Atmel Corp. * | 56,400 | 263,106 | ||||||
ATMI, Inc. * | 4,400 | 86,900 | ||||||
AXT, Inc. * | 3,500 | 11,235 | ||||||
Broadcom Corp., Class A * | 72,400 | 2,283,134 | ||||||
Brooks Automation, Inc. | 11,885 | 85,810 | ||||||
Cabot Microelectronics Corp. | 2,960 | 88,208 | ||||||
Cavium, Inc. * | 7,000 | 232,260 | ||||||
CEVA, Inc. * | 3,433 | 52,010 | ||||||
Cirrus Logic, Inc. * | 9,800 | 399,448 | ||||||
Cohu, Inc. | 4,600 | 40,480 | ||||||
Cree, Inc. (d)* | 16,500 | 500,445 | ||||||
Cymer, Inc. * | 4,200 | 334,698 | ||||||
Cypress Semiconductor Corp. * | 19,500 | 193,245 | ||||||
Diodes, Inc. * | 6,412 | 97,206 | ||||||
DSP Group, Inc. * | 6,300 | 34,650 | ||||||
Entegris, Inc. * | 19,299 | 158,445 | ||||||
Entropic Communications, Inc. * | 14,200 | 68,302 | ||||||
Exar Corp. * | 9,834 | 84,081 | ||||||
Fairchild Semiconductor International, Inc. * | 17,800 | 209,328 | ||||||
First Solar, Inc. (d)* | 8,600 | 209,066 | ||||||
FormFactor, Inc. * | 8,500 | 38,760 | ||||||
GSI Technology, Inc. * | 8,500 | 47,515 | ||||||
GT Advanced Technologies, Inc. (d)* | 19,800 | 85,932 | ||||||
Hittite Microwave Corp. * | 4,500 | 254,880 | ||||||
Integrated Device Technology, Inc. * | 16,120 | 87,693 | ||||||
Integrated Silicon Solutions, Inc. * | 6,038 | 51,625 | ||||||
Intel Corp. | 713,932 | 15,438,779 | ||||||
International Rectifier Corp. * | 8,600 | 133,214 | ||||||
Intersil Corp., Class A | 15,364 | 108,316 | ||||||
IXYS Corp. * | 6,900 | 65,688 | ||||||
KLA-Tencor Corp. | 23,500 | 1,093,220 | ||||||
Kopin Corp. * | 10,700 | 40,232 | ||||||
Kulicke & Soffa Industries, Inc. * | 10,400 | 106,704 | ||||||
Lam Research Corp. * | 28,167 | 997,112 | ||||||
Lattice Semiconductor Corp. * | 25,100 | 97,388 | ||||||
Linear Technology Corp. | 32,900 | 1,028,454 | ||||||
LSI Corp. * | 79,587 | 545,171 | ||||||
Marvell Technology Group Ltd. | 65,400 | 516,006 | ||||||
Maxim Integrated Products, Inc. | 41,200 | 1,134,030 | ||||||
MEMC Electronic Materials, Inc. * | 38,900 | 98,028 | ||||||
Micrel, Inc. | 9,700 | 93,993 | ||||||
Microchip Technology, Inc. | 26,975 | 845,666 | ||||||
Micron Technology, Inc. * | 145,199 | 787,704 | ||||||
Microsemi Corp. * | 10,652 | 204,518 | ||||||
MIPS Technologies, Inc. * | 11,200 | 78,288 | ||||||
MKS Instruments, Inc. | 6,300 | 148,869 | ||||||
Monolithic Power Systems, Inc. * | 6,500 | 126,295 | ||||||
MoSys, Inc. * | 6,400 | 25,856 | ||||||
Nanometrics, Inc. * | 3,300 | 45,408 | ||||||
NVIDIA Corp. | 85,900 | 1,028,223 | ||||||
OmniVision Technologies, Inc. * | 7,800 | 111,540 | ||||||
ON Semiconductor Corp. * | 62,865 | 386,620 | ||||||
Pericom Semiconductor Corp. * | 6,600 | 51,018 | ||||||
Photronics, Inc. * | 12,900 | 63,081 | ||||||
PLX Technology, Inc. (d)* | 7,500 | 32,475 | ||||||
PMC-Sierra, Inc. * | 27,300 | 127,764 | ||||||
Power Integrations, Inc. | 3,000 | 88,740 | ||||||
Rambus, Inc. * | 19,600 | 94,864 | ||||||
RF Micro Devices, Inc. * | 30,020 | 132,388 | ||||||
Rudolph Technologies, Inc. * | 4,318 | 41,064 | ||||||
Semtech Corp. * | 8,000 | 199,760 | ||||||
Silicon Image, Inc. * | 19,500 | 85,800 | ||||||
Silicon Laboratories, Inc. * | 5,000 | 202,100 | ||||||
Skyworks Solutions, Inc. * | 26,689 | 624,523 | ||||||
Spansion, Inc., Class A * | 8,600 | 95,374 | ||||||
SunPower Corp. (d)* | 19,700 | 84,907 | ||||||
Supertex, Inc. * | 4,900 | 93,639 | ||||||
Teradyne, Inc. * | 24,559 | 359,052 | ||||||
Tessera Technologies, Inc. | 6,000 | 85,020 | ||||||
Texas Instruments, Inc. | 161,097 | 4,525,215 | ||||||
TriQuint Semiconductor, Inc. * | 19,310 | 90,757 | ||||||
Ultratech, Inc. * | 4,800 | 148,368 | ||||||
Veeco Instruments, Inc. * | 5,500 | 168,850 | ||||||
Volterra Semiconductor Corp. * | 4,600 | 83,582 | ||||||
Xilinx, Inc. | 36,300 | 1,189,188 | ||||||
45,319,950 | ||||||||
Software & Services 9.1% | ||||||||
Accelrys, Inc. * | 13,264 | 118,713 | ||||||
Accenture plc, Class A | 90,600 | 6,107,346 | ||||||
ACI Worldwide, Inc. * | 5,200 | 203,320 | ||||||
Activision Blizzard, Inc. | 59,432 | 647,214 | ||||||
Actuate Corp. * | 8,862 | 47,234 | ||||||
Acxiom Corp. * | 13,300 | 242,725 | ||||||
Adobe Systems, Inc. * | 70,210 | 2,387,140 | ||||||
Advent Software, Inc. * | 4,500 | 97,650 | ||||||
Akamai Technologies, Inc. * | 24,838 | 943,596 | ||||||
Alliance Data Systems Corp. * | 7,000 | 1,001,350 |
See financial notes 55
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ancestry.com, Inc. * | 3,000 | 94,800 | ||||||
Angie’s List, Inc. (d)* | 8,000 | 91,520 | ||||||
ANSYS, Inc. * | 13,086 | 927,536 | ||||||
AOL, Inc. * | 14,122 | 484,808 | ||||||
Aspen Technology, Inc. * | 13,400 | 332,052 | ||||||
Autodesk, Inc. * | 31,500 | 1,002,960 | ||||||
Automatic Data Processing, Inc. | 69,400 | 4,010,626 | ||||||
Bankrate, Inc. * | 8,700 | 93,351 | ||||||
Bazaarvoice, Inc. (d)* | 7,800 | 99,528 | ||||||
Blackbaud, Inc. | 6,000 | 142,620 | ||||||
Blucora, Inc. * | 6,872 | 120,604 | ||||||
BMC Software, Inc. * | 21,300 | 866,910 | ||||||
Booz Allen Hamilton Holding Corp. | 12,300 | 164,574 | ||||||
Bottomline Technologies, Inc. * | 5,000 | 117,000 | ||||||
Broadridge Financial Solutions, Inc. | 17,725 | 406,789 | ||||||
BroadSoft, Inc. * | 3,700 | 141,414 | ||||||
CA, Inc. | 50,508 | 1,137,440 | ||||||
CACI International, Inc., Class A * | 4,100 | 206,763 | ||||||
Cadence Design Systems, Inc. * | 38,300 | 484,878 | ||||||
Cardtronics, Inc. * | 5,000 | 142,050 | ||||||
CIBER, Inc. * | 7,300 | 22,776 | ||||||
Citrix Systems, Inc. * | 26,300 | 1,625,603 | ||||||
Cognizant Technology Solutions Corp., Class A * | 42,200 | 2,812,630 | ||||||
CommVault Systems, Inc. * | 5,900 | 368,573 | ||||||
Computer Sciences Corp. | 21,138 | 643,652 | ||||||
Compuware Corp. * | 27,900 | 241,614 | ||||||
comScore, Inc. * | 5,400 | 76,518 | ||||||
Comverse Technology, Inc. * | 25,500 | 168,045 | ||||||
Concur Technologies, Inc. * | 6,100 | 404,003 | ||||||
Constant Contact, Inc. * | 5,000 | 61,700 | ||||||
Convergys Corp. | 16,000 | 268,960 | ||||||
CoreLogic, Inc. * | 13,800 | 328,440 | ||||||
Cornerstone OnDemand, Inc. * | 3,900 | 109,161 | ||||||
CoStar Group, Inc. * | 3,800 | 315,020 | ||||||
CSG Systems International, Inc. * | 5,400 | 111,294 | ||||||
DealerTrack Holdings, Inc. * | 6,100 | 166,713 | ||||||
Demand Media, Inc. * | 8,100 | 69,093 | ||||||
Demandware, Inc. (d)* | 2,800 | 83,132 | ||||||
Digimarc Corp. | 2,142 | 42,069 | ||||||
Digital River, Inc. * | 7,100 | 101,814 | ||||||
DST Systems, Inc. | 4,300 | 245,272 | ||||||
Dynamics Research Corp. * | 1,200 | 7,740 | ||||||
EarthLink, Inc. | 17,050 | 108,097 | ||||||
eBay, Inc. * | 165,448 | 7,989,484 | ||||||
Ebix, Inc. (d) | 7,200 | 156,888 | ||||||
Edgewater Technology, Inc. * | 767 | 2,669 | ||||||
Electronic Arts, Inc. * | 47,100 | 581,685 | ||||||
Ellie Mae, Inc. * | 3,200 | 80,000 | ||||||
EPAM Systems, Inc. * | 4,800 | 86,304 | ||||||
EPIQ Systems, Inc. | 6,125 | 74,786 | ||||||
Equinix, Inc. * | 6,665 | 1,202,433 | ||||||
Euronet Worldwide, Inc. * | 5,500 | 111,595 | ||||||
ExactTarget, Inc. * | 4,800 | 111,936 | ||||||
ExlService Holdings, Inc. * | 3,600 | 106,704 | ||||||
Facebook, Inc., Class A * | 71,500 | 1,509,723 | ||||||
FactSet Research Systems, Inc. | 5,850 | 529,718 | ||||||
Fair Isaac Corp. | 4,744 | 221,070 | ||||||
FalconStor Software, Inc. * | 1,200 | 2,664 | ||||||
Fidelity National Information Services, Inc. | 35,206 | 1,157,221 | ||||||
Fiserv, Inc. * | 19,100 | 1,431,354 | ||||||
FleetCor Technologies, Inc. * | 6,400 | 303,424 | ||||||
Forrester Research, Inc. | 4,100 | 118,654 | ||||||
Fortinet, Inc. * | 18,500 | 358,345 | ||||||
Gartner, Inc. * | 13,300 | 617,253 | ||||||
Genpact Ltd. | 18,800 | 331,068 | ||||||
Global Cash Access Holdings, Inc. * | 10,700 | 75,435 | ||||||
Global Payments, Inc. | 11,440 | 489,060 | ||||||
Google, Inc., Class A * | 37,765 | 25,671,514 | ||||||
GSE Systems, Inc. * | 2,424 | 4,339 | ||||||
Guidewire Software, Inc. * | 2,700 | 82,728 | ||||||
Heartland Payment Systems, Inc. | 4,500 | 117,360 | ||||||
Higher One Holdings, Inc. (d)* | 7,900 | 99,777 | ||||||
IAC/InterActiveCorp | 11,372 | 549,836 | ||||||
iGATE Corp. * | 5,100 | 81,855 | ||||||
Imperva, Inc. * | 2,600 | 81,978 | ||||||
Infoblox, Inc. * | 5,200 | 86,372 | ||||||
Informatica Corp. * | 15,100 | 409,814 | ||||||
Information Services Group, Inc. (d)* | 7,500 | 9,075 | ||||||
Interactive Intelligence Group, Inc. * | 2,900 | 91,959 | ||||||
Internap Network Services Corp. * | 13,200 | 90,420 | ||||||
International Business Machines Corp. | 153,310 | 29,823,394 | ||||||
IntraLinks Holdings, Inc. * | 7,600 | 42,484 | ||||||
Intuit, Inc. | 38,830 | 2,307,279 | ||||||
j2 Global, Inc. | 6,000 | 180,240 | ||||||
Jack Henry & Associates, Inc. | 12,000 | 456,000 | ||||||
JDA Software Group, Inc. * | 6,000 | 228,840 | ||||||
Jive Software, Inc. (d)* | 8,600 | 96,320 | ||||||
Kenexa Corp. * | 3,800 | 174,648 | ||||||
Lender Processing Services, Inc. | 11,157 | 268,995 | ||||||
LinkedIn Corp., Class A * | 9,400 | 1,005,142 | ||||||
Lionbridge Technologies, Inc. * | 12,400 | 39,308 | ||||||
Liquidity Services, Inc. * | 3,400 | 140,182 | ||||||
LivePerson, Inc. * | 6,800 | 106,692 | ||||||
LogMeIn, Inc. * | 4,400 | 108,592 | ||||||
LookSmart Ltd. * | 480 | 394 | ||||||
Manhattan Associates, Inc. * | 4,300 | 258,000 | ||||||
ManTech International Corp., Class A | 5,000 | 114,850 | ||||||
MasterCard, Inc., Class A | 15,300 | 7,052,229 | ||||||
Mattersight Corp. * | 190 | 1,051 | ||||||
MAXIMUS, Inc. | 4,800 | 264,864 | ||||||
Mentor Graphics Corp. * | 11,200 | 173,824 | ||||||
MICROS Systems, Inc. * | 11,400 | 517,446 | ||||||
Microsoft Corp. | 1,076,650 | 30,722,208 | ||||||
MicroStrategy, Inc., Class A * | 1,256 | 118,654 | ||||||
Millennial Media, Inc. (d)* | 6,100 | 97,783 | ||||||
ModusLink Global Solutions, Inc. * | 10,450 | 30,619 | ||||||
MoneyGram International, Inc. * | 9,037 | 140,435 | ||||||
Monotype Imaging Holdings, Inc. | 6,500 | 99,515 | ||||||
Monster Worldwide, Inc. * | 14,300 | 88,946 | ||||||
Move, Inc. * | 8,630 | 71,543 | ||||||
NetScout Systems, Inc. * | 7,300 | 180,529 | ||||||
NetSuite, Inc. * | 3,900 | 247,689 | ||||||
NeuStar, Inc., Class A * | 9,300 | 340,287 | ||||||
NIC, Inc. | 8,000 | 114,400 |
56 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Nuance Communications, Inc. * | 34,674 | 771,843 | ||||||
OpenTable, Inc. (d)* | 2,500 | 117,425 | ||||||
Opnet Technologies, Inc. | 2,600 | 110,318 | ||||||
Oracle Corp. | 543,449 | 16,874,091 | ||||||
Parametric Technology Corp. * | 15,680 | 316,422 | ||||||
Paychex, Inc. | 45,000 | 1,459,350 | ||||||
Pegasystems, Inc. | 3,700 | 86,839 | ||||||
Perficient, Inc. * | 7,800 | 88,686 | ||||||
PRGX Global, Inc. * | 2,000 | 15,640 | ||||||
Progress Software Corp. * | 9,300 | 183,396 | ||||||
QLIK Technologies, Inc. * | 11,200 | 206,192 | ||||||
Rackspace Hosting, Inc. * | 16,500 | 1,050,885 | ||||||
RealNetworks, Inc. * | 4,725 | 35,768 | ||||||
RealPage, Inc. * | 5,900 | 128,797 | ||||||
Red Hat, Inc. * | 26,800 | 1,317,756 | ||||||
Reis, Inc. * | 1,400 | 16,373 | ||||||
Rovi Corp. * | 12,812 | 173,346 | ||||||
Saba Software, Inc. * | 4,549 | 45,854 | ||||||
SAIC, Inc. | 44,000 | 483,560 | ||||||
Salesforce.com, Inc. * | 18,000 | 2,627,640 | ||||||
Sapient Corp. * | 16,100 | 165,508 | ||||||
SeaChange International, Inc. * | 6,350 | 57,468 | ||||||
ServiceNow, Inc. (d)* | 3,200 | 98,080 | ||||||
ServiceSource International, Inc. * | 9,500 | 85,595 | ||||||
Solarwinds, Inc. * | 8,600 | 435,074 | ||||||
Solera Holdings, Inc. | 10,100 | 472,781 | ||||||
Sourcefire, Inc. * | 3,900 | 166,881 | ||||||
Splunk, Inc. * | 3,700 | 103,785 | ||||||
SS&C Technologies Holdings, Inc. * | 4,500 | 108,135 | ||||||
StarTek, Inc. * | 3,900 | 11,310 | ||||||
Support.com, Inc. * | 11,600 | 53,824 | ||||||
Symantec Corp. * | 101,473 | 1,845,794 | ||||||
Synchronoss Technologies, Inc. * | 4,700 | 96,303 | ||||||
Synopsys, Inc. * | 20,584 | 662,805 | ||||||
Syntel, Inc. | 2,500 | 149,025 | ||||||
Take-Two Interactive Software, Inc. * | 12,900 | 143,835 | ||||||
Tangoe, Inc. * | 5,800 | 74,936 | ||||||
TeleCommunication Systems, Inc., Class A * | 10,800 | 22,896 | ||||||
TeleTech Holdings, Inc. * | 5,000 | 84,200 | ||||||
Teradata Corp. * | 24,100 | 1,646,271 | ||||||
The Active Network, Inc. * | 7,500 | 66,450 | ||||||
The Hackett Group, Inc. * | 7,200 | 28,008 | ||||||
The Western Union Co. | 85,632 | 1,087,526 | ||||||
THQ, Inc. (d)* | 1,192 | 3,373 | ||||||
TIBCO Software, Inc. * | 23,200 | 584,872 | ||||||
TiVo, Inc. * | 17,800 | 180,670 | ||||||
TNS, Inc. * | 5,000 | 71,600 | ||||||
Total System Services, Inc. | 22,804 | 512,862 | ||||||
Tyler Technologies, Inc. * | 4,000 | 191,240 | ||||||
Ultimate Software Group, Inc. * | 4,200 | 425,712 | ||||||
Unisys Corp. * | 6,200 | 105,710 | ||||||
United Online, Inc. | 17,350 | 92,996 | ||||||
Unwired Planet, Inc. * | 7,771 | 10,957 | ||||||
ValueClick, Inc. * | 8,500 | 141,695 | ||||||
Vantiv, Inc., Class A * | 4,600 | 92,828 | ||||||
VeriFone Systems, Inc. * | 15,400 | 456,456 | ||||||
Verint Systems, Inc. * | 3,200 | 87,264 | ||||||
VeriSign, Inc. * | 22,275 | 825,734 | ||||||
Virnetx Holding Corp. (d)* | 5,500 | 165,275 | ||||||
Virtusa Corp. * | 4,700 | 80,652 | ||||||
Visa, Inc., Class A | 74,600 | 10,351,496 | ||||||
VMware, Inc., Class A * | 12,000 | 1,017,240 | ||||||
Web.com Group, Inc. * | 5,423 | 85,575 | ||||||
WebMD Health Corp. * | 7,074 | 105,473 | ||||||
Websense, Inc. * | 7,500 | 99,150 | ||||||
WEX, Inc. * | 5,700 | 420,546 | ||||||
Workday, Inc., Class A * | 3,200 | 155,200 | ||||||
Yahoo!, Inc. * | 146,744 | �� | 2,466,767 | |||||
Yelp, Inc. (d)* | 4,300 | 103,630 | ||||||
Zynga, Inc., Class A * | 65,200 | 146,700 | ||||||
204,644,656 | ||||||||
Technology Hardware & Equipment 6.9% | ||||||||
3D Systems Corp. (d)* | 6,800 | 295,800 | ||||||
Acme Packet, Inc. * | 7,000 | 115,780 | ||||||
ADTRAN, Inc. (d) | 7,000 | 118,230 | ||||||
Agilysys, Inc. * | 4,860 | 39,706 | ||||||
Amphenol Corp., Class A | 22,700 | 1,364,951 | ||||||
Anaren, Inc. * | 5,300 | 95,559 | ||||||
Anixter International, Inc. | 3,300 | 193,446 | ||||||
Apple, Inc. | 133,800 | 79,624,380 | ||||||
Arris Group, Inc. * | 16,175 | 222,244 | ||||||
Arrow Electronics, Inc. * | 15,700 | 553,111 | ||||||
Aruba Networks, Inc. * | 13,700 | 248,929 | ||||||
Aviat Networks, Inc. * | 10,677 | 24,344 | ||||||
Avid Technology, Inc. * | 3,756 | 22,048 | ||||||
Avnet, Inc. * | 20,088 | 575,521 | ||||||
AVX Corp. | 14,000 | 137,760 | ||||||
Badger Meter, Inc. | 4,000 | 171,360 | ||||||
Benchmark Electronics, Inc. * | 7,830 | 116,041 | ||||||
Black Box Corp. | 4,100 | 89,872 | ||||||
Brocade Communications Systems, Inc. * | 64,935 | 344,155 | ||||||
Checkpoint Systems, Inc. * | 4,600 | 37,352 | ||||||
Ciena Corp. * | 12,970 | 160,958 | ||||||
Cisco Systems, Inc. | 754,909 | 12,939,140 | ||||||
Cognex Corp. | 4,900 | 178,654 | ||||||
Coherent, Inc. * | 2,800 | 127,820 | ||||||
Comtech Telecommunications Corp. | 2,975 | 74,881 | ||||||
Corning, Inc. | 211,607 | 2,486,382 | ||||||
Cray, Inc. * | 7,600 | 92,492 | ||||||
CTS Corp. | 8,800 | 72,864 | ||||||
Daktronics, Inc. | 8,700 | 76,299 | ||||||
Dell, Inc. | 205,100 | 1,893,073 | ||||||
Diebold, Inc. | 9,000 | 267,750 | ||||||
Digi International, Inc. * | 6,000 | 56,520 | ||||||
Dolby Laboratories, Inc., Class A * | 8,800 | 277,992 | ||||||
DTS, Inc. * | 4,300 | 90,214 | ||||||
Echelon Corp. * | 7,200 | 23,832 | ||||||
EchoStar Corp., Class A * | 7,540 | 239,470 | ||||||
Electro Rent Corp. | 5,100 | 80,172 | ||||||
Electro Scientific Industries, Inc. | 7,100 | 75,828 | ||||||
Electronics for Imaging, Inc. * | 6,400 | 111,104 | ||||||
EMC Corp. * | 299,486 | 7,313,448 | ||||||
Emulex Corp. * | 14,100 | 98,136 | ||||||
Extreme Networks, Inc. * | 19,500 | 63,570 | ||||||
F5 Networks, Inc. * | 11,500 | 948,520 | ||||||
FARO Technologies, Inc. * | 3,000 | 120,600 | ||||||
FEI Co. | 5,400 | 297,270 |
See financial notes 57
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Finisar Corp. * | 12,000 | 138,240 | ||||||
FLIR Systems, Inc. | 21,900 | 425,517 | ||||||
Frequency Electronics, Inc. * | 500 | 4,195 | ||||||
Fusion-io, Inc. (d)* | 9,500 | 224,200 | ||||||
Gerber Scientific, Inc. (a)(c)* | 8,900 | — | ||||||
Harmonic, Inc. * | 20,042 | 86,982 | ||||||
Harris Corp. | 17,000 | 778,260 | ||||||
Hewlett-Packard Co. | 280,136 | 3,879,884 | ||||||
Hutchinson Technology, Inc. (d)* | 6,000 | 8,400 | ||||||
I.D. Systems, Inc. * | 5,500 | 28,875 | ||||||
Identive Group, Inc. * | 1,200 | 1,440 | ||||||
Imation Corp. * | 5,500 | 25,135 | ||||||
Immersion Corp. * | 4,300 | 18,576 | ||||||
Infinera Corp. * | 16,400 | 80,688 | ||||||
Ingram Micro, Inc., Class A * | 19,900 | 302,480 | ||||||
Insight Enterprises, Inc. * | 4,650 | 75,190 | ||||||
Intellicheck Mobilisa, Inc. * | 500 | 735 | ||||||
InterDigital, Inc. | 6,700 | 255,203 | ||||||
Intermec, Inc. * | 9,600 | 65,088 | ||||||
InvenSense, Inc. (d)* | 7,000 | 78,400 | ||||||
IPG Photonics Corp. * | 4,600 | 244,168 | ||||||
Itron, Inc. * | 5,700 | 234,042 | ||||||
Ixia * | 8,200 | 114,882 | ||||||
Jabil Circuit, Inc. | 25,400 | 440,436 | ||||||
JDS Uniphase Corp. * | 29,553 | 286,369 | ||||||
Juniper Networks, Inc. * | 73,365 | 1,215,658 | ||||||
Lexmark International, Inc., Class A (d) | 10,900 | 231,734 | ||||||
LightPath Technologies, Inc., Class A * | 75 | 71 | ||||||
Littelfuse, Inc. | 3,700 | 198,320 | ||||||
Loral Space & Communications, Inc. | 1,500 | 117,990 | ||||||
Maxwell Technologies, Inc. * | 4,500 | 29,295 | ||||||
Measurement Specialties, Inc. * | 3,200 | 104,352 | ||||||
Mercury Computer Systems, Inc. * | 3,600 | 29,502 | ||||||
Methode Electronics, Inc. | 9,500 | 96,140 | ||||||
MOCON, Inc. | 600 | 9,078 | ||||||
Molex, Inc. | 19,125 | 496,676 | ||||||
Motorola Solutions, Inc. | 40,779 | 2,107,459 | ||||||
MTS Systems Corp. | 3,781 | 190,600 | ||||||
Multi-Fineline Electronix, Inc. * | 3,800 | 80,332 | ||||||
National Instruments Corp. | 13,212 | 311,275 | ||||||
NCR Corp. * | 23,800 | 506,464 | ||||||
NetApp, Inc. * | 50,700 | 1,363,830 | ||||||
NETGEAR, Inc. * | 6,000 | 213,060 | ||||||
Newport Corp. * | 8,500 | 91,970 | ||||||
OCZ Technology Group, Inc. (d)* | 10,200 | 13,770 | ||||||
Oplink Communications, Inc. * | 4,157 | 61,773 | ||||||
OSI Systems, Inc. * | 3,700 | 293,225 | ||||||
Palo Alto Networks, Inc. * | 1,500 | 82,470 | ||||||
Park Electrochemical Corp. | 3,600 | 89,352 | ||||||
PC Connection, Inc. | 7,000 | 72,030 | ||||||
PC-Tel, Inc. | 8,900 | 58,028 | ||||||
Performance Technologies, Inc. * | 1,600 | 1,904 | ||||||
Plantronics, Inc. | 6,000 | 194,640 | ||||||
Plexus Corp. * | 3,700 | 99,567 | ||||||
Polycom, Inc. * | 22,400 | 224,448 | ||||||
Power-One, Inc. * | 23,800 | 95,914 | ||||||
Presstek, Inc. * | 5,100 | 2,524 | ||||||
Pulse Electronics Corp. * | 11,500 | 6,325 | ||||||
QLogic Corp. * | 17,044 | 159,873 | ||||||
QUALCOMM, Inc. | 243,100 | 14,239,582 | ||||||
Radisys Corp. * | 7,200 | 20,448 | ||||||
Research Frontiers, Inc. (d)* | 2,800 | 11,648 | ||||||
Richardson Electronics Ltd. | 4,800 | 55,920 | ||||||
Riverbed Technology, Inc. * | 22,700 | 419,269 | ||||||
Rofin-Sinar Technologies, Inc. * | 3,800 | 69,198 | ||||||
Rogers Corp. * | 2,500 | 98,525 | ||||||
SanDisk Corp. * | 33,600 | 1,403,136 | ||||||
Sanmina-SCI Corp. * | 20,900 | 185,801 | ||||||
ScanSource, Inc. * | 3,200 | 93,600 | ||||||
Seagate Technology plc | 49,766 | 1,359,607 | ||||||
Sonus Networks, Inc. * | 44,900 | 83,514 | ||||||
STEC, Inc. * | 6,200 | 36,394 | ||||||
Super Micro Computer, Inc. * | 8,200 | 64,862 | ||||||
Sycamore Networks, Inc. | 2,790 | 16,126 | ||||||
Symmetricom, Inc. * | 11,950 | 73,492 | ||||||
Synaptics, Inc. * | 5,250 | 121,590 | ||||||
SYNNEX Corp. * | 3,000 | 97,170 | ||||||
TE Connectivity Ltd. | 60,200 | 1,937,236 | ||||||
Tech Data Corp. * | 5,300 | 234,843 | ||||||
Tellabs, Inc. | 38,064 | 111,147 | ||||||
TESSCO Technologies, Inc. | 4,025 | 83,720 | ||||||
TransAct Technologies, Inc. * | 1,500 | 11,610 | ||||||
Trimble Navigation Ltd. * | 17,492 | 825,273 | ||||||
TTM Technologies, Inc. * | 11,000 | 99,000 | ||||||
Ubiquiti Networks, Inc. (d)* | 6,900 | 81,420 | ||||||
Universal Display Corp. * | 5,800 | 190,124 | ||||||
ViaSat, Inc. * | 5,500 | 213,620 | ||||||
Vishay Intertechnology, Inc. * | 18,588 | 153,909 | ||||||
Vishay Precision Group, Inc. * | 5,620 | 73,341 | ||||||
Western Digital Corp. | 32,600 | 1,115,898 | ||||||
Xerox Corp. | 186,756 | 1,202,709 | ||||||
Xybernaut Corp. (a)(c)* | 1,400 | — | ||||||
Zebra Technologies Corp., Class A * | 6,375 | 229,054 | ||||||
Zygo Corp. * | 7,000 | 130,340 | ||||||
154,347,738 | ||||||||
Telecommunication Services 2.7% | ||||||||
8x8, Inc. * | 10,000 | 65,500 | ||||||
Alaska Communications Systems Group, Inc. (d) | 5,000 | 11,500 | ||||||
AT&T, Inc. | 823,156 | 28,472,966 | ||||||
Atlantic Tele-Network, Inc. | 3,250 | 134,680 | ||||||
CenturyLink, Inc. | 88,878 | 3,411,138 | ||||||
Cincinnati Bell, Inc. * | 22,268 | 116,016 | ||||||
Clearwire Corp., Class A (d)* | 120,600 | 241,200 | ||||||
Cogent Communications Group, Inc. | 9,900 | 214,929 | ||||||
Consolidated Communications Holdings, Inc. | 5,253 | 81,107 | ||||||
Crown Castle International Corp. * | 41,276 | 2,755,173 | ||||||
Frontier Communications Corp. (d) | 138,868 | 655,457 | ||||||
General Communication, Inc., Class A * | 10,500 | 91,770 | ||||||
HickoryTech Corp. | 4,600 | 48,990 | ||||||
Iridium Communications, Inc. * | 11,800 | 87,202 | ||||||
Leap Wireless International, Inc. * | 7,700 | 41,118 | ||||||
Level 3 Communications, Inc. * | 23,006 | 471,623 | ||||||
Lumos Networks Corp. | 1,500 | 11,805 | ||||||
MetroPCS Communications, Inc. * | 44,500 | 454,345 |
58 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
NII Holdings, Inc. (d)* | 22,900 | 182,513 | ||||||
NTELOS Holdings Corp. | 4,500 | 68,625 | ||||||
Premiere Global Services, Inc. * | 8,100 | 68,850 | ||||||
SBA Communications Corp., Class A * | 17,100 | 1,139,373 | ||||||
Shenandoah Telecommunications Co. | 2,500 | 39,300 | ||||||
Sprint Nextel Corp. * | 428,130 | 2,371,840 | ||||||
Telephone & Data Systems, Inc. | 14,222 | 353,701 | ||||||
tw telecom, Inc. * | 21,600 | 550,152 | ||||||
United States Cellular Corp. * | 2,400 | 88,776 | ||||||
USA Mobility, Inc. | 5,500 | 60,775 | ||||||
Verizon Communications, Inc. | 406,472 | 18,144,910 | ||||||
Vonage Holdings Corp. * | 36,400 | 82,628 | ||||||
Warwick Valley Telephone Co. | 1,100 | 14,454 | ||||||
Windstream Corp. (d) | 81,969 | 781,984 | ||||||
61,314,400 | ||||||||
Transportation 1.8% | ||||||||
Alaska Air Group, Inc. * | 10,100 | 386,224 | ||||||
Allegiant Travel Co. * | 2,000 | 145,480 | ||||||
AMERCO | 1,000 | 115,540 | ||||||
Arkansas Best Corp. | 1,100 | 8,855 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 3,800 | 208,962 | ||||||
Avis Budget Group, Inc. * | 13,900 | 229,767 | ||||||
C.H. Robinson Worldwide, Inc. | 23,000 | 1,387,590 | ||||||
Con-way, Inc. | 7,500 | 218,325 | ||||||
Covenant Transport Group, Inc., Class A * | 3,000 | 13,920 | ||||||
CSX Corp. | 148,400 | 3,037,748 | ||||||
Delta Air Lines, Inc. * | 117,900 | 1,135,377 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 4,000 | 308,000 | ||||||
Expeditors International of Washington, Inc. | 29,400 | 1,076,334 | ||||||
FedEx Corp. | 41,663 | 3,832,579 | ||||||
Forward Air Corp. | 4,600 | 153,502 | ||||||
Genco Shipping & Trading Ltd. (d)* | 5,500 | 16,720 | ||||||
Genesee & Wyoming, Inc., Class A * | 6,000 | 434,820 | ||||||
Heartland Express, Inc. | 8,941 | 124,727 | ||||||
Hertz Global Holdings, Inc. * | 42,000 | 557,340 | ||||||
Hub Group, Inc., Class A * | 4,400 | 136,444 | ||||||
J.B. Hunt Transport Services, Inc. | 13,500 | 792,450 | ||||||
JetBlue Airways Corp. * | 30,962 | 163,789 | ||||||
Kansas City Southern | 15,650 | 1,259,199 | ||||||
Kirby Corp. * | 8,600 | 494,328 | ||||||
Knight Transportation, Inc. | 9,050 | 136,836 | ||||||
Landstar System, Inc. | 6,600 | 334,290 | ||||||
Matson, Inc. | 6,400 | 136,000 | ||||||
Norfolk Southern Corp. | 45,200 | 2,773,020 | ||||||
Old Dominion Freight Line, Inc. * | 12,112 | 406,237 | ||||||
Pacer International, Inc. * | 2,800 | 10,024 | ||||||
Park-Ohio Holdings Corp. * | 3,600 | 79,632 | ||||||
Republic Airways Holdings, Inc. * | 7,500 | 35,025 | ||||||
Roadrunner Transportation Systems, Inc. * | 4,900 | 85,407 | ||||||
Ryder System, Inc. | 6,400 | 288,768 | ||||||
Saia, Inc. * | 6,100 | 137,860 | ||||||
SkyWest, Inc. | 7,000 | 76,650 | ||||||
Southwest Airlines Co. | 106,315 | 937,698 | ||||||
Spirit Airlines, Inc. * | 5,600 | 98,280 | ||||||
Swift Transportation Co. * | 19,000 | 185,250 | ||||||
Union Pacific Corp. | 67,600 | 8,316,828 | ||||||
United Continental Holdings, Inc. * | 46,200 | 887,502 | ||||||
United Parcel Service, Inc., Class B | 102,580 | 7,513,985 | ||||||
US Airways Group, Inc. * | 20,900 | 254,562 | ||||||
UTI Worldwide, Inc. | 14,600 | 202,794 | ||||||
Werner Enterprises, Inc. | 5,832 | 135,069 | ||||||
Wesco Aircraft Holdings, Inc. * | 7,900 | 105,465 | ||||||
39,375,202 | ||||||||
Utilities 3.6% | ||||||||
AGL Resources, Inc. | 16,129 | 658,547 | ||||||
ALLETE, Inc. | 5,233 | 217,798 | ||||||
Alliant Energy Corp. | 15,600 | 697,320 | ||||||
Ameren Corp. | 33,600 | 1,104,768 | ||||||
American DG Energy, Inc. * | 11,400 | 28,728 | ||||||
American Electric Power Co., Inc. | 69,220 | 3,076,137 | ||||||
American States Water Co. | 2,000 | 88,040 | ||||||
American Water Works Co., Inc. | 24,200 | 889,108 | ||||||
Aqua America, Inc. | 18,994 | 482,258 | ||||||
Artesian Resources Corp., Class A | 4,000 | 92,040 | ||||||
Atmos Energy Corp. | 12,200 | 438,834 | ||||||
Avista Corp. | 7,800 | 198,276 | ||||||
Black Hills Corp. | 5,600 | 200,312 | ||||||
California Water Service Group | 6,000 | 110,520 | ||||||
Calpine Corp. * | 55,200 | 971,520 | ||||||
CenterPoint Energy, Inc. | 60,200 | 1,304,534 | ||||||
CH Energy Group, Inc. | 1,900 | 123,557 | ||||||
Chesapeake Utilities Corp. | 2,847 | 133,724 | ||||||
Cleco Corp. | 8,700 | 375,405 | ||||||
CMS Energy Corp. | 37,800 | 919,296 | ||||||
Connecticut Water Service, Inc. | 5,100 | 156,213 | ||||||
Consolidated Edison, Inc. | 41,200 | 2,487,656 | ||||||
Dominion Resources, Inc. | 81,780 | 4,316,348 | ||||||
DTE Energy Co. | 24,501 | 1,521,512 | ||||||
Duke Energy Corp. | 100,473 | 6,600,071 | ||||||
Dynegy, Inc. * | 12,000 | 224,400 | ||||||
Edison International | 45,910 | 2,155,015 | ||||||
El Paso Electric Co. | 5,300 | 180,147 | ||||||
Entergy Corp. | 25,300 | 1,836,274 | ||||||
Exelon Corp. | 122,069 | 4,367,629 | ||||||
FirstEnergy Corp. | 59,456 | 2,718,328 | ||||||
Genie Energy Ltd., Class B | 12,800 | 89,728 | ||||||
GenOn Energy, Inc. * | 112,304 | 288,621 | ||||||
Great Plains Energy, Inc. | 21,541 | 483,380 | ||||||
Hawaiian Electric Industries, Inc. | 13,300 | 344,204 | ||||||
IDACORP, Inc. | 7,100 | 317,512 | ||||||
Integrys Energy Group, Inc. | 10,540 | 569,582 | ||||||
ITC Holdings Corp. | 7,100 | 565,302 | ||||||
MDU Resources Group, Inc. | 26,625 | 578,561 | ||||||
MGE Energy, Inc. | 3,300 | 173,712 | ||||||
Middlesex Water Co. | 4,500 | 87,030 | ||||||
National Fuel Gas Co. | 11,600 | 611,320 | ||||||
New Jersey Resources Corp. | 6,225 | 276,764 | ||||||
NextEra Energy, Inc. | 60,300 | 4,224,618 | ||||||
NiSource, Inc. | 39,664 | 1,010,242 | ||||||
Northeast Utilities | 44,143 | 1,734,820 |
See financial notes 59
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Northwest Natural Gas Co. | 3,800 | 176,814 | ||||||
NorthWestern Corp. | 7,100 | 254,251 | ||||||
NRG Energy, Inc. | 32,500 | 700,700 | ||||||
NV Energy, Inc. | 32,076 | 609,765 | ||||||
OGE Energy Corp. | 13,900 | 800,362 | ||||||
ONEOK, Inc. | 28,900 | 1,366,970 | ||||||
Ormat Technologies, Inc. | 8,600 | 163,658 | ||||||
Otter Tail Corp. | 4,100 | 98,933 | ||||||
Pepco Holdings, Inc. | 32,200 | 639,814 | ||||||
PG&E Corp. | 60,700 | 2,580,964 | ||||||
Piedmont Natural Gas Co., Inc. | 9,300 | 296,391 | ||||||
Pinnacle West Capital Corp. | 15,400 | 815,738 | ||||||
PNM Resources, Inc. | 11,200 | 248,192 | ||||||
Portland General Electric Co. | 10,900 | 298,660 | ||||||
PPL Corp. | 81,800 | 2,419,644 | ||||||
Public Service Enterprise Group, Inc. | 72,300 | 2,316,492 | ||||||
Questar Corp. | 24,700 | 499,928 | ||||||
SCANA Corp. | 18,505 | 908,225 | ||||||
Sempra Energy | 32,075 | 2,237,231 | ||||||
SJW Corp. | 3,200 | 77,568 | ||||||
South Jersey Industries, Inc. | 4,200 | 212,478 | ||||||
Southwest Gas Corp. | 6,500 | 282,555 | ||||||
TECO Energy, Inc. | 29,100 | 520,017 | ||||||
The AES Corp. | 87,396 | 913,288 | ||||||
The Empire District Electric Co. | 6,500 | 141,115 | ||||||
The Laclede Group, Inc. | 3,300 | 137,412 | ||||||
The Southern Co. | 124,700 | 5,840,948 | ||||||
The York Water Co. | 6,100 | 105,957 | ||||||
UGI Corp. | 16,000 | 516,640 | ||||||
UIL Holdings Corp. | 6,966 | 251,960 | ||||||
Unitil Corp. | 3,600 | 95,724 | ||||||
UNS Energy Corp. | 5,700 | 243,048 | ||||||
Vectren Corp. | 11,366 | 336,093 | ||||||
Westar Energy, Inc. | 17,500 | 519,750 | ||||||
WGL Holdings, Inc. | 7,300 | 290,321 | ||||||
Wisconsin Energy Corp. | 32,100 | 1,234,887 | ||||||
Xcel Energy, Inc. | 68,595 | 1,937,809 | ||||||
81,120,013 | ||||||||
Total Common Stock | ||||||||
(Cost $1,684,732,545) | 2,208,790,277 | |||||||
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 | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. (c)* | 33 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 1.1% of net assets | ||||||||
Time Deposit 1.0% | ||||||||
Societe Generale | ||||||||
0.03%, 11/01/12 | 22,399,356 | 22,399,356 | ||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.07%, 12/20/12 (e)(f) | 160,000 | 159,985 | ||||||
0.08%, 12/20/12 (e)(f) | 100,000 | 99,990 | ||||||
0.10%, 12/20/12 (e)(f) | 145,000 | 144,980 | ||||||
0.11%, 12/20/12 (e)(f) | 1,294,000 | 1,293,815 | ||||||
1,698,770 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $24,098,126) | 24,098,126 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.8% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund | 18,504,950 | 18,504,950 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $18,504,950) | 18,504,950 | |||||||
End of collateral invested for securities on loan. |
60 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
At 10/31/12 tax basis cost of the fund’s investments was $1,721,800,478 and the unrealized appreciation and depreciation were $678,801,448 and ($167,713,523), respectively, with a net unrealized appreciation of $511,087,925.
* | 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 $54,704 or 0.0% of net assets. | |
(d) | All or a portion of this security is on loan. | |
(e) | All or a portion of this security is held as collateral for open futures contracts. | |
(f) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/21/12 | 45 | 3,673,350 | (74,614 | ) | ||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 310 | 21,805,400 | (427,367 | ) | ||||||||
Net unrealized losses | (501,981 | ) | ||||||||||
See financial notes 61
Table of Contents
Schwab International Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .5% | Common Stock | 1,162,030,883 | 1,379,481,700 | ||||||||
0 | .6% | Preferred Stock | 5,868,851 | 8,184,188 | ||||||||
1 | .5% | Other Investment Company | 21,315,494 | 21,428,000 | ||||||||
0 | .0% | Short-Term Investments | 311,494 | 311,494 | ||||||||
99 | .6% | Total Investments | 1,189,526,722 | 1,409,405,382 | ||||||||
0 | .3% | Collateral Invested for Securities on Loan | 4,237,548 | 4,237,548 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 1,330,528 | |||||||||
100 | .0% | Total Net Assets | 1,414,973,458 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.5% of net assets | ||||||||
Australia 8.9% | ||||||||
Banks 3.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | 360,234 | 9,503,422 | ||||||
Bendigo & Adelaide Bank Ltd. | 58,930 | 493,575 | ||||||
Commonwealth Bank of Australia | 213,508 | 12,786,034 | ||||||
National Australia Bank Ltd. | 300,095 | 8,019,955 | ||||||
Westpac Banking Corp. | 410,808 | 10,860,904 | ||||||
41,663,890 | ||||||||
Capital Goods 0.0% | ||||||||
Leighton Holdings Ltd. | 20,663 | 383,404 | ||||||
Commercial & Professional Supplies 0.2% | ||||||||
ALS Ltd. | 46,055 | 442,106 | ||||||
Brambles Ltd. | 207,087 | 1,559,308 | ||||||
2,001,414 | ||||||||
Consumer Services 0.1% | ||||||||
Crown Ltd. | 54,264 | 546,921 | ||||||
Echo Entertainment Group Ltd. | 100,330 | 364,639 | ||||||
TABCORP Holdings Ltd. | 93,458 | 275,224 | ||||||
Tatts Group Ltd. | 179,936 | 522,591 | ||||||
1,709,375 | ||||||||
Diversified Financials 0.2% | ||||||||
ASX Ltd. | 23,898 | 735,824 | ||||||
Macquarie Group Ltd. | 44,398 | 1,466,535 | ||||||
2,202,359 | ||||||||
Energy 0.5% | ||||||||
Caltex Australia Ltd. | 18,421 | 325,494 | ||||||
Origin Energy Ltd. | 147,635 | 1,737,828 | ||||||
Santos Ltd. | 125,745 | 1,499,278 | ||||||
Whitehaven Coal Ltd. | 52,853 | 166,904 | ||||||
Woodside Petroleum Ltd. | 87,669 | 3,125,944 | ||||||
WorleyParsons Ltd. | 27,720 | 708,851 | ||||||
7,564,299 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
Metcash Ltd. | 115,812 | 439,917 | ||||||
Wesfarmers Ltd. | 135,898 | 4,899,030 | ||||||
Woolworths Ltd. | 165,658 | 5,052,879 | ||||||
10,391,826 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Coca-Cola Amatil Ltd. | 77,601 | 1,082,671 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Cochlear Ltd. | 7,752 | 572,498 | ||||||
Ramsay Health Care Ltd. | 17,923 | 442,000 | ||||||
Sonic Healthcare Ltd. | 50,551 | 681,677 | ||||||
1,696,175 | ||||||||
Insurance 0.5% | ||||||||
AMP Ltd. | 383,659 | 1,825,351 | ||||||
Insurance Australia Group Ltd. | 275,405 | 1,309,622 | ||||||
QBE Insurance Group Ltd. | 156,393 | 2,136,633 | ||||||
Suncorp Group Ltd. | 173,385 | 1,688,862 | ||||||
6,960,468 | ||||||||
Materials 2.0% | ||||||||
Alumina Ltd. | 327,010 | 326,428 | ||||||
Amcor Ltd. | 163,364 | 1,338,327 | ||||||
BHP Billiton Ltd. | 432,113 | 15,299,137 | ||||||
Boral Ltd. | 99,599 | 370,962 | ||||||
Fortescue Metals Group Ltd. | 188,571 | 794,568 | ||||||
Iluka Resources Ltd. | 57,132 | 586,018 | ||||||
Incitec Pivot Ltd. | 212,204 | 695,029 | ||||||
James Hardie Industries plc CDI | 59,672 | 570,801 | ||||||
Lynas Corp., Ltd. (a)* | 229,806 | 173,389 | ||||||
Newcrest Mining Ltd. | 102,926 | 2,838,693 | ||||||
Orica Ltd. | 49,664 | 1,293,687 | ||||||
OZ Minerals Ltd. | 44,193 | 374,978 | ||||||
Rio Tinto Ltd. | 58,469 | 3,447,078 | ||||||
Sims Metal Management Ltd. | 22,423 | 219,110 | ||||||
28,328,205 | ||||||||
Media 0.0% | ||||||||
Fairfax Media Ltd. (a) | 152,474 | 62,424 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
CSL Ltd. | 68,790 | 3,392,769 | ||||||
Real Estate 0.7% | ||||||||
Centro Retail Australia REIT | 152,684 | 340,421 | ||||||
CFS Retail Property Trust Group | 251,853 | 510,299 | ||||||
Dexus Property Group | 572,992 | 584,814 | ||||||
Goodman Group | 208,213 | 955,844 | ||||||
GPT Group | 194,809 | 719,401 | ||||||
Lend Lease Group | 74,007 | 664,416 | ||||||
Mirvac Group | 430,662 | 671,925 | ||||||
Stockland | 314,715 | 1,129,200 | ||||||
Westfield Group | 289,103 | 3,195,777 |
62 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Westfield Retail Trust | 387,362 | 1,243,847 | ||||||
10,015,944 | ||||||||
Retailing 0.0% | ||||||||
Harvey Norman Holdings Ltd. | 68,124 | 134,565 | ||||||
Software & Services 0.0% | ||||||||
Computershare Ltd. | 60,657 | 546,257 | ||||||
Telecommunication Services 0.2% | ||||||||
Telstra Corp., Ltd. | 586,450 | 2,520,266 | ||||||
Transportation 0.2% | ||||||||
Asciano Ltd. | 133,090 | 629,914 | ||||||
Qantas Airways Ltd. * | 88,989 | 122,686 | ||||||
QR National Ltd. | 233,058 | 904,032 | ||||||
Sydney Airport | 50,095 | 176,198 | ||||||
Toll Holdings Ltd. | 92,053 | 424,071 | ||||||
Transurban Group | 178,171 | 1,124,536 | ||||||
3,381,437 | ||||||||
Utilities 0.1% | ||||||||
AGL Energy Ltd. | 73,758 | 1,112,329 | ||||||
APA Group (a) | 86,733 | 464,240 | ||||||
SP AusNet | 158,833 | 174,742 | ||||||
1,751,311 | ||||||||
125,789,059 | ||||||||
Austria 0.3% | ||||||||
Banks 0.1% | ||||||||
Erste Group Bank AG * | 28,924 | 729,107 | ||||||
Raiffeisen Bank International AG | 6,669 | 267,132 | ||||||
996,239 | ||||||||
Capital Goods 0.1% | ||||||||
Andritz AG | 9,797 | 590,353 | ||||||
Energy 0.1% | ||||||||
OMV AG | 19,496 | 713,462 | ||||||
Insurance 0.0% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 5,240 | 225,156 | ||||||
Materials 0.0% | ||||||||
Voestalpine AG | 14,994 | 472,132 | ||||||
Real Estate 0.0% | ||||||||
Immofinanz AG | 121,689 | 470,397 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG | 29,683 | 186,997 | ||||||
Utilities 0.0% | ||||||||
Verbund AG | 9,608 | 224,036 | ||||||
3,878,772 | ||||||||
Belgium 1.1% | ||||||||
Banks 0.0% | ||||||||
KBC GROEP N.V. | 21,978 | 517,000 | ||||||
Diversified Financials 0.1% | ||||||||
Groupe Bruxelles Lambert S.A. | 10,830 | 800,657 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Colruyt S.A. | 10,334 | 472,451 | ||||||
Delhaize Group S.A. | 13,897 | 532,075 | ||||||
1,004,526 | ||||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Anheuser-Busch InBev N.V. | 107,945 | 9,027,556 | ||||||
Insurance 0.1% | ||||||||
Ageas | 30,190 | 769,697 | ||||||
Materials 0.1% | ||||||||
Solvay S.A. | 8,007 | 964,059 | ||||||
Umicore S.A. | 14,709 | 755,871 | ||||||
1,719,930 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
UCB S.A. | 14,806 | 864,782 | ||||||
Telecommunication Services 0.1% | ||||||||
Belgacom S.A. | 19,589 | 572,705 | ||||||
Mobistar S.A. | 4,094 | 108,305 | ||||||
Telenet Group Holding N.V. | 7,632 | 349,646 | ||||||
1,030,656 | ||||||||
15,734,804 | ||||||||
Denmark 1.1% | ||||||||
Banks 0.1% | ||||||||
Danske Bank A/S * | 86,631 | 1,355,227 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Carlsberg A/S, Class B | 14,191 | 1,224,940 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Coloplast A/S, Class B | 3,107 | 681,508 | ||||||
William Demant Holding A/S * | 3,310 | 284,672 | ||||||
966,180 | ||||||||
Insurance 0.0% | ||||||||
Tryg A/S | 3,346 | 218,472 | ||||||
Materials 0.1% | ||||||||
Novozymes A/S, B Shares | 32,383 | 894,708 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
Novo Nordisk A/S, Class B | 54,730 | 8,774,064 | ||||||
Telecommunication Services 0.0% | ||||||||
TDC A/S | 66,616 | 459,298 | ||||||
Transportation 0.1% | ||||||||
AP Moller - Maersk A/S, Series A | 75 | 496,936 | ||||||
AP Moller - Maersk A/S, Series B | 180 | 1,256,337 | ||||||
DSV A/S | 25,786 | 580,033 | ||||||
2,333,306 | ||||||||
16,226,195 | ||||||||
Finland 0.7% | ||||||||
Automobiles & Components 0.1% | ||||||||
Nokian Renkaat Oyj | 15,028 | 625,867 | ||||||
Capital Goods 0.2% | ||||||||
Kone Oyj, Class B | 21,086 | 1,512,057 | ||||||
Metso Oyj | 17,438 | 613,268 | ||||||
Wartsila Oyj Abp | 22,877 | 926,462 | ||||||
3,051,787 |
See financial notes 63
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Diversified Financials 0.0% | ||||||||
Pohjola Bank plc, A Shares | 18,850 | 257,141 | ||||||
Energy 0.0% | ||||||||
Neste Oil Oyj | 17,493 | 219,062 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Kesko Oyj, B Shares | 9,130 | 285,499 | ||||||
Insurance 0.1% | ||||||||
Sampo Oyj, A Shares | 55,505 | 1,740,279 | ||||||
Materials 0.1% | ||||||||
Stora Enso Oyj, R Shares | 72,752 | 460,201 | ||||||
UPM-Kymmene Oyj | 71,633 | 769,106 | ||||||
1,229,307 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 12,992 | 321,468 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Nokia Oyj (a) | 495,931 | 1,333,304 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 19,292 | 413,985 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 58,639 | 1,085,292 | ||||||
10,562,991 | ||||||||
France 9.2% | ||||||||
Automobiles & Components 0.2% | ||||||||
Compagnie Generale des Etablissements Michelin | 23,921 | 2,062,106 | ||||||
Peugeot S.A. (a)* | 31,040 | 199,107 | ||||||
Renault S.A. | 25,383 | 1,138,147 | ||||||
3,399,360 | ||||||||
Banks 0.8% | ||||||||
BNP Paribas S.A. | 129,519 | 6,533,581 | ||||||
Credit Agricole S.A. * | 132,928 | 1,003,369 | ||||||
Natixis | 112,136 | 368,040 | ||||||
Societe Generale S.A. * | 93,999 | 2,997,826 | ||||||
10,902,816 | ||||||||
Capital Goods 1.2% | ||||||||
Alstom S.A. | 27,159 | 928,373 | ||||||
Bouygues S.A. | 25,779 | 619,588 | ||||||
Compagnie de Saint-Gobain | 53,287 | 1,877,049 | ||||||
European Aeronautic Defence & Space Co., N.V. | 54,884 | 1,953,319 | ||||||
Legrand S.A. | 31,978 | 1,233,677 | ||||||
Rexel S.A. | 14,470 | 262,081 | ||||||
Safran S.A. | 30,868 | 1,229,588 | ||||||
Schneider Electric S.A. | 70,187 | 4,394,727 | ||||||
Thales S.A. | 12,374 | 435,579 | ||||||
Vallourec S.A. | 13,711 | 564,023 | ||||||
Vinci S.A. | 61,252 | 2,715,060 | ||||||
Zodiac Aerospace | 4,592 | 470,838 | ||||||
16,683,902 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Bureau Veritas S.A. | 7,455 | 791,771 | ||||||
Edenred | 22,688 | 656,570 | ||||||
Societe BIC S.A. | 3,926 | 479,064 | ||||||
1,927,405 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Christian Dior S.A. | 7,386 | 1,061,136 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 34,039 | 5,534,090 | ||||||
6,595,226 | ||||||||
Consumer Services 0.1% | ||||||||
Accor S.A. | 20,125 | 628,858 | ||||||
Sodexo | 12,356 | 951,848 | ||||||
1,580,706 | ||||||||
Diversified Financials 0.0% | ||||||||
Eurazeo | 3,614 | 165,669 | ||||||
Wendel S.A. | 4,484 | 395,310 | ||||||
560,979 | ||||||||
Energy 1.2% | ||||||||
Compagnie Generale de Geophysique - Veritas * | 17,916 | 583,253 | ||||||
Technip S.A. | 13,159 | 1,484,215 | ||||||
Total S.A. | 285,793 | 14,395,452 | ||||||
16,462,920 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Carrefour S.A. | 76,747 | 1,853,489 | ||||||
Casino Guichard Perrachon S.A. | 7,517 | 656,166 | ||||||
2,509,655 | ||||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Danone S.A. | 77,402 | 4,760,789 | ||||||
Pernod-Ricard S.A. | 28,500 | 3,069,358 | ||||||
Remy Cointreau S.A. | 3,002 | 311,361 | ||||||
8,141,508 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Essilor International S.A. | 26,969 | 2,431,889 | ||||||
Household & Personal Products 0.3% | ||||||||
L’Oreal S.A. | 32,426 | 4,132,612 | ||||||
Insurance 0.3% | ||||||||
AXA S.A. | 237,786 | 3,790,000 | ||||||
CNP Assurances | 18,752 | 264,983 | ||||||
SCOR SE | 21,612 | 577,066 | ||||||
4,632,049 | ||||||||
Materials 0.7% | ||||||||
Air Liquide S.A. | 41,878 | 4,943,781 | ||||||
ArcelorMittal | 126,038 | 1,863,409 | ||||||
Arkema S.A. | 8,323 | 759,470 | ||||||
Imerys S.A. | 4,634 | 260,697 | ||||||
Lafarge S.A. | 25,184 | 1,476,523 | ||||||
9,303,880 | ||||||||
Media 0.2% | ||||||||
Eutelsat Communications S.A. | 17,773 | 569,107 | ||||||
JC Decaux S.A. | 9,072 | 192,046 | ||||||
Lagardere S.C.A. | 16,104 | 440,903 | ||||||
Publicis Groupe S.A. | 23,744 | 1,279,742 | ||||||
SES S.A. | 40,718 | 1,127,075 | ||||||
3,608,873 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.0% | ||||||||
Sanofi | 159,318 | 13,992,487 | ||||||
Real Estate 0.3% | ||||||||
Fonciere des Regions | 3,093 | 248,949 |
64 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Gecina S.A. | 2,992 | 331,898 | ||||||
ICADE | 3,182 | 286,384 | ||||||
Klepierre | 12,841 | 476,315 | ||||||
Unibail-Rodamco SE | 12,281 | 2,766,117 | ||||||
4,109,663 | ||||||||
Retailing 0.1% | ||||||||
PPR | 10,071 | 1,775,399 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
STMicroelectronics N.V. | 85,053 | 500,942 | ||||||
Software & Services 0.1% | ||||||||
AtoS | 7,278 | 488,659 | ||||||
Cap Gemini S.A. | 20,192 | 849,446 | ||||||
Dassault Systemes S.A. | 8,246 | 869,987 | ||||||
2,208,092 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Alcatel-Lucent * | 311,624 | 318,630 | ||||||
Gemalto N.V. | 10,660 | 962,815 | ||||||
1,281,445 | ||||||||
Telecommunication Services 0.5% | ||||||||
France Telecom S.A. | 247,752 | 2,769,250 | ||||||
Iliad S.A. | 3,071 | 473,220 | ||||||
Vivendi S.A. | 173,067 | 3,546,383 | ||||||
6,788,853 | ||||||||
Transportation 0.1% | ||||||||
Aeroports de Paris | 4,137 | 320,167 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 73,526 | 559,934 | ||||||
880,101 | ||||||||
Utilities 0.4% | ||||||||
EDF S.A. | 33,008 | 698,488 | ||||||
GDF Suez | 171,117 | 3,927,536 | ||||||
Suez Environnement Co. | 38,178 | 405,291 | ||||||
Veolia Environnement S.A. | 45,958 | 454,896 | ||||||
5,486,211 | ||||||||
129,896,973 | ||||||||
Germany 7.9% | ||||||||
Automobiles & Components 0.8% | ||||||||
Bayerische Motoren Werke AG | 44,269 | 3,539,127 | ||||||
Continental AG | 10,651 | 1,072,023 | ||||||
Daimler AG - Reg’d | 121,899 | 5,710,339 | ||||||
Volkswagen AG | 4,026 | 787,308 | ||||||
11,108,797 | ||||||||
Banks 0.1% | ||||||||
Commerzbank AG * | 453,729 | 871,648 | ||||||
Capital Goods 1.0% | ||||||||
Brenntag AG | 6,902 | 870,887 | ||||||
GEA Group AG | 23,827 | 745,498 | ||||||
Hochtief AG * | 4,149 | 206,096 | ||||||
MAN SE | 5,692 | 575,220 | ||||||
Siemens AG - Reg’d | 110,665 | 11,150,484 | ||||||
13,548,185 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Adidas AG | 27,913 | 2,379,217 | ||||||
Hugo Boss AG | 3,434 | 344,658 | ||||||
2,723,875 | ||||||||
Diversified Financials 0.5% | ||||||||
Deutsche Bank AG - Reg’d | 124,475 | 5,669,970 | ||||||
Deutsche Boerse AG | 25,821 | 1,399,132 | ||||||
7,069,102 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Metro AG | 17,029 | 490,920 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Suedzucker AG | 9,044 | 350,591 | ||||||
Health Care Equipment & Services 0.3% | ||||||||
Celesio AG | 11,605 | 224,979 | ||||||
Fresenius Medical Care AG & Co KGaA | 27,905 | 1,960,722 | ||||||
Fresenius SE & Co KGaA | 16,690 | 1,903,096 | ||||||
4,088,797 | ||||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 13,321 | 969,099 | ||||||
Henkel AG & Co. KGaA | 17,376 | 1,125,076 | ||||||
2,094,175 | ||||||||
Insurance 0.8% | ||||||||
Allianz SE - Reg’d | 61,106 | 7,590,915 | ||||||
Hannover Rueckversicherung AG - Reg’d | 8,228 | 579,689 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 24,048 | 3,869,407 | ||||||
12,040,011 | ||||||||
Materials 1.3% | ||||||||
BASF SE | 123,500 | 10,244,366 | ||||||
HeidelbergCement AG | 18,405 | 978,076 | ||||||
K&S AG - Reg’d | 22,781 | 1,079,697 | ||||||
Lanxess AG | 11,353 | 939,217 | ||||||
Linde AG | 24,892 | 4,188,888 | ||||||
Salzgitter AG | 5,330 | 230,502 | ||||||
ThyssenKrupp AG | 50,861 | 1,158,998 | ||||||
Wacker Chemie AG | 2,134 | 120,659 | ||||||
18,940,403 | ||||||||
Media 0.1% | ||||||||
Axel Springer AG | 5,400 | 231,712 | ||||||
Kabel Deutschland Holding AG | 11,684 | 843,049 | ||||||
1,074,761 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Bayer AG - Reg’d | 111,137 | 9,690,373 | ||||||
Merck KGaA | 8,492 | 1,086,160 | ||||||
QIAGEN N.V. * | 31,809 | 554,146 | ||||||
11,330,679 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Infineon Technologies AG | 143,788 | 979,548 | ||||||
Software & Services 0.7% | ||||||||
SAP AG | 123,431 | 9,000,958 | ||||||
United Internet AG - Reg’d | 12,162 | 243,385 | ||||||
9,244,343 | ||||||||
Telecommunication Services 0.3% | ||||||||
Deutsche Telekom AG - Reg’d | 378,832 | 4,321,904 | ||||||
Transportation 0.2% | ||||||||
Deutsche Lufthansa AG - Reg’d | 31,243 | 477,989 |
See financial notes 65
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Deutsche Post AG - Reg’d | 114,718 | 2,274,396 | ||||||
Fraport AG | 5,014 | 294,239 | ||||||
3,046,624 | ||||||||
Utilities 0.6% | ||||||||
E.ON AG | 241,763 | 5,503,754 | ||||||
RWE AG | 65,427 | 2,994,247 | ||||||
8,498,001 | ||||||||
111,822,364 | ||||||||
Greece 0.1% | ||||||||
Consumer Services 0.0% | ||||||||
OPAP S.A. | 30,470 | 194,754 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Coca Cola Hellenic Bottling Co., S.A. * | 27,404 | 586,074 | ||||||
780,828 | ||||||||
Hong Kong 3.1% | ||||||||
Banks 0.3% | ||||||||
Bank of East Asia Ltd. | 181,600 | 670,879 | ||||||
BOC Hong Kong (Holdings) Ltd. | 496,000 | 1,520,764 | ||||||
Hang Seng Bank Ltd. | 103,136 | 1,580,730 | ||||||
Wing Hang Bank Ltd. | 24,500 | 259,343 | ||||||
4,031,716 | ||||||||
Capital Goods 0.2% | ||||||||
Hopewell Holdings Ltd. | 66,500 | 239,058 | ||||||
Hutchison Whampoa Ltd. | 290,370 | 2,844,600 | ||||||
NWS Holdings Ltd. | 192,000 | 289,363 | ||||||
3,373,021 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Yue Yuen Industrial Holdings Ltd. | 90,000 | 309,774 | ||||||
Consumer Services 0.3% | ||||||||
Galaxy Entertainment Group Ltd. * | 197,000 | 672,906 | ||||||
MGM China Holdings Ltd. | 104,400 | 187,584 | ||||||
Sands China Ltd. | 329,600 | 1,232,080 | ||||||
Shangri-La Asia Ltd. | 224,000 | 432,419 | ||||||
SJM Holdings Ltd. | 242,000 | 524,471 | ||||||
Wynn Macau Ltd. | 212,000 | 597,233 | ||||||
3,646,693 | ||||||||
Diversified Financials 0.2% | ||||||||
First Pacific Co., Ltd. | 210,000 | 233,474 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 139,818 | 2,294,784 | ||||||
2,528,258 | ||||||||
Insurance 0.4% | ||||||||
AIA Group Ltd. | 1,372,000 | 5,410,436 | ||||||
Real Estate 1.1% | ||||||||
Cheung Kong (Holdings) Ltd. | 188,656 | 2,780,706 | ||||||
Hang Lung Group Ltd. | 120,000 | 709,277 | ||||||
Hang Lung Properties Ltd. | 301,000 | 1,042,240 | ||||||
Henderson Land Development Co., Ltd. | 136,000 | 937,898 | ||||||
Hysan Development Co., Ltd. | 87,000 | 383,783 | ||||||
Kerry Properties Ltd. | 98,000 | 485,859 | ||||||
New World Development Co., Ltd. | 447,000 | 687,746 | ||||||
Sino Land Co., Ltd. | 376,000 | 670,805 | ||||||
Sun Hung Kai Properties Ltd. | 211,604 | 2,925,200 | ||||||
Swire Pacific Ltd., Class A | 91,590 | 1,083,310 | ||||||
The Link REIT | 307,000 | 1,525,591 | ||||||
Wharf Holdings Ltd. | 206,100 | 1,405,251 | ||||||
Wheelock & Co., Ltd. | 124,000 | 540,879 | ||||||
15,178,545 | ||||||||
Retailing 0.1% | ||||||||
Li & Fung Ltd. | 784,000 | 1,307,839 | ||||||
Lifestyle International Holdings Ltd. | 66,000 | 140,688 | ||||||
1,448,527 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
ASM Pacific Technology Ltd. | 27,000 | 300,353 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Foxconn International Holdings Ltd. * | 70,000 | 24,286 | ||||||
Telecommunication Services 0.0% | ||||||||
PCCW Ltd. | 536,000 | 215,937 | ||||||
Transportation 0.1% | ||||||||
Cathay Pacific Airways Ltd. | 141,000 | 254,652 | ||||||
MTR Corp., Ltd. | 195,500 | 762,577 | ||||||
Orient Overseas International Ltd. | 30,000 | 188,883 | ||||||
1,206,112 | ||||||||
Utilities 0.4% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 64,000 | 374,966 | ||||||
CLP Holdings Ltd. | 246,580 | 2,100,955 | ||||||
Hong Kong & China Gas Co., Ltd. | 697,031 | 1,850,350 | ||||||
Power Assets Holdings Ltd. | 189,500 | 1,610,284 | ||||||
5,936,555 | ||||||||
43,610,213 | ||||||||
Ireland 0.3% | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Kerry Group plc, Class A | 20,372 | 1,065,976 | ||||||
Materials 0.1% | ||||||||
CRH plc | 97,761 | 1,819,693 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Elan Corp. plc * | 65,467 | 712,486 | ||||||
Transportation 0.0% | ||||||||
Ryanair Holdings plc * | 25,968 | 150,555 | ||||||
3,748,710 | ||||||||
Israel 0.6% | ||||||||
Banks 0.1% | ||||||||
Bank Hapoalim B.M. * | 144,407 | 568,110 | ||||||
Bank Leumi Le-Israel B.M. * | 160,854 | 518,474 |
66 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Mizrahi Tefahot Bank Ltd. * | 16,863 | 153,124 | ||||||
1,239,708 | ||||||||
Capital Goods 0.0% | ||||||||
Delek Group Ltd. | 790 | 150,222 | ||||||
Materials 0.1% | ||||||||
Israel Chemicals Ltd. | 58,265 | 728,931 | ||||||
The Israel Corp., Ltd. | 316 | 214,745 | ||||||
943,676 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.4% | ||||||||
Teva Pharmaceutical Industries Ltd. | 126,520 | 5,104,000 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Mellanox Technologies Ltd. * | 4,792 | 361,640 | ||||||
Software & Services 0.0% | ||||||||
NICE Systems Ltd. * | 8,174 | 273,033 | ||||||
Telecommunication Services 0.0% | ||||||||
Bezeq Israeli Telecommunication Corp., Ltd. | 207,658 | 252,987 | ||||||
8,325,266 | ||||||||
Italy 2.2% | ||||||||
Automobiles & Components 0.1% | ||||||||
Fiat S.p.A. * | 117,793 | 576,479 | ||||||
Pirelli & C. S.p.A. | 32,458 | 377,052 | ||||||
953,531 | ||||||||
Banks 0.4% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. * | 860,993 | 238,005 | ||||||
Banco Popolare Scarl * | 229,087 | 365,572 | ||||||
Intesa Sanpaolo S.p.A. | 1,350,261 | 2,175,125 | ||||||
Intesa Sanpaolo S.p.A. - RSP | 124,963 | 165,332 | ||||||
UniCredit S.p.A. * | 556,402 | 2,461,060 | ||||||
Unione di Banche Italiane S.C.P.A. | 110,740 | 436,228 | ||||||
5,841,322 | ||||||||
Capital Goods 0.1% | ||||||||
Fiat Industrial S.p.A. | 117,545 | 1,274,068 | ||||||
Finmeccanica S.p.A. * | 46,270 | 229,472 | ||||||
Prysmian S.p.A. | 27,788 | 535,778 | ||||||
2,039,318 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Luxottica Group S.p.A. | 15,932 | 608,091 | ||||||
Consumer Services 0.0% | ||||||||
Autogrill S.p.A. | 15,620 | 159,891 | ||||||
Diversified Financials 0.0% | ||||||||
Exor S.p.A. | 8,747 | 225,735 | ||||||
Mediobanca S.p.A. | 60,988 | 348,711 | ||||||
574,446 | ||||||||
Energy 0.8% | ||||||||
Eni S.p.A. | 340,912 | 7,844,694 | ||||||
Saipem S.p.A. | 35,929 | 1,618,928 | ||||||
Tenaris S.A. | 64,434 | 1,207,789 | ||||||
10,671,411 | ||||||||
Insurance 0.2% | ||||||||
Assicurazioni Generali S.p.A. | 159,328 | 2,594,502 | ||||||
Media 0.0% | ||||||||
Mediaset S.p.A. | 77,949 | 136,926 | ||||||
Telecommunication Services 0.1% | ||||||||
Telecom Italia S.p.A. | 1,241,406 | 1,145,339 | ||||||
Telecom Italia S.p.A. - RSP | 706,729 | 565,924 | ||||||
1,711,263 | ||||||||
Transportation 0.1% | ||||||||
Atlantia S.p.A. | 47,830 | 791,109 | ||||||
Utilities 0.4% | ||||||||
Enel Green Power S.p.A. | 215,891 | 367,716 | ||||||
Enel S.p.A. | 886,701 | 3,339,090 | ||||||
Snam S.p.A. | 219,282 | 971,716 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 183,741 | 690,826 | ||||||
5,369,348 | ||||||||
31,451,158 | ||||||||
Japan 19.2% | ||||||||
Automobiles & Components 2.5% | ||||||||
Aisin Seiki Co., Ltd. | 26,100 | 762,233 | ||||||
Bridgestone Corp. | 87,057 | 2,033,566 | ||||||
Daihatsu Motor Co., Ltd. | 26,000 | 455,034 | ||||||
Denso Corp. | 65,300 | 2,050,230 | ||||||
Fuji Heavy Industries Ltd. | 80,000 | 771,208 | ||||||
Honda Motor Co., Ltd. | 218,439 | 6,566,981 | ||||||
Isuzu Motors Ltd. | 156,000 | 825,174 | ||||||
Koito Manufacturing Co., Ltd. | 13,000 | 161,478 | ||||||
Mazda Motor Corp. * | 362,000 | 431,765 | ||||||
Mitsubishi Motors Corp. * | 438,000 | 377,538 | ||||||
NGK Spark Plug Co., Ltd. | 26,000 | 291,163 | ||||||
NHK Spring Co., Ltd. | 20,000 | 167,039 | ||||||
Nissan Motors Co., Ltd. | 337,296 | 2,820,926 | ||||||
NOK Corp. | 14,200 | 227,816 | ||||||
Stanley Electric Co., Ltd. | 19,800 | 272,480 | ||||||
Sumitomo Rubber Industries Ltd. | 23,400 | 275,867 | ||||||
Suzuki Motor Corp. | 49,100 | 1,113,530 | ||||||
Toyoda Gosei Co., Ltd. | 8,800 | 173,299 | ||||||
Toyota Boshoku Corp. | 11,400 | 108,093 | ||||||
Toyota Industries Corp. | 21,600 | 618,012 | ||||||
Toyota Motor Corp. | 369,603 | 14,250,837 | ||||||
Yamaha Motor Co., Ltd. | 38,200 | 364,737 | ||||||
35,119,006 | ||||||||
Banks 1.8% | ||||||||
Aozora Bank Ltd. | 77,000 | 217,141 | ||||||
Fukuoka Financial Group, Inc. | 106,000 | 414,522 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 1,707,209 | 7,723,359 | ||||||
Mizuho Financial Group, Inc. | 3,061,134 | 4,789,694 | ||||||
Resona Holdings, Inc. | 253,900 | 1,098,675 | ||||||
Seven Bank Ltd. | 62,000 | 177,259 | ||||||
Shinsei Bank Ltd. | 144,000 | 211,118 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 180,546 | 5,516,941 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 405,000 | 1,229,094 |
See financial notes 67
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Suruga Bank Ltd. | 25,000 | 300,225 | ||||||
The Bank of Kyoto Ltd. | 44,000 | 378,191 | ||||||
The Bank of Yokohama Ltd. | 158,000 | 727,123 | ||||||
The Chiba Bank Ltd. | 104,000 | 607,481 | ||||||
The Chugoku Bank Ltd. | 24,000 | 330,300 | ||||||
The Gunma Bank Ltd. | 52,000 | 250,869 | ||||||
The Hachijuni Bank Ltd. | 57,000 | 294,451 | ||||||
The Iyo Bank Ltd. | 33,000 | 255,148 | ||||||
The Joyo Bank Ltd. | 81,000 | 392,001 | ||||||
The Nishi-Nippon City Bank Ltd. | 67,000 | 152,775 | ||||||
The Shizuoka Bank Ltd. | 74,000 | 756,870 | ||||||
Yamaguchi Financial Group, Inc. | 28,000 | 231,991 | ||||||
26,055,228 | ||||||||
Capital Goods 2.8% | ||||||||
Amada Co., Ltd. | 49,000 | 248,807 | ||||||
Asahi Glass Co., Ltd. | 138,000 | 938,101 | ||||||
Chiyoda Corp. | 21,000 | 339,220 | ||||||
Daikin Industries Ltd. | 32,000 | 885,830 | ||||||
Fanuc Corp. | 25,700 | 4,094,413 | ||||||
Fuji Electric Co., Ltd. | 50,000 | 101,433 | ||||||
Furukawa Electric Co., Ltd. * | 70,000 | 139,593 | ||||||
GS Yuasa Corp. (a) | 40,000 | 155,931 | ||||||
Hino Motors Ltd. | 35,000 | 270,545 | ||||||
Hitachi Construction Machinery Co., Ltd. | 14,600 | 240,033 | ||||||
IHI Corp. | 159,000 | 334,849 | ||||||
ITOCHU Corp. | 204,000 | 2,041,950 | ||||||
JGC Corp. | 28,000 | 963,351 | ||||||
JTEKT Corp. | 30,300 | 227,540 | ||||||
Kajima Corp. | 111,000 | 307,412 | ||||||
Kawasaki Heavy Industries Ltd. | 169,000 | 347,654 | ||||||
Kinden Corp. | 18,000 | 112,697 | ||||||
Komatsu Ltd. | 126,509 | 2,650,948 | ||||||
Kubota Corp. | 148,000 | 1,513,314 | ||||||
Kurita Water Industries Ltd. | 15,400 | 349,602 | ||||||
LIXIL Group Corp. | 36,300 | 802,530 | ||||||
Mabuchi Motor Co., Ltd. | 3,300 | 139,843 | ||||||
Makita Corp. | 15,300 | 605,739 | ||||||
Marubeni Corp. | 224,000 | 1,451,494 | ||||||
Mitsubishi Corp. | 188,200 | 3,359,922 | ||||||
Mitsubishi Electric Corp. | 260,000 | 1,943,417 | ||||||
Mitsubishi Heavy Industries Ltd. | 409,000 | 1,722,741 | ||||||
Mitsui & Co., Ltd. | 235,300 | 3,316,606 | ||||||
Nabtesco Corp. | 13,000 | 242,619 | ||||||
NGK Insulators Ltd. | 35,000 | 390,247 | ||||||
Nidec Corp. | 14,600 | 1,039,000 | ||||||
NSK Ltd. | 60,000 | 329,552 | ||||||
NTN Corp. | 52,000 | 93,289 | ||||||
Obayashi Corp. | 80,000 | 357,892 | ||||||
Shimizu Corp. | 77,000 | 257,605 | ||||||
SMC Corp. | 7,400 | 1,166,674 | ||||||
Sojitz Corp. | 113,300 | 140,650 | ||||||
Sumitomo Corp. | 150,600 | 2,053,098 | ||||||
Sumitomo Electric Industries Ltd. | 102,900 | 1,106,967 | ||||||
Sumitomo Heavy Industries Ltd. | 64,000 | 229,451 | ||||||
Taisei Corp. | 134,000 | 369,462 | ||||||
The Japan Steel Works Ltd. | 43,000 | 254,896 | ||||||
THK Co., Ltd. | 16,400 | 272,638 | ||||||
TOTO Ltd. | 40,000 | 299,780 | ||||||
Toyota Tsusho Corp. | 29,000 | 633,440 | ||||||
Ushio, Inc. | 14,300 | 150,881 | ||||||
38,993,656 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Dai Nippon Printing Co., Ltd. | 76,000 | 538,540 | ||||||
Secom Co., Ltd. | 27,900 | 1,421,060 | ||||||
Toppan Printing Co., Ltd. | 76,000 | 439,254 | ||||||
2,398,854 | ||||||||
Consumer Durables & Apparel 0.6% | ||||||||
Asics Corp. | 20,000 | 290,655 | ||||||
Casio Computer Co., Ltd. (a) | 32,000 | 244,879 | ||||||
Namco Bandai Holdings, Inc. | 23,000 | 361,400 | ||||||
Nikon Corp. | 46,000 | 1,173,427 | ||||||
Panasonic Corp. | 297,312 | 1,803,364 | ||||||
Rinnai Corp. | 4,400 | 300,522 | ||||||
Sankyo Co., Ltd. | 6,400 | 289,960 | ||||||
Sega Sammy Holdings, Inc. | 26,600 | 501,368 | ||||||
Sekisui Chemical Co., Ltd. | 59,000 | 484,546 | ||||||
Sekisui House Ltd. | 74,000 | 756,648 | ||||||
Sharp Corp. (a) | 126,785 | 273,510 | ||||||
Shimano, Inc. | 10,200 | 643,006 | ||||||
Sony Corp. | 135,400 | 1,603,189 | ||||||
Yamaha Corp. | 22,000 | 197,700 | ||||||
8,924,174 | ||||||||
Consumer Services 0.1% | ||||||||
Benesse Holdings, Inc. | 9,200 | 443,151 | ||||||
McDonald’s Holdings Co., Ltd. | 9,000 | 250,077 | ||||||
Oriental Land Co., Ltd. | 6,800 | 927,553 | ||||||
1,620,781 | ||||||||
Diversified Financials 0.4% | ||||||||
Aeon Credit Service Co., Ltd. | 8,600 | 182,721 | ||||||
Credit Saison Co., Ltd. | 21,900 | 481,232 | ||||||
Daiwa Securities Group, Inc. | 222,000 | 885,594 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 7,950 | 342,778 | ||||||
Nomura Holdings, Inc. | 479,400 | 1,732,960 | ||||||
ORIX Corp. | 14,290 | 1,467,725 | ||||||
SBI Holdings, Inc. | 30,590 | 214,220 | ||||||
5,307,230 | ||||||||
Energy 0.3% | ||||||||
Cosmo Oil Co., Ltd. | 74,000 | 131,618 | ||||||
Idemitsu Kosan Co., Ltd. | 3,000 | 258,200 | ||||||
Inpex Corp. | 292 | 1,663,485 | ||||||
Japan Petroleum Exploration Co. | 3,900 | 146,796 | ||||||
JX Holdings, Inc. | 302,000 | 1,608,470 | ||||||
Showa Shell Sekiyu K.K. | 19,700 | 109,674 | ||||||
TonenGeneral Sekiyu K.K. | 39,000 | 353,929 | ||||||
4,272,172 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Aeon Co., Ltd. | 81,900 | 893,245 | ||||||
FamilyMart Co., Ltd. | 7,700 | 373,149 | ||||||
Lawson, Inc. | 8,200 | 602,618 | ||||||
Seven & I Holdings Co., Ltd. | 101,403 | 3,127,207 | ||||||
4,996,219 |
68 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Ajinomoto Co., Inc. | 88,000 | 1,343,577 | ||||||
Asahi Group Holdings Ltd. | 52,800 | 1,205,064 | ||||||
Coca-Cola West Co., Ltd. | 8,300 | 127,240 | ||||||
Japan Tobacco, Inc. | 121,400 | 3,356,981 | ||||||
Kikkoman Corp. | 22,000 | 292,111 | ||||||
Kirin Holdings Co., Ltd. | 117,000 | 1,468,716 | ||||||
Meiji Holdings Co., Ltd. | 8,400 | 384,334 | ||||||
Nippon Meat Packers, Inc. | 23,000 | 285,433 | ||||||
Nisshin Seifun Group, Inc. | 25,500 | 318,658 | ||||||
Nissin Food Holdings Co., Ltd. | 8,000 | 302,510 | ||||||
Toyo Suisan Kaisha Ltd. | 12,000 | 299,036 | ||||||
Yakult Honsha Co., Ltd. | 13,200 | 614,947 | ||||||
Yamazaki Baking Co., Ltd. | 14,000 | 168,264 | ||||||
10,166,871 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Alfresa Holdings Corp. | 5,300 | 239,602 | ||||||
Medipal Holdings Corp. | 20,000 | 254,709 | ||||||
Miraca Holdings, Inc. | 7,600 | 320,955 | ||||||
Olympus Corp. * | 29,000 | 506,697 | ||||||
Suzuken Co., Ltd. | 9,000 | 284,100 | ||||||
Sysmex Corp. | 9,800 | 460,803 | ||||||
Terumo Corp. | 20,500 | 882,951 | ||||||
2,949,817 | ||||||||
Household & Personal Products 0.2% | ||||||||
Kao Corp. | 70,619 | 1,983,798 | ||||||
Shiseido Co., Ltd. | 49,000 | 620,109 | ||||||
Unicharm Corp. | 15,500 | 838,627 | ||||||
3,442,534 | ||||||||
Insurance 0.5% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 68,162 | 1,155,945 | ||||||
NKSJ Holdings, Inc. | 50,500 | 920,591 | ||||||
Sony Financial Holdings, Inc. | 23,700 | 422,634 | ||||||
T&D Holdings, Inc. | 79,000 | 863,252 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 1,144 | 1,319,005 | ||||||
Tokio Marine Holdings, Inc. | 97,499 | 2,580,811 | ||||||
7,262,238 | ||||||||
Materials 1.3% | ||||||||
Nippon Steel & Sumitomo Metal Corp. | 956,410 | 2,111,105 | ||||||
Air Water, Inc. | 20,000 | 250,604 | ||||||
Asahi Kasei Corp. | 172,000 | 946,216 | ||||||
Daicel Corp. | 40,000 | 240,155 | ||||||
Daido Steel Co., Ltd. | 39,000 | 169,132 | ||||||
Denki Kagaku Kogyo K.K. | 54,000 | 166,737 | ||||||
Hitachi Chemical Co., Ltd. | 14,200 | 200,269 | ||||||
Hitachi Metals Ltd. | 22,000 | 206,112 | ||||||
JFE Holdings, Inc. | 62,900 | 887,766 | ||||||
JSR Corp. | 24,400 | 418,545 | ||||||
Kaneka Corp. | 38,000 | 185,375 | ||||||
Kansai Paint Co., Ltd. | 30,000 | 323,167 | ||||||
Kobe Steel Ltd. | 334,000 | 293,204 | ||||||
Kuraray Co., Ltd. | 47,000 | 546,263 | ||||||
Maruichi Steel Tube Ltd. | 6,400 | 133,092 | ||||||
Mitsubishi Chemical Holdings Corp. | 182,500 | 722,804 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 53,000 | 261,862 | ||||||
Mitsubishi Materials Corp. | 147,000 | 427,402 | ||||||
Mitsui Chemicals, Inc. | 93,000 | 192,253 | ||||||
Nippon Paper Group, Inc. | 13,500 | 154,392 | ||||||
Nisshin Steel Holdings Co., Ltd. * | 2,000 | 13,253 | ||||||
Nitto Denko Corp. | 22,500 | 1,022,130 | ||||||
Oji Holdings Corp. | 104,000 | 304,969 | ||||||
Shin-Etsu Chemical Co., Ltd. | 55,160 | 3,114,506 | ||||||
Showa Denko K.K. | 191,000 | 292,165 | ||||||
Sumitomo Chemical Co., Ltd. | 189,000 | 531,142 | ||||||
Sumitomo Metal Mining Co., Ltd. | 71,000 | 935,057 | ||||||
Taiheiyo Cement Corp. | 135,000 | 287,801 | ||||||
Taiyo Nippon Sanso Corp. | 36,000 | 197,588 | ||||||
Teijin Ltd. | 106,000 | 243,092 | ||||||
Toray Industries, Inc. | 200,000 | 1,167,433 | ||||||
Tosoh Corp. | 46,000 | 90,051 | ||||||
Toyo Seikan Kaisha Ltd. | 20,700 | 220,068 | ||||||
Ube Industries Ltd. | 119,000 | 271,792 | ||||||
Yamato Kogyo Co., Ltd. | 5,700 | 160,109 | ||||||
17,687,611 | ||||||||
Media 0.1% | ||||||||
Dentsu, Inc. | 24,700 | 583,456 | ||||||
Hakuhodo DY Holdings, Inc. | 3,180 | 190,573 | ||||||
Jupiter Telecommunications Co., Ltd. | 281 | 381,918 | ||||||
Toho Co., Ltd. | 15,500 | 270,337 | ||||||
1,426,284 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.2% | ||||||||
Astellas Pharma, Inc. | 59,570 | 2,962,867 | ||||||
Chugai Pharmaceutical Co., Ltd. | 30,500 | 617,970 | ||||||
Daiichi Sankyo Co., Ltd. | 90,600 | 1,386,727 | ||||||
Dainippon Sumitomo Pharma Co., Ltd. | 21,800 | 250,739 | ||||||
Eisai Co., Ltd. | 33,700 | 1,499,369 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 8,400 | 434,328 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 34,000 | 361,904 | ||||||
Mitsubishi Tanabe Pharma Corp. | 31,000 | 446,854 | ||||||
Ono Pharmaceutical Co., Ltd. | 11,300 | 682,284 | ||||||
Otsuka Holdings Co., Ltd. | 48,800 | 1,504,385 | ||||||
Santen Pharmaceutical Co., Ltd. | 10,100 | 442,436 | ||||||
Shionogi & Co., Ltd. | 41,000 | 680,678 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. | 5,000 | 403,804 | ||||||
Takeda Pharmaceutical Co., Ltd. | 105,900 | 4,922,319 | ||||||
Tsumura & Co. | 8,200 | 262,224 | ||||||
16,858,888 | ||||||||
Real Estate 0.9% | ||||||||
Aeon Mall Co., Ltd. | 9,900 | 256,785 | ||||||
Daito Trust Construction Co., Ltd. | 9,900 | 999,274 | ||||||
Daiwa House Industry Co., Ltd. | 69,000 | 1,046,401 | ||||||
Hulic Co., Ltd. * | 32,600 | 259,422 | ||||||
Japan Prime Realty Investment Corp. | 93 | 280,284 |
See financial notes 69
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Japan Real Estate Investment Corp. | 73 | 730,972 | ||||||
Japan Retail Fund Investment Corp. | 256 | 466,710 | ||||||
Mitsubishi Estate Co., Ltd. | 169,502 | 3,354,538 | ||||||
Mitsui Fudosan Co., Ltd. | 113,777 | 2,299,974 | ||||||
Nippon Building Fund, Inc. | 82 | 880,944 | ||||||
Nomura Real Estate Holdings, Inc. | 13,000 | 233,347 | ||||||
Nomura Real Estate Office Fund, Inc. | 37 | 232,770 | ||||||
NTT Urban Development Corp. | 155 | 127,718 | ||||||
Sumitomo Realty & Development Co., Ltd. | 49,000 | 1,353,973 | ||||||
Tokyu Land Corp. | 58,000 | 325,608 | ||||||
12,848,720 | ||||||||
Retailing 0.4% | ||||||||
ABC-Mart, Inc. | 3,600 | 157,884 | ||||||
Fast Retailing Co., Ltd. | 7,200 | 1,603,223 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 46,800 | 458,105 | ||||||
J. Front Retailing Co., Ltd. | 60,000 | 312,012 | ||||||
Marui Group Co., Ltd. | 30,000 | 215,802 | ||||||
Nitori Holdings Co., Ltd. | 4,600 | 375,651 | ||||||
Rakuten, Inc. | 96,700 | 869,257 | ||||||
Sanrio Co., Ltd. | 6,100 | 200,841 | ||||||
Shimamura Co., Ltd. | 3,000 | 312,700 | ||||||
Takashimaya Co., Ltd. | 36,000 | 236,783 | ||||||
USS Co., Ltd. | 2,990 | 314,375 | ||||||
Yamada Denki Co., Ltd. | 11,850 | 514,072 | ||||||
5,570,705 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Advantest Corp. | 20,400 | 258,021 | ||||||
Rohm Co., Ltd. | 13,200 | 426,311 | ||||||
Sumco Corp. * | 15,800 | 108,365 | ||||||
Tokyo Electron Ltd. | 23,400 | 1,053,710 | ||||||
1,846,407 | ||||||||
Software & Services 0.4% | ||||||||
Dena Co., Ltd. | 14,100 | 440,073 | ||||||
Gree, Inc. (a) | 13,000 | 226,612 | ||||||
Itochu Techno-Solutions Corp. | 3,200 | 165,555 | ||||||
Konami Corp. | 12,700 | 291,550 | ||||||
Nexon Co., Ltd. * | 15,000 | 182,934 | ||||||
Nintendo Co., Ltd. | 14,339 | 1,851,159 | ||||||
Nomura Research Institute Ltd. | 13,800 | 293,341 | ||||||
NTT Data Corp. | 172 | 560,597 | ||||||
Oracle Corp., Japan | 5,200 | 231,251 | ||||||
Otsuka Corp. | 2,200 | 179,369 | ||||||
Square Enix Holdings Co., Ltd. | 8,700 | 122,637 | ||||||
Trend Micro, Inc. | 14,500 | 406,466 | ||||||
Yahoo Japan Corp. | 1,894 | 651,815 | ||||||
5,603,359 | ||||||||
Technology Hardware & Equipment 1.7% | ||||||||
Brother Industries Ltd. | 32,200 | 303,680 | ||||||
Canon, Inc. | 152,195 | 4,946,285 | ||||||
Citizen Holdings Co., Ltd. | 36,000 | 182,709 | ||||||
FUJIFILM Holdings Corp. | 63,211 | 1,067,025 | ||||||
Fujitsu Ltd. | 247,000 | 950,296 | ||||||
Hamamatsu Photonics K.K. | 9,100 | 315,500 | ||||||
Hirose Electric Co., Ltd. | 3,900 | 417,436 | ||||||
Hitachi High-Technologies Corp. | 8,400 | 184,093 | ||||||
Hitachi Ltd. | 621,079 | 3,293,690 | ||||||
Hoya Corp. | 59,407 | 1,203,141 | ||||||
Ibiden Co., Ltd. | 16,500 | 208,076 | ||||||
Keyence Corp. | 6,100 | 1,619,481 | ||||||
Konica Minolta Holdings, Inc. | 65,500 | 435,763 | ||||||
Kyocera Corp. | 20,400 | 1,794,355 | ||||||
Murata Manufacturing Co., Ltd. | 27,474 | 1,336,491 | ||||||
NEC Corp. * | 297,000 | 569,661 | ||||||
Nippon Electric Glass Co., Ltd. | 54,000 | 274,842 | ||||||
Omron Corp. | 27,700 | 552,235 | ||||||
Ricoh Co., Ltd. | 89,000 | 744,831 | ||||||
Seiko Epson Corp. | 17,700 | 98,432 | ||||||
Shimadzu Corp. | 32,000 | 215,495 | ||||||
TDK Corp. | 16,800 | 631,746 | ||||||
Toshiba Corp. | 538,178 | 1,999,702 | ||||||
Yaskawa Electric Corp. | 29,000 | 207,842 | ||||||
Yokogawa Electric Corp. | 29,300 | 333,528 | ||||||
23,886,335 | ||||||||
Telecommunication Services 0.9% | ||||||||
KDDI Corp. | 36,200 | 2,812,026 | ||||||
Nippon Telegraph & Telephone Corp. | 58,278 | 2,664,942 | ||||||
NTT DoCoMo, Inc. | 2,057 | 2,980,647 | ||||||
Softbank Corp. | 118,700 | 3,748,816 | ||||||
12,206,431 | ||||||||
Transportation 1.0% | ||||||||
All Nippon Airways Co., Ltd. | 152,000 | 321,925 | ||||||
Central Japan Railway Co. | 19,300 | 1,660,842 | ||||||
East Japan Railway Co. | 45,860 | 3,147,681 | ||||||
Hankyu Hanshin Holdings, Inc. | 154,000 | 852,526 | ||||||
Japan Airlines Co., Ltd. * | 8,000 | 380,809 | ||||||
Kamigumi Co., Ltd. | 34,000 | 274,211 | ||||||
Kawasaki Kisen Kaisha Ltd. (a)* | 78,000 | 98,870 | ||||||
Keikyu Corp. | 64,000 | 602,759 | ||||||
Keio Corp. | 79,000 | 599,554 | ||||||
Keisei Electric Railway Co., Ltd. | 38,000 | 348,374 | ||||||
Kintetsu Corp. (a) | 215,000 | 842,578 | ||||||
Mitsubishi Logistics Corp. | 16,000 | 206,346 | ||||||
Mitsui O.S.K. Lines, Ltd. | 128,000 | 306,807 | ||||||
Nippon Express Co., Ltd. | 106,000 | 387,905 | ||||||
Nippon Yusen K.K. | 190,000 | 362,166 | ||||||
Odakyu Electric Railway Co., Ltd. | 85,000 | 901,916 | ||||||
Tobu Railway Co., Ltd. | 139,000 | 738,636 | ||||||
Tokyu Corp. | 147,000 | 747,743 | ||||||
West Japan Railway Co. | 23,100 | 1,008,493 | ||||||
Yamato Holdings Co., Ltd. | 51,000 | 776,917 | ||||||
14,567,058 | ||||||||
Utilities 0.5% | ||||||||
Chubu Electric Power Co., Inc. | 86,700 | 893,376 | ||||||
Electric Power Development Co., Ltd. | 15,900 | 407,260 | ||||||
Hokkaido Electric Power Co., Inc. | 25,000 | 205,886 | ||||||
Hokuriku Electric Power Co. | 23,000 | 228,426 | ||||||
Kyushu Electric Power Co., Inc. | 56,300 | 426,909 | ||||||
Osaka Gas Co., Ltd. | 244,000 | 1,005,652 |
70 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Shikoku Electric Power Co., Inc. | 22,900 | 244,832 | ||||||
The Chugoku Electric Power Co., Inc. | 40,500 | 435,655 | ||||||
The Kansai Electric Power Co., Inc. | 102,500 | 788,373 | ||||||
Toho Gas Co., Ltd. | 56,000 | 339,410 | ||||||
Tohoku Electric Power Co., Inc. * | 61,500 | 453,015 | ||||||
Tokyo Electric Power Co., Inc. * | 159,090 | 259,708 | ||||||
Tokyo Gas Co., Ltd. | 331,201 | 1,755,009 | ||||||
7,443,511 | ||||||||
271,454,089 | ||||||||
Netherlands 2.5% | ||||||||
Capital Goods 0.3% | ||||||||
Koninklijke Boskalis Westminster N.V. | 9,644 | 367,828 | ||||||
Koninklijke Philips Electronics N.V. | 139,303 | 3,488,990 | ||||||
3,856,818 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Randstad Holding N.V. | 16,328 | 533,850 | ||||||
Diversified Financials 0.3% | ||||||||
ING Groep N.V. CVA * | 511,460 | 4,551,036 | ||||||
Energy 0.1% | ||||||||
Fugro N.V. CVA | 9,440 | 638,838 | ||||||
SBM Offshore N.V. * | 23,355 | 305,737 | ||||||
944,575 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Koninklijke Ahold N.V. | 140,747 | 1,792,349 | ||||||
Food, Beverage & Tobacco 0.8% | ||||||||
DE Master Blenders 1753 N.V. * | 80,000 | 981,216 | ||||||
Heineken Holding N.V. | 13,324 | 676,962 | ||||||
Heineken N.V. | 31,007 | 1,913,527 | ||||||
Unilever N.V. CVA | 218,301 | 8,023,569 | ||||||
11,595,274 | ||||||||
Insurance 0.1% | ||||||||
Aegon N.V. | 226,393 | 1,266,137 | ||||||
Delta Lloyd N.V. | 18,600 | 309,327 | ||||||
1,575,464 | ||||||||
Materials 0.2% | ||||||||
Akzo Nobel N.V. | 31,611 | 1,720,525 | ||||||
Koninklijke DSM N.V. | 20,202 | 1,038,865 | ||||||
2,759,390 | ||||||||
Media 0.2% | ||||||||
Reed Elsevier N.V. | 92,572 | 1,242,641 | ||||||
Wolters Kluwer N.V. | 40,265 | 779,013 | ||||||
2,021,654 | ||||||||
Real Estate 0.0% | ||||||||
Corio N.V. | 8,303 | 369,881 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASML Holding N.V. | 56,436 | 3,102,413 | ||||||
Telecommunication Services 0.1% | ||||||||
Koninklijke (Royal) KPN N.V. | 136,326 | 859,351 | ||||||
Transportation 0.1% | ||||||||
Koninklijke Vopak N.V. | 9,594 | 667,936 | ||||||
TNT Express N.V. | 44,319 | 467,003 | ||||||
1,134,939 | ||||||||
35,096,994 | ||||||||
New Zealand 0.1% | ||||||||
Consumer Services 0.0% | ||||||||
SKYCITY Entertainment Group Ltd. | 78,727 | 251,098 | ||||||
Materials 0.1% | ||||||||
Fletcher Building Ltd. | 93,568 | 541,191 | ||||||
Telecommunication Services 0.0% | ||||||||
Telecom Corp. of New Zealand Ltd. | 247,415 | 489,108 | ||||||
Transportation 0.0% | ||||||||
Auckland International Airport Ltd. | 126,326 | 278,657 | ||||||
Utilities 0.0% | ||||||||
Contact Energy Ltd. * | 47,421 | 215,938 | ||||||
1,775,992 | ||||||||
Norway 0.9% | ||||||||
Banks 0.1% | ||||||||
DnB A.S.A. | 129,736 | 1,621,908 | ||||||
Capital Goods 0.1% | ||||||||
Orkla A.S.A. | 105,200 | 833,355 | ||||||
Energy 0.5% | ||||||||
Aker Solutions A.S.A. | 22,400 | 441,423 | ||||||
Seadrill Ltd. | 47,400 | 1,920,660 | ||||||
Statoil A.S.A. | 149,011 | 3,669,983 | ||||||
Subsea 7 S.A. | 38,400 | 841,807 | ||||||
6,873,873 | ||||||||
Insurance 0.0% | ||||||||
Gjensidige Forsikring A.S.A. | 27,290 | 398,492 | ||||||
Materials 0.1% | ||||||||
Norsk Hydro A.S.A. | 123,800 | 557,351 | ||||||
Yara International A.S.A. | 24,800 | 1,168,796 | ||||||
1,726,147 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. | 97,038 | 1,908,555 | ||||||
13,362,330 | ||||||||
Portugal 0.2% | ||||||||
Banks 0.0% | ||||||||
Banco Espirito Santo, S.A. - Reg’d * | 217,043 | 211,236 | ||||||
Energy 0.0% | ||||||||
Galp Energia, SGPS, S.A. | 31,135 | 498,405 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Jeronimo Martins, SGPS, S.A. | 30,054 | 526,127 | ||||||
Telecommunication Services 0.0% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d | 86,110 | 433,164 |
See financial notes 71
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 246,035 | 668,754 | ||||||
2,337,686 | ||||||||
Singapore 1.8% | ||||||||
Banks 0.6% | ||||||||
DBS Group Holdings Ltd. | 246,246 | 2,796,475 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 355,552 | 2,642,591 | ||||||
United Overseas Bank Ltd. | 172,233 | 2,568,471 | ||||||
8,007,537 | ||||||||
Capital Goods 0.3% | ||||||||
Cosco Corp., (Singapore) Ltd. | 94,000 | 67,478 | ||||||
Fraser & Neave Ltd. | 125,000 | 936,515 | ||||||
Keppel Corp., Ltd. | 194,800 | 1,694,851 | ||||||
Noble Group Ltd. | 488,000 | 521,050 | ||||||
SembCorp Industries Ltd. | 134,000 | 594,699 | ||||||
SembCorp Marine Ltd. | 106,000 | 407,167 | ||||||
Singapore Technologies Engineering Ltd. | 196,000 | 564,103 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 221,000 | 162,979 | ||||||
4,948,842 | ||||||||
Consumer Services 0.1% | ||||||||
Genting Singapore plc | 805,000 | 874,456 | ||||||
Diversified Financials 0.0% | ||||||||
Singapore Exchange Ltd. | 117,000 | 643,053 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Olam International Ltd. | 200,000 | 321,281 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Golden Agri-Resources Ltd. | 826,000 | 421,867 | ||||||
Wilmar International Ltd. | 249,000 | 628,537 | ||||||
1,050,404 | ||||||||
Media 0.1% | ||||||||
Singapore Press Holdings Ltd. | 220,000 | 727,425 | ||||||
Real Estate 0.3% | ||||||||
Ascendas REIT | 242,000 | 466,926 | ||||||
Capitaland Ltd. | 350,000 | 932,101 | ||||||
CapitaMall Trust | 296,000 | 509,297 | ||||||
CapitaMalls Asia Ltd. | 161,000 | 242,951 | ||||||
City Developments Ltd. | 68,000 | 634,916 | ||||||
Global Logistic Properties Ltd. | 260,000 | 545,504 | ||||||
Keppel Land Ltd. | 102,000 | 282,540 | ||||||
UOL Group Ltd. | 63,000 | 291,502 | ||||||
3,905,737 | ||||||||
Retailing 0.0% | ||||||||
Jardine Cycle & Carriage Ltd. | 15,000 | 603,521 | ||||||
Telecommunication Services 0.2% | ||||||||
Singapore Telecommunications Ltd. | 1,086,237 | 2,861,163 | ||||||
StarHub Ltd. | 82,000 | 246,706 | ||||||
3,107,869 | ||||||||
Transportation 0.1% | ||||||||
ComfortDelGro Corp., Ltd. | 257,000 | 355,395 | ||||||
Hutchison Port Holdings Trust, Class U | 653,000 | 506,998 | ||||||
Neptune Orient Lines Ltd. * | 138,000 | 130,611 | ||||||
Singapore Airlines Ltd. | 74,000 | 641,327 | ||||||
1,634,331 | ||||||||
25,824,456 | ||||||||
Spain 2.9% | ||||||||
Banks 1.3% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 721,256 | 6,026,775 | ||||||
Banco de Sabadell S.A. * | 376,183 | 917,301 | ||||||
Banco Popular Espanol S.A. * | 178,340 | 278,885 | ||||||
Banco Santander S.A. | 1,319,541 | 9,935,095 | ||||||
Bankia S.A. * | 111,485 | 168,274 | ||||||
CaixaBank | 109,562 | 416,098 | ||||||
17,742,428 | ||||||||
Capital Goods 0.1% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 19,321 | 412,902 | ||||||
Ferrovial S.A. | 56,073 | 793,449 | ||||||
Zardoya Otis S.A. | 20,026 | 247,700 | ||||||
1,454,051 | ||||||||
Energy 0.2% | ||||||||
Repsol S.A. | 108,282 | 2,170,054 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 78,792 | 477,334 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 103,173 | 286,205 | ||||||
Materials 0.0% | ||||||||
Acerinox S.A. | 13,607 | 142,033 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Grifols S.A. * | 19,336 | 671,554 | ||||||
Retailing 0.3% | ||||||||
Inditex S.A. | 29,593 | 3,778,792 | ||||||
Software & Services 0.1% | ||||||||
Amadeus IT Holding S.A., A Shares | 42,751 | 1,059,042 | ||||||
Telecommunication Services 0.5% | ||||||||
Telefonica S.A. | 540,302 | 7,131,329 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 49,724 | 751,022 | ||||||
International Consolidated Airlines Group S.A. * | 107,020 | 281,718 | ||||||
1,032,740 | ||||||||
Utilities 0.3% | ||||||||
Acciona S.A. | 2,696 | 165,713 | ||||||
Enagas S.A. | 24,432 | 486,016 | ||||||
Gas Natural SDG S.A. | 47,360 | 735,817 | ||||||
Iberdrola S.A. | 521,737 | 2,702,054 | ||||||
Red Electrica Corp. S.A. | 13,938 | 653,967 | ||||||
4,743,567 | ||||||||
40,689,129 |
72 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sweden 3.1% | ||||||||
Banks 0.6% | ||||||||
Nordea Bank AB | 353,602 | 3,214,118 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 189,848 | 1,575,318 | ||||||
Svenska Handelsbanken AB, A Shares | 66,443 | 2,280,136 | ||||||
Swedbank AB, A Shares | 110,454 | 2,051,626 | ||||||
9,121,198 | ||||||||
Capital Goods 0.9% | ||||||||
Alfa Laval AB | 46,070 | 801,486 | ||||||
Assa Abloy AB, B Shares | 44,629 | 1,486,846 | ||||||
Atlas Copco AB, A Shares | 90,253 | 2,219,431 | ||||||
Atlas Copco AB, B Shares | 53,246 | 1,167,589 | ||||||
Sandvik AB | 132,895 | 1,846,642 | ||||||
Scania AB, B Shares | 43,664 | 833,138 | ||||||
Skanska AB, B Shares | 51,406 | 805,278 | ||||||
SKF AB, B Shares | 53,410 | 1,205,344 | ||||||
Volvo AB, B Shares | 185,869 | 2,508,157 | ||||||
12,873,911 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Securitas AB, B Shares | 37,396 | 272,344 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, B Shares | 32,815 | 841,233 | ||||||
Husqvarna AB, B Shares | 51,798 | 300,876 | ||||||
1,142,109 | ||||||||
Diversified Financials 0.2% | ||||||||
Industrivarden AB, C Shares | 16,064 | 226,888 | ||||||
Investment AB Kinnevik, B Shares | 28,060 | 536,966 | ||||||
Investor AB, B Shares | 60,198 | 1,328,824 | ||||||
Ratos AB, B Shares | 26,143 | 224,465 | ||||||
2,317,143 | ||||||||
Energy 0.1% | ||||||||
Lundin Petroleum AB * | 30,365 | 728,577 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Swedish Match AB | 28,075 | 957,211 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Elekta AB, B Shares | 49,332 | 702,254 | ||||||
Getinge AB, B Shares | 25,925 | 797,768 | ||||||
1,500,022 | ||||||||
Household & Personal Products 0.1% | ||||||||
Svenska Cellulosa AB, B Shares | 76,545 | 1,492,336 | ||||||
Materials 0.1% | ||||||||
Boliden AB | 37,321 | 654,001 | ||||||
Holmen AB, B Shares | 7,206 | 212,357 | ||||||
SSAB AB, A Shares | 15,998 | 114,606 | ||||||
980,964 | ||||||||
Media 0.0% | ||||||||
Modern Times Group AB, B Shares | 5,633 | 171,832 | ||||||
Retailing 0.3% | ||||||||
Hennes & Mauritz AB, B Shares | 127,597 | 4,326,365 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Hexagon AB, B Shares | 32,231 | 744,577 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 404,020 | 3,579,242 | ||||||
4,323,819 | ||||||||
Telecommunication Services 0.2% | ||||||||
Millicom International Cellular S.A. SDR | 8,446 | 729,180 | ||||||
Tele2 AB, B Shares | 43,259 | 722,115 | ||||||
TeliaSonera AB | 288,336 | 1,895,587 | ||||||
3,346,882 | ||||||||
43,554,713 | ||||||||
Switzerland 8.6% | ||||||||
Banks 0.0% | ||||||||
Banque Cantonale Vaudoise - Reg’d | 405 | 214,611 | ||||||
Capital Goods 0.6% | ||||||||
ABB Ltd. - Reg’d * | 295,890 | 5,343,748 | ||||||
Geberit AG - Reg’d * | 5,125 | 1,058,543 | ||||||
Schindler Holding AG | 6,633 | 875,400 | ||||||
Schindler Holding AG - Reg’d | 2,938 | 380,145 | ||||||
Sulzer AG - Reg’d | 3,272 | 474,463 | ||||||
8,132,299 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Adecco S.A. - Reg’d * | 17,178 | 833,003 | ||||||
SGS S.A. - Reg’d | 725 | 1,536,942 | ||||||
2,369,945 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 69,992 | 4,542,340 | ||||||
The Swatch Group AG - Bearer Shares | 4,083 | 1,690,064 | ||||||
The Swatch Group AG - Reg’d | 5,924 | 430,885 | ||||||
6,663,289 | ||||||||
Diversified Financials 0.9% | ||||||||
Credit Suisse Group AG - Reg’d * | 163,796 | 3,809,133 | ||||||
GAM Holding AG * | 22,144 | 309,692 | ||||||
Julius Baer Group Ltd. * | 26,981 | 936,290 | ||||||
Pargesa Holding S.A. | 3,688 | 248,327 | ||||||
Partners Group Holding AG | 1,822 | 385,695 | ||||||
UBS AG - Reg’d * | 488,512 | 7,329,433 | ||||||
13,018,570 | ||||||||
Energy 0.1% | ||||||||
Transocean Ltd. * | 47,198 | 2,159,022 | ||||||
Food, Beverage & Tobacco 2.1% | ||||||||
Aryzta AG * | 11,530 | 576,010 | ||||||
Barry Callebaut AG - Reg’d | 247 | 235,902 | ||||||
Lindt & Spruengli AG * | 122 | 385,531 | ||||||
Lindt & Spruengli AG - Reg’d * | 14 | 509,622 | ||||||
Nestle S.A. - Reg’d | 442,233 | 28,076,565 | ||||||
29,783,630 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Sonova Holding AG - Reg’d * | 6,704 | 675,069 |
See financial notes 73
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Straumann Holding AG - Reg’d | 1,070 | 131,849 | ||||||
806,918 | ||||||||
Insurance 0.6% | ||||||||
Baloise Holding AG - Reg’d | 6,481 | 540,943 | ||||||
Swiss Life Holding AG - Reg’d * | 4,159 | 525,228 | ||||||
Swiss Re AG * | 46,982 | 3,251,030 | ||||||
Zurich Insurance Group AG * | 19,851 | 4,893,662 | ||||||
9,210,863 | ||||||||
Materials 0.6% | ||||||||
Givaudan S.A. - Reg’d * | 1,091 | 1,091,314 | ||||||
Holcim Ltd. - Reg’d * | 30,813 | 2,102,870 | ||||||
Sika AG | 295 | 614,727 | ||||||
Syngenta AG - Reg’d | 12,684 | 4,945,358 | ||||||
8,754,269 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.7% | ||||||||
Actelion Ltd. - Reg’d * | 15,099 | 728,790 | ||||||
Lonza Group AG - Reg’d * | 6,860 | 347,927 | ||||||
Novartis AG - Reg’d | 308,258 | 18,588,125 | ||||||
Roche Holding AG | 94,150 | 18,135,653 | ||||||
37,800,495 | ||||||||
Real Estate 0.0% | ||||||||
Swiss Prime Site AG - Reg’d * | 6,585 | 549,752 | ||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 3,130 | 1,302,898 | ||||||
Transportation 0.1% | ||||||||
Kuehne & Nagel International AG - Reg’d | 7,011 | 820,169 | ||||||
121,586,730 | ||||||||
United Kingdom 22.7% | ||||||||
Automobiles & Components 0.0% | ||||||||
GKN plc | 197,268 | 663,491 | ||||||
Banks 3.0% | ||||||||
Barclays plc | 1,551,180 | 5,735,845 | ||||||
HSBC Holdings plc | 2,431,036 | 23,968,271 | ||||||
Lloyds Banking Group plc * | 5,655,983 | 3,724,474 | ||||||
Royal Bank of Scotland Group plc * | 267,738 | 1,195,474 | ||||||
Standard Chartered plc | 320,089 | 7,578,602 | ||||||
42,202,666 | ||||||||
Capital Goods 0.9% | ||||||||
BAE Systems plc | 428,766 | 2,164,088 | ||||||
Balfour Beatty plc | 86,537 | 441,112 | ||||||
Bunzl plc | 45,083 | 746,772 | ||||||
Cobham plc | 138,372 | 481,062 | ||||||
IMI plc | 43,209 | 667,139 | ||||||
Invensys plc | 108,107 | 398,616 | ||||||
Meggitt plc | 106,056 | 661,477 | ||||||
Melrose plc | 160,000 | 623,252 | ||||||
Rolls-Royce Holdings plc * | 251,366 | 3,473,723 | ||||||
Smiths Group plc | 53,553 | 915,046 | ||||||
The Weir Group plc | 28,836 | 812,641 | ||||||
Wolseley plc | 38,877 | 1,704,264 | ||||||
13,089,192 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Aggreko plc | 36,295 | 1,262,338 | ||||||
Babcock International Group plc | 48,999 | 774,547 | ||||||
Capita plc | 86,930 | 1,015,705 | ||||||
Experian plc | 134,735 | 2,331,045 | ||||||
G4S plc | 188,592 | 793,704 | ||||||
Intertek Group plc | 21,852 | 996,062 | ||||||
Serco Group plc | 67,334 | 616,352 | ||||||
7,789,753 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Burberry Group plc | 59,816 | 1,128,607 | ||||||
Consumer Services 0.4% | ||||||||
Carnival plc | 24,999 | 995,771 | ||||||
Compass Group plc | 254,019 | 2,791,164 | ||||||
InterContinental Hotels Group plc | 36,970 | 914,703 | ||||||
TUI Travel plc | 52,053 | 211,194 | ||||||
Whitbread plc | 24,188 | 919,218 | ||||||
5,832,050 | ||||||||
Diversified Financials 0.2% | ||||||||
3i Group plc | 116,082 | 404,652 | ||||||
Aberdeen Asset Management plc | 115,543 | 606,008 | ||||||
ICAP plc | 69,275 | 364,457 | ||||||
Investec plc | 73,220 | 431,785 | ||||||
London Stock Exchange Group plc | 23,715 | 374,190 | ||||||
Man Group plc * | 243,973 | 310,032 | ||||||
Schroders plc | 15,420 | 380,490 | ||||||
2,871,614 | ||||||||
Energy 4.3% | ||||||||
AMEC plc | 43,001 | 737,800 | ||||||
BG Group plc | 456,581 | 8,477,284 | ||||||
BP plc | 2,549,771 | 18,209,432 | ||||||
Petrofac Ltd. | 35,391 | 918,823 | ||||||
Royal Dutch Shell plc, A Shares | 495,336 | 16,996,320 | ||||||
Royal Dutch Shell plc, B Shares | 354,342 | 12,533,927 | ||||||
Tullow Oil plc | 122,708 | 2,787,773 | ||||||
60,661,359 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
J. Sainsbury plc | 158,790 | 910,440 | ||||||
Tesco plc | 1,079,635 | 5,586,494 | ||||||
WM Morrison Supermarkets plc | 311,234 | 1,347,565 | ||||||
7,844,499 | ||||||||
Food, Beverage & Tobacco 2.9% | ||||||||
Associated British Foods plc | 48,027 | 1,074,773 | ||||||
British American Tobacco plc | 262,096 | 12,999,847 | ||||||
Diageo plc | 336,445 | 9,618,457 | ||||||
Imperial Tobacco Group plc | 134,418 | 5,083,607 | ||||||
SABMiller plc | 128,044 | 5,495,395 | ||||||
Tate & Lyle plc | 63,775 | 747,504 | ||||||
Unilever plc | 173,067 | 6,455,942 | ||||||
41,475,525 |
74 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Smith & Nephew plc | 121,818 | 1,288,244 | ||||||
Household & Personal Products 0.4% | ||||||||
Reckitt Benckiser Group plc | 87,192 | 5,282,454 | ||||||
Insurance 1.0% | ||||||||
Admiral Group plc | 27,667 | 495,780 | ||||||
Aviva plc | 390,663 | 2,092,154 | ||||||
Legal & General Group plc | 756,396 | 1,639,656 | ||||||
Old Mutual plc | 645,319 | 1,796,217 | ||||||
Prudential plc | 343,271 | 4,714,342 | ||||||
Resolution Ltd. | 182,867 | 644,722 | ||||||
RSA Insurance Group plc | 475,924 | 863,871 | ||||||
Standard Life plc | 313,588 | 1,480,705 | ||||||
13,727,447 | ||||||||
Materials 2.7% | ||||||||
Anglo American plc | 186,285 | 5,740,225 | ||||||
Antofagasta plc | 52,809 | 1,074,351 | ||||||
BHP Billiton plc | 283,039 | 9,071,742 | ||||||
Croda International plc | 18,209 | 648,317 | ||||||
Eurasian Natural Resources Corp. | 35,143 | 186,296 | ||||||
Evraz plc | 34,064 | 129,974 | ||||||
Fresnillo plc | 24,967 | 775,106 | ||||||
Glencore International plc | 510,242 | 2,831,458 | ||||||
Johnson Matthey plc | 27,961 | 1,017,456 | ||||||
Kazakhmys plc | 29,214 | 335,179 | ||||||
Lonmin plc (a) | 22,122 | 183,567 | ||||||
Randgold Resources Ltd. | 11,543 | 1,379,821 | ||||||
Rexam plc | 119,663 | 864,037 | ||||||
Rio Tinto plc | 179,629 | 8,973,620 | ||||||
Vedanta Resources plc | 13,525 | 248,509 | ||||||
Xstrata plc | 282,427 | 4,474,028 | ||||||
37,933,686 | ||||||||
Media 0.6% | ||||||||
British Sky Broadcasting Group plc | 147,583 | 1,689,066 | ||||||
ITV plc | 438,941 | 614,523 | ||||||
Pearson plc | 109,037 | 2,192,399 | ||||||
Reed Elsevier plc | 165,989 | 1,625,915 | ||||||
WPP plc | 169,031 | 2,184,770 | ||||||
8,306,673 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.8% | ||||||||
AstraZeneca plc | 169,309 | 7,851,663 | ||||||
GlaxoSmithKline plc | 672,218 | 15,062,680 | ||||||
Shire plc | 75,041 | 2,110,119 | ||||||
25,024,462 | ||||||||
Real Estate 0.3% | ||||||||
British Land Co., plc | 115,224 | 984,206 | ||||||
Capital Shopping Centres Group plc | 76,214 | 410,248 | ||||||
Hammerson plc | 97,236 | 741,487 | ||||||
Land Securities Group plc | 105,823 | 1,375,191 | ||||||
Segro plc | 96,274 | 369,140 | ||||||
3,880,272 | ||||||||
Retailing 0.3% | ||||||||
Kingfisher plc | 309,748 | 1,450,242 | ||||||
Marks & Spencer Group plc | 216,320 | 1,376,789 | ||||||
Next plc | 22,608 | 1,303,267 | ||||||
4,130,298 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ARM Holdings plc | 184,035 | 1,983,076 | ||||||
Software & Services 0.1% | ||||||||
The Sage Group plc | 169,617 | 851,907 | ||||||
Telecommunication Services 1.5% | ||||||||
BT Group plc | 1,035,669 | 3,559,165 | ||||||
Inmarsat plc | 61,946 | 567,507 | ||||||
Vodafone Group plc | 6,613,226 | 17,959,085 | ||||||
22,085,757 | ||||||||
Utilities 1.0% | ||||||||
Centrica plc | 695,306 | 3,640,147 | ||||||
National Grid plc | 477,725 | 5,448,237 | ||||||
Severn Trent plc | 32,415 | 840,689 | ||||||
SSE plc | 127,111 | 2,973,026 | ||||||
United Utilities Group plc | 93,029 | 1,017,117 | ||||||
13,919,216 | ||||||||
321,972,248 | ||||||||
Total Common Stock | ||||||||
(Cost $1,162,030,883) | 1,379,481,700 | |||||||
Preferred Stock 0.6% of net assets | ||||||||
Germany 0.6% | ||||||||
Automobiles & Components 0.4% | ||||||||
Bayerische Motoren Werke AG | 7,122 | 394,545 | ||||||
Porsche Automobil Holding SE | 20,132 | 1,341,879 | ||||||
Volkswagen AG | 19,254 | 3,997,625 | ||||||
5,734,049 | ||||||||
Household & Personal Products 0.2% | ||||||||
Henkel AG & Co. KGaA | 23,855 | 1,907,388 | ||||||
Media 0.0% | ||||||||
ProSiebenSat.1 Media AG | 10,450 | 291,381 | ||||||
Utilities 0.0% | ||||||||
RWE AG | 5,322 | 220,541 | ||||||
8,153,359 | ||||||||
United Kingdom 0.0% | ||||||||
Capital Goods 0.0% | ||||||||
Rolls-Royce Holdings plc, C Shares (b)* | 19,103,816 | 30,829 | ||||||
Total Preferred Stock | ||||||||
(Cost $5,868,851) | 8,184,188 | |||||||
See financial notes 75
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Company 1.5% of net assets | ||||||||
United States 1.5% | ||||||||
iShares MSCI EAFE Index Fund | 400,000 | 21,428,000 | ||||||
Total Other Investment Company | ||||||||
(Cost $21,315,494) | 21,428,000 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 0.0% of net assets | ||||||||
Time Deposits 0.0% | ||||||||
Brown Brothers Harriman | ||||||||
Japanese Yen | ||||||||
0.01%, 11/01/12 | 1,420,521 | 17,794 | ||||||
Hong Kong Dollar | ||||||||
0.01%, 11/01/12 | 62,510 | 8,066 | ||||||
Euro Currency | ||||||||
(0.02)%, 11/01/12 | 6,896 | 8,939 | ||||||
Societe Generale | ||||||||
US Dollar | ||||||||
0.03%, 11/01/12 | 276,695 | 276,695 | ||||||
Total Short-Term Investments | ||||||||
(Cost $311,494) | 311,494 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.3% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund | 4,237,548 | 4,237,548 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $4,237,548) | 4,237,548 | |||||||
End of collateral invested for securities on loan. |
At 10/31/12, the tax basis cost of the fund’s investments was $1,209,596,758 and the unrealized appreciation and depreciation were $364,596,385 and ($164,787,761), respectively, with a net unrealized appreciation of $199,808,624.
At 10/31/12, the values of certain foreign securities held by the fund aggregating $1,383,209,691 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
76 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .1% | Common Stock | 1,667,032,894 | 1,940,572,294 | ||||||||
0 | .7% | Other Investment Company | 14,493,390 | 14,493,390 | ||||||||
0 | .1% | Short-Term Investments | 1,838,750 | 1,838,750 | ||||||||
99 | .9% | Total Investments | 1,683,365,034 | 1,956,904,434 | ||||||||
0 | .9% | Collateral Invested for Securities on Loan | 17,726,150 | 17,726,150 | ||||||||
(0 | .8)% | Other Assets and Liabilities, Net | (14,833,460 | ) | ||||||||
100 | .0% | Net Assets | 1,959,797,124 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.1% of net assets | ||||||||
Automobiles & Components 0.7% | ||||||||
BorgWarner, Inc. * | 10,150 | 668,073 | ||||||
Delphi Automotive plc * | 26,900 | 845,736 | ||||||
Ford Motor Co. | 307,974 | 3,436,990 | ||||||
General Motors Co. * | 88,000 | 2,244,000 | ||||||
Harley-Davidson, Inc. | 42,460 | 1,985,430 | ||||||
Johnson Controls, Inc. | 123,510 | 3,180,382 | ||||||
Lear Corp. | 18,100 | 771,060 | ||||||
The Goodyear Tire & Rubber Co. * | 65,690 | 749,523 | ||||||
TRW Automotive Holdings Corp. * | 19,150 | 890,666 | ||||||
14,771,860 | ||||||||
Banks 2.5% | ||||||||
BB&T Corp. | 101,475 | 2,937,701 | ||||||
CIT Group, Inc. * | 13,800 | 513,636 | ||||||
Comerica, Inc. | 32,400 | 965,844 | ||||||
Fifth Third Bancorp | 154,590 | 2,246,193 | ||||||
Hudson City Bancorp, Inc. | 107,590 | 912,901 | ||||||
Huntington Bancshares, Inc. | 128,927 | 823,844 | ||||||
KeyCorp | 194,890 | 1,640,974 | ||||||
M&T Bank Corp. | 13,386 | 1,393,483 | ||||||
New York Community Bancorp, Inc. | 55,830 | 773,804 | ||||||
PNC Financial Services Group, Inc. | 50,845 | 2,958,671 | ||||||
Popular, Inc. * | 40,368 | 780,313 | ||||||
Regions Financial Corp. | 364,525 | 2,376,703 | ||||||
SunTrust Banks, Inc. | 129,660 | 3,526,752 | ||||||
Synovus Financial Corp. | 308,210 | 755,114 | ||||||
U.S. Bancorp | 222,900 | 7,402,509 | ||||||
Wells Fargo & Co. | 529,425 | 17,836,328 | ||||||
Zions Bancorp | 40,035 | 859,551 | ||||||
48,704,321 | ||||||||
Capital Goods 8.0% | ||||||||
3M Co. | 90,775 | 7,951,890 | ||||||
AECOM Technology Corp. * | 24,200 | 519,574 | ||||||
AGCO Corp. * | 17,540 | 798,245 | ||||||
Alliant Techsystems, Inc. | 9,120 | 522,485 | ||||||
Caterpillar, Inc. | 67,745 | 5,745,453 | ||||||
Cooper Industries plc | 21,270 | 1,593,974 | ||||||
Cummins, Inc. | 18,084 | 1,692,301 | ||||||
Danaher Corp. | 35,300 | 1,826,069 | ||||||
Deere & Co. | 45,586 | 3,894,868 | ||||||
Dover Corp. | 27,075 | 1,576,307 | ||||||
Eaton Corp. | 45,420 | 2,144,732 | ||||||
EMCOR Group, Inc. | 18,440 | 593,030 | ||||||
Emerson Electric Co. | 114,350 | 5,537,970 | ||||||
Exelis, Inc. | 51,255 | 566,880 | ||||||
Fastenal Co. | 15,140 | 676,758 | ||||||
Flowserve Corp. | 5,725 | 775,680 | ||||||
Fluor Corp. | 38,940 | 2,174,799 | ||||||
General Dynamics Corp. | 65,725 | 4,474,558 | ||||||
General Electric Co. | 1,654,725 | 34,848,508 | ||||||
Harsco Corp. | 30,435 | 608,396 | ||||||
Honeywell International, Inc. | 95,440 | 5,844,746 | ||||||
Hubbell, Inc., Class B | 7,430 | 622,040 | ||||||
Huntington Ingalls Industries, Inc. * | 14,315 | 606,670 | ||||||
Illinois Tool Works, Inc. | 57,470 | 3,524,635 | ||||||
Ingersoll-Rand plc | 61,142 | 2,875,508 | ||||||
ITT Corp. | 66,127 | 1,375,442 | ||||||
Jacobs Engineering Group, Inc. * | 31,140 | 1,201,693 | ||||||
Joy Global, Inc. | 11,600 | 724,420 | ||||||
KBR, Inc. | 34,800 | 969,528 | ||||||
L-3 Communications Holdings, Inc. | 36,135 | 2,666,763 | ||||||
Lennox International, Inc. | 13,935 | 697,447 | ||||||
Lockheed Martin Corp. | 61,835 | 5,792,084 | ||||||
Masco Corp. | 162,750 | 2,455,897 | ||||||
Northrop Grumman Corp. | 98,295 | 6,751,884 | ||||||
Oshkosh Corp. * | 22,720 | 681,146 | ||||||
Owens Corning * | 22,350 | 750,737 | ||||||
PACCAR, Inc. | 56,042 | 2,428,860 | ||||||
Pall Corp. | 8,740 | 550,270 | ||||||
Parker Hannifin Corp. | 24,517 | 1,928,507 | ||||||
Pentair Ltd. | 18,537 | 783,003 | ||||||
Precision Castparts Corp. | 9,416 | 1,629,627 | ||||||
Quanta Services, Inc. * | 25,200 | 653,436 | ||||||
Raytheon Co. | 96,510 | 5,458,606 | ||||||
Rockwell Automation, Inc. | 14,050 | 998,393 | ||||||
Rockwell Collins, Inc. | 21,030 | 1,126,787 | ||||||
Roper Industries, Inc. | 5,000 | 545,850 | ||||||
SPX Corp. | 13,635 | 935,225 | ||||||
Stanley Black & Decker, Inc. | 12,203 | 845,668 | ||||||
Terex Corp. * | 38,725 | 873,249 | ||||||
Textron, Inc. | 55,120 | 1,389,575 | ||||||
The Boeing Co. | 79,240 | 5,581,666 |
See financial notes 1
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Timken Co. | 12,565 | 496,192 | ||||||
Trinity Industries, Inc. | 16,825 | 526,286 | ||||||
United Rentals, Inc. * | 20,500 | 833,530 | ||||||
United Technologies Corp. | 138,915 | 10,857,596 | ||||||
URS Corp. | 25,493 | 853,506 | ||||||
W.W. Grainger, Inc. | 6,835 | 1,376,637 | ||||||
WESCO International, Inc. * | 10,900 | 707,192 | ||||||
Xylem, Inc. | 11,455 | 277,898 | ||||||
157,720,676 | ||||||||
Commercial & Professional Supplies 0.9% | ||||||||
Avery Dennison Corp. | 28,150 | 911,497 | ||||||
Cintas Corp. | 24,550 | 1,026,435 | ||||||
Equifax, Inc. | 14,230 | 712,069 | ||||||
Iron Mountain, Inc. | 16,055 | 555,503 | ||||||
Manpower, Inc. | 48,690 | 1,847,299 | ||||||
Pitney Bowes, Inc. (b) | 69,205 | 993,784 | ||||||
R.R. Donnelley & Sons Co. (b) | 130,940 | 1,312,019 | ||||||
Republic Services, Inc. | 34,824 | 987,260 | ||||||
Robert Half International, Inc. | 37,810 | 1,016,711 | ||||||
The Brink’s Co. | 19,020 | 500,416 | ||||||
The Dun & Bradstreet Corp. | 9,000 | 729,360 | ||||||
Tyco International Ltd. | 99,465 | 2,672,625 | ||||||
United Stationers, Inc. | 20,650 | 599,263 | ||||||
Waste Management, Inc. | 113,055 | 3,701,421 | ||||||
17,565,662 | ||||||||
Consumer Durables & Apparel 1.1% | ||||||||
Coach, Inc. | 23,475 | 1,315,774 | ||||||
D.R. Horton, Inc. | 68,790 | 1,441,838 | ||||||
Garmin Ltd. (b) | 14,970 | 568,710 | ||||||
Harman International Industries, Inc. | 13,320 | 558,508 | ||||||
Hasbro, Inc. (b) | 24,865 | 894,891 | ||||||
Jarden Corp. | 12,477 | 621,355 | ||||||
Leggett & Platt, Inc. | 44,320 | 1,175,810 | ||||||
Mattel, Inc. | 48,335 | 1,777,761 | ||||||
Mohawk Industries, Inc. * | 12,835 | 1,071,337 | ||||||
Newell Rubbermaid, Inc. | 53,850 | 1,111,464 | ||||||
NIKE, Inc., Class B | 37,728 | 3,447,585 | ||||||
NVR, Inc. * | 1,503 | 1,358,321 | ||||||
Ralph Lauren Corp. | 5,520 | 848,369 | ||||||
The Jones Group, Inc. | 63,875 | 754,364 | ||||||
VF Corp. | 9,445 | 1,477,954 | ||||||
Whirlpool Corp. | 27,055 | 2,642,732 | ||||||
21,066,773 | ||||||||
Consumer Services 1.4% | ||||||||
Apollo Group, Inc., Class A * | 27,050 | 543,164 | ||||||
Brinker International, Inc. | 25,755 | 793,254 | ||||||
Carnival Corp. | 42,845 | 1,622,969 | ||||||
Darden Restaurants, Inc. | 22,445 | 1,181,056 | ||||||
H&R Block, Inc. | 48,765 | 863,141 | ||||||
International Game Technology | 48,955 | 628,582 | ||||||
Marriott International, Inc., Class A | 39,989 | 1,458,799 | ||||||
McDonald’s Corp. | 111,480 | 9,676,464 | ||||||
MGM Resorts International * | 64,115 | 661,026 | ||||||
Royal Caribbean Cruises Ltd. | 29,205 | 983,332 | ||||||
Service Corp. International | 45,600 | 640,224 | ||||||
Starbucks Corp. | 41,290 | 1,895,211 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 29,070 | 1,507,279 | ||||||
Wyndham Worldwide Corp. | 19,640 | 989,856 | ||||||
Wynn Resorts Ltd. | 5,000 | 605,300 | ||||||
Yum! Brands, Inc. | 38,230 | 2,680,305 | ||||||
26,729,962 | ||||||||
Diversified Financials 7.1% | ||||||||
American Express Co. | 120,425 | 6,740,187 | ||||||
Ameriprise Financial, Inc. | 21,000 | 1,225,770 | ||||||
Bank of America Corp. | 4,033,960 | 37,596,507 | ||||||
BlackRock, Inc. | 4,500 | 853,560 | ||||||
Capital One Financial Corp. | 73,820 | 4,441,750 | ||||||
Citigroup, Inc. | 676,633 | 25,299,308 | ||||||
CME Group, Inc. | 21,100 | 1,180,123 | ||||||
Discover Financial Services | 48,522 | 1,989,402 | ||||||
Federated Investors, Inc., Class B (b) | 22,630 | 525,921 | ||||||
Franklin Resources, Inc. | 18,740 | 2,394,972 | ||||||
Invesco Ltd. | 44,000 | 1,070,080 | ||||||
Janus Capital Group, Inc. | 72,000 | 612,000 | ||||||
JPMorgan Chase & Co. | 623,742 | 25,997,567 | ||||||
Legg Mason, Inc. | 38,920 | 991,682 | ||||||
Moody’s Corp. | 26,570 | 1,279,611 | ||||||
Morgan Stanley | 237,735 | 4,131,834 | ||||||
Northern Trust Corp. | 20,860 | 996,691 | ||||||
NYSE Euronext | 40,520 | 1,003,275 | ||||||
PHH Corp. * | 38,590 | 803,058 | ||||||
SLM Corp. | 62,635 | 1,101,123 | ||||||
State Street Corp. | 43,136 | 1,922,572 | ||||||
T. Rowe Price Group, Inc. | 20,945 | 1,360,168 | ||||||
TD Ameritrade Holding Corp. | 30,170 | 473,367 | ||||||
The Bank of New York Mellon Corp. | 116,852 | 2,887,413 | ||||||
The Charles Schwab Corp. (a) | 145,215 | 1,972,020 | ||||||
The Goldman Sachs Group, Inc. | 77,411 | 9,474,332 | ||||||
138,324,293 | ||||||||
Energy 15.3% | ||||||||
Anadarko Petroleum Corp. | 48,115 | 3,310,793 | ||||||
Apache Corp. | 39,120 | 3,237,180 | ||||||
Arch Coal, Inc. | 60,100 | 478,396 | ||||||
Baker Hughes, Inc. | 67,449 | 2,830,835 | ||||||
Cameron International Corp. * | 19,480 | 986,467 | ||||||
Chesapeake Energy Corp. | 130,720 | 2,648,387 | ||||||
Chevron Corp. | 459,305 | 50,620,004 | ||||||
Cimarex Energy Co. | 8,045 | 460,013 | ||||||
ConocoPhillips | 546,510 | 31,615,603 | ||||||
CONSOL Energy, Inc. | 21,335 | 750,139 | ||||||
Devon Energy Corp. | 63,440 | 3,692,842 | ||||||
Diamond Offshore Drilling, Inc. | 14,320 | 991,517 | ||||||
Energen Corp. | 10,310 | 480,962 | ||||||
EOG Resources, Inc. | 16,150 | 1,881,314 | ||||||
Exxon Mobil Corp. | 1,204,984 | 109,858,391 | ||||||
FMC Technologies, Inc. * | 14,180 | 579,962 | ||||||
Frontline Ltd. (b)* | 120,900 | 383,253 | ||||||
Halliburton Co. | 127,065 | 4,102,929 | ||||||
Helmerich & Payne, Inc. | 9,395 | 449,081 |
2 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hess Corp. | 88,650 | 4,632,849 | ||||||
HollyFrontier Corp. | 13,802 | 533,171 | ||||||
Kinder Morgan, Inc. | 26,700 | 926,757 | ||||||
Marathon Oil Corp. | 348,390 | 10,472,603 | ||||||
Marathon Petroleum Corp. | 53,395 | 2,932,987 | ||||||
McDermott International, Inc. * | 47,810 | 512,045 | ||||||
Murphy Oil Corp. | 62,375 | 3,742,500 | ||||||
Nabors Industries Ltd. * | 86,700 | 1,169,583 | ||||||
National Oilwell Varco, Inc. | 33,323 | 2,455,905 | ||||||
Newfield Exploration Co. * | 18,400 | 499,008 | ||||||
Noble Energy, Inc. | 12,835 | 1,219,453 | ||||||
Occidental Petroleum Corp. | 97,170 | 7,672,543 | ||||||
Patterson-UTI Energy, Inc. | 46,600 | 753,988 | ||||||
Peabody Energy Corp. | 38,645 | 1,078,196 | ||||||
Phillips 66 | 184,555 | 8,703,614 | ||||||
Pioneer Natural Resources Co. | 6,400 | 676,160 | ||||||
QEP Resources, Inc. | 21,850 | 633,650 | ||||||
Rowan Cos. plc, Class A * | 17,000 | 539,070 | ||||||
Schlumberger Ltd. | 104,700 | 7,279,791 | ||||||
SEACOR Holdings, Inc. * | 6,000 | 526,260 | ||||||
Southwestern Energy Co. * | 16,640 | 577,408 | ||||||
Spectra Energy Corp. | 68,860 | 1,987,988 | ||||||
Tesoro Corp. | 78,360 | 2,954,956 | ||||||
The Williams Cos., Inc. | 77,375 | 2,707,351 | ||||||
Tidewater, Inc. | 10,720 | 509,307 | ||||||
Valero Energy Corp. | 480,125 | 13,971,638 | ||||||
World Fuel Services Corp. | 30,500 | 1,058,350 | ||||||
WPX Energy, Inc. * | 34,358 | 582,025 | ||||||
300,667,224 | ||||||||
Food & Staples Retailing 4.2% | ||||||||
Casey’s General Stores, Inc. | 11,312 | 583,134 | ||||||
Costco Wholesale Corp. | 90,815 | 8,938,920 | ||||||
CVS Caremark Corp. | 298,735 | 13,861,304 | ||||||
Safeway, Inc. (b) | 242,340 | 3,952,565 | ||||||
SUPERVALU, Inc. (b) | 537,720 | 1,672,309 | ||||||
Sysco Corp. | 148,540 | 4,615,138 | ||||||
The Kroger Co. | 241,220 | 6,083,568 | ||||||
Wal-Mart Stores, Inc. | 432,325 | 32,433,022 | ||||||
Walgreen Co. | 266,370 | 9,384,215 | ||||||
Whole Foods Market, Inc. | 11,400 | 1,079,922 | ||||||
82,604,097 | ||||||||
Food, Beverage & Tobacco 4.9% | ||||||||
Altria Group, Inc. | 383,480 | 12,194,664 | ||||||
Archer-Daniels-Midland Co. | 204,505 | 5,488,914 | ||||||
Beam, Inc. | 22,700 | 1,261,212 | ||||||
Brown-Forman Corp., Class B | 11,250 | 720,675 | ||||||
Bunge Ltd. | 55,775 | 3,961,698 | ||||||
Campbell Soup Co. (b) | 32,930 | 1,161,441 | ||||||
Coca-Cola Enterprises, Inc. | 81,395 | 2,559,059 | ||||||
ConAgra Foods, Inc. | 99,605 | 2,773,003 | ||||||
Constellation Brands, Inc., Class A * | 25,905 | 915,483 | ||||||
Dean Foods Co. * | 111,990 | 1,885,912 | ||||||
Dr Pepper Snapple Group, Inc. | 26,600 | 1,139,810 | ||||||
General Mills, Inc. | 72,610 | 2,910,209 | ||||||
H.J. Heinz Co. | 39,475 | 2,270,207 | ||||||
Hillshire Brands Co. | 36,100 | 938,961 | ||||||
Hormel Foods Corp. | 21,120 | 623,674 | ||||||
Ingredion, Inc. | 10,500 | 645,330 | ||||||
Kellogg Co. | 35,180 | 1,840,618 | ||||||
Lorillard, Inc. | 17,018 | 1,974,258 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 11,940 | 735,743 | ||||||
Mead Johnson Nutrition Co. | 6,900 | 425,454 | ||||||
Molson Coors Brewing Co., Class B | 19,080 | 823,111 | ||||||
Mondelez International, Inc., Class A | 229,292 | 6,085,410 | ||||||
PepsiCo, Inc. | 185,808 | 12,865,346 | ||||||
Philip Morris International, Inc. | 140,820 | 12,471,019 | ||||||
Ralcorp Holdings, Inc. * | 6,100 | 440,359 | ||||||
Reynolds American, Inc. | 41,150 | 1,713,486 | ||||||
Smithfield Foods, Inc. * | 48,306 | 988,824 | ||||||
The Coca-Cola Co. | 297,430 | 11,058,447 | ||||||
The Hershey Co. | 13,150 | 905,377 | ||||||
The JM Smucker Co. | 12,525 | 1,072,641 | ||||||
Tyson Foods, Inc., Class A | 118,580 | 1,993,330 | ||||||
96,843,675 | ||||||||
Health Care Equipment & Services 5.0% | ||||||||
Aetna, Inc. | 109,660 | 4,792,142 | ||||||
AMERIGROUP Corp. * | 6,900 | 630,246 | ||||||
AmerisourceBergen Corp. | 106,240 | 4,190,106 | ||||||
Baxter International, Inc. | 65,960 | 4,131,075 | ||||||
Becton, Dickinson & Co. | 31,855 | 2,410,786 | ||||||
Boston Scientific Corp. * | 310,365 | 1,595,276 | ||||||
C.R. Bard, Inc. | 11,200 | 1,077,328 | ||||||
Cardinal Health, Inc. | 165,020 | 6,787,273 | ||||||
CareFusion Corp. * | 28,110 | 746,602 | ||||||
Cigna Corp. | 52,109 | 2,657,559 | ||||||
Community Health Systems, Inc. * | 33,750 | 925,425 | ||||||
Coventry Health Care, Inc. | 46,950 | 2,048,898 | ||||||
Covidien plc | 44,770 | 2,460,111 | ||||||
DaVita, Inc. * | 9,780 | 1,100,446 | ||||||
DENTSPLY International, Inc. | 15,935 | 587,045 | ||||||
Express Scripts Holding Co. * | 83,640 | 5,147,206 | ||||||
HCA Holdings, Inc. | 16,800 | 477,288 | ||||||
Health Net, Inc. * | 51,170 | 1,101,178 | ||||||
Henry Schein, Inc. * | 11,230 | 828,549 | ||||||
Humana, Inc. | 33,440 | 2,483,589 | ||||||
Kindred Healthcare, Inc. * | 49,300 | 483,140 | ||||||
Laboratory Corp. of America Holdings * | 10,330 | 875,261 | ||||||
LifePoint Hospitals, Inc. * | 12,530 | 442,810 | ||||||
McKesson Corp. | 81,200 | 7,576,772 | ||||||
Medtronic, Inc. | 154,265 | 6,414,339 | ||||||
Omnicare, Inc. | 28,810 | 994,809 | ||||||
Owens & Minor, Inc. | 23,502 | 669,102 | ||||||
Patterson Cos., Inc. | 17,875 | 597,025 | ||||||
Quest Diagnostics, Inc. | 28,055 | 1,619,335 | ||||||
St. Jude Medical, Inc. | 39,160 | 1,498,262 | ||||||
Stryker Corp. | 31,845 | 1,675,047 | ||||||
Tenet Healthcare Corp. * | 23,093 | 544,995 | ||||||
UnitedHealth Group, Inc. | 239,275 | 13,399,400 | ||||||
Universal Health Services, Inc., Class B | 19,050 | 788,479 | ||||||
Varian Medical Systems, Inc. * | 9,920 | 662,259 | ||||||
WellCare Health Plans, Inc. * | 8,000 | 380,800 |
See financial notes 3
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
WellPoint, Inc. | 189,370 | 11,604,593 | ||||||
Zimmer Holdings, Inc. | 33,540 | 2,153,603 | ||||||
98,558,159 | ||||||||
Household & Personal Products 2.3% | ||||||||
Avon Products, Inc. | 98,125 | 1,519,956 | ||||||
Church & Dwight Co., Inc. | 8,900 | 451,764 | ||||||
Colgate-Palmolive Co. | 41,630 | 4,369,485 | ||||||
Energizer Holdings, Inc. | 7,520 | 548,734 | ||||||
Herbalife Ltd. | 9,100 | 467,285 | ||||||
Kimberly-Clark Corp. | 49,320 | 4,115,754 | ||||||
The Clorox Co. | 11,720 | 847,356 | ||||||
The Estee Lauder Cos., Inc., Class A | 13,820 | 851,589 | ||||||
The Procter & Gamble Co. | 456,695 | 31,621,562 | ||||||
44,793,485 | ||||||||
Insurance 4.3% | ||||||||
ACE Ltd. | 33,800 | 2,658,370 | ||||||
Aflac, Inc. | 58,340 | 2,904,165 | ||||||
American Financial Group, Inc. | 14,640 | 568,032 | ||||||
American International Group, Inc. * | 89,980 | 3,143,001 | ||||||
Aon plc | 35,536 | 1,917,167 | ||||||
Arch Capital Group Ltd. * | 21,875 | 965,781 | ||||||
Aspen Insurance Holdings Ltd. | 18,025 | 583,109 | ||||||
Assurant, Inc. | 30,755 | 1,162,847 | ||||||
Axis Capital Holdings Ltd. | 24,350 | 881,957 | ||||||
Berkshire Hathaway, Inc., Class B * | 153,411 | 13,247,040 | ||||||
Cincinnati Financial Corp. | 30,080 | 1,198,387 | ||||||
Endurance Specialty Holdings Ltd. | 12,330 | 499,982 | ||||||
Everest Re Group Ltd. | 7,925 | 880,071 | ||||||
Fidelity National Financial, Inc., Class A | 75,625 | 1,619,131 | ||||||
Genworth Financial, Inc., Class A * | 232,100 | 1,383,316 | ||||||
Hartford Financial Services Group, Inc. | 176,810 | 3,838,545 | ||||||
Kemper Corp. | 17,750 | 550,250 | ||||||
Lincoln National Corp. | 55,480 | 1,375,349 | ||||||
Loews Corp. | 52,082 | 2,202,027 | ||||||
Marsh & McLennan Cos., Inc. | 59,050 | 2,009,472 | ||||||
MetLife, Inc. | 79,405 | 2,818,083 | ||||||
PartnerRe Ltd. | 13,130 | 1,063,530 | ||||||
Platinum Underwriters Holdings Ltd. | 10,900 | 483,960 | ||||||
Principal Financial Group, Inc. | 40,385 | 1,112,203 | ||||||
Prudential Financial, Inc. | 79,640 | 4,543,462 | ||||||
Reinsurance Group of America, Inc. | 8,800 | 465,696 | ||||||
RenaissanceRe Holdings Ltd. | 9,025 | 734,274 | ||||||
The Allstate Corp. | 154,855 | 6,191,103 | ||||||
The Chubb Corp. | 57,075 | 4,393,634 | ||||||
The Progressive Corp. | 140,045 | 3,123,004 | ||||||
The Travelers Cos., Inc. | 152,695 | 10,832,183 | ||||||
Torchmark Corp. | 15,810 | 799,828 | ||||||
Unum Group | 48,225 | 978,003 | ||||||
W. R. Berkley Corp. | 22,960 | 892,914 | ||||||
White Mountains Insurance Group Ltd. | 929 | 476,298 | ||||||
XL Group plc | 49,085 | 1,214,363 | ||||||
83,710,537 | ||||||||
Materials 3.4% | ||||||||
Air Products & Chemicals, Inc. | 28,775 | 2,230,926 | ||||||
Airgas, Inc. | 7,300 | 649,481 | ||||||
Albemarle Corp. | 8,400 | 462,924 | ||||||
Alcoa, Inc. | 444,005 | 3,805,123 | ||||||
Allegheny Technologies, Inc. | 22,011 | 579,990 | ||||||
AptarGroup, Inc. | 9,100 | 466,648 | ||||||
Ashland, Inc. | 19,535 | 1,389,915 | ||||||
Ball Corp. | 25,580 | 1,095,591 | ||||||
Bemis Co., Inc. | 21,055 | 695,868 | ||||||
Celanese Corp., Series A | 15,200 | 577,448 | ||||||
CF Industries Holdings, Inc. | 4,171 | 855,847 | ||||||
Cliffs Natural Resources, Inc. | 12,000 | 435,240 | ||||||
Commercial Metals Co. | 66,945 | 921,163 | ||||||
Domtar Corp. | 10,491 | 836,657 | ||||||
E.I. du Pont de Nemours & Co. | 93,345 | 4,155,719 | ||||||
Eastman Chemical Co. | 24,820 | 1,470,337 | ||||||
Ecolab, Inc. | 18,091 | 1,259,134 | ||||||
FMC Corp. | 10,980 | 587,650 | ||||||
Freeport-McMoran Copper & Gold, Inc. | 114,970 | 4,470,034 | ||||||
Huntsman Corp. | 53,715 | 807,874 | ||||||
International Flavors & Fragrances, Inc. | 10,335 | 667,848 | ||||||
International Paper Co. | 92,395 | 3,310,513 | ||||||
LyondellBasell Industries N.V., Class A | 13,800 | 736,782 | ||||||
Martin Marietta Materials, Inc. | 7,210 | 593,455 | ||||||
MeadWestvaco Corp. | 39,940 | 1,185,819 | ||||||
Monsanto Co. | 36,495 | 3,141,125 | ||||||
Newmont Mining Corp. | 37,010 | 2,018,895 | ||||||
Nucor Corp. | 90,480 | 3,630,962 | ||||||
Owens-Illinois, Inc. * | 41,845 | 815,559 | ||||||
Packaging Corp. of America | 17,845 | 629,393 | ||||||
PPG Industries, Inc. | 20,000 | 2,341,600 | ||||||
Praxair, Inc. | 26,970 | 2,864,484 | ||||||
Reliance Steel & Aluminum Co. | 20,620 | 1,120,491 | ||||||
RPM International, Inc. | 22,065 | 588,253 | ||||||
Sealed Air Corp. | 46,075 | 747,337 | ||||||
Sigma-Aldrich Corp. | 11,030 | 773,644 | ||||||
Sonoco Products Co. | 21,555 | 671,007 | ||||||
Southern Copper Corp. | 22,022 | 839,038 | ||||||
Steel Dynamics, Inc. | 62,450 | 789,992 | ||||||
The Dow Chemical Co. | 222,500 | 6,519,250 | ||||||
The Mosaic Co. | 23,210 | 1,214,811 | ||||||
The Sherwin-Williams Co. | 12,045 | 1,717,376 | ||||||
The Valspar Corp. | 11,150 | 624,735 | ||||||
United States Steel Corp. (b) | 71,195 | 1,451,666 | ||||||
Vulcan Materials Co. | 21,423 | 984,815 | ||||||
67,732,419 | ||||||||
Media 4.3% | ||||||||
Cablevision Systems Corp., Class A | 57,665 | 1,004,524 |
4 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
CBS Corp., Class B - Non Voting Shares | 99,590 | 3,226,716 | ||||||
Charter Communications, Inc., Class A * | 4,700 | 363,827 | ||||||
Comcast Corp., Class A | 289,840 | 10,871,899 | ||||||
DIRECTV * | 115,540 | 5,905,249 | ||||||
Discovery Communications, Inc., Class A * | 14,467 | 853,842 | ||||||
DISH Network Corp., Class A | 27,170 | 968,067 | ||||||
Gannett Co., Inc. | 110,530 | 1,867,957 | ||||||
Lamar Advertising Co., Class A * | 17,020 | 668,035 | ||||||
Liberty Global, Inc., Class A * | 53,110 | 3,188,193 | ||||||
News Corp., Class A | 273,520 | 6,542,598 | ||||||
Omnicom Group, Inc. | 48,604 | 2,328,618 | ||||||
The Interpublic Group of Cos., Inc. | 42,405 | 428,291 | ||||||
The McGraw-Hill Cos., Inc. | 53,380 | 2,950,846 | ||||||
The Walt Disney Co. | 280,950 | 13,786,217 | ||||||
The Washington Post Co., Class B | 1,620 | 540,286 | ||||||
Thomson Reuters Corp. | 55,000 | 1,554,300 | ||||||
Time Warner Cable, Inc. | 45,009 | 4,460,842 | ||||||
Time Warner, Inc. | 400,988 | 17,422,929 | ||||||
Viacom Inc., Class B | 77,700 | 3,983,679 | ||||||
Virgin Media, Inc. | 53,710 | 1,758,465 | ||||||
84,675,380 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.0% | ||||||||
Abbott Laboratories | 140,190 | 9,185,249 | ||||||
Agilent Technologies, Inc. | 63,805 | 2,296,342 | ||||||
Allergan, Inc. | 11,130 | 1,000,810 | ||||||
Amgen, Inc. | 120,155 | 10,398,814 | ||||||
Biogen Idec, Inc. * | 15,450 | 2,135,499 | ||||||
Bristol-Myers Squibb Co. | 204,750 | 6,807,937 | ||||||
Celgene Corp. * | 7,400 | 542,568 | ||||||
Eli Lilly & Co. | 140,855 | 6,849,779 | ||||||
Forest Laboratories, Inc. * | 44,055 | 1,485,094 | ||||||
Gilead Sciences, Inc. * | 54,760 | 3,677,682 | ||||||
Hospira, Inc. * | 19,050 | 584,644 | ||||||
Johnson & Johnson | 374,095 | 26,493,408 | ||||||
Life Technologies Corp. * | 12,819 | 626,977 | ||||||
Merck & Co., Inc. | 290,757 | 13,267,242 | ||||||
Mettler-Toledo International, Inc. * | 2,900 | 491,173 | ||||||
Mylan, Inc. * | 24,075 | 610,060 | ||||||
Pfizer, Inc. | 1,075,399 | 26,745,173 | ||||||
Thermo Fisher Scientific, Inc. | 34,345 | 2,097,106 | ||||||
Warner Chilcott plc, Class A | 25,600 | 296,448 | ||||||
Waters Corp. * | 7,300 | 597,213 | ||||||
Watson Pharmaceuticals, Inc. * | 7,565 | 650,212 | ||||||
116,839,430 | ||||||||
Real Estate 1.0% | ||||||||
American Tower Corp. | 16,365 | 1,232,121 | ||||||
Annaly Capital Management, Inc. | 79,885 | 1,289,344 | ||||||
Apartment Investment & Management Co., Class A | 28,054 | 748,761 | ||||||
AvalonBay Communities, Inc. | 3,899 | 528,548 | ||||||
Boston Properties, Inc. | 9,190 | 976,897 | ||||||
Duke Realty Corp. | 38,075 | 551,326 | ||||||
Equity Residential | 19,445 | 1,116,337 | ||||||
HCP, Inc. | 15,665 | 693,960 | ||||||
Hospitality Properties Trust | 23,355 | 539,968 | ||||||
Host Hotels & Resorts, Inc. | 72,078 | 1,042,248 | ||||||
Kimco Realty Corp. | 28,960 | 565,299 | ||||||
Plum Creek Timber Co., Inc. | 22,795 | 1,000,701 | ||||||
Public Storage | 6,030 | 835,939 | ||||||
Rayonier, Inc. | 11,702 | 573,515 | ||||||
Simon Property Group, Inc. | 11,376 | 1,731,541 | ||||||
Ventas, Inc. | 7,878 | 498,441 | ||||||
Vornado Realty Trust REIT | 14,128 | 1,133,207 | ||||||
Weyerhaeuser Co. | 149,157 | 4,130,157 | ||||||
19,188,310 | ||||||||
Retailing 4.7% | ||||||||
Aaron’s, Inc. | 17,700 | 545,691 | ||||||
Abercrombie & Fitch Co., Class A | 20,210 | 618,022 | ||||||
Advance Auto Parts, Inc. | 10,145 | 719,686 | ||||||
Amazon.com, Inc. * | 6,650 | 1,548,253 | ||||||
American Eagle Outfitters, Inc. | 52,635 | 1,098,492 | ||||||
AutoZone, Inc. * | 1,323 | 496,125 | ||||||
Bed Bath & Beyond, Inc. * | 28,565 | 1,647,629 | ||||||
Best Buy Co., Inc. | 196,800 | 2,993,328 | ||||||
Big Lots, Inc. * | 24,465 | 712,665 | ||||||
CarMax, Inc. * | 32,680 | 1,102,950 | ||||||
Core-Mark Holding Co., Inc. | 13,600 | 651,032 | ||||||
Dillard’s, Inc., Class A | 9,475 | 729,575 | ||||||
Dollar General Corp. * | 12,200 | 593,164 | ||||||
Dollar Tree, Inc. * | 22,634 | 902,418 | ||||||
Expedia, Inc. | 15,365 | 908,840 | ||||||
Family Dollar Stores, Inc. | 14,975 | 987,751 | ||||||
Foot Locker, Inc. | 32,595 | 1,091,933 | ||||||
GameStop Corp., Class A (b) | 49,190 | 1,123,008 | ||||||
Genuine Parts Co. | 31,700 | 1,983,786 | ||||||
J.C. Penney Co., Inc. | 73,100 | 1,755,131 | ||||||
Kohl’s Corp. | 71,895 | 3,830,566 | ||||||
Liberty Interactive Corp., Class A * | 111,120 | 2,222,400 | ||||||
Limited Brands, Inc. | 28,120 | 1,346,667 | ||||||
Lowe’s Cos., Inc. | 346,355 | 11,214,975 | ||||||
Macy’s, Inc. | 82,120 | 3,126,308 | ||||||
Nordstrom, Inc. | 25,855 | 1,467,788 | ||||||
O’Reilly Automotive, Inc. * | 6,930 | 593,762 | ||||||
Office Depot, Inc. * | 279,950 | 694,276 | ||||||
PetSmart, Inc. | 15,940 | 1,058,257 | ||||||
RadioShack Corp. (b) | 128,680 | 288,243 | ||||||
Rent-A-Center, Inc. | 19,570 | 652,268 | ||||||
Ross Stores, Inc. | 15,590 | 950,211 | ||||||
Sears Canada, Inc. (e)* | 14,742 | 170,860 | ||||||
Sears Holdings Corp. (b)* | 34,421 | 2,157,164 | ||||||
Signet Jewelers Ltd. | 14,800 | 766,048 | ||||||
Staples, Inc. | 245,950 | 2,832,114 | ||||||
Target Corp. | 166,595 | 10,620,431 | ||||||
The Gap, Inc. | 113,975 | 4,071,187 | ||||||
The Home Depot, Inc. | 255,696 | 15,694,620 | ||||||
The TJX Cos., Inc. | 86,160 | 3,586,841 | ||||||
Tiffany & Co. | 14,035 | 887,293 | ||||||
Tractor Supply Co. | 5,500 | 529,320 | ||||||
Williams-Sonoma, Inc. | 17,845 | 824,974 | ||||||
91,796,052 |
See financial notes 5
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Semiconductors & Semiconductor Equipment 2.0% | ||||||||
Altera Corp. | 19,950 | 608,076 | ||||||
Analog Devices, Inc. | 42,565 | 1,664,717 | ||||||
Applied Materials, Inc. | 337,325 | 3,575,645 | ||||||
Broadcom Corp., Class A * | 35,645 | 1,124,065 | ||||||
Intel Corp. | 778,410 | 16,833,116 | ||||||
KLA-Tencor Corp. | 21,180 | 985,294 | ||||||
Lam Research Corp. * | 32,900 | 1,164,660 | ||||||
Linear Technology Corp. | 21,555 | 673,809 | ||||||
LSI Corp. * | 80,940 | 554,439 | ||||||
Marvell Technology Group Ltd. | 42,630 | 336,351 | ||||||
Maxim Integrated Products, Inc. | 37,700 | 1,037,693 | ||||||
MEMC Electronic Materials, Inc. * | 181,300 | 456,876 | ||||||
Microchip Technology, Inc. | 21,380 | 670,263 | ||||||
Micron Technology, Inc. * | 186,175 | 1,009,999 | ||||||
NVIDIA Corp. | 60,137 | 719,840 | ||||||
Texas Instruments, Inc. | 260,670 | 7,322,220 | ||||||
Xilinx, Inc. | 36,120 | 1,183,291 | ||||||
39,920,354 | ||||||||
Software & Services 5.6% | ||||||||
Accenture plc, Class A | 46,695 | 3,147,710 | ||||||
Adobe Systems, Inc. * | 35,640 | 1,211,760 | ||||||
Alliance Data Systems Corp. * | 5,480 | 783,914 | ||||||
Amdocs Ltd. | 22,000 | 727,540 | ||||||
AOL, Inc. * | 71,580 | 2,457,341 | ||||||
Autodesk, Inc. * | 18,000 | 573,120 | ||||||
Automatic Data Processing, Inc. | 55,080 | 3,183,073 | ||||||
BMC Software, Inc. * | 18,840 | 766,788 | ||||||
CA, Inc. | 37,905 | 853,621 | ||||||
Cognizant Technology Solutions Corp., Class A * | 10,100 | 673,165 | ||||||
Computer Sciences Corp. | 81,245 | 2,473,910 | ||||||
Compuware Corp. * | 63,500 | 549,910 | ||||||
Convergys Corp. | 32,665 | 549,099 | ||||||
CoreLogic, Inc. * | 37,500 | 892,500 | ||||||
DST Systems, Inc. | 11,400 | 650,256 | ||||||
eBay, Inc. * | 74,375 | 3,591,569 | ||||||
Fidelity National Information Services, Inc. | 36,023 | 1,184,076 | ||||||
Fiserv, Inc. * | 18,650 | 1,397,631 | ||||||
Google, Inc., Class A * | 7,672 | 5,215,195 | ||||||
IAC/InterActiveCorp | 31,362 | 1,516,353 | ||||||
International Business Machines Corp. | 127,195 | 24,743,243 | ||||||
Intuit, Inc. | 19,955 | 1,185,726 | ||||||
MasterCard, Inc., Class A | 2,768 | 1,275,854 | ||||||
Microsoft Corp. | 1,079,315 | 30,798,254 | ||||||
Oracle Corp. | 237,260 | 7,366,923 | ||||||
Paychex, Inc. | 34,460 | 1,117,538 | ||||||
SAIC, Inc. | 86,400 | 949,536 | ||||||
Symantec Corp. * | 169,345 | 3,080,386 | ||||||
Teradata Corp. * | 7,100 | 485,001 | ||||||
The Western Union Co. | 66,310 | 842,137 | ||||||
Total System Services, Inc. | 28,570 | 642,539 | ||||||
VeriSign, Inc. * | 15,400 | 570,878 | ||||||
Visa, Inc., Class A | 11,700 | 1,623,492 | ||||||
Yahoo!, Inc. * | 110,405 | 1,855,908 | ||||||
108,935,946 | ||||||||
Technology Hardware & Equipment 3.6% | ||||||||
Amphenol Corp., Class A | 11,800 | 709,534 | ||||||
Anixter International, Inc. | 8,520 | 499,442 | ||||||
Apple, Inc. | 13,874 | 8,256,418 | ||||||
Arrow Electronics, Inc. * | 37,995 | 1,338,564 | ||||||
Avnet, Inc. * | 51,780 | 1,483,497 | ||||||
Cisco Systems, Inc. | 778,365 | 13,341,176 | ||||||
Corning, Inc. | 144,660 | 1,699,755 | ||||||
Dell, Inc. | 447,610 | 4,131,440 | ||||||
EMC Corp. * | 138,410 | 3,379,972 | ||||||
Harris Corp. | 23,325 | 1,067,819 | ||||||
Hewlett-Packard Co. | 965,575 | 13,373,214 | ||||||
Ingram Micro, Inc., Class A * | 144,155 | 2,191,156 | ||||||
Jabil Circuit, Inc. | 36,795 | 638,025 | ||||||
Juniper Networks, Inc. * | 67,970 | 1,126,263 | ||||||
Lexmark International, Inc., Class A (b) | 18,445 | 392,141 | ||||||
Molex, Inc. | 24,930 | 647,432 | ||||||
Motorola Solutions, Inc. | 90,945 | 4,700,038 | ||||||
NetApp, Inc. * | 20,730 | 557,637 | ||||||
QUALCOMM, Inc. | 76,185 | 4,462,536 | ||||||
SanDisk Corp. * | 15,365 | 641,642 | ||||||
Tech Data Corp. * | 34,640 | 1,534,898 | ||||||
Tellabs, Inc. | 141,960 | 414,523 | ||||||
Vishay Intertechnology, Inc. * | 42,740 | 353,887 | ||||||
Western Digital Corp. | 33,000 | 1,129,590 | ||||||
Xerox Corp. | 268,826 | 1,731,240 | ||||||
69,801,839 | ||||||||
Telecommunication Services 4.5% | ||||||||
AT&T, Inc. | 1,168,185 | 40,407,519 | ||||||
CenturyLink, Inc. | 46,155 | 1,771,429 | ||||||
Crown Castle International Corp. * | 14,280 | 953,190 | ||||||
Frontier Communications Corp. (b) | 258,898 | 1,221,999 | ||||||
NII Holdings, Inc. (b)* | 64,670 | 515,420 | ||||||
Sprint Nextel Corp. * | 2,211,100 | 12,249,494 | ||||||
Telephone & Data Systems, Inc. | 43,427 | 1,080,029 | ||||||
Verizon Communications, Inc. | 630,930 | 28,164,715 | ||||||
Windstream Corp. (b) | 122,200 | 1,165,788 | ||||||
87,529,583 | ||||||||
Transportation 1.7% | ||||||||
Avis Budget Group, Inc. * | 80,790 | 1,335,459 | ||||||
C.H. Robinson Worldwide, Inc. | 22,980 | 1,386,383 | ||||||
CSX Corp. | 167,910 | 3,437,118 | ||||||
Delta Air Lines, Inc. * | 106,300 | 1,023,669 | ||||||
Expeditors International of Washington, Inc. | 25,425 | 930,809 | ||||||
FedEx Corp. | 70,262 | 6,463,401 | ||||||
Hertz Global Holdings, Inc. * | 69,100 | 916,957 | ||||||
J.B. Hunt Transport Services, Inc. | 11,445 | 671,822 | ||||||
Norfolk Southern Corp. | 41,550 | 2,549,092 | ||||||
Ryder System, Inc. | 22,920 | 1,034,150 | ||||||
Southwest Airlines Co. | 179,775 | 1,585,616 | ||||||
Union Pacific Corp. | 42,856 | 5,272,574 | ||||||
United Continental Holdings, Inc. * | 33,243 | 638,598 |
6 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
United Parcel Service, Inc., Class B | 74,160 | 5,432,220 | ||||||
32,677,868 | ||||||||
Utilities 4.6% | ||||||||
AGL Resources, Inc. | 14,614 | 596,690 | ||||||
Alliant Energy Corp. | 19,275 | 861,593 | ||||||
Ameren Corp. | 63,590 | 2,090,839 | ||||||
American Electric Power Co., Inc. | 84,945 | 3,774,956 | ||||||
American Water Works Co., Inc. | 18,200 | 668,668 | ||||||
Atmos Energy Corp. | 25,760 | 926,587 | ||||||
Calpine Corp. * | 50,450 | 887,920 | ||||||
CenterPoint Energy, Inc. | 69,570 | 1,507,582 | ||||||
CMS Energy Corp. | 38,210 | 929,267 | ||||||
Consolidated Edison, Inc. | 45,925 | 2,772,951 | ||||||
Dominion Resources, Inc. | 105,210 | 5,552,984 | ||||||
DTE Energy Co. | 35,965 | 2,233,426 | ||||||
Duke Energy Corp. | 105,048 | 6,900,603 | ||||||
Edison International | 63,590 | 2,984,915 | ||||||
Entergy Corp. | 52,817 | 3,833,458 | ||||||
Exelon Corp. | 168,937 | 6,044,566 | ||||||
FirstEnergy Corp. | 86,734 | 3,965,478 | ||||||
GenOn Energy, Inc. * | 373,902 | 960,928 | ||||||
Great Plains Energy, Inc. | 26,570 | 596,231 | ||||||
Integrys Energy Group, Inc. | 16,835 | 909,763 | ||||||
MDU Resources Group, Inc. | 38,780 | 842,689 | ||||||
National Fuel Gas Co. | 11,745 | 618,962 | ||||||
NextEra Energy, Inc. | 57,480 | 4,027,049 | ||||||
NiSource, Inc. | 57,035 | 1,452,681 | ||||||
Northeast Utilities | 36,915 | 1,450,759 | ||||||
NRG Energy, Inc. | 78,360 | 1,689,442 | ||||||
NV Energy, Inc. | 37,800 | 718,578 | ||||||
OGE Energy Corp. | 12,765 | 735,009 | ||||||
ONEOK, Inc. | 27,420 | 1,296,966 | ||||||
Pepco Holdings, Inc. | 66,065 | 1,312,712 | ||||||
PG&E Corp. | 77,115 | 3,278,930 | ||||||
Pinnacle West Capital Corp. | 19,185 | 1,016,229 | ||||||
PPL Corp. | 72,555 | 2,146,177 | ||||||
Public Service Enterprise Group, Inc. | 102,980 | 3,299,479 | ||||||
Questar Corp. | 40,050 | 810,612 | ||||||
SCANA Corp. | 19,885 | 975,956 | ||||||
Sempra Energy | 39,515 | 2,756,171 | ||||||
TECO Energy, Inc. | 39,525 | 706,312 | ||||||
The AES Corp. | 161,040 | 1,682,868 | ||||||
The Southern Co. | 107,770 | 5,047,947 | ||||||
UGI Corp. | 25,920 | 836,957 | ||||||
Westar Energy, Inc. | 18,070 | 536,679 | ||||||
Wisconsin Energy Corp. | 23,740 | 913,278 | ||||||
Xcel Energy, Inc. | 80,090 | 2,262,542 | ||||||
89,414,389 | ||||||||
Total Common Stock | ||||||||
(Cost $1,667,032,894) | 1,940,572,294 | |||||||
Other Investment Company 0.7% of net assets | ||||||||
Money Market Fund 0.7% | ||||||||
State Street Institutional U.S. Government Money Market Fund | 14,493,390 | 14,493,390 | ||||||
Total Other Investment Company | ||||||||
(Cost $14,493,390) | 14,493,390 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.11%, 12/20/12 (c)(d) | 1,309,000 | 1,308,813 | ||||||
0.08%, 12/20/12 (c)(d) | 50,000 | 49,995 | ||||||
0.09%, 12/20/12 (c)(d) | 480,000 | 479,942 | ||||||
Total Short-Term Investments | ||||||||
(Cost $1,838,750) | 1,838,750 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.9% of net assets | ||||||||
State Street Institutional U.S. Government Money Market Fund | 17,726,150 | 17,726,150 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $17,726,150) | 17,726,150 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12 the tax basis cost of the fund’s investments was $1,706,889,516 and the unrealized appreciation and depreciation were $299,509,514 and ($49,494,596), respectively, with a net unrealized appreciation of $250,014,918.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is on loan. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
REIT — | Real Estate Investment Trust |
See financial notes 7
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/21/12 | 200 | 14,068,000 | (381,675 | ) |
8 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .3% | Common Stock | 570,965,988 | 615,071,735 | ||||||||
0 | .0% | Warrants | — | 46 | ||||||||
0 | .6% | Other Investment Company | 3,574,136 | 3,574,136 | ||||||||
0 | .1% | Short-Term Investments | 461,944 | 461,944 | ||||||||
100 | .0% | Total Investments | 575,002,068 | 619,107,861 | ||||||||
3 | .6% | Collateral Invested for Securities on Loan | 22,200,866 | 22,200,866 | ||||||||
(3 | .6)% | Other Assets and Liabilities, Net | (22,364,293 | ) | ||||||||
100 | .0% | Net Assets | 618,944,434 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.3% of net assets | ||||||||
Automobiles & Components 1.3% | ||||||||
Cooper Tire & Rubber Co. | 49,300 | 992,409 | ||||||
Dana Holding Corp. | 93,100 | 1,225,196 | ||||||
Drew Industries, Inc. * | 12,695 | 402,050 | ||||||
Exide Technologies * | 218,600 | 666,730 | ||||||
Federal-Mogul Corp. * | 12,600 | 95,004 | ||||||
Gentex Corp. | 43,900 | 755,958 | ||||||
Modine Manufacturing Co. * | 65,455 | 445,094 | ||||||
Superior Industries International, Inc. | 21,760 | 371,878 | ||||||
Tenneco, Inc. * | 19,200 | 586,560 | ||||||
Thor Industries, Inc. | 44,500 | 1,692,335 | ||||||
Visteon Corp. * | 11,600 | 511,560 | ||||||
Winnebago Industries, Inc. * | 43,765 | 551,439 | ||||||
8,296,213 | ||||||||
Banks 4.5% | ||||||||
Associated Banc-Corp. | 104,300 | 1,344,427 | ||||||
Astoria Financial Corp. | 98,900 | 991,967 | ||||||
BancorpSouth, Inc. | 54,900 | 776,835 | ||||||
Bank of Hawaii Corp. | 20,000 | 883,200 | ||||||
BOK Financial Corp. | 6,600 | 387,090 | ||||||
CapitalSource, Inc. | 238,500 | 1,886,535 | ||||||
Capitol Federal Financial, Inc. | 31,186 | 371,425 | ||||||
Cathay General Bancorp | 24,700 | 436,943 | ||||||
Chemical Financial Corp. | 5,930 | 139,474 | ||||||
Citizens Republic Bancorp, Inc. * | 10,550 | 191,377 | ||||||
City Holding Co. | 8,690 | 305,193 | ||||||
City National Corp. | 16,200 | 827,820 | ||||||
Commerce Bancshares, Inc. | 21,700 | 826,336 | ||||||
Cullen/Frost Bankers, Inc. | 14,500 | 801,850 | ||||||
CVB Financial Corp. | 24,880 | 269,202 | ||||||
East West Bancorp, Inc. | 25,100 | 534,379 | ||||||
F.N.B. Corp. | 42,000 | 450,660 | ||||||
First Commonwealth Financial Corp. | 51,290 | 335,949 | ||||||
First Horizon National Corp. | 159,700 | 1,486,807 | ||||||
First Midwest Bancorp, Inc. | 36,595 | 452,680 | ||||||
First Niagara Financial Group, Inc. | 71,100 | 588,708 | ||||||
First Republic Bank | 6,800 | 233,580 | ||||||
FirstMerit Corp. | 47,300 | 655,578 | ||||||
Fulton Financial Corp. | 78,900 | 766,908 | ||||||
Glacier Bancorp, Inc. | 23,880 | 346,260 | ||||||
Hancock Holding Co. | 9,400 | 296,946 | ||||||
International Bancshares Corp. | 23,900 | 433,785 | ||||||
MB Financial, Inc. | 18,045 | 365,592 | ||||||
MGIC Investment Corp. * | 120,500 | 207,260 | ||||||
National Penn Bancshares, Inc. | 30,223 | 269,891 | ||||||
NBT Bancorp, Inc. | 13,955 | 296,823 | ||||||
Northwest Bancshares, Inc. | 22,592 | 268,845 | ||||||
Old National Bancorp | 32,325 | 396,628 | ||||||
Park National Corp. | 5,710 | 380,000 | ||||||
People’s United Financial, Inc. | 92,800 | 1,116,384 | ||||||
Prosperity Bancshares, Inc. | 8,300 | 347,438 | ||||||
Provident Financial Services, Inc. | 33,390 | 500,850 | ||||||
Susquehanna Bancshares, Inc. | 54,600 | 566,202 | ||||||
SVB Financial Group * | 6,300 | 356,517 | ||||||
TCF Financial Corp. | 101,400 | 1,160,016 | ||||||
Trustmark Corp. | 24,200 | 567,974 | ||||||
UMB Financial Corp. | 8,701 | 387,456 | ||||||
Umpqua Holdings Corp. | 30,800 | 372,372 | ||||||
United Bankshares, Inc. | 16,795 | 400,225 | ||||||
Valley National Bancorp | 74,600 | 726,604 | ||||||
Washington Federal, Inc. | 41,500 | 696,370 | ||||||
Webster Financial Corp. | 26,300 | 578,600 | ||||||
Westamerica Bancorp | 10,870 | 479,584 | ||||||
Wintrust Financial Corp. | 7,840 | 289,688 | ||||||
27,753,233 | ||||||||
Capital Goods 12.1% | ||||||||
A.O. Smith Corp. | 14,600 | 887,242 | ||||||
AAR Corp. | 38,780 | 585,190 | ||||||
Actuant Corp., Class A | 24,600 | 694,704 | ||||||
Acuity Brands, Inc. | 20,400 | 1,319,880 | ||||||
Aegion Corp. * | 18,815 | 347,513 | ||||||
Aircastle Ltd. | 41,500 | 461,895 | ||||||
Albany International Corp., Class A | 21,400 | 470,158 | ||||||
AMETEK, Inc. | 41,700 | 1,482,435 | ||||||
Apogee Enterprises, Inc. | 32,095 | 653,775 | ||||||
Applied Industrial Technologies, Inc. | 28,620 | 1,161,686 | ||||||
Armstrong World Industries, Inc. | 15,100 | 782,180 | ||||||
Astec Industries, Inc. * | 12,950 | 372,960 | ||||||
B/E Aerospace, Inc. * | 20,100 | 906,309 | ||||||
Barnes Group, Inc. | 28,465 | 651,279 | ||||||
Beacon Roofing Supply, Inc. * | 23,080 | 746,407 | ||||||
Belden, Inc. | 19,040 | 681,632 | ||||||
Brady Corp., Class A | 26,500 | 815,140 | ||||||
Briggs & Stratton Corp. | 60,400 | 1,192,900 | ||||||
Carlisle Cos., Inc. | 30,900 | 1,716,495 | ||||||
Cascade Corp. | 6,355 | 413,011 | ||||||
Ceradyne, Inc. | 19,430 | 679,273 | ||||||
Chart Industries, Inc. * | 4,910 | 347,579 |
See financial notes 9
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Chicago Bridge & Iron Co., N.V., NY Shares | 27,700 | 1,040,135 | ||||||
CIRCOR International, Inc. | 10,590 | 365,249 | ||||||
CLARCOR, Inc. | 17,225 | 779,259 | ||||||
CNH Global N.V. * | 16,500 | 739,200 | ||||||
Comfort Systems USA, Inc. | 45,700 | 498,130 | ||||||
Crane Co. | 20,800 | 873,184 | ||||||
Cubic Corp. | 5,690 | 277,672 | ||||||
Curtiss-Wright Corp. | 25,900 | 799,533 | ||||||
Donaldson Co., Inc. | 37,600 | 1,213,352 | ||||||
Dycom Industries, Inc. * | 37,370 | 532,149 | ||||||
Encore Wire Corp. | 17,240 | 532,026 | ||||||
EnerSys, Inc. * | 23,700 | 817,176 | ||||||
EnPro Industries, Inc. * | 7,970 | 291,383 | ||||||
ESCO Technologies, Inc. | 9,300 | 348,192 | ||||||
Esterline Technologies Corp. * | 11,100 | 641,469 | ||||||
Federal Signal Corp. * | 72,800 | 420,056 | ||||||
Fortune Brands Home & Security, Inc. * | 9,600 | 273,024 | ||||||
Franklin Electric Co., Inc. | 7,480 | 433,391 | ||||||
FreightCar America, Inc. | 19,235 | 370,274 | ||||||
Gardner Denver, Inc. | 16,600 | 1,150,878 | ||||||
GATX Corp. | 32,700 | 1,355,742 | ||||||
General Cable Corp. * | 48,200 | 1,375,146 | ||||||
Gibraltar Industries, Inc. * | 38,555 | 480,395 | ||||||
Graco, Inc. | 20,740 | 996,764 | ||||||
GrafTech International Ltd. * | 53,000 | 557,030 | ||||||
Granite Construction, Inc. | 47,100 | 1,422,891 | ||||||
Griffon Corp. | 44,408 | 450,741 | ||||||
H&E Equipment Services, Inc. | 24,220 | 368,628 | ||||||
HEICO Corp. | 7,910 | 305,563 | ||||||
Hexcel Corp. * | 23,685 | 605,389 | ||||||
Hyster-Yale Materials Handling, Inc., Class B (c)(d)* | 10,740 | 441,199 | ||||||
IDEX Corp. | 25,600 | 1,088,768 | ||||||
Kaman Corp. | 13,280 | 494,016 | ||||||
Kaydon Corp. | 17,335 | 387,611 | ||||||
Kennametal, Inc. | 35,200 | 1,246,784 | ||||||
Layne Christensen Co. * | 21,900 | 488,151 | ||||||
Lincoln Electric Holdings, Inc. | 32,200 | 1,396,514 | ||||||
MasTec, Inc. * | 18,610 | 419,842 | ||||||
Meritor, Inc. * | 83,900 | 370,838 | ||||||
Middleby Corp. * | 2,908 | 363,355 | ||||||
Moog, Inc., Class A * | 18,400 | 680,984 | ||||||
MRC Global, Inc. * | 7,800 | 190,710 | ||||||
MSC Industrial Direct Co., Inc., Class A | 12,300 | 917,580 | ||||||
Mueller Industries, Inc. | 23,000 | 1,007,400 | ||||||
Mueller Water Products, Inc., Class A | 216,400 | 1,127,444 | ||||||
National Presto Industries, Inc. (b) | 3,845 | 285,876 | ||||||
Navistar International Corp. (b)* | 42,300 | 793,125 | ||||||
Nordson Corp. | 12,350 | 729,020 | ||||||
Orbital Sciences Corp. * | 42,155 | 564,877 | ||||||
Polypore International, Inc. * | 7,300 | 257,544 | ||||||
Quanex Building Products Corp. | 32,150 | 635,605 | ||||||
Raven Industries, Inc. | 8,430 | 230,055 | ||||||
Regal-Beloit Corp. | 16,300 | 1,062,434 | ||||||
Robbins & Myers, Inc. | 7,017 | 415,968 | ||||||
Rush Enterprises, Inc., Class A * | 28,560 | 542,640 | ||||||
Seaboard Corp. * | 200 | 456,266 | ||||||
Simpson Manufacturing Co., Inc. | 18,185 | 553,915 | ||||||
Snap-on, Inc. | 24,300 | 1,879,119 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 51,000 | 797,130 | ||||||
Standex International Corp. | 6,950 | 321,368 | ||||||
TAL International Group, Inc. | 5,790 | 197,671 | ||||||
Teledyne Technologies, Inc. * | 12,000 | 768,360 | ||||||
Tennant Co. | 7,480 | 279,902 | ||||||
The Babcock & Wilcox Co. * | 14,800 | 381,396 | ||||||
The Greenbrier Cos., Inc. * | 8,220 | 143,110 | ||||||
The Manitowoc Co., Inc. | 84,600 | 1,205,550 | ||||||
The Shaw Group, Inc. * | 45,800 | 2,005,582 | ||||||
The Toro Co. | 37,520 | 1,584,094 | ||||||
Titan International, Inc. (b) | 12,275 | 257,530 | ||||||
TransDigm Group, Inc. | 8,200 | 1,092,322 | ||||||
Triumph Group, Inc. | 9,500 | 621,490 | ||||||
Tutor Perini Corp. * | 76,400 | 774,696 | ||||||
Universal Forest Products, Inc. | 33,470 | 1,288,595 | ||||||
USG Corp. (b)* | 60,200 | 1,607,942 | ||||||
Valmont Industries, Inc. | 6,950 | 938,945 | ||||||
WABCO Holdings, Inc. * | 20,300 | 1,188,971 | ||||||
Wabtec Corp. | 9,860 | 807,534 | ||||||
Watsco, Inc. | 13,145 | 898,461 | ||||||
Watts Water Technologies, Inc., Class A | 15,655 | 629,801 | ||||||
Woodward, Inc. | 17,100 | 572,850 | ||||||
75,074,604 | ||||||||
Commercial & Professional Supplies 4.1% | ||||||||
ABM Industries, Inc. | 52,700 | 1,001,300 | ||||||
Clean Harbors, Inc. * | 7,830 | 456,880 | ||||||
Consolidated Graphics, Inc. * | 12,720 | 375,367 | ||||||
Copart, Inc. * | 30,600 | 880,974 | ||||||
Corrections Corp. of America | 40,400 | 1,359,460 | ||||||
Covanta Holding Corp. | 51,200 | 930,816 | ||||||
Deluxe Corp. | 34,800 | 1,096,548 | ||||||
EnergySolutions, Inc. * | 122,100 | 349,206 | ||||||
FTI Consulting, Inc. * | 21,200 | 550,352 | ||||||
G&K Services, Inc., Class A | 18,290 | 589,852 | ||||||
Healthcare Services Group, Inc. | 21,955 | 524,724 | ||||||
Heidrick & Struggles International, Inc. | 19,470 | 230,525 | ||||||
Herman Miller, Inc. | 41,110 | 797,123 | ||||||
HNI Corp. | 48,900 | 1,345,728 | ||||||
Huron Consulting Group, Inc. * | 3,900 | 112,515 | ||||||
ICF International, Inc. * | 11,400 | 209,190 | ||||||
IHS, Inc., Class A * | 4,510 | 380,599 | ||||||
Insperity, Inc. | 17,760 | 463,714 | ||||||
Interface, Inc. | 25,685 | 367,552 | ||||||
Kelly Services, Inc., Class A | 85,900 | 1,141,611 | ||||||
Kforce, Inc. * | 28,300 | 315,545 | ||||||
Knoll, Inc. | 29,300 | 421,627 | ||||||
Korn/Ferry International * | 27,930 | 373,983 | ||||||
McGrath RentCorp | 12,325 | 323,655 | ||||||
Mine Safety Appliances Co. | 12,625 | 487,325 | ||||||
Navigant Consulting, Inc. * | 41,825 | 434,562 | ||||||
Nielsen Holdings N.V. * | 21,800 | 630,456 | ||||||
Quad Graphics, Inc. (b) | 21,400 | 392,262 | ||||||
Resources Connection, Inc. | 45,160 | 557,274 | ||||||
Rollins, Inc. | 12,222 | 277,073 | ||||||
Steelcase, Inc., Class A | 121,400 | 1,215,214 | ||||||
Stericycle, Inc. * | 10,900 | 1,032,884 |
10 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sykes Enterprises, Inc. * | 26,355 | 358,955 | ||||||
Tetra Tech, Inc. * | 22,095 | 573,144 | ||||||
The Corporate Executive Board Co. | 18,570 | 834,907 | ||||||
The Geo Group, Inc. | 22,080 | 612,058 | ||||||
Towers Watson & Co., Class A | 11,915 | 639,955 | ||||||
TrueBlue, Inc. * | 47,330 | 617,656 | ||||||
UniFirst Corp. | 7,005 | 487,338 | ||||||
Verisk Analytics, Inc., Class A * | 12,600 | 642,600 | ||||||
Viad Corp. | 24,465 | 518,903 | ||||||
Waste Connections, Inc. | 23,800 | 781,354 | ||||||
25,692,766 | ||||||||
Consumer Durables & Apparel 5.8% | ||||||||
American Greetings Corp., Class A (b) | 68,600 | 1,177,862 | ||||||
Arctic Cat, Inc. * | 3,800 | 137,826 | ||||||
Beazer Homes USA, Inc. * | 37,500 | 618,375 | ||||||
Blyth, Inc. (b) | 10,944 | 249,961 | ||||||
Brunswick Corp. | 50,200 | 1,184,218 | ||||||
Callaway Golf Co. | 97,155 | 530,466 | ||||||
Carter’s, Inc. * | 12,800 | 691,968 | ||||||
Columbia Sportswear Co. | 8,680 | 489,552 | ||||||
Crocs, Inc. * | 20,460 | 257,796 | ||||||
Deckers Outdoor Corp. (b)* | 8,750 | 250,512 | ||||||
Ethan Allen Interiors, Inc. | 25,065 | 737,162 | ||||||
Fifth & Pacific Cos., Inc. * | 102,800 | 1,128,744 | ||||||
Fossil, Inc. * | 10,800 | 940,680 | ||||||
G-III Apparel Group Ltd. * | 5,000 | 184,800 | ||||||
Hanesbrands, Inc. * | 38,400 | 1,285,248 | ||||||
Helen of Troy Ltd. * | 12,130 | 366,569 | ||||||
JAKKS Pacific, Inc. | 27,625 | 356,639 | ||||||
KB Home (b) | 122,600 | 1,959,148 | ||||||
La-Z-Boy, Inc. * | 43,620 | 707,516 | ||||||
Lennar Corp., Class A | 79,000 | 2,960,130 | ||||||
M.D.C. Holdings, Inc. | 34,400 | 1,315,456 | ||||||
Meritage Homes Corp. * | 21,800 | 806,164 | ||||||
NACCO Industries, Inc., Class A | 5,140 | 260,290 | ||||||
Oxford Industries, Inc. | 5,530 | 306,804 | ||||||
Polaris Industries, Inc. | 16,900 | 1,428,050 | ||||||
PulteGroup, Inc. * | 247,600 | 4,293,384 | ||||||
PVH Corp. | 13,300 | 1,462,867 | ||||||
Quiksilver, Inc. * | 158,800 | 508,160 | ||||||
Skechers U.S.A., Inc., Class A * | 38,545 | 639,847 | ||||||
Steven Madden Ltd. * | 9,148 | 392,632 | ||||||
Tempur-Pedic International, Inc. * | 20,815 | 550,349 | ||||||
The Ryland Group, Inc. | 63,400 | 2,147,358 | ||||||
The Warnaco Group, Inc. * | 20,400 | 1,439,832 | ||||||
Toll Brothers, Inc. * | 57,100 | 1,884,871 | ||||||
Tupperware Brands Corp. | 18,500 | 1,093,350 | ||||||
Under Armour, Inc., Class A * | 6,330 | 330,806 | ||||||
Wolverine World Wide, Inc. | 23,090 | 966,778 | ||||||
36,042,170 | ||||||||
Consumer Services 4.6% | ||||||||
Ameristar Casinos, Inc. | 33,975 | 620,044 | ||||||
Bally Technologies, Inc. * | 10,875 | 542,880 | ||||||
Bob Evans Farms, Inc. | 29,555 | 1,125,159 | ||||||
Boyd Gaming Corp. * | 101,700 | 627,489 | ||||||
Buffalo Wild Wings, Inc. * | 1,500 | 113,925 | ||||||
Caesars Entertainment Corp. (b)* | 59,200 | 342,768 | ||||||
Career Education Corp. * | 148,100 | 503,540 | ||||||
CEC Entertainment, Inc. | 23,380 | 724,780 | ||||||
Chipotle Mexican Grill, Inc. * | 2,223 | 565,820 | ||||||
Choice Hotels International, Inc. | 8,040 | 251,572 | ||||||
Coinstar, Inc. * | 7,325 | 343,835 | ||||||
Corinthian Colleges, Inc. * | 205,485 | 560,974 | ||||||
Cracker Barrel Old Country Store, Inc. | 24,920 | 1,586,158 | ||||||
DeVry, Inc. | 28,900 | 758,914 | ||||||
DineEquity, Inc. * | 6,430 | 403,161 | ||||||
Domino’s Pizza, Inc. | 36,000 | 1,462,320 | ||||||
Hillenbrand, Inc. | 28,600 | 585,442 | ||||||
Hyatt Hotels Corp., Class A * | 14,900 | 543,850 | ||||||
International Speedway Corp., Class A | 19,850 | 506,175 | ||||||
ITT Educational Services, Inc. (b)* | 23,135 | 497,171 | ||||||
Jack In The Box, Inc. * | 46,400 | 1,206,864 | ||||||
Las Vegas Sands Corp. | 19,100 | 887,004 | ||||||
LIFE TIME FITNESS, Inc. * | 10,685 | 479,650 | ||||||
Lincoln Educational Services Corp. | 30,760 | 114,120 | ||||||
Matthews International Corp., Class A | 17,415 | 501,029 | ||||||
Orient-Express Hotels Ltd., Class A * | 30,890 | 362,340 | ||||||
Panera Bread Co., Class A * | 4,575 | 771,528 | ||||||
Papa John’s International, Inc. * | 9,210 | 491,077 | ||||||
Penn National Gaming, Inc. * | 28,900 | 1,168,427 | ||||||
Pinnacle Entertainment, Inc. * | 35,275 | 450,109 | ||||||
Red Robin Gourmet Burgers, Inc. * | 11,480 | 383,432 | ||||||
Regis Corp. | 65,100 | 1,084,566 | ||||||
Ruby Tuesday, Inc. * | 109,650 | 791,673 | ||||||
Scientific Games Corp., Class A * | 33,770 | 277,927 | ||||||
Six Flags Entertainment Corp. | 4,300 | 245,573 | ||||||
Sonic Corp. * | 102,580 | 1,022,722 | ||||||
Sotheby’s | 16,020 | 498,703 | ||||||
Steiner Leisure Ltd. * | 8,560 | 375,955 | ||||||
Stewart Enterprises, Inc., Class A | 48,640 | 377,933 | ||||||
Strayer Education, Inc. (b) | 7,800 | 448,188 | ||||||
Texas Roadhouse, Inc. | 24,610 | 400,651 | ||||||
The Cheesecake Factory, Inc. | 33,835 | 1,118,585 | ||||||
The Wendy’s Co. | 161,400 | 689,178 | ||||||
Vail Resorts, Inc. | 12,960 | 735,869 | ||||||
Weight Watchers International, Inc. (b) | 14,192 | 713,148 | ||||||
WMS Industries, Inc. * | 25,812 | 424,091 | ||||||
28,686,319 | ||||||||
Diversified Financials 2.6% | ||||||||
Affiliated Managers Group, Inc. * | 7,700 | 974,050 | ||||||
American Capital Ltd. * | 20,800 | 245,232 | ||||||
Apollo Investment Corp. | 43,700 | 347,415 | ||||||
Ares Capital Corp. | 27,400 | 478,404 | ||||||
Cash America International, Inc. | 13,405 | 524,002 | ||||||
CBOE Holdings, Inc. | 12,800 | 377,472 | ||||||
E*TRADE Financial Corp. * | 101,300 | 846,868 | ||||||
Eaton Vance Corp. | 53,500 | 1,505,490 | ||||||
Ezcorp, Inc., Class A * | 12,400 | 243,784 | ||||||
First Cash Financial Services, Inc. * | 6,590 | 294,309 | ||||||
Greenhill & Co., Inc. | 14,335 | 684,066 | ||||||
IntercontinentalExchange, Inc. * | 4,800 | 628,800 | ||||||
Investment Technology Group, Inc. * | 45,955 | 387,860 |
See financial notes 11
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Jefferies Group, Inc. | 20,000 | 284,800 | ||||||
Knight Capital Group, Inc., Class A * | 149,700 | 393,711 | ||||||
Lazard Ltd., Class A | 18,600 | 547,956 | ||||||
Leucadia National Corp. | 23,100 | 524,370 | ||||||
LPL Financial Holdings, Inc. | 11,400 | 332,880 | ||||||
MSCI, Inc. * | 23,600 | 635,784 | ||||||
Nelnet, Inc., Class A | 15,340 | 374,449 | ||||||
Piper Jaffray Cos., Inc. * | 14,505 | 389,459 | ||||||
Raymond James Financial, Inc. | 23,800 | 907,732 | ||||||
SEI Investments Co. | 64,900 | 1,420,012 | ||||||
Stifel Financial Corp. * | 7,860 | 249,162 | ||||||
The NASDAQ OMX Group, Inc. | 39,600 | 942,876 | ||||||
Waddell & Reed Financial, Inc., Class A | 24,700 | 823,251 | ||||||
World Acceptance Corp. * | 6,560 | 437,946 | ||||||
15,802,140 | ||||||||
Energy 6.2% | ||||||||
Alpha Natural Resources, Inc. * | 105,600 | 904,992 | ||||||
Atwood Oceanics, Inc. * | 10,700 | 511,460 | ||||||
Basic Energy Services, Inc. * | 19,185 | 199,332 | ||||||
Berry Petroleum Co., Class A | 13,620 | 524,506 | ||||||
Bill Barrett Corp. * | 21,000 | 481,110 | ||||||
Bristow Group, Inc. | 13,300 | 663,936 | ||||||
Cabot Oil & Gas Corp. | 24,300 | 1,141,614 | ||||||
Cal Dive International, Inc. * | 208,443 | 262,638 | ||||||
CARBO Ceramics, Inc. (b) | 4,380 | 323,901 | ||||||
Cloud Peak Energy, Inc. * | 34,900 | 736,390 | ||||||
Comstock Resources, Inc. * | 25,855 | 442,638 | ||||||
Concho Resources, Inc. * | 4,300 | 370,316 | ||||||
Crosstex Energy, Inc. | 32,100 | 439,128 | ||||||
Delek US Holdings, Inc. | 7,600 | 195,700 | ||||||
Denbury Resources, Inc. * | 64,500 | 988,785 | ||||||
Dresser-Rand Group, Inc. * | 20,600 | 1,061,518 | ||||||
Dril-Quip, Inc. * | 6,685 | 463,003 | ||||||
Energy XXI (Bermuda) Ltd. | 12,200 | 403,820 | ||||||
EQT Corp. | 26,500 | 1,606,695 | ||||||
EXCO Resources, Inc. (b) | 71,800 | 581,580 | ||||||
Exterran Holdings, Inc. * | 114,300 | 2,283,714 | ||||||
Forest Oil Corp. * | 97,200 | 736,776 | ||||||
GulfMark Offshore, Inc., Class A * | 8,705 | 281,346 | ||||||
Helix Energy Solutions Group, Inc. * | 66,500 | 1,149,785 | ||||||
Hercules Offshore, Inc. * | 112,100 | 533,596 | ||||||
Hornbeck Offshore Services, Inc. * | 9,080 | 314,531 | ||||||
ION Geophysical Corp. * | 19,805 | 127,940 | ||||||
Key Energy Services, Inc. * | 84,500 | 552,630 | ||||||
Lufkin Industries, Inc. | 7,610 | 380,576 | ||||||
Matrix Service Co. * | 12,300 | 129,027 | ||||||
McMoRan Exploration Co. * | 12,760 | 152,227 | ||||||
Newpark Resources, Inc. * | 45,440 | 308,538 | ||||||
Nordic American Tankers Ltd. | 34,185 | 287,154 | ||||||
Oceaneering International, Inc. | 23,600 | 1,234,988 | ||||||
Oil States International, Inc. * | 18,500 | 1,352,350 | ||||||
Overseas Shipholding Group, Inc. (b) | 140,600 | 157,472 | ||||||
Parker Drilling Co. * | 95,510 | 413,558 | ||||||
PDC Energy, Inc. * | 8,655 | 261,987 | ||||||
Penn Virginia Corp. | 103,400 | 467,368 | ||||||
Pioneer Energy Services Corp. * | 37,900 | 250,140 | ||||||
Plains Exploration & Production Co. * | 36,400 | 1,298,024 | ||||||
Quicksilver Resources, Inc. (b)* | 76,900 | 297,603 | ||||||
Range Resources Corp. | 16,100 | 1,052,296 | ||||||
Rosetta Resources, Inc. * | 8,210 | 377,988 | ||||||
SandRidge Energy, Inc. * | 89,400 | 556,068 | ||||||
SemGroup Corp., Class A * | 21,400 | 826,896 | ||||||
Ship Finance International Ltd. (b) | 34,600 | 532,148 | ||||||
SM Energy Co. | 15,100 | 814,192 | ||||||
Stone Energy Corp. * | 24,500 | 577,955 | ||||||
Superior Energy Services, Inc. * | 64,900 | 1,319,417 | ||||||
Swift Energy Co. * | 23,605 | 394,440 | ||||||
Targa Resources Corp. | 8,400 | 427,812 | ||||||
Teekay Corp. | 35,300 | 1,080,533 | ||||||
TETRA Technologies, Inc. * | 72,460 | 387,661 | ||||||
Ultra Petroleum Corp. (b)* | 31,800 | 725,358 | ||||||
Unit Corp. * | 25,800 | 1,041,030 | ||||||
W&T Offshore, Inc. | 21,500 | 364,425 | ||||||
Western Refining, Inc. | 50,500 | 1,255,935 | ||||||
Whiting Petroleum Corp. * | 20,700 | 869,814 | ||||||
Willbros Group, Inc. * | 87,700 | 448,147 | ||||||
38,326,507 | ||||||||
Food & Staples Retailing 1.2% | ||||||||
Harris Teeter Supermarkets, Inc. | 36,200 | 1,355,690 | ||||||
Nash Finch Co. | 51,600 | 992,268 | ||||||
PriceSmart, Inc. | 4,040 | 335,280 | ||||||
Rite Aid Corp. * | 414,400 | 480,704 | ||||||
Roundy’s, Inc. (b) | 15,700 | 82,268 | ||||||
Spartan Stores, Inc. | 40,400 | 580,144 | ||||||
Susser Holdings Corp. * | 4,500 | 161,730 | ||||||
The Andersons, Inc. | 13,925 | 546,974 | ||||||
The Pantry, Inc. * | 91,400 | 1,212,421 | ||||||
United Natural Foods, Inc. * | 22,200 | 1,181,928 | ||||||
Weis Markets, Inc. | 13,800 | 568,008 | ||||||
7,497,415 | ||||||||
Food, Beverage & Tobacco 1.8% | ||||||||
B&G Foods, Inc. | 12,200 | 369,294 | ||||||
Cal-Maine Foods, Inc. | 8,900 | 383,857 | ||||||
Central European Distribution Corp. (b)* | 105,400 | 271,932 | ||||||
Chiquita Brands International, Inc. * | 131,400 | 947,394 | ||||||
Darling International, Inc. * | 20,420 | 337,542 | ||||||
Dole Food Co., Inc. (b)* | 54,100 | 681,119 | ||||||
Flowers Foods, Inc. | 53,800 | 1,059,322 | ||||||
Fresh Del Monte Produce, Inc. | 43,700 | 1,099,929 | ||||||
Green Mountain Coffee Roasters, Inc. (b)* | 5,880 | 142,061 | ||||||
J&J Snack Foods Corp. | 5,935 | 339,897 | ||||||
Lancaster Colony Corp. | 10,965 | 798,033 | ||||||
Monster Beverage Corp. * | 11,510 | 514,152 | ||||||
Pilgrim’s Pride Corp. * | 21,800 | 122,734 | ||||||
Post Holdings, Inc. * | 9,700 | 306,035 | ||||||
Sanderson Farms, Inc. | 16,300 | 738,227 | ||||||
Snyders-Lance, Inc. | 13,760 | 348,678 | ||||||
The Hain Celestial Group, Inc. * | 8,070 | 466,446 | ||||||
TreeHouse Foods, Inc. * | 9,985 | 534,697 | ||||||
Universal Corp. | 24,900 | 1,234,044 | ||||||
Vector Group Ltd. (b) | 22,826 | 375,716 | ||||||
11,071,109 |
12 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Health Care Equipment & Services 5.0% | ||||||||
Alere, Inc. * | 31,700 | 608,640 | ||||||
Amedisys, Inc. * | 47,770 | 527,381 | ||||||
AmSurg Corp. * | 17,525 | 499,813 | ||||||
Analogic Corp. | 4,765 | 350,990 | ||||||
Brookdale Senior Living, Inc. * | 42,000 | 985,320 | ||||||
Catamaran Corp. * | 18,800 | 886,608 | ||||||
Centene Corp. * | 22,500 | 854,550 | ||||||
Cerner Corp. * | 15,200 | 1,158,088 | ||||||
Chemed Corp. | 13,595 | 914,264 | ||||||
CONMED Corp. | 14,095 | 389,868 | ||||||
Edwards Lifesciences Corp. * | 14,100 | 1,224,303 | ||||||
Gentiva Health Services, Inc. * | 63,925 | 600,895 | ||||||
Haemonetics Corp. * | 7,800 | 637,260 | ||||||
Hanger, Inc. * | 13,200 | 334,620 | ||||||
Health Management Associates, Inc., Class A * | 184,300 | 1,345,390 | ||||||
HealthSouth Corp. * | 21,700 | 480,221 | ||||||
Healthways, Inc. * | 48,160 | 468,597 | ||||||
Hill-Rom Holdings, Inc. | 40,500 | 1,137,645 | ||||||
Hologic, Inc. * | 45,300 | 934,086 | ||||||
IDEXX Laboratories, Inc. * | 11,700 | 1,125,540 | ||||||
Integra LifeSciences Holdings Corp. * | 8,120 | 310,590 | ||||||
Intuitive Surgical, Inc. * | 1,638 | 888,156 | ||||||
Invacare Corp. | 41,465 | 565,997 | ||||||
Magellan Health Services, Inc. * | 29,000 | 1,454,350 | ||||||
Masimo Corp. * | 7,500 | 164,775 | ||||||
MEDNAX, Inc. * | 13,700 | 945,026 | ||||||
Molina Healthcare, Inc. * | 23,457 | 588,067 | ||||||
MWI Veterinary Supply, Inc. * | 3,800 | 399,076 | ||||||
PharMerica Corp. * | 51,340 | 627,375 | ||||||
PSS World Medical, Inc. * | 38,570 | 1,103,873 | ||||||
ResMed, Inc. | 21,840 | 872,290 | ||||||
Sirona Dental Systems, Inc. * | 8,790 | 503,315 | ||||||
STERIS Corp. | 36,600 | 1,303,326 | ||||||
Sun Healthcare Group, Inc. * | 90,300 | 763,938 | ||||||
Sunrise Senior Living, Inc. * | 48,400 | 696,476 | ||||||
Teleflex, Inc. | 19,400 | 1,318,230 | ||||||
The Cooper Cos., Inc. | 8,500 | 815,830 | ||||||
Triple-S Management Corp., Class B * | 16,400 | 295,856 | ||||||
Universal American Corp. * | 45,800 | 414,032 | ||||||
Vanguard Health Systems, Inc. * | 18,500 | 179,080 | ||||||
VCA Antech, Inc. * | 36,100 | 706,838 | ||||||
West Pharmaceutical Services, Inc. | 13,640 | 734,787 | ||||||
31,115,362 | ||||||||
Household & Personal Products 0.4% | ||||||||
Central Garden & Pet Co., Class A * | 57,430 | 647,236 | ||||||
Elizabeth Arden, Inc. * | 8,870 | 418,487 | ||||||
Nu Skin Enterprises, Inc., Class A | 16,410 | 776,685 | ||||||
Spectrum Brands Holdings, Inc. * | 9,200 | 418,508 | ||||||
WD-40 Co. | 5,815 | 278,306 | ||||||
2,539,222 | ||||||||
Insurance 4.5% | ||||||||
Alleghany Corp. * | 3,200 | 1,112,320 | ||||||
Allied World Assurance Co. Holdings AG | 21,100 | 1,694,330 | ||||||
Alterra Capital Holdings Ltd. | 28,600 | 698,698 | ||||||
American Equity Investment Life Holding Co. | 36,515 | 420,288 | ||||||
Argo Group International Holdings Ltd. | 7,859 | 270,349 | ||||||
Arthur J. Gallagher & Co. | 37,300 | 1,321,912 | ||||||
Assured Guaranty Ltd. | 11,900 | 165,291 | ||||||
Brown & Brown, Inc. | 34,000 | 868,700 | ||||||
CNA Financial Corp. | 4,700 | 138,086 | ||||||
CNO Financial Group, Inc. | 167,100 | 1,600,818 | ||||||
Employers Holdings, Inc. | 16,700 | 304,775 | ||||||
Erie Indemnity Co., Class A | 11,100 | 690,642 | ||||||
First American Financial Corp. | 34,300 | 780,325 | ||||||
Flagstone Reinsurance Holdings S.A. | 35,800 | 316,472 | ||||||
HCC Insurance Holdings, Inc. | 46,900 | 1,671,516 | ||||||
Horace Mann Educators Corp. | 21,290 | 408,981 | ||||||
Infinity Property & Casualty Corp. | 11,865 | 677,610 | ||||||
Markel Corp. * | 2,500 | 1,179,850 | ||||||
MBIA, Inc. * | 37,300 | 369,270 | ||||||
Mercury General Corp. | 17,900 | 725,487 | ||||||
Montpelier Re Holdings Ltd. | 40,700 | 930,809 | ||||||
National Financial Partners Corp. * | 39,285 | 720,880 | ||||||
Old Republic International Corp. | 159,000 | 1,570,920 | ||||||
OneBeacon Insurance Group Ltd., Class A | 13,300 | 179,550 | ||||||
Primerica, Inc. | 40,500 | 1,144,530 | ||||||
ProAssurance Corp. | 7,500 | 670,500 | ||||||
Protective Life Corp. | 49,700 | 1,356,810 | ||||||
RLI Corp. | 9,900 | 674,982 | ||||||
Safety Insurance Group, Inc. | 9,405 | 435,922 | ||||||
Selective Insurance Group, Inc. | 45,100 | 833,899 | ||||||
StanCorp Financial Group, Inc. | 36,800 | 1,264,080 | ||||||
Symetra Financial Corp. | 13,000 | 155,350 | ||||||
The Hanover Insurance Group, Inc. | 32,300 | 1,166,353 | ||||||
Tower Group, Inc. | 7,500 | 135,150 | ||||||
Validus Holdings Ltd. | 30,800 | 1,102,640 | ||||||
27,758,095 | ||||||||
Materials 6.3% | ||||||||
A. M. Castle & Co. * | 14,978 | 181,983 | ||||||
A. Schulman, Inc. | 32,133 | 824,533 | ||||||
AK Steel Holding Corp. (b) | 226,400 | 1,141,056 | ||||||
AMCOL International Corp. | 11,220 | 354,328 | ||||||
Boise, Inc. | 72,400 | 607,436 | ||||||
Buckeye Technologies, Inc. | 12,380 | 324,356 | ||||||
Cabot Corp. | 34,500 | 1,233,720 | ||||||
Carpenter Technology Corp. | 23,200 | 1,127,752 | ||||||
Century Aluminum Co. * | 59,600 | 426,140 | ||||||
Chemtura Corp. * | 27,600 | 439,668 | ||||||
Clearwater Paper Corp. * | 12,360 | 488,714 | ||||||
Compass Minerals International, Inc. | 9,030 | 712,015 | ||||||
Crown Holdings, Inc. * | 40,600 | 1,552,950 | ||||||
Cytec Industries, Inc. | 25,100 | 1,727,382 | ||||||
Eagle Materials, Inc. | 25,970 | 1,375,631 | ||||||
Ferro Corp. * | 155,330 | 408,518 | ||||||
Georgia Gulf Corp. | 19,924 | 705,110 | ||||||
Graphic Packaging Holding Co. * | 74,500 | 441,040 | ||||||
Greif, Inc., Class A | 22,900 | 960,884 |
See financial notes 13
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
H.B. Fuller Co. | 32,680 | 993,472 | ||||||
Horsehead Holding Corp. * | 30,000 | 271,500 | ||||||
Innophos Holdings, Inc. | 9,550 | 455,058 | ||||||
Innospec, Inc. * | 10,280 | 332,866 | ||||||
Kaiser Aluminum Corp. (b) | 14,080 | 852,966 | ||||||
KapStone Paper & Packaging Corp. * | 7,300 | 160,381 | ||||||
Koppers Holdings, Inc. | 8,660 | 309,162 | ||||||
Kraton Performance Polymers, Inc. * | 16,400 | 357,848 | ||||||
Louisiana-Pacific Corp. * | 81,800 | 1,291,622 | ||||||
Materion Corp. | 15,460 | 323,887 | ||||||
Minerals Technologies, Inc. | 12,210 | 874,969 | ||||||
Myers Industries, Inc. | 11,205 | 166,170 | ||||||
NewMarket Corp. | 2,595 | 704,049 | ||||||
Olin Corp. | 47,300 | 981,002 | ||||||
Olympic Steel, Inc. | 18,900 | 340,200 | ||||||
OM Group, Inc. * | 33,100 | 669,613 | ||||||
P.H. Glatfelter Co. | 33,245 | 592,093 | ||||||
PolyOne Corp. | 38,800 | 734,484 | ||||||
Resolute Forest Products (b)* | 25,300 | 308,660 | ||||||
Rock-Tenn Co., Class A | 16,700 | 1,222,273 | ||||||
Rockwood Holdings, Inc. | 22,200 | 1,018,980 | ||||||
RTI International Metals, Inc. * | 15,280 | 348,231 | ||||||
Schnitzer Steel Industries, Inc., Class A | 38,010 | 1,083,665 | �� | |||||
Schweitzer-Mauduit International, Inc. | 12,672 | 443,900 | ||||||
Sensient Technologies Corp. | 22,700 | 825,826 | ||||||
Silgan Holdings, Inc. | 21,600 | 935,496 | ||||||
Stepan Co. | 4,565 | 437,327 | ||||||
Stillwater Mining Co. * | 31,470 | 327,603 | ||||||
SunCoke Energy, Inc. * | 16,500 | 265,155 | ||||||
Texas Industries, Inc. (b)* | 10,885 | 469,470 | ||||||
The Scotts Miracle-Gro Co., Class A | 24,600 | 1,053,126 | ||||||
Titanium Metals Corp. | 34,450 | 403,410 | ||||||
TPC Group, Inc. * | 11,300 | 508,274 | ||||||
Tredegar Corp. | 22,575 | 383,098 | ||||||
W.R. Grace & Co. * | 9,500 | 609,520 | ||||||
Walter Energy, Inc. | 16,600 | 580,336 | ||||||
Wausau Paper Corp. | 46,710 | 386,292 | ||||||
Westlake Chemical Corp. | 7,600 | 578,056 | ||||||
Worthington Industries, Inc. | 56,300 | 1,217,206 | ||||||
38,850,462 | ||||||||
Media 2.3% | ||||||||
AMC Networks, Inc., Class A * | 3,500 | 163,520 | ||||||
Belo Corp., Class A | 82,700 | 618,596 | ||||||
Central European Media Enterprises Ltd., Class A * | 60,600 | 324,816 | ||||||
Cinemark Holdings, Inc. | 41,400 | 1,022,166 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 47,900 | 975,723 | ||||||
Harte-Hanks, Inc. | 81,635 | 454,707 | ||||||
John Wiley & Sons, Inc., Class A | 14,800 | 642,024 | ||||||
Liberty Media Corp. - Liberty Capital, Class A * | 13,600 | 1,518,712 | ||||||
Live Nation Entertainment, Inc. * | 73,000 | 667,950 | ||||||
Meredith Corp. (b) | 28,600 | 957,242 | ||||||
National CineMedia, Inc. | 19,900 | 307,654 | ||||||
Regal Entertainment Group, Class A (b) | 65,600 | 1,007,616 | ||||||
Scholastic Corp. | 33,000 | 1,088,670 | ||||||
Scripps Networks Interactive, Class A | 17,000 | 1,032,240 | ||||||
Sinclair Broadcast Group, Inc., Class A | 30,319 | 382,019 | ||||||
The E.W. Scripps Co., Class A * | 72,900 | 773,469 | ||||||
The Madison Square Garden Co., Class A * | 12,400 | 510,384 | ||||||
The New York Times Co., Class A * | 147,200 | 1,204,096 | ||||||
Valassis Communications, Inc. * | 21,300 | 554,226 | ||||||
14,205,830 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||
Bio-Rad Laboratories, Inc., Class A * | 6,300 | 638,505 | ||||||
Charles River Laboratories International, Inc. * | 34,700 | 1,295,004 | ||||||
Covance, Inc. * | 28,900 | 1,407,719 | ||||||
Cubist Pharmaceuticals, Inc. * | 2,940 | 126,126 | ||||||
Endo Health Solutions, Inc. * | 38,500 | 1,103,410 | ||||||
Illumina, Inc. * | 8,060 | 382,931 | ||||||
Impax Laboratories, Inc. * | 7,300 | 155,125 | ||||||
Medicis Pharmaceutical Corp., Class A | 10,625 | 461,231 | ||||||
PAREXEL International Corp. * | 15,120 | 464,033 | ||||||
PDL Biopharma, Inc. | 83,150 | 619,468 | ||||||
PerkinElmer, Inc. | 55,500 | 1,716,615 | ||||||
Perrigo Co. | 8,100 | 931,581 | ||||||
QIAGEN N.V. * | 38,400 | 670,080 | ||||||
Techne Corp. | 7,765 | 523,050 | ||||||
ViroPharma, Inc. * | 10,960 | 276,740 | ||||||
10,771,618 | ||||||||
Real Estate 8.5% | ||||||||
Alexandria Real Estate Equities, Inc. | 10,000 | 704,300 | ||||||
American Campus Communities, Inc. | 6,960 | 315,358 | ||||||
American Capital Agency Corp. | 5,900 | 194,818 | ||||||
Anworth Mortgage Asset Corp. | 52,655 | 323,302 | ||||||
Ashford Hospitality Trust | 42,085 | 361,510 | ||||||
BioMed Realty Trust, Inc. | 30,900 | 590,808 | ||||||
Brandywine Realty Trust | 83,700 | 970,920 | ||||||
BRE Properties, Inc. | 13,300 | 643,055 | ||||||
Camden Property Trust | 16,000 | 1,050,080 | ||||||
Capstead Mortgage Corp. | 29,550 | 364,056 | ||||||
CBL & Associates Properties, Inc. | 56,200 | 1,257,194 | ||||||
CBRE Group, Inc., Class A * | 60,200 | 1,084,804 | ||||||
Chimera Investment Corp. | 217,100 | 579,657 | ||||||
Colonial Properties Trust | 35,200 | 761,376 | ||||||
CommonWealth REIT | 70,000 | 959,700 | ||||||
Corporate Office Properties Trust | 26,300 | 656,185 | ||||||
Cousins Properties, Inc. | 43,783 | 368,215 | ||||||
CubeSmart | 25,675 | 336,856 | ||||||
DCT Industrial Trust, Inc. | 81,200 | 523,740 | ||||||
DDR Corp. | 78,400 | 1,204,224 | ||||||
DiamondRock Hospitality Co. | 56,100 | 475,728 | ||||||
Digital Realty Trust, Inc. | 9,300 | 571,299 | ||||||
Douglas Emmett, Inc. | 28,800 | 675,360 | ||||||
EastGroup Properties, Inc. | 6,950 | 361,817 | ||||||
Entertainment Properties Trust | 11,900 | 528,955 | ||||||
Equity Lifestyle Properties, Inc. | 1,870 | 125,907 | ||||||
Essex Property Trust, Inc. | 4,800 | 720,000 |
14 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Extra Space Storage, Inc. | 12,665 | 436,816 | ||||||
Federal Realty Investment Trust | 10,400 | 1,121,432 | ||||||
FelCor Lodging Trust, Inc. * | 96,550 | 424,820 | ||||||
First Industrial Realty Trust, Inc. * | 43,800 | 584,730 | ||||||
Forest City Enterprises, Inc., Class A * | 25,300 | 406,065 | ||||||
General Growth Properties, Inc. | 85,200 | 1,675,032 | ||||||
Glimcher Realty Trust | 36,625 | 390,789 | ||||||
Hatteras Financial Corp. | 17,900 | 488,133 | ||||||
Health Care REIT, Inc. | 19,200 | 1,141,056 | ||||||
Healthcare Realty Trust, Inc. | 21,300 | 500,337 | ||||||
Highwoods Properties, Inc. | 22,600 | 728,850 | ||||||
Home Properties, Inc. | 13,300 | 808,507 | ||||||
HomeBanc Corp. (b)(c)(d)* | 6,875 | — | ||||||
Inland Real Estate Corp. | 37,530 | 306,620 | ||||||
iStar Financial, Inc. * | 211,400 | 1,845,522 | ||||||
Jones Lang LaSalle, Inc. | 16,400 | 1,274,936 | ||||||
Kilroy Realty Corp. | 11,900 | 528,479 | ||||||
LaSalle Hotel Properties | 20,640 | 494,121 | ||||||
Lexington Realty Trust | 58,200 | 552,318 | ||||||
Liberty Property Trust | 39,100 | 1,373,192 | ||||||
Mack-Cali Realty Corp. | 45,000 | 1,169,550 | ||||||
MFA Financial, Inc. | 85,100 | 695,267 | ||||||
Mid-America Apartment Communities, Inc. | 7,645 | 494,708 | ||||||
National Retail Properties, Inc. | 16,100 | 510,048 | ||||||
NorthStar Realty Finance Corp. | 73,732 | 484,419 | ||||||
Omega Healthcare Investors, Inc. | 18,490 | 424,161 | ||||||
Pennsylvania Real Estate Investment Trust | 45,000 | 743,850 | ||||||
Piedmont Office Realty Trust, Inc., Class A | 79,000 | 1,406,200 | ||||||
Post Properties, Inc. | 9,520 | 464,671 | ||||||
Potlatch Corp. | 35,800 | 1,377,584 | ||||||
ProLogis, Inc. | 40,100 | 1,375,029 | ||||||
PS Business Parks, Inc. | 4,750 | 304,617 | ||||||
RAIT Financial Trust | 93,120 | 519,609 | ||||||
Realty Income Corp. (b) | 17,000 | 667,590 | ||||||
Redwood Trust, Inc. (b) | 60,500 | 943,195 | ||||||
Regency Centers Corp. | 22,100 | 1,061,242 | ||||||
Senior Housing Properties Trust | 25,100 | 551,698 | ||||||
SL Green Realty Corp. | 12,800 | 963,840 | ||||||
Sovran Self Storage, Inc. | 7,170 | 414,426 | ||||||
Sun Communities, Inc. | 6,855 | 287,773 | ||||||
Sunstone Hotel Investors, Inc. * | 58,500 | 577,980 | ||||||
Tanger Factory Outlet Centers, Inc. | 12,680 | 399,040 | ||||||
Taubman Centers, Inc. | 11,100 | 871,905 | ||||||
The Macerich Co. | 23,800 | 1,356,600 | ||||||
UDR, Inc. | 41,800 | 1,014,486 | ||||||
Washington Real Estate Investment Trust | 18,300 | 470,493 | ||||||
Weingarten Realty Investors | 43,400 | 1,171,800 | ||||||
52,512,760 | ||||||||
Retailing 6.1% | ||||||||
Aeropostale, Inc. * | 72,400 | 865,180 | ||||||
ANN, Inc. * | 48,500 | 1,705,260 | ||||||
Asbury Automotive Group, Inc. * | 23,100 | 732,732 | ||||||
Ascena Retail Group, Inc. * | 32,600 | 645,480 | ||||||
AutoNation, Inc. (b)* | 36,300 | 1,611,720 | ||||||
Barnes & Noble, Inc. (b)* | 67,300 | 1,133,332 | ||||||
Brown Shoe Co., Inc. | 70,542 | 1,113,153 | ||||||
Cabela’s, Inc. * | 14,500 | 649,745 | ||||||
Chico’s FAS, Inc. | 86,600 | 1,610,760 | ||||||
Dick’s Sporting Goods, Inc. | 27,100 | 1,355,000 | ||||||
DSW, Inc., Class A | 3,268 | 204,544 | ||||||
Express, Inc. * | 11,400 | 126,882 | ||||||
Fred’s, Inc., Class A | 61,870 | 838,339 | ||||||
Genesco, Inc. * | 11,600 | 664,680 | ||||||
GNC Holdings, Inc., Class A | 5,200 | 201,084 | ||||||
Group 1 Automotive, Inc. | 27,500 | 1,705,275 | ||||||
Guess?, Inc. | 35,900 | 889,602 | ||||||
Hibbett Sports, Inc. * | 7,685 | 414,913 | ||||||
Hot Topic, Inc. | 49,500 | 425,700 | ||||||
HSN, Inc. | 13,500 | 702,270 | ||||||
Jos. A. Bank Clothiers, Inc. * | 9,085 | 425,087 | ||||||
Lithia Motors, Inc., Class A | 19,135 | 654,417 | ||||||
LKQ Corp. * | 47,300 | 988,097 | ||||||
Monro Muffler Brake, Inc. | 8,240 | 279,501 | ||||||
Netflix, Inc. (b)* | 8,600 | 680,174 | ||||||
Nutrisystem, Inc. | 56,230 | 541,495 | ||||||
OfficeMax, Inc. | 236,100 | 1,735,335 | ||||||
Penske Automotive Group, Inc. | 41,600 | 1,272,960 | ||||||
Pier 1 Imports, Inc. | 22,285 | 454,614 | ||||||
Pool Corp. | 18,580 | 782,590 | ||||||
Priceline.com, Inc. * | 2,059 | 1,181,392 | ||||||
Saks, Inc. (b)* | 141,800 | 1,457,704 | ||||||
Sally Beauty Holdings, Inc. * | 5,765 | 138,821 | ||||||
Select Comfort Corp. * | 9,770 | 271,899 | ||||||
Sonic Automotive, Inc., Class A | 49,800 | 966,120 | ||||||
Stage Stores, Inc. | 50,955 | 1,248,397 | ||||||
The Buckle, Inc. (b) | 12,222 | 552,068 | ||||||
The Cato Corp., Class A | 17,595 | 499,346 | ||||||
The Children’s Place Retail Stores, Inc. * | 18,860 | 1,101,990 | ||||||
The Finish Line, Inc., Class A | 32,552 | 677,244 | ||||||
The Men’s Wearhouse, Inc. | 40,200 | 1,318,158 | ||||||
The Pep Boys - Manny, Moe & Jack | 51,815 | 517,632 | ||||||
The Wet Seal, Inc., Class A * | 94,860 | 271,300 | ||||||
TripAdvisor, Inc. * | 3,400 | 102,986 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | 4,500 | 414,990 | ||||||
Urban Outfitters, Inc. * | 33,000 | 1,180,080 | ||||||
Vitamin Shoppe, Inc. * | 2,600 | 148,824 | ||||||
37,458,872 | ||||||||
Semiconductors & Semiconductor Equipment 2.8% | ||||||||
Advanced Micro Devices, Inc. (b)* | 223,400 | 457,970 | ||||||
Amkor Technology, Inc. (b)* | 114,700 | 495,504 | ||||||
Applied Micro Circuits Corp. * | 44,040 | 255,432 | ||||||
Atmel Corp. * | 126,500 | 590,122 | ||||||
ATMI, Inc. * | 19,615 | 387,396 | ||||||
Avago Technologies Ltd. | 24,200 | 799,326 | ||||||
Brooks Automation, Inc. | 45,590 | 329,160 | ||||||
Cabot Microelectronics Corp. | 9,230 | 275,054 | ||||||
Cirrus Logic, Inc. * | 10,235 | 417,179 | ||||||
Cree, Inc. * | 18,700 | 567,171 | ||||||
Cymer, Inc. * | 11,720 | 933,967 | ||||||
Cypress Semiconductor Corp. * | 41,205 | 408,342 | ||||||
Entegris, Inc. * | 70,045 | 575,069 | ||||||
Fairchild Semiconductor International, Inc. * | 65,800 | 773,808 |
See financial notes 15
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
First Solar, Inc. (b)* | 36,500 | 887,315 | ||||||
GT Advanced Technologies, Inc. (b)* | 61,200 | 265,608 | ||||||
Integrated Device Technology, Inc. * | 143,080 | 778,355 | ||||||
International Rectifier Corp. * | 33,000 | 511,170 | ||||||
Intersil Corp., Class A | 120,600 | 850,230 | ||||||
Micrel, Inc. | 33,150 | 321,224 | ||||||
Microsemi Corp. * | 17,445 | 334,944 | ||||||
MKS Instruments, Inc. | 21,950 | 518,679 | ||||||
OmniVision Technologies, Inc. * | 25,080 | 358,644 | ||||||
ON Semiconductor Corp. * | 155,300 | 955,095 | ||||||
Photronics, Inc. * | 53,125 | 259,781 | ||||||
PMC-Sierra, Inc. * | 55,025 | 257,517 | ||||||
RF Micro Devices, Inc. * | 108,945 | 480,447 | ||||||
Semtech Corp. * | 14,905 | 372,178 | ||||||
Silicon Laboratories, Inc. * | 18,190 | 735,240 | ||||||
Skyworks Solutions, Inc. * | 25,200 | 589,680 | ||||||
Spansion, Inc., Class A * | 17,100 | 189,639 | ||||||
Teradyne, Inc. * | 62,100 | 907,902 | ||||||
Tessera Technologies, Inc. | 19,890 | 281,841 | ||||||
TriQuint Semiconductor, Inc. * | 68,960 | 324,112 | ||||||
Veeco Instruments, Inc. * | 4,460 | 136,922 | ||||||
17,582,023 | ||||||||
Software & Services 4.9% | ||||||||
Activision Blizzard, Inc. | 91,900 | 1,000,791 | ||||||
Acxiom Corp. * | 75,215 | 1,372,674 | ||||||
Akamai Technologies, Inc. * | 22,000 | 835,780 | ||||||
ANSYS, Inc. * | 6,600 | 467,808 | ||||||
Broadridge Financial Solutions, Inc. | 54,500 | 1,250,775 | ||||||
CACI International, Inc., Class A * | 18,800 | 948,084 | ||||||
Cadence Design Systems, Inc. * | 41,700 | 527,922 | ||||||
Citrix Systems, Inc. * | 18,700 | 1,155,847 | ||||||
CSG Systems International, Inc. * | 35,745 | 736,704 | ||||||
EarthLink, Inc. | 133,175 | 844,330 | ||||||
Electronic Arts, Inc. * | 81,300 | 1,004,055 | ||||||
Equinix, Inc. * | 3,000 | 541,230 | ||||||
Euronet Worldwide, Inc. * | 20,395 | 413,815 | ||||||
FactSet Research Systems, Inc. | 8,165 | 739,341 | ||||||
Fair Isaac Corp. | 27,805 | 1,295,713 | ||||||
Gartner, Inc. * | 15,800 | 733,278 | ||||||
Genpact Ltd. | 23,250 | 409,433 | ||||||
Global Cash Access Holdings, Inc. * | 54,735 | 385,882 | ||||||
Global Payments, Inc. | 19,600 | 837,900 | ||||||
Heartland Payment Systems, Inc. | 15,265 | 398,111 | ||||||
Informatica Corp. * | 6,255 | 169,761 | ||||||
j2 Global, Inc. | 11,785 | 354,021 | ||||||
Jack Henry & Associates, Inc. | 23,080 | 877,040 | ||||||
Lender Processing Services, Inc. | 52,700 | 1,270,597 | ||||||
Manhattan Associates, Inc. * | 6,995 | 419,700 | ||||||
ManTech International Corp., Class A | 21,200 | 486,964 | ||||||
MAXIMUS, Inc. | 12,890 | 711,270 | ||||||
Mentor Graphics Corp. * | 23,220 | 360,374 | ||||||
MICROS Systems, Inc. * | 11,540 | 523,801 | ||||||
MicroStrategy, Inc., Class A * | 3,028 | 286,055 | ||||||
Monster Worldwide, Inc. * | 101,700 | 632,574 | ||||||
NeuStar, Inc., Class A * | 14,075 | 515,004 | ||||||
Nuance Communications, Inc. * | 14,100 | 313,866 | ||||||
Parametric Technology Corp. * | 23,740 | 479,073 | ||||||
Progress Software Corp. * | 16,725 | 329,817 | ||||||
Rackspace Hosting, Inc. * | 2,520 | 160,499 | ||||||
Red Hat, Inc. * | 7,400 | 363,858 | ||||||
Rovi Corp. * | 8,269 | 111,880 | ||||||
Salesforce.com, Inc. * | 3,038 | 443,487 | ||||||
Sapient Corp. * | 27,580 | 283,522 | ||||||
Solera Holdings, Inc. | 7,160 | 335,160 | ||||||
Synopsys, Inc. * | 27,900 | 898,380 | ||||||
Take-Two Interactive Software, Inc. * | 34,755 | 387,518 | ||||||
TeleTech Holdings, Inc. * | 23,410 | 394,224 | ||||||
TIBCO Software, Inc. * | 27,030 | 681,426 | ||||||
Unisys Corp. * | 31,100 | 530,255 | ||||||
United Online, Inc. | 119,127 | 638,521 | ||||||
ValueClick, Inc. * | 33,680 | 561,446 | ||||||
VistaPrint N.V. * | 4,020 | 122,489 | ||||||
WEX, Inc. * | 8,000 | 590,240 | ||||||
30,132,295 | ||||||||
Technology Hardware & Equipment 4.2% | ||||||||
ADTRAN, Inc. (b) | 29,245 | 493,948 | ||||||
Arris Group, Inc. * | 56,005 | 769,509 | ||||||
Avid Technology, Inc. * | 40,425 | 237,295 | ||||||
AVX Corp. | 30,200 | 297,168 | ||||||
Benchmark Electronics, Inc. * | 91,000 | 1,348,620 | ||||||
Black Box Corp. | 20,540 | 450,237 | ||||||
Brocade Communications Systems, Inc. * | 144,200 | 764,260 | ||||||
Checkpoint Systems, Inc. * | 40,480 | 328,698 | ||||||
Cognex Corp. | 9,865 | 359,678 | ||||||
Coherent, Inc. * | 9,540 | 435,501 | ||||||
Comtech Telecommunications Corp. | 12,070 | 303,802 | ||||||
Diebold, Inc. | 42,500 | 1,264,375 | ||||||
Dolby Laboratories, Inc., Class A * | 9,100 | 287,469 | ||||||
EchoStar Corp., Class A * | 20,800 | 660,608 | ||||||
Electronics for Imaging, Inc. * | 31,202 | 541,667 | ||||||
Emulex Corp. * | 55,765 | 388,124 | ||||||
Extreme Networks, Inc. * | 79,065 | 257,752 | ||||||
F5 Networks, Inc. * | 4,940 | 407,451 | ||||||
FEI Co. | 6,220 | 342,411 | ||||||
Finisar Corp. * | 10,330 | 119,002 | ||||||
FLIR Systems, Inc. | 39,200 | 761,656 | ||||||
Gerber Scientific, Inc. (b)(c)(d)* | 19,700 | — | ||||||
Insight Enterprises, Inc. * | 57,300 | 926,541 | ||||||
InterDigital, Inc. (b) | 17,700 | 674,193 | ||||||
Intermec, Inc. * | 62,335 | 422,631 | ||||||
Itron, Inc. * | 17,600 | 722,656 | ||||||
JDS Uniphase Corp. * | 51,500 | 499,035 | ||||||
KEMET Corp. * | 49,700 | 225,638 | ||||||
Littelfuse, Inc. | 6,145 | 329,372 | ||||||
MTS Systems Corp. | 8,180 | 412,354 | ||||||
National Instruments Corp. | 21,342 | 502,817 | ||||||
NCR Corp. * | 79,000 | 1,681,120 | ||||||
NETGEAR, Inc. * | 10,250 | 363,977 | ||||||
Newport Corp. * | 20,330 | 219,971 | ||||||
Plantronics, Inc. | 16,410 | 532,340 | ||||||
Plexus Corp. * | 24,280 | 653,375 | ||||||
Polycom, Inc. * | 61,440 | 615,629 | ||||||
QLogic Corp. * | 87,180 | 817,748 | ||||||
Rofin-Sinar Technologies, Inc. * | 19,110 | 347,993 | ||||||
Sanmina-SCI Corp. * | 141,500 | 1,257,935 | ||||||
ScanSource, Inc. * | 23,040 | 673,920 | ||||||
Synaptics, Inc. * | 10,205 | 236,348 | ||||||
SYNNEX Corp. * | 37,700 | 1,221,103 |
16 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Trimble Navigation Ltd. * | 16,400 | 773,752 | ||||||
ViaSat, Inc. * | 6,815 | 264,695 | ||||||
Zebra Technologies Corp., Class A * | 26,420 | 949,270 | ||||||
26,143,644 | ||||||||
Telecommunication Services 1.3% | ||||||||
Cincinnati Bell, Inc. * | 182,100 | 948,741 | ||||||
Consolidated Communications Holdings, Inc. | 22,614 | 349,160 | ||||||
General Communication, Inc., Class A * | 31,160 | 272,339 | ||||||
IDT Corp., Class B | 33,200 | 335,984 | ||||||
Leap Wireless International, Inc. (b)* | 82,600 | 441,084 | ||||||
Level 3 Communications, Inc. * | 49,500 | 1,014,750 | ||||||
MetroPCS Communications, Inc. * | 138,600 | 1,415,106 | ||||||
NTELOS Holdings Corp. | 15,320 | 233,630 | ||||||
Premiere Global Services, Inc. * | 52,600 | 447,100 | ||||||
SBA Communications Corp., Class A * | 8,505 | 566,688 | ||||||
tw telecom, Inc. * | 32,100 | 817,587 | ||||||
United States Cellular Corp. * | 11,500 | 425,385 | ||||||
USA Mobility, Inc. | 44,005 | 486,255 | ||||||
7,753,809 | ||||||||
Transportation 3.3% | ||||||||
Air Transport Services Group, Inc. * | 54,430 | 209,556 | ||||||
Alaska Air Group, Inc. * | 26,200 | 1,001,888 | ||||||
AMERCO | 4,700 | 543,038 | ||||||
Arkansas Best Corp. | 65,640 | 528,402 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 14,700 | 808,353 | ||||||
Con-way, Inc. | 48,600 | 1,414,746 | ||||||
Copa Holdings S.A., Class A | 6,800 | 631,176 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 14,200 | 1,093,400 | ||||||
Forward Air Corp. | 11,725 | 391,263 | ||||||
Genco Shipping & Trading Ltd. * | 75,745 | 230,265 | ||||||
Genesee & Wyoming, Inc., Class A * | 5,865 | 425,037 | ||||||
Hawaiian Holdings, Inc. * | 24,340 | 144,336 | ||||||
Heartland Express, Inc. | 30,365 | 423,592 | ||||||
Hub Group, Inc., Class A * | 24,610 | 763,156 | ||||||
JetBlue Airways Corp. * | 156,300 | 826,827 | ||||||
Kansas City Southern | 16,000 | 1,287,360 | ||||||
Kirby Corp. * | 14,600 | 839,208 | ||||||
Knight Transportation, Inc. | 30,625 | 463,050 | ||||||
Landstar System, Inc. | 25,170 | 1,274,860 | ||||||
Matson, Inc. | 28,100 | 597,125 | ||||||
Old Dominion Freight Line, Inc. * | 20,475 | 686,731 | ||||||
Republic Airways Holdings, Inc. * | 144,000 | 672,480 | ||||||
Saia, Inc. * | 7,800 | 176,280 | ||||||
SkyWest, Inc. | 140,800 | 1,541,760 | ||||||
Swift Transportation Co. * | 40,300 | 392,925 | ||||||
US Airways Group, Inc. * | 60,400 | 735,672 | ||||||
Uti Worldwide, Inc. | 85,000 | 1,180,650 | ||||||
Werner Enterprises, Inc. | 39,900 | 924,084 | ||||||
20,207,220 | ||||||||
Utilities 3.8% | ||||||||
ALLETE, Inc. | 15,100 | 628,462 | ||||||
American States Water Co. | 7,115 | 313,202 | ||||||
Aqua America, Inc. | 36,500 | 926,735 | ||||||
Atlantic Power Corp. | 29,600 | 444,592 | ||||||
Avista Corp. | 32,500 | 826,150 | ||||||
Black Hills Corp. | 22,200 | 794,094 | ||||||
California Water Service Group | 17,780 | 327,508 | ||||||
CH Energy Group, Inc. | 8,105 | 527,068 | ||||||
Cleco Corp. | 18,900 | 815,535 | ||||||
El Paso Electric Co. | 18,990 | 645,470 | ||||||
Hawaiian Electric Industries, Inc. | 47,500 | 1,229,300 | ||||||
IDACORP, Inc. | 21,000 | 939,120 | ||||||
ITC Holdings Corp. | 8,600 | 684,732 | ||||||
MGE Energy, Inc. | 9,300 | 489,552 | ||||||
New Jersey Resources Corp. | 23,900 | 1,062,594 | ||||||
Northwest Natural Gas Co. | 14,805 | 688,877 | ||||||
NorthWestern Corp. | 21,300 | 762,753 | ||||||
Otter Tail Corp. | 28,180 | 679,983 | ||||||
Piedmont Natural Gas Co., Inc. | 36,800 | 1,172,816 | ||||||
PNM Resources, Inc. | 55,600 | 1,232,096 | ||||||
Portland General Electric Co. | 48,200 | 1,320,680 | ||||||
South Jersey Industries, Inc. | 10,440 | 528,160 | ||||||
Southwest Gas Corp. | 25,800 | 1,121,526 | ||||||
The Empire District Electric Co. | 23,210 | 503,889 | ||||||
The Laclede Group, Inc. | 17,140 | 713,709 | ||||||
UIL Holdings Corp. | 17,200 | 622,124 | ||||||
UNS Energy Corp. | 24,100 | 1,027,624 | ||||||
Vectren Corp. | 51,300 | 1,516,941 | ||||||
WGL Holdings, Inc. | 31,500 | 1,252,755 | ||||||
23,798,047 | ||||||||
Total Common Stock | ||||||||
(Cost $570,965,988) | 615,071,735 | |||||||
Warrants 0.0% of net assets | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. (d)* | 1,535 | 46 | ||||||
Total Warrants | ||||||||
(Cost $—) | 46 | |||||||
Other Investment Company 0.6% of net assets | ||||||||
Money Market Fund 0.6% | ||||||||
State Street Institutional U.S. Government Money Market Fund | 3,574,136 | 3,574,136 | ||||||
Total Other Investment Company | ||||||||
(Cost $3,574,136) | 3,574,136 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.08%, 12/20/12 (a)(e) | 130,000 | 129,987 |
See financial notes 17
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
0.09%, 12/20/12 (a)(e) | 200,000 | 199,976 | ||||||
0.11%, 12/20/12 (a)(e) | 132,000 | 131,981 | ||||||
Total Short-Term Investments | ||||||||
(Cost $461,944) | 461,944 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 3.6% of net assets | ||||||||
State Street Institutional U.S. Government Money Market Fund | 22,200,866 | 22,200,866 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $22,200,866) | 22,200,866 | |||||||
End of Collateral Invested for Securities on Loan |
At 10/31/12 the tax basis cost of the fund’s investments was $577,427,922 and the unrealized appreciation and depreciation were $70,863,797 and ($29,183,858), respectively, with a net unrealized appreciation of $41,679,939.
* | 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 $441,245 or 0.1% of net assets. | |
(e) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/12.
Contract | Unrealized | |||||||||||
Number of | Value | Losses | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/21/12 | 40 | 3,265,200 | (74,586 | ) |
18 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .1% | Common Stock | 490,085,799 | 490,995,014 | ||||||||
0 | .4% | Preferred Stock | 1,412,454 | 2,225,322 | ||||||||
0 | .0% | Rights | — | 30,003 | ||||||||
1 | .2% | Other Investment Company | 5,336,587 | 5,892,700 | ||||||||
0 | .1% | Short-Term Investments | 430,011 | 430,011 | ||||||||
99 | .8% | Total Investments | 497,264,851 | 499,573,050 | ||||||||
0 | .1% | Collateral Invested for Securities on Loan | 664,945 | 664,945 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 342,932 | |||||||||
100 | .0% | Total Net Assets | 500,580,927 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.1% of net assets | ||||||||
Australia 4.7% | ||||||||
Banks 1.3% | ||||||||
Australia & New Zealand Banking Group Ltd. | 57,187 | 1,508,664 | ||||||
Commonwealth Bank of Australia | 29,281 | 1,753,507 | ||||||
National Australia Bank Ltd. | 62,075 | 1,658,937 | ||||||
Westpac Banking Corp. | 56,849 | 1,502,969 | ||||||
6,424,077 | ||||||||
Capital Goods 0.0% | ||||||||
CSR Ltd. | 65,468 | 118,857 | ||||||
Leighton Holdings Ltd. | 6,514 | 120,868 | ||||||
239,725 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Brambles Ltd. | 67,178 | 505,832 | ||||||
Downer EDI Ltd. * | 36,336 | 135,256 | ||||||
641,088 | ||||||||
Consumer Services 0.1% | ||||||||
Crown Ltd. | 15,924 | 160,496 | ||||||
TABCORP Holdings Ltd. | 103,455 | 304,664 | ||||||
Tatts Group Ltd. | 62,367 | 181,134 | ||||||
646,294 | ||||||||
Diversified Financials 0.1% | ||||||||
BGP Holdings plc (a)(b) | 453,854 | — | ||||||
Macquarie Group Ltd. | 12,587 | 415,768 | ||||||
415,768 | ||||||||
Energy 0.3% | ||||||||
Caltex Australia Ltd. | 19,005 | 335,813 | ||||||
Origin Energy Ltd. | 21,761 | 256,151 | ||||||
Santos Ltd. | 18,003 | 214,653 | ||||||
Woodside Petroleum Ltd. | 11,469 | 408,941 | ||||||
WorleyParsons Ltd. | 4,401 | 112,542 | ||||||
1,328,100 | ||||||||
Food & Staples Retailing 0.6% | ||||||||
Metcash Ltd. | 58,455 | 222,044 | ||||||
Wesfarmers Ltd. | 35,047 | 1,263,421 | ||||||
Woolworths Ltd. | 43,464 | 1,325,733 | ||||||
2,811,198 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca-Cola Amatil Ltd. | 12,534 | 174,871 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Sonic Healthcare Ltd. | 10,022 | 135,146 | ||||||
Insurance 0.4% | ||||||||
AMP Ltd. | 82,225 | 391,205 | ||||||
Insurance Australia Group Ltd. | 76,568 | 364,101 | ||||||
QBE Insurance Group Ltd. | 45,131 | 616,577 | ||||||
Suncorp Group Ltd. | 62,652 | 610,264 | ||||||
1,982,147 | ||||||||
Materials 1.1% | ||||||||
Amcor Ltd. | 42,758 | 350,286 | ||||||
Arrium Ltd. | 242,355 | 196,846 | ||||||
BHP Billiton Ltd. | 86,105 | 3,048,583 | ||||||
BlueScope Steel Ltd. * | 906,931 | 445,930 | ||||||
Boral Ltd. | 51,935 | 193,435 | ||||||
Incitec Pivot Ltd. | 40,288 | 131,955 | ||||||
Newcrest Mining Ltd. | 4,966 | 136,962 | ||||||
Orica Ltd. | 10,219 | 266,193 | ||||||
Rio Tinto Ltd. | 9,785 | 576,881 | ||||||
Sims Metal Management Ltd. | 16,208 | 158,378 | ||||||
5,505,449 | ||||||||
Media 0.0% | ||||||||
Fairfax Media Ltd. | 232,396 | 95,145 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
CSL Ltd. | 6,583 | 324,678 | ||||||
Real Estate 0.3% | ||||||||
Lend Lease Group | 30,512 | 273,929 | ||||||
Mirvac Group | 99,101 | 154,619 | ||||||
Stockland | 72,409 | 259,804 | ||||||
Westfield Group | 57,903 | 640,066 | ||||||
1,328,418 | ||||||||
Telecommunication Services 0.2% | ||||||||
Telstra Corp., Ltd. | 214,331 | 921,087 | ||||||
Transportation 0.1% | ||||||||
Asciano Ltd. | 27,767 | 131,421 | ||||||
Qantas Airways Ltd. * | 146,040 | 201,340 | ||||||
Toll Holdings Ltd. | 39,852 | 183,591 | ||||||
516,352 | ||||||||
Utilities 0.0% | ||||||||
AGL Energy Ltd. | 10,505 | 158,424 | ||||||
23,647,967 |
See financial notes 19
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Austria 0.4% | ||||||||
Banks 0.2% | ||||||||
Erste Group Bank AG * | 28,448 | 717,108 | ||||||
Capital Goods 0.0% | ||||||||
Wienerberger AG | 16,144 | 115,809 | ||||||
Energy 0.1% | ||||||||
OMV AG | 15,537 | 568,581 | ||||||
Materials 0.1% | ||||||||
Voestalpine AG | 12,807 | 403,268 | ||||||
Real Estate 0.0% | ||||||||
Immofinanz AG | 32,200 | 124,471 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG | 28,493 | 179,500 | ||||||
2,108,737 | ||||||||
Belgium 0.9% | ||||||||
Banks 0.1% | ||||||||
Dexia S.A. * | 624,580 | 145,719 | ||||||
KBC GROEP N.V. | 20,201 | 475,199 | ||||||
620,918 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Colruyt S.A. | 3,441 | 157,316 | ||||||
Delhaize Group S.A. | 17,811 | 681,930 | ||||||
839,246 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Anheuser-Busch InBev N.V. | 13,014 | 1,088,375 | ||||||
Insurance 0.1% | ||||||||
Ageas | 27,973 | 713,174 | ||||||
Materials 0.2% | ||||||||
Bekaert N.V. | 5,193 | 141,802 | ||||||
Solvay S.A. | 3,154 | 379,748 | ||||||
Umicore S.A. | 6,416 | 329,708 | ||||||
851,258 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
UCB S.A. | 3,377 | 197,242 | ||||||
Telecommunication Services 0.1% | ||||||||
Belgacom S.A. | 10,387 | 303,676 | ||||||
Mobistar S.A. | 3,154 | 83,437 | ||||||
387,113 | ||||||||
4,697,326 | ||||||||
Canada 6.3% | ||||||||
Automobiles & Components 0.2% | ||||||||
Magna International, Inc. | 20,118 | 894,357 | ||||||
Banks 1.2% | ||||||||
Bank of Montreal | 14,713 | 869,448 | ||||||
Bank of Nova Scotia | 21,848 | 1,186,737 | ||||||
Canadian Imperial Bank of Commerce | 8,677 | 682,518 | ||||||
National Bank of Canada | 3,430 | 265,059 | ||||||
Royal Bank of Canada | 30,544 | 1,741,352 | ||||||
The Toronto-Dominion Bank | 15,259 | 1,241,040 | ||||||
5,986,154 | ||||||||
Capital Goods 0.1% | ||||||||
Bombardier, Inc., Class B | 71,368 | 271,538 | ||||||
Finning International, Inc. | 7,380 | 173,277 | ||||||
SNC-Lavalin Group, Inc. | 3,200 | 128,897 | ||||||
573,712 | ||||||||
Consumer Services 0.0% | ||||||||
Tim Hortons, Inc. | 2,300 | 114,177 | ||||||
Diversified Financials 0.1% | ||||||||
IGM Financial, Inc. | 3,220 | 127,768 | ||||||
Onex Corp. | 5,061 | 203,707 | ||||||
331,475 | ||||||||
Energy 2.0% | ||||||||
ARC Resources Ltd. | 7,500 | 182,103 | ||||||
Cameco Corp. | 7,600 | 147,396 | ||||||
Canadian Natural Resources Ltd. | 26,200 | 789,607 | ||||||
Canadian Oil Sands Ltd. | 22,400 | 475,474 | ||||||
Cenovus Energy, Inc. | 21,109 | 744,601 | ||||||
Crescent Point Energy Corp. | 2,600 | 108,035 | ||||||
Enbridge, Inc. | 12,538 | 498,884 | ||||||
Encana Corp. | 100,909 | 2,273,294 | ||||||
Enerplus Corp. | 11,700 | 188,020 | ||||||
Husky Energy, Inc. | 14,867 | 402,656 | ||||||
Imperial Oil Ltd. | 10,723 | 474,442 | ||||||
Nexen, Inc. | 24,326 | 580,901 | ||||||
Pengrowth Energy Corp. | 26,900 | 161,333 | ||||||
Penn West Petroleum Ltd. | 24,000 | 311,670 | ||||||
Precision Drilling Corp. * | 14,800 | 105,952 | ||||||
Suncor Energy, Inc. | 32,845 | 1,102,342 | ||||||
Talisman Energy, Inc. | 57,581 | 652,633 | ||||||
TransCanada Corp. | 17,535 | 789,536 | ||||||
9,988,879 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Alimentation Couche-Tard, Inc., Class B | 7,437 | 365,316 | ||||||
Empire Co., Ltd, Class A | 2,833 | 165,059 | ||||||
George Weston Ltd. | 4,005 | 260,009 | ||||||
Loblaw Cos., Ltd. (c) | 8,064 | 279,525 | ||||||
Metro, Inc. | 6,040 | 356,322 | ||||||
Shoppers Drug Mart Corp. | 8,659 | 360,925 | ||||||
1,787,156 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Saputo, Inc. | 3,700 | 162,374 | ||||||
Viterra, Inc. | 10,400 | 163,901 | ||||||
326,275 | ||||||||
Insurance 0.6% | ||||||||
Fairfax Financial Holdings Ltd. | 662 | 245,585 | ||||||
Great-West Lifeco, Inc. | 8,320 | 191,599 | ||||||
Intact Financial Corp. | 3,223 | 197,656 | ||||||
Manulife Financial Corp. | 74,448 | 919,838 | ||||||
Power Corp. of Canada | 20,415 | 495,274 | ||||||
Power Financial Corp. | 9,814 | 253,322 | ||||||
Sun Life Financial, Inc. | 22,590 | 560,255 | ||||||
2,863,529 | ||||||||
Materials 0.5% | ||||||||
Agrium, Inc. | 3,412 | 359,323 | ||||||
Barrick Gold Corp. | 14,716 | 595,123 | ||||||
First Quantum Minerals Ltd. | 7,000 | 157,347 | ||||||
Goldcorp, Inc. | 5,710 | 258,129 |
20 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Kinross Gold Corp. | 13,553 | 134,614 | ||||||
Methanex Corp. | 5,400 | 161,878 | ||||||
Potash Corp. of Saskatchewan, Inc. | 16,142 | 648,913 | ||||||
Sino-Forest Corp. (a)(b)* | 20,000 | — | ||||||
Teck Resources Ltd., Class B | 13,614 | 432,104 | ||||||
2,747,431 | ||||||||
Media 0.1% | ||||||||
Quebecor, Inc., Class B | 3,492 | 121,814 | ||||||
Shaw Communications, Inc., Class B | 8,077 | 175,975 | ||||||
297,789 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Valeant Pharmaceuticals International, Inc. * | 2,700 | 150,849 | ||||||
Real Estate 0.1% | ||||||||
Brookfield Asset Management, Inc., Class A | 16,855 | 580,200 | ||||||
Retailing 0.1% | ||||||||
Canadian Tire Corp., Ltd., Class A | 3,819 | 273,248 | ||||||
RONA, Inc. | 17,000 | 174,638 | ||||||
447,886 | ||||||||
Software & Services 0.0% | ||||||||
CGI Group, Inc., Class A * | 9,217 | 241,142 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Celestica, Inc. * | 21,312 | 154,706 | ||||||
Research In Motion Ltd. * | 58,606 | 462,393 | ||||||
617,099 | ||||||||
Telecommunication Services 0.4% | ||||||||
BCE, Inc. | 16,953 | 741,094 | ||||||
Rogers Communications, Inc., Class B | 16,104 | 706,883 | ||||||
Telus Corp. | 2,378 | 154,383 | ||||||
Telus Corp. - Non Voting Shares | 6,531 | 420,011 | ||||||
2,022,371 | ||||||||
Transportation 0.3% | ||||||||
Canadian National Railway Co. | 11,323 | 977,717 | ||||||
Canadian Pacific Railway Ltd. | 3,632 | 334,126 | ||||||
1,311,843 | ||||||||
Utilities 0.1% | ||||||||
Fortis, Inc. | 5,200 | 175,824 | ||||||
TransAlta Corp. | 11,269 | 179,627 | ||||||
355,451 | ||||||||
31,637,775 | ||||||||
China 0.0% | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Chaoda Modern Agriculture (Holdings) Ltd. (a)(b)* | 171,320 | 6,079 | ||||||
Denmark 0.7% | ||||||||
Banks 0.1% | ||||||||
Danske Bank A/S * | 32,147 | 502,897 | ||||||
Capital Goods 0.1% | ||||||||
FLSmidth & Co. A/S | 1,820 | 107,407 | ||||||
Vestas Wind Systems A/S (c)* | 22,613 | 130,738 | ||||||
238,145 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Carlsberg A/S, Class B | 4,108 | 354,595 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Novo Nordisk A/S, Class B | 4,687 | 751,398 | ||||||
Telecommunication Services 0.0% | ||||||||
TDC A/S | 22,997 | 158,558 | ||||||
Transportation 0.2% | ||||||||
AP Moller - Maersk A/S, Series A | 50 | 331,291 | ||||||
AP Moller - Maersk A/S, Series B | 112 | 781,721 | ||||||
DSV A/S | 5,522 | 124,212 | ||||||
1,237,224 | ||||||||
3,242,817 | ||||||||
Finland 1.2% | ||||||||
Capital Goods 0.1% | ||||||||
Kone Oyj, B Shares | 3,181 | 228,107 | ||||||
Metso Oyj | 6,737 | 236,930 | ||||||
Wartsila Oyj Abp | 6,062 | 245,496 | ||||||
710,533 | ||||||||
Energy 0.1% | ||||||||
Neste Oil Oyj | 22,055 | 276,191 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Kesko Oyj, B Shares | 13,156 | 411,394 | ||||||
Insurance 0.1% | ||||||||
Sampo Oyj, A Shares | 16,737 | 524,765 | ||||||
Materials 0.2% | ||||||||
Outokumpu Oyj * | 111,048 | 94,368 | ||||||
Rautaruukki Oyj | 19,827 | 125,732 | ||||||
Stora Enso Oyj, R Shares | 62,321 | 394,218 | ||||||
UPM-Kymmene Oyj | 55,052 | 591,079 | ||||||
1,205,397 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 6,377 | 157,789 | ||||||
Technology Hardware & Equipment 0.5% | ||||||||
Nokia Oyj | 860,431 | 2,313,258 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 7,405 | 158,903 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 20,167 | 373,251 | ||||||
6,131,481 | ||||||||
France 10.9% | ||||||||
Automobiles & Components 0.5% | ||||||||
Compagnie Generale des Etablissements Michelin | 11,276 | 972,046 | ||||||
Peugeot S.A. * | 86,941 | 557,686 | ||||||
Renault S.A. | 20,483 | 918,436 | ||||||
Valeo S.A. | 5,452 | 240,071 | ||||||
2,688,239 | ||||||||
Banks 1.3% | ||||||||
BNP Paribas S.A. | 63,860 | 3,221,415 | ||||||
Credit Agricole S.A. * | 125,756 | 949,234 | ||||||
Societe Generale S.A. * | 65,201 | 2,079,397 | ||||||
6,250,046 |
See financial notes 21
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 1.4% | ||||||||
Alstom S.A. | 10,638 | 363,638 | ||||||
Bouygues S.A. | 23,538 | 565,726 | ||||||
Compagnie de Saint-Gobain | 48,387 | 1,704,446 | ||||||
Eiffage S.A. | 9,170 | 315,553 | ||||||
Legrand S.A. | 6,893 | 265,925 | ||||||
Nexans S.A. | 3,691 | 157,169 | ||||||
Rexel S.A. | 6,742 | 122,111 | ||||||
Safran S.A. | 6,333 | 252,267 | ||||||
Schneider Electric S.A. | 20,305 | 1,271,388 | ||||||
Thales S.A. | 5,249 | 184,771 | ||||||
Vallourec S.A. | 10,244 | 421,402 | ||||||
Vinci S.A. | 29,879 | 1,324,419 | ||||||
6,948,815 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Christian Dior S.A. | 1,966 | 282,452 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 5,021 | 816,319 | ||||||
1,098,771 | ||||||||
Consumer Services 0.1% | ||||||||
Accor S.A. | 12,835 | 401,063 | ||||||
Sodexo | 3,208 | 247,129 | ||||||
648,192 | ||||||||
Diversified Financials 0.0% | ||||||||
Wendel S.A. | 1,572 | 138,588 | ||||||
Energy 2.0% | ||||||||
Compagnie Generale de Geophysique - Veritas * | 6,844 | 222,805 | ||||||
Technip S.A. | 2,674 | 301,603 | ||||||
Total S.A. | 193,008 | 9,721,853 | ||||||
10,246,261 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Carrefour S.A. | 87,075 | 2,102,916 | ||||||
Casino Guichard Perrachon S.A. | 4,535 | 395,864 | ||||||
Rallye S.A. | 5,847 | 178,413 | ||||||
2,677,193 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Danone S.A. | 14,615 | 898,929 | ||||||
Pernod-Ricard S.A. | 4,117 | 443,388 | ||||||
1,342,317 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Essilor International S.A. | 3,376 | 304,426 | ||||||
Household & Personal Products 0.1% | ||||||||
L’Oreal S.A. | 5,001 | 637,365 | ||||||
Insurance 0.5% | ||||||||
AXA S.A. | 140,870 | 2,245,285 | ||||||
CNP Assurances | 11,404 | 161,149 | ||||||
SCOR SE | 7,154 | 191,020 | ||||||
2,597,454 | ||||||||
Materials 0.5% | ||||||||
Air Liquide S.A. | 8,277 | 977,116 | ||||||
Arkema S.A. | 3,049 | 278,220 | ||||||
Lafarge S.A. | 18,540 | 1,086,990 | ||||||
2,342,326 | ||||||||
Media 0.2% | ||||||||
Lagardere S.C.A. | 15,172 | 415,387 | ||||||
Publicis Groupe S.A. | 3,521 | 189,773 | ||||||
SES S.A. | 7,644 | 211,586 | ||||||
816,746 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Sanofi | 47,096 | 4,136,320 | ||||||
Real Estate 0.1% | ||||||||
Unibail-Rodamco SE | 1,662 | 374,341 | ||||||
Retailing 0.1% | ||||||||
PPR | 3,284 | 578,930 | ||||||
Software & Services 0.1% | ||||||||
Cap Gemini S.A. | 10,852 | 456,526 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Alcatel-Lucent * | 217,484 | 222,374 | ||||||
Telecommunication Services 1.2% | ||||||||
France Telecom S.A. | 297,503 | 3,325,342 | ||||||
Vivendi S.A. | 120,426 | 2,467,696 | ||||||
5,793,038 | ||||||||
Transportation 0.2% | ||||||||
Air France-KLM * | 100,225 | 837,871 | ||||||
Utilities 0.7% | ||||||||
EDF S.A. | 24,695 | 522,575 | ||||||
GDF Suez | 88,671 | 2,035,207 | ||||||
Suez Environnement Co. | 25,395 | 269,589 | ||||||
Veolia Environnement S.A. | 76,276 | 754,987 | ||||||
3,582,358 | ||||||||
54,718,497 | ||||||||
Germany 9.0% | ||||||||
Automobiles & Components 1.1% | ||||||||
Bayerische Motoren Werke AG | 16,777 | 1,341,253 | ||||||
Continental AG | 3,042 | 306,177 | ||||||
Daimler AG - Reg’d | 76,336 | 3,575,947 | ||||||
Volkswagen AG | 1,352 | 264,392 | ||||||
5,487,769 | ||||||||
Banks 0.1% | ||||||||
Commerzbank AG * | 166,228 | 319,337 | ||||||
Capital Goods 0.9% | ||||||||
Brenntag AG | 1,130 | 142,582 | ||||||
GEA Group AG | 6,248 | 195,487 | ||||||
Hochtief AG * | 2,616 | 129,946 | ||||||
Kloeckner & Co., SE * | 16,086 | 145,842 | ||||||
MAN SE | 2,828 | 285,791 | ||||||
MTU Aero Engines Holding AG | 1,549 | 130,216 | ||||||
Rheinmetall AG | 2,786 | 133,156 | ||||||
Siemens AG - Reg’d | 33,497 | 3,375,121 | ||||||
4,538,141 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Bilfinger SE | 2,082 | 204,020 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Adidas AG | 6,613 | 563,671 | ||||||
Consumer Services 0.1% | ||||||||
TUI AG * | 28,501 | 267,442 | ||||||
Diversified Financials 0.5% | ||||||||
Deutsche Bank AG - Reg’d | 42,577 | 1,939,428 |
22 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Deutsche Boerse AG | 6,483 | 351,287 | ||||||
2,290,715 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Metro AG | 19,695 | 567,777 | ||||||
Health Care Equipment & Services 0.3% | ||||||||
Celesio AG | 37,562 | 728,191 | ||||||
Fresenius Medical Care AG & Co KGaA | 4,581 | 321,880 | ||||||
Fresenius SE & Co KGaA | 3,886 | 443,106 | ||||||
1,493,177 | ||||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 2,417 | 175,836 | ||||||
Henkel AG & Co. KGaA | 3,219 | 208,427 | ||||||
384,263 | ||||||||
Insurance 1.1% | ||||||||
Allianz SE - Reg’d | 28,745 | 3,570,858 | ||||||
Hannover Rueckversicherung AG - Reg’d | 2,300 | 162,042 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 12,277 | 1,975,412 | ||||||
5,708,312 | ||||||||
Materials 1.5% | ||||||||
Aurubis AG | 3,288 | 208,154 | ||||||
BASF SE | 50,269 | 4,169,830 | ||||||
HeidelbergCement AG | 7,408 | 393,675 | ||||||
K&S AG - Reg’d | 5,530 | 262,092 | ||||||
Lanxess AG | 3,520 | 291,205 | ||||||
Linde AG | 4,408 | 741,789 | ||||||
Salzgitter AG | 6,598 | 285,338 | ||||||
ThyssenKrupp AG | 47,286 | 1,077,532 | ||||||
7,429,615 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
Bayer AG - Reg’d | 30,255 | 2,638,026 | ||||||
Merck KGaA | 1,588 | 203,111 | ||||||
2,841,137 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Infineon Technologies AG | 30,495 | 207,746 | ||||||
Software & Services 0.2% | ||||||||
SAP AG | 13,009 | 948,655 | ||||||
Telecommunication Services 0.7% | ||||||||
Deutsche Telekom AG - Reg’d | 310,803 | 3,545,795 | ||||||
Transportation 0.3% | ||||||||
Deutsche Lufthansa AG - Reg’d | 34,350 | 525,523 | ||||||
Deutsche Post AG - Reg’d | 57,250 | 1,135,037 | ||||||
1,660,560 | ||||||||
Utilities 1.3% | ||||||||
E.ON AG | 181,684 | 4,136,050 | ||||||
RWE AG | 51,343 | 2,349,697 | ||||||
6,485,747 | ||||||||
44,943,879 | ||||||||
Greece 0.6% | ||||||||
Banks 0.2% | ||||||||
Alpha Bank A.E. * | 198,489 | 465,359 | ||||||
National Bank of Greece S.A. * | 217,355 | 509,201 | ||||||
Piraeus Bank S.A. * | 441,793 | 238,477 | ||||||
1,213,037 | ||||||||
Consumer Services 0.1% | ||||||||
OPAP S.A. | 53,289 | 340,605 | ||||||
Energy 0.1% | ||||||||
Motor Oil (Hellas) Corinth Refineries S.A. | 35,476 | 309,054 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca Cola Hellenic Bottling Co., S.A. * | 11,624 | 248,596 | ||||||
Telecommunication Services 0.1% | ||||||||
Hellenic Telecommunications Organization S.A. (OTE) * | 80,928 | 356,876 | ||||||
Utilities 0.1% | ||||||||
Public Power Corp. S.A. * | 47,237 | 271,215 | ||||||
2,739,383 | ||||||||
Hong Kong 0.8% | ||||||||
Banks 0.1% | ||||||||
Hang Seng Bank Ltd. | 19,900 | 305,000 | ||||||
Capital Goods 0.3% | ||||||||
Hutchison Whampoa Ltd. | 76,000 | 744,531 | ||||||
Jardine Matheson Holdings Ltd. | 5,200 | 319,433 | ||||||
Noble Group Ltd. | 240,879 | 257,193 | ||||||
1,321,157 | ||||||||
Insurance 0.1% | ||||||||
AIA Group Ltd. | 81,600 | 321,787 | ||||||
Real Estate 0.1% | ||||||||
Cheung Kong (Holdings) Ltd. | 15,000 | 221,093 | ||||||
Swire Pacific Ltd., Class A | 18,500 | 218,815 | ||||||
Wharf Holdings Ltd. | 26,000 | 177,276 | ||||||
617,184 | ||||||||
Retailing 0.1% | ||||||||
Esprit Holdings Ltd. | 223,584 | 289,101 | ||||||
Li & Fung Ltd. | 130,000 | 216,861 | ||||||
505,962 | ||||||||
Telecommunication Services 0.0% | ||||||||
PCCW Ltd. | 334,000 | 134,557 | ||||||
Transportation 0.0% | ||||||||
Orient Overseas International Ltd. | 19,500 | 122,774 | ||||||
Utilities 0.1% | ||||||||
CLP Holdings Ltd. | 54,000 | 460,101 | ||||||
Hong Kong & China Gas Co., Ltd. | 61,104 | 162,208 | ||||||
Power Assets Holdings Ltd. | 23,000 | 195,443 | ||||||
817,752 | ||||||||
4,146,173 | ||||||||
Ireland 0.7% | ||||||||
Banks 0.1% | ||||||||
Irish Bank Resolution Corp., Ltd. (a)(b)* | 9,106 | — | ||||||
The Governor & Company of the Bank of Ireland * | 2,325,582 | 274,714 | ||||||
274,714 |
See financial notes 23
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 0.0% | ||||||||
DCC plc | 5,701 | 162,898 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Experian plc | 16,530 | 285,985 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Kerry Group plc, Class A | 3,866 | 202,291 | ||||||
Materials 0.3% | ||||||||
CRH plc | 56,487 | 1,051,432 | ||||||
Smurfit Kappa Group plc | 22,660 | 249,835 | ||||||
1,301,267 | ||||||||
Media 0.1% | ||||||||
WPP plc | 41,945 | 542,150 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Shire plc | 4,370 | 122,882 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Seagate Technology plc | 23,900 | 652,948 | ||||||
Transportation 0.0% | ||||||||
Ryanair Holdings plc * | 14,358 | 83,244 | ||||||
3,628,379 | ||||||||
Israel 0.3% | ||||||||
Banks 0.1% | ||||||||
Bank Hapoalim B.M. * | 39,402 | 155,011 | ||||||
Bank Leumi Le-Israel B.M. * | 55,443 | 178,707 | ||||||
333,718 | ||||||||
Materials 0.0% | ||||||||
Israel Chemicals Ltd. | 13,919 | 174,135 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Teva Pharmaceutical Industries Ltd. | 19,568 | 789,401 | ||||||
Telecommunication Services 0.0% | ||||||||
Bezeq Israeli Telecommunication Corp., Ltd. | 163,785 | 199,538 | ||||||
1,496,792 | ||||||||
Italy 4.0% | ||||||||
Automobiles & Components 0.1% | ||||||||
Fiat S.p.A. * | 160,517 | 785,570 | ||||||
Banks 1.1% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. * | 1,064,330 | 294,214 | ||||||
Banca Popolare dell’Emilia Romagna Scrl | 29,580 | 176,269 | ||||||
Banca Popolare di Milano Scarl * | 272,330 | 150,071 | ||||||
Banco Popolare Scarl * | 267,079 | 426,199 | ||||||
Intesa Sanpaolo S.p.A. | 1,229,513 | 1,980,613 | ||||||
Intesa Sanpaolo S.p.A. - RSP | 82,866 | 109,635 | ||||||
UniCredit S.p.A. * | 506,718 | 2,241,300 | ||||||
Unione di Banche Italiane S.C.P.A. | 88,217 | 347,505 | ||||||
5,725,806 | ||||||||
Capital Goods 0.2% | ||||||||
Fiat Industrial S.p.A. | 19,440 | 210,710 | ||||||
Finmeccanica S.p.A. * | 91,882 | 455,681 | ||||||
Prysmian S.p.A. | 9,920 | 191,267 | ||||||
857,658 | ||||||||
Diversified Financials 0.1% | ||||||||
Exor S.p.A. | 3,431 | 88,545 | ||||||
Mediobanca S.p.A. | 35,528 | 203,138 | ||||||
291,683 | ||||||||
Energy 1.0% | ||||||||
Eni S.p.A. | 206,430 | 4,750,142 | ||||||
Saipem S.p.A. | 5,015 | 225,971 | ||||||
Tenaris S.A. | 16,113 | 302,031 | ||||||
5,278,144 | ||||||||
Insurance 0.2% | ||||||||
Assicurazioni Generali S.p.A. | 70,416 | 1,146,656 | ||||||
Materials 0.0% | ||||||||
Italcementi S.p.A. | 22,129 | 111,996 | ||||||
Italcementi S.p.A. - RSP | 17,634 | 45,135 | ||||||
157,131 | ||||||||
Media 0.1% | ||||||||
Mediaset S.p.A. | 146,108 | 256,655 | ||||||
Telecommunication Services 0.5% | ||||||||
Telecom Italia S.p.A. | 1,645,233 | 1,517,916 | ||||||
Telecom Italia S.p.A. - RSP | 998,996 | 799,961 | ||||||
2,317,877 | ||||||||
Transportation 0.1% | ||||||||
Atlantia S.p.A. | 15,642 | 258,719 | ||||||
Utilities 0.6% | ||||||||
A2A S.p.A. | 168,696 | 83,126 | ||||||
Enel S.p.A. | 705,699 | 2,657,483 | ||||||
Snam S.p.A. | 35,990 | 159,484 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 41,198 | 154,896 | ||||||
3,054,989 | ||||||||
20,130,888 | ||||||||
Japan 17.7% | ||||||||
Automobiles & Components 2.5% | ||||||||
Aisin Seiki Co., Ltd. | 12,900 | 376,736 | ||||||
Bridgestone Corp. | 36,300 | 847,932 | ||||||
Daihatsu Motor Co., Ltd. | 10,000 | 175,013 | ||||||
Denso Corp. | 26,100 | 819,464 | ||||||
Fuji Heavy Industries Ltd. | 36,000 | 347,044 | ||||||
Honda Motor Co., Ltd. | 76,900 | 2,311,862 | ||||||
Isuzu Motors Ltd. | 45,000 | 238,031 | ||||||
Mazda Motor Corp. * | 268,000 | 319,649 | ||||||
NHK Spring Co., Ltd. | 12,000 | 100,223 | ||||||
Nissan Motors Co., Ltd. | 133,900 | 1,119,853 | ||||||
Stanley Electric Co., Ltd. | 9,000 | 123,855 | ||||||
Suzuki Motor Corp. | 22,400 | 508,005 | ||||||
Toyota Industries Corp. | 10,300 | 294,700 | ||||||
Toyota Motor Corp. | 129,400 | 4,989,295 | ||||||
Yamaha Motor Co., Ltd. | 21,200 | 202,420 | ||||||
12,774,082 | ||||||||
Banks 0.9% | ||||||||
Mitsubishi UFJ Financial Group, Inc. | 360,134 | 1,629,235 | ||||||
Mizuho Financial Group, Inc. | 635,616 | 994,535 | ||||||
Resona Holdings, Inc. | 62,758 | 271,566 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 48,610 | 1,485,375 | ||||||
The Bank of Yokohama Ltd. | 32,000 | 147,265 | ||||||
4,527,976 |
24 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 2.4% | ||||||||
Asahi Glass Co., Ltd. | 68,000 | 462,253 | ||||||
Daikin Industries Ltd. | 11,400 | 315,577 | ||||||
Fanuc Corp. | 2,300 | 366,426 | ||||||
Fujikura Ltd. | 46,000 | 127,999 | ||||||
Furukawa Electric Co., Ltd. * | 75,000 | 149,564 | ||||||
Hanwa Co., Ltd. | 35,000 | 122,347 | ||||||
IHI Corp. | 60,000 | 126,358 | ||||||
ITOCHU Corp. | 53,600 | 536,512 | ||||||
JGC Corp. | 6,000 | 206,432 | ||||||
JTEKT Corp. | 15,600 | 117,149 | ||||||
Kajima Corp. | 58,000 | 160,630 | ||||||
Kawasaki Heavy Industries Ltd. | 75,000 | 154,284 | ||||||
Komatsu Ltd. | 27,100 | 567,870 | ||||||
Kubota Corp. | 35,000 | 357,878 | ||||||
LIXIL Group Corp. | 14,500 | 320,570 | ||||||
Makita Corp. | 4,700 | 186,077 | ||||||
Marubeni Corp. | 76,000 | 492,471 | ||||||
Mitsubishi Corp. | 61,300 | 1,094,385 | ||||||
Mitsubishi Electric Corp. | 90,000 | 672,721 | ||||||
Mitsubishi Heavy Industries Ltd. | 150,000 | 631,812 | ||||||
Mitsui & Co., Ltd. | 70,900 | 999,351 | ||||||
Nagase & Co., Ltd. | 12,000 | 128,011 | ||||||
NGK Insulators Ltd. | 11,000 | 122,649 | ||||||
Nidec Corp. | 2,300 | 163,678 | ||||||
Nippon Sheet Glass Co., Ltd. | 143,000 | 118,442 | ||||||
NSK Ltd. | 21,000 | 115,343 | ||||||
Obayashi Corp. | 41,000 | 183,420 | ||||||
Shimizu Corp. | 51,000 | 170,622 | ||||||
SMC Corp. | 1,300 | 204,956 | ||||||
Sojitz Corp. | 285,700 | 354,667 | ||||||
Sumitomo Corp. | 49,400 | 673,460 | ||||||
Sumitomo Electric Industries Ltd. | 54,000 | 580,915 | ||||||
Sumitomo Heavy Industries Ltd. | 37,000 | 132,652 | ||||||
Taisei Corp. | 74,000 | 204,031 | ||||||
Toyota Tsusho Corp. | 23,800 | 519,858 | ||||||
11,841,370 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Dai Nippon Printing Co., Ltd. | 61,000 | 432,249 | ||||||
Secom Co., Ltd. | 7,400 | 376,912 | ||||||
Toppan Printing Co., Ltd. | 57,000 | 329,441 | ||||||
1,138,602 | ||||||||
Consumer Durables & Apparel 0.9% | ||||||||
Casio Computer Co., Ltd. (c) | 19,500 | 149,223 | ||||||
Namco Bandai Holdings, Inc. | 13,700 | 215,268 | ||||||
Nikon Corp. | 9,000 | 229,584 | ||||||
Panasonic Corp. | 253,050 | 1,534,890 | ||||||
Sega Sammy Holdings, Inc. | 8,400 | 158,327 | ||||||
Sekisui Chemical Co., Ltd. | 25,000 | 205,316 | ||||||
Sekisui House Ltd. | 43,000 | 439,674 | ||||||
Sharp Corp. (c) | 128,000 | 276,132 | ||||||
Shimano, Inc. | 2,100 | 132,384 | ||||||
Sony Corp. | 90,400 | 1,070,371 | ||||||
Yamaha Corp. | 14,200 | 127,606 | ||||||
4,538,775 | ||||||||
Consumer Services 0.1% | ||||||||
Benesse Holdings, Inc. | 2,600 | 125,238 | ||||||
Oriental Land Co., Ltd. | 1,000 | 136,405 | ||||||
261,643 | ||||||||
Diversified Financials 0.2% | ||||||||
Credit Saison Co., Ltd. | 8,000 | 175,793 | ||||||
Daiwa Securities Group, Inc. | 51,000 | 203,447 | ||||||
Nomura Holdings, Inc. | 68,200 | 246,533 | ||||||
ORIX Corp. | 4,010 | 411,867 | ||||||
1,037,640 | ||||||||
Energy 0.4% | ||||||||
Cosmo Oil Co., Ltd. | 95,000 | 168,969 | ||||||
Idemitsu Kosan Co., Ltd. | 3,600 | 309,840 | ||||||
Inpex Corp. | 89 | 507,021 | ||||||
JX Holdings, Inc. | 160,200 | 853,235 | ||||||
Showa Shell Sekiyu K.K. | 29,100 | 162,005 | ||||||
TonenGeneral Sekiyu K.K. | 24,000 | 217,803 | ||||||
2,218,873 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Aeon Co., Ltd. | 53,300 | 581,318 | ||||||
Lawson, Inc. | 1,800 | 132,282 | ||||||
Seven & I Holdings Co., Ltd. | 48,500 | 1,495,711 | ||||||
Uny Co., Ltd. | 16,700 | 118,839 | ||||||
2,328,150 | ||||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Ajinomoto Co., Inc. | 28,000 | 427,502 | ||||||
Asahi Group Holdings Ltd. | 14,800 | 337,783 | ||||||
Japan Tobacco, Inc. | 19,300 | 533,688 | ||||||
Kikkoman Corp. | 10,000 | 132,778 | ||||||
Kirin Holdings Co., Ltd. | 44,000 | 552,338 | ||||||
Meiji Holdings Co., Ltd. | 6,000 | 274,524 | ||||||
Nippon Meat Packers, Inc. | 16,000 | 198,562 | ||||||
Nisshin Seifun Group, Inc. | 11,000 | 137,460 | ||||||
Toyo Suisan Kaisha Ltd. | 5,000 | 124,598 | ||||||
Yamazaki Baking Co., Ltd. | 10,000 | 120,189 | ||||||
2,839,422 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Alfresa Holdings Corp. | 4,100 | 185,353 | ||||||
Medipal Holdings Corp. | 18,400 | 234,332 | ||||||
Olympus Corp. * | 9,000 | 157,251 | ||||||
Suzuken Co., Ltd. | 7,800 | 246,220 | ||||||
Terumo Corp. | 4,100 | 176,590 | ||||||
999,746 | ||||||||
Household & Personal Products 0.2% | ||||||||
Kao Corp. | 21,100 | 592,732 | ||||||
Shiseido Co., Ltd. | 14,500 | 183,502 | ||||||
776,234 | ||||||||
Insurance 0.2% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 14,490 | 245,733 | ||||||
NKSJ Holdings, Inc. | 6,800 | 123,961 | ||||||
T&D Holdings, Inc. | 11,450 | 125,117 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 229 | 264,031 | ||||||
Tokio Marine Holdings, Inc. | 17,600 | 465,874 | ||||||
1,224,716 | ||||||||
Materials 1.6% | ||||||||
Nippon Steel & Sumitomo Metal Corp. | 624,000 | 1,377,369 | ||||||
Asahi Kasei Corp. | 82,000 | 451,103 | ||||||
DIC Corp. | 75,000 | 138,291 | ||||||
Hitachi Chemical Co., Ltd. | 7,200 | 101,545 | ||||||
JFE Holdings, Inc. | 65,700 | 927,285 |
See financial notes 25
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
JSR Corp. | 7,800 | 133,797 | ||||||
Kaneka Corp. | 24,000 | 117,079 | ||||||
Kobe Steel Ltd. | 314,000 | 275,647 | ||||||
Kuraray Co., Ltd. | 14,200 | 165,041 | ||||||
Mitsubishi Chemical Holdings Corp. | 90,000 | 356,451 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 21,000 | 103,757 | ||||||
Mitsubishi Materials Corp. | 71,000 | 206,432 | ||||||
Mitsui Chemicals, Inc. | 106,000 | 219,127 | ||||||
Mitsui Mining & Smelting Co., Ltd. | 50,000 | 105,843 | ||||||
Nippon Paper Group, Inc. | 14,243 | 162,889 | ||||||
Nitto Denko Corp. | 7,300 | 331,624 | ||||||
Oji Holdings Corp. | 65,000 | 190,606 | ||||||
Shin-Etsu Chemical Co., Ltd. | 13,900 | 784,838 | ||||||
Showa Denko K.K. | 92,000 | 140,729 | ||||||
Sumitomo Chemical Co., Ltd. | 112,000 | 314,751 | ||||||
Sumitomo Metal Mining Co., Ltd. | 29,000 | 381,925 | ||||||
Taiheiyo Cement Corp. | 65,000 | 138,571 | ||||||
Teijin Ltd. | 86,000 | 197,225 | ||||||
Toray Industries, Inc. | 51,000 | 297,695 | ||||||
Tosoh Corp. | 53,000 | 103,754 | ||||||
Toyo Seikan Kaisha Ltd. | 19,100 | 203,058 | ||||||
Ube Industries Ltd. | 64,000 | 146,174 | ||||||
8,072,606 | ||||||||
Media 0.1% | ||||||||
Dentsu, Inc. | 12,801 | 302,381 | ||||||
Hakuhodo DY Holdings, Inc. | 3,380 | 202,559 | ||||||
504,940 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Astellas Pharma, Inc. | 16,700 | 830,617 | ||||||
Daiichi Sankyo Co., Ltd. | 27,100 | 414,794 | ||||||
Eisai Co., Ltd. | 7,000 | 311,441 | ||||||
Ono Pharmaceutical Co., Ltd. | 2,400 | 144,910 | ||||||
Otsuka Holdings Co., Ltd. | 12,000 | 369,931 | ||||||
Shionogi & Co., Ltd. | 10,000 | 166,019 | ||||||
Takeda Pharmaceutical Co., Ltd. | 28,900 | 1,343,296 | ||||||
3,581,008 | ||||||||
Real Estate 0.3% | ||||||||
Daito Trust Construction Co., Ltd. | 3,300 | 333,091 | ||||||
Daiwa House Industry Co., Ltd. | 25,000 | 379,131 | ||||||
Mitsubishi Estate Co., Ltd. | 20,000 | 395,811 | ||||||
Mitsui Fudosan Co., Ltd. | 21,000 | 424,510 | ||||||
Sumitomo Realty & Development Co., Ltd. | 8,500 | 234,873 | ||||||
1,767,416 | ||||||||
Retailing 0.3% | ||||||||
Edion Corp. | 22,200 | 94,878 | ||||||
Fast Retailing Co., Ltd. | 700 | 155,869 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 23,400 | 229,053 | ||||||
J. Front Retailing Co., Ltd. | 39,000 | 202,808 | ||||||
Marui Group Co., Ltd. | 18,300 | 131,639 | ||||||
Shimamura Co., Ltd. | 1,500 | 156,350 | ||||||
Takashimaya Co., Ltd. | 22,000 | 144,701 | ||||||
Yamada Denki Co., Ltd. | 8,600 | 373,082 | ||||||
1,488,380 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Rohm Co., Ltd. | 6,800 | 219,615 | ||||||
Tokyo Electron Ltd. | 6,900 | 310,709 | ||||||
530,324 | ||||||||
Software & Services 0.3% | ||||||||
Konami Corp. | 4,700 | 107,896 | ||||||
Nintendo Co., Ltd. | 7,430 | 959,210 | ||||||
NTT Data Corp. | 77 | 250,965 | ||||||
1,318,071 | ||||||||
Technology Hardware & Equipment 2.0% | ||||||||
Brother Industries Ltd. | 15,400 | 145,238 | ||||||
Canon, Inc. | 53,500 | 1,738,732 | ||||||
FUJIFILM Holdings Corp. | 43,700 | 737,672 | ||||||
Fujitsu Ltd. | 207,000 | 796,402 | ||||||
Hitachi High-Technologies Corp. | 5,400 | 118,346 | ||||||
Hitachi Ltd. | 269,000 | 1,426,554 | ||||||
Hoya Corp. | 16,400 | 332,141 | ||||||
Ibiden Co., Ltd. | 8,800 | 110,974 | ||||||
Keyence Corp. | 473 | 125,576 | ||||||
Konica Minolta Holdings, Inc. | 45,400 | 302,040 | ||||||
Kyocera Corp. | 7,100 | 624,506 | ||||||
Mitsumi Electric Co., Ltd. * | 17,600 | 84,712 | ||||||
Murata Manufacturing Co., Ltd. | 6,400 | 311,332 | ||||||
NEC Corp. * | 429,000 | 822,844 | ||||||
Nippon Electric Glass Co., Ltd. | 30,000 | 152,690 | ||||||
Omron Corp. | 10,600 | 211,325 | ||||||
Ricoh Co., Ltd. | 66,000 | 552,346 | ||||||
Seiko Epson Corp. | 22,600 | 125,682 | ||||||
TDK Corp. | 7,200 | 270,748 | ||||||
Toshiba Corp. | 217,000 | 806,304 | ||||||
9,796,164 | ||||||||
Telecommunication Services 1.0% | ||||||||
KDDI Corp. | 17,500 | 1,359,404 | ||||||
Nippon Telegraph & Telephone Corp. | 44,104 | 2,016,792 | ||||||
NTT DoCoMo, Inc. | 715 | 1,036,054 | ||||||
Softbank Corp. | 20,500 | 647,437 | ||||||
5,059,687 | ||||||||
Transportation 1.0% | ||||||||
Central Japan Railway Co. | 8,300 | 714,248 | ||||||
East Japan Railway Co. | 16,118 | 1,106,287 | ||||||
Hankyu Hanshin Holdings, Inc. | 44,000 | 243,579 | ||||||
Kawasaki Kisen Kaisha Ltd. * | 132,000 | 167,318 | ||||||
Kintetsu Corp. | 37,000 | 145,002 | ||||||
Mitsui O.S.K. Lines, Ltd. | 153,000 | 366,730 | ||||||
Nagoya Railroad Co., Ltd. | 44,000 | 120,129 | ||||||
Nippon Express Co., Ltd. | 96,000 | 351,310 | ||||||
Nippon Yusen K.K. | 210,000 | 400,289 | ||||||
Seino Holdings Co., Ltd. | 21,000 | 121,082 | ||||||
Tobu Railway Co., Ltd. | 26,000 | 138,162 | ||||||
Tokyu Corp. | 45,000 | 228,901 | ||||||
West Japan Railway Co. | 9,363 | 408,767 | ||||||
Yamato Holdings Co., Ltd. | 23,000 | 350,374 | ||||||
4,862,178 | ||||||||
Utilities 1.0% | ||||||||
Chubu Electric Power Co., Inc. | 53,800 | 554,367 | ||||||
Electric Power Development Co., Ltd. | 7,700 | 197,226 | ||||||
Hokkaido Electric Power Co., Inc. | 17,000 | 140,003 | ||||||
Hokuriku Electric Power Co. | 12,800 | 127,124 | ||||||
Kyushu Electric Power Co., Inc. | 49,000 | 371,555 | ||||||
Osaka Gas Co., Ltd. | 99,000 | 408,031 | ||||||
Shikoku Electric Power Co., Inc. | 10,900 | 116,536 | ||||||
The Chugoku Electric Power Co., Inc. | 22,000 | 236,652 | ||||||
The Kansai Electric Power Co., Inc. | 73,200 | 563,014 | ||||||
Tohoku Electric Power Co., Inc. * | 59,800 | 440,492 |
26 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tokyo Electric Power Co., Inc. * | 705,400 | 1,151,535 | ||||||
Tokyo Gas Co., Ltd. | 108,000 | 572,284 | ||||||
4,878,819 | ||||||||
88,366,822 | ||||||||
Luxembourg 0.0% | ||||||||
Telecommunication Services 0.0% | ||||||||
Millicom International Cellular S.A. SDR | 1,400 | 120,868 | ||||||
Netherlands 6.2% | ||||||||
Capital Goods 0.4% | ||||||||
European Aeronautic Defence & Space Co., N.V. | 11,395 | 405,547 | ||||||
Koninklijke BAM Groep N.V. | 43,137 | 160,569 | ||||||
Koninklijke Philips Electronics N.V. | 64,399 | 1,612,941 | ||||||
2,179,057 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Randstad Holding N.V. | 7,498 | 245,150 | ||||||
Diversified Financials 1.5% | ||||||||
ING Groep N.V. CVA * | 831,745 | 7,400,972 | ||||||
SNS Reaal N.V. (c)* | 104,590 | 154,001 | ||||||
7,554,973 | ||||||||
Energy 1.9% | ||||||||
Fugro N.V. CVA | 2,683 | 181,568 | ||||||
Royal Dutch Shell plc, Class A | 267,907 | 9,184,191 | ||||||
SBM Offshore N.V. * | 7,741 | 101,336 | ||||||
9,467,095 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Koninklijke Ahold N.V. | 106,436 | 1,355,414 | ||||||
Food, Beverage & Tobacco 0.5% | ||||||||
CSM N.V. | 8,905 | 181,893 | ||||||
Heineken Holding N.V. | 4,566 | 231,988 | ||||||
Heineken N.V. | 6,550 | 404,219 | ||||||
Nutreco N.V. | 2,005 | 150,186 | ||||||
Unilever N.V. CVA | 46,355 | 1,703,760 | ||||||
�� | ||||||||
2,672,046 | ||||||||
Insurance 0.2% | ||||||||
Aegon N.V. | 169,212 | 946,344 | ||||||
Delta Lloyd N.V. | 11,220 | 186,594 | ||||||
1,132,938 | ||||||||
Materials 0.7% | ||||||||
Akzo Nobel N.V. | 18,831 | 1,024,935 | ||||||
APERAM | 10,253 | 148,689 | ||||||
ArcelorMittal | 119,356 | 1,764,618 | ||||||
Koninklijke DSM N.V. | 10,288 | 529,049 | ||||||
3,467,291 | ||||||||
Media 0.1% | ||||||||
Reed Elsevier N.V. | 13,184 | 176,975 | ||||||
Wolters Kluwer N.V. | 14,881 | 287,905 | ||||||
464,880 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASML Holding N.V. | 5,383 | 295,916 | ||||||
Telecommunication Services 0.2% | ||||||||
Koninklijke (Royal) KPN N.V. | 135,398 | 853,501 | ||||||
VimpelCom Ltd. ADR | 28,800 | 317,376 | ||||||
1,170,877 | ||||||||
Transportation 0.2% | ||||||||
PostNL N.V. * | 199,530 | 787,405 | ||||||
TNT Express N.V. | 8,905 | 93,835 | ||||||
881,240 | ||||||||
30,886,877 | ||||||||
New Zealand 0.1% | ||||||||
Materials 0.0% | ||||||||
Fletcher Building Ltd. | 38,782 | 224,313 | ||||||
Telecommunication Services 0.1% | ||||||||
Telecom Corp. of New Zealand Ltd. | 211,139 | 417,395 | ||||||
641,708 | ||||||||
Norway 0.9% | ||||||||
Banks 0.1% | ||||||||
DnB A.S.A. | 33,395 | 417,491 | ||||||
Capital Goods 0.1% | ||||||||
Orkla A.S.A. | 49,382 | 391,186 | ||||||
Energy 0.4% | ||||||||
Aker Solutions A.S.A. | 8,750 | 172,431 | ||||||
Seadrill Ltd. | 4,200 | 170,185 | ||||||
Statoil A.S.A. | 75,194 | 1,851,949 | ||||||
2,194,565 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Marine Harvest * | 178,741 | 140,244 | ||||||
Materials 0.2% | ||||||||
Norsk Hydro A.S.A. | 109,410 | 492,566 | ||||||
Yara International A.S.A. | 6,434 | 303,227 | ||||||
795,793 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. | 30,176 | 593,505 | ||||||
4,532,784 | ||||||||
Portugal 0.3% | ||||||||
Banks 0.1% | ||||||||
Banco Comercial Portugues S.A. - Reg’d * | 1,528,587 | 138,689 | ||||||
Banco Espirito Santo, S.A. - Reg’d * | 111,058 | 108,087 | ||||||
246,776 | ||||||||
Energy 0.0% | ||||||||
Galp Energia, SGPS, S.A. | 8,155 | 130,544 | ||||||
Telecommunication Services 0.1% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d | 95,580 | 480,801 | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 167,217 | 454,517 | ||||||
1,312,638 |
See financial notes 27
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Singapore 0.7% | ||||||||
Banks 0.2% | ||||||||
DBS Group Holdings Ltd. | 34,056 | 386,754 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 44,897 | 333,691 | ||||||
United Overseas Bank Ltd. | 27,952 | 416,842 | ||||||
1,137,287 | ||||||||
Capital Goods 0.1% | ||||||||
Fraser & Neave Ltd. | 24,000 | 179,811 | ||||||
Keppel Corp., Ltd. | 32,300 | 281,025 | ||||||
SembCorp Industries Ltd. | 30,000 | 133,142 | ||||||
593,978 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Wilmar International Ltd. | 49,166 | 124,107 | ||||||
Media 0.1% | ||||||||
Singapore Press Holdings Ltd. | 42,000 | 138,872 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Flextronics International Ltd. * | 57,000 | 328,890 | ||||||
Venture Corp., Ltd. | 22,000 | 137,701 | ||||||
466,591 | ||||||||
Telecommunication Services 0.1% | ||||||||
Singapore Telecommunications Ltd. | 213,486 | 562,325 | ||||||
Transportation 0.1% | ||||||||
ComfortDelGro Corp., Ltd. | 98,000 | 135,521 | ||||||
Singapore Airlines Ltd. | 37,270 | 323,003 | ||||||
458,524 | ||||||||
3,481,684 | ||||||||
Spain 3.9% | ||||||||
Banks 1.8% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 352,597 | 2,946,281 | ||||||
Banco de Sabadell S.A. * | 116,093 | 283,086 | ||||||
Banco Popular Espanol S.A. * | 145,761 | 227,938 | ||||||
Banco Santander S.A. | 715,646 | 5,388,245 | ||||||
Bankia S.A. * | 64,913 | 97,979 | ||||||
CaixaBank | 34,196 | 129,871 | ||||||
9,073,400 | ||||||||
Capital Goods 0.2% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 14,468 | 309,190 | ||||||
Ferrovial S.A. | 14,557 | 205,986 | ||||||
Fomento de Construcciones y Contratas S.A. | 9,013 | 118,081 | ||||||
633,257 | ||||||||
Energy 0.3% | ||||||||
Repsol S.A. | 81,109 | 1,625,486 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 17,553 | 106,339 | ||||||
Retailing 0.1% | ||||||||
Inditex S.A. | 3,736 | 477,058 | ||||||
Telecommunication Services 0.9% | ||||||||
Telefonica S.A. | 346,662 | 4,575,517 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 14,792 | 223,416 | ||||||
Utilities 0.5% | ||||||||
Acciona S.A. | 4,090 | 251,396 | ||||||
Enagas S.A. | 6,858 | 136,423 | ||||||
Endesa S.A. | 10,660 | 227,094 | ||||||
Gas Natural SDG S.A. | 18,631 | 289,464 | ||||||
Iberdrola S.A. | 285,124 | 1,476,645 | ||||||
Red Electrica Corp. S.A. | 3,132 | 146,953 | ||||||
2,527,975 | ||||||||
19,242,448 | ||||||||
Sweden 2.4% | ||||||||
Automobiles & Components 0.1% | ||||||||
Autoliv, Inc. | 4,400 | 253,440 | ||||||
Banks 0.5% | ||||||||
Nordea Bank AB | 84,657 | 769,502 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 64,056 | 531,523 | ||||||
Svenska Handelsbanken AB, A Shares | 18,617 | 638,883 | ||||||
Swedbank AB, A Shares | 20,988 | 389,841 | ||||||
2,329,749 | ||||||||
Capital Goods 0.9% | ||||||||
Alfa Laval AB | 8,818 | 153,408 | ||||||
Assa Abloy AB, B Shares | 8,286 | 276,054 | ||||||
Atlas Copco AB, A Shares | 24,672 | 606,715 | ||||||
Atlas Copco AB, B Shares | 11,710 | 256,779 | ||||||
NCC AB, B Shares | 8,159 | 152,876 | ||||||
Sandvik AB | 45,052 | 626,020 | ||||||
Scania AB, B Shares | 12,583 | 240,092 | ||||||
Skanska AB, B Shares | 27,004 | 423,019 | ||||||
SKF AB, B Shares | 16,884 | 381,034 | ||||||
Trelleborg AB, B Shares | 11,811 | 128,702 | ||||||
Volvo AB, A Shares | 19,565 | 263,427 | ||||||
Volvo AB, B Shares | 56,395 | 761,006 | ||||||
4,269,132 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Securitas AB, B Shares | 26,224 | 190,982 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, B Shares | 18,348 | 470,363 | ||||||
Husqvarna AB, B Shares | 29,948 | 173,957 | ||||||
644,320 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Swedish Match AB | 5,332 | 181,793 | ||||||
Household & Personal Products 0.1% | ||||||||
Svenska Cellulosa AB, B Shares | 39,214 | 764,524 | ||||||
Materials 0.1% | ||||||||
Boliden AB | 17,460 | 305,963 | ||||||
SSAB AB, A Shares | 24,619 | 176,365 | ||||||
SSAB AB, B Shares | 8,242 | 50,973 | ||||||
533,301 | ||||||||
Retailing 0.1% | ||||||||
Hennes & Mauritz AB, B Shares | 21,889 | 742,179 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 143,852 | 1,274,395 |
28 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Telecommunication Services 0.2% | ||||||||
Tele2 AB, B Shares | 21,618 | 360,866 | ||||||
TeliaSonera AB | 99,827 | 656,285 | ||||||
1,017,151 | ||||||||
12,200,966 | ||||||||
Switzerland 5.4% | ||||||||
Capital Goods 0.5% | ||||||||
ABB Ltd. - Reg’d * | 58,039 | 1,048,179 | ||||||
Foster Wheeler AG * | 6,400 | 142,528 | ||||||
Geberit AG - Reg’d * | 848 | 175,150 | ||||||
Schindler Holding AG | 992 | 130,921 | ||||||
Schindler Holding AG - Reg’d | 193 | 24,972 | ||||||
Wolseley plc | 19,842 | 869,821 | ||||||
2,391,571 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Adecco S.A. - Reg’d * | 10,576 | 512,856 | ||||||
SGS S.A. - Reg’d | 107 | 226,831 | ||||||
739,687 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 8,172 | 530,346 | ||||||
The Swatch Group AG - Bearer Shares | 514 | 212,759 | ||||||
The Swatch Group AG - Reg’d | 832 | 60,516 | ||||||
803,621 | ||||||||
Diversified Financials 0.4% | ||||||||
Credit Suisse Group AG - Reg’d * | 53,948 | 1,254,579 | ||||||
GAM Holding AG * | 8,842 | 123,659 | ||||||
UBS AG - Reg’d * | 40,382 | 605,875 | ||||||
1,984,113 | ||||||||
Energy 0.3% | ||||||||
Noble Corp. | 9,700 | 366,078 | ||||||
Transocean Ltd. * | 18,013 | 823,985 | ||||||
Weatherford International Ltd. * | 30,600 | 345,780 | ||||||
1,535,843 | ||||||||
Food, Beverage & Tobacco 1.1% | ||||||||
Nestle S.A. - Reg’d | 86,813 | 5,511,599 | ||||||
Insurance 0.6% | ||||||||
Baloise Holding AG - Reg’d | 2,317 | 193,391 | ||||||
Swiss Life Holding AG - Reg’d * | 2,599 | 328,220 | ||||||
Swiss Re AG * | 11,996 | 830,091 | ||||||
Zurich Insurance Group AG * | 7,135 | 1,758,918 | ||||||
3,110,620 | ||||||||
Materials 0.5% | ||||||||
Clariant AG - Reg’d * | 14,373 | 154,021 | ||||||
Givaudan S.A. - Reg’d * | 166 | 166,048 | ||||||
Glencore International plc | 52,687 | 292,373 | ||||||
Holcim Ltd. - Reg’d * | 12,678 | 865,225 | ||||||
Sika AG | 72 | 150,035 | ||||||
Syngenta AG - Reg’d | 1,683 | 656,184 | ||||||
2,283,886 | ||||||||
Media 0.0% | ||||||||
Informa plc | 21,190 | 137,163 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.4% | ||||||||
Lonza Group AG - Reg’d * | 2,658 | 134,809 | ||||||
Novartis AG - Reg’d | 61,676 | 3,719,096 | ||||||
Roche Holding AG | 15,063 | 2,901,512 | ||||||
Roche Holding AG - Bearer Shares | 577 | 114,497 | ||||||
6,869,914 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
STMicroelectronics N.V. | 71,813 | 423,336 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
TE Connectivity Ltd. | 17,400 | 559,932 | ||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 914 | 380,463 | ||||||
Transportation 0.0% | ||||||||
Kuehne & Nagel International AG - Reg’d | 1,601 | 187,290 | ||||||
26,919,038 | ||||||||
United Kingdom 20.0% | ||||||||
Automobiles & Components 0.0% | ||||||||
GKN plc | 64,860 | 218,150 | ||||||
Banks 2.8% | ||||||||
Barclays plc | 812,155 | 3,003,130 | ||||||
Bradford & Bingley plc (a)(b)* | 87,225 | — | ||||||
HSBC Holdings plc | 779,778 | 7,688,052 | ||||||
Lloyds Banking Group plc * | 2,402,341 | 1,581,946 | ||||||
Royal Bank of Scotland Group plc * | 155,415 | 693,942 | ||||||
Standard Chartered plc | 38,273 | 906,172 | ||||||
13,873,242 | ||||||||
Capital Goods 0.7% | ||||||||
BAE Systems plc | 200,422 | 1,011,579 | ||||||
Balfour Beatty plc | 43,515 | 221,813 | ||||||
Bunzl plc | 12,735 | 210,947 | ||||||
Carillion plc | 28,212 | 140,417 | ||||||
Cobham plc | 36,458 | 126,750 | ||||||
Cookson Group plc | 13,032 | 123,111 | ||||||
IMI plc | 11,448 | 176,755 | ||||||
Meggitt plc | 18,091 | 112,835 | ||||||
Rolls-Royce Holdings plc * | 43,855 | 606,049 | ||||||
SIG plc | 87,238 | 147,788 | ||||||
Smiths Group plc | 15,556 | 265,801 | ||||||
Travis Perkins plc | 12,852 | 224,587 | ||||||
3,368,432 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Aggreko plc | 3,195 | 111,122 | ||||||
Capita plc | 16,334 | 190,849 | ||||||
G4S plc | 63,020 | 265,225 | ||||||
Hays plc | 143,170 | 188,776 | ||||||
Rentokil Initial plc | 109,152 | 155,372 | ||||||
Serco Group plc | 15,895 | 145,497 | ||||||
1,056,841 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Barratt Developments plc * | 112,244 | 344,083 | ||||||
Burberry Group plc | 7,401 | 139,642 | ||||||
Persimmon plc | 24,028 | 309,164 | ||||||
Taylor Wimpey plc | 118,810 | 117,427 | ||||||
910,316 | ||||||||
Consumer Services 0.6% | ||||||||
Carnival plc | 11,874 | 472,970 | ||||||
Compass Group plc | 69,459 | 763,216 |
See financial notes 29
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Enterprise Inns plc * | 228,797 | 269,014 | ||||||
InterContinental Hotels Group plc | 7,063 | 174,751 | ||||||
Thomas Cook Group plc * | 1,017,694 | 337,166 | ||||||
TUI Travel plc | 85,637 | 347,454 | ||||||
Whitbread plc | 9,038 | 343,472 | ||||||
William Hill plc | 32,406 | 177,065 | ||||||
2,885,108 | ||||||||
Diversified Financials 0.1% | ||||||||
ICAP plc | 23,061 | 121,324 | ||||||
Man Group plc * | 254,822 | 323,819 | ||||||
445,143 | ||||||||
Energy 4.5% | ||||||||
AMEC plc | 10,702 | 183,622 | ||||||
BG Group plc | 83,569 | 1,551,615 | ||||||
BP plc | 1,928,270 | 13,770,924 | ||||||
Ensco plc, Class A | 3,800 | 219,716 | ||||||
John Wood Group plc | 11,868 | 163,122 | ||||||
Royal Dutch Shell plc, B Shares | 196,692 | 6,957,468 | ||||||
22,846,467 | ||||||||
Food & Staples Retailing 0.9% | ||||||||
J. Sainsbury plc | 157,063 | 900,538 | ||||||
Tesco plc | 512,724 | 2,653,054 | ||||||
WM Morrison Supermarkets plc | 190,400 | 824,384 | ||||||
4,377,976 | ||||||||
Food, Beverage & Tobacco 1.5% | ||||||||
Associated British Foods plc | 15,123 | 338,430 | ||||||
British American Tobacco plc | 45,303 | 2,247,009 | ||||||
Diageo plc | 58,319 | 1,667,253 | ||||||
Imperial Tobacco Group plc | 23,439 | 886,449 | ||||||
SABMiller plc | 17,443 | 748,619 | ||||||
Tate & Lyle plc | 20,147 | 236,142 | ||||||
Unilever plc | 35,757 | 1,333,848 | ||||||
7,457,750 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Smith & Nephew plc | 27,504 | 290,859 | ||||||
Household & Personal Products 0.2% | ||||||||
Reckitt Benckiser Group plc | 14,058 | 851,692 | ||||||
Insurance 0.9% | ||||||||
Amlin plc | 26,398 | 159,133 | ||||||
Aviva plc | 251,072 | 1,344,589 | ||||||
Legal & General Group plc | 183,780 | 398,384 | ||||||
Old Mutual plc | 206,500 | 574,784 | ||||||
Prudential plc | 51,371 | 705,508 | ||||||
Resolution Ltd. | 83,885 | 295,748 | ||||||
RSA Insurance Group plc | 216,303 | 392,621 | ||||||
Standard Life plc | 74,602 | 352,257 | ||||||
Willis Group Holdings plc | 3,900 | 131,313 | ||||||
4,354,337 | ||||||||
Materials 1.7% | ||||||||
Anglo American plc | 79,095 | 2,437,250 | ||||||
Antofagasta plc | 8,668 | 176,343 | ||||||
BHP Billiton plc | 53,870 | 1,726,599 | ||||||
Johnson Matthey plc | 11,012 | 400,709 | ||||||
Kazakhmys plc | 11,647 | 133,629 | ||||||
Mondi plc | 26,401 | 291,029 | ||||||
Rexam plc | 48,080 | 347,166 | ||||||
Rio Tinto plc | 38,280 | 1,912,331 | ||||||
Vedanta Resources plc | 8,593 | 157,888 | ||||||
Xstrata plc | 65,278 | 1,034,092 | ||||||
8,617,036 | ||||||||
Media 0.3% | ||||||||
British Sky Broadcasting Group plc | 26,656 | 305,074 | ||||||
ITV plc | 128,456 | 179,840 | ||||||
Pearson plc | 27,508 | 553,101 | ||||||
Reed Elsevier plc | 22,648 | 221,845 | ||||||
UBM plc | 19,739 | 223,147 | ||||||
1,483,007 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||
AstraZeneca plc | 75,056 | 3,480,703 | ||||||
GlaxoSmithKline plc | 220,580 | 4,942,632 | ||||||
8,423,335 | ||||||||
Real Estate 0.1% | ||||||||
British Land Co., plc | 23,796 | 203,257 | ||||||
Land Securities Group plc | 28,154 | 365,867 | ||||||
569,124 | ||||||||
Retailing 0.6% | ||||||||
Dixons Retail plc * | 1,014,963 | 338,627 | ||||||
Home Retail Group plc | 337,605 | 623,278 | ||||||
Inchcape plc | 46,115 | 299,906 | ||||||
Kingfisher plc | 148,752 | 696,458 | ||||||
Marks & Spencer Group plc | 134,821 | 858,081 | ||||||
Next plc | 7,826 | 451,139 | ||||||
3,267,489 | ||||||||
Software & Services 0.0% | ||||||||
The Sage Group plc | 35,937 | 180,495 | ||||||
Telecommunication Services 1.8% | ||||||||
BT Group plc | 556,703 | 1,913,157 | ||||||
Cable & Wireless Communications plc | 491,392 | 297,544 | ||||||
Vodafone Group plc | 2,526,553 | 6,861,187 | ||||||
9,071,888 | ||||||||
Transportation 0.1% | ||||||||
FirstGroup plc | 59,580 | 183,161 | ||||||
National Express Group plc | 36,638 | 100,776 | ||||||
283,937 | ||||||||
Utilities 1.0% | ||||||||
Centrica plc | 242,907 | 1,271,695 | ||||||
Drax Group plc | 30,414 | 276,032 | ||||||
National Grid plc | 152,933 | 1,744,131 | ||||||
Pennon Group plc | 11,943 | 138,345 | ||||||
Severn Trent plc | 10,144 | 263,086 | ||||||
SSE plc | 44,779 | 1,047,346 | ||||||
United Utilities Group plc | 40,221 | 439,749 | ||||||
5,180,384 | ||||||||
100,013,008 | ||||||||
Total Common Stock | ||||||||
(Cost $490,085,799) | 490,995,014 | |||||||
Preferred Stock 0.4% of net assets | ||||||||
Germany 0.4% | ||||||||
Automobiles & Components 0.3% | ||||||||
Bayerische Motoren Werke AG | 2,734 | 151,458 |
30 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Volkswagen AG | 7,088 | 1,471,651 | ||||||
1,623,109 | ||||||||
Household & Personal Products 0.1% | ||||||||
Henkel AG & Co. KGaA | 4,607 | 368,365 | ||||||
Utilities 0.0% | ||||||||
RWE AG | 4,508 | �� | 186,809 | |||||
2,178,283 | ||||||||
Italy 0.0% | ||||||||
Diversified Financials 0.0% | ||||||||
EXOR S.p.A. | 1,901 | 41,661 | ||||||
United Kingdom 0.0% | ||||||||
Aerospace & Defense 0.0% | ||||||||
Rolls-Royce Holdings plc, C Shares (a)* | 3,332,980 | 5,378 | ||||||
Total Preferred Stock | ||||||||
(Cost $1,412,454) | 2,225,322 | |||||||
Rights 0.0% of net assets | ||||||||
Hong Kong 0.0% | ||||||||
Esprit Holdings Ltd. (a)* | 111,792 | 30,003 | ||||||
Total Rights | ||||||||
(Cost $—) | 30,003 | |||||||
Other Investment Company 1.2% of net assets | ||||||||
United States 1.2% | ||||||||
iShares MSCI EAFE Index Fund | 110,000 | 5,892,700 | ||||||
Total Other Investment Company | ||||||||
(Cost $5,336,587) | 5,892,700 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
Time Deposits 0.1% | ||||||||
Brown Brothers Harriman | ||||||||
Japanese Yen | ||||||||
0.01%, 11/01/12 | 122,791 | 1,538 | ||||||
Pound Sterling | ||||||||
0.08%, 11/01/12 | 144 | 233 | ||||||
Hong Kong Dollar | ||||||||
0.01%, 11/01/12 | 5,449 | 703 | ||||||
Citibank | ||||||||
Euro Currency | ||||||||
(0.02)%, 11/01/12 | 121,858 | 157,946 | ||||||
JPMorgan Chase | ||||||||
Canadian Dollar | ||||||||
0.21%, 11/01/12 | 24,300 | 24,330 | ||||||
Societe Generale | ||||||||
US Dollar | ||||||||
0.03%, 11/01/12 | 245,261 | 245,261 | ||||||
Total Short-Term Investments | ||||||||
(Cost $430,011) | 430,011 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.1% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund | 664,945 | 664,945 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $664,945) | 664,945 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12, the tax basis cost of the fund’s investments was $522,514,272 and the unrealized appreciation and depreciation were $24,959,942 and ($47,901,164), respectively, with a net unrealized depreciation of ($22,941,222).
At 10/31/12, the values of certain foreign securities held by the fund aggregating $456,582,540 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 $6,079 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. |
ADR — | American Depositary Receipt | |
CVA — | Dutch Certificate | |
Reg’d — | Registered | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
See financial notes 31
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .5% | Common Stock | 85,502,542 | 88,117,980 | ||||||||
0 | .4% | Preferred Stock | 328,969 | 403,448 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
1 | .6% | Other Investment Companies | 1,433,979 | 1,409,952 | ||||||||
0 | .2% | Short-Term Investments | 148,489 | 148,489 | ||||||||
99 | .7% | Total Investments | 87,413,979 | 90,079,869 | ||||||||
1 | .3% | Collateral Invested for Securities on Loan | 1,156,931 | 1,156,931 | ||||||||
(1 | .0)% | Other Assets and Liabilities, Net | (897,438 | ) | ||||||||
100 | .0% | Total Net Assets | 90,339,362 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.5% of net assets | ||||||||
Australia 4.6% | ||||||||
Banks 0.1% | ||||||||
Bank of Queensland Ltd. | 7,176 | 56,352 | ||||||
Bendigo & Adelaide Bank Ltd. | 9,468 | 79,300 | ||||||
135,652 | ||||||||
Capital Goods 0.4% | ||||||||
Boart Longyear Ltd. | 31,714 | 47,896 | ||||||
Bradken Ltd. | 5,784 | 29,607 | ||||||
Emeco Holdings Ltd. | 44,239 | 31,859 | ||||||
GWA Group Ltd. | 21,688 | 39,282 | ||||||
Macmahon Holdings Ltd. | 60,864 | 20,132 | ||||||
Monadelphous Group Ltd. | 1,802 | 39,400 | ||||||
UGL Ltd. | 10,053 | 111,390 | ||||||
319,566 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
ALS Ltd. | 5,897 | 56,608 | ||||||
Seek Ltd. | 2,127 | 14,730 | ||||||
Skilled Group Ltd. | 6,557 | 18,078 | ||||||
Transfield Services Ltd. | 34,550 | 56,908 | ||||||
Transpacific Industries Group Ltd. * | 52,319 | 41,441 | ||||||
187,765 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Billabong International Ltd. | 37,204 | 34,076 | ||||||
G.U.D. Holdings Ltd. | 3,890 | 33,860 | ||||||
67,936 | ||||||||
Consumer Services 0.2% | ||||||||
Aristocrat Leisure Ltd. | 25,538 | 74,645 | ||||||
Echo Entertainment Group Ltd. | 6,058 | 22,017 | ||||||
Flight Centre Ltd. (a) | 1,507 | 41,578 | ||||||
138,240 | ||||||||
Diversified Financials 0.2% | ||||||||
ASX Ltd. | 2,800 | 86,213 | ||||||
Perpetual Ltd. | 2,501 | 72,362 | ||||||
158,575 | ||||||||
Energy 0.1% | ||||||||
AWE Ltd. | 26,852 | 36,993 | ||||||
Beach Energy Ltd. | 31,979 | 45,673 | ||||||
82,666 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Goodman Fielder Ltd. * | 238,710 | 144,607 | ||||||
GrainCorp Ltd., Class A | 5,343 | 67,851 | ||||||
Treasury Wine Estates Ltd. | 4,835 | 24,773 | ||||||
237,231 | ||||||||
Health Care Equipment & Services 0.5% | ||||||||
Ansell Ltd. | 5,812 | 94,171 | ||||||
Cochlear Ltd. | 973 | 71,858 | ||||||
Primary Health Care Ltd. | 18,565 | 74,882 | ||||||
Ramsay Health Care Ltd. | 2,487 | 61,332 | ||||||
Sigma Pharmaceuticals Ltd. | 189,404 | 132,511 | ||||||
434,754 | ||||||||
Insurance 0.1% | ||||||||
Challenger Ltd. | 13,629 | 45,630 | ||||||
NIB Holdings Ltd. | 12,367 | 23,257 | ||||||
68,887 | ||||||||
Materials 0.3% | ||||||||
Adelaide Brighton Ltd. | 21,100 | 69,362 | ||||||
Aquarius Platinum Ltd. * | 49,397 | 29,309 | ||||||
Gunns Ltd. (b)(c)* | 124,356 | — | ||||||
Iluka Resources Ltd. | 4,101 | 42,065 | ||||||
Kagara Ltd. (b)(c)* | 83,968 | — | ||||||
Nufarm Ltd. | 13,273 | 79,127 | ||||||
OZ Minerals Ltd. | 11,058 | 93,827 | ||||||
313,690 | ||||||||
Media 0.1% | ||||||||
APN News & Media Ltd. | 114,357 | 43,828 | ||||||
Seven West Media Ltd. | 15,529 | 19,577 | ||||||
Southern Cross Media Group Ltd. | 22,497 | 24,257 | ||||||
Ten Network Holdings Ltd. | 69,053 | 20,077 | ||||||
107,739 | ||||||||
Real Estate 0.7% | ||||||||
Australand Property Group | 12,210 | 38,215 | ||||||
CFS Retail Property Trust Group | 43,512 | 88,163 | ||||||
Commonwealth Property Office Fund | 51,040 | 57,142 | ||||||
Dexus Property Group | 135,479 | 138,274 | ||||||
Goodman Group | 24,333 | 111,706 | ||||||
GPT Group | 38,872 | 143,549 | ||||||
Investa Office Fund | 14,245 | 43,912 | ||||||
620,961 | ||||||||
Retailing 0.5% | ||||||||
David Jones Ltd. | 46,196 | 127,856 | ||||||
Harvey Norman Holdings Ltd. | 29,522 | 58,315 | ||||||
JB Hi-Fi Ltd. (a) | 4,628 | 49,197 |
32 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Myer Holdings Ltd | 35,837 | 72,637 | ||||||
Pacific Brands Ltd. | 161,370 | 103,790 | ||||||
Premier Investments Ltd. | 7,390 | 47,255 | ||||||
459,050 | ||||||||
Software & Services 0.1% | ||||||||
Computershare Ltd. | 14,411 | 129,781 | ||||||
Transportation 0.4% | ||||||||
QR National Ltd. | 15,283 | 59,283 | ||||||
Sydney Airport | 46,956 | 165,158 | ||||||
Transurban Group | 17,558 | 110,818 | ||||||
Virgin Australia Holdings Ltd. * | 98,519 | 50,027 | ||||||
Virgin Australia International Holdings (b)(c) | 176,214 | — | ||||||
385,286 | ||||||||
Utilities 0.3% | ||||||||
APA Group (a) | 14,796 | 79,196 | ||||||
DUET Group | 53,736 | 116,453 | ||||||
SP AusNet | 68,200 | 75,031 | ||||||
270,680 | ||||||||
4,118,459 | ||||||||
Austria 0.9% | ||||||||
Banks 0.2% | ||||||||
Raiffeisen Bank International AG | 3,426 | 137,231 | ||||||
Capital Goods 0.3% | ||||||||
Andritz AG | 2,558 | 154,141 | ||||||
Semperit AG Holding | 688 | 29,000 | ||||||
Strabag SE - BR | 3,062 | 76,980 | ||||||
Zumtobel AG | 3,388 | 36,242 | ||||||
296,363 | ||||||||
Insurance 0.1% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 1,955 | 84,004 | ||||||
Materials 0.1% | ||||||||
Lenzing AG | 180 | 16,023 | ||||||
RHI AG | 1,313 | 37,156 | ||||||
53,179 | ||||||||
Transportation 0.2% | ||||||||
Flughafen Wien AG | 1,032 | 46,798 | ||||||
Oesterreichische Post AG | 2,777 | 106,975 | ||||||
153,773 | ||||||||
Utilities 0.0% | ||||||||
Verbund AG | 1,916 | 44,676 | ||||||
769,226 | ||||||||
Belgium 1.2% | ||||||||
Capital Goods 0.0% | ||||||||
Compagnie d’Enterprises CFE | 684 | 33,654 | ||||||
Diversified Financials 0.3% | ||||||||
Ackermans & van Haaren N.V. | 536 | 43,641 | ||||||
Gimv N.V. | 972 | 46,980 | ||||||
Groupe Bruxelles Lambert S.A. | 1,556 | 115,034 | ||||||
Sofina S.A. | 498 | 42,279 | ||||||
247,934 | ||||||||
Energy 0.0% | ||||||||
Euronav S.A. * | 5,166 | 28,458 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Agfa Gevaert N.V. * | 75,864 | 123,897 | ||||||
Materials 0.2% | ||||||||
Nyrstar * | 14,941 | 86,894 | ||||||
Tessenderlo Chemie N.V. | 3,794 | 110,091 | ||||||
196,985 | ||||||||
Real Estate 0.1% | ||||||||
Befimmo S.C.A. | 228 | 13,890 | ||||||
Cofinimmo | 419 | 47,650 | ||||||
61,540 | ||||||||
Retailing 0.2% | ||||||||
S.A. D’Ieteren N.V. | 2,829 | 136,790 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Barco N.V. | 974 | 67,002 | ||||||
EVS Broadcast Equipment S.A. | 576 | 33,437 | ||||||
100,439 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenet Group Holding N.V. | 1,477 | 67,666 | ||||||
Utilities 0.1% | ||||||||
Elia System Operator S.A./N.V. | 1,737 | 70,976 | ||||||
1,068,339 | ||||||||
Canada 8.5% | ||||||||
Automobiles & Components 0.1% | ||||||||
Linamar Corp. | 4,133 | 91,040 | ||||||
Martinrea International, Inc. * | 5,278 | 37,943 | ||||||
128,983 | ||||||||
Banks 0.2% | ||||||||
Canadian Western Bank | 1,221 | 36,138 | ||||||
Genworth MI Canada, Inc. | 2,600 | 53,263 | ||||||
Home Capital Group, Inc. | 600 | 30,548 | ||||||
Laurentian Bank of Canada | 863 | 38,408 | ||||||
158,357 | ||||||||
Capital Goods 0.7% | ||||||||
Aecon Group, Inc. | 3,300 | 38,031 | ||||||
ATS Automation Tooling Systems, Inc. * | 3,700 | 34,453 | ||||||
Bird Construction, Inc. | 1,000 | 14,598 | ||||||
CAE, Inc. | 8,599 | 94,621 | ||||||
Russel Metals, Inc. | 5,503 | 153,726 | ||||||
Superior Plus Corp. | 17,400 | 170,037 | ||||||
Toromont Industries Ltd. | 4,716 | 92,549 | ||||||
Wajax Corp. | 1,300 | 58,183 | ||||||
656,198 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Newalta Corp. | 3,200 | 45,016 | ||||||
Progressive Waste Solutions Ltd. | 4,700 | 90,965 | ||||||
Ritchie Bros. Auctioneers, Inc. (a) | 2,200 | 48,791 | ||||||
Stantec, Inc. | 1,500 | 51,664 | ||||||
Transcontinental, Inc., Class A | 9,737 | 100,417 | ||||||
336,853 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Dorel Industries, Inc., Class B | 3,210 | 114,773 |
See financial notes 33
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Gildan Activewear, Inc. | 3,202 | 109,036 | ||||||
223,809 | ||||||||
Consumer Services 0.0% | ||||||||
EnerCare, Inc. | 3,700 | 31,526 | ||||||
Diversified Financials 0.4% | ||||||||
AGF Management Ltd., Class B | 5,972 | 59,615 | ||||||
Canaccord Financial, Inc. | 2,200 | 10,992 | ||||||
CI Financial Corp. | 7,000 | 163,585 | ||||||
Davis & Henderson Corp. | 3,400 | 71,353 | ||||||
Dundee Corp., Class A * | 1,687 | 42,397 | ||||||
GMP Capital, Inc. | 7,500 | 39,499 | ||||||
387,441 | ||||||||
Energy 2.3% | ||||||||
Advantage Oil & Gas Ltd. * | 25,700 | 92,636 | ||||||
AltaGas Ltd. | 3,300 | 111,184 | ||||||
Baytex Energy Corp. | 2,800 | 127,419 | ||||||
Bellatrix Exploration Ltd. * | 8,000 | 33,322 | ||||||
Bonavista Energy Corp. | 7,300 | 130,907 | ||||||
Ensign Energy Services, Inc. | 7,692 | 114,985 | ||||||
Freehold Royalties Ltd. | 800 | 16,244 | ||||||
Gibson Energy, Inc. | 2,000 | 45,977 | ||||||
Keyera Corp. | 2,300 | 111,644 | ||||||
Mullen Group Ltd. | 4,700 | 97,459 | ||||||
Nuvista Energy Ltd. * | 3,500 | 18,293 | ||||||
Pacific Rubiales Energy Corp. | 1,800 | 42,335 | ||||||
Parkland Fuel Corp. | 4,400 | 75,070 | ||||||
Pembina Pipeline Corp. | 9,200 | 257,278 | ||||||
PetroBakken Energy Ltd., Class A (a) | 3,000 | 37,877 | ||||||
Petrobank Energy & Resources Ltd. * | 3,300 | 45,333 | ||||||
Peyto Exploration & Development Corp. | 3,100 | 75,735 | ||||||
Progress Energy Resources Corp. | 5,300 | 106,769 | ||||||
Savanna Energy Services Corp. | 1,700 | 11,830 | ||||||
ShawCor Ltd., Class A | 2,122 | 94,547 | ||||||
Trican Well Service Ltd. | 4,641 | 55,390 | ||||||
Trilogy Energy Corp. | 1,000 | 27,374 | ||||||
Trinidad Drilling Ltd. | 10,451 | 69,272 | ||||||
Veresen, Inc. | 7,400 | 95,505 | ||||||
Vermilion Energy, Inc. | 2,500 | 119,524 | ||||||
Zargon Oil & Gas Ltd. | 2,600 | 22,310 | ||||||
2,036,219 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Liquor Stores N.A. Ltd. | 800 | 14,690 | ||||||
The Jean Coutu Group (PJC), Inc., Class A | 8,000 | 120,230 | ||||||
The North West Co., Inc. | 3,300 | 77,317 | ||||||
212,237 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Cott Corp. * | 8,300 | 63,408 | ||||||
Maple Leaf Foods, Inc. | 8,414 | 93,513 | ||||||
156,921 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
CML Healthcare, Inc. | 6,262 | 53,105 | ||||||
Insurance 0.1% | ||||||||
Industrial Alliance Insurance & Financial Services, Inc. | 3,100 | 84,891 | ||||||
Materials 1.4% | ||||||||
Agnico-Eagle Mines Ltd. | 1,600 | 90,337 | ||||||
Canfor Corp. * | 5,198 | 74,112 | ||||||
CCL Industries, Inc., Class B | 1,419 | 52,540 | ||||||
Centerra Gold, Inc. | 2,780 | 31,537 | ||||||
Chemtrade Logistics Income Fund | 2,700 | 43,930 | ||||||
Eldorado Gold Corp. | 1,500 | 22,168 | ||||||
Harry Winston Diamond Corp. * | 4,045 | 58,037 | ||||||
HudBay Minerals, Inc. | 8,996 | 83,497 | ||||||
IAMGOLD Corp. | 5,665 | 87,917 | ||||||
Inmet Mining Corp. | 1,796 | 92,610 | ||||||
Lundin Mining Corp. * | 20,109 | 104,698 | ||||||
Major Drilling Group International, Inc. | 2,500 | 25,857 | ||||||
PAN American Silver Corp. | 1,800 | 39,487 | ||||||
Sherritt International Corp. | 23,400 | 101,215 | ||||||
Silver Wheaton Corp. | 474 | 19,102 | ||||||
Thompson Creek Metals Co., Inc. (a)* | 12,017 | 31,524 | ||||||
West Fraser Timber Co., Ltd. | 2,823 | 170,977 | ||||||
Yamana Gold, Inc. | 6,200 | 125,211 | ||||||
1,254,756 | ||||||||
Media 0.5% | ||||||||
Aimia, Inc. | 7,200 | 107,847 | ||||||
Astral Media, Inc., Class A | 1,652 | 67,618 | ||||||
Cineplex, Inc. | 1,900 | 58,974 | ||||||
Cogeco Cable, Inc. | 853 | 32,591 | ||||||
Corus Entertainment, Inc., Class B | 3,683 | 83,377 | ||||||
Torstar Corp, Class B | 7,906 | 63,723 | ||||||
414,130 | ||||||||
Real Estate 0.4% | ||||||||
Boardwalk Real Estate Investment Trust | 470 | 30,245 | ||||||
Brookfield Office Properties, Inc. | 6,200 | 95,475 | ||||||
Calloway Real Estate Investment Trust | 1,070 | 31,015 | ||||||
Canadian Real Estate Investment Trust | 732 | 30,519 | ||||||
Granite Real Estate, Inc. | 800 | 29,333 | ||||||
H&R REIT | 2,000 | 48,320 | ||||||
RioCan REIT | 2,400 | 65,458 | ||||||
330,365 | ||||||||
Retailing 0.1% | ||||||||
Dollarama, Inc. | 1,000 | 63,169 | ||||||
Reitmans (Canada) Ltd., Class A | 5,225 | 64,976 | ||||||
128,145 | ||||||||
Software & Services 0.1% | ||||||||
MacDonald, Dettwiler & Associates Ltd. | 932 | 52,258 | ||||||
Open Text Corp. * | 723 | 38,859 | ||||||
91,117 | ||||||||
Telecommunication Services 0.1% | ||||||||
Manitoba Telecom Services, Inc. | 3,000 | 100,716 | ||||||
Transportation 0.2% | ||||||||
Chorus Aviation, Inc. | 21,900 | 67,098 | ||||||
TransForce, Inc. | 5,100 | 93,089 | ||||||
Westshore Terminals Investment Corp. | 1,400 | 39,698 | ||||||
199,885 | ||||||||
Utilities 0.8% | ||||||||
Algonquin Power & Utilities Corp. | 5,100 | 35,285 | ||||||
Atco Ltd., Class I | 2,100 | 155,153 | ||||||
Canadian Utilities Ltd., Class A | 1,700 | 114,042 | ||||||
Capital Power Corp. | 2,000 | 42,874 | ||||||
Emera, Inc. | 4,000 | 139,775 |
34 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Just Energy Group, Inc. | 6,300 | 64,467 | ||||||
Northland Power, Inc. | 2,200 | 42,645 | ||||||
Valener, Inc. | 8,600 | 137,083 | ||||||
731,324 | ||||||||
7,716,978 | ||||||||
Denmark 1.4% | ||||||||
Banks 0.2% | ||||||||
Jyske Bank A/S - Reg’d * | 4,040 | 122,980 | ||||||
Sydbank A/S * | 4,948 | 90,638 | ||||||
213,618 | ||||||||
Capital Goods 0.2% | ||||||||
NKT Holding A/S | 2,280 | 76,423 | ||||||
Rockwool International A/S, B Shares | 793 | 74,645 | ||||||
151,068 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Pandora A/S | 1,307 | 20,753 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
East Asiatic Co., Ltd. A/S | 4,709 | 90,938 | ||||||
Royal UNIBREW A/S | 188 | 14,965 | ||||||
105,903 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Coloplast A/S, Class B | 377 | 82,693 | ||||||
GN Store Nord A/S | 5,404 | 84,694 | ||||||
William Demant Holding A/S * | 427 | 36,724 | ||||||
204,111 | ||||||||
Insurance 0.2% | ||||||||
Topdanmark A/S * | 479 | 97,142 | ||||||
Tryg A/S | 1,381 | 90,170 | ||||||
187,312 | ||||||||
Materials 0.2% | ||||||||
Christian Hansen Holding A/S | 463 | 14,489 | ||||||
Novozymes A/S, B Shares | 4,314 | 119,191 | ||||||
133,680 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
H. Lundbeck A/S | 3,799 | 66,090 | ||||||
Software & Services 0.1% | ||||||||
SimCorp A/S | 254 | 55,563 | ||||||
Transportation 0.1% | ||||||||
D/S Norden A/S | 4,718 | 124,432 | ||||||
1,262,530 | ||||||||
Finland 2.0% | ||||||||
Automobiles & Components 0.2% | ||||||||
Nokian Renkaat Oyj | 3,454 | 143,848 | ||||||
Capital Goods 0.7% | ||||||||
Cargotec Oyj, B Shares | 2,651 | 58,469 | ||||||
Cramo Oyj | 2,406 | 24,473 | ||||||
Konecranes Oyj | 3,715 | 118,131 | ||||||
Outotec Oyj | 2,407 | 117,610 | ||||||
Ramirent Oyj | 5,264 | 39,395 | ||||||
Uponor Oyj | 7,650 | 86,311 | ||||||
YIT Oyj | 8,139 | 160,494 | ||||||
604,883 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Lassila & Tikanoja Oyj * | 3,153 | 48,346 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Amer Sports Oyj | 7,704 | 109,167 | ||||||
Diversified Financials 0.1% | ||||||||
Pohjola Bank plc, A Shares | 7,389 | 100,797 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Oriola-KD Oyj, B Shares | 12,867 | 34,856 | ||||||
Materials 0.4% | ||||||||
Huhtamaki Oyj | 9,575 | 161,892 | ||||||
Kemira Oyj | 8,574 | 114,067 | ||||||
Metsa Board Oyj, B Shares * | 35,839 | 107,582 | ||||||
Tikkurila Oyj | 796 | 15,084 | ||||||
398,625 | ||||||||
Media 0.2% | ||||||||
Sanoma Oyj (a) | 14,474 | 140,745 | ||||||
Real Estate 0.0% | ||||||||
Sponda Oyj | 8,033 | 35,632 | ||||||
Retailing 0.1% | ||||||||
Stockmann Oyj Abp, B Shares | 2,961 | 55,699 | ||||||
Software & Services 0.1% | ||||||||
Tieto Oyj | 7,291 | 139,939 | ||||||
1,812,537 | ||||||||
France 5.1% | ||||||||
Automobiles & Components 0.1% | ||||||||
Faurecia | 3,579 | 53,887 | ||||||
Plastic Omnium S.A. | 1,620 | 44,790 | ||||||
98,677 | ||||||||
Banks 0.1% | ||||||||
Natixis | 32,326 | 106,097 | ||||||
Capital Goods 0.3% | ||||||||
Areva S.A. * | 3,857 | 67,770 | ||||||
Mersen S.A. | 1,537 | 38,902 | ||||||
Saft Groupe S.A. | 1,572 | 34,964 | ||||||
Zodiac Aerospace | 1,365 | 139,959 | ||||||
281,595 | ||||||||
Commercial & Professional Supplies 0.6% | ||||||||
Bureau Veritas S.A. | 1,098 | 116,615 | ||||||
Derichebourg S.A. | 11,721 | 33,152 | ||||||
Edenred | 2,855 | 82,621 | ||||||
Societe BIC S.A. | 1,138 | 138,863 | ||||||
Teleperformance | 5,690 | 172,298 | ||||||
543,549 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Beneteau | 2,720 | 27,171 | ||||||
Hermes International | 220 | 60,058 | ||||||
Nexity S.A. | 3,650 | 112,540 | ||||||
SEB S.A. | 1,299 | 84,581 | ||||||
284,350 | ||||||||
Consumer Services 0.1% | ||||||||
Club Mediterranee S.A. * | 2,989 | 47,513 | ||||||
Diversified Financials 0.1% | ||||||||
Eurazeo | 2,700 | 123,770 |
See financial notes 35
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.1% | ||||||||
Bourbon S.A. | 2,411 | 65,095 | ||||||
Etablissements Maurel et Prom | 2,802 | 39,054 | ||||||
104,149 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Remy Cointreau S.A. | 439 | 45,532 | ||||||
Vilmorin & Cie | 134 | 15,920 | ||||||
61,452 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
bioMerieux | 612 | 59,305 | ||||||
Orpea | 405 | 16,560 | ||||||
75,865 | ||||||||
Insurance 0.1% | ||||||||
Euler Hermes S.A. | 982 | 67,764 | ||||||
Materials 0.4% | ||||||||
Ciments Francais S.A. | 1,008 | 61,341 | ||||||
Eramet | 700 | 89,017 | ||||||
Imerys S.A. | 2,376 | 133,668 | ||||||
SA des Ciments Vicat | 1,802 | 97,134 | ||||||
381,160 | ||||||||
Media 0.8% | ||||||||
Eutelsat Communications S.A. | 3,719 | 119,085 | ||||||
Havas S.A. | 11,767 | 59,552 | ||||||
Ipsos | 1,311 | 46,089 | ||||||
JC Decaux S.A. | 2,436 | 51,568 | ||||||
Metropole Television S.A. | 6,661 | 92,925 | ||||||
PagesJaunes Groupe * | 40,854 | 74,361 | ||||||
Societe d’Edition de Canal + | 6,635 | 39,835 | ||||||
Societe Television Francaise 1 | 13,636 | 117,189 | ||||||
Technicolor - Reg’d * | 47,684 | 121,142 | ||||||
721,746 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Ipsen S.A. | 1,348 | 34,769 | ||||||
Real Estate 0.5% | ||||||||
Fonciere des Regions | 1,792 | 144,234 | ||||||
Gecina S.A. | 860 | 95,398 | ||||||
ICADE | 1,311 | 117,992 | ||||||
Klepierre | 3,105 | 115,175 | ||||||
Societe Immobilliere de Location pour l’Industrie et le Commerce | 323 | 36,214 | ||||||
509,013 | ||||||||
Retailing 0.1% | ||||||||
CFAO | 1,875 | 90,513 | ||||||
Software & Services 0.6% | ||||||||
Alten | 1,191 | 37,481 | ||||||
Altran Technologies S.A. * | 9,906 | 66,729 | ||||||
AtoS | 2,945 | 197,733 | ||||||
Dassault Systemes S.A. | 877 | 92,527 | ||||||
UbiSoft Entertainment S.A. * | 12,336 | 114,779 | ||||||
509,249 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Ingenico S.A. | 822 | 43,524 | ||||||
Neopost S.A. | 2,451 | 134,376 | ||||||
177,900 | ||||||||
Telecommunication Services 0.1% | ||||||||
Iliad S.A. | 377 | 58,093 | ||||||
Transportation 0.3% | ||||||||
Aeroports de Paris | 1,803 | 139,536 | ||||||
Bollore | 130 | 38,528 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 11,772 | 89,649 | ||||||
267,713 | ||||||||
Utilities 0.1% | ||||||||
Rubis | 1,296 | 79,075 | ||||||
4,624,012 | ||||||||
Germany 3.2% | ||||||||
Automobiles & Components 0.1% | ||||||||
ElringKlinger AG | 1,295 | 36,101 | ||||||
Leoni AG | 2,099 | 70,130 | ||||||
106,231 | ||||||||
Banks 0.1% | ||||||||
Aareal Bank AG * | 3,016 | 64,854 | ||||||
Capital Goods 0.7% | ||||||||
Bauer AG | 1,418 | 30,698 | ||||||
BayWa AG | 2,070 | 93,813 | ||||||
Deutz AG * | 8,710 | 38,206 | ||||||
Duerr AG | 619 | 46,435 | ||||||
Gildemeister AG | 3,329 | 61,784 | ||||||
Heidelberger Druckmaschinen AG * | 72,082 | 108,187 | ||||||
Indus Holding AG | 2,101 | 52,896 | ||||||
Krones AG | 865 | 51,030 | ||||||
Nordex SE * | 6,263 | 21,917 | ||||||
Pfeiffer Vacuum Technology AG | 357 | 36,498 | ||||||
SGL Carbon SE | 1,196 | 47,703 | ||||||
Vossloh AG | 438 | 44,181 | ||||||
633,348 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Gerry Weber International AG | 323 | 14,688 | ||||||
Hugo Boss AG | 418 | 41,953 | ||||||
Puma SE | 185 | 52,797 | ||||||
109,438 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Suedzucker AG | 3,696 | 143,275 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Rhoen-klinikum AG | 6,462 | 126,013 | ||||||
Materials 0.3% | ||||||||
Fuchs Petrolub AG | 617 | 38,454 | ||||||
Symrise AG | 4,474 | 160,932 | ||||||
Wacker Chemie AG (a) | 1,456 | 82,324 | ||||||
281,710 | ||||||||
Media 0.3% | ||||||||
Axel Springer AG | 1,877 | 80,541 | ||||||
GfK SE | 775 | 35,289 | ||||||
Kabel Deutschland Holding AG | 1,549 | 111,767 | ||||||
227,597 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Gerresheimer AG * | 1,442 | 71,575 | ||||||
Stada Arzneimittel AG | 4,032 | 122,112 | ||||||
193,687 | ||||||||
Real Estate 0.1% | ||||||||
Deutsche Euroshop AG | 835 | 34,126 |
36 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Gagfah S.A. * | 1,770 | 20,144 | ||||||
54,270 | ||||||||
Retailing 0.2% | ||||||||
Douglas Holding AG | 2,219 | 108,345 | ||||||
Fielmann AG | 554 | 53,979 | ||||||
162,324 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Aixtron SE | 1,596 | 20,935 | ||||||
Kontron AG | 6,328 | 29,745 | ||||||
SMA Solar Technology AG | 399 | 8,571 | ||||||
59,251 | ||||||||
Software & Services 0.2% | ||||||||
Bechtle AG | 1,275 | 48,116 | ||||||
Software AG | 2,202 | 88,429 | ||||||
United Internet AG - Reg’d | 3,449 | 69,021 | ||||||
205,566 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Jenoptik AG | 4,168 | 39,492 | ||||||
Wincor Nixdorf AG | 2,895 | 129,099 | ||||||
168,591 | ||||||||
Telecommunication Services 0.1% | ||||||||
Freenet AG | 7,065 | 116,801 | ||||||
Transportation 0.2% | ||||||||
Fraport AG | 1,619 | 95,009 | ||||||
Hamburger Hafen und Logistik AG | 1,309 | 31,827 | ||||||
Sixt AG | 4,259 | 79,250 | ||||||
206,086 | ||||||||
2,859,042 | ||||||||
Greece 0.7% | ||||||||
Banks 0.2% | ||||||||
Eurobank Ergasias S.A. * | 188,000 | 219,072 | ||||||
TT Hellenic Postbank S.A. (b)(c)* | 24,275 | — | ||||||
219,072 | ||||||||
Diversified Financials 0.1% | ||||||||
Marfin Investment Group S.A. * | 137,062 | 61,056 | ||||||
Materials 0.2% | ||||||||
Mytilineos Holdings S.A. * | 14,521 | 65,929 | ||||||
Titan Cement Co. * | 7,660 | 142,727 | ||||||
208,656 | ||||||||
Retailing 0.1% | ||||||||
JUMBO S.A. * | 8,000 | 52,968 | ||||||
Transportation 0.1% | ||||||||
Diana Shipping, Inc. * | 5,100 | 36,720 | ||||||
DryShips, Inc. * | 24,000 | 53,280 | ||||||
90,000 | ||||||||
631,752 | ||||||||
Hong Kong 3.5% | ||||||||
Banks 0.2% | ||||||||
Bank of East Asia Ltd. | 35,000 | 129,299 | ||||||
Wing Hang Bank Ltd. | 5,000 | 52,927 | ||||||
182,226 | ||||||||
Capital Goods 0.3% | ||||||||
Jardine Strategic Holdings Ltd. | 4,500 | 163,347 | ||||||
Johnson Electric Holdings Ltd. | 79,000 | 50,617 | ||||||
NWS Holdings Ltd. | 42,000 | 63,298 | ||||||
277,262 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Techtronic Industries Co., Ltd. | 65,500 | 124,156 | ||||||
Consumer Services 0.2% | ||||||||
Cafe De Coral Holdings Ltd. | 12,000 | 35,489 | ||||||
Sands China Ltd. | 7,600 | 28,409 | ||||||
SJM Holdings Ltd. | 43,000 | 93,191 | ||||||
Wynn Macau Ltd. | 6,400 | 18,030 | ||||||
175,119 | ||||||||
Diversified Financials 0.3% | ||||||||
First Pacific Co., Ltd. | 68,000 | 75,601 | ||||||
Guoco Group Ltd. | 2,000 | 18,422 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 9,000 | 147,714 | ||||||
Sun Hung Kai & Co., Ltd. | 45,000 | 25,684 | ||||||
267,421 | ||||||||
Media 0.1% | ||||||||
Television Broadcasts Ltd. | 8,000 | 59,514 | ||||||
Real Estate 1.7% | ||||||||
Great Eagle Holdings Ltd. | 19,000 | 56,204 | ||||||
Hang Lung Group Ltd. | 14,000 | 82,749 | ||||||
Hang Lung Properties Ltd. | 31,000 | 107,340 | ||||||
Henderson Land Development Co., Ltd. | 16,000 | 110,341 | ||||||
Hongkong Land Holdings Ltd. | 21,000 | 132,778 | ||||||
Hysan Development Co., Ltd. | 7,000 | 30,879 | ||||||
Kerry Properties Ltd. | 19,000 | 94,197 | ||||||
New World Development Co., Ltd. | 120,000 | 184,630 | ||||||
Sino Land Co., Ltd. | 84,000 | 149,861 | ||||||
Sun Hung Kai Properties Ltd. | 20,000 | 276,479 | ||||||
The Link REIT | 34,000 | 168,958 | ||||||
Wheelock & Co., Ltd. | 21,000 | 91,600 | ||||||
1,486,016 | ||||||||
Retailing 0.1% | ||||||||
Chow Sang Sang Holdings International Ltd. | 18,000 | 38,218 | ||||||
Luk Fook Holdings International Ltd. | 5,000 | 12,489 | ||||||
50,707 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
VTech Holdings Ltd. | 8,500 | 100,690 | ||||||
Telecommunication Services 0.0% | ||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | 34,000 | 14,100 | ||||||
Transportation 0.4% | ||||||||
Cathay Pacific Airways Ltd. | 72,000 | 130,035 | ||||||
MTR Corp., Ltd. | 25,000 | 97,516 | ||||||
Pacific Basin Shipping Ltd. | 254,000 | 135,566 | ||||||
Seaspan Corp. | 2,200 | 34,914 | ||||||
398,031 | ||||||||
3,135,242 | ||||||||
Ireland 0.9% | ||||||||
Capital Goods 0.2% | ||||||||
Grafton Group plc | 36,877 | 161,175 |
See financial notes 37
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Kingspan Group plc | 9,658 | 100,726 | ||||||
261,901 | ||||||||
Consumer Services 0.1% | ||||||||
Paddy Power plc | 960 | 70,824 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
C&C Group plc | 21,229 | 101,644 | ||||||
Glanbia plc | 4,639 | 44,014 | ||||||
Greencore Group plc | 44,251 | 64,982 | ||||||
210,640 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
United Drug plc | 25,122 | 91,658 | ||||||
Insurance 0.1% | ||||||||
FBD Holdings plc | 4,466 | 55,860 | ||||||
Materials 0.1% | ||||||||
James Hardie Industries plc CDI | 8,326 | 79,644 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
ICON plc Sponsored ADR * | 2,200 | 51,788 | ||||||
822,315 | ||||||||
Israel 1.0% | ||||||||
Banks 0.1% | ||||||||
Israel Discount Bank Ltd., Class A * | 47,816 | 67,452 | ||||||
Mizrahi Tefahot Bank Ltd. * | 4,162 | 37,793 | ||||||
105,245 | ||||||||
Capital Goods 0.2% | ||||||||
Clal Industries Ltd. | 9,226 | 32,586 | ||||||
Delek Group Ltd. | 335 | 63,702 | ||||||
Elbit Systems Ltd. | 1,491 | 52,494 | ||||||
148,782 | ||||||||
Energy 0.2% | ||||||||
Oil Refineries Ltd. * | 160,479 | 77,271 | ||||||
Paz Oil Co., Ltd. | 532 | 70,105 | ||||||
147,376 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Shufersal Ltd. | 11,995 | 32,403 | ||||||
Materials 0.1% | ||||||||
The Israel Corp., Ltd. | 170 | 115,527 | ||||||
Software & Services 0.2% | ||||||||
Check Point Software Technologies Ltd. * | 2,600 | 115,778 | ||||||
NICE Systems Ltd. * | 960 | 32,066 | ||||||
147,844 | ||||||||
Telecommunication Services 0.2% | ||||||||
Cellcom Israel Ltd. | 11,389 | 101,646 | ||||||
Partner Communications Co., Ltd. | 17,322 | 99,691 | ||||||
201,337 | ||||||||
898,514 | ||||||||
Italy 2.7% | ||||||||
Automobiles & Components 0.2% | ||||||||
Piaggio & C. S.p.A. | 16,223 | 40,008 | ||||||
Pirelli & C. S.p.A. | 13,992 | 162,540 | ||||||
202,548 | ||||||||
Banks 0.2% | ||||||||
Banca Carige S.p.A. | 55,145 | 51,052 | ||||||
Banca Piccolo Credito Valtellinese Scarl | 45,120 | 71,699 | ||||||
Banca Popolare Di Sondrio Scarl | 10,000 | 57,276 | ||||||
180,027 | ||||||||
Capital Goods 0.2% | ||||||||
Astaldi S.p.A. | 2,243 | 14,440 | ||||||
C.I.R. S.p.A. - Compagnie Industriali Riunite | 61,138 | 70,007 | ||||||
Danieli S.p.A. - Officine Meccaniche Danieli & C. | 226 | 6,474 | ||||||
Danieli S.p.A. - Officine Meccaniche Danieli & C. - RSP | 657 | 10,245 | ||||||
Impregilo S.p.A. | 13,534 | 54,653 | ||||||
Trevi Finanziaria S.p.A. | 2,536 | 17,138 | ||||||
172,957 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Geox S.p.A. | 10,996 | 31,441 | ||||||
Indesit Co., S.p.A. | 8,012 | 49,701 | ||||||
Luxottica Group S.p.A. | 3,425 | 130,725 | ||||||
Prada S.p.A. | 2,800 | 22,719 | ||||||
Safilo Group S.p.A. * | 5,382 | 45,495 | ||||||
Tod’s S.p.A. | 359 | 42,078 | ||||||
322,159 | ||||||||
Consumer Services 0.2% | ||||||||
Autogrill S.p.A. | 8,093 | 82,842 | ||||||
Lottomatica Group S.p.A. | 4,072 | 87,644 | ||||||
170,486 | ||||||||
Diversified Financials 0.1% | ||||||||
Azimut Holding S.p.A. | 3,383 | 42,978 | ||||||
Energy 0.2% | ||||||||
ERG S.p.A. | 14,571 | 105,784 | ||||||
Saras S.p.A. * | 86,838 | 116,206 | ||||||
221,990 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Davide Campari-Milano S.p.A | 7,070 | 57,378 | ||||||
Parmalat S.p.A. | 69,159 | 156,738 | ||||||
214,116 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Sorin S.p.A. * | 15,521 | 36,409 | ||||||
Insurance 0.2% | ||||||||
Fondiaria-Sai S.p.A. * | 12,500 | 16,258 | ||||||
Mediolanum S.p.A | 9,632 | 47,284 | ||||||
Milano Assicurazioni S.p.A. * | 124,720 | 53,093 | ||||||
Societa Cattolica di Assicurazioni S.c.r.l. * | 3,934 | 61,303 | ||||||
Unipol Gruppo Finanziario S.p.A * | 12,000 | 26,273 | ||||||
204,211 | ||||||||
Materials 0.2% | ||||||||
Buzzi Unicem S.p.A. | 12,500 | 148,746 | ||||||
Media 0.0% | ||||||||
Mondadori (Arnoldo) Editore S.p.A. * | 28,888 | 39,059 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Recordati S.p.A. | 5,853 | 46,895 |
38 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Real Estate 0.0% | ||||||||
Beni Stabili S.p.A. | 71,573 | 40,224 | ||||||
Transportation 0.2% | ||||||||
Alitalia S.p.A. (b)(c)* | 14,782 | — | ||||||
Ansaldo STS S.p.A. | 3,706 | 30,160 | ||||||
Autostrada Torino-Milano S.p.A. | 5,984 | 59,992 | ||||||
Societa Iniziative Autostradali e Servizi S.p.A. | 5,127 | 42,694 | ||||||
132,846 | ||||||||
Utilities 0.3% | ||||||||
ACEA S.p.A. | 6,740 | 37,090 | ||||||
Enel Green Power S.p.A. | 25,000 | 42,581 | ||||||
Hera S.p.A. | 66,884 | 112,762 | ||||||
Iren S.p.A. | 94,299 | 53,156 | ||||||
245,589 | ||||||||
2,421,240 | ||||||||
Japan 34.3% | ||||||||
Automobiles & Components 2.7% | ||||||||
Aisan Industry Co., Ltd. | 4,000 | 30,435 | ||||||
Akebono Brake Industry Co., Ltd. | 6,400 | 27,584 | ||||||
Calsonic Kansei Corp. | 18,000 | 72,750 | ||||||
EXEDY Corp. | 2,800 | 54,731 | ||||||
F.C.C. Co., Ltd. | 3,300 | 59,267 | ||||||
Futaba Industrial Co., Ltd. * | 13,500 | 50,747 | ||||||
Keihin Corp. | 5,700 | 68,815 | ||||||
Koito Manufacturing Co., Ltd. | 8,000 | 99,371 | ||||||
KYB Co., Ltd. | 13,000 | 46,787 | ||||||
Mitsubishi Motors Corp. * | 102,000 | 87,920 | ||||||
Musashi Seimitsu Industry Co., Ltd. | 2,400 | 50,121 | ||||||
NGK Spark Plug Co., Ltd. | 12,000 | 134,383 | ||||||
Nifco, Inc. | 3,400 | 77,265 | ||||||
Nissan Shatai Co., Ltd. | 12,000 | 131,311 | ||||||
Nissin Kogyo Co., Ltd. | 5,300 | 76,172 | ||||||
NOK Corp. | 7,000 | 112,304 | ||||||
Press Kogyo Co., Ltd. | 8,000 | 33,459 | ||||||
Riken Corp. | 8,000 | 26,783 | ||||||
Sanden Corp. | 15,000 | 45,115 | ||||||
Showa Corp. | 8,400 | 77,726 | ||||||
Sumitomo Rubber Industries Ltd. | 11,700 | 137,933 | ||||||
T RAD Co., Ltd. | 6,000 | 13,698 | ||||||
Tachi-S Co., Ltd. | 3,500 | 64,228 | ||||||
Takata Corp. | 3,500 | 63,940 | ||||||
The Yokohama Rubber Co., Ltd. | 17,000 | 119,493 | ||||||
Tokai Rika Co., Ltd. | 7,000 | 87,851 | ||||||
Tokai Rubber Industries Ltd. | 4,500 | 39,865 | ||||||
Topre Corp. | 2,000 | 17,269 | ||||||
Toyo Tire & Rubber Co., Ltd. | 25,000 | 60,739 | ||||||
Toyoda Gosei Co., Ltd. | 6,900 | 135,882 | ||||||
Toyota Boshoku Corp. | 12,400 | 117,575 | ||||||
TS Tech Co., Ltd. | 5,700 | 97,090 | ||||||
Unipres Corp. | 2,600 | 59,938 | ||||||
Yorozu Corp. | 1,600 | 23,743 | ||||||
2,402,290 | ||||||||
Banks 2.1% | ||||||||
Fukuoka Financial Group, Inc. | 28,000 | 109,496 | ||||||
Hokuhoku Financial Group, Inc. | 75,000 | 119,245 | ||||||
Kiyo Holdings, Inc. | 10,000 | 13,667 | ||||||
Senshu Ikeda Holdings, Inc. | 4,400 | 27,433 | ||||||
Seven Bank Ltd. | 18,000 | 51,462 | ||||||
Shinsei Bank Ltd. | 124,000 | 181,796 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 51,000 | 154,775 | ||||||
Suruga Bank Ltd. | 5,000 | 60,045 | ||||||
The 77 Bank Ltd. | 11,000 | 41,890 | ||||||
The Awa Bank Ltd. | 6,000 | 35,862 | ||||||
The Bank of Kyoto Ltd. | 7,000 | 60,167 | ||||||
The Chiba Bank Ltd. | 19,000 | 110,982 | ||||||
The Chugoku Bank Ltd. | 5,000 | 68,812 | ||||||
The Daishi Bank Ltd. | 11,000 | 36,349 | ||||||
The Gunma Bank Ltd. | 14,000 | 67,542 | ||||||
The Hachijuni Bank Ltd. | 15,000 | 77,487 | ||||||
The Hiroshima Bank Ltd. | 14,000 | 49,800 | ||||||
The Hyakugo Bank Ltd. | 8,000 | 35,007 | ||||||
The Iyo Bank Ltd. | 6,000 | 46,391 | ||||||
The Joyo Bank Ltd. | 16,000 | 77,432 | ||||||
The Juroku Bank Ltd. | 14,000 | 45,431 | ||||||
The Kagoshima Bank Ltd. | 6,000 | 38,253 | ||||||
The Keiyo Bank Ltd. | 7,000 | 30,688 | ||||||
The Musashino Bank Ltd. | 1,200 | 34,371 | ||||||
The Nishi-Nippon City Bank Ltd. | 21,000 | 47,885 | ||||||
The Ogaki Kyoritsu Bank Ltd. | 13,000 | 45,763 | ||||||
The San-in Godo Bank Ltd. | 6,000 | 41,501 | ||||||
The Shiga Bank Ltd. | 5,000 | 32,707 | ||||||
The Shizuoka Bank Ltd. | 11,000 | 112,508 | ||||||
Yamaguchi Financial Group, Inc. | 7,000 | 57,998 | ||||||
1,912,745 | ||||||||
Capital Goods 6.2% | ||||||||
Aica Kogyo Co., Ltd. | 3,500 | 59,250 | ||||||
Amada Co., Ltd. | 27,000 | 137,098 | ||||||
Asahi Diamond Industrial Co., Ltd. | 1,000 | 8,856 | ||||||
Central Glass Co., Ltd. | 21,000 | 60,782 | ||||||
Chiyoda Corp. | 6,000 | 96,920 | ||||||
CKD Corp. | 5,000 | 25,503 | ||||||
COMSYS Holdings Corp. | 12,900 | 171,486 | ||||||
Daifuku Co., Ltd. | 12,500 | 62,487 | ||||||
Daihen Corp. | 8,000 | 21,440 | ||||||
Ebara Corp. | 28,000 | 109,806 | ||||||
Fuji Electric Co., Ltd. | 46,000 | 93,318 | ||||||
Fuji Machine Manufacturing Co., Ltd. | 3,000 | 42,497 | ||||||
Fujitec Co., Ltd. | 6,000 | 35,955 | ||||||
Furukawa Co., Ltd. * | 39,000 | 34,705 | ||||||
Futaba Corp. | 3,500 | 41,318 | ||||||
Glory Ltd. | 3,900 | 94,654 | ||||||
GS Yuasa Corp. | 17,000 | 66,271 | ||||||
Hino Motors Ltd. | 21,000 | 162,327 | ||||||
Hitachi Cable Ltd. * | 38,000 | 49,937 | ||||||
Hitachi Construction Machinery Co., Ltd. | 7,800 | 128,237 | ||||||
Hitachi Koki Co., Ltd. | 4,500 | 32,278 | ||||||
Hitachi Zosen Corp. | 51,000 | 63,900 | ||||||
Hoshizaki Electric Co., Ltd. | 2,400 | 65,347 | ||||||
Inaba Denki Sangyo Co., Ltd. | 2,000 | 54,596 | ||||||
Inabata & Co., Ltd. | 11,200 | 72,390 | ||||||
Iseki & Co., Ltd. | 12,000 | 27,531 | ||||||
Iwatani Corp. | 27,000 | 105,823 | ||||||
Kamei Corp. | 3,000 | 25,919 | ||||||
Kandenko Co., Ltd. | 16,000 | 74,520 | ||||||
Kanematsu Corp. * | 64,000 | 75,495 | ||||||
Keihan Electric Railway Co., Ltd. | 17,000 | 82,180 | ||||||
Kinden Corp. | 17,000 | 106,436 | ||||||
Kitz Corp. | 11,000 | 46,456 |
See financial notes 39
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Komori Corp. | 9,200 | 48,188 | ||||||
Kurita Water Industries Ltd. | 5,000 | 113,507 | ||||||
Kuroda Electric Co., Ltd. | 5,400 | 60,852 | ||||||
Kyowa Exeo Corp. | 10,800 | 113,356 | ||||||
Mabuchi Motor Co., Ltd. | 1,400 | 59,328 | ||||||
Maeda Corp. | 15,000 | 66,355 | ||||||
Maeda Road Construction Co., Ltd. | 6,000 | 75,340 | ||||||
Makino Milling Machine Co., Ltd. | 6,000 | 28,210 | ||||||
Meidensha Corp. | 10,000 | 35,226 | ||||||
Minebea Co., Ltd. | 30,000 | 98,608 | ||||||
Mirait Holdings Corp. | 5,000 | 40,519 | ||||||
Misumi Group, Inc. | 3,600 | 88,447 | ||||||
Mitsui Engineering & Shipbuilding Co., Ltd. | 95,000 | 114,260 | ||||||
Mitsui Matsushima Co., Ltd. | 11,000 | 15,581 | ||||||
Miura Co., Ltd. | 1,700 | 38,851 | ||||||
Mori Seiki Co., Ltd. | 8,600 | 53,864 | ||||||
Nabtesco Corp. | 3,600 | 67,187 | ||||||
Nachi-Fujikoshi Corp. | 9,000 | 27,981 | ||||||
Nichias Corp. | 8,000 | 39,206 | ||||||
Nippo Corp. | 6,000 | 68,005 | ||||||
Nishimatsu Construction Co., Ltd. | 45,000 | 70,453 | ||||||
Nisshinbo Holdings, Inc. | 12,000 | 78,505 | ||||||
Nitta Corp. | 1,500 | 23,073 | ||||||
Nitto Boseki Co., Ltd. | 10,000 | 32,877 | ||||||
Nitto Kogyo Corp. | 2,000 | 30,624 | ||||||
Noritake Co., Ltd. | 11,000 | 25,654 | ||||||
Noritz Corp. | 3,300 | 54,215 | ||||||
NTN Corp. | 46,000 | 82,525 | ||||||
Oiles Corp. | 1,600 | 30,069 | ||||||
Okuma Corp. | 8,000 | 48,895 | ||||||
Okumura Corp. | 15,000 | 48,286 | ||||||
OSG Corp. | 3,200 | 41,947 | ||||||
Penta-Ocean Construction Co., Ltd. (a) | 19,500 | 46,893 | ||||||
Ryobi Ltd. | 17,000 | 34,608 | ||||||
Sankyo-Tateyama Holdings, Inc. | 26,000 | 56,359 | ||||||
Sanwa Holdings Corp. | 21,000 | 83,954 | ||||||
Shima Seiki Mfg., Ltd. | 2,200 | 27,998 | ||||||
ShinMaywa Industries Ltd. | 11,000 | 59,688 | ||||||
Sintokogio Ltd. | 3,800 | 26,817 | ||||||
Sumikin Bussan Corp. | 29,000 | 70,878 | ||||||
Tadano Ltd. | 6,000 | 44,264 | ||||||
Taihei Dengyo Kaisha Ltd. | 4,000 | 25,853 | ||||||
Taihei Kogyo Co., Ltd. | 7,000 | 27,896 | ||||||
Taikisha Ltd. | 2,400 | 50,957 | ||||||
Takara Standard Co., Ltd. | 7,000 | 52,533 | ||||||
Takasago Thermal Engineering Co., Ltd. | 6,000 | 47,211 | ||||||
The Japan Steel Works Ltd. | 15,000 | 88,917 | ||||||
The Nippon Road Co., Ltd. | 9,000 | 33,268 | ||||||
The Nippon Signal Co., Ltd. | 5,200 | 29,136 | ||||||
THK Co., Ltd. | 6,300 | 104,733 | ||||||
TOA Corp. | 21,000 | 30,020 | ||||||
Toda Corp. | 24,000 | 72,465 | ||||||
Toshiba Machine Co., Ltd. | 10,000 | 43,378 | ||||||
Toshiba Plant Systems & Services Corp. | 2,000 | 27,060 | ||||||
TOTO Ltd. | 19,000 | 142,395 | ||||||
Toyo Engineering Corp. | 11,000 | 45,530 | ||||||
Trusco Nakayama Corp. | 1,000 | 18,029 | ||||||
Tsubakimoto Chain Co. | 8,000 | 39,192 | ||||||
Ushio, Inc. | 6,700 | 70,692 | ||||||
Yamazen Corp. | 5,900 | 36,371 | ||||||
Yuasa Trading Co., Ltd. | 24,000 | 39,725 | ||||||
5,632,532 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Duskin Co., Ltd. | 4,200 | 79,768 | ||||||
Kokuyo Co., Ltd. | 13,700 | 106,444 | ||||||
Matsuda Sangyo Co., Ltd. | 2,000 | 26,599 | ||||||
Meitec Corp. | 2,200 | 48,438 | ||||||
Moshi Moshi Hotline, Inc. | 3,000 | 45,183 | ||||||
Nissha Printing Co., Ltd. * | 5,000 | 38,199 | ||||||
Okamura Corp. | 6,000 | 43,539 | ||||||
Park24 Co., Ltd. | 2,500 | 42,955 | ||||||
Sato Holdings Corp. | 2,000 | 27,832 | ||||||
Sohgo Security Services Co., Ltd. | 7,700 | 108,207 | ||||||
Toppan Forms Co., Ltd. | 6,400 | 60,289 | ||||||
627,453 | ||||||||
Consumer Durables & Apparel 1.7% | ||||||||
Alpine Electronics, Inc. | 5,300 | 46,064 | ||||||
Asics Corp. | 7,000 | 101,729 | ||||||
Foster Electric Co., Ltd. | 2,800 | 40,770 | ||||||
Funai Electric Co., Ltd. | 4,700 | 63,509 | ||||||
Gunze Ltd. | 25,000 | 62,609 | ||||||
Haseko Corp. * | 127,000 | 81,068 | ||||||
Heiwa Corp. | 900 | 14,146 | ||||||
JVC KENWOOD Holdings, Inc. | 16,360 | 58,070 | ||||||
Kurabo Industries Ltd. | 23,000 | 35,445 | ||||||
Onward Holdings Co., Ltd. | 13,000 | 96,259 | ||||||
PanaHome Corp. | 8,000 | 50,010 | ||||||
Pioneer Corp. * | 27,500 | 65,881 | ||||||
Rinnai Corp. | 1,300 | 88,791 | ||||||
Sangetsu Co., Ltd. | 2,000 | 53,251 | ||||||
Sankyo Co., Ltd. | 3,000 | 135,919 | ||||||
Sanyo Shokai Ltd. | 15,000 | 44,158 | ||||||
Sumitomo Forestry Co., Ltd. | 17,000 | 152,135 | ||||||
Tamron Co., Ltd. | 1,000 | 27,176 | ||||||
The Japan Wool Textile Co., Ltd. | 4,000 | 27,462 | ||||||
Token Corp. | 750 | 32,933 | ||||||
Tomy Co., Ltd. | 7,400 | 40,834 | ||||||
Toyobo Co., Ltd. | 85,000 | 93,675 | ||||||
Unitika Ltd. * | 56,000 | 28,048 | ||||||
Wacoal Holdings Corp. | 6,000 | 67,505 | ||||||
1,507,447 | ||||||||
Consumer Services 0.6% | ||||||||
Accordia Golf Co., Ltd. | 60 | 42,691 | ||||||
Doutor Nichires Holdings Co., Ltd. | 3,200 | 40,279 | ||||||
H.I.S. Co., Ltd. | 1,700 | 51,383 | ||||||
McDonald’s Holdings Co., Ltd. | 4,000 | 111,145 | ||||||
MOS Food Services, Inc. | 600 | 11,477 | ||||||
Plenus Co., Ltd. | 2,000 | 32,536 | ||||||
Resorttrust, Inc. | 1,800 | 33,556 | ||||||
Round One Corp. | 5,500 | 27,827 | ||||||
Saizeriya Co., Ltd. | 2,400 | 33,719 | ||||||
Tokyo Dome Corp. * | 11,000 | 37,088 | ||||||
Yoshinoya Holdings Co., Ltd. | 40 | 50,729 | ||||||
Zensho Holdings Co., Ltd. | 3,100 | 37,703 | ||||||
510,133 | ||||||||
Diversified Financials 0.9% | ||||||||
Acom Co., Ltd. * | 5,400 | 159,563 | ||||||
Aeon Credit Service Co., Ltd. | 4,500 | 95,610 | ||||||
Aiful Corp. (a)* | 63,200 | 173,346 |
40 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hitachi Capital Corp. | 2,600 | 49,932 | ||||||
Jaccs Co., Ltd. | 15,000 | 63,908 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 1,330 | 57,345 | ||||||
Orient Corp. * | 65,000 | 122,198 | ||||||
SBI Holdings, Inc. | 13,000 | 91,038 | ||||||
812,940 | ||||||||
Energy 0.2% | ||||||||
AOC Holdings, Inc. | 16,200 | 55,624 | ||||||
Japan Petroleum Exploration Co. | 1,700 | 63,988 | ||||||
Shinko Plantech Co., Ltd. | 4,400 | 36,148 | ||||||
155,760 | ||||||||
Food & Staples Retailing 0.9% | ||||||||
Arcs Co., Ltd. | 1,600 | 33,770 | ||||||
Cawachi Ltd. | 2,700 | 57,595 | ||||||
cocokara fine, Inc. | 1,800 | 60,619 | ||||||
FamilyMart Co., Ltd. | 2,400 | 116,306 | ||||||
Heiwado Co., Ltd. | 4,500 | 62,622 | ||||||
Kato Sangyo Co., Ltd. | 2,100 | 37,983 | ||||||
Matsumotokiyoshi Holdings Co., Ltd. | 4,900 | 118,001 | ||||||
Sugi Holdings Co., Ltd. | 2,100 | 75,891 | ||||||
Sundrug Co., Ltd. | 2,100 | 77,346 | ||||||
Tsuruha Holdings, Inc. | 1,000 | 75,800 | ||||||
Valor Co., Ltd. | 4,300 | 73,533 | ||||||
Welcia Holdings Co., Ltd. | 400 | 14,700 | ||||||
804,166 | ||||||||
Food, Beverage & Tobacco 2.3% | ||||||||
Calbee, Inc. | 800 | 73,485 | ||||||
Coca-Cola Central Japan Co., Ltd. | 5,700 | 70,061 | ||||||
Coca-Cola West Co., Ltd. | 8,000 | 122,641 | ||||||
DyDo Drinco, Inc. | 700 | 29,868 | ||||||
Ezaki Glico Co., Ltd. | 6,000 | 67,654 | ||||||
Fuji Oil Co., Ltd. | 4,600 | 61,227 | ||||||
Hokuto Corp. | 1,600 | 31,980 | ||||||
House Foods Corp. | 6,000 | 96,836 | ||||||
Ito En Ltd. | 4,900 | 92,207 | ||||||
Itoham Foods, Inc. | 28,000 | 111,894 | ||||||
J-Oil Mills, Inc. | 13,000 | 33,724 | ||||||
Kagome Co., Ltd. | 3,400 | 69,322 | ||||||
Kewpie Corp. | 9,300 | 153,596 | ||||||
Marudai Food Co., Ltd. | 8,000 | 28,067 | ||||||
Maruha Nichiro Holdings, Inc. | 43,000 | 70,659 | ||||||
Megmilk Snow Brand Co., Ltd. | 4,600 | 77,667 | ||||||
Mitsui Sugar Co., Ltd. | 8,000 | 25,775 | ||||||
Morinaga Milk Industry Co., Ltd. | 30,000 | 99,204 | ||||||
Nichirei Corp. | 25,000 | 137,902 | ||||||
Nippon Flour Mills Co., Ltd. | 16,000 | 66,948 | ||||||
Nippon Suisan Kaisha Ltd. | 25,300 | 55,462 | ||||||
Nissin Food Holdings Co., Ltd. | 4,000 | 151,255 | ||||||
Prima Meat Packers Ltd. | 9,000 | 16,248 | ||||||
Sapporo Holdings Ltd. | 29,000 | 80,986 | ||||||
Takara Holdings, Inc. | 11,000 | 82,397 | ||||||
The Nisshin Oillio Group Ltd. | 14,000 | 51,545 | ||||||
Warabeya Nichiyo Co., Ltd. | 1,000 | 20,420 | ||||||
Yakult Honsha Co., Ltd. | 3,000 | 139,761 | ||||||
2,118,791 | ||||||||
Health Care Equipment & Services 0.5% | ||||||||
Miraca Holdings, Inc. | 2,500 | 105,577 | ||||||
Nichii Gakkan Co. | 3,300 | 30,054 | ||||||
Nihon Kohden Corp. | 1,800 | 66,958 | ||||||
Nipro Corp. | 7,900 | 54,014 | ||||||
Sysmex Corp. | 1,700 | 79,935 | ||||||
Toho Holdings Co., Ltd. | 5,000 | 102,211 | ||||||
438,749 | ||||||||
Household & Personal Products 0.6% | ||||||||
Fancl Corp. | 3,700 | 39,760 | ||||||
Kobayashi Pharmaceutical Co., Ltd. | 1,200 | 63,328 | ||||||
Kose Corp. | 1,900 | 41,006 | ||||||
Lion Corp. | 13,000 | 75,108 | ||||||
Mandom Corp. | 1,200 | 31,669 | ||||||
Pigeon Corp. | 1,000 | 46,077 | ||||||
Pola Orbis Holdings, Inc. | 2,700 | 85,001 | ||||||
Unicharm Corp. | 2,200 | 119,031 | ||||||
500,980 | ||||||||
Insurance 0.0% | ||||||||
Sony Financial Holdings, Inc. | 2,399 | 42,780 | ||||||
Materials 3.9% | ||||||||
Adeka Corp. | 9,200 | 69,385 | ||||||
Aichi Steel Corp. | 10,000 | 37,239 | ||||||
Air Water, Inc. | 11,000 | 137,832 | ||||||
Asahi Holdings, Inc. | 2,400 | 40,477 | ||||||
Chugoku Marine Paints Ltd. | 6,000 | 29,621 | ||||||
Daicel Corp. | 24,000 | 144,093 | ||||||
Daido Steel Co., Ltd. | 16,000 | 69,387 | ||||||
Daio Paper Corp. | 15,000 | 82,859 | ||||||
Denki Kagaku Kogyo K.K. | 40,000 | 123,509 | ||||||
Dowa Holdings Co., Ltd. | 17,000 | 113,434 | ||||||
Earth Chemical Co., Ltd. | 1,000 | 37,131 | ||||||
FP Corp. | 500 | 37,587 | ||||||
Fuji Seal International, Inc. | 2,300 | 48,999 | ||||||
Furukawa-Sky Aluminum Corp. | 10,000 | 23,453 | ||||||
Godo Steel Ltd. | 17,000 | 25,348 | ||||||
Hitachi Metals Ltd. | 9,000 | 84,319 | ||||||
Hokuetsu Kishu Paper Co., Ltd. | 9,000 | 46,114 | ||||||
Ishihara Sangyo Kaisha Ltd. * | 34,000 | 26,409 | ||||||
Kansai Paint Co., Ltd. | 10,000 | 107,722 | ||||||
Kureha Corp. | 13,000 | 50,558 | ||||||
Kyoei Steel Ltd. | 2,800 | 43,664 | ||||||
Lintec Corp. | 3,800 | 65,731 | ||||||
Maruichi Steel Tube Ltd. | 3,500 | 72,785 | ||||||
Mitsubishi Paper Mills Ltd. * | 51,000 | 43,432 | ||||||
Mitsubishi Steel Mfg. Co., Ltd. | 14,000 | 23,890 | ||||||
Nihon Parkerizing Co., Ltd. | 3,000 | 45,276 | ||||||
Nippon Denko Co., Ltd. | 9,000 | 21,078 | ||||||
Nippon Kayaku Co., Ltd. | 8,000 | 89,054 | ||||||
Nippon Light Metal Holdings Co., Ltd. * | 78,000 | 70,416 | ||||||
Nippon Paint Co., Ltd. | 10,000 | 80,030 | ||||||
Nippon Shokubai Co., Ltd. | 8,000 | 78,464 | ||||||
Nippon Soda Co., Ltd. | 12,000 | 52,162 | ||||||
Nissan Chemical Industries Ltd. | 10,400 | 114,801 | ||||||
Nisshin Steel Holdings Co., Ltd. * | 10,000 | 66,266 | ||||||
Nittetsu Mining Co., Ltd. | 9,000 | 36,203 | ||||||
Nof Corp. | 12,000 | 57,296 | ||||||
Pacific Metals Co., Ltd. | 17,000 | 57,789 | ||||||
Rengo Co., Ltd. | 18,000 | 78,674 | ||||||
Sakai Chemical Industry Co., Ltd. | 11,000 | 29,620 | ||||||
Sanyo Chemical Industries Ltd. | 5,000 | 28,212 | ||||||
Sanyo Special Steel Co., Ltd. | 10,000 | 29,817 | ||||||
Sumitomo Bakelite Co., Ltd. | 17,000 | 60,677 | ||||||
Sumitomo Light Metal Industries Ltd. | 34,000 | 27,685 | ||||||
Sumitomo Osaka Cement Co., Ltd. | 28,000 | 91,161 |
See financial notes 41
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Taiyo Nippon Sanso Corp. | 19,000 | 104,283 | ||||||
Toagosei Co., Ltd. | 19,000 | 77,461 | ||||||
Toho Zinc Co., Ltd. | 12,000 | 40,762 | ||||||
Tokai Carbon Co., Ltd. | 15,000 | 48,190 | ||||||
Tokuyama Corp. (a) | 50,000 | 95,938 | ||||||
Tokyo Ohka Kogyo Co., Ltd. | 2,500 | 50,972 | ||||||
Tokyo Steel Manufacturing Co., Ltd. | 18,800 | 60,401 | ||||||
Topy Industries Ltd. | 22,000 | 42,732 | ||||||
Toyo Ink SC Holdings Co., Ltd. | 20,000 | 73,693 | ||||||
Toyo Kohan Co., Ltd. | 9,000 | 22,459 | ||||||
Yamato Kogyo Co., Ltd. | 2,800 | 78,650 | ||||||
Yodogawa Steel Works Ltd. | 17,000 | 54,749 | ||||||
Zeon Corp. | 10,000 | 72,126 | ||||||
3,522,075 | ||||||||
Media 0.6% | ||||||||
Asatsu-DK, Inc. | 3,900 | 89,607 | ||||||
Avex Group Holdings, Inc. | 2,100 | 41,532 | ||||||
Daiichikosho Co., Ltd. | 3,000 | 74,224 | ||||||
Jupiter Telecommunications Co., Ltd. | 71 | 96,499 | ||||||
Kadokawa Group Holdings, Inc. | 1,500 | 46,110 | ||||||
SKY Perfect JSAT Holdings, Inc. | 135 | 61,686 | ||||||
Toho Co., Ltd. | 5,000 | 87,206 | ||||||
Tokyo Broadcasting System Holdings, Inc. | 3,000 | 29,171 | ||||||
TV Asahi Corp. | 1,700 | 21,918 | ||||||
547,953 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.1% | ||||||||
Chugai Pharmaceutical Co., Ltd. | 8,000 | 162,090 | ||||||
Dainippon Sumitomo Pharma Co., Ltd. | 6,400 | 73,612 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 1,600 | 82,729 | ||||||
Kaken Pharmaceutical Co., Ltd. | 3,000 | 46,466 | ||||||
Kissei Pharmaceutical Co., Ltd. | 1,800 | 30,684 | ||||||
Kyorin Holdings, Inc. | 2,600 | 54,969 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 11,000 | 117,087 | ||||||
Mitsubishi Tanabe Pharma Corp. | 8,000 | 115,317 | ||||||
Mochida Pharmaceutical Co., Ltd. | 4,000 | 51,603 | ||||||
Nippon Shinyaku Co., Ltd. | 2,000 | 24,094 | ||||||
Rohto Pharmaceutical Co., Ltd. | 5,000 | 68,910 | ||||||
Santen Pharmaceutical Co., Ltd. | 2,600 | 113,894 | ||||||
Sawai Pharmaceutical Co., Ltd. | 100 | 11,047 | ||||||
Tsumura & Co. | 2,200 | 70,353 | ||||||
1,022,855 | ||||||||
Real Estate 1.2% | ||||||||
Advance Residence Investment Corp. | 13 | 28,187 | ||||||
Aeon Mall Co., Ltd. | 1,400 | 36,313 | ||||||
Daikyo, Inc. | 13,000 | 34,682 | ||||||
Japan Prime Realty Investment Corp. | 14 | 42,193 | ||||||
Japan Real Estate Investment Corp. | 9 | 90,120 | ||||||
Japan Retail Fund Investment Corp. | 45 | 82,039 | ||||||
Kenedix Realty Investment Corp. | 10 | 34,158 | ||||||
Kenedix, Inc. * | 252 | 32,739 | ||||||
Leopalace21 Corp. * | 17,000 | 51,183 | ||||||
Nippon Building Fund, Inc. | 12 | 128,919 | ||||||
Nomura Real Estate Holdings, Inc. | 4,000 | 71,799 | ||||||
Nomura Real Estate Office Fund, Inc. | 8 | 50,329 | ||||||
NTT Urban Development Corp. | 43 | 35,432 | ||||||
Orix JREIT, Inc. | 8 | 38,953 | ||||||
Tokyo Tatemono Co., Ltd. * | 26,000 | 107,008 | ||||||
Tokyu Land Corp. | 29,000 | 162,804 | ||||||
United Urban Investment Corp. | 30 | 36,071 | ||||||
1,062,929 | ||||||||
Retailing 2.1% | ||||||||
ABC-Mart, Inc. | 300 | 13,157 | ||||||
Alpen Co., Ltd. | 1,800 | 33,023 | ||||||
Aoyama Trading Co., Ltd. | 6,300 | 124,503 | ||||||
Arata Corp. | 6,000 | 24,570 | ||||||
Arc Land Sakamoto Co., Ltd. | 700 | 10,146 | ||||||
ASKUL Corp. | 2,000 | 30,047 | ||||||
Autobacs Seven Co., Ltd. | 2,100 | 86,176 | ||||||
Bic Camera, Inc. (a) | 74 | 36,155 | ||||||
Canon Marketing Japan, Inc. | 11,200 | 163,234 | ||||||
Chiyoda Co., Ltd. | 2,000 | 57,211 | ||||||
DCM Holdings Co., Ltd. | 13,800 | 94,029 | ||||||
Don Quijote Co., Ltd. | 1,800 | 70,940 | ||||||
Doshisha Co., Ltd. | 1,000 | 27,832 | ||||||
GEO Holdings Corp. | 52 | 58,445 | ||||||
H2O Retailing Corp. | 12,000 | 123,439 | ||||||
Hikari Tsushin, Inc. | 1,400 | 77,355 | ||||||
Izumi Co., Ltd. | 3,000 | 72,902 | ||||||
K’s Holdings Corp. | 4,240 | 113,385 | ||||||
Kohnan Shoji Co., Ltd. | 4,000 | 48,435 | ||||||
Komeri Co., Ltd. | 2,000 | 48,272 | ||||||
NEC Mobiling Ltd. | 400 | 16,641 | ||||||
Nitori Holdings Co., Ltd. | 1,100 | 89,830 | ||||||
Parco Co., Ltd. | 4,000 | 41,976 | ||||||
Point, Inc. | 1,000 | 38,087 | ||||||
Rakuten, Inc. | 5,000 | 44,946 | ||||||
Ryohin Keikaku Co., Ltd. | 1,900 | 125,824 | ||||||
The Daiei, Inc. * | 48,600 | 91,971 | ||||||
USS Co., Ltd. | 890 | 93,577 | ||||||
Xebio Co., Ltd. | 2,900 | 56,746 | ||||||
1,912,854 | ||||||||
Semiconductors & Semiconductor Equipment 0.6% | ||||||||
Advantest Corp. | 8,900 | 112,568 | ||||||
Dainippon Screen Manufacturing Co., Ltd. | 8,000 | 48,451 | ||||||
Disco Corp. | 700 | 34,544 | ||||||
Mimasu Semiconductor Industry Co., Ltd. | 3,000 | 23,580 | ||||||
Renesas Electronics Corp. * | 12,000 | 44,443 | ||||||
Sanken Electric Co., Ltd. | 12,000 | 37,485 | ||||||
Shinko Electric Industries Co., Ltd. | 9,100 | 56,659 | ||||||
Sumco Corp. * | 13,000 | 89,162 | ||||||
Tokyo Seimitsu Co., Ltd. | 1,500 | 22,665 | ||||||
ULVAC, Inc. * | 5,800 | 36,720 | ||||||
506,277 | ||||||||
Software & Services 1.4% | ||||||||
Capcom Co., Ltd. | 2,300 | 43,865 | ||||||
Dena Co., Ltd. | 686 | 21,411 | ||||||
DTS Corp. | 1,000 | 13,814 | ||||||
Fuji Soft, Inc. | 2,300 | 48,830 | ||||||
IT Holdings Corp. | 11,600 | 144,572 | ||||||
Itochu Techno-Solutions Corp. | 1,500 | 77,604 | ||||||
NEC Networks & System Integration Corp. | 3,600 | 65,766 | ||||||
Net One Systems Co., Ltd. | 5,400 | 60,106 | ||||||
Nihon Unisys Ltd. | 9,200 | 66,893 | ||||||
Nomura Research Institute Ltd. | 6,000 | 127,540 | ||||||
NS Solutions Corp. | 1,300 | 26,313 |
42 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
NSD Co., Ltd. | 4,200 | 40,208 | ||||||
OBIC Co., Ltd. | 200 | 41,161 | ||||||
Oracle Corp., Japan | 1,300 | 57,813 | ||||||
Otsuka Corp. | 1,400 | 114,144 | ||||||
SCSK Corp. | 2,476 | 42,162 | ||||||
Square Enix Holdings Co., Ltd. | 4,600 | 64,843 | ||||||
Transcosmos, Inc. | 2,600 | 28,960 | ||||||
Trend Micro, Inc. | 3,300 | 92,506 | ||||||
Yahoo Japan Corp. | 244 | 83,972 | ||||||
1,262,483 | ||||||||
Technology Hardware & Equipment 2.1% | ||||||||
Alps Electric Co., Ltd. | 20,700 | 122,380 | ||||||
Amano Corp. | 5,700 | 46,778 | ||||||
Anritsu Corp. | 3,000 | 37,739 | ||||||
Azbil Corp. | 5,300 | 108,425 | ||||||
Canon Electronics, Inc. | 1,300 | 27,396 | ||||||
Citizen Holdings Co., Ltd. | 22,000 | 111,656 | ||||||
Cmk Corp. | 5,000 | 16,318 | ||||||
Daiwabo Holdings Co., Ltd. | 10,000 | 18,530 | ||||||
Eizo Nanao Corp. | 2,000 | 31,377 | ||||||
Hamamatsu Photonics K.K. | 2,100 | 72,808 | ||||||
Hirose Electric Co., Ltd. | 1,400 | 149,849 | ||||||
Hitachi Kokusai Electric, Inc. | 4,000 | 27,138 | ||||||
Horiba Ltd. | 1,700 | 46,385 | ||||||
Hosiden Corp. | 18,300 | 99,245 | ||||||
Japan Aviation Electronics Industry Ltd. | 6,000 | 47,836 | ||||||
Macnica, Inc. | 2,000 | 39,406 | ||||||
Nichicon Corp. | 4,300 | 29,273 | ||||||
Nippon Chemi-Con Corp. * | 16,000 | 23,272 | ||||||
Oki Electric Industry Co., Ltd. * | 73,000 | 73,338 | ||||||
Riso Kagaku Corp. | 2,700 | 43,806 | ||||||
Ryosan Co., Ltd. | 6,400 | 108,031 | ||||||
Ryoyo Electro Corp. | 4,300 | 42,967 | ||||||
Shimadzu Corp. | 13,000 | 87,545 | ||||||
SMK Corp. | 9,000 | 22,568 | ||||||
Star Micronics Co., Ltd. | 4,100 | 38,379 | ||||||
Taiyo Yuden Co., Ltd. | 11,500 | 97,561 | ||||||
Toshiba Tec Corp. | 19,000 | 88,792 | ||||||
Yaskawa Electric Corp. | 13,000 | 93,171 | ||||||
Yokogawa Electric Corp. | 12,000 | 136,598 | ||||||
1,888,567 | ||||||||
Telecommunication Services 0.1% | ||||||||
eAccess Ltd. | 263 | 132,727 | ||||||
Transportation 1.6% | ||||||||
All Nippon Airways Co., Ltd. | 53,000 | 112,250 | ||||||
Fukuyama Transporting Co., Ltd. | 11,000 | 57,741 | ||||||
Hitachi Transport System Ltd. | 3,800 | 57,041 | ||||||
Japan Airport Terminal Co., Ltd. | 4,000 | 43,480 | ||||||
Kamigumi Co., Ltd. | 18,000 | 145,170 | ||||||
Keikyu Corp. | 11,000 | 103,599 | ||||||
Keio Corp. | 20,000 | 151,786 | ||||||
Keisei Electric Railway Co., Ltd. | 10,000 | 91,677 | ||||||
Kintetsu World Express, Inc. | 1,800 | 50,698 | ||||||
Mitsubishi Logistics Corp. | 6,000 | 77,380 | ||||||
Mitsui-Soko Co., Ltd. | 8,000 | 24,465 | ||||||
Nippon Konpo Unyu Soko Co., Ltd. | 5,400 | 65,064 | ||||||
Nishi-Nippon Railroad Co., Ltd. | 17,000 | 72,188 | ||||||
Odakyu Electric Railway Co., Ltd. | 16,000 | 169,773 | ||||||
Sankyu, Inc. | 30,000 | 104,509 | ||||||
Senko Co., Ltd. | 9,000 | 36,423 | ||||||
Sotetsu Holdings, Inc. | 17,000 | 57,693 | ||||||
The Sumitomo Warehouse Co., Ltd. | 9,000 | 37,654 | ||||||
Yusen Logistics Co., Ltd. | 2,000 | 16,941 | ||||||
1,475,532 | ||||||||
Utilities 0.2% | ||||||||
The Okinawa Electric Power Co., Inc. | 2,100 | 64,316 | ||||||
Toho Gas Co., Ltd. | 24,000 | 145,461 | ||||||
209,777 | ||||||||
31,010,795 | ||||||||
Luxembourg 0.4% | ||||||||
Banks 0.1% | ||||||||
Espirito Santo Financial Group S.A. * | 9,856 | 69,495 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Regus plc | 39,594 | 64,200 | ||||||
Household & Personal Products 0.0% | ||||||||
Oriflame Cosmetics S.A. SDR | 2,165 | 59,829 | ||||||
Materials 0.1% | ||||||||
Ternium S.A. ADR | 3,900 | 80,067 | ||||||
Telecommunication Services 0.1% | ||||||||
Colt Group S.A. * | 45,569 | 81,258 | ||||||
354,849 | ||||||||
Netherlands 1.9% | ||||||||
Capital Goods 0.5% | ||||||||
Aalberts Industries N.V. | 5,300 | 96,339 | ||||||
AerCap Holdings N.V. * | 4,000 | 49,840 | ||||||
Arcadis N.V. | 3,041 | 64,966 | ||||||
Koninklijke Boskalis Westminster N.V. | 3,754 | 143,180 | ||||||
Royal Imtech N.V. | 4,317 | 108,519 | ||||||
Sensata Technologies Holding N.V. * | 1,000 | 28,170 | ||||||
491,014 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
USG People N.V. | 16,106 | 113,127 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Accell Group | 1,726 | 28,467 | ||||||
TomTom N.V. * | 13,529 | 67,560 | ||||||
96,027 | ||||||||
Energy 0.0% | ||||||||
Dockwise Ltd. * | 2,036 | 32,723 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Sligro Food Group N.V. | 3,066 | 83,458 | ||||||
X5 Retail Group N.V. - Reg’d GDR * | 2,524 | 48,030 | ||||||
131,488 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Mediq N.V. | 9,047 | 146,841 | ||||||
Insurance 0.0% | ||||||||
Brit Insurance Holdings N.V. (b)(c)* | 571 | 4,930 | ||||||
Materials 0.1% | ||||||||
AMG Advanced Metallurgical Group N.V. * | 3,227 | 25,296 | ||||||
Koninklijke Ten Cate N.V. | 2,419 | 53,625 | ||||||
78,921 | ||||||||
Real Estate 0.3% | ||||||||
Corio N.V. | 2,434 | 108,429 |
See financial notes 43
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Eurocommercial Properties N.V. | 1,062 | 41,648 | ||||||
VastNed Retail N.V. | 1,252 | 58,006 | ||||||
Wereldhave N.V. | 1,050 | 62,066 | ||||||
270,149 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASM International N.V. | 1,300 | 41,162 | ||||||
Software & Services 0.0% | ||||||||
Unit 4 N.V. | 521 | 14,309 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Gemalto N.V. | 2,009 | 181,454 | ||||||
TKH Group N.V. CVA | 2,231 | 51,041 | ||||||
232,495 | ||||||||
Telecommunication Services 0.0% | ||||||||
Ziggo NV | 475 | 15,385 | ||||||
Transportation 0.1% | ||||||||
Koninklijke Vopak N.V. | 1,243 | 86,538 | ||||||
1,755,109 | ||||||||
New Zealand 0.4% | ||||||||
Consumer Services 0.1% | ||||||||
SKYCITY Entertainment Group Ltd. | 23,959 | 76,416 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Fisher & Paykel Healthcare Corp., Ltd. | 20,799 | 40,183 | ||||||
Materials 0.1% | ||||||||
Nuplex Industries Ltd. | 22,321 | 55,391 | ||||||
Media 0.1% | ||||||||
Sky Network Television Ltd. | 12,108 | 53,475 | ||||||
Transportation 0.0% | ||||||||
Auckland International Airport Ltd. | 20,349 | 44,887 | ||||||
Utilities 0.1% | ||||||||
Contact Energy Ltd. * | 17,367 | 79,083 | ||||||
349,435 | ||||||||
Norway 1.2% | ||||||||
Banks 0.1% | ||||||||
SpareBank 1 SR Bank A.S.A. | 5,944 | 38,367 | ||||||
Sparebanken 1 SMN | 6,247 | 40,476 | ||||||
78,843 | ||||||||
Capital Goods 0.1% | ||||||||
Veidekke A.S.A. | 9,474 | 78,888 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Tomra Systems A.S.A. | 6,755 | 55,494 | ||||||
Diversified Financials 0.1% | ||||||||
Aker ASA, Class A | 1,684 | 59,461 | ||||||
Energy 0.4% | ||||||||
Fred Olsen Energy A.S.A | 1,630 | 76,330 | ||||||
Petroleum Geo-Services A.S.A. | 11,455 | 197,937 | ||||||
TGS Nopec Geophysical Co., A.S.A. | 3,164 | 107,503 | ||||||
381,770 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Cermaq A.S.A. * | 3,849 | 52,672 | ||||||
Insurance 0.1% | ||||||||
Gjensidige Forsikring A.S.A. | 5,478 | 79,991 | ||||||
Storebrand ASA * | 24,020 | 120,877 | ||||||
200,868 | ||||||||
Media 0.1% | ||||||||
Schibsted A.S.A. | 2,222 | 83,159 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Renewable Energy Corp. A.S.A. (a)* | 141,452 | 24,785 | ||||||
Software & Services 0.1% | ||||||||
Atea A.S.A. | 4,405 | 46,664 | ||||||
Transportation 0.0% | ||||||||
Golden Ocean Group Ltd. * | 50,340 | 38,084 | ||||||
1,100,688 | ||||||||
Portugal 0.5% | ||||||||
Banks 0.1% | ||||||||
Banco BPI S.A. - Reg’d * | 88,818 | 99,061 | ||||||
Capital Goods 0.1% | ||||||||
Sonae | 143,014 | 106,165 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Jeronimo Martins, SGPS, S.A. | 4,485 | 78,514 | ||||||
Materials 0.1% | ||||||||
CIMPOR-Cimentos de Portugal, SGPS, S.A. | 10,200 | 45,612 | ||||||
Semapa-Sociedade de Investimento e Gestao, SGPS, S.A. | 8,323 | 58,923 | ||||||
104,535 | ||||||||
Media 0.1% | ||||||||
Zon Multimedia-Servicos de Telecomunicacoes e Multimedia SGPS, S.A. | 16,497 | 52,323 | ||||||
Transportation 0.0% | ||||||||
Brisa Auto-Estradas de Portugal S.A. * | 17,250 | 39,945 | ||||||
Utilities 0.0% | ||||||||
Redes Energeticas Nacionais S.A. | 6,236 | 16,077 | ||||||
496,620 | ||||||||
Republic of Korea 0.0% | ||||||||
Automobiles & Components 0.0% | ||||||||
Daewoo Motor Sales Corp. (b)(c)* | 2,480 | — | ||||||
Capital Goods 0.0% | ||||||||
Daewoo Industrial Development Co., Ltd. (b)(c)* | 1,773 | — | ||||||
— | ||||||||
Singapore 1.9% | ||||||||
Capital Goods 0.3% | ||||||||
Cosco Corp., (Singapore) Ltd. (a) | 49,431 | 35,484 | ||||||
SembCorp Marine Ltd. | 23,096 | 88,716 | ||||||
Singapore Technologies Engineering Ltd. | 48,000 | 138,148 | ||||||
262,348 | ||||||||
Diversified Financials 0.1% | ||||||||
Singapore Exchange Ltd. | 13,000 | 71,450 |
44 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.0% | ||||||||
Sakari Resources Ltd (b) | 18,000 | 27,299 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Olam International Ltd. (a) | 39,704 | 63,781 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Golden Agri-Resources Ltd. | 160,000 | 81,718 | ||||||
Real Estate 0.7% | ||||||||
Ascendas REIT | 28,000 | 54,024 | ||||||
CapitaCommercial Trust | 31,302 | 40,162 | ||||||
Capitaland Ltd. | 65,000 | 173,105 | ||||||
CapitaMall Trust | 34,000 | 58,500 | ||||||
City Developments Ltd. | 14,000 | 130,718 | ||||||
Keppel Land Ltd. | 14,000 | 38,780 | ||||||
Suntec Real Estate Investment Trust | 36,000 | 47,284 | ||||||
UOL Group Ltd. | 12,000 | 55,524 | ||||||
Wing Tai Holdings Ltd. | 30,000 | 42,452 | ||||||
640,549 | ||||||||
Retailing 0.2% | ||||||||
Jardine Cycle & Carriage Ltd. | 4,000 | 160,939 | ||||||
Telecommunication Services 0.1% | ||||||||
M1 Ltd. | 26,000 | 55,585 | ||||||
StarHub Ltd. | 23,000 | 69,198 | ||||||
124,783 | ||||||||
Transportation 0.3% | ||||||||
Hutchison Port Holdings Trust, Class U | 63,000 | 48,914 | ||||||
Neptune Orient Lines Ltd. (a)* | 122,000 | 115,468 | ||||||
SATS Ltd. | 27,749 | 63,268 | ||||||
Singapore Post Ltd. | 55,000 | 51,370 | ||||||
SMRT Corp., Ltd. | 28,000 | 39,782 | ||||||
318,802 | ||||||||
1,751,669 | ||||||||
Spain 2.1% | ||||||||
Banks 0.1% | ||||||||
Banco Espanol de Credito S.A. (a) | 11,044 | 40,428 | ||||||
Bankinter S.A. | 19,000 | 75,466 | ||||||
Caja de Ahorros del Mediterraneo (b)(c)* | 5,382 | — | ||||||
115,894 | ||||||||
Capital Goods 0.5% | ||||||||
Abengoa S.A. | 12,422 | 43,477 | ||||||
Abengoa S.A., B Shares * | 21,688 | 75,140 | ||||||
Construcciones y Auxiliar de Ferrocarriles S.A. | 30 | 14,283 | ||||||
Gamesa Corp. Tecnologica S.A. | 56,000 | 114,409 | ||||||
Obrascon Huarte Lain S.A. | 2,700 | 70,779 | ||||||
Sacyr Vallehermoso S.A. * | 23,082 | 45,989 | ||||||
Zardoya Otis S.A. | 6,840 | 84,604 | ||||||
448,681 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Prosegur Cia de Seguridad S.A. - Reg’d | 7,625 | 41,601 | ||||||
Consumer Services 0.1% | ||||||||
Melia Hotels International S.A. | 2,340 | 17,413 | ||||||
NH Hoteles S.A. * | 12,169 | 44,180 | ||||||
61,593 | ||||||||
Diversified Financials 0.1% | ||||||||
Bolsas y Mercados Espanoles (a) | 3,164 | 68,366 | ||||||
Energy 0.1% | ||||||||
Tecnicas Reunidas S.A. | 1,041 | 51,278 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Ebro Foods S.A. | 6,082 | 111,712 | ||||||
Pescanova S.A. | 625 | 11,602 | ||||||
Viscofan S.A. | 1,442 | 69,867 | ||||||
193,181 | ||||||||
Insurance 0.2% | ||||||||
Grupo Catalana Occidente S.A. | 2,393 | 39,078 | ||||||
Mapfre S.A. | 48,000 | 133,154 | ||||||
172,232 | ||||||||
Materials 0.1% | ||||||||
Acerinox S.A. | 12,400 | 129,434 | ||||||
Media 0.2% | ||||||||
Antena 3 de Television S.A. | 6,953 | 27,906 | ||||||
Mediaset Espana Comunicacion S.A. | 19,503 | 104,971 | ||||||
132,877 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Almirall S.A. | 4,425 | 39,625 | ||||||
Grifols S.A. * | 1,844 | 64,043 | ||||||
Grifols S.A. ADR * | 300 | 7,548 | ||||||
111,216 | ||||||||
Software & Services 0.3% | ||||||||
Amadeus IT Holding S.A., A Shares | 7,800 | 193,224 | ||||||
Indra Sistemas S.A. | 10,500 | 120,141 | ||||||
313,365 | ||||||||
Transportation 0.1% | ||||||||
International Consolidated Airlines Group S.A. * | 29,000 | 75,600 | ||||||
1,915,318 | ||||||||
Sweden 2.4% | ||||||||
Capital Goods 0.4% | ||||||||
Indutrade AB | 1,368 | 38,362 | ||||||
Lindab International AB | 11,688 | 87,726 | ||||||
NIBE Industrier AB, B Shares | 1,958 | 29,649 | ||||||
Peab AB | 19,277 | 91,030 | ||||||
Saab AB, Class B | 5,595 | 106,284 | ||||||
353,051 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
AF AB, B Shares | 1,664 | 36,962 | ||||||
Intrum Justitia AB | 2,993 | 43,306 | ||||||
Loomis AB, B Shares | 5,469 | 75,155 | ||||||
155,423 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
JM AB | 7,203 | 129,748 | ||||||
Nobia AB * | 17,243 | 69,477 | ||||||
199,225 | ||||||||
Diversified Financials 0.2% | ||||||||
D. Carnegie & Co. AB (b)(c)* | 851 | — | ||||||
L E Lundbergforetagen AB, B Shares | 1,944 | 65,967 | ||||||
Ratos AB, B Shares | 12,649 | 108,605 | ||||||
174,572 |
See financial notes 45
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.1% | ||||||||
Lundin Petroleum AB * | 2,276 | 54,610 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Axfood AB | 1,734 | 64,189 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
AarhusKarlshamn AB | 1,310 | 51,603 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Elekta AB, B Shares | 4,208 | 59,902 | ||||||
Getinge AB, B Shares | 4,981 | 153,276 | ||||||
213,178 | ||||||||
Materials 0.2% | ||||||||
Billerud AB | 5,192 | 49,526 | ||||||
Hoganas AB, B Shares | 1,286 | 42,887 | ||||||
Holmen AB, B Shares | 4,971 | 146,493 | ||||||
238,906 | ||||||||
Media 0.1% | ||||||||
Modern Times Group AB, B Shares | 2,488 | 75,895 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Meda AB, A Shares | 8,226 | 84,276 | ||||||
Real Estate 0.2% | ||||||||
Castellum AB | 4,402 | 59,005 | ||||||
Fabege AB | 6,560 | 65,151 | ||||||
Kungsleden AB | 13,658 | 66,806 | ||||||
190,962 | ||||||||
Retailing 0.1% | ||||||||
Bilia AB, A Shares | 3,682 | 47,267 | ||||||
Clas Ohlson AB, B Shares | 2,248 | 28,733 | ||||||
76,000 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Hexagon AB, B Shares | 4,972 | 114,859 | ||||||
Transportation 0.1% | ||||||||
SAS AB * | 81,018 | 78,784 | ||||||
2,125,533 | ||||||||
Switzerland 2.7% | ||||||||
Banks 0.1% | ||||||||
Banque Cantonale Vaudoise - Reg’d | 65 | 34,444 | ||||||
Valiant Holding AG - Reg’d * | 414 | 40,742 | ||||||
75,186 | ||||||||
Capital Goods 0.6% | ||||||||
AFG Arbonia-Forster Holding AG - Reg’d * | 2,146 | 48,640 | ||||||
Georg Fischer AG - Reg’d * | 349 | 122,623 | ||||||
Huber & Suhner AG - Reg’d | 720 | 32,084 | ||||||
Implenia AG * | 445 | 18,850 | ||||||
Kaba Holding AG - Reg’d, Series B * | 102 | 38,570 | ||||||
OC Oerlikon Corp. AG - Reg’d * | 5,401 | 54,397 | ||||||
Rieter Holding AG - Reg’d * | 341 | 54,528 | ||||||
Sulzer AG - Reg’d | 1,094 | 158,638 | ||||||
Zehnder Group AG | 547 | 32,216 | ||||||
560,546 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
DKSH Holding Ltd. * | 498 | 31,710 | ||||||
Gategroup Holding AG * | 1,435 | 38,031 | ||||||
69,741 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Forbo Holding AG - Reg’d * | 64 | 40,448 | ||||||
Consumer Services 0.1% | ||||||||
Kuoni Reisen Holding AG - Reg’d, Series B * | 277 | 74,074 | ||||||
Diversified Financials 0.2% | ||||||||
Julius Baer Group Ltd. * | 3,551 | 123,226 | ||||||
Partners Group Holding AG | 170 | 35,987 | ||||||
159,213 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Aryzta AG * | 2,539 | 126,842 | ||||||
Barry Callebaut AG - Reg’d | 59 | 56,349 | ||||||
Lindt & Spruengli AG * | 16 | 50,562 | ||||||
Lindt & Spruengli AG - Reg’d * | 2 | 72,803 | ||||||
306,556 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Nobel Biocare Holding AG - Reg’d * | 8,472 | 75,892 | ||||||
Sonova Holding AG - Reg’d * | 906 | 91,231 | ||||||
Straumann Holding AG - Reg’d | 259 | 31,915 | ||||||
199,038 | ||||||||
Insurance 0.1% | ||||||||
Helvetia Holding AG - Reg’d | 279 | 97,969 | ||||||
Materials 0.2% | ||||||||
Ems-Chemie Holding AG - Reg’d | 289 | 69,727 | ||||||
Ferrexpo plc | 8,125 | 27,436 | ||||||
Schmolz & Bickenbach AG - Reg’d * | 13,658 | 51,652 | ||||||
148,815 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Actelion Ltd. - Reg’d * | 2,108 | 101,748 | ||||||
Galenica AG - Reg’d | 116 | 68,126 | ||||||
169,874 | ||||||||
Real Estate 0.1% | ||||||||
Allreal Holding AG - Reg’d * | 213 | 32,180 | ||||||
Swiss Prime Site AG - Reg’d * | 509 | 42,494 | ||||||
74,674 | ||||||||
Retailing 0.1% | ||||||||
Dufry Group - Reg’d * | 422 | 53,673 | ||||||
Valora Holding AG - Reg’d | 452 | 86,100 | ||||||
139,773 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Kudelski S.A. - BR * | 3,120 | 34,115 | ||||||
Logitech International S.A. - Reg’d (a)* | 13,931 | 100,886 | ||||||
135,001 | ||||||||
Transportation 0.2% | ||||||||
Flughafen Zuerich AG - Reg’d | 129 | 55,204 | ||||||
Panalpina Welttransport Holding AG - Reg’d | 959 | 90,566 | ||||||
145,770 | ||||||||
Utilities 0.1% | ||||||||
Alpiq Holding AG - Reg’d * | 485 | 79,145 | ||||||
2,475,823 | ||||||||
United Kingdom 14.0% | ||||||||
Banks 0.1% | ||||||||
Paragon Group Cos. plc | 11,334 | 45,894 |
46 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 1.7% | ||||||||
Ashtead Group plc | 31,376 | 189,551 | ||||||
Bodycote plc | 14,832 | 90,560 | ||||||
Chemring Group plc | 8,018 | 40,693 | ||||||
Fenner plc | 6,299 | 36,801 | ||||||
Galliford Try plc | 7,051 | 84,092 | ||||||
Interserve plc | 15,411 | 97,087 | ||||||
Invensys plc | 42,177 | 155,516 | ||||||
Keller Group plc | 13,979 | 137,121 | ||||||
Kier Group plc | 2,966 | 61,701 | ||||||
Melrose plc | 12,464 | 48,551 | ||||||
Morgan Crucible Co. plc | 16,002 | 65,379 | ||||||
QinetiQ Group plc | 48,798 | 155,420 | ||||||
Rotork plc | 1,838 | 67,714 | ||||||
Senior plc | 14,783 | 46,459 | ||||||
Spirax-Sarco Engineering plc | 2,261 | 70,789 | ||||||
The Weir Group plc | 4,714 | 132,848 | ||||||
Ultra Electronics Holdings plc | 2,062 | 56,425 | ||||||
1,536,707 | ||||||||
Commercial & Professional Supplies 1.2% | ||||||||
Babcock International Group plc | 7,274 | 114,983 | ||||||
Berendsen plc | 18,326 | 166,641 | ||||||
Cape plc | 7,547 | 32,761 | ||||||
De La Rue plc | 8,700 | 148,793 | ||||||
Homeserve plc | 16,005 | 57,082 | ||||||
Intertek Group plc | 2,748 | 125,260 | ||||||
Mears Group plc | 6,795 | 32,238 | ||||||
Michael Page International plc | 19,079 | 111,353 | ||||||
Mitie Group plc | 24,023 | 113,186 | ||||||
RPS Group plc | 13,987 | 52,822 | ||||||
Shanks Group plc | 39,469 | 52,211 | ||||||
Sthree plc | 10,358 | 50,364 | ||||||
WS Atkins plc | 4,643 | 53,542 | ||||||
1,111,236 | ||||||||
Consumer Durables & Apparel 0.7% | ||||||||
Bellway plc | 12,661 | 206,960 | ||||||
Berkeley Group Holdings plc * | 5,812 | 143,022 | ||||||
Bovis Homes Group plc | 10,259 | 84,923 | ||||||
Guinness Peat Group plc * | 210,865 | 98,787 | ||||||
Redrow plc * | 21,036 | 53,648 | ||||||
The Vitec Group plc | 1,274 | 14,628 | ||||||
601,968 | ||||||||
Consumer Services 1.2% | ||||||||
Betfair Group plc | 3,360 | 40,829 | ||||||
Dignity plc | 2,683 | 40,499 | ||||||
Greene King plc | 16,028 | 153,779 | ||||||
J.D. Wetherspoon plc | 10,576 | 85,696 | ||||||
Ladbrokes plc | 63,734 | 184,599 | ||||||
Marston’s plc | 61,781 | 122,356 | ||||||
Millennium & Copthorne Hotels plc | 6,774 | 54,969 | ||||||
Mitchells & Butlers plc * | 38,824 | 205,428 | ||||||
Rank Group plc | 27,419 | 64,822 | ||||||
Restaurant Group plc | 10,769 | 65,251 | ||||||
Spirit Pub Co. plc | 18,284 | 17,851 | ||||||
Sportingbet plc | 56,203 | 48,697 | ||||||
1,084,776 | ||||||||
Diversified Financials 1.7% | ||||||||
3i Group plc | 35,043 | 122,157 | ||||||
Aberdeen Asset Management plc | 18,204 | 95,478 | ||||||
Ashmore Group plc | 7,417 | 43,666 | ||||||
Close Brothers Group plc | 8,602 | 117,706 | ||||||
F&C Asset Management plc | 48,110 | 76,861 | ||||||
Henderson Group plc | 62,235 | 117,802 | ||||||
IG Group Holdings plc | 10,608 | 74,697 | ||||||
Intermediate Capital Group plc | 21,656 | 106,890 | ||||||
International Personal Finance | 21,063 | 118,317 | ||||||
Investec plc | 25,698 | 151,543 | ||||||
Jupiter Fund Management plc | 4,411 | 18,663 | ||||||
London Stock Exchange Group plc | 8,631 | 136,185 | ||||||
Provident Financial plc | 7,404 | 164,108 | ||||||
Rathbone Brothers plc | 1,422 | 29,740 | ||||||
Schroders plc | 4,090 | 100,921 | ||||||
Schroders plc, Non Voting Shares | 1,664 | 33,227 | ||||||
Tullett Prebon plc | 13,948 | 61,662 | ||||||
1,569,623 | ||||||||
Energy 0.6% | ||||||||
Enquest plc * | 8,821 | 16,536 | ||||||
Hunting plc | 7,039 | 85,260 | ||||||
Petrofac Ltd. | 3,946 | 102,446 | ||||||
Premier Oil plc * | 9,536 | 54,069 | ||||||
Subsea 7 S.A. | 4,845 | 106,212 | ||||||
Tullow Oil plc | 6,496 | 147,581 | ||||||
512,104 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Booker Group plc | 88,125 | 145,914 | ||||||
Greggs plc | 10,620 | 80,316 | ||||||
226,230 | ||||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Britvic plc | 12,342 | 71,627 | ||||||
Cranswick plc | 4,500 | 54,259 | ||||||
Dairy Crest Group plc | 20,375 | 117,481 | ||||||
Premier Foods plc * | 101,310 | 174,840 | ||||||
418,207 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Synergy Health plc | 2,368 | 35,500 | ||||||
Household & Personal Products 0.1% | ||||||||
McBride plc * | 22,894 | 50,615 | ||||||
PZ Cussons plc | 11,081 | 60,530 | ||||||
111,145 | ||||||||
Insurance 0.8% | ||||||||
Admiral Group plc | 6,650 | 119,165 | ||||||
Beazley plc | 27,270 | 77,237 | ||||||
Catlin Group Ltd. | 18,934 | 144,293 | ||||||
Hiscox Ltd. | 20,700 | 160,643 | ||||||
Jardine Lloyd Thompson Group plc | 4,735 | 56,917 | ||||||
Lancashire Holdings Ltd. | 9,704 | 135,322 | ||||||
Phoenix Group Holdings | 5,206 | 41,527 | ||||||
735,104 | ||||||||
Materials 1.0% | ||||||||
Croda International plc | 2,036 | 72,490 | ||||||
DS Smith plc | 46,724 | 161,312 | ||||||
Elementis plc | 14,716 | 49,809 | ||||||
Eurasian Natural Resources Corp. | 17,362 | 92,037 | ||||||
Evraz plc | 43,597 | 166,348 | ||||||
Filtrona plc | 7,886 | 73,058 | ||||||
Lonmin plc | 11,560 | 95,924 | ||||||
Petropavlovsk plc | 3,983 | 26,005 | ||||||
Randgold Resources Ltd. | 392 | 46,859 |
See financial notes 47
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
RPC Group plc | 8,325 | 56,969 | ||||||
Victrex plc | 1,770 | 40,799 | ||||||
881,610 | ||||||||
Media 0.3% | ||||||||
Aegis Group plc | 21,937 | 83,315 | ||||||
Cineworld Group plc | 9,535 | 37,314 | ||||||
Daily Mail & General Trust plc | 16,385 | 126,392 | ||||||
Mecom Group plc | 19,975 | 25,104 | ||||||
272,125 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Hikma Pharmaceuticals plc | 2,850 | 34,038 | ||||||
Real Estate 0.7% | ||||||||
Capital Shopping Centres Group plc | 23,532 | 126,669 | ||||||
Derwent London plc | 1,153 | 38,369 | ||||||
Great Portland Estates plc | 4,710 | 35,567 | ||||||
Hammerson plc | 20,104 | 153,306 | ||||||
Mapeley Ltd. (b)(c)* | 2,199 | — | ||||||
Savills plc | 10,621 | 69,398 | ||||||
Segro plc | 35,707 | 136,910 | ||||||
Songbird Estates plc * | 35,433 | 66,615 | ||||||
626,834 | ||||||||
Retailing 1.0% | ||||||||
Carpetright plc * | 3,682 | 41,014 | ||||||
Darty plc | 155,213 | 134,953 | ||||||
Debenhams plc | 109,048 | 211,117 | ||||||
Halfords Group plc | 24,250 | 135,245 | ||||||
Howden Joinery Group plc | 16,240 | 44,648 | ||||||
John Menzies plc | 1,700 | 16,639 | ||||||
Lookers plc | 16,489 | 20,223 | ||||||
Mothercare plc | 18,393 | 82,367 | ||||||
N Brown Group plc | 10,711 | 58,094 | ||||||
Sports Direct International plc * | 2,889 | 18,617 | ||||||
WH Smith plc | 12,052 | 120,942 | ||||||
883,859 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ARM Holdings plc | 11,164 | 120,298 | ||||||
CSR plc | 15,907 | 90,806 | ||||||
211,104 | ||||||||
Software & Services 0.2% | ||||||||
Aveva Group plc | 487 | 15,671 | ||||||
Computacenter plc | 13,689 | 81,051 | ||||||
Micro Focus International plc | 4,529 | 41,952 | ||||||
Xchanging plc * | 29,227 | 52,235 | ||||||
190,909 | ||||||||
Technology Hardware & Equipment 0.8% | ||||||||
Domino Printing Sciences plc | 4,023 | 35,270 | ||||||
Electrocomponents plc | 36,148 | 124,380 | ||||||
Halma plc | 12,021 | 80,121 | ||||||
Laird plc | 29,261 | 99,414 | ||||||
Pace plc | 26,664 | 80,034 | ||||||
Premier Farnell plc | 18,687 | 50,004 | ||||||
Spectris plc | 4,112 | 115,173 | ||||||
Spirent Communications plc | 27,066 | 63,117 | ||||||
TT Electronics plc | 20,255 | 40,934 | ||||||
Xyratex Ltd. | 3,700 | 30,599 | ||||||
719,046 | ||||||||
Telecommunication Services 0.3% | ||||||||
Inmarsat plc | 16,685 | 152,856 | ||||||
KCOM Group plc | 30,212 | 37,068 | ||||||
TalkTalk Telecom Group plc | 24,573 | 75,344 | ||||||
265,268 | ||||||||
Transportation 0.6% | ||||||||
BBA Aviation plc | 32,841 | 107,293 | ||||||
easyJet plc | 10,496 | 106,072 | ||||||
Go-Ahead Group plc | 3,773 | 79,164 | ||||||
Northgate plc | 32,379 | 132,327 | ||||||
Stagecoach Group plc | 19,727 | 87,487 | ||||||
Stolt-Nielsen Ltd. | 3,073 | 56,325 | ||||||
568,668 | ||||||||
12,641,955 | ||||||||
Total Common Stock | ||||||||
(Cost $85,502,542) | 88,117,980 | |||||||
Preferred Stock 0.4% of net assets | ||||||||
Germany 0.4% | ||||||||
Automobiles & Components 0.1% | ||||||||
Porsche Automobil Holding SE | 1,980 | 131,975 | ||||||
Capital Goods 0.1% | ||||||||
Jungheinrich AG | 1,511 | 50,022 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Draegerwerk AG & Co. KGAA | 224 | 21,946 | ||||||
Materials 0.1% | ||||||||
Fuchs Petrolub AG | 1,311 | 92,691 | ||||||
Media 0.1% | ||||||||
ProSiebenSat.1 Media AG | 3,791 | 105,706 | ||||||
402,340 | ||||||||
United Kingdom 0.0% | ||||||||
Household & Personal Products 0.0% | ||||||||
Mcbride plc (b) | 686,820 | 1,108 | ||||||
Total Preferred Stock | ||||||||
(Cost $328,969) | 403,448 | |||||||
Rights 0.0% of net assets | ||||||||
Norway 0.0% | ||||||||
Energy 0.0% | ||||||||
Norwegian Energy Companyrts Rights (b)* | 11,632 | — | ||||||
Total Rights | ||||||||
(Cost $—) | — | |||||||
48 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Warrants 0.0% of net assets | ||||||||
Netherlands 0.0% | ||||||||
Real Estate 0.0% | ||||||||
Nieuwe Steen Investments N.V. (b)(c)* | 2,410 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
Other Investment Companies 1.6% of net assets | ||||||||
Australia 0.1% | ||||||||
Australian Infrastructure Fund | 14,576 | 44,952 | ||||||
United States 1.5% | ||||||||
iShares MSCI EAFE Small Cap Index Fund | 35,000 | 1,365,000 | ||||||
Total Other Investment Companies | ||||||||
(Cost $1,433,979) | 1,409,952 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.2% of net assets | ||||||||
Time Deposits 0.2% | ||||||||
Brown Brothers Harriman | ||||||||
Swiss Franc | ||||||||
0.01%, 11/01/12 | 918 | 986 | ||||||
Australian Dollar | ||||||||
2.11%, 11/01/12 | 3,142 | 3,262 | ||||||
Pound Sterling | ||||||||
0.08%, 11/01/12 | 3,222 | 5,199 | ||||||
Swedish Krona | ||||||||
0.30%, 11/01/12 | 75,460 | 11,376 | ||||||
Japanese Yen | ||||||||
0.01%, 11/01/12 | 100,068 | 1,254 | ||||||
Hong Kong Dollar | ||||||||
0.01%, 11/01/12 | 15,313 | 1,976 | ||||||
Citibank | ||||||||
Norwegian Krone | ||||||||
0.35%, 11/01/12 | 126,751 | 22,232 | ||||||
JPMorgan Chase | ||||||||
Canadian Dollar | ||||||||
0.21%, 11/01/12 | 7,033 | 7,042 | ||||||
Societe Generale | ||||||||
US Dollar | ||||||||
0.03%, 11/01/12 | 95,162 | 95,162 | ||||||
Total Short-Term Investments | ||||||||
(Cost $148,489) | 148,489 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 1.3% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund | 1,156,931 | 1,156,931 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $1,156,931) | 1,156,931 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/12, the tax basis cost of the fund’s investments was $88,835,770 and the unrealized appreciation and depreciation were $8,399,844 and ($7,155,745), respectively, with a net unrealized appreciation of $1,244,099.
At 10/31/12, the values of certain foreign securities held by the fund aggregating $75,602,890 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 $4,930 or 0.0% of net assets. |
ADR — | American Depositary Receipt | |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
See financial notes 49
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2012
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
89 | .5% | Common Stock | 281,228,570 | 281,193,050 | ||||||||
7 | .8% | Preferred Stock | 29,042,525 | 24,397,537 | ||||||||
2 | .6% | Other Investment Company | 8,142,635 | 8,222,000 | ||||||||
0 | .0% | Short-Term Investments | 18,822 | 18,822 | ||||||||
99 | .9% | Total Investments | 318,432,552 | 313,831,409 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 374,328 | |||||||||
100 | .0% | Total Net Assets | 314,205,737 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 89.5% of net assets | ||||||||
Brazil 4.9% | ||||||||
Banks 0.8% | ||||||||
Banco Bradesco S.A. | 66,400 | 873,869 | ||||||
Banco do Brasil S.A. | 140,300 | 1,496,911 | ||||||
Itau Unibanco Holding S.A. | 20,358 | 266,622 | ||||||
2,637,402 | ||||||||
Capital Goods 0.2% | ||||||||
Embraer S.A. | 82,700 | 578,194 | ||||||
Diversified Financials 0.2% | ||||||||
BM&F BOVESPA S.A. | 94,200 | 602,939 | ||||||
Energy 1.6% | ||||||||
Petroleo Brasileiro S.A. - Petrobras | 486,700 | 5,152,040 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
BRF-Brasil Foods S.A. | 35,800 | 651,294 | ||||||
Companhia de Bebidas das Americas | 5,480 | 184,281 | ||||||
835,575 | ||||||||
Materials 1.2% | ||||||||
Companhia Siderurgica Nacional S.A. | 137,500 | 760,259 | ||||||
Gerdau S.A. | 32,700 | 237,798 | ||||||
Usinas Siderurgicas de Minas Gerais S.A. | 34,900 | 182,486 | ||||||
Vale S.A. | 130,900 | 2,413,631 | ||||||
3,594,174 | ||||||||
Telecommunication Services 0.1% | ||||||||
Oi S.A. | 16,414 | 77,583 | ||||||
Tim Participacoes S.A. | 51,856 | 183,827 | ||||||
261,410 | ||||||||
Utilities 0.5% | ||||||||
Centrais Eletricas Brasileiras S.A. | 69,103 | 379,360 | ||||||
Cia de Saneamento Basico do Estado de Sao Paulo | 13,400 | 567,259 | ||||||
Companhia Energetica de Minas Gerais | 10,056 | 109,420 | ||||||
CPFL Energia S.A. | 53,000 | 615,839 | ||||||
1,671,878 | ||||||||
15,333,612 | ||||||||
Chile 0.7% | ||||||||
Energy 0.2% | ||||||||
Empresas Copec S.A. | 40,452 | 582,571 | ||||||
Materials 0.1% | ||||||||
Empresas CMPC S.A. | 80,897 | 308,086 | ||||||
Utilities 0.4% | ||||||||
Empresa Nacional de Electricidad S.A. | 262,809 | 422,242 | ||||||
Enersis S.A. | 2,263,135 | 773,083 | ||||||
1,195,325 | ||||||||
2,085,982 | ||||||||
China 11.0% | ||||||||
Banks 3.8% | ||||||||
Agricultural Bank of China Ltd., Class H | 1,530,600 | 659,476 | ||||||
Bank of China Ltd., Class H | 6,768,234 | 2,772,825 | ||||||
BOC Hong Kong (Holdings) Ltd. | 261,500 | 801,774 | ||||||
China Construction Bank Corp., Class H | 6,088,000 | 4,563,965 | ||||||
China Merchants Bank Co., Ltd., Class H | 194,850 | 362,036 | ||||||
Industrial & Commercial Bank of China Ltd., Class H | 4,366,172 | 2,875,120 | ||||||
12,035,196 | ||||||||
Capital Goods 0.3% | ||||||||
China Communications Construction Co., Ltd., Class H | 542,000 | 505,898 | ||||||
Citic Pacific Ltd. | 255,000 | 323,843 | ||||||
829,741 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Yue Yuen Industrial Holdings Ltd. | 117,000 | 402,706 | ||||||
Energy 3.3% | ||||||||
China Petroleum & Chemical Corp., Class H | 3,212,000 | 3,385,053 | ||||||
China Shenhua Energy Co., Ltd., Class H | 226,000 | 957,607 | ||||||
CNOOC Ltd. | 1,215,000 | 2,500,441 | ||||||
PetroChina Co., Ltd., Class H | 2,639,000 | 3,580,906 | ||||||
10,424,007 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
China Resources Enterprise Ltd. | 130,000 | 421,192 | ||||||
Insurance 0.6% | ||||||||
China Life Insurance Co., Ltd., Class H | 446,000 | 1,311,467 |
50 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ping An Insurance (Group) Co. of China Ltd., Class H | 56,000 | 440,694 | ||||||
1,752,161 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Lenovo Group Ltd. | 564,000 | 451,582 | ||||||
Telecommunication Services 2.6% | ||||||||
China Mobile Ltd. | 541,500 | 6,006,176 | ||||||
China Telecom Corp., Ltd., Class H | 2,208,000 | 1,306,360 | ||||||
China Unicom (Hong Kong) Ltd. | 603,056 | 972,202 | ||||||
8,284,738 | ||||||||
34,601,323 | ||||||||
Colombia 0.3% | ||||||||
Banks 0.1% | ||||||||
Bancolombia S.A. | �� | 16,600 | 259,726 | |||||
Energy 0.2% | ||||||||
Ecopetrol S.A. | 192,000 | 571,252 | ||||||
830,978 | ||||||||
Czech Republic 0.7% | ||||||||
Materials 0.2% | ||||||||
Unipetrol A/S * | 83,000 | 720,477 | ||||||
Telecommunication Services 0.2% | ||||||||
Telefonica Czech Republic A/S | 27,062 | 539,003 | ||||||
Utilities 0.3% | ||||||||
CEZ A/S | 23,555 | 868,450 | ||||||
2,127,930 | ||||||||
Egypt 0.3% | ||||||||
Telecommunication Services 0.3% | ||||||||
Orascom Telecom Holding S.A.E. GDR - Reg’d * | 260,961 | 784,188 | ||||||
Hungary 0.9% | ||||||||
Banks 0.4% | ||||||||
OTP Bank plc | 58,424 | 1,113,411 | ||||||
Energy 0.4% | ||||||||
MOL Hungarian Oil & Gas plc | 13,680 | 1,190,010 | ||||||
Telecommunication Services 0.1% | ||||||||
Magyar Telekom Telecommunications plc | 243,087 | 451,094 | ||||||
2,754,515 | ||||||||
India 2.9% | ||||||||
Banks 0.6% | ||||||||
Housing Development Finance Corp., Ltd. | 30,263 | 427,221 | ||||||
ICICI Bank Ltd. | 38,547 | 750,173 | ||||||
State Bank of India | 12,839 | 501,257 | ||||||
1,678,651 | ||||||||
Energy 1.4% | ||||||||
Indian Oil Corp., Ltd. | 85,759 | 414,965 | ||||||
Oil & Natural Gas Corp., Ltd. | 246,937 | 1,229,829 | ||||||
Reliance Industries Ltd. | 185,874 | 2,773,456 | ||||||
4,418,250 | ||||||||
Materials 0.3% | ||||||||
Hindalco Industries Ltd. | 188,209 | 405,233 | ||||||
Tata Steel Ltd. | 67,552 | 490,240 | ||||||
895,473 | ||||||||
Software & Services 0.4% | ||||||||
Infosys Ltd. | 22,807 | 998,489 | ||||||
Tata Consultancy Services Ltd. | 15,000 | 366,163 | ||||||
1,364,652 | ||||||||
Telecommunication Services 0.1% | ||||||||
Bharti Airtel Ltd. | 65,877 | 329,300 | ||||||
Utilities 0.1% | ||||||||
NTPC Ltd. | 126,998 | 389,718 | ||||||
9,076,044 | ||||||||
Indonesia 0.7% | ||||||||
Automobiles & Components 0.2% | ||||||||
PT Astra International Tbk | 962,500 | 803,413 | ||||||
Energy 0.1% | ||||||||
PT Bumi Resources Tbk | 2,525,500 | 172,387 | ||||||
Telecommunication Services 0.4% | ||||||||
PT Telekomunikasi Indonesia Tbk | 1,295,500 | 1,315,786 | ||||||
2,291,586 | ||||||||
Malaysia 1.5% | ||||||||
Banks 0.6% | ||||||||
CIMB Group Holdings Berhad | 182,900 | 457,097 | ||||||
Malayan Banking Berhad | 180,100 | 532,779 | ||||||
Public Bank Berhad | 169,800 | 885,112 | ||||||
1,874,988 | ||||||||
Capital Goods 0.2% | ||||||||
Sime Darby Berhad | 196,100 | 629,048 | ||||||
Consumer Services 0.1% | ||||||||
Genting Berhad | 120,000 | 347,728 | ||||||
Telecommunication Services 0.4% | ||||||||
Axiata Group Berhad | 294,700 | 630,746 | ||||||
Telekom Malaysia Berhad | 330,800 | 648,542 | ||||||
1,279,288 | ||||||||
Utilities 0.2% | ||||||||
Tenaga Nasional Berhad | 309,300 | 703,689 | ||||||
4,834,741 | ||||||||
Mexico 4.2% | ||||||||
Banks 0.1% | ||||||||
Grupo Financiero Banorte S.A.B. de C.V., Class O | 92,600 | 514,484 | ||||||
Capital Goods 0.2% | ||||||||
Alfa S.A.B., Class A | 344,300 | 635,012 | ||||||
Food & Staples Retailing 0.4% | ||||||||
Wal-Mart de Mexico S.A.B. de C.V., Series V | 393,500 | 1,162,108 |
See financial notes 51
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Fomento Economico Mexicano S.A.B. de C.V. | 150,200 | 1,352,649 | ||||||
Grupo Bimbo S.A.B. de C.V., Series A | 188,400 | 438,842 | ||||||
1,791,491 | ||||||||
Materials 1.4% | ||||||||
Cemex S.A.B. de C.V., Series CPO * | 3,920,000 | 3,553,566 | ||||||
Grupo Mexico S.A.B. de C.V., Series B | 293,000 | 938,925 | ||||||
4,492,491 | ||||||||
Media 0.4% | ||||||||
Grupo Televisa S.A.B., Series CPO | 274,300 | 1,246,856 | ||||||
Telecommunication Services 1.1% | ||||||||
America Movil S.A.B. de C.V., Series L | 2,722,600 | 3,457,831 | ||||||
13,300,273 | ||||||||
Poland 2.2% | ||||||||
Banks 0.3% | ||||||||
Bank Pekao S.A. | 8,657 | 415,847 | ||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. | 53,095 | 593,520 | ||||||
1,009,367 | ||||||||
Energy 0.6% | ||||||||
Polski Koncern Naftowy Orlen S.A. * | 142,760 | 1,956,620 | ||||||
Insurance 0.2% | ||||||||
Powszechny Zaklad Ubezpieczen S.A. | 6,150 | 719,405 | ||||||
Materials 0.5% | ||||||||
KGHM Polska Miedz S.A. | 28,611 | 1,441,850 | ||||||
Telecommunication Services 0.3% | ||||||||
Telekomunikacja Polska S.A. | 214,519 | 813,478 | ||||||
Utilities 0.3% | ||||||||
PGE S.A. | 119,606 | 648,979 | ||||||
Tauron Polska Energia S.A. | 319,276 | 441,571 | ||||||
1,090,550 | ||||||||
7,031,270 | ||||||||
Republic of Korea 21.2% | ||||||||
Automobiles & Components 1.7% | ||||||||
Hyundai Mobis | 5,100 | 1,296,139 | ||||||
Hyundai Motor Co. | 16,200 | 3,329,401 | ||||||
Kia Motors Corp. | 15,000 | 831,595 | ||||||
5,457,135 | ||||||||
Banks 1.6% | ||||||||
Hana Financial Group, Inc. | 25,500 | 741,822 | ||||||
KB Financial Group, Inc. | 41,500 | 1,411,235 | ||||||
Korea Exchange Bank * | 65,800 | 456,065 | ||||||
Shinhan Financial Group Co., Ltd. | 53,500 | 1,836,249 | ||||||
Woori Finance Holdings Co., Ltd. | 67,400 | 636,267 | ||||||
5,081,638 | ||||||||
Capital Goods 3.5% | ||||||||
Daelim Industrial Co., Ltd. | 5,400 | 375,296 | ||||||
GS Engineering & Construction Corp. | 5,200 | 292,225 | ||||||
Hyundai Engineering & Construction Co., Ltd. | 5,900 | 354,966 | ||||||
Hyundai Heavy Industries Co., Ltd. | 5,300 | 1,110,674 | ||||||
LG Corp. | 65,800 | 4,012,856 | ||||||
Samsung C&T Corp. | 18,800 | 1,021,161 | ||||||
Samsung Heavy Industries Co., Ltd. | 14,400 | 439,467 | ||||||
SK Holdings Co., Ltd. | 18,500 | 2,574,960 | ||||||
SK Networks Co., Ltd. | 86,700 | 758,385 | ||||||
10,939,990 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
LG Electronics, Inc. | 44,700 | 3,109,860 | ||||||
Energy 1.2% | ||||||||
GS Holdings | 15,000 | 942,160 | ||||||
S-Oil Corp. | 8,500 | 777,253 | ||||||
SK Innovation Co., Ltd. | 12,700 | 1,866,727 | ||||||
3,586,140 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
KT&G Corp. | 13,700 | 1,042,514 | ||||||
Insurance 0.6% | ||||||||
Hanwha Life Insurance Co., Ltd. | 67,200 | 473,632 | ||||||
Samsung Fire & Marine Insurance Co., Ltd. | 3,500 | 764,067 | ||||||
Samsung Life Insurance Co., Ltd. | 7,900 | 680,367 | ||||||
1,918,066 | ||||||||
Materials 2.6% | ||||||||
Cheil Industries, Inc. | 5,300 | 453,711 | ||||||
Hanwha Corp. | 13,300 | 379,386 | ||||||
Honam Petrochemical Corp. | 1,700 | 347,401 | ||||||
Hyosung Corp. | 7,000 | 385,525 | ||||||
Hyundai Steel Co. | 7,600 | 546,075 | ||||||
LG Chem Ltd. | 4,300 | 1,206,234 | ||||||
POSCO | 15,300 | 4,809,623 | ||||||
8,127,955 | ||||||||
Retailing 0.4% | ||||||||
Lotte Shopping Co., Ltd. | 2,200 | 680,199 | ||||||
Shinsegae Co., Ltd. | 3,700 | 661,157 | ||||||
1,341,356 | ||||||||
Semiconductors & Semiconductor Equipment 4.8% | ||||||||
Samsung Electronics Co., Ltd. | 11,500 | 13,800,430 | ||||||
SK Hynix, Inc. * | 56,500 | 1,286,211 | ||||||
15,086,641 | ||||||||
Software & Services 0.3% | ||||||||
SK C&C Co., Ltd. | 10,400 | 911,721 | ||||||
Technology Hardware & Equipment 1.0% | ||||||||
LG Display Co., Ltd. * | 74,000 | 2,196,132 | ||||||
Samsung Electro-Mechanics Co., Ltd. | 5,100 | 436,165 | ||||||
Samsung SDI Co., Ltd. | 4,900 | 614,272 | ||||||
3,246,569 | ||||||||
Telecommunication Services 1.4% | ||||||||
KT Corp. | 58,200 | 1,975,686 | ||||||
LG Uplus Corp. | 77,000 | 491,740 | ||||||
SK Telecom Co., Ltd. | 12,500 | 1,765,699 | ||||||
4,233,125 | ||||||||
Utilities 0.8% | ||||||||
Korea Electric Power Corp. * | 100,400 | 2,604,172 | ||||||
66,686,882 |
52 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Russia 15.0% | ||||||||
Banks 0.7% | ||||||||
Sberbank of Russia ADR | 182,894 | 2,162,803 | ||||||
Energy 12.3% | ||||||||
Gazprom ADR | 1,291,900 | 11,866,083 | ||||||
LUKOIL ADR | 251,535 | 15,265,230 | ||||||
NovaTek OAO GDR - Reg’d. | 7,073 | 809,815 | ||||||
Rosneft Oil Co. GDR - Reg’d | 287,147 | 2,133,587 | ||||||
Surgutneftegaz ADR | 737,788 | 6,456,292 | ||||||
Tatneft ADR | 55,840 | 2,171,345 | ||||||
38,702,352 | ||||||||
Materials 0.9% | ||||||||
Mining & Metallurgical Co. Norilsk Nickel OJSC ADR | 162,116 | 2,491,808 | ||||||
Severstal GDR - Reg’d | 39,689 | 482,016 | ||||||
2,973,824 | ||||||||
Telecommunication Services 0.9% | ||||||||
Mobile TeleSystems ADR | 90,651 | 1,553,758 | ||||||
Rostelecom OJSC ADR | 31,803 | 731,631 | ||||||
Sistema JSFC GDR - Reg’d | 35,500 | 653,648 | ||||||
2,939,037 | ||||||||
Utilities 0.2% | ||||||||
Federal Hydrogenerating Co., ADR | 202,322 | 482,000 | ||||||
47,260,016 | ||||||||
South Africa 6.9% | ||||||||
Banks 0.7% | ||||||||
ABSA Group Ltd. | 30,029 | 481,453 | ||||||
Nedbank Group Ltd. | 18,791 | 387,469 | ||||||
Standard Bank Group Ltd. | 121,059 | 1,494,862 | ||||||
2,363,784 | ||||||||
Capital Goods 0.7% | ||||||||
Aveng Ltd. | 133,322 | 475,741 | ||||||
Barloworld Ltd. | 68,667 | 556,451 | ||||||
Bidvest Group Ltd. | 50,890 | 1,214,688 | ||||||
2,246,880 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Steinhoff International Holdings Ltd. * | 170,348 | 573,138 | ||||||
Diversified Financials 0.5% | ||||||||
FirstRand Ltd. | 296,505 | 985,464 | ||||||
Remgro Ltd. | 28,757 | 492,634 | ||||||
1,478,098 | ||||||||
Energy 1.1% | ||||||||
Sasol Ltd. | 78,806 | 3,357,141 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Shoprite Holdings Ltd. | 22,665 | 466,106 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Tiger Brands Ltd. | 16,198 | 515,018 | ||||||
Insurance 0.3% | ||||||||
Sanlam Ltd. | 197,538 | 882,769 | ||||||
Materials 1.2% | ||||||||
Anglo American Platinum Ltd. | 8,121 | 377,540 | ||||||
AngloGold Ashanti Ltd. | 10,869 | 367,213 | ||||||
ArcelorMittal South Africa Ltd. * | 96,208 | 370,895 | ||||||
Gold Fields Ltd. | 59,685 | 741,527 | ||||||
Impala Platinum Holdings Ltd. | 77,186 | 1,391,618 | ||||||
Sappi Ltd. * | 151,740 | 430,370 | ||||||
3,679,163 | ||||||||
Media 0.3% | ||||||||
Naspers Ltd., Class N | 12,876 | 836,112 | ||||||
Retailing 0.2% | ||||||||
Imperial Holdings Ltd. | 32,410 | 736,641 | ||||||
Telecommunication Services 1.4% | ||||||||
MTN Group Ltd. | 178,860 | 3,231,903 | ||||||
Telkom South Africa Ltd. * | 369,594 | 779,670 | ||||||
Vodacom Group Ltd. | 29,917 | 376,874 | ||||||
4,388,447 | ||||||||
21,523,297 | ||||||||
Taiwan 13.0% | ||||||||
Banks 0.3% | ||||||||
Chinatrust Financial Holding Co., Ltd. | 985,425 | 542,424 | ||||||
Mega Financial Holding Co., Ltd. | 770,404 | 559,616 | ||||||
1,102,040 | ||||||||
Capital Goods 0.3% | ||||||||
Far Eastern New Century Corp. | 605,743 | 626,248 | ||||||
Walsin Lihwa Corp. * | 1,450,000 | 396,429 | ||||||
1,022,677 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Pou Chen Corp. | 598,267 | 604,808 | ||||||
Diversified Financials 0.2% | ||||||||
Fubon Financial Holding Co., Ltd. | 496,674 | 508,859 | ||||||
Energy 0.3% | ||||||||
Formosa Petrochemical Corp. | 301,030 | 875,016 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Uni-President Enterprises Corp. | 405,794 | 716,393 | ||||||
Insurance 0.2% | ||||||||
Cathay Financial Holding Co., Ltd. | 559,357 | 560,856 | ||||||
Materials 2.2% | ||||||||
China Steel Corp. | 2,018,544 | 1,733,274 | ||||||
Formosa Chemicals & Fibre Corp. | 654,420 | 1,548,652 | ||||||
Formosa Plastics Corp. | 546,820 | 1,488,520 | ||||||
Nan Ya Plastics Corp. | 924,160 | 1,627,677 | ||||||
Taiwan Cement Corp. | 423,299 | 542,015 | ||||||
6,940,138 | ||||||||
Semiconductors & Semiconductor Equipment 3.0% | ||||||||
Advanced Semiconductor Engineering, Inc. | 639,094 | 482,280 | ||||||
MediaTek, Inc. | 127,138 | 1,410,326 | ||||||
Siliconware Precision Industries Co. | 664,270 | 645,491 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1,949,689 | 5,940,818 | ||||||
United Microelectronics Corp. | 2,607,965 | 967,018 | ||||||
9,445,933 | ||||||||
Technology Hardware & Equipment 5.2% | ||||||||
Acer, Inc. * | 1,042,496 | 804,753 | ||||||
Asustek Computer, Inc. | 222,041 | 2,375,491 | ||||||
AU Optronics Corp. * | 4,331,800 | 1,639,889 | ||||||
Chimei Innolux Corp. * | 1,230,357 | 458,230 |
See financial notes 53
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Compal Electronics, Inc. | 1,276,305 | 802,817 | ||||||
Delta Electronics, Inc. | 249,025 | 849,448 | ||||||
Foxconn Technology Co., Ltd. | 110,197 | 382,126 | ||||||
Hon Hai Precision Industry Co., Ltd. | 1,509,546 | 4,576,997 | ||||||
HTC Corp. | 91,473 | 660,084 | ||||||
Inventec Corp. | 1,488,639 | 508,634 | ||||||
Lite-On Technology Corp. | 607,299 | 772,616 | ||||||
Pegatron Corp. | 567,264 | 715,186 | ||||||
Quanta Computer, Inc. | 439,500 | 1,003,062 | ||||||
Synnex Technology International Corp. | 177,000 | 374,143 | ||||||
Wistron Corp. | 582,498 | 558,791 | ||||||
16,482,267 | ||||||||
Telecommunication Services 0.9% | ||||||||
Chunghwa Telecom Co., Ltd. | 552,906 | 1,729,982 | ||||||
Far EasTone Telecommunications Co., Ltd. | 214,622 | 495,423 | ||||||
Taiwan Mobile Co., Ltd. | 146,600 | 511,429 | ||||||
2,736,834 | ||||||||
40,995,821 | ||||||||
Thailand 1.0% | ||||||||
Energy 0.8% | ||||||||
PTT Exploration & Production PCL | 94,100 | 509,645 | ||||||
PTT PCL | 151,787 | 1,574,821 | ||||||
Thai Oil PCL | 210,400 | 458,212 | ||||||
2,542,678 | ||||||||
Telecommunication Services 0.2% | ||||||||
Advanced Info Service PCL - Reg’d | 89,875 | 579,129 | ||||||
3,121,807 | ||||||||
Turkey 1.9% | ||||||||
Banks 0.9% | ||||||||
Akbank T.A.S. | 149,066 | 719,241 | ||||||
Turkiye Garanti Bankasi A/S | 169,919 | 811,866 | ||||||
Turkiye Is Bankasi, Class C | 214,325 | 729,776 | ||||||
Turkiye Vakiflar Bankasi T.A.O., Class D | 206,615 | 486,683 | ||||||
2,747,566 | ||||||||
Capital Goods 0.3% | ||||||||
KOC Holding A/S | 189,694 | 891,217 | ||||||
Diversified Financials 0.2% | ||||||||
Haci Omer Sabanci Holding A/S | 115,877 | 611,917 | ||||||
Energy 0.3% | ||||||||
Tupras-Turkiye Petrol Rafinerileri A/S | 37,691 | 921,849 | ||||||
Telecommunication Services 0.2% | ||||||||
Turkcell Iletisim Hizmetleri A/S * | 135,399 | 827,229 | ||||||
5,999,778 | ||||||||
United Arab Emirates 0.2% | ||||||||
Real Estate 0.2% | ||||||||
Emaar Properties PJSC | 565,000 | 553,007 | ||||||
Total Common Stock | ||||||||
(Cost $281,228,570) | 281,193,050 | |||||||
Preferred Stock 7.8% of net assets | ||||||||
Brazil 7.0% | ||||||||
Banks 1.7% | ||||||||
Banco Bradesco S.A. | 132,678 | 2,090,395 | ||||||
Itau Unibanco Holding S.A. | 198,000 | 2,895,349 | ||||||
Itausa - Investimentos Itau S.A. | 75,568 | 331,137 | ||||||
5,316,881 | ||||||||
Energy 1.8% | ||||||||
Petroleo Brasileiro S.A. | 543,100 | 5,561,892 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Companhia de Bebidas das Americas | 25,569 | 1,044,891 | ||||||
Materials 2.2% | ||||||||
Bradespar S.A. | 23,800 | 351,543 | ||||||
Gerdau S.A. | 159,500 | 1,393,922 | ||||||
Metalurgica Gerdau S.A. | 124,500 | 1,395,150 | ||||||
Usinas Siderurgicas de Minas Gerais S.A., Class A | 137,900 | 666,059 | ||||||
Vale S.A., Class A | 172,000 | 3,078,309 | ||||||
6,884,983 | ||||||||
Retailing 0.0% | ||||||||
Lojas Americanas S.A. | 1 | 8 | ||||||
Telecommunication Services 0.5% | ||||||||
Oi S.A. | 253,111 | 1,014,413 | ||||||
Telefonica Brasil S.A. | 30,232 | 669,821 | ||||||
1,684,234 | ||||||||
Utilities 0.5% | ||||||||
Centrais Eletricas Brasileiras S.A., Class B | 53,200 | 423,023 | ||||||
Companhia Energetica de Minas Gerais | 63,685 | 761,944 | ||||||
Eletropaulo Metropolitana S.A. | 31,400 | 249,369 | ||||||
1,434,336 | ||||||||
21,927,225 | ||||||||
Colombia 0.1% | ||||||||
Banks 0.1% | ||||||||
Bancolombia S.A. | 18,400 | 293,514 | ||||||
Republic of Korea 0.7% | ||||||||
Automobiles & Components 0.1% | ||||||||
Hyundai Motor Co. | 2,500 | 152,977 | ||||||
Hyundai Motor Co., 2nd | 4,100 | 268,158 | ||||||
421,135 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
LG Electronics, Inc. | 9,200 | 168,608 | ||||||
Materials 0.0% | ||||||||
LG Chem Ltd. | 700 | 62,584 |
54 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
Samsung Electronics Co., Ltd. | 2,100 | 1,524,471 | ||||||
2,176,798 | ||||||||
Total Preferred Stock | ||||||||
(Cost $29,042,525) | 24,397,537 | |||||||
Other Investment Company 2.6% of net assets | ||||||||
United States 2.6% | ||||||||
iShares MSCI Emerging Markets Index Fund | 200,000 | 8,222,000 | ||||||
Total Other Investment Company | ||||||||
(Cost $8,142,635) | 8,222,000 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.0% of net assets | ||||||||
Time Deposits 0.0% | ||||||||
Brown Brothers Harriman | ||||||||
US Dollar | ||||||||
0.03%, 11/01/12 | 12,503 | 12,503 | ||||||
Hong Kong Dollar | ||||||||
0.01%, 11/01/12 | 48,973 | 6,319 | ||||||
Total Short-Term Investments | ||||||||
(Cost $18,822) | 18,822 | |||||||
End of Investments. |
At 10/31/12, the tax basis cost of the fund’s investments was $322,899,341 and the unrealized appreciation and depreciation were $20,489,368 and ($29,557,300), respectively, with a net unrealized depreciation of ($9,067,932).
At 10/31/12, the values of certain foreign securities held by the fund aggregating $243,755,579 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. |
ADR — | American Depositary Receipt | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered |
See financial notes 55
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab S&P 500 Index Fund
Schwab Small-Cap Index Fund
Schwab Total Stock Market Index Fund
Schwab International Index Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund
Schwab Fundamental Emerging Markets Large Company Index Fund
Schwab S&P 500 Index Fund
Schwab Small-Cap Index Fund
Schwab Total Stock Market Index Fund
Schwab International Index Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund
Schwab Fundamental Emerging Markets Large Company Index Fund
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund, Schwab International Index Fund, Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund (the “Funds”) as of October 31, 2012, and for the year then ended and have issued our unqualified reports thereon dated December 14, 2012 (which reports and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR). Our audits included audits of the Funds’ portfolio holdings (the “Portfolios”) as of October 31, 2012 appearing in Item 6 of this Form N-CSR. These Portfolios are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these Portfolios based on our audits.
In our opinion, the Portfolios referred to above, when read in conjunction with the financial statements of the Funds referred to above, present fairly, in all material respects, the information set forth therein.
PricewaterhouseCoopers LLP
San Francisco, California
December 14, 2012
San Francisco, California
December 14, 2012
Table of Contents
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
(a) | Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Marie Chandoha and Registrant’s Principal Financial Officer, George Pereira, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. |
(b) | During the second fiscal quarter of the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting. |
Table of Contents
Item 12: Exhibits.
(a) | (1) | Registrant’s code of ethics (that is the subject of the disclosure required by Item 2(a)) is attached. |
(2) | Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. | |
(3) | Not applicable. | |
(b) | A certification for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSR with the Commission. |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Capital Trust | ||||
By: | /s/ Marie Chandoha | |||
Chief Executive Officer | ||||
Date: | 12/13/12 |
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 | |||
Chief Executive Officer | ||||
Date: | 12/13/12 | |||
By: | /s/ George Pereira | |||
Principal Financial Officer | ||||
Date: | 12/13/12 |