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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: 811-7704
Schwab Capital Trust
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Marie Chandoha
Schwab Capital Trust
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
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, 2013
Item 1: Report(s) to Shareholders.
Table of Contents
Annual report dated October 31, 2013, 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, 2013
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 Schwab. 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 12 Months Ended October 31, 2013 | ||||
Schwab® S&P 500 Index Fund (Ticker Symbol: SWPPX) | 27.06% | |||
S&P 500® Index | 27.18% | |||
Fund Category: Morningstar Large Blend | 27.16% | |||
Performance Details | pages 6-7 | |||
Schwab 1000 Index® Fund (Ticker Symbol: SNXFX) | 27.85% | |||
Schwab 1000 Index® | 28.27% | |||
Fund Category: Morningstar Large Blend | 27.16% | |||
Performance Details | pages 8-9 | |||
Schwab Small-Cap Index Fund® (Ticker Symbol: SWSSX) | 36.23% | |||
Russell 2000® Index | 36.28% | |||
Fund Category: Morningstar Small Blend | 35.17% | |||
Performance Details | pages 10-11 | |||
Schwab Total Stock Market Index Fund® (Ticker Symbol: SWTSX) | 28.76% | |||
Dow Jones U.S. Total Stock Market Index | 28.86% | |||
Fund Category: Morningstar Large Blend | 27.16% | |||
Performance Details | pages 12-13 | |||
Schwab International Index Fund®1 (Ticker Symbol: SWISX) | 26.40% | |||
MSCI EAFE® Index (Net)* | 26.88% | |||
Fund Category: Morningstar Foreign Large Blend | 23.08% | |||
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.
For index definitions, please see the Glossary.
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 February 28, 2013, the fund changed its comparative index, for purposes of performance calculation, from MSCI EAFE Index (Gross) to MSCI EAFE Index (Net). The net version of the index more accurately reflects how dividends paid to the fund on its foreign securities are treated for tax purposes and provides a better basis for comparing the fund’s performance. The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. | |
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/0000950123-14-000021/f30154ctpchandom.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 goals, and for reading this annual report concerning the Schwab Equity Index Funds. Each fund employs an indexing strategy to track the performance of a particular stock market benchmark, seeking returns by modeling its portfolios according to the benchmark index.
Turning to the 12 months ended October 31, 2013, the funds generated returns that were generally aligned with their respective indices, and reflected a strong rally by stocks. The backdrop for these performances included Federal Reserve focus on keeping interest rates low through a policy of quantitative easing to stimulate the U.S. economy. Equities generally benefitted from this accommodative monetary policy stance. However, signs of economic improvement in the U.S. led the Fed to initially consider “tapering” this stimulus program. Long-term interest rates rose in response, and stocks traditionally known for paying high dividends underperformed. In spite of expectations to the contrary, the Fed’s anticipated tapering never materialized. This generally benefitted stocks and helped the market overcome uncertainty regarding a brief U.S. federal government shutdown and budgetary gridlock. Reflecting this environment, the S&P 500 Index returned 27.2% for the reporting period.
Equities in developed markets also performed well. Pockets of economic improvement in some countries, combined with low interest rates in many
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2013
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 27.18% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 36.28% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 26.88% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | −1.08% | 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/0000950123-14-000021/f30154ctcaptst02.gif)
Index figures assume dividends and distributions were reinvested, and do not include trading and management costs, which would lower performance. Indices are unmanaged, do not incur management fees, costs and expenses, and you cannot invest in them directly. Remember that past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
Schwab Equity Index Funds 3
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From the President continued
Turning to the 12 months ended October 31, 2013, the funds generated returns that were generally aligned with their respective indices, and reflected a strong rally by stocks.
parts of the world and relative stability in the euro zone, supported the performance of overseas stocks. Amid this backdrop, the MSCI EAFE Index returned 26.9%* for the reporting period.
For more information about the Schwab Equity Index Funds, please continue reading this report. In addition, you can find further details about the Schwab Equity Index Funds and our other investment products by visiting 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/0000950123-14-000021/f30154ctschandom.gif)
* The total return cited is for the MSCI EAFE Index (Net), which is calculated net of foreign withholding taxes. For full definitions of the referenced indices, please see the Glossary.
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. | |
![]() | Ferian Juwono, CFA, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent over three years as a portfolio manager, managing equity index funds for institutional clients, and nearly two years as a senior business analyst. Prior to that, Mr. Juwono worked for over four years as a senior financial analyst with Union Bank of California. | |
![]() | 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 included 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 27.06% for the 12-month period ended October 31, 2013, compared with the index, which returned 27.18%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Market Highlights. Large-cap U.S. stocks generated double-digit returns for the 12-month report period. The backdrop for these results included Federal Reserve efforts to keep interest rates low and speed up economic growth, making financing more affordable for businesses and households and generally supporting stocks. Relative stability in the euro zone was another positive factor.
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 approximately 16% of the fund. Financials stocks also performed well, returning approximately 32%, and reflecting the performance of companies involved in banking, diversified financial services, insurance, and real estate. One significant contributor in this sector was Berkshire Hathaway Inc., a holding company that owns subsidiaries in a variety of business sectors. The fund’s Berkshire Hathaway Inc. holdings returned approximately 33%.
The Consumer Discretionary sector, which represented an average weight of nearly 12% of the fund, also provided a meaningful total return contribution. The fund’s Consumer Discretionary stocks returned approximately 40%, reflecting the overall performance of companies involved in automobiles and components, durable goods and apparel, consumer services, media, and retailing. One significant contributor in this sector was Amazon.com, Inc., an online retailer that offers a wide range of products. The fund’s Amazon.com, Inc. holdings returned approximately 56%.
The Telecommunication Services sector generated positive returns for the fund, but was among the weakest total return contributors. This sector represented an average weight of approximately 3% of the fund, and returned approximately 13%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One significant detractor in this sector was CenturyLink Inc., an integrated communications company. The fund’s CenturyLink Inc. holdings returned approximately -6%.
The Utilities sector, which represented an average weight of approximately 3% of the fund, was another relatively weak contributor to the fund’s total return. The fund’s Utilities stocks returned approximately 10%, reflecting the overall performance of companies involved in gas, electric, and water utilities, as well as independent power production and energy trading. One significant detractor in this sector was Exelon Corporation, a utility services holding company. The fund’s Exelon Corporation holdings returned approximately -16%.
As of 10/31/13:
Statistics
Number of Holdings | 504 | |||
Weighted Average Market Cap ($ x 1,000,000) | $110,786 | |||
Price/Earnings Ratio (P/E) | 18.8 | |||
Price/Book Ratio (P/B) | 2.7 | |||
Portfolio Turnover Rate | 1% |
Sector Weightings % of Investments
Information Technology | 17.3% | |||
Financials | 15.6% | |||
Health Care | 12.7% | |||
Consumer Discretionary | 12.2% | |||
Industrials | 10.5% | |||
Energy | 10.3% | |||
Consumer Staples | 9.9% | |||
Materials | 3.4% | |||
Utilities | 3.1% | |||
Telecommunication Services | 2.4% | |||
Other | 2.6% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 3.0% | |||
Exxon Mobil Corp. | 2.4% | |||
Google, Inc., Class A | 1.8% | |||
Microsoft Corp. | 1.7% | |||
General Electric Co. | 1.7% | |||
Johnson & Johnson | 1.6% | |||
Chevron Corp. | 1.4% | |||
The Procter & Gamble Co. | 1.4% | |||
Berkshire Hathaway, Inc., Class B | 1.3% | |||
Wells Fargo & Co. | 1.3% | |||
Total | 17.6% |
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 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsspif.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab® S&P 500 Index Fund (5/19/97) | 27.06 | % | 15.10 | % | 7.41 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Fund Category: Morningstar Large Blend | 27.16 | % | 14.48 | % | 7.01 | % |
Fund Expense Ratios3: Net 0.09%; Gross 0.10%
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.
For index definitions, please see the Glossary.
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. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | On September 9, 2009, the Investor Share class, Select Share class and e.Shares class were combined into a single class of shares of the fund. The performance history of the fund prior to September 9, 2009 is that of the fund’s former Select Shares. On September 9, 2009, the Schwab Institutional Select S&P 500 Fund merged into the fund. | |
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. |
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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 goal, 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 27.85% for the 12-month period ended October 31, 2013, compared with the index, which returned 28.27%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Market Highlights. Large-cap U.S. stocks generated double-digit returns for the 12-month report period. The backdrop for these results included Federal Reserve efforts to keep interest rates low and speed up economic growth, making financing more affordable for businesses and households and generally supporting stocks. Relative stability in the euro zone was another positive factor.
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 approximately 17% of the fund. Financials stocks also performed well, returning approximately 31%, and reflecting the performance of companies involved in banking, diversified financial services, insurance, and real estate. One significant contributor in this sector was Berkshire Hathaway Inc., a holding company that owns subsidiaries in a variety of business sectors. The fund’s Berkshire Hathaway Inc. holdings returned approximately 33%.
The Consumer Discretionary sector, which represented an average weight of approximately 13% of the fund, also provided a meaningful total return contribution. The fund’s Consumer Discretionary stocks returned approximately 41%, reflecting the overall performance of companies involved in automobiles and components, durable goods and apparel, consumer services, media, and retailing. One significant contributor in this sector was Amazon.com, Inc., an online retailer that offers a wide range of products. The fund’s Amazon.com, Inc. holdings returned approximately 56%.
The Telecommunication Services sector generated positive returns for the fund, but was the weakest total return contributor. This sector represented an average weight of almost 3% of the fund, and returned approximately 14%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One significant detractor in this sector was CenturyLink Inc., an integrated communications company. The fund’s CenturyLink Inc. holdings returned approximately -6%.
The Utilities sector, which represented an average weight of approximately 3% of the fund, was another relatively weak contributor to the fund’s total return. The fund’s Utilities stocks returned roughly 11%, reflecting the overall performance of companies involved in gas, electric, and water utilities, as well as independent power production and energy trading. One significant detractor in this sector was Exelon Corporation, a utility services holding company. The fund’s Exelon Corporation holdings returned approximately -16%.
As of 10/31/13:
Statistics
Number of Holdings | 988 | |||
Weighted Average Market Cap ($ x 1,000,000) | $97,967 | |||
Price/Earnings Ratio (P/E) | 19.7 | |||
Price/Book Ratio (P/B) | 2.7 | |||
Portfolio Turnover Rate | 4% |
Sector Weightings % of Investments
Information Technology | 17.5% | |||
Financials | 16.5% | |||
Consumer Discretionary | 13.0% | |||
Health Care | 12.2% | |||
Industrials | 11.2% | |||
Energy | 10.0% | |||
Consumer Staples | 9.2% | |||
Materials | 3.7% | |||
Utilities | 3.2% | |||
Telecommunication Services | 2.3% | |||
Other | 1.2% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 2.6% | |||
Exxon Mobil Corp. | 2.2% | |||
Google, Inc., Class A | 1.6% | |||
Microsoft Corp. | 1.5% | |||
General Electric Co. | 1.5% | |||
Johnson & Johnson | 1.4% | |||
Chevron Corp. | 1.3% | |||
The Procter & Gamble Co. | 1.2% | |||
Wells Fargo & Co. | 1.1% | |||
Berkshire Hathaway, Inc., Class B | 1.1% | |||
Total | 15.5% |
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. |
8 Schwab Equity Index Funds
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Schwab 1000 Index® Fund
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154cts1if.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab 1000 Index® Fund (4/2/91) | 27.85 | % | 15.41 | % | 7.56 | % | |||||||||
Schwab 1000 Index® | 28.27 | % | 15.74 | % | 7.86 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Fund Category: Morningstar Large Blend | 27.16 | % | 14.48 | % | 7.01 | % |
Fund Expense Ratios3: Net 0.29%; Gross 0.34%
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.
For index definitions, please see the Glossary.
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 | On September 18, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 18, 2009 is that of the fund’s former Investor Shares. | |
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. |
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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 goal, 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 36.23% for the 12-month period ended October 31, 2013, compared with the index, which returned 36.28%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index. In addition, the fund engaged in securities lending, which positively contributed to the fund’s performance versus the index.
Market Highlights. Small-cap U.S. stocks generated double-digit returns for the 12-month report period. The backdrop for these results included Federal Reserve efforts to keep interest rates low and speed up economic growth, making financing more affordable for businesses and households and generally supporting stocks. Relative stability in the euro zone was another positive factor.
Contributors and Detractors. The Information Technology 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 Information Technology stocks comprising approximately 17% of the fund. Information Technology stocks also performed well, returning approximately 43%, and reflecting the performance of companies involved in Internet and software services. One significant contributor in this sector was CoStar Group Inc., a company that provides building-specific information to the U.S. commercial real estate industry. The fund’s CoStar Group Inc. holdings returned approximately 114%.
The Financials sector also provided a meaningful contribution to the fund’s total return. Financials stocks represented an average weight of approximately 23% of the fund, and returned 28%, reflecting the performance of companies involved in banking, diversified financial services, insurance, and real estate. One significant contributor in this sector was MGIC Investment Corporation, which provides private mortgage insurance coverage. The fund’s MGIC Investment Corporation holdings returned approximately 373%.
The Telecommunication Services sector generated positive returns for the fund, but was the weakest total return contributor. This sector represented an average weight of approximately 1% of the fund, and returned approximately 27%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One significant detractor in this sector was NII Holdings Inc., a mobile communications provider. The fund’s NII Holdings Inc. shares returned approximately -49%.
The Utilities sector, which represented an average weight of approximately 3% of the fund, was another relatively weak contributor to the fund’s total return contribution. The fund’s Utilities stocks returned approximately 14%, reflecting the overall performance of companies involved in gas, electric, and water utilities, as well as independent power production and energy trading. One significant detractor in this sector was Atlantic Power Corporation, which holds indirect interests in non-utility electric generating facilities. The fund’s Atlantic Power Corporation holdings returned approximately -67%.
As of 10/31/13:
Statistics
Number of Holdings | 1,987 | |||
Weighted Average Market Cap ($ x 1,000,000) | $1,697 | |||
Price/Earnings Ratio (P/E) | 10.0 | |||
Price/Book Ratio (P/B) | 1.8 | |||
Portfolio Turnover Rate | 11% |
Sector Weightings % of Investments
Financials | 21.9% | |||
Information Technology | 17.0% | |||
Industrials | 14.0% | |||
Consumer Discretionary | 13.2% | |||
Health Care | 12.1% | |||
Energy | 5.7% | |||
Materials | 4.7% | |||
Consumer Staples | 3.8% | |||
Utilities | 3.0% | |||
Telecommunication Services | 0.7% | |||
Other | 3.9% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
CoStar Group, Inc. | 0.3% | |||
athenahealth, Inc. | 0.3% | |||
Acuity Brands, Inc. | 0.3% | |||
The Middleby Corp. | 0.3% | |||
The Ultimate Software Group, Inc. | 0.3% | |||
US Airways Group, Inc. | 0.3% | |||
Align Technology, Inc. | 0.3% | |||
Brunswick Corp. | 0.2% | |||
Rite Aid Corp. | 0.2% | |||
Prosperity Bancshares, Inc. | 0.2% | |||
Total | 2.7% |
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.
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 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctssif.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Small-Cap Index Fund® (5/19/97) | 36.23 | % | 18.80 | % | 9.72 | % | |||||||||
Russell 2000® Index | 36.28 | % | 17.04 | % | 9.03 | % | |||||||||
Small-Cap Spliced Index3 | 36.28 | % | 18.93 | % | 9.82 | % | |||||||||
Fund Category: Morningstar Small Blend | 35.17 | % | 17.34 | % | 9.02 | % |
Fund Expense Ratios4: Net 0.25%; Gross 0.29%
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.
For index definitions, please see the Glossary.
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. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | On August 21, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to August 21, 2009 is that of the fund’s former Select Shares. | |
3 | The Small-Cap Spliced Index is an internally calculated index, comprised of the Schwab Small-Cap Index (the fund’s former comparative index) from inception of the fund until the close of business on December 14, 2011, and the Russell 2000 Index from December 15, 2011 forward. | |
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 0.08%. 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. To pursue its investment objective, the funds use 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 28.76% for the 12-month period ended October 31, 2013, compared with the index, which returned 28.86%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Market Highlights. U.S. stocks generated double-digit returns for the 12-month report period. The backdrop for these results included Federal Reserve efforts to keep interest rates low and speed up economic growth, making financing more affordable for businesses and households, and generally supporting stocks. Relative stability in the euro zone was another positive factor.
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 approximately 17% of the fund. Financials stocks also performed well, returning approximately 30%, and reflecting the performance of companies involved in banking, diversified financial services, insurance, and real estate. One significant contributor in this sector was Berkshire Hathaway Inc., a holding company that owns subsidiaries in a variety of business sectors. The fund’s Berkshire Hathaway Inc. holdings returned approximately 33%.
The Consumer Discretionary sector, which represented an average weight of approximately 13% of the fund, also provided a meaningful total return contribution. The fund’s Consumer Discretionary stocks returned approximately 41%, reflecting the overall performance of companies involved in automobiles and components, durable goods and apparel, consumer services, media, and retailing. One significant contributor in this sector was Amazon.com, Inc., an online retailer that offers a wide range of products. The fund’s Amazon.com, Inc. holdings returned approximately 56%.
The Telecommunication Services sector generated positive returns for the fund, but was the weakest total return contributor. This sector represented an average weight of approximately 3% of the fund, and returned approximately 15%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One significant detractor in this sector was CenturyLink Inc., an integrated communications company. The fund’s CenturyLink Inc. holdings returned approximately -6%.
The Utilities sector, which represented an average weight of approximately 3% of the fund, was another relatively weak contributor to the fund’s total return. The fund’s Utilities stocks returned approximately 12%, reflecting the overall performance of companies involved in gas, electric, and water utilities, as well as independent power production and energy trading. One significant detractor in this sector was Exelon Corporation, a utility services holding company. The fund’s Exelon Corporation holdings returned approximately -16%.
As of 10/31/13:
Statistics
Number of Holdings | 2,432 | |||
Weighted Average Market Cap ($ x 1,000,000) | $90,060 | |||
Price/Earnings Ratio (P/E) | 18.6 | |||
Price/Book Ratio (P/B) | 2.6 | |||
Portfolio Turnover Rate | 2% |
Sector Weightings % of Investments
Information Technology | 17.2% | |||
Financials | 16.8% | |||
Consumer Discretionary | 12.9% | |||
Health Care | 12.1% | |||
Industrials | 11.1% | |||
Energy | 9.4% | |||
Consumer Staples | 8.6% | |||
Materials | 3.7% | |||
Utilities | 3.1% | |||
Telecommunication Services | 2.2% | |||
Other | 2.9% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 2.4% | |||
Exxon Mobil Corp. | 2.0% | |||
Google, Inc., Class A | 1.4% | |||
Microsoft Corp. | 1.3% | |||
General Electric Co. | 1.3% | |||
Johnson & Johnson | 1.3% | |||
Chevron Corp. | 1.1% | |||
The Procter & Gamble Co. | 1.1% | |||
Wells Fargo & Co. | 1.0% | |||
Berkshire Hathaway, Inc., Class B | 1.0% | |||
Total | 13.9% |
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 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctstsmif.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Total Stock Market Index Fund® (6/1/99) | 28.76 | % | 15.99 | % | 8.15 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 28.86 | % | 16.01 | % | 8.13 | % | |||||||||
Fund Category: Morningstar Large Blend | 27.16 | % | 14.48 | % | 7.01 | % |
Fund Expense Ratios3: Net 0.09%; Gross 0.10%
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.
For index definitions, please see the Glossary.
“Dow Jones” and “The Dow Jones U.S. Total Stock Market Index” are service marks of Dow Jones & Company, Inc. and have been licensed for certain purposes by CSIM. The Schwab Total Stock Market Index Fund, based on The Dow Jones U.S. Total Stock Market Index, 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. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | On September 18, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 18, 2009 is that of the fund’s former Select Shares. | |
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 Equity Index Funds 13
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Schwab International Index Fund®
The Schwab International Index Fund (the fund) seeks to track the performance of the MSCI EAFE Index (Net) (the index), which measures the total return of large, publicly traded non-U.S. companies from countries with developed equity markets outside of the U.S. To pursue its goal, 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 26.40% for the 12-month period ended October 31, 2013, compared with the index, which returned 26.88%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index. In addition, timing differences in foreign exchange calculations detracted from the fund’s relative performance.*
Market Highlights. Stocks in developed international markets performed well, generating double-digit overall returns for the 12-month report period. Relative stability in the euro zone, some pockets of improvement in a few developed international economies, and central bank policies aimed at keeping interest rates low in many parts of the world were some of the factors supporting stocks, while major overseas currencies finished mixed versus the U.S. dollar.
Contributors and Detractors. Japanese stocks were the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of approximately 21%. In U.S. dollar terms, the fund’s Japanese stocks returned approximately 34%. One significant contributor in this market was Toyota Motor Corporation, a passenger vehicle company. The fund’s Toyota Motor Corporation holdings returned approximately 71% in U.S. dollar terms.
U.K. stocks also provided a meaningful contribution to the fund’s total return, and represented an average weight of approximately 22%. In U.S. dollar terms, the fund’s U.K. stocks returned approximately 21%. One significant contributor in this market was Vodafone Group PLC, a mobile telecommunications company. The fund’s Vodafone Group PLC holdings returned approximately 41% in U.S. dollar terms.
Israeli stocks generated positive returns for the fund, but were the weakest total return contributors from a country perspective. These stocks represented an average weight of less than 1% of the fund, and in U.S. dollar terms, returned approximately 1%. One significant detractor in this market was Teva Pharmaceutical Industries Ltd., a global pharmaceutical company. The fund’s Teva Pharmaceutical Industries Ltd. holdings returned approximately -5% in U.S. dollar terms.
Stocks from New Zealand also contributed little to the fund’s total return, while performing well on an absolute basis. New Zealand stocks represented less than 1% of the fund, while returning approximately 24% in U.S. dollar terms. One of the weaker contributors in this market was Contact Energy Limited, a diversified and integrated energy company. The fund’s Contact Energy Limited holdings returned approximately 1%.
As of 10/31/13:
Statistics
Number of Holdings | 921 | |||
Weighted Average Market Cap ($ x 1,000,000) | $61,996 | |||
Price/Earnings Ratio (P/E) | 18.9 | |||
Price/Book Ratio (P/B) | 0.8 | |||
Portfolio Turnover Rate | 5% |
Sector Weightings % of Investments
Financials | 25.0% | |||
Industrials | 12.4% | |||
Consumer Discretionary | 11.4% | |||
Consumer Staples | 10.8% | |||
Health Care | 9.7% | |||
Materials | 7.8% | |||
Energy | 6.7% | |||
Telecommunication Services | 5.5% | |||
Information Technology | 4.1% | |||
Utilities | 3.5% | |||
Other | 3.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Nestle S.A. – Reg’d | 1.7% | |||
HSBC Holdings plc | 1.5% | |||
Roche Holding AG | 1.5% | |||
Toyota Motor Corp. | 1.3% | |||
Novartis AG – Reg’d | 1.3% | |||
Vodafone Group plc | 1.3% | |||
BP plc | 1.1% | |||
Total S.A. | 1.0% | |||
GlaxoSmithKline plc | 1.0% | |||
Sanofi | 0.9% | |||
Total | 12.6% |
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. |
14 Schwab Equity Index Funds
Table of Contents
Schwab International Index Fund®
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsiif.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab International Index Fund® (5/19/97) | 26.40 | % | 11.32 | % | 7.67 | % | |||||||||
MSCI EAFE® Index (Net)3 | 26.88 | % | 11.99 | % | 7.71 | % | |||||||||
MSCI EAFE® Index (Gross)3 | 27.40 | % | 12.52 | % | 8.20 | % | |||||||||
International Spliced Index4 | 26.96 | % | 11.78 | % | 7.89 | % | |||||||||
Fund Category: Morningstar Foreign Large Blend | 23.08 | % | 11.74 | % | 7.45 | % |
Fund Expense Ratios5: Net 0.19%; Gross 0.23%
Country Weightings % of Investments
United Kingdom | 21.0% | |||
Japan | 20.3% | |||
France | 9.6% | |||
Switzerland | 8.7% | |||
Germany | 8.6% | |||
Australia | 7.9% | |||
Spain | 3.3% | |||
Sweden | 3.1% | |||
Hong Kong | 2.8% | |||
Netherlands | 2.6% | |||
Other Countries | 12.1% | |||
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.
For index definitions, please see the Glossary.
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. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | On August 21, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to August 21, 2009 is that of the fund’s former Select Shares. | |
3 | Effective February 28, 2013, the fund changed its comparative index, for purposes of performance calculation, from MSCI EAFE Index (Gross) to MSCI EAFE Index (Net). The net version of the index more accurately reflects how dividends paid to the fund on its foreign securities are treated for tax purposes and provides a better basis for comparing the fund’s performance. The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. | |
4 | The International Spliced Index is an internally calculated index, comprised of the Schwab International Index (the fund’s former comparative index) from inception of the fund until the close of business on December 20, 2011, the MSCI EAFE Index (Gross) from December 21, 2011 until the close of business on February 28, 2013, and the MSCI EAFE Index (Net) from March 1, 2013 forward. | |
5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 15
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2013 and held through October 31, 2013.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/13 | at 10/31/13 | 5/1/13–10/31/13 | |||||||||||||
Schwab® S&P 500 Index Fund | ||||||||||||||||
Actual Return | 0.09% | $ | 1,000.00 | $ | 1,110.80 | $ | 0.48 | |||||||||
Hypothetical 5% Return | 0.09% | $ | 1,000.00 | $ | 1,024.75 | $ | 0.46 | |||||||||
Schwab 1000 Index® Fund | ||||||||||||||||
Actual Return | 0.29% | $ | 1,000.00 | $ | 1,113.90 | $ | 1.55 | |||||||||
Hypothetical 5% Return | 0.29% | $ | 1,000.00 | $ | 1,023.74 | $ | 1.48 | |||||||||
Schwab Small-Cap Index Fund® | ||||||||||||||||
Actual Return | 0.17% | $ | 1,000.00 | $ | 1,168.90 | $ | 0.93 | |||||||||
Hypothetical 5% Return | 0.17% | $ | 1,000.00 | $ | 1,024.35 | $ | 0.87 | |||||||||
Schwab Total Stock Market Index Fund® | ||||||||||||||||
Actual Return | 0.09% | $ | 1,000.00 | $ | 1,119.00 | $ | 0.48 | |||||||||
Hypothetical 5% Return | 0.09% | $ | 1,000.00 | $ | 1,024.75 | $ | 0.46 | |||||||||
Schwab International Index Fund® | ||||||||||||||||
Actual Return | 0.19% | $ | 1,000.00 | $ | 1,083.20 | $ | 1.00 | |||||||||
Hypothetical 5% Return | 0.19% | $ | 1,000.00 | $ | 1,024.25 | $ | 0.97 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights 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 365 days of the fiscal year. |
16 Schwab Equity Index Funds
Table of Contents
Schwab® S&P 500 Index Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 22.35 | 19.82 | 18.70 | 16.28 | 15.28 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.52 | 0.44 | 0.39 | 0.35 | 0.20 | |||||||||||||||||
Net realized and unrealized gains (losses) | 5.40 | 2.49 | 1.09 | 2.31 | 1.22 | |||||||||||||||||
Total from investment operations | 5.92 | 2.93 | 1.48 | 2.66 | 1.42 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.49 | ) | (0.40 | ) | (0.36 | ) | (0.24 | ) | (0.42 | ) | ||||||||||||
Net asset value at end of period | 27.78 | 22.35 | 19.82 | 18.70 | 16.28 | |||||||||||||||||
Total return (%) | 27.06 | 15.09 | 7.97 | 16.50 | 9.81 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.09 | 0.09 | 0.09 | 0.09 | 0.13 | 2 | ||||||||||||||||
Gross operating expenses | 0.09 | 0.10 | 0.10 | 0.10 | 0.16 | |||||||||||||||||
Net investment income (loss) | 2.10 | 2.09 | 1.96 | 1.97 | 2.09 | |||||||||||||||||
Portfolio turnover rate | 1 | 2 | 3 | 2 | 3 | 3 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 17,121 | 12,687 | 10,909 | 10,007 | 8,718 |
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 ratio.
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, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | .2% | Common Stock | 10,242,641,102 | 16,648,423,804 | ||||||||
2 | .6% | Short-Term Investments | 437,649,083 | 437,649,083 | ||||||||
99 | .8% | Total Investments | 10,680,290,185 | 17,086,072,887 | ||||||||
0 | .1% | Collateral Invested for Securities on Loan | 20,143,201 | 20,143,201 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 14,822,536 | |||||||||
100 | .0% | Net Assets | 17,121,038,624 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 97.2% of net assets | ||||||||||||
Automobiles & Components 1.1% | ||||||||||||
Other Securities | 1.1 | 193,128,646 | ||||||||||
Banks 2.8% | ||||||||||||
Wells Fargo & Co. | 5,149,209 | 1.3 | 219,819,732 | |||||||||
Other Securities | 1.5 | 250,524,800 | ||||||||||
2.8 | 470,344,532 | |||||||||||
Capital Goods 7.9% | ||||||||||||
3M Co. | 691,919 | 0.5 | 87,078,006 | |||||||||
General Electric Co. | 10,901,752 | 1.7 | 284,971,797 | |||||||||
The Boeing Co. | 739,654 | 0.6 | 96,524,847 | |||||||||
United Technologies Corp. | 899,535 | 0.5 | 95,575,594 | |||||||||
Other Securities | 4.6 | 796,238,324 | ||||||||||
7.9 | 1,360,388,568 | |||||||||||
Commercial & Professional Supplies 0.7% | ||||||||||||
Other Securities | 0.7 | 111,184,191 | ||||||||||
Consumer Durables & Apparel 1.2% | ||||||||||||
Other Securities | 1.2 | 202,719,721 | ||||||||||
Consumer Services 1.8% | ||||||||||||
McDonald’s Corp. | 1,073,638 | 0.6 | 103,627,540 | |||||||||
Other Securities | 1.2 | 200,627,293 | ||||||||||
1.8 | 304,254,833 | |||||||||||
Diversified Financials 8.0% | ||||||||||||
American Express Co. | 999,741 | 0.5 | 81,778,814 | |||||||||
Bank of America Corp. | 11,448,611 | 0.9 | 159,822,610 | |||||||||
Berkshire Hathaway, Inc., Class B * | 1,923,330 | 1.3 | 221,336,816 | |||||||||
Citigroup, Inc. | 3,240,747 | 0.9 | 158,083,639 | |||||||||
JPMorgan Chase & Co. | 4,011,331 | 1.2 | 206,744,000 | |||||||||
The Charles Schwab Corp. (a) | 1,232,381 | 0.2 | 27,913,430 | |||||||||
Other Securities | 3.0 | 512,161,313 | ||||||||||
8.0 | 1,367,840,622 | |||||||||||
Energy 10.2% | ||||||||||||
Chevron Corp. | 2,058,934 | 1.4 | 246,989,723 | |||||||||
ConocoPhillips | 1,299,390 | 0.6 | 95,245,287 | |||||||||
Exxon Mobil Corp. | 4,687,841 | 2.4 | 420,124,310 | |||||||||
Occidental Petroleum Corp. | 858,650 | 0.5 | 82,499,092 | |||||||||
Schlumberger Ltd. | 1,420,015 | 0.8 | 133,083,806 | |||||||||
Other Securities | 4.5 | 775,902,953 | ||||||||||
10.2 | 1,753,845,171 | |||||||||||
Food & Staples Retailing 2.4% | ||||||||||||
CVS Caremark Corp. | 1,309,051 | 0.5 | 81,501,515 | |||||||||
Wal-Mart Stores, Inc. | 1,727,302 | 0.8 | 132,570,429 | |||||||||
Other Securities | 1.1 | 188,082,892 | ||||||||||
2.4 | 402,154,836 | |||||||||||
Food, Beverage & Tobacco 5.3% | ||||||||||||
Altria Group, Inc. | 2,117,791 | 0.5 | 78,845,359 | |||||||||
PepsiCo, Inc. | 1,643,463 | 0.8 | 138,198,804 | |||||||||
Philip Morris International, Inc. | 1,724,346 | 0.9 | 153,673,715 | |||||||||
The Coca-Cola Co. | 4,062,856 | 0.9 | 160,767,212 | |||||||||
Other Securities | 2.2 | 383,590,073 | ||||||||||
5.3 | 915,075,163 | |||||||||||
Health Care Equipment & Services 4.1% | ||||||||||||
Other Securities | 4.1 | 695,978,837 | ||||||||||
Household & Personal Products 2.2% | ||||||||||||
The Procter & Gamble Co. | 2,918,590 | 1.4 | 235,676,142 | |||||||||
Other Securities | 0.8 | 144,972,573 | ||||||||||
2.2 | 380,648,715 | |||||||||||
Insurance 2.9% | ||||||||||||
American International Group, Inc. | 1,566,554 | 0.5 | 80,912,514 | |||||||||
Other Securities | 2.4 | 421,681,110 | ||||||||||
2.9 | 502,593,624 | |||||||||||
Materials 3.4% | ||||||||||||
Other Securities | 3.4 | 584,157,134 |
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 3.6% | ||||||||||||
Comcast Corp., Class A | 2,776,464 | 0.8 | 132,104,157 | |||||||||
The Walt Disney Co. | 1,770,483 | 0.7 | 121,437,429 | |||||||||
Other Securities | 2.1 | 365,951,119 | ||||||||||
3.6 | 619,492,705 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.6% | ||||||||||||
AbbVie, Inc. | 1,689,586 | 0.5 | 81,860,442 | |||||||||
Amgen, Inc. | 797,759 | 0.5 | 92,540,044 | |||||||||
Bristol-Myers Squibb Co. | 1,754,464 | 0.5 | 92,144,449 | |||||||||
Gilead Sciences, Inc. * | 1,631,150 | 0.7 | 115,795,339 | |||||||||
Johnson & Johnson | 3,003,125 | 1.6 | 278,119,406 | |||||||||
Merck & Co., Inc. | 3,118,514 | 0.8 | 140,613,796 | |||||||||
Pfizer, Inc. | 7,035,733 | 1.3 | 215,856,289 | |||||||||
Other Securities | 2.7 | 452,801,415 | ||||||||||
8.6 | 1,469,731,180 | |||||||||||
Real Estate 1.9% | ||||||||||||
Other Securities | 1.9 | 330,352,892 | ||||||||||
Retailing 4.5% | ||||||||||||
Amazon.com, Inc. * | 394,380 | 0.9 | 143,566,151 | |||||||||
The Home Depot, Inc. | 1,540,150 | 0.7 | 119,962,283 | |||||||||
Other Securities | 2.9 | 499,052,197 | ||||||||||
4.5 | 762,580,631 | |||||||||||
Semiconductors & Semiconductor Equipment 2.0% | ||||||||||||
Intel Corp. | 5,309,105 | 0.8 | 129,701,435 | |||||||||
Other Securities | 1.2 | 210,639,262 | ||||||||||
2.0 | 340,340,697 | |||||||||||
Software & Services 9.1% | ||||||||||||
Google, Inc., Class A * | 298,107 | 1.8 | 307,223,112 | |||||||||
International Business Machines Corp. | 1,098,890 | 1.2 | 196,932,077 | |||||||||
MasterCard, Inc., Class A | 110,549 | 0.5 | 79,274,688 | |||||||||
Microsoft Corp. | 8,078,031 | 1.7 | 285,558,396 | |||||||||
Oracle Corp. | 3,799,886 | 0.7 | 127,296,181 | |||||||||
Visa, Inc., Class A | 550,100 | 0.6 | 108,188,167 | |||||||||
Other Securities | 2.6 | 453,213,855 | ||||||||||
9.1 | 1,557,686,476 | |||||||||||
Technology Hardware & Equipment 6.2% | ||||||||||||
Apple, Inc. | 968,154 | 3.0 | 505,715,242 | |||||||||
Cisco Systems, Inc. | 5,713,628 | 0.7 | 128,556,630 | |||||||||
QUALCOMM, Inc. | 1,821,665 | 0.7 | 126,551,067 | |||||||||
Other Securities | 1.8 | 300,320,067 | ||||||||||
6.2 | 1,061,143,006 | |||||||||||
Telecommunication Services 2.4% | ||||||||||||
AT&T, Inc. | 5,672,236 | 1.2 | 205,334,943 | |||||||||
Verizon Communications, Inc. | 3,049,578 | 0.9 | 154,034,185 | |||||||||
Other Securities | 0.3 | 58,466,716 | ||||||||||
2.4 | 417,835,844 | |||||||||||
Transportation 1.9% | ||||||||||||
United Parcel Service, Inc., Class B | 769,918 | 0.4 | 75,636,744 | |||||||||
Other Securities | 1.5 | 248,009,989 | ||||||||||
1.9 | 323,646,733 | |||||||||||
Utilities 3.0% | ||||||||||||
Other Securities | 3.0 | 521,299,047 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $10,242,641,102) | 16,648,423,804 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 2.6% of net assets | ||||||||||||
Time Deposits 2.4% | ||||||||||||
Skandinaviska Enskilda Banken | ||||||||||||
0.03%, 11/01/13 | 190,701,794 | 1.1 | 190,701,794 | |||||||||
Societe Generale | ||||||||||||
0.03%, 11/01/13 | 214,723,131 | 1.2 | 214,723,131 | |||||||||
Other Securities | 0.1 | 10,224,304 | ||||||||||
2.4 | 415,649,229 | |||||||||||
U.S. Treasury Obligations 0.2% | ||||||||||||
Other Securities | 0.2 | 21,999,854 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $437,649,083) | 437,649,083 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.1% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (e) | 20,143,201 | 0.1 | 20,143,201 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $20,143,201) | 20,143,201 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, tax basis cost of the fund’s investments was $10,717,310,195 and the unrealized appreciation and depreciation were $7,023,566,575 and ($654,803,883), respectively, with a net unrealized appreciation of $6,368,762,692.
See financial notes 19
Table of Contents
Schwab S&P 500 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. Securities on loan were valued at $19,513,953. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 4,920 | 430,746,000 | 10,951,103 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $16,648,423,804 | $— | $— | $16,648,423,804 | ||||||||||||
Short-Term Investments1 | — | 437,649,083 | — | 437,649,083 | ||||||||||||
Total | $16,648,423,804 | $437,649,083 | $— | $17,086,072,887 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $20,143,201 | $— | $— | $20,143,201 | ||||||||||||
Futures Contract2 | 10,951,103 | — | — | 10,951,103 |
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, 2013.
20 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated issuers, at value (cost $15,517,881) | $27,913,430 | |||||
Investments in unaffiliated issuers, at value (cost $10,664,772,304) including securities on loan of $19,513,953 | + | 17,058,159,457 | ||||
Total investments, at value (cost $10,680,290,185) | 17,086,072,887 | |||||
Collateral invested for securities on loan | 20,143,201 | |||||
Receivables: | ||||||
Fund shares sold | 39,205,684 | |||||
Dividends | 16,913,159 | |||||
Foreign tax reclaims | 25,838 | |||||
Income from securities on loan | 18,833 | |||||
Interest | 346 | |||||
Prepaid expenses | + | 276,148 | ||||
Total assets | 17,162,656,096 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 20,143,201 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 82,245 | |||||
Shareholder service fees | 31,645 | |||||
Independent trustees’ fees | 14 | |||||
Fund shares redeemed | 18,493,793 | |||||
Variation margin on futures contracts | 2,361,600 | |||||
Accrued expenses | + | 504,974 | ||||
Total liabilities | 41,617,472 | |||||
Net Assets | ||||||
Total assets | 17,162,656,096 | |||||
Total liabilities | − | 41,617,472 | ||||
Net assets | $17,121,038,624 | |||||
Net Assets by Source | ||||||
Capital received from investors | 10,818,088,774 | |||||
Net investment income not yet distributed | 231,017,629 | |||||
Net realized capital losses | (344,801,584 | ) | ||||
Net unrealized capital appreciation | 6,416,733,805 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$17,121,038,624 | 616,413,990 | $27.78 |
See financial notes 21
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated issuer | $265,675 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $218,887) | 323,309,294 | |||||
Interest | 121,887 | |||||
Securities on loan | + | 651,824 | ||||
Total investment income | 324,348,680 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 8,879,397 | |||||
Shareholder service fees | 2,863,824 | |||||
Transfer agent fees | 414,927 | |||||
Portfolio accounting fees | 341,057 | |||||
Registration fees | 336,918 | |||||
Shareholder reports | 299,994 | |||||
Custodian fees | 267,326 | |||||
Independent trustees’ fees | 107,140 | |||||
Professional fees | 95,892 | |||||
Index fee | 74,795 | |||||
Other expenses | + | 321,650 | ||||
Total expenses | 14,002,920 | |||||
Expense reduction by CSIM and its affiliates | − | 683,825 | ||||
Net expenses | − | 13,319,095 | ||||
Net investment income | 311,029,585 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on unaffiliated investments | (14,416,210 | ) | ||||
Net realized gains on futures contracts | + | 67,946,299 | ||||
Net realized gains | 53,530,089 | |||||
Net change in unrealized appreciation on affiliated issuer | 10,203,701 | |||||
Net change in unrealized appreciation on unaffiliated investments | 3,140,413,722 | |||||
Net change in unrealized appreciation on futures contracts | + | 16,087,228 | ||||
Net change in unrealized appreciation | + | 3,166,704,651 | ||||
Net realized and unrealized gains | 3,220,234,740 | |||||
Increase in net assets resulting from operations | $3,531,264,325 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $311,029,585 | $249,809,268 | ||||||||
Net realized gains | 53,530,089 | 34,935,609 | ||||||||
Net change in unrealized appreciation | + | 3,166,704,651 | 1,365,738,638 | |||||||
Increase in net assets from operations | 3,531,264,325 | 1,650,483,515 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($278,278,089 | ) | ($218,494,240 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 155,380,507 | $3,830,088,605 | 94,452,205 | $2,011,893,595 | ||||||||||||||
Shares reinvested | 11,251,940 | 248,330,312 | 10,225,170 | 196,221,005 | ||||||||||||||
Shares redeemed | + | (117,760,806 | ) | (2,897,316,141 | ) | (87,533,037 | ) | (1,861,743,855 | ) | |||||||||
Net transactions in fund shares | 48,871,641 | $1,181,102,776 | 17,144,338 | $346,370,745 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 567,542,349 | $12,686,949,612 | 550,398,011 | $10,908,589,592 | ||||||||||||||
Total increase | + | 48,871,641 | 4,434,089,012 | 17,144,338 | 1,778,360,020 | |||||||||||||
End of period | 616,413,990 | $17,121,038,624 | 567,542,349 | $12,686,949,612 | ||||||||||||||
Net investment income not yet distributed | $231,017,629 | $200,192,592 |
See financial notes 23
Table of Contents
Schwab 1000 Index® Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 40.23 | 37.44 | 35.79 | 31.00 | 28.69 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.81 | 2 | 0.71 | 2 | 0.62 | 2 | 0.57 | 2 | 0.54 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 9.74 | 4.32 | 2.07 | 4.80 | 2.41 | |||||||||||||||||
Total from investment operations | 10.55 | 5.03 | 2.69 | 5.37 | 2.95 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.81 | ) | (0.72 | ) | (0.57 | ) | (0.58 | ) | (0.64 | ) | ||||||||||||
Distributions from net realized gains | (1.66 | ) | (1.52 | ) | (0.47 | ) | — | — | ||||||||||||||
Total distributions | (2.47 | ) | (2.24 | ) | (1.04 | ) | (0.58 | ) | (0.64 | ) | ||||||||||||
Net asset value at end of period | 48.31 | 40.23 | 37.44 | 35.79 | 31.00 | |||||||||||||||||
Total return (%) | 27.85 | 14.38 | 7.60 | 17.51 | 10.72 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.29 | 0.29 | 0.29 | 0.29 | 0.38 | 3 | ||||||||||||||||
Gross operating expenses | 0.34 | 0.34 | 0.34 | 0.35 | 0.44 | |||||||||||||||||
Net investment income (loss) | 1.87 | 1.85 | 1.64 | 1.71 | 1.96 | |||||||||||||||||
Portfolio turnover rate | 4 | 4 | 5 | 5 | 4 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 5,887 | 4,848 | 4,552 | 4,575 | 4,279 |
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 ratio.
24 See financial notes
Table of Contents
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | .7% | Common Stock | 1,947,182,663 | 5,812,765,310 | ||||||||
1 | .1% | Other Investment Company | 65,007,364 | 65,007,364 | ||||||||
0 | .1% | Short-Term Investment | 2,899,981 | 2,899,981 | ||||||||
99 | .9% | Total Investments | 2,015,090,008 | 5,880,672,655 | ||||||||
0 | .5% | Collateral Invested for Securities on Loan | 27,618,344 | 27,618,344 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (21,059,399 | ) | ||||||||
100 | .0% | Net Assets | 5,887,231,600 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.7% of net assets | ||||||||||||
Automobiles & Components 1.3% | ||||||||||||
Other Securities | 1.3 | 74,683,791 | ||||||||||
Banks 2.9% | ||||||||||||
Wells Fargo & Co. | 1,572,396 | 1.1 | 67,125,585 | |||||||||
Other Securities | 1.8 | 101,651,787 | ||||||||||
2.9 | 168,777,372 | |||||||||||
Capital Goods 8.3% | ||||||||||||
3M Co. | 210,354 | 0.4 | 26,473,051 | |||||||||
General Electric Co. | 3,299,302 | 1.5 | 86,243,754 | |||||||||
The Boeing Co. | 224,889 | 0.5 | 29,348,014 | |||||||||
United Technologies Corp. | 270,303 | 0.5 | 28,719,694 | |||||||||
Other Securities | 5.4 | 318,700,402 | ||||||||||
8.3 | 489,484,915 | |||||||||||
Commercial & Professional Supplies 0.8% | ||||||||||||
Other Securities | 0.8 | 49,908,492 | ||||||||||
Consumer Durables & Apparel 1.4% | ||||||||||||
Other Securities | 1.4 | 84,808,534 | ||||||||||
Consumer Services 2.0% | ||||||||||||
McDonald’s Corp. | 323,736 | 0.5 | 31,246,999 | |||||||||
Other Securities | 1.5 | 87,420,489 | ||||||||||
2.0 | 118,667,488 | |||||||||||
Diversified Financials 7.5% | ||||||||||||
American Express Co. | 299,877 | 0.4 | 24,529,939 | |||||||||
Bank of America Corp. | 3,490,541 | 0.8 | 48,727,952 | |||||||||
Berkshire Hathaway, Inc., Class B * | 583,112 | 1.1 | 67,104,529 | |||||||||
Citigroup, Inc. | 987,956 | 0.8 | 48,192,494 | |||||||||
JPMorgan Chase & Co. | 1,216,778 | 1.1 | 62,712,738 | |||||||||
The Charles Schwab Corp. (a) | 367,065 | 0.1 | 8,314,022 | |||||||||
Other Securities | 3.2 | 179,132,295 | ||||||||||
7.5 | 438,713,969 | |||||||||||
Energy 10.0% | ||||||||||||
Chevron Corp. | 625,237 | 1.3 | 75,003,430 | |||||||||
ConocoPhillips | 397,266 | 0.5 | 29,119,598 | |||||||||
Exxon Mobil Corp. | 1,426,063 | 2.2 | 127,803,766 | |||||||||
Occidental Petroleum Corp. | 259,716 | 0.4 | 24,953,513 | |||||||||
Schlumberger Ltd. | 427,447 | 0.7 | 40,060,333 | |||||||||
Other Securities | 4.9 | 290,970,395 | ||||||||||
10.0 | 587,911,035 | |||||||||||
Food & Staples Retailing 2.1% | ||||||||||||
CVS Caremark Corp. | 398,011 | 0.4 | 24,780,165 | |||||||||
Wal-Mart Stores, Inc. | 532,527 | 0.7 | 40,871,447 | |||||||||
Other Securities | 1.0 | 59,425,195 | ||||||||||
2.1 | 125,076,807 | |||||||||||
Food, Beverage & Tobacco 5.0% | ||||||||||||
Altria Group, Inc. | 649,205 | 0.4 | 24,169,902 | |||||||||
PepsiCo, Inc. | 500,385 | 0.7 | 42,077,375 | |||||||||
Philip Morris International, Inc. | 524,365 | 0.8 | 46,731,409 | |||||||||
The Coca-Cola Co. | 1,226,248 | 0.8 | 48,522,633 | |||||||||
Other Securities | 2.3 | 131,271,103 | ||||||||||
5.0 | 292,772,422 | |||||||||||
Health Care Equipment & Services 4.2% | ||||||||||||
Other Securities | 4.2 | 244,969,779 | ||||||||||
Household & Personal Products 2.1% | ||||||||||||
The Procter & Gamble Co. | 888,719 | 1.2 | 71,764,059 | |||||||||
Other Securities | 0.9 | 53,362,979 | ||||||||||
2.1 | 125,127,038 | |||||||||||
Insurance 3.3% | ||||||||||||
American International Group, Inc. | 481,976 | 0.4 | 24,894,060 | |||||||||
Other Securities | 2.9 | 167,606,988 | ||||||||||
3.3 | 192,501,048 | |||||||||||
Materials 3.7% | ||||||||||||
Other Securities | 3.7 | 219,826,158 |
See financial notes 25
Table of Contents
Schwab 1000 Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Media 3.7% | ||||||||||||
Comcast Corp., Class A | 850,823 | 0.7 | 40,482,158 | |||||||||
The Walt Disney Co. | 538,260 | 0.6 | 36,919,254 | |||||||||
Other Securities | 2.4 | 142,076,096 | ||||||||||
3.7 | 219,477,508 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.0% | ||||||||||||
AbbVie, Inc. | 516,646 | 0.4 | 25,031,499 | |||||||||
Amgen, Inc. | 244,902 | 0.5 | 28,408,632 | |||||||||
Bristol-Myers Squibb Co. | 529,739 | 0.5 | 27,821,892 | |||||||||
Gilead Sciences, Inc. * | 491,644 | 0.6 | 34,901,807 | |||||||||
Johnson & Johnson | 914,287 | 1.4 | 84,672,119 | |||||||||
Merck & Co., Inc. | 948,118 | 0.7 | 42,750,641 | |||||||||
Pfizer, Inc. | 2,144,851 | 1.1 | 65,804,029 | |||||||||
Other Securities | 2.8 | 164,119,241 | ||||||||||
8.0 | 473,509,860 | |||||||||||
Real Estate 2.8% | ||||||||||||
Other Securities | 2.8 | 167,276,719 | ||||||||||
Retailing 4.6% | ||||||||||||
Amazon.com, Inc. * | 119,941 | 0.7 | 43,662,122 | |||||||||
The Home Depot, Inc. | 464,035 | 0.6 | 36,143,686 | |||||||||
Other Securities | 3.3 | 188,124,755 | ||||||||||
4.6 | 267,930,563 | |||||||||||
Semiconductors & Semiconductor Equipment 2.0% | ||||||||||||
Intel Corp. | 1,617,180 | 0.7 | 39,507,708 | |||||||||
Other Securities | 1.3 | 77,839,023 | ||||||||||
2.0 | 117,346,731 | |||||||||||
Software & Services 9.7% | ||||||||||||
Facebook, Inc., Class A * | 528,600 | 0.5 | 26,567,436 | |||||||||
Google, Inc., Class A * | 90,628 | 1.6 | 93,399,404 | |||||||||
International Business Machines Corp. | 333,640 | 1.0 | 59,791,624 | |||||||||
MasterCard, Inc., Class A | 33,984 | 0.4 | 24,369,926 | |||||||||
Microsoft Corp. | 2,455,838 | 1.5 | 86,813,873 | |||||||||
Oracle Corp. | 1,155,210 | 0.7 | 38,699,535 | |||||||||
Visa, Inc., Class A | 167,200 | 0.6 | 32,883,224 | |||||||||
Other Securities | 3.4 | 209,157,575 | ||||||||||
9.7 | 571,682,597 | |||||||||||
Technology Hardware & Equipment 5.8% | ||||||||||||
Apple, Inc. | 294,330 | 2.6 | 153,743,275 | |||||||||
Cisco Systems, Inc. | 1,737,715 | 0.7 | 39,098,587 | |||||||||
QUALCOMM, Inc. | 555,178 | 0.7 | 38,568,216 | |||||||||
Other Securities | 1.8 | 109,380,053 | ||||||||||
5.8 | 340,790,131 | |||||||||||
Telecommunication Services 2.3% | ||||||||||||
AT&T, Inc. | 1,720,677 | 1.1 | 62,288,507 | |||||||||
Verizon Communications, Inc. | 934,057 | 0.8 | 47,179,219 | |||||||||
Other Securities | 0.4 | 28,008,150 | ||||||||||
2.3 | 137,475,876 | |||||||||||
Transportation 2.0% | ||||||||||||
United Parcel Service, Inc., Class B | 234,035 | 0.4 | 22,991,598 | |||||||||
Other Securities | 1.6 | 93,651,182 | ||||||||||
2.0 | 116,642,780 | |||||||||||
Utilities 3.2% | ||||||||||||
Other Securities | 3.2 | 187,403,697 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $1,947,182,663) | 5,812,765,310 | |||||||||||
Other Investment Company 1.1% of net assets | ||||||||||||
Money Market Fund 1.1% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (e) | 65,007,364 | 1.1 | 65,007,364 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $65,007,364) | 65,007,364 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 2,899,981 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $2,899,981) | 2,899,981 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.5% of net assets | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (e) | 27,618,344 | 0.5 | 27,618,344 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $27,618,344) | 27,618,344 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, tax basis cost of the fund’s investments was $1,991,840,097 and the unrealized appreciation and depreciation were $3,917,847,320 and ($29,014,762), respectively, with a net unrealized appreciation of $3,888,832,558.
26 See financial notes
Table of Contents
Schwab 1000 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. Securities on loan were valued at $29,080,601. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 700 | 61,285,000 | 2,309,463 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $5,812,765,310 | $— | $— | $5,812,765,310 | ||||||||||||
Other Investment Company1 | 65,007,364 | — | — | 65,007,364 | ||||||||||||
Short-Term Investment1 | — | 2,899,981 | — | 2,899,981 | ||||||||||||
Total | $5,877,772,674 | $2,899,981 | $— | $5,880,672,655 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $27,618,344 | $— | $— | $27,618,344 | ||||||||||||
Futures Contract2 | 2,309,463 | — | — | 2,309,463 |
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | $64,997 | $3,754 | ($4,047 | ) | $— | ($64,704 | ) | $— | $— | $— | ||||||||||||||||||||||
Total | $64,997 | $3,754 | ($4,047 | ) | $— | ($64,704 | ) | $— | $— | $— | ||||||||||||||||||||||
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, 2013.
See financial notes 27
Table of Contents
Schwab 1000 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated issuers, at value (cost $1,803,228) | $8,314,022 | |||||
Investments in unaffiliated issuers, at value (cost $2,013,286,780) including securities on loan of $29,080,601 | + | 5,872,358,633 | ||||
Total investments, at value (cost $2,015,090,008) | 5,880,672,655 | |||||
Collateral invested for securities on loan | 27,618,344 | |||||
Receivables: | ||||||
Dividends | 5,376,939 | |||||
Fund shares sold | 3,137,573 | |||||
Income from securities on loan | 42,694 | |||||
Foreign tax reclaims | 7,684 | |||||
Interest | 26 | |||||
Prepaid expenses | + | 125,899 | ||||
Total assets | 5,916,981,814 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 27,618,344 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 88,591 | |||||
Shareholder service fees | 52,358 | |||||
Fund shares redeemed | 1,526,929 | |||||
Variation margin on futures contracts | 336,000 | |||||
Accrued expenses | + | 127,992 | ||||
Total liabilities | 29,750,214 | |||||
Net Assets | ||||||
Total assets | 5,916,981,814 | |||||
Total liabilities | − | 29,750,214 | ||||
Net assets | $5,887,231,600 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,744,956,792 | |||||
Net investment income not yet distributed | 71,285,685 | |||||
Net realized capital gains | 203,097,013 | |||||
Net unrealized capital appreciation | 3,867,892,110 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$5,887,231,600 | 121,861,112 | $48.31 |
28 See financial notes
Table of Contents
Schwab 1000 Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated issuer | $88,096 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $78,874) | 114,115,709 | |||||
Interest | 3,026 | |||||
Securities on loan | + | 706,606 | ||||
Total investment income | 114,913,437 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 12,027,118 | |||||
Shareholder service fees | 5,170,537 | |||||
Portfolio accounting fees | 154,799 | |||||
Shareholder reports | 150,494 | |||||
Custodian fees | 110,971 | |||||
Transfer agent fees | 101,668 | |||||
Independent trustees’ fees | 62,362 | |||||
Professional fees | 61,974 | |||||
Registration fees | 53,376 | |||||
Interest expense | 912 | |||||
Other expenses | + | 111,351 | ||||
Total expenses | 18,005,562 | |||||
Expense reduction by CSIM and its affiliates | − | 2,585,003 | ||||
Custody credits | − | 27 | ||||
Net expenses | − | 15,420,532 | ||||
Net investment income | 99,492,905 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on unaffiliated investments | 173,475,052 | |||||
Net realized gains on futures contracts | + | 5,336,419 | ||||
Net realized gains | 178,811,471 | |||||
Net change in unrealized appreciation on affiliated issuer | 3,329,279 | |||||
Net change in unrealized appreciation on unaffiliated investments | 1,020,334,566 | |||||
Net change in unrealized appreciation on futures contracts | + | 2,974,753 | ||||
Net change in unrealized appreciation | + | 1,026,638,598 | ||||
Net realized and unrealized gains | 1,205,450,069 | |||||
Increase in net assets resulting from operations | $1,304,942,974 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $99,492,905 | $87,953,893 | ||||||||
Net realized gains | 178,811,471 | 196,881,889 | ||||||||
Net change in unrealized appreciation | + | 1,026,638,598 | 349,793,722 | |||||||
Increase in net assets from operations | 1,304,942,974 | 634,629,504 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (96,597,152 | ) | (86,671,033 | ) | ||||||
Distributions from net realized gains | + | (197,828,775 | ) | (183,283,175 | ) | |||||
Total distributions | ($294,425,927 | ) | ($269,954,208 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 9,372,908 | $400,294,068 | 6,643,918 | $254,453,021 | ||||||||||||||
Shares reinvested | 6,695,843 | 255,781,218 | 6,777,525 | 235,112,352 | ||||||||||||||
Shares redeemed | + | (14,700,117 | ) | (627,358,330 | ) | (14,504,214 | ) | (557,797,536 | ) | |||||||||
Net transactions in fund shares | 1,368,634 | $28,716,956 | (1,082,771 | ) | ($68,232,163 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 120,492,478 | $4,847,997,597 | 121,575,249 | $4,551,554,464 | ||||||||||||||
Total increase or decrease | + | 1,368,634 | 1,039,234,003 | (1,082,771 | ) | 296,443,133 | ||||||||||||
End of period | 121,861,112 | $5,887,231,600 | 120,492,478 | $4,847,997,597 | ||||||||||||||
Net investment income not yet distributed | $71,285,685 | $69,309,270 |
30 See financial notes
Table of Contents
Schwab Small-Cap Index Fund®
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 21.26 | 20.55 | 19.18 | 15.14 | 13.85 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.42 | 2 | 0.33 | 2 | 0.25 | 2 | 0.22 | 2 | 0.18 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 6.94 | 1.89 | 1.37 | 3.97 | 1.40 | |||||||||||||||||
Total from investment operations | 7.36 | 2.22 | 1.62 | 4.19 | 1.58 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.50 | ) | (0.35 | ) | (0.20 | ) | (0.15 | ) | (0.29 | ) | ||||||||||||
Distributions from net realized gains | (0.50 | ) | (1.16 | ) | (0.05 | ) | — | — | ||||||||||||||
Total distributions | (1.00 | ) | (1.51 | ) | (0.25 | ) | (0.15 | ) | (0.29 | ) | ||||||||||||
Net asset value at end of period | 27.62 | 21.26 | 20.55 | 19.18 | 15.14 | |||||||||||||||||
Total return (%) | 36.23 | 11.87 | 8.45 | 27.85 | 11.98 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.17 | 0.17 | 0.19 | 0.19 | 0.28 | 3 | ||||||||||||||||
Gross operating expenses | 0.20 | 0.21 | 0.19 | 0.20 | 0.33 | |||||||||||||||||
Net investment income (loss) | 1.76 | 1.63 | 1.18 | 1.23 | 1.41 | |||||||||||||||||
Portfolio turnover rate | 11 | 41 | 4 | 26 | 33 | 26 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,351 | 1,675 | 1,502 | 1,406 | 1,142 |
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 ratio.
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, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | ($) | ($) | ||||||||||
96 | .8% | Common Stock | 1,537,930,364 | 2,275,773,764 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
3 | .9% | Short-Term Investments | 92,364,342 | 92,364,342 | ||||||||
100 | .7% | Total Investments | 1,630,294,706 | 2,368,138,106 | ||||||||
3 | .9% | Collateral Invested for Securities on Loan | 90,885,937 | 90,885,937 | ||||||||
(4 | .6%) | Other Assets and Liabilities, Net | (107,670,879 | ) | ||||||||
100 | .0% | Net Assets | 2,351,353,164 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 96.8% of net assets | ||||||||||||
Automobiles & Components 1.0% | ||||||||||||
Tenneco, Inc. * | 87,900 | 0.2 | 4,664,853 | |||||||||
Other Securities | 0.8 | 19,500,890 | ||||||||||
1.0 | 24,165,743 | |||||||||||
Banks 8.5% | ||||||||||||
Firstmerit Corp. | 240,515 | 0.2 | 5,401,967 | |||||||||
Prosperity Bancshares, Inc. | 87,900 | 0.2 | 5,489,355 | |||||||||
Other Securities | 8.1 | 188,181,433 | ||||||||||
8.5 | 199,072,755 | |||||||||||
Capital Goods 8.9% | ||||||||||||
Acuity Brands, Inc. | 61,700 | 0.3 | 6,201,467 | |||||||||
Chart Industries, Inc. * | 43,700 | 0.2 | 4,696,439 | |||||||||
EnerSys, Inc. | 69,178 | 0.2 | 4,589,960 | |||||||||
HEICO Corp. | 95,806 | 0.2 | 5,133,299 | |||||||||
Teledyne Technologies, Inc. * | 55,300 | 0.2 | 4,911,746 | |||||||||
The Middleby Corp. * | 27,052 | 0.3 | 6,158,388 | |||||||||
Other Securities | 7.5 | 177,382,448 | ||||||||||
8.9 | 209,073,747 | |||||||||||
Commercial & Professional Supplies 3.4% | ||||||||||||
Other Securities | 3.4 | 80,467,570 | ||||||||||
Consumer Durables & Apparel 2.9% | ||||||||||||
Brunswick Corp. | 129,800 | 0.2 | 5,857,874 | |||||||||
Fifth & Pacific Cos., Inc. * | 171,400 | 0.2 | 4,540,386 | |||||||||
Wolverine World Wide, Inc. | 73,036 | 0.2 | 4,217,099 | |||||||||
Other Securities | 2.3 | 52,940,968 | ||||||||||
2.9 | 67,556,327 | |||||||||||
Consumer Services 4.1% | ||||||||||||
Sotheby’s | 98,300 | 0.2 | 5,101,770 | |||||||||
Other Securities | 3.9 | 90,620,126 | ||||||||||
4.1 | 95,721,896 | |||||||||||
Diversified Financials 3.7% | ||||||||||||
Portfolio Recovery Associates, Inc. * | 73,329 | 0.2 | 4,359,409 | |||||||||
Prospect Capital Corp. | 401,000 | 0.2 | 4,547,340 | |||||||||
Other Securities | 3.3 | 78,385,646 | ||||||||||
3.7 | 87,292,395 | |||||||||||
Energy 5.8% | ||||||||||||
Kodiak Oil & Gas Corp. * | 384,400 | 0.2 | 4,985,668 | |||||||||
Rosetta Resources, Inc. * | 88,300 | 0.2 | 5,292,702 | |||||||||
Other Securities | 5.4 | 125,252,532 | ||||||||||
5.8 | 135,530,902 | |||||||||||
Food & Staples Retailing 1.4% | ||||||||||||
Rite Aid Corp. * | 1,063,800 | 0.2 | 5,670,054 | |||||||||
United Natural Foods, Inc. * | 70,882 | 0.2 | 5,064,519 | |||||||||
Other Securities | 1.0 | 21,519,254 | ||||||||||
1.4 | 32,253,827 | |||||||||||
Food, Beverage & Tobacco 1.9% | ||||||||||||
The Hain Celestial Group, Inc. * | 55,931 | 0.2 | 4,655,137 | |||||||||
Other Securities | 1.7 | 40,047,384 | ||||||||||
1.9 | 44,702,521 | |||||||||||
Health Care Equipment & Services 6.8% | ||||||||||||
Align Technology, Inc. * | 104,700 | 0.3 | 5,974,182 | |||||||||
athenahealth, Inc. * | 52,700 | 0.3 | 7,035,977 | |||||||||
Centene Corp. * | 79,592 | 0.2 | 4,469,887 | |||||||||
HealthSouth Corp. | 124,300 | 0.2 | 4,364,173 | |||||||||
Medidata Solutions, Inc. * | 37,900 | 0.2 | 4,180,749 | |||||||||
Team Health Holdings, Inc. * | 97,900 | 0.2 | 4,252,776 | |||||||||
WellCare Health Plans, Inc. * | 62,600 | 0.2 | 4,174,168 | |||||||||
West Pharmaceutical Services, Inc. | 98,930 | 0.2 | 4,783,265 | |||||||||
Other Securities | 5.0 | 119,812,035 | ||||||||||
6.8 | 159,047,212 | |||||||||||
Household & Personal Products 0.5% | ||||||||||||
Other Securities | 0.5 | 12,934,656 |
32 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Insurance 2.3% | ||||||||||||
CNO Financial Group, Inc. | 316,700 | 0.2 | 4,934,186 | |||||||||
Other Securities | 2.1 | 49,210,374 | ||||||||||
2.3 | 54,144,560 | |||||||||||
Materials 4.7% | ||||||||||||
PolyOne Corp. | 142,354 | 0.2 | 4,313,326 | |||||||||
Other Securities | 4.5 | 105,895,036 | ||||||||||
4.7 | 110,208,362 | |||||||||||
Media 1.4% | ||||||||||||
Other Securities | 1.4 | 32,204,564 | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.4% | ||||||||||||
Alnylam Pharmaceuticals, Inc. * | 84,800 | 0.2 | 4,885,328 | |||||||||
Isis Pharmaceuticals, Inc. * | 163,600 | 0.2 | 5,442,972 | |||||||||
Questcor Pharmaceuticals, Inc. | 74,000 | 0.2 | 4,541,380 | |||||||||
Other Securities | 4.8 | 112,694,045 | ||||||||||
5.4 | 127,563,725 | |||||||||||
Real Estate 7.6% | ||||||||||||
Highwoods Properties, Inc. | 131,100 | 0.2 | 5,060,460 | |||||||||
LaSalle Hotel Properties | 149,726 | 0.2 | 4,648,992 | |||||||||
RLJ Lodging Trust | 178,100 | 0.2 | 4,498,806 | |||||||||
Other Securities | 7.0 | 163,693,986 | ||||||||||
7.6 | 177,902,244 | |||||||||||
Retailing 4.0% | ||||||||||||
Lumber Liquidators Holdings, Inc. * | 39,600 | 0.2 | 4,521,924 | |||||||||
Other Securities | 3.8 | 89,203,479 | ||||||||||
4.0 | 93,725,403 | |||||||||||
Semiconductors & Semiconductor Equipment 3.2% | ||||||||||||
Other Securities | 3.2 | 75,848,894 | ||||||||||
Software & Services 9.1% | ||||||||||||
Aspen Technology, Inc. * | 135,400 | 0.2 | 5,176,342 | |||||||||
CommVault Systems, Inc. * | 68,300 | 0.2 | 5,332,864 | |||||||||
CoStar Group, Inc. * | 41,075 | 0.3 | 7,269,864 | |||||||||
MAXIMUS, Inc. | 98,696 | 0.2 | 4,781,821 | |||||||||
PTC, Inc. * | 173,200 | 0.2 | 4,801,104 | |||||||||
The Ultimate Software Group, Inc. * | 39,800 | 0.3 | 6,148,304 | |||||||||
Tyler Technologies, Inc. * | 44,900 | 0.2 | 4,342,279 | |||||||||
WEX, Inc. * | 55,976 | 0.2 | 5,225,360 | |||||||||
Other Securities | 7.3 | 170,188,925 | ||||||||||
9.1 | 213,266,863 | |||||||||||
Technology Hardware & Equipment 4.8% | ||||||||||||
Belden, Inc. | 62,800 | 0.2 | 4,223,928 | |||||||||
FEI Co. | 59,700 | 0.2 | 5,318,076 | |||||||||
Other Securities | 4.4 | 104,293,019 | ||||||||||
4.8 | 113,835,023 | |||||||||||
Telecommunication Services 0.7% | ||||||||||||
Other Securities | 0.7 | 17,099,998 | ||||||||||
Transportation 1.7% | ||||||||||||
US Airways Group, Inc. * | 276,500 | 0.3 | 6,074,705 | |||||||||
Other Securities | 1.4 | 35,393,655 | ||||||||||
1.7 | 41,468,360 | |||||||||||
Utilities 3.0% | ||||||||||||
Other Securities | 3.0 | 70,686,217 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $1,537,930,364) | 2,275,773,764 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Banks 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Consumer Services 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 3.9% of net assets | ||||||||||||
Time Deposits 3.8% | ||||||||||||
Bank of Tokyo Mitsubishi | ||||||||||||
0.03%, 11/01/13 | 17,919,737 | 0.8 | 17,919,737 | |||||||||
DNB | ||||||||||||
0.03%, 11/01/13 | 70,794,629 | 3.0 | 70,794,629 | |||||||||
3.8 | 88,714,366 | |||||||||||
U.S. Treasury Obligations 0.1% | ||||||||||||
Other Securities | 0.1 | 3,649,976 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $92,364,342) | 92,364,342 | |||||||||||
End of Investments. | ||||||||||||
See financial notes 33
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 3.9% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 90,885,937 | 3.9 | 90,885,937 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $90,885,937) | 90,885,937 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13 tax basis cost of the fund’s investments was $1,639,221,728 and the unrealized appreciation and depreciation were $829,827,183 and ($100,910,805), respectively, with a net unrealized appreciation of $728,916,378.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $0 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $88,014,699. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/20/13 | 650 | 71,357,000 | 3,155,461 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $2,275,773,764 | $— | $— | $2,275,773,764 | ||||||||||||
Rights1 | — | — | — | — | ||||||||||||
Warrants1 | — | — | — | — | ||||||||||||
Short-Term Investments1 | — | 92,364,342 | — | 92,364,342 | ||||||||||||
Total | $2,275,773,764 | $92,364,342 | $— | $2,368,138,106 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $90,885,937 | $— | $— | $90,885,937 | ||||||||||||
Futures Contract2 | 3,155,461 | — | — | 3,155,461 |
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | $319,479 | $— | ($202,848 | ) | $— | $— | $— | ($116,631 | ) | $— | ||||||||||||||||||||||
Total | $319,479 | $— | ($202,848 | ) | $— | $— | $— | ($116,631 | ) | $— | ||||||||||||||||||||||
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 transfers out of Level 3 to Level 1 due to the result of fair valued securities for which no quoted value was available. There were no transfers between Level 1 and Level 2 for the period ended October 31, 2013.
34 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $1,630,294,706) including securities on loan of $88,014,699 | $2,368,138,106 | |||||
Collateral invested for securities on loan | 90,885,937 | |||||
Receivables: | ||||||
Investments sold | 4,668,014 | |||||
Fund shares sold | 4,509,414 | |||||
Dividends | 825,453 | |||||
Income from securities on loan | 329,658 | |||||
Interest | 76 | |||||
Prepaid expenses | + | 41,422 | ||||
Total assets | 2,469,398,080 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 90,885,937 | |||||
Payables: | ||||||
Investments bought | 25,458,179 | |||||
Investment adviser and administrator fees | 23,770 | |||||
Shareholder service fees | 4,486 | |||||
Fund shares redeemed | 914,594 | |||||
Variation margin on futures contracts | 575,898 | |||||
Accrued expenses | + | 182,052 | ||||
Total liabilities | 118,044,916 | |||||
Net Assets | ||||||
Total assets | 2,469,398,080 | |||||
Total liabilities | − | 118,044,916 | ||||
Net assets | $2,351,353,164 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,493,142,111 | |||||
Net investment income not yet distributed | 17,941,421 | |||||
Net realized capital gains | 99,270,762 | |||||
Net unrealized capital appreciation | 740,998,870 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$2,351,353,164 | 85,145,641 | $27.62 |
See financial notes 35
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $27,399) | $33,851,540 | |||||
Interest | 23,952 | |||||
Securities on loan | + | 4,549,702 | ||||
Total investment income | 38,425,194 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,986,400 | |||||
Shareholder service fees | 389,698 | |||||
Index fee | 233,494 | |||||
Portfolio accounting fees | 98,326 | |||||
Registration fees | 68,084 | |||||
Transfer agent fees | 65,161 | |||||
Shareholder reports | 64,179 | |||||
Custodian fees | 56,235 | |||||
Professional fees | 37,854 | |||||
Independent trustees’ fees | 20,219 | |||||
Other expenses | + | 39,644 | ||||
Total expenses | 4,059,294 | |||||
Expense reduction by CSIM and its affiliates | − | 674,708 | ||||
Net expenses | − | 3,384,586 | ||||
Net investment income | 35,040,608 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 91,184,165 | |||||
Net realized gains on futures contracts | 12,341,806 | |||||
Net realized losses on foreign currency transactions | + | (406 | ) | |||
Net realized gains | 103,525,565 | |||||
Net change in unrealized appreciation on investments | 470,396,765 | |||||
Net change in unrealized appreciation on futures contracts | 4,505,583 | |||||
Net change in unrealized depreciation on foreign currency translations | + | (13 | ) | |||
Net change in unrealized appreciation | + | 474,902,335 | ||||
Net realized and unrealized gains | 578,427,900 | |||||
Increase in net assets resulting from operations | $613,468,508 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $35,040,608 | $25,899,729 | ||||||||
Net realized gains | 103,525,565 | 42,756,059 | ||||||||
Net change in unrealized appreciation | + | 474,902,335 | 105,693,799 | |||||||
Increase in net assets from operations | 613,468,508 | 174,349,587 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (39,112,389 | ) | (25,652,389 | ) | ||||||
Distributions from net realized gains | + | (39,238,431 | ) | (84,544,390 | ) | |||||
Total distributions | ($78,350,820 | ) | ($110,196,779 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 17,519,506 | $419,420,964 | 13,103,409 | $271,438,282 | ||||||||||||||
Shares reinvested | 3,540,194 | 72,432,373 | 5,456,861 | 101,552,188 | ||||||||||||||
Shares redeemed | + | (14,685,439 | ) | (350,359,363 | ) | (12,880,545 | ) | (264,077,786 | ) | |||||||||
Net transactions in fund shares | 6,374,261 | $141,493,974 | 5,679,725 | $108,912,684 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 78,771,380 | $1,674,741,502 | 73,091,655 | $1,501,676,010 | ||||||||||||||
Total increase | + | 6,374,261 | 676,611,662 | 5,679,725 | 173,065,492 | |||||||||||||
End of period | 85,145,641 | $2,351,353,164 | 78,771,380 | $1,674,741,502 | ||||||||||||||
Net investment income not yet distributed | $17,941,421 | $21,861,474 |
See financial notes 37
Table of Contents
Schwab Total Stock Market Index Fund®
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 25.80 | 22.92 | 21.57 | 18.50 | 17.08 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.57 | 0.47 | 0.41 | 0.37 | 0.24 | |||||||||||||||||
Net realized and unrealized gains (losses) | 6.70 | 2.83 | 1.33 | 3.02 | 1.55 | |||||||||||||||||
Total from investment operations | 7.27 | 3.30 | 1.74 | 3.39 | 1.79 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.54 | ) | (0.42 | ) | (0.39 | ) | (0.32 | ) | (0.37 | ) | ||||||||||||
Net asset value at end of period | 32.53 | 25.80 | 22.92 | 21.57 | 18.50 | |||||||||||||||||
Total return (%) | 28.76 | 14.71 | 8.14 | 18.53 | 10.92 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.09 | 0.09 | 0.09 | 0.09 | 0.21 | 2 | ||||||||||||||||
Gross operating expenses | 0.10 | 0.10 | 0.11 | 0.11 | 0.28 | |||||||||||||||||
Net investment income (loss) | 2.02 | 2.02 | 1.79 | 1.85 | 2.02 | |||||||||||||||||
Portfolio turnover rate | 2 | 3 | 1 | 3 | 5 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 3,183 | 2,240 | 1,747 | 1,470 | 1,205 |
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 ratio.
38 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | ($) | ($) | ||||||||||
96 | .9% | Common Stock | 1,956,313,008 | 3,083,859,605 | ||||||||
0 | .0% | Warrants | 2 | 5 | ||||||||
2 | .9% | Short-Term Investments | 92,110,148 | 92,110,148 | ||||||||
99 | .8% | Total Investments | 2,048,423,158 | 3,175,969,758 | ||||||||
0 | .6% | Collateral Invested for Securities on Loan | 19,098,378 | 19,098,378 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (11,681,245 | ) | ||||||||
100 | .0% | Net Assets | 3,183,386,891 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 96.9% of net assets | ||||||||||||
Automobiles & Components 1.2% | ||||||||||||
Other Securities | 1.2 | 39,441,928 | ||||||||||
Banks 3.3% | ||||||||||||
Wells Fargo & Co. | 761,906 | 1.0 | 32,525,767 | |||||||||
Other Securities | 2.3 | 73,424,105 | ||||||||||
3.3 | 105,949,872 | |||||||||||
Capital Goods 8.1% | ||||||||||||
3M Co. | 102,400 | 0.4 | 12,887,040 | |||||||||
General Electric Co. | 1,614,166 | 1.3 | 42,194,299 | |||||||||
The Boeing Co. | 109,400 | 0.4 | 14,276,700 | |||||||||
United Technologies Corp. | 133,068 | 0.4 | 14,138,475 | |||||||||
Other Securities | 5.6 | 175,237,212 | ||||||||||
8.1 | 258,733,726 | |||||||||||
Commercial & Professional Supplies 1.1% | ||||||||||||
Other Securities | 1.1 | 33,645,546 | ||||||||||
Consumer Durables & Apparel 1.6% | ||||||||||||
Other Securities | 1.6 | 50,381,381 | ||||||||||
Consumer Services 2.2% | ||||||||||||
McDonald’s Corp. | 157,909 | 0.5 | 15,241,377 | |||||||||
Other Securities | 1.7 | 53,844,290 | ||||||||||
2.2 | 69,085,667 | |||||||||||
Diversified Financials 6.8% | ||||||||||||
American Express Co. | 149,250 | 0.4 | 12,208,650 | |||||||||
Bank of America Corp. | 1,694,056 | 0.7 | 23,649,022 | |||||||||
Berkshire Hathaway, Inc., Class B * | 284,774 | 1.0 | 32,771,792 | |||||||||
Citigroup, Inc. | 479,528 | 0.7 | 23,391,376 | |||||||||
JPMorgan Chase & Co. | 593,544 | 1.0 | 30,591,258 | |||||||||
The Charles Schwab Corp. (a) | 182,326 | 0.1 | 4,129,684 | |||||||||
Other Securities | 2.9 | 91,312,126 | ||||||||||
6.8 | 218,053,908 | |||||||||||
Energy 9.4% | ||||||||||||
Chevron Corp. | 304,639 | 1.1 | 36,544,494 | |||||||||
ConocoPhillips | 192,823 | 0.4 | 14,133,926 | |||||||||
Exxon Mobil Corp. | 694,134 | 2.0 | 62,208,289 | |||||||||
Occidental Petroleum Corp. | 127,020 | 0.4 | 12,204,082 | |||||||||
Schlumberger Ltd. | 208,760 | 0.6 | 19,564,987 | |||||||||
Other Securities | 4.9 | 153,552,113 | ||||||||||
9.4 | 298,207,891 | |||||||||||
Food & Staples Retailing 2.0% | ||||||||||||
CVS Caremark Corp. | 195,090 | 0.4 | 12,146,304 | |||||||||
Wal-Mart Stores, Inc. | 257,300 | 0.6 | 19,747,775 | |||||||||
Other Securities | 1.0 | 31,779,218 | ||||||||||
2.0 | 63,673,297 | |||||||||||
Food, Beverage & Tobacco 4.6% | ||||||||||||
Altria Group, Inc. | 316,500 | 0.4 | 11,783,295 | |||||||||
PepsiCo, Inc. | 243,158 | 0.6 | 20,447,156 | |||||||||
Philip Morris International, Inc. | 255,300 | 0.7 | 22,752,336 | |||||||||
The Coca-Cola Co. | 601,200 | 0.7 | 23,789,484 | |||||||||
Other Securities | 2.2 | 68,143,212 | ||||||||||
4.6 | 146,915,483 | |||||||||||
Health Care Equipment & Services 4.3% | ||||||||||||
Other Securities | 4.3 | 136,040,994 | ||||||||||
Household & Personal Products 2.0% | ||||||||||||
The Procter & Gamble Co. | 431,915 | 1.1 | 34,877,136 | |||||||||
Other Securities | 0.9 | 27,633,148 | ||||||||||
2.0 | 62,510,284 | |||||||||||
Insurance 3.2% | ||||||||||||
American International Group, Inc. | 232,796 | 0.4 | 12,023,913 | |||||||||
Other Securities | 2.8 | 89,030,373 | ||||||||||
3.2 | 101,054,286 | |||||||||||
Materials 3.7% | ||||||||||||
Other Securities | 3.7 | 118,685,864 |
See financial notes 39
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Media 3.5% | ||||||||||||
Comcast Corp., Class A | 411,104 | 0.6 | 19,560,328 | |||||||||
The Walt Disney Co. | 261,993 | 0.6 | 17,970,100 | |||||||||
Other Securities | 2.3 | 73,510,136 | ||||||||||
3.5 | 111,040,564 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.8% | ||||||||||||
AbbVie, Inc. | 250,005 | 0.4 | 12,112,742 | |||||||||
Amgen, Inc. | 118,768 | 0.4 | 13,777,088 | |||||||||
Bristol-Myers Squibb Co. | 259,650 | 0.4 | 13,636,818 | |||||||||
Gilead Sciences, Inc. * | 241,380 | 0.5 | 17,135,566 | |||||||||
Johnson & Johnson | 444,370 | 1.3 | 41,153,106 | |||||||||
Merck & Co., Inc. | 464,470 | 0.7 | 20,942,952 | |||||||||
Pfizer, Inc. | 1,041,701 | 1.0 | 31,959,387 | |||||||||
Other Securities | 3.1 | 97,283,687 | ||||||||||
7.8 | 248,001,346 | |||||||||||
Real Estate 3.4% | ||||||||||||
Other Securities | 3.4 | 107,888,447 | ||||||||||
Retailing 4.4% | ||||||||||||
Amazon.com, Inc. * | 58,400 | 0.7 | 21,259,352 | |||||||||
The Home Depot, Inc. | 228,070 | 0.6 | 17,764,372 | |||||||||
Other Securities | 3.1 | 102,462,819 | ||||||||||
4.4 | 141,486,543 | |||||||||||
Semiconductors & Semiconductor Equipment 2.1% | ||||||||||||
Intel Corp. | 785,632 | 0.6 | 19,192,990 | |||||||||
Other Securities | 1.5 | 47,224,775 | ||||||||||
2.1 | 66,417,765 | |||||||||||
Software & Services 9.4% | ||||||||||||
Facebook, Inc., Class A * | 257,300 | 0.4 | 12,931,898 | |||||||||
Google, Inc., Class A * | 44,065 | 1.4 | 45,412,508 | |||||||||
International Business Machines Corp. | 162,710 | 0.9 | 29,159,259 | |||||||||
MasterCard, Inc., Class A | 16,300 | 0.4 | 11,688,730 | |||||||||
Microsoft Corp. | 1,195,350 | 1.3 | 42,255,622 | |||||||||
Oracle Corp. | 562,249 | 0.6 | 18,835,342 | |||||||||
Visa, Inc., Class A | 81,400 | 0.5 | 16,008,938 | |||||||||
Other Securities | 3.9 | 122,532,418 | ||||||||||
9.4 | 298,824,715 | |||||||||||
Technology Hardware & Equipment 5.6% | ||||||||||||
Apple, Inc. | 143,300 | 2.4 | 74,852,755 | |||||||||
Cisco Systems, Inc. | 845,409 | 0.6 | 19,021,702 | |||||||||
QUALCOMM, Inc. | 269,700 | 0.6 | 18,736,059 | |||||||||
Other Securities | 2.0 | 67,405,334 | ||||||||||
5.6 | 180,015,850 | |||||||||||
Telecommunication Services 2.2% | ||||||||||||
AT&T, Inc. | 839,856 | 1.0 | 30,402,787 | |||||||||
Verizon Communications, Inc. | 451,272 | 0.7 | 22,793,749 | |||||||||
Other Securities | 0.5 | 15,593,531 | ||||||||||
2.2 | 68,790,067 | |||||||||||
Transportation 1.9% | ||||||||||||
Other Securities | 1.9 | 61,471,238 | ||||||||||
Utilities 3.1% | ||||||||||||
Other Securities | 3.1 | 97,542,943 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $1,956,313,008) | 3,083,859,605 | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Energy 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Real Estate 0.0% | ||||||||||||
Other Securities | 0.0 | 5 | ||||||||||
Total Warrants | ||||||||||||
(Cost $2) | 5 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 2.9% of net assets | ||||||||||||
Time Deposits 2.8% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||||||
0.03%, 11/01/13 | 73,797,969 | 2.3 | 73,797,969 | |||||||||
JPMorgan Chase | ||||||||||||
0.03%, 11/01/13 | 13,812,209 | 0.5 | 13,812,209 | |||||||||
2.8 | 87,610,178 | |||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 4,499,970 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $92,110,148) | 92,110,148 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.6% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 19,098,378 | 0.6 | 19,098,378 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $19,098,378) | 19,098,378 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13 tax basis cost of the fund’s investments was $2,061,401,063 and the unrealized appreciation and
40 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
depreciation were $1,194,577,512 and ($80,008,817), respectively, with a net unrealized appreciation of $1,114,568,695.
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) | Illiquid security. At the period end, the value of these amounted to $0 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $18,479,281. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. | |
(g) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/20/13 | 120 | 13,173,600 | 326,181 | |||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 900 | 78,795,000 | 2,282,356 | |||||||||
Net Unrealized Appreciation | 2,608,537 | |||||||||||
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $3,083,859,605 | $— | $— | $3,083,859,605 | ||||||||||||
Warrants1 | 5 | — | — | 5 | ||||||||||||
Short-Term Investments1 | — | 92,110,148 | — | 92,110,148 | ||||||||||||
Total | $3,083,859,610 | $92,110,148 | $— | $3,175,969,758 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $19,098,378 | $— | $— | $19,098,378 | ||||||||||||
Futures Contracts2 | 2,608,537 | — | — | 2,608,537 |
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | $86,391 | $966 | ($30,585 | ) | $— | ($35,387 | ) | $— | ($21,385 | ) | $— | |||||||||||||||||||||
Total | $86,391 | $966 | ($30,585 | ) | $— | ($35,387 | ) | $— | ($21,385 | ) | $— | |||||||||||||||||||||
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 transfers out of Level 3 to Level 1 due to the result of fair valued securities for which no quoted value was available. There were no transfers between Level 1 and Level 2 for the period ended October 31, 2013.
See financial notes 41
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated issuers, at value (cost $3,384,988) | $4,129,684 | |||||
Investments in unaffiliated issuers, at value (cost $2,045,038,170) including securities on loan of $18,479,281 | + | 3,171,840,074 | ||||
Total investments, at value (cost $2,048,423,158) | 3,175,969,758 | |||||
Collateral invested for securities on loan | 19,098,378 | |||||
Receivables: | ||||||
Investments sold | 281,805 | |||||
Fund shares sold | 5,881,701 | |||||
Dividends | 2,695,563 | |||||
Income from securities on loan | 52,472 | |||||
Foreign tax reclaims | 3,941 | |||||
Interest | 73 | |||||
Prepaid expenses | + | 49,727 | ||||
Total assets | 3,204,033,418 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 19,098,378 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 13,141 | |||||
Shareholder service fees | 5,991 | |||||
Independent trustees’ fees | 17 | |||||
Fund shares redeemed | 860,152 | |||||
Variation margin on futures contracts | 535,200 | |||||
Accrued expenses | + | 133,648 | ||||
Total liabilities | 20,646,527 | |||||
Net Assets | ||||||
Total assets | 3,204,033,418 | |||||
Total liabilities | − | 20,646,527 | ||||
Net assets | $3,183,386,891 | |||||
Net Assets by Source | ||||||
Capital received from investors | 2,015,866,264 | |||||
Net investment income not yet distributed | 39,398,594 | |||||
Net realized capital losses | (2,033,104 | ) | ||||
Net unrealized capital appreciation | 1,130,155,137 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$3,183,386,891 | 97,859,650 | $32.53 |
42 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated issuer | $39,648 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $33,947) | 55,849,485 | |||||
Interest | 18,013 | |||||
Securities on loan | + | 710,402 | ||||
Total investment income | 56,617,548 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,612,613 | |||||
Shareholder service fees | 518,724 | |||||
Registration fees | 125,606 | |||||
Portfolio accounting fees | 119,529 | |||||
Transfer agent fees | 92,513 | |||||
Shareholder reports | 86,121 | |||||
Custodian fees | 70,249 | |||||
Professional fees | 51,003 | |||||
Independent trustees’ fees | 24,929 | |||||
Other expenses | + | 50,911 | ||||
Total expenses | 2,752,198 | |||||
Expense reduction by CSIM and its affiliates | − | 333,278 | ||||
Net expenses | − | 2,418,920 | ||||
Net investment income | 54,198,628 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on unaffiliated investments | 7,036,591 | |||||
Net realized gains on futures contracts | + | 11,193,876 | ||||
Net realized gains | 18,230,467 | |||||
Net change in unrealized appreciation on affiliated issuer | 1,508,990 | |||||
Net change in unrealized appreciation on unaffiliated investments | 601,979,878 | |||||
Net change in unrealized appreciation on futures contracts | + | 3,110,518 | ||||
Net change in unrealized appreciation | + | 606,599,386 | ||||
Net realized and unrealized gains | 624,829,853 | |||||
Increase in net assets resulting from operations | $679,028,481 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $54,198,628 | $39,674,206 | ||||||||
Net realized gains | 18,230,467 | 12,059,250 | ||||||||
Net change in unrealized appreciation | + | 606,599,386 | 211,001,775 | |||||||
Increase in net assets from operations | 679,028,481 | 262,735,231 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($47,503,974 | ) | ($32,188,219 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 26,862,706 | $768,188,272 | 21,918,622 | $541,100,465 | ||||||||||||||
Shares reinvested | 1,519,219 | 38,800,859 | 1,240,438 | 27,500,498 | ||||||||||||||
Shares redeemed | + | (17,343,333 | ) | (494,804,875 | ) | (12,563,348 | ) | (306,292,186 | ) | |||||||||
Net transactions in fund shares | 11,038,592 | $312,184,256 | 10,595,712 | $262,308,777 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 86,821,058 | $2,239,678,128 | 76,225,346 | $1,746,822,339 | ||||||||||||||
Total increase | + | 11,038,592 | 943,708,763 | 10,595,712 | 492,855,789 | |||||||||||||
End of period | 97,859,650 | $3,183,386,891 | 86,821,058 | $2,239,678,128 | ||||||||||||||
Net investment income not yet distributed | $39,398,594 | $32,773,528 |
44 See financial notes
Table of Contents
Schwab International Index Fund®
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 16.32 | 16.02 | 17.31 | 16.26 | 13.95 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.49 | 0.57 | 0.57 | 0.48 | 0.37 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.69 | 0.33 | (1.38 | ) | 1.01 | 2.58 | ||||||||||||||||
Total from investment operations | 4.18 | 0.90 | (0.81 | ) | 1.49 | 2.95 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.58 | ) | (0.60 | ) | (0.48 | ) | (0.44 | ) | (0.64 | ) | ||||||||||||
Net asset value at end of period | 19.92 | 16.32 | 16.02 | 17.31 | 16.26 | |||||||||||||||||
Total return (%) | 26.40 | 6.07 | (4.83 | ) | 9.31 | 22.55 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.19 | 0.19 | 0.19 | 0.19 | 0.32 | 2 | ||||||||||||||||
Gross operating expenses | 0.23 | 0.23 | 0.21 | 0.22 | 0.41 | |||||||||||||||||
Net investment income (loss) | 2.88 | 3.66 | 3.26 | 2.88 | 2.92 | |||||||||||||||||
Portfolio turnover rate | 5 | 31 | 3 | 10 | 13 | 21 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,205 | 1,415 | 1,375 | 1,471 | 1,369 |
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 ratio.
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, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | ($) | ($) | ||||||||||
96 | .0% | Common Stock | 1,549,007,351 | 2,115,822,955 | ||||||||
0 | .6% | Preferred Stock | 8,346,686 | 13,040,219 | ||||||||
0 | .0% | Rights | 371,648 | 389,200 | ||||||||
0 | .4% | Other Investment Company | 8,089,400 | 9,223,200 | ||||||||
2 | .6% | Short-Term Investments | 58,322,640 | 58,322,640 | ||||||||
99 | .6% | Total Investments | 1,624,137,725 | 2,196,798,214 | ||||||||
0 | .2% | Collateral Invested for Securities on Loan | 4,637,410 | 4,637,410 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 3,227,192 | |||||||||
100 | .0% | Net Assets | 2,204,662,816 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 96.0% of net assets | ||||||||||||
Australia 7.9% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | 451,524 | 0.7 | 14,448,926 | |||||||||
BHP Billiton Ltd. | 528,494 | 0.8 | 18,684,048 | |||||||||
Commonwealth Bank of Australia | 265,248 | 0.9 | 19,098,522 | |||||||||
National Australia Bank Ltd. | 385,557 | 0.6 | 12,885,639 | |||||||||
Westpac Banking Corp. | 510,729 | 0.8 | 16,581,912 | |||||||||
Other Securities | 4.1 | 91,672,290 | ||||||||||
7.9 | 173,371,337 | |||||||||||
Austria 0.3% | ||||||||||||
Other Securities | 0.3 | 6,141,982 | ||||||||||
Belgium 1.1% | ||||||||||||
Anheuser-Busch InBev N.V. | 132,225 | 0.6 | 13,706,920 | |||||||||
Other Securities | 0.5 | 11,376,653 | ||||||||||
1.1 | 25,083,573 | |||||||||||
Denmark 1.1% | ||||||||||||
Novo Nordisk A/S, Class B | 65,535 | 0.5 | 10,915,023 | |||||||||
Other Securities | 0.6 | 12,578,430 | ||||||||||
1.1 | 23,493,453 | |||||||||||
Finland 0.9% | ||||||||||||
Other Securities | 0.9 | 19,327,424 | ||||||||||
France 9.5% | ||||||||||||
BNP Paribas S.A. | 163,535 | 0.5 | 12,064,490 | |||||||||
Sanofi | 196,090 | 0.9 | 20,907,729 | |||||||||
Total S.A. | 351,989 | 1.0 | 21,595,558 | |||||||||
Other Securities | 7.1 | 155,405,281 | ||||||||||
9.5 | 209,973,058 | |||||||||||
Germany 8.0% | ||||||||||||
Allianz SE - Reg’d | 75,028 | 0.6 | 12,597,375 | |||||||||
BASF SE | 151,139 | 0.7 | 15,690,419 | |||||||||
Bayer AG - Reg’d | 136,077 | 0.8 | 16,880,654 | |||||||||
Daimler AG - Reg’d | 158,297 | 0.6 | 12,960,531 | |||||||||
SAP AG | 151,616 | 0.5 | 11,864,274 | |||||||||
Siemens AG - Reg’d | 130,474 | 0.8 | 16,673,552 | |||||||||
Other Securities | 4.0 | 89,764,445 | ||||||||||
8.0 | 176,431,250 | |||||||||||
Greece 0.1% | ||||||||||||
Other Securities | 0.1 | 964,277 | ||||||||||
Hong Kong 2.8% | ||||||||||||
AIA Group Ltd. | 1,981,800 | 0.5 | 10,063,243 | |||||||||
Other Securities | 2.3 | 52,077,190 | ||||||||||
2.8 | 62,140,433 | |||||||||||
Ireland 0.3% | ||||||||||||
Other Securities | 0.3 | 7,348,091 | ||||||||||
Israel 0.4% | ||||||||||||
Other Securities | 0.4 | 9,173,622 | ||||||||||
Italy 2.2% | ||||||||||||
Eni S.p.A. | 418,612 | 0.5 | 10,627,271 | |||||||||
Other Securities | 1.7 | 38,389,754 | ||||||||||
2.2 | 49,017,025 | |||||||||||
Japan 20.3% | ||||||||||||
Honda Motor Co., Ltd. | 268,239 | 0.5 | 10,711,556 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 2,096,809 | 0.6 | 13,353,032 | |||||||||
Softbank Corp. | 158,100 | 0.5 | 11,806,728 | |||||||||
Sumitomo Mitsui Financial Group, Inc. | 209,446 | 0.5 | 10,123,755 | |||||||||
Toyota Motor Corp. | 453,903 | 1.3 | 29,430,241 | |||||||||
Other Securities | 16.9 | 371,565,511 | ||||||||||
20.3 | 446,990,823 | |||||||||||
Netherlands 2.6% | ||||||||||||
Unilever N.V. CVA | 268,056 | 0.5 | 10,627,195 |
46 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 2.1 | 46,461,814 | ||||||||||
2.6 | 57,089,009 | |||||||||||
New Zealand 0.1% | ||||||||||||
Other Securities | 0.1 | 2,616,879 | ||||||||||
Norway 0.8% | ||||||||||||
Other Securities | 0.8 | 17,744,068 | ||||||||||
Portugal 0.2% | ||||||||||||
Other Securities | 0.2 | 3,799,006 | ||||||||||
Singapore 1.5% | ||||||||||||
Other Securities | 1.5 | 32,952,279 | ||||||||||
Spain 3.2% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 921,450 | 0.5 | 10,768,908 | |||||||||
Banco Santander S.A. | 1,833,518 | 0.7 | 16,254,618 | |||||||||
Telefonica S.A. * | 673,997 | 0.5 | 11,861,882 | |||||||||
Other Securities | 1.5 | 32,351,631 | ||||||||||
3.2 | 71,237,039 | |||||||||||
Sweden 3.0% | ||||||||||||
Other Securities | 3.0 | 66,967,763 | ||||||||||
Switzerland 8.7% | ||||||||||||
Nestle S.A. - Reg’d | 530,651 | 1.7 | 38,304,464 | |||||||||
Novartis AG - Reg’d | 378,516 | 1.3 | 29,381,384 | |||||||||
Roche Holding AG | 115,609 | 1.5 | 31,969,980 | |||||||||
UBS AG - Reg’d * | 599,812 | 0.5 | 11,601,001 | |||||||||
Other Securities | 3.7 | 80,566,867 | ||||||||||
8.7 | 191,823,696 | |||||||||||
United Kingdom 21.0% | ||||||||||||
AstraZeneca plc | 206,035 | 0.5 | 10,907,519 | |||||||||
Barclays plc (b) | 2,513,976 | 0.5 | 10,577,451 | |||||||||
BG Group plc | 560,092 | 0.5 | 11,425,689 | |||||||||
BHP Billiton plc | 347,548 | 0.5 | 10,724,799 | |||||||||
BP plc | 3,124,521 | 1.1 | 24,254,414 | |||||||||
British American Tobacco plc | 315,648 | 0.8 | 17,415,007 | |||||||||
Diageo plc | 413,071 | 0.6 | 13,167,648 | |||||||||
GlaxoSmithKline plc | 810,567 | 1.0 | 21,368,454 | |||||||||
Glencore Xstrata plc * | 1,746,029 | 0.4 | 9,502,270 | |||||||||
HSBC Holdings plc | 3,065,004 | 1.5 | 33,596,547 | |||||||||
Lloyds Banking Group plc * | 7,606,845 | 0.4 | 9,408,119 | |||||||||
Rio Tinto plc | 209,172 | 0.5 | 10,584,135 | |||||||||
Royal Dutch Shell plc, A Shares | 624,969 | 0.9 | 20,814,470 | |||||||||
Royal Dutch Shell plc, B Shares | 421,118 | 0.7 | 14,579,107 | |||||||||
Standard Chartered plc | 398,338 | 0.4 | 9,564,089 | |||||||||
Vodafone Group plc | 8,009,957 | 1.3 | 29,338,526 | |||||||||
Other Securities | 9.4 | 204,908,624 | ||||||||||
21.0 | 462,136,868 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $1,549,007,351) | 2,115,822,955 | |||||||||||
Preferred Stock 0.6% of net assets | ||||||||||||
Germany 0.6% | ||||||||||||
Other Securities | 0.6 | 12,998,305 | ||||||||||
United Kingdom 0.0% | ||||||||||||
Other Securities | 0.0 | 41,914 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $8,346,686) | 13,040,219 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Hong Kong 0.0% | ||||||||||||
Other Securities | �� | 0.0 | — | |||||||||
Spain 0.0% | ||||||||||||
Other Securities | 0.0 | 389,200 | ||||||||||
Total Rights | ||||||||||||
(Cost $371,648) | 389,200 | |||||||||||
Other Investment Company 0.4% of net assets | ||||||||||||
United States 0.4% | ||||||||||||
iShares MSCI EAFE ETF | 140,000 | 0.4 | 9,223,200 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $8,089,400) | 9,223,200 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 2.6% of net assets | ||||||||||||
Time Deposits 2.4% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||||||
0.03%, 11/01/13 | 10,413,037 | 0.5 | 10,413,037 | |||||||||
DNB | ||||||||||||
0.03%, 11/01/13 | 41,779,649 | 1.9 | 41,779,649 | |||||||||
Other Securities | 0.0 | 229,990 | ||||||||||
2.4 | 52,422,676 | |||||||||||
U.S. Treasury Obligation 0.2% | ||||||||||||
Other Securities | 0.2 | 5,899,964 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $58,322,640) | 58,322,640 | |||||||||||
End of Investments. | ||||||||||||
See financial notes 47
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.2% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 4,637,410 | 0.2 | 4,637,410 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $4,637,410) | 4,637,410 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, the tax basis cost of the fund’s investments was $1,648,601,656 and the unrealized appreciation and depreciation were $645,861,051 and ($97,664,493), respectively, with a net unrealized appreciation of $548,196,558.
At 10/31/13, the values of certain foreign securities held by the fund aggregating $2,108,330,382 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. Securities on loan were valued at $3,176,224. | |
(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 $0 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt | |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
ETF — | Exchange traded fund | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/20/13 | 600 | 56,259,000 | 2,417,836 |
48 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $— | $315,314,569 | $— | $315,314,569 | ||||||||||||
Belgium | 516,861 | 24,566,712 | — | 25,083,573 | ||||||||||||
Denmark | 1,071,322 | 22,422,131 | — | 23,493,453 | ||||||||||||
France | 5,441,056 | 204,532,002 | — | 209,973,058 | ||||||||||||
Germany | 1,474,663 | 174,956,587 | — | 176,431,250 | ||||||||||||
Hong Kong | 241,971 | 61,898,462 | — | 62,140,433 | ||||||||||||
Ireland | 1,624,714 | 5,723,377 | — | 7,348,091 | ||||||||||||
Italy | 1,801,868 | 47,215,157 | — | 49,017,025 | ||||||||||||
Japan | 1,349,200 | 445,641,623 | — | 446,990,823 | ||||||||||||
Netherlands | 2,188,521 | 54,900,488 | — | 57,089,009 | ||||||||||||
Norway | 910,139 | 16,833,929 | — | 17,744,068 | ||||||||||||
Spain | 790,300 | 70,446,739 | — | 71,237,039 | ||||||||||||
Switzerland | 2,646,169 | 189,177,527 | — | 191,823,696 | ||||||||||||
United Kingdom | 434,094 | 461,702,774 | — | 462,136,868 | ||||||||||||
Preferred Stock1 | — | 12,998,305 | — | 12,998,305 | ||||||||||||
United Kingdom | — | — | 41,914 | 41,914 | ||||||||||||
Rights1 | — | — | 389,200 | 389,200 | ||||||||||||
Other Investment Company1 | 9,223,200 | — | — | 9,223,200 | ||||||||||||
Short-Term Investments1 | — | 58,322,640 | — | 58,322,640 | ||||||||||||
Total | $29,714,078 | $2,166,653,022 | $431,114 | $2,196,798,214 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $4,637,410 | $— | $— | $4,637,410 | ||||||||||||
Futures Contract2 | 2,417,836 | — | — | 2,417,836 |
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
United Kingdom | $30,829 | $282 | ($710 | ) | $42,263 | ($30,750 | ) | $— | $— | $41,914 | ||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||
Spain | — | — | 17,551 | 371,651 | (2 | ) | — | — | 389,200 | |||||||||||||||||||||||
Total | $30,829 | $282 | $16,841 | $413,914 | ($30,752 | ) | $— | $— | $431,114 | |||||||||||||||||||||||
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 appreciation (depreciation) for Level 3 investments held by the fund at October 31, 2013 was $17,202.
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 $2,269,842 and $7,978,350 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended October 31, 2013. 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 49
Table of Contents
Schwab International Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $1,624,137,725) including securities on loan of $3,176,224 | $2,196,798,214 | |||||
Collateral invested for securities on loan | 4,637,410 | |||||
Receivables: | ||||||
Fund shares sold | 5,306,530 | |||||
Dividends | 3,970,072 | |||||
Foreign tax reclaims | 1,603,737 | |||||
Income from securities on loan | 36,877 | |||||
Interest | 44 | |||||
Prepaid expenses | + | 39,198 | ||||
Total assets | 2,212,392,082 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 4,637,410 | |||||
Payables: | ||||||
Investments bought | 41,914 | |||||
Investment adviser and administrator fees | 20,763 | |||||
Shareholder service fees | 3,853 | |||||
Independent trustees’ fees | 5 | |||||
Fund shares redeemed | 2,418,287 | |||||
Variation margin on futures contracts | 246,000 | |||||
Due to custodian | 142,654 | |||||
Accrued expenses | + | 218,380 | ||||
Total liabilities | 7,729,266 | |||||
Net Assets | ||||||
Total assets | 2,212,392,082 | |||||
Total liabilities | − | 7,729,266 | ||||
Net assets | $2,204,662,816 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,622,772,444 | |||||
Net investment income not yet distributed | 35,386,171 | |||||
Net realized capital losses | (28,636,526 | ) | ||||
Net unrealized capital appreciation | 575,140,727 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$2,204,662,816 | 110,660,018 | $19.92 |
50 See financial notes
Table of Contents
Schwab International Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $3,674,497) | $52,911,420 | |||||
Interest | 18,105 | |||||
Securities on loan | + | 912,186 | ||||
Total investment income | 53,841,711 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,626,727 | |||||
Shareholder service fees | 343,226 | |||||
Custodian fees | 317,110 | |||||
Index fee | 243,648 | |||||
Registration fees | 116,663 | |||||
Portfolio accounting fees | 107,746 | |||||
Transfer agent fees | 68,132 | |||||
Shareholder reports | 57,284 | |||||
Professional fees | 42,883 | |||||
Independent trustees’ fees | 18,484 | |||||
Interest expense | 183 | |||||
Other expenses | + | 52,520 | ||||
Total expenses | 3,994,606 | |||||
Expense reduction by CSIM and its affiliates | − | 667,236 | ||||
Net expenses | − | 3,327,370 | ||||
Net investment income | 50,514,341 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 1,243,684 | |||||
Net realized gains on futures contracts | 5,794,059 | |||||
Net realized losses on foreign currency transactions | + | (236,734 | ) | |||
Net realized gains | 6,801,009 | |||||
Net change in unrealized appreciation on investments | 352,781,829 | |||||
Net change in unrealized appreciation on futures contracts | 2,417,836 | |||||
Net change in unrealized appreciation on foreign currency translations | + | 142,812 | ||||
Net change in unrealized appreciation | + | 355,342,477 | ||||
Net realized and unrealized gains | 362,143,486 | |||||
Increase in net assets resulting from operations | $412,657,827 |
See financial notes 51
Table of Contents
Schwab International Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $50,514,341 | $49,562,359 | ||||||||
Net realized gains | 6,801,009 | 54,688,994 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 355,342,477 | (22,069,338 | ) | ||||||
Increase in net assets from operations | 412,657,827 | 82,182,015 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($50,551,708 | ) | ($51,830,156 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 36,208,819 | $648,488,445 | 14,938,008 | $230,299,984 | ||||||||||||||
Shares reinvested | 2,784,477 | 45,581,882 | 3,211,483 | 47,080,346 | ||||||||||||||
Shares redeemed | + | (15,012,168 | ) | (266,487,088 | ) | (17,316,607 | ) | (267,897,568 | ) | |||||||||
Net transactions in fund shares | 23,981,128 | $427,583,239 | 832,884 | $9,482,762 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 86,678,890 | $1,414,973,458 | 85,846,006 | $1,375,138,837 | ||||||||||||||
Total increase | + | 23,981,128 | 789,689,358 | 832,884 | 39,834,621 | |||||||||||||
End of period | 110,660,018 | $2,204,662,816 | 86,678,890 | $1,414,973,458 | ||||||||||||||
Net investment income not yet distributed | $35,386,171 | $35,644,277 |
52 See financial notes
Table of Contents
Schwab Equity Index Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds 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 Target 2045 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2050 Fund | |||
Schwab International Index Fund | Schwab Target 2055 Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Fundamental US Large Company Index Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Fundamental US Small Company Index Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Fundamental International Large Company Index Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Fundamental International Small Company Index Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Fundamental Emerging Markets Large Company 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 Intermediate-Term Bond Fund | |||
Schwab Health Care Fund | (formerly Schwab Premier Income Fund) | |||
Schwab International Core Equity Fund | Schwab Total Bond Market Fund | |||
Schwab Target 2010 Fund | Schwab GNMA Fund | |||
Schwab Target 2015 Fund | Schwab Treasury Inflation Protected Securities Index 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 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:
• | Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at halfway between the most recent bid and ask quotes. Securities that are |
53
Table of Contents
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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 determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures. | |
• | Foreign equity security 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 NAV 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. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures. | |
• | Futures and forward foreign currency exchange contracts: Futures are valued at their settlement prices as of the close of their exchanges. Forwards are valued based on that day’s forward exchange rates or by using an interpolated forward exchange rate for contracts with interim settlement dates. | |
• | Short-term securities (60 days or less to maturity): Short-term securities are valued at amortized cost, which approximates market value. | |
• | Underlying funds: Mutual funds are valued at their respective NAVs. Exchange traded funds (“ETFs”) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable. |
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 inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which 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 |
54
Table of Contents
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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. |
• | 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, 2013 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 lending agent provides the fund with indemnification against borrower default. The fund bears the risk of loss with respect to the investment of cash collateral. 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. On loans collateralized by U.S. Treasury and/or federal agency obligations, a fee is received from the borrower, and is allocated between the fund and the lending agent.
55
Table of Contents
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The values of the securities on loan and the related cash collateral are disclosed in the Portfolio Holdings and the Statement of Assets and Liabilities for each fund. The following table presents the non-cash collateral as of October 31, 2013:
Non-Cash | ||||
Collateral Received | ||||
Schwab 1000 Index Fund | $2,294,984 |
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
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 differences 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 may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures or forward 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.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
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 may 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.
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Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(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, 2013, 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 attributable to these arrangements 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 has evaluated ASU No. 2011-11 and determined that upon adoption of the standard the funds’ financial statement disclosures will include the enhanced disclosures around rights of offset and related arrangements as required by the standard.
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 comparative index, although it may not be successful in doing so. The divergence between the performance of a fund and its 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 index, or match the securities’ weightings to the 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.
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Schwab Equity Index Funds
Financial Notes (continued)
3. Risk Factors (continued):
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 its comparative 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, 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, or asset class.
Historically, small-cap stocks have been riskier than large- and mid-cap stocks. Stock prices of smaller companies may be based in substantial part on future expectations rather than current achievements and may move sharply, especially during market upturns and downturns. Small-cap companies themselves may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments — bonds or large-cap stocks, for instance — a fund’s small-cap holdings could reduce performance.
Both large- and mid-cap stocks tend to go in and out of favor based on market and economic conditions. However, stocks of mid-cap companies tend to be more volatile than those of large-cap companies because mid-cap companies tend to be more susceptible to adverse business or economic events than larger more established companies. During a period when large- and mid-cap U.S. stocks fall behind other types of investments — bonds, for instance — a fund’s large- and mid-cap holdings could reduce performance.
A fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs.
To the extent a fund’s investments in a single country or a limited number of countries represent a higher percentage of the fund’s assets, the fund assumes the risk that economic, political and social conditions in those countries will have a significant impact on its investment performance and it may be subject to increased price volatility.
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.
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Schwab Equity Index Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions:
Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”), a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement (“Advisory Agreement”) between CSIM and 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% |
For its advisory and administrative services to the other funds discussed in this report, 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). 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 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 charged, excluding interest, taxes and certain non-routine expenses (“expense limitation”). 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% |
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Schwab Equity Index Funds
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. The table below shows funds with investment activities involving The Charles Schwab Corporation shares during the report period:
Balance | Balance | Realized | Dividends | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Fund | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,085,681 | 146,700 | — | 1,232,381 | $27,913,430 | $— | $265,675 | |||||||||||||||||||||
Schwab 1000 Index Fund | 367,065 | — | — | 367,065 | 8,314,022 | — | 88,096 | |||||||||||||||||||||
Schwab Total Stock Market Index Fund | 154,226 | 28,100 | — | 182,326 | 4,129,684 | — | 39,648 |
Certain Schwab Funds may own shares of other Schwab Funds. The table below reflects the percentages of shares of each fund in this report that are owned by other Schwab Funds as of October 31, 2013, as applicable:
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 All Equity Portfolio | 1.5% | —% | 6.2% | —% | 8.0% | |||||||||||||||
Schwab MarketTrack Growth Portfolio | 1.6% | —% | 5.8% | —% | 6.3% | |||||||||||||||
Schwab MarketTrack Balanced Portfolio | 0.8% | —% | 3.1% | —% | 3.3% | |||||||||||||||
Schwab MarketTrack Conservative Portfolio | 0.2% | —% | 0.9% | —% | 0.9% | |||||||||||||||
Schwab MarketTrack Growth Portfolio II | 0.1% | 0.1% | 0.3% | —% | 0.3% | |||||||||||||||
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% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2045 Fund | 0.0% | * | —% | —% | —% | —% | ||||||||||||||
Schwab Target 2050 Fund | 0.0% | * | —% | —% | —% | —% | ||||||||||||||
Schwab Target 2045 Fund | 0.0% | * | —% | —% | —% | —% |
* | Less than 0.05% |
Certain other related parties may own shares of Schwab funds in this report. As of October 31, 2013, 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, Schwab Total Stock Market Index Fund and Schwab International Index Fund were 2.5%, 6.2% and 3.6%, respectively.
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 to be charged on a 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.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust 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. For information regarding the trustees please refer to Trustees and Officers table at the end of this report.
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Schwab Equity Index Funds
Financial Notes (continued)
6. 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.
7. 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 variation margin for futures contracts held at October 31, 2013 are presented on the face of the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized/unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period, the month-end average contract 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 | $376,169,096 | 4,712 | ||||||
Schwab 1000 Index Fund | 35,385,806 | 435 | ||||||
Schwab Small-Cap Index Fund | 47,201,654 | 493 | ||||||
Schwab Total Stock Market Index Fund | 55,825,573 | 687 | ||||||
Schwab International Index Fund | 52,552,913 | 613 |
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2013, 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 | $1,245,529,489 | $178,456,063 | ||||||
Schwab 1000 Index Fund | 203,575,460 | 387,050,584 | ||||||
Schwab Small-Cap Index Fund | 351,703,956 | 211,970,555 | ||||||
Schwab Total Stock Market Index Fund | 321,439,276 | 41,876,038 | ||||||
Schwab International Index Fund | 463,141,620 | 88,970,945 |
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 | |||||||
(11/1/12-10/31/13) | (11/1/11-10/31/12) | |||||||
Schwab S&P 500 Index Fund | $199,433 | $148,766 | ||||||
Schwab 1000 Index Fund | 43,102 | 18,501 | ||||||
Schwab Small-Cap Index Fund | 22,392 | 13,063 | ||||||
Schwab Total Stock Market Index Fund | 45,887 | 149,791 | ||||||
Schwab International Index Fund | 17,950 | 11,378 |
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Schwab Equity Index Funds
Financial Notes (continued)
10. Federal Income Taxes:
As of October 31, 2013, 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 | $231,017,629 | $72,311,939 | $31,549,957 | $38,443,105 | $51,023,095 | |||||||||||||||
Undistributed long-term capital gains | — | 181,130,311 | 97,744,706 | 14,508,824 | — | |||||||||||||||
Unrealized appreciation on investments | 7,023,566,575 | 3,917,847,320 | 829,827,183 | 1,194,577,512 | 645,861,051 | |||||||||||||||
Unrealized depreciation on investments | (654,803,883 | ) | (29,014,762 | ) | (100,910,805 | ) | (80,008,817 | ) | (97,664,493 | ) | ||||||||||
Other unrealized appreciation (depreciation) | — | — | 10 | — | 62,403 | |||||||||||||||
Net unrealized appreciation (depreciation) | $6,368,762,692 | $3,888,832,558 | $728,916,388 | $1,114,568,695 | $548,258,961 | |||||||||||||||
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, 2013, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
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, 2014 | $109,256,533 | $— | $— | $— | $— | |||||||||||||||
October 31, 2015 | 89,645,092 | — | — | — | — | |||||||||||||||
October 31, 2016 | 77,879,594 | — | — | — | — | |||||||||||||||
October 31, 2017 | 20,049,252 | — | — | — | 17,391,687 | |||||||||||||||
Total | $296,830,471 | $— | $— | $— | $17,391,687 | |||||||||||||||
For the year ended October 31, 2013, the funds had capital losses utilized and capital losses expired as follows:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Capital losses utilized | $67,871,433 | $— | $— | $7,116,259 | $8,898,651 | |||||||||||||||
Capital losses expired | 50,785,672 | — | — | — | — |
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Schwab Equity Index Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
The tax-basis components of distributions paid during the current and prior fiscal years were 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 | $278,278,089 | $96,597,152 | $39,112,389 | $47,503,974 | $50,551,708 | |||||||||||||||
Long-term capital gains | — | 197,828,775 | 39,238,431 | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior 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 | — | — | — | — | — |
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, 2013, 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 | ($50,785,670 | ) | $— | $— | $— | $— | ||||||||||||||
Undistributed net investment income | (1,926,459 | ) | (919,338 | ) | 151,728 | (69,588 | ) | (220,739 | ) | |||||||||||
Net realized capital gains (losses) | 52,712,129 | 919,338 | (151,728 | ) | 69,588 | 220,739 |
As of October 31, 2013, 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, 2013, the funds did not incur any interest or penalties.
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 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, 2013, and 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 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 at October 31, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 17, 2013
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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 $2,757,251 to its shareholders for the year ended October 31, 2013. The respective foreign source income on the fund is $50,517,627.
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2013, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab S&P 500 Index Fund | 99.58 | ||||
Schwab 1000 Index Fund | 100.00 | ||||
Schwab Small-Cap Index Fund | 60.30 | ||||
Schwab Total Stock Market Index Fund | 94.62 | ||||
Schwab International Index Fund | — |
For the fiscal year ended October 31, 2013, 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 2014 via IRS form 1099 of the amounts for use in preparing their 2013 income tax return.
Schwab S&P 500 Index Fund | $278,278,089 | |||
Schwab 1000 Index Fund | 96,597,152 | |||
Schwab Small-Cap Index Fund | 24,033,593 | |||
Schwab Total Stock Market Index Fund | 46,221,077 | |||
Schwab International Index Fund | 41,320,653 |
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, 2013:
Schwab S&P 500 Index Fund | $— | |||
Schwab 1000 Index Fund | 197,828,775 | |||
Schwab Small-Cap Index Fund | 39,238,431 | |||
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 23, 2013, and June 4, 2013, and approved the renewal of the Agreements with respect to the Funds for an additional one-year term at the meeting held on June 4, 2013. The Board’s approval of the Agreements with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreements, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreements with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreements with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer 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 their 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 99 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the 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 (advisory services firm) (Oct. 2001 – present). | 76 | Director, WageWorks, Inc. (2010 – present) 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. 2000 – present). | 76 | 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). | 76 | Director, TOUSA (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Mission West Properties (1998 – 2012) Director, Ditech Networks Corporation (1997 – 2012) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2011.) | Private Investor. | 76 | 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). | 76 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) | |||
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). | 76 | Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc. (2009 – present) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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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 and Schwab Investments since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present). | 76 | 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. | 76 | 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. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. 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. | 99 | None | |||
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust and Schwab Investments since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 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). | |
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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
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 (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). | |
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). | |
David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Capital Trust and Schwab Investments since 2011.) | Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President and Assistant Secretary (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 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of 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 own stock of The Charles Schwab Corporation, the parent company of 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.
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 capital gain or loss is considered unrealized appreciation or depreciation.
Dow Jones U.S. Total Stock Market Index An index that measures the performance of all U.S. equity securities with readily available prices.
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.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
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. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
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.
Schwab 1000 Index An index that represents the performance of the largest 1,000 publicly traded companies in the United States.
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
© 2013 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 Funds’ 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 Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 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 Index 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®.
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/0000950123-14-000021/f30154ctschwab02.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.
© 2013 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR13810-16
00107463
Table of Contents
Table of Contents
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Table of Contents
Annual report dated October 31, 2013, 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, 2013
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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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 Schwab. 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 12 Months Ended October 31, 2013 | ||||
Schwab Core Equity Fundtm (Ticker Symbol: SWANX) | 25.89% | |||
S&P 500® Index | 27.18% | |||
Fund Category: Morningstar Large Blend | 27.16% | |||
Performance Details | pages 8-9 | |||
Schwab Dividend Equity Fundtm (Ticker Symbol: SWDSX) | 27.99% | |||
S&P 500® Index | 27.18% | |||
Fund Category: Morningstar Large Value | 26.84% | |||
Performance Details | pages 10-11 | |||
Schwab Large-Cap Growth Fundtm (Ticker Symbol: SWLSX) | 26.76% | |||
Russell 1000 Growth Index | 28.30% | |||
Fund Category: Morningstar Large Growth | 29.40% | |||
Performance Details | pages 12-13 | |||
Schwab Small-Cap Equity Fundtm (Ticker Symbol: SWSCX) | 41.10% | |||
Russell 2000® Index | 36.28% | |||
Fund Category: Morningstar Small Blend | 35.17% | |||
Performance Details | pages 14-15 | |||
Schwab Hedged Equity Fundtm (Ticker Symbol: SWHEX) | 13.81% | |||
S&P 500® Index | 27.18% | |||
Fund Category: Morningstar Long/Short Equity | 12.66% | |||
Performance Details | pages 16-17 | |||
Schwab Financial Services Fundtm (Ticker Symbol: SWFFX) | 30.20% | |||
S&P 1500 SuperComposite Financials Sector Index | 31.28% | |||
Fund Category: Morningstar Financial | 31.06% | |||
Performance Details | pages 18-19 | |||
Schwab Health Care Fundtm1 (Ticker Symbol: SWHFX) | 35.46% | |||
Dow Jones Global Health Care Index | 30.80% | |||
Fund Category: Morningstar Health | 40.32% | |||
Performance Details | pages 20-21 | |||
Schwab® International Core Equity Fund1 (Ticker Symbol: SICNX) | 27.70% | |||
MSCI EAFE® Index (Gross) | 27.40% | |||
Fund Category: Morningstar Foreign Large Blend | 23.08% | |||
Performance Details | pages 22-23 | |||
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.
For index definitions, please see the Glossary.
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.
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. |
4 Schwab Active Equity Funds
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From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctpchandom.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 would like to thank you for trusting us to help you meet your investment goals, and for reading this annual report concerning the Schwab Active Equity Funds. Each fund employs a disciplined approach to investing that attempts to balance risks 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.
Turning to the 12 months ended October 31, 2013, the funds generated returns that reflected a strong performance by stocks, with the Schwab Small-Cap Equity Fund and Schwab Health Care Fund outperforming their comparative indices, and the Schwab Hedged Equity Fund underperforming its comparative index due to the nature of its investment strategies.
The backdrop for these results included policies by many of the world’s central banks aimed at keeping interest rates low to stimulate faster economic growth, and equities generally benefitted from these policies. However, some signs of improvement in the U.S. economy led the Federal Reserve to initially consider “tapering” its purchases of securities to keep interest rates low, while a brief U.S. federal government shutdown and budgetary gridlock created uncertainty in the financial markets. Stocks quickly overcame these obstacles as the Fed held off on the tapering, while stocks in developed international markets continued to rebound from previously depressed levels.
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2013
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 27.18% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 36.28% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 26.88% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | −1.08% | 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/0000950123-14-000021/f30154ctcaptst01.gif)
Index figures assume dividends and distributions were reinvested, and do not include trading and management costs, which would lower performance. Indices are unmanaged, do not incur management fees, costs and expenses, and you cannot invest in them directly. Remember that past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
Schwab Active Equity Funds 5
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From the President continued
Turning to the 12 months ended October 31, 2013, the funds generated returns that reflected a strong performance by stocks, with the Schwab Small-Cap Equity Fund and Schwab Health Care Fund outperforming their respective indices, and the Schwab Hedged Equity Fund underperforming its index due to the nature of its investment strategies.
In this environment, many U.S. stock market indices finished the period at or near record highs, and small-and mid-cap stocks generally outperformed large-cap stocks. Shares of companies in the Health Care and Financials sectors generated some of the highest returns, while Utilities and Telecommunication Services stocks generally underperformed by comparison. Reflecting this backdrop, the S&P 500 Index returned 27.2% for the reporting period, while the MSCI EAFE Index returned 26.9%.*
For more information about the Schwab Active Equity Funds, please continue reading this report. In addition, you can find further details about the Schwab Active Equity Funds and our other investment products by visiting 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/0000950123-14-000021/f30154ctschandom.gif)
* The total return cited is for the MSCI EAFE Index (Net), which is calculated net of foreign withholding. For full definitions of the referenced indices, please see the Glossary.
6 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. | |
![]() | Wei Li, Ph.D., CFA Portfolio Manager, is responsible for the day-to-day co-management of each of the funds, except for Schwab Core Equity Fund, Schwab International Core Equity Fund, and Schwab Small-Cap Equity Fund. Prior to joining CSIM in 2012, Ms. Li spent more than ten years at BlackRock, Inc. (formerly Barclays Global Investors), where she held a number of positions. From 2001 to 2009, she worked in various roles in the Global Advanced Active group, including portfolio management and quantitative research for both U.S. and international equity markets. After 2009, she worked in the defined contribution research and product development area for almost two years. |
Schwab Active Equity Funds 7
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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 25.89% for the 12 months ended October 31, 2013, underperforming the S&P 500 Index (the index), which the fund uses for performance comparisons. The index returned 27.18% for the reporting period.
Market Highlights. All sectors within the index generated positive returns for the reporting period, as equities benefitted from the low-rate environment and some signs of improving economic conditions. The Consumer Discretionary and Industrials sectors performed particularly well, while the Utilities and Telecommunications sectors generated positive returns but underperformed by comparison.
Positioning and Strategies. The fund’s stock selections among large and mid-sized market-capitalization groups represented one of the most significant detractors from performance relative to the index. For example, the fund did not own shares of Gilead Sciences, Inc., a research-based biopharmaceutical company that represented a relatively large position in the index. Within the index, this Health Care sector holding returned approximately 111%, as the company reported solid financial results and benefitted from its strong line-up of products to treat life-threatening diseases. As a result, the fund’s lack of holdings in Gilead Sciences, Inc. represented a notable detractor from the fund’s relative performance.
However, some of the fund’s stock selections worked out more favorably. For example, the fund held an overweight compared with the index in Celgene Corporation, a global biopharmaceutical company. The company showed strong clinical results for its flagship product, which treats multiple types of cancer. As a result, the fund’s holdings of Celgene Corporation returned approximately 103%, and enhanced relative performance.
Among market sectors, the fund’s over- and underweights compared with the index generally detracted from the fund’s relative performance, although stock selection within these sectors generally helped performance overall. Stock selection in the Consumer Discretionary and Financials sectors detracted from the fund’s performance the most compared with the index, while stock selection in the Health Care and Energy sectors generated more successful results.
Within the Consumer Discretionary sector, for example, the fund held shares of Foot Locker, Inc. a retailer of athletic footwear and apparel. These holdings were not included in the index and generated a roughly flat return for the fund, underperforming the approximately 35% return for this sector within the fund, and reducing the fund’s return compared with the index.
As of 10/31/13:
Statistics
Number of Holdings | 127 | |||
Weighted Average Market Cap ($ x 1,000,000) | $91,361 | |||
Price/Earnings Ratio (P/E) | 17.5 | |||
Price/Book Ratio (P/B) | 2.2 | |||
Portfolio Turnover Rate | 80% |
Sector Weightings % of Investments
Information Technology | 17.2% | |||
Health Care | 15.5% | |||
Financials | 13.8% | |||
Consumer Discretionary | 13.8% | |||
Energy | 10.7% | |||
Industrials | 9.2% | |||
Consumer Staples | 8.3% | |||
Utilities | 4.1% | |||
Materials | 4.0% | |||
Telecommunication Services | 3.1% | |||
Other | 0.3% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Wells Fargo & Co. | 3.2% | |||
Pfizer, Inc. | 2.9% | |||
Apple, Inc. | 2.9% | |||
Chevron Corp. | 2.7% | |||
JPMorgan Chase & Co. | 2.7% | |||
ConocoPhillips | 2.2% | |||
Cisco Systems, Inc. | 2.0% | |||
AT&T, Inc. | 1.8% | |||
Nike, Inc., Class B | 1.7% | |||
Oracle Corp. | 1.7% | |||
Total | 23.8% |
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
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Schwab Core Equity Fundtm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctscef.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) | 25.89 | % | 13.28 | % | 7.65 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Fund Category: Morningstar Large Blend | 27.16 | % | 14.48 | % | 7.01 | % |
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.
For index definitions, please see the Glossary.
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 | 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 12). | |
3 | 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. | |
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
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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 27.99% for the 12 months ended October 31, 2013, outperforming the S&P 500 Index (the index), which the fund uses for performance comparisons. The index returned 27.18% for the reporting period. As of October 31, 2013, the fund’s dividend yield was 2.61%, higher than the 2.04% dividend yield of the index. As of October 31, 2013, the fund’s 30-Day SEC yield was 1.67%.
Market Highlights. Dividend-paying stocks generally performed well early in the reporting period, helped by a backdrop of low interest rates and expectations for Federal Reserve policies to remain extremely accommodative throughout 2013. However, once the financial markets learned that the Federal Reserve was initially considering “tapering” its stimulative economic efforts, dividend-paying stocks sold off sharply. In spite of general expectations to the contrary, the Fed’s anticipated tapering failed to materialize, and dividend-paying stocks began to recover. In this environment, the Consumer Discretionary and Industrials sectors performed particularly well, while the Utilities and Telecommunications sectors generated positive overall returns but underperformed by comparison.
Positioning and Strategies. Effective stock selection across select sectors, market-capitalization groups, and valuation measures helped the fund outperform the index. In particular, the fund benefitted from stock selection among market-capitalization groups of between $10 billion and $25 billion compared with the index.
For example, the fund did not own shares of Apple, Inc. Apple faced strong competition in the smartphone and tablet markets during the reporting period, and continued to generally lose market share to rivals such as Samsung Electronics Co., Ltd. Within the index, holdings of Apple represented one of the larger positions among Information Technology stocks, and returned approximately -10%. By not owning shares of this company, the fund’s performance relative to the index was enhanced.
Within the Consumer Staples sector, the fund’s holdings of Archer-Daniels-Midland Co. performed well, and represented one of the fund’s larger holdings. Archer-Daniels-Midland Co. procures, transports, stores, and merchandises agricultural products, and the fund held an overweight in this company compared with the index during the 12-month reporting period. The company continued to experience dividend growth and performed well, with the fund’s holdings returning approximately 56%, roughly double the overall return generated by Consumer Staples stocks in the index. As a result, these holdings enhanced the fund’s performance compared with the index.
Among market sectors, careful stock selection more than compensated for the negative overall performance impact of over- and underweights in one sector or another compared with the index. Selections among Information Technology sector stocks were particularly strong, enhancing the fund’s relative performance more than stock selections in all other market sectors combined.
As of 10/31/13:
Statistics
Number of Holdings | 121 | |||
Weighted Average Market Cap ($ x 1,000,000) | $89,016 | |||
Price/Earnings Ratio (P/E) | 17.0 | |||
Price/Book Ratio (P/B) | 1.9 | |||
Portfolio Turnover Rate | 64% |
Sector Weightings % of Investments
Financials | 27.3% | |||
Energy | 13.7% | |||
Health Care | 10.9% | |||
Information Technology | 9.3% | |||
Consumer Discretionary | 8.3% | |||
Industrials | 8.0% | |||
Consumer Staples | 6.6% | |||
Utilities | 6.0% | |||
Materials | 5.3% | |||
Telecommunication Services | 3.2% | |||
Other | 1.4% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Johnson & Johnson | 3.7% | |||
Wells Fargo & Co. | 3.4% | |||
JPMorgan Chase & Co. | 3.2% | |||
Chevron Corp. | 3.0% | |||
Pfizer, Inc. | 3.0% | |||
AT&T, Inc. | 2.6% | |||
ConocoPhillips | 2.6% | |||
Exxon Mobil Corp. | 2.5% | |||
Cisco Systems, Inc. | 1.9% | |||
Archer-Daniels-Midland Co. | 1.7% | |||
Total | 27.6% |
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
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Schwab Dividend Equity Fundtm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsdef.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Dividend Equity Fundtm (9/2/03) | 27.99 | % | 13.65 | % | 8.41 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Russell 1000 Value Index | 28.29 | % | 14.06 | % | 7.81 | % | |||||||||
Fund Category: Morningstar Large Value | 26.84 | % | 13.73 | % | 7.19 | % |
Fund Expense Ratio4: 0.89%
Yields1
30-Day SEC Yield | 1.67% | |||
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.
For index definitions, please see the Glossary.
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 | On October 7, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 7, 2009 is that of the fund’s former Select Shares. | |
3 | 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. | |
4 | As stated in the prospectus. Reflects the total annual operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 11
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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 26.76% for the 12 months ended October 31, 2013, underperforming the Russell 1000 Growth Index (the index), which the fund uses for performance comparisons. The index returned 28.30% for the reporting period.
Market Highlights. All sectors within the index generated positive returns, as equities benefitted from the low-rate environment and some signs of improving economic conditions. The Health Care and Consumer Discretionary sectors performed particularly well, while the Information Technology and Telecommunication Services sectors generated positive returns but underperformed by comparison.
Positioning and Strategies. The fund’s over- and underweights in many market sectors compared with the index represented one of the biggest overall detractors from the fund’s relative performance for the reporting period.
For example, the fund held an overweight in Telecommunications Service stocks that reduced the fund’s relative performance, as holdings in this sector returned approximately 3% and underperformed the index. Among Industrials stocks, the fund maintained an underweight that detracted from its relative performance as this sector generated overall returns that outperformed the index. However, the fund’s underweight in Consumer Staples stocks worked out more favorably, enhancing relative performance as stocks in this sector generally underperformed the index.
Stock selection within the various market sectors worked out more favorably for the fund overall, particularly within the Health Care sector. One strategic decision that detracted from the fund’s performance within this sector, however, was to underweight holdings of Gilead Sciences, Inc., a research-based biopharmaceutical company. The company represented a relatively large position in the index, where these holdings returned approximately 111% as the company reported solid financial results and benefitted from its strong product line-up. As a result, the fund’s relative underexposure to this company significantly detracted from relative performance.
By comparison, the fund’s overweight position in shares of Celgene Corporation, a global biopharmaceutical company, worked out more favorably. The company showed strong clinical results for its flagship product, which treats multiple types of cancer. As a result, the fund’s holdings of this company returned approximately 103%, and enhanced relative performance.
Stock selection within the Information Technology sector also enhanced the fund’s overall performance compared with the index. One strategic decision that detracted from the fund’s performance within this sector, however, was an underweight to holdings of Facebook Inc., which operates a social networking Internet site. The company reported mobile advertising revenues that generally exceeded expectations, helping holdings of Facebook Inc. return approximately 138% for the index during the period. As a result, the fund’s comparatively limited exposure detracted from performance compared with the index.
As of 10/31/13:
Statistics
Number of Holdings | 113 | |||
Weighted Average Market Cap ($ x 1,000,000) | $85,099 | |||
Price/Earnings Ratio (P/E) | 20.0 | |||
Price/Book Ratio (P/B) | 3.6 | |||
Portfolio Turnover Rate | 87% |
Sector Weightings % of Investments
Information Technology | 26.3% | |||
Consumer Discretionary | 21.8% | |||
Health Care | 14.9% | |||
Consumer Staples | 11.4% | |||
Industrials | 9.4% | |||
Financials | 4.8% | |||
Materials | 4.7% | |||
Energy | 4.2% | |||
Telecommunication Services | 1.6% | |||
Utilities | 0.4% | |||
Other | 0.5% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 3.8% | |||
PepsiCo, Inc. | 2.9% | |||
Oracle Corp. | 2.7% | |||
Microsoft Corp. | 2.6% | |||
Google, Inc., Class A | 2.5% | |||
Amgen, Inc. | 2.1% | |||
Celgene Corp. | 2.1% | |||
EOG Resources, Inc. | 2.0% | |||
The TJX Cos., Inc. | 2.0% | |||
Nike, Inc., Class B | 2.0% | |||
Total | 24.7% |
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 Active Equity Funds
Table of Contents
Schwab Large-Cap Growth Fundtm
Performance and Fund Facts as of 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctslgf.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) | 26.76 | % | 14.49 | % | 6.22 | % | |||||||||
Russell 1000 Growth Index | 28.30 | % | 17.51 | % | 7.89 | % | |||||||||
Fund Category: Morningstar Large Growth | 29.40 | % | 15.90 | % | 6.93 | % |
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.
For index definitions, please see the Glossary.
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 | On October 7, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 7, 2009 is that of the fund’s former Select Shares. | |
3 | 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. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 13
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 41.10% for the 12 months ended October 31, 2013, outperforming the Russell 2000 Index (the index), which the fund uses for performance comparisons. The index returned 36.28% for the reporting period.
Market Highlights. All sectors within the index generated positive returns for the reporting period, as equities benefitted from the low-rate environment and some signs of improving economic conditions. Within the index, the Industrials and Information Technology sectors performed particularly well, while the Utilities and Materials sectors generated positive returns but underperformed by comparison.
Positioning and Strategies. Effective stock selection across many market sectors, market-capitalization groups, and valuation measures helped the fund outperform the index.
For example, stock selections among price-to-book groups enhanced the fund’s overall performance relative to the index, with holdings performing particularly well among companies with low price-to-book ratios. For example, the fund owned shares of Rite Aid Corporation, which operates a retail drugstore chain. A favorable operating environment combined with some well-considered strategic shifts in the company’s operations helped holdings of this stock return approximately 301% for the fund. As a result, the fund’s overweight position in this company compared with the index enhanced relative performance.
Another example of a positive contributor within price-to-book groups was Zale Corporation, which operates retail jewelry stores. The company generated favorable operating results during the reporting period, helping the fund’s holdings return approximately 150%. As a result, the fund’s overweight position relative to the index enhanced performance. By comparison, the fund’s position in Delek US Holdings, Inc., a diversified energy company focused on petroleum refining and supply, reduced the fund’s relative performance. The fund’s holdings of Delek US Holdings, Inc. returned approximately -26%, and when combined with the fund’s relative overweight compared with the index, detracted from relative performance.
Not all stock selections within the fund’s price-to-earnings strategy worked out as favorably. The fund held overweight positions in Coeur Mining, Inc., a precious metals mining company, and in Rovi Corporation, a communications equipment company that was not in the index. Holdings of Coeur Mining, Inc. returned approximately -61% for the fund, while holdings of Rovi Corporation returned approximately 24%, underperforming the overall return of the Information Technology sector within the index. Both of these stock selections detracted from the fund’s relative performance.
Among various market sectors, overall stock selection contributed to the fund’s outperformance of the index. Selection among the Financials, Industrials, and Consumer Discretionary sectors was particularly strong. For example, the fund’s holdings of Investment Technology Group, Inc., an institutional brokerage company, returned approximately 90%, and when combined with the fund’s overweight in this stock, enhanced the fund’s performance versus the index.
As of 10/31/13:
Statistics
Number of Holdings | 343 | |||
Weighted Average Market Cap ($ x 1,000,000) | $1,725 | |||
Price/Earnings Ratio (P/E) | 34.5 | |||
Price/Book Ratio (P/B) | 1.9 | |||
Portfolio Turnover Rate | 84% |
Sector Weightings % of Investments
Information Technology | 20.6% | |||
Financials | 19.1% | |||
Health Care | 15.4% | |||
Industrials | 14.5% | |||
Consumer Discretionary | 10.9% | |||
Materials | 5.9% | |||
Energy | 5.9% | |||
Consumer Staples | 4.4% | |||
Utilities | 1.5% | |||
Telecommunication Services | 0.7% | |||
Other | 1.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
EnerSys, Inc. | 1.0% | |||
RLJ Lodging Trust | 0.9% | |||
PTC, Inc. | 0.9% | |||
Minerals Technologies, Inc. | 0.9% | |||
International Rectifier Corp. | 0.9% | |||
Worthington Technologies Corp. | 0.9% | |||
Esterline Technologies Corp. | 0.9% | |||
j2 Global, Inc. | 0.9% | |||
Black Hills Corp. | 0.8% | |||
STERIS Corp. | 0.8% | |||
Total | 8.9% |
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. |
14 Schwab Active Equity Funds
Table of Contents
Schwab Small-Cap Equity Fundtm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctssef.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Small-Cap Equity Fundtm (7/1/03) | 41.10 | % | 18.86 | % | 10.20 | % | |||||||||
Russell 2000® Index | 36.28 | % | 17.04 | % | 9.03 | % | |||||||||
Fund Category: Morningstar Small Blend | 35.17 | % | 17.34 | % | 9.02 | % |
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.
For index definitions, please see the Glossary.
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 | On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 28, 2009 is that of the fund’s former Select Shares. | |
3 | 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. | |
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 15
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 establishes long and short positions in equity securities issued by U.S. companies. When the fund takes a long position, it purchases a stock outright. However, when the fund takes a short position, it sells a stock that it has borrowed, and at the scheduled time of replacement, has to buy the stock at the current market price to close out the transaction. If the price of the stock rises after the short sale, the fund loses money, and vice versa. 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 13.81% for the 12 months ended October 31, 2013, underperforming the S&P 500 Index (the index), which returned 27.18% for the reporting period. Although the fund uses the index for general performance comparisons, the fund’s investment objective and use of short sale transactions generally mean that its total return is expected to be lower than the total return of the index when stocks rally, but potentially higher than the total return of the index when the stock market loses ground.
Market Highlights. All sectors within the index generated positive returns for the reporting period, as equities benefitted from low interest rates that made financing more affordable for businesses and households. Some signs of improving economic conditions also generally supported these results. The Consumer Discretionary and Industrials sectors performed particularly well, while the Utilities and Telecommunications sectors generated positive returns but underperformed by comparison.
Positioning and Strategies. Throughout the 12-month reporting period, the fund held short positions of approximately 42% of net assets on average. Given the substantial rally by stocks, these short positions significantly detracted from the fund’s return compared with the index, and provided the most significant 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 Consumer Discretionary and Financials sectors. For example, the fund’s long positions in the Consumer Discretionary sector returned approximately 31%, significantly underperforming the approximately 40% corresponding return of the index. In addition, although the fund’s long positions in the Financials sector solidly outperformed those in the index, the fund’s short positions within this sector reduced this relative outperformance.
Not all sector strategies generated negative results, with the fund’s selections within the Materials sector providing one example. Overall selections in this sector compared with the index benefited relative performance as the fund’s long positions returned approximately 32%, outperforming those of the index.
From a valuation standpoint, the fund’s strategies among lower price-to-earnings groups generally helped the fund’s performance. For example, the fund’s relative overweight in the Kroger Co., which operates supermarkets and convenience stores in the U.S., helped the fund’s performance compared with the index. The company reported generally good earnings throughout the year, helping the fund’s holdings return approximately 73% for the reporting period and solidly outperform the overall return generated by the Consumer Staples sector.
Another stock selection that helped the fund’s performance relative to the index was Delta Air Lines, Inc., an air transportation company. The fund held an overweight in this company compared with the index, and these holdings returned approximately 104% for the reporting period as Delta Air Lines, Inc. reported very good earnings.
As of 10/31/13:
Statistics
Number of Holdings | ||||
Long Holdings | 137 | |||
Short Holdings | 95 | |||
Weighted Average Market Cap ($ x 1,000,000) | ||||
Long Holdings | $61,212 | |||
Short Holdings | $6,480 | |||
Price/Earnings Ratio (P/E) | ||||
Long Holdings | 19.8 | |||
Short Holdings | 46.1 | |||
Price/Book Ratio (P/B) | ||||
Long Holdings | 2.2 | |||
Short Holdings | 3.6 | |||
Portfolio Turnover Rate | 130% | |||
Portfolio Turnover Rate excluding short sales | 71% |
Top Equity Long Holdings
% of Net Assets1
Apple, Inc. | 2.6% | |||
Wells Fargo & Co. | 2.6% | |||
Pfizer, Inc. | 2.5% | |||
FedEx Corp. | 2.1% | |||
ConocoPhillips | 2.1% | |||
Total | 11.9% |
Top Equity Short Holdings
% of Net Assets1
Signature Bank | 1.6% | |||
TransDigm Group, Inc. | 1.4% | |||
The Hain Celestial Group, Inc. | 1.2% | |||
PartnerRe Ltd. | 1.2% | |||
RLI Corp. | 1.1% | |||
Total | 6.5% |
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 Hedged Equity Fundtm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctshef.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) | 13.81 | % | 8.23 | % | 5.80 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Fund Category: Morningstar Long/Short Equity | 12.66 | % | 7.15 | % | 5.45 | % |
Fund Expense Ratios4: Net 2.08%; Gross 2.13%
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The Schwab 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 | On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 28, 2009 is that of the fund’s former Select Shares. | |
3 | 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. | |
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 17
Table of Contents
Schwab Financial Services Fund™
The Schwab Financial Services Fund (the fund) seeks long-term capital growth. To pursue its investment objective, 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 30.20% for the 12 months ended October 31, 2013, underperforming the S&P 1500 SuperComposite Financials Sector Index (the index), which the fund uses for performance comparisons. The index returned 31.28% for the reporting period.
Market Highlights. Stocks in U.S. and developed international markets generated solid returns for the reporting period, supported by efforts by the Federal Reserve and many other central banks to keep interest rates low to stimulate economic growth. This made financing more affordable for businesses and households alike, and generally made financial products at banks and companies offering diversified financial services more appealing to investors and savers. Insurance providers and companies involved in asset management also produced particularly noteworthy returns.
Positioning and Strategies. The fund’s over- and underweights among market-capitalization groups represented a primary detractor from performance compared with the index, although stock selection within this strategy generally helped overall. For example, the fund’s stock selections among companies with market capitalizations of $10 billion to $50 billion detracted overall from relative performance, while stocks in this group generated solid returns but underperformed many other market-capitalization groups.
Within the fund’s broader market-capitalization strategy, one significant detractor was an overweight position in Weyerhaeuser Company, a real estate investment trust. During the reporting period, the relatively modest pace of housing starts, particularly for single-family units, limited the performance of this company’s stock. As a result, the fund’s holdings of Weyerhaeuser Company returned approximately -10%, and when combined with the fund’s overweight in this company compared with the index, detracted from relative performance.
By comparison, over- and underweights compared with the index among price-to-earnings groups generally enhanced the fund’s performance. Allocations among the highest and lowest price-to-earnings groups in particular generally supported this result, although stock selection within these groups generally detracted from the fund’s relative return.
Within the fund’s strategy concerning price-to-earnings groups, holdings of WSFS Financial Corporation, a financial services company, enhanced the fund’s performance compared with the index. The index did not include holdings of WSFS Financial Corporation, which returned approximately 67% for the fund, as the company reported generally solid earnings and improved its market share, thanks in part to an evolving balance of products. As a result, the fund’s overweight position in this company enhanced relative performance, as the overall Thrifts & Mortgage Financing sub-industry within the index returned approximately 22%, well below the returns of the fund’s WSFS Financial Corporation holdings.
As of 10/31/13:
Statistics
Number of Holdings | 66 | |||
Weighted Average Market Cap ($ x 1,000,000) | $73,801 | |||
Price/Earnings Ratio (P/E) | 15.7 | |||
Price/Book Ratio (P/B) | 1.3 | |||
Portfolio Turnover Rate | 74% |
Industry Weightings % of Investments
Diversified Financials | 45.5% | |||
Banks | 21.9% | |||
Real Estate | 16.1% | |||
Insurance | 15.9% | |||
Other | 0.6% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Wells Fargo & Co. | 8.7% | |||
JPMorgan Chase & Co. | 7.8% | |||
Berkshire Hathaway, Inc., Class B | 5.1% | |||
Citigroup, Inc. | 4.6% | |||
American Express Co. | 4.2% | |||
Bank of America Corp. | 4.1% | |||
American International Group, Inc. | 3.1% | |||
The Bank of New York Mellon Corp. | 3.0% | |||
The PNC Financial Services Group, Inc. | 3.0% | |||
The Travelers Cos., Inc. | 2.6% | |||
Total | 46.2% |
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 Financial Services Fundtm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsfsf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Financial Services Fundtm (7/3/00) | 30.20 | % | 9.72 | % | 3.78 | % | |||||||||
S&P 1500 SuperComposite Financials Sector Index | 31.28 | % | 8.36 | % | 0.34 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Fund Category: Morningstar Financial | 31.06 | % | 11.25 | % | 3.24 | % |
Fund Expense Ratios3: Net 0.94%; Gross 1.10%
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.
For index definitions, please see the Glossary.
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 19
Table of Contents
Schwab Health Care Fund™
The Schwab Health Care Fund (the fund) seeks long-term capital growth. To pursue its investment objective, 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 35.46% for the 12 months ended October 31, 2013, outperforming the Dow Jones Global Health Care Index (the index), which the fund uses for performance comparisons. The index returned 30.80% for the reporting period.
Market Highlights. Health Care stocks in the U.S. generally outperformed similar securities across much of the globe, and were some of the better overall performers within the broader U.S. stock market. Within the broad Health Care sector, Biotechnology, Pharmaceuticals, and Health Care Equipment stocks—collectively representing more than 80% of the index—each generated overall returns that ranged from approximately 25% to 63%.
Positioning and Strategies. Multiple strategies helped the fund outperform the index, but effective stock selection within the U.S. was one of the most significant overall contributors. By comparison, stock selection among overseas markets generally detracted from the fund’s relative return.
Stock selection in the U.S., which represented an average weight of approximately 78% of the fund, worked out well for the fund, and selection strategies among market-capitalization groups with $50 billion or less were some of the better performers within this strategy. For example, the fund held an overweight position versus the index in Celgene Corporation, a global biopharmaceutical company based in the U.S. The company showed strong clinical results for its flagship product, which treats multiple types of cancer. As a result, the fund’s holdings of Celgene Corporation returned approximately 103%, and when combined with the fund’s overweight in the company compared with the index, enhanced relative performance.
Turning to the fund’s broad market-capitalization strategy, the fund owned stock in Boston Scientific Corporation, which develops, manufactures, and markets cardiovascular devices. Boston Scientific Corporation generated positive organic sales growth during the reporting period, although the company’s product line produced comparatively mixed results. As a result, the fund’s holdings of Boston Scientific Corporation returned approximately 127%, allowing the fund’s overweight to substantially enhance relative performance.
However, not all of the fund’s stock selections within its broad market-capitalization strategy were as successful. For example, the fund owned an overweight position compared with the index in Eli Lilly and Company, a large pharmaceutical company based in the U.S. with an established, globally distributed product line-up. Holdings of Eli Lilly returned approximately 2% for the fund, well below the roughly 39% overall return that the fund’s U.S. Health Care stocks generated. As a result, the fund’s Eli Lilly holdings reduced the fund’s performance compared with the index.
As of 10/31/13:
Statistics
Number of Holdings | 96 | |||
Weighted Average Market Cap ($ x 1,000,000) | $84,921 | |||
Price/Earnings Ratio (P/E) | 20.8 | |||
Price/Book Ratio (P/B) | 3.3 | |||
Portfolio Turnover Rate | 54% |
Industry Weightings % of Investments
Pharmaceuticals, Biotechnology & Life Sciences | 71.0% | |||
Healthcare – Services | 26.9% | |||
Materials | 0.8% | |||
Other | 1.3% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Pfizer, Inc. | 7.1% | |||
Johnson & Johnson | 7.0% | |||
Amgen, Inc. | 4.8% | |||
AbbVie, Inc. | 4.5% | |||
Roche Holding AG | 4.2% | |||
Celgene Corp. | 4.0% | |||
Merck & Co., Inc. | 4.0% | |||
Medtronic, Inc. | 3.9% | |||
Biogen Idec, Inc. | 3.4% | |||
Novartis AG – Reg’d | 3.3% | |||
Total | 46.2% |
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. |
20 Schwab Active Equity Funds
Table of Contents
Schwab Health Care Fundtm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctshcf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Health Care Fundtm (7/3/00) | 35.46 | % | 18.18 | % | 13.32 | % | |||||||||
Dow Jones Global Health Care Index | 30.80 | % | 15.96 | % | 9.55 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Fund Category: Morningstar Health | 40.32 | % | 19.01 | % | 10.83 | % |
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.
For index definitions, please see the Glossary.
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 21
Table of Contents
Schwab® International Core Equity Fund
The Schwab International Core Equity Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund 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 27.70% for the 12 months ended October 31, 2013, outperforming the MSCI EAFE Index (the index), which the fund uses for performance comparisons. The index returned 27.40% for the reporting period.
Market Highlights. International equities in developed markets performed well, continuing to rally from depressed levels during the height of the euro zone’s sovereign debt crisis. Policies by many central banks around the world aimed at keeping interest rates low to stimulate economic growth, pockets of economic improvement in some developed European economies, and relative stability in the euro zone generally supported the performance of overseas stocks.
Positioning and Strategies. Multiple strategies helped the fund outperform, but effective stock selection was one of the most noteworthy overall contributors. Stock selection in the U.K., France, and Australia was particularly strong, while stock selection in Japan was a primary detractor from the fund’s performance.
For example, the fund’s U.K. holdings returned approximately 27% for the reporting period in U.S. dollar terms, outperforming the approximately 21% return generated by U.K. holdings within the index. Within this country market, the fund’s holdings of Berendsen PLC, a textile service company, and Grainger PLC, a residential property company, performed particularly well as both companies experienced strong earnings and cash flow growth, enhancing the fund’s performance compared with the index.
Stock selection in Japan worked out less favorably, detracting from the fund’s relative performance. For example, the fund owned shares of Ajinomoto Co, Inc., which produces and sells a variety of food products. Holdings of this company returned approximately -9% in U.S. dollar terms, and when combined with the fund’s overweight in this stock, detracted from the fund’s return compared with the index.
Turning to valuation strategies, the fund’s stock selection among price-to-earnings groups was a significant contributor to the fund’s outperformance of the index. Stock selection among lower price-to-earnings groups was particularly strong, while selection among more middle price-to-earnings groups generally detracted from performance. One example of stock selection that enhanced relative performance within the fund’s overall price-to-earnings strategy was INPEX Corporation, a Japanese holding company involved in oil and natural gas exploration and production. The fund’s holdings of INPEX Corporation returned approximately -6% in U.S. dollar terms, while representing a smaller overall position than within the index, where this company’s stock generated even lower returns. As a result, this strategic positioning in INPEX Corporation enhanced the fund’s performance compared with the index.
As of 10/31/13:
Statistics
Number of Holdings | 208 | |||
Weighted Average Market Cap ($ x 1,000,000) | $53,925 | |||
Price/Earnings Ratio (P/E) | 18.7 | |||
Price/Book Ratio (P/B) | 1.3 | |||
Portfolio Turnover Rate | 75% |
Sector Weightings % of Investments
Financials | 22.6% | |||
Consumer Discretionary | 14.3% | |||
Industrials | 13.6% | |||
Health Care | 10.6% | |||
Energy | 9.3% | |||
Consumer Staples | 8.3% | |||
Materials | 6.9% | |||
Information Technology | 5.2% | |||
Telecommunication Services | 3.8% | |||
Utilities | 3.4% | |||
Other | 2.0% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
BP plc | 2.3% | |||
Sanofi | 2.0% | |||
Novartis AG – Reg’d | 1.8% | |||
BNP Paribas S.A. | 1.8% | |||
Roche Holding AG | 1.8% | |||
Siemens AG – Reg’d | 1.7% | |||
Panasonic Corp. | 1.7% | |||
Next plc | 1.6% | |||
Repsol S.A. | 1.5% | |||
Total S.A. | 1.5% | |||
Total | 17.7% |
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.
1 | This list is not a recommendation of any security by the investment adviser. |
22 Schwab Active Equity Funds
Table of Contents
Schwab® International Core Equity Fund
Performance and Fund Facts as of 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsicef.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab® International Core Equity Fund (5/30/08) | 27.70 | % | 13.60 | % | 1.89 | % | |||||||||
MSCI EAFE® Index (Gross) | 27.40 | % | 12.52 | % | 1.04 | % | |||||||||
Fund Category: Morningstar Foreign Large Blend | 23.08 | % | 11.74 | % | 0.02 | % |
Fund Expense Ratios4: Net 0.87%; Gross 1.17%
Country Weightings % of Investments
Japan | 20.2% | |||
United Kingdom | 20.0% | |||
France | 10.5% | |||
Germany | 9.1% | |||
Australia | 8.2% | |||
Switzerland | 7.2% | |||
Netherlands | 4.0% | |||
Sweden | 3.3% | |||
Spain | 2.8% | |||
Other Countries | 14.7% | |||
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.
For index definitions, please see the Glossary.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
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 | On October 7, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 7, 2009 is that of the fund’s former Institutional Shares. On December 3, 2009, the Laudus Rosenberg International Equity Fund merged into the fund. | |
3 | 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. | |
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 23
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2013 and held through October 31, 2013.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/13 | at 10/31/13 | 5/1/13–10/31/13 | |||||||||||||
Schwab Core Equity Fundtm | ||||||||||||||||
Actual Return | 0.72% | $ | 1,000.00 | $ | 1,108.70 | $ | 3.83 | |||||||||
Hypothetical 5% Return | 0.72% | $ | 1,000.00 | $ | 1,021.58 | $ | 3.67 | |||||||||
Schwab Dividend Equity Fundtm | ||||||||||||||||
Actual Return | 0.89% | $ | 1,000.00 | $ | 1,107.20 | $ | 4.73 | |||||||||
Hypothetical 5% Return | 0.89% | $ | 1,000.00 | $ | 1,020.72 | $ | 4.53 | |||||||||
Schwab Large-Cap Growth Fundtm | ||||||||||||||||
Actual Return | 0.99% | $ | 1,000.00 | $ | 1,118.60 | $ | 5.29 | |||||||||
Hypothetical 5% Return | 0.99% | $ | 1,000.00 | $ | 1,020.21 | $ | 5.04 | |||||||||
Schwab Small-Cap Equity Fundtm | ||||||||||||||||
Actual Return | 1.10% | $ | 1,000.00 | $ | 1,183.20 | $ | 6.05 | |||||||||
Hypothetical 5% Return | 1.10% | $ | 1,000.00 | $ | 1,019.66 | $ | 5.60 | |||||||||
Schwab Hedged Equity Fundtm | ||||||||||||||||
Actual Return | 2.16% | $ | 1,000.00 | $ | 1,050.20 | $ | 11.16 | |||||||||
Hypothetical 5% Return | 2.16% | $ | 1,000.00 | $ | 1,014.32 | $ | 10.97 | |||||||||
Schwab Financial Services Fundtm | ||||||||||||||||
Actual Return | 0.94% | $ | 1,000.00 | $ | 1,099.00 | $ | 4.97 | |||||||||
Hypothetical 5% Return | 0.94% | $ | 1,000.00 | $ | 1,020.47 | $ | 4.79 | |||||||||
Schwab Health Care Fundtm | ||||||||||||||||
Actual Return | 0.82% | $ | 1,000.00 | $ | 1,120.40 | $ | 4.38 | |||||||||
Hypothetical 5% Return | 0.82% | $ | 1,000.00 | $ | 1,021.07 | $ | 4.18 | |||||||||
Schwab® International Core Equity Fund | ||||||||||||||||
Actual Return | 0.86% | $ | 1,000.00 | $ | 1,092.30 | $ | 4.54 | |||||||||
Hypothetical 5% Return | 0.86% | $ | 1,000.00 | $ | 1,020.87 | $ | 4.38 |
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 365 days of the fiscal year. |
24 Schwab Active Equity Funds
Table of Contents
Schwab Core Equity Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 18.80 | 16.81 | 15.78 | 14.26 | 13.43 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.32 | 0.26 | 0.19 | 0.17 | 0.17 | |||||||||||||||||
Net realized and unrealized gains (losses) | 4.51 | 2.07 | 1.01 | 1.50 | 0.88 | |||||||||||||||||
Total from investment operations | 4.83 | 2.33 | 1.20 | 1.67 | 1.05 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.17 | ) | (0.34 | ) | (0.17 | ) | (0.15 | ) | (0.22 | ) | ||||||||||||
Net asset value at end of period | 23.46 | 18.80 | 16.81 | 15.78 | 14.26 | |||||||||||||||||
Total return (%) | 25.89 | 13.99 | 7.60 | 11.77 | 8.11 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.72 | 0.72 | 0.73 | 0.73 | 0.75 | |||||||||||||||||
Gross operating expenses | 0.73 | 0.73 | 0.73 | 0.74 | 0.78 | |||||||||||||||||
Net investment income (loss) | 1.51 | 1.37 | 1.06 | 1.05 | 1.39 | |||||||||||||||||
Portfolio turnover rate | 80 | 45 | 1 | 35 | 49 | 41 | 2 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,247 | 1,880 | 1,719 | 1,792 | 1,770 |
1 Portfolio turnover excludes the impact of investment activity from a merger with another fund. See financial note 12 for additional information.
2 Portfolio turnover excludes the impact of investment activity from a merger with another fund.
See financial notes 25
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .7% | Common Stock | 1,779,675,648 | 2,240,003,911 | ||||||||
0 | .3% | Other Investment Company | 6,221,788 | 6,221,788 | ||||||||
0 | .0% | Short-Term Investment | 349,998 | 349,998 | ||||||||
100 | .0% | Total Investments | 1,786,247,434 | 2,246,575,697 | ||||||||
0 | .7% | Collateral Invested for Securities on Loan | 14,746,820 | 14,746,820 | ||||||||
(0 | .7%) | Other Assets and Liabilities, Net | (14,199,217 | ) | ||||||||
100 | .0% | Total Net Assets | 2,247,123,300 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.7% of net assets | ||||||||
Automobiles & Components 0.4% | ||||||||
Ford Motor Co. | 528,000 | 9,034,080 | ||||||
Banks 3.2% | ||||||||
Wells Fargo & Co. | 1,700,200 | 72,581,538 | ||||||
Capital Goods 6.0% | ||||||||
3M Co. | 34,700 | 4,366,995 | ||||||
Danaher Corp. | 447,000 | 32,224,230 | ||||||
Eaton Corp. plc | 51,300 | 3,619,728 | ||||||
General Dynamics Corp. | 124,300 | 10,768,109 | ||||||
General Electric Co. | 396,100 | 10,354,054 | ||||||
Honeywell International, Inc. | 137,500 | 11,925,375 | ||||||
IDEX Corp. | 23,700 | 1,638,855 | ||||||
Northrop Grumman Corp. | 229,000 | 24,619,790 | ||||||
Regal-Beloit Corp. | 37,000 | 2,713,210 | ||||||
Textron, Inc. | 460,000 | 13,243,400 | ||||||
The Boeing Co. | 82,400 | 10,753,200 | ||||||
United Rentals, Inc. * | 119,600 | 7,724,964 | ||||||
133,951,910 | ||||||||
Commercial & Professional Supplies 2.1% | ||||||||
Nielsen Holdings N.V. | 224,000 | 8,834,560 | ||||||
The ADT Corp. (b) | 368,500 | 15,981,845 | ||||||
Towers Watson & Co., Class A | 51,600 | 5,924,196 | ||||||
Waste Management, Inc. | 402,300 | 17,516,142 | ||||||
48,256,743 | ||||||||
Consumer Durables & Apparel 3.0% | ||||||||
Hanesbrands, Inc. | 65,000 | 4,427,800 | ||||||
Jarden Corp. * | 332,250 | 18,393,360 | ||||||
Mohawk Industries, Inc. * | 52,000 | 6,885,840 | ||||||
NIKE, Inc., Class B | 508,000 | 38,486,080 | ||||||
68,193,080 | ||||||||
Consumer Services 3.1% | ||||||||
International Game Technology | 1,262,900 | 23,742,520 | ||||||
MGM Resorts International * | 1,146,400 | 21,827,456 | ||||||
Service Corp. International | 603,300 | 10,865,433 | ||||||
Wyndham Worldwide Corp. | 204,000 | 13,545,600 | ||||||
69,981,009 | ||||||||
Diversified Financials 7.8% | ||||||||
Bank of America Corp. | 1,574,000 | 21,973,040 | ||||||
Berkshire Hathaway, Inc., Class B * | 112,100 | 12,900,468 | ||||||
Citigroup, Inc. | 315,000 | 15,365,700 | ||||||
JPMorgan Chase & Co. | 1,181,240 | 60,881,109 | ||||||
Morgan Stanley | 140,000 | 4,022,200 | ||||||
State Street Corp. | 471,000 | 33,002,970 | ||||||
The Bank of New York Mellon Corp. | 825,000 | 26,235,000 | ||||||
174,380,487 | ||||||||
Energy 10.7% | ||||||||
Anadarko Petroleum Corp. | 177,200 | 16,885,388 | ||||||
Baker Hughes, Inc. | 219,100 | 12,727,519 | ||||||
Chevron Corp. | 515,100 | 61,791,396 | ||||||
ConocoPhillips | 674,100 | 49,411,530 | ||||||
EOG Resources, Inc. | 95,600 | 17,055,040 | ||||||
Exxon Mobil Corp. | 145,500 | 13,039,710 | ||||||
Hess Corp. | 125,600 | 10,198,720 | ||||||
Marathon Petroleum Corp. | 190,700 | 13,665,562 | ||||||
Murphy Oil Corp. | 270,565 | 16,320,481 | ||||||
Occidental Petroleum Corp. | 264,990 | 25,460,239 | ||||||
Phillips 66 | 42,900 | 2,764,047 | ||||||
239,319,632 | ||||||||
Food & Staples Retailing 1.8% | ||||||||
Costco Wholesale Corp. | 116,400 | 13,735,200 | ||||||
The Kroger Co. | 226,400 | 9,698,976 | ||||||
Walgreen Co. | 279,700 | 16,569,428 | ||||||
40,003,604 | ||||||||
Food, Beverage & Tobacco 4.7% | ||||||||
Altria Group, Inc. | 142,600 | 5,308,998 | ||||||
Archer-Daniels-Midland Co. | 864,500 | 35,358,050 | ||||||
Hillshire Brands Co. | 495,600 | 16,270,548 | ||||||
Molson Coors Brewing Co., Class B | 116,500 | 6,291,000 | ||||||
PepsiCo, Inc. | 440,000 | 36,999,600 | ||||||
Tyson Foods, Inc., Class A | 185,000 | 5,118,950 | ||||||
105,347,146 |
26 See financial notes
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Health Care Equipment & Services 5.7% | ||||||||
Abbott Laboratories | 450,700 | 16,473,085 | ||||||
Becton, Dickinson & Co. | 88,000 | 9,251,440 | ||||||
Boston Scientific Corp. * | 332,500 | 3,886,925 | ||||||
CareFusion Corp. * | 614,500 | 23,824,165 | ||||||
Cigna Corp. | 437,500 | 33,678,750 | ||||||
Covidien plc | 159,000 | 10,193,490 | ||||||
Medtronic, Inc. | 360,500 | 20,692,700 | ||||||
WellPoint, Inc. | 119,500 | 10,133,600 | ||||||
128,134,155 | ||||||||
Household & Personal Products 1.8% | ||||||||
Energizer Holdings, Inc. | 236,800 | 23,232,448 | ||||||
Kimberly-Clark Corp. | 161,600 | 17,452,800 | ||||||
40,685,248 | ||||||||
Insurance 2.4% | ||||||||
Aflac, Inc. | 208,500 | 13,548,330 | ||||||
American International Group, Inc. | 134,300 | 6,936,595 | ||||||
MetLife, Inc. | 150,000 | 7,096,500 | ||||||
Prudential Financial, Inc. | 40,000 | 3,255,600 | ||||||
Reinsurance Group of America, Inc. | 76,500 | 5,445,270 | ||||||
The Progressive Corp. | 263,200 | 6,835,304 | ||||||
The Travelers Cos., Inc. | 129,000 | 11,132,700 | ||||||
54,250,299 | ||||||||
Materials 4.0% | ||||||||
Avery Dennison Corp. | 266,300 | 12,548,056 | ||||||
International Paper Co. | 201,500 | 8,988,915 | ||||||
PPG Industries, Inc. | 193,000 | 35,237,940 | ||||||
Steel Dynamics, Inc. | 319,000 | 5,732,430 | ||||||
The Dow Chemical Co. | 684,700 | 27,025,109 | ||||||
89,532,450 | ||||||||
Media 2.1% | ||||||||
Comcast Corp., Class A | 455,000 | 21,648,900 | ||||||
Time Warner, Inc. | 186,300 | 12,806,262 | ||||||
Viacom Inc., Class B | 150,700 | 12,551,803 | ||||||
47,006,965 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.8% | ||||||||
AbbVie, Inc. | 220,000 | 10,659,000 | ||||||
Amgen, Inc. | 248,652 | 28,843,632 | ||||||
Celgene Corp. * | 235,500 | 34,969,395 | ||||||
Johnson & Johnson | 395,000 | 36,580,950 | ||||||
Merck & Co., Inc. | 230,980 | 10,414,888 | ||||||
Pfizer, Inc. | 2,125,400 | 65,207,272 | ||||||
Thermo Fisher Scientific, Inc. | 343,800 | 33,616,764 | ||||||
220,291,901 | ||||||||
Real Estate 0.4% | ||||||||
Prologis, Inc. | 250,000 | 9,987,500 | ||||||
Retailing 5.2% | ||||||||
Best Buy Co., Inc. | 252,000 | 10,785,600 | ||||||
Liberty Interactive Corp., Class A * | 1,160,200 | 31,278,992 | ||||||
Macy’s, Inc. | 553,700 | 25,531,107 | ||||||
Staples, Inc. | 393,600 | 6,344,832 | ||||||
The Gap, Inc. | 334,000 | 12,354,660 | ||||||
The Home Depot, Inc. | 146,000 | 11,371,940 | ||||||
The TJX Cos., Inc. | 301,000 | 18,297,790 | ||||||
115,964,921 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Cree, Inc. * | 22,500 | 1,366,875 | ||||||
Lam Research Corp. * | 36,200 | 1,963,126 | ||||||
3,330,001 | ||||||||
Software & Services 8.1% | ||||||||
Activision Blizzard, Inc. | 765,500 | 12,737,920 | ||||||
CA, Inc. | 945,000 | 30,013,200 | ||||||
Computer Sciences Corp. | 470,500 | 23,176,830 | ||||||
Google, Inc., Class A * | 14,500 | 14,943,410 | ||||||
International Business Machines Corp. | 18,100 | 3,243,701 | ||||||
Jack Henry & Associates, Inc. | 164,800 | 8,999,728 | ||||||
Microsoft Corp. | 756,800 | 26,752,880 | ||||||
Oracle Corp. | 1,126,300 | 37,731,050 | ||||||
Symantec Corp. | 135,000 | 3,069,900 | ||||||
Synopsys, Inc. * | 474,942 | 17,311,636 | ||||||
TIBCO Software, Inc. * | 124,300 | 3,052,808 | ||||||
181,033,063 | ||||||||
Technology Hardware & Equipment 9.0% | ||||||||
Apple, Inc. | 123,000 | 64,249,050 | ||||||
Cisco Systems, Inc. | 1,967,500 | 44,268,750 | ||||||
Hewlett-Packard Co. | 583,500 | 14,219,895 | ||||||
NetApp, Inc. | 112,000 | 4,346,720 | ||||||
SanDisk Corp. | 152,700 | 10,612,650 | ||||||
TE Connectivity Ltd. | 294,900 | 15,184,401 | ||||||
Western Digital Corp. | 253,500 | 17,651,205 | ||||||
Xerox Corp. | 3,251,300 | 32,317,922 | ||||||
202,850,593 | ||||||||
Telecommunication Services 3.1% | ||||||||
AT&T, Inc. | 1,087,600 | 39,371,120 | ||||||
Telephone & Data Systems, Inc. | 298,971 | 9,321,916 | ||||||
Verizon Communications, Inc. | 413,300 | 20,875,783 | ||||||
69,568,819 | ||||||||
Transportation 1.0% | ||||||||
FedEx Corp. | 179,400 | 23,501,400 | ||||||
Utilities 4.1% | ||||||||
Ameren Corp. | 562,000 | 20,333,160 | ||||||
American Electric Power Co., Inc. | 421,700 | 19,752,428 | ||||||
CenterPoint Energy, Inc. | 610,800 | 15,025,680 | ||||||
NextEra Energy, Inc. | 138,200 | 11,712,450 | ||||||
PG&E Corp. | 311,000 | 13,015,350 |
See financial notes 27
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The AES Corp. | 921,100 | 12,978,299 | ||||||
92,817,367 | ||||||||
Total Common Stock | ||||||||
(Cost $1,779,675,648) | 2,240,003,911 | |||||||
Other Investment Company 0.3% of net assets | ||||||||
Money Market Fund 0.3% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (d) | 6,221,788 | 6,221,788 | ||||||
Total Other Investment Company | ||||||||
(Cost $6,221,788) | 6,221,788 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.0% of net assets | ||||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/19/13 (a)(c) | 350,000 | 349,998 | ||||||
Total Short-Term Investment | ||||||||
(Cost $349,998) | 349,998 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.7% of net assets | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (d) | 14,746,820 | 14,746,820 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $14,746,820) | 14,746,820 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, the tax basis cost of the fund’s investments was $1,788,358,191 and the unrealized appreciation and depreciation were $462,825,364 and ($4,607,858), respectively, with a net unrealized appreciation of $458,217,506.
* | 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. Securities on loan were valued at $14,535,672. | |
(c) | The rate shown is the purchase yield. | |
(d) | The rate shown is the 7-day yield. |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 45 | 3,939,750 | 163,376 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $2,240,003,911 | $— | $— | $2,240,003,911 | ||||||||||||
Other Investment Company1 | 6,221,788 | — | — | 6,221,788 | ||||||||||||
Short-Term Investment1 | — | 349,998 | — | 349,998 | ||||||||||||
Total | $2,246,225,699 | $349,998 | $— | $2,246,575,697 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $14,746,820 | $— | $— | $14,746,820 | ||||||||||||
Futures Contract2 | 163,376 | — | — | 163,376 |
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, 2013.
28 See financial notes
Table of Contents
Schwab Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $1,786,247,434) including securities on loan of $14,535,672 | $2,246,575,697 | |||||
Collateral invested for securities on loan | 14,746,820 | |||||
Receivables: | ||||||
Dividends | 1,803,559 | |||||
Fund shares sold | 530,696 | |||||
Income from securities on loan | 1,031 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 47,387 | ||||
Total assets | 2,263,705,192 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 14,746,820 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 88,151 | |||||
Shareholder service fees | 53,960 | |||||
Fund shares redeemed | 1,610,814 | |||||
Variation margin on futures contracts | 21,600 | |||||
Accrued expenses | + | 60,547 | ||||
Total liabilities | 16,581,892 | |||||
Net Assets | ||||||
Total assets | 2,263,705,192 | |||||
Total liabilities | − | 16,581,892 | ||||
Net assets | $2,247,123,300 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,647,066,119 | |||||
Net investment income not yet distributed | 18,530,775 | |||||
Net realized capital gains | 121,034,767 | |||||
Net unrealized capital appreciation | 460,491,639 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$2,247,123,300 | 95,775,504 | $23.46 |
See financial notes 29
Table of Contents
Schwab Core Equity Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $17,472) | $45,783,381 | |||||
Interest | 2,267 | |||||
Securities on loan | + | 244,678 | ||||
Total investment income | 46,030,326 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 9,683,636 | |||||
Shareholder service fees | 4,807,654 | |||||
Shareholder reports | 119,876 | |||||
Transfer agent fees | 81,965 | |||||
Portfolio accounting fees | 76,408 | |||||
Custodian fees | 48,593 | |||||
Professional fees | 42,868 | |||||
Registration fees | 37,296 | |||||
Independent trustees’ fees | 20,964 | |||||
Interest expense | 93 | |||||
Other expenses | + | 44,763 | ||||
Total expenses | 14,964,116 | |||||
Expense reduction by CSIM and its affiliates | − | 91,853 | ||||
Custody credits | − | 10 | ||||
Net expenses | − | 14,872,253 | ||||
Net investment income | 31,158,073 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 231,388,304 | |||||
Net realized gains on futures contracts | + | 1,239,109 | ||||
Net realized gains | 232,627,413 | |||||
Net change in unrealized appreciation on investments | 209,030,731 | |||||
Net change in unrealized appreciation on futures contracts | + | 590,291 | ||||
Net change in unrealized appreciation | + | 209,621,022 | ||||
Net realized and unrealized gains | 442,248,435 | |||||
Increase in net assets resulting from operations | $473,406,508 |
30 See financial notes
Table of Contents
Schwab Core Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $31,158,073 | $23,675,409 | ||||||||
Net realized gains | 232,627,413 | 141,751,928 | ||||||||
Net change in unrealized appreciation | + | 209,621,022 | 52,306,627 | |||||||
Increase in net assets from operations | 473,406,508 | 217,733,964 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($16,475,044 | ) | ($32,156,180 | ) |
Transactions in Fund Shares1
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 9,345,311 | $194,423,482 | 6,062,795 | $109,887,310 | ||||||||||||||
Issued in connection with merger | — | — | 11,283,566 | 216,114,348 | ||||||||||||||
Shares reinvested | 445,622 | 8,359,860 | 836,086 | 14,755,613 | ||||||||||||||
Shares redeemed | + | (13,994,307 | ) | (292,667,176 | ) | (20,453,309 | ) | (365,280,788 | ) | |||||||||
Net transactions in fund shares | (4,203,374 | ) | ($89,883,834 | ) | (2,270,862 | ) | ($24,523,517 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 99,978,878 | $1,880,075,670 | 102,249,740 | $1,719,021,403 | ||||||||||||||
Total increase or decrease | + | (4,203,374 | ) | 367,047,630 | (2,270,862 | ) | 161,054,267 | |||||||||||
End of period | 95,775,504 | $2,247,123,300 | 99,978,878 | $1,880,075,670 | ||||||||||||||
Net investment income not yet distributed | $18,530,775 | $3,792,266 |
1 | Effective September 7, 2012, all of the assets and liabilities of the Schwab Premier Equity Fund were transferred to the Schwab Core Equity Fund. (See financial note 12) |
See financial notes 31
Table of Contents
Schwab Dividend Equity Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 14.52 | 13.15 | 12.08 | 10.94 | 10.63 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.32 | 0.27 | 0.23 | 0.21 | 0.25 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.70 | 1.38 | 1.06 | 1.14 | 0.31 | |||||||||||||||||
Total from investment operations | 4.02 | 1.65 | 1.29 | 1.35 | 0.56 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.32 | ) | (0.28 | ) | (0.22 | ) | (0.21 | ) | (0.25 | ) | ||||||||||||
Net asset value at end of period | 18.22 | 14.52 | 13.15 | 12.08 | 10.94 | |||||||||||||||||
Total return (%) | 27.99 | 12.65 | 10.73 | 12.42 | 5.62 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.89 | 0.89 | 0.89 | 0.89 | 0.90 | 2 | ||||||||||||||||
Gross operating expenses | 0.89 | 0.89 | 0.89 | 0.89 | 0.91 | |||||||||||||||||
Net investment income (loss) | 1.97 | 1.89 | 1.77 | 1.74 | 2.40 | |||||||||||||||||
Portfolio turnover rate | 64 | 55 | 31 | 37 | 39 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,804 | 1,390 | 1,325 | 1,322 | 1,297 |
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 ratio.
32 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .0% | Common Stock | 1,398,381,459 | 1,785,118,858 | ||||||||
1 | .4% | Short-Term Investments | 25,904,746 | 25,904,746 | ||||||||
100 | .4% | Total Investments | 1,424,286,205 | 1,811,023,604 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (7,382,621 | ) | ||||||||
100 | .0% | Total Net Assets | 1,803,640,983 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.0% of net assets | ||||||||
Automobiles & Components 1.0% | ||||||||
Ford Motor Co. | 1,109,300 | 18,980,123 | ||||||
Banks 5.3% | ||||||||
Huntington Bancshares, Inc. | 430,000 | 3,784,000 | ||||||
Regions Financial Corp. | 376,400 | 3,624,732 | ||||||
The PNC Financial Services Group, Inc. | 380,000 | 27,941,400 | ||||||
Wells Fargo & Co. | 1,418,400 | 60,551,496 | ||||||
95,901,628 | ||||||||
Capital Goods 6.1% | ||||||||
3M Co. | 128,000 | 16,108,800 | ||||||
Eaton Corp. plc | 232,200 | 16,384,032 | ||||||
Fluor Corp. | 17,900 | 1,328,538 | ||||||
GATX Corp. | 21,200 | 1,092,860 | ||||||
General Electric Co. | 994,000 | 25,983,160 | ||||||
ITT Corp. | 99,500 | 3,953,135 | ||||||
Northrop Grumman Corp. | 217,200 | 23,351,172 | ||||||
The Boeing Co. | 14,000 | 1,827,000 | ||||||
United Technologies Corp. | 192,200 | 20,421,250 | ||||||
110,449,947 | ||||||||
Commercial & Professional Supplies 1.6% | ||||||||
R.R. Donnelley & Sons Co. | 804,000 | 14,930,280 | ||||||
Waste Management, Inc. | 342,700 | 14,921,158 | ||||||
29,851,438 | ||||||||
Consumer Durables & Apparel 2.1% | ||||||||
Hasbro, Inc. | 251,500 | 12,989,975 | ||||||
NIKE, Inc., Class B | 95,400 | 7,227,504 | ||||||
Whirlpool Corp. | 116,400 | 16,995,564 | ||||||
37,213,043 | ||||||||
Consumer Services 1.3% | ||||||||
H&R Block, Inc. | 224,800 | 6,393,312 | ||||||
International Game Technology | 415,000 | 7,802,000 | ||||||
Service Corp. International | 65,200 | 1,174,252 | ||||||
Wyndham Worldwide Corp. | 120,000 | 7,968,000 | ||||||
23,337,564 | ||||||||
Diversified Financials 12.2% | ||||||||
Bank of America Corp. | 865,000 | 12,075,400 | ||||||
Berkshire Hathaway, Inc., Class B * | 55,800 | 6,421,464 | ||||||
Citigroup, Inc. | 406,700 | 19,838,826 | ||||||
JPMorgan Chase & Co. | 1,102,684 | 56,832,333 | ||||||
Morgan Stanley | 978,300 | 28,106,559 | ||||||
SLM Corp. | 883,400 | 22,411,858 | ||||||
State Street Corp. | 406,500 | 28,483,455 | ||||||
The Bank of New York Mellon Corp. | 894,000 | 28,429,200 | ||||||
The Goldman Sachs Group, Inc. | 106,800 | 17,179,848 | ||||||
219,778,943 | ||||||||
Energy 13.8% | ||||||||
Anadarko Petroleum Corp. | 130,000 | 12,387,700 | ||||||
Chevron Corp. | 452,500 | 54,281,900 | ||||||
ConocoPhillips | 642,000 | 47,058,600 | ||||||
Devon Energy Corp. | 115,400 | 7,295,588 | ||||||
EOG Resources, Inc. | 26,500 | 4,727,600 | ||||||
Exxon Mobil Corp. | 512,800 | 45,957,136 | ||||||
Hess Corp. | 164,000 | 13,316,800 | ||||||
Marathon Petroleum Corp. | 156,500 | 11,214,790 | ||||||
Murphy Oil Corp. | 175,000 | 10,556,000 | ||||||
Nabors Industries Ltd. | 510,000 | 8,914,800 | ||||||
Occidental Petroleum Corp. | 316,800 | 30,438,144 | ||||||
Phillips 66 | 32,500 | 2,093,975 | ||||||
248,243,033 | ||||||||
Food & Staples Retailing 1.4% | ||||||||
The Kroger Co. | 115,000 | 4,926,600 | ||||||
Walgreen Co. | 350,000 | 20,734,000 | ||||||
25,660,600 | ||||||||
Food, Beverage & Tobacco 3.9% | ||||||||
Altria Group, Inc. | 147,600 | 5,495,148 | ||||||
Archer-Daniels-Midland Co. | 757,000 | 30,961,300 | ||||||
Hillshire Brands Co. | 88,300 | 2,898,889 | ||||||
Molson Coors Brewing Co., Class B | 187,500 | 10,125,000 | ||||||
PepsiCo, Inc. | 257,500 | 21,653,175 | ||||||
71,133,512 | ||||||||
Health Care Equipment & Services 2.6% | ||||||||
Abbott Laboratories | 165,300 | 6,041,715 | ||||||
Cigna Corp. | 106,000 | 8,159,880 | ||||||
Covidien plc | 33,000 | 2,115,630 |
See financial notes 33
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Medtronic, Inc. | 490,000 | 28,126,000 | ||||||
WellPoint, Inc. | 22,000 | 1,865,600 | ||||||
46,308,825 | ||||||||
Household & Personal Products 1.3% | ||||||||
Energizer Holdings, Inc. | 93,400 | 9,163,474 | ||||||
The Procter & Gamble Co. | 167,800 | 13,549,850 | ||||||
22,713,324 | ||||||||
Insurance 6.2% | ||||||||
Aflac, Inc. | 348,300 | 22,632,534 | ||||||
American International Group, Inc. | 19,400 | 1,002,010 | ||||||
Arthur J. Gallagher & Co. | 2,200 | 104,390 | ||||||
Assurant, Inc. | 80,900 | 4,731,032 | ||||||
MetLife, Inc. | 165,000 | 7,806,150 | ||||||
Old Republic International Corp. | 905,100 | 15,196,629 | ||||||
Protective Life Corp. | 36,200 | 1,668,096 | ||||||
Prudential Financial, Inc. | 321,700 | 26,183,163 | ||||||
Reinsurance Group of America, Inc. | 40,300 | 2,868,554 | ||||||
StanCorp Financial Group, Inc. | 18,600 | 1,095,540 | ||||||
The Hanover Insurance Group, Inc. | 14,000 | 819,560 | ||||||
The Travelers Cos., Inc. | 306,100 | 26,416,430 | ||||||
XL Group plc | 17,200 | 525,804 | ||||||
111,049,892 | ||||||||
Materials 5.3% | ||||||||
International Paper Co. | 397,400 | 17,728,014 | ||||||
PPG Industries, Inc. | 130,200 | 23,771,916 | ||||||
Steel Dynamics, Inc. | 1,353,300 | 24,318,801 | ||||||
The Dow Chemical Co. | 747,500 | 29,503,825 | ||||||
95,322,556 | ||||||||
Media 1.3% | ||||||||
Comcast Corp., Class A | 156,600 | 7,451,028 | ||||||
Time Warner, Inc. | 240,500 | 16,531,970 | ||||||
23,982,998 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.4% | ||||||||
AbbVie, Inc. | 268,500 | 13,008,825 | ||||||
Amgen, Inc. | 79,400 | 9,210,400 | ||||||
Eli Lilly & Co. | 192,900 | 9,610,278 | ||||||
Johnson & Johnson | 713,200 | 66,049,452 | ||||||
Pfizer, Inc. | 1,743,400 | 53,487,512 | ||||||
151,366,467 | ||||||||
Real Estate 3.8% | ||||||||
Apartment Investment & Management Co., Class A | 517,400 | 14,476,852 | ||||||
Brandywine Realty Trust | 117,700 | 1,674,871 | ||||||
Duke Realty Corp. | 619,100 | 10,258,487 | ||||||
Host Hotels & Resorts, Inc. | 438,000 | 8,124,900 | ||||||
Liberty Property Trust | 163,000 | 6,061,970 | ||||||
Prologis, Inc. | 622,000 | 24,848,900 | ||||||
Retail Properties of America, Inc., Class A | 185,500 | 2,654,505 | ||||||
68,100,485 | ||||||||
Retailing 2.6% | ||||||||
Best Buy Co., Inc. | 338,000 | 14,466,400 | ||||||
Macy’s, Inc. | 548,500 | 25,291,335 | ||||||
The Home Depot, Inc. | 91,900 | 7,158,091 | ||||||
46,915,826 | ||||||||
Semiconductors & Semiconductor Equipment 1.2% | ||||||||
Applied Materials, Inc. | 337,800 | 6,029,730 | ||||||
Microchip Technology, Inc. | 153,000 | 6,572,880 | ||||||
Texas Instruments, Inc. | 213,800 | 8,996,704 | ||||||
21,599,314 | ||||||||
Software & Services 3.0% | ||||||||
CA, Inc. | 800,000 | 25,408,000 | ||||||
Computer Sciences Corp. | 398,100 | 19,610,406 | ||||||
Jack Henry & Associates, Inc. | 20,000 | 1,092,200 | ||||||
The Western Union Co. | 507,000 | 8,629,140 | ||||||
54,739,746 | ||||||||
Technology Hardware & Equipment 5.1% | ||||||||
Cisco Systems, Inc. | 1,555,700 | 35,003,250 | ||||||
Hewlett-Packard Co. | 483,300 | 11,778,021 | ||||||
Seagate Technology plc | 103,200 | 5,023,776 | ||||||
TE Connectivity Ltd. | 526,000 | 27,083,740 | ||||||
Western Digital Corp. | 136,000 | 9,469,680 | ||||||
Xerox Corp. | 290,900 | 2,891,546 | ||||||
91,250,013 | ||||||||
Telecommunication Services 3.2% | ||||||||
AT&T, Inc. | 1,306,400 | 47,291,680 | ||||||
Telephone & Data Systems, Inc. | 59,700 | 1,861,446 | ||||||
Verizon Communications, Inc. | 179,500 | 9,066,545 | ||||||
58,219,671 | ||||||||
Transportation 0.2% | ||||||||
CSX Corp. | 136,400 | 3,554,584 | ||||||
FedEx Corp. | 800 | 104,800 | ||||||
3,659,384 | ||||||||
Utilities 6.1% | ||||||||
Ameren Corp. | 531,500 | 19,229,670 | ||||||
American Electric Power Co., Inc. | 283,500 | 13,279,140 | ||||||
DTE Energy Co. | 443,100 | 30,635,934 | ||||||
Entergy Corp. | 98,500 | 6,374,920 | ||||||
PG&E Corp. | 237,000 | 9,918,450 | ||||||
Pinnacle West Capital Corp. | 204,800 | 11,474,944 | ||||||
Public Service Enterprise Group, Inc. | 346,000 | 11,591,000 |
34 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The AES Corp. | 485,200 | 6,836,468 | ||||||
109,340,526 | ||||||||
Total Common Stock | ||||||||
(Cost $1,398,381,459) | 1,785,118,858 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 1.4% of net assets | ||||||||
Time Deposit 1.4% | ||||||||
Wells Fargo | ||||||||
0.03%, 11/01/13 | 25,489,752 | 25,489,752 | ||||||
U.S. Treasury Obligations 0.0% | ||||||||
U.S. Treasury Bills | ||||||||
0.01%, 12/19/13 (a)(b) | 365,000 | 364,998 | ||||||
0.06%, 12/19/13 (a)(b) | 50,000 | 49,996 | ||||||
414,994 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $25,904,746) | 25,904,746 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $1,424,790,152 and the unrealized appreciation and depreciation were $390,582,767 and ($4,349,315), respectively, with a net unrealized appreciation of $386,233,452.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 95 | 8,317,250 | 344,906 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $1,785,118,858 | $— | $— | $1,785,118,858 | ||||||||||||
Short-Term Investments1 | — | 25,904,746 | — | 25,904,746 | ||||||||||||
Total | $1,785,118,858 | $25,904,746 | $— | $1,811,023,604 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | $344,906 | $— | $— | $344,906 |
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, 2013.
See financial notes 35
Table of Contents
Schwab Dividend Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $1,424,286,205) | $1,811,023,604 | |||||
Receivables: | ||||||
Fund shares sold | 2,654,599 | |||||
Dividends | 2,231,137 | |||||
Interest | 21 | |||||
Prepaid expenses | + | 38,804 | ||||
Total assets | 1,815,948,165 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 10,650,320 | |||||
Investment adviser and administrator fees | 93,224 | |||||
Shareholder service fees | 35,185 | |||||
Fund shares redeemed | 1,417,712 | |||||
Variation margin on futures contracts | 45,600 | |||||
Accrued expenses | + | 65,141 | ||||
Total liabilities | 12,307,182 | |||||
Net Assets | ||||||
Total assets | 1,815,948,165 | |||||
Total liabilities | − | 12,307,182 | ||||
Net assets | $1,803,640,983 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,297,480,535 | |||||
Net investment income not yet distributed | 1,659,809 | |||||
Net realized capital gains | 117,418,334 | |||||
Net unrealized capital appreciation | 387,082,305 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,803,640,983 | 98,985,674 | $18.22 |
36 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends | $45,083,054 | |||||
Interest | + | 4,976 | ||||
Total investment income | 45,088,030 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 9,785,648 | |||||
Shareholder service fees | 3,863,114 | |||||
Shareholder reports | 105,589 | |||||
Portfolio accounting fees | 70,728 | |||||
Registration fees | 59,770 | |||||
Professional fees | 40,165 | |||||
Transfer agent fees | 37,659 | |||||
Custodian fees | 35,273 | |||||
Independent trustees’ fees | 17,803 | |||||
Interest expense | 266 | |||||
Other expenses | + | 34,461 | ||||
Total expenses | 14,050,476 | |||||
Expense reduction by CSIM and its affiliates | − | 44,391 | ||||
Net expenses | − | 14,006,085 | ||||
Net investment income | 31,081,945 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 182,751,291 | |||||
Net realized gains on futures contracts | + | 1,043,009 | ||||
Net realized gains | 183,794,300 | |||||
Net change in unrealized appreciation on investments | 168,817,704 | |||||
Net change in unrealized appreciation on futures contracts | + | 522,787 | ||||
Net change in unrealized appreciation | + | 169,340,491 | ||||
Net realized and unrealized gains | 353,134,791 | |||||
Increase in net assets resulting from operations | $384,216,736 |
See financial notes 37
Table of Contents
Schwab Dividend Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $31,081,945 | $26,554,898 | ||||||||
Net realized gains | 183,794,300 | 109,337,725 | ||||||||
Net change in unrealized appreciation | + | 169,340,491 | 30,109,544 | |||||||
Increase in net assets from operations | 384,216,736 | 166,002,167 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($30,254,415 | ) | ($28,261,739 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 20,146,686 | $334,691,092 | 16,849,993 | $235,314,886 | ||||||||||||||
Shares reinvested | 1,039,729 | 16,530,353 | 1,092,546 | 15,437,629 | ||||||||||||||
Shares redeemed | + | (17,942,195 | ) | (291,824,449 | ) | (22,962,741 | ) | (322,803,726 | ) | |||||||||
Net transactions in fund shares | 3,244,220 | $59,396,996 | (5,020,202 | ) | ($72,051,211 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 95,741,454 | $1,390,281,666 | 100,761,656 | $1,324,592,449 | ||||||||||||||
Total increase or decrease | + | 3,244,220 | 413,359,317 | (5,020,202 | ) | 65,689,217 | ||||||||||||
End of period | 98,985,674 | $1,803,640,983 | 95,741,454 | $1,390,281,666 | ||||||||||||||
Net investment income not yet distributed | $1,659,809 | $832,279 |
38 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.48 | 11.18 | 10.48 | 9.10 | 8.22 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.14 | 0.07 | 0.07 | 0.05 | 0.05 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.17 | 1.29 | 0.69 | 1.39 | 0.87 | |||||||||||||||||
Total from investment operations | 3.31 | 1.36 | 0.76 | 1.44 | 0.92 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.13 | ) | (0.06 | ) | (0.06 | ) | (0.06 | ) | (0.04 | ) | ||||||||||||
Net asset value at end of period | 15.66 | 12.48 | 11.18 | 10.48 | 9.10 | |||||||||||||||||
Total return (%) | 26.76 | 12.18 | 7.25 | 15.83 | 11.36 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.99 | 0.99 | 0.99 | 1.00 | 2 | 0.99 | ||||||||||||||||
Gross operating expenses | 1.05 | 1.05 | 1.05 | 1.04 | 1.03 | |||||||||||||||||
Net investment income (loss) | 1.00 | 0.53 | 0.56 | 0.39 | 0.65 | |||||||||||||||||
Portfolio turnover rate | 87 | 79 | 62 | 57 | 63 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 253 | 217 | 213 | 219 | 360 |
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.
See financial notes 39
Table of Contents
Schwab Large-Cap Growth Fund
Portfolio Holdings as of October 31, 2013
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 | 203,553,675 | 250,870,917 | ||||||||
0 | .4% | Short-Term Investments | 1,155,628 | 1,155,628 | ||||||||
99 | .7% | Total Investments | 204,709,303 | 252,026,545 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 657,659 | |||||||||
100 | .0% | Total Net Assets | 252,684,204 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.3% of net assets | ||||||||
Automobiles & Components 0.5% | ||||||||
Ford Motor Co. | 81,400 | 1,392,754 | ||||||
Banks 0.4% | ||||||||
Wells Fargo & Co. | 26,900 | 1,148,361 | ||||||
Capital Goods 6.1% | ||||||||
AGCO Corp. | 32,400 | 1,891,512 | ||||||
Danaher Corp. | 4,200 | 302,778 | ||||||
Honeywell International, Inc. | 23,100 | 2,003,463 | ||||||
ITT Corp. | 52,600 | 2,089,798 | ||||||
Masco Corp. | 14,600 | 308,498 | ||||||
The Boeing Co. | 30,500 | 3,980,250 | ||||||
United Rentals, Inc. * | 17,200 | 1,110,948 | ||||||
United Technologies Corp. | 19,200 | 2,040,000 | ||||||
W.W. Grainger, Inc. | 5,900 | 1,586,923 | ||||||
15,314,170 | ||||||||
Commercial & Professional Supplies 2.2% | ||||||||
Equifax, Inc. | 32,400 | 2,095,308 | ||||||
Waste Management, Inc. | 78,500 | 3,417,890 | ||||||
5,513,198 | ||||||||
Consumer Durables & Apparel 3.2% | ||||||||
Hanesbrands, Inc. | 5,100 | 347,412 | ||||||
Jarden Corp. * | 14,500 | 802,720 | ||||||
NIKE, Inc., Class B | 67,200 | 5,091,072 | ||||||
Wolverine World Wide, Inc. | 32,200 | 1,859,228 | ||||||
8,100,432 | ||||||||
Consumer Services 4.7% | ||||||||
Brinker International, Inc. | 21,800 | 968,356 | ||||||
International Game Technology | 164,900 | 3,100,120 | ||||||
MGM Resorts International * | 147,300 | 2,804,592 | ||||||
Service Corp. International | 159,900 | 2,879,799 | ||||||
Wyndham Worldwide Corp. | 34,000 | 2,257,600 | ||||||
12,010,467 | ||||||||
Diversified Financials 1.6% | ||||||||
Affiliated Managers Group, Inc. * | 12,000 | 2,369,280 | ||||||
SEI Investments Co. | 47,400 | 1,573,206 | ||||||
3,942,486 | ||||||||
Energy 4.2% | ||||||||
Baker Hughes, Inc. | 11,100 | 644,799 | ||||||
Chevron Corp. | 24,000 | 2,879,040 | ||||||
ConocoPhillips | 24,000 | 1,759,200 | ||||||
Dril-Quip, Inc. * | 1,100 | 129,162 | ||||||
EOG Resources, Inc. | 29,000 | 5,173,600 | ||||||
10,585,801 | ||||||||
Food & Staples Retailing 3.3% | ||||||||
Rite Aid Corp. * | 87,400 | 465,842 | ||||||
The Kroger Co. | 87,400 | 3,744,216 | ||||||
Walgreen Co. | 71,200 | 4,217,888 | ||||||
8,427,946 | ||||||||
Food, Beverage & Tobacco 6.8% | ||||||||
Altria Group, Inc. | 31,400 | 1,169,022 | ||||||
Archer-Daniels-Midland Co. | 78,100 | 3,194,290 | ||||||
Hillshire Brands Co. | 90,800 | 2,980,964 | ||||||
PepsiCo, Inc. | 88,300 | 7,425,147 | ||||||
Pilgrim’s Pride Corp. * | 28,500 | 403,845 | ||||||
The Coca-Cola Co. | 48,400 | 1,915,188 | ||||||
17,088,456 | ||||||||
Health Care Equipment & Services 6.1% | ||||||||
Abbott Laboratories | 53,800 | 1,966,390 | ||||||
Becton, Dickinson & Co. | 5,000 | 525,650 | ||||||
Boston Scientific Corp. * | 26,900 | 314,461 | ||||||
CareFusion Corp. * | 79,700 | 3,089,969 | ||||||
Cigna Corp. | 28,500 | 2,193,930 | ||||||
Covidien plc | 43,900 | 2,814,429 | ||||||
Henry Schein, Inc. * | 20,000 | 2,248,600 | ||||||
McKesson Corp. | 11,200 | 1,751,008 | ||||||
Medtronic, Inc. | 8,400 | 482,160 | ||||||
15,386,597 | ||||||||
Household & Personal Products 1.2% | ||||||||
Avon Products, Inc. | 5,900 | 103,250 | ||||||
Energizer Holdings, Inc. | 31,000 | 3,041,410 | ||||||
3,144,660 | ||||||||
Insurance 1.1% | ||||||||
Aflac, Inc. | 25,200 | 1,637,496 |
40 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Travelers Cos., Inc. | 13,000 | 1,121,900 | ||||||
2,759,396 | ||||||||
Materials 4.7% | ||||||||
Avery Dennison Corp. | 65,500 | 3,086,360 | ||||||
E.I. du Pont de Nemours & Co. | 7,400 | 452,880 | ||||||
PPG Industries, Inc. | 26,100 | 4,765,338 | ||||||
Reliance Steel & Aluminum Co. | 4,900 | 359,121 | ||||||
Steel Dynamics, Inc. | 58,100 | 1,044,057 | ||||||
The Dow Chemical Co. | 55,400 | 2,186,638 | ||||||
11,894,394 | ||||||||
Media 3.6% | ||||||||
AMC Networks, Inc., Class A * | 4,000 | 280,360 | ||||||
Comcast Corp., Class A | 100,000 | 4,758,000 | ||||||
Live Nation Entertainment, Inc. * | 20,200 | 392,688 | ||||||
Regal Entertainment Group, Class A | 8,500 | 161,585 | ||||||
Viacom Inc., Class B | 41,000 | 3,414,890 | ||||||
9,007,523 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.8% | ||||||||
AbbVie, Inc. | 61,900 | 2,999,055 | ||||||
Amgen, Inc. | 45,300 | 5,254,800 | ||||||
Biogen Idec, Inc. * | 4,200 | 1,025,598 | ||||||
Celgene Corp. * | 34,900 | 5,182,301 | ||||||
Johnson & Johnson | 38,400 | 3,556,224 | ||||||
Pfizer, Inc. | 129,900 | 3,985,332 | ||||||
Salix Pharmaceuticals Ltd. * | 4,200 | 301,350 | ||||||
22,304,660 | ||||||||
Real Estate 1.7% | ||||||||
Apartment Investment & Management Co., Class A | 42,000 | 1,175,160 | ||||||
Host Hotels & Resorts, Inc. | 170,700 | 3,166,485 | ||||||
4,341,645 | ||||||||
Retailing 9.7% | ||||||||
Best Buy Co., Inc. | 46,800 | 2,003,040 | ||||||
Liberty Interactive Corp., Class A * | 107,000 | 2,884,720 | ||||||
Lowe’s Cos., Inc. | 56,400 | 2,807,592 | ||||||
Macy’s, Inc. | 86,400 | 3,983,904 | ||||||
Netflix, Inc. * | 1,000 | 322,480 | ||||||
Staples, Inc. | 14,300 | 230,516 | ||||||
The Gap, Inc. | 64,500 | 2,385,855 | ||||||
The Home Depot, Inc. | 60,800 | 4,735,712 | ||||||
The TJX Cos., Inc. | 83,900 | 5,100,281 | ||||||
24,454,100 | ||||||||
Semiconductors & Semiconductor Equipment 1.8% | ||||||||
Applied Materials, Inc. | 62,500 | 1,115,625 | ||||||
Freescale Semiconductor Ltd. * | 22,500 | 347,400 | ||||||
LSI Corp. | 349,900 | 2,967,152 | ||||||
Micron Technology, Inc. * | 6,200 | 109,616 | ||||||
4,539,793 | ||||||||
Software & Services 16.8% | ||||||||
CA, Inc. | 120,300 | 3,820,728 | ||||||
Computer Sciences Corp. | 55,800 | 2,748,708 | ||||||
CoStar Group, Inc. * | 5,100 | 902,649 | ||||||
Facebook, Inc., Class A * | 46,900 | 2,357,194 | ||||||
Google, Inc., Class A * | 6,100 | 6,286,538 | ||||||
IAC/InterActiveCorp | 4,600 | 245,594 | ||||||
International Business Machines Corp. | 9,900 | 1,774,179 | ||||||
Jack Henry & Associates, Inc. | 53,400 | 2,916,174 | ||||||
Microsoft Corp. | 182,700 | 6,458,445 | ||||||
Oracle Corp. | 203,500 | 6,817,250 | ||||||
PTC, Inc. * | 147,500 | 4,088,700 | ||||||
The Western Union Co. | 218,900 | 3,725,678 | ||||||
Verisign, Inc. * | 7,800 | 423,384 | ||||||
42,565,221 | ||||||||
Technology Hardware & Equipment 7.6% | ||||||||
Apple, Inc. | 18,567 | 9,698,472 | ||||||
Cisco Systems, Inc. | 76,300 | 1,716,750 | ||||||
Hewlett-Packard Co. | 37,500 | 913,875 | ||||||
TE Connectivity Ltd. | 60,900 | 3,135,741 | ||||||
Western Digital Corp. | 13,600 | 946,968 | ||||||
Xerox Corp. | 32,800 | 326,032 | ||||||
Zebra Technologies Corp., Class A * | 49,000 | 2,367,190 | ||||||
19,105,028 | ||||||||
Telecommunication Services 1.6% | ||||||||
Verizon Communications, Inc. | 78,700 | 3,975,137 | ||||||
Transportation 1.2% | ||||||||
AMERCO | 6,000 | 1,211,580 | ||||||
Hertz Global Holdings, Inc. * | 43,200 | 991,872 | ||||||
Matson, Inc. | 27,900 | 755,811 | ||||||
2,959,263 | ||||||||
Utilities 0.4% | ||||||||
CenterPoint Energy, Inc. | 1,400 | 34,440 | ||||||
The AES Corp. | 62,100 | 874,989 | ||||||
909,429 | ||||||||
Total Common Stock | ||||||||
(Cost $203,553,675) | 250,870,917 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.4% of net assets | ||||||||
Time Deposit 0.4% | ||||||||
DNB | ||||||||
0.03%, 11/01/13 | 1,087,629 | 1,087,629 | ||||||
U.S. Treasury Obligations 0.0% | ||||||||
U.S. Treasury Bills | ||||||||
0.01%, 12/19/13 (a)(b) | 58,000 | 58,000 |
See financial notes 41
Table of Contents
Schwab Large-Cap Growth Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
0.06%, 12/19/13 (a)(b) | 10,000 | 9,999 | ||||||
67,999 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $1,155,628) | 1,155,628 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $204,825,523 and the unrealized appreciation and depreciation were $47,796,177 and ($595,155), respectively, with a net unrealized appreciation of $47,201,022.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 15 | 1,313,250 | 54,459 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $250,870,917 | $— | $— | $250,870,917 | ||||||||||||
Short-Term Investments1 | — | 1,155,628 | — | 1,155,628 | ||||||||||||
Total | $250,870,917 | $1,155,628 | $— | $252,026,545 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $54,459 | $— | $— | $54,459 |
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, 2013.
42 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $204,709,303) | $252,026,545 | |||||
Receivables: | ||||||
Investments sold | 2,956,052 | |||||
Dividends | 144,992 | |||||
Fund shares sold | 97,896 | |||||
Income from securities on loan | 4 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 8,391 | ||||
Total assets | 255,233,881 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,286,459 | |||||
Investment adviser and administrator fees | 14,306 | |||||
Shareholder service fees | 5,586 | |||||
Fund shares redeemed | 196,646 | |||||
Variation margin on futures contracts | 7,200 | |||||
Accrued expenses | + | 39,480 | ||||
Total liabilities | 2,549,677 | |||||
Net Assets | ||||||
Total assets | 255,233,881 | |||||
Total liabilities | − | 2,549,677 | ||||
Net assets | $252,684,204 | |||||
Net Assets by Source | ||||||
Capital received from investors | 218,545,159 | |||||
Net investment income not yet distributed | 989,027 | |||||
Net realized capital losses | (14,221,683 | ) | ||||
Net unrealized capital appreciation | 47,371,701 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$252,684,204 | 16,135,868 | $15.66 |
See financial notes 43
Table of Contents
Schwab Large-Cap Growth Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends | $4,583,226 | |||||
Interest | 570 | |||||
Securities on loan | + | 37,122 | ||||
Total investment income | 4,620,918 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,676,002 | |||||
Shareholder service fees | 573,730 | |||||
Shareholder reports | 47,427 | |||||
Portfolio accounting fees | 40,726 | |||||
Professional fees | 37,979 | |||||
Transfer agent fees | 24,624 | |||||
Registration fees | 23,940 | |||||
Custodian fees | 10,273 | |||||
Independent trustees’ fees | 8,620 | |||||
Interest expense | 21 | |||||
Other expenses | + | 5,901 | ||||
Total expenses | 2,449,243 | |||||
Expense reduction by CSIM and its affiliates | − | 144,720 | ||||
Net expenses | − | 2,304,523 | ||||
Net investment income | 2,316,395 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 31,514,702 | |||||
Net realized gains on futures contracts | + | 148,910 | ||||
Net realized gains | 31,663,612 | |||||
Net change in unrealized appreciation on investments | 21,297,180 | |||||
Net change in unrealized appreciation on futures contracts | + | 101,894 | ||||
Net change in unrealized appreciation | + | 21,399,074 | ||||
Net realized and unrealized gains | 53,062,686 | |||||
Increase in net assets resulting from operations | $55,379,081 |
44 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $2,316,395 | $1,181,258 | ||||||||
Net realized gains | 31,663,612 | 29,419,021 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 21,399,074 | (5,506,943 | ) | ||||||
Increase in net assets from operations | 55,379,081 | 25,093,336 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($2,200,707 | ) | ($1,032,046 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,838,655 | $25,057,674 | 2,590,944 | $31,765,041 | ||||||||||||||
Shares reinvested | 94,231 | 1,176,943 | 45,504 | 506,911 | ||||||||||||||
Shares redeemed | + | (3,195,045 | ) | (43,826,509 | ) | (4,310,391 | ) | (52,516,380 | ) | |||||||||
Net transactions in fund shares | (1,262,159 | ) | ($17,591,892 | ) | (1,673,943 | ) | ($20,244,428 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 17,398,027 | $217,097,722 | 19,071,970 | $213,280,860 | ||||||||||||||
Total increase or decrease | + | (1,262,159 | ) | 35,586,482 | (1,673,943 | ) | 3,816,862 | |||||||||||
End of period | 16,135,868 | $252,684,204 | 17,398,027 | $217,097,722 | ||||||||||||||
Net investment income not yet distributed | $989,027 | $873,339 |
See financial notes 45
Table of Contents
Schwab Small-Cap Equity Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 17.72 | 15.61 | 13.96 | 11.14 | 10.55 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.09 | 0.02 | (0.01 | ) | (0.04 | ) | (0.02 | ) | ||||||||||||||
Net realized and unrealized gains (losses) | 7.16 | 2.10 | 1.66 | 2.86 | 0.61 | |||||||||||||||||
Total from investment operations | 7.25 | 2.12 | 1.65 | 2.82 | 0.59 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.10 | ) | (0.01 | ) | — | — | (0.00 | )2 | ||||||||||||||
Net asset value at end of period | 24.87 | 17.72 | 15.61 | 13.96 | 11.14 | |||||||||||||||||
Total return (%) | 41.10 | 13.57 | 11.82 | 25.31 | 5.65 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.10 | 1.12 | 1.11 | 1.12 | 1.12 | |||||||||||||||||
Gross operating expenses | 1.11 | 1.12 | 1.12 | 1.14 | 1.17 | |||||||||||||||||
Net investment income (loss) | 0.42 | 0.11 | (0.05 | ) | (0.26 | ) | (0.16 | ) | ||||||||||||||
Portfolio turnover rate | 84 | 101 | 72 | 64 | 85 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 590 | 388 | 226 | 219 | 202 |
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 $0.01.
46 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .8% | Common Stock | 455,928,714 | 583,290,819 | ||||||||
1 | .1% | Short-Term Investments | 6,569,696 | 6,569,696 | ||||||||
99 | .9% | Total Investments | 462,498,410 | 589,860,515 | ||||||||
0 | .5% | Collateral Invested for Securities on Loan | 3,083,360 | 3,083,360 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (2,627,846 | ) | ||||||||
100 | .0% | Total Net Assets | 590,316,029 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.8% of net assets | ||||||||
Automobiles & Components 0.2% | ||||||||
Dana Holding Corp. | 52,858 | 1,036,017 | ||||||
Banks 6.9% | ||||||||
1st Source Corp. | 25,600 | 803,328 | ||||||
BancFirst Corp. | 15,900 | 883,563 | ||||||
Bank of Kentucky Financial Corp. | 7,000 | 201,670 | ||||||
BBCN Bancorp, Inc. | 103,610 | 1,536,536 | ||||||
Berkshire Hills Bancorp, Inc. | 11,300 | 286,681 | ||||||
Cathay General Bancorp | 11,900 | 293,097 | ||||||
Chemical Financial Corp. | 39,140 | 1,146,411 | ||||||
Columbia Banking System, Inc. | 9,470 | 243,284 | ||||||
Community Trust Bancorp, Inc. | 17,650 | 751,714 | ||||||
CVB Financial Corp. | 136,350 | 1,982,529 | ||||||
F.N.B. Corp. | 260,240 | 3,255,602 | ||||||
First BanCorp * | 108,300 | 601,065 | ||||||
First Defiance Financial Corp. | 17,200 | 444,104 | ||||||
First Horizon National Corp. | 94,500 | 1,006,425 | ||||||
First Midwest Bancorp, Inc. | 36,700 | 610,321 | ||||||
MainSource Financial Group, Inc. | 23,100 | 374,682 | ||||||
MGIC Investment Corp. * | 374,260 | 3,046,476 | ||||||
Ocwen Financial Corp. * | 27,900 | 1,568,817 | ||||||
Pinnacle Financial Partners, Inc. * | 27,400 | 849,400 | ||||||
PrivateBancorp, Inc. | 130,500 | 3,178,980 | ||||||
S&T Bancorp, Inc. | 28,200 | 691,464 | ||||||
Susquehanna Bancshares, Inc. | 332,090 | 3,913,681 | ||||||
Synovus Financial Corp. | 1,025,100 | 3,331,575 | ||||||
TCF Financial Corp. | 56,100 | 851,598 | ||||||
UMB Financial Corp. | 45,350 | 2,672,022 | ||||||
United Community Banks, Inc. * | 150,990 | 2,353,934 | ||||||
Webster Financial Corp. | 20,500 | 571,745 | ||||||
WesBanco, Inc. | 44,770 | 1,316,238 | ||||||
Western Alliance Bancorp * | 82,500 | 1,744,875 | ||||||
WSFS Financial Corp. | 3,060 | 214,231 | ||||||
40,726,048 | ||||||||
Capital Goods 10.6% | ||||||||
AAR Corp. | 158,200 | 4,632,096 | ||||||
Aceto Corp. | 106,600 | 1,700,270 | ||||||
AECOM Technology Corp. * | 128,530 | 4,084,683 | ||||||
Aircastle Ltd. | 27,500 | 518,925 | ||||||
Albany International Corp., Class A | 62,100 | 2,285,901 | ||||||
Altra Holdings, Inc. | 20,400 | 619,548 | ||||||
Broadwind Energy, Inc. * | 6,790 | 49,567 | ||||||
Curtiss-Wright Corp. | 72,860 | 3,626,971 | ||||||
Dycom Industries, Inc. * | 19,710 | 584,402 | ||||||
EnerSys, Inc. | 91,700 | 6,084,295 | ||||||
Esterline Technologies Corp. * | 63,520 | 5,091,763 | ||||||
Federal Signal Corp. * | 22,500 | 308,025 | ||||||
General Cable Corp. | 103,800 | 3,418,134 | ||||||
Gibraltar Industries, Inc. * | 64,900 | 1,039,049 | ||||||
Griffon Corp. | 47,200 | 591,416 | ||||||
Harsco Corp. | 127,700 | 3,560,276 | ||||||
Huntington Ingalls Industries, Inc. | 60,900 | 4,357,395 | ||||||
Hurco Cos., Inc. | 9,200 | 225,308 | ||||||
Hyster-Yale Materials Handling, Inc. | 20,500 | 1,608,020 | ||||||
II-VI, Inc. * | 208,510 | 3,557,181 | ||||||
John Bean Technologies Corp. | 87,300 | 2,372,814 | ||||||
Kadant, Inc. | 20,540 | 735,332 | ||||||
L.B. Foster Co., Class A | 16,000 | 748,000 | ||||||
Lydall, Inc. * | 45,320 | 825,730 | ||||||
Moog, Inc., Class A * | 61,500 | 3,673,395 | ||||||
Mueller Water Products, Inc., Class A | 133,700 | 1,145,809 | ||||||
Northwest Pipe Co. * | 7,400 | 266,622 | ||||||
Standex International Corp. | 28,750 | 1,768,413 | ||||||
Terex Corp. * | 18,700 | 653,565 | ||||||
Tutor Perini Corp. * | 25,660 | 588,897 | ||||||
Watts Water Technologies, Inc., Class A | 31,600 | 1,825,848 | ||||||
Xerium Technologies, Inc. * | 20,370 | 244,236 | ||||||
62,791,886 | ||||||||
Commercial & Professional Supplies 1.5% | ||||||||
EnerNOC, Inc. * | 22,330 | 371,348 | ||||||
G&K Services, Inc., Class A | 39,000 | 2,433,600 | ||||||
Heidrick & Struggles International, Inc. | 19,100 | 353,732 | ||||||
Kelly Services, Inc., Class A | 10,532 | 219,697 | ||||||
RPX Corp. * | 80,400 | 1,435,944 | ||||||
Steelcase, Inc., Class A | 119,000 | 1,950,410 | ||||||
The Brink’s Co. | 30,100 | 945,140 | ||||||
US Ecology, Inc. | 6,500 | 231,075 | ||||||
Viad Corp. | 31,000 | 827,700 | ||||||
8,768,646 | ||||||||
Consumer Durables & Apparel 2.3% | ||||||||
Blyth, Inc. (a) | 25,750 | 355,608 | ||||||
Brunswick Corp. | 6,900 | 311,397 | ||||||
CSS Industries, Inc. | 14,800 | 383,172 | ||||||
Culp, Inc. | 12,400 | 239,940 | ||||||
Helen of Troy Ltd. * | 24,200 | 1,130,624 | ||||||
Jarden Corp. * | 33,050 | 1,829,648 |
See financial notes 47
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Johnson Outdoors, Inc., Class A | 7,100 | 194,753 | ||||||
La-Z-Boy, Inc. | 51,600 | 1,190,928 | ||||||
Skechers U.S.A., Inc., Class A * | 75,100 | 2,188,414 | ||||||
The Jones Group, Inc. | 185,250 | 2,878,785 | ||||||
Unifi, Inc. * | 24,000 | 585,360 | ||||||
Universal Electronics, Inc. * | 51,000 | 1,984,410 | ||||||
13,273,039 | ||||||||
Consumer Services 4.0% | ||||||||
Ascent Capital Group, Inc., Class A * | 46,800 | 3,950,856 | ||||||
Boyd Gaming Corp. * | 112,970 | 1,192,963 | ||||||
Capella Education Co. * | 20,280 | 1,235,458 | ||||||
Corinthian Colleges, Inc. * | 294,000 | 629,160 | ||||||
Cracker Barrel Old Country Store, Inc. | 28,000 | 3,076,360 | ||||||
Jack in the Box, Inc. * | 118,060 | 4,802,681 | ||||||
K12, Inc. * | 14,130 | 258,296 | ||||||
Multimedia Games Holding Co., Inc. * | 94,100 | 3,059,191 | ||||||
Regis Corp. | 29,000 | 420,500 | ||||||
Ruth’s Hospitality Group, Inc. | 70,095 | 854,458 | ||||||
Service Corp. International | 197,300 | 3,553,373 | ||||||
Universal Technical Institute, Inc. | 51,590 | 685,631 | ||||||
23,718,927 | ||||||||
Diversified Financials 3.4% | ||||||||
Calamos Asset Management, Inc., Class A | 73,350 | 720,297 | ||||||
Cowen Group, Inc., Class A * | 133,260 | 529,042 | ||||||
DFC Global Corp. * | 52,860 | 639,606 | ||||||
Evercore Partners, Inc., Class A | 65,950 | 3,328,496 | ||||||
FBR & Co. * | 68,060 | 1,803,590 | ||||||
FXCM, Inc., Class A | 171,350 | 2,808,427 | ||||||
GFI Group, Inc. | 83,720 | 290,508 | ||||||
Interactive Brokers Group, Inc., Class A | 166,700 | 3,439,021 | ||||||
Investment Technology Group, Inc. * | 197,027 | 3,156,373 | ||||||
Manning & Napier, Inc. | 24,210 | 401,886 | ||||||
Nelnet, Inc., Class A | 54,400 | 2,319,072 | ||||||
Oppenheimer Holdings, Inc., Class A | 20,120 | 398,980 | ||||||
19,835,298 | ||||||||
Energy 5.9% | ||||||||
Alon USA Energy, Inc. | 72,360 | 874,109 | ||||||
Basic Energy Services, Inc. * | 58,100 | 852,327 | ||||||
Bill Barrett Corp. * | 125,050 | 3,460,133 | ||||||
Clayton Williams Energy, Inc. * | 4,860 | 378,254 | ||||||
Comstock Resources, Inc. | 246,100 | 4,210,771 | ||||||
Dawson Geophysical Co. * | 24,700 | 722,228 | ||||||
Delek US Holdings, Inc. | 52,330 | 1,337,032 | ||||||
Endeavour International Corp. (a)* | 163,383 | 970,495 | ||||||
EPL Oil & Gas, Inc. * | 91,600 | 2,920,208 | ||||||
Goodrich Petroleum Corp. * | 37,342 | 873,429 | ||||||
Green Plains Renewable Energy, Inc. | 205,920 | 3,321,490 | ||||||
Hercules Offshore, Inc. * | 175,600 | 1,194,080 | ||||||
ION Geophysical Corp. * | 123,600 | 573,504 | ||||||
Knightsbridge Tankers Ltd. | 98,270 | 809,745 | ||||||
Natural Gas Services Group, Inc. * | 9,970 | 279,060 | ||||||
Parker Drilling Co. * | 395,500 | 2,847,600 | ||||||
REX American Resources Corp. * | 20,280 | 584,875 | ||||||
Stone Energy Corp. * | 45,500 | 1,586,130 | ||||||
Targa Resources Corp. | 62,050 | 4,812,598 | ||||||
VAALCO Energy, Inc. * | 176,200 | 928,574 | ||||||
Warren Resources, Inc. * | 384,600 | 1,203,798 | ||||||
34,740,440 | ||||||||
Food & Staples Retailing 1.9% | ||||||||
Casey’s General Stores, Inc. | 36,221 | 2,639,786 | ||||||
Rite Aid Corp. * | 804,360 | 4,287,239 | ||||||
Roundy’s, Inc. (a) | 71,630 | 666,159 | ||||||
The Andersons, Inc. | 28,700 | 2,128,966 | ||||||
The Pantry, Inc. * | 127,210 | 1,703,342 | ||||||
11,425,492 | ||||||||
Food, Beverage & Tobacco 2.0% | ||||||||
Coca-Cola Bottling Co. Consolidated | 14,500 | 918,140 | ||||||
Farmer Brothers Co. * | 35,870 | 647,812 | ||||||
Pilgrim’s Pride Corp. * | 113,800 | 1,612,546 | ||||||
Sanderson Farms, Inc. | 75,880 | 4,796,375 | ||||||
Seneca Foods Corp., Class A * | 7,100 | 208,172 | ||||||
TreeHouse Foods, Inc. * | 5,990 | 438,827 | ||||||
Universal Corp. | 63,600 | 3,372,708 | ||||||
11,994,580 | ||||||||
Health Care Equipment & Services 9.4% | ||||||||
Alere, Inc. * | 141,250 | 4,764,362 | ||||||
Align Technology, Inc. * | 32,160 | 1,835,050 | ||||||
AMN Healthcare Services, Inc. * | 38,800 | 481,120 | ||||||
AmSurg Corp. * | 12,400 | 531,836 | ||||||
AngioDynamics, Inc. * | 28,500 | 448,020 | ||||||
Anika Therapeutics, Inc. * | 67,230 | 2,008,160 | ||||||
ArthroCare Corp. * | 34,400 | 1,287,936 | ||||||
Cantel Medical Corp. | 78,675 | 2,761,492 | ||||||
Centene Corp. * | 12,120 | 680,659 | ||||||
CONMED Corp. | 93,580 | 3,394,147 | ||||||
CryoLife, Inc. | 46,100 | 414,439 | ||||||
Greatbatch, Inc. * | 68,784 | 2,622,046 | ||||||
HealthStream, Inc. * | 24,020 | 857,994 | ||||||
Hill-Rom Holdings, Inc. | 107,540 | 4,440,327 | ||||||
ICU Medical, Inc. * | 47,900 | 2,960,220 | ||||||
Lifepoint Hospitals, Inc. * | 19,560 | 1,010,078 | ||||||
Magellan Health Services, Inc. * | 69,000 | 4,050,300 | ||||||
MedAssets, Inc. * | 198,210 | 4,564,776 | ||||||
Merge Healthcare, Inc. * | 126,040 | 320,142 | ||||||
National Healthcare Corp. | 11,100 | 537,018 | ||||||
NuVasive, Inc. * | 104,800 | 3,330,544 | ||||||
Omnicell, Inc. * | 32,200 | 742,854 | ||||||
RTI Surgical, Inc. * | 130,800 | 364,932 | ||||||
STERIS Corp. | 107,320 | 4,849,791 | ||||||
SurModics, Inc. * | 81,670 | 1,925,779 | ||||||
Symmetry Medical, Inc. * | 159,160 | 1,289,196 | ||||||
The Providence Service Corp. * | 11,700 | 349,713 | ||||||
Triple-S Management Corp., Class B * | 27,490 | 489,597 | ||||||
West Pharmaceutical Services, Inc. | 16,600 | 802,610 | ||||||
Wright Medical Group, Inc. * | 60,800 | 1,651,936 | ||||||
55,767,074 | ||||||||
Household & Personal Products 0.5% | ||||||||
Inter Parfums, Inc. | 48,500 | 1,705,260 | ||||||
Prestige Brands Holdings, Inc. * | 21,910 | 684,249 |
48 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Revlon, Inc., Class A * | 17,300 | 410,875 | ||||||
2,800,384 | ||||||||
Insurance 2.6% | ||||||||
American Equity Investment Life Holding Co. | 216,250 | 4,506,650 | ||||||
CNO Financial Group, Inc. | 208,560 | 3,249,365 | ||||||
FBL Financial Group, Inc., Class A | 6,310 | 282,309 | ||||||
First American Financial Corp. | 28,500 | 737,010 | ||||||
Maiden Holdings Ltd. | 67,600 | 740,220 | ||||||
MBIA, Inc. * | 174,150 | 1,980,085 | ||||||
Selective Insurance Group, Inc. | 18,430 | 484,156 | ||||||
StanCorp Financial Group, Inc. | 31,640 | 1,863,596 | ||||||
Symetra Financial Corp. | 43,920 | 822,622 | ||||||
The Hanover Insurance Group, Inc. | 10,220 | 598,279 | ||||||
15,264,292 | ||||||||
Materials 5.9% | ||||||||
A. Schulman, Inc. | 70,000 | 2,318,400 | ||||||
AMCOL International Corp. | 28,400 | 911,072 | ||||||
Balchem Corp. | 8,700 | 498,162 | ||||||
Berry Plastics Group, Inc. * | 17,800 | 357,424 | ||||||
Chemtura Corp. * | 27,300 | 668,850 | ||||||
Coeur Mining, Inc. * | 73,260 | 894,504 | ||||||
Commercial Metals Co. | 131,500 | 2,414,340 | ||||||
FutureFuel Corp. | 52,300 | 910,543 | ||||||
Handy & Harman Ltd. * | 8,300 | 191,647 | ||||||
Innospec, Inc. | 14,700 | 677,082 | ||||||
Kraton Performance Polymers, Inc. * | 15,980 | 339,895 | ||||||
Materion Corp. | 87,610 | 2,611,654 | ||||||
Minerals Technologies, Inc. | 93,300 | 5,283,579 | ||||||
Neenah Paper, Inc. | 76,210 | 3,135,279 | ||||||
Olympic Steel, Inc. | 1,580 | 43,245 | ||||||
OM Group, Inc. * | 56,400 | 1,917,600 | ||||||
Omnova Solutions, Inc. * | 26,600 | 231,420 | ||||||
P.H. Glatfelter Co. | 69,300 | 1,815,660 | ||||||
PolyOne Corp. | 24,320 | 736,896 | ||||||
SunCoke Energy, Inc. * | 118,300 | 2,366,000 | ||||||
Tredegar Corp. | 53,500 | 1,563,270 | ||||||
Worthington Industries, Inc. | 127,820 | 5,181,823 | ||||||
35,068,345 | ||||||||
Media 0.9% | ||||||||
AH Belo Corp., Class A | 48,000 | 385,920 | ||||||
Live Nation Entertainment, Inc. * | 173,700 | 3,376,728 | ||||||
The E.W. Scripps Co., Class A * | 74,600 | 1,478,572 | ||||||
5,241,220 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.9% | ||||||||
Acorda Therapeutics, Inc. * | 35,300 | 1,080,533 | ||||||
AMAG Pharmaceuticals, Inc. * | 87,810 | 2,369,114 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 31,770 | 3,924,230 | ||||||
Emergent Biosolutions, Inc. * | 76,720 | 1,498,342 | ||||||
Enzo Biochem, Inc. * | 64,360 | 160,256 | ||||||
Enzon Pharmaceuticals, Inc. | 238,920 | 353,602 | ||||||
ICON plc * | 103,090 | 4,168,960 | ||||||
Impax Laboratories, Inc. * | 229,340 | 4,646,428 | ||||||
Lannett Co., Inc. * | 67,290 | 1,588,717 | ||||||
Maxygen, Inc. (e)* | 67,800 | 2,034 | ||||||
Nektar Therapeutics * | 140,720 | 1,338,247 | ||||||
PAREXEL International Corp. * | 104,500 | 4,776,695 | ||||||
PDL Biopharma, Inc. (a) | 229,230 | 1,854,471 | ||||||
Repligen Corp. * | 43,600 | 476,984 | ||||||
Sagent Pharmaceuticals, Inc. * | 88,470 | 1,918,914 | ||||||
Santarus, Inc. * | 138,190 | 3,223,973 | ||||||
The Medicines Co. * | 10,940 | 371,085 | ||||||
Threshold Pharmaceuticals, Inc. * | 243,065 | 1,054,902 | ||||||
34,807,487 | ||||||||
Real Estate 6.2% | ||||||||
Acadia Realty Trust | 122,900 | 3,277,743 | ||||||
Apartment Investment & Management Co., Class A | 106,100 | 2,968,678 | ||||||
Ashford Hospitality Trust | 327,393 | 4,275,753 | ||||||
Brandywine Realty Trust | 294,920 | 4,196,712 | ||||||
CyrusOne, Inc. | 34,390 | 670,261 | ||||||
DCT Industrial Trust, Inc. | 500,000 | 3,875,000 | ||||||
DiamondRock Hospitality Co. | 153,760 | 1,751,326 | ||||||
RAIT Financial Trust | 245,900 | 1,856,545 | ||||||
RLJ Lodging Trust | 212,720 | 5,373,307 | ||||||
Saul Centers, Inc. | 33,470 | 1,573,090 | ||||||
Strategic Hotels & Resorts, Inc. * | 255,300 | 2,221,110 | ||||||
Sunstone Hotel Investors, Inc. | 364,490 | 4,829,492 | ||||||
36,869,017 | ||||||||
Retailing 3.5% | ||||||||
ANN, Inc. * | 74,400 | 2,630,784 | ||||||
Brown Shoe Co., Inc. | 199,480 | 4,476,331 | ||||||
Citi Trends, Inc. * | 6,030 | 88,520 | ||||||
Core-Mark Holding Co., Inc. | 14,637 | 1,035,275 | ||||||
Haverty Furniture Cos, Inc. | 62,900 | 1,749,249 | ||||||
hhgregg, Inc. * | 52,340 | 811,794 | ||||||
Kirkland’s, Inc. * | 81,200 | 1,441,300 | ||||||
New York & Co., Inc. * | 82,500 | 422,400 | ||||||
Shutterfly, Inc. * | 34,141 | 1,677,689 | ||||||
Stein Mart, Inc. | 22,960 | 339,119 | ||||||
The Children’s Place Retail Stores, Inc. * | 80,100 | 4,372,659 | ||||||
The Pep Boys - Manny, Moe & Jack * | 133,720 | 1,730,337 | ||||||
20,775,457 | ||||||||
Semiconductors & Semiconductor Equipment 4.0% | ||||||||
Amkor Technology, Inc. * | 255,750 | 1,358,032 | ||||||
ATMI, Inc. * | 5,190 | 141,895 | ||||||
Axcelis Technologies, Inc. * | 164,310 | 356,553 | ||||||
Cohu, Inc. | 22,200 | 212,232 | ||||||
Diodes, Inc. * | 116,823 | 2,829,453 | ||||||
DSP Group, Inc. * | 26,000 | 193,700 | ||||||
Entegris, Inc. * | 251,300 | 2,600,955 | ||||||
Exar Corp. * | 151,100 | 1,742,183 | ||||||
First Solar, Inc. * | 42,270 | 2,124,913 | ||||||
FormFactor, Inc. * | 271,620 | 1,417,856 | ||||||
International Rectifier Corp. * | 199,250 | 5,188,470 | ||||||
IXYS Corp. | 54,900 | 638,487 | ||||||
Pericom Semiconductor Corp. * | 51,100 | 412,888 | ||||||
Photronics, Inc. * | 278,950 | 2,343,180 | ||||||
Sigma Designs, Inc. * | 69,100 | 375,904 | ||||||
Spansion, Inc., Class A * | 92,000 | 1,101,240 |
See financial notes 49
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ultra Clean Holdings, Inc. * | 64,000 | 595,840 | ||||||
23,633,781 | ||||||||
Software & Services 10.7% | ||||||||
Accelrys, Inc. * | 159,850 | 1,494,597 | ||||||
Acxiom Corp. * | 87,270 | 2,899,982 | ||||||
Advent Software, Inc. | 15,100 | 506,605 | ||||||
Aspen Technology, Inc. * | 46,500 | 1,777,695 | ||||||
Bottomline Technologies, Inc. * | 17,850 | 560,847 | ||||||
comScore, Inc. * | 156,370 | 4,178,206 | ||||||
Convergys Corp. | 168,800 | 3,332,112 | ||||||
CoreLogic, Inc. * | 76,400 | 2,541,828 | ||||||
CSG Systems International, Inc. | 112,800 | 3,142,608 | ||||||
Dealertrack Technologies, Inc. * | 4,700 | 175,310 | ||||||
EPIQ Systems, Inc. | 89,400 | 1,337,424 | ||||||
Euronet Worldwide, Inc. * | 87,840 | 3,812,256 | ||||||
IntraLinks Holdings, Inc. * | 76,100 | 790,679 | ||||||
j2 Global, Inc. | 91,200 | 5,014,176 | ||||||
Limelight Networks, Inc. * | 349,100 | 670,272 | ||||||
Mentor Graphics Corp. | 94,090 | 2,077,507 | ||||||
MoneyGram International, Inc. * | 43,224 | 912,459 | ||||||
Monotype Imaging Holdings, Inc. | 92,300 | 2,604,706 | ||||||
Pegasystems, Inc. | 21,530 | 819,432 | ||||||
PTC, Inc. * | 192,080 | 5,324,458 | ||||||
QuinStreet, Inc. * | 9,910 | 88,100 | ||||||
Rosetta Stone, Inc. * | 33,360 | 506,405 | ||||||
Rovi Corp. * | 197,750 | 3,314,290 | ||||||
SeaChange International, Inc. * | 96,800 | 1,373,592 | ||||||
Sykes Enterprises, Inc. * | 30,300 | 567,216 | ||||||
TeleCommunication Systems, Inc., Class A * | 59,240 | 135,067 | ||||||
TeleTech Holdings, Inc. * | 80,200 | 2,122,894 | ||||||
Travelzoo, Inc. * | 8,200 | 176,546 | ||||||
United Online, Inc. * | 534,800 | 4,620,672 | ||||||
Verint Systems, Inc. * | 129,000 | 4,711,080 | ||||||
WebMD Health Corp. * | 26,430 | 930,865 | ||||||
XO Group, Inc. * | 37,600 | 521,888 | ||||||
63,041,774 | ||||||||
Technology Hardware & Equipment 5.9% | ||||||||
Aviat Networks, Inc. * | 177,200 | 365,032 | ||||||
Benchmark Electronics, Inc. * | 84,400 | 1,918,412 | ||||||
Brocade Communications Systems, Inc. * | 525,200 | 4,212,104 | ||||||
Checkpoint Systems, Inc. * | 47,000 | 799,940 | ||||||
Ciena Corp. * | 94,600 | 2,201,342 | ||||||
Daktronics, Inc. | 52,700 | 630,292 | ||||||
EchoStar Corp., Class A * | 55,180 | 2,646,433 | ||||||
Electronics for Imaging, Inc. * | 27,140 | 931,173 | ||||||
Emulex Corp. * | 267,100 | 2,011,263 | ||||||
Harmonic, Inc. * | 603,100 | 4,408,661 | ||||||
Hutchinson Technology, Inc. * | 89,870 | 334,316 | ||||||
Immersion Corp. * | 26,740 | 340,133 | ||||||
Insight Enterprises, Inc. * | 95,400 | 2,010,078 | ||||||
Lexmark International, Inc., Class A | 50,800 | 1,805,940 | ||||||
Littelfuse, Inc. | 6,500 | 552,695 | ||||||
Newport Corp. * | 20,100 | 318,987 | ||||||
Plexus Corp. * | 41,700 | 1,596,276 | ||||||
Radisys Corp. * | 65,400 | 197,508 | ||||||
Richardson Electronics Ltd. | 17,800 | 205,056 | ||||||
Sanmina Corp. * | 103,400 | 1,505,504 | ||||||
Silicon Graphics International Corp. * | 160,200 | 2,045,754 | ||||||
TTM Technologies, Inc. * | 92,860 | 812,525 | ||||||
Zebra Technologies Corp., Class A * | 51,440 | 2,485,067 | ||||||
Zygo Corp. * | 14,400 | 222,336 | ||||||
34,556,827 | ||||||||
Telecommunication Services 0.7% | ||||||||
Alaska Communications Systems Group, Inc. * | 76,620 | 188,485 | ||||||
Cbeyond, Inc. * | 99,190 | 638,784 | ||||||
IDT Corp., Class B | 60,900 | 1,333,101 | ||||||
Inteliquent, Inc. | 48,907 | 628,455 | ||||||
Premiere Global Services, Inc. * | 149,200 | 1,344,292 | ||||||
Shenandoah Telecommunications Co. | 8,300 | 230,159 | ||||||
4,363,276 | ||||||||
Transportation 2.4% | ||||||||
AMERCO | 18,700 | 3,776,091 | ||||||
Arkansas Best Corp. | 55,300 | 1,513,561 | ||||||
Con-way, Inc. | 90,160 | 3,714,592 | ||||||
Park-Ohio Holdings Corp. * | 28,200 | 1,167,762 | ||||||
Republic Airways Holdings, Inc. * | 52,900 | 623,162 | ||||||
Saia, Inc. * | 30,290 | 985,334 | ||||||
SkyWest, Inc. | 138,600 | 2,084,544 | ||||||
13,865,046 | ||||||||
Utilities 1.5% | ||||||||
Avista Corp. | 33,310 | 925,685 | ||||||
Black Hills Corp. | 97,440 | 4,942,157 | ||||||
Chesapeake Utilities Corp. | 10,700 | 582,187 | ||||||
PNM Resources, Inc. | 103,530 | 2,476,437 | ||||||
8,926,466 | ||||||||
Total Common Stock | ||||||||
(Cost $455,928,714) | 583,290,819 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 1.1% of net assets | ||||||||
Time Deposits 1.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/01/13 | 5,979,700 | 5,979,700 | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/19/13 (b)(c) | 590,000 | 589,996 | ||||||
Total Short-Term Investments | ||||||||
(Cost $6,569,696) | 6,569,696 | |||||||
End of Investments. | ||||||||
50 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.5% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (d) | 3,083,360 | 3,083,360 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $3,083,360) | 3,083,360 | |||||||
End of Collateral Invested for Securities on Loan |
At 10/31/13, the tax basis cost of the fund’s investments was $463,020,967 and the unrealized appreciation and depreciation were $135,898,052 and ($9,058,504), respectively, with a net unrealized appreciation of $126,839,548.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $2,964,901. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. | |
(d) | The rate shown is the 7-day yield. | |
(e) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/20/13 | 22 | 2,415,160 | 113,478 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $548,483,332 | $— | $— | $548,483,332 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 34,805,453 | — | 2,034 | 34,807,487 | ||||||||||||
Short-Term Investments1 | — | 6,569,696 | — | 6,569,696 | ||||||||||||
Total | $583,288,785 | $6,569,696 | $2,034 | $589,860,515 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $3,083,360 | $— | $— | $3,083,360 | ||||||||||||
Futures Contract2 | 113,478 | — | — | 113,478 |
1 | As categorized in Portfolio 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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | $792,844 | ($140,267 | ) | ($121,069 | ) | $— | ($713,380 | ) | $703,452 | ($519,546 | ) | $2,034 | ||||||||||||||||||||
Total | $792,844 | ($140,267 | ) | ($121,069 | ) | $— | ($713,380 | ) | $703,452 | ($519,546 | ) | $2,034 | ||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in appreciation (depreciation) for Level 3 investments held by the fund at October 31, 2013 was $6,102.
See financial notes 51
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
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 transfers in and out of Level 3 from and to Level 1 or Level 2 due to the result of fair valued securities for which no quoted value was available. There were no transfers between Level 1 and Level 2 for the period ended October 31, 2013.
52 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $462,498,410) including securities on loan of $2,964,901 | $589,860,515 | |||||
Collateral invested for securities on loan | 3,083,360 | |||||
Receivables: | ||||||
Fund shares sold | 1,829,752 | |||||
Dividends | 223,291 | |||||
Income from securities on loan | 5,657 | |||||
Interest | 5 | |||||
Prepaid expenses | + | 7,904 | ||||
Total assets | 595,010,484 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 3,083,360 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 40,289 | |||||
Shareholder service fees | 12,759 | |||||
Fund shares redeemed | 1,495,140 | |||||
Variation margin on futures contracts | 18,920 | |||||
Accrued expenses | + | 43,987 | ||||
Total liabilities | 4,694,455 | |||||
Net Assets | ||||||
Total assets | 595,010,484 | |||||
Total liabilities | − | 4,694,455 | ||||
Net assets | $590,316,029 | |||||
Net Assets by Source | ||||||
Capital received from investors | 406,583,615 | |||||
Distributions in excess of net investment income | (92,217 | ) | ||||
Net realized capital gains | 56,349,048 | |||||
Net unrealized capital appreciation | 127,475,583 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$590,316,029 | 23,738,103 | $24.87 |
See financial notes 53
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends | $7,155,482 | |||||
Interest | 1,982 | |||||
Securities on loan | + | 119,145 | ||||
Total investment income | 7,276,609 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,878,820 | |||||
Shareholder service fees | 1,181,930 | |||||
Shareholder reports | 54,586 | |||||
Portfolio accounting fees | 49,043 | |||||
Registration fees | 35,069 | |||||
Professional fees | 34,876 | |||||
Custodian fees | 34,845 | |||||
Transfer agent fees | 24,293 | |||||
Independent trustees’ fees | 10,142 | |||||
Other expenses | + | 9,780 | ||||
Total expenses | 5,313,384 | |||||
Expense reduction by CSIM and its affiliates | − | 31,237 | ||||
Net expenses | − | 5,282,147 | ||||
Net investment income | 1,994,462 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 69,413,131 | |||||
Net realized gains on futures contracts | + | 1,278,383 | ||||
Net realized gains | 70,691,514 | |||||
Net change in unrealized appreciation on investments | 89,650,446 | |||||
Net change in unrealized appreciation on futures contracts | + | 113,478 | ||||
Net change in unrealized appreciation | + | 89,763,924 | ||||
Net realized and unrealized gains | 160,455,438 | |||||
Increase in net assets resulting from operations | $162,449,900 |
54 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $1,994,462 | $412,291 | ||||||||
Net realized gains | 70,691,514 | 34,583,871 | ||||||||
Net change in unrealized appreciation | + | 89,763,924 | 23,055,659 | |||||||
Increase in net assets from operations | 162,449,900 | 58,051,821 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($2,100,800 | ) | ($177,045 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 5,573,116 | $121,933,084 | 10,994,013 | $164,489,009 | ||||||||||||||
Shares reinvested | 39,481 | 707,097 | 3,977 | 61,875 | ||||||||||||||
Shares redeemed | + | (3,750,852 | ) | (80,237,495 | ) | (3,628,709 | ) | (61,262,349 | ) | |||||||||
Net transactions in fund shares | 1,861,745 | $42,402,686 | 7,369,281 | $103,288,535 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 21,876,358 | $387,564,243 | 14,507,077 | $226,400,932 | ||||||||||||||
Total increase | + | 1,861,745 | 202,751,786 | 7,369,281 | 161,163,311 | |||||||||||||
End of period | 23,738,103 | $590,316,029 | 21,876,358 | $387,564,243 | ||||||||||||||
Distributions in excess of net investment income/Net investment income not yet distributed | ($92,217 | ) | $339,903 |
See financial notes 55
Table of Contents
Schwab Hedged Equity Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 16.36 | 15.32 | 14.79 | 13.45 | 12.55 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.10 | ) | (0.08 | ) | (0.05 | ) | (0.08 | ) | (0.05 | ) | ||||||||||||
Net realized and unrealized gains (losses) | 2.36 | 1.12 | 0.58 | 1.42 | 0.96 | |||||||||||||||||
Total from investment operations | 2.26 | 1.04 | 0.53 | 1.34 | 0.91 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | — | — | (0.01 | ) | ||||||||||||||||
Net asset value at end of period | 18.62 | 16.36 | 15.32 | 14.79 | 13.45 | |||||||||||||||||
Total return (%) | 13.81 | 6.79 | 3.58 | 9.96 | 7.28 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses (including dividend expense on short sales) | 2.48 | 2.08 | 1.86 | 1.97 | 2.07 | 2 | ||||||||||||||||
Net operating expenses (excluding dividend expense on short sales) | 1.48 | 3 | 1.53 | 3 | 1.44 | 4 | 1.38 | 5 | 1.62 | 2,5 | ||||||||||||
Gross operating expenses | 2.52 | 2.13 | 1.88 | 1.99 | 2.29 | |||||||||||||||||
Net investment income (loss) | (0.49 | ) | (0.47 | ) | (0.25 | ) | (0.54 | ) | (0.41 | ) | ||||||||||||
Portfolio turnover rate | 130 | 109 | 98 | 115 | 169 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 193 | 194 | 236 | 329 | 306 |
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 ratio.
3 The ratio of net operating expenses would have been 1.33% for the period ended 10/31/12 and 10/31/13, respectively, if stock loan fees on short sales had not been incurred.
4 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.
5 The ratio of net operating expenses would have been 1.47% and 1.31% for the period ended 10/31/09, and 10/31/10, respectively, if stock loan fees on short sales had not been incurred.
56 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings as of October 31, 2013
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 | 145,749,482 | 191,041,380 | ||||||||
0 | .6% | Other Investment Company | 1,130,585 | 1,130,585 | ||||||||
99 | .7% | Total Investments | 146,880,067 | 192,171,965 | ||||||||
(39 | .7)% | Short Sales | (63,851,281 | ) | (76,400,041 | ) | ||||||
40 | .0% | Other Assets and Liabilities, Net | 76,898,688 | |||||||||
100 | .0% | Total Net Assets | 192,670,612 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.1% of net assets | ||||||||
Automobiles & Components 0.1% | ||||||||
Visteon Corp. * | 2,500 | 192,725 | ||||||
Banks 6.2% | ||||||||
Fifth Third Bancorp | 78,998 | 1,503,332 | ||||||
MGIC Investment Corp. * | 56,100 | 456,654 | ||||||
Ocwen Financial Corp. * | 14,600 | 820,958 | ||||||
Regions Financial Corp. (b) | 239,500 | 2,306,385 | ||||||
SunTrust Banks, Inc. | 51,134 | 1,720,147 | ||||||
Wells Fargo & Co. (b) | 118,191 | 5,045,574 | ||||||
11,853,050 | ||||||||
Capital Goods 5.8% | ||||||||
3M Co. | 2,400 | 302,040 | ||||||
AGCO Corp. | 34,373 | 2,006,696 | ||||||
Aircastle Ltd. | 16,000 | 301,920 | ||||||
Curtiss-Wright Corp. | 43,600 | 2,170,408 | ||||||
General Electric Co. (b) | 31,485 | 823,018 | ||||||
II-VI, Inc. * | 69,800 | 1,190,788 | ||||||
Masco Corp. | 76,000 | 1,605,880 | ||||||
Northrop Grumman Corp. | 14,700 | 1,580,397 | ||||||
Terex Corp. * | 21,400 | 747,930 | ||||||
Textron, Inc. | 12,835 | 369,519 | ||||||
11,098,596 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Equifax, Inc. | 13,800 | 892,446 | ||||||
R.R. Donnelley & Sons Co. | 15,100 | 280,407 | ||||||
Waste Management, Inc. | 3,600 | 156,744 | ||||||
1,329,597 | ||||||||
Consumer Durables & Apparel 1.5% | ||||||||
Jarden Corp. (b)* | 35,416 | 1,960,630 | ||||||
NIKE, Inc., Class B | 7,600 | 575,776 | ||||||
The Jones Group, Inc. | 19,100 | 296,814 | ||||||
2,833,220 | ||||||||
Consumer Services 1.9% | ||||||||
Brinker International, Inc. (b) | 6,626 | 294,327 | ||||||
Cracker Barrel Old Country Store, Inc. | 4,300 | 472,441 | ||||||
Jack in the Box, Inc. * | 26,900 | 1,094,292 | ||||||
MGM Resorts International * | 52,300 | 995,792 | ||||||
Service Corp. International | 43,200 | 778,032 | ||||||
3,634,884 | ||||||||
Diversified Financials 7.2% | ||||||||
Affiliated Managers Group, Inc. * | 8,000 | 1,579,520 | ||||||
Bank of America Corp. | 118,400 | 1,652,864 | ||||||
Citigroup, Inc. | 23,700 | 1,156,086 | ||||||
JPMorgan Chase & Co. (b) | 44,612 | 2,299,303 | ||||||
SLM Corp. (b) | 113,309 | 2,874,649 | ||||||
State Street Corp. | 13,600 | 952,952 | ||||||
The Bank of New York Mellon Corp. (b) | 108,000 | 3,434,400 | ||||||
13,949,774 | ||||||||
Energy 9.2% | ||||||||
Anadarko Petroleum Corp. | 21,100 | 2,010,619 | ||||||
Chevron Corp. (b) | 11,096 | 1,331,076 | ||||||
ConocoPhillips (b) | 54,500 | 3,994,850 | ||||||
EOG Resources, Inc. (b) | 21,300 | 3,799,920 | ||||||
Exxon Mobil Corp. (b) | 1,978 | 177,268 | ||||||
Hess Corp. | 12,500 | 1,015,000 | ||||||
Murphy Oil Corp. (b) | 40,553 | 2,446,157 | ||||||
Occidental Petroleum Corp. | 6,800 | 653,344 | ||||||
Oceaneering International, Inc. (b) | 24,501 | 2,104,146 | ||||||
SM Energy Co. | 2,500 | 221,525 | ||||||
17,753,905 | ||||||||
Food & Staples Retailing 3.7% | ||||||||
Costco Wholesale Corp. | 13,500 | 1,593,000 | ||||||
Rite Aid Corp. * | 326,400 | 1,739,712 | ||||||
The Kroger Co. (b) | 84,543 | 3,621,822 | ||||||
Walgreen Co. | 4,500 | 266,580 | ||||||
7,221,114 | ||||||||
Food, Beverage & Tobacco 4.2% | ||||||||
Altria Group, Inc. | 10,600 | 394,638 | ||||||
Archer-Daniels-Midland Co. (b) | 87,500 | 3,578,750 | ||||||
Hillshire Brands Co. | 20,100 | 659,883 | ||||||
J&J Snack Foods Corp. | 9,600 | 821,472 | ||||||
Pilgrim’s Pride Corp. * | 18,700 | 264,979 | ||||||
Sanderson Farms, Inc. | 20,400 | 1,289,484 | ||||||
TreeHouse Foods, Inc. * | 3,800 | 278,388 | ||||||
Universal Corp. (b) | 14,700 | 779,541 | ||||||
8,067,135 |
See financial notes 57
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Health Care Equipment & Services 5.8% | ||||||||
Alere, Inc. * | 41,400 | 1,396,422 | ||||||
CareFusion Corp. * | 43,400 | 1,682,618 | ||||||
Cigna Corp. | 17,300 | 1,331,754 | ||||||
Magellan Health Services, Inc. (b)* | 41,000 | 2,406,700 | ||||||
MedAssets, Inc. * | 56,200 | 1,294,286 | ||||||
Medtronic, Inc. (b) | 54,000 | 3,099,600 | ||||||
11,211,380 | ||||||||
Household & Personal Products 0.2% | ||||||||
Harbinger Group, Inc. * | 29,200 | 317,988 | ||||||
Insurance 3.8% | ||||||||
Aflac, Inc. | 36,700 | 2,384,766 | ||||||
American Financial Group, Inc. | 30,000 | 1,687,800 | ||||||
Principal Financial Group, Inc. | 39,132 | 1,857,205 | ||||||
Reinsurance Group of America, Inc. | 8,300 | 590,794 | ||||||
The Travelers Cos., Inc. | 9,900 | 854,370 | ||||||
7,374,935 | ||||||||
Materials 6.7% | ||||||||
AMCOL International Corp. | 20,400 | 654,432 | ||||||
Ashland, Inc. | 6,100 | 564,555 | ||||||
Avery Dennison Corp. | 3,500 | 164,920 | ||||||
Commercial Metals Co. | 44,900 | 824,364 | ||||||
International Paper Co. (b) | 21,916 | 977,673 | ||||||
MeadWestvaco Corp. (b) | 33,347 | 1,162,143 | ||||||
Minerals Technologies, Inc. (b) | 68,692 | 3,890,028 | ||||||
PPG Industries, Inc. | 4,472 | 816,498 | ||||||
Steel Dynamics, Inc. | 30,700 | 551,679 | ||||||
Stepan Co. | 9,500 | 559,265 | ||||||
Worthington Industries, Inc. | 65,393 | 2,651,032 | ||||||
12,816,589 | ||||||||
Media 3.0% | ||||||||
Comcast Corp., Class A | 31,700 | 1,508,286 | ||||||
Live Nation Entertainment, Inc. * | 40,300 | 783,432 | ||||||
The Washington Post Co., Class B | 1,700 | 1,093,644 | ||||||
Time Warner, Inc. | 24,800 | 1,704,752 | ||||||
Viacom Inc., Class B | 8,300 | 691,307 | ||||||
5,781,421 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.0% | ||||||||
Amgen, Inc. | 19,700 | 2,285,200 | ||||||
Biogen Idec, Inc. * | 1,800 | 439,542 | ||||||
Celgene Corp. (b)* | 26,500 | 3,934,985 | ||||||
ICON plc * | 4,100 | 165,804 | ||||||
Merck & Co., Inc. (b) | 1,900 | 85,671 | ||||||
Pfizer, Inc. (b) | 154,574 | 4,742,330 | ||||||
11,653,532 | ||||||||
Real Estate 2.1% | ||||||||
Apartment Investment & Management Co., Class A | 11,700 | 327,366 | ||||||
Ashford Hospitality Trust | 40,800 | 532,848 | ||||||
Brandywine Realty Trust | 100,500 | 1,430,115 | ||||||
RLJ Lodging Trust | 70,700 | 1,785,882 | ||||||
4,076,211 | ||||||||
Retailing 5.2% | ||||||||
ANN, Inc. (b)* | 97,100 | 3,433,456 | ||||||
Best Buy Co., Inc. | 33,300 | 1,425,240 | ||||||
Brown Shoe Co., Inc. | 9,200 | 206,448 | ||||||
Macy’s, Inc. (b) | 65,421 | 3,016,562 | ||||||
Staples, Inc. | 2,400 | 38,688 | ||||||
The Children’s Place Retail Stores, Inc. * | 24,900 | 1,359,291 | ||||||
The TJX Cos., Inc. | 10,500 | 638,295 | ||||||
10,117,980 | ||||||||
Semiconductors & Semiconductor Equipment 0.9% | ||||||||
Diodes, Inc. * | 1,200 | 29,064 | ||||||
International Rectifier Corp. * | 38,200 | 994,728 | ||||||
LSI Corp. | 83,966 | 712,032 | ||||||
1,735,824 | ||||||||
Software & Services 10.7% | ||||||||
Aspen Technology, Inc. * | 23,900 | 913,697 | ||||||
CA, Inc. (b) | 117,906 | 3,744,695 | ||||||
comScore, Inc. * | 33,300 | 889,776 | ||||||
Convergys Corp. (b) | 100,622 | 1,986,278 | ||||||
Google, Inc., Class A * | 1,400 | 1,442,812 | ||||||
Jack Henry & Associates, Inc. | 26,200 | 1,430,782 | ||||||
Microsoft Corp. (b) | 85,519 | 3,023,097 | ||||||
Oracle Corp. (b) | 84,300 | 2,824,050 | ||||||
Pegasystems, Inc. | 13,200 | 502,392 | ||||||
PTC, Inc. * | 25,400 | 704,088 | ||||||
Rovi Corp. * | 37,300 | 625,148 | ||||||
Synopsys, Inc. * | 45,900 | 1,673,055 | ||||||
Verint Systems, Inc. * | 11,500 | 419,980 | ||||||
WebMD Health Corp. * | 9,734 | 342,831 | ||||||
20,522,681 | ||||||||
Technology Hardware & Equipment 8.0% | ||||||||
Apple, Inc. (b) | 9,728 | 5,081,421 | ||||||
Brocade Communications Systems, Inc. (b)* | 228,524 | 1,832,763 | ||||||
Cisco Systems, Inc. | 64,900 | 1,460,250 | ||||||
EchoStar Corp., Class A (b)* | 21,567 | 1,034,353 | ||||||
Hewlett-Packard Co. | 36,236 | 883,071 | ||||||
Lexmark International, Inc., Class A | 16,200 | 575,910 | ||||||
Western Digital Corp. | 25,479 | 1,774,103 | ||||||
Zebra Technologies Corp., Class A (b)* | 59,300 | 2,864,783 | ||||||
15,506,654 | ||||||||
Telecommunication Services 2.0% | ||||||||
AT&T, Inc. | 46,100 | 1,668,820 | ||||||
Telephone & Data Systems, Inc. (b) | 37,020 | 1,154,284 | ||||||
Verizon Communications, Inc. | 19,050 | 962,215 | ||||||
3,785,319 |
58 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Transportation 2.7% | ||||||||
AMERCO | 2,800 | 565,404 | ||||||
FedEx Corp. (b) | 31,392 | 4,112,352 | ||||||
Hertz Global Holdings, Inc. * | 25,500 | 585,480 | ||||||
5,263,236 | ||||||||
Utilities 1.5% | ||||||||
American Electric Power Co., Inc. | 18,000 | 843,120 | ||||||
CenterPoint Energy, Inc. | 49,000 | 1,205,400 | ||||||
The AES Corp. (b) | 63,528 | 895,110 | ||||||
2,943,630 | ||||||||
Total Common Stock | ||||||||
(Cost $145,749,482) | 191,041,380 | |||||||
Other Investment Company 0.6% of net assets | ||||||||
Money Market Fund 0.6% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (a) | 1,130,585 | 1,130,585 | ||||||
Total Other Investment Company | ||||||||
(Cost $1,130,585) | 1,130,585 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $146,939,177 and the unrealized appreciation and depreciation were $46,153,261 and ($920,473), respectively, with a net unrealized appreciation of $45,232,788.
* | Non-income producing security. | |
(a) | The rate shown is the 7-day yield. | |
(b) | All or a portion of this security is held as collateral for short sales |
See financial notes 59
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Short Sales 39.7% of net assets | ||||||||
Automobiles & Components 1.1% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 5,200 | 96,772 | ||||||
Dorman Products, Inc. | 18,700 | 909,007 | ||||||
Thor Industries, Inc. | 20,300 | 1,177,603 | ||||||
2,183,382 | ||||||||
Banks 4.9% | ||||||||
Bank of the Ozarks, Inc. | 32,800 | 1,622,944 | ||||||
BankUnited, Inc. | 46,800 | 1,440,036 | ||||||
M&T Bank Corp. | 4,800 | 540,144 | ||||||
New York Community Bancorp, Inc. | 77,400 | 1,254,654 | ||||||
Signature Bank * | 29,900 | 3,044,418 | ||||||
Texas Capital Bancshares, Inc. * | 11,500 | 598,575 | ||||||
Valley National Bancorp | 103,835 | 1,012,391 | ||||||
9,513,162 | ||||||||
Capital Goods 3.0% | ||||||||
Deere & Co. | 400 | 32,736 | ||||||
DigitalGlobe, Inc. * | 20,700 | 658,674 | ||||||
Generac Holdings, Inc. | 1,600 | 78,960 | ||||||
Joy Global, Inc. | 700 | 39,725 | ||||||
Navistar International Corp. * | 23,200 | 838,912 | ||||||
Proto Labs, Inc. * | 13,080 | 1,096,889 | ||||||
Simpson Manufacturing Co., Inc. | 8,000 | 283,600 | ||||||
TransDigm Group, Inc. | 18,800 | 2,733,708 | ||||||
5,763,204 | ||||||||
Commercial & Professional Supplies 2.2% | ||||||||
Copart, Inc. * | 28,985 | 934,187 | ||||||
Stericycle, Inc. * | 11,400 | 1,324,680 | ||||||
The Advisory Board Co. * | 14,400 | 987,840 | ||||||
Waste Connections, Inc. | 24,200 | 1,034,308 | ||||||
4,281,015 | ||||||||
Consumer Durables & Apparel 0.6% | ||||||||
Garmin Ltd. | 3,000 | 140,250 | ||||||
Tempur-Pedic International, Inc. * | 24,600 | 943,410 | ||||||
1,083,660 | ||||||||
Diversified Financials 2.5% | ||||||||
CBOE Holdings, Inc. | 36,500 | 1,770,250 | ||||||
CME Group, Inc. | 12,700 | 942,467 | ||||||
Federated Investors, Inc., Class B | 41,700 | 1,130,904 | ||||||
Walter Investment Management Corp. * | 23,900 | 902,703 | ||||||
4,746,324 | ||||||||
Energy 3.7% | ||||||||
Bonanza Creek Energy, Inc. * | 26,700 | 1,349,418 | ||||||
Cheniere Energy, Inc. * | 43,300 | 1,723,340 | ||||||
CVR Energy, Inc. | 13,000 | 516,360 | ||||||
FMC Technologies, Inc. * | 6,400 | 323,520 | ||||||
Gulfport Energy Corp. * | 8,400 | 492,996 | ||||||
Kodiak Oil & Gas Corp. * | 98,484 | 1,277,337 | ||||||
PDC Energy, Inc. * | 5,400 | 366,174 | ||||||
Range Resources Corp. | 7,400 | 560,254 | ||||||
Western Refining, Inc. | 17,800 | 574,406 | ||||||
7,183,805 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
Sysco Corp. | 23,900 | 772,926 | ||||||
The Fresh Market, Inc. * | 12,000 | 610,920 | ||||||
1,383,846 | ||||||||
Food, Beverage & Tobacco 1.9% | ||||||||
B&G Foods, Inc. | 33,600 | 1,137,360 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 1,700 | 117,555 | ||||||
Snyders-Lance, Inc. | 3,200 | 95,968 | ||||||
The Hain Celestial Group, Inc. * | 28,100 | 2,338,763 | ||||||
3,689,646 | ||||||||
Health Care Equipment & Services 1.4% | ||||||||
Acadia Healthcare Co., Inc. * | 17,306 | 750,388 | ||||||
DexCom, Inc. * | 27,083 | 778,095 | ||||||
Edwards Lifesciences Corp. * | 4,200 | 273,798 | ||||||
HCA Holdings, Inc. | 2,300 | 108,422 | ||||||
Intuitive Surgical, Inc. * | 1,600 | 594,400 | ||||||
Quest Diagnostics, Inc. | 2,700 | 161,757 | ||||||
2,666,860 | ||||||||
Insurance 4.0% | ||||||||
Hilltop Holdings, Inc. * | 62,800 | 1,088,952 | ||||||
Mercury General Corp. | 31,900 | 1,485,264 | ||||||
PartnerRe Ltd. | 22,300 | 2,234,683 | ||||||
RLI Corp. | 23,200 | 2,191,936 | ||||||
Validus Holdings Ltd. | 15,000 | 592,200 | ||||||
7,593,035 | ||||||||
Materials 2.6% | ||||||||
Airgas, Inc. | 800 | 87,256 | ||||||
Albemarle Corp. | 19,500 | 1,290,705 | ||||||
Axiall Corp. | 22,300 | 867,247 | ||||||
Eagle Materials, Inc. | 11,800 | 885,118 | ||||||
KapStone Paper & Packaging Corp. | 4,100 | 213,036 | ||||||
Newmont Mining Corp. | 1,900 | 51,794 | ||||||
Southern Copper Corp. | 28,885 | 807,336 | ||||||
The Mosaic Co. | 15,400 | 706,090 | ||||||
4,908,582 | ||||||||
Media 1.9% | ||||||||
Cablevision Systems Corp., Class A | 26,500 | 412,075 | ||||||
DISH Network Corp., Class A | 12,700 | 612,140 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 39,400 | 1,349,056 | ||||||
Loral Space & Communications, Inc. | 5,400 | 385,398 | ||||||
Sirius XM Radio, Inc. | 223,300 | 841,841 | ||||||
3,600,510 |
60 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
Akorn, Inc. * | 43,800 | 895,272 | ||||||
Mettler-Toledo International, Inc. * | 3,400 | 841,364 | ||||||
1,736,636 | ||||||||
Real Estate 0.7% | ||||||||
American Tower Corp. | 3,300 | 261,855 | ||||||
Rayonier, Inc. | 12,900 | 606,558 | ||||||
Realty Income Corp. | 10,900 | 453,985 | ||||||
1,322,398 | ||||||||
Retailing 1.2% | ||||||||
AutoZone, Inc. * | 2,600 | 1,130,194 | ||||||
Lithia Motors, Inc., Class A | 5,500 | 345,675 | ||||||
Restoration Hardware Holdings, Inc. * | 9,300 | 648,582 | ||||||
TripAdvisor, Inc. * | 2,800 | 231,588 | ||||||
2,356,039 | ||||||||
Software & Services 3.0% | ||||||||
Booz Allen Hamilton Holding Corp. | 2,800 | 55,440 | ||||||
Cognizant Technology Solutions Corp., Class A * | 2,100 | 182,553 | ||||||
Concur Technologies, Inc. * | 12,500 | 1,307,500 | ||||||
FactSet Research Systems, Inc. | 2,800 | 305,032 | ||||||
Intuit, Inc. | 5,900 | 421,319 | ||||||
LinkedIn Corp., Class A * | 2,712 | 606,593 | ||||||
NetSuite, Inc. * | 3,200 | 322,816 | ||||||
Pandora Media, Inc. * | 30,516 | 766,867 | ||||||
Paychex, Inc. | 29,600 | 1,250,896 | ||||||
Qlik Technologies, Inc. * | 16,100 | 407,974 | ||||||
Visa, Inc., Class A | 700 | 137,669 | ||||||
5,764,659 | ||||||||
Technology Hardware & Equipment 3.4% | ||||||||
ADTRAN, Inc. | 23,500 | 551,780 | ||||||
F5 Networks, Inc. * | 1,600 | 130,416 | ||||||
IPG Photonics Corp. | 23,200 | 1,537,464 | ||||||
National Instruments Corp. | 70,900 | 2,059,645 | ||||||
OSI Systems, Inc. * | 11,200 | 815,808 | ||||||
Palo Alto Networks, Inc. * | 13,400 | 564,944 | ||||||
QUALCOMM, Inc. | 500 | 34,735 | ||||||
Stratasys Ltd. * | 8,200 | 928,486 | ||||||
6,623,278 | ||||||||
Total Short Sales | ||||||||
(Proceeds $63,851,281) | 76,400,041 | |||||||
End of Short Sale Positions. |
* | Non-income producing security |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $191,041,380 | $— | $— | $191,041,380 | ||||||||||||
Other Investment Company1 | 1,130,585 | — | — | 1,130,585 | ||||||||||||
Total | $192,171,965 | $— | $— | $192,171,965 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Short Sales1 | ($76,400,041 | ) | $— | $— | ($76,400,041 | ) |
1 | As categorized in Portfolio Holdings. |
The funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1 and Level 2 for the period ended October 31, 2013.
See financial notes 61
Table of Contents
Schwab Hedged Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $146,880,067) | $192,171,965 | |||||
Deposits with broker for short sales | 76,761,551 | |||||
Receivables: | ||||||
Fund shares sold | 120,834 | |||||
Dividends | 103,825 | |||||
Prepaid expenses | + | 7,249 | ||||
Total assets | 269,165,424 | |||||
Liabilities | ||||||
Securities sold short, at value (proceeds $63,851,281) | 76,400,041 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 16,579 | |||||
Shareholder service fees | 5,410 | |||||
Dividends on short sales | 21,110 | |||||
Fund shares redeemed | 11,851 | |||||
Accrued expenses | + | 39,821 | ||||
Total liabilities | 76,494,812 | |||||
Net Assets | ||||||
Total assets | 269,165,424 | |||||
Total liabilities | − | 76,494,812 | ||||
Net assets | $192,670,612 | |||||
Net Assets by Source | ||||||
Capital received from investors | 146,472,775 | |||||
Net investment loss | (1,708,651 | ) | ||||
Net realized capital gains | 15,163,350 | |||||
Net unrealized capital appreciation | 32,743,138 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$192,670,612 | 10,347,975 | $18.62 |
62 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends | $3,859,442 | |||||
Interest | + | 291 | ||||
Total investment income | 3,859,733 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,043,201 | |||||
Shareholder service fees | 456,665 | |||||
Dividends on short sales | 1,932,802 | |||||
Stock loan fees on short sales | 299,142 | |||||
Professional fees | 41,026 | |||||
Portfolio accounting fees | 38,681 | |||||
Transfer agent fees | 34,633 | |||||
Registration fees | 22,616 | |||||
Shareholder reports | 15,511 | |||||
Custodian fees | 13,865 | |||||
Independent trustees’ fees | 8,387 | |||||
Interest expense | 966 | |||||
Other expenses | + | 5,262 | ||||
Total expenses | 4,912,757 | |||||
Expense reduction by CSIM and its affiliates | − | 91,792 | ||||
Net expenses | − | 4,820,965 | ||||
Net investment loss | (961,232 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 28,551,410 | |||||
Net realized gains on futures contracts | 36,025 | |||||
Net realized losses on short sales | + | (10,784,622 | ) | |||
Net realized gains | 17,802,813 | |||||
Net change in unrealized appreciation on investments | 22,075,480 | |||||
Net change in unrealized depreciation on short sales | + | (13,792,904 | ) | |||
Net change in unrealized appreciation | + | 8,282,576 | ||||
Net realized and unrealized gains | 26,085,389 | |||||
Increase in net assets resulting from operations | $25,124,157 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment loss | ($961,232 | ) | ($993,211 | ) | ||||||
Net realized gains | 17,802,813 | 15,666,186 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 8,282,576 | (705,355 | ) | ||||||
Increase in net assets from operations | $25,124,157 | $13,967,620 |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,580,370 | $44,945,152 | 2,083,203 | $33,255,732 | ||||||||||||||
Shares redeemed | + | (4,113,122 | ) | (71,764,454 | ) | (5,584,279 | ) | (88,481,803 | ) | |||||||||
Net transactions in fund shares | (1,532,752 | ) | ($26,819,302 | ) | (3,501,076 | ) | ($55,226,071 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 11,880,727 | $194,365,757 | 15,381,803 | $235,624,208 | ||||||||||||||
Total decrease | + | (1,532,752 | ) | (1,695,145 | ) | (3,501,076 | ) | (41,258,451 | ) | |||||||||
End of period | 10,347,975 | $192,670,612 | 11,880,727 | $194,365,757 | ||||||||||||||
Net investment loss | ($1,708,651 | ) | ($900,099 | ) |
64 See financial notes
Table of Contents
Schwab Financial Services Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.66 | 9.17 | 9.74 | 8.77 | 9.05 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.11 | 0.08 | 0.05 | 0.04 | 0.08 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.08 | 1.46 | (0.58 | ) | 0.99 | (0.21 | ) | |||||||||||||||
Total from investment operations | 3.19 | 1.54 | (0.53 | ) | 1.03 | (0.13 | ) | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.09 | ) | (0.05 | ) | (0.04 | ) | (0.06 | ) | (0.15 | ) | ||||||||||||
Net asset value at end of period | 13.76 | 10.66 | 9.17 | 9.74 | 8.77 | |||||||||||||||||
Total return (%) | 30.20 | 16.92 | (5.51 | ) | 11.79 | (1.10 | ) | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.94 | 0.94 | 0.93 | 1 | 0.95 | 2 | 0.96 | 3 | ||||||||||||||
Gross operating expenses | 1.03 | 1.10 | 1.06 | 1.04 | 0.99 | |||||||||||||||||
Net investment income (loss) | 0.91 | 0.78 | 0.45 | 0.37 | 0.91 | |||||||||||||||||
Portfolio turnover rate | 74 | 84 | 77 | 54 | 47 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 66 | 47 | 40 | 52 | 64 |
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 ratio.
See financial notes 65
Table of Contents
Schwab Financial Services Fund
Portfolio Holdings as of October 31, 2013
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 | 51,812,024 | 65,486,823 | ||||||||
0 | .7% | Short-Term Investments | 438,584 | 438,584 | ||||||||
100 | .0% | Total Investments | 52,250,608 | 65,925,407 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 4,475 | |||||||||
100 | .0% | Total Net Assets | 65,929,882 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.3% of net assets | ||||||||
Banks 21.9% | ||||||||
Berkshire Hills Bancorp, Inc. | 5,100 | 129,387 | ||||||
Chemical Financial Corp. | 11,500 | 336,835 | ||||||
Fifth Third Bancorp | 33,700 | 641,311 | ||||||
First Defiance Financial Corp. | 8,700 | 224,634 | ||||||
First Interstate BancSystem, Inc. | 11,500 | 288,765 | ||||||
Huntington Bancshares, Inc. | 69,000 | 607,200 | ||||||
Ocwen Financial Corp. * | 17,000 | 955,910 | ||||||
Regions Financial Corp. | 82,500 | 794,475 | ||||||
S&T Bancorp, Inc. | 5,100 | 125,052 | ||||||
SunTrust Banks, Inc. | 4,400 | 148,016 | ||||||
TFS Financial Corp. * | 16,200 | 196,668 | ||||||
The PNC Financial Services Group, Inc. | 26,900 | 1,977,957 | ||||||
U.S. Bancorp | 5,700 | 212,952 | ||||||
United Community Banks, Inc. * | 25,400 | 395,986 | ||||||
Wells Fargo & Co. | 135,000 | 5,763,150 | ||||||
WSFS Financial Corp. | 16,000 | 1,120,160 | ||||||
Zions Bancorp | 18,300 | 519,171 | ||||||
14,437,629 | ||||||||
Diversified Financials 45.5% | ||||||||
Affiliated Managers Group, Inc. * | 6,200 | 1,224,128 | ||||||
American Express Co. | 34,100 | 2,789,380 | ||||||
Bank of America Corp. | 192,100 | 2,681,716 | ||||||
Berkshire Hathaway, Inc., Class B * | 29,100 | 3,348,828 | ||||||
BlackRock, Inc. | 3,100 | 932,511 | ||||||
Capital One Financial Corp. | 20,200 | 1,387,134 | ||||||
Citigroup, Inc. | 62,400 | 3,043,872 | ||||||
FBR & Co. * | 5,800 | 153,700 | ||||||
FXCM, Inc., Class A | 22,300 | 365,497 | ||||||
GFI Group, Inc. | 76,600 | 265,802 | ||||||
Investment Technology Group, Inc. * | 42,200 | 676,044 | ||||||
JPMorgan Chase & Co. | 99,900 | 5,148,846 | ||||||
Morgan Stanley | 51,700 | 1,485,341 | ||||||
Nelnet, Inc., Class A | 700 | 29,841 | ||||||
SEI Investments Co. | 14,200 | 471,298 | ||||||
SLM Corp. | 37,100 | 941,227 | ||||||
State Street Corp. | 24,100 | 1,688,687 | ||||||
The Bank of New York Mellon Corp. | 62,400 | 1,984,320 | ||||||
The Goldman Sachs Group, Inc. | 8,500 | 1,367,310 | ||||||
29,985,482 | ||||||||
Insurance 15.9% | ||||||||
Aflac, Inc. | 23,900 | 1,553,022 | ||||||
American International Group, Inc. | 39,000 | 2,014,350 | ||||||
Assurant, Inc. | 4,000 | 233,920 | ||||||
HCC Insurance Holdings, Inc. | 24,200 | 1,104,730 | ||||||
MetLife, Inc. | 16,600 | 785,346 | ||||||
Prudential Financial, Inc. | 10,900 | 887,151 | ||||||
Reinsurance Group of America, Inc. | 15,100 | 1,074,818 | ||||||
The Travelers Cos., Inc. | 20,000 | 1,726,000 | ||||||
Torchmark Corp. | 14,000 | 1,020,040 | ||||||
XL Group plc | 2,200 | 67,254 | ||||||
10,466,631 | ||||||||
Real Estate 16.0% | ||||||||
Apartment Investment & Management Co., Class A | 33,700 | 942,926 | ||||||
Ashford Hospitality Trust | 20,900 | 272,954 | ||||||
Brandywine Realty Trust | 29,600 | 421,208 | ||||||
CBRE Group, Inc., Class A * | 48,100 | 1,117,363 | ||||||
Chatham Lodging Trust | 5,100 | 96,186 | ||||||
Chesapeake Lodging Trust | 9,200 | 216,844 | ||||||
DCT Industrial Trust, Inc. | 68,200 | 528,550 | ||||||
Duke Realty Corp. | 73,400 | 1,216,238 | ||||||
Host Hotels & Resorts, Inc. | 54,700 | 1,014,685 | ||||||
Inland Real Estate Corp. | 12,300 | 131,487 | ||||||
Liberty Property Trust | 25,900 | 963,221 | ||||||
One Liberty Properties, Inc. | 2,800 | 59,192 | ||||||
Prologis, Inc. | 38,000 | 1,518,100 | ||||||
Retail Properties of America, Inc., Class A | 11,100 | 158,841 | ||||||
RLJ Lodging Trust | 49,100 | 1,240,266 | ||||||
Saul Centers, Inc. | 4,100 | 192,700 | ||||||
Sovran Self Storage, Inc. | 4,400 | 336,556 | ||||||
Urstadt Biddle Properties, Inc., Class A | 8,600 | 169,764 | ||||||
10,597,081 | ||||||||
Total Common Stock | ||||||||
(Cost $51,812,024) | 65,486,823 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.7% of net assets | ||||||||
Time Deposit 0.7% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/13 | 426,584 | 426,584 |
66 See financial notes
Table of Contents
Schwab Financial Services Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bills | ||||||||
0.01%, 12/19/13 (a) | 12,000 | 12,000 | ||||||
Total Short-Term Investments | ||||||||
(Cost $438,584) | 438,584 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $52,261,658 and the unrealized appreciation and depreciation were $13,786,008 and ($122,259), respectively, with a net unrealized appreciation of $13,663,749.
* | Non-income producing security. | |
(a) | The rate shown is the purchase yield. |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $65,486,823 | $— | $— | $65,486,823 | ||||||||||||
Short-Term Investments1 | — | 438,584 | — | 438,584 | ||||||||||||
Total | $65,486,823 | $438,584 | $— | $65,925,407 | ||||||||||||
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, 2013.
See financial notes 67
Table of Contents
Schwab Financial Services Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $52,250,608) | $65,925,407 | |||||
Receivables: | ||||||
Fund shares sold | 63,625 | |||||
Dividends | 37,179 | |||||
Receivable from investment adviser | 133 | |||||
Prepaid expenses | + | 1,611 | ||||
Total assets | 66,027,955 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 2,837 | |||||
Shareholder service fees | 2,603 | |||||
Fund shares redeemed | 63,845 | |||||
Accrued expenses | + | 28,788 | ||||
Total liabilities | 98,073 | |||||
Net Assets | ||||||
Total assets | 66,027,955 | |||||
Total liabilities | − | 98,073 | ||||
Net assets | $65,929,882 | |||||
Net Assets by Source | ||||||
Capital received from investors | 83,406,536 | |||||
Net investment income not yet distributed | 338,279 | |||||
Net realized capital losses | (31,489,732 | ) | ||||
Net unrealized capital appreciation | 13,674,799 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$65,929,882 | 4,790,851 | $13.76 |
68 See financial notes
Table of Contents
Schwab Financial Services Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends | $1,058,193 | |||||
Interest | 354 | |||||
Securities on loan | + | 180 | ||||
Total investment income | 1,058,727 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 309,484 | |||||
Shareholder service fees | 137,339 | |||||
Portfolio accounting fees | 36,575 | |||||
Transfer agent fees | 32,761 | |||||
Professional fees | 28,838 | |||||
Registration fees | 18,382 | |||||
Shareholder reports | 14,777 | |||||
Independent trustees’ fees | 7,355 | |||||
Custodian fees | 4,911 | |||||
Other expenses | + | 2,119 | ||||
Total expenses | 592,541 | |||||
Expense reduction by CSIM and its affiliates | − | 53,811 | ||||
Net expenses | − | 538,730 | ||||
Net investment income | 519,997 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 4,238,876 | |||||
Net realized gains on futures contracts | + | 64,017 | ||||
Net realized gains | 4,302,893 | |||||
Net change in unrealized appreciation on investments | 9,519,876 | |||||
Net change in unrealized appreciation on futures contracts | + | 20,168 | ||||
Net change in unrealized appreciation | + | 9,540,044 | ||||
Net realized and unrealized gains | 13,842,937 | |||||
Increase in net assets resulting from operations | $14,362,934 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $519,997 | $341,423 | ||||||||
Net realized gains | 4,302,893 | 1,502,885 | ||||||||
Net change in unrealized appreciation | + | 9,540,044 | 4,694,094 | |||||||
Increase in net assets from operations | 14,362,934 | 6,538,402 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($406,901 | ) | ($224,748 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,625,426 | $20,364,480 | 1,195,666 | $12,102,193 | ||||||||||||||
Shares reinvested | 33,206 | 353,309 | 21,793 | 196,795 | ||||||||||||||
Shares redeemed | + | (1,249,074 | ) | (15,437,977 | ) | (1,227,292 | ) | (12,174,120 | ) | |||||||||
Net transactions in fund shares | 409,558 | $5,279,812 | (9,833 | ) | $124,868 | |||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 4,381,293 | $46,694,037 | 4,391,126 | $40,255,515 | ||||||||||||||
Total increase or decrease | + | 409,558 | 19,235,845 | (9,833 | ) | 6,438,522 | ||||||||||||
End of period | 4,790,851 | $65,929,882 | 4,381,293 | $46,694,037 | ||||||||||||||
Net investment income not yet distributed | $338,279 | $222,352 |
70 See financial notes
Table of Contents
Schwab Health Care Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 20.59 | 17.29 | 15.48 | 13.41 | 12.55 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.27 | 0.15 | 0.19 | 0.13 | |||||||||||||||||
Net realized and unrealized gains (losses) | 6.26 | 3.18 | 1.85 | 2.01 | 0.82 | |||||||||||||||||
Total from investment operations | 6.48 | 3.45 | 2.00 | 2.20 | 0.95 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.33 | ) | (0.15 | ) | (0.19 | ) | (0.13 | ) | (0.09 | ) | ||||||||||||
Distributions from net realized gains | (2.17 | ) | — | — | — | — | ||||||||||||||||
Total distributions | (2.50 | ) | (0.15 | ) | (0.19 | ) | (0.13 | ) | (0.09 | ) | ||||||||||||
Net asset value at end of period | 24.57 | 20.59 | 17.29 | 15.48 | 13.41 | |||||||||||||||||
Total return (%) | 35.46 | 20.10 | 13.00 | 16.49 | 7.65 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.82 | 0.82 | 0.81 | 1 | 0.82 | 0.83 | 2 | |||||||||||||||
Gross operating expenses | 0.83 | 0.85 | 0.85 | 0.86 | 0.85 | |||||||||||||||||
Net investment income (loss) | 1.06 | 1.44 | 0.85 | 1.14 | 0.88 | |||||||||||||||||
Portfolio turnover rate | 54 | 60 | 24 | 37 | 36 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 816 | 511 | 414 | 410 | 430 |
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 ratio.
See financial notes 71
Table of Contents
Schwab Health Care Fund
Portfolio Holdings as of October 31, 2013
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 | 611,966,048 | 803,168,677 | ||||||||
1 | .3% | Short-Term Investments | 10,655,479 | 10,655,479 | ||||||||
99 | .7% | Total Investments | 622,621,527 | 813,824,156 | ||||||||
0 | .2% | Collateral Invested for Securities on Loan | 1,454,088 | 1,454,088 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 1,114,511 | |||||||||
100 | .0% | Net Assets | 816,392,755 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.4% of net assets | ||||||||
Australia 2.2% | ||||||||
Health Care Equipment & Services 0.4% | ||||||||
Primary Health Care Ltd. | 100,000 | 466,542 | ||||||
Sonic Healthcare Ltd. | 201,393 | 3,074,308 | ||||||
3,540,850 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.8% | ||||||||
CSL Ltd. | 222,874 | 14,650,600 | ||||||
18,191,450 | ||||||||
France 1.2% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.2% | ||||||||
Sanofi | 91,404 | 9,745,780 | ||||||
Germany 1.6% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.6% | ||||||||
Merck KGaA | 79,367 | 13,202,743 | ||||||
Israel 0.6% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
Teva Pharmaceutical Industries Ltd. | 117,520 | 4,366,855 | ||||||
Japan 1.0% | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
BML, Inc. | 6,600 | 225,504 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.0% | ||||||||
Kissei Pharmaceutical Co., Ltd. | 9,500 | 219,923 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 57,000 | 629,563 | ||||||
Mitsubishi Tanabe Pharma Corp. | 412,200 | 5,813,549 | ||||||
Takeda Pharmaceutical Co., Ltd. | 28,800 | 1,372,451 | ||||||
8,035,486 | ||||||||
8,260,990 | ||||||||
Malaysia 0.0% | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Kossan Rubber Industries | 64,400 | 130,410 | ||||||
Republic of Korea 0.1% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Daewoong Pharmaceutical Co., Ltd. | 10,497 | 825,683 | ||||||
South Africa 0.1% | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Mediclinic International Ltd. | 100,000 | 753,593 | ||||||
Sweden 0.1% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Meda AB, A Shares | 97,925 | 1,098,864 | ||||||
Switzerland 11.1% | ||||||||
Health Care Equipment & Services 0.4% | ||||||||
Straumann Holding AG - Reg’d | 15,416 | 3,064,098 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 10.7% | ||||||||
Actelion Ltd. - Reg’d * | 234,377 | 18,133,875 | ||||||
BB Biotech AG - Reg’d * | 10,712 | 1,604,833 | ||||||
Lonza Group AG - Reg’d * | 72,350 | 6,458,172 | ||||||
Novartis AG - Reg’d | 343,944 | 26,697,816 | ||||||
Roche Holding AG | 124,268 | 34,364,500 | ||||||
87,259,196 | ||||||||
90,323,294 | ||||||||
United Kingdom 2.0% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.0% | ||||||||
AstraZeneca plc | 142,499 | 7,543,915 | ||||||
GlaxoSmithKline plc | 135,000 | 3,558,918 | ||||||
Shire plc | 117,716 | 5,219,572 | ||||||
16,322,405 | ||||||||
United States 78.4% | ||||||||
Health Care Equipment & Services 29.0% | ||||||||
Abbott Laboratories | 697,500 | 25,493,625 | ||||||
Alere, Inc. * | 206,400 | 6,961,872 | ||||||
Align Technology, Inc. * | 12,100 | 690,426 | ||||||
Alliance HealthCare Services, Inc. * | 17,700 | 446,217 | ||||||
AMN Healthcare Services, Inc. * | 60,000 | 744,000 | ||||||
AmSurg Corp. * | 117,600 | 5,043,864 | ||||||
AngioDynamics, Inc. * | 58,500 | 919,620 | ||||||
Anika Therapeutics, Inc. * | 56,100 | 1,675,707 | ||||||
ArthroCare Corp. * | 26,000 | 973,440 | ||||||
Baxter International, Inc. | 29,100 | 1,916,817 | ||||||
Becton, Dickinson & Co. | 92,000 | 9,671,960 | ||||||
Boston Scientific Corp. * | 1,375,000 | 16,073,750 | ||||||
CareFusion Corp. * | 470,600 | 18,245,162 |
72 See financial notes
Table of Contents
Schwab Health Care Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Cigna Corp. | 115,400 | 8,883,492 | ||||||
CONMED Corp. | 70,500 | 2,557,035 | ||||||
CorVel Corp. * | 27,100 | 1,127,360 | ||||||
Covidien plc | 161,000 | 10,321,710 | ||||||
Express Scripts Holding Co. * | 62,800 | 3,926,256 | ||||||
Five Star Quality Care, Inc. * | 58,200 | 295,074 | ||||||
Greatbatch, Inc. * | 111,928 | 4,266,695 | ||||||
Henry Schein, Inc. * | 56,000 | 6,296,080 | ||||||
Hill-Rom Holdings, Inc. | 167,000 | 6,895,430 | ||||||
Hologic, Inc. * | 72,700 | 1,627,753 | ||||||
Humana, Inc. | 30,000 | 2,764,500 | ||||||
Kindred Healthcare, Inc. | 85,000 | 1,179,800 | ||||||
Lifepoint Hospitals, Inc. * | 148,200 | 7,653,048 | ||||||
Magellan Health Services, Inc. * | 51,900 | 3,046,530 | ||||||
McKesson Corp. | 88,800 | 13,882,992 | ||||||
MedAssets, Inc. * | 451,200 | 10,391,136 | ||||||
MEDNAX, Inc. * | 8,700 | 948,474 | ||||||
Medtronic, Inc. | 554,000 | 31,799,600 | ||||||
NuVasive, Inc. * | 87,900 | 2,793,462 | ||||||
Omnicell, Inc. * | 50,000 | 1,153,500 | ||||||
St. Jude Medical, Inc. | 84,300 | 4,837,977 | ||||||
STERIS Corp. | 111,000 | 5,016,090 | ||||||
Stryker Corp. | 25,000 | 1,846,500 | ||||||
Symmetry Medical, Inc. * | 100,000 | 810,000 | ||||||
The Providence Service Corp. * | 49,200 | 1,470,588 | ||||||
UnitedHealth Group, Inc. | 60,900 | 4,157,034 | ||||||
Universal Health Services, Inc., Class B | 32,600 | 2,626,256 | ||||||
VCA Antech, Inc. * | 17,700 | 503,565 | ||||||
WellPoint, Inc. | 56,800 | 4,816,640 | ||||||
236,751,037 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 49.4% | ||||||||
AbbVie, Inc. | 753,900 | 36,526,455 | ||||||
Albany Molecular Research, Inc. * | 12,000 | 157,200 | ||||||
Allergan, Inc. | 35,000 | 3,171,350 | ||||||
AMAG Pharmaceuticals, Inc. * | 73,500 | 1,983,030 | ||||||
Amgen, Inc. | 338,000 | 39,208,000 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 61,000 | 7,534,720 | ||||||
Biogen Idec, Inc. * | 115,100 | 28,106,269 | ||||||
Bristol-Myers Squibb Co. | 505,600 | 26,554,112 | ||||||
Celgene Corp. * | 221,400 | 32,875,686 | ||||||
Cubist Pharmaceuticals, Inc. * | 17,000 | 1,054,000 | ||||||
Eli Lilly & Co. | 435,900 | 21,716,538 | ||||||
Emergent Biosolutions, Inc. * | 57,800 | 1,128,834 | ||||||
Forest Laboratories, Inc. * | 67,400 | 3,169,822 | ||||||
Gilead Sciences, Inc. * | 220,000 | 15,617,800 | ||||||
ICON plc * | 128,000 | 5,176,320 | ||||||
Impax Laboratories, Inc. * | 317,400 | 6,430,524 | ||||||
Johnson & Johnson | 620,100 | 57,427,461 | ||||||
Lannett Co., Inc. * | 37,000 | 873,570 | ||||||
Merck & Co., Inc. | 717,500 | 32,352,075 | ||||||
Mylan, Inc. * | 149,100 | 5,646,417 | ||||||
PAREXEL International Corp. * | 115,100 | 5,261,221 | ||||||
PDL Biopharma, Inc. (a) | 181,200 | 1,465,908 | ||||||
Pfizer, Inc. | 1,882,400 | 57,752,032 | ||||||
Sagent Pharmaceuticals, Inc. * | 109,200 | 2,368,548 | ||||||
Salix Pharmaceuticals Ltd. * | 98,900 | 7,096,075 | ||||||
Santarus, Inc. * | 58,000 | 1,353,140 | ||||||
Threshold Pharmaceuticals, Inc. * | 238,700 | 1,035,958 | ||||||
Vanda Pharmaceuticals, Inc. * | 21,300 | 152,508 | ||||||
403,195,573 | ||||||||
639,946,610 | ||||||||
Total Common Stock | ||||||||
(Cost $611,966,048) | 803,168,677 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 1.3% of net assets | ||||||||
Time Deposit 1.3% | ||||||||
JPMorgan Chase | ||||||||
US Dollar | ||||||||
0.03%, 11/01/13 | 10,455,481 | 10,455,481 | ||||||
U.S. Treasury Obligations 0.0% | ||||||||
U.S. Treasury Bills | ||||||||
0.01%, 12/19/13 (b)(c) | 10,000 | 9,999 | ||||||
0.02%, 12/19/13 (b)(c) | 10,000 | 10,000 | ||||||
0.06%, 12/19/13 (b)(c) | 180,000 | 179,999 | ||||||
199,998 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $10,655,479) | 10,655,479 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.2% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (d) | 1,454,088 | 1,454,088 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $1,454,088) | 1,454,088 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, the tax basis cost of the fund’s investments was $622,988,352 and the unrealized appreciation and depreciation were $192,120,890 and ($1,285,086), respectively, with a net unrealized appreciation of $190,835,804.
See financial notes 73
Table of Contents
Schwab Health Care Fund
Portfolio Holdings continued
At 10/31/13, the values of certain foreign securities held by the fund aggregating $163,091,657 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. Securities on loan were valued at $1,392,613. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. | |
(d) | The rate shown is the 7-day yield. |
Reg’d — | Registered |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 47 | 4,114,850 | 170,638 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $640,077,020 | $— | $— | $640,077,020 | ||||||||||||
Australia1 | — | 18,191,450 | — | 18,191,450 | ||||||||||||
France1 | — | 9,745,780 | — | 9,745,780 | ||||||||||||
Germany1 | — | 13,202,743 | — | 13,202,743 | ||||||||||||
Israel1 | — | 4,366,855 | — | 4,366,855 | ||||||||||||
Japan1 | — | 8,260,990 | — | 8,260,990 | ||||||||||||
Republic of Korea1 | — | 825,683 | — | 825,683 | ||||||||||||
South Africa1 | — | 753,593 | — | 753,593 | ||||||||||||
Sweden1 | — | 1,098,864 | — | 1,098,864 | ||||||||||||
Switzerland1 | — | 90,323,294 | — | 90,323,294 | ||||||||||||
United Kingdom1 | — | 16,322,405 | — | 16,322,405 | ||||||||||||
Short-Term Investments1 | — | 10,655,479 | — | 10,655,479 | ||||||||||||
Total | $640,077,020 | $173,747,136 | $— | $813,824,156 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $1,454,088 | $— | $— | $1,454,088 | ||||||||||||
Futures Contract2 | 170,638 | — | — | 170,638 |
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, 2013.
74 See financial notes
Table of Contents
Schwab Health Care Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $622,621,527) including securities on loan of $1,392,613 | $813,824,156 | |||||
Foreign currency, at value (cost $19) | 19 | |||||
Collateral invested for securities on loan | 1,454,088 | |||||
Receivables: | ||||||
Fund shares sold | 1,873,811 | |||||
Dividends | 759,949 | |||||
Foreign tax reclaims | 280,516 | |||||
Income from securities on loan | 1,776 | |||||
Interest | 9 | |||||
Prepaid expenses | + | 14,243 | ||||
Total assets | 818,208,567 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 1,454,088 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 36,078 | |||||
Shareholder service fees | 28,679 | |||||
Independent trustees’ fees | 1 | |||||
Fund shares redeemed | 199,842 | |||||
Variation margin on futures contracts | 22,560 | |||||
Accrued expenses | + | 74,564 | ||||
Total liabilities | 1,815,812 | |||||
Net Assets | ||||||
Total assets | 818,208,567 | |||||
Total liabilities | − | 1,815,812 | ||||
Net assets | $816,392,755 | |||||
Net Assets by Source | ||||||
Capital received from investors | 544,066,325 | |||||
Net investment income not yet distributed | 5,180,420 | |||||
Net realized capital gains | 75,762,906 | |||||
Net unrealized capital appreciation | 191,383,104 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$816,392,755 | 33,230,346 | $24.57 |
See financial notes 75
Table of Contents
Schwab Health Care Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $384,555) | $12,272,692 | |||||
Interest | 4,354 | |||||
Securities on loan | + | 67,557 | ||||
Total investment income | 12,344,603 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,510,997 | |||||
Shareholder service fees | 1,580,493 | |||||
Transfer agent fees | 87,912 | |||||
Shareholder reports | 71,667 | |||||
Registration fees | 65,062 | |||||
Portfolio accounting fees | 58,736 | |||||
Custodian fees | 41,539 | |||||
Professional fees | 32,847 | |||||
Independent trustees’ fees | 11,246 | |||||
Interest expense | 205 | |||||
Other expenses | + | 12,241 | ||||
Total expenses | 5,472,945 | |||||
Expense reduction by CSIM and its affiliates | − | 94,232 | ||||
Net expenses | − | 5,378,713 | ||||
Net investment income | 6,965,890 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 74,235,214 | |||||
Net realized gains on futures contracts | 1,309,821 | |||||
Net realized losses on foreign currency transactions | + | (64,247 | ) | |||
Net realized gains | 75,480,788 | |||||
Net change in unrealized appreciation on investments | 112,398,883 | |||||
Net change in unrealized appreciation on futures contracts | 406,688 | |||||
Net change in unrealized appreciation on foreign currency translations | + | 19,694 | ||||
Net change in unrealized appreciation | + | 112,825,265 | ||||
Net realized and unrealized gains | 188,306,053 | |||||
Increase in net assets resulting from operations | $195,271,943 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $6,965,890 | $6,550,477 | ||||||||
Net realized gains | 75,480,788 | 69,963,685 | ||||||||
Net change in unrealized appreciation | + | 112,825,265 | 6,352,277 | |||||||
Increase in net assets from operations | 195,271,943 | 82,866,439 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (8,336,930 | ) | (3,529,101 | ) | ||||||
Distributions from net realized gains | + | (54,300,003 | ) | — | ||||||
Total distributions | ($62,636,933 | ) | ($3,529,101 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 11,259,344 | $243,726,416 | 4,855,710 | $92,832,540 | ||||||||||||||
Shares reinvested | 3,014,800 | 55,894,398 | 178,373 | 3,114,387 | ||||||||||||||
Shares redeemed | + | (5,854,185 | ) | (126,778,797 | ) | (4,151,453 | ) | (78,160,304 | ) | |||||||||
Net transactions in fund shares | 8,419,959 | $172,842,017 | 882,630 | $17,786,623 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 24,810,387 | $510,915,728 | 23,927,757 | $413,791,767 | ||||||||||||||
Total increase | + | 8,419,959 | 305,477,027 | 882,630 | 97,123,961 | |||||||||||||
End of period | 33,230,346 | $816,392,755 | 24,810,387 | $510,915,728 | ||||||||||||||
Net investment income not yet distributed | $5,180,420 | $6,599,289 |
See financial notes 77
Table of Contents
Schwab® International Core Equity Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 7.90 | 7.32 | 7.80 | 7.25 | 5.85 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.20 | 0.16 | 0.17 | 0.16 | 0.03 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.93 | 0.62 | (0.46 | ) | 0.57 | 1.46 | ||||||||||||||||
Total from investment operations | 2.13 | 0.78 | (0.29 | ) | 0.73 | 1.49 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.21 | ) | (0.20 | ) | (0.19 | ) | (0.18 | ) | (0.09 | ) | ||||||||||||
Net asset value at end of period | 9.82 | 7.90 | 7.32 | 7.80 | 7.25 | |||||||||||||||||
Total return (%) | 27.70 | 11.17 | (3.89 | ) | 10.09 | 25.98 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.86 | 0.86 | 0.80 | 2 | 0.87 | 3 | 0.86 | |||||||||||||||
Gross operating expenses | 1.10 | 1.16 | 1.22 | 1.27 | 1.60 | |||||||||||||||||
Net investment income (loss) | 2.40 | 2.45 | 2.32 | 1.85 | 1.19 | |||||||||||||||||
Portfolio turnover rate | 75 | 112 | 86 | 91 | 4 | 94 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 147 | 78 | 60 | 53 | 37 |
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 The ratio of net operating expenses would have been 0.86%, if a voluntary reduction of Investment Adviser fees had not been included.
3 The ratio of net operating expenses would have been 0.86%, if certain non-routine expenses had not been incurred.
4 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, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .9% | Common Stock | 120,753,916 | 144,158,873 | ||||||||
0 | .0% | Rights | 1,973 | 1,889 | ||||||||
1 | .8% | Other Investment Company | 2,687,292 | 2,687,292 | ||||||||
0 | .2% | Short-Term Investments | 239,984 | 239,984 | ||||||||
99 | .9% | Total Investments | 123,683,165 | 147,088,038 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 144,473 | |||||||||
100 | .0% | Net Assets | 147,232,511 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.9% of net assets | ||||||||
Australia 8.2% | ||||||||
Banks 1.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | 9,790 | 313,283 | ||||||
Westpac Banking Corp. | 36,647 | 1,189,824 | ||||||
1,503,107 | ||||||||
Capital Goods 0.1% | ||||||||
Seven Group Holdings Ltd. | 18,391 | 144,860 | ||||||
Diversified Financials 1.1% | ||||||||
Challenger Ltd. | 282,086 | 1,600,290 | ||||||
Energy 0.4% | ||||||||
Woodside Petroleum Ltd. | 16,649 | 610,351 | ||||||
Food & Staples Retailing 0.3% | ||||||||
Wesfarmers Ltd. * | 10,928 | 443,447 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Goodman Fielder Ltd. | 507,935 | 365,064 | ||||||
Insurance 0.9% | ||||||||
Insurance Australia Group Ltd. | 238,298 | 1,391,639 | ||||||
Materials 1.6% | ||||||||
Amcor Ltd. | 17,803 | 182,381 | ||||||
Arrium Ltd. | 247,913 | 323,915 | ||||||
BHP Billiton Ltd. | 22,271 | 787,355 | ||||||
Incitec Pivot Ltd. | 256,332 | 644,912 | ||||||
Mount Gibson Iron Ltd. | 420,032 | 352,311 | ||||||
2,290,874 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
CSL Ltd. | 16,924 | 1,112,497 | ||||||
Retailing 1.2% | ||||||||
David Jones Ltd. | 111,453 | 286,438 | ||||||
Harvey Norman Holdings Ltd. | 181,050 | 557,121 | ||||||
Myer Holdings Ltd | 161,736 | 382,244 | ||||||
Pacific Brands Ltd. | 403,210 | 268,560 | ||||||
Premier Investments Ltd. | 31,481 | 237,246 | ||||||
1,731,609 | ||||||||
Telecommunication Services 0.6% | ||||||||
Telstra Corp., Ltd. | 170,368 | 833,657 | ||||||
12,027,395 | ||||||||
Austria 0.3% | ||||||||
Banks 0.1% | ||||||||
Erste Group Bank AG | 4,445 | 156,063 | ||||||
Transportation 0.2% | ||||||||
Oesterreichische Post AG | 6,443 | 302,130 | ||||||
458,193 | ||||||||
Belgium 1.7% | ||||||||
Food & Staples Retailing 1.3% | ||||||||
Delhaize Group S.A. | 30,175 | 1,927,109 | ||||||
Materials 0.4% | ||||||||
Bekaert N.V. | 11,191 | 468,599 | ||||||
Solvay S.A. | 380 | 59,418 | ||||||
528,017 | ||||||||
2,455,126 | ||||||||
Brazil 0.2% | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Cyrela Brazil Realty S.A. Empreendimentos e Participacoes | 44,905 | 333,837 | ||||||
Canada 0.6% | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Transcontinental, Inc., Class A | 18,100 | 289,037 | ||||||
Energy 0.2% | ||||||||
Suncor Energy, Inc. | 8,000 | 290,721 | ||||||
Retailing 0.0% | ||||||||
Canadian Tire Corp., Ltd., Class A | 700 | 64,975 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
Celestica, Inc. * | 28,000 | 307,486 | ||||||
952,219 | ||||||||
Chile 0.1% | ||||||||
Utilities 0.1% | ||||||||
Enersis S.A. | 343,112 | 114,880 | ||||||
China 0.8% | ||||||||
Automobiles & Components 0.3% | ||||||||
Geely Automobile Holdings Ltd. | 800,000 | 403,269 | ||||||
Banks 0.1% | ||||||||
China Construction Bank Corp., Class H | 205,000 | 159,495 |
See financial notes 79
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 0.3% | ||||||||
China Resources Cement Holdings Ltd. | 636,000 | 425,564 | ||||||
Utilities 0.1% | ||||||||
Huaneng Power International, Inc., Class H | 244,000 | 254,690 | ||||||
1,243,018 | ||||||||
Denmark 0.9% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
H. Lundbeck A/S | 26,632 | 572,564 | ||||||
Novo Nordisk A/S, Class B | 4,793 | 798,287 | ||||||
1,370,851 | ||||||||
Finland 0.9% | ||||||||
Energy 0.8% | ||||||||
Neste Oil Oyj | 56,688 | 1,124,029 | ||||||
Materials 0.1% | ||||||||
Kemira Oyj | 14,930 | 239,718 | ||||||
1,363,747 | ||||||||
France 10.5% | ||||||||
Automobiles & Components 1.3% | ||||||||
Compagnie Generale des Etablissements Michelin | 8,885 | 925,799 | ||||||
Renault S.A. | 11,098 | 968,303 | ||||||
1,894,102 | ||||||||
Banks 2.3% | ||||||||
BNP Paribas S.A. | 36,716 | 2,708,654 | ||||||
Credit Agricole S.A. * | 56,223 | 676,000 | ||||||
3,384,654 | ||||||||
Capital Goods 1.4% | ||||||||
Schneider Electric S.A. | 9,972 | 839,120 | ||||||
Vinci S.A. | 20,355 | 1,302,439 | ||||||
2,141,559 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Teleperformance | 11,637 | 616,004 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Kering | 592 | 134,165 | ||||||
Energy 1.5% | ||||||||
Total S.A. | 36,581 | 2,244,352 | ||||||
Insurance 0.2% | ||||||||
AXA S.A. | 12,260 | 305,463 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.0% | ||||||||
Sanofi | 27,739 | 2,957,619 | ||||||
Software & Services 0.2% | ||||||||
UbiSoft Entertainment S.A. * | 19,919 | 255,514 | ||||||
Telecommunication Services 0.9% | ||||||||
Orange S.A. | 95,807 | 1,316,970 | ||||||
Utilities 0.2% | ||||||||
GDF Suez | 10,973 | 271,952 | ||||||
15,522,354 | ||||||||
Germany 9.1% | ||||||||
Automobiles & Components 0.9% | ||||||||
Bayerische Motoren Werke AG | 2,491 | 281,927 | ||||||
Continental AG | 5,419 | 990,955 | ||||||
1,272,882 | ||||||||
Capital Goods 2.1% | ||||||||
Krones AG | 6,361 | 556,760 | ||||||
Siemens AG - Reg’d | 20,027 | 2,559,293 | ||||||
3,116,053 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Adidas AG | 6,604 | 752,496 | ||||||
Diversified Financials 1.1% | ||||||||
Deutsche Bank AG - Reg’d | 34,207 | 1,653,194 | ||||||
Food & Staples Retailing 1.3% | ||||||||
Metro AG | 39,712 | 1,861,936 | ||||||
Insurance 0.3% | ||||||||
Allianz SE - Reg’d | 2,506 | 420,763 | ||||||
Materials 1.0% | ||||||||
BASF SE | 13,798 | 1,432,432 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.5% | ||||||||
Merck KGaA | 4,749 | 789,999 | ||||||
Real Estate 0.4% | ||||||||
Patrizia Immobilien AG * | 65,892 | 617,173 | ||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
Infineon Technologies AG | 48,818 | 472,282 | ||||||
SMA Solar Technology AG | 4,905 | 199,945 | ||||||
672,227 | ||||||||
Telecommunication Services 0.4% | ||||||||
Deutsche Telekom AG - Reg’d | 40,433 | 635,393 | ||||||
Utilities 0.1% | ||||||||
E.ON SE AG | 7,523 | 137,133 | ||||||
13,361,681 | ||||||||
Greece 0.3% | ||||||||
Consumer Services 0.2% | ||||||||
OPAP S.A. | 19,136 | 237,625 | ||||||
Materials 0.1% | ||||||||
Mytilineos Holdings S.A. * | 12,531 | 101,186 | ||||||
Retailing 0.0% | ||||||||
JUMBO S.A. * | 5,446 | 73,072 | ||||||
411,883 | ||||||||
Hong Kong 2.2% | ||||||||
Banks 0.3% | ||||||||
BOC Hong Kong (Holdings) Ltd. | 150,000 | 489,874 | ||||||
Capital Goods 1.0% | ||||||||
Hutchison Whampoa Ltd. | 100,000 | 1,246,066 | ||||||
Johnson Electric Holdings Ltd. | 231,500 | 166,627 | ||||||
1,412,693 | ||||||||
Consumer Services 0.1% | ||||||||
Sands China Ltd. | 31,600 | 224,679 | ||||||
Energy 0.3% | ||||||||
CNOOC Ltd. | 200,000 | 406,794 |
80 See financial notes
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Real Estate 0.4% | ||||||||
Cheung Kong (Holdings) Ltd. | 39,000 | 609,065 | ||||||
Utilities 0.1% | ||||||||
Power Assets Holdings Ltd. | 17,500 | 145,796 | ||||||
3,288,901 | ||||||||
Israel 0.5% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.5% | ||||||||
Teva Pharmaceutical Industries Ltd. | 17,944 | 666,770 | ||||||
Italy 1.6% | ||||||||
Capital Goods 0.2% | ||||||||
Impregilo S.p.A. | 34,018 | 216,561 | ||||||
Consumer Durables & Apparel 0.0% | ||||||||
Prada S.p.A. | 7,000 | 68,297 | ||||||
Consumer Services 0.3% | ||||||||
GTECH S.p.A. | 16,559 | 502,880 | ||||||
Energy 0.5% | ||||||||
Eni S.p.A. | 29,410 | 746,629 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Parmalat S.p.A. | 47,419 | 159,495 | ||||||
Media 0.1% | ||||||||
Mediaset S.p.A. * | 20,209 | 100,917 | ||||||
Utilities 0.4% | ||||||||
Enel S.p.A. | 122,774 | 541,670 | ||||||
2,336,449 | ||||||||
Japan 20.1% | ||||||||
Automobiles & Components 2.1% | ||||||||
Aisin Seiki Co., Ltd. | 5,900 | 239,684 | ||||||
Denso Corp. | 10,000 | 480,684 | ||||||
Toyoda Gosei Co., Ltd. | 10,600 | 265,048 | ||||||
Toyota Motor Corp. | 33,500 | 2,172,079 | ||||||
3,157,495 | ||||||||
Banks 5.1% | ||||||||
Mitsubishi UFJ Financial Group, Inc. | 308,500 | 1,964,609 | ||||||
Mizuho Financial Group, Inc. | 913,900 | 1,918,333 | ||||||
Resona Holdings, Inc. | 306,100 | 1,592,250 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 38,000 | 1,836,763 | ||||||
The Bank of Yokohama Ltd. | 15,000 | 82,714 | ||||||
The Shizuoka Bank Ltd. | 16,000 | 180,022 | ||||||
7,574,691 | ||||||||
Capital Goods 1.4% | ||||||||
Fujikura Ltd. | 169,000 | 771,174 | ||||||
Mitsubishi Electric Corp. | 16,000 | 175,871 | ||||||
Mitsubishi Heavy Industries Ltd. | 137,000 | 870,672 | ||||||
Nitta Corp. | 5,600 | 117,950 | ||||||
The Japan Steel Works Ltd. | 13,000 | 72,625 | ||||||
The Nippon Signal Co., Ltd. | 16,100 | 122,441 | ||||||
2,130,733 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Dai Nippon Printing Co., Ltd. | 14,000 | 147,084 | ||||||
Consumer Durables & Apparel 2.1% | ||||||||
Namco Bandai Holdings, Inc. | 28,600 | 539,121 | ||||||
Panasonic Corp. | 245,100 | 2,512,118 | ||||||
3,051,239 | ||||||||
Consumer Services 1.1% | ||||||||
Oriental Land Co., Ltd. | 9,500 | 1,521,207 | ||||||
Round One Corp. | 19,000 | 100,805 | ||||||
1,622,012 | ||||||||
Diversified Financials 1.7% | ||||||||
Daiwa Securities Group, Inc. | 136,000 | 1,242,193 | ||||||
ORIX Corp. | 70,400 | 1,219,404 | ||||||
2,461,597 | ||||||||
Food, Beverage & Tobacco 1.7% | ||||||||
Japan Tobacco, Inc. | 52,300 | 1,892,406 | ||||||
Kirin Holdings Co., Ltd. | 43,000 | 628,466 | ||||||
2,520,872 | ||||||||
Insurance 0.6% | ||||||||
T&D Holdings, Inc. | 75,300 | 904,032 | ||||||
Materials 0.1% | ||||||||
Mitsubishi Chemical Holdings Corp. | 20,000 | 93,625 | ||||||
Media 0.1% | ||||||||
SKY Perfect JSAT Holdings, Inc. | 31,000 | 179,006 | ||||||
Real Estate 0.6% | ||||||||
Daito Trust Construction Co., Ltd. | 3,900 | 398,205 | ||||||
Daiwa House Industry Co., Ltd. | 17,000 | 340,574 | ||||||
Nomura Real Estate Holdings, Inc. | 2,800 | 70,844 | ||||||
809,623 | ||||||||
Retailing 1.1% | ||||||||
Alpen Co., Ltd. | 4,400 | 91,566 | ||||||
Aoyama Trading Co., Ltd. | 10,200 | 260,076 | ||||||
Autobacs Seven Co., Ltd. | 52,500 | 765,475 | ||||||
Canon Marketing Japan, Inc. | 19,200 | 257,218 | ||||||
USS Co., Ltd. | 16,000 | 234,312 | ||||||
1,608,647 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Rohm Co., Ltd. | 3,500 | 143,667 | ||||||
Software & Services 0.1% | ||||||||
Fujitsu Ltd. * | 48,000 | 206,218 | ||||||
Technology Hardware & Equipment 1.6% | ||||||||
Canon, Inc. | 35,000 | 1,104,484 | ||||||
FUJIFILM Holdings Corp. | 6,400 | 156,568 | ||||||
Ibiden Co., Ltd. | 4,900 | 84,944 | ||||||
Konica Minolta, Inc. | 105,000 | 869,499 | ||||||
Nippon Electric Glass Co., Ltd. | 33,000 | 169,743 | ||||||
2,385,238 | ||||||||
Transportation 0.5% | ||||||||
Central Japan Railway Co. | 2,845 | 368,916 | ||||||
East Japan Railway Co. | 3,400 | 295,360 | ||||||
664,276 | ||||||||
29,660,055 | ||||||||
Malaysia 0.3% | ||||||||
Materials 0.1% | ||||||||
Petronas Chemicals Group Berhad | 47,000 | 105,906 |
See financial notes 81
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 0.2% | ||||||||
Tenaga Nasional Berhad | 119,100 | 355,909 | ||||||
461,815 | ||||||||
Netherlands 4.0% | ||||||||
Capital Goods 1.0% | ||||||||
Koninklijke Philips N.V. | 43,595 | 1,540,678 | ||||||
Commercial & Professional Supplies 1.1% | ||||||||
Randstad Holding N.V. | 26,259 | 1,617,255 | ||||||
Consumer Durables & Apparel 0.2% | ||||||||
TomTom N.V. * | 30,263 | 233,669 | ||||||
Food, Beverage & Tobacco 1.5% | ||||||||
Unilever N.V. CVA | 55,640 | 2,205,872 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
STMicroelectronics N.V. | 32,680 | 251,375 | ||||||
5,848,849 | ||||||||
New Zealand 0.1% | ||||||||
Materials 0.1% | ||||||||
Fletcher Building Ltd. | 19,350 | 159,687 | ||||||
Norway 0.8% | ||||||||
Energy 0.7% | ||||||||
Statoil A.S.A. | 45,149 | 1,068,279 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Orkla A.S.A. | 13,607 | 110,301 | ||||||
1,178,580 | ||||||||
Portugal 0.1% | ||||||||
Capital Goods 0.1% | ||||||||
Sonae | 75,392 | 108,894 | ||||||
Republic of Korea 0.2% | ||||||||
Materials 0.1% | ||||||||
Hansol Paper Co., Ltd. | 5,960 | 69,045 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Samsung Electronics Co., Ltd. | 115 | 158,592 | ||||||
227,637 | ||||||||
Singapore 0.8% | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Wilmar International Ltd. | 35,000 | 97,354 | ||||||
Real Estate 0.5% | ||||||||
UOL Group Ltd. | 152,000 | 804,515 | ||||||
Transportation 0.2% | ||||||||
Singapore Airlines Ltd. | 35,000 | 293,593 | ||||||
1,195,462 | ||||||||
South Africa 0.3% | ||||||||
Insurance 0.1% | ||||||||
Sanlam Ltd. | 21,355 | 114,582 | ||||||
Materials 0.2% | ||||||||
Assore Ltd. | 4,138 | 169,000 | ||||||
Kumba Iron Ore Ltd. | 2,142 | 89,579 | ||||||
258,579 | ||||||||
373,161 | ||||||||
Spain 2.8% | ||||||||
Capital Goods 0.8% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 17,874 | 586,359 | ||||||
Ferrovial S.A. | 24,538 | 467,737 | ||||||
Gamesa Corp. Tecnologica S.A. * | 13,662 | 131,935 | ||||||
1,186,031 | ||||||||
Energy 1.5% | ||||||||
Repsol S.A. | 84,388 | 2,262,513 | ||||||
Utilities 0.5% | ||||||||
Endesa S.A. * | 23,046 | 667,096 | ||||||
4,115,640 | ||||||||
Sweden 3.3% | ||||||||
Banks 1.4% | ||||||||
Skandinaviska Enskilda Banken AB, A Shares | 159,761 | 1,932,319 | ||||||
Swedbank AB, A Shares | 6,826 | 177,656 | ||||||
2,109,975 | ||||||||
Capital Goods 0.6% | ||||||||
Trelleborg AB, B Shares | 46,652 | 880,307 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Loomis AB, Class B | 5,532 | 132,607 | ||||||
Food & Staples Retailing 0.4% | ||||||||
Axfood AB | 9,910 | 512,489 | ||||||
Technology Hardware & Equipment 0.8% | ||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 101,160 | 1,209,996 | ||||||
4,845,374 | ||||||||
Switzerland 7.2% | ||||||||
Capital Goods 0.5% | ||||||||
Bucher Industries AG - Reg’d | 1,035 | 286,622 | ||||||
Georg Fischer AG - Reg’d * | 598 | 411,931 | ||||||
OC Oerlikon Corp. AG - Reg’d * | 5,015 | 70,111 | ||||||
768,664 | ||||||||
Diversified Financials 0.3% | ||||||||
UBS AG - Reg’d * | 21,224 | 410,495 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Straumann Holding AG - Reg’d | 1,306 | 259,582 | ||||||
Insurance 1.4% | ||||||||
Helvetia Holding AG - Reg’d | 2,550 | 1,202,680 | ||||||
Swiss Re AG * | 9,746 | 855,529 | ||||||
2,058,209 | ||||||||
Materials 0.5% | ||||||||
Givaudan S.A. - Reg’d * | 404 | 572,948 | ||||||
Holcim Ltd. - Reg’d * | 2,549 | 189,593 | ||||||
762,541 |
82 See financial notes
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 4.3% | ||||||||
Actelion Ltd. - Reg’d * | 12,936 | 1,000,865 | ||||||
Novartis AG - Reg’d | 35,057 | 2,721,214 | ||||||
Roche Holding AG | 9,370 | 2,591,137 | ||||||
6,313,216 | ||||||||
10,572,707 | ||||||||
United Kingdom 20.0% | ||||||||
Banks 1.5% | ||||||||
HSBC Holdings plc | 172,040 | 1,885,789 | ||||||
Lloyds Banking Group plc * | 238,246 | 294,662 | ||||||
2,180,451 | ||||||||
Capital Goods 0.7% | ||||||||
BAE Systems plc | 103,810 | 757,241 | ||||||
Cobham plc | 46,976 | 216,950 | ||||||
974,191 | ||||||||
Commercial & Professional Supplies 0.9% | ||||||||
Berendsen plc | 87,942 | 1,369,515 | ||||||
Consumer Durables & Apparel 0.4% | ||||||||
Persimmon plc * | 32,782 | 663,711 | ||||||
Diversified Financials 0.1% | ||||||||
Man Group plc | 92,831 | 132,119 | ||||||
Energy 3.4% | ||||||||
BG Group plc | 11,082 | 226,069 | ||||||
BP plc | 430,593 | 3,342,522 | ||||||
Enquest plc * | 91,661 | 195,968 | ||||||
Royal Dutch Shell plc, B Shares | 17,266 | 597,749 | ||||||
Soco International plc * | 97,503 | 622,089 | ||||||
4,984,397 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
J. Sainsbury plc | 28,712 | 181,618 | ||||||
Food, Beverage & Tobacco 1.2% | ||||||||
Associated British Foods plc | 25,989 | 944,829 | ||||||
Unilever plc | 21,801 | 884,053 | ||||||
1,828,882 | ||||||||
Materials 2.5% | ||||||||
African Barrick Gold plc | 129,271 | 399,432 | ||||||
BHP Billiton plc | 36,330 | 1,121,088 | ||||||
Kazakhmys plc | 22,427 | 94,357 | ||||||
Lonmin plc * | 20,954 | 108,231 | ||||||
Rio Tinto plc | 38,154 | 1,930,598 | ||||||
3,653,706 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.5% | ||||||||
AstraZeneca plc | 41,269 | 2,184,786 | ||||||
Real Estate 0.9% | ||||||||
Grainger plc | 437,870 | 1,367,405 | ||||||
Retailing 1.8% | ||||||||
Next plc | 27,508 | 2,402,189 | ||||||
WH Smith plc | 18,947 | 273,435 | ||||||
2,675,624 | ||||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
CSR plc | 48,478 | 427,015 | ||||||
Software & Services 1.0% | ||||||||
Micro Focus International plc | 33,066 | 433,388 | ||||||
The Sage Group plc | 186,156 | 1,004,258 | ||||||
1,437,646 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Pace plc | 38,509 | 188,076 | ||||||
Telecommunication Services 1.9% | ||||||||
BT Group plc | 150,480 | 910,499 | ||||||
Vodafone Group plc | 507,178 | 1,857,670 | ||||||
2,768,169 | ||||||||
Utilities 1.7% | ||||||||
Centrica plc | 365,842 | 2,069,104 | ||||||
SSE plc | 18,395 | 417,293 | ||||||
2,486,397 | ||||||||
29,503,708 | ||||||||
Total Common Stock | ||||||||
(Cost $120,753,916) | 144,158,873 | |||||||
Rights 0.0% of net assets | ||||||||
France 0.0% | ||||||||
Groupe Fnac (a)* | 592 | 1,889 | ||||||
Total Rights | ||||||||
(Cost $1,973) | 1,889 | |||||||
Other Investment Company 1.8% of net assets | ||||||||
United States 1.8% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (d) | 2,687,292 | 2,687,292 | ||||||
Total Other Investment Company | ||||||||
(Cost $2,687,292) | 2,687,292 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.2% of net assets | ||||||||
U.S. Treasury Obligations 0.2% | ||||||||
U.S. Treasury Bills | ||||||||
0.01%, 12/19/13 (b)(c) | 40,000 | 40,000 | ||||||
0.06%, 12/19/13 (b)(c) | 200,000 | 199,984 | ||||||
Total Short-Term Investments | ||||||||
(Cost $239,984) | 239,984 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $125,364,270 and the unrealized appreciation and depreciation were $23,253,996 and ($1,530,228), respectively, with a net unrealized appreciation of $21,723,768.
See financial notes 83
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
At 10/31/13, the values of certain foreign securities held by the fund aggregating $142,331,134 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. | |
(d) | The rate shown is the 7-day yield. |
CVA — | Dutch Certificate | |
Reg’d — | Registered |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/20/13 | 20 | 1,875,300 | 30,136 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $— | $112,217,215 | $— | $112,217,215 | ||||||||||||
Canada1 | 952,219 | — | — | 952,219 | ||||||||||||
Chile1 | 114,880 | — | — | 114,880 | ||||||||||||
Denmark | ||||||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 572,564 | 798,287 | — | 1,370,851 | ||||||||||||
United Kingdom1 | — | 29,315,632 | — | 29,315,632 | ||||||||||||
Technology Hardware & Equipment | 188,076 | — | — | 188,076 | ||||||||||||
Rights1 | 1,889 | — | — | 1,889 | ||||||||||||
Other Investment Company1 | 2,687,292 | — | — | 2,687,292 | ||||||||||||
Short-Term Investments1 | — | 239,984 | — | 239,984 | ||||||||||||
Total | $4,516,920 | $142,571,118 | $— | $147,088,038 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | $30,136 | $— | $— | $30,136 |
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 security transfers in the amount of $610,182 from Level 1 to Level 2 for the period ended October 31, 2013. 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.
84 See financial notes
Table of Contents
Schwab International Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $123,683,165) | $147,088,038 | |||||
Foreign currency, at value (cost $28) | 28 | |||||
Receivables: | ||||||
Investments sold | 2,002,613 | |||||
Fund shares sold | 824,314 | |||||
Dividends | 356,639 | |||||
Foreign tax reclaims | 117,433 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 719 | ||||
Total assets | 150,389,785 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 3,045,025 | |||||
Investment adviser and administrator fees | 5,068 | |||||
Shareholder service fees | 5,182 | |||||
Fund shares redeemed | 29,300 | |||||
Variation margin on futures contracts | 6,423 | |||||
Distribution and shareholder services fees | 695 | |||||
Accrued expenses | + | 65,581 | ||||
Total liabilities | 3,157,274 | |||||
Net Assets | ||||||
Total assets | 150,389,785 | |||||
Total liabilities | − | 3,157,274 | ||||
Net assets | $147,232,511 | |||||
Net Assets by Source | ||||||
Capital received from investors | 133,861,298 | |||||
Net investment income not yet distributed | 2,291,719 | |||||
Net realized capital losses | (12,361,738 | ) | ||||
Net unrealized capital appreciation | 23,441,232 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$147,232,511 | 14,988,454 | $9.82 |
See financial notes 85
Table of Contents
Schwab International Core Equity Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $242,639) | $3,479,985 | |||||
Interest | + | 9 | ||||
Total investment income | 3,479,994 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 619,199 | |||||
Shareholder service fees | 263,725 | |||||
Custodian fees | 70,687 | |||||
Portfolio accounting fees | 68,190 | |||||
Professional fees | 48,997 | |||||
Registration fees | 29,318 | |||||
Transfer agent fees | 24,139 | |||||
Shareholder reports | 22,866 | |||||
Independent trustees’ fees | 7,644 | |||||
Interest expense | 98 | |||||
Other expenses | + | 22,258 | ||||
Total expenses | 1,177,121 | |||||
Expense reduction by CSIM and its affiliates | − | 258,900 | ||||
Net expenses | − | 918,221 | ||||
Net investment income | 2,561,773 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 6,449,116 | |||||
Net realized gains on futures contracts | 109,592 | |||||
Net realized losses on foreign currency transactions | + | (17,715 | ) | |||
Net realized gains | 6,540,993 | |||||
Net change in unrealized appreciation on investments | 17,146,438 | |||||
Net change in unrealized appreciation on futures contracts | 30,136 | |||||
Net change in unrealized appreciation on foreign currency translations | + | 10,650 | ||||
Net change in unrealized appreciation | + | 17,187,224 | ||||
Net realized and unrealized gains | 23,728,217 | |||||
Increase in net assets resulting from operations | $26,289,990 |
86 See financial notes
Table of Contents
Schwab International Core Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $2,561,773 | $1,569,563 | ||||||||
Net realized gains (losses) | 6,540,993 | (609,529 | ) | |||||||
Net change in unrealized appreciation | + | 17,187,224 | 6,164,196 | |||||||
Increase in net assets from operations | 26,289,990 | 7,124,230 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($2,100,275 | ) | ($1,709,354 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,070,603 | $70,752,618 | 3,640,288 | $26,971,761 | ||||||||||||||
Shares reinvested | 154,692 | 1,217,426 | 151,161 | 1,017,316 | ||||||||||||||
Shares redeemed | + | (3,128,819 | ) | (27,045,232 | ) | (2,074,860 | ) | (15,099,441 | ) | |||||||||
Net transactions in fund shares | 5,096,476 | $44,924,812 | 1,716,589 | $12,889,636 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 9,891,978 | $78,117,984 | 8,175,389 | $59,813,472 | ||||||||||||||
Total increase | + | 5,096,476 | 69,114,527 | 1,716,589 | 18,304,512 | |||||||||||||
End of period | 14,988,454 | $147,232,511 | 9,891,978 | $78,117,984 | ||||||||||||||
Net investment income not yet distributed | $2,291,719 | $1,463,091 |
See financial notes 87
Table of Contents
Schwab Active Equity Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds 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 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 Target 2045 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2050 Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2055 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab International Index Fund | Schwab Fundamental US Small 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 | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Monthly Income Fund - Moderate Payout | |||
Laudus Small-Cap MarketMasters Fund | Schwab Monthly Income Fund - Enhanced Payout | |||
Laudus International MarketMasters Fund | Schwab Monthly Income Fund - Maximum Payout | |||
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:
• | Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at 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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price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures. |
• | Foreign equity security 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 NAV 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. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures. | |
• | Futures and forward foreign currency exchange contracts: Futures are valued at their settlement prices as of the close of their exchanges. Forwards are valued based on that day’s forward exchange rates or by using an interpolated forward exchange rate for contracts with interim settlement dates. | |
• | Short-term securities (60 days or less to maturity): Short-term securities are valued at amortized cost, which approximates market value. | |
• | Underlying funds: Mutual funds are valued at their respective NAVs. Exchange traded funds (“ETFs”) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable. |
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 inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which 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 |
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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, 2013 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 lending agent provides the fund with indemnification against borrower default. The fund bears the risk of loss with respect to the investment of cash collateral. 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. On loans collateralized by U.S. Treasury and/or federal agency obligations, a fee is received from the borrower, and is allocated between the fund and the lending agent.
The values of the securities on loan and the related cash collateral as of October 31, 2013 for the Schwab Core Equity Fund, Schwab Small-Cap Equity Fund and Schwab Health Care Fund are disclosed in each fund’s Portfolio Holdings and 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.
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(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
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 differences 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 may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures or forward 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.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income, if any, once a year, with the exception of Schwab Dividend Equity Fund which typically pays quarterly dividends. The funds make distributions from net realized capital gains, if any, once a year.
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(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, under which the funds may 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, 2013, 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 attributable to these arrangements 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 has evaluated ASU No. 2011-11 and determined that upon adoption of the standard the funds’ financial statement disclosures will include the enhanced disclosures around rights of offset and related arrangements as required by the standard.
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
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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.
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 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
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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 securities market structures; and higher transaction costs.
Emerging market countries 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. 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 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% |
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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). 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). 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 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 charged, excluding interest, taxes and certain non-routine expenses (“expense limitation”). 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. |
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Certain Schwab funds may own shares of other Schwab funds. The table below reflects the percentages of shares of each fund in this report that are owned by other Schwab funds as of October 31, 2013, as applicable:
Schwab | Schwab | Schwab | ||||||||||
Core | Dividend | Small-Cap | ||||||||||
Equity Fund | Equity Fund | Equity Fund | ||||||||||
Schwab Target 2010 Fund | 0.1% | 0.1% | 0.4% | |||||||||
Schwab Target 2015 Fund | 0.3% | 0.2% | 0.7% | |||||||||
Schwab Target 2020 Fund | 1.6% | 1.0% | 3.9% | |||||||||
Schwab Target 2025 Fund | 1.1% | 0.7% | 2.7% | |||||||||
Schwab Target 2030 Fund | 3.1% | 1.9% | 7.5% | |||||||||
Schwab Target 2035 Fund | 1.1% | 0.7% | 2.7% | |||||||||
Schwab Target 2040 Fund | 3.7% | 2.2% | 9.0% | |||||||||
Schwab Target 2045 Fund | 0.1% | 0.1% | 0.3% | |||||||||
Schwab Target 2050 Fund | 0.1% | 0.1% | 0.2% | |||||||||
Schwab Target 2055 Fund | 0.0% | * | 0.0% | * | 0.1% | |||||||
Schwab Monthly Income Fund - Moderate Payout | —% | 0.7% | —% | |||||||||
Schwab Monthly Income Fund - Enhanced Payout | —% | 1.1% | —% | |||||||||
Schwab Monthly Income Fund - Maximum Payout | —% | 0.3% | —% | |||||||||
Schwab Balanced Fund | 2.6% | —% | —% |
* | Less than 0.05% |
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 to be charged on a 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, CSIM voluntarily reduced its investment adviser fees for the Schwab Core Equity Fund and Schwab Small-Cap Equity Fund by $6,944 each, to reflect a credit in certain stock research fees incurred by CSIM and passed on to these funds.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust 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. For information regarding the trustees please refer to Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
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7. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2013, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab Core Equity Fund | $1,630,694,334 | $1,688,241,102 | ||||||
Schwab Dividend Equity Fund | 1,058,815,976 | 998,577,847 | ||||||
Schwab Large-Cap Growth Fund | 199,213,500 | 215,647,798 | ||||||
Schwab Small-Cap Equity Fund | 433,570,105 | 394,382,928 | ||||||
Schwab Hedged Equity Fund* | 249,847,516 | 264,812,687 | ||||||
Schwab Financial Services Fund | 47,542,644 | 41,180,679 | ||||||
Schwab Health Care Fund | 465,935,320 | 346,369,443 | ||||||
Schwab International Core Equity Fund | 122,933,510 | 79,145,591 |
* | Including securities sold short. |
8. 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 variation margin for futures contracts held at October 31, 2013 are presented on the face of the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized/unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period, the month-end average contract 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 | $9,255,569 | 119 | ||||||
Schwab Dividend Equity Fund | 8,573,719 | 108 | ||||||
Schwab Large-Cap Growth Fund | 981,806 | 13 | ||||||
Schwab Small-Cap Equity Fund | 3,749,561 | 38 | ||||||
Schwab Hedged Equity Fund | 593,300 | 8 | ||||||
Schwab Financial Services Fund | 583,611 | 8 | ||||||
Schwab Health Care Fund | 6,691,543 | 86 | ||||||
Schwab International Core Equity Fund | 308,823 | 3 |
The Schwab International Core Equity Fund invested in 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. The net realized losses of $1,075 on forwards held during the period is included in net realized losses on foreign currency transactions of the fund’s Statement of Operations. 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 forward foreign currency notional amount and the month-end average unrealized appreciation (depreciation) were $9,952 and ($1), respectively.
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Schwab Active Equity Funds
Financial Notes (continued)
9. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/12-10/31/13) | (11/1/11-10/31/12) | |||||||
Schwab Core Equity Fund | $19,267 | $14,523 | ||||||
Schwab Dividend Equity Fund | 50,175 | 19,131 | ||||||
Schwab Large-Cap Growth Fund | 6,787 | 6,173 | ||||||
Schwab Small-Cap Equity Fund | 15,023 | 4,731 | ||||||
Schwab Hedged Equity Fund | 10,792 | 5,426 | ||||||
Schwab Financial Services Fund | 4,292 | 5,169 | ||||||
Schwab Health Care Fund | 38,090 | 11,650 | ||||||
Schwab International Core Equity Fund | 8,761 | 1,452 |
10. Federal Income Taxes:
As of October 31, 2013, 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 | $18,530,775 | $1,659,809 | $989,030 | $17,071,549 | $— | |||||||||||||||
Undistributed long-term capital gains | 157,590,505 | 118,267,186 | — | 39,821,319 | 15,224,405 | |||||||||||||||
Unrealized appreciation on investments | 462,825,364 | 390,582,767 | 47,796,177 | 135,898,052 | 46,153,261 | |||||||||||||||
Unrealized depreciation on investments | (4,607,858 | ) | (4,349,315 | ) | (595,155 | ) | (9,058,504 | ) | (920,473 | ) | ||||||||||
Other unrealized appreciation (depreciation) | (1 | ) | — | — | — | (12,609,810 | ) | |||||||||||||
Net unrealized appreciation (depreciation) | $458,217,505 | $386,233,452 | $47,201,022 | $126,839,548 | $32,622,978 | |||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Undistributed ordinary income | $338,279 | $20,280,205 | $3,810,651 | |||||||||||||||||
Undistributed long-term capital gains | — | 61,200,584 | — | |||||||||||||||||
Unrealized appreciation on investments | 13,786,008 | 192,120,890 | 23,253,996 | |||||||||||||||||
Unrealized depreciation on investments | (122,259 | ) | (1,285,086 | ) | (1,530,228 | ) | ||||||||||||||
Other unrealized appreciation (depreciation) | — | 9,837 | 5,978 | |||||||||||||||||
Net unrealized appreciation (depreciation) | $13,663,749 | $190,845,641 | $21,729,746 | |||||||||||||||||
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.
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Schwab Active Equity Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2013, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
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 | $32,645,024 | $— | $— | $— | $— | |||||||||||||||
October 31, 2017 | 1,636,580 | — | 14,051,004 | — | — | |||||||||||||||
Total | $34,281,604 | * | $— | $14,051,004 | $— | $— | ||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Expiration Date | Services Fund | Fund | Equity Fund | |||||||||||||||||
October 31, 2016 | $2,634,441 | $— | $— | |||||||||||||||||
October 31, 2017 | 28,673,848 | — | 12,169,184 | |||||||||||||||||
October 31, 2018 | 170,394 | — | — | |||||||||||||||||
Total | $31,478,683 | $— | $12,169,184 | * | ||||||||||||||||
* | The Schwab Core Equity Fund and Schwab International Core Equity Fund have capital loss carryforwards acquired via mergers, which are subject to certain annual limitations in regard to availability to offset potential future capital gains. |
Qualified late-year losses are certain capital and ordinary losses which occur during the portion of a fund’s taxable year subsequent to October 31. A fund may elect to treat any portion of qualified late-year losses as arising on the first day of the next taxable year. For the year ended October 31, 2013, the funds had late-year ordinary 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 | ||||||||||||||||
Late-year ordinary losses deferred | $— | $— | $— | $— | $1,649,544 | |||||||||||||||
Capital losses utilized | 75,465,662 | 66,553,849 | 31,765,537 | 14,134,762 | 2,570,724 | |||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Capital losses utilized | $4,316,363 | $— | $6,149,622 |
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 | $16,475,044 | $30,254,415 | $2,200,707 | $2,100,800 | $— | |||||||||||||||
Long-term capital gains | — | — | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $32,156,180 | $28,261,739 | $1,032,046 | $177,045 | $— | |||||||||||||||
Long-term capital gains | — | — | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
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Schwab Active Equity Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $406,901 | $8,336,930 | $2,100,275 | |||||||||||||||||
Long-term capital gains | — | 54,300,003 | — | |||||||||||||||||
Return of capital | — | — | — | |||||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $224,748 | $3,529,101 | $1,709,354 | |||||||||||||||||
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, 2013, 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 | $— | $— | $— | $— | ($175,180 | ) | ||||||||||||||
Undistributed net investment income | 55,480 | — | — | (325,782 | ) | 152,680 | ||||||||||||||
Net realized capital gains (losses) | (55,480 | ) | — | — | 325,782 | 22,500 | ||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Capital shares | $— | $— | $— | |||||||||||||||||
Undistributed net investment income | 2,831 | (47,829 | ) | 367,130 | ||||||||||||||||
Net realized capital gains (losses) | (2,831 | ) | 47,829 | (367,130 | ) |
As of October 31, 2013, 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, 2013, the funds did not incur any interest or penalties.
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.
12. 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
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Schwab Active Equity Funds
Financial Notes (continued)
12. Reorganization (continued):
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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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, 2013, and 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 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 at October 31, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 17, 2013
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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 $242,621 to its shareholders for the year ended October 31, 2013. The respective foreign source income on the fund is $3,706,865.
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2013, 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 | 44.22 | ||||
Schwab Hedged Equity Fund | — | ||||
Schwab Financial Services Fund | 100.00 | ||||
Schwab Health Care Fund | 67.69 | ||||
Schwab International Core Equity Fund | — |
For the fiscal year ended October 31, 2013, 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 2014 via IRS form 1099 of the amounts for use in preparing their 2013 income tax return.
Schwab Core Equity Fund | $16,475,044 | |||
Schwab Dividend Equity Fund | 30,254,415 | |||
Schwab Large-Cap Growth Fund | 2,200,707 | |||
Schwab Small-Cap Equity Fund | 928,747 | |||
Schwab Hedged Equity Fund | — | |||
Schwab Financial Services Fund | 406,901 | |||
Schwab Health Care Fund | 7,562,144 | |||
Schwab International Core Equity Fund | 2,246,594 |
Under Section 852 (b)(3)(C) of the Internal Revenue Code, the Schwab Health Care Fund hereby designates $54,300,003 as long-term capital gain dividend for the fiscal year ended October 31, 2013.
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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 23, 2013, and June 4, 2013, and approved the renewal of the Agreement with respect to the Funds for an additional one-year term at the meeting held on June 4, 2013. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds, exchange-traded funds and other accounts; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other 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
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performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of their review of Fund expenses and adviser profitability discussed below. Although Schwab Large-Cap Growth Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Schwab Large-Cap Growth Fund, including 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; and that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to Schwab Financial Services Fund and Schwab Health Care Fund that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers 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 99 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the 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 (advisory services firm) (Oct. 2001 – present). | 76 | Director, WageWorks, Inc. (2010 – present) 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. 2000 – present). | 76 | 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). | 76 | Director, TOUSA (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Mission West Properties (1998 – 2012) Director, Ditech Networks Corporation (1997 – 2012) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 76 | 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). | 76 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) | |||
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). | 76 | Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc. (2009 – present) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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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. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present). | 76 | 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. | 76 | 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. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. 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. | 99 | None | |||
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 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). | |
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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
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 (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). | |
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). | |
David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Capital Trust since 2011.) | Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President and Assistant Secretary (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 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of 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 own stock of The Charles Schwab Corporation, the parent company of 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.
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 capital gain or loss is considered unrealized appreciation or depreciation.
Dow Jones Global Health Care Index An index that measures the performance of healthcare providers, researchers, and supplies producers around theworld.
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.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
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. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
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.
S&P 1500 SuperComposite Financials Sector Index A capitalization-weighted index designed to measure the performance of the financial sector of the S&P 1500 SuperComposite Index. The S&P SuperComposite 1500 is comprised of the 1500 companies included in the S&P 500, S&P MidCap 400 and S&P SmallCap 600 indices.
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
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• | APPLICATION AND REGISTRATION INFORMATION. |
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Safeguarding Your Information — Security Is a Partnership
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Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
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 Funds’ 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 Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 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 Index 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®.
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.
© 2013 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR26298-10
00107466
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Table of Contents
Annual report dated October 31, 2013, enclosed.
Schwab Fundamental Index* Funds
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
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* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC. |
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This wrapper is not part of the shareholder report.
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Schwab Fundamental Index* Funds
Annual Report
October 31, 2013
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
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* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC. |
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Schwab Fundamental Index Funds
In This Report
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Performance and Fund Facts | ||
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8 | ||
10 | ||
12 | ||
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75 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS), which was developed by, and is the exclusive property of MSCI and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Schwab. 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 12 Months Ended October 31, 2013 | ||||
Schwab Fundamental US Large Company Index Fund (Ticker Symbol: SFLNX) | 29.67% | |||
Russell Fundamental U.S. Large Company Index | 30.27% | |||
Fund Category: Morningstar Large Value | 26.84% | |||
Performance Details | pages 6-7 | |||
Schwab Fundamental US Small Company Index Fund (Ticker Symbol: SFSNX) | 37.55% | |||
Russell Fundamental U.S. Small Company Index | 38.01% | |||
Fund Category: Morningstar Small Blend | 35.17% | |||
Performance Details | pages 8-9 | |||
Schwab Fundamental International Large Company Index Fund1 (Ticker Symbol: SFNNX) | 30.12% | |||
Russell Fundamental Developed ex-U.S. Large Company Index (Net) | 30.79% | |||
Fund Category: Morningstar Foreign Large Value | 24.94% | |||
Performance Details | pages 10-11 | |||
Schwab Fundamental International Small Company Index Fund1 (Ticker Symbol: SFILX) | 29.75% | |||
Russell Fundamental Developed ex-U.S. Small Company Index (Net) | 30.78% | |||
Fund Category: Morningstar Foreign Small/Mid Blend | 26.78% | |||
Performance Details | pages 12-13 | |||
Schwab Fundamental Emerging Markets Large Company Index Fund1 (Ticker Symbol: SFENX) | 7.11% | |||
Russell Fundamental Emerging Markets Large Company Index (Net) | 8.42% | |||
Fund Category: Morningstar Diversified Emerging Markets | 7.59% | |||
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.
For index definitions, please see the Glossary.
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 Index Series is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the funds 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 Index Series. 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.
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 Fundamental Index Funds
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From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctpchandom.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 goals, and for reading this annual report concerning the Schwab Fundamental Index Funds. Fundamentally weighted strategies have enjoyed significant asset growth in recent years, as investors have embraced the value of alternatives to traditional index funds. Unlike equity indices that are often weighted based on market capitalization, fundamentally weighted indices select and weight stocks by non-price measures. By using this methodology, the funds can serve as a complement to traditional cap-weighted and actively managed investment vehicles in an investment portfolio, potentially helping shareholders achieve better risk-adjusted returns over time.
Turning to the 12 months ended October 31, 2013, the funds generated returns that were generally aligned with their respective indices, and reflected a rally by stocks. The backdrop for these results included policies by many central banks aimed at stimulating economic growth. However, some signs of economic improvement in the U.S. led the Federal Reserve to initially consider “tapering” its purchases of securities to keep interest rates low, while a brief U.S. federal government shutdown and budgetary gridlock created market uncertainty late in the period. Stocks fell in response, but as the Fed’s anticipated tapering never materialized, stocks resumed their rally. As a result,
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2013
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 27.18% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 36.28% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 26.88% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | −1.08% | 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/0000950123-14-000021/f30154ctcaptst03.gif)
Index figures assume dividends and distributions were reinvested, and do not include trading and management costs, which would lower performance. Indices are unmanaged, do not incur management fees, costs and expenses, and you cannot invest in them directly. Remember that past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
Schwab Fundamental Index Funds 3
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From the President continued
Turning to the 12 months ended October 31, 2013, the funds generated returns that were generally aligned with their respective indices, and reflected a rally by stocks.
the Russell Fundamental U.S. Large Company Index returned 30.3%, and the Russell Fundamental Developed ex-U.S. Large Company Index returned 30.8%.*
By comparison, emerging market stocks generated far more modest returns. Slower economic growth early in 2013 and the depreciation of many emerging market currencies versus the U.S. dollar reduced returns on these stocks. However, as the Fed held off on tapering, these stocks generally rallied. Reflecting this environment, the Russell Fundamental Emerging Markets Large Company Index returned 8.4%.**
For more information about the Schwab Fundamental Index Funds, please continue reading this report. In addition, you can find further details about the Schwab Fundamental Index Funds and our other investment products by visiting 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/0000950123-14-000021/f30154ctschandom.gif)
For full definitions of the referenced indices, please see the Glossary.
* The total return cited is for the Russell Fundamental Developed ex-U.S. Large Company Index (Net), which is calculated net of foreign withholding taxes.
** The total return cited is for the Russell Fundamental Emerging Markets Large Company Index (Net), which is calculated net of foreign withholding taxes.
4 Schwab Fundamental Index Funds
Table of Contents
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. | |
![]() | Ferian Juwono, CFA, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent over three years as a portfolio manager, managing equity index funds for institutional clients, and nearly two years as a senior business analyst. Prior to that, Mr. Juwono worked for over four years as a senior financial analyst with Union Bank of California. | |
![]() | Ron Toll, Portfolio Manager, is responsible for the day-to-day co-management 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
Table of Contents
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 that are created using as the universe the companies in the Russell 3000® Index. 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 29.67% for the 12-month period that ended October 31, 2013, compared with the index, which returned 30.27%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index. In addition, the fund received strong cash inflows during the period. On some occasions, this cash was briefly invested in S&P 500 Index futures, and these futures generally lagged the return of the index for the 12 months, slightly detracting from the fund’s relative performance.
Market Highlights. Large-cap U.S. stocks generated double-digit returns for the 12-month report period. The backdrop for these results included Federal Reserve efforts to keep interest rates low and speed up economic growth, making financing more affordable for businesses and households and generally supporting stocks. Relative stability in the euro zone was another positive factor.
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 approximately 15% of the fund. Financials stocks also performed well, returning approximately 35%, and reflecting the performance of companies involved in banking, diversified financial services, insurance, and real estate. One significant contributor in this sector was Bank of America, a diversified financial services company. The fund’s Bank of America holdings returned approximately 50%.
The Consumer Discretionary sector, which represented an average weight of roughly 12% of the fund, also provided a meaningful total return contribution. The fund’s Consumer Discretionary stocks returned approximately 40%, reflecting the overall performance of companies involved in automobiles and components, durable goods and apparel, consumer services, media, and retailing. One significant contributor in this sector was Time Warner Inc., a media and entertainment company. The fund’s Time Warner Inc. holdings returned approximately 61%.
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 approximately 11%, reflecting the overall performance of companies involved in gas, electric, and water utilities, as well as independent power production and energy trading. One significant detractor in this sector was Exelon Corporation, a utility services holding company. The fund’s Exelon Corporation holdings returned approximately -16%.
The Telecommunication Services sector, which represented an average weight of approximately 4% of the fund, was another relatively weak contributor to the fund’s total return. The fund’s Telecommunication Services stocks returned approximately 14%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One significant detractor in this sector was NII Holdings Inc., a mobile communications provider. The fund’s NII Holdings Inc. shares returned roughly -57%.
As of 10/31/13:
Statistics
Number of Holdings | 610 | |||
Weighted Average Market Cap ($ x 1,000,000) | $99,445 | |||
Price/Earnings Ratio (P/E) | 19.4 | |||
Price/Book Ratio (P/B) | 2.3 | |||
Portfolio Turnover Rate | 10% |
Sector Weightings % of Investments
Energy | 15.1% | |||
Financials | 13.7% | |||
Consumer Discretionary | 12.4% | |||
Information Technology | 12.4% | |||
Consumer Staples | 11.6% | |||
Health Care | 11.4% | |||
Industrials | 10.7% | |||
Utilities | 4.1% | |||
Telecommunication Services | 3.8% | |||
Materials | 3.7% | |||
Other | 1.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Exxon Mobil Corp. | 4.5% | |||
Chevron Corp. | 2.3% | |||
AT&T, Inc. | 2.0% | |||
ConocoPhillips | 2.0% | |||
Microsoft Corp. | 1.9% | |||
General Electric Co. | 1.5% | |||
The Procter & Gamble Co. | 1.5% | |||
Bank of America Corp. | 1.5% | |||
Wal-Mart Stores, Inc. | 1.4% | |||
Johnson & Johnson | 1.3% | |||
Total | 19.9% |
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 Fundamental Index Funds
Table of Contents
Schwab Fundamental US Large Company Index Fund
Performance and Fund Facts as of 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsfulcif.gif)
Average Annual Total Returns1,2,4
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental US Large Company Index Fund (4/2/07) | 29.67 | % | 18.50 | % | 6.63 | % | |||||||||
Russell Fundamental U.S. Large Company Index | 30.27 | % | n/a | n/a | |||||||||||
Fundamental US Large Company Spliced Index5 | 30.27 | % | 18.76 | % | 6.81 | % | |||||||||
Fund Category: Morningstar Large Value | 26.84 | % | 13.73 | % | 4.00 | % |
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.
For index definitions, please see the Glossary.
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 Index Series. FTSE is a trademark owned by the London Stock Exchange Group companies 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.
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 | On October 27, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 27, 2009 is that of the fund’s former Institutional Shares. | |
3 | The inception date of the Russell Fundamental U.S. Large Company Index is February 24, 2011. The fund began tracking the index on October 19, 2012. | |
4 | 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. | |
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
Table of Contents
Schwab Fundamental US Small Company Index Fund
The Schwab Fundamental US Small 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. Small Company Index (the index), which measures the performance of the small company size segment by fundamental overall company scores that are created using as the universe the companies in the Russell 3000® Index. 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 37.55% for the 12-month period that ended October 31, 2013, compared with the index, which returned 38.01%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index.
Market Highlights. Small-cap U.S. stocks generated double-digit returns for the 12-month report period. The backdrop for these results included Federal Reserve efforts to keep interest rates low and speed up economic growth, making financing more affordable for businesses and households and generally supporting stocks. Relative stability in the euro zone was another positive factor.
Contributors and Detractors. The Industrials 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 Industrials stocks comprising approximately 20% of the fund. Industrials stocks also performed well, returning approximately 46%, and reflecting the performance of companies involved in capital goods, commercial and professional services, and transportation. One significant contributor in this sector was Delta Air Lines, Inc., an air transportation company. The fund’s Delta Air Lines, Inc. holdings returned approximately 37%.
The Consumer Discretionary sector, which represented an average weight of approximately 19% of the fund, also provided a meaningful total return contribution. The fund’s Consumer Discretionary stocks returned approximately 41%, reflecting the overall performance of companies involved in automobiles and components, durable goods and apparel, consumer services, media, and retailing. One significant contributor in this sector was Netflix Inc., an online subscription service for watching television shows and movies. The fund’s Netflix Inc. holdings returned approximately 308%.
The Telecommunication Services sector generated positive returns for the fund, but was the weakest total return contributor. The Telecommunication Services sector represented an average weight of approximately 1% of the fund. Stocks in this sector generated a solid return of approximately 59%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One significant detractor in this sector, however, was Cincinnati Bell Inc., a local exchange and wireless provider. The fund’s Cincinnati Bell Inc. shares returned approximately -45%.
The Utilities sector, which represented an average weight of approximately 4% of the fund, was another relatively weak contributor to the fund’s total return. The fund’s Utilities stocks returned approximately 16%, reflecting the overall performance of companies involved in gas, electric, and water utilities, as well as independent power production and energy trading. One significant detractor in this sector was Atlantic Power Corporation, which holds indirect interests in non-utility electric generating facilities. The fund’s Atlantic Power Corporation holdings returned approximately -67%.
As of 10/31/13:
Statistics
Number of Holdings | 863 | |||
Weighted Average Market Cap ($ x 1,000,000) | $3,933 | |||
Price/Earnings Ratio (P/E) | 59.4 | |||
Price/Book Ratio (P/B) | 2.2 | |||
Portfolio Turnover Rate | 27% |
Sector Weightings % of Investments
Industrials | 19.9% | |||
Financials | 19.7% | |||
Consumer Discretionary | 18.4% | |||
Information Technology | 14.6% | |||
Energy | 6.5% | |||
Health Care | 6.3% | |||
Materials | 5.9% | |||
Consumer Staples | 3.5% | |||
Utilities | 3.2% | |||
Telecommunication Services | 1.0% | |||
Other | 1.0% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Southwest Airlines Co. | 0.6% | |||
Delta Air Lines, Inc. | 0.6% | |||
SunEdison, Inc. | 0.4% | |||
United Continental Holdings, Inc. | 0.3% | |||
ITT Educational Services, Inc. | 0.3% | |||
Office Depot, Inc. | 0.3% | |||
SYNNEX Corp. | 0.3% | |||
Huntington Ingalls Industries, Inc. | 0.3% | |||
TD Ameritrade Holding Corp. | 0.3% | |||
Old Republic International Corp. | 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.
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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsfuscif.gif)
Average Annual Total Returns1,2,4
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental US Small Company Index Fund (4/2/07) | 37.55 | % | 21.46 | % | 8.17 | % | |||||||||
Russell Fundamental U.S. Small Company Index | 38.01 | % | n/a | n/a | |||||||||||
Fundamental US Small Company Spliced Index5 | 38.01 | % | 21.86 | % | 8.76 | % | |||||||||
Fund Category: Morningstar Small Blend | 35.17 | % | 17.34 | % | 6.01 | % |
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.
For index definitions, please see the Glossary.
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 Index Series. FTSE is a trademark owned by the London Stock Exchange Group companies 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.
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 | On October 27, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 27, 2009 is that of the fund’s former Institutional Shares. | |
3 | The inception date of the Russell Fundamental U.S. Small Company Index is February 24, 2011. The fund began tracking the index on October 19, 2012. | |
4 | 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. | |
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 US Large Company Index (Net) (the index), which measures the performance of the large company size segment by fundamental overall company scores that is created using as the universe the companies in the Russell Developed ex-U.S. Index. 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 30.12% in for the 12-month period that ended October 31, 2013, compared with the index, which returned 30.79%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index. In addition, timing differences in foreign exchange calculations detracted from the fund’s relative performance.*
Market Highlights. Stocks in developed international markets performed well, generating double-digit overall returns for the 12-month report period. Relative stability in the euro zone, some pockets of improvement in a few developed international economies, and central bank policies aimed at keeping interest rates low were some of the factors supporting stocks.
Contributors and Detractors. Japanese stocks were the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of approximately 20% of the fund. In U.S. dollar terms, the fund’s Japanese stocks returned approximately 39%. One significant contributor in this market was Toyota Motor Corporation, a passenger vehicle company. The fund’s Toyota Motor Corporation holdings returned approximately 71% in U.S. dollar terms.
U.K. stocks also provided a meaningful contribution to the fund’s total return, and represented an average weight of approximately 20% of the fund. In U.S. dollar terms, the fund’s U.K. stocks returned approximately 25%. One significant contributor in this market was Vodafone Group PLC, a mobile telecommunications company. The fund’s Vodafone Group PLC holdings returned approximately 41% in U.S. dollar terms.
Stocks from Greece detracted the most from the fund’s total return from a country perspective. These stocks represented an average weight of less than 1% of the fund, and in U.S. dollar terms, generated a very narrowly negative return. One significant detractor in this market was National Bank of Greece S.A., which offers retail and corporate banking services. The fund’s National Bank of Greece S.A. holdings returned approximately -72% in U.S. dollar terms.
Israeli stocks generated positive overall returns for the fund, but were some of the weakest contributors from a country perspective. These stocks represented an average weight of less than 1% of the fund, and in U.S. dollar terms, returned approximately 9%. One significant detractor in this market was Israel Chemicals Limited, a chemical and fertilizer products company. The fund’s Israel Chemicals Limited holdings returned approximately -29% in U.S. dollar terms.
As of 10/31/13:
Statistics
Number of Holdings | 790 | |||
Weighted Average Market Cap ($ x 1,000,000) | $56,999 | |||
Price/Earnings Ratio (P/E) | 27.5 | |||
Price/Book Ratio (P/B) | 0.6 | |||
Portfolio Turnover Rate | 22% |
Sector Weightings % of Investments
Financials | 18.9% | |||
Energy | 12.8% | |||
Industrials | 12.7% | |||
Consumer Discretionary | 10.3% | |||
Telecommunication Services | 8.9% | |||
Materials | 8.9% | |||
Consumer Staples | 8.5% | |||
Utilities | 6.2% | |||
Health Care | 6.1% | |||
Information Technology | 4.6% | |||
Other | 2.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
BP plc | 2.4% | |||
Total S.A. | 2.0% | |||
Royal Dutch Shell plc, A Shares | 1.7% | |||
Vodafone Group plc | 1.6% | |||
HSBC Holdings plc | 1.3% | |||
Royal Dutch Shell plc, B Shares | 1.2% | |||
Telefonica S.A. | 1.2% | |||
Banco Santander S.A. | 1.2% | |||
Nestle S.A. – Reg’d | 1.0% | |||
Toyota Motor Corp. | 1.0% | |||
Total | 14.6% |
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. |
10 Schwab Fundamental Index Funds
Table of Contents
Schwab Fundamental International Large Company Index Fund
Performance and Fund Facts as of 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsfilcif.gif)
Average Annual Total Returns1,2,4
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental International Large Company Index Fund (4/2/07) | 30.12 | % | 12.35 | % | 1.28 | % | |||||||||
Russell Fundamental Developed ex-U.S. Large Company Index (Net) | 30.79 | % | n/a | n/a | |||||||||||
Fundamental Developed ex-US Large Company Spliced Index5 | 30.79 | % | 13.44 | % | 2.21 | % | |||||||||
Fund Category: Morningstar Foreign Large Value | 24.94 | % | 11.32 | % | 0.38 | % |
Fund Expense Ratios6: Net 0.36%; Gross 0.57%
Country Weightings % of Investments
Japan | 19.2% | |||
United Kingdom | 17.3% | |||
France | 11.5% | |||
Germany | 9.3% | |||
Canada | 5.8% | |||
Switzerland | 5.6% | |||
Netherlands | 5.5% | |||
Australia | 4.6% | |||
Italy | 4.5% | |||
Spain | 4.5% | |||
Other Countries | 12.2% | |||
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.
For index definitions, please see the Glossary.
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 Index Series. FTSE is a trademark owned by the London Stock Exchange Group companies 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.
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 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 19, 2009 is that of the fund’s former Institutional Shares. | |
3 | The inception date of the Russell Fundamental Developed ex-U.S. Large Company Index (Net) is February 24, 2011. The fund began tracking the index on October 19, 2012. | |
4 | 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. | |
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 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. 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 Fundamental Index Funds 11
Table of Contents
Schwab Fundamental International Small Company Index Fund
The Schwab Fundamental International Small 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. Small Company Index (Net) (the index), which measures the performance of the small company size segment by fundamental overall company scores that is created using as the universe the companies in the Russell Developed ex-U.S. Index. 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 29.75% for the 12-month period that ended October 31, 2013, compared with the index, which returned 30.78%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index. In addition, timing differences in foreign exchange calculations detracted from the fund’s relative performance.*
Market Highlights. Stocks in developed international markets performed well, generating double-digit overall returns for the 12-month report period. Relative stability in the euro zone, some pockets of improvement in a few developed international economies, and central bank policies aimed at keeping interest rates low were some of the factors supporting stocks.
Contributors and Detractors. Japanese stocks were the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of approximately 37% of the fund. In U.S. dollar terms, the fund’s Japanese stocks returned approximately 31%. One significant contributor in this market was Aiful Corporation, a consumer financing firm. The fund’s Aiful Corporation holdings returned approximately 250% in U.S. dollar terms.
U.K. stocks also provided a meaningful contribution to the fund’s total return, and represented an average weight of approximately 13% of the fund. In U.S. dollar terms, the fund’s U.K. stocks returned approximately 38%. One significant contributor in this market was Invensys plc, a production assets and energy resources management company. The fund’s Invensys plc holdings returned approximately 122% in U.S. dollar terms.
Stocks from Greece detracted the most from the fund’s total return. These stocks represented an average weight of less than 1% of the fund, and in U.S. dollar terms, returned approximately -21%. One significant detractor in this market was Eurobank Ergasias SA, which offers commercial and retail banking services. The fund’s Eurobank Ergasias SA holdings returned approximately -78% in U.S. dollar terms.
Stocks from Singapore contributed to the fund’s total return, but represented relatively weak performers for the fund. Stocks from Singapore represented approximately 2% of the fund, while returning roughly 1% in U.S. dollar terms. One significant detractor in this market was Jardine Cycle & Carriage Limited, a motor vehicle company. The fund’s Jardine Cycle & Carriage Limited holdings returned approximately -13% in U.S. dollar terms.
As of 10/31/13:
Statistics
Number of Holdings | 1,263 | |||
Weighted Average Market Cap ($ x 1,000,000) | $3,483 | |||
Price/Earnings Ratio (P/E) | 36.3 | |||
Price/Book Ratio (P/B) | 0.9 | |||
Portfolio Turnover Rate | 29% |
Sector Weightings % of Investments
Industrials | 24.5% | |||
Consumer Discretionary | 18.7% | |||
Financials | 16.9% | |||
Materials | 10.1% | |||
Information Technology | 8.8% | |||
Consumer Staples | 7.0% | |||
Health Care | 4.3% | |||
Energy | 4.0% | |||
Utilities | 1.7% | |||
Telecommunication Services | 1.0% | |||
Other | 3.0% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
iShares MSCI EAFE Small Cap ETF | 2.8% | |||
Gamesa Corp. Tecnologica S.A. | 0.4% | |||
Enterprise Inns plc | 0.3% | |||
Methanex Corp. | 0.2% | |||
NGK Insulators Ltd. | 0.2% | |||
NTN Corp. | 0.2% | |||
USG People N.V. | 0.2% | |||
TOTO Ltd. | 0.2% | |||
SBM Offshore N.V. | 0.2% | |||
Daiwa Securities Group, Inc. | 0.2% | |||
Total | 4.9% |
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.
* | 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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsfiscif.gif)
Average Annual Total Returns1,2,4
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental International Small Company Index Fund (1/31/08) | 29.75 | % | 17.84 | % | 6.19 | % | |||||||||
Russell Fundamental Developed ex-U.S. Small Company Index (Net) | 30.78 | % | n/a | n/a | |||||||||||
Fundamental Developed ex-US Small Company Spliced Index5 | 30.78 | % | 19.77 | % | 7.87 | % | |||||||||
Fund Category: Morningstar Foreign Small/Mid Blend | 26.78 | % | 17.96 | % | 5.00 | % |
Fund Expense Ratios6: Net 0.49%; Gross 0.92%
Country Weightings % of Investments
Japan | 37.0% | |||
United Kingdom | 12.9% | |||
Canada | 8.0% | |||
France | 4.7% | |||
Australia | 4.6% | |||
Germany | 3.7% | |||
Italy | 2.9% | |||
Switzerland | 2.9% | |||
United States | 2.8% | |||
Hong Kong | 2.6% | |||
Other Countries | 17.9% | |||
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.
For index definitions, please see the Glossary.
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 Index Series. FTSE is a trademark owned by the London Stock Exchange Group companies 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.
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 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 19, 2009 is that of the fund’s former Institutional Shares. | |
3 | The inception date of the Russell Fundamental Developed ex-US Small Company Index (Net) is February 24, 2011. The fund began tracking the index on October 19, 2012. | |
4 | 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. | |
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 from inception of the fund until the close of business on October 18, 2012 and the Russell Fundamental Developed ex-US 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) 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 that is created using as the universe the companies in the Russell Emerging Markets Index. To pursue its investment objective, the fund uses a replication investment approach where possible, and maintains a tight allocation across all 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 7.11% for the 12-month period that ended October 31, 2013, compared with the index, which returned 8.42%. Differences between the return of the fund and the return of the index may be attributable to, among other things, the operational and transactional costs incurred by the fund and not the index. In addition, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings detracted from the fund’s relative performance,* as did investments in Russian stocks through the use of depositary receipts,** which generally underperformed the underlying stocks during the report period.
Market Highlights. Emerging market stocks generated positive overall returns in U.S. dollar terms, while facing financial headwinds compared with many developed international markets. Some signs of slowing economic growth in major emerging markets early in 2013, and relatively high inflation, reduced the performance of these stocks, as did the depreciation of currencies from countries such as India, Russia, and Brazil versus the U.S. dollar. However, as the anticipated “tapering” by the U.S. Federal Reserve failed to materialize, the performance of emerging market stocks began to improve.
Contributors and Detractors. South Korean stocks were the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of approximately 22% of the fund. In U.S. dollar terms, the fund’s South Korean stocks returned approximately 13%. One significant contributor in this market was Samsung Electronics, a communications equipment manufacturer. The fund’s Samsung Electronics holdings returned approximately 16% in U.S. dollar terms. Another contributor in this market was SK Telecom Co., Ltd., a telecommunications carrier. The fund’s SK Telecom Co., Ltd., holdings returned approximately 60%.
Stocks from Brazil detracted the most from the fund’s total return. These stocks represented an average weight of approximately 13% of the fund, and in U.S. dollar terms, returned approximately -1%. One significant detractor in this market was Petroleo Brasileiro S.A., an integrated oil company. The fund’s Petroleo Brasileiro S.A. common stock holdings returned approximately -16% in U.S. dollar terms. The fund also owned preferred stock of Petroleo Brasileiro S.A. that returned approximately -7% and also detracted from performance.
As of 10/31/13:
Statistics
Number of Holdings | 281 | |||
Weighted Average Market Cap ($ x 1,000,000) | $42,072 | |||
Price/Earnings Ratio (P/E) | 9.6 | |||
Price/Book Ratio (P/B) | 1.3 | |||
Portfolio Turnover Rate | 22% |
Sector Weightings % of Investments
Energy | 25.1% | |||
Financials | 16.4% | |||
Information Technology | 14.3% | |||
Materials | 12.6% | |||
Telecommunication Services | 10.5% | |||
Consumer Discretionary | 6.1% | |||
Industrials | 5.5% | |||
Utilities | 3.7% | |||
Consumer Staples | 2.6% | |||
Other | 3.2% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Gazprom ADR | 4.2% | |||
LUKOIL ADR | 4.2% | |||
Samsung Electronics Co., Ltd. | 3.8% | |||
Petroleo Brasileiro S.A. | 2.1% | |||
Surgutneftegas ADR | 1.7% | |||
China Mobile Ltd. | 1.7% | |||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1.6% | |||
China Construction Bank Corp., Class H | 1.6% | |||
Petroleo Brasileiro S.A. – Petrobras | 1.6% | |||
POSCO | 1.4% | |||
Total | 23.9% |
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.
* | 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. | |
** | As of September 23, 2013, the fund was able to invest directly in equities from Russia. | |
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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsfemif.gif)
Average Annual Total Returns1,2,4
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental Emerging Markets Large Company Index Fund (1/31/08) | 7.11 | % | 13.50 | % | 1.36 | % | |||||||||
Russell Fundamental Emerging Markets Large Company Index (Net) | 8.42 | % | n/a | n/a | |||||||||||
Fundamental Emerging Markets Large Company Spliced Index5 | 8.42 | % | 16.00 | % | 3.36 | % | |||||||||
Fund Category: Morningstar Diversified Emerging Markets | 7.59 | % | 14.43 | % | 0.61 | % |
Fund Expense Ratios6: Net 0.50%; Gross 0.92%
Country Weightings % of Investments
Republic of Korea | 20.1% | |||
Russia | 15.3% | |||
Brazil | 13.4% | |||
Taiwan | 12.2% | |||
China | 11.4% | |||
South Africa | 7.0% | |||
Mexico | 3.4% | |||
India | 3.2% | |||
Other Countries | 14.0% | |||
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.
For index definitions, please see the Glossary.
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 Index Series. FTSE is a trademark owned by the London Stock Exchange Group companies 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.
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 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 19, 2009 is that of the fund’s former Institutional Shares. | |
3 | The inception date of the Russell Fundamental Emerging Markets Large Company Index (Net) is February 24, 2011. The fund began tracking the index on October 19, 2012. | |
4 | 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. | |
5 | The Fundamental Emerging Markets Large Company Spliced Index is an internally calculated index, comprised of the FTSE RAFI Emerging Index 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. 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 Fundamental Index Funds 15
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2013 and held through October 31, 2013.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/13 | at 10/31/13 | 5/1/13–10/31/13 | |||||||||||||
Schwab Fundamental US Large Company Index Fund | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000.00 | $ | 1,109.80 | $ | 1.86 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000.00 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab Fundamental US Small Company Index Fund | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000.00 | $ | 1,159.70 | $ | 1.91 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000.00 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab Fundamental International Large Company Index Fund | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000.00 | $ | 1,128.40 | $ | 1.88 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000.00 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab Fundamental International Small Company Index Fund | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,094.50 | $ | 2.64 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000.00 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | ||||||||||||||||
Actual Return | 0.52% | $ | 1,000.00 | $ | 1,039.40 | $ | 2.67 | |||||||||
Hypothetical 5% Return | 0.52% | $ | 1,000.00 | $ | 1,022.58 | $ | 2.65 |
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 365 days of the fiscal year. |
16 Schwab Fundamental Index Funds
Table of Contents
Schwab Fundamental US Large Company Index Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.76 | 9.51 | 9.05 | 7.63 | 6.47 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.24 | 0.21 | 0.18 | 0.14 | 0.10 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.89 | 1.22 | 0.43 | 1.37 | 1.26 | |||||||||||||||||
Total from investment operations | 3.13 | 1.43 | 0.61 | 1.51 | 1.36 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.18 | ) | (0.15 | ) | (0.09 | ) | (0.20 | ) | ||||||||||||
Net asset value at end of period | 13.65 | 10.76 | 9.51 | 9.05 | 7.63 | |||||||||||||||||
Total return (%) | 29.67 | 15.29 | 6.74 | 19.95 | 22.04 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.35 | 0.32 | 2 | 0.35 | 0.35 | 0.35 | ||||||||||||||||
Gross operating expenses | 0.41 | 0.44 | 0.44 | 0.45 | 0.53 | |||||||||||||||||
Net investment income (loss) | 2.03 | 2.13 | 2.06 | 1.77 | 1.88 | |||||||||||||||||
Portfolio turnover rate | 10 | 32 | 3 | 11 | 27 | 28 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 3,020 | 1,960 | 1,490 | 1,019 | 663 |
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.
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 notes 17
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | .7% | Common Stock | 2,186,526,479 | 2,982,439,540 | ||||||||
1 | .0% | Other Investment Company | 29,664,810 | 29,664,810 | ||||||||
0 | .1% | Short-Term Investment | 2,099,986 | 2,099,986 | ||||||||
99 | .8% | Total Investments | 2,218,291,275 | 3,014,204,336 | ||||||||
0 | .6% | Collateral Invested for Securities on Loan | 19,475,816 | 19,475,816 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (13,248,634 | ) | ||||||||
100 | .0% | Net Assets | 3,020,431,518 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.7% of net assets | ||||||||||||
Automobiles & Components 1.1% | ||||||||||||
Other Securities | 1.1 | 32,498,866 | ||||||||||
Banks 2.3% | ||||||||||||
Wells Fargo & Co. | 652,425 | 0.9 | 27,852,023 | |||||||||
Other Securities | 1.4 | 42,466,368 | ||||||||||
2.3 | 70,318,391 | |||||||||||
Capital Goods 8.2% | ||||||||||||
3M Co. | 105,075 | 0.4 | 13,223,689 | |||||||||
General Electric Co. | 1,779,325 | 1.5 | 46,511,555 | |||||||||
United Technologies Corp. | 172,815 | 0.6 | 18,361,594 | |||||||||
Other Securities | 5.7 | 169,210,381 | ||||||||||
8.2 | 247,307,219 | |||||||||||
Commercial & Professional Supplies 0.8% | ||||||||||||
Other Securities | 0.8 | 24,163,206 | ||||||||||
Consumer Durables & Apparel 1.0% | ||||||||||||
Other Securities | 1.0 | 31,037,390 | ||||||||||
Consumer Services 1.5% | ||||||||||||
McDonald’s Corp. | 168,580 | 0.5 | 16,271,342 | |||||||||
Other Securities | 1.0 | 28,129,763 | ||||||||||
1.5 | 44,401,105 | |||||||||||
Diversified Financials 6.8% | ||||||||||||
Bank of America Corp. | 3,172,660 | 1.5 | 44,290,334 | |||||||||
Berkshire Hathaway, Inc., Class B * | 179,011 | 0.7 | 20,600,586 | |||||||||
Citigroup, Inc. | 563,033 | 0.9 | 27,464,750 | |||||||||
JPMorgan Chase & Co. | 704,442 | 1.2 | 36,306,941 | |||||||||
The Charles Schwab Corp. (a) | 138,015 | 0.1 | 3,126,040 | |||||||||
Other Securities | 2.4 | 74,756,884 | ||||||||||
6.8 | 206,545,535 | |||||||||||
Energy 15.1% | ||||||||||||
Chevron Corp. | 589,905 | 2.3 | 70,765,004 | |||||||||
ConocoPhillips | 828,510 | 2.0 | 60,729,783 | |||||||||
Exxon Mobil Corp. | 1,516,084 | 4.5 | 135,871,448 | |||||||||
Occidental Petroleum Corp. | 148,570 | 0.5 | 14,274,606 | |||||||||
Phillips 66 | 348,355 | 0.7 | 22,444,513 | |||||||||
Schlumberger Ltd. | 150,700 | 0.5 | 14,123,604 | |||||||||
Valero Energy Corp. | 401,725 | 0.5 | 16,539,018 | |||||||||
Other Securities | 4.1 | 120,994,392 | ||||||||||
15.1 | 455,742,368 | |||||||||||
Food & Staples Retailing 4.3% | ||||||||||||
Costco Wholesale Corp. | 110,415 | 0.4 | 13,028,970 | |||||||||
CVS Caremark Corp. | 388,435 | 0.8 | 24,183,963 | |||||||||
Wal-Mart Stores, Inc. | 544,625 | 1.4 | 41,799,969 | |||||||||
Walgreen Co. | 291,070 | 0.6 | 17,242,987 | |||||||||
Other Securities | 1.1 | 34,540,904 | ||||||||||
4.3 | 130,796,793 | |||||||||||
Food, Beverage & Tobacco 5.1% | ||||||||||||
Altria Group, Inc. | 403,680 | 0.5 | 15,029,006 | |||||||||
Mondelez International, Inc., Class A | 439,592 | 0.5 | 14,787,875 | |||||||||
PepsiCo, Inc. | 240,508 | 0.7 | 20,224,318 | |||||||||
Philip Morris International, Inc. | 216,020 | 0.6 | 19,251,702 | |||||||||
The Coca-Cola Co. | 401,330 | 0.5 | 15,880,628 | |||||||||
Other Securities | 2.3 | 67,152,882 | ||||||||||
5.1 | 152,326,411 | |||||||||||
Health Care Equipment & Services 5.8% | ||||||||||||
McKesson Corp. | 88,500 | 0.5 | 13,836,090 | |||||||||
UnitedHealth Group, Inc. | 321,775 | 0.7 | 21,964,361 | |||||||||
WellPoint, Inc. | 259,170 | 0.7 | 21,977,616 | |||||||||
Other Securities | 3.9 | 117,275,515 | ||||||||||
5.8 | 175,053,582 | |||||||||||
Household & Personal Products 2.2% | ||||||||||||
The Procter & Gamble Co. | 556,495 | 1.5 | 44,936,971 | |||||||||
Other Securities | 0.7 | 21,039,301 | ||||||||||
2.2 | 65,976,272 |
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 | ($) | |||||||||
Insurance 3.6% | ||||||||||||
The Travelers Cos., Inc. | 173,595 | 0.5 | 14,981,248 | |||||||||
Other Securities | 3.1 | 93,686,915 | ||||||||||
3.6 | 108,668,163 | |||||||||||
Materials 3.7% | ||||||||||||
Other Securities | 3.7 | 112,283,005 | ||||||||||
Media 4.1% | ||||||||||||
Comcast Corp., Class A | 325,640 | 0.5 | 15,493,951 | |||||||||
The Walt Disney Co. | 296,150 | 0.7 | 20,312,928 | |||||||||
Time Warner, Inc. | 334,588 | 0.8 | 22,999,579 | |||||||||
Other Securities | 2.1 | 63,635,808 | ||||||||||
4.1 | 122,442,266 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.5% | ||||||||||||
Amgen, Inc. | 127,755 | 0.5 | 14,819,580 | |||||||||
Bristol-Myers Squibb Co. | 244,850 | 0.4 | 12,859,522 | |||||||||
Johnson & Johnson | 432,095 | 1.3 | 40,016,318 | |||||||||
Merck & Co., Inc. | 387,857 | 0.6 | 17,488,472 | |||||||||
Pfizer, Inc. | 1,253,499 | 1.3 | 38,457,349 | |||||||||
Other Securities | 1.4 | 43,458,433 | ||||||||||
5.5 | 167,099,674 | |||||||||||
Real Estate 0.9% | ||||||||||||
Other Securities | 0.9 | 27,749,418 | ||||||||||
Retailing 4.8% | ||||||||||||
Lowe’s Cos., Inc. | 340,555 | 0.6 | 16,952,828 | |||||||||
Target Corp. | 219,495 | 0.5 | 14,221,081 | |||||||||
The Home Depot, Inc. | 232,296 | 0.6 | 18,093,535 | |||||||||
Other Securities | 3.1 | 95,354,659 | ||||||||||
4.8 | 144,622,103 | |||||||||||
Semiconductors & Semiconductor Equipment 2.3% | ||||||||||||
Intel Corp. | 1,295,910 | 1.0 | 31,659,081 | |||||||||
Other Securities | 1.3 | 38,914,912 | ||||||||||
2.3 | 70,573,993 | |||||||||||
Software & Services 5.8% | ||||||||||||
International Business Machines Corp. | 190,495 | 1.1 | 34,138,609 | |||||||||
Microsoft Corp. | 1,635,015 | 1.9 | 57,797,780 | |||||||||
Other Securities | 2.8 | 82,535,353 | ||||||||||
5.8 | 174,471,742 | |||||||||||
Technology Hardware & Equipment 4.3% | ||||||||||||
Apple, Inc. | 35,047 | 0.6 | 18,306,800 | |||||||||
Cisco Systems, Inc. | 879,565 | 0.7 | 19,790,213 | |||||||||
Hewlett-Packard Co. | 1,600,175 | 1.3 | 38,996,265 | |||||||||
Other Securities | 1.7 | 52,671,111 | ||||||||||
4.3 | 129,764,389 | |||||||||||
Telecommunication Services 3.8% | ||||||||||||
AT&T, Inc. | 1,685,685 | 2.0 | 61,021,797 | |||||||||
Verizon Communications, Inc. | 790,530 | 1.3 | 39,929,670 | |||||||||
Other Securities | 0.5 | 14,258,955 | ||||||||||
3.8 | 115,210,422 | |||||||||||
Transportation 1.6% | ||||||||||||
Other Securities | 1.6 | 49,361,989 | ||||||||||
Utilities 4.1% | ||||||||||||
Other Securities | 4.1 | 124,025,238 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $2,186,526,479) | 2,982,439,540 | |||||||||||
Other Investment Company 1.0% of net assets | ||||||||||||
Money Market Fund 1.0% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (e) | 29,664,810 | 1.0 | 29,664,810 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $29,664,810) | 29,664,810 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 2,099,986 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $2,099,986) | 2,099,986 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.6% of net assets | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (e) | 19,475,816 | 0.6 | 19,475,816 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $19,475,816) | 19,475,816 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13 tax basis cost of the fund’s investments was $2,234,297,819 and the unrealized appreciation and depreciation were $793,590,567 and ($13,684,050), respectively, with a net unrealized appreciation of $779,906,517.
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. Securities on loan were valued at $20,152,619. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 390 | 34,144,500 | 476,776 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $2,982,439,540 | $— | $— | $2,982,439,540 | ||||||||||||
Other Investment Company1 | 29,664,810 | — | — | 29,664,810 | ||||||||||||
Short-Term Investment1 | — | 2,099,986 | — | 2,099,986 | ||||||||||||
Total | $3,012,104,350 | $2,099,986 | $— | $3,014,204,336 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $19,475,816 | $— | $— | $19,475,816 | ||||||||||||
Futures Contract2 | 476,776 | — | — | 476,776 |
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | $170,860 | $9,858 | ($10,637 | ) | $— | ($170,081 | ) | $— | $— | $— | ||||||||||||||||||||||
Total | $170,860 | $9,858 | ($10,637 | ) | $— | ($170,081 | ) | $— | $— | $— | ||||||||||||||||||||||
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, 2013.
20 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated issuers, at value (cost $2,206,014) | $3,126,040 | |||||
Investments in unaffiliated issuers, at value (cost $2,216,085,261) including securities on loan of $20,152,619 | + | 3,011,078,296 | ||||
Total investments, at value (cost $2,218,291,275) | 3,014,204,336 | |||||
Collateral invested for securities on loan | 19,475,816 | |||||
Receivables: | ||||||
Fund shares sold | 6,731,013 | |||||
Dividends | 3,644,711 | |||||
Income from securities on loan | 49,572 | |||||
Foreign tax reclaims | 727 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 39,575 | ||||
Total assets | 3,044,145,751 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 19,475,816 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 44,612 | |||||
Shareholder service fees | 76,901 | |||||
Fund shares redeemed | 3,078,327 | |||||
Variation margin on futures contracts | 187,200 | |||||
Accrued expenses | + | 851,377 | ||||
Total liabilities | 23,714,233 | |||||
Net Assets | ||||||
Total assets | 3,044,145,751 | |||||
Total liabilities | − | 23,714,233 | ||||
Net assets | $3,020,431,518 | |||||
Net Assets by Source | ||||||
Capital received from investors | 2,216,667,533 | |||||
Net investment income not yet distributed | 36,913,755 | |||||
Net realized capital losses | (29,539,607 | ) | ||||
Net unrealized capital appreciation | 796,389,837 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$3,020,431,518 | 221,246,140 | $13.65 |
See financial notes 21
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated issuer | $34,594 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $18,880) | 58,847,143 | |||||
Interest | 5,168 | |||||
Securities on loan | + | 560,098 | ||||
Total investment income | 59,447,003 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 5,884,151 | |||||
Shareholder service fees | 2,040,919 | |||||
Index fee | 1,420,972 | |||||
Transfer agent fees | 247,135 | |||||
Registration fees | 170,924 | |||||
Shareholder reports | 162,349 | |||||
Portfolio accounting fees | 92,096 | |||||
Professional fees | 86,921 | |||||
Custodian fees | 66,990 | |||||
Independent trustees’ fees | 23,321 | |||||
Interest expense | 81 | |||||
Other expenses | + | 47,745 | ||||
Total expenses | 10,243,604 | |||||
Expense reduction by CSIM and its affiliates | − | 1,518,737 | ||||
Custody credits | − | 21 | ||||
Net expenses | − | 8,724,846 | ||||
Net investment income | 50,722,157 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on affiliated issuer | (4,883 | ) | ||||
Net realized gains on unaffiliated investments | 48,900,523 | |||||
Net realized gains on futures contracts | + | 8,840,644 | ||||
Net realized gains | 57,736,284 | |||||
Net change in unrealized appreciation on affiliated issuer | 1,297,224 | |||||
Net change in unrealized appreciation on unaffiliated investments | 521,076,437 | |||||
Net change in unrealized appreciation on futures contracts | + | 858,451 | ||||
Net change in unrealized appreciation | + | 523,232,112 | ||||
Net realized and unrealized gains | 580,968,396 | |||||
Increase in net assets resulting from operations | $631,690,553 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $50,722,157 | $37,721,180 | ||||||||
Net realized gains | 57,736,284 | 38,504,726 | ||||||||
Net change in unrealized appreciation | + | 523,232,112 | 170,685,750 | |||||||
Increase in net assets from operations | 631,690,553 | 246,911,656 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($42,909,493 | ) | ($28,518,465 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 84,032,984 | $1,024,135,625 | 67,538,254 | $676,863,199 | ||||||||||||||
Shares reinvested | 2,230,842 | 23,803,086 | 1,765,688 | 16,261,985 | ||||||||||||||
Shares redeemed | + | (47,078,841 | ) | (576,085,377 | ) | (43,856,574 | ) | (441,499,603 | ) | |||||||||
Net transactions in fund shares | 39,184,985 | $471,853,334 | 25,447,368 | $251,625,581 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 182,061,155 | $1,959,797,124 | 156,613,787 | $1,489,778,352 | ||||||||||||||
Total increase | + | 39,184,985 | 1,060,634,394 | 25,447,368 | 470,018,772 | |||||||||||||
End of period | 221,246,140 | $3,020,431,518 | 182,061,155 | $1,959,797,124 | ||||||||||||||
Net investment income not yet distributed | $36,913,755 | $29,130,846 |
See financial notes 23
Table of Contents
Schwab Fundamental US Small Company Index Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.31 | 10.11 | 10.10 | 7.88 | 6.30 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.16 | 0.15 | 0.11 | 0.09 | 0.06 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.35 | 0.88 | 0.47 | 2.19 | 1.59 | |||||||||||||||||
Total from investment operations | 3.51 | 1.03 | 0.58 | 2.28 | 1.65 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.20 | ) | (0.12 | ) | (0.10 | ) | (0.06 | ) | (0.07 | ) | ||||||||||||
Distributions from net realized gains | (0.84 | ) | (0.71 | ) | (0.47 | ) | — | — | ||||||||||||||
Total distributions | (1.04 | ) | (0.83 | ) | (0.57 | ) | (0.06 | ) | (0.07 | ) | ||||||||||||
Net asset value at end of period | 12.78 | 10.31 | 10.11 | 10.10 | 7.88 | |||||||||||||||||
Total return (%) | 37.55 | 11.37 | 5.55 | 29.07 | 26.68 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.35 | 0.32 | 2 | 0.35 | 0.35 | 0.35 | ||||||||||||||||
Gross operating expenses | 0.48 | 0.50 | 0.50 | 0.53 | 0.60 | |||||||||||||||||
Net investment income (loss) | 1.41 | 1.46 | 1.18 | 1.03 | 1.00 | |||||||||||||||||
Portfolio turnover rate | 27 | 92 | 3 | 35 | 41 | 29 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 849 | 619 | 563 | 412 | 298 |
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.
3 Portfolio turnover would have been 29%, if rebalancing trades had not been included due to a change in the fund’s index.
24 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .8% | Common Stock | 612,399,768 | 839,594,596 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .9% | Other Investment Company | 7,423,228 | 7,423,228 | ||||||||
0 | .1% | Short-Term Investment | 714,995 | 714,995 | ||||||||
99 | .8% | Total Investments | 620,537,991 | 847,732,819 | ||||||||
2 | .3% | Collateral Invested for Securities on Loan | 19,735,329 | 19,735,329 | ||||||||
(2 | .1)% | Other Assets and Liabilities, Net | (18,055,727 | ) | ||||||||
100 | .0% | Net Assets | 849,412,421 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.8% of net assets | ||||||||||||
Automobiles & Components 1.0% | ||||||||||||
Thor Industries, Inc. | 37,600 | 0.3 | 2,181,176 | |||||||||
Other Securities | 0.7 | 6,187,516 | ||||||||||
1.0 | 8,368,692 | |||||||||||
Banks 4.7% | ||||||||||||
CapitalSource, Inc. | 161,700 | 0.2 | 2,115,036 | |||||||||
Synovus Financial Corp. | 594,900 | 0.2 | 1,933,425 | |||||||||
Other Securities | 4.3 | 35,695,390 | ||||||||||
4.7 | 39,743,851 | |||||||||||
Capital Goods 10.7% | ||||||||||||
Carlisle Cos., Inc. | 27,200 | 0.2 | 1,976,896 | |||||||||
Chicago Bridge & Iron Co., N.V. | 29,698 | 0.3 | 2,200,325 | |||||||||
Huntington Ingalls Industries, Inc. | 34,600 | 0.3 | 2,475,630 | |||||||||
Lincoln Electric Holdings, Inc. | 30,400 | 0.2 | 2,104,896 | |||||||||
Spirit AeroSystems Holdings, Inc., Class A * | 74,900 | 0.2 | 1,999,081 | |||||||||
Trinity Industries, Inc. | 44,100 | 0.3 | 2,232,783 | |||||||||
Other Securities | 9.2 | 78,240,367 | ||||||||||
10.7 | 91,229,978 | |||||||||||
Commercial & Professional Supplies 4.3% | ||||||||||||
Other Securities | 4.3 | 36,907,010 | ||||||||||
Consumer Durables & Apparel 3.9% | ||||||||||||
Hanesbrands, Inc. | 30,100 | 0.2 | 2,050,412 | |||||||||
Polaris Industries, Inc. | 14,700 | 0.2 | 1,924,965 | |||||||||
The Jones Group, Inc. | 135,900 | 0.2 | 2,111,886 | |||||||||
Other Securities | 3.3 | 27,328,640 | ||||||||||
3.9 | 33,415,903 | |||||||||||
Consumer Services 5.4% | ||||||||||||
Chipotle Mexican Grill, Inc. * | 3,782 | 0.2 | 1,993,001 | |||||||||
ITT Educational Services, Inc. (a)* | 67,935 | 0.3 | 2,725,552 | |||||||||
Other Securities | 4.9 | 41,260,560 | ||||||||||
5.4 | 45,979,113 | |||||||||||
Diversified Financials 3.3% | ||||||||||||
Federated Investors, Inc., Class B (a) | 71,700 | 0.2 | 1,944,504 | |||||||||
TD Ameritrade Holding Corp. | 86,800 | 0.3 | 2,366,168 | |||||||||
Other Securities | 2.8 | 23,561,878 | ||||||||||
3.3 | 27,872,550 | |||||||||||
Energy 6.5% | ||||||||||||
Oceaneering International, Inc. | 24,900 | 0.3 | 2,138,412 | |||||||||
Oil States International, Inc. * | 20,400 | 0.3 | 2,216,052 | |||||||||
Tidewater, Inc. | 37,400 | 0.3 | 2,252,228 | |||||||||
Whiting Petroleum Corp. * | 29,900 | 0.2 | 2,000,011 | |||||||||
Other Securities | 5.4 | 46,369,079 | ||||||||||
6.5 | 54,975,782 | |||||||||||
Food & Staples Retailing 1.0% | ||||||||||||
Rite Aid Corp. * | 373,200 | 0.2 | 1,989,156 | |||||||||
United Natural Foods, Inc. * | 26,900 | 0.2 | 1,922,005 | |||||||||
Other Securities | 0.6 | 4,473,111 | ||||||||||
1.0 | 8,384,272 | |||||||||||
Food, Beverage & Tobacco 2.0% | ||||||||||||
Other Securities | 2.0 | 16,572,100 | ||||||||||
Health Care Equipment & Services 4.2% | ||||||||||||
Kindred Healthcare, Inc. | 140,100 | 0.2 | 1,944,588 | |||||||||
Other Securities | 4.0 | 34,151,237 | ||||||||||
4.2 | 36,095,825 | |||||||||||
Household & Personal Products 0.5% | ||||||||||||
Nu Skin Enterprises, Inc., Class A | 19,120 | 0.3 | 2,235,702 | |||||||||
Other Securities | 0.2 | 2,080,781 | ||||||||||
0.5 | 4,316,483 | |||||||||||
Insurance 4.2% | ||||||||||||
Aspen Insurance Holdings Ltd. | 55,800 | 0.3 | 2,176,758 | |||||||||
CNO Financial Group, Inc. | 137,800 | 0.3 | 2,146,924 | |||||||||
Kemper Corp. | 55,800 | 0.2 | 2,065,716 | |||||||||
Old Republic International Corp. | 137,300 | 0.3 | 2,305,267 | |||||||||
Primerica, Inc. | 46,000 | 0.2 | 1,975,700 |
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 | ($) | |||||||||
Protective Life Corp. | 48,100 | 0.3 | 2,216,448 | |||||||||
StanCorp Financial Group, Inc. | 36,300 | 0.3 | 2,138,070 | |||||||||
Other Securities | 2.3 | 21,081,404 | ||||||||||
4.2 | 36,106,287 | |||||||||||
Materials 5.9% | ||||||||||||
Cabot Corp. | 42,000 | 0.2 | 1,957,620 | |||||||||
Crown Holdings, Inc. * | 44,400 | 0.2 | 1,935,840 | |||||||||
Ferro Corp. * | 160,230 | 0.2 | 2,055,751 | |||||||||
Other Securities | 5.3 | 43,992,394 | ||||||||||
5.9 | 49,941,605 | |||||||||||
Media 2.4% | ||||||||||||
Other Securities | 2.4 | 20,657,975 | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.1% | ||||||||||||
Covance, Inc. * | 24,600 | 0.3 | 2,195,796 | |||||||||
Endo Health Solutions, Inc. * | 51,800 | 0.3 | 2,265,214 | |||||||||
Other Securities | 1.5 | 13,238,543 | ||||||||||
2.1 | 17,699,553 | |||||||||||
Real Estate 7.5% | ||||||||||||
Other Securities | 7.5 | 63,729,145 | ||||||||||
Retailing 5.6% | ||||||||||||
Office Depot, Inc. * | 482,800 | 0.3 | 2,698,852 | |||||||||
The Men’s Wearhouse, Inc. | 50,000 | 0.2 | 2,115,000 | |||||||||
Other Securities | 5.1 | 42,620,858 | ||||||||||
5.6 | 47,434,710 | |||||||||||
Semiconductors & Semiconductor Equipment 3.9% | ||||||||||||
Avago Technologies Ltd. | 42,600 | 0.2 | 1,935,318 | |||||||||
SunEdison, Inc. * | 343,600 | 0.4 | 3,195,480 | |||||||||
Other Securities | 3.3 | 27,853,927 | ||||||||||
3.9 | 32,984,725 | |||||||||||
Software & Services 6.0% | ||||||||||||
Convergys Corp. | 106,500 | 0.2 | 2,102,310 | |||||||||
Lender Processing Services, Inc. | 62,200 | 0.3 | 2,147,144 | |||||||||
Verisign, Inc. * | 42,300 | 0.3 | 2,296,044 | |||||||||
Other Securities | 5.2 | 44,337,363 | ||||||||||
6.0 | 50,882,861 | |||||||||||
Technology Hardware & Equipment 4.7% | ||||||||||||
NCR Corp. * | 57,800 | 0.2 | 2,112,590 | |||||||||
SYNNEX Corp. * | 41,200 | 0.3 | 2,525,560 | |||||||||
Other Securities | 4.2 | 35,438,962 | ||||||||||
4.7 | 40,077,112 | |||||||||||
Telecommunication Services 1.0% | ||||||||||||
Other Securities | 1.0 | 8,166,992 | ||||||||||
Transportation 4.8% | ||||||||||||
Con-way, Inc. | 46,900 | 0.2 | 1,932,280 | |||||||||
Delta Air Lines, Inc. | 187,500 | 0.6 | 4,946,250 | |||||||||
Southwest Airlines Co. | 310,800 | 0.6 | 5,351,976 | |||||||||
United Continental Holdings, Inc. * | 83,200 | 0.3 | 2,824,640 | |||||||||
Other Securities | 3.1 | 25,607,636 | ||||||||||
4.8 | 40,662,782 | |||||||||||
Utilities 3.2% | ||||||||||||
Other Securities | 3.2 | 27,389,290 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $612,399,768) | 839,594,596 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Consumer Services 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Rights | ||||||||||||
(Cost $—) | — | |||||||||||
Other Investment Company 0.9% of net assets | ||||||||||||
Money Market Fund 0.9% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (f) | 7,423,228 | 0.9 | 7,423,228 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $7,423,228) | 7,423,228 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 714,995 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $714,995) | 714,995 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 2.3% of net assets | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (f) | 19,735,329 | 2.3 | 19,735,329 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $19,735,329) | 19,735,329 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13 tax basis cost of the fund’s investments was $624,073,694 and the unrealized appreciation and depreciation
26 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
were $235,087,813 and ($11,428,688), respectively, with a net unrealized appreciation of $223,659,125.
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. Securities on loan were valued at $19,952,900. | |
(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 $0 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/20/13 | 75 | 8,233,500 | 224,557 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $839,594,596 | $— | $— | $839,594,596 | ||||||||||||
Rights1 | — | — | — | — | ||||||||||||
Other Investment Company1 | 7,423,228 | — | — | 7,423,228 | ||||||||||||
Short-Term Investment1 | — | 714,995 | — | 714,995 | ||||||||||||
Total | $847,017,824 | $714,995 | $— | $847,732,819 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $19,735,329 | $— | $— | $19,735,329 | ||||||||||||
Futures Contract2 | 224,557 | — | — | 224,557 |
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | $441,199 | $— | ($225,691 | ) | $— | ($215,508 | ) | $— | $— | $— | ||||||||||||||||||||||
Total | $441,199 | $— | ($225,691 | ) | $— | ($215,508 | ) | $— | $— | $— | ||||||||||||||||||||||
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, 2013.
See financial notes 27
Table of Contents
Schwab Fundamental US Small Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $620,537,991) including securities on loan of $19,952,900 | $847,732,819 | |||||
Foreign currency, at value (cost $34) | 31 | |||||
Collateral invested for securities on loan | 19,735,329 | |||||
Receivables: | ||||||
Investments sold | 2,864,959 | |||||
Fund shares sold | 678,231 | |||||
Dividends | 283,368 | |||||
Income from securities on loan | 36,063 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 13,129 | ||||
Total assets | 871,343,931 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 19,735,329 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 10,380 | |||||
Shareholder service fees | 12,795 | |||||
Due to custodian | 1,133,812 | |||||
Fund shares redeemed | 716,782 | |||||
Variation margin on futures contracts | 64,500 | |||||
Accrued expenses | + | 257,912 | ||||
Total liabilities | 21,931,510 | |||||
Net Assets | ||||||
Total assets | 871,343,931 | |||||
Total liabilities | − | 21,931,510 | ||||
Net assets | $849,412,421 | |||||
Net Assets by Source | ||||||
Capital received from investors | 582,685,022 | |||||
Net investment income not yet distributed | 5,421,598 | |||||
Net realized capital gains | 33,886,414 | |||||
Net unrealized capital appreciation | 227,419,387 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$849,412,421 | 66,474,982 | $12.78 |
28 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $30,640) | $12,275,456 | |||||
Interest | 2,400 | |||||
Securities on loan | + | 503,422 | ||||
Total investment income | 12,781,278 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,999,960 | |||||
Shareholder service fees | 643,451 | |||||
Index fee | 415,185 | |||||
Shareholder reports | 88,516 | |||||
Transfer agent fees | 83,115 | |||||
Portfolio accounting fees | 59,252 | |||||
Professional fees | 56,193 | |||||
Registration fees | 50,901 | |||||
Custodian fees | 43,174 | |||||
Independent trustees’ fees | 11,912 | |||||
Interest expense | 176 | |||||
Other expenses | + | 15,531 | ||||
Total expenses | 3,467,366 | |||||
Expense reduction by CSIM and its affiliates | − | 921,799 | ||||
Custody credits | − | 13 | ||||
Net expenses | − | 2,545,554 | ||||
Net investment income | 10,235,724 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 32,361,944 | |||||
Net realized gains on futures contracts | 3,302,445 | |||||
Net realized losses on foreign currency transactions | + | (118 | ) | |||
Net realized gains | 35,664,271 | |||||
Net change in unrealized appreciation on investments | 183,089,035 | |||||
Net change in unrealized appreciation on futures contracts | 299,143 | |||||
Net change in unrealized appreciation on foreign currency translations | + | 2 | ||||
Net change in unrealized appreciation | + | 183,388,180 | ||||
Net realized and unrealized gains | 219,052,451 | |||||
Increase in net assets resulting from operations | $229,288,175 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $10,235,724 | $8,822,319 | ||||||||
Net realized gains | 35,664,271 | 56,145,986 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 183,388,180 | (4,154,550 | ) | ||||||
Increase in net assets from operations | 229,288,175 | 60,813,755 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (11,947,531 | ) | (6,659,188 | ) | ||||||
Distributions from net realized gains | + | (50,580,881 | ) | (39,248,349 | ) | |||||
Total distributions | ($62,528,412 | ) | ($45,907,537 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 16,241,608 | $178,159,226 | 15,451,067 | $154,128,648 | ||||||||||||||
Shares reinvested | 2,784,659 | 26,509,953 | 1,892,528 | 17,089,526 | ||||||||||||||
Shares redeemed | + | (12,560,146 | ) | (140,960,955 | ) | (13,017,996 | ) | (130,341,328 | ) | |||||||||
Net transactions in fund shares | 6,466,121 | $63,708,224 | 4,325,599 | $40,876,846 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 60,008,861 | $618,944,434 | 55,683,262 | $563,161,370 | ||||||||||||||
Total increase | + | 6,466,121 | 230,467,987 | 4,325,599 | 55,783,064 | |||||||||||||
End of period | 66,474,982 | $849,412,421 | 60,008,861 | $618,944,434 | ||||||||||||||
Net investment income not yet distributed | $5,421,598 | $7,645,395 |
30 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 7.16 | 7.26 | 8.09 | 7.69 | 6.01 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.22 | 0.23 | 0.21 | 0.16 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.87 | (0.08 | )2 | (0.85 | ) | 0.41 | 1.81 | |||||||||||||||
Total from investment operations | 2.10 | 0.14 | (0.62 | ) | 0.62 | 1.97 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.21 | ) | (0.24 | ) | (0.21 | ) | (0.22 | ) | (0.29 | ) | ||||||||||||
Net asset value at end of period | 9.05 | 7.16 | 7.26 | 8.09 | 7.69 | |||||||||||||||||
Total return (%) | 30.12 | 2.24 | (7.88 | ) | 8.27 | 34.89 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.34 | 3 | 0.31 | 4 | 0.35 | 0.35 | 0.35 | |||||||||||||||
Gross operating expenses | 0.52 | 0.56 | 0.57 | 0.61 | 0.76 | |||||||||||||||||
Net investment income (loss) | 2.95 | 3.58 | 3.24 | 2.70 | 2.80 | |||||||||||||||||
Portfolio turnover rate | 22 | 61 | 5 | 35 | 65 | 82 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 646 | 501 | 372 | 301 | 253 |
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 4.
4 The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included.
5 Portfolio turnover would have been 37%, if rebalancing trades had not been included due to a change in the fund’s index.
See financial notes 31
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | .2% | Common Stock | 481,759,721 | 627,407,931 | ||||||||
0 | .4% | Preferred Stock | 1,388,645 | 2,631,669 | ||||||||
0 | .0% | Rights | 176,884 | 185,237 | ||||||||
0 | .0% | Other Investment Company | 4,656 | 6,588 | ||||||||
2 | .1% | Short-Term Investments | 13,393,244 | 13,393,244 | ||||||||
99 | .7% | Total Investments | 496,723,150 | 643,624,669 | ||||||||
0 | .7% | Collateral Invested for Securities on Loan | 4,663,448 | 4,663,448 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (2,493,360 | ) | ||||||||
100 | .0% | Net Assets | 645,794,757 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 97.2% of net assets | ||||||||||||
Australia 4.6% | ||||||||||||
BHP Billiton Ltd. | 111,359 | 0.6 | 3,936,917 | |||||||||
Other Securities | 4.0 | 25,527,923 | ||||||||||
4.6 | 29,464,840 | |||||||||||
Austria 0.4% | ||||||||||||
Other Securities | 0.4 | 2,608,320 | ||||||||||
Belgium 0.9% | ||||||||||||
Other Securities | 0.9 | 5,581,476 | ||||||||||
Canada 5.8% | ||||||||||||
Other Securities | 5.8 | 37,222,604 | ||||||||||
Denmark 0.8% | ||||||||||||
Other Securities | 0.8 | 5,145,436 | ||||||||||
Finland 1.6% | ||||||||||||
Nokia Oyj * | 770,458 | 0.9 | 5,856,080 | |||||||||
Other Securities | 0.7 | 4,541,804 | ||||||||||
1.6 | 10,397,884 | |||||||||||
France 11.5% | ||||||||||||
AXA S.A. | 114,536 | 0.4 | 2,853,714 | |||||||||
BNP Paribas S.A. | 54,942 | 0.6 | 4,053,244 | |||||||||
Carrefour S.A. | 73,991 | 0.4 | 2,700,860 | |||||||||
Compagnie de Saint-Gobain | 52,646 | 0.4 | 2,763,391 | |||||||||
GDF Suez | 141,737 | 0.5 | 3,512,776 | |||||||||
Orange S.A. | 447,538 | 1.0 | 6,151,892 | |||||||||
Sanofi | 43,153 | 0.7 | 4,601,108 | |||||||||
Total S.A. | 215,345 | 2.0 | 13,212,048 | |||||||||
Vivendi S.A. | 123,697 | 0.5 | 3,131,973 | |||||||||
Other Securities | 5.0 | 31,069,320 | ||||||||||
11.5 | 74,050,326 | |||||||||||
Germany 8.9% | ||||||||||||
Allianz SE - Reg’d | 23,357 | 0.6 | 3,921,694 | |||||||||
BASF SE | 48,696 | 0.8 | 5,055,351 | |||||||||
Bayer AG - Reg’d | 25,513 | 0.5 | 3,164,944 | |||||||||
Daimler AG - Reg’d | 67,695 | 0.9 | 5,542,513 | |||||||||
Deutsche Telekom AG - Reg’d | 346,875 | 0.8 | 5,451,039 | |||||||||
E.ON SE AG | 260,794 | 0.7 | 4,753,881 | |||||||||
Siemens AG - Reg’d | 35,626 | 0.7 | 4,552,723 | |||||||||
Other Securities | 3.9 | 25,010,687 | ||||||||||
8.9 | 57,452,832 | |||||||||||
Hong Kong 0.8% | ||||||||||||
Other Securities | 0.8 | 5,376,058 | ||||||||||
Ireland 0.7% | ||||||||||||
Other Securities | 0.7 | 4,329,262 | ||||||||||
Israel 0.3% | ||||||||||||
Other Securities | 0.3 | 1,752,654 | ||||||||||
Italy 4.5% | ||||||||||||
Enel S.p.A. | 844,247 | 0.6 | 3,724,755 | |||||||||
Eni S.p.A. | 241,596 | 0.9 | 6,133,379 | |||||||||
Intesa Sanpaolo S.p.A. | 1,248,322 | 0.5 | 3,096,928 | |||||||||
UniCredit S.p.A. | 544,579 | 0.6 | 4,087,929 | |||||||||
Other Securities | 1.9 | 12,018,937 | ||||||||||
4.5 | 29,061,928 | |||||||||||
Japan 19.2% | ||||||||||||
Honda Motor Co., Ltd. | 79,600 | 0.5 | 3,178,657 | |||||||||
Nippon Telegraph & Telephone Corp. | 50,904 | 0.4 | 2,646,006 | |||||||||
Panasonic Corp. | 266,750 | 0.4 | 2,734,017 | |||||||||
Tokyo Electric Power Co., Inc. * | 561,800 | 0.5 | 2,998,269 | |||||||||
Toyota Motor Corp. | 96,600 | 1.0 | 6,263,367 | |||||||||
Other Securities | 16.4 | 105,969,220 | ||||||||||
19.2 | 123,789,536 | |||||||||||
Luxembourg 0.6% | ||||||||||||
ArcelorMittal | 171,227 | 0.4 | 2,696,932 | |||||||||
Other Securities | 0.2 | 1,102,263 | ||||||||||
0.6 | 3,799,195 |
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 | ($) | |||||||||
Netherlands 5.5% | ||||||||||||
ING Groep N.V. CVA * | 206,997 | 0.4 | 2,630,457 | |||||||||
Royal Dutch Shell plc, A Shares | 322,786 | 1.7 | 10,752,277 | |||||||||
Royal Dutch Shell plc, B Shares | 223,667 | 1.2 | 7,743,353 | |||||||||
Other Securities | 2.2 | 14,573,250 | ||||||||||
5.5 | 35,699,337 | |||||||||||
New Zealand 0.1% | ||||||||||||
Other Securities | 0.1 | 708,670 | ||||||||||
Norway 0.8% | ||||||||||||
Other Securities | 0.8 | 5,203,009 | ||||||||||
Portugal 0.3% | ||||||||||||
Other Securities | 0.3 | 1,780,006 | ||||||||||
Singapore 0.6% | ||||||||||||
Other Securities | 0.6 | 4,154,046 | ||||||||||
Spain 4.4% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 319,456 | 0.6 | 3,733,455 | |||||||||
Banco Santander S.A. | 855,426 | 1.2 | 7,583,576 | |||||||||
Repsol S.A. | 94,946 | 0.4 | 2,545,582 | |||||||||
Telefonica S.A. * | 439,625 | 1.2 | 7,737,096 | |||||||||
Other Securities | 1.0 | 6,973,380 | ||||||||||
4.4 | 28,573,089 | |||||||||||
Sweden 2.2% | ||||||||||||
Other Securities | 2.2 | 14,124,502 | ||||||||||
Switzerland 5.5% | ||||||||||||
Nestle S.A. - Reg’d | 93,816 | 1.0 | 6,772,006 | |||||||||
Novartis AG - Reg’d | 60,403 | 0.7 | 4,688,636 | |||||||||
Roche Holding AG | 13,365 | 0.6 | 3,695,895 | |||||||||
Other Securities | 3.2 | 20,631,626 | ||||||||||
5.5 | 35,788,163 | |||||||||||
United Kingdom 17.2% | ||||||||||||
Anglo American plc | 119,821 | 0.4 | 2,848,933 | |||||||||
AstraZeneca plc | 84,067 | 0.7 | 4,450,518 | |||||||||
Barclays plc | 739,641 | 0.5 | 3,112,009 | |||||||||
BP plc | 2,001,747 | 2.4 | 15,538,766 | |||||||||
British American Tobacco plc | 51,503 | 0.4 | 2,841,536 | |||||||||
BT Group plc | 457,919 | 0.4 | 2,770,698 | |||||||||
GlaxoSmithKline plc | 228,301 | 0.9 | 6,018,552 | |||||||||
HSBC Holdings plc | 765,505 | 1.3 | 8,390,960 | |||||||||
Rio Tinto plc | 50,193 | 0.4 | 2,539,774 | |||||||||
Tesco plc | 571,583 | 0.5 | 3,334,122 | |||||||||
Vodafone Group plc | 2,741,790 | 1.6 | 10,042,511 | |||||||||
Other Securities | 7.7 | 49,456,379 | ||||||||||
17.2 | 111,344,758 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $481,759,721) | 627,407,931 | |||||||||||
Preferred Stock 0.4% of net assets | ||||||||||||
Germany 0.4% | ||||||||||||
Other Securities | 0.4 | 2,625,688 | ||||||||||
United Kingdom 0.0% | ||||||||||||
Other Securities | 0.0 | 5,981 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $1,388,645) | 2,631,669 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Spain 0.0% | ||||||||||||
Other Securities | 0.0 | 185,237 | ||||||||||
Total Rights | ||||||||||||
(Cost $176,884) | 185,237 | |||||||||||
Other Investment Company 0.0% of net assets | ||||||||||||
United States 0.0% | ||||||||||||
Other Securities | 0.0 | 6,588 | ||||||||||
Total Other Investment Company | ||||||||||||
(Cost $4,656) | 6,588 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 2.1% of net assets | ||||||||||||
Time Deposits 1.8% | ||||||||||||
Bank of America | ||||||||||||
0.03%, 11/01/13 | 10,341,009 | 1.6 | 10,341,009 | |||||||||
Other Securities | 0.2 | 1,442,245 | ||||||||||
1.8 | 11,783,254 | |||||||||||
U.S. Treasury Obligation 0.3% | ||||||||||||
Other Securities | 0.3 | 1,609,990 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $13,393,244) | 13,393,244 | |||||||||||
End of Investments. | ||||||||||||
See financial notes 33
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.7% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 4,663,448 | 0.7 | 4,663,448 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $4,663,448) | 4,663,448 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, the tax basis cost of the fund’s investments was $516,396,557 unrealized appreciation and depreciation were $136,191,155 and ($8,963,043), respectively, with a net unrealized appreciation of $127,228,112.
At 10/31/13, the values of certain foreign securities held by the fund aggregating $583,511,965 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 $0 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $4,160,161. | |
(d) | The rate shown is the purchase yield. | |
(e) | All or a portion of this security is held as collateral for futures contracts. | |
(f) | The rate shown is the 7-day yield. |
CVA — | Dutch Certificate | |
ETF — | Exchange traded fund | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/20/13 | 135 | 12,658,275 | 279,349 |
34 See financial notes
Table of Contents
Schwab Fundamental International 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, 2013 (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 | $— | $185,085,590 | $— | $185,085,590 | ||||||||||||
Canada | 37,222,604 | — | — | 37,222,604 | ||||||||||||
Denmark | 439,111 | 4,706,325 | — | 5,145,436 | ||||||||||||
France | 572,395 | �� | 73,477,931 | — | 74,050,326 | |||||||||||
Germany | 185,088 | 57,267,744 | — | 57,452,832 | ||||||||||||
Hong Kong | 135,431 | 5,240,627 | — | 5,376,058 | ||||||||||||
Ireland | 1,302,935 | 3,026,327 | — | 4,329,262 | ||||||||||||
Italy | 408,990 | 28,652,938 | — | 29,061,928 | ||||||||||||
Netherlands | 1,299,193 | 34,400,144 | — | 35,699,337 | ||||||||||||
Singapore | 491,050 | 3,662,996 | — | 4,154,046 | ||||||||||||
Spain | 157,623 | 28,415,466 | — | 28,573,089 | ||||||||||||
Sweden | 365,129 | 13,759,373 | — | 14,124,502 | ||||||||||||
Switzerland | 3,308,921 | 32,479,242 | — | 35,788,163 | ||||||||||||
United Kingdom | 633,184 | 110,711,574 | — | 111,344,758 | ||||||||||||
Preferred Stock1 | — | 2,625,688 | — | 2,625,688 | ||||||||||||
United Kingdom | — | — | 5,981 | 5,981 | ||||||||||||
Rights1 | — | — | 185,237 | 185,237 | ||||||||||||
Other Investment Company1 | 6,588 | — | — | 6,588 | ||||||||||||
Short-Term Investments1 | — | 13,393,244 | — | 13,393,244 | ||||||||||||
Total | $46,528,242 | $596,905,209 | $191,218 | $643,624,669 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $4,663,448 | $— | $— | $4,663,448 | ||||||||||||
Futures Contract2 | 279,349 | — | — | 279,349 |
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Canada | $— | ($129,892 | ) | $129,892 | $— | $— | $— | $— | $— | |||||||||||||||||||||||
China | 6,079 | (78,171 | ) | 74,274 | — | (2,182 | ) | — | — | — | ||||||||||||||||||||||
Netherlands | — | — | (183,369 | ) | 29,368 | — | 154,001 | — | — | |||||||||||||||||||||||
United Kingdom | — | (375,623 | ) | 375,623 | — | — | — | — | — | |||||||||||||||||||||||
Preferred Stock | — | |||||||||||||||||||||||||||||||
United Kingdom | 5,378 | 50 | (113 | ) | 6,031 | (5,365 | ) | — | — | 5,981 | ||||||||||||||||||||||
Rights | — | |||||||||||||||||||||||||||||||
Hong Kong | 30,003 | 43,202 | (30,003 | ) | — | (43,202 | ) | — | — | — | ||||||||||||||||||||||
Spain | — | — | 8,353 | 176,884 | — | — | — | 185,237 | ||||||||||||||||||||||||
Total | $41,460 | ($540,434 | ) | $374,657 | $212,283 | ($50,749 | ) | $154,001 | $— | $191,218 | ||||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in appreciation (depreciation) for Level 3 investments held by the fund at October 31, 2013 was $8,304.
See financial notes 35
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
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, 2013. The transfers in the amount of $827,623 and $1,801,647 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.
36 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $496,723,150) including securities on loan of $4,160,161 | $643,624,669 | |||||
Foreign currency, at value (cost $49) | 49 | |||||
Collateral invested for securities on loan | 4,663,448 | |||||
Receivables: | ||||||
Fund shares sold | 1,222,127 | |||||
Dividends | 1,182,932 | |||||
Foreign tax reclaims | 407,478 | |||||
Income from securities on loan | 20,507 | |||||
Interest | 10 | |||||
Prepaid expenses | + | 10,148 | ||||
Total assets | 651,131,368 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 4,663,448 | |||||
Payables: | ||||||
Investments bought | 5,981 | |||||
Investment adviser and administrator fees | 7,180 | |||||
Shareholder service fees | 8,260 | |||||
Fund shares redeemed | 394,871 | |||||
Variation margin on futures contracts | 53,339 | |||||
Accrued expenses | + | 203,532 | ||||
Total liabilities | 5,336,611 | |||||
Net Assets | ||||||
Total assets | 651,131,368 | |||||
Total liabilities | − | 5,336,611 | ||||
Net assets | $645,794,757 | |||||
Net Assets by Source | ||||||
Capital received from investors | 620,980,457 | |||||
Net investment income not yet distributed | 14,415,187 | |||||
Net realized capital losses | (136,797,722 | ) | ||||
Net unrealized capital appreciation | 147,196,835 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$645,794,757 | 71,372,072 | $9.05 |
See financial notes 37
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,556,294) | $18,431,684 | |||||
Interest | 3,336 | |||||
Securities on loan | + | 555,482 | ||||
Total investment income | 18,990,502 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,669,236 | |||||
Shareholder service fees | 471,415 | |||||
Index fee | 321,092 | |||||
Custodian fees | 206,036 | |||||
Portfolio accounting fees | 84,584 | |||||
Transfer agent fees | 83,081 | |||||
Professional fees | 57,830 | |||||
Shareholder reports | 38,561 | |||||
Registration fees | 37,531 | |||||
Independent trustees’ fees | 10,862 | |||||
Interest expense | 3,413 | |||||
Other expenses | + | 26,750 | ||||
Total expenses | 3,010,391 | |||||
Expense reduction by CSIM and its affiliates | − | 1,059,530 | ||||
Net expenses | − | 1,950,861 | ||||
Net investment income | 17,039,641 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on investments | (10,831,405 | ) | ||||
Net realized gains on futures contracts | 1,139,879 | |||||
Net realized losses on foreign currency transactions | + | (121,037 | ) | |||
Net realized losses | (9,812,563 | ) | ||||
Net change in unrealized appreciation on investments | 144,593,320 | |||||
Net change in unrealized appreciation on futures contracts | 279,349 | |||||
Net change in unrealized appreciation on foreign currency translations | + | 41,541 | ||||
Net change in unrealized appreciation | + | 144,914,210 | ||||
Net realized and unrealized gains | 135,101,647 | |||||
Increase in net assets resulting from operations | $152,141,288 |
38 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $17,039,641 | $14,440,391 | ||||||||
Net realized losses | (9,812,563 | ) | (12,889,488 | ) | ||||||
Net change in unrealized appreciation | + | 144,914,210 | 16,027,825 | |||||||
Increase in net assets from operations | 152,141,288 | 17,578,728 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($15,274,655 | ) | ($12,260,320 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 24,782,287 | $195,910,846 | 35,480,423 | $237,479,009 | ||||||||||||||
Shares reinvested | 1,575,182 | 11,404,319 | 1,363,648 | 9,013,714 | ||||||||||||||
Shares redeemed | + | (24,923,187 | ) | (198,967,968 | ) | (18,197,244 | ) | (123,492,196 | ) | |||||||||
Net transactions in fund shares | 1,434,282 | $8,347,197 | 18,646,827 | $123,000,527 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 69,937,790 | $500,580,927 | 51,290,963 | $372,261,992 | ||||||||||||||
Total increase | + | 1,434,282 | 145,213,830 | 18,646,827 | 128,318,935 | |||||||||||||
End of period | 71,372,072 | $645,794,757 | 69,937,790 | $500,580,927 | ||||||||||||||
Net investment income not yet distributed | $14,415,187 | $12,490,163 |
See financial notes 39
Table of Contents
Schwab Fundamental International Small Company Index Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.13 | 9.53 | 9.96 | 9.00 | 6.22 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 2 | 0.21 | 2 | 0.24 | 2 | 0.16 | 2 | 0.12 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 2.42 | 0.03 | (0.40 | ) | 1.09 | 2.92 | ||||||||||||||||
Total from investment operations | 2.64 | 0.24 | (0.16 | ) | 1.25 | 3.04 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.30 | ) | (0.25 | ) | (0.27 | ) | (0.29 | ) | (0.26 | ) | ||||||||||||
Distributions from net realized gains | — | (0.39 | ) | — | — | — | ||||||||||||||||
Total distributions | (0.30 | ) | (0.64 | ) | (0.27 | ) | (0.29 | ) | (0.26 | ) | ||||||||||||
Net asset value at end of period | 11.47 | 9.13 | 9.53 | 9.96 | 9.00 | |||||||||||||||||
Total return (%) | 29.75 | 3.13 | (1.76 | ) | 14.32 | 51.19 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.47 | 3,4 | 0.46 | 5,6 | 0.54 | 0.55 | 0.55 | |||||||||||||||
Gross operating expenses | 0.93 | 0.92 | 6 | 0.99 | 1.07 | 3.82 | ||||||||||||||||
Net investment income (loss) | 2.21 | 2.42 | 2.29 | 1.77 | 1.59 | |||||||||||||||||
Portfolio turnover rate | 29 | 89 | 7 | 63 | 63 | 81 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 150 | 90 | 93 | 74 | 47 |
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 Calculated based on the average shares outstanding during the period.
3 Effective June 11, 2013, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/13 is a blended ratio. See financial note 4.
4 The ratio of net operating expenses would have been 0.52%, if voluntary waiver by CSIM had not been included. See financial note 4.
5 The ratio of net operating expenses would have been 0.51%, if voluntary waiver by CSIM had not been included.
6 The net operating and gross operating expense ratios would have been 0.50% and 0.97%, respectively, if vendor payments had not been included.
7 Portfolio turnover would have been 48%, if rebalancing trades had not been included due to a change in the fund’s index.
40 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | ($) | ($) | ||||||||||
96 | .3% | Common Stock | 116,055,264 | 144,078,170 | ||||||||
0 | .4% | Preferred Stock | 380,406 | 578,681 | ||||||||
0 | .0% | Rights | — | 1,638 | ||||||||
2 | .8% | Other Investment Company | 3,757,207 | 4,121,700 | ||||||||
0 | .2% | Short-Term Investments | 344,569 | 344,569 | ||||||||
99 | .7% | Total Investments | 120,537,446 | 149,124,758 | ||||||||
1 | .5% | Collateral Invested for Securities on Loan | 2,221,642 | 2,221,642 | ||||||||
(1 | .2)% | Other Assets and Liabilities, Net | (1,771,202 | ) | ||||||||
100 | .0% | Net Assets | 149,575,198 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 96.3% of net assets | ||||||||||||
Australia 4.6% | ||||||||||||
Other Securities | 4.6 | 6,902,219 | ||||||||||
Austria 0.7% | ||||||||||||
Other Securities | 0.7 | 1,037,564 | ||||||||||
Belgium 1.1% | ||||||||||||
Other Securities | 1.1 | 1,634,220 | ||||||||||
Canada 7.9% | ||||||||||||
Atco Ltd., Class I | 5,425 | 0.2 | 251,777 | |||||||||
Methanex Corp. | 6,172 | 0.2 | 357,954 | |||||||||
Precision Drilling Corp. | 27,408 | 0.2 | 289,944 | |||||||||
Quebecor, Inc., Class B | 10,870 | 0.2 | 268,766 | |||||||||
Other Securities | 7.1 | 10,708,310 | ||||||||||
7.9 | 11,876,751 | |||||||||||
Denmark 1.5% | ||||||||||||
D/S Norden A/S | 6,066 | 0.2 | 266,806 | |||||||||
Other Securities | 1.3 | 1,952,284 | ||||||||||
1.5 | 2,219,090 | |||||||||||
Finland 2.0% | ||||||||||||
Nokian Renkaat Oyj | 5,036 | 0.2 | 254,702 | |||||||||
Rautaruukki Oyj | 35,030 | 0.2 | 302,984 | |||||||||
Other Securities | 1.6 | 2,451,317 | ||||||||||
2.0 | 3,009,003 | |||||||||||
France 4.7% | ||||||||||||
Eurazeo S.A. | 3,335 | 0.2 | 251,802 | |||||||||
Neopost S.A. | 3,538 | 0.2 | 267,123 | |||||||||
Societe Television Francaise 1 | 14,913 | 0.2 | 287,342 | |||||||||
Teleperformance | 5,313 | 0.2 | 281,243 | |||||||||
Zodiac Aerospace | 1,600 | 0.2 | 256,011 | |||||||||
Other Securities | 3.7 | 5,721,174 | ||||||||||
4.7 | 7,064,695 | |||||||||||
Germany 3.4% | ||||||||||||
Rhoen-klinikum AG | 9,247 | 0.2 | 258,196 | |||||||||
Stada Arzneimittel AG | 4,498 | 0.2 | 258,553 | |||||||||
Other Securities | 3.0 | 4,512,299 | ||||||||||
3.4 | 5,029,048 | |||||||||||
Greece 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Hong Kong 2.6% | ||||||||||||
Other Securities | 2.6 | 3,876,368 | ||||||||||
Ireland 0.7% | ||||||||||||
Grafton Group plc | 30,638 | 0.2 | 291,000 | |||||||||
Other Securities | 0.5 | 792,796 | ||||||||||
0.7 | 1,083,796 | |||||||||||
Israel 1.2% | ||||||||||||
Bank Hapoalim B.M. | 48,457 | 0.2 | 259,413 | |||||||||
Other Securities | 1.0 | 1,605,278 | ||||||||||
1.2 | 1,864,691 | |||||||||||
Italy 2.8% | ||||||||||||
Other Securities | 2.8 | 4,232,730 | ||||||||||
Japan 36.9% | ||||||||||||
Alps Electric Co., Ltd. * | 28,800 | 0.2 | 252,736 | |||||||||
Chugai Pharmaceutical Co., Ltd. | 10,900 | 0.2 | 256,110 | |||||||||
Daiwa Securities Group, Inc. | 34,000 | 0.2 | 310,548 | |||||||||
Hirose Electric Co., Ltd. | 1,700 | 0.2 | 259,371 | |||||||||
Kikkoman Corp. | 14,000 | 0.2 | 255,158 | |||||||||
Kinden Corp. | 26,000 | 0.2 | 285,552 | |||||||||
Marui Group Co., Ltd. | 26,500 | 0.2 | 253,676 | |||||||||
Minebea Co., Ltd. | 47,000 | 0.2 | 260,190 | |||||||||
Mitsubishi Gas Chemical Co., Inc. | 31,000 | 0.2 | 253,351 | |||||||||
NGK Insulators Ltd. | 21,000 | 0.2 | 353,220 | |||||||||
NGK Spark Plug Co., Ltd. | 13,000 | 0.2 | 296,895 | |||||||||
Nissan Shatai Co., Ltd. | 15,000 | 0.2 | 258,616 | |||||||||
Nomura Research Institute Ltd. | 8,100 | 0.2 | 271,854 |
See financial notes 41
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
NTN Corp. * | 72,000 | 0.2 | 346,093 | |||||||||
Tokuyama Corp. | 77,000 | 0.2 | 297,837 | |||||||||
TOTO Ltd. | 23,000 | 0.2 | 325,272 | |||||||||
Other Securities | 33.7 | 50,647,516 | ||||||||||
36.9 | 55,183,995 | |||||||||||
Luxembourg 0.5% | ||||||||||||
Other Securities | 0.5 | 819,878 | ||||||||||
Netherlands 1.9% | ||||||||||||
Koninklijke Boskalis Westminster N.V. | 5,299 | 0.2 | 254,683 | |||||||||
SBM Offshore N.V. * | 15,232 | 0.2 | 318,813 | |||||||||
USG People N.V. | 25,022 | 0.2 | 330,769 | |||||||||
Other Securities | 1.3 | 1,950,522 | ||||||||||
1.9 | 2,854,787 | |||||||||||
New Zealand 0.4% | ||||||||||||
Other Securities | 0.4 | 670,248 | ||||||||||
Norway 1.1% | ||||||||||||
Other Securities | 1.1 | 1,684,088 | ||||||||||
Portugal 0.4% | ||||||||||||
Other Securities | 0.4 | 551,814 | ||||||||||
Republic of Korea 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Singapore 1.6% | ||||||||||||
Other Securities | 1.6 | 2,332,253 | ||||||||||
Spain 2.3% | ||||||||||||
Bankinter S.A. | 41,819 | 0.2 | 254,975 | |||||||||
Gamesa Corp. Tecnologica S.A. * | 61,562 | 0.4 | 594,509 | |||||||||
Mapfre S.A. | 62,485 | 0.2 | 250,920 | |||||||||
Other Securities | 1.5 | 2,273,494 | ||||||||||
2.3 | 3,373,898 | |||||||||||
Sweden 2.2% | ||||||||||||
Other Securities | 2.2 | 3,263,379 | ||||||||||
Switzerland 2.9% | ||||||||||||
Georg Fischer AG - Reg’d * | 436 | 0.2 | 300,338 | |||||||||
Julius Baer Group Ltd. * | 5,268 | 0.2 | 258,425 | |||||||||
Other Securities | 2.5 | 3,715,816 | ||||||||||
2.9 | 4,274,579 | |||||||||||
United Kingdom 12.9% | ||||||||||||
Bellway plc | 11,022 | 0.2 | 265,480 | |||||||||
Berendsen plc | 17,200 | 0.2 | 267,855 | |||||||||
Booker Group plc | 116,941 | 0.2 | 281,657 | |||||||||
Darty plc | 202,354 | 0.2 | 266,429 | |||||||||
DS Smith plc | 54,602 | 0.2 | 264,652 | |||||||||
Enterprise Inns plc * | 162,678 | 0.3 | 395,221 | |||||||||
Hiscox Ltd. | 23,710 | 0.2 | 251,714 | |||||||||
London Stock Exchange Group plc | 10,057 | 0.2 | 264,338 | |||||||||
UBM plc | 22,821 | 0.2 | 249,811 | |||||||||
Other Securities | 11.0 | 16,731,919 | ||||||||||
12.9 | 19,239,076 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $116,055,264) | 144,078,170 | |||||||||||
Preferred Stock 0.4% of net assets | ||||||||||||
Germany 0.3% | ||||||||||||
Other Securities | 0.3 | 473,708 | ||||||||||
Italy 0.1% | ||||||||||||
Other Securities | 0.1 | 104,973 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $380,406) | 578,681 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Hong Kong 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Italy 0.0% | ||||||||||||
Other Securities | 0.0 | 1,638 | ||||||||||
Total Rights | ||||||||||||
(Cost $—) | 1,638 | |||||||||||
Other Investment Company 2.8% of net assets | ||||||||||||
United States 2.8% | ||||||||||||
iShares MSCI EAFE Small Cap ETF | 82,500 | 2.8 | 4,121,700 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $3,757,207) | 4,121,700 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 0.2% of net assets | ||||||||||||
Time Deposit 0.1% | ||||||||||||
Other Securities | 0.1 | 199,570 | ||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 144,999 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $344,569) | 344,569 | |||||||||||
End of Investments. | ||||||||||||
42 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 1.5% of net assets | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 2,221,642 | 1.5 | 2,221,642 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $2,221,642) | 2,221,642 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, the tax basis cost of the fund’s investments was $123,152,501 and the unrealized appreciation and depreciation were $29,925,605 and ($3,953,348), respectively, with a net unrealized appreciation of $25,972,257.
At 10/31/13, the values of certain foreign securities held by the fund aggregating $123,594,538 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. Securities on loan were valued at $1,897,364. | |
(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 $0 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt | |
CVA — | Dutch Certificate | |
ETF — | Exchange traded fund | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/20/13 | 1 | 93,765 | 4,442 |
See financial notes 43
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, 2013 (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 | $— | $5,893,070 | $— | $5,893,070 | ||||||||||||
Australia | 140,110 | 6,762,109 | — | 6,902,219 | ||||||||||||
Austria | 45,179 | 992,385 | — | 1,037,564 | ||||||||||||
Belgium | 706,382 | 927,838 | — | 1,634,220 | ||||||||||||
Canada | 11,876,751 | — | — | 11,876,751 | ||||||||||||
Denmark | 337,803 | 1,881,287 | — | 2,219,090 | ||||||||||||
France | 1,366,315 | 5,698,380 | — | 7,064,695 | ||||||||||||
Germany | 341,004 | 4,688,044 | — | 5,029,048 | ||||||||||||
Greece | — | — | — | — | ||||||||||||
Hong Kong | 112,897 | 3,763,471 | — | 3,876,368 | ||||||||||||
Ireland | 546,995 | 536,801 | — | 1,083,796 | ||||||||||||
Israel | 229,121 | 1,635,570 | — | 1,864,691 | ||||||||||||
Italy | 78,855 | 4,153,875 | — | 4,232,730 | ||||||||||||
Japan | 483,495 | 54,700,500 | — | 55,183,995 | ||||||||||||
Luxembourg | 274,208 | 545,670 | — | 819,878 | ||||||||||||
Netherlands | 507,900 | 2,346,887 | — | 2,854,787 | ||||||||||||
New Zealand | 106,765 | 563,483 | — | 670,248 | ||||||||||||
Norway | 320,677 | 1,363,411 | — | 1,684,088 | ||||||||||||
Republic of Korea | — | — | — | — | ||||||||||||
Spain | 137,079 | 3,236,819 | — | 3,373,898 | ||||||||||||
Sweden | 263,419 | 2,999,960 | — | 3,263,379 | ||||||||||||
Switzerland | 678,311 | 3,596,268 | — | 4,274,579 | ||||||||||||
United Kingdom | 2,509,047 | 16,730,029 | — | 19,239,076 | ||||||||||||
Preferred Stock1 | — | 578,681 | — | 578,681 | ||||||||||||
Rights1 | 1,638 | — | — | 1,638 | ||||||||||||
Other Investment Company1 | 4,121,700 | — | — | 4,121,700 | ||||||||||||
Short-Term Investments1 | — | 344,569 | — | 344,569 | ||||||||||||
Total | $25,185,651 | $123,939,107 | $— | $149,124,758 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $2,221,642 | $— | $— | $2,221,642 | ||||||||||||
Futures Contract2 | 4,442 | — | — | 4,442 |
1 | As categorized in complete schedule of holdings. | |
2 | Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation. |
44 See financial notes
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Netherlands | $4,930 | ($490 | ) | $4,828 | $— | ($9,268 | ) | $— | $— | $— | ||||||||||||||||||||||
Singapore | 27,299 | — | (27,299 | ) | — | — | — | — | — | |||||||||||||||||||||||
Spain | — | — | (20,750 | ) | 9,148 | — | 11,602 | — | — | |||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
United Kingdom | 1,108 | (9 | ) | (7 | ) | — | (1,092 | ) | — | — | — | |||||||||||||||||||||
Total | $33,337 | ($499 | ) | ($43,228 | ) | $9,148 | ($10,360 | ) | $11,602 | $— | $— | |||||||||||||||||||||
All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying Statement of Operations. The change in appreciation (depreciation) for Level 3 investments held by the fund at October 31, 2013 was ($48,183).
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, 2013. The transfers in the amount of $2,104,449 and $3,032,831 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.
See financial notes 45
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $120,537,446) including securities on loan of $1,897,364 | $149,124,758 | |||||
Collateral invested for securities on loan | 2,221,642 | |||||
Receivables: | ||||||
Investments sold | 2,404,998 | |||||
Fund shares sold | 784,761 | |||||
Dividends | 370,683 | |||||
Foreign tax reclaims | 47,744 | |||||
Income from securities on loan | 7,287 | |||||
Due from investment adviser | 1,515 | |||||
Prepaid expenses | + | 1,940 | ||||
Total assets | 154,965,328 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 2,221,642 | |||||
Payables: | ||||||
Investments bought | 651,155 | |||||
Shareholder service fees | 909 | |||||
Independent trustees’ fees | 2 | |||||
Due to custodian | 2,305,157 | |||||
Fund shares redeemed | 83,849 | |||||
Variation margin on futures contracts | 410 | |||||
Accrued expenses | + | 127,006 | ||||
Total liabilities | 5,390,130 | |||||
Net Assets | ||||||
Total assets | 154,965,328 | |||||
Total liabilities | − | 5,390,130 | ||||
Net assets | $149,575,198 | |||||
Net Assets by Source | ||||||
Capital received from investors | 123,491,439 | |||||
Net investment income not yet distributed | 1,971,951 | |||||
Net realized capital losses | (4,482,674 | ) | ||||
Net unrealized capital appreciation | 28,594,482 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$149,575,198 | 13,038,461 | $11.47 |
46 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $240,666) | $2,938,591 | |||||
Interest | 1,150 | |||||
Securities on loan | + | 118,939 | ||||
Total investment income | 3,058,680 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 456,134 | |||||
Shareholder service fees | 79,722 | |||||
Custodian fees | 171,144 | |||||
Index fee | 95,455 | |||||
Portfolio accounting fees | 80,012 | |||||
Professional fees | 48,985 | |||||
Transfer agent fees | 40,028 | |||||
Shareholder reports | 28,036 | |||||
Registration fees | 24,533 | |||||
Independent trustees’ fees | 7,732 | |||||
Interest expense | 621 | |||||
Other expenses | + | 28,879 | ||||
Total expenses | 1,061,281 | |||||
Expense reduction by CSIM and its affiliates | − | 527,192 | ||||
Net expenses | − | 534,089 | ||||
Net investment income | 2,524,591 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 1,254,347 | |||||
Net realized gains on futures contracts | 249,472 | |||||
Net realized losses on foreign currency transactions | + | (23,396 | ) | |||
Net realized gains | 1,480,423 | |||||
Net change in unrealized appreciation on investments | 25,921,422 | |||||
Net change in unrealized appreciation on futures contracts | 4,442 | |||||
Net change in unrealized appreciation on foreign currency translations | + | 7,774 | ||||
Net change in unrealized appreciation | + | 25,933,638 | ||||
Net realized and unrealized gains | 27,414,061 | |||||
Increase in net assets resulting from operations | $29,938,652 |
See financial notes 47
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $2,524,591 | $2,224,158 | ||||||||
Net realized gains (losses) | 1,480,423 | (3,921,600 | ) | |||||||
Net change in unrealized appreciation | + | 25,933,638 | 3,995,812 | |||||||
Increase in net assets from operations | 29,938,652 | 2,298,370 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (3,109,770 | ) | (2,493,429 | ) | ||||||
Distributions from net realized gains | + | — | (3,900,690 | ) | ||||||
Total distributions | ($3,109,770 | ) | ($6,394,119 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 5,053,700 | $51,573,590 | 3,585,058 | $31,904,834 | ||||||||||||||
Shares reinvested | 227,023 | 2,068,185 | 531,718 | 4,487,698 | ||||||||||||||
Shares redeemed | + | (2,140,208 | ) | (21,234,821 | ) | (3,924,070 | ) | (34,465,493 | ) | |||||||||
Net transactions in fund shares | 3,140,515 | $32,406,954 | 192,706 | $1,927,039 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 9,897,946 | $90,339,362 | 9,705,240 | $92,508,072 | ||||||||||||||
Total increase or decrease | + | 3,140,515 | 59,235,836 | 192,706 | (2,168,710 | ) | ||||||||||||
End of period | 13,038,461 | $149,575,198 | 9,897,946 | $90,339,362 | ||||||||||||||
Net investment income not yet distributed | $1,971,951 | $2,170,780 |
48 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/091 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 8.86 | 9.17 | 10.81 | 8.91 | 5.74 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.19 | 0.25 | 0.24 | 0.17 | 0.05 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.43 | (0.17 | ) | (1.37 | ) | 1.81 | 3.27 | |||||||||||||||
Total from investment operations | 0.62 | 0.08 | (1.13 | ) | 1.98 | 3.32 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.22 | ) | (0.15 | ) | (0.08 | ) | (0.15 | ) | ||||||||||||
Distributions from net realized gains | — | (0.17 | ) | (0.36 | ) | — | — | |||||||||||||||
Total distributions | (0.24 | ) | (0.39 | ) | (0.51 | ) | (0.08 | ) | (0.15 | ) | ||||||||||||
Net asset value at end of period | 9.24 | 8.86 | 9.17 | 10.81 | 8.91 | |||||||||||||||||
Total return (%) | 7.11 | 1.18 | (10.99 | ) | 22.36 | 59.55 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.51 | 2,3 | 0.56 | 4 | 0.61 | 5 | 0.61 | 5 | 0.61 | 5 | ||||||||||||
Gross operating expenses | 0.88 | 0.91 | 0.91 | 0.98 | 1.70 | |||||||||||||||||
Net investment income (loss) | 2.22 | 2.75 | 2.51 | 2.31 | 1.56 | |||||||||||||||||
Portfolio turnover rate | 22 | 86 | 6 | 56 | 91 | 103 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 353 | 314 | 310 | 294 | 119 |
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 Effective June 11, 2013, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/13 is a blended ratio. See financial note 4.
3 The ratio of net operating expenses would have been 0.56%, if voluntary waiver by CSIM had not been included. See financial note 4.
4 The ratio of net operating expenses would have been 0.60%, if voluntary waiver by CSIM had not been included.
5 The ratio of net operating expenses would have been 0.60%, if interest expenses had not been incurred.
6 Portfolio turnover would have been 0.51%, if rebalancing trades had not been included due to a change in the fund’s index.
See financial notes 49
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab 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 | ($) | ($) | ||||||||||
87 | .9% | Common Stock | 295,265,216 | 310,499,007 | ||||||||
9 | .7% | Preferred Stock | 39,367,592 | 34,183,852 | ||||||||
0 | .8% | Other Investment Company | 2,898,912 | 2,866,050 | ||||||||
2 | .4% | Short-Term Investments | 8,425,412 | 8,425,412 | ||||||||
100 | .8% | Total Investments | 345,957,132 | 355,974,321 | ||||||||
(0 | .8)% | Other Assets and Liabilities, Net | (2,979,662 | ) | ||||||||
100 | .0% | Net Assets | 352,994,659 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 87.9% of net assets | ||||||||||||
Brazil 5.6% | ||||||||||||
Banco do Brasil S.A. | 157,667 | 0.6 | 2,087,006 | |||||||||
Petroleo Brasileiro S.A. - Petrobras | 639,553 | 1.6 | 5,560,207 | |||||||||
Vale S.A. | 219,270 | 1.0 | 3,486,492 | |||||||||
Other Securities | 2.4 | 8,694,046 | ||||||||||
5.6 | 19,827,751 | |||||||||||
Chile 0.7% | ||||||||||||
Other Securities | 0.7 | 2,508,354 | ||||||||||
China 11.5% | ||||||||||||
Bank of China Ltd., Class H | 7,573,234 | 1.0 | 3,555,757 | |||||||||
China Construction Bank Corp., Class H | 7,183,000 | 1.6 | 5,588,565 | |||||||||
China Mobile Ltd. | 570,600 | 1.7 | 5,929,476 | |||||||||
China Petroleum & Chemical Corp., Class H | 4,850,400 | 1.1 | 3,926,436 | |||||||||
CNOOC Ltd. | 1,426,000 | 0.8 | 2,900,443 | |||||||||
Industrial & Commercial Bank of China Ltd., Class H | 5,399,172 | 1.1 | 3,784,960 | |||||||||
PetroChina Co., Ltd., Class H | 2,861,000 | 0.9 | 3,258,051 | |||||||||
Other Securities | 3.3 | 11,776,321 | ||||||||||
11.5 | 40,720,009 | |||||||||||
Colombia 0.3% | ||||||||||||
Other Securities | 0.3 | 910,628 | ||||||||||
Czech Republic 0.4% | ||||||||||||
Other Securities | 0.4 | 1,549,844 | ||||||||||
Egypt 0.2% | ||||||||||||
Other Securities | 0.2 | 757,829 | ||||||||||
Greece 1.8% | ||||||||||||
OPAP S.A. | 141,502 | 0.5 | 1,757,126 | |||||||||
Other Securities | 1.3 | 4,498,400 | ||||||||||
1.8 | 6,255,526 | |||||||||||
Hungary 0.6% | ||||||||||||
Other Securities | 0.6 | 2,112,718 | ||||||||||
India 3.3% | ||||||||||||
Reliance Industries Ltd. | 203,723 | 0.9 | 3,031,183 | |||||||||
Other Securities | 2.4 | 8,513,500 | ||||||||||
3.3 | 11,544,683 | |||||||||||
Indonesia 0.7% | ||||||||||||
Other Securities | 0.7 | 2,448,803 | ||||||||||
Malaysia 1.6% | ||||||||||||
Other Securities | 1.6 | 5,631,376 | ||||||||||
Mexico 3.4% | ||||||||||||
America Movil S.A.B. de C.V., Series L | 3,485,000 | 1.1 | 3,739,485 | |||||||||
Cemex S.A.B. de C.V., Series CPO * | 2,044,328 | 0.6 | 2,174,809 | |||||||||
Other Securities | 1.7 | 6,097,948 | ||||||||||
3.4 | 12,012,242 | |||||||||||
Philippines 0.1% | ||||||||||||
Other Securities | 0.1 | 302,592 | ||||||||||
Poland 2.2% | ||||||||||||
Other Securities | 2.2 | 7,682,473 | ||||||||||
Republic of Korea 19.5% | ||||||||||||
Hyundai Heavy Industries Co., Ltd. | 8,097 | 0.5 | 1,933,540 | |||||||||
Hyundai Motor Co. | 17,754 | 1.2 | 4,229,781 | |||||||||
Korea Electric Power Corp. * | 69,180 | 0.5 | 1,847,520 | |||||||||
LG Corp. | 60,098 | 1.0 | 3,552,848 | |||||||||
LG Electronics, Inc. | 41,572 | 0.8 | 2,662,935 | |||||||||
POSCO | 15,989 | 1.4 | 4,773,370 | |||||||||
Samsung Electronics Co., Ltd. | 9,631 | 3.8 | 13,281,711 | |||||||||
Shinhan Financial Group Co., Ltd. | 51,500 | 0.6 | 2,245,586 | |||||||||
SK Holdings Co., Ltd. | 14,270 | 0.7 | 2,586,292 | |||||||||
SK Innovation Co., Ltd. | 14,167 | 0.6 | 1,985,633 | |||||||||
SK Telecom Co., Ltd. | 8,882 | 0.5 | 1,935,567 | |||||||||
Other Securities | 7.9 | 27,864,280 | ||||||||||
19.5 | 68,899,063 |
50 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Russia 14.4% | ||||||||||||
Gazprom ADR | 1,601,170 | 4.2 | 14,966,778 | |||||||||
LUKOIL ADR | 227,440 | 4.2 | 14,895,923 | |||||||||
Mining & Metallurgical Co. Norilsk Nickel OJSC ADR | 137,278 | 0.6 | 2,073,677 | |||||||||
Mobile TeleSystems ADR | 80,851 | 0.5 | 1,843,403 | |||||||||
Sberbank of Russia ADR | 178,572 | 0.6 | 2,277,217 | |||||||||
Surgutneftegas ADR | 674,607 | 1.7 | 5,947,681 | |||||||||
Tatneft ADR | 44,415 | 0.5 | 1,824,476 | |||||||||
Other Securities | 2.1 | 7,146,700 | ||||||||||
14.4 | 50,975,855 | |||||||||||
South Africa 7.1% | ||||||||||||
MTN Group Ltd. | 189,770 | 1.1 | 3,772,088 | |||||||||
Sasol Ltd. | 87,696 | 1.3 | 4,481,072 | |||||||||
Standard Bank Group Ltd. | 134,934 | 0.5 | 1,716,643 | |||||||||
Other Securities | 4.2 | 15,037,199 | ||||||||||
7.1 | 25,007,002 | |||||||||||
Taiwan 12.3% | ||||||||||||
China Steel Corp. | 1,996,489 | 0.5 | 1,735,083 | |||||||||
Chunghwa Telecom Co., Ltd. | 541,906 | 0.5 | 1,739,774 | |||||||||
Formosa Chemicals & Fibre Corp. | 801,442 | 0.7 | 2,316,435 | |||||||||
Formosa Plastics Corp. | 667,732 | 0.5 | 1,814,581 | |||||||||
Hon Hai Precision Industry Co., Ltd. | 1,697,800 | 1.2 | 4,316,306 | |||||||||
Nan Ya Plastics Corp. | 847,811 | 0.5 | 1,933,720 | |||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1,578,689 | 1.6 | 5,818,361 | |||||||||
Other Securities | 6.8 | 23,827,638 | ||||||||||
12.3 | 43,501,898 | |||||||||||
Thailand 1.0% | ||||||||||||
Other Securities | 1.0 | 3,640,235 | ||||||||||
Turkey 1.2% | ||||||||||||
Other Securities | 1.2 | 4,210,126 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $295,265,216) | 310,499,007 | |||||||||||
Preferred Stock 9.7% of net assets | ||||||||||||
Brazil 7.9% | ||||||||||||
Banco Bradesco S.A. | 160,730 | 0.7 | 2,315,627 | |||||||||
Gerdau S.A. | 211,465 | 0.5 | 1,668,694 | |||||||||
Itau Unibanco Holding S.A. | 265,540 | 1.2 | 4,108,657 | |||||||||
Petroleo Brasileiro S.A. | 806,682 | 2.1 | 7,314,281 | |||||||||
Vale S.A. | 297,839 | 1.2 | 4,359,523 | |||||||||
Other Securities | 2.2 | 7,998,643 | ||||||||||
7.9 | 27,765,425 | |||||||||||
Colombia 0.1% | ||||||||||||
Other Securities | 0.1 | 281,769 | ||||||||||
Republic of Korea 0.7% | ||||||||||||
Other Securities | 0.7 | 2,639,857 | ||||||||||
Russia 1.0% | ||||||||||||
AK Transneft OAO | 1,371 | 1.0 | 3,496,801 | |||||||||
Total Preferred Stock | ||||||||||||
(Cost $39,367,592) | 34,183,852 | |||||||||||
Other Investment Company 0.8% of net assets | ||||||||||||
United States 0.8% | ||||||||||||
iShares MSCI Emerging Markets ETF | 67,500 | 0.8 | 2,866,050 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $2,898,912) | 2,866,050 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 2.4% of net assets | ||||||||||||
Time Deposit 2.1% | ||||||||||||
Wells Fargo | ||||||||||||
0.03%, 11/01/13 | 7,430,418 | 2.1 | 7,430,418 | |||||||||
U.S. Treasury Obligation 0.3% | ||||||||||||
Other Securities | 0.3 | 994,994 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $8,425,412) | 8,425,412 | |||||||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $350,696,164 and the unrealized appreciation and depreciation were $36,850,839 and ($31,572,682), respectively, with a net unrealized appreciation of $5,278,157.
At 10/31/13, the values of certain foreign securities held by the fund aggregating $306,729,784 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. | |
(c) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
ADR — | American Depositary Receipt | |
ETF — | Exchange traded fund | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered |
See financial notes 51
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
In additional to the above the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI Emerging Markets, mini, Long, expires 12/20/13 | 90 | 4,607,550 | 141,576 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $— | $109,741,466 | $— | $109,741,466 | ||||||||||||
Brazil | 5,090,107 | 14,737,644 | — | 19,827,751 | ||||||||||||
Chile | 1,884,485 | 623,869 | — | 2,508,354 | ||||||||||||
Colombia | 910,628 | — | — | 910,628 | ||||||||||||
Czech Republic | 541,307 | 1,008,537 | — | 1,549,844 | ||||||||||||
Hungary | 409,837 | 1,702,881 | — | 2,112,718 | ||||||||||||
Malaysia | 563,762 | 5,067,614 | — | �� | 5,631,376 | |||||||||||
Mexico | 12,012,242 | — | — | 12,012,242 | ||||||||||||
Poland | 1,302,621 | 6,379,852 | — | 7,682,473 | ||||||||||||
Republic of Korea | 1,446,667 | 67,452,396 | — | 68,899,063 | ||||||||||||
Russia | 4,547,636 | 46,428,219 | — | 50,975,855 | ||||||||||||
South Africa | 481,116 | 24,525,886 | — | 25,007,002 | ||||||||||||
Thailand | 3,640,235 | — | — | 3,640,235 | ||||||||||||
Preferred Stock1 | — | 2,639,857 | — | 2,639,857 | ||||||||||||
Brazil | 1,343,862 | 26,421,563 | — | 27,765,425 | ||||||||||||
Colombia | 281,769 | — | — | 281,769 | ||||||||||||
Russia | 3,496,801 | — | — | 3,496,801 | ||||||||||||
Other Investment Company1 | 2,866,050 | — | — | 2,866,050 | ||||||||||||
Short-Term Investments1 | — | 8,425,412 | — | 8,425,412 | ||||||||||||
Total | $40,819,125 | $315,155,196 | $— | $355,974,321 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | $141,576 | $— | $— | $141,576 |
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 security transfers in the amount of $34,651,172 and $4,066,196 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended October 31, 2013. 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.
52 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $345,957,132) | $355,974,321 | |||||
Foreign currency, at value (cost $333,479) | 333,864 | |||||
Receivables: | ||||||
Fund shares sold | 481,627 | |||||
Dividends | 474,658 | |||||
Foreign tax reclaims | 8,545 | |||||
Income from securities on loan | 75 | |||||
Interest | 6 | |||||
Prepaid expenses | + | 5,395 | ||||
Total assets | 357,278,491 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 3,850,190 | |||||
Investment adviser and administrator fees | 4,039 | |||||
Shareholder service fees | 1,783 | |||||
Independent trustees’ fees | 8 | |||||
Fund shares redeemed | 122,974 | |||||
Variation margin on futures contracts | 51,300 | |||||
Foreign capital gains tax | 47,878 | |||||
Accrued expenses and other liabilities | + | 205,660 | ||||
Total liabilities | 4,283,832 | |||||
Net Assets | ||||||
Total assets | 357,278,491 | |||||
Total liabilities | − | 4,283,832 | ||||
Net assets | $352,994,659 | |||||
Net Assets by Source | ||||||
Capital received from investors | 351,869,438 | |||||
Net investment income not yet distributed | 5,875,828 | |||||
Net realized capital losses | (14,859,594 | ) | ||||
Net unrealized capital appreciation | 10,108,987 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$352,994,659 | 38,223,366 | $9.24 |
See financial notes 53
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,435,614) | $8,836,497 | |||||
Interest | 1,614 | |||||
Securities on loan | + | 2,353 | ||||
Total investment income | 8,840,464 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,620,621 | |||||
Shareholder service fees | 236,557 | |||||
Index fee | 328,739 | |||||
Custodian fees | 304,120 | |||||
Transfer agent fees | 75,084 | |||||
Portfolio accounting fees | 72,386 | |||||
Professional fees | 57,708 | |||||
Shareholder reports | 49,009 | |||||
Registration fees | 29,240 | |||||
Independent trustees’ fees | 9,290 | |||||
Interest expense | 1,505 | |||||
Other expenses | + | 53,074 | ||||
Total expenses | 2,837,333 | |||||
Expense reduction by CSIM and its affiliates | − | 1,182,837 | ||||
Net expenses | − | 1,654,496 | ||||
Net investment income | 7,185,968 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments (net of foreign capital gain tax of $6,534) | 337,384 | |||||
Net realized losses on futures contracts | (113,696 | ) | ||||
Net realized losses on foreign currency transactions | + | (154,200 | ) | |||
Net realized gains | 69,488 | |||||
Net change in unrealized appreciation on investments (net of foreign capital gain tax of ($47,878)) | 14,570,455 | |||||
Net change in unrealized appreciation on futures contracts | 141,576 | |||||
Net change in unrealized depreciation on foreign currency translations | + | (1,067 | ) | |||
Net change in unrealized appreciation | + | 14,710,964 | ||||
Net realized and unrealized gains | 14,780,452 | |||||
Increase in net assets resulting from operations | $21,966,420 |
54 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $7,185,968 | $8,746,795 | ||||||||
Net realized gains (losses) | 69,488 | (10,496,285 | ) | |||||||
Net change in unrealized appreciation | + | 14,710,964 | 1,914,953 | |||||||
Increase in net assets from operations | 21,966,420 | 165,463 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (8,681,589 | ) | (7,541,071 | ) | ||||||
Distributions from net realized gains | + | — | (5,755,205 | ) | ||||||
Total distributions | ($8,681,589 | ) | ($13,296,276 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 14,934,368 | $131,472,133 | 17,148,007 | $151,059,085 | ||||||||||||||
Shares reinvested | 618,303 | 5,583,275 | 938,276 | 7,843,989 | ||||||||||||||
Shares redeemed | + | (12,809,415 | ) | (111,551,317 | ) | (16,432,968 | ) | (141,900,887 | ) | |||||||||
Net transactions in fund shares | 2,743,256 | $25,504,091 | 1,653,315 | $17,002,187 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 35,480,110 | $314,205,737 | 33,826,795 | $310,334,363 | ||||||||||||||
Total increase | + | 2,743,256 | 38,788,922 | 1,653,315 | 3,871,374 | |||||||||||||
End of period | 38,223,366 | $352,994,659 | 35,480,110 | $314,205,737 | ||||||||||||||
Net investment income not yet distributed | $5,875,828 | $7,501,592 |
See financial notes 55
Table of Contents
Schwab Fundamental Index Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds 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 Large-Cap Growth Fund | |||
Schwab Fundamental US Large Company Index Fund | Schwab Small-Cap Equity Fund | |||
Schwab Fundamental US Small Company Index Fund | Schwab Hedged Equity Fund | |||
Schwab Fundamental International Large Company Index Fund | Schwab Financial Services Fund | |||
Schwab Fundamental International Small Company Index Fund | Schwab Health Care Fund | |||
Schwab Fundamental Emerging Markets Large Company 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 Target 2045 Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Target 2050 Fund | |||
Laudus International MarketMasters Fund | Schwab Target 2055 Fund | |||
Schwab Balanced Fund | Schwab Monthly Income Fund - Moderate Payout | |||
Schwab Core Equity Fund | Schwab Monthly Income Fund - Enhanced Payout | |||
Schwab Dividend Equity Fund | Schwab Monthly Income Fund - Maximum Payout | |||
Each fund in this report offers one share class. Shares are bought and sold (subject to a redemption fee, see financial note 9) at closing net asset value 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:
• | Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at 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 |
56
Table of Contents
Schwab Fundamental Index Funds
Financial Notes (continued)
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. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures. |
• | Foreign equity security 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 NAV 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. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures. | |
• | Futures and forward foreign currency exchange contracts: Futures are valued at their settlement prices as of the close of their exchanges. Forwards are valued based on that day’s forward exchange rates or by using an interpolated forward exchange rate for contracts with interim settlement dates. | |
• | Short-term securities (60 days or less to maturity): Short-term securities are valued at amortized cost, which approximates market value. | |
• | Underlying funds: Mutual funds are valued at their respective NAVs. Exchange traded funds (“ETFs”) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable. |
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 inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which 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 |
57
Table of Contents
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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, 2013 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 lending agent provides the fund with indemnification against borrower default. The fund bears the risk of loss with respect to the investment of cash collateral. 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. On loans collateralized by U.S. Treasury and/or federal agency obligations, a fee is received from the borrower, and is allocated between the fund and the lending agent.
The values of the securities on loan and the related cash collateral as of October 31, 2013 for the Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, and Schwab Fundamental International Small Company Index Fund are disclosed in each fund’s complete Portfolio Holdings and Statement of Assets and Liabilities.
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2. Significant Accounting Policies (continued):
The values of the securities on loan and the related cash collateral are disclosed in the Portfolio Holdings and the Statement of Assets and Liabilities for each fund. The following table presents the non-cash collateral as of October 31, 2013:
Non-Cash | ||||
Collateral Received | ||||
Schwab Fundamental US Large Company Index Fund | $1,618,115 | |||
Schwab Fundamental US Small Company Index Fund | 1,068,528 |
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
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 differences 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 may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures or forward 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.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
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.
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2. Significant Accounting Policies (continued):
(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, under which the funds may 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, 2013, 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 attributable to these arrangements 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 has evaluated ASU No. 2011-11 and determined that upon adoption of the standard the funds’ financial statement disclosures will include the enhanced disclosures around rights of offset and related arrangements as required by the standard.
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 comparative index, although it may not be successful in doing so. The divergence between the performance of a fund and its 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
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3. Risk Factors (continued):
index, or match the securities’ weightings to the 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 its comparative 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 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, 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, 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 small company stocks, for instance — a fund’s large-cap holdings could reduce performance.
Historically, small-cap stocks have been riskier than large-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 stocks, for instance — a fund’s small-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 market countries 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 a fund’s investments in emerging market countries and, at times, it may be difficult to value such investments.
A fund may purchase shares of ETFs 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
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3. Risk Factors (continued):
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.
For its advisory and administrative services to the 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). 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 with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with
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4. Affiliates and Affiliated Transactions (continued):
the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (“expense limitation”). 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% | 0.49% | 0.49% |
* | Prior to June 11, 2013, the expense limitation of the Schwab Fundamental International Small Company Index Fund and the Schwab Fundamental Emerging Markets Large Company Index Fund was 0.55% and 0.60%, respectively. |
In addition to the contractual expense limitation agreements noted above, to further help offset the costs of a change in the comparative index for certain funds, CSIM agreed to voluntarily waive the net operating expenses to 0.00% (excluding interest, taxes, and certain non-routine expenses) 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.
CSIM has a licensing agreement with the 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.
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 | Dividends | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Fund | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Fundamental US Large Company Index Fund | 145,215 | 14,800 | (22,000 | ) | 138,015 | $3,126,040 | ($4,883 | ) | $34,594 |
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, 2013, each fund’s total aggregate security transactions with other Schwab Funds were as follows:
Schwab Fundamental US Large Company Index Fund | $35,885,752 | |||
Schwab Fundamental US Small Company Index Fund | 35,885,752 | |||
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 to be charged on a 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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5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust 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. For information regarding the trustees please refer to Trustees and Officers table at the end of this report.
6. 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.
7. 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 variation margin for futures contracts held at October 31, 2013 are presented on the face of the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized/unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period, the month-end average contract 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 | $41,145,198 | 515 | ||||||
Schwab Fundamental US Small Company Index Fund | 11,780,547 | 122 | ||||||
Schwab Fundamental International Large Company Index Fund | 8,586,967 | 100 | ||||||
Schwab Fundamental International Small Company Index Fund | 1,602,153 | 19 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 4,099,915 | 81 |
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2013, 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 | $737,947,832 | $252,638,681 | ||||||
Schwab Fundamental US Small Company Index Fund | 220,347,520 | 192,377,290 | ||||||
Schwab Fundamental International Large Company Index Fund | 126,817,989 | 129,472,603 | ||||||
Schwab Fundamental International Small Company Index Fund | 64,501,300 | 32,596,936 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 89,819,651 | 71,045,799 |
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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 | |||||||
(11/1/12-10/31/13) | (11/1/11-10/31/12) | |||||||
Schwab Fundamental US Large Company Index Fund | $30,032 | $30,160 | ||||||
Schwab Fundamental US Small Company Index Fund | 7,961 | 6,059 | ||||||
Schwab Fundamental International Large Company Index Fund | 6,437 | 6,070 | ||||||
Schwab Fundamental International Small Company Index Fund | 3,107 | 850 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 4,863 | 9,049 |
10. Federal Income Taxes:
As of October 31, 2013, 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 | $36,477,121 | $22,250,148 | $15,948,326 | $3,891,755 | $6,097,122 | |||||||||||||||
Undistributed long-term capital gains | — | 20,818,122 | — | — | — | |||||||||||||||
Unrealized appreciation on investments | 793,590,567 | 235,087,813 | 136,191,155 | 29,925,605 | 36,850,839 | |||||||||||||||
Unrealized depreciation on investments | (13,684,050 | ) | (11,428,688 | ) | (8,963,043 | ) | (3,953,348 | ) | (31,572,682 | ) | ||||||||||
Other unrealized appreciation (depreciation) | — | 2 | 15,968 | 2,728 | (3,412 | ) | ||||||||||||||
Net unrealized appreciation (depreciation) | $779,906,517 | $223,659,127 | $127,244,080 | $25,974,985 | $5,274,745 | |||||||||||||||
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.
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10. Federal Income Taxes (continued):
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2013, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates 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 | ||||||||||||||||
Expiration Date | Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||
October 31, 2016 | $— | $— | $6,761,375 | $— | $— | |||||||||||||||
October 31, 2017 | 12,619,654 | — | 58,777,944 | — | — | |||||||||||||||
October 31, 2018 | — | — | 20,948,477 | — | — | |||||||||||||||
No expiration* | — | — | 31,890,310 | 3,782,968 | 10,246,643 | |||||||||||||||
Total | $12,619,654 | $— | $118,378,106 | ** | $3,782,968 | $10,246,643 | ** | |||||||||||||
* | As a result of the passage of the Regulated Investment Company Modernization Act of 2010, capital losses incurred after December 31, 2010 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 may increase the likelihood that the pre-enactment capital losses may 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. | |
** | For the year ended October 31, 2013, the Schwab Fundamental International Large Company Index Fund and the Schwab Fundamental Emerging Markets Index Fund utilized post-RIC Modernization enactment short-term capital losses of $1,295,562 and $827,213 respectively. |
For the year ended October 31, 2013, 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 | $51,247,926 | $— | $— | $1,027,038 | $605,972 |
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 | $42,909,493 | $11,947,531 | $15,274,655 | $3,109,770 | $8,681,589 | |||||||||||||||
Long-term capital gains | — | 50,580,881 | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior 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 | — | — | — | — | — |
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
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Schwab Fundamental Index Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
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, which are mainly due to differing treatments of paydown gains and losses and amortization of bond discounts and premiums, 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, 2013, 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 | $— | $— | $— | $— | $— | |||||||||||||||
Undistributed net investment income | (29,755 | ) | (511,990 | ) | 160,038 | 386,350 | (130,143 | ) | ||||||||||||
Net realized capital gains (losses) | 29,755 | 511,990 | (160,038 | ) | (386,350 | ) | 130,143 |
As of October 31, 2013, 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, 2013, the funds did not incur any interest or penalties.
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 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
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, 2013, and 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 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 at October 31, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 17, 2013
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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, 2013, 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 | 1,112,215 | 19,888,675 | ||||||
Schwab Fundamental International Small Company Index Fund | 199,814 | 2,914,857 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 1,431,677 | 10,238,446 |
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2013, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Fundamental US Large Company Index Fund | 100.00 | ||||
Schwab Fundamental US Small Company Index Fund | 56.26 | ||||
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, 2013, 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 2014 via IRS form 1099 of the amounts for use in preparing their 2013 income tax return.
Schwab Fundamental US Large Company Index Fund | $42,909,493 | |||
Schwab Fundamental US Small Company Index Fund | 7,273,206 | |||
Schwab Fundamental International Large Company Index Fund | 15,390,349 | |||
Schwab Fundamental International Small Company Index Fund | 2,099,126 | |||
Schwab Fundamental Emerging Markets Large Company Index Fund | 5,596,129 |
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, 2013:
Schwab Fundamental US Large Company Index Fund | $— | |||
Schwab Fundamental US Small Company Index Fund | 50,580,881 | |||
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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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 U.S. Large Company Index Fund, Schwab Fundamental U.S. 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 23, 2013, and June 4, 2013, and approved the renewal of the Agreement with respect to the Funds for an additional one-year term at the meeting held on June 4, 2013. 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 their review of Fund expenses and adviser profitability discussed below. Although Schwab Fundamental Emerging Markets Large Company Index Fund and Schwab Fundamental International Small Company Index Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect Schwab Fundamental Emerging Markets Large Company Index Fund and Schwab Fundamental International Small Company Index Fund, including 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 and that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers 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 99 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the 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 (advisory services firm) (Oct. 2001 – present). | 76 | Director, WageWorks, Inc. (2010 – present) 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. 2000 – present). | 76 | 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). | 76 | Director, TOUSA (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Mission West Properties (1998 – 2012) Director, Ditech Networks Corporation (1997 – 2012) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 76 | 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). | 76 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) | |||
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). | 76 | Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc. (2009 – present) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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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. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present). | 76 | 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. | 76 | 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. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. 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. | 99 | None | |||
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 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). | |
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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
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 (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). | |
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). | |
David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Capital Trust since 2011.) | Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President and Assistant Secretary (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 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of 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 own stock of The Charles Schwab Corporation, the parent company of 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.
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 capital gain or loss is considered unrealized appreciation or depreciation.
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.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
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. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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.
restricted and illiquid securities. Restricted securities are securities that are subject to legal restrictions on their sale. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the 1933 Act, or in a registered public offering. Certain restricted securities, such as 4(2) commercial paper and Rule 144A securities, may be considered to be liquid if they meet the criteria for liquidity established by the Board of Trustees. Illiquid securities generally are any securities that cannot be disposed of promptly and in the ordinary course of business at approximately the amount at which a fund has valued the instruments. The liquidity of a fund’s investments is monitored under the supervision and direction of the Board of Trustees. Investments currently not considered liquid include repurchase agreements not maturing within seven days and certain restricted securities.
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. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
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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
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Notes
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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 Funds’ 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 Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 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 Index 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®.
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/0000950123-14-000021/f30154ctschwab02.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.
© 2013 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR39592-06
00107469
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![(LAUDUS FUNDS LOGO)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctlaudusbw.gif)
Annual report dated October 31, 2013, enclosed.
COMMAND PERFORMANCETM
Laudus MarketMasters Fundstm
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This wrapper is not part of the shareholder report.
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Annual Report October 31, 2013 | ![]() |
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 | ||
32 | ||
59 | ||
69 | ||
70 | ||
Approval of New Sub-Advisory Agreement and Renewal of Investment Advisory and Sub-Advisory Agreements | 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 Schwab. 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.laudus.com/prospectus.
Total Return for the 12 Months Ended October 31, 2013 | ||||
Laudus Small-Cap MarketMasters Fundtm | ||||
Investor Shares (Ticker Symbol: SWOSX) | 31.51% | |||
Select Shares® (Ticker Symbol: SWMSX) | 31.73% | |||
Russell 2000® Index | 36.28% | |||
Fund Category: Morningstar Small Growth | 36.78% | |||
Performance Details | pages 6-7 | |||
Laudus International MarketMasters Fundtm | ||||
Investor Shares1 (Ticker Symbol: SWOIX) | 27.23% | |||
Select Shares®1 (Ticker Symbol: SWMIX) | 27.43% | |||
MSCI EAFE® Index (Gross) | 27.40% | |||
Fund Category: Morningstar Foreign Large Growth | 20.72% | |||
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.
For index definitions, please see the Glossary.
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.
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
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From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctpchandom.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 would like to thank you for trusting us to help you meet your investment goals, and for reading this annual report concerning the Laudus MarketMasters Funds. The funds combine complementary strategies from leading investment managers, providing diversification across multiple investment styles.
Turning to the 12 months ended October 31, 2013, the returns of the funds reflected a global rally by stocks, although the Laudus Small-Cap MarketMasters Fund underperformed its benchmark index. At the center of the global rally by stocks were policies by many central banks that attempted to keep interest rates low to stimulate economic growth. Stocks generally benefitted from these policies and low interest rates made financing more affordable for businesses and households. However, some signs of improvement in the U.S. economy led the Federal Reserve to initially consider “tapering” its purchases of securities to keep interest rates low, and stocks sank globally in response. This included stocks in emerging markets, where the prospect of higher U.S. interest rates added to concerns early in 2013 about relatively high inflation and slower economic growth. A brief U.S. federal government shutdown and budgetary gridlock added to market uncertainty late in the reporting period.
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2013
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 27.18% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 36.28% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 26.88% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | −1.08% | 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/0000950123-14-000021/f30154ctcaptst09.gif)
Index figures assume dividends and distributions were reinvested, and do not include trading and management costs, which would lower performance. Indices are unmanaged, do not incur management fees, costs and expenses, and you cannot invest in them directly. Remember that past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
Laudus MarketMasters Funds 3
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From the President continued
Turning to the 12 months ended October 31, 2013, the returns of the funds reflected a global rally by stocks.
The Fed’s anticipated tapering never materialized. In addition, conditions in the euro zone remained relatively stable, and the debt ceiling crisis and governmental shutdown in the U.S. were addressed. This led to a renewed rally by stocks. Amid this backdrop, the Russell 2000 Index, representing small-cap U.S. stocks, returned 36.3% for the reporting period, while the MSCI EAFE Index, representing stocks in Europe, Australasia and the Far East, returned 27.4%.
For more information about the Laudus MarketMasters Funds, please continue reading this report. In addition, you can find further details about the Laudus MarketMasters Funds and our other investment products by visiting www.laudus.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctschandom.gif)
4 Laudus MarketMasters Funds
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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
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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 strong 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 a fund’s comparative index.
For the 12-month period ended October 31, 2013, Investor Shares of the Laudus Small-Cap MarketMasters Fund (the fund) returned 31.51%. The fund’s comparative index, the Russell 2000 Index (the index), returned 36.28%.
Market Highlights. U.S. stocks enjoyed very strong gains over the 12-month period, with major U.S. stock market indexes repeatedly reaching record highs throughout the period. The economy continued to recover, albeit at a slower pace than the U.S. Federal Reserve (the Fed) seemed to believe was self-sustaining. The Fed maintained an accommodative monetary policy throughout the period, keeping short-term interest rates near historic low levels. In addition, the unemployment rate fell during the period and inflation remained benign.
Positioning and Strategies. Over the 12-month period, the fund’s value tilt detracted from performance, although that was partially offset by the fund’s allocation to one of its sub-advisers that focuses on growth. Manager selection detracted due to the underperformance of two of the fund’s sub-advisers relative to their respective comparative indexes.
Despite its strong contribution to the fund’s total return, the fund’s TAMRO Capital Partners allocation underperformed its comparative index, the Russell 2000 Index, and detracted from the fund’s relative performance. TAMRO’s underperformance was primarily due to its stock selection, most significantly in the Consumer Staples, Information Technology, and Industrials sectors.
A strong performance by the fund’s allocation to Wellington Management Company, LLP also contributed to the fund’s total return, and this allocation’s outperformance of its comparative index also enhanced the fund’s relative return. This outperformance was partially driven by a significant underweight in the Financials sector and significant overweights in Industrials and, to a lesser extent, Health Care. Wellington Management’s stock selection also contributed, most notably within the Energy, Financials, and Materials sectors.
In March 2013, BMO Asset Management was added as a sub-adviser to the fund, replacing Neuberger Berman Management and representing approximately 23% of the fund as of October 31, 2013. BMO, which has a growth emphasis, slightly outperformed its comparative index, contributing positively to the fund’s relative performance. BMO’s strongest contributions came from its stock selection among Information Technology and Energy stocks, although its stock selection among Industrials and Financials detracted.
During the period, the fund’s allocation to TAMRO was reduced from approximately 49% at the start of the reporting period to roughly 29% as of October 31, 2013, while its allocation to Wellington Management rose from approximately 23% to 36%.
As of 10/31/13:
Statistics
Number of Holdings | 1,744 | |||
Weighted Average Market Cap ($ x 1,000,000) | $2,187 | |||
Price/Earnings Ratio (P/E) | 26.8 | |||
Price/Book Ratio (P/B) | 2.3 | |||
Portfolio Turnover Rate | 97% |
Sector Weightings % of Investments
Financials | 18.6% | |||
Industrials | 15.7% | |||
Consumer Discretionary | 14.1% | |||
Health Care | 12.8% | |||
Information Technology | 12.8% | |||
Energy | 7.6% | |||
Consumer Staples | 4.1% | |||
Materials | 4.0% | |||
Utilities | 2.2% | |||
Telecommunication Services | 0.8% | |||
Other | 7.3% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Belden | 1.3% | |||
Unit Corp. | 1.1% | |||
SEACOR Holdings, Inc. | 1.0% | |||
Bellatrix Exploration Ltd. | 1.0% | |||
LaSalle Hotel Properties | 1.0% | |||
DexCom, Inc. | 0.9% | |||
Mueller Industries, Inc. | 0.9% | |||
Charles River Laboratories International, Inc. | 0.9% | |||
American Capital Ltd. | 0.9% | |||
United Stationers, Inc. | 0.8% | |||
Total | 9.8% |
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
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Laudus Small-Cap MarketMasters Fundtm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment (Investor Shares)1
Performance of Hypothetical
$10,000 Investment (Investor Shares)1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctlsmf1.gif)
June 9, 2004 – October 31, 2013
Performance of Hypothetical
$50,000 Investment (Select Shares)1
Performance of Hypothetical
$50,000 Investment (Select Shares)1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctlsmf2.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | |||||||||||||
Investor Shares (9/16/97) | 31.51 | % | 14.51 | % | 7.44 | % | 6.47% | ||||||||||
Select Shares® (6/9/04) | 31.73 | % | 14.70 | % | n/a | 7.10% | |||||||||||
Russell 2000® Index | 36.28 | % | 17.04 | % | 9.03 | % | (9/16/97) 7.23% | ||||||||||
(6/9/04) 8.52% | |||||||||||||||||
Fund Category: Morningstar Small Growth | 36.78 | % | 19.13 | % | 8.93 | % | (9/16/97) 7.96% | ||||||||||
(6/9/04) 9.06% |
Fund Expense Ratios3: Investor Shares: Net 1.36%; Gross 1.60% / Select Shares: Net 1.21%; Gross 1.52%
Investment Managers and Allocations4
% of | |||||||
Investment Managers | Investment Style | Net Assets | |||||
Wellington Management Company, LLP | Small-Cap Value | 35.8 | % | ||||
TAMRO Capital Partners LLC | Small-Cap Blend | 28.6 | % | ||||
BMO Asset Management Corp.5 | Small-Cap Growth | 22.7 | % | ||||
Mellon Capital Management Corp. | Small-Cap Blend | 8.9 | % | ||||
Cash and other assets | — | 4.0 | % | ||||
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.
For index definitions, please see the Glossary.
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. 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. | |
5 | On February 28, 2013, the fund’s Board of Trustees approved the addition of BMO Asset Management Corporation (BMO) as an investment manager to the fund, replacing Neuberger Berman Management LLC. BMO began managing its portion of the fund’s assets on or around March 14, 2013. |
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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 strong 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 a fund’s comparative index.
For the 12-month period ended October 31, 2013, Investor Shares of the Laudus International MarketMasters Fund (the fund) returned 27.23%, slightly underperforming its comparative index, the MSCI EAFE Index (the index), which returned 27.40%.
Market Highlights. Stocks enjoyed strong gains during the 12-month reporting period, buoyed by a rebound in the global economy and continuing U.S. monetary stimulus. The situation in the Eurozone continued to stabilize, and yields on sovereign bonds of distressed countries continued to recede. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged both significantly.
Positioning and Strategies. Over the 12-month period, the fund’s growth tilt detracted from performance, although that was partially offset by the fund’s allocation to value managers. The fund’s selection of managers added value as a result of strong performance from three of the fund’s sub-advisers, although two detracted due to their relative performances.
Mondrian Investment Partners, which uses a value-oriented investment approach, underperformed its comparative index for the reporting period, and detracted from the fund’s relative performance. Mondrian’s underperformance was primarily due to its defensive stock selections that were not able to keep up in a strongly rising market environment, particularly in parts of Europe. An underweight position in Japan and an overweight position in Singapore also detracted from the fund’s relative performance.
Harris Associates, on the other hand, with its large-cap value focus, outperformed its comparative index by more than 16%, contributing significantly to the fund’s relative performance. Harris Associates’ allocations added notable value, particularly its lack of exposure to the Energy sector and its overweight of Consumer Discretionary. But it was Harris Associates’ stock selection that added the greatest value, most notably within the Financials sector, but also among Consumer Discretionary, Health Care and Information Technology stocks, and among stocks in the United Kingdom, Japan and Germany.
American Century, which focuses on small-cap growth stocks, outperformed its comparative index by more than 12%, enough to overcome the drag due to its growth orientation. American Century’s greatest contribution came from its stock selection, particularly in the Consumer Discretionary Sector, but also among Industrials, Financials and Consumer Staples stocks.
William Blair & Company, which takes an all-cap growth approach, also outperformed its comparative index, but by a smaller degree, contributing positively to the fund’s relative performance.
WHV Investment Management, which takes a top-down sector allocation approach and focuses on long-term growth cycle trends, underperformed its comparative index and dragged on the fund’s relative performance.
As of 10/31/13:
Country Weightings % of Investments
United Kingdom | 19.5% | |||
Japan | 12.7% | |||
Germany | 9.5% | |||
France | 8.3% | |||
Switzerland | 7.4% | |||
United States | 5.4% | |||
Australia | 4.8% | |||
Canada | 3.8% | |||
Netherlands | 3.6% | |||
Singapore | 3.2% | |||
Sweden | 2.8% | |||
Hong Kong | 2.6% | |||
Other Countries | 16.4% | |||
Total | 100.0% |
Statistics
Number of Holdings | 1,227 | |||
Weighted Average Market Cap ($ x 1,000,000) | $30,725 | |||
Price/Earnings Ratio (P/E) | 19.5 | |||
Price/Book Ratio (P/B) | 1.5 | |||
Portfolio Turnover Rate | 65% |
Sector Weightings % of Investments
Industrials | 21.9% | |||
Financials | 19.0% | |||
Consumer Discretionary | 17.2% | |||
Information Technology | 9.1% | |||
Materials | 7.6% | |||
Consumer Staples | 7.3% | |||
Health Care | 5.7% | |||
Energy | 4.2% | |||
Telecommunication Services | 2.0% | |||
Utilities | 0.7% | |||
Other | 5.3% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Credit Suisse Group AG – Reg’d | 1.5% | |||
BNP Paribas S.A. | 1.3% | |||
Intesa Sanpaolo S.p.A. | 1.1% | |||
Bayerische Motoren Werke AG | 1.0% | |||
Allianz SE – Reg’d | 0.9% | |||
Lloyds Banking Group plc | 0.9% | |||
Daimler AG – Reg’d | 0.8% | |||
Rotork plc | 0.8% | |||
Canon, Inc. | 0.8% | |||
Koninklijke Boskalis Westminster N.V. | 0.8% | |||
Total | 9.9% |
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 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment (Investor Shares)1
Performance of Hypothetical
$10,000 Investment (Investor Shares)1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctlimf1.gif)
April 2, 2004 – October 31, 2013
Performance of Hypothetical
$50,000 Investment (Select Shares)1
Performance of Hypothetical
$50,000 Investment (Select Shares)1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctlimf2.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | |||||||||||||
Investor Shares (10/16/96) | 27.23 | % | 17.30 | % | 10.27 | % | 9.49% | ||||||||||
Select Shares® (4/2/04) | 27.43 | % | 17.47 | % | n/a | 9.35% | |||||||||||
MSCI EAFE® Index (Gross) | 27.40 | % | 12.52 | % | 8.20 | % | (10/16/96) 5.58% | ||||||||||
(4/2/04) 6.85% | |||||||||||||||||
Fund Category: Morningstar Foreign Large Growth | 20.72 | % | 13.27 | % | 7.86 | % | (10/16/96) 6.39% | ||||||||||
(4/2/04) 6.67% |
Fund Expense Ratios3: Investor Shares: Net 1.40%; Gross 1.62% / Select Shares: Net 1.25%; Gross 1.47%
Investment Managers and Allocations4
% of | |||||||
Investment Managers | Investment Style | Net Assets | |||||
Harris Associates L.P. | International Large-Cap Value | 23.3 | % | ||||
Mondrian Investment Partners Limited | International Small-Cap Value | 20.6 | % | ||||
American Century Investment Management, Inc. | International Small/Mid-Cap Growth | 19.2 | % | ||||
William Blair & Company, LLC | International Multi-Cap Growth | 18.7 | % | ||||
Mellon Capital Management Corp. | International Blend | 8.9 | % | ||||
WHV Investment Management | International Large-Cap Growth | 5.3 | % | ||||
Cash and other assets | — | 4.0 | % | ||||
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.
For index definitions, please see the Glossary.
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.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. | |
4 | 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 may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2013 and held through October 31, 2013.
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 a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/13 | at 10/31/13 | 5/1/13–10/31/13 | |||||||||||||
Laudus Small-Cap MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.35% | $ | 1,000.00 | $ | 1,154.30 | $ | 7.33 | |||||||||
Hypothetical 5% Return | 1.35% | �� | $ | 1,000.00 | $ | 1,018.40 | $ | 6.87 | ||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.20% | $ | 1,000.00 | $ | 1,155.30 | $ | 6.52 | |||||||||
Hypothetical 5% Return | 1.20% | $ | 1,000.00 | $ | 1,019.16 | $ | 6.11 | |||||||||
Laudus International MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.40% | $ | 1,000.00 | $ | 1,091.20 | $ | 7.38 | |||||||||
Hypothetical 5% Return | 1.40% | $ | 1,000.00 | $ | 1,018.15 | $ | 7.12 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.25% | $ | 1,000.00 | $ | 1,091.70 | $ | 6.59 | |||||||||
Hypothetical 5% Return | 1.25% | $ | 1,000.00 | $ | 1,018.90 | $ | 6.36 |
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 365 days of the fiscal year. |
10 Laudus MarketMasters Funds
Table of Contents
Laudus Small-Cap MarketMasters Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
Investor Shares | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.14 | 11.99 | 11.52 | 9.40 | 8.78 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.02 | )1 | (0.10 | )1 | (0.09 | )1 | (0.08 | )1 | (0.05 | )1 | ||||||||||||
Net realized and unrealized gains (losses) | 4.16 | 1.25 | 0.56 | 2.20 | 0.67 | |||||||||||||||||
Total from investment operations | 4.14 | 1.15 | 0.47 | 2.12 | 0.62 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | — | — | (0.00 | )2 | ||||||||||||||||
Net asset value at end of period | 17.28 | 13.14 | 11.99 | 11.52 | 9.40 | |||||||||||||||||
Total return (%) | 31.51 | 9.59 | 4.08 | 22.55 | 7.10 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.35 | 1.42 | 3 | 1.46 | 1.46 | 1.48 | 4 | |||||||||||||||
Gross operating expenses | 1.59 | 1.59 | 1.51 | 1.50 | 1.50 | |||||||||||||||||
Net investment income (loss) | (0.16 | ) | (0.79 | ) | (0.70 | ) | (0.72 | ) | (0.64 | ) | ||||||||||||
Portfolio turnover rate | 97 | 144 | 95 | 78 | 129 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 76 | 65 | 62 | 68 | 64 |
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
Select Shares | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.33 | 12.14 | 11.64 | 9.49 | 8.86 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.00 | )1 | (0.08 | )1 | (0.07 | )1 | (0.06 | )1 | (0.04 | )1 | ||||||||||||
Net realized and unrealized gains (losses) | 4.23 | 1.27 | 0.57 | 2.21 | 0.68 | |||||||||||||||||
Total from investment operations | 4.23 | 1.19 | 0.50 | 2.15 | 0.64 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | — | — | (0.01 | ) | ||||||||||||||||
Net asset value at end of period | 17.56 | 13.33 | 12.14 | 11.64 | 9.49 | |||||||||||||||||
Total return (%) | 31.73 | 9.80 | 4.30 | 22.66 | 7.29 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.20 | 1.27 | 3 | 1.31 | 1.32 | 5 | 1.33 | 4 | ||||||||||||||
Gross operating expenses | 1.53 | 1.51 | 1.45 | 1.45 | 1.45 | |||||||||||||||||
Net investment income (loss) | (0.03 | ) | (0.60 | ) | (0.54 | ) | (0.58 | ) | (0.48 | ) | ||||||||||||
Portfolio turnover rate | 97 | 144 | 95 | 78 | 129 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 113 | 88 | 219 | 337 | 292 |
1 Calculated based on the average shares outstanding during the period.
2 Per share amount was less than $0.01.
3 Effective June 6, 2012, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/12 is a blended ratio.
4 Effective February 28, 2009, the operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended ratio.
5 The ratio of net operating expenses would have been 1.31%, if certain non-routine expense had not been incurred.
See financial notes 11
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.laudus.com.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
93 | .3% | Common Stock | 139,348,839 | 175,847,188 | ||||||||
7 | .1% | Other Investment Companies | 13,356,726 | 13,475,494 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
0 | .2% | Short-Term Investments | 351,994 | 351,994 | ||||||||
100 | .6% | Total Investments | 153,057,559 | 189,674,676 | ||||||||
(0 | .6%) | Other Assets and Liabilities, Net | (1,046,839 | ) | ||||||||
100 | .0% | Net Assets | 188,627,837 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 93.3% of net assets | ||||||||
Automobiles & Components 0.2% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 707 | 13,157 | ||||||
Cooper Tire & Rubber Co. | 817 | 21,250 | ||||||
Dana Holding Corp. | 1,753 | 34,359 | ||||||
Dorman Products, Inc. | 200 | 9,722 | ||||||
Drew Industries, Inc. | 170 | 8,544 | ||||||
Fuel Systems Solutions, Inc. * | 223 | 4,005 | ||||||
Gentherm, Inc. * | 278 | 6,491 | ||||||
Modine Manufacturing Co. * | 840 | 11,189 | ||||||
Standard Motor Products, Inc. | 198 | 7,160 | ||||||
Stoneridge, Inc. * | 155 | 1,978 | ||||||
Superior Industries International, Inc. | 233 | 4,369 | ||||||
Tenneco, Inc. * | 752 | 39,909 | ||||||
Winnebago Industries, Inc. * | 7,164 | 212,484 | ||||||
374,617 | ||||||||
Banks 7.2% | ||||||||
1st Source Corp. | 167 | 5,240 | ||||||
1st United Bancorp, Inc. | 253 | 1,933 | ||||||
Access National Corp. | 130 | 1,889 | ||||||
American National Bankshares, Inc. | 73 | 1,675 | ||||||
Ameris Bancorp * | 102 | 1,867 | ||||||
Ames National Corp. | 74 | 1,667 | ||||||
Arrow Financial Corp. | 68 | 1,755 | ||||||
Astoria Financial Corp. | 570 | 7,530 | ||||||
Banco Latinoamericano de Comercio Exterior, S.A., Class E | 540 | 14,164 | ||||||
BancorpSouth, Inc. | 1,212 | 26,785 | ||||||
Bank Mutual Corp. | 891 | 5,667 | ||||||
Bank of Kentucky Financial Corp. | 63 | 1,815 | ||||||
Bank of Marin Bancorp | 43 | 1,830 | ||||||
Bank of the Ozarks, Inc. | 26,686 | 1,320,423 | ||||||
BankFinancial Corp. | 420 | 3,902 | ||||||
Banner Corp. | 363 | 13,888 | ||||||
Bar Harbor Bankshares | 47 | 1,774 | ||||||
BBCN Bancorp, Inc. | 963 | 14,281 | ||||||
Berkshire Hills Bancorp, Inc. | 188 | 4,770 | ||||||
BofI Holding, Inc. * | 193 | 11,661 | ||||||
Boston Private Financial Holdings, Inc. | 946 | 10,775 | ||||||
Bridge Bancorp, Inc. | 76 | 1,755 | ||||||
Bridge Capital Holdings * | 106 | 1,865 | ||||||
Brookline Bancorp, Inc. | 662 | 5,872 | ||||||
Bryn Mawr Bank Corp. | 73 | 2,034 | ||||||
C&F Financial Corp. | 32 | 1,725 | ||||||
Camden National Corp. | 47 | 1,896 | ||||||
Capital Bank Financial Corp., Class A * | 90 | 2,000 | ||||||
Capital City Bank Group, Inc. * | 144 | 1,771 | ||||||
Capitol Federal Financial, Inc. | 1,245 | 15,774 | ||||||
Cardinal Financial Corp. | 319 | 5,264 | ||||||
Cascade Bancorp * | 290 | 1,499 | ||||||
Cathay General Bancorp | 913 | 22,487 | ||||||
Center Bancorp, Inc. | 133 | 1,990 | ||||||
Centerstate Banks, Inc. | 196 | 1,933 | ||||||
Century Bancorp, Inc., Class A | 48 | 1,560 | ||||||
Charter Financial Corp. | 168 | 1,821 | ||||||
Chemical Financial Corp. | 186 | 5,448 | ||||||
Chemung Financial Corp. | 50 | 1,762 | ||||||
Citizens & Northern Corp. | 277 | 5,474 | ||||||
City Holding Co. | 117 | 5,324 | ||||||
Clifton Savings Bancorp, Inc. | 139 | 1,756 | ||||||
CNB Financial Corp. | 102 | 2,041 | ||||||
Columbia Banking System, Inc. | 609 | 15,645 | ||||||
Community Bank System, Inc. | 576 | 20,915 | ||||||
Community Trust Bancorp, Inc. | 169 | 7,198 | ||||||
ConnectOne Bancorp, Inc. * | 56 | 2,129 | ||||||
CVB Financial Corp. | 989 | 14,380 | ||||||
Dime Community Bancshares, Inc. | 304 | 4,973 | ||||||
Doral Financial Corp. * | 66 | 1,115 | ||||||
Eagle Bancorp, Inc. * | 294 | 7,776 | ||||||
Enterprise Bancorp, Inc. | 99 | 1,934 | ||||||
Enterprise Financial Services Corp. | 341 | 6,148 | ||||||
ESB Financial Corp. | 136 | 1,810 | ||||||
ESSA Bancorp, Inc. | 310 | 3,398 | ||||||
EverBank Financial Corp. | 569 | 8,603 | ||||||
F.N.B. Corp. | 1,926 | 24,094 | ||||||
Farmers Capital Bank Corp. * | 75 | 1,541 | ||||||
Federal Agricultural Mortgage Corp., Class C | 62 | 2,213 | ||||||
Financial Institutions, Inc. | 161 | 3,811 | ||||||
First Bancorp, Inc. | 103 | 1,793 | ||||||
First Busey Corp. | 79,609 | 411,579 | ||||||
First Commonwealth Financial Corp. | 784 | 6,813 | ||||||
First Community Bancshares, Inc. | 107 | 1,786 | ||||||
First Connecticut Bancorp, Inc. | 350 | 5,138 | ||||||
First Defiance Financial Corp. | 73 | 1,885 | ||||||
First Federal Bancshares of Arkansas, Inc. * | 215 | 1,931 | ||||||
First Financial Bancorp | 612 | 9,498 | ||||||
First Financial Bankshares, Inc. | 383 | 23,558 |
12 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
First Financial Corp. | 124 | 4,283 | ||||||
First Financial Holdings, Inc. | 154 | 9,229 | ||||||
First Midwest Bancorp, Inc. | 65,912 | 1,096,117 | ||||||
First Niagara Financial Group, Inc. | 64,100 | 707,023 | ||||||
Firstmerit Corp. | 52,379 | 1,176,432 | ||||||
Flushing Financial Corp. | 30,222 | 607,160 | ||||||
Fox Chase Bancorp, Inc. | 185 | 3,195 | ||||||
Franklin Financial Corp. | 185 | 3,491 | ||||||
German American Bancorp, Inc. | 77 | 2,093 | ||||||
Glacier Bancorp, Inc. | 51,945 | 1,435,240 | ||||||
Great Southern Bancorp, Inc. | 188 | 5,279 | ||||||
Guaranty Bancorp | 155 | 2,093 | ||||||
Hancock Holding Co. | 19,306 | 632,851 | ||||||
Hanmi Financial Corp. | 351 | 6,135 | ||||||
Heartland Financial USA, Inc. | 62 | 1,642 | ||||||
Heritage Commerce Corp. | 248 | 1,932 | ||||||
Heritage Financial Corp. | 278 | 4,484 | ||||||
Heritage Oaks Bancorp * | 282 | 1,932 | ||||||
Hingham Institution for Savings | 27 | 1,963 | ||||||
Home Bancorp, Inc. * | 90 | 1,635 | ||||||
Home Bancshares, Inc. | 604 | 20,464 | ||||||
Home Federal Bancorp, Inc. | 136 | 2,120 | ||||||
Home Loan Servicing Solutions Ltd. | 722 | 17,046 | ||||||
HomeTrust Bancshares, Inc. * | 218 | 3,521 | ||||||
Horizon Bancorp | 84 | 1,824 | ||||||
IBERIABANK Corp. | 312 | 18,230 | ||||||
Independent Bank Corp. | 171 | 6,135 | ||||||
Independent Bank Group, Inc. | 55 | 2,075 | ||||||
International Bancshares Corp. | 48,357 | 1,104,957 | ||||||
Investors Bancorp, Inc. | 564 | 13,372 | ||||||
Kearny Financial Corp. * | 167 | 1,754 | ||||||
Lakeland Financial Corp. | 158 | 5,623 | ||||||
LCNB Corp. | 79 | 1,592 | ||||||
MainSource Financial Group, Inc. | 122 | 1,979 | ||||||
MB Financial, Inc. | 25,463 | 756,251 | ||||||
Merchants Bancshares, Inc. | 58 | 1,739 | ||||||
Meridian Interstate Bancorp, Inc. * | 92 | 2,184 | ||||||
Meta Financial Group, Inc. | 84 | 3,126 | ||||||
Metro Bancorp, Inc. * | 247 | 5,271 | ||||||
MetroCorp Bancshares, Inc. | 173 | 2,479 | ||||||
MGIC Investment Corp. * | 3,588 | 29,206 | ||||||
Middleburg Financial Corp. | 90 | 1,649 | ||||||
MidSouth Bancorp, Inc. | 214 | 3,249 | ||||||
MidWestOne Financial Group, Inc. | 70 | 1,849 | ||||||
NASB Financial, Inc. * | 66 | 1,700 | ||||||
National Bank Holdings Corp., Class A | 284 | 5,964 | ||||||
National Bankshares, Inc. | 94 | 3,304 | ||||||
National Penn Bancshares, Inc. | 48,417 | 502,084 | ||||||
NBT Bancorp, Inc. | 552 | 13,452 | ||||||
NewBridge Bancorp * | 271 | 2,022 | ||||||
Northfield Bancorp, Inc. | 145 | 1,875 | ||||||
Northrim BanCorp, Inc. | 74 | 1,857 | ||||||
Northwest Bancshares, Inc. | 74,298 | 1,039,429 | ||||||
OceanFirst Financial Corp. | 300 | 5,277 | ||||||
OFG Bancorp | 167 | 2,473 | ||||||
Old National Bancorp | 1,439 | 20,923 | ||||||
OmniAmerican Bancorp, Inc. * | 193 | 4,231 | ||||||
Oritani Financial Corp. | 482 | 7,818 | ||||||
Pacific Continental Corp. | 150 | 2,067 | ||||||
PacWest Bancorp | 280 | 10,654 | ||||||
Palmetto Bancshares, Inc. * | 123 | 1,651 | ||||||
Park National Corp. | 92 | 7,288 | ||||||
Park Sterling Corp. | 898 | 5,846 | ||||||
Peapack-Gladstone Financial Corp. | 101 | 1,852 | ||||||
Penns Woods Bancorp, Inc. | 41 | 2,099 | ||||||
PennyMac Financial Services, Inc., Class A * | 80 | 1,288 | ||||||
Peoples Bancorp, Inc. | 147 | 3,296 | ||||||
Pinnacle Financial Partners, Inc. * | 421 | 13,051 | ||||||
Preferred Bank * | 104 | 1,999 | ||||||
PrivateBancorp, Inc. | 713 | 17,369 | ||||||
Prosperity Bancshares, Inc. | 630 | 39,343 | ||||||
Provident Financial Holdings, Inc. | 250 | 3,790 | ||||||
Provident Financial Services, Inc. | 615 | 11,525 | ||||||
Radian Group, Inc. | 2,133 | 31,078 | ||||||
Renasant Corp. | 277 | 7,944 | ||||||
Republic Bancorp, Inc., Class A | 75 | 1,727 | ||||||
S&T Bancorp, Inc. | 199 | 4,879 | ||||||
S.Y. Bancorp, Inc. | 68 | 2,041 | ||||||
Sandy Spring Bancorp, Inc. | 230 | 5,633 | ||||||
Sierra Bancorp | 117 | 2,215 | ||||||
Simmons First National Corp., Class A | 206 | 6,744 | ||||||
Southside Bancshares, Inc. | 221 | 6,033 | ||||||
Southwest Bancorp, Inc. * | 261 | 4,179 | ||||||
State Bank Financial Corp. | 630 | 10,748 | ||||||
StellarOne Corp. | 200 | 4,656 | ||||||
Sterling Bancorp * | 324 | 4,779 | ||||||
Sterling Financial Corp. | 536 | 15,523 | ||||||
Suffolk Bancorp * | 99 | 1,935 | ||||||
Sun Bancorp, Inc. * | 541 | 1,785 | ||||||
Susquehanna Bancshares, Inc. | 2,136 | 25,173 | ||||||
Territorial Bancorp, Inc. | 73 | 1,592 | ||||||
Texas Capital Bancshares, Inc. * | 529 | 27,534 | ||||||
The Bancorp, Inc. * | 650 | 10,510 | ||||||
The First of Long Island Corp. | 51 | 2,007 | ||||||
Tompkins Financial Corp. | 38 | 1,874 | ||||||
TowneBank | 116 | 1,689 | ||||||
TriCo Bancshares | 237 | 5,994 | ||||||
Tristate Capital Holdings, Inc. * | 128 | 1,601 | ||||||
TrustCo Bank Corp. | 1,765 | 11,861 | ||||||
Trustmark Corp. | 679 | 18,442 | ||||||
UMB Financial Corp. | 369 | 21,741 | ||||||
Umpqua Holdings Corp. | 1,390 | 22,754 | ||||||
United Bankshares, Inc. | 674 | 19,937 | ||||||
United Community Banks, Inc. * | 106 | 1,653 | ||||||
United Financial Bancorp, Inc. | 375 | 5,880 | ||||||
Univest Corp. of Pennsylvania | 90 | 1,797 | ||||||
VantageSouth Bancshares, Inc. * | 383 | 1,873 | ||||||
ViewPoint Financial Group, Inc. | 684 | 14,918 | ||||||
Washington Banking Co. | 245 | 4,167 | ||||||
Washington Trust Bancorp, Inc. | 60 | 1,973 | ||||||
Waterstone Financial, Inc. * | 174 | 1,851 | ||||||
Webster Financial Corp. | 45,763 | 1,276,330 | ||||||
WesBanco, Inc. | 200 | 5,880 | ||||||
West Bancorp, Inc. | 141 | 1,949 | ||||||
Westamerica Bancorp | 6,897 | 355,058 | ||||||
Western Alliance Bancorp * | 957 | 20,241 | ||||||
Westfield Financial, Inc. | 414 | 2,985 | ||||||
Wilshire Bancorp, Inc. | 1,173 | 9,935 | ||||||
Wintrust Financial Corp. | 271 | 11,791 | ||||||
WSFS Financial Corp. | 32 | 2,240 | ||||||
13,592,566 |
See financial notes 13
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 8.7% | ||||||||
AAON, Inc. | 318 | 8,589 | ||||||
AAR Corp. | 367 | 10,746 | ||||||
Accuride Corp. * | 750 | 3,375 | ||||||
Aceto Corp. | 475 | 7,576 | ||||||
Actuant Corp., Class A | 10,467 | 393,140 | ||||||
Acuity Brands, Inc. | 6,965 | 700,052 | ||||||
Aegion Corp. * | 602 | 12,341 | ||||||
Aerovironment, Inc. * | 425 | 11,522 | ||||||
Aircastle Ltd. | 931 | 17,568 | ||||||
Alamo Group, Inc. | 42 | 1,982 | ||||||
Albany International Corp., Class A | 36,239 | 1,333,958 | ||||||
Altra Holdings, Inc. | 222 | 6,742 | ||||||
Ameresco, Inc., Class A * | 500 | 5,230 | ||||||
American Science & Engineering, Inc. | 132 | 8,683 | ||||||
Ampco-Pittsburgh Corp. | 197 | 3,627 | ||||||
Apogee Enterprises, Inc. | 320 | 10,010 | ||||||
Applied Industrial Technologies, Inc. | 5,708 | 270,045 | ||||||
Argan, Inc. | 351 | 7,810 | ||||||
Astec Industries, Inc. | 123 | 4,159 | ||||||
Astronics Corp. * | 197 | 9,665 | ||||||
Astronics Corp., Class B * | 39 | 1,883 | ||||||
AZZ, Inc. | 190 | 8,531 | ||||||
B/E Aerospace, Inc. * | 5,290 | 429,336 | ||||||
Barnes Group, Inc. | 8,254 | 293,347 | ||||||
Beacon Roofing Supply, Inc. * | 500 | 17,355 | ||||||
Blount International, Inc. * | 317 | 3,861 | ||||||
Brady Corp., Class A | 485 | 14,157 | ||||||
Briggs & Stratton Corp. | 380 | 6,969 | ||||||
Capstone Turbine Corp. * | 5,700 | 7,239 | ||||||
Chart Industries, Inc. * | 8,343 | 896,622 | ||||||
Chicago Bridge & Iron Co., N.V. | 5,140 | 380,823 | ||||||
CIRCOR International, Inc. | 136 | 10,033 | ||||||
CLARCOR, Inc. | 430 | 25,146 | ||||||
Comfort Systems USA, Inc. | 363 | 6,763 | ||||||
Cubic Corp. | 17,530 | 920,325 | ||||||
Curtiss-Wright Corp. | 560 | 27,877 | ||||||
DigitalGlobe, Inc. * | 633 | 20,142 | ||||||
Douglas Dynamics, Inc. | 430 | 6,523 | ||||||
DXP Enterprises, Inc. * | 129 | 11,855 | ||||||
Dycom Industries, Inc. * | �� | 360 | 10,674 | |||||
Dynamic Materials Corp. | 194 | 4,287 | ||||||
Edgen Group, Inc. * | 407 | 4,872 | ||||||
EMCOR Group, Inc. | 760 | 28,166 | ||||||
Encore Wire Corp. | 156 | 7,727 | ||||||
EnerSys, Inc. | 534 | 35,431 | ||||||
Engility Holdings, Inc. * | 45 | 1,394 | ||||||
Enphase Energy, Inc. * | 247 | 1,865 | ||||||
EnPro Industries, Inc. * | 253 | 15,096 | ||||||
ESCO Technologies, Inc. | 25,304 | 912,968 | ||||||
Esterline Technologies Corp. * | 346 | 27,735 | ||||||
Federal Signal Corp. * | 998 | 13,663 | ||||||
Foster Wheeler AG * | 9,891 | 266,958 | ||||||
Franklin Electric Co., Inc. | 24,813 | 939,172 | ||||||
FuelCell Energy, Inc. * | 4,100 | 5,494 | ||||||
Furmanite Corp. * | 517 | 5,816 | ||||||
GATX Corp. | 22,300 | 1,149,565 | ||||||
GenCorp, Inc. * | 786 | 13,205 | ||||||
Generac Holdings, Inc. | 616 | 30,400 | ||||||
General Cable Corp. | 378 | 12,448 | ||||||
Gibraltar Industries, Inc. * | 269 | 4,307 | ||||||
Global Power Equipment Group, Inc. | 165 | 3,359 | ||||||
GrafTech International Ltd. * | 532 | 4,735 | ||||||
Graham Corp. | 175 | 6,442 | ||||||
Granite Construction, Inc. | 406 | 13,134 | ||||||
Great Lakes Dredge & Dock Corp. | 907 | 7,365 | ||||||
Griffon Corp. | 404 | 5,062 | ||||||
H&E Equipment Services, Inc. * | 411 | 10,287 | ||||||
HEICO Corp. | 735 | 39,381 | ||||||
Hexcel Corp. * | 13,580 | 574,570 | ||||||
Houston Wire & Cable Co. | 288 | 3,995 | ||||||
Hurco Cos., Inc. | 62 | 1,518 | ||||||
Hyster-Yale Materials Handling, Inc. | 88 | 6,903 | ||||||
II-VI, Inc. * | 798 | 13,614 | ||||||
Innovative Solutions & Support, Inc. | 247 | 1,946 | ||||||
John Bean Technologies Corp. | 331 | 8,997 | ||||||
Kadant, Inc. | 176 | 6,301 | ||||||
Kaman Corp. | 176 | 6,544 | ||||||
Kratos Defense & Security Solutions, Inc. * | 818 | 6,937 | ||||||
L.B. Foster Co., Class A | 39 | 1,823 | ||||||
Layne Christensen Co. * | 350 | 6,769 | ||||||
Lennox International, Inc. | 3,310 | 258,379 | ||||||
Lindsay Corp. | 135 | 10,261 | ||||||
LSI Industries, Inc. | 220 | 2,026 | ||||||
Lydall, Inc. * | 323 | 5,885 | ||||||
MasTec, Inc. * | 637 | 20,365 | ||||||
Meritor, Inc. * | 629 | 4,321 | ||||||
Miller Industries, Inc. | 263 | 4,929 | ||||||
Moog, Inc., Class A * | 513 | 30,641 | ||||||
Mueller Industries, Inc. | 28,446 | 1,715,009 | ||||||
Mueller Water Products, Inc., Class A | 1,519 | 13,018 | ||||||
MYR Group, Inc. * | 305 | 8,067 | ||||||
National Presto Industries, Inc. | 23 | 1,623 | ||||||
NCI Building Systems, Inc. * | 471 | 6,797 | ||||||
Nortek, Inc. * | 45 | 3,158 | ||||||
Northwest Pipe Co. * | 60 | 2,162 | ||||||
Omega Flex, Inc. | 119 | 2,420 | ||||||
Orbital Sciences Corp. * | 602 | 13,888 | ||||||
PGT, Inc. * | 204 | 2,132 | ||||||
Pike Electric Corp. | 141 | 1,524 | ||||||
PMFG, Inc. * | 210 | 1,646 | ||||||
Polypore International, Inc. * | 13,753 | 621,636 | ||||||
Powell Industries, Inc. * | 43 | 2,702 | ||||||
Preformed Line Products Co. | 25 | 2,100 | ||||||
Primoris Services Corp. | 575 | 14,973 | ||||||
Proto Labs, Inc. * | 5,493 | 460,643 | ||||||
Quanex Building Products Corp. | 687 | 12,215 | ||||||
Raven Industries, Inc. | 12,253 | 408,760 | ||||||
RBC Bearings, Inc. * | 163 | 11,213 | ||||||
Rexnord Corp. * | 277 | 6,515 | ||||||
Rush Enterprises, Inc., Class A * | 275 | 7,870 | ||||||
Simpson Manufacturing Co., Inc. | 565 | 20,029 | ||||||
Sparton Corp. * | 100 | 2,639 | ||||||
Standex International Corp. | 110 | 6,766 | ||||||
Sterling Construction Co., Inc. * | 183 | 1,757 | ||||||
Sun Hydraulics Corp. | 156 | 6,190 | ||||||
TAL International Group, Inc. * | 233 | 11,256 | ||||||
Taser International, Inc. * | 811 | 14,411 | ||||||
Teledyne Technologies, Inc. * | 379 | 33,663 | ||||||
Tennant Co. | 211 | 12,806 | ||||||
Textainer Group Holdings Ltd. | 148 | 5,609 | ||||||
The Gorman-Rupp Co. | 143 | 5,826 |
14 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Greenbrier Cos., Inc. * | 274 | 7,272 | ||||||
The Middleby Corp. * | 214 | 48,717 | ||||||
Thermon Group Holdings, Inc. * | 245 | 5,760 | ||||||
Titan International, Inc. | 760 | 11,020 | ||||||
Titan Machinery, Inc. * | 100 | 1,764 | ||||||
Trex Co., Inc. * | 174 | 12,218 | ||||||
TriMas Corp. * | 10,799 | 408,850 | ||||||
Triumph Group, Inc. | 6,540 | 468,591 | ||||||
Tutor Perini Corp. * | 625 | 14,344 | ||||||
Twin Disc, Inc. | 175 | 4,527 | ||||||
United Rentals, Inc. * | 6,230 | 402,396 | ||||||
Universal Forest Products, Inc. | 133 | 7,038 | ||||||
USG Corp. * | 864 | 23,596 | ||||||
Vicor Corp. * | 299 | 2,634 | ||||||
Wabash National Corp. * | 1,094 | 12,756 | ||||||
Watsco, Inc. | 3,252 | 309,883 | ||||||
Watts Water Technologies, Inc., Class A | 325 | 18,778 | ||||||
Westport Innovations, Inc. * | 30,739 | 720,215 | ||||||
Woodward, Inc. | 729 | 29,226 | ||||||
Xerium Technologies, Inc. * | 350 | 4,196 | ||||||
16,428,143 | ||||||||
Commercial & Professional Supplies 5.1% | ||||||||
ABM Industries, Inc. | 513 | 14,113 | ||||||
Acacia Research Corp. | 55,833 | 842,520 | ||||||
ACCO Brands Corp. * | 113,982 | 666,795 | ||||||
Acorn Energy, Inc. | 192 | 722 | ||||||
Barrett Business Services, Inc. | 154 | 12,824 | ||||||
Casella Waste Systems, Inc., Class A * | 875 | 5,171 | ||||||
CBIZ, Inc. * | 487 | 3,974 | ||||||
CDI Corp. | 118 | 1,894 | ||||||
CECO Environmental Corp. | 237 | 4,183 | ||||||
Compx International, Inc. | 132 | 1,873 | ||||||
Consolidated Graphics, Inc. * | 89 | 5,704 | ||||||
Courier Corp. | 120 | 2,039 | ||||||
CRA International, Inc. * | 91 | 1,734 | ||||||
Deluxe Corp. | 586 | 27,595 | ||||||
EnerNOC, Inc. * | 560 | 9,313 | ||||||
Ennis, Inc. | 287 | 5,094 | ||||||
Exponent, Inc. | 89 | 6,729 | ||||||
FTI Consulting, Inc. * | 419 | 17,003 | ||||||
G&K Services, Inc., Class A | 25,443 | 1,587,643 | ||||||
GP Strategies Corp. * | 298 | 8,350 | ||||||
Healthcare Services Group, Inc. | 719 | 19,693 | ||||||
Heidrick & Struggles International, Inc. | 102 | 1,889 | ||||||
Heritage-Crystal Clean, Inc. * | 114 | 2,014 | ||||||
Herman Miller, Inc. | 593 | 17,992 | ||||||
HNI Corp. | 475 | 18,454 | ||||||
Huron Consulting Group, Inc. * | 307 | 17,981 | ||||||
ICF International, Inc. * | 382 | 13,225 | ||||||
InnerWorkings, Inc. * | 698 | 6,680 | ||||||
Insperity, Inc. | 333 | 12,877 | ||||||
Interface, Inc. | 681 | 13,790 | ||||||
Intersections, Inc. | 341 | 2,922 | ||||||
Kelly Services, Inc., Class A | 381 | 7,948 | ||||||
Kforce, Inc. | 571 | 11,243 | ||||||
Kimball International, Inc., Class B | 165 | 1,930 | ||||||
Knoll, Inc. | 699 | 11,478 | ||||||
Korn/Ferry International * | 566 | 13,471 | ||||||
McGrath RentCorp | 152 | 5,422 | ||||||
Mine Safety Appliances Co. | 375 | 18,060 | ||||||
Mistras Group, Inc. * | 196 | 3,599 | ||||||
MiX Telematics Ltd. ADR * | 28,810 | 375,682 | ||||||
Mobile Mini, Inc. * | 296 | 10,692 | ||||||
Multi-Color Corp. | 58 | 2,020 | ||||||
National Technical Systems, Inc. * | 180 | 4,120 | ||||||
Navigant Consulting, Inc. * | 878 | 15,233 | ||||||
NL Industries, Inc. | 152 | 1,772 | ||||||
On Assignment, Inc. * | 14,865 | 502,288 | ||||||
Pendrell Corp. * | 1,575 | 3,512 | ||||||
Quad Graphics, Inc. | 332 | 11,593 | ||||||
Resources Connection, Inc. | 434 | 5,538 | ||||||
Standard Parking Corp. * | 36,980 | 978,861 | ||||||
Steelcase, Inc., Class A | 743 | 12,178 | ||||||
Team, Inc. * | 331 | 12,343 | ||||||
Tetra Tech, Inc. * | 816 | 21,322 | ||||||
The Advisory Board Co. * | 19,810 | 1,358,966 | ||||||
The Brink’s Co. | 692 | 21,729 | ||||||
The Corporate Executive Board Co. | 15,985 | 1,165,306 | ||||||
TRC Cos., Inc. * | 251 | 1,930 | ||||||
TrueBlue, Inc. * | 239 | 5,903 | ||||||
UniFirst Corp. | 132 | 13,572 | ||||||
United Stationers, Inc. | 36,032 | 1,601,262 | ||||||
US Ecology, Inc. | 45 | 1,600 | ||||||
Viad Corp. | 380 | 10,146 | ||||||
VSE Corp. | 41 | 1,796 | ||||||
WageWorks, Inc. * | 143 | 7,323 | ||||||
9,572,628 | ||||||||
Consumer Durables & Apparel 3.6% | ||||||||
Arctic Cat, Inc. | 8,099 | 424,388 | ||||||
Bassett Furniture Industries, Inc. | 108 | 1,512 | ||||||
Beazer Homes USA, Inc. * | 98 | 1,781 | ||||||
Black Diamond, Inc. * | 183 | 2,728 | ||||||
Blyth, Inc. | 300 | 4,143 | ||||||
Brunswick Corp. | 1,054 | 47,567 | ||||||
Callaway Golf Co. | 1,416 | 11,937 | ||||||
Cavco Industries, Inc. * | 34 | 1,991 | ||||||
Columbia Sportswear Co. | 228 | 15,246 | ||||||
Costa, Inc. * | 102 | 2,052 | ||||||
Crocs, Inc. * | 945 | 11,510 | ||||||
CSS Industries, Inc. | 196 | 5,074 | ||||||
Culp, Inc. | 98 | 1,896 | ||||||
Eastman Kodak Co. * | 15,140 | 393,640 | ||||||
Ethan Allen Interiors, Inc. | 459 | 12,228 | ||||||
Fifth & Pacific Cos., Inc. * | 1,271 | 33,669 | ||||||
Flexsteel Industries, Inc. | 70 | 1,922 | ||||||
G-III Apparel Group Ltd. * | 61 | 3,460 | ||||||
Harman International Industries, Inc. | 10,945 | 886,764 | ||||||
Helen of Troy Ltd. * | 29,843 | 1,394,265 | ||||||
Hooker Furniture Corp. | 107 | 1,691 | ||||||
Hovnanian Enterprises, Inc., Class A * | 808 | 4,088 | ||||||
Iconix Brand Group, Inc. * | 762 | 27,501 | ||||||
iRobot Corp. * | 262 | 8,874 | ||||||
JAKKS Pacific, Inc. | 714 | 4,598 | ||||||
Johnson Outdoors, Inc., Class A | 67 | 1,838 | ||||||
KB Home | 991 | 16,817 | ||||||
La-Z-Boy, Inc. | 318 | 7,339 | ||||||
LeapFrog Enterprises, Inc. * | 1,107 | 9,476 |
See financial notes 15
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Lifetime Brands, Inc. | 127 | 1,989 | ||||||
M.D.C. Holdings, Inc. | 372 | 10,859 | ||||||
M/I Homes, Inc. * | 27,188 | 556,538 | ||||||
Marine Products Corp. | 229 | 2,146 | ||||||
Meritage Homes Corp. * | 482 | 21,878 | ||||||
Movado Group, Inc. | 234 | 10,911 | ||||||
NACCO Industries, Inc., Class A | 44 | 2,507 | ||||||
Nautilus, Inc. * | 206 | 1,640 | ||||||
Oxford Industries, Inc. | 210 | 15,072 | ||||||
Perry Ellis International, Inc. | 300 | 5,703 | ||||||
Quiksilver, Inc. * | 96,151 | 799,976 | ||||||
R. G. Barry Corp. | 108 | 2,061 | ||||||
Skechers U.S.A., Inc., Class A * | 433 | 12,618 | ||||||
Skullcandy, Inc. * | 650 | 4,082 | ||||||
Smith & Wesson Holding Corp. * | 945 | 10,187 | ||||||
Standard Pacific Corp. * | 1,287 | 10,206 | ||||||
Steven Madden Ltd. * | 709 | 26,006 | ||||||
Sturm, Ruger & Co., Inc. | 143 | 9,354 | ||||||
The Jones Group, Inc. | 796 | 12,370 | ||||||
The Ryland Group, Inc. | 543 | 21,829 | ||||||
Tri Pointe Homes, Inc. * | 56,300 | 896,296 | ||||||
Tumi Holdings, Inc. * | 19,350 | 413,122 | ||||||
UCP, Inc., Class A * | 22,970 | 323,877 | ||||||
Vera Bradley, Inc. * | 351 | 7,775 | ||||||
William Lyon Homes, Class A * | 7,700 | 178,409 | ||||||
Wolverine World Wide, Inc. | 530 | 30,602 | ||||||
Zagg, Inc. * | 972 | 4,607 | ||||||
6,732,615 | ||||||||
Consumer Services 4.3% | ||||||||
AFC Enterprises, Inc. * | 295 | 13,151 | ||||||
American Public Education, Inc. * | 186 | 7,446 | ||||||
Arcos Dorados Holdings, Inc. | 55,690 | 670,508 | ||||||
Ascent Capital Group, Inc., Class A * | 89 | 7,513 | ||||||
Biglari Holdings, Inc. * | 13 | 5,668 | ||||||
BJ’s Restaurants, Inc. * | 371 | 10,039 | ||||||
Bloomin’ Brands, Inc. * | 399 | 9,987 | ||||||
Bob Evans Farms, Inc. | 356 | 20,324 | ||||||
Boyd Gaming Corp. * | 838 | 8,849 | ||||||
Bravo Brio Restaurant Group, Inc. * | 350 | 5,225 | ||||||
Bridgepoint Education, Inc. * | 169 | 3,312 | ||||||
Buffalo Wild Wings, Inc. * | 215 | 30,655 | ||||||
Caesars Entertainment Corp. * | 385 | 6,707 | ||||||
Capella Education Co. * | 123 | 7,493 | ||||||
CEC Entertainment, Inc. | 29,332 | 1,359,538 | ||||||
Choice Hotels International, Inc. | 6,350 | 295,846 | ||||||
Churchill Downs, Inc. | 120 | 10,309 | ||||||
Chuy’s Holdings, Inc. * | 43 | 1,617 | ||||||
Corinthian Colleges, Inc. * | 1,452 | 3,107 | ||||||
Cracker Barrel Old Country Store, Inc. | 211 | 23,183 | ||||||
Denny’s Corp. * | 1,027 | 6,521 | ||||||
DineEquity, Inc. | 126 | 10,341 | ||||||
Diversified Restaurant Holdings, Inc. * | 206 | 1,423 | ||||||
Education Management Corp. * | 158 | 2,417 | ||||||
Einstein Noah Restaurant Group, Inc. | 121 | 2,159 | ||||||
Fiesta Restaurant Group, Inc. * | 203 | 8,605 | ||||||
Grand Canyon Education, Inc. * | 23,794 | 1,124,742 | ||||||
Hillenbrand, Inc. | 654 | 18,456 | ||||||
Ignite Restaurant Group, Inc. * | 89 | 1,429 | ||||||
International Speedway Corp., Class A | 319 | 10,434 | ||||||
Interval Leisure Group, Inc. | 313 | 7,597 | ||||||
ITT Educational Services, Inc. * | 110 | 4,413 | ||||||
Jack in the Box, Inc. * | 473 | 19,242 | ||||||
Jamba, Inc. * | 114 | 1,302 | ||||||
JTH Holding, Inc., Class A * | 105 | 2,074 | ||||||
K12, Inc. * | 436 | 7,970 | ||||||
Krispy Kreme Doughnuts, Inc. * | 736 | 17,855 | ||||||
Life Time Fitness, Inc. * | 423 | 19,213 | ||||||
LifeLock, Inc. * | 34,712 | 558,516 | ||||||
Lincoln Educational Services Corp. | 751 | 3,590 | ||||||
Luby’s, Inc. * | 205 | 1,570 | ||||||
Mac-Gray Corp. | 119 | 2,509 | ||||||
Marriott Vacations Worldwide Corp. * | 253 | 12,670 | ||||||
Matthews International Corp., Class A | 26,810 | 1,088,486 | ||||||
Multimedia Games Holding Co., Inc. * | 310 | 10,078 | ||||||
Nathan’s Famous, Inc. * | 33 | 1,694 | ||||||
Orient-Express Hotels Ltd., Class A * | 1,121 | 14,921 | ||||||
Outerwall, Inc. * | 264 | 17,155 | ||||||
Papa John’s International, Inc. | 216 | 16,345 | ||||||
Pinnacle Entertainment, Inc. * | 535 | 12,519 | ||||||
Red Robin Gourmet Burgers, Inc. * | 15,320 | 1,167,078 | ||||||
Regis Corp. | 569 | 8,250 | ||||||
Ruby Tuesday, Inc. * | 766 | 4,542 | ||||||
Ruth’s Hospitality Group, Inc. | 600 | 7,314 | ||||||
Scientific Games Corp., Class A * | 564 | 10,310 | ||||||
SHFL Entertainment, Inc. * | 798 | 18,498 | ||||||
Sonic Corp. * | 749 | 14,456 | ||||||
Sotheby’s | 812 | 42,143 | ||||||
Speedway Motorsports, Inc. | 96 | 1,753 | ||||||
Steiner Leisure Ltd. * | 92 | 5,154 | ||||||
Stewart Enterprises, Inc., Class A | 1,203 | 15,892 | ||||||
Strayer Education, Inc. | 108 | 4,269 | ||||||
Texas Roadhouse, Inc. | 41,437 | 1,136,203 | ||||||
The Cheesecake Factory, Inc. | 604 | 28,539 | ||||||
The Marcus Corp. | 350 | 5,026 | ||||||
Universal Technical Institute, Inc. | 400 | 5,316 | ||||||
Vail Resorts, Inc. | 346 | 24,376 | ||||||
8,005,842 | ||||||||
Diversified Financials 5.0% | ||||||||
American Capital Ltd. * | 120,740 | 1,691,567 | ||||||
Apollo Investment Corp. | 2,835 | 24,183 | ||||||
Arlington Asset Investment Corp., Class A | 280 | 6,908 | ||||||
BGC Partners, Inc., Class A | 949 | 5,049 | ||||||
BlackRock Kelso Capital Corp. | 209 | 1,963 | ||||||
Calamos Asset Management, Inc., Class A | 525 | 5,156 | ||||||
California First National Bancorp | 102 | 1,821 | ||||||
Capital Southwest Corp. | 48 | 1,578 | ||||||
Cash America International, Inc. | 385 | 15,188 | ||||||
Cohen & Steers, Inc. | 135 | 5,179 | ||||||
Credit Acceptance Corp. * | 80 | 9,464 | ||||||
DFC Global Corp. * | 729 | 8,821 | ||||||
Diamond Hill Investment Group | 21 | 2,316 | ||||||
Encore Capital Group, Inc. * | 184 | 8,988 | ||||||
Evercore Partners, Inc., Class A | 390 | 19,683 | ||||||
Ezcorp, Inc., Class A * | 574 | 9,029 | ||||||
FBR & Co. * | 184 | 4,876 | ||||||
Fidus Investment Corp. | 94 | 1,909 | ||||||
Fifth Street Finance Corp. | 1,407 | 14,351 |
16 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Financial Engines, Inc. | 590 | 32,963 | ||||||
First Cash Financial Services, Inc. * | 19,450 | 1,176,530 | ||||||
FXCM, Inc., Class A | 648 | 10,621 | ||||||
GAMCO Investors, Inc., Class A | 30 | 2,145 | ||||||
Garrison Capital, Inc. | 113 | 1,664 | ||||||
GFI Group, Inc. | 943 | 3,272 | ||||||
Gladstone Capital Corp. | 406 | 3,581 | ||||||
Gladstone Investment Corp. | 600 | 4,242 | ||||||
Golub Capital BDC, Inc. | 96 | 1,690 | ||||||
Green Dot Corp., Class A * | 498 | 10,687 | ||||||
Greenhill & Co., Inc. | 13,135 | 673,825 | ||||||
GSV Capital Corp. * | 375 | 5,734 | ||||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 148 | 1,813 | ||||||
Hercules Technology Growth Capital, Inc. | 939 | 14,498 | ||||||
HFF, Inc., Class A | 301 | 7,390 | ||||||
Horizon Technology Finance Corp. | 310 | 4,179 | ||||||
ICG Group, Inc. * | 74,327 | 1,212,273 | ||||||
INTL FCStone, Inc. * | 177 | 3,621 | ||||||
Investment Technology Group, Inc. * | 120 | 1,922 | ||||||
Janus Capital Group, Inc. | 1,002 | 9,890 | ||||||
JMP Group, Inc. | 247 | 1,583 | ||||||
KCAP Financial, Inc. | 580 | 4,889 | ||||||
KCG Holdings, Inc., Class A * | 700 | 6,118 | ||||||
Main Street Capital Corp. | 246 | 7,478 | ||||||
Manning & Napier, Inc. | 300 | 4,980 | ||||||
MarketAxess Holdings, Inc. | 468 | 30,528 | ||||||
Marlin Business Services Corp. | 80 | 2,206 | ||||||
MCG Capital Corp. | 1,300 | 6,123 | ||||||
Medallion Financial Corp. | 375 | 5,693 | ||||||
Medley Capital Corp. | 614 | 8,559 | ||||||
MVC Capital, Inc. | 450 | 6,223 | ||||||
Nelnet, Inc., Class A | 172 | 7,332 | ||||||
New Mountain Finance Corp. | 97 | 1,375 | ||||||
NewStar Financial, Inc. * | 128 | 2,228 | ||||||
Nicholas Financial, Inc. | 110 | 1,766 | ||||||
PennantPark Floating Rate Capital Ltd. | 118 | 1,568 | ||||||
PennantPark Investment Corp. | 634 | 7,139 | ||||||
PHH Corp. * | 497 | 11,953 | ||||||
PICO Holdings, Inc. * | 53,789 | 1,262,966 | ||||||
Piper Jaffray Cos., Inc. * | 312 | 11,198 | ||||||
Portfolio Recovery Associates, Inc. * | 19,468 | 1,157,373 | ||||||
Prospect Capital Corp. | 2,462 | 27,919 | ||||||
Regional Management Corp. * | 66 | 2,113 | ||||||
Resource America, Inc., Class A | 210 | 1,812 | ||||||
Safeguard Scientifics, Inc. * | 33,382 | 582,516 | ||||||
Solar Capital Ltd. | 5,012 | 115,025 | ||||||
Solar Senior Capital Ltd. | 275 | 5,016 | ||||||
Stellus Capital Investment Corp. | 109 | 1,618 | ||||||
Stifel Financial Corp. * | 26,845 | 1,099,303 | ||||||
TCP Capital Corp. | 350 | 5,834 | ||||||
The First Marblehead Corp. * | 3,945 | 3,787 | ||||||
THL Credit, Inc. | 100 | 1,625 | ||||||
TICC Capital Corp. | 100 | 1,000 | ||||||
Triangle Capital Corp. | 472 | 14,047 | ||||||
Virtus Investment Partners, Inc. * | 53 | 10,787 | ||||||
Walter Investment Management Corp. * | 369 | 13,937 | ||||||
WhiteHorse Finance, Inc. | 111 | 1,711 | ||||||
WisdomTree Investments, Inc. * | 617 | 8,576 | ||||||
World Acceptance Corp. * | 106 | 11,037 | ||||||
9,477,510 | ||||||||
Energy 7.7% | ||||||||
Adams Resources & Energy, Inc. | 80 | 4,142 | ||||||
Alon USA Energy, Inc. | 425 | 5,134 | ||||||
Alpha Natural Resources, Inc. * | 1,374 | 9,618 | ||||||
Amyris, Inc. * | 611 | 1,540 | ||||||
Apco Oil & Gas International, Inc. * | 55 | 837 | ||||||
Approach Resources, Inc. * | 54,680 | 1,539,242 | ||||||
Arch Coal, Inc. | 2,625 | 11,130 | ||||||
Basic Energy Services, Inc. * | 520 | 7,628 | ||||||
Bellatrix Exploration Ltd. * | 254,700 | 1,902,609 | ||||||
Berry Petroleum Co., Class A | 500 | 23,875 | ||||||
Bill Barrett Corp. * | 503 | 13,918 | ||||||
Bolt Technology Corp. | 101 | 1,807 | ||||||
Bonanza Creek Energy, Inc. * | 279 | 14,101 | ||||||
BPZ Resources, Inc. * | 1,313 | 2,639 | ||||||
Bristow Group, Inc. | 445 | 35,809 | ||||||
C&J Energy Services, Inc. * | 525 | 12,096 | ||||||
Cal Dive International, Inc. * | 845 | 1,665 | ||||||
Callon Petroleum Co. * | 775 | 5,293 | ||||||
CARBO Ceramics, Inc. | 192 | 24,065 | ||||||
Carrizo Oil & Gas, Inc. * | 32,012 | 1,403,406 | ||||||
Clayton Williams Energy, Inc. * | 52 | 4,047 | ||||||
Clean Energy Fuels Corp. * | 957 | 10,900 | ||||||
Cloud Peak Energy, Inc. * | 915 | 14,283 | ||||||
Comstock Resources, Inc. | 678 | 11,601 | ||||||
Contango Oil & Gas Co. | 98 | 4,199 | ||||||
Crosstex Energy, Inc. | 679 | 20,839 | ||||||
Delek US Holdings, Inc. | 226 | 5,774 | ||||||
Diamondback Energy, Inc. * | 14,288 | 737,975 | ||||||
Emerald Oil, Inc. * | 249 | 2,166 | ||||||
Endeavour International Corp. * | 900 | 5,346 | ||||||
Energy XXI (Bermuda) Ltd. | 915 | 26,590 | ||||||
EPL Oil & Gas, Inc. * | 389 | 12,401 | ||||||
Era Group, Inc. * | 23,193 | 732,899 | ||||||
Evolution Petroleum Corp. * | 368 | 4,438 | ||||||
EXCO Resources, Inc. | 744 | 4,025 | ||||||
Exterran Holdings, Inc. * | 688 | 19,642 | ||||||
Forest Oil Corp. * | 1,042 | 4,939 | ||||||
Forum Energy Technologies, Inc. * | 320 | 9,363 | ||||||
Frontline Ltd. * | 849 | 1,800 | ||||||
FX Energy, Inc. * | 1,211 | 4,214 | ||||||
Gastar Exploration Ltd. * | 637 | 2,752 | ||||||
Geospace Technologies Corp. * | 127 | 12,372 | ||||||
Global Geophysical Services, Inc. * | 365 | 872 | ||||||
Goodrich Petroleum Corp. * | 399 | 9,333 | ||||||
Green Plains Renewable Energy, Inc. | 321 | 5,178 | ||||||
Gulf Island Fabrication, Inc. | 137 | 3,455 | ||||||
GulfMark Offshore, Inc., Class A | 323 | 16,079 | ||||||
Halcon Resources Corp. * | 32,275 | 167,185 | ||||||
Hallador Energy Co. | 205 | 1,579 | ||||||
Helix Energy Solutions Group, Inc. * | 1,159 | 27,422 | ||||||
Hercules Offshore, Inc. * | 1,421 | 9,663 | ||||||
Hornbeck Offshore Services, Inc. * | 476 | 26,309 | ||||||
ION Geophysical Corp. * | 1,487 | 6,900 | ||||||
Isramco, Inc. * | 19 | 2,507 | ||||||
Key Energy Services, Inc. * | 1,733 | 13,552 | ||||||
KiOR, Inc., Class A * | 377 | 878 | ||||||
Knightsbridge Tankers Ltd. | 271 | 2,233 |
See financial notes 17
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Kodiak Oil & Gas Corp. * | 3,097 | 40,168 | ||||||
L&L Energy, Inc. * | 470 | 667 | ||||||
Magnum Hunter Resources Corp. * | 1,297 | 9,248 | ||||||
Matador Resources Co. * | 399 | 7,346 | ||||||
Matrix Service Co. * | 288 | 5,988 | ||||||
Midstates Petroleum Co., Inc. * | 288 | 1,624 | ||||||
Miller Energy Resources, Inc. * | 401 | 2,711 | ||||||
Mitcham Industries, Inc. * | 316 | 5,258 | ||||||
Natural Gas Services Group, Inc. * | 230 | 6,438 | ||||||
Newpark Resources, Inc. * | 1,132 | 14,433 | ||||||
Nordic American Tankers Ltd. | 851 | 6,944 | ||||||
Northern Oil & Gas, Inc. * | 674 | 11,074 | ||||||
Nuverra Environmental Solutions, Inc. * | 1,174 | 2,865 | ||||||
Panhandle Oil & Gas, Inc., Class A | 56 | 1,880 | ||||||
Parker Drilling Co. * | 1,022 | 7,358 | ||||||
PDC Energy, Inc. * | 405 | 27,463 | ||||||
Penn Virginia Corp. * | 104,673 | 890,767 | ||||||
PetroQuest Energy, Inc. * | 764 | 3,606 | ||||||
PHI, Inc. - Non Voting Shares * | 154 | 6,132 | ||||||
Pioneer Energy Services Corp. * | 762 | 6,401 | ||||||
Precision Drilling Corp. | 58,512 | 619,642 | ||||||
Quicksilver Resources, Inc. * | 828 | 1,772 | ||||||
Renewable Energy Group, Inc. * | 128 | 1,397 | ||||||
Rentech, Inc. | 2,658 | 4,545 | ||||||
Resolute Energy Corp. * | 676 | 6,341 | ||||||
Rex Energy Corp. * | 550 | 11,825 | ||||||
RigNet, Inc. * | 67 | 2,470 | ||||||
Rosetta Resources, Inc. * | 594 | 35,604 | ||||||
Sanchez Energy Corp. * | 366 | 10,435 | ||||||
Scorpio Tankers, Inc. | 135,806 | 1,567,201 | ||||||
SEACOR Holdings, Inc. | 19,605 | 1,917,369 | ||||||
SemGroup Corp., Class A | 525 | 31,705 | ||||||
Ship Finance International Ltd. | 846 | 14,001 | ||||||
Solazyme, Inc. * | 249 | 2,605 | ||||||
Stone Energy Corp. * | 422 | 14,711 | ||||||
Swift Energy Co. * | 615 | 8,438 | ||||||
Synergy Resources Corp. * | 226 | 2,341 | ||||||
T.G.C. Industries, Inc. | 575 | 4,238 | ||||||
Targa Resources Corp. | 315 | 24,431 | ||||||
Teekay Tankers Ltd., Class A | 1,281 | 3,343 | ||||||
Tesco Corp. * | 617 | 10,600 | ||||||
TETRA Technologies, Inc. * | 1,052 | 13,644 | ||||||
Triangle Petroleum Corp. * | 1,061 | 11,215 | ||||||
Unit Corp. * | 40,861 | 2,100,664 | ||||||
Uranium Energy Corp. * | 1,212 | 2,133 | ||||||
VAALCO Energy, Inc. * | 727 | 3,831 | ||||||
W&T Offshore, Inc. | 463 | 8,839 | ||||||
Warren Resources, Inc. * | 1,494 | 4,676 | ||||||
Western Refining, Inc. | 553 | 17,845 | ||||||
Westmoreland Coal Co. * | 151 | 2,146 | ||||||
Willbros Group, Inc. * | 458 | 4,470 | ||||||
14,489,112 | ||||||||
Food & Staples Retailing 1.6% | ||||||||
Arden Group, Inc., Class A | 15 | 1,950 | ||||||
Casey’s General Stores, Inc. | 14,430 | 1,051,659 | ||||||
Harris Teeter Supermarkets, Inc. | 626 | 30,874 | ||||||
Ingles Markets, Inc., Class A | 68 | 1,755 | ||||||
Nash Finch Co. | 140 | 3,928 | ||||||
Natural Grocers by Vitamin Cottage, Inc. * | 79 | 3,152 | ||||||
PriceSmart, Inc. | 184 | 20,937 | ||||||
Rite Aid Corp. * | 6,692 | 35,668 | ||||||
Spartan Stores, Inc. | 274 | 6,447 | ||||||
SUPERVALU, Inc. * | 1,788 | 12,570 | ||||||
Susser Holdings Corp. * | 215 | 11,791 | ||||||
The Andersons, Inc. | 205 | 15,207 | ||||||
The Chefs’ Warehouse, Inc. * | 99 | 2,372 | ||||||
The Fresh Market, Inc. * | 7,180 | 365,534 | ||||||
The Pantry, Inc. * | 475 | 6,360 | ||||||
United Natural Foods, Inc. * | 20,052 | 1,432,716 | ||||||
Village Super Market, Inc., Class A | 150 | 5,499 | ||||||
Weis Markets, Inc. | 99 | 5,066 | ||||||
3,013,485 | ||||||||
Food, Beverage & Tobacco 2.4% | ||||||||
Alico, Inc. | 40 | 1,598 | ||||||
Annie’s, Inc. * | 138 | 6,520 | ||||||
B&G Foods, Inc. | 714 | 24,169 | ||||||
Boulder Brands, Inc. * | 689 | 11,293 | ||||||
Cal-Maine Foods, Inc. | 152 | 7,711 | ||||||
Calavo Growers, Inc. | 64 | 1,900 | ||||||
Chiquita Brands International, Inc. * | 516 | 5,341 | ||||||
Coca-Cola Bottling Co. Consolidated | 28 | 1,773 | ||||||
Cott Corp. | 51,600 | 423,120 | ||||||
Craft Brew Alliance, Inc. * | 211 | 3,422 | ||||||
Darling International, Inc. * | 1,400 | 32,578 | ||||||
Diamond Foods, Inc. * | 16,554 | 404,083 | ||||||
Farmer Brothers Co. * | 120 | 2,167 | ||||||
Fresh Del Monte Produce, Inc. | 372 | 9,891 | ||||||
Griffin Land & Nurseries, Inc. | 62 | 2,046 | ||||||
Inventure Foods, Inc. * | 208 | 2,342 | ||||||
J&J Snack Foods Corp. | 97 | 8,300 | ||||||
John B. Sanfilippo & Son, Inc. | 86 | 2,114 | ||||||
Lancaster Colony Corp. | 202 | 16,764 | ||||||
Lifeway Foods, Inc. | 98 | 1,434 | ||||||
Limoneira Co. | 88 | 2,318 | ||||||
National Beverage Corp. | 228 | 4,175 | ||||||
Pilgrim’s Pride Corp. * | 845 | 11,974 | ||||||
Post Holdings, Inc. * | 12,150 | 521,842 | ||||||
Sanderson Farms, Inc. | 15,393 | 972,992 | ||||||
Seaboard Corp. | 2 | 5,460 | ||||||
Seneca Foods Corp., Class A * | 55 | 1,613 | ||||||
Snyders-Lance, Inc. | 528 | 15,835 | ||||||
The Boston Beer Co., Inc., Class A * | 102 | 23,418 | ||||||
The Hain Celestial Group, Inc. * | 5,272 | 438,789 | ||||||
Tootsie Roll Industries, Inc. (e) | 25,579 | 818,528 | ||||||
TreeHouse Foods, Inc. * | 10,647 | 779,999 | ||||||
Universal Corp. | 260 | 13,788 | ||||||
Vector Group Ltd. | 478 | 7,729 | ||||||
4,587,026 | ||||||||
Health Care Equipment & Services 8.1% | ||||||||
Abaxis, Inc. | 283 | 10,112 | ||||||
ABIOMED, Inc. * | 14,827 | 355,551 | ||||||
Acadia Healthcare Co., Inc. * | 11,858 | 514,163 | ||||||
Accretive Health, Inc. * | 781 | 6,451 | ||||||
Accuray, Inc. * | 991 | 6,689 | ||||||
Air Methods Corp. | 408 | 17,838 |
18 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Align Technology, Inc. * | 768 | 43,822 | ||||||
Alliance HealthCare Services, Inc. * | 105 | 2,647 | ||||||
Allscripts Healthcare Solutions, Inc. * | 48,600 | 672,138 | ||||||
Almost Family, Inc. | 220 | 4,231 | ||||||
Amedisys, Inc. * | 616 | 10,028 | ||||||
AMN Healthcare Services, Inc. * | 256 | 3,174 | ||||||
AmSurg Corp. * | 32,366 | 1,388,178 | ||||||
Analogic Corp. | 11,869 | 1,094,678 | ||||||
AngioDynamics, Inc. * | 540 | 8,489 | ||||||
Anika Therapeutics, Inc. * | 101 | 3,017 | ||||||
Antares Pharma, Inc. * | 750 | 3,000 | ||||||
ArthroCare Corp. * | 284 | 10,633 | ||||||
athenahealth, Inc. * | 6,306 | 841,914 | ||||||
AtriCure, Inc. * | 446 | 6,177 | ||||||
Atrion Corp. | 18 | 4,809 | ||||||
Bio-Reference Laboratories, Inc. * | 408 | 13,223 | ||||||
Biolase, Inc. * | 60,550 | 113,228 | ||||||
BioScrip, Inc. * | 34,571 | 242,343 | ||||||
Cantel Medical Corp. | 294 | 10,319 | ||||||
Capital Senior Living Corp. * | 175 | 3,881 | ||||||
Cardiovascular Systems, Inc. * | 81 | 2,458 | ||||||
Centene Corp. * | 7,930 | 445,349 | ||||||
Cerus Corp. * | 389 | 2,455 | ||||||
Chemed Corp. | 213 | 14,446 | ||||||
Chindex International, Inc. * | 105 | 1,767 | ||||||
Computer Programs & Systems, Inc. | 209 | 11,921 | ||||||
CONMED Corp. | 284 | 10,301 | ||||||
CorVel Corp. * | 15,058 | 626,413 | ||||||
Cross Country Healthcare, Inc. * | 331 | 1,966 | ||||||
CryoLife, Inc. | 266 | 2,391 | ||||||
Cutera, Inc. * | 190 | 1,910 | ||||||
Cyberonics, Inc. * | 319 | 18,425 | ||||||
Cynosure, Inc., Class A * | 56 | 1,210 | ||||||
Derma Sciences, Inc. * | 127 | 1,469 | ||||||
DexCom, Inc. * | 59,877 | 1,720,266 | ||||||
Emeritus Corp. * | 16,818 | 322,233 | ||||||
Endologix, Inc. * | 22,528 | 407,081 | ||||||
Exactech, Inc. * | 178 | 4,041 | ||||||
ExamWorks Group, Inc. * | 297 | 7,677 | ||||||
Five Star Quality Care, Inc. * | 326 | 1,653 | ||||||
Gentiva Health Services, Inc. * | 550 | 6,297 | ||||||
Globus Medical, Inc., Class A * | 261 | 5,011 | ||||||
Greatbatch, Inc. * | 288 | 10,979 | ||||||
Greenway Medical Technologies * | 143 | 2,910 | ||||||
Haemonetics Corp. * | 3,593 | 145,732 | ||||||
Hanger, Inc. * | 430 | 15,781 | ||||||
HealthSouth Corp. | 7,451 | 261,605 | ||||||
HealthStream, Inc. * | 236 | 8,430 | ||||||
Healthways, Inc. * | 26,878 | 258,835 | ||||||
HeartWare International, Inc. * | 144 | 10,449 | ||||||
HMS Holdings Corp. * | 51,041 | 1,078,496 | ||||||
ICU Medical, Inc. * | 15,242 | 941,956 | ||||||
Insulet Corp. * | 10,893 | 425,045 | ||||||
Integra LifeSciences Holdings Corp. * | 303 | 13,871 | ||||||
Invacare Corp. | 92 | 1,975 | ||||||
IPC The Hospitalist Co., Inc. * | 160 | 8,766 | ||||||
Kindred Healthcare, Inc. | 501 | 6,954 | ||||||
Landauer, Inc. | 74 | 3,582 | ||||||
LHC Group, Inc. * | 240 | 4,944 | ||||||
Magellan Health Services, Inc. * | 249 | 14,616 | ||||||
MAKO Surgical Corp. * | 650 | 19,376 | ||||||
Masimo Corp. | 717 | 18,370 | ||||||
MedAssets, Inc. * | 683 | 15,729 | ||||||
Medical Action Industries, Inc. * | 227 | 1,376 | ||||||
Medidata Solutions, Inc. * | 315 | 34,748 | ||||||
MEDNAX, Inc. * | 4,020 | 438,260 | ||||||
Merge Healthcare, Inc. * | 1,173 | 2,979 | ||||||
Meridian Bioscience, Inc. | 185 | 4,573 | ||||||
Merit Medical Systems, Inc. * | 791 | 12,648 | ||||||
Molina Healthcare, Inc. * | 175 | 5,537 | ||||||
MWI Veterinary Supply, Inc. * | 129 | 20,465 | ||||||
National Healthcare Corp. | 93 | 4,499 | ||||||
National Research Corp., Class A * | 104 | 1,824 | ||||||
Natus Medical, Inc. * | 500 | 9,865 | ||||||
Neogen Corp. * | 258 | 11,925 | ||||||
NuVasive, Inc. * | 555 | 17,638 | ||||||
NxStage Medical, Inc. * | 20,868 | 276,918 | ||||||
Omnicell, Inc. * | 424 | 9,782 | ||||||
OraSure Technologies, Inc. * | 921 | 6,005 | ||||||
Orthofix International N.V. * | 107 | 2,192 | ||||||
Owens & Minor, Inc. | 518 | 19,384 | ||||||
PharMerica Corp. * | 487 | 7,188 | ||||||
Quality Systems, Inc. | 584 | 13,327 | ||||||
Quidel Corp. * | 77 | 1,902 | ||||||
Rochester Medical Corp. * | 118 | 2,358 | ||||||
Rockwell Medical, Inc. * | 418 | 4,815 | ||||||
Select Medical Holdings Corp. | 656 | 5,563 | ||||||
Skilled Healthcare Group, Inc., Class A * | 239 | 1,018 | ||||||
Spectranetics Corp. * | 680 | 14,205 | ||||||
STAAR Surgical Co. * | 395 | 5,230 | ||||||
STERIS Corp. | 17,888 | 808,359 | ||||||
SurModics, Inc. * | 218 | 5,140 | ||||||
Symmetry Medical, Inc. * | 235 | 1,904 | ||||||
Team Health Holdings, Inc. * | 663 | 28,801 | ||||||
TearLab Corp. * | 32,176 | 335,596 | ||||||
The Ensign Group, Inc. | 165 | 7,026 | ||||||
The Providence Service Corp. * | 220 | 6,576 | ||||||
Thoratec Corp. * | 10,909 | 471,160 | ||||||
Tornier N.V. * | 101 | 2,173 | ||||||
Triple-S Management Corp., Class B * | 424 | 7,551 | ||||||
Unilife Corp. * | 81,385 | 246,597 | ||||||
Universal American Corp. | 375 | 2,783 | ||||||
USMD Holdings, Inc. * | 44 | 1,225 | ||||||
Utah Medical Products, Inc. | 34 | 1,892 | ||||||
Vascular Solutions, Inc. * | 325 | 6,376 | ||||||
Vocera Communications, Inc. * | 111 | 1,868 | ||||||
Volcano Corp. * | 804 | 15,413 | ||||||
WellCare Health Plans, Inc. * | 451 | 30,073 | ||||||
West Pharmaceutical Services, Inc. | 610 | 29,493 | ||||||
Wright Medical Group, Inc. * | 480 | 13,042 | ||||||
15,235,146 | ||||||||
Household & Personal Products 0.0% | ||||||||
Central Garden & Pet Co., Class A * | 440 | 3,238 | ||||||
Elizabeth Arden, Inc. * | 249 | 9,011 | ||||||
Inter Parfums, Inc. | 107 | 3,762 | ||||||
Medifast, Inc. * | 250 | 5,828 | ||||||
Nature’s Sunshine Products, Inc. | 105 | 1,983 | ||||||
Nutraceutical International Corp. | 84 | 2,020 | ||||||
Oil-Dri Corp. of America | 61 | 2,165 | ||||||
Orchids Paper Products Co. | 165 | 5,033 | ||||||
Prestige Brands Holdings, Inc. * | 576 | 17,988 |
See financial notes 19
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Spectrum Brands Holdings, Inc. | 227 | 14,964 | ||||||
Star Scientific, Inc. * | 1,181 | 2,138 | ||||||
Synutra International, Inc. * | 329 | 2,247 | ||||||
USANA Health Sciences, Inc. * | 63 | 4,298 | ||||||
WD-40 Co. | 99 | 7,177 | ||||||
81,852 | ||||||||
Insurance 2.2% | ||||||||
Ambac Financial Group, Inc. * | 250 | 5,048 | ||||||
American Equity Investment Life Holding Co. | 841 | 17,526 | ||||||
AMERISAFE, Inc. | 15,581 | 599,869 | ||||||
AmTrust Financial Services, Inc. | 366 | 14,040 | ||||||
Argo Group International Holdings Ltd. | 169 | 7,095 | ||||||
Assured Guaranty Ltd. | 27,400 | 561,700 | ||||||
Baldwin & Lyons, Inc., Class B | 70 | 1,913 | ||||||
Citizens, Inc. * | 419 | 3,520 | ||||||
CNO Financial Group, Inc. | 2,510 | 39,106 | ||||||
Donegal Group, Inc., Class A | 120 | 1,902 | ||||||
Eastern Insurance Holdings, Inc. | 90 | 2,200 | ||||||
eHealth, Inc. * | 338 | 14,406 | ||||||
EMC Insurance Group, Inc. | 64 | 2,179 | ||||||
Employers Holdings, Inc. | 433 | 13,020 | ||||||
Enstar Group Ltd. * | 83 | 11,282 | ||||||
FBL Financial Group, Inc., Class A | 152 | 6,800 | ||||||
First American Financial Corp. | 1,039 | 26,869 | ||||||
Fortegra Financial Corp. * | 262 | 1,931 | ||||||
Global Indemnity plc * | 72 | 1,773 | ||||||
Greenlight Capital Re Ltd., Class A * | 251 | 7,728 | ||||||
Hallmark Financial Services, Inc. * | 183 | 1,557 | ||||||
HCI Group, Inc. | 209 | 9,183 | ||||||
Hilltop Holdings, Inc. * | 738 | 12,797 | ||||||
Horace Mann Educators Corp. | 497 | 13,767 | ||||||
Independence Holding Co. | 146 | 2,003 | ||||||
Infinity Property & Casualty Corp. | 74 | 5,075 | ||||||
Investors Title Co. | 24 | 1,875 | ||||||
Kansas City Life Insurance Co. | 45 | 2,066 | ||||||
Maiden Holdings Ltd. | 628 | 6,877 | ||||||
Meadowbrook Insurance Group, Inc. | 979 | 6,501 | ||||||
Montpelier Re Holdings Ltd. | 634 | 17,505 | ||||||
National Interstate Corp. | 57 | 1,489 | ||||||
National Western Life Insurance Co., Class A | 9 | 1,872 | ||||||
OneBeacon Insurance Group Ltd., Class A | 425 | 6,783 | ||||||
Platinum Underwriters Holdings Ltd. | 11,124 | 691,802 | ||||||
Primerica, Inc. | 26,830 | 1,152,348 | ||||||
RLI Corp. | 269 | 25,415 | ||||||
Safety Insurance Group, Inc. | 100 | 5,469 | ||||||
Selective Insurance Group, Inc. | 614 | 16,130 | ||||||
State Auto Financial Corp. | 93 | 1,767 | ||||||
Stewart Information Services Corp. | 370 | 11,588 | ||||||
Symetra Financial Corp. | 602 | 11,275 | ||||||
The Hanover Insurance Group, Inc. | 12,946 | 757,859 | ||||||
The Navigators Group, Inc. * | 89 | 5,005 | ||||||
Tower Group International Ltd. | 499 | 1,811 | ||||||
United Fire Group, Inc. | 216 | 6,847 | ||||||
4,116,573 | ||||||||
Materials 4.1% | ||||||||
A. Schulman, Inc. | 317 | 10,499 | ||||||
A.M. Castle & Co. * | 183 | 2,619 | ||||||
AK Steel Holding Corp. * | 2,009 | 8,840 | ||||||
Allied Nevada Gold Corp. * | 271 | 1,106 | ||||||
AMCOL International Corp. | 426 | 13,666 | ||||||
American Pacific Corp. * | 60 | 2,731 | ||||||
American Vanguard Corp. | 404 | 10,544 | ||||||
AptarGroup, Inc. | 15,800 | 1,013,728 | ||||||
Arabian American Development Co. * | 525 | 4,777 | ||||||
Axiall Corp. | 647 | 25,162 | ||||||
Balchem Corp. | 400 | 22,904 | ||||||
Berry Plastics Group, Inc. * | 369 | 7,410 | ||||||
Calgon Carbon Corp. * | 747 | 14,903 | ||||||
Century Aluminum Co. * | 969 | 8,411 | ||||||
Chase Corp. | 76 | 2,300 | ||||||
Chemtura Corp. * | 913 | 22,368 | ||||||
Clearwater Paper Corp. * | 251 | 13,107 | ||||||
Coeur Mining, Inc. * | 1,259 | 15,372 | ||||||
Commercial Metals Co. | 869 | 15,955 | ||||||
Deltic Timber Corp. | 12,166 | 777,164 | ||||||
Ferro Corp. * | 32,543 | 417,527 | ||||||
Flotek Industries, Inc. * | 561 | 11,994 | ||||||
FutureFuel Corp. | 348 | 6,059 | ||||||
General Moly, Inc. * | 1,289 | 2,114 | ||||||
Globe Specialty Metals, Inc. | 678 | 11,892 | ||||||
Gold Resource Corp. | 374 | 1,941 | ||||||
Graphic Packaging Holding Co. * | 1,752 | 14,717 | ||||||
Greif, Inc., Class A | 10,600 | 566,994 | ||||||
GSE Holding, Inc. * | 354 | 998 | ||||||
H.B. Fuller Co. | 575 | 27,525 | ||||||
Handy & Harman Ltd. * | 99 | 2,286 | ||||||
Hawkins, Inc. | 42 | 1,512 | ||||||
Haynes International, Inc. | 111 | 5,983 | ||||||
Headwaters, Inc. * | 395 | 3,448 | ||||||
Hecla Mining Co. | 2,963 | 9,245 | ||||||
Horsehead Holding Corp. * | 490 | 7,110 | ||||||
Innophos Holdings, Inc. | 339 | 16,991 | ||||||
Innospec, Inc. | 19,359 | 891,676 | ||||||
Intrepid Potash, Inc. | 309 | 4,589 | ||||||
Kaiser Aluminum Corp. | 195 | 13,153 | ||||||
KapStone Paper & Packaging Corp. | 500 | 25,980 | ||||||
KMG Chemicals, Inc. | 78 | 1,558 | ||||||
Koppers Holdings, Inc. | 14,648 | 651,982 | ||||||
Kraton Performance Polymers, Inc. * | 526 | 11,188 | ||||||
Landec Corp. * | 485 | 5,679 | ||||||
Louisiana-Pacific Corp. * | 1,702 | 28,951 | ||||||
LSB Industries, Inc. * | 23,759 | 872,430 | ||||||
Materion Corp. | 153 | 4,561 | ||||||
Minerals Technologies, Inc. | 298 | 16,876 | ||||||
Molycorp, Inc. * | 534 | 2,707 | ||||||
Myers Industries, Inc. | 598 | 10,656 | ||||||
Neenah Paper, Inc. | 178 | 7,323 | ||||||
Noranda Aluminum Holding Corp. | 508 | 1,382 | ||||||
Olin Corp. | 580 | 13,056 | ||||||
OM Group, Inc. * | 319 | 10,846 | ||||||
P.H. Glatfelter Co. | 627 | 16,427 | ||||||
Penford Corp. * | 125 | 1,700 | ||||||
PolyOne Corp. | 1,067 | 32,330 | ||||||
Quaker Chemical Corp. | 100 | 7,591 | ||||||
Resolute Forest Products * | 773 | 12,360 |
20 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
RTI International Metals, Inc. * | 324 | 10,984 | ||||||
Schnitzer Steel Industries, Inc., Class A | 373 | 10,832 | ||||||
Schweitzer-Mauduit International, Inc. | 284 | 17,574 | ||||||
Sensient Technologies Corp. | 14,943 | 778,979 | ||||||
Stepan Co. | 149 | 8,772 | ||||||
Stillwater Mining Co. * | 1,215 | 13,256 | ||||||
SunCoke Energy, Inc. * | 1,032 | 20,640 | ||||||
Texas Industries, Inc. * | 321 | 17,238 | ||||||
Tredegar Corp. | 361 | 10,548 | ||||||
UFP Technologies, Inc. * | 86 | 1,982 | ||||||
United States Lime & Minerals, Inc. * | 34 | 1,889 | ||||||
Universal Stainless & Alloy Products, Inc. * | 115 | 3,717 | ||||||
US Concrete, Inc. * | 109 | 2,382 | ||||||
US Silica Holdings, Inc. | 285 | 9,924 | ||||||
Walter Energy, Inc. | 517 | 8,215 | ||||||
Wausau Paper Corp. | 522 | 6,107 | ||||||
Worthington Industries, Inc. | 573 | 23,229 | ||||||
Zep, Inc. | 47,306 | 940,916 | ||||||
Zoltek Cos., Inc. * | 521 | 8,701 | ||||||
7,642,788 | ||||||||
Media 1.0% | ||||||||
Belo Corp., Class A | 1,015 | 13,936 | ||||||
Carmike Cinemas, Inc. * | 244 | 5,585 | ||||||
Central European Media Enterprises Ltd., Class A * | 775 | 2,379 | ||||||
Crown Media Holdings, Inc., Class A * | 678 | 2,251 | ||||||
Daily Journal Corp. * | 16 | 2,367 | ||||||
Digital Generation, Inc. * | 490 | 6,198 | ||||||
Entercom Communications Corp., Class A * | 610 | 5,350 | ||||||
Entravision Communications Corp., Class A | 301 | 2,029 | ||||||
Global Sources Ltd. * | 270 | 2,022 | ||||||
Gray Television, Inc. * | 475 | 4,014 | ||||||
Harte-Hanks, Inc. | 611 | 4,870 | ||||||
Hemisphere Media Group, Inc. * | 122 | 1,154 | ||||||
Journal Communications, Inc., Class A * | 904 | 7,548 | ||||||
Lin Media LLC, Class A * | 10,340 | 254,054 | ||||||
Live Nation Entertainment, Inc. * | 1,712 | 33,281 | ||||||
Loral Space & Communications, Inc. | 67 | 4,782 | ||||||
MDC Partners, Inc., Class A | 60 | 1,850 | ||||||
Meredith Corp. | 416 | 21,341 | ||||||
Morningstar, Inc. | 10,755 | 863,519 | ||||||
National CineMedia, Inc. | 417 | 7,306 | ||||||
Nexstar Broadcasting Group, Inc., Class A | 390 | 17,312 | ||||||
ReachLocal, Inc. * | 133 | 1,635 | ||||||
Reading International, Inc., Class A * | 278 | 1,840 | ||||||
Rentrak Corp. * | 82 | 3,074 | ||||||
Saga Communications, Inc., Class A | 90 | 4,285 | ||||||
Scholastic Corp. | 454 | 13,025 | ||||||
Sinclair Broadcast Group, Inc., Class A | 18,853 | 604,427 | ||||||
The E.W. Scripps Co., Class A * | 356 | 7,056 | ||||||
The New York Times Co., Class A | 1,084 | 14,992 | ||||||
Valassis Communications, Inc. | 476 | 13,023 | ||||||
World Wrestling Entertainment, Inc., Class A | 170 | 2,202 | ||||||
1,928,707 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 4.8% | ||||||||
ACADIA Pharmaceuticals, Inc. * | 837 | 19,025 | ||||||
AcelRx Pharmaceuticals, Inc. * | 200 | 1,344 | ||||||
Achillion Pharmaceuticals, Inc. * | 1,151 | 2,889 | ||||||
Acorda Therapeutics, Inc. * | 454 | 13,897 | ||||||
Aegerion Pharmaceuticals, Inc. * | 3,410 | 282,416 | ||||||
Affymetrix, Inc. * | 895 | 6,328 | ||||||
Akorn, Inc. * | 28,192 | 576,244 | ||||||
Albany Molecular Research, Inc. * | 150 | 1,965 | ||||||
Alnylam Pharmaceuticals, Inc. * | 661 | 38,080 | ||||||
AMAG Pharmaceuticals, Inc. * | 395 | 10,657 | ||||||
Ampio Pharmaceuticals, Inc. * | 296 | 2,617 | ||||||
Anacor Pharmaceuticals, Inc. * | 306 | 3,981 | ||||||
Arena Pharmaceuticals, Inc. * | 3,046 | 13,372 | ||||||
ArQule, Inc. * | 769 | 1,730 | ||||||
Array BioPharma, Inc. * | 758 | 3,805 | ||||||
Auxilium Pharmaceuticals, Inc. * | 21,998 | 378,586 | ||||||
AVANIR Pharmaceuticals, Inc., Class A * | 1,614 | 6,537 | ||||||
AVEO Pharmaceuticals, Inc. * | 805 | 1,666 | ||||||
BioDelivery Sciences International, Inc. * | 653 | 3,428 | ||||||
Biotime, Inc. * | 427 | 1,550 | ||||||
Bruker Corp. * | 45,063 | 921,538 | ||||||
Cadence Pharmaceuticals, Inc. * | 1,048 | 5,167 | ||||||
Cambrex Corp. * | 360 | 6,055 | ||||||
Celldex Therapeutics, Inc. * | 1,074 | 24,605 | ||||||
Cepheid, Inc. * | 24,842 | 1,011,566 | ||||||
Charles River Laboratories International, Inc. * | 34,400 | 1,692,824 | ||||||
Chelsea Therapeutics International Ltd. * | 790 | 2,236 | ||||||
ChemoCentryx, Inc. * | 121 | 599 | ||||||
Chimerix, Inc. * | 76 | 1,151 | ||||||
Clovis Oncology, Inc. * | 87 | 4,447 | ||||||
Cornerstone Therapeutics, Inc. * | 192 | 1,818 | ||||||
Coronado Biosciences, Inc. * | 709 | 1,184 | ||||||
Curis, Inc. * | 1,600 | 6,384 | ||||||
Cytokinetics, Inc. * | 140 | 841 | ||||||
Dendreon Corp. * | 2,516 | 6,466 | ||||||
DepoMed, Inc. * | 900 | 6,480 | ||||||
Durata Therapeutics, Inc. * | 244 | 2,362 | ||||||
Dyax Corp. * | 518 | 4,258 | ||||||
Dynavax Technologies Corp. * | 2,128 | 2,617 | ||||||
Emergent Biosolutions, Inc. * | 323 | 6,308 | ||||||
Enanta Pharmaceuticals, Inc. * | 93 | 1,856 | ||||||
Endocyte, Inc. * | 330 | 3,442 | ||||||
Enzon Pharmaceuticals, Inc. | 1,693 | 2,506 | ||||||
Epizyme, Inc. * | 62 | 2,376 | ||||||
Exact Sciences Corp. * | 804 | 8,860 | ||||||
Exelixis, Inc. * | 1,072 | 5,285 | ||||||
Fibrocell Science, Inc. * | 274 | 1,014 | ||||||
Fluidigm Corp. * | 308 | 9,702 | ||||||
Furiex Pharmaceuticals, Inc. * | 49 | 1,916 | ||||||
Galena Biopharma, Inc. * | 839 | 1,871 | ||||||
Genomic Health, Inc. * | 321 | 9,604 | ||||||
GTx, Inc. * | 259 | 443 |
See financial notes 21
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Halozyme Therapeutics, Inc. * | 1,180 | 13,747 | ||||||
Harvard Bioscience, Inc. * | 284 | 1,673 | ||||||
Hi-Tech Pharmacal Co., Inc. | 157 | 6,765 | ||||||
Horizon Pharma, Inc. * | 684 | 2,866 | ||||||
Hyperion Therapeutics, Inc. * | 76 | 1,522 | ||||||
ICON plc * | 34,750 | 1,405,290 | ||||||
Idenix Pharmaceuticals, Inc. * | 816 | 2,685 | ||||||
ImmunoGen, Inc. * | 1,054 | 17,349 | ||||||
Immunomedics, Inc. * | 1,236 | 4,684 | ||||||
Impax Laboratories, Inc. * | 470 | 9,522 | ||||||
Infinity Pharmaceuticals, Inc. * | 426 | 5,772 | ||||||
Insmed, Inc. * | 148 | 2,108 | ||||||
Intercept Pharmaceuticals, Inc. * | 43 | 2,332 | ||||||
InterMune, Inc. * | 1,022 | 14,400 | ||||||
Ironwood Pharmaceuticals, Inc. * | 1,036 | 9,956 | ||||||
Isis Pharmaceuticals, Inc. * | 1,187 | 39,492 | ||||||
Jazz Pharmaceuticals plc * | 5,840 | 529,922 | ||||||
KaloBios Pharmaceuticals, Inc. * | 334 | 1,339 | ||||||
Keryx Biopharmaceuticals, Inc. * | 980 | 10,143 | ||||||
KYTHERA Biopharmaceuticals, Inc. * | 64 | 2,861 | ||||||
Lexicon Pharmaceuticals, Inc. * | 596 | 1,430 | ||||||
Ligand Pharmaceuticals, Inc., Class B * | 80 | 4,141 | ||||||
Luminex Corp. * | 628 | 12,246 | ||||||
MannKind Corp. * | 1,746 | 8,538 | ||||||
Merrimack Pharmaceuticals, Inc. * | 281 | 753 | ||||||
MiMedx Group, Inc. * | 226 | 1,198 | ||||||
Momenta Pharmaceuticals, Inc. * | 705 | 11,555 | ||||||
Nanosphere, Inc. * | 501 | 977 | ||||||
Nektar Therapeutics * | 1,261 | 11,992 | ||||||
Neurocrine Biosciences, Inc. * | 1,108 | 10,460 | ||||||
NewLink Genetics Corp. * | 75 | 1,256 | ||||||
Novavax, Inc. * | 845 | 2,620 | ||||||
NPS Pharmaceuticals, Inc. * | 1,172 | 33,730 | ||||||
Omeros Corp. * | 332 | 3,320 | ||||||
OncoGenex Pharmaceutical, Inc. * | 177 | 1,244 | ||||||
Opko Health, Inc. * | 1,609 | 16,122 | ||||||
Orexigen Therapeutics, Inc. * | 283 | 1,381 | ||||||
Osiris Therapeutics, Inc. * | 165 | 2,196 | ||||||
OvaScience, Inc. * | 118 | 1,141 | ||||||
Pacific Biosciences of California, Inc. * | 687 | 2,824 | ||||||
Pacira Pharmaceuticals, Inc. * | 7,285 | 367,965 | ||||||
PAREXEL International Corp. * | 10,506 | 480,229 | ||||||
PDL Biopharma, Inc. | 1,198 | 9,692 | ||||||
Portola Pharmaceuticals, Inc. * | 79 | 1,750 | ||||||
Pozen, Inc. * | 383 | 2,407 | ||||||
Progenics Pharmaceuticals, Inc. * | 448 | 1,631 | ||||||
Prothena Corp. plc * | 144 | 3,462 | ||||||
Puma Biotechnology, Inc. * | 138 | 5,287 | ||||||
Questcor Pharmaceuticals, Inc. | 560 | 34,367 | ||||||
Raptor Pharmaceutical Corp. * | 744 | 10,699 | ||||||
Receptos, Inc. * | 89 | 2,275 | ||||||
Repligen Corp. * | 220 | 2,407 | ||||||
Repros Therapeutics, Inc. * | 264 | 4,763 | ||||||
Rigel Pharmaceuticals, Inc. * | 997 | 3,081 | ||||||
Sagent Pharmaceuticals, Inc. * | 206 | 4,468 | ||||||
Salix Pharmaceuticals Ltd. * | 4,950 | 355,163 | ||||||
Sangamo BioSciences, Inc. * | 538 | 5,041 | ||||||
Santarus, Inc. * | 773 | 18,034 | ||||||
Sarepta Therapeutics, Inc. * | 320 | 12,461 | ||||||
SciClone Pharmaceuticals, Inc. * | 344 | 1,627 | ||||||
Sequenom, Inc. * | 1,119 | 2,148 | ||||||
Spectrum Pharmaceuticals, Inc. | 1,177 | 10,110 | ||||||
Stemline Therapeutics, Inc. * | 66 | 1,837 | ||||||
Sunesis Pharmaceuticals, Inc. * | 329 | 1,648 | ||||||
Supernus Pharmaceuticals, Inc. * | 327 | 2,312 | ||||||
Synageva BioPharma Corp. * | 106 | 5,385 | ||||||
Synergy Pharmaceuticals, Inc. * | 368 | 1,487 | ||||||
Synta Pharmaceuticals Corp. * | 932 | 4,231 | ||||||
Targacept, Inc. * | 850 | 4,038 | ||||||
TESARO, Inc. * | 52 | 2,002 | ||||||
Tetraphase Pharmaceuticals, Inc. * | 213 | 2,669 | ||||||
TG Therapeutics, Inc. * | 269 | 971 | ||||||
The Medicines Co. * | 9,972 | 338,250 | ||||||
Threshold Pharmaceuticals, Inc. * | 1,100 | 4,774 | ||||||
Vanda Pharmaceuticals, Inc. * | 218 | 1,561 | ||||||
Verastem, Inc. * | 132 | 1,320 | ||||||
Vical, Inc. * | 1,240 | 1,550 | ||||||
ViroPharma, Inc. * | 792 | 30,745 | ||||||
VIVUS, Inc. * | 1,499 | 14,076 | ||||||
Xenoport, Inc. * | 356 | 1,862 | ||||||
XOMA Corp. * | 1,300 | 5,863 | ||||||
ZIOPHARM Oncology, Inc. * | 1,259 | 4,457 | ||||||
9,111,555 | ||||||||
Real Estate 4.3% | ||||||||
Acadia Realty Trust | 578 | 15,415 | ||||||
AG Mortgage Investment Trust, Inc. | 79 | 1,291 | ||||||
Agree Realty Corp. | 205 | 6,472 | ||||||
Alexander & Baldwin, Inc. * | 353 | 13,061 | ||||||
Alexander’s, Inc. | 13 | 4,183 | ||||||
Altisource Residential Corp. | 192 | 5,101 | ||||||
American Assets Trust, Inc. | 432 | 14,381 | ||||||
American Capital Mortgage Investment Corp. | 401 | 7,663 | ||||||
American Realty Capital Properties, Inc. | 1,523 | 20,210 | ||||||
Anworth Mortgage Asset Corp. | 1,734 | 8,514 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 505 | 8,136 | ||||||
Apollo Residential Mortgage, Inc. | 306 | 4,608 | ||||||
Ares Commercial Real Estate Corp. | 400 | 4,972 | ||||||
ARMOUR Residential REIT, Inc. | 4,721 | 19,451 | ||||||
Ashford Hospitality Trust | 944 | 12,329 | ||||||
Associated Estates Realty Corp. | 410 | 6,289 | ||||||
AV Homes, Inc. * | 99 | 1,891 | ||||||
Campus Crest Communities, Inc. | 70,415 | 704,854 | ||||||
CapLease, Inc. | 1,009 | 8,577 | ||||||
Capstead Mortgage Corp. | 1,244 | 14,717 | ||||||
Cedar Realty Trust, Inc. | 1,016 | 5,801 | ||||||
Chambers Street Properties | 2,296 | 21,422 | ||||||
Chesapeake Lodging Trust | 354 | 8,344 | ||||||
Colony Financial, Inc. | 53,645 | 1,085,238 | ||||||
Consolidated-Tomoka Land Co. | 43 | 1,613 | ||||||
Coresite Realty Corp. | 342 | 11,094 | ||||||
Cousins Properties, Inc. | 1,239 | 14,038 | ||||||
CubeSmart | 1,521 | 27,789 | ||||||
CYS Investments, Inc. | 2,209 | 18,754 | ||||||
DCT Industrial Trust, Inc. | 2,844 | 22,041 | ||||||
DiamondRock Hospitality Co. | 55,458 | 631,667 | ||||||
DuPont Fabros Technology, Inc. | 773 | 19,209 | ||||||
Dynex Capital, Inc. | 582 | 5,028 |
22 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
EastGroup Properties, Inc. | 304 | 19,353 | ||||||
Education Realty Trust, Inc. | 58,565 | 535,284 | ||||||
EPR Properties | 484 | 24,863 | ||||||
Equity One, Inc. | 613 | 14,779 | ||||||
Excel Trust, Inc. | 688 | 8,311 | ||||||
FelCor Lodging Trust, Inc. * | 1,063 | 7,143 | ||||||
First Industrial Realty Trust, Inc. | 1,384 | 25,009 | ||||||
First Potomac Realty Trust | 864 | 10,619 | ||||||
Forestar Group, Inc. * | 464 | 10,361 | ||||||
Franklin Street Properties Corp. | 1,246 | 16,447 | ||||||
Getty Realty Corp. | 550 | 10,549 | ||||||
Gladstone Commercial Corp. | 236 | 4,460 | ||||||
Glimcher Realty Trust | 1,953 | 20,018 | ||||||
Government Properties Income Trust | 544 | 13,301 | ||||||
Gramercy Property Trust, Inc. * | 1,200 | 5,484 | ||||||
Healthcare Realty Trust, Inc. | 1,087 | 26,099 | ||||||
Hersha Hospitality Trust | 1,259 | 7,139 | ||||||
Highwoods Properties, Inc. | 1,077 | 41,572 | ||||||
Hudson Pacific Properties, Inc. | 611 | 12,642 | ||||||
Inland Real Estate Corp. | 1,250 | 13,363 | ||||||
Invesco Mortgage Capital, Inc. | 1,531 | 23,654 | ||||||
Investors Real Estate Trust | 823 | 7,094 | ||||||
iStar Financial, Inc. * | 1,010 | 12,756 | ||||||
JAVELIN Mortgage Investment Corp. | 342 | 4,060 | ||||||
Kennedy-Wilson Holdings, Inc. | 329 | 6,593 | ||||||
LaSalle Hotel Properties | 60,062 | 1,864,925 | ||||||
Lexington Realty Trust | 1,679 | 19,644 | ||||||
LTC Properties, Inc. | 485 | 19,133 | ||||||
Medical Properties Trust, Inc. | 1,708 | 22,272 | ||||||
Monmouth Real Estate Investment Corp., Class A | 752 | 6,933 | ||||||
National Health Investors, Inc. | 250 | 15,630 | ||||||
New Residential Investment Corp. | 2,023 | 13,372 | ||||||
New York Mortgage Trust, Inc. | 1,050 | 6,741 | ||||||
NorthStar Realty Finance Corp. | 2,445 | 22,812 | ||||||
Parkway Properties, Inc. | 352 | 6,375 | ||||||
Pebblebrook Hotel Trust | 561 | 16,942 | ||||||
Pennsylvania Real Estate Investment Trust | 629 | 11,404 | ||||||
PennyMac Mortgage Investment Trust | 872 | 20,117 | ||||||
Physicians Realty Trust | 23,060 | 289,634 | ||||||
Potlatch Corp. | 420 | 17,149 | ||||||
PS Business Parks, Inc. | 150 | 12,224 | ||||||
RAIT Financial Trust | 1,484 | 11,204 | ||||||
Ramco-Gershenson Properties Trust | 811 | 13,187 | ||||||
Redwood Trust, Inc. | 48,306 | 846,321 | ||||||
Resource Capital Corp. | 1,460 | 8,979 | ||||||
Retail Opportunity Investments Corp. | 927 | 13,720 | ||||||
RLJ Lodging Trust | 1,418 | 35,819 | ||||||
Rouse Properties, Inc. | 488 | 9,867 | ||||||
Ryman Hospitality Properties, Inc. | 602 | 22,220 | ||||||
Sabra Health Care REIT, Inc. | 591 | 15,898 | ||||||
Saul Centers, Inc. | 205 | 9,635 | ||||||
Select Income REIT | 100 | 2,755 | ||||||
Silver Bay Realty Trust Corp. | 373 | 5,767 | ||||||
Sovran Self Storage, Inc. | 372 | 28,454 | ||||||
STAG Industrial, Inc. | 367 | 7,674 | ||||||
Strategic Hotels & Resorts, Inc. * | 1,973 | 17,165 | ||||||
Summit Hotel Properties, Inc. | 103,460 | 950,797 | ||||||
Sun Communities, Inc. | 354 | 15,778 | ||||||
Sunstone Hotel Investors, Inc. | 1,913 | 25,347 | ||||||
Tejon Ranch Co. * | 159 | 5,886 | ||||||
Terreno Realty Corp. | 299 | 5,316 | ||||||
The Geo Group, Inc. | 771 | 27,193 | ||||||
UMH Properties, Inc. | 287 | 2,887 | ||||||
Universal Health Realty Income Trust | 106 | 4,656 | ||||||
Urstadt Biddle Properties, Inc., Class A | 224 | 4,422 | ||||||
Washington Real Estate Investment Trust | 491 | 12,869 | ||||||
Western Asset Mortgage Capital Corp. | 133 | 2,143 | ||||||
Whitestone REIT | 404 | 5,571 | ||||||
Winthrop Realty Trust | 146 | 1,718 | ||||||
8,113,661 | ||||||||
Retailing 5.2% | ||||||||
Aeropostale, Inc. * | 1,044 | 9,699 | ||||||
America’s Car-Mart, Inc. * | 38 | 1,738 | ||||||
ANN, Inc. * | 555 | 19,625 | ||||||
Asbury Automotive Group, Inc. * | 434 | 20,854 | ||||||
Ascena Retail Group, Inc. * | 63,300 | 1,252,707 | ||||||
Barnes & Noble, Inc. * | 342 | 4,833 | ||||||
Bebe Stores, Inc. | 766 | 4,619 | ||||||
Blue Nile, Inc. * | 112 | 4,600 | ||||||
Body Central Corp. * | 174 | 974 | ||||||
Brown Shoe Co., Inc. | 497 | 11,153 | ||||||
Chico’s FAS, Inc. | 52,134 | 894,098 | ||||||
Christopher & Banks Corp. * | 284 | 1,639 | ||||||
Conn’s, Inc. * | 161 | 9,731 | ||||||
Core-Mark Holding Co., Inc. | 105 | 7,427 | ||||||
Destination Maternity Corp. | 197 | 6,154 | ||||||
Express, Inc. * | 813 | 18,870 | ||||||
Five Below, Inc. * | 11,460 | 553,060 | ||||||
Francesca’s Holdings Corp. * | 16,564 | 297,986 | ||||||
Fred’s, Inc., Class A | 62,510 | 1,012,662 | ||||||
Genesco, Inc. * | 257 | 17,504 | ||||||
Gordmans Stores, Inc. | 128 | 1,267 | ||||||
Group 1 Automotive, Inc. | 250 | 16,000 | ||||||
hhgregg, Inc. * | 110 | 1,706 | ||||||
Hibbett Sports, Inc. * | 290 | 16,916 | ||||||
HSN, Inc. | 417 | 21,851 | ||||||
Jos. A. Bank Clothiers, Inc. * | 408 | 19,576 | ||||||
Kirkland’s, Inc. * | 300 | 5,325 | ||||||
Lithia Motors, Inc., Class A | 246 | 15,461 | ||||||
Lumber Liquidators Holdings, Inc. * | 321 | 36,655 | ||||||
Monro Muffler Brake, Inc. | 21,422 | 985,412 | ||||||
Nutrisystem, Inc. | 158 | 2,970 | ||||||
Office Depot, Inc. * | 2,606 | 14,568 | ||||||
OfficeMax, Inc. | 1,012 | 15,160 | ||||||
Orbitz Worldwide, Inc. * | 221 | 2,042 | ||||||
Penske Automotive Group, Inc. | 498 | 19,731 | ||||||
PetMed Express, Inc. | 284 | 4,215 | ||||||
Pier 1 Imports, Inc. | 991 | 20,692 | ||||||
Pool Corp. | 19,076 | 1,037,353 | ||||||
RadioShack Corp. * | 543 | 1,526 | ||||||
Rent-A-Center, Inc. | 485 | 16,606 | ||||||
Restoration Hardware Holdings, Inc. * | 122 | 8,508 | ||||||
Saks, Inc. * | 1,056 | 16,885 | ||||||
Select Comfort Corp. * | 587 | 10,754 | ||||||
Shoe Carnival, Inc. | 70 | 1,819 | ||||||
Shutterfly, Inc. * | 460 | 22,604 | ||||||
Sonic Automotive, Inc., Class A | 10,751 | 239,532 |
See financial notes 23
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Stage Stores, Inc. | 39,686 | 819,516 | ||||||
Stein Mart, Inc. | 616 | 9,098 | ||||||
Systemax, Inc. | 178 | 1,691 | ||||||
The Bon-Ton Stores, Inc. | 370 | 4,237 | ||||||
The Buckle, Inc. | 280 | 13,703 | ||||||
The Cato Corp., Class A | 40,486 | 1,213,365 | ||||||
The Children’s Place Retail Stores, Inc. * | 270 | 14,739 | ||||||
The Finish Line, Inc., Class A | 661 | 16,551 | ||||||
The Men’s Wearhouse, Inc. | 598 | 25,295 | ||||||
The Pep Boys - Manny, Moe & Jack * | 705 | 9,123 | ||||||
Tilly’s, Inc., Class A * | 145 | 2,111 | ||||||
Trans World Entertainment Corp. | 344 | 1,490 | ||||||
Tuesday Morning Corp. * | 543 | 7,683 | ||||||
ValueVision Media, Inc., Class A * | 338 | 1,805 | ||||||
Vitacost.com, Inc. * | 446 | 3,528 | ||||||
Vitamin Shoppe, Inc. * | 384 | 18,013 | ||||||
VOXX International Corp. * | 301 | 4,669 | ||||||
West Marine, Inc. * | 151 | 1,844 | ||||||
Weyco Group, Inc. | 68 | 1,954 | ||||||
Winmark Corp. | 26 | 1,903 | ||||||
Zale Corp. * | 197 | 3,079 | ||||||
Zumiez, Inc. * | 28,117 | 833,388 | ||||||
9,713,852 | ||||||||
Semiconductors & Semiconductor Equipment 1.3% | ||||||||
Advanced Energy Industries, Inc. * | 466 | 9,730 | ||||||
Alpha & Omega Semiconductor Ltd. * | 218 | 1,604 | ||||||
Ambarella, Inc. * | 102 | 2,096 | ||||||
Amkor Technology, Inc. * | 1,019 | 5,411 | ||||||
Applied Micro Circuits Corp. * | 734 | 8,558 | ||||||
ATMI, Inc. * | 546 | 14,928 | ||||||
Brooks Automation, Inc. | 992 | 9,563 | ||||||
Cabot Microelectronics Corp. * | 357 | 14,598 | ||||||
Cavium, Inc. * | 22,417 | 903,629 | ||||||
CEVA, Inc. * | 286 | 4,098 | ||||||
Cirrus Logic, Inc. * | 607 | 13,615 | ||||||
Cypress Semiconductor Corp. * | 1,129 | 10,477 | ||||||
Diodes, Inc. * | 365 | 8,840 | ||||||
DSP Group, Inc. * | 206 | 1,535 | ||||||
Entegris, Inc. * | 1,145 | 11,851 | ||||||
Entropic Communications, Inc. * | 936 | 4,006 | ||||||
FormFactor, Inc. * | 1,000 | 5,220 | ||||||
GSI Technology, Inc. * | 525 | 3,686 | ||||||
GT Advanced Technologies, Inc. * | 983 | 7,373 | ||||||
Hittite Microwave Corp. * | 339 | 21,659 | ||||||
Inphi Corp. * | 480 | 7,075 | ||||||
Integrated Device Technology, Inc. * | 1,097 | 11,672 | ||||||
International Rectifier Corp. * | 777 | 20,233 | ||||||
Intersil Corp., Class A | 1,102 | 12,298 | ||||||
IXYS Corp. | 155 | 1,803 | ||||||
Kopin Corp. * | 1,298 | 4,764 | ||||||
Lattice Semiconductor Corp. * | 1,055 | 5,412 | ||||||
LTX-Credence Corp. * | 900 | 5,517 | ||||||
MaxLinear, Inc., Class A * | 247 | 2,139 | ||||||
Micrel, Inc. | 11,770 | 108,284 | ||||||
Microsemi Corp. * | 11,014 | 276,782 | ||||||
Mindspeed Technologies, Inc. * | 1,088 | 3,144 | ||||||
MKS Instruments, Inc. | 523 | 15,502 | ||||||
Monolithic Power Systems, Inc. | 539 | 17,162 | ||||||
Nanometrics, Inc. * | 425 | 7,897 | ||||||
NVE Corp. * | 36 | 1,921 | ||||||
OmniVision Technologies, Inc. * | 41,699 | 584,203 | ||||||
PDF Solutions, Inc. * | 270 | 6,202 | ||||||
Photronics, Inc. * | 432 | 3,629 | ||||||
PLX Technology, Inc. * | 904 | 5,460 | ||||||
PMC-Sierra, Inc. * | 1,362 | 7,995 | ||||||
Power Integrations, Inc. | 409 | 23,493 | ||||||
Rambus, Inc. * | 947 | 8,277 | ||||||
RF Micro Devices, Inc. * | 2,375 | 12,469 | ||||||
Rubicon Technology, Inc. * | 163 | 1,402 | ||||||
Rudolph Technologies, Inc. * | 600 | 6,360 | ||||||
Semtech Corp. * | 713 | 22,181 | ||||||
Sigma Designs, Inc. * | 800 | 4,352 | ||||||
Silicon Image, Inc. * | 1,158 | 6,080 | ||||||
Spansion, Inc., Class A * | 809 | 9,684 | ||||||
SunEdison, Inc. * | 2,744 | 25,519 | ||||||
SunPower Corp. * | 527 | 15,910 | ||||||
Supertex, Inc. | 69 | 1,760 | ||||||
Synaptics, Inc. * | 343 | 15,949 | ||||||
Tessera Technologies, Inc. | 654 | 12,439 | ||||||
TriQuint Semiconductor, Inc. * | 1,424 | 11,292 | ||||||
Ultratech, Inc. * | 231 | 5,495 | ||||||
Veeco Instruments, Inc. * | 395 | 11,538 | ||||||
2,365,771 | ||||||||
Software & Services 6.7% | ||||||||
Accelrys, Inc. * | 1,102 | 10,304 | ||||||
ACI Worldwide, Inc. * | 341 | 18,796 | ||||||
Actuate Corp. * | 877 | 7,025 | ||||||
Acxiom Corp. * | 606 | 20,137 | ||||||
Advent Software, Inc. | 481 | 16,138 | ||||||
American Software, Inc., Class A | 406 | 3,552 | ||||||
Angie’s List, Inc. * | 432 | 6,087 | ||||||
Aspen Technology, Inc. * | 17,786 | 679,959 | ||||||
AVG Technologies NV * | 46,230 | 929,223 | ||||||
Bankrate, Inc. * | 551 | 9,279 | ||||||
Bazaarvoice, Inc. * | 185 | 1,735 | ||||||
Blackbaud, Inc. | 615 | 22,140 | ||||||
Blucora, Inc. * | 440 | 10,397 | ||||||
Bottomline Technologies, Inc. * | 560 | 17,595 | ||||||
Brightcove, Inc. * | 16,235 | 247,908 | ||||||
BroadSoft, Inc. * | 386 | 12,630 | ||||||
CACI International, Inc., Class A * | 168 | 12,093 | ||||||
Callidus Software, Inc. * | 675 | 6,986 | ||||||
Carbonite, Inc. * | 132 | 1,748 | ||||||
Cardtronics, Inc. * | 17,415 | 683,539 | ||||||
Cass Information Systems, Inc. | 37 | 2,121 | ||||||
CIBER, Inc. * | 1,423 | 4,625 | ||||||
CommVault Systems, Inc. * | 14,901 | 1,163,470 | ||||||
comScore, Inc. * | 464 | 12,398 | ||||||
Comverse, Inc. * | 197 | 6,221 | ||||||
Constant Contact, Inc. * | 187 | 4,845 | �� | |||||
Convergys Corp. | 796 | 15,713 | ||||||
Cornerstone OnDemand, Inc. * | 480 | 22,738 | ||||||
CoStar Group, Inc. * | 325 | 57,522 | ||||||
CSG Systems International, Inc. | 200 | 5,572 | ||||||
Dealertrack Technologies, Inc. * | 360 | 13,428 | ||||||
Demandware, Inc. * | 42 | 2,077 | ||||||
Dice Holdings, Inc. * | 775 | 5,719 | ||||||
Digimarc Corp. | 79 | 1,664 | ||||||
Digital River, Inc. * | 679 | 12,113 |
24 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
EarthLink, Inc. | 768 | 3,886 | ||||||
Ebix, Inc. | 353 | 4,017 | ||||||
eGain Corp. * | 198 | 2,273 | ||||||
Ellie Mae, Inc. * | 167 | 4,826 | ||||||
Envestnet, Inc. * | 355 | 12,886 | ||||||
EPAM Systems, Inc. * | 3,443 | 129,009 | ||||||
EPIQ Systems, Inc. | 706 | 10,562 | ||||||
ePlus, Inc. | 28 | 1,522 | ||||||
Euronet Worldwide, Inc. * | 523 | 22,698 | ||||||
EVERTEC, Inc. | 78 | 1,830 | ||||||
ExlService Holdings, Inc. * | 9,860 | 285,053 | ||||||
Fair Isaac Corp. | 462 | 26,463 | ||||||
FleetMatics Group plc * | 10,840 | 344,170 | ||||||
Forrester Research, Inc. | 27,439 | 1,064,908 | ||||||
Global Cash Access Holdings, Inc. * | 785 | 6,515 | ||||||
Global Eagle Entertainment, Inc. * | 80,360 | 818,065 | ||||||
Guidewire Software, Inc. * | 452 | 22,925 | ||||||
Heartland Payment Systems, Inc. | 425 | 17,191 | ||||||
Higher One Holdings, Inc. * | 570 | 4,531 | ||||||
iGATE Corp. * | 257 | 8,183 | ||||||
Imperva, Inc. * | 90 | 3,451 | ||||||
Infoblox, Inc. * | 12,357 | 549,269 | ||||||
Interactive Intelligence Group, Inc. * | 204 | 12,536 | ||||||
Internap Network Services Corp. * | 8,989 | 65,350 | ||||||
IntraLinks Holdings, Inc. * | 807 | 8,385 | ||||||
j2 Global, Inc. | 490 | 26,940 | ||||||
Jive Software, Inc. * | 97 | 1,056 | ||||||
Liquidity Services, Inc. * | 238 | 6,214 | ||||||
LivePerson, Inc. * | 24,403 | 227,924 | ||||||
LogMeIn, Inc. * | 331 | 10,691 | ||||||
Manhattan Associates, Inc. * | 221 | 23,539 | ||||||
ManTech International Corp., Class A | 165 | 4,610 | ||||||
Marketo, Inc. * | 77 | 2,600 | ||||||
MAXIMUS, Inc. | 23,656 | 1,146,133 | ||||||
Mentor Graphics Corp. | 1,019 | 22,500 | ||||||
MicroStrategy, Inc., Class A * | 122 | 14,883 | ||||||
Millennial Media, Inc. * | 197 | 1,385 | ||||||
Mitek Systems, Inc. * | 320 | 1,693 | ||||||
ModusLink Global Solutions, Inc. * | 891 | 3,671 | ||||||
MoneyGram International, Inc. * | 348 | 7,346 | ||||||
Monotype Imaging Holdings, Inc. | 481 | 13,574 | ||||||
Monster Worldwide, Inc. * | 941 | 4,065 | ||||||
Move, Inc. * | 581 | 9,860 | ||||||
Net Element International, Inc. * | 295 | 1,395 | ||||||
NetScout Systems, Inc. * | 369 | 10,450 | ||||||
NIC, Inc. | 599 | 14,747 | ||||||
NICE Systems Ltd. ADR | 10,250 | 401,595 | ||||||
OpenTable, Inc. * | 7,848 | 545,279 | ||||||
Pegasystems, Inc. | 340 | 12,940 | ||||||
Perficient, Inc. * | 168 | 3,039 | ||||||
Progress Software Corp. * | 541 | 14,044 | ||||||
Proofpoint, Inc. * | 13,361 | 422,742 | ||||||
PROS Holdings, Inc. * | 257 | 9,085 | ||||||
PTC, Inc. * | 1,218 | 33,763 | ||||||
QAD, Inc., Class A | 148 | 2,208 | ||||||
Qlik Technologies, Inc. * | 1,050 | 26,607 | ||||||
Qualys, Inc. * | 152 | 3,162 | ||||||
QuinStreet, Inc. * | 551 | 4,898 | ||||||
RealPage, Inc. * | 505 | 12,388 | ||||||
Reis, Inc. * | 91 | 1,637 | ||||||
Responsys, Inc. * | 433 | 7,075 | ||||||
Rosetta Stone, Inc. * | 128 | 1,943 | ||||||
Sapiens International Corp. N.V. | 293 | 1,890 | ||||||
Sapient Corp. * | 1,309 | 20,695 | ||||||
SciQuest, Inc. * | 370 | 8,081 | ||||||
SeaChange International, Inc. * | 550 | 7,804 | ||||||
ServiceSource International, Inc. * | 546 | 5,908 | ||||||
SPS Commerce, Inc. * | 72 | 4,907 | ||||||
SS&C Technologies Holdings, Inc. * | 511 | 20,082 | ||||||
Stamps.com, Inc. * | 166 | 7,543 | ||||||
Sykes Enterprises, Inc. * | 329 | 6,159 | ||||||
Synchronoss Technologies, Inc. * | 435 | 15,060 | ||||||
Syntel, Inc. | 187 | 16,052 | ||||||
Take-Two Interactive Software, Inc. * | 938 | 16,800 | ||||||
Tangoe, Inc. * | 17,750 | 339,025 | ||||||
TechTarget, Inc. * | 391 | 1,963 | ||||||
TeleNav, Inc. * | 470 | 3,407 | ||||||
TeleTech Holdings, Inc. * | 251 | 6,644 | ||||||
The Active Network, Inc. * | 820 | 11,841 | ||||||
The Hackett Group, Inc. | 327 | 2,328 | ||||||
The Ultimate Software Group, Inc. * | 293 | 45,263 | ||||||
TiVo, Inc. * | 1,233 | 16,387 | ||||||
Travelzoo, Inc. * | 203 | 4,371 | ||||||
Trulia, Inc. * | 169 | 6,755 | ||||||
Tyler Technologies, Inc. * | 7,461 | 721,553 | ||||||
Unisys Corp. * | 582 | 15,336 | ||||||
United Online, Inc. * | 776 | 6,705 | ||||||
ValueClick, Inc. * | 801 | 15,387 | ||||||
VASCO Data Security International, Inc. * | 391 | 2,936 | ||||||
Verint Systems, Inc. * | 17,267 | 630,591 | ||||||
VirnetX Holding Corp. * | 369 | 8,022 | ||||||
Virtusa Corp. * | 27 | 839 | ||||||
VistaPrint N.V. * | 301 | 16,269 | ||||||
Vocus, Inc. * | 319 | 2,759 | ||||||
Vringo, Inc. * | 563 | 1,588 | ||||||
Web.com Group, Inc. * | 624 | 16,817 | ||||||
WebMD Health Corp. * | 387 | 13,630 | ||||||
WEX, Inc. * | 477 | 44,528 | ||||||
XO Group, Inc. * | 322 | 4,469 | ||||||
Xoom Corp. * | 74 | 2,202 | ||||||
Yelp, Inc. * | 356 | 24,119 | ||||||
Zillow, Inc., Class A * | 220 | 17,519 | ||||||
Zix Corp. * | 1,200 | 4,896 | ||||||
12,654,812 | ||||||||
Technology Hardware & Equipment 4.9% | ||||||||
ADTRAN, Inc. | 544 | 12,773 | ||||||
Aeroflex Holding Corp. * | 348 | 2,697 | ||||||
Agilysys, Inc. * | 137 | 1,610 | ||||||
Anaren, Inc. * | 131 | 3,272 | ||||||
Anixter International, Inc. * | 285 | 24,365 | ||||||
ARRIS Group, Inc. * | 1,232 | 22,004 | ||||||
Aruba Networks, Inc. * | 22,389 | 420,018 | ||||||
Aviat Networks, Inc. * | 1,283 | 2,643 | ||||||
Avid Technology, Inc. * | 773 | 5,759 | ||||||
Badger Meter, Inc. | 136 | 7,073 | ||||||
Bel Fuse, Inc., Class B | 120 | 2,525 | ||||||
Belden, Inc. | 37,306 | 2,509,202 | ||||||
Benchmark Electronics, Inc. * | 401 | 9,115 | ||||||
Black Box Corp. | 134 | 3,355 | ||||||
CalAmp Corp. * | 22,041 | 518,625 | ||||||
Calix, Inc. * | 848 | 8,624 |
See financial notes 25
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Checkpoint Systems, Inc. * | 467 | 7,948 | ||||||
Ciena Corp. * | 1,254 | 29,181 | ||||||
Cognex Corp. | 862 | 26,938 | ||||||
Coherent, Inc. | 10,404 | 688,641 | ||||||
Comtech Telecommunications Corp. | 372 | 11,167 | ||||||
Cray, Inc. * | 415 | 9,279 | ||||||
Daktronics, Inc. | 790 | 9,448 | ||||||
Datalink Corp. * | 156 | 1,602 | ||||||
Diebold, Inc. | 31,200 | 934,752 | ||||||
DTS, Inc. * | 346 | 6,920 | ||||||
Electro Rent Corp. | 245 | 4,444 | ||||||
Electro Scientific Industries, Inc. | 263 | 3,151 | ||||||
Electronics for Imaging, Inc. * | 400 | 13,724 | ||||||
Emulex Corp. * | 794 | 5,979 | ||||||
Extreme Networks, Inc. * | 1,418 | 7,600 | ||||||
Fabrinet * | 249 | 4,168 | ||||||
FARO Technologies, Inc. * | 117 | 5,558 | ||||||
FEI Co. | 463 | 41,244 | ||||||
Finisar Corp. * | 1,149 | 26,438 | ||||||
Fusion-io, Inc. * | 445 | 4,784 | ||||||
Globecomm Systems, Inc. * | 349 | 4,896 | ||||||
GSI Group, Inc. * | 370 | 3,693 | ||||||
Harmonic, Inc. * | 788 | 5,760 | ||||||
Hutchinson Technology, Inc. * | 679 | 2,526 | ||||||
Imation Corp. * | 950 | 4,418 | ||||||
Immersion Corp. * | 129 | 1,641 | ||||||
Infinera Corp. * | 962 | 9,822 | ||||||
Insight Enterprises, Inc. * | 288 | 6,068 | ||||||
InterDigital, Inc. | 486 | 18,833 | ||||||
InvenSense, Inc. * | 666 | 11,249 | ||||||
Itron, Inc. * | 317 | 13,526 | ||||||
Ixia * | 24,652 | 349,565 | ||||||
KEMET Corp. * | 1,092 | 6,192 | ||||||
KVH Industries, Inc. * | 129 | 1,772 | ||||||
Littelfuse, Inc. | 273 | 23,213 | ||||||
Maxwell Technologies, Inc. * | 653 | 4,898 | ||||||
Measurement Specialties, Inc. * | 130 | 7,245 | ||||||
Mercury Systems, Inc. * | 600 | 5,532 | ||||||
Mesa Laboratories, Inc. | 31 | 2,159 | ||||||
Methode Electronics, Inc. | 461 | 11,792 | ||||||
MTS Systems Corp. | 8,424 | 550,256 | ||||||
Multi-Fineline Electronix, Inc. * | 162 | 2,172 | ||||||
NETGEAR, Inc. * | 11,996 | 345,005 | ||||||
Newport Corp. * | 655 | 10,395 | ||||||
Numerex Corp., Class A * | 148 | 1,748 | ||||||
Oplink Communications, Inc. * | 255 | 4,654 | ||||||
OSI Systems, Inc. * | 237 | 17,263 | ||||||
Park Electrochemical Corp. | 140 | 3,927 | ||||||
ParkerVision, Inc. * | 408 | 1,118 | ||||||
PC Connection, Inc. | 112 | 2,239 | ||||||
PC-Tel, Inc. | 222 | 2,045 | ||||||
Plantronics, Inc. | 482 | 20,697 | ||||||
Plexus Corp. * | 494 | 18,910 | ||||||
Procera Networks, Inc. * | 410 | 5,802 | ||||||
QLogic Corp. * | 849 | 10,485 | ||||||
Quantum Corp. * | 1,535 | 1,903 | ||||||
RealD, Inc. * | 770 | 5,328 | ||||||
Rofin-Sinar Technologies, Inc. * | 393 | 10,316 | ||||||
Rogers Corp. * | 112 | 6,828 | ||||||
Ruckus Wireless, Inc. * | 22,003 | 319,043 | ||||||
Sanmina Corp. * | 993 | 14,458 | ||||||
ScanSource, Inc. * | 23,406 | 900,195 | ||||||
ShoreTel, Inc. * | 692 | 5,501 | ||||||
Silicon Graphics International Corp. * | 411 | 5,248 | ||||||
Sonus Networks, Inc. * | 1,630 | 4,890 | ||||||
Speed Commerce, Inc. * | 612 | 2,246 | ||||||
Super Micro Computer, Inc. * | 549 | 7,642 | ||||||
Symmetricom, Inc. * | 431 | 3,090 | ||||||
SYNNEX Corp. * | 277 | 16,980 | ||||||
Tech Data Corp. * | 2,591 | 134,887 | ||||||
Tellabs, Inc. | 2,907 | 7,093 | ||||||
TESSCO Technologies, Inc. | 65 | 2,303 | ||||||
TTM Technologies, Inc. * | 856 | 7,490 | ||||||
Ubiquiti Networks, Inc. | 99 | 3,819 | ||||||
Universal Display Corp. * | 554 | 17,673 | ||||||
ViaSat, Inc. * | 418 | 27,638 | ||||||
Vishay Precision Group, Inc. * | 109 | 1,788 | ||||||
Zebra Technologies Corp., Class A * | 16,300 | 787,453 | ||||||
Zygo Corp. * | 108 | 1,668 | ||||||
9,183,622 | ||||||||
Telecommunication Services 0.8% | ||||||||
8x8, Inc. * | 24,522 | 281,022 | ||||||
Atlantic Tele-Network, Inc. | 34 | 1,884 | ||||||
Cincinnati Bell, Inc. * | 1,476 | 4,221 | ||||||
Cogent Communications Group, Inc. | 575 | 20,200 | ||||||
Consolidated Communications Holdings, Inc. | 423 | 7,881 | ||||||
Fairpoint Communications, Inc. * | 420 | 3,923 | ||||||
General Communication, Inc., Class A * | 408 | 3,880 | ||||||
Hawaiian Telcom Holdco, Inc. * | 69 | 1,834 | ||||||
HickoryTech Corp. | 160 | 2,141 | ||||||
IDT Corp., Class B | 265 | 5,801 | ||||||
inContact, Inc. * | 157,140 | 1,192,693 | ||||||
Inteliquent, Inc. | 360 | 4,626 | ||||||
Iridium Communications, Inc. * | 770 | 4,643 | ||||||
Leap Wireless International, Inc. * | 861 | 13,862 | ||||||
Lumos Networks Corp. | 101 | 2,223 | ||||||
NII Holdings, Inc. * | 972 | 3,344 | ||||||
NTELOS Holdings Corp. | 106 | 2,018 | ||||||
Premiere Global Services, Inc. * | 922 | 8,307 | ||||||
Shenandoah Telecommunications Co. | 99 | 2,745 | ||||||
Straight Path Communications, Inc., Class B * | 132 | 721 | ||||||
USA Mobility, Inc. | 257 | 3,834 | ||||||
Vonage Holdings Corp. * | 1,000 | 3,730 | ||||||
1,575,533 | ||||||||
Transportation 1.9% | ||||||||
Air Transport Services Group, Inc. * | 834 | 6,038 | ||||||
Allegiant Travel Co. | 131 | 13,659 | ||||||
Arkansas Best Corp. | 453 | 12,399 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 22,244 | 823,695 | ||||||
Echo Global Logistics, Inc. * | 281 | 5,173 | ||||||
Forward Air Corp. | 462 | 18,702 | ||||||
Hawaiian Holdings, Inc. * | 940 | 7,755 | ||||||
Heartland Express, Inc. | 900 | 12,924 | ||||||
Hub Group, Inc., Class A * | 309 | 11,350 | ||||||
International Shipholding Corp. | 71 | 1,762 | ||||||
JetBlue Airways Corp. * | 2,129 | 15,095 | ||||||
Knight Transportation, Inc. | 249 | 4,226 |
26 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Landstar System, Inc. | 14,237 | 787,164 | ||||||
Matson, Inc. | 243 | 6,583 | ||||||
Pacer International, Inc. * | 762 | 6,081 | ||||||
Park-Ohio Holdings Corp. * | 53 | 2,195 | ||||||
Patriot Transportation Holding, Inc. * | 56 | 2,070 | ||||||
Quality Distribution, Inc. * | 198 | 2,035 | ||||||
Republic Airways Holdings, Inc. * | 835 | 9,836 | ||||||
Roadrunner Transportation Systems, Inc. * | 377 | 9,991 | ||||||
Saia, Inc. * | 142 | 4,619 | ||||||
SkyWest, Inc. | 318 | 4,783 | ||||||
Spirit Airlines, Inc. * | 509 | 21,963 | ||||||
Swift Transportation Co. * | 1,155 | 25,167 | ||||||
Universal Truckload Services, Inc. | 73 | 1,946 | ||||||
US Airways Group, Inc. * | 55,279 | 1,214,480 | ||||||
Uti Worldwide, Inc. | 40,666 | 618,123 | ||||||
Werner Enterprises, Inc. | 439 | 10,167 | ||||||
Wesco Aircraft Holdings, Inc. * | 138 | 2,528 | ||||||
XPO Logistics, Inc. * | 248 | 5,005 | ||||||
3,667,514 | ||||||||
Utilities 2.2% | ||||||||
ALLETE, Inc. | 473 | 23,901 | ||||||
American States Water Co. | 458 | 13,044 | ||||||
Artesian Resources Corp., Class A | 77 | 1,763 | ||||||
Atlantic Power Corp. | 1,045 | 4,692 | ||||||
Atmos Energy Corp. | 18,100 | 801,287 | ||||||
Avista Corp. | 534 | 14,840 | ||||||
Black Hills Corp. | 521 | 26,425 | ||||||
California Water Service Group | 444 | 9,679 | ||||||
Chesapeake Utilities Corp. | 37 | 2,013 | ||||||
Cleco Corp. | 650 | 30,121 | ||||||
Connecticut Water Service, Inc. | 59 | 1,891 | ||||||
Delta Natural Gas Co., Inc. | 78 | 1,741 | ||||||
Dynegy, Inc. * | 908 | 17,642 | ||||||
El Paso Electric Co. | 450 | 15,826 | ||||||
Genie Energy Ltd., Class B * | 176 | 1,818 | ||||||
IDACORP, Inc. | 546 | 28,174 | ||||||
MGE Energy, Inc. | 177 | 9,967 | ||||||
Middlesex Water Co. | 87 | 1,803 | ||||||
New Jersey Resources Corp. | 7,329 | 337,354 | ||||||
Northwest Natural Gas Co. | 21,691 | 942,040 | ||||||
NorthWestern Corp. | 321 | 14,715 | ||||||
NRG Yield, Inc., Class A * | 106 | 3,755 | ||||||
Ormat Technologies, Inc. | 384 | 10,011 | ||||||
Otter Tail Corp. | 409 | 12,200 | ||||||
Piedmont Natural Gas Co., Inc. | 726 | 24,786 | ||||||
PNM Resources, Inc. | 772 | 18,466 | ||||||
Portland General Electric Co. | 1,003 | 28,786 | ||||||
SJW Corp. | 65 | 1,835 | ||||||
South Jersey Industries, Inc. | 425 | 25,309 | ||||||
Southwest Gas Corp. | 511 | 27,727 | ||||||
The Empire District Electric Co. | 430 | 9,671 | ||||||
The Laclede Group, Inc. | 11,278 | 530,855 | ||||||
UIL Holdings Corp. | 680 | 26,194 | ||||||
UNS Energy Corp. | 13,211 | 653,680 | ||||||
WGL Holdings, Inc. | 11,175 | 502,987 | ||||||
York Water Co. | 254 | 5,260 | ||||||
4,182,258 | ||||||||
Total Common Stock | ||||||||
(Cost $139,348,839) | 175,847,188 | |||||||
Other Investment Companies 7.1% of net assets | ||||||||
Equity Funds 3.2% | ||||||||
iShares Russell 2000 ETF | 784 | 85,636 | ||||||
iShares Russell Mid-Cap ETF | 41,700 | 6,003,549 | ||||||
6,089,185 | ||||||||
Money Market Fund 3.9% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (c) | 7,386,309 | 7,386,309 | ||||||
Total Other Investment Companies | ||||||||
(Cost $13,356,726) | 13,475,494 | |||||||
Rights 0.0% of net assets | ||||||||
Banks 0.0% | ||||||||
Peapack-Gladstone Financial Corp. (d)(e)* | 101 | — | ||||||
Consumer Services 0.0% | ||||||||
Caesars Entertainment Corp. (d)(e)* | 385 | — | ||||||
Total Rights | ||||||||
(Cost $—) | — | |||||||
Warrants 0.0% of net assets | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. (d)(e)* | 129 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.2% of net assets | ||||||||
U.S. Treasury Obligations 0.2% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/19/13 (a)(b) | 100,000 | 100,000 | ||||||
0.01%, 12/05/13 (a)(b) | 27,000 | 27,000 | ||||||
0.01%, 12/19/13 (a)(b) | 175,000 | 174,999 |
See financial notes 27
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
0.07%, 12/19/13 (a)(b) | 50,000 | 49,995 | ||||||
Total Short-Term Investments | ||||||||
(Cost $351,994) | 351,994 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $153,768,184 and the unrealized appreciation and depreciation were $40,011,568 and ($4,105,076), respectively, with a net unrealized appreciation of $35,906,492.
* | 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. | |
(c) | The rate shown is the 7-day yield. | |
(d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(e) | Illiquid security. At the period end, the value of these amounted to $818,528 or 0.4% of net assets. |
ADR — | American Depositary Receipt | |
ETF — | Exchange traded fund | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/20/13 | 17 | 1,866,260 | 94,995 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $175,847,188 | $— | $— | $175,847,188 | ||||||||||||
Other Investment Companies1 | 13,475,494 | — | — | 13,475,494 | ||||||||||||
Short-Term Investments1 | — | 351,994 | — | 351,994 | ||||||||||||
Rights1 | — | — | — | — | ||||||||||||
Warrants1 | — | — | — | — | ||||||||||||
Total | $189,322,682 | $351,994 | $— | $189,674,676 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | $94,995 | $— | $— | $94,995 |
1 | As categorized in Portfolio 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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2012 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | ||||||||||||||||||||||||
Common Stock | $1,808 | $— | ($357 | ) | $— | $— | $— | ($1,451 | ) | $— | ||||||||||||||||||||||
Total | $1,808 | $— | ($357 | ) | $— | $— | $— | ($1,451 | ) | $— | ||||||||||||||||||||||
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 transfers out of Level 3 to Level 1 due to the result of fair valued securities for which no quoted value was available. There were no transfers between Level 1 and Level 2 for the period ended October 31, 2013.
28 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $153,057,559) | $189,674,676 | |||||
Cash | 28 | |||||
Receivables: | ||||||
Investments sold | 1,109,104 | |||||
Dividends | 65,388 | |||||
Fund shares sold | 22,070 | |||||
Interest | 4 | |||||
Prepaid expenses | + | 7,321 | ||||
Total assets | 190,878,591 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,044,838 | |||||
Investment adviser and administrator fees | 14,311 | |||||
Shareholder service fees | 1,986 | |||||
Fund shares redeemed | 125,688 | |||||
Variation margin on futures contracts | 14,620 | |||||
Accrued expenses | + | 49,311 | ||||
Total liabilities | 2,250,754 | |||||
Net Assets | ||||||
Total assets | 190,878,591 | |||||
Total liabilities | − | 2,250,754 | ||||
Net assets | $188,627,837 | |||||
Net Assets by Source | ||||||
Capital received from investors | 176,224,718 | |||||
Net investment loss | (1,053,254 | ) | ||||
Net realized capital losses | (23,255,739 | ) | ||||
Net unrealized capital appreciation | 36,712,112 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $75,836,417 | 4,388,344 | $17.28 | |||||||||||
Select Shares | $112,791,420 | 6,424,957 | $17.56 |
See financial notes 29
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $7,686) | $2,036,769 | |||||
Interest | + | 1,250 | ||||
Total investment income | 2,038,019 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,020,472 | |||||
Shareholder service fees: | ||||||
Investor Shares | 170,868 | |||||
Select Shares | 183,799 | |||||
Portfolio accounting fees | 85,228 | |||||
Professional fees | 48,555 | |||||
Transfer agent fees | 47,247 | |||||
Custodian fees | 40,514 | |||||
Shareholder reports | 36,042 | |||||
Registration fees | 32,518 | |||||
Independent trustees’ fees | 8,161 | |||||
Interest expense | 238 | |||||
Other expenses | + | 5,490 | ||||
Total expenses | 2,679,132 | |||||
Expense reduction by CSIM and its affiliates | − | 501,836 | ||||
Custody credits | − | 8 | ||||
Net expenses | − | 2,177,288 | ||||
Net investment loss | (139,269 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 28,209,487 | |||||
Net realized gains on futures contracts | 865,900 | |||||
Net realized gains on foreign currency transactions | + | 162 | ||||
Net realized gains | 29,075,549 | |||||
Net change in unrealized appreciation on investments | 18,123,973 | |||||
Net change in unrealized appreciation on futures contracts | + | 300,357 | ||||
Net change in unrealized appreciation | + | 18,424,330 | ||||
Net realized and unrealized gains | 47,499,879 | |||||
Increase in net assets resulting from operations | $47,360,610 |
30 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment loss | ($139,269 | ) | ($1,094,267 | ) | ||||||
Net realized gains | 29,075,549 | 17,333,546 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 18,424,330 | (10,805,359 | ) | ||||||
Increase in net assets from operations | $47,360,610 | $5,433,920 |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 122,198 | $1,904,239 | 481,008 | $6,525,131 | ||||||||||||||
Select Shares | + | 1,026,670 | 15,859,002 | 1,179,826 | 15,072,446 | |||||||||||||
Total shares sold | 1,148,868 | $17,763,241 | 1,660,834 | $21,597,577 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (669,973 | ) | ($10,039,749 | ) | (745,538 | ) | ($9,511,650 | ) | ||||||||||
Select Shares | + | (1,210,604 | ) | (19,403,597 | ) | (12,619,122 | ) | (146,015,616 | ) | |||||||||
Total shares redeemed | (1,880,577 | ) | ($29,443,346 | ) | (13,364,660 | ) | ($155,527,266 | ) | ||||||||||
Net transactions in fund shares | (731,709 | ) | ($11,680,105 | ) | (11,703,826 | ) | ($133,929,689 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 11,545,010 | $152,947,332 | 23,248,836 | $281,443,101 | ||||||||||||||
Total increase or decrease | + | (731,709 | ) | 35,680,505 | (11,703,826 | ) | (128,495,769 | ) | ||||||||||
End of period | 10,813,301 | $188,627,837 | 11,545,010 | $152,947,332 | ||||||||||||||
Net investment loss | ($1,053,254 | ) | ($899,903 | ) |
See financial notes 31
Table of Contents
Laudus International MarketMasters Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
Investor Shares | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 19.03 | 17.45 | 18.36 | 15.04 | 11.78 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.21 | 0.16 | 0.09 | 0.14 | |||||||||||||||||
Net realized and unrealized gains (losses) | 4.85 | 1.52 | (0.85 | ) | 3.41 | 3.63 | ||||||||||||||||
Total from investment operations | 5.08 | 1.73 | (0.69 | ) | 3.50 | 3.77 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.43 | ) | (0.15 | ) | (0.22 | ) | (0.18 | ) | (0.51 | ) | ||||||||||||
Net asset value at end of period | 23.68 | 19.03 | 17.45 | 18.36 | 15.04 | |||||||||||||||||
Total return (%) | 27.23 | 10.05 | (3.87 | ) | 23.47 | 33.64 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.40 | 1.53 | 1 | 1.59 | 1.60 | 1.62 | ||||||||||||||||
Gross operating expenses | 1.60 | 1.62 | 1.60 | 1.62 | 1.63 | |||||||||||||||||
Net investment income (loss) | 1.10 | 1.19 | 0.80 | 0.53 | 0.95 | |||||||||||||||||
Portfolio turnover rate | 65 | 68 | 78 | 83 | 96 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 675 | 592 | 665 | 849 | 931 |
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
Select Shares | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 19.03 | 17.46 | 18.38 | 15.05 | 11.80 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.28 | 0.25 | 0.19 | 0.10 | 0.15 | |||||||||||||||||
Net realized and unrealized gains (losses) | 4.83 | 1.50 | (0.86 | ) | 3.43 | 3.64 | ||||||||||||||||
Total from investment operations | 5.11 | 1.75 | (0.67 | ) | 3.53 | 3.79 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.46 | ) | (0.18 | ) | (0.25 | ) | (0.20 | ) | (0.54 | ) | ||||||||||||
Net asset value at end of period | 23.68 | 19.03 | 17.46 | 18.38 | 15.05 | |||||||||||||||||
Total return (%) | 27.43 | 10.20 | (3.76 | ) | 23.68 | 33.82 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.25 | 1.37 | 1 | 1.45 | 1.48 | 2 | 1.47 | |||||||||||||||
Gross operating expenses | 1.44 | 1.47 | 1.47 | 1.50 | 1.58 | |||||||||||||||||
Net investment income (loss) | 1.26 | 1.40 | 0.99 | 0.69 | 1.08 | |||||||||||||||||
Portfolio turnover rate | 65 | 68 | 78 | 83 | 96 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,590 | 1,062 | 961 | 948 | 630 |
1 Effective June 6, 2012, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/12 is a blended ratio.
2 The ratio of net operating expenses would have been 1.47% if certain non-routine expenses had not been incurred.
32 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2013
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 | ($) | ($) | ||||||||||
94 | .0% | Common Stock | 1,603,354,249 | 2,128,971,390 | ||||||||
0 | .3% | Preferred Stock | 5,886,941 | 6,120,319 | ||||||||
5 | .0% | Other Investment Company | 114,088,179 | 114,088,179 | ||||||||
0 | .0% | Rights | 35,341 | 37,011 | ||||||||
0 | .2% | Short-Term Investments | 4,849,957 | 4,849,957 | ||||||||
99 | .5% | Total Investments | 1,728,214,667 | 2,254,066,856 | ||||||||
0 | .5% | Other Assets and Liabilities, Net | 11,049,228 | |||||||||
100 | .0% | Net Assets | 2,265,116,084 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 94.0% of net assets | ||||||||
Australia 4.8% | ||||||||
Banks 0.3% | ||||||||
Australia & New Zealand Banking Group Ltd. | 42,771 | 1,368,687 | ||||||
Bendigo & Adelaide Bank Ltd. | 6,444 | 66,340 | ||||||
Commonwealth Bank of Australia | 24,782 | 1,784,366 | ||||||
National Australia Bank Ltd. | 36,538 | 1,221,131 | ||||||
Westpac Banking Corp. | 48,304 | 1,568,293 | ||||||
6,008,817 | ||||||||
Capital Goods 0.4% | ||||||||
Leighton Holdings Ltd. | 2,271 | 38,472 | ||||||
Monadelphous Group Ltd. | 509,150 | 8,736,284 | ||||||
8,774,756 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
ALS Ltd. | 5,060 | 47,866 | ||||||
Brambles Ltd. | 23,345 | 204,940 | ||||||
Seek Ltd. | 4,000 | 49,141 | ||||||
Transfield Services Ltd. | 2,260,626 | 2,851,242 | ||||||
3,153,189 | ||||||||
Consumer Services 0.5% | ||||||||
Crown Ltd. | 6,204 | 98,906 | ||||||
Echo Entertainment Group Ltd. | 12,297 | 30,863 | ||||||
Flight Centre Ltd. | 123,358 | 6,056,052 | ||||||
Invocare Ltd. | 429,546 | 4,448,893 | ||||||
TABCORP Holdings Ltd. | 10,270 | 34,931 | ||||||
Tatts Group Ltd. | 22,383 | 66,462 | ||||||
10,736,107 | ||||||||
Diversified Financials 0.0% | ||||||||
ASX Ltd. | 2,806 | 97,468 | ||||||
FlexiGroup Ltd. | 136,543 | 607,648 | ||||||
Macquarie Group Ltd. | 4,847 | 233,139 | ||||||
938,255 | ||||||||
Energy 0.0% | ||||||||
Caltex Australia Ltd. | 2,024 | 35,366 | ||||||
Origin Energy Ltd. | 16,850 | 232,942 | ||||||
Santos Ltd. | 14,656 | 209,757 | ||||||
Whitehaven Coal Ltd. * | 6,829 | 10,461 | ||||||
Woodside Petroleum Ltd. | 10,320 | 378,330 | ||||||
WorleyParsons Ltd. | 3,314 | 69,010 | ||||||
935,866 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Metcash Ltd. | 14,377 | 45,498 | ||||||
Wesfarmers Ltd. * | 15,554 | 631,165 | ||||||
Woolworths Ltd. | 19,039 | 627,838 | ||||||
1,304,501 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca-Cola Amatil Ltd. | 8,985 | 109,493 | ||||||
Treasury Wine Estates Ltd. | 9,858 | 43,780 | ||||||
153,273 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Cochlear Ltd. | 852 | 47,339 | ||||||
Ramsay Health Care Ltd. | 1,970 | 72,318 | ||||||
Sonic Healthcare Ltd. | 5,555 | 84,798 | ||||||
204,455 | ||||||||
Insurance 0.7% | ||||||||
AMP Ltd. | 3,172,735 | 14,216,831 | ||||||
Insurance Australia Group Ltd. | 32,789 | 191,485 | ||||||
QBE Insurance Group Ltd. | 18,204 | 254,934 | ||||||
Suncorp Group Ltd. | 20,038 | 252,667 | ||||||
14,915,917 | ||||||||
Materials 1.0% | ||||||||
Alumina Ltd. * | 36,590 | 35,575 | ||||||
Amcor Ltd. | 18,052 | 184,932 | ||||||
BHP Billiton Ltd. | 49,777 | 1,759,785 | ||||||
BHP Billiton Ltd. ADR | 86,675 | 6,127,056 | ||||||
Boral Ltd. | 10,945 | 51,071 | ||||||
DuluxGroup Ltd. | 161,850 | 788,164 | ||||||
Fortescue Metals Group Ltd. | 21,499 | 105,439 | ||||||
Iluka Resources Ltd. | 6,278 | 60,937 | ||||||
Incitec Pivot Ltd. | 26,096 | 65,656 | ||||||
Newcrest Mining Ltd. | 11,930 | 115,681 | ||||||
Orica Ltd. | 674,162 | 13,421,391 | ||||||
Rio Tinto Ltd. | 6,818 | 410,254 | ||||||
23,125,941 | ||||||||
Media 0.0% | ||||||||
REA Group Ltd. | 18,461 | 724,554 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
CSL Ltd. | 56,905 | 3,740,644 | ||||||
Real Estate 1.2% | ||||||||
CFS Retail Property Trust Group | 32,493 | 63,592 | ||||||
Charter Hall Retail REIT | 1,645,358 | 6,281,891 | ||||||
Commonwealth Property Office Fund | 11,902,377 | 13,465,916 | ||||||
Dexus Property Group | 72,559 | 74,360 |
See financial notes 33
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Federation Centres Ltd. | 22,668 | 53,198 | ||||||
Goodman Group | 25,244 | 120,641 | ||||||
GPT Group | 30,770 | 107,242 | ||||||
Lend Lease Group | 8,133 | 87,705 | ||||||
Mirvac Group | 51,235 | 84,228 | ||||||
Shopping Centres Australasia Property Group | 3,392,393 | 5,108,890 | ||||||
Stockland | 32,727 | 124,040 | ||||||
Westfield Group | 32,509 | 332,681 | ||||||
Westfield Retail Trust | 45,683 | 133,282 | ||||||
26,037,666 | ||||||||
Retailing 0.0% | ||||||||
Harvey Norman Holdings Ltd. | 7,965 | 24,509 | ||||||
Super Retail Group Ltd. | 37,367 | 473,327 | ||||||
497,836 | ||||||||
Software & Services 0.0% | ||||||||
Computershare Ltd. | 6,665 | 67,639 | ||||||
Telecommunication Services 0.3% | ||||||||
Telstra Corp., Ltd. | 1,394,000 | 6,821,222 | ||||||
Transportation 0.0% | ||||||||
Asciano Ltd. | 14,625 | 80,318 | ||||||
Aurizon Holdings Ltd. | 33,984 | 153,837 | ||||||
Qantas Airways Ltd. * | 16,643 | 19,567 | ||||||
Sydney Airport | 1,870 | 7,406 | ||||||
Toll Holdings Ltd. | 10,116 | 55,110 | ||||||
Transurban Group | 20,579 | 138,051 | ||||||
454,289 | ||||||||
Utilities 0.0% | ||||||||
AGL Energy Ltd. | 8,346 | 123,292 | ||||||
APA Group | 12,878 | 73,786 | ||||||
SP AusNet | 24,580 | 29,037 | ||||||
226,115 | ||||||||
108,821,042 | ||||||||
Austria 0.0% | ||||||||
Banks 0.0% | ||||||||
Erste Group Bank AG | 3,933 | 138,087 | ||||||
Raiffeisen Bank International AG | 733 | 26,886 | ||||||
164,973 | ||||||||
Capital Goods 0.0% | ||||||||
Andritz AG | 1,076 | 66,262 | ||||||
Energy 0.0% | ||||||||
OMV AG | 2,275 | 108,523 | ||||||
Insurance 0.0% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 576 | 30,472 | ||||||
Materials 0.0% | ||||||||
Voestalpine AG | 1,648 | 77,745 | ||||||
Real Estate 0.0% | ||||||||
Immofinanz AG * | 13,432 | 58,827 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG | 2,926 | 24,054 | ||||||
Utilities 0.0% | ||||||||
Verbund AG | 1,021 | 23,951 | ||||||
554,807 | ||||||||
Belgium 0.2% | ||||||||
Banks 0.0% | ||||||||
KBC GROEP N.V. | 3,694 | 201,255 | ||||||
Diversified Financials 0.0% | ||||||||
Groupe Bruxelles Lambert S.A. | 1,210 | 107,902 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Colruyt S.A. | 42,899 | 2,393,228 | ||||||
Delhaize Group S.A. | 1,527 | 97,521 | ||||||
2,490,749 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Anheuser-Busch InBev N.V. | 12,382 | 1,283,563 | ||||||
Insurance 0.0% | ||||||||
Ageas | 3,420 | 145,330 | ||||||
Materials 0.0% | ||||||||
Solvay S.A. | 938 | 146,668 | ||||||
Umicore S.A. | 1,709 | 81,381 | ||||||
228,049 | ||||||||
Media 0.0% | ||||||||
Telenet Group Holding N.V. | 838 | 46,024 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
UCB S.A. | 1,687 | 110,738 | ||||||
Telecommunication Services 0.0% | ||||||||
Belgacom S.A. | 2,281 | 62,412 | ||||||
4,676,022 | ||||||||
Brazil 0.7% | ||||||||
Capital Goods 0.1% | ||||||||
Mills Estruturas e Servicos de Engenharia S.A. | 177,400 | 2,462,789 | ||||||
Consumer Services 0.2% | ||||||||
Estacio Participacoes S.A. | 455,300 | 3,516,066 | ||||||
Kroton Educacional S.A. | 86,700 | 1,281,033 | ||||||
4,797,099 | ||||||||
Insurance 0.1% | ||||||||
BB Seguridade Participacoes S.A. | 227,700 | 2,487,197 | ||||||
Materials 0.2% | ||||||||
Vale S.A. ADR | 205,400 | 3,288,454 | ||||||
Software & Services 0.1% | ||||||||
Cielo S.A. | 64,100 | 1,943,933 | ||||||
Linx S.A. | 33,900 | 612,718 | ||||||
2,556,651 | ||||||||
Transportation 0.0% | ||||||||
CCR S.A. | 120,400 | 1,001,273 | ||||||
16,593,463 | ||||||||
Cambodia 0.1% | ||||||||
Consumer Services 0.1% | ||||||||
NagaCorp Ltd. | 2,382,000 | 2,199,646 |
34 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Canada 3.8% | ||||||||
Capital Goods 0.3% | ||||||||
ATS Automation Tooling Systems, Inc. * | 311,070 | 4,302,143 | ||||||
CAE, Inc. | 282,300 | 3,235,491 | ||||||
Finning International, Inc. | 13,350 | 307,806 | ||||||
7,845,440 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Ritchie Bros. Auctioneers, Inc. | 152,200 | 3,008,528 | ||||||
Diversified Financials 0.3% | ||||||||
CI Financial Corp. | 61,622 | 2,049,634 | ||||||
Element Financial Corp. * | 351,420 | 4,486,070 | ||||||
6,535,704 | ||||||||
Energy 0.6% | ||||||||
Africa Oil Corp. * | 248,900 | 2,208,586 | ||||||
Canadian Natural Resources Ltd. | 68,400 | 2,171,700 | ||||||
Pason Systems, Inc. | 269,600 | 5,603,253 | ||||||
Suncor Energy, Inc. | 105,525 | 3,835,834 | ||||||
13,819,373 | ||||||||
Materials 0.5% | ||||||||
Agrium, Inc. | 18,600 | 1,586,952 | ||||||
CCL Industries, Inc., Class B | 38,680 | 2,656,201 | ||||||
Potash Corp. of Saskatchewan, Inc. | 144,325 | 4,488,507 | ||||||
West Fraser Timber Co., Ltd. | 22,560 | 2,067,865 | ||||||
10,799,525 | ||||||||
Media 0.5% | ||||||||
Thomson Reuters Corp. | 275,700 | 10,360,069 | ||||||
Real Estate 0.3% | ||||||||
Brookfield Asset Management, Inc., Class A | 26,987 | 1,068,146 | ||||||
Morguard Real Estate Investment Trust | 135,490 | 2,209,111 | ||||||
Northern Property REIT | 139,300 | 3,740,853 | ||||||
7,018,110 | ||||||||
Transportation 1.2% | ||||||||
Canadian National Railway Co. | 121,312 | 13,335,828 | ||||||
Canadian Pacific Railway Ltd. | 86,647 | 12,396,586 | ||||||
WestJet Airlines Ltd. | 37,806 | 988,798 | ||||||
26,721,212 | ||||||||
86,107,961 | ||||||||
Chile 0.0% | ||||||||
Software & Services 0.0% | ||||||||
Sonda S.A. | 223,339 | 579,395 | ||||||
China 2.0% | ||||||||
Automobiles & Components 0.4% | ||||||||
Great Wall Motor Co., Ltd., Class H | 364,500 | 2,142,428 | ||||||
Minth Group Ltd. | 2,687,073 | 5,620,935 | ||||||
7,763,363 | ||||||||
Banks 0.1% | ||||||||
China Merchants Bank Co., Ltd., Class H | 1,249,723 | 2,484,941 | ||||||
Capital Goods 0.3% | ||||||||
CIMC Enric Holdings Ltd. | 1,352,000 | 1,903,903 | ||||||
Haitian International Holdings Ltd. | 1,578,000 | 3,802,017 | ||||||
5,705,920 | ||||||||
Energy 0.3% | ||||||||
CNOOC Ltd. | 1,530,000 | 3,111,976 | ||||||
Hilong Holding Ltd. | 5,494,000 | 3,654,283 | ||||||
6,766,259 | ||||||||
Materials 0.1% | ||||||||
AMVIG Holdings Ltd. (b) | 4,286,000 | 2,011,814 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Sino Biopharmaceutical Ltd. | 1,740,000 | 1,229,797 | ||||||
WuXi PharmaTech Cayman, Inc. ADR * | 22,248 | 650,754 | ||||||
1,880,551 | ||||||||
Retailing 0.0% | ||||||||
E-Commerce China Dangdang, Inc. ADR * | 100,760 | 891,726 | ||||||
Software & Services 0.5% | ||||||||
58.Com Inc. ADR * | 13,985 | 337,318 | ||||||
Baidu, Inc. ADR * | 19,417 | 3,124,195 | ||||||
NetEase, Inc. ADR | 17,943 | 1,211,332 | ||||||
Qihoo 360 Technology Co., Ltd. ADR * | 9,635 | 796,237 | ||||||
SouFun Holdings Ltd. ADR | 12,836 | 683,260 | ||||||
Tencent Holdings Ltd. | 59,100 | 3,222,747 | ||||||
YY, Inc. ADR * | 57,600 | 2,832,192 | ||||||
12,207,281 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Hollysys Automation Technologies Ltd. * | 37,761 | 633,252 | ||||||
Ju Teng International Holdings Ltd. | 4,846,000 | 3,525,446 | ||||||
Sunny Optical Technology Group Co., Ltd. | 1,154,670 | 1,118,354 | ||||||
5,277,052 | ||||||||
44,988,907 | ||||||||
Cyprus 0.0% | ||||||||
Energy 0.0% | ||||||||
Prosafe SE | 59,361 | 508,779 | ||||||
Denmark 1.8% | ||||||||
Banks 0.3% | ||||||||
Danske Bank A/S * | 10,154 | 237,256 | ||||||
Jyske Bank A/S - Reg’d * | 94,420 | 5,338,487 | ||||||
5,575,743 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Pandora A/S | 46,240 | 2,204,570 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Carlsberg A/S, Class B | 1,681 | 167,908 |
See financial notes 35
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Royal UNIBREW | 50,850 | 6,526,055 | ||||||
6,693,963 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Coloplast A/S, Class B | 1,705 | 111,208 | ||||||
GN Store Nord A/S | 102,401 | 2,336,053 | ||||||
William Demant Holding A/S * | 443 | 43,869 | ||||||
2,491,130 | ||||||||
Insurance 0.0% | ||||||||
Tryg A/S | 368 | 33,605 | ||||||
Materials 0.7% | ||||||||
Auriga Industries, Class B * | 96,695 | 3,794,658 | ||||||
Christian Hansen Holding A/S | 319,298 | 11,831,086 | ||||||
15,625,744 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Novo Nordisk A/S, Class B | 6,140 | 1,022,633 | ||||||
Novozymes A/S, B Shares | 3,747 | 146,753 | ||||||
1,169,386 | ||||||||
Software & Services 0.2% | ||||||||
SimCorp A/S | 161,885 | 5,299,833 | ||||||
Telecommunication Services 0.0% | ||||||||
TDC A/S | 10,598 | 95,692 | ||||||
Transportation 0.0% | ||||||||
AP Moller - Maersk A/S, Series A | 9 | 81,269 | ||||||
AP Moller - Maersk A/S, Series B | 20 | 193,499 | ||||||
DSV A/S | 3,059 | 89,495 | ||||||
364,263 | ||||||||
39,553,929 | ||||||||
Finland 0.3% | ||||||||
Automobiles & Components 0.0% | ||||||||
Nokian Renkaat Oyj | 1,651 | 83,501 | ||||||
Capital Goods 0.1% | ||||||||
Cramo Oyj | 60,380 | 1,207,209 | ||||||
Kone Oyj, Class B | 2,450 | 215,997 | ||||||
Metso Oyj | 1,916 | 75,414 | ||||||
Wartsila Oyj Abp | 2,658 | 117,940 | ||||||
1,616,560 | ||||||||
Diversified Financials 0.0% | ||||||||
Pohjola Bank plc, A Shares | 2,071 | 37,714 | ||||||
Energy 0.0% | ||||||||
Neste Oil Oyj | 1,922 | 38,110 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Kesko Oyj, B Shares | 1,003 | 33,330 | ||||||
Insurance 0.2% | ||||||||
Sampo Oyj, A Shares | 107,389 | 5,079,572 | ||||||
Materials 0.0% | ||||||||
Stora Enso Oyj, R Shares | 8,723 | 81,001 | ||||||
UPM-Kymmene Oyj | 8,330 | 132,257 | ||||||
213,258 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 1,428 | 38,379 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Nokia Oyj * | 57,419 | 436,429 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 2,120 | 53,114 | ||||||
Utilities 0.0% | ||||||||
Fortum Oyj | 6,918 | 154,320 | ||||||
7,784,287 | ||||||||
France 8.2% | ||||||||
Automobiles & Components 0.3% | ||||||||
Compagnie Generale des Etablissements Michelin | 2,745 | 286,023 | ||||||
Plastic Omnium S.A. | 166,620 | 4,760,173 | ||||||
Renault S.A. | 2,997 | 261,489 | ||||||
Valeo S.A. | 10,968 | 1,085,056 | ||||||
6,392,741 | ||||||||
Banks 1.3% | ||||||||
BNP Paribas S.A. | 396,384 | 29,242,492 | ||||||
Credit Agricole S.A. * | 14,879 | 178,898 | ||||||
Natixis | 13,865 | 74,560 | ||||||
Societe Generale S.A. | 10,977 | 620,085 | ||||||
30,116,035 | ||||||||
Capital Goods 0.5% | ||||||||
Alstom S.A. | 3,268 | 121,311 | ||||||
Bouygues S.A. | 2,833 | 110,535 | ||||||
Compagnie de Saint-Gobain | 51,670 | 2,712,161 | ||||||
Legrand S.A. | 4,048 | 229,423 | ||||||
Nexans S.A. | 63,503 | 2,823,409 | ||||||
Rexel S.A. | 3,743 | 93,764 | ||||||
Safran S.A. | 3,830 | 244,193 | ||||||
Schneider Electric S.A. | 8,134 | 684,457 | ||||||
Thales S.A. | 1,517 | 92,910 | ||||||
Vallourec S.A. | 1,597 | 95,056 | ||||||
Vinci S.A. | 41,669 | 2,666,240 | ||||||
Zodiac Aerospace | 7,138 | 1,142,129 | ||||||
11,015,588 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Bureau Veritas S.A. | 3,576 | 107,873 | ||||||
Edenred | 3,517 | 119,394 | ||||||
Societe BIC S.A. | 431 | 53,821 | ||||||
281,088 | ||||||||
Consumer Durables & Apparel 1.2% | ||||||||
Christian Dior S.A. | 25,961 | 4,925,754 | ||||||
Hermes International | 4,233 | 1,440,153 | ||||||
Kering | 53,382 | 12,097,996 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 44,852 | 8,611,375 | ||||||
27,075,278 | ||||||||
Consumer Services 0.0% | ||||||||
Accor S.A. | 2,211 | 98,823 | ||||||
Sodexo | 1,491 | 144,724 | ||||||
243,547 | ||||||||
Diversified Financials 0.0% | ||||||||
Eurazeo S.A. | 520 | 39,261 | ||||||
Wendel S.A. | 493 | 68,715 | ||||||
107,976 |
36 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.2% | ||||||||
CGG S.A. * | 2,590 | 56,928 | ||||||
Technip S.A. | 1,522 | 159,412 | ||||||
Total S.A. | 67,414 | 4,136,047 | ||||||
4,352,387 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Carrefour S.A. | 9,083 | 331,552 | ||||||
Casino Guichard Perrachon S.A. | 918 | 103,188 | ||||||
434,740 | ||||||||
Food, Beverage & Tobacco 1.0% | ||||||||
Danone | 159,547 | 11,816,714 | ||||||
Pernod-Ricard S.A. | 83,622 | 10,043,716 | ||||||
Remy Cointreau S.A. | 330 | 32,505 | ||||||
21,892,935 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Essilor International S.A. | 3,172 | 339,929 | ||||||
Medica S.A. | 186,943 | 4,803,875 | ||||||
5,143,804 | ||||||||
Household & Personal Products 0.0% | ||||||||
L’Oreal S.A. | 3,759 | 641,837 | ||||||
Insurance 0.6% | ||||||||
AXA S.A. | 410,807 | 10,235,434 | ||||||
CNP Assurances | 2,227 | 39,231 | ||||||
Euler Hermes S.A. | 18,708 | 2,469,971 | ||||||
SCOR SE | 2,591 | 91,452 | ||||||
12,836,088 | ||||||||
Materials 0.1% | ||||||||
Air Liquide S.A. | 4,863 | 660,948 | ||||||
Arkema S.A. | 947 | 107,139 | ||||||
Imerys S.A. | 509 | 40,832 | ||||||
Lafarge S.A. | 2,886 | 199,121 | ||||||
1,008,040 | ||||||||
Media 0.7% | ||||||||
Eutelsat Communications S.A. | 1,976 | 62,497 | ||||||
Havas S.A. | 526,240 | 4,384,184 | ||||||
Ipsos | 59,758 | 2,515,463 | ||||||
JC Decaux S.A. | 997 | 40,055 | ||||||
Lagardere S.C.A. | 1,770 | 64,303 | ||||||
Publicis Groupe S.A. | 103,514 | 8,608,163 | ||||||
15,674,665 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Boiron S.A. (b) | 74,612 | 5,051,037 | ||||||
Eurofins Scientific | 20,550 | 5,625,709 | ||||||
Sanofi | 56,453 | 6,019,195 | ||||||
16,695,941 | ||||||||
Real Estate 0.2% | ||||||||
Fonciere des Regions | 412 | 35,284 | ||||||
Gecina S.A. | 329 | 43,904 | ||||||
ICADE | 684 | 62,914 | ||||||
Klepierre | 1,564 | 70,147 | ||||||
Unibail-Rodamco SE (g) | 1,445 | 378,656 | ||||||
Unibail-Rodamco SE (g) | 16,947 | 4,427,724 | ||||||
5,018,629 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
STMicroelectronics N.V. | 9,557 | 73,512 | ||||||
Software & Services 0.2% | ||||||||
AtoS | 901 | 76,802 | ||||||
Cap Gemini S.A. | 39,684 | 2,602,396 | ||||||
Criteo S.A. ADR * | 44,700 | 1,578,357 | ||||||
Dassault Systemes S.A. | 981 | 119,223 | ||||||
4,376,778 | ||||||||
Technology Hardware & Equipment 0.7% | ||||||||
Ingenico | 103,841 | 7,800,385 | ||||||
Neopost S.A. | 95,590 | 7,217,137 | ||||||
15,017,522 | ||||||||
Telecommunication Services 0.0% | ||||||||
Iliad S.A. | 348 | 79,569 | ||||||
Orange S.A. | 28,027 | 385,261 | ||||||
Vivendi S.A. | 18,351 | 464,642 | ||||||
929,472 | ||||||||
Transportation 0.0% | ||||||||
Aeroports de Paris | 519 | 55,458 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 8,871 | 85,879 | ||||||
141,337 | ||||||||
Utilities 0.3% | ||||||||
EDF S.A. | 3,627 | 126,937 | ||||||
GDF Suez | 20,731 | 513,792 | ||||||
Rubis S.C.A. | 99,836 | 6,232,520 | ||||||
Suez Environnement Co. | 4,195 | 73,150 | ||||||
Veolia Environnement S.A. | 5,454 | 93,567 | ||||||
7,039,966 | ||||||||
186,509,906 | ||||||||
Germany 9.4% | ||||||||
Automobiles & Components 2.3% | ||||||||
Bayerische Motoren Werke AG | 193,440 | 21,893,235 | ||||||
Continental AG | 39,979 | 7,310,830 | ||||||
Daimler AG - Reg’d | 225,602 | 18,471,112 | ||||||
ElringKlinger AG | 121,753 | 5,176,841 | ||||||
Volkswagen AG | 442 | 108,089 | ||||||
52,960,107 | ||||||||
Banks 0.5% | ||||||||
Aareal Bank AG * | 263,280 | 10,097,605 | ||||||
Commerzbank AG * | 14,145 | 180,909 | ||||||
10,278,514 | ||||||||
Capital Goods 1.8% | ||||||||
Brenntag AG | 11,117 | 1,881,099 | ||||||
DMG MORI SEIKI AG | 96,690 | 3,178,345 | ||||||
Duerr AG | 56,700 | 4,962,310 | ||||||
GEA Group AG | 2,817 | 122,435 | ||||||
Hochtief AG | 480 | 43,413 | ||||||
MAN SE | 665 | 80,133 | ||||||
MTU Aero Engines Holding AG | 95,623 | 9,536,608 | ||||||
NORMA Group | 302,328 | 15,119,492 | ||||||
Osram Licht AG * | 1,220 | 63,218 | ||||||
Rational AG | 11,284 | 3,455,395 | ||||||
Siemens AG - Reg’d | 12,207 | 1,559,959 | ||||||
40,002,407 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Bertrandt AG | 5,165 | 675,512 |
See financial notes 37
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Bilfinger SE | 64,200 | 7,124,294 | ||||||
7,799,806 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Adidas AG | 3,242 | 369,411 | ||||||
Hugo Boss AG | 414 | 53,931 | ||||||
423,342 | ||||||||
Diversified Financials 0.2% | ||||||||
Aurelius AG | 105,490 | 3,597,424 | ||||||
Deutsche Bank AG - Reg’d | 15,671 | 757,365 | ||||||
Deutsche Boerse AG | 3,030 | 227,938 | ||||||
4,582,727 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Metro AG | 1,944 | 91,146 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Suedzucker AG | 1,360 | 43,749 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Celesio AG | 1,275 | 39,639 | ||||||
Fresenius Medical Care AG & Co KGaA | 3,256 | 215,177 | ||||||
Fresenius SE & Co KGaA | 1,919 | 249,112 | ||||||
503,928 | ||||||||
Household & Personal Products 0.0% | ||||||||
Beiersdorf AG | 1,597 | 152,280 | ||||||
Henkel AG & Co. KGaA | 2,052 | 189,252 | ||||||
341,532 | ||||||||
Insurance 0.9% | ||||||||
Allianz SE - Reg’d | 121,834 | 20,456,210 | ||||||
Hannover Rueckversicherung SE - Reg’d | 904 | 72,348 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 2,796 | 583,336 | ||||||
21,111,894 | ||||||||
Materials 1.0% | ||||||||
BASF SE | 14,156 | 1,469,598 | ||||||
BASF SE ADR | 46,050 | 4,784,595 | ||||||
HeidelbergCement AG | 2,226 | 175,274 | ||||||
K&S AG - Reg’d | 2,720 | 69,114 | ||||||
Lanxess AG | 1,318 | 92,566 | ||||||
Linde AG | 2,864 | 543,660 | ||||||
Symrise AG | 343,917 | 14,561,203 | ||||||
ThyssenKrupp AG * | 6,015 | 153,463 | ||||||
21,849,473 | ||||||||
Media 0.3% | ||||||||
Axel Springer AG | 593 | 35,782 | ||||||
GfK SE (b) | 64,177 | 3,751,217 | ||||||
Kabel Deutschland Holding AG | 340 | 42,684 | ||||||
ProSiebenSat.1 Media AG - Reg’d | 63,395 | 3,013,926 | ||||||
6,843,609 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
Bayer AG - Reg’d | 34,591 | 4,291,090 | ||||||
Merck KGaA | 1,024 | 170,343 | ||||||
Morphosys AG * | 6,476 | 500,935 | ||||||
QIAGEN N.V. * | 169,552 | 3,891,377 | ||||||
Stada Arzneimittel AG | 80,300 | 4,615,784 | ||||||
13,469,529 | ||||||||
Real Estate 0.0% | ||||||||
Deutsche Wohnen AG | 39,415 | 741,271 | ||||||
Retailing 0.3% | ||||||||
Fielmann AG | 60,527 | 6,768,862 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Infineon Technologies AG | 300,245 | 2,904,670 | ||||||
Software & Services 0.9% | ||||||||
SAP AG | 155,205 | 12,145,122 | ||||||
United Internet AG - Reg’d | 1,612 | 63,587 | ||||||
Wirecard AG | 202,730 | 7,375,995 | ||||||
19,584,704 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Wincor Nixdorf AG | 15,868 | 1,049,165 | ||||||
Telecommunication Services 0.0% | ||||||||
Deutsche Telekom AG - Reg’d | 43,810 | 688,461 | ||||||
Telefonica Deutschland Holding AG | 3,480 | 27,412 | ||||||
715,873 | ||||||||
Transportation 0.0% | ||||||||
Deutsche Lufthansa AG - Reg’d * | 3,433 | 66,370 | ||||||
Deutsche Post AG - Reg’d | 14,072 | 475,231 | ||||||
Fraport AG Frankfurt Airport Services Worldwide | 551 | 42,627 | ||||||
584,228 | ||||||||
Utilities 0.0% | ||||||||
E.ON SE AG | 28,121 | 512,604 | ||||||
RWE AG | 7,394 | 272,410 | ||||||
785,014 | ||||||||
213,435,550 | ||||||||
Greece 0.1% | ||||||||
Consumer Services 0.0% | ||||||||
OPAP S.A. | 3,348 | 41,575 | ||||||
Diversified Financials 0.1% | ||||||||
Hellenic Exchanges S.A. | 224,190 | 2,356,474 | ||||||
Telecommunication Services 0.0% | ||||||||
Hellenic Telecommunications Organization S.A. * | 3,767 | 47,409 | ||||||
2,445,458 | ||||||||
Hong Kong 2.6% | ||||||||
Automobiles & Components 0.1% | ||||||||
Xinyi Glass Holdings Ltd. | 2,090,000 | 2,069,924 | ||||||
Banks 0.1% | ||||||||
Bank of East Asia Ltd. | 17,800 | 77,140 | ||||||
BOC Hong Kong (Holdings) Ltd. | 58,000 | 189,418 | ||||||
Dah Sing Banking Group Ltd. | 1,201,200 | 2,259,335 | ||||||
Hang Seng Bank Ltd. | 12,000 | 200,013 | ||||||
2,725,906 | ||||||||
Capital Goods 0.0% | ||||||||
Hopewell Holdings Ltd. | 8,500 | 28,626 |
38 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hutchison Whampoa Ltd. | 33,000 | 411,202 | ||||||
Noble Group Ltd. | 58,000 | 47,920 | ||||||
NWS Holdings Ltd. | 20,000 | 31,232 | ||||||
518,980 | ||||||||
Consumer Durables & Apparel 0.6% | ||||||||
Haier Electronics Group Co., Ltd. | 308,000 | 657,461 | ||||||
Li & Fung Ltd. | 90,000 | 127,239 | ||||||
Man Wah Holdings Ltd. | 2,722,000 | 4,691,330 | ||||||
Techtronic Industries Co., Ltd. | 3,175,500 | 7,975,119 | ||||||
Yue Yuen Industrial Holdings Ltd. | 11,000 | 30,205 | ||||||
13,481,354 | ||||||||
Consumer Services 0.4% | ||||||||
Galaxy Entertainment Group Ltd. * | 32,000 | 238,876 | ||||||
Melco International Development Ltd. | 1,772,000 | 5,562,161 | ||||||
MGM China Holdings Ltd. | 364,400 | 1,256,465 | ||||||
Sands China Ltd. | 38,000 | 270,183 | ||||||
Shangri-La Asia Ltd. | 26,000 | 47,631 | ||||||
SJM Holdings Ltd. | 29,683 | 95,976 | ||||||
Wynn Macau Ltd. | 23,200 | 89,059 | ||||||
7,560,351 | ||||||||
Diversified Financials 0.0% | ||||||||
First Pacific Co., Ltd. | 36,000 | 40,933 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 16,500 | 266,179 | ||||||
Value Partners Group Ltd. | 194,000 | 117,744 | ||||||
424,856 | ||||||||
Insurance 0.2% | ||||||||
AIA Group Ltd. | 700,400 | 3,556,512 | ||||||
Real Estate 0.4% | ||||||||
Cheung Kong (Holdings) Ltd. | 21,410 | 334,361 | ||||||
China Overseas Grand Oceans Group Ltd. | 454,000 | 541,026 | ||||||
China Overseas Land & Investment Ltd. | 660,000 | 2,045,354 | ||||||
Hang Lung Properties Ltd. | 35,000 | 115,259 | ||||||
Henderson Land Development Co., Ltd. | 16,500 | 97,635 | ||||||
Hysan Development Co., Ltd. | 10,000 | 46,778 | ||||||
Kerry Properties Ltd. | 11,000 | 47,702 | ||||||
New World Development Co., Ltd. | 54,000 | 74,704 | ||||||
Sino Land Co., Ltd. | 44,000 | 61,710 | ||||||
Sun Hung Kai Properties Ltd. | 24,000 | 314,369 | ||||||
Swire Pacific Ltd., Class A | 10,500 | 121,354 | ||||||
Swire Properties Ltd. | 17,800 | 48,213 | ||||||
The Link REIT | 35,500 | 178,588 | ||||||
Wharf Holdings Ltd. | 513,349 | 4,319,966 | ||||||
Wheelock & Co., Ltd. | 14,000 | 71,446 | ||||||
8,418,465 | ||||||||
Retailing 0.1% | ||||||||
Emperor Watch & Jewellery Ltd. | 25,220,000 | 2,018,829 | ||||||
Sa Sa International Holdings Ltd. | 544,000 | 593,456 | ||||||
2,612,285 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASM Pacific Technology Ltd. | 240,900 | 2,321,884 | ||||||
Software & Services 0.1% | ||||||||
21Vianet Group Inc. ADR * | 119,220 | 2,145,960 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
AAC Technologies Holdings, Inc. | 963,500 | 4,258,248 | ||||||
China High Precision Automation Group Ltd. (a)(b) | 766,000 | 12,251 | ||||||
4,270,499 | ||||||||
Telecommunication Services 0.0% | ||||||||
HKT Trust & HKT Ltd. | 34,000 | 31,528 | ||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | 1,270,000 | 557,293 | ||||||
PCCW Ltd. | 60,000 | 27,086 | ||||||
615,907 | ||||||||
Transportation 0.3% | ||||||||
Cathay Pacific Airways Ltd. | 18,000 | 35,658 | ||||||
MTR Corp., Ltd. | 23,500 | 91,038 | ||||||
Orient Overseas International Ltd. | 3,500 | 18,078 | ||||||
Pacific Basin Shipping Ltd. | 8,994,000 | 6,436,169 | ||||||
6,580,943 | ||||||||
Utilities 0.0% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 11,400 | 79,329 | ||||||
CLP Holdings Ltd. | 26,500 | 213,250 | ||||||
Hong Kong & China Gas Co., Ltd. | 89,540 | 209,165 | ||||||
Power Assets Holdings Ltd. | 21,000 | 174,955 | ||||||
676,699 | ||||||||
57,980,525 | ||||||||
India 0.6% | ||||||||
Automobiles & Components 0.2% | ||||||||
Bharat Forge Ltd. | 646,670 | 3,147,917 | ||||||
Tata Motors Ltd. | 223,630 | 1,390,726 | ||||||
4,538,643 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Lupin Ltd. | 73,748 | 1,063,937 | ||||||
Sun Pharmaceutical Industries Ltd. | 281,520 | 2,784,615 | ||||||
3,848,552 | ||||||||
Software & Services 0.2% | ||||||||
HCL Technologies Ltd. | 82,198 | 1,465,430 | ||||||
Tata Consultancy Services Ltd. | 42,736 | 1,468,362 | ||||||
WNS Holdings Ltd. ADR * | 97,410 | 2,190,751 | ||||||
5,124,543 | ||||||||
13,511,738 | ||||||||
Ireland 1.4% | ||||||||
Banks 0.0% | ||||||||
Bank of Ireland * | 262,886 | 96,081 | ||||||
Capital Goods 0.3% | ||||||||
Eaton Corp. plc | 54,700 | 3,859,632 | ||||||
Ingersoll-Rand plc | 43,200 | 2,917,296 | ||||||
6,776,928 |
See financial notes 39
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Commercial & Professional Supplies 0.6% | ||||||||
Experian plc | 627,626 | 12,777,592 | ||||||
Energy 0.0% | ||||||||
Dragon Oil plc | 119,023 | 1,126,949 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Glanbia plc (g) | 358,556 | 5,058,155 | ||||||
Glanbia plc (g) | 38,400 | 538,060 | ||||||
Kerry Group plc, Class A | 2,289 | 146,583 | ||||||
5,742,798 | ||||||||
Materials 0.2% | ||||||||
CRH plc | 11,148 | 271,270 | ||||||
Smurfit Kappa Group plc | 144,640 | 3,501,231 | ||||||
3,772,501 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Elan Corp. plc * | 7,936 | 131,815 | ||||||
Shire plc | 8,489 | 376,406 | ||||||
508,221 | ||||||||
30,801,070 | ||||||||
Israel 0.3% | ||||||||
Banks 0.0% | ||||||||
Bank Hapoalim B.M. | 15,869 | 84,954 | ||||||
Bank Leumi Le-Israel B.M. * | 18,157 | 69,114 | ||||||
Mizrahi Tefahot Bank Ltd. | 1,853 | 21,721 | ||||||
175,789 | ||||||||
Energy 0.0% | ||||||||
Delek Group Ltd. | 68 | 23,480 | ||||||
Materials 0.0% | ||||||||
Israel Chemicals Ltd. | 6,666 | 55,109 | ||||||
The Israel Corp., Ltd. * | 35 | 17,611 | ||||||
72,720 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Teva Pharmaceutical Industries Ltd. | 13,176 | 489,599 | ||||||
Software & Services 0.3% | ||||||||
Check Point Software Technologies Ltd. * | 109,500 | 6,353,190 | ||||||
NICE Systems Ltd. | 898 | 35,212 | ||||||
6,388,402 | ||||||||
Telecommunication Services 0.0% | ||||||||
Bezeq Israeli Telecommunication Corp., Ltd. | 26,399 | 45,900 | ||||||
7,195,890 | ||||||||
Italy 2.2% | ||||||||
Automobiles & Components 0.0% | ||||||||
Brembo S.p.A. | 19,135 | 506,089 | ||||||
Fiat S.p.A. * | 13,397 | 105,123 | ||||||
Pirelli & C. S.p.A | 3,567 | 50,177 | ||||||
661,389 | ||||||||
Banks 1.1% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. * | 73,168 | 23,068 | ||||||
Intesa Sanpaolo S.p.A. | 9,949,719 | 24,683,986 | ||||||
UniCredit S.p.A. | 65,736 | 493,453 | ||||||
Unione di Banche Italiane S.C.P.A. | 12,391 | 85,640 | ||||||
25,286,147 | ||||||||
Capital Goods 0.2% | ||||||||
Finmeccanica S.p.A. * | 6,068 | 44,466 | ||||||
Interpump Group S.p.A. | 284,860 | 3,167,918 | ||||||
Prysmian S.p.A. | 3,054 | 74,601 | ||||||
3,286,985 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Brunello Cucinelli S.p.A. | 92,890 | 2,895,163 | ||||||
Luxottica Group S.p.A. | 2,543 | 137,758 | ||||||
Tod’s S.p.A. | 2,704 | 449,975 | ||||||
3,482,896 | ||||||||
Consumer Services 0.0% | ||||||||
Autogrill S.p.A. * | 6,461 | 57,999 | ||||||
Diversified Financials 0.6% | ||||||||
Azimut Holding S.p.A. | 61,824 | 1,568,299 | ||||||
Banca Generali S.p.A. | 452,574 | 11,814,580 | ||||||
Exor S.p.A. | 1,831 | 72,583 | ||||||
Mediobanca S.p.A. | 7,747 | 70,586 | ||||||
13,526,048 | ||||||||
Energy 0.1% | ||||||||
Eni S.p.A. | 39,252 | 996,488 | ||||||
Saipem S.p.A. | 4,111 | 96,169 | ||||||
Tenaris S.A. | 7,371 | 172,440 | ||||||
1,265,097 | ||||||||
Insurance 0.0% | ||||||||
Assicurazioni Generali S.p.A. | 17,664 | 412,966 | ||||||
Retailing 0.0% | ||||||||
World Duty Free S.p.A. * | 57,043 | 631,993 | ||||||
Telecommunication Services 0.0% | ||||||||
Telecom Italia S.p.A. | 146,192 | 142,617 | ||||||
Telecom Italia S.p.A. - RSP | 90,360 | 70,675 | ||||||
213,292 | ||||||||
Transportation 0.0% | ||||||||
Atlantia S.p.A. | 4,962 | 108,753 | ||||||
Utilities 0.0% | ||||||||
Enel Green Power S.p.A. | 26,240 | 63,830 | ||||||
Enel S.p.A. | 103,014 | 454,490 | ||||||
Snam S.p.A. | 30,056 | 154,864 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 21,282 | 105,354 | ||||||
778,538 | ||||||||
49,712,103 | ||||||||
Japan 12.7% | ||||||||
Automobiles & Components 2.6% | ||||||||
Aisin Seiki Co., Ltd. | 2,900 | 117,811 | ||||||
Bridgestone Corp. | 10,100 | 346,255 | ||||||
Calsonic Kansei Corp. | 571,000 | 2,745,230 | ||||||
Daihatsu Motor Co., Ltd. | 3,000 | 58,249 | ||||||
Denso Corp. | 79,300 | 3,811,826 | ||||||
F.C.C. Co., Ltd. | 260,400 | 5,948,813 | ||||||
Fuji Heavy Industries Ltd. | 226,900 | 6,203,792 | ||||||
Honda Motor Co., Ltd. | 323,907 | 12,934,539 | ||||||
Isuzu Motors Ltd. | 18,317 | 114,071 |
40 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Koito Manufacturing Co., Ltd. | 1,485 | 27,032 | ||||||
Mazda Motor Corp. * | 44,000 | 198,066 | ||||||
Mitsubishi Motors Corp. * | 5,800 | 65,175 | ||||||
Musashi Seimitsu Industry Co., Ltd. | 168,000 | 3,964,340 | ||||||
NGK Spark Plug Co., Ltd. | 3,000 | 68,514 | ||||||
NHK Spring Co., Ltd. | 2,200 | 23,029 | ||||||
Nifco, Inc. | 302,300 | 8,055,911 | ||||||
Nissan Motors Co., Ltd. | 38,900 | 390,605 | ||||||
NOK Corp. | 1,600 | 24,733 | ||||||
Stanley Electric Co., Ltd. | 2,200 | 51,174 | ||||||
Sumitomo Rubber Industries Ltd. | 2,600 | 36,196 | ||||||
Suzuki Motor Corp. | 5,400 | 135,785 | ||||||
The Yokohama Rubber Co., Ltd. | 3,000 | 29,345 | ||||||
Toyoda Gosei Co., Ltd. | 1,000 | 25,005 | ||||||
Toyota Boshoku Corp. | 1,000 | 13,394 | ||||||
Toyota Industries Corp. | 2,514 | 110,892 | ||||||
Toyota Motor Corp. | 196,477 | 12,739,210 | ||||||
TS Tech Co., Ltd. | 15,900 | 595,699 | ||||||
Yamaha Motor Co., Ltd. | 4,200 | 64,338 | ||||||
58,899,029 | ||||||||
Banks 0.7% | ||||||||
Aozora Bank Ltd. | 16,000 | 46,513 | ||||||
Fukuoka Financial Group, Inc. | 12,000 | 54,125 | ||||||
Hokuhoku Financial Group, Inc. | 15,000 | 30,929 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 196,400 | 1,250,727 | ||||||
Mizuho Financial Group, Inc. | 352,900 | 740,759 | ||||||
Resona Holdings, Inc. | 29,500 | 153,451 | ||||||
Seven Bank Ltd. | 8,900 | 31,499 | ||||||
Shinsei Bank Ltd. | 21,000 | 49,167 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 209,500 | 10,126,365 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 49,000 | 242,015 | ||||||
Suruga Bank Ltd. | 105,000 | 1,665,647 | ||||||
The Bank of Kyoto Ltd. | 5,000 | 44,057 | ||||||
The Bank of Yokohama Ltd. | 19,000 | 104,771 | ||||||
The Chiba Bank Ltd. | 12,000 | 85,547 | ||||||
The Chugoku Bank Ltd. | 3,000 | 43,130 | ||||||
The Gunma Bank Ltd. | 6,000 | 34,717 | ||||||
The Hachijuni Bank Ltd. | 7,000 | 43,243 | ||||||
The Hiroshima Bank Ltd. | 8,000 | 34,047 | ||||||
The Iyo Bank Ltd. | 4,000 | 41,767 | ||||||
The Joyo Bank Ltd. | 10,000 | 51,941 | ||||||
The Nishi-Nippon City Bank Ltd. | 10,000 | 27,018 | ||||||
The Shizuoka Bank Ltd. | 8,454 | 95,119 | ||||||
Yamaguchi Financial Group, Inc. | 3,274 | 30,853 | ||||||
15,027,407 | ||||||||
Capital Goods 2.2% | ||||||||
Aica Kogyo Co., Ltd. | 175,800 | 3,598,917 | ||||||
Aida Engineering Ltd. | 422,600 | 4,085,091 | ||||||
Amada Co., Ltd. | 6,000 | 51,615 | ||||||
Asahi Glass Co., Ltd. | 16,000 | 98,816 | ||||||
Chiyoda Corp. | 2,417 | 30,651 | ||||||
Daifuku Co., Ltd. | 349,000 | 4,487,922 | ||||||
Daikin Industries Ltd. | 56,600 | 3,256,388 | ||||||
Fanuc Corp. | 11,251 | 1,804,746 | ||||||
Fuji Electric Co., Ltd. | 8,000 | 35,863 | ||||||
Furukawa Electric Co., Ltd. | 10,000 | 23,178 | ||||||
Hino Motors Ltd. | 4,000 | 56,518 | ||||||
Hitachi Construction Machinery Co., Ltd. | 1,600 | 33,886 | ||||||
IHI Corp. | 20,000 | 84,686 | ||||||
Itochu Corp. | 197,100 | 2,369,958 | ||||||
JGC Corp. | 3,000 | 114,791 | ||||||
JTEKT Corp. | 3,300 | 42,366 | ||||||
Kajima Corp. | 13,000 | 55,176 | ||||||
Kanamoto Co., Ltd. | 136,000 | 3,673,540 | ||||||
Kawasaki Heavy Industries Ltd. | 23,000 | 89,873 | ||||||
Kinden Corp. | 2,000 | 21,966 | ||||||
Komatsu Ltd. | 14,600 | 320,329 | ||||||
Kubota Corp. | 17,000 | 251,713 | ||||||
Kurita Water Industries Ltd. | 1,700 | 37,101 | ||||||
LIXIL Group Corp. | 4,000 | 93,891 | ||||||
Mabuchi Motor Co., Ltd. | 400 | 21,267 | ||||||
Makita Corp. | 55,400 | 2,801,541 | ||||||
Marubeni Corp. | 25,445 | 199,220 | ||||||
Misumi Group, Inc. | 23,100 | 676,237 | ||||||
Mitsubishi Corp. | 21,349 | 431,913 | ||||||
Mitsubishi Electric Corp. | 30,000 | 329,759 | ||||||
Mitsubishi Heavy Industries Ltd. | 46,000 | 292,342 | ||||||
Mitsui & Co., Ltd. | 27,200 | 388,577 | ||||||
Nabtesco Corp. | 1,400 | 34,171 | ||||||
NGK Insulators Ltd. | 4,000 | 67,280 | ||||||
Nidec Corp. | 1,700 | 165,669 | ||||||
NSK Ltd. | 7,000 | 74,776 | ||||||
NTN Corp. * | 928,000 | 4,460,754 | ||||||
Obayashi Corp. | 10,000 | 64,071 | ||||||
Sanwa Holdings Corp. | 635,000 | 4,069,604 | ||||||
Shimizu Corp. | 9,000 | 46,156 | ||||||
SMC Corp. | 837 | 194,869 | ||||||
Sojitz Corp. | 18,800 | 36,506 | ||||||
Sumitomo Corp. | 17,400 | 226,431 | ||||||
Sumitomo Electric Industries Ltd. | 11,800 | 176,815 | ||||||
Sumitomo Heavy Industries Ltd. | 9,000 | 39,833 | ||||||
Tadano Ltd. | 204,000 | 2,805,258 | ||||||
Taisei Corp. | 15,000 | 76,954 | ||||||
The Japan Steel Works Ltd. | 5,000 | 27,933 | ||||||
THK Co., Ltd. | 157,100 | 3,429,237 | ||||||
Toshiba Corp. | 62,000 | 263,517 | ||||||
Toshiba Plant Systems & Services Corp. | 182,000 | 3,211,272 | ||||||
TOTO Ltd. | 4,313 | 60,996 | ||||||
Toyota Tsusho Corp. | 3,200 | 88,886 | ||||||
49,480,825 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
Dai Nippon Printing Co., Ltd. | 9,000 | 94,554 | ||||||
Meitec Corp. | 58,700 | 1,564,746 | ||||||
Park24 Co., Ltd. | 34,900 | 681,407 | ||||||
Secom Co., Ltd. | 62,200 | 3,747,077 | ||||||
Toppan Printing Co., Ltd. | 9,000 | 71,085 | ||||||
6,158,869 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Arnest One Corp. (a)* | 1,800 | 49,426 | ||||||
Asics Corp. | 2,200 | 38,787 | ||||||
Casio Computer Co., Ltd. | 3,600 | 34,457 | ||||||
Namco Bandai Holdings, Inc. | 2,900 | 54,666 | ||||||
Nikon Corp. | 5,300 | 97,977 | ||||||
Panasonic Corp. | 33,900 | 347,453 | ||||||
Rinnai Corp. | 500 | 38,700 | ||||||
Sankyo Co., Ltd. | 800 | 38,047 |
See financial notes 41
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sega Sammy Holdings, Inc. | 3,200 | 82,034 | ||||||
Sekisui Chemical Co., Ltd. | 7,000 | 81,330 | ||||||
Sekisui House Ltd. | 8,355 | 119,926 | ||||||
Sharp Corp. * | 15,419 | 45,611 | ||||||
Shimano, Inc. | 1,145 | 100,215 | ||||||
Sony Corp. | 15,500 | 270,393 | ||||||
Yamaha Corp. | 2,400 | 35,833 | ||||||
1,434,855 | ||||||||
Consumer Services 0.0% | ||||||||
Benesse Holdings, Inc. | 1,000 | 37,272 | ||||||
McDonald’s Holdings Co., Ltd. | 1,000 | 27,621 | ||||||
Oriental Land Co., Ltd. | 800 | 128,102 | ||||||
192,995 | ||||||||
Diversified Financials 1.0% | ||||||||
Acom Co., Ltd. * | 6,100 | 23,886 | ||||||
AEON Financial Service Co., Ltd. | 1,200 | 36,852 | ||||||
Century Tokyo Leasing Corp. | 25,000 | 790,879 | ||||||
Credit Saison Co., Ltd. | 2,600 | 71,163 | ||||||
Daiwa Securities Group, Inc. | 1,510,000 | 13,791,992 | ||||||
Japan Exchange Group, Inc. | 4,000 | 92,993 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 8,700 | 49,196 | ||||||
Nomura Holdings, Inc. | 56,200 | 415,151 | ||||||
ORIX Corp. | 422,100 | 7,311,229 | ||||||
SBI Holdings, Inc. | 3,336 | 40,372 | ||||||
22,623,713 | ||||||||
Energy 0.0% | ||||||||
Cosmo Oil Co., Ltd. * | 9,000 | 15,847 | ||||||
Idemitsu Kosan Co., Ltd. | 340 | 28,463 | ||||||
Inpex Corp. | 13,600 | 157,107 | ||||||
Japan Petroleum Exploration Co. | 400 | 16,286 | ||||||
JX Holdings, Inc. | 34,900 | 172,569 | ||||||
Showa Shell Sekiyu K.K. | 2,800 | 30,102 | ||||||
TonenGeneral Sekiyu K.K. | 4,367 | 40,567 | ||||||
460,941 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Aeon Co., Ltd. | 9,500 | 129,641 | ||||||
FamilyMart Co., Ltd. | 29,100 | 1,303,584 | ||||||
Lawson, Inc. | 29,729 | 2,384,084 | ||||||
Seven & i Holdings Co., Ltd. | 11,700 | 433,001 | ||||||
Sundrug Co., Ltd. | 103,500 | 5,159,377 | ||||||
Tsuruha Holdings, Inc. | 7,000 | 635,521 | ||||||
10,045,208 | ||||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Ajinomoto Co., Inc. | 10,000 | 139,930 | ||||||
Ariake Japan Co., Ltd. | 131,000 | 3,169,071 | ||||||
Asahi Group Holdings Ltd. | 6,100 | 164,971 | ||||||
Calbee, Inc. | 160,000 | 4,198,297 | ||||||
Coca-Cola West Co., Ltd. | 900 | 18,255 | ||||||
Japan Tobacco, Inc. | 16,800 | 607,886 | ||||||
Kikkoman Corp. | 3,000 | 54,677 | ||||||
Kirin Holdings Co., Ltd. | 14,000 | 204,617 | ||||||
Meiji Holdings Co., Ltd. | 1,000 | 55,902 | ||||||
Nippon Meat Packers, Inc. | 3,000 | 43,924 | ||||||
Nisshin Seifun Group, Inc. | 3,300 | 35,777 | ||||||
Nissin Food Holdings Co., Ltd. | 900 | 38,523 | ||||||
Suntory Beverage & Food Ltd. * | 1,900 | 62,552 | ||||||
Toyo Suisan Kaisha Ltd. | 1,365 | 43,411 | ||||||
Yakult Honsha Co., Ltd. | 1,500 | 76,190 | ||||||
Yamazaki Baking Co., Ltd. | 2,000 | 20,362 | ||||||
8,934,345 | ||||||||
Health Care Equipment & Services 1.3% | ||||||||
Alfresa Holdings Corp. | 600 | 32,794 | ||||||
Hogy Medical Co., Ltd. | 97,200 | 5,655,613 | ||||||
M3, Inc. | 1,000 | 2,738,577 | ||||||
Medipal Holdings Corp. | 2,200 | 29,664 | ||||||
Miraca Holdings, Inc. | 110,200 | 4,965,393 | ||||||
Nihon Kohden Corp. | 14,700 | 605,443 | ||||||
Olympus Corp. * | 334,800 | 10,710,722 | ||||||
Ship Healthcare Holdings, Inc. | 100,300 | 4,115,744 | ||||||
Suzuken Co., Ltd. | 1,100 | 39,721 | ||||||
Sysmex Corp. | 1,100 | 72,867 | ||||||
Terumo Corp. | 2,400 | 116,234 | ||||||
29,082,772 | ||||||||
Household & Personal Products 0.2% | ||||||||
Kao Corp. | 8,200 | 273,089 | ||||||
Pigeon Corp. | 79,400 | 4,096,500 | ||||||
Shiseido Co., Ltd. | 5,400 | 92,378 | ||||||
Unicharm Corp. | 1,800 | 115,612 | ||||||
4,577,579 | ||||||||
Insurance 0.0% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 7,810 | 201,946 | ||||||
NKSJ Holdings, Inc. | 5,900 | 152,722 | ||||||
Sony Financial Holdings, Inc. | 2,600 | 48,549 | ||||||
T&D Holdings, Inc. | 8,700 | 104,450 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 13,100 | 187,013 | ||||||
Tokio Marine Holdings, Inc. | 10,500 | 344,237 | ||||||
1,038,917 | ||||||||
Materials 0.2% | ||||||||
Nippon Steel & Sumitomo Metal Corp. | 115,000 | 379,563 | ||||||
Air Water, Inc. | 2,278 | 32,562 | ||||||
Asahi Kasei Corp. | 19,463 | 148,125 | ||||||
Daicel Corp. | 5,000 | 42,144 | ||||||
Daido Steel Co., Ltd. | 4,373 | 25,146 | ||||||
Hitachi Chemical Co., Ltd. | 1,600 | 24,547 | ||||||
Hitachi Metals Ltd. | 3,000 | 40,397 | ||||||
JFE Holdings, Inc. | 7,300 | 165,963 | ||||||
JSR Corp. | 2,700 | 51,430 | ||||||
Kaneka Corp. | 4,337 | 27,521 | ||||||
Kansai Paint Co., Ltd. | 3,373 | 45,323 | ||||||
Kobe Steel Ltd. * | 37,000 | 65,356 | ||||||
Kuraray Co., Ltd. | 5,200 | 61,055 | ||||||
Maruichi Steel Tube Ltd. | 700 | 17,094 | ||||||
Mitsubishi Chemical Holdings Corp. | 20,500 | 95,965 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 6,000 | 49,036 | ||||||
Mitsubishi Materials Corp. | 17,000 | 66,511 | ||||||
Mitsui Chemicals, Inc. | 12,000 | 31,900 | ||||||
Nitto Denko Corp. | 2,500 | 131,102 | ||||||
Oji Holdings Corp. | 13,000 | 59,410 | ||||||
Shin-Etsu Chemical Co., Ltd. | 6,424 | 363,226 | ||||||
Showa Denko K.K. | 22,000 | 29,831 | ||||||
Sumitomo Chemical Co., Ltd. | 24,000 | 87,897 | ||||||
Sumitomo Metal Mining Co., Ltd. | 8,000 | 110,805 | ||||||
Taiheiyo Cement Corp. | 16,000 | 67,859 | ||||||
Taiyo Nippon Sanso Corp. | 4,000 | 27,429 |
42 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Teijin Ltd. | 14,000 | 31,437 | ||||||
Toray Industries, Inc. | 23,000 | 143,721 | ||||||
Toyo Seikan Group Holdings Ltd. | 2,300 | 47,801 | ||||||
Ube Industries Ltd. | 15,000 | 31,048 | ||||||
Yamato Kogyo Co., Ltd. | 600 | 22,238 | ||||||
Zeon Corp. | 241,000 | 2,872,029 | ||||||
5,395,471 | ||||||||
Media 0.1% | ||||||||
Avex Group Holdings, Inc. | 71,700 | 1,816,846 | ||||||
Dentsu, Inc. | 3,600 | 136,016 | ||||||
Hakuhodo DY Holdings, Inc. | 3,500 | 27,070 | ||||||
Toho Co., Ltd. | 1,700 | 36,427 | ||||||
2,016,359 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Astellas Pharma, Inc. | 45,200 | 2,519,735 | ||||||
Chugai Pharmaceutical Co., Ltd. | 3,400 | 79,888 | ||||||
Daiichi Sankyo Co., Ltd. | 10,500 | 194,680 | ||||||
Dainippon Sumitomo Pharma Co., Ltd. | 2,400 | 32,294 | ||||||
Eisai Co., Ltd. | 3,800 | 149,272 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 900 | 48,700 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 4,000 | 44,180 | ||||||
Mitsubishi Tanabe Pharma Corp. | 3,400 | 47,953 | ||||||
Ono Pharmaceutical Co., Ltd. | 1,300 | 98,293 | ||||||
Otsuka Holdings Co., Ltd. | 5,400 | 153,803 | ||||||
Santen Pharmaceutical Co., Ltd. | 1,100 | 55,842 | ||||||
Sawai Pharmaceutical Co., Ltd. | 8,800 | 643,309 | ||||||
Shionogi & Co., Ltd. | 4,500 | 99,578 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. | 600 | 42,129 | ||||||
Takeda Pharmaceutical Co., Ltd. | 12,200 | 581,385 | ||||||
Tsumura & Co. | 900 | 28,287 | ||||||
4,819,328 | ||||||||
Real Estate 0.1% | ||||||||
Aeon Mall Co., Ltd. | 2,100 | 59,642 | ||||||
Daito Trust Construction Co., Ltd. | 1,100 | 112,314 | ||||||
Daiwa House Industry Co., Ltd. | 9,000 | 180,304 | ||||||
Hulic Co., Ltd. | 3,700 | 58,876 | ||||||
Japan Prime Realty Investment Corp. | 11 | 36,554 | ||||||
Japan Real Estate Investment Corp. | 9 | 102,824 | ||||||
Japan Retail Fund Investment Corp. | 34 | 68,861 | ||||||
Mitsubishi Estate Co., Ltd. | 19,255 | 550,300 | ||||||
Mitsui Fudosan Co., Ltd. | 13,000 | 430,637 | ||||||
Nippon Building Fund, Inc. | 11 | 136,080 | ||||||
Nippon Prologis REIT, Inc. | 4 | 39,945 | ||||||
Nomura Real Estate Holdings, Inc. | 2,000 | 50,603 | ||||||
Nomura Real Estate Office Fund, Inc. | 4 | 19,760 | ||||||
NTT Urban Development Corp. | 1,700 | 21,701 | ||||||
Sumitomo Realty & Development Co., Ltd. | 5,495 | 260,004 | ||||||
Tokyo Tatemono Co., Ltd. | 8,000 | 75,104 | ||||||
Tokyu Fudosan Holdings Corp. * | 7,000 | 68,768 | ||||||
United Urban Investment Corp. | 28 | 42,735 | ||||||
2,315,012 | ||||||||
Retailing 0.5% | ||||||||
ABC-Mart, Inc. | 400 | 20,004 | ||||||
Don Quijote Co., Ltd. | 51,100 | 3,401,546 | ||||||
Fast Retailing Co., Ltd. | 800 | 269,289 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 5,600 | 84,869 | ||||||
J. Front Retailing Co., Ltd. | 7,000 | 54,470 | ||||||
Marui Group Co., Ltd. | 3,300 | 31,590 | ||||||
Nitori Holdings Co., Ltd. | 550 | 51,593 | ||||||
Oisix, Inc. * | 43,600 | 1,729,370 | ||||||
Rakuten, Inc. | 11,400 | 148,538 | ||||||
Ryohin Keikaku Co., Ltd. | 23,400 | 2,334,282 | ||||||
Sanrio Co., Ltd. | 700 | 38,466 | ||||||
Seria Co., Ltd. | 67,700 | 2,260,900 | ||||||
Shimamura Co., Ltd. | 342 | 38,447 | ||||||
Start Today Co., Ltd. | 26,800 | 747,186 | ||||||
Takashimaya Co., Ltd. | 4,000 | 38,164 | ||||||
United Arrows Ltd. | 14,400 | 620,437 | ||||||
USS Co., Ltd. | 3,300 | 48,327 | ||||||
Yamada Denki Co., Ltd. | 14,200 | 39,831 | ||||||
11,957,309 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Advantest Corp. | 2,200 | 26,329 | ||||||
Rohm Co., Ltd. | 34,800 | 1,428,458 | ||||||
Sumco Corp. | 1,700 | 15,448 | ||||||
Tokyo Electron Ltd. | 2,700 | 148,156 | ||||||
1,618,391 | ||||||||
Software & Services 0.4% | ||||||||
Dena Co., Ltd. | 1,500 | 32,685 | ||||||
Digital Garage, Inc. | 104,000 | 2,735,696 | ||||||
Dwango Co., Ltd. | 112,400 | 2,048,891 | ||||||
Enigmo, Inc. * | 26,900 | 1,914,671 | ||||||
Fujitsu Ltd. * | 29,000 | 124,590 | ||||||
Gree, Inc. | 1,400 | 12,031 | ||||||
GungHo Online Entertainment, Inc. * | 40 | 25,242 | ||||||
Itochu Techno-Solutions Corp. | 400 | 15,692 | ||||||
Konami Corp. | 1,400 | 33,834 | ||||||
Nexon Co., Ltd. | 75,200 | 878,906 | ||||||
Nintendo Co., Ltd. | 1,600 | 179,926 | ||||||
Nomura Research Institute Ltd. | 1,500 | 50,343 | ||||||
NTT Data Corp. | 1,900 | 63,165 | ||||||
Oracle Corp., Japan | 600 | 23,690 | ||||||
Otsuka Corp. | 5,146 | 667,453 | ||||||
Trend Micro, Inc. | 1,600 | 59,511 | ||||||
Yahoo Japan Corp. | 324,900 | 1,515,892 | ||||||
10,382,218 | ||||||||
Technology Hardware & Equipment 1.5% | ||||||||
Brother Industries Ltd. | 3,500 | 39,768 | ||||||
Canon, Inc. | 542,260 | 17,111,927 | ||||||
Citizen Holdings Co., Ltd. | 3,900 | 27,825 | ||||||
FUJIFILM Holdings Corp. | 7,200 | 176,139 | ||||||
Hamamatsu Photonics K.K. | 1,000 | 37,419 | ||||||
Hirose Electric Co., Ltd. | 500 | 76,285 | ||||||
Hitachi High-Technologies Corp. | 900 | 20,700 | ||||||
Hitachi Ltd. | 73,000 | 510,642 | ||||||
Horiba Ltd. | 87,300 | 3,189,980 | ||||||
Hoya Corp. | 20,000 | 479,587 | ||||||
Ibiden Co., Ltd. | 1,800 | 31,204 | ||||||
Japan Aviation Electronics Industry Ltd. | 298,000 | 3,000,135 |
See financial notes 43
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Keyence Corp. | 6,600 | 2,828,692 | ||||||
Konica Minolta, Inc. | 8,000 | 66,248 | ||||||
Kyocera Corp. | 5,200 | 270,039 | ||||||
Murata Manufacturing Co., Ltd. | 3,124 | 250,763 | ||||||
NEC Corp. | 39,000 | 87,601 | ||||||
Nippon Electric Glass Co., Ltd. | 6,000 | 30,862 | ||||||
Omron Corp. | 38,300 | 1,461,574 | ||||||
Ricoh Co., Ltd. | 10,000 | 105,608 | ||||||
Shimadzu Corp. | 4,000 | 39,170 | ||||||
TDK Corp. | 1,900 | 80,750 | ||||||
Yaskawa Electric Corp. | 238,321 | 3,086,437 | ||||||
Yokogawa Electric Corp. | 3,200 | 41,820 | ||||||
33,051,175 | ||||||||
Telecommunication Services 0.2% | ||||||||
KDDI Corp. | 8,200 | 444,083 | ||||||
Nippon Telegraph & Telephone Corp. | 6,800 | 353,466 | ||||||
NTT DoCoMo, Inc. | 23,700 | 376,001 | ||||||
Softbank Corp. | 41,700 | 3,114,109 | ||||||
4,287,659 | ||||||||
Transportation 0.1% | ||||||||
ANA Holdings, Inc. | 19,000 | 39,696 | ||||||
Central Japan Railway Co. | 2,200 | 285,278 | ||||||
East Japan Railway Co. | 5,238 | 455,028 | ||||||
Hankyu Hanshin Holdings, Inc. | 17,000 | 95,350 | ||||||
Japan Airlines Co., Ltd. | 900 | 52,607 | ||||||
Kamigumi Co., Ltd. | 4,000 | 34,793 | ||||||
Keikyu Corp. | 7,000 | 65,892 | ||||||
Keio Corp. | 9,000 | 62,356 | ||||||
Keisei Electric Railway Co., Ltd. | 4,266 | 44,056 | ||||||
Kintetsu Corp. | 26,000 | 95,684 | ||||||
Mitsubishi Logistics Corp. | 2,000 | 27,794 | ||||||
Mitsui O.S.K. Lines, Ltd. | 17,000 | 71,958 | ||||||
Nippon Express Co., Ltd. | 13,000 | 65,280 | ||||||
Nippon Yusen K.K. | 27,000 | 82,498 | ||||||
Odakyu Electric Railway Co., Ltd. | 10,000 | 96,508 | ||||||
Tobu Railway Co., Ltd. | 16,000 | 82,942 | ||||||
Tokyu Corp. | 17,000 | 115,771 | ||||||
West Japan Railway Co. | 2,700 | 121,068 | ||||||
Yamato Holdings Co., Ltd. | 6,000 | 129,035 | ||||||
2,023,594 | ||||||||
Utilities 0.1% | ||||||||
Chubu Electric Power Co., Inc. | 9,931 | 147,009 | ||||||
Electric Power Development Co., Ltd. | 1,900 | 60,720 | ||||||
Hokkaido Electric Power Co., Inc. * | 2,700 | 34,782 | ||||||
Hokuriku Electric Power Co. | 2,500 | 35,608 | ||||||
Kyushu Electric Power Co., Inc. * | 6,400 | 90,111 | ||||||
Osaka Gas Co., Ltd. | 30,000 | 126,362 | ||||||
Shikoku Electric Power Co., Inc. * | 2,700 | 48,193 | ||||||
The Chugoku Electric Power Co., Inc. | 4,500 | 68,979 | ||||||
The Kansai Electric Power Co., Inc. * | 11,700 | 148,087 | ||||||
Toho Gas Co., Ltd. | 6,330 | 33,008 | ||||||
Tohoku Electric Power Co., Inc. * | 6,800 | 82,308 | ||||||
Tokyo Electric Power Co., Inc. * | 21,700 | 115,811 | ||||||
Tokyo Gas Co., Ltd. | 37,000 | 200,763 | ||||||
1,191,741 | ||||||||
287,015,712 | ||||||||
Luxembourg 0.3% | ||||||||
Energy 0.3% | ||||||||
Subsea 7 S.A. | 4,220 | 89,248 | ||||||
Tenaris S.A. ADR | 117,425 | 5,496,664 | ||||||
5,585,912 | ||||||||
Materials 0.0% | ||||||||
ArcelorMittal | 15,267 | 240,465 | ||||||
Media 0.0% | ||||||||
SES S.A. | 4,524 | 131,585 | ||||||
Telecommunication Services 0.0% | ||||||||
Millicom International Cellular S.A. SDR | 976 | 90,042 | ||||||
6,048,004 | ||||||||
Malaysia 0.2% | ||||||||
Transportation 0.2% | ||||||||
Malaysia Airports Holdings Bhd | 1,513,800 | 4,034,497 | ||||||
Mexico 0.2% | ||||||||
Diversified Financials 0.2% | ||||||||
Compartamos S.A.B. de C.V. | 1,982,690 | 3,862,881 | ||||||
Netherlands 3.5% | ||||||||
Capital Goods 1.8% | ||||||||
CNH Industrial N.V. * | 1,078,262 | 12,751,522 | ||||||
European Aeronautic Defence & Space Co., N.V. | 9,176 | 628,781 | ||||||
Koninklijke Boskalis Westminster N.V. | 354,813 | 17,053,206 | ||||||
Koninklijke Philips N.V. | 272,654 | 9,635,783 | ||||||
OCI * | 1,395 | 53,640 | ||||||
40,122,932 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Randstad Holding N.V. | 1,794 | 110,490 | ||||||
Diversified Financials 0.0% | ||||||||
ING Groep N.V. CVA * | 59,758 | 759,387 | ||||||
Energy 0.6% | ||||||||
Core Laboratories N.V. | 26,100 | 4,886,442 | ||||||
Fugro N.V. CVA | 1,037 | 64,834 | ||||||
Koninklijke Vopak N.V. | 1,054 | 64,824 | ||||||
Schlumberger Ltd. | 75,725 | 7,096,947 | ||||||
12,113,047 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Koninklijke Ahold N.V. | 340,755 | 6,476,573 | ||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Heineken Holding N.V. | 93,259 | 5,923,329 | ||||||
Heineken N.V. | 3,567 | 245,792 | ||||||
Unilever N.V. | 66,975 | 2,660,247 | ||||||
Unilever N.V. CVA | 25,122 | 995,973 | ||||||
9,825,341 |
44 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Insurance 0.0% | ||||||||
Aegon N.V. | 26,811 | 213,332 | ||||||
Delta Lloyd N.V. | 3,129 | 66,340 | ||||||
279,672 | ||||||||
Materials 0.4% | ||||||||
Akzo Nobel N.V. | 117,000 | 8,493,541 | ||||||
James Hardie Industries plc CDI | 6,557 | 67,821 | ||||||
Koninklijke DSM N.V. | 2,431 | 183,766 | ||||||
8,745,128 | ||||||||
Media 0.0% | ||||||||
Reed Elsevier N.V. | 10,856 | 218,255 | ||||||
Wolters Kluwer N.V. | 4,864 | 131,770 | ||||||
350,025 | ||||||||
Real Estate 0.0% | ||||||||
Corio N.V. | 1,077 | 46,882 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
ASML Holding N.V. | 5,497 | 520,498 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Gemalto N.V. | 1,173 | 131,657 | ||||||
Telecommunication Services 0.0% | ||||||||
Koninklijke (Royal) KPN N.V. * | 46,305 | 147,997 | ||||||
Ziggo N.V. | 2,466 | 105,716 | ||||||
253,713 | ||||||||
Transportation 0.0% | ||||||||
TNT Express N.V. | 5,312 | 48,974 | ||||||
79,784,319 | ||||||||
New Zealand 0.5% | ||||||||
Consumer Services 0.2% | ||||||||
SKYCITY Entertainment Group Ltd. | 1,223,525 | 3,929,449 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Ryman Healthcare Ltd. | 114,901 | 716,260 | ||||||
Materials 0.0% | ||||||||
Fletcher Building Ltd. | 10,175 | 83,970 | ||||||
Telecommunication Services 0.0% | ||||||||
Telecom Corp. of New Zealand Ltd. | 28,860 | 56,001 | ||||||
Transportation 0.3% | ||||||||
Auckland International Airport Ltd. | 2,113,476 | 5,982,897 | ||||||
Utilities 0.0% | ||||||||
Contact Energy Ltd. | 5,211 | 22,597 | ||||||
10,791,174 | ||||||||
Nigeria 0.0% | ||||||||
Banks 0.0% | ||||||||
Guaranty Trust Bank plc GDR - Reg’d | 80,383 | 626,987 | ||||||
Norway 0.7% | ||||||||
Banks 0.0% | ||||||||
DnB A.S.A. | 15,192 | 269,301 | ||||||
Energy 0.3% | ||||||||
Aker Solutions A.S.A. | 2,465 | 34,055 | ||||||
Farstad Shipping A.S.A. (b) | 94,566 | 2,147,260 | ||||||
Fred Olsen Energy A.S.A. | 72,066 | 3,028,478 | ||||||
Seadrill Ltd. | 6,042 | 279,468 | ||||||
Statoil A.S.A. | 17,457 | 413,054 | ||||||
TGS Nopec Geophysical Co. A.S.A. | 13,351 | 367,201 | ||||||
6,269,516 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Orkla A.S.A. | 11,571 | 93,796 | ||||||
Insurance 0.0% | ||||||||
Gjensidige Forsikring A.S.A. | 2,999 | 55,977 | ||||||
Materials 0.0% | ||||||||
Norsk Hydro A.S.A. | 13,961 | 62,305 | ||||||
Yara International A.S.A. | 2,941 | 126,661 | ||||||
Yara International A.S.A. ADR | 11,100 | 481,074 | ||||||
670,040 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Algeta A.S.A. * | 12,215 | 485,272 | ||||||
Software & Services 0.1% | ||||||||
Opera Software A.S.A. | 261,050 | 3,159,611 | ||||||
Telecommunication Services 0.3% | ||||||||
Telenor A.S.A. | 235,895 | 5,667,995 | ||||||
16,671,508 | ||||||||
Philippines 0.1% | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Puregold Price Club, Inc. | 2,651,300 | 2,768,064 | ||||||
Poland 0.0% | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Eurocash S.A. | 44,853 | 689,002 | ||||||
Portugal 0.0% | ||||||||
Banks 0.0% | ||||||||
Banco Espirito Santo, S.A. - Reg’d * | 30,126 | 39,585 | ||||||
Energy 0.0% | ||||||||
Galp Energia, SGPS, S.A. | 6,040 | 102,278 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Jeronimo Martins, SGPS, S.A. | 4,439 | 81,751 | ||||||
Telecommunication Services 0.0% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d | 10,082 | 45,445 | ||||||
Utilities 0.0% | ||||||||
EDP - Energias de Portugal S.A. | 28,618 | 105,343 | ||||||
374,402 | ||||||||
Republic of Korea 1.2% | ||||||||
Automobiles & Components 0.0% | ||||||||
Halla Visteon Climate Control Corp. | 16,300 | 609,500 |
See financial notes 45
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 0.3% | ||||||||
Hyundai Rotem Co., Ltd. (a)* | 61,560 | 2,115,354 | ||||||
Sung Kwang Bend Co., Ltd. | 160,170 | 4,384,843 | ||||||
6,500,197 | ||||||||
Consumer Services 0.2% | ||||||||
Hotel Shilla Co., Ltd. | 84,130 | 5,434,663 | ||||||
Retailing 0.2% | ||||||||
GS Home Shopping, Inc. | 2,876 | 663,181 | ||||||
Kolao Holdings | 116,638 | 3,413,815 | ||||||
4,076,996 | ||||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
Samsung Electronics Co., Ltd. | 2,680 | 3,695,876 | ||||||
Seoul Semiconductor Co., Ltd. | 89,220 | 3,712,430 | ||||||
7,408,306 | ||||||||
Software & Services 0.1% | ||||||||
NAVER Corp. | 3,319 | 1,862,513 | ||||||
Telecommunication Services 0.1% | ||||||||
SK Telecom Co., Ltd. | 10,269 | 2,237,823 | ||||||
28,129,998 | ||||||||
Russia 0.2% | ||||||||
Banks 0.0% | ||||||||
TCS Group Holding plc GDR (c)* | 35,761 | 613,122 | ||||||
Software & Services 0.2% | ||||||||
Mail.ru Group Ltd. GDR | 25,798 | 951,430 | ||||||
QIWI plc ADR | 49,860 | 2,018,333 | ||||||
Yandex N.V. Class A * | 23,654 | 871,887 | ||||||
3,841,650 | ||||||||
4,454,772 | ||||||||
Singapore 3.2% | ||||||||
Banks 0.1% | ||||||||
DBS Group Holdings Ltd. | 26,316 | 354,778 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 40,000 | 334,620 | ||||||
United Overseas Bank Ltd. | 20,000 | 334,932 | ||||||
1,024,330 | ||||||||
Capital Goods 0.1% | ||||||||
Keppel Corp., Ltd. | 22,000 | 191,979 | ||||||
SembCorp Industries Ltd. | 15,000 | 64,131 | ||||||
SembCorp Marine Ltd. | 13,000 | 47,029 | ||||||
Singapore Technologies Engineering Ltd. | 820,000 | 2,780,457 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 29,000 | 27,510 | ||||||
3,111,106 | ||||||||
Consumer Services 0.0% | ||||||||
Genting Singapore plc | 96,000 | 117,456 | ||||||
Diversified Financials 0.0% | ||||||||
Singapore Exchange Ltd. | 13,000 | 76,695 | ||||||
Energy 0.5% | ||||||||
Ezion Holdings Ltd. | 2,191,000 | 3,943,493 | ||||||
Ezra Holdings Ltd. * | 5,292,000 | 5,703,453 | ||||||
KrisEnergy Ltd. * | 2,261,000 | 2,242,194 | ||||||
11,889,140 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Olam International Ltd. | 22,000 | 27,218 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Golden Agri-Resources Ltd. | 117,000 | 56,495 | ||||||
Wilmar International Ltd. | 29,000 | 80,665 | ||||||
137,160 | ||||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. | 26,000 | 88,938 | ||||||
Real Estate 0.9% | ||||||||
Ascendas REIT | 3,903,000 | 7,420,900 | ||||||
CapitaCommercial Trust | 30,000 | 35,499 | ||||||
CapitaLand Ltd. | 38,000 | 95,209 | ||||||
CapitaMall Trust | 7,173,200 | 11,650,664 | ||||||
CapitaMalls Asia Ltd. | 20,000 | 32,479 | ||||||
City Developments Ltd. | 8,000 | 66,218 | ||||||
Global Logistic Properties Ltd. | 45,000 | 111,703 | ||||||
Keppel Land Ltd. | 11,000 | 32,794 | ||||||
UOL Group Ltd. | 7,000 | 37,050 | ||||||
19,482,516 | ||||||||
Retailing 0.1% | ||||||||
Jardine Cycle & Carriage Ltd. | 2,000 | 58,942 | ||||||
Osim International Ltd. | 1,354,000 | 2,299,222 | ||||||
2,358,164 | ||||||||
Telecommunication Services 0.4% | ||||||||
Singapore Telecommunications Ltd. | 121,000 | 367,361 | ||||||
StarHub Ltd. | 2,366,000 | 8,460,269 | ||||||
8,827,630 | ||||||||
Transportation 1.0% | ||||||||
ComfortDelGro Corp., Ltd. | 28,000 | 43,237 | ||||||
Hutchison Port Holdings Trust, Class U | 78,000 | 56,924 | ||||||
SATS Ltd. | 3,321,000 | 9,085,876 | ||||||
SIA Engineering Co., Ltd. (b) | 2,635,000 | 10,704,691 | ||||||
Singapore Airlines Ltd. | 8,331 | 69,740 | ||||||
SMRT Corp., Ltd. | 1,379,553 | 1,442,793 | ||||||
21,403,261 | ||||||||
Utilities 0.1% | ||||||||
Hyflux Ltd. | 3,057,000 | 2,850,816 | ||||||
71,394,430 | ||||||||
South Africa 0.3% | ||||||||
Capital Goods 0.1% | ||||||||
Bidvest Group Ltd. | 70,940 | 1,890,164 | ||||||
Diversified Financials 0.1% | ||||||||
Coronation Fund Managers Ltd. | 68,526 | 558,887 | ||||||
FirstRand Ltd. | 585,573 | 2,102,200 | ||||||
2,661,087 | ||||||||
Media 0.1% | ||||||||
Naspers Ltd., N Shares | 15,704 | 1,469,953 | ||||||
6,021,204 |
46 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Spain 1.1% | ||||||||
Banks 0.2% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. (a) | 85,427 | 998,378 | ||||||
Banco de Sabadell S.A. | 49,339 | 126,422 | ||||||
Banco Popular Espanol S.A. * | 19,576 | 111,042 | ||||||
Banco Santander S.A. | 170,914 | 1,515,197 | ||||||
Bankia S.A. * | 74,028 | 110,764 | ||||||
Bankinter S.A. | 172,971 | 1,054,625 | ||||||
CaixaBank (a) | 17,550 | 90,964 | ||||||
4,007,392 | ||||||||
Capital Goods 0.0% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 2,400 | 78,732 | ||||||
Ferrovial S.A. | 5,945 | 113,322 | ||||||
Zardoya Otis S.A. | 2,289 | 39,821 | ||||||
231,875 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Prosegur Cia de Seguridad S.A. - Reg’d | 679,458 | 4,031,319 | ||||||
Consumer Services 0.2% | ||||||||
Melia Hotels International S.A. | 448,706 | 5,080,208 | ||||||
Energy 0.2% | ||||||||
Repsol S.A. | 183,529 | 4,920,567 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 8,853 | 80,712 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 11,544 | 46,357 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Grifols S.A. | 2,426 | 99,433 | ||||||
Retailing 0.1% | ||||||||
Inditex S.A. | 12,725 | 2,089,940 | ||||||
Software & Services 0.1% | ||||||||
Amadeus IT Holding S.A., A Shares | 5,686 | 210,964 | ||||||
Indra Sistemas S.A. | 130,800 | 2,156,998 | ||||||
2,367,962 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telefonica S.A. * | 63,206 | 1,112,382 | ||||||
Transportation 0.0% | ||||||||
Abertis Infraestructuras S.A. (a) | 5,947 | 127,414 | ||||||
International Consolidated Airlines Group S.A. * | 13,910 | 77,250 | ||||||
204,664 | ||||||||
Utilities 0.0% | ||||||||
Acciona S.A. | 381 | 24,152 | ||||||
Enagas S.A. | 3,153 | 84,185 | ||||||
Gas Natural SDG S.A. | 5,204 | 122,742 | ||||||
Iberdrola S.A. | 75,547 | 474,197 | ||||||
Red Electrica Corp. S.A. | 1,623 | 101,056 | ||||||
806,332 | ||||||||
25,079,143 | ||||||||
Sweden 2.8% | ||||||||
Banks 0.1% | ||||||||
Nordea Bank AB | 43,456 | 555,868 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 24,515 | 296,510 | ||||||
Svenska Handelsbanken AB, A Shares | 7,786 | 352,134 | ||||||
Swedbank AB, A Shares | 13,677 | 355,962 | ||||||
1,560,474 | ||||||||
Capital Goods 1.1% | ||||||||
Alfa Laval AB | 5,063 | 115,491 | ||||||
Assa Abloy AB, B Shares | 5,013 | 248,731 | ||||||
Atlas Copco AB, A Shares | 187,894 | 5,205,999 | ||||||
Atlas Copco AB, B Shares | 309,650 | 7,694,398 | ||||||
Indutrade AB | 68,460 | 2,678,160 | ||||||
Sandvik AB | 17,264 | 233,272 | ||||||
Scania AB, B Shares | 4,727 | 94,745 | ||||||
Skanska AB, B Shares | 5,997 | 115,468 | ||||||
SKF AB, B Shares | 280,016 | 7,409,033 | ||||||
Volvo AB, B Shares | 22,768 | 292,225 | ||||||
24,087,522 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
AF AB, B Shares | 168,963 | 5,337,633 | ||||||
Intrum Justitia AB | 122,479 | 3,256,639 | ||||||
Loomis AB, Class B | 120,800 | 2,895,671 | ||||||
Securitas AB, B Shares | 4,695 | 53,537 | ||||||
11,543,480 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Electrolux AB, B Shares | 3,606 | 88,942 | ||||||
Husqvarna AB, B Shares | 6,685 | 39,278 | ||||||
128,220 | ||||||||
Diversified Financials 0.0% | ||||||||
Industrivarden AB, C Shares | 1,765 | 31,419 | ||||||
Investment AB Kinnevik, B Shares | 3,776 | 138,972 | ||||||
Investor AB, B Shares | 7,103 | 227,738 | ||||||
Ratos AB, B Shares | 2,873 | 24,863 | ||||||
422,992 | ||||||||
Energy 0.0% | ||||||||
Lundin Petroleum AB * | 3,337 | 68,770 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
AarhusKarlshamn AB | 100,340 | 5,936,463 | ||||||
Swedish Match AB | 3,051 | 100,600 | ||||||
6,037,063 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Elekta AB, B Shares | 5,993 | 88,512 | ||||||
Getinge AB, B Shares | 3,001 | 95,072 | ||||||
183,584 | ||||||||
Household & Personal Products 0.0% | ||||||||
Svenska Cellulosa AB, SCA B Shares | 9,015 | 255,586 | ||||||
Materials 0.2% | ||||||||
Boliden AB | 4,101 | 58,247 | ||||||
Hexpol AB | 68,920 | 5,178,197 | ||||||
5,236,444 |
See financial notes 47
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Retailing 0.5% | ||||||||
Hennes & Mauritz AB, B Shares | 245,713 | 10,617,709 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Fingerprint Cards AB, B Shares * | 252,370 | 2,079,896 | ||||||
Hexagon AB, B Shares | 3,800 | 113,942 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 47,070 | 563,014 | ||||||
2,756,852 | ||||||||
Telecommunication Services 0.0% | ||||||||
Tele2 AB, B Shares | 4,754 | 57,302 | ||||||
TeliaSonera AB | 36,468 | 301,553 | ||||||
358,855 | ||||||||
63,257,551 | ||||||||
Switzerland 7.4% | ||||||||
Banks 0.0% | ||||||||
Banque Cantonale Vaudoise - Reg’d | 44 | 24,449 | ||||||
Capital Goods 0.4% | ||||||||
ABB Ltd. - Reg’d * | 33,956 | 865,116 | ||||||
Burckhardt Compression Holding AG | 14,934 | 5,982,817 | ||||||
Geberit AG - Reg’d | 8,237 | 2,460,924 | ||||||
Schindler Holding AG | 720 | 102,048 | ||||||
Schindler Holding AG - Reg’d | 323 | 45,967 | ||||||
Sulzer AG - Reg’d | 360 | 56,318 | ||||||
9,513,190 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Adecco S.A. - Reg’d * | 108,487 | 8,000,235 | ||||||
SGS S.A. - Reg’d | 86 | 201,219 | ||||||
8,201,454 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Cie Financiere Richemont S.A. | 107,176 | 10,958,712 | ||||||
The Swatch Group AG - Bearer Shares | 479 | 305,933 | ||||||
The Swatch Group AG - Reg’d | 651 | 72,432 | ||||||
11,337,077 | ||||||||
Diversified Financials 1.8% | ||||||||
Cembra Money Bank AG * | 51,930 | 3,219,334 | ||||||
Credit Suisse Group AG - Reg’d * | 1,119,755 | 34,833,276 | ||||||
Julius Baer Group Ltd. * | 3,221 | 158,008 | ||||||
Pargesa Holding S.A. | 405 | 32,225 | ||||||
Partners Group Holding AG | 8,841 | 2,291,789 | ||||||
UBS AG - Reg’d * | 56,189 | 1,086,755 | ||||||
41,621,387 | ||||||||
Energy 0.5% | ||||||||
Noble Corp. | 156,750 | 5,909,475 | ||||||
Transocean Ltd. | 5,427 | 256,307 | ||||||
Weatherford International Ltd. * | 286,600 | 4,711,704 | ||||||
10,877,486 | ||||||||
Food, Beverage & Tobacco 1.0% | ||||||||
Aryzta AG * | 1,308 | 97,580 | ||||||
Barry Callebaut AG - Reg’d * | 27 | 28,210 | ||||||
Coca-Cola HBC AG CDI * | 3,294 | 94,737 | ||||||
Lindt & Spruengli AG | 15 | 63,316 | ||||||
Lindt & Spruengli AG - Reg’d | 2 | 100,601 | ||||||
Nestle S.A. - Reg’d | 209,023 | 15,088,097 | ||||||
Nestle S.A. - Reg’d ADR | 107,312 | 7,770,462 | ||||||
23,243,003 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Sonova Holding AG - Reg’d * | 737 | 95,914 | ||||||
Insurance 0.1% | ||||||||
Baloise Holding AG - Reg’d | 712 | 82,716 | ||||||
Swiss Life Holding AG - Reg’d * | 457 | 90,614 | ||||||
Swiss Re AG * | 5,505 | 483,243 | ||||||
Zurich Insurance Group AG * | 2,278 | 629,464 | ||||||
1,286,037 | ||||||||
Materials 1.0% | ||||||||
EMS-Chemie Holding AG - Reg’d | 124 | 45,154 | ||||||
Givaudan S.A. - Reg’d * | 2,091 | 2,965,432 | ||||||
Glencore Xstrata plc * | 912,345 | 4,965,180 | ||||||
Holcim Ltd. - Reg’d * | 192,136 | 14,290,969 | ||||||
Sika AG | 35 | 110,336 | ||||||
Syngenta AG - Reg’d | 1,451 | 585,647 | ||||||
22,962,718 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.1% | ||||||||
Actelion Ltd. - Reg’d * | 1,659 | 128,358 | ||||||
Lonza Group AG - Reg’d * | 754 | 67,304 | ||||||
Novartis AG - Reg’d | 105,416 | 8,182,661 | ||||||
Novartis AG ADR | 45,375 | 3,518,831 | ||||||
Roche Holding AG | 41,743 | 11,543,417 | ||||||
Tecan Group AG - Reg’d | 20,020 | 2,089,723 | ||||||
25,530,294 | ||||||||
Real Estate 0.0% | ||||||||
Swiss Prime Site AG - Reg’d * | 883 | 66,859 | ||||||
Telecommunication Services 0.0% | ||||||||
Swisscom AG - Reg’d | 365 | 186,170 | ||||||
Transportation 0.6% | ||||||||
Kuehne & Nagel International AG - Reg’d | 97,610 | 12,331,161 | ||||||
167,277,199 | ||||||||
Taiwan 1.2% | ||||||||
Capital Goods 0.4% | ||||||||
AirTac International Group | 675,410 | 4,887,608 | ||||||
Teco Electric & Machinery Co., Ltd. | 4,010,000 | 4,276,745 | ||||||
9,164,353 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Eclat Textile Co., Ltd. | 510,000 | 5,608,715 | ||||||
Makalot Industrial Co., Ltd. | 731,000 | 4,412,822 | ||||||
10,021,537 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
St. Shine Optical Co., Ltd. | 21,484 | 632,753 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. ADR | 172,777 | 3,180,825 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Everlight Electronics Co., Ltd. | 1,553,000 | 2,934,280 | ||||||
25,933,748 |
48 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Thailand 0.3% | ||||||||
Banks 0.1% | ||||||||
Kasikornbank PCL | 343,100 | 2,145,009 | ||||||
Consumer Services 0.1% | ||||||||
Minor International PCL | 2,300,800 | 2,051,316 | ||||||
Telecommunication Services 0.1% | ||||||||
Jasmine International PCL | 7,168,200 | 1,946,066 | ||||||
6,142,391 | ||||||||
Turkey 0.1% | ||||||||
Transportation 0.1% | ||||||||
Pegasus Hava Tasimaciligi A/S * | 148,580 | 2,808,093 | ||||||
United Kingdom 19.4% | ||||||||
Automobiles & Components 0.0% | ||||||||
GKN plc | 23,980 | 141,260 | ||||||
Banks 1.2% | ||||||||
Barclays plc (a) | 232,977 | 980,241 | ||||||
HSBC Holdings plc (g) | 288,604 | 3,163,486 | ||||||
HSBC Holdings plc (g) | 121,200 | 1,325,297 | ||||||
Lloyds Banking Group plc * | 16,188,444 | 20,021,810 | ||||||
Royal Bank of Scotland Group plc * | 31,558 | 185,861 | ||||||
Standard Chartered plc | 37,199 | 893,147 | ||||||
26,569,842 | ||||||||
Capital Goods 4.2% | ||||||||
Ashtead Group plc | 387,900 | 4,076,110 | ||||||
BAE Systems plc | 49,054 | 357,824 | ||||||
Bodycote plc | 917,017 | 9,666,294 | ||||||
Bunzl plc | 122,889 | 2,710,809 | ||||||
Cobham plc | 745,626 | 3,443,529 | ||||||
Fenner plc | 583,722 | 3,739,871 | ||||||
Grafton Group plc (a) | 451,150 | 4,285,027 | ||||||
IMI plc | 138,758 | 3,375,835 | ||||||
Interserve plc | 557,983 | 5,499,769 | ||||||
Invensys plc | 9,740 | 78,160 | ||||||
Keller Group plc | 237,116 | 3,995,814 | ||||||
Meggitt plc | 301,194 | 2,765,014 | ||||||
Melrose Industries plc | 18,513 | 94,911 | ||||||
Rolls-Royce Holdings plc * | 276,063 | 5,085,907 | ||||||
Rotork plc | 386,003 | 17,685,214 | ||||||
Senior plc | 105,744 | 504,637 | ||||||
Smiths Group plc | 350,031 | 8,056,097 | ||||||
Spirax-Sarco Engineering plc | 191,866 | 8,972,319 | ||||||
The Weir Group plc | 3,386 | 122,296 | ||||||
Travis Perkins plc | 4,230 | 125,790 | ||||||
Ultra Electronics Holdings plc | 257,238 | 7,976,867 | ||||||
Wolseley plc | 28,986 | 1,560,344 | ||||||
94,178,438 | ||||||||
Commercial & Professional Supplies 1.1% | ||||||||
Aggreko plc | 4,162 | 107,322 | ||||||
Babcock International Group plc | 192,573 | 3,937,926 | ||||||
Berendsen plc | 40,498 | 630,673 | ||||||
Capita plc | 219,016 | 3,462,239 | ||||||
De La Rue plc | 570,562 | 7,819,915 | ||||||
G4S plc | 26,746 | 112,341 | ||||||
Intertek Group plc | 2,390 | 127,505 | ||||||
Regus plc | 788,330 | 2,586,933 | ||||||
Serco Group plc | 539,478 | 4,820,706 | ||||||
23,605,560 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Bellway plc | 240,660 | 5,796,628 | ||||||
Berkeley Group Holdings plc | 86,942 | 3,259,029 | ||||||
Burberry Group plc | 6,834 | 167,935 | ||||||
Persimmon plc * | 5,320 | 107,710 | ||||||
9,331,302 | ||||||||
Consumer Services 0.9% | ||||||||
Carnival plc | 2,747 | 97,635 | ||||||
Compass Group plc | 321,741 | 4,627,020 | ||||||
Greene King plc | 400,266 | 5,296,636 | ||||||
InterContinental Hotels Group plc | 128,546 | 3,745,411 | ||||||
Restaurant Group plc | 459,239 | 4,238,016 | ||||||
TUI Travel plc | 7,543 | 46,502 | ||||||
Whitbread plc | 6,266 | 344,574 | ||||||
William Hill plc | 297,701 | 1,911,378 | ||||||
20,307,172 | ||||||||
Diversified Financials 0.8% | ||||||||
3i Group plc | 14,557 | 87,003 | ||||||
Aberdeen Asset Management plc | 14,467 | 102,670 | ||||||
Ashmore Group plc | 127,480 | 826,083 | ||||||
Close Brothers Group plc | 256,000 | 5,184,451 | ||||||
Hargreaves Lansdown plc | 50,947 | 970,555 | ||||||
ICAP plc | 8,336 | 51,475 | ||||||
IG Group Holdings plc | 126,879 | 1,246,967 | ||||||
International Personal Finance plc | 62,380 | 576,490 | ||||||
Investec plc | 8,046 | 56,295 | ||||||
Jupiter Fund Management plc | 169,409 | 1,083,239 | ||||||
London Stock Exchange Group plc | 2,950 | 77,538 | ||||||
Provident Financial plc | 32,678 | 826,553 | ||||||
Schroders plc | 188,495 | 7,779,632 | ||||||
Schroders plc, Non Voting Shares | 1,100 | 37,529 | ||||||
18,906,480 | ||||||||
Energy 0.6% | ||||||||
AMEC plc | 4,981 | 93,943 | ||||||
BG Group plc | 118,509 | 2,417,544 | ||||||
BP plc | 292,190 | 2,268,155 | ||||||
Ensco plc, Class A | 41,325 | 2,382,386 | ||||||
Petrofac Ltd. | 3,837 | 89,991 | ||||||
Royal Dutch Shell plc, A Shares | 58,907 | 1,961,886 | ||||||
Royal Dutch Shell plc, B Shares | 39,489 | 1,367,109 | ||||||
Tullow Oil plc | 250,266 | 3,782,823 | ||||||
14,363,837 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
J. Sainsbury plc | 18,131 | 114,688 | ||||||
Tesco plc | 2,043,395 | 11,919,404 | ||||||
WM Morrison Supermarkets plc | 34,299 | 154,758 | ||||||
12,188,850 | ||||||||
Food, Beverage & Tobacco 1.4% | ||||||||
Associated British Foods plc | 5,619 | 204,278 | ||||||
British American Tobacco plc | 29,533 | 1,629,402 |
See financial notes 49
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
British American Tobacco plc ADR | 43,300 | 4,784,217 | ||||||
Diageo plc | 525,669 | 16,756,985 | ||||||
Diageo plc ADR | 48,725 | 6,216,823 | ||||||
Imperial Tobacco Group plc | 15,069 | 562,585 | ||||||
SABMiller plc | 14,784 | 770,849 | ||||||
Tate & Lyle plc | 7,497 | 95,144 | ||||||
Unilever plc | 19,810 | 803,316 | ||||||
31,823,599 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Smith & Nephew plc | 13,959 | 178,531 | ||||||
Household & Personal Products 0.0% | ||||||||
Reckitt Benckiser Group plc | 10,071 | 783,112 | ||||||
Insurance 1.3% | ||||||||
Admiral Group plc | 3,040 | 62,241 | ||||||
Amlin plc | 235,584 | 1,609,642 | ||||||
Aviva plc | 44,994 | 323,008 | ||||||
Direct Line Insurance Group plc | 10,282 | 37,094 | ||||||
Hiscox Ltd. | 108,986 | 1,157,034 | ||||||
Lancashire Holdings Ltd. | 107,222 | 1,395,988 | ||||||
Legal & General Group plc | 91,272 | 316,331 | ||||||
Old Mutual plc | 75,509 | 246,087 | ||||||
Prudential plc | 471,229 | 9,636,987 | ||||||
Resolution Ltd. | 21,377 | 122,400 | ||||||
RSA Insurance Group plc | 52,603 | 108,337 | ||||||
St. James’s Place plc | 135,415 | 1,465,801 | ||||||
Standard Life plc | 36,765 | 207,417 | ||||||
Willis Group Holdings plc | 264,200 | 11,907,494 | ||||||
28,595,861 | ||||||||
Materials 2.0% | ||||||||
Anglo American plc | 21,690 | 515,714 | ||||||
Antofagasta plc | 83,483 | 1,140,959 | ||||||
AZ Electronic Materials S.A. | 1,858,451 | 8,537,659 | ||||||
BHP Billiton plc | 32,585 | 1,005,523 | ||||||
Croda International plc | 373,159 | 14,582,184 | ||||||
Elementis plc | 217,639 | 903,452 | ||||||
Fresnillo plc | 2,689 | 42,036 | ||||||
Johnson Matthey plc | 3,228 | 155,342 | ||||||
Randgold Resources Ltd. | 1,346 | 99,822 | ||||||
Rexam plc | 396,042 | 3,297,878 | ||||||
Rio Tinto plc | 19,564 | 989,941 | ||||||
Rio Tinto plc ADR | 110,700 | 5,612,490 | ||||||
Vedanta Resources plc | 1,793 | 30,549 | ||||||
Victrex plc | 352,754 | 9,322,476 | ||||||
46,236,025 | ||||||||
Media 0.6% | ||||||||
British Sky Broadcasting Group plc | 16,255 | 244,231 | ||||||
Daily Mail & General Trust plc | 83,805 | 1,093,052 | ||||||
ITV plc | 1,933,569 | 5,912,041 | ||||||
Pearson plc | 12,645 | 264,470 | ||||||
Reed Elsevier plc | 18,961 | 265,612 | ||||||
Rightmove plc | 26,283 | 1,116,877 | ||||||
WPP plc | 199,113 | 4,229,343 | ||||||
13,125,626 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Abcam plc | 100,973 | 816,786 | ||||||
AstraZeneca plc | 19,208 | 1,016,874 | ||||||
BTG plc * | 96,176 | 647,168 | ||||||
GlaxoSmithKline plc | 495,914 | 13,073,460 | ||||||
15,554,288 | ||||||||
Real Estate 0.4% | ||||||||
Big Yellow Group plc | 90,425 | 677,526 | ||||||
British Land Co., plc | 14,802 | 147,626 | ||||||
Countrywide plc | 853,423 | 7,635,548 | ||||||
Derwent London plc | 22,029 | 884,256 | ||||||
Hammerson plc | 10,685 | 90,542 | ||||||
Intu Properties plc | 10,954 | 60,415 | ||||||
Land Securities Group plc | 12,150 | 192,603 | ||||||
Segro plc | 11,121 | 58,247 | ||||||
9,746,763 | ||||||||
Retailing 0.8% | ||||||||
Dixons Retail plc * | 9,515,390 | 7,455,318 | ||||||
Dunelm Group plc | 83,039 | 1,179,249 | ||||||
Howden Joinery Group plc | 981,866 | 5,077,886 | ||||||
Kingfisher plc | 36,805 | 222,650 | ||||||
Marks & Spencer Group plc | 24,746 | 199,556 | ||||||
Next plc | 26,978 | 2,355,905 | ||||||
Signet Jewelers Ltd. | 28,700 | 2,142,742 | ||||||
18,633,306 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ARM Holdings plc | 73,263 | 1,148,003 | ||||||
Nanoco Group plc * | 78,191 | 203,729 | ||||||
1,351,732 | ||||||||
Software & Services 0.1% | ||||||||
Aveva Group plc | 13,562 | 561,933 | ||||||
Moneysupermarket.com Group plc | 198,288 | 486,967 | ||||||
The Sage Group plc | 18,865 | 101,771 | ||||||
1,150,671 | ||||||||
Technology Hardware & Equipment 1.7% | ||||||||
Diploma plc (b) | 601,096 | 6,679,112 | ||||||
Domino Printing Sciences plc (b) | 589,965 | 6,541,240 | ||||||
Halma plc | 975,826 | 8,571,203 | ||||||
Laird plc | 1,219,608 | 4,878,856 | ||||||
Spectris plc | 240,861 | 8,918,538 | ||||||
TT Electronics plc | 993,774 | 3,171,979 | ||||||
38,760,928 | ||||||||
Telecommunication Services 0.4% | ||||||||
BT Group plc | 1,054,790 | 6,382,143 | ||||||
Inmarsat plc | 6,807 | 78,565 | ||||||
Vodafone Group plc | 753,012 | 2,758,100 | ||||||
9,218,808 | ||||||||
Transportation 0.1% | ||||||||
easyJet plc | 122,577 | 2,567,636 | ||||||
Utilities 0.1% | ||||||||
Centrica plc | 81,198 | 459,234 | ||||||
National Grid plc | 56,210 | 706,376 | ||||||
Severn Trent plc | 3,562 | 106,325 | ||||||
SSE plc | 14,882 | 337,600 | ||||||
United Utilities Group plc | 10,763 | 121,729 | ||||||
1,731,264 | ||||||||
439,050,891 |
50 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
United States 0.1% | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Bunge Ltd. | 14,600 | 1,199,098 | ||||||
Insurance 0.1% | ||||||||
PartnerRe Ltd. | 15,925 | 1,595,844 | ||||||
2,794,942 | ||||||||
Total Common Stock | ||||||||
(Cost $1,603,354,249) | 2,128,971,390 | |||||||
Preferred Stock 0.3% of net assets | ||||||||
Brazil 0.2% | ||||||||
Banks 0.0% | ||||||||
Itau Unibanco Holding S.A. | 62,500 | 967,052 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Companhia de Bebidas das Americas ADR | 104,401 | 3,883,717 | ||||||
4,850,769 | ||||||||
Germany 0.1% | ||||||||
Automobiles & Components 0.1% | ||||||||
Bayerische Motoren Werke AG | 783 | 65,358 | ||||||
Porsche Automobil Holding SE | 2,393 | 223,450 | ||||||
Volkswagen AG | 2,259 | 572,901 | ||||||
861,709 | ||||||||
Household & Personal Products 0.0% | ||||||||
Henkel AG & Co. KGaA | 2,771 | 299,186 | ||||||
Materials 0.0% | ||||||||
Fuchs Petrolub SE | 442 | 35,685 | ||||||
Utilities 0.0% | ||||||||
RWE AG | 585 | 19,930 | ||||||
1,216,510 | ||||||||
United Kingdom 0.0% | ||||||||
Capital Goods 0.0% | ||||||||
Invensys plc (a) | 12,175 | 14,973 | ||||||
Rolls-Royce Holdings plc (a)* | 23,741,418 | 38,067 | ||||||
53,040 | ||||||||
Total Preferred Stock | ||||||||
(Cost $5,886,941) | 6,120,319 | |||||||
Other Investment Company 5.0% of net assets | ||||||||
Money Market Fund 5.0% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (f) | 114,088,179 | 114,088,179 | ||||||
Total Other Investment Company | ||||||||
(Cost $114,088,179) | 114,088,179 | |||||||
Rights 0.0% of net assets | ||||||||
Hong Kong 0.0% | ||||||||
New Hotel (a)* | 675 | — | ||||||
Spain 0.0% | ||||||||
Banco Santander S.A. (a)* | 170,914 | 37,011 | ||||||
Total Rights | ||||||||
(Cost $35,341) | 37,011 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.2% of net assets | ||||||||
U.S. Treasury Obligations 0.2% | ||||||||
U.S. Treasury Bills | ||||||||
0.01%, 12/05/13 (d)(e) | 55,000 | 55,000 | ||||||
0.02%, 12/05/13 (d)(e) | 5,000 | 5,000 | ||||||
0.03%, 12/05/13 (d)(e) | 5,000 | 5,000 | ||||||
0.04%, 12/05/13 (d)(e) | 20,000 | 19,999 | ||||||
0.05%, 12/05/13 (d)(e) | 20,000 | 19,999 | ||||||
0.00%, 12/19/13 (d)(e) | 225,000 | 225,000 | ||||||
0.01%, 12/19/13 (d)(e) | 4,120,000 | 4,119,970 | ||||||
0.02%, 12/19/13 (d)(e) | 400,000 | 399,989 | ||||||
Total Short-Term Investments | ||||||||
(Cost $4,849,957) | 4,849,957 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $1,767,940,581 and the unrealized appreciation and depreciation were $509,920,702 and ($23,794,427), respectively, with a net unrealized appreciation of $486,126,275.
At 10/31/13, the values of certain foreign securities held by the fund aggregating $1,797,740,885 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 $36,898,622 or 1.6% of net assets. | |
(c) | Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $613,122 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. | |
(g) | Securities are traded on separate exchanges for the same entity. |
See financial notes 51
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
ADR — | American Depositary Receipt | |
CVA — | Dutch Certificate | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
AUD — | Australian dollar | |
CHF — | Swiss franc | |
JPY — | Japanese yen | |
NZD — | New Zealand dollar | |
SEK — | Swedish krona | |
USD — | U.S. dollar |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/20/13 | 970 | 90,952,050 | 2,632,085 |
Amount of | Amount of | Unrealized | ||||||||||||||||||||
Currency | Currency | Currency | Currency | Appreciation | ||||||||||||||||||
Expiration | to be | to be | to be | to be | (Depreciation) | |||||||||||||||||
Date | Counterparty | Received | Received | Delivered | Delivered | ($) | ||||||||||||||||
Forward Foreign Currency Exchange Contracts | ||||||||||||||||||||||
12/18/2013 | State Street Bank & Trust Co. | AUD | 2,150,000 | USD | 2,026,223 | 80,194 | ||||||||||||||||
12/18/2013 | State Street Bank & Trust Co. | USD | 12,553,159 | AUD | 13,320,000 | 997,277 | ||||||||||||||||
01/31/2014 | State Street Bank London | USD | 12,147,364 | AUD | 12,927,000 | 82,871 | ||||||||||||||||
03/19/2014 | State Street Bank & Trust Co. | USD | 22,399,690 | CHF | 20,300,000 | (520,210 | ) | |||||||||||||||
12/18/2013 | State Street Bank & Trust Co. | USD | 5,096,445 | JPY | 501,000,000 | 27,302 | ||||||||||||||||
01/31/2014 | State Street Bank London | USD | 6,042,895 | NZD | 7,360,500 | (3,936 | ) | |||||||||||||||
06/18/2014 | State Street Bank & Trust Co. | USD | 7,598,124 | SEK | 49,500,000 | (46,867 | ) | |||||||||||||||
06/18/2014 | State Street Bank & Trust Co. | USD | 982,384 | SEK | 6,400,000 | 9,895 | ||||||||||||||||
Net Unrealized Appreciation on Forward Foreign Currency Exchange Contracts | 626,526 | |||||||||||||||||||||
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (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 | $— | $108,339,346 | $— | $108,339,346 | ||||||||||||
Australia1 | — | 85,695,101 | — | 85,695,101 | ||||||||||||
Materials | 6,127,056 | 16,998,885 | — | 23,125,941 | ||||||||||||
Belgium1 | — | 4,629,998 | — | 4,629,998 | ||||||||||||
Media | 46,024 | — | — | 46,024 | ||||||||||||
Brazil | ||||||||||||||||
Capital Goods | 2,462,789 | — | — | 2,462,789 | ||||||||||||
Consumer Services | 4,797,099 | — | — | 4,797,099 | ||||||||||||
Insurance | 2,487,197 | — | — | 2,487,197 | ||||||||||||
Materials | 3,288,454 | — | — | 3,288,454 | ||||||||||||
Software & Services | 612,718 | 1,943,933 | — | 2,556,651 | ||||||||||||
Transportation | 1,001,273 | — | — | 1,001,273 | ||||||||||||
Canada1 | 86,107,961 | — | — | 86,107,961 | ||||||||||||
Chile1 | 579,395 | — | — | 579,395 |
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 | ||||||||||||
China1 | $— | $19,026,377 | $— | $19,026,377 | ||||||||||||
Capital Goods | 3,802,017 | 1,903,903 | — | 5,705,920 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 650,754 | 1,229,797 | — | 1,880,551 | ||||||||||||
Retailing | 891,726 | — | — | 891,726 | ||||||||||||
Software & Services | 8,984,534 | 3,222,747 | — | 12,207,281 | ||||||||||||
Technology Hardware & Equipment | 633,252 | 4,643,800 | — | 5,277,052 | ||||||||||||
Denmark1 | — | 30,559,704 | — | 30,559,704 | ||||||||||||
Consumer Durables & Apparel | 2,204,570 | — | — | 2,204,570 | ||||||||||||
Food, Beverage & Tobacco | 6,526,055 | 167,908 | — | 6,693,963 | ||||||||||||
Telecommunication Services | 95,692 | — | — | 95,692 | ||||||||||||
France1 | — | 119,577,861 | — | 119,577,861 | ||||||||||||
Capital Goods | 93,764 | 10,921,824 | — | 11,015,588 | ||||||||||||
Consumer Services | 144,724 | 98,823 | — | 243,547 | ||||||||||||
Insurance | 2,469,971 | 10,366,117 | — | 12,836,088 | ||||||||||||
Media | 4,424,239 | 11,250,426 | — | 15,674,665 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 5,051,037 | 11,644,904 | — | 16,695,941 | ||||||||||||
Real Estate | 378,656 | 4,639,973 | — | 5,018,629 | ||||||||||||
Software & Services | 1,697,580 | 2,679,198 | — | 4,376,778 | ||||||||||||
Telecommunication Services | 79,569 | 849,903 | — | 929,472 | ||||||||||||
Transportation | 55,458 | 85,879 | — | 141,337 | ||||||||||||
Germany1 | — | 144,740,061 | — | 144,740,061 | ||||||||||||
Capital Goods | 143,351 | 39,859,056 | — | 40,002,407 | ||||||||||||
Materials | 4,784,595 | 17,064,878 | — | 21,849,473 | ||||||||||||
Media | 3,751,217 | 3,092,392 | — | 6,843,609 | ||||||||||||
Hong Kong1 | — | 50,948,159 | — | 50,948,159 | ||||||||||||
Software & Services | 2,145,960 | — | — | 2,145,960 | ||||||||||||
Technology Hardware & Equipment | — | 4,258,248 | 12,251 | 4,270,499 | ||||||||||||
Telecommunication Services | 27,086 | 588,821 | — | 615,907 | ||||||||||||
India1 | — | 8,387,195 | — | 8,387,195 | ||||||||||||
Software & Services | 2,190,751 | 2,933,792 | — | 5,124,543 | ||||||||||||
Ireland1 | — | 18,281,344 | — | 18,281,344 | ||||||||||||
Capital Goods | 6,776,928 | — | — | 6,776,928 | ||||||||||||
Food, Beverage & Tobacco | 5,742,798 | — | — | 5,742,798 | ||||||||||||
Israel1 | — | 807,488 | — | 807,488 | ||||||||||||
Software & Services | 6,353,190 | 35,212 | — | 6,388,402 | ||||||||||||
Italy1 | — | 49,080,110 | — | 49,080,110 | ||||||||||||
Retailing | 631,993 | — | — | 631,993 | ||||||||||||
Japan1 | — | 272,690,632 | — | 272,690,632 | ||||||||||||
Consumer Durables & Apparel | — | 1,385,429 | 49,426 | 1,434,855 | ||||||||||||
Consumer Services | 27,621 | 165,374 | — | 192,995 | ||||||||||||
Real Estate | 68,768 | 2,246,244 | — | 2,315,012 | ||||||||||||
Software & Services | 12,031 | 10,370,187 | — | 10,382,218 | ||||||||||||
Luxembourg1 | — | 462,092 | — | 462,092 | ||||||||||||
Energy | 5,585,912 | — | — | 5,585,912 | ||||||||||||
Malaysia1 | 4,034,497 | — | — | 4,034,497 |
See financial notes 53
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 | ||||||||||||
Mexico1 | $3,862,881 | $— | $— | $3,862,881 | ||||||||||||
Netherlands1 | — | 17,469,286 | — | 17,469,286 | ||||||||||||
Capital Goods | 12,805,162 | 27,317,770 | — | 40,122,932 | ||||||||||||
Energy | 11,983,389 | 129,658 | — | 12,113,047 | ||||||||||||
Food, Beverage & Tobacco | 2,660,247 | 7,165,094 | — | 9,825,341 | ||||||||||||
Telecommunication Services | 147,997 | 105,716 | — | 253,713 | ||||||||||||
Nigeria1 | 626,987 | — | — | 626,987 | ||||||||||||
Norway1 | — | 15,516,196 | — | 15,516,196 | ||||||||||||
Materials | 481,074 | 188,966 | — | 670,040 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 485,272 | — | — | 485,272 | ||||||||||||
Republic of Korea1 | — | 17,552,805 | — | 17,552,805 | ||||||||||||
Capital Goods | 2,115,354 | 4,384,843 | — | 6,500,197 | ||||||||||||
Retailing | 663,181 | 3,413,815 | — | 4,076,996 | ||||||||||||
Russia1 | 4,454,772 | — | — | 4,454,772 | ||||||||||||
Spain1 | — | 21,071,751 | — | 21,071,751 | ||||||||||||
Banks | 110,764 | 3,896,628 | — | 4,007,392 | ||||||||||||
Sweden1 | — | 39,170,029 | — | 39,170,029 | ||||||||||||
Capital Goods | 2,678,160 | 21,409,362 | — | 24,087,522 | ||||||||||||
Switzerland1 | — | 56,491,839 | — | 56,491,839 | ||||||||||||
Capital Goods | 5,982,817 | 3,530,373 | — | 9,513,190 | ||||||||||||
Diversified Financials | 3,219,334 | 38,402,053 | — | 41,621,387 | ||||||||||||
Energy | 10,621,179 | 256,307 | — | 10,877,486 | ||||||||||||
Food, Beverage & Tobacco | 7,962,589 | 15,280,414 | — | 23,243,003 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 3,518,831 | 22,011,463 | — | 25,530,294 | ||||||||||||
Taiwan1 | — | 22,752,923 | — | 22,752,923 | ||||||||||||
Semiconductors & Semiconductor Equipment | 3,180,825 | — | — | 3,180,825 | ||||||||||||
Thailand1 | — | 2,145,009 | — | 2,145,009 | ||||||||||||
Consumer Services | 2,051,316 | — | — | 2,051,316 | ||||||||||||
Telecommunication Services | 1,946,066 | — | — | 1,946,066 | ||||||||||||
United Kingdom1 | — | 139,806,114 | — | 139,806,114 | ||||||||||||
Capital Goods | 3,995,814 | 90,182,624 | — | 94,178,438 | ||||||||||||
Energy | 2,382,386 | 11,981,451 | — | 14,363,837 | ||||||||||||
Food, Beverage & Tobacco | 11,001,040 | 20,822,559 | — | 31,823,599 | ||||||||||||
Insurance | 13,340,576 | 15,255,285 | — | 28,595,861 | ||||||||||||
Materials | 5,612,490 | 40,623,535 | — | 46,236,025 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 816,786 | 14,737,502 | — | 15,554,288 | ||||||||||||
Real Estate | 8,313,074 | 1,433,689 | — | 9,746,763 | ||||||||||||
Retailing | 2,142,742 | 16,490,564 | — | 18,633,306 | ||||||||||||
Semiconductors & Semiconductor Equipment | 203,729 | 1,148,003 | — | 1,351,732 | ||||||||||||
Technology Hardware & Equipment | 13,220,352 | 25,540,576 | — | 38,760,928 | ||||||||||||
United States1 | 2,794,942 | — | — | 2,794,942 | ||||||||||||
Preferred Stock1 | — | 1,216,510 | — | 1,216,510 |
54 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 | ||||||||||||
Brazil1 | $— | $967,052 | $— | $967,052 | ||||||||||||
Food, Beverage & Tobacco | 3,883,717 | — | — | 3,883,717 | ||||||||||||
United Kingdom1 | — | — | 53,040 | 53,040 | ||||||||||||
Other Investment Company1 | 114,088,179 | — | — | 114,088,179 | ||||||||||||
Rights1 | — | — | 37,011 | 37,011 | ||||||||||||
Short-Term Investments1 | — | 4,849,957 | — | 4,849,957 | ||||||||||||
Total | $451,324,286 | $1,802,590,842 | $151,728 | $2,254,066,856 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract2 | $2,632,085 | $— | $— | $2,632,085 | ||||||||||||
Forward Foreign Currency Exchange Contracts2 | — | 1,197,539 | — | 1,197,539 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Forward Foreign Currency Exchange Contracts2 | $— | ($571,013 | ) | $— | ($571,013 | ) |
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. |
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 | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | ||||||||||||||||||||||||||||
Investments in Securities | 2012 | (Premiums) | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2013 | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||
Hong Kong | $30,640 | $— | $— | ($18,389 | ) | $— | $— | $— | $— | $12,251 | ||||||||||||||||||||||||||
Japan | — | — | 83,747 | (1,796 | ) | 49,704 | (580,713 | ) | 498,484 | — | 49,426 | |||||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||||||
United Kingdom | 32,214 | — | 296 | (333 | ) | 52,996 | (32,133 | ) | — | — | 53,040 | |||||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||||||
Spain | — | — | — | 1,669 | 35,342 | — | — | — | 37,011 | |||||||||||||||||||||||||||
Corporate Bonds | ||||||||||||||||||||||||||||||||||||
Brazil | 28,510 | 89 | (3,908 | ) | 88,682 | — | (113,373 | ) | — | — | — | |||||||||||||||||||||||||
Total | $91,364 | $89 | $80,135 | $69,833 | $138,042 | ($726,219 | ) | $498,484 | $— | $151,728 | ||||||||||||||||||||||||||
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 appreciation (depreciation) for Level 3 investments held by the fund at October 31, 2013 was $6,046.
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, 2013. The transfers in the amount of $9,059,466 and $21,032,286 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.
See financial notes 55
Table of Contents
Laudus International MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments, at value (cost $1,728,214,667) | $2,254,066,856 | |||||
Foreign currency, at value (cost $2,926,316) | 2,939,407 | |||||
Cash | 370,378 | |||||
Receivables: | ||||||
Investments sold | 18,302,426 | |||||
Fund shares sold | 13,343,412 | |||||
Dividends | 3,354,936 | |||||
Foreign tax reclaims | 1,452,617 | |||||
Interest | 39 | |||||
Unrealized gains on forward foreign currency exchange contracts | 1,197,539 | |||||
Prepaid expenses | + | 110,127 | ||||
Total assets | 2,295,137,737 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 27,685,131 | |||||
Investment adviser and administrator fees | 206,545 | |||||
Shareholder service fees | 340,995 | |||||
Fund shares redeemed | 817,084 | |||||
Variation margin on futures contracts | 356,395 | |||||
Foreign capital gains tax | 44,490 | |||||
Unrealized losses on forward foreign currency exchange contracts | + | 571,013 | ||||
Total liabilities | 30,021,653 | |||||
Net Assets | ||||||
Total assets | 2,295,137,737 | |||||
Total liabilities | − | 30,021,653 | ||||
Net assets | $2,265,116,084 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,955,627,874 | |||||
Net investment income not yet distributed | 17,610,213 | |||||
Net realized capital losses | (237,287,311 | ) | ||||
Net unrealized capital appreciation | 529,165,308 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $674,873,443 | 28,501,558 | $23.68 | |||||||||||
Select Shares | $1,590,242,641 | 67,147,955 | $23.68 |
56 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $3,603,670) | $48,284,713 | |||||
Interest (net of foreign withholding taxes of $431) | + | 58,101 | ||||
Total investment income | 48,342,814 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 24,398,127 | |||||
Shareholder service fees: | ||||||
Investor Shares | 1,505,561 | |||||
Select Shares | 1,013,731 | |||||
Custodian fees | 1,086,912 | |||||
Portfolio accounting fees | 196,100 | |||||
Transfer agent fees | 175,001 | |||||
Shareholder reports | 108,128 | |||||
Professional fees | 83,366 | |||||
Registration fees | 81,429 | |||||
Independent trustees’ fees | 19,948 | |||||
Interest expense | 162 | |||||
Other expenses | + | 55,175 | ||||
Total expenses | 28,723,640 | |||||
Expense reduction by CSIM and its affiliates | − | 3,705,570 | ||||
Custody credits | − | 4 | ||||
Net expenses | − | 25,018,066 | ||||
Net investment income | 23,324,748 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments (net of foreign capital gain tax of $48) | 161,318,500 | |||||
Net realized gains on futures contracts | 5,480,780 | |||||
Net realized gains on foreign currency transactions | + | 6,696,119 | ||||
Net realized gains | 173,495,399 | |||||
Net change in unrealized appreciation on investments (net of foreign capital gain tax of ($44,490)) | 262,585,042 | |||||
Net change in unrealized appreciation on futures contracts | 3,225,503 | |||||
Net change in unrealized depreciation on foreign currency translations | + | (620,868 | ) | |||
Net change in unrealized appreciation | + | 265,189,677 | ||||
Net realized and unrealized gains | 438,685,076 | |||||
Increase in net assets resulting from operations | $462,009,824 |
See financial notes 57
Table of Contents
Laudus International MarketMasters Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $23,324,748 | $20,817,525 | ||||||||
Net realized gains | 173,495,399 | 16,733,565 | ||||||||
Net change in unrealized appreciation | + | 265,189,677 | 114,959,645 | |||||||
Increase in net assets from operations | 462,009,824 | 152,510,735 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ||||||||||
Investor Shares | (13,288,779 | ) | (5,407,664 | ) | ||||||
Select Shares | + | (25,873,436 | ) | (9,563,990 | ) | |||||
Total distributions from net investment income | ($39,162,215 | ) | ($14,971,654 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 3,013,633 | $63,900,921 | 1,866,086 | $33,699,589 | ||||||||||||||
Select Shares | + | 19,866,078 | 424,219,097 | 14,627,352 | 259,539,496 | |||||||||||||
Total shares sold | 22,879,711 | $488,120,018 | 16,493,438 | $293,239,085 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 634,180 | $12,214,309 | 313,230 | $4,983,484 | ||||||||||||||
Select Shares | + | 892,608 | 17,173,788 | 403,057 | 6,404,578 | |||||||||||||
Total shares reinvested | 1,526,788 | $29,388,097 | 716,287 | $11,388,062 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (6,234,658 | ) | ($130,752,070 | ) | (9,205,299 | ) | ($164,437,304 | ) | ||||||||||
Select Shares | + | (9,414,179 | ) | (198,148,130 | ) | (14,236,435 | ) | (249,904,027 | ) | |||||||||
Total shares redeemed | (15,648,837 | ) | ($328,900,200 | ) | (23,441,734 | ) | ($414,341,331 | ) | ||||||||||
Net transactions in fund shares | 8,757,662 | $188,607,915 | (6,232,009 | ) | ($109,714,184 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 86,891,851 | $1,653,660,560 | 93,123,860 | $1,625,835,663 | ||||||||||||||
Total increase or decrease | + | 8,757,662 | 611,455,524 | (6,232,009 | ) | 27,824,897 | ||||||||||||
End of period | 95,649,513 | $2,265,116,084 | 86,891,851 | $1,653,660,560 | ||||||||||||||
Net investment income not yet distributed | $17,610,213 | $20,990,598 |
58 See financial notes
Table of Contents
Laudus MarketMasters Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds 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 Target 2045 Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Target 2050 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Target 2055 Fund | |||
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 | Schwab Fundamental International Large Company Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Small-Cap Equity Fund | Schwab Fundamental Emerging Markets Large Company 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 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.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at 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. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures. | |
• | Foreign equity security 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 NAV 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. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures. | |
• | Futures and forward foreign currency exchange contracts: Futures are valued at their settlement prices as of the close of their exchanges. Forwards are valued based on that day’s forward exchange rates or by using an interpolated forward exchange rate for contracts with interim settlement dates. | |
• | Short-term securities (60 days or less to maturity): Short-term securities are valued at amortized cost, which approximates market value. | |
• | Underlying funds: Mutual funds are valued at their respective NAVs. Exchange traded funds (“ETFs”) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable. |
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 inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which 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 |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
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. |
• | 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, 2013 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 and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences 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.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures or forward 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.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
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 may 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, 2013, if any, are reflected in the funds’ Statements of Assets and Liabilities.
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Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements 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 has evaluated ASU No. 2011-11 and determined that upon adoption of the standard the funds’ financial statement disclosures will include the enhanced disclosures around rights of offset and related arrangements as required by the standard.
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 market countries 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, and at times, it may be difficult to value such investments.
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Financial Notes (continued)
3. Risk Factors (continued):
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 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 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). 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). 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 with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with
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Laudus MarketMasters Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (“expense limitation”). The expense limitation as a percentage of average daily net assets is as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Investor Shares | 1.35% | 1.40% | ||||||
Select Shares | 1.20% | 1.25% |
Certain Schwab funds may own shares of other Schwab funds. The table below reflects the percentage of shares of each fund in this report that are owned by other Schwab funds as of October 31, 2013, as applicable:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Schwab Target 2010 Fund | 0.6% | 0.1% | ||||||
Schwab Target 2015 Fund | 1.1% | 0.2% | ||||||
Schwab Target 2020 Fund | 6.1% | 1.0% | ||||||
Schwab Target 2025 Fund | 4.3% | 0.7% | ||||||
Schwab Target 2030 Fund | 11.9% | 2.0% | ||||||
Schwab Target 2035 Fund | 4.3% | 0.7% | ||||||
Schwab Target 2040 Fund | 14.3% | 2.3% | ||||||
Schwab Target 2045 Fund | 0.4% | 0.1% | ||||||
Schwab Target 2050 Fund | 0.3% | 0.1% | ||||||
Schwab Target 2055 Fund | 0.2% | 0.0% | * | |||||
Schwab Monthly Income Fund - Moderate Payout | —% | 0.2% | ||||||
Schwab Monthly Income Fund - Enhanced Payout | —% | 0.3% | ||||||
Schwab Monthly Income Fund - Maximum Payout | —% | 0.1% | ||||||
Schwab Balanced Fund | 8.7% | —% |
* | Less than 0.05% |
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 to be charged on a 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.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust 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. For information regarding the trustees please refer to Trustees and Officers table at the end of this report.
6. 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.
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Laudus MarketMasters Funds
Financial Notes (continued)
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2013, 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 | $160,015,999 | $167,475,679 | ||||||
Laudus International MarketMasters Fund | 1,295,111,669 | 1,188,539,076 |
8. 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 variation margin for futures contracts held at October 31, 2013 are presented on the face of the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized/unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period, the month-end average contract 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 | $2,710,898 | 29 | ||||||
Laudus International MarketMasters Fund | 50,002,705 | 586 |
The Laudus International MarketMasters Fund invested in 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 forward foreign currency notional amount and the month-end average unrealized appreciation were $151,434,065 and $3,561,703, respectively.
As of October 31, 2013, the derivatives contracts held by the funds, categorized by primary risk exposure, were:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Asset Derivatives | Fair Value | |||||||
Equity Index - Futures Contracts1 | $94,995 | $2,632,085 | ||||||
Forward Foreign Currency Exchange Contracts2 | — | 1,197,539 | ||||||
Total | 94,995 | 3,829,624 | ||||||
Liability Derivatives | Fair Value | |||||||
Forward Foreign Currency Exchange Contracts3 | $— | $571,013 |
1 | Includes cumulative unrealized appreciation of futures contracts as reported in the Schedule of Portfolio Holdings. Only current day’s variation margin is reported within the Statement of Assets and Liabilities. | |
2 | Statement of Assets and Liabilities location: Unrealized appreciation on forward foreign currency exchange contracts. | |
3 | Statement of Assets and Liabilities location: Unrealized depreciation on forward foreign currency exchange contracts. |
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Laudus MarketMasters Funds
Financial Notes (continued)
8. Derivatives (continued):
During the period ending October 31, 2013, the derivatives held by the funds, categorized by primary risk exposure, were:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Equity Index Futures Contracts | ||||||||
Realized Gains (Losses)1 | $865,900 | $5,480,780 | ||||||
Change in Unrealized Appreciation (Depreciation)2 | 300,357 | 3,225,503 | ||||||
Forward Foreign Currency Exchange Contracts | ||||||||
Realized Gains (Losses)1 | $— | $7,322,089 | ||||||
Change in Unrealized Appreciation (Depreciation)2 | — | (763,771 | ) |
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 appreciation (depreciation) on futures contracts and net unrealized appreciation (depreciation) on foreign currency translations. |
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 | |||||||
(11/1/12-10/31/13) | (11/1/11-10/31/12) | |||||||
Laudus Small-Cap MarketMasters Fund | $341 | $394 | ||||||
Laudus International MarketMasters Fund | 12,421 | 7,324 |
10. Federal Income Taxes:
As of October 31, 2013, the components of distributable earnings on a tax-basis were as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Undistributed ordinary income | $— | $33,602,909 | ||||||
Undistributed long-term capital gains | — | — | ||||||
Unrealized appreciation on investments | 40,011,568 | 509,920,702 | ||||||
Unrealized depreciation on investments | (4,105,076 | ) | (23,794,427 | ) | ||||
Other unrealized appreciation (depreciation) | (8 | ) | 113,510 | |||||
Net unrealized appreciation (depreciation) | $35,906,484 | $486,239,785 | ||||||
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, 2013, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
Laudus Small-Cap | Laudus International | |||||||
Expiration Date | MarketMasters Fund | MarketMasters Fund | ||||||
October 31, 2017 | $22,461,534 | $210,354,492 | ||||||
Total | $22,461,534 | $210,354,492 | ||||||
Qualified late-year losses are certain capital and ordinary losses which occur during the portion of a fund’s taxable year subsequent to October 31. A fund may elect to treat any portion of qualified late-year losses as arising during the first day of the
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Laudus MarketMasters Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
next taxable year. For the year ended October 31, 2013, the funds had late-year ordinary losses deferred and capital losses utilized as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Late-year ordinary losses deferred | $1,041,833 | $— | ||||||
Capital losses utilized | 28,218,426 | 158,069,352 |
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 | $— | $39,162,215 | ||||||
Long-term capital gains | — | — | ||||||
Return of capital | — | — | ||||||
Prior period distributions | ||||||||
Ordinary income | $— | $14,971,654 | ||||||
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, 2013, the funds made the following reclassifications:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Capital shares | $— | $— | ||||||
Undistributed net investment income | (14,082 | ) | 12,457,082 | |||||
Net realized capital gains (losses) | 14,082 | (12,457,082 | ) |
As of October 31, 2013, 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, 2013, the funds did not incur any interest or penalties.
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:
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, 2013, and 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 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 at October 31, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 17, 2013
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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 $3,506,773 to its shareholders for the year ended October 31, 2013. The respective foreign source income on the fund is $51,783,861.
For the fiscal year ended October 31, 2013, 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 2014 via IRS form 1099 of the amounts for use in preparing their 2013 income tax return.
Laudus Small-Cap MarketMasters Fund | $— | |||
Laudus International MarketMasters Fund | 41,021,592 |
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Approval of New Sub-Advisory Agreement and Renewal of Investment Advisory and Sub-Advisory Agreements
Approval of New Sub-Advisory Agreement
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.
At a meeting of the Board of Trustees (the “Board” or the “Trustees,” as appropriate) held on February 28, 2013, Charles Schwab Investment Management, Inc. (“CSIM”) recommended, and the Trustees, including each of the Independent Trustees, approved the a new investment sub-advisory agreement between CSIM and BMO Asset Management Corp. (“BMO”), pursuant to which BMO was appointed to replace Neuberger Berman Management LLC as a sub-adviser to Laudus Small-Cap MarketMasters Fund (the “Fund”) (“New Sub-Advisory Agreement).
For the New Sub-Advisory Agreement, the Board was provided with detailed materials related to BMO in advance of and at each meeting. The materials included, but were not limited to, information about BMO’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; (e) compliance systems; (f) policies on, and compliance procedures for, personal securities transactions; (g) reputation, expertise and resources; (h) performance compared with similar advisers; and (i) performance with respect to similar accounts managed by BMO. In addition, the Board was provided with information about the level of the sub-advisory fees to be paid to BMO and comparable fees paid to BMO 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 the New Sub-Advisory Agreement. The proposed appointment of BMO was first reviewed and discussed in the Investment Oversight Committee of the Board (the “Committee”) on February 27, 2013. Following such discussions, the Committee recommended the New Sub-Advisory Agreement to the Board for approval.
In its consideration of the approval of the 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 the Fund under the New Sub-Advisory Agreement, including the resources of BMO to be dedicated to the Fund; |
2. | BMO’s investment performance in providing sub-advisory services with respect to similar accounts; |
3. | the Fund’s expenses and how those expenses would be impacted by the hiring of BMO; |
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 may be realized as the Fund grows and whether fee levels in the 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 BMO to the Fund and the resources BMO will dedicate to the Fund. In this regard, the Trustees considered the information provided by BMO 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 BMO by CSIM as a well-qualified sub-adviser to the Fund with an investment 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 BMO’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 BMO to the Fund and the resources of BMO to be dedicated to the Fund supported approval of the New Sub-Advisory Agreement.
Investment Performance. The Board considered BMO’s investment performance in determining whether to approve the New Sub-Advisory Agreement. Specifically, the Trustees considered BMO’s tracking error relative to appropriate benchmarks as well as its overall relative performance in providing investment advisory services to similar accounts.
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Following such evaluation, the Board concluded, within the context of its full deliberations, that the investment performance of BMO supported approval of the New Sub-Advisory Agreement.
Fund Expenses. With respect to the Fund’s expenses, the Trustees considered the rate of compensation to be paid under the New Sub-Advisory Agreement, and the Fund’s net operating expense ratio. When considering the fees to be paid to BMO, the Trustees took into account the fact that BMO will be compensated by CSIM, and not by the Fund directly, and that the fees paid to BMO would not impact the fees paid by the Fund to CSIM. The Trustees also considered fees charged by BMO to comparable accounts, such as separately managed accounts. Finally, the Board considered CSIM’s statements that the fees to be paid to BMO are reasonable in light of the anticipated quality of services to be provided by BMO. Following such evaluation, the Board concluded, within the context of its full deliberations, that the fees to be paid to BMO are reasonable and supported approval of the New Sub-Advisory Agreement.
Profitability. With respect to the profitability of CSIM, the Trustees considered the projected profitability of CSIM before and after the appointment of BMO 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 is reasonable and supported approval of the New Sub-Advisory Agreement. With respect to BMO, no historical information regarding the profitability of its relationship to the Fund was available. The Trustees took into account, however, the fact that BMO will be compensated by CSIM, and not by the Fund directly, and that the compensation paid to BMO 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 the 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 the Fund include lower fees at higher graduated asset 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 each Independent Trustee, approved the 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.
Approval of Renewal of Investment Advisory and Sub-Advisory Agreements
The Board 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 the Trust and CSIM with respect to the existing funds in the Trust, including Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund (the “Funds”), and the individual sub-advisory agreements between CSIM and each of BMO, Mellon Capital Management Corp.(“Mellon”), TAMRO Capital Partners, LLC and Wellington Management Company LLP relating to Laudus Small-Cap MarketMasters Fund; and between CSIM and each of American Century Global Investment Management, Inc., Harris Associates L.P., William Blair & Company, LLC, Mellon, 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 23, 2013 and June 4, 2013, and approved the renewal of the Agreements with
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respect to the Funds for an additional one year term at the meeting held on June 4, 2013. 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 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 their review of Fund expenses and adviser and Sub-Adviser profitability discussed below. Although Laudus Small-Cap MarketMasters Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Laudus Small-Cap MarketMasters Fund, including 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; that recent performance showed improvement and that CSIM and the Sub-Advisers 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
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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 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 investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreements with respect to the Funds and concluded that the compensation under the Agreements with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
1 | Each fund and the investment adviser have received exemptive relief from the Securities and Exchange Commission to permit the investment adviser and the fund to hire or terminate investment managers without shareholder approval, subject to certain conditions. One of the conditions requires approval by the 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 99 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the 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 (advisory services firm) (Oct. 2001 – present). | 76 | Director, WageWorks, Inc. (2010 – present) 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. 2000 – present). | 76 | 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). | 76 | Director, TOUSA (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Mission West Properties (1998 – 2012) Director, Ditech Networks Corporation (1997 – 2012) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 76 | 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). | 76 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) | |||
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). | 76 | Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc. (2009 – present) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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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. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present). | 76 | 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. | 76 | 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. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. 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. | 99 | None | |||
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 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). | |
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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
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 (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). | |
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). | |
David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Capital Trust since 2011.) | Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President and Assistant Secretary (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 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of 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 own stock of The Charles Schwab Corporation, the parent company of 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.
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 capital gain or loss is considered unrealized appreciation or depreciation.
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.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
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. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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.
restricted and illiquid securities. Restricted securities are securities that are subject to legal restrictions on their sale. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the 1933 Act, or in a registered public offering. Certain restricted securities, such as 4(2) commercial paper and Rule 144A securities, may be considered to be liquid if they meet the criteria for liquidity established by the Board of Trustees. Illiquid securities generally are any securities that cannot be disposed of promptly and in the ordinary course of business at approximately the amount at which a fund has valued the instruments. The liquidity of a fund’s investments is monitored under the supervision and direction of the Board of Trustees. Investments currently not considered liquid include repurchase agreements not maturing within seven days and certain restricted securities.
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. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
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; |
• | 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
© 2013 Schwab 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 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 include the Laudus 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.
© 2013 Charles Schwab & Co., Inc. All rights reserved. Member SIPC®. Printed on recycled paper. | MFR13812-16 00107465 |
Table of Contents
Table of Contents
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COMMAND PERFORMANCETM
Table of Contents
Annual report dated October 31, 2013, 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
Schwab Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 Fund
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Table of Contents
This wrapper is not part of the shareholder report.
Table of Contents
Schwab Target Funds
Annual Report
October 31, 2013
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 Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 Fund
![(CHARLES SCHWAB LOGO)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctschwab02.gif)
Schwab Target Funds
In This Report
3 | ||
5 | ||
7 | ||
Performance and Fund Facts | ||
8 | ||
10 | ||
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20 | ||
22 | ||
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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 12 Months Ended October 31, 20131 | ||||
Schwab Target 2010 Fund (Ticker Symbol: SWBRX) | 9.74% | |||
Target 2010 Composite Index | 9.35% | |||
Fund Category: Morningstar Target Date 2000-2010 | 8.62% | |||
Performance Details | pages 8-9 | |||
Schwab Target 2015 Fund (Ticker Symbol: SWGRX) | 12.06% | |||
Target 2015 Composite Index | 11.47% | |||
Fund Category: Morningstar Target Date 2011-2015 | 10.19% | |||
Performance Details | pages 10-11 | |||
Schwab Target 2020 Fund (Ticker Symbol: SWCRX) | 15.72% | |||
Target 2020 Composite Index | 15.06% | |||
Fund Category: Morningstar Target Date 2016-2020 | 11.86% | |||
Performance Details | pages 12-13 | |||
Schwab Target 2025 Fund (Ticker Symbol: SWHRX) | 18.54% | |||
Target 2025 Composite Index | 17.79% | |||
Fund Category: Morningstar Target Date 2021-2025 | 15.31% | |||
Performance Details | pages 14-15 | |||
Schwab Target 2030 Fund (Ticker Symbol: SWDRX) | 20.73% | |||
Target 2030 Composite Index | 20.07% | |||
Fund Category: Morningstar Target Date 2026-2030 | 16.66% | |||
Performance Details | pages 16-17 | |||
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
The components that make up each of the composite indices may vary over time. For index definitions, please see the Glossary.
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.
1 | The report period covers the 12 months beginning November 1, 2012 through October 31, 2013, except where noted. |
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 12 Months Ended October 31, 20131 | ||||
Schwab Target 2035 Fund (Ticker Symbol: SWIRX) | 23.02% | |||
Target 2035 Composite Index | 22.20% | |||
Fund Category: Morningstar Target Date 2031-2035 | 19.61% | |||
Performance Details | pages 18-19 | |||
Schwab Target 2040 Fund (Ticker Symbol: SWERX) | 24.55% | |||
Target 2040 Composite Index | 23.77% | |||
Fund Category: Morningstar Target Date 2036-2040 | 19.78% | |||
Performance Details | pages 20-21 | |||
Schwab Target 2045 Fund2 (Ticker Symbol: SWMRX) | 16.60% | |||
Target 2045 Composite Index | 16.51% | |||
Fund Category: Morningstar Target Date 2041-2045 | 13.82% | |||
Performance Details | pages 22-23 | |||
Schwab Target 2050 Fund2 (Ticker Symbol: SWNRX) | 17.20% | |||
Target 2050 Composite Index | 17.03% | |||
Fund Category: Morningstar Target Date 2046-2050 | 13.37% | |||
Performance Details | pages 24-25 | |||
Schwab Target 2055 Fund2 (Ticker Symbol: SWORX) | 17.40% | |||
Target 2055 Composite Index | 17.34% | |||
Fund Category: Morningstar Target Date 2051-2055 | 14.61% | |||
Performance Details | pages 26-27 | |||
Minimum Initial Investment3 | $ | 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.
The components that make up each of the composite indices may vary over time. For index definitions, please see the Glossary.
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.
1 | The report period covers the 12 months beginning November 1, 2012 through October 31, 2013, except where noted. | |
2 | Total returns are since the fund’s inception date of January 23, 2013. | |
3 | 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/0000950123-14-000021/f30154ctpchandom.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 goals, and for reading this annual report concerning the Schwab Target Funds. Within each fund is a mix of active, passive, proprietary, and third-party strategies. The funds are professionally managed according to projected retirement dates, and rebalanced to become more conservative as a target date approaches and beyond.
Turning to the 12 months ended October 31, 2013, the returns of the funds reflected a rally by stocks in U.S. and developed international markets, combined with mostly negative returns by bonds. At the center of these performances were efforts undertaken by the Federal Reserve, the European Central Bank, the Bank of Japan, and many other central banks to keep interest rates low and stimulate economic growth. Stocks generally benefitted from these policies. Signs of improvement in the U.S. led the Fed to initially consider “tapering” its stimulative economic efforts. Stocks generally fell in response to this potential policy shift, and long-term bond yields rose, while a brief U.S. federal government shutdown and budgetary gridlock created some uncertainty in the financial markets late in the reporting period.
However, the Fed’s anticipated tapering failed to materialize, and stocks resumed their rally, while long-term bond yields generally remained elevated. In addition, global real estate securities and emerging market stocks generated
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2013
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 27.18% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 36.28% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 26.88% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | −1.08% | 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/0000950123-14-000021/f30154ctcaptst05.gif)
Index figures assume dividends and distributions were reinvested, and do not include trading and management costs, which would lower performance. Indices are unmanaged, do not incur management fees, costs and expenses, and you cannot invest in them directly. Remember that past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
Schwab Target Funds 5
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From the President continued
Turning to the 12 months ended October 31, 2013, the returns of the funds reflected a rally by stocks in U.S. and developed international markets, combined with mostly negative returns by bonds.
modest returns for the reporting period compared with stocks in developed markets. Amid this backdrop, the Dow Jones U.S. Total Stock Market Index returned 28.9% and the MSCI EAFE Index returned 27.4%. Among bonds, the Barclays U.S. Aggregate Bond Index returned -1.1%.
For more information about the Schwab Target Funds, please continue reading this report. In addition, you can find further details about the Schwab Target Funds and our other investment products by visiting 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/0000950123-14-000021/f30154ctschandom.gif)
6 Schwab Target Funds
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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 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. |
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 7, 2013, the 2010 Fund’s asset allocation was approximately 39% equity securities, 55% fixed income securities, and 6% cash and cash equivalents (including 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, 2013, the 2010 Fund returned 9.74%. The 2010 Fund’s internally calculated comparative index, the Target 2010 Composite Index (the composite index), returned 9.35%.
Market Highlights. Stocks enjoyed strong gains during the 12-month reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
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, with all seven positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund, which was the 2010 Fund’s largest U.S. equity allocation. The Schwab S&P 500 Index Fund, the Schwab Small-Cap Equity Fund, and the Schwab Core Equity Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%, contributing positively to the 2010 Fund’s relative performance.
The 2010 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2010 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. In spite of the relatively weak performance of emerging markets over the period, the 2010 Fund’s allocation to them was small, impacting performance minimally.
The 2010 Fund’s U.S. fixed income allocation detracted from total return, although two of its funds outperformed the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. The Natixis Loomis Sayles Investment Grade Bond Fund was the strongest contributor to relative performance; it comfortably outpaced the composite index’s fixed income benchmark. U.S. TIPS were particularly weak for the period; the Schwab Treasury Inflation Protected Securities Index Fund returned –6.7%, slightly underperforming the composite index’s Barclays U.S. TIPS Index, which returned –6.4%.
As of 10/31/13:
Statistics
Number of Holdings | 23 | |||
Portfolio Turnover Rate | 26% |
Asset Class Weightings % of Investments1
Fixed-Income Funds – Intermediate-Term Bond | 32.7% | |||
Equity Funds – Large-Cap | 22.6% | |||
Fixed-Income Funds – Short-Term Bond | 15.3% | |||
Equity Funds – International | 9.7% | |||
Equity Funds – Small-Cap | 5.5% | |||
Fixed Income Funds – Inflation-Protected Bond | 5.1% | |||
Money Market Funds | 3.2% | |||
Short-Term Investments | 3.2% | |||
Equity Funds – Global Real Estate | 1.9% | |||
Fixed-Income Funds – International Bond | 0.8% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Total Bond Market Fund | 20.9% | |||
Schwab Short-Term Bond Market Fund | 15.2% | |||
PIMCO Total Return Fund, Institutional Shares | 6.2% | |||
Laudus U.S. Large Cap Growth Fund | 6.2% | |||
Schwab Core Equity Fund | 5.2% | |||
Schwab Treasury Inflation Protected Securities Index Fund | 5.1% | |||
Schwab S&P 500 Index Fund | 5.0% | |||
Laudus International MarketMasters Fund, Select Shares | 3.9% | |||
Schwab Small-Cap Equity Fund | 3.8% | |||
TCW Relative Value Large Cap Fund | 3.4% | |||
Total | 74.9% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst10f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2010 Fund (7/1/05) | 9.74 | % | 9.21 | % | 4.73 | % | |||||||||
Target 2010 Composite Index | 9.35 | % | 9.70 | % | 5.67 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 28.86 | % | 16.01 | % | 7.53 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.74 | % | |||||||||
Fund Category: Morningstar Target Date 2000-2010 | 8.62 | % | 9.92 | % | 4.76 | % |
Fund Expense Ratios3: Net 0.55%; Gross 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.
For index definitions, please see the Glossary.
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 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
Table of Contents
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 7, 2013, the 2015 Fund’s asset allocation was approximately 46% equity securities, 48% fixed income securities, and 6% cash and cash equivalents (including money market funds). At its target date, the 2015 Fund’s allocation will be approximately 40% equity securities, 54% fixed income securities and 6% cash and cash equivalents (including 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, 2013, the 2015 Fund returned 12.06%. The 2015 Fund’s internally calculated comparative index, the Target 2015 Composite Index (the composite index), returned 11.47%.
Market Highlights. Stocks enjoyed strong gains during the 12-month reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
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, with all seven positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2015 Fund’s largest equity allocation. The Schwab Small-Cap Equity Fund, Schwab S&P 500 Index Fund and Schwab Core Equity Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%, contributing positively to the 2015 Fund’s relative performance.
The 2015 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2015 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. In spite of the relatively weak performance of emerging markets over the period, the 2015 Fund’s allocation to them was small, impacting performance minimally.
The 2015 Fund’s U.S. fixed income allocation detracted from total return, although two of its funds outperformed the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. The Natixis Loomis Sayles Investment Grade Bond Fund was the strongest contributor to relative performance; it comfortably outpaced the composite index’s fixed income benchmark. U.S. TIPS were particularly weak for the period; the Schwab Treasury Inflation Protected Securities Index Fund returned –6.7%, slightly underperforming the composite index’s Barclays U.S. TIPS Index, which returned –6.4%.
As of 10/31/13:
Statistics
Number of Holdings | 23 | |||
Portfolio Turnover Rate | 16% |
Asset Class Weightings % of Investments1
Fixed-Income Funds – Intermediate-Term Bond | 30.2% | |||
Equity Funds – Large-Cap | 26.9% | |||
Fixed-Income Funds – Short-Term Bond | 11.9% | |||
Equity Funds – International | 11.6% | |||
Equity Funds – Small-Cap | 6.6% | |||
Fixed Income Funds – Inflation Protected Bond | 4.3% | |||
Short-Term Investments | 3.0% | |||
Equity Funds – Global Real Estate | 2.3% | |||
Money Market Funds | 2.1% | |||
Fixed Income Funds – International Bond | 1.1% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Total Bond Market Fund | 17.0% | |||
Schwab Short-Term Bond Market Fund | 11.9% | |||
Laudus U.S. Large Cap Growth Fund | 7.2% | |||
PIMCO Total Return Fund, Institutional Shares | 6.9% | |||
Schwab Core Equity Fund | 6.5% | |||
Schwab S&P 500 Index Fund | 5.9% | |||
Laudus International MarketMasters Fund, Select Shares | 4.5% | |||
Schwab Small-Cap Equity Fund | 4.5% | |||
Schwab Treasury Inflation Protected Securities Index Fund | 4.3% | |||
TCW Relative Value Large Cap Fund | 3.9% | |||
Total | 72.6% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst15f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2015 Fund (3/12/08) | 12.06 | % | 10.54 | % | 5.39 | % | |||||||||
Target 2015 Composite Index | 11.47 | % | 10.79 | % | 5.28 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 28.86 | % | 16.01 | % | 8.25 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.95 | % | |||||||||
Fund Category: Morningstar Target Date 2011-2015 | 10.19 | % | 10.47 | % | 4.61 | % |
Fund Expense Ratios3: Net 0.61%; 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.
For index definitions, please see the Glossary.
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 expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.61%. 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 7, 2013, the 2020 Fund’s asset allocation was approximately 59% equity securities, 37% fixed income securities, and 4% cash and cash equivalents (including money market funds). At its target date, the 2020 Fund’s allocation will be approximately 40% equity securities, 54% fixed income securities and 6% cash and cash equivalents (including 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, 2013, the 2020 Fund returned 15.72%. The 2020 Fund’s internally calculated comparative index, the Target 2020 Composite Index (the composite index), returned 15.06%.
Market Highlights. Stocks enjoyed strong gains during the 12-month reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
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, with all seven positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2020 Fund’s largest equity allocation. The Schwab Small-Cap Equity Fund and Schwab Core Equity Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%, contributing positively to the 2020 Fund’s relative performance.
The 2020 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2020 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. In spite of the relatively weak performance of emerging markets over the period, the 2020 Fund’s allocation to them was small, impacting performance minimally.
The 2020 Fund’s U.S. fixed income allocation detracted from total return, although two of its funds outperformed the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. The Natixis Loomis Sayles Investment Grade Bond Fund was the strongest contributor to relative performance; it comfortably outpaced the comparative index’s fixed income benchmark. U.S. TIPS were particularly weak for the period; the Schwab Treasury Inflation Protected Securities Index Fund returned –6.7%, slightly underperforming the composite index’s Barclays U.S. TIPS Index, which returned –6.4%.
As of 10/31/13:
Statistics
Number of Holdings | 22 | |||
Portfolio Turnover Rate | 14% |
Asset Class Weightings % of Investments1
Equity Funds – Large Cap | 34.1% | |||
Fixed-Income Funds – Intermediate-Term Bond | 24.8% | |||
Equity Funds – International | 14.6% | |||
Equity Funds – Small-Cap | 8.4% | |||
Fixed-Income Funds – Short-Term Bond | 7.1% | |||
Short-Term Investments | 3.9% | |||
Equity Funds -Global Real Estate | 2.9% | |||
Fixed Income Funds – Inflation Protected Bond | 2.9% | |||
Fixed-Income Funds – International Bond | 1.3% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Schwab Total Bond Market Fund | 11.3% | |||
Laudus U.S. Large Cap Growth Fund | 9.0% | |||
Schwab Core Equity Fund | 8.4% | |||
Schwab S&P 500 Index Fund | 7.6% | |||
PIMCO Total Return Fund, Institutional Shares | 7.2% | |||
Schwab Short-Term Bond Market Fund | 7.1% | |||
Laudus International MarketMasters Fund, Select Shares | 5.7% | |||
Schwab Small-Cap Equity Fund | 5.6% | |||
TCW Relative Value Large Cap Fund | 4.8% | |||
Schwab Dividend Equity Fund | 4.3% | |||
Total | 71.0% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst20f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2020 Fund (7/1/05) | 15.72 | % | 12.07 | % | 6.09 | % | |||||||||
Target 2020 Composite Index | 15.06 | % | 11.95 | % | 6.47 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 28.86 | % | 16.01 | % | 7.53 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.74 | % | |||||||||
Fund Category: Morningstar Target Date 2016-2020 | 11.86 | % | 11.23 | % | 4.90 | % |
Fund Expense Ratios3: Net 0.67%; Gross 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.
For index definitions, please see the Glossary.
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 expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.67%. 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 7, 2013, the 2025 Fund’s asset allocation was approximately 68% equity securities, 29% fixed income securities, and 3% cash and cash equivalents (including money market funds). At its target date, the 2025 Fund’s allocation will be approximately 40% equity securities, 54% fixed income securities and 6% cash and cash equivalents (including 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, 2013, the 2025 Fund returned 18.54%. The 2025 Fund’s internally calculated comparative index, the Target 2025 Composite Index (the composite index), returned 17.79%.
Market Highlights. Stocks enjoyed strong gains during the 12-month reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
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, with all seven positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2025 Fund’s largest equity allocation. The Schwab Core Equity Fund, Schwab Small-Cap Equity Fund and Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%, contributing positively to the 2025 Fund’s relative performance.
The 2025 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2025 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. In spite of the relatively weak performance of emerging markets over the period, the 2025 Fund’s allocation to them was small, impacting performance minimally.
The 2025 Fund’s U.S. fixed income allocation detracted from total return, although two of its funds outperformed the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. The Natixis Loomis Sayles Investment Grade Bond Fund was the strongest contributor to relative performance; it comfortably outpaced the comparative index’s fixed income benchmark. U.S. TIPS were particularly weak for the period; the Schwab Treasury Inflation Protected Securities Index Fund returned –6.7%, slightly underperforming the composite index’s Barclays U.S. TIPS Index, which returned –6.4%.
As of 10/31/13:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 10% |
Asset Class Weightings % of Investments1
Equity Funds – Large Cap | 39.5% | |||
Fixed-Income Funds – Intermediate-Term Bond | 19.9% | |||
Equity Funds – International | 16.8% | |||
Equity Funds – Small-Cap | 9.8% | |||
Fixed-Income Funds – Short-Term Bond | 4.5% | |||
Equity Funds – Global Real Estate | 3.4% | |||
Short-Term Investments | 2.9% | |||
Fixed-Income Funds – Inflation-Protected Bond | 2.0% | |||
Fixed-Income Funds – International Bond | 1.2% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Laudus U.S. Large Cap Growth Fund | 10.4% | |||
Schwab Core Equity Fund | 9.9% | |||
Schwab S&P 500 Index Fund | 8.8% | |||
Schwab Total Bond Market Fund | 7.5% | |||
PIMCO Total Return Fund, Institutional Shares | 6.7% | |||
Laudus International MarketMasters Fund, Select Shares | 6.5% | |||
Schwab Small-Cap Equity Fund | 6.5% | |||
TCW Relative Value Large Cap Fund | 5.5% | |||
Schwab Dividend Equity Fund | 5.0% | |||
Schwab Short-Term Bond Market Fund | 4.5% | |||
Total | 71.3% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst25f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2025 Fund (3/12/08) | 18.54 | % | 13.30 | % | 7.35 | % | |||||||||
Target 2025 Composite Index | 17.79 | % | 12.72 | % | 6.40 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 28.86 | % | 16.01 | % | 8.25 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.95 | % | |||||||||
Fund Category: Morningstar Target Date 2021-2025 | 15.31 | % | 12.31 | % | 5.22 | % |
Fund Expense Ratios3: Net 0.72%; 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.
For index definitions, please see the Glossary.
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 expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.72%. 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 7, 2013, the 2030 Fund’s asset allocation was approximately 76% equity securities, 21% fixed income securities, and 3% cash and cash equivalents (including money market funds). At its target date, the 2030 Fund’s allocation will be approximately 40% equity securities, 54% fixed income securities and 6% cash and cash equivalents (including 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, 2013, the 2030 Fund returned 20.73%. The 2030 Fund’s internally calculated comparative index, the Target 2030 Composite Index (the composite index), returned 20.07%.
Market Highlights. Stocks enjoyed strong gains during the 12-month reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
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, with all seven positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2030 Fund’s largest equity allocation. The Schwab Core Equity Fund, Schwab Small-Cap Equity Fund and Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%, contributing positively to the 2030 Fund’s relative performance.
The 2030 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2030 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. In spite of the relatively weak performance of emerging markets over the period, the 2030 Fund’s allocation to them was small, impacting performance minimally.
The 2030 Fund’s U.S. fixed income allocation detracted from total return, although two of its funds outperformed the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. The Natixis Loomis Sayles Investment Grade Bond Fund was the strongest contributor to relative performance; it comfortably outpaced the comparative index’s fixed income benchmark. U.S. TIPS were particularly weak for the period; the Schwab Treasury Inflation Protected Securities Index Fund returned –6.7%, slightly underperforming the composite index’s Barclays U.S. TIPS Index, which returned –6.4%.
As of 10/31/13:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 10% |
Asset Class Weightings % of Investments1
Equity Funds – Large-Cap | 43.8% | |||
Equity Funds – International | 18.6% | |||
Fixed-Income Funds – Intermediate-Term Bond | 15.2% | |||
Equity Funds – Small-Cap | 10.8% | |||
Equity Funds – Global Real Estate | 3.8% | |||
Fixed-Income Funds – Short-Term Bond | 2.8% | |||
Short-Term Investments | 2.5% | |||
Fixed-Income Funds – Inflation-Protected Bond | 1.5% | |||
Fixed-Income Funds – International Bond | 1.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Laudus U.S. Large Cap Growth Fund | 11.4% | |||
Schwab Core Equity Fund | 11.1% | |||
Schwab S&P 500 Index Fund | 9.7% | |||
Laudus International MarketMasters Fund, Select Shares | 7.2% | |||
Schwab Small-Cap Equity Fund | 7.2% | |||
TCW Relative Value Large Cap Fund | 6.0% | |||
PIMCO Total Return Fund, Institutional Shares | 5.6% | |||
Schwab Dividend Equity Fund | 5.5% | |||
Schwab Total Bond Market Fund | 4.8% | |||
Schwab Global Real Estate Fund | 3.8% | |||
Total | 72.3% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst30f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2030 Fund (7/1/05) | 20.73 | % | 13.81 | % | 6.87 | % | |||||||||
Target 2030 Composite Index | 20.07 | % | 13.28 | % | 6.97 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 28.86 | % | 16.01 | % | 7.53 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.74 | % | |||||||||
Fund Category: Morningstar Target Date 2026-2030 | 16.66 | % | 12.50 | % | 5.16 | % |
Fund Expense Ratios3: Net 0.75%; 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.
For index definitions, please see the Glossary.
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 expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.75%. 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 7, 2013, the 2035 Fund’s asset allocation was approximately 83% equity securities, 15% fixed income securities, and 2% cash and cash equivalents (including money market funds). At its target date, the 2035 Fund’s allocation will be approximately 40% equity securities, 54% fixed income securities and 6% cash and cash equivalents (including 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, 2013, the 2035 Fund returned 23.02%. The 2035 Fund’s internally calculated comparative index, the Target 2035 Composite Index (the composite index), returned 22.20%.
Market Highlights. Stocks enjoyed strong gains during the 12-month reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
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, with all seven positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2035 Fund’s largest equity allocation. The Schwab Core Equity Fund, Schwab Small-Cap Equity Fund and Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%, contributing positively to the 2035 Fund’s relative performance.
The 2035 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2035 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. In spite of the relatively weak performance of emerging markets over the period, the 2035 Fund’s allocation to them was small, impacting performance minimally.
The 2035 Fund’s U.S. fixed income allocation detracted from total return, although two of its funds outperformed the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. The Natixis Loomis Sayles Investment Grade Bond Fund was the strongest contributor to relative performance; it comfortably outpaced the comparative index’s fixed income benchmark. U.S. TIPS were particularly weak for the period; the Schwab Treasury Inflation Protected Securities Index Fund returned –6.7%, slightly underperforming the composite index’s Barclays U.S. TIPS Index, which returned –6.4%.
As of 10/31/13:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 5% |
Asset Class Weightings % of Investments1
Equity Funds – Large-Cap | 47.7% | |||
Equity Funds – International | 20.3% | |||
Equity Funds – Small-Cap | 11.8% | |||
Fixed-Income Funds – Intermediate-Term Bond | 10.5% | |||
Equity Funds – Global Real Estate | 4.2% | |||
Short-Term Investments | 2.3% | |||
Fixed-Income Funds – Short-Term Bond | 1.8% | |||
Fixed-Income Funds – Inflation-Protected Bond | 0.8% | |||
Fixed-Income Funds – International Bond | 0.6% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Laudus U.S. Large Cap Growth Fund | 12.4% | |||
Schwab Core Equity Fund | 12.2% | |||
Schwab S&P 500 Index Fund | 10.6% | |||
Laudus International MarketMasters Fund, Select Shares | 7.8% | |||
Schwab Small-Cap Equity Fund | 7.8% | |||
TCW Relative Value Large Cap Fund | 6.5% | |||
Schwab Dividend Equity Fund | 5.9% | |||
PIMCO Total Return Fund, Institutional Shares | 4.3% | |||
Schwab Global Real Estate Fund | 4.2% | |||
William Blair International Small Cap Growth Fund, Institutional Shares | 4.0% | |||
Total | 75.7% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst35f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2035 Fund (3/12/08) | 23.02 | % | 14.57 | % | 7.85 | % | |||||||||
Target 2035 Composite Index | 22.20 | % | 13.85 | % | 6.90 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 28.86 | % | 16.01 | % | 8.25 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.95 | % | |||||||||
Fund Category: Morningstar Target Date 2031-2035 | 19.61 | % | 13.26 | % | 5.50 | % |
Fund Expense Ratios3: Net 0.79%; Gross 0.92%
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
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 expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.79%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 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 7, 2013, the 2040 Fund’s asset allocation was approximately 88% equity securities, 10% fixed income securities, and 2% cash and cash equivalents (including money market funds). At its target date, the 2040 Fund’s allocation will be approximately 40% equity securities, 54% fixed income securities and 6% cash and cash equivalents (including 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, 2013, the 2040 Fund returned 24.55%. The 2040 Fund’s internally calculated comparative index, the Target 2040 Composite Index (the composite index), returned 23.77%.
Market Highlights. Stocks enjoyed strong gains during the 12-month reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
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, with all seven positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2040 Fund’s largest equity allocation. The Schwab Core Equity Fund, Schwab Small-Cap Equity Fund and Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%, contributing positively to the 2040 Fund’s relative performance.
The 2040 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2040 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. In spite of the relatively weak performance of emerging markets over the period, the 2040 Fund’s allocation to them was small, impacting performance minimally.
The 2040 Fund’s U.S. fixed income allocation detracted from total return, although two of its funds outperformed the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. The Natixis Loomis Sayles Investment Grade Bond Fund was the strongest contributor to relative performance; it comfortably outpaced the comparative index’s fixed income benchmark. Non–U.S. fixed income was particularly weak, with the Laudus Mondrian International Fixed Income Fund returning –7.5%. U.S. TIPS were particularly weak for the period; the Schwab Treasury Inflation Protected Securities Index Fund returned –6.7%, slightly underperforming the composite index’s Barclays U.S. TIPS Index, which returned –6.4%.
As of 10/31/13:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 6% |
Asset Class Weightings % of Investments1
Equity Funds – Large-Cap | 50.7% | |||
Equity Funds – International | 21.5% | |||
Equity Funds – Small-Cap | 12.5% | |||
Fixed-Income Funds – Intermediate-Term Bond | 6.7% | |||
Equity Funds – Global Real Estate | 4.4% | |||
Short-Term Investments | 2.1% | |||
Fixed-Income Funds – Short-Term Bond | 1.3% | |||
Fixed-Income Funds – Inflation-Protected Bond | 0.5% | |||
Fixed-Income Funds – International Bond | 0.3% | |||
Total | 100.0% |
Top Holdings % of Net Assets2,3
Laudus U.S. Large Cap Growth Fund | 13.2% | |||
Schwab Core Equity Fund | 13.0% | |||
Schwab S&P 500 Index Fund | 11.3% | |||
Schwab Small-Cap Equity Fund | 8.3% | |||
Laudus International MarketMasters Fund, Select Shares | 8.3% | |||
TCW Relative Value Large Cap Fund | 6.9% | |||
Schwab Dividend Equity Fund | 6.3% | |||
Schwab Global Real Estate Fund | 4.4% | |||
William Blair International Small Cap Growth Fund, Institutional Shares | 4.3% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.2% | |||
Total | 80.2% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 10/31/13
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, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst40f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2040 Fund (7/1/05) | 24.55 | % | 14.88 | % | 7.41 | % | |||||||||
Target 2040 Composite Index | 23.77 | % | 14.28 | % | 7.32 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 28.86 | % | 16.01 | % | 7.53 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.74 | % | |||||||||
Fund Category: Morningstar Target Date 2036-2040 | 19.78 | % | 13.18 | % | 5.49 | % |
Fund Expense Ratios3: Net 0.81%; Gross 0.87%
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.
For index definitions, please see the Glossary.
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 expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.81%. 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
Schwab Target 2045 Fund
The Schwab Target 2045 Fund (the 2045 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 2045 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation will be adjusted annually by the investment adviser; at the fund’s inception on January 23, 2013, the 2045 Fund’s asset allocation was approximately 91% equity securities, 7% fixed income securities, and 2% cash and cash equivalents (including money market funds). At its target date, the 2045 Fund’s allocation will be approximately 40% equity securities, 54% fixed-income securities and 6% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2045 Fund’s Portfolio Holdings included in this report.)
For the period since the fund’s inception through October 31, 2013, the 2045 Fund returned 16.60%. The 2045 Fund’s internally calculated comparative index, the Target 2045 Composite Index (the composite index), returned 16.51%.
Market Highlights. Stocks enjoyed strong gains during the abbreviated reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
Positioning and Strategies. The 2045 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2045 Fund’s U.S. equity exposures provided the greatest contribution to total return, with all positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2045 Fund’s largest equity allocation. The Schwab Core Equity Fund, Schwab S&P 500 Index Fund and Schwab Small-Cap Equity Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund, the Laudus Small-Cap MarketMasters Fund, and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 20.3%.
The 2045 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2045 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. The 2045 Fund’s exposure to emerging markets also detracted from relative performance, with the Laudus Mondrian Emerging Markets Fund (Institutional Shares) posting a negative return and underperforming the comparative index’s emerging markets allocation, the MSCI Emerging Markets Index.
Despite the weak performance of fixed income over the period, the 2045 Fund’s exposure to it was small, so the impact was minimal, albeit negative.
As of 10/31/13:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate1 | 39% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 52.3% | |||
Equity Funds – International | 22.2% | |||
Equity Funds – Small-Cap | 12.9% | |||
Fixed-Income Funds – Intermediate-Term Bond | 4.6% | |||
Equity Funds��– Global Real Estate | 4.6% | |||
Short-Term Investments | 2.1% | |||
Fixed-Income Funds – Short-Term Bond | 1.0% | |||
Fixed-Income Funds – Inflation-Protected Bond | 0.2% | |||
Fixed-Income Funds – International Bond | 0.1% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Laudus U.S. Large Cap Growth Fund | 13.5% | |||
Schwab Core Equity Fund | 13.3% | |||
Schwab S&P 500 Index Fund | 11.8% | |||
Schwab Small-Cap Equity Fund | 8.5% | |||
Laudus International MarketMasters Fund, Select Shares | 8.5% | |||
TCW Relative Value Large Cap Fund | 7.1% | |||
Schwab Dividend Equity Fund | 6.5% | |||
Schwab Global Real Estate Fund | 4.6% | |||
William Blair International Small Cap Growth Fund, Institutional Shares | 4.4% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.4% | |||
Total | 82.6% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 | Not annualized. | |
2 | 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. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | The holdings listed exclude any temporary liquidity investments. |
22 Schwab Target Funds
Table of Contents
Schwab Target 2045 Fund
Performance and Fund Facts as of 10/31/13
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 23, 2013 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst45f.gif)
Total Returns1,2
Fund and Inception Date | Since Inception | ||||
Fund: Schwab Target 2045 Fund (1/23/13) | 16.60 | % | |||
Target 2045 Composite Index | 16.51 | % | |||
Dow Jones U.S. Total Stock Market Index | 20.32 | % | |||
Barclays U.S. Aggregate Bond Index | -0.92 | % | |||
Fund Category: Morningstar Target Date 2041-2045 | 13.82 | % |
Fund Expense Ratios3: Net 0.82%; Gross 0.95%
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.
For index definitions, please see the Glossary.
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 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 23
Table of Contents
Schwab Target 2050 Fund
The Schwab Target 2050 Fund (the 2050 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 2050 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation will be adjusted annually by the investment adviser; at the fund’s inception on January 23, 2013, the 2050 Fund’s asset allocation was approximately 94% equity securities, 4% fixed income securities, and 2% cash and cash equivalents (including money market funds). At its target date, the 2050 Fund’s allocation will be approximately 40% equity securities, 54% fixed income securities and 6% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2050 Fund’s Portfolio Holdings included in this report.)
For the period since the fund’s inception through October 31, 2013, the 2050 Fund returned 17.20%. The 2050 Fund’s internally calculated comparative index, the Target 2050 Composite Index (the composite index), returned 17.03%.
Market Highlights. Stocks enjoyed strong gains during the abbreviated reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
Positioning and Strategies. The 2050 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2050 Fund’s U.S. equity exposures provided the greatest contribution to total return, with all positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2050 Fund’s largest equity allocation. The Schwab Core Equity Fund, Schwab S&P 500 Index Fund and Schwab Small-Cap Equity Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund, the Laudus Small-Cap MarketMasters Fund, and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 20.3%.
The 2050 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2050 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. The 2050 Fund’s exposure to emerging markets also detracted from relative performance, with the Laudus Mondrian Emerging Markets Fund (Institutional Shares) posting a negative return and underperforming the comparative index’s emerging markets allocation, the MSCI Emerging Markets Index.
Despite the weak performance of fixed income over the period, the 2050 Fund’s exposure to it was small, so the impact was minimal, albeit negative.
As of 10/31/13:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate1 | 40% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 53.7% | |||
Equity Funds – International | 22.7% | |||
Equity Funds – Small-Cap | 13.3% | |||
Equity Funds – Global Real Estate | 4.7% | |||
Fixed-Income Funds – Intermediate-Term Bond | 2.8% | |||
Short-Term Investments | 2.2% | |||
Fixed-Income Funds – Short-Term Bond | 0.6% | |||
Fixed-Income Funds – Inflation-Protected Bond3 | 0.0% | |||
Fixed-Income Funds – International Bond3 | 0.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets4,5
Laudus U.S. Large Cap Growth Fund | 13.9% | |||
Schwab Core Equity Fund | 13.8% | |||
Schwab S&P 500 Index Fund | 12.0% | |||
Schwab Small-Cap Equity Fund | 8.8% | |||
Laudus International MarketMasters Fund, Select Shares | 8.7% | |||
TCW Relative Value Large Cap Fund | 7.3% | |||
Schwab Dividend Equity Fund | 6.8% | |||
Schwab Global Real Estate Fund | 4.7% | |||
William Blair International Small Cap Growth Fund, Institutional Shares | 4.5% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.5% | |||
Total | 85.0% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 | Not annualized. | |
2 | 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. | |
3 | Less than 0.05%. | |
4 | This list is not a recommendation of any security by the investment adviser. | |
5 | The holdings listed exclude any temporary liquidity investments. |
24 Schwab Target Funds
Table of Contents
Schwab Target 2050 Fund
Performance and Fund Facts as of 10/31/13
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 23, 2013 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst50f.gif)
Total Returns1,2
Fund and Inception Date | Since Inception | ||||
Fund: Schwab Target 2050 Fund (1/23/13) | 17.20 | % | |||
Target 2050 Composite Index | 17.03 | % | |||
Dow Jones U.S. Total Stock Market Index | 20.32 | % | |||
Barclays U.S. Aggregate Bond Index | -0.92 | % | |||
Fund Category: Morningstar Target Date 2046-2050 | 13.37 | % |
Fund Expense Ratios3: Net 0.83%; Gross 0.96%
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.
For index definitions, please see the Glossary.
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 expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.83%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 25
Table of Contents
Schwab Target 2055 Fund
The Schwab Target 2055 Fund (the 2055 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 2055 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation will be adjusted annually by the investment adviser; as the fund’s inception on January 23, 2013, the 2055 Fund’s asset allocation was approximately 95% equity securities, 3% fixed income securities, and 2% cash and cash equivalents (including money market funds). At its target date, the 2055 Fund’s allocation will be approximately 40% equity securities, 54% fixed income securities and 6% cash and cash equivalents (including money market funds). (For portfolio allocations as of the end of this reporting period, please see the 2055 Fund’s Portfolio Holdings included in this report.)
For the period since the fund’s inception through October 31, 2013, the 2055 Fund returned 17.40%. The 2055 Fund’s internally calculated comparative index, the Target 2055 Composite Index (the composite index), returned 17.34%.
Market Highlights. Stocks enjoyed strong gains during the abbreviated reporting period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. Developed international equity markets performed on par with broad-based domestic ones, but emerging markets lagged significantly.
Positioning and Strategies. The 2055 Fund’s asset allocations were broadly in line with those of the composite index over the reporting period.
At an asset-class level, the 2055 Fund’s U.S. equity exposures provided the greatest contribution to total return, with all positions posting strong positive returns. The top contributor was the Laudus U.S. Large Cap Growth Fund—the 2055 Fund’s largest equity allocation. The Schwab Core Equity Fund, Schwab S&P 500 Index Fund and Schwab Small-Cap Equity Fund also contributed notably. On a relative basis, the Laudus U.S. Large Cap Growth Fund, the Laudus Small-Cap MarketMasters Fund, and the Schwab Small-Cap Equity Fund outperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 20.3%.
The 2055 Fund’s international equity allocation also contributed positively to total return, with all underlying funds boosting total return. The largest contribution came from the Laudus International MarketMasters Fund (Select Shares)—the 2055 Fund’s largest international equity allocation. The William Blair International Small Cap Growth Fund (Institutional Shares) also contributed strongly. On a relative basis, both funds outpaced the composite index’s international equity allocation component, the MSCI EAFE Index. The 2055 Fund’s exposure to emerging markets also detracted from relative performance, with the Laudus Mondrian Emerging Markets Fund (Institutional Shares) posting a negative return and underperforming the comparative index’s emerging markets allocation, the MSCI Emerging Markets Index.
Despite the weak performance of fixed income over the period, the 2055 Fund’s exposure to it was small, so the impact was minimal, albeit negative.
As of 10/31/13:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate1 | 12% |
Asset Class Weightings % of Investments2
Equity Funds – Large – Cap | 54.5% | |||
Equity Funds – International | 23.1% | |||
Equity Funds – Small-Cap | 13.5% | |||
Equity Funds – Global Real Estate | 4.8% | |||
Short-Term Investments | 2.2% | |||
Fixed-Income Funds – Intermediate-Term Bond | 1.6% | |||
Fixed-Income Funds – Short-Term Bond | 0.3% | |||
Fixed-Income Funds – International Bond3 | 0.0% | |||
Fixed-Income Funds – Inflation-Protected Bond3 | 0.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets4,5
Laudus U.S. Large Cap Growth Fund | 14.1% | |||
Schwab Core Equity Fund | 14.1% | |||
Schwab S&P 500 Index Fund | 12.1% | |||
Schwab Small-Cap Equity Fund | 8.9% | |||
Laudus International MarketMasters Fund, Select Shares | 8.9% | |||
TCW Relative Value Large Cap Fund | 7.3% | |||
Schwab Dividend Equity Fund | 6.9% | |||
Schwab Global Real Estate Fund | 4.8% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.6% | |||
William Blair International Small Cap Growth Fund, Institutional Shares | 4.6% | |||
Total | 86.3% |
Management’s views and portfolio holdings may have changed since the report date.
The Laudus 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 | Not annualized. | |
2 | 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. | |
3 | Less than 0.05%. | |
4 | This list is not a recommendation of any security by the investment adviser. | |
5 | The holdings listed exclude any temporary liquidity investments. |
26 Schwab Target Funds
Table of Contents
Schwab Target 2055 Fund
Performance and Fund Facts as of 10/31/13
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 23, 2013 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctst55f.gif)
Total Returns1,2
Fund and Inception Date | Since Inception | ||||
Fund: Schwab Target 2055 Fund (1/23/13) | 17.40 | % | |||
Target 2055 Composite Index | 17.34 | % | |||
Dow Jones U.S. Total Stock Market Index | 20.32 | % | |||
Barclays U.S. Aggregate Bond Index | -0.92 | % | |||
Fund Category: Morningstar Target Date 2051-2055 | 14.61 | % |
Fund Expense Ratios3: Net 0.83%; Gross 0.96%
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.
For index definitions, please see the Glossary.
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 expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.83%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 27
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2013 and held through October 31, 2013.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/13 | at 10/31/13 | 5/1/13–10/31/13 | |||||||||||||
Schwab Target 2010 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,032.10 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2015 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,041.80 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2020 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,057.90 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2025 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,070.70 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2030 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,080.10 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2035 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,090.30 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2040 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,097.00 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2045 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,100.00 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2050 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,104.60 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2055 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,105.50 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights 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 365 days of the fiscal year. |
28 Schwab Target Funds
Table of Contents
Schwab Target 2010 Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.10 | 10.56 | 10.34 | 9.46 | 8.76 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.22 | 0.23 | 0.23 | 0.28 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.85 | 0.57 | 0.24 | 0.89 | 0.75 | |||||||||||||||||
Total from investment operations | 1.06 | 0.79 | 0.47 | 1.12 | 1.03 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.25 | ) | (0.25 | ) | (0.24 | ) | (0.33 | ) | ||||||||||||
Net asset value at end of period | 11.91 | 11.10 | 10.56 | 10.34 | 9.46 | |||||||||||||||||
Total return (%) | 9.74 | 7.63 | 4.63 | 1 | 11.99 | 12.24 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses2 | — | — | — | 0.00 | 3 | 0.03 | 4 | |||||||||||||||
Gross operating expenses2 | 0.18 | 0.18 | 0.14 | 0.16 | 0.16 | |||||||||||||||||
Net investment income (loss) | 1.77 | 1.95 | 2.11 | 2.21 | 3.04 | |||||||||||||||||
Portfolio turnover rate | 26 | 13 | 11 | 24 | 47 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 61 | 60 | 64 | 73 | 75 |
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 ratio.
See financial notes 29
Table of Contents
Schwab Target 2010 Fund
Portfolio Holdings as of October 31, 2013
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 | .8% | Other Investment Companies | 47,593,103 | 59,286,771 | ||||||||
3 | .1% | Short-Term Investments | 1,928,297 | 1,928,297 | ||||||||
99 | .9% | Total Investments | 49,521,400 | 61,215,068 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 36,632 | |||||||||
100 | .0% | Total Net Assets | 61,251,700 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.8% of net assets | ||||||||
Equity Funds 39.9% | ||||||||
Global Real Estate 2.0% | ||||||||
Schwab Global Real Estate Fund (a) | 174,459 | 1,191,554 | ||||||
International 9.7% | ||||||||
American Century International Growth Fund, Institutional Shares | 90,942 | 1,226,810 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 101,163 | 2,395,546 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 32,094 | 292,372 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 100,910 | 869,843 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 70,113 | 1,182,798 | ||||||
5,967,369 | ||||||||
Large-Cap 22.6% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 208,254 | 3,802,714 | ||||||
Schwab Core Equity Fund (a) | 136,377 | 3,199,412 | ||||||
Schwab Dividend Equity Fund (a) | 93,954 | 1,711,847 | ||||||
Schwab S&P 500 Index Fund (a) | 109,807 | 3,050,443 | ||||||
TCW Relative Value Large Cap Fund | 107,618 | 2,095,330 | ||||||
13,859,746 | ||||||||
Small-Cap 5.6% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 61,592 | 1,081,555 | ||||||
Schwab Small-Cap Equity Fund (a) | 93,116 | 2,315,797 | ||||||
3,397,352 | ||||||||
24,416,021 | ||||||||
Fixed-Income Funds 53.7% | ||||||||
Inflation-Protected Bond 5.1% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 276,755 | 3,107,960 | ||||||
Intermediate-Term Bond 32.6% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 141,405 | 1,756,249 | ||||||
PIMCO Total Return Fund, Institutional Shares | 350,240 | 3,817,613 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 160,330 | 1,635,370 | ||||||
Schwab Total Bond Market Fund (a) | 1,362,871 | 12,783,732 | ||||||
19,992,964 | ||||||||
International Bond 0.8% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 42,522 | 465,615 | ||||||
Short-Term Bond 15.2% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 1,006,011 | 9,335,780 | ||||||
32,902,319 | ||||||||
Money Market Fund 3.2% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.03% (a)(b) | 1,968,431 | 1,968,431 | ||||||
Total Other Investment Companies | ||||||||
(Cost $47,593,103) | 59,286,771 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.1% of net assets | ||||||||
Time Deposits 3.1% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/01/13 | 88,423 | 88,423 | ||||||
DNB | ||||||||
0.03%, 11/01/13 | 1,839,874 | 1,839,874 | ||||||
Total Short-Term Investments | ||||||||
(Cost $1,928,297) | 1,928,297 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $50,477,925 and the unrealized appreciation and depreciation were $10,827,255 and ($90,112), respectively, with a net unrealized appreciation of $10,737,143.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | The rate shown is the 7-day yield. |
30 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, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $59,286,771 | $— | $— | $59,286,771 | ||||||||||||
Short-Term Investments1 | — | 1,928,297 | — | 1,928,297 | ||||||||||||
Total | $59,286,771 | $1,928,297 | $— | $61,215,068 | ||||||||||||
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, 2013.
See financial notes 31
Table of Contents
Schwab Target 2010 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $39,617,680) | $49,207,971 | |||||
Investments in unaffiliated issuers, at value (cost $9,903,720) | + | 12,007,097 | ||||
Total investments, at value (cost $49,521,400) | 61,215,068 | |||||
Receivables: | ||||||
Investments sold | 200,000 | |||||
Fund shares sold | 56,364 | |||||
Dividends | 42,239 | |||||
Due from investment adviser | 730 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 1,716 | ||||
Total assets | 61,516,119 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 210,000 | |||||
Independent trustees’ fees | 1 | |||||
Fund shares redeemed | 23,998 | |||||
Accrued expenses | + | 30,420 | ||||
Total liabilities | 264,419 | |||||
Net Assets | ||||||
Total assets | 61,516,119 | |||||
Total liabilities | − | 264,419 | ||||
Net assets | $61,251,700 | |||||
Net Assets by Source | ||||||
Capital received from investors | 65,935,342 | |||||
Net investment income not yet distributed | 553,325 | |||||
Net realized capital losses | (16,930,635 | ) | ||||
Net unrealized capital appreciation | 11,693,668 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$61,251,700 | 5,141,223 | $11.91 |
32 See financial notes
Table of Contents
Schwab Target 2010 Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $748,134 | |||||
Dividends received from unaffiliated underlying funds | 311,615 | |||||
Interest | + | 578 | ||||
Total investment income | 1,060,327 | |||||
Expenses | ||||||
Professional fees | 35,594 | |||||
Transfer agent fees | 19,876 | |||||
Registration fees | 19,405 | |||||
Portfolio accounting fees | 16,388 | |||||
Independent trustees’ fees | 7,412 | |||||
Custodian fees | 4,703 | |||||
Shareholder reports | 2,232 | |||||
Other expenses | + | 2,035 | ||||
Total expenses | 107,645 | |||||
Expense reduction by CSIM | − | 107,645 | ||||
Net expenses | − | — | ||||
Net investment income | 1,060,327 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 117,376 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 114,772 | |||||
Net realized gains on sales of affiliated underlying funds | 1,477,941 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 280,459 | ||||
Net realized gains | 1,990,548 | |||||
Net change in unrealized appreciation on affiliated underlying funds | 2,120,751 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 463,236 | ||||
Net change in unrealized appreciation | + | 2,583,987 | ||||
Net realized and unrealized gains | 4,574,535 | |||||
Increase in net assets resulting from operations | $5,634,862 |
See financial notes 33
Table of Contents
Schwab Target 2010 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $1,060,327 | $1,222,844 | ||||||||
Net realized gains | 1,990,548 | 1,641,572 | ||||||||
Net change in unrealized appreciation | + | 2,583,987 | 1,770,890 | |||||||
Increase in net assets from operations | 5,634,862 | 4,635,306 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,315,027 | ) | ($1,479,450 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,476,821 | $16,885,894 | 1,010,257 | $10,890,550 | ||||||||||||||
Shares reinvested | 111,466 | 1,225,017 | 135,161 | 1,389,450 | ||||||||||||||
Shares redeemed | + | (1,819,181 | ) | (20,804,281 | ) | (1,834,755 | ) | (19,810,132 | ) | |||||||||
Net transactions in fund shares | (230,894 | ) | ($2,693,370 | ) | (689,337 | ) | ($7,530,132 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 5,372,117 | $59,625,235 | 6,061,454 | $63,999,511 | ||||||||||||||
Total increase or decrease | + | (230,894 | ) | 1,626,465 | (689,337 | ) | (4,374,276 | ) | ||||||||||
End of period | 5,141,223 | $61,251,700 | 5,372,117 | $59,625,235 | ||||||||||||||
Net investment income not yet distributed | $553,325 | $692,441 |
34 See financial notes
Table of Contents
Schwab Target 2015 Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.13 | 10.48 | 10.16 | 9.09 | 8.15 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.20 | 0.20 | 0.19 | 0.16 | 0.19 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.12 | 0.66 | 0.32 | 1.06 | 0.91 | |||||||||||||||||
Total from investment operations | 1.32 | 0.86 | 0.51 | 1.22 | 1.10 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.23 | ) | (0.21 | ) | (0.19 | ) | (0.15 | ) | (0.16 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.00 | )1 | ||||||||||||||||
Total distributions | (0.23 | ) | (0.21 | ) | (0.19 | ) | (0.15 | ) | (0.16 | ) | ||||||||||||
Net asset value at end of period | 12.22 | 11.13 | 10.48 | 10.16 | 9.09 | |||||||||||||||||
Total return (%) | 12.06 | 8.41 | 5.10 | 13.55 | 13.82 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses2 | — | — | — | 0.00 | 3 | 0.02 | 4 | |||||||||||||||
Gross operating expenses2 | 0.14 | 0.19 | 0.22 | 0.39 | 0.85 | |||||||||||||||||
Net investment income (loss) | 1.72 | 1.85 | 1.94 | 1.91 | 2.57 | |||||||||||||||||
Portfolio turnover rate | 16 | 13 | 16 | 13 | 39 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 94 | 70 | 53 | 37 | 17 |
1 Amount less than $0.01.
2 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
3 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
4 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended ratio.
See financial notes 35
Table of Contents
Schwab Target 2015 Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .8% | Other Investment Companies | 75,214,690 | 91,132,172 | ||||||||
3 | .0% | Short-Term Investments | 2,858,667 | 2,858,667 | ||||||||
99 | .8% | Total Investments | 78,073,357 | 93,990,839 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 206,749 | |||||||||
100 | .0% | Total Net Assets | 94,197,588 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.8% of net assets | ||||||||
Equity Funds 47.3% | ||||||||
Global Real Estate 2.3% | ||||||||
Schwab Global Real Estate Fund (a) | 317,511 | 2,168,599 | ||||||
International 11.5% | ||||||||
American Century International Growth Fund, Institutional Shares | 158,740 | 2,141,406 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 180,373 | 4,271,226 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 59,556 | 542,550 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 202,787 | 1,748,027 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 127,008 | 2,142,624 | ||||||
10,845,833 | ||||||||
Large-Cap 26.9% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 371,068 | 6,775,694 | ||||||
Schwab Core Equity Fund (a) | 259,908 | 6,097,451 | ||||||
Schwab Dividend Equity Fund (a) | 172,443 | 3,141,916 | ||||||
Schwab S&P 500 Index Fund (a) | 201,034 | 5,584,715 | ||||||
TCW Relative Value Large Cap Fund | 188,571 | 3,671,475 | ||||||
25,271,251 | ||||||||
Small-Cap 6.6% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 114,378 | 2,008,486 | ||||||
Schwab Small-Cap Equity Fund (a) | 168,847 | 4,199,229 | ||||||
6,207,715 | ||||||||
44,493,398 | ||||||||
Fixed-Income Funds 47.4% | ||||||||
Inflation-Protected Bond 4.3% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 359,131 | 4,033,041 | ||||||
Intermediate-Term Bond 30.1% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 246,931 | 3,066,883 | ||||||
PIMCO Total Return Fund, Institutional Shares | 596,606 | 6,503,002 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 271,173 | 2,765,959 | ||||||
Schwab Total Bond Market Fund (a) | 1,708,846 | 16,028,974 | ||||||
28,364,818 | ||||||||
International Bond 1.1% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 94,222 | 1,031,727 | ||||||
Short-Term Bond 11.9% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 1,208,786 | 11,217,537 | ||||||
44,647,123 | ||||||||
Money Market Fund 2.1% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.03% (a)(b) | 1,991,651 | 1,991,651 | ||||||
Total Other Investment Companies | ||||||||
(Cost $75,214,690) | 91,132,172 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.0% of net assets | ||||||||
Time Deposits 3.0% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/13 | 38,895 | 38,895 | ||||||
JPMorgan Chase | ||||||||
0.03%, 11/01/13 | 2,819,772 | 2,819,772 | ||||||
Total Short-Term Investments | ||||||||
(Cost $2,858,667) | 2,858,667 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $78,607,988 and the unrealized appreciation and depreciation were $15,478,838 and ($95,987), respectively, with a net unrealized appreciation of $15,382,851.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | The rate shown is the 7-day yield. |
36 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, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $91,132,172 | $— | $— | $91,132,172 | ||||||||||||
Short-Term Investments1 | — | 2,858,667 | — | 2,858,667 | ||||||||||||
Total | $91,132,172 | $2,858,667 | $— | $93,990,839 | ||||||||||||
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, 2013.
See financial notes 37
Table of Contents
Schwab Target 2015 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $60,158,300) | $73,606,782 | |||||
Investments in unaffiliated issuers, at value (cost $17,915,057) | + | 20,384,057 | ||||
Total investments, at value (cost $78,073,357) | 93,990,839 | |||||
Receivables: | ||||||
Investments sold | 210,000 | |||||
Fund shares sold | 353,899 | |||||
Dividends | 55,958 | |||||
Due from investment adviser | 797 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 1,284 | ||||
Total assets | 94,612,779 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 345,000 | |||||
Independent trustees’ fees | 1 | |||||
Fund shares redeemed | 37,631 | |||||
Accrued expenses | + | 32,559 | ||||
Total liabilities | 415,191 | |||||
Net Assets | ||||||
Total assets | 94,612,779 | |||||
Total liabilities | − | 415,191 | ||||
Net assets | $94,197,588 | |||||
Net Assets by Source | ||||||
Capital received from investors | 78,093,465 | |||||
Net investment income not yet distributed | 737,135 | |||||
Net realized capital losses | (550,494 | ) | ||||
Net unrealized capital appreciation | 15,917,482 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$94,197,588 | 7,709,259 | $12.22 |
38 See financial notes
Table of Contents
Schwab Target 2015 Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $982,143 | |||||
Dividends received from unaffiliated underlying funds | 440,536 | |||||
Interest | + | 1,004 | ||||
Total investment income | 1,423,683 | |||||
Expenses | ||||||
Professional fees | 36,005 | |||||
Registration fees | 23,983 | |||||
Transfer agent fees | 20,283 | |||||
Portfolio accounting fees | 16,821 | |||||
Independent trustees’ fees | 7,532 | |||||
Custodian fees | 5,182 | |||||
Shareholder reports | 4,211 | |||||
Other expenses | + | 2,197 | ||||
Total expenses | 116,214 | |||||
Expense reduction by CSIM | − | 116,214 | ||||
Net expenses | − | — | ||||
Net investment income | 1,423,683 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 154,082 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 118,541 | |||||
Net realized gains on sales of affiliated underlying funds | 213,245 | |||||
Net realized losses on sales of unaffiliated underlying funds | + | (109 | ) | |||
Net realized gains | 485,759 | |||||
Net change in unrealized appreciation on affiliated underlying funds | 6,099,303 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 1,261,539 | ||||
Net change in unrealized appreciation | + | 7,360,842 | ||||
Net realized and unrealized gains | 7,846,601 | |||||
Increase in net assets resulting from operations | $9,270,284 |
See financial notes 39
Table of Contents
Schwab Target 2015 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $1,423,683 | $1,127,669 | ||||||||
Net realized gains | 485,759 | 158,165 | ||||||||
Net change in unrealized appreciation | + | 7,360,842 | 3,608,686 | |||||||
Increase in net assets from operations | 9,270,284 | 4,894,520 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,464,548 | ) | ($1,073,035 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,361,988 | $39,062,080 | 2,292,650 | $24,620,260 | ||||||||||||||
Shares reinvested | 126,443 | 1,398,455 | 100,440 | 1,025,491 | ||||||||||||||
Shares redeemed | + | (2,040,270 | ) | (23,734,773 | ) | (1,182,917 | ) | (12,715,068 | ) | |||||||||
Net transactions in fund shares | 1,448,161 | $16,725,762 | 1,210,173 | $12,930,683 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 6,261,098 | $69,666,090 | 5,050,925 | $52,913,922 | ||||||||||||||
Total increase | + | 1,448,161 | 24,531,498 | 1,210,173 | 16,752,168 | |||||||||||||
End of period | 7,709,259 | $94,197,588 | 6,261,098 | $69,666,090 | ||||||||||||||
Net investment income not yet distributed | $737,135 | $644,418 |
40 See financial notes
Table of Contents
Schwab Target 2020 Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.94 | 11.13 | 10.80 | 9.63 | 8.59 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.22 | 0.22 | 0.20 | 0.24 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.62 | 0.82 | 0.34 | 1.18 | 1.08 | |||||||||||||||||
Total from investment operations | 1.84 | 1.04 | 0.56 | 1.38 | 1.32 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.26 | ) | (0.23 | ) | (0.23 | ) | (0.21 | ) | (0.28 | ) | ||||||||||||
Net asset value at end of period | 13.52 | 11.94 | 11.13 | 10.80 | 9.63 | |||||||||||||||||
Total return (%) | 15.72 | 9.52 | 5.18 | 14.47 | 15.89 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | 0.00 | 2 | 0.00 | 2 | 0.02 | 3 | ||||||||||||||
Gross operating expenses1 | 0.05 | 0.06 | 0.06 | 0.07 | 0.09 | |||||||||||||||||
Net investment income (loss) | 1.71 | 1.89 | 1.92 | 2.01 | 2.75 | |||||||||||||||||
Portfolio turnover rate | 14 | 13 | 15 | 15 | 48 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 415 | 306 | 273 | 240 | 198 |
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 ratio.
See financial notes 41
Table of Contents
Schwab Target 2020 Fund
Portfolio Holdings as of October 31, 2013
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 | 302,565,149 | 398,263,658 | ||||||||
3 | .8% | Short-Term Investments | 16,016,665 | 16,016,665 | ||||||||
99 | .9% | Total Investments | 318,581,814 | 414,280,323 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 241,978 | |||||||||
100 | .0% | Total Net Assets | 414,522,301 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.1% of net assets | ||||||||
Equity Funds 60.0% | ||||||||
Global Real Estate 3.0% | ||||||||
Schwab Global Real Estate Fund (a) | 1,782,023 | 12,171,221 | ||||||
International 14.5% | ||||||||
American Century International Growth Fund, Institutional Shares | 873,813 | 11,787,743 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 993,395 | 23,523,591 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 325,308 | 2,963,554 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 1,155,406 | 9,959,603 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 712,091 | 12,012,968 | ||||||
60,247,459 | ||||||||
Large-Cap 34.1% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 2,044,008 | 37,323,583 | ||||||
Schwab Core Equity Fund (a) | 1,492,538 | 35,014,951 | ||||||
Schwab Dividend Equity Fund (a) | 974,769 | 17,760,298 | ||||||
Schwab S&P 500 Index Fund (a) | 1,127,432 | 31,320,058 | ||||||
TCW Relative Value Large Cap Fund | 1,021,509 | 19,888,786 | ||||||
141,307,676 | ||||||||
Small-Cap 8.4% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 660,298 | 11,594,826 | ||||||
Schwab Small-Cap Equity Fund (a) | 933,256 | 23,210,079 | ||||||
34,804,905 | ||||||||
248,531,261 | ||||||||
Fixed-Income Funds 36.1% | ||||||||
Inflation-Protected Bond 2.9% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 1,078,250 | 12,108,746 | ||||||
Intermediate-Term Bond 24.8% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,160,261 | 14,410,447 | ||||||
PIMCO Total Return Fund, Institutional Shares | 2,755,299 | 30,032,761 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 1,114,851 | 11,371,482 | ||||||
Schwab Total Bond Market Fund (a) | 4,998,955 | 46,890,200 | ||||||
102,704,890 | ||||||||
International Bond 1.3% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 495,913 | 5,430,243 | ||||||
Short-Term Bond 7.1% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 3,177,642 | 29,488,518 | ||||||
149,732,397 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $302,565,149) | 398,263,658 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.8% of net assets | ||||||||
Time Deposits 3.8% | ||||||||
Societe Generale | ||||||||
0.03%, 11/01/13 | 3,551,561 | 3,551,561 | ||||||
Wells Fargo | ||||||||
0.03%, 11/01/13 | 12,465,104 | 12,465,104 | ||||||
Total Short-Term Investments | ||||||||
(Cost $16,016,665) | 16,016,665 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $320,993,543 and the unrealized appreciation and depreciation were $93,853,126 and ($566,346), respectively, with a net unrealized appreciation of $93,286,780.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
��
42 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, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $398,263,658 | $— | $— | $398,263,658 | ||||||||||||
Short-Term Investments1 | — | 16,016,665 | — | 16,016,665 | ||||||||||||
Total | $398,263,658 | $16,016,665 | $— | $414,280,323 | ||||||||||||
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, 2013.
See financial notes 43
Table of Contents
Schwab Target 2020 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $229,766,566) | $310,130,953 | |||||
Investments in unaffiliated issuers, at value (cost $88,815,248) | + | 104,149,370 | ||||
Total investments, at value (cost $318,581,814) | 414,280,323 | |||||
Receivables: | ||||||
Investments sold | 1,725,000 | |||||
Fund shares sold | 506,931 | |||||
Dividends | 186,247 | |||||
Due from investment adviser | 1,275 | |||||
Interest | 14 | |||||
Prepaid expenses | + | 7,012 | ||||
Total assets | 416,706,802 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,050,000 | |||||
Independent trustees’ fees | 4 | |||||
Fund shares redeemed | 97,543 | |||||
Accrued expenses | + | 36,954 | ||||
Total liabilities | 2,184,501 | |||||
Net Assets | ||||||
Total assets | 416,706,802 | |||||
Total liabilities | − | 2,184,501 | ||||
Net assets | $414,522,301 | |||||
Net Assets by Source | ||||||
Capital received from investors | 353,656,596 | |||||
Net investment income not yet distributed | 2,760,891 | |||||
Net realized capital losses | (37,593,695 | ) | ||||
Net unrealized capital appreciation | 95,698,509 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$414,522,301 | 30,649,105 | $13.52 |
44 See financial notes
Table of Contents
Schwab Target 2020 Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,190,254 | |||||
Dividends received from unaffiliated underlying funds | 1,908,842 | |||||
Interest | + | 3,751 | ||||
Total investment income | 6,102,847 | |||||
Expenses | ||||||
Registration fees | 40,101 | |||||
Professional fees | 37,342 | |||||
Transfer agent fees | 25,752 | |||||
Portfolio accounting fees | 22,353 | |||||
Shareholder reports | 13,267 | |||||
Custodian fees | 10,506 | |||||
Independent trustees’ fees | 9,383 | |||||
Other expenses | + | 7,104 | ||||
Total expenses | 165,808 | |||||
Expense reduction by CSIM | − | 165,808 | ||||
Net expenses | − | — | ||||
Net investment income | 6,102,847 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 710,495 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 415,932 | |||||
Net realized gains on sales of affiliated underlying funds | 1,335,080 | |||||
Net realized losses on sales of unaffiliated underlying funds | + | (3,160 | ) | |||
Net realized gains | 2,458,347 | |||||
Net change in unrealized appreciation on affiliated underlying funds | 35,750,623 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 7,372,864 | ||||
Net change in unrealized appreciation | + | 43,123,487 | ||||
Net realized and unrealized gains | 45,581,834 | |||||
Increase in net assets resulting from operations | $51,684,681 |
See financial notes 45
Table of Contents
Schwab Target 2020 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $6,102,847 | $5,461,214 | ||||||||
Net realized gains | 2,458,347 | 2,164,132 | ||||||||
Net change in unrealized appreciation | + | 43,123,487 | 18,368,445 | |||||||
Increase in net assets from operations | 51,684,681 | 25,993,791 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($6,683,111 | ) | ($5,540,387 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 9,795,603 | $124,307,451 | 4,916,576 | $56,647,459 | ||||||||||||||
Shares reinvested | 542,153 | 6,451,623 | 494,589 | 5,361,345 | ||||||||||||||
Shares redeemed | + | (5,276,854 | ) | (66,887,924 | ) | (4,343,392 | ) | (49,793,312 | ) | |||||||||
Net transactions in fund shares | 5,060,902 | $63,871,150 | 1,067,773 | $12,215,492 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 25,588,203 | $305,649,581 | 24,520,430 | $272,980,685 | ||||||||||||||
Total increase | + | 5,060,902 | 108,872,720 | 1,067,773 | 32,668,896 | |||||||||||||
End of period | 30,649,105 | $414,522,301 | 25,588,203 | $305,649,581 | ||||||||||||||
Net investment income not yet distributed | $2,760,891 | $2,791,705 |
46 See financial notes
Table of Contents
Schwab Target 2025 Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.73 | 10.84 | 10.46 | 9.21 | 7.99 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.19 | 0.19 | 0.16 | 0.17 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.93 | 0.89 | 0.38 | 1.24 | 1.21 | |||||||||||||||||
Total from investment operations | 2.14 | 1.08 | 0.57 | 1.40 | 1.38 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.19 | ) | (0.19 | ) | (0.15 | ) | (0.16 | ) | ||||||||||||
Net asset value at end of period | 13.63 | 11.73 | 10.84 | 10.46 | 9.21 | |||||||||||||||||
Total return (%) | 18.54 | 10.14 | 5.44 | 15.34 | 17.61 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | 0.00 | 2 | — | 0.00 | 2 | 0.01 | 3 | ||||||||||||||
Gross operating expenses1 | 0.08 | 0.10 | 0.14 | 0.24 | 0.57 | |||||||||||||||||
Net investment income (loss) | 1.57 | 1.73 | 1.66 | 1.62 | 2.15 | |||||||||||||||||
Portfolio turnover rate | 10 | 13 | 9 | 13 | 44 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 251 | 141 | 104 | 63 | 26 |
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 ratio.
See financial notes 47
Table of Contents
Schwab Target 2025 Fund
Portfolio Holdings as of October 31, 2013
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 | 195,648,651 | 243,631,108 | ||||||||
2 | .8% | Short-Term Investment | 7,142,364 | 7,142,364 | ||||||||
99 | .7% | Total Investments | 202,791,015 | 250,773,472 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 717,585 | |||||||||
100 | .0% | Total Net Assets | 251,491,057 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.9% of net assets | ||||||||
Equity Funds 69.3% | ||||||||
Global Real Estate 3.4% | ||||||||
Schwab Global Real Estate Fund (a) | 1,264,302 | 8,635,180 | ||||||
International 16.8% | ||||||||
American Century International Growth Fund, Institutional Shares | 606,329 | 8,179,380 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 686,104 | 16,246,949 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 225,922 | 2,058,147 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 837,115 | 7,215,929 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 500,676 | 8,446,407 | ||||||
42,146,812 | ||||||||
Large-Cap 39.4% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 1,425,998 | 26,038,728 | ||||||
Schwab Core Equity Fund (a) | 1,059,030 | 24,844,849 | ||||||
Schwab Dividend Equity Fund (a) | 684,124 | 12,464,737 | ||||||
Schwab S&P 500 Index Fund (a) | 792,409 | 22,013,111 | ||||||
TCW Relative Value Large Cap Fund | 705,728 | 13,740,514 | ||||||
99,101,939 | ||||||||
Small-Cap 9.7% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 467,612 | 8,211,264 | ||||||
Schwab Small-Cap Equity Fund (a) | 652,791 | 16,234,909 | ||||||
24,446,173 | ||||||||
174,330,104 | ||||||||
Fixed-Income Funds 27.6% | ||||||||
Inflation-Protected Bond 2.0% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 448,259 | 5,033,944 | ||||||
Intermediate-Term Bond 19.9% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 670,205 | 8,323,946 | ||||||
PIMCO Total Return Fund, Institutional Shares | 1,546,629 | 16,858,260 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 576,806 | 5,883,424 | ||||||
Schwab Total Bond Market Fund (a) | 2,015,888 | 18,909,028 | ||||||
49,974,658 | ||||||||
International Bond 1.2% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 276,903 | 3,032,084 | ||||||
Short-Term Bond 4.5% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 1,213,396 | 11,260,318 | ||||||
69,301,004 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $195,648,651) | 243,631,108 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.8% of net assets | ||||||||
Time Deposit 2.8% | ||||||||
Wells Fargo | ||||||||
0.03%, 11/01/13 | 7,142,364 | 7,142,364 | ||||||
Total Short-Term Investment | ||||||||
(Cost $7,142,364) | 7,142,364 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $203,980,854 and the unrealized appreciation and depreciation were $47,321,027 and ($528,409), respectively, with a net unrealized appreciation of $46,792,618.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
48 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, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $243,631,108 | $— | $— | $243,631,108 | ||||||||||||
Short-Term Investment1 | — | 7,142,364 | — | 7,142,364 | ||||||||||||
Total | $243,631,108 | $7,142,364 | $— | $250,773,472 | ||||||||||||
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, 2013.
See financial notes 49
Table of Contents
Schwab Target 2025 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $147,390,901) | $188,082,601 | |||||
Investments in unaffiliated issuers, at value (cost $55,400,114) | + | 62,690,871 | ||||
Total investments, at value (cost $202,791,015) | 250,773,472 | |||||
Receivables: | ||||||
Investments sold | 510,000 | |||||
Fund shares sold | 1,087,253 | |||||
Dividends | 84,301 | |||||
Due from investment adviser | 1,340 | |||||
Interest | 6 | |||||
Prepaid expenses | + | 2,793 | ||||
Total assets | 252,459,165 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 860,000 | |||||
Independent trustees’ fees | 4 | |||||
Fund shares redeemed | 73,210 | |||||
Accrued expenses | + | 34,894 | ||||
Total liabilities | 968,108 | |||||
Net Assets | ||||||
Total assets | 252,459,165 | |||||
Total liabilities | − | 968,108 | ||||
Net assets | $251,491,057 | |||||
Net Assets by Source | ||||||
Capital received from investors | 203,776,480 | |||||
Net investment income not yet distributed | 1,327,432 | |||||
Net realized capital losses | (1,595,312 | ) | ||||
Net unrealized capital appreciation | 47,982,457 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$251,491,057 | 18,455,626 | $13.63 |
50 See financial notes
Table of Contents
Schwab Target 2025 Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $2,055,952 | |||||
Dividends received from unaffiliated underlying funds | 965,303 | |||||
Interest | + | 1,603 | ||||
Total investment income | 3,022,858 | |||||
Expenses | ||||||
Registration fees | 38,229 | |||||
Professional fees | 36,782 | |||||
Transfer agent fees | 22,506 | |||||
Portfolio accounting fees | 18,947 | |||||
Shareholder reports | 10,523 | |||||
Custodian fees | 9,114 | |||||
Independent trustees’ fees | 8,202 | |||||
Other expenses | + | 3,843 | ||||
Total expenses | 148,146 | |||||
Expense reduction by CSIM | − | 148,146 | ||||
Net expenses | − | — | ||||
Net investment income | 3,022,858 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 373,221 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 146,733 | |||||
Net realized gains on sales of affiliated underlying funds | 41,689 | |||||
Net realized losses on sales of unaffiliated underlying funds | + | (39,517 | ) | |||
Net realized gains | 522,126 | |||||
Net change in unrealized appreciation on affiliated underlying funds | 23,976,818 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 4,911,132 | ||||
Net change in unrealized appreciation | + | 28,887,950 | ||||
Net realized and unrealized gains | 29,410,076 | |||||
Increase in net assets resulting from operations | $32,432,934 |
See financial notes 51
Table of Contents
Schwab Target 2025 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $3,022,858 | $2,114,588 | ||||||||
Net realized gains (losses) | 522,126 | (170,384 | ) | |||||||
Net change in unrealized appreciation | + | 28,887,950 | 9,570,161 | |||||||
Increase in net assets from operations | 32,432,934 | 11,514,365 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($2,993,027 | ) | ($1,878,136 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,685,243 | $109,893,079 | 4,252,040 | $48,020,992 | ||||||||||||||
Shares reinvested | 248,579 | 2,915,831 | 174,782 | 1,847,442 | ||||||||||||||
Shares redeemed | + | (2,529,490 | ) | (32,070,753 | ) | (1,997,080 | ) | (22,465,465 | ) | |||||||||
Net transactions in fund shares | 6,404,332 | $80,738,157 | 2,429,742 | $27,402,969 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 12,051,294 | $141,312,993 | 9,621,552 | $104,273,795 | ||||||||||||||
Total increase | + | 6,404,332 | 110,178,064 | 2,429,742 | 37,039,198 | |||||||||||||
End of period | 18,455,626 | $251,491,057 | 12,051,294 | $141,312,993 | ||||||||||||||
Net investment income not yet distributed | $1,327,432 | $1,040,989 |
52 See financial notes
Table of Contents
Schwab Target 2030 Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.42 | 11.43 | 11.05 | 9.69 | 8.51 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.19 | 0.19 | 0.17 | 0.20 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.31 | 0.99 | 0.38 | 1.36 | 1.23 | |||||||||||||||||
Total from investment operations | 2.53 | 1.18 | 0.57 | 1.53 | 1.43 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.19 | ) | (0.19 | ) | (0.17 | ) | (0.25 | ) | ||||||||||||
Net asset value at end of period | 14.70 | 12.42 | 11.43 | 11.05 | 9.69 | |||||||||||||||||
Total return (%) | 20.73 | 10.52 | 5.20 | 15.97 | 17.31 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | — | 0.00 | 2 | 0.01 | 3 | |||||||||||||||
Gross operating expenses1 | 0.04 | 0.05 | 0.05 | 0.08 | 0.11 | |||||||||||||||||
Net investment income (loss) | 1.59 | 1.62 | 1.60 | 1.64 | 2.37 | |||||||||||||||||
Portfolio turnover rate | 10 | 12 | 8 | 14 | 50 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 621 | 444 | 372 | 296 | 200 |
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 ratio.
See financial notes 53
Table of Contents
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .4% | Other Investment Companies | 435,186,299 | 605,368,226 | ||||||||
2 | .5% | Short-Term Investment | 15,681,154 | 15,681,154 | ||||||||
99 | .9% | Total Investments | 450,867,453 | 621,049,380 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 424,544 | |||||||||
100 | .0% | Total Net Assets | 621,473,924 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.4% of net assets | ||||||||
Equity Funds 76.9% | ||||||||
Global Real Estate 3.8% | ||||||||
Schwab Global Real Estate Fund (a) | 3,468,314 | 23,688,588 | ||||||
International 18.6% | ||||||||
American Century International Growth Fund, Institutional Shares | 1,653,907 | 22,311,212 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 1,890,535 | 44,767,869 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 632,856 | 5,765,314 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 2,297,220 | 19,802,034 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 1,354,126 | 22,844,107 | ||||||
115,490,536 | ||||||||
Large-Cap 43.7% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 3,885,576 | 70,950,619 | ||||||
Schwab Core Equity Fund (a) | 2,944,866 | 69,086,555 | ||||||
Schwab Dividend Equity Fund (a) | 1,864,777 | 33,976,240 | ||||||
Schwab S&P 500 Index Fund (a) | 2,176,358 | 60,459,232 | ||||||
TCW Relative Value Large Cap Fund | 1,923,205 | 37,444,797 | ||||||
271,917,443 | ||||||||
Small-Cap 10.8% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 1,289,028 | 22,635,334 | ||||||
Schwab Small-Cap Equity Fund (a) | 1,788,903 | 44,490,016 | ||||||
67,125,350 | ||||||||
478,221,917 | ||||||||
Fixed-Income Funds 20.5% | ||||||||
Inflation-Protected Bond 1.5% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 826,600 | 9,282,721 | ||||||
Intermediate-Term Bond 15.2% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,396,509 | 17,344,643 | ||||||
PIMCO Total Return Fund, Institutional Shares | 3,176,428 | 34,623,069 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 1,239,274 | 12,640,590 | ||||||
Schwab Total Bond Market Fund (a) | 3,194,473 | 29,964,159 | ||||||
94,572,461 | ||||||||
International Bond 1.0% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 533,238 | 5,838,960 | ||||||
Short-Term Bond 2.8% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 1,880,621 | 17,452,167 | ||||||
127,146,309 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $435,186,299) | 605,368,226 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.5% of net assets | ||||||||
Time Deposit 2.5% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/01/13 | 15,681,154 | 15,681,154 | ||||||
Total Short-Term Investment | ||||||||
(Cost $15,681,154) | 15,681,154 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $455,033,814 and the unrealized appreciation and depreciation were $167,049,673 and ($1,034,107), respectively, with a net unrealized appreciation of $166,015,566.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
54 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, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $605,368,226 | $— | $— | $605,368,226 | ||||||||||||
Short-Term Investment1 | — | 15,681,154 | — | 15,681,154 | ||||||||||||
Total | $605,368,226 | $15,681,154 | $— | $621,049,380 | ||||||||||||
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, 2013.
See financial notes 55
Table of Contents
Schwab Target 2030 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $326,367,897) | $470,800,398 | |||||
Investments in unaffiliated issuers, at value (cost $124,499,556) | + | 150,248,982 | ||||
Total investments, at value (cost $450,867,453) | 621,049,380 | |||||
Receivables: | ||||||
Investments sold | 2,300,000 | |||||
Fund shares sold | 1,835,754 | |||||
Dividends | 154,472 | |||||
Due from investment adviser | 1,656 | |||||
Interest | 13 | |||||
Prepaid expenses | + | 9,120 | ||||
Total assets | 625,350,395 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,950,000 | |||||
Independent trustees’ fees | 4 | |||||
Fund shares redeemed | 879,508 | |||||
Accrued expenses | + | 46,959 | ||||
Total liabilities | 3,876,471 | |||||
Net Assets | ||||||
Total assets | 625,350,395 | |||||
Total liabilities | − | 3,876,471 | ||||
Net assets | $621,473,924 | |||||
Net Assets by Source | ||||||
Capital received from investors | 480,923,695 | |||||
Net investment income not yet distributed | 3,001,805 | |||||
Net realized capital losses | (32,633,503 | ) | ||||
Net unrealized capital appreciation | 170,181,927 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$621,473,924 | 42,272,766 | $14.70 |
56 See financial notes
Table of Contents
Schwab Target 2030 Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $6,001,210 | |||||
Dividends received from unaffiliated underlying funds | 2,350,005 | |||||
Interest | + | 3,866 | ||||
Total investment income | 8,355,081 | |||||
Expenses | ||||||
Registration fees | 49,134 | |||||
Professional fees | 38,418 | |||||
Transfer agent fees | 29,058 | |||||
Portfolio accounting fees | 25,798 | |||||
Shareholder reports | 21,211 | |||||
Custodian fees | 13,292 | |||||
Independent trustees’ fees | 10,509 | |||||
Other expenses | + | 9,969 | ||||
Total expenses | 197,389 | |||||
Expense reduction by CSIM | − | 197,389 | ||||
Net expenses | − | — | ||||
Net investment income | 8,355,081 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 1,154,935 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 304,132 | |||||
Net realized gains on sales of affiliated underlying funds | 935,816 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 160,407 | ||||
Net realized gains | 2,555,290 | |||||
Net change in unrealized appreciation on affiliated underlying funds | 72,839,796 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 15,230,159 | ||||
Net change in unrealized appreciation | + | 88,069,955 | ||||
Net realized and unrealized gains | 90,625,245 | |||||
Increase in net assets resulting from operations | $98,980,326 |
See financial notes 57
Table of Contents
Schwab Target 2030 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $8,355,081 | $6,636,601 | ||||||||
Net realized gains (losses) | 2,555,290 | (485,756 | ) | |||||||
Net change in unrealized appreciation | + | 88,069,955 | 34,048,464 | |||||||
Increase in net assets from operations | 98,980,326 | 40,199,309 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($9,003,665 | ) | ($6,263,907 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 11,596,872 | $156,363,209 | 8,178,626 | $97,318,546 | ||||||||||||||
Shares reinvested | 703,372 | 8,749,953 | 547,142 | 6,095,164 | ||||||||||||||
Shares redeemed | + | (5,790,131 | ) | (77,672,946 | ) | (5,482,400 | ) | (64,862,336 | ) | |||||||||
Net transactions in fund shares | 6,510,113 | $87,440,216 | 3,243,368 | $38,551,374 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 35,762,653 | $444,057,047 | 32,519,285 | $371,570,271 | ||||||||||||||
Total increase | + | 6,510,113 | 177,416,877 | 3,243,368 | 72,486,776 | |||||||||||||
End of period | 42,272,766 | $621,473,924 | 35,762,653 | $444,057,047 | ||||||||||||||
Net investment income not yet distributed | $3,001,805 | $2,920,540 |
58 See financial notes
Table of Contents
Schwab Target 2035 Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.69 | 10.70 | 10.32 | 9.00 | 7.76 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.20 | 0.16 | 0.16 | 0.13 | 0.15 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.45 | 0.99 | 0.38 | 1.33 | 1.23 | |||||||||||||||||
Total from investment operations | 2.65 | 1.15 | 0.54 | 1.46 | 1.38 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.22 | ) | (0.16 | ) | (0.16 | ) | (0.14 | ) | (0.14 | ) | ||||||||||||
Net asset value at end of period | 14.12 | 11.69 | 10.70 | 10.32 | 9.00 | |||||||||||||||||
Total return (%) | 23.02 | 10.89 | 5.27 | 16.29 | 18.22 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | — | 0.00 | 2 | 0.01 | 3 | |||||||||||||||
Gross operating expenses1 | 0.09 | 0.13 | 0.17 | 0.30 | 0.67 | |||||||||||||||||
Net investment income (loss) | 1.42 | 1.45 | 1.41 | 1.38 | 1.92 | |||||||||||||||||
Portfolio turnover rate | 5 | 11 | 4 | 14 | 49 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 204 | 111 | 77 | 49 | 22 |
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 ratio.
See financial notes 59
Table of Contents
Schwab Target 2035 Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .7% | Other Investment Companies | 154,382,515 | 199,717,922 | ||||||||
2 | .3% | Short-Term Investment | 4,604,832 | 4,604,832 | ||||||||
100 | .0% | Total Investments | 158,987,347 | 204,322,754 | ||||||||
(0 | .0%) | Other Assets and Liabilities, Net | (11,958 | ) | ||||||||
100 | .0% | Total Net Assets | 204,310,796 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.7% of net assets | ||||||||
Equity Funds 84.0% | ||||||||
Global Real Estate 4.2% | ||||||||
Schwab Global Real Estate Fund (a) | 1,245,858 | 8,509,210 | ||||||
International 20.3% | ||||||||
American Century International Growth Fund, Institutional Shares | 589,389 | 7,950,858 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 674,742 | 15,977,899 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 221,793 | 2,020,533 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 832,611 | 7,177,104 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 489,282 | 8,254,192 | ||||||
41,380,586 | ||||||||
Large-Cap 47.7% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 1,392,869 | 25,433,795 | ||||||
Schwab Core Equity Fund (a) | 1,064,628 | 24,976,180 | ||||||
Schwab Dividend Equity Fund (a) | 666,950 | 12,151,837 | ||||||
Schwab S&P 500 Index Fund (a) | 780,398 | 21,679,453 | ||||||
TCW Relative Value Large Cap Fund | 684,183 | 13,321,047 | ||||||
97,562,312 | ||||||||
Small-Cap 11.8% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 466,053 | 8,183,885 | ||||||
Schwab Small-Cap Equity Fund (a) | 641,150 | 15,945,403 | ||||||
24,129,288 | ||||||||
171,581,396 | ||||||||
Fixed-Income Funds 13.7% | ||||||||
Inflation-Protected Bond 0.8% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 151,982 | 1,706,763 | ||||||
Intermediate-Term Bond 10.5% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 377,168 | 4,684,425 | ||||||
PIMCO Total Return Fund, Institutional Shares | 813,880 | 8,871,288 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 275,184 | 2,806,872 | ||||||
Schwab Total Bond Market Fund (a) | 542,624 | 5,089,811 | ||||||
21,452,396 | ||||||||
International Bond 0.6% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 118,135 | 1,293,578 | ||||||
Short-Term Bond 1.8% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 396,960 | 3,683,789 | ||||||
28,136,526 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $154,382,515) | 199,717,922 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.3% of net assets | ||||||||
Time Deposit 2.3% | ||||||||
Skandinaviska Enskilda Banken | ||||||||
0.03%, 11/01/13 | 4,604,832 | 4,604,832 | ||||||
Total Short-Term Investment | ||||||||
(Cost $4,604,832) | 4,604,832 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $159,931,179 and the unrealized appreciation and depreciation were $44,739,502 and ($347,927), respectively, with a net unrealized appreciation of $44,391,575.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
60 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, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $199,717,922 | $— | $— | $199,717,922 | ||||||||||||
Short-Term Investment1 | — | 4,604,832 | — | 4,604,832 | ||||||||||||
Total | $199,717,922 | $4,604,832 | $— | $204,322,754 | ||||||||||||
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, 2013.
See financial notes 61
Table of Contents
Schwab Target 2035 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $118,266,252) | $156,636,112 | |||||
Investments in unaffiliated issuers, at value (cost $40,721,095) | + | 47,686,642 | ||||
Total investments, at value (cost $158,987,347) | 204,322,754 | |||||
Receivables: | ||||||
Investments sold | 610,000 | |||||
Fund shares sold | 325,532 | |||||
Dividends | 33,611 | |||||
Due from investment adviser | 1,254 | |||||
Interest | 4 | |||||
Prepaid expenses | + | 2,211 | ||||
Total assets | 205,295,366 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 830,000 | |||||
Independent trustees’ fees | 4 | |||||
Fund shares redeemed | 117,265 | |||||
Accrued expenses | + | 37,301 | ||||
Total liabilities | 984,570 | |||||
Net Assets | ||||||
Total assets | 205,295,366 | |||||
Total liabilities | − | 984,570 | ||||
Net assets | $204,310,796 | |||||
Net Assets by Source | ||||||
Capital received from investors | 159,524,605 | |||||
Net investment income not yet distributed | 751,951 | |||||
Net realized capital losses | (1,301,167 | ) | ||||
Net unrealized capital appreciation | 45,335,407 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$204,310,796 | 14,474,579 | $14.12 |
62 See financial notes
Table of Contents
Schwab Target 2035 Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,581,923 | |||||
Dividends received from unaffiliated underlying funds | 590,491 | |||||
Interest | + | 972 | ||||
Total investment income | 2,173,386 | |||||
Expenses | ||||||
Professional fees | 36,608 | |||||
Registration fees | 31,950 | |||||
Transfer agent fees | 22,220 | |||||
Portfolio accounting fees | 18,150 | |||||
Shareholder reports | 11,122 | |||||
Custodian fees | 8,404 | |||||
Independent trustees’ fees | 7,942 | |||||
Other expenses | + | 3,112 | ||||
Total expenses | 139,508 | |||||
Expense reduction by CSIM | − | 139,508 | ||||
Net expenses | − | — | ||||
Net investment income | 2,173,386 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 300,916 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 49,589 | |||||
Net realized gains on sales of affiliated underlying funds | 21,714 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 6,008 | ||||
Net realized gains | 378,227 | |||||
Net change in unrealized appreciation on affiliated underlying funds | 23,953,719 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 4,999,431 | ||||
Net change in unrealized appreciation | + | 28,953,150 | ||||
Net realized and unrealized gains | 29,331,377 | |||||
Increase in net assets resulting from operations | $31,504,763 |
See financial notes 63
Table of Contents
Schwab Target 2035 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $2,173,386 | $1,339,939 | ||||||||
Net realized gains (losses) | 378,227 | (188,323 | ) | |||||||
Net change in unrealized appreciation | + | 28,953,150 | 8,193,560 | |||||||
Increase in net assets from operations | 31,504,763 | 9,345,176 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($2,151,560 | ) | ($1,173,912 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 6,414,310 | $82,496,975 | 3,123,482 | $35,158,038 | ||||||||||||||
Shares reinvested | 178,770 | 2,102,339 | 110,095 | 1,149,391 | ||||||||||||||
Shares redeemed | + | (1,571,980 | ) | (20,151,520 | ) | (1,018,757 | ) | (11,399,175 | ) | |||||||||
Net transactions in fund shares | 5,021,100 | $64,447,794 | 2,214,820 | $24,908,254 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 9,453,479 | $110,509,799 | 7,238,659 | $77,430,281 | ||||||||||||||
Total increase | + | 5,021,100 | 93,800,997 | 2,214,820 | 33,079,518 | |||||||||||||
End of period | 14,474,579 | $204,310,796 | 9,453,479 | $110,509,799 | ||||||||||||||
Net investment income not yet distributed | $751,951 | $557,615 |
64 See financial notes
Table of Contents
Schwab Target 2040 Fund
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.67 | 11.55 | 11.16 | 9.71 | 8.48 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.17 | 0.17 | 0.15 | 0.18 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.84 | 1.12 | 0.40 | 1.46 | 1.27 | |||||||||||||||||
Total from investment operations | 3.06 | 1.29 | 0.57 | 1.61 | 1.45 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.17 | ) | (0.18 | ) | (0.16 | ) | (0.22 | ) | ||||||||||||
Net asset value at end of period | 15.49 | 12.67 | 11.55 | 11.16 | 9.71 | |||||||||||||||||
Total return (%) | 24.55 | 11.33 | 5.08 | 16.71 | 17.66 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | — | 0.00 | 2 | 0.00 | 2,3 | |||||||||||||||
Gross operating expenses1 | 0.04 | 0.06 | 0.06 | 0.10 | 0.15 | |||||||||||||||||
Net investment income (loss) | 1.47 | 1.42 | 1.42 | 1.44 | 2.15 | |||||||||||||||||
Portfolio turnover rate | 6 | 12 | 3 | 15 | 51 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 639 | 435 | 342 | 259 | 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 ratio.
See financial notes 65
Table of Contents
Schwab Target 2040 Fund
Portfolio Holdings as of October 31, 2013
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 | 439,711,295 | 626,077,263 | ||||||||
2 | .1% | Short-Term Investment | 13,318,877 | 13,318,877 | ||||||||
100 | .0% | Total Investments | 453,030,172 | 639,396,140 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 45,701 | |||||||||
100 | .0% | Total Net Assets | 639,441,841 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.9% of net assets | ||||||||
Equity Funds 89.1% | ||||||||
Global Real Estate 4.4% | ||||||||
Schwab Global Real Estate Fund (a) | 4,140,897 | 28,282,330 | ||||||
International 21.5% | ||||||||
American Century International Growth Fund, Institutional Shares | 1,949,715 | 26,301,655 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 2,235,553 | 52,937,887 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 740,308 | 6,744,210 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 2,773,538 | 23,907,900 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 1,624,675 | 27,408,272 | ||||||
137,299,924 | ||||||||
Large-Cap 50.7% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 4,612,591 | 84,225,911 | ||||||
Schwab Core Equity Fund (a) | 3,542,709 | 83,111,947 | ||||||
Schwab Dividend Equity Fund (a) | 2,213,536 | 40,330,628 | ||||||
Schwab S&P 500 Index Fund (a) | 2,596,342 | 72,126,371 | ||||||
TCW Relative Value Large Cap Fund | 2,264,980 | 44,099,165 | ||||||
323,894,022 | ||||||||
Small-Cap 12.5% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 1,544,461 | 27,120,743 | ||||||
Schwab Small-Cap Equity Fund (a) | 2,131,039 | 52,998,946 | ||||||
80,119,689 | ||||||||
569,595,965 | ||||||||
Fixed-Income Funds 8.8% | ||||||||
Inflation-Protected Bond 0.5% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 267,654 | 3,005,755 | ||||||
Intermediate-Term Bond 6.7% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 919,354 | 11,418,374 | ||||||
PIMCO Total Return Fund, Institutional Shares | 1,862,213 | 20,298,125 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 522,433 | 5,328,818 | ||||||
Schwab Total Bond Market Fund (a) | 652,972 | 6,124,878 | ||||||
43,170,195 | ||||||||
International Bond 0.3% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 181,646 | 1,989,025 | ||||||
Short-Term Bond 1.3% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 896,155 | 8,316,323 | ||||||
56,481,298 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $439,711,295) | 626,077,263 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.1% of net assets | ||||||||
Time Deposit 2.1% | ||||||||
Wells Fargo | ||||||||
0.03%, 11/01/13 | 13,318,877 | 13,318,877 | ||||||
Total Short-Term Investment | ||||||||
(Cost $13,318,877) | 13,318,877 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $457,466,307 and the unrealized appreciation and depreciation were $182,571,460 and ($641,627), respectively, with a net unrealized appreciation of $181,929,833.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
66 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, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $626,077,263 | $— | $— | $626,077,263 | ||||||||||||
Short-Term Investment1 | — | 13,318,877 | — | 13,318,877 | ||||||||||||
Total | $626,077,263 | $13,318,877 | $— | $639,396,140 | ||||||||||||
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, 2013.
See financial notes 67
Table of Contents
Schwab Target 2040 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $339,232,737) | $496,551,672 | |||||
Investments in unaffiliated issuers, at value (cost $113,797,435) | + | 142,844,468 | ||||
Total investments, at value (cost $453,030,172) | 639,396,140 | |||||
Receivables: | ||||||
Investments sold | 2,000,000 | |||||
Fund shares sold | 816,447 | |||||
Dividends | 64,928 | |||||
Due from investment adviser | 1,672 | |||||
Interest | 11 | |||||
Prepaid expenses | + | 8,811 | ||||
Total assets | 642,288,009 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,400,000 | |||||
Independent trustees’ fees | 3 | |||||
Fund shares redeemed | 390,167 | |||||
Accrued expenses | + | 55,998 | ||||
Total liabilities | 2,846,168 | |||||
Net Assets | ||||||
Total assets | 642,288,009 | |||||
Total liabilities | − | 2,846,168 | ||||
Net assets | $639,441,841 | |||||
Net Assets by Source | ||||||
Capital received from investors | 477,672,104 | |||||
Net investment income not yet distributed | 2,124,949 | |||||
Net realized capital losses | (26,721,180 | ) | ||||
Net unrealized capital appreciation | 186,365,968 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$639,441,841 | 41,278,138 | $15.49 |
68 See financial notes
Table of Contents
Schwab Target 2040 Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $5,948,948 | |||||
Dividends received from unaffiliated underlying funds | 1,900,321 | |||||
Interest | + | 3,272 | ||||
Total investment income | 7,852,541 | |||||
Expenses | ||||||
Registration fees | 48,536 | |||||
Shareholder reports | 40,518 | |||||
Professional fees | 38,689 | |||||
Transfer agent fees | 37,719 | |||||
Portfolio accounting fees | 25,950 | |||||
Custodian fees | 13,549 | |||||
Independent trustees’ fees | 10,517 | |||||
Other expenses | + | 9,792 | ||||
Total expenses | 225,270 | |||||
Expense reduction by CSIM | − | 225,270 | ||||
Net expenses | − | — | ||||
Net investment income | 7,852,541 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 1,184,113 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 120,451 | |||||
Net realized gains on sales of affiliated underlying funds | 404,032 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 76,704 | ||||
Net realized gains | 1,785,300 | |||||
Net change in unrealized appreciation on affiliated underlying funds | 88,337,551 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 18,844,743 | ||||
Net change in unrealized appreciation | + | 107,182,294 | ||||
Net realized and unrealized gains | 108,967,594 | |||||
Increase in net assets resulting from operations | $116,820,135 |
See financial notes 69
Table of Contents
Schwab Target 2040 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $7,852,541 | $5,524,403 | ||||||||
Net realized gains (losses) | 1,785,300 | (1,275,324 | ) | |||||||
Net change in unrealized appreciation | + | 107,182,294 | 36,407,167 | |||||||
Increase in net assets from operations | 116,820,135 | 40,656,246 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($8,424,619 | ) | ($5,065,636 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 11,808,472 | $164,760,752 | 9,337,484 | $113,340,523 | ||||||||||||||
Shares reinvested | 647,209 | 8,251,913 | 440,155 | 4,960,552 | ||||||||||||||
Shares redeemed | + | (5,499,831 | ) | (76,790,642 | ) | (5,085,156 | ) | (61,428,310 | ) | |||||||||
Net transactions in fund shares | 6,955,850 | $96,222,023 | 4,692,483 | $56,872,765 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 34,322,288 | $434,824,302 | 29,629,805 | $342,360,927 | ||||||||||||||
Total increase | + | 6,955,850 | 204,617,539 | 4,692,483 | 92,463,375 | |||||||||||||
End of period | 41,278,138 | $639,441,841 | 34,322,288 | $434,824,302 | ||||||||||||||
Net investment income not yet distributed | $2,124,949 | $2,067,958 |
70 See financial notes
Table of Contents
Schwab Target 2045 Fund
Financial Statements
Financial Highlights
1/23/131– | ||||||
10/31/13 | ||||||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 10.00 | |||||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.02 | |||||
Net realized and unrealized gains (losses) | 1.64 | |||||
Total from investment operations | 1.66 | |||||
Net asset value at end of period | 11.66 | |||||
Total return (%) | 16.60 | 2 | ||||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses3 | 0.00 | 4,5 | ||||
Gross operating expenses3 | 1.08 | 4 | ||||
Net investment income (loss) | 0.46 | 4 | ||||
Portfolio turnover rate | 39 | 2 | ||||
Net assets, end of period ($ x 1,000,000) | 18 |
1 Commencement of operations.
2 Not annualized.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Annualized.
5 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if interest expense had not been incurred.
See financial notes 71
Table of Contents
Schwab Target 2045 Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .6% | Other Investment Companies | 15,792,382 | 17,207,337 | ||||||||
2 | .1% | Short-Term Investment | 367,372 | 367,372 | ||||||||
99 | .7% | Total Investments | 16,159,754 | 17,574,709 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 48,218 | |||||||||
100 | .0% | Total Net Assets | 17,622,927 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.6% of net assets | ||||||||
Equity Funds 91.7% | ||||||||
Global Real Estate 4.6% | ||||||||
Schwab Global Real Estate Fund (a) | 117,387 | 801,755 | ||||||
International 22.1% | ||||||||
American Century International Growth Fund, Institutional Shares | 55,538 | 749,204 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 63,242 | 1,497,562 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 20,761 | 189,130 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 78,856 | 679,737 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 46,108 | 777,842 | ||||||
3,893,475 | ||||||||
Large-Cap 52.1% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 129,934 | 2,372,598 | ||||||
Schwab Core Equity Fund (a) | 100,004 | 2,346,093 | ||||||
Schwab Dividend Equity Fund (a) | 63,277 | 1,152,909 | ||||||
Schwab S&P 500 Index Fund (a) | 74,563 | 2,071,352 | ||||||
TCW Relative Value Large Cap Fund | 63,997 | 1,246,021 | ||||||
9,188,973 | ||||||||
Small-Cap 12.9% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 44,072 | 773,905 | ||||||
Schwab Small-Cap Equity Fund (a) | 60,262 | 1,498,720 | ||||||
2,272,625 | ||||||||
16,156,828 | ||||||||
Fixed-Income Funds 5.9% | ||||||||
Inflation-Protected Bond 0.2% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 3,765 | 42,280 | ||||||
Intermediate-Term Bond 4.6% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 21,270 | 264,178 | ||||||
PIMCO Total Return Fund, Institutional Shares | 39,353 | 428,947 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 9,364 | 95,508 | ||||||
Schwab Total Bond Market Fund (a) | 2,403 | 22,545 | ||||||
811,178 | ||||||||
International Bond 0.1% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 1,352 | 14,799 | ||||||
Short-Term Bond 1.0% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 19,639 | 182,252 | ||||||
1,050,509 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $15,792,382) | 17,207,337 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.1% of net assets | ||||||||
Time Deposit 2.1% | ||||||||
JPMorgan Chase | ||||||||
0.03%, 11/01/13 | 367,372 | 367,372 | ||||||
Total Short-Term Investment | ||||||||
(Cost $367,372) | 367,372 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $16,169,622 and the unrealized appreciation and depreciation were $1,415,958 and ($10,871), respectively, with a net unrealized appreciation of $1,405,087.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
72 See financial notes
Table of Contents
Schwab Target 2045 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $17,207,337 | $— | $— | $17,207,337 | ||||||||||||
Short-Term Investment1 | — | 367,372 | — | 367,372 | ||||||||||||
Total | $17,207,337 | $367,372 | $— | $17,574,709 | ||||||||||||
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, 2013.
See financial notes 73
Table of Contents
Schwab Target 2045 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated issuers, at value (cost $12,557,002) | $13,741,145 | |||||
Investments in unaffiliated issuers, at value (cost $3,602,752) | + | 3,833,564 | ||||
Total investments, at value (cost $16,159,754) | 17,574,709 | |||||
Receivables: | ||||||
Investments sold | 23,000 | |||||
Fund shares sold | 100,516 | |||||
Dividends | 1,122 | |||||
Due from investment adviser | 644 | |||||
Prepaid expenses | + | 98 | ||||
Total assets | 17,700,089 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 47,000 | |||||
Independent trustees’ fees | 1 | |||||
Fund shares redeemed | 307 | |||||
Accrued expenses | + | 29,854 | ||||
Total liabilities | 77,162 | |||||
Net Assets | ||||||
Total assets | 17,700,089 | |||||
Total liabilities | − | 77,162 | ||||
Net assets | $17,622,927 | |||||
Net Assets by Source | ||||||
Capital received from investors | 16,213,521 | |||||
Net investment income not yet distributed | 32,174 | |||||
Net realized capital losses | (37,723 | ) | ||||
Net unrealized capital appreciation | 1,414,955 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$17,622,927 | 1,511,166 | $11.66 |
74 See financial notes
Table of Contents
Schwab Target 2045 Fund
Statement of
Operations
For the period January 23, 2013* through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $22,682 | |||||
Dividends received from unaffiliated underlying funds | 9,510 | |||||
Interest | + | 45 | ||||
Total investment income | 32,237 | |||||
Expenses | ||||||
Professional fees | 18,183 | |||||
Transfer agent fees | 17,600 | |||||
Shareholder reports | 13,936 | |||||
Custodian fees | 10,000 | |||||
Portfolio accounting fees | 6,400 | |||||
Independent trustees’ fees | 4,063 | |||||
Registration fees | 3,640 | |||||
Interest expense | 63 | |||||
Other expenses | + | 916 | ||||
Total expenses | 74,801 | |||||
Expense reduction by CSIM | − | 74,738 | ||||
Net expenses | − | 63 | ||||
Net investment income | 32,174 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on sales of affiliated underlying funds | (110 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (37,613 | ) | |||
Net realized losses | (37,723 | ) | ||||
Net change in unrealized appreciation on affiliated underlying funds | 1,184,143 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 230,812 | ||||
Net change in unrealized appreciation | + | 1,414,955 | ||||
Net realized and unrealized gains | 1,377,232 | |||||
Increase in net assets resulting from operations | $1,409,406 |
* | Commencement of operations. |
See financial notes 75
Table of Contents
Schwab Target 2045 Fund
Statement of
Changes in Net Assets
For the current period only. Because the fund commenced operations on January 23, 2013, it has no prior report period.
Operations | ||||||
1/23/13*-10/31/13 | ||||||
Net investment income | $32,174 | |||||
Net realized losses | (37,723 | ) | ||||
Net change in unrealized appreciation | + | 1,414,955 | ||||
Increase in net assets from operations | $1,409,406 |
Transactions in Fund Shares
1/23/13*-10/31/13 | ||||||||||
SHARES | VALUE | |||||||||
Shares sold | 1,673,485 | $17,999,978 | ||||||||
Shares redeemed | + | (162,319 | ) | (1,786,457 | ) | |||||
Net transactions in fund shares | 1,511,166 | $16,213,521 | ||||||||
Shares Outstanding and Net Assets | ||||||||||
1/23/13*-10/31/13 | ||||||||||
SHARES | NET ASSETS | |||||||||
Beginning of period | — | $— | ||||||||
Total increase | + | 1,511,166 | 17,622,927 | |||||||
End of period | 1,511,166 | $17,622,927 | ||||||||
Net investment income not yet distributed | $32,174 |
* | Commencement of operations. |
76 See financial notes
Table of Contents
Schwab Target 2050 Fund
Financial Statements
Financial Highlights
1/23/131– | ||||||
10/31/13 | ||||||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 10.00 | |||||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.02 | |||||
Net realized and unrealized gains (losses) | 1.70 | |||||
Total from investment operations | 1.72 | |||||
Net asset value at end of period | 11.72 | |||||
Total return (%) | 17.20 | 2 | ||||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses3 | 0.00 | 4,5 | ||||
Gross operating expenses3 | 1.37 | 4 | ||||
Net investment income (loss) | 0.40 | 4 | ||||
Portfolio turnover rate | 40 | 2 | ||||
Net assets, end of period ($ x 1,000,000) | 14 |
1 Commencement of operations.
2 Not annualized.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Annualized.
5 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if interest expense had not been incurred.
See financial notes 77
Table of Contents
Schwab Target 2050 Fund
Portfolio Holdings as of October 31, 2013
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 | 12,548,564 | 13,697,171 | ||||||||
2 | .2% | Short-Term Investment | 304,284 | 304,284 | ||||||||
100 | .2% | Total Investments | 12,852,848 | 14,001,455 | ||||||||
(0 | .2%) | Other Assets and Liabilities, Net | (21,724 | ) | ||||||||
100 | .0% | Total Net Assets | 13,979,731 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 98.0% of net assets | ||||||||
Equity Funds 94.5% | ||||||||
Global Real Estate 4.7% | ||||||||
Schwab Global Real Estate Fund (a) | 96,224 | 657,210 | ||||||
International 22.8% | ||||||||
American Century International Growth Fund, Institutional Shares | 45,302 | 611,118 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 51,477 | 1,218,964 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 17,235 | 157,015 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 64,671 | 557,464 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 37,660 | 635,324 | ||||||
3,179,885 | ||||||||
Large-Cap 53.7% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 106,570 | 1,945,976 | ||||||
Schwab Core Equity Fund (a) | 82,365 | 1,932,289 | ||||||
Schwab Dividend Equity Fund (a) | 51,796 | 943,727 | ||||||
Schwab S&P 500 Index Fund (a) | 60,186 | 1,671,958 | ||||||
TCW Relative Value Large Cap Fund | 52,297 | 1,018,220 | ||||||
7,512,170 | ||||||||
Small-Cap 13.3% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 36,055 | 633,130 | ||||||
Schwab Small-Cap Equity Fund (a) | 49,256 | 1,224,991 | ||||||
1,858,121 | ||||||||
13,207,386 | ||||||||
Fixed-Income Funds 3.5% | ||||||||
Inflation-Protected Bond 0.0% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 355 | 3,989 | ||||||
Intermediate-Term Bond 2.8% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 10,700 | 132,888 | ||||||
PIMCO Total Return Fund, Institutional Shares | 20,433 | 222,723 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 2,990 | 30,500 | ||||||
Schwab Total Bond Market Fund (a) | 742 | 6,958 | ||||||
393,069 | ||||||||
International Bond 0.0% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 355 | 3,885 | ||||||
Short-Term Bond 0.7% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 9,573 | 88,842 | ||||||
489,785 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $12,548,564) | 13,697,171 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.2% of net assets | ||||||||
Time Deposit 2.2% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/13 | 304,284 | 304,284 | ||||||
Total Short-Term Investment | ||||||||
(Cost $304,284) | 304,284 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $12,860,203 and the unrealized appreciation and depreciation were $1,146,598 and ($5,346), respectively, with a net unrealized appreciation of $1,141,252.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
78 See financial notes
Table of Contents
Schwab Target 2050 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $13,697,171 | $— | $— | $13,697,171 | ||||||||||||
Short-Term Investment1 | — | 304,284 | — | 304,284 | ||||||||||||
Total | $13,697,171 | $304,284 | $— | $14,001,455 | ||||||||||||
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, 2013.
See financial notes 79
Table of Contents
Schwab Target 2050 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $10,119,315) | $11,076,898 | |||||
Investments in unaffiliated issuers, at value (cost $2,733,533) | + | 2,924,557 | ||||
Total investments, at value (cost $12,852,848) | 14,001,455 | |||||
Receivables: | ||||||
Investments sold | 49,000 | |||||
Fund shares sold | 36,507 | |||||
Due from investment adviser | 609 | |||||
Dividends | 516 | |||||
Prepaid expenses | + | 46 | ||||
Total assets | 14,088,133 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 62,000 | |||||
Independent trustees’ fees | 1 | |||||
Fund shares redeemed | 17,580 | |||||
Accrued expenses | + | 28,821 | ||||
Total liabilities | 108,402 | |||||
Net Assets | ||||||
Total assets | 14,088,133 | |||||
Total liabilities | − | 108,402 | ||||
Net assets | $13,979,731 | |||||
Net Assets by Source | ||||||
Capital received from investors | 12,842,967 | |||||
Net investment income not yet distributed | 21,616 | |||||
Net realized capital losses | (33,459 | ) | ||||
Net unrealized capital appreciation | 1,148,607 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$13,979,731 | 1,193,188 | $11.72 |
80 See financial notes
Table of Contents
Schwab Target 2050 Fund
Statement of
Operations
For the period January 23, 2013* through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $16,614 | |||||
Dividends received from unaffiliated underlying funds | 4,975 | |||||
Interest | + | 36 | ||||
Total investment income | 21,625 | |||||
Expenses | ||||||
Professional fees | 18,183 | |||||
Transfer agent fees | 17,700 | |||||
Shareholder reports | 13,936 | |||||
Custodian fees | 8,900 | |||||
Portfolio accounting fees | 6,400 | |||||
Independent trustees’ fees | 4,059 | |||||
Registration fees | 3,684 | |||||
Interest expense | 9 | |||||
Other expenses | + | 914 | ||||
Total expenses | 73,785 | |||||
Expense reduction by CSIM | − | 73,776 | ||||
Net expenses | − | 9 | ||||
Net investment income | 21,616 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on sales of affiliated underlying funds | (4,693 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (28,766 | ) | |||
Net realized losses | (33,459 | ) | ||||
Net change in unrealized appreciation on affiliated underlying funds | 957,583 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 191,024 | ||||
Net change in unrealized appreciation | + | 1,148,607 | ||||
Net realized and unrealized gains | 1,115,148 | |||||
Increase in net assets resulting from operations | $1,136,764 |
* | Commencement of operations. |
See financial notes 81
Table of Contents
Schwab Target 2050 Fund
Statement of
Changes in Net Assets
For the current period only. Because the fund commenced operations on January 23, 2013, it has no prior report period.
Operations | ||||||
1/23/13*-10/31/13 | ||||||
Net investment income | $21,616 | |||||
Net realized losses | (33,459 | ) | ||||
Net change in unrealized appreciation | + | 1,148,607 | ||||
Increase in net assets from operations | $1,136,764 |
Transactions in Fund Shares
1/23/13*-10/31/13 | ||||||||||
SHARES | VALUE | |||||||||
Shares sold | 1,302,184 | $14,062,670 | ||||||||
Shares redeemed | + | (108,996 | ) | (1,219,703 | ) | |||||
Net transactions in fund shares | 1,193,188 | $12,842,967 | ||||||||
Shares Outstanding and Net Assets | ||||||||||
1/23/13*-10/31/13 | ||||||||||
SHARES | NET ASSETS | |||||||||
Beginning of period | — | $— | ||||||||
Total increase | + | 1,193,188 | 13,979,731 | |||||||
End of period | 1,193,188 | $13,979,731 | ||||||||
Net investment income not yet distributed | $21,616 |
* | Commencement of operations. |
82 See financial notes
Table of Contents
Schwab Target 2055 Fund
Financial Statements
Financial Highlights
1/23/131– | ||||||
10/31/13 | ||||||
Per-Share Data ($) | ||||||
Net asset value at beginning of period | 10.00 | |||||
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.02 | |||||
Net realized and unrealized gains (losses) | 1.72 | |||||
Total from investment operations | 1.74 | |||||
Net asset value at end of period | 11.74 | |||||
Total return (%) | 17.40 | 2 | ||||
Ratios/Supplemental Data (%) | ||||||
Ratios to average net assets: | ||||||
Net operating expenses3 | 0.00 | 4,5 | ||||
Gross operating expenses3 | 2.78 | 4 | ||||
Net investment income (loss) | 0.34 | 4 | ||||
Portfolio turnover rate | 12 | 2 | ||||
Net assets, end of period ($ x 1,000,000) | 7 |
1 Commencement of operations.
2 Not annualized.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Annualized.
5 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if interest expense had not been incurred.
See financial notes 83
Table of Contents
Schwab Target 2055 Fund
Portfolio Holdings as of October 31, 2013
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 | 6,158,417 | 6,737,515 | ||||||||
2 | .2% | Short-Term Investment | 153,995 | 153,995 | ||||||||
100 | .1% | Total Investments | 6,312,412 | 6,891,510 | ||||||||
(0 | .1%) | Other Assets and Liabilities, Net | (9,730 | ) | ||||||||
100 | .0% | Total Net Assets | 6,881,780 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.9% of net assets | ||||||||
Equity Funds 95.9% | ||||||||
Global Real Estate 4.8% | ||||||||
Schwab Global Real Estate Fund (a) | 47,974 | 327,665 | ||||||
International 23.1% | ||||||||
American Century International Growth Fund, Institutional Shares | 22,486 | 303,342 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 25,906 | 613,445 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 8,518 | 77,595 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 32,509 | 280,227 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 18,640 | 314,451 | ||||||
1,589,060 | ||||||||
Large-Cap 54.5% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 53,170 | 970,888 | ||||||
Schwab Core Equity Fund (a) | 41,246 | 967,633 | ||||||
Schwab Dividend Equity Fund (a) | 26,067 | 474,932 | ||||||
Schwab S&P 500 Index Fund (a) | 30,029 | 834,213 | ||||||
TCW Relative Value Large Cap Fund | 25,968 | 505,607 | ||||||
3,753,273 | ||||||||
Small-Cap 13.5% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 17,954 | 315,276 | ||||||
Schwab Small-Cap Equity Fund (a) | 24,693 | 614,118 | ||||||
929,394 | ||||||||
6,599,392 | ||||||||
Fixed-Income Funds 2.0% | ||||||||
Inflation-Protected Bond 0.0% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 141 | 1,583 | ||||||
Intermediate-Term Bond 1.6% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 3,148 | 39,103 | ||||||
PIMCO Total Return Fund, Institutional Shares | 6,372 | 69,457 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 106 | 1,082 | ||||||
Schwab Total Bond Market Fund (a) | 108 | 1,012 | ||||||
110,654 | ||||||||
International Bond 0.0% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 175 | 1,920 | ||||||
Short-Term Bond 0.4% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 2,583 | 23,966 | ||||||
138,123 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $6,158,417) | 6,737,515 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 2.2% of net assets | ||||||||
Time Deposit 2.2% | ||||||||
JPMorgan Chase | ||||||||
0.03%, 11/01/13 | 153,995 | 153,995 | ||||||
Total Short-Term Investment | ||||||||
(Cost $153,995) | 153,995 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $6,316,642 and the unrealized appreciation and depreciation were $576,972 and ($2,104), respectively, with a net unrealized appreciation of $574,868.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
84 See financial notes
Table of Contents
Schwab Target 2055 Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $6,737,515 | $— | $— | $6,737,515 | ||||||||||||
Short-Term Investment1 | — | 153,995 | — | 153,995 | ||||||||||||
Total | $6,737,515 | $153,995 | $— | $6,891,510 | ||||||||||||
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, 2013.
See financial notes 85
Table of Contents
Schwab Target 2055 Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $5,025,495) | $5,505,555 | |||||
Investments in unaffiliated issuers, at value (cost $1,286,917) | + | 1,385,955 | ||||
Total investments, at value (cost $6,312,412) | 6,891,510 | |||||
Receivables: | ||||||
Investments sold | 15,000 | |||||
Fund shares sold | 94,448 | |||||
Due from investment adviser | 600 | |||||
Dividends | + | 143 | ||||
Total assets | 7,001,701 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 91,000 | |||||
Fund shares redeemed | 352 | |||||
Accrued expenses | + | 28,569 | ||||
Total liabilities | 119,921 | |||||
Net Assets | ||||||
Total assets | 7,001,701 | |||||
Total liabilities | − | 119,921 | ||||
Net assets | $6,881,780 | |||||
Net Assets by Source | ||||||
Capital received from investors | 6,298,563 | |||||
Net investment income not yet distributed | 8,773 | |||||
Net realized capital losses | (4,654 | ) | ||||
Net unrealized capital appreciation | 579,098 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$6,881,780 | 586,108 | $11.74 |
86 See financial notes
Table of Contents
Schwab Target 2055 Fund
Statement of
Operations
For the period January 23, 2013* through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $7,053 | |||||
Dividends received from unaffiliated underlying funds | 1,733 | |||||
Interest | + | 16 | ||||
Total investment income | 8,802 | |||||
Expenses | ||||||
Professional fees | 18,183 | |||||
Transfer agent fees | 17,700 | |||||
Shareholder reports | 13,935 | |||||
Custodian fees | 8,500 | |||||
Portfolio accounting fees | 6,300 | |||||
Independent trustees’ fees | 4,050 | |||||
Registration fees | 1,851 | |||||
Interest expense | 29 | |||||
Other expenses | + | 912 | ||||
Total expenses | 71,460 | |||||
Expense reduction by CSIM | − | 71,431 | ||||
Net expenses | − | 29 | ||||
Net investment income | 8,773 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on sales of affiliated underlying funds | (3,446 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (1,208 | ) | |||
Net realized losses | (4,654 | ) | ||||
Net change in unrealized appreciation on affiliated underlying funds | 480,060 | |||||
Net change in unrealized appreciation on unaffiliated underlying funds | + | 99,038 | ||||
Net change in unrealized appreciation | + | 579,098 | ||||
Net realized and unrealized gains | 574,444 | |||||
Increase in net assets resulting from operations | $583,217 |
* | Commencement of operations. |
See financial notes 87
Table of Contents
Schwab Target 2055 Fund
Statement of
Changes in Net Assets
For the current period only. Because the fund commenced operations on January 23, 2013, it has no prior report period.
Operations | ||||||
1/23/13*-10/31/13 | ||||||
Net investment income | $8,773 | |||||
Net realized losses | (4,654 | ) | ||||
Net change in unrealized appreciation | + | 579,098 | ||||
Increase in net assets from operations | $583,217 |
Transactions in Fund Shares
1/23/13*-10/31/13 | ||||||||||
SHARES | VALUE | |||||||||
Shares sold | 636,663 | $6,847,743 | ||||||||
Shares redeemed | + | (50,555 | ) | (549,180 | ) | |||||
Net transactions in fund shares | 586,108 | $6,298,563 | ||||||||
Shares Outstanding and Net Assets | ||||||||||
1/23/13*-10/31/13 | ||||||||||
SHARES | NET ASSETS | |||||||||
Beginning of period | — | $— | ||||||||
Total increase | + | 586,108 | 6,881,780 | |||||||
End of period | 586,108 | $6,881,780 | ||||||||
Net investment income not yet distributed | $8,773 |
* | Commencement of operations. |
88 See financial notes
Table of Contents
Schwab Target Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust (the “trust”), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) | Laudus Small-Cap MarketMasters Fund | |||
Schwab Target 2010 Fund | Laudus International MarketMasters Fund | |||
Schwab Target 2015 Fund | Schwab Balanced Fund | |||
Schwab Target 2020 Fund | Schwab Core Equity Fund | |||
Schwab Target 2025 Fund | Schwab Dividend Equity Fund | |||
Schwab Target 2030 Fund | Schwab Large-Cap Growth Fund | |||
Schwab Target 2035 Fund | Schwab Small-Cap Equity Fund | |||
Schwab Target 2040 Fund | Schwab Hedged Equity Fund | |||
Schwab Target 2045 Fund | Schwab Financial Services Fund | |||
Schwab Target 2050 Fund | Schwab Health Care Fund | |||
Schwab Target 2055 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 | Schwab Fundamental International Large Company Index Fund | |||
Schwab International Index Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Monthly Income Fund - Moderate Payout | |||
Schwab MarketTrack Balanced Portfolio | Schwab Monthly Income Fund - Enhanced Payout | |||
Schwab MarketTrack Conservative Portfolio | Schwab Monthly Income Fund - Maximum Payout | |||
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 8) 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: Mutual funds are valued at their respective NAVs. |
89
Table of Contents
Schwab Target Funds
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. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures. | |
• | Short-term securities (60 days or less to maturity): Short-term securities are 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 inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. Investments in mutual funds are valued daily at their NAVs, which 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, 2013 are disclosed in the Portfolio Holdings.
90
Table of Contents
Schwab Target Funds
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 and losses from security transactions are based on the identified costs of the securities involved.
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(d) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(e) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(f) Accounting Estimates:
The accounting policies described in this report conform to 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 attributable to these arrangements 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 has evaluated ASU No. 2011-11 and assessed the funds’ financial statement disclosures and determined that adoption of the standard will not have a material effect on the funds’ financial statements.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
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.
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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 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. Generally, the underlying funds are actively managed mutual funds. Any actively managed mutual fund is subject to the risk that its investment adviser (or sub-adviser(s)) 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. |
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• | Emerging Markets Risk. Emerging market countries 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 and, at times, it may be difficult to value such investments. | |
• | 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 their assets directly in equity and fixed income securities, ETFs, cash equivalents, including money market securities, and futures. A fund’s direct investment in these securities is subject to the same or similar risks as an underlying fund’s investment in the same security.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
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, 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 expense charged, excluding interest, taxes and certain non-routine expenses (“expense limitation”) to 0.00%.
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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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, 2013, each Schwab Target Fund’s ownership percentages of other related funds’ shares are:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | |||||||||||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | Target | Target | Target | |||||||||||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | 2045 | 2050 | 2055 | |||||||||||||||||||||||||||||||
Underlying Funds | Fund | Fund | Fund | Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 0.5% | 0.9% | 5.1% | 3.6% | 9.9% | 3.5% | 11.8% | 0.3% | 0.3% | 0.1% | ||||||||||||||||||||||||||||||
Laudus International MarketMasters Fund | 0.1% | 0.2% | 1.0% | 0.7% | 2.0% | 0.7% | 2.3% | 0.1% | 0.1% | 0.0% | * | |||||||||||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund | 0.2% | 0.3% | 1.9% | 1.3% | 3.6% | 1.3% | 4.2% | 0.1% | 0.1% | 0.0% | * | |||||||||||||||||||||||||||||
Laudus Mondrian International Equity Fund | 0.5% | 1.0% | 5.9% | 4.3% | 11.8% | 4.3% | 14.2% | 0.4% | 0.3% | 0.2% | ||||||||||||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 0.2% | 0.4% | 2.0% | 1.4% | 3.9% | 1.4% | 4.6% | 0.1% | 0.1% | 0.1% | ||||||||||||||||||||||||||||||
Schwab Core Equity Fund | 0.1% | 0.3% | 1.6% | 1.1% | 3.1% | 1.1% | 3.7% | 0.1% | 0.1% | 0.0% | * | |||||||||||||||||||||||||||||
Schwab Dividend Equity Fund | 0.1% | 0.2% | 1.0% | 0.7% | 1.9% | 0.7% | 2.2% | 0.1% | 0.1% | 0.0% | * | |||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 0.0% | * | 0.0% | * | 0.2% | 0.1% | 0.4% | 0.1% | 0.4% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund | 0.6% | 1.1% | 6.1% | 4.3% | 11.9% | 4.3% | 14.3% | 0.4% | 0.3% | 0.2% | ||||||||||||||||||||||||||||||
Schwab Small-Cap Equity Fund | 0.4% | 0.7% | 3.9% | 2.7% | 7.5% | 2.7% | 9.0% | 0.3% | 0.2% | 0.1% | ||||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 1.1% | 1.4% | 4.3% | 1.8% | 3.3% | 0.6% | 1.1% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 0.5% | 0.8% | 3.2% | 1.7% | 3.6% | 0.8% | 1.5% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 1.4% | 1.8% | 5.2% | 2.1% | 3.4% | 0.6% | 0.7% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 0.1% | 0.1% | 0.8% | 0.4% | 0.8% | 0.2% | 0.3% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 2.2% | 2.7% | 7.0% | 2.7% | 4.1% | 0.9% | 2.0% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||||
Schwab Value Advantage Money Fund | 0.0% | * | 0.0% | * | —% | —% | —% | —% | —% | —% | —% | —% |
* | Less than 0.05% |
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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, 2013.
Schwab Target 2010 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 177,346 | 50,204 | (53,091 | ) | 174,459 | $1,191,554 | ($38,186 | ) | $73,744 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 116,581 | 18,436 | (33,854 | ) | 101,163 | 2,395,546 | 167,513 | 53,965 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 26,234 | 9,312 | (3,452 | ) | 32,094 | 292,372 | 1,141 | 5,779 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 117,378 | 14,657 | (31,125 | ) | 100,910 | 869,843 | 51,010 | 24,282 | ||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 253,807 | 20,167 | (65,720 | ) | 208,254 | 3,802,714 | 177,064 | 70,000 | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | 176,428 | 7,739 | (47,790 | ) | 136,377 | 3,199,412 | 231,749 | 27,891 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 90,825 | 49,449 | (46,320 | ) | 93,954 | 1,711,847 | 43,905 | 28,648 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 146,513 | 48,014 | (84,720 | ) | 109,807 | 3,050,443 | 395,787 | 73,381 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 85,620 | 7,586 | (31,614 | ) | 61,592 | 1,081,555 | 120,920 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 122,940 | 8,731 | (38,555 | ) | 93,116 | 2,315,797 | 166,387 | 11,464 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 204,985 | 110,793 | (39,023 | ) | 276,755 | 3,107,960 | (18,104 | ) | 51,074 | |||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 247,103 | 57,332 | (144,105 | ) | 160,330 | 1,635,370 | 100,225 | 77,309 | ||||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 1,177,680 | 346,548 | (161,357 | ) | 1,362,871 | 12,783,732 | (30,393 | ) | 286,046 | |||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 103,637 | 23,998 | (85,113 | ) | 42,522 | 465,615 | 113,449 | 11,787 | ||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 817,827 | 284,281 | (96,097 | ) | 1,006,011 | 9,335,780 | (4,526 | ) | 68,981 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1,968,431 | — | — | 1,968,431 | 1,968,431 | — | 1,159 | |||||||||||||||||||||
Total | $49,207,971 | $1,477,941 | $865,510 | |||||||||||||||||||||||||
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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 | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 258,572 | 77,347 | (18,408 | ) | 317,511 | $2,168,599 | ($4,872 | ) | $117,561 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 166,741 | 42,257 | (28,625 | ) | 180,373 | 4,271,226 | 25,081 | 78,759 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 37,971 | 21,585 | — | 59,556 | 542,550 | — | 8,365 | |||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 179,270 | 59,710 | (36,193 | ) | 202,787 | 1,748,027 | (13,585 | ) | 42,750 | |||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 366,369 | 70,267 | (65,568 | ) | 371,068 | 6,775,694 | 54,282 | 103,004 | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | 255,575 | 39,816 | (35,483 | ) | 259,908 | 6,097,451 | 32,538 | 42,374 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 146,381 | 103,777 | (77,715 | ) | 172,443 | 3,141,916 | 49,189 | 50,341 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 211,081 | 57,958 | (68,005 | ) | 201,034 | 5,584,715 | 70,044 | 107,874 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 125,994 | 13,849 | (25,465 | ) | 114,378 | 2,008,486 | 28,644 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 178,503 | 31,440 | (41,096 | ) | 168,847 | 4,199,229 | 60,001 | 17,380 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 178,532 | 203,958 | (23,359 | ) | 359,131 | 4,033,041 | (23,873 | ) | 54,779 | |||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 246,466 | 60,452 | (35,745 | ) | 271,173 | 2,765,959 | (8,799 | ) | 94,060 | |||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 1,307,532 | 493,062 | (91,748 | ) | 1,708,846 | 16,028,974 | (27,272 | ) | 330,943 | |||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 124,364 | 31,061 | (61,203 | ) | 94,222 | 1,031,727 | (27,549 | ) | 15,357 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund | 643,712 | 587,638 | (22,564 | ) | 1,208,786 | 11,217,537 | (584 | ) | 72,163 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 791,651 | 1,200,000 | — | 1,991,651 | 1,991,651 | — | 515 | |||||||||||||||||||||
Total | $73,606,782 | $213,245 | $1,136,225 | |||||||||||||||||||||||||
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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 | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 1,411,094 | 427,387 | (56,458 | ) | 1,782,023 | $12,171,221 | ($65,450 | ) | $636,861 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 896,916 | 194,340 | (97,861 | ) | 993,395 | 23,523,591 | 85,207 | 415,182 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 230,704 | 104,787 | (10,183 | ) | 325,308 | 2,963,554 | 9,955 | 50,824 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 1,097,893 | 262,519 | (205,006 | ) | 1,155,406 | 9,959,603 | (23,680 | ) | 270,049 | |||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 1,920,567 | 337,372 | (213,931 | ) | 2,044,008 | 37,323,583 | 257,824 | 530,650 | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | 1,506,321 | 127,935 | (141,718 | ) | 1,492,538 | 35,014,951 | 299,885 | 249,748 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 897,769 | 386,269 | (309,269 | ) | 974,769 | 17,760,298 | 260,672 | 285,961 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,100,514 | 178,393 | (151,475 | ) | 1,127,432 | 31,320,058 | 133,892 | 555,895 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 689,754 | 30,723 | (60,179 | ) | 660,298 | 11,594,826 | 76,545 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 974,191 | 129,674 | (170,609 | ) | 933,256 | 23,210,079 | 242,620 | 93,815 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 678,365 | 405,190 | (5,305 | ) | 1,078,250 | 12,108,746 | (4,509 | ) | 178,068 | |||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 841,848 | 273,003 | — | 1,114,851 | 11,371,482 | — | 345,243 | |||||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 5,768,889 | 930,668 | (1,700,602 | ) | 4,998,955 | 46,890,200 | 80,238 | 1,047,348 | ||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 581,669 | 101,556 | (187,312 | ) | 495,913 | 5,430,243 | (18,119 | ) | 73,258 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund | 990,297 | 2,187,345 | — | 3,177,642 | 29,488,518 | — | 167,847 | |||||||||||||||||||||
Total | $310,130,953 | $1,335,080 | $4,900,749 | |||||||||||||||||||||||||
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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 | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 738,602 | 544,909 | (19,209 | ) | 1,264,302 | $8,635,180 | ($10,406 | ) | $373,825 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 482,662 | 232,006 | (28,564 | ) | 686,104 | 16,246,949 | 7,119 | 228,009 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 107,098 | 118,824 | — | 225,922 | 2,058,147 | — | 24,524 | |||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 541,190 | 324,283 | (28,358 | ) | 837,115 | 7,215,929 | (8,644 | ) | 135,694 | |||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 1,045,290 | 462,367 | (81,659 | ) | 1,425,998 | 26,038,728 | 18,942 | 299,008 | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | 756,512 | 311,527 | (9,009 | ) | 1,059,030 | 24,844,849 | (3,929 | ) | 130,346 | |||||||||||||||||||
Schwab Dividend Equity Fund | 432,893 | 311,379 | (60,148 | ) | 684,124 | 12,464,737 | 12,345 | 170,379 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 601,049 | 267,718 | (76,358 | ) | 792,409 | 22,013,111 | (506 | ) | 314,282 | |||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 366,578 | 107,536 | (6,502 | ) | 467,612 | 8,211,264 | 1,749 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 517,658 | 197,026 | (61,893 | ) | 652,791 | 16,234,909 | 6,518 | 51,237 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 218,488 | 246,690 | (16,919 | ) | 448,259 | 5,033,944 | (18,442 | ) | 68,250 | |||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 364,703 | 229,907 | (17,804 | ) | 576,806 | 5,883,424 | (8,912 | ) | 158,247 | |||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 2,309,976 | 678,749 | (972,837 | ) | 2,015,888 | 18,909,028 | 66,846 | 398,302 | ||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 197,130 | 101,811 | (22,038 | ) | 276,903 | 3,032,084 | (20,991 | ) | 25,193 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund | — | 1,213,396 | — | 1,213,396 | 11,260,318 | — | 51,877 | |||||||||||||||||||||
Total | $188,082,601 | $41,689 | $2,429,173 | |||||||||||||||||||||||||
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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 | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 2,551,100 | 917,214 | — | 3,468,314 | $23,688,588 | $— | $1,183,554 | |||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 1,659,346 | 296,989 | (65,800 | ) | 1,890,535 | 44,767,869 | 44,491 | 773,796 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 428,307 | 208,581 | (4,032 | ) | 632,856 | 5,765,314 | 81 | 94,356 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 1,925,261 | 488,488 | (116,529 | ) | 2,297,220 | 19,802,034 | (72,909 | ) | 471,632 | |||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 3,513,555 | 593,645 | (221,624 | ) | 3,885,576 | 70,950,619 | 219,183 | 987,398 | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | 2,778,306 | 276,448 | (109,888 | ) | 2,944,866 | 69,086,555 | 62,893 | 460,643 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 1,621,619 | 428,358 | (185,200 | ) | 1,864,777 | 33,976,240 | 47,616 | 535,785 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 2,009,168 | 345,743 | (178,553 | ) | 2,176,358 | 60,459,232 | 45,191 | 1,023,065 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 1,283,238 | 60,336 | (54,546 | ) | 1,289,028 | 22,635,334 | 50,848 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 1,799,946 | 192,130 | (203,173 | ) | 1,788,903 | 44,490,016 | 169,687 | 173,160 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 515,949 | 310,651 | — | 826,600 | 9,282,721 | — | 133,326 | |||||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 875,743 | 363,531 | — | 1,239,274 | 12,640,590 | — | 347,215 | |||||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 5,559,975 | 235,486 | (2,600,988 | ) | 3,194,473 | 29,964,159 | 408,524 | 817,275 | ||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 602,655 | 18,149 | (87,566 | ) | 533,238 | 5,838,960 | (37,203 | ) | 77,019 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund | — | 1,945,276 | (64,655 | ) | 1,880,621 | 17,452,167 | (2,586 | ) | 77,921 | |||||||||||||||||||
Total | $470,800,398 | $935,816 | $7,156,145 | |||||||||||||||||||||||||
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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 | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 696,043 | 549,815 | — | 1,245,858 | $8,509,210 | $— | $357,155 | |||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 452,339 | 242,020 | (19,617 | ) | 674,742 | 15,977,899 | 4,398 | 212,295 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 103,661 | 118,132 | — | 221,793 | 2,020,533 | — | 23,534 | |||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 524,753 | 320,516 | (12,658 | ) | 832,611 | 7,177,104 | (12,715 | ) | 131,762 | |||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 974,826 | 453,630 | (35,587 | ) | 1,392,869 | 25,433,795 | 5,016 | 275,897 | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | 721,316 | 350,547 | (7,235 | ) | 1,064,628 | 24,976,180 | (4,662 | ) | 123,392 | |||||||||||||||||||
Schwab Dividend Equity Fund | 416,050 | 273,392 | (22,492 | ) | 666,950 | 12,151,837 | (1,690 | ) | 165,667 | |||||||||||||||||||
Schwab S&P 500 Index Fund | 562,467 | 256,006 | (38,075 | ) | 780,398 | 21,679,453 | (11,288 | ) | 289,819 | |||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 346,414 | 122,890 | (3,251 | ) | 466,053 | 8,183,885 | 1,170 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 486,881 | 178,256 | (23,987 | ) | 641,150 | 15,945,403 | (6,389 | ) | 47,958 | |||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 82,497 | 69,485 | — | 151,982 | 1,706,763 | — | 23,709 | |||||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 153,909 | 121,275 | — | 275,184 | 2,806,872 | — | 68,555 | |||||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 912,826 | 90,897 | (461,099 | ) | 542,624 | 5,089,811 | 48,736 | 138,478 | ||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 90,505 | 27,630 | — | 118,135 | 1,293,578 | — | 11,566 | |||||||||||||||||||||
Schwab Short-Term Bond Market Fund | — | 418,512 | (21,552 | ) | 396,960 | 3,683,789 | (862 | ) | 13,052 | |||||||||||||||||||
Total | $156,636,112 | $21,714 | $1,882,839 | |||||||||||||||||||||||||
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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 | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 2,884,647 | 1,278,909 | (22,659 | ) | 4,140,897 | $28,282,330 | ($26,964 | ) | $1,369,940 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 1,853,396 | 447,544 | (65,387 | ) | 2,235,553 | 52,937,887 | 56,421 | 869,468 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 470,587 | 269,721 | — | 740,308 | 6,744,210 | — | 104,829 | |||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 2,259,474 | 520,999 | (6,935 | ) | 2,773,538 | 23,907,900 | (6,103 | ) | 581,363 | |||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 4,006,125 | 802,789 | (196,323 | ) | 4,612,591 | 84,225,911 | 114,577 | 1,133,974 | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | 3,039,424 | 522,633 | (19,348 | ) | 3,542,709 | 83,111,947 | (7,316 | ) | 512,791 | |||||||||||||||||||
Schwab Dividend Equity Fund | 1,795,863 | 497,250 | (79,577 | ) | 2,213,536 | 40,330,628 | 8,873 | 622,744 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 2,293,002 | 383,120 | (79,780 | ) | 2,596,342 | 72,126,371 | (11,779 | ) | 1,178,870 | |||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 1,433,445 | 122,661 | (11,645 | ) | 1,544,461 | 27,120,743 | 102 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 2,021,083 | 182,324 | (72,368 | ) | 2,131,039 | 52,998,946 | 1,264 | 197,378 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 259,785 | 63,078 | (55,209 | ) | 267,654 | 3,005,755 | (54,380 | ) | 64,004 | |||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 379,919 | 142,514 | — | 522,433 | 5,328,818 | — | 147,307 | |||||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 2,359,356 | 38,180 | (1,744,564 | ) | 652,972 | 6,124,878 | 412,857 | 286,532 | ||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 280,249 | 13,698 | (112,301 | ) | 181,646 | 1,989,025 | (77,823 | ) | 35,816 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund | — | 1,015,865 | (119,710 | ) | 896,155 | 8,316,323 | (5,697 | ) | 28,045 | |||||||||||||||||||
Total | $496,551,672 | $404,032 | $7,133,061 | |||||||||||||||||||||||||
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Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2045 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 01/23/13(a) | 01/23/13(a) | ||||||||||||||||||||||
Underlying Funds | 1/23/13(a) | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | — | 123,288 | (5,901 | ) | 117,387 | $801,755 | ($4,034 | ) | $12,173 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | — | 67,416 | (4,174 | ) | 63,242 | 1,497,562 | (1,389 | ) | — | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | — | 21,561 | (800 | ) | 20,761 | 189,130 | (985 | ) | — | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | — | 82,160 | (3,304 | ) | 78,856 | 679,737 | (547 | ) | — | |||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | — | 139,112 | (9,178 | ) | 129,934 | 2,372,598 | 1,610 | — | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | — | 104,941 | (4,937 | ) | 100,004 | 2,346,093 | 1,562 | — | ||||||||||||||||||||
Schwab Dividend Equity Fund | — | 67,433 | (4,156 | ) | 63,277 | 1,152,909 | 567 | 8,653 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | — | 78,430 | (3,867 | ) | 74,563 | 2,071,352 | 1,024 | — | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | — | 46,444 | (2,372 | ) | 44,072 | 773,905 | 1,070 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | — | 63,598 | (3,336 | ) | 60,262 | 1,498,720 | 2,886 | — | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | — | 4,124 | (359 | ) | 3,765 | 42,280 | (334 | ) | 252 | |||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | — | 9,364 | — | 9,364 | 95,508 | — | 456 | |||||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | — | 8,729 | (6,326 | ) | 2,403 | 22,545 | (1,394 | ) | 707 | |||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | — | 1,445 | (93 | ) | 1,352 | 14,799 | (67 | ) | — | |||||||||||||||||||
Schwab Short-Term Bond Market Fund | — | 22,117 | (2,478 | ) | 19,639 | 182,252 | (79 | ) | 441 | |||||||||||||||||||
Total | $13,741,145 | ($110 | ) | $22,682 | ||||||||||||||||||||||||
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Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2050 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 1/23/13(a) | 1/23/13(a) | ||||||||||||||||||||||
Underlying Funds | 1/23/13(a) | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | — | 99,550 | (3,326 | ) | 96,224 | $657,210 | ($2,834 | ) | $9,263 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | — | 53,652 | (2,175 | ) | 51,477 | 1,218,964 | 616 | — | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | — | 17,800 | (565 | ) | 17,235 | 157,015 | (650 | ) | — | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | — | 66,241 | (1,570 | ) | 64,671 | 557,464 | 193 | — | ||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | — | 111,786 | (5,216 | ) | 106,570 | 1,945,976 | 238 | — | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | — | 85,385 | (3,020 | ) | 82,365 | 1,932,289 | (777 | ) | — | |||||||||||||||||||
Schwab Dividend Equity Fund | — | 53,394 | (1,598 | ) | 51,796 | 943,727 | (793 | ) | 6,738 | |||||||||||||||||||
Schwab S&P 500 Index Fund | — | 62,674 | (2,488 | ) | 60,186 | 1,671,958 | (472 | ) | — | |||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | — | 37,165 | (1,110 | ) | 36,055 | 633,130 | 137 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | — | 51,007 | (1,751 | ) | 49,256 | 1,224,991 | (8 | ) | — | |||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | — | 355 | — | 355 | 3,989 | — | 22 | |||||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | — | 2,990 | — | 2,990 | 30,500 | — | 131 | |||||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | — | 2,867 | (2,125 | ) | 742 | 6,958 | (358 | ) | 222 | |||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | — | 355 | — | 355 | 3,885 | — | — | |||||||||||||||||||||
Schwab Short-Term Bond Market Fund | — | 13,777 | (4,204 | ) | 9,573 | 88,842 | 15 | 238 | ||||||||||||||||||||
Total | $11,076,898 | ($4,693 | ) | $16,614 | ||||||||||||||||||||||||
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Table of Contents
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2055 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 1/23/13(a) | 1/23/13(a) | ||||||||||||||||||||||
Underlying Funds | 1/23/13(a) | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab Global Real Estate Fund | — | 49,329 | (1,355 | ) | 47,974 | $327,665 | ($960 | ) | $3,990 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | — | 26,723 | (817 | ) | 25,906 | 613,445 | (546 | ) | — | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | — | 8,692 | (174 | ) | 8,518 | 77,595 | (157 | ) | — | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | — | 33,457 | (948 | ) | 32,509 | 280,227 | (252 | ) | — | |||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | — | 55,021 | (1,851 | ) | 53,170 | 970,888 | (555 | ) | — | |||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | — | 42,734 | (1,488 | ) | 41,246 | 967,633 | (482 | ) | — | |||||||||||||||||||
Schwab Dividend Equity Fund | — | 26,688 | (621 | ) | 26,067 | 474,932 | (95 | ) | 2,938 | |||||||||||||||||||
Schwab S&P 500 Index Fund | — | 31,147 | (1,118 | ) | 30,029 | 834,213 | (419 | ) | — | |||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | — | 18,511 | (557 | ) | 17,954 | 315,276 | (35 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | — | 25,516 | (823 | ) | 24,693 | 614,118 | 54 | — | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | — | 141 | — | 141 | 1,583 | — | 12 | |||||||||||||||||||||
(formerly Schwab Treasury Inflation Protected Securities Fund) | ||||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | — | 714 | (608 | ) | 106 | 1,082 | (39 | ) | 42 | |||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | — | 732 | (624 | ) | 108 | 1,012 | (31 | ) | 25 | |||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | — | 175 | — | 175 | 1,920 | — | — | |||||||||||||||||||||
Schwab Short-Term Bond Market Fund | — | 4,199 | (1,616 | ) | 2,583 | 23,966 | 71 | 46 | ||||||||||||||||||||
Total | $5,505,555 | ($3,446 | ) | $7,053 | ||||||||||||||||||||||||
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. | |
(a) | Commencement of operations. |
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 to be charged on a 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.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust 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. For information regarding the trustees please refer to Trustees and Officers table at the end of this report.
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Schwab Target Funds
Financial Notes (continued)
6. 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.
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2013, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab Target 2010 Fund | $15,067,000 | $17,579,000 | ||||||
Schwab Target 2015 Fund | 29,601,000 | 12,949,000 | ||||||
Schwab Target 2020 Fund | 102,472,000 | 48,322,000 | ||||||
Schwab Target 2025 Fund | 94,953,000 | 18,575,000 | ||||||
Schwab Target 2030 Fund | 132,105,000 | 50,605,000 | ||||||
Schwab Target 2035 Fund | 70,681,000 | 8,205,000 | ||||||
Schwab Target 2040 Fund | 124,031,000 | 31,420,000 | ||||||
Schwab Target 2045 Fund | 19,441,729 | 3,611,624 | ||||||
Schwab Target 2050 Fund | 15,458,974 | 2,876,951 | ||||||
Schwab Target 2055 Fund | 6,581,808 | 418,737 |
8. 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 | |||||||
(11/1/12-10/31/13) | (11/1/11-10/31/12) | |||||||
Schwab Target 2010 Fund | $3,899 | $1,527 | ||||||
Schwab Target 2015 Fund | 3,207 | 3,540 | ||||||
Schwab Target 2020 Fund | 5,882 | 1,559 | ||||||
Schwab Target 2025 Fund | 32,594 | 7,669 | ||||||
Schwab Target 2030 Fund | 11,506 | 9,707 | ||||||
Schwab Target 2035 Fund | 3,480 | 2,370 | ||||||
Schwab Target 2040 Fund | 23,159 | 13,870 | ||||||
Schwab Target 2045 Fund* | 467 | — | ||||||
Schwab Target 2050 Fund* | 470 | — | ||||||
Schwab Target 2055 Fund* | 719 | — |
* | Since commencement of operations 1/23/13 |
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Schwab Target Funds
Financial Notes (continued)
9. Federal Income Taxes:
As of October 31, 2013, 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 | $546,310 | $736,563 | $2,744,457 | $1,326,938 | $2,994,339 | $751,951 | $2,122,163 | |||||||||||||||||||||
Undistributed long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized appreciation on investments | 10,827,255 | 15,478,838 | 93,853,126 | 47,321,027 | 167,049,673 | 44,739,502 | 182,571,460 | |||||||||||||||||||||
Unrealized depreciation on investments | (90,112 | ) | (95,987 | ) | (566,346 | ) | (528,409 | ) | (1,034,107 | ) | (347,927 | ) | (641,627 | ) | ||||||||||||||
Other unrealized appreciation (depreciation) | — | — | — | — | — | — | — | |||||||||||||||||||||
Net unrealized appreciation (depreciation) | $10,737,143 | $15,382,851 | $93,286,780 | $46,792,618 | $166,015,566 | $44,391,575 | $181,929,833 | |||||||||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||||||
Undistributed ordinary income | $32,174 | $21,616 | $8,773 | |||||||||||||||||||||||||
Undistributed long-term capital gains | — | — | — | |||||||||||||||||||||||||
Unrealized appreciation on investments | 1,415,958 | 1,146,598 | 576,972 | |||||||||||||||||||||||||
Unrealized depreciation on investments | (10,871 | ) | (5,346 | ) | (2,104 | ) | ||||||||||||||||||||||
Other unrealized appreciation (depreciation) | — | — | — | |||||||||||||||||||||||||
Net unrealized appreciation (depreciation) | $1,405,087 | $1,141,252 | $574,868 | |||||||||||||||||||||||||
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.
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Schwab Target Funds
Financial Notes (continued)
9. Federal Income Taxes (continued):
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2013, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
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 | $2,707,716 | $— | $7,063,866 | $— | $6,336,677 | $— | $6,366,179 | |||||||||||||||||||||
October 31, 2017 | 13,259,379 | 15,291 | 26,262,598 | 404,977 | 21,027,180 | 357,333 | 15,004,416 | |||||||||||||||||||||
October 31, 2018 | — | — | 1,839,068 | — | 890,126 | — | 475,341 | |||||||||||||||||||||
October 31, 2019 | — | — | — | — | 205,693 | — | 51,729 | |||||||||||||||||||||
No expiration* | — | — | — | — | — | — | 384,596 | |||||||||||||||||||||
Total | $15,967,095 | $15,291 | $35,165,532 | $404,977 | $28,459,676 | $357,333 | $22,282,261 | |||||||||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Expiration Date | Fund | Fund | Fund | |||||||||||||||||||||||||
No expiration* | $27,855 | $26,104 | $424 | |||||||||||||||||||||||||
Total | $27,855 | $26,104 | $424 | |||||||||||||||||||||||||
* | As a result of the passage of the Regulated Investment Company Modernization Act of 2010, capital losses incurred after December 31, 2010 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 may increase the likelihood that the pre-enactment capital losses may 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. |
For the year ended October 31, 2013, 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 | $1,893,746 | $425,502 | $1,986,114 | $368,787 | $1,795,439 | $241,185 | $1,203,022 |
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 | $1,315,027 | $1,464,548 | $6,683,111 | $2,993,027 | $9,003,665 | $2,151,560 | $8,424,619 | |||||||||||||||||||||
Long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — | — | — | — | — | |||||||||||||||||||||
Prior 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 | — | — | — | — | — | — | — | |||||||||||||||||||||
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Schwab Target Funds
Financial Notes (continued)
9. Federal Income Taxes (continued):
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||||||
Ordinary income | $— | $— | $— | |||||||||||||||||||||||||
Long-term capital gains | — | — | — | |||||||||||||||||||||||||
Return of capital | — | — | — | |||||||||||||||||||||||||
Prior period distributions | ||||||||||||||||||||||||||||
Ordinary income | $— | $— | $— | |||||||||||||||||||||||||
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, 2013, 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 | 115,584 | 133,582 | 549,450 | 256,612 | 729,849 | 172,510 | 629,069 | |||||||||||||||||||||
Net realized capital gains (losses) | (115,584 | ) | (133,582 | ) | (549,450 | ) | (256,612 | ) | (729,849 | ) | (172,510 | ) | (629,069 | ) | ||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||||||
Capital shares | $— | $— | $— | |||||||||||||||||||||||||
Undistributed net investment income | — | — | — | |||||||||||||||||||||||||
Net realized capital gains (losses) | — | — | — |
As of October 31, 2013, 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, 2013, the funds did not incur any interest or penalties.
10. 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
Schwab Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 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, Schwab Target 2040 Fund, Schwab Target 2045 Fund, Schwab Target 2050 Fund, and Schwab Target 2055 Fund (ten of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2013, the results of each of their operations, the changes in each of their net assets, 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 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, 2013 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 17, 2013
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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, 2013, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Target 2010 Fund | 10.30 | ||||
Schwab Target 2015 Fund | 14.68 | ||||
Schwab Target 2020 Fund | 20.14 | ||||
Schwab Target 2025 Fund | 23.86 | ||||
Schwab Target 2030 Fund | 29.32 | ||||
Schwab Target 2035 Fund | 32.91 | ||||
Schwab Target 2040 Fund | 40.81 | ||||
Schwab Target 2045 Fund | — | ||||
Schwab Target 2050 Fund | — | ||||
Schwab Target 2055 Fund | — |
For the fiscal year ended October 31, 2013, 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 2014 via IRS form 1099 of the amounts for use in preparing their 2013 income tax return.
Schwab Target 2010 Fund | $335,916 | |||
Schwab Target 2015 Fund | 431,628 | |||
Schwab Target 2020 Fund | 2,374,487 | |||
Schwab Target 2025 Fund | 1,089,709 | |||
Schwab Target 2030 Fund | 4,128,818 | |||
Schwab Target 2035 Fund | 1,080,416 | |||
Schwab Target 2040 Fund | 4,992,274 | |||
Schwab Target 2045 Fund | — | |||
Schwab Target 2050 Fund | — | |||
Schwab Target 2055 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 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, Schwab Target 2040 Fund, Schwab Target 2045 Fund, Schwab Target 2050 Fund and Schwab Target 2055 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 23, 2013, and June 4, 2013, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 4, 2013. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, yield, if applicable, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In
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evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of their review of Fund expenses and adviser profitability discussed below. Although Schwab Target 2010 Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Schwab Target 2010 Fund including 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; that recent performance showed improvement and that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers 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 99 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the 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 (advisory services firm) (Oct. 2001 – present). | 76 | Director, WageWorks, Inc. (2010 – present) 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. 2000 – present). | 76 | 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). | 76 | Director, TOUSA (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Mission West Properties (1998 – 2012) Director, Ditech Networks Corporation (1997 – 2012) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 76 | 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). | 76 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) | |||
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). | 76 | Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc. (2009 – present) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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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. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present). | 76 | 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. | 76 | 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. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. 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. | 99 | None | |||
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 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). | |
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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
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 (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). | |
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). | |
David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Capital Trust since 2011.) | Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President and Assistant Secretary (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 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of 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 own stock of The Charles Schwab Corporation, the parent company of 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 represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
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.
Barclays U.S. TIPS (Treasury Inflation-Protected Securities) Index An index that measures the performance of fixed income securities with fixed-rate coupon payments that adjust for inflation, as measured by the Consumer Price Index for All Urban Consumers.
Barclays U.S. Treasury Bills 1 − 3 Months Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value.
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 capital gain or loss is considered unrealized appreciation or depreciation.
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.
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.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
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. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
MSCI Emerging Markets Index 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.
Russell 2000 Index An index that 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.
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.
Target 2010 Composite Index A custom blended index developed by CSIM based on the 2010 fund’s asset allocation glide schedule that will become more conservative as time elapses. The current composite is derived using the following portion allocations: 27.7% Dow Jones U.S. Total Stock Market Index, 8.7% MSCI EAFE Index, 30.1% Barclays U.S. Aggregate Bond Index, 2.0% FTSE EPRA/NAREIT Global Index, 3.5% Barclays U.S. Aggregate Intermediate Bond Index, 0.5% MSCI Emerging Markets Index, 5.6% Barclays U.S. TIPS Index, 1.3% Citigroup Non-U.S. Dollar World Government Bond Index, 14.2% Barclays U.S. Government/Credit: 1 − 5 Years Index, and 6.4% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
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Target 2015 Composite Index A custom blended index developed by CSIM based on the 2015 fund’s asset allocation glide schedule that will become more conservative as time elapses. The current composite is derived using the following portion allocations: 33.0% Dow Jones U.S. Total Stock Market Index, 10.5% MSCI EAFE Index, 27.5% Barclays U.S. Aggregate Bond Index, 2.3% FTSE EPRA/NAREIT Global Index, 3.6% Barclays U.S. Aggregate Intermediate Bond Index, 0.6% MSCI Emerging Markets Index, 4.8% Barclays U.S. TIPS Index, 1.6% Citigroup Non-U.S. Dollar World Government Bond Index, 10.8% Barclays U.S. Government/Credit: 1 − 5 Years Index, and 5.3% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
Target 2020 Composite Index A custom blended index developed by CSIM based on the 2020 fund’s asset allocation glide schedule that will become more conservative as time elapses. The current composite is derived using the following portion allocations: 42.1% Dow Jones U.S. Total Stock Market Index, 13.3% MSCI EAFE Index, 22.4% Barclays U.S. Aggregate Bond Index, 3.0% FTSE EPRA/NAREIT Global Index, 3.4% Barclays U.S. Aggregate Intermediate Bond Index, 0.7% MSCI Emerging Markets Index, 3.4% Barclays U.S. TIPS Index, 1.8% Citigroup Non-U.S. Dollar World Government Bond Index, 6.0% Barclays U.S. Government/Credit: 1 − 5 Years Index, and 3.9% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
Target 2025 Composite Index 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: 48.8% Dow Jones U.S. Total Stock Market Index, 15.5% MSCI EAFE Index, 17.9% Barclays U.S. Aggregate Bond Index, 3.4% FTSE EPRA/NAREIT Global Index, 3.0% Barclays U.S. Aggregate Intermediate Bond Index, 0.8% MSCI Emerging Markets Index, 2.5% Barclays U.S. TIPS Index, 1.7% Citigroup Non-U.S. Dollar World Government Bond Index, 3.4% Barclays U.S. Government/Credit: 1 − 5 Years Index, and 3.0% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
Target 2030 Composite Index A custom blended index developed by CSIM based on the 2030 fund’s asset allocation glide schedule that will become more conservative as time elapses. The current composite is derived using the following portion allocations: 54.1% Dow Jones U.S. Total Stock Market Index, 17.2% MSCI EAFE Index, 13.8% Barclays U.S. Aggregate Bond Index, 3.8% FTSE EPRA/NAREIT Global Index, 2.5% Barclays U.S. Aggregate Intermediate Bond Index, 0.9% MSCI Emerging Markets Index, 1.8% Barclays U.S. TIPS Index, 1.5% Citigroup Non-U.S. Dollar World Government Bond Index, 1.8% Barclays U.S. Government/Credit: 1 − 5 Years Index, and 2.6% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
Target 2035 Composite Index A custom blended index developed by CSIM based on the 2035 fund’s asset allocation glide schedule that will become more conservative as time elapses. The current composite is derived using the following portion allocations: 59.2% Dow Jones U.S. Total Stock Market Index, 18.7% MSCI EAFE Index, 9.8% Barclays U.S. Aggregate Bond Index, 4.2% FTSE EPRA/NAREIT Global Index, 1.8% Barclays U.S. Aggregate Intermediate Bond Index, 1.0% MSCI Emerging Markets Index, 1.2% Barclays U.S. TIPS Index, 1.1% Citigroup Non-U.S. Dollar World Government Bond Index, 0.8% Barclays U.S. Government/Credit: 1 − 5 Years Index, and 2.2% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
Target 2040 Composite Index A custom blended index developed by CSIM based on the 2040 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 62.8% Dow Jones U.S. Total Stock Market Index, 19.9% MSCI EAFE Index, 6.6% Barclays U.S. Aggregate Bond Index, 4.4% FTSE EPRA/NAREIT Global Index, 1.3% Barclays U.S. Aggregate Intermediate Bond Index, 1.0% MSCI Emerging Markets Index, 0.8% Barclays U.S. TIPS Index, 0.8% Citigroup Non-U.S. Dollar World Government Bond Index, 0.3% Barclays U.S. Government/Credit: 1 − 5 Years Index, and 2.1% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
Target 2045 Composite Index A custom blended index developed by CSIM based on the 2045 fund’s asset allocation glide schedule that will become more conservative as time elapses. The current composite is derived using the following portion allocations: 64.9% Dow Jones U.S. Total Stock Market Index, 20.5% MSCI EAFE Index, 4.9% Barclays U.S. Aggregate Bond Index, 4.5% FTSE EPRA/NAREIT Global Index, 0.9% Barclays U.S. Aggregate Intermediate Bond Index, 1.1% MSCI Emerging Markets Index, 0.5% Barclays U.S. TIPS Index, 0.6% Citigroup Non-U.S. Dollar World Government Bond Index, 0.1% Barclays U.S. Government/Credit: 1 − 5 Years Index, and 2.0% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
Target 2050 Composite Index A custom blended index developed by CSIM based on the 2050 fund’s asset allocation glide schedule that will become more conservative as time elapses. The current composite is derived using the following portion allocations: 66.6% Dow Jones U.S. Total Stock Market Index, 21.1% MSCI EAFE Index, 3.2% Barclays U.S. Aggregate Bond Index, 4.7% FTSE EPRA/NAREIT Global Index, 0.6% Barclays U.S. Aggregate Intermediate Bond Index, 1.1% MSCI Emerging Markets Index, 0.3% Barclays U.S. TIPS Index, 0.4% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
Target 2055 Composite Index A custom blended index developed by CSIM based on the 2055 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 67.7% Dow Jones U.S. Total Stock Market Index, 21.4% MSCI EAFE Index, 2.1% Barclays U.S. Aggregate Bond Index, 4.8% FTSE EPRA/NAREIT Global Index, 0.4% Barclays U.S. Aggregate Intermediate Bond Index, 1.1% MSCI Emerging Markets Index, 0.2% Barclays U.S. TIPS Index, 0.3% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays U.S. Treasury Bills: 1 − 3 Months Index.
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
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• | APPLICATION AND REGISTRATION INFORMATION. |
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• | TRANSACTION AND EXPERIENCE INFORMATION. |
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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
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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
© 2013 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 Funds’ 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 Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 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 Index 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®.
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.
© 2013 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR33732-08
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Annual report dated October 31, 2013, 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, 2013
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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 12 Months Ended October 31, 2013 | ||||
Schwab Balanced Fundtm (Ticker Symbol: SWOBX) | 16.13% | |||
Balanced Blended Index | 15.23% | |||
Fund Category: Morningstar Moderate Allocation | 15.85% | |||
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.
The components that make up the composite index may vary over time. For index definition, please see the Glossary.
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.
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/0000950123-14-000021/f30154ctpchandom.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 goals, and for reading this annual report concerning the Schwab Balanced Fund. The fund combines equity and fixed income strategies in U.S. markets, and is designed to provide income, diversification, and an opportunity for long-term growth.
Turning to the 12 months ended October 31, 2013, the fund returned 16.1%, outperforming the 15.2% return of the Balanced Blended Index, as stocks rallied and bonds generally produced negative returns. Impacting results were efforts by the Federal Reserve focused on keeping interest rates low through a policy of quantitative easing to stimulate the U.S. economy. Stocks generally benefitted from this policy. However, with the economy seeming to improve, the Fed began to consider “tapering” its purchases of securities to keep interest rates low. Market volatility and long-term interest rates rose in response, while stocks in sectors traditionally known for paying high dividends underperformed. The Fed’s anticipated policy shift also reduced the performance of bonds, sending yields on longer-term fixed income securities higher, and reducing the performance of Treasuries and corporate bonds alike.
Ultimately, the Fed held off on tapering, and both stocks and bonds began to recover, even as a brief U.S. federal government shutdown and budgetary gridlock created some uncertainty in the markets late in the reporting period.
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2013
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 27.18% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 36.28% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 26.88% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | −1.08% | 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/0000950123-14-000021/f30154ctcaptst06.gif)
Index figures assume dividends and distributions were reinvested, and do not include trading and management costs, which would lower performance. Indices are unmanaged, do not incur management fees, costs and expenses, and you cannot invest in them directly. Remember that past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
Schwab Balanced Fund 3
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From the President continued
Turning to the 12 months ended October 31, 2013, the fund returned 16.1%, outperforming the 15.2% return of the Balanced Blended Index.
Reflecting this environment, the S&P 500 Index returned 27.2%, while the Barclays U.S. Aggregate Bond Index—broadly reflecting the U.S. bond market—returned -1.1%.
For more information about the Schwab Balanced Fund, please continue reading this report. In addition, you can find further details about the Schwab Balanced Fund and our other investment products by visiting 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/0000950123-14-000021/f30154ctschandom.gif)
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. |
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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), and cash or cash equivalents (including money market funds). The Fund’s allocation is designed to provide a mix of the growth opportunities of stock investing with the income opportunities of bonds and other fixed income securities. 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, 2013, the fund returned 16.13%. The fund’s internally calculated comparative index—the Balanced Blended Index (the index)—returned 15.23%.
Market Highlights. U.S. stocks enjoyed strong gains during the 12-month report period, buoyed by some signs of economic improvement combined with low interest rates. The S&P 500 Index returned 27.2%. U.S. small-cap stocks outperformed large-caps. Among large-caps, value and growth performed similarly, but among small-caps, growth solidly outperformed value. Bonds generated weak performances, with the Barclays U.S. Aggregate Bond Index and the Barclays U.S. Treasury Index returning –1.1% and –1.5%, respectively.
Positioning and Strategies. Over the reporting period, the fund’s asset allocations were broadly in line with those of the index.
All three of the fund’s underlying U.S. equity funds contributed positively to total return for the period. The greatest contribution came from the Schwab Core Equity Fund, which returned 25.9% and was the fund’s largest position. The Laudus Small-Cap MarketMasters Fund, Select Shares, and the Laudus U.S. Large Cap Growth Fund both contributed positively to total return, returning 31.7% and 31.5%, respectively. On a relative basis, the Laudus U.S. Large Cap Growth Fund and Laudus Small-Cap MarketMasters Fund both contributed to the fund’s outperformance of the index.
The fixed income allocation generated a negative return that detracted from the fund’s total return. The Schwab Total Bond Market Fund and the Schwab Intermediate-Term Bond Fund returned –1.5% and –0.2%, respectively. Both funds detracted from the fund’s performance relative to the index.
As of 10/31/13:
Statistics
Number of Holdings | 6 | |||
Portfolio Turnover Rate | 33% |
Asset Class Weightings % of Investments
Equity Funds – Large-Cap | 50.9% | |||
Fixed-Income Funds – Intermediate-Term Bond | 36.1% | |||
Equity Funds – Small-Cap | 10.0% | |||
Money Market Funds | 3.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Core Equity Fund | 35.3% | |||
Schwab Total Bond Market Fund | 24.1% | |||
Laudus U.S. Large Cap Growth Fund | 15.6% | |||
Schwab Intermediate-Term Bond Fund | 12.0% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 10.0% | |||
Total | 97.0% |
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 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
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Schwab Balanced Fundtm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsbf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Balanced Fundtm (11/18/96) | 16.13 | % | 10.82 | % | 6.11 | % | |||||||||
Balanced Blended Index | 15.23 | % | 11.84 | % | 6.67 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.78 | % | |||||||||
Fund Category: Morningstar Moderate Allocation | 15.85 | % | 11.80 | % | 6.28 | % |
Fund Expense Ratios3: Net 0.65%; Gross 0.81%
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.
For index definitions, please see the Glossary.
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 | 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 0.65%. 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
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Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2013 and held through October 31, 2013.
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 the fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on the 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. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/13 | at 10/31/13 | 5/1/13–10/31/13 | |||||||||||||
Schwab Balanced Fundtm | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,071.30 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.21 | $ | 0.00 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights 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 365 days of the fiscal year. |
8 Schwab Balanced Fund
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Schwab Balanced Fund™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.51 | 11.61 | 11.00 | 9.99 | 9.82 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.14 | 1 | 0.19 | 1 | 0.17 | 1 | 0.17 | 1 | 0.22 | 1 | ||||||||||||
Net realized and unrealized gains (losses) | 1.85 | 0.88 | 0.63 | 1.03 | 0.64 | |||||||||||||||||
Total from investment operations | 1.99 | 1.07 | 0.80 | 1.20 | 0.86 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.22 | ) | (0.17 | ) | (0.19 | ) | (0.19 | ) | (0.37 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.32 | ) | ||||||||||||||||
Total distributions | (0.22 | ) | (0.17 | ) | (0.19 | ) | (0.19 | ) | (0.69 | ) | ||||||||||||
Net asset value at end of period | 14.28 | 12.51 | 11.61 | 11.00 | 9.99 | |||||||||||||||||
Total return (%) | 16.13 | 9.36 | 7.28 | 12.08 | 9.45 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses2 | 0.00 | 3 | 0.00 | 3 | 0.00 | 3 | 0.00 | 3 | 0.00 | |||||||||||||
Gross operating expenses2 | 0.10 | 0.16 | 0.16 | 0.20 | 0.17 | |||||||||||||||||
Net investment income (loss) | 1.06 | 1.54 | 1.52 | 1.67 | 2.41 | |||||||||||||||||
Portfolio turnover rate | 33 | 38 | 53 | 8 | 21 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 165 | 117 | 109 | 88 | 86 |
1 Calculated based on the average shares outstanding during the period.
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.
See financial notes 9
Table of Contents
Schwab Balanced Fund
Portfolio Holdings as of October 31, 2013
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 | .9% | Other Investment Companies | 133,666,807 | 164,713,996 | ||||||||
99 | .9% | Total Investments | 133,666,807 | 164,713,996 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 91,259 | |||||||||
100 | .0% | Net Assets | 164,805,255 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.9% of net assets | ||||||||
Equity Funds 60.8% | ||||||||
Large-Cap 50.8% | ||||||||
Laudus U.S. Large Cap Growth Fund (a) | 1,405,004 | 25,655,370 | ||||||
Schwab Core Equity Fund (a) | 2,480,385 | 58,189,825 | ||||||
83,845,195 | ||||||||
Small-Cap 10.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 936,684 | 16,448,163 | ||||||
100,293,358 | ||||||||
Fixed-Income Funds 36.1% | ||||||||
Intermediate-Term Bond 36.1% | ||||||||
Schwab Intermediate-Term Bond Fund (a) | 1,943,421 | 19,822,890 | ||||||
Schwab Total Bond Market Fund (a) | 4,226,692 | 39,646,374 | ||||||
59,469,264 | ||||||||
Money Market Fund 3.0% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (b) | 4,951,374 | 4,951,374 | ||||||
Total Other Investment Companies | ||||||||
(Cost $133,666,807) | 164,713,996 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $136,344,502 and the unrealized appreciation and depreciation were $28,530,485 and ($160,991), respectively, with a net unrealized appreciation of $28,369,494.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | The rate shown is the 7-day yield. |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $164,713,996 | $— | $— | $164,713,996 | ||||||||||||
Total | $164,713,996 | $— | $— | $164,713,996 | ||||||||||||
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, 2013.
10 See financial notes
Table of Contents
Schwab Balanced Fund
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $128,715,433) | $159,762,622 | |||||
Investments in unaffiliated issuers, at value (cost $4,951,374) | + | 4,951,374 | ||||
Total investments, at value (cost $133,666,807) | 164,713,996 | |||||
Receivables: | ||||||
Investments sold | 900,000 | |||||
Dividends | 117,554 | |||||
Fund shares sold | 108,486 | |||||
Due from investment adviser | 788 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 3,353 | ||||
Total assets | 165,844,179 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 820,000 | |||||
Independent trustees’ fees | 9 | |||||
Fund shares redeemed | 175,059 | |||||
Accrued expenses | + | 43,856 | ||||
Total liabilities | 1,038,924 | |||||
Net Assets | ||||||
Total assets | 165,844,179 | |||||
Total liabilities | − | 1,038,924 | ||||
Net assets | $164,805,255 | |||||
Net Assets by Source | ||||||
Capital received from investors | 138,808,307 | |||||
Net investment income not yet distributed | 916,263 | |||||
Net realized capital losses | (5,966,504 | ) | ||||
Net unrealized capital appreciation | 31,047,189 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$164,805,255 | 11,542,629 | $14.28 |
See financial notes 11
Table of Contents
Schwab Balanced Fund
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,520,091 | |||||
Interest | + | 22,695 | ||||
Total investment income | 1,542,786 | |||||
Expenses | ||||||
Professional fees | 37,222 | |||||
Registration fees | 30,258 | |||||
Transfer agent fees | 26,578 | |||||
Shareholder reports | 18,448 | |||||
Portfolio accounting fees | 17,717 | |||||
Independent trustees’ fees | 7,938 | |||||
Custodian fees | 3,608 | |||||
Interest expense | 40 | |||||
Other expenses | + | 3,233 | ||||
Total expenses | 145,042 | |||||
Expense reduction by CSIM | − | 145,002 | ||||
Custody credits | − | 5 | ||||
Net expenses | − | 35 | ||||
Net investment income | 1,542,751 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 560,503 | |||||
Net realized gains on sales of affiliated underlying funds | 73,162 | |||||
Net realized gains on unaffiliated investments | + | 2,213 | ||||
Net realized gains | 635,878 | |||||
Net change in unrealized appreciation on affiliated underlying funds | + | 19,300,297 | ||||
Net realized and unrealized gains | 19,936,175 | |||||
Increase in net assets resulting from operations | $21,478,926 |
12 See financial notes
Table of Contents
Schwab Balanced Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $1,542,751 | $1,646,969 | ||||||||
Net realized gains (losses) | 635,878 | (417,870 | ) | |||||||
Net change in unrealized appreciation | + | 19,300,297 | 7,101,600 | |||||||
Increase in net assets from operations | 21,478,926 | 8,330,699 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,969,000 | ) | ($1,421,426 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 6,476,156 | $86,146,565 | 4,301,668 | $52,887,809 | ||||||||||||||
Shares reinvested | 148,002 | 1,838,191 | 115,862 | 1,332,417 | ||||||||||||||
Shares redeemed | + | (4,466,396 | ) | (60,102,818 | ) | (4,446,198 | ) | (53,006,629 | ) | |||||||||
Net transactions in fund shares | 2,157,762 | $27,881,938 | (28,668 | ) | $1,213,597 | |||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 9,384,867 | $117,413,391 | 9,413,535 | $109,290,521 | ||||||||||||||
Total increase or decrease | + | 2,157,762 | 47,391,864 | (28,668 | ) | 8,122,870 | ||||||||||||
End of period | 11,542,629 | $164,805,255 | 9,384,867 | $117,413,391 | ||||||||||||||
Net investment income not yet distributed | $916,263 | $1,031,813 |
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 Target 2045 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Target 2050 Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Target 2055 Fund | |||
Laudus International MarketMasters Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab Dividend Equity Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Small-Cap Equity Fund | Schwab Fundamental Emerging Markets Large Company 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 8) 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 funds 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: Mutual funds are valued at their respective NAVs. |
14
Table of Contents
Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
• | 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 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. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the valuation procedures. | |
• | Short-term securities (60 days or less to maturity): Short-term securities are 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 inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the 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 mutual funds are valued daily at their NAVs, which 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 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 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, 2013 are disclosed in the Portfolio Holdings.
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Schwab Balanced Fund
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 and losses from security transactions are based on the identified costs of the securities involved.
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the fund 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 may receive 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 attributable to these arrangements 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 has evaluated ASU No. 2011-11 and assessed the fund’s financial statement disclosures and determined that adoption of the standard will not have a material effect on the fund’s financial statements.
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Schwab Balanced Fund
Financial Notes (continued)
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.
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. Equity and fixed income 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-adviser(s)) 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 |
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Schwab Balanced Fund
Financial Notes (continued)
3. Risk Factors (continued):
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. | |
• | 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 Markets Risk. Emerging market countries 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 and, at times, it may be difficult to value such investments. | |
• | 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. In addition, investments in derivatives may involve leverage, which means a small percentage of assets invested in derivatives can have a disproportionately large impact on an underlying fund. However, these risks are less severe when the underlying fund uses derivatives for hedging rather than to enhance the underlying fund’s returns or as a substitute for a position or security. | |
• | 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 an underlying 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. The use of leverage may cause the underlying fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy its obligations. | |
• | 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. | |
• | Mortgage Dollar Rolls Risk. Mortgage dollar rolls are transactions in which an underlying fund sells mortgage-backed securities to a dealer and simultaneously agrees to repurchase similar securities in the future at a predetermined price. An underlying fund’s mortgage dollar rolls could lose money if the price of the mortgage-backed securities sold falls below the agreed upon repurchase price, or if the counterparty is unable to honor the agreement. |
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.
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Schwab Balanced Fund
Financial Notes (continued)
4. Affiliates and Affiliated Transactions:
Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”), a wholly owned subsidiary of The Charles Schwab Corporation, serves as 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, 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, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (“expense limitation”) to 0.00%.
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.
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, 2013, the Schwab Balanced Fund’s ownership percentages of other related funds’ shares are:
Laudus U.S. Large Cap Growth Fund | 1.4% | |||
Schwab Core Equity Fund | 2.6% | |||
Laudus Small-Cap MarketMasters Fund | 8.7% | |||
Schwab Intermediate-Term Bond Fund | 5.6% | |||
Schwab Total Bond Market Fund | 4.4% |
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2013.
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 1,303,273 | 675,179 | (573,448 | ) | 1,405,004 | $25,655,370 | $219,860 | $342,522 | ||||||||||||||||||||
(formerly Laudus Growth Investors U.S. Large Cap Growth Fund) | ||||||||||||||||||||||||||||
Schwab Core Equity Fund | 2,160,527 | 1,010,417 | (690,559 | ) | 2,480,385 | 58,189,825 | 182,038 | 348,002 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 866,818 | 383,988 | (314,122 | ) | 936,684 | 16,448,163 | 119,541 | — | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 1,370,897 | 1,267,503 | (694,979 | ) | 1,943,421 | 19,822,890 | (181,225 | ) | 575,787 | |||||||||||||||||||
(formerly Schwab Premier Income Fund) | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 2,967,154 | 2,306,607 | (1,047,069 | ) | 4,226,692 | 39,646,374 | (267,052 | ) | 814,283 | |||||||||||||||||||
Total | $159,762,622 | $73,162 | $2,080,594 | |||||||||||||||||||||||||
* | Distributions received include distributions from net investment income and capital gains, if any, 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 to be charged on a 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.
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Schwab Balanced Fund
Financial Notes (continued)
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust 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. For information regarding the trustees please refer to Trustees and Officers table at the end of this report.
6. 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.
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2013, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||
$72,824,000 | $46,510,000 |
8. 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 | |||||
(11/1/12-10/31/13) | (11/1/11-10/31/12) | |||||
$6,089 | $141,969 |
9. Federal Income Taxes:
As of October 31, 2013, the components of distributable earnings on a tax-basis were as follows:
Undistributed ordinary income | $916,263 | |||
Undistributed long-term capital gains | — | |||
Unrealized appreciation on investments | 28,530,485 | |||
Unrealized depreciation on investments | (160,991 | ) | ||
Other unrealized appreciation (depreciation) | 2 | |||
Net unrealized appreciation (depreciation) | $28,369,496 | |||
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, 2013, the fund had capital loss carryforwards of $3,288,811 available to offset future net capital gains before October 31, 2017.
For the year ended October 31, 2013, the fund had capital losses utilized as follows:
Capital losses utilized | $784,946 |
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Schwab Balanced Fund
Financial Notes (continued)
9. 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 | $1,969,000 | |||
Long-term capital gains | — | |||
Return of capital | — | |||
Prior period distributions | ||||
Ordinary income | $1,421,426 | |||
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 fund 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, 2013, the fund made the following reclassifications:
Capital shares | $— | |||
Undistributed net investment income | 310,699 | |||
Net realized capital gains (losses) | (310,699 | ) |
As of October 31, 2013, 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, 2013, the fund did not incur any interest or penalties.
10. 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, 2013, 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, 2013 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 17, 2013
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Other Federal Tax Information (unaudited)
For corporate shareholders, 19.46% of the fund’s dividend distributions paid during the fiscal year ended October 31, 2013, qualify for the corporate dividends received deduction.
For the fiscal year ended October 31, 2013, the fund designates $384,872 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 2014 via IRS form 1099 of the amounts for use in preparing their 2013 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 23, 2013, and June 4, 2013, and approved the renewal of the Agreement with respect to the Fund for an additional one-year term at the meeting held on June 4, 2013. The Board’s approval of the Agreement with respect to the Fund was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates dedicated to the Fund; |
2. | the Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | the Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to the Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Fund and its shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that many of the Fund’s shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund supported renewal of the Agreement with respect to the Fund.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Fund. Specifically, the Trustees considered the Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return, yield, 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 their review
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of Fund expenses and adviser profitability discussed below. Although the Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to the Fund, including 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 and 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 99 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the 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 (advisory services firm) (Oct. 2001 – present). | 76 | Director, WageWorks, Inc. (2010 – present) 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. 2000 – present). | 76 | 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). | 76 | Director, TOUSA (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Mission West Properties (1998 – 2012) Director, Ditech Networks Corporation (1997 – 2012) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 76 | 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). | 76 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) | |||
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). | 76 | Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc. (2009 – present) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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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. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present). | 76 | 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. | 76 | 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. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. 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. | 99 | None | |||
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 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). | |
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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
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 (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). | |
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). | |
David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Capital Trust since 2011.) | Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President and Assistant Secretary (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 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of 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 own stock of The Charles Schwab Corporation, the parent company of 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.
Balanced Blended Index A custom blended index developed by CSIM that effective August 1, 2013 is composed of 50% S&P 500 Index, 10% Russell 2000 Index, 25% Barclays U.S. Aggregate Bond Index, 12% Barclays US Aggregate Intermediate Bond Index and 3% Barclays U.S. Treasury Bills: 1 − 3 Months Index. Prior to August 1, 2013 the Balanced Blended Index was composed of 60% S&P 500 Index and 40% Barclays U.S. Aggregate Bond Index.
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 represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
Barclays U.S. Treasury Bills 1 − 3 Months An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value.
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 capital gain or loss is considered unrealized appreciation or depreciation.
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.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
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. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
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We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
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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
© 2013 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 Funds’ 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 Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 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 Index 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®.
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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Member SIPC®
Printed on recycled paper.
MFR36112-07
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Annual report dated October 31, 2013, 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.
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Schwab MarketTrack Portfolios ®
Annual Report
October 31, 2013
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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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).
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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 12 Months Ended October 31, 2013 | ||||
Schwab MarketTrack All Equity Portfoliotm (Ticker Symbol: SWEGX) | 28.37% | |||
All Equity Composite Index | 28.36% | |||
Fund Category: Morningstar Large Blend | 27.16% | |||
Performance Details | pages 6-7 | |||
Schwab MarketTrack Growth Portfoliotm (Ticker Symbol: SWHGX) | 22.14% | |||
Growth Composite Index | 22.09% | |||
Fund Category: Morningstar Aggressive Allocation | 20.18% | |||
Performance Details | pages 8-9 | |||
Schwab MarketTrack Balanced Portfoliotm (Ticker Symbol: SWBGX) | 15.82% | |||
Balanced Composite Index | 15.93% | |||
Fund Category: Morningstar Moderate Allocation | 15.85% | |||
Performance Details | pages 10-11 | |||
Schwab MarketTrack Conservative Portfoliotm (Ticker Symbol: SWCGX) | 9.71% | |||
Conservative Composite Index | 10.03% | |||
Fund Category: Morningstar Conservative Allocation | 7.36% | |||
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.
The components that make up each of the composite indices may vary over time. For index definitions, please see the Glossary.
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.
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 goals, and for reading this annual report concerning the Schwab MarketTrack Portfolios. The portfolios combine a variety of passive strategies in U.S. and international markets, seeking to provide diversification, while targeting varying degrees of risk.
Turning to the 12 months ended October 31, 2013, the returns of the portfolios reflected a rally by stocks in U.S. and developed international markets, combined with mostly negative returns by bonds. At the center of these performances were efforts undertaken by the Federal Reserve, the European Central Bank, the Bank of Japan, and many other central banks to keep interest rates low and stimulate economic growth. Stocks generally benefitted from these policies. Signs of improvement in the U.S. led the Fed to initially consider “tapering” its stimulative economic efforts. Stocks in many parts of the world fell in response to this potential policy shift, and long-term bond yields rose, while a brief U.S. federal government shutdown and budgetary gridlock created some uncertainty in the financial markets late in the reporting period.
However, the Fed’s anticipated tapering failed to materialize, and stocks resumed their rally, while long-term bond yields generally remained elevated. Amid this backdrop, the Dow Jones U.S. Total Stock Market Index returned 28.9% and the MSCI EAFE Index returned 27.4%. Among bonds, the Barclays U.S. Aggregate Bond Index returned -1.1%.
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2013
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 27.18% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 36.28% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | 26.88% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | −1.08% | 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/0000950123-14-000021/f30154ctcaptst04.gif)
Index figures assume dividends and distributions were reinvested, and do not include trading and management costs, which would lower performance. Indices are unmanaged, do not incur management fees, costs and expenses, and you cannot invest in them directly. Remember that past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
Schwab MarketTrack Portfolios 3
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From the President continued
Turning to the 12 months ended October 31, 2013, the returns of the portfolios reflected a rally by stocks in U.S. and developed international markets, combined with mostly negative returns by bonds.
For more information about the Schwab MarketTrack Portfolios, please continue reading this report. In addition, you can find further details about the Schwab MarketTrack Portfolios and our other investment products by visiting 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/0000950123-14-000021/f30154ctschandom.gif)
4 Schwab MarketTrack Portfolios
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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. |
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, 2013, the portfolio returned 28.37%. The portfolio’s internally calculated comparative index, the All Equity Composite Index (the composite index), returned 28.36%.
Market Highlights. Stocks enjoyed strong gains during the 12-month report period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. The situation in the euro zone seemed to stabilize, and yields on government bonds from countries such as Greece, Italy, and Spain generally declined. Developed international equity markets performed on par with the broad-based domestic market, with the MSCI EAFE Index (Net) and S&P 500 Index returning 26.9% and 27.2%, respectively. Emerging markets lagged significantly—the MSCI Emerging Markets Index gained 6.9%, reflecting signs of slowing growth early in the period in major emerging markets such as Brazil, India, and China. Internationally, small-cap stocks outperformed large-caps, and value outperformed growth. In the U.S., small-cap stocks outperformed large-caps. Among U.S. large-caps, value and growth performed similarly, but among U.S. small-caps, growth solidly outperformed value.
Positioning and Strategies. Over the reporting period, the portfolio’s asset allocations were broadly in line with those of the composite index.
U.S. equity exposures provided the greatest contribution to the portfolio’s total return for the period. The largest contribution came from the Schwab S&P 500 Index Fund, which gained 27.1% and was the portfolio’s largest position. The portfolio’s next-largest contributor was the Schwab Small-Cap Index Fund, which returned 36.2%. On a relative basis, the Schwab S&P 500 Index Fund underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%. However, the Schwab Small-Cap Index Fund strongly outperformed this benchmark, helping to keep the fund’s performance essentially in line with the composite index.
The portfolio’s international equity exposure also added to the fund’s total return but detracted from performance relative to the index. The portfolio’s position in the Schwab International Index Fund returned 26.4% for the period, slightly underperforming the MSCI EAFE Index (Net), which is the composite index’s international equity allocation component.
As of 10/31/13:
Statistics
Number of Holdings | 4 | |||
Portfolio Turnover Rate | 6% |
Asset Class Weightings % of Investments
Equity Funds – Large Cap | 44.7% | |||
Equity Funds – International | 29.9% | |||
Equity Funds – Small-Cap | 24.9% | |||
Short-Term Investments | 0.5% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab S&P 500 Index Fund | 44.7% | |||
Schwab International Index Fund | 29.9% | |||
Schwab Small-Cap Index Fund | 24.9% | |||
Total | 99.5% |
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. |
6 Schwab MarketTrack Portfolios
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Schwab MarketTrack All Equity Portfoliotm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsmaep.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) | 28.37 | % | 14.38 | % | 7.67 | % | |||||||||
All Equity Composite Index | 28.36 | % | 14.90 | % | 8.08 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Fund Category: Morningstar Large Blend | 27.16 | % | 14.48 | % | 7.01 | % |
Fund Expense Ratios3: Net 0.64%; Gross 0.67%
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.
For index definitions, please see the Glossary.
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 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.14%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
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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% equity, 15% fixed income, and 5% cash and cash equivalents, 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, 2013, the portfolio returned 22.14%. The portfolio’s internally calculated comparative index, the Growth Composite Index (the composite index), returned 22.09%.
Market Highlights. Stocks enjoyed strong gains during the 12-month report period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. The situation in the euro zone seemed to stabilize, and yields on government bonds from countries such as Greece, Italy, and Spain generally declined. Developed international equity markets performed on par with the broad-based domestic market, with the MSCI EAFE Index (Net) and S&P 500 Index returning 26.9% and 27.2%, respectively. Emerging markets lagged significantly—the MSCI Emerging Markets Index gained 6.9%, reflecting signs of slowing growth early in the period in major emerging markets such as Brazil, India, and China. Internationally, small-cap stocks outperformed large-caps, and value outperformed growth. In the U.S., small-cap stocks outperformed large-caps. Among U.S. large-caps, value and growth performed similarly, but among U.S. small-caps, growth solidly outperformed value. On the fixed income side, the Barclays U.S. Aggregate Bond Index returned –1.1% for the period, while the Barclays U.S. Treasury Index returned –1.5%.
Positioning and Strategies. Over the reporting period, the portfolio’s asset allocations were broadly in line with those of the composite index.
U.S. equity exposures provided the greatest contribution to the portfolio’s total return for the period. The largest contribution came from the Schwab S&P 500 Index Fund, which returned 27.1% and was the portfolio’s largest position. The portfolio’s next-largest contributor was the Schwab Small-Cap Index Fund, which returned 36.2%. On a relative basis, the Schwab S&P 500 Index Fund underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%. However, the Schwab Small-Cap Index Fund strongly outperformed this benchmark and positively contributed to the fund’s outperformance of the composite index.
The portfolio’s international equity exposure also added to the fund’s total return but detracted from performance relative to the index. The portfolio’s position in the Schwab International Index Fund returned 26.4%, slightly underperforming the MSCI EAFE Index (Net), which is the composite index’s international equity allocation component.
The fixed-income allocation generated a negative return that detracted from the portfolio’s total return. The Schwab Total Bond Market Fund returned –1.5% for the report period. On a relative basis, this return was lower than the –1.1% return of the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index. As a result, this allocation also slightly detracted from the portfolio’s relative performance.
As of 10/31/13:
Statistics
Number of Holdings | 7 | |||
Portfolio Turnover Rate | 9% |
Asset Class Weightings % of Investments
Equity Funds – Large-Cap | 40.2% | |||
Equity Funds – International | 20.3% | |||
Equity Funds – Small-Cap | 19.9% | |||
Fixed-Income Funds – Intermediate-Term Bond | 14.6% | |||
Short-Term Investments | 3.4% | |||
Money Market Funds | 1.6% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab S&P 500 Index Fund | 40.2% | |||
Schwab International Index Fund | 20.3% | |||
Schwab Small-Cap Index Fund | 19.9% | |||
Schwab Total Bond Market Fund | 14.6% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.6% | |||
Total | 96.6% |
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. |
8 Schwab MarketTrack Portfolios
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Schwab MarketTrack Growth Portfoliotm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsmgp.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Growth Portfoliotm (11/20/95) | 22.14 | % | 12.76 | % | 6.94 | % | |||||||||
Growth Composite Index | 22.09 | % | 13.19 | % | 7.48 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Fund Category: Morningstar Aggressive Allocation | 20.18 | % | 12.66 | % | 6.53 | % |
Fund Expense Ratios3: 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.
For index definitions, please see the Glossary.
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 | 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. |
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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 stock, bond, and cash investments. The portfolio seeks to remain close to the target allocations of 60% equity, 35% fixed income, and 5% cash and cash equivalents, 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, 2013, the portfolio returned 15.82%. The portfolio’s internally calculated comparative index, the Balanced Composite Index (the composite index), returned 15.93%.
Market Highlights. Stocks enjoyed strong gains during the 12-month report period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. The situation in the euro zone seemed to stabilize, and yields on government bonds from countries such as Greece, Italy, and Spain generally declined. Developed international equity markets performed on par with the broad-based domestic market, with the MSCI EAFE Index (Net) and S&P 500 Index returning 26.9% and 27.2%, respectively. Emerging markets lagged significantly—the MSCI Emerging Markets Index gained 6.9%, reflecting signs of slowing growth early in the period in major emerging markets such as Brazil, India, and China. Internationally, small-cap stocks outperformed large-caps, and value outperformed growth. In the U.S., small-cap stocks outperformed large-caps. Among U.S. large-caps, value and growth performed similarly, but among U.S. small-caps, growth solidly outperformed value. On the fixed income side, the Barclays U.S. Aggregate Bond Index returned –1.1% for the period, while the Barclays U.S. Treasury Index returned –1.5%.
Positioning and Strategies. Over the reporting period, the portfolio’s asset allocations were broadly in line with those of the composite index.
U.S. equity exposures contributed positively to the portfolio’s total return for the period. The largest contribution came from the Schwab S&P 500 Index Fund, which returned 27.1% and was the portfolio’s second-largest position. The Schwab Small-Cap Index Fund also contributed, returning 36.2%. On a relative basis, the Schwab S&P 500 Index Fund underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%. In contrast, the Schwab Small-Cap Index Fund strongly outperformed this benchmark, contributing to the fund’s performance relative to the composite index.
The portfolio’s international equity exposure also added to the fund’s total return but detracted from performance relative to the index. The portfolio’s position in the Schwab International Index Fund gained 26.4%, slightly underperforming the MSCI EAFE Index (Net), which is the composite index’s international equity allocation component.
The fixed-income allocation generated a negative return that detracted from the portfolio’s total return. The Schwab Total Bond Market Fund—the portfolio’s largest position—returned –1.5% for the report period. On a relative basis, this return was lower than the –1.1% return of the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index. As a result, this allocation also detracted from the portfolio’s relative performance.
As of 10/31/13:
Statistics
Number of Holdings | 7 | |||
Portfolio Turnover Rate | 12% |
Asset Class Weightings % of Investments
Fixed-Income Funds – Intermediate-Term Bond | 34.7% | |||
Equity Funds – Large-Cap | 30.2% | |||
Equity Funds – International | 15.2% | |||
Equity Funds – Small-Cap | 15.0% | |||
Short-Term Investments | 3.2% | |||
Money Market Funds | 1.7% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Total Bond Market Fund | 34.7% | |||
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 | 1.7% | |||
Total | 96.8% |
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 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsmbf.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Balanced Portfoliotm (11/20/95) | 15.82 | % | 10.85 | % | 6.07 | % | |||||||||
Balanced Composite Index | 15.93 | % | 11.50 | % | 6.92 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.78 | % | |||||||||
Fund Category: Morningstar Moderate Allocation | 15.85 | % | 11.80 | % | 6.28 | % |
Fund Expense Ratios3: Net 0.69%; Gross 0.72%
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.
For index definitions, please see the Glossary.
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 | 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. |
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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 stock, bond, and cash investments. The portfolio seeks to remain close to the target allocations of 55% fixed income, 40% equity, and 5% cash and cash equivalents, 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, 2013, the portfolio returned 9.71%. The portfolio’s internally calculated comparative index, the Conservative Composite Index (the composite index), returned 10.03%.
Market Highlights. Stocks enjoyed strong gains during the 12-month report period, buoyed by some signs of economic improvement in various parts of the globe combined with low interest rates. The situation in the euro zone seemed to stabilize, and yields on government bonds from countries such as Greece, Italy, and Spain generally declined. Developed international equity markets performed on par with the broad-based domestic market, with the MSCI EAFE Index (Net) and S&P 500 Index returning 26.9% and 27.2%, respectively. Emerging markets lagged significantly—the MSCI Emerging Markets Index gained 6.9%, reflecting signs of slowing growth early in the period in major emerging markets such as Brazil, India, and China. Internationally, small-cap stocks outperformed large-caps, and value outperformed growth. In the U.S., small-cap stocks outperformed large-caps. Among U.S. large-caps, value and growth performed similarly, but among U.S. small-caps, growth solidly outperformed value. On the fixed income side, the Barclays U.S. Aggregate Bond Index returned –1.1% for the period, while the Barclays U.S. Treasury Index returned –1.5%.
Positioning and Strategies. Over the reporting period, the portfolio’s asset allocations were broadly in line with those of the composite index.
U.S. equity exposures contributed positively to the portfolio’s total return for the period. The largest contribution came from the Schwab S&P 500 Index Fund, which returned 27.1% and was the portfolio’s second-largest position. The portfolio’s holdings of the Schwab Small-Cap Index Fund also contributed, returning 36.2%. On a relative basis, the Schwab S&P 500 Index Fund underperformed the composite index’s U.S. equity allocation component, the Dow Jones U.S. Total Stock Market Index, which returned 28.9%. However, the Schwab Small-Cap Index Fund strongly outperformed this benchmark and enhanced the fund’s performance compared with the composite index.
The portfolio’s international equity exposure also added to the fund’s total return but detracted from performance relative to the index. The portfolio’s position in the Schwab International Index Fund returned 26.4%, slightly underperforming the MSCI EAFE Index (Net), which is the composite index’s international equity allocation component.
The fixed-income allocation generated a negative return that detracted from the portfolio’s total return. The Schwab Total Bond Market Fund—the portfolio’s largest position—returned – 1.5% for the report period. On a relative basis, this return was lower than the –1.1% return of the composite index’s U.S. fixed-income allocation component, the Barclays U.S. Aggregate Bond Index. As a result, this allocation also detracted from the portfolio’s relative performance.
As of 10/31/13:
Statistics
Number of Holdings | 7 | |||
Portfolio Turnover Rate | 15% |
Asset Class Weightings % of Investments
Fixed-Income Funds – Intermediate-Term Bond | 54.7% | |||
Equity Funds – Large-Cap | 20.2% | |||
Equity Funds – International | 10.2% | |||
Equity Funds – Small-Cap | 10.0% | |||
Short-Term Investments | 3.2% | |||
Money Market Funds | 1.7% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Total Bond Market Fund | 54.7% | |||
Schwab S&P 500 Index Fund | 20.2% | |||
Schwab International Index Fund | 10.2% | |||
Scwhab Small-Cap Index Fund | 9.9% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.7% | |||
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. |
12 Schwab MarketTrack Portfolios
Table of Contents
Schwab MarketTrack Conservative Portfoliotm
Performance and Fund Facts as of 10/31/13
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, 2003 – October 31, 2013
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-14-000021/f30154ctsmcp.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Conservative Portfoliotm (11/20/95) | 9.71 | % | 8.83 | % | 5.10 | % | |||||||||
Conservative Composite Index | 10.03 | % | 9.70 | % | 6.25 | % | |||||||||
S&P 500® Index | 27.18 | % | 15.17 | % | 7.46 | % | |||||||||
Barclays U.S. Aggregate Bond Index | -1.08 | % | 6.09 | % | 4.78 | % | |||||||||
Fund Category: Morningstar Conservative Allocation | 7.36 | % | 9.69 | % | 5.27 | % |
Fund Expense Ratios3: 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.
For index definitions, please see the Glossary.
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 | 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 may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning May 1, 2013 and held through October 31, 2013.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/13 | at 10/31/13 | 5/1/13–10/31/13 | |||||||||||||
Schwab MarketTrack All Equity Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,113.50 | $ | 2.66 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000.00 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Growth Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,088.40 | $ | 2.63 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000.00 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Balanced Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,060.60 | $ | 2.60 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000.00 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Conservative Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,032.00 | $ | 2.56 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000.00 | $ | 1,022.68 | $ | 2.55 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights 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 365 days of the fiscal year. |
14 Schwab MarketTrack Portfolios
Table of Contents
Schwab MarketTrack All Equity Portfolio™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.79 | 11.52 | 11.30 | 9.82 | 9.44 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.27 | 0.25 | 0.16 | 0.12 | 0.30 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.27 | 1.02 | 0.27 | 1.50 | 0.83 | |||||||||||||||||
Total from investment operations | 3.54 | 1.27 | 0.43 | 1.62 | 1.13 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.34 | ) | — | (0.21 | ) | (0.14 | ) | (0.23 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | — | (0.52 | ) | ||||||||||||||||
Total distributions | (0.34 | ) | — | (0.21 | ) | (0.14 | ) | (0.75 | ) | |||||||||||||
Net asset value at end of period | 15.99 | 12.79 | 11.52 | 11.30 | 9.82 | |||||||||||||||||
Total return (%) | 28.37 | 11.02 | 3.76 | 16.62 | 13.54 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.52 | 0.54 | 0.53 | 0.54 | 0.67 | |||||||||||||||||
Net investment income (loss) | 1.84 | 1.93 | 1.37 | 1.14 | 3.46 | |||||||||||||||||
Portfolio turnover rate | 6 | 6 | 12 | 8 | 10 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 586 | 475 | 476 | 489 | 461 |
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, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .5% | Other Investment Companies | 380,206,398 | 583,334,782 | ||||||||
0 | .5% | Short-Term Investment | 2,674,634 | 2,674,634 | ||||||||
100 | .0% | Total Investments | 382,881,032 | 586,009,416 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 131,043 | |||||||||
100 | .0% | Total Net Assets | 586,140,459 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.5% of net assets | ||||||||
Equity Funds 99.5% | ||||||||
International 29.9% | ||||||||
Schwab International Index Fund (a) | 8,802,979 | 175,355,339 | ||||||
Large-Cap 44.7% | ||||||||
Schwab S&P 500 Index Fund (a) | 9,440,636 | 262,260,855 | ||||||
Small-Cap 24.9% | ||||||||
Schwab Small-Cap Index Fund (a) | 5,275,836 | 145,718,588 | ||||||
Total Other Investment Companies | ||||||||
(Cost $380,206,398) | 583,334,782 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.5% of net assets | ||||||||
Time Deposit 0.5% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/13 | 2,674,634 | 2,674,634 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,674,634) | 2,674,634 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $397,376,438 and the unrealized appreciation and depreciation were $188,632,978 and ($0), respectively, with a net unrealized appreciation of $188,632,978.
(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, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $583,334,782 | $— | $— | $583,334,782 | ||||||||||||
Short-Term Investment1 | — | 2,674,634 | — | 2,674,634 | ||||||||||||
Total | $583,334,782 | $2,674,634 | $— | $586,009,416 | ||||||||||||
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, 2013.
16 See financial notes
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $380,206,398) | $583,334,782 | |||||
Investments in unaffiliated issuers, at value (cost $2,674,634) | + | 2,674,634 | ||||
Total investments, at value (cost $382,881,032) | 586,009,416 | |||||
Receivables: | ||||||
Investments sold | 1,900,000 | |||||
Fund shares sold | 478,170 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 12,846 | ||||
Total assets | 588,400,434 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 1,900,000 | |||||
Investment adviser and administrator fees | 11,458 | |||||
Shareholder service fees | 12,534 | |||||
Fund shares redeemed | 281,693 | |||||
Accrued expenses | + | 54,290 | ||||
Total liabilities | 2,259,975 | |||||
Net Assets | ||||||
Total assets | 588,400,434 | |||||
Total liabilities | − | 2,259,975 | ||||
Net assets | $586,140,459 | |||||
Net Assets by Source | ||||||
Capital received from investors | 433,350,203 | |||||
Net investment income not yet distributed | 9,726,658 | |||||
Net realized capital losses | (60,064,786 | ) | ||||
Net unrealized capital appreciation | 203,128,384 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$586,140,459 | 36,646,592 | $15.99 |
See financial notes 17
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $12,365,374 | |||||
Interest | + | 667 | ||||
Total investment income | 12,366,041 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,213,529 | |||||
Shareholder service fees | 1,289,000 | |||||
Shareholder reports | 42,601 | |||||
Professional fees | 38,474 | |||||
Transfer agent fees | 38,045 | |||||
Portfolio accounting fees | 25,457 | |||||
Registration fees | 25,234 | |||||
Custodian fees | 11,552 | |||||
Independent trustees’ fees | 10,626 | |||||
Other expenses | + | 35,696 | ||||
Total expenses | 2,730,214 | |||||
Expense reduction by CSIM and its affiliates | − | 92,105 | ||||
Net expenses | − | 2,638,109 | ||||
Net investment income | 9,727,932 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 2,765,058 | |||||
Net realized gains on sales of affiliated underlying funds | + | 4,463,230 | ||||
Net realized gains | 7,228,288 | |||||
Net change in unrealized appreciation on affiliated underlying funds | + | 114,728,861 | ||||
Net realized and unrealized gains | 121,957,149 | |||||
Increase in net assets resulting from operations | $131,685,081 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $9,727,932 | $9,163,297 | ||||||||
Net realized gains | 7,228,288 | 10,527,329 | ||||||||
Net change in unrealized appreciation | + | 114,728,861 | 30,350,130 | |||||||
Increase in net assets from operations | 131,685,081 | 50,040,756 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($12,561,634 | ) | $— |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 4,265,588 | $60,479,156 | 3,182,278 | $38,781,401 | ||||||||||||||
Shares reinvested | 918,465 | 11,765,529 | — | — | ||||||||||||||
Shares redeemed | + | (5,656,792 | ) | (79,997,553 | ) | (7,420,620 | ) | (90,468,387 | ) | |||||||||
Net transactions in fund shares | (472,739 | ) | ($7,752,868 | ) | (4,238,342 | ) | ($51,686,986 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 37,119,331 | $474,769,880 | 41,357,673 | $476,416,110 | ||||||||||||||
Total increase or decrease | + | (472,739 | ) | 111,370,579 | (4,238,342 | ) | (1,646,230 | ) | ||||||||||
End of period | 36,646,592 | $586,140,459 | 37,119,331 | $474,769,880 | ||||||||||||||
Net investment income not yet distributed | $9,726,658 | $12,560,360 |
See financial notes 19
Table of Contents
Schwab MarketTrack Growth Portfolio™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 18.08 | 16.85 | 16.35 | 14.51 | 13.71 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.34 | 0.30 | 0.24 | 0.19 | 0.39 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.60 | 1.35 | 0.51 | 1.95 | 1.25 | |||||||||||||||||
Total from investment operations | 3.94 | 1.65 | 0.75 | 2.14 | 1.64 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.35 | ) | (0.42 | ) | (0.25 | ) | (0.30 | ) | (0.40 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.44 | ) | ||||||||||||||||
Total distributions | (0.35 | ) | (0.42 | ) | (0.25 | ) | (0.30 | ) | (0.84 | ) | ||||||||||||
Net asset value at end of period | 21.67 | 18.08 | 16.85 | 16.35 | 14.51 | |||||||||||||||||
Total return (%) | 22.14 | 10.03 | 4.55 | 14.86 | 12.95 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.52 | 0.53 | 0.52 | 0.52 | 0.66 | |||||||||||||||||
Net investment income (loss) | 1.71 | 1.78 | 1.39 | 1.25 | 3.03 | |||||||||||||||||
Portfolio turnover rate | 9 | 9 | 17 | 14 | 23 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 680 | 566 | 562 | 549 | 507 |
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, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .6% | Other Investment Companies | 393,391,363 | 657,110,466 | ||||||||
3 | .4% | Short-Term Investments | 22,780,423 | 22,780,423 | ||||||||
100 | .0% | Total Investments | 416,171,786 | 679,890,889 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 326,338 | |||||||||
100 | .0% | Total Net Assets | 680,217,227 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.6% of net assets | ||||||||
Equity Funds 80.4% | ||||||||
International 20.3% | ||||||||
Schwab International Index Fund (a) | 6,921,005 | 137,866,426 | ||||||
Large-Cap 40.2% | ||||||||
Schwab S&P 500 Index Fund (a) | 9,836,526 | 273,258,689 | ||||||
Small-Cap 19.9% | ||||||||
Schwab Small-Cap Index Fund (a) | 4,916,709 | 135,799,515 | ||||||
546,924,630 | ||||||||
Fixed-Income Fund 14.6% | ||||||||
Intermediate-Term Bond 14.6% | ||||||||
Schwab Total Bond Market Fund (a) | 10,568,831 | 99,135,638 | ||||||
Money Market Fund 1.6% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.03% (a)(b) | 11,050,198 | 11,050,198 | ||||||
Total Other Investment Companies | ||||||||
(Cost $393,391,363) | 657,110,466 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.4% of net assets | ||||||||
Time Deposits 3.4% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/13 | 2,298,259 | 2,298,259 | ||||||
National Australia Bank | ||||||||
0.03%, 11/01/13 | 20,482,164 | 20,482,164 | ||||||
Total Short-Term Investments | ||||||||
(Cost $22,780,423) | 22,780,423 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $421,164,058 and the unrealized appreciation and depreciation were $258,726,831 and ($0), respectively, with a net unrealized appreciation of $258,726,831.
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | The rate shown is the 7-day yield. |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $657,110,466 | $— | $— | $657,110,466 | ||||||||||||
Short-Term Investments1 | — | 22,780,423 | — | 22,780,423 | ||||||||||||
Total | $657,110,466 | $22,780,423 | $— | $679,890,889 | ||||||||||||
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, 2013.
See financial notes 21
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $393,391,363) | $657,110,466 | |||||
Investments in unaffiliated issuers, at value (cost $22,780,423) | + | 22,780,423 | ||||
Total investments, at value (cost $416,171,786) | 679,890,889 | |||||
Receivables: | ||||||
Investments sold | 3,100,000 | |||||
Fund shares sold | 441,328 | |||||
Dividends | 196,475 | |||||
Interest | 19 | |||||
Prepaid expenses | + | 15,811 | ||||
Total assets | 683,644,522 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 3,096,020 | |||||
Investment adviser and administrator fees | 12,756 | |||||
Shareholder service fees | 14,492 | |||||
Independent trustees’ fees | 1 | |||||
Fund shares redeemed | 249,047 | |||||
Accrued expenses | + | 54,979 | ||||
Total liabilities | 3,427,295 | |||||
Net Assets | ||||||
Total assets | 683,644,522 | |||||
Total liabilities | − | 3,427,295 | ||||
Net assets | $680,217,227 | |||||
Net Assets by Source | ||||||
Capital received from investors | 423,637,724 | |||||
Distributions in excess of net investment income | (610,915 | ) | ||||
Net realized capital losses | (6,528,685 | ) | ||||
Net unrealized capital appreciation | 263,719,103 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$680,217,227 | 31,383,198 | $21.67 |
22 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | �� | $13,638,107 | ||||
Interest | + | 6,009 | ||||
Total investment income | 13,644,116 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,419,938 | |||||
Shareholder service fees | 1,516,050 | |||||
Shareholder reports | 47,051 | |||||
Transfer agent fees | 45,211 | |||||
Professional fees | 39,329 | |||||
Registration fees | 32,742 | |||||
Portfolio accounting fees | 26,328 | |||||
Custodian fees | 13,065 | |||||
Independent trustees’ fees | 11,291 | |||||
Other expenses | + | 47,989 | ||||
Total expenses | 3,198,994 | |||||
Expense reduction by CSIM and its affiliates | − | 112,174 | ||||
Net expenses | − | 3,086,820 | ||||
Net investment income | 10,557,296 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 2,630,959 | |||||
Net realized gains on sales of affiliated underlying funds | 8,641,848 | |||||
Net realized gains on unaffiliated investments | + | 988 | ||||
Net realized gains | 11,273,795 | |||||
Net change in unrealized appreciation on affiliated underlying funds | + | 101,623,253 | ||||
Net realized and unrealized gains | 112,897,048 | |||||
Increase in net assets resulting from operations | $123,454,344 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $10,557,296 | $12,009,728 | ||||||||
Net realized gains | 11,273,795 | 23,457,290 | ||||||||
Net change in unrealized appreciation | + | 101,623,253 | 25,141,652 | |||||||
Increase in net assets from operations | 123,454,344 | 60,608,670 | ||||||||
Distributions to Shareholders1 | ||||||||||
Distributions from net investment income | ||||||||||
Investor Shares | (10,641,577 | ) | (13,718,858 | ) | ||||||
P Shares | + | — | (2,646,818 | ) | ||||||
Total distributions from net investment income | ($10,641,577 | ) | ($16,365,676 | ) |
Transactions in Fund Shares1
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 3,956,940 | $78,029,608 | 3,069,722 | $53,342,242 | ||||||||||||||
P Shares | + | — | — | 1,037,994 | 17,419,210 | |||||||||||||
Total shares sold | 3,956,940 | $78,029,608 | 4,107,716 | $70,761,452 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 556,707 | $10,081,957 | 797,108 | $13,048,670 | ||||||||||||||
P Shares | + | — | — | 161,786 | 2,646,818 | |||||||||||||
Total shares reinvested | 556,707 | $10,081,957 | 958,894 | $15,695,488 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (4,460,927 | ) | ($87,149,494 | ) | (5,854,994 | ) | ($101,946,667 | ) | ||||||||||
P Shares | + | — | — | (6,937,729 | ) | (120,546,911 | ) | |||||||||||
Total shares redeemed | (4,460,927 | ) | ($87,149,494 | ) | (12,792,723 | ) | ($222,493,578 | ) | ||||||||||
Net transactions in fund shares | 52,720 | $962,071 | (7,726,113 | ) | ($136,036,638 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 31,330,478 | $566,442,389 | 39,056,591 | $658,236,033 | ||||||||||||||
Total increase or decrease | + | 52,720 | 113,774,838 | (7,726,113 | ) | (91,793,644 | ) | |||||||||||
End of period | 31,383,198 | $680,217,227 | 31,330,478 | $566,442,389 | ||||||||||||||
Distributions in excess of net investment income | ($610,915 | ) | ($526,634 | ) |
1 | Effective December 6, 2012, the P Share class was terminated. |
24 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 16.33 | 15.41 | 14.96 | 13.54 | 12.74 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.31 | 0.29 | 0.25 | 0.23 | 0.38 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.23 | 1.01 | 0.46 | 1.50 | 1.11 | |||||||||||||||||
Total from investment operations | 2.54 | 1.30 | 0.71 | 1.73 | 1.49 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.32 | ) | (0.38 | ) | (0.26 | ) | (0.31 | ) | (0.44 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.25 | ) | ||||||||||||||||
Total distributions | (0.32 | ) | (0.38 | ) | (0.26 | ) | (0.31 | ) | (0.69 | ) | ||||||||||||
Net asset value at end of period | 18.55 | 16.33 | 15.41 | 14.96 | 13.54 | |||||||||||||||||
Total return (%) | 15.82 | 8.61 | 4.80 | 12.92 | 12.41 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.52 | 0.53 | 0.52 | 0.52 | 0.66 | |||||||||||||||||
Net investment income (loss) | 1.75 | 1.86 | 1.64 | 1.59 | 3.09 | |||||||||||||||||
Portfolio turnover rate | 12 | 12 | 25 | 22 | 30 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 481 | 425 | 432 | 450 | 434 |
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, 2013
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 | .8% | Other Investment Companies | 309,176,784 | 465,395,908 | ||||||||
3 | .2% | Short-Term Investments | 15,628,641 | 15,628,641 | ||||||||
100 | .0% | Total Investments | 324,805,425 | 481,024,549 | ||||||||
(0 | .0%) | Other Assets and Liabilities, Net | (43,927 | ) | ||||||||
100 | .0% | Total Net Assets | 480,980,622 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.8% of net assets | ||||||||
Equity Funds 60.4% | ||||||||
International 15.2% | ||||||||
Schwab International Index Fund (a) | 3,683,193 | 73,369,204 | ||||||
Large-Cap 30.2% | ||||||||
Schwab S&P 500 Index Fund (a) | 5,225,847 | 145,174,024 | ||||||
Small-Cap 15.0% | ||||||||
Schwab Small-Cap Index Fund (a) | 2,607,484 | 72,018,706 | ||||||
290,561,934 | ||||||||
Fixed-Income Fund 34.7% | ||||||||
Intermediate-Term Bond 34.7% | ||||||||
Schwab Total Bond Market Fund (a) | 17,782,598 | 166,800,771 | ||||||
Money Market Fund 1.7% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.03% (a)(b) | 8,033,203 | 8,033,203 | ||||||
Total Other Investment Companies | ||||||||
(Cost $309,176,784) | 465,395,908 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.2% of net assets | ||||||||
Time Deposits 3.2% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/13 | 1,152,775 | 1,152,775 | ||||||
JPMorgan Chase | ||||||||
0.03%, 11/01/13 | 14,475,866 | 14,475,866 | ||||||
Total Short-Term Investments | ||||||||
(Cost $15,628,641) | 15,628,641 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $332,451,644 and the unrealized appreciation and depreciation were $148,572,905 and ($0), respectively, with a net unrealized appreciation of $148,572,905.
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | The rate shown is the 7-day yield. |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $465,395,908 | $— | $— | $465,395,908 | ||||||||||||
Short-Term Investments1 | — | 15,628,641 | — | 15,628,641 | ||||||||||||
Total | $465,395,908 | $15,628,641 | $— | $481,024,549 | ||||||||||||
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, 2013.
26 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $309,176,784) | $465,395,908 | |||||
Investments in unaffiliated issuers, at value (cost $15,628,641) | + | 15,628,641 | ||||
Total investments, at value (cost $324,805,425) | 481,024,549 | |||||
Receivables: | ||||||
Investments sold | 3,300,000 | |||||
Fund shares sold | 512,238 | |||||
Dividends | 332,444 | |||||
Interest | 13 | |||||
Prepaid expenses | + | 11,534 | ||||
Total assets | 485,180,778 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 3,631,821 | |||||
Investment adviser and administrator fees | 8,604 | |||||
Shareholder service fees | 10,466 | |||||
Independent trustees’ fees | 3 | |||||
Fund shares redeemed | 510,394 | |||||
Accrued expenses | + | 38,868 | ||||
Total liabilities | 4,200,156 | |||||
Net Assets | ||||||
Total assets | 485,180,778 | |||||
Total liabilities | − | 4,200,156 | ||||
Net assets | $480,980,622 | |||||
Net Assets by Source | ||||||
Capital received from investors | 328,261,177 | |||||
Net investment income not yet distributed | 1,125,984 | |||||
Net realized capital losses | (4,625,663 | ) | ||||
Net unrealized capital appreciation | 156,219,124 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$480,980,622 | 25,932,287 | $18.55 |
See financial notes 27
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $10,119,630 | |||||
Interest | + | 4,392 | ||||
Total investment income | 10,124,022 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,036,320 | |||||
Shareholder service fees | 1,110,087 | |||||
Professional fees | 37,887 | |||||
Registration fees | 31,888 | |||||
Transfer agent fees | 28,800 | |||||
Portfolio accounting fees | 23,921 | |||||
Shareholder reports | 19,384 | |||||
Custodian fees | 10,781 | |||||
Independent trustees’ fees | 10,155 | |||||
Other expenses | + | 26,130 | ||||
Total expenses | 2,335,353 | |||||
Expense reduction by CSIM and its affiliates | − | 82,485 | ||||
Net expenses | − | 2,252,868 | ||||
Net investment income | 7,871,154 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 1,475,871 | |||||
Net realized gains on sales of affiliated underlying funds | 10,371,598 | |||||
Net realized gains on unaffiliated investments | + | 557 | ||||
Net realized gains | 11,848,026 | |||||
Net change in unrealized appreciation on affiliated underlying funds | + | 46,183,726 | ||||
Net realized and unrealized gains | 58,031,752 | |||||
Increase in net assets resulting from operations | $65,902,906 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $7,871,154 | $7,973,255 | ||||||||
Net realized gains | 11,848,026 | 9,088,999 | ||||||||
Net change in unrealized appreciation | + | 46,183,726 | 18,512,082 | |||||||
Increase in net assets from operations | 65,902,906 | 35,574,336 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($8,153,238 | ) | ($10,347,778 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,770,528 | $65,235,947 | 3,144,255 | $49,804,826 | ||||||||||||||
Shares reinvested | 467,584 | 7,607,583 | 647,049 | 9,725,147 | ||||||||||||||
Shares redeemed | + | (4,331,142 | ) | (74,715,528 | ) | (5,822,667 | ) | (91,987,712 | ) | |||||||||
Net transactions in fund shares | (93,030 | ) | ($1,871,998 | ) | (2,031,363 | ) | ($32,457,739 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 26,025,317 | $425,102,952 | 28,056,680 | $432,334,133 | ||||||||||||||
Total increase or decrease | + | (93,030 | ) | 55,877,670 | (2,031,363 | ) | (7,231,181 | ) | ||||||||||
End of period | 25,932,287 | $480,980,622 | 26,025,317 | $425,102,952 | ||||||||||||||
Net investment income not yet distributed | $1,125,984 | $1,408,068 |
See financial notes 29
Table of Contents
Schwab MarketTrack Conservative Portfolio™
Financial Statements
Financial Highlights
11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | 11/1/08– | ||||||||||||||||||
10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | 10/31/09 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 14.23 | 13.59 | 13.22 | 12.15 | 11.34 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.26 | 0.26 | 0.25 | 0.24 | 0.37 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.10 | 0.69 | 0.37 | 1.08 | 0.91 | |||||||||||||||||
Total from investment operations | 1.36 | 0.95 | 0.62 | 1.32 | 1.28 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.31 | ) | (0.25 | ) | (0.25 | ) | (0.38 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | (0.09 | ) | ||||||||||||||||
Total distributions | (0.25 | ) | (0.31 | ) | (0.25 | ) | (0.25 | ) | (0.47 | ) | ||||||||||||
Net asset value at end of period | 15.34 | 14.23 | 13.59 | 13.22 | 12.15 | |||||||||||||||||
Total return (%) | 9.71 | 7.07 | 4.72 | 10.98 | 11.72 | |||||||||||||||||
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 | 0.55 | 0.56 | 0.68 | |||||||||||||||||
Net investment income (loss) | 1.78 | 1.96 | 1.84 | 1.93 | 3.31 | |||||||||||||||||
Portfolio turnover rate | 15 | 19 | 30 | 25 | 25 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 203 | 189 | 198 | 194 | 181 |
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, 2013
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 | 148,514,705 | 195,959,240 | ||||||||
3 | .2% | Short-Term Investments | 6,429,739 | 6,429,739 | ||||||||
99 | .9% | Total Investments | 154,944,444 | 202,388,979 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 186,440 | |||||||||
100 | .0% | Total Net Assets | 202,575,419 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.7% of net assets | ||||||||
Equity Funds 40.3% | ||||||||
International 10.2% | ||||||||
Schwab International Index Fund (a) | 1,040,719 | 20,731,130 | ||||||
Large-Cap 20.2% | ||||||||
Schwab S&P 500 Index Fund (a) | 1,470,146 | 40,840,642 | ||||||
Small-Cap 9.9% | ||||||||
Schwab Small-Cap Index Fund (a) | 730,478 | 20,175,790 | ||||||
81,747,562 | ||||||||
Fixed-Income Fund 54.7% | ||||||||
Intermediate-Term Bond 54.7% | ||||||||
Schwab Total Bond Market Fund (a) | 11,804,305 | 110,724,380 | ||||||
Money Market Fund 1.7% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.03% (a)(b) | 3,487,298 | 3,487,298 | ||||||
Total Other Investment Companies | ||||||||
(Cost $148,514,705) | 195,959,240 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.2% of net assets | ||||||||
Time Deposits 3.2% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/13 | 352,215 | 352,215 | ||||||
JPMorgan Chase | ||||||||
0.03%, 11/01/13 | 6,077,524 | 6,077,524 | ||||||
Total Short-Term Investments | ||||||||
(Cost $6,429,739) | 6,429,739 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $162,670,702 and the unrealized appreciation and depreciation were $39,718,277 and ($0), respectively, with a net unrealized appreciation of $39,718,277.
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | The rate shown is the 7-day yield. |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2013 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $195,959,240 | $— | $— | $195,959,240 | ||||||||||||
Short-Term Investments1 | — | 6,429,739 | — | 6,429,739 | ||||||||||||
Total | $195,959,240 | $6,429,739 | $— | $202,388,979 | ||||||||||||
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, 2013.
See financial notes 31
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Assets and Liabilities
As of October 31, 2013
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $148,514,705) | $195,959,240 | |||||
Investments in unaffiliated issuers, at value (cost $6,429,739) | + | 6,429,739 | ||||
Total investments, at value (cost $154,944,444) | 202,388,979 | |||||
Receivables: | ||||||
Investments sold | 1,270,000 | |||||
Fund shares sold | 515,313 | |||||
Dividends | 222,790 | |||||
Interest | 5 | |||||
Prepaid expenses | + | 4,890 | ||||
Total assets | 204,401,977 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 1,672,406 | |||||
Investment adviser and administrator fees | 3,381 | |||||
Shareholder service fees | 4,064 | |||||
Independent trustees’ fees | 3 | |||||
Fund shares redeemed | 119,974 | |||||
Accrued expenses | + | 26,730 | ||||
Total liabilities | 1,826,558 | |||||
Net Assets | ||||||
Total assets | 204,401,977 | |||||
Total liabilities | − | 1,826,558 | ||||
Net assets | $202,575,419 | |||||
Net Assets by Source | ||||||
Capital received from investors | 165,463,428 | |||||
Net investment income not yet distributed | 257,148 | |||||
Net realized capital losses | (10,589,692 | ) | ||||
Net unrealized capital appreciation | 47,444,535 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$202,575,419 | 13,205,371 | $15.34 |
32 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Operations
For the period November 1, 2012 through October 31, 2013
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,488,025 | |||||
Interest | + | 1,931 | ||||
Total investment income | 4,489,956 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 453,897 | |||||
Shareholder service fees | 483,249 | |||||
Professional fees | 37,673 | |||||
Transfer agent fees | 23,892 | |||||
Registration fees | 23,522 | |||||
Portfolio accounting fees | 18,780 | |||||
Shareholder reports | 8,646 | |||||
Independent trustees’ fees | 8,380 | |||||
Custodian fees | 6,660 | |||||
Other expenses | + | 14,691 | ||||
Total expenses | 1,079,390 | |||||
Expense reduction by CSIM and its affiliates | − | 92,658 | ||||
Net expenses | − | 986,732 | ||||
Net investment income | 3,503,224 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 444,177 | |||||
Net realized gains on sales of affiliated underlying funds | 5,139,255 | |||||
Net realized gains on unaffiliated investments | + | 114 | ||||
Net realized gains | 5,583,546 | |||||
Net change in unrealized appreciation on affiliated underlying funds | + | 9,133,787 | ||||
Net realized and unrealized gains | 14,717,333 | |||||
Increase in net assets resulting from operations | $18,220,557 |
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 | ||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||
Net investment income | $3,503,224 | $3,852,050 | ||||||||
Net realized gains | 5,583,546 | 4,027,215 | ||||||||
Net change in unrealized appreciation | + | 9,133,787 | 6,051,777 | |||||||
Increase in net assets from operations | 18,220,557 | 13,931,042 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($3,392,046 | ) | ($4,482,834 | ) |
Transactions in Fund Shares
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,448,680 | $35,840,677 | 3,227,193 | $44,181,272 | ||||||||||||||
Shares reinvested | 218,345 | 3,136,243 | 308,192 | 4,188,027 | ||||||||||||||
Shares redeemed | + | (2,716,814 | ) | (39,911,545 | ) | (4,855,488 | ) | (67,192,496 | ) | |||||||||
Net transactions in fund shares | (49,789 | ) | ($934,625 | ) | (1,320,103 | ) | ($18,823,197 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/12-10/31/13 | 11/1/11-10/31/12 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 13,255,160 | $188,681,533 | 14,575,263 | $198,056,522 | ||||||||||||||
Total increase or decrease | + | (49,789 | ) | 13,893,886 | (1,320,103 | ) | (9,374,989 | ) | ||||||||||
End of period | 13,205,371 | $202,575,419 | 13,255,160 | $188,681,533 | ||||||||||||||
Net investment income not yet distributed | $257,148 | $145,970 |
34 See financial notes
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Schwab MarketTrack Portfolios
Financial Notes
1. Business Structure of the Funds:
Each of the funds 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 Target 2045 Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Target 2050 Fund | |||
Laudus International MarketMasters Fund | Schwab Target 2055 Fund | |||
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 | Schwab Fundamental International Large Company Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Small-Cap Equity Fund | Schwab Fundamental Emerging Markets Large Company 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 All Equity Portfolio, Schwab MarketTrack Balanced Portfolio and Schwab MarketTrack Conservative Portfolio each offer one share class. Prior to December 6, 2012, Schwab MarketTrack Growth Portfolio offered two share classes: Investor Shares and P Shares. Shares of each class represented an interest in the same fund, but each class had different expenses and investment minimums. At a Board of Trustees 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. Shares are bought and sold (subject to a redemption fee, see financial note 8) 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.
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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:
• | Underlying funds: Mutual funds are valued at their respective NAVs. | |
• | Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures. | |
• | Short-term securities (60 days or less to maturity): Short-term securities are 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 inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. Investments in mutual funds are valued daily at their NAVs, which 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. |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 2013 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 and losses from security transactions are based on the identified costs of the securities involved.
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(d) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(e) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year, 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. 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 attributable to these arrangements 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 has evaluated ASU No. 2011-11 and assessed the funds’ financial statement disclosures and determined that adoption of the standard will not have a material effect on the funds’ financial statements.
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Financial Notes (continued)
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
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.
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. Each underlying index 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. | |
• | Large-Cap Risk. Many of the risks of the underlying funds are associated with their investment in the large-cap segments of the stock market. Large-cap stocks tend to go in and out of favor based on market and economic conditions. During a period when large-cap stocks fall behind other types of investments - bonds or mid- or small- cap stocks, for instance - an underlying fund’s large-cap holdings could reduce performance. | |
• | Small-Cap Risk. Historically, small-cap stocks have been riskier than large- and mid-cap stocks, and their prices may move sharply, especially during market upturns and downturns. Small-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments - bonds or large-cap stocks, for instance - an underlying fund’s small-cap holdings could reduce performance. | |
• | Foreign Investment Risk. An underlying fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets. |
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Financial Notes (continued)
3. Risk Factors (continued):
• | Currency Risk. As a result of an underlying fund’s investments in securities denominated in, and/or receiving revenues in foreign currencies, the fund will be subject to currency risk. This is the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency hedged. In either event, the dollar value of an investment in a fund would be adversely affected. | |
• | Derivatives Risk. An underlying fund’s use of 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. | |
• | Exchange-Traded Funds (ETFs) Risk. When a fund invests in an ETF, it will bear a proportionate share of the ETF’s expenses. In addition, lack of liquidity in an ETF can result in its value being more volatile than the underlying portfolio of securities. | |
• | 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 the 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 as well as other mutual funds or ETFs, 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 the funds, CSIM is entitled to receive an annual fee of 0.23% payable monthly based on a percentage of 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). 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). 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 with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (“expense limitation”). 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 | |||||||||||
0.50% | 0.50% | 0.50% | 0.50% |
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, 2013, each Schwab MarketTrack Portfolio’s ownership percentages of other related funds’ shares are:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Underlying Funds | Portfolio | Portfolio | Portfolio | Portfolio | ||||||||||||
Schwab International Index Fund | 8.0% | 6.3% | 3.3% | 0.9% | ||||||||||||
Schwab S&P 500 Index Fund | 1.5% | 1.6% | 0.8% | 0.2% | ||||||||||||
Schwab Small-Cap Index Fund | 6.2% | 5.8% | 3.1% | 0.9% | ||||||||||||
Schwab Total Bond Market Fund | —% | 11.1% | 18.7% | 12.4% | ||||||||||||
Schwab Value Advantage Money Fund | —% | 0.1% | 0.1% | 0.0% | * |
* | Less than 0.05% |
Below is a summary of the funds’ transactions with their affiliated underlying funds during the period ended October 31, 2013.
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 | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab International Index Fund | 8,737,494 | 837,461 | (771,976 | ) | 8,802,979 | $175,355,339 | $615,869 | $4,947,063 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 9,503,472 | 386,560 | (449,396 | ) | 9,440,636 | 262,260,855 | 1,244,594 | 4,662,134 | ||||||||||||||||||||
Schwab Small-Cap Index Fund | 5,551,212 | 316,197 | (591,573 | ) | 5,275,836 | 145,718,588 | 2,602,767 | 5,521,235 | ||||||||||||||||||||
Total | $583,334,782 | $4,463,230 | $15,130,432 | |||||||||||||||||||||||||
Schwab MarketTrack Growth Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab International Index Fund | 7,071,253 | 620,758 | (771,006 | ) | 6,921,005 | $137,866,426 | $1,043,086 | $3,952,607 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 10,227,080 | 415,028 | (805,582 | ) | 9,836,526 | 273,258,689 | 3,000,338 | 4,977,337 | ||||||||||||||||||||
Schwab Small-Cap Index Fund | 5,342,344 | 311,314 | (736,949 | ) | 4,916,709 | 135,799,515 | 4,638,592 | 5,253,467 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 8,652,421 | 2,452,004 | (535,594 | ) | 10,568,831 | 99,135,638 | (40,168 | ) | 2,079,443 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 7,043,778 | 4,006,420 | — | 11,050,198 | 11,050,198 | — | 6,212 | |||||||||||||||||||||
Total | $657,110,466 | $8,641,848 | $16,269,066 | |||||||||||||||||||||||||
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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 | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab International Index Fund | 3,962,723 | 259,436 | (538,966 | ) | 3,683,193 | $73,369,204 | $1,235,366 | $2,224,157 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 5,736,144 | 264,356 | (774,653 | ) | 5,225,847 | 145,174,024 | 4,954,166 | 2,795,787 | ||||||||||||||||||||
Schwab Small-Cap Index Fund | 3,002,467 | 179,094 | (574,077 | ) | 2,607,484 | 72,018,706 | 4,336,783 | 2,947,001 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 15,356,682 | 3,407,298 | (981,382 | ) | 17,782,598 | 166,800,771 | (154,717 | ) | 3,624,084 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 4,528,610 | 3,504,593 | — | 8,033,203 | 8,033,203 | — | 4,472 | |||||||||||||||||||||
Total | $465,395,908 | $10,371,598 | $11,595,501 | |||||||||||||||||||||||||
Schwab MarketTrack Conservative Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/12 | 11/01/12 | ||||||||||||||||||||||
Underlying Funds | 10/31/12 | Purchases | Sales | 10/31/13 | 10/31/13 | to 10/31/13 | to 10/31/13 | |||||||||||||||||||||
Schwab International Index Fund | 1,175,359 | 90,514 | (225,154 | ) | 1,040,719 | $20,731,130 | $598,110 | $678,383 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | �� | 1,694,351 | 161,109 | (385,314 | ) | 1,470,146 | 40,840,642 | 2,859,382 | 851,732 | |||||||||||||||||||
Schwab Small-Cap Index Fund | 882,000 | 82,331 | (233,853 | ) | 730,478 | 20,175,790 | 1,869,442 | 886,927 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 10,701,111 | 2,165,654 | (1,062,460 | ) | 11,804,305 | 110,724,380 | (187,679 | ) | 2,513,217 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1,985,302 | 1,501,996 | — | 3,487,298 | 3,487,298 | — | 1,943 | |||||||||||||||||||||
Total | $195,959,240 | $5,139,255 | $4,932,202 | |||||||||||||||||||||||||
* | Distributions received include distributions from net investment income and capital gains, if any, 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 to be charged on a 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.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust 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. For information regarding the trustees please refer to Trustees and Officers table at the end of this report.
6. 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.
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Financial Notes (continued)
6. Borrowing from Banks (continued):
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.
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2013, 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 | $30,390,432 | $39,265,000 | ||||||
Schwab MarketTrack Growth Portfolio | 54,334,151 | 56,450,000 | ||||||
Schwab MarketTrack Balanced Portfolio | 50,255,426 | 52,378,000 | ||||||
Schwab MarketTrack Conservative Portfolio | 29,171,138 | 29,608,000 |
8. 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 | |||||||
(11/1/12-10/31/13) | (11/1/11-10/31/12) | |||||||
Schwab MarketTrack All Equity Portfolio | $15,578 | $7,838 | ||||||
Schwab MarketTrack Growth Portfolio | 4,885 | 20,976 | ||||||
Schwab MarketTrack Balanced Portfolio | 4,993 | 2,893 | ||||||
Schwab MarketTrack Conservative Portfolio | 4,449 | 4,280 |
9. Federal Income Taxes:
As of October 31, 2013, 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 | $9,726,658 | $— | $1,125,985 | $257,149 | ||||||||||||
Undistributed long-term capital gains | — | — | 3,020,556 | — | ||||||||||||
Unrealized appreciation on investments | 188,632,978 | 258,726,831 | 148,572,905 | 39,718,277 | ||||||||||||
Other unrealized appreciation (depreciation) | 1 | — | — | — | ||||||||||||
Net unrealized appreciation (depreciation) | $188,632,979 | $258,726,831 | $148,572,905 | $39,718,277 | ||||||||||||
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.
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Schwab MarketTrack Portfolios
Financial Notes (continued)
9. Federal Income Taxes (continued):
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2013, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Expiration Date | Portfolio | Portfolio | Portfolio | Portfolio | ||||||||||||
October 31, 2016 | $5,940,496 | $— | $— | $— | ||||||||||||
October 31, 2017 | 31,279,738 | 617,977 | — | 2,863,437 | ||||||||||||
October 31, 2018 | 8,349,147 | 918,434 | — | — | ||||||||||||
Total | $45,569,381 | $1,536,411 | $— | $2,863,437 | ||||||||||||
Qualified late-year losses are certain capital and ordinary losses which occur during the portion of a fund’s taxable year subsequent to October 31. A fund may elect to treat any portion of qualified late-year losses as arising on the first day of the next taxable year. For the year ended October 31, 2013, the funds had late-year ordinary 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 | |||||||||||||
Late-year ordinary losses deferred | $— | $610,915 | $— | $— | ||||||||||||
Capital losses utilized | 6,848,693 | 11,299,113 | 8,159,980 | 5,473,334 |
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 | $12,561,634 | $10,641,577 | $8,153,238 | $3,392,046 | ||||||||||||
Long-term capital gains | — | — | — | — | ||||||||||||
Return of capital | — | — | — | — | ||||||||||||
Prior period distributions | ||||||||||||||||
Ordinary income | $— | $16,365,676 | $10,347,778 | $4,482,834 | ||||||||||||
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, 2013, no such reclassifications were required.
As of October 31, 2013, 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
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Schwab MarketTrack Portfolios
Financial Notes (continued)
9. Federal Income Taxes (continued):
to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2013, the funds did not incur any interest or penalties.
10. 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 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, 2013, 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 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, 2013 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 17, 2013
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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, 2013, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab MarketTrack All Equity Portfolio | 61.85 | ||||
Schwab MarketTrack Growth Portfolio | 61.58 | ||||
Schwab MarketTrack Balanced Portfolio | 42.36 | ||||
Schwab MarketTrack Conservative Portfolio | 30.93 |
For the fiscal year ended October 31, 2013, 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 2014 via IRS form 1099 of the amounts for use in preparing their 2013 income tax return.
Schwab MarketTrack All Equity Portfolio | $12,011,365 | |||
Schwab MarketTrack Growth Portfolio | 9,658,189 | |||
Schwab MarketTrack Balanced Portfolio | 5,232,124 | |||
Schwab MarketTrack Conservative Portfolio | 1,559,377 |
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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 23, 2013, and June 4, 2013, and approved the renewal of the Agreement with respect to the Funds for an additional one-year term at the meeting held on June 4, 2013. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, yield, if applicable, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees
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further considered the level of Fund performance in the context of their review of Fund expenses and adviser profitability discussed below. Although Schwab MarketTrack Balanced Portfolio and Schwab MarketTrack Conservative Portfolio had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Schwab MarketTrack Balanced Portfolio and Schwab MarketTrack Conservative Portfolio, including 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 and that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers 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 99 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the 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 (advisory services firm) (Oct. 2001 – present). | 76 | Director, WageWorks, Inc. (2010 – present) 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. 2000 – present). | 76 | 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). | 76 | Director, TOUSA (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Mission West Properties (1998 – 2012) Director, Ditech Networks Corporation (1997 – 2012) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 76 | 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). | 76 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) | |||
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). | 76 | Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc. (2009 – present) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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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. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present). | 76 | 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. | 76 | 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. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. 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. | 99 | None | |||
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 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). | |
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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
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 (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). | |
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). | |
David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Capital Trust since 2011.) | Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President and Assistant Secretary (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 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the retirement policy requires any independent trustee of 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 own stock of The Charles Schwab Corporation, the parent company of 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
All Equity Composite Index 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 (Net). The index is maintained by CSIM.
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.
Balanced Composite Index 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 (Net), 35% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1 − 3 Months Index. The index is maintained by CSIM.
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 represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
Barclays U.S. Treasury Bills 1 − 3 Months An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value.
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 capital gain or loss is considered unrealized appreciation or depreciation.
Conservative Composite Index 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 (Net), 55% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1 − 3 Months Index. The index is maintained by CSIM.
Dow Jones U.S. Total Stock Market Index An index that measures the performance of all U.S. equity securities with readily available prices.
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.
Growth Composite Index 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 (Net), 15% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1 − 3 Months Index. The index is maintained by CSIM.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
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. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
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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
© 2013 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 Funds’ 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 Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 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 Index 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®.
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/0000950123-14-000021/f30154ctschwab02.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.
© 2013 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR13813-16
00107464
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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.
Registrant’s Board of Trustees has determined that Mariann Byerwalter, William Hasler and Kiran Patel, each currently serving on its audit committee, are each an “audit committee financial expert,” as such term is defined in Item 3 of Form N-CSR. Each member of Registrant’s audit committee is “independent” under the standards set forth in Item 3 of Form N-CSR.
The designation of each of Ms. Byerwalter, Mr. Hasler and Mr. Patel as an “audit committee financial expert” pursuant to Item 3 of Form N-CSR does not (i) impose upon such individual any duties, obligations, or liability that are greater than the duties, obligations and liability imposed upon such individual as a member of Registrant’s audit committee or Board of Trustees in the absence of such designation; and (ii) affect the duties, obligations or liability of any other member of Registrant’s audit committee or Board of Trustees.
Item 4: Principal Accountant Fees and Services.
Registrant is composed of thirty-seven series. Thirty-four 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-seven series, based on their respective 2013 and 2012 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.
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Audit Fees
2013: $1,256,737 2012: $1,236,570
(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:
2013: $82,933 2012: $85,159
Nature of these services: tax provision review and procedures performed related to Registrant’s service provider conversion.
In each of the last two fiscal years there were no “Audit-Related Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(c) Below are the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.
Tax Fees
For services rendered to Registrant:
2013: $90,938 2012: $93,457
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:
2013: $12,171 2012: $17,500
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Nature of these services: | review of the methodology of allocation of Charles Schwab & Co., Inc. (“Schwab”) expenses for purposes of Section 15(c) of the Investment Company Act of 1940. |
In each of the last two fiscal years there were no “All Other Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(e) | (1) | Registrant’s audit committee does not have pre-approval policies and procedures as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. | |
(2) | There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by Registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
(f) Not applicable.
(g) Below are the aggregate non-audit fees billed in each of the last two fiscal years by Registrant’s principal accountant for services rendered to Registrant, to Registrant’s investment adviser, and to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant.
2013: $186,042 2012: $196,116
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.
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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 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 are filed under this Item.
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Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2013
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 | ($) | ($) | ||||||||||
97 | .2% | Common Stock | 10,242,641,102 | 16,648,423,804 | ||||||||
2 | .6% | Short-Term Investments | 437,649,083 | 437,649,083 | ||||||||
99 | .8% | Total Investments | 10,680,290,185 | 17,086,072,887 | ||||||||
0 | .1% | Collateral Invested for Securities on Loan | 20,143,201 | 20,143,201 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 14,822,536 | |||||||||
100 | .0% | Net Assets | 17,121,038,624 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.2% of net assets | ||||||||
Automobiles & Components 1.1% | ||||||||
BorgWarner, Inc. | 120,700 | 12,447,791 | ||||||
Delphi Automotive plc | 313,200 | 17,915,040 | ||||||
Ford Motor Co. | 4,198,397 | 71,834,573 | ||||||
General Motors Co. * | 1,003,000 | 37,060,850 | ||||||
Harley-Davidson, Inc. | 231,470 | 14,823,339 | ||||||
Johnson Controls, Inc. | 733,559 | 33,853,748 | ||||||
The Goodyear Tire & Rubber Co. | 247,536 | 5,193,305 | ||||||
193,128,646 | ||||||||
Banks 2.8% | ||||||||
BB&T Corp. | 763,726 | 25,943,772 | ||||||
Comerica, Inc. | 188,270 | 8,152,091 | ||||||
Fifth Third Bancorp | 991,829 | 18,874,506 | ||||||
Hudson City Bancorp, Inc. | 481,992 | 4,328,288 | ||||||
Huntington Bancshares, Inc. | 821,893 | 7,232,659 | ||||||
KeyCorp | 941,198 | 11,793,211 | ||||||
M&T Bank Corp. | 138,598 | 15,596,433 | ||||||
People’s United Financial, Inc. | 343,300 | 4,953,819 | ||||||
Regions Financial Corp. | 1,567,445 | 15,094,496 | ||||||
SunTrust Banks, Inc. | 560,816 | 18,865,850 | ||||||
The PNC Financial Services Group, Inc. | 571,278 | 42,006,071 | ||||||
U.S. Bancorp | 1,943,628 | 72,613,942 | ||||||
Wells Fargo & Co. | 5,149,209 | 219,819,732 | ||||||
Zions Bancorp | 178,698 | 5,069,662 | ||||||
470,344,532 | ||||||||
Capital Goods 7.9% | ||||||||
3M Co. | 691,919 | 87,078,006 | ||||||
AMETEK, Inc. | 260,300 | 12,450,149 | ||||||
Caterpillar, Inc. | 693,162 | 57,781,984 | ||||||
Cummins, Inc. | 182,562 | 23,189,025 | ||||||
Danaher Corp. | 637,474 | 45,955,501 | ||||||
Deere & Co. | 411,386 | 33,667,830 | ||||||
Dover Corp. | 174,270 | 15,996,243 | ||||||
Eaton Corp. plc | 501,538 | 35,388,521 | ||||||
Emerson Electric Co. | 755,015 | 50,563,355 | ||||||
Fastenal Co. | 283,398 | 14,113,220 | ||||||
Flowserve Corp. | 150,300 | 10,441,341 | ||||||
Fluor Corp. | 191,882 | 14,241,482 | ||||||
General Dynamics Corp. | 363,360 | 31,477,877 | ||||||
General Electric Co. | 10,901,752 | 284,971,797 | ||||||
Honeywell International, Inc. | 829,529 | 71,945,050 | ||||||
Illinois Tool Works, Inc. | 436,936 | 34,426,188 | ||||||
Ingersoll-Rand plc | 290,800 | 19,637,724 | ||||||
Jacobs Engineering Group, Inc. * | 137,934 | 8,389,146 | ||||||
Joy Global, Inc. | 113,200 | 6,424,100 | ||||||
L-3 Communications Holdings, Inc. | 105,783 | 10,625,902 | ||||||
Lockheed Martin Corp. | 289,391 | 38,587,396 | ||||||
Masco Corp. | 347,388 | 7,340,309 | ||||||
Northrop Grumman Corp. | 242,467 | 26,067,627 | ||||||
PACCAR, Inc. | 379,550 | 21,102,980 | ||||||
Pall Corp. | 126,730 | 10,204,300 | ||||||
Parker Hannifin Corp. | 155,336 | 18,130,818 | ||||||
Pentair Ltd. | 208,982 | 14,020,602 | ||||||
Precision Castparts Corp. | 153,027 | 38,784,693 | ||||||
Quanta Services, Inc. * | 231,900 | 7,005,699 | ||||||
Raytheon Co. | 338,488 | 27,881,257 | ||||||
Rockwell Automation, Inc. | 142,421 | 15,724,703 | ||||||
Rockwell Collins, Inc. | 147,405 | 10,293,291 | ||||||
Roper Industries, Inc. | 102,800 | 13,036,068 | ||||||
Snap-on, Inc. | 58,282 | 6,065,408 | ||||||
Stanley Black & Decker, Inc. | 166,181 | 13,143,255 | ||||||
Textron, Inc. | 292,004 | 8,406,795 | ||||||
The Boeing Co. | 739,654 | 96,524,847 | ||||||
United Technologies Corp. | 899,535 | 95,575,594 | ||||||
W.W. Grainger, Inc. | 65,927 | 17,732,385 | ||||||
Xylem, Inc. | 173,800 | 5,996,100 | ||||||
1,360,388,568 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Cintas Corp. | 111,376 | 5,988,688 | ||||||
Equifax, Inc. | 136,561 | 8,831,400 | ||||||
Iron Mountain, Inc. | 220,560 | 5,853,662 | ||||||
Nielsen Holdings N.V. | 217,500 | 8,578,200 | ||||||
Pitney Bowes, Inc. | 196,591 | 4,195,252 | ||||||
Republic Services, Inc. | 289,334 | 9,684,009 | ||||||
Robert Half International, Inc. | 139,442 | 5,372,700 | ||||||
Stericycle, Inc. * | 89,400 | 10,388,280 | ||||||
The ADT Corp. | 227,100 | 9,849,327 | ||||||
The Dun & Bradstreet Corp. | 46,500 | 5,058,735 | ||||||
Tyco International Ltd. | 480,900 | 17,576,895 | ||||||
Waste Management, Inc. | 454,916 | 19,807,043 | ||||||
111,184,191 |
See financial notes 1
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Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Consumer Durables & Apparel 1.2% | ||||||||
Coach, Inc. | 299,728 | 15,190,215 | ||||||
D.R. Horton, Inc. | 285,216 | 5,404,843 | ||||||
Fossil Group, Inc. * | 54,900 | 6,969,006 | ||||||
Garmin Ltd. (b) | 131,100 | 6,128,925 | ||||||
Harman International Industries, Inc. | 86,656 | 7,020,869 | ||||||
Hasbro, Inc. | 121,717 | 6,286,683 | ||||||
Leggett & Platt, Inc. | 157,894 | 4,695,768 | ||||||
Lennar Corp., Class A | 171,818 | 6,108,130 | ||||||
Mattel, Inc. | 357,094 | 15,844,261 | ||||||
Newell Rubbermaid, Inc. | 327,150 | 9,693,454 | ||||||
NIKE, Inc., Class B | 797,024 | 60,382,538 | ||||||
PulteGroup, Inc. | 370,186 | 6,533,783 | ||||||
PVH Corp. | 84,100 | 10,476,337 | ||||||
Ralph Lauren Corp. | 62,826 | 10,406,499 | ||||||
VF Corp. | 90,291 | 19,412,565 | ||||||
Whirlpool Corp. | 83,322 | 12,165,845 | ||||||
202,719,721 | ||||||||
Consumer Services 1.8% | ||||||||
Carnival Corp. | 456,921 | 15,832,313 | ||||||
Chipotle Mexican Grill, Inc. * | 33,959 | 17,895,374 | ||||||
Darden Restaurants, Inc. | 128,248 | 6,608,619 | ||||||
H&R Block, Inc. | 286,205 | 8,139,670 | ||||||
International Game Technology | 280,660 | 5,276,408 | ||||||
Marriott International, Inc., Class A | 254,872 | 11,489,630 | ||||||
McDonald’s Corp. | 1,073,638 | 103,627,540 | ||||||
Starbucks Corp. | 800,762 | 64,901,760 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 203,468 | 14,979,314 | ||||||
Wyndham Worldwide Corp. | 148,464 | 9,858,009 | ||||||
Wynn Resorts Ltd. | 83,200 | 13,832,000 | ||||||
Yum! Brands, Inc. | 470,485 | 31,814,196 | ||||||
304,254,833 | ||||||||
Diversified Financials 8.0% | ||||||||
American Express Co. | 999,741 | 81,778,814 | ||||||
Ameriprise Financial, Inc. | 215,714 | 21,687,886 | ||||||
Bank of America Corp. | 11,448,611 | 159,822,610 | ||||||
Berkshire Hathaway, Inc., Class B * | 1,923,330 | 221,336,816 | ||||||
BlackRock, Inc. | 134,200 | 40,368,702 | ||||||
Capital One Financial Corp. | 623,774 | 42,834,561 | ||||||
Citigroup, Inc. | 3,240,747 | 158,083,639 | ||||||
CME Group, Inc. | 323,885 | 24,035,506 | ||||||
Discover Financial Services | 524,873 | 27,230,411 | ||||||
E*TRADE Financial Corp. * | 262,019 | 4,430,741 | ||||||
Franklin Resources, Inc. | 433,605 | 23,353,965 | ||||||
IntercontinentalExchange, Inc. * | 76,158 | 14,677,931 | ||||||
Invesco Ltd. | 461,447 | 15,573,836 | ||||||
JPMorgan Chase & Co. | 4,011,331 | 206,744,000 | ||||||
Legg Mason, Inc. | 97,098 | 3,735,360 | ||||||
Leucadia National Corp. | 333,951 | 9,464,171 | ||||||
Moody’s Corp. | 211,829 | 14,967,837 | ||||||
Morgan Stanley | 1,481,854 | 42,573,665 | ||||||
Northern Trust Corp. | 240,518 | 13,570,026 | ||||||
NYSE Euronext | 245,500 | 10,806,910 | ||||||
SLM Corp. | 494,418 | 12,543,385 | ||||||
State Street Corp. | 477,026 | 33,425,212 | ||||||
T. Rowe Price Group, Inc. | 277,179 | 21,456,426 | ||||||
The Bank of New York Mellon Corp. | 1,223,673 | 38,912,801 | ||||||
The Charles Schwab Corp. (a) | 1,232,381 | 27,913,430 | ||||||
The Goldman Sachs Group, Inc. | 444,669 | 71,529,455 | ||||||
The McGraw Hill Financial, Inc. | 297,567 | 20,734,469 | ||||||
The NASDAQ OMX Group, Inc. | 119,900 | 4,248,057 | ||||||
1,367,840,622 | ||||||||
Energy 10.2% | ||||||||
Anadarko Petroleum Corp. | 535,709 | 51,047,711 | ||||||
Apache Corp. | 430,306 | 38,211,173 | ||||||
Baker Hughes, Inc. | 496,363 | 28,833,727 | ||||||
Cabot Oil & Gas Corp. | 434,200 | 15,335,944 | ||||||
Cameron International Corp. * | 256,300 | 14,060,618 | ||||||
Chesapeake Energy Corp. | 577,766 | 16,154,337 | ||||||
Chevron Corp. | 2,058,934 | 246,989,723 | ||||||
ConocoPhillips | 1,299,390 | 95,245,287 | ||||||
CONSOL Energy, Inc. | 240,418 | 8,775,257 | ||||||
Denbury Resources, Inc. * | 377,200 | 7,163,028 | ||||||
Devon Energy Corp. | 417,758 | 26,410,661 | ||||||
Diamond Offshore Drilling, Inc. | 65,300 | 4,044,029 | ||||||
Ensco plc, Class A | 238,200 | 13,732,230 | ||||||
EOG Resources, Inc. | 295,106 | 52,646,910 | ||||||
EQT Corp. | 154,600 | 13,235,306 | ||||||
Exxon Mobil Corp. | 4,687,841 | 420,124,310 | ||||||
FMC Technologies, Inc. * | 246,300 | 12,450,465 | ||||||
Halliburton Co. | 915,468 | 48,547,268 | ||||||
Helmerich & Payne, Inc. | 118,300 | 9,174,165 | ||||||
Hess Corp. | 314,040 | 25,500,048 | ||||||
Kinder Morgan, Inc. | 702,744 | 24,813,891 | ||||||
Marathon Oil Corp. | 741,452 | 26,143,598 | ||||||
Marathon Petroleum Corp. | 335,326 | 24,029,461 | ||||||
Murphy Oil Corp. | 184,892 | 11,152,685 | ||||||
Nabors Industries Ltd. | 287,890 | 5,032,317 | ||||||
National Oilwell Varco, Inc. | 450,124 | 36,541,066 | ||||||
Newfield Exploration Co. * | 145,600 | 4,433,520 | ||||||
Noble Corp. | 258,800 | 9,756,760 | ||||||
Noble Energy, Inc. | 398,368 | 29,849,714 | ||||||
Occidental Petroleum Corp. | 858,650 | 82,499,092 | ||||||
Peabody Energy Corp. | 261,564 | 5,095,267 | ||||||
Phillips 66 | 655,595 | 42,239,986 | ||||||
Pioneer Natural Resources Co. | 147,600 | 30,225,528 | ||||||
QEP Resources, Inc. | 186,091 | 6,152,168 | ||||||
Range Resources Corp. | 178,200 | 13,491,522 | ||||||
Rowan Cos. plc, Class A * | 126,263 | 4,555,569 | ||||||
Schlumberger Ltd. | 1,420,015 | 133,083,806 | ||||||
Southwestern Energy Co. * | 366,500 | 13,641,130 | ||||||
Spectra Energy Corp. | 715,309 | 25,443,541 | ||||||
Tesoro Corp. | 138,207 | 6,756,940 | ||||||
The Williams Cos., Inc. | 751,198 | 26,825,281 | ||||||
Transocean Ltd. | 360,000 | 16,945,200 | ||||||
Valero Energy Corp. | 568,940 | 23,423,260 | ||||||
WPX Energy, Inc. * | 182,099 | 4,031,672 | ||||||
1,753,845,171 | ||||||||
Food & Staples Retailing 2.4% | ||||||||
Costco Wholesale Corp. | 460,392 | 54,326,256 |
2 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
CVS Caremark Corp. | 1,309,051 | 81,501,515 | ||||||
Safeway, Inc. | 266,496 | 9,300,710 | ||||||
Sysco Corp. | 615,857 | 19,916,815 | ||||||
The Kroger Co. | 576,447 | 24,694,990 | ||||||
Wal-Mart Stores, Inc. | 1,727,302 | 132,570,429 | ||||||
Walgreen Co. | 924,811 | 54,785,804 | ||||||
Whole Foods Market, Inc. | 396,932 | 25,058,317 | ||||||
402,154,836 | ||||||||
Food, Beverage & Tobacco 5.3% | ||||||||
Altria Group, Inc. | 2,117,791 | 78,845,359 | ||||||
Archer-Daniels-Midland Co. | 683,899 | 27,971,469 | ||||||
Beam, Inc. | 185,579 | 12,489,467 | ||||||
Brown-Forman Corp., Class B | 168,992 | 12,333,036 | ||||||
Campbell Soup Co. | 188,711 | 8,033,427 | ||||||
Coca-Cola Enterprises, Inc. | 295,862 | 12,346,321 | ||||||
ConAgra Foods, Inc. | 476,949 | 15,171,748 | ||||||
Constellation Brands, Inc., Class A * | 175,065 | 11,431,744 | ||||||
Dr Pepper Snapple Group, Inc. | 203,200 | 9,621,520 | ||||||
General Mills, Inc. | 674,280 | 33,997,198 | ||||||
Hormel Foods Corp. | 144,300 | 6,271,278 | ||||||
Kellogg Co. | 268,934 | 17,010,075 | ||||||
Kraft Foods Group, Inc. | 634,718 | 34,515,965 | ||||||
Lorillard, Inc. | 389,091 | 19,847,532 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 132,602 | 9,169,428 | ||||||
Mead Johnson Nutrition Co. | 223,200 | 18,226,512 | ||||||
Molson Coors Brewing Co., Class B | 164,430 | 8,879,220 | ||||||
Mondelez International, Inc., Class A | 1,881,354 | 63,288,749 | ||||||
Monster Beverage Corp. * | 148,900 | 8,521,547 | ||||||
PepsiCo, Inc. | 1,643,463 | 138,198,804 | ||||||
Philip Morris International, Inc. | 1,724,346 | 153,673,715 | ||||||
Reynolds American, Inc. | 327,596 | 16,828,607 | ||||||
The Coca-Cola Co. | 4,062,856 | 160,767,212 | ||||||
The Hershey Co. | 155,128 | 15,394,903 | ||||||
The JM Smucker Co. | 124,275 | 13,820,623 | ||||||
Tyson Foods, Inc., Class A | 304,290 | 8,419,704 | ||||||
915,075,163 | ||||||||
Health Care Equipment & Services 4.1% | ||||||||
Abbott Laboratories | 1,669,286 | 61,012,403 | ||||||
Aetna, Inc. | 401,775 | 25,191,293 | ||||||
AmerisourceBergen Corp. | 247,246 | 16,152,581 | ||||||
Baxter International, Inc. | 572,589 | 37,716,437 | ||||||
Becton, Dickinson & Co. | 202,390 | 21,277,261 | ||||||
Boston Scientific Corp. * | 1,434,274 | 16,766,663 | ||||||
C.R. Bard, Inc. | 84,373 | 11,493,290 | ||||||
Cardinal Health, Inc. | 348,833 | 20,462,544 | ||||||
CareFusion Corp. * | 231,766 | 8,985,568 | ||||||
Cerner Corp. * | 337,400 | 18,904,522 | ||||||
Cigna Corp. | 293,308 | 22,578,850 | ||||||
Covidien plc | 497,200 | 31,875,492 | ||||||
DaVita HealthCare Partners, Inc. * | 203,500 | 11,438,735 | ||||||
DENTSPLY International, Inc. | 149,900 | 7,060,290 | ||||||
Edwards Lifesciences Corp. * | 115,800 | 7,549,002 | ||||||
Express Scripts Holding Co. * | 860,695 | 53,810,651 | ||||||
Humana, Inc. | 175,903 | 16,209,461 | ||||||
Intuitive Surgical, Inc. * | 41,131 | 15,280,167 | ||||||
Laboratory Corp. of America Holdings * | 97,291 | 9,816,662 | ||||||
McKesson Corp. | 243,675 | 38,096,149 | ||||||
Medtronic, Inc. | 1,066,339 | 61,207,859 | ||||||
Patterson Cos., Inc. | 83,947 | 3,568,587 | ||||||
Quest Diagnostics, Inc. | 156,880 | 9,398,681 | ||||||
St. Jude Medical, Inc. | 301,387 | 17,296,600 | ||||||
Stryker Corp. | 314,340 | 23,217,152 | ||||||
Tenet Healthcare Corp. * | 112,904 | 5,327,940 | ||||||
UnitedHealth Group, Inc. | 1,086,310 | 74,151,521 | ||||||
Varian Medical Systems, Inc. * | 110,706 | 8,035,041 | ||||||
WellPoint, Inc. | 313,629 | 26,595,739 | ||||||
Zimmer Holdings, Inc. | 177,223 | 15,501,696 | ||||||
695,978,837 | ||||||||
Household & Personal Products 2.2% | ||||||||
Avon Products, Inc. | 481,920 | 8,433,600 | ||||||
Colgate-Palmolive Co. | 939,194 | 60,794,028 | ||||||
Kimberly-Clark Corp. | 401,195 | 43,329,060 | ||||||
The Clorox Co. | 145,057 | 13,082,691 | ||||||
The Estee Lauder Cos., Inc., Class A | 272,452 | 19,333,194 | ||||||
The Procter & Gamble Co. | 2,918,590 | 235,676,142 | ||||||
380,648,715 | ||||||||
Insurance 2.9% | ||||||||
ACE Ltd. | 362,500 | 34,597,000 | ||||||
Aflac, Inc. | 491,573 | 31,942,414 | ||||||
American International Group, Inc. | 1,566,554 | 80,912,514 | ||||||
Aon plc | 323,350 | 25,573,751 | ||||||
Assurant, Inc. | 89,346 | 5,224,954 | ||||||
Cincinnati Financial Corp. | 155,203 | 7,760,150 | ||||||
Genworth Financial, Inc., Class A * | 496,064 | 7,207,810 | ||||||
Hartford Financial Services Group, Inc. | 473,095 | 15,943,302 | ||||||
Lincoln National Corp. | 294,671 | 13,381,010 | ||||||
Loews Corp. | 324,016 | 15,653,213 | ||||||
Marsh & McLennan Cos., Inc. | 579,479 | 26,540,138 | ||||||
MetLife, Inc. | 1,193,377 | 56,458,666 | ||||||
Principal Financial Group, Inc. | 288,467 | 13,690,644 | ||||||
Prudential Financial, Inc. | 507,831 | 41,332,365 | ||||||
The Allstate Corp. | 501,310 | 26,599,509 | ||||||
The Chubb Corp. | 267,893 | 24,667,587 | ||||||
The Progressive Corp. | 600,020 | 15,582,519 | ||||||
The Travelers Cos., Inc. | 396,860 | 34,249,018 | ||||||
Torchmark Corp. | 95,511 | 6,958,931 | ||||||
Unum Group | 276,440 | 8,774,206 | ||||||
XL Group plc | 312,199 | 9,543,923 | ||||||
502,593,624 | ||||||||
Materials 3.4% | ||||||||
Air Products & Chemicals, Inc. | 223,401 | 24,352,943 | ||||||
Airgas, Inc. | 75,000 | 8,180,250 | ||||||
Alcoa, Inc. | 1,245,564 | 11,546,378 | ||||||
Allegheny Technologies, Inc. | 101,170 | 3,348,727 |
See financial notes 3
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Avery Dennison Corp. | 103,076 | 4,856,941 | ||||||
Ball Corp. | 152,738 | 7,467,361 | ||||||
Bemis Co., Inc. | 116,535 | 4,649,747 | ||||||
CF Industries Holdings, Inc. | 66,225 | 14,278,110 | ||||||
Cliffs Natural Resources, Inc. (b) | 136,800 | 3,513,024 | ||||||
E.I. du Pont de Nemours & Co. | 984,104 | 60,227,165 | ||||||
Eastman Chemical Co. | 172,716 | 13,608,294 | ||||||
Ecolab, Inc. | 286,628 | 30,382,568 | ||||||
FMC Corp. | 136,000 | 9,895,360 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 1,094,640 | 40,238,966 | ||||||
International Flavors & Fragrances, Inc. | 80,543 | 6,656,879 | ||||||
International Paper Co. | 493,989 | 22,036,849 | ||||||
LyondellBasell Industries N.V., Class A | 477,500 | 35,621,500 | ||||||
MeadWestvaco Corp. | 181,650 | 6,330,503 | ||||||
Monsanto Co. | 562,800 | 59,026,464 | ||||||
Newmont Mining Corp. | 512,646 | 13,974,730 | ||||||
Nucor Corp. | 331,100 | 17,141,047 | ||||||
Owens-Illinois, Inc. * | 157,500 | 5,006,925 | ||||||
PPG Industries, Inc. | 152,248 | 27,797,440 | ||||||
Praxair, Inc. | 313,679 | 39,118,908 | ||||||
Sealed Air Corp. | 236,068 | 7,124,532 | ||||||
Sigma-Aldrich Corp. | 127,254 | 10,998,563 | ||||||
The Dow Chemical Co. | 1,275,335 | 50,337,472 | ||||||
The Mosaic Co. | 363,000 | 16,643,550 | ||||||
The Sherwin-Williams Co. | 97,636 | 18,355,568 | ||||||
United States Steel Corp. (b) | 134,613 | 3,350,518 | ||||||
Vulcan Materials Co. | 151,071 | 8,089,852 | ||||||
584,157,134 | ||||||||
Media 3.6% | ||||||||
Cablevision Systems Corp., Class A | 220,000 | 3,421,000 | ||||||
CBS Corp., Class B - Non Voting Shares | 624,136 | 36,911,403 | ||||||
Comcast Corp., Class A | 2,776,464 | 132,104,157 | ||||||
DIRECTV * | 544,102 | 34,000,934 | ||||||
Discovery Communications, Inc., Class A * | 250,100 | 22,238,892 | ||||||
Gannett Co., Inc. | 237,514 | 6,572,012 | ||||||
News Corp., Class A * | 516,400 | 9,088,640 | ||||||
Omnicom Group, Inc. | 267,347 | 18,209,004 | ||||||
Scripps Networks Interactive, Class A | 116,593 | 9,385,737 | ||||||
The Interpublic Group of Cos., Inc. | 454,565 | 7,636,692 | ||||||
The Walt Disney Co. | 1,770,483 | 121,437,429 | ||||||
The Washington Post Co., Class B | 5,369 | 3,453,985 | ||||||
Time Warner Cable, Inc. | 306,801 | 36,862,140 | ||||||
Time Warner, Inc. | 972,574 | 66,854,737 | ||||||
Twenty-First Century Fox, Inc. | 2,122,901 | 72,348,466 | ||||||
Viacom Inc., Class B | 467,853 | 38,967,477 | ||||||
619,492,705 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.6% | ||||||||
AbbVie, Inc. | 1,689,586 | 81,860,442 | ||||||
Actavis plc * | 184,446 | 28,511,663 | ||||||
Agilent Technologies, Inc. | 376,466 | 19,109,414 | ||||||
Alexion Pharmaceuticals, Inc. * | 204,100 | 25,094,095 | ||||||
Allergan, Inc. | 314,658 | 28,511,161 | ||||||
Amgen, Inc. | 797,759 | 92,540,044 | ||||||
Biogen Idec, Inc. * | 256,891 | 62,730,213 | ||||||
Bristol-Myers Squibb Co. | 1,754,464 | 92,144,449 | ||||||
Celgene Corp. * | 436,313 | 64,788,117 | ||||||
Eli Lilly & Co. | 1,056,523 | 52,635,976 | ||||||
Forest Laboratories, Inc. * | 270,564 | 12,724,625 | ||||||
Gilead Sciences, Inc. * | 1,631,150 | 115,795,339 | ||||||
Hospira, Inc. * | 178,482 | 7,232,091 | ||||||
Johnson & Johnson | 3,003,125 | 278,119,406 | ||||||
Life Technologies Corp. * | 195,235 | 14,703,148 | ||||||
Merck & Co., Inc. | 3,118,514 | 140,613,796 | ||||||
Mylan, Inc. * | 404,751 | 15,327,920 | ||||||
PerkinElmer, Inc. | 105,660 | 4,019,306 | ||||||
Perrigo Co. | 95,800 | 13,209,862 | ||||||
Pfizer, Inc. | 7,035,733 | 215,856,289 | ||||||
Regeneron Pharmaceuticals, Inc. * | 83,100 | 23,899,560 | ||||||
Thermo Fisher Scientific, Inc. | 377,137 | 36,876,456 | ||||||
Vertex Pharmaceuticals, Inc. * | 248,100 | 17,699,454 | ||||||
Waters Corp. * | 92,152 | 9,299,980 | ||||||
Zoetis, Inc. | 518,900 | 16,428,374 | ||||||
1,469,731,180 | ||||||||
Real Estate 1.9% | ||||||||
American Tower Corp. | 419,700 | 33,303,195 | ||||||
Apartment Investment & Management Co., Class A | 149,714 | 4,188,998 | ||||||
AvalonBay Communities, Inc. | 126,199 | 15,781,185 | ||||||
Boston Properties, Inc. | 157,076 | 16,257,366 | ||||||
CBRE Group, Inc., Class A * | 307,440 | 7,141,831 | ||||||
Equity Residential | 373,922 | 19,578,556 | ||||||
HCP, Inc. | 476,200 | 19,762,300 | ||||||
Health Care REIT, Inc. | 307,900 | 19,967,315 | ||||||
Host Hotels & Resorts, Inc. | 763,011 | 14,153,854 | ||||||
Kimco Realty Corp. | 421,159 | 9,046,495 | ||||||
Plum Creek Timber Co., Inc. | 203,177 | 9,224,236 | ||||||
Prologis, Inc. | 536,789 | 21,444,721 | ||||||
Public Storage | 158,978 | 26,544,557 | ||||||
Simon Property Group, Inc. | 330,753 | 51,117,876 | ||||||
The Macerich Co. | 140,000 | 8,289,400 | ||||||
Ventas, Inc. | 311,500 | 20,322,260 | ||||||
Vornado Realty Trust REIT | 178,456 | 15,893,291 | ||||||
Weyerhaeuser Co. | 603,140 | 18,335,456 | ||||||
330,352,892 | ||||||||
Retailing 4.5% | ||||||||
Abercrombie & Fitch Co., Class A | 78,745 | 2,951,363 | ||||||
Amazon.com, Inc. * | 394,380 | 143,566,151 | ||||||
AutoNation, Inc. * | 68,533 | 3,305,347 | ||||||
AutoZone, Inc. * | 40,898 | 17,777,952 | ||||||
Bed Bath & Beyond, Inc. * | 226,869 | 17,541,511 | ||||||
Best Buy Co., Inc. | 296,557 | 12,692,640 | ||||||
CarMax, Inc. * | 225,700 | 10,605,643 | ||||||
Dollar General Corp. * | 310,400 | 17,934,912 | ||||||
Dollar Tree, Inc. * | 230,600 | 13,467,040 |
4 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Expedia, Inc. | 114,513 | 6,742,525 | ||||||
Family Dollar Stores, Inc. | 98,830 | 6,807,410 | ||||||
GameStop Corp., Class A | 146,800 | 8,047,576 | ||||||
Genuine Parts Co. | 158,838 | 12,521,200 | ||||||
J.C. Penney Co., Inc. (b)* | 323,021 | 2,422,658 | ||||||
Kohl’s Corp. | 213,210 | 12,110,328 | ||||||
L Brands, Inc. | 249,635 | 15,629,647 | ||||||
Lowe’s Cos., Inc. | 1,129,788 | 56,240,847 | ||||||
Macy’s, Inc. | 399,926 | 18,440,588 | ||||||
Netflix, Inc. * | 62,800 | 20,251,744 | ||||||
Nordstrom, Inc. | 151,296 | 9,148,869 | ||||||
O’Reilly Automotive, Inc. * | 116,800 | 14,461,008 | ||||||
PetSmart, Inc. | 106,900 | 7,778,044 | ||||||
Priceline.com, Inc. * | 54,883 | 57,837,352 | ||||||
Ross Stores, Inc. | 227,200 | 17,573,920 | ||||||
Staples, Inc. | 715,869 | 11,539,808 | ||||||
Target Corp. | 682,208 | 44,200,256 | ||||||
The Gap, Inc. | 294,662 | 10,899,547 | ||||||
The Home Depot, Inc. | 1,540,150 | 119,962,283 | ||||||
The TJX Cos., Inc. | 765,406 | 46,529,031 | ||||||
Tiffany & Co. | 125,428 | 9,930,135 | ||||||
TripAdvisor, Inc. * | 114,313 | 9,454,828 | ||||||
Urban Outfitters, Inc. * | 111,100 | 4,208,468 | ||||||
762,580,631 | ||||||||
Semiconductors & Semiconductor Equipment 2.0% | ||||||||
Altera Corp. | 329,046 | 11,055,946 | ||||||
Analog Devices, Inc. | 348,154 | 17,163,992 | ||||||
Applied Materials, Inc. | 1,262,472 | 22,535,125 | ||||||
Broadcom Corp., Class A | 586,218 | 15,663,745 | ||||||
First Solar, Inc. * | 77,300 | 3,885,871 | ||||||
Intel Corp. | 5,309,105 | 129,701,435 | ||||||
KLA-Tencor Corp. | 185,081 | 12,141,314 | ||||||
Lam Research Corp. * | 181,374 | 9,835,912 | ||||||
Linear Technology Corp. | 255,168 | 10,497,612 | ||||||
LSI Corp. | 573,376 | 4,862,228 | ||||||
Microchip Technology, Inc. | 208,823 | 8,971,036 | ||||||
Micron Technology, Inc. * | 1,155,675 | 20,432,334 | ||||||
NVIDIA Corp. | 601,582 | 9,132,015 | ||||||
Teradyne, Inc. * | 168,449 | 2,946,173 | ||||||
Texas Instruments, Inc. | 1,171,354 | 49,290,576 | ||||||
Xilinx, Inc. | 269,163 | 12,225,383 | ||||||
340,340,697 | ||||||||
Software & Services 9.1% | ||||||||
Accenture plc, Class A | 685,400 | 50,376,900 | ||||||
Adobe Systems, Inc. * | 497,776 | 26,979,459 | ||||||
Akamai Technologies, Inc. * | 185,841 | 8,314,526 | ||||||
Autodesk, Inc. * | 251,781 | 10,048,580 | ||||||
Automatic Data Processing, Inc. | 511,573 | 38,352,628 | ||||||
CA, Inc. | 370,925 | 11,780,578 | ||||||
Citrix Systems, Inc. * | 195,708 | 11,112,300 | ||||||
Cognizant Technology Solutions Corp., Class A * | 316,748 | 27,534,904 | ||||||
Computer Sciences Corp. | 162,140 | 7,987,016 | ||||||
eBay, Inc. * | 1,231,469 | 64,910,731 | ||||||
Electronic Arts, Inc. * | 305,892 | 8,029,665 | ||||||
Fidelity National Information Services, Inc. | 299,034 | 14,577,907 | ||||||
Fiserv, Inc. * | 140,352 | 14,699,065 | ||||||
Google, Inc., Class A * | 298,107 | 307,223,112 | ||||||
International Business Machines Corp. | 1,098,890 | 196,932,077 | ||||||
Intuit, Inc. | 316,409 | 22,594,767 | ||||||
MasterCard, Inc., Class A | 110,549 | 79,274,688 | ||||||
Microsoft Corp. | 8,078,031 | 285,558,396 | ||||||
Oracle Corp. | 3,799,886 | 127,296,181 | ||||||
Paychex, Inc. | 331,565 | 14,011,937 | ||||||
Red Hat, Inc. * | 194,100 | 8,398,707 | ||||||
Salesforce.com, Inc. * | 584,326 | 31,179,635 | ||||||
Symantec Corp. | 753,650 | 17,138,001 | ||||||
Teradata Corp. * | 161,371 | 7,111,620 | ||||||
The Western Union Co. | 630,625 | 10,733,238 | ||||||
Total System Services, Inc. | 177,100 | 5,282,893 | ||||||
Verisign, Inc. * | 149,825 | 8,132,501 | ||||||
Visa, Inc., Class A | 550,100 | 108,188,167 | ||||||
Yahoo! Inc. * | 1,030,255 | 33,926,297 | ||||||
1,557,686,476 | ||||||||
Technology Hardware & Equipment 6.2% | ||||||||
Amphenol Corp., Class A | 161,800 | 12,990,922 | ||||||
Apple, Inc. | 968,154 | 505,715,242 | ||||||
Cisco Systems, Inc. | 5,713,628 | 128,556,630 | ||||||
Corning, Inc. | 1,555,187 | 26,578,146 | ||||||
EMC Corp. | 2,214,945 | 53,313,726 | ||||||
F5 Networks, Inc. * | 82,400 | 6,716,424 | ||||||
FLIR Systems, Inc. | 149,700 | 4,263,456 | ||||||
Harris Corp. | 129,300 | 8,011,428 | ||||||
Hewlett-Packard Co. | 2,069,108 | 50,424,162 | ||||||
Jabil Circuit, Inc. | 170,686 | 3,560,510 | ||||||
JDS Uniphase Corp. * | 297,881 | 3,899,262 | ||||||
Juniper Networks, Inc. * | 520,465 | 9,701,468 | ||||||
Molex, Inc. | 154,466 | 5,962,388 | ||||||
Motorola Solutions, Inc. | 252,122 | 15,762,667 | ||||||
NetApp, Inc. | 369,974 | 14,358,691 | ||||||
QUALCOMM, Inc. | 1,821,665 | 126,551,067 | ||||||
SanDisk Corp. | 247,324 | 17,189,018 | ||||||
Seagate Technology plc | 331,100 | 16,117,948 | ||||||
TE Connectivity Ltd. | 449,600 | 23,149,904 | ||||||
Western Digital Corp. | 223,300 | 15,548,379 | ||||||
Xerox Corp. | 1,284,866 | 12,771,568 | ||||||
1,061,143,006 | ||||||||
Telecommunication Services 2.4% | ||||||||
AT&T, Inc. | 5,672,236 | 205,334,943 | ||||||
CenturyLink, Inc. | 645,643 | 21,861,472 | ||||||
Crown Castle International Corp. * | 350,700 | 26,660,214 | ||||||
Frontier Communications Corp. (b) | 1,102,945 | 4,863,987 | ||||||
Verizon Communications, Inc. | 3,049,578 | 154,034,185 | ||||||
Windstream Holdings, Inc. (b) | 594,274 | 5,081,043 | ||||||
417,835,844 | ||||||||
Transportation 1.9% | ||||||||
C.H. Robinson Worldwide, Inc. | 178,595 | 10,669,265 | ||||||
CSX Corp. | 1,087,991 | 28,353,045 | ||||||
Delta Air Lines, Inc. | 890,000 | 23,478,200 |
See financial notes 5
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Expeditors International of Washington, Inc. | 239,100 | 10,828,839 | ||||||
FedEx Corp. | 316,668 | 41,483,508 | ||||||
Kansas City Southern | 113,000 | 13,731,760 | ||||||
Norfolk Southern Corp. | 325,292 | 27,981,618 | ||||||
Ryder System, Inc. | 60,702 | 3,996,013 | ||||||
Southwest Airlines Co. | 753,336 | 12,972,446 | ||||||
Union Pacific Corp. | 492,175 | 74,515,295 | ||||||
United Parcel Service, Inc., Class B | 769,918 | 75,636,744 | ||||||
323,646,733 | ||||||||
Utilities 3.0% | ||||||||
AGL Resources, Inc. | 129,640 | 6,204,570 | ||||||
Ameren Corp. | 257,420 | 9,313,456 | ||||||
American Electric Power Co., Inc. | 504,402 | 23,626,190 | ||||||
CenterPoint Energy, Inc. | 448,566 | 11,034,724 | ||||||
CMS Energy Corp. | 261,884 | 7,191,335 | ||||||
Consolidated Edison, Inc. | 330,165 | 19,222,206 | ||||||
Dominion Resources, Inc. | 607,464 | 38,725,830 | ||||||
DTE Energy Co. | 178,612 | 12,349,234 | ||||||
Duke Energy Corp. | 744,099 | 53,374,221 | ||||||
Edison International | 338,593 | 16,601,215 | ||||||
Entergy Corp. | 186,753 | 12,086,654 | ||||||
Exelon Corp. | 914,293 | 26,093,922 | ||||||
FirstEnergy Corp. | 433,794 | 16,427,779 | ||||||
Integrys Energy Group, Inc. | 86,594 | 5,081,336 | ||||||
NextEra Energy, Inc. | 452,538 | 38,352,595 | ||||||
NiSource, Inc. | 349,362 | 11,011,890 | ||||||
Northeast Utilities | 320,500 | 13,746,245 | ||||||
NRG Energy, Inc. | 378,600 | 10,801,458 | ||||||
ONEOK, Inc. | 231,100 | 13,057,150 | ||||||
Pepco Holdings, Inc. | 250,100 | 4,821,928 | ||||||
PG&E Corp. | 474,506 | 19,858,076 | ||||||
Pinnacle West Capital Corp. | 125,361 | 7,023,977 | ||||||
PPL Corp. | 655,770 | 20,086,235 | ||||||
Public Service Enterprise Group, Inc. | 575,270 | 19,271,545 | ||||||
SCANA Corp. | 157,500 | 7,344,225 | ||||||
Sempra Energy | 251,269 | 22,900,657 | ||||||
TECO Energy, Inc. | 194,819 | 3,345,042 | ||||||
The AES Corp. | 623,349 | 8,782,987 | ||||||
The Southern Co. | 931,325 | 38,100,506 | ||||||
Wisconsin Energy Corp. | 231,900 | 9,765,309 | ||||||
Xcel Energy, Inc. | 543,886 | 15,696,550 | ||||||
521,299,047 | ||||||||
Total Common Stock | ||||||||
(Cost $10,242,641,102) | 16,648,423,804 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.6% of net assets | ||||||||
Time Deposits 2.4% | ||||||||
Skandinaviska Enskilda Banken | ||||||||
0.03%, 11/01/13 | 190,701,794 | 190,701,794 | ||||||
Societe Generale | ||||||||
0.03%, 11/01/13 | 214,723,131 | 214,723,131 | ||||||
Wells Fargo | ||||||||
0.03%, 11/01/13 | 10,224,304 | 10,224,304 | ||||||
415,649,229 | ||||||||
U.S. Treasury Obligation 0.2% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/19/13 (c)(d) | 22,000,000 | 21,999,854 | ||||||
Total Short-Term Investments | ||||||||
(Cost $437,649,083) | 437,649,083 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.1% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (e) | 20,143,201 | 20,143,201 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $20,143,201) | 20,143,201 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, tax basis cost of the fund’s investments was $10,717,310,195 and the unrealized appreciation and depreciation were $7,023,566,575 and ($654,803,883), respectively, with a net unrealized appreciation of $6,368,762,692.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is on loan. Securities on loan were valued at $19,513,953. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 4,920 | 430,746,000 | 10,951,103 |
6 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .8% | Common Stock | 1,537,930,364 | 2,275,773,764 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
3 | .9% | Short-Term Investments | 92,364,342 | 92,364,342 | ||||||||
100 | .7% | Total Investments | 1,630,294,706 | 2,368,138,106 | ||||||||
3 | .9% | Collateral Invested for Securities on Loan | 90,885,937 | 90,885,937 | ||||||||
(4 | .6%) | Other Assets and Liabilities, Net | (107,670,879 | ) | ||||||||
100 | .0% | Net Assets | 2,351,353,164 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 96.8% of net assets | ||||||||
Automobiles & Components 1.0% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 95,800 | 1,782,838 | ||||||
Cooper Tire & Rubber Co. | 91,223 | 2,372,710 | ||||||
Dana Holding Corp. | 212,000 | 4,155,200 | ||||||
Dorman Products, Inc. | 36,000 | 1,749,960 | ||||||
Drew Industries, Inc. | 32,700 | 1,643,502 | ||||||
Federal-Mogul Corp. * | 28,400 | 581,916 | ||||||
Fox Factory Holding Corp. * | 14,100 | 245,622 | ||||||
Fuel Systems Solutions, Inc. * | 22,300 | 400,508 | ||||||
Gentherm, Inc. * | 45,700 | 1,067,095 | ||||||
Modine Manufacturing Co. * | 73,100 | 973,692 | ||||||
Remy International, Inc. | 20,000 | 440,600 | ||||||
Shiloh Industries, Inc. | 7,200 | 118,224 | ||||||
Spartan Motors, Inc. | 44,700 | 303,513 | ||||||
Standard Motor Products, Inc. | 28,800 | 1,041,408 | ||||||
Stoneridge, Inc. * | 42,600 | 543,576 | ||||||
Superior Industries International, Inc. | 31,400 | 588,750 | ||||||
Tenneco, Inc. * | 87,900 | 4,664,853 | ||||||
Tower International, Inc. * | 8,800 | 186,736 | ||||||
Winnebago Industries, Inc. * | 44,000 | 1,305,040 | ||||||
24,165,743 | ||||||||
Banks 8.5% | ||||||||
1st Source Corp. | 23,821 | 747,503 | ||||||
1st United Bancorp, Inc. | 43,000 | 328,520 | ||||||
Access National Corp. | 10,100 | 146,753 | ||||||
American National Bankshares, Inc. | 10,700 | 245,458 | ||||||
Ameris Bancorp (c)* | 38,000 | 695,400 | ||||||
Ames National Corp. | 15,500 | 349,215 | ||||||
Arrow Financial Corp. | 14,148 | 365,160 | ||||||
Astoria Financial Corp. | 130,200 | 1,719,942 | ||||||
Banc of California, Inc. | 23,300 | 328,763 | ||||||
BancFirst Corp. | 10,116 | 562,146 | ||||||
Banco Latinoamericano de Comercio Exterior, S.A., Class E | 41,700 | 1,093,791 | ||||||
BancorpSouth, Inc. | 138,800 | 3,067,480 | ||||||
Bank Mutual Corp. | 61,600 | 391,776 | ||||||
Bank of Kentucky Financial Corp. | 7,700 | 221,837 | ||||||
Bank of Marin Bancorp | 7,100 | 302,105 | ||||||
Bank of the Ozarks, Inc. | 44,300 | 2,191,964 | ||||||
BankFinancial Corp. | 28,200 | 261,978 | ||||||
Banner Corp. | 29,700 | 1,136,322 | ||||||
Bar Harbor Bankshares | 5,300 | 200,022 | ||||||
BBCN Bancorp, Inc. | 114,400 | 1,696,552 | ||||||
BBX Capital Corp., Class A * | 10,300 | 135,857 | ||||||
Beneficial Mutual Bancorp, Inc. * | 44,503 | 433,904 | ||||||
Berkshire Hills Bancorp, Inc. | 38,700 | 981,819 | ||||||
BNC Bancorp | 26,100 | 342,171 | ||||||
BofI Holding, Inc. * | 17,500 | 1,057,350 | ||||||
Boston Private Financial Holdings, Inc. | 116,000 | 1,321,240 | ||||||
Bridge Bancorp, Inc. | 16,100 | 371,749 | ||||||
Bridge Capital Holdings * | 12,200 | 214,598 | ||||||
Brookline Bancorp, Inc. | 105,522 | 935,980 | ||||||
Bryn Mawr Bank Corp. | 19,300 | 537,698 | ||||||
C&F Financial Corp. (c) | 4,400 | 237,204 | ||||||
Camden National Corp. | 10,300 | 415,605 | ||||||
Capital Bank Financial Corp., Class A * | 35,300 | 784,366 | ||||||
Capital City Bank Group, Inc. * | 15,300 | 188,190 | ||||||
Capitol Federal Financial, Inc. | 212,300 | 2,689,841 | ||||||
Cardinal Financial Corp. | 42,500 | 701,250 | ||||||
Cascade Bancorp * | 17,770 | 91,871 | ||||||
Cathay General Bancorp | 112,422 | 2,768,954 | ||||||
Center Bancorp, Inc. | 16,200 | 242,352 | ||||||
Centerstate Banks, Inc. | 40,200 | 396,372 | ||||||
Central Pacific Financial Corp. | 29,700 | 547,074 | ||||||
Century Bancorp, Inc., Class A | 4,700 | 152,750 | ||||||
Charter Financial Corp. | 32,459 | 351,856 | ||||||
Chemical Financial Corp. | 42,103 | 1,233,197 | ||||||
Chemung Financial Corp. | 5,100 | 179,673 | ||||||
Citizens & Northern Corp. | 16,300 | 322,088 | ||||||
City Holding Co. | 22,100 | 1,005,550 | ||||||
Clifton Savings Bancorp, Inc. | 11,400 | 143,982 | ||||||
CNB Financial Corp. | 20,700 | 414,207 | ||||||
CoBiz Financial, Inc. | 49,300 | 534,905 | ||||||
Columbia Banking System, Inc. | 73,000 | 1,875,370 | ||||||
Community Bank System, Inc. | 57,800 | 2,098,718 | ||||||
Community Trust Bancorp, Inc. | 19,800 | 843,282 | ||||||
CommunityOne Bancorp (c)* | 13,700 | 147,412 | ||||||
ConnectOne Bancorp, Inc. * | 2,500 | 95,025 | ||||||
CU Bancorp * | 13,400 | 249,240 | ||||||
Customers Bancorp, Inc. * | 28,500 | 477,375 | ||||||
CVB Financial Corp. | 132,219 | 1,922,464 | ||||||
Dime Community Bancshares, Inc. | 44,600 | 729,656 | ||||||
Doral Financial Corp. * | 8,550 | 144,495 |
18 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Eagle Bancorp, Inc. * | 30,580 | 808,841 | ||||||
Enterprise Bancorp, Inc. | 8,190 | 160,033 | ||||||
Enterprise Financial Services Corp. | 24,300 | 438,129 | ||||||
ESB Financial Corp. | 20,040 | 266,732 | ||||||
ESSA Bancorp, Inc. | 15,200 | 166,592 | ||||||
EverBank Financial Corp. | 114,700 | 1,734,264 | ||||||
F.N.B. Corp. | 216,337 | 2,706,376 | ||||||
Farmers Capital Bank Corp. * | 10,700 | 219,778 | ||||||
Federal Agricultural Mortgage Corp., Class C | 15,800 | 563,902 | ||||||
Fidelity Southern Corp. | 20,866 | 318,622 | ||||||
Financial Institutions, Inc. | 18,500 | 437,895 | ||||||
First Bancorp | 31,600 | 473,368 | ||||||
First BanCorp * | 96,500 | 535,575 | ||||||
First Bancorp, Inc. | 12,096 | 210,591 | ||||||
First Busey Corp. | 103,200 | 533,544 | ||||||
First Commonwealth Financial Corp. | 146,256 | 1,270,965 | ||||||
First Community Bancshares, Inc. | 24,600 | 410,574 | ||||||
First Connecticut Bancorp, Inc. | 23,900 | 350,852 | ||||||
First Defiance Financial Corp. | 13,000 | 335,660 | ||||||
First Federal Bancshares of Arkansas, Inc. * | 14,100 | 126,618 | ||||||
First Financial Bancorp | 82,689 | 1,283,333 | ||||||
First Financial Bankshares, Inc. (c) | 46,231 | 2,843,669 | ||||||
First Financial Corp. | 17,700 | 611,358 | ||||||
First Financial Holdings, Inc. | 35,763 | 2,143,277 | ||||||
First Financial Northwest, Inc. | 22,000 | 238,480 | ||||||
First Interstate BancSystem, Inc. | 24,600 | 617,706 | ||||||
First Merchants Corp. | 39,300 | 738,840 | ||||||
First Midwest Bancorp, Inc. | 106,163 | 1,765,491 | ||||||
First NBC Bank Holding Co. * | 5,900 | 157,235 | ||||||
First Security Group, Inc. (c)* | 89,000 | 180,670 | ||||||
Firstmerit Corp. | 240,515 | 5,401,967 | ||||||
Flagstar Bancorp, Inc. * | 28,300 | 458,743 | ||||||
Flushing Financial Corp. | 47,500 | 954,275 | ||||||
Fox Chase Bancorp, Inc. | 19,500 | 336,765 | ||||||
Franklin Financial Corp. | 15,300 | 288,711 | ||||||
German American Bancorp, Inc. | 16,900 | 459,342 | ||||||
Glacier Bancorp, Inc. | 106,011 | 2,929,084 | ||||||
Great Southern Bancorp, Inc. | 13,600 | 381,888 | ||||||
Guaranty Bancorp | 20,920 | 282,420 | ||||||
Hampton Roads Bankshares, Inc. * | 74,100 | 104,481 | ||||||
Hancock Holding Co. | 121,049 | 3,967,986 | ||||||
Hanmi Financial Corp. | 45,900 | 802,332 | ||||||
Heartland Financial USA, Inc. | 19,900 | 527,151 | ||||||
Heritage Commerce Corp. | 27,900 | 217,341 | ||||||
Heritage Financial Corp. | 21,000 | 338,730 | ||||||
Heritage Oaks Bancorp * | 27,600 | 189,060 | ||||||
Hingham Institution for Savings | 1,800 | 130,896 | ||||||
Home Bancorp, Inc. * | 9,400 | 170,798 | ||||||
Home Bancshares, Inc. | 65,180 | 2,208,298 | ||||||
Home Federal Bancorp, Inc. | 22,200 | 346,098 | ||||||
Home Loan Servicing Solutions Ltd. | 101,300 | 2,391,693 | ||||||
HomeStreet, Inc. | 18,500 | 351,870 | ||||||
HomeTrust Bancshares, Inc. * | 29,400 | 474,810 | ||||||
Horizon Bancorp | 12,400 | 269,204 | ||||||
Hudson Valley Holding Corp. | 27,100 | 501,079 | ||||||
IBERIABANK Corp. | 43,300 | 2,530,019 | ||||||
Independent Bank Corp. | 33,000 | 1,184,040 | ||||||
Independent Bank Group, Inc. | 5,400 | 203,742 | ||||||
International Bancshares Corp. | 77,800 | 1,777,730 | ||||||
Intervest Bancshares Corp. * | 25,500 | 185,895 | ||||||
Investors Bancorp, Inc. | 66,400 | 1,574,344 | ||||||
Kearny Financial Corp. * | 22,000 | 231,000 | ||||||
Lakeland Bancorp, Inc. | 50,950 | 580,830 | ||||||
Lakeland Financial Corp. | 23,200 | 825,688 | ||||||
LCNB Corp. (c) | 8,600 | 173,290 | ||||||
Macatawa Bank Corp. * | 33,800 | 165,958 | ||||||
MainSource Financial Group, Inc. | 27,000 | 437,940 | ||||||
MB Financial, Inc. | 81,224 | 2,412,353 | ||||||
Mercantile Bank Corp. | 11,800 | 257,712 | ||||||
Merchants Bancshares, Inc. | 9,946 | 298,181 | ||||||
Meridian Interstate Bancorp, Inc. * | 11,800 | 280,132 | ||||||
Meta Financial Group, Inc. | 7,800 | 290,316 | ||||||
Metro Bancorp, Inc. * | 18,600 | 396,924 | ||||||
MetroCorp Bancshares, Inc. | 21,700 | 310,961 | ||||||
MGIC Investment Corp. * | 462,200 | 3,762,308 | ||||||
Middleburg Financial Corp. | 7,400 | 135,568 | ||||||
MidSouth Bancorp, Inc. | 10,200 | 154,836 | ||||||
MidWestOne Financial Group, Inc. | 9,300 | 245,706 | ||||||
NASB Financial, Inc. * | 5,800 | 149,350 | ||||||
National Bank Holdings Corp., Class A | 74,500 | 1,564,500 | ||||||
National Bankshares, Inc. | 9,300 | 326,895 | ||||||
National Penn Bancshares, Inc. | 166,778 | 1,729,488 | ||||||
NBT Bancorp, Inc. | 62,523 | 1,523,685 | ||||||
NewBridge Bancorp * | 36,000 | 268,560 | ||||||
Northfield Bancorp, Inc. | 82,986 | 1,073,009 | ||||||
Northrim BanCorp, Inc. | 8,900 | 223,390 | ||||||
Northwest Bancshares, Inc. | 140,909 | 1,971,317 | ||||||
OceanFirst Financial Corp. | 19,600 | 344,764 | ||||||
OFG Bancorp | 63,500 | 940,435 | ||||||
Old National Bancorp | 147,983 | 2,151,673 | ||||||
OmniAmerican Bancorp, Inc. * | 15,900 | 348,528 | ||||||
Oritani Financial Corp. | 67,950 | 1,102,149 | ||||||
Pacific Continental Corp. | 24,700 | 340,366 | ||||||
Pacific Premier Bancorp, Inc. * | 22,000 | 306,020 | ||||||
PacWest Bancorp | 54,051 | 2,056,641 | ||||||
Palmetto Bancshares, Inc. * | 7,300 | 97,966 | ||||||
Park National Corp. | 16,853 | 1,335,095 | ||||||
Park Sterling Corp. | 62,100 | 404,271 | ||||||
Peapack-Gladstone Financial Corp. | 12,200 | 223,748 | ||||||
Penns Woods Bancorp, Inc. | 7,100 | 363,520 | ||||||
PennyMac Financial Services, Inc., Class A * | 18,200 | 293,020 | ||||||
Peoples Bancorp, Inc. | 14,100 | 316,122 | ||||||
Pinnacle Financial Partners, Inc. * | 51,932 | 1,609,892 | ||||||
Preferred Bank * | 16,100 | 309,442 | ||||||
PrivateBancorp, Inc. | 93,476 | 2,277,075 | ||||||
Prosperity Bancshares, Inc. | 87,900 | 5,489,355 | ||||||
Provident Financial Holdings, Inc. | 13,400 | 203,144 | ||||||
Provident Financial Services, Inc. | 89,751 | 1,681,934 | ||||||
Radian Group, Inc. | 247,200 | 3,601,704 | ||||||
Renasant Corp. | 43,881 | 1,258,507 | ||||||
Republic Bancorp, Inc., Class A | 13,300 | 306,166 | ||||||
Rockville Financial, Inc. | 39,500 | 519,425 | ||||||
Roma Financial Corp. * | 10,100 | 196,546 | ||||||
S&T Bancorp, Inc. | 41,981 | 1,029,374 | ||||||
S.Y. Bancorp, Inc. | 19,900 | 597,199 | ||||||
Sandy Spring Bancorp, Inc. | 34,900 | 854,701 |
See financial notes 19
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Seacoast Banking Corp. of Florida * | 97,100 | 221,388 | ||||||
Sierra Bancorp | 15,900 | 300,987 | ||||||
Simmons First National Corp., Class A | 23,200 | 759,568 | ||||||
Southside Bancshares, Inc. | 26,565 | 725,224 | ||||||
Southwest Bancorp, Inc. * | 26,000 | 416,260 | ||||||
State Bank Financial Corp. | 44,800 | 764,288 | ||||||
StellarOne Corp. | 30,800 | 717,024 | ||||||
Sterling Bancorp | 60,100 | 704,372 | ||||||
Sterling Bancorp * | 41,400 | 610,650 | ||||||
Sterling Financial Corp. | 48,400 | 1,401,664 | ||||||
Suffolk Bancorp * | 16,500 | 322,575 | ||||||
Sun Bancorp, Inc. * | 50,400 | 166,320 | ||||||
Susquehanna Bancshares, Inc. | 273,708 | 3,225,649 | ||||||
Taylor Capital Group, Inc. * | 24,600 | 565,800 | ||||||
Territorial Bancorp, Inc. | 16,000 | 348,960 | ||||||
Texas Capital Bancshares, Inc. * | 58,100 | 3,024,105 | ||||||
The Bancorp, Inc. * | 45,800 | 740,586 | ||||||
The First of Long Island Corp. | 13,000 | 511,550 | ||||||
Tompkins Financial Corp. | 20,600 | 1,015,992 | ||||||
TowneBank | 35,879 | 522,398 | ||||||
Tree.com, Inc. | 8,300 | 244,933 | ||||||
TriCo Bancshares | 21,900 | 553,851 | ||||||
Tristate Capital Holdings, Inc. * | 9,300 | 116,343 | ||||||
TrustCo Bank Corp. | 131,702 | 885,037 | ||||||
Trustmark Corp. | 95,877 | 2,604,019 | ||||||
UMB Financial Corp. | 50,900 | 2,999,028 | ||||||
Umpqua Holdings Corp. | 164,895 | 2,699,331 | ||||||
Union First Market Bankshares Corp. | 30,600 | 738,072 | ||||||
United Bankshares, Inc. (c) | 72,322 | 2,139,285 | ||||||
United Community Banks, Inc. * | 64,700 | 1,008,673 | ||||||
United Community Financial Corp. * | 71,100 | 284,400 | ||||||
United Financial Bancorp, Inc. | 29,400 | 460,992 | ||||||
Univest Corp. of Pennsylvania | 22,500 | 449,325 | �� | |||||
VantageSouth Bancshares, Inc. * | 38,600 | 188,754 | ||||||
ViewPoint Financial Group, Inc. | 56,900 | 1,240,989 | ||||||
Virginia Commerce Bancorp, Inc. * | 36,800 | 589,904 | ||||||
Walker & Dunlop, Inc. * | 23,500 | 305,030 | ||||||
Washington Banking Co. | 20,500 | 348,705 | ||||||
Washington Trust Bancorp, Inc. | 21,000 | 690,690 | ||||||
Waterstone Financial, Inc. * | 20,600 | 219,184 | ||||||
Webster Financial Corp. | 128,700 | 3,589,443 | ||||||
WesBanco, Inc. | 39,298 | 1,155,361 | ||||||
West Bancorp, Inc. | 20,800 | 287,456 | ||||||
Westamerica Bancorp | 38,500 | 1,981,980 | ||||||
Western Alliance Bancorp * | 108,500 | 2,294,775 | ||||||
Westfield Financial, Inc. | 37,600 | 271,096 | ||||||
Wilshire Bancorp, Inc. | 90,100 | 763,147 | ||||||
Wintrust Financial Corp. | 54,655 | 2,378,039 | ||||||
WSFS Financial Corp. | 12,500 | 875,125 | ||||||
Yadkin Financial Corp. * | 20,500 | 336,610 | ||||||
199,072,755 | ||||||||
Capital Goods 8.9% | ||||||||
AAON, Inc. | 40,725 | 1,099,982 | ||||||
AAR Corp. | 56,097 | 1,642,520 | ||||||
Accuride Corp. * | 65,000 | 292,500 | ||||||
Aceto Corp. | 39,400 | 628,430 | ||||||
Actuant Corp., Class A | 106,148 | 3,986,919 | ||||||
Acuity Brands, Inc. | 61,700 | 6,201,467 | ||||||
Aegion Corp. * | 55,000 | 1,127,500 | ||||||
Aerovironment, Inc. * | 26,700 | 723,837 | ||||||
Aircastle Ltd. | 97,600 | 1,841,712 | ||||||
Alamo Group, Inc. | 10,500 | 495,495 | ||||||
Albany International Corp., Class A | 42,100 | 1,549,701 | ||||||
Altra Holdings, Inc. | 38,200 | 1,160,134 | ||||||
Ameresco, Inc., Class A * | 27,700 | 289,742 | ||||||
American Railcar Industries, Inc. (c) | 13,000 | 532,480 | ||||||
American Science & Engineering, Inc. | 12,200 | 802,516 | ||||||
American Superconductor Corp. (c)* | 59,800 | 130,364 | ||||||
American Woodmark Corp. * | 15,700 | 532,544 | ||||||
Ampco-Pittsburgh Corp. | 11,400 | 209,874 | ||||||
API Technologies Corp. * | 44,400 | 129,648 | ||||||
Apogee Enterprises, Inc. | 40,100 | 1,254,328 | ||||||
Applied Industrial Technologies, Inc. | 60,366 | 2,855,915 | ||||||
Argan, Inc. | 19,900 | 442,775 | ||||||
Astec Industries, Inc. | 28,095 | 949,892 | ||||||
Astronics Corp. * | 19,300 | 946,858 | ||||||
Astronics Corp., Class B * | 3,860 | 186,399 | ||||||
AZZ, Inc. | 36,100 | 1,620,890 | ||||||
Barnes Group, Inc. | 77,640 | 2,759,326 | ||||||
Beacon Roofing Supply, Inc. * | 69,382 | 2,408,249 | ||||||
Blount International, Inc. * | 68,262 | 831,431 | ||||||
BlueLinx Holdings, Inc. * | 138,964 | 258,473 | ||||||
Brady Corp., Class A | 65,829 | 1,921,549 | ||||||
Briggs & Stratton Corp. | 69,593 | 1,276,336 | ||||||
Builders FirstSource, Inc. * | 60,900 | 451,269 | ||||||
CAI International, Inc. * | 24,500 | 536,305 | ||||||
Capstone Turbine Corp. (c)* | 409,800 | 520,446 | ||||||
Chart Industries, Inc. * | 43,700 | 4,696,439 | ||||||
CIRCOR International, Inc. | 24,300 | 1,792,611 | ||||||
CLARCOR, Inc. | 70,800 | 4,140,384 | ||||||
Coleman Cable, Inc. | 11,200 | 275,520 | ||||||
Columbus McKinnon Corp. * | 30,600 | 795,906 | ||||||
Comfort Systems USA, Inc. | 57,000 | 1,061,910 | ||||||
Commercial Vehicle Group, Inc. * | 33,500 | 263,645 | ||||||
Cubic Corp. | 28,315 | 1,486,537 | ||||||
Curtiss-Wright Corp. | 68,600 | 3,414,908 | ||||||
DigitalGlobe, Inc. * | 106,135 | 3,377,216 | ||||||
Douglas Dynamics, Inc. | 30,400 | 461,168 | ||||||
Ducommun, Inc. * | 15,100 | 375,386 | ||||||
DXP Enterprises, Inc. * | 13,500 | 1,240,650 | ||||||
Dycom Industries, Inc. * | 47,200 | 1,399,480 | ||||||
Dynamic Materials Corp. | 17,900 | 395,590 | ||||||
Edgen Group, Inc. * | 30,200 | 361,494 | ||||||
EMCOR Group, Inc. | 96,800 | 3,587,408 | ||||||
Encore Wire Corp. | 29,441 | 1,458,213 | ||||||
Energy Recovery, Inc. * | 61,300 | 357,992 | ||||||
EnerSys, Inc. | 69,178 | 4,589,960 | ||||||
Engility Holdings, Inc. * | 24,500 | 758,765 | ||||||
Enphase Energy, Inc. (c)* | 32,800 | 247,640 | ||||||
EnPro Industries, Inc. * | 30,800 | 1,837,836 | ||||||
Erickson Air-Crane, Inc. (c)* | 5,400 | 105,840 | ||||||
ESCO Technologies, Inc. | 37,769 | 1,362,706 | ||||||
Esterline Technologies Corp. * | 46,000 | 3,687,360 | ||||||
Federal Signal Corp. * | 94,400 | 1,292,336 |
20 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Flow International Corp. * | 63,400 | 252,966 | ||||||
Franklin Electric Co., Inc. | 68,336 | 2,586,518 | ||||||
FreightCar America, Inc. | 16,000 | 355,840 | ||||||
FuelCell Energy, Inc. (c)* | 215,500 | 288,770 | ||||||
Furmanite Corp. * | 59,700 | 671,625 | ||||||
GenCorp, Inc. (c)* | 89,400 | 1,501,920 | ||||||
Generac Holdings, Inc. | 73,500 | 3,627,225 | ||||||
General Cable Corp. | 70,900 | 2,334,737 | ||||||
Gibraltar Industries, Inc. * | 46,000 | 736,460 | ||||||
Global Brass & Copper Holdings, Inc. * | 11,500 | 215,395 | ||||||
Global Power Equipment Group, Inc. | 23,600 | 480,496 | ||||||
GrafTech International Ltd. * | 166,600 | 1,482,740 | ||||||
Graham Corp. | 15,200 | 559,512 | ||||||
Granite Construction, Inc. | 58,000 | 1,876,300 | ||||||
Great Lakes Dredge & Dock Corp. | 85,200 | 691,824 | ||||||
Griffon Corp. | 63,821 | 799,677 | ||||||
H&E Equipment Services, Inc. * | 42,800 | 1,071,284 | ||||||
Hardinge, Inc. | 16,000 | 236,640 | ||||||
HEICO Corp. | 95,806 | 5,133,299 | ||||||
Houston Wire & Cable Co. | 23,800 | 330,106 | ||||||
Hurco Cos., Inc. | 8,600 | 210,614 | ||||||
Hyster-Yale Materials Handling, Inc. | 15,554 | 1,220,056 | ||||||
II-VI, Inc. * | 76,900 | 1,311,914 | ||||||
Innovative Solutions & Support, Inc. | 17,900 | 141,052 | ||||||
Insteel Industries, Inc. | 23,600 | 391,524 | ||||||
John Bean Technologies Corp. | 40,900 | 1,111,662 | ||||||
Kadant, Inc. | 16,500 | 590,700 | ||||||
Kaman Corp. | 39,349 | 1,462,996 | ||||||
Kratos Defense & Security Solutions, Inc. * | 62,600 | 530,848 | ||||||
L.B. Foster Co., Class A | 14,500 | 677,875 | ||||||
Layne Christensen Co. * | 28,311 | 547,535 | ||||||
Lindsay Corp. | 18,000 | 1,368,180 | ||||||
LMI Aerospace, Inc. * | 12,300 | 193,110 | ||||||
LSI Industries, Inc. | 34,500 | 317,745 | ||||||
Lydall, Inc. * | 23,000 | 419,060 | ||||||
Manitex International, Inc. * | 17,500 | 226,275 | ||||||
MasTec, Inc. * | 84,673 | 2,706,996 | ||||||
Meritor, Inc. * | 145,700 | 1,000,959 | ||||||
Miller Industries, Inc. | 15,800 | 296,092 | ||||||
Moog, Inc., Class A * | 65,300 | 3,900,369 | ||||||
Mueller Industries, Inc. | 40,124 | 2,419,076 | ||||||
Mueller Water Products, Inc., Class A | 224,900 | 1,927,393 | ||||||
MYR Group, Inc. * | 29,000 | 767,050 | ||||||
National Presto Industries, Inc. (c) | 7,100 | 500,905 | ||||||
NCI Building Systems, Inc. * | 34,200 | 493,506 | ||||||
NN, Inc. | 22,500 | 361,800 | ||||||
Nortek, Inc. * | 12,800 | 898,176 | ||||||
Northwest Pipe Co. * | 12,500 | 450,375 | ||||||
Omega Flex, Inc. | 10,802 | 219,713 | ||||||
Orbital Sciences Corp. * | 86,636 | 1,998,693 | ||||||
Orion Marine Group, Inc. * | 36,200 | 452,500 | ||||||
Patrick Industries, Inc. * | 9,500 | 297,160 | ||||||
PGT, Inc. * | 47,300 | 494,285 | ||||||
Pike Electric Corp. | 37,000 | 399,970 | ||||||
Ply Gem Holdings, Inc. * | 22,500 | 335,250 | ||||||
PMFG, Inc. * | 27,700 | 217,168 | ||||||
Polypore International, Inc. (c)* | 66,500 | 3,005,800 | ||||||
Powell Industries, Inc. * | 13,000 | 816,790 | ||||||
Power Solutions International, Inc. * | 3,000 | 174,780 | ||||||
PowerSecure International, Inc. * | 31,100 | 562,288 | ||||||
Preformed Line Products Co. | 3,300 | 277,266 | ||||||
Primoris Services Corp. | 50,300 | 1,309,812 | ||||||
Proto Labs, Inc. * | 24,300 | 2,037,798 | ||||||
Quanex Building Products Corp. | 55,404 | 985,083 | ||||||
Raven Industries, Inc. | 53,000 | 1,768,080 | ||||||
RBC Bearings, Inc. * | 32,800 | 2,256,312 | ||||||
Revolution Lighting Technologies, Inc. (c)* | 42,300 | 126,477 | ||||||
Rexnord Corp. * | 43,200 | 1,016,064 | ||||||
Rush Enterprises, Inc., Class A * | 51,987 | 1,487,868 | ||||||
Simpson Manufacturing Co., Inc. | 57,194 | 2,027,527 | ||||||
Sparton Corp. * | 14,600 | 385,294 | ||||||
Standex International Corp. | 17,600 | 1,082,576 | ||||||
Sterling Construction Co., Inc. * | 22,000 | 211,200 | ||||||
Stock Building Supply Holdings, Inc. * | 11,500 | 177,100 | ||||||
Sun Hydraulics Corp. | 30,150 | 1,196,352 | ||||||
TAL International Group, Inc. * | 48,200 | 2,328,542 | ||||||
Taser International, Inc. * | 76,200 | 1,354,074 | ||||||
Tecumseh Products Co., Class A * | 26,300 | 205,140 | ||||||
Teledyne Technologies, Inc. * | 55,300 | 4,911,746 | ||||||
Tennant Co. | 26,700 | 1,620,423 | ||||||
Textainer Group Holdings Ltd. | 30,400 | 1,152,160 | ||||||
The ExOne Co. (c)* | 10,200 | 523,566 | ||||||
The Gorman-Rupp Co. | 23,225 | 946,186 | ||||||
The Greenbrier Cos., Inc. * | 34,800 | 923,592 | ||||||
The KEYW Holding Corp. (c)* | 45,400 | 522,100 | ||||||
The Middleby Corp. * | 27,052 | 6,158,388 | ||||||
Thermon Group Holdings, Inc. * | 38,600 | 907,486 | ||||||
Titan International, Inc. | 76,500 | 1,109,250 | ||||||
Titan Machinery, Inc. (c)* | 23,200 | 409,248 | ||||||
Trex Co., Inc. * | 24,500 | 1,720,390 | ||||||
TriMas Corp. * | 64,100 | 2,426,826 | ||||||
Tutor Perini Corp. * | 52,830 | 1,212,448 | ||||||
Twin Disc, Inc. | 11,300 | 292,331 | ||||||
Universal Forest Products, Inc. | 28,162 | 1,490,333 | ||||||
USG Corp. * | 109,300 | 2,984,983 | ||||||
Vicor Corp. * | 26,200 | 230,822 | ||||||
Wabash National Corp. * | 98,800 | 1,152,008 | ||||||
Watsco, Inc. | 36,600 | 3,487,614 | ||||||
Watts Water Technologies, Inc., Class A | 41,207 | 2,380,940 | ||||||
Woodward, Inc. | 100,200 | 4,017,018 | ||||||
Xerium Technologies, Inc. * | 15,600 | 187,044 | ||||||
209,073,747 | ||||||||
Commercial & Professional Supplies 3.4% | ||||||||
ABM Industries, Inc. | 78,709 | 2,165,285 | ||||||
Acacia Research Corp. | 72,500 | 1,094,025 | ||||||
ACCO Brands Corp. * | 161,700 | 945,945 | ||||||
Acorn Energy, Inc. (c) | 24,600 | 92,496 | ||||||
ARC Document Solutions, Inc. * | 49,600 | 309,504 | ||||||
Barrett Business Services, Inc. | 10,200 | 849,354 | ||||||
Casella Waste Systems, Inc., Class A * | 52,000 | 307,320 | ||||||
CBIZ, Inc. * | 52,800 | 430,848 |
See financial notes 21
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
CDI Corp. | 19,400 | 311,370 | ||||||
CECO Environmental Corp. | 35,752 | 631,023 | ||||||
Cenveo, Inc. * | 73,800 | 231,732 | ||||||
Compx International, Inc. | 6,699 | 95,059 | ||||||
Consolidated Graphics, Inc. * | 11,400 | 730,626 | ||||||
Courier Corp. | 13,800 | 234,462 | ||||||
CRA International, Inc. * | 14,500 | 276,225 | ||||||
Deluxe Corp. | 72,146 | 3,397,355 | ||||||
EnerNOC, Inc. * | 35,000 | 582,050 | ||||||
Ennis, Inc. | 38,200 | 678,050 | ||||||
Exponent, Inc. | 18,700 | 1,413,907 | ||||||
Franklin Covey Co. * | 17,900 | 336,520 | ||||||
FTI Consulting, Inc. * | 57,500 | 2,333,350 | ||||||
G&K Services, Inc., Class A | 27,830 | 1,736,592 | ||||||
GP Strategies Corp. * | 19,900 | 557,598 | ||||||
Healthcare Services Group, Inc. | 98,525 | 2,698,600 | ||||||
Heidrick & Struggles International, Inc. | 24,100 | 446,332 | ||||||
Heritage-Crystal Clean, Inc. * | 10,600 | 187,302 | ||||||
Herman Miller, Inc. | 84,500 | 2,563,730 | ||||||
HNI Corp. | 65,300 | 2,536,905 | ||||||
Huron Consulting Group, Inc. * | 32,800 | 1,921,096 | ||||||
ICF International, Inc. * | 28,200 | 976,284 | ||||||
InnerWorkings, Inc. * | 63,200 | 604,824 | ||||||
Insperity, Inc. | 33,210 | 1,284,231 | ||||||
Interface, Inc. | 85,700 | 1,735,425 | ||||||
Intersections, Inc. | 12,300 | 105,411 | ||||||
Kelly Services, Inc., Class A | 38,323 | 799,418 | ||||||
Kforce, Inc. | 45,200 | 889,988 | ||||||
Kimball International, Inc., Class B | 45,500 | 532,350 | ||||||
Knoll, Inc. | 66,903 | 1,098,547 | ||||||
Korn/Ferry International * | 70,661 | 1,681,732 | ||||||
McGrath RentCorp | 36,698 | 1,309,018 | ||||||
Mine Safety Appliances Co. | 40,389 | 1,945,134 | ||||||
Mistras Group, Inc. * | 21,400 | 392,904 | ||||||
Mobile Mini, Inc. * | 54,668 | 1,974,608 | ||||||
Multi-Color Corp. | 18,500 | 644,355 | ||||||
National Technical Systems, Inc. * | 9,800 | 224,322 | ||||||
Navigant Consulting, Inc. * | 72,548 | 1,258,708 | ||||||
NL Industries, Inc. | 8,900 | 103,774 | ||||||
Odyssey Marine Exploration, Inc. (c)* | 114,000 | 247,380 | ||||||
On Assignment, Inc. * | 65,200 | 2,203,108 | ||||||
Pendrell Corp. * | 230,900 | 514,907 | ||||||
Performant Financial Corp. * | 31,800 | 317,046 | ||||||
Quad Graphics, Inc. | 37,000 | 1,292,040 | ||||||
Resources Connection, Inc. | 65,350 | 833,866 | ||||||
RPX Corp. * | 46,200 | 825,132 | ||||||
Schawk, Inc. | 17,700 | 258,774 | ||||||
Standard Parking Corp. * | 21,200 | 561,164 | ||||||
Steelcase, Inc., Class A | 120,242 | 1,970,766 | ||||||
Swisher Hygiene, Inc. * | 154,600 | 93,347 | ||||||
Team, Inc. * | 29,300 | 1,092,597 | ||||||
Tetra Tech, Inc. * | 93,500 | 2,443,155 | ||||||
The Advisory Board Co. * | 50,652 | 3,474,727 | ||||||
The Brink’s Co. | 69,100 | 2,169,740 | ||||||
The Corporate Executive Board Co. | 49,400 | 3,601,260 | ||||||
TRC Cos., Inc. * | 23,700 | 182,253 | ||||||
TrueBlue, Inc. * | 57,576 | 1,422,127 | ||||||
UniFirst Corp. | 21,135 | 2,173,101 | ||||||
United Stationers, Inc. | 58,234 | 2,587,919 | ||||||
US Ecology, Inc. | 28,200 | 1,002,510 | ||||||
Viad Corp. | 30,396 | 811,573 | ||||||
VSE Corp. | 5,500 | 240,900 | ||||||
WageWorks, Inc. * | 35,600 | 1,823,076 | ||||||
West Corp. | 30,400 | 669,408 | ||||||
80,467,570 | ||||||||
Consumer Durables & Apparel 2.9% | ||||||||
American Apparel, Inc. (c)* | 82,600 | 110,684 | ||||||
Arctic Cat, Inc. | 18,800 | 985,120 | ||||||
Bassett Furniture Industries, Inc. | 15,500 | 217,000 | ||||||
Beazer Homes USA, Inc. * | 34,140 | 620,324 | ||||||
Black Diamond, Inc. * | 36,700 | 547,197 | ||||||
Blyth, Inc. (c) | 14,000 | 193,340 | ||||||
Brunswick Corp. | 129,800 | 5,857,874 | ||||||
Callaway Golf Co. | 109,169 | 920,295 | ||||||
Cavco Industries, Inc. * | 10,200 | 597,414 | ||||||
Columbia Sportswear Co. (a) | 18,300 | 1,223,721 | ||||||
Costa, Inc. * | 12,800 | 257,536 | ||||||
Crocs, Inc. * | 127,100 | 1,548,078 | ||||||
CSS Industries, Inc. | 13,400 | 346,926 | ||||||
Culp, Inc. | 12,000 | 232,200 | ||||||
Ethan Allen Interiors, Inc. | 34,179 | 910,528 | ||||||
EveryWare Global, Inc. * | 13,900 | 133,718 | ||||||
Fifth & Pacific Cos., Inc. * | 171,400 | 4,540,386 | ||||||
Flexsteel Industries, Inc. | 6,200 | 170,252 | ||||||
G-III Apparel Group Ltd. * | 23,500 | 1,332,920 | ||||||
Helen of Troy Ltd. * | 44,900 | 2,097,728 | ||||||
Hooker Furniture Corp. | 14,800 | 233,840 | ||||||
Hovnanian Enterprises, Inc., Class A * | 161,300 | 816,178 | ||||||
Iconix Brand Group, Inc. * | 81,300 | 2,934,117 | ||||||
iRobot Corp. * | 42,000 | 1,422,540 | ||||||
JAKKS Pacific, Inc. (c) | 36,400 | 234,416 | ||||||
Johnson Outdoors, Inc., Class A | 8,500 | 233,155 | ||||||
KB Home | 120,300 | 2,041,491 | ||||||
La-Z-Boy, Inc. | 75,400 | 1,740,232 | ||||||
LeapFrog Enterprises, Inc. (c)* | 90,800 | 777,248 | ||||||
Libbey, Inc. * | 29,300 | 625,555 | ||||||
Lifetime Brands, Inc. | 12,400 | 194,184 | ||||||
M.D.C. Holdings, Inc. | 55,700 | 1,625,883 | ||||||
M/I Homes, Inc. * | 34,500 | 706,215 | ||||||
Marine Products Corp. | 13,700 | 128,369 | ||||||
Meritage Homes Corp. * | 51,485 | 2,336,904 | ||||||
Movado Group, Inc. | 24,700 | 1,151,761 | ||||||
NACCO Industries, Inc., Class A | 7,777 | 443,056 | ||||||
Nautilus, Inc. * | 44,200 | 351,832 | ||||||
Oxford Industries, Inc. | 19,200 | 1,377,984 | ||||||
Perry Ellis International, Inc. | 16,800 | 319,368 | ||||||
Quiksilver, Inc. * | 189,900 | 1,579,968 | ||||||
R. G. Barry Corp. | 17,500 | 333,900 | ||||||
Skechers U.S.A., Inc., Class A * | 56,978 | 1,660,339 | ||||||
Skullcandy, Inc. * | 22,200 | 139,416 | ||||||
Smith & Wesson Holding Corp. (c)* | 98,900 | 1,066,142 | ||||||
Standard Pacific Corp. * | 211,300 | 1,675,609 | ||||||
Steven Madden Ltd. * | 88,051 | 3,229,692 | ||||||
Sturm, Ruger & Co., Inc. (c) | 27,100 | 1,772,611 | ||||||
The Jones Group, Inc. | 120,300 | 1,869,462 | ||||||
The Ryland Group, Inc. | 65,700 | 2,641,140 | ||||||
TRI Pointe Homes, Inc. * | 22,600 | 359,792 |
22 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tumi Holdings, Inc. * | 68,300 | 1,458,205 | ||||||
UCP, Inc., Class A * | 11,100 | 156,510 | ||||||
Unifi, Inc. * | 21,300 | 519,507 | ||||||
Universal Electronics, Inc. * | 22,100 | 859,911 | ||||||
Vera Bradley, Inc. (c)* | 30,900 | 684,435 | ||||||
WCI Communities, Inc. * | 9,700 | 174,988 | ||||||
William Lyon Homes, Class A * | 19,600 | 454,132 | ||||||
Wolverine World Wide, Inc. | 73,036 | 4,217,099 | ||||||
Zagg, Inc. * | 35,000 | 165,900 | ||||||
67,556,327 | ||||||||
Consumer Services 4.1% | ||||||||
AFC Enterprises, Inc. * | 35,800 | 1,595,964 | ||||||
American Public Education, Inc. * | 25,200 | 1,008,756 | ||||||
Ascent Capital Group, Inc., Class A * | 20,200 | 1,705,284 | ||||||
Biglari Holdings, Inc. * | 2,160 | 941,803 | ||||||
BJ’s Restaurants, Inc. * | 36,300 | 982,278 | ||||||
Bloomin’ Brands, Inc. * | 78,800 | 1,972,364 | ||||||
Bob Evans Farms, Inc. | 39,546 | 2,257,681 | ||||||
Boyd Gaming Corp. * | 99,000 | 1,045,440 | ||||||
Bravo Brio Restaurant Group, Inc. * | 28,900 | 431,477 | ||||||
Bridgepoint Education, Inc. * | 29,700 | 582,120 | ||||||
Bright Horizons Family Solutions, Inc. * | 16,900 | 629,525 | ||||||
Buffalo Wild Wings, Inc. * | 27,500 | 3,920,950 | ||||||
Caesars Entertainment Corp. (c)* | 56,900 | 991,198 | ||||||
Capella Education Co. * | 15,800 | 962,536 | ||||||
Career Education Corp. * | 91,200 | 499,776 | ||||||
Carriage Services, Inc. | 21,800 | 437,962 | ||||||
Carrols Restaurant Group, Inc. * | 31,300 | 181,540 | ||||||
CEC Entertainment, Inc. | 24,938 | 1,155,876 | ||||||
Churchill Downs, Inc. | 21,161 | 1,817,942 | ||||||
Chuy’s Holdings, Inc. * | 23,100 | 868,560 | ||||||
Corinthian Colleges, Inc. * | 104,400 | 223,416 | ||||||
Cracker Barrel Old Country Store, Inc. | 28,253 | 3,104,157 | ||||||
Del Frisco’s Restaurant Group, Inc. * | 15,200 | 275,120 | ||||||
Denny’s Corp. * | 132,500 | 841,375 | ||||||
Diamond Resorts International, Inc. * | 25,400 | 484,632 | ||||||
DineEquity, Inc. | 23,500 | 1,928,645 | ||||||
Diversified Restaurant Holdings, Inc. * | 15,300 | 105,723 | ||||||
Education Management Corp. (c)* | 36,600 | 559,980 | ||||||
Einstein Noah Restaurant Group, Inc. | 8,000 | 142,720 | ||||||
Fiesta Restaurant Group, Inc. * | 28,300 | 1,199,637 | ||||||
Grand Canyon Education, Inc. * | 64,700 | 3,058,369 | ||||||
Hillenbrand, Inc. | 78,000 | 2,201,160 | ||||||
Ignite Restaurant Group, Inc. * | 9,100 | 146,146 | ||||||
International Speedway Corp., Class A | 39,400 | 1,288,774 | ||||||
Interval Leisure Group, Inc. | 56,700 | 1,376,109 | ||||||
Isle of Capri Casinos, Inc. * | 27,300 | 221,403 | ||||||
ITT Educational Services, Inc. (c)* | 33,300 | 1,335,996 | ||||||
Jack in the Box, Inc. * | 64,588 | 2,627,440 | ||||||
Jamba, Inc. * | 21,560 | 246,215 | ||||||
JTH Holding, Inc., Class A (c)* | 6,500 | 128,375 | ||||||
K12, Inc. * | 38,600 | 705,608 | ||||||
Krispy Kreme Doughnuts, Inc. * | 93,300 | 2,263,458 | ||||||
Life Time Fitness, Inc. * | 62,677 | 2,846,789 | ||||||
LifeLock, Inc. * | 86,500 | 1,391,785 | ||||||
Lincoln Educational Services Corp. | 30,200 | 144,356 | ||||||
Luby’s, Inc. * | 25,200 | 193,032 | ||||||
Mac-Gray Corp. | 15,900 | 335,172 | ||||||
Marriott Vacations Worldwide Corp. * | 41,600 | 2,083,328 | ||||||
Matthews International Corp., Class A | 39,484 | 1,603,050 | ||||||
Monarch Casino & Resort, Inc. * | 11,900 | 201,229 | ||||||
Morgans Hotel Group Co. * | 38,000 | 272,080 | ||||||
Multimedia Games Holding Co., Inc. * | 41,200 | 1,339,412 | ||||||
Nathan’s Famous, Inc. * | 3,700 | 189,884 | ||||||
Noodles & Co. * | 8,800 | 385,352 | ||||||
Orient-Express Hotels Ltd., Class A * | 137,000 | 1,823,470 | ||||||
Outerwall, Inc. (c)* | 41,500 | 2,696,670 | ||||||
Papa John’s International, Inc. | 22,855 | 1,729,438 | ||||||
Pinnacle Entertainment, Inc. * | 86,685 | 2,028,429 | ||||||
Red Robin Gourmet Burgers, Inc. * | 20,200 | 1,538,836 | ||||||
Regis Corp. | 67,749 | 982,361 | ||||||
Ruby Tuesday, Inc. * | 87,200 | 517,096 | ||||||
Ruth’s Hospitality Group, Inc. | 56,600 | 689,954 | ||||||
Scientific Games Corp., Class A * | 68,100 | 1,244,868 | ||||||
SHFL Entertainment, Inc. * | 81,300 | 1,884,534 | ||||||
Sonic Corp. * | 82,829 | 1,598,600 | ||||||
Sotheby’s | 98,300 | 5,101,770 | ||||||
Speedway Motorsports, Inc. | 15,784 | 288,216 | ||||||
Steiner Leisure Ltd. * | 20,909 | 1,171,322 | ||||||
Stewart Enterprises, Inc., Class A | 105,500 | 1,393,655 | ||||||
Strayer Education, Inc. (c) | 16,400 | 648,292 | ||||||
Texas Roadhouse, Inc. | 89,296 | 2,448,496 | ||||||
The Cheesecake Factory, Inc. | 77,900 | 3,680,775 | ||||||
The Marcus Corp. | 27,300 | 392,028 | ||||||
Town Sports International Holdings, Inc. | 31,800 | 410,856 | ||||||
Universal Technical Institute, Inc. | 28,600 | 380,094 | ||||||
Vail Resorts, Inc. | 51,571 | 3,633,177 | ||||||
95,721,896 | ||||||||
Diversified Financials 3.7% | ||||||||
Apollo Investment Corp. | 322,600 | 2,751,778 | ||||||
Arlington Asset Investment Corp., Class A | 22,800 | 562,476 | ||||||
BGC Partners, Inc., Class A | 181,100 | 963,452 | ||||||
BlackRock Kelso Capital Corp. | 108,800 | 1,021,632 | ||||||
Calamos Asset Management, Inc., Class A | 25,400 | 249,428 | ||||||
California First National Bancorp | 11,100 | 198,135 | ||||||
Capital Southwest Corp. | 19,200 | 631,104 | ||||||
Cash America International, Inc. | 41,570 | 1,639,936 | ||||||
CIFC Corp. | 8,700 | 68,730 | ||||||
Cohen & Steers, Inc. (c) | 28,128 | 1,078,990 | ||||||
Consumer Portfolio Services, Inc. * | 24,200 | 162,624 | ||||||
Cowen Group, Inc., Class A * | 139,200 | 552,624 | ||||||
Credit Acceptance Corp. * | 9,900 | 1,171,170 | ||||||
DFC Global Corp. * | 57,500 | 695,750 | ||||||
Diamond Hill Investment Group | 4,100 | 452,107 |
See financial notes 23
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Encore Capital Group, Inc. * | 35,700 | 1,743,945 | ||||||
Evercore Partners, Inc., Class A | 45,100 | 2,276,197 | ||||||
Ezcorp, Inc., Class A * | 77,400 | 1,217,502 | ||||||
FBR & Co. * | 14,036 | 371,954 | ||||||
Fidus Investment Corp. (c) | 19,600 | 398,076 | ||||||
Fifth Street Finance Corp. | 195,200 | 1,991,040 | ||||||
Financial Engines, Inc. | 69,800 | 3,899,726 | ||||||
First Cash Financial Services, Inc. * | 41,600 | 2,516,384 | ||||||
Firsthand Technology Value Fund, Inc. * | 11,700 | 272,727 | ||||||
FXCM, Inc., Class A | 52,100 | 853,919 | ||||||
Gain Capital Holdings, Inc. | 20,400 | 213,588 | ||||||
GAMCO Investors, Inc., Class A | 9,700 | 693,647 | ||||||
Garrison Capital, Inc. (c) | 8,600 | 126,678 | ||||||
GFI Group, Inc. | 92,868 | 322,252 | ||||||
Gladstone Capital Corp. | 28,200 | 248,724 | ||||||
Gladstone Investment Corp. | 36,400 | 257,348 | ||||||
Golub Capital BDC, Inc. (c) | 53,300 | 938,080 | ||||||
Green Dot Corp., Class A * | 36,800 | 789,728 | ||||||
Greenhill & Co., Inc. | 41,100 | 2,108,430 | ||||||
GSV Capital Corp. (c)* | 26,500 | 405,185 | ||||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 21,000 | 257,250 | ||||||
Hercules Technology Growth Capital, Inc. | 87,200 | 1,346,368 | ||||||
HFF, Inc., Class A | 49,800 | 1,222,590 | ||||||
Horizon Technology Finance Corp. | 11,100 | 149,628 | ||||||
ICG Group, Inc. * | 54,400 | 887,264 | ||||||
Imperial Holdings, Inc. * | 24,600 | 144,156 | ||||||
INTL FCStone, Inc. * | 20,400 | 417,384 | ||||||
Investment Technology Group, Inc. * | 55,265 | 885,345 | ||||||
Janus Capital Group, Inc. | 212,700 | 2,099,349 | ||||||
JMP Group, Inc. | 20,300 | 130,123 | ||||||
KCAP Financial, Inc. (c) | 36,300 | 306,009 | ||||||
KCG Holdings, Inc., Class A * | 101,366 | 885,939 | ||||||
Ladenburg Thalmann Financial Services, Inc. * | 142,600 | 299,460 | ||||||
Main Street Capital Corp. | 55,700 | 1,693,280 | ||||||
Manning & Napier, Inc. | 20,900 | 346,940 | ||||||
MarketAxess Holdings, Inc. | 53,460 | 3,487,196 | ||||||
Marlin Business Services Corp. | 11,600 | 319,812 | ||||||
MCG Capital Corp. | 103,200 | 486,072 | ||||||
Medallion Financial Corp. | 24,600 | 373,428 | ||||||
Medley Capital Corp. | 57,300 | 798,762 | ||||||
MVC Capital, Inc. | 32,100 | 443,943 | ||||||
Nelnet, Inc., Class A | 34,400 | 1,466,472 | ||||||
New Mountain Finance Corp. | 60,700 | 860,726 | ||||||
NewStar Financial, Inc. * | 36,500 | 635,465 | ||||||
NGP Capital Resources Co. | 29,000 | 215,760 | ||||||
Nicholas Financial, Inc. | 13,000 | 208,650 | ||||||
Oppenheimer Holdings, Inc., Class A | 13,800 | 273,654 | ||||||
PennantPark Floating Rate Capital Ltd. | 21,000 | 279,090 | ||||||
PennantPark Investment Corp. | 101,100 | 1,138,386 | ||||||
PHH Corp. * | 84,763 | 2,038,550 | ||||||
PICO Holdings, Inc. * | 32,300 | 758,404 | ||||||
Piper Jaffray Cos., Inc. * | 24,739 | 887,883 | ||||||
Portfolio Recovery Associates, Inc. * | 73,329 | 4,359,409 | ||||||
Prospect Capital Corp. | 401,000 | 4,547,340 | ||||||
Pzena Investment Management, Inc., Class A | 13,700 | 98,503 | ||||||
RCS Capital Corp., Class A (c) | 7,000 | 123,200 | ||||||
Regional Management Corp. * | 6,600 | 211,266 | ||||||
Resource America, Inc., Class A | 16,500 | 142,395 | ||||||
Safeguard Scientifics, Inc. * | 27,700 | 483,365 | ||||||
Silvercrest Asset Management Group, Inc., Class A * | 10,000 | 147,700 | ||||||
Solar Capital Ltd. | 63,300 | 1,452,735 | ||||||
Solar Senior Capital Ltd. | 16,300 | 297,312 | ||||||
Stellus Capital Investment Corp. | 17,200 | 255,248 | ||||||
Stifel Financial Corp. * | 90,622 | 3,710,971 | ||||||
SWS Group, Inc. * | 39,000 | 219,570 | ||||||
TCP Capital Corp. | 43,900 | 731,813 | ||||||
The First Marblehead Corp. * | 112,400 | 107,904 | ||||||
THL Credit, Inc. | 46,600 | 757,250 | ||||||
TICC Capital Corp. | 74,500 | 745,000 | ||||||
Triangle Capital Corp. (c) | 41,800 | 1,243,968 | ||||||
Virtus Investment Partners, Inc. * | 9,600 | 1,953,792 | ||||||
Walter Investment Management Corp. * | 53,600 | 2,024,472 | ||||||
Westwood Holdings Group, Inc. | 9,500 | 506,635 | ||||||
WhiteHorse Finance, Inc. | 9,500 | 146,395 | ||||||
WisdomTree Investments, Inc. * | 143,200 | 1,990,480 | ||||||
World Acceptance Corp. * | 13,900 | 1,447,268 | ||||||
87,292,395 | ||||||||
Energy 5.8% | ||||||||
Abraxas Petroleum Corp. * | 110,200 | 318,478 | ||||||
Adams Resources & Energy, Inc. | 2,900 | 150,133 | ||||||
Alon USA Energy, Inc. | 33,200 | 401,056 | ||||||
Alpha Natural Resources, Inc. * | 314,800 | 2,203,600 | ||||||
Amyris, Inc. (c)* | 41,500 | 104,580 | ||||||
Apco Oil & Gas International, Inc. * | 12,200 | 185,684 | ||||||
Approach Resources, Inc. * | 49,700 | 1,399,055 | ||||||
Arch Coal, Inc. (c) | 298,100 | 1,263,944 | ||||||
Athlon Energy, Inc. * | 25,900 | 852,110 | ||||||
Basic Energy Services, Inc. * | 42,300 | 620,541 | ||||||
Berry Petroleum Co., Class A | 75,500 | 3,605,125 | ||||||
Bill Barrett Corp. * | 70,800 | 1,959,036 | ||||||
Bolt Technology Corp. | 11,800 | 211,102 | ||||||
Bonanza Creek Energy, Inc. * | 42,000 | 2,122,680 | ||||||
BPZ Resources, Inc. * | 198,200 | 398,382 | ||||||
Bristow Group, Inc. | 51,587 | 4,151,206 | ||||||
C&J Energy Services, Inc. * | 65,200 | 1,502,208 | ||||||
Cal Dive International, Inc. (c)* | 127,800 | 251,766 | ||||||
Callon Petroleum Co. * | 52,400 | 357,892 | ||||||
CARBO Ceramics, Inc. (c) | 28,200 | 3,534,588 | ||||||
Carrizo Oil & Gas, Inc. * | 58,400 | 2,560,256 | ||||||
Clayton Williams Energy, Inc. * | 9,900 | 770,517 | ||||||
Clean Energy Fuels Corp. (c)* | 97,500 | 1,110,525 | ||||||
Cloud Peak Energy, Inc. * | 86,000 | 1,342,460 | ||||||
Comstock Resources, Inc. | 71,200 | 1,218,232 | ||||||
Contango Oil & Gas Co. | 21,920 | 939,272 | ||||||
Crosstex Energy, Inc. | 67,900 | 2,083,851 | ||||||
Dawson Geophysical Co. * | 10,600 | 309,944 | ||||||
Delek US Holdings, Inc. | 52,900 | 1,351,595 | ||||||
Diamondback Energy, Inc. * | 27,800 | 1,435,870 | ||||||
Emerald Oil, Inc. * | 81,585 | 709,790 | ||||||
Endeavour International Corp. (c)* | 64,600 | 383,724 |
24 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy XXI (Bermuda) Ltd. | 114,300 | 3,321,558 | ||||||
EPL Oil & Gas, Inc. * | 42,600 | 1,358,088 | ||||||
Equal Energy Ltd. | 50,800 | 240,792 | ||||||
Era Group, Inc. * | 28,700 | 906,920 | ||||||
Evolution Petroleum Corp. * | 21,500 | 259,290 | ||||||
EXCO Resources, Inc. (c) | 193,500 | 1,046,835 | ||||||
Exterran Holdings, Inc. * | 82,100 | 2,343,955 | ||||||
Forest Oil Corp. * | 177,000 | 838,980 | ||||||
Forum Energy Technologies, Inc. * | 56,100 | 1,641,486 | ||||||
Frontline Ltd. (c)* | 69,000 | 146,280 | ||||||
FX Energy, Inc. * | 75,100 | 261,348 | ||||||
GasLog Ltd. | 36,400 | 541,632 | ||||||
Gastar Exploration Ltd. * | 77,800 | 336,096 | ||||||
Geospace Technologies Corp. * | 18,400 | 1,792,528 | ||||||
Global Geophysical Services, Inc. * | 24,300 | 58,077 | ||||||
Goodrich Petroleum Corp. * | 45,100 | 1,054,889 | ||||||
Green Plains Renewable Energy, Inc. | 34,200 | 551,646 | ||||||
Gulf Island Fabrication, Inc. | 21,000 | 529,620 | ||||||
GulfMark Offshore, Inc., Class A | 39,300 | 1,956,354 | ||||||
Halcon Resources Corp. (c)* | 330,221 | 1,710,545 | ||||||
Hallador Energy Co. | 33,500 | 257,950 | ||||||
Helix Energy Solutions Group, Inc. * | 153,400 | 3,629,444 | ||||||
Hercules Offshore, Inc. * | 231,200 | 1,572,160 | ||||||
Hornbeck Offshore Services, Inc. * | 51,845 | 2,865,473 | ||||||
ION Geophysical Corp. * | 187,300 | 869,072 | ||||||
Isramco, Inc. (c)* | 1,400 | 184,758 | ||||||
Jones Energy, Inc., Class A * | 15,900 | 254,559 | ||||||
Key Energy Services, Inc. * | 213,700 | 1,671,134 | ||||||
KiOR, Inc., Class A (c)* | 62,600 | 145,858 | ||||||
Knightsbridge Tankers Ltd. | 43,900 | 361,736 | ||||||
Kodiak Oil & Gas Corp. * | 384,400 | 4,985,668 | ||||||
L&L Energy, Inc. (c)* | 123,500 | 175,370 | ||||||
Magnum Hunter Resources Corp. * | 245,000 | 1,746,850 | ||||||
Matador Resources Co. * | 83,100 | 1,529,871 | ||||||
Matrix Service Co. * | 40,900 | 850,311 | ||||||
Midstates Petroleum Co., Inc. (c)* | 47,300 | 266,772 | ||||||
Miller Energy Resources, Inc. (c)* | 41,600 | 281,216 | ||||||
Mitcham Industries, Inc. * | 18,500 | 307,840 | ||||||
Natural Gas Services Group, Inc. * | 16,400 | 459,036 | ||||||
Newpark Resources, Inc. * | 126,710 | 1,615,552 | ||||||
Nordic American Tankers Ltd. (c) | 103,500 | 844,560 | ||||||
Northern Oil & Gas, Inc. * | 89,900 | 1,477,057 | ||||||
Nuverra Environmental Solutions, Inc. (c)* | 196,200 | 478,728 | ||||||
Panhandle Oil & Gas, Inc., Class A | 9,400 | 315,558 | ||||||
Parker Drilling Co. * | 181,265 | 1,305,108 | ||||||
PDC Energy, Inc. * | 50,703 | 3,438,170 | ||||||
Penn Virginia Corp. * | 76,778 | 653,381 | ||||||
PetroQuest Energy, Inc. * | 84,900 | 400,728 | ||||||
PHI, Inc. - Non Voting Shares * | 17,500 | 696,850 | ||||||
Pioneer Energy Services Corp. * | 87,600 | 735,840 | ||||||
Quicksilver Resources, Inc. (c)* | 161,200 | 344,968 | ||||||
Renewable Energy Group, Inc. * | 30,200 | 329,482 | ||||||
Rentech, Inc. | 316,700 | 541,557 | ||||||
Resolute Energy Corp. * | 96,500 | 905,170 | ||||||
REX American Resources Corp. * | 8,200 | 236,488 | ||||||
Rex Energy Corp. * | 65,900 | 1,416,850 | ||||||
RigNet, Inc. * | 16,900 | 622,934 | ||||||
Rosetta Resources, Inc. * | 88,300 | 5,292,702 | ||||||
Sanchez Energy Corp. * | 54,300 | 1,548,093 | ||||||
Scorpio Tankers, Inc. | 263,300 | 3,038,482 | ||||||
SEACOR Holdings, Inc. | 28,700 | 2,806,860 | ||||||
SemGroup Corp., Class A | 61,800 | 3,732,102 | ||||||
Ship Finance International Ltd. | 79,800 | 1,320,690 | ||||||
Solazyme, Inc. (c)* | 68,200 | 713,372 | ||||||
Stone Energy Corp. * | 72,068 | 2,512,290 | ||||||
Swift Energy Co. * | 60,701 | 832,818 | ||||||
Synergy Resources Corp. * | 72,400 | 750,064 | ||||||
T.G.C. Industries, Inc. | 21,000 | 154,770 | ||||||
Targa Resources Corp. | 46,900 | 3,637,564 | ||||||
Teekay Tankers Ltd., Class A (c) | 86,500 | 225,765 | ||||||
Tesco Corp. * | 47,700 | 819,486 | ||||||
TETRA Technologies, Inc. * | 118,074 | 1,531,420 | ||||||
Triangle Petroleum Corp. * | 97,000 | 1,025,290 | ||||||
Ur-Energy, Inc. (c)* | 173,000 | 181,650 | ||||||
Uranium Energy Corp. (c)* | 136,000 | 239,360 | ||||||
VAALCO Energy, Inc. * | 79,400 | 418,438 | ||||||
Vantage Drilling Co. * | 316,300 | 563,014 | ||||||
W&T Offshore, Inc. | 49,000 | 935,410 | ||||||
Warren Resources, Inc. * | 95,700 | 299,541 | ||||||
Western Refining, Inc. | 77,222 | 2,491,954 | ||||||
Westmoreland Coal Co. * | 21,500 | 305,515 | ||||||
Willbros Group, Inc. * | 57,300 | 559,248 | ||||||
ZaZa Energy Corp. (c)* | 92,600 | 114,824 | ||||||
135,530,902 | ||||||||
Food & Staples Retailing 1.4% | ||||||||
Arden Group, Inc., Class A | 1,800 | 234,000 | ||||||
Casey’s General Stores, Inc. | 54,700 | 3,986,536 | ||||||
Fairway Group Holdings Corp. * | 22,400 | 547,232 | ||||||
Harris Teeter Supermarkets, Inc. | 70,500 | 3,477,060 | ||||||
Ingles Markets, Inc., Class A | 16,831 | 434,408 | ||||||
Nash Finch Co. | 18,700 | 524,722 | ||||||
Natural Grocers by Vitamin Cottage, Inc. * | 12,600 | 502,740 | ||||||
PriceSmart, Inc. | 26,900 | 3,060,951 | ||||||
Rite Aid Corp. * | 1,063,800 | 5,670,054 | ||||||
Roundy’s, Inc. | 35,900 | 333,870 | ||||||
Spartan Stores, Inc. | 30,300 | 712,959 | ||||||
SUPERVALU, Inc. * | 287,800 | 2,023,234 | ||||||
Susser Holdings Corp. * | 25,700 | 1,409,388 | ||||||
The Andersons, Inc. | 27,200 | 2,017,696 | ||||||
The Chefs’ Warehouse, Inc. * | 23,600 | 565,456 | ||||||
The Pantry, Inc. * | 34,000 | 455,260 | ||||||
United Natural Foods, Inc. * | 70,882 | 5,064,519 | ||||||
Village Super Market, Inc., Class A | 11,600 | 425,256 | ||||||
Weis Markets, Inc. | 15,800 | 808,486 | ||||||
32,253,827 | ||||||||
Food, Beverage & Tobacco 1.9% | ||||||||
Alico, Inc. | 4,700 | 187,812 | ||||||
Alliance One International, Inc. * | 116,600 | 346,302 | ||||||
Annie’s, Inc. * | 19,500 | 921,375 | ||||||
B&G Foods, Inc. | 78,200 | 2,647,070 | ||||||
Boulder Brands, Inc. * | 83,800 | 1,373,482 | ||||||
Cal-Maine Foods, Inc. | 22,100 | 1,121,133 | ||||||
Calavo Growers, Inc. | 17,900 | 531,451 | ||||||
Chiquita Brands International, Inc. * | 71,002 | 734,871 |
See financial notes 25
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Coca-Cola Bottling Co. Consolidated | 6,800 | 430,576 | ||||||
Craft Brew Alliance, Inc. * | 13,900 | 225,458 | ||||||
Darling International, Inc. * | 169,200 | 3,937,284 | ||||||
Diamond Foods, Inc. (c)* | 31,900 | 778,679 | ||||||
Farmer Brothers Co. * | 9,100 | 164,346 | ||||||
Fresh Del Monte Produce, Inc. | 53,900 | 1,433,201 | ||||||
Griffin Land & Nurseries, Inc. | 3,800 | 125,400 | ||||||
Inventure Foods, Inc. * | 17,900 | 201,554 | ||||||
J&J Snack Foods Corp. | 21,600 | 1,848,312 | ||||||
John B. Sanfilippo & Son, Inc. | 10,900 | 267,922 | ||||||
Lancaster Colony Corp. | 26,700 | 2,215,833 | ||||||
Lifeway Foods, Inc. | 10,100 | 147,763 | ||||||
Limoneira Co. | 13,800 | 363,492 | ||||||
National Beverage Corp. | 15,001 | 274,668 | ||||||
Omega Protein Corp. * | 25,900 | 242,424 | ||||||
Pilgrim’s Pride Corp. * | 86,749 | 1,229,233 | ||||||
Post Holdings, Inc. * | 46,600 | 2,001,470 | ||||||
Sanderson Farms, Inc. | 34,500 | 2,180,745 | ||||||
Seaboard Corp. | 420 | 1,146,600 | ||||||
Seneca Foods Corp., Class A * | 12,400 | 363,568 | ||||||
Snyders-Lance, Inc. | 67,800 | 2,033,322 | ||||||
The Boston Beer Co., Inc., Class A * | 11,800 | 2,709,162 | ||||||
The Hain Celestial Group, Inc. * | 55,931 | 4,655,137 | ||||||
Tootsie Roll Industries, Inc. (c) | 27,936 | 893,952 | ||||||
TreeHouse Foods, Inc. * | 51,400 | 3,765,564 | ||||||
Universal Corp. | 32,945 | 1,747,073 | ||||||
Vector Group Ltd. | 90,061 | 1,456,287 | ||||||
44,702,521 | ||||||||
Health Care Equipment & Services 6.8% | ||||||||
Abaxis, Inc. | 32,200 | 1,150,506 | ||||||
ABIOMED, Inc. * | 55,200 | 1,323,696 | ||||||
Acadia Healthcare Co., Inc. * | 50,500 | 2,189,680 | ||||||
Accretive Health, Inc. * | 83,800 | 692,188 | ||||||
Accuray, Inc. (c)* | 115,500 | 779,625 | ||||||
Addus HomeCare Corp. * | 7,800 | 201,630 | ||||||
Air Methods Corp. | 55,100 | 2,408,972 | ||||||
Align Technology, Inc. * | 104,700 | 5,974,182 | ||||||
Alliance HealthCare Services, Inc. * | 7,100 | 178,991 | ||||||
Almost Family, Inc. | 11,000 | 211,530 | ||||||
Alphatec Holdings, Inc. * | 72,200 | 131,404 | ||||||
Amedisys, Inc. * | 49,200 | 800,976 | ||||||
AMN Healthcare Services, Inc. * | 65,600 | 813,440 | ||||||
AmSurg Corp. * | 46,200 | 1,981,518 | ||||||
Analogic Corp. | 17,954 | 1,655,897 | ||||||
AngioDynamics, Inc. * | 33,500 | 526,620 | ||||||
Anika Therapeutics, Inc. * | 16,200 | 483,894 | ||||||
Antares Pharma, Inc. (c)* | 160,700 | 642,800 | ||||||
ArthroCare Corp. * | 40,500 | 1,516,320 | ||||||
athenahealth, Inc. * | 52,700 | 7,035,977 | ||||||
AtriCure, Inc. * | 30,100 | 416,885 | ||||||
Atrion Corp. | 2,300 | 614,514 | ||||||
Bio-Reference Laboratories, Inc. (c)* | 34,300 | 1,111,663 | ||||||
Biolase, Inc. (c)* | 45,426 | 84,947 | ||||||
BioScrip, Inc. * | 83,100 | 582,531 | ||||||
Cantel Medical Corp. | 47,925 | 1,682,168 | ||||||
Capital Senior Living Corp. * | 40,400 | 896,072 | ||||||
Cardiovascular Systems, Inc. * | 30,100 | 913,535 | ||||||
Centene Corp. * | 79,592 | 4,469,887 | ||||||
Cerus Corp. * | 109,800 | 692,838 | ||||||
Chemed Corp. (c) | 27,200 | 1,844,704 | ||||||
Chindex International, Inc. * | 15,200 | 255,816 | ||||||
Computer Programs & Systems, Inc. | 15,700 | 895,528 | ||||||
CONMED Corp. | 39,400 | 1,429,038 | ||||||
CorVel Corp. * | 16,600 | 690,560 | ||||||
Cross Country Healthcare, Inc. * | 37,200 | 220,968 | ||||||
CryoLife, Inc. | 37,400 | 336,226 | ||||||
Cutera, Inc. * | 20,900 | 210,045 | ||||||
Cyberonics, Inc. * | 41,000 | 2,368,160 | ||||||
Cynosure, Inc., Class A * | 30,244 | 653,573 | ||||||
Derma Sciences, Inc. (c)* | 20,500 | 237,185 | ||||||
DexCom, Inc. * | 104,100 | 2,990,793 | ||||||
Emeritus Corp. * | 57,500 | 1,101,700 | ||||||
Endologix, Inc. * | 89,500 | 1,617,265 | ||||||
Exactech, Inc. * | 15,000 | 340,500 | ||||||
ExamWorks Group, Inc. * | 43,100 | 1,114,135 | ||||||
Five Star Quality Care, Inc. * | 56,200 | 284,934 | ||||||
GenMark Diagnostics, Inc. * | 51,100 | 618,310 | ||||||
Gentiva Health Services, Inc. * | 50,896 | 582,759 | ||||||
Globus Medical, Inc., Class A * | 77,900 | 1,495,680 | ||||||
Greatbatch, Inc. * | 34,900 | 1,330,388 | ||||||
Greenway Medical Technologies * | 20,600 | 419,210 | ||||||
Haemonetics Corp. * | 74,100 | 3,005,496 | ||||||
Hanger, Inc. * | 49,900 | 1,831,330 | ||||||
HealthSouth Corp. | 124,300 | 4,364,173 | ||||||
HealthStream, Inc. * | 30,800 | 1,100,176 | ||||||
Healthways, Inc. * | 48,800 | 469,944 | ||||||
HeartWare International, Inc. * | 23,400 | 1,697,904 | ||||||
HMS Holdings Corp. * | 124,800 | 2,637,024 | ||||||
ICU Medical, Inc. * | 18,800 | 1,161,840 | ||||||
Insulet Corp. * | 76,200 | 2,973,324 | ||||||
Integra LifeSciences Holdings Corp. * | 28,548 | 1,306,927 | ||||||
Invacare Corp. | 49,211 | 1,056,560 | ||||||
IPC The Hospitalist Co., Inc. * | 24,700 | 1,353,313 | ||||||
Kindred Healthcare, Inc. | 80,275 | 1,114,217 | ||||||
Landauer, Inc. | 13,300 | 643,720 | ||||||
LHC Group, Inc. * | 21,100 | 434,660 | ||||||
Magellan Health Services, Inc. * | 39,500 | 2,318,650 | ||||||
MAKO Surgical Corp. * | 60,000 | 1,788,600 | ||||||
Masimo Corp. | 69,900 | 1,790,838 | ||||||
MedAssets, Inc. * | 87,700 | 2,019,731 | ||||||
Medical Action Industries, Inc. * | 20,700 | 125,442 | ||||||
Medidata Solutions, Inc. * | 37,900 | 4,180,749 | ||||||
Merge Healthcare, Inc. * | 80,500 | 204,470 | ||||||
Meridian Bioscience, Inc. | 58,750 | 1,452,300 | ||||||
Merit Medical Systems, Inc. * | 59,000 | 943,410 | ||||||
Molina Healthcare, Inc. * | 40,400 | 1,278,256 | ||||||
MWI Veterinary Supply, Inc. * | 18,200 | 2,887,248 | ||||||
National Healthcare Corp. | 15,388 | 744,471 | ||||||
National Research Corp., Class A * | 12,500 | 219,250 | ||||||
Natus Medical, Inc. * | 42,800 | 844,444 | ||||||
Navidea Biopharmaceuticals, Inc. (c)* | 152,800 | 305,600 | ||||||
Neogen Corp. * | 51,225 | 2,367,620 | ||||||
NuVasive, Inc. * | 64,300 | 2,043,454 | ||||||
NxStage Medical, Inc. * | 85,200 | 1,130,604 | ||||||
Omnicell, Inc. * | 52,300 | 1,206,561 |
26 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
OraSure Technologies, Inc. * | 75,100 | 489,652 | ||||||
Orthofix International N.V. * | 28,200 | 577,818 | ||||||
Owens & Minor, Inc. | 91,700 | 3,431,414 | ||||||
PharMerica Corp. * | 43,100 | 636,156 | ||||||
PhotoMedex, Inc. (c)* | 18,000 | 227,520 | ||||||
Quality Systems, Inc. | 59,200 | 1,350,944 | ||||||
Quidel Corp. * | 40,300 | 995,410 | ||||||
Rochester Medical Corp. * | 14,600 | 291,708 | ||||||
Rockwell Medical, Inc. (c)* | 56,300 | 648,576 | ||||||
RTI Surgical, Inc. * | 73,900 | 206,181 | ||||||
Select Medical Holdings Corp. | 69,400 | 588,512 | ||||||
Skilled Healthcare Group, Inc., Class A * | 25,900 | 110,334 | ||||||
Solta Medical, Inc. * | 95,100 | 175,935 | ||||||
Spectranetics Corp. * | 58,400 | 1,219,976 | ||||||
STAAR Surgical Co. * | 52,900 | 700,396 | ||||||
STERIS Corp. | 84,200 | 3,804,998 | ||||||
SurModics, Inc. * | 20,400 | 481,032 | ||||||
Symmetry Medical, Inc. * | 53,900 | 436,590 | ||||||
Team Health Holdings, Inc. * | 97,900 | 4,252,776 | ||||||
TearLab Corp. * | 44,600 | 465,178 | ||||||
The Ensign Group, Inc. | 27,700 | 1,179,466 | ||||||
The Providence Service Corp. * | 17,400 | 520,086 | ||||||
Thoratec Corp. * | 81,700 | 3,528,623 | ||||||
Tornier N.V. * | 37,100 | 798,021 | ||||||
Triple-S Management Corp., Class B * | 33,800 | 601,978 | ||||||
U.S. Physical Therapy, Inc. | 19,300 | 616,056 | ||||||
Unilife Corp. (c)* | 144,000 | 436,320 | ||||||
Universal American Corp. | 51,602 | 382,887 | ||||||
USMD Holdings, Inc. (c)* | 6,300 | 175,329 | ||||||
Utah Medical Products, Inc. | 4,500 | 250,470 | ||||||
Vascular Solutions, Inc. * | 22,700 | 445,374 | ||||||
Vocera Communications, Inc. * | 30,100 | 506,583 | ||||||
Volcano Corp. * | 77,700 | 1,489,509 | ||||||
WellCare Health Plans, Inc. * | 62,600 | 4,174,168 | ||||||
West Pharmaceutical Services, Inc. | 98,930 | 4,783,265 | ||||||
Wright Medical Group, Inc. * | 57,600 | 1,564,992 | ||||||
Zeltiq Aesthetics, Inc. * | 23,000 | 298,310 | ||||||
159,047,212 | ||||||||
Household & Personal Products 0.5% | ||||||||
Central Garden & Pet Co., Class A * | 53,000 | 390,080 | ||||||
Elizabeth Arden, Inc. * | 36,298 | 1,313,625 | ||||||
Harbinger Group, Inc. * | 56,600 | 616,374 | ||||||
Inter Parfums, Inc. | 25,400 | 893,064 | ||||||
Lifevantage Corp. * | 161,800 | 354,342 | ||||||
Medifast, Inc. * | 20,200 | 470,862 | ||||||
Nature’s Sunshine Products, Inc. | 15,000 | 283,350 | ||||||
Nutraceutical International Corp. | 12,300 | 295,815 | ||||||
Oil-Dri Corp. of America | 6,887 | 244,420 | ||||||
Orchids Paper Products Co. | 7,900 | 240,950 | ||||||
Prestige Brands Holdings, Inc. * | 72,000 | 2,248,560 | ||||||
Revlon, Inc., Class A * | 18,602 | 441,797 | ||||||
Spectrum Brands Holdings, Inc. | 30,646 | 2,020,184 | ||||||
Star Scientific, Inc. (c)* | 237,700 | 430,237 | ||||||
Synutra International, Inc. * | 23,200 | 158,456 | ||||||
The Female Health Co. | 31,000 | 295,120 | ||||||
USANA Health Sciences, Inc. (c)* | 9,100 | 620,893 | ||||||
WD-40 Co. | 22,300 | 1,616,527 | ||||||
12,934,656 | ||||||||
Insurance 2.3% | ||||||||
Ambac Financial Group, Inc. * | 64,100 | 1,294,179 | ||||||
American Equity Investment Life Holding Co. | 90,564 | 1,887,354 | ||||||
AMERISAFE, Inc. | 26,300 | 1,012,550 | ||||||
AmTrust Financial Services, Inc. (c) | 43,477 | 1,667,778 | ||||||
Argo Group International Holdings Ltd. | 40,191 | 1,687,218 | ||||||
Baldwin & Lyons, Inc., Class B | 13,000 | 355,290 | ||||||
Citizens, Inc. * | 62,600 | 525,840 | ||||||
CNO Financial Group, Inc. | 316,700 | 4,934,186 | ||||||
Crawford & Co., Class B | 34,500 | 379,155 | ||||||
Donegal Group, Inc., Class A | 10,400 | 164,840 | ||||||
Eastern Insurance Holdings, Inc. | 9,100 | 222,404 | ||||||
eHealth, Inc. * | 28,600 | 1,218,932 | ||||||
EMC Insurance Group, Inc. | 6,200 | 211,048 | ||||||
Employers Holdings, Inc. | 44,900 | 1,350,143 | ||||||
Enstar Group Ltd. * | 13,594 | 1,847,832 | ||||||
FBL Financial Group, Inc., Class A | 13,868 | 620,454 | ||||||
First American Financial Corp. | 154,000 | 3,982,440 | ||||||
Fortegra Financial Corp. * | 8,200 | 60,434 | ||||||
Global Indemnity plc * | 15,655 | 385,583 | ||||||
Greenlight Capital Re Ltd., Class A * | 39,189 | 1,206,629 | ||||||
Hallmark Financial Services, Inc. * | 21,200 | 180,412 | ||||||
HCI Group, Inc. | 13,800 | 606,372 | ||||||
Health Insurance Innovations, Inc., Class A * | 6,300 | 76,482 | ||||||
Hilltop Holdings, Inc. * | 88,439 | 1,533,532 | ||||||
Horace Mann Educators Corp. | 55,678 | 1,542,281 | ||||||
Independence Holding Co. | 11,248 | 154,323 | ||||||
Infinity Property & Casualty Corp. | 16,592 | 1,137,879 | ||||||
Investors Title Co. | 1,700 | 132,838 | ||||||
Kansas City Life Insurance Co. | 5,700 | 261,630 | ||||||
Maiden Holdings Ltd. | 76,900 | 842,055 | ||||||
Meadowbrook Insurance Group, Inc. | 71,400 | 474,096 | ||||||
Montpelier Re Holdings Ltd. | 66,000 | 1,822,260 | ||||||
National Interstate Corp. | 8,594 | 224,561 | ||||||
National Western Life Insurance Co., Class A | 2,994 | 622,752 | ||||||
OneBeacon Insurance Group Ltd., Class A | 33,400 | 533,064 | ||||||
Platinum Underwriters Holdings Ltd. | 44,200 | 2,748,798 | ||||||
Primerica, Inc. | 81,200 | 3,487,540 | ||||||
RLI Corp. | 31,010 | 2,929,825 | ||||||
Safety Insurance Group, Inc. | 17,770 | 971,841 | ||||||
Selective Insurance Group, Inc. | 80,014 | 2,101,968 | ||||||
State Auto Financial Corp. | 19,600 | 372,400 | ||||||
Stewart Information Services Corp. | 30,400 | 952,128 | ||||||
Symetra Financial Corp. | 116,200 | 2,176,426 | ||||||
The Navigators Group, Inc. * | 14,970 | 841,913 | ||||||
The Phoenix Cos., Inc. * | 7,790 | 300,460 | ||||||
Third Point Reinsurance Ltd. * | 36,200 | 564,720 | ||||||
Tower Group International Ltd. | 81,830 | 297,043 | ||||||
United Fire Group, Inc. | 28,800 | 912,960 |
See financial notes 27
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Universal Insurance Holdings, Inc. | 41,800 | 327,712 | ||||||
54,144,560 | ||||||||
Materials 4.7% | ||||||||
A. Schulman, Inc. | 41,309 | 1,368,154 | ||||||
A.M. Castle & Co. * | 22,400 | 320,544 | ||||||
Advanced Emissions Solutions, Inc. * | 14,300 | 540,111 | ||||||
AEP Industries, Inc. * | 5,800 | 344,636 | ||||||
AK Steel Holding Corp. (c)* | 189,500 | 833,800 | ||||||
Allied Nevada Gold Corp. * | 148,100 | 604,248 | ||||||
AMCOL International Corp. | 39,652 | 1,272,036 | ||||||
American Pacific Corp. * | 8,400 | 382,368 | ||||||
American Vanguard Corp. | 40,900 | 1,067,490 | ||||||
Arabian American Development Co. * | 27,400 | 249,340 | ||||||
Axiall Corp. | 102,200 | 3,974,558 | ||||||
Balchem Corp. | 43,400 | 2,485,084 | ||||||
Berry Plastics Group, Inc. * | 78,900 | 1,584,312 | ||||||
Boise Cascade Co. * | 19,300 | 494,273 | ||||||
Calgon Carbon Corp. * | 77,100 | 1,538,145 | ||||||
Century Aluminum Co. * | 73,900 | 641,452 | ||||||
Chase Corp. | 8,600 | 260,236 | ||||||
Chemtura Corp. * | 141,200 | 3,459,400 | ||||||
Clearwater Paper Corp. * | 33,200 | 1,733,704 | ||||||
Coeur Mining, Inc. * | 145,450 | 1,775,945 | ||||||
Commercial Metals Co. | 166,600 | 3,058,776 | ||||||
Deltic Timber Corp. | 17,204 | 1,098,992 | ||||||
Ferro Corp. * | 103,300 | 1,325,339 | ||||||
Flotek Industries, Inc. * | 70,900 | 1,515,842 | ||||||
FutureFuel Corp. | 31,000 | 539,710 | ||||||
General Moly, Inc. * | 90,300 | 148,092 | ||||||
Globe Specialty Metals, Inc. | 90,600 | 1,589,124 | ||||||
Gold Resource Corp. (c) | 47,300 | 245,487 | ||||||
Graphic Packaging Holding Co. * | 299,215 | 2,513,406 | ||||||
GSE Holding, Inc. * | 75,700 | 213,474 | ||||||
H.B. Fuller Co. | 73,816 | 3,533,572 | ||||||
Handy & Harman Ltd. * | 7,800 | 180,102 | ||||||
Hawkins, Inc. | 15,500 | 558,155 | ||||||
Haynes International, Inc. | 17,125 | 923,038 | ||||||
Headwaters, Inc. * | 104,200 | 909,666 | ||||||
Hecla Mining Co. | 490,500 | 1,530,360 | ||||||
Horsehead Holding Corp. * | 63,600 | 922,836 | ||||||
Innophos Holdings, Inc. | 32,900 | 1,648,948 | ||||||
Innospec, Inc. | 33,000 | 1,519,980 | ||||||
Intrepid Potash, Inc. (c) | 78,000 | 1,158,300 | ||||||
Kaiser Aluminum Corp. | 27,250 | 1,838,012 | ||||||
KapStone Paper & Packaging Corp. | 59,300 | 3,081,228 | ||||||
KMG Chemicals, Inc. | 12,300 | 245,754 | ||||||
Koppers Holdings, Inc. | 30,900 | 1,375,359 | ||||||
Kraton Performance Polymers, Inc. * | 47,500 | 1,010,325 | ||||||
Landec Corp. * | 35,300 | 413,363 | ||||||
Louisiana-Pacific Corp. * | 199,000 | 3,384,990 | ||||||
LSB Industries, Inc. * | 28,000 | 1,028,160 | ||||||
Marrone Bio Innovations, Inc. * | 7,800 | 135,564 | ||||||
Materion Corp. | 29,600 | 882,376 | ||||||
Midway Gold Corp. * | 186,800 | 175,592 | ||||||
Minerals Technologies, Inc. | 50,222 | 2,844,072 | ||||||
Molycorp, Inc. (c)* | 214,300 | 1,086,501 | ||||||
Myers Industries, Inc. | 39,200 | 698,544 | ||||||
Neenah Paper, Inc. | 23,300 | 958,562 | ||||||
Noranda Aluminum Holding Corp. | 45,700 | 124,304 | ||||||
Olin Corp. | 114,600 | 2,579,646 | ||||||
Olympic Steel, Inc. | 12,200 | 333,914 | ||||||
OM Group, Inc. * | 45,000 | 1,530,000 | ||||||
Omnova Solutions, Inc. * | 65,700 | 571,590 | ||||||
P.H. Glatfelter Co. | 63,800 | 1,671,560 | ||||||
Paramount Gold & Silver Corp. (c)* | 179,300 | 216,953 | ||||||
Penford Corp. * | 13,700 | 186,320 | ||||||
PolyOne Corp. | 142,354 | 4,313,326 | ||||||
Quaker Chemical Corp. | 18,100 | 1,373,971 | ||||||
Resolute Forest Products * | 99,500 | 1,591,005 | ||||||
RTI International Metals, Inc. * | 44,666 | 1,514,177 | ||||||
Schnitzer Steel Industries, Inc., Class A | 37,800 | 1,097,712 | ||||||
Schweitzer-Mauduit International, Inc. | 45,400 | 2,809,352 | ||||||
Sensient Technologies Corp. | 72,025 | 3,754,663 | ||||||
Stepan Co. | 26,900 | 1,583,603 | ||||||
Stillwater Mining Co. * | 175,600 | 1,915,796 | ||||||
SunCoke Energy, Inc. * | 100,200 | 2,004,000 | ||||||
Taminco Corp. * | 22,500 | 449,325 | ||||||
Texas Industries, Inc. * | 31,051 | 1,667,439 | ||||||
Tredegar Corp. | 35,100 | 1,025,622 | ||||||
UFP Technologies, Inc. * | 7,500 | 172,875 | ||||||
United States Lime & Minerals, Inc. * | 2,700 | 150,012 | ||||||
Universal Stainless & Alloy Products, Inc. * | 9,500 | 307,040 | ||||||
US Concrete, Inc. * | 19,200 | 419,520 | ||||||
US Silica Holdings, Inc. (c) | 30,600 | 1,065,492 | ||||||
Walter Energy, Inc. (c) | 89,200 | 1,417,388 | ||||||
Wausau Paper Corp. | 70,400 | 823,680 | ||||||
Worthington Industries, Inc. | 75,160 | 3,046,986 | ||||||
Zep, Inc. | 32,600 | 648,414 | ||||||
Zoltek Cos., Inc. * | 37,200 | 621,240 | ||||||
110,208,362 | ||||||||
Media 1.4% | ||||||||
AH Belo Corp., Class A | 26,900 | 216,276 | ||||||
Beasley Broadcasting Group, Inc., Class A | 13,100 | 113,577 | ||||||
Belo Corp., Class A | 147,900 | 2,030,667 | ||||||
Carmike Cinemas, Inc. * | 34,100 | 780,549 | ||||||
Central European Media Enterprises Ltd., Class A * | 109,100 | 334,937 | ||||||
Crown Media Holdings, Inc., Class A * | 46,700 | 155,044 | ||||||
Cumulus Media, Inc., Class A * | 124,600 | 745,108 | ||||||
Daily Journal Corp. * | 1,300 | 192,322 | ||||||
Dex Media, Inc. * | 24,400 | 164,700 | ||||||
Digital Generation, Inc. * | 36,700 | 464,255 | ||||||
Entercom Communications Corp., Class A * | 32,400 | 284,148 | ||||||
Entravision Communications Corp., Class A | 78,600 | 529,764 | ||||||
Global Sources Ltd. * | 25,900 | 193,991 | ||||||
Gray Television, Inc. * | 71,700 | 605,865 | ||||||
Harte-Hanks, Inc. | 61,316 | 488,688 | ||||||
Hemisphere Media Group, Inc. (c)* | 12,300 | 116,358 |
28 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Journal Communications, Inc., Class A * | 71,200 | 594,520 | ||||||
Live Nation Entertainment, Inc. * | 203,300 | 3,952,152 | ||||||
Loral Space & Communications, Inc. | 18,600 | 1,327,482 | ||||||
Martha Stewart Living Omnimedia, Inc., Class A * | 36,500 | 93,440 | ||||||
MDC Partners, Inc., Class A | 40,400 | 1,245,532 | ||||||
Media General, Inc., Class A (c)* | 27,900 | 406,782 | ||||||
Meredith Corp. | 51,800 | 2,657,340 | ||||||
National CineMedia, Inc. | 81,900 | 1,434,888 | ||||||
Nexstar Broadcasting Group, Inc., Class A | 41,900 | 1,859,941 | ||||||
ReachLocal, Inc. * | 13,400 | 164,686 | ||||||
Reading International, Inc., Class A * | 23,000 | 152,260 | ||||||
Rentrak Corp. * | 14,900 | 558,601 | ||||||
Saga Communications, Inc., Class A | 6,400 | 304,704 | ||||||
Salem Communications Corp., Class A | 14,100 | 116,466 | ||||||
Scholastic Corp. | 38,469 | 1,103,676 | ||||||
Sinclair Broadcast Group, Inc., Class A | 97,500 | 3,125,850 | ||||||
The E.W. Scripps Co., Class A * | 44,100 | 874,062 | ||||||
The McClatchy Co., Class A (c)* | 77,300 | 217,986 | ||||||
The New York Times Co., Class A | 183,900 | 2,543,337 | ||||||
Valassis Communications, Inc. (c) | 55,500 | 1,518,480 | ||||||
World Wrestling Entertainment, Inc., Class A | 41,400 | 536,130 | ||||||
32,204,564 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.4% | ||||||||
ACADIA Pharmaceuticals, Inc. * | 99,900 | 2,270,727 | ||||||
Accelerate Diagnostics, Inc. (c)* | 14,800 | 189,736 | ||||||
AcelRx Pharmaceuticals, Inc. (c)* | 29,800 | 200,256 | ||||||
Achillion Pharmaceuticals, Inc. * | 137,600 | 345,376 | ||||||
Acorda Therapeutics, Inc. * | 60,200 | 1,842,722 | ||||||
Aegerion Pharmaceuticals, Inc. * | 41,100 | 3,403,902 | ||||||
Affymetrix, Inc. * | 110,900 | 784,063 | ||||||
Agios Pharmaceuticals, Inc. (c)* | 9,800 | 226,968 | ||||||
Akorn, Inc. * | 84,500 | 1,727,180 | ||||||
Albany Molecular Research, Inc. * | 33,200 | 434,920 | ||||||
Alimera Sciences, Inc. * | 24,200 | 51,788 | ||||||
Alnylam Pharmaceuticals, Inc. * | 84,800 | 4,885,328 | ||||||
AMAG Pharmaceuticals, Inc. * | 30,500 | 822,890 | ||||||
Amicus Therapeutics, Inc. (c)* | 41,400 | 87,768 | ||||||
Ampio Pharmaceuticals, Inc. (c)* | 41,300 | 365,092 | ||||||
Anacor Pharmaceuticals, Inc. * | 36,100 | 469,661 | ||||||
Aratana Therapeutics, Inc. * | 9,400 | 187,624 | ||||||
Arena Pharmaceuticals, Inc. (c)* | 306,800 | 1,346,852 | ||||||
ArQule, Inc. * | 83,300 | 187,425 | ||||||
Array BioPharma, Inc. * | 161,900 | 812,738 | ||||||
Auxilium Pharmaceuticals, Inc. * | 71,000 | 1,221,910 | ||||||
AVANIR Pharmaceuticals, Inc., Class A * | 208,300 | 843,615 | ||||||
AVEO Pharmaceuticals, Inc. * | 64,900 | 134,343 | ||||||
BioDelivery Sciences International, Inc. * | 49,500 | 259,875 | ||||||
Biotime, Inc. (c)* | 51,000 | 185,130 | ||||||
Bluebird Bio, Inc. (c)* | 9,800 | 208,250 | ||||||
Cadence Pharmaceuticals, Inc. * | 82,600 | 407,218 | ||||||
Cambrex Corp. * | 43,300 | 728,306 | ||||||
Cell Therapeutics, Inc. (c)* | 160,600 | 282,656 | ||||||
Celldex Therapeutics, Inc. * | 115,300 | 2,641,523 | ||||||
Cellular Dynamics International, Inc. * | 6,200 | 87,482 | ||||||
Cempra, Inc. * | 28,200 | 320,352 | ||||||
Cepheid, Inc. * | 98,100 | 3,994,632 | ||||||
Chelsea Therapeutics International Ltd. * | 95,600 | 270,548 | ||||||
ChemoCentryx, Inc. (c)* | 35,000 | 173,250 | ||||||
Chimerix, Inc. * | 12,100 | 183,315 | ||||||
Clovis Oncology, Inc. * | 22,800 | 1,165,308 | ||||||
Conatus Pharmaceuticals, Inc. * | 12,700 | 113,030 | ||||||
Corcept Therapeutics, Inc. * | 68,400 | 115,596 | ||||||
Cornerstone Therapeutics, Inc. * | 18,100 | 171,407 | ||||||
Coronado Biosciences, Inc. * | 38,300 | 63,961 | ||||||
Curis, Inc. * | 107,800 | 430,122 | ||||||
Cytokinetics, Inc. * | 35,300 | 212,153 | ||||||
Cytori Therapeutics, Inc. (c)* | 78,000 | 160,680 | ||||||
Dendreon Corp. (c)* | 227,500 | 584,675 | ||||||
DepoMed, Inc. * | 79,800 | 574,560 | ||||||
Durata Therapeutics, Inc. (c)* | 25,300 | 244,904 | ||||||
Dyax Corp. * | 174,200 | 1,431,924 | ||||||
Dynavax Technologies Corp. * | 245,200 | 301,596 | ||||||
Emergent Biosolutions, Inc. * | 39,100 | 763,623 | ||||||
Enanta Pharmaceuticals, Inc. * | 14,800 | 295,408 | ||||||
Endocyte, Inc. * | 40,600 | 423,458 | ||||||
Enzon Pharmaceuticals, Inc. | 58,000 | 85,840 | ||||||
Epizyme, Inc. * | 8,400 | 321,888 | ||||||
Esperion Therapeutics, Inc. * | 7,100 | 111,257 | ||||||
Exact Sciences Corp. * | 100,400 | 1,106,408 | ||||||
Exelixis, Inc. (c)* | 275,872 | 1,360,049 | ||||||
Fibrocell Science, Inc. * | 24,000 | 88,800 | ||||||
Fluidigm Corp. * | 39,800 | 1,253,700 | ||||||
Furiex Pharmaceuticals, Inc. * | 10,000 | 391,000 | ||||||
Galena Biopharma, Inc. (c)* | 147,300 | 328,479 | ||||||
Genomic Health, Inc. * | 22,800 | 682,176 | ||||||
Geron Corp. * | 195,900 | 773,805 | ||||||
GTx, Inc. (c)* | 40,400 | 69,084 | ||||||
Halozyme Therapeutics, Inc. * | 133,100 | 1,550,615 | ||||||
Harvard Bioscience, Inc. * | 30,800 | 181,412 | ||||||
Hi-Tech Pharmacal Co., Inc. | 15,100 | 650,659 | ||||||
Horizon Pharma, Inc. (c)* | 73,500 | 307,965 | ||||||
Hyperion Therapeutics, Inc. * | 14,400 | 288,432 | ||||||
Idenix Pharmaceuticals, Inc. (c)* | 142,200 | 467,838 | ||||||
ImmunoGen, Inc. * | 121,700 | 2,003,182 | ||||||
Immunomedics, Inc. * | 103,500 | 392,265 | ||||||
Impax Laboratories, Inc. * | 97,600 | 1,977,376 | ||||||
Infinity Pharmaceuticals, Inc. * | 68,300 | 925,465 | ||||||
Insmed, Inc. * | 49,300 | 702,032 | ||||||
Insys Therapeutics, Inc. * | 7,200 | 287,208 | ||||||
Intercept Pharmaceuticals, Inc. * | 11,000 | 596,640 | ||||||
InterMune, Inc. * | 115,200 | 1,623,168 | ||||||
Intrexon Corp. (c)* | 16,400 | 347,680 | ||||||
Ironwood Pharmaceuticals, Inc. * | 132,600 | 1,274,286 | ||||||
Isis Pharmaceuticals, Inc. * | 163,600 | 5,442,972 | ||||||
KaloBios Pharmaceuticals, Inc. * | 23,400 | 93,834 | ||||||
Keryx Biopharmaceuticals, Inc. * | 116,500 | 1,205,775 | ||||||
KYTHERA Biopharmaceuticals, Inc. * | 17,000 | 760,070 | ||||||
Lannett Co., Inc. * | 26,900 | 635,109 |
See financial notes 29
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Lexicon Pharmaceuticals, Inc. * | 324,100 | 777,840 | ||||||
Ligand Pharmaceuticals, Inc., Class B * | 25,400 | 1,314,704 | ||||||
Luminex Corp. * | 53,200 | 1,037,400 | ||||||
MannKind Corp. (c)* | 212,000 | 1,036,680 | ||||||
MEI Pharma, Inc. (c)* | 13,700 | 109,874 | ||||||
Merrimack Pharmaceuticals, Inc. (c)* | 129,500 | 347,060 | ||||||
MiMedx Group, Inc. (c)* | 120,000 | 636,000 | ||||||
Momenta Pharmaceuticals, Inc. * | 71,144 | 1,166,050 | ||||||
Nanosphere, Inc. * | 59,900 | 116,805 | ||||||
Nektar Therapeutics * | 162,271 | 1,543,197 | ||||||
NeoGenomics, Inc. * | 46,900 | 170,716 | ||||||
Neurocrine Biosciences, Inc. * | 99,700 | 941,168 | ||||||
NewLink Genetics Corp. (c)* | 22,400 | 375,200 | ||||||
Novavax, Inc. * | 268,000 | 830,800 | ||||||
NPS Pharmaceuticals, Inc. * | 143,000 | 4,115,540 | ||||||
Omeros Corp. (c)* | 42,600 | 426,000 | ||||||
Omthera Pharmaceutical CVR (a)* | 8,400 | — | ||||||
OncoGenex Pharmaceutical, Inc. * | 19,500 | 137,085 | ||||||
OncoMed Pharmaceuticals, Inc. (c)* | 8,200 | 114,062 | ||||||
Onconova Therapeutics, Inc. * | 8,500 | 133,790 | ||||||
Opko Health, Inc. (c)* | 269,200 | 2,697,384 | ||||||
Orexigen Therapeutics, Inc. * | 134,900 | 658,312 | ||||||
Osiris Therapeutics, Inc. (c)* | 22,300 | 296,813 | ||||||
OvaScience, Inc. * | 12,800 | 123,776 | ||||||
Pacific Biosciences of California, Inc. * | 85,600 | 351,816 | ||||||
Pacira Pharmaceuticals, Inc. * | 39,300 | 1,985,043 | ||||||
PAREXEL International Corp. * | 81,018 | 3,703,333 | ||||||
PDL Biopharma, Inc. (c) | 197,500 | 1,597,775 | ||||||
Peregrine Pharmaceuticals, Inc. (c)* | 195,500 | 252,195 | ||||||
Pernix Therapeutics Holdings * | 37,100 | 77,539 | ||||||
Portola Pharmaceuticals, Inc. * | 13,800 | 305,670 | ||||||
Pozen, Inc. * | 35,400 | 222,489 | ||||||
Progenics Pharmaceuticals, Inc. * | 84,900 | 309,036 | ||||||
Prothena Corp. plc * | 20,500 | 492,820 | ||||||
PTC Therapeutics, Inc. * | 13,700 | 246,463 | ||||||
Puma Biotechnology, Inc. * | 31,600 | 1,210,596 | ||||||
Questcor Pharmaceuticals, Inc. | 74,000 | 4,541,380 | ||||||
Raptor Pharmaceutical Corp. (c)* | 85,200 | 1,225,176 | ||||||
Receptos, Inc. * | 8,200 | 209,592 | ||||||
Regulus Therapeutics, Inc. * | 18,100 | 126,157 | ||||||
Repligen Corp. * | 42,300 | 462,762 | ||||||
Repros Therapeutics, Inc. * | 32,700 | 589,908 | ||||||
Rigel Pharmaceuticals, Inc. * | 118,400 | 365,856 | ||||||
Sagent Pharmaceuticals, Inc. * | 30,300 | 657,207 | ||||||
Sangamo BioSciences, Inc. * | 87,100 | 816,127 | ||||||
Santarus, Inc. * | 77,800 | 1,815,074 | ||||||
Sarepta Therapeutics, Inc. (c)* | 47,900 | 1,865,226 | ||||||
SciClone Pharmaceuticals, Inc. * | 78,000 | 368,940 | ||||||
Sequenom, Inc. (c)* | 166,100 | 318,912 | ||||||
SIGA Technologies, Inc. (c)* | 46,100 | 158,123 | ||||||
Spectrum Pharmaceuticals, Inc. | 89,800 | 771,382 | ||||||
Stemline Therapeutics, Inc. * | 13,000 | 361,790 | ||||||
Sucampo Pharmaceuticals, Inc., Class A * | 17,000 | 105,400 | ||||||
Sunesis Pharmaceuticals, Inc. (c)* | 38,100 | 190,881 | ||||||
Supernus Pharmaceuticals, Inc. (c)* | 31,800 | 224,826 | ||||||
Synageva BioPharma Corp. * | 27,700 | 1,407,160 | ||||||
Synergy Pharmaceuticals, Inc. * | 114,800 | 463,792 | ||||||
Synta Pharmaceuticals Corp. (c)* | 60,100 | 272,854 | ||||||
Targacept, Inc. * | 37,100 | 176,225 | ||||||
TESARO, Inc. * | 19,100 | 735,350 | ||||||
Tetraphase Pharmaceuticals, Inc. * | 16,400 | 205,492 | ||||||
TG Therapeutics, Inc. (c)* | 49,800 | 179,778 | ||||||
The Medicines Co. * | 90,208 | 3,059,855 | ||||||
TherapeuticsMD, Inc. * | 124,300 | 524,546 | ||||||
Threshold Pharmaceuticals, Inc. * | 61,700 | 267,778 | ||||||
Vanda Pharmaceuticals, Inc. * | 47,300 | 338,668 | ||||||
Verastem, Inc. * | 20,600 | 206,000 | ||||||
Vical, Inc. * | 113,400 | 141,750 | ||||||
ViroPharma, Inc. * | 95,574 | 3,710,183 | ||||||
VIVUS, Inc. (c)* | 147,300 | 1,383,147 | ||||||
Xenoport, Inc. * | 59,600 | 311,708 | ||||||
XOMA Corp. * | 113,500 | 511,885 | ||||||
ZIOPHARM Oncology, Inc. (c)* | 89,200 | 315,768 | ||||||
Zogenix, Inc. * | 133,700 | 391,741 | ||||||
127,563,725 | ||||||||
Real Estate 7.6% | ||||||||
Acadia Realty Trust | 78,536 | 2,094,555 | ||||||
AG Mortgage Investment Trust, Inc. | 41,300 | 674,842 | ||||||
Agree Realty Corp. | 18,600 | 587,202 | ||||||
Alexander & Baldwin, Inc. * | 61,400 | 2,271,800 | ||||||
Alexander’s, Inc. | 3,300 | 1,061,808 | ||||||
Altisource Residential Corp. | 60,900 | 1,618,113 | ||||||
American Assets Trust, Inc. | 48,400 | 1,611,236 | ||||||
American Capital Mortgage Investment Corp. | 84,400 | 1,612,884 | ||||||
American Realty Capital Properties, Inc. (c) | 219,600 | 2,914,092 | ||||||
American Residential Properties, Inc. * | 19,500 | 335,985 | ||||||
AmREIT, Inc., Class B | 28,100 | 494,560 | ||||||
Anworth Mortgage Asset Corp. | 206,600 | 1,014,406 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 52,600 | 847,386 | ||||||
Apollo Residential Mortgage, Inc. | 44,300 | 667,158 | ||||||
Ares Commercial Real Estate Corp. | 30,500 | 379,115 | ||||||
Armada Hoffler Properties, Inc. | 27,100 | 260,702 | ||||||
ARMOUR Residential REIT, Inc. | 535,200 | 2,205,024 | ||||||
Ashford Hospitality Trust | 87,600 | 1,144,056 | ||||||
Associated Estates Realty Corp. | 82,100 | 1,259,414 | ||||||
AV Homes, Inc. * | 15,600 | 297,960 | ||||||
Aviv REIT, Inc. | 16,400 | 416,560 | ||||||
Campus Crest Communities, Inc. | 92,100 | 921,921 | ||||||
CapLease, Inc. | 127,300 | 1,082,050 | ||||||
Capstead Mortgage Corp. | 141,200 | 1,670,396 | ||||||
Cedar Realty Trust, Inc. | 103,100 | 588,701 | ||||||
Chambers Street Properties (c) | 354,900 | 3,311,217 | ||||||
Chatham Lodging Trust | 37,900 | 714,794 | ||||||
Chesapeake Lodging Trust | 69,500 | 1,638,115 | ||||||
Colony Financial, Inc. | 91,400 | 1,849,022 | ||||||
Consolidated-Tomoka Land Co. | 8,300 | 311,416 | ||||||
Coresite Realty Corp. | 31,300 | 1,015,372 | ||||||
Cousins Properties, Inc. | 239,673 | 2,715,495 | ||||||
CubeSmart | 191,000 | 3,489,570 |
30 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
CyrusOne, Inc. | 27,100 | 528,179 | ||||||
CYS Investments, Inc. | 249,600 | 2,119,104 | ||||||
DCT Industrial Trust, Inc. | 414,400 | 3,211,600 | ||||||
DiamondRock Hospitality Co. | 278,617 | 3,173,448 | ||||||
DuPont Fabros Technology, Inc. | 90,000 | 2,236,500 | ||||||
Dynex Capital, Inc. | 76,500 | 660,960 | ||||||
EastGroup Properties, Inc. | 44,790 | 2,851,331 | ||||||
Education Realty Trust, Inc. | 161,700 | 1,477,938 | ||||||
Ellington Residential Mortgage REIT | 9,200 | 143,704 | ||||||
EPR Properties | 74,400 | 3,821,928 | ||||||
Equity One, Inc. | 85,837 | 2,069,530 | ||||||
Excel Trust, Inc. | 67,300 | 812,984 | ||||||
FelCor Lodging Trust, Inc. * | 186,400 | 1,252,608 | ||||||
First Industrial Realty Trust, Inc. | 153,700 | 2,777,359 | ||||||
First Potomac Realty Trust | 82,900 | 1,018,841 | ||||||
Forestar Group, Inc. * | 49,700 | 1,109,801 | ||||||
Franklin Street Properties Corp. | 134,065 | 1,769,658 | ||||||
Getty Realty Corp. | 39,242 | 752,662 | ||||||
Gladstone Commercial Corp. | 24,300 | 459,270 | ||||||
Glimcher Realty Trust | 206,000 | 2,111,500 | ||||||
Government Properties Income Trust | 77,900 | 1,904,655 | ||||||
Gramercy Property Trust, Inc. * | 84,600 | 386,622 | ||||||
Healthcare Realty Trust, Inc. | 136,681 | 3,281,711 | ||||||
Hersha Hospitality Trust | 288,700 | 1,636,929 | ||||||
Highwoods Properties, Inc. | 131,100 | 5,060,460 | ||||||
Hudson Pacific Properties, Inc. | 61,600 | 1,274,504 | ||||||
Inland Real Estate Corp. | 121,636 | 1,300,289 | ||||||
Invesco Mortgage Capital, Inc. | 193,200 | 2,984,940 | ||||||
Investors Real Estate Trust | 153,200 | 1,320,584 | ||||||
iStar Financial, Inc. * | 125,500 | 1,585,065 | ||||||
JAVELIN Mortgage Investment Corp. | 18,700 | 221,969 | ||||||
Kennedy-Wilson Holdings, Inc. | 80,900 | 1,621,236 | ||||||
Kite Realty Group Trust | 130,400 | 834,560 | ||||||
LaSalle Hotel Properties | 149,726 | 4,648,992 | ||||||
Lexington Realty Trust | 258,784 | 3,027,773 | ||||||
LTC Properties, Inc. | 49,867 | 1,967,253 | ||||||
Medical Properties Trust, Inc. | 230,300 | 3,003,112 | ||||||
Monmouth Real Estate Investment Corp., Class A | 60,900 | 561,498 | ||||||
National Health Investors, Inc. | 35,068 | 2,192,451 | ||||||
New Residential Investment Corp. | 360,700 | 2,384,227 | ||||||
New York Mortgage Trust, Inc. (c) | 91,500 | 587,430 | ||||||
NorthStar Realty Finance Corp. | 341,700 | 3,188,061 | ||||||
One Liberty Properties, Inc. | 18,700 | 395,318 | ||||||
Parkway Properties, Inc. | 62,100 | 1,124,631 | ||||||
Pebblebrook Hotel Trust | 90,800 | 2,742,160 | ||||||
Pennsylvania Real Estate Investment Trust | 97,612 | 1,769,706 | ||||||
PennyMac Mortgage Investment Trust | 100,400 | 2,316,228 | ||||||
Physicians Realty Trust | 16,800 | 211,008 | ||||||
Potlatch Corp. | 57,603 | 2,351,930 | ||||||
PS Business Parks, Inc. | 26,438 | 2,154,433 | ||||||
RAIT Financial Trust | 100,200 | 756,510 | ||||||
Ramco-Gershenson Properties Trust | 85,200 | 1,385,352 | ||||||
Redwood Trust, Inc. | 117,100 | 2,051,592 | ||||||
Resource Capital Corp. | 178,500 | 1,097,775 | ||||||
Retail Opportunity Investments Corp. | 102,600 | 1,518,480 | ||||||
Rexford Industrial Realty, Inc. * | 24,200 | 329,604 | ||||||
RLJ Lodging Trust | 178,100 | 4,498,806 | ||||||
Rouse Properties, Inc. | 35,900 | 725,898 | ||||||
Ryman Hospitality Properties, Inc. | 62,850 | 2,319,794 | ||||||
Sabra Health Care REIT, Inc. | 56,066 | 1,508,175 | ||||||
Saul Centers, Inc. | 10,800 | 507,600 | ||||||
Select Income REIT | 31,200 | 859,560 | ||||||
Silver Bay Realty Trust Corp. | 21,733 | 335,992 | ||||||
Sovran Self Storage, Inc. | 46,726 | 3,574,072 | ||||||
STAG Industrial, Inc. | 59,600 | 1,246,236 | ||||||
Strategic Hotels & Resorts, Inc. * | 258,900 | 2,252,430 | ||||||
Summit Hotel Properties, Inc. | 113,900 | 1,046,741 | ||||||
Sun Communities, Inc. | 51,300 | 2,286,441 | ||||||
Sunstone Hotel Investors, Inc. | 231,910 | 3,072,807 | ||||||
Tejon Ranch Co. * | 19,092 | 706,786 | ||||||
Terreno Realty Corp. | 35,600 | 632,968 | ||||||
The Geo Group, Inc. | 103,180 | 3,639,159 | ||||||
Thomas Properties Group, Inc. | 44,200 | 300,560 | ||||||
UMH Properties, Inc. | 19,000 | 191,140 | ||||||
Universal Health Realty Income Trust | 16,900 | 742,248 | ||||||
Urstadt Biddle Properties, Inc., Class A | 34,600 | 683,004 | ||||||
Washington Real Estate Investment Trust | 94,900 | 2,487,329 | ||||||
Western Asset Mortgage Capital Corp. (c) | 34,600 | 557,406 | ||||||
Whitestone REIT | 30,700 | 423,353 | ||||||
Winthrop Realty Trust | 46,700 | 549,659 | ||||||
ZAIS Financial Corp. | 8,000 | 139,200 | ||||||
177,902,244 | ||||||||
Retailing 4.0% | ||||||||
1-800-FLOWERS.COM, Inc., Class A * | 34,800 | 188,964 | ||||||
Aeropostale, Inc. (c)* | 115,000 | 1,068,350 | ||||||
America’s Car-Mart, Inc. * | 11,500 | 526,010 | ||||||
ANN, Inc. * | 69,000 | 2,439,840 | ||||||
Asbury Automotive Group, Inc. * | 44,400 | 2,133,420 | ||||||
Barnes & Noble, Inc. * | 57,600 | 813,888 | ||||||
Bebe Stores, Inc. | 51,449 | 310,237 | ||||||
Big 5 Sporting Goods Corp. | 22,600 | 427,366 | ||||||
Blue Nile, Inc. * | 19,000 | 780,330 | ||||||
Body Central Corp. * | 22,200 | 124,320 | ||||||
Brown Shoe Co., Inc. | 62,275 | 1,397,451 | ||||||
Christopher & Banks Corp. * | 51,800 | 298,886 | ||||||
Citi Trends, Inc. * | 20,100 | 295,068 | ||||||
Conn’s, Inc. * | 32,000 | 1,934,080 | ||||||
Core-Mark Holding Co., Inc. | 16,200 | 1,145,826 | ||||||
Destination Maternity Corp. | 18,400 | 574,816 | ||||||
Destination XL Group, Inc. * | 56,400 | 391,980 | ||||||
Express, Inc. * | 121,700 | 2,824,657 | ||||||
Five Below, Inc. * | 46,700 | 2,253,742 | ||||||
Francesca’s Holdings Corp. * | 62,800 | 1,129,772 | ||||||
Fred’s, Inc., Class A | 52,800 | 855,360 | ||||||
Genesco, Inc. * | 34,244 | 2,332,359 | ||||||
Gordmans Stores, Inc. | 11,600 | 114,840 | ||||||
Group 1 Automotive, Inc. | 32,400 | 2,073,600 | ||||||
Haverty Furniture Cos, Inc. | 30,300 | 842,643 |
See financial notes 31
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
hhgregg, Inc. * | 18,300 | 283,833 | ||||||
Hibbett Sports, Inc. * | 37,775 | 2,203,416 | ||||||
HSN, Inc. | 48,200 | 2,525,680 | ||||||
Jos. A. Bank Clothiers, Inc. * | 41,718 | 2,001,630 | ||||||
Kirkland’s, Inc. * | 22,400 | 397,600 | ||||||
Lithia Motors, Inc., Class A | 31,900 | 2,004,915 | ||||||
Lumber Liquidators Holdings, Inc. * | 39,600 | 4,521,924 | ||||||
MarineMax, Inc. * | 31,100 | 458,103 | ||||||
Mattress Firm Holding Corp. * | 19,200 | 577,152 | ||||||
Monro Muffler Brake, Inc. | 45,750 | 2,104,500 | ||||||
New York & Co., Inc. * | 36,400 | 186,368 | ||||||
Nutrisystem, Inc. | 39,948 | 751,022 | ||||||
Office Depot, Inc. * | 350,800 | 1,960,972 | ||||||
OfficeMax, Inc. | 129,000 | 1,932,420 | ||||||
Orbitz Worldwide, Inc. * | 41,700 | 385,308 | ||||||
Overstock.com, Inc. * | 15,500 | 363,165 | ||||||
Pacific Sunwear of California, Inc. * | 65,800 | 177,002 | ||||||
Penske Automotive Group, Inc. | 62,616 | 2,480,846 | ||||||
PetMed Express, Inc. | 29,500 | 437,780 | ||||||
Pier 1 Imports, Inc. | 137,400 | 2,868,912 | ||||||
Pool Corp. | 67,177 | 3,653,085 | ||||||
RadioShack Corp. (c)* | 136,500 | 383,565 | ||||||
Rent-A-Center, Inc. | 79,105 | 2,708,555 | ||||||
Restoration Hardware Holdings, Inc. * | 25,200 | 1,757,448 | ||||||
RetailMeNot, Inc. * | 13,400 | 437,108 | ||||||
Saks, Inc. * | 148,800 | 2,379,312 | ||||||
Sears Hometown and Outlet Stores, Inc. * | 12,300 | 342,678 | ||||||
Select Comfort Corp. * | 79,600 | 1,458,272 | ||||||
Shoe Carnival, Inc. | 20,250 | 526,297 | ||||||
Shutterfly, Inc. * | 54,300 | 2,668,302 | ||||||
Sonic Automotive, Inc., Class A | 55,500 | 1,236,540 | ||||||
Stage Stores, Inc. | 46,827 | 966,978 | ||||||
Stein Mart, Inc. | 44,300 | 654,311 | ||||||
Systemax, Inc. | 14,500 | 137,750 | ||||||
The Bon-Ton Stores, Inc. (c) | 19,300 | 220,985 | ||||||
The Buckle, Inc. | 41,664 | 2,039,036 | ||||||
The Cato Corp., Class A | 38,404 | 1,150,968 | ||||||
The Children’s Place Retail Stores, Inc. * | 32,913 | 1,796,721 | ||||||
The Finish Line, Inc., Class A | 71,619 | 1,793,340 | ||||||
The Men’s Wearhouse, Inc. | 72,000 | 3,045,600 | ||||||
The Pep Boys - Manny, Moe & Jack * | 74,800 | 967,912 | ||||||
The Wet Seal, Inc., Class A * | 121,200 | 401,172 | ||||||
Tile Shop Holdings, Inc. * | 26,300 | 587,279 | ||||||
Tilly’s, Inc., Class A * | 12,600 | 183,456 | ||||||
Trans World Entertainment Corp. | 15,100 | 65,383 | ||||||
Tuesday Morning Corp. * | 65,800 | 931,070 | ||||||
ValueVision Media, Inc., Class A * | 56,000 | 299,040 | ||||||
Vitacost.com, Inc. * | 30,300 | 239,673 | ||||||
Vitamin Shoppe, Inc. * | 43,100 | 2,021,821 | ||||||
VOXX International Corp. * | 24,200 | 375,342 | ||||||
West Marine, Inc. * | 24,500 | 299,145 | ||||||
Weyco Group, Inc. | 9,100 | 261,443 | ||||||
Winmark Corp. | 3,000 | 219,630 | ||||||
Zale Corp. * | 46,300 | 723,669 | ||||||
Zumiez, Inc. * | 30,100 | 892,164 | ||||||
93,725,403 | ||||||||
Semiconductors & Semiconductor Equipment 3.2% | ||||||||
Advanced Energy Industries, Inc. * | 57,600 | 1,202,688 | ||||||
Alpha & Omega Semiconductor Ltd. * | 28,000 | 206,080 | ||||||
Ambarella, Inc. * | 26,400 | 542,520 | ||||||
Amkor Technology, Inc. * | 116,018 | 616,056 | ||||||
ANADIGICS, Inc. * | 117,100 | 236,542 | ||||||
Applied Micro Circuits Corp. * | 104,365 | 1,216,896 | ||||||
ATMI, Inc. * | 47,654 | 1,302,860 | ||||||
Axcelis Technologies, Inc. * | 142,100 | 308,357 | ||||||
Brooks Automation, Inc. | 93,731 | 903,567 | ||||||
Cabot Microelectronics Corp. * | 32,800 | 1,341,192 | ||||||
Cavium, Inc. * | 73,200 | 2,950,692 | ||||||
CEVA, Inc. * | 33,700 | 482,921 | ||||||
Cirrus Logic, Inc. * | 92,700 | 2,079,261 | ||||||
Cohu, Inc. | 32,200 | 307,832 | ||||||
Cypress Semiconductor Corp. * | 209,600 | 1,945,088 | ||||||
Diodes, Inc. * | 54,281 | 1,314,686 | ||||||
DSP Group, Inc. * | 31,400 | 233,930 | ||||||
Entegris, Inc. * | 197,500 | 2,044,125 | ||||||
Entropic Communications, Inc. * | 143,000 | 612,040 | ||||||
Exar Corp. * | 58,500 | 674,505 | ||||||
FormFactor, Inc. * | 76,873 | 401,277 | ||||||
GSI Technology, Inc. * | 27,000 | 189,540 | ||||||
GT Advanced Technologies, Inc. * | 168,600 | 1,264,500 | ||||||
Hittite Microwave Corp. * | 46,609 | 2,977,849 | ||||||
Inphi Corp. * | 37,200 | 548,328 | ||||||
Integrated Device Technology, Inc. * | 187,900 | 1,999,256 | ||||||
Integrated Silicon Solutions, Inc. * | 37,900 | 408,562 | ||||||
Intermolecular, Inc. * | 19,000 | 110,200 | ||||||
International Rectifier Corp. * | 102,800 | 2,676,912 | ||||||
Intersil Corp., Class A | 180,300 | 2,012,148 | ||||||
IXYS Corp. | 32,400 | 376,812 | ||||||
Kopin Corp. * | 100,300 | 368,101 | ||||||
Lattice Semiconductor Corp. * | 170,200 | 873,126 | ||||||
LTX-Credence Corp. * | 66,300 | 406,419 | ||||||
M/A-COM Technology Solutions Holdings, Inc. * | 15,100 | 260,777 | ||||||
MaxLinear, Inc., Class A * | 30,400 | 263,264 | ||||||
Micrel, Inc. | 67,505 | 621,046 | ||||||
Microsemi Corp. * | 132,419 | 3,327,689 | ||||||
Mindspeed Technologies, Inc. (c)* | 64,400 | 186,116 | ||||||
MKS Instruments, Inc. | 77,299 | 2,291,142 | ||||||
Monolithic Power Systems, Inc. | 52,400 | 1,668,416 | ||||||
MoSys, Inc. * | 58,300 | 256,520 | ||||||
Nanometrics, Inc. * | 32,200 | 598,276 | ||||||
NeoPhotonics Corp. * | 26,800 | 190,012 | ||||||
NVE Corp. * | 6,400 | 341,568 | ||||||
OmniVision Technologies, Inc. * | 77,873 | 1,091,001 | ||||||
PDF Solutions, Inc. * | 35,700 | 820,029 | ||||||
Peregrine Semiconductor Corp. * | 37,700 | 306,878 | ||||||
Pericom Semiconductor Corp. * | 33,500 | 270,680 | ||||||
Photronics, Inc. * | 85,200 | 715,680 | ||||||
PLX Technology, Inc. * | 59,600 | 359,984 | ||||||
PMC-Sierra, Inc. * | 290,900 | 1,707,583 | ||||||
Power Integrations, Inc. | 41,362 | 2,375,833 | ||||||
Rambus, Inc. * | 167,900 | 1,467,446 | ||||||
RF Micro Devices, Inc. * | 405,000 | 2,126,250 | ||||||
Rubicon Technology, Inc. (c)* | 23,500 | 202,100 | ||||||
Rudolph Technologies, Inc. * | 46,700 | 495,020 |
32 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Semtech Corp. * | 96,029 | 2,987,462 | ||||||
Sigma Designs, Inc. * | 43,000 | 233,920 | ||||||
Silicon Image, Inc. * | 113,600 | 596,400 | ||||||
Spansion, Inc., Class A * | 67,400 | 806,778 | ||||||
SunEdison, Inc. * | 380,400 | 3,537,720 | ||||||
SunPower Corp. (c)* | 59,400 | 1,793,286 | ||||||
Supertex, Inc. | 14,800 | 377,548 | ||||||
Synaptics, Inc. * | 47,700 | 2,218,050 | ||||||
Tessera Technologies, Inc. | 76,490 | 1,454,840 | ||||||
TriQuint Semiconductor, Inc. * | 232,700 | 1,845,311 | ||||||
Ultra Clean Holdings, Inc. * | 31,900 | 296,989 | ||||||
Ultratech, Inc. * | 40,000 | 951,600 | ||||||
Veeco Instruments, Inc. * | 57,200 | 1,670,812 | ||||||
75,848,894 | ||||||||
Software & Services 9.1% | ||||||||
Accelrys, Inc. * | 80,500 | 752,675 | ||||||
ACI Worldwide, Inc. * | 57,215 | 3,153,691 | ||||||
Actuate Corp. * | 67,700 | 542,277 | ||||||
Acxiom Corp. * | 105,376 | 3,501,644 | ||||||
Advent Software, Inc. | 46,528 | 1,561,014 | ||||||
American Software, Inc., Class A | 30,400 | 266,000 | ||||||
Angie’s List, Inc. (c)* | 60,200 | 848,218 | ||||||
Aspen Technology, Inc. * | 135,400 | 5,176,342 | ||||||
AVG Technologies NV * | 34,100 | 685,410 | ||||||
Bankrate, Inc. * | 66,600 | 1,121,544 | ||||||
Bazaarvoice, Inc. * | 68,500 | 642,530 | ||||||
Blackbaud, Inc. | 65,869 | 2,371,284 | ||||||
Blackhawk Network Holdings, Inc. * | 16,400 | 374,904 | ||||||
Blucora, Inc. * | 58,400 | 1,379,992 | ||||||
Bottomline Technologies, Inc. * | 53,200 | 1,671,544 | ||||||
Brightcove, Inc. * | 40,100 | 612,327 | ||||||
BroadSoft, Inc. * | 42,200 | 1,380,784 | ||||||
CACI International, Inc., Class A * | 32,900 | 2,368,142 | ||||||
Callidus Software, Inc. * | 55,900 | 578,565 | ||||||
Carbonite, Inc. * | 15,500 | 205,220 | ||||||
Cardtronics, Inc. * | 64,600 | 2,535,550 | ||||||
Cass Information Systems, Inc. | 15,640 | 896,641 | ||||||
ChannelAdvisor Corp. * | 8,500 | 296,310 | ||||||
CIBER, Inc. * | 100,000 | 325,000 | ||||||
CommVault Systems, Inc. * | 68,300 | 5,332,864 | ||||||
Computer Task Group, Inc. | 20,200 | 346,026 | ||||||
comScore, Inc. * | 50,900 | 1,360,048 | ||||||
Comverse, Inc. * | 32,070 | 1,012,771 | ||||||
Constant Contact, Inc. * | 44,200 | 1,145,222 | ||||||
Convergys Corp. | 149,800 | 2,957,052 | ||||||
Cornerstone OnDemand, Inc. * | 57,500 | 2,723,775 | ||||||
CoStar Group, Inc. * | 41,075 | 7,269,864 | ||||||
CSG Systems International, Inc. | 51,100 | 1,423,646 | ||||||
Cvent, Inc. * | 9,200 | 285,108 | ||||||
Cyan, Inc. * | 11,400 | 53,694 | ||||||
Dealertrack Technologies, Inc. * | 62,036 | 2,313,943 | ||||||
Demand Media, Inc. * | 51,600 | 246,648 | ||||||
Demandware, Inc. * | 22,900 | 1,132,405 | ||||||
Dice Holdings, Inc. * | 64,900 | 478,962 | ||||||
Digimarc Corp. | 10,300 | 216,918 | ||||||
Digital River, Inc. * | 52,800 | 941,952 | ||||||
E2open, Inc. * | 21,000 | 472,500 | ||||||
EarthLink, Inc. | 147,381 | 745,748 | ||||||
Ebix, Inc. (c) | 44,300 | 504,134 | ||||||
eGain Corp. * | 18,600 | 213,528 | ||||||
Ellie Mae, Inc. * | 37,500 | 1,083,750 | ||||||
Envestnet, Inc. * | 32,200 | 1,168,860 | ||||||
EPAM Systems, Inc. * | 31,200 | 1,169,064 | ||||||
EPIQ Systems, Inc. | 48,700 | 728,552 | ||||||
ePlus, Inc. | 5,200 | 282,672 | ||||||
Euronet Worldwide, Inc. * | 71,036 | 3,082,962 | ||||||
EVERTEC, Inc. | 42,100 | 987,666 | ||||||
ExlService Holdings, Inc. * | 46,500 | 1,344,315 | ||||||
Fair Isaac Corp. | 51,100 | 2,927,008 | ||||||
FleetMatics Group plc * | 23,300 | 739,775 | ||||||
Forrester Research, Inc. | 19,717 | 765,217 | ||||||
Gigamon, Inc. * | 11,100 | 341,658 | ||||||
Global Cash Access Holdings, Inc. * | 91,800 | 761,940 | ||||||
Global Eagle Entertainment, Inc. * | 30,600 | 311,508 | ||||||
Glu Mobile, Inc. (c)* | 92,400 | 314,160 | ||||||
Gogo, Inc. (c)* | 15,700 | 292,648 | ||||||
Guidance Software, Inc. * | 31,700 | 277,058 | ||||||
Guidewire Software, Inc. * | 70,300 | 3,565,616 | ||||||
Heartland Payment Systems, Inc. | 51,800 | 2,095,310 | ||||||
Higher One Holdings, Inc. * | 43,800 | 348,210 | ||||||
iGATE Corp. * | 49,640 | 1,580,538 | ||||||
Imperva, Inc. * | 28,800 | 1,104,192 | ||||||
Infoblox, Inc. * | 71,400 | 3,173,730 | ||||||
Interactive Intelligence Group, Inc. * | 22,100 | 1,358,045 | ||||||
Internap Network Services Corp. * | 75,700 | 550,339 | ||||||
IntraLinks Holdings, Inc. * | 61,900 | 643,141 | ||||||
j2 Global, Inc. | 65,428 | 3,597,231 | ||||||
Jive Software, Inc. * | 56,400 | 614,196 | ||||||
Limelight Networks, Inc. * | 90,900 | 174,528 | ||||||
Lionbridge Technologies, Inc. * | 82,500 | 359,700 | ||||||
Liquidity Services, Inc. (c)* | 35,400 | 924,294 | ||||||
LivePerson, Inc. * | 78,700 | 735,058 | ||||||
LogMeIn, Inc. * | 34,700 | 1,120,810 | ||||||
Luxoft Holding, Inc. * | 6,700 | 195,774 | ||||||
Manhattan Associates, Inc. * | 27,747 | 2,955,333 | ||||||
ManTech International Corp., Class A | 34,500 | 963,930 | ||||||
Marchex, Inc., Class B | 28,600 | 255,112 | ||||||
Marin Software, Inc. * | 13,100 | 151,829 | ||||||
Marketo, Inc. * | 9,900 | 334,224 | ||||||
MAXIMUS, Inc. | 98,696 | 4,781,821 | ||||||
Mentor Graphics Corp. | 135,967 | 3,002,151 | ||||||
MicroStrategy, Inc., Class A * | 13,662 | 1,666,627 | ||||||
Millennial Media, Inc. (c)* | 50,300 | 353,609 | ||||||
Mitek Systems, Inc. * | 31,700 | 167,693 | ||||||
Model N, Inc. (c)* | 11,600 | 104,284 | ||||||
ModusLink Global Solutions, Inc. * | 58,700 | 241,844 | ||||||
MoneyGram International, Inc. * | 29,500 | 622,745 | ||||||
Monotype Imaging Holdings, Inc. | 54,500 | 1,537,990 | ||||||
Monster Worldwide, Inc. * | 166,500 | 719,280 | ||||||
Move, Inc. * | 57,400 | 974,078 | ||||||
Net Element International, Inc. (c)* | 18,500 | 87,505 | ||||||
NetScout Systems, Inc. * | 52,000 | 1,472,640 | ||||||
NIC, Inc. | 92,200 | 2,269,964 | ||||||
OpenTable, Inc. * | 33,100 | 2,299,788 | ||||||
Pegasystems, Inc. | 26,600 | 1,012,396 | ||||||
Perficient, Inc. * | 47,700 | 862,893 | ||||||
Planet Payment, Inc. * | 60,600 | 164,832 | ||||||
PRGX Global, Inc. * | 41,500 | 297,970 |
See financial notes 33
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Progress Software Corp. * | 82,820 | 2,150,007 | ||||||
Proofpoint, Inc. * | 31,100 | 984,004 | ||||||
PROS Holdings, Inc. * | 31,300 | 1,106,455 | ||||||
PTC, Inc. * | 173,200 | 4,801,104 | ||||||
QAD, Inc., Class A | 8,800 | 131,296 | ||||||
Qlik Technologies, Inc. * | 125,300 | 3,175,102 | ||||||
Qualys, Inc. * | 21,200 | 440,960 | ||||||
QuinStreet, Inc. * | 44,900 | 399,161 | ||||||
Rally Software Development Corp. * | 9,800 | 262,934 | ||||||
RealNetworks, Inc. * | 28,257 | 216,731 | ||||||
RealPage, Inc. * | 66,300 | 1,626,339 | ||||||
Reis, Inc. * | 11,900 | 214,081 | ||||||
Responsys, Inc. * | 56,000 | 915,040 | ||||||
Rosetta Stone, Inc. * | 14,700 | 223,146 | ||||||
Sapiens International Corp. N.V. | 19,400 | 125,130 | ||||||
Sapient Corp. * | 157,363 | 2,487,909 | ||||||
SciQuest, Inc. * | 32,500 | 709,800 | ||||||
SeaChange International, Inc. * | 46,700 | 662,673 | ||||||
ServiceSource International, Inc. * | 87,100 | 942,422 | ||||||
Shutterstock, Inc. * | 10,600 | 750,480 | ||||||
Silver Spring Networks, Inc. * | 8,400 | 183,456 | ||||||
Spark Networks, Inc. * | 25,100 | 179,716 | ||||||
SPS Commerce, Inc. * | 21,400 | 1,458,410 | ||||||
SS&C Technologies Holdings, Inc. * | 83,000 | 3,261,900 | ||||||
Stamps.com, Inc. * | 19,400 | 881,536 | ||||||
Support.com, Inc. * | 64,900 | 289,454 | ||||||
Sykes Enterprises, Inc. * | 54,193 | 1,014,493 | ||||||
Synchronoss Technologies, Inc. * | 41,500 | 1,436,730 | ||||||
Syntel, Inc. | 22,900 | 1,965,736 | ||||||
Take-Two Interactive Software, Inc. * | 115,004 | 2,059,722 | ||||||
Tangoe, Inc. * | 44,200 | 844,220 | ||||||
TechTarget, Inc. (c)* | 59,900 | 300,698 | ||||||
TeleCommunication Systems, Inc., Class A * | 67,800 | 154,584 | ||||||
TeleNav, Inc. * | 22,100 | 160,225 | ||||||
TeleTech Holdings, Inc. * | 28,400 | 751,748 | ||||||
Textura, Corp. * | 7,500 | 287,475 | ||||||
The Active Network, Inc. * | 77,000 | 1,111,880 | ||||||
The Hackett Group, Inc. | 40,800 | 290,496 | ||||||
The Ultimate Software Group, Inc. * | 39,800 | 6,148,304 | ||||||
TiVo, Inc. * | 182,303 | 2,422,807 | ||||||
Travelzoo, Inc. * | 9,800 | 210,994 | ||||||
Tremor Video, Inc. * | 14,600 | 140,744 | ||||||
Trulia, Inc. * | 38,905 | 1,555,033 | ||||||
Tyler Technologies, Inc. * | 44,900 | 4,342,279 | ||||||
Unisys Corp. * | 65,050 | 1,714,068 | ||||||
United Online, Inc. * | 140,487 | 1,213,808 | ||||||
Unwired Planet, Inc. * | 122,695 | 198,766 | ||||||
ValueClick, Inc. * | 107,400 | 2,063,154 | ||||||
VASCO Data Security International, Inc. * | 40,200 | 301,902 | ||||||
Verint Systems, Inc. * | 75,105 | 2,742,835 | ||||||
VirnetX Holding Corp. (c)* | 60,000 | 1,304,400 | ||||||
Virtusa Corp. * | 29,100 | 904,428 | ||||||
VistaPrint N.V. (c)* | 46,500 | 2,513,325 | ||||||
Vocus, Inc. * | 28,300 | 244,795 | ||||||
Vringo, Inc. (c)* | 95,600 | 269,592 | ||||||
Web.com Group, Inc. * | 59,800 | 1,611,610 | ||||||
WebMD Health Corp. * | 50,000 | 1,761,000 | ||||||
WEX, Inc. * | 55,976 | 5,225,360 | ||||||
XO Group, Inc. * | 39,800 | 552,424 | ||||||
Xoom Corp. * | 10,400 | 309,400 | ||||||
Yelp, Inc. * | 42,400 | 2,872,600 | ||||||
YuMe, Inc. (c)* | 12,100 | 99,704 | ||||||
Zillow, Inc., Class A * | 34,900 | 2,779,087 | ||||||
Zix Corp. * | 88,900 | 362,712 | ||||||
213,266,863 | ||||||||
Technology Hardware & Equipment 4.8% | ||||||||
ADTRAN, Inc. | 84,500 | 1,984,060 | ||||||
Aeroflex Holding Corp. * | 26,600 | 206,150 | ||||||
Agilysys, Inc. * | 24,000 | 282,000 | ||||||
Alliance Fiber Optic Products, Inc. (c) | 16,400 | 304,548 | ||||||
Anaren, Inc. * | 15,800 | 394,684 | ||||||
Anixter International, Inc. * | 38,600 | 3,299,914 | ||||||
ARRIS Group, Inc. * | 166,060 | 2,965,832 | ||||||
Aruba Networks, Inc. * | 164,100 | 3,078,516 | ||||||
Audience, Inc. * | 13,700 | 156,454 | ||||||
Aviat Networks, Inc. * | 81,200 | 167,272 | ||||||
Avid Technology, Inc. * | 39,705 | 295,802 | ||||||
Badger Meter, Inc. | 20,203 | 1,050,758 | ||||||
Bel Fuse, Inc., Class B | 14,100 | 296,664 | ||||||
Belden, Inc. | 62,800 | 4,223,928 | ||||||
Benchmark Electronics, Inc. * | 81,294 | 1,847,813 | ||||||
Black Box Corp. | 24,092 | 603,264 | ||||||
CalAmp Corp. * | 50,100 | 1,178,853 | ||||||
Calix, Inc. * | 58,800 | 597,996 | ||||||
Checkpoint Systems, Inc. * | 61,644 | 1,049,181 | ||||||
Ciena Corp. * | 144,700 | 3,367,169 | ||||||
Cognex Corp. | 125,118 | 3,909,937 | ||||||
Coherent, Inc. | 34,651 | 2,293,550 | ||||||
Comtech Telecommunications Corp. | 24,500 | 735,490 | ||||||
Control4 Corp. * | 7,000 | 115,150 | ||||||
Cray, Inc. * | 56,400 | 1,261,104 | ||||||
CTS Corp. | 46,000 | 856,520 | ||||||
Daktronics, Inc. | 50,700 | 606,372 | ||||||
Datalink Corp. * | 27,300 | 280,371 | ||||||
Digi International, Inc. * | 33,900 | 341,712 | ||||||
DTS, Inc. * | 24,942 | 498,840 | ||||||
Electro Rent Corp. | 25,200 | 457,128 | ||||||
Electro Scientific Industries, Inc. | 39,800 | 476,804 | ||||||
Electronics for Imaging, Inc. * | 68,609 | 2,353,975 | ||||||
Emulex Corp. * | 129,190 | 972,801 | ||||||
Extreme Networks, Inc. * | 135,200 | 724,672 | ||||||
Fabrinet * | 40,400 | 676,296 | ||||||
FARO Technologies, Inc. * | 25,200 | 1,197,000 | ||||||
FEI Co. | 59,700 | 5,318,076 | ||||||
Finisar Corp. * | 133,200 | 3,064,932 | ||||||
Fusion-io, Inc. * | 108,400 | 1,165,300 | ||||||
Globecomm Systems, Inc. * | 34,300 | 481,229 | ||||||
GSI Group, Inc. * | 40,000 | 399,200 | ||||||
Harmonic, Inc. * | 160,700 | 1,174,717 | ||||||
Hutchinson Technology, Inc. * | 33,400 | 124,248 | ||||||
Imation Corp. * | 40,200 | 186,930 | ||||||
Immersion Corp. * | 38,200 | 485,904 | ||||||
Infinera Corp. * | 164,500 | 1,679,545 | ||||||
Insight Enterprises, Inc. * | 65,500 | 1,380,085 |
34 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
InterDigital, Inc. | 59,200 | 2,294,000 | ||||||
InvenSense, Inc. (c)* | 80,900 | 1,366,401 | ||||||
Itron, Inc. * | 56,400 | 2,406,588 | ||||||
Ixia * | 80,464 | 1,140,980 | ||||||
KEMET Corp. * | 59,100 | 335,097 | ||||||
KVH Industries, Inc. * | 19,900 | 273,426 | ||||||
Littelfuse, Inc. | 31,800 | 2,703,954 | ||||||
Maxwell Technologies, Inc. * | 43,400 | 325,500 | ||||||
Measurement Specialties, Inc. * | 23,400 | 1,304,082 | ||||||
Mercury Systems, Inc. * | 44,600 | 411,212 | ||||||
Mesa Laboratories, Inc. | 3,600 | 250,668 | ||||||
Methode Electronics, Inc. | 56,700 | 1,450,386 | ||||||
MTS Systems Corp. | 23,775 | 1,552,983 | ||||||
Multi-Fineline Electronix, Inc. * | 12,100 | 162,261 | ||||||
Neonode, Inc. (c)* | 51,200 | 276,992 | ||||||
NETGEAR, Inc. * | 55,500 | 1,596,180 | ||||||
Newport Corp. * | 57,700 | 915,699 | ||||||
Numerex Corp., Class A * | 16,600 | 196,046 | ||||||
Oplink Communications, Inc. * | 26,200 | 478,150 | ||||||
OSI Systems, Inc. * | 30,100 | 2,192,484 | ||||||
Park Electrochemical Corp. | 29,300 | 821,865 | ||||||
ParkerVision, Inc. (a)(c)* | 117,300 | 321,402 | ||||||
PC Connection, Inc. | 12,500 | 249,875 | ||||||
PC-Tel, Inc. | 25,400 | 233,934 | ||||||
Plantronics, Inc. | 61,493 | 2,640,509 | ||||||
Plexus Corp. * | 48,962 | 1,874,265 | ||||||
Procera Networks, Inc. * | 28,000 | 396,200 | ||||||
QLogic Corp. * | 130,100 | 1,606,735 | ||||||
Quantum Corp. * | 321,700 | 398,908 | ||||||
Radisys Corp. * | 38,000 | 114,760 | ||||||
RealD, Inc. * | 60,400 | 417,968 | ||||||
Richardson Electronics Ltd. | 18,900 | 217,728 | ||||||
Rofin-Sinar Technologies, Inc. * | 40,036 | 1,050,945 | ||||||
Rogers Corp. * | 24,367 | 1,485,412 | ||||||
Ruckus Wireless, Inc. * | 62,100 | 900,450 | ||||||
Sanmina Corp. * | 119,200 | 1,735,552 | ||||||
ScanSource, Inc. * | 40,578 | 1,560,630 | ||||||
ShoreTel, Inc. * | 83,900 | 667,005 | ||||||
Silicon Graphics International Corp. * | 53,400 | 681,918 | ||||||
Sonus Networks, Inc. * | 309,258 | 927,774 | ||||||
Speed Commerce, Inc. * | 57,100 | 209,557 | ||||||
Super Micro Computer, Inc. * | 45,400 | 631,968 | ||||||
Symmetricom, Inc. * | 58,000 | 415,860 | ||||||
SYNNEX Corp. * | 38,600 | 2,366,180 | ||||||
Tellabs, Inc. | 540,100 | 1,317,844 | ||||||
TESSCO Technologies, Inc. | 7,400 | 262,182 | ||||||
TTM Technologies, Inc. * | 72,500 | 634,375 | ||||||
Ubiquiti Networks, Inc. | 17,300 | 667,434 | ||||||
Uni-Pixel, Inc. (c)* | 14,400 | 236,880 | ||||||
Universal Display Corp. * | 58,400 | 1,862,960 | ||||||
ViaSat, Inc. * | 56,419 | 3,730,424 | ||||||
Viasystems Group, Inc. * | 7,000 | 105,000 | ||||||
Vishay Precision Group, Inc. * | 16,500 | 270,600 | ||||||
Westell Technologies, Inc., Class A * | 71,100 | 255,249 | ||||||
Zygo Corp. * | 23,500 | 362,840 | ||||||
113,835,023 | ||||||||
Telecommunication Services 0.7% | ||||||||
8x8, Inc. * | 108,600 | 1,244,556 | ||||||
Atlantic Tele-Network, Inc. | 12,600 | 698,292 | ||||||
Boingo Wireless, Inc. * | 21,700 | 147,126 | ||||||
Cbeyond, Inc. * | 37,400 | 240,856 | ||||||
Cincinnati Bell, Inc. * | 303,745 | 868,710 | ||||||
Cogent Communications Group, Inc. | 68,300 | 2,399,379 | ||||||
Consolidated Communications Holdings, Inc. | 57,625 | 1,073,554 | ||||||
Fairpoint Communications, Inc. (c)* | 28,900 | 269,926 | ||||||
General Communication, Inc., Class A * | 50,300 | 478,353 | ||||||
Hawaiian Telcom Holdco, Inc. * | 14,100 | 374,778 | ||||||
HickoryTech Corp. | 17,900 | 239,502 | ||||||
IDT Corp., Class B | 23,500 | 514,415 | ||||||
inContact, Inc. * | 76,100 | 577,599 | ||||||
Inteliquent, Inc. | 46,400 | 596,240 | ||||||
Iridium Communications, Inc. * | 91,500 | 551,745 | ||||||
Leap Wireless International, Inc. * | 77,700 | 1,250,970 | ||||||
Lumos Networks Corp. | 20,100 | 442,401 | ||||||
magicJack VocalTec Ltd. * | 26,400 | 297,792 | ||||||
NII Holdings, Inc. (c)* | 245,200 | 843,488 | ||||||
NTELOS Holdings Corp. | 20,150 | 383,656 | ||||||
ORBCOMM, Inc. * | 46,400 | 279,792 | ||||||
Premiere Global Services, Inc. * | 70,000 | 630,700 | ||||||
PTGi Holding, Inc. | 16,700 | 58,784 | ||||||
Shenandoah Telecommunications Co. | 34,800 | 965,004 | ||||||
Straight Path Communications, Inc., Class B * | �� | 11,750 | 64,155 | |||||
Towerstream Corp. (c)* | 103,600 | 248,640 | ||||||
USA Mobility, Inc. | 36,500 | 544,580 | ||||||
Vonage Holdings Corp. * | 218,500 | 815,005 | ||||||
17,099,998 | ||||||||
Transportation 1.7% | ||||||||
Air Transport Services Group, Inc. * | 72,100 | 522,004 | ||||||
Allegiant Travel Co. | 21,600 | 2,252,232 | ||||||
Arkansas Best Corp. | 36,672 | 1,003,713 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 37,400 | 1,384,922 | ||||||
Celadon Group, Inc. | 26,900 | 498,726 | ||||||
Echo Global Logistics, Inc. * | 25,400 | 467,614 | ||||||
Forward Air Corp. | 42,982 | 1,739,911 | ||||||
Hawaiian Holdings, Inc. (c)* | 75,200 | 620,400 | ||||||
Heartland Express, Inc. | 67,500 | 969,300 | ||||||
Hub Group, Inc., Class A * | 53,492 | 1,964,761 | ||||||
International Shipholding Corp. | 7,300 | 181,186 | ||||||
JetBlue Airways Corp. * | 334,400 | 2,370,896 | ||||||
Knight Transportation, Inc. | 88,400 | 1,500,148 | ||||||
Marten Transport Ltd. | 37,700 | 665,028 | ||||||
Matson, Inc. | 60,800 | 1,647,072 | ||||||
Pacer International, Inc. * | 46,900 | 374,262 | ||||||
Park-Ohio Holdings Corp. * | 13,800 | 571,458 | ||||||
Patriot Transportation Holding, Inc. * | 8,700 | 321,639 | ||||||
Quality Distribution, Inc. * | 29,300 | 301,204 | ||||||
Republic Airways Holdings, Inc. * | 74,100 | 872,898 | ||||||
Roadrunner Transportation Systems, Inc. * | 29,200 | 773,800 | ||||||
Saia, Inc. * | 35,100 | 1,141,803 | ||||||
SkyWest, Inc. | 73,612 | 1,107,125 |
See financial notes 35
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Spirit Airlines, Inc. * | 86,000 | 3,710,900 | ||||||
Swift Transportation Co. (c)* | 119,500 | 2,603,905 | ||||||
Ultrapetrol Bahamas Ltd. (c)* | 33,800 | 121,680 | ||||||
Universal Truckload Services, Inc. | 7,300 | 194,618 | ||||||
US Airways Group, Inc. * | 276,500 | 6,074,705 | ||||||
Uti Worldwide, Inc. | 129,300 | 1,965,360 | ||||||
Werner Enterprises, Inc. | 64,643 | 1,497,132 | ||||||
Wesco Aircraft Holdings, Inc. * | 58,700 | 1,075,384 | ||||||
XPO Logistics, Inc. (c)* | 41,900 | 845,542 | ||||||
YRC Worldwide, Inc. (c)* | 13,400 | 127,032 | ||||||
41,468,360 | ||||||||
Utilities 3.0% | ||||||||
ALLETE, Inc. | 56,890 | 2,874,652 | ||||||
American States Water Co. | 55,500 | 1,580,640 | ||||||
Artesian Resources Corp., Class A | 10,500 | 240,450 | ||||||
Atlantic Power Corp. | 168,900 | 758,361 | ||||||
Avista Corp. | 85,912 | 2,387,494 | ||||||
Black Hills Corp. | 64,298 | 3,261,195 | ||||||
California Water Service Group | 67,074 | 1,462,213 | ||||||
Chesapeake Utilities Corp. | 13,800 | 750,858 | ||||||
Cleco Corp. | 88,500 | 4,101,090 | ||||||
Connecticut Water Service, Inc. | 15,000 | 480,750 | ||||||
Consolidated Water Co., Ltd. | 19,500 | 293,280 | ||||||
Delta Natural Gas Co., Inc. | 9,300 | 207,576 | ||||||
Dynegy, Inc. * | 142,600 | 2,770,718 | ||||||
El Paso Electric Co. | 58,716 | 2,065,042 | ||||||
Genie Energy Ltd., Class B * | 18,600 | 192,138 | ||||||
IDACORP, Inc. | 72,800 | 3,756,480 | ||||||
MGE Energy, Inc. | 33,960 | 1,912,288 | ||||||
Middlesex Water Co. | 26,200 | 543,126 | ||||||
New Jersey Resources Corp. | 60,000 | 2,761,800 | ||||||
Northwest Natural Gas Co. | 39,895 | 1,732,640 | ||||||
NorthWestern Corp. | 54,012 | 2,475,910 | ||||||
NRG Yield, Inc., Class A * | 32,100 | 1,136,982 | ||||||
Ormat Technologies, Inc. | 24,000 | 625,680 | ||||||
Otter Tail Corp. | 51,209 | 1,527,564 | ||||||
Piedmont Natural Gas Co., Inc. | 108,000 | 3,687,120 | ||||||
PNM Resources, Inc. | 114,000 | 2,726,880 | ||||||
Portland General Electric Co. | 109,900 | 3,154,130 | ||||||
Pure Cycle Corp. * | 24,500 | 163,660 | ||||||
SJW Corp. | 24,600 | 694,458 | ||||||
South Jersey Industries, Inc. | 45,860 | 2,730,963 | ||||||
Southwest Gas Corp. | 66,296 | 3,597,221 | ||||||
The Empire District Electric Co. | 62,100 | 1,396,629 | ||||||
The Laclede Group, Inc. | 46,577 | 2,192,379 | ||||||
UIL Holdings Corp. | 81,310 | 3,132,061 | ||||||
Unitil Corp. | 22,100 | 667,862 | ||||||
UNS Energy Corp. | 59,117 | 2,925,109 | ||||||
WGL Holdings, Inc. | 74,800 | 3,366,748 | ||||||
York Water Co. | 17,000 | 352,070 | ||||||
70,686,217 | ||||||||
Total Common Stock | ||||||||
(Cost $1,537,930,364) | 2,275,773,764 | |||||||
Rights 0.0% of net assets | ||||||||
Banks 0.0% | ||||||||
Peapack-Gladstone Financial Corp. (a)(b)* | 12,200 | — | ||||||
Consumer Services 0.0% | ||||||||
Caesars Entertainment Corp. (a)(b)* | 56,900 | — | ||||||
Total Rights | ||||||||
(Cost $—) | — | |||||||
Warrants 0.0% of net assets | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. (a)(b)* | 24,500 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.9% of net assets | ||||||||
Time Deposits 3.8% | ||||||||
Bank of Tokyo Mitsubishi | ||||||||
0.03%, 11/01/13 | 17,919,737 | 17,919,737 | ||||||
DNB | ||||||||
0.03%, 11/01/13 | 70,794,629 | 70,794,629 | ||||||
88,714,366 | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/19/13 (d)(e) | 3,650,000 | 3,649,976 | ||||||
Total Short-Term Investments | ||||||||
(Cost $92,364,342) | 92,364,342 | |||||||
End of Investments. | ||||||||
36 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 3.9% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 90,885,937 | 90,885,937 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $90,885,937) | 90,885,937 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13 tax basis cost of the fund’s investments was $1,639,221,728 and the unrealized appreciation and depreciation were $829,827,183 and ($100,910,805), respectively, with a net unrealized appreciation of $728,916,378.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $0 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $88,014,699. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/20/13 | 650 | 71,357,000 | 3,155,461 |
See financial notes 37
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .9% | Common Stock | 1,956,313,008 | 3,083,859,605 | ||||||||
0 | .0% | Warrants | 2 | 5 | ||||||||
2 | .9% | Short-Term Investments | 92,110,148 | 92,110,148 | ||||||||
99 | .8% | Total Investments | 2,048,423,158 | 3,175,969,758 | ||||||||
0 | .6% | Collateral Invested for Securities on Loan | 19,098,378 | 19,098,378 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (11,681,245 | ) | ||||||||
100 | .0% | Net Assets | 3,183,386,891 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 96.9% of net assets | ||||||||
Automobiles & Components 1.2% | ||||||||
Allison Transmission Holdings, Inc. | 9,600 | 233,760 | ||||||
American Axle & Manufacturing Holdings, Inc. * | 8,300 | 154,463 | ||||||
Autoliv, Inc. | 14,700 | 1,311,681 | ||||||
BorgWarner, Inc. | 18,300 | 1,887,279 | ||||||
Cooper Tire & Rubber Co. | 8,900 | 231,489 | ||||||
Dana Holding Corp. | 24,800 | 486,080 | ||||||
Delphi Automotive plc | 46,100 | 2,636,920 | ||||||
Dorman Products, Inc. | 5,000 | 243,050 | ||||||
Drew Industries, Inc. | 5,400 | 271,404 | ||||||
Federal-Mogul Corp. * | 12,900 | 264,321 | ||||||
Ford Motor Co. | 621,236 | 10,629,348 | ||||||
General Motors Co. * | 148,400 | 5,483,380 | ||||||
Gentex Corp. | 20,600 | 606,464 | ||||||
Harley-Davidson, Inc. | 35,000 | 2,241,400 | ||||||
Johnson Controls, Inc. | 108,200 | 4,993,430 | ||||||
Lear Corp. | 14,000 | 1,083,460 | ||||||
Modine Manufacturing Co. * | 12,100 | 161,172 | ||||||
Standard Motor Products, Inc. | 7,500 | 271,200 | ||||||
Stoneridge, Inc. * | 13,100 | 167,156 | ||||||
Strattec Security Corp. | 1,500 | 60,780 | ||||||
Tenneco, Inc. * | 8,780 | 465,955 | ||||||
Tesla Motors, Inc. * | 12,800 | 2,047,232 | ||||||
The Goodyear Tire & Rubber Co. | 40,500 | 849,690 | ||||||
Thor Industries, Inc. | 7,500 | 435,075 | ||||||
TRW Automotive Holdings Corp. * | 18,500 | 1,389,535 | ||||||
Visteon Corp. * | 8,000 | 616,720 | ||||||
Winnebago Industries, Inc. * | 7,400 | 219,484 | ||||||
39,441,928 | ||||||||
Banks 3.3% | ||||||||
1st Source Corp. | 5,528 | 173,469 | ||||||
Ameris Bancorp * | 6,348 | 116,168 | ||||||
Arrow Financial Corp. | 3,390 | 87,496 | ||||||
Associated Banc-Corp. | 25,000 | 406,500 | ||||||
Astoria Financial Corp. | 19,300 | 254,953 | ||||||
BancFirst Corp. | 2,300 | 127,811 | ||||||
BancorpSouth, Inc. | 10,112 | 223,475 | ||||||
Bank Mutual Corp. | 18,268 | 116,185 | ||||||
Bank of Hawaii Corp. | 6,500 | 376,870 | ||||||
Bank of the Ozarks, Inc. | 5,600 | 277,088 | ||||||
BankUnited, Inc. | 10,300 | 316,931 | ||||||
Banner Corp. | 3,171 | 121,322 | ||||||
BB&T Corp. | 110,958 | 3,769,243 | ||||||
BBCN Bancorp, Inc. | 19,100 | 283,253 | ||||||
Beneficial Mutual Bancorp, Inc. * | 24,500 | 238,875 | ||||||
Berkshire Bancorp, Inc. | 3,600 | 27,792 | ||||||
Berkshire Hills Bancorp, Inc. | 8,000 | 202,960 | ||||||
BOK Financial Corp. | 3,740 | 229,000 | ||||||
Boston Private Financial Holdings, Inc. | 12,129 | 138,149 | ||||||
Brookline Bancorp, Inc. | 11,705 | 103,823 | ||||||
Bryn Mawr Bank Corp. | 3,400 | 94,724 | ||||||
Camco Financial Corp. * | 700 | 4,340 | ||||||
Camden National Corp. | 2,500 | 100,875 | ||||||
Capital Bank Financial Corp., Class A * | 3,500 | 77,770 | ||||||
Capital City Bank Group, Inc. * | 6,875 | 84,563 | ||||||
CapitalSource, Inc. | 32,900 | 430,332 | ||||||
Capitol Federal Financial, Inc. | 21,963 | 278,271 | ||||||
Cardinal Financial Corp. | 3,700 | 61,050 | ||||||
Cathay General Bancorp | 9,200 | 226,596 | ||||||
Central Pacific Financial Corp. | 5,169 | 95,213 | ||||||
Century Bancorp, Inc., Class A | 800 | 26,000 | ||||||
Chemical Financial Corp. | 5,383 | 157,668 | ||||||
CIT Group, Inc. * | 31,200 | 1,502,592 | ||||||
City Holding Co. | 4,800 | 218,400 | ||||||
City National Corp. | 7,000 | 504,770 | ||||||
Columbia Banking System, Inc. | 9,951 | 255,641 | ||||||
Comerica, Inc. | 27,659 | 1,197,635 | ||||||
Commerce Bancshares, Inc. | 10,984 | 505,374 | ||||||
Community Bank System, Inc. | 6,400 | 232,384 | ||||||
Community Trust Bancorp, Inc. | 2,487 | 105,921 | ||||||
Cullen/Frost Bankers, Inc. | 9,100 | 644,189 | ||||||
CVB Financial Corp. | 19,411 | 282,236 | ||||||
Dime Community Bancshares, Inc. | 6,875 | 112,475 | ||||||
Eagle Bancorp, Inc. * | 7,880 | 208,426 | ||||||
East West Bancorp, Inc. | 19,600 | 660,324 | ||||||
EverBank Financial Corp. | 15,400 | 232,848 | ||||||
F.N.B. Corp. | 19,661 | 245,959 | ||||||
Fifth Third Bancorp | 139,114 | 2,647,339 | ||||||
First BanCorp * | 26,579 | 147,513 | ||||||
First Busey Corp. | 20,200 | 104,434 | ||||||
First Citizens BancShares, Inc., Class A | 900 | 190,557 | ||||||
First Commonwealth Financial Corp. | 13,504 | 117,350 | ||||||
First Financial Bancorp | 10,339 | 160,461 | ||||||
First Financial Bankshares, Inc. | 4,100 | 252,191 | ||||||
First Financial Corp. | 2,600 | 89,804 | ||||||
First Financial Holdings, Inc. | 5,584 | 334,649 |
38 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
First Horizon National Corp. | 32,816 | 349,490 | ||||||
First Interstate BancSystem, Inc. | 8,900 | 223,479 | ||||||
First Merchants Corp. | 9,041 | 169,971 | ||||||
First Midwest Bancorp, Inc. | 15,825 | 263,170 | ||||||
First Niagara Financial Group, Inc. | 50,265 | 554,423 | ||||||
First Republic Bank | 19,600 | 1,000,972 | ||||||
First United Corp. * | 2,200 | 18,040 | ||||||
Firstmerit Corp. | 24,489 | 550,023 | ||||||
Flagstar Bancorp, Inc. * | 8,060 | 130,653 | ||||||
Flushing Financial Corp. | 6,800 | 136,612 | ||||||
Fulton Financial Corp. | 28,262 | 345,079 | ||||||
Glacier Bancorp, Inc. | 10,497 | 290,032 | ||||||
Great Southern Bancorp, Inc. | 3,400 | 95,472 | ||||||
Hancock Holding Co. | 12,344 | 404,636 | ||||||
Hawthorn Bancshares, Inc. | 911 | 12,581 | ||||||
Heartland Financial USA, Inc. | 2,500 | 66,225 | ||||||
Heritage Financial Corp. | 6,135 | 98,958 | ||||||
Home Bancshares, Inc. | 11,500 | 389,620 | ||||||
Home Loan Servicing Solutions Ltd. | 10,400 | 245,544 | ||||||
Hudson City Bancorp, Inc. | 69,231 | 621,694 | ||||||
Huntington Bancshares, Inc. | 127,599 | 1,122,871 | ||||||
IBERIABANK Corp. | 3,875 | 226,416 | ||||||
Independent Bank Corp. | 3,000 | 107,640 | ||||||
Independent Bank Corp., Michigan * | 431 | 4,189 | ||||||
International Bancshares Corp. | 7,784 | 177,864 | ||||||
Investors Bancorp, Inc. | 9,600 | 227,616 | ||||||
Kearny Financial Corp. * | 9,000 | 94,500 | ||||||
KeyCorp | 148,290 | 1,858,074 | ||||||
Lakeland Financial Corp. | 3,700 | 131,683 | ||||||
M&T Bank Corp. | 20,549 | 2,312,379 | ||||||
MainSource Financial Group, Inc. | 5,535 | 89,778 | ||||||
MB Financial, Inc. | 8,133 | 241,550 | ||||||
Merchants Bancshares, Inc. | 3,650 | 109,427 | ||||||
MGIC Investment Corp. * | 45,600 | 371,184 | ||||||
MutualFirst Financial, Inc. | 2,000 | 34,000 | ||||||
National Bank Holdings Corp., Class A | 7,800 | 163,800 | ||||||
National Penn Bancshares, Inc. | 17,675 | 183,290 | ||||||
Nationstar Mortgage Holdings, Inc. * | 5,500 | 282,260 | ||||||
NBT Bancorp, Inc. | 11,500 | 280,255 | ||||||
New York Community Bancorp, Inc. | 64,985 | 1,053,407 | ||||||
North Valley Bancorp * | 300 | 5,670 | ||||||
Northfield Bancorp, Inc. | 15,765 | 203,841 | ||||||
Northrim BanCorp, Inc. | 4,281 | 107,453 | ||||||
Northwest Bancshares, Inc. | 19,350 | 270,707 | ||||||
OceanFirst Financial Corp. | 7,150 | 125,769 | ||||||
Ocwen Financial Corp. * | 18,620 | 1,047,003 | ||||||
OFG Bancorp | 8,163 | 120,894 | ||||||
Old National Bancorp | 16,800 | 244,272 | ||||||
Oritani Financial Corp. | 6,000 | 97,320 | ||||||
PacWest Bancorp | 6,000 | 228,300 | ||||||
Park National Corp. | 2,845 | 225,381 | ||||||
People’s United Financial, Inc. | 49,587 | 715,540 | ||||||
Peoples Financial Corp. | 3,000 | 37,470 | ||||||
Pinnacle Financial Partners, Inc. * | 6,475 | 200,725 | ||||||
Popular, Inc. * | 14,720 | 371,680 | ||||||
Premier Financial Bancorp, Inc. | 2,645 | 31,793 | ||||||
PrivateBancorp, Inc. | 8,000 | 194,880 | ||||||
Prosperity Bancshares, Inc. | 8,800 | 549,560 | ||||||
Provident Financial Holdings, Inc. | 4,350 | 65,946 | ||||||
Provident Financial Services, Inc. | 14,017 | 262,679 | ||||||
Radian Group, Inc. | 24,500 | 356,965 | ||||||
Regions Financial Corp. | 218,562 | 2,104,752 | ||||||
Renasant Corp. | 5,410 | 155,159 | ||||||
Republic Bancorp, Inc., Class A | 6,521 | 150,113 | ||||||
Roma Financial Corp. * | 5,900 | 114,814 | ||||||
S&T Bancorp, Inc. | 4,400 | 107,888 | ||||||
S.Y. Bancorp, Inc. | 3,670 | 110,137 | ||||||
Sandy Spring Bancorp, Inc. | 5,900 | 144,491 | ||||||
Seacoast Banking Corp. of Florida * | 19,680 | 44,870 | ||||||
Shore Bancshares, Inc. * | 1,250 | 11,438 | ||||||
Signature Bank * | 6,700 | 682,194 | ||||||
Simmons First National Corp., Class A | 4,000 | 130,960 | ||||||
Southside Bancshares, Inc. | 4,515 | 123,260 | ||||||
Southwest Bancorp, Inc. * | 7,800 | 124,878 | ||||||
State Bank Financial Corp. | 6,200 | 105,772 | ||||||
StellarOne Corp. | 6,000 | 139,680 | ||||||
Sterling Bancorp * | 9,018 | 133,016 | ||||||
Sterling Financial Corp. | 9,700 | 280,912 | ||||||
Suffolk Bancorp * | 4,600 | 89,930 | ||||||
Sun Bancorp, Inc. * | 19,318 | 63,749 | ||||||
SunTrust Banks, Inc. | 83,142 | 2,796,897 | ||||||
Susquehanna Bancshares, Inc. | 27,568 | 324,889 | ||||||
SVB Financial Group * | 6,400 | 612,992 | ||||||
Synovus Financial Corp. | 154,300 | 501,475 | ||||||
Taylor Capital Group, Inc. * | 8,900 | 204,700 | ||||||
TCF Financial Corp. | 22,900 | 347,622 | ||||||
Texas Capital Bancshares, Inc. * | 5,400 | 281,070 | ||||||
TFS Financial Corp. * | 19,500 | 236,730 | ||||||
The First of Long Island Corp. | 4,000 | 157,400 | ||||||
The PNC Financial Services Group, Inc. | 84,032 | 6,178,873 | ||||||
Timberland Bancorp, Inc. | 2,000 | 17,740 | ||||||
Tompkins Financial Corp. | 4,024 | 198,464 | ||||||
TowneBank | 3,800 | 55,328 | ||||||
Tree.com, Inc. | 4,444 | 131,142 | ||||||
TriCo Bancshares | 5,400 | 136,566 | ||||||
TrustCo Bank Corp. | 20,657 | 138,815 | ||||||
Trustmark Corp. | 8,562 | 232,544 | ||||||
U.S. Bancorp | 288,731 | 10,786,990 | ||||||
UMB Financial Corp. | 5,274 | 310,744 | ||||||
Umpqua Holdings Corp. | 15,743 | 257,713 | ||||||
Union First Market Bankshares Corp. | 7,050 | 170,046 | ||||||
United Bankshares, Inc. (c) | 7,400 | 218,892 | ||||||
United Community Banks, Inc. * | 11,678 | 182,060 | ||||||
Valley National Bancorp (c) | 30,542 | 297,785 | ||||||
ViewPoint Financial Group, Inc. | 4,900 | 106,869 | ||||||
Walker & Dunlop, Inc. * | 9,700 | 125,906 | ||||||
Washington Federal, Inc. | 14,942 | 340,379 | ||||||
Washington Trust Bancorp, Inc. | 3,600 | 118,404 | ||||||
Webster Financial Corp. | 15,963 | 445,208 | ||||||
Wells Fargo & Co. | 761,906 | 32,525,767 | ||||||
WesBanco, Inc. | 4,456 | 131,006 | ||||||
Westamerica Bancorp | 5,200 | 267,696 | ||||||
Western Alliance Bancorp * | 16,600 | 351,090 | ||||||
Wilshire Bancorp, Inc. | 9,900 | 83,853 | ||||||
Wintrust Financial Corp. | 5,800 | 252,358 |
See financial notes 39
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
WSFS Financial Corp. | 2,000 | 140,020 | ||||||
Zions Bancorp | 27,525 | 780,884 | ||||||
105,949,872 | ||||||||
Capital Goods 8.1% | ||||||||
3M Co. | 102,400 | 12,887,040 | ||||||
A.O. Smith Corp. | 11,300 | 583,645 | ||||||
AAON, Inc. | 6,853 | 185,100 | ||||||
AAR Corp. | 5,000 | 146,400 | ||||||
Aceto Corp. | 7,900 | 126,005 | ||||||
Actuant Corp., Class A | 10,280 | 386,117 | ||||||
Acuity Brands, Inc. | 6,000 | 603,060 | ||||||
AECOM Technology Corp. * | 16,100 | 511,658 | ||||||
Aegion Corp. * | 4,300 | 88,150 | ||||||
Aerovironment, Inc. * | 4,200 | 113,862 | ||||||
AGCO Corp. | 15,462 | 902,672 | ||||||
Air Lease Corp. | 13,100 | 385,140 | ||||||
Aircastle Ltd. | 14,100 | 266,067 | ||||||
Alamo Group, Inc. | 2,500 | 117,975 | ||||||
Albany International Corp., Class A | 3,918 | 144,222 | ||||||
Alliant Techsystems, Inc. | 4,437 | 483,056 | ||||||
Altra Holdings, Inc. | 4,300 | 130,591 | ||||||
American Railcar Industries, Inc. (c) | 2,800 | 114,688 | ||||||
American Science & Engineering, Inc. | 2,000 | 131,560 | ||||||
American Superconductor Corp. * | 5,200 | 11,336 | ||||||
American Woodmark Corp. * | 4,000 | 135,680 | ||||||
AMETEK, Inc. | 38,325 | 1,833,085 | ||||||
Ampco-Pittsburgh Corp. | 4,500 | 82,845 | ||||||
Apogee Enterprises, Inc. | 6,600 | 206,448 | ||||||
Applied Industrial Technologies, Inc. | 6,525 | 308,698 | ||||||
Armstrong World Industries, Inc. * | 5,500 | 293,865 | ||||||
Astec Industries, Inc. | 5,700 | 192,717 | ||||||
Astronics Corp. * | 3,438 | 168,668 | ||||||
Astronics Corp., Class B * | 687 | 33,175 | ||||||
AZZ, Inc. | 3,500 | 157,150 | ||||||
B/E Aerospace, Inc. * | 15,500 | 1,257,980 | ||||||
Barnes Group, Inc. | 6,600 | 234,564 | ||||||
Beacon Roofing Supply, Inc. * | 6,600 | 229,086 | ||||||
Blount International, Inc. * | 15,900 | 193,662 | ||||||
Brady Corp., Class A | 6,400 | 186,816 | ||||||
Breeze-Eastern Corp. * | 500 | 4,663 | ||||||
Briggs & Stratton Corp. | 6,500 | 119,210 | ||||||
Builders FirstSource, Inc. * | 17,100 | 126,711 | ||||||
Carlisle Cos., Inc. | 9,200 | 668,656 | ||||||
Caterpillar, Inc. | 102,600 | 8,552,736 | ||||||
Chart Industries, Inc. * | 4,400 | 472,868 | ||||||
Chicago Bridge & Iron Co., N.V. | 16,400 | 1,215,076 | ||||||
CIRCOR International, Inc. | 3,750 | 276,637 | ||||||
CLARCOR, Inc. | 7,300 | 426,904 | ||||||
Coleman Cable, Inc. | 4,500 | 110,700 | ||||||
Colfax Corp. * | 14,200 | 794,632 | ||||||
Columbus McKinnon Corp. * | 4,300 | 111,843 | ||||||
Comfort Systems USA, Inc. | 7,700 | 143,451 | ||||||
Crane Co. | 8,000 | 508,000 | ||||||
Cubic Corp. | 4,500 | 236,250 | ||||||
Cummins, Inc. | 27,200 | 3,454,944 | ||||||
Curtiss-Wright Corp. | 6,600 | 328,548 | ||||||
Danaher Corp. | 94,300 | 6,798,087 | ||||||
Deere & Co. | 61,000 | 4,992,240 | ||||||
DigitalGlobe, Inc. * | 12,322 | 392,086 | ||||||
Donaldson Co., Inc. | 22,100 | 875,381 | ||||||
Dover Corp. | 26,100 | 2,395,719 | ||||||
Ducommun, Inc. * | 3,200 | 79,552 | ||||||
DXP Enterprises, Inc. * | 1,700 | 156,230 | ||||||
Dycom Industries, Inc. * | 5,300 | 157,145 | ||||||
Eaton Corp. plc | 74,877 | 5,283,321 | ||||||
EMCOR Group, Inc. | 9,400 | 348,364 | ||||||
Emerson Electric Co. | 112,200 | 7,514,034 | ||||||
Encore Wire Corp. | 2,500 | 123,825 | ||||||
EnerSys, Inc. | 7,500 | 497,625 | ||||||
Engility Holdings, Inc. * | 4,116 | 127,473 | ||||||
EnPro Industries, Inc. * | 3,000 | 179,010 | ||||||
ESCO Technologies, Inc. | 3,900 | 140,712 | ||||||
Esterline Technologies Corp. * | 4,400 | 352,704 | ||||||
Exelis, Inc. | 27,400 | �� | 451,826 | |||||
Fastenal Co. | 42,300 | 2,106,540 | ||||||
Federal Signal Corp. * | 12,800 | 175,232 | ||||||
Flow International Corp. * | 17,000 | 67,830 | ||||||
Flowserve Corp. | 23,300 | 1,618,651 | ||||||
Fluor Corp. | 26,400 | 1,959,408 | ||||||
Fortune Brands Home & Security, Inc. | 26,000 | 1,120,080 | ||||||
Foster Wheeler AG * | 15,200 | 410,248 | ||||||
Franklin Electric Co., Inc. | 5,600 | 211,960 | ||||||
FreightCar America, Inc. | 2,500 | 55,600 | ||||||
FuelCell Energy, Inc. (c)* | 29,400 | 39,396 | ||||||
Furmanite Corp. * | 7,200 | 81,000 | ||||||
GATX Corp. | 6,600 | 340,230 | ||||||
GenCorp, Inc. * | 11,600 | 194,880 | ||||||
Generac Holdings, Inc. | 10,000 | 493,500 | ||||||
General Cable Corp. | 6,700 | 220,631 | ||||||
General Dynamics Corp. | 52,100 | 4,513,423 | ||||||
General Electric Co. | 1,614,166 | 42,194,299 | ||||||
Gibraltar Industries, Inc. * | 6,300 | 100,863 | ||||||
Graco, Inc. | 8,812 | 680,815 | ||||||
GrafTech International Ltd. * | 16,600 | 147,740 | ||||||
Granite Construction, Inc. | 8,150 | 263,652 | ||||||
Great Lakes Dredge & Dock Corp. | 11,600 | 94,192 | ||||||
Griffon Corp. | 15,100 | 189,203 | ||||||
H&E Equipment Services, Inc. * | 6,800 | 170,204 | ||||||
Hardinge, Inc. | 4,800 | 70,992 | ||||||
Harsco Corp. | 11,300 | 315,044 | ||||||
HD Supply Holdings, Inc. * | 8,300 | 167,577 | ||||||
HEICO Corp. | 8,375 | 448,732 | ||||||
Hexcel Corp. * | 14,500 | 613,495 | ||||||
Honeywell International, Inc. | 122,862 | 10,655,821 | ||||||
Hubbell, Inc., Class B | 7,900 | 849,566 | ||||||
Huntington Ingalls Industries, Inc. | 6,972 | 498,847 | ||||||
Hyster-Yale Materials Handling, Inc. | 2,300 | 180,412 | ||||||
IDEX Corp. | 13,925 | 962,914 | ||||||
II-VI, Inc. * | 13,000 | 221,780 | ||||||
Illinois Tool Works, Inc. | 64,900 | 5,113,471 | ||||||
Ingersoll-Rand plc | 43,300 | 2,924,049 | ||||||
Integrated Electrical Services, Inc. * | 5,105 | 23,789 | ||||||
ITT Corp. | 13,500 | 536,355 | ||||||
Jacobs Engineering Group, Inc. * | 20,800 | 1,265,056 | ||||||
John Bean Technologies Corp. | 4,983 | 135,438 | ||||||
Joy Global, Inc. | 16,350 | 927,862 |
40 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Kadant, Inc. | 3,001 | 107,436 | ||||||
Kaman Corp. | 3,000 | 111,540 | ||||||
KBR, Inc. | 24,000 | 828,960 | ||||||
Kennametal, Inc. | 11,300 | 519,800 | ||||||
Kratos Defense & Security Solutions, Inc. * | 10,180 | 86,326 | ||||||
L-3 Communications Holdings, Inc. | 13,600 | 1,366,120 | ||||||
L.B. Foster Co., Class A | 1,400 | 65,450 | ||||||
Lawson Products, Inc. * | 5,500 | 72,160 | ||||||
Layne Christensen Co. * | 4,500 | 87,030 | ||||||
Lennox International, Inc. | 6,771 | 528,544 | ||||||
Lincoln Electric Holdings, Inc. | 13,600 | 941,664 | ||||||
Lindsay Corp. | 1,800 | 136,818 | ||||||
Lockheed Martin Corp. | 41,952 | 5,593,880 | ||||||
Lydall, Inc. * | 5,500 | 100,210 | ||||||
Magnetek, Inc. * | 1,650 | 29,898 | ||||||
Masco Corp. | 53,300 | 1,126,229 | ||||||
MasTec, Inc. * | 8,550 | 273,343 | ||||||
Meritor, Inc. * | 22,600 | 155,262 | ||||||
Moog, Inc., Class A * | 7,587 | 453,172 | ||||||
MRC Global, Inc. * | 15,600 | 436,020 | ||||||
MSC Industrial Direct Co., Inc., Class A | 6,900 | 526,953 | ||||||
Mueller Industries, Inc. | 3,400 | 204,986 | ||||||
Mueller Water Products, Inc., Class A | 23,139 | 198,301 | ||||||
MYR Group, Inc. * | 2,800 | 74,060 | ||||||
National Presto Industries, Inc. | 2,900 | 204,595 | ||||||
Navistar International Corp. * | 11,600 | 419,456 | ||||||
NCI Building Systems, Inc. * | 8,780 | 126,695 | ||||||
NN, Inc. | 1,800 | 28,944 | ||||||
Nordson Corp. | 9,500 | 684,855 | ||||||
Nortek, Inc. * | 1,800 | 126,306 | ||||||
Northrop Grumman Corp. | 36,332 | 3,906,053 | ||||||
Omega Flex, Inc. | 700 | 14,238 | ||||||
Orbital Sciences Corp. * | 12,600 | 290,682 | ||||||
Oshkosh Corp. * | 12,900 | 613,911 | ||||||
Owens Corning * | 18,700 | 671,891 | ||||||
PACCAR, Inc. | 56,125 | 3,120,550 | ||||||
Pall Corp. | 16,600 | 1,336,632 | ||||||
Parker Hannifin Corp. | 23,100 | 2,696,232 | ||||||
Pentair Ltd. | 32,728 | 2,195,722 | ||||||
Polypore International, Inc. (c)* | 6,100 | 275,720 | ||||||
Powell Industries, Inc. * | 2,800 | 175,924 | ||||||
Precision Castparts Corp. | 22,602 | 5,728,477 | ||||||
Preformed Line Products Co. | 1,000 | 84,020 | ||||||
Primoris Services Corp. | 6,900 | 179,676 | ||||||
Proto Labs, Inc. * | 2,800 | 234,808 | ||||||
Quanex Building Products Corp. | 13,125 | 233,362 | ||||||
Quanta Services, Inc. * | 31,071 | 938,655 | ||||||
Raven Industries, Inc. | 5,600 | 186,816 | ||||||
Raytheon Co. | 51,000 | 4,200,870 | ||||||
RBC Bearings, Inc. * | 3,000 | 206,370 | ||||||
Regal-Beloit Corp. | 6,500 | 476,645 | ||||||
Rexnord Corp. * | 9,300 | 218,736 | ||||||
Rockwell Automation, Inc. | 22,000 | 2,429,020 | ||||||
Rockwell Collins, Inc. | 20,900 | 1,459,447 | ||||||
Roper Industries, Inc. | 15,600 | 1,978,236 | ||||||
Rush Enterprises, Inc., Class A * | 4,600 | 131,652 | ||||||
Sensata Technologies Holding N.V. * | 19,600 | 737,548 | ||||||
Simpson Manufacturing Co., Inc. | 6,200 | 219,790 | ||||||
Snap-on, Inc. | 9,200 | 957,444 | ||||||
Solarcity Corp. (c)* | 7,100 | 378,288 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 18,600 | 496,434 | ||||||
SPX Corp. | 7,110 | 644,948 | ||||||
Standex International Corp. | 3,000 | 184,530 | ||||||
Stanley Black & Decker, Inc. | 24,652 | 1,949,727 | ||||||
Sun Hydraulics Corp. | 3,000 | 119,040 | ||||||
TAL International Group, Inc. * | 6,000 | 289,860 | ||||||
Taser International, Inc. * | 11,800 | 209,686 | ||||||
Tecumseh Products Co., Class A * | 9,100 | 70,980 | ||||||
Teledyne Technologies, Inc. * | 5,157 | 458,045 | ||||||
Tennant Co. | 4,200 | 254,898 | ||||||
Terex Corp. * | 16,100 | 562,695 | ||||||
Textainer Group Holdings Ltd. | 5,200 | 197,080 | ||||||
Textron, Inc. | 45,600 | 1,312,824 | ||||||
The Babcock & Wilcox Co. | 17,400 | 560,454 | ||||||
The Boeing Co. | 109,400 | 14,276,700 | ||||||
The Gorman-Rupp Co. | 4,113 | 167,564 | ||||||
The Greenbrier Cos., Inc. * | 5,800 | 153,932 | ||||||
The KEYW Holding Corp. * | 14,200 | 163,300 | ||||||
The Manitowoc Co., Inc. | 18,500 | 360,010 | ||||||
The Middleby Corp. * | 3,100 | 705,715 | ||||||
The Timken Co. | 11,900 | 628,439 | ||||||
The Toro Co. | 8,200 | 483,308 | ||||||
Thermon Group Holdings, Inc. * | 9,500 | 223,345 | ||||||
Titan International, Inc. | 6,925 | 100,413 | ||||||
Titan Machinery, Inc. (c)* | 3,600 | 63,504 | ||||||
TransDigm Group, Inc. | 7,300 | 1,061,493 | ||||||
Trex Co., Inc. * | 2,700 | 189,594 | ||||||
TriMas Corp. * | 4,700 | 177,942 | ||||||
Trinity Industries, Inc. | 10,950 | 554,398 | ||||||
Triumph Group, Inc. | 8,100 | 580,365 | ||||||
Tutor Perini Corp. * | 7,100 | 162,945 | ||||||
United Rentals, Inc. * | 14,700 | 949,473 | ||||||
United Technologies Corp. | 133,068 | 14,138,475 | ||||||
Universal Forest Products, Inc. | 2,500 | 132,300 | ||||||
URS Corp. | 10,700 | 580,154 | ||||||
USG Corp. * | 12,500 | 341,375 | ||||||
Valmont Industries, Inc. | 4,300 | 604,150 | ||||||
Vicor Corp. * | 9,900 | 87,219 | ||||||
W.W. Grainger, Inc. | 9,800 | 2,635,906 | ||||||
Wabash National Corp. * | 11,200 | 130,592 | ||||||
WABCO Holdings, Inc. * | 9,233 | 791,083 | ||||||
Wabtec Corp. | 14,256 | 929,349 | ||||||
Watsco, Inc. | 4,200 | 400,218 | ||||||
Watts Water Technologies, Inc., Class A | 4,000 | 231,120 | ||||||
WESCO International, Inc. * | 6,300 | 538,398 | ||||||
Woodward, Inc. | 10,500 | 420,945 | ||||||
Xylem, Inc. | 27,700 | 955,650 | ||||||
258,733,726 | ||||||||
Commercial & Professional Supplies 1.1% | ||||||||
ABM Industries, Inc. | 7,200 | 198,072 | ||||||
Acacia Research Corp. | 6,200 | 93,558 | ||||||
ACCO Brands Corp. * | 15,378 | 89,961 | ||||||
AMREP Corp. * | 2,500 | 20,125 | ||||||
ARC Document Solutions, Inc. * | 7,000 | 43,680 | ||||||
Casella Waste Systems, Inc., Class A * | 13,300 | 78,603 |
See financial notes 41
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
CDI Corp. | 5,500 | 88,275 | ||||||
Cenveo, Inc. * | 7,300 | 22,922 | ||||||
Cintas Corp. | 15,350 | 825,369 | ||||||
Clean Harbors, Inc. * | 7,700 | 475,475 | ||||||
Compx International, Inc. | 2,000 | 28,380 | ||||||
Consolidated Graphics, Inc. * | 3,900 | 249,951 | ||||||
Copart, Inc. * | 17,618 | 567,828 | ||||||
Covanta Holding Corp. | 18,900 | 324,513 | ||||||
CRA International, Inc. * | 4,200 | 80,010 | ||||||
Deluxe Corp. | 6,800 | 320,212 | ||||||
Ennis, Inc. | 6,500 | 115,375 | ||||||
Equifax, Inc. | 19,795 | 1,280,143 | ||||||
Exponent, Inc. | 1,900 | 143,659 | ||||||
FTI Consulting, Inc. * | 5,700 | 231,306 | ||||||
G&K Services, Inc., Class A | 4,100 | 255,840 | ||||||
GP Strategies Corp. * | 1,500 | 42,030 | ||||||
Healthcare Services Group, Inc. | 12,656 | 346,648 | ||||||
Heidrick & Struggles International, Inc. | 5,000 | 92,600 | ||||||
Herman Miller, Inc. | 8,700 | 263,958 | ||||||
HNI Corp. | 6,400 | 248,640 | ||||||
Hudson Global, Inc. * | 3,220 | 10,465 | ||||||
Huron Consulting Group, Inc. * | 5,000 | 292,850 | ||||||
ICF International, Inc. * | 2,800 | 96,936 | ||||||
IHS, Inc., Class A * | 9,700 | 1,057,785 | ||||||
InnerWorkings, Inc. * | 7,400 | 70,818 | ||||||
Insperity, Inc. | 6,800 | 262,956 | ||||||
Interface, Inc. | 8,400 | 170,100 | ||||||
Iron Mountain, Inc. | 25,238 | 669,817 | ||||||
KAR Auction Services, Inc. | 16,200 | 481,464 | ||||||
Kelly Services, Inc., Class A | 5,700 | 118,902 | ||||||
Kforce, Inc. | 7,105 | 139,897 | ||||||
Kimball International, Inc., Class B | 9,100 | 106,470 | ||||||
Knoll, Inc. | 7,000 | 114,940 | ||||||
Korn/Ferry International * | 6,600 | 157,080 | ||||||
Manpowergroup, Inc. | 12,591 | 983,357 | ||||||
Mastech Holdings, Inc. | 540 | 7,873 | ||||||
McGrath RentCorp | 4,600 | 164,082 | ||||||
Mine Safety Appliances Co. | 4,700 | 226,352 | ||||||
Mistras Group, Inc. * | 4,000 | 73,440 | ||||||
Mobile Mini, Inc. * | 6,200 | 223,944 | ||||||
Multi-Color Corp. | 4,625 | 161,089 | ||||||
Navigant Consulting, Inc. * | 14,000 | 242,900 | ||||||
Nielsen Holdings N.V. | 32,200 | 1,269,968 | ||||||
NL Industries, Inc. | 7,800 | 90,948 | ||||||
On Assignment, Inc. * | 6,500 | 219,635 | ||||||
Performant Financial Corp. * | 7,700 | 76,769 | ||||||
Pitney Bowes, Inc. | 28,200 | 601,788 | ||||||
Quad Graphics, Inc. | 9,800 | 342,216 | ||||||
R.R. Donnelley & Sons Co. | 30,200 | 560,814 | ||||||
Republic Services, Inc. | 47,845 | 1,601,372 | ||||||
Resources Connection, Inc. | 11,300 | 144,188 | ||||||
Robert Half International, Inc. | 21,000 | 809,130 | ||||||
Rollins, Inc. | 9,218 | 254,786 | ||||||
RPX Corp. * | 10,300 | 183,958 | ||||||
Steelcase, Inc., Class A | 11,500 | 188,485 | ||||||
Stericycle, Inc. * | 13,300 | 1,545,460 | ||||||
Team, Inc. * | 3,000 | 111,870 | ||||||
Tetra Tech, Inc. * | 8,131 | 212,463 | ||||||
The ADT Corp. | 33,866 | 1,468,768 | ||||||
The Advisory Board Co. * | 4,600 | 315,560 | ||||||
The Brink’s Co. | 7,100 | 222,940 | ||||||
The Corporate Executive Board Co. | 4,700 | 342,630 | ||||||
The Dun & Bradstreet Corp. | 5,840 | 635,334 | ||||||
The Standard Register Co. * | 820 | 6,970 | ||||||
Towers Watson & Co., Class A | 10,100 | 1,159,581 | ||||||
TRC Cos., Inc. * | 3,350 | 25,762 | ||||||
TrueBlue, Inc. * | 6,000 | 148,200 | ||||||
Tyco International Ltd. | 72,033 | 2,632,806 | ||||||
UniFirst Corp. | 2,100 | 215,922 | ||||||
United Stationers, Inc. | 5,800 | 257,752 | ||||||
Verisk Analytics, Inc., Class A * | 23,300 | 1,596,516 | ||||||
Viad Corp. | 3,625 | 96,787 | ||||||
Virco Mfg. Corp. * | 1,170 | 2,375 | ||||||
WageWorks, Inc. * | 5,000 | 256,050 | ||||||
Waste Connections, Inc. | 17,912 | 765,559 | ||||||
Waste Management, Inc. | 67,100 | 2,921,534 | ||||||
33,645,546 | ||||||||
Consumer Durables & Apparel 1.6% | ||||||||
Arctic Cat, Inc. | 2,400 | 125,760 | ||||||
Blyth, Inc. (c) | 7,400 | 102,194 | ||||||
Brunswick Corp. | 14,400 | 649,872 | ||||||
Callaway Golf Co. | 12,800 | 107,904 | ||||||
Carter’s, Inc. | 9,400 | 650,010 | ||||||
Cavco Industries, Inc. * | 1,610 | 94,298 | ||||||
Coach, Inc. | 44,508 | 2,255,665 | ||||||
Columbia Sportswear Co. | 3,450 | 230,702 | ||||||
Costa, Inc. * | 2,900 | 58,348 | ||||||
Crocs, Inc. * | 15,000 | 182,700 | ||||||
CSS Industries, Inc. | 4,800 | 124,272 | ||||||
D.R. Horton, Inc. | 43,904 | 831,981 | ||||||
Deckers Outdoor Corp. * | 5,200 | 357,916 | ||||||
Ethan Allen Interiors, Inc. | 4,200 | 111,888 | ||||||
Fifth & Pacific Cos., Inc. * | 20,600 | 545,694 | ||||||
Flexsteel Industries, Inc. | 1,900 | 52,174 | ||||||
Foamex International, Inc. (b)(g)* | 2,278 | — | ||||||
Fossil Group, Inc. * | 7,662 | 972,614 | ||||||
G-III Apparel Group Ltd. * | 2,800 | 158,816 | ||||||
Garmin Ltd. (c) | 19,800 | 925,650 | ||||||
Hanesbrands, Inc. | 15,547 | 1,059,062 | ||||||
Harman International Industries, Inc. | 9,900 | 802,098 | ||||||
Hasbro, Inc. | 18,800 | 971,020 | ||||||
Helen of Troy Ltd. * | 5,000 | 233,600 | ||||||
Hovnanian Enterprises, Inc., Class A * | 20,000 | 101,200 | ||||||
Iconix Brand Group, Inc. * | 9,600 | 346,464 | ||||||
iRobot Corp. * | 7,300 | 247,251 | ||||||
JAKKS Pacific, Inc. | 7,500 | 48,300 | ||||||
Jarden Corp. * | 18,638 | 1,031,800 | ||||||
KB Home | 10,900 | 184,973 | ||||||
Kid Brands, Inc. * | 3,000 | 4,185 | ||||||
La-Z-Boy, Inc. | 7,500 | 173,100 | ||||||
LeapFrog Enterprises, Inc. (c)* | 9,000 | 77,040 | ||||||
Leggett & Platt, Inc. | 20,900 | 621,566 | ||||||
Lennar Corp., Class A | 25,890 | 920,389 | ||||||
Lululemon Athletica, Inc. * | 16,600 | 1,146,230 | ||||||
M.D.C. Holdings, Inc. | 5,503 | 160,633 | ||||||
M/I Homes, Inc. * | 3,000 | 61,410 | ||||||
Marine Products Corp. | 405 | 3,795 | ||||||
Mattel, Inc. | 55,000 | 2,440,350 |
42 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Meritage Homes Corp. * | 5,900 | 267,801 | ||||||
Michael Kors Holdings Ltd. * | 27,900 | 2,146,905 | ||||||
Mohawk Industries, Inc. * | 9,219 | 1,220,780 | ||||||
Movado Group, Inc. | 5,800 | 270,454 | ||||||
NACCO Industries, Inc., Class A | 1,900 | 108,243 | ||||||
Nautilus, Inc. * | 9,825 | 78,207 | ||||||
Newell Rubbermaid, Inc. | 47,900 | 1,419,277 | ||||||
NIKE, Inc., Class B | 117,900 | 8,932,104 | ||||||
NVR, Inc. * | 700 | 642,124 | ||||||
Oxford Industries, Inc. | 2,500 | 179,425 | ||||||
Perry Ellis International, Inc. | 5,500 | 104,555 | ||||||
Polaris Industries, Inc. | 10,100 | 1,322,595 | ||||||
PulteGroup, Inc. | 53,476 | 943,851 | ||||||
PVH Corp. | 13,111 | 1,633,237 | ||||||
Quiksilver, Inc. * | 25,900 | 215,488 | ||||||
Ralph Lauren Corp. | 9,800 | 1,623,272 | ||||||
Skechers U.S.A., Inc., Class A * | 6,500 | 189,410 | ||||||
Skyline Corp. * | 2,600 | 11,362 | ||||||
Smith & Wesson Holding Corp. (c)* | 12,400 | 133,672 | ||||||
Standard Pacific Corp. * | 28,500 | 226,005 | ||||||
Stanley Furniture Co., Inc. * | 6,875 | 26,744 | ||||||
Steven Madden Ltd. * | 9,112 | 334,228 | ||||||
Sturm, Ruger & Co., Inc. (c) | 2,700 | 176,607 | ||||||
Superior Uniform Group, Inc. | 1,600 | 24,160 | ||||||
Tandy Brands Accessories, Inc. * | 1,000 | 420 | ||||||
Tempur-Pedic International, Inc. * | 10,300 | 395,005 | ||||||
The Jones Group, Inc. | 12,156 | 188,904 | ||||||
The Ryland Group, Inc. | 6,700 | 269,340 | ||||||
Toll Brothers, Inc. * | 23,400 | 769,392 | ||||||
Tumi Holdings, Inc. * | 9,200 | 196,420 | ||||||
Tupperware Brands Corp. | 7,800 | 699,270 | ||||||
Under Armour, Inc., Class A * | 12,600 | 1,022,490 | ||||||
Universal Electronics, Inc. * | 5,200 | 202,332 | ||||||
Vera Bradley, Inc. (c)* | 4,200 | 93,030 | ||||||
VF Corp. | 13,500 | 2,902,500 | ||||||
Whirlpool Corp. | 12,249 | 1,788,476 | ||||||
Wolverine World Wide, Inc. | 7,800 | 450,372 | ||||||
50,381,381 | ||||||||
Consumer Services 2.2% | ||||||||
AFC Enterprises, Inc. * | 3,900 | 173,862 | ||||||
Ambassadors Group, Inc. | 3,400 | 12,546 | ||||||
American Public Education, Inc. * | 5,600 | 224,168 | ||||||
Apollo Group, Inc., Class A * | 14,550 | 388,339 | ||||||
Ascent Capital Group, Inc., Class A * | 3,116 | 263,053 | ||||||
Bally Technologies, Inc. * | 5,900 | 431,526 | ||||||
Biglari Holdings, Inc. * | 279 | 121,649 | ||||||
BJ’s Restaurants, Inc. * | 3,000 | 81,180 | ||||||
Bloomin’ Brands, Inc. * | 10,300 | 257,809 | ||||||
Bob Evans Farms, Inc. | 4,200 | 239,778 | ||||||
Boyd Gaming Corp. * | 12,300 | 129,888 | ||||||
Bridgepoint Education, Inc. * | 7,900 | 154,840 | ||||||
Brinker International, Inc. | 9,850 | 437,537 | ||||||
Buffalo Wild Wings, Inc. * | 3,000 | 427,740 | ||||||
Burger King Worldwide, Inc. | 12,200 | 258,396 | ||||||
Career Education Corp. * | 25,114 | 137,625 | ||||||
Carnival Corp. | 69,500 | 2,408,175 | ||||||
CEC Entertainment, Inc. | 2,925 | 135,574 | ||||||
Chipotle Mexican Grill, Inc. * | 5,000 | 2,634,850 | ||||||
Choice Hotels International, Inc. | 3,800 | 177,042 | ||||||
Churchill Downs, Inc. | 2,900 | 249,139 | ||||||
Corinthian Colleges, Inc. * | 21,700 | 46,438 | ||||||
Cracker Barrel Old Country Store, Inc. | 3,446 | 378,612 | ||||||
Darden Restaurants, Inc. | 21,500 | 1,107,895 | ||||||
Denny’s Corp. * | 21,100 | 133,985 | ||||||
DeVry, Inc. | 7,800 | 280,020 | ||||||
DineEquity, Inc. | 3,000 | 246,210 | ||||||
Domino’s Pizza, Inc. | 8,100 | 543,186 | ||||||
Dover Downs Gaming & Entertainment, Inc. | 5,899 | 8,907 | ||||||
Dover Motorsports, Inc. | 1,400 | 3,304 | ||||||
Dunkin’ Brands Group, Inc. | 16,800 | 801,024 | ||||||
Education Management Corp. (c)* | 19,600 | 299,880 | ||||||
Grand Canyon Education, Inc. * | 5,000 | 236,350 | ||||||
H&R Block, Inc. | 41,000 | 1,166,040 | ||||||
Hillenbrand, Inc. | 8,800 | 248,336 | ||||||
Hyatt Hotels Corp., Class A * | 7,900 | 376,040 | ||||||
International Game Technology | 38,100 | 716,280 | ||||||
International Speedway Corp., Class A | 6,445 | 210,816 | ||||||
Interval Leisure Group, Inc. | 10,769 | 261,364 | ||||||
Isle of Capri Casinos, Inc. * | 11,800 | 95,698 | ||||||
ITT Educational Services, Inc. (c)* | 5,600 | 224,672 | ||||||
Jack in the Box, Inc. * | 5,700 | 231,876 | ||||||
K12, Inc. * | 4,900 | 89,572 | ||||||
Krispy Kreme Doughnuts, Inc. * | 14,100 | 342,066 | ||||||
Lakes Entertainment, Inc. * | 6,800 | 28,492 | ||||||
Las Vegas Sands Corp. | 61,100 | 4,290,442 | ||||||
Learning Tree International, Inc. * | 1,400 | 4,018 | ||||||
Life Time Fitness, Inc. * | 5,500 | 249,810 | ||||||
Luby’s, Inc. * | 6,900 | 52,854 | ||||||
Marriott International, Inc., Class A | 36,708 | 1,654,797 | ||||||
Marriott Vacations Worldwide Corp. * | 4,080 | 204,326 | ||||||
Matthews International Corp., Class A | 2,900 | 117,740 | ||||||
McDonald’s Corp. | 157,909 | 15,241,377 | ||||||
MGM Resorts International * | 58,100 | 1,106,224 | ||||||
Monarch Casino & Resort, Inc. * | 8,000 | 135,280 | ||||||
MTR Gaming Group, Inc. * | 5,800 | 30,160 | ||||||
Multimedia Games Holding Co., Inc. * | 5,500 | 178,805 | ||||||
Norwegian Cruise Line Holdings Ltd * | 7,400 | 236,948 | ||||||
Orient-Express Hotels Ltd., Class A * | 12,600 | 167,706 | ||||||
Outerwall, Inc. (c)* | 5,000 | 324,900 | ||||||
Panera Bread Co., Class A * | 4,200 | 663,264 | ||||||
Papa John’s International, Inc. | 3,400 | 257,278 | ||||||
Penn National Gaming, Inc. * | 9,800 | 573,398 | ||||||
Pinnacle Entertainment, Inc. * | 6,800 | 159,120 | ||||||
Regis Corp. | 6,900 | 100,050 | ||||||
Royal Caribbean Cruises Ltd. | 24,000 | 1,008,960 | ||||||
Ruby Tuesday, Inc. * | 13,200 | 78,276 | ||||||
Scientific Games Corp., Class A * | 22,200 | 405,816 | ||||||
SeaWorld Entertainment, Inc. | 7,300 | 219,219 | ||||||
Service Corp. International | 30,100 | 542,101 | ||||||
SHFL Entertainment, Inc. * | 8,012 | 185,718 | ||||||
Six Flags Entertainment Corp. | 15,600 | 586,716 | ||||||
Sonic Corp. * | 7,968 | 153,782 |
See financial notes 43
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sotheby’s | 9,838 | 510,592 | ||||||
Speedway Motorsports, Inc. | 6,700 | 122,342 | ||||||
Starbucks Corp. | 117,800 | 9,547,690 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 31,230 | 2,299,152 | ||||||
Steiner Leisure Ltd. * | 3,000 | 168,060 | ||||||
Stewart Enterprises, Inc., Class A | 10,000 | 132,100 | ||||||
Strayer Education, Inc. | 4,300 | 169,979 | ||||||
Texas Roadhouse, Inc. | 8,300 | 227,586 | ||||||
The Cheesecake Factory, Inc. | 7,087 | 334,861 | ||||||
The Wendy’s Co. | 50,775 | 441,235 | ||||||
Vail Resorts, Inc. | 5,300 | 373,385 | ||||||
Weight Watchers International, Inc. (c) | 6,500 | 208,715 | ||||||
Wyndham Worldwide Corp. | 20,944 | 1,390,682 | ||||||
Wynn Resorts Ltd. | 12,400 | 2,061,500 | ||||||
Yum! Brands, Inc. | 70,200 | 4,746,924 | ||||||
69,085,667 | ||||||||
Diversified Financials 6.8% | ||||||||
Affiliated Managers Group, Inc. * | 8,200 | 1,619,008 | ||||||
American Express Co. | 149,250 | 12,208,650 | ||||||
Ameriprise Financial, Inc. | 30,930 | 3,109,702 | ||||||
ASTA Funding, Inc. | 6,000 | 51,480 | ||||||
Atlanticus Holdings Corp. * | 4,629 | 16,155 | ||||||
Bank of America Corp. | 1,694,056 | 23,649,022 | ||||||
Berkshire Hathaway, Inc., Class B * | 284,774 | 32,771,792 | ||||||
BGC Partners, Inc., Class A | 28,300 | 150,556 | ||||||
BlackRock, Inc. | 19,900 | 5,986,119 | ||||||
Calamos Asset Management, Inc., Class A | 5,000 | 49,100 | ||||||
Capital One Financial Corp. | 92,310 | 6,338,928 | ||||||
Cash America International, Inc. | 4,100 | 161,745 | ||||||
CBOE Holdings, Inc. | 14,200 | 688,700 | ||||||
Citigroup, Inc. | 479,528 | 23,391,376 | ||||||
CME Group, Inc. | 49,550 | 3,677,105 | ||||||
Cohen & Steers, Inc. | 5,400 | 207,144 | ||||||
Cowen Group, Inc., Class A * | 11,889 | 47,199 | ||||||
Credit Acceptance Corp. * | 1,300 | 153,790 | ||||||
DFC Global Corp. * | 9,750 | 117,975 | ||||||
Discover Financial Services | 75,350 | 3,909,158 | ||||||
E*TRADE Financial Corp. * | 46,333 | 783,491 | ||||||
Eaton Vance Corp. | 18,700 | 781,847 | ||||||
Encore Capital Group, Inc. * | 5,600 | 273,560 | ||||||
Evercore Partners, Inc., Class A | 6,500 | 328,055 | ||||||
Ezcorp, Inc., Class A * | 8,500 | 133,705 | ||||||
FBR & Co. * | 1,000 | 26,500 | ||||||
Federated Investors, Inc., Class B (c) | 14,650 | 397,308 | ||||||
Financial Engines, Inc. | 7,800 | 435,786 | ||||||
First Cash Financial Services, Inc. * | 3,800 | 229,862 | ||||||
Franklin Resources, Inc. | 63,600 | 3,425,496 | ||||||
GAMCO Investors, Inc., Class A | 3,400 | 243,134 | ||||||
GFI Group, Inc. | 18,700 | 64,889 | ||||||
Greenhill & Co., Inc. | 4,500 | 230,850 | ||||||
HFF, Inc., Class A | 5,900 | 144,845 | ||||||
ICG Group, Inc. * | 8,050 | 131,296 | ||||||
ING US, Inc. | 10,000 | 310,200 | ||||||
Interactive Brokers Group, Inc., Class A | 7,600 | 156,788 | ||||||
IntercontinentalExchange, Inc. * | 11,400 | 2,197,122 | ||||||
INTL FCStone, Inc. * | 4,437 | 90,781 | ||||||
Invesco Ltd. | 71,200 | 2,403,000 | ||||||
Investment Technology Group, Inc. * | 8,050 | 128,961 | ||||||
Janus Capital Group, Inc. | 26,200 | 258,594 | ||||||
JPMorgan Chase & Co. | 593,544 | 30,591,258 | ||||||
KCG Holdings, Inc., Class A * | 15,533 | 135,758 | ||||||
Legg Mason, Inc. | 15,950 | 613,597 | ||||||
Leucadia National Corp. | 49,450 | 1,401,413 | ||||||
LPL Financial Holdings, Inc. | 12,800 | 521,472 | ||||||
MarketAxess Holdings, Inc. | 5,300 | 345,719 | ||||||
MicroFinancial, Inc. | 1,900 | 16,321 | ||||||
Moody’s Corp. | 30,100 | 2,126,866 | ||||||
Morgan Stanley | 219,300 | 6,300,489 | ||||||
MSCI, Inc. * | 20,000 | 815,400 | ||||||
Nelnet, Inc., Class A | 6,400 | 272,832 | ||||||
NewStar Financial, Inc. * | 13,500 | 235,035 | ||||||
Northern Trust Corp. | 35,600 | 2,008,552 | ||||||
NYSE Euronext | 37,500 | 1,650,750 | ||||||
PHH Corp. * | 7,186 | 172,823 | ||||||
PICO Holdings, Inc. * | 3,700 | 86,876 | ||||||
Piper Jaffray Cos., Inc. * | 3,950 | 141,766 | ||||||
Portfolio Recovery Associates, Inc. * | 7,200 | 428,040 | ||||||
Raymond James Financial, Inc. | 17,850 | 814,852 | ||||||
Resource America, Inc., Class A | 4,000 | 34,520 | ||||||
SEI Investments Co. | 22,800 | 756,732 | ||||||
SLM Corp. | 68,300 | 1,732,771 | ||||||
State Street Corp. | 71,183 | 4,987,793 | ||||||
Stifel Financial Corp. * | 8,685 | 355,651 | ||||||
SWS Group, Inc. * | 8,211 | 46,228 | ||||||
T. Rowe Price Group, Inc. | 41,200 | 3,189,292 | ||||||
TD Ameritrade Holding Corp. | 36,500 | 994,990 | ||||||
The Bank of New York Mellon Corp. | 181,334 | 5,766,421 | ||||||
The Charles Schwab Corp. (a) | 182,326 | 4,129,684 | ||||||
The First Marblehead Corp. * | 7,500 | 7,200 | ||||||
The Goldman Sachs Group, Inc. | 65,900 | 10,600,674 | ||||||
The McGraw Hill Financial, Inc. | 42,800 | 2,982,304 | ||||||
The NASDAQ OMX Group, Inc. | 17,100 | 605,853 | ||||||
Virtus Investment Partners, Inc. * | 875 | 178,080 | ||||||
Waddell & Reed Financial, Inc., Class A | 12,250 | 756,437 | ||||||
Walter Investment Management Corp. * | 5,325 | 201,125 | ||||||
Westwood Holdings Group, Inc. | 1,785 | 95,194 | ||||||
WisdomTree Investments, Inc. * | 20,500 | 284,950 | ||||||
World Acceptance Corp. * | 1,800 | 187,416 | ||||||
218,053,908 | ||||||||
Energy 9.4% | ||||||||
Abraxas Petroleum Corp. * | 36,200 | 104,618 | ||||||
Adams Resources & Energy, Inc. | 2,300 | 119,071 | ||||||
Alon USA Energy, Inc. | 8,700 | 105,096 | ||||||
Alpha Natural Resources, Inc. * | 29,330 | 205,310 | ||||||
Anadarko Petroleum Corp. | 78,460 | 7,476,453 | ||||||
Apache Corp. | 63,672 | 5,654,074 | ||||||
Apco Oil & Gas International, Inc. * | 6,500 | 98,930 |
44 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Approach Resources, Inc. * | 4,000 | 112,600 | ||||||
Arch Coal, Inc. (c) | 26,500 | 112,360 | ||||||
Atwood Oceanics, Inc. * | 8,000 | 425,040 | ||||||
Baker Hughes, Inc. | 70,050 | 4,069,205 | ||||||
Basic Energy Services, Inc. * | 8,500 | 124,695 | ||||||
Berry Petroleum Co., Class A | 6,600 | 315,150 | ||||||
Bill Barrett Corp. * | 6,700 | 185,389 | ||||||
Bonanza Creek Energy, Inc. * | 3,800 | 192,052 | ||||||
Bristow Group, Inc. | 5,000 | 402,350 | ||||||
C&J Energy Services, Inc. * | 10,200 | 235,008 | ||||||
Cabot Oil & Gas Corp. | 64,600 | 2,281,672 | ||||||
Cal Dive International, Inc. (c)* | 25,200 | 49,644 | ||||||
Callon Petroleum Co. * | 18,200 | 124,306 | ||||||
Cameron International Corp. * | 38,247 | 2,098,230 | ||||||
CARBO Ceramics, Inc. (c) | 2,700 | 338,418 | ||||||
Carrizo Oil & Gas, Inc. * | 5,100 | 223,584 | ||||||
Cheniere Energy, Inc. * | 38,600 | 1,536,280 | ||||||
Chesapeake Energy Corp. | 81,000 | 2,264,760 | ||||||
Chevron Corp. | 304,639 | 36,544,494 | ||||||
Cimarex Energy Co. | 12,808 | 1,349,323 | ||||||
Clayton Williams Energy, Inc. * | 2,500 | 194,575 | ||||||
Clean Energy Fuels Corp. (c)* | 17,300 | 197,047 | ||||||
Cloud Peak Energy, Inc. * | 8,700 | 135,807 | ||||||
Cobalt International Energy, Inc. * | 46,700 | 1,083,907 | ||||||
Comstock Resources, Inc. | 6,400 | 109,504 | ||||||
Concho Resources, Inc. * | 16,200 | 1,791,882 | ||||||
ConocoPhillips | 192,823 | 14,133,926 | ||||||
CONSOL Energy, Inc. | 34,000 | 1,241,000 | ||||||
Contango Oil & Gas Co. | 2,000 | 85,700 | ||||||
Continental Resources, Inc. * | 8,500 | 968,150 | ||||||
Core Laboratories N.V. | 7,000 | 1,310,540 | ||||||
Crosstex Energy, Inc. | 6,200 | 190,278 | ||||||
CVR Energy, Inc. | 2,500 | 99,300 | ||||||
Delek US Holdings, Inc. | 6,300 | 160,965 | ||||||
Denbury Resources, Inc. * | 57,225 | 1,086,703 | ||||||
Devon Energy Corp. | 59,960 | 3,790,671 | ||||||
Diamond Offshore Drilling, Inc. | 11,400 | 706,002 | ||||||
Diamondback Energy, Inc. * | 5,600 | 289,240 | ||||||
Dresser-Rand Group, Inc. * | 12,600 | 765,702 | ||||||
Dril-Quip, Inc. * | 6,100 | 716,262 | ||||||
Energen Corp. | 11,700 | 916,344 | ||||||
Energy XXI (Bermuda) Ltd. | 12,200 | 354,532 | ||||||
ENGlobal Corp. * | 4,000 | 4,400 | ||||||
Ensco plc, Class A | 36,500 | 2,104,225 | ||||||
EOG Resources, Inc. | 42,500 | 7,582,000 | ||||||
EPL Oil & Gas, Inc. * | 4,900 | 156,212 | ||||||
EQT Corp. | 23,200 | 1,986,152 | ||||||
Era Group, Inc. * | 2,850 | 90,060 | ||||||
EXCO Resources, Inc. | 22,000 | 119,020 | ||||||
Exterran Holdings, Inc. * | 10,720 | 306,056 | ||||||
Exxon Mobil Corp. | 694,134 | 62,208,289 | ||||||
FMC Technologies, Inc. * | 36,664 | 1,853,365 | ||||||
Forest Oil Corp. * | 12,450 | 59,013 | ||||||
Forum Energy Technologies, Inc. * | 6,800 | 198,968 | ||||||
Geospace Technologies Corp. * | 1,800 | 175,356 | ||||||
Goodrich Petroleum Corp. * | 9,800 | 229,222 | ||||||
Gulf Island Fabrication, Inc. | 4,100 | 103,402 | ||||||
GulfMark Offshore, Inc., Class A | 4,100 | 204,098 | ||||||
Gulfport Energy Corp. * | 10,900 | 639,721 | ||||||
Halcon Resources Corp. (c)* | 43,500 | 225,330 | ||||||
Halliburton Co. | 135,500 | 7,185,565 | ||||||
Harvest Natural Resources, Inc. (c)* | 9,300 | 46,500 | ||||||
Helix Energy Solutions Group, Inc. * | 14,064 | 332,754 | ||||||
Helmerich & Payne, Inc. | 17,500 | 1,357,125 | ||||||
Hercules Offshore, Inc. * | 22,900 | 155,720 | ||||||
Hess Corp. | 47,300 | 3,840,760 | ||||||
HollyFrontier Corp. | 31,554 | 1,453,377 | ||||||
Hornbeck Offshore Services, Inc. * | 5,000 | 276,350 | ||||||
Houston American Energy Corp. * | 4,000 | 1,040 | ||||||
ION Geophysical Corp. * | 13,900 | 64,496 | ||||||
James River Coal Co. (c)* | 15,700 | 30,144 | ||||||
Key Energy Services, Inc. * | 22,300 | 174,386 | ||||||
Kinder Morgan, Inc. | 106,215 | 3,750,452 | ||||||
KiOR, Inc., Class A (c)* | 15,300 | 35,649 | ||||||
Kodiak Oil & Gas Corp. * | 37,100 | 481,187 | ||||||
Laredo Petroleum Holdings, Inc. * | 11,100 | 352,647 | ||||||
Magnum Hunter Resources Corp. * | 22,939 | 163,555 | ||||||
Marathon Oil Corp. | 111,308 | 3,924,720 | ||||||
Marathon Petroleum Corp. | 50,204 | 3,597,619 | ||||||
Matador Resources Co. * | 12,100 | 222,761 | ||||||
Matrix Service Co. * | 8,000 | 166,320 | ||||||
McDermott International, Inc. * | 32,400 | 229,068 | ||||||
Midstates Petroleum Co., Inc. (c)* | 14,400 | 81,216 | ||||||
Murphy Oil Corp. | 27,500 | 1,658,800 | ||||||
Nabors Industries Ltd. | 47,134 | 823,902 | ||||||
National Oilwell Varco, Inc. | 67,522 | 5,481,436 | ||||||
Natural Gas Services Group, Inc. * | 7,500 | 209,925 | ||||||
Newfield Exploration Co. * | 18,800 | 572,460 | ||||||
Newpark Resources, Inc. * | 11,500 | 146,625 | ||||||
Noble Corp. | 40,900 | 1,541,930 | ||||||
Noble Energy, Inc. | 57,036 | 4,273,708 | ||||||
Northern Oil & Gas, Inc. * | 8,200 | 134,726 | ||||||
Oasis Petroleum, Inc. * | 14,000 | 745,500 | ||||||
Occidental Petroleum Corp. | 127,020 | 12,204,082 | ||||||
Oceaneering International, Inc. | 17,700 | 1,520,076 | ||||||
Oil States International, Inc. * | 8,600 | 934,218 | ||||||
Panhandle Oil & Gas, Inc., Class A | 3,100 | 104,067 | ||||||
Parker Drilling Co. * | 18,300 | 131,760 | ||||||
Patterson-UTI Energy, Inc. | 21,500 | 521,590 | ||||||
PBF Energy, Inc. (c) | 3,000 | 78,990 | ||||||
PDC Energy, Inc. * | 5,800 | 393,298 | ||||||
Peabody Energy Corp. | 39,100 | 761,668 | ||||||
Penn Virginia Corp. * | 12,200 | 103,822 | ||||||
PetroQuest Energy, Inc. * | 13,200 | 62,304 | ||||||
PHI, Inc. - Non Voting Shares * | 4,000 | 159,280 | ||||||
Phillips 66 | 96,961 | 6,247,197 | ||||||
Pioneer Energy Services Corp. * | 13,100 | 110,040 | ||||||
Pioneer Natural Resources Co. | 21,833 | 4,470,962 | ||||||
QEP Resources, Inc. | 26,000 | 859,560 | ||||||
Quicksilver Resources, Inc. (c)* | 36,100 | 77,254 | ||||||
Range Resources Corp. | 25,300 | 1,915,463 | ||||||
Rentech, Inc. | 37,400 | 63,954 | ||||||
Resolute Energy Corp. * | 11,900 | 111,622 | ||||||
REX American Resources Corp. * | 4,875 | 140,595 | ||||||
Rex Energy Corp. * | 8,000 | 172,000 | ||||||
Rosetta Resources, Inc. * | 9,700 | 581,418 | ||||||
Rowan Cos. plc, Class A * | 20,500 | 739,640 | ||||||
RPC, Inc. | 16,118 | 295,604 | ||||||
Sanchez Energy Corp. * | 8,700 | 248,037 | ||||||
SandRidge Energy, Inc. (c)* | 49,331 | 312,759 |
See financial notes 45
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Schlumberger Ltd. | 208,760 | 19,564,987 | ||||||
SEACOR Holdings, Inc. | 2,850 | 278,730 | ||||||
SemGroup Corp., Class A | 6,000 | 362,340 | ||||||
SM Energy Co. | 11,200 | 992,432 | ||||||
Solazyme, Inc. (c)* | 12,100 | 126,566 | ||||||
Southwestern Energy Co. * | 53,900 | 2,006,158 | ||||||
Spectra Energy Corp. | 105,578 | 3,755,409 | ||||||
Stone Energy Corp. * | 7,383 | 257,371 | ||||||
Superior Energy Services, Inc. * | 26,099 | 700,236 | ||||||
Swift Energy Co. * | 5,500 | 75,460 | ||||||
Targa Resources Corp. | 4,000 | 310,240 | ||||||
Teekay Corp. | 6,000 | 260,580 | ||||||
Tesco Corp. * | 7,000 | 120,260 | ||||||
Tesoro Corp. | 20,500 | 1,002,245 | ||||||
TETRA Technologies, Inc. * | 12,100 | 156,937 | ||||||
The Williams Cos., Inc. | 107,460 | 3,837,397 | ||||||
Tidewater, Inc. | 7,700 | 463,694 | ||||||
Transocean Ltd. | 55,200 | 2,598,264 | ||||||
Ultra Petroleum Corp. (c)* | 21,500 | 394,740 | ||||||
Unit Corp. * | 7,400 | 380,434 | ||||||
USEC, Inc. (c)* | 2,744 | 22,117 | ||||||
VAALCO Energy, Inc. * | 12,600 | 66,402 | ||||||
Valero Energy Corp. | 84,480 | 3,478,042 | ||||||
Verenium Corp. * | 91 | 363 | ||||||
W&T Offshore, Inc. | 7,500 | 143,175 | ||||||
Warren Resources, Inc. * | 22,100 | 69,173 | ||||||
Weatherford International Ltd. * | 118,800 | 1,953,072 | ||||||
Western Refining, Inc. | 7,700 | 248,479 | ||||||
Westmoreland Coal Co. * | 9,600 | 136,416 | ||||||
Whiting Petroleum Corp. * | 17,400 | 1,163,886 | ||||||
World Fuel Services Corp. | 10,200 | 389,130 | ||||||
WPX Energy, Inc. * | 33,353 | 738,435 | ||||||
298,207,891 | ||||||||
Food & Staples Retailing 2.0% | ||||||||
Arden Group, Inc., Class A | 600 | 78,000 | ||||||
Casey’s General Stores, Inc. | 7,100 | 517,448 | ||||||
Costco Wholesale Corp. | 68,600 | 8,094,800 | ||||||
CVS Caremark Corp. | 195,090 | 12,146,304 | ||||||
Harris Teeter Supermarkets, Inc. | 7,200 | 355,104 | ||||||
Ingles Markets, Inc., Class A | 3,900 | 100,659 | ||||||
Nash Finch Co. | 3,200 | 89,792 | ||||||
PriceSmart, Inc. | 2,300 | 261,717 | ||||||
Rite Aid Corp. * | 140,600 | 749,398 | ||||||
Safeway, Inc. | 37,500 | 1,308,750 | ||||||
Spartan Stores, Inc. | 2,400 | 56,472 | ||||||
SUPERVALU, Inc. * | 24,332 | 171,054 | ||||||
Susser Holdings Corp. * | 2,500 | 137,100 | ||||||
Sysco Corp. | 93,836 | 3,034,656 | ||||||
The Andersons, Inc. | 2,400 | 178,032 | ||||||
The Fresh Market, Inc. * | 5,800 | 295,278 | ||||||
The Kroger Co. | 82,300 | 3,525,732 | ||||||
The Pantry, Inc. * | 6,000 | 80,340 | ||||||
United Natural Foods, Inc. * | 8,800 | 628,760 | ||||||
Wal-Mart Stores, Inc. | 257,300 | 19,747,775 | ||||||
Walgreen Co. | 138,300 | 8,192,892 | ||||||
Weis Markets, Inc. | 2,400 | 122,808 | ||||||
Whole Foods Market, Inc. | 60,200 | 3,800,426 | ||||||
63,673,297 | ||||||||
Food, Beverage & Tobacco 4.6% | ||||||||
Alico, Inc. | 2,000 | 79,920 | ||||||
Alliance One International, Inc. * | 24,600 | 73,062 | ||||||
Altria Group, Inc. | 316,500 | 11,783,295 | ||||||
Annie’s, Inc. * | 1,800 | 85,050 | ||||||
Archer-Daniels-Midland Co. | 104,158 | 4,260,062 | ||||||
B&G Foods, Inc. | 7,400 | 250,490 | ||||||
Beam, Inc. | 25,100 | 1,689,230 | ||||||
Boulder Brands, Inc. * | 9,100 | 149,149 | ||||||
Brown-Forman Corp., Class B | 25,635 | 1,870,842 | ||||||
Bunge Ltd. | 22,800 | 1,872,564 | ||||||
Campbell Soup Co. | 26,400 | 1,123,848 | ||||||
Chiquita Brands International, Inc. * | 13,900 | 143,865 | ||||||
Coca-Cola Bottling Co. Consolidated | 1,300 | 82,316 | ||||||
Coca-Cola Enterprises, Inc. | 41,600 | 1,735,968 | ||||||
ConAgra Foods, Inc. | 66,793 | 2,124,685 | ||||||
Constellation Brands, Inc., Class A * | 26,200 | 1,710,860 | ||||||
Darling International, Inc. * | 20,700 | 481,689 | ||||||
Dean Foods Co. * | 13,556 | 264,342 | ||||||
Diamond Foods, Inc. (c)* | 5,200 | 126,932 | ||||||
Dr Pepper Snapple Group, Inc. | 30,800 | 1,458,380 | ||||||
Farmer Brothers Co. * | 4,500 | 81,270 | ||||||
Flowers Foods, Inc. | 26,605 | 674,171 | ||||||
Fresh Del Monte Produce, Inc. | 4,200 | 111,678 | ||||||
General Mills, Inc. | 101,600 | 5,122,672 | ||||||
Green Mountain Coffee Roasters, Inc. * | 20,850 | 1,309,589 | ||||||
Griffin Land & Nurseries, Inc. | 300 | 9,900 | ||||||
Hillshire Brands Co. | 20,100 | 659,883 | ||||||
Hormel Foods Corp. | 21,400 | 930,044 | ||||||
Ingredion, Inc. | 11,800 | 775,968 | ||||||
J&J Snack Foods Corp. | 2,093 | 179,098 | ||||||
John B. Sanfilippo & Son, Inc. | 5,000 | 122,900 | ||||||
Kellogg Co. | 40,100 | 2,536,325 | ||||||
Kraft Foods Group, Inc. | 93,704 | 5,095,624 | ||||||
Lancaster Colony Corp. | 3,400 | 282,166 | ||||||
Limoneira Co. | 2,900 | 76,386 | ||||||
Lorillard, Inc. | 57,944 | 2,955,723 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 21,400 | 1,479,810 | ||||||
Mead Johnson Nutrition Co. | 31,000 | 2,531,460 | ||||||
Molson Coors Brewing Co., Class B | 25,100 | 1,355,400 | ||||||
Mondelez International, Inc., Class A | 278,613 | 9,372,541 | ||||||
Monster Beverage Corp. * | 21,600 | 1,236,168 | ||||||
National Beverage Corp. | 6,400 | 117,184 | ||||||
PepsiCo, Inc. | 243,158 | 20,447,156 | ||||||
Philip Morris International, Inc. | 255,300 | 22,752,336 | ||||||
Pilgrim’s Pride Corp. * | 12,466 | 176,643 | ||||||
Post Holdings, Inc. * | 4,650 | 199,718 | ||||||
Primo Water Corp. * | 1,000 | 2,490 | ||||||
Reynolds American, Inc. | 50,828 | 2,611,034 | ||||||
Rocky Mountain Chocolate Factory, Inc. | 3,427 | 43,454 | ||||||
Sanderson Farms, Inc. | 2,850 | 180,149 | ||||||
Seaboard Corp. | 100 | 273,000 | ||||||
Snyders-Lance, Inc. | 8,900 | 266,911 |
46 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Boston Beer Co., Inc., Class A * | 1,200 | 275,508 | ||||||
The Coca-Cola Co. | 601,200 | 23,789,484 | ||||||
The Hain Celestial Group, Inc. * | 7,806 | 649,693 | ||||||
The Hershey Co. | 23,200 | 2,302,368 | ||||||
The JM Smucker Co. | 16,846 | 1,873,444 | ||||||
Tootsie Roll Industries, Inc. | 7,370 | 235,840 | ||||||
TreeHouse Foods, Inc. * | 4,922 | 360,586 | ||||||
Tyson Foods, Inc., Class A | 41,840 | 1,157,713 | ||||||
Universal Corp. | 4,800 | 254,544 | ||||||
Vector Group Ltd. | 8,295 | 134,130 | ||||||
WhiteWave Foods Co., Class A * | 27,325 | 546,773 | ||||||
146,915,483 | ||||||||
Health Care Equipment & Services 4.3% | ||||||||
Abaxis, Inc. | 2,800 | 100,044 | ||||||
Abbott Laboratories | 245,105 | 8,958,588 | ||||||
ABIOMED, Inc. * | 7,800 | 187,044 | ||||||
Acadia Healthcare Co., Inc. * | 7,000 | 303,520 | ||||||
Accretive Health, Inc. * | 17,700 | 146,202 | ||||||
Accuray, Inc. (c)* | 21,200 | 143,100 | ||||||
Aetna, Inc. | 59,645 | 3,739,741 | ||||||
Air Methods Corp. | 4,500 | 196,740 | ||||||
Alere, Inc. * | 12,441 | 419,635 | ||||||
Align Technology, Inc. * | 10,100 | 576,306 | ||||||
Alliance HealthCare Services, Inc. * | 360 | 9,076 | ||||||
Allscripts Healthcare Solutions, Inc. * | 31,560 | 436,475 | ||||||
Amedisys, Inc. * | 10,834 | 176,377 | ||||||
AmerisourceBergen Corp. | 35,796 | 2,338,553 | ||||||
AMN Healthcare Services, Inc. * | 10,010 | 124,124 | ||||||
AmSurg Corp. * | 4,300 | 184,427 | ||||||
Analogic Corp. | 2,700 | 249,021 | ||||||
Antares Pharma, Inc. (c)* | 28,100 | 112,400 | ||||||
ArthroCare Corp. * | 5,900 | 220,896 | ||||||
athenahealth, Inc. * | 5,200 | 694,252 | ||||||
Baxter International, Inc. | 84,918 | 5,593,549 | ||||||
Becton, Dickinson & Co. | 30,700 | 3,227,491 | ||||||
Bio-Reference Laboratories, Inc. (c)* | 3,500 | 113,435 | ||||||
BioScrip, Inc. * | 8,372 | 58,688 | ||||||
Boston Scientific Corp. * | 211,668 | 2,474,399 | ||||||
Brookdale Senior Living, Inc. * | 14,300 | 387,244 | ||||||
C.R. Bard, Inc. | 12,600 | 1,716,372 | ||||||
Cantel Medical Corp. | 8,034 | 281,993 | ||||||
Cardinal Health, Inc. | 52,560 | 3,083,170 | ||||||
CareFusion Corp. * | 32,780 | 1,270,881 | ||||||
Centene Corp. * | 9,000 | 505,440 | ||||||
Cerner Corp. * | 45,000 | 2,521,350 | ||||||
Chemed Corp. (c) | 3,900 | 264,498 | ||||||
Chindex International, Inc. * | 6,100 | 102,663 | ||||||
Cigna Corp. | 45,300 | 3,487,194 | ||||||
Community Health Systems, Inc. | 13,500 | 589,005 | ||||||
Computer Programs & Systems, Inc. | 1,900 | 108,376 | ||||||
CONMED Corp. | 7,300 | 264,771 | ||||||
CorVel Corp. * | 5,700 | 237,120 | ||||||
Covidien plc | 73,700 | 4,724,907 | ||||||
Cross Country Healthcare, Inc. * | 12,500 | 74,250 | ||||||
CryoLife, Inc. | 9,050 | 81,359 | ||||||
Cyberonics, Inc. * | 4,200 | 242,592 | ||||||
DaVita HealthCare Partners, Inc. * | 27,900 | 1,568,259 | ||||||
DENTSPLY International, Inc. | 21,000 | 989,100 | ||||||
DexCom, Inc. * | 8,600 | 247,078 | ||||||
Edwards Lifesciences Corp. * | 17,100 | 1,114,749 | ||||||
Emeritus Corp. * | 9,500 | 182,020 | ||||||
Endologix, Inc. * | 13,700 | 247,559 | ||||||
ExamWorks Group, Inc. * | 6,200 | 160,270 | ||||||
Express Scripts Holding Co. * | 127,463 | 7,968,987 | ||||||
Five Star Quality Care, Inc. * | 14,335 | 72,678 | ||||||
Gentiva Health Services, Inc. * | 9,150 | 104,767 | ||||||
Globus Medical, Inc., Class A * | 13,900 | 266,880 | ||||||
Greatbatch, Inc. * | 4,100 | 156,292 | ||||||
Greenway Medical Technologies * | 5,800 | 118,030 | ||||||
Haemonetics Corp. * | 7,400 | 300,144 | ||||||
Hanger, Inc. * | 5,400 | 198,180 | ||||||
HCA Holdings, Inc. | 42,300 | 1,994,022 | ||||||
Health Management Associates, Inc., Class A * | 37,400 | 479,468 | ||||||
Health Net, Inc. * | 11,100 | 337,440 | ||||||
HealthSouth Corp. | 13,500 | 473,985 | ||||||
HealthStream, Inc. * | 3,500 | 125,020 | ||||||
Healthways, Inc. * | 8,100 | 78,003 | ||||||
HeartWare International, Inc. * | 2,100 | 152,376 | ||||||
Henry Schein, Inc. * | 13,100 | 1,472,833 | ||||||
Hill-Rom Holdings, Inc. | 10,200 | 421,158 | ||||||
HMS Holdings Corp. * | 12,200 | 257,786 | ||||||
Hologic, Inc. * | 43,612 | 976,473 | ||||||
Humana, Inc. | 24,500 | 2,257,675 | ||||||
ICU Medical, Inc. * | 1,750 | 108,150 | ||||||
IDEXX Laboratories, Inc. * | 8,000 | 862,880 | ||||||
Insulet Corp. * | 6,800 | 265,336 | ||||||
Integra LifeSciences Holdings Corp. * | 3,100 | 141,918 | ||||||
Intuitive Surgical, Inc. * | 6,150 | 2,284,725 | ||||||
Invacare Corp. | 6,000 | 128,820 | ||||||
IPC The Hospitalist Co., Inc. * | 4,000 | 219,160 | ||||||
Kindred Healthcare, Inc. | 9,208 | 127,807 | ||||||
Laboratory Corp. of America Holdings * | 14,700 | 1,483,230 | ||||||
Landauer, Inc. | 2,100 | 101,640 | ||||||
LCA-Vision, Inc. * | 2,500 | 8,225 | ||||||
LeMaitre Vascular, Inc. | 6,800 | 54,672 | ||||||
Lifepoint Hospitals, Inc. * | 6,707 | 346,349 | ||||||
Magellan Health Services, Inc. * | 3,907 | 229,341 | ||||||
MAKO Surgical Corp. * | 7,800 | 232,518 | ||||||
Masimo Corp. | 8,500 | 217,770 | ||||||
McKesson Corp. | 35,900 | 5,612,606 | ||||||
MedAssets, Inc. * | 10,200 | 234,906 | ||||||
Medical Action Industries, Inc. * | 6,250 | 37,875 | ||||||
Medidata Solutions, Inc. * | 3,400 | 375,054 | ||||||
MEDNAX, Inc. * | 7,200 | 784,944 | ||||||
Medtronic, Inc. | 157,874 | 9,061,968 | ||||||
Meridian Bioscience, Inc. | 10,050 | 248,436 | ||||||
Merit Medical Systems, Inc. * | 10,277 | 164,329 | ||||||
Molina Healthcare, Inc. * | 6,550 | 207,242 | ||||||
MWI Veterinary Supply, Inc. * | 1,700 | 269,688 | ||||||
National Healthcare Corp. | 2,100 | 101,598 | ||||||
Natus Medical, Inc. * | 7,600 | 149,948 | ||||||
Neogen Corp. * | 4,658 | 215,270 | ||||||
NuVasive, Inc. * | 10,000 | 317,800 | ||||||
NxStage Medical, Inc. * | 8,400 | 111,468 |
See financial notes 47
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Omnicare, Inc. | 16,100 | 887,915 | ||||||
Omnicell, Inc. * | 7,400 | 170,718 | ||||||
OraSure Technologies, Inc. * | 12,200 | 79,544 | ||||||
Orthofix International N.V. * | 2,800 | 57,372 | ||||||
Owens & Minor, Inc. | 9,100 | 340,522 | ||||||
Patterson Cos., Inc. | 13,100 | 556,881 | ||||||
PDI, Inc. * | 2,900 | 13,833 | ||||||
PharMerica Corp. * | 5,913 | 87,276 | ||||||
Quality Systems, Inc. | 10,500 | 239,610 | ||||||
Quest Diagnostics, Inc. | 25,720 | 1,540,885 | ||||||
Quidel Corp. * | 5,200 | 128,440 | ||||||
ResMed, Inc. (c) | 21,200 | 1,096,888 | ||||||
RTI Surgical, Inc. * | 18,100 | 50,499 | ||||||
Select Medical Holdings Corp. | 22,600 | 191,648 | ||||||
Sirona Dental Systems, Inc. * | 9,200 | 664,700 | ||||||
Spectranetics Corp. * | 6,700 | 139,963 | ||||||
St. Jude Medical, Inc. | 44,500 | 2,553,855 | ||||||
STERIS Corp. | 8,200 | 370,558 | ||||||
Stryker Corp. | 46,500 | 3,434,490 | ||||||
SurModics, Inc. * | 4,200 | 99,036 | ||||||
Symmetry Medical, Inc. * | 8,200 | 66,420 | ||||||
Team Health Holdings, Inc. * | 10,500 | 456,120 | ||||||
Teleflex, Inc. | 5,900 | 543,862 | ||||||
Tenet Healthcare Corp. * | 15,512 | 732,011 | ||||||
The Cooper Cos., Inc. | 7,881 | 1,018,304 | ||||||
The Ensign Group, Inc. | 3,000 | 127,740 | ||||||
The Providence Service Corp. * | 4,800 | 143,472 | ||||||
Thoratec Corp. * | 8,636 | 372,989 | ||||||
Triple-S Management Corp., Class B * | 5,300 | 94,393 | ||||||
U.S. Physical Therapy, Inc. | 3,500 | 111,720 | ||||||
Unilife Corp. (c)* | 29,100 | 88,173 | ||||||
UnitedHealth Group, Inc. | 159,280 | 10,872,453 | ||||||
Universal American Corp. | 20,600 | 152,852 | ||||||
Universal Health Services, Inc., Class B | 14,400 | 1,160,064 | ||||||
Utah Medical Products, Inc. | 2,500 | 139,150 | ||||||
Varian Medical Systems, Inc. * | 17,100 | 1,241,118 | ||||||
VCA Antech, Inc. * | 12,400 | 352,780 | ||||||
Vocera Communications, Inc. * | 3,700 | 62,271 | ||||||
Volcano Corp. * | 7,500 | 143,775 | ||||||
WellCare Health Plans, Inc. * | 6,200 | 413,416 | ||||||
WellPoint, Inc. | 46,523 | 3,945,150 | ||||||
West Pharmaceutical Services, Inc. | 9,200 | 444,820 | ||||||
Wright Medical Group, Inc. * | 8,600 | 233,662 | ||||||
Zimmer Holdings, Inc. | 25,900 | 2,265,473 | ||||||
136,040,994 | ||||||||
Household & Personal Products 2.0% | ||||||||
Avon Products, Inc. | 70,000 | 1,225,000 | ||||||
Central Garden & Pet Co., Class A * | 8,600 | 63,296 | ||||||
Church & Dwight Co., Inc. | 22,400 | 1,459,360 | ||||||
Colgate-Palmolive Co. | 139,000 | 8,997,470 | ||||||
Coty, Inc., Class A | 9,000 | 138,420 | ||||||
Elizabeth Arden, Inc. * | 3,500 | 126,665 | ||||||
Energizer Holdings, Inc. | 9,333 | 915,661 | ||||||
Harbinger Group, Inc. * | 19,100 | 207,999 | ||||||
Herbalife Ltd. (c) | 15,600 | 1,011,192 | ||||||
Inter Parfums, Inc. | 5,613 | 197,353 | ||||||
Kimberly-Clark Corp. | 60,439 | 6,527,412 | ||||||
Medifast, Inc. * | 3,500 | 81,585 | ||||||
Nu Skin Enterprises, Inc., Class A | 8,300 | 970,519 | ||||||
Nutraceutical International Corp. | 5,000 | 120,250 | ||||||
Oil-Dri Corp. of America | 1,600 | 56,784 | ||||||
Orchids Paper Products Co. | 2,500 | 76,250 | ||||||
Prestige Brands Holdings, Inc. * | 6,500 | 202,995 | ||||||
Revlon, Inc., Class A * | 5,400 | 128,250 | ||||||
Spectrum Brands Holdings, Inc. | 3,500 | 230,720 | ||||||
The Clorox Co. | 20,500 | 1,848,895 | ||||||
The Estee Lauder Cos., Inc., Class A | 40,300 | 2,859,688 | ||||||
The Female Health Co. | 7,500 | 71,400 | ||||||
The Procter & Gamble Co. | 431,915 | 34,877,136 | ||||||
WD-40 Co. | 1,600 | 115,984 | ||||||
62,510,284 | ||||||||
Insurance 3.2% | ||||||||
ACE Ltd. | 53,800 | 5,134,672 | ||||||
Aflac, Inc. | 73,600 | 4,782,528 | ||||||
Alleghany Corp. * | 2,740 | 1,110,851 | ||||||
Allied World Assurance Co. Holdings AG | 4,900 | 530,621 | ||||||
American Equity Investment Life Holding Co. | 12,600 | 262,584 | ||||||
American Financial Group, Inc. | 10,750 | 604,795 | ||||||
American International Group, Inc. | 232,796 | 12,023,913 | ||||||
American National Insurance Co. | 2,300 | 232,461 | ||||||
AMERISAFE, Inc. | 4,000 | 154,000 | ||||||
AmTrust Financial Services, Inc. (c) | 7,314 | 280,565 | ||||||
Aon plc | 48,996 | 3,875,094 | ||||||
Arch Capital Group Ltd. * | 20,700 | 1,199,772 | ||||||
Argo Group International Holdings Ltd. | 5,011 | 210,362 | ||||||
Arthur J. Gallagher & Co. | 18,400 | 873,080 | ||||||
Aspen Insurance Holdings Ltd. | 10,400 | 405,704 | ||||||
Assurant, Inc. | 11,500 | 672,520 | ||||||
Assured Guaranty Ltd. | 31,900 | 653,950 | ||||||
Axis Capital Holdings Ltd. | 16,000 | 758,720 | ||||||
Baldwin & Lyons, Inc., Class B | 1,950 | 53,294 | ||||||
Brown & Brown, Inc. | 19,300 | 616,249 | ||||||
Cincinnati Financial Corp. | 22,850 | 1,142,500 | ||||||
Citizens, Inc. * | 16,000 | 134,400 | ||||||
CNA Financial Corp. | 6,900 | 280,071 | ||||||
CNO Financial Group, Inc. | 30,900 | 481,422 | ||||||
Crawford & Co., Class B | 5,800 | 63,742 | ||||||
Eastern Insurance Holdings, Inc. | 2,500 | 61,100 | ||||||
EMC Insurance Group, Inc. | 1,200 | 40,848 | ||||||
Employers Holdings, Inc. | 4,200 | 126,294 | ||||||
Endurance Specialty Holdings Ltd. | 6,200 | 342,798 | ||||||
Enstar Group Ltd. * | 1,300 | 176,709 | ||||||
Erie Indemnity Co., Class A | 3,600 | 258,552 | ||||||
Everest Re Group Ltd. | 7,700 | 1,183,798 | ||||||
FBL Financial Group, Inc., Class A | 2,890 | 129,299 | ||||||
Federated National Holding Co. | 1,500 | 15,375 | ||||||
Fidelity National Financial, Inc., Class A | 34,027 | 957,860 | ||||||
First American Financial Corp. | 16,800 | 434,448 | ||||||
Genworth Financial, Inc., Class A * | 78,000 | 1,133,340 | ||||||
Greenlight Capital Re Ltd., Class A * | 4,300 | 132,397 |
48 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hartford Financial Services Group, Inc. | 70,900 | 2,389,330 | ||||||
HCC Insurance Holdings, Inc. | 15,150 | 691,597 | ||||||
Hilltop Holdings, Inc. * | 12,926 | 224,137 | ||||||
Horace Mann Educators Corp. | 8,300 | 229,910 | ||||||
Independence Holding Co. | 2,970 | 40,748 | ||||||
Infinity Property & Casualty Corp. | 2,500 | 171,450 | ||||||
Kemper Corp. | 7,700 | 285,054 | ||||||
Lincoln National Corp. | 42,426 | 1,926,565 | ||||||
Loews Corp. | 49,145 | 2,374,195 | ||||||
Maiden Holdings Ltd. | 9,800 | 107,310 | ||||||
Markel Corp. * | 2,250 | 1,191,757 | ||||||
Marsh & McLennan Cos., Inc. | 87,000 | 3,984,600 | ||||||
MBIA, Inc. * | 25,250 | 287,093 | ||||||
Mercury General Corp. | 5,400 | 251,424 | ||||||
MetLife, Inc. | 176,600 | 8,354,946 | ||||||
Montpelier Re Holdings Ltd. | 8,100 | 223,641 | ||||||
National Western Life Insurance Co., Class A | 1,100 | 228,800 | ||||||
Old Republic International Corp. | 34,422 | 577,945 | ||||||
OneBeacon Insurance Group Ltd., Class A | 8,200 | 130,872 | ||||||
PartnerRe Ltd. | 8,900 | 891,869 | ||||||
Platinum Underwriters Holdings Ltd. | 4,500 | 279,855 | ||||||
Primerica, Inc. | 7,500 | 322,125 | ||||||
Principal Financial Group, Inc. | 43,500 | 2,064,510 | �� | |||||
ProAssurance Corp. | 8,540 | 387,033 | ||||||
Protective Life Corp. | 13,200 | 608,256 | ||||||
Prudential Financial, Inc. | 73,500 | 5,982,165 | ||||||
Reinsurance Group of America, Inc. | 10,900 | 775,862 | ||||||
RenaissanceRe Holdings Ltd. | 7,200 | 674,712 | ||||||
RLI Corp. | 2,800 | 264,544 | ||||||
Safety Insurance Group, Inc. | 3,400 | 185,946 | ||||||
Selective Insurance Group, Inc. | 7,800 | 204,906 | ||||||
StanCorp Financial Group, Inc. | 6,300 | 371,070 | ||||||
State Auto Financial Corp. | 5,500 | 104,500 | ||||||
Stewart Information Services Corp. | 3,600 | 112,752 | ||||||
Symetra Financial Corp. | 11,500 | 215,395 | ||||||
The Allstate Corp. | 72,974 | 3,872,000 | ||||||
The Chubb Corp. | 39,794 | 3,664,232 | ||||||
The Hanover Insurance Group, Inc. | 6,900 | 403,926 | ||||||
The Navigators Group, Inc. * | 1,500 | 84,360 | ||||||
The Phoenix Cos., Inc. * | 475 | 18,321 | ||||||
The Progressive Corp. | 85,500 | 2,220,435 | ||||||
The Travelers Cos., Inc. | 59,150 | 5,104,645 | ||||||
Torchmark Corp. | 14,800 | 1,078,328 | ||||||
Tower Group International Ltd. | 11,444 | 41,542 | ||||||
United Fire Group, Inc. | 5,000 | 158,500 | ||||||
Unum Group | 39,814 | 1,263,696 | ||||||
Validus Holdings Ltd. | 16,857 | 665,514 | ||||||
W. R. Berkley Corp. | 15,850 | 695,973 | ||||||
White Mountains Insurance Group Ltd. | 900 | 525,663 | ||||||
Willis Group Holdings plc | 26,700 | 1,203,369 | ||||||
XL Group plc | 46,000 | 1,406,220 | ||||||
101,054,286 | ||||||||
Materials 3.7% | ||||||||
A. Schulman, Inc. | 5,300 | 175,536 | ||||||
A.M. Castle & Co. * | 5,800 | 82,998 | ||||||
AEP Industries, Inc. * | 1,900 | 112,898 | ||||||
Air Products & Chemicals, Inc. | 32,800 | 3,575,528 | ||||||
Airgas, Inc. | 10,200 | 1,112,514 | ||||||
AK Steel Holding Corp. (c)* | 32,127 | 141,359 | ||||||
Albemarle Corp. | 13,300 | 880,327 | ||||||
Alcoa, Inc. | 170,264 | 1,578,347 | ||||||
Allegheny Technologies, Inc. | 15,892 | 526,025 | ||||||
Allied Nevada Gold Corp. * | 29,700 | 121,176 | ||||||
AMCOL International Corp. | 6,100 | 195,688 | ||||||
American Vanguard Corp. | 3,000 | 78,300 | ||||||
AptarGroup, Inc. | 9,500 | 609,520 | ||||||
Ashland, Inc. | 10,823 | 1,001,669 | ||||||
Avery Dennison Corp. | 14,600 | 687,952 | ||||||
Axiall Corp. | 10,400 | 404,456 | ||||||
Balchem Corp. | 4,200 | 240,492 | ||||||
Ball Corp. | 22,400 | 1,095,136 | ||||||
Bemis Co., Inc. | 14,700 | 586,530 | ||||||
Berry Plastics Group, Inc. * | 12,200 | 244,976 | ||||||
Cabot Corp. | 8,400 | 391,524 | ||||||
Calgon Carbon Corp. * | 12,500 | 249,375 | ||||||
Carpenter Technology Corp. | 8,300 | 492,439 | ||||||
Celanese Corp., Series A | 23,800 | 1,333,038 | ||||||
Century Aluminum Co. * | 20,800 | 180,544 | ||||||
CF Industries Holdings, Inc. | 9,100 | 1,961,960 | ||||||
Chase Corp. | 200 | 6,052 | ||||||
Chemtura Corp. * | 14,000 | 343,000 | ||||||
Clearwater Paper Corp. * | 5,472 | 285,748 | ||||||
Cliffs Natural Resources, Inc. (c) | 21,100 | 541,848 | ||||||
Coeur Mining, Inc. * | 12,800 | 156,288 | ||||||
Commercial Metals Co. | 15,000 | 275,400 | ||||||
Compass Minerals International, Inc. | 5,000 | 372,350 | ||||||
Crown Holdings, Inc. * | 21,300 | 928,680 | ||||||
Cytec Industries, Inc. | 6,600 | 548,394 | ||||||
Deltic Timber Corp. | 1,500 | 95,820 | ||||||
Domtar Corp. | 5,250 | 444,728 | ||||||
E.I. du Pont de Nemours & Co. | 145,795 | 8,922,654 | ||||||
Eagle Materials, Inc. | 8,043 | 603,305 | ||||||
Eastman Chemical Co. | 23,880 | 1,881,505 | ||||||
Ecolab, Inc. | 42,804 | 4,537,224 | ||||||
Ferro Corp. * | 21,000 | 269,430 | ||||||
Flotek Industries, Inc. * | 8,000 | 171,040 | ||||||
FMC Corp. | 21,400 | 1,557,064 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 164,184 | 6,035,404 | ||||||
FutureFuel Corp. | 8,300 | 144,503 | ||||||
General Moly, Inc. * | 15,700 | 25,748 | ||||||
Globe Specialty Metals, Inc. | 15,900 | 278,886 | ||||||
Graphic Packaging Holding Co. * | 31,900 | 267,960 | ||||||
Greif, Inc., Class A | 4,300 | 230,007 | ||||||
H.B. Fuller Co. | 9,000 | 430,830 | ||||||
Hawkins, Inc. | 2,700 | 97,227 | ||||||
Haynes International, Inc. | 2,500 | 134,750 | ||||||
Headwaters, Inc. * | 12,000 | 104,760 | ||||||
Hecla Mining Co. | 72,100 | 224,952 | ||||||
Horsehead Holding Corp. * | 12,800 | 185,728 | ||||||
Huntsman Corp. | 27,400 | 636,228 | ||||||
Innophos Holdings, Inc. | 3,100 | 155,372 | ||||||
International Flavors & Fragrances, Inc. | 12,200 | 1,008,330 | ||||||
International Paper Co. | 70,004 | 3,122,879 |
See financial notes 49
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Intrepid Potash, Inc. (c) | 11,800 | 175,230 | ||||||
Kaiser Aluminum Corp. | 3,600 | 242,820 | ||||||
KapStone Paper & Packaging Corp. | 5,400 | 280,584 | ||||||
KMG Chemicals, Inc. | 1,600 | 31,968 | ||||||
Koppers Holdings, Inc. | 2,500 | 111,275 | ||||||
Kraton Performance Polymers, Inc. * | 3,500 | 74,445 | ||||||
Kronos Worldwide, Inc. | 11,720 | 181,777 | ||||||
Landec Corp. * | 9,100 | 106,561 | ||||||
Louisiana-Pacific Corp. * | 20,200 | 343,602 | ||||||
LSB Industries, Inc. * | 3,000 | 110,160 | ||||||
LyondellBasell Industries N.V., Class A | 70,600 | 5,266,760 | ||||||
Martin Marietta Materials, Inc. | 7,400 | 725,866 | ||||||
Materion Corp. | 4,000 | 119,240 | ||||||
McEwen Mining, Inc. (c)* | 31,130 | 66,618 | ||||||
MeadWestvaco Corp. | 29,374 | 1,023,684 | ||||||
Minerals Technologies, Inc. | 6,200 | 351,106 | ||||||
Molycorp, Inc. (c)* | 29,700 | 150,579 | ||||||
Monsanto Co. | 84,190 | 8,829,847 | ||||||
Myers Industries, Inc. | 8,080 | 143,986 | ||||||
Neenah Paper, Inc. | 4,231 | 174,063 | ||||||
NewMarket Corp. | 1,900 | 591,584 | ||||||
Newmont Mining Corp. | 75,951 | 2,070,424 | ||||||
Noranda Aluminum Holding Corp. | 16,500 | 44,880 | ||||||
Nucor Corp. | 49,700 | 2,572,969 | ||||||
Olin Corp. | 10,320 | 232,303 | ||||||
Olympic Steel, Inc. | 1,400 | 38,318 | ||||||
OM Group, Inc. * | 7,600 | 258,400 | ||||||
Omnova Solutions, Inc. * | 10,400 | 90,480 | ||||||
Owens-Illinois, Inc. * | 26,300 | 836,077 | ||||||
P.H. Glatfelter Co. | 7,000 | 183,400 | ||||||
Packaging Corp. of America | 16,100 | 1,002,708 | ||||||
Penford Corp. * | 6,200 | 84,320 | ||||||
PolyOne Corp. | 14,810 | 448,743 | ||||||
PPG Industries, Inc. | 22,500 | 4,108,050 | ||||||
Praxair, Inc. | 46,200 | 5,761,602 | ||||||
Quaker Chemical Corp. | 1,800 | 136,638 | ||||||
Reliance Steel & Aluminum Co. | 11,200 | 820,848 | ||||||
Resolute Forest Products * | 14,000 | 223,860 | ||||||
Rock-Tenn Co., Class A | 11,313 | 1,210,604 | ||||||
Rockwood Holdings, Inc. | 12,500 | 790,625 | ||||||
Royal Gold, Inc. | 9,200 | 441,968 | ||||||
RPM International, Inc. | 21,200 | 820,864 | ||||||
RTI International Metals, Inc. * | 7,700 | 261,030 | ||||||
Schnitzer Steel Industries, Inc., Class A | 3,450 | 100,188 | ||||||
Schweitzer-Mauduit International, Inc. | 4,600 | 284,648 | ||||||
Sealed Air Corp. | 32,000 | 965,760 | ||||||
Sensient Technologies Corp. | 7,400 | 385,762 | ||||||
Sigma-Aldrich Corp. | 18,600 | 1,607,598 | ||||||
Silgan Holdings, Inc. | 6,900 | 310,983 | ||||||
Sonoco Products Co. | 14,900 | 605,536 | ||||||
Steel Dynamics, Inc. | 30,900 | 555,273 | ||||||
Stepan Co. | 4,300 | 253,141 | ||||||
Stillwater Mining Co. * | 14,733 | 160,737 | ||||||
SunCoke Energy, Inc. * | 15,217 | 304,340 | ||||||
Texas Industries, Inc. * | 4,000 | 214,800 | ||||||
The Dow Chemical Co. | 189,366 | 7,474,276 | ||||||
The Mosaic Co. | 53,700 | 2,462,145 | ||||||
The Scotts Miracle-Gro Co., Class A | 5,600 | 328,832 | ||||||
The Sherwin-Williams Co. | 13,300 | 2,500,400 | ||||||
The Valspar Corp. | 12,300 | 860,631 | ||||||
Tredegar Corp. | 5,100 | 149,022 | ||||||
Tronox Ltd., Class A | 9,800 | 226,282 | ||||||
United States Steel Corp. (c) | 20,400 | 507,756 | ||||||
Universal Stainless & Alloy Products, Inc. * | 1,800 | 58,176 | ||||||
US Silica Holdings, Inc. (c) | 10,600 | 369,092 | ||||||
Valhi, Inc. | 13,600 | 249,832 | ||||||
Vulcan Materials Co. | 19,592 | 1,049,152 | ||||||
W.R. Grace & Co. * | 12,100 | 1,109,086 | ||||||
Walter Energy, Inc. (c) | 8,900 | 141,421 | ||||||
Wausau Paper Corp. | 8,700 | 101,790 | ||||||
Westlake Chemical Corp. | 2,800 | 300,776 | ||||||
Worthington Industries, Inc. | 7,200 | 291,888 | ||||||
Zep, Inc. | 6,600 | 131,274 | ||||||
118,685,864 | ||||||||
Media 3.5% | ||||||||
AH Belo Corp., Class A | 13,980 | 112,399 | ||||||
AMC Networks, Inc., Class A * | 8,400 | 588,756 | ||||||
Belo Corp., Class A | 13,100 | 179,863 | ||||||
Cablevision Systems Corp., Class A | 33,200 | 516,260 | ||||||
Carmike Cinemas, Inc. * | 6,300 | 144,207 | ||||||
CBS Corp., Class B - Non Voting Shares | 89,506 | 5,293,385 | ||||||
Central European Media Enterprises Ltd., Class A * | 9,900 | 30,393 | ||||||
Charter Communications, Inc., Class A * | 10,100 | 1,355,824 | ||||||
Cinemark Holdings, Inc. | 14,500 | 475,745 | ||||||
Clear Channel Outdoor Holdings, Inc., Class A * | 20,700 | 175,950 | ||||||
Comcast Corp., Class A | 411,104 | 19,560,328 | ||||||
Crown Media Holdings, Inc., Class A * | 6,000 | 19,920 | ||||||
Cumulus Media, Inc., Class A * | 25,351 | 151,599 | ||||||
Digital Generation, Inc. * | 8,300 | 104,995 | ||||||
DIRECTV * | 80,526 | 5,032,070 | ||||||
Discovery Communications, Inc., Class A * | 38,461 | 3,419,952 | ||||||
DISH Network Corp., Class A | 33,100 | 1,595,420 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 10,200 | 349,248 | ||||||
Entercom Communications Corp., Class A * | 11,000 | 96,470 | ||||||
Gannett Co., Inc. | 33,500 | 926,945 | ||||||
Harte-Hanks, Inc. | 17,200 | 137,084 | ||||||
John Wiley & Sons, Inc., Class A | 6,300 | 316,827 | ||||||
Journal Communications, Inc., Class A * | 16,900 | 141,115 | ||||||
Lamar Advertising Co., Class A * | 9,200 | 420,532 | ||||||
Liberty Global plc, Class A * | 59,275 | 4,645,382 | ||||||
Liberty Media Corp., Class A * | 17,495 | 2,675,160 | ||||||
Live Nation Entertainment, Inc. * | 19,957 | 387,964 | ||||||
Loral Space & Communications, Inc. | 1,500 | 107,055 |
50 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Martha Stewart Living Omnimedia, Inc., Class A * | 26,100 | 66,816 | ||||||
Media General, Inc., Class A (c)* | 6,800 | 99,144 | ||||||
Meredith Corp. | 5,100 | 261,630 | ||||||
Morningstar, Inc. | 3,200 | 256,928 | ||||||
National CineMedia, Inc. | 7,900 | 138,408 | ||||||
News Corp., Class A * | 76,187 | 1,340,891 | ||||||
Omnicom Group, Inc. | 41,100 | 2,799,321 | ||||||
Regal Entertainment Group, Class A | 12,100 | 230,021 | ||||||
Salem Communications Corp., Class A | 5,700 | 47,082 | ||||||
Scholastic Corp. | 3,700 | 106,153 | ||||||
Scripps Networks Interactive, Class A | 17,300 | 1,392,650 | ||||||
Sinclair Broadcast Group, Inc., Class A | 11,000 | 352,660 | ||||||
Sirius XM Radio, Inc. | 485,300 | 1,829,581 | ||||||
Starz, Class A * | 16,195 | 488,279 | ||||||
The E.W. Scripps Co., Class A * | 9,800 | 194,236 | ||||||
The Interpublic Group of Cos., Inc. | 64,337 | 1,080,862 | ||||||
The Madison Square Garden Co., Class A * | 10,175 | 615,791 | ||||||
The New York Times Co., Class A | 17,300 | 239,259 | ||||||
The Walt Disney Co. | 261,993 | 17,970,100 | ||||||
The Washington Post Co., Class B | 600 | 385,992 | ||||||
Time Warner Cable, Inc. | 45,711 | 5,492,177 | ||||||
Time Warner, Inc. | 145,550 | 10,005,107 | ||||||
Twenty-First Century Fox, Inc. | 310,750 | 10,590,360 | ||||||
Valassis Communications, Inc. (c) | 5,700 | 155,952 | ||||||
Viacom Inc., Class B | 69,906 | 5,822,471 | ||||||
World Wrestling Entertainment, Inc., Class A | 9,100 | 117,845 | ||||||
111,040,564 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.8% | ||||||||
AbbVie, Inc. | 250,005 | 12,112,742 | ||||||
ACADIA Pharmaceuticals, Inc. * | 11,300 | 256,849 | ||||||
Acorda Therapeutics, Inc. * | 5,000 | 153,050 | ||||||
Actavis plc * | 27,368 | 4,230,545 | ||||||
Acura Pharmaceuticals, Inc. (c)* | 20,900 | 35,530 | ||||||
Aegerion Pharmaceuticals, Inc. * | 3,800 | 314,716 | ||||||
Affymetrix, Inc. * | 25,500 | 180,285 | ||||||
Agilent Technologies, Inc. | 54,717 | 2,777,435 | ||||||
Akorn, Inc. * | 15,400 | 314,776 | ||||||
Albany Molecular Research, Inc. * | 8,800 | 115,280 | ||||||
Alexion Pharmaceuticals, Inc. * | 30,700 | 3,774,565 | ||||||
Alkermes plc * | 20,300 | 714,357 | ||||||
Allergan, Inc. | 46,868 | 4,246,709 | ||||||
Alnylam Pharmaceuticals, Inc. * | 7,400 | 426,314 | ||||||
AMAG Pharmaceuticals, Inc. * | 6,600 | 178,068 | ||||||
Amgen, Inc. | 118,768 | 13,777,088 | ||||||
Amicus Therapeutics, Inc. * | 13,800 | 29,256 | ||||||
Arena Pharmaceuticals, Inc. (c)* | 32,100 | 140,919 | ||||||
ARIAD Pharmaceuticals, Inc. * | 28,700 | 63,140 | ||||||
ArQule, Inc. * | 21,000 | 47,250 | ||||||
Array BioPharma, Inc. * | 24,800 | 124,496 | ||||||
Auxilium Pharmaceuticals, Inc. * | 12,500 | 215,125 | ||||||
AVANIR Pharmaceuticals, Inc., Class A * | 28,700 | 116,235 | ||||||
AVEO Pharmaceuticals, Inc. * | 15,100 | 31,257 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 3,000 | 370,560 | ||||||
BioCryst Pharmaceuticals, Inc. (c)* | 23,900 | 137,545 | ||||||
Biogen Idec, Inc. * | 37,625 | 9,187,649 | ||||||
BioMarin Pharmaceutical, Inc. * | 22,000 | 1,382,040 | ||||||
Biota Pharmaceuticals, Inc. | 1,716 | 6,572 | ||||||
Bristol-Myers Squibb Co. | 259,650 | 13,636,818 | ||||||
Bruker Corp. * | 14,600 | 298,570 | ||||||
Cambrex Corp. * | 7,200 | 121,104 | ||||||
Celgene Corp. * | 65,145 | 9,673,381 | ||||||
Celldex Therapeutics, Inc. * | 15,200 | 348,232 | ||||||
Cepheid, Inc. * | 9,800 | 399,056 | ||||||
Charles River Laboratories International, Inc. * | 7,416 | 364,941 | ||||||
Clovis Oncology, Inc. * | 3,000 | 153,330 | ||||||
Codexis, Inc. * | 1,870 | 3,254 | ||||||
Covance, Inc. * | 8,800 | 785,488 | ||||||
Cubist Pharmaceuticals, Inc. * | 10,900 | 675,800 | ||||||
Dendreon Corp. (c)* | 23,500 | 60,395 | ||||||
DepoMed, Inc. * | 34,500 | 248,400 | ||||||
Durect Corp. * | 14,500 | 21,750 | ||||||
Dyax Corp. * | 31,000 | 254,820 | ||||||
Dynavax Technologies Corp. * | 30,500 | 37,515 | ||||||
Eli Lilly & Co. | 156,800 | 7,811,776 | ||||||
Emergent Biosolutions, Inc. * | 6,000 | 117,180 | ||||||
Endo Health Solutions, Inc. * | 18,200 | 795,886 | ||||||
Endocyte, Inc. * | 11,300 | 117,859 | ||||||
Enzo Biochem, Inc. * | 9,281 | 23,110 | ||||||
Enzon Pharmaceuticals, Inc. | 21,300 | 31,524 | ||||||
Exact Sciences Corp. * | 16,300 | 179,626 | ||||||
Exelixis, Inc. (c)* | 44,700 | 220,371 | ||||||
Fluidigm Corp. * | 6,000 | 189,000 | ||||||
Forest Laboratories, Inc. * | 36,300 | 1,707,189 | ||||||
FRD Acquisition Co. (b)(g) | 8,700 | — | ||||||
Furiex Pharmaceuticals, Inc. * | 3,400 | 132,940 | ||||||
Genomic Health, Inc. * | 5,000 | 149,600 | ||||||
Geron Corp. * | 46,200 | 182,490 | ||||||
Gilead Sciences, Inc. * | 241,380 | 17,135,566 | ||||||
GTx, Inc. (c)* | 15,900 | 27,189 | ||||||
Halozyme Therapeutics, Inc. * | 28,000 | 326,200 | ||||||
Harvard Bioscience, Inc. * | 19,300 | 113,677 | ||||||
Hi-Tech Pharmacal Co., Inc. | 3,000 | 129,270 | ||||||
Hospira, Inc. * | 24,670 | 999,628 | ||||||
Idenix Pharmaceuticals, Inc. (c)* | 28,800 | 94,752 | ||||||
Illumina, Inc. * | 19,300 | 1,804,743 | ||||||
ImmunoGen, Inc. * | 10,000 | 164,600 | ||||||
Immunomedics, Inc. * | 25,800 | 97,782 | ||||||
Impax Laboratories, Inc. * | 8,500 | 172,210 | ||||||
Incyte Corp. * | 23,200 | 904,800 | ||||||
Infinity Pharmaceuticals, Inc. * | 11,700 | 158,535 | ||||||
InterMune, Inc. * | 12,600 | 177,534 | ||||||
Ironwood Pharmaceuticals, Inc. * | 19,800 | 190,278 | ||||||
Isis Pharmaceuticals, Inc. * | 18,600 | 618,822 | ||||||
Jazz Pharmaceuticals plc * | 8,000 | 725,920 | ||||||
Johnson & Johnson | 444,370 | 41,153,106 | ||||||
Lexicon Pharmaceuticals, Inc. * | 69,600 | 167,040 | ||||||
Life Technologies Corp. * | 26,462 | 1,992,853 | ||||||
Ligand Pharmaceuticals, Inc., Class B * | 4,948 | 256,108 | ||||||
Luminex Corp. * | 12,900 | 251,550 | ||||||
Mallinckrodt plc * | 8,950 | 375,990 | ||||||
MannKind Corp. (c)* | 40,800 | 199,512 |
See financial notes 51
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Medivation, Inc. * | 10,800 | 646,488 | ||||||
Merck & Co., Inc. | 464,470 | 20,942,952 | ||||||
Merrimack Pharmaceuticals, Inc. (c)* | 15,700 | 42,076 | ||||||
Mettler-Toledo International, Inc. * | 4,800 | 1,187,808 | ||||||
Momenta Pharmaceuticals, Inc. * | 13,500 | 221,265 | ||||||
Mylan, Inc. * | 60,200 | 2,279,774 | ||||||
Myriad Genetics, Inc. (c)* | 11,100 | 270,618 | ||||||
Nektar Therapeutics * | 18,300 | 174,033 | ||||||
Neurocrine Biosciences, Inc. * | 10,900 | 102,896 | ||||||
Novavax, Inc. * | 52,500 | 162,750 | ||||||
NPS Pharmaceuticals, Inc. * | 14,800 | 425,944 | ||||||
Oncothyreon, Inc. (c)* | 25,700 | 45,489 | ||||||
Opko Health, Inc. (c)* | 33,700 | 337,674 | ||||||
Pacira Pharmaceuticals, Inc. * | 6,500 | 328,315 | ||||||
Pain Therapeutics, Inc. * | 18,600 | 68,076 | ||||||
PAREXEL International Corp. * | 7,800 | 356,538 | ||||||
PDL Biopharma, Inc. (c) | 28,700 | 232,183 | ||||||
PerkinElmer, Inc. | 16,077 | 611,569 | ||||||
Perrigo Co. | 14,800 | 2,040,772 | ||||||
Pfizer, Inc. | 1,041,701 | 31,959,387 | ||||||
Pharmacyclics, Inc. * | 10,500 | 1,245,720 | ||||||
Pozen, Inc. * | 16,100 | 101,189 | ||||||
Puma Biotechnology, Inc. * | 5,000 | 191,550 | ||||||
Questcor Pharmaceuticals, Inc. | 8,000 | 490,960 | ||||||
Quintiles Transnational Holdings, Inc. * | 3,500 | 146,965 | ||||||
Regeneron Pharmaceuticals, Inc. * | 12,300 | 3,537,480 | ||||||
Rigel Pharmaceuticals, Inc. * | 48,200 | 148,938 | ||||||
Sagent Pharmaceuticals, Inc. * | 5,500 | 119,295 | ||||||
Salix Pharmaceuticals Ltd. * | 10,100 | 724,675 | ||||||
Sangamo BioSciences, Inc. * | 14,600 | 136,802 | ||||||
Santarus, Inc. * | 10,500 | 244,965 | ||||||
Sarepta Therapeutics, Inc. (c)* | 4,500 | 175,230 | ||||||
Seattle Genetics, Inc. * | 17,900 | 691,477 | ||||||
Sequenom, Inc. (c)* | 23,200 | 44,544 | ||||||
Spectrum Pharmaceuticals, Inc. | 24,200 | 207,878 | ||||||
Sucampo Pharmaceuticals, Inc., Class A * | 12,400 | 76,880 | ||||||
Synageva BioPharma Corp. * | 4,100 | 208,280 | ||||||
Synta Pharmaceuticals Corp. (c)* | 12,000 | 54,480 | ||||||
Techne Corp. | 5,800 | 506,862 | ||||||
The Medicines Co. * | 8,300 | 281,536 | ||||||
Theravance, Inc. * | 9,700 | 355,408 | ||||||
Thermo Fisher Scientific, Inc. | 56,802 | 5,554,100 | ||||||
United Therapeutics Corp. * | 6,900 | 610,788 | ||||||
Vertex Pharmaceuticals, Inc. * | 36,744 | 2,621,317 | ||||||
Vical, Inc. * | 34,400 | 43,000 | ||||||
ViroPharma, Inc. * | 9,700 | 376,554 | ||||||
VIVUS, Inc. (c)* | 23,400 | 219,726 | ||||||
Waters Corp. * | 12,900 | 1,301,868 | ||||||
Xenoport, Inc. * | 12,600 | 65,898 | ||||||
Zalicus, Inc. (c)* | 8,433 | 36,937 | ||||||
ZIOPHARM Oncology, Inc. * | 22,800 | 80,712 | ||||||
Zoetis, Inc. | 79,700 | 2,523,302 | ||||||
248,001,346 | ||||||||
Real Estate 3.4% | ||||||||
Acadia Realty Trust | 9,600 | 256,032 | ||||||
AG Mortgage Investment Trust, Inc. | 12,000 | 196,080 | ||||||
Agree Realty Corp. | 5,000 | 157,850 | ||||||
Alexander & Baldwin, Inc. * | 6,400 | 236,800 | ||||||
Alexander’s, Inc. | 800 | 257,408 | ||||||
Alexandria Real Estate Equities, Inc. | 10,900 | 717,002 | ||||||
Altisource Portfolio Solutions S.A. * | 2,200 | 346,016 | ||||||
American Assets Trust, Inc. | 8,000 | 266,320 | ||||||
American Campus Communities, Inc. | 15,000 | 518,400 | ||||||
American Capital Agency Corp. | 62,500 | 1,357,500 | ||||||
American Capital Mortgage Investment Corp. | 9,000 | 171,990 | ||||||
American Realty Capital Properties, Inc. (c) | 30,400 | 403,408 | ||||||
American Realty Investors, Inc. * | 1,537 | 8,146 | ||||||
American Tower Corp. | 62,000 | 4,919,700 | ||||||
Annaly Capital Management, Inc. | 153,200 | 1,806,228 | ||||||
Anworth Mortgage Asset Corp. | 24,200 | 118,822 | ||||||
Apartment Investment & Management Co., Class A | 23,111 | 646,646 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 11,400 | 183,654 | ||||||
Apollo Residential Mortgage, Inc. | 12,900 | 194,274 | ||||||
ARMOUR Residential REIT, Inc. | 61,000 | 251,320 | ||||||
Ashford Hospitality Trust | 9,000 | 117,540 | ||||||
Associated Estates Realty Corp. | 6,900 | 105,846 | ||||||
AV Homes, Inc. * | 6,500 | 124,150 | ||||||
AvalonBay Communities, Inc. | 19,692 | 2,462,485 | ||||||
BioMed Realty Trust, Inc. | 27,600 | 549,792 | ||||||
Boston Properties, Inc. | 24,700 | 2,556,450 | ||||||
Brandywine Realty Trust | 21,063 | 299,726 | ||||||
BRE Properties, Inc. | 11,000 | 600,710 | ||||||
Camden Property Trust | 12,500 | 802,500 | ||||||
Campus Crest Communities, Inc. | 17,900 | 179,179 | ||||||
Capstead Mortgage Corp. | 13,440 | 158,995 | ||||||
CBL & Associates Properties, Inc. | 26,785 | 530,611 | ||||||
CBRE Group, Inc., Class A * | 46,800 | 1,087,164 | ||||||
Cedar Realty Trust, Inc. | 33,200 | 189,572 | ||||||
Chambers Street Properties (c) | 37,300 | 348,009 | ||||||
Chesapeake Lodging Trust | 8,500 | 200,345 | ||||||
Chimera Investment Corp. | 146,600 | 444,198 | ||||||
Cole Real Estate Investment, Inc. | 65,900 | 935,780 | ||||||
Colony Financial, Inc. | 12,600 | 254,898 | ||||||
CommonWealth REIT | 17,650 | 430,130 | ||||||
Consolidated-Tomoka Land Co. | 2,000 | 75,040 | ||||||
Coresite Realty Corp. | 3,400 | 110,296 | ||||||
Corporate Office Properties Trust | 11,400 | 280,440 | ||||||
Corrections Corp. of America | 16,285 | 602,545 | ||||||
Cousins Properties, Inc. | 28,345 | 321,149 | ||||||
CubeSmart | 17,300 | 316,071 | ||||||
CYS Investments, Inc. | 25,500 | 216,495 | ||||||
DCT Industrial Trust, Inc. | 45,000 | 348,750 | ||||||
DDR Corp. | 39,584 | 670,949 | ||||||
DiamondRock Hospitality Co. | 26,686 | 303,954 | ||||||
Digital Realty Trust, Inc. (c) | 19,400 | 924,604 | ||||||
Douglas Emmett, Inc. | 19,200 | 478,656 | ||||||
Duke Realty Corp. | 50,590 | 838,276 | ||||||
DuPont Fabros Technology, Inc. | 9,200 | 228,620 | ||||||
EastGroup Properties, Inc. | 3,900 | 248,274 | ||||||
Education Realty Trust, Inc. | 27,500 | 251,350 | ||||||
EPR Properties | 6,600 | 339,042 |
52 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Equity Lifestyle Properties, Inc. | 12,000 | 455,880 | ||||||
Equity One, Inc. | 12,100 | 291,731 | ||||||
Equity Residential | 53,500 | 2,801,260 | ||||||
Essex Property Trust, Inc. | 6,300 | 1,014,300 | ||||||
Excel Trust, Inc. | 14,000 | 169,120 | ||||||
Extra Space Storage, Inc. | 16,500 | 758,835 | ||||||
Federal Realty Investment Trust | 11,200 | 1,160,320 | ||||||
FelCor Lodging Trust, Inc. * | 18,200 | 122,304 | ||||||
First Industrial Realty Trust, Inc. | 15,900 | 287,313 | ||||||
First Potomac Realty Trust | 14,800 | 181,892 | ||||||
Forest City Enterprises, Inc., Class A * | 23,900 | 484,214 | ||||||
Forestar Group, Inc. * | 4,933 | 110,154 | ||||||
Franklin Street Properties Corp. | 14,000 | 184,800 | ||||||
General Growth Properties, Inc. | 89,309 | 1,896,030 | ||||||
Getty Realty Corp. | 9,500 | 182,210 | ||||||
Glimcher Realty Trust | 20,000 | 205,000 | ||||||
Government Properties Income Trust | 9,900 | 242,055 | ||||||
Gramercy Property Trust, Inc. * | 27,228 | 124,432 | ||||||
Hatteras Financial Corp. | 13,800 | 251,160 | ||||||
HCP, Inc. | 70,648 | 2,931,892 | ||||||
Health Care REIT, Inc. | 46,200 | 2,996,070 | ||||||
Healthcare Realty Trust, Inc. | 12,700 | 304,927 | ||||||
Healthcare Trust of America, Inc., Class A | 27,300 | 317,226 | ||||||
Hersha Hospitality Trust | 40,000 | 226,800 | ||||||
Highwoods Properties, Inc. | 13,300 | 513,380 | ||||||
Home Properties, Inc. | 9,500 | 572,945 | ||||||
Hospitality Properties Trust | 21,600 | 634,608 | ||||||
Host Hotels & Resorts, Inc. | 116,963 | 2,169,664 | ||||||
Howard Hughes Corp. * | 5,100 | 596,955 | ||||||
Hudson Pacific Properties, Inc. | 9,100 | 188,279 | ||||||
Inland Real Estate Corp. | 20,300 | 217,007 | ||||||
Invesco Mortgage Capital, Inc. | 18,000 | 278,100 | ||||||
Investors Real Estate Trust | 11,500 | 99,130 | ||||||
iStar Financial, Inc. * | 13,390 | 169,116 | ||||||
Jones Lang LaSalle, Inc. | 6,600 | 628,320 | ||||||
Kennedy-Wilson Holdings, Inc. | 12,200 | 244,488 | ||||||
Kilroy Realty Corp. | 12,900 | 685,764 | ||||||
Kimco Realty Corp. | 62,795 | 1,348,837 | ||||||
Kite Realty Group Trust | 31,300 | 200,320 | ||||||
LaSalle Hotel Properties | 13,700 | 425,385 | ||||||
Lexington Realty Trust | 26,267 | 307,324 | ||||||
Liberty Property Trust | 22,500 | 836,775 | ||||||
LTC Properties, Inc. | 4,800 | 189,360 | ||||||
Mack-Cali Realty Corp. | 11,400 | 234,384 | ||||||
Maui Land & Pineapple Co., Inc. * | 800 | 3,408 | ||||||
Medical Properties Trust, Inc. | 20,200 | 263,408 | ||||||
MFA Financial, Inc. | 51,000 | 377,910 | ||||||
Mid-America Apartment Communities, Inc. | 10,544 | 700,122 | ||||||
Monmouth Real Estate Investment Corp., Class A | 18,100 | 166,882 | ||||||
National Health Investors, Inc. | 3,400 | 212,568 | ||||||
National Retail Properties, Inc. | 17,920 | 616,448 | ||||||
New Century Financial Corp. (b)(g)* | 3,600 | — | ||||||
NorthStar Realty Finance Corp. | 29,500 | 275,235 | ||||||
Omega Healthcare Investors, Inc. | 16,684 | 554,576 | ||||||
One Liberty Properties, Inc. | 1,400 | 29,596 | ||||||
Parkway Properties, Inc. | 12,800 | 231,808 | ||||||
Pebblebrook Hotel Trust | 8,000 | 241,600 | ||||||
Pennsylvania Real Estate Investment Trust | 8,500 | 154,105 | ||||||
PennyMac Mortgage Investment Trust | 8,100 | 186,867 | ||||||
Piedmont Office Realty Trust, Inc., Class A | 23,000 | 425,040 | ||||||
Plum Creek Timber Co., Inc. | 24,547 | 1,114,434 | ||||||
PMC Commercial Trust | 8,500 | 75,225 | ||||||
Post Properties, Inc. | 8,200 | 375,068 | ||||||
Potlatch Corp. | 5,753 | 234,895 | ||||||
Preferred Apartment Communities, Inc., Class A (c) | 3,700 | 30,636 | ||||||
Prologis, Inc. | 77,334 | 3,089,493 | ||||||
PS Business Parks, Inc. | 3,000 | 244,470 | ||||||
Public Storage | 23,190 | 3,872,034 | ||||||
RAIT Financial Trust | 16,199 | 122,302 | ||||||
Ramco-Gershenson Properties Trust | 6,900 | 112,194 | ||||||
Rayonier, Inc. | 19,382 | 911,342 | ||||||
Realogy Holdings Corp. * | 24,700 | 1,016,158 | ||||||
Realty Income Corp. | 29,435 | 1,225,968 | ||||||
Redwood Trust, Inc. | 11,300 | 197,976 | ||||||
Regency Centers Corp. | 14,200 | 733,572 | ||||||
Resource Capital Corp. | 28,600 | 175,890 | ||||||
Retail Opportunity Investments Corp. | 14,400 | 213,120 | ||||||
Retail Properties of America, Inc., Class A | 28,700 | 410,697 | ||||||
RLJ Lodging Trust | 16,700 | 421,842 | ||||||
Rouse Properties, Inc. | 5,815 | 117,579 | ||||||
Ryman Hospitality Properties, Inc. | 7,837 | 289,264 | ||||||
Sabra Health Care REIT, Inc. | 8,000 | 215,200 | ||||||
Saul Centers, Inc. | 4,700 | 220,900 | ||||||
Select Income REIT | 8,600 | 236,930 | ||||||
Senior Housing Properties Trust | 27,850 | 686,224 | ||||||
Silver Bay Realty Trust Corp. | 13,033 | 201,490 | ||||||
Simon Property Group, Inc. | 48,583 | 7,508,503 | ||||||
SL Green Realty Corp. | 14,150 | 1,338,165 | ||||||
Sovran Self Storage, Inc. | 4,500 | 344,205 | ||||||
Spirit Realty Capital, Inc. | 69,048 | 722,242 | ||||||
STAG Industrial, Inc. | 6,800 | 142,188 | ||||||
Starwood Property Trust, Inc. | 29,500 | 757,855 | ||||||
Strategic Hotels & Resorts, Inc. * | 25,000 | 217,500 | ||||||
Summit Hotel Properties, Inc. | 9,600 | 88,224 | ||||||
Sun Communities, Inc. | 6,000 | 267,420 | ||||||
Sunstone Hotel Investors, Inc. | 27,600 | 365,700 | ||||||
Tanger Factory Outlet Centers, Inc. | 13,700 | 477,445 | ||||||
Taubman Centers, Inc. | 10,100 | 664,479 | ||||||
Tejon Ranch Co. * | 3,674 | 136,011 | ||||||
The Geo Group, Inc. | 9,999 | 352,665 | ||||||
The Macerich Co. | 22,405 | 1,326,600 | ||||||
The St. Joe Co. * | 12,900 | 240,843 | ||||||
Thomas Properties Group, Inc. | 5,600 | 38,080 | ||||||
Two Harbors Investment Corp. | 60,300 | 562,599 | ||||||
UDR, Inc. | 36,961 | 917,002 | ||||||
UMH Properties, Inc. | 7,900 | 79,474 | ||||||
Universal Health Realty Income Trust | 4,700 | 206,424 | ||||||
Urstadt Biddle Properties, Inc., Class A | 4,500 | 88,830 | ||||||
Ventas, Inc. | 47,350 | 3,089,114 |
See financial notes 53
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Vornado Realty Trust REIT | 28,041 | 2,497,331 | ||||||
Washington Real Estate Investment Trust | 9,700 | 254,237 | ||||||
Weingarten Realty Investors | 17,175 | 544,963 | ||||||
Western Asset Mortgage Capital Corp. (c) | 4,200 | 67,662 | ||||||
Weyerhaeuser Co. | 89,992 | 2,735,757 | ||||||
Whitestone REIT | 2,100 | 28,959 | ||||||
Winthrop Realty Trust | 10,000 | 117,700 | ||||||
WP Carey, Inc. | 8,100 | 539,541 | ||||||
107,888,447 | ||||||||
Retailing 4.4% | ||||||||
Aaron’s, Inc. | 9,375 | 265,969 | ||||||
Abercrombie & Fitch Co., Class A | 11,800 | 442,264 | ||||||
Advance Auto Parts, Inc. | 10,940 | 1,085,029 | ||||||
Aeropostale, Inc. (c)* | 9,900 | 91,971 | ||||||
ALCO Stores, Inc. * | 1,800 | 19,836 | ||||||
Amazon.com, Inc. * | 58,400 | 21,259,352 | ||||||
America’s Car-Mart, Inc. * | 2,650 | 121,211 | ||||||
American Eagle Outfitters, Inc. | 27,450 | 425,200 | ||||||
ANN, Inc. * | 6,625 | 234,260 | ||||||
Asbury Automotive Group, Inc. * | 4,100 | 197,005 | ||||||
Ascena Retail Group, Inc. * | 17,636 | 349,016 | ||||||
AutoNation, Inc. * | 10,100 | 487,123 | ||||||
AutoZone, Inc. * | 5,800 | 2,521,202 | ||||||
Barnes & Noble, Inc. * | 7,400 | 104,562 | ||||||
Bed Bath & Beyond, Inc. * | 34,200 | 2,644,344 | ||||||
Best Buy Co., Inc. | 43,025 | 1,841,470 | ||||||
Big Lots, Inc. * | 8,000 | 290,880 | ||||||
Brown Shoe Co., Inc. | 6,675 | 149,787 | ||||||
Cabela’s, Inc. * | 6,500 | 385,580 | ||||||
CarMax, Inc. * | 35,146 | 1,651,511 | ||||||
Chico’s FAS, Inc. | 22,800 | 391,020 | ||||||
Christopher & Banks Corp. * | 13,400 | 77,318 | ||||||
Coldwater Creek, Inc. (c)* | 16,125 | 16,125 | ||||||
Conn’s, Inc. * | 3,300 | 199,452 | ||||||
Core-Mark Holding Co., Inc. | 2,000 | 141,460 | ||||||
CST Brands, Inc. | 9,386 | 302,605 | ||||||
Destination Maternity Corp. | 5,000 | 156,200 | ||||||
Dick’s Sporting Goods, Inc. | 14,600 | 776,866 | ||||||
Dillard’s, Inc., Class A | 4,300 | 352,514 | ||||||
Dollar General Corp. * | 46,700 | 2,698,326 | ||||||
Dollar Tree, Inc. * | 35,350 | 2,064,440 | ||||||
DSW, Inc., Class A | 5,780 | 506,733 | ||||||
Expedia, Inc. | 16,972 | 999,311 | ||||||
Express, Inc. * | 12,600 | 292,446 | ||||||
Family Dollar Stores, Inc. | 14,100 | 971,208 | ||||||
Five Below, Inc. * | 6,100 | 294,386 | ||||||
Foot Locker, Inc. | 23,800 | 825,860 | ||||||
Francesca’s Holdings Corp. * | 4,900 | 88,151 | ||||||
Fred’s, Inc., Class A | 6,700 | 108,540 | ||||||
GameStop Corp., Class A | 17,548 | 961,981 | ||||||
Geeknet, Inc. * | 452 | 8,669 | ||||||
Genesco, Inc. * | 4,300 | 292,873 | ||||||
Genuine Parts Co. | 24,000 | 1,891,920 | ||||||
GNC Holdings, Inc., Class A | 15,500 | 911,710 | ||||||
Group 1 Automotive, Inc. | 4,400 | 281,600 | ||||||
Groupon, Inc. * | 58,800 | 536,844 | ||||||
Guess?, Inc. | 7,900 | 246,875 | ||||||
Hibbett Sports, Inc. * | 3,543 | 206,663 | ||||||
HomeAway, Inc. * | 7,300 | 216,445 | ||||||
HSN, Inc. | 6,269 | 328,496 | ||||||
J.C. Penney Co., Inc. (c)* | 30,300 | 227,250 | ||||||
Jos. A. Bank Clothiers, Inc. * | 3,600 | 172,728 | ||||||
Kirkland’s, Inc. * | 8,700 | 154,425 | ||||||
Kohl’s Corp. | 31,600 | 1,794,880 | ||||||
L Brands, Inc. | 37,020 | 2,317,822 | ||||||
Liberty Interactive Corp., Class A * | 81,009 | 2,184,003 | ||||||
Liberty Ventures, Series A * | 5,665 | 608,251 | ||||||
Lithia Motors, Inc., Class A | 3,300 | 207,405 | ||||||
LKQ Corp. * | 46,700 | 1,542,501 | ||||||
Lowe’s Cos., Inc. | 167,500 | 8,338,150 | ||||||
Lumber Liquidators Holdings, Inc. * | 4,600 | 525,274 | ||||||
Macy’s, Inc. | 61,052 | 2,815,108 | ||||||
MarineMax, Inc. * | 7,000 | 103,110 | ||||||
Monro Muffler Brake, Inc. | 4,462 | 205,252 | ||||||
Murphy USA, Inc. * | 6,875 | 278,987 | ||||||
Netflix, Inc. * | 9,300 | 2,999,064 | ||||||
Nordstrom, Inc. | 22,500 | 1,360,575 | ||||||
O’Reilly Automotive, Inc. * | 16,699 | 2,067,503 | ||||||
Office Depot, Inc. * | 69,900 | 390,741 | ||||||
OfficeMax, Inc. | 22,400 | 335,552 | ||||||
Pacific Sunwear of California, Inc. * | 41,175 | 110,761 | ||||||
Penske Automotive Group, Inc. | 6,300 | 249,606 | ||||||
PetSmart, Inc. | 15,900 | 1,156,884 | ||||||
Pier 1 Imports, Inc. | 15,800 | 329,904 | ||||||
Pool Corp. | 6,662 | 362,280 | ||||||
Priceline.com, Inc. * | 8,083 | 8,518,108 | ||||||
RadioShack Corp. (c)* | 27,200 | 76,432 | ||||||
Rent-A-Center, Inc. | 7,750 | 265,360 | ||||||
Restoration Hardware Holdings, Inc. * | 4,200 | 292,908 | ||||||
Ross Stores, Inc. | 34,200 | 2,645,370 | ||||||
Saks, Inc. * | 14,800 | 236,652 | ||||||
Sally Beauty Holdings, Inc. * | 24,850 | 654,052 | ||||||
Sears Holdings Corp. (c)* | 6,385 | 370,841 | ||||||
Select Comfort Corp. * | 7,300 | 133,736 | ||||||
Shoe Carnival, Inc. | 6,300 | 163,737 | ||||||
Shutterfly, Inc. * | 4,600 | 226,044 | ||||||
Signet Jewelers Ltd. | 12,500 | 933,250 | ||||||
Sonic Automotive, Inc., Class A | 4,400 | 98,032 | ||||||
Stage Stores, Inc. | 5,700 | 117,705 | ||||||
Staples, Inc. | 107,500 | 1,732,900 | ||||||
Stein Mart, Inc. | 10,300 | 152,131 | ||||||
Systemax, Inc. | 8,000 | 76,000 | ||||||
Target Corp. | 100,400 | 6,504,916 | ||||||
The Buckle, Inc. | 3,875 | 189,643 | ||||||
The Cato Corp., Class A | 3,800 | 113,886 | ||||||
The Children’s Place Retail Stores, Inc. * | 3,600 | 196,524 | ||||||
The Finish Line, Inc., Class A | 7,161 | 179,311 | ||||||
The Gap, Inc. | 46,400 | 1,716,336 | ||||||
The Home Depot, Inc. | 228,070 | 17,764,372 | ||||||
The Men’s Wearhouse, Inc. | 6,600 | 279,180 | ||||||
The Pep Boys - Manny, Moe & Jack * | 7,900 | 102,226 | ||||||
The TJX Cos., Inc. | 113,400 | 6,893,586 | ||||||
The Wet Seal, Inc., Class A * | 31,400 | 103,934 | ||||||
Tiffany & Co. | 18,600 | 1,472,562 | ||||||
Tractor Supply Co. | 21,000 | 1,498,350 |
54 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Trans World Entertainment Corp. | 9,700 | 42,001 | ||||||
TripAdvisor, Inc. * | 17,272 | 1,428,567 | ||||||
Tuesday Morning Corp. * | 10,800 | 152,820 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. * | 10,100 | 1,301,385 | ||||||
Urban Outfitters, Inc. * | 15,800 | 598,504 | ||||||
Vitamin Shoppe, Inc. * | 4,200 | 197,022 | ||||||
VOXX International Corp. * | 9,100 | 141,141 | ||||||
West Marine, Inc. * | 8,200 | 100,122 | ||||||
Williams-Sonoma, Inc. | 14,000 | 734,160 | ||||||
Winmark Corp. | 1,700 | 124,457 | ||||||
Zale Corp. * | 17,420 | 272,275 | ||||||
Zumiez, Inc. * | 4,500 | 133,380 | ||||||
141,486,543 | ||||||||
Semiconductors & Semiconductor Equipment 2.1% | ||||||||
Advanced Energy Industries, Inc. * | 6,900 | 144,072 | ||||||
Advanced Micro Devices, Inc. (c)* | 84,700 | 282,898 | ||||||
Altera Corp. | 49,300 | 1,656,480 | ||||||
Amkor Technology, Inc. * | 49,300 | 261,783 | ||||||
Amtech Systems, Inc. * | 3,500 | 28,000 | ||||||
ANADIGICS, Inc. * | 8,150 | 16,463 | ||||||
Analog Devices, Inc. | 49,000 | 2,415,700 | ||||||
Applied Materials, Inc. | 184,998 | 3,302,214 | ||||||
Applied Micro Circuits Corp. * | 12,800 | 149,248 | ||||||
Atmel Corp. * | 64,100 | 466,648 | ||||||
ATMI, Inc. * | 4,400 | 120,296 | ||||||
Avago Technologies Ltd. | 38,900 | 1,767,227 | ||||||
AXT, Inc. * | 3,500 | 7,910 | ||||||
Broadcom Corp., Class A | 86,700 | 2,316,624 | ||||||
Brooks Automation, Inc. | 11,885 | 114,571 | ||||||
Cabot Microelectronics Corp. * | 5,660 | 231,437 | ||||||
Cavium, Inc. * | 7,000 | 282,170 | ||||||
CEVA, Inc. * | 7,233 | 103,649 | ||||||
Cirrus Logic, Inc. * | 9,800 | 219,814 | ||||||
Cohu, Inc. | 7,500 | 71,700 | ||||||
Cree, Inc. * | 18,400 | 1,117,800 | ||||||
Cypress Semiconductor Corp. * | 19,500 | 180,960 | ||||||
Diodes, Inc. * | 6,412 | 155,299 | ||||||
DSP Group, Inc. * | 6,300 | 46,935 | ||||||
Entegris, Inc. * | 19,299 | 199,745 | ||||||
Entropic Communications, Inc. * | 20,100 | 86,028 | ||||||
Exar Corp. * | 9,834 | 113,386 | ||||||
Fairchild Semiconductor International, Inc. * | 17,800 | 225,526 | ||||||
First Solar, Inc. * | 10,900 | 547,943 | ||||||
FormFactor, Inc. * | 14,600 | 76,212 | ||||||
GSI Technology, Inc. * | 8,500 | 59,670 | ||||||
GT Advanced Technologies, Inc. * | 29,500 | 221,250 | ||||||
Hittite Microwave Corp. * | 4,500 | 287,505 | ||||||
Integrated Device Technology, Inc. * | 26,920 | 286,429 | ||||||
Integrated Silicon Solutions, Inc. * | 9,338 | 100,664 | ||||||
Intel Corp. | 785,632 | 19,192,990 | ||||||
International Rectifier Corp. * | 8,600 | 223,944 | ||||||
Intersil Corp., Class A | 15,364 | 171,462 | ||||||
IXYS Corp. | 6,900 | 80,247 | ||||||
KLA-Tencor Corp. | 26,800 | 1,758,080 | ||||||
Kopin Corp. * | 19,600 | 71,932 | ||||||
Kulicke & Soffa Industries, Inc. * | 10,400 | 134,160 | ||||||
Lam Research Corp. * | 24,267 | 1,315,999 | ||||||
Lattice Semiconductor Corp. * | 25,100 | 128,763 | ||||||
Linear Technology Corp. | 37,000 | 1,522,180 | ||||||
LSI Corp. | 79,587 | 674,898 | ||||||
Marvell Technology Group Ltd. | 63,700 | 764,400 | ||||||
Maxim Integrated Products, Inc. | 43,100 | 1,280,070 | ||||||
Micrel, Inc. | 9,700 | 89,240 | ||||||
Microchip Technology, Inc. | 30,675 | 1,317,798 | ||||||
Micron Technology, Inc. * | 159,699 | 2,823,478 | ||||||
Microsemi Corp. * | 13,152 | 330,510 | ||||||
MKS Instruments, Inc. | 7,900 | 234,156 | ||||||
Monolithic Power Systems, Inc. | 6,500 | 206,960 | ||||||
MoSys, Inc. * | 6,400 | 28,160 | ||||||
Nanometrics, Inc. * | 5,300 | 98,474 | ||||||
NVIDIA Corp. | 88,700 | 1,346,466 | ||||||
OmniVision Technologies, Inc. * | 7,800 | 109,278 | ||||||
ON Semiconductor Corp. * | 75,165 | 530,665 | ||||||
Pericom Semiconductor Corp. * | 6,600 | 53,328 | ||||||
Photronics, Inc. * | 18,000 | 151,200 | ||||||
PLX Technology, Inc. * | 14,100 | 85,164 | ||||||
PMC-Sierra, Inc. * | 27,300 | 160,251 | ||||||
Power Integrations, Inc. | 4,200 | 241,248 | ||||||
Rambus, Inc. * | 19,600 | 171,304 | ||||||
RF Micro Devices, Inc. * | 40,720 | 213,780 | ||||||
Rudolph Technologies, Inc. * | 16,418 | 174,031 | ||||||
Semtech Corp. * | 9,700 | 301,767 | ||||||
Silicon Image, Inc. * | 19,500 | 102,375 | ||||||
Silicon Laboratories, Inc. * | 5,000 | 201,100 | ||||||
Skyworks Solutions, Inc. * | 28,789 | 742,180 | ||||||
Spansion, Inc., Class A * | 8,600 | 102,942 | ||||||
SunEdison, Inc. * | 38,900 | 361,770 | ||||||
SunPower Corp. (c)* | 14,500 | 437,755 | ||||||
Supertex, Inc. | 4,900 | 124,999 | ||||||
Synaptics, Inc. * | 5,250 | 244,125 | ||||||
Teradyne, Inc. * | 27,359 | 478,509 | ||||||
Tessera Technologies, Inc. | 11,100 | 211,122 | ||||||
Texas Instruments, Inc. | 173,597 | 7,304,962 | ||||||
TriQuint Semiconductor, Inc. * | 32,110 | 254,632 | ||||||
Ultratech, Inc. * | 4,800 | 114,192 | ||||||
Veeco Instruments, Inc. * | 5,500 | 160,655 | ||||||
Xilinx, Inc. | 42,400 | 1,925,808 | ||||||
66,417,765 | ||||||||
Software & Services 9.4% | ||||||||
Accelrys, Inc. * | 13,264 | 124,018 | ||||||
Accenture plc, Class A | 101,500 | 7,460,250 | ||||||
ACI Worldwide, Inc. * | 5,200 | 286,624 | ||||||
Activision Blizzard, Inc. | 66,532 | 1,107,092 | ||||||
Actuate Corp. * | 13,962 | 111,836 | ||||||
Acxiom Corp. * | 13,300 | 441,959 | ||||||
Adobe Systems, Inc. * | 73,610 | 3,989,662 | ||||||
Advent Software, Inc. | 7,900 | 265,045 | ||||||
Akamai Technologies, Inc. * | 27,738 | 1,240,998 | ||||||
Alliance Data Systems Corp. * | 7,400 | 1,754,244 | ||||||
Amdocs Ltd. | 24,800 | 953,560 | ||||||
Angie’s List, Inc. * | 8,000 | 112,720 | ||||||
ANSYS, Inc. * | 15,286 | 1,336,761 | ||||||
AOL, Inc. * | 11,322 | 410,309 | ||||||
Aspen Technology, Inc. * | 13,400 | 512,282 | ||||||
Autodesk, Inc. * | 34,900 | 1,392,859 | ||||||
Automatic Data Processing, Inc. | 76,300 | 5,720,211 | ||||||
Bankrate, Inc. * | 8,700 | 146,508 |
See financial notes 55
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Bazaarvoice, Inc. * | 15,200 | 142,576 | ||||||
Blackbaud, Inc. | 6,000 | 216,000 | ||||||
Blucora, Inc. * | 11,572 | 273,446 | ||||||
Booz Allen Hamilton Holding Corp. | 12,300 | 243,540 | ||||||
Bottomline Technologies, Inc. * | 8,800 | 276,496 | ||||||
Broadridge Financial Solutions, Inc. | 17,725 | 623,211 | ||||||
BroadSoft, Inc. * | 6,500 | 212,680 | ||||||
CA, Inc. | 50,508 | 1,604,134 | ||||||
CACI International, Inc., Class A * | 4,100 | 295,118 | ||||||
Cadence Design Systems, Inc. * | 41,400 | 536,958 | ||||||
Cardtronics, Inc. * | 5,000 | 196,250 | ||||||
CIBER, Inc. * | 24,900 | 80,925 | ||||||
Citrix Systems, Inc. * | 29,800 | 1,692,044 | ||||||
Cognizant Technology Solutions Corp., Class A * | 47,700 | 4,146,561 | ||||||
CommVault Systems, Inc. * | 6,900 | 538,752 | ||||||
Computer Sciences Corp. | 22,638 | 1,115,148 | ||||||
Compuware Corp. | 31,800 | 339,624 | ||||||
comScore, Inc. * | 7,500 | 200,400 | ||||||
Comverse, Inc. * | 3,550 | 112,109 | ||||||
Concur Technologies, Inc. * | 7,600 | 794,960 | ||||||
Constant Contact, Inc. * | 7,000 | 181,370 | ||||||
Convergys Corp. | 16,000 | 315,840 | ||||||
CoreLogic, Inc. * | 13,800 | 459,126 | ||||||
Cornerstone OnDemand, Inc. * | 7,100 | 336,327 | ||||||
CoStar Group, Inc. * | 4,500 | 796,455 | ||||||
CSG Systems International, Inc. | 5,400 | 150,444 | ||||||
Dealertrack Technologies, Inc. * | 6,100 | 227,530 | ||||||
Demand Media, Inc. * | 29,600 | 141,488 | ||||||
Demandware, Inc. * | 6,800 | 336,260 | ||||||
Digimarc Corp. | 3,542 | 74,595 | ||||||
Digital River, Inc. * | 7,100 | 126,664 | ||||||
DST Systems, Inc. | 4,300 | 364,511 | ||||||
Dynamics Research Corp. * | 1,200 | 8,880 | ||||||
EarthLink, Inc. | 17,050 | 86,273 | ||||||
eBay, Inc. * | 182,348 | 9,611,563 | ||||||
Ebix, Inc. (c) | 7,200 | 81,936 | ||||||
Edgewater Technology, Inc. * | 767 | 5,254 | ||||||
Electronic Arts, Inc. * | 47,100 | 1,236,375 | ||||||
Ellie Mae, Inc. * | 4,700 | 135,830 | ||||||
EPAM Systems, Inc. * | 4,800 | 179,856 | ||||||
EPIQ Systems, Inc. | 8,525 | 127,534 | ||||||
Equinix, Inc. * | 7,565 | 1,221,596 | ||||||
Euronet Worldwide, Inc. * | 8,800 | 381,920 | ||||||
ExlService Holdings, Inc. * | 7,200 | 208,152 | ||||||
Facebook, Inc., Class A * | 257,300 | 12,931,898 | ||||||
FactSet Research Systems, Inc. (c) | 5,850 | 637,299 | ||||||
Fair Isaac Corp. | 4,744 | 271,736 | ||||||
FalconStor Software, Inc. * | 1,200 | 1,776 | ||||||
Fidelity National Information Services, Inc. | 46,106 | 2,247,668 | ||||||
Fiserv, Inc. * | 20,700 | 2,167,911 | ||||||
FleetCor Technologies, Inc. * | 11,500 | 1,326,525 | ||||||
Forrester Research, Inc. | 4,100 | 159,121 | ||||||
Fortinet, Inc. * | 18,500 | 372,035 | ||||||
Gartner, Inc. * | 14,800 | 872,460 | ||||||
Genpact Ltd. * | 18,800 | 372,804 | ||||||
Global Cash Access Holdings, Inc. * | 28,300 | 234,890 | ||||||
Global Payments, Inc. | 11,440 | 680,451 | ||||||
Google, Inc., Class A * | 44,065 | 45,412,508 | ||||||
GSE Systems, Inc. * | 2,424 | 4,121 | ||||||
Guidewire Software, Inc. * | 9,100 | 461,552 | ||||||
Heartland Payment Systems, Inc. | 4,500 | 182,025 | ||||||
Higher One Holdings, Inc. * | 19,400 | 154,230 | ||||||
IAC/InterActiveCorp | 11,372 | 607,151 | ||||||
iGATE Corp. * | 8,800 | 280,192 | ||||||
Imperva, Inc. * | 4,700 | 180,198 | ||||||
Infoblox, Inc. * | 5,200 | 231,140 | ||||||
Informatica Corp. * | 18,000 | 694,800 | ||||||
Information Services Group, Inc. * | 7,500 | 31,950 | ||||||
Interactive Intelligence Group, Inc. * | 2,900 | 178,205 | ||||||
Internap Network Services Corp. * | 13,200 | 95,964 | ||||||
International Business Machines Corp. | 162,710 | 29,159,259 | ||||||
IntraLinks Holdings, Inc. * | 12,200 | 126,758 | ||||||
Intuit, Inc. | 46,830 | 3,344,130 | ||||||
j2 Global, Inc. | 6,000 | 329,880 | ||||||
Jack Henry & Associates, Inc. | 13,800 | 753,618 | ||||||
Jive Software, Inc. * | 8,600 | 93,654 | ||||||
Leidos Holdings, Inc. | 11,000 | 517,990 | ||||||
Lender Processing Services, Inc. | 14,357 | 495,604 | ||||||
LinkedIn Corp., Class A * | 14,300 | 3,198,481 | ||||||
Lionbridge Technologies, Inc. * | 19,500 | 85,020 | ||||||
Liquidity Services, Inc. (c)* | 6,200 | 161,882 | ||||||
LivePerson, Inc. * | 19,700 | 183,998 | ||||||
LogMeIn, Inc. * | 4,400 | 142,120 | ||||||
LookSmart Ltd. * | 480 | 355 | ||||||
Manhattan Associates, Inc. * | 2,900 | 308,879 | ||||||
ManTech International Corp., Class A | 8,600 | 240,284 | ||||||
MasterCard, Inc., Class A | 16,300 | 11,688,730 | ||||||
Mattersight Corp. * | 190 | 804 | ||||||
MAXIMUS, Inc. | 9,600 | 465,120 | ||||||
Mentor Graphics Corp. | 13,800 | 304,704 | ||||||
MICROS Systems, Inc. * | 11,400 | 618,450 | ||||||
Microsoft Corp. | 1,195,350 | 42,255,622 | ||||||
MicroStrategy, Inc., Class A * | 2,256 | 275,209 | ||||||
Millennial Media, Inc. (c)* | 21,300 | 149,739 | ||||||
ModusLink Global Solutions, Inc. * | 10,450 | 43,054 | ||||||
MoneyGram International, Inc. * | 9,037 | 190,771 | ||||||
Monotype Imaging Holdings, Inc. | 6,500 | 183,430 | ||||||
Monster Worldwide, Inc. * | 35,800 | 154,656 | ||||||
Move, Inc. * | 12,430 | 210,937 | ||||||
NetScout Systems, Inc. * | 7,300 | 206,736 | ||||||
NetSuite, Inc. * | 4,900 | 494,312 | ||||||
NeuStar, Inc., Class A * | 9,300 | 427,056 | ||||||
NIC, Inc. | 8,000 | 196,960 | ||||||
Nuance Communications, Inc. * | 42,274 | 657,783 | ||||||
OpenTable, Inc. * | 3,400 | 236,232 | ||||||
Oracle Corp. | 562,249 | 18,835,342 | ||||||
Pandora Media, Inc. * | 21,800 | 547,834 | ||||||
Paychex, Inc. | 50,100 | 2,117,226 | ||||||
Pegasystems, Inc. | 6,400 | 243,584 | ||||||
Perficient, Inc. * | 7,800 | 141,102 | ||||||
PRGX Global, Inc. * | 11,000 | 78,980 | ||||||
Progress Software Corp. * | 9,300 | 241,428 | ||||||
PTC, Inc. * | 17,680 | 490,090 | ||||||
Qlik Technologies, Inc. * | 14,100 | 357,294 | ||||||
Rackspace Hosting, Inc. * | 16,500 | 845,295 |
56 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
RealNetworks, Inc. * | 12,725 | 97,601 | ||||||
RealPage, Inc. * | 10,500 | 257,565 | ||||||
Red Hat, Inc. * | 29,900 | 1,293,773 | ||||||
Reis, Inc. * | 1,400 | 25,186 | ||||||
Rovi Corp. * | 15,412 | 258,305 | ||||||
Salesforce.com, Inc. * | 85,400 | 4,556,944 | ||||||
Sapient Corp. * | 16,100 | 254,541 | ||||||
Science Applications International Corp. | 6,285 | 221,546 | ||||||
SeaChange International, Inc. * | 9,250 | 131,258 | ||||||
ServiceNow, Inc. * | 15,700 | 857,377 | ||||||
ServiceSource International, Inc. * | 14,400 | 155,808 | ||||||
Shutterstock, Inc. * | 4,000 | 283,200 | ||||||
Solarwinds, Inc. * | 8,600 | 311,234 | ||||||
Solera Holdings, Inc. | 10,100 | 567,822 | ||||||
Splunk, Inc. * | 12,600 | 790,146 | ||||||
SS&C Technologies Holdings, Inc. * | 8,100 | 318,330 | ||||||
StarTek, Inc. * | 3,900 | 24,414 | ||||||
Support.com, Inc. * | 18,400 | 82,064 | ||||||
Sykes Enterprises, Inc. * | 11,026 | 206,407 | ||||||
Symantec Corp. | 108,073 | 2,457,580 | ||||||
Synchronoss Technologies, Inc. * | 4,700 | 162,714 | ||||||
Synopsys, Inc. * | 24,384 | 888,797 | ||||||
Syntel, Inc. | 2,500 | 214,600 | ||||||
Take-Two Interactive Software, Inc. * | 12,900 | 231,039 | ||||||
Tangoe, Inc. * | 8,200 | 156,620 | ||||||
TeleCommunication Systems, Inc., Class A * | 10,800 | 24,624 | ||||||
TeleTech Holdings, Inc. * | 9,100 | 240,877 | ||||||
Teradata Corp. * | 25,000 | 1,101,750 | ||||||
The Active Network, Inc. * | 13,300 | 192,052 | ||||||
The Hackett Group, Inc. | 7,200 | 51,264 | ||||||
The Ultimate Software Group, Inc. * | 4,200 | 648,816 | ||||||
The Western Union Co. | 90,332 | 1,537,451 | ||||||
TIBCO Software, Inc. * | 23,200 | 569,792 | ||||||
TiVo, Inc. * | 17,800 | 236,562 | ||||||
Total System Services, Inc. | 27,404 | 817,461 | ||||||
Trulia, Inc. * | 5,400 | 215,838 | ||||||
Tyler Technologies, Inc. * | 4,000 | 386,840 | ||||||
Unisys Corp. * | 6,200 | 163,370 | ||||||
United Online, Inc. * | 17,350 | 149,904 | ||||||
Unwired Planet, Inc. * | 7,771 | 12,589 | ||||||
ValueClick, Inc. * | 12,000 | 230,520 | ||||||
Vantiv, Inc., Class A * | 17,400 | 478,500 | ||||||
VeriFone Systems, Inc. * | 15,400 | 348,964 | ||||||
Verint Systems, Inc. * | 9,510 | 347,305 | ||||||
Verisign, Inc. * | 22,275 | 1,209,087 | ||||||
VirnetX Holding Corp. (c)* | 10,600 | 230,444 | ||||||
Virtusa Corp. * | 4,700 | 146,076 | ||||||
Visa, Inc., Class A | 81,400 | 16,008,938 | ||||||
VMware, Inc., Class A * | 13,600 | 1,105,408 | ||||||
Web.com Group, Inc. * | 5,423 | 146,150 | ||||||
WebMD Health Corp. * | 7,074 | 249,146 | ||||||
WEX, Inc. * | 5,700 | 532,095 | ||||||
Workday, Inc., Class A * | 4,900 | 366,863 | ||||||
Yahoo! Inc. * | 147,944 | 4,871,796 | ||||||
Yelp, Inc. * | 4,300 | 291,325 | ||||||
Zillow, Inc., Class A * | 4,500 | 358,335 | ||||||
Zynga, Inc., Class A * | 98,900 | 355,051 | ||||||
298,824,715 | ||||||||
Technology Hardware & Equipment 5.6% | ||||||||
3D Systems Corp. (c)* | 13,300 | 827,792 | ||||||
ADTRAN, Inc. | 9,100 | 213,668 | ||||||
Agilysys, Inc. * | 8,460 | 99,405 | ||||||
Amphenol Corp., Class A | 24,500 | 1,967,105 | ||||||
Anaren, Inc. * | 5,300 | 132,394 | ||||||
Anixter International, Inc. * | 4,000 | 341,960 | ||||||
Apple, Inc. | 143,300 | 74,852,755 | ||||||
ARRIS Group, Inc. * | 16,175 | 288,885 | ||||||
Arrow Electronics, Inc. * | 15,700 | 753,914 | ||||||
Aruba Networks, Inc. * | 15,700 | 294,532 | ||||||
Aviat Networks, Inc. * | 18,877 | 38,887 | ||||||
Avid Technology, Inc. * | 7,956 | 59,272 | ||||||
Avnet, Inc. | 20,088 | 797,494 | ||||||
AVX Corp. | 14,000 | 185,500 | ||||||
Badger Meter, Inc. | 4,000 | 208,040 | ||||||
Belden, Inc. | 6,900 | 464,094 | ||||||
Benchmark Electronics, Inc. * | 7,830 | 177,976 | ||||||
Black Box Corp. | 4,100 | 102,664 | ||||||
Brocade Communications Systems, Inc. * | 64,935 | 520,779 | ||||||
Checkpoint Systems, Inc. * | 7,100 | 120,842 | ||||||
Ciena Corp. * | 17,970 | 418,162 | ||||||
Cisco Systems, Inc. | 845,409 | 19,021,702 | ||||||
Cognex Corp. | 14,800 | 462,500 | ||||||
Coherent, Inc. | 2,800 | 185,332 | ||||||
Comtech Telecommunications Corp. | 4,175 | 125,333 | ||||||
Corning, Inc. | 234,407 | 4,006,016 | ||||||
Cray, Inc. * | 7,600 | 169,936 | ||||||
CTS Corp. | 8,800 | 163,856 | ||||||
Daktronics, Inc. | 8,700 | 104,052 | ||||||
Diebold, Inc. | 9,000 | 269,640 | ||||||
Digi International, Inc. * | 9,100 | 91,728 | ||||||
Dolby Laboratories, Inc., Class A | 8,800 | 314,512 | ||||||
DTS, Inc. * | 4,300 | 86,000 | ||||||
Echelon Corp. * | 7,200 | 15,624 | ||||||
EchoStar Corp., Class A * | 4,940 | 236,922 | ||||||
Electro Rent Corp. | 7,100 | 128,794 | ||||||
Electro Scientific Industries, Inc. | 9,900 | 118,602 | ||||||
Electronics for Imaging, Inc. * | 6,400 | 219,584 | ||||||
EMC Corp. | 327,986 | 7,894,623 | ||||||
Emulex Corp. * | 14,100 | 106,173 | ||||||
Extreme Networks, Inc. * | 27,500 | 147,400 | ||||||
F5 Networks, Inc. * | 13,100 | 1,067,781 | ||||||
FARO Technologies, Inc. * | 3,000 | 142,500 | ||||||
FEI Co. | 6,600 | 587,928 | ||||||
Finisar Corp. * | 12,000 | 276,120 | ||||||
FLIR Systems, Inc. | 21,900 | 623,712 | ||||||
Frequency Electronics, Inc. | 500 | 5,555 | ||||||
Fusion-io, Inc. * | 16,800 | 180,600 | ||||||
Gerber Scientific, Inc. (b)(g) | 8,900 | — | ||||||
Harmonic, Inc. * | 20,042 | 146,507 | ||||||
Harris Corp. | 17,000 | 1,053,320 | ||||||
Hewlett-Packard Co. | 301,036 | 7,336,247 | ||||||
Hutchinson Technology, Inc. * | 6,000 | 22,320 | ||||||
I.D. Systems, Inc. * | 5,500 | 28,600 | ||||||
Identive Group, Inc. * | 1,200 | 768 |
See financial notes 57
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Imation Corp. * | 5,500 | 25,575 | ||||||
Immersion Corp. * | 4,300 | 54,696 | ||||||
Infinera Corp. * | 16,400 | 167,444 | ||||||
Ingram Micro, Inc., Class A * | 22,400 | 519,008 | ||||||
Insight Enterprises, Inc. * | 4,650 | 97,975 | ||||||
Intellicheck Mobilisa, Inc. * | 500 | 225 | ||||||
InterDigital, Inc. | 6,700 | 259,625 | ||||||
InvenSense, Inc. (c)* | 17,600 | 297,264 | ||||||
IPG Photonics Corp. (c) | 4,600 | 304,842 | ||||||
Itron, Inc. * | 5,700 | 243,219 | ||||||
Ixia * | 14,900 | 211,282 | ||||||
Jabil Circuit, Inc. | 27,700 | 577,822 | ||||||
JDS Uniphase Corp. * | 34,153 | 447,063 | ||||||
Juniper Networks, Inc. * | 76,265 | 1,421,580 | ||||||
Lexmark International, Inc., Class A | 10,900 | 387,495 | ||||||
LightPath Technologies, Inc., Class A * | 75 | 104 | ||||||
Littelfuse, Inc. | 3,700 | 314,611 | ||||||
Maxwell Technologies, Inc. * | 7,700 | 57,750 | ||||||
Measurement Specialties, Inc. * | 3,200 | 178,336 | ||||||
Mercury Systems, Inc. * | 7,800 | 71,916 | ||||||
Methode Electronics, Inc. | 9,500 | 243,010 | ||||||
MOCON, Inc. | 600 | 8,370 | ||||||
Molex, Inc. | 22,525 | 869,465 | ||||||
Motorola Solutions, Inc. | 37,279 | 2,330,683 | ||||||
MTS Systems Corp. | 3,781 | 246,975 | ||||||
Multi-Fineline Electronix, Inc. * | 5,700 | 76,437 | ||||||
National Instruments Corp. | 13,212 | 383,809 | ||||||
NCR Corp. * | 27,500 | 1,005,125 | ||||||
NetApp, Inc. | 55,900 | 2,169,479 | ||||||
NETGEAR, Inc. * | 6,000 | 172,560 | ||||||
Newport Corp. * | 8,500 | 134,895 | ||||||
OCZ Technology Group, Inc. (c)* | 10,200 | 11,322 | ||||||
Oplink Communications, Inc. * | 5,957 | 108,715 | ||||||
OSI Systems, Inc. * | 3,700 | 269,508 | ||||||
Palo Alto Networks, Inc. * | 7,100 | 299,336 | ||||||
Park Electrochemical Corp. | 3,600 | 100,980 | ||||||
PC Connection, Inc. | 7,000 | 139,930 | ||||||
PC-Tel, Inc. | 8,900 | 81,969 | ||||||
Performance Technologies, Inc. * | 1,600 | 4,960 | ||||||
Plantronics, Inc. | 6,000 | 257,640 | ||||||
Plexus Corp. * | 6,500 | 248,820 | ||||||
Polycom, Inc. * | 22,400 | 232,960 | ||||||
Pulse Electronics Corp. * | 1,150 | 4,272 | ||||||
QLogic Corp. * | 17,044 | 210,493 | ||||||
QUALCOMM, Inc. | 269,700 | 18,736,059 | ||||||
Radisys Corp. * | 7,200 | 21,744 | ||||||
Research Frontiers, Inc. (c)* | 2,800 | 13,496 | ||||||
Richardson Electronics Ltd. | 7,300 | 84,096 | ||||||
Riverbed Technology, Inc. * | 22,700 | 336,414 | ||||||
Rofin-Sinar Technologies, Inc. * | 3,800 | 99,750 | ||||||
Rogers Corp. * | 4,200 | 256,032 | ||||||
SanDisk Corp. | 37,300 | 2,592,350 | ||||||
Sanmina Corp. * | 20,900 | 304,304 | ||||||
ScanSource, Inc. * | 6,300 | 242,298 | ||||||
Seagate Technology plc | 49,766 | 2,422,609 | ||||||
Sonus Networks, Inc. * | 44,900 | 134,700 | ||||||
Super Micro Computer, Inc. * | 8,200 | 114,144 | ||||||
Symmetricom, Inc. * | 11,950 | 85,682 | ||||||
SYNNEX Corp. * | 3,000 | 183,900 | ||||||
TE Connectivity Ltd. | 65,500 | 3,372,595 | ||||||
Tech Data Corp. * | 5,300 | 275,918 | ||||||
Tellabs, Inc. | 38,064 | 92,876 | ||||||
TESSCO Technologies, Inc. | 4,025 | 142,606 | ||||||
TransAct Technologies, Inc. | 1,500 | 20,685 | ||||||
Trimble Navigation Ltd. * | 39,884 | 1,139,486 | ||||||
TTM Technologies, Inc. * | 11,000 | 96,250 | ||||||
Ubiquiti Networks, Inc. | 6,900 | 266,202 | ||||||
Universal Display Corp. * | 5,800 | 185,020 | ||||||
ViaSat, Inc. * | 6,500 | 429,780 | ||||||
Vishay Intertechnology, Inc. * | 18,588 | 228,075 | ||||||
Vishay Precision Group, Inc. * | 5,620 | 92,168 | ||||||
Western Digital Corp. | 32,600 | 2,269,938 | ||||||
Xerox Corp. | 186,756 | 1,856,355 | ||||||
Xybernaut Corp. (b)(g)* | 1,400 | — | ||||||
Zebra Technologies Corp., Class A * | 7,375 | 356,286 | ||||||
Zygo Corp. * | 7,000 | 108,080 | ||||||
180,015,850 | ||||||||
Telecommunication Services 2.2% | ||||||||
Alaska Communications Systems Group, Inc. * | 5,000 | 12,300 | ||||||
Alteva, Inc. | 1,100 | 8,415 | ||||||
AT&T, Inc. | 839,856 | 30,402,787 | ||||||
Atlantic Tele-Network, Inc. | 3,250 | 180,115 | ||||||
CenturyLink, Inc. | 95,078 | 3,219,341 | ||||||
Cincinnati Bell, Inc. * | 32,268 | 92,286 | ||||||
Cogent Communications Group, Inc. | 9,900 | 347,787 | ||||||
Consolidated Communications Holdings, Inc. | 5,253 | 97,863 | ||||||
Crown Castle International Corp. * | 46,476 | 3,533,106 | ||||||
Frontier Communications Corp. (c) | 146,868 | 647,688 | ||||||
General Communication, Inc., Class A * | 10,500 | 99,855 | ||||||
HickoryTech Corp. | 4,600 | 61,548 | ||||||
Iridium Communications, Inc. * | 11,800 | 71,154 | ||||||
Leap Wireless International, Inc. * | 13,000 | 209,300 | ||||||
Level 3 Communications, Inc. * | 23,006 | 702,833 | ||||||
Lumos Networks Corp. | 1,500 | 33,015 | ||||||
NII Holdings, Inc. (c)* | 27,900 | 95,976 | ||||||
NTELOS Holdings Corp. | 4,500 | 85,680 | ||||||
Premiere Global Services, Inc. * | 11,400 | 102,714 | ||||||
SBA Communications Corp., Class A * | 21,700 | 1,898,099 | ||||||
Shenandoah Telecommunications Co. | 2,500 | 69,325 | ||||||
Sprint Corp. * | 136,205 | 916,660 | ||||||
T-Mobile US, Inc. * | 27,150 | 752,870 | ||||||
Telephone & Data Systems, Inc. | 14,222 | 443,442 | ||||||
tw telecom, Inc. * | 21,600 | 680,832 | ||||||
United States Cellular Corp. | 5,400 | 261,360 | ||||||
USA Mobility, Inc. | 5,500 | 82,060 | ||||||
Verizon Communications, Inc. | 451,272 | 22,793,749 | ||||||
Vonage Holdings Corp. * | 36,400 | 135,772 | ||||||
Windstream Holdings, Inc. (c) | 87,969 | 752,135 | ||||||
68,790,067 | ||||||||
Transportation 1.9% | ||||||||
Alaska Air Group, Inc. | 10,100 | 713,666 |
58 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Allegiant Travel Co. | 2,000 | 208,540 | ||||||
AMERCO | 1,000 | 201,930 | ||||||
Arkansas Best Corp. | 9,900 | 270,963 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 3,800 | 140,714 | ||||||
Avis Budget Group, Inc. * | 17,500 | 548,275 | ||||||
C.H. Robinson Worldwide, Inc. | 26,000 | 1,553,240 | ||||||
Con-way, Inc. | 7,500 | 309,000 | ||||||
Covenant Transport Group, Inc., Class A * | 3,000 | 19,590 | ||||||
CSX Corp. | 161,100 | 4,198,266 | ||||||
Delta Air Lines, Inc. | 135,300 | 3,569,214 | ||||||
Expeditors International of Washington, Inc. | 33,700 | 1,526,273 | ||||||
FedEx Corp. | 46,863 | 6,139,053 | ||||||
Forward Air Corp. | 4,600 | 186,208 | ||||||
Genco Shipping & Trading Ltd. (c)* | 21,500 | 57,405 | ||||||
Genesee & Wyoming, Inc., Class A * | 7,400 | 738,816 | ||||||
Heartland Express, Inc. | 16,241 | 233,221 | ||||||
Hertz Global Holdings, Inc. * | 60,600 | 1,391,376 | ||||||
Hub Group, Inc., Class A * | 4,400 | 161,612 | ||||||
J.B. Hunt Transport Services, Inc. | 13,500 | 1,012,905 | ||||||
JetBlue Airways Corp. * | 30,962 | 219,521 | ||||||
Kansas City Southern | 17,050 | 2,071,916 | ||||||
Kirby Corp. * | 8,600 | 761,014 | ||||||
Knight Transportation, Inc. | 9,050 | 153,579 | ||||||
Landstar System, Inc. | 6,600 | 364,914 | ||||||
Matson, Inc. | 6,400 | 173,376 | ||||||
Norfolk Southern Corp. | 49,800 | 4,283,796 | ||||||
Old Dominion Freight Line, Inc. * | 9,712 | 455,493 | ||||||
Pacer International, Inc. * | 17,800 | 142,044 | ||||||
Park-Ohio Holdings Corp. * | 3,600 | 149,076 | ||||||
Republic Airways Holdings, Inc. * | 12,500 | 147,250 | ||||||
Roadrunner Transportation Systems, Inc. * | 4,900 | 129,850 | ||||||
Ryder System, Inc. | 7,500 | 493,725 | ||||||
Saia, Inc. * | 9,150 | 297,649 | ||||||
SkyWest, Inc. | 7,000 | 105,280 | ||||||
Southwest Airlines Co. | 112,315 | 1,934,064 | ||||||
Spirit Airlines, Inc. * | 11,500 | 496,225 | ||||||
Swift Transportation Co. (c)* | 19,000 | 414,010 | ||||||
Union Pacific Corp. | 72,900 | 11,037,060 | ||||||
United Continental Holdings, Inc. * | 56,100 | 1,904,595 | ||||||
United Parcel Service, Inc., Class B | 113,880 | 11,187,571 | ||||||
Universal Truckload Services, Inc. | 3,300 | 87,978 | ||||||
US Airways Group, Inc. * | 30,800 | 676,676 | ||||||
UTI Worldwide, Inc. | 14,600 | 221,920 | ||||||
Werner Enterprises, Inc. | 5,832 | 135,069 | ||||||
Wesco Aircraft Holdings, Inc. * | 13,500 | 247,320 | ||||||
61,471,238 | ||||||||
Utilities 3.1% | ||||||||
AGL Resources, Inc. | 18,629 | 891,584 | ||||||
ALLETE, Inc. | 5,233 | 264,424 | ||||||
Alliant Energy Corp. | 16,300 | 851,186 | ||||||
Ameren Corp. | 36,200 | 1,309,716 | ||||||
American DG Energy, Inc. * | 11,400 | 17,214 | ||||||
American Electric Power Co., Inc. | 77,920 | 3,649,773 | ||||||
American States Water Co. | 9,600 | 273,408 | ||||||
American Water Works Co., Inc. | 29,100 | 1,247,517 | ||||||
Aqua America, Inc. | 25,867 | 651,331 | ||||||
Artesian Resources Corp., Class A | 4,000 | 91,600 | ||||||
Atmos Energy Corp. | 14,200 | 628,634 | ||||||
Avista Corp. | 7,800 | 216,762 | ||||||
Black Hills Corp. | 7,700 | 390,544 | ||||||
Cadiz, Inc. (c)* | 6,356 | 32,733 | ||||||
California Water Service Group | 11,300 | 246,340 | ||||||
Calpine Corp. * | 57,800 | 1,165,826 | ||||||
CenterPoint Energy, Inc. | 66,500 | 1,635,900 | ||||||
Chesapeake Utilities Corp. | 4,847 | 263,725 | ||||||
Cleco Corp. | 8,700 | 403,158 | ||||||
CMS Energy Corp. | 43,500 | 1,194,510 | ||||||
Connecticut Water Service, Inc. | 5,100 | 163,455 | ||||||
Consolidated Edison, Inc. | 45,000 | 2,619,900 | ||||||
Delta Natural Gas Co., Inc. | 1,291 | 28,815 | ||||||
Dominion Resources, Inc. | 91,280 | 5,819,100 | ||||||
DTE Energy Co. | 26,701 | 1,846,107 | ||||||
Duke Energy Corp. | 112,073 | 8,038,996 | ||||||
Dynegy, Inc. * | 17,000 | 330,310 | ||||||
Edison International | 50,210 | 2,461,796 | ||||||
El Paso Electric Co. | 5,300 | 186,401 | ||||||
Entergy Corp. | 27,500 | 1,779,800 | ||||||
Exelon Corp. | 135,069 | 3,854,869 | ||||||
FirstEnergy Corp. | 64,156 | 2,429,588 | ||||||
Genie Energy Ltd., Class B * | 12,800 | 132,224 | ||||||
Great Plains Energy, Inc. | 21,541 | 504,921 | ||||||
Hawaiian Electric Industries, Inc. | 13,300 | 353,381 | ||||||
IDACORP, Inc. | 7,100 | 366,360 | ||||||
Integrys Energy Group, Inc. | 12,540 | 735,847 | ||||||
ITC Holdings Corp. | 7,500 | 754,425 | ||||||
MDU Resources Group, Inc. | 29,825 | 888,189 | ||||||
MGE Energy, Inc. | 3,300 | 185,823 | ||||||
Middlesex Water Co. | 4,500 | 93,285 | ||||||
National Fuel Gas Co. | 12,400 | 887,220 | ||||||
New Jersey Resources Corp. | 6,225 | 286,537 | ||||||
NextEra Energy, Inc. | 67,400 | 5,712,150 | ||||||
NiSource, Inc. | 48,164 | 1,518,129 | ||||||
Northeast Utilities | 48,443 | 2,077,720 | ||||||
Northwest Natural Gas Co. | 6,300 | 273,609 | ||||||
NorthWestern Corp. | 7,100 | 325,464 | ||||||
NRG Energy, Inc. | 48,056 | 1,371,038 | ||||||
NV Energy, Inc. | 37,076 | 880,184 | ||||||
OGE Energy Corp. | 29,800 | 1,099,620 | ||||||
ONEOK, Inc. | 32,600 | 1,841,900 | ||||||
Ormat Technologies, Inc. | 8,600 | 224,202 | ||||||
Otter Tail Corp. | 7,800 | 232,674 | ||||||
Pepco Holdings, Inc. | 37,400 | 721,072 | ||||||
PG&E Corp. | 68,500 | 2,866,725 | ||||||
Piedmont Natural Gas Co., Inc. | 12,300 | 419,922 | ||||||
Pinnacle West Capital Corp. | 16,200 | 907,686 | ||||||
PNM Resources, Inc. | 11,200 | 267,904 | ||||||
Portland General Electric Co. | 10,900 | 312,830 | ||||||
PPL Corp. | 98,700 | 3,023,181 | ||||||
Public Service Enterprise Group, Inc. | 77,700 | 2,602,950 | ||||||
Pure Cycle Corp. * | 8,000 | 53,440 | ||||||
Questar Corp. | 28,900 | 683,774 | ||||||
SCANA Corp. | 21,905 | 1,021,430 | ||||||
Sempra Energy | 35,775 | 3,260,534 | ||||||
SJW Corp. | 9,470 | 267,338 | ||||||
South Jersey Industries, Inc. | 4,200 | 250,110 |
See financial notes 59
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Southwest Gas Corp. | 6,500 | 352,690 | ||||||
TECO Energy, Inc. | 29,100 | 499,647 | ||||||
The AES Corp. | 101,396 | 1,428,670 | ||||||
The Empire District Electric Co. | 11,200 | 251,888 | ||||||
The Laclede Group, Inc. | 5,800 | 273,006 | ||||||
The Southern Co. | 137,800 | 5,637,398 | ||||||
UGI Corp. | 18,600 | 769,482 | ||||||
UIL Holdings Corp. | 6,966 | 268,330 | ||||||
Unitil Corp. | 7,200 | 217,584 | ||||||
UNS Energy Corp. | 5,700 | 282,036 | ||||||
Vectren Corp. | 11,366 | 396,901 | ||||||
Westar Energy, Inc. | 18,500 | 584,785 | ||||||
WGL Holdings, Inc. | 7,300 | 328,573 | ||||||
Wisconsin Energy Corp. | 34,600 | 1,457,006 | ||||||
Xcel Energy, Inc. | 78,995 | 2,279,796 | ||||||
York Water Co. | 6,100 | 126,331 | ||||||
97,542,943 | ||||||||
Total Common Stock | ||||||||
(Cost $1,956,313,008) | 3,083,859,605 | |||||||
Warrants 0.0% of net assets | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. (b)(g)* | 2,293 | — | ||||||
Real Estate 0.0% | ||||||||
Tejon Ranch Co * | 1 | 5 | ||||||
Total Warrants | ||||||||
(Cost $2) | 5 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.9% of net assets | ||||||||
Time Deposits 2.8% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/01/13 | 73,797,969 | 73,797,969 | ||||||
JPMorgan Chase | ||||||||
0.03%, 11/01/13 | 13,812,209 | 13,812,209 | ||||||
87,610,178 | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/19/13 (d)(e) | 4,500,000 | 4,499,970 | ||||||
Total Short-Term Investments | ||||||||
(Cost $92,110,148) | 92,110,148 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.6% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 19,098,378 | 19,098,378 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $19,098,378) | 19,098,378 | |||||||
End of collateral invested for securities on loan. |
At 10/31/13 tax basis cost of the fund’s investments was $2,061,401,063 and the unrealized appreciation and depreciation were $1,194,577,512 and ($80,008,817), respectively, with a net unrealized appreciation of $1,114,568,695.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | Illiquid security. At the period end, the value of these amounted to $0 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $18,479,281. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. | |
(g) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/20/13 | 120 | 13,173,600 | 326,181 | |||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 900 | 78,795,000 | 2,282,356 | |||||||||
Net Unrealized Appreciation | 2,608,537 | |||||||||||
60 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .0% | Common Stock | 1,549,007,351 | 2,115,822,955 | ||||||||
0 | .6% | Preferred Stock | 8,346,686 | 13,040,219 | ||||||||
0 | .0% | Rights | 371,648 | 389,200 | ||||||||
0 | .4% | Other Investment Company | 8,089,400 | 9,223,200 | ||||||||
2 | .6% | Short-Term Investments | 58,322,640 | 58,322,640 | ||||||||
99 | .6% | Total Investments | 1,624,137,725 | 2,196,798,214 | ||||||||
0 | .2% | Collateral Invested for Securities on Loan | 4,637,410 | 4,637,410 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 3,227,192 | |||||||||
100 | .0% | Total Net Assets | 2,204,662,816 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 96.0% of net assets | ||||||||
Australia 7.9% | ||||||||
Banks 2.9% | ||||||||
Australia & New Zealand Banking Group Ltd. | 451,524 | 14,448,926 | ||||||
Bendigo & Adelaide Bank Ltd. | 65,340 | 672,662 | ||||||
Commonwealth Bank of Australia | 265,248 | 19,098,522 | ||||||
National Australia Bank Ltd. | 385,557 | 12,885,639 | ||||||
Westpac Banking Corp. | 510,729 | 16,581,912 | ||||||
63,687,661 | ||||||||
Capital Goods 0.0% | ||||||||
Leighton Holdings Ltd. | 33,382 | 565,518 | ||||||
Commercial & Professional Supplies 0.2% | ||||||||
ALS Ltd. | 65,668 | 621,201 | ||||||
Brambles Ltd. | 257,788 | 2,263,052 | ||||||
Seek Ltd. | 55,037 | 676,147 | ||||||
3,560,400 | ||||||||
Consumer Services 0.1% | ||||||||
Crown Ltd. | 71,852 | 1,145,486 | ||||||
Echo Entertainment Group Ltd. | 100,330 | 251,811 | ||||||
Flight Centre Ltd. | 9,011 | 442,380 | ||||||
TABCORP Holdings Ltd. | 122,573 | 416,904 | ||||||
Tatts Group Ltd. | 230,820 | 685,370 | ||||||
2,941,951 | ||||||||
Diversified Financials 0.2% | ||||||||
ASX Ltd. | 32,853 | 1,141,170 | ||||||
Macquarie Group Ltd. | 50,842 | 2,445,479 | ||||||
3,586,649 | ||||||||
Energy 0.5% | ||||||||
Caltex Australia Ltd. | 27,417 | 479,060 | ||||||
Origin Energy Ltd. | 180,882 | 2,500,596 | ||||||
Santos Ltd. | 159,285 | 2,279,690 | ||||||
Whitehaven Coal Ltd. * | 129,566 | 198,468 | ||||||
Woodside Petroleum Ltd. | 108,562 | 3,979,873 | ||||||
WorleyParsons Ltd. | 35,418 | 737,543 | ||||||
10,175,230 | ||||||||
Food & Staples Retailing 0.6% | ||||||||
Metcash Ltd. | 126,061 | 398,935 | ||||||
Wesfarmers Ltd. * | 165,651 | 6,721,943 | ||||||
Woolworths Ltd. | 204,974 | 6,759,312 | ||||||
13,880,190 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Coca-Cola Amatil Ltd. | 96,214 | 1,172,486 | ||||||
Treasury Wine Estates Ltd. | 100,094 | 444,521 | ||||||
1,617,007 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Cochlear Ltd. | 8,924 | 495,833 | ||||||
Ramsay Health Care Ltd. | 22,278 | 817,821 | ||||||
Sonic Healthcare Ltd. | 63,702 | 972,425 | ||||||
2,286,079 | ||||||||
Insurance 0.4% | ||||||||
AMP Ltd. | 486,388 | 2,179,475 | ||||||
Insurance Australia Group Ltd. | 330,545 | 1,930,354 | ||||||
QBE Insurance Group Ltd. | 197,050 | 2,759,543 | ||||||
Suncorp Group Ltd. | 211,293 | 2,664,277 | ||||||
9,533,649 | ||||||||
Materials 1.5% | ||||||||
Alumina Ltd. * | 327,010 | 317,942 | ||||||
Amcor Ltd. | 201,126 | 2,060,411 | ||||||
BHP Billiton Ltd. | 528,494 | 18,684,048 | ||||||
Boral Ltd. | 130,425 | 608,577 | ||||||
Fortescue Metals Group Ltd. | 252,001 | 1,235,912 | ||||||
Iluka Resources Ltd. | 73,547 | 713,879 | ||||||
Incitec Pivot Ltd. | 268,013 | 674,300 | ||||||
James Hardie Industries plc CDI | 74,318 | 768,691 | ||||||
Newcrest Mining Ltd. | 132,125 | 1,281,174 | ||||||
Orica Ltd. | 61,390 | 1,222,168 | ||||||
Rio Tinto Ltd. | 72,447 | 4,359,295 | ||||||
31,926,397 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
CSL Ltd. | 80,924 | 5,319,531 | ||||||
Real Estate 0.6% | ||||||||
CFS Retail Property Trust Group | 317,267 | 620,921 | ||||||
Dexus Property Group | 723,713 | 741,677 | ||||||
Federation Centres Ltd. | 213,515 | 501,086 | ||||||
Goodman Group | 274,627 | 1,312,439 | ||||||
GPT Group | 287,272 | 1,001,225 | ||||||
Lend Lease Group | 90,518 | 976,134 | ||||||
Mirvac Group | 607,787 | 999,175 |
See financial notes 61
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Stockland | 374,477 | 1,419,315 | ||||||
Westfield Group | 345,673 | 3,537,444 | ||||||
Westfield Retail Trust | 485,016 | 1,415,050 | ||||||
12,524,466 | ||||||||
Retailing 0.0% | ||||||||
Harvey Norman Holdings Ltd. | 68,124 | 209,629 | ||||||
Software & Services 0.0% | ||||||||
Computershare Ltd. | 81,530 | 827,398 | ||||||
Telecommunication Services 0.2% | ||||||||
Telstra Corp., Ltd. | 716,642 | 3,506,725 | ||||||
Transportation 0.2% | ||||||||
Asciano Ltd. | 148,861 | 817,522 | ||||||
Aurizon Holdings Ltd. | 322,440 | 1,459,603 | ||||||
Qantas Airways Ltd. * | 148,963 | 175,130 | ||||||
Sydney Airport | 74,602 | 295,455 | ||||||
Toll Holdings Ltd. | 111,390 | 606,832 | ||||||
Transurban Group | 223,520 | 1,499,454 | ||||||
4,853,996 | ||||||||
Utilities 0.1% | ||||||||
AGL Energy Ltd. | 90,337 | 1,334,513 | ||||||
APA Group | 134,321 | 769,604 | ||||||
SP AusNet | 224,108 | 264,744 | ||||||
2,368,861 | ||||||||
173,371,337 | ||||||||
Austria 0.3% | ||||||||
Banks 0.1% | ||||||||
Erste Group Bank AG | 41,893 | 1,470,854 | ||||||
Raiffeisen Bank International AG | 9,443 | 346,369 | ||||||
1,817,223 | ||||||||
Capital Goods 0.0% | ||||||||
Andritz AG | 12,691 | 781,535 | ||||||
Energy 0.1% | ||||||||
OMV AG | 24,515 | 1,169,430 | ||||||
Insurance 0.0% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 6,791 | 359,263 | ||||||
Materials 0.1% | ||||||||
Voestalpine AG | 18,964 | 894,636 | ||||||
Real Estate 0.0% | ||||||||
Immofinanz AG * | 148,528 | 650,491 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG | 29,683 | 244,018 | ||||||
Utilities 0.0% | ||||||||
Verbund AG | 9,608 | 225,386 | ||||||
6,141,982 | ||||||||
Belgium 1.1% | ||||||||
Banks 0.1% | ||||||||
KBC GROEP N.V. | 36,978 | 2,014,616 | ||||||
Diversified Financials 0.1% | ||||||||
Groupe Bruxelles Lambert S.A. | 13,139 | 1,171,677 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Colruyt S.A. | 13,008 | 725,684 | ||||||
Delhaize Group S.A. | 16,484 | 1,052,741 | ||||||
1,778,425 | ||||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Anheuser-Busch InBev N.V. | 132,225 | 13,706,920 | ||||||
Insurance 0.1% | ||||||||
Ageas | 39,029 | 1,658,509 | ||||||
Materials 0.1% | ||||||||
Solvay S.A. | 9,537 | 1,491,234 | ||||||
Umicore S.A. | 18,224 | 867,807 | ||||||
2,359,041 | ||||||||
Media 0.0% | ||||||||
Telenet Group Holding N.V. | 9,411 | 516,861 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
UCB S.A. | 18,118 | 1,189,299 | ||||||
Telecommunication Services 0.0% | ||||||||
Belgacom S.A. | 25,153 | 688,225 | ||||||
25,083,573 | ||||||||
Denmark 1.1% | ||||||||
Banks 0.1% | ||||||||
Danske Bank A/S * | 108,484 | 2,534,815 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Carlsberg A/S, Class B | 17,491 | 1,747,105 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Coloplast A/S, Class B | 18,068 | 1,178,479 | ||||||
William Demant Holding A/S * | 3,981 | 394,226 | ||||||
1,572,705 | ||||||||
Insurance 0.0% | ||||||||
Tryg A/S | 4,412 | 402,894 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
Novo Nordisk A/S, Class B | 65,535 | 10,915,023 | ||||||
Novozymes A/S, B Shares | 37,507 | 1,468,980 | ||||||
12,384,003 | ||||||||
Telecommunication Services 0.0% | ||||||||
TDC A/S | 118,650 | 1,071,322 | ||||||
Transportation 0.2% | ||||||||
AP Moller - Maersk A/S, Series A | 89 | 803,658 | ||||||
AP Moller - Maersk A/S, Series B | 220 | 2,128,493 | ||||||
DSV A/S | 29,001 | 848,458 | ||||||
3,780,609 | ||||||||
23,493,453 | ||||||||
Finland 0.9% | ||||||||
Automobiles & Components 0.1% | ||||||||
Nokian Renkaat Oyj | 18,899 | 955,839 | ||||||
Capital Goods 0.2% | ||||||||
Kone Oyj, Class B | 25,801 | 2,274,672 | ||||||
Metso Oyj | 21,360 | 840,732 | ||||||
Wartsila Oyj Abp | 29,192 | 1,295,292 | ||||||
4,410,696 |
62 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Diversified Financials 0.0% | ||||||||
Pohjola Bank plc, A Shares | 22,779 | 414,822 | ||||||
Energy 0.0% | ||||||||
Neste Oil Oyj | 21,550 | 427,301 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Kesko Oyj, B Shares | 12,242 | 406,802 | ||||||
Insurance 0.2% | ||||||||
Sampo Oyj, A Shares | 68,387 | 3,234,751 | ||||||
Materials 0.1% | ||||||||
Stora Enso Oyj, R Shares | 91,186 | 846,741 | ||||||
UPM-Kymmene Oyj | 84,884 | 1,347,724 | ||||||
2,194,465 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 15,936 | 428,300 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
Nokia Oyj * | 616,251 | 4,683,987 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 22,315 | 559,074 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 72,237 | 1,611,387 | ||||||
19,327,424 | ||||||||
France 9.5% | ||||||||
Automobiles & Components 0.3% | ||||||||
Compagnie Generale des Etablissements Michelin | 29,888 | 3,114,267 | ||||||
Renault S.A. | 31,630 | 2,759,725 | ||||||
5,873,992 | ||||||||
Banks 1.0% | ||||||||
BNP Paribas S.A. | 163,535 | 12,064,490 | ||||||
Credit Agricole S.A. * | 168,912 | 2,030,920 | ||||||
Natixis | 147,762 | 794,605 | ||||||
Societe Generale S.A. | 115,557 | 6,527,758 | ||||||
21,417,773 | ||||||||
Capital Goods 1.5% | ||||||||
Alstom S.A. | 35,457 | 1,316,194 | ||||||
Bouygues S.A. | 31,969 | 1,247,329 | ||||||
Compagnie de Saint-Gobain | 65,024 | 3,413,113 | ||||||
European Aeronautic Defence & Space Co., N.V. | 95,757 | 6,561,703 | ||||||
Legrand S.A. | 43,839 | 2,484,602 | ||||||
Rexel S.A. | 33,762 | 845,754 | ||||||
Safran S.A. | 41,318 | 2,634,352 | ||||||
Schneider Electric S.A. | 86,826 | 7,306,205 | ||||||
Thales S.A. | 15,153 | 928,058 | ||||||
Vallourec S.A. | 17,629 | 1,049,307 | ||||||
Vinci S.A. | 76,739 | 4,910,235 | ||||||
Zodiac Aerospace | 5,561 | 889,799 | ||||||
33,586,651 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Bureau Veritas S.A. | 36,775 | 1,109,347 | ||||||
Edenred | 32,510 | 1,103,637 | ||||||
Societe BIC S.A. | 4,511 | 563,310 | ||||||
2,776,294 | ||||||||
Consumer Durables & Apparel 0.6% | ||||||||
Christian Dior S.A. | 9,155 | 1,737,039 | ||||||
Kering | 12,452 | 2,822,004 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 41,782 | 8,021,950 | ||||||
12,580,993 | ||||||||
Consumer Services 0.1% | ||||||||
Accor S.A. | 26,009 | 1,162,496 | ||||||
Sodexo | 15,150 | 1,470,542 | ||||||
2,633,038 | ||||||||
Diversified Financials 0.0% | ||||||||
Eurazeo S.A. | 4,959 | 374,419 | ||||||
Wendel S.A. | 5,041 | 702,621 | ||||||
1,077,040 | ||||||||
Energy 1.1% | ||||||||
CGG S.A. * | 26,877 | 590,754 | ||||||
Technip S.A. | 16,954 | 1,775,739 | ||||||
Total S.A. | 351,989 | 21,595,558 | ||||||
23,962,051 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Carrefour S.A. | 98,468 | 3,594,333 | ||||||
Casino Guichard Perrachon S.A. | 9,523 | 1,070,431 | ||||||
4,664,764 | ||||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Danone | 94,084 | 6,968,252 | ||||||
Pernod-Ricard S.A. | 34,999 | 4,203,679 | ||||||
Remy Cointreau S.A. | 3,922 | 386,323 | ||||||
11,558,254 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Essilor International S.A. | 33,285 | 3,566,998 | ||||||
Household & Personal Products 0.3% | ||||||||
L’Oreal S.A. | 39,792 | 6,794,353 | ||||||
Insurance 0.4% | ||||||||
AXA S.A. | 295,146 | 7,353,690 | ||||||
CNP Assurances | 28,286 | 498,289 | ||||||
SCOR SE | 26,395 | 931,634 | ||||||
8,783,613 | ||||||||
Materials 0.6% | ||||||||
Air Liquide S.A. | 51,290 | 6,971,014 | ||||||
ArcelorMittal | 164,603 | 2,592,599 | ||||||
Arkema S.A. | 10,033 | 1,135,087 | ||||||
Imerys S.A. | 5,580 | 447,626 | ||||||
Lafarge S.A. | 31,048 | 2,142,169 | ||||||
13,288,495 | ||||||||
Media 0.3% | ||||||||
Eutelsat Communications S.A. | 25,025 | 791,488 | ||||||
JC Decaux S.A. | 12,016 | 482,752 | ||||||
Lagardere S.C.A. | 17,248 | 626,607 | ||||||
Publicis Groupe S.A. | 29,561 | 2,458,275 | ||||||
SES S.A. | 48,877 | 1,421,630 | ||||||
5,780,752 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
Sanofi | 196,090 | 20,907,729 | ||||||
Real Estate 0.3% | ||||||||
Fonciere des Regions | 5,116 | 438,137 | ||||||
Gecina S.A. | 3,516 | 469,196 | ||||||
ICADE | 5,560 | 511,406 |
See financial notes 63
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Klepierre | 17,099 | 766,911 | ||||||
Unibail-Rodamco SE | 15,963 | 4,170,635 | ||||||
6,356,285 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
STMicroelectronics N.V. | 101,655 | 781,931 | ||||||
Software & Services 0.2% | ||||||||
AtoS | 9,283 | 791,286 | ||||||
Cap Gemini S.A. | 23,567 | 1,545,476 | ||||||
Dassault Systemes S.A. | 10,183 | 1,237,562 | ||||||
3,574,324 | ||||||||
Telecommunication Services 0.4% | ||||||||
Iliad S.A. | 3,917 | 895,603 | ||||||
Orange S.A. | 305,118 | 4,194,175 | ||||||
Vivendi S.A. | 196,948 | 4,986,667 | ||||||
10,076,445 | ||||||||
Transportation 0.1% | ||||||||
Aeroports de Paris | 4,762 | 508,843 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 90,323 | 874,407 | ||||||
1,383,250 | ||||||||
Utilities 0.4% | ||||||||
EDF S.A. | 38,394 | 1,343,709 | ||||||
GDF Suez | 218,371 | 5,412,055 | ||||||
Suez Environnement Co. | 48,547 | 846,528 | ||||||
Veolia Environnement S.A. | 55,127 | 945,741 | ||||||
8,548,033 | ||||||||
209,973,058 | ||||||||
Germany 8.0% | ||||||||
Automobiles & Components 1.1% | ||||||||
Bayerische Motoren Werke AG | 54,483 | 6,166,300 | ||||||
Continental AG | 18,554 | 3,392,910 | ||||||
Daimler AG - Reg’d | 158,297 | 12,960,531 | ||||||
Volkswagen AG | 4,799 | 1,173,575 | ||||||
23,693,316 | ||||||||
Banks 0.1% | ||||||||
Commerzbank AG * | 160,796 | 2,056,522 | ||||||
Capital Goods 1.0% | ||||||||
Brenntag AG | 8,444 | 1,428,803 | ||||||
GEA Group AG | 30,280 | 1,316,053 | ||||||
Hochtief AG | 5,074 | 458,917 | ||||||
MAN SE | 6,085 | 733,244 | ||||||
Osram Licht AG * | 14,308 | 741,419 | ||||||
Siemens AG - Reg’d | 130,474 | 16,673,552 | ||||||
21,351,988 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Adidas AG | 34,090 | 3,884,402 | ||||||
Hugo Boss AG | 5,413 | 705,134 | ||||||
4,589,536 | ||||||||
Diversified Financials 0.5% | ||||||||
Deutsche Bank AG - Reg’d | 167,762 | 8,107,787 | ||||||
Deutsche Boerse AG | 31,882 | 2,398,388 | ||||||
10,506,175 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Metro AG | 21,663 | 1,015,691 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Suedzucker AG | 11,975 | 385,213 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Celesio AG | 15,063 | 468,307 | ||||||
Fresenius Medical Care AG & Co KGaA | 35,099 | 2,319,560 | ||||||
Fresenius SE & Co KGaA | 20,579 | 2,671,431 | ||||||
5,459,298 | ||||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 16,163 | 1,541,197 | ||||||
Henkel AG & Co. KGaA | 21,727 | 2,003,842 | ||||||
3,545,039 | ||||||||
Insurance 0.9% | ||||||||
Allianz SE - Reg’d | 75,028 | 12,597,375 | ||||||
Hannover Rueckversicherung SE - Reg’d | 9,967 | 797,673 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 29,511 | 6,156,947 | ||||||
19,551,995 | ||||||||
Materials 1.2% | ||||||||
BASF SE | 151,139 | 15,690,419 | ||||||
HeidelbergCement AG | 23,578 | 1,856,523 | ||||||
K&S AG - Reg’d (a) | 29,563 | 751,184 | ||||||
Lanxess AG | 13,589 | 954,380 | ||||||
Linde AG | 30,479 | 5,785,690 | ||||||
ThyssenKrupp AG * | 61,793 | 1,576,546 | ||||||
26,614,742 | ||||||||
Media 0.1% | ||||||||
Axel Springer AG | 6,956 | 419,725 | ||||||
Kabel Deutschland Holding AG | 3,474 | 436,132 | ||||||
ProSiebenSat.1 Media AG - Reg’d | 17,780 | 845,297 | ||||||
1,701,154 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
Bayer AG - Reg’d | 136,077 | 16,880,654 | ||||||
Merck KGaA | 10,869 | 1,808,064 | ||||||
QIAGEN N.V. * | 38,278 | 878,516 | ||||||
19,567,234 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Infineon Technologies AG | 171,796 | 1,662,011 | ||||||
Software & Services 0.6% | ||||||||
SAP AG | 151,616 | 11,864,274 | ||||||
United Internet AG - Reg’d | 16,565 | 653,426 | ||||||
12,517,700 | ||||||||
Telecommunication Services 0.3% | ||||||||
Deutsche Telekom AG - Reg’d | 462,206 | 7,263,431 | ||||||
Telefonica Deutschland Holding AG | 40,727 | 320,809 | ||||||
7,584,240 | ||||||||
Transportation 0.3% | ||||||||
Deutsche Lufthansa AG - Reg’d * | 37,860 | 731,948 | ||||||
Deutsche Post AG - Reg’d | 149,881 | 5,061,688 |
64 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Fraport AG Frankfurt Airport Services Worldwide | 6,036 | 466,964 | ||||||
6,260,600 | ||||||||
Utilities 0.4% | ||||||||
E.ON SE AG | 296,344 | 5,401,904 | ||||||
RWE AG | 80,530 | 2,966,892 | ||||||
8,368,796 | ||||||||
176,431,250 | ||||||||
Greece 0.1% | ||||||||
Consumer Services 0.0% | ||||||||
OPAP S.A. | 36,192 | 449,420 | ||||||
Telecommunication Services 0.1% | ||||||||
Hellenic Telecommunications Organization S.A. * | 40,909 | 514,857 | ||||||
964,277 | ||||||||
Hong Kong 2.8% | ||||||||
Banks 0.2% | ||||||||
Bank of East Asia Ltd. | 207,200 | 897,948 | ||||||
BOC Hong Kong (Holdings) Ltd. | 590,000 | 1,926,839 | ||||||
Hang Seng Bank Ltd. | 128,136 | 2,135,733 | ||||||
4,960,520 | ||||||||
Capital Goods 0.2% | ||||||||
Hopewell Holdings Ltd. | 84,500 | 284,572 | ||||||
Hutchison Whampoa Ltd. | 355,370 | 4,428,147 | ||||||
NWS Holdings Ltd. | 192,000 | 299,826 | ||||||
5,012,545 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Li & Fung Ltd. | 944,000 | 1,334,590 | ||||||
Yue Yuen Industrial Holdings Ltd. | 105,500 | 289,691 | ||||||
1,624,281 | ||||||||
Consumer Services 0.4% | ||||||||
Galaxy Entertainment Group Ltd. * | 347,000 | 2,590,314 | ||||||
MGM China Holdings Ltd. | 154,000 | 530,997 | ||||||
Sands China Ltd. | 402,000 | 2,858,256 | ||||||
Shangri-La Asia Ltd. | 224,000 | 410,361 | ||||||
SJM Holdings Ltd. | 313,000 | 1,012,040 | ||||||
Wynn Macau Ltd. | 261,200 | 1,002,685 | ||||||
8,404,653 | ||||||||
Diversified Financials 0.2% | ||||||||
First Pacific Co., Ltd. | 383,250 | 435,771 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 179,818 | 2,900,832 | ||||||
3,336,603 | ||||||||
Insurance 0.5% | ||||||||
AIA Group Ltd. | 1,981,800 | 10,063,243 | ||||||
Real Estate 0.8% | ||||||||
Cheung Kong (Holdings) Ltd. | 227,656 | 3,555,313 | ||||||
Hang Lung Properties Ltd. | 390,000 | 1,284,319 | ||||||
Henderson Land Development Co., Ltd. | 178,900 | 1,058,601 | ||||||
Hysan Development Co., Ltd. | 125,000 | 584,726 | ||||||
Kerry Properties Ltd. | 121,000 | 524,721 | ||||||
New World Development Co., Ltd. | 599,000 | 828,660 | ||||||
Sino Land Co., Ltd. | 474,000 | 664,783 | ||||||
Sun Hung Kai Properties Ltd. | 268,604 | 3,518,369 | ||||||
Swire Pacific Ltd., Class A | 111,090 | 1,283,922 | ||||||
Swire Properties Ltd. | 169,000 | 457,756 | ||||||
The Link REIT | 365,000 | 1,836,184 | ||||||
Wharf Holdings Ltd. | 253,100 | 2,129,902 | ||||||
Wheelock & Co., Ltd. | 162,000 | 826,738 | ||||||
18,553,994 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
ASM Pacific Technology Ltd. | 39,600 | 381,680 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
AAC Technologies Holdings, Inc. | 118,500 | 523,718 | ||||||
Telecommunication Services 0.0% | ||||||||
HKT Trust & HKT Ltd. | 301,000 | 279,112 | ||||||
PCCW Ltd. | 536,000 | 241,971 | ||||||
521,083 | ||||||||
Transportation 0.1% | ||||||||
Cathay Pacific Airways Ltd. | 169,000 | 334,788 | ||||||
MTR Corp., Ltd. | 232,500 | 900,695 | ||||||
Orient Overseas International Ltd. | 56,000 | 289,247 | ||||||
1,524,730 | ||||||||
Utilities 0.3% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 114,000 | 793,295 | ||||||
CLP Holdings Ltd. | 294,080 | 2,366,509 | ||||||
Hong Kong & China Gas Co., Ltd. | 914,634 | 2,136,577 | ||||||
Power Assets Holdings Ltd. | 232,500 | 1,937,002 | ||||||
7,233,383 | ||||||||
62,140,433 | ||||||||
Ireland 0.3% | ||||||||
Banks 0.0% | ||||||||
Bank of Ireland * | 3,395,484 | 1,240,996 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Kerry Group plc, Class A | 25,371 | 1,624,714 | ||||||
Materials 0.1% | ||||||||
CRH plc | 121,193 | 2,949,057 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Elan Corp. plc * | 79,370 | 1,318,320 | ||||||
Transportation 0.0% | ||||||||
Ryanair Holdings plc | 25,968 | 215,004 | ||||||
7,348,091 | ||||||||
Israel 0.4% | ||||||||
Banks 0.1% | ||||||||
Bank Hapoalim B.M. | 182,922 | 979,269 | ||||||
Bank Leumi Le-Israel B.M. * | 202,133 | 769,410 | ||||||
Mizrahi Tefahot Bank Ltd. | 20,764 | 243,393 | ||||||
1,992,072 |
See financial notes 65
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.0% | ||||||||
Delek Group Ltd. | 790 | 272,789 | ||||||
Materials 0.1% | ||||||||
Israel Chemicals Ltd. | 72,247 | 597,287 | ||||||
The Israel Corp., Ltd. * | 419 | 210,827 | ||||||
808,114 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Teva Pharmaceutical Industries Ltd. | 139,803 | 5,194,855 | ||||||
Software & Services 0.0% | ||||||||
NICE Systems Ltd. | 11,048 | 433,205 | ||||||
Telecommunication Services 0.0% | ||||||||
Bezeq Israeli Telecommunication Corp., Ltd. | 271,806 | 472,587 | ||||||
9,173,622 | ||||||||
Italy 2.2% | ||||||||
Automobiles & Components 0.1% | ||||||||
Fiat S.p.A. * | 144,712 | 1,135,516 | ||||||
Pirelli & C. S.p.A | 38,919 | 547,477 | ||||||
1,682,993 | ||||||||
Banks 0.5% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. (a)* | 860,993 | 271,451 | ||||||
Intesa Sanpaolo S.p.A. | 1,903,442 | 4,722,197 | ||||||
UniCredit S.p.A. | 714,965 | 5,366,946 | ||||||
Unione di Banche Italiane S.C.P.A. | 138,249 | 955,499 | ||||||
11,316,093 | ||||||||
Capital Goods 0.1% | ||||||||
CNH Industrial N.V. * | 152,365 | 1,801,868 | ||||||
Finmeccanica S.p.A. * | 70,375 | 515,709 | ||||||
Prysmian S.p.A. | 34,861 | 851,555 | ||||||
3,169,132 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Luxottica Group S.p.A. | 27,061 | 1,465,930 | ||||||
Diversified Financials 0.1% | ||||||||
Exor S.p.A. | 18,034 | 714,884 | ||||||
Mediobanca S.p.A. | 87,642 | 798,544 | ||||||
1,513,428 | ||||||||
Energy 0.6% | ||||||||
Eni S.p.A. | 418,612 | 10,627,271 | ||||||
Saipem S.p.A. | 43,536 | 1,018,443 | ||||||
Tenaris S.A. | 79,771 | 1,866,195 | ||||||
13,511,909 | ||||||||
Insurance 0.2% | ||||||||
Assicurazioni Generali S.p.A. | 194,085 | 4,537,512 | ||||||
Telecommunication Services 0.1% | ||||||||
Telecom Italia S.p.A. | 1,597,995 | 1,558,919 | ||||||
Telecom Italia S.p.A. - RSP | 972,502 | 760,642 | ||||||
2,319,561 | ||||||||
Transportation 0.1% | ||||||||
Atlantia S.p.A. | 56,267 | 1,233,210 | ||||||
Utilities 0.3% | ||||||||
Enel Green Power S.p.A. | 261,726 | 636,665 | ||||||
Enel S.p.A. | 1,083,147 | 4,778,765 | ||||||
Snam S.p.A. | 322,212 | 1,660,201 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 240,714 | 1,191,626 | ||||||
8,267,257 | ||||||||
49,017,025 | ||||||||
Japan 20.3% | ||||||||
Automobiles & Components 3.0% | ||||||||
Aisin Seiki Co., Ltd. | 31,600 | 1,283,731 | ||||||
Bridgestone Corp. | 106,357 | 3,646,204 | ||||||
Daihatsu Motor Co., Ltd. | 33,000 | 640,734 | ||||||
Denso Corp. | 81,400 | 3,912,769 | ||||||
Fuji Heavy Industries Ltd. | 97,000 | 2,652,128 | ||||||
Honda Motor Co., Ltd. | 268,239 | 10,711,556 | ||||||
Isuzu Motors Ltd. | 189,000 | 1,177,013 | ||||||
Koito Manufacturing Co., Ltd. | 18,000 | 327,667 | ||||||
Mazda Motor Corp. * | 431,000 | 1,940,149 | ||||||
Mitsubishi Motors Corp. (a)* | 71,500 | 803,457 | ||||||
NGK Spark Plug Co., Ltd. | 31,000 | 707,980 | ||||||
NHK Spring Co., Ltd. | 23,800 | 249,133 | ||||||
Nissan Motors Co., Ltd. | 409,096 | 4,107,838 | ||||||
NOK Corp. | 14,200 | 219,508 | ||||||
Stanley Electric Co., Ltd. | 22,900 | 532,677 | ||||||
Sumitomo Rubber Industries Ltd. | 27,100 | 377,272 | ||||||
Suzuki Motor Corp. | 59,200 | 1,488,606 | ||||||
The Yokohama Rubber Co., Ltd. | 30,000 | 293,447 | ||||||
Toyoda Gosei Co., Ltd. | 11,300 | 282,551 | ||||||
Toyota Boshoku Corp. | 14,000 | 187,518 | ||||||
Toyota Industries Corp. | 26,300 | 1,160,093 | ||||||
Toyota Motor Corp. | 453,903 | 29,430,241 | ||||||
Yamaha Motor Co., Ltd. | 43,000 | 658,695 | ||||||
66,790,967 | ||||||||
Banks 2.1% | ||||||||
Aozora Bank Ltd. | 155,000 | 450,590 | ||||||
Fukuoka Financial Group, Inc. | 123,000 | 554,786 | ||||||
Hokuhoku Financial Group, Inc. | 173,000 | 356,718 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 2,096,809 | 13,353,032 | ||||||
Mizuho Financial Group, Inc. | 3,778,934 | 7,932,217 | ||||||
Resona Holdings, Inc. | 301,100 | 1,566,241 | ||||||
Seven Bank Ltd. | 116,700 | 413,031 | ||||||
Shinsei Bank Ltd. | 291,000 | 681,320 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 209,446 | 10,123,755 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 530,000 | 2,617,715 | ||||||
Suruga Bank Ltd. | 28,000 | 444,172 | ||||||
The Bank of Kyoto Ltd. | 53,000 | 466,999 | ||||||
The Bank of Yokohama Ltd. | 192,000 | 1,058,740 | ||||||
The Chiba Bank Ltd. | 120,000 | 855,464 | ||||||
The Chugoku Bank Ltd. | 24,000 | 345,036 | ||||||
The Gunma Bank Ltd. | 52,000 | 300,880 | ||||||
The Hachijuni Bank Ltd. | 77,000 | 475,674 | ||||||
The Hiroshima Bank Ltd. | 92,000 | 391,544 | ||||||
The Iyo Bank Ltd. | 46,000 | 480,318 | ||||||
The Joyo Bank Ltd. | 108,000 | 560,968 |
66 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Nishi-Nippon City Bank Ltd. | 91,000 | 245,860 | ||||||
The Shizuoka Bank Ltd. | 92,000 | 1,035,127 | ||||||
Yamaguchi Financial Group, Inc. | 38,000 | 358,098 | ||||||
45,068,285 | ||||||||
Capital Goods 2.8% | ||||||||
Amada Co., Ltd. | 60,000 | 516,154 | ||||||
Asahi Glass Co., Ltd. | 161,000 | 994,340 | ||||||
Chiyoda Corp. | 29,000 | 367,756 | ||||||
Daikin Industries Ltd. | 38,900 | 2,238,047 | ||||||
Fanuc Corp. | 31,800 | 5,100,963 | ||||||
Fuji Electric Co., Ltd. | 75,000 | 336,219 | ||||||
Furukawa Electric Co., Ltd. | 91,000 | 210,918 | ||||||
Hino Motors Ltd. | 44,000 | 621,700 | ||||||
Hitachi Construction Machinery Co., Ltd. | 17,500 | 370,624 | ||||||
IHI Corp. | 211,000 | 893,439 | ||||||
Itochu Corp. | 248,000 | 2,981,987 | ||||||
JGC Corp. | 34,000 | 1,300,969 | ||||||
JTEKT Corp. | 30,300 | 389,000 | ||||||
Kajima Corp. | 136,000 | 577,225 | ||||||
Kawasaki Heavy Industries Ltd. | 229,000 | 894,823 | ||||||
Kinden Corp. | 30,000 | 329,483 | ||||||
Komatsu Ltd. | 152,709 | 3,350,491 | ||||||
Kubota Corp. | 174,000 | 2,576,352 | ||||||
Kurita Water Industries Ltd. | 18,200 | 397,197 | ||||||
LIXIL Group Corp. | 44,800 | 1,051,576 | ||||||
Mabuchi Motor Co., Ltd. | 4,400 | 233,941 | ||||||
Makita Corp. | 18,300 | 925,419 | ||||||
Marubeni Corp. | 263,000 | 2,059,144 | ||||||
Mitsubishi Corp. | 233,500 | 4,723,951 | ||||||
Mitsubishi Electric Corp. | 318,000 | 3,495,443 | ||||||
Mitsubishi Heavy Industries Ltd. | 500,000 | 3,177,634 | ||||||
Mitsui & Co., Ltd. | 283,500 | 4,050,059 | ||||||
Nabtesco Corp. | 18,500 | 451,539 | ||||||
NGK Insulators Ltd. | 46,000 | 773,719 | ||||||
Nidec Corp. | 17,100 | 1,666,432 | ||||||
NSK Ltd. | 78,000 | 833,222 | ||||||
Obayashi Corp. | 108,000 | 691,968 | ||||||
Shimizu Corp. | 98,000 | 502,586 | ||||||
SMC Corp. | 8,600 | 2,002,236 | ||||||
Sojitz Corp. | 168,000 | 326,221 | ||||||
Sumitomo Corp. | 186,600 | 2,428,281 | ||||||
Sumitomo Electric Industries Ltd. | 126,800 | 1,900,014 | ||||||
Sumitomo Heavy Industries Ltd. | 74,000 | 327,519 | ||||||
Taisei Corp. | 157,000 | 805,454 | ||||||
The Japan Steel Works Ltd. | 43,000 | 240,220 | ||||||
THK Co., Ltd. | 20,700 | 451,847 | ||||||
Toshiba Corp. | 642,178 | 2,729,427 | ||||||
TOTO Ltd. | 46,000 | 650,543 | ||||||
Toyota Tsusho Corp. | 36,900 | 1,024,971 | ||||||
61,971,053 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Dai Nippon Printing Co., Ltd. | 90,000 | 945,537 | ||||||
Park24 Co., Ltd. | 18,000 | 351,442 | ||||||
Secom Co., Ltd. | 35,000 | 2,108,484 | ||||||
Toppan Printing Co., Ltd. | 90,000 | 710,852 | ||||||
4,116,315 | ||||||||
Consumer Durables & Apparel 0.7% | ||||||||
Asics Corp. | 27,600 | 486,605 | ||||||
Casio Computer Co., Ltd. | 32,000 | 306,285 | ||||||
Namco Bandai Holdings, Inc. | 31,100 | 586,247 | ||||||
Nikon Corp. | 56,700 | 1,048,170 | ||||||
Panasonic Corp. | 363,312 | 3,723,715 | ||||||
Rinnai Corp. | 6,700 | 518,580 | ||||||
Sankyo Co., Ltd. | 8,900 | 423,275 | ||||||
Sega Sammy Holdings, Inc. | 29,500 | 756,248 | ||||||
Sekisui Chemical Co., Ltd. | 65,000 | 755,202 | ||||||
Sekisui House Ltd. | 89,000 | 1,277,493 | ||||||
Sharp Corp. * | 236,785 | 700,433 | ||||||
Shimano, Inc. | 12,900 | 1,129,061 | ||||||
Sony Corp. | 165,800 | 2,892,329 | ||||||
Yamaha Corp. | 28,500 | 425,518 | ||||||
15,029,161 | ||||||||
Consumer Services 0.1% | ||||||||
Benesse Holdings, Inc. | 11,400 | 424,900 | ||||||
McDonald’s Holdings Co., Ltd. | 11,000 | 303,834 | ||||||
Oriental Land Co., Ltd. | 8,200 | 1,313,042 | ||||||
2,041,776 | ||||||||
Diversified Financials 0.6% | ||||||||
Acom Co., Ltd. * | 88,800 | 347,712 | ||||||
AEON Financial Service Co., Ltd. | 9,900 | 304,032 | ||||||
Credit Saison Co., Ltd. | 27,800 | 760,898 | ||||||
Daiwa Securities Group, Inc. | 276,000 | 2,520,920 | ||||||
Japan Exchange Group, Inc. | 41,300 | 960,148 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 97,400 | 550,770 | ||||||
Nomura Holdings, Inc. | 597,600 | 4,414,491 | ||||||
ORIX Corp. | 205,600 | 3,561,214 | ||||||
SBI Holdings, Inc. | 30,590 | 370,195 | ||||||
13,790,380 | ||||||||
Energy 0.2% | ||||||||
Cosmo Oil Co., Ltd. * | 74,000 | 130,300 | ||||||
Idemitsu Kosan Co., Ltd. | 3,800 | 318,110 | ||||||
Inpex Corp. | 147,800 | 1,707,381 | ||||||
Japan Petroleum Exploration Co. | 5,300 | 215,786 | ||||||
JX Holdings, Inc. | 358,200 | 1,771,180 | ||||||
Showa Shell Sekiyu K.K. | 33,500 | 360,154 | ||||||
TonenGeneral Sekiyu K.K. | 49,000 | 455,183 | ||||||
4,958,094 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Aeon Co., Ltd. | 98,000 | 1,337,349 | ||||||
FamilyMart Co., Ltd. | 11,200 | 501,723 | ||||||
Lawson, Inc. | 11,300 | 906,191 | ||||||
Seven & i Holdings Co., Ltd. | 125,203 | 4,633,592 | ||||||
7,378,855 | ||||||||
Food, Beverage & Tobacco 0.8% | ||||||||
Ajinomoto Co., Inc. | 101,000 | 1,413,296 | ||||||
Asahi Group Holdings Ltd. | 65,600 | 1,774,119 | ||||||
Calbee, Inc. | 12,000 | 314,872 | ||||||
Coca-Cola West Co., Ltd. | 13,303 | 269,825 | ||||||
Japan Tobacco, Inc. | 181,000 | 6,549,246 | ||||||
Kikkoman Corp. | 25,000 | 455,639 |
See financial notes 67
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Kirin Holdings Co., Ltd. | 145,000 | 2,119,246 | ||||||
Meiji Holdings Co., Ltd. | 9,600 | 536,656 | ||||||
Nippon Meat Packers, Inc. | 27,000 | 395,314 | ||||||
Nisshin Seifun Group, Inc. | 36,800 | 398,964 | ||||||
Nissin Food Holdings Co., Ltd. | 9,500 | 406,638 | ||||||
Suntory Beverage & Food Ltd. * | 21,200 | 697,948 | ||||||
Toyo Suisan Kaisha Ltd. | 16,000 | 508,848 | ||||||
Yakult Honsha Co., Ltd. | 14,600 | 741,585 | ||||||
Yamazaki Baking Co., Ltd. | 14,000 | 142,534 | ||||||
16,724,730 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Alfresa Holdings Corp. | 6,400 | 349,800 | ||||||
M3, Inc. | 136 | 372,447 | ||||||
Medipal Holdings Corp. | 20,000 | 269,678 | ||||||
Miraca Holdings, Inc. | 9,400 | 423,545 | ||||||
Olympus Corp. * | 41,300 | 1,321,245 | ||||||
Suzuken Co., Ltd. | 11,500 | 415,262 | ||||||
Sysmex Corp. | 12,100 | 801,542 | ||||||
Terumo Corp. | 26,200 | 1,268,884 | ||||||
5,222,403 | ||||||||
Household & Personal Products 0.2% | ||||||||
Kao Corp. | 86,919 | 2,894,712 | ||||||
Shiseido Co., Ltd. | 57,800 | 988,784 | ||||||
Unicharm Corp. | 19,100 | 1,226,772 | ||||||
5,110,268 | ||||||||
Insurance 0.5% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 84,962 | 2,196,893 | ||||||
NKSJ Holdings, Inc. | 54,500 | 1,410,742 | ||||||
Sony Financial Holdings, Inc. | 27,400 | 511,629 | ||||||
T&D Holdings, Inc. | 95,600 | 1,147,748 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 142,000 | 2,027,164 | ||||||
Tokio Marine Holdings, Inc. | 113,399 | 3,717,723 | ||||||
11,011,899 | ||||||||
Materials 1.2% | ||||||||
Nippon Steel & Sumitomo Metal Corp. | 1,251,410 | 4,130,344 | ||||||
Air Water, Inc. | 26,000 | 371,651 | ||||||
Asahi Kasei Corp. | 202,000 | 1,537,341 | ||||||
Daicel Corp. | 51,000 | 429,868 | ||||||
Daido Steel Co., Ltd. | 39,000 | 224,265 | ||||||
Hitachi Chemical Co., Ltd. | 14,200 | 217,853 | ||||||
Hitachi Metals Ltd. | 29,000 | 390,502 | ||||||
JFE Holdings, Inc. | 82,700 | 1,880,158 | ||||||
JSR Corp. | 31,300 | 596,203 | ||||||
Kaneka Corp. | 38,000 | 241,130 | ||||||
Kansai Paint Co., Ltd. | 36,000 | 483,728 | ||||||
Kobe Steel Ltd. * | 394,000 | 695,950 | ||||||
Kuraray Co., Ltd. | 56,800 | 666,908 | ||||||
Maruichi Steel Tube Ltd. | 8,800 | 214,895 | ||||||
Mitsubishi Chemical Holdings Corp. | 217,000 | 1,015,830 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 64,000 | 523,047 | ||||||
Mitsubishi Materials Corp. | 167,000 | 653,373 | ||||||
Mitsui Chemicals, Inc. | 117,000 | 311,022 | ||||||
Nitto Denko Corp. | 28,100 | 1,473,590 | ||||||
Oji Holdings Corp. | 119,000 | 543,833 | ||||||
Shin-Etsu Chemical Co., Ltd. | 67,560 | 3,819,980 | ||||||
Showa Denko K.K. | 191,000 | 258,986 | ||||||
Sumitomo Chemical Co., Ltd. | 240,000 | 878,971 | ||||||
Sumitomo Metal Mining Co., Ltd. | 84,000 | 1,163,450 | ||||||
Taiheiyo Cement Corp. | 189,000 | 801,589 | ||||||
Taiyo Nippon Sanso Corp. | 36,000 | 246,865 | ||||||
Teijin Ltd. | 126,000 | 282,930 | ||||||
Toray Industries, Inc. | 234,000 | 1,462,204 | ||||||
Toyo Seikan Group Holdings Ltd. | 26,100 | 542,435 | ||||||
Ube Industries Ltd. | 144,000 | 298,065 | ||||||
Yamato Kogyo Co., Ltd. | 7,700 | 285,394 | ||||||
26,642,360 | ||||||||
Media 0.1% | ||||||||
Dentsu, Inc. | 36,700 | 1,386,606 | ||||||
Hakuhodo DY Holdings, Inc. | 40,300 | 311,687 | ||||||
Toho Co., Ltd. | 20,000 | 428,557 | ||||||
2,126,850 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.0% | ||||||||
Astellas Pharma, Inc. | 72,670 | 4,051,088 | ||||||
Chugai Pharmaceutical Co., Ltd. | 35,000 | 822,372 | ||||||
Daiichi Sankyo Co., Ltd. | 112,600 | 2,087,708 | ||||||
Dainippon Sumitomo Pharma Co., Ltd. | 28,500 | 383,498 | ||||||
Eisai Co., Ltd. | 42,600 | 1,673,414 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 10,700 | 578,984 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 37,000 | 408,664 | ||||||
Mitsubishi Tanabe Pharma Corp. | 37,900 | 534,531 | ||||||
Ono Pharmaceutical Co., Ltd. | 13,700 | 1,035,859 | ||||||
Otsuka Holdings Co., Ltd. | 61,300 | 1,745,950 | ||||||
Santen Pharmaceutical Co., Ltd. | 12,800 | 649,801 | ||||||
Shionogi & Co., Ltd. | 50,200 | 1,110,852 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. | 5,000 | 351,073 | ||||||
Takeda Pharmaceutical Co., Ltd. | 129,900 | 6,190,325 | ||||||
Tsumura & Co. | 10,100 | 317,442 | ||||||
21,941,561 | ||||||||
Real Estate 1.1% | ||||||||
Aeon Mall Co., Ltd. | 20,200 | 573,699 | ||||||
Daito Trust Construction Co., Ltd. | 12,300 | 1,255,876 | ||||||
Daiwa House Industry Co., Ltd. | 98,000 | 1,963,309 | ||||||
Hulic Co., Ltd. | 45,700 | 727,193 | ||||||
Japan Prime Realty Investment Corp. | 121 | 402,100 | ||||||
Japan Real Estate Investment Corp. | 100 | 1,142,491 | ||||||
Japan Retail Fund Investment Corp. | 374 | 757,471 | ||||||
Mitsubishi Estate Co., Ltd. | 205,502 | 5,873,166 | ||||||
Mitsui Fudosan Co., Ltd. | 139,777 | 4,630,239 | ||||||
Nippon Building Fund, Inc. | 112 | 1,385,541 | ||||||
Nippon Prologis REIT, Inc. | 42 | 419,421 |
68 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Nomura Real Estate Holdings, Inc. | 20,200 | 511,089 | ||||||
Nomura Real Estate Office Fund, Inc. | 57 | 281,580 | ||||||
NTT Urban Development Corp. | 22,700 | 289,773 | ||||||
Sumitomo Realty & Development Co., Ltd. | 59,000 | 2,791,670 | ||||||
Tokyo Tatemono Co., Ltd. | 70,000 | 657,160 | ||||||
Tokyu Fudosan Holdings Corp. * | 84,800 | 833,080 | ||||||
United Urban Investment Corp. | 403 | 615,072 | ||||||
25,109,930 | ||||||||
Retailing 0.5% | ||||||||
ABC-Mart, Inc. | 5,980 | 299,065 | ||||||
Don Quijote Co., Ltd. | 8,500 | 565,815 | ||||||
Fast Retailing Co., Ltd. | 8,800 | 2,962,184 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 57,500 | 871,424 | ||||||
J. Front Retailing Co., Ltd. | 74,000 | 575,823 | ||||||
Marui Group Co., Ltd. | 39,900 | 381,950 | ||||||
Nitori Holdings Co., Ltd. | 6,350 | 595,666 | ||||||
Rakuten, Inc. | 115,820 | 1,509,092 | ||||||
Sanrio Co., Ltd. | 7,400 | 406,643 | ||||||
Shimamura Co., Ltd. | 4,200 | 472,160 | ||||||
Takashimaya Co., Ltd. | 46,000 | 438,888 | ||||||
USS Co., Ltd. | 36,500 | 534,524 | ||||||
Yamada Denki Co., Ltd. | 145,200 | 407,284 | ||||||
10,020,518 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Advantest Corp. | 23,900 | 286,034 | ||||||
Rohm Co., Ltd. | 16,500 | 677,286 | ||||||
Sumco Corp. | 27,600 | 250,796 | ||||||
Tokyo Electron Ltd. | 29,400 | 1,613,255 | ||||||
2,827,371 | ||||||||
Software & Services 0.4% | ||||||||
Dena Co., Ltd. (a) | 15,600 | 339,926 | ||||||
Fujitsu Ltd. * | 297,000 | 1,275,972 | ||||||
Gree, Inc. (a) | 24,703 | 212,286 | ||||||
GungHo Online Entertainment, Inc. (a)* | 591 | 372,948 | ||||||
Itochu Techno-Solutions Corp. | 5,206 | 204,232 | ||||||
Konami Corp. | 15,600 | 377,011 | ||||||
Nexon Co., Ltd. | 15,000 | 175,314 | ||||||
Nintendo Co., Ltd. | 17,739 | 1,994,815 | ||||||
Nomura Research Institute Ltd. | 16,700 | 560,490 | ||||||
NTT Data Corp. | 20,000 | 664,893 | ||||||
Oracle Corp., Japan | 6,600 | 260,592 | ||||||
Otsuka Corp. | 2,700 | 350,199 | ||||||
Trend Micro, Inc. | 17,100 | 636,021 | ||||||
Yahoo Japan Corp. | 238,000 | 1,110,441 | ||||||
8,535,140 | ||||||||
Technology Hardware & Equipment 1.5% | ||||||||
Brother Industries Ltd. | 40,400 | 459,037 | ||||||
Canon, Inc. | 186,595 | 5,888,319 | ||||||
Citizen Holdings Co., Ltd. | 36,000 | 256,846 | ||||||
FUJIFILM Holdings Corp. | 77,911 | 1,905,995 | ||||||
Hamamatsu Photonics K.K. | 11,300 | 422,839 | ||||||
Hirose Electric Co., Ltd. | 5,200 | 793,369 | ||||||
Hitachi High-Technologies Corp. | 10,900 | 250,699 | ||||||
Hitachi Ltd. | 795,079 | 5,561,659 | ||||||
Hoya Corp. | 73,707 | 1,767,446 | ||||||
Ibiden Co., Ltd. | 16,500 | 286,035 | ||||||
Keyence Corp. | 7,600 | 3,257,281 | ||||||
Konica Minolta, Inc. | 77,500 | 641,773 | ||||||
Kyocera Corp. | 53,600 | 2,783,477 | ||||||
Murata Manufacturing Co., Ltd. | 33,574 | 2,694,980 | ||||||
NEC Corp. | 373,000 | 837,827 | ||||||
Nippon Electric Glass Co., Ltd. | 54,000 | 277,762 | ||||||
Omron Corp. | 34,600 | 1,320,378 | ||||||
Ricoh Co., Ltd. | 107,000 | 1,130,006 | ||||||
Shimadzu Corp. | 42,000 | 411,280 | ||||||
TDK Corp. | 21,000 | 892,502 | ||||||
Yaskawa Electric Corp. | 37,000 | 479,178 | ||||||
Yokogawa Electric Corp. | 36,600 | 478,319 | ||||||
32,797,007 | ||||||||
Telecommunication Services 1.1% | ||||||||
KDDI Corp. | 89,300 | 4,836,175 | ||||||
Nippon Telegraph & Telephone Corp. | 71,378 | 3,710,251 | ||||||
NTT DoCoMo, Inc. | 248,600 | 3,944,045 | ||||||
Softbank Corp. | 158,100 | 11,806,728 | ||||||
24,297,199 | ||||||||
Transportation 1.0% | ||||||||
ANA Holdings, Inc. (a) | 152,000 | 317,566 | ||||||
Central Japan Railway Co. | 23,700 | 3,073,217 | ||||||
East Japan Railway Co. | 55,860 | 4,852,593 | ||||||
Hankyu Hanshin Holdings, Inc. | 182,000 | 1,020,809 | ||||||
Japan Airlines Co., Ltd. | 10,800 | 631,285 | ||||||
Kamigumi Co., Ltd. | 34,000 | 295,744 | ||||||
Keikyu Corp. | 78,000 | 734,220 | ||||||
Keio Corp. | 97,000 | 672,058 | ||||||
Keisei Electric Railway Co., Ltd. | 47,000 | 485,375 | ||||||
Kintetsu Corp. | 288,000 | 1,059,886 | ||||||
Mitsubishi Logistics Corp. | 18,000 | 250,145 | ||||||
Mitsui O.S.K. Lines, Ltd. | 162,000 | 685,718 | ||||||
Nippon Express Co., Ltd. | 125,000 | 627,693 | ||||||
Nippon Yusen K.K. | 242,000 | 739,430 | ||||||
Odakyu Electric Railway Co., Ltd. | 100,000 | 965,079 | ||||||
Tobu Railway Co., Ltd. | 164,000 | 850,154 | ||||||
Tokyu Corp. (b) | 184,000 | 1,253,053 | ||||||
West Japan Railway Co. | 28,000 | 1,255,519 | ||||||
Yamato Holdings Co., Ltd. | 58,900 | 1,266,696 | ||||||
21,036,240 | ||||||||
Utilities 0.6% | ||||||||
Chubu Electric Power Co., Inc. | 104,400 | 1,545,441 | ||||||
Electric Power Development Co., Ltd. | 18,400 | 588,024 | ||||||
Hokkaido Electric Power Co., Inc. * | 32,100 | 413,516 | ||||||
Hokuriku Electric Power Co. | 29,200 | 415,906 | ||||||
Kyushu Electric Power Co., Inc. * | 68,400 | 963,060 | ||||||
Osaka Gas Co., Ltd. | 303,000 | 1,276,259 | ||||||
Shikoku Electric Power Co., Inc. * | 27,700 | 494,422 | ||||||
The Chugoku Electric Power Co., Inc. | 49,500 | 758,769 | ||||||
The Kansai Electric Power Co., Inc. * | 115,400 | 1,460,620 |
See financial notes 69
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Toho Gas Co., Ltd. | 56,000 | 292,010 | ||||||
Tohoku Electric Power Co., Inc. * | 73,200 | 886,026 | ||||||
Tokyo Electric Power Co., Inc. * | 230,690 | 1,231,169 | ||||||
Tokyo Gas Co., Ltd. | 390,201 | 2,117,239 | ||||||
12,442,461 | ||||||||
446,990,823 | ||||||||
Netherlands 2.6% | ||||||||
Capital Goods 0.3% | ||||||||
Koninklijke Boskalis Westminster N.V. | 13,058 | 627,600 | ||||||
Koninklijke Philips N.V. | 157,712 | 5,573,652 | ||||||
OCI * | 14,400 | 553,701 | ||||||
6,754,953 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Randstad Holding N.V. | 19,961 | 1,229,370 | ||||||
Diversified Financials 0.4% | ||||||||
ING Groep N.V. CVA * | 630,400 | 8,010,939 | ||||||
Energy 0.1% | ||||||||
Fugro N.V. CVA | 11,905 | 744,304 | ||||||
Koninklijke Vopak N.V. | 11,680 | 718,359 | ||||||
1,462,663 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Koninklijke Ahold N.V. | 165,859 | 3,152,406 | ||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Heineken Holding N.V. | 16,733 | 1,062,794 | ||||||
Heineken N.V. | 37,984 | 2,617,369 | ||||||
Unilever N.V. CVA | 268,056 | 10,627,195 | ||||||
14,307,358 | ||||||||
Insurance 0.1% | ||||||||
Aegon N.V. | 293,767 | 2,337,467 | ||||||
Delta Lloyd N.V. | 33,185 | 703,576 | ||||||
3,041,043 | ||||||||
Materials 0.2% | ||||||||
Akzo Nobel N.V. | 39,243 | 2,848,821 | ||||||
Koninklijke DSM N.V. | 25,030 | 1,892,082 | ||||||
4,740,903 | ||||||||
Media 0.2% | ||||||||
Reed Elsevier N.V. | 114,381 | 2,299,582 | ||||||
Wolters Kluwer N.V. | 49,429 | 1,339,073 | ||||||
3,638,655 | ||||||||
Real Estate 0.0% | ||||||||
Corio N.V. | 10,200 | 444,011 | ||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
ASML Holding N.V. | 58,809 | 5,568,487 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Gemalto N.V. | 12,883 | 1,445,982 | ||||||
Telecommunication Services 0.1% | ||||||||
Koninklijke (Royal) KPN N.V. * | 511,498 | 1,634,820 | ||||||
Ziggo N.V. | 27,244 | 1,167,928 | ||||||
2,802,748 | ||||||||
Transportation 0.0% | ||||||||
TNT Express N.V. | 53,093 | 489,491 | ||||||
57,089,009 | ||||||||
New Zealand 0.1% | ||||||||
Consumer Services 0.0% | ||||||||
SKYCITY Entertainment Group Ltd. | 102,973 | 330,706 | ||||||
Materials 0.1% | ||||||||
Fletcher Building Ltd. | 112,830 | 931,137 | ||||||
Telecommunication Services 0.0% | ||||||||
Telecom Corp. of New Zealand Ltd. | 299,008 | 580,210 | ||||||
Transportation 0.0% | ||||||||
Auckland International Airport Ltd. | 158,136 | 447,656 | ||||||
Utilities 0.0% | ||||||||
Contact Energy Ltd. | 75,447 | 327,170 | ||||||
2,616,879 | ||||||||
Norway 0.8% | ||||||||
Banks 0.1% | ||||||||
DnB A.S.A. | 161,321 | 2,859,658 | ||||||
Energy 0.4% | ||||||||
Aker Solutions A.S.A. | 25,567 | 353,223 | ||||||
Seadrill Ltd. | 62,523 | 2,891,953 | ||||||
Statoil A.S.A. | 185,516 | 4,389,532 | ||||||
Subsea 7 S.A. | 43,035 | 910,139 | ||||||
8,544,847 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Orkla A.S.A. | 121,828 | 987,559 | ||||||
Insurance 0.0% | ||||||||
Gjensidige Forsikring A.S.A. | 31,379 | 585,697 | ||||||
Materials 0.1% | ||||||||
Norsk Hydro A.S.A. | 156,070 | 696,504 | ||||||
Yara International A.S.A. | 30,063 | 1,294,733 | ||||||
1,991,237 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. | 115,495 | 2,775,070 | ||||||
17,744,068 | ||||||||
Portugal 0.2% | ||||||||
Banks 0.0% | ||||||||
Banco Espirito Santo, S.A. - Reg’d * | 269,627 | 354,283 | ||||||
Energy 0.1% | ||||||||
Galp Energia, SGPS, S.A. | 59,533 | 1,008,097 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Jeronimo Martins, SGPS, S.A. | 40,951 | 754,175 | ||||||
Telecommunication Services 0.0% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d | 109,146 | 491,976 |
70 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 323,409 | 1,190,475 | ||||||
3,799,006 | ||||||||
Singapore 1.5% | ||||||||
Banks 0.5% | ||||||||
DBS Group Holdings Ltd. | 287,246 | 3,872,498 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 424,552 | 3,551,584 | ||||||
United Overseas Bank Ltd. | 214,233 | 3,587,675 | ||||||
11,011,757 | ||||||||
Capital Goods 0.2% | ||||||||
Keppel Corp., Ltd. | 251,800 | 2,197,285 | ||||||
Noble Group Ltd. | 629,000 | 519,690 | ||||||
SembCorp Industries Ltd. | 173,000 | 739,648 | ||||||
SembCorp Marine Ltd. (a) | 152,000 | 549,874 | ||||||
Singapore Technologies Engineering Ltd. | 238,000 | 807,011 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 221,000 | 209,650 | ||||||
5,023,158 | ||||||||
Consumer Services 0.1% | ||||||||
Genting Singapore plc | 974,000 | 1,191,690 | ||||||
Diversified Financials 0.0% | ||||||||
Singapore Exchange Ltd. | 141,000 | 831,849 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Olam International Ltd. (a) | 200,000 | 247,431 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Golden Agri-Resources Ltd. | 1,055,000 | 509,419 | ||||||
Wilmar International Ltd. | 306,000 | 851,151 | ||||||
1,360,570 | ||||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. (a) | 270,000 | 923,586 | ||||||
Real Estate 0.3% | ||||||||
Ascendas REIT | 327,000 | 621,736 | ||||||
CapitaCommercial Trust | 267,000 | 315,938 | ||||||
CapitaLand Ltd. | 428,000 | 1,072,350 | ||||||
CapitaMall Trust | 391,000 | 635,060 | ||||||
CapitaMalls Asia Ltd. | 195,000 | 316,676 | ||||||
City Developments Ltd. | 74,000 | 612,516 | ||||||
Global Logistic Properties Ltd. | 493,000 | 1,223,775 | ||||||
Keppel Land Ltd. | 102,000 | 304,088 | ||||||
UOL Group Ltd. | 95,000 | 502,822 | ||||||
5,604,961 | ||||||||
Retailing 0.0% | ||||||||
Jardine Cycle & Carriage Ltd. | 19,000 | 559,946 | ||||||
Telecommunication Services 0.2% | ||||||||
Singapore Telecommunications Ltd. | 1,312,237 | 3,984,975 | ||||||
StarHub Ltd. | 108,000 | 386,183 | ||||||
4,371,158 | ||||||||
Transportation 0.1% | ||||||||
ComfortDelGro Corp., Ltd. | 301,000 | 464,796 | ||||||
Hutchison Port Holdings Trust, Class U | 739,000 | 539,315 | ||||||
Singapore Airlines Ltd. | 98,000 | 822,062 | ||||||
1,826,173 | ||||||||
32,952,279 | ||||||||
Spain 3.2% | ||||||||
Banks 1.4% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 921,450 | 10,768,908 | ||||||
Banco de Sabadell S.A. | 576,049 | 1,476,013 | ||||||
Banco Popular Espanol S.A. * | 204,380 | 1,159,318 | ||||||
Banco Santander S.A. | 1,833,518 | 16,254,618 | ||||||
Bankia S.A. * | 528,191 | 790,300 | ||||||
CaixaBank | 197,479 | 1,023,564 | ||||||
31,472,721 | ||||||||
Capital Goods 0.1% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 25,244 | 828,133 | ||||||
Ferrovial S.A. | 69,156 | 1,318,234 | ||||||
Zardoya Otis S.A. | 27,869 | 484,826 | ||||||
2,631,193 | ||||||||
Energy 0.2% | ||||||||
Repsol S.A. | 143,274 | 3,841,296 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 100,220 | 913,703 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 124,994 | 501,937 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Grifols S.A. | 26,346 | 1,079,829 | ||||||
Retailing 0.3% | ||||||||
Inditex S.A. | 35,900 | 5,896,175 | ||||||
Software & Services 0.1% | ||||||||
Amadeus IT Holding S.A., A Shares | 62,882 | 2,333,066 | ||||||
Telecommunication Services 0.5% | ||||||||
Telefonica S.A. * | 673,997 | 11,861,882 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 62,904 | 1,347,718 | ||||||
International Consolidated Airlines Group S.A. * | 142,935 | 793,797 | ||||||
2,141,515 | ||||||||
Utilities 0.4% | ||||||||
Acciona S.A. (a) | 5,331 | 337,944 | ||||||
Enagas S.A. | 31,816 | 849,489 | ||||||
Gas Natural SDG S.A. | 58,478 | 1,379,271 | ||||||
Iberdrola S.A. | 772,777 | 4,850,601 | ||||||
Red Electrica Corp. S.A. | 18,412 | 1,146,417 | ||||||
8,563,722 | ||||||||
71,237,039 |
See financial notes 71
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sweden 3.0% | ||||||||
Banks 0.8% | ||||||||
Nordea Bank AB | 466,503 | 5,967,277 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 249,959 | 3,023,269 | ||||||
Svenska Handelsbanken AB, A Shares | 81,170 | 3,671,040 | ||||||
Swedbank AB, A Shares | 147,697 | 3,844,009 | ||||||
16,505,595 | ||||||||
Capital Goods 0.8% | ||||||||
Alfa Laval AB | 52,549 | 1,198,684 | ||||||
Assa Abloy AB, B Shares | 55,208 | 2,739,262 | ||||||
Atlas Copco AB, A Shares | 109,913 | 3,045,371 | ||||||
Atlas Copco AB, B Shares | 63,248 | 1,571,630 | ||||||
Sandvik AB | 176,482 | 2,384,632 | ||||||
Scania AB, B Shares | 52,971 | 1,061,714 | ||||||
Skanska AB, B Shares | 62,888 | 1,210,864 | ||||||
SKF AB, B Shares | 65,912 | 1,743,987 | ||||||
Volvo AB, B Shares | 245,374 | 3,149,352 | ||||||
18,105,496 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Securitas AB, B Shares | 54,176 | 617,766 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, B Shares | 41,795 | 1,030,871 | ||||||
Husqvarna AB, B Shares | 66,683 | 391,797 | ||||||
1,422,668 | ||||||||
Diversified Financials 0.2% | ||||||||
Industrivarden AB, C Shares | 19,617 | 349,204 | ||||||
Investment AB Kinnevik, B Shares | 36,290 | 1,335,624 | ||||||
Investor AB, B Shares | 75,379 | 2,416,817 | ||||||
Ratos AB, B Shares | 26,143 | 226,239 | ||||||
4,327,884 | ||||||||
Energy 0.0% | ||||||||
Lundin Petroleum AB * | 35,133 | 724,029 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Swedish Match AB | 33,880 | 1,117,120 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Elekta AB, B Shares | 62,504 | 923,130 | ||||||
Getinge AB, B Shares | 33,194 | 1,051,592 | ||||||
1,974,722 | ||||||||
Household & Personal Products 0.1% | ||||||||
Svenska Cellulosa AB, SCA B Shares | 96,151 | 2,725,996 | ||||||
Materials 0.0% | ||||||||
Boliden AB | 43,629 | 619,663 | ||||||
Retailing 0.3% | ||||||||
Hennes & Mauritz AB, B Shares | 156,233 | 6,751,114 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Hexagon AB, B Shares | 40,616 | 1,217,863 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 500,784 | 5,989,984 | ||||||
7,207,847 | ||||||||
Telecommunication Services 0.2% | ||||||||
Millicom International Cellular S.A. SDR | 10,713 | 988,344 | ||||||
Tele2 AB, B Shares | 53,012 | 638,976 | ||||||
TeliaSonera AB | 391,891 | 3,240,543 | ||||||
4,867,863 | ||||||||
66,967,763 | ||||||||
Switzerland 8.7% | ||||||||
Banks 0.0% | ||||||||
Banque Cantonale Vaudoise - Reg’d | 405 | 225,044 | ||||||
Capital Goods 0.6% | ||||||||
ABB Ltd. - Reg’d * | 361,853 | 9,219,128 | ||||||
Geberit AG - Reg’d | 6,244 | 1,865,486 | ||||||
Schindler Holding AG | 8,056 | 1,141,801 | ||||||
Schindler Holding AG - Reg’d | 3,369 | 479,453 | ||||||
Sulzer AG - Reg’d | 3,727 | 583,052 | ||||||
13,288,920 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Adecco S.A. - Reg’d * | 21,033 | 1,551,052 | ||||||
SGS S.A. - Reg’d | 911 | 2,131,515 | ||||||
3,682,567 | ||||||||
Consumer Durables & Apparel 0.6% | ||||||||
Cie Financiere Richemont S.A. | 85,897 | 8,782,941 | ||||||
The Swatch Group AG - Bearer Shares | 5,089 | 3,250,301 | ||||||
The Swatch Group AG - Reg’d | 7,213 | 802,535 | ||||||
12,835,777 | ||||||||
Diversified Financials 1.0% | ||||||||
Credit Suisse Group AG - Reg’d * | 246,552 | 7,669,726 | ||||||
Julius Baer Group Ltd. * | 35,848 | 1,758,550 | ||||||
Pargesa Holding S.A. | 4,900 | 389,889 | ||||||
Partners Group Holding AG | 2,903 | 752,523 | ||||||
UBS AG - Reg’d * | 599,812 | 11,601,001 | ||||||
22,171,689 | ||||||||
Energy 0.1% | ||||||||
Transocean Ltd. | 59,296 | 2,800,433 | ||||||
Food, Beverage & Tobacco 1.9% | ||||||||
Aryzta AG * | 14,543 | 1,084,943 | ||||||
Barry Callebaut AG - Reg’d * | 328 | 342,695 | ||||||
Coca-Cola HBC AG ADR | 28,832 | 832,091 | ||||||
Lindt & Spruengli AG | 146 | 616,278 | ||||||
Lindt & Spruengli AG - Reg’d | 17 | 855,105 | ||||||
Nestle S.A. - Reg’d | 530,651 | 38,304,464 | ||||||
42,035,576 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Sonova Holding AG - Reg’d * | 8,461 | 1,101,124 | ||||||
Insurance 0.6% | ||||||||
Baloise Holding AG - Reg’d | 7,756 | 901,044 | ||||||
Swiss Life Holding AG - Reg’d * | 5,377 | 1,066,153 | ||||||
Swiss Re AG * | 58,192 | 5,108,246 | ||||||
Zurich Insurance Group AG * | 24,406 | 6,743,944 | ||||||
13,819,387 |
72 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 0.6% | ||||||||
EMS-Chemie Holding AG - Reg’d | 1,287 | 468,652 | ||||||
Givaudan S.A. - Reg’d * | 1,388 | 1,968,445 | ||||||
Holcim Ltd. - Reg’d * | 37,737 | 2,806,857 | ||||||
Sika AG | 347 | 1,093,900 | ||||||
Syngenta AG - Reg’d | 15,324 | 6,185,020 | ||||||
12,522,874 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.9% | ||||||||
Actelion Ltd. - Reg’d * | 17,805 | 1,377,583 | ||||||
Lonza Group AG - Reg’d * | 8,936 | 797,653 | ||||||
Novartis AG - Reg’d | 378,516 | 29,381,384 | ||||||
Roche Holding AG | 115,609 | 31,969,980 | ||||||
63,526,600 | ||||||||
Real Estate 0.0% | ||||||||
Swiss Prime Site AG - Reg’d * | 9,117 | 690,322 | ||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 3,893 | 1,985,647 | ||||||
Transportation 0.1% | ||||||||
Kuehne & Nagel International AG - Reg’d | 9,006 | 1,137,736 | ||||||
191,823,696 | ||||||||
United Kingdom 21.0% | ||||||||
Automobiles & Components 0.1% | ||||||||
GKN plc | 259,043 | 1,525,952 | ||||||
Banks 3.0% | ||||||||
Barclays plc (b) | 2,513,976 | 10,577,451 | ||||||
HSBC Holdings plc | 3,065,004 | 33,596,547 | ||||||
Lloyds Banking Group plc * | 7,606,845 | 9,408,119 | ||||||
Royal Bank of Scotland Group plc * | 354,906 | 2,090,222 | ||||||
Standard Chartered plc | 398,338 | 9,564,089 | ||||||
65,236,428 | ||||||||
Capital Goods 1.0% | ||||||||
BAE Systems plc | 532,872 | 3,887,029 | ||||||
Bunzl plc | 54,021 | 1,191,649 | ||||||
Cobham plc | 174,274 | 804,851 | ||||||
IMI plc | 52,305 | 1,272,525 | ||||||
Invensys plc | 105,432 | 846,052 | ||||||
Meggitt plc | 130,122 | 1,194,543 | ||||||
Melrose Industries plc | 208,392 | 1,068,363 | ||||||
Rolls-Royce Holdings plc * | 309,399 | 5,700,056 | ||||||
Smiths Group plc | 66,657 | 1,534,136 | ||||||
The Weir Group plc | 35,677 | 1,288,590 | ||||||
Travis Perkins plc | 42,514 | 1,264,262 | ||||||
Wolseley plc | 45,328 | 2,440,050 | ||||||
22,492,106 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Aggreko plc | 47,091 | 1,214,299 | ||||||
Babcock International Group plc | 60,855 | 1,244,424 | ||||||
Capita plc | 110,256 | 1,742,944 | ||||||
Experian plc | 165,535 | 3,370,062 | ||||||
G4S plc | 250,398 | 1,051,747 | ||||||
Intertek Group plc | 26,132 | 1,394,123 | ||||||
Serco Group plc | 78,082 | 697,731 | ||||||
10,715,330 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Burberry Group plc | 74,608 | 1,833,380 | ||||||
Persimmon plc * | 52,253 | 1,057,924 | ||||||
2,891,304 | ||||||||
Consumer Services 0.4% | ||||||||
Carnival plc | 30,016 | 1,066,837 | ||||||
Compass Group plc | 297,583 | 4,279,599 | ||||||
InterContinental Hotels Group plc | 44,075 | 1,284,202 | ||||||
TUI Travel plc | 63,413 | 390,938 | ||||||
Whitbread plc | 30,550 | 1,679,977 | ||||||
William Hill plc | 134,646 | 864,489 | ||||||
9,566,042 | ||||||||
Diversified Financials 0.2% | ||||||||
3i Group plc | 156,771 | 936,973 | ||||||
Aberdeen Asset Management plc | 152,830 | 1,084,609 | ||||||
Hargreaves Lansdown plc | 34,659 | 660,264 | ||||||
ICAP plc | 84,161 | 519,693 | ||||||
Investec plc | 93,157 | 651,783 | ||||||
London Stock Exchange Group plc | 30,385 | 798,638 | ||||||
Schroders plc | 17,787 | 734,111 | ||||||
5,386,071 | ||||||||
Energy 3.4% | ||||||||
AMEC plc | 51,985 | 980,447 | ||||||
BG Group plc | 560,092 | 11,425,689 | ||||||
BP plc | 3,124,521 | 24,254,414 | ||||||
Petrofac Ltd. | 42,272 | 991,426 | ||||||
Royal Dutch Shell plc, A Shares | 624,969 | 20,814,470 | ||||||
Royal Dutch Shell plc, B Shares | 421,118 | 14,579,107 | ||||||
Tullow Oil plc | 149,816 | 2,264,500 | ||||||
75,310,053 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
J. Sainsbury plc | 194,682 | 1,231,465 | ||||||
Tesco plc | 1,329,508 | 7,755,203 | ||||||
WM Morrison Supermarkets plc | 350,479 | 1,581,370 | ||||||
10,568,038 | ||||||||
Food, Beverage & Tobacco 2.6% | ||||||||
Associated British Foods plc | 59,514 | 2,163,628 | ||||||
British American Tobacco plc | 315,648 | 17,415,007 | ||||||
Coca-Cola HBC AG CDI * | 3,589 | 103,222 | ||||||
Diageo plc | 413,071 | 13,167,648 | ||||||
Imperial Tobacco Group plc | 161,066 | 6,013,229 | ||||||
SABMiller plc | 158,217 | 8,249,553 | ||||||
Tate & Lyle plc | 79,230 | 1,005,502 | ||||||
Unilever plc | 211,197 | 8,564,261 | ||||||
56,682,050 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Smith & Nephew plc | 151,369 | 1,935,954 | ||||||
Household & Personal Products 0.4% | ||||||||
Reckitt Benckiser Group plc | 106,442 | 8,276,831 |
See financial notes 73
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Insurance 1.1% | ||||||||
Admiral Group plc | 35,329 | 723,334 | ||||||
Aviva plc | 484,913 | 3,481,146 | ||||||
Direct Line Insurance Group plc | 120,326 | 434,094 | ||||||
Legal & General Group plc | 973,269 | 3,373,162 | ||||||
Old Mutual plc | 777,194 | 2,532,905 | ||||||
Prudential plc | 421,133 | 8,612,486 | ||||||
Resolution Ltd. | 225,109 | 1,288,921 | ||||||
RSA Insurance Group plc | 570,573 | 1,175,111 | ||||||
Standard Life plc | 390,765 | 2,204,577 | ||||||
23,825,736 | ||||||||
Materials 1.9% | ||||||||
Anglo American plc | 229,337 | 5,452,847 | ||||||
Antofagasta plc | 64,835 | 886,097 | ||||||
BHP Billiton plc | 347,548 | 10,724,799 | ||||||
Croda International plc | 22,002 | 859,787 | ||||||
Fresnillo plc | 29,153 | 455,737 | ||||||
Glencore Xstrata plc * | 1,746,029 | 9,502,270 | ||||||
Johnson Matthey plc | 33,173 | 1,596,396 | ||||||
Randgold Resources Ltd. | 14,737 | 1,092,923 | ||||||
Rexam plc | 132,952 | 1,107,104 | ||||||
Rio Tinto plc | 209,172 | 10,584,135 | ||||||
Vedanta Resources plc | 18,357 | 312,766 | ||||||
42,574,861 | ||||||||
Media 0.7% | ||||||||
British Sky Broadcasting Group plc | 173,513 | 2,607,027 | ||||||
ITV plc | 589,718 | 1,803,110 | ||||||
Pearson plc | 134,454 | 2,812,105 | ||||||
Reed Elsevier plc | 196,906 | 2,758,323 | ||||||
WPP plc | 218,488 | 4,640,885 | ||||||
14,621,450 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||
AstraZeneca plc | 206,035 | 10,907,519 | ||||||
GlaxoSmithKline plc | 810,567 | 21,368,454 | ||||||
Shire plc | 92,317 | 4,093,371 | ||||||
36,369,344 | ||||||||
Real Estate 0.3% | ||||||||
British Land Co., plc | 150,048 | 1,496,489 | ||||||
Hammerson plc | 110,490 | 936,261 | ||||||
Intu Properties plc | 111,892 | 617,119 | ||||||
Land Securities Group plc | 126,362 | 2,003,104 | ||||||
Segro plc | 110,982 | 581,272 | ||||||
5,634,245 | ||||||||
Retailing 0.3% | ||||||||
Kingfisher plc | �� | 392,947 | 2,377,110 | |||||
Marks & Spencer Group plc | 260,694 | 2,102,277 | ||||||
Next plc | 26,779 | 2,338,527 | ||||||
6,817,914 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ARM Holdings plc | 227,828 | 3,569,978 | ||||||
Software & Services 0.0% | ||||||||
The Sage Group plc | 179,166 | 966,549 | ||||||
Telecommunication Services 1.7% | ||||||||
BT Group plc | 1,296,777 | 7,846,316 | ||||||
Inmarsat plc | 75,804 | 874,910 | ||||||
Vodafone Group plc | 8,009,957 | 29,338,526 | ||||||
38,059,752 | ||||||||
Transportation 0.0% | ||||||||
easyJet plc | 27,466 | 575,334 | ||||||
Utilities 0.8% | ||||||||
Centrica plc | 851,697 | 4,816,969 | ||||||
National Grid plc | 603,505 | 7,584,091 | ||||||
Severn Trent plc | 41,151 | 1,228,345 | ||||||
SSE plc | 160,362 | 3,637,836 | ||||||
United Utilities Group plc | 112,141 | 1,268,305 | ||||||
18,535,546 | ||||||||
462,136,868 | ||||||||
Total Common Stock | ||||||||
(Cost $1,549,007,351) | 2,115,822,955 | |||||||
Preferred Stock 0.6% of net assets | ||||||||
Germany 0.6% | ||||||||
Automobiles & Components 0.4% | ||||||||
Bayerische Motoren Werke AG | 9,094 | 759,085 | ||||||
Porsche Automobil Holding SE | 25,436 | 2,375,125 | ||||||
Volkswagen AG | 23,798 | 6,035,368 | ||||||
9,169,578 | ||||||||
Household & Personal Products 0.2% | ||||||||
Henkel AG & Co. KGaA | 29,067 | 3,138,371 | ||||||
Materials 0.0% | ||||||||
Fuchs Petrolub SE | 6,305 | 509,041 | ||||||
Utilities 0.0% | ||||||||
RWE AG | 5,322 | 181,315 | ||||||
12,998,305 | ||||||||
United Kingdom 0.0% | ||||||||
Capital Goods 0.0% | ||||||||
Rolls-Royce Holdings plc (b)* | 26,140,646 | 41,914 | ||||||
Total Preferred Stock | ||||||||
(Cost $8,346,686) | 13,040,219 | |||||||
Rights 0.0% of net assets | ||||||||
Hong Kong 0.0% | ||||||||
New Hotel (b)(c)* | 7,488 | — | ||||||
Spain 0.0% | ||||||||
Banco Santander S.A. (b)* | 1,797,317 | 389,200 | ||||||
Total Rights | ||||||||
(Cost $371,648) | 389,200 | |||||||
74 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Company 0.4% of net assets | ||||||||
United States 0.4% | ||||||||
iShares MSCI EAFE ETF | 140,000 | 9,223,200 | ||||||
Total Other Investment Company | ||||||||
(Cost $8,089,400) | 9,223,200 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 2.6% of net assets | ||||||||
Time Deposits 2.4% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
US Dollar | ||||||||
0.03%, 11/01/13 | 10,413,037 | 10,413,037 | ||||||
Brown Brothers Harriman | ||||||||
Hong Kong Dollar | ||||||||
0.01%, 11/01/13 | 46,475 | 5,995 | ||||||
Japanese Yen | ||||||||
0.01%, 11/01/13 | 1,565,817 | 15,924 | ||||||
Citibank | ||||||||
Euro Currency | ||||||||
0.02%, 11/01/13 | 127,549 | 173,179 | ||||||
Pound Sterling | ||||||||
0.08%, 11/01/13 | 21,761 | 34,892 | ||||||
DNB | ||||||||
US Dollar | ||||||||
0.03%, 11/01/13 | 41,779,649 | 41,779,649 | ||||||
52,422,676 | ||||||||
U.S. Treasury Obligations 0.2% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/19/13 (d)(e) | 500,000 | 500,000 | ||||||
0.01%, 12/19/13 (d)(e) | 5,400,000 | 5,399,964 | ||||||
5,899,964 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $58,322,640) | 58,322,640 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.2% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 4,637,410 | 4,637,410 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $4,637,410) | 4,637,410 | |||||||
End of collateral invested for securities on loan. |
At 10/31/13, the tax basis cost of the fund’s investments was $1,648,601,656 and the unrealized appreciation and depreciation were $645,861,051 and ($97,664,493), respectively, with a net unrealized appreciation of $548,196,558.
At 10/31/13, the values of certain foreign securities held by the fund aggregating $2,108,330,382 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. Securities on loan were valued at $3,176,224. | |
(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 $0 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt | |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
ETF — | Exchange traded fund | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/20/13 | 600 | 56,259,000 | 2,417,836 |
See financial notes 75
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .7% | Common Stock | 2,186,526,479 | 2,982,439,540 | ||||||||
1 | .0% | Other Investment Company | 29,664,810 | 29,664,810 | ||||||||
0 | .1% | Short-Term Investment | 2,099,986 | 2,099,986 | ||||||||
99 | .8% | Total Investments | 2,218,291,275 | 3,014,204,336 | ||||||||
0 | .6% | Collateral Invested for Securities on Loan | 19,475,816 | 19,475,816 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (13,248,634 | ) | ||||||||
100 | .0% | Net Assets | 3,020,431,518 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.7% of net assets | ||||||||
Automobiles & Components 1.1% | ||||||||
BorgWarner, Inc. | 14,550 | 1,500,542 | ||||||
Delphi Automotive plc | 50,100 | 2,865,720 | ||||||
Ford Motor Co. | 416,574 | 7,127,581 | ||||||
General Motors Co. * | 151,300 | 5,590,535 | ||||||
Harley-Davidson, Inc. | 39,960 | 2,559,038 | ||||||
Johnson Controls, Inc. | 154,110 | 7,112,176 | ||||||
Lear Corp. | 23,300 | 1,803,187 | ||||||
The Goodyear Tire & Rubber Co. | 71,090 | 1,491,468 | ||||||
TRW Automotive Holdings Corp. * | 22,850 | 1,716,264 | ||||||
Visteon Corp. * | 9,500 | 732,355 | ||||||
32,498,866 | ||||||||
Banks 2.3% | ||||||||
BB&T Corp. | 129,675 | 4,405,060 | ||||||
CIT Group, Inc. * | 18,800 | 905,408 | ||||||
Comerica, Inc. | 34,800 | 1,506,840 | ||||||
Fifth Third Bancorp | 161,790 | 3,078,864 | ||||||
Hudson City Bancorp, Inc. | 151,190 | 1,357,686 | ||||||
Huntington Bancshares, Inc. | 148,927 | 1,310,558 | ||||||
KeyCorp | 191,790 | 2,403,129 | ||||||
M&T Bank Corp. | 15,286 | 1,720,133 | ||||||
New York Community Bancorp, Inc. (b) | 83,230 | 1,349,158 | ||||||
Popular, Inc. * | 34,268 | 865,267 | ||||||
Regions Financial Corp. | 324,925 | 3,129,028 | ||||||
SunTrust Banks, Inc. | 118,660 | 3,991,722 | ||||||
The PNC Financial Services Group, Inc. | 75,545 | 5,554,824 | ||||||
U.S. Bancorp | 260,900 | 9,747,224 | ||||||
Wells Fargo & Co. | 652,425 | 27,852,023 | ||||||
Zions Bancorp | 40,235 | 1,141,467 | ||||||
70,318,391 | ||||||||
Capital Goods 8.2% | ||||||||
3M Co. | 105,075 | 13,223,689 | ||||||
AECOM Technology Corp. * | 27,300 | 867,594 | ||||||
AGCO Corp. | 22,340 | 1,304,209 | ||||||
Alliant Techsystems, Inc. | 9,420 | 1,025,555 | ||||||
AMETEK, Inc. | 15,600 | 746,148 | ||||||
Caterpillar, Inc. | 103,245 | 8,606,503 | ||||||
Cummins, Inc. | 24,584 | 3,122,660 | ||||||
Danaher Corp. | 46,900 | 3,381,021 | ||||||
Deere & Co. | 61,986 | 5,072,934 | ||||||
Dover Corp. | 31,675 | 2,907,448 | ||||||
Eaton Corp. plc | 50,299 | 3,549,097 | ||||||
EMCOR Group, Inc. | 20,440 | 757,506 | ||||||
Emerson Electric Co. | 141,050 | 9,446,118 | ||||||
Exelis, Inc. | 107,555 | 1,773,582 | ||||||
Fastenal Co. | 20,640 | 1,027,872 | ||||||
Flowserve Corp. | 18,375 | 1,276,511 | ||||||
Fluor Corp. | 52,040 | 3,862,409 | ||||||
General Cable Corp. | 19,200 | 632,256 | ||||||
General Dynamics Corp. | 89,225 | 7,729,562 | ||||||
General Electric Co. | 1,779,325 | 46,511,555 | ||||||
Harsco Corp. | 37,035 | 1,032,536 | ||||||
Honeywell International, Inc. | 103,140 | 8,945,332 | ||||||
Hubbell, Inc., Class B | 8,130 | 874,300 | ||||||
Illinois Tool Works, Inc. | 66,570 | 5,245,050 | ||||||
Ingersoll-Rand plc | 60,742 | 4,101,907 | ||||||
ITT Corp. | 59,627 | 2,368,981 | ||||||
Jacobs Engineering Group, Inc. * | 35,740 | 2,173,707 | ||||||
Joy Global, Inc. | 19,200 | 1,089,600 | ||||||
KBR, Inc. | 49,400 | 1,706,276 | ||||||
L-3 Communications Holdings, Inc. | 47,035 | 4,724,666 | ||||||
Lennox International, Inc. | 13,935 | 1,087,766 | ||||||
Lockheed Martin Corp. | 76,635 | 10,218,511 | ||||||
Masco Corp. | 98,950 | 2,090,814 | ||||||
Northrop Grumman Corp. | 111,495 | 11,986,827 | ||||||
Oshkosh Corp. * | 24,920 | 1,185,943 | ||||||
Owens Corning * | 29,650 | 1,065,325 | ||||||
PACCAR, Inc. | 61,242 | 3,405,055 | ||||||
Pall Corp. | 10,440 | 840,629 | ||||||
Parker Hannifin Corp. | 31,617 | 3,690,336 | ||||||
Pentair Ltd. | 14,537 | 975,287 | ||||||
Precision Castparts Corp. | 11,716 | 2,969,420 | ||||||
Quanta Services, Inc. * | 27,200 | 821,712 | ||||||
Raytheon Co. | 113,710 | 9,366,293 | ||||||
Rockwell Automation, Inc. | 15,750 | 1,738,958 | ||||||
Rockwell Collins, Inc. | 25,030 | 1,747,845 | ||||||
Roper Industries, Inc. | 5,400 | 684,774 | ||||||
Snap-on, Inc. | 7,700 | 801,339 | ||||||
SPX Corp. | 15,335 | 1,391,038 | ||||||
Stanley Black & Decker, Inc. | 17,403 | 1,376,403 | ||||||
Terex Corp. * | 31,025 | 1,084,324 | ||||||
Textron, Inc. | 61,820 | 1,779,798 | ||||||
The Boeing Co. | 87,040 | 11,358,720 |
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. | 17,465 | 922,327 | ||||||
United Rentals, Inc. * | 17,300 | 1,117,407 | ||||||
United Technologies Corp. | 172,815 | 18,361,594 | ||||||
URS Corp. | 33,493 | 1,815,990 | ||||||
W.W. Grainger, Inc. | 8,635 | 2,322,556 | ||||||
WESCO International, Inc. * | 12,600 | 1,076,796 | ||||||
Xylem, Inc. | 27,155 | 936,848 | ||||||
247,307,219 | ||||||||
Commercial & Professional Supplies 0.8% | ||||||||
Cintas Corp. | 26,650 | 1,432,971 | ||||||
Equifax, Inc. | 15,930 | 1,030,193 | ||||||
Iron Mountain, Inc. | 27,080 | 718,703 | ||||||
Manpowergroup, Inc. | 46,290 | 3,615,249 | ||||||
Pitney Bowes, Inc. | 110,605 | 2,360,311 | ||||||
R.R. Donnelley & Sons Co. | 185,440 | 3,443,621 | ||||||
Republic Services, Inc. | 46,924 | 1,570,546 | ||||||
Robert Half International, Inc. | 39,910 | 1,537,732 | ||||||
The ADT Corp. (b) | 15,700 | 680,909 | ||||||
The Dun & Bradstreet Corp. | 9,600 | 1,044,384 | ||||||
United Stationers, Inc. | 20,950 | 931,018 | ||||||
Waste Management, Inc. | 133,155 | 5,797,569 | ||||||
24,163,206 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Coach, Inc. | 45,975 | 2,330,013 | ||||||
D.R. Horton, Inc. | 49,890 | 945,416 | ||||||
Garmin Ltd. (b) | 27,370 | 1,279,547 | ||||||
Harman International Industries, Inc. | 15,020 | 1,216,920 | ||||||
Hasbro, Inc. | 31,965 | 1,650,992 | ||||||
Jarden Corp. * | 18,615 | 1,030,526 | ||||||
Leggett & Platt, Inc. | 43,720 | 1,300,233 | ||||||
Mattel, Inc. | 54,335 | 2,410,844 | ||||||
Mohawk Industries, Inc. * | 10,435 | 1,381,803 | ||||||
Newell Rubbermaid, Inc. | 51,950 | 1,539,278 | ||||||
NIKE, Inc., Class B | 102,156 | 7,739,339 | ||||||
NVR, Inc. * | 1,303 | 1,195,268 | ||||||
Ralph Lauren Corp. | 8,420 | 1,394,689 | ||||||
VF Corp. | 11,445 | 2,460,675 | ||||||
Whirlpool Corp. | 21,655 | 3,161,847 | ||||||
31,037,390 | ||||||||
Consumer Services 1.5% | ||||||||
Apollo Group, Inc., Class A * | 76,950 | 2,053,795 | ||||||
Brinker International, Inc. | 27,955 | 1,241,761 | ||||||
Carnival Corp. | 58,545 | 2,028,584 | ||||||
Darden Restaurants, Inc. | 35,145 | 1,811,022 | ||||||
H&R Block, Inc. | 45,565 | 1,295,869 | ||||||
International Game Technology | 56,855 | 1,068,874 | ||||||
Marriott International, Inc., Class A | 40,189 | 1,811,720 | ||||||
McDonald’s Corp. | 168,580 | 16,271,342 | ||||||
MGM Resorts International * | 62,015 | 1,180,766 | ||||||
Royal Caribbean Cruises Ltd. | 35,205 | 1,480,018 | ||||||
Service Corp. International | 45,600 | 821,256 | ||||||
Starbucks Corp. | 50,180 | 4,067,089 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 32,770 | 2,412,527 | ||||||
Wyndham Worldwide Corp. | 23,340 | 1,549,776 | ||||||
Wynn Resorts Ltd. | 9,700 | 1,612,625 | ||||||
Yum! Brands, Inc. | 54,630 | 3,694,081 | ||||||
44,401,105 | ||||||||
Diversified Financials 6.8% | ||||||||
American Express Co. | 133,425 | 10,914,165 | ||||||
Ameriprise Financial, Inc. | 24,300 | 2,443,122 | ||||||
Bank of America Corp. | 3,172,660 | 44,290,334 | ||||||
Berkshire Hathaway, Inc., Class B * | 179,011 | 20,600,586 | ||||||
BlackRock, Inc. | 7,100 | 2,135,751 | ||||||
Capital One Financial Corp. | 96,620 | 6,634,895 | ||||||
Citigroup, Inc. | 563,033 | 27,464,750 | ||||||
CME Group, Inc. | 25,900 | 1,922,039 | ||||||
Discover Financial Services | 53,022 | 2,750,781 | ||||||
Eaton Vance Corp. | 17,800 | 744,218 | ||||||
Franklin Resources, Inc. | 62,820 | 3,383,485 | ||||||
Invesco Ltd. | 48,500 | 1,636,875 | ||||||
JPMorgan Chase & Co. | 704,442 | 36,306,941 | ||||||
Legg Mason, Inc. | 44,920 | 1,728,072 | ||||||
Moody’s Corp. | 25,370 | 1,792,644 | ||||||
Morgan Stanley | 191,235 | 5,494,182 | ||||||
Northern Trust Corp. | 24,760 | 1,396,959 | ||||||
NYSE Euronext (b) | 53,620 | 2,360,352 | ||||||
PHH Corp. * | 40,090 | 964,165 | ||||||
SLM Corp. | 56,635 | 1,436,830 | ||||||
State Street Corp. | 46,736 | 3,274,792 | ||||||
T. Rowe Price Group, Inc. | 28,145 | 2,178,704 | ||||||
The Bank of New York Mellon Corp. | 135,152 | 4,297,834 | ||||||
The Charles Schwab Corp. (a) | 138,015 | 3,126,040 | ||||||
The Goldman Sachs Group, Inc. | 79,411 | 12,774,053 | ||||||
The McGraw Hill Financial, Inc. | 64,480 | 4,492,966 | ||||||
206,545,535 | ||||||||
Energy 15.1% | ||||||||
Alpha Natural Resources, Inc. * | 90,100 | 630,700 | ||||||
Anadarko Petroleum Corp. | 59,515 | 5,671,184 | ||||||
Apache Corp. | 69,220 | 6,146,736 | ||||||
Arch Coal, Inc. (b) | 144,200 | 611,408 | ||||||
Baker Hughes, Inc. | 99,249 | 5,765,374 | ||||||
Cameron International Corp. * | 27,680 | 1,518,525 | ||||||
Chesapeake Energy Corp. | 186,120 | 5,203,915 | ||||||
Chevron Corp. | 589,905 | 70,765,004 | ||||||
Cimarex Energy Co. | 10,845 | 1,142,521 | ||||||
ConocoPhillips | 828,510 | 60,729,783 | ||||||
CONSOL Energy, Inc. | 29,635 | 1,081,678 | ||||||
Devon Energy Corp. | 102,440 | 6,476,257 | ||||||
Diamond Offshore Drilling, Inc. (b) | 21,920 | 1,357,506 | ||||||
Energen Corp. | 13,510 | 1,058,103 | ||||||
EOG Resources, Inc. | 20,350 | 3,630,440 | ||||||
EQT Corp. | 9,700 | 830,417 | ||||||
Exxon Mobil Corp. | 1,516,084 | 135,871,448 | ||||||
FMC Technologies, Inc. * | 19,280 | 974,604 | ||||||
Halliburton Co. | 149,665 | 7,936,735 | ||||||
Helmerich & Payne, Inc. | 12,095 | 937,967 | ||||||
Hess Corp. | 108,550 | 8,814,260 | ||||||
HollyFrontier Corp. | 23,102 | 1,064,078 |
2 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Kinder Morgan, Inc. | 41,700 | 1,472,427 | ||||||
Marathon Oil Corp. | 360,490 | 12,710,877 | ||||||
Marathon Petroleum Corp. | 95,395 | 6,836,006 | ||||||
McDermott International, Inc. * | 95,810 | 677,377 | ||||||
Murphy Oil Corp. | 84,075 | 5,071,404 | ||||||
Nabors Industries Ltd. | 115,100 | 2,011,948 | ||||||
National Oilwell Varco, Inc. | 58,923 | 4,783,369 | ||||||
Newfield Exploration Co. * | 38,200 | 1,163,190 | ||||||
Noble Energy, Inc. | 29,270 | 2,193,201 | ||||||
Occidental Petroleum Corp. | 148,570 | 14,274,606 | ||||||
Patterson-UTI Energy, Inc. | 45,400 | 1,101,404 | ||||||
Peabody Energy Corp. | 80,645 | 1,570,965 | ||||||
Phillips 66 | 348,355 | 22,444,513 | ||||||
Pioneer Natural Resources Co. | 6,300 | 1,290,114 | ||||||
QEP Resources, Inc. | 33,750 | 1,115,775 | ||||||
Rowan Cos. plc, Class A * | 21,700 | 782,936 | ||||||
Schlumberger Ltd. | 150,700 | 14,123,604 | ||||||
SEACOR Holdings, Inc. | 10,000 | 978,000 | ||||||
Seadrill Ltd. | 39,200 | 1,827,504 | ||||||
Southwestern Energy Co. * | 25,340 | 943,155 | ||||||
Spectra Energy Corp. | 96,260 | 3,423,968 | ||||||
Tesoro Corp. | 55,460 | 2,711,439 | ||||||
The Williams Cos., Inc. | 100,875 | 3,602,246 | ||||||
Valero Energy Corp. | 401,725 | 16,539,018 | ||||||
World Fuel Services Corp. | 49,300 | 1,880,795 | ||||||
WPX Energy, Inc. * | 90,058 | 1,993,884 | ||||||
455,742,368 | ||||||||
Food & Staples Retailing 4.3% | ||||||||
Casey’s General Stores, Inc. | 13,312 | 970,178 | ||||||
Costco Wholesale Corp. | 110,415 | 13,028,970 | ||||||
CVS Caremark Corp. | 388,435 | 24,183,963 | ||||||
Harris Teeter Supermarkets, Inc. | 14,100 | 695,412 | ||||||
Safeway, Inc. | 269,840 | 9,417,416 | ||||||
SUPERVALU, Inc. * | 607,420 | 4,270,163 | ||||||
Sysco Corp. | 192,540 | 6,226,743 | ||||||
The Kroger Co. | 250,820 | 10,745,129 | ||||||
Wal-Mart Stores, Inc. | 544,625 | 41,799,969 | ||||||
Walgreen Co. | 291,070 | 17,242,987 | ||||||
Whole Foods Market, Inc. | 35,100 | 2,215,863 | ||||||
130,796,793 | ||||||||
Food, Beverage & Tobacco 5.1% | ||||||||
Altria Group, Inc. | 403,680 | 15,029,006 | ||||||
Archer-Daniels-Midland Co. | 300,205 | 12,278,384 | ||||||
Beam, Inc. | 21,700 | 1,460,410 | ||||||
Brown-Forman Corp., Class B | 16,050 | 1,171,329 | ||||||
Bunge Ltd. | 83,475 | 6,855,802 | ||||||
Campbell Soup Co. | 39,730 | 1,691,306 | ||||||
Coca-Cola Enterprises, Inc. | 96,995 | 4,047,601 | ||||||
ConAgra Foods, Inc. | 111,305 | 3,540,612 | ||||||
Constellation Brands, Inc., Class A * | 18,905 | 1,234,497 | ||||||
Dean Foods Co. * | 66,995 | 1,306,403 | ||||||
Dr Pepper Snapple Group, Inc. | 40,600 | 1,922,410 | ||||||
General Mills, Inc. | 91,410 | 4,608,892 | ||||||
Hillshire Brands Co. | 91,200 | 2,994,096 | ||||||
Hormel Foods Corp. | 23,220 | 1,009,141 | ||||||
Ingredion, Inc. | 12,200 | 802,272 | ||||||
Kellogg Co. | 42,880 | 2,712,160 | ||||||
Kraft Foods Group, Inc. | 50,600 | 2,751,628 | ||||||
Lorillard, Inc. | 72,254 | 3,685,677 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 13,940 | 963,951 | ||||||
Mead Johnson Nutrition Co. | 10,100 | 824,766 | ||||||
Molson Coors Brewing Co., Class B | 22,980 | 1,240,920 | ||||||
Mondelez International, Inc., Class A | 439,592 | 14,787,875 | ||||||
PepsiCo, Inc. | 240,508 | 20,224,318 | ||||||
Philip Morris International, Inc. | 216,020 | 19,251,702 | ||||||
Reynolds American, Inc. | 56,850 | 2,920,385 | ||||||
The Coca-Cola Co. | 401,330 | 15,880,628 | ||||||
The Hershey Co. | 13,150 | 1,305,006 | ||||||
The JM Smucker Co. | 18,025 | 2,004,560 | ||||||
Tyson Foods, Inc., Class A | 138,080 | 3,820,674 | ||||||
152,326,411 | ||||||||
Health Care Equipment & Services 5.8% | ||||||||
Abbott Laboratories | 328,290 | 11,998,999 | ||||||
Aetna, Inc. | 136,032 | 8,529,206 | ||||||
AmerisourceBergen Corp. | 110,340 | 7,208,512 | ||||||
Baxter International, Inc. | 84,660 | 5,576,554 | ||||||
Becton, Dickinson & Co. | 40,455 | 4,253,034 | ||||||
Boston Scientific Corp. * | 300,365 | 3,511,267 | ||||||
C.R. Bard, Inc. | 16,000 | 2,179,520 | ||||||
Cardinal Health, Inc. | 188,020 | 11,029,253 | ||||||
CareFusion Corp. * | 30,710 | 1,190,627 | ||||||
Cigna Corp. | 41,809 | 3,218,457 | ||||||
Community Health Systems, Inc. | 30,250 | 1,319,808 | ||||||
Covidien plc | 58,070 | 3,722,868 | ||||||
DaVita HealthCare Partners, Inc. * | 23,720 | 1,333,301 | ||||||
DENTSPLY International, Inc. | 17,935 | 844,739 | ||||||
Express Scripts Holding Co. * | 68,940 | 4,310,129 | ||||||
HCA Holdings, Inc. | 77,600 | 3,658,064 | ||||||
Health Management Associates, Inc., Class A * | 88,500 | 1,134,570 | ||||||
Health Net, Inc. * | 67,670 | 2,057,168 | ||||||
Henry Schein, Inc. * | 13,930 | 1,566,150 | ||||||
Humana, Inc. | 57,640 | 5,311,526 | ||||||
Laboratory Corp. of America Holdings * | 12,030 | 1,213,827 | ||||||
Lifepoint Hospitals, Inc. * | 15,730 | 812,297 | ||||||
Magellan Health Services, Inc. * | 12,000 | 704,400 | ||||||
McKesson Corp. | 88,500 | 13,836,090 | ||||||
Medtronic, Inc. | 177,665 | 10,197,971 | ||||||
Omnicare, Inc. | 31,910 | 1,759,836 | ||||||
Owens & Minor, Inc. | 32,002 | 1,197,515 | ||||||
Patterson Cos., Inc. | 22,375 | 951,161 | ||||||
Quest Diagnostics, Inc. | 42,755 | 2,561,452 | ||||||
St. Jude Medical, Inc. | 57,560 | 3,303,368 | ||||||
Stryker Corp. | 42,945 | 3,171,918 | ||||||
Tenet Healthcare Corp. * | 21,093 | 995,379 | ||||||
UnitedHealth Group, Inc. | 321,775 | 21,964,361 | ||||||
Universal Health Services, Inc., Class B | 15,450 | 1,244,652 | ||||||
Varian Medical Systems, Inc. * | 12,820 | 930,476 | ||||||
WellCare Health Plans, Inc. * | 13,200 | 880,176 | ||||||
WellPoint, Inc. | 259,170 | 21,977,616 |
See financial notes 3
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Zimmer Holdings, Inc. | 38,840 | 3,397,335 | ||||||
175,053,582 | ||||||||
Household & Personal Products 2.2% | ||||||||
Avon Products, Inc. | 118,425 | 2,072,438 | ||||||
Church & Dwight Co., Inc. | 12,600 | 820,890 | ||||||
Colgate-Palmolive Co. | 111,060 | 7,188,914 | ||||||
Energizer Holdings, Inc. | 9,220 | 904,574 | ||||||
Herbalife Ltd. (b) | 17,400 | 1,127,868 | ||||||
Kimberly-Clark Corp. | 59,720 | 6,449,760 | ||||||
The Clorox Co. | 13,420 | 1,210,350 | ||||||
The Estee Lauder Cos., Inc., Class A | 17,820 | 1,264,507 | ||||||
The Procter & Gamble Co. | 556,495 | 44,936,971 | ||||||
65,976,272 | ||||||||
Insurance 3.6% | ||||||||
ACE Ltd. | 42,500 | 4,056,200 | ||||||
Aflac, Inc. | 71,740 | 4,661,665 | ||||||
Allied World Assurance Co. Holdings AG | 7,600 | 823,004 | ||||||
American Financial Group, Inc. | 19,440 | 1,093,694 | ||||||
American International Group, Inc. | 143,380 | 7,405,577 | ||||||
Aon plc | 34,536 | 2,731,452 | ||||||
Arch Capital Group Ltd. * | 27,275 | 1,580,859 | ||||||
Assurant, Inc. | 39,355 | 2,301,480 | ||||||
Axis Capital Holdings Ltd. | 32,850 | 1,557,747 | ||||||
Cincinnati Financial Corp. | 31,580 | 1,579,000 | ||||||
Endurance Specialty Holdings Ltd. | 18,830 | 1,041,111 | ||||||
Everest Re Group Ltd. | 10,525 | 1,618,114 | ||||||
Fidelity National Financial, Inc., Class A | 54,425 | 1,532,064 | ||||||
Genworth Financial, Inc., Class A * | 171,200 | 2,487,536 | ||||||
Hartford Financial Services Group, Inc. | 160,610 | 5,412,557 | ||||||
HCC Insurance Holdings, Inc. | 17,000 | 776,050 | ||||||
Lincoln National Corp. | 53,280 | 2,419,445 | ||||||
Loews Corp. | 64,282 | 3,105,463 | ||||||
Marsh & McLennan Cos., Inc. | 72,550 | 3,322,790 | ||||||
MetLife, Inc. | 107,605 | 5,090,793 | ||||||
PartnerRe Ltd. | 16,930 | 1,696,555 | ||||||
Platinum Underwriters Holdings Ltd. | 15,400 | 957,726 | ||||||
Principal Financial Group, Inc. | 41,185 | 1,954,640 | ||||||
Prudential Financial, Inc. | 87,440 | 7,116,742 | ||||||
Reinsurance Group of America, Inc. | 12,000 | 854,160 | ||||||
RenaissanceRe Holdings Ltd. | 13,125 | 1,229,944 | ||||||
The Allstate Corp. | 132,455 | 7,028,062 | ||||||
The Chubb Corp. | 76,475 | 7,041,818 | ||||||
The Progressive Corp. | 171,745 | 4,460,218 | ||||||
The Travelers Cos., Inc. | 173,595 | 14,981,248 | ||||||
Torchmark Corp. | 18,610 | 1,355,925 | ||||||
Unum Group | 61,225 | 1,943,281 | ||||||
W. R. Berkley Corp. | 27,660 | 1,214,551 | ||||||
White Mountains Insurance Group Ltd. | 1,229 | 717,822 | ||||||
XL Group plc | 49,685 | 1,518,870 | ||||||
108,668,163 | ||||||||
Materials 3.7% | ||||||||
Air Products & Chemicals, Inc. | 37,175 | 4,052,447 | ||||||
Airgas, Inc. | 9,000 | 981,630 | ||||||
Albemarle Corp. | 12,400 | 820,756 | ||||||
Alcoa, Inc. | 617,705 | 5,726,125 | ||||||
Allegheny Technologies, Inc. | 38,311 | 1,268,094 | ||||||
AptarGroup, Inc. | 13,100 | 840,496 | ||||||
Ashland, Inc. | 16,535 | 1,530,314 | ||||||
Avery Dennison Corp. | 29,850 | 1,406,532 | ||||||
Ball Corp. | 34,780 | 1,700,394 | ||||||
Bemis Co., Inc. | 26,555 | 1,059,544 | ||||||
Celanese Corp., Series A | 23,100 | 1,293,831 | ||||||
CF Industries Holdings, Inc. | 6,471 | 1,395,148 | ||||||
Cliffs Natural Resources, Inc. (b) | 54,400 | 1,396,992 | ||||||
Commercial Metals Co. | 72,645 | 1,333,762 | ||||||
Cytec Industries, Inc. | 8,700 | 722,883 | ||||||
Domtar Corp. | 18,591 | 1,574,844 | ||||||
E.I. du Pont de Nemours & Co. | 130,145 | 7,964,874 | ||||||
Eastman Chemical Co. | 23,020 | 1,813,746 | ||||||
Ecolab, Inc. | 18,791 | 1,991,846 | ||||||
FMC Corp. | 12,680 | 922,597 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 247,470 | 9,096,997 | ||||||
Huntsman Corp. | 50,915 | 1,182,246 | ||||||
International Flavors & Fragrances, Inc. | 10,035 | 829,393 | ||||||
International Paper Co. | 98,595 | 4,398,323 | ||||||
LyondellBasell Industries N.V., Class A | 47,900 | 3,573,340 | ||||||
Martin Marietta Materials, Inc. | 6,210 | 609,139 | ||||||
MeadWestvaco Corp. | 43,540 | 1,517,369 | ||||||
Monsanto Co. | 45,995 | 4,823,956 | ||||||
Newmont Mining Corp. | 96,910 | 2,641,767 | ||||||
Nucor Corp. | 103,580 | 5,362,337 | ||||||
Owens-Illinois, Inc. * | 46,645 | 1,482,845 | ||||||
Packaging Corp. of America | 15,545 | 968,143 | ||||||
PPG Industries, Inc. | 19,500 | 3,560,310 | ||||||
Praxair, Inc. | 38,970 | 4,859,949 | ||||||
Reliance Steel & Aluminum Co. | 24,320 | 1,782,413 | ||||||
RPM International, Inc. | 22,565 | 873,717 | ||||||
Sealed Air Corp. | 47,775 | 1,441,849 | ||||||
Sigma-Aldrich Corp. | 15,030 | 1,299,043 | ||||||
Sonoco Products Co. | 28,955 | 1,176,731 | ||||||
Southern Copper Corp. | 29,422 | 822,345 | ||||||
Steel Dynamics, Inc. | 77,150 | 1,386,385 | ||||||
The Dow Chemical Co. | 261,100 | 10,305,617 | ||||||
The Mosaic Co. | 51,210 | 2,347,978 | ||||||
The Sherwin-Williams Co. | 9,245 | 1,738,060 | ||||||
The Valspar Corp. | 11,650 | 815,150 | ||||||
United States Steel Corp. (b) | 99,895 | 2,486,386 | ||||||
Vulcan Materials Co. | 20,623 | 1,104,362 | ||||||
112,283,005 | ||||||||
Media 4.1% | ||||||||
Cablevision Systems Corp., Class A | 85,565 | 1,330,536 |
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 | 111,190 | 6,575,777 | ||||||
Charter Communications, Inc., Class A * | 10,300 | 1,382,672 | ||||||
Comcast Corp., Class A | 325,640 | 15,493,951 | ||||||
DIRECTV * | 155,040 | 9,688,449 | ||||||
Discovery Communications, Inc., Class A * | 18,967 | 1,686,546 | ||||||
DISH Network Corp., Class A | 27,970 | 1,348,154 | ||||||
Gannett Co., Inc. | 88,030 | 2,435,790 | ||||||
Liberty Global plc, Class A * | 79,748 | 6,249,851 | ||||||
Omnicom Group, Inc. | 57,304 | 3,902,975 | ||||||
Starz, Class A * | 27,000 | 814,050 | ||||||
The Interpublic Group of Cos., Inc. | 56,405 | 947,604 | ||||||
The Walt Disney Co. | 296,150 | 20,312,928 | ||||||
The Washington Post Co., Class B | 1,880 | 1,209,442 | ||||||
Thomson Reuters Corp. | 73,300 | 2,753,881 | ||||||
Time Warner Cable, Inc. | 58,609 | 7,041,871 | ||||||
Time Warner, Inc. | 334,588 | 22,999,579 | ||||||
Twenty-First Century Fox, Inc. | 256,420 | 8,738,794 | ||||||
Viacom Inc., Class B | 90,400 | 7,529,416 | ||||||
122,442,266 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.5% | ||||||||
AbbVie, Inc. | 74,300 | 3,599,835 | ||||||
Actavis plc * | 17,773 | 2,747,350 | ||||||
Agilent Technologies, Inc. | 65,005 | 3,299,654 | ||||||
Allergan, Inc. | 16,430 | 1,488,722 | ||||||
Amgen, Inc. | 127,755 | 14,819,580 | ||||||
Biogen Idec, Inc. * | 12,750 | 3,113,423 | ||||||
Bristol-Myers Squibb Co. | 244,850 | 12,859,522 | ||||||
Celgene Corp. * | 10,700 | 1,588,843 | ||||||
Eli Lilly & Co. | 174,655 | 8,701,312 | ||||||
Forest Laboratories, Inc. * | 54,555 | 2,565,722 | ||||||
Gilead Sciences, Inc. * | 109,220 | 7,753,528 | ||||||
Hospira, Inc. * | 26,550 | 1,075,806 | ||||||
Johnson & Johnson | 432,095 | 40,016,318 | ||||||
Life Technologies Corp. * | 16,019 | 1,206,391 | ||||||
Merck & Co., Inc. | 387,857 | 17,488,472 | ||||||
Mettler-Toledo International, Inc. * | 3,200 | 791,872 | ||||||
Mylan, Inc. * | 29,975 | 1,135,153 | ||||||
Pfizer, Inc. | 1,253,499 | 38,457,349 | ||||||
Thermo Fisher Scientific, Inc. | 36,545 | 3,573,370 | ||||||
Waters Corp. * | 8,100 | 817,452 | ||||||
167,099,674 | ||||||||
Real Estate 0.9% | ||||||||
American Tower Corp. | 15,365 | 1,219,213 | ||||||
Annaly Capital Management, Inc. | 184,585 | 2,176,257 | ||||||
Apartment Investment & Management Co., Class A | 32,154 | 899,669 | ||||||
AvalonBay Communities, Inc. | 5,499 | 687,650 | ||||||
Boston Properties, Inc. | 12,790 | 1,323,765 | ||||||
Equity Residential | 29,745 | 1,557,448 | ||||||
HCP, Inc. | 24,565 | 1,019,447 | ||||||
Health Care REIT, Inc. | 8,300 | 538,255 | ||||||
Hospitality Properties Trust | 30,755 | 903,582 | ||||||
Host Hotels & Resorts, Inc. | 87,378 | 1,620,862 | ||||||
Kimco Realty Corp. | 41,860 | 899,153 | ||||||
Plum Creek Timber Co., Inc. | 24,495 | 1,112,073 | ||||||
Prologis, Inc. | 16,800 | 671,160 | ||||||
Public Storage | 8,730 | 1,457,648 | ||||||
Rayonier, Inc. | 11,702 | 550,228 | ||||||
Simon Property Group, Inc. | 15,576 | 2,407,271 | ||||||
Ventas, Inc. | 12,478 | 814,065 | ||||||
Vornado Realty Trust REIT | 19,128 | 1,703,539 | ||||||
Weyerhaeuser Co. | 203,557 | 6,188,133 | ||||||
27,749,418 | ||||||||
Retailing 4.8% | ||||||||
Aaron’s, Inc. | 26,300 | 746,131 | ||||||
Abercrombie & Fitch Co., Class A | 26,310 | 986,099 | ||||||
Advance Auto Parts, Inc. | 15,345 | 1,521,917 | ||||||
Amazon.com, Inc. * | 9,150 | 3,330,874 | ||||||
American Eagle Outfitters, Inc. | 71,235 | 1,103,430 | ||||||
AutoNation, Inc. * | 12,900 | 622,167 | ||||||
AutoZone, Inc. * | 2,323 | 1,009,785 | ||||||
Bed Bath & Beyond, Inc. * | 43,365 | 3,352,982 | ||||||
Best Buy Co., Inc. | 298,900 | 12,792,920 | ||||||
Big Lots, Inc. * | 39,865 | 1,449,491 | ||||||
CarMax, Inc. * | 25,480 | 1,197,305 | ||||||
Core-Mark Holding Co., Inc. | 15,300 | 1,082,169 | ||||||
Dick’s Sporting Goods, Inc. | 11,900 | 633,199 | ||||||
Dillard’s, Inc., Class A | 9,975 | 817,751 | ||||||
Dollar General Corp. * | 31,800 | 1,837,404 | ||||||
Dollar Tree, Inc. * | 36,134 | 2,110,226 | ||||||
Expedia, Inc. | 20,765 | 1,222,643 | ||||||
Family Dollar Stores, Inc. | 18,675 | 1,286,334 | ||||||
Foot Locker, Inc. | 41,395 | 1,436,407 | ||||||
GameStop Corp., Class A (b) | 56,690 | 3,107,746 | ||||||
Genuine Parts Co. | 37,400 | 2,948,242 | ||||||
J.C. Penney Co., Inc. (b)* | 166,600 | 1,249,500 | ||||||
Kohl’s Corp. | 109,095 | 6,196,596 | ||||||
L Brands, Inc. | 38,220 | 2,392,954 | ||||||
Liberty Interactive Corp., Class A * | 123,320 | 3,324,707 | ||||||
Lowe’s Cos., Inc. | 340,555 | 16,952,828 | ||||||
Macy’s, Inc. | 97,420 | 4,492,036 | ||||||
Nordstrom, Inc. | 35,755 | 2,162,105 | ||||||
O’Reilly Automotive, Inc. * | 10,730 | 1,328,481 | ||||||
PetSmart, Inc. | 21,340 | 1,552,698 | ||||||
Priceline.com, Inc. * | 988 | 1,041,184 | ||||||
RadioShack Corp. (b)* | 214,280 | 602,127 | ||||||
Rent-A-Center, Inc. | 24,670 | 844,701 | ||||||
Ross Stores, Inc. | 23,590 | 1,824,687 | ||||||
Sears Holdings Corp. (b)* | 50,321 | 2,922,644 | ||||||
Signet Jewelers Ltd. | 14,500 | 1,082,570 | ||||||
Staples, Inc. | 376,850 | 6,074,822 | ||||||
Target Corp. | 219,495 | 14,221,081 | ||||||
The Gap, Inc. | 99,575 | 3,683,279 | ||||||
The Home Depot, Inc. | 232,296 | 18,093,535 | ||||||
The TJX Cos., Inc. | 108,460 | 6,593,283 | ||||||
Tiffany & Co. | 18,035 | 1,427,831 | ||||||
Tractor Supply Co. | 14,400 | 1,027,440 | ||||||
Williams-Sonoma, Inc. | 17,845 | 935,792 | ||||||
144,622,103 |
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 2.3% | ||||||||
Altera Corp. | 29,850 | 1,002,960 | ||||||
Analog Devices, Inc. | 49,965 | 2,463,275 | ||||||
Applied Materials, Inc. | 342,525 | 6,114,071 | ||||||
Broadcom Corp., Class A | 62,945 | 1,681,890 | ||||||
Intel Corp. | 1,295,910 | 31,659,081 | ||||||
KLA-Tencor Corp. | 27,780 | 1,822,368 | ||||||
Lam Research Corp. * | 25,700 | 1,393,711 | ||||||
Linear Technology Corp. | 26,255 | 1,080,131 | ||||||
LSI Corp. | 131,440 | 1,114,611 | ||||||
Marvell Technology Group Ltd. | 91,830 | 1,101,960 | ||||||
Maxim Integrated Products, Inc. | 45,000 | 1,336,500 | ||||||
Microchip Technology, Inc. | 28,480 | 1,223,501 | ||||||
Micron Technology, Inc. * | 208,675 | 3,689,374 | ||||||
NVIDIA Corp. | 79,637 | 1,208,890 | ||||||
Texas Instruments, Inc. | 282,370 | 11,882,130 | ||||||
Xilinx, Inc. | 39,620 | 1,799,540 | ||||||
70,573,993 | ||||||||
Software & Services 5.8% | ||||||||
Accenture plc, Class A | 61,295 | 4,505,182 | ||||||
Adobe Systems, Inc. * | 46,940 | 2,544,148 | ||||||
Alliance Data Systems Corp. * | 5,880 | 1,393,913 | ||||||
Amdocs Ltd. | 33,200 | 1,276,540 | ||||||
AOL, Inc. * | 47,080 | 1,706,179 | ||||||
Autodesk, Inc. * | 22,800 | 909,948 | ||||||
Automatic Data Processing, Inc. | 64,980 | 4,871,551 | ||||||
Broadridge Financial Solutions, Inc. | 24,700 | 868,452 | ||||||
CA, Inc. | 51,805 | 1,645,327 | ||||||
Citrix Systems, Inc. * | 9,100 | 516,698 | ||||||
Cognizant Technology Solutions Corp., Class A * | 15,400 | 1,338,722 | ||||||
Computer Sciences Corp. | 70,145 | 3,455,343 | ||||||
CoreLogic, Inc. * | 77,000 | 2,561,790 | ||||||
DST Systems, Inc. | 11,400 | 966,378 | ||||||
eBay, Inc. * | 84,575 | 4,457,948 | ||||||
Fidelity National Information Services, Inc. | 50,823 | 2,477,621 | ||||||
Fiserv, Inc. * | 20,150 | 2,110,309 | ||||||
Google, Inc., Class A * | 10,370 | 10,687,115 | ||||||
IAC/InterActiveCorp | 26,262 | 1,402,128 | ||||||
International Business Machines Corp. | 190,495 | 34,138,609 | ||||||
Intuit, Inc. | 28,855 | 2,060,536 | ||||||
Leidos Holdings, Inc. | 29,900 | 1,407,991 | ||||||
MasterCard, Inc., Class A | 4,412 | 3,163,845 | ||||||
Microsoft Corp. | 1,635,015 | 57,797,780 | ||||||
Oracle Corp. | 339,660 | 11,378,610 | ||||||
Paychex, Inc. | 44,760 | 1,891,558 | ||||||
Symantec Corp. | 147,545 | 3,355,173 | ||||||
Teradata Corp. * | 11,100 | 489,177 | ||||||
The Western Union Co. | 129,210 | 2,199,154 | ||||||
Total System Services, Inc. | 34,270 | 1,022,274 | ||||||
Visa, Inc., Class A | 14,300 | 2,812,381 | ||||||
Yahoo! Inc. * | 92,905 | 3,059,362 | ||||||
174,471,742 | ||||||||
Technology Hardware & Equipment 4.3% | ||||||||
Amphenol Corp., Class A | 15,500 | 1,244,495 | ||||||
Anixter International, Inc. * | 10,520 | 899,355 | ||||||
Apple, Inc. | 35,047 | 18,306,800 | ||||||
Arrow Electronics, Inc. * | 50,895 | 2,443,978 | ||||||
Avnet, Inc. | 65,480 | 2,599,556 | ||||||
Cisco Systems, Inc. | 879,565 | 19,790,213 | ||||||
Corning, Inc. | 229,260 | 3,918,053 | ||||||
EMC Corp. | 203,110 | 4,888,858 | ||||||
Harris Corp. | 31,625 | 1,959,485 | ||||||
Hewlett-Packard Co. | 1,600,175 | 38,996,265 | ||||||
Ingram Micro, Inc., Class A * | 178,455 | 4,134,802 | ||||||
Jabil Circuit, Inc. | 64,095 | 1,337,022 | ||||||
Juniper Networks, Inc. * | 100,770 | 1,878,353 | ||||||
Lexmark International, Inc., Class A | 31,845 | 1,132,090 | ||||||
Molex, Inc. | 27,530 | 1,062,658 | ||||||
Motorola Solutions, Inc. | 84,145 | 5,260,745 | ||||||
NetApp, Inc. | 28,030 | 1,087,844 | ||||||
QUALCOMM, Inc. | 108,585 | 7,543,400 | ||||||
SanDisk Corp. | 20,665 | 1,436,218 | ||||||
Tech Data Corp. * | 50,340 | 2,620,700 | ||||||
Vishay Intertechnology, Inc. * | 57,840 | 709,697 | ||||||
Western Digital Corp. | 37,000 | 2,576,310 | ||||||
Xerox Corp. | 396,126 | 3,937,492 | ||||||
129,764,389 | ||||||||
Telecommunication Services 3.8% | ||||||||
AT&T, Inc. | 1,685,685 | 61,021,797 | ||||||
CenturyLink, Inc. | 97,055 | 3,286,282 | ||||||
Crown Castle International Corp. * | 14,280 | 1,085,566 | ||||||
Frontier Communications Corp. (b) | 453,198 | 1,998,603 | ||||||
NII Holdings, Inc. (b)* | 213,070 | 732,961 | ||||||
Sprint Corp. * | 476,157 | 3,204,537 | ||||||
Telephone & Data Systems, Inc. | 58,327 | 1,818,636 | ||||||
Verizon Communications, Inc. | 790,530 | 39,929,670 | ||||||
Windstream Holdings, Inc. (b) | 249,400 | 2,132,370 | ||||||
115,210,422 | ||||||||
Transportation 1.6% | ||||||||
Avis Budget Group, Inc. * | 54,390 | 1,704,039 | ||||||
C.H. Robinson Worldwide, Inc. | 36,780 | 2,197,237 | ||||||
CSX Corp. | 241,510 | 6,293,751 | ||||||
Expeditors International of Washington, Inc. | 37,525 | 1,699,507 | ||||||
FedEx Corp. | 84,462 | 11,064,522 | ||||||
Hertz Global Holdings, Inc. * | 70,700 | 1,623,272 | ||||||
J.B. Hunt Transport Services, Inc. | 11,445 | 858,718 | ||||||
Norfolk Southern Corp. | 55,750 | 4,795,615 | ||||||
Ryder System, Inc. | 25,320 | 1,666,816 | ||||||
Union Pacific Corp. | 53,956 | 8,168,938 | ||||||
United Parcel Service, Inc., Class B | 94,560 | 9,289,574 | ||||||
49,361,989 | ||||||||
Utilities 4.1% | ||||||||
AGL Resources, Inc. | 18,514 | 886,080 |
6 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Alliant Energy Corp. | 24,475 | 1,278,085 | ||||||
Ameren Corp. | 86,690 | 3,136,444 | ||||||
American Electric Power Co., Inc. | 112,145 | 5,252,872 | ||||||
American Water Works Co., Inc. | 22,200 | 951,714 | ||||||
Atmos Energy Corp. | 26,060 | 1,153,676 | ||||||
Calpine Corp. * | 65,250 | 1,316,092 | ||||||
CenterPoint Energy, Inc. | 95,770 | 2,355,942 | ||||||
CMS Energy Corp. | 51,310 | 1,408,973 | ||||||
Consolidated Edison, Inc. | 69,025 | 4,018,635 | ||||||
Dominion Resources, Inc. | 139,610 | 8,900,137 | ||||||
DTE Energy Co. | 43,365 | 2,998,256 | ||||||
Duke Energy Corp. | 96,748 | 6,939,734 | ||||||
Edison International | 80,590 | 3,951,328 | ||||||
Entergy Corp. | 79,017 | 5,113,980 | ||||||
Exelon Corp. | 274,937 | 7,846,702 | ||||||
FirstEnergy Corp. | 136,134 | 5,155,395 | ||||||
Great Plains Energy, Inc. | 36,570 | 857,201 | ||||||
Integrys Energy Group, Inc. | 24,435 | 1,433,846 | ||||||
MDU Resources Group, Inc. | 49,680 | 1,479,470 | ||||||
National Fuel Gas Co. | 12,745 | 911,905 | ||||||
NextEra Energy, Inc. | 71,380 | 6,049,455 | ||||||
NiSource, Inc. | 66,635 | 2,100,335 | ||||||
Northeast Utilities | 34,915 | 1,497,504 | ||||||
NRG Energy, Inc. | 91,526 | 2,611,237 | ||||||
NV Energy, Inc. | 42,100 | 999,454 | ||||||
OGE Energy Corp. | 31,130 | 1,148,697 | ||||||
ONEOK, Inc. | 37,220 | 2,102,930 | ||||||
Pepco Holdings, Inc. | 87,965 | 1,695,965 | ||||||
PG&E Corp. | 109,715 | 4,591,573 | ||||||
Pinnacle West Capital Corp. | 24,885 | 1,394,307 | ||||||
PPL Corp. | 107,155 | 3,282,158 | ||||||
Public Service Enterprise Group, Inc. | 142,180 | 4,763,030 | ||||||
Questar Corp. | 42,750 | 1,011,465 | ||||||
SCANA Corp. | 28,585 | 1,332,919 | ||||||
Sempra Energy | 42,915 | 3,911,273 | ||||||
TECO Energy, Inc. | 63,325 | 1,087,290 | ||||||
The AES Corp. | 230,940 | 3,253,945 | ||||||
The Southern Co. | 164,270 | 6,720,286 | ||||||
UGI Corp. | 27,620 | 1,142,639 | ||||||
Vectren Corp. | 20,000 | 698,400 | ||||||
Westar Energy, Inc. | 23,870 | 754,531 | ||||||
Wisconsin Energy Corp. | 30,740 | 1,294,461 | ||||||
Xcel Energy, Inc. | 112,090 | 3,234,917 | ||||||
124,025,238 | ||||||||
Total Common Stock | ||||||||
(Cost $2,186,526,479) | 2,982,439,540 | |||||||
Other Investment Company 1.0% of net assets | ||||||||
Money Market Fund 1.0% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (e) | 29,664,810 | 29,664,810 | ||||||
Total Other Investment Company | ||||||||
(Cost $29,664,810) | 29,664,810 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.1% of net assets | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/19/13 (c)(d) | 2,100,000 | 2,099,986 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,099,986) | 2,099,986 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.6% of net assets | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (e) | 19,475,816 | 19,475,816 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $19,475,816) | 19,475,816 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13 tax basis cost of the fund’s investments was $2,234,297,819 and the unrealized appreciation and depreciation were $793,590,567 and ($13,684,050), respectively, with a net unrealized appreciation of $779,906,517.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is on loan. Securities on loan were valued at $20,152,619. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/20/13 | 390 | 34,144,500 | 476,776 |
See financial notes 7
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .8% | Common Stock | 612,399,768 | 839,594,596 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .9% | Other Investment Company | 7,423,228 | 7,423,228 | ||||||||
0 | .1% | Short-Term Investment | 714,995 | 714,995 | ||||||||
99 | .8% | Total Investments | 620,537,991 | 847,732,819 | ||||||||
2 | .3% | Collateral Invested for Securities on Loan | 19,735,329 | 19,735,329 | ||||||||
(2 | .1%) | Other Assets and Liabilities, Net | (18,055,727 | ) | ||||||||
100 | .0% | Net Assets | 849,412,421 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.8% of net assets | ||||||||
Automobiles & Components 1.0% | ||||||||
Cooper Tire & Rubber Co. | 35,700 | 928,557 | ||||||
Dana Holding Corp. | 89,100 | 1,746,360 | ||||||
Drew Industries, Inc. | 10,895 | 547,583 | ||||||
Gentex Corp. | 53,600 | 1,577,984 | ||||||
Superior Industries International, Inc. | 24,160 | 453,000 | ||||||
Tenneco, Inc. * | 17,600 | 934,032 | ||||||
Thor Industries, Inc. | 37,600 | 2,181,176 | ||||||
8,368,692 | ||||||||
Banks 4.7% | ||||||||
Associated Banc-Corp. | 93,200 | 1,515,432 | ||||||
Astoria Financial Corp. | 79,200 | 1,046,232 | ||||||
BancorpSouth, Inc. | 51,200 | 1,131,520 | ||||||
Bank of Hawaii Corp. | 24,600 | 1,426,308 | ||||||
BankUnited, Inc. | 8,500 | 261,545 | ||||||
BOK Financial Corp. | 7,900 | 483,717 | ||||||
CapitalSource, Inc. | 161,700 | 2,115,036 | ||||||
Capitol Federal Financial, Inc. | 41,086 | 520,560 | ||||||
Cathay General Bancorp | 23,000 | 566,490 | ||||||
City Holding Co. | 8,190 | 372,645 | ||||||
City National Corp. | 15,200 | 1,096,072 | ||||||
Commerce Bancshares, Inc. | 26,385 | 1,213,974 | ||||||
Community Bank System, Inc. | 5,500 | 199,705 | ||||||
Cullen/Frost Bankers, Inc. | 16,700 | 1,182,193 | ||||||
CVB Financial Corp. | 29,180 | 424,277 | ||||||
East West Bancorp, Inc. | 30,300 | 1,020,807 | ||||||
F.N.B. Corp. | 52,400 | 655,524 | ||||||
First Financial Bancorp | 12,300 | 190,896 | ||||||
First Horizon National Corp. | 124,900 | 1,330,185 | ||||||
First Midwest Bancorp, Inc. | 31,895 | 530,414 | ||||||
First Niagara Financial Group, Inc. | 103,000 | 1,136,090 | ||||||
First Republic Bank | 16,600 | 847,762 | ||||||
Firstmerit Corp. | 67,901 | 1,525,056 | ||||||
Fulton Financial Corp. | �� | 82,600 | 1,008,546 | |||||
Glacier Bancorp, Inc. | 23,580 | 651,515 | ||||||
Hancock Holding Co. | 15,100 | 494,978 | ||||||
International Bancshares Corp. | 26,700 | 610,095 | ||||||
MB Financial, Inc. | 18,445 | 547,816 | ||||||
NBT Bancorp, Inc. | 17,455 | 425,378 | ||||||
Northwest Bancshares, Inc. | 36,292 | 507,725 | ||||||
Old National Bancorp | 35,125 | 510,718 | ||||||
People’s United Financial, Inc. | 118,100 | 1,704,183 | ||||||
Prosperity Bancshares, Inc. | 9,200 | 574,540 | ||||||
Provident Financial Services, Inc. | 31,390 | 588,249 | ||||||
Signature Bank * | 2,200 | 224,004 | ||||||
Susquehanna Bancshares, Inc. | 52,400 | 617,534 | ||||||
SVB Financial Group * | 7,000 | 670,460 | ||||||
Synovus Financial Corp. | 594,900 | 1,933,425 | ||||||
TCF Financial Corp. | 93,800 | 1,423,884 | ||||||
Trustmark Corp. | 29,700 | 806,652 | ||||||
UMB Financial Corp. | 9,701 | 571,583 | ||||||
Umpqua Holdings Corp. | 35,500 | 581,135 | ||||||
United Bankshares, Inc. (a) | 20,895 | 618,074 | ||||||
Valley National Bancorp (a) | 106,300 | 1,036,425 | ||||||
Washington Federal, Inc. | 44,900 | 1,022,822 | ||||||
Webster Financial Corp. | 29,800 | 831,122 | ||||||
Westamerica Bancorp | 11,770 | 605,920 | ||||||
Wintrust Financial Corp. | 8,840 | 384,628 | ||||||
39,743,851 | ||||||||
Capital Goods 10.7% | ||||||||
A.O. Smith Corp. | 22,100 | 1,141,465 | ||||||
AAR Corp. | 38,780 | 1,135,478 | ||||||
Actuant Corp., Class A | 25,000 | 939,000 | ||||||
Acuity Brands, Inc. | 18,100 | 1,819,231 | ||||||
Aegion Corp. * | 17,415 | 357,008 | ||||||
Aircastle Ltd. | 51,700 | 975,579 | ||||||
Albany International Corp., Class A | 18,300 | 673,623 | ||||||
Apogee Enterprises, Inc. | 17,995 | 562,884 | ||||||
Applied Industrial Technologies, Inc. | 28,720 | 1,358,743 | ||||||
Armstrong World Industries, Inc. * | 19,000 | 1,015,170 | ||||||
Astec Industries, Inc. | 15,350 | 518,983 | ||||||
B/E Aerospace, Inc. * | 19,500 | 1,582,620 | ||||||
Barnes Group, Inc. | 29,165 | 1,036,524 | ||||||
Beacon Roofing Supply, Inc. * | 20,280 | 703,919 | ||||||
Brady Corp., Class A | 30,600 | 893,214 | ||||||
Briggs & Stratton Corp. | 49,700 | 911,498 | ||||||
Carlisle Cos., Inc. | 27,200 | 1,976,896 | ||||||
Chart Industries, Inc. * | 4,810 | 516,931 | ||||||
Chicago Bridge & Iron Co., N.V. | 29,698 | 2,200,325 | ||||||
CIRCOR International, Inc. | 9,090 | 670,569 | ||||||
CLARCOR, Inc. | 18,625 | 1,089,190 | ||||||
Crane Co. | 21,600 | 1,371,600 | ||||||
Cubic Corp. | 8,190 | 429,975 | ||||||
Curtiss-Wright Corp. | 29,100 | 1,448,598 | ||||||
DigitalGlobe, Inc. * | 5,700 | 181,374 | ||||||
Donaldson Co., Inc. | 45,000 | 1,782,450 | ||||||
Dycom Industries, Inc. * | 35,270 | 1,045,755 | ||||||
Encore Wire Corp. | 18,440 | 913,333 |
8 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
EnerSys, Inc. | 22,600 | 1,499,510 | ||||||
EnPro Industries, Inc. * | 7,770 | 463,636 | ||||||
ESCO Technologies, Inc. | 11,800 | 425,744 | ||||||
Esterline Technologies Corp. * | 12,000 | 961,920 | ||||||
Fortune Brands Home & Security, Inc. | 22,600 | 973,608 | ||||||
Franklin Electric Co., Inc. | 13,960 | 528,386 | ||||||
GATX Corp. | 36,600 | 1,886,730 | ||||||
Generac Holdings, Inc. | 6,700 | 330,645 | ||||||
Gibraltar Industries, Inc. * | 32,755 | 524,408 | ||||||
Graco, Inc. | 18,740 | 1,447,852 | ||||||
GrafTech International Ltd. (a)* | 89,400 | 795,660 | ||||||
Granite Construction, Inc. | 44,200 | 1,429,870 | ||||||
H&E Equipment Services, Inc. * | 22,820 | 571,185 | ||||||
HEICO Corp. | 11,013 | 590,050 | ||||||
Hexcel Corp. * | 22,285 | 942,878 | ||||||
Huntington Ingalls Industries, Inc. | 34,600 | 2,475,630 | ||||||
IDEX Corp. | 24,300 | 1,680,345 | ||||||
Kaman Corp. | 15,380 | 571,828 | ||||||
Kennametal, Inc. | 37,900 | 1,743,400 | ||||||
Layne Christensen Co. * | 25,200 | 487,368 | ||||||
Lincoln Electric Holdings, Inc. | 30,400 | 2,104,896 | ||||||
MasTec, Inc. * | 18,510 | 591,765 | ||||||
Meritor, Inc. * | 86,100 | 591,507 | ||||||
Moog, Inc., Class A * | 19,600 | 1,170,708 | ||||||
MRC Global, Inc. * | 34,900 | 975,455 | ||||||
MSC Industrial Direct Co., Inc., Class A | 15,300 | 1,168,461 | ||||||
Mueller Industries, Inc. | 22,200 | 1,338,438 | ||||||
Mueller Water Products, Inc., Class A | 100,400 | 860,428 | ||||||
National Presto Industries, Inc. (a) | 5,245 | 370,035 | ||||||
Navistar International Corp. * | 43,800 | 1,583,808 | ||||||
Nordson Corp. | 13,350 | 962,401 | ||||||
Orbital Sciences Corp. * | 40,055 | 924,069 | ||||||
Polypore International, Inc. (a)* | 9,500 | 429,400 | ||||||
Quanex Building Products Corp. | 32,150 | 571,627 | ||||||
Raven Industries, Inc. | 10,830 | 361,289 | ||||||
Regal-Beloit Corp. | 18,700 | 1,371,271 | ||||||
Rush Enterprises, Inc., Class A * | 22,360 | 639,943 | ||||||
Simpson Manufacturing Co., Inc. | 19,285 | 683,653 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 74,900 | 1,999,081 | ||||||
TAL International Group, Inc. (a)* | 12,990 | 627,547 | ||||||
Teledyne Technologies, Inc. * | 13,200 | 1,172,424 | ||||||
Tennant Co. | 8,480 | 514,651 | ||||||
The Babcock & Wilcox Co. | 35,300 | 1,137,013 | ||||||
The Greenbrier Cos., Inc. * | 15,120 | 401,285 | ||||||
The Manitowoc Co., Inc. | 61,900 | 1,204,574 | ||||||
The Middleby Corp. * | 2,708 | 616,476 | ||||||
The Toro Co. | 30,120 | 1,775,273 | ||||||
Titan International, Inc. | 18,375 | 266,438 | ||||||
TransDigm Group, Inc. | 10,600 | 1,541,346 | ||||||
TriMas Corp. * | 5,100 | 193,086 | ||||||
Trinity Industries, Inc. | 44,100 | 2,232,783 | ||||||
Triumph Group, Inc. | 13,600 | 974,440 | ||||||
Tutor Perini Corp. * | 78,800 | 1,808,460 | ||||||
Universal Forest Products, Inc. | 31,870 | 1,686,560 | ||||||
Valmont Industries, Inc. | 7,150 | 1,004,575 | ||||||
WABCO Holdings, Inc. * | 17,100 | 1,465,128 | ||||||
Wabtec Corp. | 18,120 | 1,181,243 | ||||||
Watsco, Inc. | 13,545 | 1,290,703 | ||||||
Watts Water Technologies, Inc., Class A | 15,455 | 892,990 | ||||||
Woodward, Inc. | 24,000 | 962,160 | ||||||
91,229,978 | ||||||||
Commercial & Professional Supplies 4.3% | ||||||||
ABM Industries, Inc. | 61,300 | 1,686,363 | ||||||
Clean Harbors, Inc. * | 12,530 | 773,727 | ||||||
Consolidated Graphics, Inc. * | 12,920 | 828,043 | ||||||
Copart, Inc. * | 39,700 | 1,279,531 | ||||||
Covanta Holding Corp. | 53,800 | 923,746 | ||||||
Deluxe Corp. | 28,100 | 1,323,229 | ||||||
FTI Consulting, Inc. * | 26,300 | 1,067,254 | ||||||
G&K Services, Inc., Class A | 15,490 | 966,576 | ||||||
Healthcare Services Group, Inc. | 24,155 | 661,605 | ||||||
Herman Miller, Inc. | 39,210 | 1,189,631 | ||||||
HNI Corp. | 37,600 | 1,460,760 | ||||||
Huron Consulting Group, Inc. * | 8,400 | 491,988 | ||||||
ICF International, Inc. * | 14,500 | 501,990 | ||||||
IHS, Inc., Class A * | 6,410 | 699,011 | ||||||
Insperity, Inc. | 17,660 | 682,912 | ||||||
Interface, Inc. | 24,985 | 505,946 | ||||||
KAR Auction Services, Inc. | 10,700 | 318,004 | ||||||
Kelly Services, Inc., Class A | 73,100 | 1,524,866 | ||||||
Kforce, Inc. | 29,400 | 578,886 | ||||||
Knoll, Inc. | 31,500 | 517,230 | ||||||
Korn/Ferry International * | 27,130 | 645,694 | ||||||
McGrath RentCorp | 12,925 | 461,035 | ||||||
Mine Safety Appliances Co. | 11,825 | 569,492 | ||||||
Navigant Consulting, Inc. * | 46,725 | 810,679 | ||||||
Nielsen Holdings N.V. | 40,100 | 1,581,544 | ||||||
Quad Graphics, Inc. | 35,400 | 1,236,168 | ||||||
Resources Connection, Inc. | 51,960 | 663,010 | ||||||
Rollins, Inc. | 15,122 | 417,972 | ||||||
Steelcase, Inc., Class A | 87,000 | 1,425,930 | ||||||
Stericycle, Inc. * | 12,000 | 1,394,400 | ||||||
Tetra Tech, Inc. * | 26,995 | 705,379 | ||||||
The Brink’s Co. | 53,900 | 1,692,460 | ||||||
The Corporate Executive Board Co. | 15,370 | 1,120,473 | ||||||
Towers Watson & Co., Class A | 13,915 | 1,597,581 | ||||||
TrueBlue, Inc. * | 41,730 | 1,030,731 | ||||||
UniFirst Corp. | 6,205 | 637,998 | ||||||
Verisk Analytics, Inc., Class A * | 18,200 | 1,247,064 | ||||||
Viad Corp. | 20,965 | 559,766 | ||||||
Waste Connections, Inc. | 26,400 | 1,128,336 | ||||||
36,907,010 | ||||||||
Consumer Durables & Apparel 3.9% | ||||||||
Arctic Cat, Inc. | 8,400 | 440,160 | ||||||
Blyth, Inc. (a) | 28,644 | 395,574 | ||||||
Brunswick Corp. | 22,800 | 1,028,964 | ||||||
Callaway Golf Co. | 91,655 | 772,652 | ||||||
Carter’s, Inc. | 14,600 | 1,009,590 | ||||||
Columbia Sportswear Co. | 8,180 | 546,997 | ||||||
Crocs, Inc. * | 34,660 | 422,159 | ||||||
Deckers Outdoor Corp. * | 14,850 | 1,022,125 | ||||||
Ethan Allen Interiors, Inc. | 19,565 | 521,212 | ||||||
Fossil Group, Inc. * | 14,600 | 1,853,324 | ||||||
G-III Apparel Group Ltd. * | 9,500 | 538,840 | ||||||
Hanesbrands, Inc. | 30,100 | 2,050,412 |
See financial notes 9
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Helen of Troy Ltd. * | 12,730 | 594,746 | ||||||
JAKKS Pacific, Inc. (a) | 57,925 | 373,037 | ||||||
KB Home | 47,400 | 804,378 | ||||||
La-Z-Boy, Inc. | 36,920 | 852,113 | ||||||
Lennar Corp., Class A | 37,500 | 1,333,125 | ||||||
M.D.C. Holdings, Inc. | 18,800 | 548,772 | ||||||
Meritage Homes Corp. * | 10,600 | 481,134 | ||||||
Michael Kors Holdings Ltd. * | 3,400 | 261,630 | ||||||
NACCO Industries, Inc., Class A | 11,040 | 628,949 | ||||||
Polaris Industries, Inc. | 14,700 | 1,924,965 | ||||||
PulteGroup, Inc. | 76,100 | 1,343,165 | ||||||
PVH Corp. | 13,989 | 1,742,610 | ||||||
Quiksilver, Inc. * | 115,600 | 961,792 | ||||||
Skechers U.S.A., Inc., Class A * | 32,545 | 948,361 | ||||||
Steven Madden Ltd. * | 15,522 | 569,347 | ||||||
Tempur-Pedic International, Inc. * | 31,915 | 1,223,940 | ||||||
The Jones Group, Inc. | 135,900 | 2,111,886 | ||||||
The Ryland Group, Inc. | 20,400 | 820,080 | ||||||
Toll Brothers, Inc. * | 42,200 | 1,387,536 | ||||||
Tupperware Brands Corp. | 19,700 | 1,766,105 | ||||||
Under Armour, Inc., Class A * | 8,330 | 675,979 | ||||||
Wolverine World Wide, Inc. | 25,290 | 1,460,244 | ||||||
33,415,903 | ||||||||
Consumer Services 5.4% | ||||||||
Bally Technologies, Inc. * | 15,675 | 1,146,469 | ||||||
Bob Evans Farms, Inc. | 30,255 | 1,727,258 | ||||||
Boyd Gaming Corp. * | 88,500 | 934,560 | ||||||
Buffalo Wild Wings, Inc. * | 3,800 | 541,804 | ||||||
Burger King Worldwide, Inc. | 14,900 | 315,582 | ||||||
Caesars Entertainment Corp. * | 94,100 | 1,639,222 | ||||||
Capella Education Co. * | 4,400 | 268,048 | ||||||
Career Education Corp. * | 347,800 | 1,905,944 | ||||||
CEC Entertainment, Inc. | 25,180 | 1,167,093 | ||||||
Chipotle Mexican Grill, Inc. * | 3,782 | 1,993,001 | ||||||
Choice Hotels International, Inc. (a) | 9,040 | 421,174 | ||||||
Cracker Barrel Old Country Store, Inc. | 15,720 | 1,727,156 | ||||||
DeVry, Inc. (a) | 45,300 | 1,626,270 | ||||||
DineEquity, Inc. | 6,530 | 535,917 | ||||||
Domino’s Pizza, Inc. | 26,900 | 1,803,914 | ||||||
Dunkin’ Brands Group, Inc. | 5,700 | 271,776 | ||||||
Hillenbrand, Inc. | 24,200 | 682,924 | ||||||
Hyatt Hotels Corp., Class A * | 16,800 | 799,680 | ||||||
International Speedway Corp., Class A | 18,750 | 613,313 | ||||||
ITT Educational Services, Inc. (a)* | 67,935 | 2,725,552 | ||||||
Jack in the Box, Inc. * | 40,500 | 1,647,540 | ||||||
Las Vegas Sands Corp. | 26,900 | 1,888,918 | ||||||
Life Time Fitness, Inc. * | 13,985 | 635,199 | ||||||
Marriott Vacations Worldwide Corp. * | 7,300 | 365,584 | ||||||
Matthews International Corp., Class A | 18,715 | 759,829 | ||||||
Outerwall, Inc. (a)* | 11,625 | 755,392 | ||||||
Panera Bread Co., Class A * | 5,875 | 927,780 | ||||||
Papa John’s International, Inc. | 9,110 | 689,354 | ||||||
Penn National Gaming, Inc. * | 28,700 | 1,679,237 | ||||||
Pinnacle Entertainment, Inc. * | 26,475 | 619,515 | ||||||
Red Robin Gourmet Burgers, Inc. * | 9,980 | 760,276 | ||||||
Regis Corp. | 75,800 | 1,099,100 | ||||||
Ruby Tuesday, Inc. * | 101,050 | 599,227 | ||||||
SeaWorld Entertainment, Inc. | 5,800 | 174,174 | ||||||
Six Flags Entertainment Corp. | 16,400 | 616,804 | ||||||
Sonic Corp. * | 73,280 | 1,414,304 | ||||||
Sotheby’s | 17,620 | 914,478 | ||||||
Steiner Leisure Ltd. * | 8,360 | 468,327 | ||||||
Stewart Enterprises, Inc., Class A | 33,940 | 448,347 | ||||||
Strayer Education, Inc. | 20,400 | 806,412 | ||||||
Texas Roadhouse, Inc. | 27,810 | 762,550 | ||||||
The Cheesecake Factory, Inc. | 37,535 | 1,773,529 | ||||||
The Wendy’s Co. | 187,300 | 1,627,637 | ||||||
Vail Resorts, Inc. | 12,360 | 870,762 | ||||||
Weight Watchers International, Inc. | 25,792 | 828,181 | ||||||
45,979,113 | ||||||||
Diversified Financials 3.3% | ||||||||
Affiliated Managers Group, Inc. * | 5,800 | 1,145,152 | ||||||
American Capital Ltd. * | 36,800 | 515,568 | ||||||
Ares Capital Corp. | 52,500 | 911,925 | ||||||
Cash America International, Inc. | 18,205 | 718,188 | ||||||
CBOE Holdings, Inc. | 17,400 | 843,900 | ||||||
DFC Global Corp. * | 14,100 | 170,610 | ||||||
E*TRADE Financial Corp. * | 104,200 | 1,762,022 | ||||||
Ezcorp, Inc., Class A * | 26,100 | 410,553 | ||||||
Federated Investors, Inc., Class B (a) | 71,700 | 1,944,504 | ||||||
First Cash Financial Services, Inc. * | 7,290 | 440,972 | ||||||
Greenhill & Co., Inc. | 14,035 | 719,996 | ||||||
IntercontinentalExchange, Inc. * | 6,900 | 1,329,837 | ||||||
Investment Technology Group, Inc. * | 42,055 | 673,721 | ||||||
Janus Capital Group, Inc. | 193,000 | 1,904,910 | ||||||
Lazard Ltd., Class A | 21,400 | 827,110 | ||||||
Leucadia National Corp. | 35,927 | 1,018,171 | ||||||
LPL Financial Holdings, Inc. | 17,400 | 708,876 | ||||||
MSCI, Inc. * | 35,800 | 1,459,566 | ||||||
Nelnet, Inc., Class A | 13,740 | 585,736 | ||||||
Raymond James Financial, Inc. | 26,700 | 1,218,855 | ||||||
SEI Investments Co. | 57,600 | 1,911,744 | ||||||
Stifel Financial Corp. * | 9,560 | 391,482 | ||||||
TD Ameritrade Holding Corp. | 86,800 | 2,366,168 | ||||||
The NASDAQ OMX Group, Inc. | 49,000 | 1,736,070 | ||||||
Waddell & Reed Financial, Inc., Class A | 23,700 | 1,463,475 | ||||||
World Acceptance Corp. * | 6,660 | 693,439 | ||||||
27,872,550 | ||||||||
Energy 6.5% | ||||||||
Atwood Oceanics, Inc. * | 12,400 | 658,812 | ||||||
Basic Energy Services, Inc. * | 26,885 | 394,403 | ||||||
Berry Petroleum Co., Class A | 18,620 | 889,105 | ||||||
Bill Barrett Corp. * | 33,700 | 932,479 | ||||||
Bristow Group, Inc. | 12,800 | 1,030,016 | ||||||
Cabot Oil & Gas Corp. | 34,900 | 1,232,668 | ||||||
CARBO Ceramics, Inc. (a) | 6,280 | 787,135 | ||||||
Cloud Peak Energy, Inc. * | 42,000 | 655,620 | ||||||
Comstock Resources, Inc. | 30,655 | 524,507 | ||||||
Concho Resources, Inc. * | 8,500 | 940,185 | ||||||
Crosstex Energy, Inc. | 31,400 | 963,666 | ||||||
Delek US Holdings, Inc. | 21,400 | 546,770 | ||||||
Denbury Resources, Inc. * | 94,300 | 1,790,757 | ||||||
Dresser-Rand Group, Inc. * | 27,400 | 1,665,098 | ||||||
Dril-Quip, Inc. * | 7,185 | 843,663 |
10 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy XXI (Bermuda) Ltd. | 19,500 | 566,670 | ||||||
EXCO Resources, Inc. | 96,500 | 522,065 | ||||||
Exterran Holdings, Inc. * | 59,000 | 1,684,450 | ||||||
Forest Oil Corp. * | 215,800 | 1,022,892 | ||||||
Green Plains Renewable Energy, Inc. | 12,600 | 203,238 | ||||||
GulfMark Offshore, Inc., Class A | 10,605 | 527,917 | ||||||
Helix Energy Solutions Group, Inc. * | 65,500 | 1,549,730 | ||||||
Hercules Offshore, Inc. * | 93,700 | 637,160 | ||||||
Hornbeck Offshore Services, Inc. * | 9,180 | 507,379 | ||||||
ION Geophysical Corp. * | 59,905 | 277,959 | ||||||
Key Energy Services, Inc. * | 164,100 | 1,283,262 | ||||||
Matrix Service Co. * | 23,100 | 480,249 | ||||||
Newpark Resources, Inc. * | 45,140 | 575,535 | ||||||
Nordic American Tankers Ltd. (a) | 54,885 | 447,862 | ||||||
Oceaneering International, Inc. | 24,900 | 2,138,412 | ||||||
Oil States International, Inc. * | 20,400 | 2,216,052 | ||||||
Parker Drilling Co. * | 126,410 | 910,152 | ||||||
PDC Energy, Inc. * | 7,355 | 498,742 | ||||||
Penn Virginia Corp. * | 125,600 | 1,068,856 | ||||||
Pioneer Energy Services Corp. * | 56,100 | 471,240 | ||||||
Quicksilver Resources, Inc. (a)* | 247,600 | 529,864 | ||||||
Range Resources Corp. | 17,600 | 1,332,496 | ||||||
Rosetta Resources, Inc. * | 9,810 | 588,011 | ||||||
SandRidge Energy, Inc. (a)* | 169,100 | 1,072,094 | ||||||
SemGroup Corp., Class A | 26,600 | 1,606,374 | ||||||
Ship Finance International Ltd. | 34,800 | 575,940 | ||||||
SM Energy Co. | 20,000 | 1,772,200 | ||||||
Stone Energy Corp. * | 33,100 | 1,153,866 | ||||||
Superior Energy Services, Inc. * | 68,000 | 1,824,440 | ||||||
Swift Energy Co. * | 50,605 | 694,301 | ||||||
Targa Resources Corp. | 10,800 | 837,648 | ||||||
Teekay Corp. | 28,700 | 1,246,441 | ||||||
TETRA Technologies, Inc. * | 68,760 | 891,817 | ||||||
Tidewater, Inc. | 37,400 | 2,252,228 | ||||||
Ultra Petroleum Corp. * | 49,300 | 905,148 | ||||||
Unit Corp. * | 31,200 | 1,603,992 | ||||||
W&T Offshore, Inc. | 32,700 | 624,243 | ||||||
Western Refining, Inc. | 44,600 | 1,439,242 | ||||||
Whiting Petroleum Corp. * | 29,900 | 2,000,011 | ||||||
Willbros Group, Inc. * | 59,500 | 580,720 | ||||||
54,975,782 | ||||||||
Food & Staples Retailing 1.0% | ||||||||
PriceSmart, Inc. | 4,340 | 493,849 | ||||||
Rite Aid Corp. * | 373,200 | 1,989,156 | ||||||
Roundy’s, Inc. | 49,500 | 460,350 | ||||||
Susser Holdings Corp. * | 12,400 | 680,016 | ||||||
The Andersons, Inc. | 15,525 | 1,151,644 | ||||||
The Fresh Market, Inc. * | 4,000 | 203,640 | ||||||
The Pantry, Inc. * | 110,800 | 1,483,612 | ||||||
United Natural Foods, Inc. * | 26,900 | 1,922,005 | ||||||
8,384,272 | ||||||||
Food, Beverage & Tobacco 2.0% | ||||||||
B&G Foods, Inc. | 12,800 | 433,280 | ||||||
Cal-Maine Foods, Inc. | 10,300 | 522,519 | ||||||
Chiquita Brands International, Inc. * | 124,000 | 1,283,400 | ||||||
Darling International, Inc. * | 25,520 | 593,851 | ||||||
Flowers Foods, Inc. | 71,050 | 1,800,407 | ||||||
Fresh Del Monte Produce, Inc. | 46,600 | 1,239,094 | ||||||
Green Mountain Coffee Roasters, Inc. (a)* | 8,480 | 532,629 | ||||||
J&J Snack Foods Corp. | 5,935 | 507,858 | ||||||
Lancaster Colony Corp. | 11,265 | 934,882 | ||||||
Monster Beverage Corp. * | 19,110 | 1,093,665 | ||||||
Pilgrim’s Pride Corp. * | 35,000 | 495,950 | ||||||
Post Holdings, Inc. * | 19,700 | 846,115 | ||||||
Sanderson Farms, Inc. | 18,200 | 1,150,422 | ||||||
Seaboard Corp. | 202 | 551,460 | ||||||
Snyders-Lance, Inc. | 18,860 | 565,612 | ||||||
The Hain Celestial Group, Inc. * | 7,670 | 638,374 | ||||||
TreeHouse Foods, Inc. * | 12,385 | 907,325 | ||||||
Universal Corp. | 29,100 | 1,543,173 | ||||||
Vector Group Ltd. | 34,007 | 549,893 | ||||||
WhiteWave Foods Co., Class A * | 19,100 | 382,191 | ||||||
16,572,100 | ||||||||
Health Care Equipment & Services 4.2% | ||||||||
Alere, Inc. * | 37,200 | 1,254,756 | ||||||
Allscripts Healthcare Solutions, Inc. * | 15,000 | 207,450 | ||||||
Amedisys, Inc. * | 67,670 | 1,101,668 | ||||||
AmSurg Corp. * | 17,725 | 760,225 | ||||||
Analogic Corp. | 4,965 | 457,922 | ||||||
Brookdale Senior Living, Inc. * | 36,800 | 996,544 | ||||||
Catamaran Corp. * | 15,300 | 718,488 | ||||||
Centene Corp. * | 27,200 | 1,527,552 | ||||||
Cerner Corp. * | 32,800 | 1,837,784 | ||||||
Chemed Corp. (a) | 15,795 | 1,071,217 | ||||||
CONMED Corp. | 14,395 | 522,107 | ||||||
Edwards Lifesciences Corp. * | 15,200 | 990,888 | ||||||
Gentiva Health Services, Inc. * | 42,825 | 490,346 | ||||||
Greatbatch, Inc. * | 5,300 | 202,036 | ||||||
Haemonetics Corp. * | 17,100 | 693,576 | ||||||
Hanger, Inc. * | 12,200 | 447,740 | ||||||
HealthSouth Corp. | 21,300 | 747,843 | ||||||
Healthways, Inc. * | 38,760 | 373,259 | ||||||
Hill-Rom Holdings, Inc. | 39,900 | 1,647,471 | ||||||
Hologic, Inc. * | 61,800 | 1,383,702 | ||||||
IDEXX Laboratories, Inc. * | 14,400 | 1,553,184 | ||||||
Integra LifeSciences Holdings Corp. * | 9,420 | 431,248 | ||||||
Intuitive Surgical, Inc. * | 2,908 | 1,080,322 | ||||||
Invacare Corp. | 54,365 | 1,167,216 | ||||||
Kindred Healthcare, Inc. | 140,100 | 1,944,588 | ||||||
Masimo Corp. | 18,900 | 484,218 | ||||||
MEDNAX, Inc. * | 13,600 | 1,482,672 | ||||||
Molina Healthcare, Inc. * | 23,757 | 751,671 | ||||||
MWI Veterinary Supply, Inc. * | 3,400 | 539,376 | ||||||
PharMerica Corp. * | 54,140 | 799,106 | ||||||
ResMed, Inc. (a) | 21,140 | 1,093,784 | ||||||
Select Medical Holdings Corp. | 22,100 | 187,408 | ||||||
Sirona Dental Systems, Inc. * | 8,090 | 584,502 | ||||||
STERIS Corp. | 33,200 | 1,500,308 | ||||||
Teleflex, Inc. | 18,800 | 1,732,984 | ||||||
The Cooper Cos., Inc. | 8,100 | 1,046,601 | ||||||
VCA Antech, Inc. * | 39,700 | 1,129,465 | ||||||
West Pharmaceutical Services, Inc. | 23,880 | 1,154,598 | ||||||
36,095,825 |
See financial notes 11
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Household & Personal Products 0.5% | ||||||||
Central Garden & Pet Co., Class A * | 93,130 | 685,437 | ||||||
Elizabeth Arden, Inc. * | 10,570 | 382,528 | ||||||
Nu Skin Enterprises, Inc., Class A | 19,120 | 2,235,702 | ||||||
Spectrum Brands Holdings, Inc. | 8,200 | 540,544 | ||||||
WD-40 Co. | 6,515 | 472,272 | ||||||
4,316,483 | ||||||||
Insurance 4.2% | ||||||||
Alleghany Corp. * | 2,700 | 1,094,634 | ||||||
American Equity Investment Life Holding Co. | 37,115 | 773,477 | ||||||
Argo Group International Holdings Ltd. | 17,004 | 713,828 | ||||||
Arthur J. Gallagher & Co. | 40,300 | 1,912,235 | ||||||
Aspen Insurance Holdings Ltd. | 55,800 | 2,176,758 | ||||||
Assured Guaranty Ltd. | 29,600 | 606,800 | ||||||
Brown & Brown, Inc. | 33,100 | 1,056,883 | ||||||
CNO Financial Group, Inc. | 137,800 | 2,146,924 | ||||||
First American Financial Corp. | 65,400 | 1,691,244 | ||||||
Horace Mann Educators Corp. | 17,490 | 484,473 | ||||||
Infinity Property & Casualty Corp. | 14,465 | 992,010 | ||||||
Kemper Corp. | 55,800 | 2,065,716 | ||||||
Markel Corp. * | 3,382 | 1,791,344 | ||||||
Mercury General Corp. | 21,200 | 987,072 | ||||||
Montpelier Re Holdings Ltd. | 30,400 | 839,344 | ||||||
Old Republic International Corp. | 137,300 | 2,305,267 | ||||||
Primerica, Inc. | 46,000 | 1,975,700 | ||||||
ProAssurance Corp. | 20,100 | 910,932 | ||||||
Protective Life Corp. | 48,100 | 2,216,448 | ||||||
RLI Corp. | 13,300 | 1,256,584 | ||||||
Safety Insurance Group, Inc. | 9,305 | 508,890 | ||||||
Selective Insurance Group, Inc. | 37,800 | 993,006 | ||||||
StanCorp Financial Group, Inc. | 36,300 | 2,138,070 | ||||||
Stewart Information Services Corp. | 8,100 | 253,692 | ||||||
Symetra Financial Corp. | 28,700 | 537,551 | ||||||
The Hanover Insurance Group, Inc. | 32,800 | 1,920,112 | ||||||
Tower Group International Ltd. | 34,629 | 125,703 | ||||||
Validus Holdings Ltd. | 41,327 | 1,631,590 | ||||||
36,106,287 | ||||||||
Materials 5.9% | ||||||||
A. Schulman, Inc. | 29,133 | 964,885 | ||||||
A.M. Castle & Co. * | 24,678 | 353,142 | ||||||
AK Steel Holding Corp. (a)* | 397,600 | 1,749,440 | ||||||
AMCOL International Corp. | 14,620 | 469,010 | ||||||
Axiall Corp. | 19,624 | 763,177 | ||||||
Cabot Corp. | 42,000 | 1,957,620 | ||||||
Carpenter Technology Corp. | 24,000 | 1,423,920 | ||||||
Century Aluminum Co. * | 65,100 | 565,068 | ||||||
Chemtura Corp. * | 56,100 | 1,374,450 | ||||||
Clearwater Paper Corp. * | 11,360 | 593,219 | ||||||
Coeur Mining, Inc. * | 18,300 | 223,443 | ||||||
Compass Minerals International, Inc. | 11,530 | 858,639 | ||||||
Crown Holdings, Inc. * | 44,400 | 1,935,840 | ||||||
Eagle Materials, Inc. | 11,070 | 830,361 | ||||||
Ferro Corp. * | 160,230 | 2,055,751 | ||||||
Graphic Packaging Holding Co. * | 90,100 | 756,840 | ||||||
Greif, Inc., Class A | 24,100 | 1,289,109 | ||||||
H.B. Fuller Co. | 29,780 | 1,425,569 | ||||||
Hecla Mining Co. (a) | 56,500 | 176,280 | ||||||
Innophos Holdings, Inc. | 12,850 | 644,042 | ||||||
Innospec, Inc. | 9,980 | 459,679 | ||||||
Kaiser Aluminum Corp. | 13,880 | 936,206 | ||||||
KapStone Paper & Packaging Corp. | 12,400 | 644,304 | ||||||
Koppers Holdings, Inc. | 10,260 | 456,673 | ||||||
Kraton Performance Polymers, Inc. * | 24,800 | 527,496 | ||||||
Louisiana-Pacific Corp. * | 35,500 | 603,855 | ||||||
Materion Corp. | 16,460 | 490,673 | ||||||
Minerals Technologies, Inc. | 21,420 | 1,213,015 | ||||||
Myers Industries, Inc. | 27,605 | 491,921 | ||||||
NewMarket Corp. | 3,195 | 994,795 | ||||||
Olin Corp. | 49,400 | 1,111,994 | ||||||
OM Group, Inc. * | 31,800 | 1,081,200 | ||||||
P.H. Glatfelter Co. | 32,345 | 847,439 | ||||||
PolyOne Corp. | 29,500 | 893,850 | ||||||
Resolute Forest Products * | 90,200 | 1,442,298 | ||||||
Rock-Tenn Co., Class A | 16,600 | 1,776,366 | ||||||
Rockwood Holdings, Inc. | 24,400 | 1,543,300 | ||||||
RTI International Metals, Inc. * | 13,280 | 450,192 | ||||||
Schnitzer Steel Industries, Inc., Class A | 64,010 | 1,858,850 | ||||||
Schweitzer-Mauduit International, Inc. | 12,772 | 790,331 | ||||||
Sensient Technologies Corp. | 25,300 | 1,318,889 | ||||||
Silgan Holdings, Inc. | 25,000 | 1,126,750 | ||||||
Stepan Co. | 9,530 | 561,031 | ||||||
Stillwater Mining Co. * | 38,070 | 415,344 | ||||||
SunCoke Energy, Inc. * | 36,000 | 720,000 | ||||||
The Scotts Miracle-Gro Co., Class A | 32,200 | 1,890,784 | ||||||
Tredegar Corp. | 16,475 | 481,399 | ||||||
W.R. Grace & Co. * | 8,400 | 769,944 | ||||||
Walter Energy, Inc. (a) | 60,700 | 964,523 | ||||||
Wausau Paper Corp. | 41,910 | 490,347 | ||||||
Westlake Chemical Corp. | 5,900 | 633,778 | ||||||
Worthington Industries, Inc. | 38,100 | 1,544,574 | ||||||
49,941,605 | ||||||||
Media 2.4% | ||||||||
AMC Networks, Inc., Class A * | 6,800 | 476,612 | ||||||
Belo Corp., Class A | 59,500 | 816,935 | ||||||
Cinemark Holdings, Inc. | 49,000 | 1,607,690 | ||||||
Dex Media, Inc. * | 68,900 | 465,075 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 52,300 | 1,790,752 | ||||||
John Wiley & Sons, Inc., Class A | 23,000 | 1,156,670 | ||||||
Lamar Advertising Co., Class A * | 41,400 | 1,892,394 | ||||||
Lions Gate Entertainment Corp. * | 6,200 | 214,396 | ||||||
Live Nation Entertainment, Inc. * | 67,900 | 1,319,976 | ||||||
Meredith Corp. | 27,000 | 1,385,100 | ||||||
National CineMedia, Inc. | 27,100 | 474,792 | ||||||
Regal Entertainment Group, Class A | 68,900 | 1,309,789 | ||||||
Scholastic Corp. | 42,000 | 1,204,980 | ||||||
Scripps Networks Interactive, Class A | 21,500 | 1,730,750 | ||||||
Sinclair Broadcast Group, Inc., Class A | 22,319 | 715,547 | ||||||
Sirius XM Radio, Inc. | 50,000 | 188,500 | ||||||
The E.W. Scripps Co., Class A * | 44,600 | 883,972 |
12 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Madison Square Garden Co., Class A * | 10,200 | 617,304 | ||||||
The New York Times Co., Class A | 112,300 | 1,553,109 | ||||||
Valassis Communications, Inc. (a) | 31,200 | 853,632 | ||||||
20,657,975 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.1% | ||||||||
Alexion Pharmaceuticals, Inc. * | 1,900 | 233,605 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 7,200 | 889,344 | ||||||
Bruker Corp. * | 11,100 | 226,995 | ||||||
Cambrex Corp. * | 20,700 | 348,174 | ||||||
Charles River Laboratories International, Inc. * | 34,900 | 1,717,429 | ||||||
Covance, Inc. * | 24,600 | 2,195,796 | ||||||
Cubist Pharmaceuticals, Inc. * | 7,240 | 448,880 | ||||||
Endo Health Solutions, Inc. * | 51,800 | 2,265,214 | ||||||
Illumina, Inc. * | 10,060 | 940,711 | ||||||
Impax Laboratories, Inc. * | 26,000 | 526,760 | ||||||
Myriad Genetics, Inc. (a)* | 6,300 | 153,594 | ||||||
PAREXEL International Corp. * | 11,620 | 531,150 | ||||||
PDL Biopharma, Inc. (a) | 91,050 | 736,595 | ||||||
PerkinElmer, Inc. | 48,100 | 1,829,724 | ||||||
Perrigo Co. | 11,400 | 1,571,946 | ||||||
QIAGEN N.V. * | 44,800 | 1,037,568 | ||||||
Techne Corp. | 9,165 | 800,929 | ||||||
United Therapeutics Corp. * | 2,400 | 212,448 | ||||||
ViroPharma, Inc. * | 17,060 | 662,269 | ||||||
Zoetis, Inc. | 11,700 | 370,422 | ||||||
17,699,553 | ||||||||
Real Estate 7.5% | ||||||||
Alexandria Real Estate Equities, Inc. | 14,000 | 920,920 | ||||||
American Campus Communities, Inc. | 11,660 | 402,970 | ||||||
American Capital Agency Corp. | 29,800 | 647,256 | ||||||
Anworth Mortgage Asset Corp. | 93,255 | 457,882 | ||||||
Ashford Hospitality Trust | 33,485 | 437,314 | ||||||
BioMed Realty Trust, Inc. | 39,100 | 778,872 | ||||||
Brandywine Realty Trust | 78,800 | 1,121,324 | ||||||
BRE Properties, Inc. | 16,300 | 890,143 | ||||||
Camden Property Trust | 17,900 | 1,149,180 | ||||||
Capstead Mortgage Corp. | 50,050 | 592,091 | ||||||
CBL & Associates Properties, Inc. | 50,600 | 1,002,386 | ||||||
CBRE Group, Inc., Class A * | 61,900 | 1,437,937 | ||||||
Chimera Investment Corp. | 334,200 | 1,012,626 | ||||||
CommonWealth REIT | 65,700 | 1,601,109 | ||||||
Corporate Office Properties Trust | 32,200 | 792,120 | ||||||
Corrections Corp. of America | 45,828 | 1,695,636 | ||||||
Cousins Properties, Inc. | 33,783 | 382,761 | ||||||
CYS Investments, Inc. | 29,500 | 250,455 | ||||||
DCT Industrial Trust, Inc. | 79,500 | 616,125 | ||||||
DDR Corp. | 70,600 | 1,196,670 | ||||||
DiamondRock Hospitality Co. | 73,600 | 838,304 | ||||||
Digital Realty Trust, Inc. (a) | 18,100 | 862,646 | ||||||
Douglas Emmett, Inc. | 32,000 | 797,760 | ||||||
Duke Realty Corp. | 113,800 | 1,885,666 | ||||||
EastGroup Properties, Inc. | 6,950 | 442,437 | ||||||
EPR Properties | 14,100 | 724,317 | ||||||
Equity Lifestyle Properties, Inc. | 9,740 | 370,023 | ||||||
Essex Property Trust, Inc. | 6,000 | 966,000 | ||||||
Extra Space Storage, Inc. | 11,265 | 518,077 | ||||||
Federal Realty Investment Trust | 12,100 | 1,253,560 | ||||||
Forest City Enterprises, Inc., Class A * | 22,200 | 449,772 | ||||||
General Growth Properties, Inc. | 87,900 | 1,866,117 | ||||||
Glimcher Realty Trust | 33,825 | 346,706 | ||||||
Hatteras Financial Corp. | 28,500 | 518,700 | ||||||
Healthcare Realty Trust, Inc. | 21,800 | 523,418 | ||||||
Highwoods Properties, Inc. | 25,100 | 968,860 | ||||||
Home Properties, Inc. | 13,800 | 832,278 | ||||||
HomeBanc Corp. (b)(c)* | 6,875 | — | ||||||
Inland Real Estate Corp. | 37,530 | 401,196 | ||||||
Invesco Mortgage Capital, Inc. | 15,200 | 234,840 | ||||||
iStar Financial, Inc. * | 123,500 | 1,559,805 | ||||||
Jones Lang LaSalle, Inc. | 17,800 | 1,694,560 | ||||||
Kilroy Realty Corp. | 12,400 | 659,184 | ||||||
LaSalle Hotel Properties | 25,640 | 796,122 | ||||||
Lexington Realty Trust | 58,400 | 683,280 | ||||||
Liberty Property Trust | 39,700 | 1,476,443 | ||||||
Mack-Cali Realty Corp. | 58,600 | 1,204,816 | ||||||
MFA Financial, Inc. | 117,500 | 870,675 | ||||||
Mid-America Apartment Communities, Inc. | 23,121 | 1,535,234 | ||||||
National Retail Properties, Inc. | 17,200 | 591,680 | ||||||
NorthStar Realty Finance Corp. | 57,632 | 537,707 | ||||||
Omega Healthcare Investors, Inc. | 18,290 | 607,960 | ||||||
Pennsylvania Real Estate Investment Trust | 28,900 | 523,957 | ||||||
Piedmont Office Realty Trust, Inc., Class A | 86,000 | 1,589,280 | ||||||
Post Properties, Inc. | 9,920 | 453,741 | ||||||
Potlatch Corp. | 24,600 | 1,004,418 | ||||||
PS Business Parks, Inc. | 5,450 | 444,121 | ||||||
RAIT Financial Trust | 60,920 | 459,946 | ||||||
Realty Income Corp. | 20,400 | 849,660 | ||||||
Redwood Trust, Inc. | 38,100 | 667,512 | ||||||
Regency Centers Corp. | 23,400 | 1,208,844 | ||||||
Retail Properties of America, Inc., Class A | 21,300 | 304,803 | ||||||
RLJ Lodging Trust | 10,600 | 267,756 | ||||||
Ryman Hospitality Properties, Inc. | 6,100 | 225,151 | ||||||
Sabra Health Care REIT, Inc. | 12,100 | 325,490 | ||||||
Senior Housing Properties Trust | 31,400 | 773,696 | ||||||
SL Green Realty Corp. | 13,700 | 1,295,609 | ||||||
Sovran Self Storage, Inc. | 6,470 | 494,890 | ||||||
Starwood Property Trust, Inc. | 8,900 | 228,641 | ||||||
Sun Communities, Inc. | 7,555 | 336,726 | ||||||
Sunstone Hotel Investors, Inc. | 51,500 | 682,375 | ||||||
Tanger Factory Outlet Centers, Inc. | 15,080 | 525,538 | ||||||
Taubman Centers, Inc. | 11,900 | 782,901 | ||||||
The Geo Group, Inc. | 19,236 | 678,454 | ||||||
The Macerich Co. | 26,100 | 1,545,381 | ||||||
UDR, Inc. | 55,400 | 1,374,474 | ||||||
Washington Real Estate Investment Trust | 24,900 | 652,629 | ||||||
Weingarten Realty Investors | 41,900 | 1,329,487 | ||||||
WP Carey, Inc. | 4,500 | 299,745 | ||||||
63,729,145 | ||||||||
Retailing 5.6% | ||||||||
Aeropostale, Inc. (a)* | 107,500 | 998,675 | ||||||
ANN, Inc. * | 51,500 | 1,821,040 |
See financial notes 13
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Asbury Automotive Group, Inc. * | 19,800 | 951,390 | ||||||
Ascena Retail Group, Inc. * | 50,500 | 999,395 | ||||||
Barnes & Noble, Inc. * | 66,700 | 942,471 | ||||||
Brown Shoe Co., Inc. | 43,742 | 981,570 | ||||||
Cabela’s, Inc. * | 9,800 | 581,336 | ||||||
Chico’s FAS, Inc. | 87,600 | 1,502,340 | ||||||
DSW, Inc., Class A | 8,568 | 751,157 | ||||||
Express, Inc. * | 29,400 | 682,374 | ||||||
Fred’s, Inc., Class A | 70,770 | 1,146,474 | ||||||
Genesco, Inc. * | 15,900 | 1,082,949 | ||||||
GNC Holdings, Inc., Class A | 16,300 | 958,766 | ||||||
Group 1 Automotive, Inc. | 25,600 | 1,638,400 | ||||||
Guess?, Inc. | 53,400 | 1,668,750 | ||||||
hhgregg, Inc. * | 10,300 | 159,753 | ||||||
Hibbett Sports, Inc. * | 9,685 | 564,926 | ||||||
HSN, Inc. | 13,000 | 681,200 | ||||||
Jos. A. Bank Clothiers, Inc. * | 14,085 | 675,798 | ||||||
Lithia Motors, Inc., Class A | 12,535 | 787,825 | ||||||
LKQ Corp. * | 50,300 | 1,661,409 | ||||||
Lumber Liquidators Holdings, Inc. * | 1,900 | 216,961 | ||||||
Monro Muffler Brake, Inc. (a) | 10,740 | 494,040 | ||||||
Netflix, Inc. * | 4,200 | 1,354,416 | ||||||
Nutrisystem, Inc. | 80,330 | 1,510,204 | ||||||
Office Depot, Inc. * | 482,800 | 2,698,852 | ||||||
OfficeMax, Inc. | 118,200 | 1,770,636 | ||||||
Penske Automotive Group, Inc. | 37,000 | 1,465,940 | ||||||
Pier 1 Imports, Inc. | 23,685 | 494,543 | ||||||
Pool Corp. | 15,580 | 847,240 | ||||||
Saks, Inc. * | 110,500 | 1,766,895 | ||||||
Sally Beauty Holdings, Inc. * | 18,965 | 499,159 | ||||||
Sears Hometown and Outlet Stores, Inc. * | 7,100 | 197,806 | ||||||
Select Comfort Corp. * | 17,170 | 314,554 | ||||||
Sonic Automotive, Inc., Class A | 46,000 | 1,024,880 | ||||||
Stage Stores, Inc. | 39,455 | 814,746 | ||||||
The Bon-Ton Stores, Inc. (a) | 13,100 | 149,995 | ||||||
The Buckle, Inc. | 14,822 | 725,389 | ||||||
The Cato Corp., Class A | 23,195 | 695,154 | ||||||
The Children’s Place Retail Stores, Inc. * | 25,360 | 1,384,402 | ||||||
The Finish Line, Inc., Class A | 45,152 | 1,130,606 | ||||||
The Men’s Wearhouse, Inc. | 50,000 | 2,115,000 | ||||||
The Pep Boys - Manny, Moe & Jack * | 57,715 | 746,832 | ||||||
The Wet Seal, Inc., Class A * | 115,160 | 381,180 | ||||||
TripAdvisor, Inc. * | 6,800 | 562,428 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. * | 7,500 | 966,375 | ||||||
Urban Outfitters, Inc. * | 38,800 | 1,469,744 | ||||||
Vitamin Shoppe, Inc. * | 8,500 | 398,735 | ||||||
47,434,710 | ||||||||
Semiconductors & Semiconductor Equipment 3.9% | ||||||||
Advanced Micro Devices, Inc. (a)* | 508,900 | 1,699,726 | ||||||
Amkor Technology, Inc. * | 160,300 | 851,193 | ||||||
Atmel Corp. * | 209,500 | 1,525,160 | ||||||
ATMI, Inc. * | 19,015 | 519,870 | ||||||
Avago Technologies Ltd. | 42,600 | 1,935,318 | ||||||
Brooks Automation, Inc. | 58,890 | 567,699 | ||||||
Cabot Microelectronics Corp. * | 12,130 | 495,996 | ||||||
Cirrus Logic, Inc. * | 18,035 | 404,525 | ||||||
Cree, Inc. * | 13,700 | 832,275 | ||||||
Cypress Semiconductor Corp. * | 83,305 | 773,070 | ||||||
Diodes, Inc. * | 7,200 | 174,384 | ||||||
Entegris, Inc. * | 76,345 | 790,171 | ||||||
Fairchild Semiconductor International, Inc. * | 81,300 | 1,030,071 | ||||||
First Solar, Inc. (a)* | 32,600 | 1,638,802 | ||||||
GT Advanced Technologies, Inc. * | 160,700 | 1,205,250 | ||||||
Hittite Microwave Corp. * | 3,000 | 191,670 | ||||||
Integrated Device Technology, Inc. * | 128,780 | 1,370,219 | ||||||
International Rectifier Corp. * | 34,900 | 908,796 | ||||||
Intersil Corp., Class A | 156,200 | 1,743,192 | ||||||
Micrel, Inc. | 35,350 | 325,220 | ||||||
Microsemi Corp. * | 16,945 | 425,828 | ||||||
MKS Instruments, Inc. | 29,150 | 864,006 | ||||||
OmniVision Technologies, Inc. * | 32,280 | 452,243 | ||||||
ON Semiconductor Corp. * | 185,600 | 1,310,336 | ||||||
Photronics, Inc. * | 55,725 | 468,090 | ||||||
PMC-Sierra, Inc. * | 73,225 | 429,831 | ||||||
RF Micro Devices, Inc. * | 129,345 | 679,061 | ||||||
Semtech Corp. * | 13,805 | 429,473 | ||||||
Silicon Laboratories, Inc. * | 24,490 | 984,988 | ||||||
Skyworks Solutions, Inc. * | 36,500 | 940,970 | ||||||
Spansion, Inc., Class A * | 39,000 | 466,830 | ||||||
SunEdison, Inc. * | 343,600 | 3,195,480 | ||||||
Synaptics, Inc. * | 12,005 | 558,232 | ||||||
Teradyne, Inc. * | 72,500 | 1,268,025 | ||||||
Tessera Technologies, Inc. | 21,990 | 418,250 | ||||||
TriQuint Semiconductor, Inc. * | 91,560 | 726,071 | ||||||
Veeco Instruments, Inc. * | 13,160 | 384,404 | ||||||
32,984,725 | ||||||||
Software & Services 6.0% | ||||||||
Activision Blizzard, Inc. | 99,400 | 1,654,016 | ||||||
Acxiom Corp. * | 50,815 | 1,688,582 | ||||||
Akamai Technologies, Inc. * | 27,900 | 1,248,246 | ||||||
ANSYS, Inc. * | 8,400 | 734,580 | ||||||
CACI International, Inc., Class A * | 22,800 | 1,641,144 | ||||||
Cadence Design Systems, Inc. * | 33,300 | 431,901 | ||||||
Compuware Corp. | 169,100 | 1,805,988 | ||||||
Convergys Corp. | 106,500 | 2,102,310 | ||||||
CSG Systems International, Inc. | 33,545 | 934,564 | ||||||
Digital River, Inc. * | 14,900 | 265,816 | ||||||
EarthLink, Inc. | 181,075 | 916,239 | ||||||
Electronic Arts, Inc. * | 69,600 | 1,827,000 | ||||||
Equinix, Inc. * | 4,000 | 645,920 | ||||||
Euronet Worldwide, Inc. * | 16,895 | 733,243 | ||||||
Facebook, Inc., Class A * | 20,300 | 1,020,278 | ||||||
FactSet Research Systems, Inc. | 12,365 | 1,347,043 | ||||||
Fair Isaac Corp. | 25,705 | 1,472,382 | ||||||
FleetCor Technologies, Inc. * | 2,000 | 230,700 | ||||||
Gartner, Inc. * | 15,700 | 925,515 | ||||||
Genpact Ltd. * | 33,450 | 663,314 | ||||||
Global Cash Access Holdings, Inc. * | 52,735 | 437,701 | ||||||
Global Payments, Inc. | 23,900 | 1,421,572 | ||||||
Heartland Payment Systems, Inc. | 18,365 | 742,864 | ||||||
Informatica Corp. * | 11,355 | 438,303 | ||||||
j2 Global, Inc. | 10,485 | 576,465 | ||||||
Jack Henry & Associates, Inc. | 21,080 | 1,151,179 | ||||||
Lender Processing Services, Inc. | 62,200 | 2,147,144 | ||||||
Manhattan Associates, Inc. * | 6,095 | 649,178 |
14 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
ManTech International Corp., Class A | 29,000 | 810,260 | ||||||
MAXIMUS, Inc. | 20,780 | 1,006,791 | ||||||
Mentor Graphics Corp. | 21,820 | 481,786 | ||||||
MICROS Systems, Inc. * | 17,340 | 940,695 | ||||||
MicroStrategy, Inc., Class A * | 4,128 | 503,575 | ||||||
Monster Worldwide, Inc. * | 211,900 | 915,408 | ||||||
NeuStar, Inc., Class A * | 17,375 | 797,860 | ||||||
Nuance Communications, Inc. * | 27,500 | 427,900 | ||||||
Progress Software Corp. * | 22,425 | 582,153 | ||||||
PTC, Inc. * | 28,540 | 791,129 | ||||||
Rackspace Hosting, Inc. * | 8,720 | 446,726 | ||||||
Red Hat, Inc. * | 12,100 | 523,567 | ||||||
Rovi Corp. * | 21,869 | 366,524 | ||||||
Salesforce.com, Inc. * | 14,798 | 789,621 | ||||||
Sapient Corp. * | 37,380 | 590,978 | ||||||
Solera Holdings, Inc. | 8,660 | 486,865 | ||||||
Sykes Enterprises, Inc. * | 32,655 | 611,302 | ||||||
Synopsys, Inc. * | 31,300 | 1,140,885 | ||||||
Take-Two Interactive Software, Inc. * | 37,255 | 667,237 | ||||||
TeleTech Holdings, Inc. * | 18,410 | 487,313 | ||||||
TIBCO Software, Inc. * | 47,730 | 1,172,249 | ||||||
Unisys Corp. * | 40,500 | 1,067,175 | ||||||
United Online, Inc. * | 116,127 | 1,003,337 | ||||||
ValueClick, Inc. * | 32,580 | 625,862 | ||||||
VeriFone Systems, Inc. * | 10,600 | 240,196 | ||||||
Verisign, Inc. * | 42,300 | 2,296,044 | ||||||
VistaPrint N.V. (a)* | 9,120 | 492,936 | ||||||
VMware, Inc., Class A * | 2,500 | 203,200 | ||||||
WEX, Inc. * | 6,000 | 560,100 | ||||||
50,882,861 | ||||||||
Technology Hardware & Equipment 4.7% | ||||||||
ADTRAN, Inc. | 40,545 | 951,997 | ||||||
ARRIS Group, Inc. * | 53,305 | 952,027 | ||||||
Belden, Inc. | 15,440 | 1,038,494 | ||||||
Benchmark Electronics, Inc. * | 82,900 | 1,884,317 | ||||||
Brocade Communications Systems, Inc. * | 204,800 | 1,642,496 | ||||||
Cognex Corp. | 18,930 | 591,563 | ||||||
Coherent, Inc. | 11,940 | 790,309 | ||||||
Comtech Telecommunications Corp. | 20,770 | 623,515 | ||||||
Diebold, Inc. | 55,100 | 1,650,796 | ||||||
Dolby Laboratories, Inc., Class A (a) | 15,700 | 561,118 | ||||||
EchoStar Corp., Class A * | 16,900 | 810,524 | ||||||
Electronics for Imaging, Inc. * | 22,502 | 772,044 | ||||||
Emulex Corp. * | 76,565 | 576,535 | ||||||
F5 Networks, Inc. * | 11,140 | 908,021 | ||||||
FEI Co. | 5,520 | 491,722 | ||||||
Finisar Corp. * | 27,230 | 626,562 | ||||||
FLIR Systems, Inc. | 49,100 | 1,398,368 | ||||||
Gerber Scientific, Inc. (a)(b)(c) | 19,700 | — | ||||||
Insight Enterprises, Inc. * | 68,900 | 1,451,723 | ||||||
InterDigital, Inc. | 15,200 | 589,000 | ||||||
Itron, Inc. * | 24,000 | 1,024,080 | ||||||
JDS Uniphase Corp. * | 58,000 | 759,220 | ||||||
Littelfuse, Inc. | 6,645 | 565,024 | ||||||
MTS Systems Corp. | 7,480 | 488,594 | ||||||
National Instruments Corp. | 24,742 | 718,755 | ||||||
NCR Corp. * | 57,800 | 2,112,590 | ||||||
NETGEAR, Inc. * | 15,050 | 432,838 | ||||||
OSI Systems, Inc. * | 2,600 | 189,384 | ||||||
Plantronics, Inc. | 16,310 | 700,351 | ||||||
Plexus Corp. * | 37,180 | 1,423,250 | ||||||
Polycom, Inc. * | 96,140 | 999,856 | ||||||
QLogic Corp. * | 145,280 | 1,794,208 | ||||||
Rofin-Sinar Technologies, Inc. * | 19,510 | 512,138 | ||||||
Sanmina Corp. * | 111,500 | 1,623,440 | ||||||
ScanSource, Inc. * | 30,040 | 1,155,338 | ||||||
SYNNEX Corp. * | 41,200 | 2,525,560 | ||||||
Tellabs, Inc. | 775,800 | 1,892,952 | ||||||
Trimble Navigation Ltd. * | 34,500 | 985,665 | ||||||
ViaSat, Inc. * | 7,115 | 470,444 | ||||||
Zebra Technologies Corp., Class A * | 28,820 | 1,392,294 | ||||||
40,077,112 | ||||||||
Telecommunication Services 1.0% | ||||||||
Cincinnati Bell, Inc. * | 243,300 | 695,838 | ||||||
Consolidated Communications Holdings, Inc. | 31,914 | 594,558 | ||||||
Intelsat S.A. * | 9,400 | 191,666 | ||||||
Leap Wireless International, Inc. * | 100,400 | 1,616,440 | ||||||
Level 3 Communications, Inc. * | 50,600 | 1,545,830 | ||||||
NTELOS Holdings Corp. | 26,920 | 512,557 | ||||||
SBA Communications Corp., Class A * | 10,105 | 883,884 | ||||||
T-Mobile US, Inc. * | 12,700 | 352,171 | ||||||
tw telecom, Inc. * | 35,400 | 1,115,808 | ||||||
United States Cellular Corp. | 13,600 | 658,240 | ||||||
8,166,992 | ||||||||
Transportation 4.8% | ||||||||
Alaska Air Group, Inc. | 24,300 | 1,717,038 | ||||||
Allegiant Travel Co. | 2,000 | 208,540 | ||||||
AMERCO | 3,200 | 646,176 | ||||||
Arkansas Best Corp. | 61,340 | 1,678,876 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 18,400 | 681,352 | ||||||
Con-way, Inc. | 46,900 | 1,932,280 | ||||||
Copa Holdings S.A., Class A | 6,600 | 986,964 | ||||||
Delta Air Lines, Inc. | 187,500 | 4,946,250 | ||||||
Forward Air Corp. | 13,325 | 539,396 | ||||||
Genesee & Wyoming, Inc., Class A * | 4,765 | 475,738 | ||||||
Hawaiian Holdings, Inc. (a)* | 54,640 | 450,780 | ||||||
Heartland Express, Inc. | 35,965 | 516,457 | ||||||
Hub Group, Inc., Class A * | 26,210 | 962,693 | ||||||
JetBlue Airways Corp. * | 176,500 | 1,251,385 | ||||||
Kansas City Southern | 14,800 | 1,798,496 | ||||||
Kirby Corp. * | 14,900 | 1,318,501 | ||||||
Knight Transportation, Inc. | 40,325 | 684,315 | ||||||
Landstar System, Inc. | 26,270 | 1,452,468 | ||||||
Matson, Inc. | 43,500 | 1,178,415 | ||||||
Old Dominion Freight Line, Inc. * | 19,175 | 899,308 | ||||||
Republic Airways Holdings, Inc. * | 95,600 | 1,126,168 | ||||||
Saia, Inc. * | 17,350 | 564,396 | ||||||
SkyWest, Inc. | 119,900 | 1,803,296 | ||||||
Southwest Airlines Co. | 310,800 | 5,351,976 | ||||||
Swift Transportation Co. * | 36,200 | 788,798 | ||||||
United Continental Holdings, Inc. * | 83,200 | 2,824,640 | ||||||
US Airways Group, Inc. * | 55,200 | 1,212,744 | ||||||
Uti Worldwide, Inc. | 101,300 | 1,539,760 |
See financial notes 15
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Werner Enterprises, Inc. | 48,600 | 1,125,576 | ||||||
40,662,782 | ||||||||
Utilities 3.2% | ||||||||
ALLETE, Inc. | 18,000 | 909,540 | ||||||
American States Water Co. | 13,030 | 371,094 | ||||||
Aqua America, Inc. | 45,375 | 1,142,543 | ||||||
Atlantic Power Corp. (a) | 103,300 | 463,817 | ||||||
Avista Corp. | 40,300 | 1,119,937 | ||||||
Black Hills Corp. | 20,600 | 1,044,832 | ||||||
California Water Service Group | 21,080 | 459,544 | ||||||
Cleco Corp. | 23,200 | 1,075,088 | ||||||
El Paso Electric Co. | 24,390 | 857,796 | ||||||
Hawaiian Electric Industries, Inc. | 56,300 | 1,495,891 | ||||||
IDACORP, Inc. | 22,400 | 1,155,840 | ||||||
ITC Holdings Corp. | 10,300 | 1,036,077 | ||||||
MGE Energy, Inc. | 10,000 | 563,100 | ||||||
New Jersey Resources Corp. | 28,600 | 1,316,458 | ||||||
Northwest Natural Gas Co. | 19,005 | 825,387 | ||||||
NorthWestern Corp. | 23,200 | 1,063,488 | ||||||
Otter Tail Corp. | 25,080 | 748,136 | ||||||
Piedmont Natural Gas Co., Inc. | 42,700 | 1,457,778 | ||||||
PNM Resources, Inc. | 56,000 | 1,339,520 | ||||||
Portland General Electric Co. | 51,300 | 1,472,310 | ||||||
South Jersey Industries, Inc. | 11,640 | 693,162 | ||||||
Southwest Gas Corp. | 28,400 | 1,540,984 | ||||||
The Empire District Electric Co. | 28,710 | 645,688 | ||||||
The Laclede Group, Inc. | 19,140 | 900,920 | ||||||
UIL Holdings Corp. | 21,800 | 839,736 | ||||||
UNS Energy Corp. | 24,500 | 1,212,260 | ||||||
WGL Holdings, Inc. | 36,400 | 1,638,364 | ||||||
27,389,290 | ||||||||
Total Common Stock | ||||||||
(Cost $612,399,768) | 839,594,596 | |||||||
Rights 0.0% of net assets | ||||||||
Consumer Services 0.0% | ||||||||
Caesars Entertainment Corp. (a)(b)* | 94,100 | — | ||||||
Total Rights | ||||||||
(Cost $—) | — | |||||||
Other Investment Company 0.9% of net assets | ||||||||
Money Market Fund 0.9% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (f) | 7,423,228 | 7,423,228 | ||||||
Total Other Investment Company | ||||||||
(Cost $7,423,228) | 7,423,228 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.1% of net assets | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/19/13 (d)(e) | 715,000 | 714,995 | ||||||
Total Short-Term Investment | ||||||||
(Cost $714,995) | 714,995 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 2.3% of net assets | ||||||||
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (f) | 19,735,329 | 19,735,329 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $19,735,329) | 19,735,329 | |||||||
End of Collateral Invested for Securities on Loan |
At 10/31/13 tax basis cost of the fund’s investments was $624,073,694 and the unrealized appreciation and depreciation were $235,087,813 and ($11,428,688), respectively, with a net unrealized appreciation of $223,659,125.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $19,952,900. | |
(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 $0 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/20/13 | 75 | 8,233,500 | 224,557 |
16 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .2% | Common Stock | 481,759,721 | 627,407,931 | ||||||||
0 | .4% | Preferred Stock | 1,388,645 | 2,631,669 | ||||||||
0 | .0% | Rights | 176,884 | 185,237 | ||||||||
0 | .0% | Other Investment Company | 4,656 | 6,588 | ||||||||
2 | .1% | Short-Term Investments | 13,393,244 | 13,393,244 | ||||||||
99 | .7% | Total Investments | 496,723,150 | 643,624,669 | ||||||||
0 | .7% | Collateral Invested for Securities on Loan | 4,663,448 | 4,663,448 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (2,493,360 | ) | ||||||||
100 | .0% | Total Net Assets | 645,794,757 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.2% of net assets | ||||||||
Australia 4.6% | ||||||||
Banks 1.3% | ||||||||
Australia & New Zealand Banking Group Ltd. | 61,316 | 1,962,134 | ||||||
Commonwealth Bank of Australia | 29,112 | 2,096,137 | ||||||
National Australia Bank Ltd. | 63,645 | 2,127,069 | ||||||
Westpac Banking Corp. | 60,146 | 1,952,769 | ||||||
8,138,109 | ||||||||
Capital Goods 0.1% | ||||||||
CSR Ltd. | 65,468 | 154,566 | ||||||
Leighton Holdings Ltd. | 9,023 | 152,857 | ||||||
UGL Ltd. | 13,591 | 94,518 | ||||||
401,941 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Brambles Ltd. | 58,436 | 512,994 | ||||||
Downer EDI Ltd. | 36,336 | 168,817 | ||||||
681,811 | ||||||||
Consumer Services 0.1% | ||||||||
Crown Ltd. | 12,932 | 206,166 | ||||||
TABCORP Holdings Ltd. | 104,704 | 356,127 | ||||||
Tatts Group Ltd. | 69,172 | 205,391 | ||||||
767,684 | ||||||||
Diversified Financials 0.1% | ||||||||
BGP Holdings plc (a)(b) | 453,854 | — | ||||||
Macquarie Group Ltd. | 11,006 | 529,384 | ||||||
529,384 | ||||||||
Energy 0.3% | ||||||||
Caltex Australia Ltd. | 15,167 | 265,015 | ||||||
Origin Energy Ltd. | 30,060 | 415,563 | ||||||
Santos Ltd. | 19,891 | 284,680 | ||||||
Woodside Petroleum Ltd. | 13,427 | 492,233 | ||||||
WorleyParsons Ltd. | 6,946 | 144,643 | ||||||
1,602,134 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Metcash Ltd. | 78,654 | 248,910 | ||||||
Wesfarmers Ltd. * | 42,283 | 1,715,800 | ||||||
Woolworths Ltd. | 46,292 | 1,526,545 | ||||||
3,491,255 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca-Cola Amatil Ltd. | 15,119 | 184,243 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Sonic Healthcare Ltd. | 10,872 | 165,963 | ||||||
Insurance 0.4% | ||||||||
AMP Ltd. | 81,380 | 364,659 | ||||||
Insurance Australia Group Ltd. | 55,304 | 322,970 | ||||||
QBE Insurance Group Ltd. | 55,296 | 774,381 | ||||||
Suncorp Group Ltd. | 67,236 | 847,805 | ||||||
2,309,815 | ||||||||
Materials 1.1% | ||||||||
Amcor Ltd. | 36,628 | 375,231 | ||||||
Arrium Ltd. | 306,732 | 400,766 | ||||||
BHP Billiton Ltd. | 111,359 | 3,936,917 | ||||||
BlueScope Steel Ltd. * | 86,990 | 410,321 | ||||||
Boral Ltd. | 47,678 | 222,471 | ||||||
Incitec Pivot Ltd. | 59,773 | 150,384 | ||||||
Newcrest Mining Ltd. | 15,839 | 153,586 | ||||||
Orica Ltd. | 15,275 | 304,099 | ||||||
Rio Tinto Ltd. | 18,185 | 1,094,231 | ||||||
Sims Metal Management Ltd. * | 26,583 | 251,801 | ||||||
7,299,807 | ||||||||
Media 0.0% | ||||||||
Fairfax Media Ltd. | 279,941 | 159,839 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
CSL Ltd. | 6,665 | 438,123 | ||||||
Real Estate 0.2% | ||||||||
Lend Lease Group | 25,742 | 277,599 | ||||||
Mirvac Group | 87,621 | 144,045 | ||||||
Stockland | 81,797 | 310,021 | ||||||
Westfield Group | 56,584 | 579,052 | ||||||
1,310,717 | ||||||||
Telecommunication Services 0.2% | ||||||||
Telstra Corp., Ltd. | 200,314 | 980,191 | ||||||
Transportation 0.1% | ||||||||
Asciano Ltd. | 34,469 | 189,299 | ||||||
Qantas Airways Ltd. * | 151,620 | 178,254 | ||||||
Sydney Airport | 39,034 | 154,591 | ||||||
Toll Holdings Ltd. | 45,356 | 247,091 | ||||||
769,235 |
See financial notes 17
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 0.0% | ||||||||
AGL Energy Ltd. | 15,880 | 234,589 | ||||||
29,464,840 | ||||||||
Austria 0.4% | ||||||||
Banks 0.1% | ||||||||
Erste Group Bank AG | 22,666 | 795,798 | ||||||
Capital Goods 0.1% | ||||||||
Andritz AG | 2,134 | 131,416 | ||||||
Wienerberger AG | 14,534 | 252,106 | ||||||
383,522 | ||||||||
Energy 0.1% | ||||||||
OMV AG | 13,693 | 653,192 | ||||||
Materials 0.1% | ||||||||
Voestalpine AG | 10,567 | 498,504 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG | 33,732 | 277,304 | ||||||
2,608,320 | ||||||||
Belgium 0.9% | ||||||||
Banks 0.1% | ||||||||
KBC GROEP N.V. | 10,187 | 555,003 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Colruyt S.A. | 3,097 | 172,774 | ||||||
Delhaize Group S.A. | 18,194 | 1,161,949 | ||||||
1,334,723 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Anheuser-Busch InBev N.V. | 14,068 | 1,458,339 | ||||||
Insurance 0.1% | ||||||||
Ageas | 13,974 | 593,815 | ||||||
Materials 0.2% | ||||||||
Bekaert N.V. | 6,394 | 267,735 | ||||||
Solvay S.A. | 2,576 | 402,791 | ||||||
Umicore S.A. | 7,658 | 364,666 | ||||||
1,035,192 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
UCB S.A. | 3,239 | 212,614 | ||||||
Telecommunication Services 0.1% | ||||||||
Belgacom S.A. | 14,319 | 391,790 | ||||||
5,581,476 | ||||||||
Canada 5.8% | ||||||||
Automobiles & Components 0.2% | ||||||||
Magna International, Inc. | 15,334 | 1,298,754 | ||||||
Banks 1.2% | ||||||||
Bank of Montreal (c) | 16,849 | 1,173,524 | ||||||
Bank of Nova Scotia | 25,234 | 1,534,152 | ||||||
Canadian Imperial Bank of Commerce | 10,161 | 864,414 | ||||||
National Bank of Canada | 4,151 | 360,219 | ||||||
Royal Bank of Canada | 33,974 | 2,281,551 | ||||||
The Toronto-Dominion Bank | 18,783 | 1,722,923 | ||||||
7,936,783 | ||||||||
Capital Goods 0.1% | ||||||||
Bombardier, Inc., Class B | 76,768 | 348,996 | ||||||
Finning International, Inc. | 8,080 | 186,297 | ||||||
SNC-Lavalin Group, Inc. | 3,800 | 159,668 | ||||||
694,961 | ||||||||
Consumer Services 0.0% | ||||||||
Tim Hortons, Inc. | 3,354 | 200,214 | ||||||
Diversified Financials 0.1% | ||||||||
IGM Financial, Inc. | 3,861 | 186,042 | ||||||
Onex Corp. | 4,543 | 240,036 | ||||||
426,078 | ||||||||
Energy 1.7% | ||||||||
ARC Resources Ltd. | 7,942 | 210,842 | ||||||
Baytex Energy Corp. (c) | 3,333 | 139,119 | ||||||
Bonavista Energy Corp. (c) | 8,800 | 101,534 | ||||||
Cameco Corp. | 9,596 | 182,137 | ||||||
Canadian Natural Resources Ltd. | 34,890 | 1,107,284 | ||||||
Canadian Oil Sands Ltd. | 28,894 | 563,110 | ||||||
Cenovus Energy, Inc. | 27,277 | 810,475 | ||||||
Crescent Point Energy Corp. | 4,876 | 189,353 | ||||||
Enbridge, Inc. | 13,927 | 603,750 | ||||||
Encana Corp. | 105,616 | 1,892,204 | ||||||
Enerplus Corp. | 16,282 | 280,932 | ||||||
Husky Energy, Inc. | 15,465 | 439,632 | ||||||
Imperial Oil Ltd. | 12,022 | 524,972 | ||||||
Pengrowth Energy Corp. | 44,852 | 288,216 | ||||||
Penn West Petroleum Ltd. | 44,955 | 501,871 | ||||||
Suncor Energy, Inc. | 45,047 | 1,637,012 | ||||||
Talisman Energy, Inc. | 67,075 | 836,307 | ||||||
TransCanada Corp. | 20,089 | 905,368 | ||||||
11,214,118 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Alimentation Couche-Tard, Inc., Class B | 6,731 | 455,899 | ||||||
Empire Co., Ltd, Class A | 2,925 | 215,395 | ||||||
George Weston Ltd. | 3,705 | 301,830 | ||||||
Loblaw Cos., Ltd. | 6,782 | 310,203 | ||||||
Metro, Inc. | 6,209 | 388,446 | ||||||
Shoppers Drug Mart Corp. | 9,644 | 563,480 | ||||||
2,235,253 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Saputo, Inc. | 3,600 | 178,127 | ||||||
Insurance 0.5% | ||||||||
Fairfax Financial Holdings Ltd. | 756 | 329,909 | ||||||
Great-West Lifeco, Inc. | 7,420 | 229,507 | ||||||
Intact Financial Corp. | 3,445 | 214,864 | ||||||
Manulife Financial Corp. | 59,189 | 1,048,502 | ||||||
Power Corp. of Canada | 20,835 | 613,870 | ||||||
Power Financial Corp. | 9,706 | 319,391 | ||||||
Sun Life Financial, Inc. | 17,873 | 602,024 | ||||||
3,358,067 | ||||||||
Materials 0.5% | ||||||||
Agrium, Inc. | 4,163 | 355,351 | ||||||
Barrick Gold Corp. | 37,023 | 720,114 | ||||||
First Quantum Minerals Ltd. | 10,986 | 208,414 | ||||||
Goldcorp, Inc. | 11,214 | 285,661 | ||||||
Kinross Gold Corp. | 31,236 | 158,779 | ||||||
Potash Corp. of Saskatchewan, Inc. | 23,416 | 727,644 |
18 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Teck Resources Ltd., Class B | 19,824 | 530,465 | ||||||
Yamana Gold, Inc. | 8,300 | 82,311 | ||||||
3,068,739 | ||||||||
Media 0.0% | ||||||||
Shaw Communications, Inc., Class B | 9,394 | 224,703 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Valeant Pharmaceuticals International, Inc. * | 2,400 | 253,546 | ||||||
Real Estate 0.1% | ||||||||
Brookfield Asset Management, Inc., Class A | 18,919 | 749,030 | ||||||
Retailing 0.1% | ||||||||
Canadian Tire Corp., Ltd., Class A | 3,519 | 326,638 | ||||||
RONA, Inc. | 18,007 | 211,044 | ||||||
537,682 | ||||||||
Software & Services 0.1% | ||||||||
CGI Group, Inc., Class A * | 8,217 | 275,673 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Blackberry Ltd. (c)* | 59,810 | 472,101 | ||||||
Celestica, Inc. * | 21,212 | 232,943 | ||||||
705,044 | ||||||||
Telecommunication Services 0.3% | ||||||||
BCE, Inc. | 16,864 | 733,822 | ||||||
Rogers Communications, Inc., Class B | 13,732 | 623,218 | ||||||
Telus Corp. | 13,518 | 472,187 | ||||||
1,829,227 | ||||||||
Transportation 0.2% | ||||||||
Canadian National Railway Co. | 10,271 | 1,128,416 | ||||||
Canadian Pacific Railway Ltd. | 2,473 | 353,499 | ||||||
1,481,915 | ||||||||
Utilities 0.1% | ||||||||
Canadian Utilities Ltd., Class A | 3,300 | 121,252 | ||||||
Fortis, Inc. | 6,772 | 210,632 | ||||||
TransAlta Corp. | 16,558 | 222,806 | ||||||
554,690 | ||||||||
37,222,604 | ||||||||
Denmark 0.8% | ||||||||
Banks 0.1% | ||||||||
Danske Bank A/S * | 28,086 | 656,252 | ||||||
Capital Goods 0.1% | ||||||||
FLSmidth & Co. A/S | 2,593 | 129,415 | ||||||
Vestas Wind Systems A/S * | 23,391 | 626,805 | ||||||
756,220 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Carlsberg A/S, Class B | 3,698 | 369,378 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Novo Nordisk A/S, Class B | 5,689 | 947,518 | ||||||
Telecommunication Services 0.1% | ||||||||
TDC A/S | 48,632 | 439,111 | ||||||
Transportation 0.3% | ||||||||
AP Moller - Maersk A/S, Series A | 67 | 605,001 | ||||||
AP Moller - Maersk A/S, Series B | 124 | 1,199,696 | ||||||
DSV A/S | 5,888 | 172,260 | ||||||
1,976,957 | ||||||||
5,145,436 | ||||||||
Finland 1.6% | ||||||||
Capital Goods 0.1% | ||||||||
Kone Oyj, B Shares | 2,672 | 235,569 | ||||||
Metso Oyj | 8,172 | 321,651 | ||||||
Wartsila Oyj Abp | 5,457 | 242,135 | ||||||
799,355 | ||||||||
Energy 0.1% | ||||||||
Neste Oil Oyj | 16,338 | 323,956 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Kesko Oyj, B Shares | 12,931 | 429,698 | ||||||
Insurance 0.1% | ||||||||
Sampo Oyj, A Shares | 13,303 | 629,241 | ||||||
Materials 0.2% | ||||||||
Stora Enso Oyj, R Shares | 56,406 | 523,779 | ||||||
UPM-Kymmene Oyj | 57,507 | 913,052 | ||||||
1,436,831 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 6,049 | 162,574 | ||||||
Technology Hardware & Equipment 0.9% | ||||||||
Nokia Oyj * | 770,458 | 5,856,080 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 8,842 | 221,525 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 24,146 | 538,624 | ||||||
10,397,884 | ||||||||
France 11.5% | ||||||||
Automobiles & Components 0.5% | ||||||||
Peugeot S.A. * | 121,365 | 1,596,553 | ||||||
Renault S.A. | 15,277 | 1,332,922 | ||||||
Valeo S.A. | 4,908 | 485,545 | ||||||
3,415,020 | ||||||||
Banks 1.2% | ||||||||
BNP Paribas S.A. | 54,942 | 4,053,244 | ||||||
Credit Agricole S.A. * | 83,527 | 1,004,290 | ||||||
Societe Generale S.A. | 42,755 | 2,415,209 | ||||||
7,472,743 | ||||||||
Capital Goods 1.7% | ||||||||
Alstom S.A. | 11,712 | 434,760 | ||||||
Bouygues S.A. | 26,043 | 1,016,115 | ||||||
Compagnie de Saint-Gobain | 52,646 | 2,763,391 | ||||||
Eiffage S.A. | 7,264 | 430,488 | ||||||
European Aeronautic Defence & Space Co., N.V. | 8,765 | 600,617 | ||||||
Legrand S.A. | 7,167 | 406,194 | ||||||
Nexans S.A. (c) | 3,737 | 166,151 | ||||||
Rexel S.A. | 9,935 | 248,876 | ||||||
Safran S.A. | 6,446 | 410,984 | ||||||
Schneider Electric S.A. | 18,833 | 1,584,753 |
See financial notes 19
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Thales S.A. | 4,316 | 264,337 | ||||||
Vallourec S.A. | 10,687 | 636,108 | ||||||
Vinci S.A. | 33,094 | 2,117,559 | ||||||
11,080,333 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Christian Dior S.A. | 1,788 | 339,249 | ||||||
Kering | 2,652 | 601,024 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 5,691 | 1,092,646 | ||||||
2,032,919 | ||||||||
Consumer Services 0.2% | ||||||||
Accor S.A. | 13,527 | 604,602 | ||||||
Sodexo | 3,333 | 323,519 | ||||||
928,121 | ||||||||
Diversified Financials 0.0% | ||||||||
Wendel S.A. | 1,253 | 174,645 | ||||||
Energy 2.1% | ||||||||
CGG S.A. * | 8,861 | 194,764 | ||||||
Technip S.A. | 3,048 | 319,243 | ||||||
Total S.A. | 215,345 | 13,212,048 | ||||||
13,726,055 | ||||||||
Food & Staples Retailing 0.6% | ||||||||
Carrefour S.A. | 73,991 | 2,700,860 | ||||||
Casino Guichard Perrachon S.A. | 4,813 | 541,005 | ||||||
Rallye S.A. | 5,933 | 252,484 | ||||||
3,494,349 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Danone | 16,468 | 1,219,688 | ||||||
Pernod-Ricard S.A. | 4,319 | 518,749 | ||||||
1,738,437 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Essilor International S.A. | 3,137 | 336,178 | ||||||
Household & Personal Products 0.1% | ||||||||
L’Oreal S.A. | 4,407 | 752,481 | ||||||
Insurance 0.5% | ||||||||
AXA S.A. | 114,536 | 2,853,714 | ||||||
CNP Assurances | 11,494 | 202,479 | ||||||
SCOR SE | 7,341 | 259,107 | ||||||
3,315,300 | ||||||||
Materials 0.4% | ||||||||
Air Liquide S.A. | 9,143 | 1,242,659 | ||||||
Arkema S.A. | 2,609 | 295,170 | ||||||
Lafarge S.A. | 13,008 | 897,492 | ||||||
2,435,321 | ||||||||
Media 0.1% | ||||||||
Eutelsat Communications S.A. | 4,142 | 131,003 | ||||||
Publicis Groupe S.A. | 3,360 | 279,415 | ||||||
Solocal Group * | 46,599 | 108,556 | ||||||
518,974 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Sanofi | 43,153 | 4,601,108 | ||||||
Software & Services 0.1% | ||||||||
AtoS | 1,853 | 157,950 | ||||||
Cap Gemini S.A. | 9,450 | 619,712 | ||||||
777,662 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Alcatel-Lucent * | 212,133 | 812,693 | ||||||
Telecommunication Services 1.4% | ||||||||
Orange S.A. | 447,538 | 6,151,891 | ||||||
Vivendi S.A. | 123,697 | 3,131,973 | ||||||
9,283,864 | ||||||||
Transportation 0.1% | ||||||||
Air France-KLM * | 61,582 | 642,249 | ||||||
Utilities 1.0% | ||||||||
EDF S.A. | 30,170 | 1,055,886 | ||||||
GDF Suez | 141,737 | 3,512,776 | ||||||
Suez Environnement Co. | 28,649 | 499,561 | ||||||
Veolia Environnement S.A. | 84,150 | 1,443,651 | ||||||
6,511,874 | ||||||||
74,050,326 | ||||||||
Germany 8.9% | ||||||||
Automobiles & Components 1.3% | ||||||||
Bayerische Motoren Werke AG | 15,723 | 1,779,504 | ||||||
Continental AG | 3,512 | 642,228 | ||||||
Daimler AG - Reg’d | 67,695 | 5,542,513 | ||||||
Volkswagen AG | 1,149 | 280,983 | ||||||
8,245,228 | ||||||||
Banks 0.1% | ||||||||
Commerzbank AG * | 27,822 | 355,833 | ||||||
Capital Goods 0.9% | ||||||||
Brenntag AG | 1,886 | 319,129 | ||||||
GEA Group AG | 6,126 | 266,253 | ||||||
Hochtief AG | 2,356 | 213,088 | ||||||
Kloeckner & Co., SE * | 14,483 | 204,289 | ||||||
MAN SE | 1,536 | 185,088 | ||||||
MTU Aero Engines Holding AG | 1,549 | 154,484 | ||||||
Rheinmetall AG | 3,039 | 187,882 | ||||||
Siemens AG - Reg’d | 35,626 | 4,552,723 | ||||||
6,082,936 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Bilfinger SE | 2,191 | 243,136 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Adidas AG | 6,148 | 700,537 | ||||||
Consumer Services 0.0% | ||||||||
TUI AG * | 20,265 | 268,476 | ||||||
Diversified Financials 0.4% | ||||||||
Deutsche Bank AG - Reg’d | 45,155 | 2,182,301 | ||||||
Deutsche Boerse AG | 6,264 | 471,222 | ||||||
2,653,523 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Metro AG | 25,527 | 1,196,858 | ||||||
Health Care Equipment & Services 0.3% | ||||||||
Celesio AG | 37,654 | 1,170,660 | ||||||
Fresenius Medical Care AG & Co KGaA | 5,860 | 387,265 | ||||||
Fresenius SE & Co KGaA | 4,234 | 549,630 | ||||||
2,107,555 | ||||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 1,998 | 190,516 |
20 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
�� | Number | Value | ||||||
Security | of Shares | ($) | ||||||
Henkel AG & Co. KGaA | 2,969 | 273,826 | ||||||
464,342 | ||||||||
Insurance 0.9% | ||||||||
Allianz SE - Reg’d | 23,357 | 3,921,694 | ||||||
Hannover Rueckversicherung SE - Reg’d | 2,407 | 192,636 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 8,453 | 1,763,568 | ||||||
5,877,898 | ||||||||
Materials 1.4% | ||||||||
Aurubis AG | 3,711 | 233,811 | ||||||
BASF SE | 48,696 | 5,055,351 | ||||||
HeidelbergCement AG | 8,488 | 668,342 | ||||||
K&S AG - Reg’d (c) | 9,587 | 243,602 | ||||||
Lanxess AG | 3,886 | 272,921 | ||||||
Linde AG | 4,931 | 936,029 | ||||||
Salzgitter AG | 7,362 | 323,997 | ||||||
ThyssenKrupp AG * | 50,433 | 1,286,714 | ||||||
9,020,767 | ||||||||
Media 0.0% | ||||||||
Kabel Deutschland Holding AG | 1,326 | 166,468 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.5% | ||||||||
Bayer AG - Reg’d | 25,513 | 3,164,944 | ||||||
Merck KGaA | 1,429 | 237,715 | ||||||
3,402,659 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Infineon Technologies AG | 33,265 | 321,817 | ||||||
Software & Services 0.2% | ||||||||
SAP AG | 13,367 | 1,045,996 | ||||||
Telecommunication Services 0.9% | ||||||||
Deutsche Telekom AG - Reg’d | 346,875 | 5,451,039 | ||||||
Freenet AG * | 5,575 | 144,809 | ||||||
5,595,848 | ||||||||
Transportation 0.4% | ||||||||
Deutsche Lufthansa AG - Reg’d * | 25,572 | 494,384 | ||||||
Deutsche Post AG - Reg’d | 57,313 | 1,935,539 | ||||||
2,429,923 | ||||||||
Utilities 1.1% | ||||||||
E.ON SE AG | 260,794 | 4,753,881 | ||||||
RWE AG | 68,377 | 2,519,151 | ||||||
7,273,032 | ||||||||
57,452,832 | ||||||||
Hong Kong 0.8% | ||||||||
Banks 0.1% | ||||||||
Hang Seng Bank Ltd. | 18,800 | 313,353 | ||||||
Capital Goods 0.3% | ||||||||
Hutchison Whampoa Ltd. | 74,000 | 922,089 | ||||||
Jardine Matheson Holdings Ltd. | 6,000 | 326,931 | ||||||
Jardine Strategic Holdings Ltd. | 3,500 | 118,518 | ||||||
Noble Group Ltd. | 417,879 | 345,259 | ||||||
1,712,797 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Li & Fung Ltd. | 216,000 | 305,372 | ||||||
Diversified Financials 0.0% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 8,100 | 130,670 | ||||||
Insurance 0.1% | ||||||||
AIA Group Ltd. | 101,800 | 516,923 | ||||||
Real Estate 0.1% | ||||||||
Cheung Kong (Holdings) Ltd. | 18,000 | 281,106 | ||||||
Sun Hung Kai Properties Ltd. | 8,000 | 104,790 | ||||||
Swire Pacific Ltd., Class A | 23,500 | 271,601 | ||||||
The Link REIT | 26,500 | 133,312 | ||||||
Wharf Holdings Ltd. | 19,000 | 159,890 | ||||||
950,699 | ||||||||
Retailing 0.1% | ||||||||
Esprit Holdings Ltd. | 271,284 | 498,104 | ||||||
Telecommunication Services 0.0% | ||||||||
PCCW Ltd. | 300,000 | 135,431 | ||||||
Utilities 0.1% | ||||||||
CLP Holdings Ltd. | 62,000 | 498,924 | ||||||
Hong Kong & China Gas Co., Ltd. | 61,214 | 142,995 | ||||||
Power Assets Holdings Ltd. | 20,500 | 170,790 | ||||||
812,709 | ||||||||
5,376,058 | ||||||||
Ireland 0.7% | ||||||||
Banks 0.1% | ||||||||
Bank of Ireland * | 1,690,069 | 617,694 | ||||||
Capital Goods 0.1% | ||||||||
DCC plc | 5,924 | 265,864 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Experian plc | 18,236 | 371,259 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Kerry Group plc, Class A | 3,372 | 215,937 | ||||||
Materials 0.3% | ||||||||
CRH plc | 57,050 | 1,388,230 | ||||||
Smurfit Kappa Group plc | 16,658 | 403,232 | ||||||
1,791,462 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Shire plc | 5,546 | 245,912 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Seagate Technology plc | 16,868 | 821,134 | ||||||
4,329,262 | ||||||||
Israel 0.3% | ||||||||
Banks 0.0% | ||||||||
Bank Leumi Le-Israel B.M. * | 49,915 | 189,999 | ||||||
Materials 0.0% | ||||||||
Israel Chemicals Ltd. | 19,196 | 158,699 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Teva Pharmaceutical Industries Ltd. | 27,758 | 1,031,443 |
See financial notes 21
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Telecommunication Services 0.1% | ||||||||
Bezeq Israeli Telecommunication Corp., Ltd. | 214,249 | 372,513 | ||||||
1,752,654 | ||||||||
Italy 4.5% | ||||||||
Automobiles & Components 0.2% | ||||||||
Fiat S.p.A. * | 146,199 | 1,147,184 | ||||||
Pirelli & C. S.p.A | 11,371 | 159,957 | ||||||
1,307,141 | ||||||||
Banks 1.5% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. (c)* | 2,107,344 | 664,395 | ||||||
Banca Popolare dell’Emilia Romagna Scrl * | 27,454 | 263,759 | ||||||
Banca Popolare di Milano Scarl * | 277,034 | 185,059 | ||||||
Banco Popolare Scarl * | 266,888 | 530,197 | ||||||
Intesa Sanpaolo S.p.A. | 1,248,322 | 3,096,928 | ||||||
Intesa Sanpaolo S.p.A. - RSP | 82,866 | 166,540 | ||||||
UniCredit S.p.A. | 544,579 | 4,087,929 | ||||||
Unione di Banche Italiane S.C.P.A. | 81,430 | 562,798 | ||||||
9,557,605 | ||||||||
Capital Goods 0.2% | ||||||||
CNH Industrial N.V. * | 34,584 | 408,990 | ||||||
Finmeccanica S.p.A. * | 79,674 | 583,852 | ||||||
Prysmian S.p.A. | 8,932 | 218,184 | ||||||
1,211,026 | ||||||||
Diversified Financials 0.1% | ||||||||
Exor S.p.A. | 6,543 | 259,370 | ||||||
Mediobanca S.p.A. | 32,105 | 292,523 | ||||||
551,893 | ||||||||
Energy 1.0% | ||||||||
Eni S.p.A. | 241,596 | 6,133,379 | ||||||
Saipem S.p.A. | 11,424 | 267,243 | ||||||
6,400,622 | ||||||||
Insurance 0.2% | ||||||||
Assicurazioni Generali S.p.A. | 53,596 | 1,253,021 | ||||||
Materials 0.0% | ||||||||
Italcementi S.p.A. | 19,015 | 169,110 | ||||||
Media 0.1% | ||||||||
Mediaset S.p.A. * | 133,978 | 669,044 | ||||||
Telecommunication Services 0.5% | ||||||||
Telecom Italia S.p.A. | 2,241,217 | 2,186,412 | ||||||
Telecom Italia S.p.A. - RSP | 1,297,775 | 1,015,054 | ||||||
3,201,466 | ||||||||
Transportation 0.0% | ||||||||
Atlantia S.p.A. | 14,394 | 315,475 | ||||||
Utilities 0.7% | ||||||||
A2A S.p.A. | 208,177 | 234,233 | ||||||
Enel S.p.A. | 844,247 | 3,724,755 | ||||||
Snam S.p.A. | 49,215 | 253,581 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 43,018 | 212,956 | ||||||
4,425,525 | ||||||||
29,061,928 | ||||||||
Japan 19.2% | ||||||||
Automobiles & Components 2.6% | ||||||||
Aisin Seiki Co., Ltd. | 12,900 | 524,055 | ||||||
Bridgestone Corp. | 32,100 | 1,100,474 | ||||||
Daihatsu Motor Co., Ltd. | 10,000 | 194,162 | ||||||
Denso Corp. | 22,500 | 1,081,540 | ||||||
Fuji Heavy Industries Ltd. | 17,000 | 464,806 | ||||||
Honda Motor Co., Ltd. | 79,600 | 3,178,657 | ||||||
Isuzu Motors Ltd. | 40,000 | 249,103 | ||||||
Mazda Motor Corp. * | 144,000 | 648,217 | ||||||
NHK Spring Co., Ltd. | 14,900 | 155,970 | ||||||
Nissan Motors Co., Ltd. | 144,000 | 1,445,941 | ||||||
Stanley Electric Co., Ltd. | 8,200 | 190,740 | ||||||
Suzuki Motor Corp. | 23,800 | 598,460 | ||||||
Toyota Industries Corp. | 9,300 | 410,223 | ||||||
Toyota Motor Corp. | 96,600 | 6,263,367 | ||||||
Yamaha Motor Co., Ltd. | 19,000 | 291,051 | ||||||
16,796,766 | ||||||||
Banks 1.0% | ||||||||
Mitsubishi UFJ Financial Group, Inc. | 364,334 | 2,320,175 | ||||||
Mizuho Financial Group, Inc. | 596,716 | 1,252,544 | ||||||
Resona Holdings, Inc. | 62,558 | 325,410 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 40,910 | 1,977,420 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 37,000 | 182,746 | ||||||
The Bank of Yokohama Ltd. | 32,000 | 176,457 | ||||||
6,234,752 | ||||||||
Capital Goods 2.8% | ||||||||
Asahi Glass Co., Ltd. | 90,000 | 555,842 | ||||||
Daikin Industries Ltd. | 8,900 | 512,047 | ||||||
Fanuc Corp. | 3,100 | 497,264 | ||||||
Fujikura Ltd. | 41,000 | 187,090 | ||||||
Furukawa Electric Co., Ltd. | 76,000 | 176,151 | ||||||
Hanwa Co., Ltd. | 42,000 | 195,413 | ||||||
IHI Corp. | 63,000 | 266,761 | ||||||
Itochu Corp. | 64,100 | 770,747 | ||||||
JGC Corp. | 7,000 | 267,846 | ||||||
JTEKT Corp. | 16,400 | 210,548 | ||||||
Kajima Corp. | 62,000 | 263,147 | ||||||
Kawasaki Heavy Industries Ltd. | 76,000 | 296,972 | ||||||
Komatsu Ltd. | 32,700 | 717,450 | ||||||
Kubota Corp. | 30,000 | 444,199 | ||||||
LIXIL Group Corp. | 15,100 | 354,437 | ||||||
Makita Corp. | 4,200 | 212,391 | ||||||
Marubeni Corp. | 85,000 | 665,503 | ||||||
Mitsubishi Corp. | 83,800 | 1,695,362 | ||||||
Mitsubishi Electric Corp. | 99,000 | 1,088,204 | ||||||
Mitsubishi Heavy Industries Ltd. | 139,000 | 883,382 | ||||||
Mitsui & Co., Ltd. | 97,700 | 1,395,735 | ||||||
Mitsui Engineering & Shipbuilding Co., Ltd. | 88,000 | 172,742 | ||||||
Nagase & Co., Ltd. | 12,000 | 149,480 | ||||||
Nidec Corp. | 3,600 | 350,828 | ||||||
Nippon Sheet Glass Co., Ltd. * | 164,000 | 212,701 | ||||||
NSK Ltd. | 21,000 | 224,329 | ||||||
Obayashi Corp. | 36,000 | 230,656 | ||||||
Shimizu Corp. | 58,000 | 297,449 | ||||||
SMC Corp. | 1,200 | 279,382 |
22 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sojitz Corp. | 314,100 | 609,917 | ||||||
Sumitomo Corp. | 65,900 | 857,576 | ||||||
Sumitomo Electric Industries Ltd. | 58,200 | 872,088 | ||||||
Sumitomo Heavy Industries Ltd. | 46,000 | 203,593 | ||||||
Taisei Corp. | 72,000 | 369,380 | ||||||
Toshiba Corp. | 242,000 | 1,028,564 | ||||||
Toyota Tsusho Corp. | 20,700 | 574,984 | ||||||
18,090,160 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
Dai Nippon Printing Co., Ltd. | 65,000 | 682,888 | ||||||
Secom Co., Ltd. | 8,000 | 481,939 | ||||||
Toppan Printing Co., Ltd. | 61,000 | 481,800 | ||||||
1,646,627 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Namco Bandai Holdings, Inc. | 12,300 | 231,860 | ||||||
Nikon Corp. | 12,700 | 234,775 | ||||||
Panasonic Corp. | 266,750 | 2,734,017 | ||||||
Sega Sammy Holdings, Inc. | 8,500 | 217,902 | ||||||
Sekisui Chemical Co., Ltd. | 24,000 | 278,844 | ||||||
Sekisui House Ltd. | 37,000 | 531,092 | ||||||
Sharp Corp. * | 181,000 | 535,416 | ||||||
Shimano, Inc. | 1,800 | 157,543 | ||||||
Sony Corp. | 88,800 | 1,549,088 | ||||||
Yamaha Corp. | 12,700 | 189,617 | ||||||
6,660,154 | ||||||||
Consumer Services 0.0% | ||||||||
Benesse Holdings, Inc. | 3,400 | 126,725 | ||||||
Oriental Land Co., Ltd. | 1,000 | 160,127 | ||||||
286,852 | ||||||||
Diversified Financials 0.2% | ||||||||
Credit Saison Co., Ltd. | 7,300 | 199,804 | ||||||
Nomura Holdings, Inc. | 39,100 | 288,833 | ||||||
ORIX Corp. | 30,900 | 535,222 | ||||||
1,023,859 | ||||||||
Energy 0.6% | ||||||||
Cosmo Oil Co., Ltd. * | 132,000 | 232,427 | ||||||
Idemitsu Kosan Co., Ltd. | 5,200 | 435,309 | ||||||
Inpex Corp. | 56,500 | 652,686 | ||||||
JX Holdings, Inc. | 380,400 | 1,880,951 | ||||||
Showa Shell Sekiyu K.K. | 26,100 | 280,598 | ||||||
TonenGeneral Sekiyu K.K. | 30,000 | 278,683 | ||||||
3,760,654 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Aeon Co., Ltd. | 68,100 | 929,321 | ||||||
Lawson, Inc. | 2,200 | 176,426 | ||||||
Seven & i Holdings Co., Ltd. | 50,200 | 1,857,834 | ||||||
Uny Group Holdings Co., Ltd. | 26,400 | 166,592 | ||||||
3,130,173 | ||||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Ajinomoto Co., Inc. | 31,000 | 433,784 | ||||||
Asahi Group Holdings Ltd. | 16,900 | 457,052 | ||||||
Coca-Cola West Co., Ltd. | 7,700 | 156,179 | ||||||
Japan Tobacco, Inc. | 22,400 | 810,515 | ||||||
Kirin Holdings Co., Ltd. | 47,000 | 686,928 | ||||||
Meiji Holdings Co., Ltd. | 6,000 | 335,410 | ||||||
Nippon Meat Packers, Inc. | 16,000 | 234,260 | ||||||
Nisshin Seifun Group, Inc. | 12,100 | 131,181 | ||||||
Toyo Suisan Kaisha Ltd. | 5,000 | 159,015 | ||||||
Yamazaki Baking Co., Ltd. | 12,000 | 122,172 | ||||||
3,526,496 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Alfresa Holdings Corp. | 4,600 | 251,419 | ||||||
Medipal Holdings Corp. | 20,200 | 272,375 | ||||||
Olympus Corp. * | 8,200 | 262,329 | ||||||
Suzuken Co., Ltd. | 7,900 | 285,267 | ||||||
Terumo Corp. | 4,500 | 217,938 | ||||||
1,289,328 | ||||||||
Household & Personal Products 0.2% | ||||||||
Kao Corp. | 22,800 | 759,321 | ||||||
Shiseido Co., Ltd. | 18,600 | 318,190 | ||||||
1,077,511 | ||||||||
Insurance 0.3% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 13,990 | 361,745 | ||||||
NKSJ Holdings, Inc. | 13,800 | 357,215 | ||||||
T&D Holdings, Inc. | 12,250 | 147,070 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 22,600 | 322,633 | ||||||
Tokio Marine Holdings, Inc. | 18,800 | 616,348 | ||||||
1,805,011 | ||||||||
Materials 1.6% | ||||||||
Nippon Steel & Sumitomo Metal Corp. | 459,000 | 1,514,953 | ||||||
Asahi Kasei Corp. | 81,000 | 616,459 | ||||||
Denki Kagaku Kogyo K.K. | 40,000 | 167,749 | ||||||
DIC Corp. | 67,000 | 193,974 | ||||||
JFE Holdings, Inc. | 55,900 | 1,270,868 | ||||||
JSR Corp. | 8,200 | 156,194 | ||||||
Kaneka Corp. | 28,000 | 177,675 | ||||||
Kobe Steel Ltd. * | 336,000 | 593,500 | ||||||
Kuraray Co., Ltd. | 17,100 | 200,777 | ||||||
Mitsubishi Chemical Holdings Corp. | 113,000 | 528,981 | ||||||
Mitsubishi Materials Corp. | 72,000 | 281,694 | ||||||
Mitsui Chemicals, Inc. | 130,000 | 345,580 | ||||||
Mitsui Mining & Smelting Co., Ltd. | 57,000 | 145,304 | ||||||
Nitto Denko Corp. | 6,200 | 325,134 | ||||||
Oji Holdings Corp. | 83,000 | 379,312 | ||||||
Shin-Etsu Chemical Co., Ltd. | 13,400 | 757,663 | ||||||
Showa Denko K.K. | 148,000 | 200,680 | ||||||
Sumitomo Chemical Co., Ltd. | 133,000 | 487,097 | ||||||
Sumitomo Metal Mining Co., Ltd. | 29,000 | 401,667 | ||||||
Taiheiyo Cement Corp. | 58,000 | 245,990 | ||||||
Teijin Ltd. | 123,000 | 276,193 | ||||||
Toray Industries, Inc. | 69,000 | 431,163 | ||||||
Tosoh Corp. | 58,000 | 221,947 | ||||||
Toyo Seikan Group Holdings Ltd. | 17,900 | 372,015 | ||||||
Ube Industries Ltd. | 97,000 | 200,780 | ||||||
10,493,349 | ||||||||
Media 0.1% | ||||||||
Dentsu, Inc. | 12,801 | 483,650 | ||||||
Hakuhodo DY Holdings, Inc. | 30,400 | 235,119 | ||||||
718,769 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Astellas Pharma, Inc. | 15,800 | 880,793 | ||||||
Daiichi Sankyo Co., Ltd. | 31,400 | 582,185 |
See financial notes 23
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Eisai Co., Ltd. | 9,100 | 357,466 | ||||||
Ono Pharmaceutical Co., Ltd. | 2,700 | 204,147 | ||||||
Otsuka Holdings Co., Ltd. | 14,800 | 421,534 | ||||||
Shionogi & Co., Ltd. | 9,100 | 201,370 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. | 1,300 | 91,279 | ||||||
Takeda Pharmaceutical Co., Ltd. | 31,400 | 1,496,353 | ||||||
4,235,127 | ||||||||
Real Estate 0.3% | ||||||||
Daito Trust Construction Co., Ltd. | 3,400 | 347,153 | ||||||
Daiwa House Industry Co., Ltd. | 20,000 | 400,675 | ||||||
Mitsubishi Estate Co., Ltd. | 16,000 | 457,274 | ||||||
Mitsui Fudosan Co., Ltd. | 16,000 | 530,014 | ||||||
Sumitomo Realty & Development Co., Ltd. | 6,500 | 307,557 | ||||||
2,042,673 | ||||||||
Retailing 0.3% | ||||||||
Edion Corp. | 33,600 | 168,199 | ||||||
Fast Retailing Co., Ltd. | 600 | 201,967 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 22,300 | 337,961 | ||||||
J. Front Retailing Co., Ltd. | 36,000 | 280,130 | ||||||
K’s Holdings Corp. | 4,500 | 132,133 | ||||||
Shimamura Co., Ltd. | 1,700 | 191,112 | ||||||
Takashimaya Co., Ltd. | 19,000 | 181,280 | ||||||
Yamada Denki Co., Ltd. | 173,400 | 486,384 | ||||||
1,979,166 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Rohm Co., Ltd. | 8,100 | 332,486 | ||||||
Tokyo Electron Ltd. | 8,200 | 449,955 | ||||||
782,441 | ||||||||
Software & Services 0.4% | ||||||||
Fujitsu Ltd. * | 280,000 | 1,202,937 | ||||||
Konami Corp. | 5,700 | 137,754 | ||||||
Nintendo Co., Ltd. | 11,030 | 1,240,364 | ||||||
NTT Data Corp. | 8,200 | 272,606 | ||||||
2,853,661 | ||||||||
Technology Hardware & Equipment 1.8% | ||||||||
Brother Industries Ltd. | 18,000 | 204,521 | ||||||
Canon, Inc. | 71,000 | 2,240,525 | ||||||
FUJIFILM Holdings Corp. | 48,800 | 1,193,831 | ||||||
Hitachi Ltd. | 318,000 | 2,224,442 | ||||||
Hoya Corp. | 22,400 | 537,137 | ||||||
Ibiden Co., Ltd. | 11,700 | 202,825 | ||||||
Keyence Corp. | 473 | 202,723 | ||||||
Konica Minolta, Inc. | 49,900 | 413,219 | ||||||
Kyocera Corp. | 14,600 | 758,186 | ||||||
Murata Manufacturing Co., Ltd. | 5,800 | 465,565 | ||||||
NEC Corp. | 361,000 | 810,872 | ||||||
Nippon Electric Glass Co., Ltd. | 50,000 | 257,187 | ||||||
Omron Corp. | 9,500 | 362,531 | ||||||
Ricoh Co., Ltd. | 59,000 | 623,088 | ||||||
Seiko Epson Corp. | 24,800 | 404,825 | ||||||
TDK Corp. | 9,900 | 420,751 | ||||||
11,322,228 | ||||||||
Telecommunication Services 1.2% | ||||||||
KDDI Corp. | 35,300 | 1,911,724 | ||||||
Nippon Telegraph & Telephone Corp. | 50,904 | 2,646,007 | ||||||
NTT DoCoMo, Inc. | 93,800 | 1,488,139 | ||||||
Softbank Corp. | 23,000 | 1,717,614 | ||||||
7,763,484 | ||||||||
Transportation 1.0% | ||||||||
ANA Holdings, Inc. | 57,000 | 119,087 | ||||||
Central Japan Railway Co. | 7,700 | 998,471 | ||||||
East Japan Railway Co. | 15,318 | 1,330,684 | ||||||
Hankyu Hanshin Holdings, Inc. | 44,000 | 246,789 | ||||||
Kawasaki Kisen Kaisha Ltd. | 131,000 | 300,308 | ||||||
Kintetsu Corp. | 37,000 | 136,166 | ||||||
Mitsui O.S.K. Lines, Ltd. | 164,000 | 694,184 | ||||||
Nagoya Railroad Co., Ltd. | 44,000 | 127,744 | ||||||
Nippon Express Co., Ltd. | 91,000 | 456,961 | ||||||
Nippon Yusen K.K. | 226,000 | 690,542 | ||||||
Seino Holdings Co., Ltd. | 20,000 | 197,525 | ||||||
Tobu Railway Co., Ltd. | 30,000 | 155,516 | ||||||
Tokyu Corp. | 40,000 | 272,403 | ||||||
West Japan Railway Co. | 10,663 | 478,128 | ||||||
Yamato Holdings Co., Ltd. | 22,900 | 492,485 | ||||||
6,696,993 | ||||||||
Utilities 1.5% | ||||||||
Chubu Electric Power Co., Inc. | 74,000 | 1,095,427 | ||||||
Electric Power Development Co., Ltd. | 7,500 | 239,684 | ||||||
Hokkaido Electric Power Co., Inc. * | 22,200 | 285,983 | ||||||
Hokuriku Electric Power Co. | 17,200 | 244,986 | ||||||
Kyushu Electric Power Co., Inc. * | 53,100 | 747,639 | ||||||
Osaka Gas Co., Ltd. | 116,000 | 488,601 | ||||||
Shikoku Electric Power Co., Inc. * | 17,600 | 314,145 | ||||||
The Chugoku Electric Power Co., Inc. | 26,300 | 403,144 | ||||||
The Kansai Electric Power Co., Inc. * | 94,900 | 1,201,151 | ||||||
Toho Gas Co., Ltd. | 25,000 | 130,361 | ||||||
Tohoku Electric Power Co., Inc. * | 62,500 | 756,511 | ||||||
Tokyo Electric Power Co., Inc. * | 561,800 | 2,998,269 | ||||||
Tokyo Gas Co., Ltd. | 123,000 | 667,401 | ||||||
9,573,302 | ||||||||
123,789,536 | ||||||||
Luxembourg 0.6% | ||||||||
Energy 0.1% | ||||||||
Tenaris S.A. | 16,547 | 387,107 | ||||||
Materials 0.5% | ||||||||
APERAM | 12,229 | 208,927 | ||||||
ArcelorMittal | 171,227 | 2,696,932 | ||||||
2,905,859 | ||||||||
Media 0.0% | ||||||||
SES S.A. | 9,605 | 279,370 | ||||||
Telecommunication Services 0.0% | ||||||||
Millicom International Cellular S.A. SDR | 2,459 | 226,859 | ||||||
3,799,195 | ||||||||
Netherlands 5.5% | ||||||||
Capital Goods 0.3% | ||||||||
Koninklijke BAM Groep N.V. | 35,277 | 187,620 |
24 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Koninklijke Philips N.V. | 49,306 | 1,742,508 | ||||||
Royal Imtech N.V. * | 18,628 | 54,816 | ||||||
1,984,944 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Randstad Holding N.V. | 6,842 | 421,389 | ||||||
Diversified Financials 0.4% | ||||||||
ING Groep N.V. CVA * | 206,997 | 2,630,458 | ||||||
SNS Reaal N.V. (a)(b)(c)* | 124,822 | — | ||||||
2,630,458 | ||||||||
Energy 2.9% | ||||||||
Fugro N.V. CVA | 3,851 | 240,766 | ||||||
Royal Dutch Shell plc, A Shares | 322,786 | 10,752,277 | ||||||
Royal Dutch Shell plc, B Shares | 223,667 | 7,743,352 | ||||||
18,736,395 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Koninklijke Ahold N.V. | 105,116 | 1,997,891 | ||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Corbion N.V. | 7,195 | 166,692 | ||||||
Heineken Holding N.V. | 4,581 | 290,961 | ||||||
Heineken N.V. | 5,357 | 369,136 | ||||||
Nutreco N.V. | 3,842 | 187,818 | ||||||
Unilever N.V. CVA | 46,752 | 1,853,503 | ||||||
2,868,110 | ||||||||
Insurance 0.2% | ||||||||
Aegon N.V. | 122,494 | 974,669 | ||||||
Delta Lloyd N.V. | 12,884 | 273,162 | ||||||
1,247,831 | ||||||||
Materials 0.3% | ||||||||
Akzo Nobel N.V. | 17,637 | 1,280,347 | ||||||
Koninklijke DSM N.V. | 9,064 | 685,171 | ||||||
1,965,518 | ||||||||
Media 0.1% | ||||||||
Reed Elsevier N.V. | 10,833 | 217,793 | ||||||
Wolters Kluwer N.V. | 13,484 | 365,293 | ||||||
583,086 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASML Holding N.V. | 4,114 | 389,545 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Gemalto N.V. | 1,437 | 161,288 | ||||||
Telecommunication Services 0.2% | ||||||||
Koninklijke (Royal) KPN N.V. * | 406,488 | 1,299,193 | ||||||
Transportation 0.2% | ||||||||
PostNL N.V. * | 222,736 | 1,163,868 | ||||||
TNT Express N.V. | 27,097 | 249,821 | ||||||
1,413,689 | ||||||||
35,699,337 | ||||||||
New Zealand 0.1% | ||||||||
Materials 0.0% | ||||||||
Fletcher Building Ltd. | 35,803 | 295,467 | ||||||
Telecommunication Services 0.1% | ||||||||
Telecom Corp. of New Zealand Ltd. | 212,942 | 413,203 | ||||||
708,670 | ||||||||
Norway 0.8% | ||||||||
Banks 0.1% | ||||||||
DnB A.S.A. | 29,572 | 524,208 | ||||||
Energy 0.4% | ||||||||
Aker Solutions A.S.A. | 8,352 | 115,388 | ||||||
Petroleum Geo-Services A.S.A. | 8,771 | 106,375 | ||||||
Statoil A.S.A. | 99,911 | 2,364,015 | ||||||
2,585,778 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Marine Harvest | 160,921 | 188,661 | ||||||
Orkla A.S.A. | 51,700 | 419,089 | ||||||
607,750 | ||||||||
Materials 0.1% | ||||||||
Norsk Hydro A.S.A. | 92,380 | 412,271 | ||||||
Yara International A.S.A. | 8,454 | 364,091 | ||||||
776,362 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. | 29,504 | 708,911 | ||||||
5,203,009 | ||||||||
Portugal 0.3% | ||||||||
Banks 0.1% | ||||||||
Banco Comercial Portugues S.A. - Reg’d (c)* | 1,754,192 | 261,588 | ||||||
Banco Espirito Santo, S.A. - Reg’d * | 143,643 | 188,743 | ||||||
450,331 | ||||||||
Energy 0.0% | ||||||||
Galp Energia, SGPS, S.A. | 9,031 | 152,926 | ||||||
Telecommunication Services 0.1% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d (c) | 118,593 | 534,559 | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 174,460 | 642,190 | ||||||
1,780,006 | ||||||||
Singapore 0.6% | ||||||||
Banks 0.2% | ||||||||
DBS Group Holdings Ltd. | 35,056 | 472,606 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 46,897 | 392,316 | ||||||
United Overseas Bank Ltd. | 26,952 | 451,355 | ||||||
1,316,277 | ||||||||
Capital Goods 0.1% | ||||||||
Keppel Corp., Ltd. | 38,300 | 334,218 | ||||||
SembCorp Industries Ltd. | 36,000 | 153,915 | ||||||
488,133 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Wilmar International Ltd. | 95,166 | 264,708 | ||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. (c) | 47,000 | 160,772 |
See financial notes 25
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Retailing 0.0% | ||||||||
Jardine Cycle & Carriage Ltd. | 4,000 | 117,883 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Flextronics International Ltd. * | 62,237 | 491,050 | ||||||
Venture Corp., Ltd. | 21,000 | 131,510 | ||||||
622,560 | ||||||||
Telecommunication Services 0.1% | ||||||||
Singapore Telecommunications Ltd. | 231,486 | 702,972 | ||||||
Transportation 0.1% | ||||||||
ComfortDelGro Corp., Ltd. | 98,000 | 151,329 | ||||||
Singapore Airlines Ltd. | 39,270 | 329,412 | ||||||
480,741 | ||||||||
4,154,046 | ||||||||
Spain 4.4% | ||||||||
Banks 1.9% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 319,456 | 3,733,455 | ||||||
Banco de Sabadell S.A. | 153,065 | 392,199 | ||||||
Banco Popular Espanol S.A. * | 107,846 | 611,742 | ||||||
Banco Santander S.A. | 855,426 | 7,583,576 | ||||||
Bankia S.A. * | 105,346 | 157,623 | ||||||
12,478,595 | ||||||||
Capital Goods 0.2% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 16,034 | 525,998 | ||||||
Ferrovial S.A. | 16,597 | 316,368 | ||||||
Fomento de Construcciones y Contratas S.A. (c)* | 14,494 | 333,494 | ||||||
1,175,860 | ||||||||
Energy 0.4% | ||||||||
Repsol S.A. | 94,946 | 2,545,582 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 27,524 | 250,936 | ||||||
Retailing 0.1% | ||||||||
Inditex S.A. | 3,392 | 557,098 | ||||||
Software & Services 0.0% | ||||||||
Amadeus IT Holding S.A., A Shares | 5,640 | 209,257 | ||||||
Telecommunication Services 1.2% | ||||||||
Telefonica S.A. * | 439,625 | 7,737,096 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 15,937 | 341,450 | ||||||
Utilities 0.5% | ||||||||
Acciona S.A. (c) | 3,131 | 198,481 | ||||||
Enagas S.A. | 6,175 | 164,873 | ||||||
Endesa S.A. * | 9,598 | 277,826 | ||||||
Gas Natural SDG S.A. | 17,868 | 421,438 | ||||||
Iberdrola S.A. | 319,827 | 2,007,505 | ||||||
Red Electrica Corp. S.A. | 3,326 | 207,092 | ||||||
3,277,215 | ||||||||
28,573,089 | ||||||||
Sweden 2.2% | ||||||||
Automobiles & Components 0.1% | ||||||||
Autoliv, Inc. | 4,092 | 365,129 | ||||||
Banks 0.4% | ||||||||
Nordea Bank AB | 74,989 | 959,222 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 50,037 | 605,200 | ||||||
Svenska Handelsbanken AB, A Shares | 15,549 | 703,228 | ||||||
Swedbank AB, A Shares | 17,536 | 456,398 | ||||||
2,724,048 | ||||||||
Capital Goods 0.7% | ||||||||
Alfa Laval AB | 8,943 | 203,997 | ||||||
Assa Abloy AB, B Shares | 7,008 | 347,717 | ||||||
Atlas Copco AB, A Shares | 21,323 | 590,799 | ||||||
Atlas Copco AB, B Shares | 10,542 | 261,955 | ||||||
NCC AB, B Shares | 7,345 | 225,927 | ||||||
Sandvik AB | 45,412 | 613,609 | ||||||
Scania AB, B Shares | 11,869 | 237,894 | ||||||
Skanska AB, B Shares | 26,360 | 507,543 | ||||||
SKF AB, B Shares | 16,260 | 430,228 | ||||||
Trelleborg AB, B Shares | 9,347 | 176,375 | ||||||
Volvo AB, A Shares | 16,418 | 210,967 | ||||||
Volvo AB, B Shares | 57,152 | 733,540 | ||||||
4,540,551 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Securitas AB, B Shares | 26,065 | 297,218 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, B Shares | 15,501 | 382,331 | ||||||
Husqvarna AB, B Shares | 30,127 | 177,012 | ||||||
559,343 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Swedish Match AB | 6,934 | 228,634 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Getinge AB, B Shares | 3,927 | 124,408 | ||||||
Household & Personal Products 0.1% | ||||||||
Svenska Cellulosa AB, SCA B Shares | 29,668 | 841,123 | ||||||
Materials 0.1% | ||||||||
Boliden AB | 19,566 | 277,896 | ||||||
SSAB AB, A Shares | 28,122 | 185,002 | ||||||
SSAB AB, B Shares | 8,242 | 46,501 | ||||||
509,399 | ||||||||
Retailing 0.2% | ||||||||
Hennes & Mauritz AB, B Shares | 25,374 | 1,096,457 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 124,915 | 1,494,135 | ||||||
Telecommunication Services 0.2% | ||||||||
Tele2 AB, B Shares | 33,747 | 406,767 | ||||||
TeliaSonera AB | 113,350 | 937,290 | ||||||
1,344,057 | ||||||||
14,124,502 |
26 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Switzerland 5.5% | ||||||||
Capital Goods 0.5% | ||||||||
ABB Ltd. - Reg’d * | 68,087 | 1,734,690 | ||||||
Geberit AG - Reg’d | 852 | 254,547 | ||||||
Schindler Holding AG | 985 | 139,607 | ||||||
Schindler Holding AG - Reg’d | 386 | 54,933 | ||||||
Wolseley plc | 15,246 | 820,707 | ||||||
3,004,484 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
Adecco S.A. - Reg’d * | 9,645 | 711,258 | ||||||
SGS S.A. - Reg’d | 100 | 233,975 | ||||||
Tyco International Ltd. | 36,096 | 1,319,309 | ||||||
2,264,542 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Cie Financiere Richemont S.A. | 7,097 | 725,666 | ||||||
The Swatch Group AG - Bearer Shares | 462 | 295,076 | ||||||
The Swatch Group AG - Reg’d | 832 | 92,570 | ||||||
1,113,312 | ||||||||
Diversified Financials 0.3% | ||||||||
Credit Suisse Group AG - Reg’d * | 48,099 | 1,496,261 | ||||||
GAM Holding AG * | 10,327 | 192,969 | ||||||
UBS AG - Reg’d * | 18,233 | 352,645 | ||||||
2,041,875 | ||||||||
Energy 0.3% | ||||||||
Noble Corp. | 10,432 | 393,286 | ||||||
Transocean Ltd. | 18,607 | 878,772 | ||||||
Weatherford International Ltd. * | 37,982 | 624,424 | ||||||
1,896,482 | ||||||||
Food, Beverage & Tobacco 1.1% | ||||||||
Aryzta AG * | 2,306 | 172,033 | ||||||
Lindt & Spruengli AG | 12 | 50,653 | ||||||
Lindt & Spruengli AG - Reg’d | 2 | 100,601 | ||||||
Nestle S.A. - Reg’d | 93,816 | 6,772,005 | ||||||
7,095,292 | ||||||||
Insurance 0.5% | ||||||||
Baloise Holding AG - Reg’d | 1,917 | 222,705 | ||||||
Swiss Life Holding AG - Reg’d * | 1,451 | 287,705 | ||||||
Swiss Re AG * | 11,272 | 989,486 | ||||||
Zurich Insurance Group AG * | 7,184 | 1,985,106 | ||||||
3,485,002 | ||||||||
Materials 0.6% | ||||||||
Clariant AG - Reg’d * | 12,878 | 226,908 | ||||||
Givaudan S.A. - Reg’d * | 163 | 231,165 | ||||||
Glencore Xstrata plc * | 330,901 | 1,800,835 | ||||||
Holcim Ltd. - Reg’d * | 11,039 | 821,075 | ||||||
Sika AG | 64 | 201,757 | ||||||
Syngenta AG - Reg’d | 1,733 | 699,467 | ||||||
3,981,207 | ||||||||
Media 0.0% | ||||||||
Informa plc | 19,077 | 170,900 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.4% | ||||||||
Lonza Group AG - Reg’d * | 2,180 | 194,593 | ||||||
Novartis AG - Reg’d | 60,403 | 4,688,636 | ||||||
Roche Holding AG | 13,365 | 3,695,895 | ||||||
Roche Holding AG - Bearer Shares | 577 | 158,543 | ||||||
8,737,667 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
STMicroelectronics N.V. | 58,988 | 455,459 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
TE Connectivity Ltd. | 15,938 | 820,648 | ||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 949 | 484,043 | ||||||
Transportation 0.0% | ||||||||
Kuehne & Nagel International AG - Reg’d | 1,878 | 237,250 | ||||||
35,788,163 | ||||||||
United Kingdom 17.2% | ||||||||
Automobiles & Components 0.1% | ||||||||
GKN plc | 58,393 | 343,977 | ||||||
Banks 2.4% | ||||||||
Barclays plc | 739,641 | 3,112,009 | ||||||
HSBC Holdings plc | 765,505 | 8,390,960 | ||||||
Lloyds Banking Group plc * | 1,559,834 | 1,929,197 | ||||||
Royal Bank of Scotland Group plc * | 121,886 | 717,849 | ||||||
Standard Chartered plc | 48,029 | 1,153,175 | ||||||
15,303,190 | ||||||||
Capital Goods 0.7% | ||||||||
BAE Systems plc | 177,782 | 1,296,829 | ||||||
Balfour Beatty plc | 60,478 | 276,582 | ||||||
Bunzl plc | 11,465 | 252,906 | ||||||
Carillion plc | 32,698 | 159,305 | ||||||
Cobham plc | 39,072 | 180,446 | ||||||
Foster Wheeler AG * | 7,771 | 209,739 | ||||||
IMI plc | 9,494 | 230,979 | ||||||
Meggitt plc | 18,604 | 170,788 | ||||||
Rolls-Royce Holdings plc * | 43,376 | 799,116 | ||||||
SIG plc | 61,602 | 203,268 | ||||||
Smiths Group plc | 13,248 | 304,908 | ||||||
The Weir Group plc | 4,123 | 148,915 | ||||||
Travis Perkins plc | 10,768 | 320,214 | ||||||
Vesuvius plc | 21,714 | 168,809 | ||||||
4,722,804 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Aggreko plc | 5,196 | 133,985 | ||||||
Capita plc | 14,904 | 235,605 | ||||||
G4S plc | 79,944 | 335,789 | ||||||
Hays plc | 118,455 | 236,423 | ||||||
Serco Group plc | 16,565 | 148,023 | ||||||
1,089,825 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Barratt Developments plc | 55,530 | 297,783 | ||||||
Burberry Group plc | 7,931 | 194,893 | ||||||
Persimmon plc * | 14,688 | 297,376 | ||||||
Taylor Wimpey plc | 160,056 | 282,397 | ||||||
1,072,449 | ||||||||
Consumer Services 0.4% | ||||||||
Carnival plc | 10,540 | 374,616 | ||||||
Compass Group plc | 66,108 | 950,712 |
See financial notes 27
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
InterContinental Hotels Group plc | 5,761 | 167,857 | ||||||
Ladbrokes plc | 42,809 | 131,030 | ||||||
Thomas Cook Group plc * | 230,820 | 531,249 | ||||||
TUI Travel plc | 53,760 | 331,427 | ||||||
Whitbread plc | 6,322 | 347,653 | ||||||
William Hill plc | 24,159 | 155,112 | ||||||
2,989,656 | ||||||||
Diversified Financials 0.1% | ||||||||
ICAP plc | 24,954 | �� | 154,091 | |||||
Man Group plc | 306,226 | 435,827 | ||||||
589,918 | ||||||||
Energy 2.9% | ||||||||
AMEC plc | 12,988 | 244,956 | ||||||
BG Group plc | 111,963 | 2,284,008 | ||||||
BP plc | 2,001,747 | 15,538,766 | ||||||
Ensco plc, Class A | 3,856 | 222,298 | ||||||
John Wood Group plc | 14,742 | 191,947 | ||||||
Tullow Oil plc | 7,349 | 111,082 | ||||||
18,593,057 | ||||||||
Food & Staples Retailing 0.8% | ||||||||
J. Sainsbury plc | 151,782 | 960,101 | ||||||
Tesco plc | 571,583 | 3,334,122 | ||||||
WM Morrison Supermarkets plc | 262,615 | 1,184,925 | ||||||
5,479,148 | ||||||||
Food, Beverage & Tobacco 1.3% | ||||||||
Associated British Foods plc | 12,296 | 447,020 | ||||||
British American Tobacco plc | 51,503 | 2,841,536 | ||||||
Diageo plc | 47,547 | 1,515,677 | ||||||
Imperial Tobacco Group plc | 31,576 | 1,178,857 | ||||||
SABMiller plc | 16,030 | 835,816 | ||||||
Tate & Lyle plc | 20,099 | 255,075 | ||||||
Unilever plc | 33,401 | 1,354,446 | ||||||
8,428,427 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Smith & Nephew plc | 29,833 | 381,553 | ||||||
Household & Personal Products 0.2% | ||||||||
Reckitt Benckiser Group plc | 13,877 | 1,079,063 | ||||||
Insurance 0.8% | ||||||||
Amlin plc | 23,767 | 162,390 | ||||||
Aviva plc | 217,515 | 1,561,520 | ||||||
Legal & General Group plc | 150,331 | 521,018 | ||||||
Old Mutual plc | 193,505 | 630,640 | ||||||
Prudential plc | 40,660 | 831,528 | ||||||
Resolution Ltd. | 89,508 | 512,502 | ||||||
RSA Insurance Group plc | 224,640 | 462,652 | ||||||
Standard Life plc | 55,126 | 311,004 | ||||||
Willis Group Holdings plc | 4,463 | 201,147 | ||||||
5,194,401 | ||||||||
Materials 1.4% | ||||||||
Anglo American plc | 119,821 | 2,848,933 | ||||||
Antofagasta plc | 12,428 | 169,853 | ||||||
BHP Billiton plc | 64,515 | 1,990,834 | ||||||
Johnson Matthey plc | 12,027 | 578,779 | ||||||
Kazakhmys plc (c) | 29,377 | 123,598 | ||||||
Mondi plc | 21,813 | 389,492 | ||||||
Rexam plc | 44,062 | 366,908 | ||||||
Rio Tinto plc | 50,193 | 2,539,773 | ||||||
Vedanta Resources plc | 10,352 | 176,377 | ||||||
9,184,547 | ||||||||
Media 0.3% | ||||||||
British Sky Broadcasting Group plc | 25,253 | 379,425 | ||||||
ITV plc | 80,197 | 245,209 | ||||||
Pearson plc | 31,237 | 653,322 | ||||||
Reed Elsevier plc | 19,000 | 266,158 | ||||||
WPP plc | 34,499 | 732,790 | ||||||
2,276,904 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.6% | ||||||||
AstraZeneca plc | 84,067 | 4,450,517 | ||||||
GlaxoSmithKline plc | 228,301 | 6,018,552 | ||||||
10,469,069 | ||||||||
Real Estate 0.1% | ||||||||
British Land Co., plc | 19,338 | 192,866 | ||||||
Land Securities Group plc | 23,963 | 379,864 | ||||||
572,730 | ||||||||
Retailing 0.6% | ||||||||
Dixons Retail plc * | 397,691 | 311,591 | ||||||
Home Retail Group plc | 227,072 | 724,477 | ||||||
Inchcape plc | 36,512 | 372,784 | ||||||
Kingfisher plc | 152,670 | 923,568 | ||||||
Marks & Spencer Group plc | 124,324 | 1,002,568 | ||||||
Next plc | 6,326 | 552,430 | ||||||
3,887,418 | ||||||||
Software & Services 0.0% | ||||||||
The Sage Group plc | 33,813 | 182,411 | ||||||
Telecommunication Services 2.0% | ||||||||
BT Group plc | 457,919 | 2,770,698 | ||||||
Cable & Wireless Communications plc | 389,759 | 292,409 | ||||||
Inmarsat plc | 13,031 | 150,400 | ||||||
Vodafone Group plc | 2,741,790 | 10,042,511 | ||||||
13,256,018 | ||||||||
Transportation 0.1% | ||||||||
FirstGroup plc | 129,099 | 238,753 | ||||||
International Consolidated Airlines Group S.A. * | 37,462 | 208,500 | ||||||
National Express Group plc | 40,295 | 168,666 | ||||||
615,919 | ||||||||
Utilities 0.9% | ||||||||
Centrica plc | 256,352 | 1,449,858 | ||||||
Drax Group plc | 29,175 | 297,858 | ||||||
National Grid plc | 148,734 | 1,869,102 | ||||||
Pennon Group plc | 13,295 | 145,179 | ||||||
Severn Trent plc | 9,771 | 291,662 | ||||||
SSE plc | 50,738 | 1,150,999 | ||||||
United Utilities Group plc | 37,809 | 427,616 | ||||||
5,632,274 | ||||||||
111,344,758 | ||||||||
Total Common Stock | ||||||||
(Cost $481,759,721) | 627,407,931 | |||||||
28 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Preferred Stock 0.4% of net assets | ||||||||
Germany 0.4% | ||||||||
Automobiles & Components 0.3% | ||||||||
Bayerische Motoren Werke AG | 2,734 | 228,210 | ||||||
Volkswagen AG | 6,955 | 1,763,845 | ||||||
1,992,055 | ||||||||
Household & Personal Products 0.1% | ||||||||
Henkel AG & Co. KGaA | 4,212 | 454,771 | ||||||
Utilities 0.0% | ||||||||
RWE AG (c) | 5,250 | 178,862 | ||||||
2,625,688 | ||||||||
United Kingdom 0.0% | ||||||||
Capital Goods 0.0% | ||||||||
Rolls-Royce Holdings plc (a)* | 3,730,336 | 5,981 | ||||||
Total Preferred Stock | ||||||||
(Cost $1,388,645) | 2,631,669 | |||||||
Rights 0.0% of net assets | ||||||||
Spain 0.0% | ||||||||
Banco Santander S.A. (a)* | 855,424 | 185,237 | ||||||
Total Rights | ||||||||
(Cost $176,884) | 185,237 | |||||||
Other Investment Company 0.0% of net assets | ||||||||
United States 0.0% | ||||||||
iShares MSCI EAFE ETF | 100 | 6,588 | ||||||
Total Other Investment Company | ||||||||
(Cost $4,656) | 6,588 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 2.1% of net assets | ||||||||
Time Deposits 1.8% | ||||||||
Bank of America | ||||||||
US Dollar | ||||||||
0.03%, 11/01/13 | 10,341,009 | 10,341,009 | ||||||
Brown Brothers Harriman | ||||||||
Hong Kong Dollar | ||||||||
0.01%, 11/01/13 | 5,449 | 703 | ||||||
Japanese Yen | ||||||||
0.01%, 11/01/13 | 249,063 | 2,533 | ||||||
Pound Streling | ||||||||
0.08%, 11/01/13 | 6,240 | 10,006 | ||||||
Citibank | ||||||||
Euro | ||||||||
0.02%, 11/01/13 | 19,151 | 26,002 | ||||||
DNB | ||||||||
US Dollar | ||||||||
0.03%, 11/01/13 | 1,310,030 | 1,310,030 | ||||||
Wells Fargo | ||||||||
Canadian Dollar | ||||||||
0.31%, 11/01/13 | 96,936 | 92,971 | ||||||
11,783,254 | ||||||||
U.S. Treasury Obligations 0.3% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/19/13 (d)(e) | 100,000 | 100,000 | ||||||
0.01%, 12/19/13 (d)(e) | 1,510,000 | 1,509,990 | ||||||
1,609,990 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $13,393,244) | 13,393,244 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.7% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 4,663,448 | 4,663,448 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $4,663,448) | 4,663,448 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, the tax basis cost of the fund’s investments was $516,396,557 unrealized appreciation and depreciation were $136,191,155 and ($8,963,043), respectively, with a net unrealized appreciation of $127,228,112.
At 10/31/13, the values of certain foreign securities held by the fund aggregating $583,511,965 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $0 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $4,160,161. | |
(d) | The rate shown is the purchase yield. | |
(e) | All or a portion of this security is held as collateral for open futures contracts. | |
(f) | The rate shown is the 7-day yield. |
See financial notes 29
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
CVA — | Dutch Certificate | |
ETF — | Exchange traded fund | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/20/13 | 135 | 12,658,275 | 279,349 |
30 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .3% | Common Stock | 116,055,264 | 144,078,170 | ||||||||
0 | .4% | Preferred Stock | 380,406 | 578,681 | ||||||||
0 | .0% | Rights | — | 1,638 | ||||||||
2 | .8% | Other Investment Company | 3,757,207 | 4,121,700 | ||||||||
0 | .2% | Short-Term Investments | 344,569 | 344,569 | ||||||||
99 | .7% | Total Investments | 120,537,446 | 149,124,758 | ||||||||
1 | .5% | Collateral Invested for Securities on Loan | 2,221,642 | 2,221,642 | ||||||||
(1 | .2)% | Other Assets and Liabilities, Net | (1,771,202 | ) | ||||||||
100 | .0% | Total Net Assets | 149,575,198 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 96.3% of net assets | ||||||||
Australia 4.6% | ||||||||
Banks 0.2% | ||||||||
Bank of Queensland Ltd. | 12,575 | 143,448 | ||||||
Bendigo & Adelaide Bank Ltd. | 16,486 | 169,720 | ||||||
313,168 | ||||||||
Capital Goods 0.3% | ||||||||
Ausdrill Ltd. | 16,432 | 23,743 | ||||||
Boart Longyear Ltd. (a) | 188,022 | 76,206 | ||||||
Bradken Ltd. | 16,008 | 94,438 | ||||||
Cardno Ltd. | 6,264 | 41,925 | ||||||
GWA Group Ltd. | 31,561 | 92,464 | ||||||
Monadelphous Group Ltd. | 4,803 | 82,413 | ||||||
411,189 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
ALS Ltd. | 13,443 | 127,167 | ||||||
Programmed Maintenance Services Ltd. | 12,976 | 33,816 | ||||||
Seek Ltd. | 5,907 | 72,570 | ||||||
Skilled Group Ltd. | 20,716 | 69,228 | ||||||
Transfield Services Ltd. | 93,219 | 117,574 | ||||||
Transpacific Industries Group Ltd. * | 96,209 | 104,128 | ||||||
524,483 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
G.U.D. Holdings Ltd. | 7,318 | 41,006 | ||||||
Consumer Services 0.2% | ||||||||
Aristocrat Leisure Ltd. | 21,915 | 104,643 | ||||||
Echo Entertainment Group Ltd. | 28,534 | 71,615 | ||||||
Flight Centre Ltd. | 1,757 | 86,257 | ||||||
262,515 | ||||||||
Diversified Financials 0.3% | ||||||||
ASX Ltd. | 4,703 | 163,362 | ||||||
Challenger Ltd. | 21,791 | 123,621 | ||||||
IOOF Holdings Ltd. | 4,765 | 40,522 | ||||||
Perpetual Ltd. | 2,246 | 97,783 | ||||||
425,288 | ||||||||
Energy 0.1% | ||||||||
AWE Ltd. * | 51,459 | 60,713 | ||||||
Beach Energy Ltd. | 53,058 | 71,665 | ||||||
132,378 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Goodman Fielder Ltd. | 288,886 | 207,629 | ||||||
GrainCorp Ltd., Class A | 8,008 | 93,367 | ||||||
Treasury Wine Estates Ltd. | 23,416 | 103,991 | ||||||
404,987 | ||||||||
Health Care Equipment & Services 0.4% | ||||||||
Ansell Ltd. | 7,606 | 140,110 | ||||||
Cochlear Ltd. | 1,730 | 96,122 | ||||||
Primary Health Care Ltd. | 23,810 | 111,084 | ||||||
Ramsay Health Care Ltd. | 3,358 | 123,272 | ||||||
Sigma Pharmaceuticals Ltd. | 280,060 | 150,963 | ||||||
621,551 | ||||||||
Insurance 0.0% | ||||||||
NIB Holdings Ltd. | 29,567 | 67,102 | ||||||
Materials 0.5% | ||||||||
Adelaide Brighton Ltd. | 31,011 | 112,870 | ||||||
Aquarius Platinum Ltd. (a)* | 153,362 | 100,371 | ||||||
DuluxGroup Ltd. | 4,686 | 22,820 | ||||||
Fortescue Metals Group Ltd. | 17,078 | 83,757 | ||||||
Gunns Ltd. (b)(c)* | 124,356 | — | ||||||
Iluka Resources Ltd. | 13,251 | 128,620 | ||||||
Kagara Ltd. (b)(c)* | 83,968 | — | ||||||
Mount Gibson Iron Ltd. | 36,414 | 30,543 | ||||||
Nufarm Ltd. | 21,182 | 97,682 | ||||||
OZ Minerals Ltd. | 35,865 | 122,247 | ||||||
698,910 | ||||||||
Media 0.1% | ||||||||
Seven West Media Ltd. | 30,901 | 73,625 | ||||||
Southern Cross Media Group Ltd. | 30,241 | 53,965 | ||||||
Ten Network Holdings Ltd. * | 208,748 | 55,330 | ||||||
182,920 | ||||||||
Real Estate 0.6% | ||||||||
Australand Property Group | 16,292 | 57,424 | ||||||
CFS Retail Property Trust Group | 68,091 | 133,261 | ||||||
Charter Hall Retail REIT | 5,668 | 21,640 | ||||||
Commonwealth Property Office Fund | 69,768 | 78,933 | ||||||
Dexus Property Group | 189,158 | 193,853 | ||||||
Goodman Group | 27,697 | 132,364 | ||||||
GPT Group | 52,638 | 183,458 | ||||||
Investa Office Fund | 18,564 | 54,498 |
See financial notes 31
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Westfield Retail Trust | 21,450 | 62,581 | ||||||
918,012 | ||||||||
Retailing 0.6% | ||||||||
Automotive Holdings Group Ltd. | 11,269 | 38,684 | ||||||
David Jones Ltd. | 72,317 | 185,857 | ||||||
Harvey Norman Holdings Ltd. | 45,978 | 141,482 | ||||||
JB Hi-Fi Ltd. (a) | 7,792 | 160,577 | ||||||
Myer Holdings Ltd | 65,904 | 155,757 | ||||||
Pacific Brands Ltd. | 203,647 | 135,640 | ||||||
Premier Investments Ltd. | 10,608 | 79,943 | ||||||
897,940 | ||||||||
Software & Services 0.1% | ||||||||
Computershare Ltd. | 21,345 | 216,617 | ||||||
Transportation 0.2% | ||||||||
Aurizon Holdings Ltd. | 39,809 | 180,205 | ||||||
Transurban Group | 28,071 | 188,311 | ||||||
Virgin Australia International Holdings (b)(c)* | 176,214 | — | ||||||
368,516 | ||||||||
Utilities 0.3% | ||||||||
APA Group | 24,674 | 141,372 | ||||||
DUET Group | 78,937 | 160,234 | ||||||
SP AusNet | 96,528 | 114,031 | ||||||
415,637 | ||||||||
6,902,219 | ||||||||
Austria 0.7% | ||||||||
Banks 0.1% | ||||||||
Raiffeisen Bank International AG | 5,408 | 198,365 | ||||||
Capital Goods 0.1% | ||||||||
Zumtobel AG | 5,271 | 94,062 | ||||||
Energy 0.0% | ||||||||
Schoeller-Bleckmann Oilfield Equipment AG | 190 | 21,920 | ||||||
Insurance 0.1% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 2,628 | 139,029 | ||||||
Materials 0.1% | ||||||||
Lenzing AG | 605 | 45,179 | ||||||
RHI AG | 1,810 | 66,791 | ||||||
111,970 | ||||||||
Real Estate 0.2% | ||||||||
Immofinanz AG * | 54,778 | 239,905 | ||||||
Transportation 0.1% | ||||||||
Oesterreichische Post AG | 3,690 | 173,034 | ||||||
Utilities 0.0% | ||||||||
Verbund AG | 2,527 | 59,279 | ||||||
1,037,564 | ||||||||
Belgium 1.1% | ||||||||
Capital Goods 0.1% | ||||||||
Compagnie d’Enterprises CFE | 966 | 76,374 | ||||||
Diversified Financials 0.2% | ||||||||
Ackermans & van Haaren N.V. | 782 | 84,693 | ||||||
Gimv N.V. | 1,261 | 63,909 | ||||||
Groupe Bruxelles Lambert S.A. | 1,801 | 160,605 | ||||||
Sofina S.A. | 564 | 59,727 | ||||||
368,934 | ||||||||
Materials 0.2% | ||||||||
Nyrstar (a) | 29,149 | 119,599 | ||||||
Tessenderlo Chemie N.V. | 5,334 | 133,518 | ||||||
253,117 | ||||||||
Media 0.1% | ||||||||
Telenet Group Holding N.V. | 2,980 | 163,664 | ||||||
Real Estate 0.1% | ||||||||
Befimmo S.C.A. | 735 | 52,721 | ||||||
Cofinimmo | 643 | 77,666 | ||||||
130,387 | ||||||||
Retailing 0.1% | ||||||||
S.A. D’Ieteren N.V. | 4,416 | 208,355 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Barco N.V. | 1,090 | 82,596 | ||||||
EVS Broadcast Equipment S.A. | 676 | 44,225 | ||||||
126,821 | ||||||||
Telecommunication Services 0.1% | ||||||||
Mobistar S.A. | 10,609 | 183,896 | ||||||
Utilities 0.1% | ||||||||
Elia System Operator S.A./N.V. | 2,681 | 122,672 | ||||||
1,634,220 | ||||||||
Canada 7.9% | ||||||||
Automobiles & Components 0.2% | ||||||||
Linamar Corp. | 4,233 | 142,338 | ||||||
Martinrea International, Inc. | 7,679 | 81,382 | ||||||
223,720 | ||||||||
Banks 0.3% | ||||||||
Canadian Western Bank | 2,356 | 75,562 | ||||||
Genworth MI Canada, Inc. (b) | 4,332 | 136,319 | ||||||
Home Capital Group, Inc. | 960 | 76,190 | ||||||
Laurentian Bank of Canada | 1,783 | 79,604 | ||||||
367,675 | ||||||||
Capital Goods 0.6% | ||||||||
Aecon Group, Inc. | 5,261 | 72,912 | ||||||
Bird Construction, Inc. | 3,326 | 41,756 | ||||||
CAE, Inc. | 12,849 | 147,265 | ||||||
Genivar, Inc. | 1,049 | 30,022 | ||||||
MacDonald, Dettwiler & Associates Ltd. | 1,670 | 127,414 | ||||||
Russel Metals, Inc. | 7,129 | 196,917 | ||||||
Toromont Industries Ltd. | 6,089 | 134,902 | ||||||
Wajax Corp. | 2,633 | 94,118 | ||||||
845,306 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Newalta Corp. | 4,337 | 67,593 | ||||||
Progressive Waste Solutions Ltd. | 7,008 | 188,265 | ||||||
Ritchie Bros. Auctioneers, Inc. | 3,301 | 65,251 | ||||||
Stantec, Inc. | 1,860 | 110,531 | ||||||
Transcontinental, Inc., Class A | 11,967 | 191,100 | ||||||
622,740 |
32 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Consumer Durables & Apparel 0.2% | ||||||||
Dorel Industries, Inc., Class B | 3,771 | 140,113 | ||||||
Gildan Activewear, Inc. | 3,302 | 159,170 | ||||||
Lululemon Athletica, Inc. * | 347 | 23,960 | ||||||
323,243 | ||||||||
Consumer Services 0.0% | ||||||||
EnerCare, Inc. | 5,134 | 49,092 | ||||||
Diversified Financials 0.3% | ||||||||
AGF Management Ltd., Class B | 11,568 | 152,776 | ||||||
CI Financial Corp. | 7,277 | 242,043 | ||||||
Dundee Corp., Class A * | 2,767 | 53,050 | ||||||
GMP Capital, Inc. | 10,106 | 60,191 | ||||||
508,060 | ||||||||
Energy 2.1% | ||||||||
Advantage Oil & Gas Ltd. * | 33,165 | 134,867 | ||||||
AltaGas Ltd. | 4,626 | 171,259 | ||||||
Calfrac Well Services Ltd. | 861 | 26,838 | ||||||
Enerflex Ltd. | 3,641 | 51,578 | ||||||
Ensign Energy Services, Inc. | 10,007 | 171,030 | ||||||
Freehold Royalties Ltd. | 2,519 | 57,331 | ||||||
Gibson Energy, Inc. | 6,071 | 149,118 | ||||||
Gran Tierra Energy, Inc. * | 3,327 | 25,081 | ||||||
Keyera Corp. | 2,878 | 170,309 | ||||||
Lightstream Resources Ltd. | 17,320 | 111,297 | ||||||
Mullen Group Ltd. | 6,960 | 186,508 | ||||||
Nuvista Energy Ltd. * | 6,297 | 40,162 | ||||||
Pacific Rubiales Energy Corp. | 7,115 | 147,193 | ||||||
Parkland Fuel Corp. | 5,724 | 104,911 | ||||||
Pason Systems, Inc. | 1,327 | 27,580 | ||||||
Pembina Pipeline Corp. | 6,656 | 218,388 | ||||||
Petrominerales Ltd. | 13,197 | 151,759 | ||||||
Peyto Exploration & Development Corp. | 3,686 | 111,077 | ||||||
Precision Drilling Corp. | 27,408 | 289,944 | ||||||
Savanna Energy Services Corp. | 6,473 | 48,672 | ||||||
ShawCor Ltd. | 3,178 | 133,594 | ||||||
Trican Well Service Ltd. | 8,645 | 121,469 | ||||||
Trinidad Drilling Ltd. | 13,157 | 127,450 | ||||||
Veresen, Inc. | 12,827 | 158,700 | ||||||
Vermilion Energy, Inc. | 3,682 | 202,384 | ||||||
3,138,499 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Liquor Stores N.A. Ltd. | 2,560 | 36,903 | ||||||
The Jean Coutu Group (PJC), Inc., Class A | 7,793 | 137,750 | ||||||
The North West Co., Inc. | 5,004 | 124,446 | ||||||
299,099 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Cott Corp. | 9,638 | 78,942 | ||||||
Maple Leaf Foods, Inc. | 11,110 | 163,562 | ||||||
242,504 | ||||||||
Insurance 0.1% | ||||||||
Industrial Alliance Insurance & Financial Services, Inc. | 3,975 | 178,268 | ||||||
Materials 1.3% | ||||||||
Agnico-Eagle Mines Ltd. | 4,413 | 131,038 | ||||||
Canfor Corp. * | 4,085 | 84,666 | ||||||
CCL Industries, Inc., Class B | 1,319 | 90,577 | ||||||
Centerra Gold, Inc. | 13,775 | 55,092 | ||||||
Chemtrade Logistics Income Fund | 4,210 | 68,804 | ||||||
Dominion Diamond Corp. * | 5,155 | 69,613 | ||||||
Eldorado Gold Corp. | 8,992 | 60,628 | ||||||
Franco-Nevada Corp. | 587 | 26,410 | ||||||
HudBay Minerals, Inc. | 14,232 | 116,023 | ||||||
IAMGOLD Corp. | 23,961 | 122,488 | ||||||
Lundin Mining Corp. * | 31,531 | 142,134 | ||||||
Major Drilling Group International, Inc. | 6,540 | 51,560 | ||||||
Methanex Corp. | 6,172 | 357,954 | ||||||
New Gold, Inc. * | 3,722 | 21,847 | ||||||
PAN American Silver Corp. | 5,166 | 54,898 | ||||||
Sherritt International Corp. | 44,406 | 152,045 | ||||||
Silver Wheaton Corp. | 1,976 | 44,840 | ||||||
Thompson Creek Metals Co., Inc. (a)* | 25,247 | 81,360 | ||||||
West Fraser Timber Co., Ltd. | 2,374 | 217,602 | ||||||
1,949,579 | ||||||||
Media 0.5% | ||||||||
Aimia, Inc. | 9,838 | 173,897 | ||||||
Cineplex, Inc. | 3,425 | 137,966 | ||||||
Cogeco Cable, Inc. | 1,589 | 75,133 | ||||||
Corus Entertainment, Inc., Class B | 4,855 | 113,151 | ||||||
Quebecor, Inc., Class B | 10,870 | 268,766 | ||||||
768,913 | ||||||||
Real Estate 0.4% | ||||||||
Boardwalk Real Estate Investment Trust | 825 | 46,929 | ||||||
Brookfield Office Properties, Inc. | 9,207 | 172,016 | ||||||
Calloway Real Estate Investment Trust | 1,943 | 46,774 | ||||||
Canadian Real Estate Investment Trust | 1,132 | 46,110 | ||||||
First Capital Realty, Inc. | 1,352 | 23,496 | ||||||
Granite Real Estate Investment Trust | 2,403 | 83,476 | ||||||
H&R REIT | 2,957 | 61,259 | ||||||
RioCan REIT | 4,504 | 109,938 | ||||||
589,998 | ||||||||
Retailing 0.2% | ||||||||
Dollarama, Inc. | 1,544 | 132,713 | ||||||
Reitmans (Canada) Ltd., Class A | 11,295 | 74,206 | ||||||
Sears Canada, Inc. | 7,384 | 102,688 | ||||||
309,607 | ||||||||
Software & Services 0.1% | ||||||||
Davis & Henderson Corp. | 4,156 | 107,024 | ||||||
Open Text Corp. | 1,377 | 101,190 | ||||||
208,214 | ||||||||
Telecommunication Services 0.1% | ||||||||
Manitoba Telecom Services, Inc. | 4,000 | 113,058 | ||||||
Transportation 0.1% | ||||||||
TransForce, Inc. | 6,767 | 149,859 | ||||||
Westshore Terminals Investment Corp. | 2,054 | 67,629 | ||||||
217,488 |
See financial notes 33
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 0.6% | ||||||||
Atco Ltd., Class I | 5,425 | 251,777 | ||||||
Capital Power Corp. | 6,725 | 139,318 | ||||||
Emera, Inc. | 6,471 | 190,782 | ||||||
Just Energy Group, Inc. (a) | 16,525 | 117,283 | ||||||
Northland Power, Inc. | 2,677 | 42,415 | ||||||
Superior Plus Corp. | 16,888 | 180,113 | ||||||
921,688 | ||||||||
11,876,751 | ||||||||
Denmark 1.5% | ||||||||
Banks 0.3% | ||||||||
Jyske Bank A/S - Reg’d * | 4,095 | 231,530 | ||||||
Sydbank A/S * | 6,604 | 195,278 | ||||||
426,808 | ||||||||
Capital Goods 0.2% | ||||||||
A/S Schouw & Co. | 861 | 32,111 | ||||||
NKT Holding A/S | 2,910 | 141,221 | ||||||
Rockwool International A/S, B Shares | 698 | 109,787 | ||||||
Solar A/S, B Shares | 842 | 47,976 | ||||||
331,095 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Pandora A/S | 1,964 | 93,637 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Royal UNIBREW | 541 | 69,432 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Coloplast A/S, Class B | 2,301 | 150,082 | ||||||
GN Store Nord A/S | 4,862 | 110,916 | ||||||
William Demant Holding A/S * | 720 | 71,299 | ||||||
332,297 | ||||||||
Insurance 0.2% | ||||||||
Topdanmark A/S * | 4,369 | 118,915 | ||||||
Tryg A/S | 1,267 | 115,699 | ||||||
234,614 | ||||||||
Materials 0.0% | ||||||||
Christian Hansen Holding A/S | 1,389 | 51,467 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
H. Lundbeck A/S | 5,896 | 126,759 | ||||||
Novozymes A/S, B Shares | 5,141 | 201,350 | ||||||
328,109 | ||||||||
Software & Services 0.1% | ||||||||
SimCorp A/S | 2,591 | 84,825 | ||||||
Transportation 0.2% | ||||||||
D/S Norden A/S | 6,066 | 266,806 | ||||||
2,219,090 | ||||||||
Finland 2.0% | ||||||||
Automobiles & Components 0.2% | ||||||||
Nokian Renkaat Oyj | 5,036 | 254,702 | ||||||
Capital Goods 0.6% | ||||||||
Cargotec Oyj, B Shares | 3,806 | 138,978 | ||||||
Cramo Oyj | 4,069 | 81,354 | ||||||
Konecranes Oyj | 3,926 | 132,267 | ||||||
Outotec Oyj (a) | 8,540 | 84,453 | ||||||
Ramirent Oyj | 6,494 | 78,033 | ||||||
Uponor Oyj | 7,069 | 139,626 | ||||||
YIT Oyj | 12,075 | 156,627 | ||||||
811,338 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Amer Sports Oyj | 8,812 | 180,799 | ||||||
Diversified Financials 0.1% | ||||||||
Pohjola Bank plc, A Shares | 8,585 | 156,339 | ||||||
Materials 0.7% | ||||||||
Huhtamaki Oyj | 10,196 | 245,086 | ||||||
Kemira Oyj | 10,495 | 168,509 | ||||||
Metsa Board Oyj, B Shares | 31,516 | 122,292 | ||||||
Outokumpu Oyj (a)* | 316,477 | 175,755 | ||||||
Rautaruukki Oyj | 35,030 | 302,984 | ||||||
Tikkurila Oyj | 2,468 | 63,986 | ||||||
1,078,612 | ||||||||
Media 0.1% | ||||||||
Sanoma Oyj (a) | 23,537 | 204,213 | ||||||
Real Estate 0.0% | ||||||||
Sponda Oyj | 10,033 | 51,991 | ||||||
Retailing 0.1% | ||||||||
Stockmann Oyj Abp, B Shares | 4,847 | 77,390 | ||||||
Software & Services 0.1% | ||||||||
Tieto Oyj | 8,813 | 193,619 | ||||||
3,009,003 | ||||||||
France 4.7% | ||||||||
Automobiles & Components 0.2% | ||||||||
Faurecia * | 7,613 | 221,872 | ||||||
Plastic Omnium S.A. | 4,754 | 135,817 | ||||||
357,689 | ||||||||
Banks 0.1% | ||||||||
Natixis | 34,810 | 187,194 | ||||||
Capital Goods 0.4% | ||||||||
Areva S.A. * | 5,176 | 122,562 | ||||||
Mersen | 3,247 | 118,775 | ||||||
Saft Groupe S.A. | 2,952 | 93,608 | ||||||
Zodiac Aerospace | 1,600 | 256,011 | ||||||
590,956 | ||||||||
Commercial & Professional Supplies 0.6% | ||||||||
Bureau Veritas S.A. | 5,124 | 154,569 | ||||||
Derichebourg S.A. * | 15,626 | 54,609 | ||||||
Edenred | 5,084 | 172,590 | ||||||
Societe BIC S.A. | 1,578 | 197,053 | ||||||
Teleperformance | 5,313 | 281,243 | ||||||
860,064 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Nexity S.A. | 4,220 | 165,232 | ||||||
SEB S.A. | 2,110 | 189,322 | ||||||
354,554 | ||||||||
Consumer Services 0.1% | ||||||||
Club Mediterranee S.A. * | 4,007 | 94,502 | ||||||
Diversified Financials 0.2% | ||||||||
Eurazeo S.A. | 3,335 | 251,802 |
34 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.1% | ||||||||
Bourbon S.A. | 3,813 | 108,670 | ||||||
Etablissements Maurel et Prom | 3,872 | 62,339 | ||||||
171,009 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Remy Cointreau S.A. | 606 | 59,692 | ||||||
Vilmorin & Cie | 352 | 41,526 | ||||||
101,218 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
bioMerieux | 853 | 85,657 | ||||||
Orpea | 1,027 | 55,393 | ||||||
141,050 | ||||||||
Insurance 0.1% | ||||||||
Euler Hermes S.A. | 1,057 | 139,553 | ||||||
Materials 0.2% | ||||||||
Eramet | 1,381 | 131,141 | ||||||
Imerys S.A. | 2,961 | 237,531 | ||||||
368,672 | ||||||||
Media 0.7% | ||||||||
Havas S.A. | 14,341 | 119,477 | ||||||
Ipsos | 2,176 | 91,597 | ||||||
JC Decaux S.A. | 3,599 | 144,593 | ||||||
Metropole Television S.A. | 9,541 | 219,899 | ||||||
Societe Television Francaise 1 | 14,913 | 287,342 | ||||||
Technicolor - Reg’d * | 45,756 | 246,896 | ||||||
1,109,804 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Ipsen S.A. | 1,748 | 76,567 | ||||||
Real Estate 0.5% | ||||||||
Fonciere des Regions | 2,430 | 208,107 | ||||||
Gecina S.A. | 953 | 127,174 | ||||||
ICADE | 2,154 | 198,124 | ||||||
Klepierre | 4,192 | 188,016 | ||||||
Mercialys | 1,338 | 28,840 | ||||||
Societe Immobilliere de Location pour l’Industrie et le Commerce | 477 | 54,402 | ||||||
804,663 | ||||||||
Software & Services 0.3% | ||||||||
Alten | 1,755 | 79,355 | ||||||
Altran Technologies S.A. | 9,788 | 86,745 | ||||||
Dassault Systemes S.A. | 1,016 | 123,477 | ||||||
UbiSoft Entertainment S.A. * | 11,554 | 148,210 | ||||||
437,787 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Ingenico | 1,132 | 85,034 | ||||||
Neopost S.A. | 3,538 | 267,123 | ||||||
352,157 | ||||||||
Telecommunication Services 0.1% | ||||||||
Iliad S.A. | 521 | 119,124 | ||||||
Transportation 0.4% | ||||||||
Aeroports de Paris | 2,216 | 236,791 | ||||||
Bollore | 268 | 146,145 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 16,878 | 163,394 | ||||||
546,330 | ||||||||
7,064,695 | ||||||||
Germany 3.4% | ||||||||
Automobiles & Components 0.2% | ||||||||
ElringKlinger AG | 1,603 | 68,158 | ||||||
Grammer AG | 680 | 31,640 | ||||||
Leoni AG | 3,468 | 234,728 | ||||||
334,526 | ||||||||
Banks 0.1% | ||||||||
Aareal Bank AG * | 3,181 | 122,001 | ||||||
Capital Goods 0.8% | ||||||||
Bauer AG | 2,413 | 59,415 | ||||||
BayWa AG | 2,413 | 122,887 | ||||||
Deutz AG * | 10,897 | 103,357 | ||||||
DMG MORI SEIKI AG | 3,731 | 122,643 | ||||||
Duerr AG | 967 | 84,631 | ||||||
Heidelberger Druckmaschinen AG * | 65,481 | 175,055 | ||||||
Indus Holding AG | 2,849 | 102,376 | ||||||
Krones AG | 915 | 80,087 | ||||||
Nordex SE * | 6,858 | 120,198 | ||||||
Pfeiffer Vacuum Technology AG | 525 | 61,132 | ||||||
SGL Carbon SE | 1,902 | 74,172 | ||||||
Vossloh AG | 562 | 57,971 | ||||||
1,163,924 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Gerry Weber International AG | 990 | 41,024 | ||||||
Hugo Boss AG | 691 | 90,014 | ||||||
Puma SE | 265 | 78,836 | ||||||
209,874 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Suedzucker AG | 5,272 | 169,590 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Draegerwerk AG & Co. KGaA | 102 | 10,095 | ||||||
Rhoen-klinikum AG | 9,247 | 258,196 | ||||||
268,291 | ||||||||
Insurance 0.0% | ||||||||
Talanx AG * | 788 | 27,002 | ||||||
Materials 0.3% | ||||||||
Fuchs Petrolub AG | 815 | 55,406 | ||||||
Symrise AG | 5,237 | 221,731 | ||||||
Wacker Chemie AG | 2,416 | 226,881 | ||||||
504,018 | ||||||||
Media 0.2% | ||||||||
Axel Springer AG | 3,032 | 182,951 | ||||||
ProSiebenSat.1 Media AG - Reg’d | 3,997 | 190,026 | ||||||
372,977 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Gerresheimer AG | 1,757 | 116,223 | ||||||
Stada Arzneimittel AG | 4,498 | 258,553 | ||||||
374,776 | ||||||||
Real Estate 0.1% | ||||||||
Deutsche Euroshop AG | 1,116 | 49,613 | ||||||
Gagfah S.A. * | 4,453 | 63,121 | ||||||
GSW Immobilien AG | 504 | 23,393 | ||||||
136,127 |
See financial notes 35
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Retailing 0.1% | ||||||||
Fielmann AG | 706 | 78,953 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Aixtron SE * | 5,123 | 73,527 | ||||||
Kontron AG | 9,349 | 63,946 | ||||||
SMA Solar Technology AG | 1,452 | 59,189 | ||||||
196,662 | ||||||||
Software & Services 0.3% | ||||||||
Bechtle AG | 1,940 | 124,409 | ||||||
Software AG | 3,964 | 146,776 | ||||||
United Internet AG - Reg’d | 4,034 | 159,126 | ||||||
430,311 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Jenoptik AG | 3,582 | 62,577 | ||||||
Wincor Nixdorf AG | 3,664 | 242,257 | ||||||
304,834 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telefonica Deutschland Holding AG | 11,429 | 90,027 | ||||||
Transportation 0.2% | ||||||||
Fraport AG Frankfurt Airport Services Worldwide | 2,392 | 185,053 | ||||||
Hamburger Hafen und Logistik AG | 2,395 | 60,102 | ||||||
245,155 | ||||||||
5,029,048 | ||||||||
Greece 0.0% | ||||||||
Banks 0.0% | ||||||||
TT Hellenic Postbank S.A. (b)(c)* | 24,275 | — | ||||||
Hong Kong 2.6% | ||||||||
Automobiles & Components 0.0% | ||||||||
Xinyi Glass Holdings Ltd. | 26,000 | 25,750 | ||||||
Banks 0.2% | ||||||||
Bank of East Asia Ltd. | 43,600 | 188,950 | ||||||
Wing Hang Bank Ltd. | 6,000 | 85,481 | ||||||
274,431 | ||||||||
Capital Goods 0.1% | ||||||||
Johnson Electric Holdings Ltd. | 98,500 | 70,898 | ||||||
NWS Holdings Ltd. | 59,000 | 92,134 | ||||||
Singamas Container Holdings Ltd. | 68,000 | 15,870 | ||||||
178,902 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Techtronic Industries Co., Ltd. | 56,000 | 140,641 | ||||||
Consumer Services 0.4% | ||||||||
Cafe De Coral Holdings Ltd. | 18,000 | 61,776 | ||||||
Galaxy Entertainment Group Ltd. * | 5,000 | 37,325 | ||||||
Sands China Ltd. | 23,200 | 164,954 | ||||||
SJM Holdings Ltd. | 53,000 | 171,368 | ||||||
Wynn Macau Ltd. | 23,200 | 89,059 | ||||||
524,482 | ||||||||
Diversified Financials 0.1% | ||||||||
First Pacific Co., Ltd. | 110,000 | 125,074 | ||||||
Guoco Group Ltd. | 5,000 | 61,912 | ||||||
186,986 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Dairy Farm International Holdings Ltd. | 4,500 | 50,985 | ||||||
Media 0.1% | ||||||||
Television Broadcasts Ltd. | 10,000 | 58,466 | ||||||
Real Estate 0.9% | ||||||||
Great Eagle Holdings Ltd. | 15,000 | 53,414 | ||||||
Hang Lung Group Ltd. | 25,000 | 132,250 | ||||||
Hang Lung Properties Ltd. | 44,000 | 144,897 | ||||||
Henderson Land Development Co., Ltd. | 19,400 | 114,795 | ||||||
Hongkong Land Holdings Ltd. | 30,000 | 184,505 | ||||||
Hysan Development Co., Ltd. | 12,000 | 56,134 | ||||||
Kerry Properties Ltd. | 29,000 | 125,760 | ||||||
New World Development Co., Ltd. | 135,000 | 186,760 | ||||||
Sino Land Co., Ltd. | 98,000 | 137,444 | ||||||
Swire Properties Ltd. | 11,800 | 31,962 | ||||||
Wheelock & Co., Ltd. | 25,000 | 127,583 | ||||||
1,295,504 | ||||||||
Retailing 0.1% | ||||||||
Chow Sang Sang Holdings International Ltd. | 31,000 | 100,538 | ||||||
Luk Fook Holdings International Ltd. | 17,000 | 60,689 | ||||||
161,227 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
VTech Holdings Ltd. | 12,400 | 178,028 | ||||||
Telecommunication Services 0.0% | ||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | 96,000 | 42,126 | ||||||
Transportation 0.5% | ||||||||
Cathay Pacific Airways Ltd. | 107,000 | 211,967 | ||||||
MTR Corp., Ltd. | 38,000 | 147,210 | ||||||
Orient Overseas International Ltd. | 39,000 | 201,440 | ||||||
Pacific Basin Shipping Ltd. | 277,000 | 198,223 | ||||||
758,840 | ||||||||
3,876,368 | ||||||||
Ireland 0.7% | ||||||||
Capital Goods 0.3% | ||||||||
Grafton Group plc | 30,638 | 291,000 | ||||||
Kingspan Group plc | 10,545 | 176,391 | ||||||
467,391 | ||||||||
Consumer Services 0.1% | ||||||||
Paddy Power plc | 1,001 | 81,547 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
C&C Group plc | 23,458 | 137,331 | ||||||
Glanbia plc | 5,884 | 82,446 | ||||||
219,777 |
36 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Health Care Equipment & Services 0.1% | ||||||||
UDG Healthcare plc | 24,169 | 120,908 | ||||||
Insurance 0.0% | ||||||||
FBD Holdings plc | 3,071 | 66,297 | ||||||
Materials 0.1% | ||||||||
James Hardie Industries plc CDI | 10,487 | 108,470 | ||||||
Transportation 0.0% | ||||||||
Aer Lingus Group plc | 10,209 | 19,406 | ||||||
1,083,796 | ||||||||
Israel 1.2% | ||||||||
Banks 0.3% | ||||||||
Bank Hapoalim B.M. | 48,457 | 259,413 | ||||||
Israel Discount Bank Ltd., Class A * | 54,692 | 109,141 | ||||||
Mizrahi Tefahot Bank Ltd. | 6,357 | 74,516 | ||||||
443,070 | ||||||||
Capital Goods 0.1% | ||||||||
Clal Industries Ltd. | 12,514 | 55,773 | ||||||
Discount Investment Corp. - Reg’d * | 11,032 | 76,827 | ||||||
Elbit Systems Ltd. | 1,916 | 102,259 | ||||||
234,859 | ||||||||
Energy 0.2% | ||||||||
Delek Group Ltd. | 359 | 123,964 | ||||||
Oil Refineries Ltd. * | 211,543 | 68,376 | ||||||
Paz Oil Co., Ltd. * | 616 | 95,620 | ||||||
287,960 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Shufersal Ltd. | 14,753 | 59,525 | ||||||
Materials 0.1% | ||||||||
The Israel Corp., Ltd. * | 311 | 156,485 | ||||||
Software & Services 0.2% | ||||||||
Check Point Software Technologies Ltd. * | 3,949 | 229,121 | ||||||
NICE Systems Ltd. | 1,486 | 58,268 | ||||||
287,389 | ||||||||
Telecommunication Services 0.3% | ||||||||
Cellcom Israel Ltd. * | 18,343 | 213,583 | ||||||
Partner Communications Co., Ltd. * | 22,143 | 181,820 | ||||||
395,403 | ||||||||
1,864,691 | ||||||||
Italy 2.8% | ||||||||
Automobiles & Components 0.0% | ||||||||
Piaggio & C. S.p.A. | 22,502 | 64,935 | ||||||
Banks 0.3% | ||||||||
Banca Carige S.p.A. (a)* | 170,578 | 136,387 | ||||||
Banca Piccolo Credito Valtellinese Scarl * | 99,409 | 177,894 | ||||||
Banca Popolare Di Sondrio Scarl | 19,956 | 114,862 | ||||||
429,143 | ||||||||
Capital Goods 0.3% | ||||||||
Astaldi S.p.A. | 6,811 | 66,350 | ||||||
C.I.R. S.p.A. - Compagnie Industriali Riunite * | 102,541 | 170,564 | ||||||
Danieli S.p.A. - Officine Meccaniche Danieli & C. | 620 | 19,058 | ||||||
Danieli S.p.A. - Officine Meccaniche Danieli & C. - RSP | 2,469 | 50,997 | ||||||
Impregilo S.p.A. | 16,696 | 106,288 | ||||||
413,257 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
De’Longhi S.p.A. | 1,634 | 25,234 | ||||||
Geox S.p.A. | 16,956 | 46,430 | ||||||
Indesit Co., S.p.A. | 6,916 | 71,425 | ||||||
Luxottica Group S.p.A. | 4,185 | 226,707 | ||||||
Prada S.p.A. | 7,000 | 68,296 | ||||||
Safilo Group S.p.A. * | 4,745 | 97,006 | ||||||
Tod’s S.p.A. | 397 | 66,065 | ||||||
601,163 | ||||||||
Consumer Services 0.2% | ||||||||
Autogrill S.p.A. * | 9,777 | 87,766 | ||||||
GTECH S.p.A. | 5,220 | 158,526 | ||||||
246,292 | ||||||||
Diversified Financials 0.1% | ||||||||
Azimut Holding S.p.A. | 2,905 | 73,692 | ||||||
Energy 0.2% | ||||||||
ERG S.p.A. | 16,044 | 195,929 | ||||||
Saras S.p.A. * | 120,286 | 148,883 | ||||||
344,812 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Davide Campari-Milano S.p.A. | 9,378 | 81,729 | ||||||
Parmalat S.p.A. | 38,790 | 130,471 | ||||||
212,200 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Sorin S.p.A. * | 19,495 | 53,709 | ||||||
Insurance 0.4% | ||||||||
Fondiaria-Sai S.p.A. * | 44,396 | 113,746 | ||||||
Mediolanum S.p.A. | 7,671 | 66,756 | ||||||
Societa Cattolica di Assicurazioni S.c.r.l. | 4,548 | 115,143 | ||||||
Unipol Gruppo Finanziario S.p.A. | 46,212 | 245,032 | ||||||
540,677 | ||||||||
Materials 0.1% | ||||||||
Buzzi Unicem S.p.A. | 11,705 | 202,653 | ||||||
Media 0.0% | ||||||||
RCS MediaGroup S.p.A. * | 12,983 | 28,568 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Recordati S.p.A. | 6,145 | 80,718 | ||||||
Real Estate 0.0% | ||||||||
Beni Stabili S.p.A. | 77,862 | 53,301 | ||||||
Transportation 0.2% | ||||||||
Alitalia S.p.A. (b)(c)* | 14,782 | — | ||||||
Ansaldo STS S.p.A. | 6,370 | 67,594 | ||||||
Autostrada Torino-Milano S.p.A. | 6,272 | 94,686 | ||||||
Societa Iniziative Autostradali e Servizi S.p.A. | 7,523 | 78,855 | ||||||
241,135 |
See financial notes 37
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 0.4% | ||||||||
ACEA S.p.A. | 12,522 | 130,292 | ||||||
Enel Green Power S.p.A. | 62,560 | 152,181 | ||||||
Hera S.p.A. | 90,692 | 182,722 | ||||||
Iren S.p.A. | 121,243 | 181,280 | ||||||
646,475 | ||||||||
4,232,730 | ||||||||
Japan 36.9% | ||||||||
Automobiles & Components 3.1% | ||||||||
Aisan Industry Co., Ltd. | 5,400 | 54,398 | ||||||
Akebono Brake Industry Co., Ltd. | 10,300 | 49,591 | ||||||
Calsonic Kansei Corp. | 34,000 | 163,464 | ||||||
EXEDY Corp. | 4,700 | 139,592 | ||||||
F.C.C. Co., Ltd. | 4,100 | 93,664 | ||||||
Futaba Industrial Co., Ltd. * | 23,100 | 86,067 | ||||||
Imasen Electric Industrial | 1,399 | 19,798 | ||||||
Keihin Corp. | 9,200 | 150,311 | ||||||
Koito Manufacturing Co., Ltd. | 11,000 | 200,241 | ||||||
KYB Co., Ltd. | 20,000 | 115,807 | ||||||
Mitsuba Corp. | 1,500 | 22,386 | ||||||
Mitsubishi Motors Corp. * | 14,600 | 164,062 | ||||||
Musashi Seimitsu Industry Co., Ltd. | 4,000 | 94,389 | ||||||
NGK Spark Plug Co., Ltd. | 13,000 | 296,895 | ||||||
Nifco, Inc. | 5,300 | 141,238 | ||||||
Nippon Seiki Co., Ltd. | 4,000 | 65,216 | ||||||
Nissan Shatai Co., Ltd. | 15,000 | 258,616 | ||||||
Nissin Kogyo Co., Ltd. | 5,500 | 102,881 | ||||||
NOK Corp. | 12,600 | 194,775 | ||||||
Press Kogyo Co., Ltd. | 13,000 | 57,026 | ||||||
Riken Corp. | 11,000 | 48,141 | ||||||
Sanden Corp. | 15,000 | 60,691 | ||||||
Showa Corp. | 7,300 | 101,319 | ||||||
Sumitomo Rubber Industries Ltd. | 14,900 | 207,430 | ||||||
T RAD Co., Ltd. | 16,000 | 50,726 | ||||||
Tachi-S Co., Ltd. | 5,500 | 87,784 | ||||||
Takata Corp. | 5,800 | 146,287 | ||||||
The Yokohama Rubber Co., Ltd. | 19,000 | 185,850 | ||||||
Tokai Rika Co., Ltd. | 8,900 | 188,726 | ||||||
Tokai Rubber Industries Ltd. | 8,400 | 77,326 | ||||||
Toyo Tire & Rubber Co., Ltd. | 23,000 | 134,387 | ||||||
Toyoda Gosei Co., Ltd. | 9,100 | 227,541 | ||||||
Toyota Boshoku Corp. | 15,100 | 202,251 | ||||||
TS Tech Co., Ltd. | 5,100 | 191,073 | ||||||
Unipres Corp. | 5,900 | 119,051 | ||||||
Yorozu Corp. | 3,100 | 61,166 | ||||||
4,560,166 | ||||||||
Banks 1.7% | ||||||||
Aozora Bank Ltd. | 11,000 | 31,977 | ||||||
Fukuoka Financial Group, Inc. | 40,000 | 180,418 | ||||||
Hokuhoku Financial Group, Inc. | 95,000 | 195,885 | ||||||
Seven Bank Ltd. | 23,500 | 83,173 | ||||||
Shinsei Bank Ltd. | 79,000 | 184,963 | ||||||
Suruga Bank Ltd. | 7,000 | 111,043 | ||||||
The 77 Bank Ltd. | 13,000 | 64,296 | ||||||
The Awa Bank Ltd. | 10,000 | 52,225 | ||||||
The Bank of Kyoto Ltd. | 10,000 | 88,113 | ||||||
The Chugoku Bank Ltd. | 7,000 | 100,635 | ||||||
The Daishi Bank Ltd. | 13,000 | 45,386 | ||||||
The Gunma Bank Ltd. | 18,000 | 104,151 | ||||||
The Hachijuni Bank Ltd. | 20,000 | 123,552 | ||||||
The Hiroshima Bank Ltd. | 18,000 | 76,606 | ||||||
The Hyakugo Bank Ltd. | 12,000 | 48,795 | ||||||
The Iyo Bank Ltd. | 9,000 | 93,975 | ||||||
The Joyo Bank Ltd. | 19,000 | 98,689 | ||||||
The Juroku Bank Ltd. | 14,000 | 54,814 | ||||||
The Kagoshima Bank Ltd. | 7,000 | 47,119 | ||||||
The Keiyo Bank Ltd. | 11,000 | 56,020 | ||||||
The Kiyo Bank Ltd. * | 3,500 | 46,522 | ||||||
The Musashino Bank Ltd. | 1,400 | 49,120 | ||||||
The Nishi-Nippon City Bank Ltd. | 29,000 | 78,351 | ||||||
The Ogaki Kyoritsu Bank Ltd. | 21,000 | 59,153 | ||||||
The San-in Godo Bank Ltd. | 8,000 | 58,077 | ||||||
The Shiga Bank Ltd. | 7,000 | 38,258 | ||||||
The Shizuoka Bank Ltd. | 16,000 | 180,022 | ||||||
Yamaguchi Financial Group, Inc. | 12,000 | 113,084 | ||||||
2,464,422 | ||||||||
Capital Goods 7.2% | ||||||||
Aica Kogyo Co., Ltd. | 4,400 | 90,075 | ||||||
Amada Co., Ltd. | 29,000 | 249,475 | ||||||
Asahi Diamond Industrial Co., Ltd. | 4,200 | 40,772 | ||||||
Central Glass Co., Ltd. | 36,000 | 125,203 | ||||||
Chiyoda Corp. | 9,000 | 114,131 | ||||||
CKD Corp. | 6,800 | 63,124 | ||||||
COMSYS Holdings Corp. | 16,000 | 222,139 | ||||||
Daifuku Co., Ltd. | 12,000 | 154,312 | ||||||
Daihen Corp. | 14,000 | 59,816 | ||||||
DMG Mori Seiki Co., Ltd. | 9,300 | 150,864 | ||||||
Ebara Corp. | 39,000 | 209,677 | ||||||
Fuji Electric Co., Ltd. | 55,000 | 246,561 | ||||||
Fuji Machine Manufacturing Co., Ltd. | 9,138 | 82,308 | ||||||
Fujitec Co., Ltd. | 6,000 | 73,779 | ||||||
Furukawa Co., Ltd. | 38,000 | 79,221 | ||||||
Futaba Corp. | 5,500 | 76,193 | ||||||
Glory Ltd. | 6,100 | 151,261 | ||||||
GS Yuasa Corp. | 30,000 | 180,190 | ||||||
Hino Motors Ltd. | 17,000 | 240,202 | ||||||
Hitachi Construction Machinery Co., Ltd. | 9,900 | 209,668 | ||||||
Hitachi Koki Co., Ltd. | 6,000 | 43,982 | ||||||
Hitachi Zosen Corp. | 13,300 | 105,753 | ||||||
Hoshizaki Electric Co., Ltd. | 3,600 | 131,922 | ||||||
Inaba Denki Sangyo Co., Ltd. | 3,300 | 99,339 | ||||||
Inabata & Co., Ltd. | 12,600 | 123,576 | ||||||
Iseki & Co., Ltd. | 12,000 | 39,017 | ||||||
Iwatani Corp. | 38,000 | 175,011 | ||||||
Kamei Corp. | 10,500 | 78,185 | ||||||
Kandenko Co., Ltd. | 27,000 | 170,607 | ||||||
Kanematsu Corp. | 86,000 | 116,656 | ||||||
Keihan Electric Railway Co., Ltd. | 28,000 | 115,183 | ||||||
Kinden Corp. | 26,000 | 285,552 | ||||||
Kitz Corp. | 14,900 | 64,204 | ||||||
Komori Corp. | 7,000 | 110,076 | ||||||
Kurita Water Industries Ltd. | 9,200 | 200,781 | ||||||
Kuroda Electric Co., Ltd. | 7,000 | 98,054 | ||||||
Kyowa Exeo Corp. | 14,300 | 169,806 | ||||||
Mabuchi Motor Co., Ltd. | 1,800 | 95,703 | ||||||
Maeda Corp. | 19,000 | 136,702 |
38 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Maeda Road Construction Co., Ltd. | 9,000 | 160,029 | ||||||
Makino Milling Machine Co., Ltd. | 8,000 | 52,383 | ||||||
Meidensha Corp. | 18,000 | 67,320 | ||||||
Minebea Co., Ltd. | 47,000 | 260,190 | ||||||
Mirait Holdings Corp. | 12,500 | 110,903 | ||||||
Misumi Group, Inc. | 4,600 | 134,662 | ||||||
Miura Co., Ltd. | 2,900 | 76,068 | ||||||
Nabtesco Corp. | 4,900 | 119,597 | ||||||
Nachi-Fujikoshi Corp. | 13,000 | 63,825 | ||||||
NGK Insulators Ltd. | 21,000 | 353,220 | ||||||
Nichias Corp. | 11,000 | 74,420 | ||||||
Nippo Corp. | 7,000 | 131,327 | ||||||
Nippon Densetsu Kogyo Co., Ltd. | 3,000 | 37,500 | ||||||
Nishimatsu Construction Co., Ltd. | 57,000 | 201,232 | ||||||
Nisshinbo Holdings, Inc. | 19,000 | 167,813 | ||||||
Nitta Corp. | 2,400 | 50,550 | ||||||
Nitto Boseki Co., Ltd. | 13,000 | 60,444 | ||||||
Nitto Kogyo Corp. | 3,100 | 49,013 | ||||||
Noritake Co., Ltd. | 16,000 | 43,506 | ||||||
Noritz Corp. | 4,500 | 104,306 | ||||||
NTN Corp. * | 72,000 | 346,093 | ||||||
Oiles Corp. | 2,100 | 46,920 | ||||||
Okuma Corp. | 10,000 | 84,473 | ||||||
Okumura Corp. | 18,000 | 85,467 | ||||||
OSG Corp. | 4,500 | 72,795 | ||||||
Penta-Ocean Construction Co., Ltd. | 34,000 | 102,797 | ||||||
Ryobi Ltd. | 28,000 | 123,747 | ||||||
Sanki Engineering Co., Ltd. | 5,000 | 31,218 | ||||||
Sankyo Tateyama, Inc. | 3,700 | 78,191 | ||||||
Sanwa Holdings Corp. | 22,000 | 140,994 | ||||||
ShinMaywa Industries Ltd. | 10,000 | 78,349 | ||||||
Sintokogio Ltd. | 5,500 | 41,386 | ||||||
Tadano Ltd. | 6,000 | 82,508 | ||||||
Taikisha Ltd. | 3,200 | 74,384 | ||||||
Takara Standard Co., Ltd. | 9,000 | 72,412 | ||||||
Takasago Thermal Engineering Co., Ltd. | 8,800 | 73,543 | ||||||
The Japan Steel Works Ltd. | 26,000 | 145,249 | ||||||
The Nippon Road Co., Ltd. | 11,000 | 68,509 | ||||||
The Nippon Signal Co., Ltd. | 7,000 | 53,235 | ||||||
THK Co., Ltd. | 8,800 | 192,090 | ||||||
TOA Corp. * | 35,000 | 85,055 | ||||||
Toda Corp. | 40,000 | 146,233 | ||||||
TOKAI Holdings Corp. | 9,900 | 35,062 | ||||||
Toshiba Machine Co., Ltd. | 13,000 | 67,235 | ||||||
Toshiba Plant Systems & Services Corp. | 3,000 | 52,933 | ||||||
Totetsu Kogyo Co., Ltd. | 1,200 | 27,027 | ||||||
TOTO Ltd. | 23,000 | 325,272 | ||||||
Toyo Engineering Corp. | 17,000 | 72,436 | ||||||
Trusco Nakayama Corp. | 4,100 | 87,290 | ||||||
Tsubakimoto Chain Co. | 13,000 | 86,124 | ||||||
Ushio, Inc. | 10,800 | 136,414 | ||||||
Yamazen Corp. | 9,400 | 59,610 | ||||||
Yuasa Trading Co., Ltd. | 30,000 | 60,574 | ||||||
10,733,013 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Aeon Delight Co., Ltd. | 1,200 | 23,318 | ||||||
Duskin Co., Ltd. | 7,200 | 146,347 | ||||||
Kokuyo Co., Ltd. | 18,800 | 143,871 | ||||||
Kyodo Printing Co., Ltd. | 9,000 | 25,061 | ||||||
Matsuda Sangyo Co., Ltd. | 3,496 | 48,963 | ||||||
Meitec Corp. | 2,400 | 63,976 | ||||||
Moshi Moshi Hotline, Inc. | 3,700 | 46,507 | ||||||
Nissha Printing Co., Ltd. (a)* | 5,200 | 84,980 | ||||||
Okamura Corp. | 9,000 | 65,044 | ||||||
Park24 Co., Ltd. | 4,000 | 78,098 | ||||||
Sato Holdings Corp. | 2,500 | 50,716 | ||||||
Sohgo Security Services Co., Ltd. | 9,900 | 200,129 | ||||||
Temp Holdings Co., Ltd. | 1,600 | 46,605 | ||||||
Toppan Forms Co., Ltd. | 10,000 | 93,266 | ||||||
1,116,881 | ||||||||
Consumer Durables & Apparel 1.7% | ||||||||
Alpine Electronics, Inc. | 8,400 | 101,693 | ||||||
Asics Corp. | 8,300 | 146,334 | ||||||
Casio Computer Co., Ltd. | 25,800 | 246,943 | ||||||
Foster Electric Co., Ltd. | 3,700 | 72,392 | ||||||
Funai Electric Co., Ltd. | 9,800 | 103,945 | ||||||
Gunze Ltd. | 39,000 | 104,159 | ||||||
Haseko Corp. * | 24,700 | 183,080 | ||||||
JVC KENWOOD Corp. | 41,460 | 81,208 | ||||||
Kurabo Industries Ltd. | 31,000 | 54,069 | ||||||
Onward Holdings Co., Ltd. | 18,000 | 148,982 | ||||||
PanaHome Corp. | 13,000 | 87,944 | ||||||
Pioneer Corp. (a)* | 74,800 | 137,692 | ||||||
Rinnai Corp. | 1,700 | 131,580 | ||||||
Sangetsu Co., Ltd. | 3,800 | 100,857 | ||||||
Sankyo Co., Ltd. | 4,700 | 223,527 | ||||||
Sanyo Shokai Ltd. | 20,000 | 55,189 | ||||||
Sumitomo Forestry Co., Ltd. | 19,300 | 224,535 | ||||||
Tamron Co., Ltd. | 1,700 | 36,273 | ||||||
Token Corp. | 1,200 | 63,742 | ||||||
Tomy Co., Ltd. | 12,800 | 65,965 | ||||||
TSI Holdings Co., Ltd. | 5,800 | 40,996 | ||||||
Unitika Ltd. * | 78,000 | 47,763 | ||||||
Wacoal Holdings Corp. | 11,000 | 118,118 | ||||||
2,576,986 | ||||||||
Consumer Services 0.7% | ||||||||
Accordia Golf Co., Ltd. | 7,000 | 76,826 | ||||||
Doutor Nichires Holdings Co., Ltd. | 4,200 | 76,284 | ||||||
H.I.S. Co., Ltd. | 2,300 | 124,050 | ||||||
McDonald’s Holdings Co., Ltd. | 6,533 | 180,450 | ||||||
MOS Food Services, Inc. | 2,700 | 52,349 | ||||||
Plenus Co., Ltd. | 3,900 | 88,466 | ||||||
Resorttrust, Inc. | 2,000 | 76,186 | ||||||
Round One Corp. | 9,700 | 51,463 | ||||||
Royal Holdings Co., Ltd. | 1,800 | 28,877 | ||||||
Saizeriya Co., Ltd. | 4,400 | 54,388 | ||||||
Tokyo Dome Corp. | 9,000 | 61,894 | ||||||
Yoshinoya Holdings Co., Ltd. | 7,900 | 90,641 | ||||||
Zensho Holdings Co., Ltd. | 5,000 | 57,062 | ||||||
1,018,936 | ||||||||
Diversified Financials 0.8% | ||||||||
Acom Co., Ltd. * | 33,700 | 131,958 | ||||||
AEON Financial Service Co., Ltd. | 4,200 | 128,983 | ||||||
Aiful Corp. * | 33,100 | 159,946 | ||||||
Century Tokyo Leasing Corp. | 900 | 28,472 | ||||||
Daiwa Securities Group, Inc. | 34,000 | 310,548 | ||||||
Hitachi Capital Corp. | 2,600 | 69,928 |
See financial notes 39
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Jaccs Co., Ltd. | 13,000 | 62,112 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. (a) | 17,200 | 97,261 | ||||||
Orient Corp. * | 41,000 | 102,691 | ||||||
SBI Holdings, Inc. | 12,400 | 150,063 | ||||||
1,241,962 | ||||||||
Energy 0.1% | ||||||||
Japan Petroleum Exploration Co. | 3,200 | 130,286 | ||||||
Shinko Plantech Co., Ltd. | 6,100 | 49,250 | ||||||
179,536 | ||||||||
Food & Staples Retailing 1.1% | ||||||||
Ain Pharmaciez, Inc. | 600 | 26,026 | ||||||
Arcs Co., Ltd. | 6,900 | 129,334 | ||||||
Cawachi Ltd. | 4,500 | 84,642 | ||||||
cocokara fine, Inc. | 3,400 | 96,847 | ||||||
Cosmos Pharmaceutical Corp. | 200 | 24,366 | ||||||
FamilyMart Co., Ltd. | 4,000 | 179,187 | ||||||
Heiwado Co., Ltd. | 6,500 | 101,370 | ||||||
Kato Sangyo Co., Ltd. | 7,100 | 145,748 | ||||||
Matsumotokiyoshi Holdings Co., Ltd. | 6,000 | 202,454 | ||||||
Mitsubishi Shokuhin Co., Ltd. | 1,400 | 39,210 | ||||||
San-A Co., Ltd. | 1,400 | 39,900 | ||||||
Sugi Holdings Co., Ltd. | 3,000 | 125,473 | ||||||
Sundrug Co., Ltd. | 2,500 | 124,623 | ||||||
Tsuruha Holdings, Inc. | 1,600 | 145,262 | ||||||
Valor Co., Ltd. | 7,500 | 108,250 | ||||||
Welcia Holdings Co., Ltd. | 1,000 | 60,489 | ||||||
Yokohama Reito Co., Ltd. | 4,300 | 34,033 | ||||||
1,667,214 | ||||||||
Food, Beverage & Tobacco 2.4% | ||||||||
Calbee, Inc. | 3,600 | 94,462 | ||||||
Coca-Cola Central Japan Co., Ltd. | 9,900 | 175,335 | ||||||
DyDo Drinco, Inc. | 1,700 | 71,995 | ||||||
Ezaki Glico Co., Ltd. | 10,000 | 111,098 | ||||||
Fuji Oil Co., Ltd. | 6,800 | 123,928 | ||||||
Hokuto Corp. | 2,400 | 46,041 | ||||||
House Foods Corp. | 9,400 | 148,893 | ||||||
Ito En Ltd. | 6,000 | 134,849 | ||||||
Itoham Foods, Inc. | 33,000 | 139,105 | ||||||
J-Oil Mills, Inc. | 20,000 | 63,184 | ||||||
Kagome Co., Ltd. | 6,800 | 117,998 | ||||||
Kewpie Corp. | 14,900 | 224,185 | ||||||
Kikkoman Corp. | 14,000 | 255,158 | ||||||
Marudai Food Co., Ltd. | 28,000 | 88,059 | ||||||
Maruha Nichiro Holdings, Inc. | 63,000 | 120,817 | ||||||
Megmilk Snow Brand Co., Ltd. | 9,400 | 133,490 | ||||||
Mitsui Sugar Co., Ltd. | 12,000 | 43,061 | ||||||
Morinaga & Co., Ltd. | 16,000 | 34,047 | ||||||
Morinaga Milk Industry Co., Ltd. | 58,000 | 180,847 | ||||||
Nichirei Corp. | 36,000 | 185,821 | ||||||
Nippon Flour Mills Co., Ltd. | 23,000 | 110,950 | ||||||
Nippon Suisan Kaisha Ltd. * | 54,000 | 110,144 | ||||||
Nissin Food Holdings Co., Ltd. | 5,200 | 222,580 | ||||||
Prima Meat Packers Ltd. | 27,000 | 57,245 | ||||||
Sapporo Holdings Ltd. | 41,000 | 182,315 | ||||||
Takara Holdings, Inc. | 13,000 | 119,214 | ||||||
The Nisshin Oillio Group Ltd. | 23,000 | 77,283 | ||||||
Warabeya Nichiyo Co., Ltd. | 3,300 | 61,572 | ||||||
Yakult Honsha Co., Ltd. | 3,900 | 198,095 | ||||||
3,631,771 | ||||||||
Health Care Equipment & Services 0.5% | ||||||||
Miraca Holdings, Inc. | 3,900 | 175,726 | ||||||
Nichii Gakkan Co. | 6,500 | 65,147 | ||||||
Nihon Kohden Corp. | 2,500 | 102,967 | ||||||
Nipro Corp. | 9,400 | 86,141 | ||||||
Ship Healthcare Holdings, Inc. | 700 | 28,724 | ||||||
Sysmex Corp. | 2,200 | 145,735 | ||||||
Toho Holdings Co., Ltd. | 7,700 | 149,075 | ||||||
753,515 | ||||||||
Household & Personal Products 0.6% | ||||||||
Fancl Corp. | 5,800 | 68,975 | ||||||
Kobayashi Pharmaceutical Co., Ltd. | 2,000 | 111,982 | ||||||
Kose Corp. | 3,500 | 102,287 | ||||||
Lion Corp. | 20,000 | 120,031 | ||||||
Mandom Corp. | 2,200 | 75,528 | ||||||
Pigeon Corp. | 1,400 | 72,230 | ||||||
Pola Orbis Holdings, Inc. | 2,000 | 67,763 | ||||||
Unicharm Corp. | 3,800 | 244,070 | ||||||
862,866 | ||||||||
Insurance 0.1% | ||||||||
Sony Financial Holdings, Inc. | 4,999 | 93,344 | ||||||
Materials 4.6% | ||||||||
Adeka Corp. | 12,900 | 151,686 | ||||||
Aichi Steel Corp. | 15,000 | 76,888 | ||||||
Air Water, Inc. | 12,000 | 171,531 | ||||||
Asahi Holdings, Inc. | 4,500 | 74,189 | ||||||
Chugoku Marine Paints Ltd. | 10,000 | 57,125 | ||||||
Daicel Corp. | 29,000 | 244,435 | ||||||
Daido Steel Co., Ltd. | 25,000 | 143,759 | ||||||
Daio Paper Corp. | 19,000 | 140,671 | ||||||
Dowa Holdings Co., Ltd. | 22,000 | 207,631 | ||||||
Earth Chemical Co., Ltd. | 1,500 | 55,719 | ||||||
FP Corp. | 1,000 | 77,270 | ||||||
Fuji Seal International, Inc. | 2,700 | 81,474 | ||||||
Furukawa-Sky Aluminum Corp. | 36,300 | 119,388 | ||||||
Godo Steel Ltd. | 29,000 | 53,314 | ||||||
Hitachi Chemical Co., Ltd. | 15,000 | 230,127 | ||||||
Hitachi Metals Ltd. | 16,990 | 228,781 | ||||||
Hokuetsu Kishu Paper Co., Ltd. | 17,500 | 81,538 | ||||||
Ishihara Sangyo Kaisha Ltd. * | 52,000 | 48,230 | ||||||
Kansai Paint Co., Ltd. | 12,000 | 161,243 | ||||||
Kureha Corp. | 23,000 | 88,699 | ||||||
Kyoei Steel Ltd. | 3,700 | 76,568 | ||||||
Lintec Corp. | 6,300 | 130,666 | ||||||
Maruichi Steel Tube Ltd. | 4,800 | 117,216 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 31,000 | 253,351 | ||||||
Mitsubishi Paper Mills Ltd. * | 58,000 | 52,594 | ||||||
Mitsubishi Steel Mfg. Co., Ltd. | 22,000 | 62,445 | ||||||
Nihon Parkerizing Co., Ltd. | 4,000 | 78,140 | ||||||
Nippon Denko Co., Ltd. | 19,000 | 55,333 | ||||||
Nippon Kayaku Co., Ltd. | 11,000 | 154,219 | ||||||
Nippon Paint Co., Ltd. | 12,000 | 201,836 | ||||||
Nippon Shokubai Co., Ltd. | 16,000 | 196,280 | ||||||
Nippon Soda Co., Ltd. | 16,000 | 98,023 | ||||||
Nissan Chemical Industries Ltd. | 11,600 | 182,363 | ||||||
Nittetsu Mining Co., Ltd. | 12,000 | 68,858 | ||||||
NOF Corp. | 20,000 | 139,068 |
40 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Pacific Metals Co., Ltd. | 25,000 | 91,612 | ||||||
Rengo Co., Ltd. | 33,000 | 176,499 | ||||||
Sanyo Chemical Industries Ltd. | 8,000 | 55,057 | ||||||
Sanyo Special Steel Co., Ltd. | 17,000 | 91,674 | ||||||
Sumitomo Bakelite Co., Ltd. | 29,000 | 104,570 | ||||||
Sumitomo Osaka Cement Co., Ltd. | 38,000 | 153,322 | ||||||
Taiyo Nippon Sanso Corp. | 29,000 | 198,863 | ||||||
Toagosei Co., Ltd. | 29,000 | 131,506 | ||||||
Toho Zinc Co., Ltd. | 18,000 | 54,248 | ||||||
Tokai Carbon Co., Ltd. | 29,000 | 99,702 | ||||||
Tokuyama Corp. | 77,000 | 297,837 | ||||||
Tokyo Ohka Kogyo Co., Ltd. | 3,500 | 77,318 | ||||||
Tokyo Steel Manufacturing Co., Ltd. * | 32,100 | 172,487 | ||||||
Topy Industries Ltd. | 37,000 | 81,100 | ||||||
Toyo Ink SC Holdings Co., Ltd. | 25,000 | 127,448 | ||||||
Toyo Kohan Co., Ltd. | 13,000 | 59,138 | ||||||
Toyobo Co., Ltd. | 108,000 | 207,537 | ||||||
Yamato Kogyo Co., Ltd. | 3,700 | 137,137 | ||||||
Yodogawa Steel Works Ltd. | 26,000 | 117,616 | ||||||
Zeon Corp. | 13,000 | 154,923 | ||||||
6,950,252 | ||||||||
Media 0.6% | ||||||||
Asatsu-DK, Inc. | 6,000 | 164,891 | ||||||
Avex Group Holdings, Inc. | 1,900 | 48,145 | ||||||
CyberAgent, Inc. | 1,200 | 32,692 | ||||||
Daiichikosho Co., Ltd. | 4,100 | 117,160 | ||||||
Kadokawa Group Holdings, Inc. (a) | 2,100 | 76,617 | ||||||
SKY Perfect JSAT Holdings, Inc. | 21,700 | 125,305 | ||||||
Toho Co., Ltd. | 6,500 | 139,281 | ||||||
Tokyo Broadcasting System Holdings, Inc. | 4,700 | 61,928 | ||||||
TV Asahi Corp. | 2,500 | 58,086 | ||||||
Zenrin Co., Ltd. | 2,100 | 22,107 | ||||||
846,212 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.1% | ||||||||
Chugai Pharmaceutical Co., Ltd. | 10,900 | 256,110 | ||||||
Dainippon Sumitomo Pharma Co., Ltd. | 8,300 | 111,685 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 2,500 | 135,277 | ||||||
Kaken Pharmaceutical Co., Ltd. | 5,000 | 78,083 | ||||||
Kissei Pharmaceutical Co., Ltd. | 2,800 | 64,819 | ||||||
Kyorin Holdings, Inc. | 2,500 | 53,296 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 18,000 | 198,809 | ||||||
Mitsubishi Tanabe Pharma Corp. | 14,300 | 201,683 | ||||||
Mochida Pharmaceutical Co., Ltd. | 1,200 | 75,953 | ||||||
Nippon Shinyaku Co., Ltd. | 3,000 | 51,713 | ||||||
Rohto Pharmaceutical Co., Ltd. | 7,000 | 101,586 | ||||||
Santen Pharmaceutical Co., Ltd. | 3,900 | 197,986 | ||||||
Sawai Pharmaceutical Co., Ltd. | 900 | 65,793 | ||||||
Tsumura & Co. | 3,400 | 106,862 | ||||||
1,699,655 | ||||||||
Real Estate 1.3% | ||||||||
Advance Residence Investment Corp. | 39 | 88,295 | ||||||
Aeon Mall Co., Ltd. | 3,130 | 88,895 | ||||||
Daikyo, Inc. | 16,000 | 49,702 | ||||||
Japan Excellent, Inc. | 5 | 30,912 | ||||||
Japan Prime Realty Investment Corp. | 21 | 69,786 | ||||||
Japan Real Estate Investment Corp. | 14 | 159,949 | ||||||
Japan Retail Fund Investment Corp. | 66 | 133,671 | ||||||
Kenedix Realty Investment Corp. | 13 | 58,399 | ||||||
Leopalace21 Corp. * | 30,300 | 210,358 | ||||||
Nippon Building Fund, Inc. | 16 | 197,934 | ||||||
Nomura Real Estate Holdings, Inc. | 6,700 | 169,519 | ||||||
Nomura Real Estate Office Fund, Inc. | 15 | 74,100 | ||||||
NTT Urban Development Corp. | 4,800 | 61,274 | ||||||
Orix JREIT, Inc. | 61 | 76,071 | ||||||
Tokyo Tatemono Co., Ltd. | 20,000 | 187,760 | ||||||
Tokyu Fudosan Holdings Corp. * | 23,400 | 229,883 | ||||||
United Urban Investment Corp. | 51 | 77,838 | ||||||
1,964,346 | ||||||||
Retailing 2.3% | ||||||||
ABC-Mart, Inc. | 1,200 | 60,013 | ||||||
Alpen Co., Ltd. | 2,800 | 58,269 | ||||||
Aoyama Trading Co., Ltd. | 7,900 | 201,432 | ||||||
Arc Land Sakamoto Co., Ltd. | 3,200 | 47,803 | ||||||
Autobacs Seven Co., Ltd. | 10,900 | 158,927 | ||||||
Bic Camera, Inc. (a) | 151 | 74,240 | ||||||
Canon Marketing Japan, Inc. | 13,700 | 183,536 | ||||||
Chiyoda Co., Ltd. | 3,200 | 70,237 | ||||||
DCM Holdings Co., Ltd. | 21,800 | 152,315 | ||||||
Don Quijote Co., Ltd. | 3,100 | 206,356 | ||||||
Doshisha Co., Ltd. | 3,400 | 49,312 | ||||||
GEO Holdings Corp. | 10,900 | 101,609 | ||||||
Gulliver International Co., Ltd. | 4,000 | 23,850 | ||||||
H2O Retailing Corp. | 17,000 | 144,458 | ||||||
Hikari Tsushin, Inc. | 1,300 | 96,324 | ||||||
Izumi Co., Ltd. | 3,900 | 126,842 | ||||||
Kohnan Shoji Co., Ltd. | 7,600 | 79,945 | ||||||
Komeri Co., Ltd. | 4,400 | 107,452 | ||||||
Marui Group Co., Ltd. | 26,500 | 253,676 | ||||||
Nitori Holdings Co., Ltd. | 2,600 | 243,895 | ||||||
Point, Inc. | 1,390 | 65,096 | ||||||
Rakuten, Inc. | 9,360 | 121,957 | ||||||
Ryohin Keikaku Co., Ltd. | 2,100 | 209,487 | ||||||
T-Gaia Corp. | 2,600 | 26,201 | ||||||
The Daiei, Inc. * | 65,200 | 226,068 | ||||||
United Arrows Ltd. | 600 | 25,852 | ||||||
USS Co., Ltd. | 10,500 | 153,767 | ||||||
Xebio Co., Ltd. | 4,700 | 101,632 | ||||||
3,370,551 | ||||||||
Semiconductors & Semiconductor Equipment 0.6% | ||||||||
Advantest Corp. | 10,900 | 130,451 | ||||||
Dainippon Screen Manufacturing Co., Ltd. * | 16,000 | 91,960 | ||||||
Disco Corp. | 1,400 | 88,471 | ||||||
Renesas Electronics Corp. (a)* | 32,538 | 187,924 | ||||||
Sanken Electric Co., Ltd. | 13,000 | 71,741 | ||||||
Shinko Electric Industries Co., Ltd. | 10,300 | 91,823 | ||||||
Sumco Corp. | 16,700 | 151,749 | ||||||
Tokyo Seimitsu Co., Ltd. | 2,300 | 43,917 |
See financial notes 41
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
ULVAC, Inc. * | 9,800 | 100,216 | ||||||
958,252 | ||||||||
Software & Services 1.5% | ||||||||
Capcom Co., Ltd. | 4,100 | 76,667 | ||||||
Dena Co., Ltd. | 4,286 | 93,393 | ||||||
DTS Corp. | 3,800 | 65,062 | ||||||
Fuji Soft, Inc. | 3,700 | 73,565 | ||||||
Gree, Inc. | 3,100 | 26,640 | ||||||
IT Holdings Corp. | 17,200 | 247,068 | ||||||
Itochu Techno-Solutions Corp. | 2,900 | 113,767 | ||||||
NEC Networks & System Integration Corp. | 4,500 | 113,307 | ||||||
Net One Systems Co., Ltd. | 14,000 | 97,662 | ||||||
Nexon Co., Ltd. | 1,861 | 21,751 | ||||||
Nihon Unisys Ltd. | 10,800 | 96,313 | ||||||
Nomura Research Institute Ltd. | 8,100 | 271,854 | ||||||
NS Solutions Corp. | 2,300 | 52,442 | ||||||
NSD Co., Ltd. | 4,200 | 51,368 | ||||||
OBIC Co., Ltd. | 2,900 | 91,068 | ||||||
Otsuka Corp. | 1,700 | 220,495 | ||||||
SCSK Corp. | 2,776 | 70,372 | ||||||
Square Enix Holdings Co., Ltd. | 7,600 | 122,487 | ||||||
Transcosmos, Inc. | 3,300 | 57,101 | ||||||
Trend Micro, Inc. | 4,500 | 167,374 | ||||||
Yahoo Japan Corp. | 31,900 | 148,836 | ||||||
2,278,592 | ||||||||
Technology Hardware & Equipment 2.6% | ||||||||
Alps Electric Co., Ltd. * | 28,800 | 252,736 | ||||||
Amano Corp. | 6,900 | 67,600 | ||||||
Anritsu Corp. | 4,200 | 55,069 | ||||||
Azbil Corp. | 7,900 | 190,348 | ||||||
Canon Electronics, Inc. | 2,500 | 46,728 | ||||||
Citizen Holdings Co., Ltd. | 33,000 | 235,442 | ||||||
Daiwabo Holdings Co., Ltd. | 33,000 | 63,241 | ||||||
Eizo Corp. | 3,650 | 89,819 | ||||||
Hamamatsu Photonics K.K. | 3,500 | 130,968 | ||||||
Hirose Electric Co., Ltd. | 1,700 | 259,371 | ||||||
Hitachi High-Technologies Corp. | 10,700 | 246,099 | ||||||
Hitachi Kokusai Electric, Inc. | 5,000 | 67,173 | ||||||
Horiba Ltd. | 3,300 | 120,583 | ||||||
Hosiden Corp. | 31,400 | 171,628 | ||||||
Japan Aviation Electronics Industry Ltd. | 8,000 | 80,541 | ||||||
Macnica, Inc. | 2,200 | 59,649 | ||||||
Melco Holdings, Inc. | 1,500 | 20,545 | ||||||
Mitsumi Electric Co., Ltd. * | 34,100 | 229,950 | ||||||
Nichicon Corp. | 6,200 | 64,932 | ||||||
Nippon Chemi-Con Corp. * | 22,000 | 99,423 | ||||||
Oki Electric Industry Co., Ltd. * | 70,000 | 160,399 | ||||||
Riso Kagaku Corp. | 3,000 | 66,829 | ||||||
Ryosan Co., Ltd. | 8,400 | 162,643 | ||||||
Shimadzu Corp. | 20,000 | 195,848 | ||||||
Star Micronics Co., Ltd. | 5,500 | 59,184 | ||||||
Taiyo Yuden Co., Ltd. | 12,000 | 153,815 | ||||||
Toshiba Tec Corp. | 19,000 | 117,025 | ||||||
UKC Holdings Corp. | 2,600 | 51,828 | ||||||
Yaskawa Electric Corp. | 13,000 | 168,360 | ||||||
Yokogawa Electric Corp. | 14,500 | 189,498 | ||||||
3,877,274 | ||||||||
Transportation 1.5% | ||||||||
Fukuyama Transporting Co., Ltd. | 17,000 | 108,660 | ||||||
Hitachi Transport System Ltd. | 6,500 | 103,070 | ||||||
Japan Airport Terminal Co., Ltd. | 4,400 | 106,687 | ||||||
Kamigumi Co., Ltd. | 27,000 | 234,856 | ||||||
Keikyu Corp. | 16,000 | 150,609 | ||||||
Keio Corp. | 29,000 | 200,925 | ||||||
Keisei Electric Railway Co., Ltd. | 13,000 | 134,253 | ||||||
Kintetsu World Express, Inc. | 2,900 | 110,686 | ||||||
Mitsubishi Logistics Corp. | 8,000 | 111,175 | ||||||
Mitsui-Soko Co., Ltd. | 10,000 | 50,238 | ||||||
Nankai Electric Railway Co., Ltd. | 16,000 | 59,769 | ||||||
Nippon Konpo Unyu Soko Co., Ltd. | 7,100 | 123,766 | ||||||
Nishi-Nippon Railroad Co., Ltd. | 30,000 | 114,927 | ||||||
Odakyu Electric Railway Co., Ltd. | 21,000 | 202,667 | ||||||
Sankyu, Inc. | 46,000 | 164,654 | ||||||
Senko Co., Ltd. | 11,000 | 59,325 | ||||||
Sotetsu Holdings, Inc. | 26,000 | 96,711 | ||||||
The Sumitomo Warehouse Co., Ltd. | 10,000 | 58,649 | ||||||
2,191,627 | ||||||||
Utilities 0.1% | ||||||||
Shizuoka Gas Co., Ltd. | 4,300 | 28,477 | ||||||
The Okinawa Electric Power Co., Inc. | 3,400 | 118,145 | ||||||
146,622 | ||||||||
55,183,995 | ||||||||
Luxembourg 0.5% | ||||||||
Banks 0.1% | ||||||||
Espirito Santo Financial Group S.A. (a)* | 30,124 | 212,962 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Regus plc | 40,884 | 134,162 | ||||||
Consumer Durables & Apparel 0.0% | ||||||||
Samsonite International S.A. | 16,500 | 45,102 | ||||||
Household & Personal Products 0.1% | ||||||||
Oriflame Cosmetics S.A. SDR | 3,753 | 118,433 | ||||||
Materials 0.2% | ||||||||
AZ Electronic Materials S.A. | 7,621 | 35,011 | ||||||
Ternium S.A. ADR | 7,526 | 196,278 | ||||||
231,289 | ||||||||
Media 0.0% | ||||||||
RTL Group S.A. * | 533 | 57,894 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Magnachip Semiconductor Corp. * | 1,072 | 20,036 | ||||||
819,878 | ||||||||
Netherlands 1.9% | ||||||||
Capital Goods 0.5% | ||||||||
Aalberts Industries N.V. | 6,662 | 198,906 | ||||||
AerCap Holdings N.V. * | 4,987 | 101,186 | ||||||
Arcadis N.V. | 3,871 | 121,542 | ||||||
Koninklijke Boskalis Westminster N.V. | 5,299 | 254,683 |
42 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sensata Technologies Holding N.V. * | 1,722 | 64,799 | ||||||
741,116 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
USG People N.V. | 25,022 | 330,769 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
TomTom N.V. * | 16,396 | 126,598 | ||||||
Diversified Financials 0.0% | ||||||||
BinckBank N.V. | 2,178 | 20,954 | ||||||
Energy 0.3% | ||||||||
Core Laboratories N.V. | 297 | 55,604 | ||||||
Koninklijke Vopak N.V. | 1,937 | 119,132 | ||||||
SBM Offshore N.V. * | 15,232 | 318,813 | ||||||
493,549 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
X5 Retail Group N.V. - Reg’d GDR * | 5,907 | 96,022 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Koninklijike Wessanen N.V. | 9,383 | 35,162 | ||||||
Materials 0.1% | ||||||||
Koninklijke Ten Cate N.V. | 4,064 | 123,391 | ||||||
Real Estate 0.3% | ||||||||
Corio N.V. | 4,131 | 179,825 | ||||||
Eurocommercial Properties N.V. | 1,836 | 78,010 | ||||||
VastNed Retail N.V. | 1,864 | 86,140 | ||||||
Wereldhave N.V. | 1,529 | 118,804 | ||||||
462,779 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASM International N.V. | 2,275 | 74,726 | ||||||
NXP Semiconductor N.V. * | 1,546 | 65,117 | ||||||
139,843 | ||||||||
Software & Services 0.0% | ||||||||
Unit 4 N.V. | 1,368 | 64,489 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
TKH Group N.V. CVA | 3,169 | 101,239 | ||||||
Telecommunication Services 0.1% | ||||||||
Ziggo N.V. | 2,773 | 118,876 | ||||||
2,854,787 | ||||||||
New Zealand 0.4% | ||||||||
Consumer Services 0.1% | ||||||||
SKYCITY Entertainment Group Ltd. | 30,408 | 97,658 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Fisher & Paykel Healthcare Corp., Ltd. | 26,488 | 80,515 | ||||||
Materials 0.0% | ||||||||
Nuplex Industries Ltd. | 29,493 | 85,253 | ||||||
Media 0.1% | ||||||||
Sky Network Television Ltd. | 19,320 | 98,944 | ||||||
Real Estate 0.0% | ||||||||
Kiwi Income Property Trust | 22,283 | 20,143 | ||||||
Telecommunication Services 0.0% | ||||||||
Chorus Ltd. | 22,136 | 48,448 | ||||||
Transportation 0.1% | ||||||||
Air New Zealand Ltd. | 20,669 | 27,497 | ||||||
Auckland International Airport Ltd. | 25,547 | 72,319 | ||||||
Mainfreight Ltd. | 2,399 | 22,984 | ||||||
122,800 | ||||||||
Utilities 0.1% | ||||||||
Contact Energy Ltd. | 20,809 | 90,237 | ||||||
Infratil Ltd. | 12,712 | 26,250 | ||||||
116,487 | ||||||||
670,248 | ||||||||
Norway 1.1% | ||||||||
Banks 0.1% | ||||||||
SpareBank 1 SR Bank A.S.A. | 7,229 | 64,967 | ||||||
Sparebanken 1 SMN | 6,798 | 57,290 | ||||||
122,257 | ||||||||
Capital Goods 0.1% | ||||||||
Vard Holdings Ltd. * | 26,000 | 18,374 | ||||||
Veidekke A.S.A. | 12,317 | 100,348 | ||||||
118,722 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Tomra Systems A.S.A. | 6,755 | 62,126 | ||||||
Diversified Financials 0.0% | ||||||||
Aker ASA, Class A | 1,634 | 51,478 | ||||||
Energy 0.2% | ||||||||
Fred Olsen Energy A.S.A. | 2,508 | 105,395 | ||||||
Kvaerner A.S.A. | 14,615 | 23,809 | ||||||
TGS Nopec Geophysical Co. A.S.A. | 5,680 | 156,221 | ||||||
285,425 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Austevoll Seafood A.S.A. | 4,155 | 25,797 | ||||||
Cermaq A.S.A. | 5,261 | 93,236 | ||||||
Leroy Seafood Group A.S.A. | 840 | 25,957 | ||||||
144,990 | ||||||||
Insurance 0.2% | ||||||||
Gjensidige Forsikring A.S.A. | 10,452 | 195,089 | ||||||
Storebrand ASA * | 19,512 | 126,174 | ||||||
321,263 | ||||||||
Media 0.1% | ||||||||
Schibsted A.S.A. | 2,772 | 169,403 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
REC Silicon A.S.A. * | 466,634 | 232,363 | ||||||
Software & Services 0.1% | ||||||||
Atea A.S.A. | 6,865 | 76,070 | ||||||
Transportation 0.1% | ||||||||
Golden Ocean Group Ltd. | 66,355 | 99,991 | ||||||
1,684,088 | ||||||||
Portugal 0.4% | ||||||||
Banks 0.1% | ||||||||
Banco BPI S.A. - Reg’d (a)* | 48,089 | 76,145 |
See financial notes 43
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 0.1% | ||||||||
Sonae | 136,343 | 196,930 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Jeronimo Martins, SGPS, S.A. | 7,139 | 131,476 | ||||||
Media 0.1% | ||||||||
Zon Optimus SGPS, S.A. | 14,012 | 96,111 | ||||||
Utilities 0.0% | ||||||||
Redes Energeticas Nacionais S.A. | 17,048 | 51,152 | ||||||
551,814 | ||||||||
Republic of Korea 0.0% | ||||||||
Automobiles & Components 0.0% | ||||||||
Zyle Motor Sales Corp. (b)(c)* | 2,480 | — | ||||||
Capital Goods 0.0% | ||||||||
Daewoo Industrial Development Co., Ltd. (b)(c)* | 1,773 | — | ||||||
— | ||||||||
Singapore 1.6% | ||||||||
Capital Goods 0.3% | ||||||||
Cosco Corp., (Singapore) Ltd. | 91,431 | 57,638 | ||||||
SembCorp Marine Ltd. (a) | 46,096 | 166,756 | ||||||
Singapore Technologies Engineering Ltd. | 60,000 | 203,448 | ||||||
United Engineers Ltd. | 14,000 | 20,848 | ||||||
448,690 | ||||||||
Consumer Services 0.0% | ||||||||
Genting Singapore plc | 34,000 | 41,599 | ||||||
Diversified Financials 0.1% | ||||||||
Singapore Exchange Ltd. | 20,000 | 117,993 | ||||||
Energy 0.0% | ||||||||
Sakari Resources Ltd (c)* | 18,000 | — | ||||||
Food & Staples Retailing 0.1% | ||||||||
Olam International Ltd. (a) | 83,704 | 103,555 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Golden Agri-Resources Ltd. | 365,000 | 176,245 | ||||||
Real Estate 0.6% | ||||||||
Ascendas REIT | 40,000 | 76,053 | ||||||
CapitaCommercial Trust | 41,302 | 48,872 | ||||||
CapitaLand Ltd. | 77,000 | 192,923 | ||||||
CapitaMall Trust | 50,000 | 81,210 | ||||||
City Developments Ltd. | 21,000 | 173,822 | ||||||
Global Logistic Properties Ltd. | 11,000 | 27,305 | ||||||
Keppel Land Ltd. | 19,000 | 56,644 | ||||||
Suntec Real Estate Investment Trust | 43,000 | 59,184 | ||||||
UOL Group Ltd. | 17,000 | 89,979 | ||||||
805,992 | ||||||||
Telecommunication Services 0.1% | ||||||||
M1 Ltd. | 24,000 | 65,768 | ||||||
StarHub Ltd. | 29,000 | 103,697 | ||||||
169,465 | ||||||||
Transportation 0.3% | ||||||||
Hutchison Port Holdings Trust, Class U | 144,000 | 105,090 | ||||||
Neptune Orient Lines Ltd. (a)* | 168,000 | 143,097 | ||||||
SATS Ltd. | 38,749 | 106,013 | ||||||
Singapore Post Ltd. | 62,000 | 65,359 | ||||||
SMRT Corp., Ltd. | 47,000 | 49,155 | ||||||
468,714 | ||||||||
2,332,253 | ||||||||
Spain 2.3% | ||||||||
Banks 0.2% | ||||||||
Bankinter S.A. | 41,819 | 254,975 | ||||||
Caja de Ahorros del Mediterraneo (b)(c)* | 5,382 | — | ||||||
254,975 | ||||||||
Capital Goods 0.8% | ||||||||
Abengoa S.A., B Shares | 32,684 | 79,144 | ||||||
Construcciones y Auxiliar de Ferrocarriles S.A. | 113 | 58,674 | ||||||
Elecnor S.A. | 1,748 | 25,608 | ||||||
Gamesa Corp. Tecnologica S.A. * | 61,562 | 594,509 | ||||||
Obrascon Huarte Lain S.A. | 3,150 | 131,936 | ||||||
Sacyr S.A. * | 25,302 | 136,173 | ||||||
Zardoya Otis S.A. | 9,121 | 158,674 | ||||||
1,184,718 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Prosegur Cia de Seguridad S.A. - Reg’d | 10,104 | 59,948 | ||||||
Diversified Financials 0.1% | ||||||||
Bolsas y Mercados Espanoles | 4,543 | 169,864 | ||||||
Energy 0.1% | ||||||||
Tecnicas Reunidas S.A. | 1,775 | 91,363 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Ebro Foods S.A. | 7,154 | 161,377 | ||||||
Pescanova S.A. (b)(c)* | 1,125 | — | ||||||
Viscofan S.A. | 2,100 | 111,471 | ||||||
272,848 | ||||||||
Insurance 0.2% | ||||||||
Grupo Catalana Occidente S.A. | 2,679 | 90,636 | ||||||
Mapfre S.A. | 62,485 | 250,920 | ||||||
341,556 | ||||||||
Materials 0.2% | ||||||||
Acerinox S.A. (a) | 18,278 | 240,933 | ||||||
Media 0.2% | ||||||||
Atresmedia Corp de Medios de Comunicaion S.A. | 7,281 | 121,643 | ||||||
Mediaset Espana Comunicacion S.A. * | 19,564 | 238,765 | ||||||
360,408 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Almirall S.A. | 4,106 | 61,355 | ||||||
Grifols S.A. | 1,861 | 76,276 | ||||||
Grifols S.A., Class B | 697 | 20,933 | ||||||
158,564 |
44 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Software & Services 0.2% | ||||||||
Indra Sistemas S.A. | 14,476 | 238,721 | ||||||
3,373,898 | ||||||||
Sweden 2.2% | ||||||||
Capital Goods 0.3% | ||||||||
Haldex AB | 3,534 | 25,594 | ||||||
Indutrade AB | 2,124 | 83,091 | ||||||
Lindab International AB * | 10,106 | 98,396 | ||||||
NIBE Industrier AB, B Shares | 3,435 | 65,890 | ||||||
Peab AB | 26,004 | 152,896 | ||||||
Saab AB, Class B | 5,217 | 104,437 | ||||||
530,304 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Intrum Justitia AB | 3,465 | 92,132 | ||||||
Loomis AB, Class B | 5,864 | 140,565 | ||||||
232,697 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
JM AB | 7,710 | 219,637 | ||||||
Nobia AB | 13,125 | 114,438 | ||||||
334,075 | ||||||||
Diversified Financials 0.2% | ||||||||
D. Carnegie & Co. AB (b)(c)* | 851 | — | ||||||
L E Lundbergforetagen AB, B Shares | 2,511 | 104,906 | ||||||
Ratos AB, B Shares | 22,173 | 191,883 | ||||||
296,789 | ||||||||
Energy 0.0% | ||||||||
Lundin Petroleum AB * | 3,431 | 70,707 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Axfood AB | 2,216 | 114,599 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
AarhusKarlshamn AB | 1,323 | 78,273 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Elekta AB, B Shares | 5,737 | 84,731 | ||||||
Materials 0.2% | ||||||||
BillerudKorsnas AB | 8,976 | 105,301 | ||||||
Hexpol AB | 371 | 27,874 | ||||||
Holmen AB, B Shares | 6,034 | 200,432 | ||||||
333,607 | ||||||||
Media 0.2% | ||||||||
Eniro AB * | 8,057 | 35,006 | ||||||
Modern Times Group AB, B Shares | 4,157 | 226,745 | ||||||
261,751 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Meda AB, A Shares | 12,486 | 140,112 | ||||||
Real Estate 0.2% | ||||||||
Castellum AB | 6,114 | 93,879 | ||||||
Fabege AB | 6,835 | 78,643 | ||||||
Kungsleden AB | 15,748 | 115,670 | ||||||
288,192 | ||||||||
Retailing 0.1% | ||||||||
Bilia AB, A Shares | 4,035 | 97,714 | ||||||
Clas Ohlson AB, B Shares | 3,191 | 50,249 | ||||||
KappAhl AB * | 4,419 | 26,128 | ||||||
174,091 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Hexagon AB, B Shares | 5,458 | 163,657 | ||||||
Transportation 0.1% | ||||||||
SAS AB * | 53,404 | 159,794 | ||||||
3,263,379 | ||||||||
Switzerland 2.9% | ||||||||
Banks 0.1% | ||||||||
Banque Cantonale Vaudoise - Reg’d | 108 | 60,012 | ||||||
Valiant Holding AG - Reg’d | 860 | 80,226 | ||||||
140,238 | ||||||||
Capital Goods 0.7% | ||||||||
AFG Arbonia-Forster Holding AG - Reg’d * | 2,344 | 81,247 | ||||||
Belimo Holding AG - Reg’d | 9 | 23,210 | ||||||
Bucher Industries AG - Reg’d | 163 | 45,140 | ||||||
Daetwyler Holding AG | 214 | 27,212 | ||||||
Georg Fischer AG - Reg’d * | 436 | 300,338 | ||||||
Implenia AG | 989 | 66,604 | ||||||
Meyer Burger Technology AG * | 3,125 | 36,668 | ||||||
OC Oerlikon Corp. AG - Reg’d * | 7,074 | 98,896 | ||||||
Rieter Holding AG - Reg’d | 437 | 91,491 | ||||||
Sulzer AG - Reg’d | 1,381 | 216,044 | ||||||
Zehnder Group AG | 1,148 | 54,088 | ||||||
1,040,938 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
DKSH Holding Ltd. | 1,050 | 87,604 | ||||||
Gategroup Holding AG * | 3,548 | 93,065 | ||||||
Kaba Holding AG - Reg’d, Series B | 151 | 64,612 | ||||||
245,281 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Forbo Holding AG - Reg’d | 107 | 83,902 | ||||||
Consumer Services 0.1% | ||||||||
Kuoni Reisen Holding AG - Reg’d, Series B | 392 | 165,696 | ||||||
Diversified Financials 0.2% | ||||||||
Julius Baer Group Ltd. * | 5,268 | 258,425 | ||||||
Partners Group Holding AG | 255 | 66,102 | ||||||
324,527 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Barry Callebaut AG - Reg’d * | 90 | 94,032 | ||||||
Emmi AG - Reg’d | 116 | 33,368 | ||||||
127,400 | ||||||||
Health Care Equipment & Services 0.3% | ||||||||
Nobel Biocare Holding AG - Reg’d | 11,321 | 186,767 | ||||||
Sonova Holding AG - Reg’d * | 1,261 | 164,108 | ||||||
Straumann Holding AG - Reg’d | 381 | 75,728 | ||||||
426,603 | ||||||||
Insurance 0.1% | ||||||||
Helvetia Holding AG - Reg’d | 323 | 152,339 |
See financial notes 45
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 0.1% | ||||||||
EMS-Chemie Holding AG - Reg’d | 336 | 122,352 | ||||||
Schmolz & Bickenbach AG - Reg’d * | 39,272 | 49,775 | ||||||
172,127 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Actelion Ltd. - Reg’d * | 2,900 | 224,374 | ||||||
Galenica AG - Reg’d | 209 | 184,716 | ||||||
409,090 | ||||||||
Real Estate 0.1% | ||||||||
Allreal Holding AG - Reg’d | 331 | 45,490 | ||||||
Swiss Prime Site AG - Reg’d * | 1,346 | 101,917 | ||||||
147,407 | ||||||||
Retailing 0.2% | ||||||||
Dufry AG - Reg’d * | 728 | 117,621 | ||||||
Valora Holding AG - Reg’d | 605 | 149,480 | ||||||
267,101 | ||||||||
Software & Services 0.0% | ||||||||
Temenos Group AG - Reg’d | 1,014 | 25,838 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Logitech International S.A. - Reg’d | 21,553 | 220,673 | ||||||
Transportation 0.2% | ||||||||
Flughafen Zuerich AG - Reg’d | 187 | 103,633 | ||||||
Panalpina Welttransport Holding AG - Reg’d | 1,484 | 221,786 | ||||||
325,419 | ||||||||
4,274,579 | ||||||||
United Kingdom 12.9% | ||||||||
Banks 0.0% | ||||||||
Paragon Group Cos. plc | 9,736 | 52,817 | ||||||
Capital Goods 1.6% | ||||||||
Ashtead Group plc | 21,873 | 229,845 | ||||||
Bodycote plc | 14,280 | 150,526 | ||||||
Chemring Group plc | 19,713 | 68,747 | ||||||
Fenner plc | 10,132 | 64,915 | ||||||
Galliford Try plc | 7,982 | 146,948 | ||||||
Interserve plc | 16,829 | 165,875 | ||||||
Invensys plc | 30,534 | 245,024 | ||||||
Keller Group plc | 9,781 | 164,827 | ||||||
Kier Group plc | 4,431 | 128,523 | ||||||
Lavendon Group plc | 8,865 | 26,120 | ||||||
Melrose Industries plc | 29,539 | 151,437 | ||||||
Morgan Advanced Materials plc | 26,561 | 129,567 | ||||||
Morgan Sindall Group plc | 4,587 | 58,478 | ||||||
QinetiQ Group plc | 60,883 | 193,229 | ||||||
Rotork plc | 2,314 | 106,019 | ||||||
Senior plc | 20,166 | 96,237 | ||||||
Speedy Hire plc | 35,981 | 37,500 | ||||||
Spirax-Sarco Engineering plc | 2,887 | 135,006 | ||||||
Ultra Electronics Holdings plc | 3,454 | 107,107 | ||||||
2,405,930 | ||||||||
Commercial & Professional Supplies 1.4% | ||||||||
Babcock International Group plc | 11,991 | 245,204 | ||||||
Berendsen plc | 17,200 | 267,855 | ||||||
Cape plc | 17,807 | 78,874 | ||||||
De La Rue plc | 12,364 | 169,456 | ||||||
Homeserve plc | 23,515 | 88,352 | ||||||
Intertek Group plc | 3,646 | 194,511 | ||||||
Mears Group plc | 8,074 | 55,416 | ||||||
Michael Page International plc | 26,894 | 208,756 | ||||||
Mitie Group plc | 36,438 | 183,661 | ||||||
Rentokil Initial plc | 140,577 | 235,183 | ||||||
RPS Group plc | 22,291 | 103,899 | ||||||
Shanks Group plc | 69,658 | 117,933 | ||||||
WS Atkins plc | 5,778 | 114,302 | ||||||
2,063,402 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Bellway plc | 11,022 | 265,480 | ||||||
Berkeley Group Holdings plc | 5,000 | 187,426 | ||||||
Bovis Homes Group plc | 8,845 | 111,274 | ||||||
Guinness Peat Group plc * | 282,754 | 137,729 | ||||||
Redrow plc | 14,731 | 62,564 | ||||||
764,473 | ||||||||
Consumer Services 0.9% | ||||||||
Betfair Group plc | 5,702 | 91,883 | ||||||
Enterprise Inns plc * | 162,678 | 395,221 | ||||||
Greene King plc | 17,021 | 225,235 | ||||||
J.D. Wetherspoon plc | 10,730 | 121,340 | ||||||
Marston’s plc | 66,442 | 161,777 | ||||||
Mitchells & Butlers plc * | 34,470 | 221,426 | ||||||
Restaurant Group plc | 11,512 | 106,237 | ||||||
Spirit Pub Co. plc | 42,437 | 49,827 | ||||||
1,372,946 | ||||||||
Diversified Financials 1.6% | ||||||||
3i Group plc | 21,425 | 128,051 | ||||||
Aberdeen Asset Management plc | 23,244 | 164,959 | ||||||
Ashmore Group plc | 11,928 | 77,295 | ||||||
Close Brothers Group plc | 9,236 | 187,045 | ||||||
F&C Asset Management plc | 44,082 | 71,741 | ||||||
Henderson Group plc | 64,712 | 222,124 | ||||||
IG Group Holdings plc | 17,244 | 169,474 | ||||||
Intermediate Capital Group plc | 21,367 | 163,962 | ||||||
International Personal Finance | 15,842 | 146,405 | ||||||
Investec plc | 30,033 | 210,129 | ||||||
Jupiter Fund Management plc | 11,503 | 73,553 | ||||||
London Stock Exchange Group plc | 10,057 | 264,338 | ||||||
Provident Financial plc | 8,177 | 206,828 | ||||||
Schroders plc | 3,882 | 160,219 | ||||||
Schroders plc, Non Voting Shares | 1,700 | 58,000 | ||||||
Tullett Prebon plc | 22,022 | 112,176 | ||||||
2,416,299 | ||||||||
Energy 0.5% | ||||||||
Bumi plc * | 9,503 | 29,642 | ||||||
Enquest plc * | 30,955 | 66,181 | ||||||
Hargreaves Services plc | 2,154 | 30,082 | ||||||
Hunting plc | 8,430 | 120,437 | ||||||
Petrofac Ltd. | 8,305 | 194,781 | ||||||
Premier Oil plc | 16,861 | 93,819 | ||||||
Subsea 7 S.A. | 9,092 | 192,285 | ||||||
727,227 |
46 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food & Staples Retailing 0.3% | ||||||||
Booker Group plc | 116,941 | 281,657 | ||||||
Greggs plc | 17,309 | 127,665 | ||||||
409,322 | ||||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Britvic plc | 13,059 | 130,867 | ||||||
Cranswick plc | 6,183 | 106,304 | ||||||
Dairy Crest Group plc | 21,349 | 183,857 | ||||||
Greencore Group plc | 39,051 | 112,768 | ||||||
533,796 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Synergy Health plc | 3,072 | 51,001 | ||||||
Household & Personal Products 0.1% | ||||||||
PZ Cussons plc | 14,670 | 92,606 | ||||||
Insurance 0.9% | ||||||||
Admiral Group plc | 9,006 | 184,391 | ||||||
Beazley plc | 29,329 | 107,509 | ||||||
Catlin Group Ltd. | 27,150 | 223,037 | ||||||
Direct Line Insurance Group plc | 13,208 | 47,650 | ||||||
Hiscox Ltd. | 23,710 | 251,714 | ||||||
Jardine Lloyd Thompson Group plc | 5,976 | 95,777 | ||||||
Lancashire Holdings Ltd. | 16,584 | 215,917 | ||||||
Phoenix Group Holdings | 14,201 | 177,089 | ||||||
1,303,084 | ||||||||
Materials 0.9% | ||||||||
African Barrick Gold plc | 10,745 | 33,201 | ||||||
Alent plc | 6,062 | 33,689 | ||||||
Croda International plc | 3,501 | 136,811 | ||||||
DS Smith plc | 54,602 | 264,652 | ||||||
Elementis plc | 18,890 | 78,415 | ||||||
Evraz plc * | 74,133 | 140,109 | ||||||
Filtrona plc | 8,016 | 100,784 | ||||||
Hill & Smith Holdings plc | 3,566 | 27,475 | ||||||
Lonmin plc * | 42,482 | 219,427 | ||||||
Petropavlovsk plc | 35,340 | 45,352 | ||||||
Randgold Resources Ltd. | 1,137 | 84,322 | ||||||
RPC Group plc | 12,982 | 106,158 | ||||||
Synthomer plc | 6,538 | 25,492 | ||||||
Victrex plc | 2,547 | 67,311 | ||||||
1,363,198 | ||||||||
Media 0.3% | ||||||||
Cineworld Group plc | 11,715 | 69,666 | ||||||
Trinity Mirror plc * | 38,245 | 81,641 | ||||||
UBM plc | 22,821 | 249,811 | ||||||
401,118 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Genus plc | 980 | 20,710 | ||||||
Hikma Pharmaceuticals plc | 3,551 | 68,314 | ||||||
89,024 | ||||||||
Real Estate 0.6% | ||||||||
Derwent London plc | 1,440 | 57,802 | ||||||
Hammerson plc | 26,316 | 222,994 | ||||||
Intu Properties plc | 29,816 | 164,445 | ||||||
Mapeley Ltd. (b)(c)* | 2,199 | — | ||||||
Savills plc | 10,462 | 109,036 | ||||||
Segro plc | 44,242 | 231,719 | ||||||
Songbird Estates plc * | 37,043 | 95,032 | ||||||
881,028 | ||||||||
Retailing 0.9% | ||||||||
Darty plc | 202,354 | 266,429 | ||||||
Debenhams plc | 135,326 | 220,761 | ||||||
Halfords Group plc | 29,654 | 200,843 | ||||||
Howden Joinery Group plc | 14,340 | 74,162 | ||||||
John Menzies plc | 4,727 | 62,074 | ||||||
Lookers plc | 40,265 | 83,929 | ||||||
Mothercare plc * | 13,804 | 84,593 | ||||||
N Brown Group plc | 8,927 | 75,019 | ||||||
Sports Direct International plc * | 6,904 | 77,588 | ||||||
WH Smith plc | 14,086 | 203,283 | ||||||
1,348,681 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ARM Holdings plc | 10,692 | 167,539 | ||||||
CSR plc | 10,813 | 95,246 | ||||||
262,785 | ||||||||
Software & Services 0.2% | ||||||||
Aveva Group plc | 1,442 | 59,748 | ||||||
Computacenter plc | 14,380 | 136,843 | ||||||
Fidessa Group plc | 755 | 24,479 | ||||||
Micro Focus International plc | 6,276 | 82,258 | ||||||
Xchanging plc | 26,027 | 52,999 | ||||||
356,327 | ||||||||
Technology Hardware & Equipment 0.7% | ||||||||
Domino Printing Sciences plc | 5,388 | 59,740 | ||||||
Electrocomponents plc | 44,755 | 213,961 | ||||||
Halma plc | 13,918 | 122,249 | ||||||
Laird plc | 33,180 | 132,732 | ||||||
Pace plc | 17,771 | 86,793 | ||||||
Premier Farnell plc | 28,149 | 101,715 | ||||||
Spectris plc | 4,950 | 183,287 | ||||||
Spirent Communications plc | 42,517 | 75,340 | ||||||
TT Electronics plc | 24,145 | 77,067 | ||||||
Xyratex Ltd. | 6,441 | 64,024 | ||||||
1,116,908 | ||||||||
Telecommunication Services 0.1% | ||||||||
KCOM Group plc | 38,987 | 62,723 | ||||||
TalkTalk Telecom Group plc | 33,060 | 141,521 | ||||||
204,244 | ||||||||
Transportation 0.7% | ||||||||
BBA Aviation plc | 35,835 | 194,234 | ||||||
easyJet plc | 8,875 | 185,906 | ||||||
Go-Ahead Group plc | 5,065 | 136,531 | ||||||
Northgate plc | 32,155 | 233,230 | ||||||
Stagecoach Group plc | 25,598 | 144,432 | ||||||
Stobart Group Ltd. (a) | 11,769 | 26,796 | ||||||
Stolt-Nielsen Ltd. | 3,593 | 101,731 | ||||||
1,022,860 | ||||||||
19,239,076 | ||||||||
Total Common Stock | ||||||||
(Cost $116,055,264) | 144,078,170 | |||||||
See financial notes 47
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Preferred Stock 0.4% of net assets | ||||||||
Germany 0.3% | ||||||||
Automobiles & Components 0.1% | ||||||||
Porsche Automobil Holding SE | 2,250 | 210,097 | ||||||
Capital Goods 0.1% | ||||||||
Jungheinrich AG | 1,470 | 91,737 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Draegerwerk AG & Co. KGAA | 430 | 50,366 | ||||||
Materials 0.1% | ||||||||
Fuchs Petrolub SE | 1,505 | 121,508 | ||||||
473,708 | ||||||||
Italy 0.1% | ||||||||
Insurance 0.1% | ||||||||
Fondiaria-Sai S.p.A. * | 12,001 | 27,956 | ||||||
Unipol Gruppo Finanziario S.p.A. | 17,163 | 77,017 | ||||||
104,973 | ||||||||
Total Preferred Stock | ||||||||
(Cost $380,406) | 578,681 | |||||||
Rights 0.0% of net assets | ||||||||
Hong Kong 0.0% | ||||||||
Real Estate 0.0% | ||||||||
New Hotel (b)(c)* | 1,600 | — | ||||||
Italy 0.0% | ||||||||
Utilities 0.0% | ||||||||
Hera S.p.A. (a)* | 90,692 | 1,638 | ||||||
Total Rights | ||||||||
(Cost $—) | 1,638 | |||||||
Other Investment Company 2.8% of net assets | ||||||||
United States 2.8% | ||||||||
iShares MSCI EAFE Small Cap ETF | 82,500 | 4,121,700 | ||||||
Total Other Investment Company | ||||||||
(Cost $3,757,207) | 4,121,700 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 0.2% of net assets | ||||||||
Time Deposits 0.1% | ||||||||
Brown Brothers Harriman | ||||||||
Australian Dollar | ||||||||
1.50%, 11/01/13 | 10,970 | 10,368 | ||||||
Canadian Dollar | ||||||||
0.31%, 11/01/13 | 9,640 | 9,246 | ||||||
Euro | ||||||||
0.02%, 11/01/13 | 9,045 | 12,280 | ||||||
Hong Kong Dollar | ||||||||
0.01%, 11/01/13 | 21,728 | 2,803 | ||||||
Singapore Dollar | ||||||||
0.01%, 11/01/13 | 1,599 | 1,287 | ||||||
Swedish Krona | ||||||||
0.36%, 11/01/13 | 75,460 | 11,645 | ||||||
Citibank | ||||||||
Pound Sterling | ||||||||
0.08%, 11/01/13 | 14,856 | 23,820 | ||||||
DNB | ||||||||
Japanese Yen | ||||||||
0.01%, 11/01/13 | 10,504,517 | 106,829 | ||||||
Norwegian Krone | ||||||||
0.38%, 11/01/13 | 126,751 | 21,292 | ||||||
199,570 | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/19/13 (d)(e) | 145,000 | 144,999 | ||||||
Total Short-Term Investments | ||||||||
(Cost $344,569) | 344,569 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 1.5% of net assets | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 2,221,642 | 2,221,642 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $2,221,642) | 2,221,642 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/13, the tax basis cost of the fund’s investments was $123,152,501 and the unrealized appreciation and depreciation were $29,925,605 and ($3,953,348), respectively, with a net unrealized appreciation of $25,972,257.
48 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
At 10/31/13, the values of certain foreign securities held by the fund aggregating $123,594,538 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $1,897,364. | |
(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 $0 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt | |
CVA — | Dutch Certificate | |
ETF — | Exchange traded fund | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/20/13 | 1 | 93,765 | 4,442 |
See financial notes 49
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2013
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
87 | .9% | Common Stock | 295,265,216 | 310,499,007 | ||||||||
9 | .7% | Preferred Stock | 39,367,592 | 34,183,852 | ||||||||
0 | .8% | Other Investment Company | 2,898,912 | 2,866,050 | ||||||||
2 | .4% | Short-Term Investments | 8,425,412 | 8,425,412 | ||||||||
100 | .8% | Total Investments | 345,957,132 | 355,974,321 | ||||||||
(0 | .8%) | Other Assets and Liabilities, Net | (2,979,662 | ) | ||||||||
100 | .0% | Total Net Assets | 352,994,659 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 87.9% of net assets | ||||||||
Brazil 5.6% | ||||||||
Banks 1.0% | ||||||||
Banco Bradesco S.A. | 70,465 | 1,129,542 | ||||||
Banco do Brasil S.A. | 157,667 | 2,087,006 | ||||||
Itau Unibanco Holding S.A. | 26,800 | 388,883 | ||||||
3,605,431 | ||||||||
Capital Goods 0.2% | ||||||||
Embraer S.A. | 73,003 | 532,809 | ||||||
Diversified Financials 0.1% | ||||||||
BM&F BOVESPA S.A. | 84,542 | 474,984 | ||||||
Energy 1.7% | ||||||||
Petroleo Brasileiro S.A. - Petrobras | 639,553 | 5,560,207 | ||||||
Ultrapar Participacoes S.A. | 21,034 | 559,171 | ||||||
6,119,378 | ||||||||
Food, Beverage & Tobacco 0.4% | ||||||||
BRF-Brasil Foods S.A. | 31,834 | 747,464 | ||||||
Companhia de Bebidas das Americas | 5,280 | 196,686 | ||||||
JBS S.A. | 120,790 | 434,050 | ||||||
1,378,200 | ||||||||
Materials 1.5% | ||||||||
Companhia Siderurgica Nacional S.A. | 253,568 | 1,379,785 | ||||||
Usinas Siderurgicas de Minas Gerais S.A. * | 41,213 | 208,952 | ||||||
Vale S.A. | 219,270 | 3,486,492 | ||||||
5,075,229 | ||||||||
Software & Services 0.1% | ||||||||
Cielo S.A. | 15,900 | 482,192 | ||||||
Telecommunication Services 0.2% | ||||||||
Oi S.A. | 37,814 | 67,409 | ||||||
Tim Participacoes S.A. | 113,033 | 572,347 | ||||||
639,756 | ||||||||
Utilities 0.4% | ||||||||
Centrais Eletricas Brasileiras S.A. | 174,192 | 552,077 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 39,930 | 423,157 | ||||||
Companhia Energetica de Minas Gerais | 13,296 | 117,695 | ||||||
CPFL Energia S.A. | 50,000 | 426,843 | ||||||
1,519,772 | ||||||||
19,827,751 | ||||||||
Chile 0.7% | ||||||||
Energy 0.2% | ||||||||
Empresas Copec S.A. | 42,795 | 623,869 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Cencosud S.A. | 84,299 | 343,828 | ||||||
Utilities 0.4% | ||||||||
Empresa Nacional de Electricidad S.A. | 315,494 | 482,544 | ||||||
Enersis S.A. | 3,160,271 | 1,058,113 | ||||||
1,540,657 | ||||||||
2,508,354 | ||||||||
China 11.5% | ||||||||
Automobiles & Components 0.1% | ||||||||
Dongfeng Motor Group Co., Ltd., Class H | 296,000 | 418,491 | ||||||
Banks 4.3% | ||||||||
Agricultural Bank of China Ltd., Class H | 1,591,600 | 766,984 | ||||||
Bank of China Ltd., Class H | 7,573,234 | 3,555,757 | ||||||
Bank of Communications Co., Ltd., Class H | 448,000 | 328,268 | ||||||
BOC Hong Kong (Holdings) Ltd. | 218,000 | 711,951 | ||||||
China Construction Bank Corp., Class H | 7,183,000 | 5,588,565 | ||||||
China Merchants Bank Co., Ltd., Class H | 216,850 | 431,183 | ||||||
Industrial & Commercial Bank of China Ltd., Class H | 5,399,172 | 3,784,960 | ||||||
15,167,668 | ||||||||
Capital Goods 0.3% | ||||||||
China Communications Construction Co., Ltd., Class H | 649,000 | 529,723 | ||||||
China Railway Group Ltd., Class H | 693,000 | 391,333 | ||||||
921,056 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Yue Yuen Industrial Holdings Ltd. | 136,000 | 373,440 |
50 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 3.1% | ||||||||
China Petroleum & Chemical Corp., Class H | 4,850,400 | 3,926,436 | ||||||
China Shenhua Energy Co., Ltd., Class H | 269,500 | 819,785 | ||||||
CNOOC Ltd. | 1,426,000 | 2,900,443 | ||||||
PetroChina Co., Ltd., Class H | 2,861,000 | 3,258,051 | ||||||
10,904,715 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
China Resources Enterprise Ltd. | 132,000 | 467,489 | ||||||
Insurance 0.6% | ||||||||
China Life Insurance Co., Ltd., Class H | 401,000 | 1,058,551 | ||||||
China Pacific Insurance Group Co., Ltd., Class H | 89,000 | 321,613 | ||||||
People’s Insurance Co., Group of China Ltd., Class H | 442,000 | 208,804 | ||||||
Ping An Insurance (Group) Co. of China Ltd., Class H | 65,500 | 516,484 | ||||||
2,105,452 | ||||||||
Materials 0.1% | ||||||||
China National Building Material Co., Ltd., Class H | 268,000 | 262,033 | ||||||
Real Estate 0.1% | ||||||||
China Overseas Land & Investment Ltd. | 138,000 | 427,665 | ||||||
Retailing 0.2% | ||||||||
Belle International Holdings Ltd. | 234,000 | 329,946 | ||||||
GOME Electrical Appliances Holding Ltd. | 3,237,000 | 500,967 | ||||||
830,913 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Lenovo Group Ltd. | 480,000 | 514,178 | ||||||
Telecommunication Services 2.4% | ||||||||
China Mobile Ltd. | 570,600 | 5,929,476 | ||||||
China Telecom Corp., Ltd., Class H | 2,442,000 | 1,275,590 | ||||||
China Unicom (Hong Kong) Ltd. | 717,056 | 1,121,843 | ||||||
8,326,909 | ||||||||
40,720,009 | ||||||||
Colombia 0.3% | ||||||||
Banks 0.1% | ||||||||
Bancolombia S.A. | 15,639 | 215,699 | ||||||
Energy 0.2% | ||||||||
Ecopetrol S.A. | 292,233 | 694,929 | ||||||
910,628 | ||||||||
Czech Republic 0.4% | ||||||||
Telecommunication Services 0.1% | ||||||||
Telefonica Czech Republic A/S | 33,183 | 541,307 | ||||||
Utilities 0.3% | ||||||||
CEZ A/S | 35,047 | 1,008,537 | ||||||
1,549,844 | ||||||||
Egypt 0.2% | ||||||||
Telecommunication Services 0.2% | ||||||||
Global Telecom Holding * | 223,933 | 757,829 | ||||||
Greece 1.8% | ||||||||
Banks 0.6% | ||||||||
Alpha Bank A.E. * | 857,381 | 767,983 | ||||||
National Bank of Greece S.A. * | 158,842 | 902,196 | ||||||
Piraeus Bank S.A. * | 295,060 | 615,933 | ||||||
2,286,112 | ||||||||
Consumer Services 0.5% | ||||||||
OPAP S.A. | 141,502 | 1,757,126 | ||||||
Telecommunication Services 0.4% | ||||||||
Hellenic Telecommunications Organization S.A. * | 99,387 | 1,250,826 | ||||||
Utilities 0.3% | ||||||||
Public Power Corp. S.A. | 64,694 | 961,462 | ||||||
6,255,526 | ||||||||
Hungary 0.6% | ||||||||
Banks 0.2% | ||||||||
OTP Bank plc | 39,595 | 821,406 | ||||||
Energy 0.3% | ||||||||
MOL Hungarian Oil & Gas plc | 12,892 | 881,475 | ||||||
Telecommunication Services 0.1% | ||||||||
Magyar Telekom Telecommunications plc | 298,428 | 409,837 | ||||||
2,112,718 | ||||||||
India 3.3% | ||||||||
Automobiles & Components 0.2% | ||||||||
Mahindra & Mahindra Ltd. | 22,114 | 319,016 | ||||||
Tata Motors Ltd. | 69,719 | 433,573 | ||||||
Tata Motors Ltd., Class A | 11,785 | 37,091 | ||||||
789,680 | ||||||||
Banks 0.5% | ||||||||
Housing Development Finance Corp., Ltd. | 38,137 | 529,925 | ||||||
ICICI Bank Ltd. | 35,517 | 643,697 | ||||||
State Bank of India | 15,535 | 454,001 | ||||||
1,627,623 | ||||||||
Energy 1.3% | ||||||||
Indian Oil Corp., Ltd. | 86,426 | 283,831 | ||||||
Oil & Natural Gas Corp., Ltd. | 280,859 | 1,342,072 | ||||||
Reliance Industries Ltd. | 203,723 | 3,031,183 | ||||||
4,657,086 | ||||||||
Household & Personal Products 0.1% | ||||||||
Hindustan Unilever Ltd. | 37,981 | 376,523 | ||||||
Materials 0.3% | ||||||||
Hindalco Industries Ltd. | 277,576 | 518,978 | ||||||
Tata Steel Ltd. | 105,301 | 573,432 | ||||||
1,092,410 |
See financial notes 51
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Software & Services 0.6% | ||||||||
Infosys Ltd. | 27,365 | 1,462,371 | ||||||
Tata Consultancy Services Ltd. | 16,592 | 570,083 | ||||||
2,032,454 | ||||||||
Telecommunication Services 0.2% | ||||||||
Bharti Airtel Ltd. | 82,693 | 493,574 | ||||||
Utilities 0.1% | ||||||||
NTPC Ltd. | 196,210 | 475,333 | ||||||
11,544,683 | ||||||||
Indonesia 0.7% | ||||||||
Automobiles & Components 0.2% | ||||||||
PT Astra International Tbk | 1,246,000 | 734,627 | ||||||
Banks 0.1% | ||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 488,500 | 342,842 | ||||||
Energy 0.1% | ||||||||
PT Bumi Resources Tbk (c)* | 6,300,000 | 253,694 | ||||||
Telecommunication Services 0.3% | ||||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 5,373,000 | 1,117,640 | ||||||
2,448,803 | ||||||||
Malaysia 1.6% | ||||||||
Banks 0.5% | ||||||||
CIMB Group Holdings Berhad | 226,900 | 539,347 | ||||||
Malayan Banking Berhad | 190,000 | 588,927 | ||||||
Public Bank Berhad | 132,600 | 769,594 | ||||||
1,897,868 | ||||||||
Capital Goods 0.2% | ||||||||
Sime Darby Berhad | 250,200 | 755,719 | ||||||
Consumer Services 0.1% | ||||||||
Genting Berhad | 148,300 | 492,359 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
IOI Corp. Berhad | 226,200 | 390,211 | ||||||
Telecommunication Services 0.4% | ||||||||
Axiata Group Berhad | 301,300 | 655,880 | ||||||
Telekom Malaysia Berhad | 339,500 | 563,762 | ||||||
1,219,642 | ||||||||
Utilities 0.3% | ||||||||
Tenaga Nasional Berhad | 293,000 | 875,577 | ||||||
5,631,376 | ||||||||
Mexico 3.4% | ||||||||
Banks 0.2% | ||||||||
Grupo Financiero Banorte S.A.B. de C.V., Class O | 70,400 | 449,360 | ||||||
Grupo Financiero Santander Mexico S.A.B. de C.V., Class B ADR | 29,600 | 418,248 | ||||||
867,608 | ||||||||
Capital Goods 0.1% | ||||||||
Alfa S.A.B., Class A | 186,100 | 510,349 | ||||||
Food & Staples Retailing 0.3% | ||||||||
Wal-Mart de Mexico S.A.B. de C.V., Series V | 377,100 | 980,378 | ||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Coca-Cola Femsa S.A.B. de C.V., Series L | 18,200 | 221,822 | ||||||
Fomento Economico Mexicano S.A.B. de C.V. | 100,400 | 939,188 | ||||||
Grupo Bimbo S.A.B. de C.V., Series A | 159,300 | 535,141 | ||||||
1,696,151 | ||||||||
Materials 0.8% | ||||||||
Cemex S.A.B. de C.V., Series CPO * | 2,044,328 | 2,174,809 | ||||||
Grupo Mexico S.A.B. de C.V., Series B | 253,400 | 800,369 | ||||||
2,975,178 | ||||||||
Media 0.4% | ||||||||
Grupo Televisa S.A.B., Series CPO | 203,500 | 1,243,093 | ||||||
Telecommunication Services 1.1% | ||||||||
America Movil S.A.B. de C.V., Series L | 3,485,000 | 3,739,485 | ||||||
12,012,242 | ||||||||
Philippines 0.1% | ||||||||
Telecommunication Services 0.1% | ||||||||
Philippine Long Distance Telephone Co. | 4,560 | 302,592 | ||||||
Poland 2.2% | ||||||||
Banks 0.4% | ||||||||
Bank Pekao S.A. | 8,824 | 552,489 | ||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. | 62,410 | 826,742 | ||||||
1,379,231 | ||||||||
Energy 0.4% | ||||||||
Polski Koncern Naftowy Orlen S.A. | 106,997 | 1,509,461 | ||||||
Insurance 0.2% | ||||||||
Powszechny Zaklad Ubezpieczen S.A. | 5,234 | 796,156 | ||||||
Materials 0.4% | ||||||||
KGHM Polska Miedz S.A. | 30,517 | 1,232,033 | ||||||
Telecommunication Services 0.4% | ||||||||
Telekomunikacja Polska S.A. | 402,057 | 1,302,621 | ||||||
Utilities 0.4% | ||||||||
PGE S.A. | 148,809 | 869,256 | ||||||
Tauron Polska Energia S.A. | 363,958 | 593,715 | ||||||
1,462,971 | ||||||||
7,682,473 | ||||||||
Republic of Korea 19.5% | ||||||||
Automobiles & Components 2.1% | ||||||||
Hyundai Mobis | 5,671 | 1,599,676 |
52 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hyundai Motor Co. | 17,754 | 4,229,781 | ||||||
Kia Motors Corp. | 24,977 | 1,451,193 | ||||||
7,280,650 | ||||||||
Banks 1.6% | ||||||||
Hana Financial Group, Inc. | 33,467 | 1,286,883 | ||||||
KB Financial Group, Inc. | 36,200 | 1,425,681 | ||||||
Shinhan Financial Group Co., Ltd. | 51,500 | 2,245,586 | ||||||
Woori Finance Holdings Co., Ltd. | 65,540 | 776,469 | ||||||
5,734,619 | ||||||||
Capital Goods 3.6% | ||||||||
Daelim Industrial Co., Ltd. | 5,498 | 510,342 | ||||||
Daewoo Shipbuilding & Marine Engineering Co., Ltd. | 13,560 | 426,997 | ||||||
Doosan Corp. | 2,584 | 346,167 | ||||||
Doosan Heavy Industries & Construction Co., Ltd. | 9,200 | 375,484 | ||||||
Hyundai Engineering & Construction Co., Ltd. | 7,333 | 420,695 | ||||||
Hyundai Heavy Industries Co., Ltd. | 8,097 | 1,933,540 | ||||||
LG Corp. | 60,098 | 3,552,848 | ||||||
Samsung C&T Corp. | 20,788 | 1,233,517 | ||||||
Samsung Heavy Industries Co., Ltd. | 17,560 | 643,879 | ||||||
SK Holdings Co., Ltd. | 14,270 | 2,586,292 | ||||||
SK Networks Co., Ltd. | 101,250 | 635,622 | ||||||
12,665,383 | ||||||||
Consumer Durables & Apparel 0.8% | ||||||||
LG Electronics, Inc. | 41,572 | 2,662,935 | ||||||
Energy 1.0% | ||||||||
GS Holdings | 18,458 | 1,016,430 | ||||||
S-Oil Corp. | 9,222 | 672,947 | ||||||
SK Innovation Co., Ltd. | 14,167 | 1,985,633 | ||||||
3,675,010 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
E-Mart Co., Ltd. | 1,371 | 328,075 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
KT&G Corp. | 12,779 | 933,653 | ||||||
Insurance 0.4% | ||||||||
Samsung Fire & Marine Insurance Co., Ltd. | 3,401 | 795,303 | ||||||
Samsung Life Insurance Co., Ltd. | 6,006 | 591,379 | ||||||
1,386,682 | ||||||||
Materials 2.6% | ||||||||
Cheil Industries, Inc. | 5,822 | 493,648 | ||||||
Hanwha Corp. | 19,610 | 742,251 | ||||||
Hyosung Corp. | 7,232 | 487,549 | ||||||
Hyundai Steel Co. | 9,193 | 756,934 | ||||||
LG Chem Ltd. | 5,217 | 1,471,622 | ||||||
Lotte Chemical Corp. | 2,639 | 540,730 | ||||||
POSCO | 15,989 | 4,773,370 | ||||||
9,266,104 | ||||||||
Retailing 0.4% | ||||||||
Lotte Shopping Co., Ltd. | 1,352 | 513,014 | ||||||
Shinsegae Co., Ltd. | 3,292 | 828,773 | ||||||
1,341,787 | ||||||||
Semiconductors & Semiconductor Equipment 4.1% | ||||||||
Samsung Electronics Co., Ltd. | 9,631 | 13,281,711 | ||||||
SK Hynix, Inc. * | 44,840 | 1,349,276 | ||||||
14,630,987 | ||||||||
Software & Services 0.6% | ||||||||
NAVER Corp. | 1,034 | 580,247 | ||||||
SK C&C Co., Ltd. | 13,463 | 1,450,983 | ||||||
2,031,230 | ||||||||
Technology Hardware & Equipment 0.7% | ||||||||
LG Display Co., Ltd. * | 59,280 | 1,387,557 | ||||||
Samsung Electro-Mechanics Co., Ltd. | 5,337 | 409,395 | ||||||
Samsung SDI Co., Ltd. | 3,949 | 658,263 | ||||||
2,455,215 | ||||||||
Telecommunication Services 0.7% | ||||||||
LG Uplus Corp. * | 63,200 | 723,646 | ||||||
SK Telecom Co., Ltd. | 8,882 | 1,935,567 | ||||||
2,659,213 | ||||||||
Utilities 0.5% | ||||||||
Korea Electric Power Corp. * | 69,180 | 1,847,520 | ||||||
68,899,063 | ||||||||
Russia 14.4% | ||||||||
Banks 0.6% | ||||||||
Sberbank of Russia ADR | 178,572 | 2,277,217 | ||||||
Energy 11.6% | ||||||||
Gazprom ADR | 1,601,170 | 14,966,778 | ||||||
Gazprom OAO | 71,000 | 332,929 | ||||||
LUKOIL ADR | 227,440 | 14,895,923 | ||||||
Lukoil OAO | 4,800 | 314,704 | ||||||
NovaTek OAO GDR Reg’d | 76,090 | 977,090 | ||||||
Rosneft Oil Co. GDR - Reg’d | 205,574 | 1,621,929 | ||||||
Surgutneftegas ADR | 674,607 | 5,947,681 | ||||||
Tatneft ADR | 44,415 | 1,824,476 | ||||||
40,881,510 | ||||||||
Materials 0.9% | ||||||||
Mechel ADR * | 84,500 | 267,020 | ||||||
Mining & Metallurgical Co. Norilsk Nickel OJSC ADR | 137,278 | 2,073,677 | ||||||
Severstal GDR - Reg’d | 51,134 | 445,416 | ||||||
Uralkali OJSC GDR - Reg’d | 10,500 | 280,183 | ||||||
3,066,296 | ||||||||
Telecommunication Services 1.1% | ||||||||
Mobile TeleSystems ADR | 80,851 | 1,843,403 | ||||||
Rostelecom OJSC ADR | 46,369 | 1,007,709 | ||||||
Sistema JSFC | 403,276 | 449,029 | ||||||
Sistema JSFC GDR - Reg’d | 24,877 | 665,605 | ||||||
3,965,746 | ||||||||
Utilities 0.2% | ||||||||
Federal Hydrogenerating Co., ADR | 249,823 | 421,625 | ||||||
Russian Grids OAO * | 13,500,001 | 363,461 | ||||||
785,086 | ||||||||
50,975,855 |
See financial notes 53
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
South Africa 7.1% | ||||||||
Banks 0.8% | ||||||||
Barclays Africa Group Ltd | 33,886 | 523,376 | ||||||
Nedbank Group Ltd. | 23,098 | 502,193 | ||||||
Standard Bank Group Ltd. | 134,934 | 1,716,643 | ||||||
2,742,212 | ||||||||
Capital Goods 0.7% | ||||||||
Aveng Ltd. * | 196,391 | 576,684 | ||||||
Barloworld Ltd. | 66,148 | 592,565 | ||||||
Bidvest Group Ltd. | 46,687 | 1,243,954 | ||||||
2,413,203 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Steinhoff International Holdings Ltd. * | 190,845 | 736,722 | ||||||
Diversified Financials 0.4% | ||||||||
FirstRand Ltd. | 266,910 | 958,204 | ||||||
Remgro Ltd. | 21,656 | 440,970 | ||||||
1,399,174 | ||||||||
Energy 1.3% | ||||||||
Sasol Ltd. | 87,696 | 4,481,072 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Shoprite Holdings Ltd. | 24,490 | 448,476 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Tiger Brands Ltd. | 16,298 | 478,133 | ||||||
Insurance 0.2% | ||||||||
Sanlam Ltd. | 153,514 | 823,690 | ||||||
Materials 1.2% | ||||||||
Anglo American Platinum Ltd. * | 11,605 | 469,134 | ||||||
AngloGold Ashanti Ltd. | 31,985 | 483,434 | ||||||
ArcelorMittal South Africa Ltd. * | 154,553 | 608,916 | ||||||
Gold Fields Ltd. | 150,454 | 696,514 | ||||||
Impala Platinum Holdings Ltd. | 105,923 | 1,286,612 | ||||||
Kumba Iron Ore Ltd. | 8,933 | 373,580 | ||||||
Sappi Ltd. * | 163,390 | 481,117 | ||||||
4,399,307 | ||||||||
Media 0.3% | ||||||||
Naspers Ltd., N Shares | 9,729 | 910,671 | ||||||
Retailing 0.2% | ||||||||
Imperial Holdings Ltd. | 29,186 | 620,325 | ||||||
Telecommunication Services 1.6% | ||||||||
MTN Group Ltd. | 189,770 | 3,772,088 | ||||||
Telkom SA SOC Ltd. * | 530,757 | 1,384,845 | ||||||
Vodacom Group Ltd. | 34,618 | 397,084 | ||||||
5,554,017 | ||||||||
25,007,002 | ||||||||
Taiwan 12.3% | ||||||||
Banks 0.3% | ||||||||
CTBC Financial Holding Co., Ltd. | 842,994 | 571,830 | ||||||
Mega Financial Holding Co., Ltd. | 625,404 | 541,530 | ||||||
1,113,360 | ||||||||
Capital Goods 0.3% | ||||||||
Far Eastern New Century Corp. | 601,137 | 690,494 | ||||||
Walsin Lihwa Corp. * | 1,470,000 | 455,684 | ||||||
1,146,178 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Pou Chen Corp. | 458,267 | 558,213 | ||||||
Diversified Financials 0.2% | ||||||||
Fubon Financial Holding Co., Ltd. | 474,674 | 695,662 | ||||||
Energy 0.2% | ||||||||
Formosa Petrochemical Corp. | 272,330 | 731,613 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Uni-President Enterprises Corp. | 332,141 | 632,506 | ||||||
Insurance 0.2% | ||||||||
Cathay Financial Holding Co., Ltd. | 422,142 | 637,755 | ||||||
Materials 2.4% | ||||||||
China Steel Corp. | 1,996,489 | 1,735,083 | ||||||
Formosa Chemicals & Fibre Corp. | 801,442 | 2,316,435 | ||||||
Formosa Plastics Corp. | 667,732 | 1,814,581 | ||||||
Nan Ya Plastics Corp. | 847,811 | 1,933,720 | ||||||
Taiwan Cement Corp. | 395,299 | 575,314 | ||||||
8,375,133 | ||||||||
Semiconductors & Semiconductor Equipment 2.7% | ||||||||
Advanced Semiconductor Engineering, Inc. | 696,094 | 685,408 | ||||||
MediaTek, Inc. | 96,138 | 1,314,392 | ||||||
Siliconware Precision Industries Co. | 585,270 | 711,083 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1,578,689 | 5,818,361 | ||||||
United Microelectronics Corp. | 2,692,965 | 1,142,391 | ||||||
9,671,635 | ||||||||
Technology Hardware & Equipment 4.9% | ||||||||
Innolux Corp. * | 1,088,357 | 431,627 | ||||||
Acer, Inc. * | 1,438,496 | 939,857 | ||||||
Asustek Computer, Inc. | 189,041 | 1,442,779 | ||||||
AU Optronics Corp. * | 4,030,800 | 1,318,442 | ||||||
Compal Electronics, Inc. | 2,017,305 | 1,578,445 | ||||||
Delta Electronics, Inc. | 172,025 | 894,611 | ||||||
Hon Hai Precision Industry Co., Ltd. | 1,697,800 | 4,316,306 | ||||||
HTC Corp. | 225,473 | 1,106,692 | ||||||
Inventec Corp. | 1,165,639 | 1,043,316 | ||||||
Lite-On Technology Corp. | 449,700 | 787,268 | ||||||
Pegatron Corp. | 600,264 | 836,390 | ||||||
Quanta Computer, Inc. | 450,500 | 1,068,041 | ||||||
Synnex Technology International Corp. | 275,000 | 438,716 | ||||||
Wistron Corp. | 810,222 | 760,657 | ||||||
WPG Holdings Ltd. | 333,000 | 405,028 | ||||||
17,368,175 | ||||||||
Telecommunication Services 0.7% | ||||||||
Chunghwa Telecom Co., Ltd. | 541,906 | 1,739,774 | ||||||
Far EasTone Telecommunications Co., Ltd. | 177,622 | 406,897 | ||||||
Taiwan Mobile Co., Ltd. | 124,600 | 424,997 | ||||||
2,571,668 | ||||||||
43,501,898 |
54 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Thailand 1.0% | ||||||||
Energy 0.7% | ||||||||
PTT Exploration & Production PCL | 108,800 | 589,006 | ||||||
PTT PCL | 157,687 | 1,606,001 | ||||||
Thai Oil PCL | 215,000 | 435,181 | ||||||
2,630,188 | ||||||||
Materials 0.1% | ||||||||
PTT Global Chemical PCL | 169,600 | 427,746 | ||||||
Telecommunication Services 0.2% | ||||||||
Advanced Info Service PCL - Reg’d | 71,075 | 582,301 | ||||||
3,640,235 | ||||||||
Turkey 1.2% | ||||||||
Banks 0.5% | ||||||||
Akbank T.A.S. | 121,413 | 474,557 | ||||||
Turkiye Garanti Bankasi A/S | 146,279 | 586,554 | ||||||
Turkiye Halk Bankasi A/S | 38,676 | 310,771 | ||||||
Turkiye Is Bankasi, Class C | 158,666 | 433,457 | ||||||
1,805,339 | ||||||||
Capital Goods 0.2% | ||||||||
KOC Holding A/S | 136,582 | 668,946 | ||||||
Diversified Financials 0.1% | ||||||||
Haci Omer Sabanci Holding A/S | 84,864 | 401,477 | ||||||
Energy 0.2% | ||||||||
Tupras-Turkiye Petrol Rafinerileri A/S | 29,461 | 665,949 | ||||||
Telecommunication Services 0.2% | ||||||||
Turkcell Iletisim Hizmetleri A/S * | 107,711 | 668,415 | ||||||
4,210,126 | ||||||||
Total Common Stock | ||||||||
(Cost $295,265,216) | 310,499,007 | |||||||
Preferred Stock 9.7% of net assets | ||||||||
Brazil 7.9% | ||||||||
Banks 2.0% | ||||||||
Banco Bradesco S.A. | 160,730 | 2,315,627 | ||||||
Itau Unibanco Holding S.A. | 265,540 | 4,108,657 | ||||||
Itausa - Investimentos Itau S.A. | 116,822 | 503,740 | ||||||
6,928,024 | ||||||||
Energy 2.1% | ||||||||
Petroleo Brasileiro S.A. | 806,682 | 7,314,281 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Companhia de Bebidas das Americas | 27,202 | 1,012,019 | ||||||
Materials 2.4% | ||||||||
Bradespar S.A. | 33,800 | 401,754 | ||||||
Gerdau S.A. | 211,465 | 1,668,694 | ||||||
Metalurgica Gerdau S.A. | 153,460 | 1,563,947 | ||||||
Usinas Siderurgicas de Minas Gerais S.A., Class A * | 124,680 | 658,968 | ||||||
Vale S.A. | 297,839 | 4,359,523 | ||||||
8,652,886 | ||||||||
Telecommunication Services 0.4% | ||||||||
Oi S.A. | 190,611 | 318,712 | ||||||
Telefonica Brasil S.A. | 44,134 | 969,525 | ||||||
1,288,237 | ||||||||
Utilities 0.7% | ||||||||
Centrais Eletricas Brasileiras S.A., Class B | 133,920 | 694,548 | ||||||
Companhia Energetica de Minas Gerais | 110,438 | 982,515 | ||||||
Companhia Paranaense de Energia-Copel | 25,912 | 361,347 | ||||||
Eletropaulo Metropolitana S.A. | 119,484 | 531,568 | ||||||
2,569,978 | ||||||||
27,765,425 | ||||||||
Colombia 0.1% | ||||||||
Banks 0.1% | ||||||||
Bancolombia S.A. | 20,121 | 281,769 | ||||||
Republic of Korea 0.7% | ||||||||
Automobiles & Components 0.2% | ||||||||
Hyundai Motor Co. | 2,500 | 271,982 | ||||||
Hyundai Motor Co., 2nd | 3,899 | 440,659 | ||||||
712,641 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
LG Electronics, Inc. | 7,070 | 172,231 | ||||||
Materials 0.0% | ||||||||
LG Chem Ltd. | 878 | 111,419 | ||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
Samsung Electronics Co., Ltd. | 1,705 | 1,643,566 | ||||||
2,639,857 | ||||||||
Russia 1.0% | ||||||||
Energy 1.0% | ||||||||
AK Transneft OAO | 1,371 | 3,496,801 | ||||||
Total Preferred Stock | ||||||||
(Cost $39,367,592) | 34,183,852 | |||||||
Other Investment Company 0.8% of net assets | ||||||||
United States 0.8% | ||||||||
iShares MSCI Emerging Markets ETF | 67,500 | 2,866,050 | ||||||
Total Other Investment Company | ||||||||
(Cost $2,898,912) | 2,866,050 | |||||||
See financial notes 55
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 2.4% of net assets | ||||||||
Time Deposit 2.1% | ||||||||
Wells Fargo | ||||||||
US Dollar | ||||||||
0.03%, 11/01/13 | 7,430,418 | 7,430,418 | ||||||
U.S. Treasury Obligations 0.3% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/19/13 (a)(b) | 100,000 | 100,000 | ||||||
0.01%, 12/19/13 (a)(b) | 895,000 | 894,994 | ||||||
994,994 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $8,425,412) | 8,425,412 | |||||||
End of Investments. |
At 10/31/13, the tax basis cost of the fund’s investments was $350,696,164 and the unrealized appreciation and depreciation were $36,850,839 and ($31,572,682), respectively, with a net unrealized appreciation of $5,278,157.
At 10/31/13, the values of certain foreign securities held by the fund aggregating $306,729,784 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. | |
(c) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
ADR — | American Depositary Receipt | |
ETF — | Exchange traded fund | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered |
In addition to the above, the fund held the following at 10/31/13:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
MSCI Emerging Markets, mini, Long, expires 12/20/13 | 90 | 4,607,550 | 141,576 |
56 See financial notes
Table of Contents
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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, 2013, and for the year then ended and have issued our unqualified reports thereon dated December 17, 2013 (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, 2013 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.
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December 17, 2013
PricewaterhouseCoopers LLP, Three Embarcadero Center, San Francisco, CA 94111
T: (415) 498 5000, F: (415) 498 7100, www.pwc.com/us
T: (415) 498 5000, F: (415) 498 7100, www.pwc.com/us
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: 12/13/13
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: 12/13/13
By: | /s/ George Pereira | |||
Principal Financial Officer |
Date: 12/13/13