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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)
(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, 2014
Item 1: Report(s) to Shareholders.
Table of Contents
Annual report dated October 31, 2014, enclosed.
Schwab Equity Index Funds
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market
Index Fund®
Schwab International
Index Fund®
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This wrapper is not part of the shareholder report.
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Schwab Equity Index Funds
Annual Report
October 31, 2014
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, 2014 | ||||
Schwab® S&P 500 Index Fund (Ticker Symbol: SWPPX) | 17.16% | |||
S&P 500® Index | 17.27% | |||
Fund Category: Morningstar Large Blend | 14.33% | |||
Performance Details | pages 6-7 | |||
Schwab 1000 Index® Fund (Ticker Symbol: SNXFX) | 16.36% | |||
Schwab 1000 Index® | 16.62% | |||
Fund Category: Morningstar Large Blend | 14.33% | |||
Performance Details | pages 8-9 | |||
Schwab Small-Cap Index Fund® (Ticker Symbol: SWSSX) | 8.08% | |||
Russell 2000® Index | 8.06% | |||
Fund Category: Morningstar Small Blend | 7.66% | |||
Performance Details | pages 10-11 | |||
Schwab Total Stock Market Index Fund® (Ticker Symbol: SWTSX) | 15.93% | |||
Dow Jones U.S. Total Stock Market Index | 16.00% | |||
Fund Category: Morningstar Large Blend | 14.33% | |||
Performance Details | pages 12-13 | |||
Schwab International Index Fund®1 (Ticker Symbol: SWISX) | 0.09% | |||
MSCI EAFE® Index (Net) | -0.60% | |||
Fund Category: Morningstar Foreign Large Blend | -0.04% | |||
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.
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/0000950123-15-000008/f30296ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
For 25 years, Charles Schwab Investment Management has been committed to building funds that are designed to serve as part of the foundation of an investor’s portfolio. Our Schwab Equity Index Funds track the performance of stock market indexes constructed by industry-leading index providers, seeking returns by modeling their portfolios accordingly.
For the 12-month reporting period ended October 31, 2014, the funds generated returns that were closely aligned with their respective indices, and in most cases reflected a rally by U.S. stocks. For the Schwab International Index Fund, the depreciation of many foreign currencies versus the U.S. dollar reduced its total return to approximately zero percent.
In the U.S., the Federal Reserve continued to maintain its accommodative monetary policy. This combined with a stronger economy and favorable earnings reports by select companies drove U.S. stock market indices to record highs even as volatility increased. Large cap names were favored by the market, outperforming small-cap stocks.
Outside the U.S., economic growth generally stalled. This convinced the Bank of Japan and many other central banks to maintain low interest rates, even as the Fed began to scale back its policies. In response, the yen and other overseas currencies depreciated versus the U.S. dollar, reducing international stock returns in U.S. dollar terms. Financial markets faced additional hurdles that included continued geopolitical tensions.1 These and other factors contributed
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2014
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 17.27% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 8.06% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −0.60% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 4.14% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.03% | Barclays U.S. Treasury Bills 1-3 Months Index: measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctcaptst02.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
For the 12-month reporting period ended October 31, 2014, the funds generated returns that were closely aligned with their respective indices, and in most cases reflected a rally by U.S. stocks.
to heightened market uncertainty. Reflecting this environment, the S&P 500 returned 17.3% and the MSCI EAFE Index returned -0.6%.2
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/0000950123-15-000008/f30296ctschandom.gif)
1 To find out more information, please read “Investments in Russian Securities” in the “What’s New” section on www.schwabfunds.com.
2 The total return cited is for the MSCI EAFE Index (Net), which is calculated net of foreign withholding taxes.
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. |
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.
Performance. The fund returned 17.16% for the 12-month reporting period ended October 31, 2014, compared with the index, which returned 17.27%. 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. U.S. stocks produced double-digit returns for the 12-month reporting period, with large-cap stocks outperforming small-cap stocks. The Federal Reserve left short-term interest rates historically low, making financing more affordable for businesses and households and generally supporting stocks. Despite heightened geopolitical tensions and an uncertain global economic outlook, the U.S. economy rebounded during the reporting period, and forecasts for stronger earnings by select companies contributed positively to market performance.
Contributors and Detractors. The Information Technology sector contributed the most to the index’s return, and to the return of the fund. The large average weight of this sector represents part of the reason for this contribution, with Information Technology stocks representing approximately 19% of the fund. The Information Technology sector returned approximately 26% for the 12-month reporting period, reflecting the overall performance of companies involved in Internet and software services. One example from this sector is Apple, Inc., a company that designs, manufactures, and markets personal computers and related computing, mobile communication, and media devices, as well as a variety of related software and services. The fund’s holdings of Apple, Inc. represented the fund’s largest position within this sector and returned approximately 48%. The Health Care sector was another significant contributor to the fund’s overall performance, representing an average weight of approximately 13% of the fund and returning approximately 30%.
The Telecommunication Services sector also generated positive returns for the fund, but contributed the least to the fund’s performance. Telecommunication Services stocks represented an average weight of approximately 3% of the fund and returned approximately 5%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One example from this sector is AT&T, Inc., a communications holding company. The fund’s holdings of AT&T, Inc. returned approximately 1%. The Materials sector was another weak overall contributor to the performance of the fund. Materials stocks represented an average weight of approximately 3% of the fund and returned approximately 13% for the 12-month reporting period.
As of 10/31/14:
Statistics
Number of Holdings | 508 | |||
Weighted Average Market Cap ($ x 1,000,000) | $132,753 | |||
Price/Earnings Ratio (P/E) | 18.9 | |||
Price/Book Ratio (P/B) | 2.7 | |||
Portfolio Turnover Rate | 2% |
Sector Weightings % of Investments
Information Technology | 19.1% | |||
Financials | 16.0% | |||
Health Care | 13.9% | |||
Consumer Discretionary | 11.4% | |||
Industrials | 10.1% | |||
Consumer Staples | 9.4% | |||
Energy | 9.0% | |||
Materials | 3.2% | |||
Utilities | 3.1% | |||
Telecommunication Services | 2.3% | |||
Other | 2.5% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 3.5% | |||
Exxon Mobil Corp. | 2.3% | |||
Microsoft Corp. | 2.1% | |||
Johnson & Johnson | 1.7% | |||
General Electric Co. | 1.4% | |||
Berkshire Hathaway, Inc., Class B | 1.4% | |||
Wells Fargo & Co. | 1.4% | |||
The Procter & Gamble Co. | 1.3% | |||
JPMorgan Chase & Co. | 1.2% | |||
Chevron Corp. | 1.2% | |||
Total | 17.5% |
Management 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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsspif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab® S&P 500 Index Fund (5/19/97) | 17.16 | % | 16.60 | % | 8.17 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Fund Category: Morningstar Large Blend | 14.33 | % | 15.03 | % | 7.58 | % |
Fund Expense Ratio4: 0.09%
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 – 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 | 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 Equity Index Funds 7
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Schwab 1000 Index® Fund
The Schwab 1000 Index Fund (the fund) seeks to match the total return of the Schwab 1000 Index (the index), which includes the stocks of the largest 1,000 publicly traded companies in the U.S., with size being determined by market capitalization (total market value of all shares outstanding). To pursue its 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.
Performance. The fund returned 16.36% for the 12-month period ended October 31, 2014, compared with the index, which returned 16.62%. 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 produced double-digit returns for the 12-month reporting period, with large-cap stocks outperforming small-cap stocks. The Federal Reserve left short-term interest rates historically low, making financing more affordable for businesses and households and generally supporting stocks. Despite heightened geopolitical tensions and an uncertain global economic outlook, the U.S. economy rebounded during the reporting period, and forecasts for stronger earnings by select companies contributed positively to market performance.
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 representing approximately 18% of the fund. The Information Technology sector returned approximately 24% for the 12-month reporting period, reflecting the overall performance of companies involved in Internet and software services. One example from this sector is Apple, Inc., a company that designs, manufactures, and markets personal computers and related computing, mobile communication, and media devices, as well as a variety of related software and services. The fund’s holdings of Apple, Inc. returned approximately 48%. The Health Care sector also provided meaningful contributions to the fund’s return, representing an average weight of approximately 13% of the fund and returning approximately 30%.
The Telecommunication Services sector also generated positive returns for the fund, but was a weak overall contributor to the fund’s performance. The Telecommunication Services sector represented an average weight of approximately 2% of the fund and returned approximately 6%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One example from this sector is Telephone and Data Systems, Inc., a diversified telecommunications company. The fund’s holdings of Telephone and Data Systems, Inc. returned approximately -20%. The Energy sector was another weak overall contributor to the performance of the fund, representing an average weight of approximately 10% of the fund and returning approximately 4% for the 12-month reporting period.
As of 10/31/14:
Statistics
Number of Holdings | 995 | |||
Weighted Average Market Cap ($ x 1,000,000) | $117,350 | |||
Price/Earnings Ratio (P/E) | 20.1 | |||
Price/Book Ratio (P/B) | 2.7 | |||
Portfolio Turnover Rate | 4% |
Sector Weightings % of Investments
Information Technology | 18.9% | |||
Financials | 16.7% | |||
Health Care | 13.8% | |||
Consumer Discretionary | 12.1% | |||
Industrials | 11.0% | |||
Consumer Staples | 8.7% | |||
Energy | 8.7% | |||
Materials | 3.5% | |||
Utilities | 3.1% | |||
Telecommunication Services | 2.3% | |||
Other | 1.2% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 3.1% | |||
Exxon Mobil Corp. | 2.0% | |||
Microsoft Corp. | 1.9% | |||
Johnson & Johnson | 1.5% | |||
General Electric Co. | 1.3% | |||
Berkshire Hathaway, Inc., Class B | 1.2% | |||
Wells Fargo & Co. | 1.2% | |||
The Procter & Gamble Co. | 1.1% | |||
Chevron Corp. | 1.1% | |||
JPMorgan Chase & Co. | 1.1% | |||
Total | 15.5% |
Management 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
Table of Contents
Schwab 1000 Index® Fund
Performance and Fund Facts as of 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296cts1if.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab 1000 Index® Fund (4/2/91) | 16.36 | % | 16.56 | % | 8.28 | % | |||||||||
Schwab 1000 Index® | 16.62 | % | 16.91 | % | 8.57 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Fund Category: Morningstar Large Blend | 14.33 | % | 15.03 | % | 7.58 | % |
Fund Expense Ratios4: 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 | 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. The expense information shown in the table has been restated to reflect the removal of expenses incurred indirectly by the fund through its investment in business development companies (“BDCs”). The fund’s benchmark index no longer includes BDCs. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 9
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Schwab Small-Cap Index Fund®
The Schwab Small-Cap Index Fund (the fund) seeks to track the total return of the Russell 2000 Index (the index), which is designed to measure the performance of the small-cap sector of the U.S. equity market. To pursue its 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.
Performance. The fund returned 8.08% for the 12-month period ended October 31, 2014, compared with the index, which returned 8.06%. 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. Also, the fund engaged in securities lending, which positively contributed to the fund’s performance versus the index.
Market Highlights. Small-cap U.S. stocks underperformed large-cap U.S. stocks, though both generated positive returns for the 12-month reporting period. The Federal Reserve left short-term interest rates historically low, making financing more affordable for businesses and households and generally supporting stocks. Despite heightened geopolitical tensions and an uncertain global economic outlook, the U.S. economy rebounded during the reporting period, and forecasts for stronger earnings by select companies contributed positively to market performance.
Contributors and Detractors. The Health Care sector contributed the most to the index’s return, and to the return of the fund. Health Care stocks represented approximately 13% of the fund and returned approximately 22% for the 12-month reporting period, reflecting the overall performance of health care providers, manufacturers and distributors of health care equipment and supplies, health care technology companies, as well as companies involved in the research, development, production and marketing of pharmaceuticals and biotechnology products. One example from this sector is InterMune, Inc., a biotechnology company. The fund’s holdings of InterMune, Inc. produced triple-digit returns of approximately 426%. The Financials sector also provided meaningful contributions to performance, representing an average weight of approximately 23% of the fund and returning approximately 12%.
The Energy sector was the only detractor from the returns of both the index and the fund. The Energy sector represented an average weight of approximately 6% of the fund and returned approximately -18%, reflecting the overall performance of companies engaged in exploration and production, refining and marketing, and storage and transportation of oil, gas, coal and consumable fuels, as well as companies that offer oil and gas equipment and services. One example from this sector is Energy XXI (Bermuda) Ltd., a company that explores for and produces oil and natural gas. The fund’s holdings of Energy XXI (Bermuda) Ltd. returned approximately -73%. The Telecommunication Services sector was the weakest contributor to the performance of the fund, representing an average weight of approximately 1% of the fund and returning approximately 1% for the 12-month reporting period.
As of 10/31/14:
Statistics
Number of Holdings | 1,995 | |||
Weighted Average Market Cap ($ x 1,000,000) | $1,834 | |||
Price/Earnings Ratio (P/E) | 59.1 | |||
Price/Book Ratio (P/B) | 2.1 | |||
Portfolio Turnover Rate | 12% |
Sector Weightings % of Investments
Financials | 23.0% | |||
Information Technology | 16.9% | |||
Industrials | 13.3% | |||
Health Care | 13.2% | |||
Consumer Discretionary | 12.4% | |||
Materials | 4.5% | |||
Energy | 4.4% | |||
Utilities | 3.3% | |||
Consumer Staples | 3.0% | |||
Telecommunication Services | 0.7% | |||
Other | 5.3% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Puma Biotechnology, Inc. | 0.4% | |||
Isis Pharmaceuticals, Inc. | 0.3% | |||
WEX, Inc. | 0.3% | |||
Team Health Holdings, Inc. | 0.3% | |||
Brunswick Corp. | 0.3% | |||
Prosperity Bancshares, Inc. | 0.3% | |||
RLJ Lodging Trust | 0.3% | |||
The Ultimate Software Group, Inc. | 0.2% | |||
LaSalle Hotel Properties | 0.2% | |||
CNO Financial Group, Inc. | 0.2% | |||
Total | 2.8% |
Management 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 many 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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctssif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Small-Cap Index Fund® (5/19/97) | 8.08 | % | 17.96 | % | 9.51 | % | |||||||||
Russell 2000® Index | 8.06 | % | 17.39 | % | 8.67 | % | |||||||||
Small-Cap Spliced Index | 8.06 | % | 17.98 | % | 9.59 | % | |||||||||
Fund Category: Morningstar Small Blend | 7.66 | % | 16.61 | % | 8.49 | % |
Fund Expense Ratios4: Net 0.17%; Gross 0.20%
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 | 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. The expense information shown in the table has been restated to reflect the removal of expenses incurred indirectly by the fund through its investment in business development companies (“BDCs”). The fund’s benchmark index no longer includes BDCs. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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
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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.
Performance. The fund returned 15.93% for the 12-month period ended October 31, 2014, compared with the index, which returned 16.00%. 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 produced double-digit returns for the 12-month reporting period, with large-cap stocks outperforming small-cap stocks. The Federal Reserve left short-term interest rates historically low, making financing more affordable for businesses and households and generally supporting stocks. Despite heightened geopolitical tensions and an uncertain global economic outlook, the U.S. economy rebounded during the reporting period, and forecasts for stronger earnings by select companies contributed positively to market performance.
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 representing approximately 18% of the fund. The Information Technology sector returned approximately 23% for the 12-month reporting period, reflecting the overall performance of companies involved in Internet and software services. One example from this sector is Apple, Inc., a company that designs, manufactures, and markets personal computers and related computing, mobile communication, and media devices, as well as a variety of related software and services. The fund’s holdings of Apple, Inc. represented the fund’s largest position within this sector and returned approximately 48%. The Health Care sector was another significant contributor to the fund’s overall performance, representing an average weight of approximately 13% of the fund and returning approximately 29%.
The Telecommunication Services sector also generated positive returns for the fund, but contributed the least to the fund’s performance. Telecommunication Services stocks represented an average weight of approximately 2% of the fund and returned approximately 6%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One example from this sector is NII Holdings, Inc. (Class B), a company that provides mobile communications for business customers in Latin America. The fund’s holdings of NII Holdings, Inc. (Class B) returned approximately -98%. The Energy sector was another comparatively weak contributor to the performance of the fund. Energy stocks represented an average weight of approximately 9% of the fund and returned approximately 3% for the 12-month reporting period.
As of 10/31/14:
Statistics
Number of Holdings | 2,511 | |||
Weighted Average Market Cap ($ x 1,000,000) | $107,838 | |||
Price/Earnings Ratio (P/E) | 20.9 | |||
Price/Book Ratio (P/B) | 2.6 | |||
Portfolio Turnover Rate | 1% |
Sector Weightings % of Investments
Information Technology | 18.4% | |||
Financials | 17.2% | |||
Health Care | 13.5% | |||
Consumer Discretionary | 12.1% | |||
Industrials | 11.0% | |||
Energy | 8.2% | |||
Consumer Staples | 8.1% | |||
Materials | 3.6% | |||
Utilities | 3.1% | |||
Telecommunication Services | 2.1% | |||
Other | 2.7% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 2.9% | |||
Exxon Mobil Corp. | 1.8% | |||
Microsoft Corp. | 1.7% | |||
Johnson & Johnson | 1.3% | |||
General Electric Co. | 1.2% | |||
Berkshire Hathaway, Inc., Class B | 1.1% | |||
Wells Fargo & Co. | 1.1% | |||
The Procter & Gamble Co. | 1.0% | |||
Chevron Corp. | 1.0% | |||
JPMorgan Chase & Co. | 1.0% | |||
Total | 14.1% |
Management 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
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Schwab Total Stock Market Index Fund®
Performance and Fund Facts as of 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctstsmif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Total Stock Market Index Fund® (6/1/99) | 15.93 | % | 17.02 | % | 8.71 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 17.09 | % | 8.71 | % | |||||||||
Fund Category: Morningstar Large Blend | 14.33 | % | 15.03 | % | 7.58 | % |
Fund Expense Ratios4: 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.
Index ownership – “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 | 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 the 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.
Performance. The fund returned 0.09% for the 12-month period ended October 31, 2014, compared with the index, which returned -0.60%. 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. Also, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings contributed to the fund’s relative performance.1
Market Highlights. Stocks in developed international markets produced slightly negative overall returns for the 12-month reporting period, in part due to continued geopolitical tensions and unsteady global economic growth. The reduction of some stimulative measures by the Federal Reserve contributed to the depreciation of many international currencies versus the U.S. dollar, generally reducing overall returns on overseas investments.
Contributors and Detractors. Stocks from Switzerland were among the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of approximately 9% of the fund. Swiss stocks returned approximately 4% in U.S. dollar terms. One example from this market is Novartis AG, a company that manufactures pharmaceutical and consumer healthcare products. The fund’s holdings of Novartis AG returned approximately 23% in U.S. dollar terms. Stocks from Hong Kong also provided meaningful contributions to the returns of both the index and the fund, representing an average weight of approximately 3% of the fund and returning approximately 10% in U.S. dollar terms.
Stocks from France were among the biggest detractors from the total return of the fund. French stocks represented an average weight of approximately 10% of the fund and returned approximately -6% in U.S. dollar terms. One example from this market is Sanofi, a global pharmaceutical company that researches, develops, and manufactures prescription pharmaceuticals and vaccines. The fund’s holdings of Sanofi returned approximately -10% in U.S. dollar terms. Stocks from Japan also detracted from the performance of the fund, representing an average weight of approximately 20% of the fund and returning approximately -0.5% in U.S. dollar terms.
As of 10/31/14:
Statistics
Number of Holdings | 917 | |||
Weighted Average Market Cap ($ x 1,000,000) | $63,589 | |||
Price/Earnings Ratio (P/E) | 17.5 | |||
Price/Book Ratio (P/B) | 1.6 | |||
Portfolio Turnover Rate | 2% |
Sector Weightings % of Investments
Financials | 25.1% | |||
Industrials | 11.9% | |||
Consumer Discretionary | 11.3% | |||
Health Care | 10.6% | |||
Consumer Staples | 10.6% | |||
Materials | 7.3% | |||
Energy | 6.1% | |||
Telecommunication Services | 4.8% | |||
Information Technology | 4.4% | |||
Utilities | 3.8% | |||
Other | 4.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets2
Nestle S.A. – Reg’d | 1.8% | |||
Novartis AG – Reg’d | 1.6% | |||
Roche Holding AG | 1.5% | |||
HSBC Holdings plc | 1.5% | |||
Toyota Motor Corp. | 1.2% | |||
Royal Dutch Shell plc, A Shares | 1.0% | |||
BP plc | 1.0% | |||
Total S.A. | 1.0% | |||
Bayer AG – Reg’d | 0.9% | |||
Commonwealth Bank of Australia | 0.9% | |||
Total | 12.4% |
Management views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
1 | 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. | |
2 | 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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsiif.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab International Index Fund® (5/19/97) | 0.09 | % | 6.90 | % | 5.86 | % | |||||||||
MSCI EAFE® Index (Net) | -0.60 | % | 6.52 | % | 5.81 | % | |||||||||
International Spliced Index | -0.60 | % | 6.61 | % | 5.98 | % | |||||||||
Fund Category: Morningstar Foreign Large Blend | -0.04 | % | 6.66 | % | 5.84 | % |
Fund Expense Ratios4: Net 0.19%; Gross 0.23%
Country Weightings % of Investments
Japan | 20.5% | |||
United Kingdom | 20.1% | |||
France | 9.2% | |||
Switzerland | 8.9% | |||
Germany | 8.4% | |||
Australia | 7.7% | |||
Spain | 3.4% | |||
Hong Kong | 3.0% | |||
Sweden | 2.9% | |||
Netherlands | 2.6% | |||
Other Countries | 13.3% | |||
Total | 100.0% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
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 | 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 the 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
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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, 2014 and held through October 31, 2014.
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 5/1/14 | at 10/31/14 | 05/1/14–10/31/14 | |||||||||||||
Schwab® S&P 500 Index Fund | ||||||||||||||||
Actual Return | 0.09% | $ | 1,000.00 | $ | 1,081.80 | $ | 0.47 | |||||||||
Hypothetical 5% Return | 0.09% | $ | 1,000.00 | $ | 1,024.75 | $ | 0.46 | |||||||||
Schwab 1000 Index® Fund | ||||||||||||||||
Actual Return | 0.29% | $ | 1,000.00 | $ | 1,077.30 | $ | 1.52 | |||||||||
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 | $ | 1,048.80 | $ | 0.88 | |||||||||
Hypothetical 5% Return | 0.17% | $ | 1,000.00 | $ | 1,024.34 | $ | 0.87 | |||||||||
Schwab Total Stock Market Index Fund® | ||||||||||||||||
Actual Return | 0.09% | $ | 1,000.00 | $ | 1,075.70 | $ | 0.47 | |||||||||
Hypothetical 5% Return | 0.09% | $ | 1,000.00 | $ | 1,024.75 | $ | 0.46 | |||||||||
Schwab International Index Fund® | ||||||||||||||||
Actual Return | 0.19% | $ | 1,000.00 | $ | 955.70 | $ | 0.94 | |||||||||
Hypothetical 5% Return | 0.19% | $ | 1,000.00 | $ | 1,024.24 | $ | 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
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 27.78 | 22.35 | 19.82 | 18.70 | 16.28 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.56 | 0.52 | 0.44 | 0.39 | 0.35 | |||||||||||||||||
Net realized and unrealized gains (losses) | 4.13 | 5.40 | 2.49 | 1.09 | 2.31 | |||||||||||||||||
Total from investment operations | 4.69 | 5.92 | 2.93 | 1.48 | 2.66 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.48 | ) | (0.49 | ) | (0.40 | ) | (0.36 | ) | (0.24 | ) | ||||||||||||
Net asset value at end of period | 31.99 | 27.78 | 22.35 | 19.82 | 18.70 | |||||||||||||||||
Total return (%) | 17.16 | 27.06 | 15.09 | 7.97 | 16.50 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.09 | 0.09 | 0.09 | 0.09 | 0.09 | |||||||||||||||||
Gross operating expenses | 0.09 | 0.09 | 0.10 | 0.10 | 0.10 | |||||||||||||||||
Net investment income (loss) | 1.89 | 2.10 | 2.09 | 1.96 | 1.97 | |||||||||||||||||
Portfolio turnover rate | 2 | 1 | 2 | 3 | 2 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 20,473 | 17,121 | 12,687 | 10,909 | 10,007 |
See financial notes 17
Table of Contents
Schwab S&P 500 Index Fund
Condensed Portfolio Holdings as of October 31, 2014
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 | .5% | Common Stock | 11,021,049,498 | 19,950,703,019 | ||||||||
0 | .1% | Other Investment Company | 29,007,003 | 29,007,003 | ||||||||
2 | .3% | Short-Term Investments | 479,925,014 | 479,925,014 | ||||||||
99 | .9% | Total Investments | 11,529,981,515 | 20,459,635,036 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 13,654,324 | |||||||||
100 | .0% | Net Assets | 20,473,289,360 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 97.5% of net assets | ||||||||||||
Automobiles & Components 1.0% | ||||||||||||
Other Securities | 1.0 | 202,304,005 | ||||||||||
Banks 5.9% | ||||||||||||
Bank of America Corp. | 11,678,311 | 1.0 | 200,399,817 | |||||||||
Citigroup, Inc. | 3,375,447 | 0.9 | 180,687,678 | |||||||||
JPMorgan Chase & Co. | 4,202,531 | 1.2 | 254,169,075 | |||||||||
Wells Fargo & Co. | 5,272,309 | 1.4 | 279,906,885 | |||||||||
Other Securities | 1.4 | 290,450,329 | ||||||||||
5.9 | 1,205,613,784 | |||||||||||
Capital Goods 7.4% | ||||||||||||
3M Co. | 726,719 | 0.5 | 111,747,581 | |||||||||
General Electric Co. | 11,121,452 | 1.4 | 287,044,676 | |||||||||
The Boeing Co. | 747,654 | 0.5 | 93,389,461 | |||||||||
United Technologies Corp. | 931,635 | 0.5 | 99,684,945 | |||||||||
Other Securities | 4.5 | 925,519,292 | ||||||||||
7.4 | 1,517,385,955 | |||||||||||
Commercial & Professional Supplies 0.6% | ||||||||||||
Other Securities | 0.6 | 126,388,673 | ||||||||||
Consumer Durables & Apparel 1.3% | ||||||||||||
Other Securities | 1.3 | 265,310,261 | ||||||||||
Consumer Services 1.6% | ||||||||||||
McDonald’s Corp. | 1,101,738 | 0.5 | 103,265,903 | |||||||||
Other Securities | 1.1 | 219,803,923 | ||||||||||
1.6 | 323,069,826 | |||||||||||
Diversified Financials 5.1% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 2,022,430 | 1.4 | 283,463,789 | |||||||||
The Charles Schwab Corp. (a) | 1,302,581 | 0.2 | 37,344,997 | |||||||||
Other Securities | 3.5 | 717,649,565 | ||||||||||
5.1 | 1,038,458,351 | |||||||||||
Energy 9.0% | ||||||||||||
Chevron Corp. | 2,114,734 | 1.2 | 253,662,343 | |||||||||
ConocoPhillips | 1,368,090 | 0.5 | 98,707,693 | |||||||||
Exxon Mobil Corp. | 4,749,241 | 2.3 | 459,299,097 | |||||||||
Schlumberger Ltd. | 1,447,415 | 0.7 | 142,801,964 | |||||||||
Other Securities | 4.3 | 878,926,479 | ||||||||||
9.0 | 1,833,397,576 | |||||||||||
Food & Staples Retailing 2.2% | ||||||||||||
CVS Health Corp. | 1,291,551 | 0.5 | 110,827,991 | |||||||||
Wal-Mart Stores, Inc. | 1,750,302 | 0.7 | 133,495,534 | |||||||||
Other Securities | 1.0 | 207,444,950 | ||||||||||
2.2 | 451,768,475 | |||||||||||
Food, Beverage & Tobacco 5.2% | ||||||||||||
Altria Group, Inc. | 2,209,791 | 0.5 | 106,821,297 | |||||||||
PepsiCo, Inc. | 1,685,563 | 0.8 | 162,100,594 | |||||||||
Philip Morris International, Inc. | 1,733,446 | 0.8 | 154,294,028 | |||||||||
The Coca-Cola Co. | 4,371,456 | 0.9 | 183,076,577 | |||||||||
Other Securities | 2.2 | 455,790,790 | ||||||||||
5.2 | 1,062,083,286 | |||||||||||
Health Care Equipment & Services 4.4% | ||||||||||||
UnitedHealth Group, Inc. | 1,086,310 | 0.5 | 103,210,313 | |||||||||
Other Securities | 3.9 | 800,427,010 | ||||||||||
4.4 | 903,637,323 | |||||||||||
Household & Personal Products 2.0% | ||||||||||||
The Procter & Gamble Co. | 3,009,890 | 1.3 | 262,673,100 | |||||||||
Other Securities | 0.7 | 150,686,281 | ||||||||||
2.0 | 413,359,381 | |||||||||||
Insurance 2.7% | ||||||||||||
Other Securities | 2.7 | 557,145,040 | ||||||||||
Materials 3.2% | ||||||||||||
Other Securities | 3.2 | 656,784,271 | ||||||||||
Media 3.4% | ||||||||||||
Comcast Corp., Class A | 2,889,664 | 0.8 | 159,942,902 |
18 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
The Walt Disney Co. | 1,751,583 | 0.8 | 160,059,655 | |||||||||
Other Securities | 1.8 | 377,508,929 | ||||||||||
3.4 | 697,511,486 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.5% | ||||||||||||
AbbVie, Inc. | 1,756,386 | 0.5 | 111,460,256 | |||||||||
Amgen, Inc. | 843,159 | 0.7 | 136,743,527 | |||||||||
Bristol-Myers Squibb Co. | 1,830,464 | 0.5 | 106,514,700 | |||||||||
Celgene Corp. * | 893,826 | 0.5 | 95,719,826 | |||||||||
Gilead Sciences, Inc. * | 1,684,050 | 0.9 | 188,613,600 | |||||||||
Johnson & Johnson | 3,145,925 | 1.7 | 339,067,797 | |||||||||
Merck & Co., Inc. | 3,211,014 | 0.9 | 186,046,151 | |||||||||
Pfizer, Inc. | 7,089,733 | 1.0 | 212,337,503 | |||||||||
Other Securities | 2.8 | 571,053,357 | ||||||||||
9.5 | 1,947,556,717 | |||||||||||
Real Estate 2.3% | ||||||||||||
Other Securities | 2.3 | 474,902,480 | ||||||||||
Retailing 4.1% | ||||||||||||
Amazon.com, Inc. * | 421,980 | 0.6 | 128,898,011 | |||||||||
The Home Depot, Inc. | 1,500,150 | 0.7 | 146,294,628 | |||||||||
Other Securities | 2.8 | 562,482,981 | ||||||||||
4.1 | 837,675,620 | |||||||||||
Semiconductors & Semiconductor Equipment 2.3% | ||||||||||||
Intel Corp. | 5,532,605 | 0.9 | 188,163,896 | |||||||||
Other Securities | 1.4 | 285,990,121 | ||||||||||
2.3 | 474,154,017 | |||||||||||
Software & Services 10.1% | ||||||||||||
Facebook, Inc., Class A * | 2,316,800 | 0.8 | 173,736,832 | |||||||||
Google, Inc., Class A * | 315,912 | 0.9 | 179,396,947 | |||||||||
Google, Inc., Class C * | 316,358 | 0.9 | 176,869,431 | |||||||||
International Business Machines Corp. | 1,030,390 | 0.8 | 169,396,116 | |||||||||
Microsoft Corp. | 9,167,131 | 2.1 | 430,396,800 | |||||||||
Oracle Corp. | 3,617,586 | 0.7 | 141,266,733 | |||||||||
Visa, Inc., Class A | 547,300 | 0.6 | 132,134,639 | |||||||||
Other Securities | 3.3 | 667,530,550 | ||||||||||
10.1 | 2,070,728,048 | |||||||||||
Technology Hardware & Equipment 6.7% | ||||||||||||
Apple, Inc. | 6,660,715 | 3.5 | 719,357,220 | |||||||||
Cisco Systems, Inc. | 5,684,928 | 0.7 | 139,110,188 | |||||||||
QUALCOMM, Inc. | 1,862,365 | 0.7 | 146,214,276 | |||||||||
Other Securities | 1.8 | 352,938,585 | ||||||||||
6.7 | 1,357,620,269 | |||||||||||
Telecommunication Services 2.3% | ||||||||||||
AT&T, Inc. | 5,763,736 | 1.0 | 200,808,562 | |||||||||
Verizon Communications, Inc. | 4,601,178 | 1.1 | 231,209,194 | |||||||||
Other Securities | 0.2 | 41,081,884 | ||||||||||
2.3 | 473,099,640 | |||||||||||
Transportation 2.1% | ||||||||||||
Union Pacific Corp. | 1,000,550 | 0.6 | 116,514,048 | |||||||||
Other Securities | 1.5 | 313,981,396 | ||||||||||
2.1 | 430,495,444 | |||||||||||
Utilities 3.1% | ||||||||||||
Other Securities | 3.1 | 630,253,091 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $11,021,049,498) | 19,950,703,019 | |||||||||||
Other Investment Company 0.1% of net assets | ||||||||||||
Securities Lending Collateral 0.1% | ||||||||||||
Other Securities | 0.1 | 29,007,003 | ||||||||||
Total Other Investment Company | ||||||||||||
(Cost $29,007,003) | 29,007,003 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 2.3% of net assets | ||||||||||||
Time Deposits 2.2% | ||||||||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||||||
0.03%, 11/03/14 | 202,290,854 | 1.0 | 202,290,854 | |||||||||
Wells Fargo | ||||||||||||
0.03%, 11/03/14 | 202,290,854 | 1.0 | 202,290,854 | |||||||||
Other Securities | 0.2 | 52,943,644 | ||||||||||
2.2 | 457,525,352 | |||||||||||
U.S. Treasury Obligations 0.1% | ||||||||||||
Other Securities | 0.1 | 22,399,662 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $479,925,014) | 479,925,014 | |||||||||||
End of Investments. |
At 10/31/14, tax basis cost of the fund’s investments was $11,566,619,637 and the unrealized appreciation and depreciation were $9,323,536,713 and ($430,521,314), respectively, with a net unrealized appreciation of $8,893,015,399.
For the following notes, please refer to the complete schedule of portfolio 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 $28,501,109. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
See financial notes 19
Table of Contents
Schwab S&P 500 Index Fund
Condensed Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 4,900 | 492,793,000 | 12,366,475 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $19,950,703,019 | $— | $— | $19,950,703,019 | ||||||||||||
Other Investment Company1 | 29,007,003 | — | — | 29,007,003 | ||||||||||||
Short-Term Investments1 | — | 479,925,014 | — | 479,925,014 | ||||||||||||
Total | $19,979,710,022 | $479,925,014 | $— | $20,459,635,036 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $12,366,475 | $— | $— | $12,366,475 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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, 2014.
20 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated issuers, at value (cost $17,491,210) | $37,344,997 | |||||
Investments in unaffiliated issuers, at value (cost $11,483,483,302) including securities on loan of $28,501,109 | 20,393,283,036 | |||||
Collateral invested for securities on loan, at value (cost $29,007,003) | + | 29,007,003 | ||||
Total investments, at value (cost $11,529,981,515) | 20,459,635,036 | |||||
Cash | 420 | |||||
Receivables: | ||||||
Fund shares sold | 39,122,079 | |||||
Dividends | 19,770,128 | |||||
Variation margin on futures contracts | 5,472,559 | |||||
Income from securities on loan | 42,153 | |||||
Foreign tax reclaims | 18,342 | |||||
Interest | 381 | |||||
Prepaid expenses | + | 286,882 | ||||
Total assets | 20,524,347,980 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 29,007,003 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 129,336 | |||||
Shareholder service fees | 52,284 | |||||
Fund shares redeemed | 21,542,799 | |||||
Accrued expenses | + | 327,198 | ||||
Total liabilities | 51,058,620 | |||||
Net Assets | ||||||
Total assets | 20,524,347,980 | |||||
Total liabilities | − | 51,058,620 | ||||
Net assets | $20,473,289,360 | |||||
Net Assets by Source | ||||||
Capital received from investors | 11,478,444,634 | |||||
Net investment income not yet distributed | 289,403,265 | |||||
Net realized capital losses | (236,578,535 | ) | ||||
Net unrealized capital appreciation | 8,942,019,996 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$20,473,289,360 | 640,075,169 | $31.99 |
See financial notes 21
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated issuer | $299,995 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $32,849) | 372,214,336 | |||||
Interest | 145,801 | |||||
Securities on loan | + | 334,711 | ||||
Total investment income | 372,994,843 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 11,278,737 | |||||
Shareholder service fees | 3,610,136 | |||||
Transfer agent fees | 431,882 | |||||
Portfolio accounting fees | 414,790 | |||||
Shareholder reports | 375,769 | |||||
Custodian fees | 326,780 | |||||
Registration fees | 227,683 | |||||
Independent trustees’ fees | 95,216 | |||||
Professional fees | 87,259 | |||||
Index fee | 74,795 | |||||
Other expenses | + | 337,107 | ||||
Total expenses | 17,260,154 | |||||
Expense reduction by CSIM and its affiliates | − | 470,374 | ||||
Net expenses | − | 16,789,780 | ||||
Net investment income | 356,205,063 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on unaffiliated investments | 12,750,651 | |||||
Net realized gains on futures contracts | + | 80,559,459 | ||||
Net realized gains | 93,310,110 | |||||
Net change in unrealized appreciation (depreciation) on affiliated issuer | 7,458,238 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated investments | 2,516,412,581 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | 1,415,372 | ||||
Net change in unrealized appreciation (depreciation) | + | 2,525,286,191 | ||||
Net realized and unrealized gains | 2,618,596,301 | |||||
Increase in net assets resulting from operations | $2,974,801,364 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $356,205,063 | $311,029,585 | ||||||||
Net realized gains | 93,310,110 | 53,530,089 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 2,525,286,191 | 3,166,704,651 | |||||||
Increase in net assets from operations | 2,974,801,364 | 3,531,264,325 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($297,103,536 | ) | ($278,278,089 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 139,516,160 | $4,137,951,788 | 155,380,507 | $3,830,088,605 | ||||||||||||||
Shares reinvested | 9,293,269 | 257,330,630 | 11,251,940 | 248,330,312 | ||||||||||||||
Shares redeemed | + | (125,148,250 | ) | (3,720,729,510 | ) | (117,760,806 | ) | (2,897,316,141 | ) | |||||||||
Net transactions in fund shares | 23,661,179 | $674,552,908 | 48,871,641 | $1,181,102,776 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 616,413,990 | $17,121,038,624 | 567,542,349 | $12,686,949,612 | ||||||||||||||
Total increase | + | 23,661,179 | 3,352,250,736 | 48,871,641 | 4,434,089,012 | |||||||||||||
End of period | 640,075,169 | $20,473,289,360 | 616,413,990 | $17,121,038,624 | ||||||||||||||
Net investment income not yet distributed | $289,403,265 | $231,017,629 |
See financial notes 23
Table of Contents
Schwab 1000 Index® Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 48.31 | 40.23 | 37.44 | 35.79 | 31.00 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss)1 | 0.83 | 0.81 | 0.71 | 0.62 | 0.57 | |||||||||||||||||
Net realized and unrealized gains (losses) | 6.74 | 9.74 | 4.32 | 2.07 | 4.80 | |||||||||||||||||
Total from investment operations | 7.57 | 10.55 | 5.03 | 2.69 | 5.37 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.75 | ) | (0.81 | ) | (0.72 | ) | (0.57 | ) | (0.58 | ) | ||||||||||||
Distributions from net realized gains | (1.50 | ) | (1.66 | ) | (1.52 | ) | (0.47 | ) | — | |||||||||||||
Total distributions | (2.25 | ) | (2.47 | ) | (2.24 | ) | (1.04 | ) | (0.58 | ) | ||||||||||||
Net asset value at end of period | 53.63 | 48.31 | 40.23 | 37.44 | 35.79 | |||||||||||||||||
Total return (%) | 16.36 | 27.85 | 14.38 | 7.60 | 17.51 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.29 | 0.29 | 0.29 | 0.29 | 0.29 | |||||||||||||||||
Gross operating expenses | 0.33 | 0.34 | 0.34 | 0.34 | 0.35 | |||||||||||||||||
Net investment income (loss) | 1.64 | 1.87 | 1.85 | 1.64 | 1.71 | |||||||||||||||||
Portfolio turnover rate | 4 | 4 | 4 | 5 | 5 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 6,586 | 5,887 | 4,848 | 4,552 | 4,575 |
1 Calculated based on the average shares outstanding during the period.
24 See financial notes
Table of Contents
Schwab 1000 Index Fund
Condensed Portfolio Holdings as of October 31, 2014
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 | ($) | ($) | ||||||||||
99 | .2% | Common Stock | 2,005,520,919 | 6,533,533,558 | ||||||||
1 | .2% | Other Investment Companies | 78,068,474 | 78,068,474 | ||||||||
0 | .0% | Short-Term Investment | 2,629,957 | 2,629,957 | ||||||||
100 | .4% | Total Investments | 2,086,219,350 | 6,614,231,989 | ||||||||
(0 | .4%) | Other Assets and Liabilities, Net | (27,864,447 | ) | ||||||||
100 | .0% | Net Assets | 6,586,367,542 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.2% of net assets | ||||||||||||
Automobiles & Components 1.2% | ||||||||||||
Other Securities | 1.2 | 79,185,766 | ||||||||||
Banks 5.6% | ||||||||||||
Bank of America Corp. | 3,346,841 | 0.9 | 57,431,791 | |||||||||
Citigroup, Inc. | 975,256 | 0.8 | 52,205,454 | |||||||||
JPMorgan Chase & Co. | 1,198,778 | 1.1 | 72,502,093 | |||||||||
Wells Fargo & Co. | 1,514,096 | 1.2 | 80,383,357 | |||||||||
Other Securities | 1.6 | 107,772,126 | ||||||||||
5.6 | 370,294,821 | |||||||||||
Capital Goods 7.9% | ||||||||||||
3M Co. | 206,554 | 0.5 | 31,761,809 | |||||||||
General Electric Co. | 3,190,202 | 1.3 | 82,339,114 | |||||||||
The Boeing Co. | 213,289 | 0.4 | 26,641,929 | |||||||||
United Technologies Corp. | 270,303 | 0.4 | 28,922,421 | |||||||||
Other Securities | 5.3 | 347,263,002 | ||||||||||
7.9 | 516,928,275 | |||||||||||
Commercial & Professional Supplies 0.8% | ||||||||||||
Other Securities | 0.8 | 52,976,248 | ||||||||||
Consumer Durables & Apparel 1.4% | ||||||||||||
Other Securities | 1.4 | 94,606,614 | ||||||||||
Consumer Services 1.9% | ||||||||||||
McDonald’s Corp. | 318,736 | 0.5 | 29,875,125 | |||||||||
Other Securities | 1.4 | 94,331,696 | ||||||||||
1.9 | 124,206,821 | |||||||||||
Diversified Financials 4.8% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 581,012 | 1.2 | 81,434,642 | |||||||||
The Charles Schwab Corp. (a) | 367,065 | 0.2 | 10,523,753 | |||||||||
Other Securities | 3.4 | 224,396,300 | ||||||||||
4.8 | 316,354,695 | |||||||||||
Energy 8.7% | ||||||||||||
Chevron Corp. | 606,937 | 1.1 | 72,802,093 | |||||||||
ConocoPhillips | 390,966 | 0.4 | 28,208,197 | |||||||||
Exxon Mobil Corp. | 1,359,263 | 2.0 | 131,454,325 | |||||||||
Schlumberger Ltd. | 411,647 | 0.6 | 40,613,093 | |||||||||
Other Securities | 4.6 | 302,172,326 | ||||||||||
8.7 | 575,250,034 | |||||||||||
Food & Staples Retailing 2.0% | ||||||||||||
CVS Health Corp. | 372,611 | 0.5 | 31,973,750 | |||||||||
Wal-Mart Stores, Inc. | 503,227 | 0.6 | 38,381,123 | |||||||||
Other Securities | 0.9 | 62,472,929 | ||||||||||
2.0 | 132,827,802 | |||||||||||
Food, Beverage & Tobacco 4.8% | ||||||||||||
Altria Group, Inc. | 635,805 | 0.4 | 30,734,814 | |||||||||
PepsiCo, Inc. | 480,985 | 0.7 | 46,256,327 | |||||||||
Philip Morris International, Inc. | 494,265 | 0.7 | 43,994,528 | |||||||||
The Coca-Cola Co. | 1,258,148 | 0.8 | 52,691,238 | |||||||||
Other Securities | 2.2 | 143,291,320 | ||||||||||
4.8 | 316,968,227 | |||||||||||
Health Care Equipment & Services 4.6% | ||||||||||||
UnitedHealth Group, Inc. | 309,692 | 0.5 | 29,423,837 | |||||||||
Other Securities | 4.1 | 270,695,776 | ||||||||||
4.6 | 300,119,613 | |||||||||||
Household & Personal Products 1.9% | ||||||||||||
The Procter & Gamble Co. | 861,119 | 1.1 | 75,149,855 | |||||||||
Other Securities | 0.8 | 52,112,984 | ||||||||||
1.9 | 127,262,839 | |||||||||||
Insurance 3.0% | ||||||||||||
Other Securities | 3.0 | 199,849,670 | ||||||||||
Materials 3.5% | ||||||||||||
Other Securities | 3.5 | 231,219,343 | ||||||||||
Media 3.6% | ||||||||||||
Comcast Corp., Class A | 827,123 | 0.7 | 45,781,258 |
See financial notes 25
Table of Contents
Schwab 1000 Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
The Walt Disney Co. | 503,360 | 0.7 | 45,997,037 | |||||||||
Other Securities | 2.2 | 142,063,034 | ||||||||||
3.6 | 233,841,329 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.3% | ||||||||||||
AbbVie, Inc. | 508,646 | 0.5 | 32,278,675 | |||||||||
Amgen, Inc. | 240,902 | 0.6 | 39,069,486 | |||||||||
Bristol-Myers Squibb Co. | 526,739 | 0.5 | 30,650,942 | |||||||||
Celgene Corp. * | 253,040 | 0.4 | 27,098,054 | |||||||||
Gilead Sciences, Inc. * | 481,844 | 0.8 | 53,966,528 | |||||||||
Johnson & Johnson | 901,987 | 1.5 | 97,216,159 | |||||||||
Merck & Co., Inc. | 924,818 | 0.8 | 53,583,955 | |||||||||
Pfizer, Inc. | 2,031,951 | 0.9 | 60,856,932 | |||||||||
Other Securities | 3.3 | 217,366,388 | ||||||||||
9.3 | 612,087,119 | |||||||||||
Real Estate 3.3% | ||||||||||||
Other Securities | 3.3 | 217,752,838 | ||||||||||
Retailing 4.1% | ||||||||||||
Amazon.com, Inc. * | 120,741 | 0.6 | 36,881,546 | |||||||||
The Home Depot, Inc. | 428,935 | 0.6 | 41,829,741 | |||||||||
Other Securities | 2.9 | 192,669,942 | ||||||||||
4.1 | 271,381,229 | |||||||||||
Semiconductors & Semiconductor Equipment 2.3% | ||||||||||||
Intel Corp. | 1,577,980 | 0.8 | 53,667,100 | |||||||||
Other Securities | 1.5 | 97,313,046 | ||||||||||
2.3 | 150,980,146 | |||||||||||
Software & Services 10.4% | ||||||||||||
Facebook, Inc., Class A * | 664,600 | 0.7 | 49,838,354 | |||||||||
Google, Inc., Class A * | 90,388 | 0.8 | 51,328,634 | |||||||||
Google, Inc., Class C * | 90,388 | 0.8 | 50,534,123 | |||||||||
International Business Machines Corp. | 295,740 | 0.7 | 48,619,656 | |||||||||
Microsoft Corp. | 2,626,238 | 1.9 | 123,301,874 | |||||||||
Oracle Corp. | 1,036,510 | 0.6 | 40,475,715 | |||||||||
Visa, Inc., Class A | 156,900 | 0.6 | 37,880,367 | |||||||||
Other Securities | 4.3 | 281,590,620 | ||||||||||
10.4 | 683,569,343 | |||||||||||
Technology Hardware & Equipment 6.3% | ||||||||||||
Apple, Inc. | 1,908,474 | 3.1 | 206,115,192 | |||||||||
Cisco Systems, Inc. | 1,626,315 | 0.6 | 39,795,928 | |||||||||
QUALCOMM, Inc. | 534,178 | 0.7 | 41,938,315 | |||||||||
Other Securities | 1.9 | 124,874,266 | ||||||||||
6.3 | 412,723,701 | |||||||||||
Telecommunication Services 2.3% | ||||||||||||
AT&T, Inc. | 1,651,077 | 0.9 | 57,523,523 | |||||||||
Verizon Communications, Inc. | 1,324,157 | 1.0 | 66,538,889 | |||||||||
Other Securities | 0.4 | 24,875,175 | ||||||||||
2.3 | 148,937,587 | |||||||||||
Transportation 2.4% | ||||||||||||
Union Pacific Corp. | 285,924 | 0.5 | 33,295,850 | |||||||||
Other Securities | 1.9 | 124,566,564 | ||||||||||
2.4 | 157,862,414 | |||||||||||
Utilities 3.1% | ||||||||||||
Other Securities | 3.1 | 206,347,084 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $2,005,520,919) | 6,533,533,558 | |||||||||||
Other Investment Companies 1.2% of net assets | ||||||||||||
Money Market Fund 0.7% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (e) | 44,874,058 | 0.7 | 44,874,058 | |||||||||
Securities Lending Collateral 0.5% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (e) | 33,194,416 | 0.5 | 33,194,416 | |||||||||
Total Other Investment Companies | ||||||||||||
(Cost $78,068,474) | 78,068,474 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.0% of net assets | ||||||||||||
U.S. Treasury Obligation 0.0% | ||||||||||||
Other Securities | 0.0 | 2,629,957 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $2,629,957) | 2,629,957 | |||||||||||
End of Investments. |
At 10/31/14, tax basis cost of the fund’s investments was $2,063,162,830 and the unrealized appreciation and depreciation were $4,587,737,414 and ($36,668,255), respectively, with a net unrealized appreciation of $4,551,069,159.
For the following notes, please refer to the complete schedule of portfolio 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 $33,735,231. Non-Cash Collateral pledged to the fund for securities on loan amounted to $1,049,914. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
26 See financial notes
Table of Contents
Schwab 1000 Index Fund
Condensed Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 460 | 46,262,200 | 800,851 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $6,533,533,558 | $— | $— | $6,533,533,558 | ||||||||||||
Other Investment Companies1 | 78,068,474 | — | — | 78,068,474 | ||||||||||||
Short-Term Investment1 | — | 2,629,957 | — | 2,629,957 | ||||||||||||
Total | $6,611,602,032 | $2,629,957 | $— | $6,614,231,989 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $800,851 | $— | $— | $800,851 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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, 2014.
See financial notes 27
Table of Contents
Schwab 1000 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated issuers, at value (cost $1,803,228) | $10,523,753 | |||||
Investments in unaffiliated issuers, at value (cost $2,051,221,706) including securities on loan of $33,735,231 | 6,570,513,820 | |||||
Collateral invested for securities on loan, at value (cost $33,194,416) | + | 33,194,416 | ||||
Total investments, at value (cost $2,086,219,350) | 6,614,231,989 | |||||
Receivables: | ||||||
Investments sold | 222,759 | |||||
Dividends | 6,115,533 | |||||
Fund shares sold | 2,912,015 | |||||
Variation margin on futures contracts | 524,400 | |||||
Income from securities on loan | 75,470 | |||||
Foreign tax reclaims | 4,914 | |||||
Prepaid expenses | + | 126,415 | ||||
Total assets | 6,624,213,495 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 33,194,416 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 127,028 | |||||
Shareholder service fees | 72,230 | |||||
Fund shares redeemed | 4,330,239 | |||||
Accrued expenses | + | 122,040 | ||||
Total liabilities | 37,845,953 | |||||
Net Assets | ||||||
Total assets | 6,624,213,495 | |||||
Total liabilities | − | 37,845,953 | ||||
Net assets | $6,586,367,542 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,776,200,659 | |||||
Net investment income not yet distributed | 82,633,843 | |||||
Net realized capital gains | 198,719,550 | |||||
Net unrealized capital appreciation | 4,528,813,490 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$6,586,367,542 | 122,814,922 | $53.63 |
28 See financial notes
Table of Contents
Schwab 1000 Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated issuer | $88,096 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $15,425) | 119,708,654 | |||||
Interest | 814 | |||||
Securities on loan | + | 725,483 | ||||
Total investment income | 120,523,047 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 13,862,067 | |||||
Shareholder service fees | 6,033,432 | |||||
Shareholder reports | 180,488 | |||||
Portfolio accounting fees | 170,975 | |||||
Custodian fees | 111,815 | |||||
Transfer agent fees | 94,746 | |||||
Registration fees | 71,614 | |||||
Professional fees | 60,218 | |||||
Independent trustees’ fees | 50,872 | |||||
Interest expense | 183 | |||||
Other expenses | + | 116,777 | ||||
Total expenses | 20,753,187 | |||||
Expense reduction by CSIM and its affiliates | − | 2,683,006 | ||||
Net expenses | − | 18,070,181 | ||||
Net investment income | 102,452,866 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on unaffiliated investments | 169,698,983 | |||||
Net realized gains on futures contracts | + | 8,242,453 | ||||
Net realized gains | 177,941,436 | |||||
Net change in unrealized appreciation (depreciation) on affiliated issuer | 2,209,731 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated investments | 660,220,261 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | (1,508,612 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 660,921,380 | ||||
Net realized and unrealized gains | 838,862,816 | |||||
Increase in net assets resulting from operations | $941,315,682 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $102,452,866 | $99,492,905 | ||||||||
Net realized gains | 177,941,436 | 178,811,471 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 660,921,380 | 1,026,638,598 | |||||||
Increase in net assets from operations | 941,315,682 | 1,304,942,974 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (91,043,881 | ) | (96,597,152 | ) | ||||||
Distributions from net realized gains | + | (182,379,726 | ) | (197,828,775 | ) | |||||
Total distributions | ($273,423,607 | ) | ($294,425,927 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,474,992 | $424,679,163 | 9,372,908 | $400,294,068 | ||||||||||||||
Shares reinvested | 5,073,441 | 236,878,978 | 6,695,843 | 255,781,218 | ||||||||||||||
Shares redeemed | + | (12,594,623 | ) | (630,314,274 | ) | (14,700,117 | ) | (627,358,330 | ) | |||||||||
Net transactions in fund shares | 953,810 | $31,243,867 | 1,368,634 | $28,716,956 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 121,861,112 | $5,887,231,600 | 120,492,478 | $4,847,997,597 | ||||||||||||||
Total increase | + | 953,810 | 699,135,942 | 1,368,634 | 1,039,234,003 | |||||||||||||
End of period | 122,814,922 | $6,586,367,542 | 121,861,112 | $5,887,231,600 | ||||||||||||||
Net investment income not yet distributed | $82,633,843 | $71,285,685 |
30 See financial notes
Table of Contents
Schwab Small-Cap Index Fund®
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 27.62 | 21.26 | 20.55 | 19.18 | 15.14 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss)1 | 0.35 | 0.42 | 0.33 | 0.25 | 0.22 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.76 | 6.94 | 1.89 | 1.37 | 3.97 | |||||||||||||||||
Total from investment operations | 2.11 | 7.36 | 2.22 | 1.62 | 4.19 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.31 | ) | (0.50 | ) | (0.35 | ) | (0.20 | ) | (0.15 | ) | ||||||||||||
Distributions from net realized gains | (1.29 | ) | (0.50 | ) | (1.16 | ) | (0.05 | ) | — | |||||||||||||
Total distributions | (1.60 | ) | (1.00 | ) | (1.51 | ) | (0.25 | ) | (0.15 | ) | ||||||||||||
Net asset value at end of period | 28.13 | 27.62 | 21.26 | 20.55 | 19.18 | |||||||||||||||||
Total return (%) | 8.08 | 36.23 | 11.87 | 8.45 | 27.85 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.17 | 0.17 | 0.17 | 0.19 | 0.19 | |||||||||||||||||
Gross operating expenses | 0.21 | 0.20 | 0.21 | 0.19 | 0.20 | |||||||||||||||||
Net investment income (loss) | 1.27 | 1.76 | 1.63 | 1.18 | 1.23 | |||||||||||||||||
Portfolio turnover rate | 12 | 11 | 41 | 2 | 26 | 33 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,567 | 2,351 | 1,675 | 1,502 | 1,406 |
1 Calculated based on the average shares outstanding during the period.
2 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
Condensed Portfolio Holdings as of October 31, 2014
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 | ($) | ($) | ||||||||||
99 | .9% | Common Stock | 1,808,542,039 | 2,564,440,457 | ||||||||
0 | .0% | Rights | 320,914 | 320,914 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
5 | .1% | Other Investment Company | 130,686,609 | 130,686,609 | ||||||||
0 | .5% | Short-Term Investments | 13,560,292 | 13,560,292 | ||||||||
105 | .5% | Total Investments | 1,953,109,854 | 2,709,008,272 | ||||||||
(5 | .5%) | Other Assets and Liabilities, Net | (142,203,233 | ) | ||||||||
100 | .0% | Net Assets | 2,566,805,039 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.9% of net assets | ||||||||||||
Automobiles & Components 1.2% | ||||||||||||
Dana Holding Corp. | 251,200 | 0.2 | 5,139,552 | |||||||||
Other Securities | 1.0 | 24,789,854 | ||||||||||
1.2 | 29,929,406 | |||||||||||
Banks 9.6% | ||||||||||||
Investors Bancorp, Inc. | 537,604 | 0.2 | 5,779,243 | |||||||||
Prosperity Bancshares, Inc. | 105,600 | 0.3 | 6,377,184 | |||||||||
Radian Group, Inc. | 286,004 | 0.2 | 4,819,167 | |||||||||
Other Securities | 8.9 | 228,610,997 | ||||||||||
9.6 | 245,586,591 | |||||||||||
Capital Goods 8.5% | ||||||||||||
CLARCOR, Inc. | 74,600 | 0.2 | 4,995,216 | |||||||||
Curtiss-Wright Corp. | 71,982 | 0.2 | 4,981,874 | |||||||||
Esterline Technologies Corp. * | 47,000 | 0.2 | 5,504,170 | |||||||||
HEICO Corp. | 102,306 | 0.2 | 5,549,077 | |||||||||
Moog, Inc., Class A * | 67,700 | 0.2 | 5,181,758 | |||||||||
Teledyne Technologies, Inc. * | 55,571 | 0.2 | 5,758,823 | |||||||||
Woodward, Inc. | 100,500 | 0.2 | 5,146,605 | |||||||||
Other Securities | 7.1 | 182,099,756 | ||||||||||
8.5 | 219,217,279 | |||||||||||
Commercial & Professional Supplies 3.6% | ||||||||||||
Other Securities | 3.6 | 93,747,008 | ||||||||||
Consumer Durables & Apparel 2.6% | ||||||||||||
Brunswick Corp. | 136,700 | 0.3 | 6,397,560 | |||||||||
Other Securities | 2.3 | 59,923,721 | ||||||||||
2.6 | 66,321,281 | |||||||||||
Consumer Services 4.0% | ||||||||||||
Other Securities | 4.0 | 103,171,036 | ||||||||||
Diversified Financials 2.6% | ||||||||||||
PRA Group, Inc. * | 76,129 | 0.2 | 4,815,159 | |||||||||
Other Securities | 2.4 | 61,594,561 | ||||||||||
2.6 | 66,409,720 | |||||||||||
Energy 4.6% | ||||||||||||
SemGroup Corp., Class A | 62,965 | 0.2 | 4,832,564 | |||||||||
Other Securities | 4.4 | 113,784,925 | ||||||||||
4.6 | 118,617,489 | |||||||||||
Food & Staples Retailing 1.0% | ||||||||||||
United Natural Foods, Inc. * | 72,982 | 0.2 | 4,964,236 | |||||||||
Other Securities | 0.8 | 19,779,898 | ||||||||||
1.0 | 24,744,134 | |||||||||||
Food, Beverage & Tobacco 1.8% | ||||||||||||
TreeHouse Foods, Inc. * | 62,152 | 0.2 | 5,293,486 | |||||||||
Other Securities | 1.6 | 41,858,353 | ||||||||||
1.8 | 47,151,839 | |||||||||||
Health Care Equipment & Services 6.5% | ||||||||||||
DexCom, Inc. * | 114,200 | 0.2 | 5,133,290 | |||||||||
HealthSouth Corp. | 129,800 | 0.2 | 5,234,834 | |||||||||
STERIS Corp. | 88,188 | 0.2 | 5,450,018 | |||||||||
Team Health Holdings, Inc. * | 104,367 | 0.3 | 6,527,112 | |||||||||
West Pharmaceutical Services, Inc. | 108,630 | 0.2 | 5,567,287 | |||||||||
Other Securities | 5.4 | 137,914,324 | ||||||||||
6.5 | 165,826,865 | |||||||||||
Household & Personal Products 0.4% | ||||||||||||
Other Securities | 0.4 | 9,267,707 | ||||||||||
Insurance 2.6% | ||||||||||||
CNO Financial Group, Inc. | 333,600 | 0.2 | 6,048,168 | |||||||||
First American Financial Corp. | 160,900 | 0.2 | 4,878,488 | |||||||||
Other Securities | 2.2 | 56,628,966 | ||||||||||
2.6 | 67,555,622 | |||||||||||
Materials 4.8% | ||||||||||||
Graphic Packaging Holding Co. * | 489,715 | 0.2 | 5,940,243 | |||||||||
PolyOne Corp. | 144,754 | 0.2 | 5,357,346 |
32 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 4.4 | 111,368,932 | ||||||||||
4.8 | 122,666,521 | |||||||||||
Media 1.4% | ||||||||||||
Other Securities | 1.4 | 34,786,758 | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.5% | ||||||||||||
Cepheid * | 102,700 | 0.2 | 5,444,127 | |||||||||
Isis Pharmaceuticals, Inc. * | 177,200 | 0.3 | 8,161,832 | |||||||||
Pacira Pharmaceuticals, Inc. * | 53,800 | 0.2 | 4,993,716 | |||||||||
Puma Biotechnology, Inc. * | 34,800 | 0.4 | 8,720,880 | |||||||||
Other Securities | 6.4 | 164,978,477 | ||||||||||
7.5 | 192,299,032 | |||||||||||
Real Estate 9.5% | ||||||||||||
CubeSmart | 240,643 | 0.2 | 5,065,535 | |||||||||
Highwoods Properties, Inc. | 133,507 | 0.2 | 5,723,445 | |||||||||
LaSalle Hotel Properties | 159,626 | 0.2 | 6,258,935 | |||||||||
RLJ Lodging Trust | 195,282 | 0.3 | 6,291,986 | |||||||||
Strategic Hotels & Resorts, Inc. * | 382,700 | 0.2 | 4,917,695 | |||||||||
Other Securities | 8.4 | 215,108,170 | ||||||||||
9.5 | 243,365,766 | |||||||||||
Retailing 4.0% | ||||||||||||
Other Securities | 4.0 | 102,539,172 | ||||||||||
Semiconductors & Semiconductor Equipment 3.6% | ||||||||||||
RF Micro Devices, Inc. * | 423,000 | 0.2 | 5,503,230 | |||||||||
TriQuint Semiconductor, Inc. * | 253,400 | 0.2 | 5,481,042 | |||||||||
Other Securities | 3.2 | 81,580,302 | ||||||||||
3.6 | 92,564,574 | |||||||||||
Software & Services 9.4% | ||||||||||||
Aspen Technology, Inc. * | 139,600 | 0.2 | 5,155,428 | |||||||||
Guidewire Software, Inc. * | 104,300 | 0.2 | 5,208,742 | |||||||||
MAXIMUS, Inc. | 101,496 | 0.2 | 4,918,496 | |||||||||
SS&C Technologies Holdings, Inc. * | 104,600 | 0.2 | 5,054,272 | |||||||||
The Ultimate Software Group, Inc. * | 43,100 | 0.2 | 6,486,981 | |||||||||
Tyler Technologies, Inc. * | 49,100 | 0.2 | 5,495,272 | |||||||||
Verint Systems, Inc. * | 88,372 | 0.2 | 5,080,506 | |||||||||
WEX, Inc. * | 58,476 | 0.3 | 6,640,534 | |||||||||
Other Securities | 7.7 | 197,702,866 | ||||||||||
9.4 | 241,743,097 | |||||||||||
Technology Hardware & Equipment 4.7% | ||||||||||||
Cognex Corp. * | 131,818 | 0.2 | 5,214,720 | |||||||||
FEI Co. | 63,900 | 0.2 | 5,385,492 | |||||||||
Other Securities | 4.3 | 111,281,680 | ||||||||||
4.7 | 121,881,892 | |||||||||||
Telecommunication Services 0.7% | ||||||||||||
Other Securities | 0.7 | 19,204,423 | ||||||||||
Transportation 1.8% | ||||||||||||
Other Securities | 1.8 | 46,283,560 | ||||||||||
Utilities 3.5% | ||||||||||||
Cleco Corp. | 90,700 | 0.2 | 4,876,032 | |||||||||
Dynegy, Inc. * | 183,200 | 0.2 | 5,587,600 | |||||||||
Other Securities | 3.1 | 79,096,053 | ||||||||||
3.5 | 89,559,685 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $1,808,542,039) | 2,564,440,457 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Automobiles & Components 0.0% | ||||||||||||
Other Securities | 0.0 | 107,470 | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Telecommunication Services 0.0% | ||||||||||||
Other Securities | 0.0 | 213,444 | ||||||||||
Total Rights | ||||||||||||
(Cost $320,914) | 320,914 | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Energy 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | — | |||||||||||
Other Investment Company 5.1% of net assets | ||||||||||||
Securities Lending Collateral 5.1% | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 130,686,609 | 5.1 | 130,686,609 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $130,686,609) | 130,686,609 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 0.5% of net assets | ||||||||||||
Time Deposit 0.4% | ||||||||||||
DNB | ||||||||||||
0.03%, 11/03/14 | 11,660,323 | 0.4 | 11,660,323 |
See financial notes 33
Table of Contents
Schwab Small-Cap Index Fund
Condensed Portfolio Holdings continued
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
U.S. Treasury Obligations 0.1% | ||||||||||||
Other Securities | 0.1 | 1,899,969 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $13,560,292) | 13,560,292 | |||||||||||
End of Investments. |
At 10/31/14 tax basis cost of the fund’s investments was $1,960,321,155 and the unrealized appreciation and depreciation were $900,108,052 and ($151,420,935), respectively, with a net unrealized appreciation of $748,687,117.
For the following notes, please refer to the complete schedule of portfolio holdings.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $320,914 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $128,436,558. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
CVR — | Contingent Value Rights | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/19/14 | 20 | 2,342,000 | 202,898 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $2,564,440,457 | $— | $— | $2,564,440,457 | ||||||||||||
Rights1 | — | — | 320,914 | 320,914 | ||||||||||||
Warrants1 | — | — | — | — | ||||||||||||
Other Investment Company1 | 130,686,609 | — | — | 130,686,609 | ||||||||||||
Short-Term Investments1 | — | 13,560,292 | — | 13,560,292 | ||||||||||||
Total | $2,695,127,066 | $13,560,292 | $320,914 | $2,709,008,272 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $202,898 | $— | $— | $202,898 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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 | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Rights | $— | $— | $— | $320,914 | $— | $— | $— | $320,914 | ||||||||||||||||||||||||
Total | $— | $— | $— | $320,914 | $— | $— | $— | $320,914 | ||||||||||||||||||||||||
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, 2014.
34 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $1,822,423,245) including securities on loan of $128,436,558 | $2,578,321,663 | |||||
Collateral invested for securities on loan, at value (cost $130,686,609) | + | 130,686,609 | ||||
Total investments, at value (cost $1,953,109,854) | 2,709,008,272 | |||||
Receivables: | ||||||
Fund shares sold | 1,693,089 | |||||
Dividends | 906,831 | |||||
Income from securities on loan | 449,465 | |||||
Variation margin on futures contracts | 198,210 | |||||
Interest | 10 | |||||
Prepaid expenses | + | 43,784 | ||||
Total assets | 2,712,299,661 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 130,686,609 | |||||
Payables: | ||||||
Investments bought | 2,651,214 | |||||
Investment adviser and administrator fees | 30,877 | |||||
Shareholder service fees | 5,896 | |||||
Fund shares redeemed | 11,889,615 | |||||
Accrued expenses | + | 230,411 | ||||
Total liabilities | 145,494,622 | |||||
Net Assets | ||||||
Total assets | 2,712,299,661 | |||||
Total liabilities | − | 145,494,622 | ||||
Net assets | $2,566,805,039 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,654,178,949 | |||||
Net investment income not yet distributed | 22,176,318 | |||||
Net realized capital gains | 134,348,456 | |||||
Net unrealized capital appreciation | 756,101,316 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$2,566,805,039 | 91,231,854 | $28.13 |
See financial notes 35
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $18,199) | $30,980,670 | |||||
Interest | 20,230 | |||||
Securities on loan | + | 5,025,528 | ||||
Total investment income | 36,026,428 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,754,578 | |||||
Shareholder service fees | 485,138 | |||||
Index fee | 324,115 | |||||
Shareholder reports | 155,464 | |||||
Portfolio accounting fees | 114,038 | |||||
Registration fees | 68,585 | |||||
Transfer agent fees | 64,795 | |||||
Custodian fees | 53,141 | |||||
Professional fees | 47,341 | |||||
Independent trustees’ fees | 18,011 | |||||
Other expenses | + | 46,862 | ||||
Total expenses | 5,132,068 | |||||
Expense reduction by CSIM and its affiliates | − | 875,516 | ||||
Net expenses | − | 4,256,552 | ||||
Net investment income | 31,769,876 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 137,599,673 | |||||
Net realized gains on futures contracts | 6,472,968 | |||||
Net realized losses on foreign currency transactions | + | (266 | ) | |||
Net realized gains | 144,072,375 | |||||
Net change in unrealized appreciation (depreciation) on investments | 18,055,018 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | (2,952,563 | ) | ||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (9 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 15,102,446 | ||||
Net realized and unrealized gains | 159,174,821 | |||||
Increase in net assets resulting from operations | $190,944,697 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $31,769,876 | $35,040,608 | ||||||||
Net realized gains | 144,072,375 | 103,525,565 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 15,102,446 | 474,902,335 | |||||||
Increase in net assets from operations | 190,944,697 | 613,468,508 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (26,168,327 | ) | (39,112,389 | ) | ||||||
Distributions from net realized gains | + | (110,361,333 | ) | (39,238,431 | ) | |||||
Total distributions | ($136,529,660 | ) | ($78,350,820 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 19,513,159 | $532,426,174 | 17,519,506 | $419,420,964 | ||||||||||||||
Shares reinvested | 4,820,637 | 125,963,244 | 3,540,194 | 72,432,373 | ||||||||||||||
Shares redeemed | + | (18,247,583 | ) | (497,352,580 | ) | (14,685,439 | ) | (350,359,363 | ) | |||||||||
Net transactions in fund shares | 6,086,213 | $161,036,838 | 6,374,261 | $141,493,974 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 85,145,641 | $2,351,353,164 | 78,771,380 | $1,674,741,502 | ||||||||||||||
Total increase | + | 6,086,213 | 215,451,875 | 6,374,261 | 676,611,662 | |||||||||||||
End of period | 91,231,854 | $2,566,805,039 | 85,145,641 | $2,351,353,164 | ||||||||||||||
Net investment income not yet distributed | $22,176,318 | $17,941,421 |
See financial notes 37
Table of Contents
Schwab Total Stock Market Index Fund®
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 32.53 | 25.80 | 22.92 | 21.57 | 18.50 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.60 | 0.57 | 0.47 | 0.41 | 0.37 | |||||||||||||||||
Net realized and unrealized gains (losses) | 4.49 | 6.70 | 2.83 | 1.33 | 3.02 | |||||||||||||||||
Total from investment operations | 5.09 | 7.27 | 3.30 | 1.74 | 3.39 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.51 | ) | (0.54 | ) | (0.42 | ) | (0.39 | ) | (0.32 | ) | ||||||||||||
Distributions from net realized gains | (0.15 | ) | — | — | — | — | ||||||||||||||||
Total distributions | (0.66 | ) | (0.54 | ) | (0.42 | ) | (0.39 | ) | (0.32 | ) | ||||||||||||
Net asset value at end of period | 36.96 | 32.53 | 25.80 | 22.92 | 21.57 | |||||||||||||||||
Total return (%) | 15.93 | 28.76 | 14.71 | 8.14 | 18.53 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.09 | 0.09 | 0.09 | 0.09 | 0.09 | |||||||||||||||||
Gross operating expenses | 0.10 | 0.10 | 0.10 | 0.11 | 0.11 | |||||||||||||||||
Net investment income (loss) | 1.79 | 2.02 | 2.02 | �� | 1.79 | 1.85 | ||||||||||||||||
Portfolio turnover rate | 1 | 2 | 3 | 1 | 3 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 4,049 | 3,183 | 2,240 | 1,747 | 1,470 |
38 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Condensed Portfolio Holdings as of October 31, 2014
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 | 2,419,182,444 | 3,996,962,109 | ||||||||
0 | .0% | Rights | 32,982 | 32,760 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
0 | .7% | Other Investment Company | 26,162,578 | 26,162,578 | ||||||||
2 | .1% | Short-Term Investments | 86,325,341 | 86,325,341 | ||||||||
101 | .5% | Total Investments | 2,531,703,345 | 4,109,482,788 | ||||||||
(1 | .5%) | Other Assets and Liabilities, Net | (60,247,221 | ) | ||||||||
100 | .0% | Net Assets | 4,049,235,567 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.7% of net assets | ||||||||||||
Automobiles & Components 1.2% | ||||||||||||
Other Securities | 1.2 | 47,727,756 | ||||||||||
Banks 5.9% | ||||||||||||
Bank of America Corp. | 1,883,401 | 0.8 | 32,319,161 | |||||||||
Citigroup, Inc. | 539,889 | 0.7 | 28,900,258 | |||||||||
JPMorgan Chase & Co. | 671,463 | 1.0 | 40,610,082 | |||||||||
Wells Fargo & Co. | 845,813 | 1.1 | 44,904,212 | |||||||||
Other Securities | 2.3 | 92,490,937 | ||||||||||
5.9 | 239,224,650 | |||||||||||
Capital Goods 7.8% | ||||||||||||
3M Co. | 115,357 | 0.4 | 17,738,446 | |||||||||
General Electric Co. | 1,797,112 | 1.2 | 46,383,461 | |||||||||
United Technologies Corp. | 152,628 | 0.4 | 16,331,196 | |||||||||
Other Securities | 5.8 | 233,705,336 | ||||||||||
7.8 | 314,158,439 | |||||||||||
Commercial & Professional Supplies 1.0% | ||||||||||||
Other Securities | 1.0 | 42,139,145 | ||||||||||
Consumer Durables & Apparel 1.6% | ||||||||||||
Other Securities | 1.6 | 62,440,667 | ||||||||||
Consumer Services 2.1% | ||||||||||||
McDonald’s Corp. | 175,440 | 0.4 | 16,443,991 | |||||||||
Other Securities | 1.7 | 68,027,877 | ||||||||||
2.1 | 84,471,868 | |||||||||||
Diversified Financials 4.6% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 324,902 | 1.1 | 45,538,264 | |||||||||
The Charles Schwab Corp. (a) | 211,426 | 0.1 | 6,061,583 | |||||||||
Other Securities | 3.4 | 136,285,691 | ||||||||||
4.6 | 187,885,538 | |||||||||||
Energy 8.4% | ||||||||||||
Chevron Corp. | 339,623 | 1.0 | 40,737,779 | |||||||||
ConocoPhillips | 223,431 | 0.4 | 16,120,547 | |||||||||
Exxon Mobil Corp. | 761,999 | 1.8 | 73,692,923 | |||||||||
Schlumberger Ltd. | 232,003 | 0.6 | 22,889,416 | |||||||||
Other Securities | 4.6 | 185,142,251 | ||||||||||
8.4 | 338,582,916 | |||||||||||
Food & Staples Retailing 1.9% | ||||||||||||
CVS Health Corp. | 205,937 | 0.5 | 17,671,454 | |||||||||
Wal-Mart Stores, Inc. | 282,889 | 0.5 | 21,575,944 | |||||||||
Other Securities | 0.9 | 37,585,921 | ||||||||||
1.9 | 76,833,319 | |||||||||||
Food, Beverage & Tobacco 4.5% | ||||||||||||
Altria Group, Inc. | 356,923 | 0.4 | 17,253,658 | |||||||||
PepsiCo, Inc. | 270,258 | 0.7 | 25,990,712 | |||||||||
Philip Morris International, Inc. | 280,509 | 0.6 | 24,968,106 | |||||||||
The Coca-Cola Co. | 705,514 | 0.7 | 29,546,926 | |||||||||
Other Securities | 2.1 | 85,275,371 | ||||||||||
4.5 | 183,034,773 | |||||||||||
Health Care Equipment & Services 4.7% | ||||||||||||
UnitedHealth Group, Inc. | 172,781 | 0.4 | 16,415,923 | |||||||||
Other Securities | 4.3 | 172,793,029 | ||||||||||
4.7 | 189,208,952 | |||||||||||
Household & Personal Products 1.8% | ||||||||||||
The Procter & Gamble Co. | 482,524 | 1.0 | 42,109,870 | |||||||||
Other Securities | 0.8 | 30,497,227 | ||||||||||
1.8 | 72,607,097 | |||||||||||
Insurance 3.0% | ||||||||||||
Other Securities | 3.0 | 123,151,426 | ||||||||||
Materials 3.6% | ||||||||||||
Other Securities | 3.6 | 146,031,968 | ||||||||||
Media 3.4% | ||||||||||||
Comcast Corp., Class A | 461,960 | 0.6 | 25,569,486 |
See financial notes 39
Table of Contents
Schwab Total Stock Market Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
The Walt Disney Co. | 281,639 | 0.7 | 25,736,172 | |||||||||
Other Securities | 2.1 | 85,407,578 | ||||||||||
3.4 | 136,713,236 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.0% | ||||||||||||
AbbVie, Inc. | 283,230 | 0.5 | 17,973,776 | |||||||||
Amgen, Inc. | 135,489 | 0.5 | 21,973,606 | |||||||||
Bristol-Myers Squibb Co. | 295,053 | 0.4 | 17,169,134 | |||||||||
Celgene Corp. * | 145,262 | 0.4 | 15,556,108 | |||||||||
Gilead Sciences, Inc. * | 271,492 | 0.8 | 30,407,104 | |||||||||
Johnson & Johnson | 504,809 | 1.3 | 54,408,314 | |||||||||
Merck & Co., Inc. | 517,716 | 0.7 | 29,996,465 | |||||||||
Pfizer, Inc. | 1,138,625 | 0.8 | 34,101,819 | |||||||||
Other Securities | 3.6 | 144,521,127 | ||||||||||
9.0 | 366,107,453 | |||||||||||
Real Estate 3.9% | ||||||||||||
Other Securities | 3.9 | 156,779,819 | ||||||||||
Retailing 4.1% | ||||||||||||
Amazon.com, Inc. * | 68,125 | 0.5 | 20,809,462 | |||||||||
The Home Depot, Inc. | 241,663 | 0.6 | 23,566,976 | |||||||||
Other Securities | 3.0 | 123,137,728 | ||||||||||
4.1 | 167,514,166 | |||||||||||
Semiconductors & Semiconductor Equipment 2.4% | ||||||||||||
Intel Corp. | 885,697 | 0.8 | 30,122,555 | |||||||||
Other Securities | 1.6 | 66,346,361 | ||||||||||
2.4 | 96,468,916 | |||||||||||
Software & Services 10.1% | ||||||||||||
Facebook, Inc., Class A * | 372,707 | 0.7 | 27,949,298 | |||||||||
Google, Inc., Class A * | 50,876 | 0.7 | 28,890,954 | |||||||||
Google, Inc., Class C * | 51,176 | 0.7 | 28,611,478 | |||||||||
International Business Machines Corp. | 166,051 | 0.7 | 27,298,784 | |||||||||
Microsoft Corp. | 1,474,318 | 1.7 | 69,219,230 | |||||||||
Oracle Corp. | 583,313 | 0.6 | 22,778,373 | |||||||||
Visa, Inc., Class A | 88,601 | 0.5 | 21,390,940 | |||||||||
Other Securities | 4.5 | 182,771,696 | ||||||||||
10.1 | 408,910,753 | |||||||||||
Technology Hardware & Equipment 6.1% | ||||||||||||
Apple, Inc. | 1,071,762 | 2.9 | 115,750,296 | |||||||||
Cisco Systems, Inc. | 918,640 | 0.5 | 22,479,121 | |||||||||
QUALCOMM, Inc. | 301,639 | 0.6 | 23,681,678 | |||||||||
Other Securities | 2.1 | 86,546,972 | ||||||||||
6.1 | 248,458,067 | |||||||||||
Telecommunication Services 2.1% | ||||||||||||
AT&T, Inc. | 929,055 | 0.8 | 32,368,276 | |||||||||
Verizon Communications, Inc. | 741,369 | 0.9 | 37,253,792 | |||||||||
Other Securities | 0.4 | 16,869,175 | ||||||||||
2.1 | 86,491,243 | |||||||||||
Transportation 2.3% | ||||||||||||
Union Pacific Corp. | 160,070 | 0.4 | 18,640,152 | |||||||||
Other Securities | 1.9 | 75,581,673 | ||||||||||
2.3 | 94,221,825 | |||||||||||
Utilities 3.2% | ||||||||||||
Other Securities | 3.2 | 127,798,117 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $2,419,182,444) | 3,996,962,109 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Technology Hardware & Equipment 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Telecommunication Services 0.0% | ||||||||||||
Other Securities | 0.0 | 32,760 | ||||||||||
Total Rights | ||||||||||||
(Cost $32,982) | 32,760 | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Energy 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | — | |||||||||||
Other Investment Company 0.7% of net assets | ||||||||||||
Securities Lending Collateral 0.7% | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 26,162,578 | 0.7 | 26,162,578 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $26,162,578) | 26,162,578 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 2.1% of net assets | ||||||||||||
Time Deposits 2.0% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||||||
0.03%, 11/03/14 | 39,996,785 | 0.9 | 39,996,785 | |||||||||
DNB | ||||||||||||
0.03%, 11/03/14 | 39,996,785 | 1.0 | 39,996,785 | |||||||||
Other Securities | 0.1 | 2,731,828 | ||||||||||
2.0 | 82,725,398 |
40 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Condensed Portfolio Holdings continued
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
U.S. Treasury Obligations 0.1% | ||||||||||||
Other Securities | 0.1 | 3,599,943 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $86,325,341) | 86,325,341 | |||||||||||
End of Investments. |
At 10/31/14 tax basis cost of the fund’s investments was $2,549,856,868 and the unrealized appreciation and depreciation were $1,634,592,191 and ($74,966,271), respectively, with a net unrealized appreciation of $1,559,625,920.
For the following notes, please refer to the complete schedule of portfolio 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 $32,760 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $26,055,558. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. | |
(g) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
CVR — | Contingent Value Rights | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/19/14 | 60 | 7,026,000 | 398,936 | |||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 410 | 41,233,700 | 1,834,405 | |||||||||
Net Unrealized Appreciation | 2,233,341 | |||||||||||
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $3,996,962,109 | $— | $— | $3,996,962,109 | ||||||||||||
Rights1 | — | — | 32,760 | 32,760 | ||||||||||||
Warrants1 | — | — | — | — | ||||||||||||
Other Investment Company1 | 26,162,578 | — | — | 26,162,578 | ||||||||||||
Short-Term Investments1 | — | 86,325,341 | — | 86,325,341 | ||||||||||||
Total | $4,023,124,687 | $86,325,341 | $32,760 | $4,109,482,788 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $2,233,341 | $— | $— | $2,233,341 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings and are valued at unrealized appreciation or depreciation. |
See financial notes 41
Table of Contents
Schwab Total Stock Market Index Fund
Condensed 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 | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Rights | $— | $— | $— | $32,760 | $— | $— | $— | $32,760 | ||||||||||||||||||||||||
Total | $— | $— | $— | $32,760 | $— | $— | $— | $32,760 | ||||||||||||||||||||||||
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, 2014.
42 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated issuers, at value (cost $4,180,778) | $6,061,583 | |||||
Investments in unaffiliated issuers, at value (cost $2,501,359,989) including securities on loan of $26,055,558 | 4,077,258,627 | |||||
Collateral invested for securities on loan, at value (cost $26,162,578) | + | 26,162,578 | ||||
Total investments, at value (cost $2,531,703,345) | 4,109,482,788 | |||||
Cash | 33,257 | |||||
Receivables: | ||||||
Investments sold | 3,556 | |||||
Fund shares sold | 5,514,185 | |||||
Dividends | 3,472,577 | |||||
Variation margin on futures contracts | 570,600 | |||||
Income from securities on loan | 92,909 | |||||
Foreign tax reclaims | 2,907 | |||||
Interest | 69 | |||||
Prepaid expenses | + | 53,314 | ||||
Total assets | 4,119,226,162 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 26,162,578 | |||||
Payables: | ||||||
Investments bought | 40,749,501 | |||||
Investment adviser and administrator fees | 23,157 | |||||
Shareholder service fees | 8,077 | |||||
Fund shares redeemed | 2,921,177 | |||||
Accrued expenses | + | 126,105 | ||||
Total liabilities | 69,990,595 | |||||
Net Assets | ||||||
Total assets | 4,119,226,162 | |||||
Total liabilities | − | 69,990,595 | ||||
Net assets | $4,049,235,567 | |||||
Net Assets by Source | ||||||
Capital received from investors | 2,414,095,825 | |||||
Net investment income not yet distributed | 53,845,311 | |||||
Net realized capital gains | 1,281,647 | |||||
Net unrealized capital appreciation | 1,580,012,784 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$4,049,235,567 | 109,556,860 | $36.96 |
See financial notes 43
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated issuer | $46,464 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $8,760) | 66,988,404 | |||||
Interest | 23,493 | |||||
Securities on loan | + | 853,347 | ||||
Total investment income | 67,911,708 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,171,946 | |||||
Shareholder service fees | 692,268 | |||||
Portfolio accounting fees | 140,740 | |||||
Shareholder reports | 108,859 | |||||
Transfer agent fees | 103,590 | |||||
Registration fees | 101,073 | |||||
Custodian fees | 75,229 | |||||
Professional fees | 49,804 | |||||
Independent trustees’ fees | 23,129 | |||||
Interest expense | 461 | |||||
Other expenses | + | 63,497 | ||||
Total expenses | 3,530,596 | |||||
Expense reduction by CSIM and its affiliates | − | 272,216 | ||||
Net expenses | − | 3,258,380 | ||||
Net investment income | 64,653,328 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on unaffiliated investments | 5,348,371 | |||||
Net realized gains on futures contracts | + | 12,537,084 | ||||
Net realized gains | 17,885,455 | |||||
Net change in unrealized appreciation (depreciation) on affiliated issuer | 1,136,109 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated investments | 449,096,734 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | (375,196 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 449,857,647 | ||||
Net realized and unrealized gains | 467,743,102 | |||||
Increase in net assets resulting from operations | $532,396,430 |
44 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $64,653,328 | $54,198,628 | ||||||||
Net realized gains | 17,885,455 | 18,230,467 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 449,857,647 | 606,599,386 | |||||||
Increase in net assets from operations | 532,396,430 | 679,028,481 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (50,022,427 | ) | (47,503,974 | ) | ||||||
Distributions from net realized gains | + | (14,754,888 | ) | — | ||||||
Total distributions | ($64,777,315 | ) | ($47,503,974 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 24,674,667 | $847,448,914 | 26,862,706 | $768,188,272 | ||||||||||||||
Shares reinvested | 1,621,857 | 52,337,326 | 1,519,219 | 38,800,859 | ||||||||||||||
Shares redeemed | + | (14,599,314 | ) | (501,556,679 | ) | (17,343,333 | ) | (494,804,875 | ) | |||||||||
Net transactions in fund shares | 11,697,210 | $398,229,561 | 11,038,592 | $312,184,256 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 97,859,650 | $3,183,386,891 | 86,821,058 | $2,239,678,128 | ||||||||||||||
Total increase | + | 11,697,210 | 865,848,676 | 11,038,592 | 943,708,763 | |||||||||||||
End of period | 109,556,860 | $4,049,235,567 | 97,859,650 | $3,183,386,891 | ||||||||||||||
Net investment income not yet distributed | $53,845,311 | $39,398,594 |
See financial notes 45
Table of Contents
Schwab International Index Fund®
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 19.92 | 16.32 | 16.02 | 17.31 | 16.26 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.64 | 0.49 | 0.57 | 0.57 | 0.48 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.63 | ) | 3.69 | 0.33 | (1.38 | ) | 1.01 | |||||||||||||||
Total from investment operations | 0.01 | 4.18 | 0.90 | (0.81 | ) | 1.49 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.51 | ) | (0.58 | ) | (0.60 | ) | (0.48 | ) | (0.44 | ) | ||||||||||||
Net asset value at end of period | 19.42 | 19.92 | 16.32 | 16.02 | 17.31 | |||||||||||||||||
Total return (%) | 0.09 | 26.40 | 6.07 | (4.83 | ) | 9.31 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.19 | 0.19 | 0.19 | 0.19 | 0.19 | |||||||||||||||||
Gross operating expenses | 0.23 | 0.23 | 0.23 | 0.21 | 0.22 | |||||||||||||||||
Net investment income (loss) | 3.42 | 2.88 | 3.66 | 3.26 | 2.88 | |||||||||||||||||
Portfolio turnover rate | 2 | 5 | 31 | 1 | 10 | 13 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,699 | 2,205 | 1,415 | 1,375 | 1,471 |
1 Portfolio turnover rate increase was mainly the result of trading activities in connection with the change in primary benchmark index effective December 20, 2011.
46 See financial notes
Table of Contents
Schwab International Index Fund
Condensed Portfolio Holdings as of October 31, 2014
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 | ($) | ($) | ||||||||||
94 | .8% | Common Stock | 2,082,756,449 | 2,557,901,605 | ||||||||
0 | .6% | Preferred Stock | 12,000,924 | 14,597,344 | ||||||||
0 | .0% | Rights | 463,454 | 458,169 | ||||||||
0 | .2% | Other Investment Company | 6,284,134 | 6,284,134 | ||||||||
3 | .8% | Short-Term Investments | 102,482,807 | 102,482,807 | ||||||||
99 | .4% | Total Investments | 2,203,987,768 | 2,681,724,059 | ||||||||
0 | .6% | Other Assets and Liabilities, Net | 17,421,971 | |||||||||
100 | .0% | Net Assets | 2,699,146,030 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 94.8% of net assets | ||||||||||||
Australia 7.7% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | 554,974 | 0.6 | 16,421,997 | |||||||||
BHP Billiton Ltd. | 648,996 | 0.7 | 19,415,901 | |||||||||
Commonwealth Bank of Australia | 327,430 | 0.9 | 23,283,357 | |||||||||
National Australia Bank Ltd. | 476,014 | 0.6 | 14,725,852 | |||||||||
Westpac Banking Corp. | 627,984 | 0.7 | 19,275,505 | |||||||||
Other Securities | 4.2 | 113,503,715 | ||||||||||
7.7 | 206,626,327 | |||||||||||
Austria 0.2% | ||||||||||||
Other Securities | 0.2 | 5,257,600 | ||||||||||
Belgium 1.2% | ||||||||||||
Anheuser-Busch InBev N.V. | 162,156 | 0.7 | 17,982,187 | |||||||||
Other Securities | 0.5 | 13,986,762 | ||||||||||
1.2 | 31,968,949 | |||||||||||
Denmark 1.5% | ||||||||||||
Novo Nordisk A/S, Class B | 406,216 | 0.7 | 18,362,067 | |||||||||
Other Securities | 0.8 | 21,222,165 | ||||||||||
1.5 | 39,584,232 | |||||||||||
Finland 0.8% | ||||||||||||
Other Securities | 0.8 | 22,824,273 | ||||||||||
France 9.1% | ||||||||||||
BNP Paribas S.A. | 213,876 | 0.5 | 13,440,408 | |||||||||
Sanofi | 239,808 | 0.8 | 21,760,185 | |||||||||
Total S.A. | 431,824 | 1.0 | 25,781,299 | |||||||||
Other Securities | 6.8 | 184,951,657 | ||||||||||
9.1 | 245,933,549 | |||||||||||
Germany 7.8% | ||||||||||||
Allianz SE - Reg’d | 92,021 | 0.5 | 14,633,375 | |||||||||
BASF SE | 185,553 | 0.6 | 16,395,490 | |||||||||
Bayer AG - Reg’d | 166,836 | 0.9 | 23,861,178 | |||||||||
Daimler AG - Reg’d | 194,315 | 0.6 | 15,150,542 | |||||||||
SAP SE | 186,573 | 0.5 | 12,712,230 | |||||||||
Siemens AG - Reg’d | 160,263 | 0.7 | 18,076,612 | |||||||||
Other Securities | 4.0 | 108,919,079 | ||||||||||
7.8 | 209,748,506 | |||||||||||
Hong Kong 3.0% | ||||||||||||
AIA Group Ltd. | 2,431,600 | 0.5 | 13,569,361 | |||||||||
Other Securities | 2.5 | 67,254,559 | ||||||||||
3.0 | 80,823,920 | |||||||||||
Ireland 0.3% | ||||||||||||
Other Securities | 0.3 | 7,966,555 | ||||||||||
Israel 0.5% | ||||||||||||
Other Securities | 0.5 | 14,292,621 | ||||||||||
Italy 2.3% | ||||||||||||
Other Securities | 2.3 | 61,730,126 | ||||||||||
Japan 20.4% | ||||||||||||
Mitsubishi UFJ Financial Group, Inc. | 2,576,709 | 0.6 | 15,020,186 | |||||||||
SoftBank Corp. | 194,200 | 0.5 | 14,137,646 | |||||||||
Toyota Motor Corp. | 556,403 | 1.2 | 33,482,763 | |||||||||
Other Securities | 18.1 | 488,288,321 | ||||||||||
20.4 | 550,928,916 | |||||||||||
Netherlands 2.6% | ||||||||||||
ING Groep N.V. CVA * | 780,729 | 0.4 | 11,180,322 | |||||||||
Unilever N.V. CVA | 330,199 | 0.5 | 12,798,001 | |||||||||
Other Securities | 1.7 | 45,205,768 | ||||||||||
2.6 | 69,184,091 | |||||||||||
New Zealand 0.1% | ||||||||||||
Other Securities | 0.1 | 3,375,772 | ||||||||||
Norway 0.7% | ||||||||||||
Other Securities | 0.7 | 19,864,969 |
See financial notes 47
Table of Contents
Schwab International Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Portugal 0.2% | ||||||||||||
Other Securities | 0.2 | 4,344,746 | ||||||||||
Singapore 1.4% | ||||||||||||
Other Securities | 1.4 | 38,476,799 | ||||||||||
Spain 3.3% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 1,200,605 | 0.5 | 13,428,629 | |||||||||
Banco Santander S.A. | 2,426,020 | 0.8 | 21,435,158 | |||||||||
Telefonica S.A. | 827,077 | 0.4 | 12,445,589 | |||||||||
Other Securities | 1.6 | 42,914,176 | ||||||||||
3.3 | 90,223,552 | |||||||||||
Sweden 2.9% | ||||||||||||
Other Securities | 2.9 | 78,287,621 | ||||||||||
Switzerland 8.8% | ||||||||||||
Nestle S.A. - Reg’d | 650,058 | 1.8 | 47,671,415 | |||||||||
Novartis AG - Reg’d | 464,123 | 1.6 | 43,071,939 | |||||||||
Roche Holding AG | 141,729 | 1.5 | 41,824,422 | |||||||||
UBS AG - Reg’d * | 738,535 | 0.5 | 12,841,745 | |||||||||
Other Securities | 3.4 | 92,074,824 | ||||||||||
8.8 | 237,484,345 | |||||||||||
United Kingdom 20.0% | ||||||||||||
AstraZeneca plc | 254,498 | 0.7 | 18,590,659 | |||||||||
Barclays plc | 3,315,853 | 0.5 | 12,752,500 | |||||||||
BG Group plc | 689,272 | 0.4 | 11,487,429 | |||||||||
BP plc | 3,717,531 | 1.0 | 26,747,268 | |||||||||
British American Tobacco plc | 378,448 | 0.8 | 21,449,524 | |||||||||
Diageo plc | 507,213 | 0.6 | 14,958,918 | |||||||||
GlaxoSmithKline plc | 979,362 | 0.8 | 22,147,257 | |||||||||
HSBC Holdings plc | 3,842,563 | 1.5 | 39,176,326 | |||||||||
Lloyds Banking Group plc * | 11,523,992 | 0.5 | 14,230,849 | |||||||||
National Grid plc | 755,203 | 0.4 | 11,207,186 | |||||||||
Prudential plc | 518,460 | 0.4 | 12,005,474 | |||||||||
Reckitt Benckiser Group plc | 131,606 | 0.4 | 11,084,313 | |||||||||
Rio Tinto plc | 256,983 | 0.5 | 12,227,623 | |||||||||
Royal Dutch Shell plc, A Shares | 793,932 | 1.0 | 28,360,643 | |||||||||
Royal Dutch Shell plc, B Shares | 487,416 | 0.7 | 18,007,793 | |||||||||
SABMiller plc | 195,209 | 0.4 | 11,041,598 | |||||||||
Vodafone Group plc | 5,332,119 | 0.7 | 17,731,718 | |||||||||
Other Securities | 8.7 | 235,767,058 | ||||||||||
20.0 | 538,974,136 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $2,082,756,449) | 2,557,901,605 | |||||||||||
Preferred Stock 0.6% of net assets | ||||||||||||
Germany 0.6% | ||||||||||||
Other Securities | 0.6 | 14,542,982 | ||||||||||
United Kingdom 0.0% | ||||||||||||
Other Securities | 0.0 | 54,362 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $12,000,924) | 14,597,344 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Spain 0.0% | ||||||||||||
Other Securities | 0.0 | 458,169 | ||||||||||
Total Rights | ||||||||||||
(Cost $463,454) | 458,169 | |||||||||||
Other Investment Company 0.2% of net assets | ||||||||||||
United States 0.2% | ||||||||||||
Securities Lending Collateral 0.2% | ||||||||||||
Other Securities | 0.2 | 6,284,134 | ||||||||||
Total Other Investment Company | ||||||||||||
(Cost $6,284,134) | 6,284,134 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 3.8% of net assets | ||||||||||||
Time Deposits 3.6% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||||||
0.03%, 11/03/14 | 18,382,677 | 0.7 | 18,382,677 | |||||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||||||
0.03%, 11/03/14 | 26,411,153 | 1.0 | 26,411,153 | |||||||||
DNB | ||||||||||||
0.03%, 11/03/14 | 26,411,153 | 1.0 | 26,411,153 | |||||||||
Wells Fargo | ||||||||||||
0.03%, 11/03/14 | 26,373,131 | 0.9 | 26,373,131 | |||||||||
Other Securities | 0.0 | 104,740 | ||||||||||
3.6 | 97,682,854 | |||||||||||
U.S. Treasury Obligation 0.2% | ||||||||||||
Other Securities | 0.2 | 4,799,953 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $102,482,807) | 102,482,807 | |||||||||||
End of Investments. |
48 See financial notes
Table of Contents
Schwab International Index Fund
Condensed Portfolio Holdings continued
At 10/31/14, the tax basis cost of the fund’s investments was $2,228,712,985 and the unrealized appreciation and depreciation were $596,840,562 and ($143,829,488), respectively, with a net unrealized appreciation of $453,011,074.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $2,555,486,627 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(a) for additional information).
For the following notes, please refer to the complete schedule of portfolio holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $5,980,410. | |
(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 $54,362 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/19/14 | 1,260 | 115,668,000 | 3,612,589 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $— | $587,668,696 | $— | $587,668,696 | ||||||||||||
Australia | 1,275,299 | 205,351,028 | — | 206,626,327 | ||||||||||||
Belgium | 631,759 | 31,337,190 | — | 31,968,949 | ||||||||||||
Finland | 544,226 | 22,280,047 | — | 22,824,273 | ||||||||||||
France | 4,583,251 | 241,350,298 | — | 245,933,549 | ||||||||||||
Ireland | 2,112,489 | 5,854,066 | — | 7,966,555 | ||||||||||||
Japan | 950,683 | 549,978,233 | — | 550,928,916 | ||||||||||||
Netherlands | 1,263,184 | 67,920,907 | — | 69,184,091 | ||||||||||||
Norway | 206,749 | 19,658,220 | — | 19,864,969 | ||||||||||||
Singapore | 248,696 | 38,228,103 | — | 38,476,799 | ||||||||||||
Switzerland | 505,698 | 236,978,647 | — | 237,484,345 | ||||||||||||
United Kingdom | 4,635,926 | 534,338,210 | — | 538,974,136 | ||||||||||||
Preferred Stock1 | — | 14,542,982 | — | 14,542,982 | ||||||||||||
United Kingdom | — | — | 54,362 | 54,362 | ||||||||||||
Rights1 | 458,169 | — | — | 458,169 | ||||||||||||
Other Investment Company1 | 6,284,134 | — | — | 6,284,134 | ||||||||||||
Short-Term Investments1 | — | 102,482,807 | — | 102,482,807 | ||||||||||||
Total | $23,700,263 | $2,657,969,434 | $54,362 | $2,681,724,059 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $3,612,589 | $— | $— | $3,612,589 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings and are valued at unrealized appreciation or depreciation. |
See financial notes 49
Table of Contents
Schwab International Index Fund
Condensed 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 | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Portugal | $— | $— | ($638,611 | ) | $284,328 | $— | $354,283 | $— | $— | |||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
United Kingdom | 41,914 | 460 | 165 | 54,546 | (42,723 | ) | — | — | 54,362 | |||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||
Spain | 389,200 | — | (17,552 | ) | — | (371,648 | ) | — | — | — | ||||||||||||||||||||||
Total | $431,114 | $460 | ($655,998 | ) | $338,874 | ($414,371 | ) | $354,283 | $— | $54,362 | ||||||||||||||||||||||
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, 2014 was ($618,397).
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, 2014. The transfers in the amount of $16,621,611 and $7,924,803 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 into Level 3 from Level 1 or Level 2 were due to the result of fair valued securities for which no quoted value was available.
50 See financial notes
Table of Contents
Schwab International Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $2,197,703,634) including securities on loan of $5,980,410 | $2,675,439,925 | |||||
Collateral invested for securities on loan, at value (cost $6,284,134) | + | 6,284,134 | ||||
Total investments, at value (cost $2,203,987,768) | 2,681,724,059 | |||||
Foreign currency, at value (cost $325) | 325 | |||||
Cash | 100,000 | |||||
Receivables: | ||||||
Fund shares sold | 18,477,247 | |||||
Dividends | 4,940,649 | |||||
Variation margin on futures contracts | 2,037,618 | |||||
Foreign tax reclaims | 1,985,410 | |||||
Income from securities on loan | 31,393 | |||||
Interest | 81 | |||||
Prepaid expenses | + | 43,154 | ||||
Total assets | 2,709,339,936 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 6,284,134 | |||||
Payables: | ||||||
Investments bought | 2,208,807 | |||||
Investment adviser and administrator fees | 28,882 | |||||
Shareholder service fees | 6,422 | |||||
Fund shares redeemed | 1,336,704 | |||||
Accrued expenses | + | 328,957 | ||||
Total liabilities | 10,193,906 | |||||
Net Assets | ||||||
Total assets | 2,709,339,936 | |||||
Total liabilities | − | 10,193,906 | ||||
Net assets | $2,699,146,030 | |||||
Net Assets by Source | ||||||
Capital received from investors | 2,179,888,429 | |||||
Net investment income not yet distributed | 62,675,606 | |||||
Net realized capital losses | (24,516,959 | ) | ||||
Net unrealized capital appreciation | 481,098,954 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$2,699,146,030 | 138,984,661 | $19.42 |
See financial notes 51
Table of Contents
Schwab International Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $7,050,681) | $87,668,265 | |||||
Interest | 23,622 | |||||
Securities on loan | + | 1,248,476 | ||||
Total investment income | 88,940,363 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,694,085 | |||||
Shareholder service fees | 477,977 | |||||
Custodian fees | 481,429 | |||||
Index fee | 422,570 | |||||
Portfolio accounting fees | 126,801 | |||||
Shareholder reports | 95,426 | |||||
Registration fees | 90,817 | |||||
Transfer agent fees | 64,176 | |||||
Professional fees | 54,453 | |||||
Independent trustees’ fees | 17,773 | |||||
Interest expense | 1,680 | |||||
Other expenses | + | 55,332 | ||||
Total expenses | 5,582,519 | |||||
Expense reduction by CSIM and its affiliates | − | 901,665 | ||||
Net expenses | − | 4,680,854 | ||||
Net investment income | 84,259,509 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 938,120 | |||||
Net realized gains on futures contracts | 3,495,645 | |||||
Net realized losses on foreign currency transactions | + | (329,634 | ) | |||
Net realized gains | 4,104,131 | |||||
Net change in unrealized appreciation (depreciation) on investments | (94,924,198 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | 1,194,753 | |||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (312,328 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (94,041,773 | ) | |||
Net realized and unrealized losses | (89,937,642 | ) | ||||
Decrease in net assets resulting from operations | ($5,678,133 | ) |
52 See financial notes
Table of Contents
Schwab International Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $84,259,509 | $50,514,341 | ||||||||
Net realized gains | 4,104,131 | 6,801,009 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (94,041,773 | ) | 355,342,477 | ||||||
Increase (Decrease) in net assets from operations | (5,678,133 | ) | 412,657,827 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($56,954,638 | ) | ($50,551,708 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 42,892,587 | $850,934,554 | 36,208,819 | $648,488,445 | ||||||||||||||
Shares reinvested | 2,686,474 | 50,828,092 | 2,784,477 | 45,581,882 | ||||||||||||||
Shares redeemed | + | (17,254,418 | ) | (344,646,661 | ) | (15,012,168 | ) | (266,487,088 | ) | |||||||||
Net transactions in fund shares | 28,324,643 | $557,115,985 | 23,981,128 | $427,583,239 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 110,660,018 | $2,204,662,816 | 86,678,890 | $1,414,973,458 | ||||||||||||||
Total increase | + | 28,324,643 | 494,483,214 | 23,981,128 | 789,689,358 | |||||||||||||
End of period | 138,984,661 | $2,699,146,030 | 110,660,018 | $2,204,662,816 | ||||||||||||||
Net investment income not yet distributed | $62,675,606 | $35,386,171 |
See financial notes 53
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 Fundamental Global Real Estate Index 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 | |||
Schwab Large-Cap Growth Fund | ||||
Schwab Small-Cap Equity Fund | Schwab Investments (organized October 26, 1990) | |||
Schwab Hedged Equity Fund | Schwab 1000 Index Fund | |||
Schwab Financial Services Fund | Schwab Short-Term Bond Market Fund | |||
Schwab Health Care Fund | Schwab Intermediate-Term Bond 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 funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(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 |
54
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 Contracts (“futures”): Futures are valued at their settlement prices as of the close of their exchanges. | |
• | Short-term securities (60 days or less to maturity): Short-term securities may be 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, without consideration to the classification level of the specific investments held by the underlying fund. | |
• | 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 |
55
Table of Contents
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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, 2014 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 a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value may change daily.
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allows the funds to terminate any loans at any given time. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. A fund retains the right to recall a security on loan. The aggregate market value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan (at market value computed at the time of the loan). Total costs and expenses, including agent fees associated with securities lending activities under the trust’s Securities Lending Program paid to the unaffiliated lending agent are approximately 15% of the gross lending revenues.
The values of the securities on loan and the related collateral as of October 31, 2014, if any, are disclosed in the funds’ Portfolio Holdings. Investments of cash collateral are also disclosed in each fund’s Statement of Assets and Liabilities.
56
Table of Contents
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains 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 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, 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 a fund’s 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.
57
Table of Contents
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2014, if any, are reflected in each fund’s Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
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.
Market Risk. Equity 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.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Tracking Error Risk. As an index fund, each 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.
Investment Style Risk. 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.
A significant percentage of an index may be composed of securities in a single industry or sector of the economy. If a fund is focused in an industry or sector, it may present more risks than if it were broadly diversified over numerous industries and sectors of the economy.
Sampling Index Tracking Risk. 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 will be 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.
Concentration Risk. To the extent that a fund’s or an index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country, or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country, or asset class.
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Schwab Equity Index Funds
Financial Notes (continued)
3. Risk Factors (continued):
Small-Cap Risk. 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 performance also will lag those investments.
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 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 or small-cap stocks, for instance — a fund’s performance also will lag those investments.
Foreign Investment Risk. 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); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund’s investments, and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategies. These risks may be heightened in connection with investments in emerging markets. Foreign securities also include American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”) and European Depositary Receipts (“EDRs”), which are depositary receipts issued by U.S. and foreign banks that represent shares of foreign-based corporations. ADRs, GDRs and EDRs may be less liquid than the underlying shares in their primary trading markets; and GDRs, many of which are issued by companies in emerging markets, may be more volatile.
Geographic Risk. 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.
Derivatives Risk. 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 a fund to realize higher amounts of short-term capital gain. These risks could cause a fund to lose more than the principal amount invested.
Liquidity Risk. 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.
Security Lending Risk. Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”), a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement (“Advisory Agreement”) between CSIM and each trust.
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Schwab Equity Index Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
For its advisory and administrative services to the Schwab 1000 Index Fund, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of the fund’s average daily net assets as follows:
Schwab | ||||
1000 | ||||
% of Average Daily Net Assets | Index Fund | |||
First $500 million | 0.30% | |||
$500 million to $5 billion | 0.22% | |||
$5 billion to $10 billion | 0.20% | |||
Over $10 billion | 0.18% |
For its advisory and administrative services to the 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 | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Fund | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,232,381 | 70,200 | — | 1,302,581 | $37,344,997 | $— | $299,995 | |||||||||||||||||||||
Schwab 1000 Index Fund | 367,065 | — | — | 367,065 | 10,523,753 | — | 88,096 | |||||||||||||||||||||
Schwab Total Stock Market Index Fund | 182,326 | 29,100 | — | 211,426 | 6,061,583 | — | 46,464 |
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, 2014, as applicable:
Underlying Funds | ||||||||||||||||||||
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 | 1.4% | —% | 6.0% | —% | 6.9% | |||||||||||||||
Schwab MarketTrack Growth Portfolio | 1.5% | —% | 5.7% | —% | 5.4% | |||||||||||||||
Schwab MarketTrack Balanced Portfolio | 0.8% | —% | 3.1% | —% | 2.8% | |||||||||||||||
Schwab MarketTrack Conservative Portfolio | 0.2% | —% | 0.9% | —% | 0.8% | |||||||||||||||
Schwab MarketTrack Growth Portfolio II | 0.0% | * | 0.1% | 0.3% | —% | 0.2% | ||||||||||||||
Schwab Target 2010 Fund | 0.0% | * | —% | —% | —% | —% | ||||||||||||||
Schwab Target 2015 Fund | 0.0% | * | —% | —% | —% | —% | ||||||||||||||
Schwab Target 2020 Fund | 0.2% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2025 Fund | 0.2% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2030 Fund | 0.4% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2035 Fund | 0.2% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2040 Fund | 0.4% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2045 Fund | 0.0% | * | —% | —% | —% | —% | ||||||||||||||
Schwab Target 2050 Fund | 0.0% | * | —% | —% | —% | —% | ||||||||||||||
Schwab Target 2055 Fund | 0.0% | * | —% | —% | —% | —% |
* | Less than 0.1% |
Certain other related parties may own shares of Schwab funds in this report. As of October 31, 2014, 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 2.8%, 6.6% and 3.4%, 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 on a fund’s Statement of Operations. For information regarding the trustees, please refer to the 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, 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 an interest expense, which is disclosed on a fund’s 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 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, 2014 are presented on the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in 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 | $462,670,963 | 4,886 | ||||||
Schwab 1000 Index Fund | 39,935,354 | 419 | ||||||
Schwab Small-Cap Index Fund | 55,299,167 | 483 | ||||||
Schwab Total Stock Market Index Fund | 69,348,292 | 717 | ||||||
Schwab International Index Fund | 59,574,515 | 630 |
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2014, 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 | $1,076,416,361 | $278,793,912 | ||||||
Schwab 1000 Index Fund | 219,932,645 | 314,403,431 | ||||||
Schwab Small-Cap Index Fund | 503,473,110 | 305,868,156 | ||||||
Schwab Total Stock Market Index Fund | 508,454,594 | 37,603,609 | ||||||
Schwab International Index Fund | 558,876,284 | 41,216,548 |
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 on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/13-10/31/14) | (11/1/12-10/31/13) | |||||||
Schwab S&P 500 Index Fund | $284,628 | $199,433 | ||||||
Schwab 1000 Index Fund | 27,406 | 43,102 | ||||||
Schwab Small-Cap Index Fund | 29,424 | 22,392 | ||||||
Schwab Total Stock Market Index Fund | 75,062 | 45,887 | ||||||
Schwab International Index Fund | 24,510 | 17,950 |
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Schwab Equity Index Funds
Financial Notes (continued)
10. Federal Income Taxes:
As of October 31, 2014, 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 | $289,403,265 | $87,159,600 | $33,077,149 | $59,208,843 | $78,846,363 | |||||||||||||||
Undistributed long-term capital gains | — | 171,938,124 | 130,861,822 | 16,304,979 | — | |||||||||||||||
Unrealized appreciation on investments | 9,323,536,713 | 4,587,737,414 | 900,108,052 | 1,634,592,191 | 596,840,562 | |||||||||||||||
Unrealized depreciation on investments | (430,521,314 | ) | (36,668,255 | ) | (151,420,935 | ) | (74,966,271 | ) | (143,829,488 | ) | ||||||||||
Other unrealized appreciation (depreciation) | — | — | — | — | (213,656 | ) | ||||||||||||||
Net unrealized appreciation (depreciation) | $8,893,015,399 | $4,551,069,159 | $748,687,117 | $1,559,625,920 | $452,797,418 | |||||||||||||||
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, 2014, 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, 2015 | $89,645,092 | $— | $— | $— | $— | |||||||||||||||
October 31, 2016 | 77,879,594 | — | — | — | — | |||||||||||||||
October 31, 2017 | 20,049,252 | — | — | — | 12,386,180 | |||||||||||||||
Total | $187,573,938 | $— | $— | $— | $12,386,180 | |||||||||||||||
For the year ended October 31, 2014, the funds had capital loss carryforwards 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 loss carryforwards utilized | $95,059,485 | $— | $— | $— | $5,012,069 | |||||||||||||||
Capital losses expired | 14,197,048 | — | — | — | — |
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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 | $297,103,536 | $92,284,725 | $38,782,759 | $50,259,453 | $56,954,638 | |||||||||||||||
Long-term capital gains | — | 181,138,882 | 97,746,901 | 14,517,862 | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior 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 | — | — | — | — | — |
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, 2014, 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 | ($14,197,048 | ) | $— | $— | $— | $— | ||||||||||||||
Undistributed net investment income | (715,891 | ) | (60,827 | ) | (1,366,652 | ) | (184,184 | ) | (15,436 | ) | ||||||||||
Net realized capital gains (losses) | 14,912,939 | 60,827 | 1,366,652 | 184,184 | 15,436 |
As of October 31, 2014, 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, 2014, 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 of 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 condensed 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 funds 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 funds constituting Schwab Capital Trust) (hereafter collectively referred to as the “Funds”) at October 31, 2014, 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, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 16, 2014
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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 $7,006,596 to its shareholders for the year ended October 31, 2014. The respective foreign source income on the fund is $84,212,078.
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2014, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab S&P 500 Index Fund | 98.44 | ||||
Schwab 1000 Index Fund | 100.00 | ||||
Schwab Small-Cap Index Fund | 50.68 | ||||
Schwab Total Stock Market Index Fund | 91.39 | ||||
Schwab International Index Fund | — |
For the fiscal year ended October 31, 2014, 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 2015 via IRS form 1099 of the amounts for use in preparing their 2014 income tax return.
Schwab S&P 500 Index Fund | $297,103,536 | |||
Schwab 1000 Index Fund | 92,284,725 | |||
Schwab Small-Cap Index Fund | 20,272,407 | |||
Schwab Total Stock Market Index Fund | 47,706,854 | |||
Schwab International Index Fund | 51,378,675 |
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, 2014:
Schwab S&P 500 Index Fund | $— | |||
Schwab 1000 Index Fund | 181,138,882 | |||
Schwab Small-Cap Index Fund | 97,746,901 | |||
Schwab Total Stock Market Index Fund | 14,517,862 | |||
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 30, 2014, and June 3, 2014, and approved the renewal of the Agreements with respect to the Funds for an additional one year term at the meeting held on June 3, 2014. 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 its review of Fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreements with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreements with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreements with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to Schwab 1000 Index Fund that include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreements with respect to the Funds and concluded that the compensation under the Agreements with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust and Schwab Investments, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 97 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) | |||
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) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2011.) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 76 | Director, KLA-Tencor Corporation (2008 – present) | |||
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, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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) | |||
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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. | 97 | 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 Investment Management, 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; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). | |
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). | |
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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 | |
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.
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.
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 (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. 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 Securities Act of 1933 (the “1933 Act”), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. 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. 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.
Schwab 1000 Index An index that represents the performance of the largest 1,000 publicly traded companies in the United States.
Small-Cap Spliced Index 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.
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
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• | 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
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Safeguarding Your Information — Security Is a Partnership
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We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2014 Schwab Funds. All rights reserved.
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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 the 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 Fundamental Global Real Estate 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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Annual report dated October 31, 2014, 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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Schwab Active Equity Funds
Annual Report
October 31, 2014
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
4 | ||
5 | ||
7 | ||
Performance and Fund Facts | ||
8 | ||
10 | ||
12 | ||
14 | ||
16 | ||
18 | ||
20 | ||
22 | ||
24 | ||
25 | ||
32 | ||
39 | ||
46 | ||
55 | ||
64 | ||
70 | ||
77 | ||
87 | ||
100 | ||
101 | ||
102 | ||
104 | ||
107 |
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, 2014 | ||||
Schwab Core Equity Fundtm (Ticker Symbol: SWANX) | 17.88% | |||
S&P 500® Index | 17.27% | |||
Fund Category: Morningstar Large Blend | 14.33% | |||
Performance Details | pages 8-9 | |||
Schwab Dividend Equity Fundtm (Ticker Symbol: SWDSX) | 14.26% | |||
S&P 500® Index | 17.27% | |||
Fund Category: Morningstar Large Value | 13.60% | |||
Performance Details | pages 10-11 | |||
Schwab Large-Cap Growth Fundtm (Ticker Symbol: SWLSX) | 18.06% | |||
Russell 1000 Growth Index | 17.11% | |||
Fund Category: Morningstar Large Growth | 14.57% | |||
Performance Details | pages 12-13 | |||
Schwab Small-Cap Equity Fundtm (Ticker Symbol: SWSCX) | 11.67% | |||
Russell 2000® Index | 8.06% | |||
Fund Category: Morningstar Small Blend | 7.66% | |||
Performance Details | pages 14-15 | |||
Schwab Hedged Equity Fundtm (Ticker Symbol: SWHEX) | 11.07% | |||
S&P 500® Index | 17.27% | |||
Fund Category: Morningstar Long/Short Equity | 4.80% | |||
Performance Details | pages 16-17 | |||
Schwab Financial Services Fundtm (Ticker Symbol: SWFFX) | 15.92% | |||
S&P 1500 SuperComposite Financial Sector Index | 17.21% | |||
Fund Category: Morningstar Financial | 10.51% | |||
Performance Details | pages 18-19 | |||
Schwab Health Care Fundtm1 (Ticker Symbol: SWHFX) | 27.06% | |||
Dow Jones Global Health Care Index | 23.34% | |||
Fund Category: Morningstar Health | 32.03% | |||
Performance Details | pages 20-21 | |||
Schwab® International Core Equity Fund1 (Ticker Symbol: SICNX) | 2.20% | |||
MSCI EAFE® Index (Net)* | -0.60% | |||
Fund Category: Morningstar Foreign Large Blend | -0.04% | |||
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.
* | Effective February 28, 2014, 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. |
4 Schwab Active Equity Funds
Table of Contents
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
For 25 years, Charles Schwab Investment Management has been committed to building funds that are designed to serve as part of the foundation of an investor’s portfolio. Our Schwab Active Equity Funds employ a disciplined investment process that involves quantitative and qualitative research and analysis through a bottom-up approach to stock selection. To aid in each fund’s stock selection process, multiple inputs, including Schwab Equity Ratings®, are analyzed by an experienced investment team.
For the 12-month reporting period ended October 31, 2014, the Schwab Active Equity Funds generated returns that in most cases reflected a rally by U.S. stocks but a weaker performance by international stocks. Most of the funds invest in U.S. stocks, but for funds that invested in international stocks, the depreciation of many foreign currencies versus the U.S. dollar reduced returns. The Schwab Health Care Fund, the Schwab Small-Cap Equity Fund, and the Schwab International Core Equity Fund performed particularly well versus their comparative indices, while the Schwab Financial Services Fund and the Schwab Dividend Equity Fund were comparative underperformers. In addition, the Schwab Hedged Equity Fund underperformed its comparative index, reflecting the fund’s use of short sale transactions that generally caused performance to lag when U.S. stocks rallied.
In the U.S., the Federal Reserve continued to maintain its accommodative monetary policy. This combined with a stronger economy and favorable
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2014
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 17.27% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 8.06% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −0.60% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 4.14% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.03% | Barclays U.S. Treasury Bills 1-3 Months Index: measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctcaptst01.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
Table of Contents
From the President continued
For the 12-month reporting period ended October 31, 2014, the Schwab Active Equity Funds generated returns that in most cases reflected a rally by U.S. stocks but a weaker performance by international stocks.
earnings reports by select companies drove U.S. stock market indices to record highs even as volatility increased. Large cap names were favored by the market, outperforming small-cap stocks.
Outside the U.S., economic growth generally stalled. This led to differences between central bank policies in the U.S. and those of Japan and other countries, causing many foreign currencies such as the yen to depreciate versus the U.S. dollar and reducing international returns. Reflecting this backdrop, the MSCI EAFE Index returned -0.6%,1 and the S&P 500 returned 17.3%.
For more information about the Schwab Active Equity Funds, please continue reading this report. In addition, you can find further details about these funds by visiting www.schwabfunds.com, or by contacting us at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctschandom.gif)
1 | The total return cited is for the MSCI EAFE Index (Net), which is calculated net of foreign withholding taxes. |
6 Schwab Active Equity Funds
Table of Contents
Fund Management
![]() | Jonas Svallin, CFA Managing Director and Head of Active Equity Strategies, leads the portfolio management team of the Schwab 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 Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the funds. 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.
Performance. The fund returned 17.88% for the 12-month reporting period ended October 31, 2014, outperforming the S&P 500 Index (the index), which the fund uses for performance comparisons. The index returned 17.27% for the reporting period.
Market Highlights. Rebounding economic growth and favorable earnings reports by select companies late in the reporting period supported the performance of U.S. stocks, with large-cap stocks outperforming small-cap stocks. The Information Technology and Health Care sectors performed particularly well, while the Energy and Telecommunication Services sectors underperformed by comparison.
Positioning and Strategies. The fund’s over- and underweights in many market sectors compared with the index were among the largest overall contributors to the fund’s relative performance. Effective stock selection also helped overall and contributed to fund outperformance.
The fund’s holdings in Apple, Inc. contributed the most to relative performance, returning approximately 48% for the 12-month reporting period. Factors such as positive earnings reports and the highly anticipated release of the iPhone 6 and iPhone 6 Plus gave Apple, Inc. a boost toward the end of the reporting period, and helped this stock positively contribute to relative performance. From a sector standpoint, the Information Technology sector contributed the most to the fund’s total return, as this sector benefitted especially from improvements in the U.S. economy and increased corporate spending on technology. Although the fund was slightly underweight in Information Technology relative to the comparative index, effective stock selection within this sector helped make up for this relative weighting.
In contrast, the fund’s holdings of International Game Technology, a global casino-style gaming company, detracted the most from the fund’s total return. International Game Technology returned approximately -34%, in part due to muted demand in its core business. As a result, the fund’s overweight in this stock reduced the relative performance of the fund (please note this position was sold prior to the end of the reporting period). Within the fund, the Telecommunication Services sector detracted the most from the fund’s total return, as competition between several large companies impacted profit margins. Though the fund was underweight this sector compared with the index, stock selection negatively affected relative performance. The fund’s holdings of AT&T Inc. detracted the most from the fund’s total return in this sector, with returns of approximately -10%. The strategic decision to overweight in this stock detracted from relative performance (please note this position was sold prior to the end of the reporting period).
As of 10/31/14:
Statistics
Number of Holdings | 124 | |||
Weighted Average Market Cap ($ x 1,000,000) | $104,805 | |||
Price/Earnings Ratio (P/E) | 16.7 | |||
Price/Book Ratio (P/B) | 2.4 | |||
Portfolio Turnover Rate | 63% |
Sector Weightings % of Investments
Information Technology | 18.5% | |||
Health Care | 16.2% | |||
Financials | 13.7% | |||
Industrials | 12.6% | |||
Energy | 9.4% | |||
Consumer Discretionary | 9.2% | |||
Consumer Staples | 9.0% | |||
Utilities | 5.6% | |||
Materials | 3.4% | |||
Telecommunication Services | 1.1% | |||
Other | 1.3% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 3.6% | |||
Pfizer, Inc. | 3.1% | |||
PepsiCo, Inc. | 2.5% | |||
Wells Fargo & Co. | 2.3% | |||
Occidental Petroleum Corp. | 2.3% | |||
PPG Industries, Inc. | 2.3% | |||
Entergy Corp. | 2.2% | |||
Archer-Daniels-Midland Co. | 2.2% | |||
The PNC Financial Services Group, Inc. | 2.0% | |||
Amgen, Inc. | 2.0% | |||
Total | 24.5% |
Management views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Active Equity Funds
Table of Contents
Schwab Core Equity Fundtm
Performance and Fund Facts as of 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctscef.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) | 17.88 | % | 15.26 | % | 8.44 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Fund Category: Morningstar Large Blend | 14.33 | % | 15.03 | % | 7.58 | % |
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 and September 7, 2012, respectively, the Laudus U.S. MarketMasters Fund and the Schwab Premier 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. 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.
Performance. The fund returned 14.26% for the 12-month reporting period ended October 31, 2014, underperforming the S&P 500 Index (the index), which the fund uses for performance comparisons. The index returned 17.27% for the reporting period. As of October 31, 2014, the fund’s dividend yield was 2.24%, higher than the 1.91% dividend yield of the index. As of October 31, 2014, the fund’s 30-Day SEC yield was 1.38%.
Market Highlights. Dividend-paying stocks generally performed well early in the reporting period, most notably in the Utilities sector and REITs industry. However, reductions in stimulative policies by the Federal Reserve and an uncertain global economic outlook negatively impacted dividend-paying stocks, reducing overall returns. In this environment, the Health Care and Information Technology sectors performed particularly well, while the Telecommunication Services and Energy sectors, which generated positive overall returns, underperformed by comparison.
Positioning and Strategies. Decisions to over- and underweight certain market sectors compared with the index represented one of the biggest overall detractors from the fund’s relative performance for the reporting period. However, the fund’s disciplined stock-selection strategies helped the investment advisor identify a number of stock opportunities that worked out well, although some stock selections and sector weightings were less effective than others.
For example, an overweight of Best Buy Co., Inc. detracted from the fund’s total return. Best Buy Co., Inc. returned approximately -18%, in part due to weak holiday sales early in the reporting period resulting from lack of consumer spending, high competition, and aggressive price cuts. From a sector standpoint, stocks from the Telecommunication Services sector contributed the least to the total return of the fund, as many of these companies faced high competition and stalled growth during the reporting period. The communications holding company AT&T, Inc. is an example from this sector and detracted from relative performance. Weak wireless subscriber growth and high capital spending negatively impacted this stock, with the fund’s holdings of AT&T, Inc. returning approximately 1%.
By comparison, an overweight of Wells Fargo & Co., a diversified financial services company, contributed the most to the total return of the fund. Wells Fargo & Co. demonstrated stable growth and had comparatively higher fee exposure during the 12-month reporting period, both of which contributed to this stock’s return of approximately 28% for the fund. Within the fund, the Financials sector was the overall biggest contributor to total return. Financials stocks benefitted especially from the strengthening of the U.S. economy, and effective stock selection within this sector positively contributed to the fund’s relative performance.
As of 10/31/14:
Statistics
Number of Holdings | 137 | |||
Weighted Average Market Cap ($ x 1,000,000) | $88,950 | |||
Price/Earnings Ratio (P/E) | 16.6 | |||
Price/Book Ratio (P/B) | 1.8 | |||
Portfolio Turnover Rate | 72% |
Sector Weightings % of Investments
Financials | 27.9% | |||
Health Care | 14.1% | |||
Energy | 13.5% | |||
Industrials | 10.6% | |||
Information Technology | 9.3% | |||
Utilities | 7.5% | |||
Consumer Discretionary | 6.7% | |||
Consumer Staples | 5.4% | |||
Materials | 2.3% | |||
Telecommunication Services | 1.9% | |||
Other | 0.8% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Pfizer, Inc. | 3.7% | |||
Merck & Co., Inc. | 3.2% | |||
Citigroup, Inc. | 3.1% | |||
Wells Fargo & Co. | 3.1% | |||
ConocoPhillips | 2.5% | |||
Cardinal Health, Inc. | 2.2% | |||
Morgan Stanley | 2.2% | |||
Exxon Mobil Corp. | 2.2% | |||
Chevron Corp. | 2.2% | |||
Entergy Corp. | 2.2% | |||
Total | 26.6% |
Management views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Active Equity Funds
Table of Contents
Schwab Dividend Equity Fundtm
Performance and Fund Facts as of 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsdef.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) | 14.26 | % | 15.45 | % | 8.15 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Russell 1000 Value Index | 16.46 | % | 16.49 | % | 7.90 | % | |||||||||
Fund Category: Morningstar Large Value | 13.60 | % | 14.53 | % | 7.23 | % |
Fund Expense Ratio4: 0.89%
Yields1
30-Day SEC Yield | 1.38% | |||
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.
Performance. The fund returned 18.06% for the 12-month reporting period ended October 31, 2014, outperforming the Russell 1000 Growth Index (the index), which the fund uses for performance comparisons. The index returned 17.11% for the reporting period.
Market Highlights. U.S. large-cap stocks produced double-digit returns, in part due to a rebound in U.S. economic growth and favorable earnings reports by select companies late in the reporting period. The Information Technology and Health Care sectors performed particularly well, while the Energy and Telecommunication Services sectors underperformed by comparison.
Positioning and Strategies. The fund’s disciplined stock-selection strategies helped the investment advisor identify a number of stock opportunities that worked out well, enhancing the fund’s performance versus the index. Decisions to over- or underweight certain sectors also generally worked in the fund’s favor, although some stock selections and sector weightings were less effective than others.
Apple, Inc., a company that designs, manufactures, and markets personal electronic devices, contributed the most to the fund’s total return. Positive earnings reports and the highly anticipated release of the iPhone 6 and iPhone 6 Plus gave Apple, Inc. a boost toward the end of the reporting period, with the fund’s holdings of this company returning approximately 48%. Based on the results of the fund’s valuation models, holdings of Apple, Inc. were generally kept in line with those of the index. From a sector standpoint, Information Technology contributed the most to the fund’s total return, as this sector benefitted from innovations in cloud computing and growth in Internet services. Although the fund was slightly underweight in Information Technology relative to the comparative index, effective stock selection within this sector made up for this relative weighting.
By comparison, an overweight in shares of SM Energy Co. detracted more from the fund’s total return than any other holdings. SM Energy Co., an independent energy company that is engaged in the acquisition, exploration, development, and production of oil and gas in onshore North America, returned -35% for the fund for the reporting period. Key oil reserve revisions early in 2014 added to this negative performance, as did soft earnings and declining oil prices late in the reporting period. Within the fund, the Energy sector was the only detractor from the fund’s total return. Though the fund was slightly underweight this sector compared with the index, which helped relative performance, the fund’s stock selection strategies in the Energy sector worked out less favorably for the fund.
As of 10/31/14:
Statistics
Number of Holdings | 115 | |||
Weighted Average Market Cap ($ x 1,000,000) | $108,462 | |||
Price/Earnings Ratio (P/E) | 18.8 | |||
Price/Book Ratio (P/B) | 3.3 | |||
Portfolio Turnover Rate | 82% |
Sector Weightings % of Investments
Information Technology | 26.4% | |||
Consumer Discretionary | 16.0% | |||
Health Care | 15.4% | |||
Industrials | 12.4% | |||
Consumer Staples | 11.1% | |||
Financials | 7.6% | |||
Energy | 4.7% | |||
Materials | 3.4% | |||
Telecommunication Services | 1.5% | |||
Utilities | 1.1% | |||
Other | 0.4% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Apple, Inc. | 6.4% | |||
Gilead Sciences, Inc. | 3.5% | |||
PepsiCo, Inc. | 3.2% | |||
Oracle Corp. | 2.8% | |||
Amgen, Inc. | 2.8% | |||
Microsoft Corp. | 2.6% | |||
The Kroger Co. | 2.3% | |||
C.R. Bard, Inc. | 2.1% | |||
Dr Pepper Snapple Group, Inc. | 2.0% | |||
EOG Resources, Inc. | 2.0% | |||
Total | 29.7% |
Management 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctslgf.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) | 18.06 | % | 15.84 | % | 7.47 | % | |||||||||
Russell 1000 Growth Index | 17.11 | % | 17.43 | % | 8.88 | % | |||||||||
Fund Category: Morningstar Large Growth | 14.57 | % | 15.69 | % | 7.82 | % |
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 the 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.
Performance. The fund returned 11.67% for the 12-month reporting period ended October 31, 2014, outperforming the Russell 2000 Index (the index), which the fund uses for performance comparisons. The index returned 8.06% for the reporting period.
Market Highlights. Small-cap stocks underperformed large-cap stocks, but both produced positive returns for the 12-month reporting period. A rebound in U.S. economic growth helped, as did favorable earnings reports by select companies late in the reporting period. The Utilities and Health Care sectors performed particularly well, while the Energy and Telecommunication Services sectors underperformed by comparison.
Positioning and Strategies. The fund’s disciplined stock-selection strategies helped the investment advisor identify a number of stock opportunities that worked out well, enhancing the fund’s performance versus the index. Decisions to over- or underweight certain sectors also generally worked in the fund’s favor, although some stock selections and sector weightings were less effective than others.
For example, Green Plains, Inc., a vertically integrated producer, marketer and distributer of ethanol, contributed the most to the fund’s total return. Green Plains, Inc. returned approximately 114% for the fund, in part due to strong demand for ethanol both domestically and abroad. The performance of this company was particularly notable given that it resides within what was the worst-performing sector for the reporting period. From a sector standpoint, Financials stocks contributed the most to the fund’s total return and demonstrated the fund’s effective stock selection strategy. As an example, Ashford Hospitality Trust, a self-administered real estate investment trust (REIT) focused on investing in the hospitality industry, returned approximately 36% for the fund. The fund’s holdings of this stock benefitted from an overweight versus the index, and positively contributed to relative performance.
In contrast, the fund’s holdings of Pioneer Energy Services Corp. detracted the most from the total return of the fund. Pioneer Energy Services Corp., a company that provides drilling and production services to independent oil and gas exploration and production companies, returned approximately -39%. Though this stock performed well throughout much of 2014, sharp declines in the price of crude oil toward the end of the reporting period negatively affected returns. Within the fund, the Energy sector was the only detractor from the fund’s total return. An overweight in this sector reduced relative performance, as did the fund’s stock selection strategy for Energy stocks.
As of 10/31/14:
Statistics
Number of Holdings | 363 | |||
Weighted Average Market Cap ($ x 1,000,000) | $1,611 | |||
Price/Earnings Ratio (P/E) | 42.3 | |||
Price/Book Ratio (P/B) | 1.8 | |||
Portfolio Turnover Rate | 103% |
Sector Weightings % of Investments
Financials | 20.4% | |||
Information Technology | 18.3% | |||
Health Care | 16.0% | |||
Industrials | 13.2% | |||
Consumer Discretionary | 10.7% | |||
Energy | 6.2% | |||
Consumer Staples | 4.6% | |||
Materials | 4.4% | |||
Utilities | 2.0% | |||
Telecommunication Services | 1.3% | |||
Other | 2.9% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Take-Two Interactive Software, Inc. | 1.1% | |||
Molina Healthcare, Inc. | 1.1% | |||
DuPont Fabros Technology, Inc. | 1.0% | |||
Symetra Financial Corp. | 1.0% | |||
Penn National Gaming, Inc. | 1.0% | |||
American Equity Investment Life Holding Co. | 1.0% | |||
Sanderson Farms, Inc. | 1.0% | |||
Highwoods Properties, Inc. | 1.0% | |||
Argan, Inc. | 0.9% | |||
Emergent Biosolutions, Inc. | 0.9% | |||
Total | 10.0% |
Management 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 many 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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctssef.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) | 11.67 | % | 20.19 | % | 9.23 | % | |||||||||
Russell 2000® Index | 8.06 | % | 17.39 | % | 8.67 | % | |||||||||
Fund Category: Morningstar Small Blend | 7.66 | % | 16.61 | % | 8.49 | % |
Fund Expense Ratio4: 1.11%
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.
Performance. The fund returned 11.07% for the 12-month reporting period ended October 31, 2014, underperforming the S&P 500 Index (the index), which returned 17.27% 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. U.S. equities produced double-digit returns for the 12-month reporting period. The Federal Reserve left short-term interest rates historically low, making financing more affordable for businesses and households. In this environment, the Information Technology and Health Care sectors performed particularly well, while the Telecommunication Services and Materials sectors, which generated positive returns, underperformed by comparison.
Positioning and Strategies. Throughout the 12-month reporting period, the fund held short positions of approximately 40% of net assets on average. Given the substantial rally by stocks, these short positions detracted from the fund’s total return compared with the index, and provided the most significant reason for the performance disparity between the two.
In contrast, the fund’s allocations across market sectors generally contributed to relative performance compared with the index, particularly in the Consumer Staples and Materials sectors. For example, the fund’s long positions in the Consumer Staples sector returned approximately 22%, outperforming the approximately 14% corresponding return of the index. In addition, although the fund’s short positions in the Materials sector detracted from performance, the positive returns of the fund’s long positions within this sector outperformed those in the index, enhancing relative performance. However, not all allocations across market sectors were as favorable. The Energy sector is an example of this, with the long positions in this sector returning approximately -8%, underperforming those of the index.
From a stock selection standpoint, shares of SM Energy Co. detracted more from the fund’s total return than any other holdings. SM Energy Co. is an independent energy company that is engaged in the acquisition, exploration, development, and production of oil and gas in onshore North America, and returned approximately -37% for the fund for the reporting period. Disappointing earnings in early 2014 were a part of this negative performance, as were declining oil prices late in the reporting period.
Zebra Technologies, by comparison, contributed the most to the total return of the fund. Zebra Technologies, a company that manufactures and distributes a broad line of direct thermal and thermal transfer bar code label and receipt printers, returned approximately 50% for the fund for the 12-month reporting period. In April 2014, Zebra Technologies announced the acquisition of Motorola Solutions’ Enterprise business. This announcement, combined with an overweight to this stock, positively impacted the returns of Zebra Technologies for the fund (please note this position was sold prior to the end of the reporting period).
As of 10/31/14:
Statistics
Number of Holdings | ||||
Long Holdings | 136 | |||
Short Holdings | 68 | |||
Weighted Average Market Cap ($ x 1,000,000) | ||||
Long Holdings | $48,967 | |||
Short Holdings | $10,603 | |||
Price/Earnings Ratio (P/E) | ||||
Long Holdings | 18.2 | |||
Short Holdings | 43.9 | |||
Price/Book Ratio (P/B) | ||||
Long Holdings | 2.0 | |||
Short Holdings | 3.2 | |||
Portfolio Turnover Rate | 142% | |||
Portfolio Turnover Rate excluding short sales | 84% |
Top Equity Long Holdings
% of Net Assets1
Apple, Inc. | 2.2% | |||
The Kroger Co. | 2.1% | |||
Pfizer, Inc. | 2.1% | |||
Cardinal Health, Inc. | 2.1% | |||
Electronic Arts, Inc. | 2.1% | |||
Total | 10.6% |
Top Equity Short Holdings
% of Net Assets1
Louisiana-Pacific Corp. | 1.7% | |||
NetSuite, Inc. | 1.6% | |||
American Express Co. | 1.5% | |||
CarMax, Inc. | 1.4% | |||
Texas Capital Bancshares, Inc. | 1.3% | |||
Total | 7.5% |
Management 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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctshef.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) | 11.07 | % | 8.99 | % | 5.63 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Fund Category: Morningstar Long/Short Equity | 4.80 | % | 7.98 | % | 5.88 | % |
Fund Expense Ratios4: Net 2.48%; Gross 2.52%
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 the 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.
Performance. The fund returned 15.92% for the 12-month reporting period ended October 31, 2014, underperforming the S&P 1500 SuperComposite Financials Sector Index (the index), which the fund uses for performance comparisons. The index returned 17.21% for the reporting period.
Market Highlights. U.S. stocks produced double-digit returns for the 12-month reporting period. The Federal Reserve left short-term interest rates historically low, making financing more affordable for businesses and households. Despite heightened geopolitical tensions and an uncertain global economic outlook, the U.S. economy rebounded during the reporting period, and forecasts for stronger earnings by select companies contributed positively to market performance.
Positioning and Strategies. Decisions to over- and underweight certain sub-industries compared with the index represented one of the biggest overall detractors from the fund’s relative performance for the reporting period. However, the fund’s disciplined stock-selection strategies helped the investment advisor identify a number of stock opportunities that worked out well, although some stock selections and sub-industry weightings were less effective than others.
Ocwen Financial Corporation, a financial services holding company, detracted the most from the total return of the fund. Contributing to these results were missed earnings-per-share estimates in October 2014, as well as a portfolio of mortgage servicing rights deal between Ocwen Financial Corporation and Wells Fargo & Co. that was denied by New York regulators. Based on high cash flow, price momentum, and analyst target prices, the fund was overweight in Ocwen Financial Corporation. This weighting, combined with returns of approximately -32%, detracted from relative performance (please note this position was sold prior to the end of the reporting period). Within the fund, the Thrifts & Mortgage Finance sub-industry returned less than 1% and was the biggest detractor from the relative performance of the fund, primarily due to the overweight in Ocwen Financial Corporation.
In contrast, an overweight in shares of Wells Fargo & Co., a diversified financial services company, contributed more to the fund’s total return than any other holdings. Wells Fargo & Co. exceeded federal minimum capital levels under stress scenarios and integrated Apple Pay for its customers and merchants, both of which contributed to this stock’s return of approximately 28% for the fund. Within the fund, the Diversified Banks sub-industry contributed the most to total return. The fund was underweight Diversified Banks due to an underweight position in U.S. Bancorp, but the overweight in Wells Fargo & Co. acted as a balance and drove this sub-industry’s positive performance (please note the fund’s position in U.S. Bancorp was sold prior to the end of the reporting period).
As of 10/31/14:
Statistics
Number of Holdings | 61 | |||
Weighted Average Market Cap ($ x 1,000,000) | $81,264 | |||
Price/Earnings Ratio (P/E) | 15.6 | |||
Price/Book Ratio (P/B) | 1.3 | |||
Portfolio Turnover Rate | 75% |
Industry Weightings % of Investments
Diversified Financials | 32.9% | |||
Insurance | 25.5% | |||
Real Estate | 20.7% | |||
Banks | 19.0% | |||
Media | 1.4% | |||
Other | 0.5% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Wells Fargo & Co. | 8.5% | |||
JPMorgan Chase & Co. | 5.3% | |||
Citigroup, Inc. | 4.7% | |||
Berkshire Hathaway, Inc., Class B | 4.7% | |||
Bank of America Corp. | 4.4% | |||
Simon Property Group, Inc. | 3.7% | |||
Morgan Stanley | 3.6% | |||
The PNC Financial Services Group, Inc. | 3.4% | |||
Discover Financial Services | 2.7% | |||
SL Green Realty Corp. | 2.7% | |||
Total | 43.7% |
Management 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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsfsf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Financial Services Fundtm (7/3/00) | 15.92 | % | 13.26 | % | 4.10 | % | |||||||||
S&P 1500 SuperComposite Financial Sector Index | 17.21 | % | 13.50 | % | 1.07 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Fund Category: Morningstar Financial | 10.51 | % | 11.49 | % | 3.04 | % |
Fund Expense Ratios3: Net 0.94%; Gross 1.03%
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 the 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.
Performance. The fund returned 27.06% for the 12-month reporting period ended October 31, 2014, outperforming the Dow Jones Global Health Care Index (the index), which the fund uses for performance comparisons. The index returned 23.34% for the reporting period.
Market Highlights. Health Care stocks were some of the better performers within the broad U.S. stock market. The Affordable Care Act had a positive impact on health care enrollment and while it benefitted some sub-industries, other sub-industries were negatively affected as some companies struggled to adjust to the new regulations. Within the broad Health Care sector, biotechnology and managed health care stocks were some of the better performers, with each sub-industry producing double-digit returns of approximately 40%.
Positioning and Strategies. The fund’s disciplined stock-selection strategies helped the investment advisor identify a number of stock opportunities that worked out well, enhancing the fund’s performance versus its comparative index. Decisions to over- or underweight certain sub-industries also worked in the fund’s favor overall, while some stock selections and sub-industry weightings were less effective than others.
Gilead Sciences, Inc., a research-based pharmaceuticals company, contributed the most to the fund’s total return. The launch of a new Hepatitis C drug helped to drive this company’s performance during the 12-month reporting period, as Gilead Sciences, Inc. returned approximately 57%. Looking at overall sub-industry performance, pharmaceuticals stocks were the biggest contributors to the fund’s total return. Though the fund was underweight in pharmaceuticals, the fund’s effective stock selection worked out well and enhanced the fund’s relative performance. Within pharmaceuticals, Merck & Co., Inc. delivered a notable performance, returning approximately 33% for the fund. Merck & Co., Inc., a global health care company, benefitted from several factors, including the acquisition of Idenix Pharmaceuticals and the launch of a new drug.
However, not all of the stock selections within the fund worked out as favorably. MedAssets, Inc., a company that provides technology-enabled products and services, detracted the most from the fund’s total return. MedAssets, Inc. experienced slowing order growth and returns during the reporting period, as hospitals continue to adjust to the Affordable Care Act. As a result, the fund’s holdings of MedAssets, Inc. returned approximately -1%, causing the fund’s overweight in this stock to detract from relative performance (please note this position was sold prior to the end of the reporting period). Within the fund, the health care technology sub-industry was the only detractor from total return, as many other companies in this sector were also negatively impacted by the Affordable Care Act. The fund’s overweight in this sub-industry compared with the index detracted from relative performance.
As of 10/31/14:
Statistics
Number of Holdings | 99 | |||
Weighted Average Market Cap ($ x 1,000,000) | $99,834 | |||
Price/Earnings Ratio (P/E) | 27.1 | |||
Price/Book Ratio (P/B) | 3.8 | |||
Portfolio Turnover Rate | 57% |
Industry Weightings % of Investments
Pharmaceuticals, Biotechnology & Life Sciences | 68.4% | |||
Healthcare – Services | 27.1% | |||
Materials | 1.7% | |||
Other Investment Company | 0.4% | |||
Software & Services | 0.2% | |||
Technology Hardware & Equipment | 0.1% | |||
Other | 2.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Johnson & Johnson | 7.3% | |||
Pfizer, Inc. | 6.6% | |||
Merck & Co., Inc. | 6.3% | |||
Amgen, Inc. | 5.5% | |||
Gilead Sciences, Inc. | 5.0% | |||
AbbVie, Inc. | 5.0% | |||
Novartis AG – Reg’d | 4.4% | |||
Celgene Corp. | 4.1% | |||
Biogen Idec, Inc. | 3.7% | |||
Aetna, Inc. | 2.6% | |||
Total | 50.5% |
Management 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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctshcf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Health Care Fundtm (7/3/00) | 27.06 | % | 22.17 | % | 13.25 | % | |||||||||
Dow Jones Global Health Care Index | 23.34 | % | 18.48 | % | 10.96 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Fund Category: Morningstar Health | 32.03 | % | 23.35 | % | 13.08 | % |
Fund Expense Ratios3: Net 0.82%; Gross 0.83%
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 the 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.
Performance. The fund returned 2.20% for the 12-month reporting period ended October 31, 2014, outperforming the MSCI EAFE Index (the index), which the fund uses for performance comparisons. The index returned -0.60% for the reporting period.
Market Highlights. International equities in developed markets produced slightly negative overall returns for the 12-month reporting period. The reduction of some stimulative measures by the Federal Reserve contributed to the depreciation of many international currencies versus the U.S. dollar, generally reducing overall returns on overseas investments. Additionally, heightened geopolitical tensions in the Ukraine and the Middle East increased market volatility, as did an uncertain outlook on global economic growth.
Positioning and Strategies. Effective stock selection was the most noteworthy strategy that contributed to the fund’s outperformance. Stock selection in the United Kingdom and Switzerland was particularly strong, while stock selection in Australia and Germany detracted from the fund’s relative performance.
For example, an overweight of AstraZeneca plc, a company from the United Kingdom that researches, manufactures, and sells pharmaceutical and medical products, contributed the most to the fund’s total return. During the reporting period, AstraZeneca plc successfully avoided being taken over by a rival pharmaceuticals company. Combined with delays in the launch of a competing generic drug, this failed takeover attempt positively contributed to this stock’s performance, with the fund’s holdings of AstraZeneca plc returning approximately 43%. From a country perspective, the fund’s United Kingdom holdings returned approximately 12%, notably outperforming the index.
The selection of Compagnie Generale des Etablissements Michelin SCA stock did not work out as favorably, as the fund’s holdings of this company detracted the most from the fund’s total return. Compagnie Generale des Etablissements Michelin SCA, a manufacturer and distributor of tires, returned approximately -15%, due in part to concerns about the pace of European recovery and overall weak auto sales. Within the fund, stocks from Australia detracted the most from the fund’s total return. The fund held several stocks that the index did not, including Arrium Ltd., which contributed to this market’s poor performance. Arrium Ltd., an international diversified mining and materials company, was negatively affected by significant decreases in the price of iron ore and overall weaker commodity prices, and the fund’s holdings of this company returned approximately -72% for the 12-month reporting period (please note this position was sold prior to the end of the reporting period).
As of 10/31/14:
Statistics
Number of Holdings | 190 | |||
Weighted Average Market Cap ($ x 1,000,000) | $54,480 | |||
Price/Earnings Ratio (P/E) | 12.0 | |||
Price/Book Ratio (P/B) | 1.6 | |||
Portfolio Turnover Rate | 90% |
Sector Weightings % of Investments
Financials | 24.1% | |||
Consumer Discretionary | 13.1% | |||
Industrials | 11.4% | |||
Consumer Staples | 11.1% | |||
Health Care | 9.2% | |||
Energy | 8.9% | |||
Materials | 6.2% | |||
Utilities | 6.0% | |||
Information Technology | 4.7% | |||
Telecommunication Services | 3.8% | |||
Other | 1.5% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Total S.A. | 2.9% | |||
Unilever plc | 2.4% | |||
Royal Dutch Shell plc, A Shares | 2.4% | |||
Sumitomo Mitsui Financial Group, Inc. | 2.4% | |||
Tokyo Gas Co., Ltd. | 2.1% | |||
Allianz SE – Reg’d | 2.1% | |||
Resona Holdings, Inc. | 2.0% | |||
Banco Santander S.A. | 2.0% | |||
Swiss Life Holding AG – Reg’d | 1.9% | |||
Koninklijke Ahold N.V. | 1.9% | |||
Total | 22.1% |
Management views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1,2
Performance of Hypothetical
$10,000 Investment1,2
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsicef.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) | 2.20 | % | 8.95 | % | 1.94 | % | |||||||||
MSCI EAFE® Index (Net)4 | -0.60 | % | 6.52 | % | 0.39 | % | |||||||||
MSCI EAFE® Index (Gross)4 | -0.17 | % | 7.00 | % | 0.85 | % | |||||||||
Fund Category: Morningstar Foreign Large Blend | -0.04 | % | 6.66 | % | 0.13 | % |
Fund Expense Ratios5: Net 0.86%; Gross 1.10%
Country Weightings % of Investments
Japan | 21.7% | |||
United Kingdom | 18.8% | |||
Switzerland | 9.2% | |||
Germany | 8.4% | |||
France | 7.3% | |||
Australia | 6.3% | |||
Netherlands | 4.2% | |||
Spain | 3.8% | |||
Denmark | 3.2% | |||
Singapore | 2.8% | |||
Other Countries | 14.3% | |||
Total | 100.0% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
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 | Effective February 28, 2014, 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. | |
5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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, 2014 and held through October 31, 2014.
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 5/1/14 | at 10/31/14 | 05/1/14–10/31/14 | |||||||||||||
Schwab Core Equity Fundtm | ||||||||||||||||
Actual Return | 0.72% | $ | 1,000.00 | $ | 1,088.40 | $ | 3.79 | |||||||||
Hypothetical 5% Return | 0.72% | $ | 1,000.00 | $ | 1,021.57 | $ | 3.67 | |||||||||
Schwab Dividend Equity Fundtm | ||||||||||||||||
Actual Return | 0.89% | $ | 1,000.00 | $ | 1,060.40 | $ | 4.62 | |||||||||
Hypothetical 5% Return | 0.89% | $ | 1,000.00 | $ | 1,020.71 | $ | 4.53 | |||||||||
Schwab Large-Cap Growth Fundtm | ||||||||||||||||
Actual Return | 0.99% | $ | 1,000.00 | $ | 1,104.60 | $ | 5.25 | |||||||||
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 | $ | 1,043.20 | $ | 5.67 | |||||||||
Hypothetical 5% Return | 1.10% | $ | 1,000.00 | $ | 1,019.65 | $ | 5.60 | |||||||||
Schwab Hedged Equity Fundtm | ||||||||||||||||
Actual Return | 1.86% | $ | 1,000.00 | $ | 1,049.70 | $ | 9.61 | |||||||||
Hypothetical 5% Return | 1.86% | $ | 1,000.00 | $ | 1,015.82 | $ | 9.45 | |||||||||
Schwab Financial Services Fundtm | ||||||||||||||||
Actual Return | 0.90% | $ | 1,000.00 | $ | 1,084.30 | $ | 4.73 | |||||||||
Hypothetical 5% Return | 0.90% | $ | 1,000.00 | $ | 1,020.66 | $ | 4.58 | |||||||||
Schwab Health Care Fundtm | ||||||||||||||||
Actual Return | 0.80% | $ | 1,000.00 | $ | 1,152.00 | $ | 4.34 | |||||||||
Hypothetical 5% Return | 0.80% | $ | 1,000.00 | $ | 1,021.17 | $ | 4.08 | |||||||||
Schwab® International Core Equity Fund | ||||||||||||||||
Actual Return | 0.86% | $ | 1,000.00 | $ | 955.00 | $ | 4.24 | |||||||||
Hypothetical 5% Return | 0.86% | $ | 1,000.00 | $ | 1,020.86 | $ | 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
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 23.46 | 18.80 | 16.81 | 15.78 | 14.26 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.30 | 0.32 | 0.26 | 0.19 | 0.17 | |||||||||||||||||
Net realized and unrealized gains (losses) | 3.60 | 4.51 | 2.07 | 1.01 | 1.50 | |||||||||||||||||
Total from investment operations | 3.90 | 4.83 | 2.33 | 1.20 | 1.67 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.22 | ) | (0.17 | ) | (0.34 | ) | (0.17 | ) | (0.15 | ) | ||||||||||||
Distributions from net realized gains | (1.66 | ) | — | — | — | — | ||||||||||||||||
Total distributions | (1.88 | ) | (0.17 | ) | (0.34 | ) | (0.17 | ) | (0.15 | ) | ||||||||||||
Net asset value at end of period | 25.48 | 23.46 | 18.80 | 16.81 | 15.78 | |||||||||||||||||
Total return (%) | 17.88 | 25.89 | 13.99 | 7.60 | 11.77 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.72 | 0.72 | 0.72 | 0.73 | 0.73 | |||||||||||||||||
Gross operating expenses | 0.72 | 0.73 | 0.73 | 0.73 | 0.74 | |||||||||||||||||
Net investment income (loss) | 1.19 | 1.51 | 1.37 | 1.06 | 1.05 | |||||||||||||||||
Portfolio turnover rate | 63 | 80 | 45 | 1 | 35 | 49 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,317 | 2,247 | 1,880 | 1,719 | 1,792 |
1 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, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .9% | Common Stock | 1,799,662,828 | 2,291,904,761 | ||||||||
1 | .3% | Other Investment Companies | 30,191,923 | 30,191,923 | ||||||||
0 | .0% | Short-Term Investments | 646,991 | 646,991 | ||||||||
100 | .2% | Total Investments | 1,830,501,742 | 2,322,743,675 | ||||||||
(0 | .2%) | Other Assets and Liabilities, Net | (5,414,620 | ) | ||||||||
100 | .0% | Net Assets | 2,317,329,055 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.9% of net assets | ||||||||
Automobiles & Components 0.8% | ||||||||
Dana Holding Corp. | 938,309 | 19,197,802 | ||||||
Banks 6.9% | ||||||||
Bank of America Corp. | 1,207,858 | 20,726,843 | ||||||
Citigroup, Inc. | 460,572 | 24,654,419 | ||||||
JPMorgan Chase & Co. | 216,140 | 13,072,147 | ||||||
The PNC Financial Services Group, Inc. | 547,400 | 47,289,886 | ||||||
Wells Fargo & Co. | 1,030,670 | 54,718,271 | ||||||
160,461,566 | ||||||||
Capital Goods 7.7% | ||||||||
Caterpillar, Inc. | 300,500 | 30,473,705 | ||||||
Emerson Electric Co. | 94,100 | 6,028,046 | ||||||
General Dynamics Corp. | 124,300 | 17,372,168 | ||||||
Huntington Ingalls Industries, Inc. | 100,393 | 10,623,588 | ||||||
IDEX Corp. | 154,500 | 11,573,595 | ||||||
Masco Corp. | 284,687 | 6,283,042 | ||||||
Northrop Grumman Corp. | 310,800 | 42,877,968 | ||||||
PACCAR, Inc. | 154,400 | 10,085,408 | ||||||
Parker-Hannifin Corp. | 54,100 | 6,872,323 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 114,838 | 4,517,727 | ||||||
Stanley Black & Decker, Inc. | 71,330 | 6,679,341 | ||||||
United Rentals, Inc. * | 219,085 | 24,112,495 | ||||||
177,499,406 | ||||||||
Commercial & Professional Supplies 1.8% | ||||||||
IHS, Inc., Class A * | 16,559 | 2,169,726 | ||||||
Manpowergroup, Inc. | 220,564 | 14,722,647 | ||||||
Pitney Bowes, Inc. | 54,678 | 1,352,734 | ||||||
R.R. Donnelley & Sons Co. | 1,190,000 | 20,765,500 | ||||||
Waste Management, Inc. | 36,812 | 1,799,738 | ||||||
40,810,345 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Hanesbrands, Inc. | 89,800 | 9,483,778 | ||||||
Consumer Services 2.2% | ||||||||
MGM Resorts International * | 265,436 | 6,171,387 | ||||||
Wyndham Worldwide Corp. | 204,000 | 15,844,680 | ||||||
Yum! Brands, Inc. | 387,856 | 27,859,696 | ||||||
49,875,763 | ||||||||
Diversified Financials 2.5% | ||||||||
Berkshire Hathaway, Inc., Class B * | 42,509 | 5,958,061 | ||||||
Capital One Financial Corp. | 380,400 | 31,485,708 | ||||||
Lazard Ltd., Class A | 406,524 | 20,005,046 | ||||||
57,448,815 | ||||||||
Energy 9.4% | ||||||||
Baker Hughes, Inc. | 257,000 | 13,610,720 | ||||||
Chesapeake Energy Corp. | 70,000 | 1,552,600 | ||||||
Chevron Corp. | 300,726 | 36,072,084 | ||||||
ConocoPhillips | 554,923 | 40,037,694 | ||||||
EOG Resources, Inc. | 259,505 | 24,665,950 | ||||||
Exxon Mobil Corp. | 145,500 | 14,071,305 | ||||||
Halliburton Co. | 90,033 | 4,964,420 | ||||||
Hess Corp. | 67,300 | 5,707,713 | ||||||
National Oilwell Varco, Inc. | 30,056 | 2,183,268 | ||||||
Occidental Petroleum Corp. | 598,290 | 53,205,930 | ||||||
Phillips 66 | 62,110 | 4,875,635 | ||||||
SM Energy Co. | 232,600 | 13,095,380 | ||||||
Valero Energy Corp. | 94,500 | 4,733,505 | ||||||
218,776,204 | ||||||||
Food & Staples Retailing 1.4% | ||||||||
The Kroger Co. | 577,943 | 32,197,205 | ||||||
Food, Beverage & Tobacco 6.5% | ||||||||
Altria Group, Inc. | 450,692 | 21,786,451 | ||||||
Archer-Daniels-Midland Co. | 1,074,689 | 50,510,383 | ||||||
Dr Pepper Snapple Group, Inc. | 120,117 | 8,318,102 | ||||||
PepsiCo, Inc. | 606,320 | 58,309,794 | ||||||
Pilgrim’s Pride Corp. * | 382,267 | 10,860,206 | ||||||
149,784,936 | ||||||||
Health Care Equipment & Services 4.2% | ||||||||
C.R. Bard, Inc. | 95,800 | 15,708,326 | ||||||
Cardinal Health, Inc. | 581,613 | 45,644,988 | ||||||
Centene Corp. * | 90,033 | 8,343,358 | ||||||
McKesson Corp. | 134,926 | 27,445,298 | ||||||
97,141,970 |
26 See financial notes
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Household & Personal Products 1.2% | ||||||||
Energizer Holdings, Inc. | 186,800 | 22,911,020 | ||||||
Kimberly-Clark Corp. | 41,310 | 4,720,494 | ||||||
27,631,514 | ||||||||
Insurance 3.2% | ||||||||
AmTrust Financial Services, Inc. (a) | 167,234 | 7,503,789 | ||||||
Axis Capital Holdings Ltd. | 142,045 | 6,838,046 | ||||||
CNO Financial Group, Inc. | 405,229 | 7,346,802 | ||||||
Genworth Financial, Inc., Class A * | 761,861 | 10,658,435 | ||||||
MetLife, Inc. | 245,440 | 13,312,666 | ||||||
Reinsurance Group of America, Inc. | 229,825 | 19,362,756 | ||||||
The Allstate Corp. | 58,400 | 3,787,240 | ||||||
The Travelers Cos., Inc. | 32,387 | 3,264,610 | ||||||
W. R. Berkley Corp. | 48,300 | 2,489,382 | ||||||
74,563,726 | ||||||||
Materials 3.4% | ||||||||
Ashland, Inc. | 120,100 | 12,979,207 | ||||||
Avery Dennison Corp. | 169,700 | 7,950,445 | ||||||
PPG Industries, Inc. | 256,700 | 52,287,223 | ||||||
The Sherwin-Williams Co. | 20,763 | 4,766,354 | ||||||
77,983,229 | ||||||||
Media 1.5% | ||||||||
Comcast Corp., Class A | 455,000 | 25,184,250 | ||||||
Live Nation Entertainment, Inc. * | 170,924 | 4,444,024 | ||||||
Starz, Class A * | 153,742 | 4,750,628 | ||||||
34,378,902 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 12.0% | ||||||||
AbbVie, Inc. | 220,000 | 13,961,200 | ||||||
Amgen, Inc. | 285,552 | 46,310,823 | ||||||
Biogen Idec, Inc. * | 16,175 | 5,193,469 | ||||||
Celgene Corp. * | 168,090 | 18,000,758 | ||||||
Gilead Sciences, Inc. * | 388,554 | 43,518,048 | ||||||
Johnson & Johnson | 424,398 | 45,741,616 | ||||||
Merck & Co., Inc. | 560,858 | 32,496,113 | ||||||
Pfizer, Inc. | 2,420,907 | 72,506,165 | ||||||
277,728,192 | ||||||||
Real Estate 1.1% | ||||||||
CBRE Group, Inc., Class A * | 140,700 | 4,502,400 | ||||||
Kilroy Realty Corp. | 38,941 | 2,637,864 | ||||||
RLJ Lodging Trust | 137,200 | 4,420,584 | ||||||
Simon Property Group, Inc. | 43,600 | 7,813,556 | ||||||
SL Green Realty Corp. | 62,856 | 7,272,439 | ||||||
26,646,843 | ||||||||
Retailing 4.3% | ||||||||
Best Buy Co., Inc. | 73,992 | 2,526,087 | ||||||
Foot Locker, Inc. | 88,506 | 4,957,221 | ||||||
Liberty Interactive Corp., Class A * | 511,400 | 13,367,996 | ||||||
Liberty Ventures, Series A * | 72,705 | 2,551,946 | ||||||
Lowe’s Cos., Inc. | 513,546 | 29,374,831 | ||||||
Macy’s, Inc. | 591,500 | 34,200,530 | ||||||
The Gap, Inc. | 120,446 | 4,563,699 | ||||||
The Home Depot, Inc. | 88,643 | 8,644,465 | ||||||
100,186,775 | ||||||||
Semiconductors & Semiconductor Equipment 0.9% | ||||||||
Intel Corp. | 607,300 | 20,654,273 | ||||||
Software & Services 10.3% | ||||||||
AOL, Inc. * | 148,314 | 6,456,109 | ||||||
Broadridge Financial Solutions, Inc. | 105,687 | 4,642,830 | ||||||
Computer Sciences Corp. | 749,606 | 45,276,202 | ||||||
Electronic Arts, Inc. * | 272,802 | 11,176,698 | ||||||
Google, Inc., Class A * | 24,223 | 13,755,515 | ||||||
Google, Inc., Class C * | 16,700 | 9,336,636 | ||||||
Intuit, Inc. | 121,100 | 10,658,011 | ||||||
Microsoft Corp. | 756,800 | 35,531,760 | ||||||
Oracle Corp. | 1,169,900 | 45,684,595 | ||||||
Synopsys, Inc. * | 474,942 | 19,463,123 | ||||||
Xerox Corp. | 2,782,200 | 36,947,616 | ||||||
238,929,095 | ||||||||
Technology Hardware & Equipment 7.4% | ||||||||
Apple, Inc. | 774,900 | 83,689,200 | ||||||
Brocade Communications Systems, Inc. | 237,800 | 2,551,594 | ||||||
Corning, Inc. | 214,735 | 4,387,036 | ||||||
Hewlett-Packard Co. | 1,066,851 | 38,278,614 | ||||||
NetApp, Inc. | 110,387 | 4,724,564 | ||||||
SanDisk Corp. | 118,800 | 11,183,832 | ||||||
Western Digital Corp. | 265,300 | 26,097,561 | ||||||
170,912,401 | ||||||||
Telecommunication Services 1.1% | ||||||||
Frontier Communications Corp. | 370,700 | 2,424,378 | ||||||
Verizon Communications, Inc. | 465,714 | 23,402,128 | ||||||
25,826,506 | ||||||||
Transportation 3.1% | ||||||||
Delta Air Lines, Inc. | 400,800 | 16,124,184 | ||||||
FedEx Corp. | 115,200 | 19,284,480 | ||||||
Southwest Airlines Co. | 1,089,700 | 37,572,856 | ||||||
72,981,520 | ||||||||
Utilities 5.6% | ||||||||
AES Corp. | 1,286,409 | 18,099,774 | ||||||
American Electric Power Co., Inc. | 399,917 | 23,331,158 | ||||||
Entergy Corp. | 626,888 | 52,671,130 | ||||||
NRG Energy, Inc. | 853,416 | 25,585,412 | ||||||
Public Service Enterprise Group, Inc. | 269,100 | 11,116,521 | ||||||
130,803,995 | ||||||||
Total Common Stock | ||||||||
(Cost $1,799,662,828) | 2,291,904,761 | |||||||
See financial notes 27
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 1.3% of net assets | ||||||||
Money Market Fund 1.0% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (d) | 23,042,683 | 23,042,683 | ||||||
Securities Lending Collateral 0.3% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (d) | 7,149,240 | 7,149,240 | ||||||
Total Other Investment Companies | ||||||||
(Cost $30,191,923) | 30,191,923 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.0% of net assets | ||||||||
U.S. Treasury Obligations 0.0% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (b)(c) | 75,000 | 75,000 | ||||||
0.01%, 12/18/14 (b)(c) | 572,000 | 571,991 | ||||||
Total Short-Term Investments | ||||||||
(Cost $646,991) | 646,991 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $1,830,829,609 and the unrealized appreciation and depreciation were $509,940,490 and ($18,026,424), respectively, with a net unrealized appreciation of $491,914,066.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $7,128,587. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. | |
(d) | The rate shown is the 7-day yield. |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 138 | 13,878,660 | 281,245 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $2,291,904,761 | $— | $— | $2,291,904,761 | ||||||||||||
Other Investment Companies1 | 30,191,923 | — | — | 30,191,923 | ||||||||||||
Short-Term Investments1 | — | 646,991 | — | 646,991 | ||||||||||||
Total | $2,322,096,684 | $646,991 | $— | $2,322,743,675 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $281,245 | $— | $— | $281,245 |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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, 2014.
28 See financial notes
Table of Contents
Schwab Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $1,823,352,502) including securities on loan of $7,128,587 | $2,315,594,435 | |||||
Collateral invested for securities on loan, at value (cost $7,149,240) | + | 7,149,240 | ||||
Total investments, at value (cost $1,830,501,742) | 2,322,743,675 | |||||
Receivables: | ||||||
Investments sold | 887,609 | |||||
Dividends | 2,008,334 | |||||
Fund shares sold | 1,348,502 | |||||
Variation margin on futures contracts | 157,320 | |||||
Income from securities on loan | 63,674 | |||||
Prepaid expenses | + | 47,242 | ||||
Total assets | 2,327,256,356 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 7,149,240 | |||||
Payables: | ||||||
Investments bought | 1,127,304 | |||||
Investment adviser and administrator fees | 116,995 | |||||
Fund shares redeemed | 1,443,281 | |||||
Accrued expenses | + | 90,481 | ||||
Total liabilities | 9,927,301 | |||||
Net Assets | ||||||
Total assets | 2,327,256,356 | |||||
Total liabilities | − | 9,927,301 | ||||
Net assets | $2,317,329,055 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,514,987,721 | |||||
Net investment income not yet distributed | 24,336,689 | |||||
Net realized capital gains | 285,481,467 | |||||
Net unrealized capital appreciation | 492,523,178 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$2,317,329,055 | 90,934,172 | $25.48 |
See financial notes 29
Table of Contents
Schwab Core Equity Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $3,390) | $43,672,232 | |||||
Interest | 456 | |||||
Securities on loan | + | 68,128 | ||||
Total investment income | 43,740,816 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 10,745,276 | |||||
Shareholder service fees | 5,300,458 | |||||
Shareholder reports | 140,811 | |||||
Portfolio accounting fees | 82,656 | |||||
Transfer agent fees | 62,601 | |||||
Custodian fees | 49,577 | |||||
Professional fees | 39,159 | |||||
Registration fees | 38,427 | |||||
Independent trustees’ fees | 17,097 | |||||
Interest expense | 508 | |||||
Other expenses | + | 44,477 | ||||
Total expenses | 16,521,047 | |||||
Expense reduction by CSIM and its affiliates | − | 62,601 | ||||
Net expenses | − | 16,458,446 | ||||
Net investment income | 27,282,370 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 319,117,829 | |||||
Net realized gains on futures contracts | + | 2,649,392 | ||||
Net realized gains | 321,767,221 | |||||
Net change in unrealized appreciation (depreciation) on investments | 31,913,670 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | 117,869 | ||||
Net change in unrealized appreciation (depreciation) | + | 32,031,539 | ||||
Net realized and unrealized gains | 353,798,760 | |||||
Increase in net assets resulting from operations | $381,081,130 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $27,282,370 | $31,158,073 | ||||||||
Net realized gains | 321,767,221 | 232,627,413 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 32,031,539 | 209,621,022 | |||||||
Increase in net assets from operations | 381,081,130 | 473,406,508 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (21,200,511 | ) | (16,475,044 | ) | ||||||
Distributions from net realized gains | + | (157,596,466 | ) | — | ||||||
Total distributions | ($178,796,977 | ) | ($16,475,044 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 10,594,267 | $247,389,415 | 9,345,311 | $194,423,482 | ||||||||||||||
Shares reinvested | 4,044,873 | 89,432,146 | 445,622 | 8,359,860 | ||||||||||||||
Shares redeemed | + | (19,480,472 | ) | (468,899,959 | ) | (13,994,307 | ) | (292,667,176 | ) | |||||||||
Net transactions in fund shares | (4,841,332 | ) | ($132,078,398 | ) | (4,203,374 | ) | ($89,883,834 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 95,775,504 | $2,247,123,300 | 99,978,878 | $1,880,075,670 | ||||||||||||||
Total increase or decrease | + | (4,841,332 | ) | 70,205,755 | (4,203,374 | ) | 367,047,630 | |||||||||||
End of period | 90,934,172 | $2,317,329,055 | 95,775,504 | $2,247,123,300 | ||||||||||||||
Net investment income not yet distributed | $24,336,689 | $18,530,775 |
See financial notes 31
Table of Contents
Schwab Dividend Equity Fund™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 18.22 | 14.52 | 13.15 | 12.08 | 10.94 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.27 | 0.32 | 0.27 | 0.23 | 0.21 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.16 | 3.70 | 1.38 | 1.06 | 1.14 | |||||||||||||||||
Total from investment operations | 2.43 | 4.02 | 1.65 | 1.29 | 1.35 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.29 | ) | (0.32 | ) | (0.28 | ) | (0.22 | ) | (0.21 | ) | ||||||||||||
Distributions from net realized gains | (1.19 | ) | — | — | — | — | ||||||||||||||||
Total distributions | (1.48 | ) | (0.32 | ) | (0.28 | ) | (0.22 | ) | (0.21 | ) | ||||||||||||
Net asset value at end of period | 19.17 | 18.22 | 14.52 | 13.15 | 12.08 | |||||||||||||||||
Total return (%) | 14.26 | 27.99 | 12.65 | 10.73 | 12.42 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.89 | 0.89 | 0.89 | 0.89 | 0.89 | |||||||||||||||||
Gross operating expenses | 0.89 | 0.89 | 0.89 | 0.89 | 0.89 | |||||||||||||||||
Net investment income (loss) | 1.47 | 1.97 | 1.89 | 1.77 | 1.74 | |||||||||||||||||
Portfolio turnover rate | 72 | 64 | 55 | 31 | 37 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,053 | 1,804 | 1,390 | 1,325 | 1,322 |
32 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .9% | Common Stock | 1,687,697,976 | 2,029,488,091 | ||||||||
0 | .8% | Short-Term Investments | 17,302,900 | 17,302,900 | ||||||||
99 | .7% | Total Investments | 1,705,000,876 | 2,046,790,991 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 6,439,936 | |||||||||
100 | .0% | Net Assets | 2,053,230,927 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.9% of net assets | ||||||||
Automobiles & Components 1.3% | ||||||||
Dana Holding Corp. | 335,912 | 6,872,760 | ||||||
General Motors Co. | 609,781 | 19,147,123 | ||||||
26,019,883 | ||||||||
Banks 11.9% | ||||||||
Bank of America Corp. | 1,704,200 | 29,244,072 | ||||||
Citigroup, Inc. | 1,198,560 | 64,158,917 | ||||||
Fifth Third Bancorp | 106,000 | 2,118,940 | ||||||
First Niagara Financial Group, Inc. | 387,000 | 2,898,630 | ||||||
Huntington Bancshares, Inc. | 430,000 | 4,261,300 | ||||||
JPMorgan Chase & Co. | 582,241 | 35,213,935 | ||||||
Regions Financial Corp. | 376,400 | 3,737,652 | ||||||
The PNC Financial Services Group, Inc. | 461,400 | 39,860,346 | ||||||
Wells Fargo & Co. | 1,180,400 | 62,667,436 | ||||||
244,161,228 | ||||||||
Capital Goods 6.5% | ||||||||
3M Co. | 81,400 | 12,516,878 | ||||||
Caterpillar, Inc. | 253,725 | 25,730,252 | ||||||
Emerson Electric Co. | 329,700 | 21,120,582 | ||||||
General Electric Co. | 357,727 | 9,232,934 | ||||||
Huntington Ingalls Industries, Inc. | 61,235 | 6,479,888 | ||||||
IDEX Corp. | 32,600 | 2,442,066 | ||||||
Illinois Tool Works, Inc. | 40,955 | 3,728,953 | ||||||
Lockheed Martin Corp. | 11,391 | 2,170,783 | ||||||
Northrop Grumman Corp. | 217,200 | 29,964,912 | ||||||
Parker-Hannifin Corp. | 78,900 | 10,022,667 | ||||||
Raytheon Co. | 39,061 | 4,057,656 | ||||||
Stanley Black & Decker, Inc. | 48,606 | 4,551,466 | ||||||
United Rentals, Inc. * | 20,366 | 2,241,482 | ||||||
134,260,519 | ||||||||
Commercial & Professional Supplies 1.7% | ||||||||
KAR Auction Services, Inc. | 47,300 | 1,436,028 | ||||||
Manpowergroup, Inc. | 74,209 | 4,953,451 | ||||||
Pitney Bowes, Inc. | 349,800 | 8,654,052 | ||||||
R.R. Donnelley & Sons Co. | 1,186,316 | 20,701,214 | ||||||
35,744,745 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Whirlpool Corp. | 35,808 | 6,160,766 | ||||||
Consumer Services 2.3% | ||||||||
H&R Block, Inc. | 404,688 | 13,075,469 | ||||||
Penn National Gaming, Inc. * | 141,000 | 1,845,690 | ||||||
Yum! Brands, Inc. | 435,879 | 31,309,189 | ||||||
46,230,348 | ||||||||
Diversified Financials 4.8% | ||||||||
Berkshire Hathaway, Inc., Class B * | 67,417 | 9,449,167 | ||||||
Capital One Financial Corp. | 85,991 | 7,117,475 | ||||||
Interactive Brokers Group, Inc., Class A | 195,000 | 5,034,900 | ||||||
Lazard Ltd., Class A | 612,908 | 30,161,202 | ||||||
Morgan Stanley | 1,303,720 | 45,565,014 | ||||||
The NASDAQ OMX Group, Inc. | 14,000 | 605,640 | ||||||
Voya Financial, Inc. | 39,400 | 1,546,450 | ||||||
99,479,848 | ||||||||
Energy 13.4% | ||||||||
Baker Hughes, Inc. | 127,300 | 6,741,808 | ||||||
Chesapeake Energy Corp. | 331,198 | 7,345,972 | ||||||
Chevron Corp. | 376,315 | 45,138,984 | ||||||
ConocoPhillips | 703,270 | 50,740,930 | ||||||
Devon Energy Corp. | 115,400 | 6,924,000 | ||||||
EOG Resources, Inc. | 276,510 | 26,282,276 | ||||||
Exxon Mobil Corp. | 471,144 | 45,564,336 | ||||||
Marathon Oil Corp. | 320,700 | 11,352,780 | ||||||
Murphy Oil Corp. | 125,139 | 6,681,171 | ||||||
Nabors Industries Ltd. | 405,453 | 7,237,336 | ||||||
National Oilwell Varco, Inc. | 51,761 | 3,759,919 | ||||||
Occidental Petroleum Corp. | 447,456 | 39,792,262 | ||||||
SM Energy Co. | 58,000 | 3,265,400 | ||||||
Valero Energy Corp. | 296,600 | 14,856,694 | ||||||
275,683,868 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
The Kroger Co. | 253,959 | 14,148,056 | ||||||
Food, Beverage & Tobacco 4.1% | ||||||||
Altria Group, Inc. | 86,937 | 4,202,534 | ||||||
Archer-Daniels-Midland Co. | 905,184 | 42,543,648 | ||||||
Dr Pepper Snapple Group, Inc. | 133,635 | 9,254,224 | ||||||
PepsiCo, Inc. | 194,500 | 18,705,065 | ||||||
Pilgrim’s Pride Corp. * | 316,458 | 8,990,572 | ||||||
83,696,043 |
See financial notes 33
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Health Care Equipment & Services 4.4% | ||||||||
Aetna, Inc. | 210,600 | 17,376,606 | ||||||
Becton, Dickinson & Co. | 22,133 | 2,848,517 | ||||||
C.R. Bard, Inc. | 55,800 | 9,149,526 | ||||||
Cardinal Health, Inc. | 582,435 | 45,709,499 | ||||||
Centene Corp. * | 52,125 | 4,830,424 | ||||||
McKesson Corp. | 33,700 | 6,854,917 | ||||||
Stryker Corp. | 30,436 | 2,664,063 | ||||||
89,433,552 | ||||||||
Household & Personal Products 0.6% | ||||||||
Energizer Holdings, Inc. | 86,441 | 10,601,989 | ||||||
The Procter & Gamble Co. | 17,496 | 1,526,876 | ||||||
12,128,865 | ||||||||
Insurance 6.4% | ||||||||
AmTrust Financial Services, Inc. | 117,628 | 5,277,968 | ||||||
Aspen Insurance Holdings Ltd. | 104,600 | 4,563,698 | ||||||
Assurant, Inc. | 80,900 | 5,518,998 | ||||||
Axis Capital Holdings Ltd. | 116,000 | 5,584,240 | ||||||
CNO Financial Group, Inc. | 469,310 | 8,508,590 | ||||||
Genworth Financial, Inc., Class A * | 817,299 | 11,434,013 | ||||||
MetLife, Inc. | 327,810 | 17,780,414 | ||||||
Old Republic International Corp. | 905,100 | 13,368,327 | ||||||
Prudential Financial, Inc. | 274,800 | 24,330,792 | ||||||
Reinsurance Group of America, Inc. | 242,483 | 20,429,193 | ||||||
The Hanover Insurance Group, Inc. | 14,000 | 937,160 | ||||||
The Travelers Cos., Inc. | 117,207 | 11,814,466 | ||||||
Unum Group | 30,800 | 1,030,568 | ||||||
130,578,427 | ||||||||
Materials 2.3% | ||||||||
Compass Minerals International, Inc. | 41,295 | 3,538,156 | ||||||
Huntsman Corp. | 69,900 | 1,705,560 | ||||||
PPG Industries, Inc. | 101,237 | 20,620,964 | ||||||
Steel Dynamics, Inc. | 817,858 | 18,818,913 | ||||||
United States Steel Corp. | 56,429 | 2,259,417 | ||||||
46,943,010 | ||||||||
Media 1.2% | ||||||||
John Wiley & Sons, Inc., Class A | 126,606 | 7,392,524 | ||||||
Live Nation Entertainment, Inc. * | 373,586 | 9,713,236 | ||||||
The Interpublic Group of Cos., Inc. | 356,499 | 6,912,516 | ||||||
24,018,276 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.7% | ||||||||
AbbVie, Inc. | 44,770 | 2,841,104 | ||||||
Amgen, Inc. | 38,000 | 6,162,840 | ||||||
Gilead Sciences, Inc. * | 96,818 | 10,843,616 | ||||||
Johnson & Johnson | 356,500 | 38,423,570 | ||||||
Merck & Co., Inc. | 1,124,891 | 65,176,185 | ||||||
Pfizer, Inc. | 2,507,443 | 75,097,918 | ||||||
198,545,233 | ||||||||
Real Estate 4.7% | ||||||||
Brandywine Realty Trust | 325,300 | 5,019,379 | ||||||
Duke Realty Corp. | 1,635,831 | 31,015,356 | ||||||
Equity Lifestyle Properties, Inc. | 175,148 | 8,599,767 | ||||||
Kilroy Rlty Corp. | 112,898 | 7,647,710 | ||||||
Retail Properties of America, Inc., Class A | 597,000 | 9,366,930 | ||||||
RLJ Lodging Trust | 142,000 | 4,575,240 | ||||||
Simon Property Group, Inc. | 27,300 | 4,892,433 | ||||||
SL Green Realty Corp. | 184,948 | 21,398,484 | ||||||
UDR, Inc. | 102,692 | 3,104,379 | ||||||
Vornado Realty Trust | 12,626 | 1,382,294 | ||||||
97,001,972 | ||||||||
Retailing 1.7% | ||||||||
Best Buy Co., Inc. | 290,450 | 9,915,963 | ||||||
Macy’s, Inc. | 402,651 | 23,281,281 | ||||||
The Gap, Inc. | 60,275 | 2,283,820 | ||||||
35,481,064 | ||||||||
Semiconductors & Semiconductor Equipment 1.4% | ||||||||
Intel Corp. | 841,990 | 28,636,080 | ||||||
Software & Services 3.7% | ||||||||
Broadridge Financial Solutions, Inc. | 23,665 | 1,039,604 | ||||||
Computer Sciences Corp. | 605,835 | 36,592,434 | ||||||
Electronic Arts, Inc. * | 212,795 | 8,718,211 | ||||||
Intuit, Inc. | 35,680 | 3,140,197 | ||||||
Leidos Holdings, Inc. | 78,255 | 2,861,785 | ||||||
Microsoft Corp. | 196,501 | 9,225,722 | ||||||
Oracle Corp. | 243,600 | 9,512,580 | ||||||
Xerox Corp. | 290,900 | 3,863,152 | ||||||
74,953,685 | ||||||||
Technology Hardware & Equipment 4.2% | ||||||||
Apple, Inc. | 117,900 | 12,733,200 | ||||||
Corning, Inc. | 302,242 | 6,174,804 | ||||||
Hewlett-Packard Co. | 1,076,400 | 38,621,232 | ||||||
NetApp, Inc. | 389,109 | 16,653,865 | ||||||
SanDisk Corp. | 71,900 | 6,768,666 | ||||||
Western Digital Corp. | 62,642 | 6,162,094 | ||||||
87,113,861 | ||||||||
Telecommunication Services 1.9% | ||||||||
AT&T, Inc. | 549,800 | 19,155,032 | ||||||
Frontier Communications Corp. | 2,940,000 | 19,227,600 | ||||||
38,382,632 | ||||||||
Transportation 2.2% | ||||||||
Alaska Air Group, Inc. | 198,800 | 10,582,124 | ||||||
Delta Air Lines, Inc. | 239,100 | 9,618,993 | ||||||
Southwest Airlines Co. | 749,600 | 25,846,208 | ||||||
46,047,325 |
34 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 7.5% | ||||||||
AES Corp. | 1,050,600 | 14,781,942 | ||||||
American Electric Power Co., Inc. | 514,374 | 30,008,579 | ||||||
DTE Energy Co. | 199,452 | 16,386,976 | ||||||
Entergy Corp. | 529,231 | 44,465,989 | ||||||
NRG Energy, Inc. | 695,512 | 20,851,450 | ||||||
Public Service Enterprise Group, Inc. | 556,800 | 23,001,408 | ||||||
UGI Corp. | 136,441 | 5,142,461 | ||||||
154,638,805 | ||||||||
Total Common Stock | ||||||||
(Cost $1,687,697,976) | 2,029,488,091 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.8% of net assets | ||||||||
Time Deposit 0.8% | ||||||||
DNB | ||||||||
0.03%, 11/03/14 | 16,756,909 | 16,756,909 | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/18/14 (a)(b) | 546,000 | 545,991 | ||||||
Total Short-Term Investments | ||||||||
(Cost $17,302,900) | 17,302,900 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $1,704,662,205 and the unrealized appreciation and depreciation were $358,755,537 and ($16,626,751), respectively, with a net unrealized appreciation of $342,128,786.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 98 | 9,855,860 | 203,408 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $2,029,488,091 | $— | $— | $2,029,488,091 | ||||||||||||
Short-Term Investments1 | — | 17,302,900 | — | 17,302,900 | ||||||||||||
Total | $2,029,488,091 | $17,302,900 | $— | $2,046,790,991 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $203,408 | $— | $— | $203,408 |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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, 2014.
See financial notes 35
Table of Contents
Schwab Dividend Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $1,705,000,876) | $2,046,790,991 | |||||
Receivables: | ||||||
Investments sold | 4,014,800 | |||||
Fund shares sold | 2,031,037 | |||||
Dividends | 1,901,474 | |||||
Variation margin on futures contracts | 111,720 | |||||
Interest | 14 | |||||
Prepaid expenses | + | 39,062 | ||||
Total assets | 2,054,889,098 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 136,570 | |||||
Shareholder service fees | 57,058 | |||||
Fund shares redeemed | 1,346,870 | |||||
Accrued expenses | + | 117,673 | ||||
Total liabilities | 1,658,171 | |||||
Net Assets | ||||||
Total assets | 2,054,889,098 | |||||
Total liabilities | − | 1,658,171 | ||||
Net assets | $2,053,230,927 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,438,762,329 | |||||
Net realized capital gains | 272,475,075 | |||||
Net unrealized capital appreciation | 341,993,523 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$2,053,230,927 | 107,124,258 | $19.17 |
36 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends | $45,716,137 | |||||
Interest | + | 6,092 | ||||
Total investment income | 45,722,229 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 12,012,395 | |||||
Shareholder service fees | 4,747,485 | |||||
Shareholder reports | 125,588 | |||||
Portfolio accounting fees | 78,191 | |||||
Registration fees | 61,347 | |||||
Custodian fees | 41,610 | |||||
Professional fees | 41,180 | |||||
Transfer agent fees | 38,016 | |||||
Independent trustees’ fees | 15,321 | |||||
Other expenses | + | 36,575 | ||||
Total expenses | 17,197,708 | |||||
Expense reduction by CSIM and its affiliates | − | 38,016 | ||||
Net expenses | − | 17,159,692 | ||||
Net investment income | 28,562,537 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 271,295,509 | |||||
Net realized gains on futures contracts | + | 1,853,082 | ||||
Net realized gains | 273,148,591 | |||||
Net change in unrealized appreciation (depreciation) on investments | (44,947,284 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | (141,498 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (45,088,782 | ) | |||
Net realized and unrealized gains | 228,059,809 | |||||
Increase in net assets resulting from operations | $256,622,346 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $28,562,537 | $31,081,945 | ||||||||
Net realized gains | 273,148,591 | 183,794,300 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (45,088,782 | ) | 169,340,491 | ||||||
Increase in net assets from operations | 256,622,346 | 384,216,736 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (30,034,449 | ) | (30,254,415 | ) | ||||||
Distributions from net realized gains | + | (118,279,747 | ) | — | ||||||
Total distributions | ($148,314,196 | ) | ($30,254,415 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 17,591,274 | $317,805,473 | 20,146,686 | $334,691,092 | ||||||||||||||
Shares reinvested | 5,046,536 | 87,839,410 | 1,039,729 | 16,530,353 | ||||||||||||||
Shares redeemed | + | (14,499,226 | ) | (264,363,089 | ) | (17,942,195 | ) | (291,824,449 | ) | |||||||||
Net transactions in fund shares | 8,138,584 | $141,281,794 | 3,244,220 | $59,396,996 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 98,985,674 | $1,803,640,983 | 95,741,454 | $1,390,281,666 | ||||||||||||||
Total increase | + | 8,138,584 | 249,589,944 | 3,244,220 | 413,359,317 | |||||||||||||
End of period | 107,124,258 | $2,053,230,927 | 98,985,674 | $1,803,640,983 | ||||||||||||||
Net investment income not yet distributed | $— | $1,659,809 |
38 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.66 | 12.48 | 11.18 | 10.48 | 9.10 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.11 | 0.14 | 0.07 | 0.07 | 0.05 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.70 | 3.17 | 1.29 | 0.69 | 1.39 | |||||||||||||||||
Total from investment operations | 2.81 | 3.31 | 1.36 | 0.76 | 1.44 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.09 | ) | (0.13 | ) | (0.06 | ) | (0.06 | ) | (0.06 | ) | ||||||||||||
Net asset value at end of period | 18.38 | 15.66 | 12.48 | 11.18 | 10.48 | |||||||||||||||||
Total return (%) | 18.06 | 26.76 | 12.18 | 7.25 | 15.83 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.99 | 0.99 | 0.99 | 0.99 | 1.00 | 1 | ||||||||||||||||
Gross operating expenses | 1.04 | 1.05 | 1.05 | 1.05 | 1.04 | |||||||||||||||||
Net investment income (loss) | 0.60 | 1.00 | 0.53 | 0.56 | 0.39 | |||||||||||||||||
Portfolio turnover rate | 82 | 87 | 79 | 62 | 57 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 256 | 253 | 217 | 213 | 219 |
1 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, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .4% | Common Stock | 205,644,055 | 254,506,341 | ||||||||
0 | .4% | Short-Term Investments | 1,055,063 | 1,055,063 | ||||||||
99 | .8% | Total Investments | 206,699,118 | 255,561,404 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 416,908 | |||||||||
100 | .0% | Net Assets | 255,978,312 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.4% of net assets | ||||||||
Automobiles & Components 2.3% | ||||||||
Dana Holding Corp. | 176,737 | 3,616,039 | ||||||
Delphi Automotive plc | 26,900 | 1,855,562 | ||||||
General Motors Co. | 17,000 | 533,800 | ||||||
6,005,401 | ||||||||
Banks 1.2% | ||||||||
Citigroup, Inc. | 55,043 | 2,946,452 | ||||||
Capital Goods 7.0% | ||||||||
Caterpillar, Inc. | 27,800 | 2,819,198 | ||||||
Emerson Electric Co. | 11,500 | 736,690 | ||||||
Exelis, Inc. | 3,478 | 62,082 | ||||||
Huntington Ingalls Industries, Inc. | 32,893 | 3,480,737 | ||||||
IDEX Corp. | 6,700 | 501,897 | ||||||
Lockheed Martin Corp. | 2,400 | 457,368 | ||||||
Masco Corp. | 142,800 | 3,151,596 | ||||||
Raytheon Co. | 32,500 | 3,376,100 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 32,210 | 1,267,142 | ||||||
The Toro Co. | 2,000 | 123,460 | ||||||
United Rentals, Inc. * | 18,700 | 2,058,122 | ||||||
18,034,392 | ||||||||
Commercial & Professional Supplies 2.4% | ||||||||
Manpowergroup, Inc. | 30,400 | 2,029,200 | ||||||
Pitney Bowes, Inc. | 26,600 | 658,084 | ||||||
R.R. Donnelley & Sons Co. | 201,500 | 3,516,175 | ||||||
6,203,459 | ||||||||
Consumer Durables & Apparel 0.6% | ||||||||
Deckers Outdoor Corp. * | 7,700 | 673,442 | ||||||
Hanesbrands, Inc. | 4,000 | 422,440 | ||||||
Tempur Sealy International, Inc. * | 7,241 | 381,166 | ||||||
1,477,048 | ||||||||
Consumer Services 3.1% | ||||||||
H&R Block, Inc. | 70,100 | 2,264,931 | ||||||
MGM Resorts International * | 93,900 | 2,183,175 | ||||||
Wyndham Worldwide Corp. | 5,600 | 434,952 | ||||||
Yum! Brands, Inc. | 42,800 | 3,074,324 | ||||||
7,957,382 | ||||||||
Diversified Financials 1.8% | ||||||||
Affiliated Managers Group, Inc. * | 7,100 | 1,418,509 | �� | |||||
Lazard Ltd., Class A | 66,100 | 3,252,781 | ||||||
4,671,290 | ||||||||
Energy 4.7% | ||||||||
Baker Hughes, Inc. | 14,100 | 746,736 | ||||||
ConocoPhillips | 20,200 | 1,457,430 | ||||||
EOG Resources, Inc. | 53,400 | 5,075,670 | ||||||
Halliburton Co. | 18,400 | 1,014,576 | ||||||
SM Energy Co. | 45,500 | 2,561,650 | ||||||
Valero Energy Corp. | 24,600 | 1,232,214 | ||||||
12,088,276 | ||||||||
Food & Staples Retailing 2.3% | ||||||||
The Kroger Co. | 105,184 | 5,859,801 | ||||||
Food, Beverage & Tobacco 8.7% | ||||||||
Altria Group, Inc. | 7,800 | 377,052 | ||||||
Archer-Daniels-Midland Co. | 97,100 | 4,563,700 | ||||||
Dr Pepper Snapple Group, Inc. | 75,153 | 5,204,345 | ||||||
Monster Beverage Corp. * | 1,600 | 161,408 | ||||||
PepsiCo, Inc. | 86,000 | 8,270,620 | ||||||
Pilgrim’s Pride Corp. * | 81,200 | 2,306,892 | ||||||
Tyson Foods, Inc., Class A | 35,500 | 1,432,425 | ||||||
22,316,442 | ||||||||
Health Care Equipment & Services 5.6% | ||||||||
Align Technology, Inc. * | 25,100 | 1,320,762 | ||||||
C.R. Bard, Inc. | 32,362 | 5,306,397 | ||||||
Cardinal Health, Inc. | 61,200 | 4,802,976 | ||||||
Centene Corp. * | 14,100 | 1,306,647 | ||||||
Edwards Lifesciences Corp. * | 3,300 | 399,036 | ||||||
McKesson Corp. | 6,351 | 1,291,857 | ||||||
14,427,675 | ||||||||
Household & Personal Products 0.1% | ||||||||
Energizer Holdings, Inc. | 2,100 | 257,565 | ||||||
Insurance 1.8% | ||||||||
Genworth Financial, Inc., Class A * | 210,800 | 2,949,092 | ||||||
Reinsurance Group of America, Inc. | 18,666 | 1,572,610 | ||||||
4,521,702 |
40 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 3.4% | ||||||||
Compass Minerals International, Inc. | 7,100 | 608,328 | ||||||
Crown Holdings, Inc. * | 27,930 | 1,338,685 | ||||||
PolyOne Corp. | 21,300 | 788,313 | ||||||
PPG Industries, Inc. | 21,071 | 4,291,952 | ||||||
United States Steel Corp. | 41,300 | 1,653,652 | ||||||
8,680,930 | ||||||||
Media 4.1% | ||||||||
Comcast Corp., Class A | 56,800 | 3,143,880 | ||||||
John Wiley & Sons, Inc., Class A | 42,600 | 2,487,414 | ||||||
Live Nation Entertainment, Inc. * | 129,832 | 3,375,632 | ||||||
Starz, Class A * | 50,100 | 1,548,090 | ||||||
10,555,016 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.7% | ||||||||
AbbVie, Inc. | 34,000 | 2,157,640 | ||||||
Amgen, Inc. | 43,500 | 7,054,830 | ||||||
Biogen Idec, Inc. * | 6,087 | 1,954,414 | ||||||
Celgene Corp. * | 13,974 | 1,496,475 | ||||||
Gilead Sciences, Inc. * | 80,438 | 9,009,056 | ||||||
Johnson & Johnson | 8,600 | 926,908 | ||||||
Merck & Co., Inc. | 19,587 | 1,134,871 | ||||||
Pfizer, Inc. | 36,146 | 1,082,573 | ||||||
24,816,767 | ||||||||
Real Estate 2.8% | ||||||||
RLJ Lodging Trust | 68,500 | 2,207,070 | ||||||
SL Green Realty Corp. | 42,890 | 4,962,373 | ||||||
7,169,443 | ||||||||
Retailing 5.8% | ||||||||
Aaron’s, Inc. | 15,100 | 373,876 | ||||||
Best Buy Co., Inc. | 46,800 | 1,597,752 | ||||||
Big Lots, Inc. | 34,200 | 1,561,230 | ||||||
Expedia, Inc. | 11,500 | 977,155 | ||||||
Liberty Interactive Corp., Class A * | 4,500 | 117,630 | ||||||
Liberty Ventures, Series A * | 639 | 22,429 | ||||||
Macy’s, Inc. | 71,600 | 4,139,912 | ||||||
Netflix, Inc. * | 800 | 314,216 | ||||||
The Gap, Inc. | 10,548 | 399,664 | ||||||
The Home Depot, Inc. | 9,800 | 955,696 | ||||||
The Priceline Group, Inc. * | 100 | 120,621 | ||||||
The TJX Cos., Inc. | 67,500 | 4,274,100 | ||||||
14,854,281 | ||||||||
Semiconductors & Semiconductor Equipment 1.0% | ||||||||
Micron Technology, Inc. * | 50,662 | 1,676,406 | ||||||
Skyworks Solutions, Inc. | 14,000 | 815,360 | ||||||
2,491,766 | ||||||||
Software & Services 16.3% | ||||||||
Broadridge Financial Solutions, Inc. | 38,319 | 1,683,354 | ||||||
Computer Sciences Corp. | 79,000 | 4,771,600 | ||||||
DST Systems, Inc. | 18,900 | 1,821,015 | ||||||
Electronic Arts, Inc. * | 27,493 | 1,126,388 | ||||||
Facebook, Inc., Class A * | 66,800 | 5,009,332 | ||||||
Global Payments, Inc. | 6,528 | 525,504 | ||||||
Google, Inc., Class A * | 6,100 | 3,464,007 | ||||||
Google, Inc., Class C * | 5,800 | 3,242,664 | ||||||
IAC/InterActiveCorp | 4,600 | 311,374 | ||||||
Intuit, Inc. | 22,000 | 1,936,220 | ||||||
Microsoft Corp. | 141,900 | 6,662,205 | ||||||
NeuStar, Inc., Class A * | 23,300 | 615,353 | ||||||
Oracle Corp. | 182,718 | 7,135,138 | ||||||
PTC, Inc. * | 64,200 | 2,449,230 | ||||||
Xerox Corp. | 64,000 | 849,920 | ||||||
41,603,304 | ||||||||
Technology Hardware & Equipment 9.1% | ||||||||
Apple, Inc. | 152,669 | 16,488,252 | ||||||
ARRIS Group, Inc. * | 14,700 | 441,294 | ||||||
CDW Corp. | 20,500 | 632,220 | ||||||
Hewlett-Packard Co. | 63,000 | 2,260,440 | ||||||
NetApp, Inc. | 40,200 | 1,720,560 | ||||||
QUALCOMM, Inc. | 12,500 | 981,375 | ||||||
SanDisk Corp. | 8,300 | 781,362 | ||||||
23,305,503 | ||||||||
Telecommunication Services 1.5% | ||||||||
Level 3 Communications, Inc. * | 2,251 | 105,594 | ||||||
Verizon Communications, Inc. | 76,000 | 3,819,000 | ||||||
3,924,594 | ||||||||
Transportation 3.0% | ||||||||
Alaska Air Group, Inc. | 86,940 | 4,627,816 | ||||||
Matson, Inc. | 34,000 | 968,660 | ||||||
Southwest Airlines Co. | 57,100 | 1,968,808 | ||||||
7,565,284 | ||||||||
Utilities 1.1% | ||||||||
AES Corp. | 650 | 9,146 | ||||||
Entergy Corp. | 21,900 | 1,840,038 | ||||||
NRG Energy, Inc. | 30,800 | 923,384 | ||||||
2,772,568 | ||||||||
Total Common Stock | ||||||||
(Cost $205,644,055) | 254,506,341 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.4% of net assets | ||||||||
Time Deposit 0.4% | ||||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 990,064 | 990,064 |
See financial notes 41
Table of Contents
Schwab Large-Cap Growth Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/18/14 (a)(b) | 65,000 | 64,999 | ||||||
Total Short-Term Investments | ||||||||
(Cost $1,055,063) | 1,055,063 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $206,639,628 and the unrealized appreciation and depreciation were $52,282,452 and ($3,360,676), respectively, with a net unrealized appreciation of $48,921,776.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 7 | 703,990 | 12,187 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $254,506,341 | $— | $— | $254,506,341 | ||||||||||||
Short-Term Investments1 | — | 1,055,063 | — | 1,055,063 | ||||||||||||
Total | $254,506,341 | $1,055,063 | $— | $255,561,404 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $12,187 | $— | $— | $12,187 |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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, 2014.
42 See financial notes
Table of Contents
Schwab Large-Cap Growth Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $206,699,118) | $255,561,404 | |||||
Receivables: | ||||||
Investments sold | 516,622 | |||||
Dividends | 152,573 | |||||
Fund shares sold | 75,212 | |||||
Variation margin on futures contracts | 7,980 | |||||
Income from securities on loan | 219 | |||||
Prepaid expenses | + | 8,108 | ||||
Total assets | 256,322,118 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 19,030 | |||||
Shareholder service fees | 7,516 | |||||
Fund shares redeemed | 260,326 | |||||
Accrued expenses | + | 56,934 | ||||
Total liabilities | 343,806 | |||||
Net Assets | ||||||
Total assets | 256,322,118 | |||||
Total liabilities | − | 343,806 | ||||
Net assets | $255,978,312 | |||||
Net Assets by Source | ||||||
Capital received from investors | 180,981,278 | |||||
Net investment income not yet distributed | 972,556 | |||||
Net realized capital gains | 25,150,005 | |||||
Net unrealized capital appreciation | 48,874,473 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$255,978,312 | 13,927,622 | $18.38 |
See financial notes 43
Table of Contents
Schwab Large-Cap Growth Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends | $4,044,646 | |||||
Interest | 541 | |||||
Securities on loan | + | 3,565 | ||||
Total investment income | 4,048,752 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,828,943 | |||||
Shareholder service fees | 625,166 | |||||
Shareholder reports | 47,535 | |||||
Portfolio accounting fees | 41,415 | |||||
Professional fees | 33,491 | |||||
Transfer agent fees | 26,455 | |||||
Registration fees | 22,410 | |||||
Custodian fees | 9,277 | |||||
Independent trustees’ fees | 7,313 | |||||
Interest expense | 72 | |||||
Other expenses | + | 5,691 | ||||
Total expenses | 2,647,768 | |||||
Expense reduction by CSIM and its affiliates | − | 132,899 | ||||
Net expenses | − | 2,514,869 | ||||
Net investment income | 1,533,883 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 38,902,660 | |||||
Net realized gains on futures contracts | + | 409,538 | ||||
Net realized gains | 39,312,198 | |||||
Net change in unrealized appreciation (depreciation) on investments | 1,545,044 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | (42,272 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 1,502,772 | ||||
Net realized and unrealized gains | 40,814,970 | |||||
Increase in net assets resulting from operations | $42,348,853 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $1,533,883 | $2,316,395 | ||||||||
Net realized gains | 39,312,198 | 31,663,612 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 1,502,772 | 21,399,074 | |||||||
Increase in net assets from operations | 42,348,853 | 55,379,081 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,490,864 | ) | ($2,200,707 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,209,235 | $20,323,834 | 1,838,655 | $25,057,674 | ||||||||||||||
Shares reinvested | 49,885 | 793,166 | 94,231 | 1,176,943 | ||||||||||||||
Shares redeemed | + | (3,467,366 | ) | (58,680,881 | ) | (3,195,045 | ) | (43,826,509 | ) | |||||||||
Net transactions in fund shares | (2,208,246 | ) | ($37,563,881 | ) | (1,262,159 | ) | ($17,591,892 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 16,135,868 | $252,684,204 | 17,398,027 | $217,097,722 | ||||||||||||||
Total increase or decrease | + | (2,208,246 | ) | 3,294,108 | (1,262,159 | ) | 35,586,482 | |||||||||||
End of period | 13,927,622 | $255,978,312 | 16,135,868 | $252,684,204 | ||||||||||||||
Net investment income not yet distributed | $972,556 | $989,027 |
See financial notes 45
Table of Contents
Schwab Small-Cap Equity Fund™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 24.87 | 17.72 | 15.61 | 13.96 | 11.14 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.02 | ) | 0.09 | 0.02 | (0.01 | ) | (0.04 | ) | ||||||||||||||
Net realized and unrealized gains (losses) | 2.71 | 7.16 | 2.10 | 1.66 | 2.86 | |||||||||||||||||
Total from investment operations | 2.69 | 7.25 | 2.12 | 1.65 | 2.82 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.07 | ) | (0.10 | ) | (0.01 | ) | — | — | ||||||||||||||
Distributions from net realized gains | (2.38 | ) | — | — | — | — | ||||||||||||||||
Total distributions | (2.45 | ) | (0.10 | ) | (0.01 | ) | — | — | ||||||||||||||
Net asset value at end of period | 25.11 | 24.87 | 17.72 | 15.61 | 13.96 | |||||||||||||||||
Total return (%) | 11.67 | 41.10 | 13.57 | 11.82 | 25.31 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.10 | 1.10 | 1.12 | 1.11 | 1.12 | |||||||||||||||||
Gross operating expenses | 1.10 | 1.11 | 1.12 | 1.12 | 1.14 | |||||||||||||||||
Net investment income (loss) | (0.10 | ) | 0.42 | 0.11 | (0.05 | ) | (0.26 | ) | ||||||||||||||
Portfolio turnover rate | 103 | 84 | 101 | 72 | 64 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 666 | 590 | 388 | 226 | 219 |
46 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2014
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 | 589,172,416 | 661,030,719 | ||||||||
2 | .5% | Other Investment Company | 16,708,242 | 16,708,242 | ||||||||
0 | .5% | Short-Term Investments | 3,360,305 | 3,360,305 | ||||||||
102 | .3% | Total Investments | 609,240,963 | 681,099,266 | ||||||||
(2 | .3%) | Other Assets and Liabilities, Net | (15,099,462 | ) | ||||||||
100 | .0% | Net Assets | 665,999,804 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.3% of net assets | ||||||||
Automobiles & Components 1.1% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 81,905 | 1,583,224 | ||||||
Dana Holding Corp. | 150,964 | 3,088,723 | ||||||
Tower International, Inc. * | 122,156 | 2,968,391 | ||||||
7,640,338 | ||||||||
Banks 5.4% | ||||||||
1st Source Corp. | 31,910 | 998,464 | ||||||
BancFirst Corp. | 13,210 | 858,650 | ||||||
BNC Bancorp | 12,053 | 205,022 | ||||||
C&F Financial Corp. | 1,830 | 62,842 | ||||||
Federal Agricultural Mortgage Corp., Class C | 22,007 | 732,833 | ||||||
Financial Institutions, Inc. | 22,109 | 555,820 | ||||||
First Bancorp (North Carolina) | 14,300 | 259,116 | ||||||
First BanCorp (Puerto Rico) * | 595,581 | 3,102,977 | ||||||
First Busey Corp. | 19,240 | 120,250 | ||||||
First Business Financial Services, Inc. | 7,755 | 363,942 | ||||||
First Citizens BancShares, Inc., Class A | 1,510 | 379,327 | ||||||
First Commonwealth Financial Corp. | 122,906 | 1,149,171 | ||||||
First Community Bancshares, Inc. | 6,466 | 105,848 | ||||||
First Defiance Financial Corp. | 10,948 | 335,337 | ||||||
First Financial Corp. | 19,833 | 687,808 | ||||||
First Interstate BancSystem, Inc., Class A | 28,960 | 849,686 | ||||||
First Merchants Corp. | 5,667 | 128,358 | ||||||
First Midwest Bancorp, Inc. | 239,330 | 4,018,351 | ||||||
International Bancshares Corp. | 44,030 | 1,249,131 | ||||||
Lakeland Bancorp, Inc. | 14,605 | 160,509 | ||||||
MainSource Financial Group, Inc. | 29,140 | 530,057 | ||||||
MidSouth Bancorp, Inc. | 8,477 | 160,554 | ||||||
OFG Bancorp | 181,222 | 2,821,627 | ||||||
Preferred Bank | 12,454 | 331,027 | ||||||
PrivateBancorp, Inc. | 106,549 | 3,443,664 | ||||||
S&T Bancorp, Inc. | 36,980 | 1,020,278 | ||||||
State Bank Financial Corp. | 17,540 | 314,317 | ||||||
Susquehanna Bancshares, Inc. | 98,728 | 968,522 | ||||||
Synovus Financial Corp. | 160,881 | 4,079,942 | ||||||
TCF Financial Corp. | 188,779 | 2,916,636 | ||||||
WesBanco, Inc. | 27,180 | 936,623 | ||||||
Wintrust Financial Corp. | 33,640 | 1,558,205 | ||||||
WSFS Financial Corp. | 9,120 | 717,288 | ||||||
36,122,182 | ||||||||
Capital Goods 7.9% | ||||||||
AAR Corp. | 29,429 | 779,868 | ||||||
Altra Industrial Motion Corp. | 20,400 | 643,008 | ||||||
Argan, Inc. | 180,740 | 6,291,559 | ||||||
Blount International, Inc. * | 221,104 | 3,385,102 | ||||||
Briggs & Stratton Corp. | 102,655 | 2,074,658 | ||||||
CIRCOR International, Inc. | 6,430 | 483,215 | ||||||
Commercial Vehicle Group, Inc. * | 29,529 | 193,415 | ||||||
Curtiss-Wright Corp. | 12,974 | 897,931 | ||||||
Douglas Dynamics, Inc. | 56,556 | 1,172,406 | ||||||
Ducommun, Inc. * | 5,923 | 156,426 | ||||||
EMCOR Group, Inc. | 96,952 | 4,278,492 | ||||||
Engility Holdings, Inc. * | 135,668 | 5,860,858 | ||||||
General Cable Corp. | 155,302 | 2,200,629 | ||||||
Gibraltar Industries, Inc. * | 64,900 | 989,725 | ||||||
Great Lakes Dredge & Dock Corp. * | 63,050 | 440,720 | ||||||
Griffon Corp. | 110,356 | 1,356,275 | ||||||
Harsco Corp. | 89,460 | 1,939,493 | ||||||
Hillenbrand, Inc. | 14,762 | 491,427 | ||||||
Hurco Cos., Inc. | 9,200 | 354,476 | ||||||
Kadant, Inc. | 20,540 | 849,124 | ||||||
L.B. Foster Co., Class A | 16,000 | 865,440 | ||||||
Lydall, Inc. * | 45,320 | 1,401,748 | ||||||
Moog, Inc., Class A * | 37,689 | 2,884,716 | ||||||
Mueller Water Products, Inc., Class A | 217,853 | 2,150,209 | ||||||
Norcraft Cos, Inc. * | 5,794 | 98,498 | ||||||
Quanex Building Products Corp. | 19,423 | 388,848 | ||||||
Rexnord Corp. * | 57,450 | 1,697,647 | ||||||
SL Industries, Inc. * | 3,200 | 144,000 | ||||||
Standex International Corp. | 23,160 | 1,997,550 | ||||||
The Greenbrier Cos., Inc. (a) | 38,582 | 2,412,918 | ||||||
Tutor Perini Corp. * | 74,565 | 2,088,566 | ||||||
Wabash National Corp. * | 126,135 | 1,299,190 | ||||||
Willis Lease Finance Corp. * | 7,483 | 170,687 | ||||||
52,438,824 | ||||||||
Commercial & Professional Supplies 3.2% | ||||||||
ARC Document Solutions, Inc. * | 30,710 | 311,706 | ||||||
CRA International, Inc. * | 34,530 | 1,035,900 | ||||||
Deluxe Corp. | 45,901 | 2,790,781 | ||||||
Heidrick & Struggles International, Inc. | 37,554 | 781,874 | ||||||
Hill International, Inc. * | 71,178 | 276,171 | ||||||
Kimball International, Inc., Class B | 46,513 | 836,304 |
See financial notes 47
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Korn/Ferry International * | 54,343 | 1,517,800 | ||||||
Quad Graphics, Inc. | 141,765 | 3,125,918 | ||||||
RPX Corp. * | 407,010 | 5,718,490 | ||||||
TrueBlue, Inc. * | 188,748 | 4,665,851 | ||||||
Viad Corp. | 24,390 | 622,189 | ||||||
21,682,984 | ||||||||
Consumer Durables & Apparel 1.1% | ||||||||
Bassett Furniture Industries, Inc. | 2,063 | 35,855 | ||||||
Blyth, Inc. (a) | 38,930 | 326,623 | ||||||
Columbia Sportswear Co. | 8,680 | 334,527 | ||||||
CSS Industries, Inc. | 20,620 | 588,907 | ||||||
Culp, Inc. | 12,400 | 235,228 | ||||||
JAKKS Pacific, Inc. *(a) | 11,176 | 71,303 | ||||||
Johnson Outdoors, Inc., Class A | 7,100 | 213,355 | ||||||
Nautilus, Inc. * | 70,497 | 943,250 | ||||||
Skechers U.S.A., Inc., Class A * | 47,230 | 2,585,843 | ||||||
Unifi, Inc. * | 16,530 | 462,344 | ||||||
Vera Bradley, Inc. * | 8,338 | 190,106 | ||||||
ZAGG, Inc. * | 156,153 | 1,049,348 | ||||||
7,036,689 | ||||||||
Consumer Services 4.2% | ||||||||
Ascent Capital Group, Inc., Class A * | 34,720 | 2,232,496 | ||||||
Boyd Gaming Corp. * | 259,160 | 2,993,298 | ||||||
Buffalo Wild Wings, Inc. * | 23,590 | 3,521,515 | ||||||
Capella Education Co. | 25,692 | 1,817,452 | ||||||
Diamond Resorts International, Inc. * | 56,339 | 1,462,561 | ||||||
Isle of Capri Casinos, Inc. * | 130,480 | 969,466 | ||||||
K12, Inc. * | 220,261 | 2,731,237 | ||||||
Penn National Gaming, Inc. * | 503,040 | 6,584,794 | ||||||
Regis Corp. | 173,292 | 2,942,498 | ||||||
Strayer Education, Inc. * | 25,160 | 1,841,460 | ||||||
Universal Technical Institute, Inc. | 51,590 | 614,437 | ||||||
27,711,214 | ||||||||
Diversified Financials 2.4% | ||||||||
Calamos Asset Management, Inc., Class A | 216,846 | 2,970,790 | ||||||
Cash America International, Inc. | 65,068 | 3,198,092 | ||||||
Compass Diversified Holdings | 52,490 | 968,441 | ||||||
Interactive Brokers Group, Inc., Class A | 194,810 | 5,029,994 | ||||||
Investment Technology Group, Inc. * | 46,377 | 831,540 | ||||||
KCG Holdings, Inc., Class A * | 16,531 | 176,220 | ||||||
Nelnet, Inc., Class A | 54,400 | 2,588,896 | ||||||
Oppenheimer Holdings, Inc., Class A | 22,000 | 540,100 | ||||||
16,304,073 | ||||||||
Energy 6.4% | ||||||||
Aemetis, Inc. * | 15,850 | 123,947 | ||||||
Basic Energy Services, Inc. * | 175,753 | 2,267,214 | ||||||
Bill Barrett Corp. * | 100,346 | 1,525,259 | ||||||
Clayton Williams Energy, Inc. * | 21,630 | 1,798,318 | ||||||
Cloud Peak Energy, Inc. * | 135,727 | 1,624,652 | ||||||
Comstock Resources, Inc. | 130,948 | 1,550,424 | ||||||
Contango Oil & Gas Co. * | 39,908 | 1,459,436 | ||||||
Green Plains, Inc. | 159,867 | 5,467,451 | ||||||
ION Geophysical Corp. * | 1,041,823 | 2,917,104 | ||||||
Matrix Service Co. * | 67,380 | 1,688,543 | ||||||
Pacific Ethanol, Inc. * | 102,500 | 1,446,275 | ||||||
Parker Drilling Co. * | 368,640 | 1,636,762 | ||||||
PBF Energy, Inc., Class A | 102,094 | 2,661,591 | ||||||
Pioneer Energy Services Corp. * | 414,701 | 3,806,955 | ||||||
REX American Resources Corp. * | 44,370 | 3,228,361 | ||||||
SandRidge Energy, Inc. *(a) | 254,099 | 990,986 | ||||||
Stone Energy Corp. * | 32,439 | 794,755 | ||||||
Tesco Corp. | 45,593 | 868,091 | ||||||
VAALCO Energy, Inc. * | 488,059 | 3,621,398 | ||||||
W&T Offshore, Inc. | 322,842 | 2,934,634 | ||||||
42,412,156 | ||||||||
Food & Staples Retailing 0.9% | ||||||||
Liberator Medical Holdings, Inc. (a) | 82,340 | 237,139 | ||||||
Roundy’s, Inc. | 337,390 | 1,137,004 | ||||||
SUPERVALU, Inc. * | 78,930 | 681,166 | ||||||
The Andersons, Inc. | 10,506 | 669,547 | ||||||
The Pantry, Inc. * | 127,210 | 3,278,202 | ||||||
6,003,058 | ||||||||
Food, Beverage & Tobacco 2.7% | ||||||||
Alliance One International, Inc. * | 42,950 | 87,188 | ||||||
Cal-Maine Foods, Inc. | 50,504 | 4,433,746 | ||||||
Coca-Cola Bottling Co. Consolidated | 30,540 | 2,762,038 | ||||||
Farmer Bros. Co. * | 46,513 | 1,356,319 | ||||||
Omega Protein Corp. * | 187,466 | 2,708,884 | ||||||
Sanderson Farms, Inc. | 77,713 | 6,526,338 | ||||||
Seneca Foods Corp., Class A * | 7,100 | 190,848 | ||||||
18,065,361 | ||||||||
Health Care Equipment & Services 6.2% | ||||||||
Accuray, Inc. * | 337,371 | 2,135,558 | ||||||
Alere, Inc. * | 13,414 | 536,158 | ||||||
Alliance HealthCare Services, Inc. * | 8,250 | 199,073 | ||||||
AngioDynamics, Inc. * | 56,030 | 952,510 | ||||||
Anika Therapeutics, Inc. * | 33,579 | 1,347,861 | ||||||
Cantel Medical Corp. | 27,840 | 1,180,416 | ||||||
CONMED Corp. | 60,642 | 2,546,358 | ||||||
CryoLife, Inc. | 22,429 | 230,122 | ||||||
Cynosure, Inc., Class A * | 7,020 | 177,536 | ||||||
Globus Medical, Inc., Class A * | 125,324 | 2,778,433 | ||||||
Greatbatch, Inc. * | 76,634 | 3,846,260 | ||||||
Hill-Rom Holdings, Inc. | 11,796 | 524,686 | ||||||
ICU Medical, Inc. * | 33,654 | 2,386,069 | ||||||
Integra LifeSciences Holdings Corp. * | 12,733 | 650,784 | ||||||
Kindred Healthcare, Inc. | 139,808 | 3,040,824 | ||||||
Magellan Health, Inc. * | 6,547 | 396,224 | ||||||
Merge Healthcare, Inc. * | 217,088 | 596,992 | ||||||
Molina Healthcare, Inc. * | 146,547 | 7,128,046 | ||||||
National Healthcare Corp. | 11,100 | 669,441 | ||||||
NuVasive, Inc. * | 90,270 | 3,692,043 | ||||||
Omnicell, Inc. * | 25,050 | 809,365 | ||||||
Quality Systems, Inc. | 151,310 | 2,286,294 | ||||||
SurModics, Inc. * | 54,803 | 1,186,485 | ||||||
The Providence Service Corp. * | 29,818 | 1,317,359 |
48 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Triple-S Management Corp., Class B * | 39,636 | 877,541 | ||||||
41,492,438 | ||||||||
Household & Personal Products 1.1% | ||||||||
Coty, Inc., Class A * | 70,132 | 1,164,191 | ||||||
Harbinger Group, Inc. * | 172,970 | 2,272,826 | ||||||
Medifast, Inc. * | 35,958 | 1,141,307 | ||||||
Revlon, Inc., Class A * | 17,300 | 593,390 | ||||||
Spectrum Brands Holdings, Inc. | 17,390 | 1,575,360 | ||||||
USANA Health Sciences, Inc. * | 2,750 | 313,445 | ||||||
7,060,519 | ||||||||
Insurance 5.7% | ||||||||
American Equity Investment Life Holding Co. | 253,400 | 6,540,254 | ||||||
AmTrust Financial Services, Inc. (a) | 114,602 | 5,142,192 | ||||||
Aspen Insurance Holdings Ltd. | 130,301 | 5,685,033 | ||||||
FBL Financial Group, Inc., Class A | 16,601 | 823,077 | ||||||
Maiden Holdings Ltd. | 182,176 | 2,177,003 | ||||||
MBIA, Inc. * | 402,801 | 3,931,338 | ||||||
Selective Insurance Group, Inc. | 152,600 | 3,940,132 | ||||||
Symetra Financial Corp. | 284,407 | 6,740,446 | ||||||
The Hanover Insurance Group, Inc. | 42,399 | 2,838,189 | ||||||
37,817,664 | ||||||||
Materials 4.5% | ||||||||
Ampco-Pittsburgh Corp. | 26,060 | 567,847 | ||||||
Boise Cascade Co. * | 106,001 | 3,822,396 | ||||||
Calgon Carbon Corp. * | 23,822 | 500,977 | ||||||
Clearwater Paper Corp. * | 36,558 | 2,352,507 | ||||||
Commercial Metals Co. | 308,203 | 5,328,830 | ||||||
Globe Specialty Metals, Inc. | 22,667 | 426,366 | ||||||
Graphic Packaging Holding Co. * | 282,306 | 3,424,372 | ||||||
KapStone Paper & Packaging Corp. * | 31,019 | 954,144 | ||||||
KMG Chemicals, Inc. | 4,214 | 74,588 | ||||||
Materion Corp. | 77,527 | 3,058,440 | ||||||
Neenah Paper, Inc. | 57,661 | 3,517,898 | ||||||
Noranda Aluminum Holding Corp. | 47,350 | 208,813 | ||||||
OM Group, Inc. | 56,400 | 1,468,092 | ||||||
PolyOne Corp. | 59,518 | 2,202,761 | ||||||
Schweitzer-Mauduit International, Inc. | 9,860 | 424,572 | ||||||
Tredegar Corp. | 22,161 | 421,502 | ||||||
Trinseo S.A. * | 80,297 | 1,160,292 | ||||||
29,914,397 | ||||||||
Media 0.4% | ||||||||
AH Belo Corp., Class A | 48,000 | 552,480 | ||||||
Dex Media, Inc. * | 39,336 | 306,427 | ||||||
Live Nation Entertainment, Inc. * | 29,500 | 767,000 | ||||||
Sinclair Broadcast Group, Inc., Class A (a) | 26,709 | 775,897 | ||||||
2,401,804 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 10.1% | ||||||||
Acorda Therapeutics, Inc. * | 16,045 | 558,687 | ||||||
Affymetrix, Inc. * | 199,740 | 1,799,657 | ||||||
Akorn, Inc. * | 14,627 | 651,633 | ||||||
Anacor Pharmaceuticals, Inc. * | 73,300 | 2,155,753 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 31,770 | 3,584,291 | ||||||
BioCryst Pharmaceuticals, Inc. * | 76,042 | 891,212 | ||||||
BioSpecifics Technologies Corp. * | 44,115 | 1,769,894 | ||||||
Cepheid * | 26,562 | 1,408,052 | ||||||
Dyax Corp. * | 405,230 | 5,012,695 | ||||||
Emergent Biosolutions, Inc. * | 276,912 | 6,263,750 | ||||||
Enanta Pharmaceuticals, Inc. * | 33,544 | 1,442,392 | ||||||
Enzo Biochem, Inc. * | 8,637 | 45,085 | ||||||
Hyperion Therapeutics, Inc. * | 165,406 | 4,019,366 | ||||||
Ligand Pharmaceuticals, Inc. * | 50,297 | 2,779,915 | ||||||
Myriad Genetics, Inc. *(a) | 50,380 | 1,989,506 | ||||||
Nektar Therapeutics * | 38,427 | 529,908 | ||||||
NPS Pharmaceuticals, Inc. * | 40,738 | 1,116,221 | ||||||
Pacira Pharmaceuticals, Inc. * | 11,025 | 1,023,341 | ||||||
PAREXEL International Corp. * | 38,690 | 2,101,254 | ||||||
PDL BioPharma, Inc. (a) | 224,448 | 1,914,542 | ||||||
POZEN, Inc. * | 141,321 | 1,281,782 | ||||||
Prestige Brands Holdings, Inc. * | 82,064 | 2,906,707 | ||||||
Repligen Corp. * | 212,363 | 5,355,795 | ||||||
Rigel Pharmaceuticals, Inc. * | 128,749 | 254,923 | ||||||
Sagent Pharmaceuticals, Inc. * | 86,680 | 2,742,555 | ||||||
Sangamo BioSciences, Inc. * | 118,045 | 1,433,066 | ||||||
SciClone Pharmaceuticals, Inc. * | 176,322 | 1,347,100 | ||||||
Spectrum Pharmaceuticals, Inc. *(a) | 637,952 | 4,835,676 | ||||||
Sucampo Pharmaceuticals, Inc., Class A * | 20,228 | 174,365 | ||||||
The Medicines Co. * | 236,281 | 5,982,635 | ||||||
67,371,758 | ||||||||
Real Estate 7.3% | ||||||||
Ashford Hospitality Trust, Inc. | 385,234 | 4,353,144 | ||||||
Brandywine Realty Trust | 212,061 | 3,272,101 | ||||||
Cedar Realty Trust, Inc. | 112,124 | 771,413 | ||||||
CoreSite Realty Corp. | 59,906 | 2,217,720 | ||||||
DCT Industrial Trust, Inc. | 107,570 | 921,875 | ||||||
DuPont Fabros Technology, Inc. | 221,444 | 6,858,121 | ||||||
Excel Trust, Inc. | 66,265 | 861,445 | ||||||
FelCor Lodging Trust, Inc. | 41,443 | 444,683 | ||||||
Highwoods Properties, Inc. | 148,137 | 6,350,633 | ||||||
Hudson Pacific Properties, Inc. | 40,990 | 1,119,437 | ||||||
LaSalle Hotel Properties | 61,314 | 2,404,122 | ||||||
PS Business Parks, Inc. | 38,031 | 3,202,971 | ||||||
RE/MAX Holdings, Inc., Class A | 7,440 | 238,080 | ||||||
RLJ Lodging Trust | 190,083 | 6,124,474 | ||||||
Saul Centers, Inc. | 44,570 | 2,449,122 | ||||||
Strategic Hotels & Resorts, Inc. * | 36,652 | 470,978 | ||||||
Summit Hotel Properties, Inc. | 382,112 | 4,447,784 | ||||||
Sunstone Hotel Investors, Inc. | 55,192 | 844,990 | ||||||
The Geo Group, Inc. | 28,951 | 1,156,303 | ||||||
48,509,396 | ||||||||
Retailing 4.3% | ||||||||
Aaron’s, Inc. | 56,480 | 1,398,445 | ||||||
Abercrombie & Fitch Co., Class A | 49,975 | 1,673,163 | ||||||
ANN, Inc. * | 47,466 | 1,822,220 | ||||||
Big Lots, Inc. | 64,478 | 2,943,421 | ||||||
Brown Shoe Co., Inc. | 104,401 | 2,776,023 |
See financial notes 49
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Build-A-Bear Workshop, Inc. * | 42,632 | 722,612 | ||||||
Citi Trends, Inc. * | 114,958 | 2,603,799 | ||||||
Core-Mark Holding Co., Inc. | 29,274 | 1,698,770 | ||||||
Guess?, Inc. | 45,495 | 1,008,624 | ||||||
Haverty Furniture Cos, Inc. | 68,973 | 1,518,096 | ||||||
Murphy USA, Inc. * | 13,820 | 791,886 | ||||||
New York & Co., Inc. * | 82,500 | 269,775 | ||||||
Orbitz Worldwide, Inc. * | 284,233 | 2,350,607 | ||||||
Outerwall, Inc. *(a) | 46,890 | 2,966,730 | ||||||
Stein Mart, Inc. | 22,960 | 307,205 | ||||||
The Cato Corp., Class A | 27,691 | 987,738 | ||||||
The Finish Line, Inc., Class A | 90,656 | 2,399,664 | ||||||
The Pep Boys - Manny, Moe & Jack * | 15,376 | 146,533 | ||||||
28,385,311 | ||||||||
Semiconductors & Semiconductor Equipment 3.1% | ||||||||
Alpha & Omega Semiconductor Ltd. * | 12,475 | 115,643 | ||||||
Amkor Technology, Inc. * | 126,350 | 856,653 | ||||||
Cirrus Logic, Inc. * | 35,088 | 677,199 | ||||||
Diodes, Inc. * | 89,283 | 2,306,180 | ||||||
Fairchild Semiconductor International, Inc. * | 138,541 | 2,126,604 | ||||||
FormFactor, Inc. * | 195,390 | 1,557,258 | ||||||
IXYS Corp. | 54,900 | 640,683 | ||||||
OmniVision Technologies, Inc. * | 199,713 | 5,348,314 | ||||||
Pericom Semiconductor Corp. * | 51,100 | 558,523 | ||||||
Photronics, Inc. * | 233,340 | 2,097,727 | ||||||
Sigma Designs, Inc. * | 15,687 | 62,591 | ||||||
Silicon Image, Inc. * | 69,360 | 371,770 | ||||||
Tessera Technologies, Inc. | 117,285 | 3,564,291 | ||||||
Ultra Clean Holdings, Inc. * | 37,572 | 329,882 | ||||||
20,613,318 | ||||||||
Software & Services 10.0% | ||||||||
Aspen Technology, Inc. * | 142,940 | 5,278,774 | ||||||
Bankrate, Inc. * | 33,770 | 366,742 | ||||||
Blucora, Inc. * | 31,540 | 534,603 | ||||||
Callidus Software, Inc. * | 99,822 | 1,406,492 | ||||||
comScore, Inc. * | 12,970 | 546,556 | ||||||
Constant Contact, Inc. * | 125,560 | 4,439,802 | ||||||
CSG Systems International, Inc. | 50,132 | 1,328,999 | ||||||
Demand Media, Inc. * | 88,286 | 621,533 | ||||||
Digital River, Inc. * | 144,427 | 3,692,998 | ||||||
EarthLink Holdings Corp. | 244,195 | 874,218 | ||||||
EnerNOC, Inc. * | 331,320 | 4,893,596 | ||||||
Euronet Worldwide, Inc. * | 10,823 | 580,870 | ||||||
Higher One Holdings, Inc. * | 61,743 | 158,680 | ||||||
Intralinks Holdings, Inc. * | 135,941 | 1,174,530 | ||||||
j2 Global, Inc. | 46,399 | 2,509,722 | ||||||
LogMeIn, Inc. * | 103,394 | 4,968,082 | ||||||
MicroStrategy, Inc., Class A * | 8,226 | 1,323,399 | ||||||
Monster Worldwide, Inc. * | 479,659 | 1,851,484 | ||||||
NetScout Systems, Inc. * | 55,231 | 2,035,815 | ||||||
Pegasystems, Inc. | 129,100 | 2,797,597 | ||||||
Progress Software Corp. * | 14,087 | 364,853 | ||||||
PTC, Inc. * | 119,208 | 4,547,785 | ||||||
QuinStreet, Inc. * | 76,710 | 310,676 | ||||||
Rovi Corp. * | 129,837 | 2,710,997 | ||||||
Sykes Enterprises, Inc. * | 82,551 | 1,778,149 | ||||||
Take-Two Interactive Software, Inc. * | 276,460 | 7,312,367 | ||||||
TeleCommunication Systems, Inc., Class A * | 104,770 | 301,738 | ||||||
TeleTech Holdings, Inc. * | 8,693 | 224,366 | ||||||
TiVo, Inc. * | 125,564 | 1,638,610 | ||||||
Unisys Corp. * | 54,783 | 1,404,636 | ||||||
VASCO Data Security International, Inc. * | 25,958 | 657,257 | ||||||
Web.com Group, Inc. * | 156,161 | 3,205,985 | ||||||
WebMD Health Corp. * | 14,949 | 638,023 | ||||||
66,479,934 | ||||||||
Technology Hardware & Equipment 5.6% | ||||||||
Anixter International, Inc. | 4,803 | 409,071 | ||||||
ARRIS Group, Inc. * | 96,970 | 2,911,039 | ||||||
Aruba Networks, Inc. * | 108,238 | 2,335,776 | ||||||
Benchmark Electronics, Inc. * | 49,226 | 1,167,641 | ||||||
Brocade Communications Systems, Inc. | 470,272 | 5,046,018 | ||||||
Calix, Inc. * | 55,526 | 600,236 | ||||||
Checkpoint Systems, Inc. * | 84,800 | 1,124,448 | ||||||
Daktronics, Inc. | 52,700 | 701,437 | ||||||
Harmonic, Inc. * | 403,860 | 2,693,746 | ||||||
II-VI, Inc. * | 66,342 | 894,954 | ||||||
Insight Enterprises, Inc. * | 95,400 | 2,170,350 | ||||||
Lexmark International, Inc., Class A | 140,117 | 6,047,450 | ||||||
Newport Corp. * | 89,440 | 1,600,082 | ||||||
Park Electrochemical Corp. | 13,097 | 337,903 | ||||||
Plexus Corp. * | 24,609 | 1,017,582 | ||||||
Polycom, Inc. * | 233,247 | 3,050,871 | ||||||
Richardson Electronics Ltd. | 16,310 | 163,263 | ||||||
Sanmina Corp. * | 60,317 | 1,512,147 | ||||||
Tech Data Corp. * | 47,506 | 2,837,058 | ||||||
Vishay Intertechnology, Inc. | 51,890 | 701,034 | ||||||
37,322,106 | ||||||||
Telecommunication Services 1.3% | ||||||||
General Communication, Inc., Class A * | 14,655 | 171,903 | ||||||
IDT Corp., Class B | 217,062 | 3,577,182 | ||||||
Inteliquent, Inc. | 171,691 | 2,889,559 | ||||||
Premiere Global Services, Inc. * | 110,115 | 1,152,904 | ||||||
Shenandoah Telecommunications Co. | 8,300 | 245,597 | ||||||
Spok Holdings, Inc. | 38,190 | 620,206 | ||||||
Vonage Holdings Corp. * | 60,400 | 210,192 | ||||||
8,867,543 | ||||||||
Transportation 2.3% | ||||||||
Air Transport Services Group, Inc. * | 57,950 | 474,031 | ||||||
ArcBest Corp. | 98,685 | 3,819,109 | ||||||
Con-way, Inc. | 44,925 | 1,948,397 | ||||||
Hawaiian Holdings, Inc. * | 58,212 | 1,009,396 | ||||||
JetBlue Airways Corp. * | 386,655 | 4,461,999 | ||||||
Matson, Inc. | 99,189 | 2,825,895 | ||||||
Park-Ohio Holdings Corp. | 20,173 | 1,071,388 | ||||||
15,610,215 |
50 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 2.1% | ||||||||
American States Water Co. | 69,759 | 2,495,977 | ||||||
Avista Corp. | 53,460 | 1,895,157 | ||||||
Chesapeake Utilities Corp. | 9,558 | 462,894 | ||||||
Consolidated Water Co., Ltd. (a) | 56,903 | 682,267 | ||||||
Northwest Natural Gas Co. | 64,542 | 3,028,956 | ||||||
Ormat Technologies, Inc. | 27,023 | 782,316 | ||||||
PNM Resources, Inc. | 107,958 | 3,114,588 | ||||||
Southwest Gas Corp. | 22,470 | 1,305,282 | ||||||
13,767,437 | ||||||||
Total Common Stock | ||||||||
(Cost $589,172,416) | 661,030,719 | |||||||
Other Investment Company 2.5% of net assets | ||||||||
Securities Lending Collateral 2.5% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (d) | 16,708,242 | 16,708,242 | ||||||
Total Other Investment Company | ||||||||
(Cost $16,708,242) | 16,708,242 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.5% of net assets | ||||||||
Time Deposits 0.5% | ||||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 3,041,309 | 3,041,309 | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/18/14 (b)(c) | 319,000 | 318,996 | ||||||
Total Short-Term Investments | ||||||||
(Cost $3,360,305) | 3,360,305 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $609,705,161 and the unrealized appreciation and depreciation were $101,098,169 and ($29,704,064), respectively, with a net unrealized appreciation of $71,394,105.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $16,532,320. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. | |
(d) | The rate shown is the 7-day yield. |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/19/14 | 15 | 1,756,500 | 105,491 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $661,030,719 | $— | $— | $661,030,719 | ||||||||||||
Other Investment Company | 16,708,242 | — | — | 16,708,242 | ||||||||||||
Short-Term Investments1 | — | 3,360,305 | — | 3,360,305 | ||||||||||||
Total | $677,738,961 | $3,360,305 | $— | $681,099,266 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $105,491 | $— | $— | $105,491 |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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, 2014.
See financial notes 51
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $592,532,721) including securities on loan of $16,532,320 | $664,391,024 | |||||
Collateral invested for securities on loan, at value (cost $16,708,242) | + | 16,708,242 | ||||
Total investments, at value (cost $609,240,963) | 681,099,266 | |||||
Cash | 100,000 | |||||
Receivables: | ||||||
Investments sold | 15,552,847 | |||||
Fund shares sold | 645,784 | |||||
Dividends | 232,973 | |||||
Income from securities on loan | 61,230 | |||||
Variation margin on futures contracts | 25,800 | |||||
Interest | 3 | |||||
Prepaid expenses | + | 8,533 | ||||
Total assets | 697,726,436 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 16,708,242 | |||||
Payables: | ||||||
Investments bought | 14,312,917 | |||||
Investment adviser and administrator fees | 57,682 | |||||
Shareholder service fees | 18,495 | |||||
Fund shares redeemed | 550,218 | |||||
Accrued expenses | + | 79,078 | ||||
Total liabilities | 31,726,632 | |||||
Net Assets | ||||||
Total assets | 697,726,436 | |||||
Total liabilities | − | 31,726,632 | ||||
Net assets | $665,999,804 | |||||
Net Assets by Source | ||||||
Capital received from investors | 471,816,146 | |||||
Net investment income not yet distributed | 65,851 | |||||
Net realized capital gains | 122,154,013 | |||||
Net unrealized capital appreciation | 71,963,794 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$665,999,804 | 26,519,491 | $25.11 |
52 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,809) | $5,951,865 | |||||
Interest | 2,837 | |||||
Securities on loan | + | 317,421 | ||||
Total investment income | 6,272,123 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 5,090,478 | |||||
Shareholder service fees | 1,546,578 | |||||
Shareholder reports | 66,047 | |||||
Portfolio accounting fees | 56,313 | |||||
Custodian fees | 40,881 | |||||
Registration fees | 35,804 | |||||
Professional fees | 35,519 | |||||
Transfer agent fees | 26,609 | |||||
Independent trustees’ fees | 9,078 | |||||
Other expenses | + | 11,975 | ||||
Total expenses | 6,919,282 | |||||
Expense reduction by CSIM and its affiliates | − | 26,609 | ||||
Net expenses | − | 6,892,673 | ||||
Net investment loss | (620,550 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 125,694,089 | |||||
Net realized losses on futures contracts | + | (622,396 | ) | |||
Net realized gains | 125,071,693 | |||||
Net change in unrealized appreciation (depreciation) on investments | (55,503,802 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | (7,987 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (55,511,789 | ) | |||
Net realized and unrealized gains | 69,559,904 | |||||
Increase in net assets resulting from operations | $68,939,354 |
See financial notes 53
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income (loss) | ($620,550 | ) | $1,994,462 | |||||||
Net realized gains | 125,071,693 | 70,691,514 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (55,511,789 | ) | 89,763,924 | ||||||
Increase in net assets from operations | 68,939,354 | 162,449,900 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (1,598,911 | ) | (2,100,800 | ) | ||||||
Distributions from net realized gains | + | (56,889,199 | ) | — | ||||||
Total distributions | ($58,488,110 | ) | ($2,100,800 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 7,201,760 | $173,508,919 | 5,573,116 | $121,933,084 | ||||||||||||||
Shares reinvested | 1,076,328 | 24,841,650 | 39,481 | 707,097 | ||||||||||||||
Shares redeemed | + | (5,496,700 | ) | (133,118,038 | ) | (3,750,852 | ) | (80,237,495 | ) | |||||||||
Net transactions in fund shares | 2,781,388 | $65,232,531 | 1,861,745 | $42,402,686 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 23,738,103 | $590,316,029 | 21,876,358 | $387,564,243 | ||||||||||||||
Total increase | + | 2,781,388 | 75,683,775 | 1,861,745 | 202,751,786 | |||||||||||||
End of period | 26,519,491 | $665,999,804 | 23,738,103 | $590,316,029 | ||||||||||||||
Net investment income not yet distributed/Distributions in excess of net investment income | $65,851 | ($92,217 | ) |
54 See financial notes
Table of Contents
Schwab Hedged Equity Fund™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 18.62 | 16.36 | 15.32 | 14.79 | 13.45 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.08 | ) | (0.10 | ) | (0.08 | ) | (0.05 | ) | (0.08 | ) | ||||||||||||
Net realized and unrealized gains (losses) | 1.99 | 2.36 | 1.12 | 0.58 | 1.42 | |||||||||||||||||
Total from investment operations | 1.91 | 2.26 | 1.04 | 0.53 | 1.34 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net realized gains | (1.51 | ) | — | — | — | — | ||||||||||||||||
Net asset value at end of period | 19.02 | 18.62 | 16.36 | 15.32 | 14.79 | |||||||||||||||||
Total return (%) | 11.07 | 13.81 | 6.79 | 3.58 | 9.96 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses (including dividend expense on short sales) | 1.99 | 2.48 | 2.08 | 1.86 | 1.97 | |||||||||||||||||
Net operating expenses (excluding dividend expense on short sales) | 1.52 | 1 | 1.48 | 1 | 1.53 | 1 | 1.44 | 2 | 1.38 | 3 | ||||||||||||
Gross operating expenses | 2.02 | 2.52 | 2.13 | 1.88 | 1.99 | |||||||||||||||||
Net investment income (loss) | (0.46 | ) | (0.49 | ) | (0.47 | ) | (0.25 | ) | (0.54 | ) | ||||||||||||
Portfolio turnover rate | 142 | 130 | 109 | 98 | 115 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 200 | 193 | 194 | 236 | 329 |
1 The ratio of net operating expenses would have been 1.33% for the period ended 10/31/12, 10/31/13 and 10/31/14, respectively, if stock loan fees on short sales had not been incurred.
2 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.
3 The ratio of net operating expenses would have been 1.31%, if stock loan fees on short sales had not been incurred.
See financial notes 55
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
100 | .5% | Common Stock | 171,063,421 | 201,107,861 | ||||||||
0 | .1% | Short-Term Investments | 175,997 | 175,997 | ||||||||
100 | .6% | Total Investments | 171,239,418 | 201,283,858 | ||||||||
(38 | .4)% | Short Sales | (74,717,704 | ) | (76,728,153 | ) | ||||||
37 | .8% | Other Assets and Liabilities, Net | 75,507,418 | |||||||||
100 | .0% | Net Assets | 200,063,123 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 100.5% of net assets | ||||||||
Automobiles & Components 0.5% | ||||||||
Dana Holding Corp. | 49,779 | 1,018,478 | ||||||
Banks 5.8% | ||||||||
Bank of America Corp. | 111,244 | 1,908,947 | ||||||
Citigroup, Inc. (a) | 58,000 | 3,104,740 | ||||||
Fifth Third Bancorp | 69,798 | 1,395,262 | ||||||
Regions Financial Corp. (a) | 239,500 | 2,378,235 | ||||||
SunTrust Banks, Inc. | 7,634 | 298,795 | ||||||
The PNC Financial Services Group, Inc. (a) | 27,938 | 2,413,564 | ||||||
11,499,543 | ||||||||
Capital Goods 4.1% | ||||||||
Caterpillar, Inc. (a) | 20,601 | 2,089,147 | ||||||
Emerson Electric Co. | 17,860 | 1,144,112 | ||||||
Huntington Ingalls Industries, Inc. | 19,529 | 2,066,559 | ||||||
Masco Corp. | 76,000 | 1,677,320 | ||||||
United Rentals, Inc. * | 10,433 | 1,148,256 | ||||||
8,125,394 | ||||||||
Commercial & Professional Supplies 2.8% | ||||||||
Manpowergroup, Inc. | 2,272 | 151,656 | ||||||
Pitney Bowes, Inc. | 14,400 | 356,256 | ||||||
R.R. Donnelley & Sons Co. (a) | 216,400 | 3,776,180 | ||||||
TrueBlue, Inc. * | 53,408 | 1,320,246 | ||||||
5,604,338 | ||||||||
Consumer Services 2.1% | ||||||||
Apollo Education Group, Inc. * | 12,320 | 353,091 | ||||||
Graham Holdings Co., Class B | 1,700 | 1,332,120 | ||||||
Penn National Gaming, Inc. * | 22,700 | 297,143 | ||||||
Yum! Brands, Inc. | 30,550 | 2,194,407 | ||||||
4,176,761 | ||||||||
Diversified Financials 2.8% | ||||||||
Affiliated Managers Group, Inc. * | 8,000 | 1,598,320 | ||||||
Cash America International, Inc. | 8,300 | 407,945 | ||||||
Interactive Brokers Group, Inc., Class A (a) | 113,732 | 2,936,560 | ||||||
Lazard Ltd., Class A | 13,321 | 655,527 | ||||||
5,598,352 | ||||||||
Energy 9.1% | ||||||||
Baker Hughes, Inc. | 6,549 | 346,835 | ||||||
Basic Energy Services, Inc. * | 2,294 | 29,593 | ||||||
ConocoPhillips (a) | 51,911 | 3,745,379 | ||||||
Devon Energy Corp. | 1,400 | 84,000 | ||||||
EOG Resources, Inc. (a) | 8,439 | 802,127 | ||||||
Exxon Mobil Corp. (a) | 1,978 | 191,292 | ||||||
Green Plains, Inc. | 19,100 | 653,220 | ||||||
Kosmos Energy Ltd. * | 10,900 | 101,697 | ||||||
Marathon Oil Corp. | 23,700 | 838,980 | ||||||
Murphy Oil Corp. (a) | 17,357 | 926,690 | ||||||
National Oilwell Varco, Inc. | 50,660 | 3,679,942 | ||||||
Occidental Petroleum Corp. (a) | 41,100 | 3,655,023 | ||||||
Patterson-UTI Energy, Inc. | 24,800 | 571,144 | ||||||
Pioneer Energy Services Corp. * | 88,389 | 811,411 | ||||||
SM Energy Co. | 31,500 | 1,773,450 | ||||||
18,210,783 | ||||||||
Food & Staples Retailing 2.1% | ||||||||
The Kroger Co. (a) | 77,095 | 4,294,963 | ||||||
Food, Beverage & Tobacco 7.3% | ||||||||
Archer-Daniels-Midland Co. (a) | 82,554 | 3,880,038 | ||||||
Bunge Ltd. (a) | 42,168 | 3,738,193 | ||||||
Dr Pepper Snapple Group, Inc. | 12,752 | 883,076 | ||||||
J&J Snack Foods Corp. | 4,300 | 443,029 | ||||||
Pilgrim’s Pride Corp. *(a) | 72,700 | 2,065,407 | ||||||
Sanderson Farms, Inc. | 22,746 | 1,910,209 | ||||||
Tyson Foods, Inc., Class A | 40,700 | 1,642,245 | ||||||
14,562,197 | ||||||||
Health Care Equipment & Services 5.6% | ||||||||
Align Technology, Inc. * | 5,600 | 294,672 | ||||||
C.R. Bard, Inc. | 7,600 | 1,246,172 | ||||||
Cardinal Health, Inc. (a) | 54,138 | 4,248,750 | ||||||
Centene Corp. * | 1,293 | 119,822 | ||||||
Edwards Lifesciences Corp. * | 17,327 | 2,095,181 | ||||||
Kindred Healthcare, Inc. | 5,700 | 123,975 | ||||||
Magellan Health, Inc. *(a) | 10,846 | 656,400 | ||||||
Molina Healthcare, Inc. * | 48,839 | 2,375,529 | ||||||
11,160,501 | ||||||||
Household & Personal Products 0.3% | ||||||||
Harbinger Group, Inc. * | 29,200 | 383,688 |
56 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Herbalife Ltd. | 2,977 | 156,173 | ||||||
539,861 | ||||||||
Insurance 6.0% | ||||||||
American Equity Investment Life Holding Co. (a) | 84,900 | 2,191,269 | ||||||
AmTrust Financial Services, Inc. | 7,351 | 329,839 | ||||||
Aspen Insurance Holdings Ltd. | 72,900 | 3,180,627 | ||||||
Assurant, Inc. | 7,110 | 485,044 | ||||||
Axis Capital Holdings Ltd. | 26,329 | 1,267,478 | ||||||
Genworth Financial, Inc., Class A *(a) | 82,885 | 1,159,561 | ||||||
Reinsurance Group of America, Inc. | 39,434 | 3,322,315 | ||||||
Symetra Financial Corp. | 4,900 | 116,130 | ||||||
12,052,263 | ||||||||
Materials 3.3% | ||||||||
Ashland, Inc. | 6,100 | 659,227 | ||||||
Commercial Metals Co. | 44,900 | 776,321 | ||||||
Compass Minerals International, Inc. | 1,700 | 145,656 | ||||||
Graphic Packaging Holding Co. * | 51,410 | 623,603 | ||||||
Steel Dynamics, Inc. | 24,000 | 552,240 | ||||||
United States Steel Corp. (a) | 96,474 | 3,862,819 | ||||||
6,619,866 | ||||||||
Media 3.2% | ||||||||
Comcast Corp., Class A | 15,316 | 847,740 | ||||||
John Wiley & Sons, Inc., Class A | 33,966 | 1,983,275 | ||||||
Live Nation Entertainment, Inc. *(a) | 136,443 | 3,547,518 | ||||||
6,378,533 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.8% | ||||||||
Amgen, Inc. | 19,700 | 3,194,946 | ||||||
Celgene Corp. *(a) | 1,297 | 138,896 | ||||||
Gilead Sciences, Inc. * | 27,487 | 3,078,544 | ||||||
Merck & Co., Inc. (a) | 51,423 | 2,979,449 | ||||||
Pfizer, Inc. (a) | 142,876 | 4,279,136 | ||||||
13,670,971 | ||||||||
Real Estate 4.3% | ||||||||
Ashford Hospitality Trust | 14,204 | 160,505 | ||||||
Brandywine Realty Trust | 100,500 | 1,550,715 | ||||||
CBRE Group, Inc., Class A * | 14,940 | 478,080 | ||||||
Duke Realty Corp. | 77,592 | 1,471,144 | ||||||
DuPont Fabros Technology, Inc. | 28,196 | 873,230 | ||||||
Equity Lifestyle Properties, Inc. | 26,826 | 1,317,157 | ||||||
RLJ Lodging Trust (a) | 66,501 | 2,142,662 | ||||||
SL Green Realty Corp. | 5,734 | 663,424 | ||||||
8,656,917 | ||||||||
Retailing 7.9% | ||||||||
Aaron’s, Inc. | 26,578 | 658,071 | ||||||
Abercrombie & Fitch Co., Class A | 15,969 | 534,642 | ||||||
ANN, Inc. *(a) | 40,039 | 1,537,097 | ||||||
Best Buy Co., Inc. | 33,300 | 1,136,862 | ||||||
Big Lots, Inc. | 5,085 | 232,130 | ||||||
Brown Shoe Co., Inc. | 9,200 | 244,628 | ||||||
Kohl’s Corp. | 24,142 | 1,308,979 | ||||||
Lowe’s Cos., Inc. (a) | 51,355 | 2,937,506 | ||||||
Macy’s, Inc. (a) | 64,321 | 3,719,040 | ||||||
Outerwall, Inc. * | 27,361 | 1,731,131 | ||||||
The Children’s Place, Inc. | 23,300 | 1,147,525 | ||||||
The Finish Line, Inc., Class A | 13,047 | 345,354 | ||||||
The Gap, Inc. | 9,078 | 343,966 | ||||||
15,876,931 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Spansion, Inc., Class A * | 20,000 | 411,600 | ||||||
Software & Services 11.7% | ||||||||
Aspen Technology, Inc. * | 23,900 | 882,627 | ||||||
CA, Inc. (a) | 60,398 | 1,755,166 | ||||||
Computer Sciences Corp. | 62,574 | 3,779,470 | ||||||
comScore, Inc. * | 15,711 | 662,062 | ||||||
Convergys Corp. | 32,016 | 645,763 | ||||||
Electronic Arts, Inc. *(a) | 101,789 | 4,170,295 | ||||||
Intuit, Inc. | 1,896 | 166,867 | ||||||
LogMeIn, Inc. * | 10,460 | 502,603 | ||||||
Microsoft Corp. (a) | 25,650 | 1,204,267 | ||||||
Oracle Corp. (a) | 84,300 | 3,291,915 | ||||||
Pegasystems, Inc. | 4,623 | 100,180 | ||||||
PTC, Inc. * | 25,400 | 969,010 | ||||||
Synopsys, Inc. * | 40,700 | 1,667,886 | ||||||
Take-Two Interactive Software, Inc. *(a) | 112,200 | 2,967,690 | ||||||
Xerox Corp. | 45,300 | 601,584 | ||||||
23,367,385 | ||||||||
Technology Hardware & Equipment 7.1% | ||||||||
Apple, Inc. (a) | 39,907 | 4,309,956 | ||||||
ARRIS Group, Inc. * | 3,291 | 98,796 | ||||||
Brocade Communications Systems, Inc. (a) | 228,524 | 2,452,062 | ||||||
CDW Corp. | 10,377 | 320,027 | ||||||
EchoStar Corp., Class A *(a) | 2,970 | 138,788 | ||||||
Hewlett-Packard Co. (a) | 53,869 | 1,932,820 | ||||||
II-VI, Inc. * | 11,897 | 160,491 | ||||||
NetApp, Inc. | 53,838 | 2,304,266 | ||||||
Western Digital Corp. (a) | 25,479 | 2,506,369 | ||||||
14,223,575 | ||||||||
Telecommunication Services 0.0% | ||||||||
Windstream Holdings, Inc. | 4,054 | 42,486 | ||||||
Transportation 1.3% | ||||||||
Alaska Air Group, Inc. | 3,800 | 202,274 | ||||||
ArcBest Corp. | 737 | 28,522 | ||||||
Con-way, Inc. | 32,327 | 1,402,022 | ||||||
Southwest Airlines Co. | 27,100 | 934,408 | ||||||
2,567,226 | ||||||||
Utilities 6.2% | ||||||||
AES Corp. (a) | 242,428 | 3,410,962 | ||||||
Calpine Corp. *(a) | 132,374 | 3,020,775 | ||||||
Entergy Corp. (a) | 48,656 | 4,088,077 | ||||||
NRG Energy, Inc. | 55,351 | 1,659,423 |
See financial notes 57
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Vectren Corp. | 6,000 | 269,700 | ||||||
12,448,937 | ||||||||
Total Common Stock | ||||||||
(Cost $171,063,421) | 201,107,861 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (b) | 20,000 | 20,000 | ||||||
0.01%, 12/18/14 (b) | 156,000 | 155,997 | ||||||
Total Short-Term Investments | ||||||||
(Cost $175,997) | 175,997 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $171,295,062 and the unrealized appreciation and depreciation were $33,713,856 and ($3,725,060), respectively, with a net unrealized appreciation of $29,988,796.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for short sales | |
(b) | The rate shown is the purchase yield. |
58 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Short Sales 38.4% of net assets | ||||||||
Automobiles & Components 0.4% | ||||||||
Dorman Products, Inc. * | 17,200 | 797,392 | ||||||
Banks 1.8% | ||||||||
Signature Bank * | 7,200 | 872,136 | ||||||
Texas Capital Bancshares, Inc. * | 42,927 | 2,624,986 | ||||||
3,497,122 | ||||||||
Capital Goods 2.8% | ||||||||
Chart Industries, Inc. * | 3,600 | 167,580 | ||||||
DigitalGlobe, Inc. * | 52,072 | 1,488,738 | ||||||
Fastenal Co. | 47,300 | 2,083,092 | ||||||
Proto Labs, Inc. * | 17,067 | 1,115,670 | ||||||
SolarCity Corp. * | 6,200 | 366,916 | ||||||
Triumph Group, Inc. | 5,000 | 348,150 | ||||||
5,570,146 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Healthcare Services Group, Inc. | 5,100 | 151,878 | ||||||
The Advisory Board Co. * | 14,400 | 772,848 | ||||||
924,726 | ||||||||
Consumer Durables & Apparel 1.2% | ||||||||
Kate Spade & Co. * | 55,108 | 1,495,080 | ||||||
TRI Pointe Homes, Inc. * | 2,366 | 32,391 | ||||||
Under Armour, Inc., Class A * | 14,100 | 924,678 | ||||||
2,452,149 | ||||||||
Consumer Services 0.4% | ||||||||
Caesars Entertainment Corp. * | 3,487 | 42,507 | ||||||
Norwegian Cruise Line Holdings Ltd. * | 21,462 | 837,018 | ||||||
879,525 | ||||||||
Diversified Financials 2.7% | ||||||||
American Express Co. | 33,469 | 3,010,536 | ||||||
Federated Investors, Inc., Class B | 41,700 | 1,303,959 | ||||||
Financial Engines, Inc. | 14,970 | 596,854 | ||||||
Leucadia National Corp. | 6,600 | 156,948 | ||||||
Virtus Investment Partners, Inc. | 1,300 | 232,973 | ||||||
5,301,270 | ||||||||
Energy 4.5% | ||||||||
Atwood Oceanics, Inc. * | 26,300 | 1,069,095 | ||||||
Cheniere Energy, Inc. * | 16,200 | 1,215,000 | ||||||
Cobalt International Energy, Inc. * | 108,600 | 1,271,706 | ||||||
Diamondback Energy, Inc. * | 22,856 | 1,564,265 | ||||||
Golar LNG Ltd. | 14,005 | 785,821 | ||||||
Gulfport Energy Corp. * | 8,400 | 421,512 | ||||||
Oasis Petroleum, Inc. * | 19,339 | 579,396 | ||||||
Range Resources Corp. | 4,396 | 300,686 | ||||||
Scorpio Tankers, Inc. | 40,400 | 352,692 | ||||||
Seadrill Ltd. | 65,376 | 1,503,648 | ||||||
9,063,821 | ||||||||
Food & Staples Retailing 1.1% | ||||||||
United Natural Foods, Inc. * | 32,900 | 2,237,858 | ||||||
Health Care Equipment & Services 0.7% | ||||||||
Acadia Healthcare Co., Inc. * | 17,306 | 1,073,837 | ||||||
Intuitive Surgical, Inc. * | 700 | 347,060 | ||||||
1,420,897 | ||||||||
Insurance 1.2% | ||||||||
RLI Corp. | 46,400 | 2,300,976 | ||||||
Materials 4.2% | ||||||||
FMC Corp. | 27,900 | 1,600,065 | ||||||
Louisiana-Pacific Corp. * | 235,400 | 3,436,840 | ||||||
Southern Copper Corp. | 28,885 | 831,310 | ||||||
W.R. Grace & Co. * | 27,093 | 2,562,998 | ||||||
8,431,213 | ||||||||
Media 0.6% | ||||||||
DreamWorks Animation SKG, Inc., Class A * | 39,400 | 877,832 | ||||||
Loral Space & Communications, Inc. * | 5,400 | 413,100 | ||||||
1,290,932 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Perrigo Co., plc | 1,288 | 207,948 | ||||||
Real Estate 0.5% | ||||||||
American Realty Capital Properties, Inc. | 108,899 | 965,934 | ||||||
Retailing 3.1% | ||||||||
Cabela’s, Inc. * | 39,561 | 1,899,719 | ||||||
CarMax, Inc. * | 52,200 | 2,918,502 | ||||||
Restoration Hardware Holdings, Inc. * | 16,263 | 1,306,244 | ||||||
6,124,465 | ||||||||
Semiconductors & Semiconductor Equipment 0.6% | ||||||||
SunEdison, Inc. * | 48,000 | 936,480 | ||||||
SunPower Corp. * | 10,500 | 334,320 | ||||||
1,270,800 | ||||||||
Software & Services 7.7% | ||||||||
Cornerstone OnDemand, Inc. * | 13,305 | 482,572 | ||||||
Demandware, Inc. * | 9,489 | 568,866 | ||||||
LinkedIn Corp., Class A * | 3,200 | 732,672 | ||||||
NetSuite, Inc. * | 29,458 | 3,200,906 | ||||||
Qlik Technologies, Inc. * | 54,896 | 1,556,302 | ||||||
Splunk, Inc. * | 33,525 | 2,215,332 | ||||||
Tableau Software, Inc., Class A * | 16,393 | 1,353,898 | ||||||
The Ultimate Software Group, Inc. * | 7,414 | 1,115,881 | ||||||
WEX, Inc. * | 22,161 | 2,516,603 | ||||||
Workday, Inc., Class A * | 18,283 | 1,745,661 | ||||||
15,488,693 |
See financial notes 59
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Technology Hardware & Equipment 1.8% | ||||||||
Finisar Corp. * | 44 | 736 | ||||||
Palo Alto Networks, Inc. * | 4,649 | 491,399 | ||||||
Stratasys Ltd. * | 10,431 | 1,255,475 | ||||||
ViaSat, Inc. * | 28,392 | 1,778,475 | ||||||
3,526,085 | ||||||||
Transportation 0.3% | ||||||||
Kansas City Southern | 3,900 | 478,881 | ||||||
XPO Logistics, Inc. * | 3,791 | 151,337 | ||||||
630,218 | ||||||||
Utilities 2.2% | ||||||||
ALLETE, Inc. | 8,000 | 417,920 | ||||||
Dominion Resources, Inc. | 24,985 | 1,781,431 | ||||||
ITC Holdings Corp. | 48,374 | 1,916,094 | ||||||
SCANA Corp. | 4,200 | 230,538 | ||||||
4,345,983 | ||||||||
Total Short Sales | ||||||||
(Proceeds $74,717,704) | 76,728,153 | |||||||
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, 2014 (see financial note 2(a) for additional information):
Assets Valuation Input
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $201,107,861 | $— | $— | $201,107,861 | ||||||||||||
Short-Term Investments1 | — | 175,997 | — | 175,997 | ||||||||||||
Total | $201,107,861 | $175,997 | $— | $201,283,858 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Short Sales1 | ($76,728,153 | ) | $— | $— | ($76,728,153 | ) |
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, 2014.
60 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $171,239,418) | $201,283,858 | |||||
Deposits with broker for short sales | 76,307,514 | |||||
Receivables: | ||||||
Investments sold | 2,804,987 | |||||
Fund shares sold | 423,448 | |||||
Dividends | 129,674 | |||||
Prepaid expenses | + | 6,905 | ||||
Total assets | 280,956,386 | |||||
Liabilities | ||||||
Securities sold short, at value (proceeds $74,717,704) | 76,728,153 | |||||
Payables: | ||||||
Investments bought | 2,930,339 | |||||
Investment adviser and administrator fees | 22,479 | |||||
Shareholder service fees | 6,226 | |||||
Due to custodian | 1,105,824 | |||||
Fund shares redeemed | 40,722 | |||||
Dividends on short sales | 15,264 | |||||
Accrued expenses | + | 44,256 | ||||
Total liabilities | 80,893,263 | |||||
Net Assets | ||||||
Total assets | 280,956,386 | |||||
Total liabilities | − | 80,893,263 | ||||
Net assets | $200,063,123 | |||||
Net Assets by Source | ||||||
Capital received from investors | 149,106,410 | |||||
Net investment loss | (2,468,247 | ) | ||||
Net realized capital gains | 25,390,969 | |||||
Net unrealized capital appreciation | 28,033,991 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$200,063,123 | 10,520,618 | $19.02 |
See financial notes 61
Table of Contents
Schwab Hedged Equity Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends | $2,917,111 | |||||
Interest | + | 21 | ||||
Total investment income | 2,917,132 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,998,791 | |||||
Shareholder service fees | 437,591 | |||||
Dividends on short sales | 892,589 | |||||
Stock loan fees on short sales | 358,355 | |||||
Professional fees | 45,238 | |||||
Transfer agent fees | 36,612 | |||||
Registration fees | 25,641 | |||||
Shareholder reports | 16,532 | |||||
Custodian fees | 14,633 | |||||
Portfolio accounting fees | 11,998 | |||||
Independent trustees’ fees | 7,002 | |||||
Interest expense | 692 | |||||
Other expenses | + | 4,563 | ||||
Total expenses | 3,850,237 | |||||
Expense reduction by CSIM and its affiliates | − | 66,799 | ||||
Net expenses | − | 3,783,438 | ||||
Net investment loss | (866,306 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 8,596,512 | |||||
Net realized gains on futures contracts | 82,056 | |||||
Net realized gains on short sales | + | 16,785,799 | ||||
Net realized gains | 25,464,367 | |||||
Net change in unrealized appreciation (depreciation) on investments | (15,247,458 | ) | ||||
Net change in unrealized appreciation (depreciation) on short sales | + | 10,538,311 | ||||
Net change in unrealized appreciation (depreciation) | + | (4,709,147 | ) | |||
Net realized and unrealized gains | 20,755,220 | |||||
Increase in net assets resulting from operations | $19,888,914 |
62 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment loss | ($866,306 | ) | ($961,232 | ) | ||||||
Net realized gains | 25,464,367 | 17,802,813 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (4,709,147 | ) | 8,282,576 | ||||||
Increase in net assets from operations | 19,888,914 | 25,124,157 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net realized gains | ($15,225,593 | ) | $— |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,013,414 | $36,941,019 | 2,580,370 | $44,945,152 | ||||||||||||||
Shares reinvested | 781,617 | 13,490,717 | — | — | ||||||||||||||
Shares redeemed | + | (2,622,388 | ) | (47,702,546 | ) | (4,113,122 | ) | (71,764,454 | ) | |||||||||
Net transactions in fund shares | 172,643 | $2,729,190 | (1,532,752 | ) | ($26,819,302 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 10,347,975 | $192,670,612 | 11,880,727 | $194,365,757 | ||||||||||||||
Total increase or decrease | + | 172,643 | 7,392,511 | (1,532,752 | ) | (1,695,145 | ) | |||||||||||
End of period | 10,520,618 | $200,063,123 | 10,347,975 | $192,670,612 | ||||||||||||||
Net investment loss | ($2,468,247 | ) | ($1,708,651 | ) |
See financial notes 63
Table of Contents
Schwab Financial Services Fund™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.76 | 10.66 | 9.17 | 9.74 | 8.77 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.11 | 0.11 | 0.08 | 0.05 | 0.04 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.07 | 3.08 | 1.46 | (0.58 | ) | 0.99 | ||||||||||||||||
Total from investment operations | 2.18 | 3.19 | 1.54 | (0.53 | ) | 1.03 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.12 | ) | (0.09 | ) | (0.05 | ) | (0.04 | ) | (0.06 | ) | ||||||||||||
Net asset value at end of period | 15.82 | 13.76 | 10.66 | 9.17 | 9.74 | |||||||||||||||||
Total return (%) | 15.92 | 30.20 | 16.92 | (5.51 | ) | 11.79 | �� | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.90 | 0.94 | 0.94 | 0.93 | 1 | 0.95 | 2 | |||||||||||||||
Gross operating expenses | 0.95 | 1.03 | 1.10 | 1.06 | 1.04 | |||||||||||||||||
Net investment income (loss) | 0.76 | 0.91 | 0.78 | 0.45 | 0.37 | |||||||||||||||||
Portfolio turnover rate | 75 | 74 | 84 | 77 | 54 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 78 | 66 | 47 | 40 | 52 |
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.
64 See financial notes
Table of Contents
Schwab Financial Services Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .6% | Common Stock | 62,301,615 | 77,473,204 | ||||||||
1 | .5% | Other Investment Company | 1,192,275 | 1,192,275 | ||||||||
0 | .5% | Short-Term Investments | 369,765 | 369,765 | ||||||||
101 | .6% | Total Investments | 63,863,655 | 79,035,244 | ||||||||
(1 | .6%) | Other Assets and Liabilities, Net | (1,216,936 | ) | ||||||||
100 | .0% | Net Assets | 77,818,308 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.6% of net assets | ||||||||
Banks 33.3% | ||||||||
Bank of America Corp. | 197,723 | 3,392,927 | ||||||
BNC Bancorp | 6,463 | 109,936 | ||||||
Citigroup, Inc. | 68,903 | 3,688,377 | ||||||
Fifth Third Bancorp | 33,700 | 673,663 | ||||||
First Bancorp (North Carolina) | 10,600 | 192,072 | ||||||
First Defiance Financial Corp. | 3,308 | 101,324 | ||||||
Huntington Bancshares, Inc. | 69,000 | 683,790 | ||||||
JPMorgan Chase & Co. | 67,820 | 4,101,753 | ||||||
KeyCorp | 44,497 | 587,360 | ||||||
OFG Bancorp | 95,768 | 1,491,108 | ||||||
Regions Financial Corp. | 82,500 | 819,225 | ||||||
The PNC Financial Services Group, Inc. | 30,205 | 2,609,410 | ||||||
Wells Fargo & Co. | 125,000 | 6,636,250 | ||||||
WSFS Financial Corp. | 10,884 | 856,027 | ||||||
25,943,222 | ||||||||
Diversified Financials 24.6% | ||||||||
Affiliated Managers Group, Inc. * | 8,863 | 1,770,739 | ||||||
Berkshire Hathaway, Inc., Class B * | 25,986 | 3,642,198 | ||||||
Calamos Asset Management, Inc., Class A | 5,365 | 73,500 | ||||||
Capital One Financial Corp. | 22,182 | 1,836,004 | ||||||
Cash America International, Inc. | 7,578 | 372,459 | ||||||
Discover Financial Services | 33,588 | 2,142,243 | ||||||
Interactive Brokers Group, Inc., Class A | 19,700 | 508,654 | ||||||
Lazard Ltd., Class A | 33,473 | 1,647,206 | ||||||
Manning & Napier, Inc. | 8,270 | 130,997 | ||||||
McGraw Hill Financial, Inc. | 11,817 | 1,069,202 | ||||||
Morgan Stanley | 81,089 | 2,834,060 | ||||||
Nelnet, Inc., Class A | 13,100 | 623,429 | ||||||
SEI Investments Co. | 24,698 | 954,825 | ||||||
The Bank of New York Mellon Corp. | 10,433 | 403,966 | ||||||
Voya Financial, Inc. | 29,400 | 1,153,950 | ||||||
19,163,432 | ||||||||
Insurance 20.9% | ||||||||
American Equity Investment Life Holding Co. | 50,200 | 1,295,662 | ||||||
AmTrust Financial Services, Inc. (a) | 27,940 | 1,253,668 | ||||||
Aspen Insurance Holdings Ltd. | 16,600 | 724,258 | ||||||
Assurant, Inc. | 4,000 | 272,880 | ||||||
Assured Guaranty Ltd. | 55,367 | 1,277,870 | ||||||
Axis Capital Holdings Ltd. | 3,398 | 163,580 | ||||||
CNA Financial Corp. | 38,072 | 1,487,854 | ||||||
Genworth Financial, Inc., Class A * | 127,624 | 1,785,460 | ||||||
Maiden Holdings Ltd. | 77,675 | 928,216 | ||||||
MetLife, Inc. | 29,500 | 1,600,080 | ||||||
Prudential Financial, Inc. | 10,900 | 965,086 | ||||||
Reinsurance Group of America, Inc. | 22,635 | 1,906,999 | ||||||
Symetra Financial Corp. | 63,952 | 1,515,662 | ||||||
The Allstate Corp. | 11,899 | 771,650 | ||||||
The Hanover Insurance Group, Inc. | 4,100 | 274,454 | ||||||
16,223,379 | ||||||||
Real Estate 20.8% | ||||||||
American Campus Communities, Inc. | 4,857 | 190,734 | ||||||
CBRE Group, Inc., Class A * | 51,900 | 1,660,800 | ||||||
Cedar Realty Trust, Inc. | 30,118 | 207,212 | ||||||
Cousins Properties, Inc. | 65,823 | 856,357 | ||||||
Duke Realty Corp. | 102,147 | 1,936,707 | ||||||
DuPont Fabros Technology, Inc. | 11,400 | 353,058 | ||||||
Equity Lifestyle Properties, Inc. | 23,346 | 1,146,289 | ||||||
Host Hotels & Resorts, Inc. | 24,500 | 571,095 | ||||||
Kilroy Realty Corp. | 17,820 | 1,207,127 | ||||||
PS Business Parks, Inc. | 15,610 | 1,314,674 | ||||||
Retail Properties of America, Inc., Class A | 11,000 | 172,590 | ||||||
RLJ Lodging Trust | 36,501 | 1,176,062 | ||||||
Saul Centers, Inc. | 6,800 | 373,660 | ||||||
Simon Property Group, Inc. | 16,113 | 2,887,611 | ||||||
SL Green Realty Corp. | 18,057 | 2,089,195 | ||||||
16,143,171 | ||||||||
Total Common Stock | ||||||||
(Cost $62,301,615) | 77,473,204 | |||||||
Other Investment Company 1.5% of net assets | ||||||||
Securities Lending Collateral 1.5% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (c) | 1,192,275 | 1,192,275 | ||||||
Total Other Investment Company | ||||||||
(Cost $1,192,275) | 1,192,275 | |||||||
See financial notes 65
Table of Contents
Schwab Financial Services Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.5% of net assets | ||||||||
Time Deposit 0.4% | ||||||||
DNB | ||||||||
0.03%, 11/03/14 | 277,766 | 277,766 | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/18/14 (b) | 92,000 | 91,999 | ||||||
Total Short-Term Investments | ||||||||
(Cost $369,765) | 369,765 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $63,898,772 and the unrealized appreciation and depreciation were $15,416,656 and ($280,184), respectively, with a net unrealized appreciation of $15,136,472.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $1,188,831. | |
(b) | The rate shown is the purchase yield. | |
(c) | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $77,473,204 | $— | $— | $77,473,204 | ||||||||||||
Other Investment Company | — | 1,192,275 | — | 1,192,275 | ||||||||||||
Short-Term Investments1 | — | 369,765 | — | 369,765 | ||||||||||||
Total | $77,473,204 | $1,562,040 | $— | $79,035,244 | ||||||||||||
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, 2014.
66 See financial notes
Table of Contents
Schwab Financial Services Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $62,671,380) including securities on loan of $1,188,831 | $77,842,969 | |||||
Collateral invested for securities on loan, at value (cost $1,192,275) | + | 1,192,275 | ||||
Total investments, at value (cost $63,863,655) | 79,035,244 | |||||
Receivables: | ||||||
Fund shares sold | 81,654 | |||||
Dividends | 37,325 | |||||
Income from securities on loan | 15,885 | |||||
Receivable from investment adviser | 133 | |||||
Prepaid expenses | + | 1,589 | ||||
Total assets | 79,171,830 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 1,192,275 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 4,522 | |||||
Shareholder service fees | 4,415 | |||||
Fund shares redeemed | 125,333 | |||||
Accrued expenses | + | 26,977 | ||||
Total liabilities | 1,353,522 | |||||
Net Assets | ||||||
Total assets | 79,171,830 | |||||
Total liabilities | − | 1,353,522 | ||||
Net assets | $77,818,308 | |||||
Net Assets by Source | ||||||
Capital received from investors | 85,470,296 | |||||
Net investment income not yet distributed | 305,727 | |||||
Net realized capital losses | (23,129,304 | ) | ||||
Net unrealized capital appreciation | 15,171,589 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$77,818,308 | 4,919,639 | $15.82 |
See financial notes 67
Table of Contents
Schwab Financial Services Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $27) | $1,186,995 | |||||
Interest | 208 | |||||
Securities on loan | + | 16,456 | ||||
Total investment income | 1,203,659 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 391,564 | |||||
Shareholder service fees | 174,467 | |||||
Transfer agent fees | 31,203 | |||||
Professional fees | 28,843 | |||||
Registration fees | 19,292 | |||||
Shareholder reports | 17,711 | |||||
Portfolio accounting fees | 10,637 | |||||
Independent trustees’ fees | 6,428 | |||||
Custodian fees | 4,708 | |||||
Other expenses | + | 2,038 | ||||
Total expenses | 686,891 | |||||
Expense reduction by CSIM and its affiliates | − | 31,203 | ||||
Net expenses | − | 655,688 | ||||
Net investment income | 547,971 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 8,305,480 | |||||
Net realized gains on futures contracts | + | 19,229 | ||||
Net realized gains | 8,324,709 | |||||
Net change in unrealized appreciation (depreciation) on investments | + | 1,496,790 | ||||
Net realized and unrealized gains | 9,821,499 | |||||
Increase in net assets resulting from operations | $10,369,470 |
68 See financial notes
Table of Contents
Schwab Financial Services Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $547,971 | $519,997 | ||||||||
Net realized gains | 8,324,709 | 4,302,893 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 1,496,790 | 9,540,044 | |||||||
Increase in net assets from operations | 10,369,470 | 14,362,934 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($544,804 | ) | ($406,901 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,726,999 | $25,585,699 | 1,625,426 | $20,364,480 | ||||||||||||||
Shares reinvested | 33,720 | 471,741 | 33,206 | 353,309 | ||||||||||||||
Shares redeemed | + | (1,631,931 | ) | (23,993,680 | ) | (1,249,074 | ) | (15,437,977 | ) | |||||||||
Net transactions in fund shares | 128,788 | $2,063,760 | 409,558 | $5,279,812 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 4,790,851 | $65,929,882 | 4,381,293 | $46,694,037 | ||||||||||||||
Total increase | + | 128,788 | 11,888,426 | 409,558 | 19,235,845 | |||||||||||||
End of period | 4,919,639 | $77,818,308 | 4,790,851 | $65,929,882 | ||||||||||||||
Net investment income not yet distributed | $305,727 | $338,279 |
See financial notes 69
Table of Contents
Schwab Health Care Fund™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 24.57 | 20.59 | 17.29 | 15.48 | 13.41 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.22 | 0.27 | 0.15 | 0.19 | |||||||||||||||||
Net realized and unrealized gains (losses) | 5.84 | 6.26 | 3.18 | 1.85 | 2.01 | |||||||||||||||||
Total from investment operations | 6.07 | 6.48 | 3.45 | 2.00 | 2.20 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.33 | ) | (0.15 | ) | (0.19 | ) | (0.13 | ) | ||||||||||||
Distributions from net realized gains | (2.26 | ) | (2.17 | ) | — | — | — | |||||||||||||||
Total distributions | (2.45 | ) | (2.50 | ) | (0.15 | ) | (0.19 | ) | (0.13 | ) | ||||||||||||
Net asset value at end of period | 28.19 | 24.57 | 20.59 | 17.29 | 15.48 | |||||||||||||||||
Total return (%) | 27.06 | 35.46 | 20.10 | 13.00 | 16.49 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.80 | 0.82 | 0.82 | 0.81 | 1 | 0.82 | ||||||||||||||||
Gross operating expenses | 0.81 | 0.83 | 0.85 | 0.85 | 0.86 | |||||||||||||||||
Net investment income (loss) | 0.93 | 1.06 | 1.44 | 0.85 | 1.14 | |||||||||||||||||
Portfolio turnover rate | 57 | 54 | 60 | 24 | 37 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,064 | 816 | 511 | 414 | 410 |
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.
70 See financial notes
Table of Contents
Schwab Health Care Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .5% | Common Stock | 755,463,284 | 1,037,931,809 | ||||||||
0 | .4% | Other Investment Company | 4,174,429 | 4,174,429 | ||||||||
2 | .1% | Short-Term Investments | 22,136,246 | 22,136,246 | ||||||||
100 | .0% | Total Investments | 781,773,959 | 1,064,242,484 | ||||||||
(0 | .0%) | Other Assets and Liabilities, Net | (119,207 | ) | ||||||||
100 | .0% | Net Assets | 1,064,123,277 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.5% of net assets | ||||||||
Australia 0.6% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
CSL Ltd. | 85,764 | 6,055,186 | ||||||
Denmark 1.1% | ||||||||
Health Care Equipment & Services 1.1% | ||||||||
Coloplast A/S, Class B | 137,656 | 11,998,271 | ||||||
Germany 1.7% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||
Merck KGaA | 196,910 | 17,825,145 | ||||||
Hong Kong 0.1% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Sino Biopharmaceutical Ltd. | 1,320,000 | 1,328,960 | ||||||
Ireland 1.3% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.3% | ||||||||
Actavis plc * | 52,500 | 12,743,850 | ||||||
Endo International plc * | 25,800 | 1,726,536 | ||||||
14,470,386 | ||||||||
Israel 2.5% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.5% | ||||||||
Taro Pharmaceutical Industries Ltd. * | 5,988 | 969,697 | ||||||
Teva Pharmaceutical Industries Ltd. | 457,825 | 25,843,003 | ||||||
26,812,700 | ||||||||
Japan 3.4% | ||||||||
Health Care Equipment & Services 0.5% | ||||||||
Alfresa Holdings Corp. | 305,600 | 3,878,037 | ||||||
BML, Inc. | 6,600 | 197,081 | ||||||
Nihon Kohden Corp. | 21,800 | 1,114,564 | ||||||
5,189,682 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.9% | ||||||||
Astellas Pharma, Inc. | 873,300 | 13,554,042 | ||||||
Chugai Pharmaceutical Co., Ltd. | 95,200 | 2,976,212 | ||||||
Kaken Pharmaceutical Co., Ltd. | 146,000 | 3,657,886 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 544,000 | 6,344,858 | ||||||
Mitsubishi Tanabe Pharma Corp. | 113,000 | 1,718,411 | ||||||
Shionogi & Co., Ltd. | 119,200 | 3,118,480 | ||||||
31,369,889 | ||||||||
36,559,571 | ||||||||
Malaysia 0.0% | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Kossan Rubber Industries | 128,800 | 180,126 | ||||||
Netherlands Antilles 0.0% | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Orthofix International N.V. * | 13,100 | 384,485 | ||||||
Republic of Korea 0.1% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Bukwang Pharmaceutical Co., Ltd. | 42,090 | 783,718 | ||||||
South Africa 0.1% | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Netcare Ltd. | 236,136 | 714,402 | ||||||
Switzerland 8.5% | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Sonova Holding AG - Reg’d | 9,562 | 1,491,011 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.4% | ||||||||
Actelion Ltd. - Reg’d * | 79,364 | 9,451,867 | ||||||
Lonza Group AG - Reg’d * | 165,759 | 18,264,407 | ||||||
Novartis AG - Reg’d | 503,736 | 46,748,139 | ||||||
Roche Holding AG | 48,764 | 14,390,323 | ||||||
88,854,736 | ||||||||
90,345,747 | ||||||||
United Kingdom 1.8% | ||||||||
Health Care Equipment & Services 0.8% | ||||||||
Smith & Nephew plc | 490,780 | 8,331,147 |
See financial notes 71
Table of Contents
Schwab Health Care Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.0% | ||||||||
AstraZeneca plc | 143,944 | 10,514,872 | ||||||
18,846,019 | ||||||||
United States 76.3% | ||||||||
Health Care Equipment & Services 24.6% | ||||||||
Aetna, Inc. | 333,100 | 27,484,081 | ||||||
Alere, Inc. * | 85,600 | 3,421,432 | ||||||
Align Technology, Inc. * | 275,900 | 14,517,858 | ||||||
Alliance HealthCare Services, Inc. * | 17,700 | 427,101 | ||||||
AngioDynamics, Inc. * | 58,500 | 994,500 | ||||||
Anika Therapeutics, Inc. * | 56,100 | 2,251,854 | ||||||
Becton, Dickinson & Co. | 47,400 | 6,100,380 | ||||||
Boston Scientific Corp. * | 832,900 | 11,060,912 | ||||||
C.R. Bard, Inc. | 154,200 | 25,284,174 | ||||||
Cardinal Health, Inc. | 273,600 | 21,472,128 | ||||||
Centene Corp. * | 97,600 | 9,044,592 | ||||||
CONMED Corp. | 70,500 | 2,960,295 | ||||||
CorVel Corp. * | 27,100 | 932,782 | ||||||
DaVita HealthCare Partners, Inc. * | 44,800 | 3,497,536 | ||||||
Edwards Lifesciences Corp. * | 122,800 | 14,848,976 | ||||||
Express Scripts Holding Co. * | 156,000 | 11,983,920 | ||||||
Gentiva Health Services, Inc. * | 28,100 | 553,570 | ||||||
Globus Medical, Inc., Class A * | 86,500 | 1,917,705 | ||||||
Greatbatch, Inc. * | 111,928 | 5,617,666 | ||||||
HCA Holdings, Inc. * | 22,900 | 1,604,145 | ||||||
Health Net, Inc. * | 128,200 | 6,090,782 | ||||||
Hill-Rom Holdings, Inc. | 121,900 | 5,422,112 | ||||||
Kindred Healthcare, Inc. | 419,841 | 9,131,542 | ||||||
LifePoint Hospitals, Inc. * | 73,200 | 5,124,000 | ||||||
Magellan Health, Inc. * | 85,300 | 5,162,356 | ||||||
McKesson Corp. | 101,500 | 20,646,115 | ||||||
Molina Healthcare, Inc. * | 181,500 | 8,828,160 | ||||||
NuVasive, Inc. * | 87,900 | 3,595,110 | ||||||
Omnicell, Inc. * | 15,200 | 491,112 | ||||||
PharMerica Corp. * | 48,800 | 1,400,072 | ||||||
Quality Systems, Inc. | 127,200 | 1,921,992 | ||||||
St. Jude Medical, Inc. | 84,300 | 5,409,531 | ||||||
Stryker Corp. | 67,100 | 5,873,263 | ||||||
The Providence Service Corp. * | 49,200 | 2,173,656 | ||||||
Thoratec Corp. * | 88,800 | 2,413,584 | ||||||
UnitedHealth Group, Inc. | 67,600 | 6,422,676 | ||||||
VCA, Inc. * | 126,000 | 5,741,820 | ||||||
261,823,490 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 51.7% | ||||||||
AbbVie, Inc. | 830,900 | 52,728,914 | ||||||
Acorda Therapeutics, Inc. * | 44,700 | 1,556,454 | ||||||
Affymetrix, Inc. * | 221,900 | 1,999,319 | ||||||
Agilent Technologies, Inc. | 26,700 | 1,475,976 | ||||||
Alexion Pharmaceuticals, Inc. * | 35,300 | 6,755,008 | ||||||
Allergan, Inc. | 133,260 | 25,327,396 | ||||||
Amgen, Inc. | 359,800 | 58,352,364 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 68,000 | 7,671,760 | ||||||
BioCryst Pharmaceuticals, Inc. * | 184,600 | 2,163,512 | ||||||
Biogen Idec, Inc. * | 122,900 | 39,460,732 | ||||||
Bristol-Myers Squibb Co. | 117,255 | 6,823,068 | ||||||
Celgene Corp. * | 405,700 | 43,446,413 | ||||||
Covance, Inc. * | 15,400 | 1,230,460 | ||||||
Dyax Corp. * | 342,800 | 4,240,436 | ||||||
Eli Lilly & Co. | 205,100 | 13,604,283 | ||||||
Emergent Biosolutions, Inc. * | 57,800 | 1,307,436 | ||||||
Gilead Sciences, Inc. * | 478,500 | 53,592,000 | ||||||
Hyperion Therapeutics, Inc. * | 17,800 | 432,540 | ||||||
Johnson & Johnson | 715,400 | 77,105,812 | ||||||
Ligand Pharmaceuticals, Inc. * | 59,229 | 3,273,587 | ||||||
Merck & Co., Inc. | 1,151,500 | 66,717,910 | ||||||
Myriad Genetics, Inc. *(a) | 48,100 | 1,899,469 | ||||||
Nektar Therapeutics * | 76,000 | 1,048,040 | ||||||
PDL BioPharma, Inc. (a) | 290,400 | 2,477,112 | ||||||
Pfizer, Inc. | 2,327,200 | 69,699,640 | ||||||
Repligen Corp. * | 57,300 | 1,445,106 | ||||||
Sagent Pharmaceuticals, Inc. * | 109,200 | 3,455,088 | ||||||
The Medicines Co. * | 13,700 | 346,884 | ||||||
Threshold Pharmaceuticals, Inc. * | 56,957 | 166,884 | ||||||
549,803,603 | ||||||||
811,627,093 | ||||||||
Total Common Stock | ||||||||
(Cost $755,463,284) | 1,037,931,809 | |||||||
Other Investment Company 0.4% of net assets | ||||||||
United States 0.4% | ||||||||
Securities Lending Collateral 0.4% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (d) | 4,174,429 | 4,174,429 | ||||||
Total Other Investment Company | ||||||||
(Cost $4,174,429) | 4,174,429 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 2.1% of net assets | ||||||||
Time Deposits 2.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
US Dollar | ||||||||
0.03%, 11/04/14 | 8,925,729 | 8,925,729 | ||||||
Brown Brothers Harriman | ||||||||
Swiss Franc | ||||||||
0.00%, 11/03/14 | 1,579,981 | 1,642,136 | ||||||
DNB | ||||||||
US Dollar | ||||||||
0.03%, 11/03/14 | 10,565,388 | 10,565,388 | ||||||
21,133,253 | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (b)(c) | 575,000 | 574,999 |
72 See financial notes
Table of Contents
Schwab Health Care Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
0.01%, 12/18/14 (b)(c) | 428,000 | 427,994 | ||||||
1,002,993 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $22,136,246) | 22,136,246 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $782,154,921 and the unrealized appreciation and depreciation were $285,548,940 and ($3,461,377), respectively, with a net unrealized appreciation of $282,087,563.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $210,300,022 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(a) for additional information)
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $4,157,752. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. | |
(d) | The rate shown is the 7-day yield. |
Reg’d — | Registered |
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 170 | 17,096,900 | 358,386 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $826,662,090 | $— | $— | $826,662,090 | ||||||||||||
Australia1 | — | 6,055,186 | — | 6,055,186 | ||||||||||||
Denmark1 | — | 11,998,271 | — | 11,998,271 | ||||||||||||
Germany1 | — | 17,825,145 | — | 17,825,145 | ||||||||||||
Hong Kong1 | — | 1,328,960 | — | 1,328,960 | ||||||||||||
Israel | ||||||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 969,697 | 25,843,003 | — | 26,812,700 | ||||||||||||
Japan1 | — | 36,559,571 | — | 36,559,571 | ||||||||||||
Republic of Korea1 | — | 783,718 | — | 783,718 | ||||||||||||
South Africa1 | — | 714,402 | — | 714,402 | ||||||||||||
Switzerland1 | — | 90,345,747 | — | 90,345,747 | ||||||||||||
United Kingdom1 | — | 18,846,019 | — | 18,846,019 | ||||||||||||
Other Investment Company1 | 4,174,429 | — | — | 4,174,429 | ||||||||||||
Short-Term Investments1 | — | 22,136,246 | — | 22,136,246 | ||||||||||||
Total | $831,806,216 | $232,436,268 | $— | $1,064,242,484 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $358,386 | $— | $— | $358,386 |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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, 2014.
See financial notes 73
Table of Contents
Schwab Health Care Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $777,599,530) including securities on loan of $4,157,752 | $1,060,068,055 | |||||
Collateral invested for securities on loan, at value (cost $4,174,429) | + | 4,174,429 | ||||
Total investments, at value (cost $781,773,959) | 1,064,242,484 | |||||
Foreign currency, at value (cost $456,475) | 438,615 | |||||
Cash | 250,000 | |||||
Receivables: | ||||||
Fund shares sold | 2,603,698 | |||||
Dividends | 669,258 | |||||
Foreign tax reclaims | 646,609 | |||||
Variation margin on futures contracts | 193,800 | |||||
Income from securities on loan | 13,047 | |||||
Interest | 16 | |||||
Prepaid expenses | + | 15,111 | ||||
Total assets | 1,069,072,638 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 4,174,429 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 60,033 | |||||
Shareholder service fees | 44,113 | |||||
Fund shares redeemed | 587,134 | |||||
Accrued expenses | + | 83,652 | ||||
Total liabilities | 4,949,361 | |||||
Net Assets | ||||||
Total assets | 1,069,072,638 | |||||
Total liabilities | − | 4,949,361 | ||||
Net assets | $1,064,123,277 | |||||
Net Assets by Source | ||||||
Capital received from investors | 651,868,349 | |||||
Net investment income not yet distributed | 7,711,159 | |||||
Net realized capital gains | 121,781,285 | |||||
Net unrealized capital appreciation | 282,762,484 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,064,123,277 | 37,750,728 | $28.19 |
74 See financial notes
Table of Contents
Schwab Health Care Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $538,461) | $15,792,004 | |||||
Interest | 4,135 | |||||
Securities on loan | + | 170,039 | ||||
Total investment income | 15,966,178 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 4,877,930 | |||||
Shareholder service fees | 2,194,480 | |||||
Shareholder reports | 89,410 | |||||
Transfer agent fees | 82,155 | |||||
Custodian fees | 71,618 | |||||
Portfolio accounting fees | 65,392 | |||||
Registration fees | 47,908 | |||||
Professional fees | 34,427 | |||||
Independent trustees’ fees | 10,435 | |||||
Interest expense | 1,396 | |||||
Other expenses | + | 18,533 | ||||
Total expenses | 7,493,684 | |||||
Expense reduction by CSIM and its affiliates | − | 82,155 | ||||
Net expenses | − | 7,411,529 | ||||
Net investment income | 8,554,649 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 121,909,801 | |||||
Net realized gains on futures contracts | 657,856 | |||||
Net realized losses on foreign currency transactions | + | (166,679 | ) | |||
Net realized gains | 122,400,978 | |||||
Net change in unrealized appreciation (depreciation) on investments | 91,265,896 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | 187,748 | |||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (74,264 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 91,379,380 | ||||
Net realized and unrealized gains | 213,780,358 | |||||
Increase in net assets resulting from operations | $222,335,007 |
See financial notes 75
Table of Contents
Schwab Health Care Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $8,554,649 | $6,965,890 | ||||||||
Net realized gains | 122,400,978 | 75,480,788 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 91,379,380 | 112,825,265 | |||||||
Increase in net assets from operations | 222,335,007 | 195,271,943 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (6,270,757 | ) | (8,336,930 | ) | ||||||
Distributions from net realized gains | + | (76,135,752 | ) | (54,300,003 | ) | |||||
Total distributions | ($82,406,509 | ) | ($62,636,933 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,951,426 | $224,018,159 | 11,259,344 | $243,726,416 | ||||||||||||||
Shares reinvested | 3,264,515 | 74,267,727 | 3,014,800 | 55,894,398 | ||||||||||||||
Shares redeemed | + | (7,695,559 | ) | (190,483,862 | ) | (5,854,185 | ) | (126,778,797 | ) | |||||||||
Net transactions in fund shares | 4,520,382 | $107,802,024 | 8,419,959 | $172,842,017 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 33,230,346 | $816,392,755 | 24,810,387 | $510,915,728 | ||||||||||||||
Total increase | + | 4,520,382 | 247,730,522 | 8,419,959 | 305,477,027 | |||||||||||||
End of period | 37,750,728 | $1,064,123,277 | 33,230,346 | $816,392,755 | ||||||||||||||
Net investment income not yet distributed | $7,711,159 | $5,180,420 |
76 See financial notes
Table of Contents
Schwab® International Core Equity Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.82 | 7.90 | 7.32 | 7.80 | 7.25 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.29 | 1 | 0.20 | 0.16 | 0.17 | 0.16 | ||||||||||||||||
Net realized and unrealized gains (losses) | (0.08 | ) | 1.93 | 0.62 | (0.46 | ) | 0.57 | |||||||||||||||
Total from investment operations | 0.21 | 2.13 | 0.78 | (0.29 | ) | 0.73 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.26 | ) | (0.21 | ) | (0.20 | ) | (0.19 | ) | (0.18 | ) | ||||||||||||
Net asset value at end of period | 9.77 | 9.82 | 7.90 | 7.32 | 7.80 | |||||||||||||||||
Total return (%) | 2.20 | 27.70 | 11.17 | (3.89 | ) | 10.09 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.86 | 0.86 | 0.86 | 0.80 | 2 | 0.87 | 3 | |||||||||||||||
Gross operating expenses | 0.98 | 1.10 | 1.16 | 1.22 | 1.27 | |||||||||||||||||
Net investment income (loss) | 2.95 | 2.40 | 2.45 | 2.32 | 1.85 | |||||||||||||||||
Portfolio turnover rate | 90 | 75 | 112 | 86 | 91 | 4 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 423 | 147 | 78 | 60 | 53 |
1 Calculated based on the average shares outstanding during the period.
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.
See financial notes 77
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings as of October 31, 2014
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 | 412,460,053 | 417,095,914 | ||||||||
1 | .4% | Other Investment Company | 5,747,659 | 5,747,659 | ||||||||
0 | .1% | Short-Term Investments | 513,996 | 513,996 | ||||||||
100 | .2% | Total Investments | 418,721,708 | 423,357,569 | ||||||||
(0 | .2%) | Other Assets and Liabilities, Net | (781,670 | ) | ||||||||
100 | .0% | Net Assets | 422,575,899 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.7% of net assets | ||||||||
Australia 6.3% | ||||||||
Banks 1.3% | ||||||||
Commonwealth Bank of Australia | 34,485 | 2,452,208 | ||||||
Westpac Banking Corp. | 96,449 | 2,960,431 | ||||||
5,412,639 | ||||||||
Capital Goods 0.2% | ||||||||
Monadelphous Group Ltd. | 73,089 | 810,676 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Mineral Resources Ltd. | 38,840 | 291,145 | ||||||
Diversified Financials 0.4% | ||||||||
Challenger Ltd. | 282,086 | 1,735,015 | ||||||
Energy 1.6% | ||||||||
Beach Energy Ltd. | 1,360,482 | 1,407,280 | ||||||
Woodside Petroleum Ltd. | 148,262 | 5,266,317 | ||||||
6,673,597 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Metcash Ltd. | 486,183 | 1,214,277 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Sigma Pharmaceuticals Ltd. | 1,363,627 | 929,063 | ||||||
Insurance 0.4% | ||||||||
Suncorp Group Ltd. | 131,084 | 1,705,695 | ||||||
Materials 1.5% | ||||||||
BHP Billiton Ltd. | 22,271 | 666,278 | ||||||
CSR Ltd. | 335,801 | 1,027,762 | ||||||
Rio Tinto Ltd. | 89,809 | 4,795,648 | ||||||
6,489,688 | ||||||||
Telecommunication Services 0.3% | ||||||||
Telstra Corp., Ltd. | 267,141 | 1,329,335 | ||||||
26,591,130 | ||||||||
Belgium 1.1% | ||||||||
Energy 0.1% | ||||||||
Exmar N.V. | 24,915 | 348,281 | ||||||
Food & Staples Retailing 0.5% | ||||||||
Delhaize Group S.A. | 30,175 | 2,063,211 | ||||||
Transportation 0.5% | ||||||||
bpost S.A. | 83,184 | 2,059,302 | ||||||
4,470,794 | ||||||||
Brazil 0.3% | ||||||||
Banks 0.3% | ||||||||
Banco do Brasil S.A. | 114,100 | 1,276,885 | ||||||
Canada 1.1% | ||||||||
Automobiles & Components 1.1% | ||||||||
Magna International, Inc. | 45,363 | 4,477,335 | ||||||
China 1.6% | ||||||||
Materials 0.3% | ||||||||
China Resources Cement Holdings Ltd. | 1,696,000 | 1,153,278 | ||||||
Technology Hardware & Equipment 0.6% | ||||||||
Lenovo Group Ltd. | 1,642,000 | 2,420,315 | ||||||
Utilities 0.7% | ||||||||
China Resources Power Holdings Co., Ltd. | 1,090,039 | 3,172,715 | ||||||
6,746,308 | ||||||||
Denmark 3.2% | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Pandora A/S | 10,019 | 844,717 | ||||||
Health Care Equipment & Services 0.5% | ||||||||
Coloplast A/S, Class B | 21,447 | 1,869,347 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Novo Nordisk A/S, Class B | 78,512 | 3,548,956 | ||||||
Transportation 1.7% | ||||||||
AP Moeller - Maersk A/S, Series B | 3,141 | 7,329,763 | ||||||
13,592,783 | ||||||||
Finland 1.0% | ||||||||
Capital Goods 0.1% | ||||||||
Metso Oyj | 14,580 | 476,360 | ||||||
Materials 0.1% | ||||||||
UPM-Kymmene Oyj | 24,368 | 386,537 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Orion Oyj, Class B | 94,375 | 3,209,844 | ||||||
4,072,741 |
78 See financial notes
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
France 7.4% | ||||||||
Automobiles & Components 0.6% | ||||||||
Compagnie Generale des Etablissements Michelin | 28,685 | 2,491,491 | ||||||
Banks 0.5% | ||||||||
Credit Agricole S.A. | 151,075 | 2,235,649 | ||||||
Capital Goods 0.6% | ||||||||
Vinci S.A. | 40,936 | 2,336,555 | ||||||
Consumer Durables & Apparel 0.0% | ||||||||
Hermes International | 646 | 200,055 | ||||||
Energy 3.1% | ||||||||
Etablissements Maurel et Prom * | 24,827 | 296,735 | ||||||
Technip S.A. | 5,028 | 363,275 | ||||||
Total S.A. | 205,857 | 12,290,333 | ||||||
12,950,343 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Casino Guichard Perrachon S.A. | 2,306 | 236,442 | ||||||
Rallye S.A. | 42,232 | 1,636,765 | ||||||
1,873,207 | ||||||||
Insurance 0.2% | ||||||||
CNP Assurances | 33,640 | 628,905 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.4% | ||||||||
Sanofi | 63,141 | 5,729,416 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Neopost S.A. | 4,476 | 310,634 | ||||||
Telecommunication Services 0.4% | ||||||||
Orange S.A. | 111,511 | 1,775,296 | ||||||
Utilities 0.1% | ||||||||
GDF Suez | 23,117 | 561,279 | ||||||
31,092,830 | ||||||||
Germany 8.4% | ||||||||
Automobiles & Components 1.8% | ||||||||
Bayerische Motoren Werke AG | 40,417 | 4,334,226 | ||||||
Continental AG | 12,826 | 2,526,283 | ||||||
Daimler AG - Reg’d | 10,757 | 838,712 | ||||||
7,699,221 | ||||||||
Capital Goods 1.0% | ||||||||
Duerr AG | 14,845 | 1,042,775 | ||||||
HOCHTIEF AG | 4,570 | 338,174 | ||||||
Siemens AG - Reg’d | 20,027 | 2,258,914 | ||||||
Wacker Neuson SE | 23,144 | 450,353 | ||||||
4,090,216 | ||||||||
Consumer Durables & Apparel 0.9% | ||||||||
Hugo Boss AG | 28,514 | 3,788,329 | ||||||
Insurance 2.3% | ||||||||
Allianz SE - Reg’d | 55,177 | 8,774,364 | ||||||
Hannover Rueck SE | 9,375 | 782,506 | ||||||
9,556,870 | ||||||||
Materials 0.3% | ||||||||
BASF SE | 15,507 | 1,370,201 | ||||||
Media 1.1% | ||||||||
ProSiebenSat.1 Media AG - Reg’d | 116,654 | 4,712,372 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Merck KGaA | 35,213 | 3,187,633 | ||||||
Software & Services 0.2% | ||||||||
United Internet AG - Reg’d | 24,892 | 976,224 | ||||||
35,381,066 | ||||||||
Greece 0.1% | ||||||||
Consumer Services 0.1% | ||||||||
OPAP S.A. | 37,865 | 458,732 | ||||||
Hong Kong 2.5% | ||||||||
Capital Goods 0.5% | ||||||||
Hutchison Whampoa Ltd. | 167,000 | 2,117,653 | ||||||
Diversified Financials 0.3% | ||||||||
Sun Hung Kai & Co., Ltd. | 1,708,065 | 1,271,865 | ||||||
Energy 0.3% | ||||||||
CNOOC Ltd. | 806,000 | 1,262,106 | ||||||
Materials 0.1% | ||||||||
Huabao International Holdings Ltd. | 694,000 | 496,248 | ||||||
Real Estate 0.9% | ||||||||
Cheung Kong (Holdings) Ltd. | 214,000 | 3,798,987 | ||||||
Telecommunication Services 0.3% | ||||||||
China Mobile Ltd. | 97,000 | 1,206,924 | ||||||
Utilities 0.1% | ||||||||
Guangdong Investment Ltd. | 464,000 | 610,356 | ||||||
10,764,139 | ||||||||
Israel 0.5% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.5% | ||||||||
Teva Pharmaceutical Industries Ltd. | 36,605 | 2,066,255 | ||||||
Italy 0.9% | ||||||||
Automobiles & Components 0.6% | ||||||||
Brembo S.p.A. | 52,500 | 1,740,973 | ||||||
Pirelli & C. S.p.A | 76,930 | 1,031,612 | ||||||
2,772,585 | ||||||||
Capital Goods 0.0% | ||||||||
Danieli & Co., Officine Meccaniche S.p.A. | 5,029 | 117,337 | ||||||
Real Estate 0.1% | ||||||||
Beni Stabili Spa | 323,342 | 222,951 | ||||||
Telecommunication Services 0.2% | ||||||||
Telecom Italia S.p.A. * | 653,369 | 740,451 | ||||||
3,853,324 | ||||||||
Japan 21.7% | ||||||||
Automobiles & Components 0.1% | ||||||||
Calsonic Kansei Corp. | 75,781 | 419,557 | ||||||
Banks 4.8% | ||||||||
Resona Holdings, Inc. | 1,507,000 | 8,619,717 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 243,300 | 9,922,481 | ||||||
The Bank of Yokohama Ltd. | 277,000 | 1,600,849 | ||||||
20,143,047 |
See financial notes 79
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 1.1% | ||||||||
COMSYS Holdings Corp. | 88,900 | 1,587,095 | ||||||
Hoshizaki Electric Co., Ltd. | 12,300 | 595,783 | ||||||
Minebea Co., Ltd. | 16,000 | 219,239 | ||||||
Mitsubishi Electric Corp. | 167,000 | 2,153,263 | ||||||
Takeuchi Manufacturing Co., Ltd. | 6,500 | 273,223 | ||||||
4,828,603 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Meitec Corp. | 25,600 | 802,788 | ||||||
Consumer Durables & Apparel 1.0% | ||||||||
Gunze Ltd. | 375,869 | 1,046,059 | ||||||
Haseko Corp. | 105,000 | 769,642 | ||||||
Panasonic Corp. | 170,600 | 2,052,531 | ||||||
Yondoshi Holdings, Inc. | 13,600 | 244,934 | ||||||
4,113,166 | ||||||||
Consumer Services 0.2% | ||||||||
Kura Corp. | 8,200 | 222,316 | ||||||
Oriental Land Co., Ltd. | 3,800 | 812,589 | ||||||
1,034,905 | ||||||||
Diversified Financials 1.4% | ||||||||
Daiwa Securities Group, Inc. | 327,000 | 2,584,267 | ||||||
ORIX Corp. | 243,100 | 3,374,287 | ||||||
5,958,554 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Fukuda Denshi Co., Ltd. | 8,000 | 409,448 | ||||||
Household & Personal Products 0.2% | ||||||||
Kao Corp. | 19,300 | 752,586 | ||||||
Materials 0.9% | ||||||||
Asahi Holdings, Inc. | 93,300 | 1,553,181 | ||||||
Nippon Paint Holdings Co., Ltd. | 95,000 | 2,157,197 | ||||||
3,710,378 | ||||||||
Media 0.2% | ||||||||
SKY Perfect JSAT Holdings, Inc. | 121,870 | 748,135 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Astellas Pharma, Inc. | 161,600 | 2,508,111 | ||||||
Kaken Pharmaceutical Co., Ltd. | 38,000 | 952,052 | ||||||
3,460,163 | ||||||||
Real Estate 0.2% | ||||||||
Daito Trust Construction Co., Ltd. | 3,900 | 485,943 | ||||||
Takara Leben Co., Ltd. | 78,300 | 331,794 | ||||||
817,737 | ||||||||
Retailing 1.1% | ||||||||
Canon Marketing Japan, Inc. | 220,108 | 4,499,934 | ||||||
T-Gaia Corp. | 28,000 | 279,939 | ||||||
4,779,873 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Shindengen Electric Manufacturing Co., Ltd. | 91,000 | 592,811 | ||||||
Software & Services 1.0% | ||||||||
Fujitsu Ltd. | 671,000 | 4,079,319 | ||||||
Technology Hardware & Equipment 1.1% | ||||||||
Canon, Inc. | 105,000 | 3,221,417 | ||||||
Japan Aviation Electronics Industry Ltd. | 78,000 | 1,545,399 | ||||||
4,766,816 | ||||||||
Telecommunication Services 1.6% | ||||||||
Nippon Telegraph & Telephone Corp. | 112,200 | 6,980,952 | ||||||
Transportation 0.9% | ||||||||
Central Japan Railway Co. | 20,345 | 3,034,435 | ||||||
West Japan Railway Co. | 13,500 | 643,482 | ||||||
3,677,917 | ||||||||
Utilities 4.7% | ||||||||
Osaka Gas Co., Ltd. | 1,454,000 | 5,799,760 | ||||||
Tohoku Electric Power Co., Inc. | 402,800 | 5,034,277 | ||||||
Tokyo Gas Co., Ltd. | 1,536,000 | 8,853,985 | ||||||
19,688,022 | ||||||||
91,764,777 | ||||||||
Malaysia 0.1% | ||||||||
Real Estate 0.1% | ||||||||
Eastern & Oriental Bhd | 359,700 | 306,338 | ||||||
Malta 0.5% | ||||||||
Consumer Services 0.5% | ||||||||
Unibet Group plc SDR | 36,503 | 2,103,428 | ||||||
Netherlands 4.2% | ||||||||
Food & Staples Retailing 1.9% | ||||||||
Koninklijke Ahold N.V. | 475,085 | 7,957,024 | ||||||
Food, Beverage & Tobacco 1.8% | ||||||||
Unilever N.V. CVA | 198,650 | 7,699,366 | ||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||
ASM International N.V. | 43,153 | 1,729,258 | ||||||
Transportation 0.1% | ||||||||
PostNL N.V. * | 54,225 | 230,475 | ||||||
17,616,123 | ||||||||
New Zealand 0.2% | ||||||||
Transportation 0.2% | ||||||||
Air New Zealand Ltd. | 592,237 | 937,560 | ||||||
Norway 0.9% | ||||||||
Banks 0.2% | ||||||||
SpareBank 1 SMN | 89,118 | 792,459 | ||||||
Energy 0.4% | ||||||||
Statoil A.S.A. | 84,156 | 1,925,946 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Austevoll Seafood A.S.A. | 89,647 | 582,964 | ||||||
Leroy Seafood Group A.S.A. | 10,652 | 402,959 | ||||||
Salmar A.S.A. | 13,265 | 238,989 | ||||||
1,224,912 | ||||||||
3,943,317 | ||||||||
Republic of Korea 0.1% | ||||||||
Capital Goods 0.1% | ||||||||
Doosan Infracore Co., Ltd. * | 17,020 | 172,250 |
80 See financial notes
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
LG Display Co., Ltd. * | 4,350 | 128,060 | ||||||
300,310 | ||||||||
Singapore 2.8% | ||||||||
Banks 1.1% | ||||||||
DBS Group Holdings Ltd. | 314,000 | 4,517,020 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Indofood Agri Resources Ltd. | 616,603 | 401,185 | ||||||
Real Estate 0.2% | ||||||||
UOL Group Ltd. | 154,000 | 773,504 | ||||||
Retailing 0.2% | ||||||||
Jardine Cycle & Carriage Ltd. | 29,000 | 901,448 | ||||||
Transportation 1.2% | ||||||||
ComfortDelGro Corp., Ltd. | 1,912,000 | 3,931,076 | ||||||
Singapore Post Ltd. | 878,000 | 1,347,616 | ||||||
5,278,692 | ||||||||
11,871,849 | ||||||||
Spain 3.8% | ||||||||
Banks 2.0% | ||||||||
Banco Santander S.A. | 954,073 | 8,429,735 | ||||||
Capital Goods 1.5% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 166,985 | 6,198,127 | ||||||
Sacyr S.A. * | 56,644 | 248,885 | ||||||
6,447,012 | ||||||||
Utilities 0.3% | ||||||||
Endesa S.A. | 64,035 | 1,249,186 | ||||||
16,125,933 | ||||||||
Sweden 2.0% | ||||||||
Banks 0.3% | ||||||||
Swedbank AB, A Shares | 51,736 | 1,371,039 | ||||||
Capital Goods 0.3% | ||||||||
Peab AB | 48,451 | 328,937 | ||||||
Trelleborg AB, B Shares | 62,447 | 1,069,114 | ||||||
1,398,051 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Axfood AB | 13,433 | 826,811 | ||||||
Real Estate 0.6% | ||||||||
Fastighets AB Balder, B Shares * | 110,508 | 1,439,855 | ||||||
Wihlborgs Fastigheter AB | 48,966 | 858,781 | ||||||
2,298,636 | ||||||||
Retailing 0.1% | ||||||||
Hennes & Mauritz AB, B Shares | 10,339 | 412,520 | ||||||
Technology Hardware & Equipment 0.5% | ||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 193,260 | 2,283,637 | ||||||
8,590,694 | ||||||||
Switzerland 9.2% | ||||||||
Capital Goods 0.2% | ||||||||
Geberit AG - Reg’d | 1,040 | 354,988 | ||||||
Rieter Holding AG - Reg’d * | 1,894 | 349,769 | ||||||
704,757 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Forbo Holding AG - Reg’d * | 1,015 | 1,053,347 | ||||||
Food, Beverage & Tobacco 2.2% | ||||||||
Aryzta AG * | 19,796 | 1,688,629 | ||||||
Nestle S.A. - Reg’d | 102,632 | 7,526,425 | ||||||
9,215,054 | ||||||||
Insurance 4.4% | ||||||||
Helvetia Holding AG - Reg’d | 6,826 | 3,245,870 | ||||||
Swiss Life Holding AG - Reg’d * | 36,143 | 8,292,676 | ||||||
Zurich Insurance Group AG * | 23,829 | 7,211,333 | ||||||
18,749,879 | ||||||||
Materials 0.1% | ||||||||
Givaudan S.A. - Reg’d * | 225 | 375,744 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.1% | ||||||||
Actelion Ltd. - Reg’d * | 12,936 | 1,540,615 | ||||||
Lonza Group AG - Reg’d * | 6,508 | 717,094 | ||||||
Novartis AG - Reg’d | 39,866 | 3,699,678 | ||||||
Roche Holding AG | 10,173 | 3,002,066 | ||||||
8,959,453 | ||||||||
39,058,234 | ||||||||
United Kingdom 18.8% | ||||||||
Banks 0.6% | ||||||||
Bank of Georgia Holdings plc | 19,106 | 783,587 | ||||||
HSBC Holdings plc | 161,684 | 1,648,427 | ||||||
2,432,014 | ||||||||
Capital Goods 0.1% | ||||||||
QinetiQ Group plc | 150,283 | 487,082 | ||||||
Commercial & Professional Supplies 0.7% | ||||||||
Berendsen plc | 113,098 | 1,831,404 | ||||||
Rentokil Initial plc | 461,830 | 910,790 | ||||||
2,742,194 | ||||||||
Consumer Durables & Apparel 0.9% | ||||||||
Persimmon plc * | 56,929 | 1,336,988 | ||||||
Taylor Wimpey plc | 1,285,610 | 2,442,095 | ||||||
3,779,083 | ||||||||
Consumer Services 0.1% | ||||||||
Carnival plc | 8,970 | 357,687 | ||||||
Diversified Financials 0.8% | ||||||||
Investec plc | 241,770 | 2,216,904 | ||||||
Man Group plc | 606,203 | 1,201,963 | ||||||
3,418,867 | ||||||||
Energy 3.4% | ||||||||
BP plc | 523,625 | 3,767,430 | ||||||
Royal Dutch Shell plc, B Shares | 269,972 | 9,974,231 | ||||||
Soco International plc * | 118,102 | 622,007 | ||||||
14,363,668 |
See financial notes 81
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food & Staples Retailing 0.2% | ||||||||
Greggs plc | 80,976 | 785,450 | ||||||
Food, Beverage & Tobacco 2.9% | ||||||||
British American Tobacco plc | 41,547 | 2,354,784 | ||||||
Unilever plc | 248,077 | 9,979,016 | ||||||
12,333,800 | ||||||||
Household & Personal Products 0.2% | ||||||||
Reckitt Benckiser Group plc | 8,140 | 685,579 | ||||||
Insurance 0.4% | ||||||||
Direct Line Insurance Group plc | 101,863 | 450,607 | ||||||
Old Mutual plc | 441,922 | 1,372,422 | ||||||
1,823,029 | ||||||||
Materials 2.9% | ||||||||
Anglo American plc | 27,446 | 579,482 | ||||||
BHP Billiton plc | 251,417 | 6,495,761 | ||||||
Rio Tinto plc | 111,253 | 5,293,579 | ||||||
12,368,822 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.3% | ||||||||
AstraZeneca plc | 34,355 | 2,509,576 | ||||||
Shire plc | 46,833 | 3,142,351 | ||||||
5,651,927 | ||||||||
Real Estate 0.5% | ||||||||
Grainger plc | 564,736 | 1,711,364 | ||||||
Great Portland Estates plc | 52,314 | 575,770 | ||||||
2,287,134 | ||||||||
Retailing 1.9% | ||||||||
Inchcape plc | 61,620 | 686,466 | ||||||
Next plc | 56,819 | 5,865,805 | ||||||
WH Smith plc | 91,586 | 1,653,565 | ||||||
8,205,836 | ||||||||
Technology Hardware & Equipment 0.6% | ||||||||
Pace plc | 470,276 | 2,614,469 | ||||||
Telecommunication Services 1.0% | ||||||||
BT Group plc | 557,646 | 3,287,507 | ||||||
Vodafone Group plc | 276,642 | 919,961 | ||||||
4,207,468 | ||||||||
Transportation 0.3% | ||||||||
easyJet plc | 45,317 | 1,088,920 | ||||||
79,633,029 | ||||||||
Total Common Stock | ||||||||
(Cost $412,460,053) | 417,095,914 | |||||||
Other Investment Company 1.4% of net assets | ||||||||
Money Market Fund 1.4% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (c) | 5,747,659 | 5,747,659 | ||||||
Total Other Investment Company | ||||||||
(Cost $5,747,659) | 5,747,659 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (a)(b) | 250,000 | 250,000 | ||||||
0.01%, 12/18/14 (a)(b) | 264,000 | 263,996 | ||||||
Total Short-Term Investments | ||||||||
(Cost $513,996) | 513,996 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $420,129,104 and the unrealized appreciation and depreciation were $16,560,581 and ($13,332,116), respectively, with a net unrealized appreciation of $3,228,465.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $405,298,806 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2(a) for additional information).
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. | |
(c) | The rate shown is the 7-day yield. |
CVA — | Dutch Certificate | |
Reg’d — | Registered | |
SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/19/14 | 25 | 2,295,000 | 152,233 |
82 See financial notes
Table of Contents
Schwab International Core Equity Fund
Portfolio Holdings continued
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $— | $357,118,544 | $— | $357,118,544 | ||||||||||||
Belgium1 | — | 2,411,492 | — | 2,411,492 | ||||||||||||
Transportation | 2,059,302 | — | — | 2,059,302 | ||||||||||||
Brazil1 | 1,276,885 | — | — | 1,276,885 | ||||||||||||
Canada1 | 4,477,335 | — | — | 4,477,335 | ||||||||||||
Malta1 | 2,103,428 | — | — | 2,103,428 | ||||||||||||
Sweden1 | — | 7,763,883 | — | 7,763,883 | ||||||||||||
Food & Staples Retailing | 826,811 | — | — | 826,811 | ||||||||||||
Switzerland1 | — | 38,004,887 | — | 38,004,887 | ||||||||||||
Consumer Durables & Apparel | 1,053,347 | — | — | 1,053,347 | ||||||||||||
Other Investment Company1 | 5,747,659 | — | — | 5,747,659 | ||||||||||||
Short-Term Investments1 | — | 513,996 | — | 513,996 | ||||||||||||
Total | $17,544,767 | $405,812,802 | $— | $423,357,569 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $152,233 | $— | $— | $152,233 |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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 $188,076 and $512,489 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended October 31, 2014. 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 during the period.
See financial notes 83
Table of Contents
Schwab International Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $418,721,708) | $423,357,569 | |||||
Foreign currency, at value (cost $257,749) | 256,036 | |||||
Receivables: | ||||||
Fund shares sold | 1,591,219 | |||||
Dividends | 355,598 | |||||
Foreign tax reclaims | 214,302 | |||||
Variation margin on futures contracts | 43,125 | |||||
Prepaid expenses | + | 1,141 | ||||
Total assets | 425,818,990 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,872,199 | |||||
Investment adviser and administrator fees | 27,624 | |||||
Shareholder service fees | 14,455 | |||||
Fund shares redeemed | 252,917 | |||||
Accrued expenses | + | 75,896 | ||||
Total liabilities | 3,243,091 | |||||
Net Assets | ||||||
Total assets | 425,818,990 | |||||
Total liabilities | − | 3,243,091 | ||||
Net assets | $422,575,899 | |||||
Net Assets by Source | ||||||
Capital received from investors | 412,970,530 | |||||
Net investment income not yet distributed | 4,844,140 | |||||
Net realized capital losses | (3,745 | ) | ||||
Net unrealized capital appreciation | 4,764,974 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$422,575,899 | 43,247,602 | $9.77 |
84 See financial notes
Table of Contents
Schwab International Core Equity Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $793,556) | $8,230,698 | |||||
Interest | + | 166 | ||||
Total investment income | 8,230,864 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,253,116 | |||||
Shareholder service fees | 531,546 | |||||
Custodian fees | 96,890 | |||||
Portfolio accounting fees | 59,954 | |||||
Professional fees | 50,283 | |||||
Registration fees | 43,456 | |||||
Shareholder reports | 36,943 | |||||
Transfer agent fees | 27,662 | |||||
Independent trustees’ fees | 7,022 | |||||
Interest expense | 20 | |||||
Other expenses | + | 4,829 | ||||
Total expenses | 2,111,721 | |||||
Expense reduction by CSIM and its affiliates | − | 253,633 | ||||
Net expenses | − | 1,858,088 | ||||
Net investment income | 6,372,776 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 12,517,932 | |||||
Net realized gains on futures contracts | 118,091 | |||||
Net realized losses on foreign currency transactions | + | (97,481 | ) | |||
Net realized gains | 12,538,542 | |||||
Net change in unrealized appreciation (depreciation) on investments | (18,769,012 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | 122,097 | |||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (29,343 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (18,676,258 | ) | |||
Net realized and unrealized losses | (6,137,716 | ) | ||||
Increase in net assets resulting from operations | $235,060 |
See financial notes 85
Table of Contents
Schwab International Core Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $6,372,776 | $2,561,773 | ||||||||
Net realized gains | 12,538,542 | 6,540,993 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (18,676,258 | ) | 17,187,224 | ||||||
Increase in net assets from operations | 235,060 | 26,289,990 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($4,000,904 | ) | ($2,100,275 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 35,207,779 | $349,758,745 | 8,070,603 | $70,752,618 | ||||||||||||||
Shares reinvested | 277,927 | 2,612,515 | 154,692 | 1,217,426 | ||||||||||||||
Shares redeemed | + | (7,226,558 | ) | (73,262,028 | ) | (3,128,819 | ) | (27,045,232 | ) | |||||||||
Net transactions in fund shares | 28,259,148 | $279,109,232 | 5,096,476 | $44,924,812 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 14,988,454 | $147,232,511 | 9,891,978 | $78,117,984 | ||||||||||||||
Total increase | + | 28,259,148 | 275,343,388 | 5,096,476 | 69,114,527 | |||||||||||||
End of period | 43,247,602 | $422,575,899 | 14,988,454 | $147,232,511 | ||||||||||||||
Net investment income not yet distributed | $4,844,140 | $2,291,719 |
86 See financial notes
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 Target 2010 Fund | |||
Schwab Core Equity Fund | Schwab Target 2015 Fund | |||
Schwab Dividend Equity Fund | Schwab Target 2020 Fund | |||
Schwab Large-Cap Growth Fund | Schwab Target 2025 Fund | |||
Schwab Small-Cap Equity Fund | Schwab Target 2030 Fund | |||
Schwab Hedged Equity Fund | Schwab Target 2035 Fund | |||
Schwab Financial Services Fund | Schwab Target 2040 Fund | |||
Schwab Health Care Fund | Schwab Target 2045 Fund | |||
Schwab International Core Equity Fund | Schwab Target 2050 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2055 Fund | |||
Schwab Small-Cap Index Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab Total Stock Market Index Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab International Index Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Fundamental International Small Company Index Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Fundamental Global Real Estate Index Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Monthly Income Fund - Moderate Payout | |||
Laudus Small-Cap MarketMasters Fund | Schwab Monthly Income Fund - Enhanced Payout | |||
Laudus International MarketMasters Fund | Schwab Monthly Income Fund - Maximum Payout | |||
Schwab Balanced Fund | ||||
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 funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(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 |
87
Table of Contents
Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. 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 contracts (“futures”) and forward foreign currency exchange contracts (“forwards”): 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 may be 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, without consideration to the classification level of the specific investments held by the underlying fund. | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
close of the foreign markets. The Board has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. |
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 2014 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 a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value may change daily.
Forward Foreign Currency Exchange Contracts: Forwards 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 appreciation or depreciation 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 be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds to terminate any loans at any given time. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. A fund retains the right to recall a security on loan. The aggregate market value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan (at market value computed at the time of the loan). Total costs and expenses, including agent fees, associated with securities lending activities under the trust’s Securities Lending Program paid to the unaffiliated lending agent are approximately 15% of the gross lending revenues.
The values of the securities on loan and the related collateral as of October 31, 2014, if any, are disclosed in the funds’ Portfolio Holdings. Investments of cash collateral are also disclosed in each fund’s Statement of Assets and Liabilities.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
Short Sales: When a fund sells securities short (sells securities it does not own), the fund identifies assets worth at least 100% of the value of the short securities as collateral. If the market value of the short securities subsequently falls, the fund can realize a gain by closing the short position. However, if the value rises, the fund typically would have to add to its collateral or close out its short position at a loss. The potential for losses associated with short positions is much greater than the original value of the securities sold short and may exceed amounts recorded in the Statement of Assets and Liabilities.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains 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 a 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 a 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 a fund’s records and presented in the Statement of Operations. A 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.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(f) Distributions to Shareholders:
The funds make distributions from net investment income, if any, once a year, with the exception of Schwab Dividend Equity Fund which typically pays quarterly dividends. The funds make distributions from net realized capital gains, if any, once a year.
(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, 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 a fund’s 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, 2014, if any, are reflected in each fund’s Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
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.
Market Risk. Equity 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.
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.
Management Risk. The funds’ investment adviser makes investment decisions for the funds using a strategy based largely on historical information. There is no guarantee that a strategy based on historical information will produce the desired results in the future. In addition, the portfolio optimization process used by each fund to assist in constructing the fund’s portfolio does not assure successful investment. Securities selected with the assistance of the process may be negatively impacted by factors or events not foreseen in developing the process. As a result, a fund may have a lower return than if it were managed using another process or strategy.
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Financial Notes (continued)
3. Risk Factors (continued):
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 - a fund’s performance also will lag those investments.
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 - a fund’s performance also will lag those investments.
Growth Investing Risk. 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.
Derivatives Risk. 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 a fund to realize higher amounts of short-term capital gain. These risks could cause a fund to lose more than the principal amount invested.
Liquidity Risk. 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 Risk. 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.
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.
REITs Risk. 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.
Short Sales Risk. Certain funds engage in short sales transactions. Short sales are transactions in which a fund sells a security it does not own. To complete a short sale, a fund must borrow the security to deliver to the buyer. A fund is then obligated to replace the borrowed security by purchasing the security at the market price at the time of replacement. This price may be more or less than the price at which the security was sold by a fund, and the fund will incur a loss if the price of the security sold short increases between the time of the short sales and the time the fund replaces the borrowed security.
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Financial Notes (continued)
3. Risk Factors (continued):
Dividend Paying Risk. 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.
Foreign Investment Risk. 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); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets. 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.
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 a fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar.
Concentration Risk. 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.
Security Lending Risk. Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent.
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% |
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% |
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
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. |
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, 2014, as applicable:
Underlying Funds | ||||||||||||||||
Schwab | ||||||||||||||||
Schwab | Schwab | Schwab | International | |||||||||||||
Core | Dividend | Small-Cap | Core | |||||||||||||
Equity Fund | Equity Fund | Equity Fund | Equity Fund | |||||||||||||
Schwab Target 2010 Fund | 0.2% | 0.1% | 0.2% | 0.4% | ||||||||||||
Schwab Target 2015 Fund | 0.4% | 0.2% | 0.4% | 0.9% | ||||||||||||
Schwab Target 2020 Fund | 2.1% | 1.2% | 3.0% | 5.2% | ||||||||||||
Schwab Target 2025 Fund | 1.6% | 0.9% | 2.6% | 4.3% | ||||||||||||
Schwab Target 2030 Fund | 3.8% | 2.1% | 6.6% | 10.1% | ||||||||||||
Schwab Target 2035 Fund | 1.6% | 0.9% | 3.0% | 4.3% | ||||||||||||
Schwab Target 2040 Fund | 4.5% | 2.5% | 9.0% | 12.5% | ||||||||||||
Schwab Target 2045 Fund | 0.2% | 0.1% | 0.5% | 0.7% | ||||||||||||
Schwab Target 2050 Fund | 0.2% | 0.1% | 0.4% | 0.6% | ||||||||||||
Schwab Target 2055 Fund | 0.1% | 0.1% | 0.2% | 0.3% | ||||||||||||
Schwab Monthly Income Fund - Moderate Payout | —% | 0.7% | —% | —% | ||||||||||||
Schwab Monthly Income Fund - Enhanced Payout | —% | 1.0% | —% | —% | ||||||||||||
Schwab Monthly Income Fund - Maximum Payout | —% | 0.3% | —% | —% | ||||||||||||
Schwab Balanced Fund | 3.1% | —% | —% | —% |
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
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 on a fund’s Statement of Operations. For information regarding the trustees, please refer to the 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 an interest expense, which is disclosed on a fund’s 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, 2014, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab Core Equity Fund | $1,428,796,220 | $1,725,857,740 | ||||||
Schwab Dividend Equity Fund | 1,409,374,158 | 1,389,210,327 | ||||||
Schwab Large-Cap Growth Fund | 207,778,177 | 244,576,946 | ||||||
Schwab Small-Cap Equity Fund | 650,320,900 | 642,413,723 | ||||||
Schwab Hedged Equity Fund* | 267,898,995 | 278,811,252 | ||||||
Schwab Financial Services Fund | 56,831,347 | 54,320,995 | ||||||
Schwab Health Care Fund | 544,637,130 | 523,014,986 | ||||||
Schwab International Core Equity Fund | 473,127,200 | 194,669,452 |
* | Including securities sold short. |
8. Derivatives:
Certain funds entered into equity index futures contracts 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, 2014 are presented on the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in 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
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Schwab Active Equity Funds
Financial Notes (continued)
8. Derivatives (continued):
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 | $21,342,707 | 222 | ||||||
Schwab Dividend Equity Fund | 10,756,152 | 114 | ||||||
Schwab Large-Cap Growth Fund | 1,170,240 | 12 | ||||||
Schwab Small-Cap Equity Fund | 6,796,877 | 60 | ||||||
Schwab Hedged Equity Fund | 1,449,355 | 15 | ||||||
Schwab Financial Services Fund | 189,060 | 2 | ||||||
Schwab Health Care Fund | 10,318,978 | 109 | ||||||
Schwab International Core Equity Fund | 5,723,689 | 60 |
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 on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/13-10/31/14) | (11/1/12-10/31/13) | |||||||
Schwab Core Equity Fund | $14,486 | $19,267 | ||||||
Schwab Dividend Equity Fund | 41,450 | 50,175 | ||||||
Schwab Large-Cap Growth Fund | 3,756 | 6,787 | ||||||
Schwab Small-Cap Equity Fund | 23,409 | 15,023 | ||||||
Schwab Hedged Equity Fund | 3,590 | 10,792 | ||||||
Schwab Financial Services Fund | 3,411 | 4,292 | ||||||
Schwab Health Care Fund | 39,555 | 38,090 | ||||||
Schwab International Core Equity Fund | 21,857 | 8,761 |
10. Federal Income Taxes:
As of October 31, 2014, 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 | $67,487,129 | $46,941,837 | $972,559 | $25,249,519 | $— | |||||||||||||||
Undistributed long-term capital gains | 264,904,718 | 225,397,975 | 25,102,702 | 97,540,036 | 25,864,374 | |||||||||||||||
Unrealized appreciation on investments | 509,940,490 | 358,755,537 | 52,282,452 | 101,098,169 | 33,713,856 | |||||||||||||||
Unrealized depreciation on investments | (18,026,424 | ) | (16,626,751 | ) | (3,360,676 | ) | (29,704,064 | ) | (3,725,060 | ) | ||||||||||
Other unrealized appreciation (depreciation) | — | — | — | — | (2,428,210 | ) | ||||||||||||||
Net unrealized appreciation (depreciation) | $491,914,066 | $342,128,786 | $48,921,776 | $71,394,105 | $27,560,586 | |||||||||||||||
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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 | ||||||||||||||||||
Undistributed ordinary income | $305,727 | $57,481,848 | $6,060,608 | |||||||||||||||||
Undistributed long-term capital gains | — | 72,749,944 | 8,245,752 | |||||||||||||||||
Unrealized appreciation on investments | 15,416,656 | 285,548,940 | 16,560,581 | |||||||||||||||||
Unrealized depreciation on investments | (280,184 | ) | (3,461,377 | ) | (13,332,116 | ) | ||||||||||||||
Other unrealized appreciation (depreciation) | — | (64,427 | ) | (23,119 | ) | |||||||||||||||
Net unrealized appreciation (depreciation) | $15,136,472 | $282,023,136 | $3,205,346 | |||||||||||||||||
The primary differences between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments are Passive Foreign Investment Companies (PFIC), Partnerships and the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2014, 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 | $20,327,999 | $— | $— | $— | $— | |||||||||||||||
October 31, 2017 | 1,636,580 | — | — | — | — | |||||||||||||||
Total | $21,964,579 | * | $— | $— | $— | $— | ||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Expiration Date | Services Fund | Fund | Equity Fund | |||||||||||||||||
October 31, 2017 | $22,923,793 | $— | $7,906,337 | |||||||||||||||||
October 31, 2018 | 170,394 | — | — | |||||||||||||||||
Total | $23,094,187 | $— | $7,906,337 | * | ||||||||||||||||
* | 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 during the first day of the next taxable year. For the year ended October 31, 2014, the funds had late-year ordinary losses deferred and capital loss carryforwards 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 | $— | $— | $— | $— | ($2,468,247 | ) | ||||||||||||||
Capital loss carryforwards utilized | 12,317,025 | — | 14,051,004 | — | — | |||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Capital loss carryforwards utilized | $8,384,496 | $— | $4,262,847 |
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Schwab Active Equity 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 | Schwab | ||||||||||||||||
Core | Dividend | Large-Cap | Small-Cap | Hedged | ||||||||||||||||
Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $21,200,511 | $30,034,449 | $1,490,864 | $18,663,520 | $— | |||||||||||||||
Long-term capital gains | 157,596,466 | 118,279,747 | — | 39,824,590 | 15,225,593 | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $16,475,044 | $30,254,415 | $2,200,707 | $2,100,800 | $— | |||||||||||||||
Long-term capital gains | — | — | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $544,804 | $21,202,575 | $4,000,904 | |||||||||||||||||
Long-term capital gains | — | 61,203,934 | — | |||||||||||||||||
Return of capital | — | — | — | |||||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $406,901 | $8,336,930 | $2,100,275 | |||||||||||||||||
Long-term capital gains | — | 54,300,003 | — | |||||||||||||||||
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, 2014, 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 | $— | $— | $— | $— | ($95,555 | ) | ||||||||||||||
Undistributed net investment income | (275,945 | ) | (187,897 | ) | (59,490 | ) | 2,377,529 | 106,710 | ||||||||||||
Net realized capital gains (losses) | 275,945 | 187,897 | 59,490 | (2,377,529 | ) | (11,155 | ) | |||||||||||||
Schwab | ||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||
Capital shares | $— | $— | $— | |||||||||||||||||
Undistributed net investment income | (35,719 | ) | 246,847 | 180,549 | ||||||||||||||||
Net realized capital gains (losses) | 35,719 | (246,847 | ) | (180,549 | ) |
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Schwab Active Equity Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
As of October 31, 2014, 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, 2014, 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 of 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 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 funds constituting Schwab Capital Trust, hereafter referred to as the “Funds”) at October 31, 2014, 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, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 16, 2014
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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 $793,942 to its shareholders for the year ended October 31, 2014. The respective foreign source income on the fund is $8,391,152.
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2014, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Core Equity Fund | 95.12 | ||||
Schwab Dividend Equity Fund | 60.35 | ||||
Schwab Large-Cap Growth Fund | 100.00 | ||||
Schwab Small-Cap Equity Fund | 32.05 | ||||
Schwab Hedged Equity Fund | — | ||||
Schwab Financial Services Fund | 100.00 | ||||
Schwab Health Care Fund | 35.15 | ||||
Schwab International Core Equity Fund | — |
For the fiscal year ended October 31, 2014, 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 2015 via IRS form 1099 of the amounts for use in preparing their 2014 income tax return.
Schwab Core Equity Fund | $20,172,716 | |||
Schwab Dividend Equity Fund | 18,236,557 | |||
Schwab Large-Cap Growth Fund | 1,490,864 | |||
Schwab Small-Cap Equity Fund | 5,986,127 | |||
Schwab Hedged Equity Fund | — | |||
Schwab Financial Services Fund | 544,804 | |||
Schwab Health Care Fund | 11,434,845 | |||
Schwab International Core Equity Fund | 4,069,832 |
Under Section 852 (b)(3)(C) of the Internal Revenue Code, the funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2014:
Schwab Core Equity Fund | $157,596,466 | |||
Schwab Dividend Equity Fund | 118,279,747 | |||
Schwab Large-Cap Growth Fund | — | |||
Schwab Small-Cap Equity Fund | 39,824,590 | |||
Schwab Hedged Equity Fund | 15,225,593 | |||
Schwab Financial Services Fund | — | |||
Schwab Health Care Fund | 61,203,934 | |||
Schwab International Core Equity 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 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 30, 2014, and June 3, 2014, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 3, 2014. 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 its review of Fund expenses and adviser profitability discussed below. Although Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund and Schwab Health Care 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 Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund and Schwab Health Care 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 97 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) | |||
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) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 76 | Director, KLA-Tencor Corporation (2008 – present) | |||
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, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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) | |||
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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. | 97 | 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 Investment Management, 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; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). | |
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). | |
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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 | |
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. 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.
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.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. 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 Growth Index An index that is composed of larger-cap companies and measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values
Russell 1000 Index An index that measures the performance of the large-cap segment of the U.S. equity universe.
Russell 1000 Value 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 large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.
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 Financial 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
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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• | to help us process transactions for your account; |
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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
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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 the 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 Fundamental Global Real Estate 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.
© 2014 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR26298-11
00128296
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Annual report dated October 31, 2014, 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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Table of Contents
This wrapper is not part of the shareholder report.
Table of Contents
Schwab Fundamental Index* Funds
Annual Report
October 31, 2014
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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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, 2014 | ||||
Schwab Fundamental US Large Company Index Fund (Ticker Symbol: SFLNX) | 15.74% | |||
Russell Fundamental U.S. Large Company Index | 16.23% | |||
Fund Category: Morningstar Large Value | 13.60% | |||
Performance Details | pages 6-7 | |||
Schwab Fundamental US Small Company Index Fund (Ticker Symbol: SFSNX) | 10.99% | |||
Russell Fundamental U.S. Small Company Index | 11.49% | |||
Fund Category: Morningstar Small Blend | 7.66% | |||
Performance Details | pages 8-9 | |||
Schwab Fundamental International Large Company Index Fund1 (Ticker Symbol: SFNNX) | 0.39% | |||
Russell Fundamental Developed ex-U.S. Large Company Index (Net) | 0.00% | |||
Fund Category: Morningstar Foreign Large Value | -0.45% | |||
Performance Details | pages 10-11 | |||
Schwab Fundamental International Small Company Index Fund1 (Ticker Symbol: SFILX) | -0.07% | |||
Russell Fundamental Developed ex-U.S. Small Company Index (Net) | -0.38% | |||
Fund Category: Morningstar Foreign Small/Mid Blend | -0.50% | |||
Performance Details | pages 12-13 | |||
Schwab Fundamental Emerging Markets Large Company Index Fund1 (Ticker Symbol: SFENX) | -5.03% | |||
Russell Fundamental Emerging Markets Large Company Index (Net) | -4.59% | |||
Fund Category: Morningstar Diversified Emerging Markets | 1.37% | |||
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/0000950123-15-000008/f30296ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
For 25 years, Charles Schwab Investment Management has been committed to building funds that are designed to serve as part of the foundation of an investor’s portfolio.
In recent years, fundamentally weighted index strategies have enjoyed significant asset growth as investors have embraced the value of alternative index strategies. Unlike traditional equity indices that are often weighted by market capitalization, fundamentally weighted indices select and weight stocks by objective non-price measures, such as dividends, cash flow, and sales. By using this weighting methodology, the Schwab Fundamental Index Funds can serve as effective complements to capitalization-weighted and actively managed investment vehicles, with the goal of helping shareholders to create the potential for more attractive risk-adjusted portfolios.
For the 12-month reporting period ended October 31, 2014, the funds generated returns that were closely aligned with their respective indices, reflecting a rally by U.S. stocks but a weaker performance by international stocks. The depreciation of many foreign currencies versus the U.S. dollar was a key reason for the performance by international stocks, as slow economic growth overseas convinced the Bank of Japan and other central banks to keep interest rates low, even as the Fed scaled back its stimulative policies. Financial markets faced additional hurdles that included continued geopolitical tensions. These and other factors contributed to heightened market uncertainty.1In the
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2014
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 17.27% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 8.06% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −0.60% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 4.14% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.03% | Barclays U.S. Treasury Bills 1-3 Months Index: measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctcaptst03.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
For the 12-month reporting period ended October 31, 2014, the funds generated returns that were closely aligned with their respective indices, reflecting a rally by U.S. stocks but a weaker performance by international stocks.
U.S., many large-cap stock market indices reached record highs amid rebounding economic growth and generally favorable earnings reports, while small-cap stocks underperformed by comparison. As a result, the Russell Fundamental U.S. Large Company Index returned 16.2%, and the Russell Fundamental Emerging Markets Large Company Index returned -4.6%.2
In related product news, we are excited to announce the launch of the Schwab Fundamental Global Real Estate Index Fund, which enhances our line-up of fundamentally weighted strategies. More information about this new fund can be found on www.schwabfunds.com, or by contacting us at 1-800-435-4000. For information about the Schwab Fundamental Index Funds, please continue reading this report.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctschandom.gif)
1 To find out more information, please read “Investments in Russian Securities” in the “What’s New” section on www.schwabfunds.com.
2 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
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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. |
Schwab Fundamental Index Funds 5
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Schwab Fundamental US Large Company Index Fund
The Schwab Fundamental US Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell Fundamental U.S. Large Company Index (the index), which measures the performance of the large company size segment by fundamental overall company scores 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.
Performance. The fund returned 15.74% for the 12-month reporting period ended October 31, 2014, while the comparative index returned 16.23%. 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. The fund also received strong cash inflows during the reporting period. On some occasions, this cash was briefly invested in S&P 500 Index futures, and these futures lagged the return of the index during portions of the 12-month reporting period, slightly detracting from the fund’s relative performance.
Market Highlights. Large-cap U.S. stocks produced double-digit returns and outperformed small-cap stocks for the 12-month reporting period, despite heightened geopolitical tensions and increased market volatility. The Federal Reserve left short-term interest rates historically low, making financing more affordable for businesses and households and generally supporting stocks. In addition, a rebounding U.S. economy and forecasts for stronger earnings by select companies contributed positively to market performance.
Contributors and Detractors. The Information Technology sector contributed the most to the fund’s total return. The large average weight of this sector represents part of the reason for this contribution, with Information Technology stocks comprising approximately 13% of the fund. The Information Technology sector returned approximately 26% for the 12-month reporting period, reflecting the overall performance of companies involved in Internet and software services. One example from this sector is Microsoft Corporation, a company that develops, manufactures, licenses, sells, and supports software products. The fund’s holdings of Microsoft Corporation returned approximately 36%. The Health Care sector also provided a meaningful contribution to the return of the fund, representing an average weight of approximately 12% of the fund and returning approximately 29%.
The Telecommunication Services sector also generated positive returns for the fund, but was the weakest contributor to the total return. Telecommunication Services stocks represented an average weight of approximately 4% of the fund and returned approximately 3%, reflecting the overall performance of companies involved in diversified and wireless telecommunication services. One example from this sector is NII Holdings, Inc. (Class B), a mobile communications provider for business customers in Latin America. The fund’s holdings of NII Holdings, Inc. (Class B) returned approximately -83%. Another relatively weak contributor the fund’s overall return was the Materials sector, which represented an average weight of approximately 4% of the fund and returned approximately 13%.
As of 10/31/14:
Statistics
Number of Holdings | 634 | |||
Weighted Average Market Cap ($ x 1,000,000) | $116,587 | |||
Price/Earnings Ratio (P/E) | 17.6 | |||
Price/Book Ratio (P/B) | 2.3 | |||
Portfolio Turnover Rate | 14% |
Sector Weightings % of Investments
Energy | 14.3% | |||
Information Technology | 13.6% | |||
Financials | 13.2% | |||
Consumer Discretionary | 12.0% | |||
Health Care | 11.8% | |||
Consumer Staples | 11.7% | |||
Industrials | 10.0% | |||
Utilities | 4.5% | |||
Telecommunication Services | 4.0% | |||
Materials | 3.8% | |||
Other | 1.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Exxon Mobil Corp. | 4.6% | |||
Chevron Corp. | 2.5% | |||
AT&T, Inc. | 2.1% | |||
Microsoft Corp. | 2.1% | |||
The Procter & Gamble Co. | 1.5% | |||
ConocoPhillips | 1.5% | |||
Intel Corp. | 1.4% | |||
Wal-Mart Stores, Inc. | 1.4% | |||
Verizon Communications, Inc. | 1.4% | |||
JPMorgan Chase & Co. | 1.3% | |||
Total | 19.8% |
Management 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsfulcif.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) | 15.74 | % | 17.25 | % | 7.78 | % | |||||||||
Russell Fundamental U.S. Large Company Index | 16.23 | % | N/A | N/A | |||||||||||
Fundamental U.S. Large Company Spliced Index | 16.23 | % | 17.56 | % | 8.00 | % | |||||||||
Fund Category: Morningstar Large Value | 13.60 | % | 14.53 | % | 5.25 | % |
Fund Expense Ratios5: Net 0.35%; Gross 0.41%
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. 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.
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 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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.
Performance. The fund returned 10.99% for the 12-month reporting period ended October 31, 2014, while the comparative index returned 11.49%. 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. The fund also received strong cash inflows during the reporting period. On some occasions, this cash was briefly invested in Russell 2000 Index futures, and these futures lagged the return of the index during portions of the 12-month reporting period, slightly detracting from the fund’s relative performance.
Market Highlights. Small-cap U.S. stocks underperformed large-cap U.S. stocks, though both generated positive returns for the 12-month reporting period. The Federal Reserve left short-term interest rates historically low, making financing more affordable for businesses and households and generally supporting stocks. Despite heightened geopolitical tensions and increased market volatility, the U.S. economy rebounded over the reporting period, and forecasts for stronger earnings by select companies contributed positively to market performance.
Contributors and Detractors. The Financials sector was the biggest contributor to the fund’s total return. The large average weight of this sector represents part of the reason for this contribution, with Financials stocks comprising approximately 21% of the fund. The Financials sector returned approximately 15%, reflecting the overall performance of companies involved in banking, diversified financial services, insurance, and real estate. One example from this sector is Protective Life Corporation, a provider of financial services through the production, distribution, and administration of insurance and investment products. The fund’s holdings of Protective Life Corporation returned approximately 54%. The Information Technology sector was another significant contributor to the fund’s overall performance, representing an average weight of approximately 15% of the fund and returning approximately 20%.
The Energy sector was the only detractor from the performance of the index and the fund. Energy stocks represented an average weight of approximately 6% of the fund and returned -18%, reflecting the overall performance of companies engaged in exploration and production, refining and marketing, and storage and transportation of oil, gas, coal and consumable fuels, as well as companies that offer oil and gas equipment and services. One example from this sector is McDermott International, Inc., a worldwide energy services company. The fund’s holdings of McDermott International, Inc. returned approximately -52%. The Telecommunication Services sector generated positive returns, but was among the weakest contributors to the performance of the fund. Telecommunication Services stocks represented an average weight of less than 1% of the fund and returned approximately 26%.
As of 10/31/14:
Statistics
Number of Holdings | 903 | |||
Weighted Average Market Cap ($ x 1,000,000) | $3,997 | |||
Price/Earnings Ratio (P/E) | 39.3 | |||
Price/Book Ratio (P/B) | 2.0 | |||
Portfolio Turnover Rate | 29% |
Sector Weightings % of Investments
Financials | 21.7% | |||
Industrials | 19.6% | |||
Consumer Discretionary | 15.1% | |||
Information Technology | 14.2% | |||
Health Care | 7.0% | |||
Materials | 5.6% | |||
Energy | 4.7% | |||
Utilities | 4.0% | |||
Consumer Staples | 3.6% | |||
Telecommunication Services | 1.0% | |||
Other | 3.5% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
ITT Corp. | 0.3% | |||
Protective Life Corp. | 0.3% | |||
Popular, Inc. | 0.3% | |||
Dean Foods Co. | 0.3% | |||
Endurance Specialty Holdings Ltd. | 0.3% | |||
Centene Corp. | 0.3% | |||
Lennox International, Inc. | 0.3% | |||
Questar Corp. | 0.3% | |||
The Pantry, Inc. | 0.3% | |||
Sanmina Corp. | 0.3% | |||
Total | 3.0% |
Management 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 many 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsfuscif.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) | 10.99 | % | 18.29 | % | 8.54 | % | |||||||||
Russell Fundamental U.S. Small Company Index | 11.49 | % | N/A | N/A | |||||||||||
Fundamental U.S. Small Company Spliced Index | 11.49 | % | 18.48 | % | 9.12 | % | |||||||||
Fund Category: Morningstar Small Blend | 7.66 | % | 16.61 | % | 6.28 | % |
Fund Expense Ratios5: Net 0.35%; Gross 0.48%
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. 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.
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 | As stated in the prospectus. The expense information shown in the table has been restated to reflect the removal of expenses incurred indirectly by the fund through its investment in business development companies (“BDCs”). The fund’s benchmark index no longer includes BDCs. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 9
Table of Contents
Schwab Fundamental International Large Company Index Fund
The Schwab Fundamental International Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the total return of the Russell Fundamental Developed ex-U.S. Large Company Index (Net) (the index), which measures the performance of the large company size segment by fundamental overall company scores 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.
Performance. The fund returned 0.39% for the 12-month reporting period ended October 31, 2014, while the comparative index returned 0.00%. 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. Also, the fund received strong cash inflows during the reporting period, and on some occasions, this cash was briefly invested in MSCI EAFE Index futures. These futures lagged the return of the index during portions of the 12-month reporting period, slightly detracting from the fund’s relative performance. However, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings enhanced the fund’s relative performance.1
Market Highlights. International large-cap stocks produced positive returns for the 12-month reporting period, despite continued geopolitical tensions and unsteady global economic growth. The reduction of some stimulative measures by the Federal Reserve contributed to the depreciation of many international currencies versus the U.S. dollar, generally reducing overall returns on overseas investments.
Contributors and Detractors. Stocks from Italy were among the biggest contributors to the returns of both the index and the fund. Italian stocks represented an average weight of approximately 5% of the fund and returned approximately 4% in U.S. dollar terms. One example from this market is Enel S.p.A., a company that generates, transmits, distributes, and trades electricity. The fund’s holdings of Enel S.p.A. returned approximately 19% in U.S. dollar terms. Stocks from Switzerland also contributed to the fund’s performance. Swiss stocks represented an average weight of approximately 6% of the fund and returned approximately 4% in U.S. dollar terms.
German stocks were among the biggest detractors from the total return of the fund. Stocks from Germany represented an average weight of approximately 9% of the fund and returned approximately -6% in U.S. dollar terms. One example from this market is Deutsche Bank AG, a global financial services provider. The fund’s holdings of Deutsche Bank AG returned approximately -31% in U.S. dollar terms. Stocks from Japan also performed poorly for the fund overall, representing an average weight of approximately 19% of the fund and returning less than 1% in U.S. dollar terms.
As of 10/31/14:
Statistics
Number of Holdings | 830 | |||
Weighted Average Market Cap ($ x 1,000,000) | $60,142 | |||
Price/Earnings Ratio (P/E) | 20.4 | |||
Price/Book Ratio (P/B) | 1.4 | |||
Portfolio Turnover Rate | 8% |
Sector Weightings % of Investments
Financials | 18.6% | |||
Energy | 13.1% | |||
Industrials | 12.4% | |||
Consumer Discretionary | 10.4% | |||
Materials | 9.3% | |||
Consumer Staples | 9.2% | |||
Telecommunication Services | 8.1% | |||
Health Care | 6.9% | |||
Utilities | 6.2% | |||
Information Technology | 4.7% | |||
Other | 1.1% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets2
BP plc | 2.2% | |||
Royal Dutch Shell plc, A Shares | 2.0% | |||
Total S.A. | 1.8% | |||
HSBC Holdings plc | 1.4% | |||
Royal Dutch Shell plc, B Shares | 1.4% | |||
Banco Santander S.A. | 1.2% | |||
Nestle S.A. – Reg’d | 1.1% | |||
Telefornica S.A. | 1.1% | |||
Vodafone Group plc | 1.0% | |||
Eni S.p.A | 1.0% | |||
Total | 14.2% |
Management views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
1 | 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. | |
2 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsfilcif.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) | 0.39 | % | 5.90 | % | 1.16 | % | |||||||||
Russell Fundamental Developed ex-U.S. Large Company Index (Net) | 0.00 | % | N/A | N/A | |||||||||||
Fundamental Developed ex-U.S. Large Company Spliced Index | 0.00 | % | 6.04 | % | 1.91 | % | |||||||||
Fund Category: Morningstar Foreign Large Value | -0.45 | % | 6.13 | % | 0.25 | % |
Fund Expense Ratios5: Net 0.35%; Gross 0.52%
Country Weightings % of Investments
Japan | 21.3% | |||
United Kingdom | 16.8% | |||
France | 10.3% | |||
Germany | 8.5% | |||
Canada | 6.8% | |||
Netherlands | 5.7% | |||
Switzerland | 5.6% | |||
Australia | 5.5% | |||
Spain | 4.4% | |||
Italy | 3.9% | |||
Other Countries | 11.2% | |||
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. 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.
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 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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.
Performance. The fund returned -0.07% for the 12-month reporting period ended October 31, 2014, while the comparative index returned -0.38%. 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. Also, the fund received strong cash inflows during the reporting period, and on some occasions, this cash was briefly invested in MSCI EAFE Index futures and the iShares MSCI EAFE Small-Cap ETF. These securities lagged the return of the index during portions of the 12-month reporting period, slightly detracting from the fund’s relative performance. However, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings enhanced the fund’s relative performance.1
Market Highlights. International small-cap stocks produced negative returns for the 12-month reporting period, in part due to continued geopolitical tensions and unsteady economic growth. The reduction of some stimulative measures by the Federal Reserve contributed to the depreciation of many international currencies versus the U.S. dollar, generally reducing overall returns on overseas investments.
Contributors and Detractors. Stocks from the United Kingdom were among the biggest contributors to the fund’s total return from a country perspective, and represented an average weight of approximately 13% of the fund. United Kingdom stocks returned approximately 4% in U.S. dollar terms. One example from this market is Ashtead Group plc, an international equipment rental company servicing customers in the U.S. and the United Kingdom. The fund’s holdings of Ashtead Group plc returned approximately 61% in U.S. dollar terms. Stocks from Japan also provided meaningful contributions to the fund’s performance, representing an average weight of approximately 37% of the fund and returning approximately 2% in U.S. dollar terms.
German stocks were among the biggest detractors from the returns of both the index and the fund. Stocks from Germany represented an average weight of approximately 4% of the fund and returned approximately -9% in U.S. dollar terms. One example from this market is Suedzucker AG, an operator in the traditional sugar industry in Eastern and Western Europe. The fund’s holdings of Suedzucker AG returned approximately -38% in U.S. dollar terms. Stocks from Italy also detracted from the performance of the index and the fund. Italian stocks represented an average weight of approximately 3% of the fund and returned approximately -11% in U.S. dollar terms.
As of 10/31/14:
Statistics
Number of Holdings | 1,328 | |||
Weighted Average Market Cap ($ x 1,000,000) | $3,362 | |||
Price/Earnings Ratio (P/E) | 24.4 | |||
Price/Book Ratio (P/B) | 1.3 | |||
Portfolio Turnover Rate | 41% |
Sector Weightings % of Investments
Industrials | 23.1% | |||
Consumer Discretionary | 18.8% | |||
Financials | 17.3% | |||
Materials | 10.4% | |||
Information Technology | 8.8% | |||
Consumer Staples | 7.7% | |||
Health Care | 4.6% | |||
Energy | 3.4% | |||
Utilities | 1.6% | |||
Telecommunication Services | 1.1% | |||
Other | 3.2% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets2
iShares MSCI EAFE Small Cap ETF | 0.7% | |||
Dixons Carphone plc | 0.3% | |||
Celesio AG | 0.3% | |||
DCC plc | 0.2% | |||
Persimmon plc | 0.2% | |||
Evraz plc | 0.2% | |||
Bankia S.A. | 0.2% | |||
Koito Manufacturing Co., Ltd. | 0.2% | |||
Hitachi High-Technologies Corp. | 0.2% | |||
Alps Electric Co., Ltd. | 0.2% | |||
Total | 2.7% |
Management 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 many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
1 | 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. | |
2 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsfiscif.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) | -0.07 | % | 8.47 | % | 5.24 | % | |||||||||
Russell Fundamental Developed ex-U.S. Small Company Index (Net) | -0.38 | % | N/A | N/A | |||||||||||
Fundamental Developed ex-U.S. Small Company Spliced Index | -0.38 | % | 8.75 | % | 6.61 | % | |||||||||
Fund Category: Morningstar Foreign Small/Mid Blend | -0.50 | % | 9.71 | % | 4.11 | % |
Fund Expense Ratios5: Net 0.50%; Gross 0.94%
Country Weightings % of Investments
Japan | 37.8% | |||
United Kingdom | 12.7% | |||
Canada | 7.9% | |||
Australia | 5.8% | |||
France | 4.2% | |||
Germany | 3.6% | |||
United States | 3.1% | |||
Switzerland | 2.9% | |||
Hong Kong | 2.8% | |||
Other Countries | 19.2% | |||
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. 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. 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.
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 | 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 the 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 seeks to maintain 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.
Performance. The fund returned -5.03% for the 12-month reporting period ended October 31, 2014, while the comparative index returned -4.59%. 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. Additionally, timing differences in foreign exchange calculations and fair valuation of the fund’s holdings enhanced the fund’s relative performance.1
Market Highlights. Emerging market stocks produced negative returns in U.S. dollar terms for the 12-month reporting period, in part due to continued geopolitical tensions and unsteady global economic growth. The reduction of some stimulative measures by the Federal Reserve contributed to the depreciation of many international currencies versus the U.S. dollar, generally reducing overall returns on overseas investments. However, continued low short-term interest rates in the U.S. helped emerging markets, as did relatively attractive stock valuations and high-profile election outcomes in several countries, including India and Indonesia.
Contributors and Detractors. Stocks from Taiwan were among the biggest contributors to the returns of both the index and the fund. Taiwanese stocks represented an average weight of approximately 13% of the fund and returned approximately 11% in U.S. dollar terms. One example from this market is Hon Hai Precision Industry Co., Ltd., a provider of electronic manufacturing services for computers, communications, and consumer electronic products. The fund’s holdings of Hon Hai Precision Industry Co., Ltd. returned approximately 42% in U.S. dollar terms. Stocks from India also contributed to the fund’s performance, representing an average weight of approximately 4% of the fund and returning approximately 30% in U.S. dollar terms.
Russian stocks were among the biggest detractors from the total return of the fund. Stocks from Russia represented an average weight of approximately 14% of the fund and returned approximately -24% in U.S. dollar terms. One example from this market is sponsored American depositary receipts of Gazprom OAO, a company that operates gas pipeline systems, produces and explores gas, and transports high pressure gas in the Russian Federation and European countries. The fund’s holdings of Gazprom OAO returned approximately -27% in U.S. dollar terms. Stocks from Brazil also detracted from the performance of the fund. Brazilian stocks represented an average weight of approximately 14% of the fund and returned approximately -19% in U.S. dollar terms.
As of 10/31/14:
Statistics
Number of Holdings | 302 | |||
Weighted Average Market Cap ($ x 1,000,000) | $52,954 | |||
Price/Earnings Ratio (P/E) | 10.7 | |||
Price/Book Ratio (P/B) | 1.0 | |||
Portfolio Turnover Rate | 19% |
Sector Weightings % of Investments
Energy | 24.2% | |||
Financials | 19.4% | |||
Information Technology | 15.8% | |||
Materials | 11.2% | |||
Telecommunication Services | 10.8% | |||
Consumer Discretionary | 5.5% | |||
Industrials | 5.4% | |||
Utilities | 3.7% | |||
Consumer Staples | 3.5% | |||
Other | 0.5% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets2
Samsung Electronics Co., Ltd. | 3.6% | |||
Gazprom OAO ADR | 2.9% | |||
LUKOIL OAO ADR | 2.6% | |||
China Mobile Ltd. | 2.4% | |||
Petroleo Brasileiro S.A., Preferred Stock | 2.0% | |||
China Construction Bank Corp., Class H | 2.0% | |||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1.9% | |||
Hon Hai Precision Industry Co., Ltd. | 1.6% | |||
Industrial & Commercial Bank of China Ltd., Class H | 1.6% | |||
China Petroleum & Chemical Corp., Class H | 1.5% | |||
Total | 22.1% |
Management views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
1 | 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. | |
2 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1,2,3
Performance of Hypothetical
$10,000 Investment1,2,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsfemif.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) | -5.03 | % | 2.31 | % | 0.39 | % | |||||||||
Russell Fundamental Emerging Markets Large Company Index (Net) | -4.59 | % | N/A | N/A | |||||||||||
Fundamental Emerging Markets Large Company Spliced Index | -4.59 | % | 3.50 | % | 2.16 | % | |||||||||
Fund Category: Morningstar Diversified Emerging Markets | 1.37 | % | 4.72 | % | 0.81 | % |
Fund Expense Ratios5: Net 0.50%; Gross 0.89%
Country Weightings % of Investments
Republic of Korea | 17.7% | |||
China | 16.4% | |||
Brazil | 13.6% | |||
Taiwan | 12.8% | |||
Russia | 12.4% | |||
South Africa | 7.0% | |||
India | 4.2% | |||
Mexico | 3.6% | |||
Other Countries | 12.3% | |||
Total | 100.0% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
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. 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.
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 | 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 the 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, 2014 and held through October 31, 2014.
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 5/1/14 | at 10/31/14 | 05/1/14–10/31/14 | |||||||||||||
Schwab Fundamental US Large Company Index Fund | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000.00 | $ | 1,062.80 | $ | 1.82 | |||||||||
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 | $ | 1,037.60 | $ | 1.80 | |||||||||
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 | $ | 938.40 | $ | 1.71 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000.00 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab Fundamental International Small Company Index Fund | ||||||||||||||||
Actual Return | 0.49% | $ | 1,000.00 | $ | 955.40 | $ | 2.42 | |||||||||
Hypothetical 5% Return | 0.49% | $ | 1,000.00 | $ | 1,022.73 | $ | 2.50 | |||||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | ||||||||||||||||
Actual Return | 0.49% | $ | 1,000.00 | $ | 995.40 | $ | 2.46 | |||||||||
Hypothetical 5% Return | 0.49% | $ | 1,000.00 | $ | 1,022.73 | $ | 2.50 |
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
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.65 | 10.76 | 9.51 | 9.05 | 7.63 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.26 | 0.24 | 0.21 | 0.18 | 0.14 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.87 | 2.89 | 1.22 | 0.43 | 1.37 | |||||||||||||||||
Total from investment operations | 2.13 | 3.13 | 1.43 | 0.61 | 1.51 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.22 | ) | (0.24 | ) | (0.18 | ) | (0.15 | ) | (0.09 | ) | ||||||||||||
Net asset value at end of period | 15.56 | 13.65 | 10.76 | 9.51 | 9.05 | |||||||||||||||||
Total return (%) | 15.74 | 29.67 | 15.29 | 6.74 | 19.95 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.35 | 0.35 | 0.32 | 1 | 0.35 | 0.35 | ||||||||||||||||
Gross operating expenses | 0.39 | 0.41 | 0.44 | 0.44 | 0.45 | |||||||||||||||||
Net investment income (loss) | 1.95 | 2.03 | 2.13 | 2.06 | 1.77 | |||||||||||||||||
Portfolio turnover rate | 14 | 10 | 32 | 2 | 11 | 27 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 4,465 | 3,020 | 1,960 | 1,490 | 1,019 |
1 The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included.
2 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
Condensed Portfolio Holdings as of October 31, 2014
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 | ($) | ($) | ||||||||||
99 | .6% | Common Stock | 3,311,517,644 | 4,445,205,810 | ||||||||
1 | .0% | Other Investment Companies | 45,972,730 | 45,972,730 | ||||||||
0 | .1% | Short-Term Investment | 3,299,949 | 3,299,949 | ||||||||
100 | .7% | Total Investments | 3,360,790,323 | 4,494,478,489 | ||||||||
(0 | .7%) | Other Assets and Liabilities, Net | (29,730,141 | ) | ||||||||
100 | .0% | Net Assets | 4,464,748,348 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.6% of net assets | ||||||||||||
Automobiles & Components 1.0% | ||||||||||||
Other Securities | 1.0 | 44,888,506 | ||||||||||
Banks 5.6% | ||||||||||||
Bank of America Corp. | 3,291,794 | 1.3 | 56,487,185 | |||||||||
Citigroup, Inc. | 651,872 | 0.8 | 34,894,708 | |||||||||
JPMorgan Chase & Co. | 965,923 | 1.3 | 58,419,023 | |||||||||
Wells Fargo & Co. | 847,363 | 1.0 | 44,986,502 | |||||||||
Other Securities | 1.2 | 56,163,571 | ||||||||||
5.6 | 250,950,989 | |||||||||||
Capital Goods 7.5% | ||||||||||||
3M Co. | 131,061 | 0.5 | 20,153,250 | |||||||||
General Electric Co. | 2,248,798 | 1.3 | 58,041,476 | |||||||||
United Technologies Corp. | 217,792 | 0.5 | 23,303,744 | |||||||||
Other Securities | 5.2 | 232,185,980 | ||||||||||
7.5 | 333,684,450 | |||||||||||
Commercial & Professional Supplies 0.8% | ||||||||||||
Other Securities | 0.8 | 36,879,166 | ||||||||||
Consumer Durables & Apparel 1.0% | ||||||||||||
Other Securities | 1.0 | 46,649,311 | ||||||||||
Consumer Services 1.6% | ||||||||||||
McDonald’s Corp. | 278,188 | 0.6 | 26,074,561 | |||||||||
Other Securities | 1.0 | 46,310,576 | ||||||||||
1.6 | 72,385,137 | |||||||||||
Diversified Financials 3.2% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 242,426 | 0.8 | 33,978,428 | |||||||||
The Charles Schwab Corp. (a) | 106,515 | 0.1 | 3,053,785 | |||||||||
Other Securities | 2.3 | 104,283,687 | ||||||||||
3.2 | 141,315,900 | |||||||||||
Energy 14.4% | ||||||||||||
Chevron Corp. | 927,912 | 2.5 | 111,303,044 | |||||||||
ConocoPhillips | 936,782 | 1.5 | 67,588,821 | |||||||||
Exxon Mobil Corp. | 2,135,781 | 4.6 | 206,551,380 | |||||||||
Occidental Petroleum Corp. | 208,200 | 0.4 | 18,515,226 | |||||||||
Phillips 66 | 414,008 | 0.7 | 32,499,628 | |||||||||
Schlumberger Ltd. | 205,063 | 0.5 | 20,231,516 | |||||||||
Valero Energy Corp. | 412,966 | 0.5 | 20,685,467 | |||||||||
Other Securities | 3.7 | 165,748,998 | ||||||||||
14.4 | 643,124,080 | |||||||||||
Food & Staples Retailing 4.2% | ||||||||||||
Costco Wholesale Corp. | 158,463 | 0.5 | 21,134,210 | |||||||||
CVS Health Corp. | 493,816 | 0.9 | 42,374,351 | |||||||||
Wal-Mart Stores, Inc. | 826,472 | 1.4 | 63,035,020 | |||||||||
Walgreen Co. | 329,682 | 0.5 | 21,172,178 | |||||||||
Other Securities | 0.9 | 41,815,236 | ||||||||||
4.2 | 189,530,995 | |||||||||||
Food, Beverage & Tobacco 5.3% | ||||||||||||
Altria Group, Inc. | 477,216 | 0.5 | 23,068,621 | |||||||||
PepsiCo, Inc. | 350,763 | 0.8 | 33,732,878 | |||||||||
Philip Morris International, Inc. | 416,488 | 0.8 | 37,071,597 | |||||||||
The Coca-Cola Co. | 685,043 | 0.7 | 28,689,601 | |||||||||
Other Securities | 2.5 | 113,293,845 | ||||||||||
5.3 | 235,856,542 | |||||||||||
Health Care Equipment & Services 6.0% | ||||||||||||
UnitedHealth Group, Inc. | 386,796 | 0.8 | 36,749,488 | |||||||||
WellPoint, Inc. | 253,350 | 0.7 | 32,096,911 | |||||||||
Other Securities | 4.5 | 199,445,961 | ||||||||||
6.0 | 268,292,360 | |||||||||||
Household & Personal Products 2.2% | ||||||||||||
The Procter & Gamble Co. | 783,835 | 1.5 | 68,405,281 | |||||||||
Other Securities | 0.7 | 30,977,636 | ||||||||||
2.2 | 99,382,917 | |||||||||||
Insurance 3.2% | ||||||||||||
The Travelers Cos., Inc. | 241,772 | 0.5 | 24,370,618 | |||||||||
Other Securities | 2.7 | 120,234,908 | ||||||||||
3.2 | 144,605,526 |
18 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Materials 3.8% | ||||||||||||
Other Securities | 3.8 | 169,272,078 | ||||||||||
Media 3.6% | ||||||||||||
Comcast Corp., Class A | 439,657 | 0.5 | 24,335,015 | |||||||||
The Walt Disney Co. | 317,662 | 0.7 | 29,027,954 | |||||||||
Time Warner, Inc. | 310,533 | 0.6 | 24,678,057 | |||||||||
Other Securities | 1.8 | 81,696,389 | ||||||||||
3.6 | 159,737,415 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.9% | ||||||||||||
Amgen, Inc. | 174,623 | 0.6 | 28,320,358 | |||||||||
Bristol-Myers Squibb Co. | 318,061 | 0.4 | 18,507,970 | |||||||||
Johnson & Johnson | 529,307 | 1.3 | 57,048,708 | |||||||||
Merck & Co., Inc. | 542,262 | 0.7 | 31,418,660 | |||||||||
Pfizer, Inc. | 1,775,404 | 1.2 | 53,173,350 | |||||||||
Other Securities | 1.7 | 73,936,568 | ||||||||||
5.9 | 262,405,614 | |||||||||||
Real Estate 1.3% | ||||||||||||
Other Securities | 1.3 | 55,953,593 | ||||||||||
Retailing 4.9% | ||||||||||||
Lowe’s Cos., Inc. | 428,245 | 0.6 | 24,495,614 | |||||||||
Target Corp. | 380,883 | 0.5 | 23,546,187 | |||||||||
The Home Depot, Inc. | 329,143 | 0.7 | 32,098,025 | |||||||||
Other Securities | 3.1 | 137,097,626 | ||||||||||
4.9 | 217,237,452 | |||||||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||||||
Intel Corp. | 1,856,876 | 1.4 | 63,152,353 | |||||||||
Other Securities | 1.2 | 51,193,036 | ||||||||||
2.6 | 114,345,389 | |||||||||||
Software & Services 6.5% | ||||||||||||
International Business Machines Corp. | 333,101 | 1.2 | 54,761,804 | |||||||||
Microsoft Corp. | 1,945,428 | 2.1 | 91,337,845 | |||||||||
Oracle Corp. | 564,344 | 0.5 | 22,037,633 | |||||||||
Other Securities | 2.7 | 120,405,613 | ||||||||||
6.5 | 288,542,895 | |||||||||||
Technology Hardware & Equipment 4.7% | ||||||||||||
Apple, Inc. | 450,457 | 1.1 | 48,649,356 | |||||||||
Cisco Systems, Inc. | 1,393,051 | 0.8 | 34,087,958 | |||||||||
Hewlett-Packard Co. | 1,567,491 | 1.2 | 56,241,577 | |||||||||
Other Securities | 1.6 | 70,469,911 | ||||||||||
4.7 | 209,448,802 | |||||||||||
Telecommunication Services 4.0% | ||||||||||||
AT&T, Inc. | 2,714,031 | 2.1 | 94,556,840 | |||||||||
Verizon Communications, Inc. | 1,244,249 | 1.4 | 62,523,512 | |||||||||
Other Securities | 0.5 | 22,423,129 | ||||||||||
4.0 | 179,503,481 | |||||||||||
Transportation 1.8% | ||||||||||||
Other Securities | 1.8 | 79,055,528 | ||||||||||
Utilities 4.5% | ||||||||||||
Other Securities | 4.5 | 202,157,684 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $3,311,517,644) | 4,445,205,810 | |||||||||||
Other Investment Companies 1.0% of net assets | ||||||||||||
Money Market Fund 0.6% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (e) | 27,373,071 | 0.6 | 27,373,071 | |||||||||
Securities Lending Collateral 0.4% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (e) | 18,599,659 | 0.4 | 18,599,659 | |||||||||
Total Other Investment Companies | ||||||||||||
(Cost $45,972,730) | 45,972,730 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 3,299,949 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $3,299,949) | 3,299,949 | |||||||||||
End of Investments. |
At 10/31/14 tax basis cost of the fund’s investments was $3,376,361,505 and the unrealized appreciation and depreciation were $1,151,767,191 and ($33,650,207), respectively, with a net unrealized appreciation of $1,118,116,984.
For the following notes, please refer to the complete schedule of portfolio 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 $18,481,001. Non-Cash Collateral pledged to the fund for securities on loan amounted to $413,538. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
See financial notes 19
Table of Contents
Schwab Fundamental US Large Company Index Fund
Condensed Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 140 | 14,079,800 | 516,095 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $4,445,205,810 | $— | $— | $4,445,205,810 | ||||||||||||
Other Investment Companies1 | 45,972,730 | — | — | 45,972,730 | ||||||||||||
Short-Term Investments1 | — | 3,299,949 | — | 3,299,949 | ||||||||||||
Total | $4,491,178,540 | $3,299,949 | $— | $4,494,478,489 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $516,095 | $— | $— | $516,095 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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, 2014.
20 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated issuers, at value (cost $1,889,879) | $3,053,785 | |||||
Investments in unaffiliated issuers, at value (cost $3,340,300,785) including securities on loan of $18,481,001 | 4,472,825,045 | |||||
Collateral invested for securities on loan, at value (cost $18,599,659) | + | 18,599,659 | ||||
Total investments, at value (cost $3,360,790,323) | 4,494,478,489 | |||||
Receivables: | ||||||
Investments sold | 5,983 | |||||
Fund shares sold | 6,101,356 | |||||
Dividends | 5,569,514 | |||||
Variation margin on futures contracts | 142,584 | |||||
Income from securities on loan | 54,753 | |||||
Foreign tax reclaims | 4,968 | |||||
Prepaid expenses | + | 42,797 | ||||
Total assets | 4,506,400,444 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 18,599,659 | |||||
Payables: | ||||||
Investments bought | 19,073,311 | |||||
Investment adviser and administrator fees | 94,687 | |||||
Shareholder service fees | 111,629 | |||||
Fund shares redeemed | 2,801,546 | |||||
Due to custodian | 5,983 | |||||
Accrued expenses | + | 965,281 | ||||
Total liabilities | 41,652,096 | |||||
Net Assets | ||||||
Total assets | 4,506,400,444 | |||||
Total liabilities | − | 41,652,096 | ||||
Net assets | $4,464,748,348 | |||||
Net Assets by Source | ||||||
Capital received from investors | 3,173,710,920 | |||||
Net investment income not yet distributed | 59,284,035 | |||||
Net realized capital gains | 97,549,132 | |||||
Net unrealized capital appreciation | 1,134,204,261 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$4,464,748,348 | 286,895,766 | $15.56 |
See financial notes 21
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated issuer | $29,512 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $20,097) | 82,421,885 | |||||
Interest | 1,363 | |||||
Securities on loan | + | 634,758 | ||||
Total investment income | 83,087,518 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 8,356,401 | |||||
Shareholder service fees | 2,886,348 | |||||
Index fee | 2,187,893 | |||||
Shareholder reports | 150,468 | |||||
Registration fees | 126,082 | |||||
Transfer agent fees | 118,179 | |||||
Portfolio accounting fees | 113,261 | |||||
Custodian fees | 84,721 | |||||
Professional fees | 47,077 | |||||
Independent trustees’ fees | 22,776 | |||||
Tax expenses | 16,926 | |||||
Interest expense | 10,690 | |||||
Other expenses | + | 62,338 | ||||
Total expenses | 14,183,160 | |||||
Expense reduction by CSIM and its affiliates | − | 1,497,633 | ||||
Net expenses | − | 12,685,527 | ||||
Net investment income | 70,401,991 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on affiliated issuer | 576,680 | |||||
Net realized gains on unaffiliated investments | 118,765,187 | |||||
Net realized gains on futures contracts | + | 7,675,250 | ||||
Net realized gains | 127,017,117 | |||||
Net change in unrealized appreciation (depreciation) on affiliated issuer | 243,880 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated investments | 337,531,225 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | 39,319 | ||||
Net change in unrealized appreciation (depreciation) | + | 337,814,424 | ||||
Net realized and unrealized gains | 464,831,541 | |||||
Increase in net assets resulting from operations | $535,233,532 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $70,401,991 | $50,722,157 | ||||||||
Net realized gains | 127,017,117 | 57,736,284 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 337,814,424 | 523,232,112 | |||||||
Increase in net assets from operations | 535,233,532 | 631,690,553 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($47,960,089 | ) | ($42,909,493 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 144,506,228 | $2,105,376,361 | 84,032,984 | $1,024,135,625 | ||||||||||||||
Shares reinvested | 2,075,077 | 29,051,072 | 2,230,842 | 23,803,086 | ||||||||||||||
Shares redeemed | + | (80,931,679 | ) | (1,177,384,046 | ) | (47,078,841 | ) | (576,085,377 | ) | |||||||||
Net transactions in fund shares | 65,649,626 | $957,043,387 | 39,184,985 | $471,853,334 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 221,246,140 | $3,020,431,518 | 182,061,155 | $1,959,797,124 | ||||||||||||||
Total increase | + | 65,649,626 | 1,444,316,830 | 39,184,985 | 1,060,634,394 | |||||||||||||
End of period | 286,895,766 | $4,464,748,348 | 221,246,140 | $3,020,431,518 | ||||||||||||||
Net investment income not yet distributed | $59,284,035 | $36,913,755 |
See financial notes 23
Table of Contents
Schwab Fundamental US Small Company Index Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.78 | 10.31 | 10.11 | 10.10 | 7.88 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.14 | 0.16 | 0.15 | 0.11 | 0.09 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.23 | 3.35 | 0.88 | 0.47 | 2.19 | |||||||||||||||||
Total from investment operations | 1.37 | 3.51 | 1.03 | 0.58 | 2.28 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.12 | ) | (0.20 | ) | (0.12 | ) | (0.10 | ) | (0.06 | ) | ||||||||||||
Distributions from net realized gains | (0.52 | ) | (0.84 | ) | (0.71 | ) | (0.47 | ) | — | |||||||||||||
Total distributions | (0.64 | ) | (1.04 | ) | (0.83 | ) | (0.57 | ) | (0.06 | ) | ||||||||||||
Net asset value at end of period | 13.51 | 12.78 | 10.31 | 10.11 | 10.10 | |||||||||||||||||
Total return (%) | 10.99 | 37.55 | 11.37 | 5.55 | 29.07 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.35 | 0.35 | 0.32 | 1 | 0.35 | �� | 0.35 | |||||||||||||||
Gross operating expenses | 0.44 | 0.48 | 0.50 | 0.50 | 0.53 | |||||||||||||||||
Net investment income (loss) | 1.14 | 1.41 | 1.46 | 1.18 | 1.03 | |||||||||||||||||
Portfolio turnover rate | 29 | 27 | 92 | 2 | 35 | 41 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,208 | 849 | 619 | 563 | 412 |
1 The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included.
2 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
Condensed Portfolio Holdings as of October 31, 2014
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 | ($) | ($) | ||||||||||
99 | .5% | Common Stock | 936,334,702 | 1,201,580,309 | ||||||||
0 | .0% | Rights | 266,857 | 266,364 | ||||||||
3 | .4% | Other Investment Company | 40,701,297 | 40,701,297 | ||||||||
0 | .1% | Short-Term Investment | 1,039,983 | 1,039,983 | ||||||||
103 | .0% | Total Investments | 978,342,839 | 1,243,587,953 | ||||||||
(3 | .0%) | Other Assets and Liabilities, Net | (36,072,039 | ) | ||||||||
100 | .0% | Net Assets | 1,207,515,914 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.5% of net assets | ||||||||||||
Automobiles & Components 0.8% | ||||||||||||
Other Securities | 0.8 | 10,107,865 | ||||||||||
Banks 4.6% | ||||||||||||
Popular, Inc. * | 110,600 | 0.3 | 3,525,928 | |||||||||
Other Securities | 4.3 | 52,385,498 | ||||||||||
4.6 | 55,911,426 | |||||||||||
Capital Goods 11.2% | ||||||||||||
Carlisle Cos., Inc. | 35,100 | 0.3 | 3,119,688 | |||||||||
Huntington Ingalls Industries, Inc. | 25,700 | 0.2 | 2,719,574 | |||||||||
ITT Corp. | 94,000 | 0.3 | 4,235,640 | |||||||||
Lennox International, Inc. | 36,500 | 0.3 | 3,245,580 | |||||||||
Spirit AeroSystems Holdings, Inc., Class A * | 77,400 | 0.2 | 3,044,916 | |||||||||
Other Securities | 9.9 | 119,465,774 | ||||||||||
11.2 | 135,831,172 | |||||||||||
Commercial & Professional Supplies 5.0% | ||||||||||||
United Stationers, Inc. | 70,400 | 0.2 | 2,940,608 | |||||||||
Other Securities | 4.8 | 57,649,976 | ||||||||||
5.0 | 60,590,584 | |||||||||||
Consumer Durables & Apparel 2.8% | ||||||||||||
Hanesbrands, Inc. | 28,100 | 0.3 | 2,967,641 | |||||||||
Polaris Industries, Inc. | 18,300 | 0.2 | 2,760,738 | |||||||||
Other Securities | 2.3 | 27,561,855 | ||||||||||
2.8 | 33,290,234 | |||||||||||
Consumer Services 4.5% | ||||||||||||
Strayer Education, Inc. * | 38,100 | 0.2 | 2,788,539 | |||||||||
Other Securities | 4.3 | 51,448,383 | ||||||||||
4.5 | 54,236,922 | |||||||||||
Diversified Financials 3.3% | ||||||||||||
Eaton Vance Corp. | 74,500 | 0.2 | 2,743,835 | |||||||||
Federated Investors, Inc., Class B | 102,000 | 0.3 | 3,189,540 | |||||||||
SEI Investments Co. | 75,700 | 0.3 | 2,926,562 | |||||||||
Other Securities | 2.5 | 30,465,864 | ||||||||||
3.3 | 39,325,801 | |||||||||||
Energy 4.8% | ||||||||||||
Other Securities | 4.8 | 58,124,276 | ||||||||||
Food & Staples Retailing 0.8% | ||||||||||||
The Pantry, Inc. * | 125,600 | 0.3 | 3,236,712 | |||||||||
Other Securities | 0.5 | 6,162,280 | ||||||||||
0.8 | 9,398,992 | |||||||||||
Food, Beverage & Tobacco 2.6% | ||||||||||||
Dean Foods Co. | 238,800 | 0.3 | 3,512,748 | |||||||||
Other Securities | 2.3 | 27,626,293 | ||||||||||
2.6 | 31,139,041 | |||||||||||
Health Care Equipment & Services 5.4% | ||||||||||||
Centene Corp. * | 37,100 | 0.3 | 3,438,057 | |||||||||
Cerner Corp. * | 47,800 | 0.3 | 3,027,652 | |||||||||
Edwards Lifesciences Corp. * | 25,500 | 0.3 | 3,083,460 | |||||||||
IDEXX Laboratories, Inc. * | 19,500 | 0.2 | 2,762,565 | |||||||||
Other Securities | 4.3 | 52,373,065 | ||||||||||
5.4 | 64,684,799 | |||||||||||
Household & Personal Products 0.3% | ||||||||||||
Other Securities | 0.3 | 3,777,441 | ||||||||||
Insurance 5.2% | ||||||||||||
Allied World Assurance Co. Holdings AG | 81,000 | 0.3 | 3,078,000 | |||||||||
Arthur J. Gallagher & Co. | 59,000 | 0.2 | 2,814,300 | |||||||||
Aspen Insurance Holdings Ltd. | 65,400 | 0.2 | 2,853,402 | |||||||||
CNO Financial Group, Inc. | 162,500 | 0.2 | 2,946,125 | |||||||||
Endurance Specialty Holdings Ltd. | 60,200 | 0.3 | 3,488,590 | |||||||||
First American Financial Corp. | 97,900 | 0.2 | 2,968,328 | |||||||||
Platinum Underwriters Holdings Ltd. | 49,500 | 0.3 | 3,100,185 | |||||||||
Primerica, Inc. | 60,900 | 0.3 | 3,115,035 | |||||||||
Protective Life Corp. | 51,500 | 0.3 | 3,588,520 | |||||||||
Other Securities | 2.9 | 34,659,259 | ||||||||||
5.2 | 62,611,744 |
See financial notes 25
Table of Contents
Schwab Fundamental US Small Company Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Materials 5.8% | ||||||||||||
Martin Marietta Materials, Inc. | 24,000 | 0.2 | 2,806,080 | |||||||||
Resolute Forest Products, Inc. * | 168,500 | 0.3 | 3,127,360 | |||||||||
Other Securities | 5.3 | 63,683,969 | ||||||||||
5.8 | 69,617,409 | |||||||||||
Media 2.3% | ||||||||||||
Cinemark Holdings, Inc. | 78,100 | 0.2 | 2,758,492 | |||||||||
Other Securities | 2.1 | 24,591,951 | ||||||||||
2.3 | 27,350,443 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.0% | ||||||||||||
Perrigo Co., plc | 17,300 | 0.3 | 2,793,085 | |||||||||
Other Securities | 1.7 | 20,774,657 | ||||||||||
2.0 | 23,567,742 | |||||||||||
Real Estate 9.3% | ||||||||||||
Corrections Corp. of America | 84,728 | 0.3 | 3,116,296 | |||||||||
Digital Realty Trust, Inc. | 45,600 | 0.3 | 3,145,944 | |||||||||
Duke Realty Corp. | 163,400 | 0.2 | 3,098,064 | |||||||||
Jones Lang LaSalle, Inc. | 22,800 | 0.2 | 3,082,788 | |||||||||
Piedmont Office Realty Trust, Inc., Class A | 144,500 | 0.2 | 2,810,525 | |||||||||
Other Securities | 8.1 | 97,595,626 | ||||||||||
9.3 | 112,849,243 | |||||||||||
Retailing 5.2% | ||||||||||||
Group 1 Automotive, Inc. | 34,200 | 0.2 | 2,921,706 | |||||||||
Other Securities | 5.0 | 60,285,476 | ||||||||||
5.2 | 63,207,182 | |||||||||||
Semiconductors & Semiconductor Equipment 3.8% | ||||||||||||
Other Securities | 3.8 | 46,003,898 | ||||||||||
Software & Services 5.9% | ||||||||||||
Akamai Technologies, Inc. * | 47,300 | 0.2 | 2,852,190 | |||||||||
Convergys Corp. | 143,600 | 0.2 | 2,896,412 | |||||||||
DST Systems, Inc. | 33,100 | 0.3 | 3,189,185 | |||||||||
VeriSign, Inc. * | 51,100 | 0.2 | 3,053,736 | |||||||||
Other Securities | 5.0 | 59,832,991 | ||||||||||
5.9 | 71,824,514 | |||||||||||
Technology Hardware & Equipment 4.8% | ||||||||||||
Sanmina Corp. * | 128,200 | 0.3 | 3,213,974 | |||||||||
Other Securities | 4.5 | 55,079,003 | ||||||||||
4.8 | 58,292,977 | |||||||||||
Telecommunication Services 1.0% | ||||||||||||
Other Securities | 1.0 | 12,647,760 | ||||||||||
Transportation 4.0% | ||||||||||||
Alaska Air Group, Inc. | 57,100 | 0.2 | 3,039,433 | |||||||||
Southwest Airlines Co. | 90,700 | 0.3 | 3,127,336 | |||||||||
Other Securities | 3.5 | 41,808,496 | ||||||||||
4.0 | 47,975,265 | |||||||||||
Utilities 4.1% | ||||||||||||
Hawaiian Electric Industries, Inc. (a) | 102,000 | 0.3 | 2,872,320 | |||||||||
Portland General Electric Co. | 78,800 | 0.2 | 2,869,108 | |||||||||
Questar Corp. | 134,400 | 0.3 | 3,240,384 | |||||||||
WGL Holdings, Inc. | 60,400 | 0.2 | 2,838,800 | |||||||||
Other Securities | 3.1 | 37,392,967 | ||||||||||
�� | ||||||||||||
4.1 | 49,213,579 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $936,334,702) | 1,201,580,309 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Technology Hardware & Equipment 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Telecommunication Services 0.0% | ||||||||||||
Other Securities | 0.0 | 266,364 | ||||||||||
Total Rights | ||||||||||||
(Cost $266,857) | 266,364 | |||||||||||
Other Investment Company 3.4% of net assets | ||||||||||||
Securities Lending Collateral 3.4% | ||||||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (f) | 40,701,297 | 3.4 | 40,701,297 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $40,701,297) | 40,701,297 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 1,039,983 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $1,039,983) | 1,039,983 | |||||||||||
End of Investments. |
At 10/31/14 tax basis cost of the fund’s investments was $984,525,962 and the unrealized appreciation and depreciation were $298,144,150 and ($39,082,159), respectively, with a net unrealized appreciation of $259,061,991.
26 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Condensed Portfolio Holdings continued
For the following notes, please refer to the complete schedule of portfolio holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $40,305,835. Non-Cash Collateral pledged to the fund for securities on loan amounted to $697,106. | |
(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 $266,364 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
CVR — | Contingent Value Rights | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/19/14 | 40 | 4,684,000 | 63,962 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $1,201,580,309 | $— | $— | $1,201,580,309 | ||||||||||||
Rights1 | — | — | 266,364 | 266,364 | ||||||||||||
Other Investment Company | 40,701,297 | — | — | 40,701,297 | ||||||||||||
Short-Term Investment1 | — | 1,039,983 | — | 1,039,983 | ||||||||||||
Total | $1,242,281,606 | $1,039,983 | $266,364 | $1,243,587,953 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $63,962 | $— | $— | $63,962 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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 | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Rights | $— | $— | $— | $266,364 | $— | $— | $— | $266,364 | ||||||||||||||||||||||||
Total | $— | $— | $— | $266,364 | $— | $— | $— | $266,364 | ||||||||||||||||||||||||
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, 2014.
See financial notes 27
Table of Contents
Schwab Fundamental US Small Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $937,641,542) including securities on loan of $40,305,835 | $1,202,886,656 | |||||
Collateral invested for securities on loan, at value (cost $40,701,297) | + | 40,701,297 | ||||
Total investments, at value (cost $978,342,839) | 1,243,587,953 | |||||
Foreign currency, at value (cost $34) | 29 | |||||
Receivables: | ||||||
Investments sold | 6,007,850 | |||||
Fund shares sold | 1,202,245 | |||||
Dividends | 504,356 | |||||
Income from securities on loan | 140,671 | |||||
Variation margin on futures contracts | 20,999 | |||||
Prepaid expenses | + | 14,926 | ||||
Total assets | 1,251,479,029 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 40,701,297 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 21,921 | |||||
Shareholder service fees | 12,314 | |||||
Due to custodian | 1,671,464 | |||||
Fund shares redeemed | 1,183,568 | |||||
Accrued expenses | + | 372,551 | ||||
Total liabilities | 43,963,115 | |||||
Net Assets | ||||||
Total assets | 1,251,479,029 | |||||
Total liabilities | − | 43,963,115 | ||||
Net assets | $1,207,515,914 | |||||
Net Assets by Source | ||||||
Capital received from investors | 877,465,853 | |||||
Net investment income not yet distributed | 9,628,136 | |||||
Net realized capital gains | 55,112,854 | |||||
Net unrealized capital appreciation | 265,309,071 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,207,515,914 | 89,411,590 | $13.51 |
28 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $15,986) | $15,300,766 | |||||
Interest | 699 | |||||
Securities on loan | + | 1,023,767 | ||||
Total investment income | 16,325,232 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,811,863 | |||||
Shareholder service fees | 959,604 | |||||
Index fee | 663,584 | |||||
Transfer agent fees | 95,999 | |||||
Portfolio accounting fees | 72,211 | |||||
Registration fees | 66,415 | |||||
Shareholder reports | 60,202 | |||||
Custodian fees | 59,019 | |||||
Professional fees | 43,430 | |||||
Independent trustees’ fees | 11,192 | |||||
Interest expense | 426 | |||||
Other expenses | + | 18,813 | ||||
Total expenses | 4,862,758 | |||||
Expense reduction by CSIM and its affiliates | − | 1,025,278 | ||||
Net expenses | − | 3,837,480 | ||||
Net investment income | 12,487,752 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 59,963,207 | |||||
Net realized losses on futures contracts | (1,569,653 | ) | ||||
Net realized gains on foreign currency transactions | + | 535 | ||||
Net realized gains | 58,394,089 | |||||
Net change in unrealized appreciation (depreciation) on investments | 38,050,286 | |||||
Net change in unrealized appreciation (depreciation) on futures contracts | (160,595 | ) | ||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (7 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 37,889,684 | ||||
Net realized and unrealized gains | 96,283,773 | |||||
Increase in net assets resulting from operations | $108,771,525 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $12,487,752 | $10,235,724 | ||||||||
Net realized gains | 58,394,089 | 35,664,271 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 37,889,684 | 183,388,180 | |||||||
Increase in net assets from operations | 108,771,525 | 229,288,175 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (8,210,484 | ) | (11,947,531 | ) | ||||||
Distributions from net realized gains | + | (37,238,379 | ) | (50,580,881 | ) | |||||
Total distributions | ($45,448,863 | ) | ($62,528,412 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 40,867,612 | $529,827,506 | 16,241,608 | $178,159,226 | ||||||||||||||
Shares reinvested | 1,787,741 | 22,900,966 | 2,784,659 | 26,509,953 | ||||||||||||||
Shares redeemed | + | (19,718,745 | ) | (257,947,641 | ) | (12,560,146 | ) | (140,960,955 | ) | |||||||||
Net transactions in fund shares | 22,936,608 | $294,780,831 | 6,466,121 | $63,708,224 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 66,474,982 | $849,412,421 | 60,008,861 | $618,944,434 | ||||||||||||||
Total increase | + | 22,936,608 | 358,103,493 | 6,466,121 | 230,467,987 | |||||||||||||
End of period | 89,411,590 | $1,207,515,914 | 66,474,982 | $849,412,421 | ||||||||||||||
Net investment income not yet distributed | $9,628,136 | $5,421,598 |
30 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.05 | 7.16 | 7.26 | 8.09 | 7.69 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.30 | 0.23 | 0.22 | 0.23 | 0.21 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.26 | ) | 1.87 | (0.08 | )1 | (0.85 | ) | 0.41 | ||||||||||||||
Total from investment operations | 0.04 | 2.10 | 0.14 | (0.62 | ) | 0.62 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.21 | ) | (0.24 | ) | (0.21 | ) | (0.22 | ) | ||||||||||||
Net asset value at end of period | 8.84 | 9.05 | 7.16 | 7.26 | 8.09 | |||||||||||||||||
Total return (%) | 0.39 | 30.12 | 2.24 | (7.88 | ) | 8.27 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.35 | 0.34 | 2 | 0.31 | 2 | 0.35 | 0.35 | |||||||||||||||
Gross operating expenses | 0.48 | 0.52 | 0.56 | 0.57 | 0.61 | |||||||||||||||||
Net investment income (loss) | 3.52 | 2.95 | 3.58 | 3.24 | 2.70 | |||||||||||||||||
Portfolio turnover rate | 8 | 22 | 61 | 3 | 35 | 65 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 908 | 646 | 501 | 372 | 301 |
1 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.
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 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
Condensed Portfolio Holdings as of October 31, 2014
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 | 809,911,937 | 896,853,900 | ||||||||
0 | .6% | Preferred Stock | 4,534,745 | 5,189,504 | ||||||||
0 | .0% | Rights | 240,551 | 237,808 | ||||||||
1 | .0% | Other Investment Companies | 9,110,883 | 9,112,622 | ||||||||
0 | .1% | Short-Term Investments | 872,092 | 872,092 | ||||||||
100 | .5% | Total Investments | 824,670,208 | 912,265,926 | ||||||||
(0 | .5%) | Other Assets and Liabilities, Net | (4,209,615 | ) | ||||||||
100 | .0% | Net Assets | 908,056,311 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.8% of net assets | ||||||||||||
Australia 5.6% | ||||||||||||
BHP Billiton Ltd. | 212,283 | 0.7 | 6,350,834 | |||||||||
Commonwealth Bank of Australia | 56,055 | 0.4 | 3,986,038 | |||||||||
National Australia Bank Ltd. | 116,229 | 0.4 | 3,595,632 | |||||||||
Wesfarmers Ltd. | 87,191 | 0.4 | 3,393,272 | |||||||||
Westpac Banking Corp. | 118,595 | 0.4 | 3,640,186 | |||||||||
Other Securities | 3.3 | 29,648,707 | ||||||||||
5.6 | 50,614,669 | |||||||||||
Austria 0.3% | ||||||||||||
Other Securities | 0.3 | 3,130,084 | ||||||||||
Belgium 0.9% | ||||||||||||
Other Securities | 0.9 | 8,284,478 | ||||||||||
Canada 6.8% | ||||||||||||
Royal Bank of Canada | 55,963 | 0.4 | 3,972,849 | |||||||||
Other Securities | 6.4 | 57,979,754 | ||||||||||
6.8 | 61,952,603 | |||||||||||
Denmark 0.8% | ||||||||||||
Other Securities | 0.8 | 7,614,765 | ||||||||||
Finland 1.2% | ||||||||||||
Nokia Oyj | 481,701 | 0.5 | 4,025,043 | |||||||||
Other Securities | 0.7 | 6,496,259 | ||||||||||
1.2 | 10,521,302 | |||||||||||
France 10.4% | ||||||||||||
BNP Paribas S.A. | 73,041 | 0.5 | 4,590,047 | |||||||||
GDF Suez | 216,025 | 0.6 | 5,245,070 | |||||||||
Orange S.A. | 542,254 | 1.0 | 8,632,885 | |||||||||
Sanofi | 70,959 | 0.7 | 6,438,822 | |||||||||
Total S.A. | 278,735 | 1.8 | 16,641,388 | |||||||||
Vivendi S.A. * | 168,852 | 0.5 | 4,124,933 | |||||||||
Other Securities | 5.3 | 48,307,012 | ||||||||||
10.4 | 93,980,157 | |||||||||||
Germany 8.1% | ||||||||||||
Allianz SE - Reg’d | 29,776 | 0.5 | 4,735,043 | |||||||||
BASF SE | 74,645 | 0.7 | 6,595,643 | |||||||||
Bayer AG - Reg’d | 34,877 | 0.5 | 4,988,170 | |||||||||
Daimler AG - Reg’d | 78,994 | 0.7 | 6,159,081 | |||||||||
Deutsche Telekom AG - Reg’d | 422,902 | 0.7 | 6,374,536 | |||||||||
E.ON SE | 397,063 | 0.8 | 6,845,403 | |||||||||
RWE AG | 98,306 | 0.4 | 3,488,071 | |||||||||
Siemens AG - Reg’d | 51,256 | 0.6 | 5,781,340 | |||||||||
Other Securities | 3.2 | 28,813,980 | ||||||||||
8.1 | 73,781,267 | |||||||||||
Hong Kong 1.1% | ||||||||||||
Other Securities | 1.1 | 10,208,134 | ||||||||||
Ireland 0.6% | ||||||||||||
Other Securities | 0.6 | 5,385,005 | ||||||||||
Israel 0.4% | ||||||||||||
Other Securities | 0.4 | 3,483,341 | ||||||||||
Italy 3.7% | ||||||||||||
Enel S.p.A. | 1,062,660 | 0.6 | 5,430,106 | |||||||||
Eni S.p.A. | 418,168 | 1.0 | 8,909,025 | |||||||||
Intesa Sanpaolo S.p.A. | 1,225,005 | 0.4 | 3,601,219 | |||||||||
UniCredit S.p.A. | 562,489 | 0.4 | 4,073,951 | |||||||||
Other Securities | 1.3 | 11,972,634 | ||||||||||
3.7 | 33,986,935 | |||||||||||
Japan 21.4% | ||||||||||||
Canon, Inc. | 124,900 | 0.4 | 3,831,952 | |||||||||
Hitachi Ltd. | 503,000 | 0.4 | 3,952,308 | |||||||||
Honda Motor Co., Ltd. | 135,400 | 0.5 | 4,328,634 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 649,834 | 0.4 | 3,788,021 | |||||||||
Nippon Telegraph & Telephone Corp. | 73,004 | 0.5 | 4,542,223 | |||||||||
Toyota Motor Corp. | 142,900 | 1.0 | 8,599,319 | |||||||||
Other Securities | 18.2 | 164,969,890 | ||||||||||
21.4 | 194,012,347 |
32 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Luxembourg 0.6% | ||||||||||||
Other Securities | 0.6 | 5,120,954 | ||||||||||
Netherlands 5.7% | ||||||||||||
Royal Dutch Shell plc, A Shares | 521,794 | 2.0 | 18,659,565 | |||||||||
Royal Dutch Shell plc, B Shares | 333,480 | 1.4 | 12,320,561 | |||||||||
Other Securities | 2.3 | 20,732,982 | ||||||||||
5.7 | 51,713,108 | |||||||||||
New Zealand 0.1% | ||||||||||||
Other Securities | 0.1 | 1,189,994 | ||||||||||
Norway 0.9% | ||||||||||||
Statoil A.S.A. | 156,569 | 0.4 | 3,583,149 | |||||||||
Other Securities | 0.5 | 4,405,455 | ||||||||||
0.9 | 7,988,604 | |||||||||||
Portugal 0.2% | ||||||||||||
Other Securities | 0.2 | 1,940,888 | ||||||||||
Singapore 0.8% | ||||||||||||
Other Securities | 0.8 | 7,535,882 | ||||||||||
Spain 4.4% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 422,907 | 0.5 | 4,730,166 | |||||||||
Banco Santander S.A. | 1,232,639 | 1.2 | 10,891,012 | |||||||||
Telefonica S.A. | 665,756 | 1.1 | 10,018,082 | |||||||||
Other Securities | 1.6 | 13,847,339 | ||||||||||
4.4 | 39,486,599 | |||||||||||
Sweden 2.3% | ||||||||||||
Other Securities | 2.3 | 20,970,577 | ||||||||||
Switzerland 5.6% | ||||||||||||
Nestle S.A. - Reg’d | 138,024 | 1.1 | 10,121,865 | |||||||||
Novartis AG - Reg’d | 91,109 | 0.9 | 8,455,175 | |||||||||
Roche Holding AG | 20,671 | 0.7 | 6,100,040 | |||||||||
Other Securities | 2.9 | 26,220,551 | ||||||||||
5.6 | 50,897,631 | |||||||||||
United Kingdom 16.9% | ||||||||||||
Anglo American plc | 176,933 | 0.4 | 3,735,684 | |||||||||
AstraZeneca plc | 107,613 | 0.9 | 7,860,952 | |||||||||
Barclays plc | 1,241,295 | 0.5 | 4,773,919 | |||||||||
BP plc | 2,811,246 | 2.2 | 20,226,637 | |||||||||
British American Tobacco plc | 88,516 | 0.6 | 5,016,874 | |||||||||
GlaxoSmithKline plc | 332,763 | 0.8 | 7,525,090 | |||||||||
HSBC Holdings plc | 1,229,358 | 1.4 | 12,533,752 | |||||||||
Rio Tinto plc | 84,733 | 0.5 | 4,031,719 | |||||||||
Vodafone Group plc | 2,701,957 | 1.0 | 8,985,234 | |||||||||
Other Securities | 8.6 | 78,364,715 | ||||||||||
16.9 | 153,054,576 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $809,911,937) | 896,853,900 | |||||||||||
Preferred Stock 0.6% of net assets | ||||||||||||
Germany 0.4% | ||||||||||||
Other Securities | 0.4 | 3,630,656 | ||||||||||
Italy 0.2% | ||||||||||||
Other Securities | 0.2 | 1,547,099 | ||||||||||
United Kingdom 0.0% | ||||||||||||
Other Securities | 0.0 | 11,749 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $4,534,745) | 5,189,504 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Spain 0.0% | ||||||||||||
Banks 0.0% | ||||||||||||
Other Securities | 0.0 | 237,808 | ||||||||||
Total Rights | ||||||||||||
(Cost $240,551) | 237,808 | |||||||||||
Other Investment Companies 1.0% of net assets | ||||||||||||
United States 1.0% | ||||||||||||
Equity Fund 0.0% | ||||||||||||
Other Securities | 0.0 | 6,395 | ||||||||||
Securities Lending Collateral 1.0% | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 9,106,227 | 1.0 | 9,106,227 | |||||||||
Total Other Investment Companies | ||||||||||||
(Cost $9,110,883) | 9,112,622 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 0.1% of net assets | ||||||||||||
Time Deposit 0.0% | ||||||||||||
Other Securities | 0.0 | 201,101 | ||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 670,991 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $872,092) | 872,092 | |||||||||||
End of Investments. |
See financial notes 33
Table of Contents
Schwab Fundamental International Large Company Index Fund
Condensed Portfolio Holdings continued
At 10/31/14, the tax basis cost of the fund’s investments was $842,623,307 unrealized appreciation and depreciation were $107,992,010 and ($38,349,391), respectively, with a net unrealized appreciation of $69,642,619.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $828,027,743 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(a) for additional information)
For the following notes, please refer to the complete schedule of portfolio 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 $11,749 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $8,622,312. | |
(d) | The rate shown is the purchase yield. | |
(e) | All or a portion of this security is held as collateral for futures contracts. | |
(f) | The rate shown is the 7-day yield. |
CVA — | Dutch Certificate | |
ETF — | Exchange Traded Fund | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/19/14 | 30 | 2,754,000 | 91,820 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $— | $475,957,509 | $— | $475,957,509 | ||||||||||||
Australia | 523,598 | 50,091,071 | — | 50,614,669 | ||||||||||||
Austria | 304,175 | 2,825,909 | — | 3,130,084 | ||||||||||||
Canada | 61,952,603 | — | — | 61,952,603 | ||||||||||||
Finland | 425,787 | 10,095,515 | — | 10,521,302 | ||||||||||||
Ireland | 1,730,550 | 3,654,455 | — | 5,385,005 | ||||||||||||
Luxembourg | 528,291 | 4,592,663 | — | 5,120,954 | ||||||||||||
Netherlands | 111,003 | 51,602,105 | — | 51,713,108 | ||||||||||||
Singapore | 884,722 | 6,651,160 | — | 7,535,882 | ||||||||||||
Sweden | 504,922 | 20,465,655 | — | 20,970,577 | ||||||||||||
Switzerland | 1,854,543 | 49,043,088 | — | 50,897,631 | ||||||||||||
United Kingdom | 5,183,718 | 147,870,858 | — | 153,054,576 | ||||||||||||
Preferred Stock1 | — | 5,177,755 | — | 5,177,755 | ||||||||||||
United Kingdom | — | — | 11,749 | 11,749 | ||||||||||||
Rights1 | 237,808 | — | — | 237,808 | ||||||||||||
Other Investment Companies1 | 9,112,622 | — | — | 9,112,622 | ||||||||||||
Short-Term Investments1 | — | 872,092 | — | 872,092 | ||||||||||||
Total | $83,354,342 | $828,899,835 | $11,749 | $912,265,926 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $91,820 | $— | $— | $91,820 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings and are valued at unrealized appreciation or depreciation. |
34 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Condensed 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 | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
United Kingdom | $5,981 | $66 | $10 | $11,789 | ($6,097 | ) | $— | $— | $11,749 | |||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||
Spain | 185,237 | — | (8,353 | ) | — | (176,884 | ) | — | — | — | ||||||||||||||||||||||
Total | $191,218 | $66 | ($8,343 | ) | $11,789 | ($182,981 | ) | $— | $— | $11,749 | ||||||||||||||||||||||
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, 2014 was ($40).
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 $2,782,474 and $2,131,258 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended October 31, 2014. 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 during the period.
See financial notes 35
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $815,563,981) including securities on loan of $8,622,312 | $903,159,699 | |||||
Collateral invested for securities on loan, at value (cost $9,106,227) | + | 9,106,227 | ||||
Total investments, at value (cost $824,670,208) | 912,265,926 | |||||
Foreign currency, at value (cost $153) | 153 | |||||
Receivables: | ||||||
Investments sold | 3,509,592 | |||||
Dividends | 2,000,013 | |||||
Fund shares sold | 1,253,128 | |||||
Foreign tax reclaims | 440,637 | |||||
Variation margin on futures contracts | 51,750 | |||||
Income from securities on loan | 24,987 | |||||
Prepaid expenses | + | 10,892 | ||||
Total assets | 919,557,078 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 9,106,227 | |||||
Payables: | ||||||
Investments bought | 248,031 | |||||
Investment adviser and administrator fees | 10,501 | |||||
Shareholder service fees | 3,912 | |||||
Fund shares redeemed | 1,172,060 | |||||
Due to custodian | 627,978 | |||||
Accrued expenses | + | 332,058 | ||||
Total liabilities | 11,500,767 | |||||
Net Assets | ||||||
Total assets | 919,557,078 | |||||
Total liabilities | − | 11,500,767 | ||||
Net assets | $908,056,311 | |||||
Net Assets by Source | ||||||
Capital received from investors | 911,681,144 | |||||
Net investment income not yet distributed | 25,916,254 | |||||
Net realized capital losses | (117,151,844 | ) | ||||
Net unrealized capital appreciation | 87,610,757 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$908,056,311 | 102,694,214 | $8.84 |
36 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $2,824,215) | $31,561,811 | |||||
Interest | 6,916 | |||||
Securities on loan | + | 690,475 | ||||
Total investment income | 32,259,202 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,233,384 | |||||
Shareholder service fees | 672,237 | |||||
Index fee | 490,140 | |||||
Custodian fees | 241,076 | |||||
Transfer agent fees | 101,323 | |||||
Portfolio accounting fees | 94,383 | |||||
Registration fees | 82,329 | |||||
Professional fees | 48,637 | |||||
Shareholder reports | 37,332 | |||||
Independent trustees’ fees | 9,996 | |||||
Interest expense | 88 | |||||
Other expenses | + | 26,290 | ||||
Total expenses | 4,037,215 | |||||
Expense reduction by CSIM and its affiliates | − | 1,120,379 | ||||
Net expenses | − | 2,916,836 | ||||
Net investment income | 29,342,366 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 19,901,573 | |||||
Net realized losses on futures contracts | (48,917 | ) | ||||
Net realized losses on foreign currency transactions | + | (92,456 | ) | |||
Net realized gains | 19,760,200 | |||||
Net change in unrealized appreciation (depreciation) on investments | (59,305,801 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | (187,529 | ) | ||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (92,748 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (59,586,078 | ) | |||
Net realized and unrealized losses | (39,825,878 | ) | ||||
Decrease in net assets resulting from operations | ($10,483,512 | ) |
See financial notes 37
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $29,342,366 | $17,039,641 | ||||||||
Net realized gains (losses) | 19,760,200 | (9,812,563 | ) | |||||||
Net change in unrealized appreciation (depreciation) | + | (59,586,078 | ) | 144,914,210 | ||||||
Increase (Decrease) in net assets from operations | (10,483,512 | ) | 152,141,288 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($17,955,621 | ) | ($15,274,655 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 49,079,319 | $452,063,298 | 24,782,287 | $195,910,846 | ||||||||||||||
Shares reinvested | 1,447,761 | 12,841,641 | 1,575,182 | 11,404,319 | ||||||||||||||
Shares redeemed | + | (19,204,938 | ) | (174,204,252 | ) | (24,923,187 | ) | (198,967,968 | ) | |||||||||
Net transactions in fund shares | 31,322,142 | $290,700,687 | 1,434,282 | $8,347,197 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 71,372,072 | $645,794,757 | 69,937,790 | $500,580,927 | ||||||||||||||
Total increase | + | 31,322,142 | 262,261,554 | 1,434,282 | 145,213,830 | |||||||||||||
End of period | 102,694,214 | $908,056,311 | 71,372,072 | $645,794,757 | ||||||||||||||
Net investment income not yet distributed | $25,916,254 | $14,415,187 |
38 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.47 | 9.13 | 9.53 | 9.96 | 9.00 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss)1 | 0.22 | 0.22 | 0.21 | 0.24 | 0.16 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.23 | ) | 2.42 | 0.03 | (0.40 | ) | 1.09 | |||||||||||||||
Total from investment operations | (0.01 | ) | 2.64 | 0.24 | (0.16 | ) | 1.25 | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.31 | ) | (0.30 | ) | (0.25 | ) | (0.27 | ) | (0.29 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.39 | ) | — | — | ||||||||||||||||
Total distributions | (0.31 | ) | (0.30 | ) | (0.64 | ) | (0.27 | ) | (0.29 | ) | ||||||||||||
Net asset value at end of period | 11.15 | 11.47 | 9.13 | 9.53 | 9.96 | |||||||||||||||||
Total return (%) | (0.07 | ) | 29.75 | 3.13 | (1.76 | ) | 14.32 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.49 | 0.47 | 2,3 | 0.46 | 4,5 | 0.54 | 0.55 | |||||||||||||||
Gross operating expenses | 0.80 | 0.93 | 0.92 | 5 | 0.99 | 1.07 | ||||||||||||||||
Net investment income (loss) | 1.87 | 2.21 | 2.42 | 2.29 | 1.77 | |||||||||||||||||
Portfolio turnover rate | 41 | 29 | 89 | 6 | 63 | 63 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 275 | 150 | 90 | 93 | 74 |
1 Calculated based on the average shares outstanding during the period.
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.
3 The ratio of net operating expenses would have been 0.52%, if voluntary waiver by CSIM had not been included.
4 The ratio of net operating expenses would have been 0.51%, if voluntary waiver by CSIM had not been included.
5 The net operating and gross operating expense ratios would have been 0.50% and 0.97%, respectively, if vendor payments had not been included.
6 Portfolio turnover would have been 48%, if rebalancing trades had not been included due to a change in the fund’s index.
See financial notes 39
Table of Contents
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings as of October 31, 2014
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 | .1% | Common Stock | 254,199,293 | 270,207,475 | ||||||||
0 | .5% | Preferred Stock | 1,230,970 | 1,295,299 | ||||||||
3 | .0% | Other Investment Companies | 8,233,674 | 8,313,893 | ||||||||
0 | .2% | Short-Term Investments | 520,504 | 520,504 | ||||||||
101 | .8% | Total Investments | 264,184,441 | 280,337,171 | ||||||||
(1 | .8)% | Other Assets and Liabilities, Net | (4,939,486 | ) | ||||||||
100 | .0% | Net Assets | 275,397,685 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.1% of net assets | ||||||||||||
Australia 5.9% | ||||||||||||
APA Group | 67,760 | 0.2 | 471,090 | |||||||||
CSR Ltd. | 163,269 | 0.2 | 499,706 | |||||||||
Dexus Property Group | 494,864 | 0.2 | 528,914 | |||||||||
DUET Group | 212,149 | 0.1 | 459,207 | |||||||||
Sigma Pharmaceuticals Ltd. | 702,797 | 0.2 | 478,828 | |||||||||
Sydney Airport | 130,196 | 0.2 | 506,167 | |||||||||
Transfield Services Ltd. * | 320,558 | 0.2 | 541,186 | |||||||||
Other Securities | 4.6 | 12,732,865 | ||||||||||
5.9 | 16,217,963 | |||||||||||
Austria 0.7% | ||||||||||||
Other Securities | 0.7 | 1,822,135 | ||||||||||
Belgium 1.4% | ||||||||||||
Mobistar S.A. * | 24,830 | 0.2 | 532,079 | |||||||||
Other Securities | 1.2 | 3,210,102 | ||||||||||
1.4 | 3,742,181 | |||||||||||
Canada 8.1% | ||||||||||||
Other Securities | 8.1 | 22,218,487 | ||||||||||
Denmark 1.4% | ||||||||||||
Other Securities | 1.4 | 3,767,406 | ||||||||||
Finland 1.3% | ||||||||||||
Other Securities | 1.3 | 3,555,543 | ||||||||||
France 4.3% | ||||||||||||
Other Securities | 4.3 | 11,904,583 | ||||||||||
Germany 3.3% | ||||||||||||
Celesio AG | 24,277 | 0.3 | 800,942 | |||||||||
Symrise AG | 9,220 | 0.2 | 519,817 | |||||||||
Other Securities | 2.8 | 7,903,243 | ||||||||||
3.3 | 9,224,002 | |||||||||||
Greece 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Hong Kong 2.8% | ||||||||||||
Hongkong Land Holdings Ltd. | 72,000 | 0.2 | 502,122 | |||||||||
Orient Overseas International Ltd. | 88,500 | 0.2 | 504,208 | |||||||||
Other Securities | 2.4 | 6,771,753 | ||||||||||
2.8 | 7,778,083 | |||||||||||
Ireland 0.9% | ||||||||||||
DCC plc | 11,747 | 0.2 | 658,311 | |||||||||
Other Securities | 0.7 | 1,919,888 | ||||||||||
0.9 | 2,578,199 | |||||||||||
Israel 1.2% | ||||||||||||
Check Point Software Technologies Ltd. * | 7,043 | 0.2 | 522,943 | |||||||||
Other Securities | 1.0 | 2,777,453 | ||||||||||
1.2 | 3,300,396 | |||||||||||
Italy 2.1% | ||||||||||||
Banca Popolare Di Milano Scarl * | 635,469 | 0.2 | 478,968 | |||||||||
Other Securities | 1.9 | 5,401,610 | ||||||||||
2.1 | 5,880,578 | |||||||||||
Japan 38.5% | ||||||||||||
Alps Electric Co., Ltd. | 35,300 | 0.2 | 600,847 | |||||||||
Canon Marketing Japan, Inc. | 24,000 | 0.2 | 490,661 | |||||||||
Casio Computer Co., Ltd. | 34,200 | 0.2 | 545,337 | |||||||||
COMSYS Holdings Corp. | 28,100 | 0.2 | 501,658 | |||||||||
Fujikura Ltd. | 111,000 | 0.2 | 466,267 | |||||||||
Fukuoka Financial Group, Inc. | 101,000 | 0.2 | 516,822 | |||||||||
Hitachi Construction Machinery Co., Ltd. | 25,300 | 0.2 | 517,496 | |||||||||
Hitachi High-Technologies Corp. | 19,700 | 0.2 | 601,825 | |||||||||
IT Holdings Corp. | 28,100 | 0.1 | 459,136 | |||||||||
Keio Corp. | 71,000 | 0.2 | 539,297 | |||||||||
Kikkoman Corp. | 24,000 | 0.2 | 552,029 | |||||||||
Koito Manufacturing Co., Ltd. | 20,400 | 0.2 | 614,698 | |||||||||
Minebea Co., Ltd. | 39,000 | 0.2 | 534,395 | |||||||||
NGK Insulators Ltd. | 24,000 | 0.2 | 516,912 | |||||||||
NGK Spark Plug Co., Ltd. | 18,600 | 0.2 | 485,097 |
40 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
NOK Corp. | 23,500 | 0.2 | 595,360 | |||||||||
Nomura Research Institute Ltd. | 14,800 | 0.2 | 488,160 | |||||||||
NTN Corp. | 114,000 | 0.2 | 492,910 | |||||||||
Santen Pharmaceutical Co., Ltd. | 7,700 | 0.2 | 459,586 | |||||||||
Yamaha Corp. | 35,900 | 0.2 | 492,079 | |||||||||
Other Securities | 34.6 | 95,468,662 | ||||||||||
38.5 | 105,939,234 | |||||||||||
Luxembourg 0.4% | ||||||||||||
Other Securities | 0.4 | 1,103,726 | ||||||||||
Netherlands 1.9% | ||||||||||||
Other Securities | 1.9 | 5,258,076 | ||||||||||
New Zealand 0.7% | ||||||||||||
Other Securities | 0.7 | 2,018,089 | ||||||||||
Norway 1.0% | ||||||||||||
Other Securities | 1.0 | 2,695,412 | ||||||||||
Portugal 0.3% | ||||||||||||
Other Securities | 0.3 | 896,909 | ||||||||||
Republic of Korea 0.0% | ||||||||||||
Other Securities | 0.0 | 2,970 | ||||||||||
Singapore 1.9% | ||||||||||||
CapitaLand Ltd. | 194,000 | 0.2 | 478,970 | |||||||||
Other Securities | 1.7 | 4,780,478 | ||||||||||
1.9 | 5,259,448 | |||||||||||
Spain 2.0% | ||||||||||||
Bankia S.A. * | 344,465 | 0.2 | 617,745 | |||||||||
Other Securities | 1.8 | 4,783,903 | ||||||||||
2.0 | 5,401,648 | |||||||||||
Sweden 2.1% | ||||||||||||
Other Securities | 2.1 | 5,794,474 | ||||||||||
Switzerland 3.0% | ||||||||||||
Actelion Ltd. - Reg’d * | 4,314 | 0.2 | 513,776 | |||||||||
Other Securities | 2.8 | 7,730,580 | ||||||||||
3.0 | 8,244,356 | |||||||||||
United Kingdom 12.9% | ||||||||||||
Ashtead Group plc | 28,050 | 0.2 | 469,956 | |||||||||
Catlin Group Ltd. | 54,796 | 0.2 | 470,740 | |||||||||
Dixons Carphone plc | 150,045 | 0.3 | 952,752 | |||||||||
Evraz plc | 299,042 | 0.2 | 619,913 | |||||||||
Hammerson plc | 50,607 | 0.2 | 497,163 | |||||||||
Investec plc | 54,984 | 0.2 | 504,174 | |||||||||
London Stock Exchange Group plc | 14,992 | 0.2 | 484,143 | |||||||||
Persimmon plc * | 26,969 | 0.2 | 633,372 | |||||||||
Provident Financial plc | 13,702 | 0.2 | 465,955 | |||||||||
The British Land Co. plc | 48,987 | 0.2 | 572,007 | |||||||||
Other Securities | 10.8 | 29,933,402 | ||||||||||
12.9 | 35,603,577 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $254,199,293) | 270,207,475 | |||||||||||
Preferred Stock 0.5% of net assets | ||||||||||||
Germany 0.3% | ||||||||||||
Other Securities | 0.3 | 863,519 | ||||||||||
Italy 0.1% | ||||||||||||
Other Securities | 0.1 | 232,345 | ||||||||||
Spain 0.1% | ||||||||||||
Other Securities | 0.1 | 105,313 | ||||||||||
Sweden 0.0% | ||||||||||||
Other Securities | 0.0 | 94,122 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $1,230,970) | 1,295,299 | |||||||||||
Other Investment Companies 3.0% of net assets | ||||||||||||
United States 3.0% | ||||||||||||
Equity Fund 0.7% | ||||||||||||
iShares MSCI EAFE Small Cap ETF | 40,000 | 0.7 | 1,941,600 | |||||||||
Securities Lending Collateral 2.3% | ||||||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 6,372,293 | 2.3 | 6,372,293 | |||||||||
Total Other Investment Companies | ||||||||||||
(Cost $8,233,674) | 8,313,893 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 0.2% of net assets | ||||||||||||
Time Deposit 0.2% | ||||||||||||
Other Securities | 0.2 | 513,504 | ||||||||||
U.S. Treasury Obligation 0.0% | ||||||||||||
Other Securities | 0.0 | 7,000 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $520,504) | 520,504 | |||||||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $267,827,595 and the unrealized appreciation and depreciation
See financial notes 41
Table of Contents
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings continued
were $27,972,860 and ($15,463,284), respectively, with a net unrealized appreciation of $12,509,576.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $232,329,396 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(a) for additional information)
For the following notes, please refer to the complete schedule of portfolio holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $6,049,729. | |
(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 $2,970 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt | |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
ETF — | Exchange Traded Fund | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
SDR — | Swedish Depositary Receipt |
In addition to the above the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/19/14 | 1 | 91,800 | 4,234 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $— | $118,930,642 | $— | $118,930,642 | ||||||||||||
Australia | 729,672 | 15,488,291 | — | 16,217,963 | ||||||||||||
Austria | 738,630 | 1,083,505 | — | 1,822,135 | ||||||||||||
Belgium | 2,152,904 | 1,589,277 | — | 3,742,181 | ||||||||||||
Canada | 22,173,007 | 45,480 | — | 22,218,487 | ||||||||||||
Finland | 590,984 | 2,964,559 | — | 3,555,543 | ||||||||||||
France | 1,684,773 | 10,219,810 | — | 11,904,583 | ||||||||||||
Greece | — | — | — | — | ||||||||||||
Hong Kong | 675,387 | 7,102,696 | — | 7,778,083 | ||||||||||||
Ireland | 999,812 | 1,578,387 | — | 2,578,199 | ||||||||||||
Israel | 522,943 | 2,777,453 | — | 3,300,396 | ||||||||||||
Italy | 808,019 | 5,072,559 | — | 5,880,578 | ||||||||||||
Luxembourg | 462,751 | 640,975 | — | 1,103,726 | ||||||||||||
Netherlands | 1,213,796 | 4,044,280 | — | 5,258,076 | ||||||||||||
New Zealand | 657,757 | 1,360,332 | — | 2,018,089 | ||||||||||||
Norway | 374,322 | 2,321,090 | — | 2,695,412 | ||||||||||||
Portugal | 84,230 | 812,679 | — | 896,909 | ||||||||||||
Republic of Korea | — | — | 2,970 | 2,970 | ||||||||||||
Singapore | 246,530 | 5,012,918 | — | 5,259,448 | ||||||||||||
Spain | 133,264 | 5,268,384 | — | 5,401,648 | ||||||||||||
Sweden | 466,321 | 5,328,153 | — | 5,794,474 | ||||||||||||
Switzerland | 498,560 | 7,745,796 | — | 8,244,356 | ||||||||||||
United Kingdom | 3,956,746 | 31,646,831 | — | 35,603,577 | ||||||||||||
Preferred Stock1 | — | 1,295,299 | — | 1,295,299 |
42 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings continued
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies | ||||||||||||||||
United States1 | $8,313,893 | $— | $— | $8,313,893 | ||||||||||||
Short-Term Investments1 | — | 520,504 | — | 520,504 | ||||||||||||
Total | $47,484,301 | $232,849,900 | $2,970 | $280,337,171 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $4,234 | $— | $— | $4,234 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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 | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Australia | $— | ($11,291 | ) | $11,291 | $— | $— | $— | $— | $— | |||||||||||||||||||||||
Luxembourg | — | — | (362,547 | ) | 149,585 | — | 212,962 | — | — | |||||||||||||||||||||||
Portugal | — | — | (315,262 | ) | 315,262 | — | — | — | — | |||||||||||||||||||||||
Republic of Korea | — | — | 2,970 | — | — | — | — | 2,970 | ||||||||||||||||||||||||
Sweden | — | — | 12,129 | — | (12,129 | ) | — | — | — | |||||||||||||||||||||||
Total | $— | ($11,291 | ) | ($651,419 | ) | $464,847 | ($12,129 | ) | $212,962 | $— | $2,970 | |||||||||||||||||||||
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, 2014 was ($674,840).
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 and Level 2 for the period ended October 31, 2014. The transfers in the amount of $4,740,156 and $4,944,549 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 into Level 3 from Level 1 or Level 2 were due to the result of fair valued securities for which no quoted value was available.
See financial notes 43
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $257,812,148) including securities on loan of $6,049,729 | $273,964,878 | |||||
Collateral invested for securities on loan, at value (cost $6,372,293) | + | 6,372,293 | ||||
Total investments, at value (cost $264,184,441) | 280,337,171 | |||||
Receivables: | ||||||
Investments sold | 179,303 | |||||
Fund shares sold | 893,501 | |||||
Dividends | 686,969 | |||||
Foreign tax reclaims | 39,848 | |||||
Income from securities on loan | 14,987 | |||||
Variation margin on futures contracts | 1,725 | |||||
Due from investment adviser | 1,219 | |||||
Prepaid expenses | + | 2,217 | ||||
Total assets | 282,156,940 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 6,372,293 | |||||
Payables: | ||||||
Fund shares redeemed | 178,909 | |||||
Due to custodian | 52 | |||||
Accrued expenses | + | 208,001 | ||||
Total liabilities | 6,759,255 | |||||
Net Assets | ||||||
Total assets | 282,156,940 | |||||
Total liabilities | − | 6,759,255 | ||||
Net assets | $275,397,685 | |||||
Net Assets by Source | ||||||
Capital received from investors | 257,738,160 | |||||
Net investment income not yet distributed | 1,960,947 | |||||
Net realized capital losses | (436,176 | ) | ||||
Net unrealized capital appreciation | 16,134,754 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$275,397,685 | 24,688,478 | $11.15 |
44 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $563,121) | $4,716,675 | |||||
Interest | 838 | |||||
Securities on loan | + | 172,056 | ||||
Total investment income | 4,889,569 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 829,112 | |||||
Shareholder service fees | 159,256 | |||||
Custodian fees | 225,145 | |||||
Index fee | 170,045 | |||||
Portfolio accounting fees | 72,870 | |||||
Professional fees | 48,391 | |||||
Transfer agent fees | 46,211 | |||||
Registration fees | 44,490 | |||||
Shareholder reports | 35,743 | |||||
Independent trustees’ fees | 7,019 | |||||
Interest expense | 302 | |||||
Other expenses | + | 22,069 | ||||
Total expenses | 1,660,653 | |||||
Expense reduction by CSIM and its affiliates | − | 644,689 | ||||
Net expenses | − | 1,015,964 | ||||
Net investment income | 3,873,605 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 4,204,752 | |||||
Net realized gains on futures contracts | 219,333 | |||||
Net realized losses on foreign currency transactions | + | (60,490 | ) | |||
Net realized gains | 4,363,595 | |||||
Net change in unrealized appreciation (depreciation) on investments | (12,434,582 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | (208 | ) | ||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (24,938 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (12,459,728 | ) | |||
Net realized and unrealized losses | (8,096,133 | ) | ||||
Decrease in net assets resulting from operations | ($4,222,528 | ) |
See financial notes 45
Table of Contents
Schwab Fundamental International Small Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $3,873,605 | $2,524,591 | ||||||||
Net realized gains | 4,363,595 | 1,480,423 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (12,459,728 | ) | 25,933,638 | ||||||
Increase (Decrease) in net assets from operations | (4,222,528 | ) | 29,938,652 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($4,201,706 | ) | ($3,109,770 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 15,320,962 | $176,589,635 | 5,053,700 | $51,573,590 | ||||||||||||||
Shares reinvested | 238,640 | 2,675,147 | 227,023 | 2,068,185 | ||||||||||||||
Shares redeemed | + | (3,909,585 | ) | (45,018,061 | ) | (2,140,208 | ) | (21,234,821 | ) | |||||||||
Net transactions in fund shares | 11,650,017 | $134,246,721 | 3,140,515 | $32,406,954 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 13,038,461 | $149,575,198 | 9,897,946 | $90,339,362 | ||||||||||||||
Total increase | + | 11,650,017 | 125,822,487 | 3,140,515 | 59,235,836 | |||||||||||||
End of period | 24,688,478 | $275,397,685 | 13,038,461 | $149,575,198 | ||||||||||||||
Net investment income not yet distributed | $1,960,947 | $1,971,951 |
46 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.24 | 8.86 | 9.17 | 10.81 | 8.91 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.20 | 0.19 | 0.25 | 0.24 | 0.17 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.66 | ) | 0.43 | (0.17 | ) | (1.37 | ) | 1.81 | ||||||||||||||
Total from investment operations | (0.46 | ) | 0.62 | 0.08 | (1.13 | ) | 1.98 | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.18 | ) | (0.24 | ) | (0.22 | ) | (0.15 | ) | (0.08 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.17 | ) | (0.36 | ) | — | |||||||||||||||
Total distributions | (0.18 | ) | (0.24 | ) | (0.39 | ) | (0.51 | ) | (0.08 | ) | ||||||||||||
Net asset value at end of period | 8.60 | 9.24 | 8.86 | 9.17 | 10.81 | |||||||||||||||||
Total return (%) | (5.03 | ) | 7.11 | 1.18 | (10.99 | ) | 22.36 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.49 | 0.51 | 1,2 | 0.56 | 3 | 0.61 | 4 | 0.61 | 4 | |||||||||||||
Gross operating expenses | 0.85 | 0.88 | 0.91 | 0.91 | 0.98 | |||||||||||||||||
Net investment income (loss) | 2.35 | 2.22 | 2.75 | 2.51 | 2.31 | |||||||||||||||||
Portfolio turnover rate | 19 | 22 | 86 | 5 | 56 | 91 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 346 | 353 | 314 | 310 | 294 |
1 Effective June 11, 2013, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/13 is a blended ratio.
2 The ratio of net operating expenses would have been 0.56%, if voluntary waiver by CSIM had not been included.
3 The ratio of net operating expenses would have been 0.60%, if voluntary waiver by CSIM had not been included.
4 The ratio of net operating expenses would have been 0.60%, if interest expenses had not been incurred.
5 Portfolio turnover would have been 51%, if rebalancing trades had not been included due to a change in the fund’s index.
See financial notes 47
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Condensed Portfolio Holdings as of October 31, 2014
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 | ($) | ($) | ||||||||||
89 | .6% | Common Stock | 308,489,784 | 309,766,041 | ||||||||
9 | .5% | Preferred Stock | 44,495,548 | 32,716,863 | ||||||||
0 | .1% | Other Investment Companies | 473,712 | 474,165 | ||||||||
0 | .5% | Short-Term Investments | 1,733,677 | 1,733,677 | ||||||||
99 | .7% | Total Investments | 355,192,721 | 344,690,746 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 932,964 | |||||||||
100 | .0% | Net Assets | 345,623,710 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 89.6% of net assets | ||||||||||||
Brazil 6.0% | ||||||||||||
Banco do Brasil S.A. | 195,908 | 0.7 | 2,192,392 | |||||||||
Petroleo Brasileiro S.A. | 769,058 | 1.3 | 4,546,874 | |||||||||
Vale S.A. | 318,979 | 0.9 | 3,218,239 | |||||||||
Other Securities | 3.1 | 10,682,688 | ||||||||||
6.0 | 20,640,193 | |||||||||||
Chile 1.0% | ||||||||||||
Other Securities | 1.0 | 3,356,970 | ||||||||||
China 16.3% | ||||||||||||
Bank of China Ltd., Class H | 9,758,234 | 1.3 | 4,670,788 | |||||||||
China Construction Bank Corp., Class H | 9,379,000 | 2.0 | 6,997,662 | |||||||||
China Mobile Ltd. | 661,600 | 2.4 | 8,231,965 | |||||||||
China Petroleum & Chemical Corp., Class H | 6,183,400 | 1.5 | 5,362,315 | |||||||||
China Telecom Corp., Ltd., Class H | 2,600,000 | 0.5 | 1,657,383 | |||||||||
CNOOC Ltd. | 1,893,000 | 0.9 | 2,964,228 | |||||||||
Industrial & Commercial Bank of China Ltd., Class H | 8,192,172 | 1.6 | 5,439,274 | |||||||||
PetroChina Co., Ltd., Class H | 3,578,000 | 1.3 | 4,479,454 | |||||||||
Other Securities | 4.8 | 16,643,522 | ||||||||||
16.3 | 56,446,591 | |||||||||||
Colombia 0.3% | ||||||||||||
Other Securities | 0.3 | 1,014,299 | ||||||||||
Czech Republic 0.4% | ||||||||||||
Other Securities | 0.4 | 1,419,403 | ||||||||||
Greece 0.5% | ||||||||||||
Other Securities | 0.5 | 1,672,474 | ||||||||||
Hungary 0.6% | ||||||||||||
Other Securities | 0.6 | 1,986,762 | ||||||||||
India 4.2% | ||||||||||||
Infosys Ltd. | 26,150 | 0.5 | 1,733,499 | |||||||||
Oil & Natural Gas Corp., Ltd. | 253,112 | 0.5 | 1,656,510 | |||||||||
Reliance Industries Ltd. | 203,869 | 1.0 | 3,308,833 | |||||||||
Other Securities | 2.2 | 7,703,638 | ||||||||||
4.2 | 14,402,480 | |||||||||||
Indonesia 1.0% | ||||||||||||
Other Securities | 1.0 | 3,602,707 | ||||||||||
Malaysia 2.1% | ||||||||||||
Other Securities | 2.1 | 7,306,091 | ||||||||||
Mexico 3.6% | ||||||||||||
America Movil S.A.B. de C.V., Series L | 3,440,800 | 1.2 | 4,198,076 | |||||||||
Cemex S.A.B. de C.V., Series CPO * | 1,515,865 | 0.5 | 1,867,498 | |||||||||
Other Securities | 1.9 | 6,459,201 | ||||||||||
3.6 | 12,524,775 | |||||||||||
Peru 0.1% | ||||||||||||
Other Securities | 0.1 | 402,500 | ||||||||||
Philippines 0.2% | ||||||||||||
Other Securities | 0.2 | 692,240 | ||||||||||
Poland 2.1% | ||||||||||||
KGHM Polska Miedz S.A. | 42,757 | 0.4 | 1,649,067 | |||||||||
Polski Koncern Naftowy Orlen S.A. | 133,942 | 0.5 | 1,668,676 | |||||||||
Other Securities | 1.2 | 4,079,158 | ||||||||||
2.1 | 7,396,901 | |||||||||||
Republic of Korea 16.9% | ||||||||||||
Hyundai Motor Co. | 17,692 | 0.8 | 2,807,394 | |||||||||
Korea Electric Power Corp. | 43,275 | 0.6 | 1,899,590 | |||||||||
LG Corp. | 42,161 | 0.7 | 2,508,582 | |||||||||
LG Display Co., Ltd. * | 59,385 | 0.5 | 1,748,236 | |||||||||
LG Electronics, Inc. | 39,027 | 0.7 | 2,383,444 | |||||||||
POSCO | 15,300 | 1.3 | 4,419,207 | |||||||||
Samsung Electronics Co., Ltd. | 10,721 | 3.6 | 12,502,213 | |||||||||
Shinhan Financial Group Co., Ltd. | 45,012 | 0.6 | 2,118,524 | |||||||||
SK C&C Co., Ltd. | 7,761 | 0.5 | 1,761,209 | |||||||||
SK Holdings Co., Ltd. | 12,809 | 0.6 | 2,007,796 | |||||||||
SK Innovation Co., Ltd. | 22,748 | 0.6 | 1,860,789 |
48 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Condensed Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 6.4 | 22,233,937 | ||||||||||
16.9 | 58,250,921 | |||||||||||
Russia 11.4% | ||||||||||||
Gazprom OAO | 864,000 | 0.8 | 2,842,485 | |||||||||
Gazprom OAO ADR | 1,495,000 | 2.9 | 9,905,589 | |||||||||
LUKOIL OAO * | 36,299 | 0.5 | 1,789,199 | |||||||||
LUKOIL OAO ADR | 185,000 | 2.6 | 9,068,576 | |||||||||
MMC Norilsk Nickel OJSC ADR | 117,700 | 0.6 | 2,196,184 | |||||||||
Sberbank of Russia ADR | 214,003 | 0.5 | 1,629,620 | |||||||||
Surgutneftegas ADR | 577,500 | 1.1 | 3,809,780 | |||||||||
Tatneft ADR | 47,100 | 0.5 | 1,683,489 | |||||||||
Other Securities | 1.9 | 6,563,412 | ||||||||||
11.4 | 39,488,334 | |||||||||||
South Africa 7.0% | ||||||||||||
MTN Group Ltd. | 190,981 | 1.2 | 4,228,901 | |||||||||
Sasol Ltd. | 81,822 | 1.2 | 4,085,798 | |||||||||
Standard Bank Group Ltd. | 135,867 | 0.5 | 1,710,942 | |||||||||
Other Securities | 4.1 | 14,222,072 | ||||||||||
7.0 | 24,247,713 | |||||||||||
Taiwan 12.8% | ||||||||||||
Asustek Computer, Inc. | 175,041 | 0.5 | 1,787,200 | |||||||||
AU Optronics Corp. | 3,924,800 | 0.6 | 1,870,447 | |||||||||
Hon Hai Precision Industry Co., Ltd. | 1,766,416 | 1.6 | 5,590,701 | |||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1,483,689 | 1.9 | 6,431,600 | |||||||||
Other Securities | 8.2 | 28,471,494 | ||||||||||
12.8 | 44,151,442 | |||||||||||
Thailand 1.4% | ||||||||||||
PTT PCL | 194,187 | 0.6 | 2,194,069 | |||||||||
Other Securities | 0.8 | 2,588,149 | ||||||||||
1.4 | 4,782,218 | |||||||||||
Turkey 1.7% | ||||||||||||
Other Securities | 1.7 | 5,981,027 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $308,489,784) | 309,766,041 | |||||||||||
Preferred Stock 9.5% of net assets | ||||||||||||
Brazil 7.6% | ||||||||||||
Banco Bradesco S.A. | 204,767 | 0.9 | 3,084,024 | |||||||||
Itau Unibanco Holding S.A. | 332,478 | 1.4 | 4,931,017 | |||||||||
Petroleo Brasileiro S.A. | 1,136,860 | 2.0 | 7,010,461 | |||||||||
Vale S.A. | 440,957 | 1.1 | 3,834,950 | |||||||||
Other Securities | 2.2 | 7,538,765 | ||||||||||
7.6 | 26,399,217 | |||||||||||
Colombia 0.1% | ||||||||||||
Other Securities | 0.1 | 400,719 | ||||||||||
Republic of Korea 0.8% | ||||||||||||
Other Securities | 0.8 | 2,617,549 | ||||||||||
Russia 1.0% | ||||||||||||
AK Transneft OAO * | 1,196 | 0.8 | 2,613,611 | |||||||||
Other Securities | 0.2 | 685,767 | ||||||||||
1.0 | 3,299,378 | |||||||||||
Total Preferred Stock | ||||||||||||
(Cost $44,495,548) | 32,716,863 | |||||||||||
Other Investment Companies 0.1% of net assets | ||||||||||||
United States 0.1% | ||||||||||||
Equity Fund 0.0% | ||||||||||||
Other Securities | 0.0 | 4,215 | ||||||||||
Securities Lending Collateral 0.1% | ||||||||||||
Other Securities | 0.1 | 469,950 | ||||||||||
Total Other Investment Companies | ||||||||||||
(Cost $473,712) | 474,165 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 0.5% of net assets | ||||||||||||
Time Deposit 0.4% | ||||||||||||
Other Securities | 0.4 | 1,496,681 | ||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 236,996 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $1,733,677) | 1,733,677 | |||||||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $363,303,514 and the unrealized appreciation and depreciation were $44,899,163 and ($63,511,931), respectively, with a net unrealized depreciation of ($18,612,768).
See financial notes 49
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Schwab Fundamental Emerging Markets Large Company Index Fund
Condensed Portfolio Holdings continued
At 10/31/14, the values of certain foreign securities held by the fund aggregating $266,609,446 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(a) for additional information)
For the following notes, please refer to the complete schedule of porfolio 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 $519,813 or 0.2% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $442,919. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt | |
ETF — | Exchange Traded Fund | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered |
In additional to the above the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI Emerging Markets, mini, Long, expires 12/19/14 | 40 | 2,027,200 | 56,924 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $— | $77,778,702 | $— | $77,778,702 | ||||||||||||
Brazil | 14,738,235 | 5,901,958 | — | 20,640,193 | ||||||||||||
Chile | 2,608,296 | 748,674 | — | 3,356,970 | ||||||||||||
Colombia | 1,014,299 | — | — | 1,014,299 | ||||||||||||
Czech Republic | 389,928 | 1,029,475 | — | 1,419,403 | ||||||||||||
India | 564,893 | 13,837,587 | — | 14,402,480 | ||||||||||||
Malaysia | 1,621,106 | 5,684,985 | — | 7,306,091 | ||||||||||||
Mexico | 12,524,775 | — | — | 12,524,775 | ||||||||||||
Peru | 402,500 | — | — | 402,500 | ||||||||||||
Republic of Korea | — | 57,731,108 | 519,813 | 58,250,921 | ||||||||||||
Russia | 9,247,150 | 30,241,184 | — | 39,488,334 | ||||||||||||
South Africa | 495,443 | 23,752,270 | — | 24,247,713 | ||||||||||||
Taiwan | 475,710 | 43,675,732 | — | 44,151,442 | ||||||||||||
Thailand | 4,782,218 | — | — | 4,782,218 | ||||||||||||
Preferred Stock1 | — | 2,617,549 | — | 2,617,549 | ||||||||||||
Brazil | 22,788,995 | 3,610,222 | — | 26,399,217 | ||||||||||||
Colombia | 400,719 | — | — | 400,719 | ||||||||||||
Russia | 3,299,378 | — | — | 3,299,378 | ||||||||||||
Other Investment Companies1 | 474,165 | — | — | 474,165 | ||||||||||||
Short-Term Investments1 | — | 1,733,677 | — | 1,733,677 | ||||||||||||
Total | $75,827,810 | $268,343,123 | $519,813 | $344,690,746 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $56,924 | $— | $— | $56,924 |
1 | As categorized in the complete schedule of portfolio holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings and are valued at unrealized appreciation or depreciation. |
50 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Condensed 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 | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Republic of Korea | $— | $5,566 | ($158,076 | ) | $33,844 | ($137,990 | ) | $776,469 | $— | $519,813 | ||||||||||||||||||||||
South Africa | — | — | (204,646 | ) | 204,646 | — | — | — | — | |||||||||||||||||||||||
Total | $— | $5,566 | ($362,722 | ) | $238,490 | ($137,990 | ) | $776,469 | $— | $519,813 | ||||||||||||||||||||||
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, 2014 was ($362,722).
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, 2014. The transfers in the amount of $7,912,385 and $37,863,542 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 into Level 3 from Level 1 or Level 2 were due to the result of fair valued securities for which no quoted value was available.
See financial notes 51
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Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $354,722,771) including securities on loan of $442,919 | $344,220,796 | |||||
Collateral invested for securities on loan, at value (cost $469,950) | + | 469,950 | ||||
Total investments, at value (cost $355,192,721) | 344,690,746 | |||||
Foreign currency, at value (cost $713,071) | 712,543 | |||||
Receivables: | ||||||
Fund shares sold | 829,986 | |||||
Dividends | 176,643 | |||||
Foreign tax reclaims | 7,836 | |||||
Variation margin on futures contracts | 7,800 | |||||
Income from securities on loan | 826 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 5,458 | ||||
Total assets | 346,431,839 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 469,950 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 2,537 | |||||
Shareholder service fees | 1,309 | |||||
Fund shares redeemed | 66,119 | |||||
Foreign capital gains tax | 57,979 | |||||
Accrued expenses and other liabilities | + | 210,235 | ||||
Total liabilities | 808,129 | |||||
Net Assets | ||||||
Total assets | 346,431,839 | |||||
Total liabilities | − | 808,129 | ||||
Net assets | $345,623,710 | |||||
Net Assets by Source | ||||||
Capital received from investors | 371,914,754 | |||||
Net investment income not yet distributed | 7,079,065 | |||||
Net realized capital losses | (22,857,935 | ) | ||||
Net unrealized capital depreciation | (10,512,174 | ) | ||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$345,623,710 | 40,207,901 | $8.60 |
52 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,488,924) | $10,212,867 | |||||
Interest | 2,194 | |||||
Securities on loan | + | 5,052 | ||||
Total investment income | 10,220,113 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,798,450 | |||||
Shareholder service fees | 263,489 | |||||
Custodian fees | 401,151 | |||||
Index fee | 326,190 | |||||
Portfolio accounting fees | 74,100 | |||||
Transfer agent fees | 61,326 | |||||
Professional fees | 55,556 | |||||
Registration fees | 41,299 | |||||
Shareholder reports | 37,024 | |||||
Independent trustees’ fees | 7,814 | |||||
Interest expense | 1,204 | |||||
Other expenses | + | 7,058 | ||||
Total expenses | 3,074,661 | |||||
Expense reduction by CSIM and its affiliates | − | 1,310,976 | ||||
Net expenses | − | 1,763,685 | ||||
Net investment income | 8,456,428 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on investments (net of foreign capital gain tax paid of $3,482) | (6,970,760 | ) | ||||
Net realized losses on futures contracts | (993,223 | ) | ||||
Net realized losses on foreign currency transactions | + | (79,910 | ) | |||
Net realized losses | (8,043,893 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments (net of foreign capital gain tax of ($10,101)) | (20,529,336 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | (84,652 | ) | ||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (7,173 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (20,621,161 | ) | |||
Net realized and unrealized losses | (28,665,054 | ) | ||||
Decrease in net assets resulting from operations | ($20,208,626 | ) |
See financial notes 53
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $8,456,428 | $7,185,968 | ||||||||
Net realized gains (losses) | (8,043,893 | ) | 69,488 | |||||||
Net change in unrealized appreciation (depreciation) | + | (20,621,161 | ) | 14,710,964 | ||||||
Increase (Decrease) in net assets from operations | (20,208,626 | ) | 21,966,420 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($7,207,709 | ) | ($8,681,589 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 17,844,818 | $157,305,857 | 14,934,368 | $131,472,133 | ||||||||||||||
Shares reinvested | 517,807 | 4,510,103 | 618,303 | 5,583,275 | ||||||||||||||
Shares redeemed | + | (16,378,090 | ) | (141,770,574 | ) | (12,809,415 | ) | (111,551,317 | ) | |||||||||
Net transactions in fund shares | 1,984,535 | $20,045,386 | 2,743,256 | $25,504,091 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 38,223,366 | $352,994,659 | 35,480,110 | $314,205,737 | ||||||||||||||
Total increase or decrease | + | 1,984,535 | (7,370,949 | ) | 2,743,256 | 38,788,922 | ||||||||||||
End of period | 40,207,901 | $345,623,710 | 38,223,366 | $352,994,659 | ||||||||||||||
Net investment income not yet distributed | $7,079,065 | $5,875,828 |
54 See financial notes
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 Fundamental Global Real Estate Index 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 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 | ||||
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 funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(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 |
55
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Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. 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 Contracts (“futures”): Futures are valued at their settlement prices as of the close of their exchanges. | |
• | Short-term securities (60 days or less to maturity): Short-term securities may be 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, without consideration to the classification level of the specific investments held by the underlying fund. | |
• | 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 |
56
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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, 2014 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 a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value may change daily.
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds to terminate any loans at any given time. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. A fund retains the right to recall a security on loan. The aggregate market value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan (at market value computed at the time of the loan). Total costs and expenses, including agent fees, associated with securities lending activities under the trust’s Securities Lending Program paid to the unaffiliated lending agent are approximately 15% of the gross lending revenues.
The values of the securities on loan and the related collateral as of October 31, 2014, if any, are disclosed in the funds’ Portfolio Holdings. Investments of cash collateral are also disclosed in each fund’s Statement of Assets and Liabilities.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
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,
57
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
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 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, 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 a fund’s operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges 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, 2014, if any, are reflected in each fund’s Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
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.
Market Risk. 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.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Tracking Error Risk. As an index fund, each 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.
Investment Style Risk. 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.
A significant percentage of an index may be composed of securities in a single industry or sector of the economy. If a fund is focused in an industry or sector, it may present more risks than if it were broadly diversified over numerous industries and sectors of the economy.
Sampling Index Tracking Risk. 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 will be 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.
Concentration Risk. To the extent that a fund’s or an index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country, or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country, or asset class.
Large-Cap Risk. 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 performance also will lag those investments.
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Financial Notes (continued)
3. Risk Factors (continued):
Small-Cap Risk. 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 performance also will lag those investments.
Foreign Investment Risk. 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); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund’s investments, and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategy. These risks may be heightened in connection with investments in emerging markets. Foreign securities also include American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”) and European Depositary Receipts (“EDRs”), which are depositary receipts issued by U.S. and foreign banks that represent shares of foreign-based corporations. Investments in ADRs, GDRs and EDRs may be less liquid than the underlying shares in their primary trading market; and GDRs, many of which are issued by companies in emerging markets, may be more volatile. To the extent a fund’s investments in a single country or a limited number of countries represent a larger percentage of the fund’s assets, the fund’s performance may be adversely affected by the economic, political and social conditions in those countries and it may be subject to increased price volatility.
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 a fund’s investments in emerging market countries and, at times, it may be difficult to value such investments.
ETFs Risk. 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 proportionate share 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.
Derivatives Risk. 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 a fund to realize higher amounts of short-term capital gain. These risks could cause a fund to lose more than the principal amount invested.
Liquidity Risk. 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.
Security Lending Risk. Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions:
Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”), a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement (“Advisory Agreement”) between CSIM and the trust.
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 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% |
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.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
The funds may engage in certain transactions involving affiliates. For instance, a fund may own shares of The Charles Schwab Corporation if that company is included in its index. Below is the summary of investment activities involving The Charles Schwab Corporation shares owned by the Schwab Fundamental US Large Company Index Fund during the report period:
Balance | Balance | Realized | Dividends | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Fund | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Fundamental US Large Company Index Fund | 138,015 | 23,300 | (54,800 | ) | 106,515 | $3,053,785 | $576,680 | $29,512 |
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 on a fund’s Statement of Operations. For information regarding the trustees, please refer to the 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 an interest expense, which is disclosed on a fund’s 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 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, 2014 are presented on the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in 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 | $54,689,038 | 584 | ||||||
Schwab Fundamental US Small Company Index Fund | 18,048,771 | 157 | ||||||
Schwab Fundamental International Large Company Index Fund | 13,281,507 | 140 | ||||||
Schwab Fundamental International Small Company Index Fund | 290,144 | 3 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 4,575,223 | 90 |
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Financial Notes (continued)
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended October 31, 2014, 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 | $1,514,559,023 | $498,392,478 | ||||||
Schwab Fundamental US Small Company Index Fund | 587,621,468 | 312,183,399 | ||||||
Schwab Fundamental International Large Company Index Fund | 375,955,826 | 68,433,572 | ||||||
Schwab Fundamental International Small Company Index Fund | 219,389,305 | 85,946,719 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 88,528,243 | 66,215,735 |
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 on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/13-10/31/14) | (11/1/12-10/31/13) | |||||||
Schwab Fundamental US Large Company Index Fund | $78,706 | $30,032 | ||||||
Schwab Fundamental US Small Company Index Fund | 9,756 | 7,961 | ||||||
Schwab Fundamental International Large Company Index Fund | 16,541 | 6,437 | ||||||
Schwab Fundamental International Small Company Index Fund | 5,415 | 3,107 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 10,683 | 4,863 |
10. Federal Income Taxes:
As of October 31, 2014, 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 | $120,774,239 | $24,413,634 | $27,539,099 | $3,961,978 | $7,701,447 | |||||||||||||||
Undistributed long-term capital gains | 52,146,205 | 46,574,441 | — | 1,210,175 | — | |||||||||||||||
Unrealized appreciation on investments | 1,151,767,191 | 298,144,150 | 107,992,010 | 27,972,860 | 44,899,163 | |||||||||||||||
Unrealized depreciation on investments | (33,650,207 | ) | (39,082,159 | ) | (38,349,391 | ) | (15,463,284 | ) | (63,511,931 | ) | ||||||||||
Other unrealized appreciation (depreciation) | — | (5 | ) | (163,403 | ) | (22,204 | ) | (67,123 | ) | |||||||||||
Net unrealized appreciation (depreciation) | $1,118,116,984 | $259,061,986 | $69,479,216 | $12,487,372 | ($18,679,891 | ) | ||||||||||||||
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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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, 2014, 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 | — | — | 58,777,944 | — | — | |||||||||||||||
October 31, 2018 | — | — | 20,948,477 | — | — | |||||||||||||||
No expiration* | — | — | 14,155,355 | — | 15,312,596 | |||||||||||||||
Total | $— | $— | $100,643,151 | $— | $15,312,596 | |||||||||||||||
* | As a result of the passage of the Regulated Investment Company Modernization Act of 2010 (“RIC”), 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, 2014, the funds had capital loss carryforwards 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 loss carryforwards utilized | $12,619,654 | $— | $17,734,955 | $3,782,977 | $— |
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 | $47,960,089 | $24,624,349 | $17,955,621 | $4,201,706 | $7,207,709 | |||||||||||||||
Long-term capital gains | — | 20,824,514 | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior 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 | — | — | — | — | — |
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.
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Financial Notes (continued)
10. Federal Income Taxes (continued):
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, 2014, 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 | $— | $— | $— | $— | ($70 | ) | ||||||||||||||
Undistributed net investment income | (71,622 | ) | (70,730 | ) | 114,322 | 317,097 | (45,482 | ) | ||||||||||||
Net realized capital gains (losses) | 71,622 | 70,730 | (114,322 | ) | (317,097 | ) | 45,552 |
As of October 31, 2014, 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, 2014, the funds did not incur any interest or penalties.
11. Other:
As a result of recent political and military actions undertaken by the Russian Federation, the U.S. and the European Union have instituted various economic sanctions against Russian individuals and entities. The U.S. and/or the European Union may impose additional economic sanctions, or take other actions, against individuals and/or companies in specific sectors of the Russian economy, including, but not limited to, the financial services, energy, metals and mining, engineering, and defense and defense- related materials sectors. These sanctions, and the threat of additional sanctions, could have adverse consequences for the Russian economy, including continued weakening of the Russian currency, downgrades in Russia’s credit rating, and a significant decline in the value and liquidity of securities issued by Russian companies or the Russian government. Any of these events could negatively impact a fund’s investment in Russian securities. These sanctions have the possibility of impairing a fund’s ability to invest in accordance with its investment strategy and/or to meet its investment objective.
In addition, as index based products, the funds will generally maintain exposure to Russian securities to the extent the indexes which they track include such securities. For this reason, the sanction instituted against Russia, and any continued disruption of the Russian economy, could negatively impact a fund’s performance to the extent its index and its portfolio contain securities of Russian issuers, and, depending on the fund’s exposure to Russian issuers, the impact could be significant.
12. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date of 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 condensed 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 funds constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2014, 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, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 16, 2014
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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, 2014, 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 | 2,134,992 | 30,521,756 | ||||||
Schwab Fundamental International Small Company Index Fund | 554,324 | 5,176,873 | ||||||
Schwab Fundamental Emerging Markets Large Company Index Fund | 1,483,097 | 11,677,067 |
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2014, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Fundamental US Large Company Index Fund | 90.25 | ||||
Schwab Fundamental US Small Company Index Fund | 33.15 | ||||
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, 2014, 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 2015 via IRS form 1099 of the amounts for use in preparing their 2014 income tax return.
Schwab Fundamental US Large Company Index Fund | $43,431,321 | |||
Schwab Fundamental US Small Company Index Fund | 8,605,889 | |||
Schwab Fundamental International Large Company Index Fund | 18,076,709 | |||
Schwab Fundamental International Small Company Index Fund | 2,735,179 | |||
Schwab Fundamental Emerging Markets Large Company Index Fund | 6,644,257 |
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, 2014:
Schwab Fundamental US Large Company Index Fund | $— | |||
Schwab Fundamental US Small Company Index Fund | 20,824,514 | |||
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 30, 2014, and June 3, 2014, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 3, 2014. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that many of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and
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shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Although Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund, 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 97 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) | |||
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) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 76 | Director, KLA-Tencor Corporation (2008 – present) | |||
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, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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) | |||
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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. | 97 | 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 Investment Management, 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; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). | |
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). | |
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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 | |
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. 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.
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 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.
Fundamental Developed ex-U.S. Large Company Spliced Index 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.
Fundamental Developed ex-U.S. Small Company Spliced Index 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.
Fundamental Emerging Markets Large Company Spliced Index 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.
Fundamental U.S. Large Company Spliced Index 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.
Fundamental U.S. Small Company Spliced Index 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.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. 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.
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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 Securities Act of1933 (the “1933 Act”), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. 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. 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.
Russell Fundamental Developed ex-U.S. Large Company Index An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell Fundamental Developed ex-U.S. Small Company Index An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell Fundamental Emerging Markets Large Company Index An index that ranks companies in the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Emerging Markets Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Emerging Markets Index measures the performance of the investable securities in emerging countries globally.
Russell Fundamental U.S. Large Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size, and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell Fundamental U.S. Small Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
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 go to www.schwab.com/privacy.
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
© 2014 Schwab Funds. All rights reserved.
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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 the 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 Fundamental Global Real Estate Index Fund
Schwab Global Real Estate Fundtm
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
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Schwab 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
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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/0000950123-15-000008/f30296ctschwab02.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.
© 2014 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR39592-07
00128300
00128300
Table of Contents
Table of Contents
![(CHARLES SCHWAB LOGO)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctschwab02.gif)
Table of Contents
![(LAUDUS FUNDS LOGO)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctlaudusbw.gif)
Annual report dated October 31, 2014, enclosed.
COMMAND PERFORMANCETM
Laudus MarketMasters Fundstm
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Table of Contents
This wrapper is not part of the shareholder report.
Table of Contents
Annual Report October 31, 2014 | ![]() |
COMMAND PERFORMANCETM
Laudus MarketMasters Fundstm
Laudus Small-Cap MarketMasters Fundtm
Laudus International MarketMasters Fundtm
Table of Contents
This page is intentionally left blank.
Two distinct Funds, each combining the expertise of leading
investment managers with CSIM’s overall supervision.
In This Report
2 | ||
3 | ||
5 | ||
Performance and Fund Facts | ||
6 | ||
8 | ||
11 | ||
12 | ||
34 | ||
60 | ||
71 | ||
72 | ||
Approval of Renewal of Investment Advisory and Sub-Advisory Agreements | 73 | |
76 | ||
79 |
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.laudus.com/prospectus.
Total Return for the 12 Months Ended October 31, 2014 | ||||
Laudus Small-Cap MarketMasters Fundtm | ||||
Investor Shares (Ticker Symbol: SWOSX) | 4.28% | |||
Select Shares® (Ticker Symbol: SWMSX) | 4.39% | |||
Russell 2000® Index | 8.06% | |||
Fund Category: Morningstar Small Growth | 5.86% | |||
Performance Details | pages 6-7 | |||
Laudus International MarketMasters Fundtm | ||||
Investor Shares1 (Ticker Symbol: SWOIX) | -1.73% | |||
Select Shares®1 (Ticker Symbol: SWMIX) | -1.53% | ** | ||
MSCI EAFE® Index (Net)* | -0.60% | |||
Fund Category: Morningstar Foreign Large Growth | 0.91% | |||
Performance Details | pages 8-10 | |||
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.
* | Effective February 28, 2014, 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. | |
** | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the NAV at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semi-annual reports. | |
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/0000950123-15-000008/f30296ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
For 25 years, Charles Schwab Investment Management has been committed to building funds that are designed to serve as part of the foundation of an investor’s portfolio. Our Laudus MarketMasters Funds combine complementary strategies from leading investment managers into single funds, with each providing diversification across multiple investment styles.
For the 12-month reporting period ended October 31, 2014, the Laudus Small-Cap MarketMasters Fund generated a positive return, while underperforming its comparative index due to manager underperformance in small-cap growth strategies. The Laudus International MarketMasters Fund produced a negative return, underperforming its comparative index in part because of manager underperformance in small-cap international stock strategies.
In the U.S., some signs of economic improvement led the Federal Reserve to wind down its quantitative easing policies aimed at holding down long-term interest rates. This contrasted with efforts by the Bank of Japan and many other overseas central banks, which maintained low interest rates to stimulate lackluster economic growth in their countries. This difference in policies caused the yen and other foreign currencies to depreciate versus the U.S. dollar, reducing international stocks returns in U.S. dollar terms. Political unrest between Russia and the Ukraine and heightened market volatility also reduced the performance of international investments.
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2014
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 17.27% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 8.06% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −0.60% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 4.14% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.03% | Barclays U.S. Treasury Bills 1-3 Months Index: measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctcaptst09.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
For the 12-month reporting period ended October 31, 2014, the Laudus Small-Cap MarketMasters Fund generated a positive return, while underperforming its comparative index due to manager underperformance in small-cap growth strategies. The Laudus International MarketMasters Fund produced a negative return, underperforming its comparative index in part because of manager underperformance in small-cap international stock strategies.
Amid this backdrop, large-cap stocks outperformed small-cap stocks, while U.S. stocks outperformed stocks in many developed international markets. In addition, value stocks narrowly outperformed growth stocks in the U.S., as market volatility rose toward the end of the reporting period. Reflecting this environment, the Russell 2000 Index returned 8.1%, while the MSCI EAFE Index, which broadly represents the performance of international stocks, returned -0.6%.1
For more information about the Laudus MarketMasters Funds, please continue reading this report. In addition, you can find out more details about these funds by visiting www.laudus.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctschandom.gif)
1 The total return cited is for the MSCI EAFE Index (Net), which is calculated net of foreign withholding taxes.
4 Laudus MarketMasters Funds
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Fund Management
![]() | Omar Aguilar, Ph.D. Senior Vice President and Chief Investment Officer of Equities, has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2011, Mr. Aguilar was with Financial Engines, where he was responsible for managing assets from leading retirement plan sponsors in the defined contribution market. Prior to joining Financial Engines in 2009, Mr. Aguilar was the head of quantitative equity for ING Investment Management, where he was responsible for building and developing the firm’s quantitative equity group. He joined ING in 2004 from Lehman Brothers, where he served as the head of quantitative research for its alternative investment management business. Prior to that, he was a director of quantitative research and portfolio manager with Merrill Lynch Investment Management and Bankers Trust. |
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 adviser—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.
Performance. For the 12-month reporting period ended October 31, 2014, Investor Shares of the Laudus Small-Cap MarketMasters Fund (the fund) returned 4.28%. The fund’s comparative index, the Russell 2000 Index (the index), returned 8.06%.
Market Highlights. Small-cap U.S. stocks generated positive returns but underperformed large-cap stocks for the reporting period, while U.S. stocks in general were helped by rebounding economic growth, favorable earnings reports by select companies, and continued low short-term interest rates. This helped several large-cap U.S. stock market indices reach record highs, even as market volatility increased. In addition, with the U.S. economy improving, the Federal Reserve wrapped up its quantitative easing policies aimed at holding down long-term interest rates, while providing assurances that low short-term interest rates remain necessary.
Positioning and Strategies. Over the 12-month reporting period, the fund’s value tilt slightly detracted from performance, although this was partially offset by the fund’s allocation to one of its better performing sub-advisers. However, overall manager selection detracted due to the underperformance of two of the fund’s sub-advisers relative to their respective comparative indexes.
The fund’s TAMRO Capital Partners allocation sharply 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. As of September 30, 2014, TAMRO was eliminated as an investment manager for the Laudus Small-Cap MarketMasters Fund, and the fund’s allocations to other investment managers were increased.
A strong performance of the fund’s allocation to Wellington Management Company, LLP 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 overweight in the Health Care sector and, to a lesser extent Information Technology, although underweights in the Financials and Utilities sectors detracted from performance. Wellington Management’s stock selection also contributed positively, most notably within the Information Technology and Health Care sectors, but reduced performance in Financials and Materials.
BMO Asset Management, which uses a bottom-up fundamental approach to search for stocks exhibiting strong and improving growth characteristics, underperformed its comparative index, detracting from the fund’s relative performance. BMO’s strongest detractors came from its stock selection among Energy and Consumer Staples stocks, although its stock selection among Health Care and Materials contributed positively.
As of 10/31/14:
Statistics
Number of Holdings | 1,808 | |||
Weighted Average Market Cap ($ x 1,000,000) | $2,076 | |||
Price/Earnings Ratio (P/E) | 38.0 | |||
Price/Book Ratio (P/B) | 2.1 | |||
Portfolio Turnover Rate | 79% |
Sector Weightings % of Investments
Health Care | 17.3% | |||
Industrials | 16.5% | |||
Information Technology | 15.6% | |||
Financials | 15.5% | |||
Consumer Discretionary | 11.6% | |||
Energy | 5.6% | |||
Materials | 3.8% | |||
Telecommunication Services | 1.8% | |||
Consumer Staples | 1.7% | |||
Utilities | 1.6% | |||
Other | 9.0% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
iShares Russell Mid-Cap ETF | 2.9% | |||
Bellatrix Exploration Ltd. | 1.5% | |||
Belden, Inc. | 1.5% | |||
Acacia Research Corp. | 1.4% | |||
inContact, Inc. | 1.4% | |||
Helen of Troy Ltd. | 1.2% | |||
Mueller Industries, Inc. | 1.2% | |||
Newcastle Investment Corp. | 1.2% | |||
PICO Holdings, Inc. | 1.1% | |||
TRI Pointe Homes, Inc. | 1.1% | |||
Total | 14.5% |
Management 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 many 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 10/31/14
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, 2004 – October 31, 2014
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/0000950123-15-000008/f30296ctlsmf1.gif)
October 31, 2004 – October 31, 2014
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/0000950123-15-000008/f30296ctlsmf2.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (9/16/97) | 4.28 | % | 13.90 | % | 6.87% | |||||||
Select Shares® (6/9/04) | 4.39 | % | 14.07 | % | 7.04% | |||||||
Russell 2000® Index | 8.06 | % | 17.39 | % | 8.67% | |||||||
Fund Category: Morningstar Small Growth | 5.86 | % | 17.42 | % | 8.93% | |||||||
Fund Expense Ratios3: Investor Shares: Net 1.36%; Gross 1.60% / Select Shares: Net 1.21%; Gross 1.54%
Investment Managers and Allocations4
% of | |||||||
Investment Managers | Investment Style | Net Assets | |||||
Wellington Management Company, LLP | Small-Cap Value | 43.8 | % | ||||
BMO Asset Management Corp. | Small-Cap Growth | 42.4 | % | ||||
Mellon Capital Management Corp. | Small-Cap Value | 9.4 | % | ||||
Cash and other assets | — | 4.4 | % | ||||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
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 acquired fund fees and expenses incurred indirectly by the fund through its investments in other investment companies. The annualized weighted average expense ratio of these investment companies was 0.01% for the Investor Shares and Select Shares. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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 7
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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 adviser—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.
Performance. For the 12-month period ended October 31, 2014, Investor Shares of the Laudus International MarketMasters Fund (the fund) returned -1.73%, underperforming its comparative index, the MSCI EAFE Index (Net) (the index), which returned -0.60%.
Market Highlights. A strong performance by the U.S. dollar was a key reason for the lackluster returns of international stocks. Slow economic growth overseas convinced the Bank of Japan, European Central Bank, and other central banks to try to keep interest rates low, even as the Federal Reserve scaled back its quantitative easing policies aimed at holding down long-term interest rates. These differing policies led to the depreciation of many foreign currencies, reducing the returns of international stocks in U.S. dollar terms.
Positioning and Strategies. Over the 12-month reporting period, the fund’s growth allocations generally enhanced relative performance, although allocations to value managers partially offset these results. In addition, the fund’s manager selection subtracted value as a result of weak performance by some of the fund’s sub-advisers, although other sub-advisers positively contributed to 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 reduced the fund’s relative performance. As of March 5, 2014, WHV was eliminated as a sub-adviser, and the fund’s allocations to other investment managers were increased.
Harris Associates, with its large-cap value focus, was another sub-adviser that underperformed its comparative index, notably detracting from the fund’s relative performance. Harris Associates’ stock selections within the United Kingdom and the Netherlands were some of the biggest detractors from the fund’s performance, while stock selection in the Industrials and Consumer Discretionary sectors also reduced the fund’s relative return. By comparison, stock selection in Italy, Germany, and Australia, as well as in the Materials sector, worked out much better.
Mondrian Investment Partners, which uses a value-oriented investment approach, also underperformed its comparative index. Mondrian’s relative results were driven in part by stock selection in the Industrials sector, as well as in Singapore, the United Kingdom, and Japan. Overweight positions in Singapore and the United Kingdom compounded these negative results. Stock selection in the Information Technology and Materials sectors enhanced the fund’s performance, as did stock selection in Canada and France.
William Blair & Company, which takes an all-cap growth approach, outperformed its comparative index and contributed positively to the fund’s relative performance. William Blair & Company’s biggest contribution came from strong stock selection, particularly among equities from the Health Care, Information Technology, and Consumer Discretionary sectors. Stock selection in the United Kingdom also helped. Less successful efforts included stock selection in the Energy sector, which reduced relative performance, although an underweight to the sector helped to limit the negative effects. Stock selection in Japan also reduced the fund’s relative return, as did selection in the Materials and Consumer Staples sectors, although an underweight to the Materials sector helped.
American Century, with its focus on small-cap growth stocks, was another sub-adviser that outperformed its comparative index. American Century’s greatest contribution came from its stock selection, particularly in the Consumer Discretionary and Information Technology sectors, and in Denmark and India. However, stock selection in the Industrials sector and in the United Kingdom and Spain dragged on performance. Stock selection in the Energy sector also reduced American Century’s relative performance, although an underweight to this sector helped limit the negative impact.
Management views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
8 Laudus MarketMasters Funds
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Laudus International MarketMasters Fundtm
Performance and Fund Facts as of 10/31/14
As of 10/31/14:
Country Weightings % of Investments
United Kingdom | 17.3% | |||
Japan | 14.4% | |||
Germany | 8.6% | |||
France | 8.1% | |||
Switzerland | 7.3% | |||
Canada | 4.9% | |||
Australia | 4.4% | |||
United States | 4.0% | |||
China | 3.6% | |||
Sweden | 2.8% | |||
Singapore | 2.8% | |||
Other Countries | 21.8% | |||
Total | 100.0% |
Statistics
Number of Holdings | 1,176 | |||
Weighted Average Market Cap ($ x 1,000,000) | $26,458 | |||
Price/Earnings Ratio (P/E) | 17.7 | |||
Price/Book Ratio (P/B) | 2.2 | |||
Portfolio Turnover Rate | 74% |
Sector Weightings % of Investments
Industrials | 21.8% | |||
Financials | 18.9% | |||
Consumer Discretionary | 17.6% | |||
Information Technology | 10.1% | |||
Health Care | 8.2% | |||
Materials | 7.8% | |||
Consumer Staples | 6.1% | |||
Energy | 3.1% | |||
Telecommunication Services | 1.5% | |||
Utilities | 0.9% | |||
Other | 4.0% | |||
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Vanguard FTSE Emerging Markets ETF | 2.6% | |||
Credit Suisse Group AG – Reg’d | 1.1% | |||
Symrise AG | 1.1% | |||
BNP Paribas S.A. | 1.0% | |||
Intesa Sanpaolo S.p.A. | 0.9% | |||
Bayerische Motoren Werke AG | 0.8% | |||
Daimler AG – Reg’d | 0.7% | |||
Samsung Electronics Co., Ltd. | 0.7% | |||
Bodycote plc | 0.7% | |||
Croda International plc | 0.7% | |||
Total | 10.3% |
Management views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
1 | This list is not a recommendation of any security by the investment adviser. |
Laudus MarketMasters Funds 9
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Laudus International MarketMasters Fundtm
Performance and Fund Facts as of 10/31/14
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, 2004 – October 31, 2014
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/0000950123-15-000008/f30296ctlimf1.gif)
October 31, 2004 – October 31, 2014
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/0000950123-15-000008/f30296ctlimf2.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (10/16/96) | -1.73 | % | 10.31 | % | 8.64% | |||||||
Select Shares® (4/2/04) | -1.53 | % | * | 10.48 | % | 8.80% | ||||||
MSCI EAFE® Index (Net)3 | -0.60 | % | 6.52 | % | 5.81% | |||||||
MSCI EAFE® Index (Gross)3 | -0.17 | % | 7.00 | % | 6.29% | |||||||
Fund Category: Morningstar Foreign Large Growth | 0.91 | % | 7.83 | % | 6.32% | |||||||
Fund Expense Ratios4: Investor Shares: Net 1.40%; Gross 1.60% / Select Shares: Net 1.25%; Gross 1.44%
Investment Managers and Allocations5
% of | |||||||
Investment Managers | Investment Style | Net Assets | |||||
American Century Investment Management, Inc. | International Small-Cap Growth | 24.3 | % | ||||
William Blair & Company, LLC | International Multi-Cap Growth | 23.1 | % | ||||
Mondrian Investment Partners Limited | International Small-Cap Value | 22.2 | % | ||||
Harris Associates L.P. | International Large-Cap Value | 21.2 | % | ||||
Mellon Capital Management Corp. | International Blend | 5.1 | % | ||||
Cash and other assets | — | 4.1 | % | ||||
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
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.
* | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the NAV at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semi-annual reports. | |
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 | Effective February 28, 2014, 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 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. | |
5 | For more information about each of the investment manager’s investment styles, refer to the fund’s prospectus. |
10 Laudus MarketMasters Funds
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, 2014 and held through October 31, 2014.
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 5/1/14 | at 10/31/14 | 05/1/14–10/31/14 | |||||||||||||
Laudus Small-Cap MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.35% | $ | 1,000.00 | $ | 1,036.80 | $ | 6.93 | |||||||||
Hypothetical 5% Return | 1.35% | $ | 1,000.00 | $ | 1,018.39 | $ | 6.87 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.20% | $ | 1,000.00 | $ | 1,037.40 | $ | 6.16 | |||||||||
Hypothetical 5% Return | 1.20% | $ | 1,000.00 | $ | 1,019.15 | $ | 6.11 | |||||||||
Laudus International MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.40% | $ | 1,000.00 | $ | 948.00 | $ | 6.87 | |||||||||
Hypothetical 5% Return | 1.40% | $ | 1,000.00 | $ | 1,018.14 | $ | 7.12 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.25% | $ | 1,000.00 | $ | 948.70 | $ | 6.14 | |||||||||
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. |
Laudus MarketMasters Funds 11
Table of Contents
Laudus Small-Cap MarketMasters Fund™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
Investor Shares | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 17.28 | 13.14 | 11.99 | 11.52 | 9.40 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss)1 | (0.05 | ) | (0.02 | ) | (0.10 | ) | (0.09 | ) | (0.08 | ) | ||||||||||||
Net realized and unrealized gains (losses) | 0.79 | 4.16 | 1.25 | 0.56 | 2.20 | |||||||||||||||||
Total from investment operations | 0.74 | 4.14 | 1.15 | 0.47 | 2.12 | |||||||||||||||||
Net asset value at end of period | 18.02 | 17.28 | 13.14 | 11.99 | 11.52 | |||||||||||||||||
Total return (%) | 4.28 | 31.51 | 9.59 | 4.08 | 22.55 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.35 | 1.35 | 1.42 | 2 | 1.46 | 1.46 | ||||||||||||||||
Gross operating expenses | 1.56 | 1.59 | 1.59 | 1.51 | 1.50 | |||||||||||||||||
Net investment income (loss) | (0.26 | ) | (0.16 | ) | (0.79 | ) | (0.70 | ) | (0.72 | ) | ||||||||||||
Portfolio turnover rate | 79 | 97 | 144 | 95 | 78 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 70 | 76 | 65 | 62 | 68 |
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
Select Shares | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 17.56 | 13.33 | 12.14 | 11.64 | 9.49 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss)1 | (0.02 | ) | (0.00 | ) | (0.08 | ) | (0.07 | ) | (0.06 | ) | ||||||||||||
Net realized and unrealized gains (losses) | 0.79 | 4.23 | 1.27 | 0.57 | 2.21 | |||||||||||||||||
Total from investment operations | 0.77 | 4.23 | 1.19 | 0.50 | 2.15 | |||||||||||||||||
Net asset value at end of period | 18.33 | 17.56 | 13.33 | 12.14 | 11.64 | |||||||||||||||||
Total return (%) | 4.39 | 31.73 | 9.80 | 4.30 | 22.66 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.20 | 1.20 | 1.27 | 2 | 1.31 | 1.32 | 3 | |||||||||||||||
Gross operating expenses | 1.51 | 1.53 | 1.51 | 1.45 | 1.45 | |||||||||||||||||
Net investment income (loss) | (0.13 | ) | (0.03 | ) | (0.60 | ) | (0.54 | ) | (0.58 | ) | ||||||||||||
Portfolio turnover rate | 79 | 97 | 144 | 95 | 78 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 122 | 113 | 88 | 219 | 337 |
1 Calculated based on the average shares outstanding during the period.
2 Effective June 6, 2012, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/12 is a blended ratio.
3 The ratio of net operating expenses would have been 1.31%, if certain non-routine expense had not been incurred.
12 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of October 31, 2014
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 | ($) | ($) | ||||||||||
90 | .5% | Common Stock | 155,866,101 | 174,288,248 | ||||||||
8 | .7% | Other Investment Companies | 16,612,947 | 16,796,858 | ||||||||
0 | .0% | Rights | 2,814 | 2,814 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
0 | .2% | Short-Term Investments | 385,996 | 385,996 | ||||||||
99 | .4% | Total Investments | 172,867,858 | 191,473,916 | ||||||||
0 | .6% | Other Assets and Liabilities, Net | 1,107,291 | |||||||||
100 | .0% | Net Assets | 192,581,207 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 90.5% of net assets | ||||||||
Automobiles & Components 0.6% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 803 | 15,522 | ||||||
Cooper Tire & Rubber Co. | 881 | 28,377 | ||||||
Cooper-Standard Holding, Inc. * | 71 | 3,875 | ||||||
Dana Holding Corp. | 1,903 | 38,935 | ||||||
Dorman Products, Inc. * | 200 | 9,272 | ||||||
Drew Industries, Inc. | 170 | 8,170 | ||||||
Federal-Mogul Holdings Corp. * | 125 | 1,951 | ||||||
Fuel Systems Solutions, Inc. * | 223 | 2,058 | ||||||
Gentherm, Inc. * | 320 | 13,344 | ||||||
Modine Manufacturing Co. * | 723 | 9,276 | ||||||
Motorcar Parts of America, Inc. * | 20,042 | 582,020 | ||||||
Standard Motor Products, Inc. | 198 | 7,825 | ||||||
Stoneridge, Inc. * | 155 | 2,014 | ||||||
Superior Industries International, Inc. | 233 | 4,546 | ||||||
Tenneco, Inc. * | 673 | 35,238 | ||||||
Tower International, Inc. * | 122 | 2,965 | ||||||
Winnebago Industries, Inc. * | 18,694 | 396,500 | ||||||
1,161,888 | ||||||||
Banks 6.5% | ||||||||
1st Source Corp. | 167 | 5,225 | ||||||
1st United Bancorp, Inc. | 253 | 2,239 | ||||||
American National Bankshares, Inc. | 73 | 1,767 | ||||||
Ameris Bancorp | 222 | 5,506 | ||||||
Ames National Corp. | 74 | 1,835 | ||||||
Arrow Financial Corp. | 69 | 1,890 | ||||||
Astoria Financial Corp. | 570 | 7,495 | ||||||
Banc of California, Inc. | 386 | 4,543 | ||||||
Banco Latinoamericano de Comercio Exterior, S.A., Class E | 479 | 16,114 | ||||||
BancorpSouth, Inc. | 1,304 | 30,031 | ||||||
Bank Mutual Corp. | 891 | 5,872 | ||||||
Bank of Marin Bancorp | 43 | 2,147 | ||||||
Bank of the Ozarks, Inc. | 664 | 23,399 | ||||||
BankFinancial Corp. | 420 | 5,011 | ||||||
Banner Corp. | 324 | 14,003 | ||||||
BBCN Bancorp, Inc. | 963 | 13,617 | ||||||
Berkshire Hills Bancorp, Inc. | 188 | 4,847 | ||||||
BNC Bancorp | 198 | 3,368 | ||||||
BofI Holding, Inc. * | 193 | 14,865 | ||||||
Boston Private Financial Holdings, Inc. | 1,120 | 14,728 | ||||||
Bridge Bancorp, Inc. | 294 | 7,720 | ||||||
Bridge Capital Holdings * | 106 | 2,557 | ||||||
Brookline Bancorp, Inc. | 662 | 6,349 | ||||||
Bryn Mawr Bank Corp. | 73 | 2,251 | ||||||
Camden National Corp. | 47 | 1,923 | ||||||
Capital Bank Financial Corp., Class A * | 90 | 2,330 | ||||||
Capital City Bank Group, Inc. | 144 | 2,176 | ||||||
Capitol Federal Financial, Inc. | 1,245 | 15,948 | ||||||
Cardinal Financial Corp. | 319 | 6,125 | ||||||
Cascade Bancorp * | 518 | 2,647 | ||||||
Cathay General Bancorp | 913 | 24,112 | ||||||
Centerstate Banks, Inc. | 196 | 2,281 | ||||||
Century Bancorp, Inc., Class A | 48 | 1,823 | ||||||
Charter Financial Corp. | 168 | 1,905 | ||||||
Chemical Financial Corp. | 186 | 5,539 | ||||||
Citizens & Northern Corp. | 277 | 5,512 | ||||||
City Holding Co. | 117 | 5,264 | ||||||
Clifton Bancorp, Inc. | 136 | 1,771 | ||||||
CNB Financial Corp. | 102 | 1,847 | ||||||
CoBiz Financial, Inc. | 304 | 3,654 | ||||||
Columbia Banking System, Inc. | 609 | 16,918 | ||||||
Community Bank System, Inc. | 526 | 20,067 | ||||||
Community Trust Bancorp, Inc. | 185 | 6,651 | ||||||
ConnectOne Bancorp, Inc. | 278 | 5,143 | ||||||
Customers Bancorp, Inc. * | 245 | 4,680 | ||||||
CVB Financial Corp. | 989 | 15,606 | ||||||
Dime Community Bancshares, Inc. | 304 | 4,788 | ||||||
Eagle Bancorp, Inc. * | 294 | 10,563 | ||||||
Enterprise Bancorp, Inc. | 99 | 2,329 | ||||||
Enterprise Financial Services Corp. | 341 | 6,428 | ||||||
ESB Financial Corp. | 136 | 2,538 | ||||||
Essent Group Ltd. * | 369 | 8,981 | ||||||
EverBank Financial Corp. | 771 | 14,765 | ||||||
F.N.B. Corp. | 1,926 | 24,634 | ||||||
Federal Agricultural Mortgage Corp., Class C | 120 | 3,996 | ||||||
Financial Institutions, Inc. | 161 | 4,048 | ||||||
First Bancorp (North Carolina) | 173 | 3,135 | ||||||
First BanCorp (Puerto Rico) * | 1,156 | 6,023 | ||||||
First Bancorp, Inc. | 103 | 1,822 | ||||||
First Busey Corp. | 86,809 | 542,556 | ||||||
First Citizens BancShares, Inc., Class A | 56 | 14,068 | ||||||
First Commonwealth Financial Corp. | 784 | 7,330 | ||||||
First Community Bancshares, Inc. | 299 | 4,895 | ||||||
First Connecticut Bancorp, Inc. | 350 | 5,474 | ||||||
First Defiance Financial Corp. | 73 | 2,236 |
See financial notes 13
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
First Financial Bancorp | 612 | 10,734 | ||||||
First Financial Bankshares, Inc. | 766 | 24,343 | ||||||
First Financial Corp. | 124 | 4,300 | ||||||
First Merchants Corp. | 290 | 6,569 | ||||||
First Midwest Bancorp, Inc. | 79,912 | 1,341,722 | ||||||
First NBC Bank Holding Co. * | 118 | 4,334 | ||||||
First Niagara Financial Group, Inc. | 79,800 | 597,702 | ||||||
FirstMerit Corp. | 1,951 | 35,801 | ||||||
Flagstar Bancorp, Inc. * | 177 | 2,782 | ||||||
Flushing Financial Corp. | 39,672 | 798,994 | ||||||
Fox Chase Bancorp, Inc. | 185 | 3,030 | ||||||
Franklin Financial Corp. * | 185 | 3,841 | ||||||
German American Bancorp, Inc. | 77 | 2,300 | ||||||
Glacier Bancorp, Inc. | 608 | 17,444 | ||||||
Great Southern Bancorp, Inc. | 188 | 7,146 | ||||||
Guaranty Bancorp | 155 | 2,444 | ||||||
Hancock Holding Co. | 27,460 | 966,317 | ||||||
Hanmi Financial Corp. | 351 | 7,529 | ||||||
Heartland Financial USA, Inc. | 62 | 1,649 | ||||||
Heritage Commerce Corp. | 248 | 2,158 | ||||||
Heritage Financial Corp. | 496 | 8,705 | ||||||
Heritage Oaks Bancorp | 282 | 2,219 | ||||||
Home BancShares, Inc. | 27,094 | 864,840 | ||||||
Home Loan Servicing Solutions Ltd. | 1,023 | 19,652 | ||||||
HomeTrust Bancshares, Inc. * | 218 | 3,368 | ||||||
Horizon Bancorp | 84 | 2,160 | ||||||
Hudson Valley Holding Corp. | 100 | 2,274 | ||||||
Iberiabank Corp. | 312 | 21,484 | ||||||
Independent Bank Corp., Massachusetts | 171 | 6,977 | �� | |||||
Independent Bank Corp., Michigan | 256 | 3,090 | ||||||
Independent Bank Group, Inc. | 88 | 3,933 | ||||||
International Bancshares Corp. | 55,757 | 1,581,826 | ||||||
Investors Bancorp, Inc. | 3,414 | 36,700 | ||||||
Kearny Financial Corp. * | 167 | 2,378 | ||||||
Ladder Capital Corp., Class A * | 124 | 2,355 | ||||||
Lakeland Bancorp, Inc. | 280 | 3,077 | ||||||
Lakeland Financial Corp. | 158 | 6,548 | ||||||
MainSource Financial Group, Inc. | 122 | 2,219 | ||||||
MB Financial, Inc. | 34,629 | 1,092,545 | ||||||
Mercantile Bank Corp. | 158 | 3,117 | ||||||
Merchants Bancshares, Inc. | 58 | 1,728 | ||||||
Meridian Bancorp, Inc. * | 225 | 2,552 | ||||||
Meta Financial Group, Inc. | 84 | 3,151 | ||||||
Metro Bancorp, Inc. * | 247 | 6,185 | ||||||
MGIC Investment Corp. * | 3,588 | 32,005 | ||||||
MidSouth Bancorp, Inc. | 214 | 4,053 | ||||||
MidWestOne Financial Group, Inc. | 70 | 1,868 | ||||||
National Bank Holdings Corp., Class A | 284 | 5,564 | ||||||
National Bankshares, Inc. | 94 | 2,943 | ||||||
National Penn Bancshares, Inc. | 1,336 | 13,747 | ||||||
NBT Bancorp, Inc. | 552 | 14,175 | ||||||
NewBridge Bancorp * | 271 | 2,409 | ||||||
NMI Holdings, Inc., Class A * | 429 | 3,840 | ||||||
Northfield Bancorp, Inc. | 345 | 4,913 | ||||||
Northrim BanCorp, Inc. | 74 | 2,139 | ||||||
Northwest Bancshares, Inc. | 92,398 | 1,185,466 | ||||||
OceanFirst Financial Corp. | 300 | 4,971 | ||||||
OFG Bancorp | 316 | 4,920 | ||||||
Old National Bancorp | 1,439 | 20,937 | ||||||
OmniAmerican Bancorp, Inc. | 193 | 5,219 | ||||||
Oritani Financial Corp. | 482 | 7,119 | ||||||
Pacific Continental Corp. | 150 | 2,163 | ||||||
Palmetto Bancshares, Inc. | 123 | 2,044 | ||||||
Park National Corp. | 92 | 7,762 | ||||||
Park Sterling Corp. | 898 | 6,879 | ||||||
Peapack-Gladstone Financial Corp. | 128 | 2,336 | ||||||
Penns Woods Bancorp, Inc. | 41 | 1,990 | ||||||
PennyMac Financial Services, Inc., Class A * | 80 | 1,333 | ||||||
Peoples Bancorp, Inc. | 147 | 3,624 | ||||||
Peoples Financial Services Corp. | 59 | 2,960 | ||||||
Pinnacle Financial Partners, Inc. | 421 | 16,503 | ||||||
Preferred Bank | 104 | 2,764 | ||||||
PrivateBancorp, Inc. | 883 | 28,539 | ||||||
Prosperity Bancshares, Inc. | 819 | 49,459 | ||||||
Provident Financial Services, Inc. | 615 | 11,211 | ||||||
Radian Group, Inc. | 2,434 | 41,013 | ||||||
Renasant Corp. | 277 | 8,352 | ||||||
Republic Bancorp, Inc., Class A | 75 | 1,819 | ||||||
Republic First Bancorp, Inc. * | 386 | 1,532 | ||||||
S&T Bancorp, Inc. | 199 | 5,490 | ||||||
Sandy Spring Bancorp, Inc. | 230 | 5,934 | ||||||
Sierra Bancorp | 117 | 2,008 | ||||||
Simmons First National Corp., Class A | 206 | 8,650 | ||||||
South State Corp. | 184 | 11,097 | ||||||
Southside Bancshares, Inc. | 232 | 7,791 | ||||||
Southwest Bancorp, Inc. | 261 | 4,706 | ||||||
State Bank Financial Corp. | 630 | 11,290 | ||||||
Sterling Bancorp | 634 | 8,914 | ||||||
Stock Yards Bancorp, Inc. | 68 | 2,263 | ||||||
Suffolk Bancorp | 99 | 2,273 | ||||||
Sun Bancorp, Inc. * | 108 | 2,182 | ||||||
Susquehanna Bancshares, Inc. | 2,136 | 20,954 | ||||||
Territorial Bancorp, Inc. | 73 | 1,568 | ||||||
Texas Capital Bancshares, Inc. * | 529 | 32,348 | ||||||
The Bancorp, Inc. * | 650 | 6,149 | ||||||
The Bank of Kentucky Financial Corp. | 63 | 2,955 | ||||||
The First of Long Island Corp. | 76 | 2,002 | ||||||
Tompkins Financial Corp. | 76 | 3,815 | ||||||
Towne Bank | 116 | 1,759 | ||||||
Tree.com, Inc. * | 70 | 2,589 | ||||||
Trico Bancshares | 237 | 6,233 | ||||||
TriState Capital Holdings, Inc. * | 128 | 1,248 | ||||||
TrustCo Bank Corp. | 1,765 | 12,884 | ||||||
Trustmark Corp. | 773 | 18,807 | ||||||
UMB Financial Corp. | 369 | 21,985 | ||||||
Umpqua Holdings Corp. | 2,104 | 37,030 | ||||||
Union Bankshares Corp. | 492 | 11,060 | ||||||
United Bankshares, Inc. | 674 | 23,105 | ||||||
United Community Banks, Inc. | 452 | 8,150 | ||||||
United Community Financial Corp. | 598 | 3,062 | ||||||
United Financial Bancorp, Inc. | 505 | 7,085 | ||||||
Univest Corp. of Pennsylvania | 90 | 1,847 | ||||||
Valley National Bancorp | 1,517 | 15,140 | ||||||
ViewPoint Financial Group, Inc. | 554 | 15,108 | ||||||
Walker & Dunlop, Inc. * | 136 | 2,191 | ||||||
Washington Federal, Inc. | 1,209 | 26,392 | ||||||
Washington Trust Bancorp, Inc. | 60 | 2,302 | ||||||
Waterstone Financial, Inc. | 425 | 5,202 | ||||||
Webster Financial Corp. | 57,138 | 1,790,705 |
14 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
WesBanco, Inc. | 200 | 6,892 | ||||||
West Bancorp, Inc. | 141 | 2,338 | ||||||
Westamerica Bancorp | 6,367 | 314,148 | ||||||
Western Alliance Bancorp * | 957 | 25,475 | ||||||
Wilshire Bancorp, Inc. | 1,173 | 11,613 | ||||||
Wintrust Financial Corp. | 409 | 18,945 | ||||||
WSFS Financial Corp. | 108 | 8,494 | ||||||
Yadkin Financial Corp. * | 276 | 5,357 | ||||||
12,604,238 | ||||||||
Capital Goods 7.8% | ||||||||
AAON, Inc. | 477 | 9,373 | ||||||
AAR Corp. | 367 | 9,725 | ||||||
Accuride Corp. * | 750 | 3,615 | ||||||
Aceto Corp. | 475 | 10,801 | ||||||
Actuant Corp., Class A | 15,257 | 483,494 | ||||||
Aegion Corp. * | 602 | 11,029 | ||||||
Aerovironment, Inc. * | 310 | 9,502 | ||||||
Aircastle Ltd. | 931 | 17,763 | ||||||
Alamo Group, Inc. | 42 | 1,799 | ||||||
Albany International Corp., Class A | 45,039 | 1,701,573 | ||||||
Altra Industrial Motion Corp. | 222 | 6,997 | ||||||
Ameresco, Inc., Class A * | 500 | 4,120 | ||||||
American Railcar Industries, Inc. | 62 | 4,080 | ||||||
American Science & Engineering, Inc. | 132 | 7,300 | ||||||
American Woodmark Corp. * | 70 | 2,864 | ||||||
Apogee Enterprises, Inc. | 320 | 14,048 | ||||||
Applied Industrial Technologies, Inc. | 463 | 22,599 | ||||||
Argan, Inc. | 281 | 9,782 | ||||||
Astec Industries, Inc. | 123 | 4,663 | ||||||
Astronics Corp. * | 283 | 14,662 | ||||||
AZZ, Inc. | 190 | 8,884 | ||||||
Barnes Group, Inc. | 25,540 | 933,742 | ||||||
Beacon Roofing Supply, Inc. * | 500 | 13,835 | ||||||
Blount International, Inc. * | 317 | 4,853 | ||||||
Briggs & Stratton Corp. | 492 | 9,943 | ||||||
Builders FirstSource, Inc. * | 427 | 2,532 | ||||||
CAI International, Inc. * | 97 | 2,042 | ||||||
Capstone Turbine Corp. * | 4,521 | 4,521 | ||||||
Chart Industries, Inc. * | 355 | 16,525 | ||||||
CIRCOR International, Inc. | 136 | 10,220 | ||||||
CLARCOR, Inc. | 459 | 30,735 | ||||||
Columbus McKinnon Corp. | 79 | 2,248 | ||||||
Comfort Systems USA, Inc. | 363 | 5,576 | ||||||
Commercial Vehicle Group, Inc. * | 186 | 1,218 | ||||||
Cubic Corp. | 32,330 | 1,559,599 | ||||||
Curtiss-Wright Corp. | 560 | 38,758 | ||||||
DigitalGlobe, Inc. * | 893 | 25,531 | ||||||
Douglas Dynamics, Inc. | 430 | 8,914 | ||||||
DXP Enterprises, Inc. * | 129 | 8,551 | ||||||
Dycom Industries, Inc. * | 360 | 11,300 | ||||||
Dynamic Materials Corp. | 194 | 3,533 | ||||||
EMCOR Group, Inc. | 760 | 33,539 | ||||||
Encore Wire Corp. | 156 | 5,919 | ||||||
EnerSys | 560 | 35,168 | ||||||
Engility Holdings, Inc. * | 249 | 10,757 | ||||||
Enphase Energy, Inc. * | 247 | 3,710 | ||||||
EnPro Industries, Inc. * | 253 | 16,326 | ||||||
ESCO Technologies, Inc. | 31,404 | 1,193,980 | ||||||
Esterline Technologies Corp. * | 346 | 40,520 | ||||||
Federal Signal Corp. | 998 | 14,172 | ||||||
Franklin Electric Co., Inc. | 516 | 19,267 | ||||||
FreightCar America, Inc. | 71 | 2,341 | ||||||
FuelCell Energy, Inc. * | 3,306 | 6,678 | ||||||
Furmanite Corp. * | 517 | 3,867 | ||||||
GATX Corp. | 27,900 | 1,768,860 | ||||||
GenCorp, Inc. * | 786 | 13,331 | ||||||
Generac Holdings, Inc. * | 730 | 33,098 | ||||||
General Cable Corp. | 548 | 7,765 | ||||||
Gibraltar Industries, Inc. * | 269 | 4,102 | ||||||
Global Power Equipment Group, Inc. | 165 | 2,249 | ||||||
GrafTech International Ltd. * | 881 | 3,779 | ||||||
Graham Corp. | 175 | 5,863 | ||||||
Granite Construction, Inc. | 406 | 14,985 | ||||||
Great Lakes Dredge & Dock Corp. * | 907 | 6,340 | ||||||
Griffon Corp. | 404 | 4,965 | ||||||
H&E Equipment Services, Inc. | 411 | 15,367 | ||||||
Harsco Corp. | 634 | 13,745 | ||||||
HEICO Corp. | 735 | 39,866 | ||||||
Hexcel Corp. * | 29,420 | 1,232,404 | ||||||
Hillenbrand, Inc. | 654 | 21,772 | ||||||
Houston Wire & Cable Co. | 288 | 3,905 | ||||||
Hurco Cos., Inc. | 62 | 2,389 | ||||||
Hyster-Yale Materials Handling, Inc. | 88 | 6,907 | ||||||
John Bean Technologies Corp. | 331 | 9,920 | ||||||
Kadant, Inc. | 176 | 7,276 | ||||||
Kaman Corp. | 176 | 7,579 | ||||||
Kratos Defense & Security Solutions, Inc. * | 818 | 5,701 | ||||||
L.B. Foster Co., Class A | 39 | 2,110 | ||||||
Layne Christensen Co. * | 350 | 2,520 | ||||||
Lennox International, Inc. | 7,470 | 664,232 | ||||||
Lindsay Corp. | 135 | 11,839 | ||||||
LSI Industries, Inc. | 220 | 1,575 | ||||||
Luxfer Holdings plc ADR | 33,000 | 525,690 | ||||||
Lydall, Inc. * | 323 | 9,990 | ||||||
Masonite International Corp. * | 232 | 12,542 | ||||||
MasTec, Inc. * | 637 | 18,244 | ||||||
Meritor, Inc. * | 825 | 9,479 | ||||||
Miller Industries, Inc. | 263 | 5,200 | ||||||
Moog, Inc., Class A * | 513 | 39,265 | ||||||
Mueller Industries, Inc. | 70,392 | 2,284,924 | ||||||
Mueller Water Products, Inc., Class A | 1,519 | 14,993 | ||||||
MYR Group, Inc. * | 305 | 7,912 | ||||||
National Presto Industries, Inc. | 23 | 1,450 | ||||||
NCI Building Systems, Inc. * | 471 | 9,359 | ||||||
NN, Inc. | 119 | 2,975 | ||||||
Nortek, Inc. * | 45 | 3,748 | ||||||
Northwest Pipe Co. * | 60 | 2,147 | ||||||
Omega Flex, Inc. | 119 | 3,168 | ||||||
Orbital Sciences Corp. * | 602 | 15,833 | ||||||
Patrick Industries, Inc. * | 67 | 2,862 | ||||||
PGT, Inc. * | 411 | 3,865 | ||||||
Pike Corp. * | 317 | 3,785 | ||||||
Plug Power, Inc. * | 1,567 | 7,381 | ||||||
Ply Gem Holdings, Inc. * | 176 | 1,998 | ||||||
Polypore International, Inc. * | 393 | 17,261 | ||||||
Powell Industries, Inc. | 43 | 1,958 | ||||||
Power Solutions International, Inc. * | 26 | 1,703 | ||||||
Preformed Line Products Co. | 25 | 1,425 | ||||||
Primoris Services Corp. | 515 | 14,791 |
See financial notes 15
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Proto Labs, Inc. * | 174 | 11,374 | ||||||
Quanex Building Products Corp. | 687 | 13,754 | ||||||
Raven Industries, Inc. | 296 | 7,504 | ||||||
RBC Bearings, Inc. | 163 | 9,902 | ||||||
Rexnord Corp. * | 769 | 22,724 | ||||||
Rush Enterprises, Inc., Class A * | 275 | 10,477 | ||||||
Simpson Manufacturing Co., Inc. | 565 | 18,690 | ||||||
Sparton Corp. * | 100 | 2,710 | ||||||
Standex International Corp. | 110 | 9,488 | ||||||
Sterling Construction Co., Inc. * | 183 | 1,614 | ||||||
Stock Building Supply Holdings, Inc. * | 91 | 1,428 | ||||||
Sun Hydraulics Corp. | 156 | 6,210 | ||||||
TAL International Group, Inc. * | 294 | 12,680 | ||||||
Taser International, Inc. * | 678 | 12,774 | ||||||
Teledyne Technologies, Inc. * | 379 | 39,276 | ||||||
Tennant Co. | 211 | 15,557 | ||||||
Textainer Group Holdings Ltd. | 148 | 5,097 | ||||||
The ExOne Co. * | 84 | 2,064 | ||||||
The Gorman-Rupp Co. | 178 | 5,650 | ||||||
The Greenbrier Cos., Inc. | 274 | 17,136 | ||||||
The KEYW Holding Corp. * | 316 | 3,207 | ||||||
Thermon Group Holdings, Inc. * | 245 | 5,971 | ||||||
Titan International, Inc. | 760 | 8,026 | ||||||
Titan Machinery, Inc. * | 100 | 1,376 | ||||||
Trex Co., Inc. * | 348 | 14,964 | ||||||
TriMas Corp. * | 12,949 | 409,965 | ||||||
Tutor Perini Corp. * | 459 | 12,857 | ||||||
Twin Disc, Inc. | 175 | 4,554 | ||||||
Universal Forest Products, Inc. | 133 | 6,646 | ||||||
Vicor Corp. * | 299 | 4,069 | ||||||
Wabash National Corp. * | 970 | 9,991 | ||||||
Watsco, Inc. | 8,254 | 838,771 | ||||||
Watts Water Technologies, Inc., Class A | 325 | 19,705 | ||||||
Woodward, Inc. | 729 | 37,332 | ||||||
Xerium Technologies, Inc. * | 350 | 5,222 | ||||||
14,986,250 | ||||||||
Commercial & Professional Supplies 7.9% | ||||||||
ABM Industries, Inc. | 513 | 14,179 | ||||||
Acacia Research Corp. | 151,043 | 2,718,774 | ||||||
ACCO Brands Corp. * | 141,782 | 1,166,866 | ||||||
ARC Document Solutions, Inc. * | 292 | 2,964 | ||||||
Barrett Business Services, Inc. | 134 | 3,150 | ||||||
Brady Corp., Class A | 485 | 11,562 | ||||||
Casella Waste Systems, Inc., Class A * | 875 | 3,938 | ||||||
CBIZ, Inc. * | 487 | 4,495 | ||||||
CDI Corp. | 118 | 2,028 | ||||||
Ceco Environmental Corp. | 237 | 3,394 | ||||||
Civeo Corp. | 754 | 9,191 | ||||||
CRA International, Inc. * | 91 | 2,730 | ||||||
Deluxe Corp. | 586 | 35,629 | ||||||
Ennis, Inc. | 287 | 4,256 | ||||||
Exponent, Inc. | 89 | 7,104 | ||||||
FTI Consulting, Inc. * | 21,519 | 868,937 | ||||||
G&K Services, Inc., Class A | 31,313 | 1,974,911 | ||||||
GP Strategies Corp. * | 298 | 9,882 | ||||||
Healthcare Services Group, Inc. | 719 | 21,412 | ||||||
Heidrick & Struggles International, Inc. | 102 | 2,124 | ||||||
Heritage-Crystal Clean, Inc. * | 114 | 2,068 | ||||||
Herman Miller, Inc. | 593 | 18,976 | ||||||
HNI Corp. | 475 | 22,159 | ||||||
Huron Consulting Group, Inc. * | 307 | 21,370 | ||||||
ICF International, Inc. * | 332 | 12,065 | ||||||
InnerWorkings, Inc. * | 698 | 6,338 | ||||||
Insperity, Inc. | 333 | 10,510 | ||||||
Interface, Inc. | 681 | 10,916 | ||||||
Kelly Services, Inc., Class A | 381 | 6,717 | ||||||
Kforce, Inc. | 489 | 11,320 | ||||||
Kimball International, Inc., Class B | 165 | 2,967 | ||||||
Knoll, Inc. | 699 | 13,903 | ||||||
Korn/Ferry International * | 566 | 15,808 | ||||||
Matthews International Corp., Class A | 33,328 | 1,535,754 | ||||||
McGrath RentCorp | 152 | 5,553 | ||||||
Mistras Group, Inc. * | 196 | 3,232 | ||||||
MiX Telematics Ltd. ADR * | 119,740 | 1,066,883 | ||||||
Mobile Mini, Inc. | 380 | 16,655 | ||||||
MSA Safety, Inc. | 375 | 21,551 | ||||||
Multi-Color Corp. | 58 | 2,859 | ||||||
Navigant Consulting, Inc. * | 787 | 12,112 | ||||||
NL Industries, Inc. | 152 | 1,108 | ||||||
On Assignment, Inc. * | 29,701 | 864,299 | ||||||
Pendrell Corp. * | 1,575 | 2,630 | ||||||
Quad Graphics, Inc. | 332 | 7,321 | ||||||
Resources Connection, Inc. | 434 | 6,714 | ||||||
RPX Corp. * | 278 | 3,906 | ||||||
SP Plus Corp. * | 56,280 | 1,228,030 | ||||||
Steelcase, Inc., Class A | 41,843 | 741,458 | ||||||
Team, Inc. * | 331 | 13,948 | ||||||
Tetra Tech, Inc. | 816 | 21,877 | ||||||
The Advisory Board Co. * | 14,302 | 767,588 | ||||||
The Brink’s Co. | 692 | 14,532 | ||||||
The Corporate Executive Board Co. | 416 | 30,659 | ||||||
TrueBlue, Inc. * | 239 | 5,908 | ||||||
UniFirst Corp. | 132 | 14,726 | ||||||
United Stationers, Inc. | 43,022 | 1,797,029 | ||||||
US Ecology, Inc. | 159 | 7,995 | ||||||
Viad Corp. | 380 | 9,694 | ||||||
VSE Corp. | 41 | 2,472 | ||||||
WageWorks, Inc. * | 309 | 17,616 | ||||||
West Corp. | 213 | 6,816 | ||||||
15,253,568 | ||||||||
Consumer Durables & Apparel 5.2% | ||||||||
Arctic Cat, Inc. | 229 | 7,708 | ||||||
Beazer Homes USA, Inc. * | 196 | 3,514 | ||||||
Black Diamond, Inc. * | 183 | 1,420 | ||||||
Brunswick Corp. | 1,058 | 49,514 | ||||||
Callaway Golf Co. | 1,416 | 11,101 | ||||||
Cavco Industries, Inc. * | 63 | 4,591 | ||||||
Columbia Sportswear Co. | 408 | 15,724 | ||||||
Crocs, Inc. * | 945 | 11,038 | ||||||
CSS Industries, Inc. | 196 | 5,598 | ||||||
Culp, Inc. | 98 | 1,859 | ||||||
Ethan Allen Interiors, Inc. | 459 | 12,990 | ||||||
Flexsteel Industries, Inc. | 70 | 2,402 | ||||||
G-III Apparel Group Ltd. * | 152 | 12,061 |
16 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Helen of Troy Ltd. * | 37,143 | 2,297,295 | ||||||
Hovnanian Enterprises, Inc., Class A * | 808 | 3,038 | ||||||
Iconix Brand Group, Inc. * | 366 | 14,644 | ||||||
iRobot Corp. * | 262 | 9,359 | ||||||
JAKKS Pacific, Inc. * | 490 | 3,126 | ||||||
Johnson Outdoors, Inc., Class A | 67 | 2,013 | ||||||
KB Home | 1,186 | 18,668 | ||||||
La-Z-Boy, Inc. | 492 | 11,247 | ||||||
LeapFrog Enterprises, Inc. * | 1,107 | 5,889 | ||||||
Libbey, Inc. * | 48,933 | 1,406,824 | ||||||
Lifetime Brands, Inc. | 127 | 2,173 | ||||||
M.D.C. Holdings, Inc. | 499 | 12,186 | ||||||
M/I Homes, Inc. * | 52,228 | 1,124,991 | ||||||
Marine Products Corp. | 229 | 1,933 | ||||||
Meritage Homes Corp. * | 482 | 17,733 | ||||||
Movado Group, Inc. | 234 | 8,260 | ||||||
NACCO Industries, Inc., Class A | 44 | 2,577 | ||||||
Nautilus, Inc. * | 206 | 2,756 | ||||||
Oxford Industries, Inc. | 210 | 12,862 | ||||||
Perry Ellis International, Inc. * | 300 | 6,135 | ||||||
Quiksilver, Inc. * | 989 | 1,731 | ||||||
Sequential Brands Group, Inc. * | 175 | 2,195 | ||||||
Skechers U.S.A., Inc., Class A * | 433 | 23,707 | ||||||
Skullcandy, Inc. * | 650 | 5,421 | ||||||
Smith & Wesson Holding Corp. * | 826 | 8,392 | ||||||
Standard Pacific Corp. * | 1,287 | 9,524 | ||||||
Steven Madden Ltd. * | 709 | 22,227 | ||||||
Sturm, Ruger & Co., Inc. | 143 | 5,960 | ||||||
The Ryland Group, Inc. | 543 | 19,445 | ||||||
TRI Pointe Homes, Inc. * | 156,959 | 2,148,769 | ||||||
Tumi Holdings, Inc. * | 459 | 9,533 | ||||||
UCP, Inc., Class A * | 26,520 | 363,059 | ||||||
Unifi, Inc. * | 65 | 1,818 | ||||||
Universal Electronics, Inc. * | 111 | 6,315 | ||||||
Vera Bradley, Inc. * | 351 | 8,003 | ||||||
Vince Holding Corp. * | 18,560 | 650,528 | ||||||
William Lyon Homes, Class A * | 68,575 | 1,622,484 | ||||||
Wolverine World Wide, Inc. | 1,060 | 28,768 | ||||||
10,041,108 | ||||||||
Consumer Services 1.7% | ||||||||
American Public Education, Inc. * | 186 | 5,764 | ||||||
Ascent Capital Group, Inc., Class A * | 118 | 7,587 | ||||||
Belmond Ltd., Class A * | 1,121 | 12,847 | ||||||
Biglari Holdings, Inc. * | 15 | 5,237 | ||||||
BJ’s Restaurants, Inc. * | 371 | 16,331 | ||||||
Bloomin’ Brands, Inc. * | 558 | 10,552 | ||||||
Bob Evans Farms, Inc. | 356 | 17,391 | ||||||
Boyd Gaming Corp. * | 838 | 9,679 | ||||||
Bravo Brio Restaurant Group, Inc. * | 350 | 4,855 | ||||||
Bridgepoint Education, Inc. * | 135 | 1,706 | ||||||
Bright Horizons Family Solutions, Inc. * | 205 | 9,135 | ||||||
Buffalo Wild Wings, Inc. * | 215 | 32,095 | ||||||
Caesars Acquisition Co., Class A * | 318 | 3,320 | ||||||
Caesars Entertainment Corp. * | 511 | 6,229 | ||||||
Capella Education Co. | 123 | 8,701 | ||||||
Career Education Corp. * | 498 | 2,888 | ||||||
Chegg, Inc. * | 701 | 4,662 | ||||||
Churchill Downs, Inc. | 120 | 12,238 | ||||||
Chuy’s Holdings, Inc. * | 95 | 2,841 | ||||||
ClubCorp Holdings, Inc. | 137 | 2,611 | ||||||
Cracker Barrel Old Country Store, Inc. | 211 | 24,339 | ||||||
Del Frisco’s Restaurant Group, Inc. * | 78 | 1,811 | ||||||
Denny’s Corp. * | 1,027 | 8,853 | ||||||
Diamond Resorts International, Inc. * | 253 | 6,568 | ||||||
DineEquity, Inc. | 126 | 11,209 | ||||||
Education Management Corp. * | 158 | 94 | ||||||
Einstein Noah Restaurant Group, Inc. | 336 | 6,804 | ||||||
Fiesta Restaurant Group, Inc. * | 203 | 11,195 | ||||||
Grand Canyon Education, Inc. * | 573 | 27,447 | ||||||
Houghton Mifflin Harcourt Co. * | 952 | 19,050 | ||||||
Ignite Restaurant Group, Inc. * | 89 | 613 | ||||||
International Speedway Corp., Class A | 319 | 9,994 | ||||||
Interval Leisure Group, Inc. | 313 | 6,586 | ||||||
Isle of Capri Casinos, Inc. * | 233 | 1,731 | ||||||
ITT Educational Services, Inc. * | 274 | 2,770 | ||||||
Jack in the Box, Inc. | 473 | 33,602 | ||||||
Jamba, Inc. * | 114 | 1,522 | ||||||
K12, Inc. * | 436 | 5,406 | ||||||
Krispy Kreme Doughnuts, Inc. * | 62,136 | 1,175,613 | ||||||
La Quinta Holdings, Inc. * | 310 | 6,327 | ||||||
Liberty Tax, Inc. * | 105 | 3,978 | ||||||
Life Time Fitness, Inc. * | 467 | 26,045 | ||||||
LifeLock, Inc. * | 56,062 | 948,008 | ||||||
Marriott Vacations Worldwide Corp. | 253 | 17,568 | ||||||
Morgans Hotel Group Co. * | 666 | 5,321 | ||||||
Multimedia Games Holding Co., Inc. * | 310 | 10,819 | ||||||
Nathan’s Famous, Inc. * | 33 | 2,372 | ||||||
Papa John’s International, Inc. | 432 | 20,200 | ||||||
Penn National Gaming, Inc. * | 609 | 7,972 | ||||||
Pinnacle Entertainment, Inc. * | 764 | 19,581 | ||||||
Popeyes Louisiana Kitchen, Inc. * | 295 | 13,673 | ||||||
Red Robin Gourmet Burgers, Inc. * | 7,666 | 421,400 | ||||||
Regis Corp. | 569 | 9,662 | ||||||
Ruby Tuesday, Inc. * | 766 | 5,883 | ||||||
Ruth’s Hospitality Group, Inc. | 600 | 7,302 | ||||||
Scientific Games Corp., Class A * | 564 | 6,638 | ||||||
Sonic Corp. * | 749 | 18,882 | ||||||
Sotheby’s | 755 | 29,943 | ||||||
Speedway Motorsports, Inc. | 96 | 1,879 | ||||||
Steiner Leisure Ltd. * | 92 | 3,881 | ||||||
Strayer Education, Inc. * | 108 | 7,905 | ||||||
Texas Roadhouse, Inc. | 909 | 26,243 | ||||||
The Cheesecake Factory, Inc. | 672 | 30,872 | ||||||
The Marcus Corp. | 350 | 5,996 | ||||||
Universal Technical Institute, Inc. | 400 | 4,764 | ||||||
Vail Resorts, Inc. | 346 | 29,881 | ||||||
Weight Watchers International, Inc. * | 200 | 5,210 | ||||||
3,230,081 | ||||||||
Diversified Financials 2.5% | ||||||||
Arlington Asset Investment Corp., Class A | 280 | 7,666 | ||||||
BGC Partners, Inc., Class A | 1,391 | 11,796 | ||||||
Calamos Asset Management, Inc., Class A | 525 | 7,193 |
See financial notes 17
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Cash America International, Inc. | 385 | 18,923 | ||||||
Cohen & Steers, Inc. | 135 | 5,786 | ||||||
Cowen Group, Inc., Class A * | 568 | 2,295 | ||||||
Credit Acceptance Corp. * | 80 | 11,805 | ||||||
Diamond Hill Investment Group, Inc. | 21 | 2,814 | ||||||
Encore Capital Group, Inc. * | 184 | 8,374 | ||||||
Evercore Partners, Inc., Class A | 406 | 21,019 | ||||||
Ezcorp, Inc., Class A * | 574 | 6,475 | ||||||
FBR & Co. * | 184 | 4,442 | ||||||
Financial Engines, Inc. | 590 | 23,523 | ||||||
First Cash Financial Services, Inc. * | 374 | 22,096 | ||||||
FXCM, Inc., Class A | 648 | 10,666 | ||||||
Gain Capital Holdings, Inc. | 173,090 | 1,481,650 | ||||||
GAMCO Investors, Inc., Class A | 30 | 2,479 | ||||||
GFI Group, Inc. | 943 | 5,187 | ||||||
Green Dot Corp., Class A * | 498 | 11,902 | ||||||
Greenhill & Co., Inc. | 269 | 12,105 | ||||||
HFF, Inc., Class A | 301 | 9,475 | ||||||
INTL FCStone, Inc. * | 177 | 3,204 | ||||||
Investment Technology Group, Inc. * | 253 | 4,536 | ||||||
Janus Capital Group, Inc. | 1,351 | 20,251 | ||||||
KCG Holdings, Inc., Class A * | 700 | 7,462 | ||||||
Ladenburg Thalmann Financial Services, Inc. * | 1,958 | 8,361 | ||||||
Manning & Napier, Inc. | 300 | 4,752 | ||||||
MarketAxess Holdings, Inc. | 468 | 30,256 | ||||||
Marlin Business Services Corp. | 80 | 1,691 | ||||||
Moelis & Co., Class A | 51 | 1,742 | ||||||
Nelnet, Inc., Class A | 172 | 8,185 | ||||||
NewStar Financial, Inc. * | 255 | 3,488 | ||||||
Nicholas Financial, Inc. * | 110 | 1,343 | ||||||
PHH Corp. * | 622 | 14,735 | ||||||
PICO Holdings, Inc. * | 99,879 | 2,207,326 | ||||||
Piper Jaffray Cos. * | 273 | 15,414 | ||||||
PRA Group, Inc. * | 585 | 37,001 | ||||||
Pzena Investment Management, Inc., Class A | 326 | 3,276 | ||||||
Regional Management Corp. * | 66 | 770 | ||||||
Resource America, Inc., Class A | 210 | 2,003 | ||||||
Safeguard Scientifics, Inc. * | 390 | 7,780 | ||||||
Solar Capital Ltd. | 33,530 | 623,323 | ||||||
Springleaf Holdings, Inc. * | 210 | 7,858 | ||||||
Stifel Financial Corp. * | 778 | 36,963 | ||||||
Virtus Investment Partners, Inc. | 53 | 9,498 | ||||||
Walter Investment Management Corp. * | 369 | 8,384 | ||||||
WisdomTree Investments, Inc. * | 1,219 | 17,980 | ||||||
World Acceptance Corp. * | 106 | 7,596 | ||||||
4,782,849 | ||||||||
Energy 5.6% | ||||||||
Abraxas Petroleum Corp. * | 646 | 2,668 | ||||||
Adams Resources & Energy, Inc. | 80 | 3,364 | ||||||
Advantage Oil & Gas Ltd. * | 90,240 | 385,325 | ||||||
Alon USA Energy, Inc. | 425 | 6,817 | ||||||
Alpha Natural Resources, Inc. * | 2,093 | 4,102 | ||||||
American Eagle Energy Corp. * | 298 | 519 | ||||||
Amyris, Inc. * | 611 | 1,845 | ||||||
Apco Oil & Gas International, Inc. * | 55 | 788 | ||||||
Approach Resources, Inc. * | 179,253 | 1,774,605 | ||||||
Arch Coal, Inc. | 2,625 | 5,670 | ||||||
Basic Energy Services, Inc. * | 450 | 5,805 | ||||||
Bellatrix Exploration Ltd. * | 606,980 | 2,822,457 | ||||||
Bill Barrett Corp. * | 503 | 7,646 | ||||||
Bonanza Creek Energy, Inc. * | 279 | 12,622 | ||||||
BPZ Resources, Inc. * | 1,313 | 1,628 | ||||||
Bristow Group, Inc. | 422 | 31,186 | ||||||
C&J Energy Services, Inc. * | 525 | 10,138 | ||||||
Callon Petroleum Co. * | 610 | 4,002 | ||||||
CARBO Ceramics, Inc. | 192 | 9,921 | ||||||
Carrizo Oil & Gas, Inc. * | 492 | 25,555 | ||||||
CHC Group Ltd. *(e) | 312 | 2,097 | ||||||
Clayton Williams Energy, Inc. * | 52 | 4,323 | ||||||
Clean Energy Fuels Corp. * | 957 | 6,996 | ||||||
Cloud Peak Energy, Inc. * | 818 | 9,791 | ||||||
Comstock Resources, Inc. | 612 | 7,246 | ||||||
Contango Oil & Gas Co. * | 98 | 3,584 | ||||||
Delek US Holdings, Inc. | 511 | 17,318 | ||||||
DHT Holdings, Inc. | 570 | 3,796 | ||||||
Diamondback Energy, Inc. * | 361 | 24,707 | ||||||
Dorian LPG Ltd. * | 35,890 | 514,304 | ||||||
Emerald Oil, Inc. * | 501 | 1,593 | ||||||
Energy XXI (Bermuda) Ltd. | 1,132 | 8,705 | ||||||
Era Group, Inc. * | 33,073 | 773,577 | ||||||
Evolution Petroleum Corp. | 368 | 3,481 | ||||||
EXCO Resources, Inc. | 1,244 | 3,794 | ||||||
Exterran Holdings, Inc. | 688 | 27,059 | ||||||
Forest Oil Corp. * | 1,042 | 844 | ||||||
Forum Energy Technologies, Inc. * | 686 | 18,728 | ||||||
Frontline Ltd. * | 849 | 1,197 | ||||||
FX Energy, Inc. * | 1,211 | 3,633 | ||||||
GasLog Ltd. | 376 | 7,828 | ||||||
Gastar Exploration, Inc. * | 637 | 2,548 | ||||||
Geospace Technologies Corp. * | 127 | 3,910 | ||||||
Goodrich Petroleum Corp. * | 399 | 3,288 | ||||||
Green Plains, Inc. | 321 | 10,978 | ||||||
Gulf Island Fabrication, Inc. | 137 | 2,896 | ||||||
Gulfmark Offshore, Inc., Class A | 323 | 9,742 | ||||||
Halcon Resources Corp. * | 2,678 | 8,329 | ||||||
Hallador Energy Co. | 205 | 2,460 | ||||||
Harvest Natural Resources, Inc. * | 360 | 1,339 | ||||||
Helix Energy Solutions Group, Inc. * | 1,159 | 30,876 | ||||||
Hercules Offshore, Inc. * | 1,421 | 2,345 | ||||||
Hornbeck Offshore Services, Inc. * | 437 | 13,398 | ||||||
Independence Contract Drilling, Inc. * | 43,330 | 317,609 | ||||||
ION Geophysical Corp. * | 1,487 | 4,164 | ||||||
Isramco, Inc. * | 35 | 4,585 | ||||||
Key Energy Services, Inc. * | 1,526 | 4,639 | ||||||
Kodiak Oil & Gas Corp. * | 3,097 | 33,417 | ||||||
Magnum Hunter Resources Corp. * | 2,000 | 9,280 | ||||||
Matador Resources Co. * | 666 | 16,164 | ||||||
Matrix Service Co. * | 288 | 7,217 | ||||||
McDermott International, Inc. * | 2,022 | 7,764 | ||||||
Midstates Petroleum Co., Inc. * | 288 | 855 | ||||||
Miller Energy Resources, Inc. * | 401 | 1,395 | ||||||
Mitcham Industries, Inc. * | 316 | 3,223 | ||||||
Natural Gas Services Group, Inc. * | 230 | 5,918 | ||||||
Navios Maritime Acquisition Corp. | 707 | 2,241 | ||||||
Newpark Resources, Inc. * | 1,132 | 12,939 | ||||||
Nordic American Tankers Ltd. | 851 | 7,191 | ||||||
North Atlantic Drilling Ltd. | 402 | 2,488 | ||||||
Northern Oil & Gas, Inc. * | 674 | 7,616 |
18 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Nuverra Environmental Solutions, Inc. * | 117 | 1,108 | ||||||
Pacific Ethanol, Inc. * | 171 | 2,413 | ||||||
Panhandle Oil & Gas, Inc., Class A | 112 | 2,303 | ||||||
Parker Drilling Co. * | 1,022 | 4,538 | ||||||
Parsley Energy, Inc., Class A * | 371 | 6,296 | ||||||
PDC Energy, Inc. * | 405 | 17,707 | ||||||
Penn Virginia Corp. * | 604 | 5,176 | ||||||
PetroQuest Energy, Inc. * | 764 | 3,591 | ||||||
PHI, Inc. - Non Voting Shares * | 154 | 6,890 | ||||||
Pioneer Energy Services Corp. * | 762 | 6,995 | ||||||
Quicksilver Resources, Inc. * | 828 | 453 | ||||||
Renewable Energy Group, Inc. * | 128 | 1,348 | ||||||
Resolute Energy Corp. * | 676 | 2,352 | ||||||
REX American Resources Corp. * | 47 | 3,420 | ||||||
Rex Energy Corp. * | 550 | 4,312 | ||||||
RigNet, Inc. * | 67 | 2,911 | ||||||
Ring Energy, Inc. * | 107 | 1,840 | ||||||
Rosetta Resources, Inc. * | 594 | 22,590 | ||||||
RSP Permian, Inc. * | 34,875 | 853,391 | ||||||
Sanchez Energy Corp. * | 415 | 7,084 | ||||||
Scorpio Tankers, Inc. | 169,680 | 1,481,306 | ||||||
SEACOR Holdings, Inc. * | 12,950 | 1,067,728 | ||||||
SemGroup Corp., Class A | 502 | 38,529 | ||||||
Ship Finance International Ltd. | 846 | 14,543 | ||||||
Solazyme, Inc. * | 781 | 5,990 | ||||||
Stone Energy Corp. * | 560 | 13,720 | ||||||
Swift Energy Co. * | 615 | 4,213 | ||||||
Synergy Resources Corp. * | 526 | 6,412 | ||||||
Teekay Tankers Ltd., Class A | 1,281 | 5,431 | ||||||
Tesco Corp. | 532 | 10,129 | ||||||
TETRA Technologies, Inc. * | 1,052 | 10,026 | ||||||
TransAtlantic Petroleum Ltd. * | 161 | 1,328 | ||||||
Triangle Petroleum Corp. * | 903 | 6,998 | ||||||
VAALCO Energy, Inc. * | 727 | 5,394 | ||||||
Vantage Drilling Co. * | 927 | 897 | ||||||
W&T Offshore, Inc. | 463 | 4,209 | ||||||
Warren Resources, Inc. * | 1,494 | 5,169 | ||||||
Western Refining, Inc. | 599 | 27,308 | ||||||
Westmoreland Coal Co. * | 151 | 5,522 | ||||||
Willbros Group, Inc. * | 458 | 2,688 | ||||||
10,776,336 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
Casey’s General Stores, Inc. | 15,130 | 1,238,693 | ||||||
Ingles Markets, Inc., Class A | 68 | 1,829 | ||||||
Liberator Medical Holdings, Inc. | 440 | 1,267 | ||||||
Natural Grocers by Vitamin Cottage, Inc. * | 79 | 1,431 | ||||||
PriceSmart, Inc. | 184 | 16,382 | ||||||
Roundy’s, Inc. | 331 | 1,115 | ||||||
SpartanNash, Co. | 442 | 9,905 | ||||||
SUPERVALU, Inc. * | 1,788 | 15,430 | ||||||
The Andersons, Inc. | 307 | 19,565 | ||||||
The Chefs’ Warehouse, Inc. * | 99 | 1,769 | ||||||
The Fresh Market, Inc. * | 338 | 12,408 | ||||||
The Pantry, Inc. * | 475 | 12,241 | ||||||
United Natural Foods, Inc. * | 577 | 39,248 | ||||||
Village Super Market, Inc., Class A | 150 | 4,163 | ||||||
Weis Markets, Inc. | 99 | 4,419 | ||||||
1,379,865 | ||||||||
Food, Beverage & Tobacco 1.0% | ||||||||
22nd Century Group, Inc. * | 497 | 1,093 | ||||||
Alico, Inc. | 40 | 1,476 | ||||||
B&G Foods, Inc. | 660 | 19,444 | ||||||
Boulder Brands, Inc. * | 689 | 6,118 | ||||||
Cal-Maine Foods, Inc. | 152 | 13,344 | ||||||
Calavo Growers, Inc. | 64 | 3,107 | ||||||
Chiquita Brands International, Inc. * | 516 | 7,446 | ||||||
Coca-Cola Bottling Co. Consolidated | 28 | 2,532 | ||||||
Craft Brew Alliance, Inc. * | 211 | 2,929 | ||||||
Darling Ingredients, Inc. * | 1,786 | 31,434 | ||||||
Dean Foods Co. | 930 | 13,680 | ||||||
Diamond Foods, Inc. * | 149 | 4,492 | ||||||
Farmer Bros. Co. * | 120 | 3,499 | ||||||
Fresh Del Monte Produce, Inc. | 372 | 11,945 | ||||||
Inventure Foods, Inc. * | 208 | 2,754 | ||||||
J&J Snack Foods Corp. | 97 | 9,994 | ||||||
John B. Sanfilippo & Son, Inc. | 86 | 3,195 | ||||||
Lancaster Colony Corp. | 202 | 18,481 | ||||||
Lifeway Foods, Inc. * | 98 | 1,622 | ||||||
Limoneira Co. | 88 | 2,258 | ||||||
National Beverage Corp. * | 228 | 5,727 | ||||||
Omega Protein Corp. * | 133 | 1,922 | ||||||
Post Holdings, Inc. * | 23,867 | 895,012 | ||||||
Sanderson Farms, Inc. | 247 | 20,743 | ||||||
Seaboard Corp. * | 2 | 6,146 | ||||||
Seneca Foods Corp., Class A * | 55 | 1,478 | ||||||
Snyder’s-Lance, Inc. | 528 | 15,729 | ||||||
The Boston Beer Co., Inc., Class A * | 102 | 25,398 | ||||||
The Hain Celestial Group, Inc. * | 6,160 | 666,820 | ||||||
Tootsie Roll Industries, Inc. | 55 | 1,631 | ||||||
TreeHouse Foods, Inc. * | 435 | 37,049 | ||||||
Universal Corp. | 260 | 11,570 | ||||||
Vector Group Ltd. | 775 | 17,314 | ||||||
1,867,382 | ||||||||
Health Care Equipment & Services 9.9% | ||||||||
Abaxis, Inc. | 283 | 14,903 | ||||||
ABIOMED, Inc. * | 24,647 | 808,175 | ||||||
Acadia Healthcare Co., Inc. * | 22,419 | 1,391,099 | ||||||
Accuray, Inc. * | 991 | 6,273 | ||||||
Air Methods Corp. * | 408 | 19,270 | ||||||
Alliance HealthCare Services, Inc. * | 105 | 2,534 | ||||||
Allscripts Healthcare Solutions, Inc. * | 65,900 | 904,148 | ||||||
Almost Family, Inc. * | 220 | 6,477 | ||||||
Amedisys, Inc. * | 483 | 12,606 | ||||||
AMN Healthcare Services, Inc. * | 256 | 4,390 | ||||||
Amsurg Corp. * | 17,666 | 954,141 | ||||||
Analogic Corp. | 182 | 13,275 | ||||||
AngioDynamics, Inc. * | 540 | 9,180 | ||||||
Anika Therapeutics, Inc. * | 101 | 4,054 | ||||||
Antares Pharma, Inc. * | 750 | 1,553 | ||||||
AtriCure, Inc. * | 446 | 7,778 | ||||||
Atrion Corp. | 18 | 5,940 | ||||||
Bio-Reference Laboratories, Inc. * | 408 | 12,256 | ||||||
BioScrip, Inc. * | 891 | 5,756 | ||||||
Cantel Medical Corp. | 294 | 12,466 | ||||||
Capital Senior Living Corp. * | 175 | 3,938 | ||||||
Cardiovascular Systems, Inc. * | 244 | 7,564 |
See financial notes 19
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Castlight Health, Inc., Class B * | 117 | 1,464 | ||||||
Centene Corp. * | 10,880 | 1,008,250 | ||||||
Cerus Corp. * | 389 | 1,618 | ||||||
Chemed Corp. | 213 | 22,016 | ||||||
Computer Programs & Systems, Inc. | 180 | 11,336 | ||||||
CONMED Corp. | 284 | 11,925 | ||||||
CorVel Corp. * | 11,858 | 408,152 | ||||||
Cross Country Healthcare, Inc. * | 331 | 3,201 | ||||||
CryoLife, Inc. | 266 | 2,729 | ||||||
Cyberonics, Inc. * | 319 | 16,748 | ||||||
Cynosure, Inc., Class A * | 56 | 1,416 | ||||||
Derma Sciences, Inc. * | 127 | 1,156 | ||||||
DexCom, Inc. * | 21,973 | 987,686 | ||||||
Endologix, Inc. * | 32,826 | 374,216 | ||||||
Exactech, Inc. * | 178 | 3,791 | ||||||
ExamWorks Group, Inc. * | 430 | 16,675 | ||||||
Five Star Quality Care, Inc. * | 326 | 1,346 | ||||||
GenMark Diagnostics, Inc. * | 323 | 3,682 | ||||||
Gentiva Health Services, Inc. * | 432 | 8,510 | ||||||
Globus Medical, Inc., Class A * | 37,001 | 820,312 | ||||||
Greatbatch, Inc. * | 288 | 14,455 | ||||||
Haemonetics Corp. * | 26,343 | 993,658 | ||||||
Hanger, Inc. * | 430 | 10,290 | ||||||
HealthSouth Corp. | 21,223 | 855,924 | ||||||
HealthStream, Inc. * | 236 | 7,307 | ||||||
Healthways, Inc. * | 203 | 3,147 | ||||||
HeartWare International, Inc. * | 144 | 11,105 | ||||||
HMS Holdings Corp. * | 21,213 | 492,778 | ||||||
ICU Medical, Inc. * | 23,042 | 1,633,678 | ||||||
Insulet Corp. * | 16,623 | 717,615 | ||||||
Integra LifeSciences Holdings Corp. * | 5,103 | 260,814 | ||||||
Invacare Corp. | 171 | 2,686 | ||||||
IPC The Hospitalist Co., Inc. * | 160 | 6,666 | ||||||
Kindred Healthcare, Inc. | 501 | 10,897 | ||||||
Landauer, Inc. | 74 | 2,648 | ||||||
LDR Holding Corp. * | 85 | 2,927 | ||||||
LHC Group, Inc. * | 240 | 5,844 | ||||||
Magellan Health, Inc. * | 249 | 15,069 | ||||||
Masimo Corp. * | 717 | 18,097 | ||||||
MedAssets, Inc. * | 33,883 | 733,906 | ||||||
Medidata Solutions, Inc. * | 630 | 28,419 | ||||||
Merge Healthcare, Inc. * | 1,173 | 3,226 | ||||||
Meridian Bioscience, Inc. | 185 | 3,430 | ||||||
Merit Medical Systems, Inc. * | 791 | 11,984 | ||||||
Molina Healthcare, Inc. * | 262 | 12,744 | ||||||
MWI Veterinary Supply, Inc. * | 129 | 21,886 | ||||||
National Healthcare Corp. | 93 | 5,609 | ||||||
National Research Corp., Class A * | 104 | 1,653 | ||||||
Natus Medical, Inc. * | 500 | 17,000 | ||||||
Neogen Corp. * | 304 | 13,346 | ||||||
NuVasive, Inc. * | 555 | 22,699 | ||||||
NxStage Medical, Inc. * | 66,898 | 1,014,174 | ||||||
Omnicell, Inc. * | 424 | 13,699 | ||||||
OraSure Technologies, Inc. * | 921 | 8,243 | ||||||
Orthofix International N.V. * | 107 | 3,140 | ||||||
Owens & Minor, Inc. | 849 | 28,289 | ||||||
PharMerica Corp. * | 425 | 12,193 | ||||||
Quality Systems, Inc. | 584 | 8,824 | ||||||
Quidel Corp. * | 77 | 2,198 | ||||||
RadNet, Inc. * | 255 | 2,372 | ||||||
Rockwell Medical, Inc. * | 418 | 3,645 | ||||||
Select Medical Holdings Corp. | 656 | 9,460 | ||||||
Skilled Healthcare Group, Inc., Class A * | 239 | 1,656 | ||||||
STAAR Surgical Co. * | 395 | 3,780 | ||||||
STERIS Corp. | 22,094 | 1,365,409 | ||||||
SurModics, Inc. * | 218 | 4,720 | ||||||
Symmetry Medical, Inc. * | 235 | 2,327 | ||||||
Team Health Holdings, Inc. * | 841 | 52,596 | ||||||
TearLab Corp. * | 102,800 | 297,092 | ||||||
The Ensign Group, Inc. | 165 | 6,389 | ||||||
The Providence Service Corp. * | 220 | 9,720 | ||||||
The Spectranetics Corp. * | 27,505 | 873,834 | ||||||
Thoratec Corp. * | 15,819 | 429,960 | ||||||
Tornier N.V. * | 241 | 6,736 | ||||||
TransEnterix, Inc. * | 315 | 1,292 | ||||||
Triple-S Management Corp., Class B * | 424 | 9,387 | ||||||
TriVascular Technologies, Inc. * | 150 | 1,988 | ||||||
Unilife Corp. * | 233,095 | 855,459 | ||||||
Universal American Corp. * | 375 | 3,495 | ||||||
Utah Medical Products, Inc. | 34 | 1,931 | ||||||
Vascular Solutions, Inc. * | 325 | 9,558 | ||||||
Vocera Communications, Inc. * | 111 | 1,149 | ||||||
Volcano Corp. * | 804 | 8,136 | ||||||
WellCare Health Plans, Inc. * | 451 | 30,609 | ||||||
West Pharmaceutical Services, Inc. | 610 | 31,262 | ||||||
Wright Medical Group, Inc. * | 547 | 17,296 | ||||||
Zeltiq Aesthetics, Inc. * | 177 | 4,538 | ||||||
18,992,068 | ||||||||
Household & Personal Products 0.0% | ||||||||
Central Garden & Pet Co., Class A * | 440 | 3,780 | ||||||
Elizabeth Arden, Inc. * | 249 | 4,084 | ||||||
Harbinger Group, Inc. * | 791 | 10,394 | ||||||
IGI Laboratories, Inc. * | 309 | 3,031 | ||||||
Inter Parfums, Inc. | 107 | 3,039 | ||||||
Medifast, Inc. * | 250 | 7,935 | ||||||
Nature’s Sunshine Products, Inc. | 105 | 1,564 | ||||||
Nutraceutical International Corp. * | 84 | 1,888 | ||||||
Oil-Dri Corp. of America | 61 | 1,841 | ||||||
Orchids Paper Products Co. | 165 | 4,745 | ||||||
Revlon, Inc., Class A * | 69 | 2,367 | ||||||
Synutra International, Inc. * | 329 | 2,083 | ||||||
USANA Health Sciences, Inc. * | 63 | 7,181 | ||||||
WD-40 Co. | 99 | 7,590 | ||||||
61,522 | ||||||||
Insurance 1.8% | ||||||||
Ambac Financial Group, Inc. * | 456 | 10,433 | ||||||
American Equity Investment Life Holding Co. | 960 | 24,778 | ||||||
AMERISAFE, Inc. | 15,681 | 653,898 | ||||||
AmTrust Financial Services, Inc. | 366 | 16,422 | ||||||
Argo Group International Holdings Ltd. | 169 | 9,430 | ||||||
Baldwin & Lyons, Inc., Class B | 70 | 1,884 | ||||||
Citizens, Inc. * | 419 | 3,055 | ||||||
CNO Financial Group, Inc. | 2,506 | 45,434 | ||||||
Crawford & Co., Class B | 204 | 2,077 | ||||||
Donegal Group, Inc., Class A | 120 | 1,898 |
20 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
eHealth, Inc. * | 289 | 7,211 | ||||||
EMC Insurance Group, Inc. | 64 | 2,051 | ||||||
Employers Holdings, Inc. | 433 | 8,829 | ||||||
Enstar Group Ltd. * | 83 | 12,290 | ||||||
FBL Financial Group, Inc., Class A | 152 | 7,536 | ||||||
Federated National Holding Co. | 70 | 2,342 | ||||||
First American Financial Corp. | 1,164 | 35,292 | ||||||
Global Indemnity plc * | 72 | 2,087 | ||||||
Greenlight Capital Re Ltd., Class A * | 251 | 8,145 | ||||||
Hallmark Financial Services, Inc. * | 183 | 2,134 | ||||||
HCI Group, Inc. | 209 | 10,626 | ||||||
Hilltop Holdings, Inc. * | 738 | 16,258 | ||||||
Horace Mann Educators Corp. | 497 | 15,114 | ||||||
Independence Holding Co. | 146 | 2,066 | ||||||
Infinity Property & Casualty Corp. | 74 | 5,403 | ||||||
Kansas City Life Insurance Co. | 45 | 2,233 | ||||||
Kemper Corp. | 333 | 12,271 | ||||||
Maiden Holdings Ltd. | 628 | 7,505 | ||||||
Meadowbrook Insurance Group, Inc. | 979 | 6,236 | ||||||
Montpelier Re Holdings Ltd. | 573 | 18,989 | ||||||
National General Holdings Corp. | 189 | 3,544 | ||||||
National Interstate Corp. | 57 | 1,621 | ||||||
National Western Life Insurance Co., Class A | 9 | 2,439 | ||||||
OneBeacon Insurance Group Ltd., Class A | 425 | 6,770 | ||||||
Platinum Underwriters Holdings Ltd. | 13,946 | 873,438 | ||||||
Primerica, Inc. | 29,535 | 1,510,715 | ||||||
RLI Corp. | 538 | 26,679 | ||||||
Safety Insurance Group, Inc. | 100 | 6,238 | ||||||
Selective Insurance Group, Inc. | 614 | 15,853 | ||||||
State Auto Financial Corp. | 93 | 1,946 | ||||||
Stewart Information Services Corp. | 370 | 13,068 | ||||||
Symetra Financial Corp. | 750 | 17,775 | ||||||
The Navigators Group, Inc. * | 89 | 6,060 | ||||||
Third Point Reinsurance Ltd. * | 255 | 3,902 | ||||||
United Fire Group, Inc. | 216 | 7,016 | ||||||
Universal Insurance Holdings, Inc. | 206 | 3,605 | ||||||
3,454,596 | ||||||||
Materials 3.8% | ||||||||
A. Schulman, Inc. | 317 | 11,225 | ||||||
A.M. Castle & Co. * | 183 | 1,345 | ||||||
Advanced Emissions Solutions, Inc. * | 178 | 3,599 | ||||||
AK Steel Holding Corp. * | 1,714 | 12,975 | ||||||
Allied Nevada Gold Corp. * | 1,391 | 1,933 | ||||||
American Vanguard Corp. | 404 | 4,662 | ||||||
Ampco-Pittsburgh Corp. | 197 | 4,293 | ||||||
Axiall Corp. | 860 | 34,658 | ||||||
Balchem Corp. | 400 | 25,880 | ||||||
Berry Plastics Group, Inc. * | 856 | 22,273 | ||||||
Boise Cascade Co. * | 248 | 8,943 | ||||||
Calgon Carbon Corp. * | 747 | 15,709 | ||||||
Century Aluminum Co. * | 784 | 22,956 | ||||||
Chase Corp. | 76 | 2,726 | ||||||
Chemtura Corp. * | 913 | 21,264 | ||||||
Clearwater Paper Corp. * | 251 | 16,152 | ||||||
Coeur Mining, Inc. * | 1,259 | 4,658 | ||||||
Commercial Metals Co. | 958 | 16,564 | ||||||
Deltic Timber Corp. | 17,456 | 1,136,211 | ||||||
Ferro Corp. * | 1,023 | 13,422 | ||||||
Flotek Industries, Inc. * | 561 | 12,432 | ||||||
FutureFuel Corp. | 348 | 4,635 | ||||||
Globe Specialty Metals, Inc. | 678 | 12,753 | ||||||
Gold Resource Corp. | 374 | 1,455 | ||||||
Graphic Packaging Holding Co. * | 2,902 | 35,201 | ||||||
Greif, Inc., Class A | 21,700 | 956,102 | ||||||
H.B. Fuller Co. | 575 | 24,133 | ||||||
Handy & Harman Ltd. * | 99 | 3,496 | ||||||
Hawkins, Inc. | 42 | 1,617 | ||||||
Haynes International, Inc. | 111 | 5,160 | ||||||
Headwaters, Inc. * | 639 | 8,115 | ||||||
Hecla Mining Co. | 2,963 | 6,459 | ||||||
Horsehead Holding Corp. * | 490 | 7,698 | ||||||
Innophos Holdings, Inc. | 307 | 17,499 | ||||||
Innospec, Inc. | 22,459 | 906,670 | ||||||
Intrepid Potash, Inc. * | 309 | 4,156 | ||||||
Kaiser Aluminum Corp. | 195 | 13,562 | ||||||
KapStone Paper & Packaging Corp. * | 1,000 | 30,760 | ||||||
KMG Chemicals, Inc. | 78 | 1,381 | ||||||
Koppers Holdings, Inc. | 28,548 | 1,127,075 | ||||||
Kraton Performance Polymers, Inc. * | 526 | 9,410 | ||||||
Landec Corp. * | 485 | 6,106 | ||||||
Louisiana-Pacific Corp. * | 1,580 | 23,068 | ||||||
LSB Industries, Inc. * | 286 | 10,734 | ||||||
Materion Corp. | 153 | 6,036 | ||||||
Minerals Technologies, Inc. | 298 | 22,860 | ||||||
Molycorp, Inc. * | 1,237 | 1,707 | ||||||
Myers Industries, Inc. | 508 | 7,590 | ||||||
Neenah Paper, Inc. | 178 | 10,860 | ||||||
Noranda Aluminum Holding Corp. | 508 | 2,240 | ||||||
Olin Corp. | 775 | 18,786 | ||||||
OM Group, Inc. | 319 | 8,304 | ||||||
OMNOVA Solutions, Inc. * | 246 | 1,729 | ||||||
P.H. Glatfelter Co. | 627 | 15,819 | ||||||
PolyOne Corp. | 1,132 | 41,895 | ||||||
Quaker Chemical Corp. | 100 | 8,208 | ||||||
Rentech, Inc. * | 2,658 | 4,226 | ||||||
Resolute Forest Products, Inc. * | 773 | 14,347 | ||||||
RTI International Metals, Inc. * | 324 | 7,630 | ||||||
Schnitzer Steel Industries, Inc., Class A | 373 | 8,784 | ||||||
Schweitzer-Mauduit International, Inc. | 284 | 12,229 | ||||||
Senomyx, Inc. * | 388 | 3,073 | ||||||
Sensient Technologies Corp. | 23,269 | 1,377,059 | ||||||
Stepan Co. | 149 | 6,598 | ||||||
Stillwater Mining Co. * | 1,215 | 15,953 | ||||||
SunCoke Energy, Inc. * | 956 | 22,848 | ||||||
Taminco Corp. * | 131 | 3,392 | ||||||
Trecora Resources * | 525 | 6,904 | ||||||
Tredegar Corp. | 361 | 6,866 | ||||||
Tronox Ltd., Class A | 498 | 12,042 | ||||||
UFP Technologies, Inc. * | 86 | 1,894 | ||||||
United States Lime & Minerals, Inc. | 34 | 2,384 | ||||||
Universal Stainless & Alloy Products, Inc. * | 115 | 2,957 | ||||||
US Concrete, Inc. * | 109 | 2,692 | ||||||
US Silica Holdings, Inc. | 585 | 26,267 | ||||||
Walter Energy, Inc. | 517 | 1,246 | ||||||
Wausau Paper Corp. | 522 | 5,163 | ||||||
Worthington Industries, Inc. | 533 | 20,600 |
See financial notes 21
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Zep, Inc. | 59,006 | 947,636 | ||||||
7,269,949 | ||||||||
Media 0.7% | ||||||||
AH Belo Corp., Class A | 155 | 1,784 | ||||||
AMC Entertainment Holdings, Inc., Class A | 133 | 3,378 | ||||||
Carmike Cinemas, Inc. * | 244 | 7,820 | ||||||
Central European Media Enterprises Ltd., Class A * | 775 | 1,883 | ||||||
Cinedigm Corp., Class A * | 686 | 1,063 | ||||||
Crown Media Holdings, Inc., Class A * | 678 | 2,366 | ||||||
Cumulus Media, Inc., Class A * | 1,288 | 4,972 | ||||||
Daily Journal Corp. * | 27 | 4,932 | ||||||
Dex Media, Inc. * | 151 | 1,176 | ||||||
Entercom Communications Corp., Class A * | 610 | 6,271 | ||||||
Entravision Communications Corp., Class A | 301 | 1,553 | ||||||
Eros International plc * | 135 | 2,492 | ||||||
Global Sources Ltd. * | 230 | 1,686 | ||||||
Gray Television, Inc. * | 475 | 4,389 | ||||||
Harte-Hanks, Inc. | 611 | 3,978 | ||||||
Hemisphere Media Group, Inc. * | 122 | 1,562 | ||||||
Journal Communications, Inc., Class A * | 904 | 8,868 | ||||||
Lee Enterprises, Inc. * | 514 | 1,917 | ||||||
Loral Space & Communications, Inc. * | 92 | 7,038 | ||||||
MDC Partners, Inc., Class A | 381 | 7,887 | ||||||
Media General, Inc. * | 488 | 7,291 | ||||||
Meredith Corp. | 416 | 21,690 | ||||||
National CineMedia, Inc. | 417 | 6,630 | ||||||
New Media Investment Group, Inc. | 54,623 | 1,041,114 | ||||||
Nexstar Broadcasting Group, Inc., Class A | 390 | 17,597 | ||||||
Radio One, Inc., Class D * | 373 | 929 | ||||||
ReachLocal, Inc. * | 133 | 602 | ||||||
Reading International, Inc., Class A * | 278 | 2,772 | ||||||
Rentrak Corp. * | 82 | 6,303 | ||||||
Saga Communications, Inc., Class A | 146 | 5,855 | ||||||
Scholastic Corp. | 400 | 13,924 | ||||||
SFX Entertainment, Inc. * | 382 | 1,963 | ||||||
Sinclair Broadcast Group, Inc., Class A | 842 | 24,460 | ||||||
Sizmek, Inc. * | 490 | 2,808 | ||||||
The E.W. Scripps Co., Class A * | 356 | 6,835 | ||||||
The McClatchy Co., Class A * | 578 | 2,058 | ||||||
The New York Times Co., Class A | 1,200 | 15,408 | ||||||
Time, Inc. * | 1,143 | 25,820 | ||||||
World Wrestling Entertainment, Inc., Class A | 170 | 2,100 | ||||||
1,283,174 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.4% | ||||||||
ACADIA Pharmaceuticals, Inc. * | 837 | 23,185 | ||||||
Accelerate Diagnostics, Inc. * | 200 | 4,344 | ||||||
Acceleron Pharma, Inc. * | 145 | 5,362 | ||||||
AcelRx Pharmaceuticals, Inc. * | 200 | 1,326 | ||||||
Achillion Pharmaceuticals, Inc. * | 1,341 | 15,757 | ||||||
Acorda Therapeutics, Inc. * | 454 | 15,808 | ||||||
Actinium Pharmaceuticals, Inc. * | 203 | 1,435 | ||||||
Aegerion Pharmaceuticals, Inc. * | 290 | 5,855 | ||||||
Aerie Pharmaceuticals, Inc. * | 85 | 2,144 | ||||||
Affymetrix, Inc. * | 895 | 8,064 | ||||||
Agenus, Inc. * | 525 | 1,565 | ||||||
Agios Pharmaceuticals, Inc. * | 137 | 11,512 | ||||||
Akebia Therapeutics, Inc. * | 66 | 855 | ||||||
Akorn, Inc. * | 26,242 | 1,169,081 | ||||||
Albany Molecular Research, Inc. * | 150 | 3,489 | ||||||
Alder Biopharmaceuticals, Inc. * | 97 | 1,737 | ||||||
Alimera Sciences, Inc. * | 304 | 1,733 | ||||||
AMAG Pharmaceuticals, Inc. * | 61,105 | 2,017,076 | ||||||
Ampio Pharmaceuticals, Inc. * | 296 | 1,148 | ||||||
Anacor Pharmaceuticals, Inc. * | 306 | 8,999 | ||||||
ANI Pharmaceuticals, Inc. * | 59 | 2,004 | ||||||
Applied Genetic Technologies Corp. * | 57 | 1,146 | ||||||
Aratana Therapeutics, Inc. * | 208 | 2,330 | ||||||
Arena Pharmaceuticals, Inc. * | 2,745 | 11,968 | ||||||
ARIAD Pharmaceuticals, Inc. * | 1,556 | 9,274 | ||||||
Array BioPharma, Inc. * | 1,190 | 4,272 | ||||||
Arrowhead Research Corp. * | 512 | 3,338 | ||||||
Auspex Pharmaceuticals, Inc. * | 83 | 2,249 | ||||||
Auxilium Pharmaceuticals, Inc. * | 736 | 23,677 | ||||||
Avanir Pharmaceuticals, Inc. * | 2,289 | 29,620 | ||||||
Bio-Path Holdings, Inc. * | 575 | 1,679 | ||||||
BioCryst Pharmaceuticals, Inc. * | 681 | 7,981 | ||||||
BioDelivery Sciences International, Inc. * | 653 | 11,362 | ||||||
BioTime, Inc. * | 427 | 1,448 | ||||||
Bluebird Bio, Inc. * | �� | 174 | 7,306 | |||||
Cambrex Corp. * | 360 | 7,589 | ||||||
Cancer Genetics, Inc. * | 46,580 | 344,692 | ||||||
Catalent, Inc. * | 305 | 7,939 | ||||||
Celldex Therapeutics, Inc. * | 1,074 | 17,989 | ||||||
Cellular Dynamics International, Inc. * | 122 | 948 | ||||||
Cempra, Inc. * | 296 | 4,026 | ||||||
Cepheid * | 857 | 45,430 | ||||||
Charles River Laboratories International, Inc. * | 32,100 | 2,027,436 | ||||||
ChemoCentryx, Inc. * | 121 | 680 | ||||||
Chimerix, Inc. * | 251 | 7,791 | ||||||
Clovis Oncology, Inc. * | 235 | 14,020 | ||||||
Corcept Therapeutics, Inc. * | 907 | 2,948 | ||||||
CTI BioPharma, Corp. * | 1,000 | 2,440 | ||||||
Cytokinetics, Inc. * | 140 | 514 | ||||||
Cytori Therapeutics, Inc. * | 742 | 385 | ||||||
CytRx Corp. * | 506 | 1,447 | ||||||
Dendreon Corp. * | 2,516 | 2,464 | ||||||
Depomed, Inc. * | 764 | 11,766 | ||||||
Durata Therapeutics, Inc. * | 244 | 5,863 | ||||||
Dyax Corp. * | 1,483 | 18,345 | ||||||
Dynavax Technologies Corp. * | 2,128 | 3,490 | ||||||
Emergent Biosolutions, Inc. * | 323 | 7,306 | ||||||
Enanta Pharmaceuticals, Inc. * | 93 | 3,999 | ||||||
Endocyte, Inc. * | 330 | 1,975 | ||||||
Enzo Biochem, Inc. * | 358 | 1,869 | ||||||
Epizyme, Inc. * | 125 | 3,316 | ||||||
Exact Sciences Corp. * | 972 | 23,396 |
22 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Exelixis, Inc. * | 2,672 | 4,542 | ||||||
Five Prime Therapeutics, Inc. * | 157 | 2,047 | ||||||
Fluidigm Corp. * | 308 | 8,932 | ||||||
Foundation Medicine, Inc. * | 105 | 2,717 | ||||||
Galectin Therapeutics, Inc. * | 188 | 1,019 | ||||||
Galena Biopharma, Inc. * | 1,426 | 2,923 | ||||||
Genomic Health, Inc. * | 321 | 11,665 | ||||||
Geron Corp. * | 1,639 | 3,655 | ||||||
Halozyme Therapeutics, Inc. * | 1,180 | 11,352 | ||||||
Heron Therapeutics, Inc. * | 194 | 1,711 | ||||||
Horizon Pharma plc * | 65,134 | 842,834 | ||||||
Hyperion Therapeutics, Inc. * | 147 | 3,572 | ||||||
ICON plc * | 33,240 | 1,748,756 | ||||||
Idera Pharmaceuticals, Inc. * | 589 | 1,502 | ||||||
ImmunoGen, Inc. * | 1,054 | 9,760 | ||||||
Immunomedics, Inc. * | 1,236 | 4,882 | ||||||
Impax Laboratories, Inc. * | 865 | 25,059 | ||||||
Infinity Pharmaceuticals, Inc. * | 426 | 5,802 | ||||||
Inovio Pharmaceuticals, Inc. * | 539 | 6,123 | ||||||
Insmed, Inc. * | 337 | 4,782 | ||||||
Insys Therapeutics, Inc. * | 136 | 5,532 | ||||||
Intra-Cellular Therapies, Inc. * | 139 | 2,154 | ||||||
Intrexon Corp. * | 326 | 7,276 | ||||||
Ironwood Pharmaceuticals, Inc. * | 1,156 | 16,207 | ||||||
Isis Pharmaceuticals, Inc. * | 1,187 | 54,673 | ||||||
Karyopharm Therapeutics, Inc. * | 111 | 4,560 | ||||||
Keryx Biopharmaceuticals, Inc. * | 1,338 | 22,545 | ||||||
Kindred Biosciences, Inc. * | 95 | 871 | ||||||
KYTHERA Biopharmaceuticals, Inc. * | 154 | 5,428 | ||||||
Lannett Co., Inc. * | 12,680 | 719,210 | ||||||
Lexicon Pharmaceuticals, Inc. * | 2,643 | 3,832 | ||||||
Ligand Pharmaceuticals, Inc. * | 171 | 9,451 | ||||||
Luminex Corp. * | 628 | 11,932 | ||||||
MacroGenics, Inc. * | 170 | 3,619 | ||||||
MannKind Corp. * | 2,261 | 13,589 | ||||||
Merrimack Pharmaceuticals, Inc. * | 1,070 | 9,812 | ||||||
MiMedx Group, Inc. * | 897 | 9,131 | ||||||
Mirati Therapeutics, Inc. * | 77 | 1,291 | ||||||
Momenta Pharmaceuticals, Inc. * | 705 | 7,692 | ||||||
Myriad Genetics, Inc. * | 17,120 | 676,069 | ||||||
NanoViricides, Inc. * | 389 | 1,482 | ||||||
Navidea Biopharmaceuticals, Inc. * | 1,179 | 1,592 | ||||||
Nektar Therapeutics * | 1,261 | 17,389 | ||||||
NeoStem, Inc. * | 266 | 1,365 | ||||||
Neuralstem, Inc. * | 613 | 1,686 | ||||||
Neurocrine Biosciences, Inc. * | 767 | 14,205 | ||||||
NewLink Genetics Corp. * | 187 | 6,106 | ||||||
Northwest Biotherapeutics, Inc. * | 349 | 1,836 | ||||||
Novavax, Inc. * | 2,146 | 12,018 | ||||||
NPS Pharmaceuticals, Inc. * | 19,752 | 541,205 | ||||||
Ohr Pharmaceutical, Inc. * | 230 | 1,668 | ||||||
Omeros Corp. * | 332 | 5,501 | ||||||
OncoMed Pharmaceuticals, Inc. * | 102 | 2,119 | ||||||
Oncothyreon, Inc. * | 612 | 1,102 | ||||||
Ophthotech Corp. * | 140 | 5,841 | ||||||
OPKO Health, Inc. * | 2,159 | 18,028 | ||||||
Orexigen Therapeutics, Inc. * | 1,210 | 4,913 | ||||||
Organovo Holdings, Inc. * | 547 | 3,577 | ||||||
Osiris Therapeutics, Inc. * | 165 | 2,249 | ||||||
OvaScience, Inc. * | 118 | 2,305 | ||||||
Pacific Biosciences of California, Inc. * | 687 | 4,507 | ||||||
Pacira Pharmaceuticals, Inc. * | 10,705 | 993,638 | ||||||
Pain Therapeutics, Inc. * | 314 | 546 | ||||||
PAREXEL International Corp. * | 17,616 | 956,725 | ||||||
PDL BioPharma, Inc. | 1,198 | 10,219 | ||||||
Peregrine Pharmaceuticals, Inc. * | 2,024 | 3,238 | ||||||
Pernix Therapeutics Holdings, Inc. * | 319 | 3,110 | ||||||
Phibro Animal Health Corp., Class A | 28,185 | 730,555 | ||||||
Portola Pharmaceuticals, Inc. * | 338 | 9,633 | ||||||
POZEN, Inc. * | 383 | 3,474 | ||||||
Prestige Brands Holdings, Inc. * | 728 | 25,786 | ||||||
Progenics Pharmaceuticals, Inc. * | 448 | 2,164 | ||||||
Prothena Corp. plc * | 221 | 4,847 | ||||||
PTC Therapeutics, Inc. * | 208 | 8,501 | ||||||
Puma Biotechnology, Inc. * | 242 | 60,645 | ||||||
Raptor Pharmaceutical Corp. * | 744 | 7,150 | ||||||
Receptos, Inc. * | 147 | 15,237 | ||||||
Regulus Therapeutics, Inc. * | 229 | 4,571 | ||||||
Relypsa, Inc. * | 149 | 3,065 | ||||||
Repligen Corp. * | 220 | 5,548 | ||||||
Repros Therapeutics, Inc. * | 264 | 1,674 | ||||||
Retrophin, Inc. * | 196 | 1,897 | ||||||
Revance Therapeutics, Inc. * | 57 | 1,149 | ||||||
Rigel Pharmaceuticals, Inc. * | 997 | 1,974 | ||||||
Sagent Pharmaceuticals, Inc. * | 206 | 6,518 | ||||||
Sangamo BioSciences, Inc. * | 652 | 7,915 | ||||||
Sarepta Therapeutics, Inc. * | 472 | 7,632 | ||||||
SciClone Pharmaceuticals, Inc. * | 344 | 2,628 | ||||||
Sequenom, Inc. * | 1,119 | 3,659 | ||||||
Spectrum Pharmaceuticals, Inc. * | 960 | 7,277 | ||||||
Stemline Therapeutics, Inc. * | 66 | 1,016 | ||||||
Sunesis Pharmaceuticals, Inc. * | 599 | 1,018 | ||||||
Supernus Pharmaceuticals, Inc. * | 327 | 2,626 | ||||||
Synageva BioPharma Corp. * | 221 | 16,739 | ||||||
Synergy Pharmaceuticals, Inc. * | 849 | 2,912 | ||||||
Synta Pharmaceuticals Corp. * | 932 | 2,759 | ||||||
TESARO, Inc. * | 176 | 4,896 | ||||||
Tetraphase Pharmaceuticals, Inc. * | 213 | 5,091 | ||||||
TG Therapeutics, Inc. * | 269 | 2,956 | ||||||
The Medicines Co. * | 11,852 | 300,093 | ||||||
TherapeuticsMD, Inc. * | 1,025 | 4,551 | ||||||
Theravance Biopharma, Inc. * | 214 | 3,916 | ||||||
Theravance, Inc. | 782 | 12,528 | ||||||
Threshold Pharmaceuticals, Inc. * | 1,100 | 3,223 | ||||||
Ultragenyx Pharmaceutical, Inc. * | 70 | 3,291 | ||||||
Vanda Pharmaceuticals, Inc. * | 478 | 5,741 | ||||||
Verastem, Inc. * | 132 | 1,253 | ||||||
Versartis, Inc. * | 63 | 1,254 | ||||||
Vital Therapies, Inc. * | 63 | 1,087 | ||||||
VIVUS, Inc. * | 1,152 | 3,905 | ||||||
Xencor, Inc. * | 161 | 1,737 | ||||||
XenoPort, Inc. * | 356 | 2,414 | ||||||
XOMA Corp. * | 1,300 | 5,577 | ||||||
ZIOPHARM Oncology, Inc. * | 1,259 | 4,180 | ||||||
Zogenix, Inc. * | 1,020 | 1,295 | ||||||
14,216,428 | ||||||||
Real Estate 4.6% | ||||||||
Acadia Realty Trust | 578 | 18,034 | ||||||
AG Mortgage Investment Trust, Inc. | 79 | 1,507 |
See financial notes 23
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Agree Realty Corp. | 205 | 6,275 | ||||||
Alexander & Baldwin, Inc. | 485 | 19,415 | ||||||
Alexander’s, Inc. | 13 | 5,746 | ||||||
Altisource Asset Management Corp. * | 14 | 7,560 | ||||||
Altisource Portfolio Solutions S.A. * | 138 | 10,303 | ||||||
Altisource Residential Corp. | 549 | 12,748 | ||||||
American Assets Trust, Inc. | 432 | 16,563 | ||||||
American Capital Mortgage Investment Corp. | 401 | 7,856 | ||||||
American Realty Capital Healthcare Trust, Inc. | 1,536 | 17,357 | ||||||
American Residential Properties, Inc. * | 107 | 2,033 | ||||||
Anworth Mortgage Asset Corp. | 1,734 | 8,999 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 505 | 8,302 | ||||||
Apollo Residential Mortgage, Inc. | 435 | 7,256 | ||||||
Ares Commercial Real Estate Corp. | 400 | 4,864 | ||||||
ARMOUR Residential REIT, Inc. | 4,721 | 18,695 | ||||||
Ashford Hospitality Prime, Inc. | 188 | 3,258 | ||||||
Ashford Hospitality Trust | 944 | 10,667 | ||||||
Associated Estates Realty Corp. | 410 | 8,007 | ||||||
AV Homes, Inc. * | 99 | 1,484 | ||||||
Aviv REIT, Inc. | 151 | 5,093 | ||||||
Campus Crest Communities, Inc. | 754 | 4,780 | ||||||
Capstead Mortgage Corp. | 1,244 | 15,811 | ||||||
CareTrust REIT, Inc. * | 165 | 2,562 | ||||||
Cedar Realty Trust, Inc. | 1,016 | 6,990 | ||||||
Chambers Street Properties | 2,296 | 18,850 | ||||||
Chatham Lodging Trust | 243 | 6,226 | ||||||
Chesapeake Lodging Trust | 702 | 23,194 | ||||||
Colony Financial, Inc. | 1,436 | 31,994 | ||||||
Consolidated-Tomoka Land Co. | 43 | 2,244 | ||||||
CorEnergy Infrastructure Trust, Inc. | 233 | 1,750 | ||||||
CoreSite Realty Corp. | 342 | 12,661 | ||||||
Cousins Properties, Inc. | 1,917 | 24,940 | ||||||
CubeSmart | 1,627 | 34,248 | ||||||
CyrusOne, Inc. | 81 | 2,212 | ||||||
CYS Investments, Inc. | 2,209 | 19,726 | ||||||
DCT Industrial Trust, Inc. | 2,844 | 24,373 | ||||||
DiamondRock Hospitality Co. | 68,658 | 985,242 | ||||||
DuPont Fabros Technology, Inc. | 773 | 23,940 | ||||||
Dynex Capital, Inc. | 582 | 4,900 | ||||||
EastGroup Properties, Inc. | 304 | 20,933 | ||||||
Education Realty Trust, Inc. | 83,265 | 937,564 | ||||||
Empire State Realty Trust, Inc., Class A | 745 | 11,890 | ||||||
EPR Properties | 484 | 27,152 | ||||||
Equity One Ltd | 911 | 21,864 | ||||||
Excel Trust, Inc. | 688 | 8,944 | ||||||
FelCor Lodging Trust, Inc. | 1,531 | 16,428 | ||||||
First Industrial Realty Trust, Inc. | 1,384 | 27,030 | ||||||
First Potomac Realty Trust | 864 | 10,800 | ||||||
Forestar Group, Inc. * | 464 | 8,097 | ||||||
Franklin Street Properties Corp. | 1,246 | 14,940 | ||||||
Getty Realty Corp. | 457 | 8,505 | ||||||
Gladstone Commercial Corp. | 438 | 7,928 | ||||||
Glimcher Realty Trust | 1,953 | 26,815 | ||||||
Government Properties Income Trust | 948 | 21,633 | ||||||
Gramercy Property Trust, Inc. | 1,200 | 7,500 | ||||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 148 | 2,069 | ||||||
Hatteras Financial Corp. | 898 | 17,098 | ||||||
Healthcare Realty Trust, Inc. | 1,244 | 32,929 | ||||||
Hersha Hospitality Tr | 1,749 | 12,750 | ||||||
Highwoods Properties, Inc. | 1,104 | 47,328 | ||||||
Hudson Pacific Properties, Inc. | 811 | 22,148 | ||||||
Inland Real Estate Corp. | 1,250 | 13,263 | ||||||
Invesco Mortgage Capital, Inc. | 1,531 | 25,323 | ||||||
Investors Real Estate Trust | 823 | 6,913 | ||||||
iStar Financial, Inc. * | 1,209 | 17,156 | ||||||
Kennedy-Wilson Holdings, Inc. | 730 | 19,776 | ||||||
Kite Realty Group Trust | 441 | 11,417 | ||||||
LaSalle Hotel Properties | 29,821 | 1,169,281 | ||||||
Lexington Realty Trust | 1,679 | 18,402 | ||||||
LTC Properties, Inc. | 485 | 20,341 | ||||||
Mack-Cali Realty Corp. | 841 | 15,752 | ||||||
Medical Properties Trust, Inc. | 1,708 | 23,041 | ||||||
Monmouth Real Estate Investment Corp. | 752 | 8,422 | ||||||
National Health Investors, Inc. | 278 | 18,323 | ||||||
New Residential Investment Corp. | 1,149 | 14,225 | ||||||
New York Mortgage Trust, Inc. | 1,050 | 8,201 | ||||||
New York REIT, Inc. | 1,357 | 15,226 | ||||||
Newcastle Investment Corp. | 92,848 | 2,242,279 | ||||||
Owens Realty Mortgage, Inc. | 118 | 1,764 | ||||||
Parkway Properties, Inc. | 583 | 11,689 | ||||||
Pebblebrook Hotel Trust | 760 | 32,376 | ||||||
Pennsylvania Real Estate Investment Trust | 629 | 13,479 | ||||||
PennyMac Mortgage Investment Trust | 872 | 18,826 | ||||||
Physicians Realty Trust | 281 | 4,311 | ||||||
Potlatch Corp. | 420 | 18,476 | ||||||
PS Business Parks, Inc. | 150 | 12,633 | ||||||
QTS Realty Trust, Inc., Class A | 97 | 3,416 | ||||||
RAIT Financial Trust | 1,290 | 9,456 | ||||||
Ramco-Gershenson Properties Trust | 1,123 | 19,630 | ||||||
Redwood Trust, Inc. | 711 | 13,360 | ||||||
Resource Capital Corp. | 1,460 | 7,723 | ||||||
Retail Opportunity Investments Corp. | 927 | 15,147 | ||||||
Rexford Industrial Realty, Inc. | 216 | 3,337 | ||||||
RLJ Lodging Trust | 1,430 | 46,075 | ||||||
Rouse Properties, Inc. | 488 | 8,886 | ||||||
Ryman Hospitality Properties, Inc. | 493 | 24,330 | ||||||
Sabra Health Care REIT, Inc. | 591 | 16,885 | ||||||
Saul Centers, Inc. | 205 | 11,265 | ||||||
Select Income REIT | 316 | 7,745 | ||||||
Silver Bay Realty Trust Corp. | 373 | 6,315 | ||||||
Sovran Self Storage, Inc. | 372 | 31,653 | ||||||
STAG Industrial, Inc. | 633 | 15,445 | ||||||
Starwood Waypoint Residential Trust | 293 | 7,671 | ||||||
Strategic Hotels & Resorts, Inc. * | 2,342 | 30,095 | ||||||
Summit Hotel Properties, Inc. | 161,980 | 1,885,447 | ||||||
Sun Communities, Inc. | 453 | 26,260 | ||||||
Sunstone Hotel Investors, Inc. | 1,913 | 29,288 | ||||||
Tejon Ranch Co. * | 159 | 4,799 | ||||||
Terreno Realty Corp. | 337 | 7,097 | ||||||
The Geo Group, Inc. | 928 | 37,064 | ||||||
The St. Joe Co. * | 471 | 9,020 | ||||||
Trade Street Residential, Inc. | 265 | 1,829 | ||||||
UMH Properties, Inc. | 706 | 7,131 |
24 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Universal Health Realty Income Trust | 106 | 5,136 | ||||||
Urstadt Biddle Properties, Inc., Class A | 224 | 4,845 | ||||||
Washington Real Estate Investment Trust | 491 | 13,876 | ||||||
Western Asset Mortgage Capital Corp. | 145 | 2,178 | ||||||
Whitestone REIT | 404 | 6,060 | ||||||
8,840,369 | ||||||||
Retailing 3.4% | ||||||||
Aeropostale, Inc. * | 1,044 | 3,142 | ||||||
America’s Car-Mart, Inc. * | 38 | 1,747 | ||||||
American Eagle Outfitters, Inc. | 1,903 | 24,492 | ||||||
ANN, Inc. * | 574 | 22,036 | ||||||
Asbury Automotive Group, Inc. * | 397 | 27,806 | ||||||
Ascena Retail Group, Inc. * | 87,700 | 1,091,865 | ||||||
Barnes & Noble, Inc. * | 342 | 7,462 | ||||||
bebe stores, Inc. | 766 | 1,754 | ||||||
Blue Nile, Inc. * | 112 | 3,976 | ||||||
Brown Shoe Co., Inc. | 497 | 13,215 | ||||||
Build-A-Bear Workshop, Inc. * | 136 | 2,305 | ||||||
Burlington Stores, Inc. * | 243 | 10,191 | ||||||
Christopher & Banks Corp. * | 284 | 1,855 | ||||||
Conn’s, Inc. * | 257 | 7,995 | ||||||
Core-Mark Holding Co., Inc. | 210 | 12,186 | ||||||
Coupons.com, Inc. * | 106 | 1,476 | ||||||
Destination Maternity Corp. | 197 | 2,951 | ||||||
Express, Inc. * | 813 | 12,171 | ||||||
Five Below, Inc. * | 495 | 19,736 | ||||||
Francesca’s Holdings Corp. * | 331 | 3,942 | ||||||
Fred’s, Inc., Class A | 77,810 | 1,221,617 | ||||||
FTD Cos., Inc. * | 208 | 7,317 | ||||||
Genesco, Inc. * | 257 | 19,709 | ||||||
Group 1 Automotive, Inc. | 250 | 21,358 | ||||||
Guess?, Inc. | 504 | 11,174 | ||||||
Haverty Furniture Cos, Inc. | 81 | 1,783 | ||||||
hhgregg, Inc. * | 110 | 570 | ||||||
Hibbett Sports, Inc. * | 290 | 13,163 | ||||||
HSN, Inc. | 417 | 27,551 | ||||||
Kirkland’s, Inc. * | 300 | 5,340 | ||||||
Lands’ End, Inc. * | 107 | 5,079 | ||||||
Lithia Motors, Inc., Class A | 246 | 19,095 | ||||||
Lumber Liquidators Holdings, Inc. * | 321 | 17,260 | ||||||
MarineMax, Inc. * | 149 | 2,856 | ||||||
Mattress Firm Holding Corp. * | 92 | 5,814 | ||||||
Monro Muffler Brake, Inc. | 329 | 17,582 | ||||||
Nutrisystem, Inc. | 158 | 2,661 | ||||||
Office Depot, Inc. * | 5,328 | 27,812 | ||||||
Orbitz Worldwide, Inc. * | 429 | 3,548 | ||||||
Outerwall, Inc. * | 264 | 16,703 | ||||||
PetMed Express, Inc. | 284 | 3,752 | ||||||
Pier 1 Imports, Inc. | 991 | 12,784 | ||||||
Pool Corp. | 494 | 29,492 | ||||||
Rent-A-Center, Inc. | 485 | 15,020 | ||||||
Restoration Hardware Holdings, Inc. * | 10,751 | 863,520 | ||||||
RetailMeNot, Inc. * | 286 | 6,023 | ||||||
Select Comfort Corp. * | 587 | 15,080 | ||||||
Shoe Carnival, Inc. | 70 | 1,288 | ||||||
Shutterfly, Inc. * | 460 | 19,242 | ||||||
Sonic Automotive, Inc., Class A | 451 | 11,225 | ||||||
Stage Stores, Inc. | 58,893 | 993,525 | ||||||
Stein Mart, Inc. | 616 | 8,242 | ||||||
Systemax, Inc. * | 178 | 2,723 | ||||||
The Bon-Ton Stores, Inc. | 370 | 3,260 | ||||||
The Buckle, Inc. | 280 | 13,812 | ||||||
The Cato Corp., Class A | 45,576 | 1,625,696 | ||||||
The Children’s Place, Inc. | 270 | 13,298 | ||||||
The Container Store Group, Inc. * | 102 | 1,881 | ||||||
The Finish Line, Inc., Class A | 661 | 17,497 | ||||||
The Men’s Wearhouse, Inc. | 637 | 29,958 | ||||||
The Pep Boys - Manny, Moe & Jack * | 705 | 6,719 | ||||||
Tile Shop Holdings, Inc. * | 190 | 1,636 | ||||||
Tilly’s, Inc., Class A * | 145 | 1,032 | ||||||
Tuesday Morning Corp. * | 543 | 11,072 | ||||||
ValueVision Media, Inc., Class A * | 338 | 1,913 | ||||||
Vitamin Shoppe, Inc. * | 384 | 18,021 | ||||||
VOXX International Corp. * | 301 | 2,568 | ||||||
West Marine, Inc. * | 151 | 1,486 | ||||||
Weyco Group, Inc. | 68 | 2,118 | ||||||
Winmark Corp. | 26 | 2,139 | ||||||
Zumiez, Inc. * | 232 | 7,744 | ||||||
6,464,061 | ||||||||
Semiconductors & Semiconductor Equipment 1.0% | ||||||||
Advanced Energy Industries, Inc. * | 466 | 9,217 | ||||||
Alpha & Omega Semiconductor Ltd. * | 218 | 2,021 | ||||||
Ambarella, Inc. * | 269 | 11,914 | ||||||
Amkor Technology, Inc. * | 1,019 | 6,909 | ||||||
Applied Micro Circuits Corp. * | 734 | 4,749 | ||||||
Audience, Inc. * | 351 | 1,309 | ||||||
Axcelis Technologies, Inc. * | 913 | 1,990 | ||||||
Brooks Automation, Inc. | 992 | 12,231 | ||||||
Cabot Microelectronics Corp. * | 357 | 17,218 | ||||||
Cavium, Inc. * | 535 | 27,451 | ||||||
CEVA, Inc. * | 286 | 4,662 | ||||||
Cirrus Logic, Inc. * | 607 | 11,715 | ||||||
Cypress Semiconductor Corp. * | 1,394 | 13,815 | ||||||
Diodes, Inc. * | 365 | 9,428 | ||||||
DSP Group, Inc. * | 206 | 1,996 | ||||||
Entegris, Inc. * | 1,145 | 15,549 | ||||||
Entropic Communications, Inc. * | 936 | 2,340 | ||||||
Fairchild Semiconductor International, Inc. * | 1,004 | 15,411 | ||||||
FormFactor, Inc. * | 1,000 | 7,970 | ||||||
Inphi Corp. * | 480 | 7,430 | ||||||
Integrated Device Technology, Inc. * | 1,097 | 18,002 | ||||||
Integrated Silicon Solution, Inc. | 213 | 2,893 | ||||||
International Rectifier Corp. * | 912 | 36,270 | ||||||
Intersil Corp., Class A | 1,102 | 14,646 | ||||||
IXYS Corp. | 155 | 1,809 | ||||||
Kopin Corp. * | 1,298 | 4,932 | ||||||
Lattice Semiconductor Corp. * | 1,055 | 7,079 | ||||||
MaxLinear, Inc., Class A * | 247 | 1,751 | ||||||
Micrel, Inc. | 65,613 | 796,542 | ||||||
Microsemi Corp. * | 19,904 | 518,897 | ||||||
MKS Instruments, Inc. | 523 | 19,037 | ||||||
Monolithic Power Systems, Inc. | 496 | 21,918 |
See financial notes 25
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Nanometrics, Inc. * | 425 | 5,755 | ||||||
NVE Corp. * | 36 | 2,580 | ||||||
OmniVision Technologies, Inc. * | 720 | 19,282 | ||||||
PDF Solutions, Inc. * | 270 | 3,502 | ||||||
Peregrine Semiconductor Corp. * | 678 | 8,428 | ||||||
Photronics, Inc. * | 432 | 3,884 | ||||||
PMC-Sierra, Inc. * | 1,362 | 10,610 | ||||||
Power Integrations, Inc. | 378 | 19,036 | ||||||
QuickLogic Corp. * | 527 | 1,518 | ||||||
Rambus, Inc. * | 1,073 | 12,286 | ||||||
RF Micro Devices, Inc. * | 2,700 | 35,127 | ||||||
Rubicon Technology, Inc. * | 163 | 722 | ||||||
Rudolph Technologies, Inc. * | 600 | 5,268 | ||||||
Semtech Corp. * | 713 | 18,096 | ||||||
Silicon Image, Inc. * | 1,158 | 6,207 | ||||||
Silicon Laboratories, Inc. * | 339 | 15,455 | ||||||
Spansion, Inc., Class A * | 809 | 16,649 | ||||||
Synaptics, Inc. * | 343 | 23,472 | ||||||
Tessera Technologies, Inc. | 654 | 19,875 | ||||||
TriQuint Semiconductor, Inc. * | 1,917 | 41,465 | ||||||
Ultra Clean Holdings, Inc. * | 244 | 2,142 | ||||||
Ultratech, Inc. * | 231 | 4,419 | ||||||
Veeco Instruments, Inc. * | 395 | 14,216 | ||||||
Vitesse Semiconductor Corp. * | 517 | 1,799 | ||||||
Xcerra Corp. * | 694 | 5,892 | ||||||
1,926,786 | ||||||||
Software & Services 9.0% | ||||||||
ACI Worldwide, Inc. * | 1,023 | 19,683 | ||||||
Actua Corp. * | 53,148 | 999,182 | ||||||
Actuate Corp. * | 877 | 3,762 | ||||||
Acxiom Corp. * | 688 | 12,962 | ||||||
Advent Software, Inc. | 481 | 16,623 | ||||||
American Software, Inc., Class A | 406 | 3,922 | ||||||
Angie’s List, Inc. * | 432 | 3,011 | ||||||
Aspen Technology, Inc. * | 27,907 | 1,030,606 | ||||||
AVG Technologies NV * | 124 | 2,222 | ||||||
Bankrate, Inc. * | 551 | 5,984 | ||||||
Barracuda Networks, Inc. * | 64 | 2,058 | ||||||
Bazaarvoice, Inc. * | 958 | 7,137 | ||||||
Benefitfocus, Inc. * | 40 | 1,108 | ||||||
Blackbaud, Inc. | 615 | 27,368 | ||||||
Blackhawk Network Holdings, Inc. * | 497 | 17,176 | ||||||
Blucora, Inc. * | 440 | 7,458 | ||||||
Bottomline Technologies de, Inc. * | 560 | 14,050 | ||||||
Brightcove, Inc. * | 325 | 2,083 | ||||||
BroadSoft, Inc. * | 386 | 8,839 | ||||||
CACI International, Inc., Class A * | 333 | 27,403 | ||||||
Callidus Software, Inc. * | 675 | 9,511 | ||||||
Carbonite, Inc. * | 132 | 1,444 | ||||||
Cardtronics, Inc. * | 33,835 | 1,298,926 | ||||||
Cass Information Systems, Inc. | 37 | 1,759 | ||||||
ChannelAdvisor Corp. * | 195 | 2,709 | ||||||
Ciber, Inc. * | 1,423 | 4,653 | ||||||
CommVault Systems, Inc. * | 494 | 21,904 | ||||||
Compuware Corp. | 1,722 | 17,478 | ||||||
comScore, Inc. * | 464 | 19,553 | ||||||
Comverse, Inc. * | 197 | 4,295 | ||||||
Constant Contact, Inc. * | 250 | 8,840 | ||||||
Convergys Corp. | 1,033 | 20,836 | ||||||
Conversant, Inc. * | 862 | 30,385 | ||||||
Cornerstone OnDemand, Inc. * | 13,634 | 494,505 | ||||||
Covisint Corp. * | 241 | 696 | ||||||
Criteo S.A. ADR * | 24,770 | 760,191 | ||||||
CSG Systems International, Inc. | 200 | 5,302 | ||||||
Cvent, Inc. * | 139 | 3,606 | ||||||
Cyan, Inc. * | 556 | 1,751 | ||||||
Datalink Corp. * | 156 | 1,973 | ||||||
Dealertrack Technologies, Inc. * | 475 | 22,349 | ||||||
Demand Media, Inc. * | 75 | 528 | ||||||
Demandware, Inc. * | 293 | 17,565 | ||||||
Dice Holdings, Inc. * | 775 | 7,727 | ||||||
Digimarc Corp. | 79 | 2,290 | ||||||
Digital River, Inc. * | 610 | 15,598 | ||||||
E2open, Inc. * | 171 | 999 | ||||||
EarthLink Holdings Corp. | 768 | 2,749 | ||||||
Ebix, Inc. | 353 | 5,207 | ||||||
Ellie Mae, Inc. * | 167 | 6,409 | ||||||
Endurance International Group Holdings Inc * | 24,743 | 411,229 | ||||||
EnerNOC, Inc. * | 440 | 6,499 | ||||||
Envestnet, Inc. * | 355 | 15,769 | ||||||
EPAM Systems, Inc. * | 311 | 14,847 | ||||||
Epiq Systems, Inc. | 423 | 6,785 | ||||||
ePlus, Inc. * | 28 | 1,710 | ||||||
Euronet Worldwide, Inc. * | 523 | 28,069 | ||||||
EVERTEC, Inc. | 651 | 14,778 | ||||||
Everyday Health, Inc. * | 96 | 1,312 | ||||||
ExlService Holdings, Inc. * | 420 | 11,756 | ||||||
Fair Isaac Corp. | 433 | 26,976 | ||||||
FleetMatics Group plc * | 28,423 | 1,055,630 | ||||||
Forrester Research, Inc. | 33,139 | 1,334,839 | ||||||
Gigamon, Inc. * | 223 | 3,332 | ||||||
Global Cash Access Holdings, Inc. * | 785 | 5,723 | ||||||
Global Eagle Entertainment, Inc. * | 351 | 4,293 | ||||||
Glu Mobile, Inc. * | 631 | 2,442 | ||||||
Gogo, Inc. * | 544 | 9,036 | ||||||
GrubHub, Inc. * | 109 | 3,963 | ||||||
GTT Communications, Inc. * | 179 | 2,323 | ||||||
Guidewire Software, Inc. * | 703 | 35,108 | ||||||
Heartland Payment Systems, Inc. | 470 | 24,276 | ||||||
Higher One Holdings, Inc. * | 570 | 1,465 | ||||||
iGATE Corp. * | 336 | 12,449 | ||||||
Imperva, Inc. * | 182 | 7,457 | ||||||
Infoblox, Inc. * | 497 | 8,022 | ||||||
Interactive Intelligence Group, Inc. * | 204 | 9,845 | ||||||
Internap Network Services Corp. * | 101,059 | 809,483 | ||||||
Intralinks Holdings, Inc. * | 807 | 6,972 | ||||||
j2 Global, Inc. | 490 | 26,504 | ||||||
Jive Software, Inc. * | 313 | 1,912 | ||||||
Kofax, Ltd. * | 496 | 3,150 | ||||||
Limelight Networks, Inc. * | 612 | 1,493 | ||||||
Lionbridge Technologies, Inc. * | 447 | 2,159 | ||||||
Liquidity Services, Inc. * | 238 | 3,042 | ||||||
LivePerson, Inc. * | 533 | 7,675 | ||||||
LogMeIn, Inc. * | 14,911 | 716,474 | ||||||
Manhattan Associates, Inc. * | 26,134 | 1,048,235 | ||||||
ManTech International Corp., Class A | 165 | 4,646 | ||||||
Marchex, Inc., Class B | 207 | 793 | ||||||
Marin Software, Inc. * | 124,101 | 1,110,704 | ||||||
Marketo, Inc. * | 239 | 7,713 | ||||||
MAXIMUS, Inc. | 36,272 | 1,757,741 |
26 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Mentor Graphics Corp. | 1,019 | 21,593 | ||||||
MicroStrategy, Inc., Class A * | 122 | 19,627 | ||||||
Millennial Media, Inc. * | 703 | 1,441 | ||||||
Model N, Inc. * | 157 | 1,531 | ||||||
ModusLink Global Solutions, Inc. * | 891 | 3,119 | ||||||
MoneyGram International, Inc. * | 348 | 2,993 | ||||||
Monotype Imaging Holdings, Inc. | 481 | 13,761 | ||||||
Monster Worldwide, Inc. * | 941 | 3,632 | ||||||
Move, Inc. * | 581 | 12,172 | ||||||
NetScout Systems, Inc. * | 369 | 13,601 | ||||||
NeuStar, Inc., Class A * | 653 | 17,246 | ||||||
NIC, Inc. | 599 | 11,040 | ||||||
Pegasystems, Inc. | 525 | 11,377 | ||||||
Perficient, Inc. * | 270 | 4,477 | ||||||
Progress Software Corp. * | 541 | 14,012 | ||||||
Proofpoint, Inc. * | 22,194 | 977,424 | ||||||
PROS Holdings, Inc. * | 257 | 7,191 | ||||||
Q2 Holdings, Inc. * | 116 | 1,750 | ||||||
QAD, Inc., Class A | 148 | 3,183 | ||||||
Qlik Technologies, Inc. * | 1,050 | 29,767 | ||||||
Qualys, Inc. * | 152 | 4,876 | ||||||
QuinStreet, Inc. * | 551 | 2,232 | ||||||
Rally Software Development Corp. * | 231 | 2,361 | ||||||
RealPage, Inc. * | 505 | 10,034 | ||||||
Reis, Inc. | 91 | 2,129 | ||||||
Rightside Group Ltd. * | 75 | 710 | ||||||
Rocket Fuel, Inc. * | 170 | 2,655 | ||||||
Rosetta Stone, Inc. * | 128 | 1,225 | ||||||
Sapiens International Corp. N.V. * | 293 | 2,321 | ||||||
Sapient Corp. * | 1,309 | 22,672 | ||||||
Science Applications International Corp. | 320 | 15,651 | ||||||
SciQuest, Inc. * | 370 | 5,517 | ||||||
Seachange International, Inc. * | 550 | 3,718 | ||||||
ServiceSource International, Inc. * | 546 | 2,086 | ||||||
Shutterstock, Inc. * | 143 | 11,120 | ||||||
Silver Spring Networks, Inc. * | 299 | 2,864 | ||||||
SPS Commerce, Inc. * | 166 | 9,678 | ||||||
SS&C Technologies Holdings, Inc. * | 586 | 28,316 | ||||||
Stamps.com, Inc. * | 166 | 6,125 | ||||||
Sykes Enterprises, Inc. * | 329 | 7,087 | ||||||
Synchronoss Technologies, Inc. * | 435 | 22,476 | ||||||
Syntel, Inc. * | 187 | 16,196 | ||||||
Take-Two Interactive Software, Inc. * | 1,157 | 30,603 | ||||||
Tangoe, Inc. * | 25,640 | 376,139 | ||||||
TechTarget, Inc. * | 391 | 3,730 | ||||||
Telenav, Inc. * | 470 | 3,393 | ||||||
TeleTech Holdings, Inc. * | 251 | 6,478 | ||||||
Textura, Corp. * | 171 | 4,555 | ||||||
The Hackett Group, Inc. | 327 | 2,292 | ||||||
The Rubicon Project, Inc. * | 43,340 | 496,676 | ||||||
The Ultimate Software Group, Inc. * | 293 | 44,099 | ||||||
TiVo, Inc. * | 1,233 | 16,091 | ||||||
Travelzoo, Inc. * | 203 | 2,657 | ||||||
Tremor Video, Inc. * | 389 | 914 | ||||||
Trulia, Inc. * | 368 | 17,167 | ||||||
Tyler Technologies, Inc. * | 384 | 42,977 | ||||||
Unisys Corp. * | 582 | 14,922 | ||||||
Unwired Planet, Inc. * | 802 | 1,243 | ||||||
VASCO Data Security International, Inc. * | 391 | 9,900 | ||||||
Verint Systems, Inc. * | 8,076 | 464,289 | ||||||
VirnetX Holding Corp. * | 369 | 2,166 | ||||||
Virtusa Corp. * | 18,051 | 739,730 | ||||||
Vistaprint N.V. * | 301 | 20,125 | ||||||
Vringo, Inc. * | 563 | 580 | ||||||
Web.com Group, Inc. * | 624 | 12,811 | ||||||
WebMD Health Corp. * | 371 | 15,834 | ||||||
WEX, Inc. * | 443 | 50,307 | ||||||
Wix.com Ltd. * | 132 | 2,243 | ||||||
XO Group, Inc. * | 322 | 4,099 | ||||||
Xoom Corp. * | 297 | 4,485 | ||||||
Zix Corp. * | 1,200 | 3,960 | ||||||
17,320,455 | ||||||||
Technology Hardware & Equipment 5.5% | ||||||||
ADTRAN, Inc. | 544 | 11,538 | ||||||
Agilysys, Inc. * | 137 | 1,548 | ||||||
Alliance Fiber Optic Products, Inc. | 175 | 2,259 | ||||||
Anixter International, Inc. | 285 | 24,273 | ||||||
Applied Optoelectronics, Inc. * | 98 | 1,582 | ||||||
Aruba Networks, Inc. * | 45,782 | 987,976 | ||||||
Badger Meter, Inc. | 136 | 7,741 | ||||||
Bel Fuse, Inc., Class B | 120 | 3,395 | ||||||
Belden, Inc. | 39,306 | 2,798,194 | ||||||
Benchmark Electronics, Inc. * | 401 | 9,512 | ||||||
Black Box Corp. | 134 | 2,947 | ||||||
CalAmp Corp. * | 43,084 | 830,660 | ||||||
Calix, Inc. * | 848 | 9,167 | ||||||
Checkpoint Systems, Inc. * | 467 | 6,192 | ||||||
Ciena Corp. * | 1,307 | 21,905 | ||||||
Cognex Corp. * | 862 | 34,101 | ||||||
Coherent, Inc. * | 13,004 | 847,211 | ||||||
Comtech Telecommunications Corp. | 298 | 11,345 | ||||||
Control4 Corp. * | 253 | 3,924 | ||||||
Cray, Inc. * | 415 | 14,384 | ||||||
CTS Corp. | 176 | 3,238 | ||||||
CUI Global, Inc. * | 193 | 1,579 | ||||||
Daktronics, Inc. | 790 | 10,515 | ||||||
Diebold, Inc. | 35,900 | 1,271,937 | ||||||
Dot Hill Systems Corp. * | 445 | 1,758 | ||||||
DTS, Inc. * | 346 | 10,304 | ||||||
Electro Rent Corp. | 245 | 3,734 | ||||||
Electro Scientific Industries, Inc. | 263 | 1,867 | ||||||
Electronics for Imaging, Inc. * | 400 | 18,288 | ||||||
Emulex Corp. * | 794 | 4,494 | ||||||
Extreme Networks, Inc. * | 1,418 | 5,091 | ||||||
Fabrinet * | 249 | 4,534 | ||||||
FARO Technologies, Inc. * | 117 | 6,552 | ||||||
FEI Co. | 463 | 39,022 | ||||||
Finisar Corp. * | 1,149 | 19,211 | ||||||
GSI Group, Inc. * | 370 | 4,754 | ||||||
Harmonic, Inc. * | 788 | 5,256 | ||||||
II-VI, Inc. * | 798 | 10,765 | ||||||
Immersion Corp. * | 129 | 1,086 | ||||||
Infinera Corp. * | 962 | 13,978 | ||||||
Insight Enterprises, Inc. * | 288 | 6,552 | ||||||
InterDigital, Inc. | 486 | 24,023 | ||||||
Intevac, Inc. * | 212 | 1,569 | ||||||
InvenSense, Inc. * | 666 | 10,796 | ||||||
Itron, Inc. * | 317 | 12,341 | ||||||
Ixia * | 345 | 3,322 | ||||||
Kemet Corp. * | 1,092 | 5,242 |
See financial notes 27
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
KVH Industries, Inc. * | 129 | 1,667 | ||||||
Littelfuse, Inc. | 273 | 26,628 | ||||||
Maxwell Technologies, Inc. * | 343 | 3,999 | ||||||
Mercury Systems, Inc. * | 600 | 8,388 | ||||||
Mesa Laboratories, Inc. | 31 | 2,367 | ||||||
Methode Electronics, Inc. | 461 | 18,154 | ||||||
MTS Systems Corp. | 3,724 | 245,821 | ||||||
Multi-Fineline Electronix, Inc. * | 162 | 1,644 | ||||||
NETGEAR, Inc. * | 527 | 17,939 | ||||||
Newport Corp. * | 655 | 11,718 | ||||||
Nimble Storage, Inc. * | 59 | 1,614 | ||||||
Numerex Corp., Class A * | 148 | 1,930 | ||||||
Oclaro, Inc. * | 788 | 1,237 | ||||||
Oplink Communications, Inc. | 255 | 5,317 | ||||||
OSI Systems, Inc. * | 237 | 16,799 | ||||||
Park Electrochemical Corp. | 140 | 3,612 | ||||||
ParkerVision, Inc. * | 408 | 534 | ||||||
PC Connection, Inc. | 112 | 2,671 | ||||||
Plantronics, Inc. | 482 | 25,001 | ||||||
Plexus Corp. * | 453 | 18,732 | ||||||
Polycom, Inc. * | 1,014 | 13,263 | ||||||
Procera Networks, Inc. * | 410 | 3,071 | ||||||
QLogic Corp. * | 849 | 10,027 | ||||||
Quantum Corp. * | 1,535 | 1,965 | ||||||
RealD, Inc. * | 627 | 7,098 | ||||||
Rofin-Sinar Technologies, Inc. * | 393 | 8,799 | ||||||
Rogers Corp. * | 112 | 7,657 | ||||||
Ruckus Wireless, Inc. * | 55,539 | 720,896 | ||||||
Sanmina Corp. * | 993 | 24,895 | ||||||
ScanSource, Inc. * | 33,806 | 1,290,713 | ||||||
ShoreTel, Inc. * | 692 | 5,598 | ||||||
Silicon Graphics International Corp. * | 411 | 3,567 | ||||||
Sonus Networks, Inc. * | 1,630 | 5,656 | ||||||
Speed Commerce, Inc. * | 612 | 1,818 | ||||||
Super Micro Computer, Inc. * | 479 | 15,309 | ||||||
SYNNEX Corp. | 8,707 | 602,350 | ||||||
Tessco Technologies, Inc. | 65 | 2,064 | ||||||
TTM Technologies, Inc. * | 856 | 5,915 | ||||||
Ubiquiti Networks, Inc. | 270 | 9,658 | ||||||
Universal Display Corp. * | 493 | 15,421 | ||||||
ViaSat, Inc. * | 418 | 26,184 | ||||||
Violin Memory, Inc. * | 593 | 2,870 | ||||||
Vishay Precision Group, Inc. * | 109 | 1,852 | ||||||
Zebra Technologies Corp., Class A * | 4,300 | 317,125 | ||||||
10,651,205 | ||||||||
Telecommunication Services 1.7% | ||||||||
8x8, Inc. * | 66,022 | 518,933 | ||||||
Atlantic Tele-Network, Inc. | 34 | 2,284 | ||||||
Cincinnati Bell, Inc. * | 1,940 | 7,120 | ||||||
Cogent Communications Holdings, Inc. | 575 | 19,516 | ||||||
Consolidated Communications Holdings, Inc. | 541 | 14,023 | ||||||
FairPoint Communications, Inc. * | 420 | 6,972 | ||||||
General Communication, Inc., Class A * | 408 | 4,786 | ||||||
Globalstar, Inc. * | 2,732 | 6,475 | ||||||
Hawaiian Telcom Holdco, Inc. * | 69 | 1,856 | ||||||
IDT Corp., Class B | 265 | 4,367 | ||||||
inContact, Inc. * | 304,630 | 2,711,207 | ||||||
Inteliquent, Inc. | 360 | 6,059 | ||||||
Intelsat S.A. * | 128 | 2,491 | ||||||
Iridium Communications, Inc. * | 770 | 7,315 | ||||||
Lumos Networks Corp. | 101 | 1,737 | ||||||
magicJack VocalTec Ltd. * | 140 | 1,302 | ||||||
NTELOS Holdings Corp. | 106 | 1,068 | ||||||
Premiere Global Services, Inc. * | 787 | 8,240 | ||||||
RingCentral, Inc., Class A * | 263 | 3,456 | ||||||
Shenandoah Telecommunications Co. | 209 | 6,184 | ||||||
Spok Holdings, Inc. | 257 | 4,174 | ||||||
Vonage Holdings Corp. * | 1,484 | 5,164 | ||||||
3,344,729 | ||||||||
Transportation 0.7% | ||||||||
Air Transport Services Group, Inc. * | 834 | 6,822 | ||||||
Allegiant Travel Co. | 131 | 17,485 | ||||||
ArcBest Corp. | 334 | 12,926 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 7,144 | 263,756 | ||||||
Baltic Trading Ltd. | 361 | 1,354 | ||||||
Celadon Group, Inc. | 131 | 2,549 | ||||||
Echo Global Logistics, Inc. * | 281 | 7,342 | ||||||
Forward Air Corp. | 423 | 20,249 | ||||||
Hawaiian Holdings, Inc. * | 811 | 14,063 | ||||||
Heartland Express, Inc. | 569 | 14,305 | ||||||
Hub Group, Inc., Class A * | 309 | 11,214 | ||||||
International Shipholding Corp. | 71 | 1,423 | ||||||
JetBlue Airways Corp. * | 2,300 | 26,542 | ||||||
Knight Transportation, Inc. | 414 | 12,114 | ||||||
Knightsbridge Shipping Ltd. | 271 | 2,379 | ||||||
Marten Transport Ltd. | 113 | 2,217 | ||||||
Matson, Inc. | 243 | 6,923 | ||||||
Navios Maritime Holdings, Inc. | 675 | 3,976 | ||||||
Park-Ohio Holdings Corp. | 53 | 2,815 | ||||||
Patriot Transportation Holding, Inc. * | 56 | 2,372 | ||||||
Quality Distribution, Inc. * | 198 | 2,566 | ||||||
Republic Airways Holdings, Inc. * | 835 | 10,454 | ||||||
Roadrunner Transportation Systems, Inc. * | 377 | 7,770 | ||||||
Safe Bulkers, Inc. | 243 | 1,298 | ||||||
Saia, Inc. * | 260 | 12,745 | ||||||
Scorpio Bulkers, Inc. * | 1,065 | 5,208 | ||||||
SkyWest, Inc. | 318 | 3,663 | ||||||
Swift Transportation Co. * | 1,082 | 26,725 | ||||||
Universal Truckload Services, Inc. | 73 | 1,921 | ||||||
UTi Worldwide, Inc. * | 75,945 | 830,079 | ||||||
Werner Enterprises, Inc. | 613 | 16,882 | ||||||
Wesco Aircraft Holdings, Inc. * | 447 | 7,934 | ||||||
XPO Logistics, Inc. * | 615 | 24,551 | ||||||
YRC Worldwide, Inc. * | 330 | 7,075 | ||||||
1,391,697 | ||||||||
Utilities 1.5% | ||||||||
Abengoa Yield plc * | 141 | 4,583 | ||||||
ALLETE, Inc. | 473 | 24,710 | ||||||
American States Water Co. | 458 | 16,387 | ||||||
Artesian Resources Corp., Class A | 311 | 6,926 | ||||||
Atlantic Power Corp. | 1,045 | 2,320 | ||||||
Avista Corp. | 534 | 18,930 | ||||||
Black Hills Corp. | 521 | 28,514 |
28 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
California Water Service Group | 444 | 11,557 | ||||||
Chesapeake Utilities Corp. | 55 | 2,664 | ||||||
Cleco Corp. | 743 | 39,944 | ||||||
Connecticut Water Service, Inc. | 59 | 2,193 | ||||||
Dynegy, Inc. * | 1,100 | 33,550 | ||||||
El Paso Electric Co. | 450 | 17,028 | ||||||
IDACORP, Inc. | 546 | 34,524 | ||||||
MGE Energy, Inc. | 265 | 11,785 | ||||||
Middlesex Water Co. | 87 | 1,962 | ||||||
New Jersey Resources Corp. | 11,729 | 685,912 | ||||||
Northwest Natural Gas Co. | 361 | 16,942 | ||||||
NorthWestern Corp. | 410 | 21,664 | ||||||
NRG Yield, Inc., Class A | 207 | 10,344 | ||||||
ONE Gas, Inc. | 395 | 14,990 | ||||||
Ormat Technologies, Inc. | 322 | 9,322 | ||||||
Otter Tail Corp. | 409 | 12,679 | ||||||
Pattern Energy Group, Inc. | 325 | 9,353 | ||||||
Piedmont Natural Gas Co., Inc. | 872 | 33,145 | ||||||
PNM Resources, Inc. | 772 | 22,272 | ||||||
Portland General Electric Co. | 1,008 | 36,701 | ||||||
SJW Corp. | 65 | 2,077 | ||||||
South Jersey Industries, Inc. | 425 | 24,922 | ||||||
Southwest Gas Corp. | 511 | 29,684 | ||||||
TerraForm Power, Inc., Class A * | 175 | 4,980 | ||||||
The Empire District Electric Co. | 430 | 12,229 | ||||||
The Laclede Group, Inc. | 17,815 | 904,468 | ||||||
UIL Holdings Corp. | 680 | 27,975 | ||||||
WGL Holdings, Inc. | 17,975 | 844,825 | ||||||
York Water Co. | 254 | 5,583 | ||||||
2,987,644 | ||||||||
Total Common Stock | ||||||||
(Cost $155,866,101) | 174,288,248 | |||||||
Other Investment Companies 8.7% of net assets | ||||||||
Equity Funds 3.0% | ||||||||
iShares Russell 2000 ETF | 333 | 38,814 | ||||||
iShares Russell Mid-Cap ETF | 34,700 | 5,667,551 | ||||||
5,706,365 | ||||||||
Money Market Fund 5.7% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (c) | 11,090,493 | 11,090,493 | ||||||
Total Other Investment Companies | ||||||||
(Cost $16,612,947) | 16,796,858 | |||||||
Rights 0.0% of net assets | ||||||||
Automobiles & Components 0.0% | ||||||||
Contra Furiex Pharmaceuticals CVR *(d)(e) | 66 | 645 | ||||||
Telecommunication Services 0.0% | ||||||||
Contra Leap Wireless CVR *(d)(e) | 861 | 2,169 | ||||||
Total Rights | ||||||||
(Cost $2,814) | 2,814 | |||||||
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%, 12/18/14 (a)(b) | 5,000 | 5,000 | ||||||
0.01%, 12/18/14 (a)(b) | 381,000 | 380,996 | ||||||
Total Short-Term Investments | ||||||||
(Cost $385,996) | 385,996 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $172,908,059 and the unrealized appreciation and depreciation were $28,560,167 and ($9,994,310), respectively, with a net unrealized appreciation of $18,565,857.
* | 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 $4,911 or 0.0% of net assets. |
ADR — | American Depositary Receipt | |
CVR — | Contingent Value Rights | |
ETF — | Exchange Traded Fund | |
REIT — | Real Estate Investment Trust |
See financial notes 29
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/19/14 | 27 | 3,161,700 | 156,619 |
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $174,288,248 | $— | $— | $174,288,248 | ||||||||||||
Other Investment Companies1 | 16,796,858 | — | — | 16,796,858 | ||||||||||||
Rights1 | — | — | 2,814 | 2,814 | ||||||||||||
Warrants1 | — | — | — | — | ||||||||||||
Short-Term Investments1 | — | 385,996 | — | 385,996 | ||||||||||||
Total | $191,085,106 | $385,996 | $2,814 | $191,473,916 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | $156,619 | $— | $— | $156,619 |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts are not included in Investments in the schedule of portfolio holdings 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 | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Rights | $— | $— | $— | $2,814 | $— | $— | $— | $2,814 | ||||||||||||||||||||||||
Total | $— | $— | $— | $2,814 | $— | $— | $— | $2,814 | ||||||||||||||||||||||||
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, 2014.
30 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $172,867,858) | $191,473,916 | |||||
Receivables: | ||||||
Investments sold | 636,691 | |||||
Fund shares sold | 1,073,990 | |||||
Variation margin on futures contracts | 85,844 | |||||
Dividends | 66,423 | |||||
Prepaid expenses | + | 7,176 | ||||
Total assets | 193,344,040 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 447,887 | |||||
Investment adviser and administrator fees | 20,611 | |||||
Fund shares redeemed | 241,642 | |||||
Accrued expenses | + | 52,693 | ||||
Total liabilities | 762,833 | |||||
Net Assets | ||||||
Total assets | 193,344,040 | |||||
Total liabilities | − | 762,833 | ||||
Net assets | $192,581,207 | |||||
Net Assets by Source | ||||||
Capital received from investors | 171,693,497 | |||||
Net investment loss | (1,405,856 | ) | ||||
Net realized capital gains | 3,530,889 | |||||
Net unrealized capital appreciation | 18,762,677 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $70,496,399 | 3,913,063 | $18.02 | |||||||||||
Select Shares | $122,084,808 | 6,660,817 | $18.33 |
See financial notes 31
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,294) | $2,008,386 | |||||
Interest | + | 82 | ||||
Total investment income | 2,008,468 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,176,760 | |||||
Shareholder service fees: | ||||||
Investor Shares | 178,075 | |||||
Select Shares | 218,388 | |||||
Portfolio accounting fees | 65,536 | |||||
Transfer agent fees | 48,850 | |||||
Professional fees | 42,192 | |||||
Custodian fees | 41,942 | |||||
Shareholder reports | 31,438 | |||||
Registration fees | 31,041 | |||||
Independent trustees’ fees | 6,985 | |||||
Interest expense | 150 | |||||
Other expenses | + | 4,326 | ||||
Total expenses | 2,845,683 | |||||
Expense reduction by CSIM and its affiliates | − | 503,350 | ||||
Net expenses | − | 2,342,333 | ||||
Net investment loss | (333,865 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 26,768,540 | |||||
Net realized losses on futures contracts | (16,200 | ) | ||||
Net realized losses on foreign currency transactions | + | (28 | ) | |||
Net realized gains | 26,752,312 | |||||
Net change in unrealized appreciation (depreciation) on investments | (18,011,059 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | + | 61,624 | ||||
Net change in unrealized appreciation (depreciation) | + | (17,949,435 | ) | |||
Net realized and unrealized gains | 8,802,877 | |||||
Increase in net assets resulting from operations | $8,469,012 |
32 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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment loss | ($333,865 | ) | ($139,269 | ) | ||||||
Net realized gains | 26,752,312 | 29,075,549 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (17,949,435 | ) | 18,424,330 | ||||||
Increase in net assets from operations | $8,469,012 | $47,360,610 |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 72,396 | $1,292,414 | 122,198 | $1,904,239 | ||||||||||||||
Select Shares | + | 1,598,068 | 28,503,925 | 1,026,670 | 15,859,002 | |||||||||||||
Total shares sold | 1,670,464 | $29,796,339 | 1,148,868 | $17,763,241 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (547,678 | ) | ($9,687,773 | ) | (669,973 | ) | ($10,039,749 | ) | ||||||||||
Select Shares | + | (1,362,207 | ) | (24,624,208 | ) | (1,210,604 | ) | (19,403,597 | ) | |||||||||
Total shares redeemed | (1,909,885 | ) | ($34,311,981 | ) | (1,880,577 | ) | ($29,443,346 | ) | ||||||||||
Net transactions in fund shares | (239,421 | ) | ($4,515,642 | ) | (731,709 | ) | ($11,680,105 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 10,813,301 | $188,627,837 | 11,545,010 | $152,947,332 | ||||||||||||||
Total increase or decrease | + | (239,421 | ) | 3,953,370 | (731,709 | ) | 35,680,505 | |||||||||||
End of period | 10,573,880 | $192,581,207 | 10,813,301 | $188,627,837 | ||||||||||||||
Net investment loss | ($1,405,856 | ) | ($1,053,254 | ) |
See financial notes 33
Table of Contents
Laudus International MarketMasters Fund™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
Investor Shares | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 23.68 | 19.03 | 17.45 | 18.36 | 15.04 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.25 | 0.23 | 0.21 | 0.16 | 0.09 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.66 | ) | 4.85 | 1.52 | (0.85 | ) | 3.41 | |||||||||||||||
Total from investment operations | (0.41 | ) | 5.08 | 1.73 | (0.69 | ) | 3.50 | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.32 | ) | (0.43 | ) | (0.15 | ) | (0.22 | ) | (0.18 | ) | ||||||||||||
Net asset value at end of period | 22.95 | 23.68 | 19.03 | 17.45 | 18.36 | |||||||||||||||||
Total return (%) | (1.73 | ) | 27.23 | 10.05 | (3.87 | ) | 23.47 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.40 | 1.40 | 1.53 | 1 | 1.59 | 1.60 | ||||||||||||||||
Gross operating expenses | 1.59 | 1.60 | 1.62 | 1.60 | 1.62 | |||||||||||||||||
Net investment income (loss) | 1.06 | 1.10 | 1.19 | 0.80 | 0.53 | |||||||||||||||||
Portfolio turnover rate | 74 | 65 | 68 | 78 | 83 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 631 | 675 | 592 | 665 | 849 |
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
Select Shares | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 23.68 | 19.03 | 17.46 | 18.38 | 15.05 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.28 | 0.28 | 0.25 | 0.19 | 0.10 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.65 | ) | 4.83 | 1.50 | (0.86 | ) | 3.43 | |||||||||||||||
Total from investment operations | (0.37 | ) | 5.11 | 1.75 | (0.67 | ) | 3.53 | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.36 | ) | (0.46 | ) | (0.18 | ) | (0.25 | ) | (0.20 | ) | ||||||||||||
Net asset value at end of period | 22.95 | 23.68 | 19.03 | 17.46 | 18.38 | |||||||||||||||||
Total return (%) | (1.57 | ) | 27.43 | 10.20 | (3.76 | ) | 23.68 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.25 | 1.25 | 1.37 | 1 | 1.45 | 1.48 | 2 | |||||||||||||||
Gross operating expenses | 1.47 | 1.44 | 1.47 | 1.47 | 1.50 | |||||||||||||||||
Net investment income (loss) | 1.20 | 1.26 | 1.40 | 0.99 | 0.69 | |||||||||||||||||
Portfolio turnover rate | 74 | 65 | 68 | 78 | 83 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,592 | 1,590 | 1,062 | 961 | 948 |
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.
34 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2014
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 | .6% | Common Stock | 1,835,934,796 | 2,081,026,614 | ||||||||
0 | .2% | Preferred Stock | 3,877,742 | 3,971,762 | ||||||||
3 | .9% | Other Investment Companies | 92,207,503 | 87,171,228 | ||||||||
0 | .0% | Rights | 26,110 | 25,813 | ||||||||
0 | .1% | Short-Term Investments | 813,987 | 813,987 | ||||||||
97 | .8% | Total Investments | 1,932,860,138 | 2,173,009,404 | ||||||||
2 | .2% | Other Assets and Liabilities, Net | 50,015,147 | |||||||||
100 | .0% | Net Assets | 2,223,024,551 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 93.6% of net assets | ||||||||
Australia 4.3% | ||||||||
Banks 0.4% | ||||||||
Australia & New Zealand Banking Group Ltd. | 180,169 | 5,331,303 | ||||||
Bank of Queensland Ltd. | 2,681 | 29,804 | ||||||
Bendigo & Adelaide Bank Ltd. | 3,249 | 35,680 | ||||||
Commonwealth Bank of Australia | 13,024 | 926,129 | ||||||
National Australia Bank Ltd. | 18,907 | 584,902 | ||||||
Westpac Banking Corp. | 24,974 | 766,559 | ||||||
7,674,377 | ||||||||
Capital Goods 0.0% | ||||||||
Leighton Holdings Ltd. | 776 | 15,108 | ||||||
Commercial & Professional Supplies 0.0% | ||||||||
ALS Ltd. | 2,658 | 13,164 | ||||||
Brambles Ltd. | 12,529 | 105,379 | ||||||
Seek Ltd. | 2,421 | 35,528 | ||||||
154,071 | ||||||||
Consumer Services 1.2% | ||||||||
Aristocrat Leisure Ltd. | 855,860 | 4,865,733 | ||||||
Crown Resorts Ltd. | 2,906 | 37,274 | ||||||
Flight Centre Travel Group Ltd. | 377 | 13,988 | ||||||
G8 Education Ltd. | 2,222,830 | 9,821,971 | ||||||
Invocare Ltd. | 429,546 | 4,583,334 | ||||||
Slater & Gordon Ltd. | 1,471,190 | 7,948,791 | ||||||
Tabcorp Holdings Ltd. | 5,406 | 19,419 | ||||||
Tatts Group Ltd. | 10,662 | 32,637 | ||||||
27,323,147 | ||||||||
Diversified Financials 0.2% | ||||||||
ASX Ltd. | 1,532 | 48,606 | ||||||
Macquarie Group Ltd. | 2,317 | 125,220 | ||||||
Magellan Financial Group Ltd. | 414,480 | 4,920,321 | ||||||
5,094,147 | ||||||||
Energy 0.0% | ||||||||
Caltex Australia Ltd. | 1,076 | 29,636 | ||||||
Origin Energy Ltd. | 8,848 | 111,155 | ||||||
Santos Ltd. | 7,830 | 89,726 | ||||||
Woodside Petroleum Ltd. | 5,951 | 211,382 | ||||||
WorleyParsons Ltd. | 2,058 | 24,564 | ||||||
466,463 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Metcash Ltd. | 8,471 | 21,157 | ||||||
Wesfarmers Ltd. | 9,180 | 357,264 | ||||||
Woolworths Ltd. | 10,096 | 320,402 | ||||||
698,823 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca-Cola Amatil Ltd. | 4,504 | 36,345 | ||||||
Treasury Wine Estates Ltd. | 6,454 | 26,351 | ||||||
62,696 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Cochlear Ltd. | 419 | 27,156 | ||||||
Ramsay Health Care Ltd. | 1,049 | 48,494 | ||||||
Sonic Healthcare Ltd. | 3,014 | 49,878 | ||||||
125,528 | ||||||||
Insurance 0.4% | ||||||||
AMP Ltd. | 1,596,146 | 8,231,361 | ||||||
Insurance Australia Group Ltd. | 18,771 | 108,544 | ||||||
QBE Insurance Group Ltd. | 10,758 | 109,279 | ||||||
Suncorp Group Ltd. | 10,318 | 134,260 | ||||||
8,583,444 | ||||||||
Materials 0.8% | ||||||||
Alumina Ltd. * | 18,530 | 26,781 | ||||||
Amcor Ltd. | 9,671 | 100,451 | ||||||
BHP Billiton Ltd. | 25,799 | 771,824 | ||||||
Boral Ltd. | 7,979 | 35,045 | ||||||
Fortescue Metals Group Ltd. | 12,428 | 38,357 | ||||||
Iluka Resources Ltd. | 4,224 | 27,117 | ||||||
Incitec Pivot Ltd. | 12,206 | 31,322 | ||||||
Newcrest Mining Ltd. * | 6,073 | 49,808 | ||||||
Orica Ltd. | 595,365 | 10,867,934 | ||||||
Pact Group Holdings Ltd. | 1,830,301 | 6,148,350 | ||||||
Rio Tinto Ltd. | 3,496 | 186,681 | ||||||
18,283,670 | ||||||||
Media 0.1% | ||||||||
REA Group Ltd. | 22,087 | 884,388 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
CSL Ltd. | 61,318 | 4,329,228 | ||||||
Real Estate 0.7% | ||||||||
CFS Retail Property Trust Group | 16,560 | 30,801 | ||||||
Charter Hall Retail REIT | 2,246,600 | 8,056,084 | ||||||
Dexus Property Group | 42,943 | 45,898 | ||||||
Federation Centres | 14,474 | 34,758 | ||||||
Goodman Group | 13,831 | 67,526 | ||||||
Lend Lease Corp., Ltd. | 4,389 | 61,213 | ||||||
Mirvac Group | 29,187 | 46,306 |
See financial notes 35
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Scentre Group * | 42,699 | 136,207 | ||||||
Shopping Centres Australasia Property Group | 3,722,495 | 5,941,656 | ||||||
Stockland | 18,630 | 69,653 | ||||||
The GPT Group | 13,331 | 48,456 | ||||||
Westfield Corp. | 15,826 | 111,209 | ||||||
14,649,767 | ||||||||
Retailing 0.0% | ||||||||
Harvey Norman Holdings Ltd. | 3,492 | 11,743 | ||||||
Software & Services 0.0% | ||||||||
Computershare Ltd. | 3,728 | 40,459 | ||||||
Telecommunication Services 0.3% | ||||||||
Telstra Corp., Ltd. | 1,220,211 | 6,071,956 | ||||||
TPG Telecom Ltd. | 2,113 | 13,682 | ||||||
6,085,638 | ||||||||
Transportation 0.0% | ||||||||
Asciano Ltd. | 7,700 | 42,592 | ||||||
Aurizon Holdings Ltd. | 17,112 | 70,976 | ||||||
Qantas Airways Ltd. * | 6,878 | 10,276 | ||||||
Sydney Airport | 8,660 | 33,668 | ||||||
Toll Holdings Ltd. | 6,899 | 34,565 | ||||||
Transurban Group | 14,441 | 103,425 | ||||||
295,502 | ||||||||
Utilities 0.0% | ||||||||
AGL Energy Ltd. | 5,376 | 64,445 | ||||||
APA Group | 6,604 | 45,913 | ||||||
AusNet Services | 11,439 | 13,829 | ||||||
124,187 | ||||||||
94,902,386 | ||||||||
Austria 0.3% | ||||||||
Banks 0.0% | ||||||||
Erste Group Bank AG | 2,235 | 57,031 | ||||||
Raiffeisen Bank International AG | 1,296 | 27,750 | ||||||
84,781 | ||||||||
Capital Goods 0.0% | ||||||||
ANDRITZ AG | 570 | 27,545 | ||||||
Energy 0.0% | ||||||||
OMV AG | 1,175 | 36,934 | ||||||
Insurance 0.0% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 293 | 14,105 | ||||||
Materials 0.0% | ||||||||
Voestalpine AG | 882 | 35,331 | ||||||
Real Estate 0.0% | ||||||||
IMMOFINANZ AG * | 6,832 | 20,683 | ||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
ams AG | 151,140 | 5,419,727 | ||||||
5,639,106 | ||||||||
Belgium 0.2% | ||||||||
Banks 0.0% | ||||||||
KBC Groep N.V. * | 2,007 | 107,807 | ||||||
Diversified Financials 0.0% | ||||||||
Groupe Bruxelles Lambert S.A. | 645 | 57,642 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Colruyt S.A. | 560 | 25,505 | ||||||
Delhaize Group S.A. | 812 | 55,521 | ||||||
81,026 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Anheuser-Busch InBev N.V. | 6,459 | 716,267 | ||||||
Insurance 0.0% | ||||||||
Ageas | 1,774 | 59,301 | ||||||
Materials 0.0% | ||||||||
Solvay S.A. | 474 | 64,710 | ||||||
Umicore S.A. | 803 | 31,517 | ||||||
96,227 | ||||||||
Media 0.1% | ||||||||
Telenet Group Holding N.V. * | 19,697 | 1,113,834 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
UCB S.A. | 16,051 | 1,294,453 | ||||||
Telecommunication Services 0.0% | ||||||||
Belgacom S.A. | 1,215 | 45,889 | ||||||
3,572,446 | ||||||||
Brazil 0.8% | ||||||||
Consumer Services 0.4% | ||||||||
GAEC Educacao S.A. | 487,200 | 6,193,470 | ||||||
Kroton Educacional S.A. | 288,000 | 2,052,577 | ||||||
8,246,047 | ||||||||
Diversified Financials 0.0% | ||||||||
CETIP S.A. - Mercados Organizados | 55,700 | 705,832 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
AMBEV S.A. ADR | 611,486 | 4,084,727 | ||||||
Insurance 0.2% | ||||||||
BB Seguridade Participacoes S.A. | 266,000 | 3,548,651 | ||||||
Software & Services 0.0% | ||||||||
Cielo S.A. | 62,500 | 1,025,529 | ||||||
17,610,786 | ||||||||
Canada 4.8% | ||||||||
Banks 0.2% | ||||||||
The Toronto-Dominion Bank | 90,315 | 4,445,032 | ||||||
Capital Goods 0.4% | ||||||||
ATS Automation Tooling Systems, Inc. * | 187,320 | 2,343,474 | ||||||
CAE, Inc. | 526,465 | 6,745,179 | ||||||
9,088,653 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Ritchie Bros. Auctioneers, Inc. | 152,200 | 3,720,430 | ||||||
Stantec, Inc. | 96,780 | 6,131,990 | ||||||
9,852,420 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Gildan Activewear, Inc. | 23,600 | 1,405,886 | ||||||
Diversified Financials 0.4% | ||||||||
CI Financial Corp. | 71,926 | 2,091,314 | ||||||
Element Financial Corp. * | 664,620 | 7,725,054 | ||||||
9,816,368 |
36 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 1.1% | ||||||||
Canadian Natural Resources Ltd. | 107,172 | 3,739,918 | ||||||
Enbridge, Inc. | 108,379 | 5,128,302 | ||||||
Pason Systems, Inc. | 232,500 | 5,563,662 | ||||||
Peyto Exploration & Development Corp. | 35,998 | 1,016,012 | ||||||
Raging River Exploration, Inc. * | 364,060 | 2,474,335 | ||||||
Suncor Energy, Inc. | 175,800 | 6,242,417 | ||||||
24,164,646 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Alimentation Couche-Tard, Inc., Class B | 64,986 | 2,205,505 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Saputo, Inc. | 70,154 | 1,990,617 | ||||||
Materials 0.4% | ||||||||
CCL Industries, Inc., Class B | 92,825 | 9,384,216 | ||||||
Media 0.1% | ||||||||
Thomson Reuters Corp. | 31,100 | 1,157,023 | ||||||
Real Estate 0.9% | ||||||||
Brookfield Asset Management, Inc., Class A | 58,300 | 2,854,951 | ||||||
Firstservice Corporation | 174,480 | 9,220,557 | ||||||
Morguard Real Estate Investment Trust | 135,490 | 2,224,005 | ||||||
Northern Property Real Estate Investment Trust | 197,300 | 5,083,707 | ||||||
19,383,220 | ||||||||
Retailing 0.0% | ||||||||
Dollarama, Inc. | 9,411 | 826,829 | ||||||
Software & Services 0.2% | ||||||||
Constellation Software, Inc. | 2,233 | 629,056 | ||||||
The Descartes Systems Group, Inc. * | 287,490 | 4,055,801 | ||||||
4,684,857 | ||||||||
Transportation 0.4% | ||||||||
Canadian National Railway Co. | 59,527 | 4,201,415 | ||||||
Canadian Pacific Railway Ltd. | 19,476 | 4,044,776 | ||||||
8,246,191 | ||||||||
106,651,463 | ||||||||
China 3.5% | ||||||||
Automobiles & Components 0.4% | ||||||||
Brilliance China Automotive Holdings Ltd. | 422,000 | 729,750 | ||||||
Dongfeng Motor Group Co., Ltd., Class H | 446,000 | 689,720 | ||||||
Nexteer Automotive Group Ltd. | 9,000,000 | 8,018,175 | ||||||
9,437,645 | ||||||||
Capital Goods 0.0% | ||||||||
Weichai Power Co., Ltd., Class H | 185,000 | 710,154 | ||||||
Consumer Durables & Apparel 0.3% | ||||||||
Ozner Water International Holding Ltd. * | 12,924,000 | 6,609,722 | �� | |||||
Insurance 0.1% | ||||||||
Ping An Insurance (Group) Co. of China Ltd., Class H | 315,500 | 2,579,127 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.5% | ||||||||
Lijun International Pharmaceutical Holding Co., Ltd. | 15,842,000 | 7,711,861 | ||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 1,278,000 | 1,020,483 | ||||||
WuXi PharmaTech Cayman, Inc. ADR * | 34,975 | 1,318,558 | ||||||
10,050,902 | ||||||||
Retailing 0.2% | ||||||||
Jumei International Holding Ltd. ADR * | 111,600 | 3,004,272 | ||||||
Vipshop Holdings Ltd. ADR * | 9,924 | 2,275,474 | ||||||
5,279,746 | ||||||||
Software & Services 0.8% | ||||||||
Alibaba Group Holding Ltd. ADR * | 15,274 | 1,506,016 | ||||||
Baidu, Inc. ADR * | 12,026 | 2,871,448 | ||||||
NetEase, Inc. ADR | 8,233 | 779,830 | ||||||
Qihoo 360 Technology Co., Ltd. ADR * | 8,746 | 638,283 | ||||||
Tencent Holdings Ltd. | 234,600 | 3,770,553 | ||||||
YY, Inc. ADR * | 89,113 | 7,383,903 | ||||||
16,950,033 | ||||||||
Technology Hardware & Equipment 0.7% | ||||||||
Lenovo Group Ltd. | 1,912,000 | 2,818,296 | ||||||
PAX Global Technology Ltd. * | 8,521,000 | 9,151,988 | ||||||
TCL Communication Technology Holdings Ltd. | 2,986,000 | 2,936,603 | ||||||
14,906,887 | ||||||||
Transportation 0.4% | ||||||||
Sinotrans Ltd., Class H | 11,384,000 | 9,033,253 | ||||||
Utilities 0.1% | ||||||||
ENN Energy Holdings Ltd. | 242,000 | 1,570,193 | ||||||
77,127,662 | ||||||||
Denmark 2.1% | ||||||||
Banks 0.0% | ||||||||
Danske Bank A/S | 5,259 | 144,414 | ||||||
Capital Goods 0.0% | ||||||||
Vestas Wind Systems A/S * | 1,792 | 59,808 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Pandora A/S | 31,804 | 2,681,442 | ||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Carlsberg A/S, Class B | 857 | 75,586 | ||||||
Royal UNIBREW * | 76,240 | 12,462,445 | ||||||
12,538,031 | ||||||||
Health Care Equipment & Services 0.5% | ||||||||
Coloplast A/S, Class B | 23,671 | 2,063,194 | ||||||
GN Store Nord A/S | 398,313 | 9,267,724 | ||||||
William Demant Holding A/S * | 203 | 15,386 | ||||||
11,346,304 | ||||||||
Insurance 0.0% | ||||||||
Tryg A/S | 226 | 24,457 | ||||||
Materials 0.6% | ||||||||
Chr. Hansen Holding A/S | 345,486 | 13,917,511 | ||||||
Novozymes A/S, B Shares | 1,918 | 88,816 | ||||||
14,006,327 |
See financial notes 37
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Novo Nordisk A/S, Class B | 125,131 | 5,656,261 | ||||||
Telecommunication Services 0.0% | ||||||||
TDC A/S | 6,427 | 49,083 | ||||||
Transportation 0.0% | ||||||||
AP Moeller - Maersk A/S, Series A | 31 | 70,523 | ||||||
AP Moeller - Maersk A/S, Series B | 57 | 133,014 | ||||||
DSV A/S | 1,396 | 41,784 | ||||||
245,321 | ||||||||
46,751,448 | ||||||||
Finland 0.7% | ||||||||
Automobiles & Components 0.0% | ||||||||
Nokian Renkaat Oyj | 828 | 23,391 | ||||||
Capital Goods 0.1% | ||||||||
Kone Oyj, Class B | 62,773 | 2,703,504 | ||||||
Metso Oyj | 828 | 27,052 | ||||||
Wartsila Oyj Abp | 1,183 | 54,853 | ||||||
2,785,409 | ||||||||
Energy 0.0% | ||||||||
Neste Oil Oyj | 995 | 21,509 | ||||||
Insurance 0.4% | ||||||||
Sampo Oyj, A Shares | 170,905 | 8,189,324 | ||||||
Materials 0.2% | ||||||||
Huhtamaki Oyj | 203,730 | 5,169,681 | ||||||
Stora Enso Oyj, R Shares | 4,106 | 33,908 | ||||||
UPM-Kymmene Oyj | 4,259 | 67,558 | ||||||
5,271,147 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 1,013 | 34,454 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Nokia Oyj | 30,062 | 251,195 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 1,048 | 28,789 | ||||||
Utilities 0.0% | ||||||||
Fortum Oyj | 3,558 | 82,516 | ||||||
16,687,734 | ||||||||
France 7.9% | ||||||||
Automobiles & Components 0.2% | ||||||||
Compagnie Generale des Etablissements Michelin | 1,494 | 129,764 | ||||||
Peugeot S.A. * | 3,124 | 37,127 | ||||||
Plastic Omnium S.A. | 26,610 | 606,042 | ||||||
Renault S.A. | 1,541 | 114,629 | ||||||
Valeo S.A. | 22,149 | 2,483,581 | ||||||
3,371,143 | ||||||||
Banks 1.0% | ||||||||
BNP Paribas S.A. | 343,799 | 21,605,036 | ||||||
Credit Agricole S.A. | 8,023 | 118,727 | ||||||
Natixis S.A. | 7,451 | 51,289 | ||||||
Societe Generale S.A. | 5,781 | 278,592 | ||||||
22,053,644 | ||||||||
Capital Goods 0.7% | ||||||||
Alstom S.A. * | 1,729 | 60,348 | ||||||
Bouygues S.A. | 1,533 | 53,002 | ||||||
Compagnie de Saint-Gobain | 3,563 | 153,155 | ||||||
Legrand S.A. | 16,007 | 861,517 | ||||||
LISI (b) | 203,716 | 5,108,287 | ||||||
Rexel S.A. | 2,021 | 33,971 | ||||||
Safran S.A. | 126,274 | 7,997,375 | ||||||
Schneider Electric SE | 4,186 | 329,799 | ||||||
Thales S.A. | 743 | 36,897 | ||||||
Vallourec S.A. | 807 | 29,493 | ||||||
Vinci S.A. | 3,880 | 221,464 | ||||||
Zodiac Aerospace | 15,955 | 486,831 | ||||||
15,372,139 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Bureau Veritas S.A. | 1,765 | 43,655 | ||||||
Edenred | 1,606 | 44,522 | ||||||
Societe BIC S.A. | 223 | 27,818 | ||||||
Teleperformance | 132,300 | 8,336,827 | ||||||
8,452,822 | ||||||||
Consumer Durables & Apparel 1.1% | ||||||||
Christian Dior S.A. | 25,537 | 4,518,824 | ||||||
Hermes International | 2,324 | 719,704 | ||||||
Kering | 56,148 | 10,835,709 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 50,844 | 8,630,462 | ||||||
24,704,699 | ||||||||
Consumer Services 0.0% | ||||||||
Accor S.A. | 1,370 | 57,557 | ||||||
Sodexo | 755 | 72,837 | ||||||
130,394 | ||||||||
Diversified Financials 0.0% | ||||||||
Eurazeo S.A. | 263 | 17,603 | ||||||
Wendel S.A. | 247 | 27,234 | ||||||
44,837 | ||||||||
Energy 0.8% | ||||||||
Gaztransport Et Technigaz S.A. (b) | 232,930 | 13,033,168 | ||||||
Technip S.A. | 818 | 59,101 | ||||||
Total S.A. | 65,263 | 3,896,413 | ||||||
16,988,682 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Carrefour S.A. | 5,010 | 146,845 | ||||||
Casino Guichard Perrachon S.A. | 452 | 46,345 | ||||||
193,190 | ||||||||
Food, Beverage & Tobacco 0.8% | ||||||||
Danone S.A. | 153,382 | 10,480,983 | ||||||
Pernod-Ricard S.A. | 70,704 | 8,054,022 | ||||||
Remy Cointreau S.A. | 159 | 11,316 | ||||||
18,546,321 | ||||||||
Health Care Equipment & Services 0.6% | ||||||||
Essilor International S.A. | 29,963 | 3,308,573 | ||||||
Korian-Medica | 290,776 | 10,519,823 | ||||||
13,828,396 | ||||||||
Household & Personal Products 0.0% | ||||||||
L’Oreal S.A. | 2,018 | 316,697 |
38 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Insurance 0.4% | ||||||||
AXA S.A. | 274,536 | 6,341,376 | ||||||
CNP Assurances | 1,900 | 35,521 | ||||||
Euler Hermes Group | 18,708 | 1,832,621 | ||||||
SCOR SE | 1,209 | 37,047 | ||||||
8,246,565 | ||||||||
Materials 0.0% | ||||||||
Air Liquide S.A. | 2,764 | 333,658 | ||||||
Arkema S.A. | 418 | 25,800 | ||||||
Imerys S.A. | 265 | 19,016 | ||||||
Lafarge S.A. | 1,497 | 103,892 | ||||||
482,366 | ||||||||
Media 0.3% | ||||||||
Eutelsat Communications S.A. | 1,230 | 39,875 | ||||||
JC Decaux S.A. | 531 | 17,625 | ||||||
Lagardere S.C.A. | 1,178 | 28,668 | ||||||
Numericable Group S.A. * | 1,097 | 40,554 | ||||||
Publicis Groupe S.A. | 98,156 | 6,807,885 | ||||||
6,934,607 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
Boiron S.A. (b) | 74,612 | 6,634,763 | ||||||
Eurofins Scientific SE | 17,909 | 4,529,917 | ||||||
Sanofi | 9,528 | 864,571 | ||||||
12,029,251 | ||||||||
Real Estate 0.1% | ||||||||
Fonciere Des Regions | 219 | 20,134 | ||||||
Gecina | 226 | 30,587 | ||||||
ICADE | 399 | 31,745 | ||||||
Klepierre | 795 | 34,409 | ||||||
Unibail-Rodamco SE | 10,355 | 2,655,099 | ||||||
2,771,974 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
STMicroelectronics N.V. | 5,003 | 33,419 | ||||||
Software & Services 0.2% | ||||||||
AtoS | 625 | 43,193 | ||||||
Cap Gemini S.A. | 1,155 | 75,994 | ||||||
Criteo S.A. ADR * | 85,140 | 2,612,947 | ||||||
Dassault Systemes S.A. | 21,529 | 1,365,173 | ||||||
4,097,307 | ||||||||
Technology Hardware & Equipment 0.3% | ||||||||
Alcatel-Lucent * | 22,515 | 68,789 | ||||||
Ingenico | 50,347 | 5,015,734 | ||||||
Neopost S.A. | 18,377 | 1,275,361 | ||||||
6,359,884 | ||||||||
Telecommunication Services 0.0% | ||||||||
Iliad S.A. | 209 | 45,703 | ||||||
Orange S.A. | 14,883 | 236,943 | ||||||
Vivendi S.A. * | 9,715 | 237,330 | ||||||
519,976 | ||||||||
Transportation 0.0% | ||||||||
Aeroports de Paris | 237 | 28,052 | ||||||
Bollore S.A. | 1,306 | 619,176 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 3,694 | 46,690 | ||||||
693,918 | ||||||||
Utilities 0.4% | ||||||||
Electricite de France S.A. | 1,934 | 57,108 | ||||||
GDF Suez | 11,622 | 282,181 | ||||||
Rubis S.C.A. | 148,782 | 8,754,294 | ||||||
Suez Environnement Co. | 2,240 | 37,738 | ||||||
Veolia Environnement S.A. | 3,374 | 56,038 | ||||||
9,187,359 | ||||||||
175,359,590 | ||||||||
Germany 8.3% | ||||||||
Automobiles & Components 1.9% | ||||||||
Bayerische Motoren Werke AG | 158,780 | 17,027,203 | ||||||
Continental AG | 24,884 | 4,901,295 | ||||||
Daimler AG - Reg’d | 203,234 | 15,845,947 | ||||||
ElringKlinger AG | 159,739 | 4,886,084 | ||||||
Volkswagen AG | 236 | 50,331 | ||||||
42,710,860 | ||||||||
Banks 0.3% | ||||||||
Aareal Bank AG | 162,400 | 6,977,558 | ||||||
Commerzbank AG * | 7,759 | 117,320 | ||||||
7,094,878 | ||||||||
Capital Goods 1.7% | ||||||||
Brenntag AG | 16,438 | 797,598 | ||||||
DMG MORI SEIKI AG | 101,700 | 2,603,997 | ||||||
Duerr AG | 56,531 | 3,970,974 | ||||||
GEA Group AG | 1,463 | 67,485 | ||||||
HOCHTIEF AG | 216 | 15,984 | ||||||
MAN SE | 281 | 32,023 | ||||||
MTU Aero Engines AG | 141,904 | 12,445,709 | ||||||
Norma Group SE | 196,852 | 9,227,242 | ||||||
OSRAM Licht AG * | 640 | 22,483 | ||||||
Rational AG | 11,284 | 3,536,229 | ||||||
Siemens AG - Reg’d | 6,369 | 718,381 | ||||||
Stabilus S.A. *(b) | 110,766 | 3,192,548 | ||||||
36,630,653 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
adidas AG | 1,678 | 122,269 | ||||||
Hugo Boss AG | 253 | 33,613 | ||||||
155,882 | ||||||||
Diversified Financials 0.1% | ||||||||
Aurelius AG | 71,760 | 2,500,986 | ||||||
Deutsche Bank AG - Reg’d | 11,076 | 346,362 | ||||||
Deutsche Boerse AG | 1,547 | 105,882 | ||||||
2,953,230 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
METRO AG * | 1,294 | 41,251 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Celesio AG | 385 | 12,702 | ||||||
Fresenius Medical Care AG & Co. KGaA | 1,736 | 127,419 | ||||||
Fresenius SE & Co. KGaA | 3,029 | 155,860 | ||||||
295,981 | ||||||||
Household & Personal Products 0.0% | ||||||||
Beiersdorf AG | 807 | 65,431 | ||||||
Henkel AG & Co. KGaA | 936 | 85,193 | ||||||
150,624 | ||||||||
Insurance 0.7% | ||||||||
Allianz SE - Reg’d | 91,166 | 14,497,411 |
See financial notes 39
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hannover Rueck SE | 482 | 40,231 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 1,389 | 273,477 | ||||||
14,811,119 | ||||||||
Materials 1.3% | ||||||||
BASF SE | 52,646 | 4,651,808 | ||||||
HeidelbergCement AG | 1,128 | 77,005 | ||||||
K&S AG - Reg’d | 1,357 | 38,030 | ||||||
LANXESS AG | 685 | 35,679 | ||||||
Linde AG | 1,491 | 275,172 | ||||||
Symrise AG | 416,491 | 23,481,470 | ||||||
ThyssenKrupp AG * | 3,627 | 87,416 | ||||||
28,646,580 | ||||||||
Media 0.3% | ||||||||
Axel Springer SE | 304 | 16,723 | ||||||
CTS Eventim AG & Co. KGaA | 170,370 | 4,501,788 | ||||||
Kabel Deutschland Holding AG * | 176 | 23,859 | ||||||
ProSiebenSat.1 Media AG - Reg’d | 61,459 | 2,482,707 | ||||||
Sky Deutschland AG * | 6,081 | 51,368 | ||||||
7,076,445 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Bayer AG - Reg’d | 57,846 | 8,273,237 | ||||||
Merck KGaA | 1,035 | 93,692 | ||||||
MorphoSys AG * | 64,845 | 6,142,253 | ||||||
QIAGEN N.V. * | 167,901 | 3,945,914 | ||||||
18,455,096 | ||||||||
Real Estate 0.1% | ||||||||
Deutsche Annington Immobilien SE | 27,921 | 808,226 | ||||||
Deutsche Wohnen AG | 37,661 | 850,071 | ||||||
1,658,297 | ||||||||
Retailing 0.3% | ||||||||
Fielmann AG | 94,181 | 6,145,830 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Infineon Technologies AG | 50,142 | 488,519 | ||||||
Software & Services 0.8% | ||||||||
SAP SE | 74,000 | 5,042,021 | ||||||
United Internet AG - Reg’d | 982 | 38,512 | ||||||
Wirecard AG | 334,881 | 12,015,277 | ||||||
17,095,810 | ||||||||
Telecommunication Services 0.0% | ||||||||
Deutsche Telekom AG - Reg’d | 25,020 | 377,134 | ||||||
Telefonica Deutschland Holding AG * | 6,136 | 30,195 | ||||||
407,329 | ||||||||
Transportation 0.0% | ||||||||
Deutsche Lufthansa AG - Reg’d | 1,836 | 27,196 | ||||||
Deutsche Post AG - Reg’d | 7,768 | 244,613 | ||||||
Fraport AG Frankfurt Airport Services Worldwide | 285 | 17,659 | ||||||
289,468 | ||||||||
Utilities 0.0% | ||||||||
E.ON SE | 16,064 | 276,945 | ||||||
RWE AG | 3,925 | 139,266 | ||||||
416,211 | ||||||||
185,524,063 | ||||||||
Hong Kong 2.1% | ||||||||
Banks 0.0% | ||||||||
Bank of East Asia Ltd. | 10,200 | 42,596 | ||||||
BOC Hong Kong (Holdings) Ltd. | 29,500 | 98,203 | ||||||
Hang Seng Bank Ltd. | 6,100 | 103,360 | ||||||
244,159 | ||||||||
Capital Goods 0.2% | ||||||||
Haitian International Holdings Ltd. | 1,757,000 | 3,768,899 | ||||||
Hutchison Whampoa Ltd. | 17,000 | 215,570 | ||||||
Noble Group Ltd. | 34,000 | 31,649 | ||||||
NWS Holdings Ltd. | 12,000 | 22,432 | ||||||
4,038,550 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Li & Fung Ltd. | 46,000 | 56,062 | ||||||
Man Wah Holdings Ltd. | 409,767 | 613,089 | ||||||
Techtronic Industries Co., Ltd. | 308,500 | 965,790 | ||||||
Yue Yuen Industrial Holdings Ltd. | 5,500 | 18,463 | ||||||
1,653,404 | ||||||||
Consumer Services 0.3% | ||||||||
Galaxy Entertainment Group Ltd. | 19,000 | 129,920 | ||||||
Melco Crown Entertainment Ltd. ADR | 178,700 | 4,849,918 | ||||||
MGM China Holdings Ltd. | 7,600 | 24,433 | ||||||
Paradise Entertainment Ltd. | 6,104,000 | 2,526,763 | ||||||
Sands China Ltd. | 19,200 | 119,752 | ||||||
Shangri-La Asia Ltd. | 14,000 | 20,328 | ||||||
SJM Holdings Ltd. | 15,683 | 33,148 | ||||||
Wynn Macau Ltd. | 12,400 | 44,827 | ||||||
7,749,089 | ||||||||
Diversified Financials 0.1% | ||||||||
First Pacific Co., Ltd. | 24,000 | 25,901 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 64,100 | 1,420,746 | ||||||
1,446,647 | ||||||||
Insurance 0.3% | ||||||||
AIA Group Ltd. | 1,256,200 | 7,010,130 | ||||||
Real Estate 0.1% | ||||||||
Cheung Kong (Holdings) Ltd. | 79,410 | 1,409,708 | ||||||
Hang Lung Properties Ltd. | 18,000 | 56,209 | ||||||
Henderson Land Development Co., Ltd. | 8,294 | 56,032 | ||||||
Hysan Development Co., Ltd. | 6,000 | 27,377 | ||||||
Kerry Properties Ltd. | 6,000 | 20,583 | ||||||
New World Development Co., Ltd. | 42,000 | 52,794 | ||||||
Sino Land Co., Ltd. | 24,000 | 39,669 | ||||||
Sun Hung Kai Properties Ltd. | 13,000 | 193,974 | ||||||
Swire Pacific Ltd., Class A | 5,000 | 65,583 | ||||||
Swire Properties Ltd. | 9,400 | 30,121 | ||||||
The Link REIT | 18,500 | 108,791 | ||||||
The Wharf Holdings Ltd. | 12,349 | 91,335 | ||||||
Wheelock & Co., Ltd. | 7,000 | 33,741 | ||||||
2,185,917 | ||||||||
Retailing 0.1% | ||||||||
Emperor Watch & Jewellery Ltd. | 25,220,000 | 1,155,138 | ||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||
ASM Pacific Technology Ltd. | 289,000 | 3,179,143 |
40 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Xinyi Solar Holdings Ltd. | 15,512,000 | 5,249,781 | ||||||
8,428,924 | ||||||||
Technology Hardware & Equipment 0.3% | ||||||||
AAC Technologies Holdings, Inc. | 1,374,000 | 8,242,324 | ||||||
China High Precision Automation Group Ltd. *(a)(b) | 766,000 | — | ||||||
8,242,324 | ||||||||
Telecommunication Services 0.0% | ||||||||
HKT Trust & HKT Ltd. | 21,120 | 25,729 | ||||||
PCCW Ltd. | 28,000 | 17,800 | ||||||
43,529 | ||||||||
Transportation 0.2% | ||||||||
Cathay Pacific Airways Ltd. | 9,000 | 16,881 | ||||||
MTR Corp., Ltd. | 11,500 | 46,891 | ||||||
Pacific Basin Shipping Ltd. | 8,112,000 | 3,903,729 | ||||||
3,967,501 | ||||||||
Utilities 0.0% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 4,574 | 33,410 | ||||||
CLP Holdings Ltd. | 15,000 | 129,167 | ||||||
Hong Kong & China Gas Co., Ltd. | 50,494 | 117,913 | ||||||
Power Assets Holdings Ltd. | 11,000 | 106,209 | ||||||
386,699 | ||||||||
46,552,011 | ||||||||
India 1.8% | ||||||||
Automobiles & Components 0.7% | ||||||||
Apollo Tyres Ltd. | 867,190 | 3,089,870 | ||||||
Bharat Forge Ltd. | 429,940 | 5,686,008 | ||||||
Hero MotoCorp Ltd. | 29,580 | 1,477,178 | ||||||
Mahindra & Mahindra Ltd. | 40,895 | 869,571 | ||||||
Maruti Suzuki India Ltd. | 21,494 | 1,168,376 | ||||||
Tata Motors Ltd. | 307,314 | 2,685,107 | ||||||
14,976,110 | ||||||||
Banks 0.5% | ||||||||
Axis Bank Ltd. | 264,501 | 1,892,862 | ||||||
HDFC Bank Ltd. | 190,322 | 2,833,500 | ||||||
Housing Development Finance Corp., Ltd. | 128,137 | 2,307,837 | ||||||
IndusInd Bank Ltd. | 238,220 | 2,794,512 | ||||||
9,828,711 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
ITC Ltd. | 148,767 | 860,227 | ||||||
Materials 0.1% | ||||||||
Asian Paints Ltd. | 131,687 | 1,407,013 | ||||||
UltraTech Cement Ltd. | 17,345 | 719,608 | ||||||
2,126,621 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Sun Pharmaceutical Industries Ltd. | 257,134 | 3,538,925 | ||||||
Real Estate 0.1% | ||||||||
Oberoi Realty Ltd. | 483,790 | 1,932,796 | ||||||
Software & Services 0.2% | ||||||||
HCL Technologies Ltd. | 75,893 | 1,990,546 | ||||||
Tata Consultancy Services Ltd. | 69,634 | 2,957,574 | ||||||
Tech Mahindra Ltd. | 5,893 | 241,584 | ||||||
5,189,704 | ||||||||
Transportation 0.0% | ||||||||
Adani Ports & Special Economic Zone Ltd. | 173,693 | 807,415 | ||||||
39,260,509 | ||||||||
Indonesia 0.3% | ||||||||
Banks 0.1% | ||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 3,618,400 | 3,315,887 | ||||||
Retailing 0.2% | ||||||||
PT Matahari Department Store Tbk | 3,363,500 | 4,072,432 | ||||||
7,388,319 | ||||||||
Ireland 0.9% | ||||||||
Banks 0.0% | ||||||||
Bank of Ireland * | 220,385 | 86,756 | ||||||
Commercial & Professional Supplies 0.5% | ||||||||
Experian plc | 829,238 | 12,468,542 | ||||||
Energy 0.1% | ||||||||
Dragon Oil plc | 139,035 | 1,200,389 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Glanbia plc (f) | 358,556 | 5,059,394 | ||||||
Glanbia plc (f) | 38,400 | 542,449 | ||||||
Kerry Group plc, Class A | 1,267 | 86,039 | ||||||
5,687,882 | ||||||||
Materials 0.1% | ||||||||
CRH plc | 5,926 | 131,459 | ||||||
Smurfit Kappa Group plc | 56,946 | 1,176,603 | ||||||
1,308,062 | ||||||||
20,751,631 | ||||||||
Israel 1.0% | ||||||||
Banks 0.0% | ||||||||
Bank Hapoalim B.M. | 11,979 | 61,666 | ||||||
Bank Leumi Le-Israel B.M. * | 14,505 | 51,835 | ||||||
Mizrahi Tefahot Bank Ltd. * | 1,853 | 20,513 | ||||||
134,014 | ||||||||
Energy 0.0% | ||||||||
Delek Group Ltd. | 68 | 23,504 | ||||||
Materials 0.4% | ||||||||
Caesarstone Sdot-Yam Ltd. | 160,090 | 8,942,627 | ||||||
Israel Chemicals Ltd. | 6,666 | 44,941 | ||||||
The Israel Corp., Ltd. * | 35 | 17,076 | ||||||
9,004,644 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Teva Pharmaceutical Industries Ltd. | 9,646 | 544,491 | ||||||
Teva Pharmaceutical Industries Ltd. ADR | 73,599 | 4,156,136 | ||||||
4,700,627 |
See financial notes 41
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Mellanox Technologies Ltd. * | 60,840 | 2,725,024 | ||||||
Software & Services 0.3% | ||||||||
Check Point Software Technologies Ltd. * | 69,045 | 5,126,591 | ||||||
NICE-Systems Ltd. | 537 | 21,771 | ||||||
5,148,362 | ||||||||
Telecommunication Services 0.0% | ||||||||
Bezeq The Israeli Telecommunication Corp., Ltd. | 26,399 | 45,119 | ||||||
21,781,294 | ||||||||
Italy 2.3% | ||||||||
Automobiles & Components 0.0% | ||||||||
Pirelli & C. S.p.A | 1,854 | 24,861 | ||||||
Banks 1.1% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. * | 32,176 | 24,618 | ||||||
Banca Popolare Di Milano Scarl * | 6,339,780 | 4,778,441 | ||||||
Banco Popolare SC * | 2,858 | 41,516 | ||||||
Intesa Sanpaolo S.p.A. | 6,859,526 | 20,165,350 | ||||||
UniCredit S.p.A. | 35,434 | 256,639 | ||||||
Unione di Banche Italiane S.C.p.A. | 6,783 | 53,270 | ||||||
25,319,834 | ||||||||
Capital Goods 0.3% | ||||||||
Finmeccanica S.p.A. * | 3,165 | 28,600 | ||||||
Interpump Group S.p.A. | 425,430 | 5,548,198 | ||||||
Prysmian S.p.A. | 1,487 | 25,771 | ||||||
5,602,569 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Luxottica Group S.p.A. | 1,339 | 68,299 | ||||||
Prada S.p.A. | 1,483,800 | 9,153,648 | ||||||
9,221,947 | ||||||||
Diversified Financials 0.5% | ||||||||
Azimut Holding S.p.A. | 39,417 | 922,597 | ||||||
Banca Generali S.p.A. | 255,880 | 6,789,206 | ||||||
Exor S.p.A. | 67,785 | 2,957,891 | ||||||
Mediobanca S.p.A. | 4,816 | 42,507 | ||||||
10,712,201 | ||||||||
Energy 0.0% | ||||||||
Eni S.p.A. | 20,429 | 435,238 | ||||||
Saipem S.p.A. * | 2,112 | 33,063 | ||||||
Tenaris S.A. | 3,781 | 74,768 | ||||||
543,069 | ||||||||
Insurance 0.0% | ||||||||
Assicurazioni Generali S.p.A. | 9,370 | 192,277 | ||||||
UnipolSai S.p.A. | 7,022 | 18,880 | ||||||
211,157 | ||||||||
Telecommunication Services 0.0% | ||||||||
Telecom Italia S.p.A. * | 80,626 | 91,372 | ||||||
Transportation 0.0% | ||||||||
Atlantia S.p.A. | 3,307 | 78,102 | ||||||
Utilities 0.0% | ||||||||
Enel Green Power S.p.A. | 13,956 | 34,308 | ||||||
Enel S.p.A. | 52,840 | 270,008 | ||||||
Snam S.p.A. | 16,256 | 87,904 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 12,062 | 60,813 | ||||||
453,033 | ||||||||
52,258,145 | ||||||||
Japan 14.1% | ||||||||
Automobiles & Components 2.6% | ||||||||
Aisin Seiki Co., Ltd. | 1,500 | 49,963 | ||||||
Bridgestone Corp. | 5,200 | 173,772 | ||||||
Daihatsu Motor Co., Ltd. | 2,100 | 29,805 | ||||||
Denso Corp. | 3,900 | 178,751 | ||||||
F.C.C. Co., Ltd. | 260,400 | 4,431,702 | ||||||
Fuji Heavy Industries Ltd. | 193,300 | 6,433,633 | ||||||
Honda Motor Co., Ltd. | 415,107 | 13,270,651 | ||||||
Isuzu Motors Ltd. | 4,800 | 62,627 | ||||||
Koito Manufacturing Co., Ltd. | 885 | 26,667 | ||||||
Mazda Motor Corp. | 4,300 | 101,595 | ||||||
Mitsubishi Motors Corp. | 5,100 | 52,475 | ||||||
Musashi Seimitsu Industry Co., Ltd. | 192,300 | 3,775,197 | ||||||
NGK Spark Plug Co., Ltd. | 1,400 | 36,513 | ||||||
NHK Spring Co., Ltd. | 1,000 | 9,152 | ||||||
Nifco, Inc. | 406,400 | 12,877,436 | ||||||
Nissan Motor Co., Ltd. | 19,900 | 181,522 | ||||||
NOK Corp. | 900 | 22,801 | ||||||
Stanley Electric Co., Ltd. | 1,400 | 28,463 | ||||||
Sumitomo Electric Industries Ltd. | 6,000 | 82,012 | ||||||
Sumitomo Rubber Industries Ltd. | 1,200 | 16,585 | ||||||
Suzuki Motor Corp. | 2,900 | 97,204 | ||||||
The Yokohama Rubber Co., Ltd. | 1,000 | 9,078 | ||||||
Toyoda Gosei Co., Ltd. | 400 | 7,685 | ||||||
Toyota Industries Corp. | 1,314 | 62,568 | ||||||
Toyota Motor Corp. | 243,777 | 14,669,812 | ||||||
Yamaha Motor Co., Ltd. | 2,100 | 39,727 | ||||||
56,727,396 | ||||||||
Banks 0.5% | ||||||||
Aozora Bank Ltd. | 9,000 | 31,634 | ||||||
Fukuoka Financial Group, Inc. | 6,000 | 30,702 | ||||||
Hokuhoku Financial Group, Inc. | 8,000 | 16,071 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 102,400 | 596,912 | ||||||
Mizuho Financial Group, Inc. | 185,100 | 337,311 | ||||||
Resona Holdings, Inc. | 17,700 | 101,240 | ||||||
Seven Bank Ltd. | 4,100 | 17,123 | ||||||
Shinsei Bank Ltd. | 13,000 | 29,216 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 177,700 | 7,247,122 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 27,000 | 110,234 | ||||||
Suruga Bank Ltd. | 120,300 | 2,515,035 | ||||||
The Bank of Kyoto Ltd. | 3,000 | 25,997 | ||||||
The Bank of Yokohama Ltd. | 9,000 | 52,013 | ||||||
The Chiba Bank Ltd. | 6,000 | 42,618 | ||||||
The Chugoku Bank Ltd. | 1,500 | 22,171 | ||||||
The Gunma Bank Ltd. | 4,000 | 24,962 | ||||||
The Hachijuni Bank Ltd. | 4,000 | 24,491 | ||||||
The Hiroshima Bank Ltd. | 5,000 | 24,997 | ||||||
The Iyo Bank Ltd. | 2,300 | 24,560 | ||||||
The Joyo Bank Ltd. | 5,000 | 26,773 | ||||||
The Shizuoka Bank Ltd. | 4,454 | 46,022 |
42 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Yamaguchi Financial Group, Inc. | 1,274 | 12,168 | ||||||
11,359,372 | ||||||||
Capital Goods 2.6% | ||||||||
Aica Kogyo Co., Ltd. | 277,100 | 5,735,710 | ||||||
Aida Engineering Ltd. | 554,500 | 5,388,679 | ||||||
Amada Co., Ltd. | 3,500 | 30,567 | ||||||
Asahi Glass Co., Ltd. | 8,000 | 41,637 | ||||||
Chiyoda Corp. | 1,417 | 14,598 | ||||||
Daifuku Co., Ltd. | 259,500 | 3,005,537 | ||||||
Daikin Industries Ltd. | 84,500 | 5,281,933 | ||||||
FANUC Corp. | 23,699 | 4,176,611 | ||||||
Fuji Electric Co., Ltd. | 4,000 | 17,574 | ||||||
Hino Motors Ltd. | 2,100 | 30,730 | ||||||
Hitachi Construction Machinery Co., Ltd. | 700 | 14,318 | ||||||
Hoshizaki Electric Co., Ltd. | 113,100 | 5,478,300 | ||||||
IHI Corp. | 11,000 | 53,027 | ||||||
ITOCHU Corp. | 215,600 | 2,606,289 | ||||||
JGC Corp. | 2,000 | 51,400 | ||||||
JTEKT Corp. | 2,200 | 35,383 | ||||||
Kajima Corp. | 6,000 | 26,697 | ||||||
Kanamoto Co., Ltd. | 173,200 | 6,321,877 | ||||||
Kawasaki Heavy Industries Ltd. | 11,000 | 43,207 | ||||||
Komatsu Ltd. | 7,500 | 177,070 | ||||||
Kubota Corp. | 9,000 | 143,262 | ||||||
Kurita Water Industries Ltd. | 900 | 19,421 | ||||||
LIXIL Group Corp. | 2,100 | 46,054 | ||||||
Mabuchi Motor Co., Ltd. | 200 | 17,275 | ||||||
Maeda Corp. | 453,000 | 4,005,083 | ||||||
Makita Corp. | 1,000 | 55,999 | ||||||
Marubeni Corp. | 13,245 | 85,158 | ||||||
Minebea Co., Ltd. | 118,124 | 1,618,586 | ||||||
Mitsubishi Corp. | 11,249 | 220,574 | ||||||
Mitsubishi Electric Corp. | 16,000 | 206,301 | ||||||
Mitsubishi Heavy Industries Ltd. | 24,000 | 149,713 | ||||||
Mitsui & Co., Ltd. | 13,700 | 206,857 | ||||||
Nabtesco Corp. | 800 | 19,360 | ||||||
NGK Insulators Ltd. | 2,000 | 43,076 | ||||||
Nidec Corp. | 34,400 | 2,272,899 | ||||||
NSK Ltd. | 4,000 | 52,392 | ||||||
Obayashi Corp. | 5,000 | 34,313 | ||||||
Sanwa Holdings Corp. | 789,600 | 5,475,097 | ||||||
Seibu Holdings, Inc. | 900 | 17,304 | ||||||
Shimizu Corp. | 6,000 | 44,278 | ||||||
SMC Corp. | 10,237 | 2,903,555 | ||||||
Sumitomo Corp. | 9,000 | 96,027 | ||||||
Sumitomo Heavy Industries Ltd. | 5,000 | 27,412 | ||||||
Tadano Ltd. | 132,000 | 1,973,185 | ||||||
Taisei Corp. | 8,000 | 44,488 | ||||||
THK Co., Ltd. | 1,100 | 27,668 | ||||||
Toshiba Corp. | 32,000 | 141,316 | ||||||
TOTO Ltd. | 2,313 | 26,100 | ||||||
Toyota Tsusho Corp. | 1,700 | 42,866 | ||||||
58,546,763 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Dai Nippon Printing Co., Ltd. | 4,000 | 39,427 | ||||||
Meitec Corp. | 34,900 | 1,094,427 | ||||||
Nihon M&A Center, Inc. | 89,600 | 2,575,037 | ||||||
Park24 Co., Ltd. | 600 | 9,079 | ||||||
Recruit Holdings Co., Ltd. * | 24,500 | 805,943 | ||||||
Secom Co., Ltd. | 79,800 | 4,917,676 | ||||||
Sohgo Security Services Co., Ltd. | 235,100 | 5,497,940 | ||||||
Temp Holdings Co., Ltd. | 23,200 | 753,875 | ||||||
Toppan Printing Co., Ltd. | 4,000 | 27,217 | ||||||
15,720,621 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Asics Corp. | 1,200 | 28,100 | ||||||
Bandai Namco Holdings, Inc. | 1,400 | 34,745 | ||||||
Casio Computer Co., Ltd. | 2,100 | 33,486 | ||||||
Fujitsu General Ltd. | 235,000 | 2,941,826 | ||||||
Iida Group Holdings Co., Ltd. | 2,000 | 22,224 | ||||||
Nikon Corp. | 2,700 | 36,995 | ||||||
Panasonic Corp. | 17,700 | 212,953 | ||||||
Rinnai Corp. | 300 | 26,648 | ||||||
Sankyo Co., Ltd. | 300 | 10,917 | ||||||
Sega Sammy Holdings, Inc. | 1,800 | 28,594 | ||||||
Sekisui Chemical Co., Ltd. | 3,000 | 37,390 | ||||||
Sekisui House Ltd. | 4,355 | 54,154 | ||||||
Sharp Corp. * | 11,419 | 28,758 | ||||||
Shimano, Inc. | 645 | 85,530 | ||||||
Sony Corp. | 8,400 | 165,844 | ||||||
Yamaha Corp. | 1,100 | 15,078 | ||||||
3,763,242 | ||||||||
Consumer Services 0.0% | ||||||||
Benesse Holdings, Inc. | 500 | 15,777 | ||||||
McDonald’s Holdings Co., Ltd. | 400 | 9,763 | ||||||
Oriental Land Co., Ltd. | 400 | 85,536 | ||||||
111,076 | ||||||||
Diversified Financials 1.2% | ||||||||
Acom Co., Ltd. * | 2,300 | 7,666 | ||||||
AEON Financial Service Co., Ltd. | 1,100 | 22,988 | ||||||
Credit Saison Co., Ltd. | 1,500 | 31,666 | ||||||
Daiwa Securities Group, Inc. | 1,802,000 | 14,241,128 | ||||||
Japan Exchange Group, Inc. | 2,100 | 52,093 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 4,700 | 24,814 | ||||||
Nomura Holdings, Inc. | 29,100 | 181,770 | ||||||
ORIX Corp. | 389,200 | 5,402,190 | ||||||
SBI Holdings, Inc. | 1,936 | 22,325 | ||||||
Zenkoku Hosho Co., Ltd. | 235,700 | 7,448,692 | ||||||
27,435,332 | ||||||||
Energy 0.0% | ||||||||
Idemitsu Kosan Co., Ltd. | 600 | 11,604 | ||||||
Inpex Corp. | 7,000 | 89,533 | ||||||
JX Holdings, Inc. | 18,000 | 77,106 | ||||||
Showa Shell Sekiyu K.K. | 1,200 | 10,296 | ||||||
TonenGeneral Sekiyu K.K. | 2,367 | 20,659 | ||||||
209,198 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Aeon Co., Ltd. | 5,100 | 50,464 | ||||||
FamilyMart Co., Ltd. | 600 | 24,092 | ||||||
Lawson, Inc. | 529 | 35,886 | ||||||
Seven & i Holdings Co., Ltd. | 6,000 | 234,336 | ||||||
Tsuruha Holdings, Inc. | 19,400 | 1,145,390 | ||||||
1,490,168 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Ajinomoto Co., Inc. | 5,142 | 97,084 | ||||||
Ariake Japan Co., Ltd. | 153,900 | 3,468,794 | ||||||
Asahi Group Holdings Ltd. | 53,000 | 1,643,999 | ||||||
Calbee, Inc. | 700 | 24,517 |
See financial notes 43
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Japan Tobacco, Inc. | 8,800 | 300,247 | ||||||
Kikkoman Corp. | 1,314 | 30,224 | ||||||
Kirin Holdings Co., Ltd. | 6,600 | 85,568 | ||||||
MEIJI Holdings Co., Ltd. | 500 | 41,951 | ||||||
NH Foods Ltd. | 1,000 | 23,060 | ||||||
Nisshin Seifun Group, Inc. | 1,900 | 19,213 | ||||||
Nissin Foods Holdings Co., Ltd. | 600 | 31,623 | ||||||
Suntory Beverage & Food Ltd. | 1,100 | 39,242 | ||||||
Toyo Suisan Kaisha Ltd. | 365 | 12,606 | ||||||
Yakult Honsha Co., Ltd. | 700 | 38,765 | ||||||
Yamazaki Baking Co., Ltd. | 1,000 | 12,363 | ||||||
5,869,256 | ||||||||
Health Care Equipment & Services 1.4% | ||||||||
Alfresa Holdings Corp. | 1,200 | 15,228 | ||||||
Hogy Medical Co., Ltd. | 97,200 | 5,049,518 | ||||||
M3, Inc. | 333,000 | 5,557,258 | ||||||
Medipal Holdings Corp. | 800 | 8,867 | ||||||
Miraca Holdings, Inc. | 109,800 | 4,609,342 | ||||||
Nihon Kohden Corp. | 155,800 | 7,965,556 | ||||||
Olympus Corp. * | 121,000 | 4,344,514 | ||||||
Suzuken Co., Ltd. | 700 | 18,768 | ||||||
Sysmex Corp. | 55,800 | 2,382,109 | ||||||
Terumo Corp. | 2,400 | 59,997 | ||||||
30,011,157 | ||||||||
Household & Personal Products 0.3% | ||||||||
Fancl Corp. | 308,700 | 4,234,593 | ||||||
Kao Corp. | 79,600 | 3,103,928 | ||||||
Shiseido Co., Ltd. | 2,800 | 46,464 | ||||||
Unicharm Corp. | 3,000 | 69,760 | ||||||
7,454,745 | ||||||||
Insurance 0.0% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 4,010 | 86,683 | ||||||
Sompo Japan Nipponkoa Holdings, Inc. | 2,700 | 67,988 | ||||||
Sony Financial Holdings, Inc. | 1,300 | 20,754 | ||||||
T&D Holdings, Inc. | 4,600 | 59,255 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 8,600 | 130,150 | ||||||
Tokio Marine Holdings, Inc. | 5,600 | 179,581 | ||||||
544,411 | ||||||||
Materials 0.6% | ||||||||
Air Water, Inc. | 1,278 | 20,372 | ||||||
Asahi Kasei Corp. | 487,463 | 4,000,224 | ||||||
Daicel Corp. | 2,000 | 23,055 | ||||||
Daido Steel Co., Ltd. | 1,373 | 5,267 | ||||||
Hitachi Chemical Co., Ltd. | 700 | 12,338 | ||||||
Hitachi Metals Ltd. | 2,000 | 33,766 | ||||||
JFE Holdings, Inc. | 3,900 | 77,376 | ||||||
JSR Corp. | 1,800 | 32,415 | ||||||
Kaneka Corp. | 1,337 | 7,346 | ||||||
Kansai Paint Co., Ltd. | 2,373 | 36,275 | ||||||
Kobe Steel Ltd. | 24,000 | 38,132 | ||||||
Kuraray Co., Ltd. | 2,500 | 29,038 | ||||||
Kureha Corp. | 1,073,000 | 5,321,688 | ||||||
Maruichi Steel Tube Ltd. | 300 | 7,085 | ||||||
Mitsubishi Chemical Holdings Corp. | 10,800 | 53,200 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 4,000 | 23,933 | ||||||
Mitsubishi Materials Corp. | 11,000 | 34,429 | ||||||
Mitsui Chemicals, Inc. | 6,000 | 17,380 | ||||||
Nippon Paint Holdings Co., Ltd. | 1,000 | 22,707 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 61,000 | 160,969 | ||||||
Nitto Denko Corp. | 1,300 | 70,309 | ||||||
Oji Holdings Corp. | 8,000 | 28,924 | ||||||
OSAKA Titanium technologies Co., Ltd. | 105,900 | 2,059,446 | ||||||
Shin-Etsu Chemical Co., Ltd. | 3,324 | 213,363 | ||||||
Sumitomo Chemical Co., Ltd. | 12,000 | 41,165 | ||||||
Sumitomo Metal Mining Co., Ltd. | 4,000 | 55,490 | ||||||
Taiheiyo Cement Corp. | 9,000 | 33,021 | ||||||
Taiyo Nippon Sanso Corp. | 2,000 | 18,006 | ||||||
Teijin Ltd. | 6,000 | 14,669 | ||||||
Toray Industries, Inc. | 12,000 | 80,561 | ||||||
Toyo Seikan Group Holdings Ltd. | 1,100 | 13,339 | ||||||
Yamato Kogyo Co., Ltd. | 200 | 6,479 | ||||||
12,591,767 | ||||||||
Media 0.0% | ||||||||
Dentsu, Inc. | 1,700 | 63,205 | ||||||
Hakuhodo DY Holdings, Inc. | 1,600 | 15,823 | ||||||
Toho Co., Ltd. | 800 | 18,350 | ||||||
97,378 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Astellas Pharma, Inc. | 409,900 | 6,361,848 | ||||||
Chugai Pharmaceutical Co., Ltd. | 1,800 | 56,273 | ||||||
Daiichi Sankyo Co., Ltd. | 5,100 | 76,713 | ||||||
Eisai Co., Ltd. | 2,000 | 78,218 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 500 | 16,831 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 2,000 | 23,327 | ||||||
Mitsubishi Tanabe Pharma Corp. | 1,800 | 27,373 | ||||||
Ono Pharmaceutical Co., Ltd. | 700 | 70,661 | ||||||
Otsuka Holdings Co., Ltd. | 3,100 | 108,742 | ||||||
Santen Pharmaceutical Co., Ltd. | 600 | 35,812 | ||||||
Shionogi & Co., Ltd. | 2,400 | 62,788 | ||||||
Sumitomo Dainippon Pharma Co., Ltd. | 1,100 | 12,976 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. | 300 | 21,057 | ||||||
Takeda Pharmaceutical Co., Ltd. | 6,300 | 273,094 | ||||||
7,225,713 | ||||||||
Real Estate 0.3% | ||||||||
Aeon Mall Co., Ltd. | 1,100 | 20,191 | ||||||
Daito Trust Construction Co., Ltd. | 23,000 | 2,865,818 | ||||||
Daiwa House Industry Co., Ltd. | 4,800 | 90,814 | ||||||
Hulic Co., Ltd. | 1,800 | 19,914 | ||||||
Japan Prime Realty Investment Corp. | 5 | 18,413 | ||||||
Japan Real Estate Investment Corp. | 10 | 54,493 | ||||||
Japan Retail Fund Investment Corp. | 19 | 38,255 | ||||||
Mitsubishi Estate Co., Ltd. | 9,587 | 244,226 | ||||||
Mitsui Fudosan Co., Ltd. | 7,000 | 225,165 | ||||||
Nippon Building Fund, Inc. | 11 | 61,651 | ||||||
Nippon Prologis REIT, Inc. | 13 | 30,166 | ||||||
Nomura Real Estate Holdings, Inc. | 1,200 | 21,209 | ||||||
NTT Urban Development Corp. | 700 | 7,923 | ||||||
Sumitomo Realty & Development Co., Ltd. | 83,495 | 3,130,141 |
44 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tokyo Tatemono Co., Ltd. | 3,460 | 30,204 | ||||||
Tokyu Fudosan Holdings Corp. | 4,800 | 34,115 | ||||||
United Urban Investment Corp. | 18 | 28,408 | ||||||
6,921,106 | ||||||||
Retailing 0.8% | ||||||||
ABC-Mart, Inc. | 200 | 11,532 | ||||||
Don Quijote Holdings Co., Ltd. | 400 | 23,966 | ||||||
Fast Retailing Co., Ltd. | 430 | 159,856 | ||||||
Hikari Tsushin, Inc. | 100 | 6,634 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 3,400 | 46,288 | ||||||
J. Front Retailing Co., Ltd. | 2,400 | 31,944 | ||||||
Marui Group Co., Ltd. | 1,600 | 13,522 | ||||||
Nitori Holdings Co., Ltd. | 27,200 | 1,723,815 | ||||||
Rakuten, Inc. | 6,400 | 72,169 | ||||||
Ryohin Keikaku Co., Ltd. | 71,500 | 9,654,717 | ||||||
Sanrio Co., Ltd. | 300 | 8,674 | ||||||
Seria Co., Ltd. | 126,200 | 5,299,897 | ||||||
Shimamura Co., Ltd. | 142 | 12,489 | ||||||
Start Today Co., Ltd. | 43,100 | 932,562 | ||||||
Takashimaya Co., Ltd. | 2,000 | 17,037 | ||||||
USS Co., Ltd. | 2,200 | 34,624 | ||||||
Yamada Denki Co., Ltd. | 8,400 | 26,927 | ||||||
18,076,653 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Advantest Corp. | 1,100 | 12,827 | ||||||
Rohm Co., Ltd. | 800 | 48,697 | ||||||
Tokyo Electron Ltd. | 1,400 | 89,760 | ||||||
151,284 | ||||||||
Software & Services 0.2% | ||||||||
Dena Co., Ltd. | 600 | 7,753 | ||||||
Fujitsu Ltd. | 15,000 | 91,192 | ||||||
Gree, Inc. | 1,400 | 10,026 | ||||||
GungHo Online Entertainment, Inc. | 3,100 | 12,495 | ||||||
Itochu Techno-Solutions Corp. | 100 | 3,976 | ||||||
Kakaku.com, Inc. | 1,000 | 13,615 | ||||||
Konami Corp. | 700 | 14,055 | ||||||
Nexon Co., Ltd. | 1,600 | 14,100 | ||||||
Nintendo Co., Ltd. | 900 | 97,000 | ||||||
Nomura Research Institute Ltd. | 49,300 | 1,626,101 | ||||||
NS Solutions Corp. | 46,000 | 1,416,072 | ||||||
NTT Data Corp. | 1,000 | 39,091 | ||||||
Oracle Corp., Japan | 200 | 7,743 | ||||||
Otsuka Corp. | 17,400 | 646,988 | ||||||
SCSK Corp. | 27,600 | 741,978 | ||||||
Trend Micro, Inc. | 1,000 | 33,696 | ||||||
Yahoo Japan Corp. | 11,400 | 41,070 | ||||||
4,816,951 | ||||||||
Technology Hardware & Equipment 1.8% | ||||||||
Brother Industries Ltd. | 1,700 | 30,268 | ||||||
Canon, Inc. | 146,360 | 4,490,348 | ||||||
Citizen Holdings Co., Ltd. | 1,700 | 11,168 | ||||||
FUJIFILM Holdings Corp. | 3,700 | 124,204 | ||||||
Hamamatsu Photonics K.K. | 700 | 31,801 | ||||||
Hirose Electric Co., Ltd. | 300 | 36,783 | ||||||
Hitachi High-Technologies Corp. | 400 | 12,220 | ||||||
Hitachi Ltd. | 39,000 | 306,441 | ||||||
Horiba Ltd. | 87,300 | 3,158,318 | ||||||
Hoya Corp. | 109,600 | 3,878,397 | ||||||
Ibiden Co., Ltd. | 800 | 12,025 | ||||||
Iriso Electronics Co., Ltd. | 64,300 | 4,381,336 | ||||||
Japan Aviation Electronics Industry Ltd. | 265,000 | 5,250,395 | ||||||
Japan Display, Inc. * | 2,000 | 5,937 | ||||||
Keyence Corp. | 9,700 | 4,700,451 | ||||||
Konica Minolta, Inc. | 3,800 | 42,460 | ||||||
Kyocera Corp. | 2,600 | 119,838 | ||||||
Murata Manufacturing Co., Ltd. | 43,124 | 4,845,431 | ||||||
NEC Corp. | 21,000 | 74,264 | ||||||
Nippon Electric Glass Co., Ltd. | 3,000 | 13,950 | ||||||
Omron Corp. | 59,900 | 2,835,346 | ||||||
Ricoh Co., Ltd. | 5,700 | 58,866 | ||||||
Seiko Epson Corp. | 130,600 | 6,060,455 | ||||||
Shimadzu Corp. | 2,000 | 17,403 | ||||||
TDK Corp. | 1,000 | 56,762 | ||||||
Yaskawa Electric Corp. | 2,221 | 28,789 | ||||||
Yokogawa Electric Corp. | 2,100 | 29,217 | ||||||
40,612,873 | ||||||||
Telecommunication Services 0.1% | ||||||||
KDDI Corp. | 4,700 | 308,646 | ||||||
Nippon Telegraph & Telephone Corp. | 3,000 | 186,657 | ||||||
NTT DOCOMO, Inc. | 12,300 | 207,450 | ||||||
SoftBank Corp. | 7,731 | 562,812 | ||||||
1,265,565 | ||||||||
Transportation 0.1% | ||||||||
ANA Holdings, Inc. | 13,000 | 30,143 | ||||||
Central Japan Railway Co. | 1,200 | 178,979 | ||||||
East Japan Railway Co. | 2,738 | 213,847 | ||||||
Hankyu Hanshin Holdings, Inc. | 9,000 | 52,916 | ||||||
Japan Airlines Co., Ltd. | 1,000 | 26,852 | ||||||
Kamigumi Co., Ltd. | 2,000 | 19,284 | ||||||
Keikyu Corp. | 3,000 | 24,960 | ||||||
Keio Corp. | 4,000 | 30,383 | ||||||
Keisei Electric Railway Co., Ltd. | 2,266 | 26,633 | ||||||
Kintetsu Corp. | 14,000 | 48,700 | ||||||
Mitsubishi Logistics Corp. | 1,000 | 15,231 | ||||||
Mitsui O.S.K. Lines, Ltd. | 11,000 | 34,753 | ||||||
Nagoya Railroad Co., Ltd. | 8,000 | 34,207 | ||||||
Nippon Express Co., Ltd. | 6,000 | 26,394 | ||||||
Nippon Yusen K.K. | 12,000 | 31,111 | ||||||
Odakyu Electric Railway Co., Ltd. | 5,000 | 46,926 | ||||||
Tobu Railway Co., Ltd. | 8,000 | 40,469 | ||||||
Tokyu Corp. | 9,000 | 59,426 | ||||||
West Japan Railway Co. | 1,300 | 61,965 | ||||||
Yamato Holdings Co., Ltd. | 2,900 | 62,008 | ||||||
1,065,187 | ||||||||
Utilities 0.0% | ||||||||
Chubu Electric Power Co., Inc. * | 5,131 | 61,570 | ||||||
Electric Power Development Co., Ltd. | 900 | 31,474 | ||||||
Hokuriku Electric Power Co. | 1,200 | 16,200 | ||||||
Kyushu Electric Power Co., Inc. * | 3,400 | 36,889 | ||||||
Osaka Gas Co., Ltd. | 15,000 | 59,832 | ||||||
Shikoku Electric Power Co., Inc. * | 1,200 | 16,467 | ||||||
The Chugoku Electric Power Co., Inc. | 2,200 | 29,013 | ||||||
The Kansai Electric Power Co., Inc. * | 5,600 | 55,303 | ||||||
Toho Gas Co., Ltd. | 4,330 | 23,419 | ||||||
Tohoku Electric Power Co., Inc. | 3,600 | 44,994 |
See financial notes 45
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tokyo Electric Power Co., Inc. * | 11,400 | 41,105 | ||||||
Tokyo Gas Co., Ltd. | 19,000 | 109,522 | ||||||
525,788 | ||||||||
312,593,002 | ||||||||
Luxembourg 0.4% | ||||||||
Energy 0.0% | ||||||||
Subsea 7 S.A. | 2,037 | 21,921 | ||||||
Materials 0.3% | ||||||||
APERAM * | 188,920 | 5,435,588 | ||||||
ArcelorMittal | 8,010 | 105,221 | ||||||
5,540,809 | ||||||||
Media 0.0% | ||||||||
RTL Group S.A. | 308 | 28,769 | ||||||
SES S.A. | 2,434 | 84,032 | ||||||
112,801 | ||||||||
Real Estate 0.1% | ||||||||
GAGFAH S.A. * | 40,575 | 758,794 | ||||||
Grand City Properties S.A. * | 143,060 | 1,833,094 | ||||||
2,591,888 | ||||||||
Telecommunication Services 0.0% | ||||||||
Millicom International Cellular S.A. SDR | 528 | 43,093 | ||||||
8,310,512 | ||||||||
Malaysia 0.2% | ||||||||
Food & Staples Retailing 0.1% | ||||||||
7-Eleven Malaysia Holdings Berhad, Class B * | 6,585,200 | 3,343,043 | ||||||
Software & Services 0.1% | ||||||||
My EG Services Berhad | 1,241,600 | 1,517,371 | ||||||
4,860,414 | ||||||||
Mexico 0.1% | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Arca Continental S.A.B. de C.V. | 106,279 | 684,416 | ||||||
Materials 0.0% | ||||||||
Cemex S.A.B. de C.V., Series CPO * | 560,300 | 690,272 | ||||||
Real Estate 0.1% | ||||||||
Fibra Uno Administracion S.A. de C.V. | 368,900 | 1,282,058 | ||||||
2,656,746 | ||||||||
Netherlands 2.3% | ||||||||
Automobiles & Components 0.0% | ||||||||
Fiat Chrysler Automobiles N.V. * | 7,013 | 78,461 | ||||||
Banks 0.0% | ||||||||
ING Groep N.V. CVA * | 30,963 | 443,401 | ||||||
Capital Goods 1.7% | ||||||||
Airbus Group N.V. | 4,719 | 281,729 | ||||||
CNH Industrial N.V. | 1,608,080 | 13,122,547 | ||||||
Koninklijke Boskalis Westminster N.V. | 276,296 | 14,740,488 | ||||||
Koninklijke Philips N.V. | 348,587 | 9,745,755 | ||||||
OCI N.V. * | 903 | 31,482 | ||||||
37,922,001 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Randstad Holding N.V. | 1,007 | 44,450 | ||||||
Energy 0.0% | ||||||||
Fugro N.V. CVA | 450 | 6,215 | ||||||
Koninklijke Vopak N.V. | 550 | 27,582 | ||||||
33,797 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Koninklijke Ahold N.V. | 96,268 | 1,612,357 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Heineken Holding N.V. | 60,606 | 3,928,274 | ||||||
Heineken N.V. | 1,848 | 138,053 | ||||||
Unilever N.V. CVA | 13,082 | 507,038 | ||||||
4,573,365 | ||||||||
Insurance 0.0% | ||||||||
Aegon N.V. | 14,526 | 118,393 | ||||||
Delta Lloyd N.V. | 1,520 | 34,646 | ||||||
153,039 | ||||||||
Materials 0.1% | ||||||||
Akzo Nobel N.V. | 33,464 | 2,231,597 | ||||||
James Hardie Industries plc CDI | 3,336 | 35,584 | ||||||
Koninklijke DSM N.V. | 1,381 | 86,531 | ||||||
2,353,712 | ||||||||
Media 0.0% | ||||||||
Altice S.A. * | 693 | 43,152 | ||||||
Reed Elsevier N.V. | 5,601 | 129,021 | ||||||
Wolters Kluwer N.V. | 2,416 | 64,504 | ||||||
236,677 | ||||||||
Real Estate 0.0% | ||||||||
Corio N.V. | 513 | 24,970 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASML Holding N.V. | 2,869 | 286,074 | ||||||
NXP Semiconductor N.V. * | 40,348 | 2,770,294 | ||||||
3,056,368 | ||||||||
Software & Services 0.0% | ||||||||
Gemalto N.V. | 627 | 47,957 | ||||||
Telecommunication Services 0.0% | ||||||||
Koninklijke (Royal) KPN N.V. | 25,657 | 84,456 | ||||||
Ziggo N.V. * | 1,200 | 58,642 | ||||||
143,098 | ||||||||
Transportation 0.0% | ||||||||
TNT Express N.V. | 4,402 | 25,587 | ||||||
50,749,240 | ||||||||
New Zealand 0.5% | ||||||||
Consumer Services 0.2% | ||||||||
SKYCITY Entertainment Group Ltd. | 1,214,874 | 3,714,354 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Ryman Healthcare Ltd. | 2,586 | 15,311 |
46 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 0.0% | ||||||||
Fletcher Building Ltd. | 5,143 | 34,689 | ||||||
Software & Services 0.0% | ||||||||
Xero Ltd. * | 968 | 12,007 | ||||||
Telecommunication Services 0.0% | ||||||||
Spark New Zealand Ltd. | 13,651 | 33,688 | ||||||
Transportation 0.3% | ||||||||
Auckland International Airport Ltd. | 2,585,225 | 7,815,615 | ||||||
Utilities 0.0% | ||||||||
Contact Energy Ltd. | 2,424 | 11,759 | ||||||
11,637,423 | ||||||||
Norway 0.5% | ||||||||
Banks 0.0% | ||||||||
DNB A.S.A. | 7,839 | 144,020 | ||||||
Capital Goods 0.1% | ||||||||
Hexagon Composites A.S.A. | 390,225 | 1,623,875 | ||||||
Energy 0.2% | ||||||||
Aker Solutions A.S.A. * | 1,419 | 9,193 | ||||||
BW LPG Ltd. | 242,960 | 2,302,844 | ||||||
Farstad Shipping A.S.A. (b) | 94,566 | 1,090,760 | ||||||
Seadrill Ltd. | 3,005 | 67,910 | ||||||
Statoil A.S.A. | 8,957 | 204,985 | ||||||
3,675,692 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Orkla A.S.A. | 6,519 | 49,844 | ||||||
Insurance 0.0% | ||||||||
Gjensidige Forsikring A.S.A. | 45,492 | 826,341 | ||||||
Materials 0.0% | ||||||||
Norsk Hydro A.S.A. | 10,761 | 60,250 | ||||||
Yara International A.S.A. | 1,449 | 66,540 | ||||||
126,790 | ||||||||
Telecommunication Services 0.2% | ||||||||
Telenor A.S.A. | 200,680 | 4,512,619 | ||||||
10,959,181 | ||||||||
Peru 0.1% | ||||||||
Banks 0.1% | ||||||||
Credicorp Ltd. | 13,111 | 2,110,871 | ||||||
Portugal 0.0% | ||||||||
Banks 0.0% | ||||||||
Banco Comercial Portugues S.A., Class R * | 391,289 | 44,226 | ||||||
Banco Espirito Santo S.A. - Reg’d *(a)(b) | 42,176 | — | ||||||
44,226 | ||||||||
Energy 0.0% | ||||||||
Galp Energia, SGPS, S.A. | 3,081 | 44,670 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Jeronimo Martins, SGPS, S.A. | 2,786 | 24,382 | ||||||
Utilities 0.0% | ||||||||
EDP - Energias de Portugal S.A. | 18,549 | 79,822 | ||||||
193,100 | ||||||||
Republic of Korea 1.7% | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Coway Co., Ltd. | 11,027 | 842,977 | ||||||
Hanssem Co., Ltd. | 83,450 | 9,946,934 | ||||||
10,789,911 | ||||||||
Consumer Services 0.2% | ||||||||
Hotel Shilla Co., Ltd. | 38,950 | 3,666,922 | ||||||
Household & Personal Products 0.2% | ||||||||
Cosmax, Inc. * | 48,040 | 4,853,572 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
SK Hynix, Inc. * | 47,360 | 2,111,985 | ||||||
Software & Services 0.0% | ||||||||
NAVER Corp. | 823 | 582,373 | ||||||
Technology Hardware & Equipment 0.7% | ||||||||
Samsung Electronics Co., Ltd. | 13,543 | 15,793,068 | ||||||
37,797,831 | ||||||||
Singapore 2.7% | ||||||||
Banks 0.0% | ||||||||
DBS Group Holdings Ltd. | 13,316 | 191,556 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 22,888 | 176,309 | ||||||
United Overseas Bank Ltd. | 10,000 | 179,157 | ||||||
547,022 | ||||||||
Capital Goods 0.1% | ||||||||
Keppel Corp., Ltd. | 12,000 | 87,998 | ||||||
Sarine Technologies Ltd. (b) | 1,368,000 | 3,172,522 | ||||||
Sembcorp Industries Ltd. | 8,000 | 30,265 | ||||||
Sembcorp Marine Ltd. | 6,000 | 16,998 | ||||||
Singapore Technologies Engineering Ltd. | 12,000 | 35,035 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 12,000 | 10,563 | ||||||
3,353,381 | ||||||||
Consumer Services 0.0% | ||||||||
Genting Singapore plc | 49,000 | 41,967 | ||||||
Diversified Financials 0.0% | ||||||||
Singapore Exchange Ltd. | 6,000 | 32,698 | ||||||
Energy 0.2% | ||||||||
Ezra Holdings Ltd. | 5,292,000 | 3,362,634 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Olam International Ltd. | 8,000 | 13,264 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Golden Agri-Resources Ltd. | 70,000 | 28,368 | ||||||
Wilmar International Ltd. | 15,000 | 37,390 | ||||||
65,758 | ||||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. | 13,000 | 43,331 | ||||||
Real Estate 1.0% | ||||||||
Ascendas REIT | 5,226,000 | 9,077,384 | ||||||
CapitaCommercial Trust | 14,000 | 18,204 | ||||||
CapitaLand Ltd. | 20,000 | 49,378 | ||||||
CapitaMall Trust | 9,017,200 | 13,830,505 | ||||||
City Developments Ltd. | 4,427 | 32,582 | ||||||
Global Logistic Properties Ltd. | 25,000 | 53,574 |
See financial notes 47
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Keppel Land Ltd. | 5,000 | 13,011 | ||||||
UOL Group Ltd. | 3,000 | 15,068 | ||||||
23,089,706 | ||||||||
Retailing 0.0% | ||||||||
Jardine Cycle & Carriage Ltd. | 1,000 | 31,084 | ||||||
Telecommunication Services 0.3% | ||||||||
Singapore Telecommunications Ltd. | 64,000 | 186,420 | ||||||
StarHub Ltd. | 2,095,000 | 6,733,974 | ||||||
6,920,394 | ||||||||
Transportation 0.9% | ||||||||
ComfortDelGro Corp., Ltd. | 15,000 | 30,840 | ||||||
Hutchison Port Holdings Trust, Class U | 44,000 | 29,709 | ||||||
SATS Ltd. | 3,321,000 | 8,014,759 | ||||||
SIA Engineering Co., Ltd. (b) | 3,138,000 | 11,636,499 | ||||||
Singapore Airlines Ltd. | 4,331 | 33,412 | ||||||
19,745,219 | ||||||||
Utilities 0.2% | ||||||||
Hyflux Ltd. (b) | 4,406,000 | 3,463,890 | ||||||
60,710,348 | ||||||||
South Africa 0.2% | ||||||||
Capital Goods 0.1% | ||||||||
The Bidvest Group Ltd. | 48,522 | 1,335,407 | ||||||
Insurance 0.0% | ||||||||
Sanlam Ltd. | 36,290 | 229,318 | ||||||
Telecommunication Services 0.1% | ||||||||
MTN Group Ltd. | 113,139 | 2,505,242 | ||||||
4,069,967 | ||||||||
Spain 1.5% | ||||||||
Banks 0.3% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 277,338 | 3,101,997 | ||||||
Banco de Sabadell S.A. | 27,312 | 78,965 | ||||||
Banco Popular Espanol S.A. | 14,295 | 82,113 | ||||||
Banco Santander S.A. | 95,697 | 845,533 | ||||||
Bankia S.A. * | 36,876 | 66,131 | ||||||
Bankinter S.A. | 303,906 | 2,514,065 | ||||||
CaixaBank S.A. | 14,376 | 78,568 | ||||||
6,767,372 | ||||||||
Capital Goods 0.4% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 1,413 | 52,448 | ||||||
Ferrovial S.A. | 3,289 | 67,244 | ||||||
Gamesa Corp. Tecnologica S.A. * | 847,930 | 8,371,639 | ||||||
Zardoya Otis S.A. | 1,334 | 15,554 | ||||||
8,506,885 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Prosegur Cia de Seguridad S.A. - Reg’d | 679,458 | 3,990,947 | ||||||
Consumer Services 0.1% | ||||||||
Melia Hotels International S.A. | 265,690 | 2,657,739 | ||||||
Energy 0.2% | ||||||||
Repsol S.A. | 185,596 | 4,147,881 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 4,564 | 28,999 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 230,371 | 789,955 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Grifols S.A. | 1,192 | 48,674 | ||||||
Retailing 0.0% | ||||||||
Inditex S.A. | 8,756 | 246,333 | ||||||
Software & Services 0.2% | ||||||||
Amadeus IT Holding S.A., A Shares | 90,599 | 3,333,333 | ||||||
Telecommunication Services 0.0% | ||||||||
Telefonica S.A. | 32,895 | 494,993 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 91,690 | 1,911,951 | ||||||
International Consolidated Airlines Group S.A. * | 8,154 | 53,330 | ||||||
1,965,281 | ||||||||
Utilities 0.0% | ||||||||
Enagas S.A. | 1,623 | 54,467 | ||||||
Gas Natural SDG S.A. | 2,805 | 80,999 | ||||||
Iberdrola S.A. | 40,912 | 289,613 | ||||||
Red Electrica Corp. S.A. | 867 | 75,760 | ||||||
500,839 | ||||||||
33,479,231 | ||||||||
Sweden 2.7% | ||||||||
Banks 0.3% | ||||||||
Nordea Bank AB | 24,387 | 313,659 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 12,186 | 156,520 | ||||||
Svenska Handelsbanken AB, A Shares | 4,006 | 191,508 | ||||||
Swedbank AB, A Shares | 197,205 | 5,226,065 | ||||||
5,887,752 | ||||||||
Capital Goods 1.1% | ||||||||
Alfa Laval AB | 2,516 | 51,864 | ||||||
Assa Abloy AB, B Shares | 2,680 | 142,267 | ||||||
Atlas Copco AB, A Shares | 146,340 | 4,238,851 | ||||||
Atlas Copco AB, B Shares | 196,426 | 5,202,897 | ||||||
Haldex AB | 488,880 | 5,999,984 | ||||||
Sandvik AB | 8,544 | 93,857 | ||||||
Skanska AB, B Shares | 3,040 | 61,969 | ||||||
SKF AB, B Shares | 477,670 | 9,580,827 | ||||||
Volvo AB, B Shares | 12,301 | 141,959 | ||||||
25,514,475 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
AF AB, B Shares (b) | 392,557 | 5,949,130 | ||||||
Intrum Justitia AB | 25,359 | 755,234 | ||||||
Securitas AB, B Shares | 3,149 | 34,845 | ||||||
6,739,209 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Electrolux AB, B Shares | 1,924 | 54,516 |
48 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Husqvarna AB, B Shares | 4,048 | 30,223 | ||||||
84,739 | ||||||||
Diversified Financials 0.1% | ||||||||
Avanza Bank Holding AB | 78,110 | 2,488,826 | ||||||
Industrivarden AB, C Shares | 1,032 | 18,079 | ||||||
Investment AB Kinnevik, B Shares | 1,883 | 59,791 | ||||||
Investor AB, B Shares | 3,653 | 131,115 | ||||||
2,697,811 | ||||||||
Energy 0.0% | ||||||||
Lundin Petroleum AB * | 1,568 | 22,163 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Cloetta AB, B Shares * | 864,180 | 2,509,138 | ||||||
Swedish Match AB | 52,599 | 1,710,363 | ||||||
4,219,501 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Elekta AB, B Shares | 2,715 | 27,842 | ||||||
Getinge AB, B Shares | 1,575 | 36,135 | ||||||
63,977 | ||||||||
Household & Personal Products 0.0% | ||||||||
Svenska Cellulosa AB, S.C.A., B Shares | 4,706 | 105,445 | ||||||
Materials 0.2% | ||||||||
Boliden AB | 2,042 | 33,749 | ||||||
Hexpol AB | 63,008 | 5,582,334 | ||||||
5,616,083 | ||||||||
Retailing 0.4% | ||||||||
Clas Ohlson AB, B Shares | 94,960 | 1,639,647 | ||||||
Hennes & Mauritz AB, B Shares | 178,073 | 7,105,019 | ||||||
8,744,666 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Hexagon AB, B Shares | 25,000 | 843,640 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 24,432 | 288,698 | ||||||
1,132,338 | ||||||||
Telecommunication Services 0.0% | ||||||||
Tele2 AB, B Shares | 3,256 | 41,370 | ||||||
TeliaSonera AB | 19,099 | 132,256 | ||||||
173,626 | ||||||||
61,001,785 | ||||||||
Switzerland 7.1% | ||||||||
Capital Goods 0.8% | ||||||||
ABB Ltd. - Reg’d * | 17,658 | 387,393 | ||||||
Belimo Holding AG - Reg’d | 595 | 1,476,748 | ||||||
Burckhardt Compression Holding AG (b) | 20,264 | 8,681,914 | ||||||
Geberit AG - Reg’d | 6,775 | 2,312,546 | ||||||
Schindler Holding AG | 40,966 | 5,730,619 | ||||||
Schindler Holding AG - Reg’d | 169 | 22,869 | ||||||
Sulzer AG - Reg’d | 240 | 27,355 | ||||||
18,639,444 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Adecco S.A. - Reg’d * | 152,401 | 10,329,985 | ||||||
SGS S.A. - Reg’d | 44 | 96,735 | ||||||
10,426,720 | ||||||||
Consumer Durables & Apparel 0.7% | ||||||||
Cie Financiere Richemont S.A. - Reg’d | 181,891 | 15,335,918 | ||||||
The Swatch Group AG - Bearer Shares | 247 | 117,167 | ||||||
The Swatch Group AG - Reg’d | 396 | 33,503 | ||||||
15,486,588 | ||||||||
Diversified Financials 1.7% | ||||||||
Cembra Money Bank AG | 49,750 | 2,808,514 | ||||||
Credit Suisse Group AG - Reg’d * | 900,610 | 23,995,670 | ||||||
Julius Baer Group Ltd. * | 1,792 | 78,557 | ||||||
Leonteq AG * | 35,260 | 7,688,967 | ||||||
Pargesa Holding S.A. | 238 | 18,526 | ||||||
Partners Group Holding AG | 11,877 | 3,160,604 | ||||||
UBS AG - Reg’d * | 29,325 | 509,907 | ||||||
38,260,745 | ||||||||
Energy 0.0% | ||||||||
Transocean Ltd. | 2,901 | 86,402 | ||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Aryzta AG * | 698 | 59,540 | ||||||
Barry Callebaut AG - Reg’d * | 24 | 25,190 | ||||||
Chocoladefabriken Lindt & Sprungli AG | 7 | 35,133 | ||||||
Chocoladefabriken Lindt & Sprungli AG - Reg’d | 1 | 59,898 | ||||||
Coca-Cola HBC AG CDI * | 1,598 | 34,859 | ||||||
Nestle S.A. - Reg’d | 198,906 | 14,586,592 | ||||||
14,801,212 | ||||||||
Health Care Equipment & Services 0.3% | ||||||||
Sonova Holding AG - Reg’d | 13,585 | 2,118,321 | ||||||
Straumann Holding AG - Reg’d | 14,926 | 3,674,857 | ||||||
5,793,178 | ||||||||
Insurance 0.0% | ||||||||
Baloise Holding AG - Reg’d | 376 | 47,333 | ||||||
Swiss Life Holding AG - Reg’d * | 257 | 58,966 | ||||||
Swiss Re AG * | 2,827 | 228,594 | ||||||
Zurich Insurance Group AG * | 1,199 | 362,851 | ||||||
697,744 | ||||||||
Materials 1.1% | ||||||||
Clariant AG - Reg’d * | 125,381 | 2,187,025 | ||||||
EMS-Chemie Holding AG - Reg’d | 91 | 32,772 | ||||||
Givaudan S.A. - Reg’d * | 494 | 824,966 | ||||||
Glencore plc * | 1,764,836 | 9,054,729 | ||||||
Holcim Ltd. - Reg’d * | 151,536 | 10,755,196 | ||||||
Sika AG | 229 | 818,588 | ||||||
Syngenta AG - Reg’d | 747 | 231,015 | ||||||
23,904,291 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Actelion Ltd. - Reg’d * | 27,900 | 3,322,754 | ||||||
Lonza Group AG - Reg’d * | 419 | 46,168 | ||||||
Novartis AG - Reg’d | 85,020 | 7,890,099 | ||||||
Roche Holding AG | 26,022 | 7,679,128 | ||||||
18,938,149 | ||||||||
Real Estate 0.0% | ||||||||
Swiss Prime Site AG - Reg’d * | 428 | �� | 32,540 | |||||
Telecommunication Services 0.0% | ||||||||
Swisscom AG - Reg’d | 187 | 110,240 |
See financial notes 49
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Transportation 0.5% | ||||||||
Kuehne & Nagel International AG - Reg’d | 82,332 | 10,730,334 | ||||||
157,907,587 | ||||||||
Taiwan 0.9% | ||||||||
Diversified Financials 0.5% | ||||||||
Chailease Holding Co., Ltd. | 3,897,500 | 9,625,203 | ||||||
Fubon Financial Holding Co., Ltd. | 1,357,000 | 2,297,296 | ||||||
11,922,499 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
MediaTek, Inc. | 104,000 | 1,485,427 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. ADR | 128,777 | 2,835,670 | ||||||
4,321,097 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Largan Precision Co., Ltd. | 13,000 | 913,241 | ||||||
TPK Holding Co., Ltd. | 440,000 | 2,597,466 | ||||||
3,510,707 | ||||||||
19,754,303 | ||||||||
Thailand 0.3% | ||||||||
Banks 0.1% | ||||||||
Kasikornbank PCL | 184,800 | 1,339,929 | ||||||
Real Estate 0.2% | ||||||||
Supalai PCL | 5,534,100 | 4,375,287 | ||||||
Telecommunication Services 0.0% | ||||||||
Advanced Info Service PCL - Reg’d | 121,500 | 891,572 | ||||||
6,606,788 | ||||||||
United Arab Emirates 0.1% | ||||||||
Real Estate 0.1% | ||||||||
Emaar Properties PJSC | 454,102 | 1,265,961 | ||||||
United Kingdom 16.9% | ||||||||
Automobiles & Components 0.0% | ||||||||
GKN plc | 13,131 | 67,098 | ||||||
Banks 0.8% | ||||||||
Barclays plc | 131,698 | 506,500 | ||||||
HSBC Holdings plc (f) | 153,211 | 1,562,042 | ||||||
HSBC Holdings plc (f) | 73,737 | 754,521 | ||||||
Lloyds Banking Group plc * | 12,075,686 | 14,912,130 | ||||||
Royal Bank of Scotland Group plc * | 20,127 | 125,141 | ||||||
Standard Chartered plc | 19,814 | 298,253 | ||||||
18,158,587 | ||||||||
Capital Goods 4.5% | ||||||||
Wolseley plc | 82,776 | 4,402,025 | ||||||
Ashtead Group plc | 93,107 | 1,559,936 | ||||||
BAE Systems plc | 25,373 | 186,853 | ||||||
Bodycote plc | 1,553,340 | 15,546,903 | ||||||
Brammer plc | 760,919 | 3,946,909 | ||||||
Bunzl plc | 88,415 | 2,400,948 | ||||||
Cobham plc | 8,983 | 41,903 | ||||||
Diploma plc | 644,181 | 7,167,105 | ||||||
Fenner plc | 715,334 | 3,524,506 | ||||||
Grafton Group plc | 351,360 | 3,566,780 | ||||||
HellermannTyton Group plc | 1,253,952 | 6,119,679 | ||||||
IMI plc | 79,298 | 1,552,868 | ||||||
Interserve plc | 830,605 | 8,432,899 | ||||||
Meggitt plc | 751,102 | 5,425,515 | ||||||
Melrose Industries plc | 7,985 | 32,819 | ||||||
Rolls-Royce Holdings plc * | 15,089 | 204,373 | ||||||
Rotork plc | 363,399 | 14,896,237 | ||||||
Smiths Group plc | 282,855 | 5,282,801 | ||||||
Spirax-Sarco Engineering plc | 233,040 | 10,648,423 | ||||||
The Weir Group plc | 1,707 | 62,389 | ||||||
Travis Perkins plc | 1,955 | 51,800 | ||||||
Ultra Electronics Holdings plc | 178,786 | 4,999,804 | ||||||
100,053,475 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
Aggreko plc | 2,027 | 49,454 | ||||||
Babcock International Group plc | 152,072 | 2,669,021 | ||||||
Capita plc | 146,443 | 2,574,749 | ||||||
G4S plc | 281,880 | 1,153,804 | ||||||
Intertek Group plc | 1,291 | 56,270 | ||||||
6,503,298 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Bellway plc | 400,900 | 11,245,692 | ||||||
Burberry Group plc | 3,555 | 87,359 | ||||||
Persimmon plc * | 2,419 | 56,811 | ||||||
11,389,862 | ||||||||
Consumer Services 1.2% | ||||||||
Carnival plc | 1,471 | 58,657 | ||||||
Compass Group plc | 192,623 | 3,109,111 | ||||||
Domino’s Pizza Group plc | 269,120 | 2,741,432 | ||||||
Greene King plc | 685,693 | 8,815,577 | ||||||
InterContinental Hotels Group plc | 37,733 | 1,433,291 | ||||||
The Restaurant Group plc | 543,380 | 5,887,236 | ||||||
TUI Travel plc | 4,003 | 25,580 | ||||||
Whitbread plc | 52,325 | 3,657,569 | ||||||
William Hill plc | 6,557 | 37,866 | ||||||
25,766,319 | ||||||||
Diversified Financials 0.4% | ||||||||
3i Group plc | 7,689 | 48,905 | ||||||
Aberdeen Asset Management plc | 7,356 | 51,158 | ||||||
Hargreaves Lansdown plc | 1,890 | 30,116 | ||||||
ICAP plc | 5,542 | 37,207 | ||||||
Investec plc | 4,316 | 39,576 | ||||||
London Stock Exchange Group plc | 1,803 | 58,225 | ||||||
Provident Financial plc | 22,307 | 758,579 | ||||||
Schroders plc | 218,092 | 8,434,152 | ||||||
Schroders plc, Non Voting Shares | 1,100 | 33,932 | ||||||
9,491,850 | ||||||||
Energy 0.5% | ||||||||
AMEC plc | 2,239 | 37,333 | ||||||
BG Group plc | 122,134 | 2,035,489 | ||||||
BP plc | 148,112 | 1,065,651 | ||||||
Genel Energy plc * | 75,425 | 848,369 | ||||||
Hunting plc | 462,205 | 5,444,344 | ||||||
Petrofac Ltd. | 2,040 | 34,565 | ||||||
Royal Dutch Shell plc, A Shares | 31,588 | 1,128,379 |
50 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Royal Dutch Shell plc, B Shares | 19,603 | 724,241 | ||||||
Tullow Oil plc | 7,283 | 56,836 | ||||||
11,375,207 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
J. Sainsbury plc | 9,905 | 39,021 | ||||||
Tesco plc | 65,137 | 180,820 | ||||||
WM Morrison Supermarkets plc | 16,585 | 41,179 | ||||||
261,020 | ||||||||
Food, Beverage & Tobacco 1.2% | ||||||||
Associated British Foods plc | 2,857 | 126,085 | ||||||
British American Tobacco plc | 15,047 | 852,828 | ||||||
Diageo plc | 478,974 | 14,126,082 | ||||||
Imperial Tobacco Group plc | 7,685 | 333,850 | ||||||
SABMiller plc | 7,744 | 438,023 | ||||||
Stock Spirits Group plc | 934,910 | 4,561,507 | ||||||
Tate & Lyle plc | 3,477 | 33,651 | ||||||
Unilever plc | 160,267 | 6,446,817 | ||||||
26,918,843 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Smith & Nephew plc | 7,159 | 121,526 | ||||||
Household & Personal Products 0.3% | ||||||||
Reckitt Benckiser Group plc | 81,250 | 6,843,157 | ||||||
Insurance 0.9% | ||||||||
Admiral Group plc | 1,519 | 32,502 | ||||||
Aviva plc | 23,655 | 197,856 | ||||||
Direct Line Insurance Group plc | 11,884 | 52,571 | ||||||
Friends Life Group Ltd. | 11,241 | 58,296 | ||||||
Hiscox Ltd. | 74,186 | 809,129 | ||||||
Legal & General Group plc | 47,482 | 175,982 | ||||||
Old Mutual plc | 39,277 | 121,978 | ||||||
Prudential plc | 407,548 | 9,437,193 | ||||||
RSA Insurance Group plc * | 8,104 | 62,655 | ||||||
Standard Life plc | 19,168 | 121,038 | ||||||
Willis Group Holdings plc | 249,200 | 10,100,076 | ||||||
21,169,276 | ||||||||
Materials 1.3% | ||||||||
Anglo American plc | 11,210 | 236,683 | ||||||
Antofagasta plc | 3,147 | 35,441 | ||||||
BHP Billiton plc | 16,961 | 438,215 | ||||||
Croda International plc | 422,393 | 15,529,838 | ||||||
Fresnillo plc | 1,755 | 19,613 | ||||||
Johnson Matthey plc | 1,642 | 78,392 | ||||||
Randgold Resources Ltd. | 695 | 40,677 | ||||||
Rexam plc | 5,558 | 42,362 | ||||||
Rio Tinto plc | 53,178 | 2,530,286 | ||||||
Victrex plc | 371,275 | 10,085,260 | ||||||
29,036,767 | ||||||||
Media 0.7% | ||||||||
British Sky Broadcasting Group plc | 8,278 | 117,318 | ||||||
ITV plc | 1,559,874 | 5,067,536 | ||||||
Pearson plc | 6,567 | 122,911 | ||||||
Reed Elsevier plc | 82,794 | 1,362,561 | ||||||
Rightmove plc | 40,340 | 1,364,442 | ||||||
WPP plc | 392,751 | 7,671,470 | ||||||
15,706,238 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.3% | ||||||||
AstraZeneca plc | 10,140 | 740,710 | ||||||
BTG plc * | 530,293 | 6,410,056 | ||||||
GlaxoSmithKline plc | 389,313 | 8,803,910 | ||||||
Hikma Pharmaceuticals plc | 281,465 | 8,536,969 | ||||||
Shire plc | 81,979 | 5,500,540 | ||||||
29,992,185 | ||||||||
Real Estate 0.1% | ||||||||
Countrywide plc | 74,803 | 549,400 | ||||||
Derwent London plc | 16,494 | 784,746 | ||||||
Hammerson plc | 6,276 | 61,655 | ||||||
Intu Properties plc | 6,995 | 38,159 | ||||||
Land Securities Group plc | 6,336 | 112,426 | ||||||
Segro plc | 5,536 | 33,727 | ||||||
The British Land Co. plc | 7,703 | 89,946 | ||||||
1,670,059 | ||||||||
Retailing 0.5% | ||||||||
ASOS plc * | 372 | 15,862 | ||||||
Dixons Carphone plc | 7,829 | 49,712 | ||||||
Halfords Group plc | 453,250 | 3,598,021 | ||||||
Kingfisher plc | 18,989 | 91,992 | ||||||
Marks & Spencer Group plc | 13,079 | 85,168 | ||||||
Next plc | 29,195 | 3,013,995 | ||||||
Poundland Group plc * | 648,658 | 3,268,625 | ||||||
Sports Direct International plc * | 2,903 | 29,984 | ||||||
10,153,359 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
ARM Holdings plc | 11,296 | 159,922 | ||||||
Software & Services 0.3% | ||||||||
Telecity Group plc | 456,870 | 5,641,848 | ||||||
The Sage Group plc | 8,683 | 52,580 | ||||||
5,694,428 | ||||||||
Technology Hardware & Equipment 1.4% | ||||||||
Domino Printing Sciences plc | 713,610 | 6,883,621 | ||||||
Halma plc | 790,997 | 7,892,508 | ||||||
Laird plc | 1,083,597 | 5,469,452 | ||||||
Oxford Instruments plc | 209,593 | 3,631,760 | ||||||
Spectris plc | 229,835 | 6,638,520 | ||||||
30,515,861 | ||||||||
Telecommunication Services 0.3% | ||||||||
BT Group plc | 1,132,521 | 6,676,585 | ||||||
Inmarsat plc | 3,182 | 34,938 | ||||||
Vodafone Group plc | 212,392 | 706,300 | ||||||
7,417,823 | ||||||||
Transportation 0.2% | ||||||||
easyJet plc | 156,954 | 3,771,441 | ||||||
Royal Mail plc | 5,187 | 36,708 | ||||||
3,808,149 | ||||||||
Utilities 0.2% | ||||||||
Centrica plc | 40,451 | 196,186 | ||||||
National Grid plc | 29,992 | 445,080 | ||||||
Severn Trent plc | 1,915 | 61,210 | ||||||
SSE plc | 108,020 | 2,768,659 | ||||||
United Utilities Group plc | 5,460 | 74,847 | ||||||
3,545,982 | ||||||||
375,820,291 |
See financial notes 51
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
United States 0.0% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
ICON plc * | 13,751 | 723,440 | ||||||
Total Common Stock | ||||||||
(Cost $1,835,934,796) | 2,081,026,614 | |||||||
Preferred Stock 0.2% of net assets | ||||||||
Brazil 0.1% | ||||||||
Banks 0.1% | ||||||||
Itau Unibanco Holding S.A. | 129,750 | 1,924,336 | ||||||
Germany 0.1% | ||||||||
Automobiles & Components 0.0% | ||||||||
Bayerische Motoren Werke AG | 404 | 32,394 | ||||||
Porsche Automobil Holding SE | 1,227 | 100,752 | ||||||
Volkswagen AG | 1,305 | 279,077 | ||||||
412,223 | ||||||||
Capital Goods 0.1% | ||||||||
Jungheinrich AG | 24,840 | 1,404,335 | ||||||
Household & Personal Products 0.0% | ||||||||
Henkel AG & Co. KGaA | 1,429 | 141,425 | ||||||
Materials 0.0% | ||||||||
Fuchs Petrolub SE | 700 | 27,264 | ||||||
1,985,247 | ||||||||
Italy 0.0% | ||||||||
Banks 0.0% | ||||||||
Intesa Sanpaolo S.p.A. - RSP | 6,481 | 16,570 | ||||||
Telecommunication Services 0.0% | ||||||||
Telecom Italia S.p.A. - RSP | 47,559 | 42,553 | ||||||
59,123 | ||||||||
United Kingdom 0.0% | ||||||||
Capital Goods 0.0% | ||||||||
Rolls-Royce Holdings plc, C Shares *(a)(b) | 1,910,070 | 3,056 | ||||||
Total Preferred Stock | ||||||||
(Cost $3,877,742) | 3,971,762 | |||||||
Other Investment Companies 3.9% of net assets | ||||||||
Equity Fund 2.6% | ||||||||
Vanguard FTSE Emerging Markets ETF | 1,367,000 | 58,288,880 | ||||||
Money Market Fund 1.3% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (c) | 28,882,348 | 28,882,348 | ||||||
Total Other Investment Companies | ||||||||
(Cost $92,207,503) | 87,171,228 | |||||||
Rights 0.0% of net assets | ||||||||
Spain 0.0% | ||||||||
Banks 0.0% | ||||||||
Banco Santander S.A. * | 135,514 | 25,813 | ||||||
Total Rights | ||||||||
(Cost $26,110) | 25,813 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.01%, 12/11/14 (d)(e) | 75,000 | 74,999 | ||||||
0.01%, 12/18/14 (d)(e) | 739,000 | 738,988 | ||||||
Total Short-Term Investments | ||||||||
(Cost $813,987) | 813,987 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $1,958,909,416 and the unrealized appreciation and depreciation were $292,010,842 and ($77,910,854), respectively, with a net unrealized appreciation of $214,099,988.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $1,783,513,735 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(a) for additional information)
* | 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 $61,966,537 or 2.8% of net assets. | |
(c) | The rate shown is the 7-day yield. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | Securities are traded on separate exchanges for the same entity. |
52 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
ADR — | American Depositary Receipt | |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
ETF — | Exchange Traded Fund | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
AUD — | Australian dollar | |
CHF — | Swiss franc | |
NZD — | New Zealand dollar | |
SEK — | Swedish krona | |
USD — | U.S. dollar |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Depreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/19/14 | 484 | 44,431,200 | (75,899 | ) |
Amount of | Amount of | Unrealized | ||||||||||||||||||||
Currency | Currency | Currency | Currency | Appreciation | ||||||||||||||||||
Expiration | to be | to be | to be | to be | (Depreciation) | |||||||||||||||||
Date | Counterparty | Received | Received | Delivered | Delivered | ($) | ||||||||||||||||
Forward Foreign Currency Exchange Contracts | ||||||||||||||||||||||
12/17/2014 | State Street Bank & Trust Co. | CHF | 5,627,000 | USD | 5,850,637 | (349,572 | ) | |||||||||||||||
03/18/2015 | State Street Bank & Trust Co. | SEK | 6,009,000 | USD | 814,029 | (57,118 | ) | |||||||||||||||
03/18/2015 | State Street Bank & Trust Co. | SEK | 1,212,000 | USD | 164,188 | (974 | ) | |||||||||||||||
06/17/2015 | State Street Bank & Trust Co. | USD | 6,984,988 | AUD | 8,065,000 | 223,993 | ||||||||||||||||
12/17/2014 | State Street Bank & Trust Co. | USD | 30,194,153 | CHF | 29,040,000 | 3,165,985 | ||||||||||||||||
01/30/2015 | State Street Bank & Trust Co. | USD | 6,525,683 | NZD | 8,443,000 | 115,032 | ||||||||||||||||
03/18/2015 | State Street Bank & Trust Co. | USD | 6,221,384 | SEK | 45,925,000 | 618,963 | ||||||||||||||||
Net Unrealized Appreciation on Forward Foreign Currency Exchange Contracts | 3,716,309 | |||||||||||||||||||||
The following is a summary of the inputs used to value the fund’s investments as of October 31, 2014 (see financial note 2(a) for additional information):
Assets Valuation Input
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock1 | $— | $205,340,945 | $— | $205,340,945 | ||||||||||||
Australia1 | — | 76,618,716 | — | 76,618,716 | ||||||||||||
Materials | 49,808 | 18,233,862 | — | 18,283,670 | ||||||||||||
Belgium1 | — | 2,458,612 | — | 2,458,612 | ||||||||||||
Media | 1,113,834 | — | — | 1,113,834 | ||||||||||||
Brazil1 | — | 4,574,180 | — | 4,574,180 | ||||||||||||
Consumer Services | 8,246,047 | — | — | 8,246,047 | ||||||||||||
Diversified Financials | 705,832 | — | — | 705,832 | ||||||||||||
Food, Beverage & Tobacco | 4,084,727 | — | — | 4,084,727 | ||||||||||||
Canada1 | 106,651,463 | — | — | 106,651,463 | ||||||||||||
China1 | — | 44,846,981 | — | 44,846,981 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 1,318,558 | 8,732,344 | — | 10,050,902 | ||||||||||||
Retailing | 5,279,746 | — | — | 5,279,746 | ||||||||||||
Software & Services | 13,179,480 | 3,770,553 | — | 16,950,033 | ||||||||||||
Finland1 | — | 16,666,225 | — | 16,666,225 | ||||||||||||
Energy | 21,509 | — | — | 21,509 |
See financial notes 53
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
France1 | $— | $102,817,258 | $— | $102,817,258 | ||||||||||||
Capital Goods | 5,108,287 | 10,263,852 | — | 15,372,139 | ||||||||||||
Energy | 13,033,168 | 3,955,514 | — | 16,988,682 | ||||||||||||
Health Care Equipment & Services | 10,519,823 | 3,308,573 | — | 13,828,396 | ||||||||||||
Media | 40,554 | 6,894,053 | — | 6,934,607 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 6,634,763 | 5,394,488 | — | 12,029,251 | ||||||||||||
Real Estate | 31,745 | 2,740,229 | — | 2,771,974 | ||||||||||||
Software & Services | 2,612,947 | 1,484,360 | — | 4,097,307 | ||||||||||||
Telecommunication Services | 45,703 | 474,273 | — | 519,976 | ||||||||||||
Germany1 | — | 148,893,410 | — | 148,893,410 | ||||||||||||
Capital Goods | 3,192,548 | 33,438,105 | — | 36,630,653 | ||||||||||||
Hong Kong1 | — | 38,802,922 | — | 38,802,922 | ||||||||||||
Consumer Services | 4,849,918 | 2,899,171 | — | 7,749,089 | ||||||||||||
India1 | — | 22,309,298 | — | 22,309,298 | ||||||||||||
Banks | 1,892,862 | 7,935,849 | — | 9,828,711 | ||||||||||||
Real Estate | 1,932,796 | — | — | 1,932,796 | ||||||||||||
Software & Services | 3,199,158 | 1,990,546 | — | 5,189,704 | ||||||||||||
Ireland1 | — | 15,063,749 | — | 15,063,749 | ||||||||||||
Food, Beverage & Tobacco | 5,145,433 | 542,449 | — | 5,687,882 | ||||||||||||
Israel1 | — | 202,637 | — | 202,637 | ||||||||||||
Materials | 8,942,627 | 62,017 | — | 9,004,644 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 4,156,136 | 544,491 | — | 4,700,627 | ||||||||||||
Semiconductors & Semiconductor Equipment | 2,725,024 | — | — | 2,725,024 | ||||||||||||
Software & Services | 5,126,591 | 21,771 | — | 5,148,362 | ||||||||||||
Japan1 | — | 296,872,381 | — | 296,872,381 | ||||||||||||
Commercial & Professional Supplies | 805,943 | 14,914,678 | — | 15,720,621 | ||||||||||||
Luxembourg1 | — | 5,605,823 | — | 5,605,823 | ||||||||||||
Media | 84,032 | 28,769 | — | 112,801 | ||||||||||||
Real Estate | 1,833,094 | 758,794 | — | 2,591,888 | ||||||||||||
Mexico1 | 2,656,746 | — | — | 2,656,746 | ||||||||||||
Netherlands1 | — | 47,422,398 | — | 47,422,398 | ||||||||||||
Energy | 6,215 | 27,582 | — | 33,797 | ||||||||||||
Media | 43,152 | 193,525 | — | 236,677 | ||||||||||||
Semiconductors & Semiconductor Equipment | 2,770,294 | 286,074 | — | 3,056,368 | ||||||||||||
Norway1 | — | 7,283,489 | — | 7,283,489 | ||||||||||||
Energy | 9,193 | 3,666,499 | — | 3,675,692 | ||||||||||||
Peru1 | 2,110,871 | — | — | 2,110,871 | ||||||||||||
Singapore1 | — | 57,233,194 | — | 57,233,194 | ||||||||||||
Food & Staples Retailing | 13,264 | — | — | 13,264 | ||||||||||||
Utilities | 3,463,890 | — | — | 3,463,890 | ||||||||||||
Sweden1 | — | 52,257,119 | — | 52,257,119 | ||||||||||||
Retailing | 1,639,647 | 7,105,019 | — | 8,744,666 |
54 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Switzerland1 | $— | $139,268,143 | $— | $139,268,143 | ||||||||||||
Capital Goods | 22,869 | 18,616,575 | — | 18,639,444 | ||||||||||||
Taiwan1 | — | 15,433,206 | — | 15,433,206 | ||||||||||||
Semiconductors & Semiconductor Equipment | 2,835,670 | 1,485,427 | — | 4,321,097 | ||||||||||||
Thailand1 | — | 1,339,929 | — | 1,339,929 | ||||||||||||
Real Estate | 4,375,287 | — | — | 4,375,287 | ||||||||||||
Telecommunication Services | 891,572 | — | — | 891,572 | ||||||||||||
United Kingdom1 | — | 171,303,239 | — | 171,303,239 | ||||||||||||
Capital Goods | 14,638,520 | 85,414,955 | — | 100,053,475 | ||||||||||||
Food, Beverage & Tobacco | 4,561,507 | 22,357,336 | �� | — | 26,918,843 | |||||||||||
Insurance | 10,162,731 | 11,006,545 | — | 21,169,276 | ||||||||||||
Media | 122,911 | 15,583,327 | — | 15,706,238 | ||||||||||||
Retailing | 3,268,625 | 6,884,734 | — | 10,153,359 | ||||||||||||
Technology Hardware & Equipment | 6,883,621 | 23,632,240 | — | 30,515,861 | ||||||||||||
United States1 | 723,440 | — | — | 723,440 | ||||||||||||
Preferred Stock1 | — | 2,044,370 | — | 2,044,370 | ||||||||||||
Brazil1 | 1,924,336 | — | — | 1,924,336 | ||||||||||||
United Kingdom1 | — | — | 3,056 | 3,056 | ||||||||||||
Other Investment Companies1 | 87,171,228 | — | — | 87,171,228 | ||||||||||||
Rights | ||||||||||||||||
Spain1 | 25,813 | — | — | 25,813 | ||||||||||||
Short-Term Investments1 | — | 813,987 | — | 813,987 | ||||||||||||
Total | $372,885,558 | $1,800,120,790 | $3,056 | $2,173,009,404 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Forward Foreign Currency Exchange Contracts2 | $— | $4,123,973 | $— | $4,123,973 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts2 | ($75,899 | ) | $— | $— | ($75,899 | ) | ||||||||||
Forward Foreign Currency Exchange Contracts2 | — | (407,664 | ) | — | (407,664 | ) |
1 | As categorized in Portfolio Holdings. | |
2 | Futures contracts and forward foreign currency exchange contracts are not included in Investments in the schedule of portfolio holdings and are valued at unrealized appreciation or depreciation. |
See financial notes 55
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Appreciation | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2013 | (Losses) | (Depreciation) | Purchases | Sales | in | out | 2014 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Hong Kong | $12,251 | $— | ($12,251 | ) | $— | $— | $— | $— | $— | |||||||||||||||||||||||
Japan | 49,426 | — | 278 | — | (49,704 | ) | — | — | — | |||||||||||||||||||||||
Portugal | — | — | (50,231 | ) | 10,646 | — | 39,585 | — | — | |||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
United Kingdom | 53,040 | 1,503 | (55 | ) | 3,066 | (54,498 | ) | — | — | 3,056 | ||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||
Spain | 37,011 | — | (1,669 | ) | — | (35,342 | ) | — | — | — | ||||||||||||||||||||||
Total | $151,728 | $1,503 | ($63,928 | ) | $13,712 | ($139,544 | ) | $39,585 | $— | $3,056 | ||||||||||||||||||||||
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, 2014 was ($62,493).
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, 2014. The transfers in the amount of $41,674,776 and $9,776,880 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 into Level 3 from Level 1 or Level 2 were due to the result of fair valued securities for which no quoted value was available.
56 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments, at value (cost $1,932,860,138) | $2,173,009,404 | |||||
Foreign currency, at value (cost $1,947,375) | 1,935,826 | |||||
Receivables: | ||||||
Investments sold | 60,206,918 | |||||
Dividends | 3,089,349 | |||||
Fund shares sold | 2,369,120 | |||||
Foreign tax reclaims | 1,670,928 | |||||
Variation margin on futures contracts | 98,467 | |||||
Unrealized appreciation on forward foreign currency exchange contracts | 4,123,973 | |||||
Prepaid expenses | + | 173,680 | ||||
Total assets | 2,246,677,665 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 16,575,553 | |||||
Investment adviser and administrator fees | 260,322 | |||||
Shareholder service fees | 468,877 | |||||
Fund shares redeemed | 3,207,763 | |||||
Due to custodian | 1,594,454 | |||||
Foreign capital gains tax | 1,138,481 | |||||
Unrealized depreciation on forward foreign currency exchange contracts | + | 407,664 | ||||
Total liabilities | 23,653,114 | |||||
Net Assets | ||||||
Total assets | 2,246,677,665 | |||||
Total liabilities | − | 23,653,114 | ||||
Net assets | $2,223,024,551 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,982,713,797 | |||||
Net investment income not yet distributed | 18,038,415 | |||||
Net realized capital losses | (20,177,344 | ) | ||||
Net unrealized capital appreciation | 242,449,683 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $631,111,255 | 27,497,580 | $22.95 | |||||||||||
Select Shares | $1,591,913,296 | 69,352,708 | $22.95 |
See financial notes 57
Table of Contents
Laudus International MarketMasters Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $5,216,040) | $56,324,050 | |||||
Interest | + | 573 | ||||
Total investment income | 56,324,623 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 29,000,671 | |||||
Shareholder service fees: | ||||||
Investor Shares | 1,575,105 | |||||
Select Shares | 1,930,919 | |||||
Custodian fees | 1,318,890 | |||||
Portfolio accounting fees | 204,903 | |||||
Transfer agent fees | 170,861 | |||||
Shareholder reports | 88,417 | |||||
Registration fees | 77,372 | |||||
Professional fees | 63,454 | |||||
Independent trustees’ fees | 17,156 | |||||
Interest expense | 577 | |||||
Other expenses | + | 64,258 | ||||
Total expenses | 34,512,583 | |||||
Expense reduction by CSIM and its affiliates | − | 4,829,545 | ||||
Net expenses | − | 29,683,038 | ||||
Net investment income | 26,641,585 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments (net of foreign capital gain tax paid of $100,341) | 222,949,985 | |||||
Net realized gains on futures contracts | 1,912,818 | |||||
Net realized losses on foreign currency transactions | + | (362,111 | ) | |||
Net realized gains | 224,500,692 | |||||
Net change in unrealized appreciation (depreciation) on investments (net of foreign capital gain tax of ($1,093,991)) | (286,796,914 | ) | ||||
Net change in unrealized appreciation (depreciation) on futures contracts | (2,707,984 | ) | ||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 2,789,273 | ||||
Net change in unrealized appreciation (depreciation) | + | (286,715,625 | ) | |||
Net realized and unrealized losses | (62,214,933 | ) | ||||
Decrease in net assets resulting from operations | ($35,573,348 | ) |
58 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $26,641,585 | $23,324,748 | ||||||||
Net realized gains | 224,500,692 | 173,495,399 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (286,715,625 | ) | 265,189,677 | ||||||
Increase (Decrease) in net assets from operations | (35,573,348 | ) | 462,009,824 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ||||||||||
Investor Shares | (9,151,462 | ) | (13,288,779 | ) | ||||||
Select Shares | + | (24,452,646 | ) | (25,873,436 | ) | |||||
Total distributions from net investment income | ($33,604,108 | ) | ($39,162,215 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | �� | |||||||||||||||||
Investor Shares | 2,681,598 | $63,944,369 | 3,013,633 | $63,900,921 | ||||||||||||||
Select Shares | + | 17,762,259 | 421,251,532 | 19,866,078 | 424,219,097 | |||||||||||||
Total shares sold | 20,443,857 | $485,195,901 | 22,879,711 | $488,120,018 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 364,557 | $8,395,762 | 634,180 | $12,214,309 | ||||||||||||||
Select Shares | + | 703,683 | 16,184,703 | 892,608 | 17,173,788 | |||||||||||||
Total shares reinvested | 1,068,240 | $24,580,465 | 1,526,788 | $29,388,097 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (4,050,133 | ) | ($96,267,673 | ) | (6,234,658 | ) | ($130,752,070 | ) | ||||||||||
Select Shares | + | (16,261,189 | ) | (386,422,770 | ) | (9,414,179 | ) | (198,148,130 | ) | |||||||||
Total shares redeemed | (20,311,322 | ) | ($482,690,443 | ) | (15,648,837 | ) | ($328,900,200 | ) | ||||||||||
Net transactions in fund shares | 1,200,775 | $27,085,923 | 8,757,662 | $188,607,915 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 95,649,513 | $2,265,116,084 | 86,891,851 | $1,653,660,560 | ||||||||||||||
Total increase or decrease | + | 1,200,775 | (42,091,533 | ) | 8,757,662 | 611,455,524 | ||||||||||||
End of period | 96,850,288 | $2,223,024,551 | 95,649,513 | $2,265,116,084 | ||||||||||||||
Net investment income not yet distributed | $18,038,415 | $17,610,213 |
See financial notes 59
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 Target 2010 Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Target 2015 Fund | |||
Laudus International MarketMasters Fund | Schwab Target 2020 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2025 Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2030 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2035 Fund | |||
Schwab International Index Fund | Schwab Target 2040 Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Target 2045 Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Target 2050 Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Target 2055 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Fundamental US Large Company Index Fund | |||
Schwab Balanced Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Dividend Equity Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab Small-Cap Equity Fund | Schwab Fundamental Global Real Estate 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 | |||
Schwab International Core Equity Fund | ||||
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 funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(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. |
60
Table of Contents
Laudus MarketMasters 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. | |
• | 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 contracts (“futures”) and forward foreign currency exchange contracts (“forwards”): 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 may be 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, without consideration to the classification level of the specific investments held by the underlying fund. | |
• | 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 |
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2. Significant Accounting Policies (continued):
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, 2014 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 a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value may change daily.
Forward Foreign Currency Exchange Contracts: Forwards 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 appreciation or depreciation 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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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, 2014, if any, are reflected in each fund’s Statement of Assets and Liabilities.
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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.
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.
Market Risk. 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.
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.
Investment Style Risk. The funds’ 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.
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 - a fund’s performance also will lag those investments.
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 - bonds and small-cap stocks, for instance - a fund’s performance also will lag those investments.
Management Risk. As with all actively managed funds, the investment strategies of each fund’s managers — its investment adviser and investment sub-advisers — may not achieve their desired results.
Foreign Investment Risk. 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); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund’s investments, and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategies.
Emerging Market 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 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.
Currency Risk. As a result of a 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.
Derivatives Risk. 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
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3. Risk Factors (continued):
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 a fund to realize higher amounts of short-term capital gain. These risks could cause a fund to lose more than the principal amount invested.
Multi-Manager Risk. 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.
Liquidity Risk. 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 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% |
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4. Affiliates and Affiliated Transactions (continued):
Certain Schwab funds may own shares of other Schwab funds. The table below reflects the percentage of shares of each fund in this report that are owned by other Schwab funds as of October 31, 2014, as applicable:
Underlying Funds | ||||||||
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Schwab Target 2010 Fund | 0.4% | 0.1% | ||||||
Schwab Target 2015 Fund | 0.8% | 0.2% | ||||||
Schwab Target 2020 Fund | 5.5% | 1.5% | ||||||
Schwab Target 2025 Fund | 4.8% | 1.2% | ||||||
Schwab Target 2030 Fund | 12.1% | 2.9% | ||||||
Schwab Target 2035 Fund | 5.4% | 1.2% | ||||||
Schwab Target 2040 Fund | 16.4% | 3.6% | ||||||
Schwab Target 2045 Fund | 0.9% | 0.2% | ||||||
Schwab Target 2050 Fund | 0.8% | 0.2% | ||||||
Schwab Target 2055 Fund | 0.4% | 0.1% | ||||||
Schwab Monthly Income Fund - Moderate Payout | —% | 0.3% | ||||||
Schwab Monthly Income Fund - Enhanced Payout | —% | 0.4% | ||||||
Schwab Monthly Income Fund - Maximum Payout | —% | 0.1% | ||||||
Schwab Balanced Fund | 10.4% | —% |
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 on a fund’s Statement of Operations. For information regarding the trustees, please refer to the 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 an interest expense, which is disclosed on a fund’s 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, 2014, 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 | $140,501,954 | $149,420,735 | ||||||
Laudus International MarketMasters Fund | 1,710,295,459 | 1,643,664,770 |
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Financial Notes (continued)
8. Derivatives:
The funds entered into equity index futures contracts 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, 2014 are presented on the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in 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 | $3,447,310 | 30 | ||||||
Laudus International MarketMasters Fund | 46,783,179 | 491 |
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 and to hedge exposure to certain currencies. 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 $67,963,085 and $772,149, respectively.
As of October 31, 2014, 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 | $156,619 | $— | ||||||
Forward Foreign Currency Exchange Contracts2 | — | 4,123,973 | ||||||
Total | $156,619 | $4,123,973 | ||||||
Liability Derivatives | Fair Value | |||||||
Equity Index - Futures Contracts3 | $— | $75,899 | ||||||
Forward Foreign Currency Exchange Contracts4 | — | 407,664 | ||||||
Total | $— | $483,563 |
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 | Includes cumulative unrealized depreciation 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. | |
4 | Statement of Assets and Liabilities location: Unrealized depreciation on forward foreign currency exchange contracts. |
The effects of the derivatives held by the funds in the Statement of Operations for the period ended October 31, 2014 were:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Equity Index Futures Contracts | ||||||||
Realized Gains (Losses)1 | ($16,200 | ) | $1,912,818 | |||||
Change in Unrealized Appreciation (Depreciation)2 | 61,624 | (2,707,984 | ) | |||||
Forward Foreign Currency Exchange Contracts | ||||||||
Realized Gains (Losses)1 | $— | $711,354 | ||||||
Change in Unrealized Appreciation (Depreciation)2 | — | 3,089,783 |
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 change in unrealized appreciation (depreciation) on futures contracts and net change in unrealized appreciation (depreciation) on foreign currency translations. |
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Financial Notes (continued)
8. Derivatives (continued):
The funds’ forwards are entered into pursuant to International Swaps and Derivatives Association, Inc. (“ISDA”) agreements which govern certain terms of derivative transactions. ISDA agreements typically contain, among other things, master netting provisions in the event of a default or other termination event. Master netting provisions allow the funds and the counterparty, in the event of a default or other termination event, to offset payable and receivable amounts for each party related to derivative contracts to one net amount payable by either the funds or the counterparty. The Laudus International MarketMasters Fund’s forwards, which are reported gross in the Statement of Assets and Liabilities, are presented in the table below. The following table presents the fund’s forwards, net of amounts available for offset under a master netting agreement and net of any related collateral received by the fund for assets and pledged by the fund for liabilities as of October 31, 2014.
Laudus International MarketMasters Fund | ||||||||||||||||
Gross Amounts Not Offset in the | ||||||||||||||||
Statement of Assets and Liabilities | ||||||||||||||||
Gross Amounts of Assets | ||||||||||||||||
Presented in the | Financial | Cash Collateral | Net | |||||||||||||
Counterparty | Statement of Assets and Liabilities | Instruments | Received | Amounts(a) | ||||||||||||
State Street Bank & Trust Co. | $4,123,973 | ($407,664 | ) | $— | $3,716,309 | |||||||||||
Total | $4,123,973 | ($407,664 | ) | $— | $3,716,309 | |||||||||||
Gross Amounts of Liabilities | ||||||||||||||||
Presented in the | Financial | Cash Collateral | Net | |||||||||||||
Counterparty | Statement of Assets and Liabilities | Instruments | Pledged | Amounts(b) | ||||||||||||
State Street Bank & Trust Co. | ($407,664 | ) | $407,664 | $— | $— | |||||||||||
Total | ($407,664 | ) | $407,664 | $— | $— | |||||||||||
a | Represents the net amount due from the counterparty in the event of default. | |
b | Represents the net amount due to the counterparty in the event of default. |
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 on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/13-10/31/14) | (11/1/12-10/31/13) | |||||||
Laudus Small-Cap MarketMasters Fund | $384 | $341 | ||||||
Laudus International MarketMasters Fund | 6,455 | 12,421 |
10. Federal Income Taxes:
As of October 31, 2014, the components of distributable earnings on a tax-basis were as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Undistributed ordinary income | $— | $31,273,280 | ||||||
Undistributed long-term capital gains | 3,718,509 | — | ||||||
Unrealized appreciation on investments | 28,560,167 | 292,010,842 | ||||||
Unrealized depreciation on investments | (9,994,310 | ) | (77,910,854 | ) | ||||
Other unrealized appreciation (depreciation) | — | (1,289,405 | ) | |||||
Net unrealized appreciation (depreciation) | $18,565,857 | $212,810,583 | ||||||
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10. Federal Income Taxes (continued):
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, 2014, 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 | $— | $3,773,115 | ||||||
Total | $— | $3,773,115 | ||||||
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 next taxable year. For the year ended October 31, 2014, the funds had late-year ordinary losses deferred and capital loss carryforwards utilized as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Late-year ordinary losses deferred | $1,396,656 | $— | ||||||
Capital loss carryforwards utilized | 22,461,534 | 206,581,377 |
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 | $— | $33,604,108 | ||||||
Long-term capital gains | — | — | ||||||
Return of capital | — | — | ||||||
Prior period distributions | ||||||||
Ordinary income | $— | $39,162,215 | ||||||
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, 2014, the funds made the following reclassifications:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Capital shares | ($15,579 | ) | $— | |||||
Undistributed net investment income | (18,737 | ) | 7,390,725 | |||||
Net realized capital gains (losses) | 34,316 | (7,390,725 | ) |
As of October 31, 2014, 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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Laudus MarketMasters Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2014, 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 of 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 funds constituting Schwab Capital Trust, hereafter referred to as the “Funds”) at October 31, 2014, 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, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 16, 2014
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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 $5,087,479 to its shareholders for the year ended October 31, 2014. The respective foreign source income on the fund is $59,931,813.
For the fiscal year ended October 31, 2014, 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 2015 via IRS form 1099 of the amounts for use in preparing their 2014 income tax return.
Laudus Small-Cap MarketMasters Fund | $— | |||
Laudus International MarketMasters Fund | 38,691,587 |
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Approval of Renewal of Investment Advisory and Sub-Advisory Agreements
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in part, to considering whether to renew the investment advisory agreements between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) with respect to the existing funds in the Trust, including Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund (the “Funds”), and the individual sub-advisory agreements between CSIM and BMO Asset Management Corp., Mellon Capital Management Corp. (“Mellon”), TAMRO Capital Partners, LLC and Wellington Management Company LLP relating to Laudus Small-Cap MarketMasters Fund; and CSIM and American Century Investment Management, Inc., Harris Associates L.P., Mellon, Mondrian Investment Partners Limited and William Blair & Company, LLC, 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 30, 2014, and June 3, 2014, and approved the renewal of the Agreements with respect to the Funds for an additional one year term at the meeting held on June 3, 2014. 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
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to the Funds and the resources of CSIM, and its affiliates, and the Sub-Advisers dedicated to the Funds supported renewal of the Agreements with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreements with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. In addition, the Trustees considered whether irrespective of relative performance, each Sub-Adviser’s absolute performance was consistent with expectations for such Sub-Adviser’s unique investment methodology. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser and Sub-Adviser profitability discussed below. Although the Funds 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 Agreements with respect to the Funds, 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 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 the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to CSIM, the Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM, and its respective affiliates. The Trustees also considered the compensation flowing to the Sub-Advisers, directly or indirectly. The Trustees also considered any other benefits derived by the Sub-Advisers from their relationship with the Funds, such as whether, by virtue of its management of the Funds, any Sub-Adviser obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to the Sub-Advisers, the Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by the Sub-Advisers, and their respective affiliates. The Board also considered the profitability of the Sub-Advisers with respect to the sub-advisory services they provide to the Funds, although, when doing so, the Board took into account the fact that the Sub-Advisers are compensated by CSIM, and not by the Funds directly, and such compensation with respect to any Sub-Adviser reflects an arms-length negotiation between the Sub-Adviser and CSIM. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM and the Sub-Advisers is reasonable and supported renewal of the Agreements with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated 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
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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.
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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 97 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) | |||
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) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 76 | Director, KLA-Tencor Corporation (2008 – present) | |||
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, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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) | |||
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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. | 97 | 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 Investment Management, 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; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). | |
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). | |
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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 | |
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. 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.
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 (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. 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 Securities Act of1933 (the “1933 Act”), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. 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. 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.
• | 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 go to www.schwab.com/privacy.
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; |
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To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
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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.
Table of Contents
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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.
© 2014 Charles Schwab & Co., Inc. All rights reserved. Member SIPC®. Printed on recycled paper. | MFR13812-17 |
00128295 |
Table of Contents
Table of Contents
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COMMAND PERFORMANCETM
Table of Contents
Annual report dated October 31, 2014, 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, 2014
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/0000950123-15-000008/f30296ctschwab02.gif)
Schwab Target Funds
In This Report
3 | ||
5 | ||
7 | ||
Performance and Fund Facts | ||
8 | ||
10 | ||
12 | ||
14 | ||
16 | ||
18 | ||
20 | ||
22 | ||
24 | ||
26 | ||
28 | ||
29 | ||
35 | ||
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47 | ||
53 | ||
59 | ||
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71 | ||
77 | ||
83 | ||
89 | ||
109 | ||
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116 |
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, 2014 | ||||
Schwab Target 2010 Fund (Ticker Symbol: SWBRX) | 6.08% | |||
Target 2010 Composite Index | 6.33% | |||
Fund Category: Morningstar Target Date 2000-2010 | 5.46% | |||
Performance Details | pages 8-9 | |||
Schwab Target 2015 Fund (Ticker Symbol: SWGRX) | 6.56% | |||
Target 2015 Composite Index | 6.86% | |||
Fund Category: Morningstar Target Date 2011-2015 | 5.91% | |||
Performance Details | pages 10-11 | |||
Schwab Target 2020 Fund (Ticker Symbol: SWCRX) | 7.71% | |||
Target 2020 Composite Index | 8.02% | |||
Fund Category: Morningstar Target Date 2016-2020 | 6.43% | |||
Performance Details | pages 12-13 | |||
Schwab Target 2025 Fund (Ticker Symbol: SWHRX) | 8.44% | |||
Target 2025 Composite Index | 8.82% | |||
Fund Category: Morningstar Target Date 2021-2025 | 7.39% | |||
Performance Details | pages 14-15 | |||
Schwab Target 2030 Fund (Ticker Symbol: SWDRX) | 9.11% | |||
Target 2030 Composite Index | 9.43% | |||
Fund Category: Morningstar Target Date 2026-2030 | 7.64% | |||
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.
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, 2014 | ||||
Schwab Target 2035 Fund (Ticker Symbol: SWIRX) | 9.62% | |||
Target 2035 Composite Index | 9.96% | |||
Fund Category: Morningstar Target Date 2031-2035 | 8.40% | |||
Performance Details | pages 18-19 | |||
Schwab Target 2040 Fund (Ticker Symbol: SWERX) | 10.07% | |||
Target 2040 Composite Index | 10.34% | |||
Fund Category: Morningstar Target Date 2036-2040 | 8.37% | |||
Performance Details | pages 20-21 | |||
Schwab Target 2045 Fund (Ticker Symbol: SWMRX) | 10.30% | |||
Target 2045 Composite Index | 10.55% | |||
Fund Category: Morningstar Target Date 2041-2045 | 8.83% | |||
Performance Details | pages 22-23 | |||
Schwab Target 2050 Fund (Ticker Symbol: SWNRX) | 10.43% | |||
Target 2050 Composite Index | 10.73% | |||
Fund Category: Morningstar Target Date 2046-2050 | 8.64% | |||
Performance Details | pages 24-25 | |||
Schwab Target 2055 Fund (Ticker Symbol: SWORX) | 10.59% | |||
Target 2055 Composite Index | 10.84% | |||
Fund Category: Morningstar Target Date 2051+ | 9.07% | |||
Performance Details | pages 26-27 | |||
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.
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 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/0000950123-15-000008/f30296ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
For 25 years, Charles Schwab Investment Management has been committed to building funds that are designed to serve as the foundation of an investor’s portfolio. Within each of our Schwab Target Funds is a mix of active, passive, proprietary, and third-party strategies, seeking to provide diversification. The funds are professionally managed according to projected retirement dates, and rebalanced to become more conservative as a target date approaches and beyond.
For the 12-month reporting period ended October 31, 2014, the funds generated positive returns that generally tracked their comparative indices. In the U.S., generally favorable corporate earnings reports and easy monetary policy continued to support U.S. stocks, helping them overcome geopolitical tensions and increased market volatility. Meanwhile, the resilient U.S. bond market provided modest returns, even as interest rates remained historically low. Reflecting this backdrop, the S&P 500 Index returned 17.3%, while the broad U.S. bond market returned 4.1%, as represented by the performance of the Barclays U.S. Aggregate Bond Index.
Economic growth generally stalled outside the U.S. This convinced the Bank of Japan and many other overseas central banks to maintain low interest rates, even as the Fed wrapped up its quantitative easing policies aimed at holding down long-term interest rates. In response to these policy differences, the yen and many other foreign currencies depreciated versus the U.S. dollar, reducing
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2014
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 17.27% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 8.06 | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −0.60% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 4.14% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.03% | Barclays U.S. Treasury Bills 1-3 Months Index: measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctcaptst05.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
Table of Contents
From the President continued
For the 12-month reporting period ended October 31, 2014, the funds generated positive returns that generally tracked their comparative indices.
international stock returns in U.S. dollar terms. As a result, the MSCI EAFE Index, which broadly represents the performance of international stocks, returned -0.6%.1
For more information about the Schwab Target Funds, please continue reading this report. In addition, you can find answers to frequently asked questions and more details about these funds by visiting www.schwabfunds.com, or by contacting us at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctschandom.gif)
1 The total return cited is for the MSCI EAFE Index (Net), which is calculated net of foreign withholding taxes.
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, 2014, the 2010 Fund’s asset allocation was approximately 38.5% equity securities, 55.0% fixed income securities, and 6.5% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2010 Fund returned 6.08%. The 2010 Fund’s internally calculated comparative index, the Target 2010 Composite Index (the composite index), returned 6.33%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 positions generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2010 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2010 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from the 2010 Fund’s relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2010 Fund’s international equity allocation detracted from total return, reflecting the poor performance of international stocks. The largest positive contribution came from the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%.
The 2010 Fund’s U.S. fixed income allocation contributed to the 2010 Fund’s total return. The Natixis Loomis Sayles Investment Grade Bond Fund (Class Y Shares) was a positive contributor, as was the Schwab Total Bond Market Fund, which performed approximately in line with the 4.1% return of the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. Small positions in the Schwab Treasury Inflation Protected Securities Index Fund and in the Schwab Intermediate-Term Bond Fund also contributed positively to total return.
As of 10/31/14:
Statistics
Number of Holdings | 22 | |||
Portfolio Turnover Rate | 29% |
Asset Class Weightings % of Investments2
Fixed-Income Funds – Intermediate-Term Bond | 33.1% | |||
Equity Funds – Large-Cap | 26.9% | |||
Fixed-Income Funds – Short-Term Bond | 15.1% | |||
Equity Funds – International | 7.3% | |||
Fixed -Income Funds – Inflation- Protected Bond | 5.1% | |||
Short-Term Investments | 3.4% | |||
Equity Funds – Small-Cap | 3.4% | |||
Money Market Funds | 3.1% | |||
Equity Funds – Global Real Estate | 2.1% | |||
Fixed-Income Funds – International Bond | 0.5% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Total Bond Market Fund | 27.3% | |||
Schwab Short-Term Bond Market Fund | 15.2% | |||
Schwab Core Equity Fund | 6.9% | |||
Laudus U.S. Large Cap Growth Fund | 6.6% | |||
Schwab S&P 500 Index Fund | 6.2% | |||
Schwab Treasury Inflation Protected Securities Index Fund | 5.1% | |||
Laudus International MarketMasters Fund, Select Shares | 4.4% | |||
Schwab Dividend Equity Fund | 3.5% | |||
TCW Relative Value Large Cap Fund | 3.3% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3.1% | |||
Total | 81.6% |
Management 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 | Effective September 24, 2014, the Target 2010 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst10f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2010 Fund (7/1/05) | 6.08 | % | 7.98 | % | 4.88 | % | |||||||||
Target 2010 Composite Index | 6.33 | % | 7.91 | % | 5.74 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 17.09 | % | 8.42 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.68 | % | |||||||||
Fund Category: Morningstar Target Date 2000-2010 | 5.46 | % | 7.74 | % | 4.82 | % |
Fund Expense Ratios3: Net 0.52%; Gross 0.70%
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 0.52%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 9
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Schwab Target 2015 Fund
The Schwab Target 2015 Fund (the 2015 Fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2015 Fund may also invest in unaffiliated third-party mutual funds. The target asset allocation is adjusted annually by the investment adviser; as of the last annual adjustment on January 7, 2014, the 2015 Fund’s asset allocation was approximately 43.3% equity securities, 51.0% fixed income securities, and 5.7% cash and cash equivalents (including money market funds). At its target date, the 2015 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2015 Fund returned 6.56%. The 2015 Fund’s internally calculated comparative index, the Target 2015 Composite Index (the composite index), returned 6.86%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 positions generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2015 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2015 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from the 2015 Fund’s relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2015 Fund’s international equity allocation detracted from the fund’s total return, reflecting the poor performance of international stocks. The largest positive contribution came from the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2025 Fund’s allocation to them was small, minimally impacting performance.
The 2015 Fund’s U.S. fixed income allocation contributed to the 2015 Fund’s total return. The Natixis Loomis Sayles Investment Grade Bond Fund (Class Y Shares) was a positive contributor to total return, as was the Schwab Total Bond Market Fund, which performed approximately in line with the 4.1% total return of the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. Small positions in the Schwab Treasury Inflation Protected Securities Index Fund and in the Schwab Intermediate-Term Bond Fund also contributed positively to total return.
As of 10/31/14:
Statistics
Number of Holdings | 23 | |||
Portfolio Turnover Rate | 32% |
Asset Class Weightings % of Investments2
Fixed-Income Funds – Intermediate-Term Bond | 31.8% | |||
Equity Funds – Large-Cap | 29.4% | |||
Fixed-Income Funds �� Short-Term Bond | 12.9% | |||
Equity Funds – International | 8.6% | |||
Fixed -Income Funds – Inflation- Protected Bond | 4.6% | |||
Equity Funds – Small-Cap | 4.1% | |||
Short-Term Investments | 3.2% | |||
Money Market Funds | 2.4% | |||
Equity Funds – Global Real Estate | 2.3% | |||
Fixed-Income Funds – International Bond | 0.7% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Total Bond Market Fund | 25.5% | |||
Schwab Short-Term Bond Market Fund | 12.9% | |||
Schwab Core Equity Fund | 7.6% | |||
Laudus U.S. Large Cap Growth Fund | 7.2% | |||
Schwab S&P 500 Index Fund | 6.8% | |||
Laudus International MarketMasters Fund, Select Shares | 5.0% | |||
Schwab Treasury Inflation Protected Securities Index Fund | 4.6% | |||
Schwab Dividend Equity Fund | 3.8% | |||
TCW Relative Value Large Cap Fund | 3.4% | |||
Schwab International Core Equity Fund | 3.3% | |||
Total | 80.1% |
Management 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 | Effective September 24, 2014, the Target 2015 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst15f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2015 Fund (3/12/08) | 6.56 | % | 9.09 | % | 5.57 | % | |||||||||
Target 2015 Composite Index | 6.86 | % | 8.91 | % | 5.52 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 17.09 | % | 9.39 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.83 | % | |||||||||
Fund Category: Morningstar Target Date 2011-2015 | 5.91 | % | 8.27 | % | 4.85 | % |
Fund Expense Ratios3: Net 0.58%; 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 | 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 0.58%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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, 2014, the 2020 Fund’s asset allocation was approximately 56.8% equity securities, 39.1% fixed income securities, and 4.1% cash and cash equivalents (including money market funds). At its target date, the 2020 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2020 Fund returned 7.71%. The 2020 Fund’s internally calculated comparative index, the Target 2020 Composite Index (the composite index), returned 8.02%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 positions generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2020 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2020 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2020 Fund’s international equity allocation detracted from the fund’s total return, reflecting the poor performance of international stocks. The largest positive contribution came from the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2020 Fund’s allocation to them was small, minimally impacting performance.
The 2020 Fund’s U.S. fixed income allocation contributed to the 2020 Fund’s total return. The Natixis Loomis Sayles Investment Grade Bond Fund (Class Y Shares) was a positive total return contributor, as was the Schwab Total Bond Market Fund, which performed approximately in line with the 4.1% total return of the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. Small positions in the Schwab Treasury Inflation Protected Securities Index Fund and in the Schwab Intermediate-Term Bond Fund also contributed positively to total return.
As of 10/31/14:
Statistics
Number of Holdings | 23 | |||
Portfolio Turnover Rate | 26% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 37.0% | |||
Fixed-Income Funds – Intermediate-Term Bond | 26.4% | |||
Equity Funds – International | 11.8% | |||
Fixed-Income Funds – Short-Term Bond | 7.5% | |||
Equity Funds – Small-Cap | 6.1% | |||
Fixed -Income Funds – Inflation- Protected Bond | 3.1% | |||
Short-Term Investments | 3.1% | |||
Equity Funds – Global Real Estate | 2.9% | |||
Fixed-Income Funds – International Bond | 1.1% | |||
Money Market Funds | 1.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Total Bond Market Fund | 19.1% | |||
Schwab Core Equity Fund | 9.6% | |||
Laudus U.S. Large Cap Growth Fund | 9.2% | |||
Schwab S&P 500 Index Fund | 8.5% | |||
Schwab Short-Term Bond Market Fund | 7.5% | |||
Laudus International MarketMasters Fund, Select Shares | 6.7% | |||
Schwab Dividend Equity Fund | 4.8% | |||
Schwab International Core Equity Fund | 4.4% | |||
TCW Relative Value Large Cap Fund | 4.4% | |||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 4.3% | |||
Total | 78.5% |
Management 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 | Effective September 24, 2014, the Target 2020 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst20f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2020 Fund (7/1/05) | 7.71 | % | 10.45 | % | 6.26 | % | |||||||||
Target 2020 Composite Index | 8.02 | % | 10.25 | % | 6.64 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 17.09 | % | 8.42 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.68 | % | |||||||||
Fund Category: Morningstar Target Date 2016-2020 | 6.43 | % | 8.96 | % | 5.06 | % |
Fund Expense Ratios3: Net 0.65%; Gross 0.70%
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 0.65%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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, 2014, the 2025 Fund’s asset allocation was approximately 66.7% equity securities, 30.1% fixed income securities, and 3.2% cash and cash equivalents (including money market funds). At its target date, the 2025 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2025 Fund returned 8.44%. The 2025 Fund’s internally calculated comparative index, the Target 2025 Composite Index (the composite index), returned 8.82%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 positions generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2025 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2025 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2025 Fund’s international equity allocation detracted from total return, reflecting the poor performance of international stocks. The largest positive contribution came from the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2025 Fund’s allocation to them was small, minimally impacting performance.
The 2025 Fund’s U.S. fixed income allocation contributed to the 2025 Fund’s total return. The Natixis Loomis Sayles Investment Grade Bond Fund (Class Y Shares) was a positive total return contributor, as was the Schwab Total Bond Market Fund, which performed approximately in line with the 4.1% total return of the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. Small positions in the Schwab Treasury Inflation Protected Securities Index Fund and in the Schwab Intermediate-Term Bond Fund also contributed positively to total return.
As of 10/31/14:
Statistics
Number of Holdings | 22 | |||
Portfolio Turnover Rate | 27% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 42.2% | |||
Fixed-Income Funds – Intermediate-Term Bond | 21.4% | |||
Equity Funds – International | 14.4% | |||
Equity Funds – Small-Cap | 7.8% | |||
Fixed-Income Funds – Short-Term Bond | 4.5% | |||
Equity Funds – Global Real Estate | 3.5% | |||
Short-Term Investments | 3.1% | |||
Fixed-Income Funds – Inflation-Protected Bond | 2.1% | |||
Fixed-Income Funds – International Bond | 1.0% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Total Bond Market Fund | 13.9% | |||
Schwab Core Equity Fund | 11.1% | |||
Laudus U.S. Large Cap Growth Fund | 10.4% | |||
Schwab S&P 500 Index Fund | 9.7% | |||
Laudus International MarketMasters Fund, Select Shares | 7.9% | |||
Schwab Dividend Equity Fund | 5.4% | |||
Schwab International Core Equity Fund | 5.2% | |||
Schwab Small-Cap Equity Fund | 5.1% | |||
TCW Relative Value Large Cap Fund | 5.0% | |||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 4.7% | |||
Total | 78.4% |
Management 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 | Effective September 24, 2014, the Target 2025 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst25f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2025 Fund (3/12/08) | 8.44 | % | 11.48 | % | 7.51 | % | |||||||||
Target 2025 Composite Index | 8.82 | % | 11.15 | % | 6.77 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 17.09 | % | 9.39 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.83 | % | |||||||||
Fund Category: Morningstar Target Date 2021-2025 | 7.39 | % | 10.34 | % | 5.57 | % |
Fund Expense Ratios3: Net 0.71%; Gross 0.79%
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 0.71%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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, 2014, the 2030 Fund’s asset allocation was approximately 74.6% equity securities, 22.7% fixed income securities, and 2.7% cash and cash equivalents (including money market funds). At its target date, the 2030 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2030 Fund returned 9.11%. The 2030 Fund’s internally calculated comparative index, the Target 2030 Composite Index (the composite index), returned 9.43%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 positions generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2030 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2030 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2030 Fund’s international equity allocation detracted from total return, reflecting the poor performance of international stocks. The largest positive contribution came from the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2030 Fund’s allocation to them was small, minimally impacting performance.
The 2030 Fund’s U.S. fixed income allocation contributed to the 2030 Fund’s total return. The Natixis Loomis Sayles Investment Grade Bond Fund (Class Y Shares) was a positive total return contributor, as was the Schwab Total Bond Market Fund, which performed approximately in line with the 4.1% total return of the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index. Small positions in the Schwab Treasury Inflation Protected Securities Index Fund and in the Schwab Intermediate-Term Bond Fund also contributed positively to total return.
As of 10/31/14:
Statistics
Number of Holdings | 22 | |||
Portfolio Turnover Rate | 26% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 46.0% | |||
Fixed-Income Funds – Intermediate-Term Bond | 16.7% | |||
Equity Funds – International | 16.5% | |||
Equity Funds – Small-Cap | 9.3% | |||
Equity Funds – Global Real Estate | 3.8% | |||
Fixed-Income Funds – Short-Term Bond | 2.8% | |||
Short-Term Investments | 2.7% | |||
Fixed-Income Funds – Inflation-Protected Bond | 1.4% | |||
Fixed-Income Funds – International Bond | 0.8% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Core Equity Fund | 12.1% | |||
Laudus U.S. Large Cap Growth Fund | 11.5% | |||
Schwab Total Bond Market Fund | 10.6% | |||
Schwab S&P 500 Index Fund | 10.5% | |||
Laudus International MarketMasters Fund, Select Shares | 8.8% | |||
Schwab Small-Cap Equity Fund | 6.1% | |||
Schwab Dividend Equity Fund | 5.9% | |||
Schwab International Core Equity Fund | 5.8% | |||
TCW Relative Value Large Cap Fund | 5.5% | |||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 3.9% | |||
Total | 80.7% |
Management 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 | Effective September 24, 2014, the Target 2030 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst30f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2030 Fund (7/1/05) | 9.11 | % | 12.17 | % | 7.11 | % | |||||||||
Target 2030 Composite Index | 9.43 | % | 11.81 | % | 7.24 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 17.09 | % | 8.42 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.68 | % | |||||||||
Fund Category: Morningstar Target Date 2026-2030 | 7.64 | % | 10.45 | % | 5.42 | % |
Fund Expense Ratios3: Net 0.74%; Gross 0.78%
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 0.74%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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, 2014, the 2035 Fund’s asset allocation was approximately 81.6% equity securities, 16.1% fixed income securities, and 2.3% cash and cash equivalents (including money market funds). At its target date, the 2035 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2035 Fund returned 9.62%. The 2035 Fund’s internally calculated comparative index, the Target 2035 Composite Index (the composite index), returned 9.96%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 positions generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2035 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2035 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2035 Fund’s international equity allocation detracted from total return, reflecting the poor performance of international stocks. The largest positive contribution came from the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2035 Fund’s allocation to them was small, minimally impacting performance.
The 2035 Fund’s U.S. fixed income allocation contributed to the 2035 Fund’s total return. The Natixis Loomis Sayles Investment Grade Bond Fund (Class Y Shares) was a positive total return contributor, as was the Schwab Total Bond Market Fund, which performed approximately in line with the 4.1% total return of the composite index’s U.S. fixed income component, the Barclays U.S. Aggregate Bond Index.
As of 10/31/14:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 24% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 49.3% | |||
Equity Funds – International | 18.5% | |||
Fixed-Income Funds – Intermediate-Term Bond | 11.9% | |||
Equity Funds – Small-Cap | 10.7% | |||
Equity Funds – Global Real Estate | 4.2% | |||
Short-Term Investments | 2.2% | |||
Fixed-Income Funds – Short-Term Bond | 1.7% | |||
Fixed-Income Funds – Inflation-Protected Bond | 1.0% | |||
Fixed-Income Funds – International Bond | 0.5% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Core Equity Fund | 13.0% | |||
Laudus U.S. Large Cap Growth Fund | 12.2% | |||
Schwab S&P 500 Index Fund | 11.3% | |||
Laudus International MarketMasters Fund, Select Shares | 9.7% | |||
Schwab Total Bond Market Fund | 7.3% | |||
Schwab Small-Cap Equity Fund | 7.0% | |||
Schwab International Core Equity Fund | 6.4% | |||
Schwab Dividend Equity Fund | 6.3% | |||
TCW Relative Value Large Cap Fund | 5.8% | |||
Schwab Global Real Estate Fund | 4.2% | |||
Total | 83.2% |
Management 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 | Effective September 24, 2014, the Target 2035 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst35f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2035 Fund (3/12/08) | 9.62 | % | 12.86 | % | 8.12 | % | |||||||||
Target 2035 Composite Index | 9.96 | % | 12.47 | % | 7.36 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 17.09 | % | 9.39 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.83 | % | |||||||||
Fund Category: Morningstar Target Date 2031-2035 | 8.40 | % | 11.56 | % | 5.93 | % |
Fund Expense Ratios3: Net 0.78%; 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 0.78%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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, 2014, the 2040 Fund’s asset allocation was approximately 87.3% equity securities, 10.6% fixed income securities, and 2.1% cash and cash equivalents (including money market funds). At its target date, the 2040 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2040 Fund returned 10.07%. The 2040 Fund’s internally calculated comparative index, the Target 2040 Composite Index (the composite index), returned 10.34%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 positions generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2040 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2040 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2040 Fund’s international equity allocation generally detracted from total return, reflecting the poor performance of international stocks. The largest positive contribution came from the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2040 Fund’s allocation to them was small, minimally impacting performance. In addition, the 2040 Fund’s allocation to the Schwab Global Real Estate Fund enhanced both relative performance and total return.
The 2040 Fund’s U.S. fixed income allocation contributed to the 2040 Fund’s total return. The Natixis Loomis Sayles Investment Grade Bond Fund (Class Y Shares) was a positive contributor to the 2040 Fund’s total return, as was the Schwab Total Bond Market Fund. Non-U.S. fixed income was weak, generating negative returns and reflecting the depreciation of many foreign currencies versus the U.S. dollar.
As of 10/31/14:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 23% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 51.8% | |||
Equity Funds – International | 20.1% | |||
Equity Funds – Small-Cap | 11.9% | |||
Fixed-Income Funds – Intermediate-Term Bond | 7.8% | |||
Equity Funds – Global Real Estate | 4.5% | |||
Short-Term Investments | 2.2% | |||
Fixed-Income Funds – Short-Term Bond | 1.1% | |||
Fixed-Income Funds- Inflation-Protected Bond | 0.5% | |||
Fixed-Income Funds – International Bond | 0.1% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Core Equity Fund | 13.7% | |||
Laudus U.S. Large Cap Growth Fund | 13.0% | |||
Schwab S&P 500 Index Fund | 11.8% | |||
Laudus International MarketMasters Fund, Select Shares | 10.3% | |||
Schwab Small-Cap Equity Fund | 7.8% | |||
Schwab International Core Equity Fund | 6.9% | |||
Schwab Dividend Equity Fund | 6.6% | |||
TCW Relative Value Large Cap Fund | 6.1% | |||
Schwab Global Real Estate Fund | 4.5% | |||
Schwab Total Bond Market Fund | 4.4% | |||
Total | 85.1% |
Management 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 | Effective September 24, 2014, the Target 2040 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst40f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2040 Fund (7/1/05) | 10.07 | % | 13.36 | % | 7.69 | % | |||||||||
Target 2040 Composite Index | 10.34 | % | 12.93 | % | 7.65 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 17.09 | % | 8.42 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.68 | % | |||||||||
Fund Category: Morningstar Target Date 2036-2040 | 8.37 | % | 11.33 | % | 5.80 | % |
Fund Expense Ratios3: Net 0.80%; Gross 0.84%
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 0.80%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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 is adjusted annually by the investment adviser; as of the last annual adjustment on January 7, 2014, the 2045 Fund’s asset allocation was approximately 90.5% equity securities, 7.5% fixed income securities, and 2.0% cash and cash equivalents (including money market funds). At its target date, the 2045 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2045 Fund returned 10.30%. The 2045 Fund’s internally calculated comparative index, the Target 2045 Composite Index (the composite index), returned 10.55%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2045 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2045 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2045 Fund’s international equity allocation detracted from total return, reflecting the poor performance of international stocks. The largest positive contributor was the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2045 Fund’s allocation to them was small, minimally impacting performance. In addition, the 2045 Fund’s allocation to the Schwab Global Real Estate Fund enhanced total return and relative performance.
The 2045 Fund’s U.S. fixed income allocation was small, but contributed positively to the 2045 Fund’s total return.
As of 10/31/14:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 23% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 53.2% | |||
Equity Funds – International | 21.1% | |||
Equity Funds – Small-Cap | 12.6% | |||
Fixed-Income Funds – Intermediate-Term Bond | 5.3% | |||
Equity Funds – Global Real Estate | 4.6% | |||
Short-Term Investments | 2.0% | |||
Fixed-Income Funds – Short-Term Bond | 0.8% | |||
Fixed-Income Funds- Inflation-Protected Bond | 0.3% | |||
Fixed-Income Funds – International Bond | 0.1% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Core Equity Fund | 14.0% | |||
Laudus U.S. Large Cap Growth Fund | 13.3% | |||
Schwab S&P 500 Index Fund | 12.2% | |||
Laudus International MarketMasters Fund, Select Shares | 10.7% | |||
Schwab Small-Cap Equity Fund | 8.2% | |||
Schwab International Core Equity Fund | 7.1% | |||
Schwab Dividend Equity Fund | 6.8% | |||
TCW Relative Value Large Cap Fund | 6.3% | |||
Schwab Global Real Estate Fund | 4.6% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.4% | |||
Total | 87.6% |
Management 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 | Effective September 24, 2014, the Target 2045 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst45f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | Since Inception | ||||||||
Fund: Schwab Target 2045 Fund (1/23/13) | 10.30 | % | 15.25 | % | ||||||
Target 2045 Composite Index | 10.55 | % | 15.35 | % | ||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 20.70 | % | ||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 1.78 | % | ||||||
Fund Category: Morningstar Target Date 2041-2045 | 8.83 | % | 6.09 | % |
Fund Expense Ratios3: Net 0.75%; Gross 1.83%
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 the 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 is adjusted annually by the investment adviser; as of the last annual adjustment on January 7, 2014, the 2050 Fund’s asset allocation was approximately 93.0% equity securities, 5.0% fixed income securities, and 2.0% cash and cash equivalents (including money market funds). At its target date, the 2050 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2050 Fund returned 10.43%. The 2050 Fund’s internally calculated comparative index, the Target 2050 Composite Index (the composite index), returned 10.73%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2050 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2050 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2050 Fund’s international equity allocation detracted from total return, reflecting the poor performance of international stocks. The largest positive contributor was the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2050 Fund’s allocation to them was small, minimally impacting performance. In addition, the 2050 Fund’s allocation to the Schwab Global Real Estate Fund enhanced total return and relative performance.
The 2050 Fund’s U.S. fixed income allocation was small, but contributed positively to the 2050 Fund’s total return.
As of 10/31/14:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 23% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 54.2% | |||
Equity Funds – International | 21.8% | |||
Equity Funds – Small-Cap | 13.1% | |||
Equity Funds – Global Real Estate | 4.8% | |||
Fixed-Income Funds – Intermediate-Term Bond | 3.3% | |||
Short-Term Investments | 2.1% | |||
Fixed-Income Funds – Short Term Bond | 0.5% | |||
Fixed-Income Funds – International Bond | 0.1% | |||
Fixed-Income Funds- Inflation-Protected Bond | 0.1% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Core Equity Fund | 14.4% | |||
Laudus U.S. Large Cap Growth Fund | 13.5% | |||
Schwab S&P 500 Index Fund | 12.4% | |||
Laudus International MarketMasters Fund, Select Shares | 11.0% | |||
Schwab Small-Cap Equity Fund | 8.6% | |||
Schwab International Core Equity Fund | 7.3% | |||
Schwab Dividend Equity Fund | 6.9% | |||
TCW Relative Value Large Cap Fund | 6.3% | |||
Schwab Global Real Estate Fund | 4.7% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.6% | |||
Total | 89.7% |
Management 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 | Effective September 24, 2014, the Target 2050 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst50f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | Since Inception | ||||||||
Fund: Schwab Target 2050 Fund (1/23/13) | 10.43 | % | 15.66 | % | ||||||
Target 2050 Composite Index | 10.73 | % | 15.75 | % | ||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 20.70 | % | ||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 1.78 | % | ||||||
Fund Category: Morningstar Target Date 2046-2050 | 8.64 | % | 5.98 | % |
Fund Expense Ratios3: Net 0.76%; 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.
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 0.76%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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 is adjusted annually by the investment adviser; as of the last annual adjustment on January 7, 2014, the 2055 Fund’s asset allocation was approximately 95.0% equity securities, 3.0% fixed income securities, and 2.0% cash and cash equivalents (including money market funds). At its target date, the 2055 Fund’s allocation will be approximately 40.0% equity securities, 54.0% fixed income securities, and 6.0% 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.)
Performance. For the 12-month reporting period ended October 31, 2014, the 2055 Fund returned 10.59%. The 2055 Fund’s internally calculated comparative index, the Target 2055 Composite Index (the composite index), returned 10.84%.
Market Highlights. Large-cap U.S. stocks enjoyed strong gains during the 12-month reporting period, while small-cap stocks underperformed by comparison, and U.S. economic activity rebounded. Lackluster economic growth outside the U.S. resulted in overseas central banks keeping interest rates low, even as the Federal Reserve shifted its stance regarding long-term interest rates. Many foreign currencies fell versus the U.S. dollar as a result, reducing returns on international investments in U.S. dollar terms.
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 generating positive returns. The top contributor was the Schwab Core Equity Fund, which was the 2055 Fund’s largest U.S. equity allocation. The Laudus U.S. Large Cap Growth Fund and the Schwab S&P 500 Index Fund also contributed notably. On a relative basis, the Schwab Dividend Equity Fund, TCW Relative Value Large Cap Fund, and Dodge & Cox Stock Fund underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. Although these three funds contributed positively to the 2055 Fund’s total return, they detracted from relative performance. Among small-cap holdings, the Laudus Small-Cap MarketMasters Fund (Select Shares) also detracted from relative performance, while the Schwab Small-Cap Equity Fund enhanced relative performance by outperforming the Russell 2000 Index, which returned approximately 8.1%.
The 2055 Fund’s international equity allocation detracted from total return, reflecting the poor performance of international stocks. The largest positive contributor was the Laudus Mondrian International Equity Fund (Institutional Shares), while the William Blair International Small Cap Growth Fund (Institutional Shares) was the biggest detractor.1 On a relative basis, the Laudus Mondrian International Equity Fund (Institutional Shares) outperformed the composite index’s international equity allocation component, the MSCI EAFE Index, which returned approximately -0.2%. In spite of the relatively weak performance of emerging markets over the period, the 2055 Fund’s allocation to them was small, minimally impacting performance. In addition, the 2055 Fund’s allocation to the Schwab Global Real Estate Fund enhanced total return and relative performance.
The 2055 Fund’s U.S. fixed income allocation was small, but contributed positively to the 2055 Fund’s total return.
As of 10/31/14:
Statistics
Number of Holdings | 21 | |||
Portfolio Turnover Rate | 29% |
Asset Class Weightings % of Investments2
Equity Funds – Large-Cap | 55.1% | |||
Equity Funds – International | 22.5% | |||
Equity Funds – Small-Cap | 13.6% | |||
Equity Funds – Global Real Estate | 4.8% | |||
Short-Term Investments | 2.1% | |||
Fixed-Income Funds – Intermediate-Term Bond | 1.7% | |||
Fixed-Income Funds – Short-Term Bond | 0.2% | |||
Total | 100.0% |
Top Holdings % of Net Assets3,4
Schwab Core Equity Fund | 14.6% | |||
Laudus U.S. Large Cap Growth Fund | 13.7% | |||
Schwab S&P 500 Index Fund | 12.6% | |||
Laudus International MarketMasters Fund, Select Shares | 11.2% | |||
Schwab Small-Cap Equity Fund | 8.8% | |||
Schwab International Core Equity Fund | 7.5% | |||
Schwab Dividend Equity Fund | 7.0% | |||
TCW Relative Value Large Cap Fund | 6.4% | |||
Schwab Global Real Estate Fund | 4.8% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.8% | |||
Total | 91.4% |
Management 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 | Effective September 24, 2014, the Target 2055 Fund revised its allocations to certain underlying funds, removing the Laudus Mondrian International Equity Fund (Institutional Shares) and the William Blair International Small Cap Growth Fund (Institutional Shares) in the process. For details, please see the Supplement dated September 24, 2014, to the Statutory Prospectus dated February 28, 2014, as supplemented May 8, 2014. | |
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, and cash equivalents, including money market securities. | |
3 | This list is not a recommendation of any security by the investment adviser. | |
4 | 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 10/31/14
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, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctst55f.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | Since Inception | ||||||||
Fund: Schwab Target 2055 Fund (1/23/13) | 10.59 | % | 15.87 | % | ||||||
Target 2055 Composite Index | 10.84 | % | 15.98 | % | ||||||
Dow Jones U.S. Total Stock Market Index | 16.00 | % | 20.70 | % | ||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 1.78 | % | ||||||
Fund Category: Morningstar Target Date 2051+ | 9.07 | % | 5.38 | % |
Fund Expense Ratios3: Net 0.73%; Gross 3.51%
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 0.73%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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, 2014 and held through October 31, 2014.
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 5/1/14 | at 10/31/14 | 05/1/14–10/31/14 | |||||||||||||
Schwab Target 2010 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,029.90 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2015 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,031.40 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2020 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,035.40 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2025 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,037.80 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2030 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,040.90 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2035 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,043.20 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2040 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,044.20 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2045 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,045.40 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2050 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,045.90 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 0.00 | |||||||||
Schwab Target 2055 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,046.60 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 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
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.91 | 11.10 | 10.56 | 10.34 | 9.46 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.19 | 0.21 | 0.22 | 0.23 | 0.23 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.52 | 0.85 | 0.57 | 0.24 | 0.89 | |||||||||||||||||
Total from investment operations | 0.71 | 1.06 | 0.79 | 0.47 | 1.12 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.20 | ) | (0.25 | ) | (0.25 | ) | (0.25 | ) | (0.24 | ) | ||||||||||||
Net asset value at end of period | 12.42 | 11.91 | 11.10 | 10.56 | 10.34 | |||||||||||||||||
Total return (%) | 6.08 | 9.74 | 7.63 | 4.63 | 1 | 11.99 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses2 | — | — | — | — | 0.00 | 3 | ||||||||||||||||
Gross operating expenses2 | 0.17 | 0.18 | 0.18 | 0.14 | 0.16 | |||||||||||||||||
Net investment income (loss) | 1.53 | 1.77 | 1.95 | 2.11 | 2.21 | |||||||||||||||||
Portfolio turnover rate | 29 | 26 | 13 | 11 | 24 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 64 | 61 | 60 | 64 | 73 |
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.
See financial notes 29
Table of Contents
Schwab Target 2010 Fund
Portfolio Holdings as of October 31, 2014
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 | 51,512,345 | 61,684,462 | ||||||||
3 | .5% | Short-Term Investments | 2,198,004 | 2,198,004 | ||||||||
100 | .2% | Total Investments | 53,710,349 | 63,882,466 | ||||||||
(0 | .2%) | Other Assets and Liabilities, Net | (105,564 | ) | ||||||||
100 | .0% | Net Assets | 63,776,902 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.7% of net assets | ||||||||
Equity Funds 39.6% | ||||||||
Global Real Estate 2.0% | ||||||||
Schwab Global Real Estate Fund (a) | 182,707 | 1,311,835 | ||||||
International 7.3% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 123,407 | 2,833,426 | ||||||
Schwab International Core Equity Fund (a) | 184,539 | 1,802,945 | ||||||
4,636,371 | ||||||||
Large-Cap 26.9% | ||||||||
Dodge & Cox Stock Fund | 1,402 | 251,852 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 212,802 | 4,221,990 | ||||||
Schwab Core Equity Fund (a) | 172,000 | 4,382,562 | ||||||
Schwab Dividend Equity Fund (a) | 117,077 | 2,244,368 | ||||||
Schwab S&P 500 Index Fund (a) | 124,324 | 3,977,122 | ||||||
TCW Relative Value Large Cap Fund | 94,253 | 2,082,047 | ||||||
17,159,941 | ||||||||
Small-Cap 3.4% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 41,294 | 756,926 | ||||||
Schwab Small-Cap Equity Fund (a) | 56,677 | 1,423,150 | ||||||
2,180,076 | ||||||||
25,288,223 | ||||||||
Fixed-Income Funds 54.0% | ||||||||
Inflation-Protected Bond 5.1% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 292,454 | 3,266,714 | ||||||
Intermediate-Term Bond 33.2% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 149,616 | 1,817,833 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 191,073 | 1,958,498 | ||||||
Schwab Total Bond Market Fund (a) | 1,822,460 | 17,386,270 | ||||||
21,162,601 | ||||||||
International Bond 0.5% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 32,199 | 339,697 | ||||||
Short-Term Bond 15.2% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 1,039,680 | 9,658,625 | ||||||
34,427,637 | ||||||||
Money Market Fund 3.1% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.01% (a)(b) | 1,968,602 | 1,968,602 | ||||||
Total Other Investment Companies | ||||||||
(Cost $51,512,345) | 61,684,462 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.5% of net assets | ||||||||
Time Deposits 3.5% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 293,952 | 293,952 | ||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 634,684 | 634,684 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 634,684 | 634,684 | ||||||
Wells Fargo | ||||||||
0.03%, 11/03/14 | 634,684 | 634,684 | ||||||
Total Short-Term Investments | ||||||||
(Cost $2,198,004) | 2,198,004 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $54,543,239 and the unrealized appreciation and depreciation were $9,344,282 and ($5,055), respectively, with a net unrealized appreciation of $9,339,227.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $61,684,462 | $— | $— | $61,684,462 | ||||||||||||
Short-Term Investments1 | — | 2,198,004 | — | 2,198,004 | ||||||||||||
Total | $61,684,462 | $2,198,004 | $— | $63,882,466 | ||||||||||||
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, 2014.
See financial notes 31
Table of Contents
Schwab Target 2010 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $48,319,729) | $57,532,730 | |||||
Investments in unaffiliated issuers, at value (cost $5,390,620) | + | 6,349,736 | ||||
Total investments, at value (cost $53,710,349) | 63,882,466 | |||||
Receivables: | ||||||
Investments sold | 310,000 | |||||
Dividends | 44,193 | |||||
Fund shares sold | 12,267 | |||||
Due from investment adviser | 902 | |||||
Prepaid expenses | + | 1,652 | ||||
Total assets | 64,251,480 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 444,305 | |||||
Fund shares redeemed | 534 | |||||
Accrued expenses | + | 29,739 | ||||
Total liabilities | 474,578 | |||||
Net Assets | ||||||
Total assets | 64,251,480 | |||||
Total liabilities | − | 474,578 | ||||
Net assets | $63,776,902 | |||||
Net Assets by Source | ||||||
Capital received from investors | 65,909,678 | |||||
Net investment income not yet distributed | 604,856 | |||||
Net realized capital losses | (12,909,749 | ) | ||||
Net unrealized capital appreciation | 10,172,117 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$63,776,902 | 5,136,509 | $12.42 |
32 See financial notes
Table of Contents
Schwab Target 2010 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $735,132 | |||||
Dividends received from unaffiliated underlying funds | 211,840 | |||||
Interest | + | 606 | ||||
Total investment income | 947,578 | |||||
Expenses | ||||||
Professional fees | 36,074 | |||||
Transfer agent fees | 22,250 | |||||
Registration fees | 19,308 | |||||
Portfolio accounting fees | 8,223 | |||||
Independent trustees’ fees | 6,384 | |||||
Shareholder reports | 6,218 | |||||
Custodian fees | 4,481 | |||||
Other expenses | + | 1,904 | ||||
Total expenses | 104,842 | |||||
Expense reduction by CSIM | − | 104,842 | ||||
Net expenses | − | — | ||||
Net investment income | 947,578 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 791,368 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 139,725 | |||||
Net realized gains on sales of affiliated underlying funds | 1,986,032 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 1,243,879 | ||||
Net realized gains | 4,161,004 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | (377,290 | ) | ||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (1,144,261 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (1,521,551 | ) | |||
Net realized and unrealized gains | 2,639,453 | |||||
Increase in net assets resulting from operations | $3,587,031 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $947,578 | $1,060,327 | ||||||||
Net realized gains | 4,161,004 | 1,990,548 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (1,521,551 | ) | 2,583,987 | ||||||
Increase in net assets from operations | 3,587,031 | 5,634,862 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,036,165 | ) | ($1,315,027 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 955,289 | $11,575,490 | 1,476,821 | $16,885,894 | ||||||||||||||
Shares reinvested | 81,616 | 967,148 | 111,466 | 1,225,017 | ||||||||||||||
Shares redeemed | + | (1,041,619 | ) | (12,568,302 | ) | (1,819,181 | ) | (20,804,281 | ) | |||||||||
Net transactions in fund shares | (4,714 | ) | ($25,664 | ) | (230,894 | ) | ($2,693,370 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 5,141,223 | $61,251,700 | 5,372,117 | $59,625,235 | ||||||||||||||
Total increase or decrease | + | (4,714 | ) | 2,525,202 | (230,894 | ) | 1,626,465 | |||||||||||
�� | ||||||||||||||||||
End of period | 5,136,509 | $63,776,902 | 5,141,223 | $61,251,700 | ||||||||||||||
Net investment income not yet distributed | $604,856 | $553,325 |
34 See financial notes
Table of Contents
Schwab Target 2015 Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.22 | 11.13 | 10.48 | 10.16 | 9.09 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.19 | 0.20 | 0.20 | 0.19 | 0.16 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.60 | 1.12 | 0.66 | 0.32 | 1.06 | |||||||||||||||||
Total from investment operations | 0.79 | 1.32 | 0.86 | 0.51 | 1.22 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.20 | ) | (0.23 | ) | (0.21 | ) | (0.19 | ) | (0.15 | ) | ||||||||||||
Net asset value at end of period | 12.81 | 12.22 | 11.13 | 10.48 | 10.16 | |||||||||||||||||
Total return (%) | 6.56 | 12.06 | 8.41 | 5.10 | 13.55 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | — | — | 0.00 | 2 | ||||||||||||||||
Gross operating expenses1 | 0.11 | 0.14 | 0.19 | 0.22 | 0.39 | |||||||||||||||||
Net investment income (loss) | 1.52 | 1.72 | 1.85 | 1.94 | 1.91 | |||||||||||||||||
Portfolio turnover rate | 32 | 16 | 13 | 16 | 13 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 111 | 94 | 70 | 53 | 37 |
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.
See financial notes 35
Table of Contents
Schwab Target 2015 Fund
Portfolio Holdings as of October 31, 2014
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 | 91,839,924 | 107,476,185 | ||||||||
3 | .2% | Short-Term Investments | 3,512,779 | 3,512,779 | ||||||||
99 | .9% | Total Investments | 95,352,703 | 110,988,964 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 114,027 | |||||||||
100 | .0% | Net Assets | 111,102,991 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.7% of net assets | ||||||||
Equity Funds 44.3% | ||||||||
Global Real Estate 2.3% | ||||||||
Schwab Global Real Estate Fund (a) | 353,666 | 2,539,324 | ||||||
International 8.6% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 241,988 | 5,556,047 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 33,040 | 301,660 | ||||||
Schwab International Core Equity Fund (a) | 376,651 | 3,679,882 | ||||||
9,537,589 | ||||||||
Large-Cap 29.4% | ||||||||
Dodge & Cox Stock Fund | 3,239 | 581,825 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 405,274 | 8,040,643 | ||||||
Schwab Core Equity Fund (a) | 329,482 | 8,395,201 | ||||||
Schwab Dividend Equity Fund (a) | 221,065 | 4,237,817 | ||||||
Schwab S&P 500 Index Fund (a) | 236,179 | 7,555,373 | ||||||
TCW Relative Value Large Cap Fund | 173,350 | 3,829,305 | ||||||
32,640,164 | ||||||||
Small-Cap 4.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 86,165 | 1,579,397 | ||||||
Schwab Small-Cap Equity Fund (a) | 117,199 | 2,942,859 | ||||||
4,522,256 | ||||||||
49,239,333 | ||||||||
Fixed-Income Funds 50.0% | ||||||||
Inflation-Protected Bond 4.6% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 457,480 | 5,110,054 | ||||||
Intermediate-Term Bond 31.7% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 285,056 | 3,463,428 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 340,825 | 3,493,451 | ||||||
Schwab Total Bond Market Fund (a) | 2,966,453 | 28,299,961 | ||||||
35,256,840 | ||||||||
International Bond 0.8% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 81,493 | 859,751 | ||||||
Short-Term Bond 12.9% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 1,541,262 | 14,318,323 | ||||||
55,544,968 | ||||||||
Money Market Fund 2.4% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.01% (a)(b) | 2,691,884 | 2,691,884 | ||||||
Total Other Investment Companies | ||||||||
(Cost $91,839,924) | 107,476,185 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.2% of net assets | ||||||||
Time Deposits 3.2% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 1,106,319 | 1,106,319 | ||||||
DBS Bank Ltd. | ||||||||
0.03%, 11/03/14 | 193,822 | 193,822 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 1,106,319 | 1,106,319 | ||||||
Sumitomo Mitsui Banking Corp. | ||||||||
0.03%, 11/03/14 | 1,106,319 | 1,106,319 | ||||||
Total Short-Term Investments | ||||||||
(Cost $3,512,779) | 3,512,779 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $95,798,480 and the unrealized appreciation and depreciation were $15,330,334 and ($139,850), respectively, with a net unrealized appreciation of $15,190,484.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $107,476,185 | $— | $— | $107,476,185 | ||||||||||||
Short-Term Investments1 | — | 3,512,779 | — | 3,512,779 | ||||||||||||
Total | $107,476,185 | $3,512,779 | $— | $110,988,964 | ||||||||||||
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, 2014.
See financial notes 37
Table of Contents
Schwab Target 2015 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $85,525,626) | $99,601,627 | |||||
Investments in unaffiliated issuers, at value (cost $9,827,077) | + | 11,387,337 | ||||
Total investments, at value (cost $95,352,703) | 110,988,964 | |||||
Receivables: | ||||||
Investments sold | 740,000 | |||||
Fund shares sold | 79,259 | |||||
Dividends | 71,495 | |||||
Due from investment adviser | 1,019 | |||||
Prepaid expenses | + | 1,317 | ||||
Total assets | 111,882,054 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 651,679 | |||||
Fund shares redeemed | 95,457 | |||||
Accrued expenses | + | 31,927 | ||||
Total liabilities | 779,063 | |||||
Net Assets | ||||||
Total assets | 111,882,054 | |||||
Total liabilities | − | 779,063 | ||||
Net assets | $111,102,991 | |||||
Net Assets by Source | ||||||
Capital received from investors | 90,054,201 | |||||
Net investment income not yet distributed | 990,271 | |||||
Net realized capital gains | 4,422,258 | |||||
Net unrealized capital appreciation | 15,636,261 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$111,102,991 | 8,675,154 | $12.81 |
38 See financial notes
Table of Contents
Schwab Target 2015 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,204,563 | |||||
Dividends received from unaffiliated underlying funds | 394,244 | |||||
Interest | + | 1,009 | ||||
Total investment income | 1,599,816 | |||||
Expenses | ||||||
Professional fees | 36,633 | |||||
Transfer agent fees | 22,640 | |||||
Registration fees | 22,175 | |||||
Portfolio accounting fees | 9,134 | |||||
Shareholder reports | 8,221 | |||||
Custodian fees | 6,594 | |||||
Independent trustees’ fees | 6,586 | |||||
Other expenses | + | 2,541 | ||||
Total expenses | 114,524 | |||||
Expense reduction by CSIM | − | 114,524 | ||||
Net expenses | − | — | ||||
Net investment income | 1,599,816 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 1,502,331 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 261,211 | |||||
Net realized gains on sales of affiliated underlying funds | 2,402,296 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 1,071,067 | ||||
Net realized gains | 5,236,905 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 627,519 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (908,740 | ) | |||
Net change in unrealized appreciation (depreciation) | + | (281,221 | ) | |||
Net realized and unrealized gains | 4,955,684 | |||||
Increase in net assets resulting from operations | $6,555,500 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $1,599,816 | $1,423,683 | ||||||||
Net realized gains | 5,236,905 | 485,759 | ||||||||
Net change in unrealized appreciation (depreciation) | + | (281,221 | ) | 7,360,842 | ||||||
Increase in net assets from operations | 6,555,500 | 9,270,284 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,610,833 | ) | ($1,464,548 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,043,782 | $37,901,842 | 3,361,988 | $39,062,080 | ||||||||||||||
Shares reinvested | 125,055 | 1,526,926 | 126,443 | 1,398,455 | ||||||||||||||
Shares redeemed | + | (2,202,942 | ) | (27,468,032 | ) | (2,040,270 | ) | (23,734,773 | ) | |||||||||
Net transactions in fund shares | 965,895 | $11,960,736 | 1,448,161 | $16,725,762 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 7,709,259 | $94,197,588 | 6,261,098 | $69,666,090 | ||||||||||||||
Total increase | + | 965,895 | 16,905,403 | 1,448,161 | 24,531,498 | |||||||||||||
End of period | 8,675,154 | $111,102,991 | 7,709,259 | $94,197,588 | ||||||||||||||
Net investment income not yet distributed | $990,271 | $737,135 |
40 See financial notes
Table of Contents
Schwab Target 2020 Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.52 | 11.94 | 11.13 | 10.80 | 9.63 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.22 | 0.22 | 0.22 | 0.20 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.82 | 1.62 | 0.82 | 0.34 | 1.18 | |||||||||||||||||
Total from investment operations | 1.03 | 1.84 | 1.04 | 0.56 | 1.38 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.23 | ) | (0.26 | ) | (0.23 | ) | (0.23 | ) | (0.21 | ) | ||||||||||||
Net asset value at end of period | 14.32 | 13.52 | 11.94 | 11.13 | 10.80 | |||||||||||||||||
Total return (%) | 7.71 | 15.72 | 9.52 | 5.18 | 14.47 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | — | 0.00 | 2 | 0.00 | 2 | |||||||||||||||
Gross operating expenses1 | 0.04 | 0.05 | 0.06 | 0.06 | 0.07 | |||||||||||||||||
Net investment income (loss) | 1.48 | 1.71 | 1.89 | 1.92 | 2.01 | |||||||||||||||||
Portfolio turnover rate | 26 | 14 | 13 | 15 | 15 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 499 | 415 | 306 | 273 | 240 |
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.
See financial notes 41
Table of Contents
Schwab Target 2020 Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .0% | Other Investment Companies | 388,276,394 | 484,206,652 | ||||||||
3 | .1% | Short-Term Investments | 15,397,284 | 15,397,284 | ||||||||
100 | .1% | Total Investments | 403,673,678 | 499,603,936 | ||||||||
(0 | .1%) | Other Assets and Liabilities, Net | (438,532 | ) | ||||||||
100 | .0% | Net Assets | 499,165,404 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.0% of net assets | ||||||||
Equity Funds 57.9% | ||||||||
Global Real Estate 3.0% | ||||||||
Schwab Global Real Estate Fund (a) | 2,058,638 | 14,781,018 | ||||||
International 11.8% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 1,448,274 | 33,252,373 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 415,864 | 3,796,838 | ||||||
Schwab International Core Equity Fund (a) | 2,266,999 | 22,148,582 | ||||||
59,197,793 | ||||||||
Large-Cap 37.0% | ||||||||
Dodge & Cox Stock Fund | 14,154 | 2,542,682 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 2,307,052 | 45,771,923 | ||||||
Schwab Core Equity Fund (a) | 1,886,193 | 48,060,195 | ||||||
Schwab Dividend Equity Fund (a) | 1,242,032 | 23,809,746 | ||||||
Schwab S&P 500 Index Fund (a) | 1,327,968 | 42,481,713 | ||||||
TCW Relative Value Large Cap Fund | 997,061 | 22,025,069 | ||||||
184,691,328 | ||||||||
Small-Cap 6.1% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 581,124 | 10,652,001 | ||||||
Schwab Small-Cap Equity Fund (a) | 785,522 | 19,724,465 | ||||||
30,376,466 | ||||||||
289,046,605 | ||||||||
Fixed-Income Funds 38.1% | ||||||||
Inflation-Protected Bond 3.1% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 1,401,642 | 15,656,343 | ||||||
Intermediate-Term Bond 26.4% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,766,896 | 21,467,782 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 1,475,652 | 15,125,433 | ||||||
Schwab Total Bond Market Fund (a) | 9,982,914 | 95,237,005 | ||||||
131,830,220 | ||||||||
International Bond 1.1% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 502,623 | 5,302,667 | ||||||
Short-Term Bond 7.5% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 4,022,647 | 37,370,387 | ||||||
190,159,617 | ||||||||
Money Market Fund 1.0% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.01% (a)(b) | 5,000,430 | 5,000,430 | ||||||
Total Other Investment Companies | ||||||||
(Cost $388,276,394) | 484,206,652 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.1% of net assets | ||||||||
Time Deposits 3.1% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 4,952,867 | 4,952,867 | ||||||
DBS Bank Ltd. | ||||||||
0.03%, 11/03/14 | 538,683 | 538,683 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 4,952,867 | 4,952,867 | ||||||
Sumitomo Mitsui Banking Corp. | ||||||||
0.03%, 11/03/14 | 4,952,867 | 4,952,867 | ||||||
Total Short-Term Investments | ||||||||
(Cost $15,397,284) | 15,397,284 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $405,995,130 and the unrealized appreciation and depreciation were $93,884,458 and ($275,652), respectively, with a net unrealized appreciation of $93,608,806.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | The rate shown is the 7-day yield. |
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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $484,206,652 | $— | $— | $484,206,652 | ||||||||||||
Short-Term Investments1 | — | 15,397,284 | — | 15,397,284 | ||||||||||||
Total | $484,206,652 | $15,397,284 | $— | $499,603,936 | ||||||||||||
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, 2014.
See financial notes 43
Table of Contents
Schwab Target 2020 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $351,352,811) | $438,171,119 | |||||
Investments in unaffiliated issuers, at value (cost $52,320,867) | + | 61,432,817 | ||||
Total investments, at value (cost $403,673,678) | 499,603,936 | |||||
Receivables: | ||||||
Investments sold | 1,420,000 | |||||
Fund shares sold | 686,732 | |||||
Dividends | 236,149 | |||||
Due from investment adviser | 2,101 | |||||
Prepaid expenses | + | 7,305 | ||||
Total assets | 501,956,223 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,336,780 | |||||
Fund shares redeemed | 410,463 | |||||
Accrued expenses | + | 43,576 | ||||
Total liabilities | 2,790,819 | |||||
Net Assets | ||||||
Total assets | 501,956,223 | |||||
Total liabilities | − | 2,790,819 | ||||
Net assets | $499,165,404 | |||||
Net Assets by Source | ||||||
Capital received from investors | 411,554,353 | |||||
Net investment income not yet distributed | 3,805,442 | |||||
Net realized capital losses | (12,124,649 | ) | ||||
Net unrealized capital appreciation | 95,930,258 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$499,165,404 | 34,856,361 | $14.32 |
44 See financial notes
Table of Contents
Schwab Target 2020 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,833,812 | |||||
Dividends received from unaffiliated underlying funds | 1,978,244 | |||||
Interest | + | 4,403 | ||||
Total investment income | 6,816,459 | |||||
Expenses | ||||||
Registration fees | 42,306 | |||||
Professional fees | 39,970 | |||||
Shareholder reports | 30,173 | |||||
Transfer agent fees | 28,355 | |||||
Portfolio accounting fees | 24,453 | |||||
Custodian fees | 11,820 | |||||
Independent trustees’ fees | 8,275 | |||||
Other expenses | + | 8,241 | ||||
Total expenses | 193,593 | |||||
Expense reduction by CSIM | − | 193,593 | ||||
Net expenses | − | — | ||||
Net investment income | 6,816,459 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 8,350,952 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 1,318,314 | |||||
Net realized gains on sales of affiliated underlying funds | 10,095,695 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 7,145,813 | ||||
Net realized gains | 26,910,774 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 6,453,921 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (6,222,172 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 231,749 | ||||
Net realized and unrealized gains | 27,142,523 | |||||
Increase in net assets resulting from operations | $33,958,982 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $6,816,459 | $6,102,847 | ||||||||
Net realized gains | 26,910,774 | 2,458,347 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 231,749 | 43,123,487 | |||||||
Increase in net assets from operations | 33,958,982 | 51,684,681 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($7,213,636 | ) | ($6,683,111 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,720,572 | $120,772,973 | 9,795,603 | $124,307,451 | ||||||||||||||
Shares reinvested | 510,642 | 6,944,736 | 542,153 | 6,451,623 | ||||||||||||||
Shares redeemed | + | (5,023,958 | ) | (69,819,952 | ) | (5,276,854 | ) | (66,887,924 | ) | |||||||||
Net transactions in fund shares | 4,207,256 | $57,897,757 | 5,060,902 | $63,871,150 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 30,649,105 | $414,522,301 | 25,588,203 | $305,649,581 | ||||||||||||||
Total increase | + | 4,207,256 | 84,643,103 | 5,060,902 | 108,872,720 | |||||||||||||
End of period | 34,856,361 | $499,165,404 | 30,649,105 | $414,522,301 | ||||||||||||||
Net investment income not yet distributed | $3,805,442 | $2,760,891 |
46 See financial notes
Table of Contents
Schwab Target 2025 Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.63 | 11.73 | 10.84 | 10.46 | 9.21 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.21 | 0.19 | 0.19 | 0.16 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.93 | 1.93 | 0.89 | 0.38 | 1.24 | |||||||||||||||||
Total from investment operations | 1.14 | 2.14 | 1.08 | 0.57 | 1.40 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.23 | ) | (0.24 | ) | (0.19 | ) | (0.19 | ) | (0.15 | ) | ||||||||||||
Net asset value at end of period | 14.54 | 13.63 | 11.73 | 10.84 | 10.46 | |||||||||||||||||
Total return (%) | 8.44 | 18.54 | 10.14 | 5.44 | 15.34 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | 0.00 | 2 | — | 0.00 | 2 | |||||||||||||||
Gross operating expenses1 | 0.06 | 0.08 | 0.10 | 0.14 | 0.24 | |||||||||||||||||
Net investment income (loss) | 1.39 | 1.57 | 1.73 | 1.66 | 1.62 | |||||||||||||||||
Portfolio turnover rate | 27 | 10 | 13 | 9 | 13 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 344 | 251 | 141 | 104 | 63 |
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.
See financial notes 47
Table of Contents
Schwab Target 2025 Fund
Portfolio Holdings as of October 31, 2014
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 | 277,825,845 | 333,298,197 | ||||||||
3 | .1% | Short-Term Investments | 10,605,143 | 10,605,143 | ||||||||
99 | .9% | Total Investments | 288,430,988 | 343,903,340 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 320,354 | |||||||||
100 | .0% | Net Assets | 344,223,694 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.8% of net assets | ||||||||
Equity Funds 67.8% | ||||||||
Global Real Estate 3.5% | ||||||||
Schwab Global Real Estate Fund (a) | 1,654,273 | 11,877,683 | ||||||
International 14.4% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 1,177,278 | 27,030,310 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 499,531 | 4,560,718 | ||||||
Schwab International Core Equity Fund (a) | 1,845,200 | 18,027,602 | ||||||
49,618,630 | ||||||||
Large-Cap 42.1% | ||||||||
Dodge & Cox Stock Fund | 10,865 | 1,951,837 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 1,810,717 | 35,924,629 | ||||||
Schwab Core Equity Fund (a) | 1,493,786 | 38,061,671 | ||||||
Schwab Dividend Equity Fund (a) | 967,290 | 18,542,945 | ||||||
Schwab S&P 500 Index Fund (a) | 1,041,807 | 33,327,394 | ||||||
TCW Relative Value Large Cap Fund | 778,882 | 17,205,508 | ||||||
145,013,984 | ||||||||
Small-Cap 7.8% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 512,156 | 9,387,816 | ||||||
Schwab Small-Cap Equity Fund (a) | 693,545 | 17,414,916 | ||||||
26,802,732 | ||||||||
233,313,029 | ||||||||
Fixed-Income Funds 29.0% | ||||||||
Inflation-Protected Bond 2.1% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 656,234 | 7,330,137 | ||||||
Intermediate-Term Bond 21.4% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,344,774 | 16,339,009 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 903,044 | 9,256,199 | ||||||
Schwab Total Bond Market Fund (a) | 5,027,329 | 47,960,717 | ||||||
73,555,925 | ||||||||
International Bond 1.0% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 331,802 | 3,500,512 | ||||||
Short-Term Bond 4.5% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 1,679,074 | 15,598,594 | ||||||
99,985,168 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $277,825,845) | 333,298,197 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.1% of net assets | ||||||||
Time Deposits 3.1% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 377,060 | 377,060 | ||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 3,409,361 | 3,409,361 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 3,409,361 | 3,409,361 | ||||||
Wells Fargo | ||||||||
0.03%, 11/03/14 | 3,409,361 | 3,409,361 | ||||||
Total Short-Term Investments | ||||||||
(Cost $10,605,143) | 10,605,143 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $289,542,428 and the unrealized appreciation and depreciation were $54,902,534 and ($541,622), respectively, with a net unrealized appreciation of $54,360,912.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $333,298,197 | $— | $— | $333,298,197 | ||||||||||||
Short-Term Investments1 | — | 10,605,143 | — | 10,605,143 | ||||||||||||
Total | $333,298,197 | $10,605,143 | $— | $343,903,340 | ||||||||||||
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, 2014.
See financial notes 49
Table of Contents
Schwab Target 2025 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $247,797,489) | $297,801,843 | |||||
Investments in unaffiliated issuers, at value (cost $40,633,499) | + | 46,101,497 | ||||
Total investments, at value (cost $288,430,988) | 343,903,340 | |||||
Receivables: | ||||||
Investments sold | 1,020,000 | |||||
Fund shares sold | 462,623 | |||||
Dividends | 118,241 | |||||
Due from investment adviser | 2,056 | |||||
Interest | 9 | |||||
Prepaid expenses | + | 3,284 | ||||
Total assets | 345,509,553 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 1,058,573 | |||||
Fund shares redeemed | 184,831 | |||||
Accrued expenses | + | 42,455 | ||||
Total liabilities | 1,285,859 | |||||
Net Assets | ||||||
Total assets | 345,509,553 | |||||
Total liabilities | − | 1,285,859 | ||||
Net assets | $344,223,694 | |||||
Net Assets by Source | ||||||
Capital received from investors | 276,761,765 | |||||
Net investment income not yet distributed | 2,164,988 | |||||
Net realized capital gains | 9,824,589 | |||||
Net unrealized capital appreciation | 55,472,352 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$344,223,694 | 23,666,976 | $14.54 |
50 See financial notes
Table of Contents
Schwab Target 2025 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $2,884,259 | |||||
Dividends received from unaffiliated underlying funds | 1,280,862 | |||||
Interest | + | 2,805 | ||||
Total investment income | 4,167,926 | |||||
Expenses | ||||||
Registration fees | 40,619 | |||||
Professional fees | 38,436 | |||||
Transfer agent fees | 26,343 | |||||
Shareholder reports | 21,364 | |||||
Portfolio accounting fees | 21,214 | |||||
Custodian fees | 10,242 | |||||
Independent trustees’ fees | 7,490 | |||||
Other expenses | + | 5,184 | ||||
Total expenses | 170,892 | |||||
Expense reduction by CSIM | − | 170,892 | ||||
Net expenses | − | — | ||||
Net investment income | 4,167,926 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 5,901,906 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 856,699 | |||||
Net realized gains on sales of affiliated underlying funds | 3,187,504 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 2,482,637 | ||||
Net realized gains | 12,428,746 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 9,312,654 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (1,822,759 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 7,489,895 | ||||
Net realized and unrealized gains | 19,918,641 | |||||
Increase in net assets resulting from operations | $24,086,567 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $4,167,926 | $3,022,858 | ||||||||
Net realized gains | 12,428,746 | 522,126 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 7,489,895 | 28,887,950 | |||||||
Increase in net assets from operations | 24,086,567 | 32,432,934 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($4,339,215 | ) | ($2,993,027 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,491,229 | $119,202,694 | 8,685,243 | $109,893,079 | ||||||||||||||
Shares reinvested | 308,192 | 4,243,806 | 248,579 | 2,915,831 | ||||||||||||||
Shares redeemed | + | (3,588,071 | ) | (50,461,215 | ) | (2,529,490 | ) | (32,070,753 | ) | |||||||||
Net transactions in fund shares | 5,211,350 | $72,985,285 | 6,404,332 | $80,738,157 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 18,455,626 | $251,491,057 | 12,051,294 | $141,312,993 | ||||||||||||||
Total increase | + | 5,211,350 | 92,732,637 | 6,404,332 | 110,178,064 | |||||||||||||
End of period | 23,666,976 | $344,223,694 | 18,455,626 | $251,491,057 | ||||||||||||||
Net investment income not yet distributed | $2,164,988 | $1,327,432 |
52 See financial notes
Table of Contents
Schwab Target 2030 Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 14.70 | 12.42 | 11.43 | 11.05 | 9.69 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.22 | 0.19 | 0.19 | 0.17 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.10 | 2.31 | 0.99 | 0.38 | 1.36 | |||||||||||||||||
Total from investment operations | 1.32 | 2.53 | 1.18 | 0.57 | 1.53 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.25 | ) | (0.19 | ) | (0.19 | ) | (0.17 | ) | ||||||||||||
Net asset value at end of period | 15.77 | 14.70 | 12.42 | 11.43 | 11.05 | |||||||||||||||||
Total return (%) | 9.11 | 20.73 | 10.52 | 5.20 | 15.97 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | — | — | 0.00 | 2 | ||||||||||||||||
Gross operating expenses1 | 0.03 | 0.04 | 0.05 | 0.05 | 0.08 | |||||||||||||||||
Net investment income (loss) | 1.38 | 1.59 | 1.62 | 1.60 | 1.64 | |||||||||||||||||
Portfolio turnover rate | 26 | 10 | 12 | 8 | 14 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 727 | 621 | 444 | 372 | 296 |
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.
See financial notes 53
Table of Contents
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2014
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 | 529,292,337 | 708,429,206 | ||||||||
2 | .7% | Short-Term Investments | 19,583,411 | 19,583,411 | ||||||||
100 | .1% | Total Investments | 548,875,748 | 728,012,617 | ||||||||
(0 | .1%) | Other Assets and Liabilities, Net | (632,857 | ) | ||||||||
100 | .0% | Net Assets | 727,379,760 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.4% of net assets | ||||||||
Equity Funds 75.7% | ||||||||
Global Real Estate 3.8% | ||||||||
Schwab Global Real Estate Fund (a) | 3,890,065 | 27,930,664 | ||||||
International 16.6% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 2,803,203 | 64,361,540 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 1,487,245 | 13,578,546 | ||||||
Schwab International Core Equity Fund (a) | 4,348,656 | 42,486,374 | ||||||
120,426,460 | ||||||||
Large-Cap 46.0% | ||||||||
Dodge & Cox Stock Fund | 23,327 | 4,190,467 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 4,202,473 | 83,377,069 | ||||||
Schwab Core Equity Fund (a) | 3,450,450 | 87,917,473 | ||||||
Schwab Dividend Equity Fund (a) | 2,235,575 | 42,855,969 | ||||||
Schwab S&P 500 Index Fund (a) | 2,390,764 | 76,480,525 | ||||||
TCW Relative Value Large Cap Fund | 1,803,035 | 39,829,053 | ||||||
334,650,556 | ||||||||
Small-Cap 9.3% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 1,279,435 | 23,452,041 | ||||||
Schwab Small-Cap Equity Fund (a) | 1,755,081 | 44,070,075 | ||||||
67,522,116 | ||||||||
550,529,796 | ||||||||
Fixed-Income Funds 21.7% | ||||||||
Inflation-Protected Bond 1.4% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 939,055 | 10,489,243 | ||||||
Intermediate-Term Bond 16.7% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 2,350,639 | 28,560,261 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 1,517,416 | 15,553,516 | ||||||
Schwab Total Bond Market Fund (a) | 8,104,012 | 77,312,279 | ||||||
121,426,056 | ||||||||
International Bond 0.8% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 554,624 | 5,851,280 | ||||||
Short-Term Bond 2.8% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 2,167,151 | 20,132,831 | ||||||
157,899,410 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $529,292,337) | 708,429,206 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.7% of net assets | ||||||||
Time Deposits 2.7% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 7,199,358 | 7,199,358 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 7,199,358 | 7,199,358 | ||||||
Sumitomo Mitsui Banking Corp. | ||||||||
0.03%, 11/03/14 | 561,251 | 561,251 | ||||||
Wells Fargo | ||||||||
0.03%, 11/03/14 | 4,623,444 | 4,623,444 | ||||||
Total Short-Term Investments | ||||||||
(Cost $19,583,411) | 19,583,411 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $552,878,092 and the unrealized appreciation and depreciation were $176,233,104 and ($1,098,579), respectively, with a net unrealized appreciation of $175,134,525.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $708,429,206 | $— | $— | $708,429,206 | ||||||||||||
Short-Term Investments1 | — | 19,583,411 | — | 19,583,411 | ||||||||||||
Total | $708,429,206 | $19,583,411 | $— | $728,012,617 | ||||||||||||
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, 2014.
See financial notes 55
Table of Contents
Schwab Target 2030 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $472,526,991) | $635,849,425 | |||||
Investments in unaffiliated issuers, at value (cost $76,348,757) | + | 92,163,192 | ||||
Total investments, at value (cost $548,875,748) | 728,012,617 | |||||
Receivables: | ||||||
Investments sold | 1,190,000 | |||||
Fund shares sold | 525,416 | |||||
Dividends | 189,057 | |||||
Due from investment adviser | 2,671 | |||||
Prepaid expenses | + | 9,687 | ||||
Total assets | 729,929,448 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,159,586 | |||||
Fund shares redeemed | 340,866 | |||||
Accrued expenses | + | 49,236 | ||||
Total liabilities | 2,549,688 | |||||
Net Assets | ||||||
Total assets | 729,929,448 | |||||
Total liabilities | − | 2,549,688 | ||||
Net assets | $727,379,760 | |||||
Net Assets by Source | ||||||
Capital received from investors | 538,815,397 | |||||
Net investment income not yet distributed | 4,196,623 | |||||
Net realized capital gains | 5,230,871 | |||||
Net unrealized capital appreciation | 179,136,869 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$727,379,760 | 46,114,752 | $15.77 |
56 See financial notes
Table of Contents
Schwab Target 2030 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $6,538,763 | |||||
Dividends received from unaffiliated underlying funds | 2,828,664 | |||||
Interest | + | 5,357 | ||||
Total investment income | 9,372,784 | |||||
Expenses | ||||||
Shareholder reports | 46,868 | |||||
Professional fees | 42,234 | |||||
Registration fees | 40,469 | |||||
Transfer agent fees | 29,819 | |||||
Portfolio accounting fees | 28,777 | |||||
Custodian fees | 15,309 | |||||
Independent trustees’ fees | 9,317 | |||||
Other expenses | + | 12,213 | ||||
Total expenses | 225,006 | |||||
Expense reduction by CSIM | − | 225,006 | ||||
Net expenses | − | — | ||||
Net investment income | 9,372,784 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 16,080,048 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 2,095,580 | |||||
Net realized gains on sales of affiliated underlying funds | 10,690,660 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 11,723,632 | ||||
Net realized gains | 40,589,920 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 18,889,933 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (9,934,991 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 8,954,942 | ||||
Net realized and unrealized gains | 49,544,862 | |||||
Increase in net assets resulting from operations | $58,917,646 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $9,372,784 | $8,355,081 | ||||||||
Net realized gains | 40,589,920 | 2,555,290 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 8,954,942 | 88,069,955 | |||||||
Increase in net assets from operations | 58,917,646 | 98,980,326 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($10,903,512 | ) | ($9,003,665 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,997,016 | $136,481,276 | 11,596,872 | $156,363,209 | ||||||||||||||
Shares reinvested | 710,161 | 10,588,500 | 703,372 | 8,749,953 | ||||||||||||||
Shares redeemed | + | (5,865,191 | ) | (89,178,074 | ) | (5,790,131 | ) | (77,672,946 | ) | |||||||||
Net transactions in fund shares | 3,841,986 | $57,891,702 | 6,510,113 | $87,440,216 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 42,272,766 | $621,473,924 | 35,762,653 | $444,057,047 | ||||||||||||||
Total increase | + | 3,841,986 | 105,905,836 | 6,510,113 | 177,416,877 | |||||||||||||
End of period | 46,114,752 | $727,379,760 | 42,272,766 | $621,473,924 | ||||||||||||||
Net investment income not yet distributed | $4,196,623 | $3,001,805 |
58 See financial notes
Table of Contents
Schwab Target 2035 Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 14.12 | 11.69 | 10.70 | 10.32 | 9.00 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.20 | 0.20 | 0.16 | 0.16 | 0.13 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.15 | 2.45 | 0.99 | 0.38 | 1.33 | |||||||||||||||||
Total from investment operations | 1.35 | 2.65 | 1.15 | 0.54 | 1.46 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.22 | ) | (0.16 | ) | (0.16 | ) | (0.14 | ) | ||||||||||||
Net asset value at end of period | 15.23 | 14.12 | 11.69 | 10.70 | 10.32 | |||||||||||||||||
Total return (%) | 9.62 | 23.02 | 10.89 | 5.27 | 16.29 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | — | — | 0.00 | 2 | ||||||||||||||||
Gross operating expenses1 | 0.07 | 0.09 | 0.13 | 0.17 | 0.30 | |||||||||||||||||
Net investment income (loss) | 1.28 | 1.42 | 1.45 | 1.41 | 1.38 | |||||||||||||||||
Portfolio turnover rate | 24 | 5 | 11 | 4 | 14 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 282 | 204 | 111 | 77 | 49 |
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.
See financial notes 59
Table of Contents
Schwab Target 2035 Fund
Portfolio Holdings as of October 31, 2014
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 | 222,565,426 | 275,320,881 | ||||||||
2 | .2% | Short-Term Investments | 6,243,462 | 6,243,462 | ||||||||
99 | .9% | Total Investments | 228,808,888 | 281,564,343 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 235,409 | |||||||||
100 | .0% | Net Assets | 281,799,752 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.7% of net assets | ||||||||
Equity Funds 82.6% | ||||||||
Global Real Estate 4.2% | ||||||||
Schwab Global Real Estate Fund (a) | 1,641,505 | 11,786,004 | ||||||
International 18.5% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 1,186,085 | 27,232,505 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 752,760 | 6,872,696 | ||||||
Schwab International Core Equity Fund (a) | 1,843,020 | 18,006,304 | ||||||
52,111,505 | ||||||||
Large-Cap 49.2% | ||||||||
Dodge & Cox Stock Fund | 10,838 | 1,946,989 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 1,737,627 | 34,474,527 | ||||||
Schwab Core Equity Fund (a) | 1,438,310 | 36,648,142 | ||||||
Schwab Dividend Equity Fund (a) | 926,642 | 17,763,732 | ||||||
Schwab S&P 500 Index Fund (a) | 991,827 | 31,728,541 | ||||||
TCW Relative Value Large Cap Fund | 735,878 | 16,255,537 | ||||||
138,817,468 | ||||||||
Small-Cap 10.7% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 568,739 | 10,424,988 | ||||||
Schwab Small-Cap Equity Fund (a) | 783,366 | 19,670,319 | ||||||
30,095,307 | ||||||||
232,810,284 | ||||||||
Fixed-Income Funds 15.1% | ||||||||
Inflation-Protected Bond 1.0% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 252,080 | 2,815,730 | ||||||
Intermediate-Term Bond 11.9% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 723,166 | 8,786,464 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 419,647 | 4,301,384 | ||||||
Schwab Total Bond Market Fund (a) | 2,148,005 | 20,491,968 | ||||||
33,579,816 | ||||||||
International Bond 0.5% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 129,325 | 1,364,375 | ||||||
Short-Term Bond 1.7% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 511,375 | 4,750,676 | ||||||
42,510,597 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $222,565,426) | 275,320,881 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.2% of net assets | ||||||||
Time Deposits 2.2% | ||||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 2,786,030 | 2,786,030 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 671,402 | 671,402 | ||||||
Wells Fargo | ||||||||
0.03%, 11/03/14 | 2,786,030 | 2,786,030 | ||||||
Total Short-Term Investments | ||||||||
(Cost $6,243,462) | 6,243,462 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was 229,749,465 and the unrealized appreciation and depreciation were $52,160,546 and ($345,668), respectively, with a net unrealized appreciation of $51,814,878.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $275,320,881 | $— | $— | $275,320,881 | ||||||||||||
Short-Term Investments1 | — | 6,243,462 | — | 6,243,462 | ||||||||||||
Total | $275,320,881 | $6,243,462 | $— | $281,564,343 | ||||||||||||
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, 2014.
See financial notes 61
Table of Contents
Schwab Target 2035 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $200,738,645) | $248,331,891 | |||||
Investments in unaffiliated issuers, at value (cost $28,070,243) | + | 33,232,452 | ||||
Total investments, at value (cost $228,808,888) | 281,564,343 | |||||
Receivables: | ||||||
Investments sold | 790,000 | |||||
Fund shares sold | 226,226 | |||||
Dividends | 49,451 | |||||
Due from investment adviser | 1,729 | |||||
Prepaid expenses | + | 2,679 | ||||
Total assets | 282,634,428 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 629,586 | |||||
Fund shares redeemed | 165,670 | |||||
Accrued expenses | + | 39,420 | ||||
Total liabilities | 834,676 | |||||
Net Assets | ||||||
Total assets | 282,634,428 | |||||
Total liabilities | − | 834,676 | ||||
Net assets | $281,799,752 | |||||
Net Assets by Source | ||||||
Capital received from investors | 218,366,507 | |||||
Net investment income not yet distributed | 1,307,494 | |||||
Net realized capital gains | 9,370,296 | |||||
Net unrealized capital appreciation | 52,755,455 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$281,799,752 | 18,498,989 | $15.23 |
62 See financial notes
Table of Contents
Schwab Target 2035 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $2,220,034 | |||||
Dividends received from unaffiliated underlying funds | 914,335 | |||||
Interest | + | 1,661 | ||||
Total investment income | 3,136,030 | |||||
Expenses | ||||||
Professional fees | 37,873 | |||||
Registration fees | 34,798 | |||||
Transfer agent fees | 27,029 | |||||
Shareholder reports | 21,828 | |||||
Portfolio accounting fees | 20,148 | |||||
Custodian fees | 9,203 | |||||
Independent trustees’ fees | 7,232 | |||||
Other expenses | + | 4,368 | ||||
Total expenses | 162,479 | |||||
Expense reduction by CSIM | − | 162,479 | ||||
Net expenses | − | — | ||||
Net investment income | 3,136,030 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 5,874,688 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 704,175 | |||||
Net realized gains on sales of affiliated underlying funds | 2,633,997 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 2,448,676 | ||||
Net realized gains | 11,661,536 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 9,223,386 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (1,803,338 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 7,420,048 | ||||
Net realized and unrealized gains | 19,081,584 | |||||
Increase in net assets resulting from operations | $22,217,614 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $3,136,030 | $2,173,386 | ||||||||
Net realized gains | 11,661,536 | 378,227 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 7,420,048 | 28,953,150 | |||||||
Increase in net assets from operations | 22,217,614 | 31,504,763 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($3,570,560 | ) | ($2,151,560 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 6,032,360 | $88,289,647 | 6,414,310 | $82,496,975 | ||||||||||||||
Shares reinvested | 242,410 | 3,485,859 | 178,770 | 2,102,339 | ||||||||||||||
Shares redeemed | + | (2,250,360 | ) | (32,933,604 | ) | (1,571,980 | ) | (20,151,520 | ) | |||||||||
Net transactions in fund shares | 4,024,410 | $58,841,902 | 5,021,100 | $64,447,794 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 14,474,579 | $204,310,796 | 9,453,479 | $110,509,799 | ||||||||||||||
Total increase | + | 4,024,410 | 77,488,956 | 5,021,100 | 93,800,997 | |||||||||||||
End of period | 18,498,989 | $281,799,752 | 14,474,579 | $204,310,796 | ||||||||||||||
Net investment income not yet distributed | $1,307,494 | $751,951 |
64 See financial notes
Table of Contents
Schwab Target 2040 Fund
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.49 | 12.67 | 11.55 | 11.16 | 9.71 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.22 | 0.17 | 0.17 | 0.15 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.33 | 2.84 | 1.12 | 0.40 | 1.46 | |||||||||||||||||
Total from investment operations | 1.54 | 3.06 | 1.29 | 0.57 | 1.61 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.26 | ) | (0.24 | ) | (0.17 | ) | (0.18 | ) | (0.16 | ) | ||||||||||||
Net asset value at end of period | 16.77 | 15.49 | 12.67 | 11.55 | 11.16 | |||||||||||||||||
Total return (%) | 10.07 | 24.55 | 11.33 | 5.08 | 16.71 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | — | — | — | 0.00 | 2 | ||||||||||||||||
Gross operating expenses1 | 0.04 | 0.04 | 0.06 | 0.06 | 0.10 | |||||||||||||||||
Net investment income (loss) | 1.26 | 1.47 | 1.42 | 1.42 | 1.44 | |||||||||||||||||
Portfolio turnover rate | 23 | 6 | 12 | 3 | 15 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 768 | 639 | 435 | 342 | 259 |
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.
See financial notes 65
Table of Contents
Schwab Target 2040 Fund
Portfolio Holdings as of October 31, 2014
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 | 550,135,212 | 752,664,598 | ||||||||
2 | .2% | Short-Term Investments | 16,632,261 | 16,632,261 | ||||||||
100 | .1% | Total Investments | 566,767,473 | 769,296,859 | ||||||||
(0 | .1%) | Other Assets and Liabilities, Net | (822,430 | ) | ||||||||
100 | .0% | Net Assets | 768,474,429 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.9% of net assets | ||||||||
Equity Funds 88.3% | ||||||||
Global Real Estate 4.5% | ||||||||
Schwab Global Real Estate Fund (a) | 4,779,252 | 34,315,027 | ||||||
International 20.1% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 3,454,154 | 79,307,379 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 2,500,623 | 22,830,691 | ||||||
Schwab International Core Equity Fund (a) | 5,400,807 | 52,765,885 | ||||||
154,903,955 | ||||||||
Large-Cap 51.8% | ||||||||
Dodge & Cox Stock Fund | 28,440 | 5,109,022 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 5,021,116 | 99,618,945 | ||||||
Schwab Core Equity Fund (a) | 4,121,548 | 105,017,049 | ||||||
Schwab Dividend Equity Fund (a) | 2,649,099 | 50,783,233 | ||||||
Schwab S&P 500 Index Fund (a) | 2,836,058 | 90,725,482 | ||||||
TCW Relative Value Large Cap Fund | 2,126,987 | 46,985,132 | ||||||
398,238,863 | ||||||||
Small-Cap 11.9% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 1,732,691 | 31,760,221 | ||||||
Schwab Small-Cap Equity Fund (a) | 2,375,824 | 59,656,947 | ||||||
91,417,168 | ||||||||
678,875,013 | ||||||||
Fixed-Income Funds 9.6% | ||||||||
Inflation-Protected Bond 0.5% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 366,838 | 4,097,578 | ||||||
Intermediate-Term Bond 7.8% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,589,773 | 19,315,743 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 671,685 | 6,884,775 | ||||||
Schwab Total Bond Market Fund (a) | 3,538,065 | 33,753,137 | ||||||
59,953,655 | ||||||||
International Bond 0.2% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 115,319 | 1,216,611 | ||||||
Short-Term Bond 1.1% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 917,303 | 8,521,741 | ||||||
73,789,585 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $550,135,212) | 752,664,598 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.2% of net assets | ||||||||
Time Deposits 2.2% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 7,591,214 | 7,591,214 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 7,591,214 | 7,591,214 | ||||||
Sumitomo Mitsui Banking Corp. | ||||||||
0.03%, 11/03/14 | 1,449,833 | 1,449,833 | ||||||
Total Short-Term Investments | ||||||||
(Cost $16,632,261) | 16,632,261 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was 571,099,653 and the unrealized appreciation and depreciation were $198,809,202 and ($611,996), respectively, with a net unrealized appreciation of $198,197,206.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $752,664,598 | $— | $— | $752,664,598 | ||||||||||||
Short-Term Investments1 | — | 16,632,261 | — | 16,632,261 | ||||||||||||
Total | $752,664,598 | $16,632,261 | $— | $769,296,859 | ||||||||||||
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, 2014.
See financial notes 67
Table of Contents
Schwab Target 2040 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $497,208,947) | $681,254,701 | |||||
Investments in unaffiliated issuers, at value (cost $69,558,526) | + | 88,042,158 | ||||
Total investments, at value (cost $566,767,473) | 769,296,859 | |||||
Receivables: | ||||||
Investments sold | 1,170,000 | |||||
Fund shares sold | 525,098 | |||||
Dividends | 81,923 | |||||
Due from investment adviser | 2,859 | |||||
Prepaid expenses | + | 9,439 | ||||
Total assets | 771,086,178 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,212,153 | |||||
Fund shares redeemed | 338,833 | |||||
Accrued expenses | + | 60,763 | ||||
Total liabilities | 2,611,749 | |||||
Net Assets | ||||||
Total assets | 771,086,178 | |||||
Total liabilities | − | 2,611,749 | ||||
Net assets | $768,474,429 | |||||
Net Assets by Source | ||||||
Capital received from investors | 550,174,448 | |||||
Net investment income not yet distributed | 3,169,629 | |||||
Net realized capital gains | 12,600,966 | |||||
Net unrealized capital appreciation | 202,529,386 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$768,474,429 | 45,812,038 | $16.77 |
68 See financial notes
Table of Contents
Schwab Target 2040 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $6,465,278 | |||||
Dividends received from unaffiliated underlying funds | 2,460,263 | |||||
Interest | + | 4,494 | ||||
Total investment income | 8,930,035 | |||||
Expenses | ||||||
Shareholder reports | 78,014 | |||||
Professional fees | 42,466 | |||||
Registration fees | 41,705 | |||||
Transfer agent fees | 39,117 | |||||
Portfolio accounting fees | 29,425 | |||||
Custodian fees | 16,314 | |||||
Independent trustees’ fees | 9,451 | |||||
Other expenses | + | 12,628 | ||||
Total expenses | 269,120 | |||||
Expense reduction by CSIM | − | 269,120 | ||||
Net expenses | − | — | ||||
Net investment income | 8,930,035 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 19,073,215 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 2,091,205 | |||||
Net realized gains on sales of affiliated underlying funds | 8,576,293 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 12,779,399 | ||||
Net realized gains | 42,520,112 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 26,726,819 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (10,563,401 | ) | |||
Net change in unrealized appreciation (depreciation) | + | 16,163,418 | ||||
Net realized and unrealized gains | 58,683,530 | |||||
Increase in net assets resulting from operations | $67,613,565 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $8,930,035 | $7,852,541 | ||||||||
Net realized gains | 42,520,112 | 1,785,300 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 16,163,418 | 107,182,294 | |||||||
Increase in net assets from operations | 67,613,565 | 116,820,135 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($11,083,321 | ) | ($8,424,619 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 9,715,793 | $156,225,134 | 11,808,472 | $164,760,752 | ||||||||||||||
Shares reinvested | 684,108 | 10,822,584 | 647,209 | 8,251,913 | ||||||||||||||
Shares redeemed | + | (5,866,001 | ) | (94,545,374 | ) | (5,499,831 | ) | (76,790,642 | ) | |||||||||
Net transactions in fund shares | 4,533,900 | $72,502,344 | 6,955,850 | $96,222,023 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 41,278,138 | $639,441,841 | 34,322,288 | $434,824,302 | ||||||||||||||
Total increase | + | 4,533,900 | 129,032,588 | 6,955,850 | 204,617,539 | |||||||||||||
End of period | 45,812,038 | $768,474,429 | 41,278,138 | $639,441,841 | ||||||||||||||
Net investment income not yet distributed | $3,169,629 | $2,124,949 |
70 See financial notes
Table of Contents
Schwab Target 2045 Fund
Financial Statements
Financial Highlights
11/1/13– | 1/23/131– | |||||||||
10/31/14 | 10/31/13 | |||||||||
Per-Share Data ($) | ||||||||||
Net asset value at beginning of period | 11.66 | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment income (loss) | 0.16 | 0.02 | ||||||||
Net realized and unrealized gains (losses) | 1.03 | 1.64 | ||||||||
Total from investment operations | 1.19 | 1.66 | ||||||||
Less distributions: | ||||||||||
Distributions from net investment income | (0.18 | ) | — | |||||||
Net asset value at end of period | 12.67 | 11.66 | ||||||||
Total return (%) | 10.30 | 16.60 | 2 | |||||||
Ratios/Supplemental Data (%) | ||||||||||
Ratios to average net assets: | ||||||||||
Net operating expenses3 | — | 0.00 | 4,5 | |||||||
Gross operating expenses3 | 0.32 | 1.08 | 4 | |||||||
Net investment income (loss) | 1.03 | 0.46 | 4 | |||||||
Portfolio turnover rate | 23 | 39 | 2 | |||||||
Net assets, end of period ($ x 1,000,000) | 41 | 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, 2014
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 | 36,977,660 | 40,151,211 | ||||||||
2 | .0% | Short-Term Investments | 824,890 | 824,890 | ||||||||
99 | .9% | Total Investments | 37,802,550 | 40,976,101 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 25,380 | |||||||||
100 | .0% | Net Assets | 41,001,481 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.9% of net assets | ||||||||
Equity Funds 91.4% | ||||||||
Global Real Estate 4.6% | ||||||||
Schwab Global Real Estate Fund (a) | 263,963 | 1,895,258 | ||||||
International 21.0% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 191,087 | 4,387,364 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 147,461 | 1,346,321 | ||||||
Schwab International Core Equity Fund (a) | 296,812 | 2,899,846 | ||||||
8,633,531 | ||||||||
Large-Cap 53.2% | ||||||||
Dodge & Cox Stock Fund | 1,591 | 285,859 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 274,441 | 5,444,909 | ||||||
Schwab Core Equity Fund (a) | 225,804 | 5,753,493 | ||||||
Schwab Dividend Equity Fund (a) | 145,377 | 2,786,866 | ||||||
Schwab S&P 500 Index Fund (a) | 155,822 | 4,984,728 | ||||||
TCW Relative Value Large Cap Fund | 116,126 | 2,565,230 | ||||||
21,821,085 | ||||||||
Small-Cap 12.6% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 98,072 | 1,797,665 | ||||||
Schwab Small-Cap Equity Fund (a) | 133,466 | 3,351,327 | ||||||
5,148,992 | ||||||||
37,498,866 | ||||||||
Fixed-Income Funds 6.5% | ||||||||
Inflation-Protected Bond 0.3% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 10,886 | 121,599 | ||||||
Intermediate-Term Bond 5.3% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 68,179 | 828,377 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 19,885 | 203,825 | ||||||
Schwab Total Bond Market Fund (a) | 117,794 | 1,123,753 | ||||||
2,155,955 | ||||||||
International Bond 0.1% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 5,215 | 55,014 | ||||||
Short-Term Bond 0.8% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 34,422 | 319,777 | ||||||
2,652,345 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $36,977,660) | 40,151,211 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.0% of net assets | ||||||||
Time Deposits 2.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 405,088 | 405,088 | ||||||
Brown Brothers Harriman | ||||||||
0.03%, 11/03/14 | 14,714 | 14,714 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 405,088 | 405,088 | ||||||
Total Short-Term Investments | ||||||||
(Cost $824,890) | 824,890 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $37,837,002 and the unrealized appreciation and depreciation were $3,152,282 and ($13,183), respectively, with a net unrealized appreciation of $3,139,099.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $40,151,211 | $— | $— | $40,151,211 | ||||||||||||
Short-Term Investments1 | — | 824,890 | — | 824,890 | ||||||||||||
Total | $40,151,211 | $824,890 | $— | $40,976,101 | ||||||||||||
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, 2014.
See financial notes 73
Table of Contents
Schwab Target 2045 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $33,626,369) | $36,471,745 | |||||
Investments in unaffiliated issuers, at value (cost $4,176,181) | + | 4,504,356 | ||||
Total investments, at value (cost $37,802,550) | 40,976,101 | |||||
Receivables: | ||||||
Investments sold | 158,000 | |||||
Fund shares sold | 55,874 | |||||
Dividends | 2,689 | |||||
Due from investment adviser | 911 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 188 | ||||
Total assets | 41,193,764 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 98,697 | |||||
Fund shares redeemed | 67,521 | |||||
Accrued expenses | + | 26,065 | ||||
Total liabilities | 192,283 | |||||
Net Assets | ||||||
Total assets | 41,193,764 | |||||
Total liabilities | − | 192,283 | ||||
Net assets | $41,001,481 | |||||
Net Assets by Source | ||||||
Capital received from investors | 37,174,502 | |||||
Net investment income not yet distributed | 119,149 | |||||
Net realized capital gains | 534,279 | |||||
Net unrealized capital appreciation | 3,173,551 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$41,001,481 | 3,236,197 | $12.67 |
74 See financial notes
Table of Contents
Schwab Target 2045 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $220,027 | |||||
Dividends received from unaffiliated underlying funds | 80,220 | |||||
Interest | + | 170 | ||||
Total investment income | 300,417 | |||||
Expenses | ||||||
Professional fees | 31,530 | |||||
Registration fees | 22,274 | |||||
Transfer agent fees | 21,457 | |||||
Custodian fees | 7,956 | |||||
Portfolio accounting fees | 7,435 | |||||
Independent trustees’ fees | 6,216 | |||||
Shareholder reports | (6,240 | )1 | ||||
Other expenses | + | 1,139 | ||||
Total expenses | 91,767 | |||||
Expense reduction by CSIM | − | 91,767 | ||||
Net expenses | − | — | ||||
Net investment income | 300,417 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 589,442 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 63,234 | |||||
Net realized gains on sales of affiliated underlying funds | 47,121 | |||||
Net realized losses on sales of unaffiliated underlying funds | + | (28,879 | ) | |||
Net realized gains | 670,918 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 1,661,233 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 97,363 | ||||
Net change in unrealized appreciation (depreciation) | + | 1,758,596 | ||||
Net realized and unrealized gains | 2,429,514 | |||||
Increase in net assets resulting from operations | $2,729,931 |
1 | The fund commenced operations on 01-23-13 and expenses were estimated based on similar funds for the fiscal year. During fiscal year 2013, actual printing expenses were less than the estimated expenses, which resulted in the fund reversing prior-year recognized expenses in the current year. The Fund is waiving any fees beyond the expense limitation and therefore the reversal had no impact to net expenses. |
See financial notes 75
Table of Contents
Schwab Target 2045 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||
Net investment income | $300,417 | $32,174 | ||||||||
Net realized gains (losses) | 670,918 | (37,723 | ) | |||||||
Net change in unrealized appreciation (depreciation) | + | 1,758,596 | 1,414,955 | |||||||
Increase in net assets from operations | 2,729,931 | 1,409,406 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($312,358 | ) | $— |
Transactions in Fund Shares
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,059,069 | $25,057,061 | 1,673,485 | $17,999,978 | ||||||||||||||
Shares reinvested | 25,653 | 306,297 | — | — | ||||||||||||||
Shares redeemed | + | (359,691 | ) | (4,402,377 | ) | (162,319 | ) | (1,786,457 | ) | |||||||||
Net transactions in fund shares | 1,725,031 | $20,960,981 | 1,511,166 | $16,213,521 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 1,511,166 | $17,622,927 | — | $— | ||||||||||||||
Total increase | + | 1,725,031 | 23,378,554 | 1,511,166 | 17,622,927 | |||||||||||||
End of period | 3,236,197 | $41,001,481 | 1,511,166 | $17,622,927 | ||||||||||||||
Net investment income not yet distributed | $119,149 | $32,174 |
* | Commencement of operations. |
76 See financial notes
Table of Contents
Schwab Target 2050 Fund
Financial Statements
Financial Highlights
11/1/13– | 1/23/131– | |||||||||
10/31/14 | 10/31/13 | |||||||||
Per-Share Data ($) | ||||||||||
Net asset value at beginning of period | 11.72 | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment income (loss) | 0.17 | 0.02 | ||||||||
Net realized and unrealized gains (losses) | 1.04 | 1.70 | ||||||||
Total from investment operations | 1.21 | 1.72 | ||||||||
Less distributions: | ||||||||||
Distributions from net investment income | (0.18 | ) | — | |||||||
Net asset value at end of period | 12.75 | 11.72 | ||||||||
Total return (%) | 10.43 | 17.20 | 2 | |||||||
Ratios/Supplemental Data (%) | ||||||||||
Ratios to average net assets: | ||||||||||
Net operating expenses3 | — | 0.00 | 4,5 | |||||||
Gross operating expenses3 | 0.39 | 1.37 | 4 | |||||||
Net investment income (loss) | 0.99 | 0.40 | 4 | |||||||
Portfolio turnover rate | 23 | 40 | 2 | |||||||
Net assets, end of period ($ x 1,000,000) | 33 | 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, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .8% | Other Investment Companies | 30,149,539 | 32,752,750 | ||||||||
2 | .1% | Short-Term Investments | 690,271 | 690,271 | ||||||||
99 | .9% | Total Investments | 30,839,810 | 33,443,021 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 49,056 | |||||||||
100 | .0% | Net Assets | 33,492,077 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 97.8% of net assets | ||||||||
Equity Funds 93.8% | ||||||||
Global Real Estate 4.7% | ||||||||
Schwab Global Real Estate Fund (a) | 221,492 | 1,590,312 | ||||||
International 21.8% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 159,800 | 3,669,016 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 129,830 | 1,185,348 | ||||||
Schwab International Core Equity Fund (a) | 250,692 | 2,449,257 | ||||||
7,303,621 | ||||||||
Large-Cap 54.2% | ||||||||
Dodge & Cox Stock Fund | 1,375 | 246,967 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 227,146 | 4,506,575 | ||||||
Schwab Core Equity Fund (a) | 188,842 | 4,811,704 | ||||||
Schwab Dividend Equity Fund (a) | 120,704 | 2,313,899 | ||||||
Schwab S&P 500 Index Fund (a) | 129,342 | 4,137,652 | ||||||
TCW Relative Value Large Cap Fund | 96,078 | 2,122,357 | ||||||
�� | 18,139,154 | |||||||
Small-Cap 13.1% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 83,183 | 1,524,745 | ||||||
Schwab Small-Cap Equity Fund (a) | 114,073 | 2,864,368 | ||||||
4,389,113 | ||||||||
31,422,200 | ||||||||
Fixed-Income Funds 4.0% | ||||||||
Inflation-Protected Bond 0.1% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 2,539 | 28,359 | ||||||
Intermediate-Term Bond 3.3% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 33,792 | 410,568 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 9,960 | 102,095 | ||||||
Schwab Total Bond Market Fund (a) | 61,139 | 583,263 | ||||||
1,095,926 | ||||||||
International Bond 0.1% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 2,945 | 31,069 | ||||||
Short-Term Bond 0.5% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 18,859 | 175,196 | ||||||
1,330,550 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $30,149,539) | 32,752,750 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.1% of net assets | ||||||||
Time Deposits 2.1% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 329,563 | 329,563 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 329,563 | 329,563 | ||||||
Sumitomo Mitsui Banking Corp. | ||||||||
0.03%, 11/03/14 | 31,145 | 31,145 | ||||||
Total Short-Term Investments | ||||||||
(Cost $690,271) | 690,271 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $30,878,576 and the unrealized appreciation and depreciation were $2,571,545 and ($7,100), respectively, with a net unrealized appreciation of $2,564,445.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $32,752,750 | $— | $— | $32,752,750 | ||||||||||||
Short-Term Investments1 | — | 690,271 | — | 690,271 | ||||||||||||
Total | $32,752,750 | $690,271 | $— | $33,443,021 | ||||||||||||
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, 2014.
See financial notes 79
Table of Contents
Schwab Target 2050 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $27,640,875) | $29,972,858 | |||||
Investments in unaffiliated issuers, at value (cost $3,198,935) | + | 3,470,163 | ||||
Total investments, at value (cost $30,839,810) | 33,443,021 | |||||
Receivables: | ||||||
Investments sold | 70,000 | |||||
Fund shares sold | 124,531 | |||||
Dividends | 1,356 | |||||
Due from investment adviser | 757 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 124 | ||||
Total assets | 33,639,790 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 111,360 | |||||
Fund shares redeemed | 11,996 | |||||
Accrued expenses | + | 24,357 | ||||
Total liabilities | 147,713 | |||||
Net Assets | ||||||
Total assets | 33,639,790 | |||||
Total liabilities | − | 147,713 | ||||
Net assets | $33,492,077 | |||||
Net Assets by Source | ||||||
Capital received from investors | 30,392,697 | |||||
Net investment income not yet distributed | 83,422 | |||||
Net realized capital gains | 412,747 | |||||
Net unrealized capital appreciation | 2,603,211 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$33,492,077 | 2,625,927 | $12.75 |
80 See financial notes
Table of Contents
Schwab Target 2050 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $174,027 | |||||
Dividends received from unaffiliated underlying funds | 54,235 | |||||
Interest | + | 133 | ||||
Total investment income | 228,395 | |||||
Expenses | ||||||
Professional fees | 31,472 | |||||
Transfer agent fees | 21,569 | |||||
Registration fees | 20,014 | |||||
Custodian fees | 7,885 | |||||
Portfolio accounting fees | 7,258 | |||||
Independent trustees’ fees | 6,189 | |||||
Shareholder reports | (5,989 | )1 | ||||
Other expenses | + | 1,060 | ||||
Total expenses | 89,458 | |||||
Expense reduction by CSIM | − | 89,458 | ||||
Net expenses | − | — | ||||
Net investment income | 228,395 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 476,027 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 47,429 | |||||
Net realized gains on sales of affiliated underlying funds | 26,501 | |||||
Net realized losses on sales of unaffiliated underlying funds | + | (24,168 | ) | |||
Net realized gains | 525,789 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 1,374,400 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 80,204 | ||||
Net change in unrealized appreciation (depreciation) | + | 1,454,604 | ||||
Net realized and unrealized gains | 1,980,393 | |||||
Increase in net assets resulting from operations | $2,208,788 |
1 | The fund commenced operations on 01-23-13 and expenses were estimated based on similar funds for the fiscal year. During fiscal year 2013, actual printing expenses were less than the estimated expenses, which resulted in the fund reversing prior-year recognized expenses in the current year. The Fund is waiving any fees beyond the expense limitation and therefore the reversal had no impact to net expenses. |
See financial notes 81
Table of Contents
Schwab Target 2050 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||
Net investment income | $228,395 | $21,616 | ||||||||
Net realized gains (losses) | 525,789 | (33,459 | ) | |||||||
Net change in unrealized appreciation (depreciation) | + | 1,454,604 | 1,148,607 | |||||||
Increase in net assets from operations | 2,208,788 | 1,136,764 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($246,172 | ) | $— |
Transactions in Fund Shares
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,761,233 | $21,571,597 | 1,302,184 | $14,062,670 | ||||||||||||||
Shares reinvested | 20,179 | 242,557 | — | — | ||||||||||||||
Shares redeemed | + | (348,673 | ) | (4,264,424 | ) | (108,996 | ) | (1,219,703 | ) | |||||||||
Net transactions in fund shares | 1,432,739 | $17,549,730 | 1,193,188 | $12,842,967 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 1,193,188 | $13,979,731 | — | $— | ||||||||||||||
Total increase | + | 1,432,739 | 19,512,346 | 1,193,188 | 13,979,731 | |||||||||||||
End of period | 2,625,927 | $33,492,077 | 1,193,188 | $13,979,731 | ||||||||||||||
Net investment income not yet distributed | $83,422 | $21,616 |
* | Commencement of operations. |
82 See financial notes
Table of Contents
Schwab Target 2055 Fund
Financial Statements
Financial Highlights
11/1/13– | 1/23/131– | |||||||||
10/31/14 | 10/31/13 | |||||||||
Per-Share Data ($) | ||||||||||
Net asset value at beginning of period | 11.74 | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment income (loss) | 0.16 | 0.02 | ||||||||
Net realized and unrealized gains (losses) | 1.07 | 1.72 | ||||||||
Total from investment operations | 1.23 | 1.74 | ||||||||
Less distributions: | ||||||||||
Distributions from net investment income | (0.18 | ) | — | |||||||
Net asset value at end of period | 12.79 | 11.74 | ||||||||
Total return (%) | 10.59 | 17.40 | 2 | |||||||
Ratios/Supplemental Data (%) | ||||||||||
Ratios to average net assets: | ||||||||||
Net operating expenses3 | — | 0.00 | 4,5 | |||||||
Gross operating expenses3 | 0.68 | 2.78 | 4 | |||||||
Net investment income (loss) | 0.94 | 0.34 | 4 | |||||||
Portfolio turnover rate | 29 | 12 | 2 | |||||||
Net assets, end of period ($ x 1,000,000) | 18 | 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, 2014
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 | 16,132,776 | 17,539,221 | ||||||||
2 | .0% | Short-Term Investments | 370,132 | 370,132 | ||||||||
99 | .9% | Total Investments | 16,502,908 | 17,909,353 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 10,566 | |||||||||
100 | .0% | Net Assets | 17,919,919 |
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) | 120,724 | 866,798 | ||||||
International 22.5% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 87,694 | 2,013,443 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 73,790 | 673,706 | ||||||
Schwab International Core Equity Fund (a) | 136,701 | 1,335,568 | ||||||
4,022,717 | ||||||||
Large-Cap 55.0% | ||||||||
Dodge & Cox Stock Fund | 758 | 136,079 | ||||||
Laudus U.S. Large Cap Growth Fund *(a) | 123,392 | 2,448,099 | ||||||
Schwab Core Equity Fund (a) | 102,588 | 2,613,945 | ||||||
Schwab Dividend Equity Fund (a) | 65,612 | 1,257,781 | ||||||
Schwab S&P 500 Index Fund (a) | 70,350 | 2,250,491 | ||||||
TCW Relative Value Large Cap Fund | 52,151 | 1,152,025 | ||||||
9,858,420 | ||||||||
Small-Cap 13.6% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 46,684 | 855,724 | ||||||
Schwab Small-Cap Equity Fund (a) | 62,882 | 1,578,961 | ||||||
2,434,685 | ||||||||
17,182,620 | ||||||||
Fixed-Income Funds 2.0% | ||||||||
Inflation-Protected Bond 0.1% | ||||||||
Schwab Treasury Inflation Protected Securities Index Fund (a) | 677 | 7,562 | ||||||
Intermediate-Term Bond 1.7% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 10,351 | 125,762 | ||||||
Schwab Intermediate-Term Bond Fund (a) | 792 | 8,119 | ||||||
Schwab Total Bond Market Fund (a) | 17,508 | 167,028 | ||||||
300,909 | ||||||||
International Bond 0.0% | ||||||||
Laudus Mondrian International Government Fixed Income Fund *(a) | 454 | 4,786 | ||||||
Short-Term Bond 0.2% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 4,666 | 43,344 | ||||||
356,601 | ||||||||
Total Other Investment Companies | ||||||||
(Cost $16,132,776) | 17,539,221 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.0% of net assets | ||||||||
Time Deposits 2.0% | ||||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 176,429 | 176,429 | ||||||
Brown Brothers Harriman | ||||||||
0.03%, 11/03/14 | 17,274 | 17,274 | ||||||
Wells Fargo | ||||||||
0.03%, 11/03/14 | 176,429 | 176,429 | ||||||
Total Short-Term Investments | ||||||||
(Cost $370,132) | 370,132 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $16,542,323 and the unrealized appreciation and depreciation were $1,374,292 and ($7,262), respectively, with a net unrealized appreciation of $1,367,030.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $17,539,221 | $— | $— | $17,539,221 | ||||||||||||
Short-Term Investments1 | — | 370,132 | — | 370,132 | ||||||||||||
Total | $17,539,221 | $370,132 | $— | $17,909,353 | ||||||||||||
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, 2014.
See financial notes 85
Table of Contents
Schwab Target 2055 Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $14,868,495) | $16,125,355 | |||||
Investments in unaffiliated issuers, at value (cost $1,634,413) | + | 1,783,998 | ||||
Total investments, at value (cost $16,502,908) | 17,909,353 | |||||
Receivables: | ||||||
Investments sold | 30,000 | |||||
Fund shares sold | 57,669 | |||||
Due from investment adviser | 700 | |||||
Dividends | 360 | |||||
Prepaid expenses | + | 15 | ||||
Total assets | 17,998,097 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 48,361 | |||||
Fund shares redeemed | 5,114 | |||||
Accrued expenses | + | 24,703 | ||||
Total liabilities | 78,178 | |||||
Net Assets | ||||||
Total assets | 17,998,097 | |||||
Total liabilities | − | 78,178 | ||||
Net assets | $17,919,919 | |||||
Net Assets by Source | ||||||
Capital received from investors | 16,265,809 | |||||
Net investment income not yet distributed | 39,478 | |||||
Net realized capital gains | 208,187 | |||||
Net unrealized capital appreciation | 1,406,445 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$17,919,919 | 1,401,005 | $12.79 |
86 See financial notes
Table of Contents
Schwab Target 2055 Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $93,199 | |||||
Dividends received from unaffiliated underlying funds | 25,928 | |||||
Interest | + | 73 | ||||
Total investment income | 119,200 | |||||
Expenses | ||||||
Professional fees | 31,382 | |||||
Transfer agent fees | 21,458 | |||||
Registration fees | 17,980 | |||||
Custodian fees | 7,894 | |||||
Portfolio accounting fees | 7,088 | |||||
Independent trustees’ fees | 6,144 | |||||
Shareholder reports | (6,728 | )1 | ||||
Other expenses | + | 924 | ||||
Total expenses | 86,142 | |||||
Expense reduction by CSIM | − | 86,142 | ||||
Net expenses | − | — | ||||
Net investment income | 119,200 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 255,729 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 24,524 | |||||
Net realized losses on sales of affiliated underlying funds | (4,401 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (20,321 | ) | |||
Net realized gains | 255,531 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | 776,800 | |||||
Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 50,547 | ||||
Net change in unrealized appreciation (depreciation) | + | 827,347 | ||||
Net realized and unrealized gains | 1,082,878 | |||||
Increase in net assets resulting from operations | $1,202,078 |
1 | The fund commenced operations on 01-23-13 and expenses were estimated based on similar funds for the fiscal year. During fiscal year 2013, actual printing expenses were less than the estimated expenses, which resulted in the fund reversing prior-year recognized expenses in the current year. The Fund is waiving any fees beyond the expense limitation and therefore the reversal had no impact to net expenses. |
See financial notes 87
Table of Contents
Schwab Target 2055 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||
Net investment income | $119,200 | $8,773 | ||||||||
Net realized gains (losses) | 255,531 | (4,654 | ) | |||||||
Net change in unrealized appreciation (depreciation) | + | 827,347 | 579,098 | |||||||
Increase in net assets from operations | 1,202,078 | 583,217 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($131,185 | ) | $— |
Transactions in Fund Shares
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,167,531 | $14,320,677 | 636,663 | $6,847,743 | ||||||||||||||
Shares reinvested | 10,605 | 127,787 | — | — | ||||||||||||||
Shares redeemed | + | (363,239 | ) | (4,481,218 | ) | (50,555 | ) | (549,180 | ) | |||||||||
Net transactions in fund shares | 814,897 | $9,967,246 | 586,108 | $6,298,563 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 1/23/13*-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 586,108 | $6,881,780 | — | $— | ||||||||||||||
Total increase | + | 814,897 | 11,038,139 | 586,108 | 6,881,780 | |||||||||||||
End of period | 1,401,005 | $17,919,919 | 586,108 | $6,881,780 | ||||||||||||||
Net investment income not yet distributed | $39,478 | $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 International MarketMasters Fund | |||
Schwab Target 2010 Fund | Schwab Balanced Fund | |||
Schwab Target 2015 Fund | Schwab Core Equity Fund | |||
Schwab Target 2020 Fund | Schwab Dividend Equity Fund | |||
Schwab Target 2025 Fund | Schwab Large-Cap Growth Fund | |||
Schwab Target 2030 Fund | Schwab Small-Cap Equity Fund | |||
Schwab Target 2035 Fund | Schwab Hedged Equity Fund | |||
Schwab Target 2040 Fund | Schwab Financial Services Fund | |||
Schwab Target 2045 Fund | Schwab Health Care Fund | |||
Schwab Target 2050 Fund | Schwab International Core Equity Fund | |||
Schwab Target 2055 Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab S&P 500 Index Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab Small-Cap Index Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Total Stock Market Index Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab International Index Fund | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Fundamental Global Real Estate 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 | |||
Laudus Small-Cap MarketMasters Fund | ||||
The Schwab Target Funds are “fund of funds.” Each of the funds seeks to achieve its investment objective by investing in a combination of other Schwab and/or Laudus Funds and other unaffiliated, third-party mutual funds, in accordance with its target portfolio allocation. Each fund may also invest directly in equity and fixed income securities, exchange traded funds (“ETFs”), and cash equivalents, including money market securities.
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 funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
The financial statements of the fund should be read in conjunction with the underlying funds’ financial statements. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed and available on the U.S. Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov or at the SEC’s Public Reference Room in Washington D.C.
(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.
89
Table of Contents
Schwab Target Funds
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 may be 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, without consideration to the classification level of the specific investments held by the underlying fund. | |
• | 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 |
90
Table of Contents
Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 2014 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. Each fund bears its share of the allocable expenses of the underlying funds in which they invest.
(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.
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. The funds are subject to the performance and expenses of the underlying funds in which they invest. 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 -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. | |
• | ETF 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); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of the |
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underlying fund’s investments, and could impair the underlying fund’s ability to meet its investment objective or invest in accordance with its investment strategy. To the extent an underlying fund’s investment in a single country or a limited number of countries represents a large percentage of the underlying fund’s assets, the underlying fund’s performance may be adversely affected by the economic, political and social conditions in those countries and it may be subject to increased price volatility. |
• | 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. An underlying fund’s use of derivatives could reduce the underlying fund’s performance, increase volatility 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, and cash equivalents, including money market securities. 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 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, 2014, 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% | 1.0% | 5.7% | 4.6% | 10.9% | 4.6% | 13.3% | 0.7% | 0.6% | 0.3% | ||||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 0.1% | 0.2% | 1.5% | 1.2% | 2.9% | 1.2% | 3.6% | 0.2% | 0.2% | 0.1% | ||||||||||||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | —% | 0.2% | 2.4% | 2.8% | 8.4% | 4.3% | 14.1% | 0.8% | 0.7% | 0.4% | ||||||||||||||||||||||||||||||
Schwab International Core Equity Fund | 0.4% | 0.9% | 5.2% | 4.3% | 10.1% | 4.3% | 12.5% | 0.7% | 0.6% | 0.3% | ||||||||||||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 0.2% | 0.4% | 2.0% | 1.6% | 3.7% | 1.5% | 4.5% | 0.2% | 0.2% | 0.1% | ||||||||||||||||||||||||||||||
Schwab Core Equity Fund | 0.2% | 0.4% | 2.1% | 1.6% | 3.8% | 1.6% | 4.5% | 0.2% | 0.2% | 0.1% | ||||||||||||||||||||||||||||||
Schwab Dividend Equity Fund | 0.1% | 0.2% | 1.2% | 0.9% | 2.1% | 0.9% | 2.5% | 0.1% | 0.1% | 0.1% | ||||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 0.0% | * | 0.0% | * | 0.2% | 0.2% | 0.4% | 0.2% | 0.4% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 0.4% | 0.8% | 5.5% | 4.8% | 12.1% | 5.4% | 16.4% | 0.9% | 0.8% | 0.4% | ||||||||||||||||||||||||||||||
Schwab Small-Cap Equity Fund | 0.2% | 0.4% | 3.0% | 2.6% | 6.6% | 3.0% | 9.0% | 0.5% | 0.4% | 0.2% | ||||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 1.2% | 1.9% | 5.9% | 2.7% | 3.9% | 1.1% | 1.5% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 0.5% | 0.9% | 4.1% | 2.5% | 4.2% | 1.2% | 1.8% | 0.1% | 0.0% | * | 0.00% | * | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 1.4% | 2.3% | 7.6% | 3.8% | 6.2% | 1.6% | 2.7% | 0.1% | 0.0% | * | 0.00% | * | ||||||||||||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 0.1% | 0.3% | 2.1% | 1.4% | 2.3% | 0.5% | 0.5% | 0.0% | * | 0.0% | * | 0.0% | * | |||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 2.2% | 3.3% | 8.6% | 3.6% | 4.6% | 1.1% | 1.9% | 0.1% | 0.0% | * | 0.00% | * | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 0.0% | * | 0.0% | * | 0.0% | * | —% | —% | —% | —% | —% | —% | —% |
* | Less than 0.1% |
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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, 2014.
Schwab Target 2010 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 174,459 | 47,892 | (39,644 | ) | 182,707 | $1,311,835 | $16,903 | $58,801 | ||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 101,163 | 63,445 | (41,201 | ) | 123,407 | 2,833,426 | 413,317 | 35,332 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 32,094 | 12,849 | (44,943 | ) | — | — | 81,789 | 5,132 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 100,910 | 14,731 | (115,641 | ) | — | — | 280,006 | 22,906 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 184,539 | — | 184,539 | 1,802,945 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 208,254 | 53,952 | (49,404 | ) | 212,802 | 4,221,990 | 210,001 | 242,737 | ||||||||||||||||||||
Schwab Core Equity Fund | 136,377 | 56,021 | (20,398 | ) | 172,000 | 4,382,562 | 89,150 | 252,216 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 93,954 | 40,413 | (17,290 | ) | 117,077 | 2,244,368 | 20,974 | 145,777 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 109,807 | 38,622 | (24,105 | ) | 124,324 | 3,977,122 | 82,549 | 51,261 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 61,592 | 9,558 | (29,856 | ) | 41,294 | 756,926 | 256,392 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 93,116 | 18,947 | (55,386 | ) | 56,677 | 1,423,150 | 501,804 | 214,501 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 276,755 | 42,039 | (26,340 | ) | 292,454 | 3,266,714 | 9,743 | 69,666 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 160,330 | 49,014 | (18,271 | ) | 191,073 | 1,958,498 | 1,234 | 36,655 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 1,362,871 | 595,692 | (136,103 | ) | 1,822,460 | 17,386,270 | 7,495 | 305,609 | ||||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 42,522 | 2,786 | (13,109 | ) | 32,199 | 339,697 | 8,914 | 2,949 | ||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 1,006,011 | 137,413 | (103,744 | ) | 1,039,680 | 9,658,625 | 5,761 | 82,676 | ||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1,968,431 | 171 | — | 1,968,602 | 1,968,602 | — | 282 | |||||||||||||||||||||
Total | $57,532,730 | $1,986,032 | $1,526,500 | |||||||||||||||||||||||||
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Schwab Target 2015 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 317,511 | 101,950 | (65,795 | ) | 353,666 | $2,539,324 | $46,163 | $113,743 | ||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 180,373 | 128,661 | (67,046 | ) | 241,988 | 5,556,047 | 342,942 | 65,405 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 59,556 | 45,921 | (72,437 | ) | 33,040 | 301,660 | 60,296 | 9,315 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 202,787 | 44,249 | (247,036 | ) | — | — | 331,811 | 45,666 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 381,769 | (5,118 | ) | 376,651 | 3,679,882 | 1,126 | — | ||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 371,068 | 119,550 | (85,344 | ) | 405,274 | 8,040,643 | 126,580 | 452,641 | ||||||||||||||||||||
Schwab Core Equity Fund | 259,908 | 113,810 | (44,236 | ) | 329,482 | 8,395,201 | 95,717 | 485,675 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 172,443 | 86,550 | (37,928 | ) | 221,065 | 4,237,817 | 45,556 | 273,800 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 201,034 | 68,667 | (33,522 | ) | 236,179 | 7,555,373 | 66,877 | 98,491 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 114,378 | 33,211 | (61,424 | ) | 86,165 | 1,579,397 | 396,709 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 168,847 | 54,019 | (105,667 | ) | 117,199 | 2,942,859 | 844,565 | 411,067 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 359,131 | 114,414 | (16,065 | ) | 457,480 | 5,110,054 | 4,093 | 104,325 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 271,173 | 114,315 | (44,663 | ) | 340,825 | 3,493,451 | (75 | ) | 64,530 | |||||||||||||||||||
Schwab Total Bond Market Fund | 1,708,846 | 1,421,777 | (164,170 | ) | 2,966,453 | 28,299,961 | 32,570 | 456,482 | ||||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 94,222 | 12,589 | (25,318 | ) | 81,493 | 859,751 | 654 | 6,436 | ||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 1,208,786 | 494,668 | (162,192 | ) | 1,541,262 | 14,318,323 | 6,712 | 118,968 | ||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1,991,651 | 700,233 | — | 2,691,884 | 2,691,884 | — | 350 | |||||||||||||||||||||
Total | $99,601,627 | $2,402,296 | $2,706,894 | |||||||||||||||||||||||||
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Schwab Target 2020 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 1,782,023 | 511,495 | (234,880 | ) | 2,058,638 | $14,781,018 | $133,509 | $644,112 | ||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 993,395 | 701,530 | (246,651 | ) | 1,448,274 | 33,252,373 | 774,757 | 360,259 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 325,308 | 208,157 | (117,601 | ) | 415,864 | 3,796,838 | 287,347 | 48,634 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 1,155,406 | 205,990 | (1,361,396 | ) | — | — | 2,873,950 | 263,813 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 2,266,999 | — | 2,266,999 | 22,148,582 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 2,044,008 | 470,355 | (207,311 | ) | 2,307,052 | 45,771,923 | 470,070 | 2,475,737 | ||||||||||||||||||||
Schwab Core Equity Fund | 1,492,538 | 471,724 | (78,069 | ) | 1,886,193 | 48,060,195 | 212,020 | 2,791,716 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 974,769 | 354,270 | (87,007 | ) | 1,242,032 | 23,809,746 | 131,729 | 1,507,413 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,127,432 | 325,437 | (124,901 | ) | 1,327,968 | 42,481,713 | 248,000 | 545,265 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 660,298 | 149,099 | (228,273 | ) | 581,124 | 10,652,001 | 1,461,480 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 933,256 | 261,032 | (408,766 | ) | 785,522 | 19,724,465 | 3,410,032 | 2,260,928 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 1,078,250 | 350,904 | (27,512 | ) | 1,401,642 | 15,656,343 | 9,420 | 315,017 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 1,114,851 | 398,092 | (37,291 | ) | 1,475,652 | 15,125,433 | 3,596 | 273,106 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 4,998,955 | 5,097,656 | (113,697 | ) | 9,982,914 | 95,237,005 | 16,785 | 1,355,961 | ||||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 495,913 | 97,534 | (90,824 | ) | 502,623 | 5,302,667 | 46,900 | 33,553 | ||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 3,177,642 | 1,141,352 | (296,347 | ) | 4,022,647 | 37,370,387 | 16,100 | 308,795 | ||||||||||||||||||||
Schwab Value Advantage Money fund, Institutional Prime Shares | — | 5,000,430 | — | 5,000,430 | 5,000,430 | — | 455 | |||||||||||||||||||||
Total | $438,171,119 | $10,095,695 | $13,184,764 | |||||||||||||||||||||||||
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Schwab Target 2025 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 1,264,302 | 549,831 | (159,860 | ) | 1,654,273 | $11,877,683 | $102,080 | $485,844 | ||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 686,104 | 637,275 | (146,101 | ) | 1,177,278 | 27,030,310 | 398,109 | 252,447 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 225,922 | 332,283 | (58,674 | ) | 499,531 | 4,560,718 | 92,476 | 33,604 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 837,115 | 226,704 | (1,063,819 | ) | — | — | 1,163,603 | 187,448 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 1,845,200 | — | 1,845,200 | 18,027,602 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 1,425,998 | 500,648 | (115,929 | ) | 1,810,717 | 35,924,629 | 270,138 | 1,735,389 | ||||||||||||||||||||
Schwab Core Equity Fund | 1,059,030 | 465,909 | (31,153 | ) | 1,493,786 | 38,061,671 | 73,014 | 2,004,700 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 684,124 | 337,491 | (54,325 | ) | 967,290 | 18,542,945 | 90,016 | 1,070,282 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 792,409 | 336,544 | (87,146 | ) | 1,041,807 | 33,327,394 | 304,438 | 387,252 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 467,612 | 169,769 | (125,225 | ) | 512,156 | 9,387,816 | 249,954 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 652,791 | 267,598 | (226,844 | ) | 693,545 | 17,414,916 | 417,644 | 1,594,910 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 448,259 | 229,628 | (21,653 | ) | 656,234 | 7,330,137 | 3,272 | 141,478 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 576,806 | 339,977 | (13,739 | ) | 903,044 | 9,256,199 | 2,336 | 152,701 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 2,015,888 | 3,043,346 | (31,905 | ) | 5,027,329 | 47,960,717 | 4,875 | 596,530 | ||||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 276,903 | 103,588 | (48,689 | ) | 331,802 | 3,500,512 | 4,463 | 18,994 | ||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 1,213,396 | 605,735 | (140,057 | ) | 1,679,074 | 15,598,594 | 11,086 | 124,586 | ||||||||||||||||||||
Total | $297,801,843 | $3,187,504 | $8,786,165 | |||||||||||||||||||||||||
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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 | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 3,468,314 | 802,866 | (381,115 | ) | 3,890,065 | $27,930,664 | $222,688 | $1,231,619 | ||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 1,890,535 | 1,224,804 | (312,136 | ) | 2,803,203 | 64,361,540 | 624,081 | 683,354 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 632,856 | 1,016,770 | (162,381 | ) | 1,487,245 | 13,578,546 | 207,685 | 90,009 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 2,297,220 | 296,759 | (2,593,979 | ) | — | — | 4,514,487 | 514,347 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 4,348,656 | — | 4,348,656 | 42,486,374 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 3,885,576 | 649,712 | (332,815 | ) | 4,202,473 | 83,377,069 | 641,732 | 4,708,123 | ||||||||||||||||||||
Schwab Core Equity Fund | 2,944,866 | 626,544 | (120,960 | ) | 3,450,450 | 87,917,473 | 300,904 | 5,516,901 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 1,864,777 | 480,445 | (109,647 | ) | 2,235,575 | 42,855,969 | 164,512 | 2,857,720 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 2,176,358 | 386,932 | (172,526 | ) | 2,390,764 | 76,480,525 | 497,581 | 1,047,667 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 1,289,028 | 214,661 | (224,254 | ) | 1,279,435 | 23,452,041 | 1,092,432 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 1,788,903 | 429,558 | (463,380 | ) | 1,755,081 | 44,070,075 | 2,280,925 | 4,335,132 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 826,600 | 225,171 | (112,716 | ) | 939,055 | 10,489,243 | 45,417 | 232,215 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 1,239,274 | 351,888 | (73,746 | ) | 1,517,416 | 15,553,516 | 5,740 | 284,405 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 3,194,473 | 5,033,897 | (124,358 | ) | 8,104,012 | 77,312,279 | 16,279 | 904,097 | ||||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 533,238 | 152,472 | (131,086 | ) | 554,624 | 5,851,280 | 57,029 | 37,544 | ||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 1,880,621 | 649,655 | (363,125 | ) | 2,167,151 | 20,132,831 | 19,168 | 175,678 | ||||||||||||||||||||
Total | $635,849,425 | $10,690,660 | $22,618,811 | |||||||||||||||||||||||||
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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 | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 1,245,858 | 534,318 | (138,671 | ) | 1,641,505 | $11,786,004 | $90,566 | $483,266 | ||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 674,742 | 619,854 | (108,511 | ) | 1,186,085 | 27,232,505 | 355,229 | 248,906 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 221,793 | 573,607 | (42,640 | ) | 752,760 | 6,872,696 | 41,643 | 32,491 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 832,611 | 223,678 | (1,056,289 | ) | — | — | 1,191,608 | 191,740 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 1,843,020 | — | 1,843,020 | 18,006,304 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 1,392,869 | 438,179 | (93,421 | ) | 1,737,627 | 34,474,527 | 205,070 | 1,716,807 | ||||||||||||||||||||
Schwab Core Equity Fund | 1,064,628 | 390,411 | (16,729 | ) | 1,438,310 | 36,648,142 | 56,911 | 2,030,161 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 666,950 | 281,238 | (21,546 | ) | 926,642 | 17,763,732 | 27,402 | 1,055,486 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 780,398 | 272,105 | (60,676 | ) | 991,827 | 31,728,541 | 210,279 | 387,327 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 466,053 | 148,642 | (45,956 | ) | 568,739 | 10,424,988 | 118,438 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 641,150 | 261,375 | (119,159 | ) | 783,366 | 19,670,319 | 331,056 | 1,581,723 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 151,982 | 103,251 | (3,153 | ) | 252,080 | 2,815,730 | (3,820 | ) | 53,683 | |||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 275,184 | 174,907 | (30,444 | ) | 419,647 | 4,301,384 | 4,125 | 72,185 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 542,624 | 1,608,066 | (2,685 | ) | 2,148,005 | 20,491,968 | (134 | ) | 192,548 | |||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 118,135 | 58,006 | (46,816 | ) | 129,325 | 1,364,375 | (545 | ) | 8,174 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund | 396,960 | 197,373 | (82,958 | ) | 511,375 | 4,750,676 | 6,169 | 40,225 | ||||||||||||||||||||
Total | $248,331,891 | $2,633,997 | $8,094,722 | |||||||||||||||||||||||||
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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 | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 4,140,897 | 1,117,090 | (478,735 | ) | 4,779,252 | $34,315,027 | $269,832 | $1,492,039 | ||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 2,235,553 | 1,542,262 | (323,661 | ) | 3,454,154 | 79,307,379 | 873,051 | 806,500 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 740,308 | 1,972,152 | (211,837 | ) | 2,500,623 | 22,830,691 | 200,467 | 104,500 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 2,773,538 | 448,076 | (3,221,614 | ) | — | — | 4,964,018 | 630,786 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 5,400,807 | — | 5,400,807 | 52,765,885 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 4,612,591 | 748,828 | (340,303 | ) | 5,021,116 | 99,618,945 | 478,648 | 5,558,336 | ||||||||||||||||||||
Schwab Core Equity Fund | 3,542,709 | 761,242 | (182,403 | ) | 4,121,548 | 105,017,049 | 435,886 | 6,629,430 | ||||||||||||||||||||
Schwab Dividend Equity Fund | 2,213,536 | 541,802 | (106,239 | ) | 2,649,099 | 50,783,233 | 146,421 | 3,382,862 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 2,596,342 | 386,789 | (147,073 | ) | 2,836,058 | 90,725,482 | 506,877 | 1,250,542 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 1,544,461 | 279,604 | (91,374 | ) | 1,732,691 | 31,760,221 | 137,303 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 2,131,039 | 541,466 | (296,681 | ) | 2,375,824 | 59,656,947 | 508,977 | 5,131,578 | ||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 267,654 | 108,201 | (9,017 | ) | 366,838 | 4,097,578 | 1,409 | 81,171 | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 522,433 | 169,901 | (20,649 | ) | 671,685 | 6,884,775 | 1,801 | 126,093 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 652,972 | 2,908,925 | (23,832 | ) | 3,538,065 | 33,753,137 | 5,375 | 251,817 | ||||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 181,646 | 62,886 | (129,213 | ) | 115,319 | 1,216,611 | 27,464 | 12,248 | ||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 896,155 | 275,314 | (254,166 | ) | 917,303 | 8,521,741 | 18,764 | 80,591 | ||||||||||||||||||||
Total | $681,254,701 | $8,576,293 | $25,538,493 | |||||||||||||||||||||||||
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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 | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 117,387 | 163,313 | (16,737 | ) | 263,963 | $1,895,258 | ($3,379 | ) | $63,393 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 63,242 | 136,872 | (9,027 | ) | 191,087 | 4,387,364 | (1,112 | ) | 25,023 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 20,761 | 130,152 | (3,452 | ) | 147,461 | 1,346,321 | (3,505 | ) | 3,174 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 78,856 | 75,507 | (154,363 | ) | — | — | 70,401 | 19,552 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 296,812 | — | 296,812 | 2,899,846 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 129,934 | 149,743 | (5,236 | ) | 274,441 | 5,444,909 | (2,624 | ) | 172,268 | |||||||||||||||||||
Schwab Core Equity Fund | 100,004 | 130,166 | (4,366 | ) | 225,804 | 5,753,493 | (2,222 | ) | 203,485 | |||||||||||||||||||
Schwab Dividend Equity Fund | 63,277 | 86,940 | (4,840 | ) | 145,377 | 2,786,866 | (1,780 | ) | 113,251 | |||||||||||||||||||
Schwab S&P 500 Index Fund | 74,563 | 88,726 | (7,467 | ) | 155,822 | 4,984,728 | (3,876 | ) | 39,042 | |||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 44,072 | 58,397 | (4,397 | ) | 98,072 | 1,797,665 | (1,400 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 60,262 | 79,812 | (6,608 | ) | 133,466 | 3,351,327 | (2,538 | ) | 158,982 | |||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 3,765 | 7,483 | (362 | ) | 10,886 | 121,599 | (358 | ) | 1,699 | |||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 9,364 | 15,223 | (4,702 | ) | 19,885 | 203,825 | (492 | ) | 2,981 | |||||||||||||||||||
Schwab Total Bond Market Fund | 2,403 | 115,391 | — | 117,794 | 1,123,753 | — | 4,090 | |||||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 1,352 | 3,863 | — | 5,215 | 55,014 | — | 100 | |||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 19,639 | 25,010 | (10,227 | ) | 34,422 | 319,777 | 6 | 2,429 | ||||||||||||||||||||
Total | $36,471,745 | $47,121 | $809,469 | |||||||||||||||||||||||||
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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 | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 96,224 | 143,874 | (18,606 | ) | 221,492 | $1,590,312 | ($4,876 | ) | $51,604 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 51,477 | 114,435 | (6,112 | ) | 159,800 | 3,669,016 | (1,650 | ) | 20,157 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 17,235 | 117,595 | (5,000 | ) | 129,830 | 1,185,348 | (6,292 | ) | 2,556 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 64,671 | 63,168 | (127,839 | ) | — | — | 56,262 | 15,553 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 250,692 | — | 250,692 | 2,449,257 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 106,570 | 126,503 | (5,927 | ) | 227,146 | 4,506,575 | (3,100 | ) | 138,421 | |||||||||||||||||||
Schwab Core Equity Fund | 82,365 | 111,621 | (5,144 | ) | 188,842 | 4,811,704 | (4,377 | ) | 165,147 | |||||||||||||||||||
Schwab Dividend Equity Fund | 51,796 | 72,838 | (3,930 | ) | 120,704 | 2,313,899 | (2,106 | ) | 91,304 | |||||||||||||||||||
Schwab S&P 500 Index Fund | 60,186 | 76,311 | (7,155 | ) | 129,342 | 4,137,652 | (3,659 | ) | 31,702 | |||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 36,055 | 51,626 | (4,498 | ) | 83,183 | 1,524,745 | (1,411 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 49,256 | 69,462 | (4,645 | ) | 114,073 | 2,864,368 | (1,713 | ) | 128,673 | |||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 355 | 2,458 | (274 | ) | 2,539 | 28,359 | (293 | ) | 394 | |||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 2,990 | 7,945 | (975 | ) | 9,960 | 102,095 | (73 | ) | 1,275 | |||||||||||||||||||
Schwab Total Bond Market Fund | 742 | 60,611 | (214 | ) | 61,139 | 583,263 | (32 | ) | 1,981 | |||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 355 | 2,865 | (275 | ) | 2,945 | 31,069 | (135 | ) | 35 | |||||||||||||||||||
Schwab Short-Term Bond Market Fund | 9,573 | 12,948 | (3,662 | ) | 18,859 | 175,196 | (44 | ) | 1,252 | |||||||||||||||||||
Total | $29,972,858 | $26,501 | $650,054 | |||||||||||||||||||||||||
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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 | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab Global Real Estate Fund | 47,974 | 89,004 | (16,254 | ) | 120,724 | $866,798 | ($6,010 | ) | $28,685 | |||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 25,906 | 67,747 | (5,959 | ) | 87,694 | 2,013,443 | (1,416 | ) | 10,796 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 8,518 | 70,546 | (5,274 | ) | 73,790 | 673,706 | (6,204 | ) | 1,372 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 32,509 | 42,515 | (75,024 | ) | — | — | 29,059 | 8,399 | ||||||||||||||||||||
Schwab International Core Equity Fund | — | 136,701 | — | 136,701 | 1,335,568 | — | — | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 53,170 | 82,224 | (12,002 | ) | 123,392 | 2,448,099 | (5,723 | ) | 74,113 | |||||||||||||||||||
Schwab Core Equity Fund | 41,246 | 68,817 | (7,475 | ) | 102,588 | 2,613,945 | (4,884 | ) | 88,837 | |||||||||||||||||||
Schwab Dividend Equity Fund | 26,067 | 44,881 | (5,336 | ) | 65,612 | 1,257,781 | (2,704 | ) | 49,343 | |||||||||||||||||||
Schwab S&P 500 Index Fund | 30,029 | 48,885 | (8,564 | ) | 70,350 | 2,250,491 | (1,380 | ) | 17,094 | |||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 17,954 | 34,297 | (5,567 | ) | 46,684 | 855,724 | (916 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 24,693 | 43,955 | (5,766 | ) | 62,882 | 1,578,961 | (4,216 | ) | 69,356 | |||||||||||||||||||
Schwab Treasury Inflation Protected Securities Index Fund | 141 | 536 | — | 677 | 7,562 | — | 84 | |||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 106 | 883 | (197 | ) | 792 | 8,119 | (4 | ) | 49 | |||||||||||||||||||
Schwab Total Bond Market Fund | 108 | 17,721 | (321 | ) | 17,508 | 167,028 | 0 | ** | 424 | |||||||||||||||||||
Laudus Mondrian International Government Fixed Income Fund (formerly, Laudus Mondrian International Fixed Income Fund) | 175 | 279 | — | 454 | 4,786 | — | 11 | |||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 2,583 | 4,345 | (2,262 | ) | 4,666 | 43,344 | (3 | ) | 365 | |||||||||||||||||||
Total | $16,125,355 | ($4,401 | ) | $348,928 | ||||||||||||||||||||||||
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. | |
** | Less than $1. |
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 on a fund’s Statement of Operations. For information regarding the trustees, please refer to the 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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Schwab Target Funds
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 an interest expense, which is disclosed on a fund’s 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, 2014, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab Target 2010 Fund | $18,309,633 | $17,620,301 | ||||||
Schwab Target 2015 Fund | 45,200,732 | 32,048,860 | ||||||
Schwab Target 2020 Fund | 185,847,452 | 117,377,712 | ||||||
Schwab Target 2025 Fund | 153,731,851 | 77,224,787 | ||||||
Schwab Target 2030 Fund | 245,343,555 | 173,651,810 | ||||||
Schwab Target 2035 Fund | 121,580,384 | 58,480,145 | ||||||
Schwab Target 2040 Fund | 251,055,852 | 161,987,631 | ||||||
Schwab Target 2045 Fund | 27,848,018 | 6,680,980 | ||||||
Schwab Target 2050 Fund | 22,770,229 | 5,171,586 | ||||||
Schwab Target 2055 Fund | 13,646,645 | 3,647,564 |
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 on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/13-10/31/14) | (11/1/12-10/31/13) | |||||||
Schwab Target 2010 Fund | $794 | $3,899 | ||||||
Schwab Target 2015 Fund | 15,988 | 3,207 | ||||||
Schwab Target 2020 Fund | 3,150 | 5,882 | ||||||
Schwab Target 2025 Fund | 6,611 | 32,594 | ||||||
Schwab Target 2030 Fund | 6,510 | 11,506 | ||||||
Schwab Target 2035 Fund | 8,744 | 3,480 | ||||||
Schwab Target 2040 Fund | 16,557 | 23,159 | ||||||
Schwab Target 2045 Fund | 2,375 | 467 | * | |||||
Schwab Target 2050 Fund | 3,231 | 470 | * | |||||
Schwab Target 2055 Fund | 646 | 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, 2014, 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 | $597,844 | $1,454,330 | $3,789,008 | $3,927,628 | $4,189,157 | $2,494,528 | $3,166,843 | |||||||||||||||||||||
Undistributed long-term capital gains | — | 4,403,976 | — | 9,173,392 | 9,240,681 | 9,123,841 | 16,935,932 | |||||||||||||||||||||
Unrealized appreciation on investments | 9,344,282 | 15,330,334 | 93,884,458 | 54,902,534 | 176,233,104 | 52,160,546 | 198,809,202 | |||||||||||||||||||||
Unrealized depreciation on investments | (5,055 | ) | (139,850 | ) | (275,652 | ) | (541,622 | ) | (1,098,579 | ) | (345,668 | ) | (611,996 | ) | ||||||||||||||
Net unrealized appreciation (depreciation) | $9,339,227 | $15,190,484 | $93,608,806 | $54,360,912 | $175,134,525 | $51,814,878 | $198,197,206 | |||||||||||||||||||||
�� | ||||||||||||||||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||||||
Undistributed ordinary income | $119,149 | $83,422 | $39,478 | |||||||||||||||||||||||||
Undistributed long-term capital gains | 568,731 | 451,513 | 247,602 | |||||||||||||||||||||||||
Unrealized appreciation on investments | 3,152,282 | 2,571,545 | 1,374,292 | |||||||||||||||||||||||||
Unrealized depreciation on investments | (13,183 | ) | (7,100 | ) | (7,262 | ) | ||||||||||||||||||||||
Net unrealized appreciation (depreciation) | $3,139,099 | $2,564,445 | $1,367,030 | |||||||||||||||||||||||||
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, 2014, 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, 2017 | $12,069,847 | $— | $7,947,695 | $— | $— | $— | $— | |||||||||||||||||||||
October 31, 2018 | — | — | 1,839,068 | — | — | — | — | |||||||||||||||||||||
Total | $12,069,847 | $— | $9,786,763 | $— | $— | $— | $— | |||||||||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Expiration Date | Fund | Fund | Fund | |||||||||||||||||||||||||
October 31, 2017 | $— | $— | $— | |||||||||||||||||||||||||
October 31, 2018 | — | — | — | |||||||||||||||||||||||||
Total | $— | $— | $— | |||||||||||||||||||||||||
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Schwab Target Funds
Financial Notes (continued)
9. Federal Income Taxes (continued):
For the year ended October 31, 2014, the funds had capital loss carryforwards 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 loss carryforwards utilized | $3,897,248 | $15,291 | $25,378,769 | $404,977 | $28,459,676 | $357,333 | $22,282,261 | |||||||||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||||||
Capital loss carryforwards utilized | $27,855 | $26,104 | $424 |
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 | $1,036,165 | $1,610,833 | $7,213,636 | $4,339,215 | $10,903,512 | $3,570,560 | $11,083,321 | |||||||||||||||||||||
Long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — | — | — | — | — | |||||||||||||||||||||
Prior 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 | — | — | — | — | — | — | — | |||||||||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||||||
Ordinary income | $312,358 | $246,172 | $131,185 | |||||||||||||||||||||||||
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.
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Schwab Target Funds
Financial Notes (continued)
9. Federal Income Taxes (continued):
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, 2014, 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 | 140,118 | 264,153 | 1,441,728 | 1,008,845 | 2,725,546 | 990,073 | 3,197,966 | |||||||||||||||||||||
Net realized capital gains (losses) | (140,118 | ) | (264,153 | ) | (1,441,728 | ) | (1,008,845 | ) | (2,725,546 | ) | (990,073 | ) | (3,197,966 | ) | ||||||||||||||
Schwab | Schwab | Schwab | ||||||||||||||||||||||||||
Target | Target | Target | ||||||||||||||||||||||||||
2045 | 2050 | 2055 | ||||||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||||||
Capital shares | $— | $— | $— | |||||||||||||||||||||||||
Undistributed net investment income | 98,916 | 79,583 | 42,690 | |||||||||||||||||||||||||
Net realized capital gains (losses) | (98,916 | ) | (79,583 | ) | (42,690 | ) |
As of October 31, 2014, 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, 2014, 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 of 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 funds constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2014, the results of each of their operations for the year then ended, 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, 2014 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 16, 2014
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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, 2014, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Target 2010 Fund | 15.11 | ||||
Schwab Target 2015 Fund | 20.13 | ||||
Schwab Target 2020 Fund | 21.77 | ||||
Schwab Target 2025 Fund | 20.20 | ||||
Schwab Target 2030 Fund | 28.00 | ||||
Schwab Target 2035 Fund | 25.21 | ||||
Schwab Target 2040 Fund | 33.21 | ||||
Schwab Target 2045 Fund | 28.37 | ||||
Schwab Target 2050 Fund | 29.79 | ||||
Schwab Target 2055 Fund | 31.84 |
For the fiscal year ended October 31, 2014, 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 2015 via IRS form 1099 of the amounts for use in preparing their 2014 income tax return.
Schwab Target 2010 Fund | $242,182 | |||
Schwab Target 2015 Fund | 382,467 | |||
Schwab Target 2020 Fund | 2,447,782 | |||
Schwab Target 2025 Fund | 1,368,980 | |||
Schwab Target 2030 Fund | 4,853,135 | |||
Schwab Target 2035 Fund | 1,427,878 | |||
Schwab Target 2040 Fund | 5,906,206 | |||
Schwab Target 2045 Fund | 144,174 | |||
Schwab Target 2050 Fund | 120,050 | |||
Schwab Target 2055 Fund | 68,444 |
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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 2045 Fund, Schwab 2050 Fund and Schwab 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 30, 2014, and June 3, 2014, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 3, 2014. 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
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considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. 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; 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 97 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) | |||
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) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 76 | Director, KLA-Tencor Corporation (2008 – present) | |||
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, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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) | |||
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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. | 97 | 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 Investment Management, 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; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). | |
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). | |
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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 | |
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 (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 25.9% S&P 500 Index, 3.4% Russell 2000 Index, 7.3% MSCI EAFE Index, 1.9% FTSE EPRA/NAREIT Global Index, 28.3% Barclays U.S. Aggregate Bond Index, 3.5% Barclays U.S. Aggregate Intermediate Bond Index, 1.9% Barclays U.S. Government/Credit Bond Index, 14.4% Barclays U.S. Government/Credit: 1 − 5 Yrs Index, 5.7% Barclays U.S. TIPS Index, 1.3% Citigroup Non-U.S. Dollar World Government Bond Index, and 6.5% 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 28.4% S&P 500 Index, 4.0% Russell 2000 Index, 8.6% MSCI EAFE Index, 0.1% MSCI Emerging Markets Index, 2.2% FTSE EPRA/NAREIT Global Index, 26.5% Barclays U.S. Aggregate Bond Index, 3.6% Barclays U.S. Aggregate Intermediate Bond Index, 2.1% Barclays U.S. Government/Credit Bond Index, 12.1% Barclays U.S. Government/Credit: 1 − 5 Yrs Index, 5.1% Barclays U.S. TIPS Index, 1.5% Citigroup Non-U.S. Dollar World Government Bond Index, and 5.8% 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 36.0% S&P 500 Index, 6.1% Russell 2000 Index, 11.3% MSCI EAFE Index, 0.6% MSCI Emerging Markets Index, 2.8% FTSE EPRA/NAREIT Global Index, 20.9% Barclays U.S. Aggregate Bond Index, 3.5% Barclays U.S. Aggregate Intermediate Bond Index, 2.5% Barclays U.S. Government/Credit Bond Index, 6.7% Barclays U.S. Government/Credit: 1 − 5 Yrs Index, 3.7% Barclays U.S. TIPS Index, 1.8% Citigroup Non-U.S. Dollar World Government Bond Index, and 4.1% 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 41.2% S&P 500 Index, 7.8% Russell 2000 Index, 13.4% MSCI EAFE Index, 1.1% MSCI Emerging Markets Index, 3.3% FTSE EPRA/NAREIT Global Index, 16.4% Barclays U.S. Aggregate Bond Index, 3.1% Barclays U.S. Aggregate Intermediate Bond Index, 2.4% Barclays U.S. Government/Credit Bond Index, 3.8% Barclays U.S. Government/Credit: 1 − 5 Yrs Index, 2.7% Barclays U.S. TIPS Index, 1.7% Citigroup Non-U.S. Dollar World Government Bond Index, and 3.2% 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 45.0% S&P 500 Index, 9.2% Russell 2000 Index, 15.0% MSCI EAFE Index, 1.6% MSCI Emerging Markets Index, 3.7% FTSE EPRA/NAREIT Global Index, 12.6% Barclays U.S. Aggregate Bond Index, 2.6% Barclays U.S. Aggregate Intermediate Bond Index, 2.1% Barclays U.S. Government/Credit Bond Index, 2.0% Barclays U.S. Government/Credit: 1 − 5 Yrs Index, 1.9% Barclays U.S. TIPS Index, 1.5% Citigroup Non-U.S. Dollar World Government Bond 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 48.3% S&P 500 Index, 10.6% Russell 2000 Index, 16.4% MSCI EAFE Index, 2.2% MSCI Emerging Markets Index, 4.1% FTSE EPRA/NAREIT Global Index, 9.1% Barclays U.S. Aggregate Bond Index, 2.0% Barclays U.S. Aggregate Intermediate Bond Index, 1.6% Barclays U.S. Government/Credit Bond Index, 0.9% Barclays U.S. Government/Credit: 1 − 5 Yrs Index, 1.3% Barclays U.S. TIPS Index, 1.2% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.3% 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 50.9% S&P 500 Index, 11.8% Russell 2000 Index, 17.5% MSCI EAFE Index, 2.7% MSCI Emerging Markets Index, 4.4% FTSE EPRA/NAREIT Global Index, 6.0% Barclays U.S. Aggregate Bond Index, 1.4% Barclays U.S. Aggregate Intermediate Bond Index, 1.2% Barclays U.S. Government/Credit Bond Index, 0.4% Barclays U.S. Government/Credit: 1 − 5 Yrs Index, 0.8% Barclays U.S. TIPS Index, 0.9% Citigroup Non-U.S. Dollar World Government Bond 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 52.2% S&P 500 Index, 12.5% Russell 2000 Index, 18.1% MSCI EAFE Index, 3.1% MSCI Emerging Markets Index, 4.5% FTSE EPRA/NAREIT Global Index, 4.3% Barclays U.S. Aggregate Bond Index, 1.0% Barclays U.S. Aggregate Intermediate Bond Index, 0.8% Barclays U.S. Government/Credit Bond Index, 0.1% Barclays U.S. Government/Credit: 1 − 5 Yrs Index, 0.6% Barclays U.S. TIPS Index, 0.6% Citigroup Non-U.S. Dollar World Government Bond 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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 53.3% S&P 500 Index, 13.1% Russell 2000 Index, 18.6% MSCI EAFE Index, 3.3% MSCI Emerging Markets Index, 4.6% FTSE EPRA/NAREIT Global Index, 2.9% Barclays U.S. Aggregate Bond Index, 0.7% Barclays U.S. Aggregate Intermediate Bond Index, 0.6% Barclays U.S. Government/Credit Bond Index, 0.4% 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.
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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. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index has been replaced by a combination of the S&P 500 Index and the Russell 2000 Index. The current composite is derived using the following portion allocations: 54.2% S&P 500 Index, 13.5% Russell 2000 Index, 19.0% MSCI EAFE Index, 3.6% MSCI Emerging Markets Index, 4.8% FTSE EPRA/NAREIT Global Index, 1.7% Barclays U.S. Aggregate Bond Index, 0.4% Barclays U.S. Aggregate Intermediate Bond Index, 0.4% Barclays U.S. Government/Credit Bond 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
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 go to www.schwab.com/privacy.
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
© 2014 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 the 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 Fundamental Global Real Estate 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.
© 2014 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
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Annual report dated October 31, 2014, enclosed.
Schwab Balanced Fundtm
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Schwab Balanced Fundtm
Annual Report
October 31, 2014
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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, 2014 | ||||
Schwab Balanced Fundtm (Ticker Symbol: SWOBX) | 10.52% | |||
Balanced Blended Index | 10.79% | |||
Fund Category: Morningstar Moderate Allocation | 8.27% | |||
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/0000950123-15-000008/f30296ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the fund covered in this report.
Dear Shareholder,
For 25 years, Charles Schwab Investment Management has been committed to building funds that are designed to serve as part of the foundation of an investor’s portfolio. Our Schwab Balanced Fund combines equity and fixed income strategies in U.S. markets, and is designed to provide diversified asset allocation and an opportunity for long-term growth.
For the 12-month reporting period ended October 31, 2014, the fund returned 10.5% compared with the 10.8% return of the Balanced Blended Index, the fund’s internally calculated composite index. These returns reflected a rally by U.S. stocks and modest returns for bonds. The Fed’s accommodative monetary policy combined with an improving U.S. economy and favorable earnings reports propped up the performance of U.S. large-cap stocks. As a result, the S&P 500 Index repeatedly reached record highs during the reporting period and returned 17.3%, as stocks overcame geopolitical tensions and increased market volatility. The market favored large company stocks, which outperformed smaller and mid-sized companies.
Low interest rates and generally healthier economic conditions led to modest overall performances by a resilient U.S. bond market. Bonds with lower credit ratings outperformed Treasuries as credit conditions remained favorable, while long-term bonds outperformed short-term bonds as long-term bond yields fell. Reflecting this environment, the Barclays U.S. Aggregate Bond Index returned 4.1%.
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2014
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 17.27% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 8.06% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −0.60% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 4.14% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.03% | Barclays U.S. Treasury Bills 1-3 Months Index: measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctcaptst06.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
For the 12-month reporting period ended October 31, 2014, the fund returned 10.5% compared with the 10.8% return of the Balanced Blended Index, the fund’s internally calculated composite index.
For more information about the Schwab Balanced Fund, please continue reading this report. In addition, you can find answers to frequently asked questions and more details about this fund by visiting www.schwabfunds.com, or by contacting us at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctschandom.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. |
Schwab Balanced Fund 5
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Schwab Balanced Fund™
The Schwab Balanced Fund (the fund) seeks capital growth and income. To pursue its goal, the fund generally invests in a diversified group of other Schwab and/or Laudus Funds, in accordance with its target portfolio allocation. Normally, the fund invests 55% to 65% of its assets in equity securities (including stocks and equity funds) and 35% to 45% in fixed income securities (including bonds and fixed income funds), 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, 2014, the fund returned 10.52%. The fund’s internally calculated comparative index—the Balanced Blended Index (the index)—returned 10.79%.
Market Highlights. U.S. stocks enjoyed strong gains during the 12-month report period, helped by rebounding economic growth and low interest rates. The S&P 500 Index returned 17.3%, with large-cap U.S. stocks solidly outperforming small-cap stocks. The resilient U.S. bond market generated modest returns even as the Federal Reserve shifted its interest rate policies, with the Barclays U.S. Aggregate Bond Index returning 4.1%.
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 reporting period. The greatest contribution came from the Schwab Core Equity Fund, which returned 17.9% and was the fund’s largest position. The Laudus U.S. Large Cap Growth Fund and the Laudus Small-Cap MarketMasters Fund, Select Shares, both contributed positively to total return, returning 16.2% and 4.4%, 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 slight underperformance compared with the index.
The fixed income allocation generated a positive return that contributed to the fund’s performance. The Schwab Total Bond Market Fund and the Schwab Intermediate-Term Bond Fund returned 4.1% and 2.5%, respectively. Both funds slightly detracted from the fund’s performance relative to the index.
As of 10/31/14:
Statistics
Number of Holdings | 6 | |||
Portfolio Turnover Rate | 27% |
Asset Class Weightings % of Investments
Equity Funds – Large-Cap | 51.1% | |||
Fixed-Income Funds – Intermediate-Term Bond | 36.0% | |||
Equity Funds – Small-Cap | 10.0% | |||
Money Market Funds | 2.9% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Core Equity Fund | 35.7% | |||
Schwab Total Bond Market Fund | 24.0% | |||
Laudus U.S. Large Cap Growth Fund | 15.3% | |||
Schwab Intermediate-Term Bond Fund | 12.0% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 10.0% | |||
Total | 97.0% |
Management views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many 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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsbf.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Balanced Fundtm (11/18/96) | 10.52 | % | 11.03 | % | 6.29 | % | |||||||||
Balanced Blended Index | 10.79 | % | 11.59 | % | 6.95 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.64 | % | |||||||||
Fund Category: Morningstar Moderate Allocation | 8.27 | % | 10.30 | % | 6.37 | % |
Fund Expense Ratios3: Net 0.63%; 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.
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 0.63%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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, 2014 and held through October 31, 2014.
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 5/1/14 | at 10/31/14 | 05/1/14–10/31/14 | |||||||||||||
Schwab Balanced Fundtm | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000.00 | $ | 1,060.70 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000.00 | $ | 1,025.20 | $ | 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
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 14.28 | 12.51 | 11.61 | 11.00 | 9.99 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss)1 | 0.16 | 0.14 | 0.19 | 0.17 | 0.17 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.33 | 1.85 | 0.88 | 0.63 | 1.03 | |||||||||||||||||
Total from investment operations | 1.49 | 1.99 | 1.07 | 0.80 | 1.20 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.21 | ) | (0.22 | ) | (0.17 | ) | (0.19 | ) | (0.19 | ) | ||||||||||||
Net asset value at end of period | 15.56 | 14.28 | 12.51 | 11.61 | 11.00 | |||||||||||||||||
Total return (%) | 10.52 | 16.13 | 9.36 | 7.28 | 12.08 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses2,3 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||
Gross operating expenses2 | 0.09 | 0.10 | 0.16 | 0.16 | 0.20 | |||||||||||||||||
Net investment income (loss) | 1.09 | 1.06 | 1.54 | 1.52 | 1.67 | |||||||||||||||||
Portfolio turnover rate | 27 | 33 | 38 | 53 | 8 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 202 | 165 | 117 | 109 | 88 |
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 and/or interest expense had not been incurred.
See financial notes 9
Table of Contents
Schwab Balanced Fund
Portfolio Holdings as of October 31, 2014
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 | 162,976,588 | 201,285,531 | ||||||||
99 | .9% | Total Investments | 162,976,588 | 201,285,531 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 278,016 | |||||||||
100 | .0% | Net Assets | 201,563,547 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.9% of net assets | ||||||||
Equity Funds 61.1% | ||||||||
Large-Cap 51.1% | ||||||||
Laudus U.S. Large Cap Growth Fund *(a) | 1,558,414 | 30,918,924 | ||||||
Schwab Core Equity Fund (a) | 2,825,465 | 71,992,844 | ||||||
102,911,768 | ||||||||
Small-Cap 10.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares *(a) | 1,100,759 | 20,176,921 | ||||||
123,088,689 | ||||||||
Fixed-Income Funds 35.9% | ||||||||
Intermediate-Term Bond 35.9% | ||||||||
Schwab Intermediate-Term Bond Fund (a) | 2,355,024 | 24,138,996 | ||||||
Schwab Total Bond Market Fund (a) | 5,061,757 | 48,289,160 | ||||||
72,428,156 | ||||||||
Money Market Fund 2.9% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (b) | 5,768,686 | 5,768,686 | ||||||
Total Other Investment Companies | ||||||||
(Cost $162,976,588) | 201,285,531 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $165,634,239 and the unrealized appreciation and depreciation were $35,712,756 and ($61,464), respectively, with a net unrealized appreciation of $35,651,292.
* | 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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $201,285,531 | $— | $— | $201,285,531 | ||||||||||||
Total | $201,285,531 | $— | $— | $201,285,531 | ||||||||||||
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, 2014.
10 See financial notes
Table of Contents
Schwab Balanced Fund
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $157,207,902) | $195,516,845 | |||||
Investments in unaffiliated issuers, at value (cost $5,768,686) | + | 5,768,686 | ||||
Total investments, at value (cost $162,976,588) | 201,285,531 | |||||
Receivables: | ||||||
Investments sold | 490,000 | |||||
Fund shares sold | 779,216 | |||||
Dividends | 131,206 | |||||
Due from investment adviser | 1,737 | |||||
Prepaid expenses | + | 3,459 | ||||
Total assets | 202,691,149 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 1,031,566 | |||||
Fund shares redeemed | 53,338 | |||||
Accrued expenses | + | 42,698 | ||||
Total liabilities | 1,127,602 | |||||
Net Assets | ||||||
Total assets | 202,691,149 | |||||
Total liabilities | − | 1,127,602 | ||||
Net assets | $201,563,547 | |||||
Net Assets by Source | ||||||
Capital received from investors | 158,974,411 | |||||
Net investment income not yet distributed | 1,157,827 | |||||
Net realized capital gains | 3,122,366 | |||||
Net unrealized capital appreciation | 38,308,943 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$201,563,547 | 12,956,445 | $15.56 |
See financial notes 11
Table of Contents
Schwab Balanced Fund
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $2,038,983 | |||||
Expenses | ||||||
Professional fees | 41,878 | |||||
Shareholder reports | 38,864 | |||||
Registration fees | 33,391 | |||||
Transfer agent fees | 27,786 | |||||
Portfolio accounting fees | 10,547 | |||||
Independent trustees’ fees | 6,981 | |||||
Custodian fees | 3,179 | |||||
Interest expense | 62 | |||||
Other expenses | + | 3,866 | ||||
Total expenses | 166,554 | |||||
Expense reduction by CSIM | − | 166,492 | ||||
Net expenses | − | 62 | ||||
Net investment income | 2,038,921 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 5,843,410 | |||||
Net realized gains on sales of affiliated underlying funds | 3,753,272 | |||||
Net realized gains on unaffiliated investments | + | 7,983 | ||||
Net realized gains | 9,604,665 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 7,261,754 | ||||
Net realized and unrealized gains | 16,866,419 | |||||
Increase in net assets resulting from operations | $18,905,340 |
12 See financial notes
Table of Contents
Schwab Balanced Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $2,038,921 | $1,542,751 | ||||||||
Net realized gains | 9,604,665 | 635,878 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 7,261,754 | 19,300,297 | |||||||
Increase in net assets from operations | 18,905,340 | 21,478,926 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($2,313,152 | ) | ($1,969,000 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 5,653,883 | $82,981,901 | 6,476,156 | $86,146,565 | ||||||||||||||
Shares reinvested | 147,616 | 2,143,378 | 148,002 | 1,838,191 | ||||||||||||||
Shares redeemed | + | (4,387,683 | ) | (64,959,175 | ) | (4,466,396 | ) | (60,102,818 | ) | |||||||||
Net transactions in fund shares | 1,413,816 | $20,166,104 | 2,157,762 | $27,881,938 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 11,542,629 | $164,805,255 | 9,384,867 | $117,413,391 | ||||||||||||||
Total increase | + | 1,413,816 | 36,758,292 | 2,157,762 | 47,391,864 | |||||||||||||
End of period | 12,956,445 | $201,563,547 | 11,542,629 | $164,805,255 | ||||||||||||||
Net investment income not yet distributed | $1,157,827 | $916,263 |
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 Target 2010 Fund | |||
Schwab Balanced 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 | |||
Laudus Small-Cap MarketMasters Fund | Schwab Fundamental US Large Company Index Fund | |||
Laudus International MarketMasters Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Dividend Equity Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab Small-Cap Equity Fund | Schwab Fundamental Global Real Estate 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 | |||
Schwab International Core Equity Fund | ||||
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 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 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 fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
The financial statements of the fund should be read in conjunction with the underlying funds’ financial statements. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed and available on the U.S. Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov or at the SEC’s Public Reference Room in Washington D.C.
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
14
Table of Contents
Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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. | |
• | 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 may be 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, without consideration to the classification level of the specific investments held by the underlying fund. | |
• | 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 |
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Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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, 2014 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 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. The fund bears its share of allocable expenses of the underlying funds in which it invests.
(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.
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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. The fund is subject to the performance and expenses of the underlying funds in which it invests. 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. 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 select or allocate assets that could cause the fund to underperform or otherwise not meet its objective. 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 performance also will lag those investments. | |
• | 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 performance also will lag those investments. | |
• | 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 longer an underlying fund’s duration, the more sensitive to interest rate movements its share price is likely to be. Because interest rates in the United States are at, or near, historically low levels, a change in a central bank’s monetary policy (e.g., tapering of the Federal Reserve Board’s quantitative easing program) or improving economic conditions may result in an |
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Schwab Balanced Fund
Financial Notes (continued)
3. Risk Factors (continued):
increase in interest rates. 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 an underlying 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. |
• | ETF 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. | |
• | 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. | |
• | 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 negatively impact the value or liquidity of the underlying fund’s investments, and could impair the underlying fund’s ability to meet its investment objective or invest in accordance with its investment strategy. To the extent an underlying fund’s investment in a single country or a limited number of countries represents a large percentage of the underlying fund’s assets, the underlying fund’s performance may be adversely affected by the economic, political and social conditions in those countries and it may be subject to increased price volatility. | |
• | 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. An underlying fund’s use of derivatives could reduce the underlying fund’s performance, increase volatility 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. |
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Schwab Balanced Fund
Financial Notes (continued)
3. Risk Factors (continued):
• | 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-Backed and Mortgage Pass-Through Securities Risk. Certain of the mortgage-backed securities in which an underlying fund may invest are not backed by the full faith and credit of the U.S. government and there can be no assurance that the U.S. government would provide financial support to its agencies or instrumentalities where it was not obligated to do so. Mortgage-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to similar risk of decline in market value during periods of rising interest rates. Because of prepayment and extension risk, mortgage-backed securities react differently to changes in interest rates than other bonds. Small movements in interest rates — both increases and decreases — may quickly and significantly affect the value of certain mortgage-backed securities. Transactions in mortgage pass-through securities primarily occur through to be announced (TBA) transactions. Default by or bankruptcy of a counterparty to a TBA transaction would expose an underlying fund to possible losses because of an adverse market action, expenses, or delays in connection with the purchase or sale of the pools of mortgage pass-through securities specified in the TBA transaction. | |
• | 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.
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 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, 2014, 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 | 3.1% | |||
Laudus Small-Cap MarketMasters Fund, Select Shares | 10.4% | |||
Schwab Intermediate-Term Bond Fund | 6.5% | |||
Schwab Total Bond Market Fund | 3.9% |
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Schwab Balanced Fund
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2014.
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Laudus U.S. Large Cap Growth Fund | 1,405,004 | 602,120 | (448,710 | ) | 1,558,414 | $30,918,924 | $746,598 | $1,709,774 | ||||||||||||||||||||
Schwab Core Equity Fund | 2,480,385 | 1,109,117 | (764,037 | ) | 2,825,465 | 71,992,844 | 1,540,803 | 4,679,307 | ||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 936,684 | 443,652 | (279,577 | ) | 1,100,759 | 20,176,921 | 1,302,254 | — | ||||||||||||||||||||
Schwab Intermediate-Term Bond Fund | 1,943,421 | 1,078,983 | (667,380 | ) | 2,355,024 | 24,138,996 | 29,697 | 450,840 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 4,226,692 | 2,013,690 | (1,178,625 | ) | 5,061,757 | 48,289,160 | 133,920 | 1,042,472 | ||||||||||||||||||||
Total | $195,516,845 | $3,753,272 | $7,882,393 | |||||||||||||||||||||||||
* | 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.
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 on the fund’s Statement of Operations. For information regarding the trustees, please refer to the 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 an interest expense, which is disclosed on the fund’s 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, 2014, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||
$73,987,196 | $49,248,000 |
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Schwab Balanced Fund
Financial Notes (continued)
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 on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||
(11/1/13-10/31/14) | (11/1/12-10/31/13) | |||||
$8,259 | $6,089 |
9. Federal Income Taxes:
As of October 31, 2014, the components of distributable earnings on a tax-basis were as follows:
Undistributed ordinary income | $1,157,827 | |||
Undistributed long-term capital gains | 5,780,017 | |||
Unrealized appreciation on investments | 35,712,756 | |||
Unrealized depreciation on investments | (61,464 | ) | ||
Net unrealized appreciation (depreciation) | $35,651,292 | |||
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, 2014, the fund had no capital loss carryforwards.
For the year ended October 31, 2014, the fund had capital loss carryforwards utilized as follows:
Capital loss carryforwards utilized | $3,288,811 |
The tax-basis components of distributions paid during the current and prior fiscal years were as follows:
Current period distributions | ||||
Ordinary income | $2,313,152 | |||
Long-term capital gains | — | |||
Return of capital | — | |||
Prior period distributions | ||||
Ordinary income | $1,969,000 | |||
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, 2014, the fund made the following reclassifications:
Capital shares | $— | |||
Undistributed net investment income | 515,795 | |||
Net realized capital gains (losses) | (515,795 | ) |
As of October 31, 2014, 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
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Schwab Balanced Fund
Financial Notes (continued)
9. Federal Income Taxes (continued):
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, 2014, 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 of 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 funds constituting Schwab Capital Trust, hereafter referred to as the “Fund”) at October 31, 2014, 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, 2014 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 16, 2014
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Other Federal Tax Information (unaudited)
For corporate shareholders, 24.31% of the fund’s dividend distributions paid during the fiscal year ended October 31, 2014, qualify for the corporate dividends received deduction.
For the fiscal year ended October 31, 2014, the fund designates $568,004 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 2015 via IRS form 1099 of the amounts for use in preparing their 2014 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 30, 2014, and June 3, 2014, and approved the renewal of the Agreement with respect to the Fund for an additional one year term at the meeting held on June 3, 2014. 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 its review of
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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 97 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) | |||
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) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 76 | Director, KLA-Tencor Corporation (2008 – present) | |||
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, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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) | |||
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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. | 97 | 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 Investment Management, 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; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). | |
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). | |
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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 | |
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 U.S. 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 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.
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 (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. 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.
• | 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 go to www.schwab.com/privacy.
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
© 2014 Schwab Funds. All rights reserved.
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Notes
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 the 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 Fundamental Global Real Estate 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.
MFR36122-08
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Annual report dated October 31, 2014, enclosed.
Schwab MarketTrack Portfolios®
Schwab MarketTrack
All Equity Portfoliotm
Schwab MarketTrack
Growth Portfoliotm
Schwab MarketTrack
Balanced Portfoliotm
Schwab MarketTrack
Conservative Portfoliotm
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This wrapper is not part of the shareholder report.
Table of Contents
Schwab MarketTrack Portfolios®
Annual Report
October 31, 2014
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, 2014 | ||||
Schwab MarketTrack All Equity Portfoliotm (Ticker Symbol: SWEGX) | 9.12% | |||
All Equity Composite Index | 9.53% | |||
Fund Category: Morningstar Large Blend | 14.33% | |||
Performance Details | pages 6-7 | |||
Schwab MarketTrack Growth Portfoliotm (Ticker Symbol: SWHGX) | 8.55% | |||
Growth Composite Index | 9.02% | |||
Fund Category: Morningstar Aggressive Allocation | 8.78% | |||
Performance Details | pages 8-9 | |||
Schwab MarketTrack Balanced Portfoliotm (Ticker Symbol: SWBGX) | 7.28% | |||
Balanced Composite Index | 7.78% | |||
Fund Category: Morningstar Moderate Allocation | 8.27% | |||
Performance Details | pages 10-11 | |||
Schwab MarketTrack Conservative Portfoliotm (Ticker Symbol: SWCGX) | 5.95% | |||
Conservative Composite Index | 6.52% | |||
Fund Category: Morningstar Conservative Allocation | 5.41% | |||
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,
For 25 years, Charles Schwab Investment Management has been committed to building funds that are designed to serve as the foundation of an investor’s portfolio. Our Schwab MarketTrack Portfolios combine a variety of passive strategies in U.S. and international markets, seeking to provide diversification, while targeting varying degrees of risk.
For the 12-month reporting period ended October 31, 2014, the portfolios generated positive returns that generally tracked their comparative indices. In the U.S., generally favorable corporate earnings reports and easy monetary policy continued to support U.S. stocks, helping them overcome geopolitical tensions and increased market volatility. Meanwhile, the resilient U.S. bond market provided modest overall returns, even as interest rates remained historically low. Reflecting this backdrop, the S&P 500 returned 17.3%, while the broad U.S. bond market returned 4.1%, as represented by the performance of the Barclays U.S. Aggregate Bond Index.
Economic growth generally stalled outside the U.S. This convinced the Bank of Japan and many other overseas central banks to maintain low interest rates, even as the Fed wrapped up its quantitative easing policies. In response to these policy differences, the yen and many other foreign currencies depreciated versus the U.S. dollar, reducing international stock returns in U.S. dollar terms. As a result, the MSCI EAFE Index, which broadly represents the performance of international stocks, returned -0.6%.1
Asset Class Performance Comparison % returns during the 12 months ended 10/31/2014
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 17.27% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 8.06% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −0.60% | MSCI EAFE® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 4.14% | Barclays U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.03% | Barclays U.S. Treasury Bills 1-3 Months Index: measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctcaptst04.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.
1 | The total return cited is for the MSCI EAFE Index (Net), which is calculated net of foreign withholding taxes. |
Schwab MarketTrack Portfolios 3
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From the President continued
For the 12-month reporting period ended October 31, 2014, the portfolios generated positive returns that generally tracked their comparative indices.
In related product matters, as described in the portfolios’ prospectus supplement dated September 25, 2014, we are making changes to the portfolios that are aimed at improving the portfolios’ overall diversification. Effective December 1, 2014, the portfolios will add international small-cap equity and emerging markets equity as dedicated asset classes as well as begin investing in the Schwab Fundamental Index Funds. For more information about these changes, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctschandom.gif)
4 Schwab MarketTrack Portfolios
Table of Contents
Portfolio Management
![]() | Zifan Tang, CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the funds. She was appointed portfolio manager of the funds in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
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. For the 12-month reporting period ended October 31, 2014, the portfolio remained close to the target allocations of 45% in U.S. large-cap, 30% in international, and 25% in U.S. small-cap stocks. 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. Please see the Supplement to the Prospectus dated September 25, 2014, for information regarding target allocation changes.
Performance. For the 12-month reporting period ended October 31, 2014, the portfolio returned 9.12%. The portfolio’s internally calculated comparative index, the All Equity Composite Index (the composite index), returned 9.53%.
Market Highlights. Large-cap U.S. stocks performed well for the 12-month reporting period, buoyed by low interest rates, rebounding economic growth, and generally favorable earnings report, while small-cap U.S. stocks underperformed by comparison. Outside of the U.S., economic growth generally faltered. This convinced many overseas central banks to maintain low interest rate policies, even as the Federal Reserve (the Fed) wrapped up its quantitative easing policies aimed at holding down long-term interest rates. As a result, many foreign currencies depreciated versus the U.S. dollar, reducing the returns of international investments in U.S. dollar terms, as was reflected by the -0.2% return of the MSCI EAFE Index. Among emerging markets, overall market volatility increased amid heightened geopolitical tensions in Russia and the Middle East, with the MSCI Emerging Markets Index returning approximately 0.6% for the reporting period.
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 17.2%. The Schwab Small-Cap Index Fund also contributed, returning 8.1%. On a relative basis, the Schwab S&P 500 Index Fund narrowly underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. In contrast, the Schwab Small-Cap Index Fund narrowly outperformed the Russell 2000 Index, 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 and enhanced performance relative to the composite index. The portfolio’s position in the Schwab International Index Fund returned 0.1%, outperforming the MSCI EAFE Index (Net), which is the composite index’s international equity allocation component.
As of 10/31/14:
Statistics
Number of Holdings | 4 | |||
Portfolio Turnover Rate | 9% |
Asset Class Weightings % of Investments
Equity Funds – Large-Cap | 44.8% | |||
Equity Funds – International | 29.8% | |||
Equity Funds – Small-Cap | 25.0% | |||
Short-Term Investments | 0.4% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab S&P 500 Index Fund | 44.8% | |||
Schwab International Index Fund | 29.8% | |||
Schwab Small-Cap Index Fund | 25.0% | |||
Total | 99.6% |
Management views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
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 Porfoliotm
Performance and Fund Facts as of 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsmaep.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack All Equity Porfoliotm (5/19/98) | 9.12 | % | 13.48 | % | 7.41 | % | |||||||||
All Equity Composite Index | 9.53 | % | 13.64 | % | 7.79 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Fund Category: Morningstar Large Blend | 14.33 | % | 15.03 | % | 7.58 | % |
Fund Expense Ratios3: Net 0.64%; Gross 0.66%
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
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 dated February 28, 2014. 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 the 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. Please see the portfolio’s prospectus supplement dated September 25, 2014 for information regarding changes to fund management fees. |
Schwab MarketTrack Portfolios 7
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Schwab MarketTrack Growth Portfolio™
The Schwab MarketTrack Growth Portfolio (the portfolio) seeks high capital growth with less volatility than an all-stock portfolio. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation includes stock, bond, and cash investments. For the 12-month reporting period ended October 31, 2014, the portfolio remained close to the target allocations of 80% equity, 15% fixed income, and 5% cash and cash equivalents. 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. Please see the Supplement to the Prospectus dated September 25, 2014, for information regarding target allocation changes.
Performance. For the 12-month reporting period ended October 31, 2014, the portfolio returned 8.55%. The portfolio’s internally calculated comparative index, the Growth Composite Index (the composite index), returned 9.02%.
Market Highlights. Large-cap U.S. stocks performed well for the 12-month reporting period, buoyed by low interest rates, rebounding economic growth, and generally favorable earnings report, while small-cap U.S. stocks underperformed by comparison. Outside of the U.S., economic growth generally faltered. This convinced many overseas central banks to maintain low interest rate policies, even as the Federal Reserve (the Fed) wrapped up its quantitative easing policies aimed at holding down long-term interest rates. As a result, many foreign currencies depreciated versus the U.S. dollar, reducing the returns of international investments in U.S. dollar terms, as was reflected by the -0.2% return of the MSCI EAFE Index. Among emerging markets, overall market volatility increased amid heightened geopolitical tensions in Russia and the Middle East, with the MSCI Emerging Markets Index returning approximately 0.6% for the reporting period. On the fixed income side, soft U.S. economic activity early in 2014 and an overall decline in longer-term bond yields helped the Barclays U.S. Aggregate Bond Index return approximately 4.1% for the reporting period.
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 17.2%. The Schwab Small-Cap Index Fund also contributed, returning 8.1%. On a relative basis, the Schwab S&P 500 Index Fund narrowly underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. In contrast, the Schwab Small-Cap Index Fund narrowly outperformed the Russell 2000 Index, 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 and enhanced performance relative to the composite index. The portfolio’s position in the Schwab International Index Fund returned 0.1%, outperforming the MSCI EAFE Index (Net), which is the composite index’s international equity allocation component.
The fixed income allocation generated a positive return that contributed to the portfolio’s total return. The Schwab Total Bond Market Fund returned approximately 4.1%. On a relative basis, this return was approximately in line with the return of the composite index’s U.S. fixed income allocation component, the Barclays U.S. Aggregate Bond Index.
As of 10/31/14:
Statistics
Number of Holdings | 9 | |||
Portfolio Turnover Rate | 7% |
Asset Class Weightings % of Investments
Equity Funds – Large-Cap | 40.6% | |||
Equity Funds – Small-Cap | 20.1% | |||
Equity Funds – International | 19.7% | |||
Fixed-Income Funds – Intermediate-Term Bond | 14.7% | |||
Short-Term Investments | 3.4% | |||
Money Market Funds | 1.5% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab S&P 500 Index Fund | 40.6% | |||
Schwab Small-Cap Index Fund | 20.0% | |||
Schwab International Index Fund | 19.7% | |||
Schwab Total Bond Market Fund | 14.7% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.5% | |||
Total | 96.5% |
Management views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
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
Table of Contents
Schwab MarketTrack Growth Porfoliotm
Performance and Fund Facts as of 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsmgp.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Growth Porfoliotm (11/20/95) | 8.55 | % | 11.87 | % | 6.81 | % | |||||||||
Growth Composite Index | 9.02 | % | 12.09 | % | 7.33 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Fund Category: Morningstar Aggressive Allocation | 8.78 | % | 11.38 | % | 6.53 | % |
Fund Expense Ratios3: Net 0.66%; Gross 0.68%
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
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 dated February 28, 2014. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.16%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the 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. Please see the portfolio’s prospectus supplement dated September 25, 2014 for information regarding changes to fund management fees. |
Schwab MarketTrack Portfolios 9
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Schwab MarketTrack Balanced Portfolio™
The Schwab MarketTrack Balanced Portfolio (the portfolio) seeks both capital growth and income. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation includes stock, bond, and cash investments. For the 12-month reporting period ended October 31, 2014, the portfolio remained close to the target allocations of 60% equity, 35% fixed income, and 5% cash and cash equivalents. 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. Please see the Supplement to the Prospectus dated September 25, 2014 for information regarding target allocation changes.
Performance. For the 12-month reporting period ended October 31, 2014, the portfolio returned 7.28%. The portfolio’s internally calculated comparative index, the Balanced Composite Index (the composite index), returned 7.78%.
Market Highlights. Large-cap U.S. stocks performed well for the 12-month reporting period, buoyed by low interest rates, rebounding economic growth, and generally favorable earnings report, while small-cap U.S. stocks underperformed by comparison. Outside of the U.S., economic growth generally faltered. This convinced many overseas central banks to maintain low interest rate policies, even as the Federal Reserve (the Fed) wrapped up its quantitative easing policies aimed at holding down long-term interest rates. As a result, many foreign currencies depreciated versus the U.S. dollar, reducing the returns of international investments in U.S. dollar terms, as was reflected by the -0.2% return of the MSCI EAFE Index. Among emerging markets, overall market volatility increased amid heightened geopolitical tensions in Russia and the Middle East, with the MSCI Emerging Markets Index returning approximately 0.6% for the reporting period. On the fixed income side, soft U.S. economic activity early in 2014 and an overall decline in longer-term bond yields helped the Barclays U.S. Aggregate Bond Index return approximately 4.1% for the reporting period.
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 17.2%. The Schwab Small-Cap Index Fund also contributed, returning 8.1%. On a relative basis, the Schwab S&P 500 Index Fund narrowly underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. In contrast, the Schwab Small-Cap Index Fund narrowly outperformed the Russell 2000 Index, 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 and enhanced performance relative to the composite index. The portfolio’s position in the Schwab International Index Fund returned 0.1%, outperforming the MSCI EAFE Index (Net), which is the composite index’s international equity allocation component.
The fixed income allocation generated a positive return that contributed to the portfolio’s total return. The Schwab Total Bond Market Fund returned approximately 4.1%. On a relative basis, this return was approximately in line with the return of the composite index’s U.S. fixed income allocation component, the Barclays U.S. Aggregate Bond Index.
As of 10/31/14:
Statistics
Number of Holdings | 9 | |||
Portfolio Turnover Rate | 16% |
Asset Class Weightings % of Investments
Fixed-Income Funds – Intermediate-Term Bond | 34.7% | |||
Equity Funds – Large-Cap | 30.6% | |||
Equity Funds – Small-Cap | 15.1% | |||
Equity Funds – International | 14.7% | |||
Short-Term Investments | 3.4% | |||
Money Market Funds | 1.5% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Total Bond Market Fund | 34.7% | |||
Schwab S&P 500 Index Fund | 30.6% | |||
Schwab Small-Cap Index Fund | 15.1% | |||
Schwab International Index Fund | 14.7% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.5% | |||
Total | 96.6% |
Management views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsmbf.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Balanced Portfoliotm (11/20/95) | 7.28 | % | 9.82 | % | 5.94 | % | |||||||||
Balanced Composite Index | 7.78 | % | 10.17 | % | 6.77 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.64 | % | |||||||||
Fund Category: Morningstar Moderate Allocation | 8.27 | % | 10.30 | % | 6.37 | % |
Fund Expense Ratios3: Net 0.69%; Gross 0.71%
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
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 dated February 28, 2014. 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 the 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. Please see the portfolio’s prospectus supplement dated September 25, 2014 for information regarding changes to fund management fees. |
Schwab MarketTrack Portfolios 11
Table of Contents
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. For the 12-month reporting period ended October 31, 2014, the portfolio remained close to the target allocations of 55% fixed income, 40% equity, and 5% cash and cash equivalents. 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. Please see the Supplement to the Prospectus dated September 25, 2014, for information regarding target allocation changes.
Performance. For the 12-month reporting period ended October 31, 2014, the portfolio returned 5.95%. The portfolio’s internally calculated comparative index, the Conservative Composite Index (the composite index), returned 6.52%.
Market Highlights. Large-cap U.S. stocks performed well for the 12-month reporting period, buoyed by low interest rates, rebounding economic growth, and generally favorable earnings report, while small-cap U.S. stocks underperformed by comparison. Outside of the U.S., economic growth generally faltered. This convinced many overseas central banks to maintain low interest rate policies, even as the Federal Reserve (the Fed) wrapped up its quantitative easing policies aimed at holding down long-term interest rates. As a result, many foreign currencies depreciated versus the U.S. dollar, reducing the returns of international investments in U.S. dollar terms, as was reflected by the -0.2% return of the MSCI EAFE Index. Among emerging markets, overall market volatility increased amid heightened geopolitical tensions in Russia and the Middle East, with the MSCI Emerging Markets Index returning approximately 0.6% for the reporting period. On the fixed income side, soft U.S. economic activity early in 2014 and an overall decline in longer-term bond yields helped the Barclays U.S. Aggregate Bond Index return approximately 4.1% for the reporting period.
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 17.2%. The Schwab Small-Cap Index Fund also contributed, returning 8.1%. On a relative basis, the Schwab S&P 500 Index Fund narrowly underperformed the composite index’s U.S. equity allocation component, the S&P 500 Index, which returned 17.3%. In contrast, the Schwab Small-Cap Index Fund narrowly outperformed the Russell 2000 Index, 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 and enhanced performance relative to the composite index. The portfolio’s position in the Schwab International Index Fund returned 0.1%, slightly outperforming the MSCI EAFE Index (Net), which is the composite index’s international equity allocation component.
The fixed income allocation generated a positive return that contributed to the portfolio’s total return. The Schwab Total Bond Market Fund returned approximately 4.1%. On a relative basis, this return was approximately in line with the return of the composite index’s U.S. fixed income allocation component, the Barclays U.S. Aggregate Bond Index.
As of 10/31/14:
Statistics
Number of Holdings | 9 | |||
Portfolio Turnover Rate | 9% |
Asset Class Weightings % of Investments
Fixed-Income Funds – Intermediate-Term Bond | 54.8% | |||
Equity Funds – Large-Cap | 20.6% | |||
Equity Funds – Small-Cap | 10.0% | |||
Equity Funds – International | 9.7% | |||
Short-Term Investments | 3.3% | |||
Money Market Funds | 1.6% | |||
Total | 100.0% |
Top Holdings % of Net Assets1,2
Schwab Total Bond Market Fund | 54.7% | |||
Schwab S&P 500 Index Fund | 20.6% | |||
Schwab Small-Cap Index Fund | 10.0% | |||
Schwab International Index Fund | 9.7% | |||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 1.6% | |||
Total | 96.6% |
Management views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
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 10/31/14
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, 2004 – October 31, 2014
Performance of Hypothetical
$10,000 Investment1
Performance of Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-15-000008/f30296ctsmcp.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Conservative Portfoliotm (11/20/95) | 5.95 | % | 7.66 | % | 4.96 | % | |||||||||
Conservative Composite Index | 6.52 | % | 8.17 | % | 6.11 | % | |||||||||
S&P 500® Index | 17.27 | % | 16.69 | % | 8.20 | % | |||||||||
Barclays U.S. Aggregate Bond Index | 4.14 | % | 4.22 | % | 4.64 | % | |||||||||
Fund Category: Morningstar Conservative Allocation | 5.41 | % | 7.39 | % | 5.16 | % |
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 dated February 28, 2014. 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 the 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. Please see the portfolio’s prospectus supplement dated September 25, 2014 for information regarding changes to fund management fees. |
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, 2014 and held through October 31, 2014.
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 5/1/14 | at 10/31/14 | 05/1/14–10/31/14 | |||||||||||||
Schwab MarketTrack All Equity Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,032.50 | $ | 2.56 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000.00 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Growth Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,034.30 | $ | 2.56 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000.00 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Balanced Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,031.20 | $ | 2.56 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000.00 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Conservative Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000.00 | $ | 1,027.20 | $ | 2.55 | |||||||||
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
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.99 | 12.79 | 11.52 | 11.30 | 9.82 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.27 | 0.25 | 0.16 | 0.12 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.24 | 3.27 | 1.02 | 0.27 | 1.50 | |||||||||||||||||
Total from investment operations | 1.45 | 3.54 | 1.27 | 0.43 | 1.62 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.27 | ) | (0.34 | ) | — | (0.21 | ) | (0.14 | ) | |||||||||||||
Net asset value at end of period | 17.17 | 15.99 | 12.79 | 11.52 | 11.30 | |||||||||||||||||
Total return (%) | 9.12 | 28.37 | 11.02 | 3.76 | 16.62 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.51 | 0.52 | 0.54 | 0.53 | 0.54 | |||||||||||||||||
Net investment income (loss) | 1.24 | 1.84 | 1.93 | 1.37 | 1.14 | |||||||||||||||||
Portfolio turnover rate | 9 | 6 | 6 | 12 | 8 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 621 | 586 | 475 | 476 | 489 |
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, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .6% | Other Investment Companies | 386,750,852 | 618,276,262 | ||||||||
0 | .3% | Short-Term Investment | 2,270,769 | 2,270,769 | ||||||||
99 | .9% | Total Investments | 389,021,621 | 620,547,031 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 393,579 | |||||||||
100 | .0% | Net Assets | 620,940,610 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.6% of net assets | ||||||||
Equity Funds 99.6% | ||||||||
International 29.8% | ||||||||
Schwab International Index Fund (a) | 9,522,611 | 184,929,103 | ||||||
Large-Cap 44.8% | ||||||||
Schwab S&P 500 Index Fund (a) | 8,701,477 | 278,360,252 | ||||||
Small-Cap 25.0% | ||||||||
Schwab Small-Cap Index Fund (a) | 5,509,666 | 154,986,907 | ||||||
Total Other Investment Companies | ||||||||
(Cost $386,750,852) | 618,276,262 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.3% of net assets | ||||||||
Time Deposit 0.3% | ||||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 2,270,769 | 2,270,769 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,270,769) | 2,270,769 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $403,377,138 and the unrealized appreciation and depreciation were $217,169,893 and ($0), respectively, with a net unrealized appreciation of $217,169,893.
(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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $618,276,262 | $— | $— | $618,276,262 | ||||||||||||
Short-Term Investment1 | — | 2,270,769 | — | 2,270,769 | ||||||||||||
Total | $618,276,262 | $2,270,769 | $— | $620,547,031 | ||||||||||||
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, 2014.
16 See financial notes
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $386,750,852) | $618,276,262 | |||||
Investments in unaffiliated issuers, at value (cost $2,270,769) | + | 2,270,769 | ||||
Total investments, at value (cost $389,021,621) | 620,547,031 | |||||
Receivables: | ||||||
Investments sold | 5,380,000 | |||||
Fund shares sold | 244,846 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 12,872 | ||||
Total assets | 626,184,751 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 4,380,000 | |||||
Investment adviser and administrator fees | 14,774 | |||||
Shareholder service fees | 16,703 | |||||
Fund shares redeemed | 773,510 | |||||
Accrued expenses | + | 59,154 | ||||
Total liabilities | 5,244,141 | |||||
Net Assets | ||||||
Total assets | 626,184,751 | |||||
Total liabilities | − | 5,244,141 | ||||
Net assets | $620,940,610 | |||||
Net Assets by Source | ||||||
Capital received from investors | 424,995,067 | |||||
Net investment income not yet distributed | 8,345,966 | |||||
Net realized capital losses | (43,925,833 | ) | ||||
Net unrealized capital appreciation | 231,525,410 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$620,940,610 | 36,166,354 | $17.17 |
See financial notes 17
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $10,641,678 | |||||
Interest | + | 806 | ||||
Total investment income | 10,642,484 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,409,139 | |||||
Shareholder service fees | 1,491,086 | |||||
Shareholder reports | 70,039 | |||||
Professional fees | 41,684 | |||||
Transfer agent fees | 37,175 | |||||
Registration fees | 32,603 | |||||
Portfolio accounting fees | 27,285 | |||||
Custodian fees | 12,586 | |||||
Independent trustees’ fees | 9,024 | |||||
Other expenses | + | 13,312 | ||||
Total expenses | 3,143,933 | |||||
Expense reduction by CSIM and its affiliates | − | 81,259 | ||||
Net expenses | − | 3,062,674 | ||||
Net investment income | 7,579,810 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 6,726,205 | |||||
Net realized gains on sales of affiliated underlying funds | 10,181,572 | |||||
Net realized losses on unaffiliated investments | + | (11 | ) | |||
Net realized gains | 16,907,766 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 28,397,026 | ||||
Net realized and unrealized gains | 45,304,792 | |||||
Increase in net assets resulting from operations | $52,884,602 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $7,579,810 | $9,727,932 | ||||||||
Net realized gains | 16,907,766 | 7,228,288 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 28,397,026 | 114,728,861 | |||||||
Increase in net assets from operations | 52,884,602 | 131,685,081 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($9,729,315 | ) | ($12,561,634 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,783,484 | $62,639,443 | 4,265,588 | $60,479,156 | ||||||||||||||
Shares reinvested | 553,923 | 9,089,878 | 918,465 | 11,765,529 | ||||||||||||||
Shares redeemed | + | (4,817,645 | ) | (80,084,457 | ) | (5,656,792 | ) | (79,997,553 | ) | |||||||||
Net transactions in fund shares | (480,238 | ) | ($8,355,136 | ) | (472,739 | ) | ($7,752,868 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 36,646,592 | $586,140,459 | 37,119,331 | $474,769,880 | ||||||||||||||
Total increase or decrease | + | (480,238 | ) | 34,800,151 | (472,739 | ) | 111,370,579 | |||||||||||
End of period | 36,166,354 | $620,940,610 | 36,646,592 | $586,140,459 | ||||||||||||||
Net investment income not yet distributed | $8,345,966 | $9,726,658 |
See financial notes 19
Table of Contents
Schwab MarketTrack Growth Portfolio™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 21.67 | 18.08 | 16.85 | 16.35 | 14.51 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.27 | 0.34 | 0.30 | 0.24 | 0.19 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.57 | 3.60 | 1.35 | 0.51 | 1.95 | |||||||||||||||||
Total from investment operations | 1.84 | 3.94 | 1.65 | 0.75 | 2.14 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.31 | ) | (0.35 | ) | (0.42 | ) | (0.25 | ) | (0.30 | ) | ||||||||||||
Net asset value at end of period | 23.20 | 21.67 | 18.08 | 16.85 | 16.35 | |||||||||||||||||
Total return (%) | 8.55 | 22.14 | 10.03 | 4.55 | 14.86 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.51 | 0.52 | 0.53 | 0.52 | 0.52 | |||||||||||||||||
Net investment income (loss) | 1.20 | 1.71 | 1.78 | 1.39 | 1.25 | |||||||||||||||||
Portfolio turnover rate | 7 | 9 | 9 | 17 | 14 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 734 | 680 | 566 | 562 | 549 |
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, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .5% | Other Investment Companies | 410,227,595 | 708,246,618 | ||||||||
3 | .4% | Short-Term Investments | 24,468,699 | 24,468,699 | ||||||||
99 | .9% | Total Investments | 434,696,294 | 732,715,317 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 975,998 | |||||||||
100 | .0% | Net Assets | 733,691,315 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.5% of net assets | ||||||||
Equity Funds 80.3% | ||||||||
International 19.7% | ||||||||
Schwab International Index Fund (a) | 7,441,640 | 144,516,656 | ||||||
Large-Cap 40.6% | ||||||||
Schwab S&P 500 Index Fund (a) | 9,305,006 | 297,667,152 | ||||||
Small-Cap 20.0% | ||||||||
Schwab Small-Cap Index Fund (a) | 5,229,959 | 147,118,745 | ||||||
589,302,553 | ||||||||
Fixed-Income Fund 14.7% | ||||||||
Intermediate-Term Bond 14.7% | ||||||||
Schwab Total Bond Market Fund (a) | 11,309,453 | 107,892,183 | ||||||
Money Market Fund 1.5% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.01% (a)(b) | 11,051,882 | 11,051,882 | ||||||
Total Other Investment Companies | ||||||||
(Cost $410,227,595) | 708,246,618 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.4% of net assets | ||||||||
Time Deposits 3.4% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 4,184,549 | 4,184,549 | ||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 5,765,768 | 5,765,768 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 7,259,191 | 7,259,191 | ||||||
Wells Fargo | ||||||||
0.03%, 11/03/14 | 7,259,191 | 7,259,191 | ||||||
Total Short-Term Investments | ||||||||
(Cost $24,468,699) | 24,468,699 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $439,192,307 and the unrealized appreciation and depreciation were $293,523,010 and ($0), respectively, with a net unrealized appreciation of $293,523,010.
(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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $708,246,618 | $— | $— | $708,246,618 | ||||||||||||
Short-Term Investments1 | — | 24,468,699 | — | 24,468,699 | ||||||||||||
Total | $708,246,618 | $24,468,699 | $— | $732,715,317 | ||||||||||||
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, 2014.
See financial notes 21
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $410,227,595) | $708,246,618 | |||||
Investments in unaffiliated issuers, at value (cost $24,468,699) | + | 24,468,699 | ||||
Total investments, at value (cost $434,696,294) | 732,715,317 | |||||
Receivables: | ||||||
Investments sold | 3,700,000 | |||||
Fund shares sold | 468,066 | |||||
Dividends | 204,379 | |||||
Interest | 20 | |||||
Prepaid expenses | + | 15,793 | ||||
Total assets | 737,103,575 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 3,104,931 | |||||
Investment adviser and administrator fees | 17,682 | |||||
Shareholder service fees | 20,600 | |||||
Fund shares redeemed | 212,781 | |||||
Accrued expenses | + | 56,266 | ||||
Total liabilities | 3,412,260 | |||||
Net Assets | ||||||
Total assets | 737,103,575 | |||||
Total liabilities | − | 3,412,260 | ||||
Net assets | $733,691,315 | |||||
Net Assets by Source | ||||||
Capital received from investors | 428,728,675 | |||||
Distributions in excess of net investment income | (966,909 | ) | ||||
Net realized capital gains | 7,910,526 | |||||
Net unrealized capital appreciation | 298,019,023 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$733,691,315 | 31,624,246 | $23.20 |
22 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $12,116,557 | |||||
Interest | + | 7,344 | ||||
Total investment income | 12,123,901 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,640,648 | |||||
Shareholder service fees | 1,746,579 | |||||
Shareholder reports | 64,960 | |||||
Professional fees | 43,522 | |||||
Transfer agent fees | 36,780 | |||||
Registration fees | 31,336 | |||||
Portfolio accounting fees | 28,813 | |||||
Custodian fees | 14,499 | |||||
Independent trustees’ fees | 9,498 | |||||
Other expenses | + | 11,473 | ||||
Total expenses | 3,628,108 | |||||
Expense reduction by CSIM and its affiliates | − | 61,482 | ||||
Net expenses | − | 3,566,626 | ||||
Net investment income | 8,557,275 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 6,228,769 | |||||
Net realized gains on sales of affiliated underlying funds | 8,859,899 | |||||
Net realized gains on unaffiliated investments | + | 62,499 | ||||
Net realized gains | 15,151,167 | |||||
Net change in unrealized appreciation (depreciation) on investments | + | 34,299,920 | ||||
Net realized and unrealized gains | 49,451,087 | |||||
Increase in net assets resulting from operations | $58,008,362 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $8,557,275 | $10,557,296 | ||||||||
Net realized gains | 15,151,167 | 11,273,795 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 34,299,920 | 101,623,253 | |||||||
Increase in net assets from operations | 58,008,362 | 123,454,344 | ||||||||
Distributions to Shareholders1 | ||||||||||
Distributions from net investment income | ($9,625,225 | ) | ($10,641,577 | ) |
Transactions in Fund Shares1
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,913,595 | $87,721,647 | 3,956,940 | $78,029,608 | ||||||||||||||
Shares reinvested | 411,732 | 9,099,268 | 556,707 | 10,081,957 | ||||||||||||||
Shares redeemed | + | (4,084,279 | ) | (91,729,964 | ) | (4,460,927 | ) | (87,149,494 | ) | |||||||||
Net transactions in fund shares | 241,048 | $5,090,951 | 52,720 | $962,071 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 31,383,198 | $680,217,227 | 31,330,478 | $566,442,389 | ||||||||||||||
Total increase | + | 241,048 | 53,474,088 | 52,720 | 113,774,838 | |||||||||||||
End of period | 31,624,246 | $733,691,315 | 31,383,198 | $680,217,227 | ||||||||||||||
Distributions in excess of net investment income | ($966,909 | ) | ($610,915 | ) |
1 | Effective December 6, 2012, the P Share class was terminated. |
24 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 18.55 | 16.33 | 15.41 | 14.96 | 13.54 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.26 | 0.31 | 0.29 | 0.25 | 0.23 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.08 | 2.23 | 1.01 | 0.46 | 1.50 | |||||||||||||||||
Total from investment operations | 1.34 | 2.54 | 1.30 | 0.71 | 1.73 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.27 | ) | (0.32 | ) | (0.38 | ) | (0.26 | ) | (0.31 | ) | ||||||||||||
Distributions from net realized gains | (0.12 | ) | — | — | — | — | ||||||||||||||||
Total distributions | (0.39 | ) | (0.32 | ) | (0.38 | ) | (0.26 | ) | (0.31 | ) | ||||||||||||
Net asset value at end of period | 19.50 | 18.55 | 16.33 | 15.41 | 14.96 | |||||||||||||||||
Total return (%) | 7.28 | 15.82 | 8.61 | 4.80 | 12.92 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.51 | 0.52 | 0.53 | 0.52 | 0.52 | |||||||||||||||||
Net investment income (loss) | 1.30 | 1.75 | 1.86 | 1.64 | 1.59 | |||||||||||||||||
Portfolio turnover rate | 16 | 12 | 12 | 25 | 22 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 522 | 481 | 425 | 432 | 450 |
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, 2014
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 | 327,655,924 | 504,250,620 | ||||||||
3 | .4% | Short-Term Investments | 17,442,716 | 17,442,716 | ||||||||
100 | .0% | Total Investments | 345,098,640 | 521,693,336 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 173,216 | |||||||||
100 | .0% | Net Assets | 521,866,552 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.6% of net assets | ||||||||
Equity Funds 60.4% | ||||||||
International 14.7% | ||||||||
Schwab International Index Fund (a) | 3,955,097 | 76,807,980 | ||||||
Large-Cap 30.6% | ||||||||
Schwab S&P 500 Index Fund (a) | 4,990,453 | 159,644,592 | ||||||
Small-Cap 15.1% | ||||||||
Schwab Small-Cap Index Fund (a) | 2,792,568 | 78,554,950 | ||||||
315,007,522 | ||||||||
Fixed-Income Fund 34.7% | ||||||||
Intermediate-Term Bond 34.7% | ||||||||
Schwab Total Bond Market Fund (a) | 18,994,620 | 181,208,671 | ||||||
Money Market Fund 1.5% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.01% (a)(b) | 8,034,427 | 8,034,427 | ||||||
Total Other Investment Companies | ||||||||
(Cost $327,655,924) | 504,250,620 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.4% of net assets | ||||||||
Time Deposits 3.4% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 5,184,259 | 5,184,259 | ||||||
DBS Bank Ltd. | ||||||||
0.03%, 11/03/14 | 1,889,939 | 1,889,939 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 5,184,259 | 5,184,259 | ||||||
Sumitomo Mitsui Banking Corp. | ||||||||
0.03%, 11/03/14 | 5,184,259 | 5,184,259 | ||||||
Total Short-Term Investments | ||||||||
(Cost $17,442,716) | 17,442,716 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $352,755,298 and the unrealized appreciation and depreciation were $168,938,038 and ($0), respectively, with a net unrealized appreciation of $168,938,038.
(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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $504,250,620 | $— | $— | $504,250,620 | ||||||||||||
Short-Term Investments1 | — | 17,442,716 | — | 17,442,716 | ||||||||||||
Total | $504,250,620 | $17,442,716 | $— | $521,693,336 | ||||||||||||
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, 2014.
26 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $327,655,924) | $504,250,620 | |||||
Investments in unaffiliated issuers, at value (cost $17,442,716) | + | 17,442,716 | ||||
Total investments, at value (cost $345,098,640) | 521,693,336 | |||||
Receivables: | ||||||
Investments sold | 3,000,000 | |||||
Dividends | 345,057 | |||||
Fund shares sold | 289,259 | |||||
Interest | 15 | |||||
Prepaid expenses | + | 11,421 | ||||
Total assets | 525,339,088 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,746,037 | |||||
Investment adviser and administrator fees | 12,078 | |||||
Shareholder service fees | 14,492 | |||||
Fund shares redeemed | 655,458 | |||||
Accrued expenses | + | 44,471 | ||||
Total liabilities | 3,472,536 | |||||
Net Assets | ||||||
Total assets | 525,339,088 | |||||
Total liabilities | − | 3,472,536 | ||||
Net assets | $521,866,552 | |||||
Net Assets by Source | ||||||
Capital received from investors | 342,710,283 | |||||
Net investment income not yet distributed | 1,291,759 | |||||
Net realized capital gains | 1,269,814 | |||||
Net unrealized capital appreciation | 176,594,696 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$521,866,552 | 26,765,348 | $19.50 |
See financial notes 27
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $9,278,273 | |||||
Interest | + | 5,215 | ||||
Total investment income | 9,283,488 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,183,411 | |||||
Shareholder service fees | 1,263,422 | |||||
Professional fees | 40,685 | |||||
Shareholder reports | 34,656 | |||||
Registration fees | 32,258 | |||||
Transfer agent fees | 28,433 | |||||
Portfolio accounting fees | 25,297 | |||||
Custodian fees | 11,308 | |||||
Independent trustees’ fees | 8,564 | |||||
Other expenses | + | 9,937 | ||||
Total expenses | 2,637,971 | |||||
Expense reduction by CSIM and its affiliates | − | 65,339 | ||||
Net expenses | − | 2,572,632 | ||||
Net investment income | 6,710,856 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 3,305,085 | |||||
Net realized gains on sales of affiliated underlying funds | 5,949,179 | |||||
Net realized gains on unaffiliated investments | + | 41,716 | ||||
Net realized gains | 9,295,980 | |||||
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 20,375,572 | ||||
Net realized and unrealized gains | 29,671,552 | |||||
Increase in net assets resulting from operations | $36,382,408 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $6,710,856 | $7,871,154 | ||||||||
Net realized gains | 9,295,980 | 11,848,026 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 20,375,572 | 46,183,726 | |||||||
Increase in net assets from operations | 36,382,408 | 65,902,906 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (6,922,856 | ) | (8,153,238 | ) | ||||||
Distributions from net realized gains | + | (3,022,728 | ) | — | ||||||
Total distributions | ($9,945,584 | ) | ($8,153,238 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 6,823,497 | $128,625,138 | 3,770,528 | $65,235,947 | ||||||||||||||
Shares reinvested | 501,199 | 9,312,269 | 467,584 | 7,607,583 | ||||||||||||||
Shares redeemed | + | (6,491,635 | ) | (123,488,301 | ) | (4,331,142 | ) | (74,715,528 | ) | |||||||||
Net transactions in fund shares | 833,061 | $14,449,106 | (93,030 | ) | ($1,871,998 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 25,932,287 | $480,980,622 | 26,025,317 | $425,102,952 | ||||||||||||||
Total increase or decrease | + | 833,061 | 40,885,930 | (93,030 | ) | 55,877,670 | ||||||||||||
End of period | 26,765,348 | $521,866,552 | 25,932,287 | $480,980,622 | ||||||||||||||
Net investment income not yet distributed | $1,291,759 | $1,125,984 |
See financial notes 29
Table of Contents
Schwab MarketTrack Conservative Portfolio™
Financial Statements
Financial Highlights
11/1/13– | 11/1/12– | 11/1/11– | 11/1/10– | 11/1/09– | ||||||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.34 | 14.23 | 13.59 | 13.22 | 12.15 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.26 | 0.26 | 0.25 | 0.24 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.67 | 1.10 | 0.69 | 0.37 | 1.08 | |||||||||||||||||
Total from investment operations | 0.90 | 1.36 | 0.95 | 0.62 | 1.32 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.25 | ) | (0.31 | ) | (0.25 | ) | (0.25 | ) | ||||||||||||
Net asset value at end of period | 16.00 | 15.34 | 14.23 | 13.59 | 13.22 | |||||||||||||||||
Total return (%) | 5.95 | 9.71 | 7.07 | 4.72 | 10.98 | |||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.54 | 0.55 | 0.55 | 0.55 | 0.56 | |||||||||||||||||
Net investment income (loss) | 1.43 | 1.78 | 1.96 | 1.84 | 1.93 | |||||||||||||||||
Portfolio turnover rate | 9 | 15 | 19 | 30 | 25 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 223 | 203 | 189 | 198 | 194 |
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, 2014
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 | 160,999,232 | 215,801,630 | ||||||||
3 | .2% | Short-Term Investments | 7,254,346 | 7,254,346 | ||||||||
99 | .8% | Total Investments | 168,253,578 | 223,055,976 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 356,635 | |||||||||
100 | .0% | Net Assets | 223,412,611 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 96.6% of net assets | ||||||||
Equity Funds 40.3% | ||||||||
International 9.7% | ||||||||
Schwab International Index Fund (a) | 1,118,477 | 21,720,824 | ||||||
Large-Cap 20.6% | ||||||||
Schwab S&P 500 Index Fund (a) | 1,436,471 | 45,952,704 | ||||||
Small-Cap 10.0% | ||||||||
Schwab Small-Cap Index Fund (a) | 796,611 | 22,408,670 | ||||||
90,082,198 | ||||||||
Fixed-Income Fund 54.7% | ||||||||
Intermediate-Term Bond 54.7% | ||||||||
Schwab Total Bond Market Fund (a) | 12,812,537 | 122,231,602 | ||||||
Money Market Fund 1.6% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares 0.01% (a)(b) | 3,487,830 | 3,487,830 | ||||||
Total Other Investment Companies | ||||||||
(Cost $160,999,232) | 215,801,630 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.2% of net assets | ||||||||
Time Deposits 3.2% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 583,612 | 583,612 | ||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 2,223,578 | 2,223,578 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 2,223,578 | 2,223,578 | ||||||
Wells Fargo | ||||||||
0.03%, 11/03/14 | 2,223,578 | 2,223,578 | ||||||
Total Short-Term Investments | ||||||||
(Cost $7,254,346) | 7,254,346 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $175,994,111 and the unrealized appreciation and depreciation were $47,061,865 and ($0), respectively, with a net unrealized appreciation of $47,061,865.
(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, 2014 (see financial note 2(a) for additional information):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Other Significant | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Investment Companies1 | $215,801,630 | $— | $— | $215,801,630 | ||||||||||||
Short-Term Investments1 | — | 7,254,346 | — | 7,254,346 | ||||||||||||
Total | $215,801,630 | $7,254,346 | $— | $223,055,976 | ||||||||||||
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, 2014.
See financial notes 31
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Assets and Liabilities
As of October 31, 2014
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $160,999,232) | $215,801,630 | |||||
Investments in unaffiliated issuers, at value (cost $7,254,346) | + | 7,254,346 | ||||
Total investments, at value (cost $168,253,578) | 223,055,976 | |||||
Receivables: | ||||||
Investments sold | 1,310,000 | |||||
Dividends | 232,576 | |||||
Fund shares sold | 65,502 | |||||
Interest | 6 | |||||
Prepaid expenses | + | 4,746 | ||||
Total assets | 224,668,806 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 1,163,249 | |||||
Investment adviser and administrator fees | 4,768 | |||||
Shareholder service fees | 5,800 | |||||
Fund shares redeemed | 47,302 | |||||
Accrued expenses | + | 35,076 | ||||
Total liabilities | 1,256,195 | |||||
Net Assets | ||||||
Total assets | 224,668,806 | |||||
Total liabilities | − | 1,256,195 | ||||
Net assets | $223,412,611 | |||||
Net Assets by Source | ||||||
Capital received from investors | 177,038,431 | |||||
Net investment income not yet distributed | 150,423 | |||||
Net realized capital losses | (8,578,641 | ) | ||||
Net unrealized capital appreciation | 54,802,398 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$223,412,611 | 13,959,002 | $16.00 |
32 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Operations
For the period November 1, 2013 through October 31, 2014
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,174,699 | |||||
Interest | + | 2,177 | ||||
Total investment income | 4,176,876 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 497,767 | |||||
Shareholder service fees | 530,013 | |||||
Professional fees | 38,894 | |||||
Registration fees | 27,392 | |||||
Transfer agent fees | 25,032 | |||||
Portfolio accounting fees | 19,366 | |||||
Shareholder reports | 16,110 | |||||
Independent trustees’ fees | 7,122 | |||||
Custodian fees | 6,417 | |||||
Other expenses | + | 4,592 | ||||
Total expenses | 1,172,705 | |||||
Expense reduction by CSIM and its affiliates | − | 90,602 | ||||
Net expenses | − | 1,082,103 | ||||
Net investment income | 3,094,773 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 916,684 | |||||
Net realized gains on sales of affiliated underlying funds | 1,199,088 | |||||
Net realized gains on unaffiliated investments | + | 58 | ||||
Net realized gains | 2,115,830 | |||||
Net change in unrealized appreciation (depreciation) on investments | + | 7,357,863 | ||||
Net realized and unrealized gains | 9,473,693 | |||||
Increase in net assets resulting from operations | $12,568,466 |
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 | ||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||
Net investment income | $3,094,773 | $3,503,224 | ||||||||
Net realized gains | 2,115,830 | 5,583,546 | ||||||||
Net change in unrealized appreciation (depreciation) | + | 7,357,863 | 9,133,787 | |||||||
Increase in net assets from operations | 12,568,466 | 18,220,557 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($3,306,277 | ) | ($3,392,046 | ) |
Transactions in Fund Shares
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,855,381 | $44,555,555 | 2,448,680 | $35,840,677 | ||||||||||||||
Shares reinvested | 196,187 | 3,043,263 | 218,345 | 3,136,243 | ||||||||||||||
Shares redeemed | + | (2,297,937 | ) | (36,023,815 | ) | (2,716,814 | ) | (39,911,545 | ) | |||||||||
Net transactions in fund shares | 753,631 | $11,575,003 | (49,789 | ) | ($934,625 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/13-10/31/14 | 11/1/12-10/31/13 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 13,205,371 | $202,575,419 | 13,255,160 | $188,681,533 | ||||||||||||||
Total increase or decrease | + | 753,631 | 20,837,192 | (49,789 | ) | 13,893,886 | ||||||||||||
End of period | 13,959,002 | $223,412,611 | 13,205,371 | $202,575,419 | ||||||||||||||
Net investment income not yet distributed | $150,423 | $257,148 |
34 See financial notes
Table of Contents
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 Target 2010 Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Target 2015 Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Target 2020 Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Target 2025 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Target 2030 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2035 Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2040 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2045 Fund | |||
Schwab International Index Fund | 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 Balanced Fund | Schwab Fundamental US Small Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Dividend Equity Fund | Schwab Fundamental International Small Company Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Fundamental Emerging Markets Large Company Index Fund | |||
Schwab Small-Cap Equity Fund | Schwab Fundamental Global Real Estate 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 | |||
Schwab International Core Equity Fund | ||||
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, other mutual funds, ETFs and cash equivalents to achieve their investment objectives.
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 funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
The financial statements of the fund should be read in conjunction with the underlying funds’ financial statements. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed and available on the U.S. Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov or at the SEC’s Public Reference Room in Washington D.C.
(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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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 may be 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, without consideration to the classification level of the specific investments held by the underlying fund. | |
• | 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 |
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2. Significant Accounting Policies (continued):
due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of October 31, 2014 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. Each fund bears its share of the allocable expenses of the underlying funds in which they invest.
(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.
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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Financial Notes (continued)
3. Risk Factors (continued):
Affiliated Fund Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds may create a conflict of interest because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds. However, the portfolio manager is a fiduciary to the fund and is legally obligated to act in the fund’s best interests when selecting underlying funds, without taking fees into consideration.
Market Risk. Stock and bond markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of an investment in the 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. The funds are subject to the performance and expenses of the underlying funds in which they invest. 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 performance also will lag those investments. | |
• | 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 performance also will lag those investments. | |
• | 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. | |
• | 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); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of the underlying fund’s investments, and could impair the underlying fund’s ability to meet its investment objective or invest in accordance with its investment strategy. To the extent an underlying fund’s investment in a single country or a limited |
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Financial Notes (continued)
3. Risk Factors (continued):
number of countries represents a large percentage of the underlying fund’s assets, the underlying fund’s performance may be adversely affected by the economic, political and social conditions in those countries and it may be subject to increased price volatility. |
• | 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. | |
• | 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. An underlying fund’s use of derivatives could reduce the underlying fund’s performance, increase volatility 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.
Subsequent to the reporting year ended October 31, 2014, and effective December 1, 2014, the advisory fee has been reduced to 0.13%.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
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 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, 2014, 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 | 6.9% | 5.4% | 2.8% | 0.8% | ||||||||||||
Schwab S&P 500 Index Fund | 1.4% | 1.5% | 0.8% | 0.2% | ||||||||||||
Schwab Small-Cap Index Fund | 6.0% | 5.7% | 3.1% | 0.9% | ||||||||||||
Schwab Total Bond Market Fund | —% | 8.7% | 14.5% | 9.8% | ||||||||||||
Schwab Value Advantage Money Fund | —% | 0.1% | 0.1% | 0.0% | * |
* | Less than 0.1% |
Below is a summary of the funds’ transactions with their affiliated underlying funds during the period ended October 31, 2014.
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 | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab International Index Fund | 8,802,979 | 1,253,202 | (533,570 | ) | 9,522,611 | $184,929,103 | $287,476 | $4,521,379 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 9,440,636 | 250,342 | (989,501 | ) | 8,701,477 | 278,360,252 | 8,882,315 | 4,525,415 | ||||||||||||||||||||
Schwab Small-Cap Index Fund | 5,275,836 | 935,962 | (702,132 | ) | 5,509,666 | 154,986,907 | 1,011,781 | 8,321,089 | ||||||||||||||||||||
Total | $618,276,262 | $10,181,572 | $17,367,883 | |||||||||||||||||||||||||
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4. Affiliates and Affiliated Transactions (continued):
Schwab MarketTrack Growth Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab International Index Fund | 6,921,005 | 826,081 | (305,446 | ) | 7,441,640 | $144,516,656 | $345,741 | $3,532,814 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 9,836,526 | 326,656 | (858,176 | ) | 9,305,006 | 297,667,152 | 6,596,489 | 4,685,244 | ||||||||||||||||||||
Schwab Small-Cap Index Fund | 4,916,709 | 779,960 | (466,710 | ) | 5,229,959 | 147,118,745 | 1,976,260 | 7,705,703 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 10,568,831 | 1,346,713 | (606,091 | ) | 11,309,453 | 107,892,183 | (58,591 | ) | 2,419,983 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 11,050,198 | 1,684 | — | 11,051,882 | 11,051,882 | — | 1,582 | |||||||||||||||||||||
Total | $708,246,618 | $8,859,899 | $18,345,326 | |||||||||||||||||||||||||
Schwab MarketTrack Balanced Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab International Index Fund | 3,683,193 | 785,105 | (513,201 | ) | 3,955,097 | $76,807,980 | $221,055 | $1,880,564 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 5,225,847 | 746,277 | (981,671 | ) | 4,990,453 | 159,644,592 | 4,645,072 | 2,489,454 | ||||||||||||||||||||
Schwab Small-Cap Index Fund | 2,607,484 | 724,869 | (539,785 | ) | 2,792,568 | 78,554,950 | 1,170,630 | 4,088,771 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 17,782,598 | 4,034,973 | (2,822,951 | ) | 18,994,620 | 181,208,671 | (87,578 | ) | 4,123,419 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 8,033,203 | 1,224 | — | 8,034,427 | 8,034,427 | — | 1,150 | |||||||||||||||||||||
Total | $504,250,620 | $5,949,179 | $12,583,358 | |||||||||||||||||||||||||
Schwab MarketTrack Conservative Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/13 | 11/01/13 | ||||||||||||||||||||||
Underlying Funds | 10/31/13 | Purchases | Sales | 10/31/14 | 10/31/14 | to 10/31/14 | to 10/31/14 | |||||||||||||||||||||
Schwab International Index Fund | 1,040,719 | 203,798 | (126,040 | ) | 1,118,477 | $21,720,824 | $35,633 | $527,630 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,470,146 | 193,717 | (227,392 | ) | 1,436,471 | 45,952,704 | 795,151 | 695,081 | ||||||||||||||||||||
Schwab Small-Cap Index Fund | 730,478 | 180,451 | (114,318 | ) | 796,611 | 22,408,670 | 402,523 | 1,134,043 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 11,804,305 | 1,764,995 | (756,763 | ) | 12,812,537 | 122,231,602 | (34,219 | ) | 2,734,129 | |||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3,487,298 | 532 | — | 3,487,830 | 3,487,830 | — | 500 | |||||||||||||||||||||
Total | $215,801,630 | $1,199,088 | $5,091,383 | |||||||||||||||||||||||||
* | 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.
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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 on a fund’s Statement of Operations. For information regarding the trustees, please refer to the 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 an interest expense, which is disclosed on a fund’s 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, 2014, 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 | $56,647,883 | $60,285,000 | ||||||
Schwab MarketTrack Growth Portfolio | 58,856,333 | 50,880,000 | ||||||
Schwab MarketTrack Balanced Portfolio | 94,354,961 | 81,825,000 | ||||||
Schwab MarketTrack Conservative Portfolio | 31,020,439 | 19,735,000 |
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 on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/13-10/31/14) | (11/1/12-10/31/13) | |||||||
Schwab MarketTrack All Equity Portfolio | $12,743 | $15,578 | ||||||
Schwab MarketTrack Growth Portfolio | 11,814 | 4,885 | ||||||
Schwab MarketTrack Balanced Portfolio | 10,547 | 4,993 | ||||||
Schwab MarketTrack Conservative Portfolio | 1,606 | 4,449 |
9. Federal Income Taxes:
As of October 31, 2014, 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 | $8,345,966 | $— | $3,045,735 | $150,423 | ||||||||||||
Undistributed long-term capital gains | — | 12,406,539 | 7,172,497 | — | ||||||||||||
Unrealized appreciation on investments | 217,169,893 | 293,523,010 | 168,938,038 | 47,061,865 | ||||||||||||
Other unrealized appreciation (depreciation) | — | — | (1 | ) | — | |||||||||||
Net unrealized appreciation (depreciation) | $217,169,893 | $293,523,010 | $168,938,037 | $47,061,865 | ||||||||||||
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Schwab MarketTrack Portfolios
Financial Notes (continued)
9. Federal Income Taxes (continued):
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2014, 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, 2017 | $21,221,169 | $— | $— | $838,110 | ||||||||||||
October 31, 2018 | 8,349,147 | — | — | — | ||||||||||||
Total | $29,570,316 | $— | $— | $838,110 | ||||||||||||
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 next taxable year. For the year ended October 31, 2014, the funds had late-year ordinary losses deferred and capital loss carryforwards 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 | $— | $966,909 | $— | $— | ||||||||||||
Capital loss carryforwards utilized | 15,999,065 | 1,536,411 | — | 2,025,327 |
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 | $9,729,315 | $9,625,225 | $6,922,856 | $3,306,277 | ||||||||||||
Long-term capital gains | — | — | 3,022,728 | — | ||||||||||||
Return of capital | — | — | — | — | ||||||||||||
Prior period distributions | ||||||||||||||||
Ordinary income | $12,561,634 | $10,641,577 | $8,153,238 | $3,392,046 | ||||||||||||
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.
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Schwab MarketTrack Portfolios
Financial Notes (continued)
9. Federal Income Taxes (continued):
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, 2014, the funds made the following reclassifications:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Capital shares | $— | $— | $— | $— | ||||||||||||
Undistributed net investment income | 768,813 | 711,956 | 377,775 | 104,779 | ||||||||||||
Net realized capital gains (losses) | (768,813 | ) | (711,956 | ) | (377,775 | ) | (104,779 | ) |
As of October 31, 2014, 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, 2014, the funds did not incur any interest or penalties.
10. Subsequent Events:
Under an amendment approved by the Board of Trustees of the Trust on September 25, 2014, and effective December 1, 2014, the management fee paid to CSIM will be reduced from 0.23% to 0.13%. In addition, commencing in early December 2014, each fund’s respective investment strategy will be modified for its target class allocations, underlying fund selections and underlying fund target weightings. Management expects the modifications to be completed by the end of February 2015 or possibly sooner (depending on market conditions). Other than these modifications, 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, 2014, 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, 2014 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 16, 2014
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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, 2014, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab MarketTrack All Equity Portfolio | 64.97 | ||||
Schwab MarketTrack Growth Portfolio | 59.44 | ||||
Schwab MarketTrack Balanced Portfolio | 36.38 | ||||
Schwab MarketTrack Conservative Portfolio | 26.86 |
For the fiscal year ended October 31, 2014, 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 2015 via IRS form 1099 of the amounts for use in preparing their 2014 income tax return.
Schwab MarketTrack All Equity Portfolio | $9,729,315 | |||
Schwab MarketTrack Growth Portfolio | 8,667,323 | |||
Schwab MarketTrack Balanced Portfolio | 3,796,619 | |||
Schwab MarketTrack Conservative Portfolio | 1,346,041 |
Under Section 852 (b)(3)(C) of the Internal Revenue Code, the Schwab MarketTrack Balanced Portfolio hereby designates $3,022,728 as long-term capital gain dividends for the fiscal year ended October 31, 2014.
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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 30, 2014, and June 3, 2014, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 3, 2014. 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
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such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Although the Funds 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 Agreements with respect to the Funds, 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 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 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.
At a meeting held on September 23, 2014, the Board approved a reduction to the investment advisory fee for each Fund.
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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 97 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) | |||
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) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – Sept. 2013). | 76 | Director, KLA-Tencor Corporation (2008 – present) | |||
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, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) | |||
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) | |||
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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. | 97 | 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 Investment Management, 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; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (January 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010). | |
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). | |
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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 | |
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 Effective March 1, 2014, the All Equity Composite Index is composed of 45% S&P 500 Index, 25% Russell 2000 Index, 30% MSCI EAFE Index (Net), and 0.5% Barclays U.S.Treasury Bills: 1 − 3 Months. Prior to March 1, 2014, the All Equity Composite Index was composed of 70% Dow Jones U.S. Total Stock Market Index and 30% MSCI EAFE Index (Net).
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 Effective March 1, 2014, the Balanced Composite Index is composed of 30% S&P 500 Index, 15% Russell 2000 Index, 15% MSCI EAFE Index (Net), 35% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S.Treasury Bills: 1 − 3 Months. Prior to March 1, 2014, the Balanced Composite Index was composed of 45% Dow Jones U.S. Total Stock Market Index, 15% MSCI EAFE (Net) Index, 35% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1 − 3 Months 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. 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.
Barclays U.S. Treasury Index An unmanaged index of public obligations of the U.S. Treasury with remaining maturities of one year or more.
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 Effective March 1, 2014, the Conservative Composite Index is composed of 20% S&P 500 Index, 10% Russell 2000 Index, 10% MSCI EAFE Index (Net), 55% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1 − 3 Months. Prior to March 1, 2014, the Conservative Composite Index was composed of 30% Dow Jones U.S. Total Stock Market Index, 10% MSCI EAFE (Net) Index, 55% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1 − 3 Months.
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 Effective March 1, 2014, the Growth Composite Index is composed of 40% S&P 500 Index, 20% Russell 2000 Index, 20% MSCI EAFE Index (Net), 15% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S.Treasury Bills: 1 − 3 Months. Prior to March 1, 2014, the Growth Composite Index was composed of 60% Dow Jones U.S. Total Stock Market Index, 20% MSCI EAFE (Net) Index, 15% Barclays U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1 − 3 Months.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. 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.
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
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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.
• | 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 go to www.schwab.com/privacy.
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
© 2014 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 the 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 Fundamental Global Real Estate 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/0000950123-15-000008/f30296ctschwab02.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.
© 2014 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
MFR13813-17
00128294
00128294
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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 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 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-eight series. Thirty-four series have a fiscal year-end of October 31, whose annual financial statements are reported in Item 1, three series have a fiscal year-end of December 31, and one series has a fiscal year-end of February 28. 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 2014 and 2013 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
2014: $1,301,980 2013: $1,256,737
(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:
2014: $88,798 2013: $82,933
Nature of these services: tax provision review
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:
2014: $108,614 2013: $90,938
Nature of these services: preparation and review of tax returns and consultation of Indian capital gains.
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.
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All Other Fees
For services rendered to Registrant:
2014: $5,251 2013: $12,171
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.
2014: $202,663 2013: $186,042
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 |
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committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence. |
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
Except as noted below, the condensed schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form. The schedules of investments for the Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small 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 and Schwab International Index Fund are filed under this Item.
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Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .5% | Common Stock | 11,021,049,498 | 19,950,703,019 | ||||||||
0 | .1% | Other Investment Company | 29,007,003 | 29,007,003 | ||||||||
2 | .3% | Short-Term Investments | 479,925,014 | 479,925,014 | ||||||||
99 | .9% | Total Investments | 11,529,981,515 | 20,459,635,036 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 13,654,324 | |||||||||
100 | .0% | Net Assets | 20,473,289,360 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.5% of net assets | ||||||||
Automobiles & Components 1.0% | ||||||||
BorgWarner, Inc. | 241,400 | 13,764,628 | ||||||
Delphi Automotive plc | 313,200 | 21,604,536 | ||||||
Ford Motor Co. | 4,367,797 | 61,542,260 | ||||||
General Motors Co. | 1,501,600 | 47,150,240 | ||||||
Harley-Davidson, Inc. | 246,470 | 16,193,079 | ||||||
Johnson Controls, Inc. | 733,559 | 34,660,663 | ||||||
The Goodyear Tire & Rubber Co. | 304,936 | 7,388,599 | ||||||
202,304,005 | ||||||||
Banks 5.9% | ||||||||
Bank of America Corp. | 11,678,311 | 200,399,817 | ||||||
BB&T Corp. | 793,626 | 30,062,553 | ||||||
Citigroup, Inc. | 3,375,447 | 180,687,678 | ||||||
Comerica, Inc. | 188,270 | 8,988,010 | ||||||
Fifth Third Bancorp | 991,829 | 19,826,662 | ||||||
Hudson City Bancorp, Inc. | 481,992 | 4,651,223 | ||||||
Huntington Bancshares, Inc. | 989,593 | 9,806,866 | ||||||
JPMorgan Chase & Co. | 4,202,531 | 254,169,075 | ||||||
KeyCorp | 941,198 | 12,423,813 | ||||||
M&T Bank Corp. | 138,598 | 16,933,904 | ||||||
People’s United Financial, Inc. | 343,300 | 5,019,046 | ||||||
Regions Financial Corp. | 1,567,445 | 15,564,729 | ||||||
SunTrust Banks, Inc. | 602,116 | 23,566,820 | ||||||
The PNC Financial Services Group, Inc. | 589,978 | 50,968,199 | ||||||
U.S. Bancorp | 2,027,928 | 86,389,733 | ||||||
Wells Fargo & Co. | 5,272,309 | 279,906,885 | ||||||
Zions Bancorp | 215,698 | 6,248,771 | ||||||
1,205,613,784 | ||||||||
Capital Goods 7.4% | ||||||||
3M Co. | 726,719 | 111,747,581 | ||||||
Allegion plc | 96,933 | 5,146,173 | ||||||
AMETEK, Inc. | 260,300 | 13,574,645 | ||||||
Caterpillar, Inc. | 693,162 | 70,293,558 | ||||||
Cummins, Inc. | 188,862 | 27,607,847 | ||||||
Danaher Corp. | 664,474 | 53,423,710 | ||||||
Deere & Co. | 411,386 | 35,189,958 | ||||||
Dover Corp. | 182,470 | 14,495,417 | ||||||
Eaton Corp. plc | 529,538 | 36,215,104 | ||||||
Emerson Electric Co. | 775,115 | 49,653,867 | ||||||
Fastenal Co. | 301,598 | 13,282,376 | ||||||
Flowserve Corp. | 150,300 | 10,218,897 | ||||||
Fluor Corp. | 191,882 | 12,729,452 | ||||||
General Dynamics Corp. | 363,360 | 50,783,194 | ||||||
General Electric Co. | 11,121,452 | 287,044,676 | ||||||
Honeywell International, Inc. | 865,029 | 83,146,588 | ||||||
Illinois Tool Works, Inc. | 417,936 | 38,053,073 | ||||||
Ingersoll-Rand plc | 290,800 | 18,209,896 | ||||||
Jacobs Engineering Group, Inc. * | 137,934 | 6,544,968 | ||||||
Joy Global, Inc. | 113,200 | 5,957,716 | ||||||
L-3 Communications Holdings, Inc. | 97,283 | 11,815,993 | ||||||
Lockheed Martin Corp. | 296,391 | 56,483,233 | ||||||
Masco Corp. | 382,388 | 8,439,303 | ||||||
Northrop Grumman Corp. | 242,467 | 33,450,747 | ||||||
PACCAR, Inc. | 394,550 | 25,772,006 | ||||||
Pall Corp. | 126,730 | 11,585,657 | ||||||
Parker-Hannifin Corp. | 164,536 | 20,901,008 | ||||||
Pentair plc | 208,982 | 14,012,243 | ||||||
Precision Castparts Corp. | 161,527 | 35,649,009 | ||||||
Quanta Services, Inc. * | 231,900 | 7,903,152 | ||||||
Raytheon Co. | 348,488 | 36,200,933 | ||||||
Rockwell Automation, Inc. | 150,521 | 16,911,034 | ||||||
Rockwell Collins, Inc. | 147,405 | 12,404,131 | ||||||
Roper Industries, Inc. | 110,200 | 17,444,660 | ||||||
Snap-on, Inc. | 66,282 | 8,758,503 | ||||||
Stanley Black & Decker, Inc. | 166,181 | 15,561,189 | ||||||
Textron, Inc. | 292,004 | 12,126,926 | ||||||
The Boeing Co. | 747,654 | 93,389,461 | ||||||
United Rentals, Inc. * | 110,100 | 12,117,606 | ||||||
United Technologies Corp. | 931,635 | 99,684,945 | ||||||
W.W. Grainger, Inc. | 65,927 | 16,270,784 | ||||||
Xylem, Inc. | 197,600 | 7,184,736 | ||||||
1,517,385,955 | ||||||||
Commercial & Professional Supplies 0.6% | ||||||||
Cintas Corp. | 111,376 | 8,157,178 | ||||||
Equifax, Inc. | 136,561 | 10,343,130 | ||||||
Nielsen N.V. | 334,800 | 14,225,652 | ||||||
Pitney Bowes, Inc. | 231,591 | 5,729,561 | ||||||
Republic Services, Inc. | 289,334 | 11,110,426 | ||||||
Robert Half International, Inc. | 139,442 | 7,638,633 | ||||||
Stericycle, Inc. * | 89,400 | 11,264,400 | ||||||
The ADT Corp. | 194,500 | 6,970,880 | ||||||
The Dun & Bradstreet Corp. | 46,500 | 5,710,665 |
See financial notes 1
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Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tyco International Ltd. | 509,500 | 21,872,835 | ||||||
Waste Management, Inc. | 477,916 | 23,365,313 | ||||||
126,388,673 | ||||||||
Consumer Durables & Apparel 1.3% | ||||||||
Coach, Inc. | 299,728 | 10,304,649 | ||||||
D.R. Horton, Inc. | 339,216 | �� | 7,730,733 | |||||
Fossil Group, Inc. * | 54,900 | 5,581,134 | ||||||
Garmin Ltd. (b) | 131,100 | 7,273,428 | ||||||
Harman International Industries, Inc. | 86,656 | 9,301,655 | ||||||
Hasbro, Inc. | 121,717 | 7,002,379 | ||||||
Leggett & Platt, Inc. | 157,894 | 6,217,866 | ||||||
Lennar Corp., Class A | 193,818 | 8,349,679 | ||||||
Mattel, Inc. | 384,094 | 11,933,801 | ||||||
Michael Kors Holdings Ltd. * | 230,600 | 18,122,854 | ||||||
Mohawk Industries, Inc. * | 65,300 | 9,275,212 | ||||||
Newell Rubbermaid, Inc. | 327,150 | 10,903,909 | ||||||
NIKE, Inc., Class B | 786,824 | 73,151,027 | ||||||
PulteGroup, Inc. | 370,186 | 7,103,869 | ||||||
PVH Corp. | 91,000 | 10,405,850 | ||||||
Ralph Lauren Corp. | 62,826 | 10,356,238 | ||||||
Under Armour, Inc., Class A * | 189,600 | 12,433,968 | ||||||
VF Corp. | 377,164 | 25,526,460 | ||||||
Whirlpool Corp. | 83,322 | 14,335,550 | ||||||
265,310,261 | ||||||||
Consumer Services 1.6% | ||||||||
Carnival Corp. | 484,421 | 19,449,503 | ||||||
Chipotle Mexican Grill, Inc. * | 33,959 | 21,665,842 | ||||||
Darden Restaurants, Inc. | 145,748 | 7,546,831 | ||||||
H&R Block, Inc. | 286,205 | 9,247,284 | ||||||
Marriott International, Inc., Class A | 254,872 | 19,306,554 | ||||||
McDonald’s Corp. | 1,101,738 | 103,265,903 | ||||||
Starbucks Corp. | 831,562 | 62,832,825 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 215,468 | 16,517,777 | ||||||
Wyndham Worldwide Corp. | 148,464 | 11,531,199 | ||||||
Wynn Resorts Ltd. | 87,800 | 16,682,878 | ||||||
Yum! Brands, Inc. | 487,585 | 35,023,230 | ||||||
323,069,826 | ||||||||
Diversified Financials 5.1% | ||||||||
Affiliated Managers Group, Inc. * | 61,000 | 12,187,190 | ||||||
American Express Co. | 993,341 | 89,351,023 | ||||||
Ameriprise Financial, Inc. | 218,114 | 27,519,443 | ||||||
Berkshire Hathaway, Inc., Class B * | 2,022,430 | 283,463,789 | ||||||
BlackRock, Inc. | 138,200 | 47,141,402 | ||||||
Capital One Financial Corp. | 635,774 | 52,623,014 | ||||||
CME Group, Inc. | 361,785 | 30,321,201 | ||||||
Discover Financial Services | 524,873 | 33,476,400 | ||||||
E*TRADE Financial Corp. * | 307,619 | 6,859,904 | ||||||
Franklin Resources, Inc. | 451,605 | 25,113,754 | ||||||
Intercontinental Exchange, Inc. | 126,066 | 26,258,287 | ||||||
Invesco Ltd. | 461,447 | 18,674,760 | ||||||
Legg Mason, Inc. | 113,698 | 5,912,296 | ||||||
Leucadia National Corp. | 333,951 | 7,941,355 | ||||||
McGraw Hill Financial, Inc. | 297,567 | 26,923,862 | ||||||
Moody’s Corp. | 211,829 | 21,019,792 | ||||||
Morgan Stanley | 1,702,454 | 59,500,767 | ||||||
Navient Corp. | 465,000 | 9,197,700 | ||||||
Northern Trust Corp. | 240,518 | 15,946,343 | ||||||
State Street Corp. | 477,026 | 35,996,382 | ||||||
T. Rowe Price Group, Inc. | 290,179 | 23,820,794 | ||||||
The Bank of New York Mellon Corp. | 1,259,673 | 48,774,539 | ||||||
The Charles Schwab Corp. (a) | 1,302,581 | 37,344,997 | ||||||
The Goldman Sachs Group, Inc. | 462,669 | 87,902,483 | ||||||
The NASDAQ OMX Group, Inc. | 119,900 | 5,186,874 | ||||||
1,038,458,351 | ||||||||
Energy 9.0% | ||||||||
Anadarko Petroleum Corp. | 557,909 | 51,204,888 | ||||||
Apache Corp. | 430,306 | 33,219,623 | ||||||
Baker Hughes, Inc. | 494,763 | 26,202,648 | ||||||
Cabot Oil & Gas Corp. | 460,900 | 14,333,990 | ||||||
Cameron International Corp. * | 225,500 | 13,428,525 | ||||||
Chesapeake Energy Corp. | 577,766 | 12,814,850 | ||||||
Chevron Corp. | 2,114,734 | 253,662,343 | ||||||
Cimarex Energy Co. | 96,100 | 10,923,687 | ||||||
ConocoPhillips | 1,368,090 | 98,707,693 | ||||||
CONSOL Energy, Inc. | 264,418 | 9,730,582 | ||||||
Denbury Resources, Inc. | 377,200 | 4,677,280 | ||||||
Devon Energy Corp. | 417,758 | 25,065,480 | ||||||
Diamond Offshore Drilling, Inc. (b) | 65,300 | 2,462,463 | ||||||
Ensco plc, Class A | 258,200 | 10,480,338 | ||||||
EOG Resources, Inc. | 603,612 | 57,373,321 | ||||||
EQT Corp. | 163,700 | 15,394,348 | ||||||
Exxon Mobil Corp. | 4,749,241 | 459,299,097 | ||||||
FMC Technologies, Inc. * | 275,300 | 15,427,812 | ||||||
Halliburton Co. | 932,868 | 51,438,342 | ||||||
Helmerich & Payne, Inc. | 118,300 | 10,270,806 | ||||||
Hess Corp. | 291,540 | 24,725,507 | ||||||
Kinder Morgan, Inc. (b) | 738,044 | 28,562,303 | ||||||
Marathon Oil Corp. | 741,452 | 26,247,401 | ||||||
Marathon Petroleum Corp. | 316,626 | 28,781,303 | ||||||
Murphy Oil Corp. | 184,892 | 9,871,384 | ||||||
Nabors Industries Ltd. | 328,490 | 5,863,547 | ||||||
National Oilwell Varco, Inc. | 486,724 | 35,355,631 | ||||||
Newfield Exploration Co. * | 145,600 | 4,748,016 | ||||||
Noble Corp., plc | 310,100 | 6,487,292 | ||||||
Noble Energy, Inc. | 398,368 | 22,957,948 | ||||||
Occidental Petroleum Corp. | 867,750 | 77,169,008 | ||||||
ONEOK, Inc. | 231,100 | 13,621,034 | ||||||
Phillips 66 | 624,995 | 49,062,108 | ||||||
Pioneer Natural Resources Co. | 158,000 | 29,871,480 | ||||||
QEP Resources, Inc. | 186,091 | 4,665,301 | ||||||
Range Resources Corp. | 191,200 | 13,078,080 | ||||||
Schlumberger Ltd. | 1,447,415 | 142,801,964 | ||||||
Southwestern Energy Co. * | 390,000 | 12,678,900 | ||||||
Spectra Energy Corp. | 740,809 | 28,987,856 | ||||||
Tesoro Corp. | 138,207 | 9,869,362 | ||||||
The Williams Cos., Inc. | 749,598 | 41,610,185 | ||||||
Transocean Ltd. (b) | 360,000 | 10,738,800 | ||||||
Valero Energy Corp. | 589,440 | 29,525,050 | ||||||
1,833,397,576 |
2 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food & Staples Retailing 2.2% | ||||||||
Costco Wholesale Corp. | 488,892 | 65,203,526 | ||||||
CVS Health Corp. | 1,291,551 | 110,827,991 | ||||||
Safeway, Inc. | 266,496 | 9,290,051 | ||||||
Sysco Corp. | 645,657 | 24,883,621 | ||||||
The Kroger Co. | 541,647 | 30,175,154 | ||||||
Wal-Mart Stores, Inc. | 1,750,302 | 133,495,534 | ||||||
Walgreen Co. | 969,811 | 62,281,262 | ||||||
Whole Foods Market, Inc. | 396,932 | 15,611,336 | ||||||
451,768,475 | ||||||||
Food, Beverage & Tobacco 5.2% | ||||||||
Altria Group, Inc. | 2,209,791 | 106,821,297 | ||||||
Archer-Daniels-Midland Co. | 724,799 | 34,065,553 | ||||||
Brown-Forman Corp., Class B | 179,092 | 16,596,456 | ||||||
Campbell Soup Co. | 188,711 | 8,335,365 | ||||||
Coca-Cola Enterprises, Inc. | 258,662 | 11,212,998 | ||||||
ConAgra Foods, Inc. | 476,949 | 16,383,198 | ||||||
Constellation Brands, Inc., Class A * | 186,465 | 17,069,006 | ||||||
Dr Pepper Snapple Group, Inc. | 219,200 | 15,179,600 | ||||||
General Mills, Inc. | 674,280 | 35,035,589 | ||||||
Hormel Foods Corp. | 144,300 | 7,779,213 | ||||||
Kellogg Co. | 294,334 | 18,825,603 | ||||||
Keurig Green Mountain, Inc. | 132,600 | 20,122,050 | ||||||
Kraft Foods Group, Inc. | 657,518 | 37,051,139 | ||||||
Lorillard, Inc. | 405,091 | 24,913,097 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 156,502 | 11,067,821 | ||||||
Mead Johnson Nutrition Co. | 223,200 | 22,165,992 | ||||||
Molson Coors Brewing Co., Class B | 178,430 | 13,271,623 | ||||||
Mondelez International, Inc., Class A | 1,881,354 | 66,336,542 | ||||||
Monster Beverage Corp. * | 160,100 | 16,150,888 | ||||||
PepsiCo, Inc. | 1,685,563 | 162,100,594 | ||||||
Philip Morris International, Inc. | 1,733,446 | 154,294,028 | ||||||
Reynolds American, Inc. | 343,696 | 21,621,915 | ||||||
The Coca-Cola Co. | 4,371,456 | 183,076,577 | ||||||
The Hershey Co. | 170,528 | 16,355,340 | ||||||
The JM Smucker Co. | 124,275 | 12,924,600 | ||||||
Tyson Foods, Inc., Class A | 330,290 | 13,327,202 | ||||||
1,062,083,286 | ||||||||
Health Care Equipment & Services 4.4% | ||||||||
Abbott Laboratories | 1,669,286 | 72,764,177 | ||||||
Aetna, Inc. | 401,775 | 33,150,455 | ||||||
AmerisourceBergen Corp. | 247,246 | 21,117,281 | ||||||
Baxter International, Inc. | 605,089 | 42,440,942 | ||||||
Becton, Dickinson & Co. | 213,390 | 27,463,293 | ||||||
Boston Scientific Corp. * | 1,434,274 | 19,047,159 | ||||||
C.R. Bard, Inc. | 84,373 | 13,834,641 | ||||||
Cardinal Health, Inc. | 378,733 | 29,722,966 | ||||||
CareFusion Corp. * | 231,766 | 13,296,415 | ||||||
Cerner Corp. * | 329,600 | 20,876,864 | ||||||
Cigna Corp. | 293,308 | 29,204,678 | ||||||
Covidien plc | 497,200 | 45,961,168 | ||||||
DaVita HealthCare Partners, Inc. * | 203,500 | 15,887,245 | ||||||
DENTSPLY International, Inc. | 149,900 | 7,610,423 | ||||||
Edwards Lifesciences Corp. * | 115,800 | 14,002,536 | ||||||
Express Scripts Holding Co. * | 826,095 | 63,460,618 | ||||||
Humana, Inc. | 175,903 | 24,424,132 | ||||||
Intuitive Surgical, Inc. * | 41,131 | 20,392,750 | ||||||
Laboratory Corp. of America Holdings * | 97,291 | 10,632,933 | ||||||
McKesson Corp. | 254,675 | 51,803,442 | ||||||
Medtronic, Inc. | 1,103,439 | 75,210,402 | ||||||
Patterson Cos., Inc. | 83,947 | 3,618,955 | ||||||
Quest Diagnostics, Inc. | 156,880 | 9,955,605 | ||||||
St. Jude Medical, Inc. | 327,187 | 20,995,590 | ||||||
Stryker Corp. | 326,640 | 28,590,799 | ||||||
Tenet Healthcare Corp. * | 112,904 | 6,328,269 | ||||||
UnitedHealth Group, Inc. | 1,086,310 | 103,210,313 | ||||||
Universal Health Services, Inc., Class B | 100,800 | 10,453,968 | ||||||
Varian Medical Systems, Inc. * | 110,706 | 9,312,589 | ||||||
WellPoint, Inc. | 301,929 | 38,251,385 | ||||||
Zimmer Holdings, Inc. | 185,323 | 20,615,330 | ||||||
903,637,323 | ||||||||
Household & Personal Products 2.0% | ||||||||
Avon Products, Inc. | 481,920 | 5,011,968 | ||||||
Colgate-Palmolive Co. | 960,594 | 64,244,527 | ||||||
Kimberly-Clark Corp. | 424,195 | 48,472,763 | ||||||
The Clorox Co. | 140,857 | 14,015,272 | ||||||
The Estee Lauder Cos., Inc., Class A | 251,952 | 18,941,751 | ||||||
The Procter & Gamble Co. | 3,009,890 | 262,673,100 | ||||||
413,359,381 | ||||||||
Insurance 2.7% | ||||||||
ACE Ltd. | 373,000 | 40,768,900 | ||||||
Aflac, Inc. | 507,573 | 30,317,335 | ||||||
American International Group, Inc. | 1,605,854 | 86,025,599 | ||||||
Aon plc | 323,350 | 27,808,100 | ||||||
Assurant, Inc. | 89,346 | 6,095,184 | ||||||
Cincinnati Financial Corp. | 155,203 | 7,833,095 | ||||||
Genworth Financial, Inc., Class A * | 548,164 | 7,668,814 | �� | |||||
Lincoln National Corp. | 294,671 | 16,136,184 | ||||||
Loews Corp. | 324,016 | 14,127,098 | ||||||
Marsh & McLennan Cos., Inc. | 607,079 | 33,006,885 | ||||||
MetLife, Inc. | 1,243,277 | 67,435,345 | ||||||
Principal Financial Group, Inc. | 288,467 | 15,107,017 | ||||||
Prudential Financial, Inc. | 504,531 | 44,671,175 | ||||||
The Allstate Corp. | 501,310 | 32,509,954 | ||||||
The Chubb Corp. | 267,893 | 26,617,848 | ||||||
The Hartford Financial Services Group, Inc. | 521,095 | 20,624,940 | ||||||
The Progressive Corp. | 600,020 | 15,846,528 | ||||||
The Travelers Cos., Inc. | 368,360 | 37,130,688 | ||||||
Torchmark Corp. | 143,266 | 7,587,367 | ||||||
Unum Group | 276,440 | 9,249,682 | ||||||
XL Group plc | 312,199 | 10,577,302 | ||||||
557,145,040 |
See financial notes 3
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 3.2% | ||||||||
Air Products & Chemicals, Inc. | 212,401 | 28,601,919 | ||||||
Airgas, Inc. | 75,000 | 8,365,500 | ||||||
Alcoa, Inc. | 1,303,564 | 21,847,733 | ||||||
Allegheny Technologies, Inc. | 126,170 | 4,144,685 | ||||||
Avery Dennison Corp. | 103,076 | 4,829,111 | ||||||
Ball Corp. | 152,738 | 9,840,909 | ||||||
Bemis Co., Inc. | 116,535 | 4,483,101 | ||||||
CF Industries Holdings, Inc. | 57,525 | 14,956,500 | ||||||
E.I. du Pont de Nemours & Co. | 1,020,404 | 70,560,937 | ||||||
Eastman Chemical Co. | 172,716 | 13,951,999 | ||||||
Ecolab, Inc. | 298,428 | 33,194,146 | ||||||
FMC Corp. | 158,300 | 9,078,505 | ||||||
Freeport-McMoRan, Inc. | 1,152,240 | 32,838,840 | ||||||
International Flavors & Fragrances, Inc. | 89,743 | 8,898,018 | ||||||
International Paper Co. | 493,989 | 25,005,723 | ||||||
LyondellBasell Industries N.V., Class A | 472,100 | 43,258,523 | ||||||
Martin Marietta Materials, Inc. | 67,000 | 7,833,640 | ||||||
MeadWestvaco Corp. | 181,650 | 8,023,481 | ||||||
Monsanto Co. | 579,000 | 66,608,160 | ||||||
Newmont Mining Corp. | 550,646 | 10,330,119 | ||||||
Nucor Corp. | 351,800 | 19,018,308 | ||||||
Owens-Illinois, Inc. * | 157,500 | 4,058,775 | ||||||
PPG Industries, Inc. | 152,248 | 31,011,395 | ||||||
Praxair, Inc. | 323,579 | 40,767,718 | ||||||
Sealed Air Corp. | 236,068 | 8,557,465 | ||||||
Sigma-Aldrich Corp. | 127,254 | 17,295,091 | ||||||
The Dow Chemical Co. | 1,247,035 | 61,603,529 | ||||||
The Mosaic Co. | 363,000 | 16,084,530 | ||||||
The Sherwin-Williams Co. | 97,636 | 22,413,320 | ||||||
Vulcan Materials Co. | 151,071 | 9,322,591 | ||||||
656,784,271 | ||||||||
Media 3.4% | ||||||||
Cablevision Systems Corp., Class A | 220,000 | 4,096,400 | ||||||
CBS Corp., Class B - Non Voting Shares | 540,636 | 29,313,284 | ||||||
Comcast Corp., Class A | 2,889,664 | 159,942,902 | ||||||
DIRECTV * | 556,602 | 48,307,488 | ||||||
Discovery Communications, Inc., Class A * | 192,700 | 6,811,945 | ||||||
Discovery Communications, Inc., Class C * | 277,100 | 9,695,729 | ||||||
Gannett Co., Inc. | 237,514 | 7,481,691 | ||||||
News Corp., Class A * | 616,300 | 9,540,324 | ||||||
Omnicom Group, Inc. | 280,047 | 20,124,177 | ||||||
Scripps Networks Interactive, Inc., Class A | 116,593 | 9,005,643 | ||||||
The Interpublic Group of Cos., Inc. | 454,565 | 8,814,015 | ||||||
The Walt Disney Co. | 1,751,583 | 160,059,655 | ||||||
Time Warner Cable, Inc. | 306,801 | 45,164,175 | ||||||
Time Warner, Inc. | 951,074 | 75,581,851 | ||||||
Twenty-First Century Fox, Inc., Class A | 2,094,801 | 72,228,739 | ||||||
Viacom, Inc., Class B | 431,253 | 31,343,468 | ||||||
697,511,486 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.5% | ||||||||
AbbVie, Inc. | 1,756,386 | 111,460,256 | ||||||
Actavis plc * | 292,394 | 70,975,720 | ||||||
Agilent Technologies, Inc. | 376,466 | 20,811,040 | ||||||
Alexion Pharmaceuticals, Inc. * | 218,500 | 41,812,160 | ||||||
Allergan, Inc. | 330,758 | 62,863,865 | ||||||
Amgen, Inc. | 843,159 | 136,743,527 | ||||||
Biogen Idec, Inc. * | 261,991 | 84,120,070 | ||||||
Bristol-Myers Squibb Co. | 1,830,464 | 106,514,700 | ||||||
Celgene Corp. * | 893,826 | 95,719,826 | ||||||
Eli Lilly & Co. | 1,088,123 | 72,175,199 | ||||||
Gilead Sciences, Inc. * | 1,684,050 | 188,613,600 | ||||||
Hospira, Inc. * | 178,482 | 9,584,483 | ||||||
Johnson & Johnson | 3,145,925 | 339,067,797 | ||||||
Mallinckrodt plc * | 125,000 | 11,522,500 | ||||||
Merck & Co., Inc. | 3,211,014 | 186,046,151 | ||||||
Mylan, Inc. * | 404,751 | 21,674,416 | ||||||
PerkinElmer, Inc. | 141,360 | 6,137,851 | ||||||
Perrigo Co., plc | 153,900 | 24,847,155 | ||||||
Pfizer, Inc. | 7,089,733 | 212,337,503 | ||||||
Regeneron Pharmaceuticals, Inc. * | 82,700 | 32,560,644 | ||||||
Thermo Fisher Scientific, Inc. | 440,637 | 51,805,692 | ||||||
Vertex Pharmaceuticals, Inc. * | 260,900 | 29,387,776 | ||||||
Waters Corp. * | 92,152 | 10,210,442 | ||||||
Zoetis, Inc. | 553,400 | 20,564,344 | ||||||
1,947,556,717 | ||||||||
Real Estate 2.3% | ||||||||
American Tower Corp. | 437,100 | 42,617,250 | ||||||
Apartment Investment & Management Co., Class A | 149,714 | 5,358,264 | ||||||
AvalonBay Communities, Inc. | 138,599 | 21,599,268 | ||||||
Boston Properties, Inc. | 165,976 | 21,037,458 | ||||||
CBRE Group, Inc., Class A * | 307,440 | 9,838,080 | ||||||
Crown Castle International Corp. | 362,300 | 28,302,876 | ||||||
Equity Residential | 410,522 | 28,555,910 | ||||||
Essex Property Trust, Inc. | 67,000 | 13,517,920 | ||||||
General Growth Properties, Inc. | 736,000 | 19,069,760 | ||||||
HCP, Inc. | 506,100 | 22,253,217 | ||||||
Health Care REIT, Inc. | 362,800 | 25,798,708 | ||||||
Host Hotels & Resorts, Inc. | 810,111 | 18,883,688 | ||||||
Iron Mountain, Inc. | 191,360 | 6,902,355 | ||||||
Kimco Realty Corp. | 496,859 | 12,396,632 | ||||||
Plum Creek Timber Co., Inc. | 203,177 | 8,332,289 | ||||||
Prologis, Inc. | 536,789 | 22,357,262 | ||||||
Public Storage | 158,978 | 29,306,005 | ||||||
Simon Property Group, Inc. | 340,853 | 61,084,266 | ||||||
The Macerich Co. | 166,700 | 11,752,350 | ||||||
Ventas, Inc. | 325,100 | 22,272,601 | ||||||
Vornado Realty Trust | 202,756 | 22,197,727 | ||||||
Weyerhaeuser Co. | 634,040 | 21,468,594 | ||||||
474,902,480 | ||||||||
Retailing 4.1% | ||||||||
Amazon.com, Inc. * | 421,980 | 128,898,011 | ||||||
AutoNation, Inc. * | 91,733 | 5,252,632 | ||||||
AutoZone, Inc. * | 36,498 | 20,202,373 |
4 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Bed Bath & Beyond, Inc. * | 226,869 | 15,277,358 | ||||||
Best Buy Co., Inc. | 327,357 | 11,175,968 | ||||||
CarMax, Inc. * | 239,200 | 13,373,672 | ||||||
Dollar General Corp. * | 335,000 | 20,994,450 | ||||||
Dollar Tree, Inc. * | 230,600 | 13,967,442 | ||||||
Expedia, Inc. | 114,513 | 9,730,170 | ||||||
Family Dollar Stores, Inc. | 110,830 | 8,676,881 | ||||||
GameStop Corp., Class A | 119,100 | 5,092,716 | ||||||
Genuine Parts Co. | 177,738 | 17,254,805 | ||||||
Kohl’s Corp. | 213,210 | 11,560,246 | ||||||
L Brands, Inc. | 261,235 | 18,840,268 | ||||||
Lowe’s Cos., Inc. | 1,104,888 | 63,199,594 | ||||||
Macy’s, Inc. | 399,926 | 23,123,721 | ||||||
Netflix, Inc. * | 66,900 | 26,276,313 | ||||||
Nordstrom, Inc. | 151,296 | 10,985,603 | ||||||
O’Reilly Automotive, Inc. * | 116,800 | 20,542,784 | ||||||
PetSmart, Inc. | 106,900 | 7,734,215 | ||||||
Ross Stores, Inc. | 227,200 | 18,339,584 | ||||||
Staples, Inc. | 715,869 | 9,077,219 | ||||||
Target Corp. | 699,708 | 43,255,948 | ||||||
The Gap, Inc. | 294,662 | 11,164,743 | ||||||
The Home Depot, Inc. | 1,500,150 | 146,294,628 | ||||||
The Priceline Group, Inc. * | 57,915 | 69,857,652 | ||||||
The TJX Cos., Inc. | 783,406 | 49,605,268 | ||||||
Tiffany & Co. | 125,428 | 12,056,139 | ||||||
Tractor Supply Co. | 150,000 | 10,983,000 | ||||||
TripAdvisor, Inc. * | 129,813 | 11,509,221 | ||||||
Urban Outfitters, Inc. * | 111,100 | 3,372,996 | ||||||
837,675,620 | ||||||||
Semiconductors & Semiconductor Equipment 2.3% | ||||||||
Altera Corp. | 329,046 | 11,309,311 | ||||||
Analog Devices, Inc. | 348,154 | 17,275,401 | ||||||
Applied Materials, Inc. | 1,389,972 | 30,704,481 | ||||||
Avago Technologies Ltd. | 278,000 | 23,977,500 | ||||||
Broadcom Corp., Class A | 613,818 | 25,706,698 | ||||||
First Solar, Inc. * | 77,300 | 4,552,970 | ||||||
Intel Corp. | 5,532,605 | 188,163,896 | ||||||
KLA-Tencor Corp. | 185,081 | 14,649,161 | ||||||
Lam Research Corp. | 181,374 | 14,121,780 | ||||||
Linear Technology Corp. | 255,168 | 10,931,397 | ||||||
Microchip Technology, Inc. | 208,823 | 9,002,360 | ||||||
Micron Technology, Inc. * | 1,209,275 | 40,014,910 | ||||||
NVIDIA Corp. | 601,582 | 11,754,912 | ||||||
Texas Instruments, Inc. | 1,192,254 | 59,207,334 | ||||||
Xilinx, Inc. | 287,363 | 12,781,906 | ||||||
474,154,017 | ||||||||
Software & Services 10.1% | ||||||||
Accenture plc, Class A | 699,300 | 56,727,216 | ||||||
Adobe Systems, Inc. * | 511,276 | 35,850,673 | ||||||
Akamai Technologies, Inc. * | 202,841 | 12,231,312 | ||||||
Alliance Data Systems Corp. * | 62,100 | 17,596,035 | ||||||
Autodesk, Inc. * | 251,781 | 14,487,479 | ||||||
Automatic Data Processing, Inc. | 532,473 | 43,545,642 | ||||||
CA, Inc. | 370,925 | 10,779,081 | ||||||
Citrix Systems, Inc. * | 195,708 | 12,570,325 | ||||||
Cognizant Technology Solutions Corp., Class A * | 672,096 | 32,831,890 | ||||||
Computer Sciences Corp. | 162,140 | 9,793,256 | ||||||
eBay, Inc. * | 1,263,769 | 66,347,873 | ||||||
Electronic Arts, Inc. * | 335,792 | 13,757,398 | ||||||
Facebook, Inc., Class A * | 2,316,800 | 173,736,832 | ||||||
Fidelity National Information Services, Inc. | 317,934 | 18,564,166 | ||||||
Fiserv, Inc. * | 280,704 | 19,503,314 | ||||||
Google, Inc., Class A * | 315,912 | 179,396,947 | ||||||
Google, Inc., Class C * | 316,358 | 176,869,431 | ||||||
International Business Machines Corp. | 1,030,390 | 169,396,116 | ||||||
Intuit, Inc. | 316,409 | 27,847,156 | ||||||
MasterCard, Inc., Class A | 1,096,590 | 91,839,413 | ||||||
Microsoft Corp. | 9,167,131 | 430,396,800 | ||||||
Oracle Corp. | 3,617,586 | 141,266,733 | ||||||
Paychex, Inc. | 348,165 | 16,342,865 | ||||||
Red Hat, Inc. * | 210,100 | 12,379,092 | ||||||
salesforce.com, Inc. * | 644,765 | 41,258,512 | ||||||
Symantec Corp. | 753,650 | 18,705,593 | ||||||
Teradata Corp. * | 161,371 | 6,829,221 | ||||||
The Western Union Co. | 630,625 | 10,695,400 | ||||||
Total System Services, Inc. | 177,100 | 5,984,209 | ||||||
VeriSign, Inc. * | 126,725 | 7,573,086 | ||||||
Visa, Inc., Class A | 547,300 | 132,134,639 | ||||||
Xerox Corp. | 1,208,366 | 16,047,100 | ||||||
Yahoo! Inc. * | 1,030,255 | 47,443,243 | ||||||
2,070,728,048 | ||||||||
Technology Hardware & Equipment 6.7% | ||||||||
Amphenol Corp., Class A | 343,200 | 17,359,056 | ||||||
Apple, Inc. | 6,660,715 | 719,357,220 | ||||||
Cisco Systems, Inc. | 5,684,928 | 139,110,188 | ||||||
Corning, Inc. | 1,445,287 | 29,527,213 | ||||||
EMC Corp. | 2,261,445 | 64,971,315 | ||||||
F5 Networks, Inc. * | 82,400 | 10,133,552 | ||||||
FLIR Systems, Inc. | 149,700 | 5,019,441 | ||||||
Harris Corp. | 131,400 | 9,145,440 | ||||||
Hewlett-Packard Co. | 2,069,108 | 74,239,595 | ||||||
Jabil Circuit, Inc. | 170,686 | 3,575,872 | ||||||
Juniper Networks, Inc. | 443,265 | 9,339,594 | ||||||
Motorola Solutions, Inc. | 252,122 | 16,261,869 | ||||||
NetApp, Inc. | 369,974 | 15,834,887 | ||||||
QUALCOMM, Inc. | 1,862,365 | 146,214,276 | ||||||
SanDisk Corp. | 247,324 | 23,283,081 | ||||||
Seagate Technology plc | 365,400 | 22,958,082 | ||||||
TE Connectivity Ltd. | 449,600 | 27,484,048 | ||||||
Western Digital Corp. | 242,000 | 23,805,540 | ||||||
1,357,620,269 | ||||||||
Telecommunication Services 2.3% | ||||||||
AT&T, Inc. | 5,763,736 | 200,808,562 | ||||||
CenturyLink, Inc. | 645,643 | 26,781,272 | ||||||
Frontier Communications Corp. | 1,102,945 | 7,213,260 | ||||||
Verizon Communications, Inc. | 4,601,178 | 231,209,194 | ||||||
Windstream Holdings, Inc. (b) | 676,274 | 7,087,352 | ||||||
473,099,640 | ||||||||
Transportation 2.1% | ||||||||
C.H. Robinson Worldwide, Inc. | 168,095 | 11,633,855 | ||||||
CSX Corp. | 1,087,991 | 38,765,119 |
See financial notes 5
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Delta Air Lines, Inc. | 945,400 | 38,033,442 | ||||||
Expeditors International of Washington, Inc. | 239,100 | 10,200,006 | ||||||
FedEx Corp. | 294,368 | 49,277,203 | ||||||
Kansas City Southern | 129,400 | 15,889,026 | ||||||
Norfolk Southern Corp. | 335,892 | 37,163,091 | ||||||
Ryder System, Inc. | 60,702 | 5,370,306 | ||||||
Southwest Airlines Co. | 753,336 | 25,975,025 | ||||||
Union Pacific Corp. | 1,000,550 | 116,514,048 | ||||||
United Parcel Service, Inc., Class B | 778,518 | 81,674,323 | ||||||
430,495,444 | ||||||||
Utilities 3.1% | ||||||||
AES Corp. | 703,349 | 9,896,121 | ||||||
AGL Resources, Inc. | 129,640 | 6,988,892 | ||||||
Ameren Corp. | 257,420 | 10,899,163 | ||||||
American Electric Power Co., Inc. | 539,102 | 31,451,211 | ||||||
CenterPoint Energy, Inc. | 515,266 | 12,649,780 | ||||||
CMS Energy Corp. | 317,784 | 10,382,003 | ||||||
Consolidated Edison, Inc. | 330,165 | 20,919,254 | ||||||
Dominion Resources, Inc. | 642,464 | 45,807,683 | ||||||
DTE Energy Co. | 189,412 | 15,562,090 | ||||||
Duke Energy Corp. | 778,999 | 63,994,768 | ||||||
Edison International | 369,493 | 23,122,872 | ||||||
Entergy Corp. | 198,153 | 16,648,815 | ||||||
Exelon Corp. | 948,493 | 34,705,359 | ||||||
FirstEnergy Corp. | 463,794 | 17,318,068 | ||||||
Integrys Energy Group, Inc. | 86,594 | 6,293,652 | ||||||
NextEra Energy, Inc. | 481,738 | 48,279,782 | ||||||
NiSource, Inc. | 349,362 | 14,694,166 | ||||||
Northeast Utilities | 359,500 | 17,741,325 | ||||||
NRG Energy, Inc. | 378,600 | 11,350,428 | ||||||
Pepco Holdings, Inc. | 312,500 | 8,543,750 | ||||||
PG&E Corp. | 532,906 | 26,815,830 | ||||||
Pinnacle West Capital Corp. | 125,361 | 7,705,941 | ||||||
PPL Corp. | 758,470 | 26,538,865 | ||||||
Public Service Enterprise Group, Inc. | 558,870 | 23,086,920 | ||||||
SCANA Corp. | 157,500 | 8,645,175 | ||||||
Sempra Energy | 251,269 | 27,639,590 | ||||||
TECO Energy, Inc. | 273,819 | 5,369,591 | ||||||
The Southern Co. | 983,925 | 45,614,763 | ||||||
Wisconsin Energy Corp. | 269,500 | 13,383,370 | ||||||
Xcel Energy, Inc. | 543,886 | 18,203,864 | ||||||
630,253,091 | ||||||||
Total Common Stock | ||||||||
(Cost $11,021,049,498) | 19,950,703,019 | |||||||
Other Investment Company 0.1% of net assets | ||||||||
Securities Lending Collateral 0.1% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (e) | 29,007,003 | 29,007,003 | ||||||
Total Other Investment Company | ||||||||
(Cost $29,007,003) | 29,007,003 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.3% of net assets | ||||||||
Time Deposits 2.2% | ||||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
0.03%, 11/03/14 | 202,290,854 | 202,290,854 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 52,943,644 | 52,943,644 | ||||||
Wells Fargo | ||||||||
0.03%, 11/03/14 | 202,290,854 | 202,290,854 | ||||||
457,525,352 | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (c)(d) | 1,500,000 | 1,500,000 | ||||||
0.01%, 12/18/14 (c)(d) | 20,900,000 | 20,899,662 | ||||||
22,399,662 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $479,925,014) | 479,925,014 | |||||||
End of Investments. |
At 10/31/14, tax basis cost of the fund’s investments was $11,566,619,637 and the unrealized appreciation and depreciation were $9,323,536,713 and ($430,521,314), respectively, with a net unrealized appreciation of $8,893,015,399.
* | 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 $28,501,109. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
6 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .9% | Common Stock | 1,808,542,039 | 2,564,440,457 | ||||||||
0 | .0% | Rights | 320,914 | 320,914 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
5 | .1% | Other Investment Company | 130,686,609 | 130,686,609 | ||||||||
0 | .5% | Short-Term Investments | 13,560,292 | 13,560,292 | ||||||||
105 | .5% | Total Investments | 1,953,109,854 | 2,709,008,272 | ||||||||
(5 | .5%) | Other Assets and Liabilities, Net | (142,203,233 | ) | ||||||||
100 | .0% | Net Assets | 2,566,805,039 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.9% of net assets | ||||||||
Automobiles & Components 1.2% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 101,100 | 1,954,263 | ||||||
Cooper Tire & Rubber Co. | 94,699 | 3,050,255 | ||||||
Cooper-Standard Holding, Inc. * | 20,100 | 1,097,058 | ||||||
Dana Holding Corp. | 251,200 | 5,139,552 | ||||||
Dorman Products, Inc. * | 40,100 | 1,859,036 | ||||||
Drew Industries, Inc. | 34,800 | 1,672,488 | ||||||
Federal-Mogul Holdings Corp. * | 42,300 | 660,303 | ||||||
Fox Factory Holding Corp. * | 14,100 | 238,854 | ||||||
Fuel Systems Solutions, Inc. * | 22,300 | 205,829 | ||||||
Gentherm, Inc. * | 52,600 | 2,193,420 | ||||||
Modine Manufacturing Co. * | 73,100 | 937,873 | ||||||
Motorcar Parts of America, Inc. * | 22,100 | 641,784 | ||||||
Remy International, Inc. | 20,000 | 369,600 | ||||||
Shiloh Industries, Inc. * | 12,600 | 214,704 | ||||||
Spartan Motors, Inc. | 44,700 | 254,343 | ||||||
Standard Motor Products, Inc. | 28,800 | 1,138,176 | ||||||
Stoneridge, Inc. * | 42,600 | 553,374 | ||||||
Strattec Security Corp. | 5,100 | 528,972 | ||||||
Superior Industries International, Inc. | 37,500 | 731,625 | ||||||
Tenneco, Inc. * | 90,936 | 4,761,409 | ||||||
Tower International, Inc. * | 30,200 | 733,860 | ||||||
Winnebago Industries, Inc. * | 46,800 | 992,628 | ||||||
29,929,406 | ||||||||
Banks 9.6% | ||||||||
1st Source Corp. | 23,821 | 745,359 | ||||||
1st United Bancorp, Inc. | 43,000 | 380,550 | ||||||
American National Bankshares, Inc. | 10,700 | 258,940 | ||||||
Ameris Bancorp | 38,000 | 942,400 | ||||||
Ames National Corp. (c) | 15,500 | 384,400 | ||||||
Arrow Financial Corp. | 14,430 | 395,238 | ||||||
Astoria Financial Corp. | 130,200 | 1,712,130 | ||||||
Banc of California, Inc. | 43,600 | 513,172 | ||||||
BancFirst Corp. | 10,116 | 657,540 | ||||||
Banco Latinoamericano de Comercio Exterior, S.A., Class E | 45,657 | 1,535,902 | ||||||
BancorpSouth, Inc. | 143,100 | 3,295,593 | ||||||
Bank Mutual Corp. | 78,600 | 517,974 | ||||||
Bank of Marin Bancorp | 9,100 | 454,272 | ||||||
Bank of the Ozarks, Inc. | 116,900 | 4,119,556 | ||||||
BankFinancial Corp. | 28,200 | 336,426 | ||||||
Banner Corp. | 29,700 | 1,283,634 | ||||||
BBCN Bancorp, Inc. | 114,300 | 1,616,202 | ||||||
BBX Capital Corp., Class A * | 10,300 | 189,520 | ||||||
Beneficial Mutual Bancorp, Inc. * | 44,503 | 597,675 | ||||||
Berkshire Hills Bancorp, Inc. | 38,700 | 997,686 | ||||||
Blue Hills Bancorp, Inc. * | 34,000 | 453,220 | ||||||
BNC Bancorp | 32,787 | 557,707 | ||||||
BofI Holding, Inc. * | 20,800 | 1,602,016 | ||||||
Boston Private Financial Holdings, Inc. | 116,000 | 1,525,400 | ||||||
Bridge Bancorp, Inc. | 16,100 | 422,786 | ||||||
Bridge Capital Holdings * | 12,200 | 294,264 | ||||||
Brookline Bancorp, Inc. | 105,522 | 1,011,956 | ||||||
Bryn Mawr Bank Corp. | 19,300 | 595,019 | ||||||
C1 Financial, Inc. *(c) | 6,700 | 115,709 | ||||||
Camden National Corp. | 10,300 | 421,373 | ||||||
Capital Bank Financial Corp., Class A * | 35,300 | 913,917 | ||||||
Capital City Bank Group, Inc. | 15,300 | 231,183 | ||||||
Capitol Federal Financial, Inc. | 210,000 | 2,690,100 | ||||||
Cardinal Financial Corp. | 48,200 | 925,440 | ||||||
Cascade Bancorp * | 55,003 | 281,065 | ||||||
Cathay General Bancorp | 127,622 | 3,370,497 | ||||||
Centerstate Banks, Inc. | 52,100 | 606,444 | ||||||
Central Pacific Financial Corp. | 25,100 | 474,390 | ||||||
Century Bancorp, Inc., Class A | 4,700 | 178,506 | ||||||
Charter Financial Corp. | 32,459 | 368,085 | ||||||
Chemical Financial Corp. | 50,231 | 1,495,879 | ||||||
Citizens & Northern Corp. | 16,300 | 324,370 | ||||||
City Holding Co. | 22,100 | 994,279 | ||||||
Clifton Bancorp, Inc. | 38,861 | 505,970 | ||||||
CNB Financial Corp. | 20,700 | 374,877 | ||||||
CoBiz Financial, Inc. | 49,300 | 592,586 | ||||||
Columbia Banking System, Inc. | 77,500 | 2,152,950 | ||||||
Community Bank System, Inc. | 67,200 | 2,563,680 | ||||||
Community Trust Bancorp, Inc. | 21,780 | 782,991 | ||||||
CommunityOne Bancorp * | 13,700 | 145,768 | ||||||
ConnectOne Bancorp, Inc. | 32,060 | 593,110 | ||||||
CU Bancorp * | 13,400 | 264,650 | ||||||
Customers Bancorp, Inc. * | 37,450 | 715,295 | ||||||
CVB Financial Corp. | 155,319 | 2,450,934 | ||||||
Dime Community Bancshares, Inc. | 50,600 | 796,950 | ||||||
Eagle Bancorp, Inc. * | 34,480 | 1,238,866 | ||||||
Enterprise Bancorp, Inc. | 13,914 | 327,396 |
See financial notes 19
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Enterprise Financial Services Corp. | 28,000 | 527,800 | ||||||
ESB Financial Corp. | 20,040 | 373,946 | ||||||
Essent Group Ltd. * | 61,100 | 1,487,174 | ||||||
EverBank Financial Corp. | 133,700 | 2,560,355 | ||||||
F.N.B. Corp. | 256,137 | 3,275,992 | ||||||
FCB Financial Holdings, Inc., Class A * | 8,300 | 190,485 | ||||||
Federal Agricultural Mortgage Corp., Class C | 15,800 | 526,140 | ||||||
Fidelity Southern Corp. | 28,448 | 436,677 | ||||||
Financial Institutions, Inc. | 18,500 | 465,090 | ||||||
First Bancorp (North Carolina) | 31,600 | 572,592 | ||||||
First BanCorp (Puerto Rico) * | 152,900 | 796,609 | ||||||
First Bancorp, Inc. | 12,096 | 213,978 | ||||||
First Busey Corp. | 103,200 | 645,000 | ||||||
First Business Financial Services, Inc. | 5,800 | 272,194 | ||||||
First Citizens BancShares, Inc., Class A | 11,100 | 2,788,431 | ||||||
First Commonwealth Financial Corp. | 144,929 | 1,355,086 | ||||||
First Community Bancshares, Inc. | 24,600 | 402,702 | ||||||
First Connecticut Bancorp, Inc. | 23,900 | 373,796 | ||||||
First Defiance Financial Corp. | 13,000 | 398,190 | ||||||
First Financial Bancorp | 88,789 | 1,557,359 | ||||||
First Financial Bankshares, Inc. | 96,462 | 3,065,562 | ||||||
First Financial Corp. | 17,700 | 613,836 | ||||||
First Financial Northwest, Inc. | 22,000 | 255,200 | ||||||
First Interstate BancSystem, Inc., Class A | 28,833 | 845,960 | ||||||
First Merchants Corp. | 50,700 | 1,148,355 | ||||||
First Midwest Bancorp, Inc. | 112,863 | 1,894,970 | ||||||
First NBC Bank Holding Co. * | 21,900 | 804,387 | ||||||
FirstMerit Corp. | 246,215 | 4,518,045 | ||||||
Flagstar Bancorp, Inc. * | 28,300 | 444,876 | ||||||
Flushing Financial Corp. | 47,500 | 956,650 | ||||||
Fox Chase Bancorp, Inc. | 19,500 | 319,410 | ||||||
Franklin Financial Corp. * | 15,300 | 317,628 | ||||||
German American Bancorp, Inc. | 20,700 | 618,309 | ||||||
Glacier Bancorp, Inc. | 109,611 | 3,144,740 | ||||||
Great Southern Bancorp, Inc. | 13,600 | 516,936 | ||||||
Green Bancorp, Inc. * | 7,000 | 119,630 | ||||||
Guaranty Bancorp | 20,920 | 329,908 | ||||||
Hampton Roads Bankshares, Inc. * | 74,100 | 128,934 | ||||||
Hancock Holding Co. | 128,349 | 4,516,601 | ||||||
Hanmi Financial Corp. | 45,900 | 984,555 | ||||||
Heartland Financial USA, Inc. | 24,500 | 651,700 | ||||||
Heritage Commerce Corp. | 27,900 | 242,730 | ||||||
Heritage Financial Corp. | 45,545 | 799,315 | ||||||
Heritage Oaks Bancorp | 27,600 | 217,212 | ||||||
Home BancShares, Inc. | 79,380 | 2,533,810 | ||||||
Home Loan Servicing Solutions Ltd. | 106,900 | 2,053,549 | ||||||
HomeStreet, Inc. | 24,822 | 432,399 | ||||||
HomeTrust Bancshares, Inc. * | 29,400 | 454,230 | ||||||
Horizon Bancorp | 12,400 | 318,928 | ||||||
Hudson Valley Holding Corp. | 20,000 | 454,800 | ||||||
Iberiabank Corp. | 46,900 | 3,229,534 | ||||||
Independent Bank Corp., Massachusetts | 36,100 | 1,472,880 | ||||||
Independent Bank Corp., Michigan | 33,600 | 405,552 | ||||||
Independent Bank Group, Inc. | 13,400 | 598,846 | ||||||
International Bancshares Corp. | 82,800 | 2,349,036 | ||||||
Investors Bancorp, Inc. | 537,604 | 5,779,243 | ||||||
Kearny Financial Corp. * | 22,000 | 313,280 | ||||||
Ladder Capital Corp., Class A * | 22,800 | 432,972 | ||||||
Lakeland Bancorp, Inc. | 53,497 | 587,932 | ||||||
Lakeland Financial Corp. | 23,200 | 961,408 | ||||||
Macatawa Bank Corp. | 33,800 | 176,098 | ||||||
MainSource Financial Group, Inc. | 33,544 | 610,165 | ||||||
MB Financial, Inc. | 97,046 | 3,061,801 | ||||||
Mercantile Bank Corp. | 25,300 | 499,169 | ||||||
Merchants Bancshares, Inc. | 9,946 | 296,291 | ||||||
Meridian Bancorp, Inc. * | 28,891 | 327,624 | ||||||
Meta Financial Group, Inc. | 7,800 | 292,578 | ||||||
Metro Bancorp, Inc. * | 23,269 | 582,656 | ||||||
MGIC Investment Corp. * | 513,600 | 4,581,312 | ||||||
MidSouth Bancorp, Inc. | 10,200 | 193,188 | ||||||
MidWestOne Financial Group, Inc. | 9,300 | 248,124 | ||||||
National Bank Holdings Corp., Class A | 59,400 | 1,163,646 | ||||||
National Bankshares, Inc. | 9,300 | 291,183 | ||||||
National Penn Bancshares, Inc. | 177,978 | 1,831,394 | ||||||
NBT Bancorp, Inc. | 62,323 | 1,600,455 | ||||||
NewBridge Bancorp * | 49,300 | 438,277 | ||||||
NMI Holdings, Inc., Class A * | 74,100 | 663,195 | ||||||
Northfield Bancorp, Inc. | 78,586 | 1,119,065 | ||||||
Northrim BanCorp, Inc. | 8,900 | 257,210 | ||||||
Northwest Bancshares, Inc. | 140,909 | 1,807,862 | ||||||
OceanFirst Financial Corp. | 19,600 | 324,772 | ||||||
OFG Bancorp | 64,500 | 1,004,265 | ||||||
Old Line Bancshares, Inc. | 12,300 | 196,554 | ||||||
Old National Bancorp | 187,883 | 2,733,698 | ||||||
OmniAmerican Bancorp, Inc. | 15,900 | 429,936 | ||||||
Opus Bank * | 7,500 | 197,250 | ||||||
Oritani Financial Corp. | 67,950 | 1,003,622 | ||||||
Pacific Continental Corp. | 24,700 | 356,174 | ||||||
Pacific Premier Bancorp, Inc. * | 30,000 | 485,700 | ||||||
Palmetto Bancshares, Inc. | 7,300 | 121,326 | ||||||
Park National Corp. | 18,853 | 1,590,628 | ||||||
Park Sterling Corp. | 62,100 | 475,686 | ||||||
Peapack-Gladstone Financial Corp. | 17,700 | 323,025 | ||||||
Penns Woods Bancorp, Inc. | 7,100 | 344,563 | ||||||
PennyMac Financial Services, Inc., Class A * | 18,200 | 303,212 | ||||||
Peoples Bancorp, Inc. | 14,100 | 347,565 | ||||||
Peoples Financial Services Corp. (c) | 11,100 | 556,887 | ||||||
Pinnacle Financial Partners, Inc. | 51,932 | 2,035,734 | ||||||
Preferred Bank | 16,100 | 427,938 | ||||||
PrivateBancorp, Inc. | 105,076 | 3,396,056 | ||||||
Prosperity Bancshares, Inc. | 105,600 | 6,377,184 | ||||||
Provident Financial Services, Inc. | 89,751 | 1,636,161 | ||||||
Radian Group, Inc. | 286,004 | 4,819,167 | ||||||
Renasant Corp. | 48,181 | 1,452,657 | ||||||
Republic Bancorp, Inc., Class A | 13,300 | 322,525 | ||||||
Republic First Bancorp, Inc. * | 45,400 | 180,238 | ||||||
S&T Bancorp, Inc. | 46,181 | 1,274,134 | ||||||
Sandy Spring Bancorp, Inc. | 39,900 | 1,029,420 |
20 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Seacoast Banking Corp of Florida * | 26,520 | 338,395 | ||||||
ServisFirst Bancshares, Inc. | 4,200 | 123,858 | ||||||
Sierra Bancorp | 15,900 | 272,844 | ||||||
Simmons First National Corp., Class A | 25,700 | 1,079,143 | ||||||
South State Corp. | 35,763 | 2,156,867 | ||||||
Southside Bancshares, Inc. (c) | 27,894 | 936,681 | ||||||
Southwest Bancorp, Inc. | 32,600 | 587,778 | ||||||
Square 1 Financial, Inc., Class A * | 8,800 | 175,032 | ||||||
State Bank Financial Corp. | 50,800 | 910,336 | ||||||
Sterling Bancorp | 121,067 | 1,702,202 | ||||||
Stock Yards Bancorp, Inc. | 23,620 | 786,074 | ||||||
Stonegate Bank | 14,600 | 396,974 | ||||||
Stonegate Mortgage Corp. *(c) | 21,000 | 303,660 | ||||||
Suffolk Bancorp | 16,500 | 378,840 | ||||||
Sun Bancorp, Inc. * | 10,080 | 203,616 | ||||||
Susquehanna Bancshares, Inc. | 291,908 | 2,863,618 | ||||||
Talmer Bancorp, Inc., Class A | 26,700 | 373,266 | ||||||
Territorial Bancorp, Inc. | 16,000 | 343,680 | ||||||
Texas Capital Bancshares, Inc. * | 65,600 | 4,011,440 | ||||||
The Bancorp, Inc. * | 52,100 | 492,866 | ||||||
The Bank of Kentucky Financial Corp. | 11,000 | 516,010 | ||||||
The First of Long Island Corp. | 19,500 | 513,630 | ||||||
Tompkins Financial Corp. | 23,042 | 1,156,708 | ||||||
Towne Bank | 43,379 | 657,626 | ||||||
Tree.com, Inc. * | 8,300 | 307,017 | ||||||
Trico Bancshares | 26,900 | 707,470 | ||||||
TriState Capital Holdings, Inc. * | 32,400 | 315,900 | ||||||
TrustCo Bank Corp. | 147,155 | 1,074,232 | ||||||
Trustmark Corp. | 99,977 | 2,432,440 | ||||||
UMB Financial Corp. | 55,400 | 3,300,732 | ||||||
Umpqua Holdings Corp. | 251,821 | 4,432,050 | ||||||
Union Bankshares Corp. | 69,268 | 1,557,145 | ||||||
United Bankshares, Inc. | 101,348 | 3,474,209 | ||||||
United Community Banks, Inc. | 73,400 | 1,323,402 | ||||||
United Community Financial Corp. | 71,100 | 364,032 | ||||||
United Financial Bancorp, Inc. | 79,107 | 1,109,871 | ||||||
Univest Corp. of Pennsylvania | 22,500 | 461,700 | ||||||
Valley National Bancorp (c) | 294,100 | 2,935,118 | ||||||
ViewPoint Financial Group, Inc. | 57,100 | 1,557,117 | ||||||
Walker & Dunlop, Inc. * | 34,100 | 549,351 | ||||||
Washington Federal, Inc. | 148,700 | 3,246,121 | ||||||
Washington Trust Bancorp, Inc. | 21,000 | 805,770 | ||||||
Waterstone Financial, Inc. | 50,504 | 618,169 | ||||||
Webster Financial Corp. | 134,400 | 4,212,096 | ||||||
WesBanco, Inc. | 39,298 | 1,354,209 | ||||||
West Bancorp, Inc. | 20,800 | 344,864 | ||||||
Westamerica Bancorp | 38,600 | 1,904,524 | ||||||
Western Alliance Bancorp * | 113,952 | 3,033,402 | ||||||
Wilshire Bancorp, Inc. | 98,300 | 973,170 | ||||||
Wintrust Financial Corp. | 68,255 | 3,161,572 | ||||||
WSFS Financial Corp. | 12,500 | 983,125 | ||||||
Yadkin Financial Corp. * | 32,562 | 632,028 | ||||||
245,586,591 | ||||||||
Capital Goods 8.5% | ||||||||
AAON, Inc. | 61,087 | 1,200,360 | ||||||
AAR Corp. | 60,497 | 1,603,170 | ||||||
Accuride Corp. * | 65,000 | 313,300 | ||||||
Aceto Corp. | 46,100 | 1,048,314 | ||||||
Actuant Corp., Class A | 104,148 | 3,300,450 | ||||||
Advanced Drainage Systems, Inc. * | 17,900 | 390,936 | ||||||
Aegion Corp. * | 54,400 | 996,608 | ||||||
Aerovironment, Inc. * | 26,700 | 818,355 | ||||||
Aircastle Ltd. | 94,800 | 1,808,784 | ||||||
Alamo Group, Inc. | 10,500 | 449,820 | ||||||
Albany International Corp., Class A | 42,100 | 1,590,538 | ||||||
Altra Industrial Motion Corp. | 38,400 | 1,210,368 | ||||||
Ameresco, Inc., Class A * | 27,700 | 228,248 | ||||||
American Railcar Industries, Inc. | 14,631 | 962,866 | ||||||
American Science & Engineering, Inc. | 12,200 | 674,660 | ||||||
American Woodmark Corp. * | 18,900 | 773,199 | ||||||
Apogee Enterprises, Inc. | 43,400 | 1,905,260 | ||||||
Applied Industrial Technologies, Inc. | 62,466 | 3,048,965 | ||||||
ARC Group Worldwide, Inc. *(c) | 6,000 | 81,840 | ||||||
Argan, Inc. | 19,900 | 692,719 | ||||||
Astec Industries, Inc. | 27,695 | 1,049,917 | ||||||
Astronics Corp. * | 27,792 | 1,439,904 | ||||||
AZZ, Inc. | 38,800 | 1,814,288 | ||||||
Barnes Group, Inc. | 80,440 | 2,940,886 | ||||||
Beacon Roofing Supply, Inc. * | 72,382 | 2,002,810 | ||||||
Blount International, Inc. * | 77,662 | 1,189,005 | ||||||
Briggs & Stratton Corp. | 69,593 | 1,406,475 | ||||||
Builders FirstSource, Inc. * | 60,900 | 361,137 | ||||||
CAI International, Inc. * | 24,500 | 515,725 | ||||||
Capstone Turbine Corp. *(c) | 483,600 | 483,600 | ||||||
Chart Industries, Inc. * | 45,102 | 2,099,498 | ||||||
CIRCOR International, Inc. | 26,300 | 1,976,445 | ||||||
CLARCOR, Inc. | 74,600 | 4,995,216 | ||||||
Columbus McKinnon Corp. | 30,600 | 870,570 | ||||||
Comfort Systems USA, Inc. | 57,000 | 875,520 | ||||||
Commercial Vehicle Group, Inc. * | 33,500 | 219,425 | ||||||
Continental Building Products, Inc. * | 20,200 | 297,748 | ||||||
Cubic Corp. | 30,215 | 1,457,572 | ||||||
Curtiss-Wright Corp. | 71,982 | 4,981,874 | ||||||
DigitalGlobe, Inc. * | 110,735 | 3,165,914 | ||||||
Douglas Dynamics, Inc. | 30,400 | 630,192 | ||||||
Ducommun, Inc. * | 15,100 | 398,791 | ||||||
DXP Enterprises, Inc. * | 19,000 | 1,259,510 | ||||||
Dycom Industries, Inc. * | 50,500 | 1,585,195 | ||||||
Dynamic Materials Corp. | 23,217 | 422,782 | ||||||
EMCOR Group, Inc. | 99,500 | 4,390,935 | ||||||
Encore Wire Corp. | 35,941 | 1,363,602 | ||||||
Energy Recovery, Inc. *(c) | 61,300 | 280,754 | ||||||
EnerSys | 70,978 | 4,457,418 | ||||||
Engility Holdings, Inc. * | 30,800 | 1,330,560 | ||||||
Enphase Energy, Inc. * | 32,800 | 492,656 | ||||||
EnPro Industries, Inc. * | 34,000 | 2,194,020 | ||||||
Erickson, Inc. *(c) | 5,400 | 75,816 | ||||||
ESCO Technologies, Inc. | 37,669 | 1,432,175 | ||||||
Esterline Technologies Corp. * | 47,000 | 5,504,170 | ||||||
Federal Signal Corp. | 94,400 | 1,340,480 | ||||||
Franklin Electric Co., Inc. | 70,936 | 2,648,750 | ||||||
FreightCar America, Inc. | 16,000 | 527,520 |
See financial notes 21
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
FuelCell Energy, Inc. *(c) | 330,000 | 666,600 | ||||||
Furmanite Corp. * | 59,700 | 446,556 | ||||||
GenCorp, Inc. * | 89,400 | 1,516,224 | ||||||
Generac Holdings, Inc. * | 103,700 | 4,701,758 | ||||||
General Cable Corp. | 78,800 | 1,116,596 | ||||||
General Finance Corp. * | 16,200 | 139,644 | ||||||
Gibraltar Industries, Inc. * | 46,000 | 701,500 | ||||||
Global Brass & Copper Holdings, Inc. | 31,300 | 438,200 | ||||||
Global Power Equipment Group, Inc. | 23,600 | 321,668 | ||||||
GrafTech International Ltd. * | 176,400 | 756,756 | ||||||
Graham Corp. | 15,200 | 509,200 | ||||||
Granite Construction, Inc. | 58,000 | 2,140,780 | ||||||
Great Lakes Dredge & Dock Corp. * | 85,200 | 595,548 | ||||||
Griffon Corp. | 78,021 | 958,878 | ||||||
H&E Equipment Services, Inc. | 46,100 | 1,723,679 | ||||||
Harsco Corp. | 118,500 | 2,569,080 | ||||||
HEICO Corp. | 102,306 | 5,549,077 | ||||||
Hillenbrand, Inc. | 92,100 | 3,066,009 | ||||||
Houston Wire & Cable Co. | 23,800 | 322,728 | ||||||
Hurco Cos., Inc. | 8,600 | 331,358 | ||||||
Hyster-Yale Materials Handling, Inc. | 15,554 | 1,220,833 | ||||||
Insteel Industries, Inc. | 29,600 | 705,664 | ||||||
John Bean Technologies Corp. | 44,800 | 1,342,656 | ||||||
Kadant, Inc. | 16,500 | 682,110 | ||||||
Kaman Corp. | 39,349 | 1,694,368 | ||||||
Kratos Defense & Security Solutions, Inc. * | 62,600 | 436,322 | ||||||
L.B. Foster Co., Class A | 14,500 | 784,305 | ||||||
Layne Christensen Co. * | 28,311 | 203,839 | ||||||
Lindsay Corp. (c) | 19,331 | 1,695,329 | ||||||
LMI Aerospace, Inc. * | 12,300 | 162,114 | ||||||
LSI Industries, Inc. | 34,500 | 247,020 | ||||||
Lydall, Inc. * | 26,600 | 822,738 | ||||||
Manitex International, Inc. * | 17,500 | 200,025 | ||||||
Masonite International Corp. * | 43,200 | 2,335,392 | ||||||
MasTec, Inc. * | 99,973 | 2,863,227 | ||||||
Meritor, Inc. * | 145,700 | 1,674,093 | ||||||
Miller Industries, Inc. | 15,800 | 312,366 | ||||||
Moog, Inc., Class A * | 67,700 | 5,181,758 | ||||||
Mueller Industries, Inc. | 84,248 | 2,734,690 | ||||||
Mueller Water Products, Inc., Class A | 238,600 | 2,354,982 | ||||||
MYR Group, Inc. * | 33,000 | 856,020 | ||||||
National Presto Industries, Inc. (c) | 7,100 | 447,726 | ||||||
NCI Building Systems, Inc. * | 41,200 | 818,644 | ||||||
NN, Inc. | 26,700 | 667,500 | ||||||
Norcraft Cos, Inc. * | 10,700 | 181,900 | ||||||
Nortek, Inc. * | 14,128 | 1,176,580 | ||||||
Northwest Pipe Co. * | 15,513 | 555,055 | ||||||
Omega Flex, Inc. | 10,802 | 287,549 | ||||||
Orbital Sciences Corp. * | 90,336 | 2,375,837 | ||||||
Orion Marine Group, Inc. * | 36,200 | 396,752 | ||||||
Patrick Industries, Inc. * | 12,000 | 512,640 | ||||||
PGT, Inc. * | 69,300 | 651,767 | ||||||
Pike Corp. * | 37,000 | 441,780 | ||||||
Plug Power, Inc. *(c) | 245,100 | 1,154,421 | ||||||
Ply Gem Holdings, Inc. * | 32,400 | 367,740 | ||||||
Polypore International, Inc. * | 66,100 | 2,903,112 | ||||||
Powell Industries, Inc. | 13,000 | 591,890 | ||||||
Power Solutions International, Inc. * | 6,600 | 432,300 | ||||||
PowerSecure International, Inc. * | 31,100 | 347,387 | ||||||
Preformed Line Products Co. | 3,300 | 188,067 | ||||||
Primoris Services Corp. | 56,900 | 1,634,168 | ||||||
Proto Labs, Inc. * | 33,200 | 2,170,284 | ||||||
Quanex Building Products Corp. | 55,404 | 1,109,188 | ||||||
Raven Industries, Inc. | 53,000 | 1,343,550 | ||||||
RBC Bearings, Inc. | 33,500 | 2,035,125 | ||||||
Revolution Lighting Technologies, Inc. *(c) | 42,300 | 73,179 | ||||||
Rexnord Corp. * | 114,800 | 3,392,340 | ||||||
Rush Enterprises, Inc., Class A * | 51,987 | 1,980,705 | ||||||
SIFCO Industries, Inc. | 3,700 | 125,874 | ||||||
Simpson Manufacturing Co., Inc. | 60,494 | 2,001,142 | ||||||
Sparton Corp. * | 14,600 | 395,660 | ||||||
Standex International Corp. | 19,600 | 1,690,500 | ||||||
Sterling Construction Co., Inc. * | 22,000 | 194,040 | ||||||
Stock Building Supply Holdings, Inc. * | 21,400 | 335,766 | ||||||
Sun Hydraulics Corp. | 32,750 | 1,303,777 | ||||||
TAL International Group, Inc. * | 50,300 | 2,169,439 | ||||||
Taser International, Inc. * | 84,200 | 1,586,328 | ||||||
TCP International Holdings Ltd. * | 16,300 | 113,122 | ||||||
Teledyne Technologies, Inc. * | 55,571 | 5,758,823 | ||||||
Tennant Co. | 29,400 | 2,167,662 | ||||||
Textainer Group Holdings Ltd. | 33,331 | 1,147,920 | ||||||
The ExOne Co. *(c) | 14,600 | 358,722 | ||||||
The Gorman-Rupp Co. | 29,031 | 921,444 | ||||||
The Greenbrier Cos., Inc. (c) | 40,500 | 2,532,870 | ||||||
The KEYW Holding Corp. *(c) | 45,400 | 460,810 | ||||||
Thermon Group Holdings, Inc. * | 46,800 | 1,140,516 | ||||||
Titan International, Inc. | 64,600 | 682,176 | ||||||
Titan Machinery, Inc. *(c) | 23,200 | 319,232 | ||||||
Trex Co., Inc. * | 51,572 | 2,217,596 | ||||||
TriMas Corp. * | 67,000 | 2,121,220 | ||||||
Tutor Perini Corp. * | 54,030 | 1,513,380 | ||||||
Twin Disc, Inc. | 11,300 | 294,026 | ||||||
Universal Forest Products, Inc. | 30,262 | 1,512,192 | ||||||
Vicor Corp. * | 26,200 | 356,582 | ||||||
Wabash National Corp. * | 98,800 | 1,017,640 | ||||||
Watsco, Inc. | 38,506 | 3,912,980 | ||||||
Watts Water Technologies, Inc., Class A | 42,718 | 2,589,992 | ||||||
Woodward, Inc. | 100,500 | 5,146,605 | ||||||
Xerium Technologies, Inc. * | 15,600 | 232,752 | ||||||
219,217,279 | ||||||||
Commercial & Professional Supplies 3.6% | ||||||||
ABM Industries, Inc. | 82,409 | 2,277,785 | ||||||
Acacia Research Corp. (c) | 72,500 | 1,305,000 | ||||||
ACCO Brands Corp. * | 182,600 | 1,502,798 | ||||||
ARC Document Solutions, Inc. * | 64,500 | 654,675 | ||||||
Barrett Business Services, Inc. | 10,200 | 239,802 | ||||||
Brady Corp., Class A | 69,929 | 1,667,107 | ||||||
Casella Waste Systems, Inc., Class A * | 52,000 | 234,000 | ||||||
CBIZ, Inc. * | 64,100 | 591,643 | ||||||
CDI Corp. | 19,400 | 333,486 |
22 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ceco Environmental Corp. | 32,152 | 460,417 | ||||||
Cenveo, Inc. *(c) | 73,800 | 168,264 | ||||||
Civeo Corp. | 144,300 | 1,759,017 | ||||||
Corporate Resource Services, Inc. *(c) | 36,000 | 43,920 | ||||||
CRA International, Inc. * | 14,500 | 435,000 | ||||||
Deluxe Corp. | 73,446 | 4,465,517 | ||||||
Ennis, Inc. | 38,200 | 566,506 | ||||||
Exponent, Inc. | 20,100 | 1,604,382 | ||||||
Franklin Covey Co. * | 17,900 | 351,019 | ||||||
FTI Consulting, Inc. * | 60,600 | 2,447,028 | ||||||
G&K Services, Inc., Class A | 29,830 | 1,881,378 | ||||||
GP Strategies Corp. * | 26,700 | 885,372 | ||||||
Healthcare Services Group, Inc. | 102,425 | 3,050,216 | ||||||
Heidrick & Struggles International, Inc. | 24,100 | 501,762 | ||||||
Heritage-Crystal Clean, Inc. * | 16,900 | 306,566 | ||||||
Herman Miller, Inc. | 88,300 | 2,825,600 | ||||||
Hill International, Inc. * | 35,300 | 136,964 | ||||||
HNI Corp. | 68,300 | 3,186,195 | ||||||
Huron Consulting Group, Inc. * | 34,800 | 2,422,428 | ||||||
ICF International, Inc. * | 28,200 | 1,024,788 | ||||||
InnerWorkings, Inc. * | 63,200 | 573,856 | ||||||
Insperity, Inc. | 33,210 | 1,048,108 | ||||||
Interface, Inc. | 97,500 | 1,562,925 | ||||||
Kelly Services, Inc., Class A | 38,323 | 675,634 | ||||||
Kforce, Inc. | 39,300 | 909,795 | ||||||
Kimball International, Inc., Class B | 51,600 | 927,768 | ||||||
Knoll, Inc. | 73,803 | 1,467,942 | ||||||
Korn/Ferry International * | 74,261 | 2,074,110 | ||||||
Matthews International Corp., Class A | 44,959 | 2,071,711 | ||||||
McGrath RentCorp | 39,735 | 1,451,519 | ||||||
Mistras Group, Inc. * | 26,414 | 435,567 | ||||||
Mobile Mini, Inc. | 68,568 | 3,005,335 | ||||||
MSA Safety, Inc. | 43,089 | 2,476,325 | ||||||
Multi-Color Corp. | 18,500 | 912,050 | ||||||
Navigant Consulting, Inc. * | 72,548 | 1,116,514 | ||||||
NL Industries, Inc. | 8,900 | 64,881 | ||||||
On Assignment, Inc. * | 79,700 | 2,319,270 | ||||||
Paylocity Holding Corp. *(c) | 12,300 | 301,350 | ||||||
Pendrell Corp. * | 230,900 | 385,603 | ||||||
Performant Financial Corp. * | 43,700 | 377,131 | ||||||
Quad Graphics, Inc. | 41,700 | 919,485 | ||||||
Quest Resource Holding Corp. *(c) | 19,000 | 29,640 | ||||||
Resources Connection, Inc. | 55,350 | 856,264 | ||||||
RPX Corp. * | 77,800 | 1,093,090 | ||||||
SP Plus Corp. * | 21,200 | 462,584 | ||||||
Steelcase, Inc., Class A | 127,642 | 2,261,816 | ||||||
Team, Inc. * | 31,600 | 1,331,624 | ||||||
Tetra Tech, Inc. | 97,100 | 2,603,251 | ||||||
The Advisory Board Co. * | 54,782 | 2,940,150 | ||||||
The Brink’s Co. | 72,300 | 1,518,300 | ||||||
The Corporate Executive Board Co. | 50,622 | 3,730,841 | ||||||
TriNet Group, Inc. * | 23,100 | 691,152 | ||||||
TrueBlue, Inc. * | 61,576 | 1,522,159 | ||||||
UniFirst Corp. | 22,135 | 2,469,381 | ||||||
United Stationers, Inc. | 57,734 | 2,411,549 | ||||||
US Ecology, Inc. | 31,200 | 1,568,736 | ||||||
Viad Corp. | 30,396 | 775,402 | ||||||
VSE Corp. | 5,500 | 331,540 | ||||||
WageWorks, Inc. * | 51,500 | 2,936,015 | ||||||
West Corp. | 56,500 | 1,808,000 | ||||||
93,747,008 | ||||||||
Consumer Durables & Apparel 2.6% | ||||||||
Arctic Cat, Inc. | 18,800 | 632,808 | ||||||
Beazer Homes USA, Inc. * | 38,540 | 691,022 | ||||||
Black Diamond, Inc. * | 36,700 | 284,792 | ||||||
Brunswick Corp. | 136,700 | 6,397,560 | ||||||
Callaway Golf Co. | 125,469 | 983,677 | ||||||
Cavco Industries, Inc. * | 13,000 | 947,310 | ||||||
Century Communities, Inc. * | 6,900 | 127,512 | ||||||
Columbia Sportswear Co. | 40,600 | 1,564,724 | ||||||
Crocs, Inc. * | 133,500 | 1,559,280 | ||||||
CSS Industries, Inc. | 13,400 | 382,704 | ||||||
Culp, Inc. | 12,000 | 227,640 | ||||||
Escalade, Inc. | 14,500 | 165,880 | ||||||
Ethan Allen Interiors, Inc. | 38,179 | 1,080,466 | ||||||
Flexsteel Industries, Inc. | 6,200 | 212,722 | ||||||
G-III Apparel Group Ltd. * | 28,355 | 2,249,969 | ||||||
Helen of Troy Ltd. * | 42,000 | 2,597,700 | ||||||
Hovnanian Enterprises, Inc., Class A *(c) | 161,300 | 606,488 | ||||||
Iconix Brand Group, Inc. * | 67,200 | 2,688,672 | ||||||
Installed Building Products, Inc. * | 12,800 | 185,728 | ||||||
iRobot Corp. *(c) | 47,600 | 1,700,272 | ||||||
JAKKS Pacific, Inc. *(c) | 36,400 | 232,232 | ||||||
Johnson Outdoors, Inc., Class A | 8,500 | 255,425 | ||||||
KB Home | 125,600 | 1,976,944 | ||||||
La-Z-Boy, Inc. | 79,600 | 1,819,656 | ||||||
LeapFrog Enterprises, Inc. * | 90,800 | 483,056 | ||||||
LGI Homes, Inc. * | 21,000 | 407,820 | ||||||
Libbey, Inc. * | 34,179 | 982,646 | ||||||
Lifetime Brands, Inc. | 12,400 | 212,164 | ||||||
M.D.C. Holdings, Inc. | 59,600 | 1,455,432 | ||||||
M/I Homes, Inc. * | 34,500 | 743,130 | ||||||
Malibu Boats, Inc., Class A * | 12,300 | 229,518 | ||||||
Marine Products Corp. | 13,700 | 115,628 | ||||||
Meritage Homes Corp. * | 58,985 | 2,170,058 | ||||||
Movado Group, Inc. | 27,200 | 960,160 | ||||||
NACCO Industries, Inc., Class A | 7,777 | 455,499 | ||||||
Nautilus, Inc. * | 44,200 | 591,396 | ||||||
Oxford Industries, Inc. | 22,396 | 1,371,755 | ||||||
Perry Ellis International, Inc. * | 16,800 | 343,560 | ||||||
Quiksilver, Inc. * | 206,300 | 361,025 | ||||||
Sequential Brands Group, Inc. * | 24,800 | 310,992 | ||||||
Skechers U.S.A., Inc., Class A * | 59,778 | 3,272,846 | ||||||
Skullcandy, Inc. * | 22,200 | 185,148 | ||||||
Smith & Wesson Holding Corp. *(c) | 80,900 | 821,944 | ||||||
Standard Pacific Corp. * | 209,500 | 1,550,300 | ||||||
Steven Madden Ltd. * | 85,550 | 2,681,993 | ||||||
Sturm, Ruger & Co., Inc. (c) | 29,100 | 1,212,888 | ||||||
The Dixie Group, Inc. * | 22,000 | 173,360 | ||||||
The New Home Co., Inc. * | 16,049 | 243,463 | ||||||
The Ryland Group, Inc. | 68,400 | 2,449,404 | ||||||
TRI Pointe Homes, Inc. * | 214,600 | 2,937,874 | ||||||
Tumi Holdings, Inc. * | 73,300 | 1,522,441 | ||||||
Turtle Beach Corp. *(c) | 11,000 | 63,580 |
See financial notes 23
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
UCP, Inc., Class A * | 11,100 | 151,959 | ||||||
Unifi, Inc. * | 21,300 | 595,761 | ||||||
Universal Electronics, Inc. * | 24,700 | 1,405,183 | ||||||
Vera Bradley, Inc. * | 30,900 | 704,520 | ||||||
Vince Holding Corp. * | 16,700 | 585,335 | ||||||
WCI Communities, Inc. * | 17,200 | 322,672 | ||||||
William Lyon Homes, Class A * | 25,700 | 608,062 | ||||||
Wolverine World Wide, Inc. | 149,872 | 4,067,526 | ||||||
66,321,281 | ||||||||
Consumer Services 4.0% | ||||||||
2U, Inc. * | 15,100 | 274,820 | ||||||
American Public Education, Inc. * | 25,200 | 780,948 | ||||||
Ascent Capital Group, Inc., Class A * | 19,700 | 1,266,710 | ||||||
Belmond Ltd., Class A * | 143,700 | 1,646,802 | ||||||
Biglari Holdings, Inc. * | 2,960 | 1,033,514 | ||||||
BJ’s Restaurants, Inc. * | 36,300 | 1,597,926 | ||||||
Bloomin’ Brands, Inc. * | 113,200 | 2,140,612 | ||||||
Bob Evans Farms, Inc. | 36,246 | 1,770,617 | ||||||
Boyd Gaming Corp. * | 113,800 | 1,314,390 | ||||||
Bravo Brio Restaurant Group, Inc. * | 28,900 | 400,843 | ||||||
Bridgepoint Education, Inc. * | 29,700 | 375,408 | ||||||
Bright Horizons Family Solutions, Inc. * | 45,000 | 2,005,200 | ||||||
Buffalo Wild Wings, Inc. * | 28,168 | 4,204,919 | ||||||
Caesars Acquisition Co., Class A * | 67,100 | 700,524 | ||||||
Caesars Entertainment Corp. *(c) | 75,200 | 916,688 | ||||||
Capella Education Co. | 15,800 | 1,117,692 | ||||||
Career Education Corp. * | 91,200 | 528,960 | ||||||
Carriage Services, Inc. | 21,800 | 435,128 | ||||||
Carrols Restaurant Group, Inc. * | 51,700 | 398,607 | ||||||
Chegg, Inc. *(c) | 108,100 | 718,865 | ||||||
Churchill Downs, Inc. | 20,561 | 2,096,811 | ||||||
Chuy’s Holdings, Inc. * | 23,100 | 690,921 | ||||||
ClubCorp Holdings, Inc. | 30,000 | 571,800 | ||||||
Collectors Universe, Inc. (c) | 10,100 | 248,460 | ||||||
Cracker Barrel Old Country Store, Inc. | 28,481 | 3,285,283 | ||||||
Del Frisco’s Restaurant Group, Inc. * | 34,700 | 805,734 | ||||||
Denny’s Corp. * | 132,500 | 1,142,150 | ||||||
Diamond Resorts International, Inc. * | 51,900 | 1,347,324 | ||||||
DineEquity, Inc. | 24,897 | 2,214,837 | ||||||
Education Management Corp. *(c) | 36,600 | 21,781 | ||||||
Einstein Noah Restaurant Group, Inc. | 16,300 | 330,075 | ||||||
El Pollo Loco Holdings, Inc. *(c) | 11,900 | 424,235 | ||||||
Empire Resorts, Inc. *(c) | 22,100 | 165,529 | ||||||
Famous Dave’s of America, Inc. * | 6,900 | 179,883 | ||||||
Fiesta Restaurant Group, Inc. * | 39,300 | 2,167,395 | ||||||
Grand Canyon Education, Inc. * | 69,875 | 3,347,012 | ||||||
Houghton Mifflin Harcourt Co. * | 159,900 | 3,199,599 | ||||||
Ignite Restaurant Group, Inc. * | 9,100 | 62,699 | ||||||
International Speedway Corp., Class A | 43,200 | 1,353,456 | ||||||
Interval Leisure Group, Inc. | 61,100 | 1,285,544 | ||||||
Intrawest Resorts Holdings, Inc. * | 26,900 | 286,216 | ||||||
Isle of Capri Casinos, Inc. * | 27,300 | 202,839 | ||||||
ITT Educational Services, Inc. *(c) | 33,300 | 336,663 | ||||||
Jack in the Box, Inc. | 61,088 | 4,339,691 | ||||||
Jamba, Inc. * | 31,660 | 422,661 | ||||||
K12, Inc. * | 50,400 | 624,960 | ||||||
Krispy Kreme Doughnuts, Inc. * | 99,100 | 1,874,972 | ||||||
La Quinta Holdings, Inc. * | 65,000 | 1,326,650 | ||||||
Liberty Tax, Inc. * | 6,500 | 246,285 | ||||||
Life Time Fitness, Inc. * | 59,977 | 3,344,917 | ||||||
LifeLock, Inc. * | 118,100 | 1,997,071 | ||||||
Marriott Vacations Worldwide Corp. | 41,600 | 2,888,704 | ||||||
Monarch Casino & Resort, Inc. * | 11,900 | 193,613 | ||||||
Morgans Hotel Group Co. * | 38,000 | 303,620 | ||||||
Multimedia Games Holding Co., Inc. * | 45,200 | 1,577,480 | ||||||
Nathan’s Famous, Inc. * | 3,700 | 265,956 | ||||||
Noodles & Co. * | 15,900 | 362,997 | ||||||
Papa John’s International, Inc. | 44,910 | 2,099,992 | ||||||
Papa Murphy’s Holdings, Inc. *(c) | 11,500 | 106,950 | ||||||
Penn National Gaming, Inc. * | 115,300 | 1,509,277 | ||||||
Pinnacle Entertainment, Inc. * | 91,485 | 2,344,761 | ||||||
Popeyes Louisiana Kitchen, Inc. * | 35,800 | 1,659,330 | ||||||
Potbelly Corp. *(c) | 21,900 | 279,444 | ||||||
Red Robin Gourmet Burgers, Inc. * | 21,600 | 1,187,352 | ||||||
Regis Corp. | 67,749 | 1,150,378 | ||||||
Ruby Tuesday, Inc. * | 87,200 | 669,696 | ||||||
Ruth’s Hospitality Group, Inc. | 56,600 | 688,822 | ||||||
Scientific Games Corp., Class A * | 77,100 | 907,467 | ||||||
Sonic Corp. * | 82,829 | 2,088,119 | ||||||
Sotheby’s | 93,000 | 3,688,380 | ||||||
Speedway Motorsports, Inc. | 15,784 | 308,893 | ||||||
Steiner Leisure Ltd. * | 20,909 | 881,942 | ||||||
Strayer Education, Inc. * | 16,400 | 1,200,316 | ||||||
Texas Roadhouse, Inc. | 102,296 | 2,953,285 | ||||||
The Cheesecake Factory, Inc. | 73,300 | 3,367,402 | ||||||
The Marcus Corp. | 27,300 | 467,649 | ||||||
Universal Technical Institute, Inc. | 37,700 | 449,007 | ||||||
Vail Resorts, Inc. | 53,571 | 4,626,392 | ||||||
Weight Watchers International, Inc. *(c) | 40,600 | 1,057,630 | ||||||
Zoe’s Kitchen, Inc. *(c) | 8,600 | 313,556 | ||||||
103,171,036 | ||||||||
Diversified Financials 2.6% | ||||||||
Arlington Asset Investment Corp., Class A | 33,300 | 911,754 | ||||||
BGC Partners, Inc., Class A | 255,600 | 2,167,488 | ||||||
Calamos Asset Management, Inc., Class A | 24,400 | 334,280 | ||||||
Cash America International, Inc. | 41,570 | 2,043,166 | ||||||
CIFC Corp. | 23,300 | 214,360 | ||||||
Cohen & Steers, Inc. (c) | 28,128 | 1,205,566 | ||||||
Consumer Portfolio Services, Inc. * | 24,200 | 170,852 | ||||||
Cowen Group, Inc., Class A * | 169,300 | 683,972 | ||||||
Credit Acceptance Corp. * | 10,800 | 1,593,648 | ||||||
Diamond Hill Investment Group, Inc. | 4,100 | 549,359 |
24 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Encore Capital Group, Inc. * | 37,800 | 1,720,278 | ||||||
Evercore Partners, Inc., Class A | 49,100 | 2,541,907 | ||||||
Ezcorp, Inc., Class A * | 77,400 | 873,072 | ||||||
FBR & Co. * | 14,036 | 338,829 | ||||||
Financial Engines, Inc. | 75,600 | 3,014,172 | ||||||
First Cash Financial Services, Inc. * | 44,300 | 2,617,244 | ||||||
FXCM, Inc., Class A | 66,800 | 1,099,528 | ||||||
Gain Capital Holdings, Inc. | 34,000 | 291,040 | ||||||
GAMCO Investors, Inc., Class A | 9,700 | 801,414 | ||||||
GFI Group, Inc. | 122,968 | 676,324 | ||||||
Green Dot Corp., Class A * | 49,133 | 1,174,279 | ||||||
Greenhill & Co., Inc. | 45,000 | 2,025,000 | ||||||
HFF, Inc., Class A | 49,800 | 1,567,704 | ||||||
INTL FCStone, Inc. * | 20,400 | 369,240 | ||||||
Investment Technology Group, Inc. * | 55,265 | 990,901 | ||||||
Janus Capital Group, Inc. | 235,800 | 3,534,642 | ||||||
JG Wentworth Co. * | 14,200 | 157,904 | ||||||
KCG Holdings, Inc., Class A * | 77,466 | 825,788 | ||||||
Ladenburg Thalmann Financial Services, Inc. * | 142,600 | 608,902 | ||||||
Manning & Napier, Inc. | 20,900 | 331,056 | ||||||
Marcus & Millichap, Inc. * | 10,000 | 310,600 | ||||||
MarketAxess Holdings, Inc. | 56,160 | 3,630,744 | ||||||
Marlin Business Services Corp. | 11,600 | 245,224 | ||||||
Moelis & Co., Class A | 10,800 | 368,928 | ||||||
Nelnet, Inc., Class A | 30,500 | 1,451,495 | ||||||
NewStar Financial, Inc. * | 36,500 | 499,320 | ||||||
Nicholas Financial, Inc. * | 13,000 | 158,730 | ||||||
Oppenheimer Holdings, Inc., Class A | 13,800 | 338,790 | ||||||
PHH Corp. * | 84,763 | 2,008,035 | ||||||
PICO Holdings, Inc. * | 32,300 | 713,830 | ||||||
Piper Jaffray Cos. * | 24,739 | 1,396,764 | ||||||
PRA Group, Inc. * | 76,129 | 4,815,159 | ||||||
Pzena Investment Management, Inc., Class A | 13,700 | 137,685 | ||||||
RCS Capital Corp., Class A | 13,963 | 229,133 | ||||||
Regional Management Corp. * | 15,700 | 183,062 | ||||||
Resource America, Inc., Class A | 16,500 | 157,410 | ||||||
Safeguard Scientifics, Inc. * | 34,100 | 680,295 | ||||||
Silvercrest Asset Management Group, Inc., Class A | 10,000 | 149,300 | ||||||
Springleaf Holdings, Inc. * | 35,200 | 1,317,184 | ||||||
Stifel Financial Corp. * | 97,310 | 4,623,198 | ||||||
SWS Group, Inc. * | 39,000 | 288,210 | ||||||
Tiptree Financial, Inc., Class A *(c) | 12,500 | 101,000 | ||||||
Virtus Investment Partners, Inc. | 10,500 | 1,881,705 | ||||||
Walter Investment Management Corp. *(c) | 57,403 | 1,304,196 | ||||||
Westwood Holdings Group, Inc. | 11,500 | 776,250 | ||||||
WisdomTree Investments, Inc. * | 159,800 | 2,357,050 | ||||||
World Acceptance Corp. *(c) | 11,900 | 852,754 | ||||||
66,409,720 | ||||||||
Energy 4.6% | ||||||||
Abraxas Petroleum Corp. * | 129,000 | 532,770 | ||||||
Adams Resources & Energy, Inc. | 2,900 | 121,945 | ||||||
Alon USA Energy, Inc. | 40,400 | 648,016 | ||||||
Alpha Natural Resources, Inc. *(c) | 332,200 | 651,112 | ||||||
American Eagle Energy Corp. * | 44,600 | 77,604 | ||||||
Amyris, Inc. *(c) | 41,500 | 125,330 | ||||||
Apco Oil & Gas International, Inc. * | 12,200 | 174,826 | ||||||
Approach Resources, Inc. *(c) | 57,800 | 572,220 | ||||||
Arch Coal, Inc. (c) | 326,100 | 704,376 | ||||||
Ardmore Shipping Corp. | 26,500 | 268,445 | ||||||
Aspen Aerogels, Inc. *(c) | 12,000 | 119,160 | ||||||
Basic Energy Services, Inc. * | 46,100 | 594,690 | ||||||
Bill Barrett Corp. * | 75,298 | 1,144,530 | ||||||
Bonanza Creek Energy, Inc. * | 48,100 | 2,176,044 | ||||||
BPZ Resources, Inc. * | 156,600 | 194,184 | ||||||
Bristow Group, Inc. | 53,085 | 3,922,982 | ||||||
C&J Energy Services, Inc. * | 68,600 | 1,324,666 | ||||||
Callon Petroleum Co. * | 83,800 | 549,728 | ||||||
CARBO Ceramics, Inc. (c) | 29,300 | 1,513,931 | ||||||
Carrizo Oil & Gas, Inc. * | 67,911 | 3,527,297 | ||||||
CHC Group Ltd. *(c) | 53,100 | 356,832 | ||||||
Clayton Williams Energy, Inc. * | 8,600 | 715,004 | ||||||
Clean Energy Fuels Corp. *(c) | 108,338 | 791,951 | ||||||
Cloud Peak Energy, Inc. * | 92,300 | 1,104,831 | ||||||
Comstock Resources, Inc. | 71,200 | 843,008 | ||||||
Contango Oil & Gas Co. * | 25,520 | 933,266 | ||||||
Dawson Geophysical Co. | 10,600 | 180,094 | ||||||
Delek US Holdings, Inc. | 87,100 | 2,951,819 | ||||||
DHT Holdings, Inc. | 135,700 | 903,762 | ||||||
Diamondback Energy, Inc. * | 61,903 | 4,236,641 | ||||||
Dorian LPG Ltd. * | 10,700 | 153,331 | ||||||
Eclipse Resources Corp. * | 43,600 | 571,596 | ||||||
Emerald Oil, Inc. *(c) | 81,585 | 259,440 | ||||||
Energy XXI (Bermuda) Ltd. (c) | 147,206 | 1,132,014 | ||||||
Era Group, Inc. * | 28,700 | 671,293 | ||||||
Evolution Petroleum Corp. | 30,500 | 288,530 | ||||||
EXCO Resources, Inc. (c) | 222,774 | 679,461 | ||||||
Exterran Holdings, Inc. | 88,600 | 3,484,638 | ||||||
Forest Oil Corp. * | 177,000 | 143,370 | ||||||
Forum Energy Technologies, Inc. * | 87,400 | 2,386,020 | ||||||
Frontline Ltd. *(c) | 102,700 | 144,807 | ||||||
FX Energy, Inc. *(c) | 75,100 | 225,300 | ||||||
GasLog Ltd. (c) | 61,800 | 1,286,676 | ||||||
Gastar Exploration, Inc. * | 104,600 | 418,400 | ||||||
Geospace Technologies Corp. * | 19,800 | 609,642 | ||||||
Glori Energy, Inc. *(c) | 17,900 | 95,407 | ||||||
Goodrich Petroleum Corp. *(c) | 51,000 | 420,240 | ||||||
Green Plains, Inc. | 54,900 | 1,877,580 | ||||||
Gulf Island Fabrication, Inc. | 21,000 | 443,940 | ||||||
Gulfmark Offshore, Inc., Class A | 39,300 | 1,185,288 | ||||||
Halcon Resources Corp. *(c) | 382,521 | 1,189,640 | ||||||
Hallador Energy Co. | 15,600 | 187,200 | ||||||
Harvest Natural Resources, Inc. * | 61,800 | 229,896 | ||||||
Helix Energy Solutions Group, Inc. * | 157,307 | 4,190,658 | ||||||
Hercules Offshore, Inc. *(c) | 231,200 | 381,480 | ||||||
Hornbeck Offshore Services, Inc. * | 54,245 | 1,663,152 | ||||||
Independence Contract Drilling, Inc. * | 11,200 | 82,096 | ||||||
ION Geophysical Corp. * | 239,500 | 670,600 | ||||||
Isramco, Inc. *(c) | 1,400 | 183,400 |
See financial notes 25
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Jones Energy, Inc., Class A * | 15,900 | 196,524 | ||||||
Key Energy Services, Inc. * | 192,700 | 585,808 | ||||||
Kodiak Oil & Gas Corp. * | 407,200 | 4,393,688 | ||||||
Magnum Hunter Resources Corp. *(c) | 291,600 | 1,353,024 | ||||||
Matador Resources Co. * | 107,500 | 2,609,025 | ||||||
Matrix Service Co. * | 40,900 | 1,024,954 | ||||||
McDermott International, Inc. * | 348,500 | 1,338,240 | ||||||
Midstates Petroleum Co., Inc. *(c) | 47,300 | 140,481 | ||||||
Miller Energy Resources, Inc. *(c) | 41,600 | 144,768 | ||||||
Mitcham Industries, Inc. * | 18,500 | 188,700 | ||||||
Natural Gas Services Group, Inc. * | 20,500 | 527,465 | ||||||
Navios Maritime Acquisition Corp. (c) | 120,600 | 382,302 | ||||||
Newpark Resources, Inc. * | 126,710 | 1,448,295 | ||||||
Nordic American Offshore Ltd. *(c) | 24,000 | 384,000 | ||||||
Nordic American Tankers Ltd. (c) | 133,500 | 1,128,075 | ||||||
North Atlantic Drilling Ltd. (c) | 106,800 | 661,092 | ||||||
Northern Oil & Gas, Inc. * | 89,600 | 1,012,480 | ||||||
Nuverra Environmental Solutions, Inc. *(c) | 19,620 | 185,801 | ||||||
Pacific Ethanol, Inc. * | 37,300 | 526,303 | ||||||
Panhandle Oil & Gas, Inc., Class A | 23,400 | 481,104 | ||||||
Parker Drilling Co. * | 181,265 | 804,817 | ||||||
Parsley Energy, Inc., Class A * | 78,579 | 1,333,486 | ||||||
PDC Energy, Inc. * | 52,903 | 2,312,919 | ||||||
Penn Virginia Corp. * | 96,278 | 825,102 | ||||||
PetroQuest Energy, Inc. * | 84,900 | 399,030 | ||||||
PHI, Inc. - Non Voting Shares * | 22,900 | 1,024,546 | ||||||
Pioneer Energy Services Corp. * | 91,500 | 839,970 | ||||||
Profire Energy, Inc. *(c) | 20,000 | 74,200 | ||||||
Quicksilver Resources, Inc. * | 156,900 | 85,762 | ||||||
Renewable Energy Group, Inc. * | 50,700 | 533,871 | ||||||
Resolute Energy Corp. * | 114,300 | 397,764 | ||||||
REX American Resources Corp. * | 10,200 | 742,152 | ||||||
Rex Energy Corp. * | 71,700 | 562,128 | ||||||
RigNet, Inc. * | 16,900 | 734,305 | ||||||
Ring Energy, Inc. * | 27,300 | 469,560 | ||||||
Rosetta Resources, Inc. * | 91,000 | 3,460,730 | ||||||
RSP Permian, Inc. * | 34,400 | 841,768 | ||||||
Sanchez Energy Corp. * | 75,253 | 1,284,569 | ||||||
Scorpio Tankers, Inc. | 281,000 | 2,453,130 | ||||||
SEACOR Holdings, Inc. * | 30,700 | 2,531,215 | ||||||
SemGroup Corp., Class A | 62,965 | 4,832,564 | ||||||
Ship Finance International Ltd. | 85,700 | 1,473,183 | ||||||
Solazyme, Inc. *(c) | 111,500 | 855,205 | ||||||
Stone Energy Corp. * | 82,968 | 2,032,716 | ||||||
Swift Energy Co. *(c) | 60,701 | 415,802 | ||||||
Synergy Resources Corp. * | 97,700 | 1,190,963 | ||||||
Teekay Tankers Ltd., Class A (c) | 86,500 | 366,760 | ||||||
Tesco Corp. | 52,500 | 999,600 | ||||||
TETRA Technologies, Inc. * | 118,074 | 1,125,245 | ||||||
TransAtlantic Petroleum Ltd. * | 33,200 | 273,900 | ||||||
Triangle Petroleum Corp. * | 111,000 | 860,250 | ||||||
VAALCO Energy, Inc. * | 71,600 | 531,272 | ||||||
Vantage Drilling Co. * | 316,300 | 306,020 | ||||||
Vertex Energy, Inc. *(c) | 17,300 | 109,336 | ||||||
W&T Offshore, Inc. | 49,000 | 445,410 | ||||||
Warren Resources, Inc. * | 116,000 | 401,360 | ||||||
Western Refining, Inc. | 79,754 | 3,635,985 | ||||||
Westmoreland Coal Co. * | 21,500 | 786,255 | ||||||
Willbros Group, Inc. * | 57,300 | 336,351 | ||||||
118,617,489 | ||||||||
Food & Staples Retailing 1.0% | ||||||||
Casey’s General Stores, Inc. | 57,400 | 4,699,338 | ||||||
Fairway Group Holdings Corp. *(c) | 22,400 | 66,976 | ||||||
Ingles Markets, Inc., Class A | 20,731 | 557,664 | ||||||
Liberator Medical Holdings, Inc. (c) | 46,200 | 133,056 | ||||||
Natural Grocers by Vitamin Cottage, Inc. * | 12,600 | 228,186 | ||||||
PriceSmart, Inc. | 27,900 | 2,483,937 | ||||||
Roundy’s, Inc. | 57,600 | 194,112 | ||||||
SpartanNash, Co. | 57,833 | 1,296,037 | ||||||
SUPERVALU, Inc. * | 302,678 | 2,612,111 | ||||||
The Andersons, Inc. | 42,523 | 2,709,991 | ||||||
The Chefs’ Warehouse, Inc. * | 33,000 | 589,710 | ||||||
The Fresh Market, Inc. * | 62,800 | 2,305,388 | ||||||
The Pantry, Inc. * | 34,000 | 876,180 | ||||||
United Natural Foods, Inc. * | 72,982 | 4,964,236 | ||||||
Village Super Market, Inc., Class A | 11,600 | 321,900 | ||||||
Weis Markets, Inc. | 15,800 | 705,312 | ||||||
24,744,134 | ||||||||
Food, Beverage & Tobacco 1.8% | ||||||||
22nd Century Group, Inc. *(c) | 60,300 | 132,660 | ||||||
Alico, Inc. | 4,700 | 173,430 | ||||||
Alliance One International, Inc. * | 116,600 | 236,698 | ||||||
B&G Foods, Inc. | 78,200 | 2,303,772 | ||||||
Boulder Brands, Inc. * | 91,800 | 815,184 | ||||||
Cal-Maine Foods, Inc. | 23,558 | 2,068,157 | ||||||
Calavo Growers, Inc. | 21,088 | 1,023,612 | ||||||
Chiquita Brands International, Inc. * | 71,002 | 1,024,559 | ||||||
Coca-Cola Bottling Co. Consolidated | 6,800 | 614,992 | ||||||
Craft Brew Alliance, Inc. * | 13,900 | 192,932 | ||||||
Darling Ingredients, Inc. * | 248,100 | 4,366,560 | ||||||
Dean Foods Co. | 137,100 | 2,016,741 | ||||||
Diamond Foods, Inc. * | 31,900 | 961,785 | ||||||
Farmer Bros. Co. * | 9,100 | 265,356 | ||||||
Fresh Del Monte Produce, Inc. | 53,000 | 1,701,830 | ||||||
Inventure Foods, Inc. * | 17,900 | 236,996 | ||||||
J&J Snack Foods Corp. | 22,800 | 2,349,084 | ||||||
John B. Sanfilippo & Son, Inc. | 10,900 | 404,935 | ||||||
Lancaster Colony Corp. | 28,200 | 2,580,018 | ||||||
Lifeway Foods, Inc. *(c) | 10,100 | 167,155 | ||||||
Limoneira Co. | 19,800 | 508,068 | ||||||
National Beverage Corp. * | 15,001 | 376,825 | ||||||
Omega Protein Corp. * | 33,400 | 482,630 | ||||||
Post Holdings, Inc. * | 65,800 | 2,467,500 | ||||||
Sanderson Farms, Inc. | 34,500 | 2,897,310 | ||||||
Seaboard Corp. * | 420 | 1,290,605 | ||||||
Seneca Foods Corp., Class A * | 12,400 | 333,312 | ||||||
Snyder’s-Lance, Inc. | 72,200 | 2,150,838 |
26 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Boston Beer Co., Inc., Class A * | 12,360 | 3,077,640 | ||||||
Tootsie Roll Industries, Inc. (c) | 27,574 | 817,569 | ||||||
TreeHouse Foods, Inc. * | 62,152 | 5,293,486 | ||||||
Universal Corp. | 35,145 | 1,563,953 | ||||||
Vector Group Ltd. | 100,969 | 2,255,647 | ||||||
47,151,839 | ||||||||
Health Care Equipment & Services 6.5% | ||||||||
Abaxis, Inc. | 32,200 | 1,695,652 | ||||||
ABIOMED, Inc. * | 59,500 | 1,951,005 | ||||||
Acadia Healthcare Co., Inc. * | 63,189 | 3,920,877 | ||||||
Accuray, Inc. * | 115,500 | 731,115 | ||||||
Addus HomeCare Corp. * | 7,800 | 154,986 | ||||||
Adeptus Health, Inc., Class A * | 8,100 | 268,758 | ||||||
Air Methods Corp. * | 59,300 | 2,800,739 | ||||||
Alliance HealthCare Services, Inc. * | 7,100 | 171,323 | ||||||
Almost Family, Inc. * | 11,000 | 323,840 | ||||||
Amedisys, Inc. * | 39,700 | 1,036,170 | ||||||
AMN Healthcare Services, Inc. * | 65,600 | 1,125,040 | ||||||
Amsurg Corp. * | 62,564 | 3,379,082 | ||||||
Analogic Corp. | 17,954 | 1,309,565 | ||||||
AngioDynamics, Inc. * | 33,500 | 569,500 | ||||||
Anika Therapeutics, Inc. * | 21,900 | 879,066 | ||||||
Antares Pharma, Inc. *(c) | 160,700 | 332,649 | ||||||
AtriCure, Inc. * | 41,500 | 723,760 | ||||||
Atrion Corp. | 2,300 | 759,023 | ||||||
Bio-Reference Laboratories, Inc. * | 38,800 | 1,165,552 | ||||||
BioScrip, Inc. *(c) | 100,400 | 648,584 | ||||||
BioTelemetry, Inc. * | 38,700 | 324,693 | ||||||
Cantel Medical Corp. | 51,145 | 2,168,548 | ||||||
Capital Senior Living Corp. * | 44,800 | 1,008,000 | ||||||
Cardiovascular Systems, Inc. * | 44,600 | 1,382,600 | ||||||
Castlight Health, Inc., Class B * | 19,000 | 237,690 | ||||||
Cerus Corp. *(c) | 109,800 | 456,768 | ||||||
Chemed Corp. | 26,276 | 2,715,887 | ||||||
Computer Programs & Systems, Inc. | 17,500 | 1,102,150 | ||||||
CONMED Corp. | 39,300 | 1,650,207 | ||||||
CorVel Corp. * | 16,600 | 571,372 | ||||||
Cross Country Healthcare, Inc. * | 52,650 | 509,126 | ||||||
CryoLife, Inc. | 37,400 | 383,724 | ||||||
Cyberonics, Inc. * | 42,300 | 2,220,750 | ||||||
Cynosure, Inc., Class A * | 36,644 | 926,727 | ||||||
Derma Sciences, Inc. * | 28,500 | 259,350 | ||||||
DexCom, Inc. * | 114,200 | 5,133,290 | ||||||
Endologix, Inc. * | 107,100 | 1,220,940 | ||||||
Exactech, Inc. * | 15,000 | 319,500 | ||||||
ExamWorks Group, Inc. * | 52,565 | 2,038,471 | ||||||
Five Star Quality Care, Inc. * | 56,200 | 232,106 | ||||||
GenMark Diagnostics, Inc. * | 61,000 | 695,400 | ||||||
Gentiva Health Services, Inc. * | 50,896 | 1,002,651 | ||||||
Globus Medical, Inc., Class A * | 96,500 | 2,139,405 | ||||||
Greatbatch, Inc. * | 37,000 | 1,857,030 | ||||||
Haemonetics Corp. * | 77,200 | 2,911,984 | ||||||
Hanger, Inc. * | 52,800 | 1,263,504 | ||||||
HealthEquity, Inc. * | 14,600 | 297,840 | ||||||
HealthSouth Corp. | 129,800 | 5,234,834 | ||||||
HealthStream, Inc. * | 30,800 | 953,568 | ||||||
Healthways, Inc. * | 48,800 | 756,400 | ||||||
HeartWare International, Inc. * | 25,400 | 1,958,848 | ||||||
HMS Holdings Corp. * | 130,200 | 3,024,546 | ||||||
ICU Medical, Inc. * | 21,100 | 1,495,990 | ||||||
Imprivata, Inc. * | 8,500 | 132,515 | ||||||
Inogen, Inc. * | 7,600 | 179,436 | ||||||
Insulet Corp. * | 81,600 | 3,522,672 | ||||||
Integra LifeSciences Holdings Corp. * | 36,648 | 1,873,079 | ||||||
Invacare Corp. | 49,211 | 773,105 | ||||||
IPC The Hospitalist Co., Inc. * | 24,700 | 1,029,002 | ||||||
K2M Group Holdings, Inc. * | 12,900 | 207,690 | ||||||
Kindred Healthcare, Inc. | 95,312 | 2,073,036 | ||||||
Landauer, Inc. | 13,300 | 476,007 | ||||||
LDR Holding Corp. * | 24,400 | 840,336 | ||||||
LHC Group, Inc. * | 21,100 | 513,785 | ||||||
Magellan Health, Inc. * | 41,600 | 2,517,632 | ||||||
Masimo Corp. * | 73,500 | 1,855,140 | ||||||
MedAssets, Inc. * | 92,400 | 2,001,384 | ||||||
Medidata Solutions, Inc. * | 79,600 | 3,590,756 | ||||||
Merge Healthcare, Inc. * | 130,500 | 358,875 | ||||||
Meridian Bioscience, Inc. | 64,350 | 1,193,049 | ||||||
Merit Medical Systems, Inc. * | 67,100 | 1,016,565 | ||||||
Molina Healthcare, Inc. * | 43,700 | 2,125,568 | ||||||
MWI Veterinary Supply, Inc. * | 19,300 | 3,274,341 | ||||||
National Healthcare Corp. | 15,388 | 928,050 | ||||||
National Research Corp., Class A * | 12,500 | 198,625 | ||||||
Natus Medical, Inc. * | 46,900 | 1,594,600 | ||||||
Neogen Corp. * | 54,025 | 2,371,698 | ||||||
NuVasive, Inc. * | 70,100 | 2,867,090 | ||||||
NxStage Medical, Inc. * | 92,700 | 1,405,332 | ||||||
Ocular Therapeutix, Inc. * | 8,300 | 126,741 | ||||||
Omnicell, Inc. * | 52,300 | 1,689,813 | ||||||
OraSure Technologies, Inc. * | 87,400 | 782,230 | ||||||
Orthofix International N.V. * | 28,200 | 827,670 | ||||||
Owens & Minor, Inc. | 94,700 | 3,155,404 | ||||||
Oxford Immunotec Global PLC * | 19,100 | 294,904 | ||||||
PharMerica Corp. * | 43,100 | 1,236,539 | ||||||
PhotoMedex, Inc. *(c) | 18,000 | 69,120 | ||||||
Quality Systems, Inc. | 73,100 | 1,104,541 | ||||||
Quidel Corp. * | 40,300 | 1,150,565 | ||||||
RadNet, Inc. * | 48,000 | 446,400 | ||||||
Rockwell Medical, Inc. *(c) | 56,300 | 490,936 | ||||||
Roka Bioscience, Inc. * | 11,800 | 116,820 | ||||||
RTI Surgical, Inc. * | 73,900 | 376,151 | ||||||
Select Medical Holdings Corp. | 115,500 | 1,665,510 | ||||||
Skilled Healthcare Group, Inc., Class A * | 48,200 | 334,026 | ||||||
STAAR Surgical Co. * | 52,900 | 506,253 | ||||||
STERIS Corp. | 88,188 | 5,450,018 | ||||||
Surgical Care Affiliates, Inc. * | 20,009 | 613,876 | ||||||
SurModics, Inc. * | 20,400 | 441,660 | ||||||
Symmetry Medical, Inc. * | 53,900 | 533,610 | ||||||
Tandem Diabetes Care, Inc. * | 13,300 | 213,598 | ||||||
Team Health Holdings, Inc. * | 104,367 | 6,527,112 | ||||||
The Ensign Group, Inc. | 30,000 | 1,161,600 | ||||||
The Providence Service Corp. * | 17,400 | 768,732 | ||||||
The Spectranetics Corp. * | 62,536 | 1,986,769 | ||||||
Thoratec Corp. * | 84,900 | 2,307,582 | ||||||
Tornier N.V. * | 52,200 | 1,458,990 | ||||||
TransEnterix, Inc. * | 42,100 | 172,610 |
See financial notes 27
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Triple-S Management Corp., Class B * | 33,800 | 748,332 | ||||||
TriVascular Technologies, Inc. * | 10,900 | 144,425 | ||||||
Trupanion, Inc. * | 14,200 | 94,572 | ||||||
U.S. Physical Therapy, Inc. | 19,300 | 832,795 | ||||||
Unilife Corp. *(c) | 144,000 | 528,480 | ||||||
Universal American Corp. * | 63,902 | 595,567 | ||||||
Utah Medical Products, Inc. | 4,500 | 255,600 | ||||||
Vascular Solutions, Inc. * | 27,136 | 798,070 | ||||||
Veracyte, Inc. * | 8,500 | 68,595 | ||||||
Vocera Communications, Inc. * | 30,100 | 311,535 | ||||||
Volcano Corp. * | 75,200 | 761,024 | ||||||
WellCare Health Plans, Inc. * | 64,600 | 4,384,402 | ||||||
West Pharmaceutical Services, Inc. | 108,630 | 5,567,287 | ||||||
Wright Medical Group, Inc. * | 73,200 | 2,314,584 | ||||||
Zeltiq Aesthetics, Inc. * | 42,600 | 1,092,264 | ||||||
165,826,865 | ||||||||
Household & Personal Products 0.4% | ||||||||
Central Garden & Pet Co., Class A * | 66,600 | 572,094 | ||||||
Elizabeth Arden, Inc. * | 36,298 | 595,287 | ||||||
Harbinger Group, Inc. * | 122,000 | 1,603,080 | ||||||
IGI Laboratories, Inc. * | 42,200 | 413,982 | ||||||
Inter Parfums, Inc. | 25,400 | 721,360 | ||||||
Medifast, Inc. * | 20,200 | 641,148 | ||||||
Nature’s Sunshine Products, Inc. | 15,000 | 223,500 | ||||||
Nutraceutical International Corp. * | 12,300 | 276,504 | ||||||
Oil-Dri Corp. of America | 6,887 | 207,850 | ||||||
Orchids Paper Products Co. | 11,800 | 339,368 | ||||||
Revlon, Inc., Class A * | 18,602 | 638,049 | ||||||
Synutra International, Inc. *(c) | 23,200 | 146,856 | ||||||
The Female Health Co. (c) | 31,000 | 141,670 | ||||||
USANA Health Sciences, Inc. * | 9,100 | 1,037,218 | ||||||
WD-40 Co. | 22,300 | 1,709,741 | ||||||
9,267,707 | ||||||||
Insurance 2.6% | ||||||||
Ambac Financial Group, Inc. * | 68,500 | 1,567,280 | ||||||
American Equity Investment Life Holding Co. | 109,064 | 2,814,942 | ||||||
AMERISAFE, Inc. | 29,335 | 1,223,270 | ||||||
AmTrust Financial Services, Inc. (c) | 43,677 | 1,959,787 | ||||||
Argo Group International Holdings Ltd. | 40,191 | 2,242,658 | ||||||
Atlas Financial Holdings, Inc. * | 16,900 | 250,627 | ||||||
Baldwin & Lyons, Inc., Class B | 13,000 | 349,960 | ||||||
Citizens, Inc. *(c) | 62,600 | 456,354 | ||||||
CNO Financial Group, Inc. | 333,600 | 6,048,168 | ||||||
Crawford & Co., Class B | 44,000 | 447,920 | ||||||
Donegal Group, Inc., Class A | 10,400 | 164,528 | ||||||
eHealth, Inc. * | 28,600 | 713,570 | ||||||
EMC Insurance Group, Inc. | 6,200 | 198,648 | ||||||
Employers Holdings, Inc. | 44,900 | 915,511 | ||||||
Enstar Group Ltd. * | 12,494 | 1,849,987 | ||||||
FBL Financial Group, Inc., Class A | 13,868 | 687,575 | ||||||
Federated National Holding Co. | 23,300 | 779,618 | ||||||
Fidelity & Guaranty Life | 14,800 | 351,500 | ||||||
First American Financial Corp. | 160,900 | 4,878,488 | ||||||
Global Indemnity plc * | 10,755 | 311,680 | ||||||
Greenlight Capital Re Ltd., Class A * | 42,789 | 1,388,503 | ||||||
Hallmark Financial Services, Inc. * | 21,200 | 247,192 | ||||||
HCI Group, Inc. | 13,800 | 701,592 | ||||||
Heritage Insurance Holdings, Inc. * | 10,100 | 179,376 | ||||||
Hilltop Holdings, Inc. * | 99,639 | 2,195,047 | ||||||
Horace Mann Educators Corp. | 59,578 | 1,811,767 | ||||||
Independence Holding Co. | 11,248 | 159,159 | ||||||
Infinity Property & Casualty Corp. | 16,592 | 1,211,382 | ||||||
Kansas City Life Insurance Co. | 5,700 | 282,891 | ||||||
Kemper Corp. | 68,200 | 2,513,170 | ||||||
Maiden Holdings Ltd. | 76,900 | 918,955 | ||||||
Meadowbrook Insurance Group, Inc. | 71,400 | 454,818 | ||||||
Montpelier Re Holdings Ltd. | 57,500 | 1,905,550 | ||||||
National General Holdings Corp. | 52,100 | 976,875 | ||||||
National Interstate Corp. | 12,498 | 355,443 | ||||||
National Western Life Insurance Co., Class A | 3,494 | 946,874 | ||||||
OneBeacon Insurance Group Ltd., Class A | 33,400 | 532,062 | ||||||
Platinum Underwriters Holdings Ltd. | 39,500 | 2,473,885 | ||||||
Primerica, Inc. | 80,100 | 4,097,115 | ||||||
RLI Corp. | 64,420 | 3,194,588 | ||||||
Safety Insurance Group, Inc. | 19,770 | 1,233,253 | ||||||
Selective Insurance Group, Inc. | 84,514 | 2,182,151 | ||||||
State Auto Financial Corp. | 24,726 | 517,515 | ||||||
Stewart Information Services Corp. | 30,400 | 1,073,728 | ||||||
Symetra Financial Corp. | 110,600 | 2,621,220 | ||||||
The Navigators Group, Inc. * | 14,970 | 1,019,307 | ||||||
The Phoenix Cos., Inc. * | 7,790 | 462,414 | ||||||
Third Point Reinsurance Ltd. * | 83,300 | 1,274,490 | ||||||
United Fire Group, Inc. | 32,300 | 1,049,104 | ||||||
United Insurance Holdings Corp. | 24,400 | 478,240 | ||||||
Universal Insurance Holdings, Inc. | 50,622 | 885,885 | ||||||
67,555,622 | ||||||||
Materials 4.8% | ||||||||
A. Schulman, Inc. | 44,309 | 1,568,982 | ||||||
A.M. Castle & Co. * | 29,100 | 213,885 | ||||||
Advanced Emissions Solutions, Inc. * | 32,600 | 659,172 | ||||||
AEP Industries, Inc. * | 5,800 | 266,742 | ||||||
AK Steel Holding Corp. * | 262,900 | 1,990,153 | ||||||
Allied Nevada Gold Corp. *(c) | 148,100 | 205,859 | ||||||
American Vanguard Corp. | 40,900 | 471,986 | ||||||
Ampco-Pittsburgh Corp. | 11,400 | 248,406 | ||||||
Axiall Corp. | 104,321 | 4,204,136 | ||||||
Balchem Corp. | 45,400 | 2,937,380 | ||||||
Berry Plastics Group, Inc. * | 131,900 | 3,432,038 | ||||||
Boise Cascade Co. * | 57,800 | 2,084,268 | ||||||
Calgon Carbon Corp. * | 81,285 | 1,709,424 |
28 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Century Aluminum Co. * | 79,100 | 2,316,048 | ||||||
Chase Corp. | 8,600 | 308,482 | ||||||
Chemtura Corp. * | 140,300 | 3,267,587 | ||||||
Clearwater Paper Corp. * | 30,000 | 1,930,500 | ||||||
Coeur Mining, Inc. * | 154,650 | 572,205 | ||||||
Commercial Metals Co. | 172,600 | 2,984,254 | ||||||
Deltic Timber Corp. | 17,204 | 1,119,808 | ||||||
Ferro Corp. * | 110,900 | 1,455,008 | ||||||
Flotek Industries, Inc. * | 78,900 | 1,748,424 | ||||||
FutureFuel Corp. | 31,000 | 412,920 | ||||||
Globe Specialty Metals, Inc. | 97,300 | 1,830,213 | ||||||
Gold Resource Corp. (c) | 67,484 | 262,513 | ||||||
Graphic Packaging Holding Co. * | 489,715 | 5,940,243 | ||||||
H.B. Fuller Co. | 73,416 | 3,081,270 | ||||||
Handy & Harman Ltd. * | 7,800 | 275,418 | ||||||
Hawkins, Inc. | 15,500 | 596,905 | ||||||
Haynes International, Inc. | 17,525 | 814,737 | ||||||
Headwaters, Inc. * | 112,100 | 1,423,670 | ||||||
Hecla Mining Co. | 524,140 | 1,142,625 | ||||||
Horsehead Holding Corp. * | 73,200 | 1,149,972 | ||||||
Innophos Holdings, Inc. | 32,900 | 1,875,300 | ||||||
Innospec, Inc. | 35,600 | 1,437,172 | ||||||
Intrepid Potash, Inc. * | 86,500 | 1,163,425 | ||||||
Kaiser Aluminum Corp. | 26,450 | 1,839,597 | ||||||
KapStone Paper & Packaging Corp. * | 125,200 | 3,851,152 | ||||||
KMG Chemicals, Inc. | 12,300 | 217,710 | ||||||
Koppers Holdings, Inc. | 30,900 | 1,219,932 | ||||||
Kraton Performance Polymers, Inc. * | 47,500 | 849,775 | ||||||
Kronos Worldwide, Inc. | 30,700 | 412,608 | ||||||
Landec Corp. * | 44,654 | 562,194 | ||||||
Louisiana-Pacific Corp. * | 221,000 | 3,226,600 | ||||||
LSB Industries, Inc. * | 28,000 | 1,050,840 | ||||||
Marrone Bio Innovations, Inc. *(c) | 16,800 | 44,016 | ||||||
Materion Corp. | 29,600 | 1,167,720 | ||||||
Minerals Technologies, Inc. | 50,622 | 3,883,214 | ||||||
Molycorp, Inc. *(c) | 267,100 | 368,598 | ||||||
Myers Industries, Inc. | 43,900 | 655,866 | ||||||
Neenah Paper, Inc. | 25,453 | 1,552,888 | ||||||
Noranda Aluminum Holding Corp. | 75,000 | 330,750 | ||||||
Olin Corp. | 118,700 | 2,877,288 | ||||||
Olympic Steel, Inc. | 12,200 | 245,464 | ||||||
OM Group, Inc. | 48,100 | 1,252,043 | ||||||
OMNOVA Solutions, Inc. * | 65,700 | 461,871 | ||||||
P.H. Glatfelter Co. | 63,800 | 1,609,674 | ||||||
PolyOne Corp. | 144,754 | 5,357,346 | ||||||
Quaker Chemical Corp. | 20,100 | 1,649,808 | ||||||
Rentech, Inc. * | 316,700 | 503,553 | ||||||
Resolute Forest Products, Inc. * | 95,700 | 1,776,192 | ||||||
RTI International Metals, Inc. * | 47,966 | 1,129,599 | ||||||
Ryerson Holding Corp. * | 14,000 | 178,920 | ||||||
Schnitzer Steel Industries, Inc., Class A | 37,800 | 890,190 | ||||||
Schweitzer-Mauduit International, Inc. | 44,700 | 1,924,782 | ||||||
Senomyx, Inc. * | 62,400 | 494,208 | ||||||
Sensient Technologies Corp. | 73,724 | 4,362,986 | ||||||
Stepan Co. | 28,500 | 1,261,980 | ||||||
Stillwater Mining Co. * | 175,600 | 2,305,628 | ||||||
SunCoke Energy, Inc. * | 105,700 | 2,526,230 | ||||||
Taminco Corp. * | 41,800 | 1,082,202 | ||||||
Trecora Resources * | 27,400 | 360,310 | ||||||
Tredegar Corp. | 35,100 | 667,602 | ||||||
Trinseo S.A. * | 15,600 | 225,420 | ||||||
Tronox Ltd., Class A | 90,200 | 2,181,036 | ||||||
UFP Technologies, Inc. * | 7,500 | 165,150 | ||||||
United States Lime & Minerals, Inc. | 2,700 | 189,297 | ||||||
Universal Stainless & Alloy Products, Inc. * | 9,500 | 244,245 | ||||||
US Concrete, Inc. * | 19,200 | 474,240 | ||||||
US Silica Holdings, Inc. | 81,400 | 3,654,860 | ||||||
Walter Energy, Inc. (c) | 108,364 | 261,157 | ||||||
Wausau Paper Corp. | 58,500 | 578,565 | ||||||
Worthington Industries, Inc. | 75,460 | 2,916,529 | ||||||
Zep, Inc. | 32,600 | 523,556 | ||||||
122,666,521 | ||||||||
Media 1.4% | ||||||||
AH Belo Corp., Class A | 26,900 | 309,619 | ||||||
AMC Entertainment Holdings, Inc., Class A | 31,500 | 800,100 | ||||||
Carmike Cinemas, Inc. * | 38,400 | 1,230,720 | ||||||
Central European Media Enterprises Ltd., Class A * | 109,100 | 265,113 | ||||||
Cinedigm Corp., Class A * | 112,300 | 174,065 | ||||||
Crown Media Holdings, Inc., Class A * | 46,700 | 162,983 | ||||||
Cumulus Media, Inc., Class A * | 235,000 | 907,100 | ||||||
Daily Journal Corp. * | 1,300 | 237,445 | ||||||
Dex Media, Inc. *(c) | 24,400 | 190,076 | ||||||
Entercom Communications Corp., Class A * | 32,400 | 333,072 | ||||||
Entravision Communications Corp., Class A | 78,600 | 405,576 | ||||||
Eros International plc * | 35,990 | 664,375 | ||||||
Global Sources Ltd. *(c) | 25,900 | 189,847 | ||||||
Gray Television, Inc. * | 71,700 | 662,508 | ||||||
Harte-Hanks, Inc. | 75,416 | 490,958 | ||||||
Hemisphere Media Group, Inc. * | 12,300 | 157,440 | ||||||
Journal Communications, Inc., Class A * | 71,200 | 698,472 | ||||||
Lee Enterprises, Inc. * | 78,600 | 293,178 | ||||||
Loral Space & Communications, Inc. * | 20,300 | 1,552,950 | ||||||
Martha Stewart Living Omnimedia, Inc., Class A * | 36,500 | 158,045 | ||||||
MDC Partners, Inc., Class A | 64,480 | 1,334,736 | ||||||
Media General, Inc. * | 79,800 | 1,192,212 | ||||||
Meredith Corp. | 54,100 | 2,820,774 | ||||||
National CineMedia, Inc. | 86,800 | 1,380,120 | ||||||
New Media Investment Group, Inc. | 51,100 | 973,966 | ||||||
Nexstar Broadcasting Group, Inc., Class A (c) | 44,600 | 2,012,352 | ||||||
Radio One, Inc., Class D * | 33,900 | 84,411 | ||||||
ReachLocal, Inc. *(c) | 13,400 | 60,702 | ||||||
Reading International, Inc., Class A * | 23,000 | 229,310 | ||||||
Rentrak Corp. * | 14,900 | 1,145,363 |
See financial notes 29
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Saga Communications, Inc., Class A | 6,400 | 256,640 | ||||||
Salem Communications Corp., Class A | 14,100 | 108,711 | ||||||
Scholastic Corp. | 38,469 | 1,339,106 | ||||||
SFX Entertainment, Inc. *(c) | 64,800 | 333,072 | ||||||
Sinclair Broadcast Group, Inc., Class A (c) | 103,600 | 3,009,580 | ||||||
Sizmek, Inc. * | 36,700 | 210,291 | ||||||
The E.W. Scripps Co., Class A * | 50,500 | 969,600 | ||||||
The McClatchy Co., Class A * | 102,100 | 363,476 | ||||||
The New York Times Co., Class A | 203,000 | 2,606,520 | ||||||
Time, Inc. * | 169,700 | 3,833,523 | ||||||
Townsquare Media, Inc. * | 10,100 | 127,361 | ||||||
World Wrestling Entertainment, Inc., Class A (c) | 41,400 | 511,290 | ||||||
34,786,758 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.5% | ||||||||
ACADIA Pharmaceuticals, Inc. * | 115,400 | 3,196,580 | ||||||
Accelerate Diagnostics, Inc. *(c) | 33,300 | 723,276 | ||||||
Acceleron Pharma, Inc. * | 24,100 | 891,218 | ||||||
AcelRx Pharmaceuticals, Inc. *(c) | 40,200 | 266,526 | ||||||
Achaogen, Inc. * | 10,100 | 107,262 | ||||||
Achillion Pharmaceuticals, Inc. * | 149,000 | 1,750,750 | ||||||
Acorda Therapeutics, Inc. * | 68,200 | 2,374,724 | ||||||
Actinium Pharmaceuticals, Inc. *(c) | 29,100 | 205,737 | ||||||
Adamas Pharmaceuticals, Inc. * | 5,500 | 83,765 | ||||||
Aegerion Pharmaceuticals, Inc. * | 43,100 | 870,189 | ||||||
Aerie Pharmaceuticals, Inc. * | 16,000 | 403,520 | ||||||
Affymetrix, Inc. * | 110,900 | 999,209 | ||||||
Agenus, Inc. * | 91,300 | 272,074 | ||||||
Agios Pharmaceuticals, Inc. * | 19,900 | 1,672,197 | ||||||
Akebia Therapeutics, Inc. *(c) | 11,500 | 149,040 | ||||||
Akorn, Inc. * | 92,794 | 4,133,973 | ||||||
Albany Molecular Research, Inc. * | 33,200 | 772,232 | ||||||
Alder Biopharmaceuticals, Inc. *(c) | 11,700 | 209,547 | ||||||
Alimera Sciences, Inc. *(c) | 45,500 | 259,350 | ||||||
AMAG Pharmaceuticals, Inc. * | 30,500 | 1,006,805 | ||||||
Amphastar Pharmaceuticals, Inc. * | 12,700 | 128,778 | ||||||
Ampio Pharmaceuticals, Inc. *(c) | 58,200 | 225,816 | ||||||
Anacor Pharmaceuticals, Inc. * | 48,300 | 1,420,503 | ||||||
ANI Pharmaceuticals, Inc. * | 10,100 | 342,996 | ||||||
Applied Genetic Technologies Corp. * | 7,100 | 142,710 | ||||||
Aratana Therapeutics, Inc. * | 35,800 | 400,960 | ||||||
Ardelyx, Inc. * | 8,500 | 186,405 | ||||||
Arena Pharmaceuticals, Inc. *(c) | 321,600 | 1,402,176 | ||||||
ARIAD Pharmaceuticals, Inc. *(c) | 241,800 | 1,441,128 | ||||||
Array BioPharma, Inc. * | 179,400 | 644,046 | ||||||
Arrowhead Research Corp. *(c) | 76,100 | 496,172 | ||||||
Auspex Pharmaceuticals, Inc. * | 12,000 | 325,200 | ||||||
Auxilium Pharmaceuticals, Inc. *(c) | 74,900 | 2,409,533 | ||||||
Avalanche Biotechnologies, Inc. * | 10,100 | 362,388 | ||||||
Avanir Pharmaceuticals, Inc. * | 288,554 | 3,733,889 | ||||||
Bio-Path Holdings, Inc. *(c) | 107,700 | 314,484 | ||||||
BioCryst Pharmaceuticals, Inc. * | 102,800 | 1,204,816 | ||||||
BioDelivery Sciences International, Inc. * | 60,000 | 1,044,000 | ||||||
BioSpecifics Technologies Corp. * | 5,300 | 212,636 | ||||||
BioTime, Inc. *(c) | 83,500 | 283,065 | ||||||
Bluebird Bio, Inc. * | 32,172 | 1,350,902 | ||||||
Cambrex Corp. * | 43,300 | 912,764 | ||||||
Cara Therapeutics, Inc. * | 8,000 | 72,080 | ||||||
Catalent, Inc. * | 67,700 | 1,762,231 | ||||||
Celldex Therapeutics, Inc. * | 133,300 | 2,232,775 | ||||||
Cellular Dynamics International, Inc. *(c) | 14,300 | 111,111 | ||||||
Cempra, Inc. * | 39,878 | 542,341 | ||||||
Cepheid * | 102,700 | 5,444,127 | ||||||
ChemoCentryx, Inc. *(c) | 35,000 | 196,700 | ||||||
Chimerix, Inc. * | 39,600 | 1,229,184 | ||||||
Clovis Oncology, Inc. * | 36,200 | 2,159,692 | ||||||
Corcept Therapeutics, Inc. * | 68,400 | 222,300 | ||||||
CTI BioPharma, Corp. *(c) | 190,800 | 465,552 | ||||||
Cytokinetics, Inc. * | 45,900 | 168,453 | ||||||
Cytori Therapeutics, Inc. *(c) | 78,000 | 40,482 | ||||||
CytRx Corp. *(c) | 81,800 | 233,948 | ||||||
Dendreon Corp. *(c) | 227,500 | 222,836 | ||||||
Depomed, Inc. * | 86,900 | 1,338,260 | ||||||
Dicerna Pharmaceuticals, Inc. *(c) | 5,200 | 48,724 | ||||||
Durata Therapeutics, Inc. * | 25,300 | 607,959 | ||||||
Dyax Corp. * | 201,100 | 2,487,607 | ||||||
Dynavax Technologies Corp. * | 381,000 | 624,840 | ||||||
Egalet Corp. * | 9,500 | 71,345 | ||||||
Eleven Biotherapeutics, Inc. * | 7,500 | 79,200 | ||||||
Emergent Biosolutions, Inc. * | 43,700 | 988,494 | ||||||
Enanta Pharmaceuticals, Inc. * | 15,200 | 653,600 | ||||||
Endocyte, Inc. *(c) | 50,400 | 301,644 | ||||||
Enzo Biochem, Inc. * | 50,100 | 261,522 | ||||||
Epizyme, Inc. * | 18,800 | 498,764 | ||||||
Esperion Therapeutics, Inc. * | 7,100 | 207,675 | ||||||
Exact Sciences Corp. *(c) | 123,900 | 2,982,273 | ||||||
Exelixis, Inc. *(c) | 292,872 | 497,882 | ||||||
Five Prime Therapeutics, Inc. * | 25,300 | 329,912 | ||||||
Flexion Therapeutics, Inc. * | 7,800 | 152,802 | ||||||
Fluidigm Corp. * | 39,800 | 1,154,200 | ||||||
Foundation Medicine, Inc. *(c) | 20,500 | 530,540 | ||||||
Galectin Therapeutics, Inc. *(c) | 26,400 | 143,088 | ||||||
Galena Biopharma, Inc. *(c) | 189,700 | 388,885 | ||||||
Genocea Biosciences, Inc. * | 7,100 | 62,338 | ||||||
Genomic Health, Inc. *(c) | 27,200 | 988,448 | ||||||
Geron Corp. *(c) | 231,200 | 515,576 | ||||||
Halozyme Therapeutics, Inc. * | 154,100 | 1,482,442 | ||||||
Heron Therapeutics, Inc. * | 40,750 | 359,415 | ||||||
Horizon Pharma plc *(c) | 96,900 | 1,253,886 | ||||||
Hyperion Therapeutics, Inc. * | 20,000 | 486,000 | ||||||
Idera Pharmaceuticals, Inc. *(c) | 88,300 | 225,165 | ||||||
Immune Design, Corp. * | 8,200 | 254,118 | ||||||
ImmunoGen, Inc. * | 128,000 | 1,185,280 | ||||||
Immunomedics, Inc. *(c) | 132,300 | 522,585 | ||||||
Impax Laboratories, Inc. * | 101,900 | 2,952,043 | ||||||
Infinity Pharmaceuticals, Inc. * | 68,300 | 930,246 | ||||||
Inovio Pharmaceuticals, Inc. *(c) | 88,300 | 1,003,088 | ||||||
Insmed, Inc. * | 78,600 | 1,115,334 | ||||||
Insys Therapeutics, Inc. *(c) | 14,700 | 597,923 |
30 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Intersect ENT, Inc. * | 8,400 | 159,516 | ||||||
Intra-Cellular Therapies, Inc. * | 25,100 | 389,050 | ||||||
Intrexon Corp. *(c) | 52,300 | 1,167,336 | ||||||
Ironwood Pharmaceuticals, Inc. * | 175,300 | 2,457,706 | ||||||
Isis Pharmaceuticals, Inc. * | 177,200 | 8,161,832 | ||||||
Karyopharm Therapeutics, Inc. *(c) | 21,351 | 877,099 | ||||||
Keryx Biopharmaceuticals, Inc. * | 137,934 | 2,324,188 | ||||||
Kindred Biosciences, Inc. * | 12,900 | 118,293 | ||||||
Kite Pharma, Inc. *(c) | 12,800 | 473,472 | ||||||
KYTHERA Biopharmaceuticals, Inc. * | 25,500 | 898,875 | ||||||
Lannett Co., Inc. * | 37,700 | 2,138,344 | ||||||
Lexicon Pharmaceuticals, Inc. * | 324,100 | 469,945 | ||||||
Ligand Pharmaceuticals, Inc. * | 30,400 | 1,680,208 | ||||||
Loxo Oncology, Inc. * | 8,900 | 96,031 | ||||||
Luminex Corp. * | 53,200 | 1,010,800 | ||||||
MacroGenics, Inc. * | 29,300 | 623,797 | ||||||
MannKind Corp. *(c) | 334,600 | 2,010,946 | ||||||
Merrimack Pharmaceuticals, Inc. *(c) | 153,100 | 1,403,927 | ||||||
MiMedx Group, Inc. *(c) | 131,700 | 1,340,706 | ||||||
Mirati Therapeutics, Inc. *(c) | 10,500 | 176,085 | ||||||
Momenta Pharmaceuticals, Inc. * | 71,144 | 776,181 | ||||||
NanoString Technologies, Inc. * | 14,700 | 156,555 | ||||||
NanoViricides, Inc. *(c) | 58,800 | 224,028 | ||||||
Navidea Biopharmaceuticals, Inc. *(c) | 221,100 | 298,485 | ||||||
Nektar Therapeutics * | 192,771 | 2,658,312 | ||||||
NeoStem, Inc. *(c) | 34,700 | 178,011 | ||||||
Neuralstem, Inc. *(c) | 100,900 | 277,475 | ||||||
Neurocrine Biosciences, Inc. * | 112,600 | 2,085,352 | ||||||
NewLink Genetics Corp. *(c) | 29,100 | 950,115 | ||||||
Northwest Biotherapeutics, Inc. *(c) | 52,100 | 274,046 | ||||||
Novavax, Inc. * | 351,736 | 1,969,722 | ||||||
NPS Pharmaceuticals, Inc. * | 161,900 | 4,436,060 | ||||||
Ohr Pharmaceutical, Inc. *(c) | 30,900 | 224,025 | ||||||
Omeros Corp. *(c) | 51,500 | 853,355 | ||||||
OncoMed Pharmaceuticals, Inc. *(c) | 18,500 | 384,245 | ||||||
Oncothyreon, Inc. * | 103,800 | 186,840 | ||||||
Ophthotech Corp. * | 20,400 | 851,088 | ||||||
OPKO Health, Inc. *(c) | 293,200 | 2,448,220 | ||||||
Orexigen Therapeutics, Inc. *(c) | 204,800 | 831,488 | ||||||
Organovo Holdings, Inc. *(c) | 91,700 | 599,718 | ||||||
Osiris Therapeutics, Inc. * | 28,800 | 392,544 | ||||||
Otonomy, Inc. * | 10,500 | 276,675 | ||||||
OvaScience, Inc. * | 24,000 | 468,720 | ||||||
Pacific Biosciences of California, Inc. * | 85,600 | 561,536 | ||||||
Pacira Pharmaceuticals, Inc. * | 53,800 | 4,993,716 | ||||||
Pain Therapeutics, Inc. * | 55,800 | 97,092 | ||||||
PAREXEL International Corp. * | 85,418 | 4,639,052 | ||||||
PDL BioPharma, Inc. (c) | 239,600 | 2,043,788 | ||||||
Peregrine Pharmaceuticals, Inc. *(c) | 255,100 | 408,160 | ||||||
Pernix Therapeutics Holdings, Inc. * | 48,800 | 475,800 | ||||||
Phibro Animal Health Corp., Class A | 21,500 | 557,280 | ||||||
Portola Pharmaceuticals, Inc. * | 64,100 | 1,826,850 | ||||||
POZEN, Inc. * | 35,400 | 321,078 | ||||||
Prestige Brands Holdings, Inc. * | 78,700 | 2,787,554 | ||||||
Progenics Pharmaceuticals, Inc. * | 106,000 | 511,980 | ||||||
Prothena Corp. plc * | 39,384 | 863,691 | ||||||
PTC Therapeutics, Inc. * | 32,600 | 1,332,362 | ||||||
Puma Biotechnology, Inc. * | 34,800 | 8,720,880 | ||||||
Radius Health, Inc. * | 10,600 | 195,146 | ||||||
Raptor Pharmaceutical Corp. *(c) | 93,100 | 894,691 | ||||||
Receptos, Inc. * | 27,385 | 2,838,455 | ||||||
Regado Biosciences, Inc. *(c) | 60,501 | 61,711 | ||||||
Regulus Therapeutics, Inc. *(c) | 18,100 | 361,276 | ||||||
Relypsa, Inc. * | 24,800 | 510,136 | ||||||
Repligen Corp. * | 49,100 | 1,238,302 | ||||||
Repros Therapeutics, Inc. *(c) | 32,700 | 207,318 | ||||||
Retrophin, Inc. *(c) | 34,400 | 332,992 | ||||||
Revance Therapeutics, Inc. * | 13,813 | 278,470 | ||||||
Rigel Pharmaceuticals, Inc. * | 118,400 | 234,432 | ||||||
Sage Therapeutics, Inc. * | 8,000 | 312,960 | ||||||
Sagent Pharmaceuticals, Inc. * | 34,569 | 1,093,763 | ||||||
Sangamo BioSciences, Inc. * | 99,700 | 1,210,358 | ||||||
Sarepta Therapeutics, Inc. *(c) | 60,900 | 984,753 | ||||||
SciClone Pharmaceuticals, Inc. * | 78,000 | �� | 595,920 | |||||
Sequenom, Inc. *(c) | 166,100 | 543,147 | ||||||
Spectrum Pharmaceuticals, Inc. * | 120,700 | 914,906 | ||||||
Stemline Therapeutics, Inc. * | 13,000 | 200,070 | ||||||
Sucampo Pharmaceuticals, Inc., Class A *(c) | 31,100 | 268,082 | ||||||
Sunesis Pharmaceuticals, Inc. *(c) | 72,600 | 123,420 | ||||||
Supernus Pharmaceuticals, Inc. * | 43,000 | 345,290 | ||||||
Synageva BioPharma Corp. * | 32,388 | 2,453,067 | ||||||
Synergy Pharmaceuticals, Inc. *(c) | 140,600 | 482,258 | ||||||
Synta Pharmaceuticals Corp. *(c) | 87,300 | 258,408 | ||||||
T2 Biosystems, Inc. *(c) | 9,200 | 148,580 | ||||||
TESARO, Inc. * | 28,300 | 787,306 | ||||||
Tetraphase Pharmaceuticals, Inc. * | 32,300 | 771,970 | ||||||
TG Therapeutics, Inc. *(c) | 34,400 | 378,056 | ||||||
The Medicines Co. * | 98,099 | 2,483,867 | ||||||
TherapeuticsMD, Inc. * | 171,400 | 761,016 | ||||||
Theravance Biopharma, Inc. *(c) | 34,500 | 631,350 | ||||||
Theravance, Inc. (c) | 120,800 | 1,935,216 | ||||||
Threshold Pharmaceuticals, Inc. * | 88,794 | 260,166 | ||||||
Ultragenyx Pharmaceutical, Inc. * | 9,900 | 465,399 | ||||||
Vanda Pharmaceuticals, Inc. *(c) | 47,300 | 568,073 | ||||||
Verastem, Inc. * | 30,000 | 284,700 | ||||||
Versartis, Inc. *(c) | 10,200 | 203,082 | ||||||
Vital Therapies, Inc. *(c) | 7,600 | 131,176 | ||||||
VIVUS, Inc. *(c) | 147,300 | 499,347 | ||||||
Xencor, Inc. * | 21,900 | 236,301 | ||||||
XenoPort, Inc. * | 80,000 | 542,400 | ||||||
XOMA Corp. * | 113,500 | 486,915 | ||||||
Zafgen, Inc. * | 8,500 | 181,050 | ||||||
ZIOPHARM Oncology, Inc. *(c) | 116,700 | 387,444 | ||||||
Zogenix, Inc. * | 154,200 | 195,834 | ||||||
ZS Pharma, Inc. *(c) | 10,100 | 379,962 | ||||||
192,299,032 | ||||||||
Real Estate 9.5% | ||||||||
Acadia Realty Trust | 86,287 | 2,692,154 |
See financial notes 31
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
AG Mortgage Investment Trust, Inc. | 41,300 | 787,591 | ||||||
Agree Realty Corp. | 21,600 | 661,176 | ||||||
Alexander & Baldwin, Inc. | 71,500 | 2,862,145 | ||||||
Alexander’s, Inc. | 3,000 | 1,326,000 | ||||||
Altisource Asset Management Corp. * | 2,100 | 1,134,000 | ||||||
Altisource Portfolio Solutions S.A. *(c) | 21,400 | 1,597,724 | ||||||
Altisource Residential Corp. | 87,800 | 2,038,716 | ||||||
American Assets Trust, Inc. | 52,100 | 1,997,514 | ||||||
American Capital Mortgage Investment Corp. | 76,700 | 1,502,553 | ||||||
American Realty Capital Healthcare Trust, Inc. | 248,400 | 2,806,920 | ||||||
American Residential Properties, Inc. * | 47,200 | 896,800 | ||||||
AmREIT, Inc. | 28,100 | 692,384 | ||||||
Anworth Mortgage Asset Corp. | 187,700 | 974,163 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 69,100 | 1,136,004 | ||||||
Apollo Residential Mortgage, Inc. | 50,875 | 848,595 | ||||||
Ares Commercial Real Estate Corp. | 41,900 | 509,504 | ||||||
Armada Hoffler Properties, Inc. | 40,500 | 379,890 | ||||||
ARMOUR Residential REIT, Inc. | 554,300 | 2,195,028 | ||||||
Ashford Hospitality Prime, Inc. | 37,220 | 645,023 | ||||||
Ashford Hospitality Trust, Inc. | 101,000 | 1,141,300 | ||||||
Associated Estates Realty Corp. | 88,100 | 1,720,593 | ||||||
AV Homes, Inc. * | 15,600 | 233,844 | ||||||
Aviv REIT, Inc. | 28,900 | 974,797 | ||||||
Campus Crest Communities, Inc. | 92,100 | 583,914 | ||||||
Capstead Mortgage Corp. | 141,200 | 1,794,652 | ||||||
CareTrust REIT, Inc. * | 30,000 | 465,900 | ||||||
CatchMark Timber Trust, Inc., Class A | 28,151 | 329,367 | ||||||
Cedar Realty Trust, Inc. | 119,200 | 820,096 | ||||||
Chambers Street Properties | 354,900 | 2,913,729 | ||||||
Chatham Lodging Trust | 47,000 | 1,204,140 | ||||||
Chesapeake Lodging Trust | 78,600 | 2,596,944 | ||||||
Colony Financial, Inc. | 158,626 | 3,534,187 | ||||||
Consolidated-Tomoka Land Co. | 8,000 | 417,520 | ||||||
CorEnergy Infrastructure Trust, Inc. | 46,400 | 348,464 | ||||||
CoreSite Realty Corp. | 31,300 | 1,158,726 | ||||||
Cousins Properties, Inc. | 328,873 | 4,278,638 | ||||||
CubeSmart | 240,643 | 5,065,535 | ||||||
CyrusOne, Inc. | 48,589 | 1,326,966 | ||||||
CYS Investments, Inc. | 237,700 | 2,122,661 | ||||||
DCT Industrial Trust, Inc. | 484,700 | 4,153,879 | ||||||
DiamondRock Hospitality Co. | 288,917 | 4,145,959 | ||||||
DuPont Fabros Technology, Inc. | 94,000 | 2,911,180 | ||||||
Dynex Capital, Inc. | 76,500 | 644,130 | ||||||
EastGroup Properties, Inc. | 46,790 | 3,221,959 | ||||||
Education Realty Trust, Inc. | 206,139 | 2,321,125 | ||||||
Empire State Realty Trust, Inc., Class A | 134,400 | 2,145,024 | ||||||
EPR Properties | 83,900 | 4,706,790 | ||||||
Equity One, Inc. | 90,337 | 2,168,088 | ||||||
Excel Trust, Inc. | 90,284 | 1,173,692 | ||||||
FelCor Lodging Trust, Inc. | 203,100 | 2,179,263 | ||||||
First Industrial Realty Trust, Inc. | 165,614 | 3,234,441 | ||||||
First Potomac Realty Trust | 90,700 | 1,133,750 | ||||||
Forestar Group, Inc. * | 49,700 | 867,265 | ||||||
Franklin Street Properties Corp. | 134,065 | 1,607,439 | ||||||
Getty Realty Corp. | 39,242 | 730,294 | ||||||
Gladstone Commercial Corp. | 24,300 | 439,830 | ||||||
Glimcher Realty Trust | 216,800 | 2,976,664 | ||||||
Government Properties Income Trust | 100,847 | 2,301,328 | ||||||
Gramercy Property Trust, Inc. | 172,500 | 1,078,125 | ||||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 29,100 | 406,818 | ||||||
Hatteras Financial Corp. | 148,100 | 2,819,824 | ||||||
Healthcare Realty Trust, Inc. | 142,081 | 3,760,884 | ||||||
Hersha Hospitality Trust | 291,700 | 2,126,493 | ||||||
Highwoods Properties, Inc. | 133,507 | 5,723,445 | ||||||
Hudson Pacific Properties, Inc. | 80,600 | 2,201,186 | ||||||
Inland Real Estate Corp. | 133,336 | 1,414,695 | ||||||
Invesco Mortgage Capital, Inc. | 187,900 | 3,107,866 | ||||||
Investors Real Estate Trust | 180,400 | 1,515,360 | ||||||
iStar Financial, Inc. * | 125,500 | 1,780,845 | ||||||
Kennedy-Wilson Holdings, Inc. | 105,400 | 2,855,286 | ||||||
Kite Realty Group Trust | 47,375 | 1,226,539 | ||||||
LaSalle Hotel Properties | 159,626 | 6,258,935 | ||||||
Lexington Realty Trust | 317,484 | 3,479,625 | ||||||
LTC Properties, Inc. | 52,651 | 2,208,183 | ||||||
Mack-Cali Realty Corp. | 130,100 | 2,436,773 | ||||||
Medical Properties Trust, Inc. | 256,100 | 3,454,789 | ||||||
Monmouth Real Estate Investment Corp. | 84,500 | 946,400 | ||||||
National Health Investors, Inc. | 48,468 | 3,194,526 | ||||||
New Residential Investment Corp. | 210,322 | 2,603,786 | ||||||
New York Mortgage Trust, Inc. (c) | 135,700 | 1,059,817 | ||||||
New York REIT, Inc. | 258,400 | 2,899,248 | ||||||
One Liberty Properties, Inc. | 18,700 | 428,043 | ||||||
Owens Realty Mortgage, Inc. | 15,800 | 236,210 | ||||||
Parkway Properties, Inc. | 113,593 | 2,277,540 | ||||||
Pebblebrook Hotel Trust | 98,300 | 4,187,580 | ||||||
Pennsylvania Real Estate Investment Trust | 103,812 | 2,224,691 | ||||||
PennyMac Mortgage Investment Trust | 109,300 | 2,359,787 | ||||||
Physicians Realty Trust | 70,300 | 1,078,402 | ||||||
Potlatch Corp. | 60,403 | 2,657,128 | ||||||
PS Business Parks, Inc. | 28,438 | 2,395,048 | ||||||
QTS Realty Trust, Inc., Class A | 19,774 | 696,440 | ||||||
RAIT Financial Trust | 119,300 | 874,469 | ||||||
Ramco-Gershenson Properties Trust | 111,121 | 1,942,395 | ||||||
RE/MAX Holdings, Inc., Class A | 16,800 | 537,600 | ||||||
Redwood Trust, Inc. | 123,500 | 2,320,565 | ||||||
Resource Capital Corp. | 196,149 | 1,037,628 | ||||||
Retail Opportunity Investments Corp. | 133,347 | 2,178,890 | ||||||
Rexford Industrial Realty, Inc. | 68,500 | 1,058,325 | ||||||
RLJ Lodging Trust | 195,282 | 6,291,986 | ||||||
Rouse Properties, Inc. (c) | 54,500 | 992,445 | ||||||
Ryman Hospitality Properties, Inc. (c) | 65,185 | 3,216,880 | ||||||
Sabra Health Care REIT, Inc. | 76,766 | 2,193,205 | ||||||
Saul Centers, Inc. | 14,300 | 785,785 | ||||||
Select Income REIT | 54,000 | 1,323,540 |
32 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Silver Bay Realty Trust Corp. | 56,433 | 955,411 | ||||||
Sovran Self Storage, Inc. | 48,845 | 4,156,221 | ||||||
STAG Industrial, Inc. | 76,100 | 1,856,840 | ||||||
Starwood Waypoint Residential Trust | 57,400 | 1,502,732 | ||||||
Strategic Hotels & Resorts, Inc. * | 382,700 | 4,917,695 | ||||||
Summit Hotel Properties, Inc. | 125,500 | 1,460,820 | ||||||
Sun Communities, Inc. | 71,300 | 4,133,261 | ||||||
Sunstone Hotel Investors, Inc. | 303,532 | 4,647,075 | ||||||
Tejon Ranch Co. * | 19,092 | 576,197 | ||||||
Terreno Realty Corp. | 48,000 | 1,010,880 | ||||||
The Geo Group, Inc. | 106,780 | 4,264,793 | ||||||
The St. Joe Co. * | 92,700 | 1,775,205 | ||||||
Trade Street Residential, Inc. | 27,200 | 187,680 | ||||||
UMH Properties, Inc. | 31,900 | 322,190 | ||||||
Universal Health Realty Income Trust | 19,444 | 942,062 | ||||||
Urstadt Biddle Properties, Inc., Class A | 39,874 | 862,475 | ||||||
Washington Real Estate Investment Trust | 99,282 | 2,805,709 | ||||||
Western Asset Mortgage Capital Corp. (c) | 59,656 | 896,033 | ||||||
Whitestone REIT | 30,700 | 460,500 | ||||||
243,365,766 | ||||||||
Retailing 4.0% | ||||||||
1-800-Flowers.com, Inc., Class A * | 34,800 | 279,444 | ||||||
Aeropostale, Inc. * | 115,000 | 346,150 | ||||||
America’s Car-Mart, Inc. * | 11,500 | 528,770 | ||||||
American Eagle Outfitters, Inc. | 294,200 | 3,786,354 | ||||||
ANN, Inc. * | 69,000 | 2,648,910 | ||||||
Asbury Automotive Group, Inc. * | 45,000 | 3,151,800 | ||||||
Barnes & Noble, Inc. * | 62,610 | 1,366,150 | ||||||
bebe stores, Inc. | 51,449 | 117,818 | ||||||
Big 5 Sporting Goods Corp. | 32,284 | 397,416 | ||||||
Blue Nile, Inc. * | 19,000 | 674,500 | ||||||
Brown Shoe Co., Inc. | 68,375 | 1,818,091 | ||||||
Build-A-Bear Workshop, Inc. * | 18,100 | 306,795 | ||||||
Burlington Stores, Inc. * | 42,000 | 1,761,480 | ||||||
Christopher & Banks Corp. * | 51,800 | 338,254 | ||||||
Citi Trends, Inc. * | 25,546 | 578,617 | ||||||
Conn’s, Inc. *(c) | 40,600 | 1,263,066 | ||||||
Core-Mark Holding Co., Inc. | 34,741 | 2,016,020 | ||||||
Coupons.com, Inc. * | 17,700 | 246,384 | ||||||
Destination Maternity Corp. | 18,400 | 275,632 | ||||||
Destination XL Group, Inc. * | 56,400 | 295,536 | ||||||
Express, Inc. * | 128,500 | 1,923,645 | ||||||
Five Below, Inc. * | 79,600 | 3,173,652 | ||||||
Francesca’s Holdings Corp. * | 62,800 | 747,948 | ||||||
Fred’s, Inc., Class A | 52,800 | 828,960 | ||||||
FTD Cos., Inc. * | 28,097 | 988,453 | ||||||
Gaiam, Inc., Class A * | 22,000 | 166,540 | ||||||
Genesco, Inc. * | 36,244 | 2,779,552 | ||||||
Group 1 Automotive, Inc. | 35,500 | 3,032,765 | ||||||
Guess?, Inc. | 90,200 | 1,999,734 | ||||||
Haverty Furniture Cos, Inc. | 30,300 | 666,903 | ||||||
hhgregg, Inc. * | 18,300 | 94,794 | ||||||
Hibbett Sports, Inc. * | 37,575 | 1,705,529 | ||||||
HSN, Inc. | 49,955 | 3,300,527 | ||||||
Kirkland’s, Inc. * | 22,400 | 398,720 | ||||||
Lands’ End, Inc. *(c) | 24,200 | 1,148,774 | ||||||
Lithia Motors, Inc., Class A | 33,700 | 2,615,794 | ||||||
Lumber Liquidators Holdings, Inc. * | 41,598 | 2,236,725 | ||||||
MarineMax, Inc. * | 37,700 | 722,709 | ||||||
Mattress Firm Holding Corp. * | 22,000 | 1,390,180 | ||||||
Monro Muffler Brake, Inc. | 49,350 | 2,637,264 | ||||||
New York & Co., Inc. * | 36,400 | 119,028 | ||||||
Nutrisystem, Inc. | 39,948 | 672,724 | ||||||
Office Depot, Inc. * | 809,610 | 4,226,164 | ||||||
Orbitz Worldwide, Inc. * | 75,700 | 626,039 | ||||||
Outerwall, Inc. *(c) | 29,900 | 1,891,773 | ||||||
Overstock.com, Inc. * | 15,500 | 358,360 | ||||||
Pacific Sunwear of California, Inc. * | 65,800 | 100,016 | ||||||
PetMed Express, Inc. (c) | 29,500 | 389,695 | ||||||
Pier 1 Imports, Inc. | 140,400 | 1,811,160 | ||||||
Pool Corp. | 66,177 | 3,950,767 | ||||||
Rent-A-Center, Inc. | 79,105 | 2,449,882 | ||||||
Restoration Hardware Holdings, Inc. * | 47,200 | 3,791,104 | ||||||
RetailMeNot, Inc. * | 45,200 | 951,912 | ||||||
Sears Hometown & Outlet Stores, Inc. * | 17,000 | 255,680 | ||||||
Select Comfort Corp. * | 79,600 | 2,044,924 | ||||||
Shoe Carnival, Inc. | 24,850 | 457,240 | ||||||
Shutterfly, Inc. * | 56,600 | 2,367,578 | ||||||
Sonic Automotive, Inc., Class A | 61,100 | 1,520,779 | ||||||
Sportsman’s Warehouse Holdings, Inc. *(c) | 12,000 | 83,880 | ||||||
Stage Stores, Inc. | 46,827 | 789,972 | ||||||
Stein Mart, Inc. | 44,300 | 592,734 | ||||||
Systemax, Inc. * | 14,500 | 221,850 | ||||||
The Bon-Ton Stores, Inc. (c) | 19,300 | 170,033 | ||||||
The Buckle, Inc. (c) | 41,664 | 2,055,285 | ||||||
The Cato Corp., Class A | 42,204 | 1,505,417 | ||||||
The Children’s Place, Inc. | 32,313 | 1,591,415 | ||||||
The Container Store Group, Inc. *(c) | 25,200 | 464,688 | ||||||
The Finish Line, Inc., Class A | 71,619 | 1,895,755 | ||||||
The Men’s Wearhouse, Inc. | 71,100 | 3,343,833 | ||||||
The Pep Boys - Manny, Moe & Jack * | 84,700 | 807,191 | ||||||
Tile Shop Holdings, Inc. *(c) | 41,100 | 353,871 | ||||||
Tilly’s, Inc., Class A * | 12,600 | 89,712 | ||||||
Tuesday Morning Corp. * | 65,800 | 1,341,662 | ||||||
ValueVision Media, Inc., Class A * | 56,000 | 316,960 | ||||||
Vitamin Shoppe, Inc. * | 45,400 | 2,130,622 | ||||||
VOXX International Corp. * | 31,300 | 266,989 | ||||||
West Marine, Inc. * | 24,500 | 241,080 | ||||||
Weyco Group, Inc. | 9,100 | 283,465 | ||||||
Winmark Corp. | 3,000 | 246,840 | ||||||
Zumiez, Inc. * | 30,100 | 1,004,738 | ||||||
102,539,172 | ||||||||
Semiconductors & Semiconductor Equipment 3.6% | ||||||||
Advanced Energy Industries, Inc. * | 63,937 | 1,264,674 | ||||||
Alpha & Omega Semiconductor Ltd. * | 28,000 | 259,560 |
See financial notes 33
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ambarella, Inc. *(c) | 42,300 | 1,873,467 | ||||||
Amkor Technology, Inc. * | 125,218 | 848,978 | ||||||
Applied Micro Circuits Corp. * | 114,365 | 739,941 | ||||||
Audience, Inc. * | 21,900 | 81,687 | ||||||
Axcelis Technologies, Inc. * | 142,100 | 309,778 | ||||||
Brooks Automation, Inc. | 105,331 | 1,298,731 | ||||||
Cabot Microelectronics Corp. * | 35,700 | 1,721,811 | ||||||
Cascade Microtech, Inc. * | 18,700 | 200,838 | ||||||
Cavium, Inc. * | 78,200 | 4,012,442 | ||||||
CEVA, Inc. * | 46,900 | 764,470 | ||||||
Cirrus Logic, Inc. * | 92,700 | 1,789,110 | ||||||
Cohu, Inc. | 46,100 | 470,220 | ||||||
Cypress Semiconductor Corp. * | 234,900 | 2,327,859 | ||||||
Diodes, Inc. * | 54,281 | 1,402,078 | ||||||
DSP Group, Inc. * | 31,400 | 304,266 | ||||||
Entegris, Inc. * | 208,200 | 2,827,356 | ||||||
Entropic Communications, Inc. * | 143,000 | 357,500 | ||||||
Exar Corp. * | 58,500 | 558,675 | ||||||
Fairchild Semiconductor International, Inc. * | 183,300 | 2,813,655 | ||||||
FormFactor, Inc. * | 76,873 | 612,678 | ||||||
Inphi Corp. * | 43,700 | 676,476 | ||||||
Integrated Device Technology, Inc. * | 197,400 | 3,239,334 | ||||||
Integrated Silicon Solution, Inc. | 46,000 | 624,680 | ||||||
International Rectifier Corp. * | 107,053 | 4,257,498 | ||||||
Intersil Corp., Class A | 190,700 | 2,534,403 | ||||||
IXYS Corp. | 32,400 | 378,108 | ||||||
Kopin Corp. * | 100,300 | 381,140 | ||||||
Lattice Semiconductor Corp. * | 170,200 | 1,142,042 | ||||||
M/A-COM Technology Solutions Holdings, Inc. * | 20,522 | 451,279 | ||||||
MaxLinear, Inc., Class A * | 41,800 | 296,362 | ||||||
Micrel, Inc. | 67,505 | 819,511 | ||||||
Microsemi Corp. * | 141,871 | 3,698,577 | ||||||
MKS Instruments, Inc. | 80,637 | 2,935,187 | ||||||
Monolithic Power Systems, Inc. | 58,100 | 2,567,439 | ||||||
Nanometrics, Inc. * | 32,200 | 435,988 | ||||||
NVE Corp. * | 8,200 | 587,776 | ||||||
OmniVision Technologies, Inc. * | 82,373 | 2,205,949 | ||||||
PDF Solutions, Inc. * | 44,800 | 581,056 | ||||||
Peregrine Semiconductor Corp. * | 37,700 | 468,611 | ||||||
Pericom Semiconductor Corp. * | 33,500 | 366,155 | ||||||
Photronics, Inc. * | 85,200 | 765,948 | ||||||
PMC-Sierra, Inc. * | 254,400 | 1,981,776 | ||||||
Power Integrations, Inc. | 45,362 | 2,284,430 | ||||||
QuickLogic Corp. *(c) | 80,900 | 232,992 | ||||||
Rambus, Inc. * | 167,900 | 1,922,455 | ||||||
RF Micro Devices, Inc. * | 423,000 | 5,503,230 | ||||||
Rubicon Technology, Inc. * | 32,500 | 143,975 | ||||||
Rudolph Technologies, Inc. * | 46,700 | 410,026 | ||||||
Semtech Corp. * | 100,229 | 2,543,812 | ||||||
Silicon Image, Inc. * | 113,600 | 608,896 | ||||||
Silicon Laboratories, Inc. * | 63,800 | 2,908,642 | ||||||
Spansion, Inc., Class A * | 88,600 | 1,823,388 | ||||||
Synaptics, Inc. * | 54,400 | 3,722,592 | ||||||
Tessera Technologies, Inc. | 81,259 | 2,469,461 | ||||||
TriQuint Semiconductor, Inc. * | 253,400 | 5,481,042 | ||||||
Ultra Clean Holdings, Inc. * | 43,300 | 380,174 | ||||||
Ultratech, Inc. * | 40,000 | 765,200 | ||||||
Veeco Instruments, Inc. * | 60,200 | 2,166,598 | ||||||
Vitesse Semiconductor Corp. * | 70,700 | 246,036 | ||||||
Xcerra Corp. * | 84,400 | 716,556 | ||||||
92,564,574 | ||||||||
Software & Services 9.4% | ||||||||
A10 Networks, Inc. * | 18,700 | 82,280 | ||||||
ACI Worldwide, Inc. * | 166,845 | 3,210,098 | ||||||
Actua Corp. * | 60,400 | 1,135,520 | ||||||
Actuate Corp. * | 67,700 | 290,433 | ||||||
Acxiom Corp. * | 116,000 | 2,185,440 | ||||||
Advent Software, Inc. | 75,528 | 2,610,248 | ||||||
Aerohive Networks, Inc. * | 12,000 | 60,000 | ||||||
Amber Road, Inc. * | 13,100 | 174,885 | ||||||
American Software, Inc., Class A | 53,400 | 515,844 | ||||||
Angie’s List, Inc. *(c) | 60,200 | 419,594 | ||||||
Aspen Technology, Inc. * | 139,600 | 5,155,428 | ||||||
AVG Technologies NV * | 51,100 | 915,712 | ||||||
Bankrate, Inc. * | 98,300 | 1,067,538 | ||||||
Barracuda Networks, Inc. * | 11,600 | 372,940 | ||||||
Bazaarvoice, Inc. *(c) | 68,500 | 510,325 | ||||||
Benefitfocus, Inc. * | 7,400 | 205,054 | ||||||
Blackbaud, Inc. | 69,469 | 3,091,370 | ||||||
Blackhawk Network Holdings, Inc. * | 79,402 | 2,744,133 | ||||||
Blucora, Inc. * | 63,100 | 1,069,545 | ||||||
Borderfree, Inc. * | 8,800 | 96,448 | ||||||
Bottomline Technologies de, Inc. * | 56,700 | 1,422,603 | ||||||
Brightcove, Inc. * | 49,900 | 319,859 | ||||||
BroadSoft, Inc. * | 42,200 | 966,380 | ||||||
CACI International, Inc., Class A * | 34,900 | 2,871,921 | ||||||
Callidus Software, Inc. * | 64,000 | 901,760 | ||||||
Carbonite, Inc. * | 26,000 | 284,440 | ||||||
Cardtronics, Inc. * | 67,100 | 2,575,969 | ||||||
Care.com, Inc. *(c) | 9,800 | 81,340 | ||||||
Cass Information Systems, Inc. | 17,640 | 838,606 | ||||||
ChannelAdvisor Corp. * | 30,400 | 422,256 | ||||||
Ciber, Inc. * | 120,800 | 395,016 | ||||||
CommVault Systems, Inc. * | 69,800 | 3,094,932 | ||||||
Computer Task Group, Inc. | 20,200 | 177,760 | ||||||
Compuware Corp. | 322,300 | 3,271,345 | ||||||
comScore, Inc. * | 50,800 | 2,140,712 | ||||||
Comverse, Inc. * | 32,070 | 699,126 | ||||||
Constant Contact, Inc. * | 47,585 | 1,682,606 | ||||||
Convergys Corp. | 148,900 | 3,003,313 | ||||||
Conversant, Inc. * | 100,900 | 3,556,725 | ||||||
Cornerstone OnDemand, Inc. * | 78,000 | 2,829,060 | ||||||
Covisint Corp. *(c) | 83,612 | 241,639 | ||||||
CSG Systems International, Inc. | 51,100 | 1,354,661 | ||||||
Cvent, Inc. * | 26,300 | 682,222 | ||||||
Cyan, Inc. *(c) | 39,400 | 124,110 | ||||||
Datalink Corp. * | 27,300 | 345,345 | ||||||
Dealertrack Technologies, Inc. * | 82,836 | 3,897,434 | ||||||
Demand Media, Inc. * | 14,550 | 102,432 | ||||||
Demandware, Inc. * | 44,100 | 2,643,795 | ||||||
Dice Holdings, Inc. * | 64,900 | 647,053 | ||||||
Digimarc Corp. | 10,300 | 298,597 | ||||||
Digital River, Inc. * | 52,800 | 1,350,096 | ||||||
E2open, Inc. * | 34,000 | 198,560 | ||||||
EarthLink Holdings Corp. | 147,381 | 527,624 | ||||||
Ebix, Inc. (c) | 44,300 | �� | 653,425 | |||||
Ellie Mae, Inc. * | 41,700 | 1,600,446 |
34 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Endurance International Group Holdings Inc *(c) | 44,200 | 734,604 | ||||||
EnerNOC, Inc. * | 42,000 | 620,340 | ||||||
Envestnet, Inc. * | 50,000 | 2,221,000 | ||||||
EPAM Systems, Inc. * | 52,200 | 2,492,028 | ||||||
Epiq Systems, Inc. | 48,700 | 781,148 | ||||||
ePlus, Inc. * | 7,600 | 464,132 | ||||||
Euronet Worldwide, Inc. * | 76,136 | 4,086,219 | ||||||
EVERTEC, Inc. | 96,400 | 2,188,280 | ||||||
Everyday Health, Inc. * | 11,100 | 151,737 | ||||||
ExlService Holdings, Inc. * | 46,900 | 1,312,731 | ||||||
Fair Isaac Corp. | 50,300 | 3,133,690 | ||||||
Five9, Inc. *(c) | 15,000 | 66,000 | ||||||
FleetMatics Group plc *(c) | 54,800 | 2,035,272 | ||||||
Forrester Research, Inc. | 16,017 | 645,165 | ||||||
Gigamon, Inc. *(c) | 35,500 | 530,370 | ||||||
Global Cash Access Holdings, Inc. * | 104,100 | 758,889 | ||||||
Global Eagle Entertainment, Inc. * | 55,900 | 683,657 | ||||||
Globant S.A. * | 8,900 | 115,166 | ||||||
Glu Mobile, Inc. *(c) | 131,900 | 510,453 | ||||||
Gogo, Inc. *(c) | 82,000 | 1,362,020 | ||||||
GrubHub, Inc. * | 13,100 | 476,316 | ||||||
GTT Communications, Inc. * | 20,700 | 268,686 | ||||||
Guidance Software, Inc. * | 31,700 | 213,341 | ||||||
Guidewire Software, Inc. * | 104,300 | 5,208,742 | ||||||
Heartland Payment Systems, Inc. | 54,500 | 2,814,925 | ||||||
Higher One Holdings, Inc. * | 43,800 | 112,566 | ||||||
iGATE Corp. * | 55,735 | 2,064,982 | ||||||
Imperva, Inc. * | 30,800 | 1,261,876 | ||||||
Infoblox, Inc. * | 80,300 | 1,296,042 | ||||||
Information Services Group, Inc. * | 47,900 | 202,617 | ||||||
Interactive Intelligence Group, Inc. * | 25,973 | 1,253,457 | ||||||
Internap Network Services Corp. * | 75,700 | 606,357 | ||||||
Intralinks Holdings, Inc. * | 61,900 | 534,816 | ||||||
j2 Global, Inc. | 70,028 | 3,787,814 | ||||||
Jive Software, Inc. * | 56,400 | 344,604 | ||||||
Kofax, Ltd. * | 108,900 | 691,515 | ||||||
Limelight Networks, Inc. * | 90,900 | 221,796 | ||||||
Lionbridge Technologies, Inc. * | 99,900 | 482,517 | ||||||
Liquidity Services, Inc. * | 35,400 | 452,412 | ||||||
LivePerson, Inc. * | 78,700 | 1,133,280 | ||||||
LogMeIn, Inc. * | 35,600 | 1,710,580 | ||||||
Luxoft Holding, Inc. * | 11,500 | 459,885 | ||||||
Manhattan Associates, Inc. * | 111,188 | 4,459,751 | ||||||
ManTech International Corp., Class A | 34,500 | 971,520 | ||||||
Marchex, Inc., Class B | 48,200 | 184,606 | ||||||
Marin Software, Inc. * | 38,600 | 345,470 | ||||||
Marketo, Inc. * | 37,600 | 1,213,352 | ||||||
Mavenir Systems, Inc. * | 24,800 | 304,048 | ||||||
MAXIMUS, Inc. | 101,496 | 4,918,496 | ||||||
Mentor Graphics Corp. | 140,967 | 2,987,091 | ||||||
MicroStrategy, Inc., Class A * | 13,662 | 2,197,943 | ||||||
Millennial Media, Inc. *(c) | 110,600 | 226,730 | ||||||
MobileIron, Inc. *(c) | 11,300 | 113,678 | ||||||
Model N, Inc. * | 28,300 | 275,925 | ||||||
ModusLink Global Solutions, Inc. *(c) | 58,700 | 205,450 | ||||||
MoneyGram International, Inc. * | 42,800 | 368,080 | ||||||
Monotype Imaging Holdings, Inc. | 58,600 | 1,676,546 | ||||||
Monster Worldwide, Inc. * | 133,500 | 515,310 | ||||||
Move, Inc. * | 57,400 | 1,202,530 | ||||||
NetScout Systems, Inc. * | 55,400 | 2,042,044 | ||||||
NeuStar, Inc., Class A *(c) | 88,400 | 2,334,644 | ||||||
NIC, Inc. | 96,800 | 1,784,024 | ||||||
OPOWER, Inc. *(c) | 11,400 | 207,024 | ||||||
Park City Group, Inc. *(c) | 14,000 | 117,880 | ||||||
Paycom Software, Inc. * | 9,600 | 170,400 | ||||||
Pegasystems, Inc. | 53,200 | 1,152,844 | ||||||
Perficient, Inc. * | 53,397 | 885,322 | ||||||
PRGX Global, Inc. * | 41,500 | 219,535 | ||||||
Progress Software Corp. * | 74,620 | 1,932,658 | ||||||
Proofpoint, Inc. * | 54,300 | 2,391,372 | ||||||
PROS Holdings, Inc. * | 34,000 | 951,320 | ||||||
Q2 Holdings, Inc. * | 14,500 | 218,805 | ||||||
QAD, Inc., Class A | 8,800 | 189,288 | ||||||
Qlik Technologies, Inc. * | 133,888 | 3,795,725 | ||||||
Qualys, Inc. * | 29,500 | 946,360 | ||||||
QuinStreet, Inc. * | 44,900 | 181,845 | ||||||
Rally Software Development Corp. * | 36,500 | 373,030 | ||||||
RealNetworks, Inc. * | 28,257 | 194,973 | ||||||
RealPage, Inc. * | 76,600 | 1,522,042 | ||||||
Reis, Inc. | 11,900 | 278,460 | ||||||
Rightside Group Ltd. * | 14,550 | 137,788 | ||||||
Rocket Fuel, Inc. *(c) | 26,900 | 420,178 | ||||||
Rosetta Stone, Inc. * | 31,100 | 297,627 | ||||||
Sapiens International Corp. N.V. *(c) | 43,366 | 343,459 | ||||||
Sapient Corp. * | 169,863 | 2,942,027 | ||||||
Science Applications International Corp. | 61,700 | 3,017,747 | ||||||
SciQuest, Inc. * | 38,300 | 571,053 | ||||||
Seachange International, Inc. * | 46,700 | 315,692 | ||||||
ServiceSource International, Inc. * | 105,500 | 403,010 | ||||||
Shutterstock, Inc. * | 22,300 | 1,734,048 | ||||||
Silver Spring Networks, Inc. *(c) | 51,400 | 492,412 | ||||||
SPS Commerce, Inc. * | 23,400 | 1,364,220 | ||||||
SS&C Technologies Holdings, Inc. * | 104,600 | 5,054,272 | ||||||
Stamps.com, Inc. * | 25,000 | 922,500 | ||||||
Sykes Enterprises, Inc. * | 59,793 | 1,287,941 | ||||||
Synchronoss Technologies, Inc. * | 51,800 | 2,676,506 | ||||||
Syntel, Inc. * | 22,900 | 1,983,369 | ||||||
Take-Two Interactive Software, Inc. * | 134,204 | 3,549,696 | ||||||
Tangoe, Inc. * | 56,800 | 833,256 | ||||||
TechTarget, Inc. * | 19,000 | 181,260 | ||||||
TeleCommunication Systems, Inc., Class A * | 67,800 | 195,264 | ||||||
Telenav, Inc. * | 40,000 | 288,800 | ||||||
TeleTech Holdings, Inc. * | 33,200 | 856,892 | ||||||
Textura, Corp. *(c) | 27,400 | 729,936 | ||||||
The Hackett Group, Inc. | 40,800 | 286,008 | ||||||
The Rubicon Project, Inc. * | 11,600 | 132,936 | ||||||
The Ultimate Software Group, Inc. * | 43,100 | 6,486,981 | ||||||
TiVo, Inc. * | 168,503 | 2,198,964 | ||||||
Travelzoo, Inc. * | 9,800 | 128,282 |
See financial notes 35
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tremor Video, Inc. *(c) | 59,800 | 140,530 | ||||||
TrueCar, Inc. *(c) | 11,400 | 191,520 | ||||||
Trulia, Inc. *(c) | 54,205 | 2,528,663 | ||||||
TubeMogul, Inc. * | 10,100 | 156,954 | ||||||
Tyler Technologies, Inc. * | 49,100 | 5,495,272 | ||||||
Unisys Corp. * | 76,450 | 1,960,178 | ||||||
Unwired Planet, Inc. * | 122,695 | 190,177 | ||||||
Varonis Systems, Inc. *(c) | 7,900 | 153,892 | ||||||
VASCO Data Security International, Inc. * | 40,200 | 1,017,864 | ||||||
Verint Systems, Inc. * | 88,372 | 5,080,506 | ||||||
VirnetX Holding Corp. *(c) | 65,700 | 385,659 | ||||||
Virtusa Corp. * | 38,100 | 1,561,338 | ||||||
Vistaprint N.V. *(c) | 48,600 | 3,249,396 | ||||||
Vringo, Inc. *(c) | 95,600 | 98,468 | ||||||
Web.com Group, Inc. * | 76,000 | 1,560,280 | ||||||
WebMD Health Corp. * | 56,800 | 2,424,224 | ||||||
WEX, Inc. * | 58,476 | 6,640,534 | ||||||
Wix.com Ltd. *(c) | 20,300 | 344,897 | ||||||
XO Group, Inc. * | 39,800 | 506,654 | ||||||
Xoom Corp. * | 45,400 | 685,540 | ||||||
YuMe, Inc. *(c) | 29,400 | 146,706 | ||||||
Zendesk, Inc. *(c) | 16,700 | 434,200 | ||||||
Zix Corp. * | 88,900 | 293,370 | ||||||
241,743,097 | ||||||||
Technology Hardware & Equipment 4.7% | ||||||||
ADTRAN, Inc. | 82,800 | 1,756,188 | ||||||
Agilysys, Inc. * | 24,000 | 271,200 | ||||||
Alliance Fiber Optic Products, Inc. (c) | 16,400 | 211,724 | ||||||
Anixter International, Inc. | 40,600 | 3,457,902 | ||||||
Applied Optoelectronics, Inc. * | 21,700 | 350,238 | ||||||
Aruba Networks, Inc. * | 156,600 | 3,379,428 | ||||||
Badger Meter, Inc. | 26,003 | 1,480,091 | ||||||
Bel Fuse, Inc., Class B | 14,100 | 398,889 | ||||||
Belden, Inc. | 67,600 | 4,812,444 | ||||||
Benchmark Electronics, Inc. * | 81,294 | 1,928,294 | ||||||
Black Box Corp. | 24,092 | 529,783 | ||||||
CalAmp Corp. * | 53,500 | 1,031,480 | ||||||
Calix, Inc. * | 58,800 | 635,628 | ||||||
Checkpoint Systems, Inc. * | 61,644 | 817,399 | ||||||
Ciena Corp. * | 154,800 | 2,594,448 | ||||||
Clearfield, Inc. *(c) | 16,700 | 245,156 | ||||||
Cognex Corp. * | 131,818 | 5,214,720 | ||||||
Coherent, Inc. * | 36,651 | 2,387,813 | ||||||
Comtech Telecommunications Corp. | 24,500 | 932,715 | ||||||
Control4 Corp. *(c) | 16,800 | 260,568 | ||||||
Cray, Inc. * | 59,800 | 2,072,668 | ||||||
CTS Corp. | 52,200 | 960,480 | ||||||
CUI Global, Inc. * | 30,300 | 247,854 | ||||||
Daktronics, Inc. | 59,300 | 789,283 | ||||||
Digi International, Inc. * | 33,900 | 280,692 | ||||||
Dot Hill Systems Corp. * | 88,000 | 347,600 | ||||||
DTS, Inc. * | 24,942 | 742,773 | ||||||
Eastman Kodak Co. *(c) | 25,900 | 558,663 | ||||||
Electro Rent Corp. | 25,200 | 384,048 | ||||||
Electro Scientific Industries, Inc. | 39,800 | 282,580 | ||||||
Electronics for Imaging, Inc. * | 68,609 | 3,136,803 | ||||||
Emulex Corp. * | 129,190 | 731,215 | ||||||
Extreme Networks, Inc. * | 135,200 | 485,368 | ||||||
Fabrinet * | 51,500 | 937,815 | ||||||
FARO Technologies, Inc. * | 25,200 | 1,411,200 | ||||||
FEI Co. | 63,900 | 5,385,492 | ||||||
Finisar Corp. * | 143,600 | 2,400,992 | ||||||
GSI Group, Inc. * | 48,200 | 619,370 | ||||||
Harmonic, Inc. * | 139,100 | 927,797 | ||||||
II-VI, Inc. * | 76,900 | 1,037,381 | ||||||
Immersion Corp. * | 46,379 | 390,511 | ||||||
Infinera Corp. * | 187,100 | 2,718,563 | ||||||
Insight Enterprises, Inc. * | 60,100 | 1,367,275 | ||||||
InterDigital, Inc. | 59,300 | 2,931,199 | ||||||
Intevac, Inc. * | 35,100 | 259,740 | ||||||
InvenSense, Inc. *(c) | 104,300 | 1,690,703 | ||||||
Itron, Inc. * | 59,100 | 2,300,763 | ||||||
Ixia * | 102,564 | 987,691 | ||||||
Kemet Corp. * | 59,100 | 283,680 | ||||||
KVH Industries, Inc. * | 19,900 | 257,108 | ||||||
Littelfuse, Inc. | 33,200 | 3,238,328 | ||||||
Maxwell Technologies, Inc. * | 43,400 | 506,044 | ||||||
Mercury Systems, Inc. * | 54,501 | 761,924 | ||||||
Mesa Laboratories, Inc. | 3,600 | 274,932 | ||||||
Methode Electronics, Inc. | 56,700 | 2,232,846 | ||||||
MTS Systems Corp. | 21,775 | 1,437,368 | ||||||
Multi-Fineline Electronix, Inc. * | 12,100 | 122,815 | ||||||
NETGEAR, Inc. * | 53,600 | 1,824,544 | ||||||
Newport Corp. * | 57,700 | 1,032,253 | ||||||
Nimble Storage, Inc. *(c) | 13,600 | 372,096 | ||||||
Numerex Corp., Class A * | 25,600 | 333,824 | ||||||
Oclaro, Inc. * | 137,300 | 215,561 | ||||||
Oplink Communications, Inc. | 26,200 | 546,270 | ||||||
OSI Systems, Inc. * | 30,100 | 2,133,488 | ||||||
Park Electrochemical Corp. | 37,400 | 964,920 | ||||||
ParkerVision, Inc. *(c) | 144,400 | 189,164 | ||||||
PC Connection, Inc. | 12,500 | 298,125 | ||||||
Plantronics, Inc. | 64,093 | 3,324,504 | ||||||
Plexus Corp. * | 49,062 | 2,028,714 | ||||||
Polycom, Inc. * | 202,700 | 2,651,316 | ||||||
Procera Networks, Inc. * | 28,000 | 209,720 | ||||||
QLogic Corp. * | 130,100 | 1,536,481 | ||||||
Quantum Corp. * | 324,083 | 414,826 | ||||||
RealD, Inc. * | 60,400 | 683,728 | ||||||
Rofin-Sinar Technologies, Inc. * | 40,036 | 896,406 | ||||||
Rogers Corp. * | 26,167 | 1,789,038 | ||||||
Ruckus Wireless, Inc. * | 95,100 | 1,234,398 | ||||||
Sanmina Corp. * | 120,600 | 3,023,442 | ||||||
ScanSource, Inc. * | 43,605 | 1,664,839 | ||||||
ShoreTel, Inc. * | 101,557 | 821,596 | ||||||
Silicon Graphics International Corp. * | 53,400 | 463,512 | ||||||
Sonus Networks, Inc. * | 360,558 | 1,251,136 | ||||||
Speed Commerce, Inc. * | 57,100 | 169,587 | ||||||
Super Micro Computer, Inc. * | 50,600 | 1,617,176 | ||||||
SYNNEX Corp. | 41,800 | 2,891,724 | ||||||
Tessco Technologies, Inc. | 7,400 | 234,950 | ||||||
TTM Technologies, Inc. * | 86,250 | 595,988 | ||||||
Ubiquiti Networks, Inc. (c) | 43,600 | 1,559,572 | ||||||
Universal Display Corp. * | 61,452 | 1,922,219 | ||||||
ViaSat, Inc. * | 61,119 | 3,828,494 | ||||||
Viasystems Group, Inc. * | 7,000 | 111,090 | ||||||
Violin Memory, Inc. *(c) | 117,600 | 569,184 |
36 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Vishay Precision Group, Inc. * | 16,500 | 280,335 | ||||||
121,881,892 | ||||||||
Telecommunication Services 0.7% | ||||||||
8x8, Inc. * | 127,000 | 998,220 | ||||||
Atlantic Tele-Network, Inc. | 15,300 | 1,028,007 | ||||||
Boingo Wireless, Inc. * | 37,100 | 260,071 | ||||||
Cincinnati Bell, Inc. * | 303,745 | 1,114,744 | ||||||
Cogent Communications Holdings, Inc. | 70,700 | 2,399,558 | ||||||
Consolidated Communications Holdings, Inc. | 76,074 | 1,970,316 | ||||||
FairPoint Communications, Inc. * | 28,900 | 479,740 | ||||||
General Communication, Inc., Class A * | 50,300 | 590,019 | ||||||
Globalstar, Inc. *(c) | 402,800 | 954,636 | ||||||
Hawaiian Telcom Holdco, Inc. * | 16,213 | 436,130 | ||||||
IDT Corp., Class B | 23,500 | 387,280 | ||||||
inContact, Inc. * | 88,200 | 784,980 | ||||||
Inteliquent, Inc. | 46,400 | 780,912 | ||||||
Intelsat S.A. * | 40,100 | 780,346 | ||||||
Iridium Communications, Inc. * | 116,700 | 1,108,650 | ||||||
Lumos Networks Corp. | 25,400 | 436,880 | ||||||
magicJack VocalTec Ltd. *(c) | 26,400 | 245,520 | ||||||
NTELOS Holdings Corp. (c) | 26,050 | 262,584 | ||||||
ORBCOMM, Inc. * | 60,900 | 384,888 | ||||||
Premiere Global Services, Inc. * | 70,000 | 732,900 | ||||||
RingCentral, Inc., Class A * | 41,100 | 540,054 | ||||||
Shenandoah Telecommunications Co. | 34,800 | 1,029,732 | ||||||
Spok Holdings, Inc. | 36,500 | 592,760 | ||||||
Vonage Holdings Corp. * | 260,200 | 905,496 | ||||||
19,204,423 | ||||||||
Transportation 1.8% | ||||||||
Air Transport Services Group, Inc. * | 72,100 | 589,778 | ||||||
Allegiant Travel Co. | 20,200 | 2,696,094 | ||||||
ArcBest Corp. | 39,372 | 1,523,696 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 37,400 | 1,380,808 | ||||||
Baltic Trading Ltd. (c) | 72,200 | 270,750 | ||||||
Celadon Group, Inc. | 32,600 | 634,396 | ||||||
Echo Global Logistics, Inc. * | 34,500 | 901,485 | ||||||
Forward Air Corp. | 45,682 | 2,186,797 | ||||||
Hawaiian Holdings, Inc. * | 66,000 | 1,144,440 | ||||||
Heartland Express, Inc. | 79,800 | 2,006,172 | ||||||
Hub Group, Inc., Class A * | 58,592 | 2,126,304 | ||||||
International Shipholding Corp. | 7,300 | 146,292 | ||||||
JetBlue Airways Corp. * | 377,400 | 4,355,196 | ||||||
Knight Transportation, Inc. | 88,400 | 2,586,584 | ||||||
Knightsbridge Shipping Ltd. (c) | 50,800 | 446,024 | ||||||
Marten Transport Ltd. | 37,700 | 739,674 | ||||||
Matson, Inc. | 65,600 | 1,868,944 | ||||||
Navios Maritime Holdings, Inc. (c) | 116,400 | 685,596 | ||||||
P.A.M. Transportation Services, Inc. * | 4,000 | 171,920 | ||||||
Park-Ohio Holdings Corp. | 13,800 | 732,918 | ||||||
Patriot Transportation Holding, Inc. * | 8,700 | 368,532 | ||||||
Quality Distribution, Inc. * | 40,200 | 520,992 | ||||||
Republic Airways Holdings, Inc. * | 74,100 | 927,732 | ||||||
Roadrunner Transportation Systems, Inc. * | 40,900 | 842,949 | ||||||
Safe Bulkers, Inc. (c) | 57,100 | 304,914 | ||||||
Saia, Inc. * | 38,100 | 1,867,662 | ||||||
Scorpio Bulkers, Inc. * | 197,400 | 965,286 | ||||||
SkyWest, Inc. | 73,612 | 848,010 | ||||||
Swift Transportation Co. * | 124,600 | 3,077,620 | ||||||
Ultrapetrol Bahamas Ltd. *(c) | 33,800 | 101,738 | ||||||
Universal Truckload Services, Inc. | 11,747 | 309,181 | ||||||
USA Truck, Inc. * | 9,200 | 155,480 | ||||||
UTi Worldwide, Inc. * | 136,800 | 1,495,224 | ||||||
Werner Enterprises, Inc. | 68,075 | 1,874,786 | ||||||
Wesco Aircraft Holdings, Inc. * | 76,900 | 1,364,975 | ||||||
XPO Logistics, Inc. * | 76,469 | 3,052,643 | ||||||
YRC Worldwide, Inc. *(c) | 47,200 | 1,011,968 | ||||||
46,283,560 | ||||||||
Utilities 3.5% | ||||||||
Abengoa Yield plc *(c) | 39,900 | 1,296,750 | ||||||
ALLETE, Inc. | 63,154 | 3,299,165 | ||||||
American States Water Co. | 55,800 | 1,996,524 | ||||||
Artesian Resources Corp., Class A | 10,500 | 233,835 | ||||||
Atlantic Power Corp. (c) | 168,900 | 374,958 | ||||||
Avista Corp. | 89,512 | 3,173,200 | ||||||
Black Hills Corp. | 66,298 | 3,628,490 | ||||||
California Water Service Group | 71,574 | 1,863,071 | ||||||
Chesapeake Utilities Corp. | 20,700 | 1,002,501 | ||||||
Cleco Corp. | 90,700 | 4,876,032 | ||||||
Connecticut Water Service, Inc. | 15,000 | 557,550 | ||||||
Dynegy, Inc. * | 183,200 | 5,587,600 | ||||||
El Paso Electric Co. | 63,016 | 2,384,526 | ||||||
IDACORP, Inc. | 74,587 | 4,716,136 | ||||||
MGE Energy, Inc. | 50,940 | 2,265,302 | ||||||
Middlesex Water Co. | 25,485 | 574,687 | ||||||
New Jersey Resources Corp. | 62,700 | 3,666,696 | ||||||
Northwest Natural Gas Co. | 39,895 | 1,872,272 | ||||||
NorthWestern Corp. | 58,969 | 3,115,922 | ||||||
NRG Yield, Inc., Class A | 37,200 | 1,858,884 | ||||||
ONE Gas, Inc. | 76,300 | 2,895,585 | ||||||
Ormat Technologies, Inc. | 27,700 | 801,915 | ||||||
Otter Tail Corp. | 54,909 | 1,702,179 | ||||||
Pattern Energy Group, Inc. | 57,900 | 1,666,362 | ||||||
Piedmont Natural Gas Co., Inc. | 117,900 | 4,481,379 | ||||||
PNM Resources, Inc. | 118,200 | 3,410,070 | ||||||
Portland General Electric Co. | 116,717 | 4,249,666 | ||||||
SJW Corp. | 24,600 | 786,216 | ||||||
South Jersey Industries, Inc. | 50,660 | 2,970,702 | ||||||
Southwest Gas Corp. | 68,996 | 4,007,978 | ||||||
Spark Energy, Inc., Class A *(c) | 6,900 | 111,780 | ||||||
TerraForm Power, Inc., Class A * | 31,500 | 896,490 | ||||||
The Empire District Electric Co. | 62,100 | 1,766,124 | ||||||
The Laclede Group, Inc. | 63,721 | 3,235,115 | ||||||
UIL Holdings Corp. | 84,010 | 3,456,171 | ||||||
Unitil Corp. | 22,100 | 769,964 | ||||||
WGL Holdings, Inc. | 77,324 | 3,634,228 |
See financial notes 37
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
York Water Co. | 17,000 | 373,660 | ||||||
89,559,685 | ||||||||
Total Common Stock | ||||||||
(Cost $1,808,542,039) | 2,564,440,457 | |||||||
Rights 0.0% of net assets | ||||||||
Automobiles & Components 0.0% | ||||||||
Contra Furiex Pharmaceuticals CVR *(a)(b) | 11,000 | 107,470 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Omthera Pharmaceutical CVR *(a)(b) | 8,400 | — | ||||||
Telecommunication Services 0.0% | ||||||||
Contra Leap Wireless CVR *(a)(b) | 84,700 | 213,444 | ||||||
Total Rights | ||||||||
(Cost $320,914) | 320,914 | |||||||
Warrants 0.0% of net assets | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. *(a)(b) | 24,500 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
Other Investment Company 5.1% of net assets | ||||||||
Securities Lending Collateral 5.1% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 130,686,609 | 130,686,609 | ||||||
Total Other Investment Company | ||||||||
(Cost $130,686,609) | 130,686,609 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.5% of net assets | ||||||||
Time Deposit 0.4% | ||||||||
DNB | ||||||||
0.03%, 11/03/14 | 11,660,323 | 11,660,323 | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/18/14 (d)(e) | 1,900,000 | 1,899,969 | ||||||
Total Short-Term Investments | ||||||||
(Cost $13,560,292) | 13,560,292 | |||||||
End of Investments. |
At 10/31/14 tax basis cost of the fund’s investments was $1,960,321,155 and the unrealized appreciation and depreciation were $900,108,052 and ($151,420,935), respectively, with a net unrealized appreciation of $748,687,117.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $320,914 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $128,436,558. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
CVR — | Contingent Value Rights | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/19/14 | 20 | 2,342,000 | 202,898 |
38 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .7% | Common Stock | 2,419,182,444 | 3,996,962,109 | ||||||||
0 | .0% | Rights | 32,982 | 32,760 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
0 | .7% | Other Investment Company | 26,162,578 | 26,162,578 | ||||||||
2 | .1% | Short-Term Investments | 86,325,341 | 86,325,341 | ||||||||
101 | .5% | Total Investments | 2,531,703,345 | 4,109,482,788 | ||||||||
(1 | .5%) | Other Assets and Liabilities, Net | (60,247,221 | ) | ||||||||
100 | .0% | Net Assets | 4,049,235,567 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.7% of net assets | ||||||||
Automobiles & Components 1.2% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 13,400 | 259,022 | ||||||
Autoliv, Inc. | 15,800 | 1,449,492 | ||||||
BorgWarner, Inc. | 39,100 | 2,229,482 | ||||||
Cooper Tire & Rubber Co. | 8,900 | 286,669 | ||||||
Cooper-Standard Holding, Inc. * | 2,500 | 136,450 | ||||||
Dana Holding Corp. | 24,800 | 507,408 | ||||||
Delphi Automotive plc | 52,685 | 3,634,211 | ||||||
Dorman Products, Inc. * | 5,000 | 231,800 | ||||||
Drew Industries, Inc. | 5,400 | 259,524 | ||||||
Federal-Mogul Holdings Corp. * | 22,200 | 346,542 | ||||||
Ford Motor Co. | 705,340 | 9,938,241 | ||||||
General Motors Co. | 246,185 | 7,730,209 | ||||||
Gentex Corp. | 23,700 | 775,938 | ||||||
Gentherm, Inc. * | 5,307 | 221,302 | ||||||
Harley-Davidson, Inc. | 38,693 | 2,542,130 | ||||||
Johnson Controls, Inc. | 123,800 | 5,849,550 | ||||||
Lear Corp. | 14,000 | 1,295,000 | ||||||
Modine Manufacturing Co. * | 12,100 | 155,243 | ||||||
Standard Motor Products, Inc. | 7,500 | 296,400 | ||||||
Stoneridge, Inc. * | 13,100 | 170,169 | ||||||
Strattec Security Corp. | 1,500 | 155,580 | ||||||
Tenneco, Inc. * | 10,080 | 527,789 | ||||||
Tesla Motors, Inc. * | 16,870 | 4,077,479 | ||||||
The Goodyear Tire & Rubber Co. | 47,237 | 1,144,552 | ||||||
Thor Industries, Inc. | 7,500 | 396,675 | ||||||
Tower International, Inc. * | 5,564 | 135,205 | ||||||
TRW Automotive Holdings Corp. * | 20,400 | 2,067,540 | ||||||
Visteon Corp. * | 8,000 | 751,200 | ||||||
Winnebago Industries, Inc. * | 7,400 | 156,954 | ||||||
47,727,756 | ||||||||
Banks 5.9% | ||||||||
1st Source Corp. | 5,528 | 172,971 | ||||||
Ameris Bancorp | 6,348 | 157,430 | ||||||
Arrow Financial Corp. | 3,457 | 94,687 | ||||||
Associated Banc-Corp. | 25,000 | 470,000 | ||||||
Astoria Financial Corp. | 19,300 | 253,795 | ||||||
BancFirst Corp. | 2,300 | 149,500 | ||||||
BancorpSouth, Inc. | 16,112 | 371,059 | ||||||
Bank Mutual Corp. | 18,268 | 120,386 | ||||||
Bank of America Corp. | 1,883,401 | 32,319,161 | ||||||
Bank of Hawaii Corp. | 6,500 | 380,575 | ||||||
Bank of the Ozarks, Inc. | 11,200 | 394,688 | ||||||
BankUnited, Inc. | 19,696 | 588,910 | ||||||
Banner Corp. | 5,571 | 240,779 | ||||||
BB&T Corp. | 124,658 | 4,722,045 | ||||||
BBCN Bancorp, Inc. | 19,100 | 270,074 | ||||||
Beneficial Mutual Bancorp, Inc. * | 9,000 | 120,870 | ||||||
Berkshire Hills Bancorp, Inc. | 8,000 | 206,240 | ||||||
BNC Bancorp | 11,012 | 187,314 | ||||||
BofI Holding, Inc. * | 2,100 | 161,742 | ||||||
BOK Financial Corp. | 3,740 | 256,414 | ||||||
Boston Private Financial Holdings, Inc. | 20,729 | 272,586 | ||||||
Brookline Bancorp, Inc. | 11,705 | 112,251 | ||||||
Bryn Mawr Bank Corp. | 3,400 | 104,822 | ||||||
Camden National Corp. | 2,500 | 102,275 | ||||||
Capital Bank Financial Corp., Class A * | 10,300 | 266,667 | ||||||
Capital City Bank Group, Inc. | 6,875 | 103,881 | ||||||
Capitol Federal Financial, Inc. | 21,963 | 281,346 | ||||||
Cardinal Financial Corp. | 3,700 | 71,040 | ||||||
Cathay General Bancorp | 16,006 | 422,718 | ||||||
Centerstate Banks, Inc. | 17,590 | 204,748 | ||||||
Central Pacific Financial Corp. | 10,269 | 194,084 | ||||||
Century Bancorp, Inc., Class A | 800 | 30,384 | ||||||
Chemical Financial Corp. | 8,683 | 258,580 | ||||||
CIT Group, Inc. | 33,100 | 1,619,583 | ||||||
Citigroup, Inc. | 539,889 | 28,900,258 | ||||||
City Holding Co. | 4,800 | 215,952 | ||||||
City National Corp. | 7,800 | 613,938 | ||||||
Columbia Banking System, Inc. | 9,951 | 276,439 | ||||||
Comerica, Inc. | 31,159 | 1,487,531 | ||||||
Commerce Bancshares, Inc. | 12,933 | 585,348 | ||||||
Community Bank System, Inc. | 10,700 | 408,205 | ||||||
Community Trust Bancorp, Inc. | 2,735 | 98,323 | ||||||
Cullen/Frost Bankers, Inc. | 9,100 | 735,371 | ||||||
CVB Financial Corp. | 19,411 | 306,306 | ||||||
Dime Community Bancshares, Inc. | 6,875 | 108,281 | ||||||
Eagle Bancorp, Inc. * | 5,760 | 206,957 | ||||||
East West Bancorp, Inc. | 24,100 | 885,916 | ||||||
EverBank Financial Corp. | 15,400 | 294,910 | ||||||
F.N.B. Corp. | 31,061 | 397,270 | ||||||
Fifth Third Bancorp | 145,814 | 2,914,822 | ||||||
First BanCorp (Puerto Rico) * | 56,579 | 294,777 | ||||||
First Busey Corp. | 20,200 | 126,250 | ||||||
First Citizens BancShares, Inc., Class A | 900 | 226,089 |
See financial notes 39
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
First Commonwealth Financial Corp. | 24,904 | 232,852 | ||||||
First Financial Bancorp | 10,339 | 181,346 | ||||||
First Financial Bankshares, Inc. | 8,200 | 260,596 | ||||||
First Financial Corp. | 2,600 | 90,168 | ||||||
First Horizon National Corp. | 45,216 | 581,478 | ||||||
First Interstate BancSystem, Inc., Class A | 8,900 | 261,126 | ||||||
First Merchants Corp. | 9,041 | 204,779 | ||||||
First Midwest Bancorp, Inc. | 15,825 | 265,702 | ||||||
First Niagara Financial Group, Inc. | 58,465 | 437,903 | ||||||
First Republic Bank | 22,724 | 1,157,333 | ||||||
First United Corp. * | 2,200 | 18,810 | ||||||
FirstMerit Corp. | 27,289 | 500,753 | ||||||
Flagstar Bancorp, Inc. * | 8,060 | 126,703 | ||||||
Flushing Financial Corp. | 6,800 | 136,952 | ||||||
Fulton Financial Corp. | 28,262 | 335,753 | ||||||
Glacier Bancorp, Inc. | 10,497 | 301,159 | ||||||
Great Southern Bancorp, Inc. | 3,400 | 129,234 | ||||||
Hancock Holding Co. | 12,344 | 434,385 | ||||||
Hanmi Financial Corp. | 7,000 | 150,150 | ||||||
Hawthorn Bancshares, Inc. | 947 | 13,031 | ||||||
Heartland Financial USA, Inc. | 2,500 | 66,500 | ||||||
Heritage Financial Corp. | 6,135 | 107,669 | ||||||
Home BancShares, Inc. | 11,500 | 367,080 | ||||||
Home Loan Servicing Solutions Ltd. | 10,400 | 199,784 | ||||||
Hudson City Bancorp, Inc. | 78,531 | 757,824 | ||||||
Huntington Bancshares, Inc. | 137,099 | 1,358,651 | ||||||
Iberiabank Corp. | 6,075 | 418,324 | ||||||
Independent Bank Corp., Massachusetts | 5,700 | 232,560 | ||||||
Independent Bank Corp., Michigan | 431 | 5,202 | ||||||
International Bancshares Corp. | 13,484 | 382,541 | ||||||
Investors Bancorp, Inc. | 58,997 | 634,218 | ||||||
JPMorgan Chase & Co. | 671,463 | 40,610,082 | ||||||
Kearny Financial Corp. * | 9,000 | 128,160 | ||||||
KeyCorp | 148,290 | 1,957,428 | ||||||
Lakeland Financial Corp. | 3,700 | 153,328 | ||||||
M&T Bank Corp. | 26,666 | 3,258,052 | ||||||
MainSource Financial Group, Inc. | 5,535 | 100,682 | ||||||
MB Financial, Inc. | 13,857 | 437,188 | ||||||
Merchants Bancshares, Inc. | 3,650 | 108,734 | ||||||
MGIC Investment Corp. * | 62,600 | 558,392 | ||||||
MutualFirst Financial, Inc. | 2,000 | 43,500 | ||||||
National Bank Holdings Corp., Class A | 12,800 | 250,752 | ||||||
National Penn Bancshares, Inc. | 32,675 | 336,226 | ||||||
Nationstar Mortgage Holdings, Inc. * | 10,200 | 358,224 | ||||||
NBT Bancorp, Inc. | 11,500 | 295,320 | ||||||
New York Community Bancorp, Inc. | 74,285 | 1,184,846 | ||||||
Northfield Bancorp, Inc. | 15,765 | 224,494 | ||||||
Northrim BanCorp, Inc. | 4,281 | 123,721 | ||||||
Northwest Bancshares, Inc. | 19,350 | 248,260 | ||||||
OceanFirst Financial Corp. | 7,150 | 118,476 | ||||||
Ocwen Financial Corp. * | 18,620 | 438,687 | ||||||
OFG Bancorp | 8,163 | 127,098 | ||||||
Old National Bancorp | 16,800 | 244,440 | ||||||
Oritani Financial Corp. | 6,000 | 88,620 | ||||||
PacWest Bancorp | 15,333 | 654,106 | ||||||
Park National Corp. | 4,845 | 408,773 | ||||||
People’s United Financial, Inc. | 79,087 | 1,156,252 | ||||||
Peoples Financial Corp. | 3,000 | 38,640 | ||||||
Pinnacle Financial Partners, Inc. | 6,475 | 253,820 | ||||||
Popular, Inc. * | 19,720 | 628,674 | ||||||
Premier Financial Bancorp, Inc. | 2,645 | 38,538 | ||||||
PrivateBancorp, Inc. | 13,000 | 420,160 | ||||||
Prosperity Bancshares, Inc. | 11,300 | 682,407 | ||||||
Provident Financial Holdings, Inc. | 4,350 | 63,423 | ||||||
Provident Financial Services, Inc. | 14,017 | 255,530 | ||||||
Radian Group, Inc. | 34,300 | 577,955 | ||||||
Regions Financial Corp. | 243,273 | 2,415,701 | ||||||
Renasant Corp. | 8,910 | 268,636 | ||||||
Republic Bancorp, Inc., Class A | 6,521 | 158,134 | ||||||
S&T Bancorp, Inc. | 4,400 | 121,396 | ||||||
Sandy Spring Bancorp, Inc. | 5,900 | 152,220 | ||||||
Seacoast Banking Corp of Florida * | 3,936 | 50,223 | ||||||
Shore Bancshares, Inc. * | 1,250 | 11,475 | ||||||
Signature Bank * | 8,200 | 993,266 | ||||||
Simmons First National Corp., Class A | 4,000 | 167,960 | ||||||
South State Corp. | 5,584 | 336,771 | ||||||
Southside Bancshares, Inc. (c) | 4,741 | 159,203 | ||||||
Southwest Bancorp, Inc. | 7,800 | 140,634 | ||||||
State Bank Financial Corp. | 6,200 | 111,104 | ||||||
Sterling Bancorp | 19,185 | 269,741 | ||||||
Stock Yards Bancorp, Inc. | 3,670 | 122,138 | ||||||
Suffolk Bancorp | 4,600 | 105,616 | ||||||
Sun Bancorp, Inc. * | 3,863 | 78,033 | ||||||
SunTrust Banks, Inc. | 91,857 | 3,595,283 | ||||||
Susquehanna Bancshares, Inc. | 27,568 | 270,442 | ||||||
SVB Financial Group * | 11,800 | 1,321,482 | ||||||
Synovus Financial Corp. | 22,042 | 558,985 | ||||||
TCF Financial Corp. | 32,100 | 495,945 | ||||||
Texas Capital Bancshares, Inc. * | 7,800 | 476,970 | ||||||
TFS Financial Corp. | 19,500 | 291,330 | ||||||
The First of Long Island Corp. | 6,000 | 158,040 | ||||||
The PNC Financial Services Group, Inc. | 98,242 | 8,487,126 | ||||||
Timberland Bancorp, Inc. | 2,000 | 21,120 | ||||||
Tompkins Financial Corp. | 4,024 | 202,005 | ||||||
Towne Bank | 3,800 | 57,608 | ||||||
Tree.com, Inc. * | 4,444 | 164,384 | ||||||
Trico Bancshares | 5,682 | 149,437 | ||||||
TrustCo Bank Corp. | 20,657 | 150,796 | ||||||
Trustmark Corp. | 14,762 | 359,159 | ||||||
U.S. Bancorp | 322,137 | 13,723,036 | ||||||
UMB Financial Corp. | 7,774 | 463,175 | ||||||
Umpqua Holdings Corp. | 31,951 | 562,338 | ||||||
Union Bankshares Corp. | 12,893 | 289,835 | ||||||
United Bankshares, Inc. | 12,300 | 421,644 | ||||||
United Community Banks, Inc. | 11,678 | 210,554 | ||||||
United Financial Bancorp, Inc. | 14,699 | 206,227 | ||||||
Valley National Bancorp (c) | 30,542 | 304,809 | ||||||
ViewPoint Financial Group, Inc. | 8,700 | 237,249 | ||||||
Walker & Dunlop, Inc. * | 9,700 | 156,267 | ||||||
Washington Federal, Inc. | 14,942 | 326,184 | ||||||
Washington Trust Bancorp, Inc. | 3,600 | 138,132 | ||||||
Webster Financial Corp. | 15,963 | 500,280 | ||||||
Wells Fargo & Co. | 845,813 | 44,904,212 | ||||||
WesBanco, Inc. | 7,756 | 267,272 |
40 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Westamerica Bancorp | 5,200 | 256,568 | ||||||
Western Alliance Bancorp * | 16,600 | 441,892 | ||||||
Wilshire Bancorp, Inc. | 9,900 | 98,010 | ||||||
Wintrust Financial Corp. | 8,900 | 412,248 | ||||||
WSFS Financial Corp. | 2,000 | 157,300 | ||||||
Zions Bancorp | 35,725 | 1,034,953 | ||||||
239,224,650 | ||||||||
Capital Goods 7.8% | ||||||||
3M Co. | 115,357 | 17,738,446 | ||||||
A.O. Smith Corp. | 11,800 | 629,530 | ||||||
AAON, Inc. | 10,279 | 201,982 | ||||||
AAR Corp. | 8,400 | 222,600 | ||||||
Aceto Corp. | 7,900 | 179,646 | ||||||
Actuant Corp., Class A | 10,280 | 325,773 | ||||||
Acuity Brands, Inc. | 7,500 | 1,045,725 | ||||||
AECOM Technology Corp. * | 31,726 | 1,032,679 | ||||||
Aegion Corp. * | 4,300 | 78,776 | ||||||
Aerovironment, Inc. * | 4,200 | 128,730 | ||||||
AGCO Corp. | 15,462 | 685,121 | ||||||
Air Lease Corp. | 17,400 | 636,666 | ||||||
Aircastle Ltd. | 14,100 | 269,028 | ||||||
Alamo Group, Inc. | 2,500 | 107,100 | ||||||
Albany International Corp., Class A | 6,718 | 253,806 | ||||||
Allegion plc | 17,433 | 925,518 | ||||||
Alliant Techsystems, Inc. | 5,537 | 647,608 | ||||||
Allison Transmission Holdings, Inc. | 28,555 | 927,466 | ||||||
Altra Industrial Motion Corp. | 4,300 | 135,536 | ||||||
American Railcar Industries, Inc. | 4,500 | 296,145 | ||||||
American Science & Engineering, Inc. | 2,000 | 110,600 | ||||||
American Superconductor Corp. * | 5,200 | 6,812 | ||||||
American Woodmark Corp. * | 4,000 | 163,640 | ||||||
AMETEK, Inc. | 43,459 | 2,266,387 | ||||||
Apogee Enterprises, Inc. | 6,600 | 289,740 | ||||||
Applied Industrial Technologies, Inc. | 6,525 | 318,485 | ||||||
Armstrong World Industries, Inc. * | 8,495 | 411,328 | ||||||
Astec Industries, Inc. | 5,700 | 216,087 | ||||||
Astronics Corp. * | 2,550 | 132,115 | ||||||
AZZ, Inc. | 5,700 | 266,532 | ||||||
B/E Aerospace, Inc. * | 18,000 | 1,340,100 | ||||||
Barnes Group, Inc. | 11,200 | 409,472 | ||||||
Beacon Roofing Supply, Inc. * | 6,600 | 182,622 | ||||||
Blount International, Inc. * | 15,900 | 243,429 | ||||||
Breeze-Eastern Corp. * | 500 | 5,205 | ||||||
Briggs & Stratton Corp. | 11,400 | 230,394 | ||||||
Builders FirstSource, Inc. * | 17,100 | 101,403 | ||||||
Carlisle Cos., Inc. | 10,500 | 933,240 | ||||||
Caterpillar, Inc. | 111,369 | 11,293,930 | ||||||
Chart Industries, Inc. * | 4,400 | 204,820 | ||||||
Chicago Bridge & Iron Co., N.V. | 17,800 | 972,592 | ||||||
CIRCOR International, Inc. | 3,750 | 281,812 | ||||||
CLARCOR, Inc. | 7,300 | 488,808 | ||||||
Colfax Corp. * | 16,400 | 891,832 | ||||||
Columbus McKinnon Corp. | 4,300 | 122,335 | ||||||
Comfort Systems USA, Inc. | 7,700 | 118,272 | ||||||
Crane Co. | 8,000 | 498,800 | ||||||
Cubic Corp. | 4,500 | 217,080 | ||||||
Cummins, Inc. | 29,500 | 4,312,310 | ||||||
Curtiss-Wright Corp. | 9,100 | 629,811 | ||||||
Danaher Corp. | 111,274 | 8,946,430 | ||||||
Deere & Co. | 65,454 | 5,598,935 | ||||||
DigitalGlobe, Inc. * | 12,322 | 352,286 | ||||||
Donaldson Co., Inc. | 22,100 | 918,918 | ||||||
Dover Corp. | 29,661 | 2,356,270 | ||||||
Ducommun, Inc. * | 3,200 | 84,512 | ||||||
DXP Enterprises, Inc. * | 1,700 | 112,693 | ||||||
Dycom Industries, Inc. * | 5,300 | 166,367 | ||||||
Dynamic Materials Corp. | 6,800 | 123,828 | ||||||
Eaton Corp. plc | 87,777 | 6,003,069 | ||||||
EMCOR Group, Inc. | 12,700 | 560,451 | ||||||
Emerson Electric Co. | 124,908 | 8,001,606 | ||||||
Encore Wire Corp. | 4,600 | 174,524 | ||||||
EnerSys | 7,500 | 471,000 | ||||||
Engility Holdings, Inc. * | 4,116 | 177,811 | ||||||
EnPro Industries, Inc. * | 4,900 | 316,197 | ||||||
ESCO Technologies, Inc. | 3,900 | 148,278 | ||||||
Esterline Technologies Corp. * | 5,900 | 690,949 | ||||||
Exelis, Inc. | 34,900 | 622,965 | ||||||
Fastenal Co. | 48,332 | 2,128,541 | ||||||
Federal Signal Corp. | 12,800 | 181,760 | ||||||
Flowserve Corp. | 27,700 | 1,883,323 | ||||||
Fluor Corp. | 28,519 | 1,891,950 | ||||||
Fortune Brands Home & Security, Inc. | 27,400 | 1,185,050 | ||||||
Foster Wheeler AG | 15,200 | 471,656 | ||||||
Franklin Electric Co., Inc. | 9,700 | 362,198 | ||||||
FreightCar America, Inc. | 2,500 | 82,425 | ||||||
FuelCell Energy, Inc. *(c) | 29,400 | 59,388 | ||||||
Furmanite Corp. * | 7,200 | 53,856 | ||||||
GATX Corp. | 8,900 | 564,260 | ||||||
GenCorp, Inc. * | 11,600 | 196,736 | ||||||
Generac Holdings, Inc. * | 12,500 | 566,750 | ||||||
General Cable Corp. | 6,700 | 94,939 | ||||||
General Dynamics Corp. | 56,500 | 7,896,440 | ||||||
General Electric Co. | 1,797,112 | 46,383,461 | ||||||
Gibraltar Industries, Inc. * | 6,300 | 96,075 | ||||||
Graco, Inc. | 10,812 | 848,742 | ||||||
GrafTech International Ltd. * | 16,600 | 71,214 | ||||||
Granite Construction, Inc. | 8,150 | 300,816 | ||||||
Great Lakes Dredge & Dock Corp. * | 11,600 | 81,084 | ||||||
Griffon Corp. | 15,100 | 185,579 | ||||||
H&E Equipment Services, Inc. | 6,800 | 254,252 | ||||||
Hardinge, Inc. | 4,800 | 53,856 | ||||||
Harsco Corp. | 11,300 | 244,984 | ||||||
HD Supply Holdings, Inc. * | 22,300 | 643,132 | ||||||
HEICO Corp. | 8,375 | 454,260 | ||||||
Hexcel Corp. * | 16,400 | 686,996 | ||||||
Hillenbrand, Inc. | 8,800 | 292,952 | ||||||
Honeywell International, Inc. | 141,380 | 13,589,446 | ||||||
Hubbell, Inc., Class B | 9,300 | 1,054,713 | ||||||
Huntington Ingalls Industries, Inc. | 8,172 | 864,761 | ||||||
Hyster-Yale Materials Handling, Inc. | 2,300 | 180,527 | ||||||
IDEX Corp. | 19,025 | 1,425,163 | ||||||
Illinois Tool Works, Inc. | 66,800 | 6,082,140 | ||||||
Ingersoll-Rand plc | 47,000 | 2,943,140 | ||||||
Integrated Electrical Services, Inc. * | 5,105 | 40,483 | ||||||
ITT Corp. | 15,000 | 675,900 | ||||||
Jacobs Engineering Group, Inc. * | 21,700 | 1,029,665 |
See financial notes 41
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
John Bean Technologies Corp. | 4,983 | 149,341 | ||||||
Joy Global, Inc. | 17,550 | 923,656 | ||||||
Kadant, Inc. | 3,001 | 124,061 | ||||||
Kaman Corp. | 5,700 | 245,442 | ||||||
KBR, Inc. | 24,000 | 457,920 | ||||||
Kennametal, Inc. | 14,700 | 567,567 | ||||||
Kratos Defense & Security Solutions, Inc. * | 10,180 | 70,955 | ||||||
L-3 Communications Holdings, Inc. | 14,600 | 1,773,316 | ||||||
L.B. Foster Co., Class A | 1,400 | 75,726 | ||||||
Lawson Products, Inc. * | 5,500 | 132,440 | ||||||
Layne Christensen Co. * | 4,500 | 32,400 | ||||||
Lennox International, Inc. | 7,471 | 664,321 | ||||||
Lincoln Electric Holdings, Inc. | 13,600 | 985,728 | ||||||
Lindsay Corp. (c) | 3,100 | 271,870 | ||||||
Lockheed Martin Corp. | 48,535 | 9,249,315 | ||||||
Lydall, Inc. * | 5,500 | 170,115 | ||||||
Magnetek, Inc. * | 1,650 | 51,266 | ||||||
Masco Corp. | 69,200 | 1,527,244 | ||||||
MasTec, Inc. * | 15,750 | 451,080 | ||||||
Meritor, Inc. * | 22,600 | 259,674 | ||||||
Moog, Inc., Class A * | 7,587 | 580,709 | ||||||
MRC Global, Inc. * | 15,600 | 328,068 | ||||||
MSC Industrial Direct Co., Inc., Class A | 8,000 | 647,760 | ||||||
Mueller Industries, Inc. | 11,800 | 383,028 | ||||||
Mueller Water Products, Inc., Class A | 23,139 | 228,382 | ||||||
MYR Group, Inc. * | 8,500 | 220,490 | ||||||
National Presto Industries, Inc. (c) | 2,900 | 182,874 | ||||||
Navistar International Corp. * | 11,600 | 410,292 | ||||||
NCI Building Systems, Inc. * | 14,480 | 287,718 | ||||||
NN, Inc. | 1,800 | 45,000 | ||||||
Nordson Corp. | 9,500 | 727,225 | ||||||
Nortek, Inc. * | 3,200 | 266,496 | ||||||
Northrop Grumman Corp. | 37,659 | 5,195,436 | ||||||
NOW, Inc. * | 18,205 | 547,242 | ||||||
Omega Flex, Inc. | 700 | 18,634 | ||||||
Orbital Sciences Corp. * | 12,600 | 331,380 | ||||||
Oshkosh Corp. | 14,300 | 640,068 | ||||||
Owens Corning | 18,700 | 599,522 | ||||||
PACCAR, Inc. | 60,922 | 3,979,425 | ||||||
Pall Corp. | 18,500 | 1,691,270 | ||||||
Parker-Hannifin Corp. | 25,700 | 3,264,671 | ||||||
Pentair plc | 34,885 | 2,339,039 | ||||||
Polypore International, Inc. * | 6,100 | 267,912 | ||||||
Powell Industries, Inc. | 2,800 | 127,484 | ||||||
Precision Castparts Corp. | 26,402 | 5,826,921 | ||||||
Preformed Line Products Co. | 1,000 | 56,990 | ||||||
Primoris Services Corp. | 6,900 | 198,168 | ||||||
Proto Labs, Inc. * | 4,800 | 313,776 | ||||||
Quanex Building Products Corp. | 6,125 | 122,623 | ||||||
Quanta Services, Inc. * | 46,271 | 1,576,916 | ||||||
Raven Industries, Inc. | 5,600 | 141,960 | ||||||
Raytheon Co. | 54,477 | 5,659,071 | ||||||
RBC Bearings, Inc. | 3,000 | 182,250 | ||||||
Regal-Beloit Corp. | 8,700 | 617,439 | ||||||
Rexnord Corp. * | 14,500 | 428,475 | ||||||
Rockwell Automation, Inc. | 24,231 | 2,722,353 | ||||||
Rockwell Collins, Inc. | 24,200 | 2,036,430 | ||||||
Roper Industries, Inc. | 17,559 | 2,779,590 | ||||||
Rush Enterprises, Inc., Class A * | 8,200 | 312,420 | ||||||
Sensata Technologies Holding N.V. * | 34,800 | 1,698,588 | ||||||
Simpson Manufacturing Co., Inc. | 6,200 | 205,096 | ||||||
Snap-on, Inc. | 10,580 | 1,398,041 | ||||||
SolarCity Corp. *(c) | 9,100 | 538,538 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 22,800 | 896,952 | ||||||
SPX Corp. | 7,110 | 673,957 | ||||||
Standex International Corp. | 3,000 | 258,750 | ||||||
Stanley Black & Decker, Inc. | 27,513 | 2,576,317 | ||||||
Sun Hydraulics Corp. | 5,600 | 222,936 | ||||||
TAL International Group, Inc. * | 6,000 | 258,780 | ||||||
Taser International, Inc. * | 11,800 | 222,312 | ||||||
Tecumseh Products Co. * | 9,100 | 33,579 | ||||||
Teledyne Technologies, Inc. * | 6,757 | 700,228 | ||||||
Tennant Co. | 4,200 | 309,666 | ||||||
Terex Corp. | 18,400 | 529,368 | ||||||
Textainer Group Holdings Ltd. | 9,500 | 327,180 | ||||||
Textron, Inc. | 49,500 | 2,055,735 | ||||||
The Babcock & Wilcox Co. | 17,400 | 497,640 | ||||||
The Boeing Co. | 120,836 | 15,093,625 | ||||||
The Gorman-Rupp Co. | 5,141 | 163,175 | ||||||
The Greenbrier Cos., Inc. (c) | 5,800 | 362,732 | ||||||
The KEYW Holding Corp. *(c) | 8,400 | 85,260 | ||||||
The Manitowoc Co., Inc. | 23,200 | 483,488 | ||||||
The Middleby Corp. * | 9,300 | 823,050 | ||||||
The Timken Co. | 13,100 | 563,169 | ||||||
The Toro Co. | 10,600 | 654,338 | ||||||
Thermon Group Holdings, Inc. * | 9,500 | 231,515 | ||||||
Titan International, Inc. | 6,925 | 73,128 | ||||||
Titan Machinery, Inc. *(c) | 3,600 | 49,536 | ||||||
TransDigm Group, Inc. | 8,400 | 1,571,052 | ||||||
Trex Co., Inc. * | 5,400 | 232,200 | ||||||
TriMas Corp. * | 9,293 | 294,216 | ||||||
Trinity Industries, Inc. | 28,300 | 1,010,593 | ||||||
Triumph Group, Inc. | 8,100 | 564,003 | ||||||
Tutor Perini Corp. * | 7,100 | 198,871 | ||||||
United Rentals, Inc. * | 16,400 | 1,804,984 | ||||||
United Technologies Corp. | 152,628 | 16,331,196 | ||||||
Universal Forest Products, Inc. | 4,600 | 229,862 | ||||||
USG Corp. * | 16,900 | 453,934 | ||||||
Valmont Industries, Inc. | 4,300 | 585,531 | ||||||
Vectrus, Inc. * | 1,938 | 47,365 | ||||||
Veritiv Corp. * | 1,466 | 66,131 | ||||||
Vicor Corp. * | 9,900 | 134,739 | ||||||
W.W. Grainger, Inc. | 10,800 | 2,665,440 | ||||||
Wabash National Corp. * | 11,200 | 115,360 | ||||||
WABCO Holdings, Inc. * | 10,233 | 996,490 | ||||||
Wabtec Corp. | 15,756 | 1,359,743 | ||||||
Watsco, Inc. | 4,200 | 426,804 | ||||||
Watts Water Technologies, Inc., Class A | 4,000 | 242,520 | ||||||
WESCO International, Inc. * | 8,100 | 667,521 | ||||||
Woodward, Inc. | 10,500 | 537,705 | ||||||
Xylem, Inc. | 30,500 | 1,108,980 | ||||||
314,158,439 | ||||||||
Commercial & Professional Supplies 1.0% | ||||||||
ABM Industries, Inc. | 7,200 | 199,008 | ||||||
Acacia Research Corp. (c) | 15,600 | 280,800 | ||||||
ACCO Brands Corp. * | 42,001 | 345,668 |
42 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
AMREP Corp. * | 2,500 | 9,725 | ||||||
ARC Document Solutions, Inc. * | 7,000 | 71,050 | ||||||
Brady Corp., Class A | 6,400 | 152,576 | ||||||
Casella Waste Systems, Inc., Class A * | 13,300 | 59,850 | ||||||
CDI Corp. | 5,500 | 94,545 | ||||||
Cenveo, Inc. *(c) | 7,300 | 16,644 | ||||||
Cintas Corp. | 16,650 | 1,219,446 | ||||||
Civeo Corp. | 17,200 | 209,668 | ||||||
Clean Harbors, Inc. * | 9,100 | 451,633 | ||||||
Compx International, Inc. | 2,000 | 22,260 | ||||||
Copart, Inc. * | 17,618 | 589,146 | ||||||
Covanta Holding Corp. | 26,400 | 582,648 | ||||||
CRA International, Inc. * | 4,200 | 126,000 | ||||||
Deluxe Corp. | 7,600 | 462,080 | ||||||
Ennis, Inc. | 6,500 | 96,395 | ||||||
Equifax, Inc. | 21,895 | 1,658,327 | ||||||
Exponent, Inc. | 3,300 | 263,406 | ||||||
FTI Consulting, Inc. * | 5,700 | 230,166 | ||||||
G&K Services, Inc., Class A | 4,100 | 258,587 | ||||||
GP Strategies Corp. * | 1,500 | 49,740 | ||||||
Healthcare Services Group, Inc. | 12,656 | 376,896 | ||||||
Heidrick & Struggles International, Inc. | 5,000 | 104,100 | ||||||
Herman Miller, Inc. | 8,700 | 278,400 | ||||||
HNI Corp. | 6,400 | 298,560 | ||||||
Hudson Global, Inc. * | 3,220 | 10,980 | ||||||
Huron Consulting Group, Inc. * | 5,000 | 348,050 | ||||||
ICF International, Inc. * | 6,500 | 236,210 | ||||||
IHS, Inc., Class A * | 12,100 | 1,585,463 | ||||||
InnerWorkings, Inc. * | 7,400 | 67,192 | ||||||
Insperity, Inc. | 6,800 | 214,608 | ||||||
Interface, Inc. | 8,400 | 134,652 | ||||||
KAR Auction Services, Inc. | 22,500 | 683,100 | ||||||
Kelly Services, Inc., Class A | 5,700 | 100,491 | ||||||
Kforce, Inc. | 7,105 | 164,481 | ||||||
Kimball International, Inc., Class B | 9,100 | 163,618 | ||||||
Knoll, Inc. | 7,000 | 139,230 | ||||||
Korn/Ferry International * | 6,600 | 184,338 | ||||||
Manpowergroup, Inc. | 14,537 | 970,345 | ||||||
Mastech Holdings, Inc. | 675 | 7,931 | ||||||
Matthews International Corp., Class A | 5,300 | 244,224 | ||||||
McGrath RentCorp | 4,600 | 168,038 | ||||||
Mistras Group, Inc. * | 4,000 | 65,960 | ||||||
Mobile Mini, Inc. | 6,200 | 271,746 | ||||||
MSA Safety, Inc. | 4,700 | 270,109 | ||||||
Multi-Color Corp. | 4,625 | 228,013 | ||||||
Navigant Consulting, Inc. * | 14,000 | 215,460 | ||||||
Nielsen N.V. | 58,600 | 2,489,914 | ||||||
NL Industries, Inc. | 7,800 | 56,862 | ||||||
On Assignment, Inc. * | 6,500 | 189,150 | ||||||
Performant Financial Corp. * | 7,700 | 66,451 | ||||||
Pitney Bowes, Inc. | 35,500 | 878,270 | ||||||
Quad Graphics, Inc. | 9,800 | 216,090 | ||||||
R.R. Donnelley & Sons Co. | 36,638 | 639,333 | ||||||
Republic Services, Inc. | 47,845 | 1,837,248 | ||||||
Resources Connection, Inc. | 11,300 | 174,811 | ||||||
Robert Half International, Inc. | 22,900 | 1,254,462 | ||||||
Rollins, Inc. | 9,218 | 293,778 | ||||||
RPX Corp. * | 10,300 | 144,715 | ||||||
Steelcase, Inc., Class A | 11,500 | 203,780 | ||||||
Stericycle, Inc. * | 14,200 | 1,789,200 | ||||||
Team, Inc. * | 3,000 | 126,420 | ||||||
Tetra Tech, Inc. | 13,131 | 352,042 | ||||||
The ADT Corp. | 33,866 | 1,213,757 | ||||||
The Advisory Board Co. * | 6,800 | 364,956 | ||||||
The Brink’s Co. | 7,100 | 149,100 | ||||||
The Corporate Executive Board Co. | 5,500 | 405,350 | ||||||
The Dun & Bradstreet Corp. | 5,840 | 717,210 | ||||||
The Standard Register Co. *(c) | 820 | 4,198 | ||||||
Towers Watson & Co., Class A | 12,300 | 1,356,567 | ||||||
TRC Cos., Inc. * | 3,350 | 24,388 | ||||||
TrueBlue, Inc. * | 10,100 | 249,672 | ||||||
Tyco International Ltd. | 80,758 | 3,466,941 | ||||||
UniFirst Corp. | 3,700 | 412,772 | ||||||
United Stationers, Inc. | 5,800 | 242,266 | ||||||
US Ecology, Inc. | 3,500 | 175,980 | ||||||
Verisk Analytics, Inc., Class A * | 31,000 | 1,932,850 | ||||||
Viad Corp. | 3,625 | 92,474 | ||||||
Virco Mfg. Corp. * | 1,170 | 3,171 | ||||||
WageWorks, Inc. * | 5,000 | 285,050 | ||||||
Waste Connections, Inc. | 21,412 | 1,068,459 | ||||||
Waste Management, Inc. | 79,810 | 3,901,911 | ||||||
West Corp. | 11,812 | 377,984 | ||||||
42,139,145 | ||||||||
Consumer Durables & Apparel 1.6% | ||||||||
Arctic Cat, Inc. | 2,400 | 80,784 | ||||||
Beazer Homes USA, Inc. * | 10,835 | 194,272 | ||||||
Blyth, Inc. (c) | 7,400 | 62,086 | ||||||
Brunswick Corp. | 14,400 | 673,920 | ||||||
Callaway Golf Co. | 31,065 | 243,550 | ||||||
Carter’s, Inc. | 9,400 | 734,422 | ||||||
Cavco Industries, Inc. * | 1,610 | 117,321 | ||||||
Coach, Inc. | 52,508 | 1,805,225 | ||||||
Columbia Sportswear Co. | 6,900 | 265,926 | ||||||
Crocs, Inc. * | 15,000 | 175,200 | ||||||
CSS Industries, Inc. | 4,800 | 137,088 | ||||||
D.R. Horton, Inc. | 55,990 | 1,276,012 | ||||||
Deckers Outdoor Corp. * | 5,200 | 454,792 | ||||||
Ethan Allen Interiors, Inc. | 10,200 | 288,660 | ||||||
Flexsteel Industries, Inc. | 1,900 | 65,189 | ||||||
Foamex International, Inc. *(b)(g) | 2,278 | — | ||||||
Fossil Group, Inc. * | 7,662 | 778,919 | ||||||
G-III Apparel Group Ltd. * | 2,800 | 222,180 | ||||||
Garmin Ltd. | 22,300 | 1,237,204 | ||||||
Hanesbrands, Inc. | 17,547 | 1,853,139 | ||||||
Harman International Industries, Inc. | 13,600 | 1,459,824 | ||||||
Hasbro, Inc. | 18,800 | 1,081,564 | ||||||
Helen of Troy Ltd. * | 5,000 | 309,250 | ||||||
Hovnanian Enterprises, Inc., Class A * | 50,500 | 189,880 | ||||||
Iconix Brand Group, Inc. * | 9,600 | 384,096 | ||||||
iRobot Corp. *(c) | 7,300 | 260,756 | ||||||
JAKKS Pacific, Inc. *(c) | 7,500 | 47,850 | ||||||
Jarden Corp. * | 22,566 | 1,468,821 | ||||||
Kate Spade & Co. * | 20,600 | 558,878 | ||||||
KB Home | 19,700 | 310,078 | ||||||
La-Z-Boy, Inc. | 7,500 | 171,450 | ||||||
LeapFrog Enterprises, Inc. * | 9,000 | 47,880 |
See financial notes 43
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Leggett & Platt, Inc. | 23,300 | 917,554 | ||||||
Lennar Corp., Class A | 31,290 | 1,347,973 | ||||||
Libbey, Inc. * | 7,232 | 207,920 | ||||||
lululemon athletica, Inc. * | 20,157 | 839,539 | ||||||
M.D.C. Holdings, Inc. | 9,003 | 219,853 | ||||||
M/I Homes, Inc. * | 3,000 | 64,620 | ||||||
Marine Products Corp. | 405 | 3,418 | ||||||
Mattel, Inc. | 59,000 | 1,833,130 | ||||||
Meritage Homes Corp. * | 5,900 | 217,061 | ||||||
Michael Kors Holdings Ltd. * | 36,100 | 2,837,099 | ||||||
Mohawk Industries, Inc. * | 12,319 | 1,749,791 | ||||||
Movado Group, Inc. | 5,800 | 204,740 | ||||||
NACCO Industries, Inc., Class A | 1,900 | 111,283 | ||||||
Nautilus, Inc. * | 9,825 | 131,458 | ||||||
Newell Rubbermaid, Inc. | 47,900 | 1,596,507 | ||||||
NIKE, Inc., Class B | 127,695 | 11,871,804 | ||||||
NVR, Inc. * | 700 | 859,306 | ||||||
Oxford Industries, Inc. | 2,500 | 153,125 | ||||||
Perry Ellis International, Inc. * | 5,500 | 112,475 | ||||||
Polaris Industries, Inc. | 11,781 | 1,777,282 | ||||||
PulteGroup, Inc. | 56,976 | 1,093,369 | ||||||
PVH Corp. | 14,411 | 1,647,898 | ||||||
Quiksilver, Inc. * | 25,900 | 45,325 | ||||||
Ralph Lauren Corp. | 10,700 | 1,763,788 | ||||||
Skechers U.S.A., Inc., Class A * | 6,500 | 355,875 | ||||||
Skyline Corp. * | 2,600 | 9,516 | ||||||
Smith & Wesson Holding Corp. *(c) | 12,400 | 125,984 | ||||||
Standard Pacific Corp. * | 28,500 | 210,900 | ||||||
Stanley Furniture Co., Inc. * | 6,875 | 19,937 | ||||||
Steven Madden Ltd. * | 9,112 | 285,661 | ||||||
Sturm, Ruger & Co., Inc. (c) | 2,700 | 112,536 | ||||||
Superior Uniform Group, Inc. | 1,600 | 38,400 | ||||||
Taylor Morrison Home Corp., Class A * | 9,876 | 170,262 | ||||||
Tempur Sealy International, Inc. * | 10,300 | 542,192 | ||||||
The Ryland Group, Inc. | 6,700 | 239,927 | ||||||
Toll Brothers, Inc. * | 26,200 | 837,090 | ||||||
TRI Pointe Homes, Inc. * | 25,000 | 342,250 | ||||||
Tumi Holdings, Inc. * | 9,200 | 191,084 | ||||||
Tupperware Brands Corp. | 9,700 | 618,375 | ||||||
Under Armour, Inc., Class A * | 31,300 | 2,052,654 | ||||||
Universal Electronics, Inc. * | 5,200 | 295,828 | ||||||
Vera Bradley, Inc. * | 11,000 | 250,800 | ||||||
VF Corp. | 60,700 | 4,108,176 | ||||||
Vince Holding Corp. * | 5,757 | 201,783 | ||||||
Whirlpool Corp. | 14,214 | 2,445,519 | ||||||
Wolverine World Wide, Inc. | 15,600 | 423,384 | ||||||
62,440,667 | ||||||||
Consumer Services 2.1% | ||||||||
Ambassadors Group, Inc. * | 3,400 | 12,070 | ||||||
American Public Education, Inc. * | 5,600 | 173,544 | ||||||
Apollo Education Group, Inc. * | 16,450 | 471,457 | ||||||
Aramark | 12,000 | 334,920 | ||||||
Ascent Capital Group, Inc., Class A * | 3,116 | 200,359 | ||||||
Bally Technologies, Inc. * | 8,382 | 673,913 | ||||||
Belmond Ltd., Class A * | 12,600 | 144,396 | ||||||
Biglari Holdings, Inc. * | 279 | 97,416 | ||||||
BJ’s Restaurants, Inc. * | 7,300 | 321,346 | ||||||
Bloomin’ Brands, Inc. * | 10,300 | 194,773 | ||||||
Bob Evans Farms, Inc. | 4,200 | 205,170 | ||||||
Boyd Gaming Corp. * | 21,300 | 246,015 | ||||||
Bridgepoint Education, Inc. * | 13,700 | 173,168 | ||||||
Bright Horizons Family Solutions, Inc. * | 4,912 | 218,879 | ||||||
Brinker International, Inc. | 12,650 | 678,546 | ||||||
Buffalo Wild Wings, Inc. * | 3,000 | 447,840 | ||||||
Burger King Worldwide, Inc. (c) | 12,200 | 398,696 | ||||||
Caesars Entertainment Corp. *(c) | 8,300 | 101,177 | ||||||
Career Education Corp. * | 25,114 | 145,661 | ||||||
Carnival Corp. | 81,639 | 3,277,806 | ||||||
Chipotle Mexican Grill, Inc. * | 5,579 | 3,559,402 | ||||||
Choice Hotels International, Inc. | 5,200 | 278,200 | ||||||
Churchill Downs, Inc. | 2,900 | 295,742 | ||||||
Chuy’s Holdings, Inc. * | 6,760 | 202,192 | ||||||
ClubCorp Holdings, Inc. | 10,442 | 199,024 | ||||||
Corinthian Colleges, Inc. *(c) | 21,700 | 4,017 | ||||||
Cracker Barrel Old Country Store, Inc. | 3,446 | 397,496 | ||||||
Darden Restaurants, Inc. | 25,500 | 1,320,390 | ||||||
Denny’s Corp. * | 21,100 | 181,882 | ||||||
DeVry Education Group, Inc. | 9,400 | 455,054 | ||||||
DineEquity, Inc. | 3,000 | 266,880 | ||||||
Domino’s Pizza, Inc. | 9,200 | 816,868 | ||||||
Dover Downs Gaming & Entertainment, Inc. * | 5,899 | 4,424 | ||||||
Dover Motorsports, Inc. | 1,400 | 3,339 | ||||||
Dunkin’ Brands Group, Inc. | 16,800 | 764,064 | ||||||
Education Management Corp. * | 19,600 | 11,664 | ||||||
Eldorado Resorts, Inc. * | 5,800 | 23,896 | ||||||
Extended Stay America, Inc. | 13,200 | 304,392 | ||||||
Fiesta Restaurant Group, Inc. * | 4,300 | 237,145 | ||||||
Graham Holdings Co., Class B | 700 | 548,520 | ||||||
Grand Canyon Education, Inc. * | 8,500 | 407,150 | ||||||
H&R Block, Inc. | 54,700 | 1,767,357 | ||||||
Hilton Worldwide Holdings, Inc. * | 52,947 | 1,336,382 | ||||||
Houghton Mifflin Harcourt Co. * | 19,600 | 392,196 | ||||||
Hyatt Hotels Corp., Class A * | 9,600 | 568,512 | ||||||
International Game Technology | 49,300 | 808,027 | ||||||
International Speedway Corp., Class A | 6,445 | 201,922 | ||||||
Interval Leisure Group, Inc. | 10,769 | 226,580 | ||||||
Isle of Capri Casinos, Inc. * | 11,800 | 87,674 | ||||||
ITT Educational Services, Inc. *(c) | 5,600 | 56,616 | ||||||
Jack in the Box, Inc. | 7,000 | 497,280 | ||||||
K12, Inc. * | 12,100 | 150,040 | ||||||
Krispy Kreme Doughnuts, Inc. * | 14,100 | 266,772 | ||||||
La Quinta Holdings, Inc. * | 15,800 | 322,478 | ||||||
Lakes Entertainment, Inc. * | 3,400 | 29,070 | ||||||
Las Vegas Sands Corp. | 65,800 | 4,096,708 | ||||||
Learning Tree International, Inc. * | 1,400 | 3,472 | ||||||
Life Time Fitness, Inc. * | 5,500 | 306,735 | ||||||
LifeLock, Inc. * | 11,000 | 186,010 | ||||||
Luby’s, Inc. * | 6,900 | 34,431 | ||||||
Marriott International, Inc., Class A | 39,208 | 2,970,006 | ||||||
Marriott Vacations Worldwide Corp. | 4,080 | 283,315 | ||||||
McDonald’s Corp. | 175,440 | 16,443,991 | ||||||
MGM Resorts International * | 69,300 | 1,611,225 | ||||||
Monarch Casino & Resort, Inc. * | 8,000 | 130,160 |
44 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Multimedia Games Holding Co., Inc. * | 5,500 | 191,950 | ||||||
Norwegian Cruise Line Holdings Ltd. * | 16,200 | 631,800 | ||||||
Panera Bread Co., Class A * | 4,200 | 678,888 | ||||||
Papa John’s International, Inc. | 6,800 | 317,968 | ||||||
Penn National Gaming, Inc. * | 17,000 | 222,530 | ||||||
Pinnacle Entertainment, Inc. * | 9,800 | 251,174 | ||||||
Popeyes Louisiana Kitchen, Inc. * | 6,600 | 305,910 | ||||||
Red Robin Gourmet Burgers, Inc. * | 2,300 | 126,431 | ||||||
Regis Corp. | 17,300 | 293,754 | ||||||
Royal Caribbean Cruises Ltd. | 30,900 | 2,100,273 | ||||||
Ruby Tuesday, Inc. * | 33,713 | 258,916 | ||||||
Scientific Games Corp., Class A * | 10,900 | 128,293 | ||||||
SeaWorld Entertainment, Inc. | 12,511 | 240,712 | ||||||
Service Corp. International | 35,000 | 765,450 | ||||||
Six Flags Entertainment Corp. | 15,600 | 628,680 | ||||||
Sonic Corp. * | 12,868 | 324,402 | ||||||
Sotheby’s | 11,338 | 449,665 | ||||||
Speedway Motorsports, Inc. | 6,700 | 131,119 | ||||||
Starbucks Corp. | 132,997 | 10,049,253 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 33,230 | 2,547,412 | ||||||
Steiner Leisure Ltd. * | 3,000 | 126,540 | ||||||
Strayer Education, Inc. * | 4,300 | 314,717 | ||||||
Texas Roadhouse, Inc. | 8,300 | 239,621 | ||||||
The Cheesecake Factory, Inc. | 7,087 | 325,577 | ||||||
The Wendy’s Co. | 50,775 | 407,215 | ||||||
Vail Resorts, Inc. | 5,300 | 457,708 | ||||||
Weight Watchers International, Inc. (c) | 6,500 | 169,325 | ||||||
Wyndham Worldwide Corp. | 23,044 | 1,789,827 | ||||||
Wynn Resorts Ltd. | 14,000 | 2,660,140 | ||||||
Yum! Brands, Inc. | 80,200 | 5,760,766 | ||||||
84,471,868 | ||||||||
Diversified Financials 4.6% | ||||||||
Affiliated Managers Group, Inc. * | 9,517 | 1,901,401 | ||||||
Ally Financial, Inc. * | 16,700 | 379,090 | ||||||
American Express Co. | 160,903 | 14,473,225 | ||||||
Ameriprise Financial, Inc. | 33,430 | 4,217,863 | ||||||
Arlington Asset Investment Corp., Class A | 6,941 | 190,045 | ||||||
Artisan Partners Asset Management, Inc., Class A | 5,500 | 266,640 | ||||||
Asta Funding, Inc. * | 6,000 | 50,580 | ||||||
Atlanticus Holdings Corp. * | 4,629 | 6,481 | ||||||
Berkshire Hathaway, Inc., Class B * | 324,902 | 45,538,264 | ||||||
BGC Partners, Inc., Class A | 28,300 | 239,984 | ||||||
BlackRock, Inc. | 23,132 | 7,890,557 | ||||||
Calamos Asset Management, Inc., Class A | 5,000 | 68,500 | ||||||
Capital One Financial Corp. | 98,857 | 8,182,394 | ||||||
Cash America International, Inc. | 6,900 | 339,135 | ||||||
CBOE Holdings, Inc. | 14,200 | 836,948 | ||||||
CME Group, Inc. | 56,850 | 4,764,598 | ||||||
Cohen & Steers, Inc. | 5,400 | 231,444 | ||||||
Cowen Group, Inc., Class A * | 11,889 | 48,032 | ||||||
Credit Acceptance Corp. * | 2,100 | 309,876 | ||||||
Discover Financial Services | 81,107 | 5,173,004 | ||||||
E*TRADE Financial Corp. * | 53,233 | 1,187,096 | ||||||
Eaton Vance Corp. | 22,700 | 836,041 | ||||||
Encore Capital Group, Inc. * | 5,600 | 254,856 | ||||||
Evercore Partners, Inc., Class A | 6,500 | 336,505 | ||||||
Ezcorp, Inc., Class A * | 20,600 | 232,368 | ||||||
FBR & Co. * | 1,000 | 24,140 | ||||||
Federated Investors, Inc., Class B | 14,650 | 458,105 | ||||||
Financial Engines, Inc. | 7,800 | 310,986 | ||||||
First Cash Financial Services, Inc. * | 3,800 | 224,504 | ||||||
FNFV Group * | 16,478 | 221,465 | ||||||
Franklin Resources, Inc. | 69,300 | 3,853,773 | ||||||
FXCM, Inc., Class A | 14,077 | 231,707 | ||||||
GAMCO Investors, Inc., Class A | 3,400 | 280,908 | ||||||
GFI Group, Inc. | 18,700 | 102,850 | ||||||
Green Dot Corp., Class A * | 10,049 | 240,171 | ||||||
Greenhill & Co., Inc. | 4,500 | 202,500 | ||||||
HFF, Inc., Class A | 9,800 | 308,504 | ||||||
Interactive Brokers Group, Inc., Class A | 7,600 | 196,232 | ||||||
Intercontinental Exchange, Inc. | 20,686 | 4,308,687 | ||||||
INTL FCStone, Inc. * | 4,437 | 80,310 | ||||||
Invesco Ltd. | 73,200 | 2,962,404 | ||||||
Investment Technology Group, Inc. * | 8,050 | 144,337 | ||||||
Janus Capital Group, Inc. | 26,200 | 392,738 | ||||||
KCG Holdings, Inc., Class A * | 15,533 | 165,582 | ||||||
Legg Mason, Inc. | 17,550 | 912,600 | ||||||
Leucadia National Corp. | 57,450 | 1,366,161 | ||||||
LPL Financial Holdings, Inc. | 12,800 | 529,792 | ||||||
MarketAxess Holdings, Inc. | 5,300 | 342,645 | ||||||
McGraw Hill Financial, Inc. | 49,661 | 4,493,327 | ||||||
MicroFinancial, Inc. | 1,900 | 15,941 | ||||||
Moody’s Corp. | 33,100 | 3,284,513 | ||||||
Morgan Stanley | 274,925 | 9,608,629 | ||||||
MSCI, Inc. | 20,000 | 933,200 | ||||||
Navient Corp. | 72,000 | 1,424,160 | ||||||
Nelnet, Inc., Class A | 6,400 | 304,576 | ||||||
NewStar Financial, Inc. * | 13,500 | 184,680 | ||||||
Northern Trust Corp. | 39,500 | 2,618,850 | ||||||
NorthStar Asset Management Group, Inc. * | 33,475 | 606,567 | ||||||
PHH Corp. * | 7,186 | 170,236 | ||||||
PICO Holdings, Inc. * | 3,700 | 81,770 | ||||||
Piper Jaffray Cos. * | 3,950 | 223,017 | ||||||
PRA Group, Inc. * | 9,800 | 619,850 | ||||||
Raymond James Financial, Inc. | 21,050 | 1,181,536 | ||||||
RCS Capital Corp., Class A | 9,017 | 147,969 | ||||||
Resource America, Inc., Class A | 4,000 | 38,160 | ||||||
Santander Consumer USA Holdings, Inc. | 12,900 | 238,650 | ||||||
SEI Investments Co. | 22,800 | 881,448 | ||||||
SLM Corp. | 72,000 | 687,600 | ||||||
Springleaf Holdings, Inc. * | 5,500 | 205,810 | ||||||
State Street Corp. | 74,960 | 5,656,482 | ||||||
Stifel Financial Corp. * | 11,785 | 559,905 | ||||||
SWS Group, Inc. * | 8,211 | 60,679 | ||||||
Synchrony Financial * | 21,900 | 591,738 | ||||||
T. Rowe Price Group, Inc. | 49,500 | 4,063,455 | ||||||
TD Ameritrade Holding Corp. | 48,100 | 1,622,894 | ||||||
The Bank of New York Mellon Corp. | 204,118 | 7,903,449 |
See financial notes 45
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Charles Schwab Corp. (a) | 211,426 | 6,061,583 | ||||||
The First Marblehead Corp. * | 750 | 1,853 | ||||||
The Goldman Sachs Group, Inc. | 73,055 | 13,879,719 | ||||||
The NASDAQ OMX Group, Inc. | 19,100 | 826,266 | ||||||
TPG Specialty Lending, Inc. | 10,762 | 180,479 | ||||||
Virtus Investment Partners, Inc. | 875 | 156,809 | ||||||
Voya Financial, Inc. | 27,789 | 1,090,718 | ||||||
Waddell & Reed Financial, Inc., Class A | 14,750 | 704,165 | ||||||
Walter Investment Management Corp. *(c) | 5,325 | 120,984 | ||||||
Westwood Holdings Group, Inc. | 1,785 | 120,488 | ||||||
WisdomTree Investments, Inc. * | 20,500 | 302,375 | ||||||
World Acceptance Corp. *(c) | 3,000 | 214,980 | ||||||
187,885,538 | ||||||||
Energy 8.4% | ||||||||
Abraxas Petroleum Corp. * | 36,200 | 149,506 | ||||||
Adams Resources & Energy, Inc. | 2,300 | 96,715 | ||||||
Alon USA Energy, Inc. | 8,700 | 139,548 | ||||||
Alpha Natural Resources, Inc. *(c) | 29,330 | 57,487 | ||||||
Anadarko Petroleum Corp. | 92,568 | 8,495,891 | ||||||
Antero Resources Corp. * | 9,700 | 508,668 | ||||||
Apache Corp. | 71,572 | 5,525,358 | ||||||
Apco Oil & Gas International, Inc. * | 6,500 | 93,145 | ||||||
Approach Resources, Inc. *(c) | 4,000 | 39,600 | ||||||
Arch Coal, Inc. (c) | 26,500 | 57,240 | ||||||
Athlon Energy, Inc. * | 10,006 | 583,350 | ||||||
Atwood Oceanics, Inc. * | 9,500 | 386,175 | ||||||
Baker Hughes, Inc. | 83,465 | 4,420,307 | ||||||
Basic Energy Services, Inc. * | 8,500 | 109,650 | ||||||
Bill Barrett Corp. * | 6,700 | 101,840 | ||||||
Bonanza Creek Energy, Inc. * | 6,200 | 280,488 | ||||||
Bristow Group, Inc. | 6,000 | 443,400 | ||||||
C&J Energy Services, Inc. * | 10,200 | 196,962 | ||||||
Cabot Oil & Gas Corp. | 73,200 | 2,276,520 | ||||||
Callon Petroleum Co. * | 18,200 | 119,392 | ||||||
Cameron International Corp. * | 39,247 | 2,337,159 | ||||||
CARBO Ceramics, Inc. (c) | 3,300 | 170,511 | ||||||
Carrizo Oil & Gas, Inc. * | 6,800 | 353,192 | ||||||
Cheniere Energy, Inc. * | 38,600 | 2,895,000 | ||||||
Chesapeake Energy Corp. | 89,130 | 1,976,903 | ||||||
Chevron Corp. | 339,623 | 40,737,779 | ||||||
Cimarex Energy Co. | 15,562 | 1,768,933 | ||||||
Clayton Williams Energy, Inc. * | 2,500 | 207,850 | ||||||
Clean Energy Fuels Corp. *(c) | 17,300 | 126,463 | ||||||
Cloud Peak Energy, Inc. * | 8,700 | 104,139 | ||||||
Cobalt International Energy, Inc. * | 46,700 | 546,857 | ||||||
Comstock Resources, Inc. | 6,400 | 75,776 | ||||||
Concho Resources, Inc. * | 19,631 | 2,140,368 | ||||||
ConocoPhillips | 223,431 | 16,120,547 | ||||||
CONSOL Energy, Inc. | 38,000 | 1,398,400 | ||||||
Contango Oil & Gas Co. * | 5,200 | 190,164 | ||||||
Continental Resources, Inc. * | 17,000 | 958,290 | ||||||
Core Laboratories N.V. | 7,500 | 1,046,475 | ||||||
CVR Energy, Inc. (c) | 5,100 | 247,758 | ||||||
Delek US Holdings, Inc. | 10,700 | 362,623 | ||||||
Denbury Resources, Inc. | 57,225 | 709,590 | ||||||
Devon Energy Corp. | 67,460 | 4,047,600 | ||||||
DHT Holdings, Inc. | 26,011 | 173,233 | ||||||
Diamond Offshore Drilling, Inc. (c) | 11,400 | 429,894 | ||||||
Diamondback Energy, Inc. * | 8,621 | 590,021 | ||||||
Dresser-Rand Group, Inc. * | 12,600 | 1,029,420 | ||||||
Dril-Quip, Inc. * | 6,700 | 602,665 | ||||||
Energen Corp. | 11,700 | 792,090 | ||||||
Energy XXI (Bermuda) Ltd. | 15,061 | 115,819 | ||||||
ENGlobal Corp. * | 4,000 | 5,240 | ||||||
Ensco plc, Class A | 41,400 | 1,680,426 | ||||||
EOG Resources, Inc. | 99,348 | 9,443,027 | ||||||
EP Energy Corp., Class A * | 19,147 | 279,546 | ||||||
EQT Corp. | 25,900 | 2,435,636 | ||||||
Era Group, Inc. * | 2,850 | 66,661 | ||||||
EXCO Resources, Inc. (c) | 51,400 | 156,770 | ||||||
Exterran Holdings, Inc. | 10,720 | 421,618 | ||||||
Exxon Mobil Corp. | 761,999 | 73,692,923 | ||||||
FMC Technologies, Inc. * | 41,664 | 2,334,851 | ||||||
Forest Oil Corp. * | 12,450 | 10,085 | ||||||
Forum Energy Technologies, Inc. * | 11,200 | 305,760 | ||||||
Frank’s International N.V. | 14,000 | 241,220 | ||||||
Geospace Technologies Corp. * | 1,800 | 55,422 | ||||||
Goodrich Petroleum Corp. *(c) | 9,800 | 80,752 | ||||||
Green Plains, Inc. | 9,300 | 318,060 | ||||||
Gulf Island Fabrication, Inc. | 4,100 | 86,674 | ||||||
Gulfmark Offshore, Inc., Class A | 4,100 | 123,656 | ||||||
Gulfport Energy Corp. * | 15,603 | 782,959 | ||||||
Halcon Resources Corp. *(c) | 75,700 | 235,427 | ||||||
Halliburton Co. | 155,844 | 8,593,238 | ||||||
Harvest Natural Resources, Inc. * | 9,300 | 34,596 | ||||||
Helix Energy Solutions Group, Inc. * | 14,064 | 374,665 | ||||||
Helmerich & Payne, Inc. | 19,017 | 1,651,056 | ||||||
Hercules Offshore, Inc. *(c) | 22,900 | 37,785 | ||||||
Hess Corp. | 47,300 | 4,011,513 | ||||||
HollyFrontier Corp. | 32,854 | 1,490,915 | ||||||
Hornbeck Offshore Services, Inc. * | 5,000 | 153,300 | ||||||
Houston American Energy Corp. * | 4,000 | 1,040 | ||||||
ION Geophysical Corp. * | 13,900 | 38,920 | ||||||
Key Energy Services, Inc. * | 22,300 | 67,792 | ||||||
Kinder Morgan, Inc. | 120,878 | 4,677,979 | ||||||
Kodiak Oil & Gas Corp. * | 43,900 | 473,681 | ||||||
Kosmos Energy Ltd. * | 31,100 | 290,163 | ||||||
Laredo Petroleum, Inc. * | 22,700 | 430,392 | ||||||
Magnum Hunter Resources Corp. * | 22,939 | 106,437 | ||||||
Marathon Oil Corp. | 119,914 | 4,244,956 | ||||||
Marathon Petroleum Corp. | 50,204 | 4,563,544 | ||||||
Matador Resources Co. * | 12,100 | 293,667 | ||||||
Matrix Service Co. * | 8,000 | 200,480 | ||||||
McDermott International, Inc. * | 39,100 | 150,144 | ||||||
Midstates Petroleum Co., Inc. *(c) | 14,400 | 42,768 | ||||||
Murphy Oil Corp. | 29,000 | 1,548,310 | ||||||
Nabors Industries Ltd. | 47,134 | 841,342 | ||||||
National Oilwell Varco, Inc. | 78,622 | 5,711,102 | ||||||
Natural Gas Services Group, Inc. * | 7,500 | 192,975 | ||||||
Newfield Exploration Co. * | 23,600 | 769,596 | ||||||
Newpark Resources, Inc. * | 11,500 | 131,445 | ||||||
Noble Corp., plc | 46,155 | 965,563 | ||||||
Noble Energy, Inc. | 67,636 | 3,897,863 | ||||||
Northern Oil & Gas, Inc. * | 8,200 | 92,660 | ||||||
Oasis Petroleum, Inc. * | 24,200 | 725,032 | ||||||
Occidental Petroleum Corp. | 139,253 | 12,383,769 | ||||||
Oceaneering International, Inc. | 23,100 | 1,623,237 | ||||||
Oil States International, Inc. * | 8,600 | 513,764 |
46 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
ONEOK, Inc. | 36,629 | 2,158,913 | ||||||
Pacific Ethanol, Inc. * | 10,200 | 143,922 | ||||||
Panhandle Oil & Gas, Inc., Class A | 6,200 | 127,472 | ||||||
Paragon Offshore plc *(c) | 15,385 | 74,925 | ||||||
Parker Drilling Co. * | 18,300 | 81,252 | ||||||
Patterson-UTI Energy, Inc. | 28,500 | 656,355 | ||||||
PBF Energy, Inc., Class A | 13,813 | 360,105 | ||||||
PDC Energy, Inc. * | 5,800 | 253,576 | ||||||
Peabody Energy Corp. | 46,800 | 488,124 | ||||||
Penn Virginia Corp. * | 12,200 | 104,554 | ||||||
PetroQuest Energy, Inc. * | 13,200 | 62,040 | ||||||
PHI, Inc. - Non Voting Shares * | 4,000 | 178,960 | ||||||
Phillips 66 | 98,865 | 7,760,902 | ||||||
Pioneer Energy Services Corp. * | 13,100 | 120,258 | ||||||
Pioneer Natural Resources Co. | 25,033 | 4,732,739 | ||||||
QEP Resources, Inc. | 30,600 | 767,142 | ||||||
Quicksilver Resources, Inc. * | 36,100 | 19,732 | ||||||
Range Resources Corp. | 30,805 | 2,107,062 | ||||||
Resolute Energy Corp. * | 11,900 | 41,412 | ||||||
REX American Resources Corp. * | 4,875 | 354,705 | ||||||
Rex Energy Corp. * | 8,000 | 62,720 | ||||||
Rice Energy, Inc. * | 12,036 | 318,111 | ||||||
RigNet, Inc. * | 4,141 | 179,926 | ||||||
Rosetta Resources, Inc. * | 9,700 | 368,891 | ||||||
Rowan Cos. plc, Class A | 20,500 | 497,535 | ||||||
RPC, Inc. | 16,118 | 264,335 | ||||||
Sanchez Energy Corp. * | 8,700 | 148,509 | ||||||
SandRidge Energy, Inc. *(c) | 72,792 | 283,889 | ||||||
Schlumberger Ltd. | 232,003 | 22,889,416 | ||||||
SEACOR Holdings, Inc. * | 4,850 | 399,882 | ||||||
SemGroup Corp., Class A | 7,000 | 537,250 | ||||||
Seventy Seven Energy, Inc. * | 6,366 | 83,204 | ||||||
SM Energy Co. | 11,200 | 630,560 | ||||||
Solazyme, Inc. *(c) | 12,100 | 92,807 | ||||||
Southwestern Energy Co. * | 61,375 | 1,995,301 | ||||||
Spectra Energy Corp. | 118,578 | 4,639,957 | ||||||
Stone Energy Corp. * | 7,383 | 180,883 | ||||||
Superior Energy Services, Inc. | 26,099 | 656,390 | ||||||
Swift Energy Co. *(c) | 5,500 | 37,675 | ||||||
Synergy Resources Corp. * | 11,100 | 135,309 | ||||||
Targa Resources Corp. | 4,800 | 617,424 | ||||||
Teekay Corp. | 8,600 | 502,756 | ||||||
Tesco Corp. | 7,000 | 133,280 | ||||||
Tesoro Corp. | 21,900 | 1,563,879 | ||||||
TETRA Technologies, Inc. * | 12,100 | 115,313 | ||||||
The Williams Cos., Inc. | 118,300 | 6,566,833 | ||||||
Tidewater, Inc. | 7,700 | 283,899 | ||||||
Transocean Ltd. (c) | 59,100 | 1,762,953 | ||||||
Ultra Petroleum Corp. *(c) | 25,300 | 576,840 | ||||||
Unit Corp. * | 7,400 | 358,308 | ||||||
VAALCO Energy, Inc. * | 12,600 | 93,492 | ||||||
Valero Energy Corp. | 93,880 | 4,702,449 | ||||||
W&T Offshore, Inc. | 7,500 | 68,175 | ||||||
Warren Resources, Inc. * | 22,100 | 76,466 | ||||||
Weatherford International plc * | 134,749 | 2,212,579 | ||||||
Western Refining, Inc. | 12,253 | 558,614 | ||||||
Westmoreland Coal Co. * | 9,600 | 351,072 | ||||||
Whiting Petroleum Corp. * | 24,400 | 1,494,256 | ||||||
World Fuel Services Corp. | 11,900 | 490,756 | ||||||
WPX Energy, Inc. * | 33,353 | 637,709 | ||||||
338,582,916 | ||||||||
Food & Staples Retailing 1.9% | ||||||||
Casey’s General Stores, Inc. | 7,100 | 581,277 | ||||||
Costco Wholesale Corp. | 77,085 | 10,280,827 | ||||||
CVS Health Corp. | 205,937 | 17,671,454 | ||||||
Ingles Markets, Inc., Class A | 10,200 | 274,380 | ||||||
PriceSmart, Inc. | 2,300 | 204,769 | ||||||
Rite Aid Corp. * | 161,380 | 847,245 | ||||||
Safeway, Inc. | 40,800 | 1,422,288 | ||||||
SpartanNash, Co. | 12,540 | 281,021 | ||||||
Sprouts Farmers Market, Inc. * | 17,474 | 508,668 | ||||||
SUPERVALU, Inc. * | 39,532 | 341,161 | ||||||
Sysco Corp. | 100,236 | 3,863,096 | ||||||
The Andersons, Inc. | 3,600 | 229,428 | ||||||
The Fresh Market, Inc. * | 5,800 | 212,918 | ||||||
The Kroger Co. | 89,366 | 4,978,580 | ||||||
The Pantry, Inc. * | 6,000 | 154,620 | ||||||
United Natural Foods, Inc. * | 8,800 | 598,576 | ||||||
Wal-Mart Stores, Inc. | 282,889 | 21,575,944 | ||||||
Walgreen Co. | 158,208 | 10,160,118 | ||||||
Weis Markets, Inc. | 2,400 | 107,136 | ||||||
Whole Foods Market, Inc. | 64,577 | 2,539,813 | ||||||
76,833,319 | ||||||||
Food, Beverage & Tobacco 4.5% | ||||||||
Alico, Inc. | 2,000 | 73,800 | ||||||
Alliance One International, Inc. * | 24,600 | 49,938 | ||||||
Altria Group, Inc. | 356,923 | 17,253,658 | ||||||
Archer-Daniels-Midland Co. | 118,258 | 5,558,126 | ||||||
B&G Foods, Inc. | 7,400 | 218,004 | ||||||
Boulder Brands, Inc. * | 9,100 | 80,808 | ||||||
Brown-Forman Corp., Class B | 28,516 | 2,642,578 | ||||||
Bunge Ltd. | 26,700 | 2,366,955 | ||||||
Cal-Maine Foods, Inc. | 2,600 | 228,254 | ||||||
Calavo Growers, Inc. | 4,846 | 235,225 | ||||||
Campbell Soup Co. | 29,100 | 1,285,347 | ||||||
Chiquita Brands International, Inc. * | 13,900 | 200,577 | ||||||
Coca-Cola Bottling Co. Consolidated | 3,248 | 293,749 | ||||||
Coca-Cola Enterprises, Inc. | 41,600 | 1,803,360 | ||||||
ConAgra Foods, Inc. | 74,293 | 2,551,965 | ||||||
Constellation Brands, Inc., Class A * | 29,469 | 2,697,592 | ||||||
Darling Ingredients, Inc. * | 25,900 | 455,840 | ||||||
Dean Foods Co. | 13,556 | 199,409 | ||||||
Diamond Foods, Inc. * | 5,200 | 156,780 | ||||||
Dr Pepper Snapple Group, Inc. | 34,000 | 2,354,500 | ||||||
Farmer Bros. Co. * | 4,500 | 131,220 | ||||||
Flowers Foods, Inc. | 44,605 | 847,495 | ||||||
Fresh Del Monte Produce, Inc. | 7,900 | 253,669 | ||||||
General Mills, Inc. | 107,738 | 5,598,066 | ||||||
Hormel Foods Corp. | 21,400 | 1,153,674 | ||||||
Ingredion, Inc. | 11,800 | 911,550 | ||||||
J&J Snack Foods Corp. | 2,093 | 215,642 | ||||||
John B. Sanfilippo & Son, Inc. | 5,000 | 185,750 | ||||||
Kellogg Co. | 44,300 | 2,833,428 | ||||||
Keurig Green Mountain, Inc. | 21,650 | 3,285,388 | ||||||
Kraft Foods Group, Inc. | 107,704 | 6,069,120 | ||||||
Lancaster Colony Corp. | 3,400 | 311,066 | ||||||
Limoneira Co. | 2,900 | 74,414 |
See financial notes 47
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Lorillard, Inc. | 63,444 | 3,901,806 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 21,400 | 1,513,408 | ||||||
Mead Johnson Nutrition Co. | 34,800 | 3,455,988 | ||||||
Molson Coors Brewing Co., Class B | 27,700 | 2,060,326 | ||||||
Mondelez International, Inc., Class A | 299,024 | 10,543,586 | ||||||
Monster Beverage Corp. * | 26,089 | 2,631,858 | ||||||
National Beverage Corp. * | 6,400 | 160,768 | ||||||
PepsiCo, Inc. | 270,258 | 25,990,712 | ||||||
Philip Morris International, Inc. | 280,509 | 24,968,106 | ||||||
Pilgrim’s Pride Corp. * | 12,466 | 354,159 | ||||||
Pinnacle Foods, Inc. | 14,800 | 500,240 | ||||||
Post Holdings, Inc. * | 7,250 | 271,875 | ||||||
Primo Water Corp. * | 1,000 | 4,230 | ||||||
Reynolds American, Inc. | 53,628 | 3,373,737 | ||||||
Rocky Mountain Chocolate Factory, Inc. | 3,427 | 41,432 | ||||||
Sanderson Farms, Inc. | 2,850 | 239,343 | ||||||
Seaboard Corp. * | 100 | 307,287 | ||||||
Snyder’s-Lance, Inc. | 8,900 | 265,131 | ||||||
The Boston Beer Co., Inc., Class A * | 1,200 | 298,800 | ||||||
The Coca-Cola Co. | 705,514 | 29,546,926 | ||||||
The Hain Celestial Group, Inc. * | 9,706 | 1,050,675 | ||||||
The Hershey Co. | 25,800 | 2,474,478 | ||||||
The JM Smucker Co. | 18,493 | 1,923,272 | ||||||
The WhiteWave Foods Co. * | 31,825 | 1,184,845 | ||||||
Tootsie Roll Industries, Inc. (c) | 7,591 | 225,073 | ||||||
TreeHouse Foods, Inc. * | 6,022 | 512,894 | ||||||
Tyson Foods, Inc., Class A | 52,184 | 2,105,624 | ||||||
Universal Corp. | 4,800 | 213,600 | ||||||
Vector Group Ltd. | 15,114 | 337,647 | ||||||
183,034,773 | ||||||||
Health Care Equipment & Services 4.7% | ||||||||
Abaxis, Inc. | 5,600 | 294,896 | ||||||
Abbott Laboratories | 271,343 | 11,827,841 | ||||||
ABIOMED, Inc. * | 7,800 | 255,762 | ||||||
Acadia Healthcare Co., Inc. * | 7,000 | 434,350 | ||||||
Accuray, Inc. * | 21,200 | 134,196 | ||||||
Aetna, Inc. | 62,885 | 5,188,641 | ||||||
Air Methods Corp. * | 4,500 | 212,535 | ||||||
Alere, Inc. * | 12,441 | 497,267 | ||||||
Align Technology, Inc. * | 11,700 | 615,654 | ||||||
Alliance HealthCare Services, Inc. * | 360 | 8,687 | ||||||
Allscripts Healthcare Solutions, Inc. * | 31,560 | 433,003 | ||||||
Amedisys, Inc. * | 10,834 | 282,767 | ||||||
AmerisourceBergen Corp. | 39,596 | 3,381,894 | ||||||
AMN Healthcare Services, Inc. * | 17,210 | 295,151 | ||||||
Amsurg Corp. * | 7,300 | 394,273 | ||||||
Analogic Corp. | 2,700 | 196,938 | ||||||
Anika Therapeutics, Inc. * | 4,606 | 184,885 | ||||||
Antares Pharma, Inc. *(c) | 28,100 | 58,167 | ||||||
athenahealth, Inc. * | 7,800 | 955,500 | ||||||
Atrion Corp. | 616 | 203,286 | ||||||
Baxter International, Inc. | 99,406 | 6,972,337 | ||||||
Becton, Dickinson & Co. | 33,534 | 4,315,826 | ||||||
Bio-Reference Laboratories, Inc. * | 7,200 | 216,288 | ||||||
BioScrip, Inc. *(c) | 8,372 | 54,083 | ||||||
Boston Scientific Corp. * | 233,167 | 3,096,458 | ||||||
Brookdale Senior Living, Inc. * | 33,925 | 1,143,612 | ||||||
C.R. Bard, Inc. | 13,760 | 2,256,227 | ||||||
Cantel Medical Corp. | 8,034 | 340,642 | ||||||
Capital Senior Living Corp. * | 8,394 | 188,865 | ||||||
Cardinal Health, Inc. | 58,818 | 4,616,037 | ||||||
Cardiovascular Systems, Inc. * | 5,000 | 155,000 | ||||||
CareFusion Corp. * | 34,880 | 2,001,066 | ||||||
Centene Corp. * | 9,000 | 834,030 | ||||||
Cerner Corp. * | 53,400 | 3,382,356 | ||||||
Chemed Corp. | 3,900 | 403,104 | ||||||
Cigna Corp. | 47,251 | 4,704,782 | ||||||
Community Health Systems, Inc. * | 20,196 | 1,110,174 | ||||||
Computer Programs & Systems, Inc. | 3,600 | 226,728 | ||||||
CONMED Corp. | 7,300 | 306,527 | ||||||
CorVel Corp. * | 2,700 | 92,934 | ||||||
Covidien plc | 80,440 | 7,435,874 | ||||||
Cross Country Healthcare, Inc. * | 12,500 | 120,875 | ||||||
CryoLife, Inc. | 9,050 | 92,853 | ||||||
Cyberonics, Inc. * | 4,200 | 220,500 | ||||||
DaVita HealthCare Partners, Inc. * | 31,400 | 2,451,398 | ||||||
DENTSPLY International, Inc. | 24,300 | 1,233,711 | ||||||
DexCom, Inc. * | 11,800 | 530,410 | ||||||
Edwards Lifesciences Corp. * | 18,100 | 2,188,652 | ||||||
Endologix, Inc. * | 13,700 | 156,180 | ||||||
Envision Healthcare Holdings Inc * | 25,600 | 894,720 | ||||||
ExamWorks Group, Inc. * | 6,200 | 240,436 | ||||||
Express Scripts Holding Co. * | 133,652 | 10,267,147 | ||||||
Five Star Quality Care, Inc. * | 14,335 | 59,204 | ||||||
Gentiva Health Services, Inc. * | 9,150 | 180,255 | ||||||
Globus Medical, Inc., Class A * | 13,900 | 308,163 | ||||||
Greatbatch, Inc. * | 6,700 | 336,273 | ||||||
Haemonetics Corp. * | 7,400 | 279,128 | ||||||
Hanger, Inc. * | 5,400 | 129,222 | ||||||
HCA Holdings, Inc. * | 55,600 | 3,894,780 | ||||||
Health Net, Inc. * | 15,500 | 736,405 | ||||||
HealthSouth Corp. | 13,500 | 544,455 | ||||||
HealthStream, Inc. * | 6,800 | 210,528 | ||||||
Healthways, Inc. * | 8,100 | 125,550 | ||||||
HeartWare International, Inc. * | 2,100 | 161,952 | ||||||
Henry Schein, Inc. * | 14,500 | 1,740,435 | ||||||
Hill-Rom Holdings, Inc. | 10,200 | 453,696 | ||||||
HMS Holdings Corp. * | 12,200 | 283,406 | ||||||
Hologic, Inc. * | 49,612 | 1,299,338 | ||||||
Humana, Inc. | 27,000 | 3,748,950 | ||||||
ICU Medical, Inc. * | 3,350 | 237,515 | ||||||
IDEXX Laboratories, Inc. * | 8,600 | 1,218,362 | ||||||
IMS Health Holdings, Inc. * | 11,500 | 278,875 | ||||||
Insulet Corp. * | 9,800 | 423,066 | ||||||
Integra LifeSciences Holdings Corp. * | 5,300 | 270,883 | ||||||
Intuitive Surgical, Inc. * | 6,550 | 3,247,490 | ||||||
Invacare Corp. | 6,000 | 94,260 | ||||||
IPC The Hospitalist Co., Inc. * | 4,000 | 166,640 | ||||||
Kindred Healthcare, Inc. | 9,208 | 200,274 | ||||||
Laboratory Corp. of America Holdings * | 14,700 | 1,606,563 | ||||||
Landauer, Inc. | 2,100 | 75,159 | ||||||
LeMaitre Vascular, Inc. | 6,800 | 49,776 |
48 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
LifePoint Hospitals, Inc. * | 6,707 | 469,490 | ||||||
Magellan Health, Inc. * | 3,907 | 236,452 | ||||||
Masimo Corp. * | 8,500 | 214,540 | ||||||
McKesson Corp. | 41,952 | 8,533,456 | ||||||
MedAssets, Inc. * | 10,200 | 220,932 | ||||||
Medidata Solutions, Inc. * | 9,100 | 410,501 | ||||||
MEDNAX, Inc. * | 16,600 | 1,036,338 | ||||||
Medtronic, Inc. | 177,202 | 12,078,088 | ||||||
Meridian Bioscience, Inc. | 10,050 | 186,327 | ||||||
Merit Medical Systems, Inc. * | 10,277 | 155,696 | ||||||
Molina Healthcare, Inc. * | 6,550 | 318,592 | ||||||
MWI Veterinary Supply, Inc. * | 1,700 | 288,413 | ||||||
National Healthcare Corp. | 4,100 | 247,271 | ||||||
Natus Medical, Inc. * | 7,600 | 258,400 | ||||||
Neogen Corp. * | 4,657 | 204,442 | ||||||
NuVasive, Inc. * | 10,000 | 409,000 | ||||||
NxStage Medical, Inc. * | 18,700 | 283,492 | ||||||
Omnicare, Inc. | 16,100 | 1,072,099 | ||||||
Omnicell, Inc. * | 7,400 | 239,094 | ||||||
OraSure Technologies, Inc. * | 12,200 | 109,190 | ||||||
Orthofix International N.V. * | 2,800 | 82,180 | ||||||
Owens & Minor, Inc. | 9,100 | 303,212 | ||||||
Patterson Cos., Inc. | 13,100 | 564,741 | ||||||
PDI, Inc. * | 2,900 | 5,278 | ||||||
PharMerica Corp. * | 4,813 | 138,085 | ||||||
Premier, Inc., Class A * | 5,000 | 166,900 | ||||||
Quality Systems, Inc. | 10,500 | 158,655 | ||||||
Quest Diagnostics, Inc. | 25,720 | 1,632,191 | ||||||
Quidel Corp. * | 5,200 | 148,460 | ||||||
ResMed, Inc. (c) | 24,200 | 1,263,724 | ||||||
RTI Surgical, Inc. * | 18,100 | 92,129 | ||||||
Select Medical Holdings Corp. | 22,600 | 325,892 | ||||||
Sirona Dental Systems, Inc. * | 9,200 | 722,660 | ||||||
St. Jude Medical, Inc. | 54,300 | 3,484,431 | ||||||
STERIS Corp. | 8,200 | 506,760 | ||||||
Stryker Corp. | 52,600 | 4,604,078 | ||||||
SurModics, Inc. * | 4,200 | 90,930 | ||||||
Symmetry Medical, Inc. * | 8,200 | 81,180 | ||||||
Team Health Holdings, Inc. * | 10,500 | 656,670 | ||||||
Teleflex, Inc. | 6,600 | 753,192 | ||||||
Tenet Healthcare Corp. * | 18,812 | 1,054,413 | ||||||
The Cooper Cos., Inc. | 9,081 | 1,488,376 | ||||||
The Ensign Group, Inc. | 5,300 | 205,216 | ||||||
The Providence Service Corp. * | 4,800 | 212,064 | ||||||
The Spectranetics Corp. * | 6,700 | 212,859 | ||||||
Thoratec Corp. * | 8,636 | 234,726 | ||||||
Tornier N.V. * | 6,100 | 170,495 | ||||||
Triple-S Management Corp., Class B * | 5,300 | 117,342 | ||||||
U.S. Physical Therapy, Inc. | 3,500 | 151,025 | ||||||
Unilife Corp. *(c) | 29,100 | 106,797 | ||||||
UnitedHealth Group, Inc. | 172,781 | 16,415,923 | ||||||
Universal American Corp. * | 20,600 | 191,992 | ||||||
Universal Health Services, Inc., Class B | 16,000 | 1,659,360 | ||||||
Utah Medical Products, Inc. | 2,500 | 142,000 | ||||||
Varian Medical Systems, Inc. * | 17,100 | 1,438,452 | ||||||
VCA, Inc. * | 16,800 | 765,576 | ||||||
Veeva Systems, Inc., Class A * | 6,100 | 181,658 | ||||||
Vocera Communications, Inc. * | 3,700 | 38,295 | ||||||
Volcano Corp. * | 12,200 | 123,464 | ||||||
WellCare Health Plans, Inc. * | 8,200 | 556,534 | ||||||
WellPoint, Inc. | 48,323 | 6,122,041 | ||||||
West Pharmaceutical Services, Inc. | 11,300 | 579,125 | ||||||
Wright Medical Group, Inc. * | 8,600 | 271,932 | ||||||
Zeltiq Aesthetics, Inc. * | 9,601 | 246,170 | ||||||
Zimmer Holdings, Inc. | 29,700 | 3,303,828 | ||||||
189,208,952 | ||||||||
Household & Personal Products 1.8% | ||||||||
Avon Products, Inc. | 70,000 | 728,000 | ||||||
Central Garden & Pet Co., Class A * | 8,600 | 73,874 | ||||||
Church & Dwight Co., Inc. | 22,400 | 1,621,984 | ||||||
Colgate-Palmolive Co. | 155,509 | 10,400,442 | ||||||
Coty, Inc., Class A | 15,600 | 258,960 | ||||||
Elizabeth Arden, Inc. * | 3,500 | 57,400 | ||||||
Energizer Holdings, Inc. | 10,933 | 1,340,932 | ||||||
Harbinger Group, Inc. * | 19,100 | 250,974 | ||||||
Herbalife Ltd. (c) | 15,600 | 818,376 | ||||||
Inter Parfums, Inc. | 5,613 | 159,409 | ||||||
Kimberly-Clark Corp. | 65,739 | 7,511,996 | ||||||
Medifast, Inc. * | 3,500 | 111,090 | ||||||
Nu Skin Enterprises, Inc., Class A (c) | 9,600 | 507,168 | ||||||
Nutraceutical International Corp. * | 5,000 | 112,400 | ||||||
Oil-Dri Corp. of America | 1,600 | 48,288 | ||||||
Orchids Paper Products Co. | 2,500 | 71,900 | ||||||
Revlon, Inc., Class A * | 5,400 | 185,220 | ||||||
Spectrum Brands Holdings, Inc. | 3,500 | 317,065 | ||||||
The Clorox Co. | 22,300 | 2,218,850 | ||||||
The Estee Lauder Cos., Inc., Class A | 43,100 | 3,240,258 | ||||||
The Female Health Co. (c) | 7,500 | 34,275 | ||||||
The Procter & Gamble Co. | 482,524 | 42,109,870 | ||||||
USANA Health Sciences, Inc. * | 2,682 | 305,694 | ||||||
WD-40 Co. | 1,600 | 122,672 | ||||||
72,607,097 | ||||||||
Insurance 3.0% | ||||||||
ACE Ltd. | 61,428 | 6,714,080 | ||||||
Aflac, Inc. | 82,700 | 4,939,671 | ||||||
Alleghany Corp. * | 2,740 | 1,217,327 | ||||||
Allied World Assurance Co. Holdings AG | 14,700 | 558,600 | ||||||
Ambac Financial Group, Inc. * | 4,000 | 91,520 | ||||||
American Equity Investment Life Holding Co. | 12,600 | 325,206 | ||||||
American Financial Group, Inc. | 18,750 | 1,121,812 | ||||||
American International Group, Inc. | 256,715 | 13,752,223 | ||||||
American National Insurance Co. | 2,300 | 262,384 | ||||||
AMERISAFE, Inc. | 4,000 | 166,800 | ||||||
AmTrust Financial Services, Inc. (c) | 7,314 | 328,179 | ||||||
Aon plc | 53,796 | 4,626,456 | ||||||
Arch Capital Group Ltd. * | 23,800 | 1,340,416 | ||||||
Argo Group International Holdings Ltd. | 5,011 | 279,614 | ||||||
Arthur J. Gallagher & Co. | 27,200 | 1,297,440 | ||||||
Aspen Insurance Holdings Ltd. | 10,400 | 453,752 | ||||||
Assurant, Inc. | 11,500 | 784,530 | ||||||
Assured Guaranty Ltd. | 31,900 | 736,252 | ||||||
Axis Capital Holdings Ltd. | 17,600 | 847,264 |
See financial notes 49
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Baldwin & Lyons, Inc., Class B | 1,950 | 52,494 | ||||||
Brown & Brown, Inc. | 19,300 | 614,898 | ||||||
Cincinnati Financial Corp. | 24,350 | 1,228,944 | ||||||
Citizens, Inc. * | 16,000 | 116,640 | ||||||
CNA Financial Corp. | 6,900 | 269,652 | ||||||
CNO Financial Group, Inc. | 39,000 | 707,070 | ||||||
Crawford & Co., Class B | 5,800 | 59,044 | ||||||
EMC Insurance Group, Inc. | 1,200 | 38,448 | ||||||
Employers Holdings, Inc. | 7,500 | 152,925 | ||||||
Endurance Specialty Holdings Ltd. | 6,200 | 359,290 | ||||||
Enstar Group Ltd. * | 1,300 | 192,491 | ||||||
Erie Indemnity Co., Class A | 3,600 | 305,532 | ||||||
Everest Re Group Ltd. | 7,700 | 1,314,005 | ||||||
FBL Financial Group, Inc., Class A | 5,190 | 257,320 | ||||||
Federated National Holding Co. | 1,500 | 50,190 | ||||||
First American Financial Corp. | 16,800 | 509,376 | ||||||
FNF Group | 49,439 | 1,475,260 | ||||||
Genworth Financial, Inc., Class A * | 86,800 | 1,214,332 | ||||||
Greenlight Capital Re Ltd., Class A * | 7,400 | 240,130 | ||||||
HCC Insurance Holdings, Inc. | 16,550 | 863,745 | ||||||
Hilltop Holdings, Inc. * | 12,926 | 284,760 | ||||||
Horace Mann Educators Corp. | 8,300 | 252,403 | ||||||
Independence Holding Co. | 2,970 | 42,026 | ||||||
Infinity Property & Casualty Corp. | 2,500 | 182,525 | ||||||
Kemper Corp. | 7,700 | 283,745 | ||||||
Lincoln National Corp. | 45,426 | 2,487,528 | ||||||
Loews Corp. | 54,174 | 2,361,986 | ||||||
Maiden Holdings Ltd. | 18,900 | 225,855 | ||||||
Markel Corp. * | 2,503 | 1,729,298 | ||||||
Marsh & McLennan Cos., Inc. | 96,600 | 5,252,142 | ||||||
MBIA, Inc. * | 25,250 | 246,440 | ||||||
Mercury General Corp. | 5,400 | 286,848 | ||||||
MetLife, Inc. | 203,603 | 11,043,427 | ||||||
Montpelier Re Holdings Ltd. | 8,100 | 268,434 | ||||||
National General Holdings Corp. | 10,400 | 195,000 | ||||||
National Western Life Insurance Co., Class A | 500 | 135,500 | ||||||
Old Republic International Corp. | 43,822 | 647,251 | ||||||
OneBeacon Insurance Group Ltd., Class A | 14,800 | 235,764 | ||||||
PartnerRe Ltd. | 8,900 | 1,029,641 | ||||||
Platinum Underwriters Holdings Ltd. | 4,500 | 281,835 | ||||||
Primerica, Inc. | 10,700 | 547,305 | ||||||
Principal Financial Group, Inc. | 48,641 | 2,547,329 | ||||||
ProAssurance Corp. | 8,540 | 399,501 | ||||||
Protective Life Corp. | 13,200 | 919,776 | ||||||
Prudential Financial, Inc. | 84,272 | 7,461,443 | ||||||
Reinsurance Group of America, Inc. | 12,900 | 1,086,825 | ||||||
RenaissanceRe Holdings Ltd. | 7,200 | 743,976 | ||||||
RLI Corp. | 5,600 | 277,704 | ||||||
Safety Insurance Group, Inc. | 3,400 | 212,092 | ||||||
Selective Insurance Group, Inc. | 7,800 | 201,396 | ||||||
StanCorp Financial Group, Inc. | 6,300 | 438,228 | ||||||
State Auto Financial Corp. | 5,500 | 115,115 | ||||||
Stewart Information Services Corp. | 3,600 | 127,152 | ||||||
Symetra Financial Corp. | 19,000 | 450,300 | ||||||
The Allstate Corp. | 77,867 | 5,049,675 | ||||||
The Chubb Corp. | 43,194 | 4,291,756 | ||||||
The Hanover Insurance Group, Inc. | 6,900 | 461,886 | ||||||
The Hartford Financial Services Group, Inc. | 78,262 | 3,097,610 | ||||||
The Navigators Group, Inc. * | 4,200 | 285,978 | ||||||
The Phoenix Cos., Inc. * | 475 | 28,196 | ||||||
The Progressive Corp. | 99,564 | 2,629,485 | ||||||
The Travelers Cos., Inc. | 62,752 | 6,325,402 | ||||||
Torchmark Corp. | 22,200 | 1,175,712 | ||||||
United Fire Group, Inc. | 5,000 | 162,400 | ||||||
Unum Group | 43,114 | 1,442,594 | ||||||
Validus Holdings Ltd. | 16,857 | 670,571 | ||||||
W. R. Berkley Corp. | 18,050 | 930,297 | ||||||
White Mountains Insurance Group Ltd. | 900 | 562,428 | ||||||
Willis Group Holdings plc | 39,800 | 1,613,094 | ||||||
XL Group plc | 46,000 | 1,558,480 | ||||||
123,151,426 | ||||||||
Materials 3.6% | ||||||||
A. Schulman, Inc. | 5,300 | 187,673 | ||||||
A.M. Castle & Co. * | 5,800 | 42,630 | ||||||
Advanced Emissions Solutions, Inc. * | 8,280 | 167,422 | ||||||
AEP Industries, Inc. * | 1,900 | 87,381 | ||||||
Air Products & Chemicals, Inc. | 36,200 | 4,874,692 | ||||||
Airgas, Inc. | 11,000 | 1,226,940 | ||||||
AK Steel Holding Corp. * | 32,127 | 243,201 | ||||||
Albemarle Corp. | 13,300 | 776,454 | ||||||
Alcoa, Inc. | 200,696 | 3,363,665 | ||||||
Allegheny Technologies, Inc. | 20,092 | 660,022 | ||||||
Allied Nevada Gold Corp. *(c) | 29,700 | 41,283 | ||||||
American Vanguard Corp. | 3,000 | 34,620 | ||||||
Ampco-Pittsburgh Corp. | 4,500 | 98,055 | ||||||
AptarGroup, Inc. | 10,900 | 678,416 | ||||||
Ashland, Inc. | 11,923 | 1,288,519 | ||||||
Avery Dennison Corp. | 16,000 | 749,600 | ||||||
Axiall Corp. | 10,400 | 419,120 | ||||||
Balchem Corp. | 4,200 | 271,740 | ||||||
Ball Corp. | 23,900 | 1,539,877 | ||||||
Bemis Co., Inc. | 16,700 | 642,449 | ||||||
Berry Plastics Group, Inc. * | 18,100 | 470,962 | ||||||
Boise Cascade Co. * | 5,500 | 198,330 | ||||||
Cabot Corp. | 10,900 | 506,087 | ||||||
Calgon Carbon Corp. * | 12,500 | 262,875 | ||||||
Carpenter Technology Corp. | 8,300 | 415,415 | ||||||
Celanese Corp., Series A | 26,500 | 1,556,345 | ||||||
Century Aluminum Co. * | 11,600 | 339,648 | ||||||
CF Industries Holdings, Inc. | 9,500 | 2,470,000 | ||||||
Chase Corp. | 200 | 7,174 | ||||||
Chemtura Corp. * | 14,000 | 326,060 | ||||||
Clearwater Paper Corp. * | 5,472 | 352,123 | ||||||
Cliffs Natural Resources, Inc. (c) | 21,100 | 236,953 | ||||||
Codexis, Inc. * | 1,870 | 4,787 | ||||||
Coeur Mining, Inc. * | 22,400 | 82,880 | ||||||
Commercial Metals Co. | 22,800 | 394,212 | ||||||
Compass Minerals International, Inc. | 5,000 | 428,400 | ||||||
Crown Holdings, Inc. * | 28,000 | 1,342,040 | ||||||
Cytec Industries, Inc. | 13,200 | 615,516 | ||||||
Deltic Timber Corp. | 1,500 | 97,635 | ||||||
Domtar Corp. | 10,500 | 431,235 | ||||||
E.I. du Pont de Nemours & Co. | 164,807 | 11,396,404 |
50 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Eagle Materials, Inc. | 11,543 | 1,009,205 | ||||||
Eastman Chemical Co. | 28,980 | 2,341,004 | ||||||
Ecolab, Inc. | 47,604 | 5,294,993 | ||||||
Ferro Corp. * | 21,000 | 275,520 | ||||||
Flotek Industries, Inc. * | 13,300 | 294,728 | ||||||
FMC Corp. | 23,300 | 1,336,255 | ||||||
Freeport-McMoRan, Inc. | 191,918 | 5,469,663 | ||||||
FutureFuel Corp. | 8,300 | 110,556 | ||||||
General Moly, Inc. * | 15,700 | 10,362 | ||||||
Globe Specialty Metals, Inc. | 15,900 | 299,079 | ||||||
Graphic Packaging Holding Co. * | 52,900 | 641,677 | ||||||
Greif, Inc., Class A | 4,300 | 189,458 | ||||||
H.B. Fuller Co. | 9,000 | 377,730 | ||||||
Hawkins, Inc. | 2,700 | 103,977 | ||||||
Haynes International, Inc. | 2,500 | 116,225 | ||||||
Headwaters, Inc. * | 12,000 | 152,400 | ||||||
Hecla Mining Co. | 72,100 | 157,178 | ||||||
Horsehead Holding Corp. * | 12,800 | 201,088 | ||||||
Huntsman Corp. | 34,000 | 829,600 | ||||||
Innophos Holdings, Inc. | 5,300 | 302,100 | ||||||
Innospec, Inc. | 4,200 | 169,554 | ||||||
International Flavors & Fragrances, Inc. | 13,500 | 1,338,525 | ||||||
International Paper Co. | 76,680 | 3,881,542 | ||||||
Intrepid Potash, Inc. * | 11,800 | 158,710 | ||||||
Kaiser Aluminum Corp. | 3,600 | 250,380 | ||||||
KapStone Paper & Packaging Corp. * | 15,800 | 486,008 | ||||||
KMG Chemicals, Inc. | 1,600 | 28,320 | ||||||
Koppers Holdings, Inc. | 4,800 | 189,504 | ||||||
Kraton Performance Polymers, Inc. * | 3,500 | 62,615 | ||||||
Kronos Worldwide, Inc. | 11,720 | 157,517 | ||||||
Landec Corp. * | 9,100 | 114,569 | ||||||
Louisiana-Pacific Corp. * | 20,200 | 294,920 | ||||||
LSB Industries, Inc. * | 3,000 | 112,590 | ||||||
LyondellBasell Industries N.V., Class A | 76,832 | 7,040,116 | ||||||
Martin Marietta Materials, Inc. | 11,400 | 1,332,888 | ||||||
Materion Corp. | 4,000 | 157,800 | ||||||
McEwen Mining, Inc. * | 31,130 | 38,601 | ||||||
MeadWestvaco Corp. | 29,374 | 1,297,450 | ||||||
Minerals Technologies, Inc. | 6,200 | 475,602 | ||||||
Molycorp, Inc. *(c) | 51,800 | 71,484 | ||||||
Monsanto Co. | 93,226 | 10,724,719 | ||||||
Myers Industries, Inc. | 8,080 | 120,715 | ||||||
Neenah Paper, Inc. | 4,231 | 258,133 | ||||||
NewMarket Corp. | 1,900 | 737,219 | ||||||
Newmont Mining Corp. | 87,974 | 1,650,392 | ||||||
Noranda Aluminum Holding Corp. | 16,500 | 72,765 | ||||||
Nucor Corp. | 54,800 | 2,962,488 | ||||||
Olin Corp. | 15,820 | 383,477 | ||||||
Olympic Steel, Inc. | 1,400 | 28,168 | ||||||
OM Group, Inc. | 7,600 | 197,828 | ||||||
OMNOVA Solutions, Inc. * | 10,400 | 73,112 | ||||||
Owens-Illinois, Inc. * | 33,600 | 865,872 | ||||||
P.H. Glatfelter Co. | 7,000 | 176,610 | ||||||
Packaging Corp. of America | 20,100 | 1,448,808 | ||||||
Penford Corp. * | 6,200 | 116,870 | ||||||
Platform Specialty Products Corp. * | 15,000 | 390,000 | ||||||
PolyOne Corp. | 14,810 | 548,118 | ||||||
PPG Industries, Inc. | 24,300 | 4,949,667 | ||||||
Praxair, Inc. | 51,000 | 6,425,490 | ||||||
Quaker Chemical Corp. | 3,200 | 262,656 | ||||||
Rayonier Advanced Materials, Inc. (c) | 6,960 | 198,569 | ||||||
Reliance Steel & Aluminum Co. | 13,300 | 897,484 | ||||||
Rentech, Inc. * | 37,400 | 59,466 | ||||||
Resolute Forest Products, Inc. * | 14,000 | 259,840 | ||||||
Rock-Tenn Co., Class A | 25,626 | 1,310,770 | ||||||
Rockwood Holdings, Inc. | 12,500 | 961,375 | ||||||
Royal Gold, Inc. | 11,400 | 651,510 | ||||||
RPM International, Inc. | 24,600 | 1,114,380 | ||||||
RTI International Metals, Inc. * | 7,700 | 181,335 | ||||||
Schnitzer Steel Industries, Inc., Class A | 3,450 | 81,248 | ||||||
Schweitzer-Mauduit International, Inc. | 4,600 | 198,076 | ||||||
Sealed Air Corp. | 37,300 | 1,352,125 | ||||||
Sensient Technologies Corp. | 7,400 | 437,932 | ||||||
Sigma-Aldrich Corp. | 21,400 | 2,908,474 | ||||||
Silgan Holdings, Inc. | 6,900 | 339,204 | ||||||
Sonoco Products Co. | 16,800 | 686,616 | ||||||
Steel Dynamics, Inc. | 39,300 | 904,293 | ||||||
Stepan Co. | 4,300 | 190,404 | ||||||
Stillwater Mining Co. * | 24,633 | 323,431 | ||||||
SunCoke Energy, Inc. * | 15,217 | 363,686 | ||||||
Taminco Corp. * | 8,635 | 223,560 | ||||||
The Dow Chemical Co. | 202,551 | 10,006,019 | ||||||
The Mosaic Co. | 59,512 | 2,636,977 | ||||||
The Scotts Miracle-Gro Co., Class A | 7,300 | 432,452 | ||||||
The Sherwin-Williams Co. | 14,901 | 3,420,674 | ||||||
The Valspar Corp. | 13,300 | 1,092,728 | ||||||
TimkenSteel Corp. | 6,550 | 265,799 | ||||||
Tredegar Corp. | 5,100 | 97,002 | ||||||
Tronox Ltd., Class A | 9,800 | 236,964 | ||||||
United States Steel Corp. | 26,300 | 1,053,052 | ||||||
Universal Stainless & Alloy Products, Inc. * | 1,800 | 46,278 | ||||||
US Silica Holdings, Inc. | 10,600 | 475,940 | ||||||
Valhi, Inc. | 13,600 | 80,512 | ||||||
Vulcan Materials Co. | 21,492 | 1,326,271 | ||||||
W.R. Grace & Co. * | 13,600 | 1,286,560 | ||||||
Walter Energy, Inc. (c) | 15,800 | 38,078 | ||||||
Wausau Paper Corp. | 8,700 | 86,043 | ||||||
Westlake Chemical Corp. | 7,500 | 529,125 | ||||||
Worthington Industries, Inc. | 7,200 | 278,280 | ||||||
Zep, Inc. | 6,600 | 105,996 | ||||||
146,031,968 | ||||||||
Media 3.4% | ||||||||
AH Belo Corp., Class A | 13,980 | 160,910 | ||||||
AMC Networks, Inc., Class A * | 10,400 | 630,760 | ||||||
Cablevision Systems Corp., Class A | 33,200 | 618,184 | ||||||
Carmike Cinemas, Inc. * | 6,300 | 201,915 | ||||||
CBS Corp., Class B - Non Voting Shares | 85,190 | 4,619,002 | ||||||
Central European Media Enterprises Ltd., Class A * | 9,900 | 24,057 |
See financial notes 51
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Charter Communications, Inc., Class A * | 14,100 | 2,233,299 | ||||||
Cinemark Holdings, Inc. | 19,600 | 692,272 | ||||||
Clear Channel Outdoor Holdings, Inc., Class A | 20,700 | 150,282 | ||||||
Comcast Corp., Class A | 461,960 | 25,569,486 | ||||||
Crown Media Holdings, Inc., Class A * | 6,000 | 20,940 | ||||||
Cumulus Media, Inc., Class A * | 25,351 | 97,855 | ||||||
DIRECTV * | 90,572 | 7,860,744 | ||||||
Discovery Communications, Inc., Class A * | 26,061 | 921,256 | ||||||
Discovery Communications, Inc., Class C * | 48,061 | 1,681,654 | ||||||
DISH Network Corp., Class A * | 39,400 | 2,507,810 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 10,200 | 227,256 | ||||||
Entercom Communications Corp., Class A * | 11,000 | 113,080 | ||||||
Gannett Co., Inc. | 39,000 | 1,228,500 | ||||||
Harte-Hanks, Inc. | 17,200 | 111,972 | ||||||
John Wiley & Sons, Inc., Class A | 9,000 | 525,510 | ||||||
Journal Communications, Inc., Class A * | 16,900 | 165,789 | ||||||
Lamar Advertising Co., Class A | 16,100 | 831,565 | ||||||
Liberty Global plc, Class A * | 60,875 | 2,767,986 | ||||||
Liberty Global plc, Series C * | 72,475 | 3,222,963 | ||||||
Liberty Media Corp., Class A * | 17,495 | 840,110 | ||||||
Liberty Media Corp., Class C * | 34,990 | 1,677,071 | ||||||
Lions Gate Entertainment Corp. | 14,200 | 470,446 | ||||||
Live Nation Entertainment, Inc. * | 26,457 | 687,882 | ||||||
Loral Space & Communications, Inc. * | 2,800 | 214,200 | ||||||
Martha Stewart Living Omnimedia, Inc., Class A * | 26,100 | 113,013 | ||||||
Media General, Inc. * | 6,800 | 101,592 | ||||||
Meredith Corp. | 5,100 | 265,914 | ||||||
Morningstar, Inc. | 5,500 | 375,375 | ||||||
National CineMedia, Inc. | 13,200 | 209,880 | ||||||
News Corp., Class A * | 84,687 | 1,310,955 | ||||||
Nexstar Broadcasting Group, Inc., Class A (c) | 4,500 | 203,040 | ||||||
Omnicom Group, Inc. | 45,800 | 3,291,188 | ||||||
Regal Entertainment Group, Class A | 12,100 | 268,015 | ||||||
Salem Communications Corp., Class A | 5,700 | 43,947 | ||||||
Scholastic Corp. | 7,300 | 254,113 | ||||||
Scripps Networks Interactive, Inc., Class A | 19,200 | 1,483,008 | ||||||
Sinclair Broadcast Group, Inc., Class A (c) | 11,000 | 319,550 | ||||||
Sirius XM Holdings, Inc. *(c) | 485,300 | 1,664,579 | ||||||
Sizmek, Inc. * | 8,300 | 47,559 | ||||||
Starz, Class A * | 16,195 | 500,426 | ||||||
The E.W. Scripps Co., Class A * | 9,800 | 188,160 | ||||||
The Interpublic Group of Cos., Inc. | 73,037 | 1,416,187 | ||||||
The Madison Square Garden Co., Class A * | 10,175 | 770,858 | ||||||
The New York Times Co., Class A | 17,300 | 222,132 | ||||||
The Walt Disney Co. | 281,639 | 25,736,172 | ||||||
Time Warner Cable, Inc. | 50,637 | 7,454,273 | ||||||
Time Warner, Inc. | 153,157 | 12,171,387 | ||||||
Time, Inc. * | 19,122 | 431,966 | ||||||
Twenty-First Century Fox, Inc., Class A | 339,778 | 11,715,545 | ||||||
Viacom, Inc., Class B | 68,922 | 5,009,251 | ||||||
World Wrestling Entertainment, Inc., Class A (c) | 5,700 | 70,395 | ||||||
136,713,236 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.0% | ||||||||
AbbVie, Inc. | 283,230 | 17,973,776 | ||||||
ACADIA Pharmaceuticals, Inc. * | 16,600 | 459,820 | ||||||
Accelerate Diagnostics, Inc. *(c) | 5,300 | 115,116 | ||||||
Achillion Pharmaceuticals, Inc. * | 19,800 | 232,650 | ||||||
Acorda Therapeutics, Inc. * | 8,400 | 292,488 | ||||||
Actavis plc * | 47,020 | 11,413,635 | ||||||
Acura Pharmaceuticals, Inc. *(c) | 20,900 | 12,644 | ||||||
Aegerion Pharmaceuticals, Inc. * | 3,800 | 76,722 | ||||||
Affymetrix, Inc. * | 25,500 | 229,755 | ||||||
Agilent Technologies, Inc. | 62,917 | 3,478,052 | ||||||
Akorn, Inc. * | 15,400 | 686,070 | ||||||
Albany Molecular Research, Inc. * | 8,800 | 204,688 | ||||||
Alexion Pharmaceuticals, Inc. * | 36,402 | 6,965,887 | ||||||
Alkermes plc * | 28,600 | 1,445,730 | ||||||
Allergan, Inc. | 53,317 | 10,133,429 | ||||||
Alnylam Pharmaceuticals, Inc. * | 11,000 | 1,020,140 | ||||||
AMAG Pharmaceuticals, Inc. * | 6,600 | 217,866 | ||||||
Amgen, Inc. | 135,489 | 21,973,606 | ||||||
Amicus Therapeutics, Inc. * | 13,800 | 80,040 | ||||||
Aratana Therapeutics, Inc. * | 10,100 | 113,120 | ||||||
Arena Pharmaceuticals, Inc. *(c) | 32,100 | 139,956 | ||||||
ARIAD Pharmaceuticals, Inc. *(c) | 57,200 | 340,912 | ||||||
ArQule, Inc. * | 21,000 | 24,150 | ||||||
Array BioPharma, Inc. * | 62,184 | 223,240 | ||||||
Arrowhead Research Corp. *(c) | 10,700 | 69,764 | ||||||
Auxilium Pharmaceuticals, Inc. *(c) | 12,500 | 402,125 | ||||||
Avanir Pharmaceuticals, Inc. * | 28,700 | 371,378 | ||||||
AVEO Pharmaceuticals, Inc. * | 15,100 | 14,647 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 3,000 | 338,460 | ||||||
Bio-Techne Corp. | 5,800 | 528,090 | ||||||
BioCryst Pharmaceuticals, Inc. * | 23,900 | 280,108 | ||||||
BioDelivery Sciences International, Inc. * | 14,119 | 245,671 | ||||||
Biogen Idec, Inc. * | 42,212 | 13,553,429 | ||||||
BioMarin Pharmaceutical, Inc. * | 26,000 | 2,145,000 | ||||||
Biota Pharmaceuticals, Inc. * | 26,016 | 63,739 | ||||||
Bristol-Myers Squibb Co. | 295,053 | 17,169,134 | ||||||
Bruker Corp. * | 18,000 | 373,140 | ||||||
Cambrex Corp. * | 7,200 | 151,776 | ||||||
Celgene Corp. * | 145,262 | 15,556,108 | ||||||
Celldex Therapeutics, Inc. * | 25,800 | 432,150 | ||||||
Cepheid * | 11,200 | 593,712 | ||||||
Charles River Laboratories International, Inc. * | 7,416 | 468,394 | ||||||
Clovis Oncology, Inc. * | 8,400 | 501,144 | ||||||
Covance, Inc. * | 11,800 | 942,820 | ||||||
Cubist Pharmaceuticals, Inc. * | 12,200 | 881,938 | ||||||
Dendreon Corp. *(c) | 72,900 | 71,405 | ||||||
Depomed, Inc. * | 14,500 | 223,300 | ||||||
Durect Corp. * | 14,500 | 10,585 |
52 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Dyax Corp. * | 31,000 | 383,470 | ||||||
Dynavax Technologies Corp. * | 109,500 | 179,580 | ||||||
Eli Lilly & Co. | 175,789 | 11,660,084 | ||||||
Emergent Biosolutions, Inc. * | 10,400 | 235,248 | ||||||
Endo International plc * | 27,000 | 1,806,840 | ||||||
Endocyte, Inc. *(c) | 11,300 | 67,630 | ||||||
Enzo Biochem, Inc. * | 43,981 | 229,581 | ||||||
Enzon Pharmaceuticals, Inc. | 21,300 | 18,957 | ||||||
EPIRUS Biopharmaceuticals, Inc. *(c) | 843 | 4,173 | ||||||
Exact Sciences Corp. *(c) | 16,300 | 392,341 | ||||||
Exelixis, Inc. * | 44,700 | 75,990 | ||||||
Fluidigm Corp. * | 6,000 | 174,000 | ||||||
Genomic Health, Inc. * | 8,400 | 305,256 | ||||||
Geron Corp. *(c) | 46,200 | 103,026 | ||||||
Gilead Sciences, Inc. * | 271,492 | 30,407,104 | ||||||
GTx, Inc. *(c) | 15,900 | 8,872 | ||||||
Halozyme Therapeutics, Inc. * | 28,000 | 269,360 | ||||||
Harvard Apparatus Regenerative Technology, Inc. * | 4,825 | 30,301 | ||||||
Harvard Bioscience, Inc. * | 19,300 | 92,640 | ||||||
Horizon Pharma plc *(c) | 10,700 | 138,458 | ||||||
Hospira, Inc. * | 30,370 | 1,630,869 | ||||||
Illumina, Inc. * | 24,500 | 4,718,210 | ||||||
ImmunoGen, Inc. * | 16,900 | 156,494 | ||||||
Immunomedics, Inc. *(c) | 64,448 | 254,570 | ||||||
Impax Laboratories, Inc. * | 13,800 | 399,786 | ||||||
Incyte Corp. * | 28,200 | 1,891,092 | ||||||
Infinity Pharmaceuticals, Inc. * | 19,600 | 266,952 | ||||||
Inovio Pharmaceuticals, Inc. *(c) | 20,194 | 229,404 | ||||||
Intercept Pharmaceuticals, Inc. * | 1,800 | 465,102 | ||||||
Ironwood Pharmaceuticals, Inc. * | 19,800 | 277,596 | ||||||
Isis Pharmaceuticals, Inc. * | 18,600 | 856,716 | ||||||
Jazz Pharmaceuticals plc * | 11,400 | 1,924,776 | ||||||
Johnson & Johnson | 504,809 | 54,408,314 | ||||||
Keryx Biopharmaceuticals, Inc. * | 24,800 | 417,880 | ||||||
KYTHERA Biopharmaceuticals, Inc. * | 5,319 | 187,495 | ||||||
Lannett Co., Inc. * | 8,800 | 499,136 | ||||||
Lexicon Pharmaceuticals, Inc. * | 127,500 | 184,875 | ||||||
Ligand Pharmaceuticals, Inc. * | 4,948 | 273,476 | ||||||
Luminex Corp. * | 12,900 | 245,100 | ||||||
Mallinckrodt plc * | 19,202 | 1,770,040 | ||||||
MannKind Corp. *(c) | 40,800 | 245,208 | ||||||
Medivation, Inc. * | 13,200 | 1,395,240 | ||||||
Merck & Co., Inc. | 517,716 | 29,996,465 | ||||||
Merrimack Pharmaceuticals, Inc. *(c) | 38,590 | 353,870 | ||||||
Mettler-Toledo International, Inc. * | 5,900 | 1,524,973 | ||||||
MiMedx Group, Inc. *(c) | 26,820 | 273,028 | ||||||
Momenta Pharmaceuticals, Inc. * | 13,500 | 147,285 | ||||||
Mylan, Inc. * | 66,200 | 3,545,010 | ||||||
Myriad Genetics, Inc. *(c) | 11,100 | 438,339 | ||||||
Nektar Therapeutics * | 18,300 | 252,357 | ||||||
Neurocrine Biosciences, Inc. * | 21,600 | 400,032 | ||||||
Novavax, Inc. * | 52,500 | 294,000 | ||||||
NPS Pharmaceuticals, Inc. * | 14,800 | 405,520 | ||||||
Oncothyreon, Inc. * | 25,700 | 46,260 | ||||||
OPKO Health, Inc. *(c) | 33,700 | 281,395 | ||||||
Orexigen Therapeutics, Inc. *(c) | 32,750 | 132,965 | ||||||
Pacira Pharmaceuticals, Inc. * | 6,500 | 603,330 | ||||||
Pain Therapeutics, Inc. * | 18,600 | 32,364 | ||||||
PAREXEL International Corp. * | 9,300 | 505,083 | ||||||
PDL BioPharma, Inc. (c) | 28,700 | 244,811 | ||||||
PerkinElmer, Inc. | 18,577 | 806,613 | ||||||
Perrigo Co., plc | 24,200 | 3,907,090 | ||||||
Pfizer, Inc. | 1,138,625 | 34,101,819 | ||||||
Pharmacyclics, Inc. * | 11,100 | 1,450,437 | ||||||
POZEN, Inc. * | 16,100 | 146,027 | ||||||
Prestige Brands Holdings, Inc. * | 8,500 | 301,070 | ||||||
Prothena Corp. plc * | 8,919 | 195,594 | ||||||
PTC Therapeutics, Inc. * | 5,885 | 240,520 | ||||||
Puma Biotechnology, Inc. * | 3,400 | 852,040 | ||||||
Quintiles Transnational Holdings, Inc. * | 11,800 | 690,772 | ||||||
Raptor Pharmaceutical Corp. *(c) | 29,942 | 287,743 | ||||||
Receptos, Inc. * | 5,500 | 570,075 | ||||||
Regeneron Pharmaceuticals, Inc. * | 13,000 | 5,118,360 | ||||||
Repligen Corp. * | 9,886 | 249,325 | ||||||
Rigel Pharmaceuticals, Inc. * | 48,200 | 95,436 | ||||||
Sagent Pharmaceuticals, Inc. * | 9,800 | 310,072 | ||||||
Salix Pharmaceuticals Ltd. * | 11,536 | 1,659,454 | ||||||
Sangamo BioSciences, Inc. * | 14,600 | 177,244 | ||||||
Sarepta Therapeutics, Inc. *(c) | 9,800 | 158,466 | ||||||
Seattle Genetics, Inc. * | 17,900 | 656,393 | ||||||
Sequenom, Inc. *(c) | 87,600 | 286,452 | ||||||
Spectrum Pharmaceuticals, Inc. * | 24,200 | 183,436 | ||||||
Sucampo Pharmaceuticals, Inc., Class A *(c) | 12,400 | 106,888 | ||||||
Synageva BioPharma Corp. * | 4,100 | 310,534 | ||||||
Synta Pharmaceuticals Corp. *(c) | 43,900 | 129,944 | ||||||
TESARO, Inc. * | 6,195 | 172,345 | ||||||
The Medicines Co. * | 10,600 | 268,392 | ||||||
TherapeuticsMD, Inc. * | 35,777 | 158,850 | ||||||
Theravance Biopharma, Inc. *(c) | 3,914 | 71,626 | ||||||
Theravance, Inc. (c) | 13,700 | 219,474 | ||||||
Thermo Fisher Scientific, Inc. | 71,302 | 8,382,976 | ||||||
Ultragenyx Pharmaceutical, Inc. * | 6,000 | 282,060 | ||||||
United Therapeutics Corp. * | 9,100 | 1,191,827 | ||||||
Vanda Pharmaceuticals, Inc. *(c) | 13,953 | 167,575 | ||||||
Vertex Pharmaceuticals, Inc. * | 42,744 | 4,814,684 | ||||||
Vical, Inc. * | 34,400 | 43,000 | ||||||
VIVUS, Inc. *(c) | 23,400 | 79,326 | ||||||
Waters Corp. * | 14,100 | 1,562,280 | ||||||
XenoPort, Inc. * | 37,200 | 252,216 | ||||||
ZIOPHARM Oncology, Inc. *(c) | 55,300 | 183,596 | ||||||
Zoetis, Inc. | 87,879 | 3,265,584 | ||||||
366,107,453 | ||||||||
Real Estate 3.9% | ||||||||
Acadia Realty Trust | 9,600 | 299,520 | ||||||
AG Mortgage Investment Trust, Inc. | 12,000 | 228,840 | ||||||
Agree Realty Corp. | 5,000 | 153,050 | ||||||
Alexander & Baldwin, Inc. | 6,400 | 256,192 | ||||||
Alexander’s, Inc. | 800 | 353,600 | ||||||
Alexandria Real Estate Equities, Inc. | 11,800 | 979,400 | ||||||
Altisource Portfolio Solutions S.A. *(c) | 2,800 | 209,048 | ||||||
Altisource Residential Corp. | 10,789 | 250,521 | ||||||
American Assets Trust, Inc. | 8,000 | 306,720 |
See financial notes 53
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
American Campus Communities, Inc. | 17,300 | 679,371 | ||||||
American Capital Agency Corp. | 62,500 | 1,421,250 | ||||||
American Capital Mortgage Investment Corp. | 14,600 | 286,014 | ||||||
American Homes 4 Rent, Class A | 24,300 | 425,979 | ||||||
American Realty Capital Properties, Inc. | 156,400 | 1,387,268 | ||||||
American Realty Investors, Inc. * | 1,537 | 8,192 | ||||||
American Tower Corp. | 72,844 | 7,102,290 | ||||||
Annaly Capital Management, Inc. | 166,400 | 1,898,624 | ||||||
Anworth Mortgage Asset Corp. | 24,200 | 125,598 | ||||||
Apartment Investment & Management Co., Class A | 23,111 | 827,143 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 11,400 | 187,416 | ||||||
Apollo Residential Mortgage, Inc. | 12,900 | 215,172 | ||||||
ARMOUR Residential REIT, Inc. | 61,000 | 241,560 | ||||||
Ashford Hospitality Prime, Inc. | 1,800 | 31,194 | ||||||
Ashford Hospitality Trust, Inc. | 9,000 | 101,700 | ||||||
Associated Estates Realty Corp. | 6,900 | 134,757 | ||||||
AV Homes, Inc. * | 6,500 | 97,435 | ||||||
AvalonBay Communities, Inc. | 23,919 | 3,727,537 | ||||||
Aviv REIT, Inc. | 10,900 | 367,657 | ||||||
BioMed Realty Trust, Inc. | 31,700 | 688,524 | ||||||
Blackstone Mortgage Trust, Inc., Class A | 8,102 | 226,208 | ||||||
Boston Properties, Inc. | 28,600 | 3,625,050 | ||||||
Brandywine Realty Trust | 25,863 | 399,066 | ||||||
Brixmor Property Group, Inc. | 17,200 | 418,992 | ||||||
Camden Property Trust | 17,500 | 1,341,725 | ||||||
Campus Crest Communities, Inc. | 17,900 | 113,486 | ||||||
Capstead Mortgage Corp. | 21,740 | 276,315 | ||||||
CareTrust REIT, Inc. * | 5,300 | 82,309 | ||||||
CBL & Associates Properties, Inc. | 26,785 | 512,397 | ||||||
CBRE Group, Inc., Class A * | 57,000 | 1,824,000 | ||||||
CBS Outdoor Americas, Inc. | 21,400 | 651,202 | ||||||
Cedar Realty Trust, Inc. | 33,200 | 228,416 | ||||||
Chambers Street Properties | 37,300 | 306,233 | ||||||
Chatham Lodging Trust | 8,234 | 210,955 | ||||||
Chesapeake Lodging Trust | 8,500 | 280,840 | ||||||
Chimera Investment Corp. | 169,700 | 529,464 | ||||||
CIM Commercial Trust Corp. (c) | 9,700 | 172,272 | ||||||
Colony Financial, Inc. | 19,300 | 430,004 | ||||||
Columbia Property Trust, Inc. | 20,200 | 509,646 | ||||||
Consolidated-Tomoka Land Co. | 2,000 | 104,380 | ||||||
CoreSite Realty Corp. | 3,400 | 125,868 | ||||||
Corporate Office Properties Trust | 14,400 | 393,696 | ||||||
Corrections Corp. of America | 20,285 | 746,082 | ||||||
Cousins Properties, Inc. | 28,345 | 368,768 | ||||||
Crown Castle International Corp. | 60,023 | 4,688,997 | ||||||
CubeSmart | 21,400 | 450,470 | ||||||
CYS Investments, Inc. | 25,500 | 227,715 | ||||||
DCT Industrial Trust, Inc. | 63,600 | 545,052 | ||||||
DDR Corp. | 54,584 | 990,154 | ||||||
DiamondRock Hospitality Co. | 32,286 | 463,304 | ||||||
Digital Realty Trust, Inc. | 23,800 | 1,641,962 | ||||||
Douglas Emmett, Inc. | 24,948 | 701,787 | ||||||
Duke Realty Corp. | 59,590 | 1,129,826 | ||||||
DuPont Fabros Technology, Inc. | 9,200 | 284,924 | ||||||
Dynex Capital, Inc. | 21,998 | 185,223 | ||||||
EastGroup Properties, Inc. | 6,300 | 433,818 | ||||||
Education Realty Trust, Inc. | 27,500 | 309,650 | ||||||
Empire State Realty Trust, Inc., Class A | 22,502 | 359,132 | ||||||
EPR Properties | 9,600 | 538,560 | ||||||
Equity Commonwealth | 23,450 | 626,350 | ||||||
Equity LifeStyle Properties, Inc. | 12,000 | 589,200 | ||||||
Equity One, Inc. | 12,100 | 290,400 | ||||||
Equity Residential | 63,600 | 4,424,016 | ||||||
Essex Property Trust, Inc. | 10,989 | 2,217,141 | ||||||
Excel Trust, Inc. | 14,000 | 182,000 | ||||||
Extra Space Storage, Inc. | 18,200 | 1,058,512 | ||||||
Federal Realty Investment Trust | 11,200 | 1,476,160 | ||||||
FelCor Lodging Trust, Inc. | 28,000 | 300,440 | ||||||
First Industrial Realty Trust, Inc. | 15,900 | 310,527 | ||||||
First Potomac Realty Trust | 14,800 | 185,000 | ||||||
Forest City Enterprises, Inc., Class A * | 23,900 | 499,271 | ||||||
Forestar Group, Inc. * | 4,933 | 86,081 | ||||||
Franklin Street Properties Corp. | 22,500 | 269,775 | ||||||
Gaming & Leisure Properties, Inc. | 21,618 | 675,563 | ||||||
General Growth Properties, Inc. | 110,309 | 2,858,106 | ||||||
Getty Realty Corp. | 9,500 | 176,795 | ||||||
Glimcher Realty Trust | 34,200 | 469,566 | ||||||
Government Properties Income Trust | 9,900 | 225,918 | ||||||
Gramercy Property Trust, Inc. | 27,228 | 170,175 | ||||||
Griffin Land & Nurseries, Inc. | 300 | 7,845 | ||||||
Hatteras Financial Corp. | 13,800 | 262,752 | ||||||
HCP, Inc. | 83,048 | 3,651,621 | ||||||
Health Care REIT, Inc. | 58,958 | 4,192,503 | ||||||
Healthcare Realty Trust, Inc. | 15,800 | 418,226 | ||||||
Healthcare Trust of America, Inc., Class A | 42,000 | 539,280 | ||||||
Hersha Hospitality Trust | 40,000 | 291,600 | ||||||
Highwoods Properties, Inc. | 17,261 | 739,979 | ||||||
Home Properties, Inc. | 9,500 | 610,945 | ||||||
Hospitality Properties Trust | 24,500 | 725,445 | ||||||
Host Hotels & Resorts, Inc. | 146,663 | 3,418,715 | ||||||
Hudson Pacific Properties, Inc. | 9,100 | 248,521 | ||||||
Inland Real Estate Corp. | 20,300 | 215,383 | ||||||
Invesco Mortgage Capital, Inc. | 22,300 | 368,842 | ||||||
Investors Real Estate Trust | 28,600 | 240,240 | ||||||
Iron Mountain, Inc. | 28,138 | 1,014,938 | ||||||
iStar Financial, Inc. * | 13,390 | 190,004 | ||||||
Jones Lang LaSalle, Inc. | 7,300 | 987,033 | ||||||
Kennedy-Wilson Holdings, Inc. | 12,200 | 330,498 | ||||||
Kilroy Realty Corp. | 15,400 | 1,043,196 | ||||||
Kimco Realty Corp. | 74,295 | 1,853,660 | ||||||
Kite Realty Group Trust | 15,825 | 409,709 | ||||||
LaSalle Hotel Properties | 19,700 | 772,437 | ||||||
Lexington Realty Trust | 33,567 | 367,894 | ||||||
Liberty Property Trust | 24,200 | 841,434 | ||||||
LTC Properties, Inc. | 8,700 | 364,878 | ||||||
Mack-Cali Realty Corp. | 18,500 | 346,505 | ||||||
Maui Land & Pineapple Co., Inc. * | 800 | 4,888 | ||||||
Medical Properties Trust, Inc. | 24,300 | 327,807 | ||||||
MFA Financial, Inc. | 60,500 | 506,990 | ||||||
Mid-America Apartment Communities, Inc. | 12,844 | 907,557 | ||||||
Monmouth Real Estate Investment Corp. | 18,100 | 202,720 | ||||||
National Health Investors, Inc. | 5,900 | 388,869 |
54 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
National Retail Properties, Inc. | 20,120 | 766,974 | ||||||
New Century Financial Corp. *(b)(g) | 3,600 | — | ||||||
New Residential Investment Corp. | 21,350 | 264,313 | ||||||
New York Mortgage Trust, Inc. (c) | 18,600 | 145,266 | ||||||
New York REIT, Inc. | 28,100 | 315,282 | ||||||
Newcastle Investment Corp. | 20,583 | 497,079 | ||||||
NorthStar Realty Finance Corp. | 33,475 | 621,966 | ||||||
Omega Healthcare Investors, Inc. | 22,684 | 865,621 | ||||||
One Liberty Properties, Inc. | 1,400 | 32,046 | ||||||
Parkway Properties, Inc. | 14,940 | 299,547 | ||||||
Pebblebrook Hotel Trust | 12,300 | 523,980 | ||||||
Pennsylvania Real Estate Investment Trust | 13,900 | 297,877 | ||||||
PennyMac Mortgage Investment Trust | 14,400 | 310,896 | ||||||
Physicians Realty Trust | 10,600 | 162,604 | ||||||
Piedmont Office Realty Trust, Inc., Class A | 27,500 | 534,875 | ||||||
Plum Creek Timber Co., Inc. | 32,047 | 1,314,248 | ||||||
Post Properties, Inc. | 8,200 | 458,708 | ||||||
Potlatch Corp. | 5,753 | 253,075 | ||||||
Preferred Apartment Communities, Inc., Class A | 3,700 | 31,450 | ||||||
Prologis, Inc. | 89,834 | 3,741,586 | ||||||
PS Business Parks, Inc. | 3,000 | 252,660 | ||||||
Public Storage | 26,997 | 4,976,627 | ||||||
RAIT Financial Trust | 16,199 | 118,739 | ||||||
Ramco-Gershenson Properties Trust | 22,500 | 393,300 | ||||||
Rayonier, Inc. | 20,882 | 698,921 | ||||||
Realogy Holdings Corp. * | 24,700 | 1,012,947 | ||||||
Realty Income Corp. (c) | 40,035 | 1,842,811 | ||||||
Redwood Trust, Inc. | 19,700 | 370,163 | ||||||
Regency Centers Corp. | 17,233 | 1,046,043 | ||||||
Resource Capital Corp. | 28,600 | 151,294 | ||||||
Retail Opportunity Investments Corp. | 14,400 | 235,296 | ||||||
Retail Properties of America, Inc., Class A | 41,600 | 652,704 | ||||||
RLJ Lodging Trust | 20,300 | 654,066 | ||||||
Rouse Properties, Inc. (c) | 10,715 | 195,120 | ||||||
Ryman Hospitality Properties, Inc. (c) | 7,837 | 386,756 | ||||||
Sabra Health Care REIT, Inc. | 13,700 | 391,409 | ||||||
Saul Centers, Inc. | 4,700 | 258,265 | ||||||
Select Income REIT | 14,600 | 357,846 | ||||||
Senior Housing Properties Trust | 37,819 | 854,331 | ||||||
Silver Bay Realty Trust Corp. | 13,033 | 220,649 | ||||||
Simon Property Group, Inc. | 56,005 | 10,036,656 | ||||||
SL Green Realty Corp. | 16,866 | 1,951,396 | ||||||
Sovran Self Storage, Inc. | 6,626 | 563,806 | ||||||
Spirit Realty Capital, Inc. | 69,048 | 821,671 | ||||||
STAG Industrial, Inc. | 11,900 | 290,360 | ||||||
Starwood Property Trust, Inc. | 38,873 | 876,975 | ||||||
Starwood Waypoint Residential Trust | 6,440 | 168,599 | ||||||
Strategic Hotels & Resorts, Inc. * | 42,000 | 539,700 | ||||||
Summit Hotel Properties, Inc. | 9,600 | 111,744 | ||||||
Sun Communities, Inc. | 6,000 | 347,820 | ||||||
Sunstone Hotel Investors, Inc. | 27,600 | 422,556 | ||||||
Tanger Factory Outlet Centers, Inc. | 15,600 | 558,012 | ||||||
Taubman Centers, Inc. | 10,100 | 768,105 | ||||||
Tejon Ranch Co. * | 3,674 | 110,881 | ||||||
The Geo Group, Inc. | 11,899 | 475,246 | ||||||
The Howard Hughes Corp. * | 6,300 | 928,494 | ||||||
The Macerich Co. | 24,905 | 1,755,803 | ||||||
The St. Joe Co. * | 18,800 | 360,020 | ||||||
Two Harbors Investment Corp. | 60,300 | 610,839 | ||||||
UDR, Inc. | 42,961 | 1,298,711 | ||||||
UMH Properties, Inc. | 7,900 | 79,790 | ||||||
Universal Health Realty Income Trust | 4,700 | 227,715 | ||||||
Urstadt Biddle Properties, Inc., Class A | 4,500 | 97,335 | ||||||
Ventas, Inc. | 53,866 | 3,690,360 | ||||||
Vornado Realty Trust | 32,092 | 3,513,432 | ||||||
Washington Prime Group, Inc. | 27,002 | 476,045 | ||||||
Washington Real Estate Investment Trust | 9,700 | 274,122 | ||||||
Weingarten Realty Investors | 17,175 | 622,594 | ||||||
Western Asset Mortgage Capital Corp. (c) | 4,607 | 69,197 | ||||||
Weyerhaeuser Co. | 99,992 | 3,385,729 | ||||||
Whitestone REIT | 2,100 | 31,500 | ||||||
WP Carey, Inc. | 16,300 | 1,103,836 | ||||||
156,779,819 | ||||||||
Retailing 4.1% | ||||||||
Aaron’s, Inc. | 14,675 | 363,353 | ||||||
Abercrombie & Fitch Co., Class A | 11,800 | 395,064 | ||||||
Advance Auto Parts, Inc. | 13,140 | 1,931,054 | ||||||
Aeropostale, Inc. * | 25,600 | 77,056 | ||||||
Amazon.com, Inc. * | 68,125 | 20,809,462 | ||||||
America’s Car-Mart, Inc. * | 6,850 | 314,963 | ||||||
American Eagle Outfitters, Inc. | 27,450 | 353,282 | ||||||
ANN, Inc. * | 6,625 | 254,334 | ||||||
Asbury Automotive Group, Inc. * | 6,500 | 455,260 | ||||||
Ascena Retail Group, Inc. * | 21,236 | 264,388 | ||||||
AutoNation, Inc. * | 13,800 | 790,188 | ||||||
AutoZone, Inc. * | 5,800 | 3,210,416 | ||||||
Barnes & Noble, Inc. * | 7,400 | 161,468 | ||||||
Bed Bath & Beyond, Inc. * | 35,500 | 2,390,570 | ||||||
Best Buy Co., Inc. | 50,325 | 1,718,095 | ||||||
Big Lots, Inc. | 8,000 | 365,200 | ||||||
Brown Shoe Co., Inc. | 6,675 | 177,488 | ||||||
Burlington Stores, Inc. * | 9,000 | 377,460 | ||||||
Cabela’s, Inc. * | 7,700 | 369,754 | ||||||
CarMax, Inc. * | 36,846 | 2,060,060 | ||||||
Chico’s FAS, Inc. | 26,200 | 395,096 | ||||||
Christopher & Banks Corp. * | 13,400 | 87,502 | ||||||
Conn’s, Inc. *(c) | 7,900 | 245,769 | ||||||
Core-Mark Holding Co., Inc. | 4,000 | 232,120 | ||||||
CST Brands, Inc. | 12,286 | 469,940 | ||||||
Destination Maternity Corp. | 5,000 | 74,900 | ||||||
Dick’s Sporting Goods, Inc. | 17,500 | 793,975 | ||||||
Dillard’s, Inc., Class A | 4,300 | 454,768 | ||||||
Dollar General Corp. * | 54,625 | 3,423,349 | ||||||
Dollar Tree, Inc. * | 35,350 | 2,141,149 | ||||||
DSW, Inc., Class A | 11,560 | 342,754 | ||||||
Expedia, Inc. | 16,972 | 1,442,111 | ||||||
Express, Inc. * | 12,600 | 188,622 | ||||||
Family Dollar Stores, Inc. | 16,300 | 1,276,127 |
See financial notes 55
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Five Below, Inc. * | 7,800 | 310,986 | ||||||
Foot Locker, Inc. | 23,800 | 1,333,038 | ||||||
Francesca’s Holdings Corp. * | 13,300 | 158,403 | ||||||
Fred’s, Inc., Class A | 6,700 | 105,190 | ||||||
FTD Cos., Inc. * | 8,070 | 283,903 | ||||||
GameStop Corp., Class A | 19,348 | 827,320 | ||||||
Geeknet, Inc. * | 452 | 4,380 | ||||||
Genesco, Inc. * | 4,300 | 329,767 | ||||||
Genuine Parts Co. | 27,300 | 2,650,284 | ||||||
GNC Holdings, Inc., Class A | 15,500 | 644,335 | ||||||
Group 1 Automotive, Inc. | 4,400 | 375,892 | ||||||
Groupon, Inc. * | 88,400 | 646,204 | ||||||
Guess?, Inc. | 7,900 | 175,143 | ||||||
Hibbett Sports, Inc. * | 3,543 | 160,817 | ||||||
HSN, Inc. | 6,269 | 414,193 | ||||||
J.C. Penney Co., Inc. *(c) | 50,700 | 385,827 | ||||||
Kirkland’s, Inc. * | 8,700 | 154,860 | ||||||
Kohl’s Corp. | 36,000 | 1,951,920 | ||||||
L Brands, Inc. | 42,220 | 3,044,906 | ||||||
Lands’ End, Inc. *(c) | 7,747 | 367,750 | ||||||
Liberty Interactive Corp., Class A * | 81,009 | 2,117,575 | ||||||
Liberty TripAdvisor Holdings, Inc., Class A * | 13,830 | 436,751 | ||||||
Liberty Ventures, Series A * | 25,347 | 889,680 | ||||||
Lithia Motors, Inc., Class A | 3,300 | 256,146 | ||||||
LKQ Corp. * | 58,900 | 1,682,773 | ||||||
Lowe’s Cos., Inc. | 173,951 | 9,949,997 | ||||||
Lumber Liquidators Holdings, Inc. * | 4,600 | 247,342 | ||||||
Macy’s, Inc. | 63,863 | 3,692,559 | ||||||
MarineMax, Inc. * | 16,300 | 312,471 | ||||||
Mattress Firm Holding Corp. * | 3,200 | 202,208 | ||||||
Monro Muffler Brake, Inc. | 4,462 | 238,449 | ||||||
Murphy USA, Inc. * | 6,875 | 393,938 | ||||||
Netflix, Inc. * | 10,621 | 4,171,610 | ||||||
Nordstrom, Inc. | 26,300 | 1,909,643 | ||||||
O’Reilly Automotive, Inc. * | 17,999 | 3,165,664 | ||||||
Office Depot, Inc. * | 77,256 | 403,276 | ||||||
Orbitz Worldwide, Inc. * | 22,152 | 183,197 | ||||||
Outerwall, Inc. *(c) | 5,000 | 316,350 | ||||||
Pacific Sunwear of California, Inc. * | 41,175 | 62,586 | ||||||
Penske Automotive Group, Inc. | 6,300 | 285,012 | ||||||
PetSmart, Inc. | 17,100 | 1,237,185 | ||||||
Pier 1 Imports, Inc. | 15,800 | 203,820 | ||||||
Pool Corp. | 6,662 | 397,721 | ||||||
RadioShack Corp. *(c) | 27,200 | 25,024 | ||||||
Rent-A-Center, Inc. | 7,750 | 240,018 | ||||||
Restoration Hardware Holdings, Inc. * | 6,300 | 506,016 | ||||||
Ross Stores, Inc. | 35,800 | 2,889,776 | ||||||
Sally Beauty Holdings, Inc. * | 24,850 | 728,353 | ||||||
Sears Holdings Corp. *(c) | 11,385 | 397,564 | ||||||
Select Comfort Corp. * | 12,200 | 313,418 | ||||||
Shoe Carnival, Inc. | 6,300 | 115,920 | ||||||
Shutterfly, Inc. * | 6,300 | 263,529 | ||||||
Signet Jewelers Ltd. | 14,000 | 1,680,140 | ||||||
Sonic Automotive, Inc., Class A | 11,200 | 278,768 | ||||||
Stage Stores, Inc. | 14,275 | 240,819 | ||||||
Staples, Inc. | 107,500 | 1,363,100 | ||||||
Stein Mart, Inc. | 10,300 | 137,814 | ||||||
Systemax, Inc. * | 8,000 | 122,400 | ||||||
Target Corp. | 112,978 | 6,984,300 | ||||||
The Buckle, Inc. (c) | 3,875 | 191,154 | ||||||
The Cato Corp., Class A | 7,100 | 253,257 | ||||||
The Children’s Place, Inc. | 3,600 | 177,300 | ||||||
The Finish Line, Inc., Class A | 7,161 | 189,552 | ||||||
The Gap, Inc. | 51,800 | 1,962,702 | ||||||
The Home Depot, Inc. | 241,663 | 23,566,976 | ||||||
The Men’s Wearhouse, Inc. | 6,600 | 310,398 | ||||||
The Pep Boys - Manny, Moe & Jack * | 19,400 | 184,882 | ||||||
The Priceline Group, Inc. * | 9,436 | 11,381,798 | ||||||
The TJX Cos., Inc. | 122,747 | 7,772,340 | ||||||
The Wet Seal, Inc., Class A * | 31,400 | 10,676 | ||||||
Tiffany & Co. | 22,200 | 2,133,864 | ||||||
Tractor Supply Co. | 23,100 | 1,691,382 | ||||||
Trans World Entertainment Corp. | 9,700 | 32,010 | ||||||
TripAdvisor, Inc. * | 19,772 | 1,752,986 | ||||||
Tuesday Morning Corp. * | 10,800 | 220,212 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. * | 12,100 | 1,461,801 | ||||||
Urban Outfitters, Inc. * | 18,000 | 546,480 | ||||||
Vitamin Shoppe, Inc. * | 4,200 | 197,106 | ||||||
VOXX International Corp. * | 9,100 | 77,623 | ||||||
West Marine, Inc. * | 8,200 | 80,688 | ||||||
Williams-Sonoma, Inc. | 16,200 | 1,053,486 | ||||||
Winmark Corp. | 1,700 | 139,876 | ||||||
Zumiez, Inc. * | 10,500 | 350,490 | ||||||
167,514,166 | ||||||||
Semiconductors & Semiconductor Equipment 2.4% | ||||||||
Advanced Energy Industries, Inc. * | 4,500 | 89,010 | ||||||
Advanced Micro Devices, Inc. *(c) | 123,300 | 345,240 | ||||||
Altera Corp. | 53,000 | 1,821,610 | ||||||
Amkor Technology, Inc. * | 35,700 | 242,046 | ||||||
Amtech Systems, Inc. * | 3,500 | 36,855 | ||||||
ANADIGICS, Inc. * | 8,150 | 5,787 | ||||||
Analog Devices, Inc. | 54,549 | 2,706,721 | ||||||
Applied Materials, Inc. | 213,298 | 4,711,753 | ||||||
Applied Micro Circuits Corp. * | 21,300 | 137,811 | ||||||
Atmel Corp. * | 110,700 | 821,394 | ||||||
Avago Technologies Ltd. | 45,700 | 3,941,625 | ||||||
AXT, Inc. * | 3,500 | 8,260 | ||||||
Broadcom Corp., Class A | 94,590 | 3,961,429 | ||||||
Brooks Automation, Inc. | 11,885 | 146,542 | ||||||
Cabot Microelectronics Corp. * | 5,660 | 272,982 | ||||||
Cavium, Inc. * | 10,400 | 533,624 | ||||||
CEVA, Inc. * | 7,233 | 117,898 | ||||||
Cirrus Logic, Inc. * | 9,800 | 189,140 | ||||||
Cohu, Inc. | 7,500 | 76,500 | ||||||
Cree, Inc. * | 20,900 | 657,932 | ||||||
Cypress Semiconductor Corp. * | 19,500 | 193,245 | ||||||
Diodes, Inc. * | 11,012 | 284,440 | ||||||
DSP Group, Inc. * | 6,300 | 61,047 | ||||||
Entegris, Inc. * | 19,299 | 262,080 | ||||||
Entropic Communications, Inc. * | 20,100 | 50,250 | ||||||
Exar Corp. * | 9,834 | 93,915 | ||||||
Fairchild Semiconductor International, Inc. * | 17,800 | 273,230 | ||||||
First Solar, Inc. * | 13,279 | 782,133 | ||||||
FormFactor, Inc. * | 14,600 | 116,362 | ||||||
Freescale Semiconductor Ltd. * | 15,000 | 298,350 |
56 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
GSI Technology, Inc. * | 8,500 | 40,885 | ||||||
Integrated Device Technology, Inc. * | 26,920 | 441,757 | ||||||
Integrated Silicon Solution, Inc. | 9,338 | 126,810 | ||||||
Intel Corp. | 885,697 | 30,122,555 | ||||||
International Rectifier Corp. * | 14,937 | 594,044 | ||||||
Intersil Corp., Class A | 26,764 | 355,694 | ||||||
IXYS Corp. | 6,900 | 80,523 | ||||||
KLA-Tencor Corp. | 29,000 | 2,295,350 | ||||||
Kopin Corp. * | 19,600 | 74,480 | ||||||
Kulicke & Soffa Industries, Inc. * | 18,500 | 266,770 | ||||||
Lam Research Corp. | 30,267 | 2,356,589 | ||||||
Lattice Semiconductor Corp. * | 25,100 | 168,421 | ||||||
Linear Technology Corp. | 41,900 | 1,794,996 | ||||||
Marvell Technology Group Ltd. | 73,200 | 983,808 | ||||||
Maxim Integrated Products, Inc. | 48,200 | 1,414,188 | ||||||
Micrel, Inc. | 9,700 | 117,758 | ||||||
Microchip Technology, Inc. | 34,875 | 1,503,461 | ||||||
Micron Technology, Inc. * | 193,207 | 6,393,220 | ||||||
Microsemi Corp. * | 13,152 | 342,873 | ||||||
MKS Instruments, Inc. | 7,900 | 287,560 | ||||||
Monolithic Power Systems, Inc. | 6,500 | 287,235 | ||||||
MoSys, Inc. *(c) | 6,400 | 17,216 | ||||||
Nanometrics, Inc. * | 5,300 | 71,762 | ||||||
NVIDIA Corp. | 97,000 | 1,895,380 | ||||||
OmniVision Technologies, Inc. * | 13,900 | 372,242 | ||||||
ON Semiconductor Corp. * | 75,165 | 623,118 | ||||||
PDF Solutions, Inc. * | 9,699 | 125,796 | ||||||
Pericom Semiconductor Corp. * | 6,600 | 72,138 | ||||||
Photronics, Inc. * | 18,000 | 161,820 | ||||||
PMC-Sierra, Inc. * | 27,300 | 212,667 | ||||||
Power Integrations, Inc. | 4,200 | 211,512 | ||||||
QuickLogic Corp. *(c) | 27,600 | 79,488 | ||||||
Rambus, Inc. * | 19,600 | 224,420 | ||||||
RF Micro Devices, Inc. * | 66,520 | 865,425 | ||||||
Rudolph Technologies, Inc. * | 16,418 | 144,150 | ||||||
Semtech Corp. * | 21,700 | 550,746 | ||||||
Silicon Image, Inc. * | 19,500 | 104,520 | ||||||
Silicon Laboratories, Inc. * | 5,000 | 227,950 | ||||||
Skyworks Solutions, Inc. | 32,889 | 1,915,455 | ||||||
Spansion, Inc., Class A * | 8,600 | 176,988 | ||||||
SunEdison, Inc. * | 45,700 | 891,607 | ||||||
SunPower Corp. *(c) | 6,800 | 216,512 | ||||||
Synaptics, Inc. * | 5,250 | 359,257 | ||||||
Teradyne, Inc. | 34,959 | 643,246 | ||||||
Tessera Technologies, Inc. | 11,100 | 337,329 | ||||||
Texas Instruments, Inc. | 187,297 | 9,301,169 | ||||||
TriQuint Semiconductor, Inc. * | 32,110 | 694,539 | ||||||
Ultratech, Inc. * | 4,800 | 91,824 | ||||||
Veeco Instruments, Inc. * | 8,800 | 316,712 | ||||||
Xcerra Corp. * | 19,192 | 162,940 | ||||||
Xilinx, Inc. | 47,500 | 2,112,800 | ||||||
96,468,916 | ||||||||
Software & Services 10.1% | ||||||||
Accenture plc, Class A | 114,397 | 9,279,885 | ||||||
ACI Worldwide, Inc. * | 23,100 | 444,444 | ||||||
Activision Blizzard, Inc. | 85,632 | 1,708,358 | ||||||
Actua Corp. * | 8,050 | 151,340 | ||||||
Actuate Corp. * | 13,962 | 59,897 | ||||||
Acxiom Corp. * | 13,300 | 250,572 | ||||||
Adobe Systems, Inc. * | 83,510 | 5,855,721 | ||||||
Advent Software, Inc. | 7,900 | 273,024 | ||||||
Akamai Technologies, Inc. * | 32,038 | 1,931,891 | ||||||
Alliance Data Systems Corp. * | 9,600 | 2,720,160 | ||||||
Amdocs Ltd. | 26,600 | 1,264,564 | ||||||
Angie’s List, Inc. *(c) | 22,248 | 155,069 | ||||||
ANSYS, Inc. * | 15,286 | 1,200,868 | ||||||
AOL, Inc. * | 12,922 | 562,495 | ||||||
Aspen Technology, Inc. * | 15,400 | 568,722 | ||||||
Autodesk, Inc. * | 40,100 | 2,307,354 | ||||||
Automatic Data Processing, Inc. | 83,462 | 6,825,522 | ||||||
Bankrate, Inc. * | 14,600 | 158,556 | ||||||
Bazaarvoice, Inc. * | 15,200 | 113,240 | ||||||
Blackbaud, Inc. | 6,000 | 267,000 | ||||||
Blackhawk Network Holdings, Inc., Class B * | 6,703 | 223,880 | ||||||
Blucora, Inc. * | 11,572 | 196,145 | ||||||
Booz Allen Hamilton Holding Corp. | 12,300 | 324,105 | ||||||
Bottomline Technologies de, Inc. * | 8,800 | 220,792 | ||||||
Broadridge Financial Solutions, Inc. | 19,725 | 866,519 | ||||||
BroadSoft, Inc. * | 6,500 | 148,850 | ||||||
CA, Inc. | 53,608 | 1,557,849 | ||||||
CACI International, Inc., Class A * | 4,100 | 337,389 | ||||||
Cadence Design Systems, Inc. * | 47,500 | 852,625 | ||||||
Callidus Software, Inc. * | 16,546 | 233,133 | ||||||
Cardtronics, Inc. * | 8,800 | 337,832 | ||||||
CDK Global, Inc. * | 27,820 | 934,752 | ||||||
Ciber, Inc. * | 24,900 | 81,423 | ||||||
Citrix Systems, Inc. * | 30,800 | 1,978,284 | ||||||
Cognizant Technology Solutions Corp., Class A * | 106,100 | 5,182,985 | ||||||
CommVault Systems, Inc. * | 6,900 | 305,946 | ||||||
Computer Sciences Corp. | 24,338 | 1,470,015 | ||||||
Compuware Corp. | 31,800 | 322,770 | ||||||
comScore, Inc. * | 7,500 | 316,050 | ||||||
Comverse, Inc. * | 6,250 | 136,250 | ||||||
Concur Technologies, Inc. * | 9,100 | 1,167,712 | ||||||
Constant Contact, Inc. * | 7,000 | 247,520 | ||||||
Convergys Corp. | 16,000 | 322,720 | ||||||
Conversant, Inc. * | 12,000 | 423,000 | ||||||
CoreLogic, Inc. * | 13,800 | 432,906 | ||||||
Cornerstone OnDemand, Inc. * | 7,100 | 257,517 | ||||||
CoStar Group, Inc. * | 5,500 | 885,995 | ||||||
Covisint Corp. * | 4,460 | 12,889 | ||||||
CSG Systems International, Inc. | 8,900 | 235,939 | ||||||
Dealertrack Technologies, Inc. * | 6,100 | 287,005 | ||||||
Demand Media, Inc. * | 5,920 | 41,677 | ||||||
Demandware, Inc. * | 6,800 | 407,660 | ||||||
Digimarc Corp. | 3,542 | 102,683 | ||||||
Digital River, Inc. * | 16,910 | 432,389 | ||||||
DST Systems, Inc. | 5,900 | 568,465 | ||||||
EarthLink Holdings Corp. | 17,050 | 61,039 | ||||||
eBay, Inc. * | 204,544 | 10,738,560 | ||||||
Ebix, Inc. (c) | 17,503 | 258,169 | ||||||
Edgewater Technology, Inc. * | 767 | 5,415 | ||||||
Electronic Arts, Inc. * | 55,100 | 2,257,447 | ||||||
Ellie Mae, Inc. * | 11,293 | 433,425 | ||||||
EnerNOC, Inc. * | 9,754 | 144,067 | ||||||
Envestnet, Inc. * | 7,300 | 324,266 | ||||||
EPAM Systems, Inc. * | 7,800 | 372,372 |
See financial notes 57
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Epiq Systems, Inc. | 8,525 | 136,741 | ||||||
Equinix, Inc. | 9,365 | 1,956,349 | ||||||
Euronet Worldwide, Inc. * | 8,800 | 472,296 | ||||||
EVERTEC, Inc. | 14,000 | 317,800 | ||||||
ExlService Holdings, Inc. * | 7,200 | 201,528 | ||||||
Facebook, Inc., Class A * | 372,707 | 27,949,298 | ||||||
FactSet Research Systems, Inc. | 6,650 | 874,076 | ||||||
Fair Isaac Corp. | 4,744 | 295,551 | ||||||
FalconStor Software, Inc. * | 1,200 | 1,356 | ||||||
Fidelity National Information Services, Inc. | 51,091 | 2,983,204 | ||||||
FireEye, Inc. * | 9,700 | 329,703 | ||||||
Fiserv, Inc. * | 42,600 | 2,959,848 | ||||||
FleetCor Technologies, Inc. * | 13,300 | 2,002,448 | ||||||
Forrester Research, Inc. | 6,800 | 273,904 | ||||||
Fortinet, Inc. * | 26,700 | 695,535 | ||||||
Gartner, Inc. * | 14,800 | 1,194,508 | ||||||
Genpact Ltd. * | 28,274 | 496,209 | ||||||
Global Cash Access Holdings, Inc. * | 28,300 | 206,307 | ||||||
Global Eagle Entertainment, Inc. * | 17,114 | 209,304 | ||||||
Global Payments, Inc. | 11,440 | 920,920 | ||||||
Glu Mobile, Inc. *(c) | 38,900 | 150,543 | ||||||
Google, Inc., Class A * | 50,876 | 28,890,954 | ||||||
Google, Inc., Class C * | 51,176 | 28,611,478 | ||||||
GSE Systems, Inc. * | 2,424 | 3,660 | ||||||
Guidewire Software, Inc. * | 10,800 | 539,352 | ||||||
Heartland Payment Systems, Inc. | 7,700 | 397,705 | ||||||
Higher One Holdings, Inc. * | 19,400 | 49,858 | ||||||
HomeAway, Inc. * | 15,400 | 537,460 | ||||||
IAC/InterActiveCorp | 12,672 | 857,768 | ||||||
iGATE Corp. * | 8,800 | 326,040 | ||||||
Imperva, Inc. * | 11,562 | 473,695 | ||||||
Infoblox, Inc. * | 8,600 | 138,804 | ||||||
Informatica Corp. * | 18,000 | 641,880 | ||||||
Information Services Group, Inc. * | 7,500 | 31,725 | ||||||
Interactive Intelligence Group, Inc. * | 2,900 | 139,954 | ||||||
Internap Network Services Corp. * | 13,200 | 105,732 | ||||||
International Business Machines Corp. | 166,051 | 27,298,784 | ||||||
Intralinks Holdings, Inc. * | 12,200 | 105,408 | ||||||
Intuit, Inc. | 54,530 | 4,799,185 | ||||||
j2 Global, Inc. | 9,000 | 486,810 | ||||||
Jack Henry & Associates, Inc. | 13,800 | 825,516 | ||||||
Jive Software, Inc. * | 27,994 | 171,043 | ||||||
Leidos Holdings, Inc. | 11,000 | 402,270 | ||||||
LinkedIn Corp., Class A * | 18,300 | 4,189,968 | ||||||
Lionbridge Technologies, Inc. * | 19,500 | 94,185 | ||||||
Liquidity Services, Inc. * | 15,481 | 197,847 | ||||||
LivePerson, Inc. * | 19,700 | 283,680 | ||||||
LogMeIn, Inc. * | 7,600 | 365,180 | ||||||
Looksmart Ltd. * | 160 | 229 | ||||||
Manhattan Associates, Inc. * | 11,600 | 465,276 | ||||||
ManTech International Corp., Class A | 8,600 | 242,176 | ||||||
Marketo, Inc. * | 6,684 | 215,693 | ||||||
MasterCard, Inc., Class A | 175,356 | 14,686,065 | ||||||
Mattersight Corp. * | 190 | 1,030 | ||||||
MAXIMUS, Inc. | 11,300 | 547,598 | ||||||
Mentor Graphics Corp. | 13,800 | 292,422 | ||||||
Microsoft Corp. | 1,474,318 | 69,219,230 | ||||||
MicroStrategy, Inc., Class A * | 2,256 | 362,945 | ||||||
Millennial Media, Inc. *(c) | 21,300 | 43,665 | ||||||
ModusLink Global Solutions, Inc. * | 10,450 | 36,575 | ||||||
MoneyGram International, Inc. * | 9,037 | 77,718 | ||||||
Monotype Imaging Holdings, Inc. | 6,500 | 185,965 | ||||||
Monster Worldwide, Inc. * | 35,800 | 138,188 | ||||||
Move, Inc. * | 12,430 | 260,409 | ||||||
NetScout Systems, Inc. * | 7,300 | 269,078 | ||||||
NetSuite, Inc. * | 7,900 | 858,414 | ||||||
NeuStar, Inc., Class A *(c) | 9,300 | 245,613 | ||||||
NIC, Inc. | 8,000 | 147,440 | ||||||
Nuance Communications, Inc. * | 42,274 | 652,288 | ||||||
Oracle Corp. | 583,313 | 22,778,373 | ||||||
Pandora Media, Inc. * | 38,400 | 740,352 | ||||||
Paychex, Inc. | 57,464 | 2,697,360 | ||||||
Pegasystems, Inc. | 12,800 | 277,376 | ||||||
Perficient, Inc. * | 7,800 | 129,324 | ||||||
PRGX Global, Inc. * | 11,000 | 58,190 | ||||||
Progress Software Corp. * | 9,300 | 240,870 | ||||||
Proofpoint, Inc. * | 9,000 | 396,360 | ||||||
PROS Holdings, Inc. * | 7,826 | 218,972 | ||||||
PTC, Inc. * | 19,780 | 754,607 | ||||||
Qlik Technologies, Inc. * | 14,100 | 399,735 | ||||||
Rackspace Hosting, Inc. * | 19,400 | 744,184 | ||||||
RealNetworks, Inc. * | 12,725 | 87,803 | ||||||
RealPage, Inc. * | 10,500 | 208,635 | ||||||
Red Hat, Inc. * | 36,600 | 2,156,472 | ||||||
Reis, Inc. | 1,400 | 32,760 | ||||||
Rightside Group Ltd. * | 5,920 | 56,062 | ||||||
Rovi Corp. * | 15,412 | 321,803 | ||||||
salesforce.com, Inc. * | 101,222 | 6,477,196 | ||||||
Sapient Corp. * | 16,100 | 278,852 | ||||||
Science Applications International Corp. | 6,285 | 307,399 | ||||||
Seachange International, Inc. * | 9,250 | 62,530 | ||||||
ServiceNow, Inc. * | 22,800 | 1,548,804 | ||||||
ServiceSource International, Inc. * | 14,400 | 55,008 | ||||||
Shutterstock, Inc. * | 4,000 | 311,040 | ||||||
SolarWinds, Inc. * | 12,000 | 570,600 | ||||||
Solera Holdings, Inc. | 11,400 | 592,230 | ||||||
Splunk, Inc. * | 20,800 | 1,374,464 | ||||||
SS&C Technologies Holdings, Inc. * | 11,700 | 565,344 | ||||||
Stamps.com, Inc. * | 5,827 | 215,016 | ||||||
StarTek, Inc. * | 3,900 | 29,328 | ||||||
support.com, Inc. * | 18,400 | 39,192 | ||||||
Sykes Enterprises, Inc. * | 11,026 | 237,500 | ||||||
Symantec Corp. | 121,873 | 3,024,888 | ||||||
Synchronoss Technologies, Inc. * | 8,100 | 418,527 | ||||||
Synopsys, Inc. * | 28,084 | 1,150,882 | ||||||
Syntel, Inc. * | 4,300 | 372,423 | ||||||
Tableau Software, Inc., Class A * | 5,742 | 474,232 | ||||||
Take-Two Interactive Software, Inc. * | 12,900 | 341,205 | ||||||
Tangoe, Inc. * | 8,200 | 120,294 | ||||||
TeleCommunication Systems, Inc., Class A * | 10,800 | 31,104 | ||||||
TeleTech Holdings, Inc. * | 9,100 | 234,871 | ||||||
Teradata Corp. * | 27,000 | 1,142,640 | ||||||
Textura, Corp. *(c) | 6,941 | 184,908 | ||||||
The Hackett Group, Inc. | 7,200 | 50,472 |
58 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Ultimate Software Group, Inc. * | 4,600 | 692,346 | ||||||
The Western Union Co. | 90,332 | 1,532,031 | ||||||
TIBCO Software, Inc. * | 31,400 | 733,818 | ||||||
TiVo, Inc. * | 17,800 | 232,290 | ||||||
Total System Services, Inc. | 27,404 | 925,981 | ||||||
Trulia, Inc. *(c) | 5,400 | 251,910 | ||||||
Twitter, Inc. * | 87,600 | 3,632,772 | ||||||
Tyler Technologies, Inc. * | 4,700 | 526,024 | ||||||
Unisys Corp. * | 6,200 | 158,968 | ||||||
United Online, Inc. | 2,478 | 27,803 | ||||||
Unwired Planet, Inc. * | 7,771 | 12,045 | ||||||
Vantiv, Inc., Class A * | 24,900 | 769,908 | ||||||
VeriFone Systems, Inc. * | 18,000 | 670,680 | ||||||
Verint Systems, Inc. * | 9,510 | 546,730 | ||||||
VeriSign, Inc. * | 22,275 | 1,331,154 | ||||||
VirnetX Holding Corp. *(c) | 10,600 | 62,222 | ||||||
Virtusa Corp. * | 4,700 | 192,606 | ||||||
Visa, Inc., Class A | 88,601 | 21,390,940 | ||||||
VMware, Inc., Class A * | 17,100 | 1,429,047 | ||||||
Web.com Group, Inc. * | 8,923 | 183,189 | ||||||
WebMD Health Corp. * | 7,074 | 301,918 | ||||||
WEX, Inc. * | 6,400 | 726,784 | ||||||
Workday, Inc., Class A * | 16,500 | 1,575,420 | ||||||
Xerox Corp. | 186,756 | 2,480,120 | ||||||
Yahoo! Inc. * | 164,044 | 7,554,226 | ||||||
Yelp, Inc. * | 9,300 | 558,000 | ||||||
Zillow, Inc., Class A * | 4,500 | 489,285 | ||||||
Zynga, Inc., Class A * | 127,000 | 323,850 | ||||||
408,910,753 | ||||||||
Technology Hardware & Equipment 6.1% | ||||||||
3D Systems Corp. *(c) | 18,800 | 710,640 | ||||||
ADTRAN, Inc. | 9,100 | 193,011 | ||||||
Agilysys, Inc. * | 8,460 | 95,598 | ||||||
Amphenol Corp., Class A | 54,800 | 2,771,784 | ||||||
Anixter International, Inc. | 4,000 | 340,680 | ||||||
Apple, Inc. | 1,071,762 | 115,750,296 | ||||||
ARRIS Group, Inc. * | 24,075 | 722,731 | ||||||
Arrow Electronics, Inc. * | 18,532 | 1,053,730 | ||||||
Aruba Networks, Inc. * | 15,700 | 338,806 | ||||||
Aviat Networks, Inc. * | 18,877 | 33,224 | ||||||
Avnet, Inc. | 22,588 | 976,931 | ||||||
AVX Corp. | 14,000 | 202,160 | ||||||
Badger Meter, Inc. | 4,000 | 227,680 | ||||||
Belden, Inc. | 6,900 | 491,211 | ||||||
Benchmark Electronics, Inc. * | 7,830 | 185,728 | ||||||
Black Box Corp. | 4,100 | 90,159 | ||||||
Brocade Communications Systems, Inc. | 73,835 | 792,250 | ||||||
CalAmp Corp. * | 4,000 | 77,120 | ||||||
CDW Corp. | 18,400 | 567,456 | ||||||
Checkpoint Systems, Inc. * | 7,100 | 94,146 | ||||||
Ciena Corp. * | 17,970 | 301,177 | ||||||
Cisco Systems, Inc. | 918,640 | 22,479,121 | ||||||
Cognex Corp. * | 14,800 | 585,488 | ||||||
Coherent, Inc. * | 4,100 | 267,115 | ||||||
CommScope Holding Co., Inc. * | 20,082 | 432,566 | ||||||
Comtech Telecommunications Corp. | 4,175 | 158,942 | ||||||
Corning, Inc. | 239,007 | 4,882,913 | ||||||
Cray, Inc. * | 7,600 | 263,416 | ||||||
CTS Corp. | 8,800 | 161,920 | ||||||
Daktronics, Inc. | 8,700 | 115,797 | ||||||
Diebold, Inc. | 12,900 | 457,047 | ||||||
Digi International, Inc. * | 9,100 | 75,348 | ||||||
Dolby Laboratories, Inc., Class A | 8,800 | 368,896 | ||||||
DTS, Inc. * | 4,300 | 128,054 | ||||||
Echelon Corp. * | 7,200 | 15,120 | ||||||
EchoStar Corp., Class A * | 6,740 | 314,960 | ||||||
Electro Rent Corp. | 7,100 | 108,204 | ||||||
Electro Scientific Industries, Inc. | 9,900 | 70,290 | ||||||
Electronics for Imaging, Inc. * | 6,400 | 292,608 | ||||||
EMC Corp. | 364,199 | 10,463,437 | ||||||
Emulex Corp. * | 14,100 | 79,806 | ||||||
Extreme Networks, Inc. * | 27,500 | 98,725 | ||||||
F5 Networks, Inc. * | 13,100 | 1,611,038 | ||||||
Fabrinet * | 11,108 | 202,277 | ||||||
FARO Technologies, Inc. * | 3,000 | 168,000 | ||||||
FEI Co. | 6,600 | 556,248 | ||||||
Finisar Corp. * | 15,800 | 264,176 | ||||||
FLIR Systems, Inc. | 26,100 | 875,133 | ||||||
Frequency Electronics, Inc. * | 500 | 5,675 | ||||||
Harmonic, Inc. * | 20,042 | 133,680 | ||||||
Harris Corp. | 19,178 | 1,334,789 | ||||||
Hewlett-Packard Co. | 333,236 | 11,956,508 | ||||||
Hutchinson Technology, Inc. * | 6,000 | 21,420 | ||||||
I.D. Systems, Inc. * | 5,500 | 41,250 | ||||||
Identiv, Inc. * | 120 | 1,122 | ||||||
II-VI, Inc. * | 13,000 | 175,370 | ||||||
Imation Corp. * | 5,500 | 16,115 | ||||||
Immersion Corp. * | 4,300 | 36,206 | ||||||
Infinera Corp. * | 27,300 | 396,669 | ||||||
Ingram Micro, Inc., Class A * | 25,500 | 684,420 | ||||||
Insight Enterprises, Inc. * | 8,950 | 203,612 | ||||||
Intellicheck Mobilisa, Inc. * | 62 | 232 | ||||||
InterDigital, Inc. | 6,700 | 331,181 | ||||||
InvenSense, Inc. *(c) | 8,900 | 144,269 | ||||||
IPG Photonics Corp. * | 5,700 | 418,437 | ||||||
Itron, Inc. * | 5,700 | 221,901 | ||||||
Ixia * | 14,900 | 143,487 | ||||||
Jabil Circuit, Inc. | 35,300 | 739,535 | ||||||
JDS Uniphase Corp. * | 44,553 | 599,683 | ||||||
Juniper Networks, Inc. | 84,165 | 1,773,357 | ||||||
Knowles Corp. * | 13,900 | 270,494 | ||||||
Lexmark International, Inc., Class A | 10,900 | 470,444 | ||||||
LightPath Technologies, Inc., Class A * | 75 | 102 | ||||||
Littelfuse, Inc. | 3,700 | 360,898 | ||||||
Maxwell Technologies, Inc. * | 7,700 | 89,782 | ||||||
Mercury Systems, Inc. * | 7,800 | 109,044 | ||||||
Methode Electronics, Inc. | 9,500 | 374,110 | ||||||
MOCON, Inc. | 600 | 9,258 | ||||||
Motorola Solutions, Inc. | 39,833 | 2,569,228 | ||||||
MTS Systems Corp. | 3,781 | 249,584 | ||||||
Multi-Fineline Electronix, Inc. * | 5,700 | 57,855 | ||||||
National Instruments Corp. | 16,112 | 510,428 | ||||||
NCR Corp. * | 27,500 | 760,925 | ||||||
NetApp, Inc. | 55,900 | 2,392,520 | ||||||
NETGEAR, Inc. * | 6,000 | 204,240 | ||||||
Newport Corp. * | 8,500 | 152,065 | ||||||
Oplink Communications, Inc. | 5,957 | 124,203 |
See financial notes 59
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
OSI Systems, Inc. * | 3,700 | 262,256 | ||||||
Palo Alto Networks, Inc. * | 11,200 | 1,183,840 | ||||||
Park Electrochemical Corp. | 3,600 | 92,880 | ||||||
PC Connection, Inc. | 7,000 | 166,950 | ||||||
PC-Tel, Inc. | 8,900 | 68,530 | ||||||
Plantronics, Inc. | 6,000 | 311,220 | ||||||
Plexus Corp. * | 6,500 | 268,775 | ||||||
Polycom, Inc. * | 22,400 | 292,992 | ||||||
QLogic Corp. * | 17,044 | 201,290 | ||||||
QUALCOMM, Inc. | 301,639 | 23,681,678 | ||||||
Quantum Corp. * | 125,000 | 160,000 | ||||||
Radisys Corp. * | 7,200 | 18,000 | ||||||
Research Frontiers, Inc. * | 2,800 | 13,944 | ||||||
Richardson Electronics Ltd. | 7,300 | 73,073 | ||||||
Riverbed Technology, Inc. * | 26,700 | 507,033 | ||||||
Rofin-Sinar Technologies, Inc. * | 3,800 | 85,082 | ||||||
Rogers Corp. * | 4,200 | 287,154 | ||||||
SanDisk Corp. | 39,500 | 3,718,530 | ||||||
Sanmina Corp. * | 20,900 | 523,963 | ||||||
ScanSource, Inc. * | 6,300 | 240,534 | ||||||
Seagate Technology plc | 61,966 | 3,893,324 | ||||||
Sonus Networks, Inc. * | 79,300 | 275,171 | ||||||
Super Micro Computer, Inc. * | 8,200 | 262,072 | ||||||
SYNNEX Corp. | 3,600 | 249,048 | ||||||
TE Connectivity Ltd. | 76,700 | 4,688,671 | ||||||
Tech Data Corp. * | 5,300 | 316,516 | ||||||
Tessco Technologies, Inc. | 4,025 | 127,794 | ||||||
Transact Technologies, Inc. | 1,500 | 8,595 | ||||||
Trimble Navigation Ltd. * | 46,484 | 1,248,560 | ||||||
TTM Technologies, Inc. * | 11,000 | 76,010 | ||||||
Ubiquiti Networks, Inc. (c) | 3,200 | 114,464 | ||||||
Universal Display Corp. * | 5,800 | 181,424 | ||||||
ViaSat, Inc. * | 6,500 | 407,160 | ||||||
Vishay Intertechnology, Inc. | 18,588 | 251,124 | ||||||
Vishay Precision Group, Inc. * | 5,620 | 95,484 | ||||||
Western Digital Corp. | 38,645 | 3,801,509 | ||||||
Xybernaut Corp. *(b)(g) | 1,400 | — | ||||||
Zebra Technologies Corp., Class A * | 9,575 | 706,156 | ||||||
248,458,067 | ||||||||
Telecommunication Services 2.1% | ||||||||
Alaska Communications Systems Group, Inc. * | 5,000 | 6,750 | ||||||
Alteva * | 1,100 | 7,810 | ||||||
AT&T, Inc. | 929,055 | 32,368,276 | ||||||
Atlantic Tele-Network, Inc. | 3,250 | 218,368 | ||||||
CenturyLink, Inc. | 106,178 | 4,404,263 | ||||||
Cincinnati Bell, Inc. * | 61,468 | 225,588 | ||||||
Cogent Communications Holdings, Inc. | 9,900 | 336,006 | ||||||
Consolidated Communications Holdings, Inc. | 16,757 | 434,006 | ||||||
Frontier Communications Corp. | 165,068 | 1,079,545 | ||||||
General Communication, Inc., Class A * | 10,500 | 123,165 | ||||||
Globalstar, Inc. *(c) | 42,400 | 100,488 | ||||||
inContact, Inc. * | 20,172 | 179,531 | ||||||
Iridium Communications, Inc. * | 11,800 | 112,100 | ||||||
Level 3 Communications, Inc. * | 30,045 | 1,409,411 | ||||||
Lumos Networks Corp. | 1,500 | 25,800 | ||||||
NTELOS Holdings Corp. (c) | 4,500 | 45,360 | ||||||
Premiere Global Services, Inc. * | 11,400 | 119,358 | ||||||
SBA Communications Corp., Class A * | 23,400 | 2,628,522 | ||||||
Shenandoah Telecommunications Co. | 7,100 | 210,089 | ||||||
Spok Holdings, Inc. | 5,500 | 89,320 | ||||||
Sprint Corp. * | 142,805 | 846,834 | ||||||
T-Mobile US, Inc. * | 46,150 | 1,347,118 | ||||||
Telephone & Data Systems, Inc. | 14,222 | 364,652 | ||||||
tw telecom, Inc. * | 25,400 | 1,086,612 | ||||||
United States Cellular Corp. * | 5,400 | 196,668 | ||||||
Verizon Communications, Inc. | 741,369 | 37,253,792 | ||||||
Vonage Holdings Corp. * | 36,400 | 126,672 | ||||||
Windstream Holdings, Inc. (c) | 109,269 | 1,145,139 | ||||||
86,491,243 | ||||||||
Transportation 2.3% | ||||||||
Alaska Air Group, Inc. | 25,000 | 1,330,750 | ||||||
Allegiant Travel Co. | 2,000 | 266,940 | ||||||
AMERCO | 1,000 | 271,120 | ||||||
American Airlines Group, Inc. | 124,897 | 5,164,491 | ||||||
ArcBest Corp. | 4,800 | 185,760 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 6,500 | 239,980 | ||||||
Avis Budget Group, Inc. * | 17,500 | 975,625 | ||||||
C.H. Robinson Worldwide, Inc. | 26,000 | 1,799,460 | ||||||
Celadon Group, Inc. | 8,890 | 172,999 | ||||||
Con-way, Inc. | 11,200 | 485,744 | ||||||
Covenant Transport Group, Inc., Class A * | 3,000 | 62,220 | ||||||
CSX Corp. | 178,300 | 6,352,829 | ||||||
Delta Air Lines, Inc. | 152,011 | 6,115,403 | ||||||
Expeditors International of Washington, Inc. | 33,700 | 1,437,642 | ||||||
FedEx Corp. | 46,663 | 7,811,386 | ||||||
Forward Air Corp. | 4,600 | 220,202 | ||||||
Genesee & Wyoming, Inc., Class A * | 9,000 | 865,800 | ||||||
Hawaiian Holdings, Inc. * | 10,700 | 185,538 | ||||||
Heartland Express, Inc. | 16,241 | 408,299 | ||||||
Hertz Global Holdings, Inc. * | 78,300 | 1,716,336 | ||||||
Hub Group, Inc., Class A * | 7,100 | 257,659 | ||||||
J.B. Hunt Transport Services, Inc. | 15,600 | 1,244,412 | ||||||
JetBlue Airways Corp. * | 45,262 | 522,324 | ||||||
Kansas City Southern | 19,555 | 2,401,159 | ||||||
Kirby Corp. * | 11,100 | 1,227,438 | ||||||
Knight Transportation, Inc. | 14,650 | 428,659 | ||||||
Landstar System, Inc. | 6,600 | 488,466 | ||||||
Marten Transport Ltd. | 9,476 | 185,919 | ||||||
Matson, Inc. | 10,500 | 299,145 | ||||||
Norfolk Southern Corp. | 54,100 | 5,985,624 | ||||||
Old Dominion Freight Line, Inc. * | 12,412 | 904,462 | ||||||
Park-Ohio Holdings Corp. | 3,600 | 191,196 | ||||||
Republic Airways Holdings, Inc. * | 12,500 | 156,500 | ||||||
Roadrunner Transportation Systems, Inc. * | 4,900 | 100,989 | ||||||
Ryder System, Inc. | 9,500 | 840,465 | ||||||
Saia, Inc. * | 4,450 | 218,139 | ||||||
SkyWest, Inc. | 7,000 | 80,640 | ||||||
Southwest Airlines Co. | 124,315 | 4,286,381 |
60 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Spirit Airlines, Inc. * | 14,000 | 1,023,540 | ||||||
Swift Transportation Co. * | 19,000 | 469,300 | ||||||
Union Pacific Corp. | 160,070 | 18,640,152 | ||||||
United Continental Holdings, Inc. * | 66,200 | 3,496,022 | ||||||
United Parcel Service, Inc., Class B | 126,685 | 13,290,523 | ||||||
Universal Truckload Services, Inc. | 3,300 | 86,856 | ||||||
UTI Worldwide, Inc. * | 14,600 | 159,578 | ||||||
Werner Enterprises, Inc. | 10,032 | 276,281 | ||||||
Wesco Aircraft Holdings, Inc. * | 13,500 | 239,625 | ||||||
XPO Logistics, Inc. * | 11,710 | 467,463 | ||||||
YRC Worldwide, Inc. * | 8,600 | 184,384 | ||||||
94,221,825 | ||||||||
Utilities 3.2% | ||||||||
AES Corp. | 118,796 | 1,671,460 | ||||||
AGL Resources, Inc. | 21,529 | 1,160,628 | ||||||
ALLETE, Inc. | 5,233 | 273,372 | ||||||
Alliant Energy Corp. | 18,300 | 1,132,953 | ||||||
Ameren Corp. | 43,176 | 1,828,072 | ||||||
American DG Energy, Inc. *(c) | 11,400 | 10,260 | ||||||
American Electric Power Co., Inc. | 86,320 | 5,035,909 | ||||||
American States Water Co. | 9,600 | 343,488 | ||||||
American Water Works Co., Inc. | 32,200 | 1,718,514 | ||||||
Aqua America, Inc. | 29,167 | 764,175 | ||||||
Artesian Resources Corp., Class A | 4,000 | 89,080 | ||||||
Atmos Energy Corp. | 17,400 | 922,200 | ||||||
Avista Corp. | 7,800 | 276,510 | ||||||
Black Hills Corp. | 7,700 | 421,421 | ||||||
Cadiz, Inc. *(c) | 6,356 | 63,306 | ||||||
California Water Service Group | 11,300 | 294,139 | ||||||
Calpine Corp. * | 65,100 | 1,485,582 | ||||||
CenterPoint Energy, Inc. | 77,000 | 1,890,350 | ||||||
Chesapeake Utilities Corp. | 2,770 | 134,151 | ||||||
Cleco Corp. | 11,700 | 628,992 | ||||||
CMS Energy Corp. | 56,959 | 1,860,851 | ||||||
Connecticut Water Service, Inc. | 5,100 | 189,567 | ||||||
Consolidated Edison, Inc. | 55,510 | 3,517,114 | ||||||
Delta Natural Gas Co., Inc. | 1,291 | 26,749 | ||||||
Dominion Resources, Inc. | 105,865 | 7,548,174 | ||||||
DTE Energy Co. | 30,948 | 2,542,688 | ||||||
Duke Energy Corp. | 126,250 | 10,371,437 | ||||||
Dynegy, Inc. * | 17,000 | 518,500 | ||||||
Edison International | 56,210 | 3,517,622 | ||||||
El Paso Electric Co. | 5,300 | 200,552 | ||||||
Entergy Corp. | 31,593 | 2,654,444 | ||||||
Exelon Corp. | 150,569 | 5,509,320 | ||||||
FirstEnergy Corp. | 72,856 | 2,720,443 | ||||||
Genie Energy Ltd., Class B * | 12,800 | 92,800 | ||||||
Great Plains Energy, Inc. | 25,341 | 682,433 | ||||||
Hawaiian Electric Industries, Inc. (c) | 19,300 | 543,488 | ||||||
IDACORP, Inc. | 9,800 | 619,654 | ||||||
Integrys Energy Group, Inc. | 12,540 | 911,407 | ||||||
ITC Holdings Corp. | 25,800 | 1,021,938 | ||||||
MDU Resources Group, Inc. | 34,325 | 967,278 | ||||||
MGE Energy, Inc. | 4,950 | 220,126 | ||||||
Middlesex Water Co. | 9,400 | 211,970 | ||||||
National Fuel Gas Co. | 20,700 | 1,433,061 | ||||||
New Jersey Resources Corp. | 6,225 | 364,038 | ||||||
NextEra Energy, Inc. | 79,072 | 7,924,596 | ||||||
NiSource, Inc. | 55,764 | 2,345,434 | ||||||
Northeast Utilities | 55,336 | 2,730,832 | ||||||
Northwest Natural Gas Co. | 6,300 | 295,659 | ||||||
NorthWestern Corp. | 7,100 | 375,164 | ||||||
NRG Energy, Inc. | 63,356 | 1,899,413 | ||||||
NRG Yield, Inc., Class A | 8,300 | 414,751 | ||||||
OGE Energy Corp. | 41,200 | 1,536,348 | ||||||
ONE Gas, Inc. | 8,525 | 323,524 | ||||||
Ormat Technologies, Inc. | 8,600 | 248,970 | ||||||
Otter Tail Corp. | 7,800 | 241,800 | ||||||
Pattern Energy Group, Inc. | 6,400 | 184,192 | ||||||
Pepco Holdings, Inc. | 48,400 | 1,323,256 | ||||||
PG&E Corp. | 86,300 | 4,342,616 | ||||||
Piedmont Natural Gas Co., Inc. | 12,300 | 467,523 | ||||||
Pinnacle West Capital Corp. | 18,200 | 1,118,754 | ||||||
PNM Resources, Inc. | 11,200 | 323,120 | ||||||
Portland General Electric Co. | 10,900 | 396,869 | ||||||
PPL Corp. | 116,800 | 4,086,832 | ||||||
Public Service Enterprise Group, Inc. | 92,400 | 3,817,044 | ||||||
Pure Cycle Corp. * | 8,000 | 48,000 | ||||||
Questar Corp. | 28,900 | 696,779 | ||||||
SCANA Corp. | 23,205 | 1,273,722 | ||||||
Sempra Energy | 42,496 | 4,674,560 | ||||||
SJW Corp. | 4,470 | 142,861 | ||||||
South Jersey Industries, Inc. | 4,200 | 246,288 | ||||||
Southwest Gas Corp. | 6,500 | 377,585 | ||||||
TECO Energy, Inc. | 41,000 | 804,010 | ||||||
The Empire District Electric Co. | 11,200 | 318,528 | ||||||
The Laclede Group, Inc. | 5,800 | 294,466 | ||||||
The Southern Co. | 163,921 | 7,599,378 | ||||||
UGI Corp. | 27,900 | 1,051,551 | ||||||
UIL Holdings Corp. | 11,166 | 459,369 | ||||||
Unitil Corp. | 7,200 | 250,848 | ||||||
Vectren Corp. | 15,266 | 686,207 | ||||||
Westar Energy, Inc. | 21,000 | 794,010 | ||||||
WGL Holdings, Inc. | 7,300 | 343,100 | ||||||
Wisconsin Energy Corp. | 38,200 | 1,897,012 | ||||||
Xcel Energy, Inc. | 87,208 | 2,918,852 | ||||||
York Water Co. | 6,100 | 134,078 | ||||||
127,798,117 | ||||||||
Total Common Stock | ||||||||
(Cost $2,419,182,444) | 3,996,962,109 | |||||||
Rights 0.0% of net assets | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
FRD Acquisition Co. CVR *(b)(g) | 8,700 | — | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Gerber Scientific, Inc. CVR *(b)(g) | 8,900 | — | ||||||
Telecommunication Services 0.0% | ||||||||
Contra Leap Wireless CVR *(b)(g) | 13,000 | 32,760 | ||||||
Total Rights | ||||||||
(Cost $32,982) | 32,760 | |||||||
See financial notes 61
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Warrants 0.0% of net assets | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. *(b)(g) | 2,293 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
Other Investment Company 0.7% of net assets | ||||||||
Securities Lending Collateral 0.7% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 26,162,578 | 26,162,578 | ||||||
Total Other Investment Company | ||||||||
(Cost $26,162,578) | 26,162,578 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.1% of net assets | ||||||||
Time Deposits 2.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
0.03%, 11/03/14 | 39,996,785 | 39,996,785 | ||||||
DNB | ||||||||
0.03%, 11/03/14 | 39,996,785 | 39,996,785 | ||||||
Sumitomo Mitsui Banking Corp. | ||||||||
0.03%, 11/03/14 | 2,731,828 | 2,731,828 | ||||||
82,725,398 | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (d)(e) | 100,000 | 100,000 | ||||||
0.01%, 12/18/14 (d)(e) | 3,500,000 | 3,499,943 | ||||||
3,599,943 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $86,325,341) | 86,325,341 | |||||||
End of Investments. |
At 10/31/14 tax basis cost of the fund’s investments was $2,549,856,868 and the unrealized appreciation and depreciation were $1,634,592,191 and ($74,966,271), respectively, with a net unrealized appreciation of $1,559,625,920.
* | 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 $32,760 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $26,055,558. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. | |
(g) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
CVR — | Contingent Value Rights | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/19/14 | 60 | 7,026,000 | 398,936 | |||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 410 | 41,233,700 | 1,834,405 | |||||||||
Net Unrealized Appreciation | 2,233,341 | |||||||||||
62 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
�� | ||||||||||||
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
94 | .8% | Common Stock | 2,082,756,449 | 2,557,901,605 | ||||||||
0 | .6% | Preferred Stock | 12,000,924 | 14,597,344 | ||||||||
0 | .0% | Rights | 463,454 | 458,169 | ||||||||
0 | .2% | Other Investment Company | 6,284,134 | 6,284,134 | ||||||||
3 | .8% | Short-Term Investments | 102,482,807 | 102,482,807 | ||||||||
99 | .4% | Total Investments | 2,203,987,768 | 2,681,724,059 | ||||||||
0 | .6% | Other Assets and Liabilities, Net | 17,421,971 | |||||||||
100 | .0% | Net Assets | 2,699,146,030 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 94.8% of net assets | ||||||||
Australia 7.7% | ||||||||
Banks 2.8% | ||||||||
Australia & New Zealand Banking Group Ltd. | 554,974 | 16,421,997 | ||||||
Bank of Queensland Ltd. | 74,259 | 825,521 | ||||||
Bendigo & Adelaide Bank Ltd. | 82,972 | 911,192 | ||||||
Commonwealth Bank of Australia | 327,430 | 23,283,357 | ||||||
National Australia Bank Ltd. | 476,014 | 14,725,852 | ||||||
Westpac Banking Corp. | 627,984 | 19,275,505 | ||||||
75,443,424 | ||||||||
Capital Goods 0.0% | ||||||||
Leighton Holdings Ltd. | 18,875 | 367,475 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
ALS Ltd. | 76,848 | 380,581 | ||||||
Brambles Ltd. | 306,935 | 2,581,579 | ||||||
Seek Ltd. | 62,241 | 913,379 | ||||||
3,875,539 | ||||||||
Consumer Services 0.1% | ||||||||
Crown Resorts Ltd. | 71,852 | 921,619 | ||||||
Flight Centre Travel Group Ltd. | 11,202 | 415,647 | ||||||
Tabcorp Holdings Ltd. | 145,924 | 524,183 | ||||||
Tatts Group Ltd. | 301,585 | 923,178 | ||||||
2,784,627 | ||||||||
Diversified Financials 0.2% | ||||||||
ASX Ltd. | 39,334 | 1,247,962 | ||||||
Macquarie Group Ltd. | 58,316 | 3,151,629 | ||||||
4,399,591 | ||||||||
Energy 0.4% | ||||||||
Caltex Australia Ltd. | 27,417 | 755,151 | ||||||
Origin Energy Ltd. | 221,297 | 2,780,092 | ||||||
Santos Ltd. | 191,705 | 2,196,796 | ||||||
Woodside Petroleum Ltd. | 148,535 | 5,276,014 | ||||||
WorleyParsons Ltd. | 40,513 | 483,553 | ||||||
11,491,606 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
Metcash Ltd. | 194,976 | 486,967 | ||||||
Wesfarmers Ltd. | 231,617 | 9,013,998 | ||||||
Woolworths Ltd. | 254,439 | 8,074,763 | ||||||
17,575,728 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Coca-Cola Amatil Ltd. | 120,828 | 975,005 | ||||||
Treasury Wine Estates Ltd. | 125,835 | 513,779 | ||||||
1,488,784 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Cochlear Ltd. | 11,235 | 728,162 | ||||||
Ramsay Health Care Ltd. | 27,118 | 1,253,621 | ||||||
Sonic Healthcare Ltd. | 76,797 | 1,270,894 | ||||||
3,252,677 | ||||||||
Insurance 0.4% | ||||||||
AMP Ltd. | 596,867 | 3,078,057 | ||||||
Insurance Australia Group Ltd. | 458,689 | 2,652,375 | ||||||
QBE Insurance Group Ltd. | 268,084 | 2,723,171 | ||||||
Suncorp Group Ltd. | 256,526 | 3,337,974 | ||||||
11,791,577 | ||||||||
Materials 1.3% | ||||||||
Alumina Ltd. * | 513,146 | 741,645 | ||||||
Amcor Ltd. | 238,043 | 2,472,513 | ||||||
BHP Billiton Ltd. | 648,996 | 19,415,901 | ||||||
Boral Ltd. | 145,846 | 640,580 | ||||||
Fortescue Metals Group Ltd. | 325,514 | 1,004,646 | ||||||
Iluka Resources Ltd. | 89,392 | 573,871 | ||||||
Incitec Pivot Ltd. | 341,272 | 875,736 | ||||||
James Hardie Industries plc CDI | 92,540 | 987,091 | ||||||
Newcrest Mining Ltd. * | 155,494 | 1,275,299 | ||||||
Orica Ltd. | 75,711 | 1,382,046 | ||||||
Rio Tinto Ltd. | 86,956 | 4,643,303 | ||||||
34,012,631 | ||||||||
Media 0.0% | ||||||||
REA Group Ltd. | 11,698 | 468,401 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
CSL Ltd. | 95,912 | 6,771,664 | ||||||
Real Estate 0.6% | ||||||||
CFS Retail Property Trust Group | 430,225 | 800,215 | ||||||
Dexus Property Group | 1,097,828 | 1,173,365 | ||||||
Federation Centres * | 302,594 | 726,648 | ||||||
Goodman Group | 346,477 | 1,691,568 | ||||||
Lend Lease Group | 109,864 | 1,532,275 | ||||||
Mirvac Group | 745,063 | 1,182,051 | ||||||
Scentre Group * | 1,075,905 | 3,432,070 | ||||||
Stockland | 463,620 | 1,733,372 | ||||||
The GPT Group | 342,776 | 1,245,947 |
See financial notes 63
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Westfield Corp. | 401,102 | 2,818,541 | ||||||
16,336,052 | ||||||||
Retailing 0.0% | ||||||||
Harvey Norman Holdings Ltd. | 91,526 | 307,781 | ||||||
Software & Services 0.0% | ||||||||
Computershare Ltd. | 97,586 | 1,059,068 | ||||||
Telecommunication Services 0.2% | ||||||||
Telstra Corp., Ltd. | 888,823 | 4,422,919 | ||||||
TPG Telecom Ltd. | 51,641 | 334,374 | ||||||
4,757,293 | ||||||||
Transportation 0.3% | ||||||||
Asciano Ltd. | 194,653 | 1,076,715 | ||||||
Aurizon Holdings Ltd. | 419,843 | 1,741,388 | ||||||
Qantas Airways Ltd. * | 268,959 | 401,855 | ||||||
Sydney Airport | 222,267 | 864,114 | ||||||
Toll Holdings Ltd. | 126,753 | 635,059 | ||||||
Transurban Group | 357,437 | 2,559,929 | ||||||
7,279,060 | ||||||||
Utilities 0.1% | ||||||||
AGL Energy Ltd. | 135,764 | 1,627,476 | ||||||
APA Group | 170,333 | 1,184,211 | ||||||
AusNet Services | 290,894 | 351,662 | ||||||
3,163,349 | ||||||||
206,626,327 | ||||||||
Austria 0.2% | ||||||||
Banks 0.1% | ||||||||
Erste Group Bank AG | 57,007 | 1,454,678 | ||||||
Raiffeisen Bank International AG | 22,302 | 477,526 | ||||||
1,932,204 | ||||||||
Capital Goods 0.0% | ||||||||
ANDRITZ AG | 13,972 | 675,186 | ||||||
Energy 0.1% | ||||||||
OMV AG | 29,082 | 914,136 | ||||||
Insurance 0.0% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 6,791 | 326,924 | ||||||
Materials 0.0% | ||||||||
Voestalpine AG | 21,074 | 844,180 | ||||||
Real Estate 0.0% | ||||||||
IMMOFINANZ AG * | 186,618 | 564,970 | ||||||
5,257,600 | ||||||||
Belgium 1.2% | ||||||||
Banks 0.1% | ||||||||
KBC Groep N.V. * | 50,094 | 2,690,836 | ||||||
Diversified Financials 0.1% | ||||||||
Groupe Bruxelles Lambert S.A. | 16,230 | 1,450,433 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Colruyt S.A. | 14,318 | 652,116 | ||||||
Delhaize Group S.A. | 20,715 | 1,416,385 | ||||||
2,068,501 | ||||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Anheuser-Busch InBev N.V. | 162,156 | 17,982,187 | ||||||
Insurance 0.1% | ||||||||
Ageas | 44,569 | 1,489,849 | ||||||
Materials 0.1% | ||||||||
Solvay S.A. | 11,674 | 1,593,731 | ||||||
Umicore S.A. | 22,068 | 866,135 | ||||||
2,459,866 | ||||||||
Media 0.0% | ||||||||
Telenet Group Holding N.V. * | 11,172 | 631,759 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
UCB S.A. | 25,089 | 2,023,334 | ||||||
Telecommunication Services 0.0% | ||||||||
Belgacom S.A. | 31,036 | 1,172,184 | ||||||
31,968,949 | ||||||||
Denmark 1.5% | ||||||||
Banks 0.1% | ||||||||
Danske Bank A/S | 131,494 | 3,610,863 | ||||||
Capital Goods 0.1% | ||||||||
Vestas Wind Systems A/S * | 44,223 | 1,475,941 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Pandora A/S | 23,154 | 1,952,148 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Carlsberg A/S, Class B | 21,031 | 1,854,905 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Coloplast A/S, Class B | 22,623 | 1,971,849 | ||||||
William Demant Holding A/S * | 4,937 | 374,183 | ||||||
2,346,032 | ||||||||
Insurance 0.0% | ||||||||
Tryg A/S | 4,412 | 477,444 | ||||||
Materials 0.1% | ||||||||
Novozymes A/S, B Shares | 47,084 | 2,180,304 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Novo Nordisk A/S, Class B | 406,216 | 18,362,067 | ||||||
Telecommunication Services 0.0% | ||||||||
TDC A/S | 156,148 | 1,192,511 | ||||||
Transportation 0.2% | ||||||||
AP Moeller - Maersk A/S, Series A | 755 | 1,717,590 | ||||||
AP Moeller - Maersk A/S, Series B | 1,448 | 3,379,018 | ||||||
DSV A/S | 34,593 | 1,035,409 | ||||||
6,132,017 | ||||||||
39,584,232 | ||||||||
Finland 0.8% | ||||||||
Automobiles & Components 0.0% | ||||||||
Nokian Renkaat Oyj | 24,973 | 705,499 | ||||||
Capital Goods 0.2% | ||||||||
Kone Oyj, Class B | 64,342 | 2,771,078 | ||||||
Metso Oyj | 23,915 | 781,354 | ||||||
Wartsila Oyj Abp | 30,126 | 1,396,876 | ||||||
4,949,308 |
64 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.0% | ||||||||
Neste Oil Oyj | 25,176 | 544,226 | ||||||
Insurance 0.2% | ||||||||
Sampo Oyj, A Shares | 89,828 | 4,304,324 | ||||||
Materials 0.1% | ||||||||
Stora Enso Oyj, R Shares | 112,954 | 932,786 | ||||||
UPM-Kymmene Oyj | 105,742 | 1,677,334 | ||||||
2,610,120 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 18,887 | 642,377 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
Nokia Oyj | 754,332 | 6,303,119 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 27,044 | 742,907 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 87,203 | 2,022,393 | ||||||
22,824,273 | ||||||||
France 9.1% | ||||||||
Automobiles & Components 0.3% | ||||||||
Compagnie Generale des Etablissements Michelin | 37,389 | 3,247,494 | ||||||
Peugeot S.A. * | 78,957 | 938,366 | ||||||
Renault S.A. | 38,725 | 2,880,608 | ||||||
Valeo S.A. | 14,879 | 1,668,391 | ||||||
8,734,859 | ||||||||
Banks 0.9% | ||||||||
BNP Paribas S.A. | 213,876 | 13,440,408 | ||||||
Credit Agricole S.A. | 202,573 | 2,997,730 | ||||||
Natixis S.A. | 191,306 | 1,316,850 | ||||||
Societe Generale S.A. | 144,072 | 6,942,978 | ||||||
24,697,966 | ||||||||
Capital Goods 1.4% | ||||||||
Airbus Group N.V. | 117,553 | 7,018,039 | ||||||
Alstom S.A. * | 43,841 | 1,530,194 | ||||||
Bouygues S.A. | 37,362 | 1,291,752 | ||||||
Compagnie de Saint-Gobain | 89,331 | 3,839,879 | ||||||
Legrand S.A. | 53,903 | 2,901,126 | ||||||
Rexel S.A. | 55,601 | 934,600 | ||||||
Safran S.A. | 54,575 | 3,456,426 | ||||||
Schneider Electric SE | 104,402 | 8,225,427 | ||||||
Thales S.A. | 18,499 | 918,660 | ||||||
Vallourec S.A. | 22,551 | 824,173 | ||||||
Vinci S.A. | 96,526 | 5,509,534 | ||||||
Zodiac Aerospace | 37,994 | 1,159,302 | ||||||
37,609,112 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Bureau Veritas S.A. | 44,689 | 1,105,334 | ||||||
Edenred | 42,327 | 1,173,400 | ||||||
Societe BIC S.A. | 5,949 | 742,111 | ||||||
3,020,845 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Christian Dior S.A. | 10,744 | 1,901,173 | ||||||
Kering | 15,147 | 2,923,140 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 56,694 | 9,623,464 | ||||||
14,447,777 | ||||||||
Consumer Services 0.1% | ||||||||
Accor S.A. | 34,239 | 1,438,459 | ||||||
Sodexo | 18,760 | 1,809,833 | ||||||
3,248,292 | ||||||||
Diversified Financials 0.0% | ||||||||
Eurazeo S.A. | 6,764 | 452,728 | ||||||
Wendel S.A. | 7,013 | 773,252 | ||||||
1,225,980 | ||||||||
Energy 1.0% | ||||||||
Technip S.A. | 20,915 | 1,511,117 | ||||||
Total S.A. | 431,824 | 25,781,299 | ||||||
27,292,416 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Carrefour S.A. | 127,848 | 3,747,264 | ||||||
Casino Guichard Perrachon S.A. | 11,366 | 1,165,394 | ||||||
4,912,658 | ||||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Danone S.A. | 115,666 | 7,903,752 | ||||||
Pernod-Ricard S.A. | 42,469 | 4,837,722 | ||||||
Remy Cointreau S.A. | 5,148 | 366,369 | ||||||
13,107,843 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Essilor International S.A. | 40,748 | 4,499,474 | ||||||
Household & Personal Products 0.3% | ||||||||
L’Oreal S.A. | 51,174 | 8,031,053 | ||||||
Insurance 0.4% | ||||||||
AXA S.A. | 368,197 | 8,504,807 | ||||||
CNP Assurances | 33,282 | 622,212 | ||||||
SCOR SE | 29,475 | 903,186 | ||||||
10,030,205 | ||||||||
Materials 0.5% | ||||||||
Air Liquide S.A. | 68,797 | 8,304,885 | ||||||
ArcelorMittal | 200,160 | 2,629,337 | ||||||
Arkema S.A. | 11,207 | 691,718 | ||||||
Imerys S.A. | 6,455 | 463,197 | ||||||
Lafarge S.A. | 37,899 | 2,630,202 | ||||||
14,719,339 | ||||||||
Media 0.3% | ||||||||
Eutelsat Communications S.A. | 31,815 | 1,031,406 | ||||||
JC Decaux S.A. | 12,016 | 398,821 | ||||||
Lagardere S.C.A. | 22,380 | 544,647 | ||||||
Numericable Group S.A. * | 19,600 | 724,571 | ||||||
Publicis Groupe S.A. | 36,299 | 2,517,619 | ||||||
SES S.A. | 60,353 | 2,083,644 | ||||||
7,300,708 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.8% | ||||||||
Sanofi | 239,808 | 21,760,185 | ||||||
Real Estate 0.3% | ||||||||
Fonciere Des Regions | 5,116 | 470,342 | ||||||
Gecina S.A. | 5,754 | 778,743 | ||||||
ICADE | 7,471 | 594,411 | ||||||
Klepierre | 21,704 | 939,390 |
See financial notes 65
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Unibail-Rodamco SE | 19,472 | 4,992,765 | ||||||
7,775,651 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
STMicroelectronics N.V. | 131,708 | 879,775 | ||||||
Software & Services 0.2% | ||||||||
AtoS | 16,304 | 1,126,741 | ||||||
Cap Gemini S.A. | 28,543 | 1,878,019 | ||||||
Dassault Systemes S.A. | 25,211 | 1,598,652 | ||||||
4,603,412 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Alcatel-Lucent * | 554,325 | 1,693,617 | ||||||
Telecommunication Services 0.5% | ||||||||
Iliad S.A. | 5,399 | 1,180,625 | ||||||
Orange S.A. | 370,542 | 5,899,166 | ||||||
Vivendi S.A. * | 243,699 | 5,953,392 | ||||||
13,033,183 | ||||||||
Transportation 0.1% | ||||||||
Aeroports de Paris | 5,551 | 657,039 | ||||||
Bollore S.A. | 1,010 | 478,842 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 95,309 | 1,204,633 | ||||||
2,340,514 | ||||||||
Utilities 0.4% | ||||||||
Electricite de France S.A. | 48,272 | 1,425,394 | ||||||
GDF Suez | 294,853 | 7,159,007 | ||||||
Suez Environnement Co. | 58,460 | 984,892 | ||||||
Veolia Environnement S.A. | 84,256 | 1,399,392 | ||||||
10,968,685 | ||||||||
245,933,549 | ||||||||
Germany 7.8% | ||||||||
Automobiles & Components 1.0% | ||||||||
Bayerische Motoren Werke AG | 66,670 | 7,149,538 | ||||||
Continental AG | 22,033 | 4,339,746 | ||||||
Daimler AG - Reg’d | 194,315 | 15,150,542 | ||||||
Volkswagen AG | 6,123 | 1,305,841 | ||||||
27,945,667 | ||||||||
Banks 0.1% | ||||||||
Commerzbank AG * | 193,720 | 2,929,140 | ||||||
Capital Goods 0.9% | ||||||||
Brenntag AG | 30,881 | 1,498,395 | ||||||
GEA Group AG | 36,792 | 1,697,128 | ||||||
HOCHTIEF AG | 5,074 | 375,470 | ||||||
MAN SE | 7,010 | 798,875 | ||||||
OSRAM Licht AG * | 18,910 | 664,288 | ||||||
Siemens AG - Reg’d | 160,263 | 18,076,612 | ||||||
23,110,768 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
adidas AG | 41,747 | 3,041,936 | ||||||
Hugo Boss AG | 5,945 | 789,844 | ||||||
3,831,780 | ||||||||
Diversified Financials 0.4% | ||||||||
Deutsche Bank AG - Reg’d | 279,546 | 8,741,789 | ||||||
Deutsche Boerse AG | 39,186 | 2,682,017 | ||||||
11,423,806 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
METRO AG * | 33,291 | 1,061,266 | ||||||
Health Care Equipment & Services 0.3% | ||||||||
Celesio AG | 9,063 | 299,005 | ||||||
Fresenius Medical Care AG & Co. KGaA | 43,388 | 3,184,579 | ||||||
Fresenius SE & Co. KGaA | 75,893 | 3,905,151 | ||||||
7,388,735 | ||||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 19,933 | 1,616,145 | ||||||
Henkel AG & Co. KGaA | 23,300 | 2,120,739 | ||||||
3,736,884 | ||||||||
Insurance 0.8% | ||||||||
Allianz SE - Reg’d | 92,021 | 14,633,375 | ||||||
Hannover Rueck SE | 12,443 | 1,038,584 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 34,549 | 6,802,276 | ||||||
22,474,235 | ||||||||
Materials 1.1% | ||||||||
BASF SE | 185,553 | 16,395,490 | ||||||
HeidelbergCement AG | 28,555 | 1,949,353 | ||||||
K&S AG - Reg’d | 35,779 | 1,002,697 | ||||||
LANXESS AG | 17,844 | 929,429 | ||||||
Linde AG | 37,086 | 6,844,414 | ||||||
ThyssenKrupp AG * | 92,601 | 2,231,830 | ||||||
29,353,213 | ||||||||
Media 0.2% | ||||||||
Axel Springer SE | 6,956 | 382,653 | ||||||
Kabel Deutschland Holding AG * | 4,715 | 639,181 | ||||||
ProSiebenSat.1 Media AG - Reg’d | 43,735 | 1,766,725 | ||||||
RTL Group S.A. | 7,403 | 691,495 | ||||||
Sky Deutschland AG * | 93,330 | 788,387 | ||||||
4,268,441 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.0% | ||||||||
Bayer AG - Reg’d | 166,836 | 23,861,178 | ||||||
Merck KGaA | 26,657 | 2,413,107 | ||||||
QIAGEN N.V. * | 44,554 | 1,047,083 | ||||||
27,321,368 | ||||||||
Real Estate 0.1% | ||||||||
Deutsche Wohnen AG | 58,287 | 1,315,634 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Infineon Technologies AG | 235,567 | 2,295,062 | ||||||
Software & Services 0.5% | ||||||||
SAP SE | 186,573 | 12,712,230 | ||||||
United Internet AG - Reg’d | 24,704 | 968,851 | ||||||
13,681,081 | ||||||||
Telecommunication Services 0.4% | ||||||||
Deutsche Telekom AG - Reg’d | 631,459 | 9,518,181 | ||||||
Telefonica Deutschland Holding AG * | 115,703 | 569,361 | ||||||
10,087,542 |
66 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Transportation 0.3% | ||||||||
Deutsche Lufthansa AG - Reg’d | 43,042 | 637,567 | ||||||
Deutsche Post AG - Reg’d | 194,081 | 6,111,571 | ||||||
Fraport AG Frankfurt Airport Services Worldwide | 7,032 | 435,708 | ||||||
7,184,846 | ||||||||
Utilities 0.4% | ||||||||
E.ON SE | 399,946 | 6,895,107 | ||||||
RWE AG | 97,062 | 3,443,931 | ||||||
10,339,038 | ||||||||
209,748,506 | ||||||||
Hong Kong 3.0% | ||||||||
Banks 0.2% | ||||||||
Bank of East Asia Ltd. | 262,000 | 1,094,133 | ||||||
BOC Hong Kong (Holdings) Ltd. | 762,000 | 2,536,627 | ||||||
Hang Seng Bank Ltd. | 149,536 | 2,533,784 | ||||||
6,164,544 | ||||||||
Capital Goods 0.2% | ||||||||
Hutchison Whampoa Ltd. | 425,370 | 5,393,928 | ||||||
NWS Holdings Ltd. | 321,000 | 600,064 | ||||||
5,993,992 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Li & Fung Ltd. | 1,190,000 | 1,450,298 | ||||||
Techtronic Industries Co., Ltd. | 289,500 | 906,309 | ||||||
Yue Yuen Industrial Holdings Ltd. | 161,000 | 540,474 | ||||||
2,897,081 | ||||||||
Consumer Services 0.4% | ||||||||
Galaxy Entertainment Group Ltd. | 464,000 | 3,172,783 | ||||||
MGM China Holdings Ltd. | 183,200 | 588,951 | ||||||
Sands China Ltd. | 496,400 | 3,096,100 | ||||||
Shangri-La Asia Ltd. | 270,000 | 392,041 | ||||||
SJM Holdings Ltd. | 398,000 | 841,209 | ||||||
Wynn Macau Ltd. | 318,800 | 1,152,496 | ||||||
9,243,580 | ||||||||
Diversified Financials 0.2% | ||||||||
First Pacific Co., Ltd. | 493,250 | 532,319 | ||||||
Hong Kong Exchanges & Clearing Ltd. | 222,118 | 4,923,139 | ||||||
5,455,458 | ||||||||
Insurance 0.5% | ||||||||
AIA Group Ltd. | 2,431,600 | 13,569,361 | ||||||
Real Estate 0.9% | ||||||||
Cheung Kong (Holdings) Ltd. | 277,656 | 4,929,025 | ||||||
Hang Lung Properties Ltd. | 456,000 | 1,423,964 | ||||||
Henderson Land Development Co., Ltd. | 215,490 | 1,455,802 | ||||||
Hysan Development Co., Ltd. | 125,000 | 570,356 | ||||||
Kerry Properties Ltd. | 121,000 | 415,081 | ||||||
New World Development Co., Ltd. | 1,060,666 | 1,333,265 | ||||||
Sino Land Co., Ltd. | 616,000 | 1,018,172 | ||||||
Sun Hung Kai Properties Ltd. | 326,604 | 4,873,291 | ||||||
Swire Pacific Ltd., Class A | 130,090 | 1,706,333 | ||||||
Swire Properties Ltd. | 255,600 | 819,021 | ||||||
The Link REIT | 467,500 | 2,749,178 | ||||||
The Wharf Holdings Ltd. | 300,100 | 2,219,577 | ||||||
Wheelock & Co., Ltd. | 185,000 | 891,722 | ||||||
24,404,787 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
ASM Pacific Technology Ltd. | 53,000 | 583,026 | ||||||
Telecommunication Services 0.0% | ||||||||
HKT Trust & HKT Ltd. | 536,000 | 652,973 | ||||||
PCCW Ltd. | 759,000 | 482,509 | ||||||
1,135,482 | ||||||||
Transportation 0.1% | ||||||||
Cathay Pacific Airways Ltd. | 201,000 | 377,005 | ||||||
MTR Corp., Ltd. | 280,500 | 1,143,734 | ||||||
1,520,739 | ||||||||
Utilities 0.4% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 131,000 | 956,866 | ||||||
CLP Holdings Ltd. | 379,580 | 3,268,608 | ||||||
Hong Kong & China Gas Co., Ltd. | 1,278,197 | 2,984,828 | ||||||
Power Assets Holdings Ltd. | 274,000 | 2,645,568 | ||||||
9,855,870 | ||||||||
80,823,920 | ||||||||
Ireland 0.3% | ||||||||
Banks 0.1% | ||||||||
Bank of Ireland * | 5,414,882 | 2,131,593 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Kerry Group plc, Class A | 31,108 | 2,112,489 | ||||||
Materials 0.1% | ||||||||
CRH plc | 152,611 | 3,385,437 | ||||||
Transportation 0.0% | ||||||||
Ryanair Holdings plc * | 35,363 | 337,036 | ||||||
7,966,555 | ||||||||
Israel 0.5% | ||||||||
Banks 0.1% | ||||||||
Bank Hapoalim B.M. | 202,922 | 1,044,613 | ||||||
Bank Leumi Le-Israel B.M. * | 271,375 | 969,786 | ||||||
Mizrahi Tefahot Bank Ltd. * | 30,973 | 342,872 | ||||||
2,357,271 | ||||||||
Energy 0.0% | ||||||||
Delek Group Ltd. | 790 | 273,064 | ||||||
Materials 0.0% | ||||||||
Israel Chemicals Ltd. | 85,438 | 576,012 | ||||||
The Israel Corp., Ltd. * | 609 | 297,112 | ||||||
873,124 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.4% | ||||||||
Teva Pharmaceutical Industries Ltd. | 171,112 | 9,658,817 | ||||||
Software & Services 0.0% | ||||||||
NICE-Systems Ltd. | 11,048 | 447,912 |
See financial notes 67
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Telecommunication Services 0.0% | ||||||||
Bezeq The Israeli Telecommunication Corp., Ltd. | 399,288 | 682,433 | ||||||
14,292,621 | ||||||||
Italy 2.3% | ||||||||
Automobiles & Components 0.1% | ||||||||
Fiat Chrysler Automobiles N.V. * | 174,410 | 1,951,282 | ||||||
Pirelli & C. S.p.A | 45,863 | 615,011 | ||||||
2,566,293 | ||||||||
Banks 0.6% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. * | 889,313 | 680,423 | ||||||
Banco Popolare SC * | 75,173 | 1,091,980 | ||||||
Intesa Sanpaolo S.p.A. | 2,289,608 | 6,730,895 | ||||||
Intesa Sanpaolo S.p.A. - RSP | 237,906 | 608,274 | ||||||
UniCredit S.p.A. | 884,871 | 6,408,874 | ||||||
Unione di Banche Italiane S.C.p.A. | 171,661 | 1,348,138 | ||||||
16,868,584 | ||||||||
Capital Goods 0.1% | ||||||||
CNH Industrial N.V. * | 185,680 | 1,515,220 | ||||||
Finmeccanica S.p.A. * | 82,641 | 746,777 | ||||||
Prysmian S.p.A. | 39,039 | 676,592 | ||||||
2,938,589 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Luxottica Group S.p.A. | 33,430 | 1,705,187 | ||||||
Diversified Financials 0.1% | ||||||||
Exor S.p.A. | 20,747 | 905,324 | ||||||
Mediobanca S.p.A. | 123,998 | 1,094,424 | ||||||
1,999,748 | ||||||||
Energy 0.5% | ||||||||
Eni S.p.A. | 516,029 | 10,993,943 | ||||||
Saipem S.p.A. * | 56,411 | 883,111 | ||||||
Tenaris S.A. | 95,068 | 1,879,934 | ||||||
13,756,988 | ||||||||
Insurance 0.2% | ||||||||
Assicurazioni Generali S.p.A. | 235,983 | 4,842,474 | ||||||
UnipolSai S.p.A. | 172,787 | 464,579 | ||||||
5,307,053 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telecom Italia S.p.A. * | 1,970,355 | 2,232,966 | ||||||
Telecom Italia S.p.A. - RSP | 1,263,477 | 1,130,486 | ||||||
3,363,452 | ||||||||
Transportation 0.1% | ||||||||
Atlantia S.p.A. | 80,885 | 1,910,277 | ||||||
Utilities 0.4% | ||||||||
Enel Green Power S.p.A. | 369,491 | 908,310 | ||||||
Enel S.p.A. | 1,316,777 | 6,728,623 | ||||||
Snam S.p.A. | 399,473 | 2,160,143 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 300,867 | 1,516,879 | ||||||
11,313,955 | ||||||||
61,730,126 | ||||||||
Japan 20.4% | ||||||||
Automobiles & Components 3.0% | ||||||||
Aisin Seiki Co., Ltd. | 39,100 | 1,302,373 | ||||||
Bridgestone Corp. | 130,457 | 4,359,577 | ||||||
Daihatsu Motor Co., Ltd. | 39,700 | 563,460 | ||||||
Denso Corp. | 97,300 | 4,459,610 | ||||||
Fuji Heavy Industries Ltd. | 117,800 | 3,920,755 | ||||||
Honda Motor Co., Ltd. | 330,239 | 10,557,487 | ||||||
Isuzu Motors Ltd. | 119,000 | 1,552,637 | ||||||
Koito Manufacturing Co., Ltd. | 18,000 | 542,381 | ||||||
Mazda Motor Corp. | 112,100 | 2,648,563 | ||||||
Mitsubishi Motors Corp. | 129,600 | 1,333,479 | ||||||
NGK Spark Plug Co., Ltd. | 38,500 | 1,004,099 | ||||||
NHK Spring Co., Ltd. | 37,000 | 338,636 | ||||||
Nissan Motor Co., Ltd. | 496,896 | 4,532,536 | ||||||
NOK Corp. | 20,800 | 526,957 | ||||||
Stanley Electric Co., Ltd. | 27,000 | 548,926 | ||||||
Sumitomo Electric Industries Ltd. | 153,400 | 2,096,762 | ||||||
Sumitomo Rubber Industries Ltd. | 32,400 | 447,802 | ||||||
Suzuki Motor Corp. | 74,300 | 2,490,424 | ||||||
The Yokohama Rubber Co., Ltd. | 36,000 | 326,792 | ||||||
Toyoda Gosei Co., Ltd. | 11,300 | 217,093 | ||||||
Toyota Industries Corp. | 33,400 | 1,590,383 | ||||||
Toyota Motor Corp. | 556,403 | 33,482,763 | ||||||
Yamaha Motor Co., Ltd. | 51,400 | 972,371 | ||||||
79,815,866 | ||||||||
Banks 1.9% | ||||||||
Aozora Bank Ltd. | 252,000 | 885,756 | ||||||
Fukuoka Financial Group, Inc. | 147,000 | 752,206 | ||||||
Hokuhoku Financial Group, Inc. | 223,000 | 447,980 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 2,576,709 | 15,020,186 | ||||||
Mizuho Financial Group, Inc. | 4,616,534 | 8,412,782 | ||||||
Resona Holdings, Inc. | 455,700 | 2,606,506 | ||||||
Seven Bank Ltd. | 116,700 | 487,386 | ||||||
Shinsei Bank Ltd. | 346,000 | 777,591 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 257,746 | 10,511,631 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 672,000 | 2,743,588 | ||||||
Suruga Bank Ltd. | 34,000 | 710,816 | ||||||
The Bank of Kyoto Ltd. | 63,000 | 545,929 | ||||||
The Bank of Yokohama Ltd. | 245,000 | 1,415,914 | ||||||
The Chiba Bank Ltd. | 141,000 | 1,001,524 | ||||||
The Chugoku Bank Ltd. | 32,500 | 480,368 | ||||||
The Gunma Bank Ltd. | 72,000 | 449,314 | ||||||
The Hachijuni Bank Ltd. | 77,000 | 471,457 | ||||||
The Hiroshima Bank Ltd. | 92,000 | 459,943 | ||||||
The Iyo Bank Ltd. | 46,000 | 491,207 | ||||||
The Joyo Bank Ltd. | 125,000 | 669,332 | ||||||
The Shizuoka Bank Ltd. | 114,000 | 1,177,936 | ||||||
Yamaguchi Financial Group, Inc. | 38,000 | 362,934 | ||||||
50,882,286 | ||||||||
Capital Goods 2.8% | ||||||||
Amada Co., Ltd. | 71,000 | 620,080 | ||||||
Asahi Glass Co., Ltd. | 207,000 | 1,077,369 | ||||||
Chiyoda Corp. | 29,000 | 298,753 |
68 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Daikin Industries Ltd. | 47,100 | 2,944,131 | ||||||
FANUC Corp. | 38,500 | 6,785,077 | ||||||
Fuji Electric Co., Ltd. | 104,000 | 456,921 | ||||||
Hino Motors Ltd. | 50,000 | 731,654 | ||||||
Hitachi Construction Machinery Co., Ltd. | 23,300 | 476,587 | ||||||
IHI Corp. | 288,000 | 1,388,341 | ||||||
ITOCHU Corp. | 303,200 | 3,665,245 | ||||||
JGC Corp. | 41,000 | 1,053,690 | ||||||
JTEKT Corp. | 43,200 | 694,793 | ||||||
Kajima Corp. | 170,000 | 756,424 | ||||||
Kawasaki Heavy Industries Ltd. | 291,000 | 1,143,016 | ||||||
Komatsu Ltd. | 187,609 | 4,429,326 | ||||||
Kubota Corp. | 227,000 | 3,613,387 | ||||||
Kurita Water Industries Ltd. | 18,200 | 392,743 | ||||||
LIXIL Group Corp. | 52,400 | 1,149,151 | ||||||
Mabuchi Motor Co., Ltd. | 4,400 | 380,050 | ||||||
Makita Corp. | 23,300 | 1,304,779 | ||||||
Marubeni Corp. | 325,000 | 2,089,570 | ||||||
Mitsubishi Corp. | 280,300 | 5,496,221 | ||||||
Mitsubishi Electric Corp. | 386,000 | 4,977,002 | ||||||
Mitsubishi Heavy Industries Ltd. | 609,000 | 3,798,963 | ||||||
Mitsui & Co., Ltd. | 350,700 | 5,295,241 | ||||||
Nabtesco Corp. | 22,100 | 534,831 | ||||||
NGK Insulators Ltd. | 54,000 | 1,163,053 | ||||||
Nidec Corp. | 43,500 | 2,874,160 | ||||||
NSK Ltd. | 94,000 | 1,231,220 | ||||||
Obayashi Corp. | 136,000 | 933,321 | ||||||
Seibu Holdings, Inc. | 30,000 | 576,808 | ||||||
Shimizu Corp. | 123,000 | 907,705 | ||||||
SMC Corp. | 11,000 | 3,119,967 | ||||||
Sumitomo Corp. | 232,800 | 2,483,910 | ||||||
Sumitomo Heavy Industries Ltd. | 127,000 | 696,269 | ||||||
Taisei Corp. | 211,000 | 1,173,360 | ||||||
THK Co., Ltd. | 20,700 | 520,664 | ||||||
Toshiba Corp. | 803,178 | 3,546,926 | ||||||
TOTO Ltd. | 53,000 | 598,046 | ||||||
Toyota Tsusho Corp. | 41,300 | 1,041,383 | ||||||
76,420,137 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Dai Nippon Printing Co., Ltd. | 114,000 | 1,123,674 | ||||||
Park24 Co., Ltd. | 18,000 | 272,371 | ||||||
Recruit Holdings Co., Ltd. * | 28,900 | 950,683 | ||||||
Secom Co., Ltd. | 42,400 | 2,612,901 | ||||||
Toppan Printing Co., Ltd. | 112,000 | 762,074 | ||||||
5,721,703 | ||||||||
Consumer Durables & Apparel 0.8% | ||||||||
Asics Corp. | 31,200 | 730,608 | ||||||
Bandai Namco Holdings, Inc. | 36,000 | 893,439 | ||||||
Casio Computer Co., Ltd. (a) | 41,300 | 658,551 | ||||||
Iida Group Holdings Co., Ltd. | 30,100 | 334,476 | ||||||
Nikon Corp. | 70,500 | 965,967 | ||||||
Panasonic Corp. | 441,012 | 5,305,924 | ||||||
Rinnai Corp. | 6,700 | 595,140 | ||||||
Sankyo Co., Ltd. | 11,600 | 422,136 | ||||||
Sega Sammy Holdings, Inc. | 33,800 | 536,930 | ||||||
Sekisui Chemical Co., Ltd. | 87,000 | 1,084,313 | ||||||
Sekisui House Ltd. | 114,800 | 1,427,525 | ||||||
Sharp Corp. * | 310,785 | 782,700 | ||||||
Shimano, Inc. | 16,000 | 2,121,686 | ||||||
Sony Corp. | 208,900 | 4,124,378 | ||||||
Yamaha Corp. | 36,100 | 494,821 | ||||||
20,478,594 | ||||||||
Consumer Services 0.1% | ||||||||
Benesse Holdings, Inc. | 14,200 | 448,071 | ||||||
McDonald’s Holdings Co., Ltd. (a) | 15,000 | 366,112 | ||||||
Oriental Land Co., Ltd. | 9,900 | 2,117,007 | ||||||
2,931,190 | ||||||||
Diversified Financials 0.5% | ||||||||
Acom Co., Ltd. * | 88,800 | 295,992 | ||||||
AEON Financial Service Co., Ltd. | 24,900 | 520,375 | ||||||
Credit Saison Co., Ltd. | 27,800 | 586,868 | ||||||
Daiwa Securities Group, Inc. | 347,000 | 2,742,326 | ||||||
Japan Exchange Group, Inc. | 53,900 | 1,337,047 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 97,400 | 514,228 | ||||||
Nomura Holdings, Inc. | 727,000 | 4,541,123 | ||||||
ORIX Corp. | 261,900 | 3,635,235 | ||||||
SBI Holdings, Inc. | 38,090 | 439,236 | ||||||
14,612,430 | ||||||||
Energy 0.2% | ||||||||
Idemitsu Kosan Co., Ltd. | 20,100 | 388,726 | ||||||
Inpex Corp. | 179,100 | 2,290,768 | ||||||
JX Holdings, Inc. | 442,300 | 1,894,658 | ||||||
Showa Shell Sekiyu K.K. | 33,500 | 287,440 | ||||||
TonenGeneral Sekiyu K.K. | 61,000 | 532,408 | ||||||
5,394,000 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Aeon Co., Ltd. | 129,500 | 1,281,381 | ||||||
FamilyMart Co., Ltd. | 11,200 | 449,714 | ||||||
Lawson, Inc. | 12,300 | 834,399 | ||||||
Seven & i Holdings Co., Ltd. | 153,203 | 5,983,511 | ||||||
8,549,005 | ||||||||
Food, Beverage & Tobacco 0.8% | ||||||||
Ajinomoto Co., Inc. | 116,000 | 2,190,155 | ||||||
Asahi Group Holdings Ltd. | 76,100 | 2,360,535 | ||||||
Calbee, Inc. | 16,200 | 567,394 | ||||||
Japan Tobacco, Inc. | 219,900 | 7,502,776 | ||||||
Kikkoman Corp. | 30,000 | 690,036 | ||||||
Kirin Holdings Co., Ltd. | 166,700 | 2,161,233 | ||||||
MEIJI Holdings Co., Ltd. | 12,600 | 1,057,173 | ||||||
NH Foods Ltd. | 33,000 | 760,970 | ||||||
Nisshin Seifun Group, Inc. | 40,400 | 408,526 | ||||||
Nissin Foods Holdings Co., Ltd. | 11,900 | 627,188 | ||||||
Suntory Beverage & Food Ltd. | 26,500 | 945,374 | ||||||
Toyo Suisan Kaisha Ltd. | 19,000 | 656,189 | ||||||
Yakult Honsha Co., Ltd. | 16,800 | 930,372 | ||||||
Yamazaki Baking Co., Ltd. | 26,000 | 321,428 | ||||||
21,179,349 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Alfresa Holdings Corp. | 32,800 | 416,229 | ||||||
M3, Inc. | 36,000 | 600,785 | ||||||
Medipal Holdings Corp. | 26,100 | 289,297 | ||||||
Miraca Holdings, Inc. | 11,800 | 495,357 | ||||||
Olympus Corp. * | 48,700 | 1,748,577 | ||||||
Suzuken Co., Ltd. | 14,500 | 388,757 |
See financial notes 69
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sysmex Corp. | 27,700 | 1,182,517 | ||||||
Terumo Corp. | 61,900 | 1,547,414 | ||||||
6,668,933 | ||||||||
Household & Personal Products 0.3% | ||||||||
Kao Corp. | 103,319 | 4,028,829 | ||||||
Shiseido Co., Ltd. | 71,400 | 1,184,823 | ||||||
Unicharm Corp. | 75,600 | 1,757,960 | ||||||
6,971,612 | ||||||||
Insurance 0.5% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 100,562 | 2,173,825 | ||||||
Sompo Japan Nipponkoa Holdings, Inc. | 67,200 | 1,692,136 | ||||||
Sony Financial Holdings, Inc. | 33,000 | 526,835 | ||||||
T&D Holdings, Inc. | 117,600 | 1,514,862 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 213,300 | 3,228,018 | ||||||
Tokio Marine Holdings, Inc. | 139,299 | 4,467,056 | ||||||
13,602,732 | ||||||||
Materials 1.2% | ||||||||
Air Water, Inc. | 33,000 | 526,030 | ||||||
Asahi Kasei Corp. | 249,000 | 2,043,346 | ||||||
Daicel Corp. | 51,000 | 587,901 | ||||||
Daido Steel Co., Ltd. | 59,000 | 226,339 | ||||||
Hitachi Chemical Co., Ltd. | 22,600 | 398,336 | ||||||
Hitachi Metals Ltd. | 45,000 | 759,726 | ||||||
JFE Holdings, Inc. | 97,300 | 1,930,429 | ||||||
JSR Corp. | 39,300 | 707,724 | ||||||
Kaneka Corp. | 58,000 | 318,672 | ||||||
Kansai Paint Co., Ltd. | 47,000 | 718,467 | ||||||
Kobe Steel Ltd. | 614,000 | 975,552 | ||||||
Kuraray Co., Ltd. | 66,700 | 774,725 | ||||||
Maruichi Steel Tube Ltd. | 8,800 | 207,815 | ||||||
Mitsubishi Chemical Holdings Corp. | 279,600 | 1,377,278 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 85,000 | 508,570 | ||||||
Mitsubishi Materials Corp. | 229,000 | 716,749 | ||||||
Mitsui Chemicals, Inc. * | 178,000 | 515,612 | ||||||
Nippon Paint Holdings Co., Ltd. | 34,000 | 772,049 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 1,556,410 | 4,107,123 | ||||||
Nitto Denko Corp. | 30,600 | 1,654,971 | ||||||
Oji Holdings Corp. | 173,000 | 625,489 | ||||||
Shin-Etsu Chemical Co., Ltd. | 81,960 | 5,260,898 | ||||||
Sumitomo Chemical Co., Ltd. | 307,000 | 1,053,144 | ||||||
Sumitomo Metal Mining Co., Ltd. | 105,000 | 1,456,614 | ||||||
Taiheiyo Cement Corp. | 238,000 | 873,211 | ||||||
Taiyo Nippon Sanso Corp. (a) | 45,000 | 405,138 | ||||||
Teijin Ltd. | 203,000 | 496,294 | ||||||
Toray Industries, Inc. | 289,000 | 1,940,180 | ||||||
Toyo Seikan Group Holdings Ltd. | 33,400 | 405,031 | ||||||
Yamato Kogyo Co., Ltd. | 7,700 | 249,441 | ||||||
32,592,854 | ||||||||
Media 0.1% | ||||||||
Dentsu, Inc. | 45,800 | 1,702,821 | ||||||
Hakuhodo DY Holdings, Inc. | 52,700 | 521,178 | ||||||
Toho Co., Ltd. | 27,300 | 626,195 | ||||||
2,850,194 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.0% | ||||||||
Astellas Pharma, Inc. | 430,350 | 6,679,242 | ||||||
Chugai Pharmaceutical Co., Ltd. | 44,600 | 1,394,318 | ||||||
Daiichi Sankyo Co., Ltd. | 129,500 | 1,947,917 | ||||||
Eisai Co., Ltd. | 51,000 | 1,994,568 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 10,700 | 360,175 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 43,000 | 501,524 | ||||||
Mitsubishi Tanabe Pharma Corp. | 43,100 | 655,429 | ||||||
Ono Pharmaceutical Co., Ltd. | 16,000 | 1,615,111 | ||||||
Otsuka Holdings Co., Ltd. | 80,100 | 2,809,751 | ||||||
Santen Pharmaceutical Co., Ltd. | 14,200 | 847,549 | ||||||
Shionogi & Co., Ltd. | 61,500 | 1,608,947 | ||||||
Sumitomo Dainippon Pharma Co., Ltd. | 28,500 | 336,184 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. | 6,500 | 456,226 | ||||||
Takeda Pharmaceutical Co., Ltd. | 161,600 | 7,005,090 | ||||||
28,212,031 | ||||||||
Real Estate 1.0% | ||||||||
Aeon Mall Co., Ltd. | 20,200 | 370,787 | ||||||
Daito Trust Construction Co., Ltd. | 14,400 | 1,794,251 | ||||||
Daiwa House Industry Co., Ltd. | 123,000 | 2,327,109 | ||||||
Hulic Co., Ltd. | 45,700 | 505,600 | ||||||
Japan Prime Realty Investment Corp. | 149 | 548,720 | ||||||
Japan Real Estate Investment Corp. | 260 | 1,416,805 | ||||||
Japan Retail Fund Investment Corp. | 488 | 982,561 | ||||||
Mitsubishi Estate Co., Ltd. | 252,502 | 6,432,426 | ||||||
Mitsui Fudosan Co., Ltd. | 186,777 | 6,007,948 | ||||||
Nippon Building Fund, Inc. | 287 | 1,608,533 | ||||||
Nippon Prologis REIT, Inc. | 311 | 721,671 | ||||||
Nomura Real Estate Holdings, Inc. | 24,300 | 429,475 | ||||||
NTT Urban Development Corp. | 22,700 | 256,920 | ||||||
Sumitomo Realty & Development Co., Ltd. | 72,000 | 2,699,205 | ||||||
Tokyo Tatemono Co., Ltd. | 79,000 | 689,619 | ||||||
Tokyu Fudosan Holdings Corp. | 91,200 | 648,186 | ||||||
United Urban Investment Corp. | 476 | 751,225 | ||||||
28,191,041 | ||||||||
Retailing 0.5% | ||||||||
ABC-Mart, Inc. | 5,980 | 344,811 | ||||||
Don Quijote Holdings Co., Ltd. | 12,200 | 730,974 | ||||||
Fast Retailing Co., Ltd. | 10,600 | 3,940,627 | ||||||
Hikari Tsushin, Inc. | 3,100 | 205,639 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 69,500 | 946,177 | ||||||
J. Front Retailing Co., Ltd. | 51,500 | 685,457 | ||||||
Marui Group Co., Ltd. | 53,900 | 455,521 | ||||||
Nitori Holdings Co., Ltd. | 14,300 | 906,271 | ||||||
Rakuten, Inc. | 157,620 | 1,777,397 |
70 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sanrio Co., Ltd. (a) | 10,800 | 312,254 | ||||||
Shimamura Co., Ltd. | 4,200 | 369,403 | ||||||
Takashimaya Co., Ltd. | 46,000 | 391,855 | ||||||
USS Co., Ltd. | 41,200 | 648,405 | ||||||
Yamada Denki Co., Ltd. (a) | 174,000 | 557,778 | ||||||
12,272,569 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Advantest Corp. | 30,800 | 359,147 | ||||||
Rohm Co., Ltd. | 18,900 | 1,150,458 | ||||||
Tokyo Electron Ltd. | 34,700 | 2,224,779 | ||||||
3,734,384 | ||||||||
Software & Services 0.4% | ||||||||
Dena Co., Ltd. | 18,200 | 235,183 | ||||||
Fujitsu Ltd. | 380,000 | 2,310,196 | ||||||
Gree, Inc. (a) | 24,703 | 176,913 | ||||||
GungHo Online Entertainment, Inc. (a) | 80,100 | 322,850 | ||||||
Itochu Techno-Solutions Corp. | 4,506 | 179,152 | ||||||
Kakaku.com, Inc. | 31,300 | 426,164 | ||||||
Konami Corp. | 19,400 | 389,518 | ||||||
Nexon Co., Ltd. | 28,900 | 254,673 | ||||||
Nintendo Co., Ltd. | 21,339 | 2,299,874 | ||||||
Nomura Research Institute Ltd. | 23,500 | 775,119 | ||||||
NTT Data Corp. | 25,800 | 1,008,557 | ||||||
Oracle Corp., Japan | 6,600 | 255,508 | ||||||
Otsuka Corp. | 10,700 | 397,861 | ||||||
Trend Micro, Inc. | 20,500 | 690,760 | ||||||
Yahoo Japan Corp. | 284,500 | 1,024,943 | ||||||
10,747,271 | ||||||||
Technology Hardware & Equipment 1.8% | ||||||||
Brother Industries Ltd. | 45,300 | 806,546 | ||||||
Canon, Inc. | 227,795 | 6,988,787 | ||||||
Citizen Holdings Co., Ltd. | 49,100 | 322,554 | ||||||
FUJIFILM Holdings Corp. | 94,011 | 3,155,817 | ||||||
Hamamatsu Photonics K.K. | 13,500 | 613,309 | ||||||
Hirose Electric Co., Ltd. | 5,700 | 698,877 | ||||||
Hitachi High-Technologies Corp. | 10,900 | 332,990 | ||||||
Hitachi Ltd. | 968,079 | 7,606,652 | ||||||
Hoya Corp. | 91,407 | 3,234,604 | ||||||
Ibiden Co., Ltd. | 22,300 | 335,213 | ||||||
Japan Display, Inc. * | 67,000 | 198,885 | ||||||
Keyence Corp. | 9,300 | 4,506,618 | ||||||
Konica Minolta, Inc. | 94,800 | 1,059,271 | ||||||
Kyocera Corp. | 65,000 | 2,995,943 | ||||||
Murata Manufacturing Co., Ltd. | 40,574 | 4,558,912 | ||||||
NEC Corp. | 514,000 | 1,817,697 | ||||||
Nippon Electric Glass Co., Ltd. | 88,000 | 409,204 | ||||||
Omron Corp. | 41,900 | 1,983,322 | ||||||
Ricoh Co., Ltd. | 141,900 | 1,465,451 | ||||||
Seiko Epson Corp. | 25,600 | 1,187,961 | ||||||
Shimadzu Corp. | 42,000 | 365,455 | ||||||
TDK Corp. | 25,400 | 1,441,757 | ||||||
Yaskawa Electric Corp. | 43,000 | 557,374 | ||||||
Yokogawa Electric Corp. | 47,100 | 655,299 | ||||||
47,298,498 | ||||||||
Telecommunication Services 1.2% | ||||||||
KDDI Corp. | 116,800 | 7,670,191 | ||||||
Nippon Telegraph & Telephone Corp. | 75,178 | 4,677,487 | ||||||
NTT DOCOMO, Inc. | 305,900 | 5,159,273 | ||||||
SoftBank Corp. | 194,200 | 14,137,646 | ||||||
31,644,597 | ||||||||
Transportation 1.0% | ||||||||
ANA Holdings, Inc. | 248,000 | 575,027 | ||||||
Central Japan Railway Co. | 29,000 | 4,325,319 | ||||||
East Japan Railway Co. | 67,260 | 5,253,224 | ||||||
Hankyu Hanshin Holdings, Inc. | 230,000 | 1,352,301 | ||||||
Japan Airlines Co., Ltd. | 26,700 | 716,950 | ||||||
Kamigumi Co., Ltd. | 51,000 | 491,734 | ||||||
Keikyu Corp. | 110,000 | 915,190 | ||||||
Keio Corp. | 108,000 | 820,339 | ||||||
Keisei Electric Railway Co., Ltd. | 60,000 | 705,212 | ||||||
Kintetsu Corp. | 371,000 | 1,290,557 | ||||||
Mitsubishi Logistics Corp. | 25,000 | 380,787 | ||||||
Mitsui O.S.K. Lines Ltd. | 228,000 | 720,333 | ||||||
Nagoya Railroad Co., Ltd. | 181,000 | 773,941 | ||||||
Nippon Express Co., Ltd. | 158,000 | 695,036 | ||||||
Nippon Yusen K.K. | 326,000 | 845,174 | ||||||
Odakyu Electric Railway Co., Ltd. | 128,000 | 1,201,317 | ||||||
Tobu Railway Co., Ltd. | 191,000 | 966,200 | ||||||
Tokyu Corp. | 229,000 | 1,512,053 | ||||||
West Japan Railway Co. | 33,400 | 1,592,023 | ||||||
Yamato Holdings Co., Ltd. | 75,400 | 1,612,217 | ||||||
26,744,934 | ||||||||
Utilities 0.5% | ||||||||
Chubu Electric Power Co., Inc. * | 129,300 | 1,551,545 | ||||||
Electric Power Development Co., Ltd. | 22,200 | 776,359 | ||||||
Hokuriku Electric Power Co. | 40,500 | 546,762 | ||||||
Kyushu Electric Power Co., Inc. * | 88,000 | 954,769 | ||||||
Osaka Gas Co., Ltd. | 376,000 | 1,499,800 | ||||||
Shikoku Electric Power Co., Inc. * | 33,700 | 462,457 | ||||||
The Chugoku Electric Power Co., Inc. | 55,200 | 727,968 | ||||||
The Kansai Electric Power Co., Inc. * | 144,600 | 1,427,999 | ||||||
Toho Gas Co., Ltd. | 89,000 | 481,350 | ||||||
Tohoku Electric Power Co., Inc. | 94,800 | 1,184,830 | ||||||
Tokyo Electric Power Co., Inc. * | 285,890 | 1,030,838 | ||||||
Tokyo Gas Co., Ltd. | 480,201 | 2,768,029 | ||||||
13,412,706 | ||||||||
550,928,916 | ||||||||
Netherlands 2.6% | ||||||||
Banks 0.4% | ||||||||
ING Groep N.V. CVA * | 780,729 | 11,180,322 | ||||||
Capital Goods 0.3% | ||||||||
Koninklijke Boskalis Westminster N.V. | 18,861 | 1,006,241 | ||||||
Koninklijke Philips N.V. | 193,937 | 5,422,068 | ||||||
OCI N.V. * | 16,510 | 575,609 | ||||||
7,003,918 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Randstad Holding N.V. | 25,903 | 1,143,392 |
See financial notes 71
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.0% | ||||||||
Fugro N.V. CVA | 14,104 | 194,772 | ||||||
Koninklijke Vopak N.V. | 13,531 | 678,571 | ||||||
873,343 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Koninklijke Ahold N.V. | 187,198 | 3,135,311 | ||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Heineken Holding N.V. | 20,716 | 1,342,740 | ||||||
Heineken N.V. | 46,088 | 3,442,963 | ||||||
Unilever N.V. CVA | 330,199 | 12,798,001 | ||||||
17,583,704 | ||||||||
Insurance 0.2% | ||||||||
Aegon N.V. | 362,442 | 2,954,065 | ||||||
Delta Lloyd N.V. | 42,331 | 964,861 | ||||||
3,918,926 | ||||||||
Materials 0.2% | ||||||||
Akzo Nobel N.V. | 48,076 | 3,206,020 | ||||||
Koninklijke DSM N.V. | 33,937 | 2,126,424 | ||||||
5,332,444 | ||||||||
Media 0.2% | ||||||||
Altice S.A. * | 17,158 | 1,068,412 | ||||||
Reed Elsevier N.V. | 141,289 | 3,254,627 | ||||||
Wolters Kluwer N.V. | 60,391 | 1,612,361 | ||||||
5,935,400 | ||||||||
Real Estate 0.0% | ||||||||
Corio N.V. | 13,143 | 639,731 | ||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
ASML Holding N.V. | 71,566 | 7,136,012 | ||||||
Software & Services 0.1% | ||||||||
Gemalto N.V. | 16,129 | 1,233,654 | ||||||
Telecommunication Services 0.1% | ||||||||
Koninklijke (Royal) KPN N.V. | 631,669 | 2,079,285 | ||||||
Ziggo N.V. * | 29,773 | 1,454,951 | ||||||
3,534,236 | ||||||||
Transportation 0.0% | ||||||||
TNT Express N.V. | 91,819 | 533,698 | ||||||
69,184,091 | ||||||||
New Zealand 0.1% | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Ryman Healthcare Ltd. | 72,734 | 430,632 | ||||||
Materials 0.1% | ||||||||
Fletcher Building Ltd. | 139,614 | 941,685 | ||||||
Software & Services 0.0% | ||||||||
Xero Ltd. * | 11,859 | 147,096 | ||||||
Telecommunication Services 0.0% | ||||||||
Spark New Zealand Ltd. | 356,009 | 878,560 | ||||||
Transportation 0.0% | ||||||||
Auckland International Airport Ltd. | 202,366 | 611,790 | ||||||
Utilities 0.0% | ||||||||
Contact Energy Ltd. | 75,447 | 366,009 | ||||||
3,375,772 | ||||||||
Norway 0.7% | ||||||||
Banks 0.1% | ||||||||
DNB A.S.A. | 200,476 | 3,683,196 | ||||||
Energy 0.3% | ||||||||
Aker Solutions A.S.A. * | 31,911 | 206,749 | ||||||
Seadrill Ltd. | 73,913 | 1,670,366 | ||||||
Statoil A.S.A. | 224,040 | 5,127,252 | ||||||
Subsea 7 S.A. | 60,050 | 646,221 | ||||||
7,650,588 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Orkla A.S.A. | 163,112 | 1,247,160 | ||||||
Insurance 0.0% | ||||||||
Gjensidige Forsikring A.S.A. | 42,041 | 763,655 | ||||||
Materials 0.1% | ||||||||
Norsk Hydro A.S.A. | 266,113 | 1,489,945 | ||||||
Yara International A.S.A. | 35,704 | 1,639,575 | ||||||
3,129,520 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. | 150,794 | 3,390,850 | ||||||
19,864,969 | ||||||||
Portugal 0.2% | ||||||||
Banks 0.0% | ||||||||
Banco Comercial Portugues S.A., Class R * | 7,149,000 | 808,027 | ||||||
Banco Espirito Santo S.A. - Reg’d *(b)(c) | 470,491 | — | ||||||
808,027 | ||||||||
Energy 0.1% | ||||||||
Galp Energia, SGPS, S.A. | 78,082 | 1,132,069 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Jeronimo Martins, SGPS, S.A. | 49,264 | 431,140 | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 458,601 | 1,973,510 | ||||||
4,344,746 | ||||||||
Singapore 1.4% | ||||||||
Banks 0.5% | ||||||||
DBS Group Holdings Ltd. | 341,246 | 4,908,965 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 591,371 | 4,555,394 | ||||||
United Overseas Bank Ltd. | 254,233 | 4,554,755 | ||||||
14,019,114 | ||||||||
Capital Goods 0.2% | ||||||||
Keppel Corp., Ltd. | 285,800 | 2,095,832 | ||||||
Noble Group Ltd. | 858,000 | 798,676 | ||||||
Sembcorp Industries Ltd. | 200,000 | 756,618 | ||||||
Sembcorp Marine Ltd. (a) | 152,000 | 430,620 | ||||||
Singapore Technologies Engineering Ltd. | 316,000 | 922,577 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 431,000 | 379,394 | ||||||
5,383,717 |
72 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Consumer Services 0.1% | ||||||||
Genting Singapore plc | 1,254,000 | 1,074,012 | ||||||
Diversified Financials 0.0% | ||||||||
Singapore Exchange Ltd. | 163,000 | 888,304 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Olam International Ltd. (a) | 150,000 | 248,696 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Golden Agri-Resources Ltd. | 1,519,000 | 615,576 | ||||||
Wilmar International Ltd. | 390,000 | 972,149 | ||||||
1,587,725 | ||||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. | 302,000 | 1,006,606 | ||||||
Real Estate 0.2% | ||||||||
Ascendas REIT | 383,000 | 665,258 | ||||||
CapitaCommercial Trust | 440,000 | 572,120 | ||||||
CapitaLand Ltd. | 522,000 | 1,288,774 | ||||||
CapitaMall Trust | 450,000 | 690,206 | ||||||
City Developments Ltd. | 74,000 | 544,634 | ||||||
Global Logistic Properties Ltd. | 634,000 | 1,358,639 | ||||||
Keppel Land Ltd. | 129,000 | 335,673 | ||||||
UOL Group Ltd. | 95,000 | 477,161 | ||||||
5,932,465 | ||||||||
Retailing 0.0% | ||||||||
Jardine Cycle & Carriage Ltd. | 22,000 | 683,857 | ||||||
Telecommunication Services 0.2% | ||||||||
Singapore Telecommunications Ltd. | 1,595,237 | 4,695,225 | ||||||
StarHub Ltd. | 141,000 | 453,217 | ||||||
5,148,442 | ||||||||
Transportation 0.1% | ||||||||
ComfortDelGro Corp., Ltd. | 408,000 | 838,849 | ||||||
Hutchison Port Holdings Trust, Class U | 1,199,000 | 809,576 | ||||||
Singapore Airlines Ltd. | 111,000 | 855,436 | ||||||
2,503,861 | ||||||||
38,476,799 | ||||||||
Spain 3.3% | ||||||||
Banks 1.6% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 1,200,605 | 13,428,629 | ||||||
Banco de Sabadell S.A. | 686,251 | 1,984,103 | ||||||
Banco Popular Espanol S.A. | 368,274 | 2,115,443 | ||||||
Banco Santander S.A. | 2,426,020 | 21,435,158 | ||||||
Bankia S.A. * | 916,941 | 1,644,393 | ||||||
CaixaBank S.A. | 360,144 | 1,968,260 | ||||||
42,575,986 | ||||||||
Capital Goods 0.1% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 36,152 | 1,341,885 | ||||||
Ferrovial S.A. | 82,015 | 1,676,801 | ||||||
Zardoya Otis S.A. | 32,048 | 373,680 | ||||||
3,392,366 | ||||||||
Energy 0.2% | ||||||||
Repsol S.A. | 204,090 | 4,561,203 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 129,723 | 824,231 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 202,213 | 693,399 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Grifols S.A. | 28,491 | 1,163,406 | ||||||
Retailing 0.2% | ||||||||
Inditex S.A. | 219,270 | 6,168,744 | ||||||
�� | ||||||||
Software & Services 0.1% | ||||||||
Amadeus IT Holding S.A., A Shares | 76,027 | 2,797,198 | ||||||
Telecommunication Services 0.5% | ||||||||
Telefonica S.A. | 827,077 | 12,445,589 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 80,164 | 1,671,607 | ||||||
International Consolidated Airlines Group S.A. * | 194,400 | 1,271,450 | ||||||
2,943,057 | ||||||||
Utilities 0.5% | ||||||||
Enagas S.A. | 41,695 | 1,399,274 | ||||||
Gas Natural SDG S.A. | 69,417 | 2,004,536 | ||||||
Iberdrola S.A. | 1,026,815 | 7,268,737 | ||||||
Red Electrica Corp. S.A. | 22,726 | 1,985,826 | ||||||
12,658,373 | ||||||||
90,223,552 | ||||||||
Sweden 2.9% | ||||||||
Banks 0.8% | ||||||||
Nordea Bank AB | 608,105 | 7,821,296 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 304,978 | 3,917,218 | ||||||
Svenska Handelsbanken AB, A Shares | 99,994 | 4,780,232 | ||||||
Swedbank AB, A Shares | 181,593 | 4,812,337 | ||||||
21,331,083 | ||||||||
Capital Goods 0.7% | ||||||||
Alfa Laval AB | 63,558 | 1,310,178 | ||||||
Assa Abloy AB, B Shares | 66,535 | 3,531,981 | ||||||
Atlas Copco AB, A Shares | 135,065 | 3,912,262 | ||||||
Atlas Copco AB, B Shares | 77,192 | 2,044,648 | ||||||
Sandvik AB | 224,585 | 2,467,090 | ||||||
Skanska AB, B Shares | 76,136 | 1,551,991 | ||||||
SKF AB, B Shares | 80,164 | 1,607,883 | ||||||
Volvo AB, B Shares | 314,840 | 3,633,391 | ||||||
20,059,424 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Securitas AB, B Shares | 64,419 | 712,835 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, B Shares | 46,562 | 1,319,324 | ||||||
Husqvarna AB, B Shares | 76,291 | 569,599 | ||||||
1,888,923 | ||||||||
Diversified Financials 0.2% | ||||||||
Industrivarden AB, C Shares | 32,236 | 564,724 | ||||||
Investment AB Kinnevik, B Shares | 46,592 | 1,479,429 |
See financial notes 73
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Investor AB, B Shares | 91,295 | 3,276,813 | ||||||
5,320,966 | ||||||||
Energy 0.0% | ||||||||
Lundin Petroleum AB * | 46,492 | 657,145 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Swedish Match AB | 40,706 | 1,323,638 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Elekta AB, B Shares | 78,661 | 806,660 | ||||||
Getinge AB, B Shares | 41,737 | 957,579 | ||||||
1,764,239 | ||||||||
Household & Personal Products 0.1% | ||||||||
Svenska Cellulosa AB, S.C.A., B Shares | 121,567 | 2,723,889 | ||||||
Materials 0.0% | ||||||||
Boliden AB | 52,419 | 866,348 | ||||||
Retailing 0.3% | ||||||||
Hennes & Mauritz AB, B Shares | 190,118 | 7,585,608 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Hexagon AB, B Shares | 51,229 | 1,728,752 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 608,685 | 7,192,463 | ||||||
8,921,215 | ||||||||
Telecommunication Services 0.2% | ||||||||
Millicom International Cellular S.A. SDR | 13,121 | 1,070,876 | ||||||
Tele2 AB, B Shares | 59,298 | 753,416 | ||||||
TeliaSonera AB | 477,708 | 3,308,016 | ||||||
5,132,308 | ||||||||
78,287,621 | ||||||||
Switzerland 8.8% | ||||||||
Capital Goods 0.5% | ||||||||
ABB Ltd. - Reg’d * | 446,403 | 9,793,488 | ||||||
Geberit AG - Reg’d | 7,610 | 2,597,560 | ||||||
Schindler Holding AG | 9,460 | 1,323,333 | ||||||
Schindler Holding AG - Reg’d | 3,737 | 505,698 | ||||||
Sulzer AG - Reg’d | 4,467 | 509,144 | ||||||
14,729,223 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Adecco S.A. - Reg’d * | 33,406 | 2,264,312 | ||||||
SGS S.A. - Reg’d | 1,079 | 2,372,205 | ||||||
4,636,517 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Cie Financiere Richemont S.A. - Reg’d | 104,513 | 8,811,886 | ||||||
The Swatch Group AG - Bearer Shares | 6,152 | 2,918,274 | ||||||
The Swatch Group AG - Reg’d | 10,535 | 891,289 | ||||||
12,621,449 | ||||||||
Diversified Financials 0.9% | ||||||||
Credit Suisse Group AG - Reg’d * | 303,009 | 8,073,310 | ||||||
Julius Baer Group Ltd. * | 44,446 | 1,948,412 | ||||||
Pargesa Holding S.A. | 5,743 | 447,044 | ||||||
Partners Group Holding AG | 3,301 | 878,433 | ||||||
UBS AG - Reg’d * | 738,535 | 12,841,745 | ||||||
24,188,944 | ||||||||
Energy 0.1% | ||||||||
Transocean Ltd. (a) | 72,933 | 2,172,213 | ||||||
Food, Beverage & Tobacco 1.9% | ||||||||
Aryzta AG * | 17,040 | 1,453,538 | ||||||
Barry Callebaut AG - Reg’d * | 419 | 439,770 | ||||||
Chocoladefabriken Lindt & Sprungli AG | 215 | 1,079,080 | ||||||
Chocoladefabriken Lindt & Sprungli AG - Reg’d | 19 | 1,138,066 | ||||||
Nestle S.A. - Reg’d | 650,058 | 47,671,415 | ||||||
51,781,869 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Sonova Holding AG - Reg’d | 10,734 | 1,673,762 | ||||||
Insurance 0.6% | ||||||||
Baloise Holding AG - Reg’d | 9,655 | 1,215,418 | ||||||
Swiss Life Holding AG - Reg’d * | 6,537 | 1,499,854 | ||||||
Swiss Re AG * | 70,289 | 5,683,626 | ||||||
Zurich Insurance Group AG * | 30,343 | 9,182,655 | ||||||
17,581,553 | ||||||||
Materials 0.5% | ||||||||
EMS-Chemie Holding AG - Reg’d | 1,753 | 631,309 | ||||||
Givaudan S.A. - Reg’d * | 1,849 | 3,087,779 | ||||||
Holcim Ltd. - Reg’d * | 45,507 | 3,229,838 | ||||||
Sika AG | 429 | 1,533,513 | ||||||
Syngenta AG - Reg’d | 18,691 | 5,780,328 | ||||||
14,262,767 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 3.3% | ||||||||
Actelion Ltd. - Reg’d * | 20,876 | 2,486,230 | ||||||
Lonza Group AG - Reg’d * | 10,926 | 1,203,898 | ||||||
Novartis AG - Reg’d | 464,123 | 43,071,939 | ||||||
Roche Holding AG | 141,729 | 41,824,422 | ||||||
88,586,489 | ||||||||
Real Estate 0.0% | ||||||||
Swiss Prime Site AG - Reg’d * | 11,957 | 909,054 | ||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 4,806 | 2,833,238 | ||||||
Transportation 0.1% | ||||||||
Kuehne & Nagel International AG - Reg’d | 11,565 | 1,507,267 | ||||||
237,484,345 | ||||||||
United Kingdom 20.0% | ||||||||
Automobiles & Components 0.1% | ||||||||
GKN plc | 326,001 | 1,665,842 | ||||||
Banks 2.8% | ||||||||
Barclays plc | 3,315,853 | 12,752,500 | ||||||
HSBC Holdings plc | 3,842,563 | 39,176,326 | ||||||
Lloyds Banking Group plc * | 11,523,992 | 14,230,849 | ||||||
Royal Bank of Scotland Group plc * | 502,724 | 3,125,712 | ||||||
Standard Chartered plc | 493,869 | 7,434,040 | ||||||
76,719,427 |
74 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 0.9% | ||||||||
Wolseley plc | 53,950 | 2,869,059 | ||||||
BAE Systems plc | 636,010 | 4,683,741 | ||||||
Bunzl plc | 67,819 | 1,841,654 | ||||||
Cobham plc | 234,066 | 1,091,844 | ||||||
IMI plc | 52,003 | 1,018,358 | ||||||
Meggitt plc | 164,421 | 1,187,680 | ||||||
Melrose Industries plc | 201,774 | 829,308 | ||||||
Rolls-Royce Holdings plc * | 377,588 | 5,114,231 | ||||||
Smiths Group plc | 80,668 | 1,506,613 | ||||||
The Weir Group plc | 43,630 | 1,594,626 | ||||||
Travis Perkins plc | 50,079 | 1,326,906 | ||||||
23,064,020 | ||||||||
Commercial & Professional Supplies 0.4% | ||||||||
Aggreko plc | 53,013 | 1,293,408 | ||||||
Babcock International Group plc | 50,186 | 880,816 | ||||||
Capita plc | 137,142 | 2,411,219 | ||||||
Experian plc | 198,036 | 2,977,698 | ||||||
G4S plc | 313,200 | 1,282,005 | ||||||
Intertek Group plc | 32,951 | 1,436,208 | ||||||
10,281,354 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Burberry Group plc | 92,297 | 2,268,066 | ||||||
Persimmon plc * | 62,067 | 1,457,654 | ||||||
3,725,720 | ||||||||
Consumer Services 0.5% | ||||||||
Carnival plc | 37,306 | 1,487,611 | ||||||
Compass Group plc | 335,850 | 5,420,925 | ||||||
InterContinental Hotels Group plc | 46,430 | 1,763,648 | ||||||
TUI Travel plc | 93,512 | 597,553 | ||||||
Whitbread plc | 37,034 | 2,588,713 | ||||||
William Hill plc | 174,467 | 1,007,537 | ||||||
12,865,987 | ||||||||
Diversified Financials 0.3% | ||||||||
3i Group plc | 200,978 | 1,278,304 | ||||||
Aberdeen Asset Management plc | 184,094 | 1,280,304 | ||||||
Hargreaves Lansdown plc | 47,776 | 761,275 | ||||||
ICAP plc | 116,269 | 780,596 | ||||||
Investec plc | 113,844 | 1,043,889 | ||||||
London Stock Exchange Group plc | 47,855 | 1,545,401 | ||||||
Schroders plc | 25,777 | 996,860 | ||||||
7,686,629 | ||||||||
Energy 3.3% | ||||||||
AMEC plc | 57,377 | 956,712 | ||||||
BG Group plc | 689,272 | 11,487,429 | ||||||
BP plc | 3,717,531 | 26,747,268 | ||||||
Petrofac Ltd. | 49,680 | 841,746 | ||||||
Royal Dutch Shell plc, A Shares | 793,932 | 28,360,643 | ||||||
Royal Dutch Shell plc, B Shares | 487,416 | 18,007,793 | ||||||
Tullow Oil plc | 180,570 | 1,409,165 | ||||||
87,810,756 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
J. Sainsbury plc (a) | 257,523 | 1,014,527 | ||||||
Tesco plc | 1,630,691 | 4,526,778 | ||||||
WM Morrison Supermarkets plc | 410,451 | 1,019,105 | ||||||
6,560,410 | ||||||||
Food, Beverage & Tobacco 2.6% | ||||||||
Associated British Foods plc | 70,788 | 3,124,001 | ||||||
British American Tobacco plc | 378,448 | 21,449,524 | ||||||
Coca-Cola HBC AG CDI * | 40,964 | 893,609 | ||||||
Diageo plc | 507,213 | 14,958,918 | ||||||
Imperial Tobacco Group plc | 191,221 | 8,306,989 | ||||||
SABMiller plc | 195,209 | 11,041,598 | ||||||
Tate & Lyle plc | 88,993 | 861,282 | ||||||
Unilever plc | 259,887 | 10,454,079 | ||||||
71,090,000 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Smith & Nephew plc | 183,323 | 3,111,967 | ||||||
Household & Personal Products 0.4% | ||||||||
Reckitt Benckiser Group plc | 131,606 | 11,084,313 | ||||||
Insurance 1.2% | ||||||||
Admiral Group plc | 40,261 | 861,471 | ||||||
Aviva plc | 588,395 | 4,921,484 | ||||||
Direct Line Insurance Group plc | 301,382 | 1,333,211 | ||||||
Friends Life Group Ltd. | 284,930 | 1,477,653 | ||||||
Legal & General Group plc | 1,212,049 | 4,492,201 | ||||||
Old Mutual plc | 984,242 | 3,056,638 | ||||||
Prudential plc | 518,460 | 12,005,474 | ||||||
RSA Insurance Group plc * | 203,514 | 1,573,439 | ||||||
Standard Life plc | 477,579 | 3,015,710 | ||||||
32,737,281 | ||||||||
Materials 1.7% | ||||||||
Anglo American plc | 279,568 | 5,902,673 | ||||||
Antofagasta plc | 75,900 | 854,771 | ||||||
BHP Billiton plc | 427,163 | 11,036,440 | ||||||
Croda International plc | 28,009 | �� | 1,029,788 | |||||
Fresnillo plc | 41,090 | 459,193 | ||||||
Glencore plc * | 2,148,809 | 11,024,754 | ||||||
Johnson Matthey plc | 40,697 | 1,942,940 | ||||||
Randgold Resources Ltd. | 17,271 | 1,010,843 | ||||||
Rexam plc | 142,363 | 1,085,072 | ||||||
Rio Tinto plc | 256,983 | 12,227,623 | ||||||
46,574,097 | ||||||||
Media 0.6% | ||||||||
British Sky Broadcasting Group plc | 204,459 | 2,897,645 | ||||||
ITV plc | 778,547 | 2,529,252 | ||||||
Pearson plc | 163,625 | 3,062,487 | ||||||
Reed Elsevier plc | 227,335 | 3,741,308 | ||||||
WPP plc | 267,150 | 5,218,149 | ||||||
17,448,841 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.8% | ||||||||
AstraZeneca plc | 254,498 | 18,590,659 | ||||||
GlaxoSmithKline plc | 979,362 | 22,147,257 | ||||||
Shire plc | 117,850 | 7,907,373 | ||||||
48,645,289 | ||||||||
Real Estate 0.3% | ||||||||
Hammerson plc | 156,479 | 1,537,248 | ||||||
Intu Properties plc | 185,106 | 1,009,794 |
See financial notes 75
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Land Securities Group plc | 158,851 | 2,818,660 | ||||||
Segro plc | 153,054 | 932,449 | ||||||
The British Land Co., plc | 189,077 | 2,207,796 | ||||||
8,505,947 | ||||||||
Retailing 0.4% | ||||||||
ASOS plc * | 9,568 | 407,986 | ||||||
Dixons Carphone plc | 199,127 | 1,264,412 | ||||||
Kingfisher plc | 464,297 | 2,249,270 | ||||||
Marks & Spencer Group plc | 320,903 | 2,089,662 | ||||||
Next plc | 30,912 | 3,191,253 | ||||||
Sports Direct International plc * | 50,056 | 517,000 | ||||||
9,719,583 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ARM Holdings plc | 284,920 | 4,033,718 | ||||||
Software & Services 0.1% | ||||||||
The Sage Group plc | 224,851 | 1,361,574 | ||||||
Telecommunication Services 1.0% | ||||||||
BT Group plc | 1,603,557 | 9,453,498 | ||||||
Inmarsat plc | 84,463 | 927,394 | ||||||
Vodafone Group plc | 5,332,119 | 17,731,718 | ||||||
28,112,610 | ||||||||
Transportation 0.1% | ||||||||
easyJet plc | 31,365 | 753,668 | ||||||
Royal Mail plc | 128,631 | 910,312 | ||||||
1,663,980 | ||||||||
Utilities 0.9% | ||||||||
Centrica plc | 1,011,380 | 4,905,165 | ||||||
National Grid plc | 755,203 | 11,207,186 | ||||||
Severn Trent plc | 48,294 | 1,543,646 | ||||||
SSE plc | 195,138 | 5,001,579 | ||||||
United Utilities Group plc | 134,752 | 1,847,215 | ||||||
24,504,791 | ||||||||
538,974,136 | ||||||||
Total Common Stock | ||||||||
(Cost $2,082,756,449) | 2,557,901,605 | |||||||
Preferred Stock 0.6% of net assets | ||||||||
Germany 0.6% | ||||||||
Automobiles & Components 0.4% | ||||||||
Bayerische Motoren Werke AG | 10,237 | 820,843 | ||||||
Porsche Automobil Holding SE | 31,003 | 2,545,727 | ||||||
Volkswagen AG | 32,916 | 7,039,149 | ||||||
10,405,719 | ||||||||
Household & Personal Products 0.2% | ||||||||
Henkel AG & Co. KGaA | 35,756 | 3,538,700 | ||||||
Materials 0.0% | ||||||||
Fuchs Petrolub SE | 15,368 | 598,563 | ||||||
14,542,982 | ||||||||
United Kingdom 0.0% | ||||||||
Capital Goods 0.0% | ||||||||
Rolls-Royce Holdings plc, C Shares *(b)(c) | 33,982,920 | 54,362 | ||||||
Total Preferred Stock | ||||||||
(Cost $12,000,924) | 14,597,344 | |||||||
Rights 0.0% of net assets | ||||||||
Spain 0.0% | ||||||||
Banks 0.0% | ||||||||
Banco Santander S.A. * | 2,405,355 | 458,169 | ||||||
Total Rights | ||||||||
(Cost $463,454) | 458,169 | |||||||
Other Investment Company 0.2% of net assets | ||||||||
United States 0.2% | ||||||||
Securities Lending Collateral 0.2% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 6,284,134 | 6,284,134 | ||||||
Total Other Investment Company | ||||||||
(Cost $6,284,134) | 6,284,134 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 3.8% of net assets | ||||||||
Time Deposits 3.6% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
US Dollar | ||||||||
0.03%, 11/03/14 | 18,382,677 | 18,382,677 | ||||||
Bank of Tokyo - Mitsubishi UFJ | ||||||||
US Dollar | ||||||||
0.03%, 11/03/14 | 26,411,153 | 26,411,153 | ||||||
Brown Brothers Harriman | ||||||||
Euro | ||||||||
(0.11)%, 11/03/14 | 12,029 | 15,074 | ||||||
Hong Kong Dollar | ||||||||
0.01%, 11/03/14 | 279,016 | 35,978 | ||||||
Japanese Yen | ||||||||
0.01%, 11/03/14 | 1,724,856 | 15,356 | ||||||
Singapore Dollar | ||||||||
0.01%, 11/03/14 | 1 | 1 | ||||||
Australian Dollar | ||||||||
1.55%, 11/03/14 | 293 | 257 | ||||||
DNB | ||||||||
US Dollar | ||||||||
0.03%, 11/03/14 | 26,411,153 | 26,411,153 |
76 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Wells Fargo | ||||||||
US Dollar | ||||||||
0.03%, 11/03/14 | 26,373,131 | 26,373,131 | ||||||
Pound Sterling | ||||||||
0.09%, 11/03/14 | 23,801 | 38,074 | ||||||
97,682,854 | ||||||||
U.S. Treasury Obligations 0.2% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (d)(e) | 1,400,000 | 1,399,986 | ||||||
0.01%, 12/18/14 (d)(e) | 3,400,000 | 3,399,967 | ||||||
4,799,953 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $102,482,807) | 102,482,807 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $2,228,712,985 and the unrealized appreciation and depreciation were $596,840,562 and ($143,829,488), respectively, with a net unrealized appreciation of $453,011,074.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $2,555,486,627 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(a) for additional information).
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $5,980,410. | |
(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 $54,362 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/19/14 | 1,260 | 115,668,000 | 3,612,589 |
See financial notes 77
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .6% | Common Stock | 3,311,517,644 | 4,445,205,810 | ||||||||
1 | .0% | Other Investment Companies | 45,972,730 | 45,972,730 | ||||||||
0 | .1% | Short-Term Investments | 3,299,949 | 3,299,949 | ||||||||
100 | .7% | Total Investments | 3,360,790,323 | 4,494,478,489 | ||||||||
(0 | .7%) | Other Assets and Liabilities, Net | (29,730,141 | ) | ||||||||
100 | .0% | Net Assets | 4,464,748,348 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.6% of net assets | ||||||||
Automobiles & Components 1.0% | ||||||||
BorgWarner, Inc. | 31,567 | 1,799,950 | ||||||
Dana Holding Corp. | 48,700 | 996,402 | ||||||
Ford Motor Co. | 779,541 | 10,983,733 | ||||||
General Motors Co. | 361,968 | 11,365,795 | ||||||
Harley-Davidson, Inc. | 41,354 | 2,716,958 | ||||||
Johnson Controls, Inc. | 172,809 | 8,165,225 | ||||||
Lear Corp. | 27,400 | 2,534,500 | ||||||
The Goodyear Tire & Rubber Co. | 62,190 | 1,506,864 | ||||||
TRW Automotive Holdings Corp. * | 32,725 | 3,316,679 | ||||||
Visteon Corp. * | 16,000 | 1,502,400 | ||||||
44,888,506 | ||||||||
Banks 5.6% | ||||||||
Bank of America Corp. | 3,291,794 | 56,487,185 | ||||||
BB&T Corp. | 161,475 | 6,116,673 | ||||||
CIT Group, Inc. | 26,200 | 1,281,966 | ||||||
Citigroup, Inc. | 651,872 | 34,894,708 | ||||||
Comerica, Inc. | 36,800 | 1,756,832 | ||||||
Fifth Third Bancorp | 188,690 | 3,771,913 | ||||||
Hudson City Bancorp, Inc. | 184,290 | 1,778,398 | ||||||
Huntington Bancshares, Inc. | 166,527 | 1,650,283 | ||||||
JPMorgan Chase & Co. | 965,923 | 58,419,023 | ||||||
KeyCorp | 201,157 | 2,655,272 | ||||||
M&T Bank Corp. | 20,914 | 2,555,273 | ||||||
New York Community Bancorp, Inc. | 113,330 | 1,807,613 | ||||||
People’s United Financial, Inc. | 72,277 | 1,056,690 | ||||||
Regions Financial Corp. | 338,525 | 3,361,553 | ||||||
SunTrust Banks, Inc. | 138,160 | 5,407,582 | ||||||
The PNC Financial Services Group, Inc. | 97,735 | 8,443,327 | ||||||
U.S. Bancorp | 313,760 | 13,366,176 | ||||||
Wells Fargo & Co. | 847,363 | 44,986,502 | ||||||
Zions Bancorp | 39,835 | 1,154,020 | ||||||
250,950,989 | ||||||||
Capital Goods 7.5% | ||||||||
3M Co. | 131,061 | 20,153,250 | ||||||
AECOM Technology Corp. * | 81,654 | 2,657,851 | ||||||
AGCO Corp. | 37,540 | 1,663,397 | ||||||
Alliant Techsystems, Inc. | 9,620 | 1,125,155 | ||||||
AMETEK, Inc. | 21,700 | 1,131,655 | ||||||
Armstrong World Industries, Inc. * | 15,700 | 760,194 | ||||||
Caterpillar, Inc. | 141,537 | 14,353,267 | ||||||
Cummins, Inc. | 37,294 | 5,451,637 | ||||||
Danaher Corp. | 62,556 | 5,029,502 | ||||||
Deere & Co. | 105,393 | 9,015,317 | ||||||
Dover Corp. | 41,375 | 3,286,830 | ||||||
Eaton Corp. plc | 70,916 | 4,849,945 | ||||||
EMCOR Group, Inc. | 29,940 | 1,321,252 | ||||||
Emerson Electric Co. | 200,310 | 12,831,859 | ||||||
Exelis, Inc. | 87,255 | 1,557,502 | ||||||
Fastenal Co. | 38,340 | 1,688,494 | ||||||
Flowserve Corp. | 28,375 | 1,929,216 | ||||||
Fluor Corp. | 72,150 | 4,786,431 | ||||||
Fortune Brands Home & Security, Inc. | 19,700 | 852,025 | ||||||
Foster Wheeler AG | 40,200 | 1,247,406 | ||||||
General Dynamics Corp. | 103,116 | 14,411,492 | ||||||
General Electric Co. | 2,248,798 | 58,041,476 | ||||||
Harsco Corp. | 52,535 | 1,138,959 | ||||||
Honeywell International, Inc. | 121,145 | 11,644,457 | ||||||
Hubbell, Inc., Class B | 10,784 | 1,223,013 | ||||||
Illinois Tool Works, Inc. | 88,834 | 8,088,336 | ||||||
Ingersoll-Rand plc | 78,982 | 4,945,853 | ||||||
Jacobs Engineering Group, Inc. * | 49,140 | 2,331,693 | ||||||
Joy Global, Inc. | 33,100 | 1,742,053 | ||||||
KBR, Inc. | 105,800 | 2,018,664 | ||||||
Kennametal, Inc. | 22,300 | 861,003 | ||||||
L-3 Communications Holdings, Inc. | 56,966 | 6,919,090 | ||||||
Lincoln Electric Holdings, Inc. | 15,500 | 1,123,440 | ||||||
Lockheed Martin Corp. | 76,184 | 14,518,385 | ||||||
Masco Corp. | 78,460 | 1,731,612 | ||||||
MRC Global, Inc. * | 34,800 | 731,844 | ||||||
Northrop Grumman Corp. | 108,033 | 14,904,233 | ||||||
Oshkosh Corp. | 35,920 | 1,607,779 | ||||||
Owens Corning | 43,850 | 1,405,831 | ||||||
PACCAR, Inc. | 74,121 | 4,841,584 | ||||||
Pall Corp. | 14,840 | 1,356,673 | ||||||
Parker-Hannifin Corp. | 43,197 | 5,487,315 | ||||||
Pentair plc | 19,637 | 1,316,661 | ||||||
Precision Castparts Corp. | 14,216 | 3,137,471 | ||||||
Quanta Services, Inc. * | 46,100 | 1,571,088 | ||||||
Raytheon Co. | 115,515 | 11,999,698 | ||||||
Rockwell Automation, Inc. | 18,150 | 2,039,153 | ||||||
Rockwell Collins, Inc. | 34,430 | 2,897,285 | ||||||
Roper Industries, Inc. | 8,700 | 1,377,210 | ||||||
Snap-on, Inc. | 10,700 | 1,413,898 | ||||||
SPX Corp. | 15,436 | 1,463,179 |
See financial notes 1
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Stanley Black & Decker, Inc. | 30,603 | 2,865,665 | ||||||
Textron, Inc. | 73,820 | 3,065,745 | ||||||
The Boeing Co. | 89,672 | 11,200,930 | ||||||
The Timken Co. | 25,165 | 1,081,843 | ||||||
Trinity Industries, Inc. | 28,400 | 1,014,164 | ||||||
United Rentals, Inc. * | 14,900 | 1,639,894 | ||||||
United Technologies Corp. | 217,792 | 23,303,744 | ||||||
W.W. Grainger, Inc. | 12,838 | 3,168,418 | ||||||
WESCO International, Inc. * | 14,600 | 1,203,186 | ||||||
Xylem, Inc. | 31,855 | 1,158,248 | ||||||
333,684,450 | ||||||||
Commercial & Professional Supplies 0.8% | ||||||||
Cintas Corp. | 31,150 | 2,281,426 | ||||||
Equifax, Inc. | 19,430 | 1,471,628 | ||||||
Manpowergroup, Inc. | 48,590 | 3,243,383 | ||||||
Nielsen N.V. | 26,100 | 1,108,989 | ||||||
Pitney Bowes, Inc. | 89,819 | 2,222,122 | ||||||
R.R. Donnelley & Sons Co. | 168,740 | 2,944,513 | ||||||
Republic Services, Inc. | 82,263 | 3,158,899 | ||||||
Robert Half International, Inc. | 43,010 | 2,356,088 | ||||||
The ADT Corp. | 58,900 | 2,110,976 | ||||||
The Dun & Bradstreet Corp. | 12,540 | 1,540,037 | ||||||
Tyco International Ltd. | 137,987 | 5,923,782 | ||||||
Waste Management, Inc. | 174,214 | 8,517,323 | ||||||
36,879,166 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Coach, Inc. | 101,775 | 3,499,024 | ||||||
D.R. Horton, Inc. | 60,490 | 1,378,567 | ||||||
Fossil Group, Inc. * | 9,500 | 965,770 | ||||||
Garmin Ltd. (b) | 32,670 | 1,812,532 | ||||||
Harman International Industries, Inc. | 10,020 | 1,075,547 | ||||||
Hasbro, Inc. | 38,341 | 2,205,758 | ||||||
Jarden Corp. * | 21,915 | 1,426,447 | ||||||
Leggett & Platt, Inc. | 55,217 | 2,174,445 | ||||||
Mattel, Inc. | 85,935 | 2,670,000 | ||||||
Mohawk Industries, Inc. * | 11,735 | 1,666,839 | ||||||
Newell Rubbermaid, Inc. | 61,850 | 2,061,461 | ||||||
NIKE, Inc., Class B | 126,927 | 11,800,403 | ||||||
NVR, Inc. * | 1,529 | 1,876,970 | ||||||
PVH Corp. | 8,100 | 926,235 | ||||||
Ralph Lauren Corp. | 14,220 | 2,344,025 | ||||||
Tupperware Brands Corp. | 13,058 | 832,448 | ||||||
VF Corp. | 48,180 | 3,260,822 | ||||||
Whirlpool Corp. | 27,155 | 4,672,018 | ||||||
46,649,311 | ||||||||
Consumer Services 1.6% | ||||||||
Apollo Education Group, Inc. * | 95,150 | 2,726,999 | ||||||
Brinker International, Inc. | 31,055 | 1,665,790 | ||||||
Carnival Corp. | 106,410 | 4,272,362 | ||||||
Chipotle Mexican Grill, Inc. * | 1,787 | 1,140,106 | ||||||
Darden Restaurants, Inc. | 52,462 | 2,716,482 | ||||||
DeVry Education Group, Inc. | 26,000 | 1,258,660 | ||||||
Graham Holdings Co., Class B | 2,120 | 1,661,232 | ||||||
H&R Block, Inc. | 54,165 | 1,750,071 | ||||||
International Game Technology | 87,583 | 1,435,485 | ||||||
Las Vegas Sands Corp. | 23,200 | 1,444,432 | ||||||
Marriott International, Inc., Class A | 35,789 | 2,711,017 | ||||||
McDonald’s Corp. | 278,188 | 26,074,561 | ||||||
MGM Resorts International * | 52,315 | 1,216,324 | ||||||
Royal Caribbean Cruises Ltd. | 37,629 | 2,557,643 | ||||||
Service Corp. International | 60,600 | 1,325,322 | ||||||
Starbucks Corp. | 68,390 | 5,167,549 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 31,370 | 2,404,824 | ||||||
Wyndham Worldwide Corp. | 34,540 | 2,682,722 | ||||||
Wynn Resorts Ltd. | 11,704 | 2,223,877 | ||||||
Yum! Brands, Inc. | 82,830 | 5,949,679 | ||||||
72,385,137 | ||||||||
Diversified Financials 3.2% | ||||||||
Ally Financial, Inc. * | 39,600 | 898,920 | ||||||
American Express Co. | 153,217 | 13,781,869 | ||||||
Ameriprise Financial, Inc. | 29,334 | 3,701,071 | ||||||
Berkshire Hathaway, Inc., Class B * | 242,426 | 33,978,428 | ||||||
BlackRock, Inc. | 11,900 | 4,059,209 | ||||||
Capital One Financial Corp. | 123,032 | 10,183,359 | ||||||
CME Group, Inc. | 43,900 | 3,679,259 | ||||||
Discover Financial Services | 73,322 | 4,676,477 | ||||||
E*TRADE Financial Corp. * | 40,000 | 892,000 | ||||||
Franklin Resources, Inc. | 85,209 | 4,738,472 | ||||||
Invesco Ltd. | 60,000 | 2,428,200 | ||||||
Legg Mason, Inc. | 43,420 | 2,257,840 | ||||||
Leucadia National Corp. | 32,500 | 772,850 | ||||||
McGraw Hill Financial, Inc. | 58,668 | 5,308,281 | ||||||
Moody’s Corp. | 22,270 | 2,209,852 | ||||||
Morgan Stanley | 200,983 | 7,024,356 | ||||||
Northern Trust Corp. | 35,210 | 2,334,423 | ||||||
PHH Corp. * | 53,158 | 1,259,313 | ||||||
State Street Corp. | 62,636 | 4,726,512 | ||||||
T. Rowe Price Group, Inc. | 40,345 | 3,311,921 | ||||||
The Bank of New York Mellon Corp. | 167,449 | 6,483,625 | ||||||
The Charles Schwab Corp. (a) | 106,515 | 3,053,785 | ||||||
The Goldman Sachs Group, Inc. | 96,309 | 18,297,747 | ||||||
The NASDAQ OMX Group, Inc. | 29,083 | 1,258,131 | ||||||
141,315,900 | ||||||||
Energy 14.4% | ||||||||
Alpha Natural Resources, Inc. *(b) | 285,000 | 558,600 | ||||||
Anadarko Petroleum Corp. | 87,379 | 8,019,645 | ||||||
Apache Corp. | 106,568 | 8,227,050 | ||||||
Arch Coal, Inc. (b) | 328,200 | 708,912 | ||||||
Baker Hughes, Inc. | 120,186 | 6,365,050 | ||||||
Cameron International Corp. * | 40,653 | 2,420,886 | ||||||
Chesapeake Energy Corp. | 202,726 | 4,496,463 | ||||||
Chevron Corp. | 927,912 | 111,303,044 | ||||||
Cimarex Energy Co. | 10,845 | 1,232,751 | ||||||
ConocoPhillips | 936,782 | 67,588,821 | ||||||
CONSOL Energy, Inc. | 44,535 | 1,638,888 | ||||||
Denbury Resources, Inc. | 70,200 | 870,480 | ||||||
Devon Energy Corp. | 141,727 | 8,503,620 |
2 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Diamond Offshore Drilling, Inc. (b) | 49,020 | 1,848,544 | ||||||
Dresser-Rand Group, Inc. * | 17,200 | 1,405,240 | ||||||
Energen Corp. | 13,310 | 901,087 | ||||||
EOG Resources, Inc. | 51,201 | 4,866,655 | ||||||
EQT Corp. | 12,100 | 1,137,884 | ||||||
Exxon Mobil Corp. | 2,135,781 | 206,551,380 | ||||||
FMC Technologies, Inc. * | 29,578 | 1,657,551 | ||||||
Halliburton Co. | 164,970 | 9,096,446 | ||||||
Helmerich & Payne, Inc. | 14,795 | 1,284,502 | ||||||
Hess Corp. | 128,104 | 10,864,500 | ||||||
HollyFrontier Corp. | 64,902 | 2,945,253 | ||||||
Kinder Morgan, Inc. (b) | 92,800 | 3,591,360 | ||||||
Marathon Oil Corp. | 401,719 | 14,220,853 | ||||||
Marathon Petroleum Corp. | 129,531 | 11,774,368 | ||||||
Murphy Oil Corp. | 131,250 | 7,007,437 | ||||||
Nabors Industries Ltd. | 116,000 | 2,070,600 | ||||||
National Oilwell Varco, Inc. | 92,501 | 6,719,273 | ||||||
Newfield Exploration Co. * | 45,307 | 1,477,461 | ||||||
Noble Energy, Inc. | 35,670 | 2,055,662 | ||||||
Occidental Petroleum Corp. | 208,200 | 18,515,226 | ||||||
Oceaneering International, Inc. | 14,500 | 1,018,915 | ||||||
Oil States International, Inc. * | 13,200 | 788,568 | ||||||
ONEOK, Inc. | 39,120 | 2,305,733 | ||||||
Patterson-UTI Energy, Inc. | 47,800 | 1,100,834 | ||||||
Peabody Energy Corp. | 177,645 | 1,852,837 | ||||||
Phillips 66 | 414,008 | 32,499,628 | ||||||
Pioneer Natural Resources Co. | 7,300 | 1,380,138 | ||||||
QEP Resources, Inc. | 50,442 | 1,264,581 | ||||||
Schlumberger Ltd. | 205,063 | 20,231,516 | ||||||
SEACOR Holdings, Inc. * | 14,600 | 1,203,770 | ||||||
Seadrill Ltd. (b) | 93,500 | 2,150,500 | ||||||
Southwestern Energy Co. * | 36,340 | 1,181,413 | ||||||
Spectra Energy Corp. | 121,560 | 4,756,643 | ||||||
Tesoro Corp. | 82,992 | 5,926,459 | ||||||
The Williams Cos., Inc. | 108,509 | 6,023,335 | ||||||
Valero Energy Corp. | 412,966 | 20,685,467 | ||||||
Western Refining, Inc. | 27,300 | 1,244,607 | ||||||
World Fuel Services Corp. | 81,200 | 3,348,688 | ||||||
WPX Energy, Inc. * | 116,891 | 2,234,956 | ||||||
643,124,080 | ||||||||
Food & Staples Retailing 4.2% | ||||||||
Casey’s General Stores, Inc. | 16,112 | 1,319,089 | ||||||
Costco Wholesale Corp. | 158,463 | 21,134,210 | ||||||
CVS Health Corp. | 493,816 | 42,374,351 | ||||||
Safeway, Inc. | 254,312 | 8,865,316 | ||||||
SUPERVALU, Inc. * | 272,920 | 2,355,300 | ||||||
Sysco Corp. | 275,739 | 10,626,981 | ||||||
The Kroger Co. | 267,434 | 14,898,748 | ||||||
United Natural Foods, Inc. * | 15,000 | 1,020,300 | ||||||
Wal-Mart Stores, Inc. | 826,472 | 63,035,020 | ||||||
Walgreen Co. | 329,682 | 21,172,178 | ||||||
Whole Foods Market, Inc. | 69,400 | 2,729,502 | ||||||
189,530,995 | ||||||||
Food, Beverage & Tobacco 5.3% | ||||||||
Altria Group, Inc. | 477,216 | 23,068,621 | ||||||
Archer-Daniels-Midland Co. | 359,274 | 16,885,878 | ||||||
Brown-Forman Corp., Class B | 20,277 | 1,879,070 | ||||||
Bunge Ltd. | 124,636 | 11,048,981 | ||||||
Campbell Soup Co. | 57,430 | 2,536,683 | ||||||
Coca-Cola Enterprises, Inc. | 93,395 | 4,048,673 | ||||||
ConAgra Foods, Inc. | 166,320 | 5,713,092 | ||||||
Constellation Brands, Inc., Class A * | 16,220 | 1,484,779 | ||||||
Dr Pepper Snapple Group, Inc. | 57,241 | 3,963,939 | ||||||
General Mills, Inc. | 143,618 | 7,462,391 | ||||||
Hormel Foods Corp. | 29,439 | 1,587,056 | ||||||
Ingredion, Inc. | 22,500 | 1,738,125 | ||||||
Kellogg Co. | 63,737 | 4,076,619 | ||||||
Kraft Foods Group, Inc. | 131,374 | 7,402,925 | ||||||
Lorillard, Inc. | 89,354 | 5,495,271 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 21,178 | 1,497,708 | ||||||
Mead Johnson Nutrition Co. | 12,900 | 1,281,099 | ||||||
Molson Coors Brewing Co., Class B | 24,980 | 1,858,012 | ||||||
Mondelez International, Inc., Class A | 471,695 | 16,631,966 | ||||||
Monster Beverage Corp. * | 12,200 | 1,230,736 | ||||||
PepsiCo, Inc. | 350,763 | 33,732,878 | ||||||
Philip Morris International, Inc. | 416,488 | 37,071,597 | ||||||
Reynolds American, Inc. | 77,427 | 4,870,933 | ||||||
The Coca-Cola Co. | 685,043 | 28,689,601 | ||||||
The Hershey Co. | 17,312 | 1,660,394 | ||||||
The JM Smucker Co. | 30,625 | 3,185,000 | ||||||
Tyson Foods, Inc., Class A | 142,615 | 5,754,515 | ||||||
235,856,542 | ||||||||
Health Care Equipment & Services 6.0% | ||||||||
Abbott Laboratories | 381,263 | 16,619,254 | ||||||
Aetna, Inc. | 148,291 | 12,235,490 | ||||||
AmerisourceBergen Corp. | 107,067 | 9,144,592 | ||||||
Baxter International, Inc. | 137,153 | 9,619,911 | ||||||
Becton, Dickinson & Co. | 56,221 | 7,235,643 | ||||||
Boston Scientific Corp. * | 299,965 | 3,983,535 | ||||||
C.R. Bard, Inc. | 17,500 | 2,869,475 | ||||||
Cardinal Health, Inc. | 164,667 | 12,923,066 | ||||||
CareFusion Corp. * | 37,715 | 2,163,710 | ||||||
Catamaran Corp. * | 17,100 | 815,157 | ||||||
Cigna Corp. | 38,509 | 3,834,341 | ||||||
Community Health Systems, Inc. * | 53,262 | 2,927,812 | ||||||
Covidien plc | 81,342 | 7,519,254 | ||||||
DaVita HealthCare Partners, Inc. * | 28,220 | 2,203,135 | ||||||
DENTSPLY International, Inc. | 24,735 | 1,255,796 | ||||||
Express Scripts Holding Co. * | 115,007 | 8,834,838 | ||||||
HCA Holdings, Inc. * | 150,874 | 10,568,724 | ||||||
Health Net, Inc. * | 86,270 | 4,098,688 | ||||||
Henry Schein, Inc. * | 19,552 | 2,346,827 | ||||||
Humana, Inc. | 69,170 | 9,604,255 | ||||||
Intuitive Surgical, Inc. * | 2,479 | 1,229,088 | ||||||
Laboratory Corp. of America Holdings * | 18,499 | 2,021,756 | ||||||
LifePoint Hospitals, Inc. * | 20,730 | 1,451,100 | ||||||
Magellan Health, Inc. * | 20,200 | 1,222,504 | ||||||
McKesson Corp. | 83,217 | 16,927,170 | ||||||
Medtronic, Inc. | 225,987 | 15,403,274 | ||||||
Omnicare, Inc. | 36,010 | 2,397,906 |
See financial notes 3
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Owens & Minor, Inc. | 47,302 | 1,576,103 | ||||||
Patterson Cos., Inc. | 33,275 | 1,434,485 | ||||||
Quest Diagnostics, Inc. | 67,552 | 4,286,850 | ||||||
St. Jude Medical, Inc. | 66,260 | 4,251,904 | ||||||
Stryker Corp. | 59,618 | 5,218,364 | ||||||
Tenet Healthcare Corp. * | 31,493 | 1,765,183 | ||||||
UnitedHealth Group, Inc. | 386,796 | 36,749,488 | ||||||
Universal Health Services, Inc., Class B | 15,448 | 1,602,112 | ||||||
Varian Medical Systems, Inc. * | 19,303 | 1,623,768 | ||||||
WellCare Health Plans, Inc. * | 16,700 | 1,133,429 | ||||||
WellPoint, Inc. | 253,350 | 32,096,911 | ||||||
Zimmer Holdings, Inc. | 45,824 | 5,097,462 | ||||||
268,292,360 | ||||||||
Household & Personal Products 2.2% | ||||||||
Avon Products, Inc. | 212,725 | 2,212,340 | ||||||
Church & Dwight Co., Inc. | 17,700 | 1,281,657 | ||||||
Colgate-Palmolive Co. | 161,868 | 10,825,732 | ||||||
Energizer Holdings, Inc. | 12,320 | 1,511,048 | ||||||
Herbalife Ltd. (b) | 21,800 | 1,143,628 | ||||||
Kimberly-Clark Corp. | 81,901 | 9,358,827 | ||||||
The Clorox Co. | 25,420 | 2,529,290 | ||||||
The Estee Lauder Cos., Inc., Class A | 28,134 | 2,115,114 | ||||||
The Procter & Gamble Co. | 783,835 | 68,405,281 | ||||||
99,382,917 | ||||||||
Insurance 3.2% | ||||||||
ACE Ltd. | 56,604 | 6,186,817 | ||||||
Aflac, Inc. | 102,798 | 6,140,125 | ||||||
American Financial Group, Inc. | 24,840 | 1,486,177 | ||||||
American International Group, Inc. | 188,942 | 10,121,623 | ||||||
Aon plc | 43,236 | 3,718,296 | ||||||
Arch Capital Group Ltd. * | 42,875 | 2,414,720 | ||||||
Assurant, Inc. | 39,355 | 2,684,798 | ||||||
Axis Capital Holdings Ltd. | 46,650 | 2,245,731 | ||||||
Cincinnati Financial Corp. | 48,480 | 2,446,786 | ||||||
Everest Re Group Ltd. | 12,525 | 2,137,391 | ||||||
FNF Group | 60,984 | 1,819,763 | ||||||
Genworth Financial, Inc., Class A * | 123,000 | 1,720,770 | ||||||
HCC Insurance Holdings, Inc. | 25,900 | 1,351,721 | ||||||
Lincoln National Corp. | 43,280 | 2,370,013 | ||||||
Loews Corp. | 98,889 | 4,311,560 | ||||||
Marsh & McLennan Cos., Inc. | 87,320 | 4,747,588 | ||||||
MetLife, Inc. | 141,218 | 7,659,664 | ||||||
PartnerRe Ltd. | 21,156 | 2,447,538 | ||||||
Principal Financial Group, Inc. | 40,171 | 2,103,755 | ||||||
Prudential Financial, Inc. | 87,037 | 7,706,256 | ||||||
Reinsurance Group of America, Inc. | 16,400 | 1,381,700 | ||||||
RenaissanceRe Holdings Ltd. | 18,925 | 1,955,520 | ||||||
The Allstate Corp. | 131,243 | 8,511,109 | ||||||
The Chubb Corp. | 105,529 | 10,485,361 | ||||||
The Hartford Financial Services Group, Inc. | 158,427 | 6,270,541 | ||||||
The Progressive Corp. | 221,645 | 5,853,644 | ||||||
The Travelers Cos., Inc. | 241,772 | 24,370,618 | ||||||
Torchmark Corp. | 34,365 | 1,819,970 | ||||||
Unum Group | 84,325 | 2,821,515 | ||||||
W. R. Berkley Corp. | 40,563 | 2,090,617 | ||||||
White Mountains Insurance Group Ltd. | 2,129 | 1,330,455 | ||||||
XL Group plc | 55,885 | 1,893,384 | ||||||
144,605,526 | ||||||||
Materials 3.8% | ||||||||
Air Products & Chemicals, Inc. | 45,085 | 6,071,146 | ||||||
Airgas, Inc. | 16,900 | 1,885,026 | ||||||
Albemarle Corp. | 19,913 | 1,162,521 | ||||||
Alcoa, Inc. | 555,930 | 9,317,387 | ||||||
Allegheny Technologies, Inc. | 42,011 | 1,380,061 | ||||||
AptarGroup, Inc. | 21,300 | 1,325,712 | ||||||
Ashland, Inc. | 15,535 | 1,678,867 | ||||||
Avery Dennison Corp. | 34,600 | 1,621,010 | ||||||
Ball Corp. | 43,980 | 2,833,631 | ||||||
Bemis Co., Inc. | 37,038 | 1,424,852 | ||||||
Celanese Corp., Series A | 28,700 | 1,685,551 | ||||||
CF Industries Holdings, Inc. | 10,871 | 2,826,460 | ||||||
Cliffs Natural Resources, Inc. (b) | 138,600 | 1,556,478 | ||||||
Commercial Metals Co. | 83,645 | 1,446,222 | ||||||
Crown Holdings, Inc. * | 24,400 | 1,169,492 | ||||||
Domtar Corp. | 54,382 | 2,233,469 | ||||||
E.I. du Pont de Nemours & Co. | 164,886 | 11,401,867 | ||||||
Eastman Chemical Co. | 31,820 | 2,570,420 | ||||||
Ecolab, Inc. | 21,091 | 2,345,952 | ||||||
FMC Corp. | 18,080 | 1,036,888 | ||||||
Freeport-McMoRan, Inc. | 408,540 | 11,643,390 | ||||||
Huntsman Corp. | 69,015 | 1,683,966 | ||||||
International Flavors & Fragrances, Inc. | 12,035 | 1,193,270 | ||||||
International Paper Co. | 139,893 | 7,081,384 | ||||||
LyondellBasell Industries N.V., Class A | 107,480 | 9,848,392 | ||||||
MeadWestvaco Corp. | 55,540 | 2,453,202 | ||||||
Monsanto Co. | 70,169 | 8,072,242 | ||||||
Newmont Mining Corp. | 260,711 | 4,890,938 | ||||||
Nucor Corp. | 133,016 | 7,190,845 | ||||||
Owens-Illinois, Inc. * | 53,445 | 1,377,278 | ||||||
Packaging Corp. of America | 16,521 | 1,190,834 | ||||||
PPG Industries, Inc. | 24,900 | 5,071,881 | ||||||
Praxair, Inc. | 55,595 | 7,004,414 | ||||||
Reliance Steel & Aluminum Co. | 35,520 | 2,396,890 | ||||||
Rock-Tenn Co., Class A | 21,400 | 1,094,610 | ||||||
Rockwood Holdings, Inc. | 14,100 | 1,084,431 | ||||||
RPM International, Inc. | 25,265 | 1,144,505 | ||||||
Sealed Air Corp. | 45,275 | 1,641,219 | ||||||
Sigma-Aldrich Corp. | 19,130 | 2,599,958 | ||||||
Sonoco Products Co. | 34,655 | 1,416,350 | ||||||
Southern Copper Corp. | 51,697 | 1,487,840 | ||||||
Steel Dynamics, Inc. | 99,550 | 2,290,645 | ||||||
The Dow Chemical Co. | 286,968 | 14,176,219 | ||||||
The Mosaic Co. | 118,331 | 5,243,247 | ||||||
The Sherwin-Williams Co. | 9,365 | 2,149,829 | ||||||
The Valspar Corp. | 18,250 | 1,499,420 | ||||||
United States Steel Corp. | 99,604 | 3,988,144 | ||||||
Vulcan Materials Co. | 22,423 | 1,383,723 | ||||||
169,272,078 |
4 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Media 3.6% | ||||||||
Cablevision Systems Corp., Class A | 116,265 | 2,164,854 | ||||||
CBS Corp., Class B - Non Voting Shares | 119,221 | 6,464,163 | ||||||
Charter Communications, Inc., Class A * | 15,200 | 2,407,528 | ||||||
Comcast Corp., Class A | 439,657 | 24,335,015 | ||||||
DIRECTV * | 196,255 | 17,032,971 | ||||||
Discovery Communications, Inc., Class A * | 54,641 | 1,931,559 | ||||||
Discovery Communications, Inc., Class C * | 48,467 | 1,695,860 | ||||||
DISH Network Corp., Class A * | 31,435 | 2,000,838 | ||||||
Gannett Co., Inc. | 86,830 | 2,735,145 | ||||||
News Corp., Class A * | 87,200 | 1,349,856 | ||||||
Omnicom Group, Inc. | 69,013 | 4,959,274 | ||||||
Scripps Networks Interactive, Inc., Class A | 14,800 | 1,143,152 | ||||||
The Interpublic Group of Cos., Inc. | 84,505 | 1,638,552 | ||||||
The Walt Disney Co. | 317,662 | 29,027,954 | ||||||
Thomson Reuters Corp. | 108,557 | 4,040,492 | ||||||
Time Warner Cable, Inc. | 77,501 | 11,408,922 | ||||||
Time Warner, Inc. | 310,533 | 24,678,057 | ||||||
Twenty-First Century Fox, Inc., Class A | 335,221 | 11,558,420 | ||||||
Viacom, Inc., Class B | 126,098 | 9,164,803 | ||||||
159,737,415 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.9% | ||||||||
AbbVie, Inc. | 167,922 | 10,656,330 | ||||||
Actavis plc * | 13,906 | 3,375,542 | ||||||
Agilent Technologies, Inc. | 54,136 | 2,992,638 | ||||||
Allergan, Inc. | 21,130 | 4,015,968 | ||||||
Amgen, Inc. | 174,623 | 28,320,358 | ||||||
Biogen Idec, Inc. * | 10,450 | 3,355,286 | ||||||
Bristol-Myers Squibb Co. | 318,061 | 18,507,970 | ||||||
Celgene Corp. * | 40,056 | 4,289,597 | ||||||
Covance, Inc. * | 12,323 | 984,608 | ||||||
Eli Lilly & Co. | 253,581 | 16,820,028 | ||||||
Endo International plc * | 18,100 | 1,211,252 | ||||||
Gilead Sciences, Inc. * | 113,887 | 12,755,344 | ||||||
Hospira, Inc. * | 33,050 | 1,774,785 | ||||||
Johnson & Johnson | 529,307 | 57,048,708 | ||||||
Merck & Co., Inc. | 542,262 | 31,418,660 | ||||||
Mettler-Toledo International, Inc. * | 4,300 | 1,111,421 | ||||||
Mylan, Inc. * | 44,875 | 2,403,056 | ||||||
Pfizer, Inc. | 1,775,404 | 53,173,350 | ||||||
Thermo Fisher Scientific, Inc. | 44,645 | 5,248,913 | ||||||
Waters Corp. * | 12,800 | 1,418,240 | ||||||
Zoetis, Inc. | 41,000 | 1,523,560 | ||||||
262,405,614 | ||||||||
Real Estate 1.3% | ||||||||
American Capital Agency Corp. | 35,500 | 807,270 | ||||||
American Tower Corp. | 20,465 | 1,995,337 | ||||||
Annaly Capital Management, Inc. | 398,461 | 4,546,440 | ||||||
Apartment Investment & Management Co., Class A | 42,254 | 1,512,271 | ||||||
AvalonBay Communities, Inc. | 8,999 | 1,402,404 | ||||||
Boston Properties, Inc. | 16,490 | 2,090,107 | ||||||
Crown Castle International Corp. | 20,580 | 1,607,710 | ||||||
Equity Residential | 41,245 | 2,869,002 | ||||||
General Growth Properties, Inc. | 51,400 | 1,331,774 | ||||||
HCP, Inc. | 52,665 | 2,315,680 | ||||||
Health Care REIT, Inc. | 19,800 | 1,407,978 | ||||||
Hospitality Properties Trust | 43,961 | 1,301,685 | ||||||
Host Hotels & Resorts, Inc. | 101,678 | 2,370,114 | ||||||
Iron Mountain, Inc. | 54,880 | 1,979,522 | ||||||
Kimco Realty Corp. | 70,560 | 1,760,472 | ||||||
Plum Creek Timber Co., Inc. | 40,895 | 1,677,104 | ||||||
Prologis, Inc. | 32,800 | 1,366,120 | ||||||
Public Storage | 13,930 | 2,567,856 | ||||||
Rayonier, Inc. | 29,902 | 1,000,820 | ||||||
Simon Property Group, Inc. | 25,411 | 4,553,905 | ||||||
The Macerich Co. | 15,697 | 1,106,639 | ||||||
Ventas, Inc. | 30,278 | 2,074,346 | ||||||
Vornado Realty Trust | 26,841 | 2,938,553 | ||||||
Weyerhaeuser Co. | 276,742 | 9,370,484 | ||||||
55,953,593 | ||||||||
Retailing 4.9% | ||||||||
Aaron’s, Inc. | 42,000 | 1,039,920 | ||||||
Abercrombie & Fitch Co., Class A | 45,778 | 1,532,648 | ||||||
Advance Auto Parts, Inc. | 13,745 | 2,019,965 | ||||||
Amazon.com, Inc. * | 13,150 | 4,016,799 | ||||||
American Eagle Outfitters, Inc. | 153,135 | 1,970,848 | ||||||
AutoNation, Inc. * | 26,100 | 1,494,486 | ||||||
AutoZone, Inc. * | 3,221 | 1,782,888 | ||||||
Bed Bath & Beyond, Inc. * | 72,305 | 4,869,019 | ||||||
Best Buy Co., Inc. | 278,576 | 9,510,585 | ||||||
Big Lots, Inc. | 53,265 | 2,431,547 | ||||||
CarMax, Inc. * | 31,707 | 1,772,738 | ||||||
Core-Mark Holding Co., Inc. | 30,765 | 1,785,293 | ||||||
CST Brands, Inc. | 57,000 | 2,180,250 | ||||||
Dick’s Sporting Goods, Inc. | 23,800 | 1,079,806 | ||||||
Dillard’s, Inc., Class A | 13,875 | 1,467,420 | ||||||
Dollar General Corp. * | 65,100 | 4,079,817 | ||||||
Dollar Tree, Inc. * | 51,834 | 3,139,585 | ||||||
Expedia, Inc. | 21,165 | 1,798,390 | ||||||
Family Dollar Stores, Inc. | 30,062 | 2,353,554 | ||||||
Foot Locker, Inc. | 45,695 | 2,559,377 | ||||||
GameStop Corp., Class A (b) | 84,190 | 3,599,964 | ||||||
Genuine Parts Co. | 45,900 | 4,455,972 | ||||||
Guess?, Inc. | 36,600 | 811,422 | ||||||
J.C. Penney Co., Inc. *(b) | 440,210 | 3,349,998 | ||||||
Kohl’s Corp. | 154,245 | 8,363,164 | ||||||
L Brands, Inc. | 57,620 | 4,155,554 | ||||||
Liberty Interactive Corp., Class A * | 126,625 | 3,309,978 | ||||||
Lowe’s Cos., Inc. | 428,245 | 24,495,614 | ||||||
Macy’s, Inc. | 108,936 | 6,298,680 | ||||||
Murphy USA, Inc. * | 47,800 | 2,738,940 | ||||||
Nordstrom, Inc. | 42,755 | 3,104,441 | ||||||
O’Reilly Automotive, Inc. * | 16,930 | 2,977,648 | ||||||
PetSmart, Inc. | 34,440 | 2,491,734 | ||||||
Rent-A-Center, Inc. | 48,770 | 1,510,407 |
See financial notes 5
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ross Stores, Inc. | 34,490 | 2,784,033 | ||||||
Sears Holdings Corp. *(b) | 65,749 | 2,295,955 | ||||||
Signet Jewelers Ltd. | 15,700 | 1,884,157 | ||||||
Staples, Inc. | 645,556 | 8,185,650 | ||||||
Target Corp. | 380,883 | 23,546,187 | ||||||
The Gap, Inc. | 124,075 | 4,701,202 | ||||||
The Home Depot, Inc. | 329,143 | 32,098,025 | ||||||
The Priceline Group, Inc. * | 1,484 | 1,790,016 | ||||||
The TJX Cos., Inc. | 150,788 | 9,547,896 | ||||||
Tiffany & Co. | 18,335 | 1,762,360 | ||||||
Tractor Supply Co. | 22,700 | 1,662,094 | ||||||
Urban Outfitters, Inc. * | 29,654 | 900,295 | ||||||
Williams-Sonoma, Inc. | 23,545 | 1,531,131 | ||||||
217,237,452 | ||||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||
Altera Corp. | 45,650 | 1,568,991 | ||||||
Analog Devices, Inc. | 56,765 | 2,816,679 | ||||||
Applied Materials, Inc. | 311,726 | 6,886,027 | ||||||
Avago Technologies Ltd. | 17,200 | 1,483,500 | ||||||
Broadcom Corp., Class A | 100,627 | 4,214,259 | ||||||
Intel Corp. | 1,856,876 | 63,152,353 | ||||||
KLA-Tencor Corp. | 36,080 | 2,855,732 | ||||||
Lam Research Corp. | 25,790 | 2,008,009 | ||||||
Linear Technology Corp. | 30,355 | 1,300,408 | ||||||
Marvell Technology Group Ltd. | 135,530 | 1,821,523 | ||||||
Maxim Integrated Products, Inc. | 71,600 | 2,100,744 | ||||||
Microchip Technology, Inc. | 37,080 | 1,598,519 | ||||||
Micron Technology, Inc. * | 133,212 | 4,407,985 | ||||||
NVIDIA Corp. | 89,937 | 1,757,369 | ||||||
Texas Instruments, Inc. | 288,309 | 14,317,425 | ||||||
Xilinx, Inc. | 46,220 | 2,055,866 | ||||||
114,345,389 | ||||||||
Software & Services 6.5% | ||||||||
Accenture plc, Class A | 111,365 | 9,033,929 | ||||||
Activision Blizzard, Inc. | 83,600 | 1,667,820 | ||||||
Adobe Systems, Inc. * | 54,407 | 3,815,019 | ||||||
Alliance Data Systems Corp. * | 6,780 | 1,921,113 | ||||||
Amdocs Ltd. | 49,200 | 2,338,968 | ||||||
AOL, Inc. * | 60,180 | 2,619,635 | ||||||
Autodesk, Inc. * | 25,100 | 1,444,254 | ||||||
Automatic Data Processing, Inc. | 80,219 | 6,560,310 | ||||||
Booz Allen Hamilton Holding Corp. | 21,900 | 577,065 | ||||||
Broadridge Financial Solutions, Inc. | 25,500 | 1,120,215 | ||||||
CA, Inc. | 84,505 | 2,455,715 | ||||||
CACI International, Inc., Class A * | 13,424 | 1,104,661 | ||||||
Citrix Systems, Inc. * | 19,463 | 1,250,109 | ||||||
Cognizant Technology Solutions Corp., Class A * | 45,700 | 2,232,445 | ||||||
Computer Sciences Corp. | 72,545 | 4,381,718 | ||||||
CoreLogic, Inc. * | 64,600 | 2,026,502 | ||||||
eBay, Inc. * | 142,227 | 7,466,918 | ||||||
Electronic Arts, Inc. * | 29,708 | 1,217,137 | ||||||
Facebook, Inc., Class A * | 15,200 | 1,139,848 | ||||||
Fidelity National Information Services, Inc. | 65,423 | 3,820,049 | ||||||
Fiserv, Inc. * | 48,738 | 3,386,316 | ||||||
Google, Inc., Class A * | 14,189 | 8,057,507 | ||||||
Google, Inc., Class C * | 14,023 | 7,839,979 | ||||||
IAC/InterActiveCorp | 22,162 | 1,500,146 | ||||||
International Business Machines Corp. | 333,101 | 54,761,804 | ||||||
Intuit, Inc. | 41,722 | 3,671,953 | ||||||
Leidos Holdings, Inc. | 60,000 | 2,194,200 | ||||||
MasterCard, Inc., Class A | 67,238 | 5,631,183 | ||||||
Microsoft Corp. | 1,945,428 | 91,337,845 | ||||||
Oracle Corp. | 564,344 | 22,037,633 | ||||||
Paychex, Inc. | 53,159 | 2,495,283 | ||||||
Science Applications International Corp. | 11,200 | 547,792 | ||||||
Symantec Corp. | 204,645 | 5,079,289 | ||||||
Teradata Corp. * | 26,800 | 1,134,176 | ||||||
The Western Union Co. | 232,410 | 3,941,674 | ||||||
Total System Services, Inc. | 37,270 | 1,259,353 | ||||||
Visa, Inc., Class A | 20,653 | 4,986,254 | ||||||
Xerox Corp. | 500,126 | 6,641,673 | ||||||
Yahoo! Inc. * | 83,505 | 3,845,405 | ||||||
288,542,895 | ||||||||
Technology Hardware & Equipment 4.7% | ||||||||
Amphenol Corp., Class A | 43,700 | 2,210,346 | ||||||
Anixter International, Inc. | 12,920 | 1,100,396 | ||||||
Apple, Inc. | 450,457 | 48,649,356 | ||||||
Arrow Electronics, Inc. * | 62,625 | 3,560,858 | ||||||
Avnet, Inc. | 88,700 | 3,836,275 | ||||||
Cisco Systems, Inc. | 1,393,051 | 34,087,958 | ||||||
Corning, Inc. | 294,171 | 6,009,914 | ||||||
EMC Corp. | 320,043 | 9,194,835 | ||||||
Harris Corp. | 37,725 | 2,625,660 | ||||||
Hewlett-Packard Co. | 1,567,491 | 56,241,577 | ||||||
Ingram Micro, Inc., Class A * | 195,051 | 5,235,169 | ||||||
Jabil Circuit, Inc. | 119,095 | 2,495,040 | ||||||
Juniper Networks, Inc. | 122,170 | 2,574,122 | ||||||
Lexmark International, Inc., Class A | 35,545 | 1,534,122 | ||||||
Motorola Solutions, Inc. | 70,872 | 4,571,244 | ||||||
NetApp, Inc. | 39,730 | 1,700,444 | ||||||
QUALCOMM, Inc. | 148,355 | 11,647,351 | ||||||
SanDisk Corp. | 23,765 | 2,237,237 | ||||||
SYNNEX Corp. | 17,795 | 1,231,058 | ||||||
Tech Data Corp. * | 65,540 | 3,914,049 | ||||||
Vishay Intertechnology, Inc. | 79,540 | 1,074,585 | ||||||
Western Digital Corp. | 37,788 | 3,717,206 | ||||||
209,448,802 | ||||||||
Telecommunication Services 4.0% | ||||||||
AT&T, Inc. | 2,714,031 | 94,556,840 | ||||||
CenturyLink, Inc. | 202,707 | 8,408,286 | ||||||
Frontier Communications Corp. | 627,098 | 4,101,221 | ||||||
Sprint Corp. * | 630,492 | 3,738,818 | ||||||
Telephone & Data Systems, Inc. | 83,627 | 2,144,196 | ||||||
Verizon Communications, Inc. | 1,244,249 | 62,523,512 | ||||||
Windstream Holdings, Inc. (b) | 384,600 | 4,030,608 | ||||||
179,503,481 |
6 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Transportation 1.8% | ||||||||
Avis Budget Group, Inc. * | 43,590 | 2,430,143 | ||||||
C.H. Robinson Worldwide, Inc. | 62,044 | 4,294,065 | ||||||
CSX Corp. | 325,633 | 11,602,304 | ||||||
Expeditors International of Washington, Inc. | 59,525 | 2,539,336 | ||||||
FedEx Corp. | 88,233 | 14,770,204 | ||||||
Hertz Global Holdings, Inc. * | 110,100 | 2,413,392 | ||||||
J.B. Hunt Transport Services, Inc. | 16,245 | 1,295,864 | ||||||
Kansas City Southern | 8,887 | 1,091,235 | ||||||
Norfolk Southern Corp. | 63,779 | 7,056,509 | ||||||
Ryder System, Inc. | 26,220 | 2,319,683 | ||||||
Union Pacific Corp. | 144,235 | 16,796,166 | ||||||
United Parcel Service, Inc., Class B | 118,641 | 12,446,627 | ||||||
79,055,528 | ||||||||
Utilities 4.5% | ||||||||
AES Corp. | 338,640 | 4,764,665 | ||||||
AGL Resources, Inc. | 27,414 | 1,477,889 | ||||||
Alliant Energy Corp. | 33,275 | 2,060,055 | ||||||
Ameren Corp. | 114,490 | 4,847,507 | ||||||
American Electric Power Co., Inc. | 162,901 | 9,503,644 | ||||||
American Water Works Co., Inc. | 36,100 | 1,926,657 | ||||||
Atmos Energy Corp. | 32,760 | 1,736,280 | ||||||
Calpine Corp. * | 104,350 | 2,381,267 | ||||||
CenterPoint Energy, Inc. | 148,970 | 3,657,214 | ||||||
CMS Energy Corp. | 76,205 | 2,489,617 | ||||||
Consolidated Edison, Inc. | 111,302 | 7,052,095 | ||||||
Dominion Resources, Inc. | 152,080 | 10,843,304 | ||||||
DTE Energy Co. | 61,730 | 5,071,737 | ||||||
Duke Energy Corp. | 149,177 | 12,254,891 | ||||||
Edison International | 109,376 | 6,844,750 | ||||||
Entergy Corp. | 111,170 | 9,340,503 | ||||||
Exelon Corp. | 415,673 | 15,209,475 | ||||||
FirstEnergy Corp. | 244,665 | 9,135,791 | ||||||
Great Plains Energy, Inc. | 48,270 | 1,299,911 | ||||||
Integrys Energy Group, Inc. | 36,835 | 2,677,168 | ||||||
MDU Resources Group, Inc. | 56,158 | 1,582,533 | ||||||
National Fuel Gas Co. | 15,545 | 1,076,180 | ||||||
NextEra Energy, Inc. | 93,459 | 9,366,461 | ||||||
NiSource, Inc. | 77,235 | 3,248,504 | ||||||
Northeast Utilities | 54,215 | 2,675,510 | ||||||
NRG Energy, Inc. | 122,682 | 3,678,006 | ||||||
OGE Energy Corp. | 43,484 | 1,621,518 | ||||||
Pepco Holdings, Inc. | 113,465 | 3,102,133 | ||||||
PG&E Corp. | 167,111 | 8,409,026 | ||||||
Pinnacle West Capital Corp. | 44,985 | 2,765,228 | ||||||
PPL Corp. | 172,875 | 6,048,896 | ||||||
Public Service Enterprise Group, Inc. | 204,322 | 8,440,542 | ||||||
SCANA Corp. | 43,359 | 2,379,976 | ||||||
Sempra Energy | 55,215 | 6,073,650 | ||||||
TECO Energy, Inc. | 107,025 | 2,098,760 | ||||||
The Southern Co. | 272,006 | 12,610,198 | ||||||
UGI Corp. | 54,280 | 2,045,813 | ||||||
Vectren Corp. | 28,000 | 1,258,600 | ||||||
Westar Energy, Inc. | 36,570 | 1,382,712 | ||||||
Wisconsin Energy Corp. | 45,723 | 2,270,604 | ||||||
Xcel Energy, Inc. | 162,785 | 5,448,414 | ||||||
202,157,684 | ||||||||
Total Common Stock | ||||||||
(Cost $3,311,517,644) | 4,445,205,810 | |||||||
Other Investment Companies 1.0% of net assets | ||||||||
Money Market Fund 0.6% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (e) | 27,373,071 | 27,373,071 | ||||||
Securities Lending Collateral 0.4% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (e) | 18,599,659 | 18,599,659 | ||||||
Total Other Investment Companies | ||||||||
(Cost $45,972,730) | 45,972,730 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (c)(d) | 200,000 | 199,999 | ||||||
0.01%, 12/18/14 (c)(d) | 3,100,000 | 3,099,950 | ||||||
Total Short-Term Investments | ||||||||
(Cost $3,299,949) | 3,299,949 | |||||||
End of Investments. |
At 10/31/14 tax basis cost of the fund’s investments was $3,376,361,505 and the unrealized appreciation and depreciation were $1,151,767,191 and ($33,650,207), respectively, with a net unrealized appreciation of $1,118,116,984.
* | 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 $18,481,001. Non-Cash Collateral pledged to the fund for securities on loan amounted to $413,538. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. | |
(e) | The rate shown is the 7-day yield. |
REIT — | Real Estate Investment Trust |
See financial notes 7
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/19/14 | 140 | 14,079,800 | 516,095 |
8 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .5% | Common Stock | 936,334,702 | 1,201,580,309 | ||||||||
0 | .0% | Rights | 266,857 | 266,364 | ||||||||
3 | .4% | Other Investment Company | 40,701,297 | 40,701,297 | ||||||||
0 | .1% | Short-Term Investment | 1,039,983 | 1,039,983 | ||||||||
103 | .0% | Total Investments | 978,342,839 | 1,243,587,953 | ||||||||
(3 | .0%) | Other Assets and Liabilities, Net | (36,072,039 | ) | ||||||||
100 | .0% | Net Assets | 1,207,515,914 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.5% of net assets | ||||||||
Automobiles & Components 0.8% | ||||||||
Cooper Tire & Rubber Co. | 69,100 | 2,225,711 | ||||||
Drew Industries, Inc. | 13,295 | 638,958 | ||||||
Gentex Corp. | 61,800 | 2,023,332 | ||||||
Modine Manufacturing Co. * | 29,500 | 378,485 | ||||||
Standard Motor Products, Inc. | 8,100 | 320,112 | ||||||
Superior Industries International, Inc. | 40,360 | 787,423 | ||||||
Tenneco, Inc. * | 23,000 | 1,204,280 | ||||||
Thor Industries, Inc. | 43,600 | 2,306,004 | ||||||
Tower International, Inc. * | 9,200 | 223,560 | ||||||
10,107,865 | ||||||||
Banks 4.6% | ||||||||
Associated Banc-Corp. | 106,400 | 2,000,320 | ||||||
Astoria Financial Corp. | 77,600 | 1,020,440 | ||||||
BancorpSouth, Inc. | 51,300 | 1,181,439 | ||||||
Bank of Hawaii Corp. | 34,000 | 1,990,700 | ||||||
BankUnited, Inc. | 33,900 | 1,013,610 | ||||||
BOK Financial Corp. | 13,100 | 898,136 | ||||||
Capitol Federal Financial, Inc. | 97,786 | 1,252,639 | ||||||
Cathay General Bancorp | 28,400 | 750,044 | ||||||
City National Corp. | 18,300 | 1,440,393 | ||||||
Commerce Bancshares, Inc. | 41,704 | 1,887,523 | ||||||
Community Bank System, Inc. | 15,100 | 576,065 | ||||||
Cullen/Frost Bankers, Inc. | 21,600 | 1,745,496 | ||||||
CVB Financial Corp. | 45,180 | 712,940 | ||||||
East West Bancorp, Inc. | 40,200 | 1,477,752 | ||||||
EverBank Financial Corp. | 19,000 | 363,850 | ||||||
F.N.B. Corp. | 79,400 | 1,015,526 | ||||||
First Citizens BancShares, Inc., Class A | 2,400 | 602,904 | ||||||
First Financial Bancorp | 38,100 | 668,274 | ||||||
First Financial Bankshares, Inc. (a) | 9,800 | 311,444 | ||||||
First Horizon National Corp. | 147,500 | 1,896,850 | ||||||
First Niagara Financial Group, Inc. | 210,400 | 1,575,896 | ||||||
First Republic Bank | 28,200 | 1,436,226 | ||||||
FirstMerit Corp. | 71,301 | 1,308,373 | ||||||
Fulton Financial Corp. | 118,200 | 1,404,216 | ||||||
Glacier Bancorp, Inc. | 27,080 | 776,925 | ||||||
Hancock Holding Co. | 26,300 | 925,497 | ||||||
Iberiabank Corp. | 4,500 | 309,870 | ||||||
International Bancshares Corp. | 36,000 | 1,021,320 | ||||||
MB Financial, Inc. | 24,045 | 758,620 | ||||||
National Penn Bancshares, Inc. | 30,900 | 317,961 | ||||||
NBT Bancorp, Inc. | 25,755 | 661,388 | ||||||
Northwest Bancshares, Inc. | 67,492 | 865,922 | ||||||
Old National Bancorp | 47,025 | 684,214 | ||||||
Popular, Inc. * | 110,600 | 3,525,928 | ||||||
Prosperity Bancshares, Inc. | 14,200 | 857,538 | ||||||
Provident Financial Services, Inc. | 38,190 | 696,204 | ||||||
Signature Bank * | 5,600 | 678,328 | ||||||
Susquehanna Bancshares, Inc. | 100,400 | 984,924 | ||||||
SVB Financial Group * | 8,100 | 907,119 | ||||||
Synovus Financial Corp. | 85,300 | 2,163,208 | ||||||
TCF Financial Corp. | 128,600 | 1,986,870 | ||||||
Trustmark Corp. | 46,000 | 1,119,180 | ||||||
UMB Financial Corp. | 13,501 | 804,389 | ||||||
Umpqua Holdings Corp. | 40,500 | 712,800 | ||||||
United Bankshares, Inc. | 28,695 | 983,665 | ||||||
Valley National Bancorp | 167,100 | 1,667,658 | ||||||
Washington Federal, Inc. | 57,900 | 1,263,957 | ||||||
Webster Financial Corp. | 39,100 | 1,225,394 | ||||||
Westamerica Bancorp | 16,470 | 812,630 | ||||||
Wintrust Financial Corp. | 14,440 | 668,861 | ||||||
55,911,426 | ||||||||
Capital Goods 11.2% | ||||||||
A.O. Smith Corp. | 28,500 | 1,520,475 | ||||||
AAR Corp. | 47,680 | 1,263,520 | ||||||
Actuant Corp., Class A | 40,300 | 1,277,107 | ||||||
Acuity Brands, Inc. | 16,800 | 2,342,424 | ||||||
Aegion Corp. * | 32,815 | 601,171 | ||||||
Air Lease Corp. | 8,100 | 296,379 | ||||||
Aircastle Ltd. | 71,400 | 1,362,312 | ||||||
Albany International Corp., Class A | 18,800 | 710,264 | ||||||
Allegion plc | 26,100 | 1,385,649 | ||||||
Allison Transmission Holdings, Inc. | 26,800 | 870,464 | ||||||
American Science & Engineering, Inc. | 4,500 | 248,850 | ||||||
Apogee Enterprises, Inc. | 23,995 | 1,053,380 | ||||||
Applied Industrial Technologies, Inc. | 46,620 | 2,275,522 | ||||||
Astec Industries, Inc. | 20,850 | 790,423 | ||||||
AZZ, Inc. | 6,600 | 308,616 | ||||||
B/E Aerospace, Inc. * | 24,800 | 1,846,360 | ||||||
Barnes Group, Inc. | 34,865 | 1,274,664 | ||||||
Beacon Roofing Supply, Inc. * | 39,880 | 1,103,480 | ||||||
Briggs & Stratton Corp. | 78,900 | 1,594,569 | ||||||
Carlisle Cos., Inc. | 35,100 | 3,119,688 | ||||||
Chart Industries, Inc. * | 9,910 | 461,311 |
See financial notes 9
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Chicago Bridge & Iron Co., N.V. | 35,498 | 1,939,611 | ||||||
CIRCOR International, Inc. | 9,490 | 713,173 | ||||||
CLARCOR, Inc. | 28,225 | 1,889,946 | ||||||
Colfax Corp. * | 5,100 | 277,338 | ||||||
Comfort Systems USA, Inc. | 28,000 | 430,080 | ||||||
Crane Co. | 28,800 | 1,795,680 | ||||||
Cubic Corp. | 17,390 | 838,894 | ||||||
Curtiss-Wright Corp. | 29,600 | 2,048,616 | ||||||
DigitalGlobe, Inc. * | 17,000 | 486,030 | ||||||
Donaldson Co., Inc. | 63,500 | 2,640,330 | ||||||
Dycom Industries, Inc. * | 36,270 | 1,138,515 | ||||||
Encore Wire Corp. | 24,340 | 923,460 | ||||||
EnerSys | 28,200 | 1,770,960 | ||||||
Engility Holdings, Inc. * | 14,100 | 609,120 | ||||||
EnPro Industries, Inc. * | 10,270 | 662,723 | ||||||
ESCO Technologies, Inc. | 21,000 | 798,420 | ||||||
Esterline Technologies Corp. * | 14,300 | 1,674,673 | ||||||
Franklin Electric Co., Inc. | 19,460 | 726,636 | ||||||
GATX Corp. | 42,500 | 2,694,500 | ||||||
Generac Holdings, Inc. * | 28,100 | 1,274,054 | ||||||
General Cable Corp. | 114,400 | 1,621,048 | ||||||
Graco, Inc. | 22,140 | 1,737,990 | ||||||
GrafTech International Ltd. * | 132,100 | 566,709 | ||||||
Granite Construction, Inc. | 58,700 | 2,166,617 | ||||||
Griffon Corp. | 26,600 | 326,914 | ||||||
H&E Equipment Services, Inc. | 23,920 | 894,369 | ||||||
HEICO Corp. | 13,612 | 738,315 | ||||||
Hexcel Corp. * | 33,685 | 1,411,065 | ||||||
Hillenbrand, Inc. | 35,300 | 1,175,137 | ||||||
Huntington Ingalls Industries, Inc. | 25,700 | 2,719,574 | ||||||
Hyster-Yale Materials Handling, Inc. | 4,200 | 329,658 | ||||||
IDEX Corp. | 29,300 | 2,194,863 | ||||||
ITT Corp. | 94,000 | 4,235,640 | ||||||
Kaman Corp. | 22,380 | 963,683 | ||||||
Layne Christensen Co. *(a) | 61,800 | 444,960 | ||||||
Lennox International, Inc. | 36,500 | 3,245,580 | ||||||
Lindsay Corp. (a) | 3,700 | 324,490 | ||||||
Masonite International Corp. * | 9,700 | 524,382 | ||||||
MasTec, Inc. * | 35,510 | 1,017,006 | ||||||
Meritor, Inc. * | 69,300 | 796,257 | ||||||
Moog, Inc., Class A * | 24,900 | 1,905,846 | ||||||
MSC Industrial Direct Co., Inc., Class A | 26,400 | 2,137,608 | ||||||
Mueller Industries, Inc. | 78,900 | 2,561,094 | ||||||
Mueller Water Products, Inc., Class A | 101,700 | 1,003,779 | ||||||
MYR Group, Inc. * | 12,100 | 313,874 | ||||||
Navistar International Corp. * | 45,200 | 1,598,724 | ||||||
Nordson Corp. | 23,350 | 1,787,442 | ||||||
Orbital Sciences Corp. * | 43,055 | 1,132,346 | ||||||
Polypore International, Inc. * | 18,900 | 830,088 | ||||||
Quanex Building Products Corp. | 47,150 | 943,943 | ||||||
Raven Industries, Inc. | 19,930 | 505,226 | ||||||
RBC Bearings, Inc. | 4,700 | 285,525 | ||||||
Regal-Beloit Corp. | 32,700 | 2,320,719 | ||||||
Rexnord Corp. * | 13,300 | 393,015 | ||||||
Rush Enterprises, Inc., Class A * | 27,060 | 1,030,986 | ||||||
Simpson Manufacturing Co., Inc. | 27,185 | 899,280 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 77,400 | 3,044,916 | ||||||
Standex International Corp. | 4,000 | 345,000 | ||||||
TAL International Group, Inc. * | 23,090 | 995,872 | ||||||
Teledyne Technologies, Inc. * | 18,100 | 1,875,703 | ||||||
Tennant Co. | 10,780 | 794,809 | ||||||
Terex Corp. | 87,300 | 2,511,621 | ||||||
The Babcock & Wilcox Co. | 59,800 | 1,710,280 | ||||||
The Greenbrier Cos., Inc. (a) | 13,020 | 814,271 | ||||||
The Manitowoc Co., Inc. | 69,900 | 1,456,716 | ||||||
The Middleby Corp. * | 10,424 | 922,524 | ||||||
The Toro Co. | 36,920 | 2,279,072 | ||||||
Titan International, Inc. | 38,275 | 404,184 | ||||||
TransDigm Group, Inc. | 13,500 | 2,524,905 | ||||||
TriMas Corp. * | 18,300 | 579,378 | ||||||
Triumph Group, Inc. | 29,200 | 2,033,196 | ||||||
Tutor Perini Corp. * | 69,700 | 1,952,297 | ||||||
Universal Forest Products, Inc. | 37,170 | 1,857,385 | ||||||
Valmont Industries, Inc. (a) | 14,350 | 1,954,039 | ||||||
WABCO Holdings, Inc. * | 23,100 | 2,249,478 | ||||||
Wabtec Corp. | 24,220 | 2,090,186 | ||||||
Watsco, Inc. | 20,045 | 2,036,973 | ||||||
Watts Water Technologies, Inc., Class A | 21,755 | 1,319,006 | ||||||
Woodward, Inc. | 38,200 | 1,956,222 | ||||||
135,831,172 | ||||||||
Commercial & Professional Supplies 5.0% | ||||||||
ABM Industries, Inc. | 85,500 | 2,363,220 | ||||||
ACCO Brands Corp. * | 53,500 | 440,305 | ||||||
Brady Corp., Class A | 63,500 | 1,513,840 | ||||||
Clean Harbors, Inc. * | 25,130 | 1,247,202 | ||||||
Copart, Inc. * | 79,200 | 2,648,448 | ||||||
Covanta Holding Corp. | 97,700 | 2,156,239 | ||||||
Deluxe Corp. | 33,700 | 2,048,960 | ||||||
FTI Consulting, Inc. * | 54,500 | 2,200,710 | ||||||
G&K Services, Inc., Class A | 21,290 | 1,342,760 | ||||||
Healthcare Services Group, Inc. | 37,455 | 1,115,410 | ||||||
Herman Miller, Inc. | 44,110 | 1,411,520 | ||||||
HNI Corp. | 48,800 | 2,276,520 | ||||||
Huron Consulting Group, Inc. * | 9,200 | 640,412 | ||||||
ICF International, Inc. * | 18,100 | 657,754 | ||||||
IHS, Inc., Class A * | 10,710 | 1,403,331 | ||||||
Insperity, Inc. | 30,560 | 964,474 | ||||||
Interface, Inc. | 38,585 | 618,518 | ||||||
KAR Auction Services, Inc. | 45,800 | 1,390,488 | ||||||
Kelly Services, Inc., Class A | 101,400 | 1,787,682 | ||||||
Kforce, Inc. | 37,400 | 865,810 | ||||||
Kimball International, Inc., Class B | 31,300 | 562,774 | ||||||
Knoll, Inc. | 44,500 | 885,105 | ||||||
Korn/Ferry International * | 27,230 | 760,534 | ||||||
Matthews International Corp., Class A | 25,315 | 1,166,515 | ||||||
McGrath RentCorp | 20,325 | 742,472 | ||||||
Mobile Mini, Inc. | 7,400 | 324,342 | ||||||
MSA Safety, Inc. | 16,825 | 966,933 | ||||||
Navigant Consulting, Inc. * | 48,925 | 752,956 | ||||||
On Assignment, Inc. * | 8,600 | 250,260 | ||||||
Quad Graphics, Inc. | 75,600 | 1,666,980 | ||||||
Resources Connection, Inc. | 67,360 | 1,042,059 | ||||||
Rollins, Inc. | 22,222 | 708,215 | ||||||
Steelcase, Inc., Class A | 134,700 | 2,386,884 | ||||||
Stericycle, Inc. * | 19,200 | 2,419,200 | ||||||
Team, Inc. * | 6,700 | 282,338 |
10 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tetra Tech, Inc. | 50,695 | 1,359,133 | ||||||
The Brink’s Co. | 64,700 | 1,358,700 | ||||||
The Corporate Executive Board Co. | 14,170 | 1,044,329 | ||||||
Towers Watson & Co., Class A | 20,615 | 2,273,628 | ||||||
TrueBlue, Inc. * | 43,030 | 1,063,702 | ||||||
UniFirst Corp. | 9,305 | 1,038,066 | ||||||
United Stationers, Inc. | 70,400 | 2,940,608 | ||||||
Verisk Analytics, Inc., Class A * | 35,500 | 2,213,425 | ||||||
Viad Corp. | 33,565 | 856,243 | ||||||
Waste Connections, Inc. | 40,200 | 2,005,980 | ||||||
West Corp. | 13,300 | 425,600 | ||||||
60,590,584 | ||||||||
Consumer Durables & Apparel 2.8% | ||||||||
Arctic Cat, Inc. | 13,900 | 467,874 | ||||||
Brunswick Corp. | 16,800 | 786,240 | ||||||
Callaway Golf Co. | 90,255 | 707,599 | ||||||
Carter’s, Inc. | 24,800 | 1,937,624 | ||||||
Columbia Sportswear Co. | 21,960 | 846,338 | ||||||
Crocs, Inc. * | 61,760 | 721,357 | ||||||
Deckers Outdoor Corp. * | 18,850 | 1,648,621 | ||||||
Ethan Allen Interiors, Inc. | 28,065 | 794,239 | ||||||
G-III Apparel Group Ltd. * | 9,700 | 769,695 | ||||||
Hanesbrands, Inc. | 28,100 | 2,967,641 | ||||||
Helen of Troy Ltd. * | 15,430 | 954,345 | ||||||
Iconix Brand Group, Inc. * | 7,400 | 296,074 | ||||||
JAKKS Pacific, Inc. *(a) | 97,525 | 622,210 | ||||||
KB Home (a) | 39,000 | 613,860 | ||||||
La-Z-Boy, Inc. | 39,920 | 912,571 | ||||||
Lennar Corp., Class A | 43,400 | 1,869,672 | ||||||
M.D.C. Holdings, Inc. | 30,700 | 749,694 | ||||||
Meritage Homes Corp. * | 14,900 | 548,171 | ||||||
Michael Kors Holdings Ltd. * | 13,800 | 1,084,542 | ||||||
Oxford Industries, Inc. | 4,400 | 269,500 | ||||||
Polaris Industries, Inc. | 18,300 | 2,760,738 | ||||||
PulteGroup, Inc. | 94,700 | 1,817,293 | ||||||
Quiksilver, Inc. *(a) | 235,100 | 411,425 | ||||||
Skechers U.S.A., Inc., Class A * | 25,745 | 1,409,539 | ||||||
Steven Madden Ltd. * | 24,822 | 778,170 | ||||||
Sturm, Ruger & Co., Inc. (a) | 5,800 | 241,744 | ||||||
Tempur Sealy International, Inc. * | 39,315 | 2,069,542 | ||||||
Toll Brothers, Inc. * | 44,200 | 1,412,190 | ||||||
Under Armour, Inc., Class A * | 18,660 | 1,223,723 | ||||||
Wolverine World Wide, Inc. | 58,880 | 1,598,003 | ||||||
33,290,234 | ||||||||
Consumer Services 4.5% | ||||||||
Aramark | 14,900 | 415,859 | ||||||
Bally Technologies, Inc. * | 27,075 | 2,176,830 | ||||||
Bob Evans Farms, Inc. | 44,355 | 2,166,742 | ||||||
Boyd Gaming Corp. * | 93,700 | 1,082,235 | ||||||
Buffalo Wild Wings, Inc. * | 4,800 | 716,544 | ||||||
Burger King Worldwide, Inc. (a) | 30,600 | 1,000,008 | ||||||
Capella Education Co. | 12,300 | 870,102 | ||||||
Career Education Corp. * | 346,700 | 2,010,860 | ||||||
Choice Hotels International, Inc. | 20,040 | 1,072,140 | ||||||
Churchill Downs, Inc. | 3,200 | 326,336 | ||||||
Cracker Barrel Old Country Store, Inc. | 13,820 | 1,594,137 | ||||||
DineEquity, Inc. | 10,130 | 901,165 | ||||||
Domino’s Pizza, Inc. | 24,400 | 2,166,476 | ||||||
Dunkin’ Brands Group, Inc. | 21,000 | 955,080 | ||||||
Hilton Worldwide Holdings, Inc. * | 14,300 | 360,932 | ||||||
Houghton Mifflin Harcourt Co. * | 20,800 | 416,208 | ||||||
Hyatt Hotels Corp., Class A * | 19,900 | 1,178,478 | ||||||
International Speedway Corp., Class A | 28,150 | 881,939 | ||||||
ITT Educational Services, Inc. *(a) | 146,935 | 1,485,513 | ||||||
Jack in the Box, Inc. | 36,500 | 2,592,960 | ||||||
Life Time Fitness, Inc. * | 24,385 | 1,359,951 | ||||||
Marriott Vacations Worldwide Corp. | 18,900 | 1,312,416 | ||||||
Norwegian Cruise Line Holdings Ltd. * | 12,500 | 487,500 | ||||||
Panera Bread Co., Class A * | 10,975 | 1,773,999 | ||||||
Papa John’s International, Inc. | 20,920 | 978,219 | ||||||
Penn National Gaming, Inc. * | 118,200 | 1,547,238 | ||||||
Pinnacle Entertainment, Inc. * | 30,775 | 788,763 | ||||||
Red Robin Gourmet Burgers, Inc. * | 13,480 | 740,996 | ||||||
Regis Corp. | 118,200 | 2,007,036 | ||||||
Ruby Tuesday, Inc. * | 167,350 | 1,285,248 | ||||||
Scientific Games Corp., Class A * | 29,100 | 342,507 | ||||||
SeaWorld Entertainment, Inc. | 57,800 | 1,112,072 | ||||||
Six Flags Entertainment Corp. | 26,000 | 1,047,800 | ||||||
Sonic Corp. * | 48,180 | 1,214,618 | ||||||
Sotheby’s | 23,020 | 912,973 | ||||||
Steiner Leisure Ltd. * | 16,160 | 681,629 | ||||||
Strayer Education, Inc. * | 38,100 | 2,788,539 | ||||||
Texas Roadhouse, Inc. | 47,710 | 1,377,388 | ||||||
The Cheesecake Factory, Inc. | 50,335 | 2,312,390 | ||||||
The Wendy’s Co. | 254,300 | 2,039,486 | ||||||
Vail Resorts, Inc. | 17,760 | 1,533,754 | ||||||
Weight Watchers International, Inc. *(a) | 85,292 | 2,221,856 | ||||||
54,236,922 | ||||||||
Diversified Financials 3.3% | ||||||||
Affiliated Managers Group, Inc. * | 8,100 | 1,618,299 | ||||||
BGC Partners, Inc., Class A | 43,800 | 371,424 | ||||||
Cash America International, Inc. | 35,405 | 1,740,156 | ||||||
CBOE Holdings, Inc. | 25,600 | 1,508,864 | ||||||
Eaton Vance Corp. | 74,500 | 2,743,835 | ||||||
Ezcorp, Inc., Class A * | 84,900 | 957,672 | ||||||
Federated Investors, Inc., Class B | 102,000 | 3,189,540 | ||||||
First Cash Financial Services, Inc. * | 13,990 | 826,529 | ||||||
Greenhill & Co., Inc. | 21,835 | 982,575 | ||||||
Intercontinental Exchange, Inc. | 11,400 | 2,374,506 | ||||||
Investment Technology Group, Inc. * | 42,555 | 763,011 | ||||||
Janus Capital Group, Inc. (a) | 145,400 | 2,179,546 | ||||||
Lazard Ltd., Class A | 28,600 | 1,407,406 | ||||||
LPL Financial Holdings, Inc. | 35,200 | 1,456,928 | ||||||
MSCI, Inc. | 40,300 | 1,880,398 | ||||||
Nelnet, Inc., Class A | 16,640 | 791,898 | ||||||
PRA Group, Inc. * | 5,800 | 366,850 | ||||||
Raymond James Financial, Inc. | 41,400 | 2,323,782 | ||||||
Santander Consumer USA Holdings, Inc. | 41,600 | 769,600 | ||||||
SEI Investments Co. | 75,700 | 2,926,562 |
See financial notes 11
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
SLM Corp. | 236,100 | 2,254,755 | ||||||
Stifel Financial Corp. * | 14,560 | 691,746 | ||||||
TD Ameritrade Holding Corp. | 79,900 | 2,695,826 | ||||||
Waddell & Reed Financial, Inc., Class A | 34,200 | 1,632,708 | ||||||
World Acceptance Corp. *(a) | 12,160 | 871,385 | ||||||
39,325,801 | ||||||||
Energy 4.8% | ||||||||
Alon USA Energy, Inc. | 21,100 | 338,444 | ||||||
Atwood Oceanics, Inc. * | 26,300 | 1,069,095 | ||||||
Basic Energy Services, Inc. * | 29,685 | 382,936 | ||||||
Bill Barrett Corp. * | 51,900 | 788,880 | ||||||
Bristow Group, Inc. | 20,100 | 1,485,390 | ||||||
C&J Energy Services, Inc. * | 10,600 | 204,686 | ||||||
Cabot Oil & Gas Corp. | 53,900 | 1,676,290 | ||||||
CARBO Ceramics, Inc. (a) | 8,180 | 422,661 | ||||||
Cloud Peak Energy, Inc. * | 82,700 | 989,919 | ||||||
Comstock Resources, Inc. | 34,955 | 413,867 | ||||||
Concho Resources, Inc. * | 14,800 | 1,613,644 | ||||||
Continental Resources, Inc. * | 3,900 | 219,843 | ||||||
CVR Energy, Inc. (a) | 7,200 | 349,776 | ||||||
Delek US Holdings, Inc. | 61,800 | 2,094,402 | ||||||
Dril-Quip, Inc. * | 11,085 | 997,096 | ||||||
Energy XXI (Bermuda) Ltd. (a) | 63,600 | 489,084 | ||||||
EXCO Resources, Inc. (a) | 225,200 | 686,860 | ||||||
Exterran Holdings, Inc. | 58,000 | 2,281,140 | ||||||
Forest Oil Corp. *(a) | 859,400 | 696,114 | ||||||
Forum Energy Technologies, Inc. * | 10,500 | 286,650 | ||||||
Frontline Ltd. *(a) | 518,400 | 730,944 | ||||||
Golar LNG Ltd. | 5,500 | 308,605 | ||||||
Green Plains, Inc. | 27,800 | 950,760 | ||||||
Gulfmark Offshore, Inc., Class A | 17,405 | 524,935 | ||||||
Helix Energy Solutions Group, Inc. * | 86,900 | 2,315,016 | ||||||
Hercules Offshore, Inc. *(a) | 235,400 | 388,410 | ||||||
Hornbeck Offshore Services, Inc. * | 17,780 | 545,135 | ||||||
ION Geophysical Corp. * | 167,905 | 470,134 | ||||||
Key Energy Services, Inc. * | 241,200 | 733,248 | ||||||
Matrix Service Co. * | 22,600 | 566,356 | ||||||
McDermott International, Inc. * | 447,500 | 1,718,400 | ||||||
Newpark Resources, Inc. * | 69,840 | 798,271 | ||||||
Nordic American Tankers Ltd. (a) | 78,785 | 665,733 | ||||||
North Atlantic Drilling Ltd. (a) | 42,700 | 264,313 | ||||||
Parker Drilling Co. * | 136,310 | 605,216 | ||||||
PBF Energy, Inc., Class A | 14,900 | 388,443 | ||||||
PDC Energy, Inc. * | 11,155 | 487,697 | ||||||
Penn Virginia Corp. * | 65,100 | 557,907 | ||||||
Pioneer Energy Services Corp. * | 63,000 | 578,340 | ||||||
Quicksilver Resources, Inc. *(a) | 519,800 | 284,123 | ||||||
Range Resources Corp. | 26,300 | 1,798,920 | ||||||
Rosetta Resources, Inc. * | 17,910 | 681,117 | ||||||
Rowan Cos. plc, Class A | 92,300 | 2,240,121 | ||||||
RPC, Inc. | 16,500 | 270,600 | ||||||
SandRidge Energy, Inc. *(a) | 318,400 | 1,241,760 | ||||||
SemGroup Corp., Class A | 25,600 | 1,964,800 | ||||||
Ship Finance International Ltd. | 49,600 | 852,624 | ||||||
SM Energy Co. | 26,400 | 1,486,320 | ||||||
Stone Energy Corp. * | 38,600 | 945,700 | ||||||
Superior Energy Services, Inc. | 81,400 | 2,047,210 | ||||||
Swift Energy Co. *(a) | 102,505 | 702,159 | ||||||
Targa Resources Corp. | 14,600 | 1,877,998 | ||||||
Teekay Corp. | 32,500 | 1,899,950 | ||||||
TETRA Technologies, Inc. * | 79,860 | 761,066 | ||||||
Tidewater, Inc. | 53,400 | 1,968,858 | ||||||
Ultra Petroleum Corp. *(a) | 56,300 | 1,283,640 | ||||||
Unit Corp. * | 38,000 | 1,839,960 | ||||||
W&T Offshore, Inc. | 60,200 | 547,218 | ||||||
Whiting Petroleum Corp. * | 38,300 | 2,345,492 | ||||||
58,124,276 | ||||||||
Food & Staples Retailing 0.8% | ||||||||
Ingles Markets, Inc., Class A | 19,900 | 535,310 | ||||||
PriceSmart, Inc. | 7,740 | 689,092 | ||||||
Rite Aid Corp. * | 216,100 | 1,134,525 | ||||||
Roundy’s, Inc. | 157,600 | 531,112 | ||||||
SpartanNash, Co. | 35,900 | 804,519 | ||||||
The Andersons, Inc. | 26,337 | 1,678,457 | ||||||
The Fresh Market, Inc. * | 21,500 | 789,265 | ||||||
The Pantry, Inc. * | 125,600 | 3,236,712 | ||||||
9,398,992 | ||||||||
Food, Beverage & Tobacco 2.6% | ||||||||
B&G Foods, Inc. | 24,600 | 724,716 | ||||||
Cal-Maine Foods, Inc. | 13,000 | 1,141,270 | ||||||
Chiquita Brands International, Inc. * | 150,500 | 2,171,715 | ||||||
Darling Ingredients, Inc. * | 62,520 | 1,100,352 | ||||||
Dean Foods Co. | 238,800 | 3,512,748 | ||||||
Flowers Foods, Inc. | 112,650 | 2,140,350 | ||||||
Fresh Del Monte Produce, Inc. | 76,500 | 2,456,415 | ||||||
J&J Snack Foods Corp. | 7,835 | 807,240 | ||||||
Keurig Green Mountain, Inc. | 14,180 | 2,151,815 | ||||||
Lancaster Colony Corp. | 14,865 | 1,359,999 | ||||||
Pilgrim’s Pride Corp. * | 29,300 | 832,413 | ||||||
Pinnacle Foods, Inc. | 10,000 | 338,000 | ||||||
Post Holdings, Inc. * | 29,200 | 1,095,000 | ||||||
Sanderson Farms, Inc. | 20,100 | 1,687,998 | ||||||
Seaboard Corp. * | 372 | 1,143,108 | ||||||
Snyder’s-Lance, Inc. | 31,560 | 940,172 | ||||||
The Hain Celestial Group, Inc. * | 10,070 | 1,090,078 | ||||||
The WhiteWave Foods Co. * | 43,000 | 1,600,890 | ||||||
TreeHouse Foods, Inc. * | 18,385 | 1,565,850 | ||||||
Universal Corp. | 50,000 | 2,225,000 | ||||||
Vector Group Ltd. (a) | 47,176 | 1,053,912 | ||||||
31,139,041 | ||||||||
Health Care Equipment & Services 5.4% | ||||||||
Air Methods Corp. * | 7,100 | 335,333 | ||||||
Alere, Inc. * | 48,300 | 1,930,551 | ||||||
Align Technology, Inc. * | 5,600 | 294,672 | ||||||
Allscripts Healthcare Solutions, Inc. * | 66,200 | 908,264 | ||||||
Amedisys, Inc. * | 84,370 | 2,202,057 | ||||||
Amsurg Corp. * | 21,625 | 1,167,966 | ||||||
Analogic Corp. | 8,165 | 595,555 | ||||||
BioScrip, Inc. *(a) | 36,400 | 235,144 | ||||||
Brookdale Senior Living, Inc. * | 51,200 | 1,725,952 | ||||||
Centene Corp. * | 37,100 | 3,438,057 | ||||||
Cerner Corp. * | 47,800 | 3,027,652 |
12 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Chemed Corp. | 21,195 | 2,190,715 | ||||||
CONMED Corp. | 18,295 | 768,207 | ||||||
Edwards Lifesciences Corp. * | 25,500 | 3,083,460 | ||||||
Envision Healthcare Holdings Inc * | 10,500 | 366,975 | ||||||
Gentiva Health Services, Inc. * | 51,425 | 1,013,073 | ||||||
Greatbatch, Inc. * | 12,500 | 627,375 | ||||||
Haemonetics Corp. * | 28,300 | 1,067,476 | ||||||
Hanger, Inc. * | 22,800 | 545,604 | ||||||
HealthSouth Corp. | 34,000 | 1,371,220 | ||||||
Healthways, Inc. * | 50,060 | 775,930 | ||||||
Hill-Rom Holdings, Inc. | 51,900 | 2,308,512 | ||||||
Hologic, Inc. * | 92,000 | 2,409,480 | ||||||
IDEXX Laboratories, Inc. * | 19,500 | 2,762,565 | ||||||
Integra LifeSciences Holdings Corp. * | 12,620 | 645,008 | ||||||
Invacare Corp. | 77,465 | 1,216,975 | ||||||
Kindred Healthcare, Inc. | 115,500 | 2,512,125 | ||||||
Masimo Corp. * | 30,800 | 777,392 | ||||||
MEDNAX, Inc. * | 37,400 | 2,334,882 | ||||||
Molina Healthcare, Inc. * | 38,357 | 1,865,684 | ||||||
MWI Veterinary Supply, Inc. * | 5,900 | 1,000,965 | ||||||
Orthofix International N.V. * | 9,600 | 281,760 | ||||||
PharMerica Corp. * | 49,540 | 1,421,303 | ||||||
Quality Systems, Inc. | 24,700 | 373,217 | ||||||
ResMed, Inc. (a) | 45,540 | 2,378,099 | ||||||
Select Medical Holdings Corp. | 72,800 | 1,049,776 | ||||||
Sirona Dental Systems, Inc. * | 14,390 | 1,130,334 | ||||||
STERIS Corp. | 42,100 | 2,601,780 | ||||||
Team Health Holdings, Inc. * | 5,000 | 312,700 | ||||||
Teleflex, Inc. | 23,100 | 2,636,172 | ||||||
The Cooper Cos., Inc. | 12,700 | 2,081,530 | ||||||
The Ensign Group, Inc. | 7,200 | 278,784 | ||||||
Thoratec Corp. * | 14,000 | 380,520 | ||||||
Triple-S Management Corp., Class B * | 31,200 | 690,768 | ||||||
VCA, Inc. * | 46,500 | 2,119,005 | ||||||
West Pharmaceutical Services, Inc. | 28,180 | 1,444,225 | ||||||
64,684,799 | ||||||||
Household & Personal Products 0.3% | ||||||||
Elizabeth Arden, Inc. *(a) | 28,670 | 470,188 | ||||||
Nu Skin Enterprises, Inc., Class A (a) | 32,820 | 1,733,881 | ||||||
Spectrum Brands Holdings, Inc. | 10,500 | 951,195 | ||||||
WD-40 Co. | 8,115 | 622,177 | ||||||
3,777,441 | ||||||||
Insurance 5.2% | ||||||||
Alleghany Corp. * | 4,300 | 1,910,404 | ||||||
Allied World Assurance Co. Holdings AG | 81,000 | 3,078,000 | ||||||
American Equity Investment Life Holding Co. | 41,215 | 1,063,759 | ||||||
Argo Group International Holdings Ltd. | 22,604 | 1,261,303 | ||||||
Arthur J. Gallagher & Co. | 59,000 | 2,814,300 | ||||||
Aspen Insurance Holdings Ltd. | 65,400 | 2,853,402 | ||||||
Assured Guaranty Ltd. | 69,600 | 1,606,368 | ||||||
Brown & Brown, Inc. | 52,000 | 1,656,720 | ||||||
CNO Financial Group, Inc. | 162,500 | 2,946,125 | ||||||
Employers Holdings, Inc. | 22,500 | 458,775 | ||||||
Endurance Specialty Holdings Ltd. | 60,200 | 3,488,590 | ||||||
First American Financial Corp. | 97,900 | 2,968,328 | ||||||
Horace Mann Educators Corp. | 22,890 | 696,085 | ||||||
Infinity Property & Casualty Corp. | 17,665 | 1,289,722 | ||||||
Kemper Corp. | 69,000 | 2,542,650 | ||||||
Markel Corp. * | 3,182 | 2,198,412 | ||||||
Mercury General Corp. | 30,700 | 1,630,784 | ||||||
Montpelier Re Holdings Ltd. | 32,300 | 1,070,422 | ||||||
Old Republic International Corp. | 178,400 | 2,634,968 | ||||||
Platinum Underwriters Holdings Ltd. | 49,500 | 3,100,185 | ||||||
Primerica, Inc. | 60,900 | 3,115,035 | ||||||
ProAssurance Corp. | 35,500 | 1,660,690 | ||||||
Protective Life Corp. | 51,500 | 3,588,520 | ||||||
RLI Corp. | 34,700 | 1,720,773 | ||||||
Safety Insurance Group, Inc. | 13,305 | 829,966 | ||||||
Selective Insurance Group, Inc. | 42,600 | 1,099,932 | ||||||
StanCorp Financial Group, Inc. | 37,100 | 2,580,676 | ||||||
Stewart Information Services Corp. | 22,400 | 791,168 | ||||||
Symetra Financial Corp. | 36,500 | 865,050 | ||||||
The Hanover Insurance Group, Inc. | 35,800 | 2,396,452 | ||||||
Validus Holdings Ltd. | 67,727 | 2,694,180 | ||||||
62,611,744 | ||||||||
Materials 5.8% | ||||||||
A. Schulman, Inc. | 38,733 | 1,371,536 | ||||||
AK Steel Holding Corp. * | 248,100 | 1,878,117 | ||||||
Axiall Corp. | 35,924 | 1,447,737 | ||||||
Berry Plastics Group, Inc. * | 22,300 | 580,246 | ||||||
Boise Cascade Co. * | 12,000 | 432,720 | ||||||
Cabot Corp. | 49,000 | 2,275,070 | ||||||
Calgon Carbon Corp. * | 15,000 | 315,450 | ||||||
Carpenter Technology Corp. | 30,000 | 1,501,500 | ||||||
Century Aluminum Co. * | 60,300 | 1,765,584 | ||||||
Chemtura Corp. * | 85,600 | 1,993,624 | ||||||
Clearwater Paper Corp. * | 15,860 | 1,020,591 | ||||||
Coeur Mining, Inc. * | 123,200 | 455,840 | ||||||
Compass Minerals International, Inc. | 19,030 | 1,630,490 | ||||||
Cytec Industries, Inc. | 58,100 | 2,709,203 | ||||||
Eagle Materials, Inc. | �� | 10,070 | 880,420 | |||||
Ferro Corp. * | 82,130 | 1,077,546 | ||||||
Globe Specialty Metals, Inc. | 14,700 | 276,507 | ||||||
Graphic Packaging Holding Co. * | 187,300 | 2,271,949 | ||||||
Greif, Inc., Class A | 39,100 | 1,722,746 | ||||||
H.B. Fuller Co. | 36,780 | 1,543,657 | ||||||
Hecla Mining Co. | 239,800 | 522,764 | ||||||
Innophos Holdings, Inc. | 21,850 | 1,245,450 | ||||||
Innospec, Inc. | 17,480 | 705,668 | ||||||
Intrepid Potash, Inc. * | 19,800 | 266,310 | ||||||
Kaiser Aluminum Corp. | 20,180 | 1,403,519 | ||||||
KapStone Paper & Packaging Corp. * | 25,000 | 769,000 | ||||||
Koppers Holdings, Inc. | 20,960 | 827,501 | ||||||
Kraton Performance Polymers, Inc. * | 39,300 | 703,077 | ||||||
Louisiana-Pacific Corp. * | 57,000 | 832,200 | ||||||
LSB Industries, Inc. * | 8,400 | 315,252 | ||||||
Martin Marietta Materials, Inc. | 24,000 | 2,806,080 | ||||||
Materion Corp. | 26,460 | 1,043,847 |
See financial notes 13
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Minerals Technologies, Inc. | 22,820 | 1,750,522 | ||||||
Myers Industries, Inc. | 30,005 | 448,275 | ||||||
NewMarket Corp. | 4,795 | 1,860,508 | ||||||
Olin Corp. | 73,700 | 1,786,488 | ||||||
OM Group, Inc. | 35,800 | 931,874 | ||||||
P.H. Glatfelter Co. | 49,245 | 1,242,451 | ||||||
PolyOne Corp. | 36,500 | 1,350,865 | ||||||
Quaker Chemical Corp. | 4,100 | 336,528 | ||||||
Resolute Forest Products, Inc. * | 168,500 | 3,127,360 | ||||||
RTI International Metals, Inc. * | 18,780 | 442,269 | ||||||
Schnitzer Steel Industries, Inc., Class A | 100,810 | 2,374,075 | ||||||
Schweitzer-Mauduit International, Inc. | 22,672 | 976,256 | ||||||
Sensient Technologies Corp. | 34,400 | 2,035,792 | ||||||
Silgan Holdings, Inc. | 39,700 | 1,951,652 | ||||||
Stepan Co. | 19,530 | 864,788 | ||||||
Stillwater Mining Co. * | 54,070 | 709,939 | ||||||
SunCoke Energy, Inc. * | 41,400 | 989,460 | ||||||
The Scotts Miracle-Gro Co., Class A | 37,000 | 2,191,880 | ||||||
Tredegar Corp. | 26,475 | 503,555 | ||||||
Tronox Ltd., Class A | 19,600 | 473,928 | ||||||
W.R. Grace & Co. * | 13,900 | 1,314,940 | ||||||
Walter Energy, Inc. (a) | 332,800 | 802,048 | ||||||
Westlake Chemical Corp. | 14,000 | 987,700 | ||||||
Worthington Industries, Inc. | 40,700 | 1,573,055 | ||||||
69,617,409 | ||||||||
Media 2.3% | ||||||||
AMC Networks, Inc., Class A * | 12,600 | 764,190 | ||||||
Central European Media Enterprises Ltd., Class A *(a) | 123,600 | 300,348 | ||||||
Cinemark Holdings, Inc. | 78,100 | 2,758,492 | ||||||
Dex Media, Inc. *(a) | 282,700 | 2,202,233 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 60,400 | 1,345,712 | ||||||
John Wiley & Sons, Inc., Class A | 29,000 | 1,693,310 | ||||||
Lamar Advertising Co., Class A | 39,600 | 2,045,340 | ||||||
Liberty Media Corp., Class A * | 11,200 | 537,824 | ||||||
Liberty Media Corp., Class C * | 18,200 | 872,326 | ||||||
Lions Gate Entertainment Corp. | 27,400 | 907,762 | ||||||
Live Nation Entertainment, Inc. * | 67,000 | 1,742,000 | ||||||
Loral Space & Communications, Inc. * | 9,600 | 734,400 | ||||||
Meredith Corp. (a) | 34,800 | 1,814,472 | ||||||
Morningstar, Inc. | 4,200 | 286,650 | ||||||
National CineMedia, Inc. | 53,400 | 849,060 | ||||||
Regal Entertainment Group, Class A (a) | 89,500 | 1,982,425 | ||||||
Scholastic Corp. | 58,100 | 2,022,461 | ||||||
Sinclair Broadcast Group, Inc., Class A (a) | 28,819 | 837,192 | ||||||
Sirius XM Holdings, Inc. * | 300,200 | 1,029,686 | ||||||
The Madison Square Garden Co., Class A * | 16,000 | 1,212,160 | ||||||
The New York Times Co., Class A | 110,000 | 1,412,400 | ||||||
27,350,443 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.0% | ||||||||
Alexion Pharmaceuticals, Inc. * | 5,500 | 1,052,480 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 12,200 | 1,376,404 | ||||||
Bio-Techne Corp. | 12,665 | 1,153,148 | ||||||
Bruker Corp. * | 33,800 | 700,674 | ||||||
Charles River Laboratories International, Inc. * | 42,200 | 2,665,352 | ||||||
Cubist Pharmaceuticals, Inc. * | 11,940 | 863,143 | ||||||
Illumina, Inc. * | 9,460 | 1,821,807 | ||||||
Impax Laboratories, Inc. * | 35,500 | 1,028,435 | ||||||
Mallinckrodt plc * | 18,121 | 1,670,394 | ||||||
Myriad Genetics, Inc. *(a) | 24,400 | 963,556 | ||||||
PAREXEL International Corp. * | 18,220 | 989,528 | ||||||
PDL BioPharma, Inc. (a) | 139,150 | 1,186,949 | ||||||
PerkinElmer, Inc. | 54,800 | 2,379,416 | ||||||
Perrigo Co., plc | 17,300 | 2,793,085 | ||||||
QIAGEN N.V. * | 71,000 | 1,665,660 | ||||||
Quintiles Transnational Holdings, Inc. * | 5,600 | 327,824 | ||||||
United Therapeutics Corp. * | 7,100 | 929,887 | ||||||
23,567,742 | ||||||||
Real Estate 9.3% | ||||||||
AG Mortgage Investment Trust, Inc. | 18,900 | 360,423 | ||||||
Alexandria Real Estate Equities, Inc. | 24,200 | 2,008,600 | ||||||
American Campus Communities, Inc. | 25,160 | 988,033 | ||||||
American Capital Mortgage Investment Corp. | 31,400 | 615,126 | ||||||
Anworth Mortgage Asset Corp. | 176,155 | 914,245 | ||||||
Ashford Hospitality Trust, Inc. | 62,085 | 701,561 | ||||||
BioMed Realty Trust, Inc. | 70,900 | 1,539,948 | ||||||
Brandywine Realty Trust | 111,800 | 1,725,074 | ||||||
Camden Property Trust | 30,800 | 2,361,436 | ||||||
Capstead Mortgage Corp. | 84,750 | 1,077,173 | ||||||
CBL & Associates Properties, Inc. | 101,800 | 1,947,434 | ||||||
CBRE Group, Inc., Class A * | 75,600 | 2,419,200 | ||||||
Chimera Investment Corp. | 440,600 | 1,374,672 | ||||||
Columbia Property Trust, Inc. | 42,800 | 1,079,844 | ||||||
Corporate Office Properties Trust | 55,800 | 1,525,572 | ||||||
Corrections Corp. of America | 84,728 | 3,116,296 | ||||||
Cousins Properties, Inc. | 48,283 | 628,162 | ||||||
CYS Investments, Inc. | 120,100 | 1,072,493 | ||||||
DCT Industrial Trust, Inc. | 120,600 | 1,033,542 | ||||||
DDR Corp. | 100,000 | 1,814,000 | ||||||
DiamondRock Hospitality Co. | 90,600 | 1,300,110 | ||||||
Digital Realty Trust, Inc. | 45,600 | 3,145,944 | ||||||
Douglas Emmett, Inc. | 51,100 | 1,437,443 | ||||||
Duke Realty Corp. | 163,400 | 3,098,064 | ||||||
EastGroup Properties, Inc. | 11,150 | 767,789 | ||||||
EPR Properties | 22,500 | 1,262,250 | ||||||
Equity Commonwealth | 82,400 | 2,200,904 | ||||||
Equity LifeStyle Properties, Inc. | 17,740 | 871,034 | ||||||
Equity One, Inc. | 14,400 | 345,600 | ||||||
Essex Property Trust, Inc. | 13,309 | 2,685,224 | ||||||
Extra Space Storage, Inc. | 16,565 | 963,420 | ||||||
Federal Realty Investment Trust | 19,100 | 2,517,380 |
14 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Franklin Street Properties Corp. | 17,500 | 209,825 | ||||||
Glimcher Realty Trust | 60,725 | 833,754 | ||||||
Government Properties Income Trust | 14,500 | 330,890 | ||||||
Hatteras Financial Corp. | 68,300 | 1,300,432 | ||||||
Healthcare Realty Trust, Inc. | 39,100 | 1,034,977 | ||||||
Healthcare Trust of America, Inc., Class A | 29,600 | 380,064 | ||||||
Hersha Hospitality Trust | 49,100 | 357,939 | ||||||
Highwoods Properties, Inc. | 39,400 | 1,689,078 | ||||||
Home Properties, Inc. | 23,600 | 1,517,716 | ||||||
HomeBanc Corp. *(b)(c) | 6,875 | — | ||||||
Inland Real Estate Corp. | 59,530 | 631,613 | ||||||
Invesco Mortgage Capital, Inc. | 64,900 | 1,073,446 | ||||||
Investors Real Estate Trust | 36,700 | 308,280 | ||||||
iStar Financial, Inc. * | 97,000 | 1,376,430 | ||||||
Jones Lang LaSalle, Inc. | 22,800 | 3,082,788 | ||||||
Kilroy Realty Corp. | 19,600 | 1,327,704 | ||||||
LaSalle Hotel Properties | 33,540 | 1,315,103 | ||||||
Lexington Realty Trust | 99,700 | 1,092,712 | ||||||
Liberty Property Trust | 73,200 | 2,545,164 | ||||||
Mack-Cali Realty Corp. | 113,200 | 2,120,236 | ||||||
Medical Properties Trust, Inc. | 25,500 | 343,995 | ||||||
MFA Financial, Inc. | 233,400 | 1,955,892 | ||||||
Mid-America Apartment Communities, Inc. | 18,221 | 1,287,496 | ||||||
National Retail Properties, Inc. | 30,800 | 1,174,096 | ||||||
NorthStar Realty Finance Corp. | 31,366 | 582,780 | ||||||
Omega Healthcare Investors, Inc. (a) | 29,090 | 1,110,074 | ||||||
Pennsylvania Real Estate Investment Trust | 45,000 | 964,350 | ||||||
PennyMac Mortgage Investment Trust | 18,200 | 392,938 | ||||||
Piedmont Office Realty Trust, Inc., Class A | 144,500 | 2,810,525 | ||||||
Post Properties, Inc. | 16,320 | 912,941 | ||||||
Potlatch Corp. | 25,800 | 1,134,942 | ||||||
PS Business Parks, Inc. | 7,350 | 619,017 | ||||||
Realty Income Corp. | 37,700 | 1,735,331 | ||||||
Redwood Trust, Inc. | 58,500 | 1,099,215 | ||||||
Regency Centers Corp. | 37,500 | 2,276,250 | ||||||
Retail Properties of America, Inc., Class A | 92,000 | 1,443,480 | ||||||
RLJ Lodging Trust | 33,200 | 1,069,704 | ||||||
Ryman Hospitality Properties, Inc. (a) | 16,600 | 819,210 | ||||||
Sabra Health Care REIT, Inc. | 35,000 | 999,950 | ||||||
Senior Housing Properties Trust | 70,300 | 1,588,077 | ||||||
SL Green Realty Corp. | 20,200 | 2,337,140 | ||||||
Sovran Self Storage, Inc. | 9,770 | 831,329 | ||||||
Starwood Property Trust, Inc. | 36,100 | 814,416 | ||||||
Sun Communities, Inc. | 12,755 | 739,407 | ||||||
Sunstone Hotel Investors, Inc. | 63,200 | 967,592 | ||||||
Tanger Factory Outlet Centers, Inc. | 25,180 | 900,689 | ||||||
Taubman Centers, Inc. | 19,300 | 1,467,765 | ||||||
The Geo Group, Inc. | 32,236 | 1,287,506 | ||||||
Two Harbors Investment Corp. | 36,900 | 373,797 | ||||||
UDR, Inc. | 88,200 | 2,666,286 | ||||||
Washington Real Estate Investment Trust | 44,200 | 1,249,092 | ||||||
Weingarten Realty Investors | 65,400 | 2,370,750 | ||||||
WP Carey, Inc. | 16,200 | 1,097,064 | ||||||
112,849,243 | ||||||||
Retailing 5.2% | ||||||||
Aeropostale, Inc. *(a) | 443,700 | 1,335,537 | ||||||
ANN, Inc. * | 61,600 | 2,364,824 | ||||||
Asbury Automotive Group, Inc. * | 22,400 | 1,568,896 | ||||||
Ascena Retail Group, Inc. * | 99,800 | 1,242,510 | ||||||
Barnes & Noble, Inc. * | 91,700 | 2,000,894 | ||||||
Brown Shoe Co., Inc. | 49,642 | 1,319,981 | ||||||
Burlington Stores, Inc. * | 19,000 | 796,860 | ||||||
Cabela’s, Inc. * | 15,800 | 758,716 | ||||||
Chico’s FAS, Inc. | 165,100 | 2,489,708 | ||||||
DSW, Inc., Class A | 47,936 | 1,421,302 | ||||||
Express, Inc. * | 84,600 | 1,266,462 | ||||||
Five Below, Inc. * | 7,700 | 306,999 | ||||||
Fred’s, Inc., Class A | 100,670 | 1,580,519 | ||||||
Genesco, Inc. * | 21,600 | 1,656,504 | ||||||
GNC Holdings, Inc., Class A | 43,600 | 1,812,452 | ||||||
Group 1 Automotive, Inc. | 34,200 | 2,921,706 | ||||||
hhgregg, Inc. *(a) | 66,600 | 344,988 | ||||||
Hibbett Sports, Inc. * | 17,885 | 811,800 | ||||||
HSN, Inc. | 23,300 | 1,539,431 | ||||||
Lithia Motors, Inc., Class A | 13,235 | 1,027,301 | ||||||
LKQ Corp. * | 82,700 | 2,362,739 | ||||||
Lumber Liquidators Holdings, Inc. * | 8,200 | 440,914 | ||||||
Monro Muffler Brake, Inc. | 13,440 | 718,234 | ||||||
Netflix, Inc. * | 4,420 | 1,736,043 | ||||||
Nutrisystem, Inc. | 59,030 | 994,065 | ||||||
Office Depot, Inc. * | 514,158 | 2,683,905 | ||||||
Outerwall, Inc. *(a) | 21,625 | 1,368,214 | ||||||
Penske Automotive Group, Inc. | 44,800 | 2,026,752 | ||||||
Pier 1 Imports, Inc. | 66,685 | 860,237 | ||||||
Pool Corp. | 23,680 | 1,413,696 | ||||||
Sally Beauty Holdings, Inc. * | 46,965 | 1,376,544 | ||||||
Sears Hometown & Outlet Stores, Inc. * | 49,300 | 741,472 | ||||||
Select Comfort Corp. * | 30,170 | 775,067 | ||||||
Sonic Automotive, Inc., Class A | 71,200 | 1,772,168 | ||||||
Stage Stores, Inc. | 70,655 | 1,191,950 | ||||||
Stein Mart, Inc. | 22,700 | 303,726 | ||||||
The Bon-Ton Stores, Inc. (a) | 49,100 | 432,571 | ||||||
The Buckle, Inc. (a) | 30,922 | 1,525,382 | ||||||
The Cato Corp., Class A | 34,295 | 1,223,303 | ||||||
The Children’s Place, Inc. | 39,860 | 1,963,105 | ||||||
The Finish Line, Inc., Class A | 55,952 | 1,481,049 | ||||||
The Men’s Wearhouse, Inc. | 54,100 | 2,544,323 | ||||||
The Pep Boys - Manny, Moe & Jack * | 98,015 | 934,083 | ||||||
TripAdvisor, Inc. * | 7,600 | 673,816 | ||||||
Tuesday Morning Corp. * | 20,700 | 422,073 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. * | 15,300 | 1,848,393 | ||||||
Vitamin Shoppe, Inc. * | 17,600 | 825,968 | ||||||
63,207,182 | ||||||||
Semiconductors & Semiconductor Equipment 3.8% | ||||||||
Advanced Energy Industries, Inc. * | 16,800 | 332,304 | ||||||
Advanced Micro Devices, Inc. *(a) | 622,800 | 1,743,840 |
See financial notes 15
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Amkor Technology, Inc. * | 138,500 | 939,030 | ||||||
Atmel Corp. * | 319,100 | 2,367,722 | ||||||
Brooks Automation, Inc. | 78,990 | 973,947 | ||||||
Cabot Microelectronics Corp. * | 22,830 | 1,101,091 | ||||||
Cirrus Logic, Inc. * | 41,535 | 801,626 | ||||||
Cree, Inc. * | 26,000 | 818,480 | ||||||
Cypress Semiconductor Corp. * | 195,505 | 1,937,455 | ||||||
Diodes, Inc. * | 21,800 | 563,094 | ||||||
Entegris, Inc. * | 89,345 | 1,213,305 | ||||||
Fairchild Semiconductor International, Inc. * | 131,500 | 2,018,525 | ||||||
First Solar, Inc. * | 38,200 | 2,249,980 | ||||||
Freescale Semiconductor Ltd. * | 17,600 | 350,064 | ||||||
Integrated Device Technology, Inc. * | 96,880 | 1,589,801 | ||||||
International Rectifier Corp. * | 41,600 | 1,654,432 | ||||||
Intersil Corp., Class A | 140,000 | 1,860,600 | ||||||
Micrel, Inc. | 49,150 | 596,681 | ||||||
Microsemi Corp. * | 27,745 | 723,312 | ||||||
MKS Instruments, Inc. | 40,150 | 1,461,460 | ||||||
OmniVision Technologies, Inc. * | 44,580 | 1,193,852 | ||||||
ON Semiconductor Corp. * | 256,200 | 2,123,898 | ||||||
Photronics, Inc. * | 81,425 | 732,011 | ||||||
PMC-Sierra, Inc. * | 115,125 | 896,824 | ||||||
Power Integrations, Inc. | 5,400 | 271,944 | ||||||
RF Micro Devices, Inc. * | 131,645 | 1,712,701 | ||||||
Silicon Laboratories, Inc. * | 37,590 | 1,713,728 | ||||||
Skyworks Solutions, Inc. | 41,400 | 2,411,136 | ||||||
Spansion, Inc., Class A * | 49,800 | 1,024,884 | ||||||
SunEdison, Inc. * | 116,300 | 2,269,013 | ||||||
Synaptics, Inc. * | 13,905 | 951,519 | ||||||
Teradyne, Inc. | 103,100 | 1,897,040 | ||||||
Tessera Technologies, Inc. | 27,990 | 850,616 | ||||||
TriQuint Semiconductor, Inc. * | 77,360 | 1,673,297 | ||||||
Veeco Instruments, Inc. * | 27,360 | 984,686 | ||||||
46,003,898 | ||||||||
Software & Services 5.9% | ||||||||
ACI Worldwide, Inc. * | 15,300 | 294,372 | ||||||
Acxiom Corp. * | 58,415 | 1,100,539 | ||||||
Akamai Technologies, Inc. * | 47,300 | 2,852,190 | ||||||
ANSYS, Inc. * | 16,000 | 1,256,960 | ||||||
Cadence Design Systems, Inc. * | 41,300 | 741,335 | ||||||
Compuware Corp. | 199,000 | 2,019,850 | ||||||
Convergys Corp. | 143,600 | 2,896,412 | ||||||
Conversant, Inc. * | 54,780 | 1,930,995 | ||||||
Covisint Corp. * | 1,396 | 4,034 | ||||||
CSG Systems International, Inc. | 33,745 | 894,580 | ||||||
Digital River, Inc. * | 45,000 | 1,150,650 | ||||||
DST Systems, Inc. | 33,100 | 3,189,185 | ||||||
EarthLink Holdings Corp. | 393,375 | 1,408,282 | ||||||
Equinix, Inc. | 8,800 | 1,838,320 | ||||||
Euronet Worldwide, Inc. * | 17,995 | 965,792 | ||||||
FactSet Research Systems, Inc. | 16,365 | 2,151,015 | ||||||
Fair Isaac Corp. | 30,205 | 1,881,771 | ||||||
FleetCor Technologies, Inc. * | 5,600 | 843,136 | ||||||
Gartner, Inc. * | 20,600 | 1,662,626 | ||||||
Genpact Ltd. * | 85,650 | 1,503,157 | ||||||
Global Cash Access Holdings, Inc. * | 75,035 | 547,005 | ||||||
Global Payments, Inc. | 32,300 | 2,600,150 | ||||||
Heartland Payment Systems, Inc. | 23,865 | 1,232,627 | ||||||
Informatica Corp. * | 23,255 | 829,273 | ||||||
j2 Global, Inc. | 16,785 | 907,901 | ||||||
Jack Henry & Associates, Inc. | 29,080 | 1,739,566 | ||||||
Manhattan Associates, Inc. * | 23,980 | 961,838 | ||||||
ManTech International Corp., Class A | 49,900 | 1,405,184 | ||||||
MAXIMUS, Inc. | 32,180 | 1,559,443 | ||||||
Mentor Graphics Corp. | 32,420 | 686,980 | ||||||
Monster Worldwide, Inc. * | 270,200 | 1,042,972 | ||||||
NeuStar, Inc., Class A *(a) | 52,575 | 1,388,506 | ||||||
Nuance Communications, Inc. * | 69,400 | 1,070,842 | ||||||
Progress Software Corp. * | 46,525 | 1,204,997 | ||||||
PTC, Inc. * | 31,640 | 1,207,066 | ||||||
Rackspace Hosting, Inc. * | 26,420 | 1,013,471 | ||||||
Red Hat, Inc. * | 24,700 | 1,455,324 | ||||||
Rovi Corp. * | 36,969 | 771,913 | ||||||
salesforce.com, Inc. * | 24,233 | 1,550,670 | ||||||
Sapient Corp. * | 49,580 | 858,726 | ||||||
Solera Holdings, Inc. | 15,260 | 792,757 | ||||||
Sykes Enterprises, Inc. * | 46,155 | 994,179 | ||||||
Synopsys, Inc. * | 47,800 | 1,958,844 | ||||||
Take-Two Interactive Software, Inc. * | 49,755 | 1,316,020 | ||||||
TeleTech Holdings, Inc. * | 25,210 | 650,670 | ||||||
TIBCO Software, Inc. * | 82,130 | 1,919,378 | ||||||
Unisys Corp. * | 59,400 | 1,523,016 | ||||||
Vantiv, Inc., Class A * | 12,900 | 398,868 | ||||||
VeriFone Systems, Inc. * | 27,400 | 1,020,924 | ||||||
VeriSign, Inc. * | 51,100 | 3,053,736 | ||||||
Vistaprint N.V. *(a) | 22,220 | 1,485,629 | ||||||
VMware, Inc., Class A * | 7,000 | 584,990 | ||||||
WebMD Health Corp. * | 12,400 | 529,232 | ||||||
WEX, Inc. * | 8,600 | 976,616 | ||||||
71,824,514 | ||||||||
Technology Hardware & Equipment 4.8% | ||||||||
ADTRAN, Inc. | 53,845 | 1,142,052 | ||||||
ARRIS Group, Inc. * | 51,405 | 1,543,178 | ||||||
Belden, Inc. | 19,840 | 1,412,410 | ||||||
Benchmark Electronics, Inc. * | 98,900 | 2,345,908 | ||||||
Brocade Communications Systems, Inc. | 251,300 | 2,696,449 | ||||||
CDW Corp. | 15,000 | 462,600 | ||||||
Checkpoint Systems, Inc. * | 26,200 | 347,412 | ||||||
Cognex Corp. * | 16,530 | 653,927 | ||||||
Coherent, Inc. * | 17,740 | 1,155,761 | ||||||
CommScope Holding Co., Inc. * | 17,200 | 370,488 | ||||||
Comtech Telecommunications Corp. | 33,770 | 1,285,624 | ||||||
Diebold, Inc. | 69,800 | 2,473,014 | ||||||
Dolby Laboratories, Inc., Class A | 26,400 | 1,106,688 | ||||||
EchoStar Corp., Class A * | 20,300 | 948,619 | ||||||
Electronics for Imaging, Inc. * | 22,402 | 1,024,219 | ||||||
Emulex Corp. * | 133,465 | 755,412 | ||||||
F5 Networks, Inc. * | 21,440 | 2,636,691 | ||||||
Fabrinet * | 18,300 | 333,243 | ||||||
FEI Co. | 8,920 | 751,778 | ||||||
Finisar Corp. * | 41,330 | 691,038 | ||||||
FLIR Systems, Inc. | 77,800 | 2,608,634 | ||||||
Insight Enterprises, Inc. * | 90,400 | 2,056,600 |
16 See financial notes
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
InterDigital, Inc. | 28,200 | 1,393,926 | ||||||
Itron, Inc. * | 47,100 | 1,833,603 | ||||||
JDS Uniphase Corp. * | 110,000 | 1,480,600 | ||||||
Knowles Corp. * | 17,800 | 346,388 | ||||||
Littelfuse, Inc. | 8,645 | 843,233 | ||||||
MTS Systems Corp. | 9,880 | 652,179 | ||||||
National Instruments Corp. | 38,742 | 1,227,346 | ||||||
NCR Corp. * | 81,000 | 2,241,270 | ||||||
NETGEAR, Inc. * | 27,450 | 934,398 | ||||||
OSI Systems, Inc. * | 9,200 | 652,096 | ||||||
Plantronics, Inc. | 23,410 | 1,214,277 | ||||||
Plexus Corp. * | 46,380 | 1,917,813 | ||||||
Polycom, Inc. * | 144,840 | 1,894,507 | ||||||
QLogic Corp. * | 210,180 | 2,482,226 | ||||||
Riverbed Technology, Inc. * | 14,500 | 275,355 | ||||||
Rofin-Sinar Technologies, Inc. * | 33,710 | 754,767 | ||||||
Sanmina Corp. * | 128,200 | 3,213,974 | ||||||
ScanSource, Inc. * | 40,240 | 1,536,363 | ||||||
Trimble Navigation Ltd. * | 46,100 | 1,238,246 | ||||||
TTM Technologies, Inc. * | 41,900 | 289,529 | ||||||
ViaSat, Inc. * | 11,415 | 715,036 | ||||||
Zebra Technologies Corp., Class A * | 31,920 | 2,354,100 | ||||||
58,292,977 | ||||||||
Telecommunication Services 1.0% | ||||||||
Cincinnati Bell, Inc. * | 385,400 | 1,414,418 | ||||||
Consolidated Communications Holdings, Inc. | 40,414 | 1,046,722 | ||||||
Inteliquent, Inc. | 21,700 | 365,211 | ||||||
Intelsat S.A. * | 44,400 | 864,024 | ||||||
Level 3 Communications, Inc. * | 54,200 | 2,542,522 | ||||||
NTELOS Holdings Corp. (a) | 48,620 | 490,090 | ||||||
SBA Communications Corp., Class A * | 16,405 | 1,842,774 | ||||||
Spok Holdings, Inc. | 27,400 | 444,976 | ||||||
T-Mobile US, Inc. * | 37,900 | 1,106,301 | ||||||
tw telecom, Inc. * | 50,900 | 2,177,502 | ||||||
Vonage Holdings Corp. * | 101,500 | 353,220 | ||||||
12,647,760 | ||||||||
Transportation 4.0% | ||||||||
Alaska Air Group, Inc. | 57,100 | 3,039,433 | ||||||
Allegiant Travel Co. | 5,900 | 787,473 | ||||||
AMERCO | 3,100 | 840,472 | ||||||
American Airlines Group, Inc. | 32,800 | 1,356,280 | ||||||
ArcBest Corp. | 33,240 | 1,286,388 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 35,700 | 1,318,044 | ||||||
Con-way, Inc. | 58,700 | 2,545,819 | ||||||
Copa Holdings S.A., Class A | 11,900 | 1,391,348 | ||||||
Delta Air Lines, Inc. | 54,800 | 2,204,604 | ||||||
Forward Air Corp. | 17,825 | 853,283 | ||||||
Genesee & Wyoming, Inc., Class A * | 6,865 | 660,413 | ||||||
Hawaiian Holdings, Inc. * | 48,140 | 834,748 | ||||||
Heartland Express, Inc. | 40,065 | 1,007,234 | ||||||
Hub Group, Inc., Class A * | 36,810 | 1,335,835 | ||||||
JetBlue Airways Corp. * | 209,900 | 2,422,246 | ||||||
Kirby Corp. * | 17,600 | 1,946,208 | ||||||
Knight Transportation, Inc. | 50,225 | 1,469,583 | ||||||
Landstar System, Inc. | 35,370 | 2,617,734 | ||||||
Matson, Inc. | 55,600 | 1,584,044 | ||||||
Navios Maritime Holdings, Inc. | 54,900 | 323,361 | ||||||
Old Dominion Freight Line, Inc. * | 22,275 | 1,623,179 | ||||||
Republic Airways Holdings, Inc. * | 147,100 | 1,841,692 | ||||||
Saia, Inc. * | 16,950 | 830,889 | ||||||
SkyWest, Inc. | 233,100 | 2,685,312 | ||||||
Southwest Airlines Co. | 90,700 | 3,127,336 | ||||||
Spirit Airlines, Inc. * | 7,700 | 562,947 | ||||||
Swift Transportation Co. * | 37,500 | 926,250 | ||||||
United Continental Holdings, Inc. * | 47,900 | 2,529,599 | ||||||
UTi Worldwide, Inc. * | 186,700 | 2,040,631 | ||||||
Werner Enterprises, Inc. | 72,000 | 1,982,880 | ||||||
47,975,265 | ||||||||
Utilities 4.1% | ||||||||
ALLETE, Inc. | 28,600 | 1,494,064 | ||||||
American States Water Co. | 20,130 | 720,251 | ||||||
Aqua America, Inc. | 73,975 | 1,938,145 | ||||||
Atlantic Power Corp. (a) | 271,500 | 602,730 | ||||||
Avista Corp. | 59,800 | 2,119,910 | ||||||
Black Hills Corp. | 30,000 | 1,641,900 | ||||||
California Water Service Group | 30,680 | 798,600 | ||||||
Cleco Corp. | 36,400 | 1,956,864 | ||||||
Dynegy, Inc. * | 21,300 | 649,650 | ||||||
El Paso Electric Co. | 38,690 | 1,464,030 | ||||||
Hawaiian Electric Industries, Inc. (a) | 102,000 | 2,872,320 | ||||||
IDACORP, Inc. | 32,700 | 2,067,621 | ||||||
ITC Holdings Corp. | 47,000 | 1,861,670 | ||||||
MGE Energy, Inc. | 23,150 | 1,029,480 | ||||||
New Jersey Resources Corp. | 39,000 | �� | 2,280,720 | |||||
Northwest Natural Gas Co. (a) | 29,305 | 1,375,284 | ||||||
NorthWestern Corp. | 32,700 | 1,727,868 | ||||||
Otter Tail Corp. | 37,180 | 1,152,580 | ||||||
Piedmont Natural Gas Co., Inc. | 63,500 | 2,413,635 | ||||||
PNM Resources, Inc. | 76,400 | 2,204,140 | ||||||
Portland General Electric Co. | 78,800 | 2,869,108 | ||||||
Questar Corp. | 134,400 | 3,240,384 | ||||||
South Jersey Industries, Inc. | 18,140 | 1,063,730 | ||||||
Southwest Gas Corp. | 41,500 | 2,410,735 | ||||||
The Empire District Electric Co. | 43,110 | 1,226,048 | ||||||
The Laclede Group, Inc. | 28,540 | 1,448,976 | ||||||
UIL Holdings Corp. | 42,400 | 1,744,336 | ||||||
WGL Holdings, Inc. | 60,400 | 2,838,800 | ||||||
49,213,579 | ||||||||
Total Common Stock | ||||||||
(Cost $936,334,702) | 1,201,580,309 | |||||||
Rights 0.0% of net assets | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Gerber Scientific, Inc. CVR *(a)(b)(c) | 19,700 | — |
See financial notes 17
Table of Contents
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Telecommunication Services 0.0% | ||||||||
Contra Leap Wireless CVR *(b)(c) | 105,700 | 266,364 | ||||||
Total Rights | ||||||||
(Cost $266,857) | 266,364 | |||||||
Other Investment Company 3.4% of net assets | ||||||||
Securities Lending Collateral 3.4% | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.00% (f) | 40,701,297 | 40,701,297 | ||||||
Total Other Investment Company | ||||||||
(Cost $40,701,297) | 40,701,297 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.1% of net assets | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/18/14 (d)(e) | 1,040,000 | 1,039,983 | ||||||
Total Short-Term Investment | ||||||||
(Cost $1,039,983) | 1,039,983 | |||||||
End of Investments. |
At 10/31/14 tax basis cost of the fund’s investments was $984,525,962 and the unrealized appreciation and depreciation were $298,144,150 and ($39,082,159), respectively, with a net unrealized appreciation of $259,061,991
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $40,305,835. Non-Cash Collateral pledged to the fund for securities on loan amounted to $697,106. | |
(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 $266,364 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
CVR — | Contingent Value Rights | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/19/14 | 40 | 4,684,000 | 63,962 |
18 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .8% | Common Stock | 809,911,937 | 896,853,900 | ||||||||
0 | .6% | Preferred Stock | 4,534,745 | 5,189,504 | ||||||||
0 | .0% | Rights | 240,551 | 237,808 | ||||||||
1 | .0% | Other Investment Companies | 9,110,883 | 9,112,622 | ||||||||
0 | .1% | Short-Term Investments | 872,092 | 872,092 | ||||||||
100 | .5% | Total Investments | 824,670,208 | 912,265,926 | ||||||||
(0 | .5%) | Other Assets and Liabilities, Net | (4,209,615 | ) | ||||||||
100 | .0% | Net Assets | 908,056,311 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.8% of net assets | ||||||||
Australia 5.6% | ||||||||
Banks 1.6% | ||||||||
Australia & New Zealand Banking Group Ltd. | 111,810 | 3,308,522 | ||||||
Commonwealth Bank of Australia | 56,055 | 3,986,038 | ||||||
National Australia Bank Ltd. | 116,229 | 3,595,632 | ||||||
Westpac Banking Corp. | 118,595 | 3,640,186 | ||||||
14,530,378 | ||||||||
Capital Goods 0.1% | ||||||||
Leighton Holdings Ltd. | 15,515 | 302,059 | ||||||
UGL Ltd. * | 44,635 | 276,087 | ||||||
578,146 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Brambles Ltd. | 80,223 | 674,742 | ||||||
Downer EDI Ltd. | 60,249 | 254,422 | ||||||
929,164 | ||||||||
Consumer Services 0.1% | ||||||||
Crown Resorts Ltd. | 17,844 | 228,878 | ||||||
Tabcorp Holdings Ltd. | 134,982 | 484,878 | ||||||
Tatts Group Ltd. | 131,274 | 401,841 | ||||||
1,115,597 | ||||||||
Diversified Financials 0.1% | ||||||||
BGP Holdings plc (a)(b) | 453,854 | — | ||||||
Macquarie Group Ltd. | 13,225 | 714,732 | ||||||
714,732 | ||||||||
Energy 0.3% | ||||||||
Caltex Australia Ltd. | 22,917 | 631,207 | ||||||
Origin Energy Ltd. | 56,841 | 714,077 | ||||||
Santos Ltd. | 39,987 | 458,221 | ||||||
Woodside Petroleum Ltd. | 24,218 | 860,232 | ||||||
WorleyParsons Ltd. | 24,205 | 288,905 | ||||||
2,952,642 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
Metcash Ltd. | 189,772 | 473,969 | ||||||
Wesfarmers Ltd. | 87,191 | 3,393,272 | ||||||
Woolworths Ltd. | 86,426 | 2,742,777 | ||||||
6,610,018 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca-Cola Amatil Ltd. | 41,115 | 331,772 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Sonic Healthcare Ltd. | 19,128 | 316,544 | ||||||
Insurance 0.5% | ||||||||
AMP Ltd. | 151,054 | 778,989 | ||||||
Insurance Australia Group Ltd. | 85,916 | 496,810 | ||||||
QBE Insurance Group Ltd. | 117,562 | 1,194,183 | ||||||
Suncorp Group Ltd. | 118,672 | 1,544,187 | ||||||
4,014,169 | ||||||||
Materials 1.3% | ||||||||
Amcor Ltd. | 64,182 | 666,648 | ||||||
Arrium Ltd. | 524,875 | 155,830 | ||||||
BHP Billiton Ltd. | 212,283 | 6,350,834 | ||||||
BlueScope Steel Ltd. * | 110,602 | 515,622 | ||||||
Boral Ltd. | 75,065 | 329,698 | ||||||
Incitec Pivot Ltd. | 141,569 | 363,280 | ||||||
Newcrest Mining Ltd. * | 63,841 | 523,598 | ||||||
Orica Ltd. | 32,420 | 591,802 | ||||||
Rio Tinto Ltd. | 32,516 | 1,736,299 | ||||||
11,233,611 | ||||||||
Media 0.0% | ||||||||
Fairfax Media Ltd. | 319,949 | 229,970 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
CSL Ltd. | 12,617 | 890,797 | ||||||
Real Estate 0.2% | ||||||||
Lend Lease Group | 39,454 | 550,266 | ||||||
Mirvac Group | 154,880 | 245,719 | ||||||
Stockland | 140,827 | 526,520 | ||||||
Westfield Corp. | 112,469 | 790,319 | ||||||
2,112,824 | ||||||||
Software & Services 0.0% | ||||||||
Computershare Ltd. | 19,506 | 211,692 | ||||||
Telecommunication Services 0.2% | ||||||||
Telstra Corp., Ltd. | 324,289 | 1,613,712 | ||||||
Transportation 0.2% | ||||||||
Asciano Ltd. | 59,697 | 330,211 | ||||||
Aurizon Holdings Ltd. | 64,822 | 268,863 | ||||||
Qantas Airways Ltd. * | 342,751 | 512,108 | ||||||
Toll Holdings Ltd. | 88,690 | 444,356 | ||||||
Transurban Group | 28,799 | 206,256 | ||||||
1,761,794 |
See financial notes 19
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 0.1% | ||||||||
AGL Energy Ltd. | 38,966 | 467,107 | ||||||
50,614,669 | ||||||||
Austria 0.3% | ||||||||
Banks 0.1% | ||||||||
Erste Group Bank AG | 40,273 | 1,027,667 | ||||||
Raiffeisen Bank International AG | 9,966 | 213,390 | ||||||
1,241,057 | ||||||||
Capital Goods 0.0% | ||||||||
ANDRITZ AG | 3,786 | 182,956 | ||||||
Energy 0.1% | ||||||||
OMV AG | 26,405 | 829,989 | ||||||
Materials 0.1% | ||||||||
Voestalpine AG | 14,277 | 571,907 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG (c) | 40,590 | 304,175 | ||||||
3,130,084 | ||||||||
Belgium 0.9% | ||||||||
Banks 0.1% | ||||||||
KBC Groep N.V. * | 9,417 | 505,841 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Colruyt S.A. | 5,908 | 269,081 | ||||||
Delhaize Group S.A. | 24,271 | 1,659,526 | ||||||
1,928,607 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Anheuser-Busch InBev N.V. | 24,138 | 2,676,768 | ||||||
Insurance 0.1% | ||||||||
Ageas | 22,444 | 750,256 | ||||||
Materials 0.1% | ||||||||
Bekaert N.V. | 9,281 | 291,775 | ||||||
Solvay S.A. | 3,845 | 524,918 | ||||||
Umicore S.A. | 14,137 | 554,856 | ||||||
1,371,549 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
UCB S.A. | 4,195 | 338,311 | ||||||
Telecommunication Services 0.1% | ||||||||
Belgacom S.A. | 18,882 | 713,146 | ||||||
8,284,478 | ||||||||
Canada 6.8% | ||||||||
Automobiles & Components 0.2% | ||||||||
Magna International, Inc. | 17,246 | 1,702,183 | ||||||
Banks 1.5% | ||||||||
Bank of Montreal | 27,891 | 2,022,564 | ||||||
Canadian Imperial Bank of Commerce | 16,773 | 1,531,231 | ||||||
National Bank of Canada | 14,817 | 692,569 | ||||||
Royal Bank of Canada | 55,963 | 3,972,849 | ||||||
The Bank of Nova Scotia | 43,413 | 2,658,591 | ||||||
The Toronto-Dominion Bank | 61,335 | 3,018,724 | ||||||
13,896,528 | ||||||||
Capital Goods 0.1% | ||||||||
Bombardier, Inc., Class B | 123,564 | 406,746 | ||||||
Finning International, Inc. | 11,142 | 287,682 | ||||||
SNC-Lavalin Group, Inc. | 6,916 | 297,982 | ||||||
992,410 | ||||||||
Consumer Services 0.1% | ||||||||
Tim Hortons, Inc. | 6,650 | 538,821 | ||||||
Diversified Financials 0.1% | ||||||||
IGM Financial, Inc. | 5,365 | 214,590 | ||||||
Onex Corp. | 6,913 | 390,043 | ||||||
604,633 | ||||||||
Energy 1.9% | ||||||||
ARC Resources Ltd. (c) | 13,663 | 322,224 | ||||||
Baytex Energy Corp. (c) | 6,000 | 183,346 | ||||||
Bonavista Energy Corp. (c) | 15,832 | 148,761 | ||||||
Cameco Corp. | 17,414 | 302,375 | ||||||
Canadian Natural Resources Ltd. | 51,812 | 1,808,053 | ||||||
Canadian Oil Sands Ltd. | 50,113 | 785,232 | ||||||
Cenovus Energy, Inc. | 51,019 | 1,262,517 | ||||||
Crescent Point Energy Corp. (c) | 11,403 | 376,879 | ||||||
Enbridge, Inc. | 24,482 | 1,158,445 | ||||||
Encana Corp. | 109,389 | 2,038,214 | ||||||
Enerplus Corp. | 19,956 | 285,781 | ||||||
Husky Energy, Inc. | 25,700 | 620,467 | ||||||
Imperial Oil Ltd. | 17,815 | 857,200 | ||||||
Inter Pipeline Ltd. | 4,315 | 135,953 | ||||||
Pacific Rubiales Energy Corp. | 15,209 | 229,407 | ||||||
Pembina Pipeline Corp. | 6,360 | 263,869 | ||||||
Pengrowth Energy Corp. | 63,569 | 256,634 | ||||||
Penn West Petroleum Ltd. | 109,030 | 493,370 | ||||||
Suncor Energy, Inc. | 83,019 | 2,947,891 | ||||||
Talisman Energy, Inc. | 118,313 | 754,776 | ||||||
TransCanada Corp. | 34,006 | 1,676,086 | ||||||
Vermilion Energy, Inc. | 3,296 | 187,048 | ||||||
17,094,528 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Alimentation Couche-Tard, Inc., Class B | 25,192 | 854,970 | ||||||
Empire Co., Ltd, Class A | 6,922 | 478,868 | ||||||
George Weston Ltd. | 5,656 | 462,095 | ||||||
Loblaw Cos., Ltd. | 18,836 | 981,367 | ||||||
Metro, Inc. | 11,641 | 818,036 | ||||||
3,595,336 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Saputo, Inc. | 12,861 | 364,930 | ||||||
Insurance 0.5% | ||||||||
Fairfax Financial Holdings Ltd. | 1,012 | 462,366 | ||||||
Great-West Lifeco, Inc. | 12,270 | 343,806 | ||||||
Intact Financial Corp. | 4,181 | 280,341 | ||||||
Manulife Financial Corp. | 69,764 | 1,324,033 | ||||||
Power Corp. of Canada | 34,036 | 898,124 | ||||||
Power Financial Corp. | 15,314 | 448,529 | ||||||
Sun Life Financial, Inc. | 22,295 | 793,050 | ||||||
4,550,249 | ||||||||
Materials 0.6% | ||||||||
Agrium, Inc. | 9,583 | 937,596 | ||||||
Barrick Gold Corp. | 103,313 | 1,226,501 | ||||||
First Quantum Minerals Ltd. | 19,617 | 295,896 | ||||||
Goldcorp, Inc. | 29,837 | 559,915 |
20 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Kinross Gold Corp. * | 115,339 | 246,632 | ||||||
Potash Corp. of Saskatchewan, Inc. | 50,075 | 1,709,228 | ||||||
Teck Resources Ltd., Class B | 47,959 | 757,863 | ||||||
Yamana Gold, Inc. | 36,262 | 144,463 | ||||||
5,878,094 | ||||||||
Media 0.1% | ||||||||
Quebecor, Inc., Class B | 8,675 | 222,677 | ||||||
Shaw Communications, Inc., Class B | 19,856 | 509,855 | ||||||
Yellow Media Ltd. * | 13,207 | 192,882 | ||||||
925,414 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Valeant Pharmaceuticals International, Inc. * | 2,768 | 367,904 | ||||||
Real Estate 0.2% | ||||||||
Brookfield Asset Management, Inc., Class A | 29,146 | 1,426,720 | ||||||
Retailing 0.1% | ||||||||
Canadian Tire Corp., Ltd., Class A | 5,049 | 553,573 | ||||||
RONA, Inc. | 28,369 | 346,102 | ||||||
899,675 | ||||||||
Software & Services 0.0% | ||||||||
CGI Group, Inc., Class A * | 9,573 | 328,627 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
BlackBerry Ltd. * | 169,375 | 1,779,336 | ||||||
Celestica, Inc. * | 26,838 | 294,800 | ||||||
2,074,136 | ||||||||
Telecommunication Services 0.3% | ||||||||
BCE, Inc. | 27,601 | 1,225,704 | ||||||
Rogers Communications, Inc., Class B | 21,637 | 813,607 | ||||||
TELUS Corp. | 20,018 | 717,384 | ||||||
2,756,695 | ||||||||
Transportation 0.3% | ||||||||
Canadian National Railway Co. | 26,628 | 1,877,344 | ||||||
Canadian Pacific Railway Ltd. | 2,984 | 620,682 | ||||||
2,498,026 | ||||||||
Utilities 0.2% | ||||||||
Atco Ltd., Class I | 4,722 | 191,888 | ||||||
Canadian Utilities Ltd., Class A | 7,471 | 258,259 | ||||||
Emera, Inc. | 6,709 | 225,548 | ||||||
Fortis, Inc. (c) | 13,250 | 431,693 | ||||||
TransAlta Corp. | 36,023 | 350,306 | ||||||
1,457,694 | ||||||||
61,952,603 | ||||||||
Denmark 0.8% | ||||||||
Banks 0.1% | ||||||||
Danske Bank A/S | 29,580 | 812,275 | ||||||
Capital Goods 0.1% | ||||||||
FLSmidth & Co. A/S (c) | 4,859 | 220,305 | ||||||
Vestas Wind Systems A/S * | 10,164 | 339,223 | ||||||
559,528 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Carlsberg A/S, Class B | 6,599 | 582,023 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Novo Nordisk A/S, Class B | 45,053 | 2,036,518 | ||||||
Telecommunication Services 0.1% | ||||||||
TDC A/S | 96,106 | 733,967 | ||||||
Transportation 0.2% | ||||||||
AP Moeller - Maersk A/S, Series A | 444 | 1,010,079 | ||||||
AP Moeller - Maersk A/S, Series B | 701 | 1,635,837 | ||||||
DSV A/S | 8,170 | 244,538 | ||||||
2,890,454 | ||||||||
7,614,765 | ||||||||
Finland 1.2% | ||||||||
Automobiles & Components 0.0% | ||||||||
Nokian Renkaat Oyj | 4,815 | 136,026 | ||||||
Capital Goods 0.2% | ||||||||
Kone Oyj, Class B | 9,254 | 398,551 | ||||||
Metso Oyj | 13,524 | 441,858 | ||||||
Wartsila Oyj Abp | 9,014 | 417,959 | ||||||
YIT Oyj (c) | 23,353 | 156,230 | ||||||
1,414,598 | ||||||||
Energy 0.1% | ||||||||
Neste Oil Oyj | 19,697 | 425,787 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Kesko Oyj, B Shares | 17,426 | 660,890 | ||||||
Insurance 0.1% | ||||||||
Sampo Oyj, A Shares | 15,485 | 742,001 | ||||||
Materials 0.2% | ||||||||
Stora Enso Oyj, R Shares | 74,771 | 617,467 | ||||||
UPM-Kymmene Oyj | 68,161 | 1,081,205 | ||||||
1,698,672 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Orion Oyj, Class B | 8,468 | 288,010 | ||||||
Technology Hardware & Equipment 0.4% | ||||||||
Nokia Oyj | 481,701 | 4,025,043 | ||||||
Telecommunication Services 0.0% | ||||||||
Elisa Oyj | 11,394 | 312,997 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 35,240 | 817,278 | ||||||
10,521,302 | ||||||||
France 10.4% | ||||||||
Automobiles & Components 0.4% | ||||||||
Faurecia | 5,093 | 164,973 | ||||||
Peugeot S.A. * | 113,156 | 1,344,804 | ||||||
Renault S.A. | 19,945 | 1,483,634 | ||||||
Valeo S.A. | 4,385 | 491,693 | ||||||
3,485,104 | ||||||||
Banks 0.9% | ||||||||
BNP Paribas S.A. | 73,041 | 4,590,047 | ||||||
Credit Agricole S.A. | 73,541 | 1,088,280 |
See financial notes 21
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Societe Generale S.A. | 48,775 | 2,350,517 | ||||||
8,028,844 | ||||||||
Capital Goods 1.5% | ||||||||
Airbus Group N.V. | 14,752 | 880,710 | ||||||
Alstom S.A. * | 23,801 | 830,732 | ||||||
Bouygues S.A. | 36,737 | 1,270,144 | ||||||
Compagnie de Saint-Gobain | 69,841 | 3,002,105 | ||||||
Eiffage S.A. | 6,964 | 370,227 | ||||||
Legrand S.A. | 10,584 | 569,644 | ||||||
Nexans S.A. * | 5,618 | 171,184 | ||||||
Rexel S.A. | 28,324 | 476,099 | ||||||
Safran S.A. | 9,607 | 608,445 | ||||||
Schneider Electric SE | 29,525 | 2,326,159 | ||||||
Thales S.A. | 5,209 | 258,679 | ||||||
Vallourec S.A. | 15,648 | 571,889 | ||||||
Vinci S.A. | 42,573 | 2,429,992 | ||||||
13,766,009 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Teleperformance | 3,873 | 244,055 | ||||||
Consumer Durables & Apparel 0.4% | ||||||||
Christian Dior S.A. | 3,126 | 553,152 | ||||||
Kering | 4,470 | 862,642 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 10,887 | 1,848,002 | ||||||
3,263,796 | ||||||||
Consumer Services 0.1% | ||||||||
Accor S.A. | 14,528 | 610,355 | ||||||
Sodexo | 5,371 | 518,156 | ||||||
1,128,511 | ||||||||
Diversified Financials 0.0% | ||||||||
Wendel S.A. | 1,661 | 183,141 | ||||||
Energy 1.9% | ||||||||
CGG S.A. *(c) | 28,108 | 162,392 | ||||||
Technip S.A. | 6,367 | 460,018 | ||||||
Total S.A. | 278,735 | 16,641,388 | ||||||
17,263,798 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Carrefour S.A. | 90,417 | 2,650,150 | ||||||
Casino Guichard Perrachon S.A. | 6,573 | 673,952 | ||||||
Rallye S.A. | 8,153 | 315,982 | ||||||
3,640,084 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Danone S.A. | 30,726 | 2,099,586 | ||||||
Pernod-Ricard S.A. | 8,088 | 921,319 | ||||||
3,020,905 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Essilor International S.A. | 5,910 | 652,594 | ||||||
Household & Personal Products 0.1% | ||||||||
L’Oreal S.A. | 7,818 | 1,226,927 | ||||||
Insurance 0.4% | ||||||||
AXA S.A. | 141,481 | 3,268,002 | ||||||
CNP Assurances | 12,345 | 230,792 | ||||||
SCOR SE | 11,759 | 360,324 | ||||||
3,859,118 | ||||||||
Materials 0.4% | ||||||||
Air Liquide S.A. | 16,208 | 1,956,562 | ||||||
Arkema S.A. | 5,439 | 335,705 | ||||||
Lafarge S.A. | 18,648 | 1,294,177 | ||||||
3,586,444 | ||||||||
Media 0.1% | ||||||||
Eutelsat Communications S.A. | 8,246 | 267,326 | ||||||
Publicis Groupe S.A. | 5,188 | 359,828 | ||||||
Solocal Group * | 194,620 | 119,580 | ||||||
746,734 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Sanofi | 70,959 | 6,438,822 | ||||||
Real Estate 0.1% | ||||||||
Unibail-Rodamco SE | 1,317 | 337,689 | ||||||
Software & Services 0.1% | ||||||||
AtoS | 3,380 | 233,586 | ||||||
Cap Gemini S.A. | 11,323 | 745,009 | ||||||
978,595 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Alcatel-Lucent * | 130,942 | 400,064 | ||||||
Telecommunication Services 1.4% | ||||||||
Orange S.A. | 542,254 | 8,632,885 | ||||||
Vivendi S.A. * | 168,852 | 4,124,933 | ||||||
12,757,818 | ||||||||
Transportation 0.1% | ||||||||
Air France-KLM *(c) | 74,595 | 630,187 | ||||||
Utilities 0.9% | ||||||||
Electricite de France S.A. | 31,364 | 926,128 | ||||||
GDF Suez | 216,025 | 5,245,070 | ||||||
Suez Environnement Co. | 36,545 | 615,684 | ||||||
Veolia Environnement S.A. | 93,567 | 1,554,036 | ||||||
8,340,918 | ||||||||
93,980,157 | ||||||||
Germany 8.1% | ||||||||
Automobiles & Components 1.1% | ||||||||
Bayerische Motoren Werke AG | 22,951 | 2,461,213 | ||||||
Continental AG | 4,443 | 875,119 | ||||||
Daimler AG - Reg’d | 78,994 | 6,159,081 | ||||||
Volkswagen AG | 1,871 | 399,025 | ||||||
9,894,438 | ||||||||
Banks 0.1% | ||||||||
Commerzbank AG * | 34,613 | 523,365 | ||||||
Capital Goods 0.9% | ||||||||
Brenntag AG | 9,069 | 440,042 | ||||||
GEA Group AG | 8,436 | 389,133 | ||||||
HOCHTIEF AG | 3,214 | 237,832 | ||||||
Kloeckner & Co. SE * | 22,174 | 260,478 | ||||||
MAN SE | 2,574 | 293,338 | ||||||
MTU Aero Engines AG | 2,365 | 207,423 | ||||||
OSRAM Licht AG * | 3,722 | 130,750 | ||||||
Rheinmetall AG | 4,290 | 184,841 | ||||||
Siemens AG - Reg’d | 51,256 | 5,781,340 | ||||||
7,925,177 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Bilfinger SE | 4,585 | 296,511 |
22 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
adidas AG | 11,765 | 857,268 | ||||||
Consumer Services 0.0% | ||||||||
TUI AG | 24,693 | 378,149 | ||||||
Diversified Financials 0.3% | ||||||||
Deutsche Bank AG - Reg’d | 74,650 | 2,334,408 | ||||||
Deutsche Boerse AG | 9,146 | 625,982 | ||||||
2,960,390 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
METRO AG * | 35,736 | 1,139,209 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Suedzucker AG (c) | 11,363 | 158,219 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Fresenius Medical Care AG & Co. KGaA | 10,310 | 756,730 | ||||||
Fresenius SE & Co. KGaA | 18,337 | 943,549 | ||||||
1,700,279 | ||||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 3,320 | 269,182 | ||||||
Henkel AG & Co. KGaA | 4,018 | 365,714 | ||||||
634,896 | ||||||||
Insurance 0.8% | ||||||||
Allianz SE - Reg’d | 29,776 | 4,735,043 | ||||||
Hannover Rueck SE | 3,872 | 323,185 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 11,588 | 2,281,536 | ||||||
7,339,764 | ||||||||
Materials 1.4% | ||||||||
Aurubis AG | 8,873 | 463,192 | ||||||
BASF SE | 74,645 | 6,595,643 | ||||||
HeidelbergCement AG | 12,680 | 865,620 | ||||||
K&S AG - Reg’d | 22,746 | 637,451 | ||||||
LANXESS AG | 8,273 | 430,910 | ||||||
Linde AG | 8,492 | 1,567,243 | ||||||
Salzgitter AG | 11,141 | 336,446 | ||||||
ThyssenKrupp AG * | 60,740 | 1,463,930 | ||||||
12,360,435 | ||||||||
Media 0.0% | ||||||||
ProSiebenSat.1 Media AG - Reg’d | 8,315 | 335,894 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
Bayer AG - Reg’d | 34,877 | 4,988,170 | ||||||
Merck KGaA | 4,190 | 379,297 | ||||||
5,367,467 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Infineon Technologies AG | 42,535 | 414,406 | ||||||
Software & Services 0.2% | ||||||||
SAP SE | 23,858 | 1,625,575 | ||||||
Telecommunication Services 0.7% | ||||||||
Deutsche Telekom AG - Reg’d | 422,902 | 6,374,536 | ||||||
Freenet AG | 9,512 | 249,572 | ||||||
6,624,108 | ||||||||
Transportation 0.3% | ||||||||
Deutsche Lufthansa AG - Reg’d | 37,862 | 560,837 | ||||||
Deutsche Post AG - Reg’d | 74,672 | 2,351,406 | ||||||
2,912,243 | ||||||||
Utilities 1.1% | ||||||||
E.ON SE | 397,063 | 6,845,403 | ||||||
RWE AG | 98,306 | 3,488,071 | ||||||
10,333,474 | ||||||||
73,781,267 | ||||||||
Hong Kong 1.1% | ||||||||
Banks 0.1% | ||||||||
Hang Seng Bank Ltd. | 29,200 | 494,774 | ||||||
Capital Goods 0.3% | ||||||||
Hutchison Whampoa Ltd. | 105,000 | 1,331,458 | ||||||
Jardine Matheson Holdings Ltd. | 12,000 | 719,135 | ||||||
Jardine Strategic Holdings Ltd. | 8,000 | 285,173 | ||||||
Noble Group Ltd. | 827,879 | 770,638 | ||||||
3,106,404 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Li & Fung Ltd. | 426,000 | 519,182 | ||||||
Consumer Services 0.0% | ||||||||
Sands China Ltd. | 30,000 | 187,113 | ||||||
Diversified Financials 0.0% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 14,000 | 310,303 | ||||||
Insurance 0.1% | ||||||||
AIA Group Ltd. | 178,200 | 994,432 | ||||||
Real Estate 0.3% | ||||||||
Cheung Kong (Holdings) Ltd. | 31,000 | 550,321 | ||||||
New World Development Co., Ltd. | 180,000 | 226,261 | ||||||
Sun Hung Kai Properties Ltd. | 27,000 | 402,870 | ||||||
Swire Pacific Ltd., Class A | 40,500 | 531,221 | ||||||
The Link REIT | 46,000 | 270,507 | ||||||
The Wharf Holdings Ltd. | 42,000 | 310,637 | ||||||
2,291,817 | ||||||||
Retailing 0.0% | ||||||||
Esprit Holdings Ltd. | 336,384 | 421,379 | ||||||
Telecommunication Services 0.0% | ||||||||
PCCW Ltd. | 469,000 | 298,151 | ||||||
Utilities 0.2% | ||||||||
CLP Holdings Ltd. | 111,000 | 955,834 | ||||||
Hong Kong & China Gas Co., Ltd. | 130,735 | 305,291 | ||||||
Power Assets Holdings Ltd. | 33,500 | 323,454 | ||||||
1,584,579 | ||||||||
10,208,134 | ||||||||
Ireland 0.6% | ||||||||
Banks 0.1% | ||||||||
Bank of Ireland * | 1,336,235 | 526,015 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Experian plc | 35,869 | 539,331 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Kerry Group plc, Class A | 4,669 | 317,063 |
See financial notes 23
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 0.2% | ||||||||
CRH plc | 77,160 | 1,711,674 | ||||||
Smurfit Kappa Group plc | 19,212 | 396,954 | ||||||
2,108,628 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Shire plc | 7,161 | 480,481 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Seagate Technology plc | 22,497 | 1,413,487 | ||||||
5,385,005 | ||||||||
Israel 0.4% | ||||||||
Banks 0.0% | ||||||||
Bank Leumi Le-Israel B.M. * | 77,244 | 276,039 | ||||||
Materials 0.0% | ||||||||
Israel Chemicals Ltd. | 43,870 | 295,766 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Teva Pharmaceutical Industries Ltd. | 43,138 | 2,435,025 | ||||||
Telecommunication Services 0.1% | ||||||||
Bezeq The Israeli Telecommunication Corp., Ltd. | 278,804 | 476,511 | ||||||
3,483,341 | ||||||||
Italy 3.7% | ||||||||
Automobiles & Components 0.2% | ||||||||
Fiat Chrysler Automobiles N.V. *(c) | 136,763 | 1,530,091 | ||||||
Pirelli & C. S.p.A | 16,232 | 217,667 | ||||||
1,747,758 | ||||||||
Banks 1.0% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. * | 187,651 | 143,574 | ||||||
Banca Popolare dell’Emilia Romagna SC * | 33,250 | 253,720 | ||||||
Banco Popolare SC * | 25,680 | 373,034 | ||||||
Intesa Sanpaolo S.p.A. | 1,225,005 | 3,601,219 | ||||||
UniCredit S.p.A. | 562,489 | 4,073,951 | ||||||
Unione di Banche Italiane S.C.p.A. | 73,121 | 574,255 | ||||||
9,019,753 | ||||||||
Capital Goods 0.1% | ||||||||
Finmeccanica S.p.A. * | 72,871 | 658,492 | ||||||
Prysmian S.p.A. | 13,879 | 240,539 | ||||||
899,031 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Luxottica Group S.p.A. | 3,933 | 200,613 | ||||||
Diversified Financials 0.1% | ||||||||
Exor S.p.A. | 13,690 | 597,382 | ||||||
Mediobanca S.p.A. * | 34,010 | 300,177 | ||||||
897,559 | ||||||||
Energy 1.0% | ||||||||
Eni S.p.A. | 418,168 | 8,909,025 | ||||||
Saipem S.p.A. * | 26,649 | 417,189 | ||||||
9,326,214 | ||||||||
Insurance 0.2% | ||||||||
Assicurazioni Generali S.p.A. | 69,975 | 1,435,917 | ||||||
Materials 0.0% | ||||||||
Italcementi S.p.A. | 22,135 | 126,771 | ||||||
Media 0.0% | ||||||||
Mediaset S.p.A. * | 114,251 | 382,730 | ||||||
Telecommunication Services 0.3% | ||||||||
Telecom Italia S.p.A. * | 2,546,657 | 2,886,079 | ||||||
Transportation 0.1% | ||||||||
Atlantia S.p.A. | 21,457 | 506,754 | ||||||
Utilities 0.7% | ||||||||
A2A S.p.A. | 224,472 | 225,084 | ||||||
Enel S.p.A. | 1,062,660 | 5,430,106 | ||||||
Snam S.p.A. | 100,140 | 541,505 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 71,615 | 361,061 | ||||||
6,557,756 | ||||||||
33,986,935 | ||||||||
Japan 21.4% | ||||||||
Automobiles & Components 2.8% | ||||||||
Aisin Seiki Co., Ltd. | 21,900 | 729,462 | ||||||
Bridgestone Corp. | 51,000 | 1,704,304 | ||||||
Daihatsu Motor Co., Ltd. | 23,400 | 332,115 | ||||||
Denso Corp. | 32,200 | 1,475,842 | ||||||
Fuji Heavy Industries Ltd. | 20,600 | 685,633 | ||||||
Honda Motor Co., Ltd. | 135,400 | 4,328,634 | ||||||
Isuzu Motors Ltd. | 37,000 | 482,753 | ||||||
Mazda Motor Corp. | 26,100 | 616,659 | ||||||
NHK Spring Co., Ltd. | 27,600 | 252,604 | ||||||
Nissan Motor Co., Ltd. | 281,900 | 2,571,407 | ||||||
Stanley Electric Co., Ltd. | 11,200 | 227,703 | ||||||
Sumitomo Electric Industries Ltd. | 86,200 | 1,178,233 | ||||||
Sumitomo Rubber Industries Ltd. | 15,700 | 216,990 | ||||||
Suzuki Motor Corp. | 33,900 | 1,136,277 | ||||||
Toyota Industries Corp. | 11,200 | 533,302 | ||||||
Toyota Motor Corp. | 142,900 | 8,599,319 | ||||||
Yamaha Motor Co., Ltd. | 26,200 | 495,644 | ||||||
25,566,881 | ||||||||
Banks 1.1% | ||||||||
Mitsubishi UFJ Financial Group, Inc. | 649,834 | 3,788,021 | ||||||
Mizuho Financial Group, Inc. | 1,147,216 | 2,090,590 | ||||||
Resona Holdings, Inc. | 125,958 | 720,453 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 71,210 | 2,904,151 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 113,000 | 461,347 | ||||||
The Bank of Yokohama Ltd. | 52,000 | 300,520 | ||||||
10,265,082 | ||||||||
Capital Goods 3.1% | ||||||||
Asahi Glass Co., Ltd. | 194,000 | 1,009,708 | ||||||
Daikin Industries Ltd. | 10,600 | 662,586 | ||||||
FANUC Corp. | 5,200 | 916,426 | ||||||
Furukawa Electric Co., Ltd. | 130,000 | 229,437 | ||||||
Hanwa Co., Ltd. | 71,000 | 256,000 | ||||||
Hino Motors Ltd. | 14,100 | 206,326 | ||||||
IHI Corp. | 85,000 | 409,754 |
24 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
ITOCHU Corp. | 123,000 | 1,486,890 | ||||||
JGC Corp. | 12,000 | 308,397 | ||||||
JTEKT Corp. | 16,600 | 266,981 | ||||||
Kajima Corp. | 82,000 | 364,864 | ||||||
Kawasaki Heavy Industries Ltd. | 109,000 | 428,140 | ||||||
Kinden Corp. | 21,000 | 215,188 | ||||||
Komatsu Ltd. | 68,500 | 1,617,240 | ||||||
Kubota Corp. | 46,000 | 732,228 | ||||||
Kurita Water Industries Ltd. | 9,400 | 202,845 | ||||||
LIXIL Group Corp. | 23,000 | 504,399 | ||||||
Makita Corp. | 6,300 | 352,794 | ||||||
Marubeni Corp. | 168,000 | 1,080,147 | ||||||
Mitsubishi Corp. | 137,200 | 2,690,266 | ||||||
Mitsubishi Electric Corp. | 141,000 | 1,818,024 | ||||||
Mitsubishi Heavy Industries Ltd. | 232,000 | 1,447,224 | ||||||
Mitsui & Co., Ltd. | 166,100 | 2,507,954 | ||||||
Mitsui Engineering & Shipbuilding Co., Ltd. | 109,000 | 236,962 | ||||||
Nagase & Co., Ltd. | 22,100 | 286,256 | ||||||
Nidec Corp. | 6,400 | 422,865 | ||||||
Nippon Sheet Glass Co., Ltd. * | 216,000 | 207,076 | ||||||
NSK Ltd. | 26,000 | 340,550 | ||||||
Obayashi Corp. | 54,000 | 370,583 | ||||||
Shimizu Corp. | 63,000 | 464,922 | ||||||
SMC Corp. | 1,600 | 453,813 | ||||||
Sojitz Corp. | 469,000 | 699,103 | ||||||
Sumitomo Corp. | 122,100 | 1,302,772 | ||||||
Sumitomo Heavy Industries Ltd. | 76,000 | 416,665 | ||||||
Taisei Corp. | 81,000 | 450,437 | ||||||
Toshiba Corp. | 407,000 | 1,797,359 | ||||||
TOTO Ltd. | 15,000 | 169,258 | ||||||
Toyota Tsusho Corp. | 34,800 | 877,485 | ||||||
28,209,924 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
Dai Nippon Printing Co., Ltd. | 101,000 | 995,536 | ||||||
Secom Co., Ltd. | 12,600 | 776,475 | ||||||
Toppan Printing Co., Ltd. | 103,000 | 700,836 | ||||||
2,472,847 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Bandai Namco Holdings, Inc. | 17,200 | 426,865 | ||||||
Nikon Corp. | 32,800 | 449,415 | ||||||
Panasonic Corp. | 252,750 | 3,040,897 | ||||||
Sega Sammy Holdings, Inc. | 14,300 | 227,163 | ||||||
Sekisui Chemical Co., Ltd. | 39,000 | 486,071 | ||||||
Sekisui House Ltd. | 58,200 | 723,710 | ||||||
Sharp Corp. * | 323,000 | 813,463 | ||||||
Shimano, Inc. | 2,700 | 358,035 | ||||||
Sony Corp. | 125,000 | 2,467,914 | ||||||
Sumitomo Forestry Co., Ltd. | 18,100 | 190,195 | ||||||
9,183,728 | ||||||||
Consumer Services 0.1% | ||||||||
Benesse Holdings, Inc. | 6,000 | 189,326 | ||||||
Oriental Land Co., Ltd. | 1,700 | 363,526 | ||||||
552,852 | ||||||||
Diversified Financials 0.1% | ||||||||
Credit Saison Co., Ltd. | 11,000 | 232,214 | ||||||
Nomura Holdings, Inc. | 59,700 | 372,909 | ||||||
ORIX Corp. | 42,400 | 588,522 | ||||||
1,193,645 | ||||||||
Energy 0.7% | ||||||||
Cosmo Oil Co., Ltd. | 236,000 | 367,731 | ||||||
Idemitsu Kosan Co., Ltd. | 38,100 | 736,840 | ||||||
Inpex Corp. | 96,900 | 1,239,394 | ||||||
JX Holdings, Inc. | 675,000 | 2,891,463 | ||||||
Showa Shell Sekiyu K.K. | 31,700 | 271,996 | ||||||
TonenGeneral Sekiyu K.K. | 59,000 | 514,951 | ||||||
6,022,375 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Aeon Co., Ltd. | 128,500 | 1,271,486 | ||||||
Lawson, Inc. | 4,400 | 298,484 | ||||||
Seven & i Holdings Co., Ltd. | 73,600 | 2,874,529 | ||||||
UNY Group Holdings Co., Ltd. | 54,500 | 288,928 | ||||||
4,733,427 | ||||||||
Food, Beverage & Tobacco 0.8% | ||||||||
Ajinomoto Co., Inc. | 49,000 | 925,151 | ||||||
Asahi Group Holdings Ltd. | 26,600 | 825,102 | ||||||
Coca-Cola West Co., Ltd. | 15,700 | 224,123 | ||||||
Japan Tobacco, Inc. | 49,500 | 1,688,892 | ||||||
Kewpie Corp. | 14,100 | 243,715 | ||||||
Kirin Holdings Co., Ltd. | 87,000 | 1,127,938 | ||||||
MEIJI Holdings Co., Ltd. | 7,000 | 587,318 | ||||||
NH Foods Ltd. | 23,000 | 530,373 | ||||||
Nisshin Seifun Group, Inc. | 23,430 | 236,925 | ||||||
Nissin Foods Holdings Co., Ltd. | 4,800 | 252,983 | ||||||
Suntory Beverage & Food Ltd. | 3,600 | 128,428 | ||||||
Toyo Suisan Kaisha Ltd. | 8,000 | 276,290 | ||||||
Yamazaki Baking Co., Ltd. | 22,000 | 271,978 | ||||||
7,319,216 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Alfresa Holdings Corp. | 28,400 | 360,394 | ||||||
Medipal Holdings Corp. | 35,400 | 392,380 | ||||||
Olympus Corp. * | 8,100 | 290,831 | ||||||
Suzuken Co., Ltd. | 13,700 | 367,308 | ||||||
Terumo Corp. | 14,400 | 359,980 | ||||||
1,770,893 | ||||||||
Household & Personal Products 0.2% | ||||||||
Kao Corp. | 32,600 | 1,271,207 | ||||||
Shiseido Co., Ltd. | 26,900 | 446,383 | ||||||
Unicharm Corp. | 10,800 | 251,137 | ||||||
1,968,727 | ||||||||
Insurance 0.3% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 22,390 | 483,999 | ||||||
Sompo Japan Nipponkoa Holdings, Inc. | 21,400 | 538,865 | ||||||
T&D Holdings, Inc. | 21,550 | 277,596 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 38,100 | 576,594 | ||||||
Tokio Marine Holdings, Inc. | 31,300 | 1,003,732 | ||||||
2,880,786 | ||||||||
Materials 1.9% | ||||||||
Air Water, Inc. | 13,000 | 207,224 | ||||||
Asahi Kasei Corp. | 132,000 | 1,083,220 | ||||||
Daicel Corp. | 26,000 | 299,714 | ||||||
Denki Kagaku Kogyo K.K. | 62,000 | 202,523 | ||||||
DIC Corp. | 106,000 | 217,246 | ||||||
Hitachi Chemical Co., Ltd. | 14,000 | 246,757 | ||||||
JFE Holdings, Inc. | 85,000 | 1,686,397 |
See financial notes 25
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
JSR Corp. | 16,500 | 297,136 | ||||||
Kaneka Corp. | 45,000 | 247,245 | ||||||
Kobe Steel Ltd. | 471,000 | 748,347 | ||||||
Kuraray Co., Ltd. | 32,000 | 371,682 | ||||||
Mitsubishi Chemical Holdings Corp. | 220,800 | 1,087,635 | ||||||
Mitsubishi Materials Corp. | 134,000 | 419,408 | ||||||
Mitsui Chemicals, Inc. * | 184,000 | 532,992 | ||||||
Mitsui Mining & Smelting Co., Ltd. | 85,000 | 225,469 | ||||||
Nippon Paper Industries Co., Ltd. | 9,900 | 145,699 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 689,000 | 1,818,163 | ||||||
Nitto Denko Corp. | 12,800 | 692,276 | ||||||
Oji Holdings Corp. | 122,000 | 441,096 | ||||||
Shin-Etsu Chemical Co., Ltd. | 24,500 | 1,572,621 | ||||||
Showa Denko K.K. | 261,000 | 345,390 | ||||||
Sumitomo Chemical Co., Ltd. | 193,000 | 662,074 | ||||||
Sumitomo Metal Mining Co., Ltd. | 46,000 | 638,136 | ||||||
Taiheiyo Cement Corp. | 69,000 | 253,158 | ||||||
Taiyo Nippon Sanso Corp. (c) | 26,000 | 234,080 | ||||||
Teijin Ltd. | 194,000 | 474,291 | ||||||
Toray Industries, Inc. | 125,000 | 839,178 | ||||||
Tosoh Corp. | 62,000 | 269,612 | ||||||
Toyo Seikan Group Holdings Ltd. | 26,100 | 316,506 | ||||||
Ube Industries Ltd. | 173,000 | 267,858 | ||||||
16,843,133 | ||||||||
Media 0.1% | ||||||||
Dentsu, Inc. | 18,301 | 680,422 | ||||||
Hakuhodo DY Holdings, Inc. | 46,700 | 461,840 | ||||||
1,142,262 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
Astellas Pharma, Inc. | 111,600 | 1,732,086 | ||||||
Chugai Pharmaceutical Co., Ltd. | 9,200 | 287,617 | ||||||
Daiichi Sankyo Co., Ltd. | 54,000 | 812,259 | ||||||
Eisai Co., Ltd. | 18,200 | 711,787 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 19,000 | 221,603 | ||||||
Mitsubishi Tanabe Pharma Corp. | 14,900 | 226,587 | ||||||
Ono Pharmaceutical Co., Ltd. | 3,100 | 312,928 | ||||||
Otsuka Holdings Co., Ltd. | 29,300 | 1,027,787 | ||||||
Shionogi & Co., Ltd. | 15,000 | 392,426 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. | 4,000 | 280,754 | ||||||
Takeda Pharmaceutical Co., Ltd. | 52,900 | 2,293,127 | ||||||
8,298,961 | ||||||||
Real Estate 0.4% | ||||||||
Daito Trust Construction Co., Ltd. | 5,500 | 685,304 | ||||||
Daiwa House Industry Co., Ltd. | 40,000 | 756,784 | ||||||
Mitsubishi Estate Co., Ltd. | 28,000 | 713,293 | ||||||
Mitsui Fudosan Co., Ltd. | 24,000 | 771,994 | ||||||
Sumitomo Realty & Development Co., Ltd. | 9,500 | 356,145 | ||||||
3,283,520 | ||||||||
Retailing 0.5% | ||||||||
EDION Corp. | 47,500 | 338,900 | ||||||
Fast Retailing Co., Ltd. | 1,200 | 446,109 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 39,500 | 537,755 | ||||||
J. Front Retailing Co., Ltd. | 28,000 | 372,676 | ||||||
K’s Holdings Corp. | 9,700 | 267,888 | ||||||
Marui Group Co., Ltd. | 23,200 | 196,068 | ||||||
Nitori Holdings Co., Ltd. | 4,800 | 304,203 | ||||||
Shimamura Co., Ltd. | 4,100 | 360,608 | ||||||
Takashimaya Co., Ltd. | 32,000 | 272,594 | ||||||
Yamada Denki Co., Ltd. (c) | 307,900 | 987,011 | ||||||
4,083,812 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Rohm Co., Ltd. | 8,900 | 541,750 | ||||||
Tokyo Electron Ltd. | 10,300 | 660,381 | ||||||
1,202,131 | ||||||||
Software & Services 0.5% | ||||||||
Fujitsu Ltd. | 328,000 | 1,994,064 | ||||||
Konami Corp. | 9,800 | 196,767 | ||||||
Nintendo Co., Ltd. | 14,330 | 1,544,458 | ||||||
NTT Data Corp. | 14,500 | 566,824 | ||||||
4,302,113 | ||||||||
Technology Hardware & Equipment 2.1% | ||||||||
Brother Industries Ltd. | 25,000 | 445,114 | ||||||
Canon, Inc. | 124,900 | 3,831,952 | ||||||
FUJIFILM Holdings Corp. | 60,000 | 2,014,115 | ||||||
Hitachi Ltd. | 503,000 | 3,952,308 | ||||||
Hoya Corp. | 26,500 | 937,751 | ||||||
Ibiden Co., Ltd. | 16,000 | 240,512 | ||||||
Keyence Corp. | 673 | 326,124 | ||||||
Konica Minolta, Inc. | 60,100 | 671,542 | ||||||
Kyocera Corp. | 24,700 | 1,138,458 | ||||||
Murata Manufacturing Co., Ltd. | 7,600 | 853,939 | ||||||
NEC Corp. | 449,000 | 1,587,832 | ||||||
Nippon Electric Glass Co., Ltd. | 80,000 | 372,004 | ||||||
Omron Corp. | 11,100 | 525,415 | ||||||
Ricoh Co., Ltd. | 85,400 | 881,956 | ||||||
Seiko Epson Corp. | 12,800 | 593,980 | ||||||
TDK Corp. | 14,000 | 794,669 | ||||||
19,167,671 | ||||||||
Telecommunication Services 1.3% | ||||||||
KDDI Corp. | 48,700 | 3,198,102 | ||||||
Nippon Telegraph & Telephone Corp. | 73,004 | 4,542,223 | ||||||
NTT DOCOMO, Inc. | 150,300 | 2,534,942 | ||||||
SoftBank Corp. | 26,100 | 1,900,065 | ||||||
12,175,332 | ||||||||
Transportation 1.2% | ||||||||
ANA Holdings, Inc. | 112,000 | 259,690 | ||||||
Central Japan Railway Co. | 10,700 | 1,595,893 | ||||||
East Japan Railway Co. | 27,618 | 2,157,055 | ||||||
Hankyu Hanshin Holdings, Inc. | 77,000 | 452,727 | ||||||
Kamigumi Co., Ltd. | 25,000 | 241,046 | ||||||
Kawasaki Kisen Kaisha Ltd. | 155,000 | 353,150 | ||||||
Kintetsu Corp. | 77,000 | 267,851 | ||||||
Mitsui O.S.K. Lines Ltd. | 217,000 | 685,580 | ||||||
Nagoya Railroad Co., Ltd. | 74,000 | 316,418 | ||||||
Nippon Express Co., Ltd. | 148,000 | 651,046 | ||||||
Nippon Yusen K.K. | 300,000 | 777,768 | ||||||
Odakyu Electric Railway Co., Ltd. | 24,000 | 225,247 | ||||||
Seino Holdings Co., Ltd. | 31,000 | 243,065 | ||||||
Tobu Railway Co., Ltd. | 56,000 | 283,284 | ||||||
Tokyu Corp. | 66,000 | 435,788 | ||||||
West Japan Railway Co. | 19,163 | 913,411 | ||||||
Yamato Holdings Co., Ltd. | 37,900 | 810,385 | ||||||
10,669,404 |
26 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Utilities 1.2% | ||||||||
Chubu Electric Power Co., Inc. * | 126,000 | 1,511,946 | ||||||
Electric Power Development Co., Ltd. | 13,100 | 458,122 | ||||||
Hokkaido Electric Power Co., Inc. * | 33,300 | 279,565 | ||||||
Hokuriku Electric Power Co. | 27,000 | 364,508 | ||||||
Kyushu Electric Power Co., Inc. * | 66,100 | 717,162 | ||||||
Osaka Gas Co., Ltd. | 207,000 | 825,688 | ||||||
Shikoku Electric Power Co., Inc. * | 23,000 | 315,624 | ||||||
The Chugoku Electric Power Co., Inc. | 41,000 | 540,701 | ||||||
The Kansai Electric Power Co., Inc. * | 135,800 | 1,341,094 | ||||||
Toho Gas Co., Ltd. | 45,000 | 243,379 | ||||||
Tohoku Electric Power Co., Inc. | 72,500 | 906,120 | ||||||
Tokyo Electric Power Co., Inc. * | 530,900 | 1,914,274 | ||||||
Tokyo Gas Co., Ltd. | 223,000 | 1,285,442 | ||||||
10,703,625 | ||||||||
194,012,347 | ||||||||
Luxembourg 0.6% | ||||||||
Energy 0.1% | ||||||||
Tenaris S.A. | 24,669 | 487,820 | ||||||
Materials 0.4% | ||||||||
APERAM * | 10,289 | 296,034 | ||||||
ArcelorMittal | 245,005 | 3,218,428 | ||||||
3,514,462 | ||||||||
Media 0.1% | ||||||||
RTL Group S.A. * | 2,185 | 204,095 | ||||||
SES S.A. | 15,302 | 528,291 | ||||||
732,386 | ||||||||
Telecommunication Services 0.0% | ||||||||
Millicom International Cellular S.A. SDR | 4,733 | 386,286 | ||||||
5,120,954 | ||||||||
Netherlands 5.7% | ||||||||
Banks 0.3% | ||||||||
ING Groep N.V. CVA * | 194,689 | 2,788,017 | ||||||
Capital Goods 0.3% | ||||||||
Koninklijke BAM Groep N.V. (c) | 65,617 | 157,354 | ||||||
Koninklijke Boskalis Westminster N.V. | 4,395 | 234,475 | ||||||
Koninklijke Philips N.V. | 72,366 | 2,023,200 | ||||||
2,415,029 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Randstad Holding N.V. | 9,463 | 417,709 | ||||||
Diversified Financials 0.0% | ||||||||
SNS Reaal N.V. *(a)(b)(c) | 124,822 | — | ||||||
Energy 3.4% | ||||||||
Fugro N.V. CVA | 8,038 | 111,003 | ||||||
Royal Dutch Shell plc, A Shares | 521,794 | 18,659,565 | ||||||
Royal Dutch Shell plc, B Shares | 333,480 | 12,320,561 | ||||||
31,091,129 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Koninklijke Ahold N.V. | 135,077 | 2,262,355 | ||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Heineken Holding N.V. | 7,716 | 500,125 | ||||||
Heineken N.V. | 10,879 | 812,706 | ||||||
Nutreco N.V. | 6,582 | 329,675 | ||||||
Unilever N.V. CVA | 72,852 | 2,823,630 | ||||||
4,466,136 | ||||||||
Insurance 0.2% | ||||||||
Aegon N.V. | 128,538 | 1,047,642 | ||||||
Delta Lloyd N.V. | 15,397 | 350,948 | ||||||
1,398,590 | ||||||||
Materials 0.3% | ||||||||
Akzo Nobel N.V. | 24,990 | 1,666,496 | ||||||
Koninklijke DSM N.V. | 14,595 | 914,493 | ||||||
2,580,989 | ||||||||
Media 0.1% | ||||||||
Reed Elsevier N.V. | 15,700 | 361,653 | ||||||
Wolters Kluwer N.V. | 16,061 | 428,808 | ||||||
790,461 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASML Holding N.V. | 4,656 | 464,261 | ||||||
Software & Services 0.0% | ||||||||
Gemalto N.V. | 1,985 | 151,826 | ||||||
Telecommunication Services 0.2% | ||||||||
Koninklijke (Royal) KPN N.V. | 544,812 | 1,793,375 | ||||||
Ziggo N.V. * | 5,100 | 249,228 | ||||||
2,042,603 | ||||||||
Transportation 0.1% | ||||||||
PostNL N.V. * | 123,603 | 525,356 | ||||||
TNT Express N.V. | 54,821 | 318,647 | ||||||
844,003 | ||||||||
51,713,108 | ||||||||
New Zealand 0.1% | ||||||||
Materials 0.0% | ||||||||
Fletcher Building Ltd. | 50,506 | 340,659 | ||||||
Telecommunication Services 0.1% | ||||||||
Spark New Zealand Ltd. | 281,500 | 694,687 | ||||||
Utilities 0.0% | ||||||||
Meridian Energy Ltd. | 119,889 | 154,648 | ||||||
1,189,994 | ||||||||
Norway 0.9% | ||||||||
Banks 0.1% | ||||||||
DNB A.S.A. | 41,537 | 763,128 | ||||||
Energy 0.4% | ||||||||
Akastor A.S.A. | 15,025 | 51,753 | ||||||
Petroleum Geo-Services A.S.A. (c) | 29,008 | 144,077 | ||||||
Statoil A.S.A. | 156,569 | 3,583,149 | ||||||
3,778,979 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Marine Harvest A.S.A. | 21,234 | 300,726 |
See financial notes 27
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Orkla A.S.A. | 79,522 | 608,028 | ||||||
908,754 | ||||||||
Materials 0.2% | ||||||||
Norsk Hydro A.S.A. | 115,673 | 647,644 | ||||||
Yara International A.S.A. | 17,109 | 785,668 | ||||||
1,433,312 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. | 49,115 | 1,104,431 | ||||||
7,988,604 | ||||||||
Portugal 0.2% | ||||||||
Banks 0.0% | ||||||||
Banco Comercial Portugues S.A., Class R * | 1,577,988 | 178,355 | ||||||
Energy 0.0% | ||||||||
Galp Energia, SGPS, S.A. | 22,362 | 324,215 | ||||||
Telecommunication Services 0.1% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d (c) | 268,122 | 439,159 | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 232,183 | 999,159 | ||||||
1,940,888 | ||||||||
Singapore 0.8% | ||||||||
Banks 0.3% | ||||||||
DBS Group Holdings Ltd. | 62,056 | 892,702 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 97,897 | 754,111 | ||||||
United Overseas Bank Ltd. | 47,952 | 859,092 | ||||||
2,505,905 | ||||||||
Capital Goods 0.1% | ||||||||
Keppel Corp., Ltd. | 67,300 | 493,525 | ||||||
Sembcorp Industries Ltd. | 54,000 | 204,287 | ||||||
697,812 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Wilmar International Ltd. | 175,166 | 436,634 | ||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. | 87,000 | 289,983 | ||||||
Retailing 0.0% | ||||||||
Jardine Cycle & Carriage Ltd. | 8,000 | 248,675 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Flextronics International Ltd. * | 82,530 | 884,722 | ||||||
Venture Corp., Ltd. | 43,000 | 259,006 | ||||||
1,143,728 | ||||||||
Telecommunication Services 0.1% | ||||||||
Singapore Telecommunications Ltd. | 418,486 | 1,231,720 | ||||||
Transportation 0.1% | ||||||||
ComfortDelGro Corp., Ltd. | 127,000 | 261,112 | ||||||
Hutchison Port Holdings Trust, Class U | 299,000 | 201,888 | ||||||
Singapore Airlines Ltd. | 67,270 | 518,425 | ||||||
981,425 | ||||||||
7,535,882 | ||||||||
Spain 4.4% | ||||||||
Banks 1.9% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 422,907 | 4,730,166 | ||||||
Banco de Sabadell S.A. | 190,639 | 551,179 | ||||||
Banco Popular Espanol S.A. | 118,029 | 677,983 | ||||||
Banco Santander S.A. | 1,232,639 | 10,891,012 | ||||||
CaixaBank S.A. | 40,399 | 220,789 | ||||||
17,071,129 | ||||||||
Capital Goods 0.2% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 21,323 | 791,464 | ||||||
Ferrovial S.A. | 28,289 | 578,370 | ||||||
Fomento de Construcciones y Contratas S.A. *(c) | 15,214 | 279,889 | ||||||
1,649,723 | ||||||||
Energy 0.4% | ||||||||
Repsol S.A. | 146,299 | 3,269,633 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Distribuidora Internacional de Alimentacion S.A. | 31,925 | 202,844 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 59,857 | 205,253 | ||||||
Retailing 0.1% | ||||||||
Inditex S.A. | 32,652 | 918,602 | ||||||
Software & Services 0.0% | ||||||||
Amadeus IT Holding S.A., A Shares | 10,447 | 384,368 | ||||||
Telecommunication Services 1.1% | ||||||||
Telefonica S.A. | 665,756 | 10,018,082 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 21,512 | 448,575 | ||||||
Utilities 0.6% | ||||||||
Acciona S.A. * | 4,495 | 314,149 | ||||||
Enagas S.A. | 9,693 | 325,295 | ||||||
Endesa S.A. (c) | 11,766 | 229,530 | ||||||
Gas Natural SDG S.A. | 23,914 | 690,558 | ||||||
Iberdrola S.A. | 472,607 | 3,345,545 | ||||||
Red Electrica Corp. S.A. | 4,730 | 413,313 | ||||||
5,318,390 | ||||||||
39,486,599 | ||||||||
Sweden 2.3% | ||||||||
Automobiles & Components 0.1% | ||||||||
Autoliv, Inc. | 5,440 | 499,065 | ||||||
Banks 0.5% | ||||||||
Nordea Bank AB | 117,942 | 1,516,941 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 63,184 | 811,552 | ||||||
Svenska Handelsbanken AB, A Shares | 21,178 | 1,012,418 | ||||||
Swedbank AB, A Shares | 30,266 | 802,069 | ||||||
4,142,980 | ||||||||
Capital Goods 0.7% | ||||||||
Alfa Laval AB | 13,048 | 268,970 |
28 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Assa Abloy AB, B Shares | 9,376 | 497,721 | ||||||
Atlas Copco AB, A Shares | 30,823 | 892,812 | ||||||
Atlas Copco AB, B Shares | 15,522 | 411,144 | ||||||
NCC AB, B Shares | 6,700 | 197,081 | ||||||
Sandvik AB | 84,390 | 927,033 | ||||||
Skanska AB, B Shares | 35,035 | 714,169 | ||||||
SKF AB, B Shares | 29,828 | 598,273 | ||||||
Trelleborg AB, B Shares | 13,252 | 226,879 | ||||||
Volvo AB, A Shares | 19,593 | 228,375 | ||||||
Volvo AB, B Shares | 113,738 | 1,312,586 | ||||||
6,275,043 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Securitas AB, B Shares | 32,271 | 357,098 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, B Shares | 25,757 | 729,819 | ||||||
Husqvarna AB, B Shares | 41,470 | 309,621 | ||||||
1,039,440 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Swedish Match AB | 12,171 | 395,765 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Getinge AB, B Shares | 8,883 | 203,804 | ||||||
Household & Personal Products 0.1% | ||||||||
Svenska Cellulosa AB, S.C.A., A Shares | 261 | 5,857 | ||||||
Svenska Cellulosa AB, S.C.A., B Shares | 39,665 | 888,753 | ||||||
894,610 | ||||||||
Materials 0.1% | ||||||||
Boliden AB | 32,802 | 542,130 | ||||||
SSAB AB, A Shares *(c) | 56,216 | 407,929 | ||||||
SSAB AB, B Shares * | 26,715 | 171,096 | ||||||
1,121,155 | ||||||||
Retailing 0.2% | ||||||||
Hennes & Mauritz AB, B Shares | 37,555 | 1,498,425 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 201,751 | 2,383,970 | ||||||
Telecommunication Services 0.2% | ||||||||
Tele2 AB, B Shares | 64,188 | 815,547 | ||||||
TeliaSonera AB | 194,039 | 1,343,675 | ||||||
2,159,222 | ||||||||
20,970,577 | ||||||||
Switzerland 5.6% | ||||||||
Capital Goods 0.5% | ||||||||
Wolseley plc | 22,951 | 1,220,533 | ||||||
ABB Ltd. - Reg’d * | 123,888 | 2,717,938 | ||||||
Geberit AG - Reg’d | 1,073 | 366,253 | ||||||
Schindler Holding AG | 1,703 | 238,228 | ||||||
Schindler Holding AG - Reg’d | 125 | 16,915 | ||||||
4,559,867 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Adecco S.A. - Reg’d * | 12,289 | 832,968 | ||||||
SGS S.A. - Reg’d | 196 | 430,910 | ||||||
1,263,878 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Cie Financiere Richemont S.A. - Reg’d | 11,761 | 991,614 | ||||||
The Swatch Group AG - Bearer Shares | 861 | 408,426 | ||||||
The Swatch Group AG - Reg’d | 1,605 | 135,787 | ||||||
1,535,827 | ||||||||
Diversified Financials 0.2% | ||||||||
Credit Suisse Group AG - Reg’d * | 57,027 | 1,519,416 | ||||||
UBS AG - Reg’d * | 13,022 | 226,428 | ||||||
1,745,844 | ||||||||
Energy 0.2% | ||||||||
Transocean Ltd. (c) | 32,917 | 980,389 | ||||||
Weatherford International plc * | 41,406 | 679,887 | ||||||
1,660,276 | ||||||||
Food, Beverage & Tobacco 1.2% | ||||||||
Aryzta AG * | 3,165 | 269,979 | ||||||
Chocoladefabriken Lindt & Sprungli AG | 18 | 90,342 | ||||||
Chocoladefabriken Lindt & Sprungli AG - Reg’d | 3 | 179,695 | ||||||
Coca-Cola HBC AG CDI * | 6,656 | 145,197 | ||||||
Nestle S.A. - Reg’d | 138,024 | 10,121,865 | ||||||
10,807,078 | ||||||||
Insurance 0.6% | ||||||||
Baloise Holding AG - Reg’d | 1,989 | 250,385 | ||||||
Swiss Life Holding AG - Reg’d * | 1,416 | 324,888 | ||||||
Swiss Re AG * | 17,023 | 1,376,494 | ||||||
Zurich Insurance Group AG * | 10,900 | 3,298,650 | ||||||
5,250,417 | ||||||||
Materials 0.7% | ||||||||
Clariant AG - Reg’d * | 16,655 | 290,514 | ||||||
Givaudan S.A. - Reg’d * | 264 | 440,873 | ||||||
Glencore plc * | 550,724 | 2,825,564 | ||||||
Holcim Ltd. - Reg’d * | 17,252 | 1,224,452 | ||||||
Sika AG | 84 | 300,268 | ||||||
Syngenta AG - Reg’d | 3,662 | 1,132,500 | ||||||
6,214,171 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.6% | ||||||||
Lonza Group AG - Reg’d * | 2,440 | 268,855 | ||||||
Novartis AG - Reg’d | 91,109 | 8,455,175 | ||||||
Roche Holding AG | 20,671 | 6,100,040 | ||||||
Roche Holding AG - Bearer Shares | 747 | 212,773 | ||||||
15,036,843 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
STMicroelectronics N.V. | 70,751 | 473,974 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
TE Connectivity Ltd. | 18,939 | 1,157,741 | ||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 1,366 | 805,286 | ||||||
Transportation 0.0% | ||||||||
Kuehne & Nagel International AG - Reg’d | 2,965 | 386,429 | ||||||
50,897,631 |
See financial notes 29
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
United Kingdom 16.9% | ||||||||
Automobiles & Components 0.1% | ||||||||
Delphi Automotive plc | 9,183 | 633,444 | ||||||
GKN plc | 68,338 | 349,202 | ||||||
982,646 | ||||||||
Banks 2.4% | ||||||||
Barclays plc | 1,241,295 | 4,773,919 | ||||||
HSBC Holdings plc | 1,229,358 | 12,533,752 | ||||||
Lloyds Banking Group plc * | 1,896,594 | 2,342,083 | ||||||
Royal Bank of Scotland Group plc * | 158,024 | 982,522 | ||||||
Standard Chartered plc | 104,419 | 1,571,783 | ||||||
22,204,059 | ||||||||
Capital Goods 0.7% | ||||||||
BAE Systems plc | 274,830 | 2,023,919 | ||||||
Balfour Beatty plc | 108,327 | 267,628 | ||||||
Bunzl plc | 15,505 | 421,045 | ||||||
Carillion plc | 50,319 | 268,081 | ||||||
Cobham plc | 68,636 | 320,165 | ||||||
IMI plc | 13,312 | 260,685 | ||||||
Meggitt plc | 33,662 | 243,154 | ||||||
Rolls-Royce Holdings plc * | 81,604 | 1,105,283 | ||||||
SIG plc | 77,950 | 182,759 | ||||||
Smiths Group plc | 21,002 | 392,248 | ||||||
The Weir Group plc | 5,876 | 214,761 | ||||||
Travis Perkins plc | 14,232 | 377,095 | ||||||
6,076,823 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Aggreko plc | 9,427 | 229,999 | ||||||
Babcock International Group plc | 10,675 | 187,357 | ||||||
Capita plc | 19,061 | 335,129 | ||||||
G4S plc | 133,125 | 544,914 | ||||||
Hays plc | 120,952 | 238,881 | ||||||
Serco Group plc | 51,322 | 244,411 | ||||||
1,780,691 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Barratt Developments plc | 52,368 | 352,037 | ||||||
Burberry Group plc | 13,351 | 328,082 | ||||||
Taylor Wimpey plc | 148,379 | 281,855 | ||||||
961,974 | ||||||||
Consumer Services 0.4% | ||||||||
Carnival plc | 14,048 | 560,177 | ||||||
Compass Group plc | 88,592 | 1,429,956 | ||||||
InterContinental Hotels Group plc | 8,037 | 305,286 | ||||||
Thomas Cook Group plc * | 157,581 | 313,959 | ||||||
TUI Travel plc | 63,769 | 407,492 | ||||||
Whitbread plc | 5,466 | 382,079 | ||||||
William Hill plc | 36,990 | 213,615 | ||||||
3,612,564 | ||||||||
Diversified Financials 0.1% | ||||||||
ICAP plc | 36,600 | 245,722 | ||||||
Man Group plc | 435,453 | 863,404 | ||||||
1,109,126 | ||||||||
Energy 2.8% | ||||||||
AMEC plc | 21,094 | 351,724 | ||||||
BG Group plc | 165,631 | 2,760,412 | ||||||
BP plc | 2,811,246 | 20,226,637 | ||||||
Ensco plc, Class A | 9,002 | 365,391 | ||||||
John Wood Group plc | 27,331 | 289,985 | ||||||
Noble Corp., plc | 19,992 | 418,233 | ||||||
Petrofac Ltd. | 12,164 | 206,099 | ||||||
Subsea 7 S.A. | 15,050 | 161,959 | ||||||
Tullow Oil plc | 21,955 | 171,336 | ||||||
24,951,776 | ||||||||
Food & Staples Retailing 0.6% | ||||||||
Booker Group plc | 85,653 | 192,491 | ||||||
J. Sainsbury plc (c) | 270,828 | 1,066,943 | ||||||
Tesco plc | 1,148,880 | 3,189,277 | ||||||
WM Morrison Supermarkets plc | 576,447 | 1,431,255 | ||||||
5,879,966 | ||||||||
Food, Beverage & Tobacco 1.6% | ||||||||
Associated British Foods plc | 13,856 | 611,490 | ||||||
British American Tobacco plc | 88,516 | 5,016,874 | ||||||
Diageo plc | 77,950 | 2,298,931 | ||||||
Imperial Tobacco Group plc | 51,839 | 2,251,981 | ||||||
SABMiller plc | 26,329 | 1,489,246 | ||||||
Tate & Lyle plc | 35,725 | 345,750 | ||||||
Unilever plc | 57,378 | 2,308,057 | ||||||
14,322,329 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Smith & Nephew plc | 37,152 | 630,667 | ||||||
Household & Personal Products 0.2% | ||||||||
Reckitt Benckiser Group plc | 21,849 | 1,840,198 | ||||||
Insurance 0.8% | ||||||||
Amlin plc | 34,183 | 249,486 | ||||||
Aviva plc | 218,106 | 1,824,294 | ||||||
Direct Line Insurance Group plc | 71,448 | 316,062 | ||||||
Friends Life Group Ltd. | 118,332 | 613,672 | ||||||
Legal & General Group plc | 151,657 | 562,084 | ||||||
Old Mutual plc | 273,702 | 850,002 | ||||||
Prudential plc | 55,720 | 1,290,254 | ||||||
RSA Insurance Group plc * | 86,254 | 666,860 | ||||||
Standard Life plc | 86,816 | 548,206 | ||||||
Willis Group Holdings plc | 7,230 | 293,032 | ||||||
7,213,952 | ||||||||
Materials 1.5% | ||||||||
Anglo American plc | 176,933 | 3,735,684 | ||||||
Antofagasta plc | 26,155 | 294,552 | ||||||
BHP Billiton plc | 131,292 | 3,392,139 | ||||||
Johnson Matthey plc | 15,053 | 718,654 | ||||||
KAZ Minerals plc * | 69,980 | 258,178 | ||||||
Mondi plc | 27,505 | 464,847 | ||||||
Rexam plc | 67,336 | 513,226 | ||||||
Rio Tinto plc | 84,733 | 4,031,719 | ||||||
Vedanta Resources plc | 17,403 | 229,653 | ||||||
13,638,652 | ||||||||
Media 0.6% | ||||||||
British Sky Broadcasting Group plc | 43,416 | 615,303 | ||||||
Informa plc | 28,060 | 216,324 | ||||||
ITV plc | 73,591 | 239,074 | ||||||
Liberty Global plc, Class A * | 14,172 | 644,401 | ||||||
Liberty Global plc, Series C * | 21,516 | 956,817 | ||||||
Pearson plc | 51,352 | 961,129 | ||||||
Reed Elsevier plc | 25,872 | 425,782 |
30 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
WPP plc | 47,671 | 931,141 | ||||||
4,989,971 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||
AstraZeneca plc | 107,613 | 7,860,952 | ||||||
GlaxoSmithKline plc | 332,763 | 7,525,090 | ||||||
15,386,042 | ||||||||
Real Estate 0.0% | ||||||||
Land Securities Group plc | 24,448 | 433,806 | ||||||
Retailing 0.5% | ||||||||
Home Retail Group plc | 260,747 | 765,173 | ||||||
Inchcape plc | 46,186 | 514,526 | ||||||
Kingfisher plc | 217,744 | 1,054,853 | ||||||
Marks & Spencer Group plc | 169,623 | 1,104,554 | ||||||
Next plc | 6,561 | 677,336 | ||||||
4,116,442 | ||||||||
Software & Services 0.0% | ||||||||
The Sage Group plc | 53,285 | 322,665 | ||||||
Telecommunication Services 1.3% | ||||||||
BT Group plc | 462,473 | 2,726,431 | ||||||
Cable & Wireless Communications plc | 389,557 | 301,038 | ||||||
Inmarsat plc | 18,948 | 208,047 | ||||||
Vodafone Group plc | 2,701,957 | 8,985,234 | ||||||
12,220,750 | ||||||||
Transportation 0.1% | ||||||||
FirstGroup plc * | 241,400 | 435,031 | ||||||
International Consolidated Airlines Group S.A. * | 41,070 | 269,419 | ||||||
704,450 | ||||||||
Utilities 1.1% | ||||||||
Centrica plc | 468,504 | 2,272,231 | ||||||
Drax Group plc | 33,001 | 314,004 | ||||||
National Grid plc | 222,266 | 3,298,420 | ||||||
Pennon Group plc | 22,068 | 294,483 | ||||||
Severn Trent plc | 15,260 | 487,763 | ||||||
SSE plc | 91,492 | 2,345,030 | ||||||
United Utilities Group plc | 48,372 | 663,096 | ||||||
9,675,027 | ||||||||
153,054,576 | ||||||||
Total Common Stock | ||||||||
(Cost $809,911,937) | 896,853,900 | |||||||
Preferred Stock 0.6% of net assets | ||||||||
Germany 0.4% | ||||||||
Automobiles & Components 0.3% | ||||||||
Bayerische Motoren Werke AG | 3,979 | 319,052 | ||||||
Volkswagen AG | 11,412 | 2,440,478 | ||||||
2,759,530 | ||||||||
Household & Personal Products 0.1% | ||||||||
Henkel AG & Co. KGaA | 6,414 | 634,781 | ||||||
Utilities 0.0% | ||||||||
RWE AG, Non Voting Shares | 8,802 | 236,345 | ||||||
3,630,656 | ||||||||
Italy 0.2% | ||||||||
Banks 0.0% | ||||||||
Intesa Sanpaolo S.p.A. - RSP | 87,221 | 223,005 | ||||||
Telecommunication Services 0.2% | ||||||||
Telecom Italia S.p.A. - RSP | 1,479,862 | 1,324,094 | ||||||
1,547,099 | ||||||||
United Kingdom 0.0% | ||||||||
Capital Goods 0.0% | ||||||||
Rolls-Royce Holdings plc, C Shares *(a)(b) | 7,344,360 | 11,749 | ||||||
Total Preferred Stock | ||||||||
(Cost $4,534,745) | 5,189,504 | |||||||
Rights 0.0% of net assets | ||||||||
Spain 0.0% | ||||||||
Banks 0.0% | ||||||||
Banco Santander S.A. * | 1,248,473 | 237,808 | ||||||
Total Rights | ||||||||
(Cost $240,551) | 237,808 | |||||||
Other Investment Companies 1.0% of net assets | ||||||||
United States 1.0% | ||||||||
Equity Fund 0.0% | ||||||||
iShares MSCI EAFE ETF | 100 | 6,395 | ||||||
Securities Lending Collateral 1.0% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 9,106,227 | 9,106,227 | ||||||
Total Other Investment Companies | ||||||||
(Cost $9,110,883) | 9,112,622 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
Time Deposits 0.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | ||||||||
Australian Dollar | ||||||||
1.55%, 11/03/14 | 25,104 | 22,091 | ||||||
Brown Brothers Harriman | ||||||||
Euro | ||||||||
(0.11)%, 11/03/14 | 11,302 | 14,163 | ||||||
Hong Kong Dollar | ||||||||
0.01%, 11/03/14 | 13,785 | 1,778 |
See financial notes 31
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Japanese Yen | ||||||||
0.01%, 11/03/14 | 397,162 | 3,536 | ||||||
Swedish Krona | ||||||||
0.01%, 11/03/14 | 45,793 | 6,201 | ||||||
Wells Fargo | ||||||||
Canadian Dollar | ||||||||
0.34%, 11/03/14 | 129,583 | 114,975 | ||||||
Pound Sterling | ||||||||
0.09%, 11/03/14 | 23,977 | 38,357 | ||||||
201,101 | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (d)(e) | 50,000 | 50,000 | ||||||
0.01%, 12/18/14 (d)(e) | 621,000 | 620,991 | ||||||
670,991 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $872,092) | 872,092 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $842,623,307 unrealized appreciation and depreciation were $107,992,010 and ($38,349,391), respectively, with a net unrealized appreciation of $69,642,619.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $828,027,743 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(a) for additional information)
* | 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 $11,749 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $8,622,312. | |
(d) | The rate shown is the purchase yield. | |
(e) | All or a portion of this security is held as collateral for open futures contracts. | |
(f) | The rate shown is the 7-day yield. |
CVA — | Dutch Certificate | |
ETF — | Exchange Traded Fund | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) | |
SDR — | Swedish Depositary Receipt |
In addition to the above the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/19/14 | 30 | 2,754,000 | 91,820 |
32 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .1% | Common Stock | 254,199,293 | 270,207,475 | ||||||||
0 | .5% | Preferred Stock | 1,230,970 | 1,295,299 | ||||||||
3 | .0% | Other Investment Companies | 8,233,674 | 8,313,893 | ||||||||
0 | .2% | Short-Term Investments | 520,504 | 520,504 | ||||||||
101 | .8% | Total Investments | 264,184,441 | 280,337,171 | ||||||||
(1 | .8)% | Other Assets and Liabilities, Net | (4,939,486 | ) | ||||||||
100 | .0% | Net Assets | 275,397,685 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.1% of net assets | ||||||||
Australia 5.9% | ||||||||
Banks 0.3% | ||||||||
Bank of Queensland Ltd. | 25,706 | 285,768 | ||||||
Bendigo & Adelaide Bank Ltd. | 39,774 | 436,795 | ||||||
722,563 | ||||||||
Capital Goods 0.2% | ||||||||
Bradken Ltd. | 53,317 | 181,875 | ||||||
Cardno Ltd. | 19,434 | 95,436 | ||||||
GWA Group Ltd. | 65,113 | 156,722 | ||||||
Monadelphous Group Ltd. | 15,328 | 170,012 | ||||||
Seven Group Holdings Ltd. | 8,444 | 50,939 | ||||||
654,984 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
ALS Ltd. | 47,322 | 234,356 | ||||||
Cabcharge Australia Ltd. | 10,358 | 45,171 | ||||||
Mineral Resources Ltd. | 7,367 | 55,223 | ||||||
SAI Global Ltd. | 10,398 | 37,638 | ||||||
Seek Ltd. | 8,085 | 118,646 | ||||||
SKILLED Group Ltd. | 73,160 | 149,397 | ||||||
Transfield Services Ltd. * | 320,558 | 541,186 | ||||||
Transpacific Industries Group Ltd. | 236,814 | 187,557 | ||||||
1,369,174 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Billabong International Ltd. * | 165,348 | 96,761 | ||||||
G.U.D. Holdings Ltd. | 25,822 | 163,447 | ||||||
260,208 | ||||||||
Consumer Services 0.3% | ||||||||
Ardent Leisure Group | 27,310 | 74,806 | ||||||
Aristocrat Leisure Ltd. | 31,286 | 177,867 | ||||||
Echo Entertainment Group Ltd. | 110,543 | 371,170 | ||||||
Flight Centre Travel Group Ltd. | 3,551 | 131,759 | ||||||
Navitas Ltd. | 9,535 | 44,559 | ||||||
800,161 | ||||||||
Diversified Financials 0.3% | ||||||||
ASX Ltd. | 11,367 | 360,644 | ||||||
Challenger Ltd. | 33,336 | 205,038 | ||||||
IOOF Holdings Ltd. | 14,722 | 117,428 | ||||||
Perpetual Ltd. | 4,447 | 181,827 | ||||||
864,937 | ||||||||
Energy 0.2% | ||||||||
AWE Ltd. * | 120,468 | 186,746 | ||||||
Beach Energy Ltd. | 128,230 | 132,641 | ||||||
Whitehaven Coal Ltd. * | 49,690 | 66,640 | ||||||
386,027 | ||||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Bega Cheese Ltd. | 10,711 | 48,782 | ||||||
Goodman Fielder Ltd. | 739,553 | 416,516 | ||||||
GrainCorp Ltd., Class A | 31,680 | 245,029 | ||||||
Treasury Wine Estates Ltd. | 101,294 | 413,580 | ||||||
1,123,907 | ||||||||
Health Care Equipment & Services 0.6% | ||||||||
Ansell Ltd. | 15,238 | 267,284 | ||||||
Cochlear Ltd. | 4,760 | 308,505 | ||||||
Primary Health Care Ltd. | 73,566 | 301,476 | ||||||
Ramsay Health Care Ltd. | 6,487 | 299,883 | ||||||
Sigma Pharmaceuticals Ltd. | 702,797 | 478,828 | ||||||
1,655,976 | ||||||||
Insurance 0.1% | ||||||||
nib Holdings Ltd. | 66,587 | 191,897 | ||||||
Materials 0.8% | ||||||||
Adelaide Brighton Ltd. | 70,918 | 211,480 | ||||||
Atlas Iron Ltd. | 75,477 | 22,593 | ||||||
CSR Ltd. | 163,269 | 499,706 | ||||||
DuluxGroup Ltd. | 22,872 | 108,090 | ||||||
Fortescue Metals Group Ltd. | 91,174 | 281,394 | ||||||
Gunns Ltd. *(b)(c) | 124,356 | — | ||||||
Iluka Resources Ltd. | 52,115 | 334,563 | ||||||
Mount Gibson Iron Ltd. | 150,856 | 59,943 | ||||||
Nufarm Ltd. | 60,749 | 265,037 | ||||||
OceanaGold Corp. * | 17,664 | 28,838 | ||||||
OZ Minerals Ltd. | 127,555 | 438,320 | ||||||
PanAust Ltd. | 29,468 | 44,685 | ||||||
2,294,649 | ||||||||
Media 0.2% | ||||||||
APN News & Media Ltd. * | 89,219 | 57,908 | ||||||
Seven West Media Ltd. | 123,552 | 186,813 | ||||||
Southern Cross Media Group Ltd. | 104,397 | 90,029 | ||||||
Ten Network Holdings Ltd. * | 584,661 | 114,293 | ||||||
Village Roadshow Ltd. | 8,144 | 50,447 | ||||||
499,490 | ||||||||
Real Estate 0.7% | ||||||||
CFS Retail Property Trust Group | 173,677 | 323,038 | ||||||
Charter Hall Retail REIT | 29,474 | 105,691 | ||||||
Cromwell Property Group | 51,538 | 44,812 |
See financial notes 33
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Dexus Property Group | 494,864 | 528,914 | ||||||
Goodman Group | 90,009 | 439,441 | ||||||
Investa Office Fund | 47,811 | 150,849 | ||||||
The GPT Group | 122,395 | 444,890 | ||||||
2,037,635 | ||||||||
Retailing 0.6% | ||||||||
Automotive Holdings Group Ltd. | 58,109 | 195,911 | ||||||
Harvey Norman Holdings Ltd. | 86,299 | 290,204 | ||||||
JB Hi-Fi Ltd. (a) | 16,685 | 229,759 | ||||||
Myer Holdings Ltd. (a) | 205,426 | 348,861 | ||||||
Pacific Brands Ltd. | 668,163 | 277,652 | ||||||
Premier Investments Ltd. | 19,654 | 186,480 | ||||||
Super Retail Group Ltd. | 7,255 | 47,076 | ||||||
1,575,943 | ||||||||
Software & Services 0.0% | ||||||||
Iress Ltd. | 5,223 | 45,446 | ||||||
Telecommunication Services 0.0% | ||||||||
iiNET Ltd. | 6,079 | 42,898 | ||||||
Transportation 0.2% | ||||||||
Sydney Airport | 130,196 | 506,167 | ||||||
Virgin Australia International Holdings (b)(c) | 176,214 | — | ||||||
506,167 | ||||||||
Utilities 0.4% | ||||||||
APA Group | 67,760 | 471,090 | ||||||
AusNet Services | 211,435 | 255,604 | ||||||
DUET Group | 212,149 | 459,207 | ||||||
1,185,901 | ||||||||
16,217,963 | ||||||||
Austria 0.7% | ||||||||
Capital Goods 0.2% | ||||||||
Wienerberger AG | 28,794 | 348,197 | ||||||
Zumtobel Group AG | 6,932 | 122,181 | ||||||
470,378 | ||||||||
Energy 0.0% | ||||||||
Schoeller-Bleckmann Oilfield Equipment AG | 917 | 79,028 | ||||||
Insurance 0.1% | ||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 5,775 | 278,013 | ||||||
Materials 0.1% | ||||||||
Lenzing AG | 2,076 | 119,697 | ||||||
RHI AG | 4,203 | 107,684 | ||||||
227,381 | ||||||||
Real Estate 0.1% | ||||||||
IMMOFINANZ AG * | 81,125 | 245,599 | ||||||
Transportation 0.1% | ||||||||
Flughafen Wien AG | 691 | 63,420 | ||||||
Oesterreichische Post AG | 6,676 | 325,648 | ||||||
389,068 | ||||||||
Utilities 0.1% | ||||||||
Verbund AG (a) | 6,556 | 132,668 | ||||||
1,822,135 | ||||||||
Belgium 1.4% | ||||||||
Diversified Financials 0.3% | ||||||||
Ackermans & van Haaren N.V. | 1,124 | 140,171 | ||||||
Gimv N.V. | 3,725 | 169,214 | ||||||
Groupe Bruxelles Lambert S.A. | 3,997 | 357,202 | ||||||
666,587 | ||||||||
Energy 0.0% | ||||||||
Euronav N.V. * | 4,414 | 46,846 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Agfa-Gevaert N.V. * | 62,230 | 156,903 | ||||||
Arseus N.V. | 735 | 29,321 | ||||||
186,224 | ||||||||
Materials 0.2% | ||||||||
Nyrstar N.V. * | 103,843 | 350,052 | ||||||
Tessenderlo Chemie N.V. * | 11,585 | 300,557 | ||||||
650,609 | ||||||||
Media 0.1% | ||||||||
Telenet Group Holding N.V. * | 6,830 | 386,225 | ||||||
Real Estate 0.1% | ||||||||
Befimmo S.A. | 1,255 | 96,721 | ||||||
Cofinimmo S.A. | 1,614 | 187,467 | ||||||
284,188 | ||||||||
Retailing 0.1% | ||||||||
S.A. D’Ieteren N.V. | 9,634 | 348,724 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Barco N.V. | 2,547 | 187,797 | ||||||
EVS Broadcast Equipment S.A. | 1,949 | 63,168 | ||||||
250,965 | ||||||||
Telecommunication Services 0.2% | ||||||||
Mobistar S.A. * | 24,830 | 532,079 | ||||||
Transportation 0.1% | ||||||||
bpost S.A. | 4,564 | 112,986 | ||||||
Utilities 0.1% | ||||||||
Elia System Operator S.A./N.V. | 5,579 | 276,748 | ||||||
3,742,181 | ||||||||
Canada 8.1% | ||||||||
Automobiles & Components 0.2% | ||||||||
Linamar Corp. | 5,149 | 263,012 | ||||||
Martinrea International, Inc. | 17,041 | 180,684 | ||||||
443,696 | ||||||||
Banks 0.2% | ||||||||
Canadian Western Bank | 4,178 | 139,940 | ||||||
Genworth MI Canada, Inc. | 6,359 | 222,301 | ||||||
Home Capital Group, Inc. | 3,261 | 156,301 | ||||||
Laurentian Bank of Canada | 3,550 | 156,168 | ||||||
674,710 | ||||||||
Capital Goods 0.7% | ||||||||
Aecon Group, Inc. | 11,372 | 147,819 | ||||||
ATS Automation Tooling Systems, Inc. * | 3,659 | 45,776 | ||||||
Bird Construction, Inc. | 8,949 | 106,955 | ||||||
CAE, Inc. | 25,184 | 322,663 |
34 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
MacDonald, Dettwiler & Associates Ltd. | 3,733 | 284,649 | ||||||
New Flyer Industries, Inc. | 3,722 | 42,932 | ||||||
Richelieu Hardware Ltd. | 1,255 | 59,540 | ||||||
Russel Metals, Inc. | 14,523 | 423,300 | ||||||
Toromont Industries Ltd. | 10,964 | 261,782 | ||||||
Wajax Corp. | 5,219 | 167,028 | ||||||
WSP Global, Inc. | 4,211 | 128,193 | ||||||
1,990,637 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Morneau Shepell, Inc. | 4,603 | 67,960 | ||||||
Newalta Corp. | 7,555 | 136,413 | ||||||
Progressive Waste Solutions Ltd. | 15,191 | 443,714 | ||||||
Ritchie Bros. Auctioneers, Inc. | 7,322 | 178,981 | ||||||
Stantec, Inc. | 2,905 | 184,061 | ||||||
Transcontinental, Inc., Class A | 23,625 | 322,602 | ||||||
1,333,731 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Dorel Industries, Inc., Class B | 9,342 | 290,277 | ||||||
Gildan Activewear, Inc. | 6,036 | 359,573 | ||||||
lululemon athletica, Inc. * | 3,130 | 130,365 | ||||||
780,215 | ||||||||
Consumer Services 0.0% | ||||||||
Great Canadian Gaming Corp. * | 3,008 | 54,553 | ||||||
Diversified Financials 0.3% | ||||||||
AGF Management Ltd., Class B | 25,456 | 231,285 | ||||||
CI Financial Corp. | 14,420 | 419,275 | ||||||
Dundee Corp., Class A * | 10,197 | 144,579 | ||||||
795,139 | ||||||||
Energy 1.8% | ||||||||
Advantage Oil & Gas Ltd. * | 42,632 | 182,700 | ||||||
AltaGas Ltd. | 8,523 | 351,643 | ||||||
Calfrac Well Services Ltd. | 8,416 | 100,808 | ||||||
Enbridge Income Fund Holdings, Inc. | 1,743 | 45,931 | ||||||
Enerflex Ltd. | 14,620 | 208,848 | ||||||
Ensign Energy Services, Inc. | 24,530 | 276,848 | ||||||
Freehold Royalties Ltd. | 5,351 | 99,704 | ||||||
Gibson Energy, Inc. | 14,596 | 424,521 | ||||||
Gran Tierra Energy, Inc. * | 16,709 | 76,203 | ||||||
Keyera Corp. | 5,709 | 454,167 | ||||||
Lightstream Resources Ltd. | 82,696 | 218,654 | ||||||
MEG Energy Corp. * | 1,433 | 34,584 | ||||||
Mullen Group Ltd. | 12,532 | 243,513 | ||||||
NuVista Energy Ltd. * | 11,612 | 106,842 | ||||||
Parkland Fuel Corp. (a) | 15,972 | 312,482 | ||||||
Pason Systems, Inc. | 3,942 | 94,331 | ||||||
Peyto Exploration & Development Corp. | 6,990 | 197,287 | ||||||
Precision Drilling Corp. | 41,568 | 346,323 | ||||||
Savanna Energy Services Corp. (a) | 15,596 | 84,134 | ||||||
ShawCor Ltd. | 6,519 | 287,182 | ||||||
Trican Well Service Ltd. | 23,742 | 212,763 | ||||||
Trilogy Energy Corp. | 1,732 | 26,985 | ||||||
Trinidad Drilling Ltd. | 23,786 | 154,908 | ||||||
Veresen, Inc. (a) | 23,897 | 375,084 | ||||||
4,916,445 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
The Jean Coutu Group (PJC), Inc., Class A | 11,194 | 256,646 | ||||||
The North West Co., Inc. | 10,690 | 220,999 | ||||||
477,645 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Cott Corp. | 26,419 | 160,101 | ||||||
Maple Leaf Foods, Inc. | 18,687 | 323,319 | ||||||
Rogers Sugar, Inc. (a) | 14,547 | 57,308 | ||||||
540,728 | ||||||||
Insurance 0.1% | ||||||||
Industrial Alliance Insurance & Financial Services, Inc. | 7,981 | 321,633 | ||||||
Materials 1.6% | ||||||||
Agnico-Eagle Mines Ltd. | 13,646 | 321,581 | ||||||
Alamos Gold, Inc. | 5,567 | 41,541 | ||||||
Canexus Corp. | 10,068 | 34,571 | ||||||
Canfor Corp. * | 7,083 | 164,907 | ||||||
Cascades, Inc. | 22,103 | 122,963 | ||||||
CCL Industries, Inc., Class B | 1,960 | 198,148 | ||||||
Centerra Gold, Inc. | 45,663 | 178,268 | ||||||
Chemtrade Logistics Income Fund | 7,975 | 147,110 | ||||||
Dominion Diamond Corp. * | 9,488 | 132,759 | ||||||
Eldorado Gold Corp. | 44,020 | 240,596 | ||||||
Franco-Nevada Corp. | 3,091 | 144,697 | ||||||
HudBay Minerals, Inc. | 31,201 | 238,911 | ||||||
IAMGOLD Corp. * | 125,890 | 239,035 | ||||||
Labrador Iron Ore Royalty Corp. | 1,995 | 34,694 | ||||||
Lundin Mining Corp. * | 65,738 | 293,387 | ||||||
Major Drilling Group International, Inc. | 17,673 | 103,179 | ||||||
Methanex Corp. | 7,501 | 445,781 | ||||||
Nevsun Resources Ltd. | 11,538 | 39,004 | ||||||
New Gold, Inc. * | 25,922 | 94,070 | ||||||
Pan American Silver Corp. | 16,776 | 155,100 | ||||||
SEMAFO, Inc. * | 14,817 | 36,153 | ||||||
Sherritt International Corp. | 138,922 | 345,133 | ||||||
Silver Wheaton Corp. | 9,304 | 161,719 | ||||||
Thompson Creek Metals Co., Inc. * | 63,540 | 120,084 | ||||||
West Fraser Timber Co., Ltd. | 8,599 | 451,141 | ||||||
4,484,532 | ||||||||
Media 0.4% | ||||||||
Aimia, Inc. | 22,898 | 330,147 | ||||||
Cineplex, Inc. | 7,427 | 279,801 | ||||||
Cogeco Cable, Inc. | 3,161 | 172,375 | ||||||
Corus Entertainment, Inc., Class B | 11,897 | 218,929 | ||||||
Entertainment One Ltd. | 9,062 | 45,480 | ||||||
1,046,732 | ||||||||
Real Estate 0.4% | ||||||||
Boardwalk REIT | 1,984 | 125,689 | ||||||
Calloway REIT | 5,552 | 135,863 | ||||||
Canadian REIT | 2,731 | 119,921 | ||||||
Cominar REIT | 2,940 | 49,772 | ||||||
Dream Office REIT | 1,843 | 46,653 | ||||||
First Capital Realty, Inc. | 7,355 | 120,142 | ||||||
FirstService Corp. | 826 | 43,651 |
See financial notes 35
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Granite REIT | 4,563 | 168,220 | ||||||
H&R REIT | 8,451 | 168,188 | ||||||
RioCan REIT (a) | 11,529 | 271,589 | ||||||
1,249,688 | ||||||||
Retailing 0.3% | ||||||||
Dollarama, Inc. | 3,294 | 289,403 | ||||||
Hudson’s Bay Co. | 5,233 | 90,819 | ||||||
Reitmans (Canada) Ltd., Class A | 44,519 | 242,928 | ||||||
Sears Canada, Inc. (a) | 22,273 | 214,420 | ||||||
837,570 | ||||||||
Software & Services 0.2% | ||||||||
Constellation Software, Inc. | 252 | 70,991 | ||||||
DH Corp. | 8,317 | 265,660 | ||||||
Open Text Corp. | 4,061 | 224,300 | ||||||
560,951 | ||||||||
Telecommunication Services 0.1% | ||||||||
Manitoba Telecom Services, Inc. | 7,273 | 191,722 | ||||||
Transportation 0.2% | ||||||||
TransForce, Inc. | 14,990 | 366,554 | ||||||
Westshore Terminals Investment Corp. | 3,808 | 116,059 | ||||||
482,613 | ||||||||
Utilities 0.4% | ||||||||
Capital Power Corp. | 16,800 | 381,300 | ||||||
Just Energy Group, Inc. (a) | 37,408 | 182,219 | ||||||
Northland Power, Inc. | 6,988 | 103,978 | ||||||
Superior Plus Corp. (a) | 33,973 | 368,050 | ||||||
1,035,547 | ||||||||
22,218,487 | ||||||||
Denmark 1.4% | ||||||||
Banks 0.2% | ||||||||
Jyske Bank A/S - Reg’d * | 5,184 | 279,515 | ||||||
Sydbank A/S * | 9,639 | 305,999 | ||||||
585,514 | ||||||||
Capital Goods 0.2% | ||||||||
NKT Holding A/S | 4,643 | 240,840 | ||||||
Rockwool International A/S, B Shares | 1,095 | 159,410 | ||||||
400,250 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Pandora A/S | 3,303 | 278,481 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Royal UNIBREW * | 705 | 115,241 | ||||||
Schouw & Co. | 2,787 | 123,480 | ||||||
238,721 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Coloplast A/S, Class B | 3,557 | 310,032 | ||||||
GN Store Nord A/S | 9,224 | 214,619 | ||||||
William Demant Holding A/S * | 1,439 | 109,064 | ||||||
633,715 | ||||||||
Insurance 0.1% | ||||||||
Topdanmark A/S * | 5,015 | 159,627 | ||||||
Tryg A/S | 2,101 | 227,360 | ||||||
386,987 | ||||||||
Materials 0.2% | ||||||||
Chr. Hansen Holding A/S | 3,628 | 146,150 | ||||||
Novozymes A/S, B Shares | 9,315 | 431,347 | ||||||
577,497 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
H. Lundbeck A/S | 10,127 | 214,747 | ||||||
Software & Services 0.1% | ||||||||
SimCorp A/S | 4,834 | 145,882 | ||||||
Transportation 0.1% | ||||||||
D/S Norden A/S (a) | 9,140 | 240,353 | ||||||
DFDS A/S | 770 | 65,259 | ||||||
305,612 | ||||||||
3,767,406 | ||||||||
Finland 1.3% | ||||||||
Capital Goods 0.3% | ||||||||
Cargotec Oyj, B Shares (a) | 6,463 | 195,105 | ||||||
Cramo Oyj | 6,618 | 96,518 | ||||||
Konecranes Oyj | 8,772 | 245,815 | ||||||
Outotec Oyj (a) | 25,176 | 166,615 | ||||||
Ramirent Oyj | 12,186 | 97,258 | ||||||
Uponor Oyj | 9,333 | 124,057 | ||||||
925,368 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Caverion Corp. | 11,322 | 90,946 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Amer Sports Oyj | 16,240 | 311,266 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Raisio Oyj, V Shares | 9,480 | 47,282 | ||||||
Materials 0.5% | ||||||||
Huhtamaki Oyj | 16,206 | 411,230 | ||||||
Kemira Oyj | 20,391 | 263,320 | ||||||
Metsa Board Oyj | 41,680 | 186,178 | ||||||
Outokumpu Oyj * | 45,497 | 258,292 | ||||||
Tikkurila Oyj | 5,026 | 103,793 | ||||||
1,222,813 | ||||||||
Media 0.1% | ||||||||
Sanoma Oyj | 53,068 | 305,112 | ||||||
Real Estate 0.0% | ||||||||
Sponda Oyj | 19,699 | 90,193 | ||||||
Retailing 0.1% | ||||||||
Stockmann Oyj Abp, B Shares | 13,343 | 147,644 | ||||||
Software & Services 0.2% | ||||||||
Tieto Oyj | 16,365 | 414,919 | ||||||
3,555,543 | ||||||||
France 4.3% | ||||||||
Automobiles & Components 0.0% | ||||||||
Plastic Omnium S.A. | 5,405 | 123,099 | ||||||
Banks 0.1% | ||||||||
Natixis S.A. | 58,918 | 405,561 | ||||||
Capital Goods 0.3% | ||||||||
Areva S.A. *(a) | 7,697 | 103,634 | ||||||
Mersen | 5,927 | 142,602 | ||||||
Saft Groupe S.A. | 4,420 | 131,476 |
36 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Zodiac Aerospace | 13,124 | 400,449 | ||||||
778,161 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Bureau Veritas S.A. | 13,791 | 341,106 | ||||||
Derichebourg S.A. | 49,756 | 124,891 | ||||||
Edenred | 14,996 | 415,723 | ||||||
Societe BIC S.A. | 3,142 | 391,950 | ||||||
1,273,670 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Beneteau S.A. * | 2,938 | 43,445 | ||||||
SEB S.A. | 4,368 | 357,431 | ||||||
400,876 | ||||||||
Consumer Services 0.1% | ||||||||
Club Mediterranee S.A. * | 7,134 | 201,060 | ||||||
Diversified Financials 0.1% | ||||||||
Eurazeo S.A. | 4,674 | 312,840 | ||||||
Energy 0.1% | ||||||||
Bourbon S.A. | 7,562 | 196,160 | ||||||
Etablissements Maurel et Prom * | 9,861 | 117,860 | ||||||
314,020 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Remy Cointreau S.A. | 2,167 | 154,219 | ||||||
Vilmorin & Cie S.A. | 913 | 91,653 | ||||||
245,872 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
BioMerieux | 1,711 | 180,494 | ||||||
Orpea | 2,598 | 158,510 | ||||||
339,004 | ||||||||
Insurance 0.1% | ||||||||
Euler Hermes Group | 1,841 | 180,343 | ||||||
Materials 0.3% | ||||||||
Eramet * | 2,999 | 278,643 | ||||||
Imerys S.A. | 5,036 | 361,372 | ||||||
Vicat S.A. | 1,938 | 132,538 | ||||||
772,553 | ||||||||
Media 0.5% | ||||||||
Havas S.A. | 27,660 | 223,571 | ||||||
IPSOS | 4,529 | 117,455 | ||||||
JC Decaux S.A. | 6,077 | 201,701 | ||||||
Metropole Television S.A. | 16,921 | 292,829 | ||||||
Societe Television Francaise 1 | 24,069 | 358,833 | ||||||
Technicolor S.A. - Reg’d * | 50,978 | 300,975 | ||||||
1,495,364 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Ipsen S.A. | 3,339 | 164,127 | ||||||
Real Estate 0.7% | ||||||||
Fonciere Des Regions | 4,394 | 403,965 | ||||||
Gecina S.A. | 2,190 | 296,393 | ||||||
ICADE | 4,525 | 360,020 | ||||||
Klepierre | 8,747 | 378,587 | ||||||
Mercialys S.A. | 6,307 | 139,301 | ||||||
Nexity S.A. | 9,068 | 325,560 | ||||||
1,903,826 | ||||||||
Retailing 0.0% | ||||||||
Groupe Fnac * | 1,534 | 64,594 | ||||||
Software & Services 0.4% | ||||||||
Alten S.A. | 3,504 | 149,877 | ||||||
Altran Technologies S.A. | 15,678 | 154,027 | ||||||
Dassault Systemes S.A. | 5,047 | 320,035 | ||||||
Sopra Group S.A. | 500 | 37,479 | ||||||
UBISOFT Entertainment * | 22,399 | 405,542 | ||||||
1,066,960 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Ingenico | 2,055 | 204,726 | ||||||
Neopost S.A. | 6,385 | 443,118 | ||||||
647,844 | ||||||||
Telecommunication Services 0.1% | ||||||||
Iliad S.A. | 1,021 | 223,267 | ||||||
Transportation 0.4% | ||||||||
Aeroports de Paris | 3,266 | 386,577 | ||||||
Bollore S.A. | 452 | 214,294 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 27,070 | 342,144 | ||||||
Norbert Dentressangle S.A. | 332 | 48,527 | ||||||
991,542 | ||||||||
11,904,583 | ||||||||
Germany 3.3% | ||||||||
Automobiles & Components 0.2% | ||||||||
ElringKlinger AG | 3,342 | 102,225 | ||||||
Grammer AG | 2,139 | 78,378 | ||||||
Leoni AG | 5,793 | 332,770 | ||||||
SAF-Holland S.A. | 3,128 | 39,195 | ||||||
552,568 | ||||||||
Banks 0.1% | ||||||||
Aareal Bank AG | 3,404 | 146,254 | ||||||
Capital Goods 0.6% | ||||||||
Bauer AG * | 5,064 | 78,497 | ||||||
BayWa AG | 4,694 | 185,937 | ||||||
Deutz AG | 20,224 | 91,106 | ||||||
DMG MORI SEIKI AG | 6,943 | 177,773 | ||||||
Duerr AG | 1,692 | 118,853 | ||||||
Heidelberger Druckmaschinen AG * | 70,319 | 179,602 | ||||||
Indus Holding AG | 4,682 | 215,223 | ||||||
KION Group AG | 1,216 | 44,297 | ||||||
Krones AG | 1,840 | 176,530 | ||||||
Norma Group SE | 1,306 | 61,218 | ||||||
Pfeiffer Vacuum Technology AG | 1,290 | 100,458 | ||||||
SGL Carbon SE * | 4,536 | 70,309 | ||||||
Vossloh AG | 1,837 | 105,814 | ||||||
1,605,617 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Gerry Weber International AG | 2,651 | 106,629 | ||||||
Hugo Boss AG | 1,725 | 229,181 | ||||||
Puma SE | 522 | 109,680 | ||||||
445,490 | ||||||||
Diversified Financials 0.0% | ||||||||
Aurelius AG | 1,359 | 47,364 | ||||||
Health Care Equipment & Services 0.4% | ||||||||
Celesio AG | 24,277 | 800,942 |
See financial notes 37
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Rhoen-Klinikum AG | 13,402 | 399,044 | ||||||
1,199,986 | ||||||||
Insurance 0.0% | ||||||||
Talanx AG | 4,038 | 130,306 | ||||||
Materials 0.4% | ||||||||
Evonik Industries AG | 5,163 | 172,880 | ||||||
Fuchs Petrolub SE | 2,794 | 102,824 | ||||||
Symrise AG | 9,220 | 519,817 | ||||||
Wacker Chemie AG | 3,351 | 406,071 | ||||||
1,201,592 | ||||||||
Media 0.2% | ||||||||
Axel Springer SE | 5,479 | 301,403 | ||||||
Kabel Deutschland Holding AG * | 2,624 | 355,718 | ||||||
657,121 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Gerresheimer AG | 3,745 | 208,379 | ||||||
Stada Arzneimittel AG | 7,617 | 293,490 | ||||||
501,869 | ||||||||
Real Estate 0.1% | ||||||||
Deutsche Euroshop AG | 2,751 | 123,081 | ||||||
GAGFAH S.A. * | 9,697 | 181,344 | ||||||
304,425 | ||||||||
Retailing 0.1% | ||||||||
Fielmann AG | 2,040 | 133,121 | ||||||
Takkt AG | 3,109 | 48,489 | ||||||
181,610 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Aixtron SE * | 13,058 | 159,326 | ||||||
Kontron AG * | 17,059 | 98,785 | ||||||
SMA Solar Technology AG *(a) | 3,014 | 75,052 | ||||||
333,163 | ||||||||
Software & Services 0.3% | ||||||||
Bechtle AG | 2,546 | 198,353 | ||||||
Software AG | 10,319 | 259,880 | ||||||
United Internet AG - Reg’d | 5,119 | 200,759 | ||||||
Wirecard AG | 1,163 | 41,727 | ||||||
700,719 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Jenoptik AG | 7,149 | 81,903 | ||||||
Wincor Nixdorf AG | 6,268 | 288,267 | ||||||
370,170 | ||||||||
Telecommunication Services 0.1% | ||||||||
Drillisch AG | 1,257 | 43,780 | ||||||
Telefonica Deutschland Holding AG * | 63,029 | 310,158 | ||||||
353,938 | ||||||||
Transportation 0.2% | ||||||||
Fraport AG Frankfurt Airport Services Worldwide | 4,355 | 269,839 | ||||||
Hamburger Hafen und Logistik AG | 4,873 | 106,804 | ||||||
Sixt SE | 3,560 | 115,167 | ||||||
491,810 | ||||||||
9,224,002 | ||||||||
Greece 0.0% | ||||||||
Banks 0.0% | ||||||||
TT Hellenic Postbank S.A. *(b)(c) | 24,275 | — | ||||||
Hong Kong 2.8% | ||||||||
Automobiles & Components 0.0% | ||||||||
Xinyi Glass Holdings Ltd. | 170,000 | 100,444 | ||||||
Banks 0.1% | ||||||||
Bank of East Asia Ltd. | 86,400 | 360,813 | ||||||
Capital Goods 0.1% | ||||||||
Johnson Electric Holdings Ltd. | 42,500 | 143,602 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Techtronic Industries Co., Ltd. | 112,000 | 350,627 | ||||||
Consumer Services 0.3% | ||||||||
Cafe De Coral Holdings Ltd. | 36,000 | 129,079 | ||||||
Galaxy Entertainment Group Ltd. | 25,000 | 170,947 | ||||||
MGM China Holdings Ltd. | 16,800 | 54,009 | ||||||
SJM Holdings Ltd. | 144,000 | 304,357 | ||||||
Wynn Macau Ltd. | 62,400 | 225,583 | ||||||
883,975 | ||||||||
Diversified Financials 0.1% | ||||||||
First Pacific Co., Ltd. | 352,000 | 379,881 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Dairy Farm International Holdings Ltd. | 18,000 | 172,800 | ||||||
Media 0.1% | ||||||||
Television Broadcasts Ltd. | 29,600 | 162,024 | ||||||
Real Estate 1.0% | ||||||||
Great Eagle Holdings Ltd. | 33,000 | 111,081 | ||||||
Hang Lung Group Ltd. | 57,000 | 286,770 | ||||||
Hang Lung Properties Ltd. | 122,000 | 380,973 | ||||||
Henderson Land Development Co., Ltd. | 45,040 | 304,280 | ||||||
Hongkong Land Holdings Ltd. | 72,000 | 502,122 | ||||||
Hysan Development Co., Ltd. | 22,000 | 100,383 | ||||||
Sino Land Co., Ltd. | 236,000 | 390,079 | ||||||
Swire Properties Ltd. | 56,000 | 179,441 | ||||||
Wheelock & Co., Ltd. | 91,000 | 438,631 | ||||||
2,693,760 | ||||||||
Retailing 0.2% | ||||||||
Chow Sang Sang Holdings International Ltd. | 73,000 | 180,472 | ||||||
Giordano International Ltd. | 222,000 | 113,096 | ||||||
Luk Fook Holdings International Ltd. | 55,000 | 163,993 | ||||||
457,561 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
VTech Holdings Ltd. | 27,200 | 340,563 | ||||||
Telecommunication Services 0.0% | ||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | 312,000 | 124,356 | ||||||
Transportation 0.6% | ||||||||
Cathay Pacific Airways Ltd. | 223,000 | 418,270 | ||||||
MTR Corp., Ltd. | 107,500 | 438,329 | ||||||
Orient Overseas International Ltd. | 88,500 | 504,208 |
38 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Pacific Basin Shipping Ltd. | 513,000 | 246,870 | ||||||
1,607,677 | ||||||||
7,778,083 | ||||||||
Ireland 0.9% | ||||||||
Capital Goods 0.5% | ||||||||
DCC plc | 11,747 | 658,311 | ||||||
Fly Leasing Ltd. ADR | 4,008 | 49,619 | ||||||
Grafton Group plc | 37,939 | 385,132 | ||||||
Kingspan Group plc | 15,941 | 249,306 | ||||||
1,342,368 | ||||||||
Consumer Services 0.1% | ||||||||
Paddy Power plc | 2,537 | 185,167 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Fyffes plc | 33,201 | 38,693 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
C&C Group plc | 40,868 | 182,013 | ||||||
Glanbia plc | 11,425 | 161,393 | ||||||
343,406 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
UDG Healthcare plc | 47,190 | 248,513 | ||||||
Materials 0.1% | ||||||||
James Hardie Industries plc CDI | 17,661 | 188,384 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
ICON plc * | 1,824 | 95,961 | ||||||
Transportation 0.0% | ||||||||
Aer Lingus Group plc | 49,941 | 89,808 | ||||||
Irish Continental Group plc | 13,128 | 45,899 | ||||||
135,707 | ||||||||
2,578,199 | ||||||||
Israel 1.2% | ||||||||
Banks 0.2% | ||||||||
Bank Hapoalim B.M. | 67,132 | 345,586 | ||||||
Israel Discount Bank Ltd., Class A * | 105,180 | 169,636 | ||||||
Mizrahi Tefahot Bank Ltd. * | 11,889 | 131,612 | ||||||
646,834 | ||||||||
Capital Goods 0.2% | ||||||||
Discount Investment Corp., Ltd. - Reg’d * | 28,763 | 200,260 | ||||||
Elbit Systems Ltd. | 3,201 | 194,701 | ||||||
394,961 | ||||||||
Energy 0.2% | ||||||||
Delek Group Ltd. | 564 | 194,946 | ||||||
Oil Refineries Ltd. * | 550,911 | 179,824 | ||||||
Paz Oil Co., Ltd. | 1,431 | 202,248 | ||||||
577,018 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Shufersal Ltd. | 30,635 | 75,645 | ||||||
Materials 0.1% | ||||||||
The Israel Corp., Ltd. * | 774 | 377,611 | ||||||
Software & Services 0.3% | ||||||||
Check Point Software Technologies Ltd. * | 7,043 | 522,943 | ||||||
NICE-Systems Ltd. | 3,800 | 154,061 | ||||||
677,004 | ||||||||
Telecommunication Services 0.2% | ||||||||
B Communications Ltd. | 2,350 | 45,912 | ||||||
Cellcom Israel Ltd. | 27,339 | 280,977 | ||||||
Partner Communications Co., Ltd. * | 33,546 | 224,434 | ||||||
551,323 | ||||||||
3,300,396 | ||||||||
Italy 2.1% | ||||||||
Automobiles & Components 0.0% | ||||||||
Piaggio & C. S.p.A. * | 42,064 | 117,624 | ||||||
Banks 0.4% | ||||||||
Banca Carige S.p.A. * | 860,183 | 72,006 | ||||||
Banca Popolare Di Milano Scarl * | 635,469 | 478,968 | ||||||
Banca Popolare Di Sondrio Scarl | 64,815 | 260,132 | ||||||
Credito Valtellinese Scarl * | 166,438 | 172,342 | ||||||
983,448 | ||||||||
Capital Goods 0.1% | ||||||||
Astaldi S.p.A. | 10,209 | 71,418 | ||||||
C.I.R. S.p.A. - Compagnie Industriali Riunite * | 153,162 | 153,613 | ||||||
Danieli & Co., Officine Meccaniche S.p.A. | 1,353 | 31,568 | ||||||
256,599 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
De’Longhi S.p.A. | 5,739 | 112,317 | ||||||
Geox S.p.A. *(a) | 25,394 | 77,721 | ||||||
Indesit Co., S.p.A. * | 8,758 | 120,397 | ||||||
Prada S.p.A. (a) | 22,200 | 136,953 | ||||||
Safilo Group S.p.A. * | 6,615 | 89,690 | ||||||
Tod’s S.p.A. | 966 | 89,124 | ||||||
626,202 | ||||||||
Consumer Services 0.2% | ||||||||
Autogrill S.p.A. * | 25,734 | 174,411 | ||||||
GTECH S.p.A. | 11,065 | 257,891 | ||||||
432,302 | ||||||||
Energy 0.2% | ||||||||
ERG S.p.A. | 21,737 | 249,107 | ||||||
Saras S.p.A. * | 217,266 | 221,754 | ||||||
470,861 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
MARR S.p.A. | 2,813 | 44,858 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Davide Campari-Milano S.p.A. | 22,013 | 158,308 | ||||||
Parmalat S.p.A. | 72,053 | 216,523 | ||||||
374,831 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Sorin S.p.A. * | 43,416 | 97,144 | ||||||
Insurance 0.1% | ||||||||
Mediolanum S.p.A. | 14,275 | 96,243 |
See financial notes 39
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Societa Cattolica di Assicurazioni S.c.r.l. | 6,123 | 94,833 | ||||||
Unipol Gruppo Finanziario S.p.A. | 26,392 | 127,672 | ||||||
318,748 | ||||||||
Materials 0.1% | ||||||||
Buzzi Unicem S.p.A. | 22,739 | 307,680 | ||||||
Media 0.0% | ||||||||
RCS MediaGroup S.p.A. *(a) | 76,748 | 80,963 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Recordati S.p.A. | 9,395 | 162,559 | ||||||
Real Estate 0.0% | ||||||||
Beni Stabili S.p.A | 143,990 | 99,284 | ||||||
Retailing 0.0% | ||||||||
World Duty Free S.p.A. * | 6,557 | 55,674 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Esprinet S.p.A. | 5,092 | 42,080 | ||||||
Transportation 0.2% | ||||||||
Alitalia S.p.A. *(b)(c) | 14,782 | — | ||||||
Ansaldo STS S.p.A. | 12,208 | 140,241 | ||||||
ASTM S.p.A. | 11,802 | 141,964 | ||||||
Societa Iniziative Autostradali e Servizi S.p.A. | 15,824 | 158,552 | ||||||
440,757 | ||||||||
Utilities 0.4% | ||||||||
ACEA S.p.A. | 12,263 | 149,986 | ||||||
Enel Green Power S.p.A. | 121,030 | 297,525 | ||||||
Hera S.p.A. | 128,882 | 339,409 | ||||||
Iren S.p.A. | 150,545 | 182,044 | ||||||
968,964 | ||||||||
5,880,578 | ||||||||
Japan 38.5% | ||||||||
Automobiles & Components 3.3% | ||||||||
Aisan Industry Co., Ltd. | 11,300 | 90,611 | ||||||
Akebono Brake Industry Co., Ltd. | 24,600 | 95,888 | ||||||
Calsonic Kansei Corp. | 73,000 | 404,161 | ||||||
Exedy Corp. | 9,100 | 230,023 | ||||||
F.C.C. Co., Ltd. | 12,100 | 205,928 | ||||||
Futaba Industrial Co., Ltd. | 47,500 | 264,837 | ||||||
G-Tekt Corp. | 4,400 | 43,887 | ||||||
Keihin Corp. | 19,300 | 243,837 | ||||||
Koito Manufacturing Co., Ltd. | 20,400 | 614,698 | ||||||
KYB Co., Ltd. | 55,000 | 236,830 | ||||||
Mitsuba Corp. | 7,000 | 111,415 | ||||||
Mitsubishi Motors Corp. | 36,900 | 379,671 | ||||||
Musashi Seimitsu Industry Co., Ltd. | 8,400 | 164,907 | ||||||
NGK Spark Plug Co., Ltd. | 18,600 | 485,097 | ||||||
Nifco, Inc. | 8,500 | 269,336 | ||||||
Nippon Seiki Co., Ltd. | 12,000 | 255,637 | ||||||
Nissan Shatai Co., Ltd. | 26,500 | 364,657 | ||||||
Nissin Kogyo Co., Ltd. | 11,500 | 177,737 | ||||||
NOK Corp. | 23,500 | 595,360 | ||||||
Pacific Industrial Co., Ltd. | 6,500 | 49,254 | ||||||
Press Kogyo Co., Ltd. | 40,000 | 159,789 | ||||||
Riken Corp. | 27,000 | 105,877 | ||||||
Sanden Corp. | 29,000 | 167,250 | ||||||
Showa Corp. | 16,600 | 179,570 | ||||||
Sumitomo Riko Co., Ltd. | 18,400 | 158,138 | ||||||
Tachi-S Co., Ltd. | 14,700 | 186,393 | ||||||
Takata Corp. | 10,100 | 131,986 | ||||||
The Yokohama Rubber Co., Ltd. | 43,000 | 390,334 | ||||||
Tokai Rika Co., Ltd. | 16,800 | 319,978 | ||||||
Topre Corp. | 3,500 | 49,561 | ||||||
Toyo Tire & Rubber Co., Ltd. | 14,700 | 242,494 | ||||||
Toyoda Gosei Co., Ltd. | 23,400 | 449,556 | ||||||
Toyota Boshoku Corp. (a) | 38,100 | 432,687 | ||||||
TS Tech Co., Ltd. | 10,400 | 255,618 | ||||||
Unipres Corp. | 17,100 | 340,287 | ||||||
Yorozu Corp. | 6,800 | 117,011 | ||||||
8,970,300 | ||||||||
Banks 2.3% | ||||||||
Aozora Bank Ltd. | 79,000 | 277,678 | ||||||
Fukuoka Financial Group, Inc. | 101,000 | 516,822 | ||||||
Hokuhoku Financial Group, Inc. | 178,000 | 357,581 | ||||||
North Pacific Bank Ltd. | 19,800 | 81,625 | ||||||
Senshu Ikeda Holdings, Inc. | 9,400 | 48,630 | ||||||
Seven Bank Ltd. | 46,100 | 192,532 | ||||||
Shinsei Bank Ltd. | 147,000 | 330,364 | ||||||
Suruga Bank Ltd. | 11,100 | 232,061 | ||||||
The 77 Bank Ltd. | 28,000 | 156,319 | ||||||
The Awa Bank Ltd. | 20,000 | 119,932 | ||||||
The Bank of Kyoto Ltd. | 21,000 | 181,976 | ||||||
The Chiba Bank Ltd. | 28,000 | 198,884 | ||||||
The Chugoku Bank Ltd. | 16,900 | 249,791 | ||||||
The Daishi Bank Ltd. | 31,000 | 109,698 | ||||||
The Gunma Bank Ltd. | 41,000 | 255,859 | ||||||
The Hachijuni Bank Ltd. | 42,000 | 257,158 | ||||||
The Higo Bank Ltd. | 9,000 | 51,229 | ||||||
The Hiroshima Bank Ltd. | 40,000 | 199,975 | ||||||
The Hyakugo Bank Ltd. | 27,000 | 113,865 | ||||||
The Iyo Bank Ltd. | 21,500 | 229,586 | ||||||
The Joyo Bank Ltd. | 44,000 | 235,605 | ||||||
The Juroku Bank Ltd. | 33,000 | 130,152 | ||||||
The Kagoshima Bank Ltd. | 16,000 | 103,762 | ||||||
The Keiyo Bank Ltd. | 30,000 | 156,846 | ||||||
The Musashino Bank Ltd. | 3,800 | 128,756 | ||||||
The Nishi-Nippon City Bank Ltd. | 76,000 | 208,333 | ||||||
The Ogaki Kyoritsu Bank Ltd. | 51,000 | 141,890 | ||||||
The San-in Godo Bank Ltd. | 20,000 | 154,095 | ||||||
The Shiga Bank Ltd. | 17,000 | 95,213 | ||||||
The Shizuoka Bank Ltd. | 39,000 | 402,978 | ||||||
TOMONY Holdings, Inc. | 10,700 | 47,735 | ||||||
Yamaguchi Financial Group, Inc. | 27,000 | 257,874 | ||||||
6,224,804 | ||||||||
Capital Goods 7.0% | ||||||||
Aica Kogyo Co., Ltd. | 7,800 | 161,453 | ||||||
Amada Co., Ltd. | 48,500 | 423,576 | ||||||
Asahi Diamond Industrial Co., Ltd. | 8,600 | 104,357 | ||||||
Central Glass Co., Ltd. | 77,000 | 251,724 | ||||||
Chiyoda Corp. | 20,000 | 206,037 | ||||||
Chudenko Corp. | 2,900 | 46,320 | ||||||
CKD Corp. | 10,900 | 95,624 | ||||||
COMSYS Holdings Corp. | 28,100 | 501,658 | ||||||
Daifuku Co., Ltd. | 14,800 | 171,414 | ||||||
Daihen Corp. | 24,000 | 84,973 | ||||||
DMG Mori Seiki Co., Ltd. | 13,500 | 158,997 | ||||||
Ebara Corp. | 75,000 | 412,084 |
40 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Fuji Electric Co., Ltd. | 85,000 | 373,445 | ||||||
Fuji Machine Manufacturing Co., Ltd. | 18,038 | 173,633 | ||||||
Fujikura Ltd. | 111,000 | 466,267 | ||||||
Fujitec Co., Ltd. | 9,100 | 90,853 | ||||||
Furukawa Co., Ltd. | 49,000 | 96,305 | ||||||
Futaba Corp. | 8,300 | 117,591 | ||||||
Glory Ltd. | 10,600 | 273,156 | ||||||
GS Yuasa Corp. | 54,000 | 269,603 | ||||||
Hazama Ando Corp. | 7,200 | 48,405 | ||||||
Hitachi Construction Machinery Co., Ltd. | 25,300 | 517,496 | ||||||
Hitachi Koki Co., Ltd. | 13,400 | 115,216 | ||||||
Hitachi Zosen Corp. | 45,300 | 240,415 | ||||||
Hoshizaki Electric Co., Ltd. | 6,600 | 319,689 | ||||||
Inaba Denki Sangyo Co., Ltd. | 7,600 | 264,919 | ||||||
Inabata & Co., Ltd. | 25,300 | 244,551 | ||||||
Iseki & Co., Ltd. | 38,000 | 88,015 | ||||||
Iwatani Corp. | 58,000 | 396,554 | ||||||
Kandenko Co., Ltd. | 50,000 | 262,350 | ||||||
Kanematsu Corp. | 173,000 | 275,262 | ||||||
Keihan Electric Railway Co., Ltd. | 67,000 | 328,378 | ||||||
Kitz Corp. | 30,500 | 139,771 | ||||||
Komori Corp. | 11,300 | 111,136 | ||||||
Kuroda Electric Co., Ltd. | 12,900 | 181,383 | ||||||
Kyowa Exeo Corp. | 27,000 | 330,621 | ||||||
Kyudenko Corp. | 8,000 | 89,958 | ||||||
Mabuchi Motor Co., Ltd. | 2,600 | 224,575 | ||||||
Maeda Corp. | 26,000 | 229,872 | ||||||
Maeda Road Construction Co., Ltd. | 16,000 | 246,631 | ||||||
Makino Milling Machine Co., Ltd. | 16,000 | 109,071 | ||||||
Meidensha Corp. | 30,000 | 111,167 | ||||||
Minebea Co., Ltd. | 39,000 | 534,395 | ||||||
Mirait Holdings Corp. | 28,300 | 316,786 | ||||||
MISUMI Group, Inc. | 10,600 | 334,471 | ||||||
Miura Co., Ltd. | 14,700 | 172,035 | ||||||
Nabtesco Corp. | 12,000 | 290,406 | ||||||
Nachi-Fujikoshi Corp. | 25,000 | 155,357 | ||||||
Namura Shipbuilding Co., Ltd. | 5,400 | 52,854 | ||||||
NGK Insulators Ltd. | 24,000 | 516,912 | ||||||
Nichias Corp. | 24,000 | 145,838 | ||||||
Nichiha Corp. | 4,600 | 39,413 | ||||||
Nippo Corp. | 14,000 | 255,902 | ||||||
Nippon Densetsu Kogyo Co., Ltd. | 10,200 | 144,069 | ||||||
Nippon Steel & Sumikin Bussan Corp. | 27,000 | 98,251 | ||||||
Nishimatsu Construction Co., Ltd. | 74,000 | 359,298 | ||||||
Nishio Rent All Co., Ltd. | 1,100 | 39,786 | ||||||
Nisshinbo Holdings, Inc. | 40,000 | 330,338 | ||||||
Nitta Corp. | 4,300 | 96,684 | ||||||
Nitto Boseki Co., Ltd. | 20,000 | 71,268 | ||||||
Nitto Kogyo Corp. | 4,900 | 85,666 | ||||||
Noritz Corp. | 9,200 | 170,086 | ||||||
NTN Corp. | 114,000 | 492,910 | ||||||
Oiles Corp. | 5,980 | 117,376 | ||||||
OKUMA Corp. | 19,000 | 136,422 | ||||||
Okumura Corp. | 38,000 | 215,732 | ||||||
OSG Corp. | 9,100 | 148,386 | ||||||
Penta-Ocean Construction Co., Ltd. | 60,500 | 197,732 | ||||||
Ryobi Ltd. | 52,000 | 141,928 | ||||||
Sanki Engineering Co., Ltd. | 20,000 | 139,733 | ||||||
Sankyo Tateyama, Inc. | 8,500 | 152,372 | ||||||
Sanwa Holdings Corp. | 35,000 | 242,690 | ||||||
Shinmaywa Industries Ltd. | 21,000 | 188,603 | ||||||
SHO-BOND Holdings Co., Ltd. | 1,100 | 42,504 | ||||||
Sintokogio Ltd. | 16,100 | 111,823 | ||||||
Tadano Ltd. | 9,000 | 134,535 | ||||||
Taikisha Ltd. | 6,500 | 144,446 | ||||||
Takara Standard Co., Ltd. | 22,000 | 179,662 | ||||||
Takasago Thermal Engineering Co., Ltd. | 16,200 | 209,080 | ||||||
The Japan Steel Works Ltd. | 80,000 | 286,162 | ||||||
The Nippon Road Co., Ltd. | 21,000 | 116,755 | ||||||
THK Co., Ltd. | 16,100 | 404,961 | ||||||
Toa Corp. | 60,000 | 110,296 | ||||||
Toda Corp. | 65,000 | 287,427 | ||||||
Toshiba Machine Co., Ltd. | 28,000 | 111,270 | ||||||
Toshiba Plant Systems & Services Corp. | 7,000 | 117,168 | ||||||
Totetsu Kogyo Co., Ltd. | 4,700 | 106,469 | ||||||
Toyo Engineering Corp. | 35,000 | 179,257 | ||||||
Trusco Nakayama Corp. | 8,200 | 219,921 | ||||||
Tsubakimoto Chain Co. | 20,000 | 157,765 | ||||||
Ushio, Inc. | 22,800 | 239,280 | ||||||
Yamazen Corp. | 23,300 | 181,443 | ||||||
Yuasa Trading Co., Ltd. | 7,000 | 132,040 | ||||||
19,210,468 | ||||||||
Commercial & Professional Supplies 0.9% | ||||||||
Aeon Delight Co., Ltd. | 5,400 | 131,917 | ||||||
Daiseki Co., Ltd. | 2,400 | 42,026 | ||||||
Duskin Co., Ltd. | 16,900 | 276,755 | ||||||
Kokuyo Co., Ltd. | 39,200 | 312,217 | ||||||
Meitec Corp. | 4,500 | 141,115 | ||||||
Moshi Moshi Hotline, Inc. | 12,400 | 123,750 | ||||||
Nissha Printing Co., Ltd. | 9,300 | 149,947 | ||||||
Nomura Co., Ltd. | 5,500 | 52,715 | ||||||
Okamura Corp. | 16,000 | 116,751 | ||||||
Park24 Co., Ltd. | 10,000 | 151,317 | ||||||
Sato Holdings Corp. | 4,200 | 110,621 | ||||||
Sohgo Security Services Co., Ltd. | 15,500 | 362,476 | ||||||
Temp Holdings Co., Ltd. | 6,300 | 204,716 | ||||||
Toppan Forms Co., Ltd. | 19,700 | 185,799 | ||||||
2,362,122 | ||||||||
Consumer Durables & Apparel 1.9% | ||||||||
Alpine Electronics, Inc. | 13,900 | 237,266 | ||||||
Asics Corp. | 16,000 | 374,671 | ||||||
Casio Computer Co., Ltd. | 34,200 | 545,337 | ||||||
Fujitsu General Ltd. | 5,000 | 62,592 | ||||||
Funai Electric Co., Ltd. | 21,000 | 188,331 | ||||||
Gunze Ltd. | 73,000 | 203,162 | ||||||
Haseko Corp. | 37,400 | 274,139 | ||||||
Heiwa Corp. | 2,400 | 49,143 | ||||||
Kurabo Industries Ltd. | 77,000 | 128,031 | ||||||
Misawa Homes Co., Ltd. | 4,300 | 39,417 | ||||||
Mizuno Corp. | 16,000 | 80,163 | ||||||
Onward Holdings Co., Ltd. | 46,000 | 282,660 | ||||||
PanaHome Corp. | 26,000 | 173,995 | ||||||
Pioneer Corp. * | 134,800 | 353,663 | ||||||
Rinnai Corp. | 4,000 | 355,308 | ||||||
Sangetsu Co., Ltd. | 8,700 | 220,315 | ||||||
Sankyo Co., Ltd. | 11,400 | 414,858 |
See financial notes 41
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Seiren Co., Ltd. | 5,800 | 50,649 | ||||||
Tamron Co., Ltd. | 4,600 | 91,056 | ||||||
Token Corp. | 3,250 | 147,155 | ||||||
Tomy Co., Ltd. | 31,100 | 160,879 | ||||||
TSI Holdings Co., Ltd. | 29,000 | 184,362 | ||||||
Wacoal Holdings Corp. | 24,000 | 249,930 | ||||||
Yamaha Corp. | 35,900 | 492,079 | ||||||
5,359,161 | ||||||||
Consumer Services 0.8% | ||||||||
Accordia Golf Co., Ltd. | 15,800 | 166,474 | ||||||
Doutor Nichires Holdings Co., Ltd. | 8,800 | 131,096 | ||||||
Dynam Japan Holdings Co., Ltd. | 28,000 | 78,798 | ||||||
H.I.S. Co., Ltd. | 7,900 | 205,226 | ||||||
McDonald’s Holdings Co., Ltd. (a) | 14,733 | 359,595 | ||||||
MOS Food Services, Inc. | 4,600 | 89,757 | ||||||
Plenus Co., Ltd. | 5,700 | 102,527 | ||||||
Resorttrust, Inc. | 6,200 | 149,474 | ||||||
Round One Corp. | 21,000 | 126,692 | ||||||
Royal Holdings Co., Ltd. | 8,400 | 134,123 | ||||||
Saint Marc Holdings Co., Ltd. | 800 | 41,825 | ||||||
Saizeriya Co., Ltd. | 12,000 | 177,578 | ||||||
Tokyo Dome Corp. | 19,000 | 80,944 | ||||||
Yoshinoya Holdings Co., Ltd. | 15,800 | 181,016 | ||||||
Zensho Holdings Co., Ltd. (a) | 17,800 | 161,577 | ||||||
2,186,702 | ||||||||
Diversified Financials 0.7% | ||||||||
Acom Co., Ltd. * | 51,700 | 172,329 | ||||||
AEON Financial Service Co., Ltd. | 9,300 | 194,357 | ||||||
Aiful Corp. * | 39,900 | 165,732 | ||||||
Century Tokyo Leasing Corp. | 4,300 | 112,604 | ||||||
Daiwa Securities Group, Inc. | 51,000 | 403,051 | ||||||
Fuyo General Lease Co., Ltd. | 1,100 | 43,429 | ||||||
Hitachi Capital Corp. | 5,200 | 128,531 | ||||||
Jaccs Co., Ltd. | 29,000 | 173,301 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 34,600 | 182,672 | ||||||
Orient Corp. * | 100,700 | 205,255 | ||||||
SBI Holdings, Inc. | 18,100 | 208,721 | ||||||
1,989,982 | ||||||||
Energy 0.2% | ||||||||
Japan Petroleum Exploration Co. | 7,100 | 232,116 | ||||||
San-Ai Oil Co., Ltd. | 34,000 | 235,351 | ||||||
Shinko Plantech Co., Ltd. | 15,500 | 118,494 | ||||||
585,961 | ||||||||
Food & Staples Retailing 1.6% | ||||||||
Ain Pharmaciez, Inc. | 5,000 | 135,451 | ||||||
Arcs Co., Ltd. | 15,200 | 334,983 | ||||||
Cawachi Ltd. | 11,800 | 183,466 | ||||||
Cocokara fine, Inc. | 8,800 | 213,922 | ||||||
Cosmos Pharmaceutical Corp. | 1,000 | 142,979 | ||||||
FamilyMart Co., Ltd. | 9,300 | 373,423 | ||||||
Heiwado Co., Ltd. | 15,700 | 292,270 | ||||||
Kato Sangyo Co., Ltd. | 15,500 | 329,814 | ||||||
Matsumotokiyoshi Holdings Co., Ltd. | 13,200 | 383,883 | ||||||
Ministop Co., Ltd. | 3,400 | 48,408 | ||||||
Mitsubishi Shokuhin Co., Ltd. | 7,600 | 171,195 | ||||||
San-A Co., Ltd. | 5,100 | 171,915 | ||||||
Sugi Holdings Co., Ltd. | 6,900 | 301,345 | ||||||
Sundrug Co., Ltd. | 6,000 | 289,845 | ||||||
Tsuruha Holdings, Inc. | 7,200 | 425,093 | ||||||
Valor Co., Ltd. | 23,300 | 377,683 | ||||||
Welcia Holdings Co., Ltd. (a) | 4,400 | 146,992 | ||||||
Yaoko Co., Ltd. | 1,300 | 79,860 | ||||||
Yokohama Reito Co., Ltd. | 20,900 | 154,967 | ||||||
4,557,494 | ||||||||
Food, Beverage & Tobacco 2.4% | ||||||||
Calbee, Inc. | 7,500 | 262,683 | ||||||
Coca-Cola East Japan Co., Ltd. | 9,700 | 174,533 | ||||||
Dydo Drinco, Inc. | 3,500 | 149,983 | ||||||
Ezaki Glico Co., Ltd. | 10,500 | 339,899 | ||||||
Fuji Oil Co., Ltd. | 18,300 | 290,619 | ||||||
Hokuto Corp. | 6,000 | 109,393 | ||||||
House Foods Group, Inc. | 17,200 | 294,331 | ||||||
Ito En Ltd. (a) | 13,900 | 276,430 | ||||||
Itoham Foods, Inc. | 70,000 | 360,061 | ||||||
J-Oil Mills, Inc. | 47,000 | 152,688 | ||||||
Kagome Co., Ltd. | 15,300 | 248,221 | ||||||
Kikkoman Corp. | 24,000 | 552,029 | ||||||
Megmilk Snow Brand Co., Ltd. | 28,700 | 380,794 | ||||||
Mitsui Sugar Co., Ltd. | 23,000 | 79,780 | ||||||
Morinaga & Co., Ltd. | 70,000 | 150,102 | ||||||
Morinaga Milk Industry Co., Ltd. | 129,000 | 431,324 | ||||||
Nichirei Corp. | 95,000 | 404,333 | ||||||
Nippon Flour Mills Co., Ltd. | 50,000 | 250,966 | ||||||
Nippon Suisan Kaisha Ltd. * | 95,100 | 281,125 | ||||||
Prima Meat Packers Ltd. | 56,000 | 131,980 | ||||||
Sapporo Holdings Ltd. | 84,000 | 363,536 | ||||||
Takara Holdings, Inc. | 30,200 | 240,422 | ||||||
The Nisshin Oillio Group Ltd. | 62,000 | 222,196 | ||||||
Warabeya Nichiyo Co., Ltd. | 7,600 | 133,270 | ||||||
Yakult Honsha Co., Ltd. | 7,600 | 420,883 | ||||||
6,701,581 | ||||||||
Health Care Equipment & Services 0.6% | ||||||||
Hogy Medical Co., Ltd. | 900 | 46,755 | ||||||
Miraca Holdings, Inc. | 8,100 | 340,033 | ||||||
Nichii Gakkan Co. | 16,300 | 126,483 | ||||||
Nihon Kohden Corp. | 4,600 | 235,183 | ||||||
Nikkiso Co., Ltd. | 4,100 | 42,406 | ||||||
Nipro Corp. | 22,800 | 187,849 | ||||||
Paramount Bed Holdings Co., Ltd. | 1,600 | 45,508 | ||||||
Ship Healthcare Holdings, Inc. | 3,800 | 88,944 | ||||||
Sysmex Corp. | 9,700 | 414,094 | ||||||
Toho Holdings Co., Ltd. | 21,000 | 274,729 | ||||||
1,801,984 | ||||||||
Household & Personal Products 0.5% | ||||||||
Fancl Corp. | 13,000 | 178,328 | ||||||
Kobayashi Pharmaceutical Co., Ltd. | 4,200 | 259,252 | ||||||
Kose Corp. | 4,900 | 200,250 | ||||||
Lion Corp. | 46,000 | 259,894 | ||||||
Mandom Corp. | 4,100 | 137,542 | ||||||
Pigeon Corp. | 2,600 | 162,077 | ||||||
Pola Orbis Holdings, Inc. | 4,100 | 168,377 | ||||||
1,365,720 | ||||||||
Insurance 0.1% | ||||||||
Sony Financial Holdings, Inc. | 14,999 | 239,454 |
42 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 4.3% | ||||||||
ADEKA Corp. | 23,400 | 302,055 | ||||||
Aichi Steel Corp. | 46,000 | 165,439 | ||||||
Asahi Holdings, Inc. | 12,200 | 203,095 | ||||||
Chugoku Marine Paints Ltd. | 19,000 | 150,152 | ||||||
Daido Steel Co., Ltd. | 65,000 | 249,356 | ||||||
Daio Paper Corp. | 24,000 | 206,244 | ||||||
Dowa Holdings Co., Ltd. | 46,000 | 387,348 | ||||||
Earth Chemical Co., Ltd. | 3,500 | 128,348 | ||||||
FP Corp. | 4,600 | 132,576 | ||||||
Fuji Seal International, Inc. | 4,400 | 132,632 | ||||||
Fujimori Kogyo Co., Ltd. | 1,400 | 38,656 | ||||||
Hitachi Metals Ltd. | 24,990 | 421,901 | ||||||
Hokuetsu Kishu Paper Co., Ltd. | 46,700 | 194,350 | ||||||
Ishihara Sangyo Kaisha Ltd. * | 128,000 | 105,201 | ||||||
Kansai Paint Co., Ltd. | 22,000 | 336,304 | ||||||
Konishi Co., Ltd. | 2,500 | 43,149 | ||||||
Kureha Corp. | 38,000 | 188,466 | ||||||
Kyoei Steel Ltd. | 7,900 | 131,490 | ||||||
Lintec Corp. | 14,800 | 309,002 | ||||||
Maruichi Steel Tube Ltd. | 10,100 | 238,515 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 73,000 | 436,772 | ||||||
Mitsubishi Steel Manufacturing Co., Ltd. | 52,000 | 114,933 | ||||||
Nihon Parkerizing Co., Ltd. | 6,500 | 155,153 | ||||||
Nippon Denko Co., Ltd. | 48,000 | 120,563 | ||||||
Nippon Kayaku Co., Ltd. | 26,000 | 341,875 | ||||||
Nippon Light Metal Holdings Co., Ltd. | 113,500 | 167,628 | ||||||
Nippon Paint Holdings Co., Ltd. | 14,000 | 317,903 | ||||||
Nippon Shokubai Co., Ltd. | 32,000 | 383,569 | ||||||
Nippon Soda Co., Ltd. | 31,000 | 176,529 | ||||||
Nissan Chemical Industries Ltd. | 21,400 | 396,774 | ||||||
Nisshin Steel Co., Ltd. | 13,100 | 122,315 | ||||||
Nittetsu Mining Co., Ltd. | 27,000 | 102,357 | ||||||
NOF Corp. | 31,000 | 205,444 | ||||||
Pacific Metals Co., Ltd. * | 49,000 | 155,017 | ||||||
Rengo Co., Ltd. | 78,000 | 343,360 | ||||||
Sakata INX Corp. | 5,500 | 56,281 | ||||||
Sanyo Chemical Industries Ltd. | 19,000 | 118,469 | ||||||
Sanyo Special Steel Co., Ltd. | 40,000 | 137,284 | ||||||
Sumitomo Bakelite Co., Ltd. | 66,000 | 259,738 | ||||||
Sumitomo Osaka Cement Co., Ltd. | 79,000 | 246,955 | ||||||
The Nippon Synthetic Chemical Industry Co., Ltd. | 6,000 | 36,634 | ||||||
Toagosei Co., Ltd. | 70,000 | 305,930 | ||||||
Toho Zinc Co., Ltd. | 38,000 | 130,145 | ||||||
Tokai Carbon Co., Ltd. | 76,000 | 198,250 | ||||||
Tokuyama Corp. | 134,000 | 391,696 | ||||||
Tokyo Ohka Kogyo Co., Ltd. | 7,500 | 211,527 | ||||||
Tokyo Steel Manufacturing Co., Ltd. | 54,700 | 293,433 | ||||||
Topy Industries Ltd. | 101,000 | 195,272 | ||||||
Toyo Ink SC Holdings Co., Ltd. | 54,000 | 249,074 | ||||||
Toyo Kohan Co., Ltd. | 20,000 | 115,456 | ||||||
Toyobo Co., Ltd. | 248,000 | 356,969 | ||||||
UACJ Corp. | 37,300 | 137,418 | ||||||
Yamato Kogyo Co., Ltd. | 7,300 | 236,483 | ||||||
Yodogawa Steel Works Ltd. | 48,000 | 187,819 | ||||||
Zeon Corp. | 31,000 | 286,946 | ||||||
11,756,250 | ||||||||
Media 0.6% | ||||||||
Asatsu-DK, Inc. | 13,400 | 338,171 | ||||||
Avex Group Holdings, Inc. | 6,900 | 102,489 | ||||||
CyberAgent, Inc. | 3,200 | 124,615 | ||||||
Daiichikosho Co., Ltd. | 8,600 | 217,034 | ||||||
SKY Perfect JSAT Holdings, Inc. | 43,900 | 269,493 | ||||||
Toei Co., Ltd. | 9,000 | 47,489 | ||||||
Toho Co., Ltd. | 13,900 | 318,832 | ||||||
Tokyo Broadcasting System Holdings, Inc. | 10,300 | 114,189 | ||||||
TV Asahi Holdings Corp. | 5,600 | 88,293 | ||||||
Zenrin Co., Ltd. | 10,400 | 127,851 | ||||||
1,748,456 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
Hisamitsu Pharmaceutical Co., Inc. | 7,700 | 259,192 | ||||||
Kaken Pharmaceutical Co., Ltd. | 10,000 | 250,540 | ||||||
Kissei Pharmaceutical Co., Ltd. | 4,800 | 125,473 | ||||||
KYORIN Holdings, Inc. | 7,600 | 160,115 | ||||||
Mochida Pharmaceutical Co., Ltd. | 2,800 | 175,093 | ||||||
Nichi-iko Pharmaceutical Co., Ltd. | 3,200 | 52,896 | ||||||
Nippon Shinyaku Co., Ltd. | 5,000 | 143,913 | ||||||
Rohto Pharmaceutical Co., Ltd. | 13,200 | 191,475 | ||||||
Santen Pharmaceutical Co., Ltd. | 7,700 | 459,586 | ||||||
Sawai Pharmaceutical Co., Ltd. | 2,400 | 142,985 | ||||||
Sumitomo Dainippon Pharma Co., Ltd. | 20,200 | 238,278 | ||||||
Tsumura & Co. | 10,000 | 223,758 | ||||||
2,423,304 | ||||||||
Real Estate 1.4% | ||||||||
Advance Residence Investment Corp. | 83 | 194,596 | ||||||
Aeon Mall Co., Ltd. | 8,630 | 158,410 | ||||||
Frontier Real Estate Investment Corp. | 10 | 46,060 | ||||||
Japan Excellent, Inc. | 93 | 123,392 | ||||||
Japan Prime Realty Investment Corp. | 49 | 180,451 | ||||||
Japan Real Estate Investment Corp. | 67 | 365,100 | ||||||
Japan Retail Fund Investment Corp. | 158 | 318,124 | ||||||
Kenedix Office Investment Corp. | 26 | 139,032 | ||||||
Leopalace21 Corp. * | 46,200 | 289,372 | ||||||
MID REIT, Inc. | 19 | 47,539 | ||||||
Mori Trust Sogo REIT, Inc. | 29 | 51,814 | ||||||
Nippon Accommodations Fund, Inc. | 13 | 47,558 | ||||||
Nippon Building Fund, Inc. | 79 | 442,767 | ||||||
Nomura Real Estate Holdings, Inc. | 19,300 | 341,106 | ||||||
Nomura Real Estate Office Fund, Inc. | 42 | 186,131 | ||||||
NTT Urban Development Corp. | 11,500 | 130,157 | ||||||
Orix J-REIT, Inc. | 129 | 171,991 | ||||||
Relo Holdings, Inc. | 700 | 49,527 | ||||||
Tokyo Tatemono Co., Ltd. | 28,000 | 244,422 | ||||||
Top REIT, Inc. | 10 | 41,276 | ||||||
United Urban Investment Corp. | 120 | 189,384 | ||||||
3,758,209 |
See financial notes 43
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Retailing 2.4% | ||||||||
ABC-Mart, Inc. | 2,500 | 144,152 | ||||||
Adastria Holdings Co., Ltd. | 6,490 | 144,367 | ||||||
Alpen Co., Ltd. | 6,900 | 106,503 | ||||||
AOKI Holdings, Inc. | 4,800 | 53,838 | ||||||
Aoyama Trading Co., Ltd. | 15,500 | 368,667 | ||||||
Arcland Sakamoto Co., Ltd. | 5,300 | 118,154 | ||||||
ASKUL Corp. | 2,300 | 47,795 | ||||||
Autobacs Seven Co., Ltd. | 25,600 | 375,547 | ||||||
Bic Camera, Inc. (a) | 26,900 | 235,854 | ||||||
Canon Marketing Japan, Inc. | 24,000 | 490,661 | ||||||
Chiyoda Co., Ltd. | 8,700 | 172,137 | ||||||
DCM Holdings Co., Ltd. | 61,300 | 410,669 | ||||||
Don Quijote Holdings Co., Ltd. | 7,000 | 419,411 | ||||||
Doshisha Co., Ltd. | 7,900 | 130,643 | ||||||
Geo Holdings Corp. | 28,500 | 251,655 | ||||||
Gulliver International Co., Ltd. | 13,900 | 121,356 | ||||||
H2O Retailing Corp. | 24,400 | 405,825 | ||||||
Happinet Corp. | 5,500 | 94,338 | ||||||
Hikari Tsushin, Inc. | 2,300 | 152,571 | ||||||
Izumi Co., Ltd. | 7,200 | 231,649 | ||||||
Kohnan Shoji Co., Ltd. | 22,900 | 262,769 | ||||||
Komeri Co., Ltd. | 9,700 | 218,051 | ||||||
Rakuten, Inc. | 22,760 | 256,653 | ||||||
Ryohin Keikaku Co., Ltd. | 3,300 | 445,602 | ||||||
Sanrio Co., Ltd. (a) | 2,300 | 66,499 | ||||||
The Daiei, Inc. * | 271,700 | 309,299 | ||||||
United Arrows Ltd. | 2,800 | 104,930 | ||||||
USS Co., Ltd. | 20,300 | 319,481 | ||||||
Xebio Co., Ltd. | 13,500 | 211,261 | ||||||
6,670,337 | ||||||||
Semiconductors & Semiconductor Equipment 0.6% | ||||||||
Advantest Corp. | 21,700 | 253,036 | ||||||
Disco Corp. | 2,500 | 170,648 | ||||||
Sanken Electric Co., Ltd. | 17,000 | 133,518 | ||||||
SCREEN Holdings Co., Ltd. | 36,000 | 196,217 | ||||||
Shinko Electric Industries Co., Ltd. | 23,100 | 134,139 | ||||||
Sumco Corp. (a) | 32,800 | 441,131 | ||||||
Tokyo Seimitsu Co., Ltd. | 5,900 | 96,008 | ||||||
Ulvac, Inc. * | 9,900 | 123,280 | ||||||
1,547,977 | ||||||||
Software & Services 1.7% | ||||||||
Capcom Co., Ltd. | 10,600 | 164,695 | ||||||
Dena Co., Ltd. | 22,686 | 293,152 | ||||||
DTS Corp. | 5,900 | 121,383 | ||||||
Fuji Soft, Inc. | 6,800 | 168,340 | ||||||
Gree, Inc. (a) | 19,800 | 141,800 | ||||||
Internet Initiative Japan, Inc. | 1,900 | 33,361 | ||||||
IT Holdings Corp. | 28,100 | 459,136 | ||||||
Itochu Techno-Solutions Corp. | 6,500 | 258,431 | ||||||
NEC Networks & System Integration Corp. | 8,800 | 191,203 | ||||||
NET One Systems Co., Ltd. (a) | 39,700 | 231,406 | ||||||
Nexon Co., Ltd. | 11,561 | 101,878 | ||||||
Nihon Unisys Ltd. | 19,500 | 172,868 | ||||||
Nomura Research Institute Ltd. | 14,800 | 488,160 | ||||||
NS Solutions Corp. | 4,300 | 132,372 | ||||||
NSD Co., Ltd. | 8,000 | 117,983 | ||||||
Obic Co., Ltd. | 5,000 | 178,495 | ||||||
Otsuka Corp. | 9,600 | 356,959 | ||||||
SCSK Corp. | 3,976 | 106,888 | ||||||
Square Enix Holdings Co., Ltd. | 10,600 | 218,151 | ||||||
Transcosmos, Inc. | 5,500 | 102,850 | ||||||
Trend Micro, Inc. | 9,700 | 326,847 | ||||||
Yahoo Japan Corp. | 75,600 | 272,357 | ||||||
4,638,715 | ||||||||
Technology Hardware & Equipment 2.7% | ||||||||
Alps Electric Co., Ltd. | 35,300 | 600,847 | ||||||
Amano Corp. | 16,200 | 175,585 | ||||||
Anritsu Corp. | 13,900 | 107,619 | ||||||
Azbil Corp. | 15,200 | 366,555 | ||||||
Canon Electronics, Inc. | 6,900 | 126,011 | ||||||
Citizen Holdings Co., Ltd. | 54,000 | 354,744 | ||||||
Daiwabo Holdings Co., Ltd. | 92,000 | 167,813 | ||||||
Eizo Corp. | 5,850 | 106,955 | ||||||
Hamamatsu Photonics K.K. | 6,100 | 277,125 | ||||||
Hirose Electric Co., Ltd. | 3,000 | 367,830 | ||||||
Hitachi High-Technologies Corp. | 19,700 | 601,825 | ||||||
Hitachi Kokusai Electric, Inc. | 7,000 | 104,853 | ||||||
Horiba Ltd. | 6,700 | 242,391 | ||||||
Hosiden Corp. | 75,800 | 410,933 | ||||||
Japan Aviation Electronics Industry Ltd. | 10,000 | 198,128 | ||||||
Macnica, Inc. | 3,900 | 113,039 | ||||||
Melco Holdings, Inc. | 6,600 | 94,578 | ||||||
Mitsumi Electric Co., Ltd. | 54,500 | 339,261 | ||||||
Nichicon Corp. | 15,500 | 104,520 | ||||||
Nippon Chemi-Con Corp. * | 38,000 | 113,367 | ||||||
Oki Electric Industry Co., Ltd. | 70,000 | 162,642 | ||||||
Riso Kagaku Corp. | 4,800 | 145,149 | ||||||
Ryosan Co., Ltd. | 16,700 | 352,991 | ||||||
Ryoyo Electro Corp. | 6,200 | 61,123 | ||||||
Shimadzu Corp. | 41,000 | 356,754 | ||||||
Siix Corp. | 2,700 | 46,888 | ||||||
Taiyo Yuden Co., Ltd. | 25,600 | 263,158 | ||||||
The Nippon Signal Co., Ltd. | 12,400 | 120,873 | ||||||
Toshiba TEC Corp. | 36,000 | 254,046 | ||||||
Wacom Co., Ltd. (a) | 8,800 | 33,764 | ||||||
Yaskawa Electric Corp. | 24,500 | 317,573 | ||||||
Yokogawa Electric Corp. | 27,600 | 383,997 | ||||||
7,472,937 | ||||||||
Transportation 1.5% | ||||||||
Fukuyama Transporting Co., Ltd. | 38,000 | 190,703 | ||||||
Hitachi Transport System Ltd. | 15,400 | 203,797 | ||||||
Japan Airport Terminal Co., Ltd. | 4,800 | 189,375 | ||||||
Keikyu Corp. | 42,000 | 349,436 | ||||||
Keio Corp. | 71,000 | 539,297 | ||||||
Keisei Electric Railway Co., Ltd. | 29,000 | 340,853 | ||||||
Kintetsu World Express, Inc. | 5,800 | 200,717 | ||||||
Konoike Transport Co., Ltd. | 2,900 | 56,767 | ||||||
Mitsubishi Logistics Corp. | 16,000 | 243,704 | ||||||
Mitsui-Soko Holdings Co., Ltd. | 25,000 | 95,044 | ||||||
Nankai Electric Railway Co., Ltd. | 68,000 | 321,760 | ||||||
Nippon Konpo Unyu Soko Co., Ltd. | 12,700 | 210,130 | ||||||
Nishi-Nippon Railroad Co., Ltd. | 73,000 | 290,870 | ||||||
Sankyu, Inc. | 91,000 | 420,717 | ||||||
Senko Co., Ltd. | 32,000 | 136,108 | ||||||
Sotetsu Holdings, Inc. | 56,000 | 210,387 |
44 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Sumitomo Warehouse Co., Ltd. | 27,000 | 148,074 | ||||||
4,147,739 | ||||||||
Utilities 0.1% | ||||||||
The Okinawa Electric Power Co., Inc. | 7,200 | 219,577 | ||||||
105,939,234 | ||||||||
Luxembourg 0.4% | ||||||||
Banks 0.0% | ||||||||
Espirito Santo Financial Group S.A. *(b)(c) | 69,773 | — | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Regus plc | 61,325 | 194,280 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Samsonite International S.A. | 74,700 | 248,207 | ||||||
Household & Personal Products 0.1% | ||||||||
Oriflame Cosmetics S.A. SDR | 11,355 | 198,488 | ||||||
Materials 0.1% | ||||||||
Ternium S.A. ADR | 13,120 | 288,771 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Magnachip Semiconductor Corp. * | 7,553 | 84,065 | ||||||
Telecommunication Services 0.0% | ||||||||
Colt Group S.A. * | 40,730 | 89,915 | ||||||
1,103,726 | ||||||||
Netherlands 1.9% | ||||||||
Capital Goods 0.4% | ||||||||
Aalberts Industries N.V. | 11,474 | 305,848 | ||||||
AerCap Holdings N.V. * | 7,195 | 311,831 | ||||||
Arcadis N.V. | 7,133 | 219,434 | ||||||
Heijmans N.V. CVA | 3,197 | 43,517 | ||||||
Royal Imtech N.V. *(a) | 594 | 3,255 | ||||||
Sensata Technologies Holding N.V. * | 4,717 | 230,237 | ||||||
TKH Group N.V. | 4,263 | 129,164 | ||||||
1,243,286 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
USG People N.V. | 27,029 | 271,149 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
TomTom N.V. * | 19,882 | 144,428 | ||||||
Diversified Financials 0.0% | ||||||||
BinckBank N.V. | 8,096 | 80,237 | ||||||
Energy 0.3% | ||||||||
Core Laboratories N.V. | 1,189 | 165,901 | ||||||
Koninklijke Vopak N.V. | 5,574 | 279,533 | ||||||
SBM Offshore N.V. * | 28,282 | 354,005 | ||||||
799,439 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Sligro Food Group N.V. | 3,224 | 119,003 | ||||||
X5 Retail Group N.V. GDR - Reg’d * | 16,850 | 308,835 | ||||||
427,838 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Corbion N.V. | 22,059 | 356,634 | ||||||
Koninklijke Wessanen N.V. | 25,977 | 166,108 | ||||||
522,742 | ||||||||
Materials 0.1% | ||||||||
Koninklijke Ten Cate N.V. | 7,960 | 179,532 | ||||||
Real Estate 0.3% | ||||||||
Corio N.V. | 9,054 | 440,700 | ||||||
Eurocommercial Properties N.V. | 3,404 | 155,396 | ||||||
Vastned Retail N.V. | 3,086 | 140,928 | ||||||
Wereldhave N.V. | 2,493 | 204,383 | ||||||
941,407 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASM International N.V. | 6,518 | 261,194 | ||||||
NXP Semiconductor N.V. * | 4,834 | 331,902 | ||||||
593,096 | ||||||||
Software & Services 0.0% | ||||||||
Yandex N.V., Class A * | 1,919 | 54,922 | ||||||
5,258,076 | ||||||||
New Zealand 0.7% | ||||||||
Consumer Services 0.1% | ||||||||
SKYCITY Entertainment Group Ltd. | 73,687 | 225,290 | ||||||
Energy 0.0% | ||||||||
Z Energy Ltd. | 18,817 | 60,837 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Fisher & Paykel Healthcare Corp., Ltd. | 36,340 | 158,348 | ||||||
Materials 0.1% | ||||||||
Nuplex Industries Ltd. | 62,363 | 153,865 | ||||||
Media 0.1% | ||||||||
SKY Network Television Ltd. | 45,479 | 225,818 | ||||||
Real Estate 0.0% | ||||||||
Kiwi Income Property Trust | 103,394 | 96,724 | ||||||
Telecommunication Services 0.1% | ||||||||
Chorus Ltd. * | 154,431 | 254,000 | ||||||
Transportation 0.1% | ||||||||
Air New Zealand Ltd. | 88,199 | 139,626 | ||||||
Auckland International Airport Ltd. | 47,099 | 142,389 | ||||||
Mainfreight Ltd. | 8,788 | 109,166 | ||||||
391,181 | ||||||||
Utilities 0.1% | ||||||||
Contact Energy Ltd. | 42,591 | 206,617 | ||||||
Infratil Ltd. | 78,917 | 176,243 | ||||||
Mighty River Power Ltd. | 31,465 | 69,166 | ||||||
452,026 | ||||||||
2,018,089 | ||||||||
Norway 1.0% | ||||||||
Banks 0.1% | ||||||||
Sparebank 1 Nord Norge | 8,615 | 50,451 | ||||||
SpareBank 1 SMN | 14,854 | 132,085 |
See financial notes 45
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
SpareBank 1 SR Bank A.S.A. | 15,758 | 135,553 | ||||||
318,089 | ||||||||
Capital Goods 0.0% | ||||||||
Vard Holdings Ltd. * | 133,000 | 71,123 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Tomra Systems A.S.A. | 14,359 | 107,507 | ||||||
Energy 0.2% | ||||||||
Fred Olsen Energy A.S.A. | 9,019 | 96,246 | ||||||
Kvaerner A.S.A. | 55,539 | 73,216 | ||||||
TGS Nopec Geophysical Co. A.S.A. | 12,906 | 301,068 | ||||||
470,530 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Austevoll Seafood A.S.A. | 19,341 | 125,772 | ||||||
Leroy Seafood Group A.S.A. | 3,523 | 133,273 | ||||||
259,045 | ||||||||
Insurance 0.2% | ||||||||
Gjensidige Forsikring A.S.A. | 18,760 | 340,766 | ||||||
Storebrand A.S.A. * | 37,610 | 192,842 | ||||||
533,608 | ||||||||
Materials 0.0% | ||||||||
Borregaard A.S.A. | 6,105 | 42,425 | ||||||
Media 0.1% | ||||||||
Schibsted A.S.A. | 4,582 | 242,348 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
REC Silicon A.S.A. * | 860,725 | 344,114 | ||||||
Software & Services 0.1% | ||||||||
Atea A.S.A. | 19,788 | 216,364 | ||||||
Transportation 0.0% | ||||||||
Golden Ocean Group Ltd. | 74,159 | 90,259 | ||||||
2,695,412 | ||||||||
Portugal 0.3% | ||||||||
Banks 0.1% | ||||||||
Banco BPI S.A. - Reg’d * | 54,057 | 105,881 | ||||||
Banco Espirito Santo S.A. - Reg’d *(b)(c) | 320,558 | — | ||||||
105,881 | ||||||||
Capital Goods 0.0% | ||||||||
Mota-Engil, SGPS, S.A. | 7,728 | 40,552 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Jeronimo Martins, SGPS, S.A. | 25,874 | 226,439 | ||||||
Sonae SGPS S.A. | 197,637 | 265,078 | ||||||
491,517 | ||||||||
Materials 0.0% | ||||||||
Semapa-Sociedade de Investimento e Gestao | 6,966 | 84,230 | ||||||
Media 0.0% | ||||||||
NOS SGPS | 16,623 | 95,368 | ||||||
Utilities 0.0% | ||||||||
Redes Energeticas Nacionais SGPS, S.A. | 25,603 | 79,361 | ||||||
896,909 | ||||||||
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 | 2,970 | ||||||
2,970 | ||||||||
Singapore 1.9% | ||||||||
Capital Goods 0.4% | ||||||||
Cosco Corp., (Singapore) Ltd. (a) | 255,431 | 118,410 | ||||||
Sembcorp Marine Ltd. (a) | 118,096 | 334,569 | ||||||
Singapore Technologies Engineering Ltd. | 148,000 | 432,093 | ||||||
United Engineers Ltd. | 62,000 | 138,573 | ||||||
1,023,645 | ||||||||
Consumer Services 0.1% | ||||||||
Genting Singapore plc | 217,000 | 185,854 | ||||||
Diversified Financials 0.1% | ||||||||
Singapore Exchange Ltd. | 46,000 | 250,687 | ||||||
Energy 0.0% | ||||||||
Sakari Resources Ltd. *(b)(c) | 18,000 | — | ||||||
Food & Staples Retailing 0.1% | ||||||||
Olam International Ltd. (a) | 114,704 | 190,176 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Golden Agri-Resources Ltd. | 1,028,000 | 416,598 | ||||||
Real Estate 0.7% | ||||||||
Ascendas REIT | 115,000 | 199,751 | ||||||
CapitaCommercial Trust | 111,302 | 144,723 | ||||||
CapitaLand Ltd. | 194,000 | 478,970 | ||||||
CapitaMall Trust | 139,000 | 213,197 | ||||||
City Developments Ltd. | 54,000 | 397,436 | ||||||
Global Logistic Properties Ltd. | 59,000 | 126,435 | ||||||
Keppel Land Ltd. | 58,000 | 150,922 | ||||||
Suntec REIT | 108,000 | 150,047 | ||||||
UOL Group Ltd. | 42,000 | 210,955 | ||||||
2,072,436 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Kulicke & Soffa Industries, Inc. * | 3,908 | 56,354 | ||||||
Telecommunication Services 0.1% | ||||||||
M1 Ltd. | 39,000 | 105,940 | ||||||
StarHub Ltd. | 55,000 | 176,787 | ||||||
282,727 | ||||||||
Transportation 0.3% | ||||||||
Neptune Orient Lines Ltd. *(a) | 315,000 | 204,907 | ||||||
SATS Ltd. | 95,749 | 231,077 | ||||||
Singapore Post Ltd. | 128,000 | 196,463 | ||||||
SMRT Corp., Ltd. | 128,000 | 148,524 | ||||||
780,971 | ||||||||
5,259,448 | ||||||||
Spain 2.0% | ||||||||
Banks 0.4% | ||||||||
Bankia S.A. * | 344,465 | 617,745 |
46 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Bankinter S.A. | 54,745 | 452,879 | ||||||
Caja de Ahorros del Mediterraneo *(b)(c) | 5,382 | — | ||||||
Liberbank S.A. * | 51,720 | 44,183 | ||||||
1,114,807 | ||||||||
Capital Goods 0.5% | ||||||||
Abengoa S.A. | 3,318 | 14,706 | ||||||
Abengoa S.A., B Shares (a) | 85,341 | 360,705 | ||||||
Construcciones y Auxiliar de Ferrocarriles S.A. | 275 | 91,513 | ||||||
Duro Felguera S.A. | 9,203 | 41,686 | ||||||
Gamesa Corp. Tecnologica S.A. * | 41,718 | 411,883 | ||||||
Obrascon Huarte Lain S.A. | 5,732 | 167,577 | ||||||
Sacyr S.A. * | 31,854 | 139,961 | ||||||
Zardoya Otis S.A. | 18,576 | 216,596 | ||||||
1,444,627 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Prosegur Cia de Seguridad S.A. - Reg’d | 29,132 | 171,113 | ||||||
Consumer Services 0.0% | ||||||||
Melia Hotels International S.A. | 3,961 | 39,622 | ||||||
NH Hotel Group S.A. * | 7,861 | 35,893 | ||||||
75,515 | ||||||||
Diversified Financials 0.1% | ||||||||
Bolsas y Mercados Espanoles S.A. | 6,559 | 249,547 | ||||||
Energy 0.1% | ||||||||
Tecnicas Reunidas S.A. | 3,687 | 181,633 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Ebro Foods S.A. | 14,434 | 258,357 | ||||||
Pescanova S.A. *(b)(c) | 1,125 | — | ||||||
Viscofan S.A. | 4,761 | 279,950 | ||||||
538,307 | ||||||||
Insurance 0.0% | ||||||||
Grupo Catalana Occidente S.A. | 4,170 | 125,815 | ||||||
Materials 0.2% | ||||||||
Acerinox S.A. | 25,553 | 380,218 | ||||||
Vidrala S.A. | 1,051 | 41,751 | ||||||
421,969 | ||||||||
Media 0.2% | ||||||||
Atresmedia Corp de Medios de Comunicaion S.A. | 6,929 | 101,679 | ||||||
Mediaset Espana Comunicacion S.A. * | 26,789 | 336,318 | ||||||
Promotora de Informaciones S.A., Class A * | 459,877 | 130,075 | ||||||
568,072 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Almirall S.A. * | 6,537 | 107,203 | ||||||
Grifols S.A. | 3,520 | 143,736 | ||||||
250,939 | ||||||||
Software & Services 0.1% | ||||||||
Indra Sistemas S.A. | 23,472 | 259,304 | ||||||
5,401,648 | ||||||||
Sweden 2.1% | ||||||||
Capital Goods 0.4% | ||||||||
B&B Tools AB, B Shares | 2,731 | 51,199 | ||||||
Haldex AB | 9,546 | 117,157 | ||||||
Indutrade AB | 3,066 | 123,810 | ||||||
Lindab International AB * | 11,045 | 101,548 | ||||||
Nibe Industrier AB, B Shares | 4,830 | 128,209 | ||||||
Peab AB | 49,389 | 335,305 | ||||||
Saab AB, Class B | 9,623 | 259,890 | ||||||
1,117,118 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
AF AB, B Shares | 2,785 | 42,206 | ||||||
Intrum Justitia AB | 5,309 | 158,111 | ||||||
Loomis AB, Class B | 9,167 | 252,542 | ||||||
452,859 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
JM AB | 10,472 | 338,479 | ||||||
Nobia AB | 15,030 | 122,126 | ||||||
460,605 | ||||||||
Consumer Services 0.0% | ||||||||
Betsson AB * | 1,610 | 56,885 | ||||||
Diversified Financials 0.2% | ||||||||
LE Lundbergfortagen AB | 4,306 | 181,094 | ||||||
Ratos AB, B Shares | 48,595 | 326,149 | ||||||
507,243 | ||||||||
Energy 0.1% | ||||||||
Lundin Petroleum AB * | 10,336 | 146,095 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Axfood AB | 3,644 | 224,291 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
AAK AB | 2,058 | 111,621 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Elekta AB, B Shares | 19,517 | 200,145 | ||||||
Materials 0.2% | ||||||||
BillerudKorsnas AB | 14,354 | 209,364 | ||||||
Hexpol AB | 1,549 | 137,237 | ||||||
Holmen AB, B Shares | 10,882 | 360,168 | ||||||
706,769 | ||||||||
Media 0.1% | ||||||||
Eniro AB *(a) | 29,061 | 31,878 | ||||||
Modern Times Group MTG AB, B Shares | 8,623 | 266,589 | ||||||
298,467 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Meda AB, A Shares | 25,456 | 333,374 | ||||||
Real Estate 0.2% | ||||||||
Castellum AB | 10,642 | 163,197 | ||||||
Fabege AB | 11,508 | 147,724 | ||||||
Kungsleden AB | 19,307 | 120,440 | ||||||
431,361 | ||||||||
Retailing 0.1% | ||||||||
Bilia AB, A Shares | 5,704 | 161,917 | ||||||
Clas Ohlson AB, B Shares | 5,098 | 88,026 | ||||||
249,943 |
See financial notes 47
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Hexagon AB, B Shares | 10,729 | 362,056 | ||||||
Transportation 0.0% | ||||||||
SAS AB *(a) | 88,134 | 135,642 | ||||||
�� | ||||||||
5,794,474 | ||||||||
Switzerland 3.0% | ||||||||
Banks 0.1% | ||||||||
Banque Cantonale Vaudoise - Reg’d | 301 | 161,210 | ||||||
Valiant Holding AG - Reg’d | 1,691 | 147,895 | ||||||
309,105 | ||||||||
Capital Goods 0.6% | ||||||||
AFG Arbonia-Forster Holding AG - Reg’d * | 4,307 | 104,972 | ||||||
Belimo Holding AG - Reg’d | 40 | 99,277 | ||||||
Bucher Industries AG - Reg’d | 641 | 162,822 | ||||||
Daetwyler Holding AG | 681 | 86,340 | ||||||
Georg Fischer AG - Reg’d * | 634 | 366,182 | ||||||
Implenia AG - Reg’d * | 1,934 | 104,272 | ||||||
Meyer Burger Technology AG *(a) | 10,936 | 92,252 | ||||||
OC Oerlikon Corp. AG - Reg’d * | 14,956 | 189,239 | ||||||
Rieter Holding AG - Reg’d * | 568 | 104,894 | ||||||
Sulzer AG - Reg’d | 3,301 | 376,245 | ||||||
1,686,495 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
DKSH Holding Ltd. | 2,907 | 214,942 | ||||||
Gategroup Holding AG * | 6,502 | 146,512 | ||||||
Kaba Holding AG - Reg’d, Series B * | 329 | 156,858 | ||||||
518,312 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Forbo Holding AG - Reg’d * | 150 | 155,667 | ||||||
Consumer Services 0.1% | ||||||||
Kuoni Reisen Holding AG - Reg’d, Series B * | 773 | 210,737 | ||||||
Diversified Financials 0.4% | ||||||||
GAM Holding AG * | 19,351 | 330,474 | ||||||
Julius Baer Group Ltd. * | 10,115 | 443,419 | ||||||
Partners Group Holding AG | 677 | 180,157 | ||||||
954,050 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Barry Callebaut AG - Reg’d * | 166 | 174,229 | ||||||
Emmi AG - Reg’d * | 464 | 164,004 | ||||||
338,233 | ||||||||
Health Care Equipment & Services 0.3% | ||||||||
Nobel Biocare Holding AG - Reg’d * | 15,824 | 280,258 | ||||||
Sonova Holding AG - Reg’d | 2,270 | 353,963 | ||||||
Straumann Holding AG - Reg’d | 551 | 135,659 | ||||||
769,880 | ||||||||
Insurance 0.1% | ||||||||
Helvetia Holding AG - Reg’d | 633 | 301,001 | ||||||
Materials 0.2% | ||||||||
EMS-Chemie Holding AG - Reg’d | 557 | 200,593 | ||||||
Ferrexpo plc | 24,074 | 32,407 | ||||||
Schmolz & Bickenbach AG - Reg’d * | 178,200 | 215,187 | ||||||
448,187 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Actelion Ltd. - Reg’d * | 4,314 | 513,776 | ||||||
Galenica AG - Reg’d | 357 | 305,496 | ||||||
819,272 | ||||||||
Real Estate 0.1% | ||||||||
Allreal Holding AG - Reg’d * | 875 | 115,822 | ||||||
Swiss Prime Site AG - Reg’d * | 2,528 | 192,196 | ||||||
308,018 | ||||||||
Retailing 0.1% | ||||||||
Dufry AG - Reg’d * | 1,303 | 187,854 | ||||||
Valora Holding AG - Reg’d * | 913 | 189,108 | ||||||
376,962 | ||||||||
Software & Services 0.0% | ||||||||
Temenos Group AG - Reg’d * | 3,247 | 113,364 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Kudelski S.A. - BR | 2,693 | 34,346 | ||||||
Logitech International S.A. - Reg’d * | 24,307 | 344,133 | ||||||
378,479 | ||||||||
Transportation 0.2% | ||||||||
Flughafen Zuerich AG - Reg’d | 323 | 205,821 | ||||||
Panalpina Welttransport Holding AG - Reg’d | 2,263 | 293,154 | ||||||
498,975 | ||||||||
Utilities 0.0% | ||||||||
Alpiq Holding AG - Reg’d * | 573 | 57,619 | ||||||
8,244,356 | ||||||||
United Kingdom 12.9% | ||||||||
Banks 0.0% | ||||||||
The Paragon Group of Cos. plc | 16,633 | 96,346 | ||||||
Capital Goods 1.7% | ||||||||
Ashtead Group plc | 28,050 | 469,956 | ||||||
Bodycote plc | 23,511 | 235,314 | ||||||
Brammer plc | 6,044 | 31,351 | ||||||
Chemring Group plc | 55,862 | 218,018 | ||||||
Fenner plc | 26,182 | 129,001 | ||||||
Galliford Try plc | 12,420 | 243,078 | ||||||
HellermannTyton Group plc | 9,281 | 45,294 | ||||||
Interserve plc | 25,479 | 258,681 | ||||||
Keller Group plc | 15,550 | 207,774 | ||||||
Kier Group plc | 7,426 | 177,099 | ||||||
Lavendon Group plc | 32,867 | 96,217 | ||||||
Melrose Industries plc | 73,597 | 302,490 | ||||||
Morgan Advanced Materials plc | 44,864 | 202,747 | ||||||
Morgan Sindall Group plc | 15,375 | 169,238 | ||||||
QinetiQ Group plc | 115,716 | 375,047 | ||||||
Rotork plc | 4,893 | 200,571 | ||||||
Senior plc | 37,911 | 162,740 | ||||||
Speedy Hire plc | 139,900 | 138,755 |
48 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Spirax-Sarco Engineering plc | 6,030 | 275,532 | ||||||
Ultra Electronics Holdings plc | 7,027 | 196,512 | ||||||
Vesuvius plc | 62,473 | 426,528 | ||||||
4,561,943 | ||||||||
Commercial & Professional Supplies 1.1% | ||||||||
Berendsen plc | 26,636 | 431,319 | ||||||
Cape plc | 31,084 | 134,470 | ||||||
De La Rue plc | 27,960 | 234,128 | ||||||
HomeServe plc | 38,555 | 213,023 | ||||||
Intertek Group plc | 9,259 | 403,564 | ||||||
Mears Group plc | 13,933 | 98,441 | ||||||
Michael Page International plc | 44,677 | 278,564 | ||||||
Mitie Group plc | 67,775 | 326,997 | ||||||
PayPoint plc | 2,499 | 34,440 | ||||||
Rentokil Initial plc | 204,708 | 403,711 | ||||||
RPS Group plc | 34,436 | 129,125 | ||||||
Shanks Group plc | 104,237 | 162,354 | ||||||
WS Atkins plc | 9,924 | 215,758 | ||||||
3,065,894 | ||||||||
Consumer Durables & Apparel 0.6% | ||||||||
Bellway plc | 14,694 | 412,183 | ||||||
Berkeley Group Holdings plc | 7,028 | 257,023 | ||||||
Bovis Homes Group plc | 9,890 | 133,567 | ||||||
Crest Nicholson Holdings plc | 9,170 | 49,320 | ||||||
Guinness Peat Group plc * | 490,466 | 198,806 | ||||||
Persimmon plc * | 26,969 | 633,372 | ||||||
The Vitec Group plc | 4,680 | 45,425 | ||||||
1,729,696 | ||||||||
Consumer Services 1.0% | ||||||||
Betfair Group plc | 7,725 | 149,528 | ||||||
Bwin.Party Digital Entertainment plc | 26,067 | 37,472 | ||||||
Dignity plc | 2,023 | 50,808 | ||||||
Enterprise Inns plc * | 203,407 | 416,726 | ||||||
Greene King plc | 30,126 | 387,313 | ||||||
J.D. Wetherspoon plc | 14,194 | 191,299 | ||||||
Ladbrokes plc | 201,448 | 381,555 | ||||||
Marston’s plc | 121,932 | 294,142 | ||||||
Merlin Entertainments plc | 7,495 | 42,382 | ||||||
Mitchells & Butlers plc * | 47,543 | 289,384 | ||||||
Spirit Pub Co. plc | 124,125 | 210,973 | ||||||
The Restaurant Group plc | 17,810 | 192,962 | ||||||
2,644,544 | ||||||||
Diversified Financials 1.5% | ||||||||
Aberdeen Asset Management plc | 46,179 | 321,157 | ||||||
Ashmore Group plc (a) | 33,598 | 171,565 | ||||||
Brewin Dolphin Holdings plc | 9,039 | 41,051 | ||||||
Close Brothers Group plc | 12,259 | 287,683 | ||||||
Hargreaves Lansdown plc | 2,607 | 41,541 | ||||||
Henderson Group plc | 87,994 | 296,336 | ||||||
IG Group Holdings plc | 36,340 | 350,225 | ||||||
Intermediate Capital Group plc | 43,463 | 285,712 | ||||||
International Personal Finance plc | 27,224 | 212,343 | ||||||
Investec plc | 54,984 | 504,174 | ||||||
Jupiter Fund Management plc | 27,203 | 156,003 | ||||||
London Stock Exchange Group plc | 14,992 | 484,143 | ||||||
Provident Financial plc | 13,702 | 465,955 | ||||||
Schroders plc | 6,758 | 261,348 | ||||||
Tullett Prebon plc | 43,957 | 199,906 | ||||||
4,079,142 | ||||||||
Energy 0.2% | ||||||||
Afren plc * | 41,403 | 51,048 | ||||||
EnQuest plc * | 96,156 | 106,939 | ||||||
Hargreaves Services plc | 7,671 | 80,377 | ||||||
Hunting plc | 14,307 | 168,523 | ||||||
Premier Oil plc | 44,101 | 182,106 | ||||||
588,993 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Greggs plc | 31,241 | 303,031 | ||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Britvic plc | 17,779 | 193,844 | ||||||
Cranswick plc | 10,468 | 237,670 | ||||||
Dairy Crest Group plc | 40,674 | 271,706 | ||||||
Devro plc | 10,795 | 47,144 | ||||||
Greencore Group plc | 35,421 | 148,627 | ||||||
Premier Foods plc * | 201,656 | 106,444 | ||||||
1,005,435 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Synergy Health plc | 5,628 | 168,340 | ||||||
Household & Personal Products 0.1% | ||||||||
PZ Cussons plc | 33,723 | 200,021 | ||||||
Insurance 0.9% | ||||||||
Admiral Group plc | 19,677 | 421,032 | ||||||
Beazley plc | 50,372 | 211,573 | ||||||
Catlin Group Ltd. | 54,796 | 470,740 | ||||||
Hiscox Ltd. | 37,840 | 412,712 | ||||||
Jardine Lloyd Thompson Group plc | 9,597 | 146,231 | ||||||
Lancashire Holdings Ltd. | 40,960 | 439,042 | ||||||
Phoenix Group Holdings | 34,358 | 414,852 | ||||||
St. James’s Place plc | 5,930 | 70,907 | ||||||
2,587,089 | ||||||||
Materials 0.9% | ||||||||
African Barrick Gold plc | 33,888 | 111,674 | ||||||
Alent plc | 25,983 | 140,490 | ||||||
Croda International plc | 9,439 | 347,037 | ||||||
DS Smith plc | 94,433 | 401,081 | ||||||
Elementis plc | 36,485 | 154,520 | ||||||
Essentra plc | 12,579 | 138,497 | ||||||
Evraz plc | 299,042 | 619,913 | ||||||
Polyus Gold International Ltd. * | 14,453 | 43,235 | ||||||
Randgold Resources Ltd. | 3,528 | 206,488 | ||||||
RPC Group plc | 20,060 | 175,208 | ||||||
Synthomer plc | 25,651 | 83,422 | ||||||
Victrex plc | 4,710 | 127,942 | ||||||
2,549,507 | ||||||||
Media 0.3% | ||||||||
Daily Mail & General Trust plc | 12,168 | 153,967 | ||||||
Trinity Mirror plc * | 101,031 | 265,056 | ||||||
UBM plc | 37,414 | 341,041 | ||||||
760,064 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Genus plc | 5,199 | 102,418 |
See financial notes 49
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hikma Pharmaceuticals plc | 5,072 | 153,836 | ||||||
256,254 | ||||||||
Real Estate 0.8% | ||||||||
Derwent London plc | 3,241 | 154,199 | ||||||
Hammerson plc | 50,607 | 497,163 | ||||||
Intu Properties plc | 66,579 | 363,203 | ||||||
Mapeley Ltd. *(b)(c) | 2,199 | — | ||||||
Savills plc | 15,568 | 160,383 | ||||||
Segro plc | 72,133 | 439,455 | ||||||
Shaftesbury plc | 3,917 | 44,873 | ||||||
The British Land Co., plc | 48,987 | 572,007 | ||||||
2,231,283 | ||||||||
Retailing 1.0% | ||||||||
Debenhams plc | 377,712 | 392,163 | ||||||
Dixons Carphone plc | 150,045 | 952,752 | ||||||
Dunelm Group plc | 3,224 | 43,503 | ||||||
Halfords Group plc | 44,053 | 349,704 | ||||||
Howden Joinery Group plc | 25,304 | 138,834 | ||||||
John Menzies plc | 12,301 | 97,455 | ||||||
Lookers plc | 65,637 | 145,687 | ||||||
N Brown Group plc | 18,670 | 100,502 | ||||||
Pendragon plc | 301,467 | 151,911 | ||||||
Sports Direct International plc * | 11,177 | 115,441 | ||||||
WH Smith plc | 20,688 | 373,517 | ||||||
2,861,469 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ARM Holdings plc | 19,218 | 272,076 | ||||||
CSR plc | 15,312 | 205,782 | ||||||
477,858 | ||||||||
Software & Services 0.2% | ||||||||
AVEVA Group plc | 3,075 | 75,557 | ||||||
Fidessa Group plc | 3,149 | 117,927 | ||||||
Micro Focus International plc | 13,316 | 212,140 | ||||||
Moneysupermarket.com Group plc | 15,823 | 50,831 | ||||||
Playtech plc | 4,861 | 55,058 | ||||||
Telecity Group plc | 3,697 | 45,654 | ||||||
Xchanging plc | 46,903 | 142,211 | ||||||
699,378 | ||||||||
Technology Hardware & Equipment 0.6% | ||||||||
Domino Printing Sciences plc | 11,693 | 112,793 | ||||||
Electrocomponents plc | 82,753 | 304,297 | ||||||
Halma plc | 25,980 | 259,226 | ||||||
Laird plc | 45,243 | 228,364 | ||||||
Pace plc | 32,533 | 180,865 | ||||||
Premier Farnell plc | 59,250 | 179,954 | ||||||
Spectris plc | 9,380 | 270,931 | ||||||
Spirent Communications plc | 122,272 | 146,214 | ||||||
TT Electronics plc | 40,536 | 108,690 | ||||||
1,791,334 | ||||||||
Telecommunication Services 0.2% | ||||||||
Jazztel plc * | 3,340 | 53,398 | ||||||
KCOM Group plc | 81,278 | 121,014 | ||||||
TalkTalk Telecom Group plc | 64,563 | 310,740 | ||||||
485,152 | ||||||||
Transportation 0.9% | ||||||||
BBA Aviation plc | 68,857 | 389,783 | ||||||
easyJet plc | 16,218 | 389,702 | ||||||
Go-Ahead Group plc | 7,232 | 284,744 | ||||||
National Express Group plc | 114,447 | 456,954 | ||||||
Northgate plc | 41,990 | 329,391 | ||||||
Royal Mail plc | 23,869 | 168,919 | ||||||
Stagecoach Group plc | 40,507 | 251,078 | ||||||
Stobart Group Ltd. | 51,595 | 81,918 | ||||||
Stolt-Nielsen Ltd. | 6,013 | 108,315 | ||||||
2,460,804 | ||||||||
35,603,577 | ||||||||
Total Common Stock | ||||||||
(Cost $254,199,293) | 270,207,475 | |||||||
Preferred Stock 0.5% of net assets | ||||||||
Germany 0.3% | ||||||||
Automobiles & Components 0.1% | ||||||||
Porsche Automobil Holding SE | 4,246 | 348,649 | ||||||
Capital Goods 0.0% | ||||||||
Jungheinrich AG | 2,388 | 135,006 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Draegerwerk AG & Co. KGaA | 1,437 | 140,135 | ||||||
Materials 0.1% | ||||||||
Fuchs Petrolub SE | 6,155 | 239,729 | ||||||
863,519 | ||||||||
Italy 0.1% | ||||||||
Capital Goods 0.0% | ||||||||
Danieli S.p.A. - Officine Meccaniche Danieli & C. - RSP | 4,539 | 81,908 | ||||||
Insurance 0.1% | ||||||||
Unipol Gruppo Finanziario S.p.A. | 33,762 | 150,437 | ||||||
232,345 | ||||||||
Spain 0.1% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Grifols S.A., Class B | 2,992 | 105,313 | ||||||
Sweden 0.0% | ||||||||
Transportation 0.0% | ||||||||
SAS AB | 1,675 | 94,122 | ||||||
Total Preferred Stock | ||||||||
(Cost $1,230,970) | 1,295,299 | |||||||
Other Investment Companies 3.0% of net assets | ||||||||
United States 3.0% | ||||||||
Equity Fund 0.7% | ||||||||
iShares MSCI EAFE Small Cap ETF | 40,000 | 1,941,600 |
50 See financial notes
Table of Contents
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Securities Lending Collateral 2.3% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 6,372,293 | 6,372,293 | ||||||
Total Other Investment Companies | ||||||||
(Cost $8,233,674) | 8,313,893 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 0.2% of net assets | ||||||||
Time Deposits 0.2% | ||||||||
Brown Brothers Harriman | ||||||||
Hong Kong Dollar | ||||||||
0.01%, 11/03/14 | 51,288 | 6,613 | ||||||
Japanese Yen | ||||||||
0.01%, 11/03/14 | 334,459 | 2,978 | ||||||
Singapore Dollar | ||||||||
0.01%, 11/03/14 | 1,795 | 1,397 | ||||||
Swedish Krona | ||||||||
0.01%, 11/03/14 | 75,460 | 10,219 | ||||||
Pound Sterling | ||||||||
0.09%, 11/03/14 | 5,143 | 8,227 | ||||||
Canadian Dollar | ||||||||
0.34%, 11/03/14 | 20,887 | 18,532 | ||||||
Norwegian Krone | ||||||||
0.34%, 11/03/14 | 126,751 | 18,792 | ||||||
Australian Dollar | ||||||||
1.55%, 11/03/14 | 11,199 | 9,855 | ||||||
DNB | ||||||||
US Dollar | ||||||||
0.03%, 11/03/14 | 404,343 | 404,343 | ||||||
Wells Fargo | ||||||||
Euro | ||||||||
(0.11)%, 11/03/14 | 25,973 | 32,548 | ||||||
513,504 | ||||||||
U.S. Treasury Obligations 0.0% | ||||||||
U.S. Treasury Bills | ||||||||
0.00%, 12/18/14 (d)(e) | 2,000 | 2,000 | ||||||
0.01%, 12/18/14 (d)(e) | 5,000 | 5,000 | ||||||
7,000 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $520,504) | 520,504 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $267,827,595 and the unrealized appreciation and depreciation were $27,972,860 and ($15,463,284), respectively, with a net unrealized appreciation of $12,509,576.
At 10/31/14, the values of certain foreign securities held by the fund aggregating $ 232,329,396 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial 2(a) for additional information)
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Securities on loan were valued at $6,049,729. | |
(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 $2,970 or 0.0% of net assets. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt | |
CDI — | CHESS Depositary Interest | |
CVA — | Dutch Certificate | |
ETF — | Exchange Traded Fund | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
SDR — | Swedish Depositary Receipt |
In addition to the above the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI EAFE, e-mini, Long, expires 12/19/14 | 1 | 91,800 | 4,234 |
See financial notes 51
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of October 31, 2014
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
89 | .6% | Common Stock | 308,489,784 | 309,766,041 | ||||||||
9 | .5% | Preferred Stock | 44,495,548 | 32,716,863 | ||||||||
0 | .1% | Other Investment Companies | 473,712 | 474,165 | ||||||||
0 | .5% | Short-Term Investments | 1,733,677 | 1,733,677 | ||||||||
99 | .7% | Total Investments | 355,192,721 | 344,690,746 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 932,964 | |||||||||
100 | .0% | Net Assets | 345,623,710 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 89.6% of net assets | ||||||||
Brazil 6.0% | ||||||||
Banks 1.2% | ||||||||
Banco Bradesco S.A. | 92,802 | 1,366,936 | ||||||
Banco do Brasil S.A. | 195,908 | 2,192,392 | ||||||
Itau Unibanco Holding S.A. | 36,027 | 475,436 | ||||||
4,034,764 | ||||||||
Capital Goods 0.2% | ||||||||
Embraer S.A. | 67,999 | 656,943 | ||||||
Diversified Financials 0.1% | ||||||||
BM&F Bovespa S.A. | 106,776 | 469,696 | ||||||
Energy 1.7% | ||||||||
Cosan Ltd., Class A | 35,000 | 370,650 | ||||||
Petroleo Brasileiro S.A. | 769,058 | 4,546,874 | ||||||
Ultrapar Participacoes S.A. | 48,714 | 1,062,590 | ||||||
5,980,114 | ||||||||
Food, Beverage & Tobacco 0.8% | ||||||||
AMBEV S.A. | 168,378 | 1,114,729 | ||||||
BRF S.A. | 30,945 | 806,069 | ||||||
JBS S.A. | 172,236 | 768,073 | ||||||
2,688,871 | ||||||||
Materials 1.2% | ||||||||
Companhia Siderurgica Nacional S.A. | 237,756 | 789,840 | ||||||
Usinas Siderurgicas de Minas Gerais S.A. * | 48,439 | 129,020 | ||||||
Vale S.A. | 318,979 | 3,218,239 | ||||||
4,137,099 | ||||||||
Software & Services 0.1% | ||||||||
Cielo S.A. | 29,910 | 490,777 | ||||||
Telecommunication Services 0.2% | ||||||||
Oi S.A. * | 164,221 | 90,796 | ||||||
Tim Participacoes S.A. | 94,985 | 516,343 | ||||||
607,139 | ||||||||
Transportation 0.1% | ||||||||
CCR S.A. | 33,100 | 246,401 | ||||||
Utilities 0.4% | ||||||||
Centrais Eletricas Brasileiras S.A. | 185,416 | 465,429 | ||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 54,976 | 430,264 | ||||||
CPFL Energia S.A. | 57,644 | 432,696 | ||||||
1,328,389 | ||||||||
20,640,193 | ||||||||
Chile 1.0% | ||||||||
Banks 0.1% | ||||||||
Banco Santander Chile | 6,301,544 | 335,107 | ||||||
Energy 0.2% | ||||||||
Empresas Copec S.A. | 59,545 | 723,342 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Cencosud S.A. | 148,330 | 421,697 | ||||||
Transportation 0.1% | ||||||||
Latam Airlines Group S.A. * | 18,200 | 219,548 | ||||||
Utilities 0.5% | ||||||||
Empresa Nacional de Electricidad S.A. | 338,179 | 529,126 | ||||||
Enersis S.A. | 3,529,771 | 1,128,150 | ||||||
1,657,276 | ||||||||
3,356,970 | ||||||||
China 16.3% | ||||||||
Automobiles & Components 0.2% | ||||||||
Dongfeng Motor Group Co., Ltd., Class H | 346,000 | 535,074 | ||||||
Banks 6.1% | ||||||||
Agricultural Bank of China Ltd., Class H | 2,365,600 | 1,099,278 | ||||||
Bank of China Ltd., Class H | 9,758,234 | 4,670,788 | ||||||
Bank of Communications Co., Ltd., Class H | 804,000 | 602,846 | ||||||
BOC Hong Kong (Holdings) Ltd. | 240,500 | 800,602 | ||||||
China CITIC Bank Corp. Ltd., Class H | 579,000 | 377,189 | ||||||
China Construction Bank Corp., Class H | 9,379,000 | 6,997,662 | ||||||
China Merchants Bank Co., Ltd., Class H | 299,350 | 554,763 | ||||||
China Minsheng Banking Corp., Ltd., Class H | 377,000 | 378,244 | ||||||
Industrial & Commercial Bank of China Ltd., Class H | 8,192,172 | 5,439,274 | ||||||
20,920,646 |
52 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 0.6% | ||||||||
China Communications Construction Co., Ltd., Class H | 879,000 | 674,793 | ||||||
China Railway Construction Corp., Ltd., Class H | 421,000 | 442,300 | ||||||
China Railway Group Ltd., Class H | 905,000 | 558,297 | ||||||
CITIC Ltd. | 225,000 | 394,239 | ||||||
2,069,629 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Yue Yuen Industrial Holdings Ltd. | 112,500 | 377,661 | ||||||
Energy 4.2% | ||||||||
China Coal Energy Co., Ltd., Class H (c) | 764,000 | 468,036 | ||||||
China Petroleum & Chemical Corp., Class H | 6,183,400 | 5,362,315 | ||||||
China Shenhua Energy Co., Ltd., Class H | 470,000 | 1,324,712 | ||||||
CNOOC Ltd. | 1,893,000 | 2,964,228 | ||||||
PetroChina Co., Ltd., Class H | 3,578,000 | 4,479,454 | ||||||
14,598,745 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
China Resources Enterprise Ltd. | 146,000 | 347,260 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
China Mengniu Dairy Co., Ltd. | 69,000 | 304,787 | ||||||
Insurance 0.6% | ||||||||
China Life Insurance Co., Ltd., Class H | 390,000 | 1,163,749 | ||||||
China Pacific Insurance Group Co., Ltd., Class H | 108,600 | 406,398 | ||||||
Ping An Insurance (Group) Co. of China Ltd., Class H | 70,500 | 576,318 | ||||||
2,146,465 | ||||||||
Materials 0.2% | ||||||||
China National Building Material Co., Ltd., Class H | 390,000 | 361,594 | ||||||
Jiangxi Copper Co., Ltd., Class H | 227,000 | 403,215 | ||||||
764,809 | ||||||||
Real Estate 0.2% | ||||||||
China Overseas Land & Investment Ltd. | 194,000 | 562,878 | ||||||
Retailing 0.3% | ||||||||
Belle International Holdings Ltd. | 446,000 | 567,546 | ||||||
GOME Electrical Appliances Holding Ltd. | 2,364,000 | 372,438 | ||||||
939,984 | ||||||||
Software & Services 0.1% | ||||||||
Tencent Holdings Ltd. | 30,000 | 482,168 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
Kingboard Chemical Holdings Ltd. | 140,000 | 275,821 | ||||||
Lenovo Group Ltd. | 404,000 | 595,498 | ||||||
871,319 | ||||||||
Telecommunication Services 3.2% | ||||||||
China Mobile Ltd. | 661,600 | 8,231,965 | ||||||
China Telecom Corp., Ltd., Class H | 2,600,000 | 1,657,383 | ||||||
China Unicom (Hong Kong) Ltd. | 781,056 | 1,173,548 | ||||||
11,062,896 | ||||||||
Utilities 0.1% | ||||||||
Huaneng Power International, Inc., Class H | 376,000 | 462,270 | ||||||
56,446,591 | ||||||||
Colombia 0.3% | ||||||||
Banks 0.1% | ||||||||
Bancolombia S.A. | 17,344 | 237,716 | ||||||
Energy 0.2% | ||||||||
Ecopetrol S.A. | 581,025 | 776,583 | ||||||
1,014,299 | ||||||||
Czech Republic 0.4% | ||||||||
Telecommunication Services 0.1% | ||||||||
O2 Czech Republic A/S | 34,903 | 389,928 | ||||||
Utilities 0.3% | ||||||||
CEZ A/S | 37,216 | 1,029,475 | ||||||
1,419,403 | ||||||||
Greece 0.5% | ||||||||
Consumer Services 0.3% | ||||||||
OPAP S.A. | 72,813 | 882,125 | ||||||
Telecommunication Services 0.1% | ||||||||
Hellenic Telecommunications Organization S.A. * | 46,123 | 520,940 | ||||||
Utilities 0.1% | ||||||||
Public Power Corp. S.A. * | 35,466 | 269,409 | ||||||
1,672,474 | ||||||||
Hungary 0.6% | ||||||||
Banks 0.2% | ||||||||
OTP Bank plc | 43,233 | 716,009 | ||||||
Energy 0.2% | ||||||||
MOL Hungarian Oil & Gas plc | 16,698 | 794,549 | ||||||
Telecommunication Services 0.2% | ||||||||
Magyar Telekom Telecommunications plc * | 344,079 | 476,204 | ||||||
1,986,762 | ||||||||
India 4.2% | ||||||||
Automobiles & Components 0.3% | ||||||||
Mahindra & Mahindra Ltd. | 20,975 | 446,002 | ||||||
Tata Motors Ltd. | 75,756 | 661,906 | ||||||
Tata Motors Ltd., Class A | 10,785 | 58,839 | ||||||
1,166,747 | ||||||||
Banks 0.7% | ||||||||
Housing Development Finance Corp., Ltd. | 48,184 | 867,828 | ||||||
ICICI Bank Ltd. | 31,227 | 829,362 |
See financial notes 53
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
State Bank of India | 17,150 | 754,771 | ||||||
2,451,961 | ||||||||
Energy 1.6% | ||||||||
Indian Oil Corp., Ltd. | 90,870 | 534,117 | ||||||
Oil & Natural Gas Corp., Ltd. | 253,112 | 1,656,510 | ||||||
Reliance Industries Ltd. | 203,869 | 3,308,833 | ||||||
5,499,460 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
ITC Ltd. | 67,575 | 390,744 | ||||||
Materials 0.4% | ||||||||
Hindalco Industries Ltd. | 233,664 | 621,458 | ||||||
Tata Steel Ltd. | 79,056 | 631,040 | ||||||
1,252,498 | ||||||||
Software & Services 0.7% | ||||||||
Infosys Ltd. | 26,150 | 1,733,499 | ||||||
Tata Consultancy Services Ltd. | 13,300 | 564,893 | ||||||
2,298,392 | ||||||||
Telecommunication Services 0.2% | ||||||||
Bharti Airtel Ltd. | 104,785 | 680,944 | ||||||
Utilities 0.2% | ||||||||
NTPC Ltd. | 270,949 | 661,734 | ||||||
14,402,480 | ||||||||
Indonesia 1.0% | ||||||||
Automobiles & Components 0.3% | ||||||||
PT Astra International Tbk | 1,689,900 | 947,545 | ||||||
Banks 0.4% | ||||||||
PT Bank Central Asia Tbk | 417,600 | 450,816 | ||||||
PT Bank Mandiri (Persero) Tbk | 492,200 | 422,728 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 546,900 | 501,177 | ||||||
1,374,721 | ||||||||
Telecommunication Services 0.3% | ||||||||
PT Telekomunikasi Indonesia (Persero) Tbk | 5,622,200 | 1,280,441 | ||||||
3,602,707 | ||||||||
Malaysia 2.1% | ||||||||
Banks 0.6% | ||||||||
CIMB Group Holdings Berhad | 289,900 | 572,448 | ||||||
Malayan Banking Berhad | 248,000 | 731,631 | ||||||
Public Bank Berhad | 124,100 | 699,495 | ||||||
2,003,574 | ||||||||
Capital Goods 0.3% | ||||||||
Sime Darby Berhad | 339,700 | 999,693 | ||||||
Consumer Services 0.1% | ||||||||
Genting Berhad | 164,900 | 488,873 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
IOI Corp. Berhad | 258,300 | 384,005 | ||||||
Materials 0.1% | ||||||||
Petronas Chemicals Group Berhad | 174,000 | 325,160 | ||||||
Telecommunication Services 0.6% | ||||||||
Axiata Group Berhad | 352,600 | 755,867 | ||||||
DiGi.com Berhad | 228,200 | 429,572 | ||||||
Maxis Berhad | 191,500 | 392,459 | ||||||
Telekom Malaysia Berhad | 245,600 | 537,606 | ||||||
2,115,504 | ||||||||
Utilities 0.3% | ||||||||
Tenaga Nasional Berhad | 243,500 | 989,282 | ||||||
7,306,091 | ||||||||
Mexico 3.6% | ||||||||
Banks 0.2% | ||||||||
Grupo Financiero Banorte S.A.B. de C.V., Class O | 70,400 | 451,637 | ||||||
Grupo Financiero Santander Mexico S.A.B. de C.V., Class B | 81,500 | 217,152 | ||||||
668,789 | ||||||||
Capital Goods 0.2% | ||||||||
Alfa S.A.B. de C.V., Class A | 185,100 | 589,818 | ||||||
Food & Staples Retailing 0.3% | ||||||||
Wal-Mart de Mexico S.A.B. de C.V., Series V | 450,637 | 1,041,740 | ||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Coca-Cola Femsa S.A.B. de C.V., Series L | 36,700 | 387,188 | ||||||
Fomento Economico Mexicano S.A.B. de C.V. | 121,350 | 1,167,159 | ||||||
Grupo Bimbo S.A.B. de C.V., Series A | 157,400 | 460,409 | ||||||
2,014,756 | ||||||||
Materials 0.8% | ||||||||
Cemex S.A.B. de C.V., Series CPO * | 1,515,865 | 1,867,498 | ||||||
Grupo Mexico S.A.B. de C.V., Series B | 288,497 | 991,275 | ||||||
2,858,773 | ||||||||
Media 0.3% | ||||||||
Grupo Televisa S.A.B., Series CPO | 159,517 | 1,152,823 | ||||||
Telecommunication Services 1.2% | ||||||||
America Movil S.A.B. de C.V., Series L | 3,440,800 | 4,198,076 | ||||||
12,524,775 | ||||||||
Peru 0.1% | ||||||||
Banks 0.1% | ||||||||
Credicorp Ltd. | 2,500 | 402,500 | ||||||
Philippines 0.2% | ||||||||
Telecommunication Services 0.2% | ||||||||
Philippine Long Distance Telephone Co. | 9,900 | 692,240 | ||||||
Poland 2.1% | ||||||||
Banks 0.3% | ||||||||
Bank Pekao S.A. | 7,678 | 401,854 |
54 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. | 65,310 | 726,468 | ||||||
1,128,322 | ||||||||
Energy 0.5% | ||||||||
Polski Koncern Naftowy Orlen S.A. | 133,942 | 1,668,676 | ||||||
Insurance 0.2% | ||||||||
Powszechny Zaklad Ubezpieczen S.A. | 4,877 | 731,745 | ||||||
Materials 0.5% | ||||||||
KGHM Polska Miedz S.A. | 42,757 | 1,649,067 | ||||||
Telecommunication Services 0.2% | ||||||||
Orange Polska S.A. | 281,579 | 843,732 | ||||||
Utilities 0.4% | ||||||||
PGE S.A. | 136,454 | 895,281 | ||||||
Tauron Polska Energia S.A. | 307,382 | 480,078 | ||||||
1,375,359 | ||||||||
7,396,901 | ||||||||
Republic of Korea 16.9% | ||||||||
Automobiles & Components 1.7% | ||||||||
Hyundai Mobis Co., Ltd. | 6,183 | 1,446,603 | ||||||
Hyundai Motor Co. | 17,692 | 2,807,394 | ||||||
Kia Motors Corp. | 32,845 | 1,595,362 | ||||||
5,849,359 | ||||||||
Banks 1.4% | ||||||||
Hana Financial Group, Inc. | 24,060 | 833,194 | ||||||
KB Financial Group, Inc. | 29,420 | 1,153,257 | ||||||
Shinhan Financial Group Co., Ltd. | 45,012 | 2,118,524 | ||||||
Woori Finance Holdings Co., Ltd. *(a)(b) | 46,684 | 519,813 | ||||||
4,624,788 | ||||||||
Capital Goods 2.7% | ||||||||
Daelim Industrial Co., Ltd. | 5,109 | 338,420 | ||||||
Daewoo Shipbuilding & Marine Engineering Co., Ltd. | 15,776 | 269,729 | ||||||
Doosan Heavy Industries & Construction Co., Ltd. | 11,180 | 245,656 | ||||||
Hyundai Engineering & Construction Co., Ltd. | 8,330 | 378,031 | ||||||
Hyundai Heavy Industries Co., Ltd. | 9,922 | 921,884 | ||||||
LG Corp. | 42,161 | 2,508,582 | ||||||
Samsung C&T Corp. | 18,330 | 1,239,968 | ||||||
Samsung Heavy Industries Co., Ltd. | 22,140 | 539,599 | ||||||
SK Holdings Co., Ltd. | 12,809 | 2,007,796 | ||||||
SK Networks Co., Ltd. * | 67,145 | 688,849 | ||||||
9,138,514 | ||||||||
Consumer Durables & Apparel 0.7% | ||||||||
LG Electronics, Inc. | 39,027 | 2,383,444 | ||||||
Energy 1.0% | ||||||||
GS Holdings Corp. | 23,624 | 913,839 | ||||||
S-Oil Corp. | 15,053 | 571,854 | ||||||
SK Innovation Co., Ltd. | 22,748 | 1,860,789 | ||||||
3,346,482 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
E-Mart Co., Ltd. | 2,500 | 463,872 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
KT&G Corp. | 11,452 | 1,013,991 | ||||||
Insurance 0.4% | ||||||||
Samsung Fire & Marine Insurance Co., Ltd. | 2,893 | 778,970 | ||||||
Samsung Life Insurance Co., Ltd. | 5,560 | 606,465 | ||||||
1,385,435 | ||||||||
Materials 2.2% | ||||||||
Hanwha Corp. | 22,318 | 571,841 | ||||||
Hyosung Corp. | 5,236 | 310,887 | ||||||
Hyundai Steel Co. | 9,829 | 626,441 | ||||||
LG Chem Ltd. | 5,872 | 1,100,501 | ||||||
Lotte Chemical Corp. | 2,500 | 339,066 | ||||||
OCI Co., Ltd. * | 2,082 | 179,712 | ||||||
POSCO | 15,300 | 4,419,207 | ||||||
7,547,655 | ||||||||
Retailing 0.1% | ||||||||
Lotte Shopping Co., Ltd. | 1,416 | 392,537 | ||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||
SK Hynix, Inc. * | 30,862 | 1,376,269 | ||||||
Software & Services 0.6% | ||||||||
NAVER Corp. | 612 | 433,065 | ||||||
SK C&C Co., Ltd. | 7,761 | 1,761,209 | ||||||
2,194,274 | ||||||||
Technology Hardware & Equipment 4.4% | ||||||||
LG Display Co., Ltd. * | 59,385 | 1,748,236 | ||||||
Samsung Electro-Mechanics Co., Ltd. | 6,800 | 310,122 | ||||||
Samsung Electronics Co., Ltd. | 10,721 | 12,502,213 | ||||||
Samsung SDI Co., Ltd. | 5,719 | 674,389 | ||||||
15,234,960 | ||||||||
Telecommunication Services 0.3% | ||||||||
KT Corp. | 18,357 | 565,571 | ||||||
LG Uplus Corp. | 51,661 | 531,280 | ||||||
1,096,851 | ||||||||
Utilities 0.6% | ||||||||
Korea Electric Power Corp. | 43,275 | 1,899,590 | ||||||
Korea Gas Corp. * | 6,461 | 302,900 | ||||||
2,202,490 | ||||||||
58,250,921 | ||||||||
Russia 11.4% | ||||||||
Banks 0.5% | ||||||||
Sberbank of Russia ADR | 214,003 | 1,629,620 | ||||||
VTB Bank OJSC * | 300,000,000 | 278,400 | ||||||
1,908,020 | ||||||||
Energy 8.9% | ||||||||
Bashneft OAO * | 2,000 | 61,660 | ||||||
Gazprom OAO | 864,000 | 2,842,485 | ||||||
Gazprom OAO ADR | 1,495,000 | 9,905,589 | ||||||
LUKOIL OAO * | 36,299 | 1,789,199 | ||||||
LUKOIL OAO ADR | 185,000 | 9,068,576 | ||||||
NovaTek OAO * | 67,090 | 689,536 | ||||||
Rosneft Oil Co. GDR - Reg’d | 163,200 | 908,307 |
See financial notes 55
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Surgutneftegas ADR | 577,500 | 3,809,780 | ||||||
Tatneft ADR | 47,100 | 1,683,489 | ||||||
30,758,621 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Magnit * | 1,900 | 525,689 | ||||||
Materials 0.9% | ||||||||
MMC Norilsk Nickel OJSC ADR | 117,700 | 2,196,184 | ||||||
Severstal OAO GDR - Reg’d | 66,510 | 704,489 | ||||||
Uralkali OJSC GDR - Reg’d | 18,732 | 335,149 | ||||||
3,235,822 | ||||||||
Telecommunication Services 0.6% | ||||||||
Mobile TeleSystems ADR | 89,851 | 1,284,869 | ||||||
Rostelecom * | 200,000 | 498,440 | ||||||
Sistema JSFC * | 788,800 | 292,520 | ||||||
2,075,829 | ||||||||
Transportation 0.2% | ||||||||
Aeroflot Russian Airlines * | 310,000 | 275,330 | ||||||
Globaltrans Investment plc GDR - Reg’d | 43,500 | 322,335 | ||||||
597,665 | ||||||||
Utilities 0.1% | ||||||||
Federal Hydrogenerating Co., ADR * | 24,000,000 | 386,688 | ||||||
Russian Grids OAO * | 1 | — | ||||||
386,688 | ||||||||
39,488,334 | ||||||||
South Africa 7.0% | ||||||||
Banks 0.8% | ||||||||
Barclays Africa Group Ltd. | 37,252 | 588,740 | ||||||
Nedbank Group Ltd. | 24,829 | 541,458 | ||||||
Standard Bank Group Ltd. | 135,867 | 1,710,942 | ||||||
2,841,140 | ||||||||
Capital Goods 0.7% | ||||||||
Aveng Ltd. * | 269,724 | 495,443 | ||||||
Barloworld Ltd. | 61,133 | 531,093 | ||||||
The Bidvest Group Ltd. | 47,416 | 1,304,968 | ||||||
2,331,504 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Steinhoff International Holdings Ltd. | 120,923 | 618,643 | ||||||
Diversified Financials 0.4% | ||||||||
African Bank Investments Ltd. (a)(b) | 319,000 | — | ||||||
FirstRand Ltd. | 247,668 | 1,060,842 | ||||||
Remgro Ltd. | 19,196 | 440,779 | ||||||
1,501,621 | ||||||||
Energy 1.2% | ||||||||
Sasol Ltd. | 81,822 | 4,085,798 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Shoprite Holdings Ltd. | 38,915 | 564,254 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Tiger Brands Ltd. | 18,807 | 566,069 | ||||||
Insurance 0.2% | ||||||||
Sanlam Ltd. | 133,494 | 843,554 | ||||||
Materials 0.9% | ||||||||
AngloGold Ashanti Ltd. * | 48,896 | 408,620 | ||||||
Gold Fields Ltd. | 274,179 | 889,065 | ||||||
Impala Platinum Holdings Ltd. * | 120,358 | 877,850 | ||||||
Kumba Iron Ore Ltd. | 18,254 | 458,068 | ||||||
Sappi Ltd. * | 133,945 | 530,508 | ||||||
3,164,111 | ||||||||
Media 0.2% | ||||||||
Naspers Ltd., N Shares | 6,645 | 828,825 | ||||||
Retailing 0.3% | ||||||||
Imperial Holdings Ltd. | 38,681 | 666,802 | ||||||
Woolworths Holdings Ltd. | 61,481 | 437,714 | ||||||
1,104,516 | ||||||||
Telecommunication Services 1.7% | ||||||||
MTN Group Ltd. | 190,981 | 4,228,901 | ||||||
Telkom SA SOC Ltd. * | 211,129 | 1,121,965 | ||||||
Vodacom Group Ltd. | 36,801 | 446,812 | ||||||
5,797,678 | ||||||||
24,247,713 | ||||||||
Taiwan 12.8% | ||||||||
Banks 0.4% | ||||||||
CTBC Financial Holding Co., Ltd. | 731,076 | 512,689 | ||||||
Mega Financial Holding Co., Ltd. | 611,404 | 507,097 | ||||||
Taishin Financial Holding Co., Ltd. | 787,122 | 375,484 | ||||||
1,395,270 | ||||||||
Capital Goods 0.3% | ||||||||
Far Eastern New Century Corp. | 603,879 | 635,005 | ||||||
Walsin Lihwa Corp. * | 1,324,000 | 439,554 | ||||||
1,074,559 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Pou Chen Corp. | 385,267 | 424,829 | ||||||
Diversified Financials 0.2% | ||||||||
Fubon Financial Holding Co., Ltd. | 436,674 | 739,255 | ||||||
Energy 0.2% | ||||||||
Formosa Petrochemical Corp. | 266,330 | 625,162 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Uni-President Enterprises Corp. | 390,229 | 670,994 | ||||||
Insurance 0.2% | ||||||||
Cathay Financial Holding Co., Ltd. | 302,599 | 498,794 | ||||||
Materials 1.8% | ||||||||
China Steel Corp. | 1,805,198 | 1,557,382 | ||||||
Formosa Chemicals & Fibre Corp. | 649,442 | 1,512,173 | ||||||
Formosa Plastics Corp. | 590,732 | 1,364,216 | ||||||
Nan Ya Plastics Corp. | 624,811 | 1,293,090 | ||||||
Taiwan Cement Corp. | 381,299 | 583,288 | ||||||
6,310,149 | ||||||||
Semiconductors & Semiconductor Equipment 2.9% | ||||||||
Advanced Semiconductor Engineering, Inc. | 563,094 | 679,291 | ||||||
MediaTek, Inc. | 74,138 | 1,058,910 | ||||||
Siliconware Precision Industries Co. | 430,270 | 613,786 |
56 See financial notes
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1,483,689 | 6,431,600 | ||||||
United Microelectronics Corp. | 2,367,965 | 1,051,374 | ||||||
9,834,961 | ||||||||
Technology Hardware & Equipment 5.8% | ||||||||
Acer, Inc. * | 1,671,496 | 1,148,634 | ||||||
Asustek Computer, Inc. | 175,041 | 1,787,200 | ||||||
AU Optronics Corp. | 3,924,800 | 1,870,447 | ||||||
Compal Electronics, Inc. | 1,969,305 | 1,455,546 | ||||||
Delta Electronics, Inc. | 124,025 | 744,050 | ||||||
Foxconn Technology Co., Ltd. | 160,650 | 428,642 | ||||||
Hon Hai Precision Industry Co., Ltd. | 1,766,416 | 5,590,701 | ||||||
HTC Corp. * | 350,473 | 1,551,848 | ||||||
Innolux Corp. | 1,714,357 | 783,454 | ||||||
Inventec Corp. | 597,639 | 415,846 | ||||||
Lite-On Technology Corp. | 432,855 | 607,476 | ||||||
Pegatron Corp. | 441,264 | 804,201 | ||||||
Quanta Computer, Inc. | 391,500 | 985,607 | ||||||
Synnex Technology International Corp. | 315,000 | 442,844 | ||||||
Wistron Corp. | 968,231 | 1,017,238 | ||||||
WPG Holdings Ltd. | 378,000 | 460,453 | ||||||
20,094,187 | ||||||||
Telecommunication Services 0.7% | ||||||||
Chunghwa Telecom Co., Ltd. | 521,906 | 1,592,351 | ||||||
Far EasTone Telecommunications Co., Ltd. | 187,622 | 415,221 | ||||||
Taiwan Mobile Co., Ltd. | 146,600 | 475,710 | ||||||
2,483,282 | ||||||||
44,151,442 | ||||||||
Thailand 1.4% | ||||||||
Banks 0.1% | ||||||||
The Siam Commercial Bank PCL | 69,400 | 378,216 | ||||||
Energy 0.9% | ||||||||
PTT Exploration & Production PCL | 133,000 | 598,234 | ||||||
PTT PCL | 194,187 | 2,194,069 | ||||||
Thai Oil PCL | 332,800 | 457,255 | ||||||
3,249,558 | ||||||||
Materials 0.2% | ||||||||
PTT Global Chemical PCL | 286,600 | 545,570 | ||||||
Telecommunication Services 0.2% | ||||||||
Advanced Info Service PCL - Reg’d | 82,975 | 608,874 | ||||||
4,782,218 | ||||||||
Turkey 1.7% | ||||||||
Banks 0.8% | ||||||||
Akbank T.A.S. | 172,751 | 623,794 | ||||||
Turkiye Garanti Bankasi A/S | 206,116 | 804,449 | ||||||
Turkiye Halk Bankasi A/S | 72,525 | 484,289 | ||||||
Turkiye Is Bankasi, Class C | 208,924 | 522,394 | ||||||
Turkiye Vakiflar Bankasi T.A.O., Class D | 185,813 | 399,341 | ||||||
2,834,267 | ||||||||
Capital Goods 0.2% | ||||||||
KOC Holding A/S | 160,761 | 819,531 | ||||||
Diversified Financials 0.2% | ||||||||
Haci Omer Sabanci Holding A/S | 113,093 | 515,915 | ||||||
Energy 0.2% | ||||||||
Tupras-Turkiye Petrol Rafinerileri A/S | 38,319 | 831,102 | ||||||
Telecommunication Services 0.3% | ||||||||
Turk Telekomunikasyon A/S | 109,500 | 314,540 | ||||||
Turkcell Iletisim Hizmetleri A/S * | 114,509 | 665,672 | ||||||
980,212 | ||||||||
5,981,027 | ||||||||
Total Common Stock | ||||||||
(Cost $308,489,784) | 309,766,041 | |||||||
Preferred Stock 9.5% of net assets | ||||||||
Brazil 7.6% | ||||||||
Banks 2.5% | ||||||||
Banco Bradesco S.A. | 204,767 | 3,084,024 | ||||||
Itau Unibanco Holding S.A. | 332,478 | 4,931,017 | ||||||
Itausa - Investimentos Itau S.A. | 153,022 | 610,754 | ||||||
8,625,795 | ||||||||
Energy 2.0% | ||||||||
Petroleo Brasileiro S.A. | 1,136,860 | 7,010,461 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Compania Brasileira de Distribuicao Grupo Pao de Acucar | 11,190 | 469,204 | ||||||
Materials 1.9% | ||||||||
Bradespar S.A. | 42,953 | 290,179 | ||||||
Gerdau S.A. | 263,426 | 1,179,873 | ||||||
Metalurgica Gerdau S.A. | 180,822 | 979,121 | ||||||
Usinas Siderurgicas de Minas Gerais S.A., Class A * | 118,605 | 272,831 | ||||||
Vale S.A. | 440,957 | 3,834,950 | ||||||
6,556,954 | ||||||||
Telecommunication Services 0.4% | ||||||||
Oi S.A. * | 519,860 | 272,738 | ||||||
Telefonica Brasil S.A. | 52,631 | 1,075,788 | ||||||
1,348,526 | ||||||||
Utilities 0.7% | ||||||||
Centrais Eletricas Brasileiras S.A., Class B | 144,904 | 548,529 | ||||||
Companhia Energetica de Minas Gerais | 182,173 | 1,046,177 | ||||||
Companhia Paranaense de Energia-Copel | 29,936 | 418,130 | ||||||
Eletropaulo Metropolitana S.A. | 134,400 | 375,441 | ||||||
2,388,277 | ||||||||
26,399,217 |
See financial notes 57
Table of Contents
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Colombia 0.1% | ||||||||
Banks 0.1% | ||||||||
Bancolombia S.A. | 28,509 | 400,719 | ||||||
Republic of Korea 0.8% | ||||||||
Automobiles & Components 0.2% | ||||||||
Hyundai Motor Co., Ltd. | 2,324 | 268,605 | ||||||
Hyundai Motor Co., Ltd. 2nd | 3,667 | 438,636 | ||||||
707,241 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
LG Electronics, Inc. | 5,975 | 194,658 | ||||||
Materials 0.0% | ||||||||
LG Chem Ltd. | 878 | 130,751 | ||||||
Technology Hardware & Equipment 0.5% | ||||||||
Samsung Electronics Co., Ltd. | 1,717 | 1,584,899 | ||||||
2,617,549 | ||||||||
Russia 1.0% | ||||||||
Energy 1.0% | ||||||||
AK Transneft OAO * | 1,196 | 2,613,611 | ||||||
Surgutneftegas * | 1,000,000 | 685,767 | ||||||
3,299,378 | ||||||||
Total Preferred Stock | ||||||||
(Cost $44,495,548) | 32,716,863 | |||||||
Other Investment Companies 0.1% of net assets | ||||||||
United States 0.1% | ||||||||
Equity Fund 0.0% | ||||||||
iShares MSCI Emerging Markets ETF | 100 | 4,215 | ||||||
Securities Lending Collateral 0.1% | ||||||||
Wells Fargo Advantage Government Money Market Fund, Institutional Class 0.01% (f) | 469,950 | 469,950 | ||||||
Total Other Investment Companies | ||||||||
(Cost $473,712) | 474,165 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Short-Term Investments 0.5% of net assets | ||||||||
Time Deposit 0.4% | ||||||||
DNB | ||||||||
0.03%, 11/03/14 | 1,496,681 | 1,496,681 | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/18/14 (d)(e) | 237,000 | 236,996 | ||||||
Total Short-Term Investments | ||||||||
(Cost $1,733,677) | 1,733,677 | |||||||
End of Investments. |
At 10/31/14, the tax basis cost of the fund’s investments was $363,303,514 and the unrealized appreciation and depreciation were $44,899,163 and ($63,511,931), respectively, with a net unrealized depreciation of ($18,612,768).
At 10/31/14, the values of certain foreign securities held by the fund aggregating $266,609,446 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(a) for additional information)
* | 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 $519,813 or 0.2% of net assets. | |
(c) | All or a portion of this security is on loan. Securities on loan were valued at $442,919. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. | |
(f) | The rate shown is the 7-day yield. |
ADR — | American Depositary Receipt | |
ETF — | Exchange Traded Fund | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered |
In addition to the above, the fund held the following at 10/31/14:
Contract | Unrealized | |||||||||||
Number of | Value | Appreciation | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
MSCI Emerging Markets, mini, Long, expires 12/19/14 | 40 | 2,027,200 | 56,924 |
58 See financial notes
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab S&P 500 Index Fund
Schwab Small-Cap Index Fund
Schwab Total Stock Market Index Fund
Schwab International Index Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund
Schwab Fundamental Emerging Markets Large Company Index Fund
Schwab S&P 500 Index Fund
Schwab Small-Cap Index Fund
Schwab Total Stock Market Index Fund
Schwab International Index Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund
Schwab Fundamental Emerging Markets Large Company Index Fund
In our opinion, the accompanying statements of assets and liabilities, including the condensed portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights (included in Item 1 of this Form N-CSR) and the portfolio holdings (included in Item 6 of this Form N-CSR) present fairly, in all material respects, the financial position 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 (nine of the funds constituting Schwab Capital Trust, hereafter referred to as the “Funds”) at October 31, 2014, 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 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, financial highlights and portfolio holdings (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, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
San Francisco, California
December 16, 2014
PricewaterhouseCoopers LLP
San Francisco, California
December 16, 2014
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. |
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. |
Table of Contents
(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: 12/15/14
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: 12/15/14
By: | /s/ George Pereira | |||
Principal Financial Officer |
Date: 12/15/14