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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)
101 Montgomery Street, San Francisco, California 94104
(Address of principal executive offices) (Zip code)
Randall W. Merk
Schwab Capital Trust
101 Montgomery Street, San Francisco, California 94104
Schwab Capital Trust
101 Montgomery Street, San Francisco, California 94104
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 627-7000
Date of fiscal year end: October 31
Date of reporting period: October 31, 2007
Item 1: Report(s) to Shareholders.
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Annual report dated October 31, 2007 enclosed.
Prospectus Supplement and
Annual Report Enclosed
Schwab MarketTrack Portfolios ®
All Equity Portfoliotm
Schwab MarketTrack
Growth Portfoliotm
Schwab MarketTrack
Balanced Portfoliotm
Schwab MarketTrack
Conservative Portfoliotm
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Table of Contents
Supplement to the February 28, 2007 Schwab MarketTrack Portfolios™ Prospectus
The information provided in this supplement is as of October 19, 2007.
Under the sections of the prospectus titled “Policy regarding short-term or excessive trading” and “Trade activity monitoring”, these are deleted and replaced with the following disclosure.
Policy regarding short-term or excessive trading. Each fund is intended for long-term investment and not for short-term or excessive trading (collectively “market timing”). Market timing may adversely impact a fund’s performance by disrupting the efficient management of the fund, increasing fund transaction costs and taxes, causing the fund to maintain higher cash balances, and diluting the value of the fund’s shares.
In order to discourage market timing, each fund’s Board of Trustees has adopted policies and procedures that are reasonably designed to reduce the risk of market timing by fund shareholders. Each fund seeks to deter market timing through several methods. These methods may include: fair value pricing, imposition of redemption fees and trade activity monitoring. Fair value pricing and redemption fees are discussed more thoroughly in the subsequent pages of this prospectus and are considered to be key elements of the funds policy regarding short term or excessive trading. Trade activity monitoring is risk based and seeks to identify patterns of activity in amounts that might be detrimental to a fund.
Although these methods are designed to discourage market timing, there can be no guarantee that the fund will be able to identify and restrict investors that engage in such activities. In addition, some of these methods are inherently subjective and involve judgment in their application. Each fund and its service providers seek to make these judgments and applications uniformly and in a manner that they believe is consistent with interests of the fund’s long-term shareholders. Each fund may amend these policies and procedures in response to changing regulatory requirements or to enhance the effectiveness of the program.
Trade Activity Monitoring. The fund or its service providers maintain risk-based surveillance procedures designed to detect market timing in fund shares in amounts that might be detrimental to a fund. Under these procedures, the funds have requested that service providers to the funds monitor transactional activity in amounts and frequency determined by the funds to be significant to a fund and in a pattern of activity that potentially could be detrimental to a fund. If a fund, in its sole discretion based on these or other factors, determines that a shareholder has engaged in market timing, it may refuse to process future purchases or exchanges into the fund by that shareholder. These procedures may be modified from time to time as appropriate to improve the detection of market timing and to comply with applicable laws.
If trades are effected through a financial intermediary, the fund or its service providers will work with the intermediary to monitor possible market timing activity. The funds reserve the right to contact the intermediary to provide certain shareholder transaction information and may require the intermediary to restrict the shareholder from future purchases or exchanges in the fund. Transactions by fund shareholders investing through intermediaries may also be subject to the restrictions of the intermediary’s own frequent trading policies, which may differ from those of the funds. The funds may defer to an intermediary’s frequent trading policies with respect to those shareholders who invest in the funds through such intermediary. The funds will defer to an intermediary’s policies only after the funds determine that the intermediary’s frequent trading policies are reasonably designed to deter transactional activity in amounts and frequency that are deemed to be significant to a fund and in a pattern of activity that potentially could be detrimental to the fund. Shareholders should consult with their intermediary to determine if additional frequent trading restrictions apply to their fund transactions.
The funds reserve the right to restrict, reject or cancel within a reasonable time, without prior notice, any purchase or exchange order for any reason.
Please retain this supplement for your records.
Charles Schwab & Co., Inc. Member SIPC
©2007 All Rights Reserved
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Schwab MarketTrack Portfolios ®
Annual Report
October 31, 2007
Schwab MarketTrack
All Equity Portfoliotm
Schwab MarketTrack
Growth Portfoliotm
Schwab MarketTrack
Balanced Portfoliotm
Schwab MarketTrack
Conservative Portfoliotm
Four portfolios that combine the power of
indexing with the benefits of asset allocation.
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EXHIBIT 99.CODEETH | ||||||||
EX-99.CERT | ||||||||
EXHIBIT 99.906CERT |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
The industry/sector classification of the funds’ portfolio holdings uses the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.
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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.schwab.com/schwabfunds.
Total Return for the Report Period | ||
Schwab MarketTrack All Equity Portfoliotm (Ticker Symbol: SWEGX) | 16.55% | |
Benchmark: All Equity Composite Index | 18.15% | |
Fund Category: Morningstar Large-Cap Blend | 15.22% | |
Performance Details | pages 6-7 | |
Schwab MarketTrack Growth Portfoliotm | ||
Investor Shares (Ticker Symbol: SWHGX) | 13.69% | |
P Shares (Ticker Symbol: SWPGX) | 13.83% | |
Benchmark: Growth Composite Index | 15.14% | |
Fund Category: Morningstar Large-Cap Blend | 15.22% | |
Performance Details | pages 8-9 | |
Schwab MarketTrack Balanced Portfoliotm (Ticker Symbol: SWBGX) | 11.38% | |
Benchmark: Balanced Composite Index | 12.66% | |
Fund Category: Morningstar Moderate Allocation | 12.19% | |
Performance Details | pages 10-11 | |
Schwab MarketTrack Conservative Portfoliotm | ||
Investor Shares (Ticker Symbol: SWCGX) | 9.12% | |
P Shares (Ticker Symbol: SWCPX) | 9.32% | |
Benchmark: Conservative Composite Index | 10.21% | |
Fund Category: Morningstar Conservative Allocation | 8.12% | |
Performance Details | pages 12-13 | |
Minimum Initial Investment1 | ||
Investor Shares | $ 100 | |
P Shares | $100,000 | |
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Portfolio expenses may have been partially absorbed by CSIM and Schwab. 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 portfolio distributions or the redemption of portfolio shares.
The All Equity Composite Index is composed of Morningstar category averages and is calculated using the following portion allocations: 45% large-cap stocks, 25% small-cap stocks and 30% foreign stocks. Source: Morningstar, Inc.
The Growth Composite Index is composed of Morningstar category averages and cash equivalents as represented by the 90-day T-bill and is calculated using the following portfolio allocations: 40% large-cap stocks, 20% small-cap stocks, 20% foreign stocks, 15% bonds and 5% cash. Source: Morningstar, Inc.
The Balanced Composite Index is composed of Morningstar category averages and cash equivalents as represented by the 90-day T-bill and is calculated using the following portfolio allocations: 30% large-cap stocks, 15% small-cap stocks, 15% foreign stocks, 35% bonds and 5% cash. Source: Morningstar, Inc.
The Conservative Composite Index is composed of Morningstar category averages and cash equivalents as represented by the 90-day T-bill and is calculated using the following portfolio allocations: 20% large-cap stocks, 10% small-cap stocks, 10% foreign stocks, 55% bonds and 5% cash. Source: Morningstar, Inc.
Source for category information: Morningstar, Inc.
1 | Please see prospectus for further detail and eligibility requirements. |
Schwab MarketTrack Portfolios 1
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From the Chairman
Charles Schwab
Chairman
Dear Shareholder,
I have been a fan of mutual funds throughout my long investing career. I say this because I firmly believe they are a cost-effective and convenient way for investors to achieve a diversified portfolio. And, as we face increasing uncertainty in global markets, diversification is as important now as it has ever been.
Research has indicated that spreading your money across, and equally important, within, different asset classes, such as stocks, bonds, and cash equivalents, can be the most important factor in determining overall portfolio performance. By maintaining diversification, your portfolio can be better positioned to help you weather the market ups and downs.
With a broad range of investment strategies and styles, Schwab Funds® provides an uncomplicated, effective way to build a well diversified portfolio. You can choose from an array of funds across a range of investment objectives and styles. If you prefer a single investment solution, we offer asset allocation funds based on either risk tolerance or time horizon.
Here at Schwab, our goal is to help you reach your financial goals. With quality funds and services, backed by the guidance and support you need—whatever type of investor you are—we can help you be financially fit today and in the future.
Thank you for investing with us.
Sincerely,
2 Schwab MarketTrack Portfolios
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From the President
Randall W. Merk is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report. He joined the firm in 2002 and has held a variety of executive positions at Schwab.
Dear Shareholder,
In returning to my role as President and CEO of Charles Schwab Investment Management, I would like to thank you for investing in Schwab Funds® and share my thoughts with you on the current market environment.
The reemergence of volatility during this past year has shaken financial markets, both domestically and globally. Subprime mortgage market issues have caused a chain reaction throughout equity and credit markets, and investors are undoubtedly concerned about their financial outlook in the near future. As riskier securities came under pressure during this past August’s market correction, investors fled to “safer haven” investments, such as U.S. Treasuries.
Attempting to time the market in this way can be both a frustrating and risky experience. We have always believed your best protection against swings in market volatility is to maintain a well-diversified investment portfolio that is built to provide long-term performance.
Thank you for entrusting us with your investments. I speak for all of us at Schwab when I say our goal is to give you the financial products, guidance, and personal relationship you need to be financially fit.
Sincerely,
Schwab MarketTrack Portfolios 3
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The Investment Environment
Caroline Lee, managing director and portfolio manager, co-manages the portfolios.
Larry Mano, managing director and portfolio manager is responsible for the day-to-day co-management of the equity portions of the portfolios.
During the past year, the global economy benefited from positive earnings growth, an ample supply of liquidity, and reasonably low volatility. Investors became increasingly bullish, and firms financed a record level of private equity buyouts, acquisitions, and stock buybacks. However, the housing market correction, and more recently, turmoil in the subprime mortgage market, has had a ripple effect throughout the U.S. and global economy. Several key issues continued to resonate with investors, including the deterioration of the housing market, the lagged effects of monetary policy, tightening of lending standards, and rising energy prices.
The U.S. economy grew at a sub-par pace during the early part of the report period, consistent with the Federal Reserve’s (the Fed’s) engineered soft landing. Throughout its statements, the Fed noted that the economy would grow at a more moderate rate as a result of prior rate increases, lagged effects of higher energy prices, and a cooling housing market. As any rate below 3% is generally considered to be sub-par, the economy appeared to be on a trend of underperformance. However, Gross Domestic Product (GDP) in the second and third quarter of 2007 surprised on the upside; 3.8% and an advanced 3.9%, respectively. Though consumer spending weighed heavily in recent improved GDP readings, tightening credit conditions and continued deterioration in the U.S. housing market remained imminent threats to household equity, a meaningful underpinning of consumer spending.
The housing market remained a significant headwind for U.S. economic growth during the report period. New- and existing-home sales trended downward, and inventories reached an alarming 10.5-month supply (existing homes) by September 2007. Initial concerns that troubles in the housing market would spill over to the rest of the economy became more pronounced, as declining housing starts and home sales caused builders and mortgage lenders to layoff thousands of employees. Delinquency rates on subprime mortgages and foreclosures on residential homes continued on an upward trend as well, further pushing back a recovery in an already weakened market.
The recent tightening of lending standards had a detrimental effect on economic growth as well. Though subprime mortgages were able to find their way into securitized structures via relaxed access to credit and ample liquidity, the increased frequency of defaults by subprime borrowers stressed securities holding these mortgages, leading to wider spreads and higher risk. Evidence that subprime issues had emerged became more pronounced after February’s spike in volatility, which only compounded throughout the report period. Liquidity in the
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
14.56% | S&P 500® Index: measures U.S. large-cap stocks |
9.27% | Russell 2000® Index: measures U.S. small-cap stocks |
24.91% | MSCI-EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East |
5.38% | Lehman Brothers U.S. Aggregate Bond Index: measures the U.S. bond market |
4.97% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Charles Schwab & Co., Inc.
4 Schwab MarketTrack Portfolios
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The Investment Environment continued
Matthew Hastings, CFA, managing director and portfolio manager, has day-to-day co-management responsibility for the bond portions of the portfolios.
Andrew Tikofsky, PhD, managing director and portfolio manager, has day-to-day co-management responsibility for the bond portions of the portfolio.
Steven Hung, managing director and portfolio manager, has day-to-day co-management responsibility for the bond portions of the portfolios.
market for these riskier securities essentially dried up after this recent summer’s market correction, putting financial institutions laden with subprime debt into financial turmoil. While the Fed helped improve liquidity issues at first by pumping money into the banking system and using the discount rate to reduce rates, many lenders reduced or cancelled altogether certain subprime lending programs.
Market volatility also had a significant impact on quantitative strategies in July and August of 2007. In a recent report by Lehman Brothers, it is believed that several large multi-strategy managers experienced significant losses in their fixed income portfolios. In order to raise cash to cover potential redemptions, and hesitant to price their now lower-valued portfolios, money managers sold their most liquid holdings in the U.S. equity market. As trades came into the market, the adverse effect that followed was that long positions declined and short positions rallied. The end result was that billions of dollars were turned over during this “quant squeeze,” leading to wider spreads and volatility in market prices.
The timing of recent turmoil in the financial markets partially stems from the fact that monetary policy typically acts with a lagged effect on the broader economy. While generally accepted that the effects of Fed rate hikes have a lag of between three and 18 months, it’s also believed that most of the effects can be seen around the twelfth month. Working back from February 2007’s correction in global markets, the Fed funds target rate was 4.25%, yet the Fed didn’t stop raising rates until June 2006, when it finally reached 5.25%. The 12-month lag, therefore, would indicate that subsequent rate hikes were finally hitting the market, as we saw during the recent summer months.
The Fed held its target for the Fed funds rate for most of the period at 5.25%. However, as conditions in the market progressively worsened, the Fed cut twice, bringing the target rate down to 4.50% by the end of the report period. Although it noted recent economic growth was solid and conditions in financial markets were markedly improved, it also expressed its concern that conditions in the housing market could hinder the economic expansion in the near term.
Against this backdrop of economic data, the market priced in future Fed rate cuts. The housing market showed little to no sign that a bottom is anywhere in the near future, labor markets faced continued downward pressures, and energy prices remained elevated. Oil reached all time highs over the year, closing out just above $96 a barrel as of the end of the report period. While the tax-like effect of higher energy prices, declining equity values in residential real estate, and the lag effect of monetary policy remained significant headwinds for the U.S. economy, the Fed’s recent response to a volatile market eased investor concern toward the end of the period.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab MarketTrack Portfolios 5
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The Schwab MarketTrack Portfolios incorporate a mix of different asset classes. Accordingly, their returns over a given period will reflect a blend of returns of those asset classes, and will depend on their relative weightings within each portfolio. By spreading their exposure over various asset classes, the MarketTrack Portfolios are designed to provide more stable returns while seeking to reduce risk over various market cycles.
The Schwab MarketTrack All Equity Portfolio returned 16.55% for the report period, trailing its benchmark, the All Equity Composite Index, which was up 18.15%. The portfolio invests in different segments of the stock market including large-cap and international, so its performance reflects a blend of those segments’ returns. Unlike the other MarketTrack Portfolios, this fund does not have a defined allocation to fixed income. For the report period, the fund’s allocation to the international and small-cap segments positively contributed to returns. Performance of those segments, as measured by the MSCI EAFE and Russell 2000 Index, which returned 24.91% and 9.27%, respectively, contributed to that of large-cap domestic equities, as measured by the S&P 500 Index, which returned 14.56%.
As of 10/31/07:
Statistics
Number of Holdings | 5 |
Weighted Average
Market Cap
($ x 1,000,000) | $74,705 |
Price/Earnings Ratio (P/E) | 20.0 |
Price/Book Ratio (P/B) | 2.7 |
Portfolio Turnover Rate1 | 0% |
Asset Class Weightings % of Investments
Large-Cap Stocks | 43.0% |
International Stocks | 30.6% |
Small-Cap Stocks | 24.3% |
Short-Term Investments | 2.1% |
Total | 100.0% |
Top Holdings % Net Assets2
Schwab Institutional Select
S&P 500 Fund | 42.9% |
Schwab International Index
Fund, Select Shares | 30.5% |
Schwab Small-Cap Index Fund,
Selelct Shares | 24.2% |
Total | 97.6% |
Manager views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk.
1 | Less than 1%. |
2 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab MarketTrack Portfolios
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Schwab MarketTrack All Equity Portfoliotm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1
$10,000 Investment1
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | Since Inception | |||||||||
Portfolio: Schwab MarketTrack All Equity Portfoliotm (5/19/98) | 16.55% | 16.92% | 6.17% | |||||||||
Benchmark: All Equity Composite Index | 18.15% | 17.68% | 6.58% | |||||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 13.63% | 5.32% |
Fund Expense Ratios3: Net 0.80%; Gross 1.04%
Style Assessment4
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | The All Equity Composite Index is composed of Morningstar category averages and is calculated using the following portion allocations: 45% large-cap stocks, 25% small-cap stocks and 30% foreign stocks. Source: Morningstar, Inc. |
2 | Portfolio expenses have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 10/19/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Portfolios invest. The annualized weighted average expense ratio of the Underlying Funds was 0.30%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
4 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The portfolio’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the portfolio’s holding as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
Schwab MarketTrack Portfolios 7
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The Schwab MarketTrack Portfolios incorporate a mix of different asset classes. Accordingly, their returns over a given period will reflect a blend of returns of those asset classes, and will depend on their relative weightings within each portfolio. By spreading their exposure over various asset classes, the MarketTrack Portfolios are designed to provide more stable returns while seeking to reduce risk over various market cycles.
The Schwab MarketTrack Growth Portfolio Investor Shares returned 13.69%, trailing its benchmark, the Growth Composite Index, which returned 15.14% for the report period. The fund has an 80% target stock allocation that is divided among large-cap, small-cap, and international stocks. For the report period, the target allocation to international stocks continued to drive returns, as the international sector posted the strongest returns over the period. The fund is designed to allocate 20% to fixed income in order to reduce volatility and risk over the long term. Within the fixed income allocation of the fund, the Schwab Total Bond Market Fund contributed to returns. However, during the report period, the markets experienced several spikes in volatility. Towards the end of the report period, the fixed income markets experienced a flight to safety, triggered in part by the increased frequency of defaults and the fear of contagion from the subprime mortgage market, as well as the market’s anxious anticipation of $200 billion in high yield securities to finance a number of leveraged buyouts (LBOs). The Federal Reserve’s (the Fed) subsequent moves to add liquidity into the banking system and cut the fed funds target rate eased stress in the financial system.
As of 10/31/07:
Statistics
Number of Holdings | 505 |
Weighted Average
Market Cap
($ x 1,000,000) | $69,135 |
Price/Earnings Ratio (P/E) | 20.5 |
Price/Book Ratio (P/B) | 2.6 |
Portfolio Turnover Rate | 4% |
Asset Class Weightings % of Investments
Large-Cap Stocks | 41.8% |
International Stocks | 20.5% |
Small-Cap Stocks | 19.3% |
Bonds | 14.4% |
Short-Term Investments | 4.0% |
Total | 100.0% |
Top Holdings % Net Assets1
Schwab Institutional Select
S&P 500 Fund | 25.1% |
Schwab International Index
Fund, Select Shares | 20.5% |
Schwab Small-Cap Index Fund,
Select Shares | 19.3% |
Schwab Total Bond Market Fund | 14.5% |
Schwab Value Advantage Money
Fund, Institutional Shares | 3.5% |
Exxon Mobil Corp. | 0.6% |
General Electric Co. | 0.5% |
Microsoft Corp. | 0.4% |
AT&T, Inc. | 0.3% |
The Procter & Gamble Co. | 0.3% |
Total | 85.0% |
Manager views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab MarketTrack Portfolios
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Schwab MarketTrack Growth Portfoliotm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$100,000 Investment in P Shares1
$100,000 Investment in P Shares1
Average Annual Total Returns1,2
Portfolio Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||
Investor Shares (11/20/95) | 13.69% | 13.94% | 7.09% | 8.83% | ||||||||||||
P Shares (4/6/06) | 13.83% | n/a | n/a | 11.78% | ||||||||||||
Benchmark: Growth Composite Index | 15.14% | 14.60% | 7.65% | (11/20/95) 9.26% | ||||||||||||
(4/6/06) 12.89% | ||||||||||||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 13.63% | 6.87% | (11/20/95) 9.30% | ||||||||||||
(4/6/06) 12.25% |
Fund Expense Ratios3: Investor Shares: Net 0.78%; Gross 0.99% / P Shares: Net 0.63%; Gross 0.84%
Style Assessment4
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | The Growth Composite Index is composed of Morningstar category averages and cash equivalents as represented by the 90-day T-bill and is calculated using the following portfolio allocations: 40% large-cap stocks, 20% small-cap stocks, 20% foreign stocks, 15% bonds and 5% cash. Source: Morningstar, Inc. |
2 | Portfolio expenses have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 10/19/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Portfolios invest. The annualized weighted average expense ratio of the Underlying Funds was 0.28%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
4 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The portfolio’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the portfolio’s holdings as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
Schwab MarketTrack Portfolios 9
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The Schwab MarketTrack Portfolios incorporate a mix of different asset classes. Accordingly, their returns over a given period will reflect a blend of returns of those asset classes, and will depend on their relative weightings within each portfolio. By spreading their exposure over various asset classes, the MarketTrack Portfolios are designed to provide more stable returns while seeking to reduce risk over various market cycles.
The Schwab MarketTrack Balanced Portfolio returned 11.38% for the report period, trailing its benchmark, the Balanced Composite Index, which returned 12.66%. The fund’s allocation is weighted toward stock investments, with a 60% target allocation to equities. However, the fund also maintains a considerable allocation to fixed income investments, seeking to reduce volatility and add income. Although the equity market led in performance for the period, bonds also positively contributed to performance. Within the fixed income allocation of the fund, the Schwab Total Bond Market Fund contributed to returns. However, during the report period, the markets experienced several spikes in volatility. Towards the end of the report period, the fixed income markets experienced a flight to safety, triggered in part by the increased frequency of defaults and the fear of contagion from the subprime mortgage market, as well as the market’s anxious anticipation of $200 billion in high yield securities to finance a number of leveraged buyouts (LBOs). The Federal Reserve’s (the Fed) subsequent moves to add liquidity into the banking system and cut the fed funds target rate eased stress in the financial system.
As of 10/31/07:
Statistics
Number of Holdings | 505 |
Portfolio Turnover Rate | 6% |
Asset Class Weightings % of Investments
Bonds | 33.5% |
Large-Cap Stocks | 31.8% |
International Stocks | 15.6% |
Small-Cap Stocks | 14.4% |
Short-Term Investments | 4.7% |
Total | 100.0% |
Top Holdings % Net Assets1
Schwab Total Bond Market Fund | 33.4% |
Schwab Institutional Select
S&P 500 Fund | 16.5% |
Schwab International Index
Fund, Select Shares | 15.6% |
Schwab Small-Cap Index Fund,
Select Shares | 14.4% |
Schwab Value Advantage Money
Fund, Institutional Shares | 2.1% |
Exxon Mobil Corp. | 0.6% |
General Electric Co. | 0.5% |
Microsoft Corp. | 0.4% |
AT&T, Inc. | 0.3% |
Bank of America Corp. | 0.2% |
Total | 84.0% |
Manager views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab MarketTrack Portfolios
Table of Contents
Schwab MarketTrack Balanced Portfoliotm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1
$10,000 Investment1
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Portfolio: Schwab MarketTrack Balanced Portfoliotm (11/20/95) | 11.38% | 11.44% | 6.75% | |||||||||
Benchmark: Balanced Composite Index | 12.66% | 12.03% | 7.34% | |||||||||
Fund Category: Morningstar Moderate Allocation | 12.19% | 11.20% | 6.58% |
Fund Expense Ratios3: Net 0.85%; Gross 1.08%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | The Balanced Composite Index is composed of Morningstar category averages and cash equivalents as represented by the 90-day T-bill and is calculated using the following portfolio allocations: 30% large-cap stocks, 15% small-cap stocks, 15% foreign stocks, 35% bonds and 5% cash. Source: Morningstar, Inc. |
2 | Portfolio expenses have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 10/19/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Portfolios invest. The annualized weighted average expense ratio of the Underlying Funds was 0.35%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab MarketTrack Portfolios 11
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The Schwab MarketTrack Portfolios incorporate a mix of different asset classes. Accordingly, their returns over a given period will reflect a blend of returns of those asset classes, and will depend on their relative weightings within each portfolio. By spreading their exposure over various asset classes, the MarketTrack Portfolios are designed to provide more stable returns while seeking to reduce risk over various market cycles.
The Schwab MarketTrack Conservative Portfolio Investor Shares returned 9.12% for the report period, trailing its benchmark, the Conservative Composite Index, which returned 10.21%. This portfolio is designed to seek income with more growth potential than an all-bond portfolio. As such, the portfolio’s allocation is weighted toward bond investments, for which the target allocation is 55%. Seeking to obtain long-term growth, the portfolio has a substantial 40% target allocation to stocks. Although equity markets led in performance for the report period, bonds also positively contributed to performance. Within the fixed income allocation of the fund, the Schwab Total Bond Market Fund contributed to returns. However, during the report period, the markets experienced several spikes in volatility. Towards the end of the report period, the fixed income markets experienced a flight to safety, triggered in part by the increased frequency of defaults and the fear of contagion from the subprime mortgage market, as well as the market’s anxious anticipation of $200 billion in high yield securities to finance a number of leveraged buyouts (LBOs). The Federal Reserve’s (the Fed) subsequent moves to add liquidity into the banking system and cut the fed funds target rate eased stress in the financial system.
As of 10/31/07:
Statistics
Number of Holdings | 506 |
Portfolio Turnover Rate | 4% |
Asset Class Weightings % of Investments
Bonds | 54.0% |
Large-Cap Stocks | 21.0% |
International Stocks | 10.8% |
Small-Cap Stocks | 9.6% |
Short-Term Investments | 4.6% |
Total | 100.0% |
Top Holdings % Net Assets1
Schwab Total Bond Market Fund | 54.0% |
Schwab S&P 500 Index Fund,
Select Shares | 13.6% |
Schwab International Index
Fund, Select Shares | 10.8% |
Schwab Small-Cap Index Fund,
Select Shares | 9.6% |
Schwab Value Advantage Money
Fund, Institutional Shares | 2.9% |
Schwab Institutional Select
S&P 500 Fund | 1.3% |
Exxon Mobil Corp. | 0.2% |
General Electric Co. | 0.2% |
Microsoft Corp. | 0.1% |
AT&T, Inc. | 0.1% |
Total | 92.8% |
Manager views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab MarketTrack Portfolios
Table of Contents
Schwab MarketTrack Conservative Portfoliotm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$100,000 Investment in P Shares1
$100,000 Investment in P Shares1
Average Annual Total Returns1,2
Portfolio Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||
Investor Shares (11/20/95) | 9.12% | 8.94% | 6.26% | 7.17% | ||||||||||||
P Shares (4/6/06) | 9.32% | n/a | n/a | 8.63% | ||||||||||||
Benchmark: Conservative Composite Index | 10.21% | 9.45% | 6.93% | (11/20/95) 7.81% | ||||||||||||
(4/6/06) 9.48% | ||||||||||||||||
Fund Category: Morningstar Conservative Allocation | 8.12% | 7.90% | 5.37% | (11/20/95) 6.47% | ||||||||||||
(4/6/06) 7.43% |
Fund Expense Ratios3: Investor Shares: Net 0.88%; Gross 1.12% / P Shares: Net 0.73%; Gross 0.97%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | The Conservative Composite Index is composed of Morningstar category averages and cash equivalents as represented by the 90-day T-bill and is calculated using the following portfolio allocations: 20% large-cap stocks, 10% small-cap stocks, 10% foreign stocks, 55% bonds and 5% cash. Source: Morningstar, Inc. |
2 | Portfolio expenses have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 10/19/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Portfolios invest. The annualized weighted average expense ratio of the Underlying Funds was 0.38%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab MarketTrack Portfolios 13
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees; and, ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six-months beginning May 1, 2007 and held through October 31, 2007.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund or share class under the heading entitled ‘Expenses Paid During Period‘.
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/07 | at 10/31/07 | 5/1/07 - 10/31/07 | |||||||||||||
Schwab MarketTrack All Equity Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,062.00 | $ | 2.60 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Growth Portfoliotm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,050.80 | $ | 2.58 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 | |||||||||
P Shares | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 1,051.30 | $ | 1.81 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab MarketTrack Balanced Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,042.60 | $ | 2.57 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Conservative Portfoliotm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,034.20 | $ | 2.56 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 | |||||||||
P Shares | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 1,035.00 | $ | 1.80 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.44 | $ | 1.79 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights; does not include expenses of underlying funds in which the portfolios invest. |
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 184 days of the period, and divided by 365 days of the fiscal year. |
14 Schwab MarketTrack Portfolios
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | ||||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 13.63 | 11.55 | 10.44 | 9.43 | 7.60 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.21 | 0.11 | 0.12 | 0.08 | 0.09 | |||||||||||||||
Net realized and unrealized gains | 2.01 | 2.10 | 1.11 | 1.02 | 1.85 | |||||||||||||||
Total income from investment operations | 2.22 | 2.21 | 1.23 | 1.10 | 1.94 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.27 | ) | (0.13 | ) | (0.12 | ) | (0.09 | ) | (0.09 | ) | ||||||||||
Distributions from net realized gains | — | — | — | — | (0.02 | ) | ||||||||||||||
Total distributions | (0.27 | ) | (0.13 | ) | (0.12 | ) | (0.09 | ) | (0.11 | ) | ||||||||||
Net asset value at end of period | 15.58 | 13.63 | 11.55 | 10.44 | 9.43 | |||||||||||||||
Total return (%) | 16.55 | 19.31 | 11.81 | 11.75 | 25.77 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||
Gross operating expenses1 | 0.72 | 0.74 | 0.75 | 0.76 | 0.76 | |||||||||||||||
Net investment income | 1.24 | 0.89 | 1.07 | 0.83 | 1.10 | |||||||||||||||
Portfolio turnover rate | 0 | 2 | 8 | 49 | 7 | 10 | ||||||||||||||
Net assets, end of period ($ x 1,000,000) | 682 | 527 | 463 | 450 | 427 |
1 The expenses incurred by underlying funds in which the portfolio invests are not included in this ratio.
2 Less than 1%.
See financial notes 15
Table of Contents
Schwab MarketTrack All Equity Portfolio
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
97 | .6% | Other Investment Companies | 481,348 | 665,855 | ||||||||
2 | .1% | Short-Term Investments | 14,336 | 14,336 | ||||||||
99 | .7% | Total Investments | 495,684 | 680,191 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 2,209 | |||||||||
100 | .0% | Total Net Assets | 682,400 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Other Investment Companies 97.6% of net assets | ||||||||
Schwab Institutional Select S&P 500 Fund (a) | 23,619,442 | 292,645 | ||||||
Schwab International Index Fund, Select Shares (a) | 8,029,852 | 208,374 | ||||||
Schwab Small-Cap Index Fund, Select Shares (a) | 6,502,408 | 164,836 | ||||||
Total Other Investment Companies (Cost $481,348) | 665,855 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 2.1% of net assets | ||||||||
Commercial Paper & Other Obligations 2.1% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 13,997 | 13,997 | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
3.92%, 12/20/07 (b) | 340 | 339 | ||||||
Total Short-Term Investments (Cost $14,336) | 14,336 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $509,184, and the unrealized appreciation and depreciation were $171,007 and $0 respectively, with net unrealized appreciation of $171,007. |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. |
In addition to the above, the fund held the following at
10/31/07. All numbers are x 1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 100 | 7,775 | 285 |
16 See financial notes
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $481,348) | $665,855 | |||||
Investments in unaffiliated issuers, at value (cost $14,336) | + | 14,336 | ||||
Total investments, at value (cost $495,684) | 680,191 | |||||
Receivables: | ||||||
Fund shares sold | 2,818 | |||||
Due from brokers for futures | 94 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 3 | ||||
Total assets | 683,108 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 11 | |||||
Transfer agent and shareholder services fees | 14 | |||||
Fund shares redeemed | 627 | |||||
Accrued expenses | + | 56 | ||||
Total liabilities | 708 | |||||
Net Assets | ||||||
Total assets | 683,108 | |||||
Total liabilities | − | 708 | ||||
Net assets | $682,400 | |||||
Net Assets by Source | ||||||
Capital received from investors | 513,004 | |||||
Distributions in excess of net investment income | (2,051 | ) | ||||
Net realized capital losses | (13,345 | ) | ||||
Net unrealized capital gains | 184,792 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$682,400 | 43,799 | $15.58 |
See financial notes 17
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds | $9,925 | |||||
Interest | + | 519 | ||||
Total investment income | 10,444 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on sales of affiliated underlying funds | 2 | |||||
Net realized gains received from affiliated underlying funds | 15,460 | |||||
Net realized gains on futures contracts | + | 270 | ||||
Net realized gains | 15,732 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on affiliated underlying funds | 67,722 | |||||
Net unrealized gains on futures contracts | + | 191 | ||||
Net unrealized gains | 67,913 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,585 | |||||
Transfer agent and shareholder service fees | 1,497 | |||||
Shareholder reports | 59 | |||||
Professional fees | 36 | |||||
Registration fees | 34 | |||||
Portfolio accounting fees | 25 | |||||
Custodian fees | 10 | |||||
Trustees’ fees | 8 | |||||
Other expense | + | 38 | ||||
Total expenses | 4,292 | |||||
Expense reduction by adviser and Schwab | − | 1,299 | ||||
Net expenses | 2,993 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 10,444 | |||||
Net expenses | − | 2,993 | ||||
Net investment income | 7,451 | |||||
Net realized gains | 15,732 | |||||
Net unrealized gains | + | 67,913 | ||||
Increase in net assets from operations | $91,096 |
18 See financial notes
Table of Contents
Schwab MarketTrack All Equity Portfolio
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $7,451 | $4,438 | ||||||
Net realized gains | 15,732 | 12,826 | ||||||
Net unrealized gains | + | 67,913 | 69,571 | |||||
Increase in net assets from operations | 91,096 | 86,835 | ||||||
Distributions from net investment income | $10,516 | $5,267 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 11,711 | $170,551 | 5,531 | $70,097 | ||||||||||||||
Shares Reinvested | 728 | 10,065 | 416 | 5,033 | ||||||||||||||
Shares Redeemed | + | (7,299 | ) | (105,663 | ) | (7,352 | ) | (92,711 | ) | |||||||||
Net transactions in fund shares | 5,140 | $74,953 | (1,405 | ) | ($17,581 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 38,659 | $526,867 | 40,064 | $462,880 | ||||||||||||||
Total increase or decrease | + | 5,140 | 155,533 | (1,405 | ) | 63,987 | ||||||||||||
End of period | 43,799 | $682,400 | 38,659 | $526,867 | ||||||||||||||
Distributions in excess of net investment income | ($2,051 | ) | ($2,742 | ) |
See financial notes 19
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 19.16 | 16.81 | 15.57 | 14.36 | 12.05 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.40 | 0.30 | 0.27 | 0.21 | 0.18 | |||||||||||||||
Net realized and unrealized gains | 2.16 | 2.33 | 1.20 | 1.21 | 2.33 | |||||||||||||||
Total income from investment operations | 2.56 | 2.63 | 1.47 | 1.42 | 2.51 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.46 | ) | (0.28 | ) | (0.23 | ) | (0.21 | ) | (0.20 | ) | ||||||||||
Distributions from net realized gains | (0.17 | ) | — | — | — | — | ||||||||||||||
Total distributions | (0.63 | ) | (0.28 | ) | (0.23 | ) | (0.21 | ) | (0.20 | ) | ||||||||||
Net asset value at end of period | 21.09 | 19.16 | 16.81 | 15.57 | 14.36 | |||||||||||||||
Total return (%) | 13.69 | 15.83 | 9.48 | 9.94 | 21.18 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||
Gross operating expenses1 | 0.70 | 0.71 | 0.72 | 0.73 | 0.74 | |||||||||||||||
Net investment income | 1.94 | 1.74 | 1.58 | 1.35 | 1.48 | |||||||||||||||
Portfolio turnover rate | 4 | 7 | 33 | 9 | 9 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 686 | 602 | 657 | 614 | 578 |
11/1/06- | 4/6/062- | |||||||
P Shares | 10/31/07 | 10/31/06 | ||||||
Per—Share Data ($) | ||||||||
Net asset value at beginning of period | 19.18 | 18.32 | ||||||
Income from investment operations: | ||||||||
Net investment income | 0.42 | 0.10 | ||||||
Net realized and unrealized gains | 2.16 | 0.76 | ||||||
Total income from investment operations | 2.58 | 0.86 | ||||||
Less distributions: | ||||||||
Distributions from net investment income | (0.49 | ) | — | |||||
Distributions from net realized gains | (0.17 | ) | — | |||||
Total distributions | (0.66 | ) | — | |||||
Net asset value at end of period | 21.10 | 19.18 | ||||||
Total return (%) | 13.83 | 4.69 | 3 | |||||
Ratios/Supplemental Data (%) | ||||||||
Ratios to average net assets: | ||||||||
Net operating expenses1 | 0.35 | 0.35 | 4 | |||||
Gross operating expenses1 | 0.55 | 0.56 | 4 | |||||
Net investment income | 2.07 | 0.95 | 4 | |||||
Portfolio turnover rate | 4 | 7 | 3 | |||||
Net assets, end of period ($ x 1,000,000) | 138 | 119 |
1 The expenses incurred by underlying funds in which the portfolio invests are not included in this ratio.
2 Commencement of operations.
3 Not Annualized.
4 Annualized.
20 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
16 | .7% | Common Stock | 69,090 | 136,936 | ||||||||
82 | .8% | Other Investment Companies | 492,071 | 682,294 | ||||||||
0 | .5% | Short-Term Investment | 4,112 | 4,112 | ||||||||
100 | .0% | Total Investments | 565,273 | 823,342 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 237 | |||||||||
100 | .0% | Total Net Assets | 823,579 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 16.7% of net assets | ||||||||
Automobiles & Components 0.1% | ||||||||
Ford Motor Co. * | 18,103 | 161 | ||||||
General Motors Corp. | 5,425 | 213 | ||||||
Harley-Davidson, Inc. | 3,000 | 154 | ||||||
Johnson Controls, Inc. | 5,400 | 236 | ||||||
The Goodyear Tire & Rubber Co. * | 1,600 | 48 | ||||||
812 | ||||||||
Banks 0.7% | ||||||||
BB&T Corp. | 5,300 | 196 | ||||||
Comerica, Inc. | 1,700 | 79 | ||||||
Commerce Bancorp, Inc. | 1,800 | 73 | ||||||
Countrywide Financial Corp. | 5,298 | 82 | ||||||
Fannie Mae | 9,400 | 536 | ||||||
Fifth Third Bancorp | 5,369 | 168 | ||||||
First Horizon National Corp. | 1,200 | 31 | ||||||
Freddie Mac | 6,600 | 345 | ||||||
Hudson City Bancorp, Inc. | 3,500 | 55 | ||||||
Huntington Bancshares, Inc. | 2,262 | 41 | ||||||
KeyCorp | 4,400 | 125 | ||||||
M&T Bank Corp. | 998 | 99 | ||||||
Marshall & Ilsley Corp. | 2,056 | 88 | ||||||
MGIC Investment Corp. | 900 | 18 | ||||||
National City Corp. | 6,100 | 148 | ||||||
PNC Financial Services Group, Inc. | 2,800 | 202 | ||||||
Regions Financial Corp. | 7,173 | 195 | ||||||
Sovereign Bancorp, Inc. | 3,885 | 56 | ||||||
SunTrust Banks, Inc. | 3,500 | 254 | ||||||
Synovus Financial Corp. | 2,750 | 73 | ||||||
U.S. Bancorp | 17,972 | 596 | ||||||
Wachovia Corp. | 18,552 | 848 | ||||||
Washington Mutual, Inc. | 9,843 | 274 | ||||||
Wells Fargo & Co. | 33,230 | 1,130 | ||||||
Zions Bancorp | 900 | 53 | ||||||
5,765 | ||||||||
Capital Goods 1.6% | ||||||||
3M Co. | 7,600 | 656 | ||||||
American Standard Cos., Inc. | 2,100 | 78 | ||||||
Caterpillar, Inc. | 6,600 | 492 | ||||||
Cooper Industries Ltd., Class A | 1,800 | 94 | ||||||
Cummins, Inc. | 800 | 96 | ||||||
Danaher Corp. | 2,800 | 240 | ||||||
Deere & Co. | 2,300 | 356 | ||||||
Dover Corp. | 2,000 | 92 | ||||||
Eaton Corp. | 1,400 | 130 | ||||||
Emerson Electric Co. | 8,000 | 418 | ||||||
Fluor Corp. | 800 | 126 | ||||||
General Dynamics Corp. | 4,000 | 364 | ||||||
General Electric Co. | 102,700 | 4,227 | ||||||
Goodrich Corp. | 1,100 | 77 | ||||||
Honeywell International, Inc. | 8,437 | 510 | ||||||
Illinois Tool Works, Inc. | 4,200 | 241 | ||||||
Ingersoll-Rand Co., Ltd., Class A | 3,300 | 166 | ||||||
ITT Corp. | 1,800 | 121 | ||||||
L-3 Communications Holdings, Inc. | 1,100 | 121 | ||||||
Lockheed Martin Corp. | 3,900 | 429 | ||||||
Masco Corp. | 4,500 | 108 | ||||||
Northrop Grumman Corp. | 3,592 | 300 | ||||||
PACCAR, Inc. | 3,543 | 197 | ||||||
Pall Corp. | 1,000 | 40 | ||||||
Parker Hannifin Corp. | 1,725 | 139 | ||||||
Precision Castparts Corp. | 1,400 | 210 | ||||||
Raytheon Co. | 4,500 | 286 | ||||||
Rockwell Automation, Inc. | 1,900 | 131 | ||||||
Rockwell Collins, Inc. | 1,900 | 142 | ||||||
Terex Corp. * | 800 | 59 | ||||||
Textron, Inc. | 3,000 | 208 | ||||||
The Boeing Co. | 8,078 | 796 | ||||||
Tyco International Ltd. | 4,950 | 204 | ||||||
United Technologies Corp. | 10,000 | 766 | ||||||
W.W. Grainger, Inc. | 900 | 81 | ||||||
12,701 | ||||||||
Commercial Services & Supplies 0.1% | ||||||||
Allied Waste Industries, Inc. * | 3,100 | 39 | ||||||
Avery Dennison Corp. | 1,200 | 69 | ||||||
Cintas Corp. | 1,638 | 60 | ||||||
Equifax, Inc. | 1,200 | 46 | ||||||
Monster Worldwide, Inc. * | 954 | 39 | ||||||
Pitney Bowes, Inc. | 2,300 | 92 | ||||||
R.R. Donnelley & Sons Co. | 2,100 | 85 | ||||||
Robert Half International, Inc. | 1,700 | 51 | ||||||
Waste Management, Inc. | 5,517 | 201 | ||||||
682 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Brunswick Corp. | 900 | 20 | ||||||
Centex Corp. | 1,200 | 30 | ||||||
Coach, Inc. * | 3,600 | 132 | ||||||
D.R. Horton, Inc. | 2,660 | 34 |
See financial notes 21
Table of Contents
Schwab MarketTrack Growth Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Eastman Kodak Co. | 3,100 | 89 | ||||||
Fortune Brands, Inc. | 1,400 | 117 | ||||||
Harman International Industries, Inc. | 700 | 59 | ||||||
Hasbro, Inc. | 1,650 | 49 | ||||||
Jones Apparel Group, Inc. | 1,200 | 25 | ||||||
KB Home | 800 | 22 | ||||||
Leggett & Platt, Inc. | 2,000 | 39 | ||||||
Lennar Corp., Class A | 1,300 | 30 | ||||||
Liz Claiborne, Inc. | 1,200 | 34 | ||||||
Mattel, Inc. | 4,150 | 87 | ||||||
Newell Rubbermaid, Inc. | 2,745 | 80 | ||||||
NIKE, Inc., Class B | 4,600 | 305 | ||||||
Polo Ralph Lauren Corp. | 500 | 34 | ||||||
Pulte Homes, Inc. | 2,400 | 36 | ||||||
Snap-on, Inc. | 600 | 30 | ||||||
The Black & Decker Corp. | 900 | 81 | ||||||
The Stanley Works | 600 | 34 | ||||||
VF Corp. | 1,200 | 104 | ||||||
Whirlpool Corp. | 907 | 72 | ||||||
1,543 | ||||||||
Consumer Services 0.3% | ||||||||
Apollo Group, Inc., Class A * | 1,700 | 135 | ||||||
Carnival Corp. | 4,300 | 206 | ||||||
Darden Restaurants, Inc. | 1,800 | 78 | ||||||
H&R Block, Inc. | 3,400 | 74 | ||||||
Harrah’s Entertainment, Inc. | 1,780 | 157 | ||||||
International Game Technology | 3,400 | 148 | ||||||
Marriott International, Inc., Class A | 3,900 | 161 | ||||||
McDonald’s Corp. | 12,400 | 740 | ||||||
Starbucks Corp. * | 7,920 | 211 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 1,900 | 108 | ||||||
Wendy’s International, Inc. | 1,000 | 35 | ||||||
Wyndham Worldwide Corp. | 1,986 | 65 | ||||||
YUM! Brands, Inc. | 6,240 | 251 | ||||||
2,369 | ||||||||
Diversified Financials 1.6% | ||||||||
American Capital Strategies Ltd. | 900 | 39 | ||||||
American Express Co. | 12,300 | 750 | ||||||
Ameriprise Financial, Inc. | 2,300 | 145 | ||||||
Bank of America Corp. | 45,610 | 2,202 | ||||||
Bank of New York Mellon Corp. | 10,986 | 537 | ||||||
Capital One Financial Corp. | 2,900 | 190 | ||||||
CIT Group, Inc. | 2,000 | 70 | ||||||
Citigroup, Inc. | 49,392 | 2,070 | ||||||
CME Group, Inc. | 340 | 227 | ||||||
Discover Financial Services | 5,450 | 105 | ||||||
E *TRADE Financial Corp. * | 3,500 | 39 | ||||||
Federated Investors, Inc., Class B | 1,100 | 47 | ||||||
Franklin Resources, Inc. | 1,500 | 195 | ||||||
Janus Capital Group, Inc. | 2,200 | 76 | ||||||
JPMorgan Chase & Co. | 34,915 | 1,641 | ||||||
Legg Mason, Inc. | 1,200 | 100 | ||||||
Lehman Brothers Holdings, Inc. | 5,200 | 329 | ||||||
Leucadia National Corp. | 1,500 | 76 | ||||||
Merrill Lynch & Co., Inc. | 8,800 | 581 | ||||||
Moody’s Corp. | 3,000 | 131 | ||||||
Morgan Stanley | 10,900 | 733 | ||||||
Northern Trust Corp. | 2,200 | 165 | ||||||
NYSE Euronext | 2,500 | 235 | ||||||
SLM Corp. | 4,110 | 194 | ||||||
State Street Corp. | 3,300 | 263 | ||||||
T. Rowe Price Group, Inc. | 2,400 | 154 | ||||||
The Bear Stearns Cos., Inc. | 1,082 | 123 | ||||||
The Charles Schwab Corp. (a) | 11,242 | 261 | ||||||
The Goldman Sachs Group, Inc. | 4,179 | 1,036 | ||||||
12,714 | ||||||||
Energy 1.9% | ||||||||
Anadarko Petroleum Corp. | 4,836 | 285 | ||||||
Apache Corp. | 3,308 | 343 | ||||||
Baker Hughes, Inc. | 3,360 | 291 | ||||||
BJ Services Co. | 3,000 | 76 | ||||||
Chesapeake Energy Corp. | 3,600 | 142 | ||||||
Chevron Corp. | 21,635 | 1,980 | ||||||
ConocoPhillips | 16,440 | 1,397 | ||||||
CONSOL Energy, Inc. | 1,800 | 102 | ||||||
Devon Energy Corp. | 4,600 | 430 | ||||||
El Paso Corp. | 6,306 | 111 | ||||||
ENSCO International, Inc. | 1,100 | 61 | ||||||
EOG Resources, Inc. | 2,256 | 200 | ||||||
Exxon Mobil Corp. | 57,298 | 5,271 | ||||||
Halliburton Co. | 9,916 | 391 | ||||||
Hess Corp. | 2,520 | 180 | ||||||
Marathon Oil Corp. | 7,178 | 424 | ||||||
Murphy Oil Corp. | 1,600 | 118 | ||||||
Nabors Industries Ltd. * | 2,800 | 79 | ||||||
National-Oilwell Varco, Inc. * | 3,200 | 234 | ||||||
Noble Corp. | 2,600 | 138 | ||||||
Noble Energy | 1,500 | 115 | ||||||
Occidental Petroleum Corp. | 7,800 | 539 | ||||||
Peabody Energy Corp. | 1,900 | 106 | ||||||
Rowan Cos., Inc. | 1,100 | 43 | ||||||
Schlumberger Ltd. | 11,400 | 1,101 | ||||||
Smith International, Inc. | 1,900 | 125 | ||||||
Spectra Energy Corp. | 5,674 | 147 | ||||||
Sunoco, Inc. | 1,400 | 103 | ||||||
Tesoro Corp. | 1,400 | 85 | ||||||
The Williams Cos., Inc. | 5,000 | 182 | ||||||
Transocean, Inc. * | 2,945 | 351 | ||||||
Valero Energy Corp. | 6,000 | 423 | ||||||
Weatherford International Ltd. * | 2,720 | 177 | ||||||
XTO Energy, Inc. | 3,333 | 221 | ||||||
15,971 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Costco Wholesale Corp. | 4,400 | 296 | ||||||
CVS Caremark Corp. | 15,264 | 638 | ||||||
Safeway, Inc. | 4,200 | 143 | ||||||
Supervalu, Inc. | 2,043 | 79 | ||||||
Sysco Corp. | 6,200 | 213 | ||||||
The Kroger Co. | 7,200 | 212 | ||||||
Wal-Mart Stores, Inc. | 24,800 | 1,121 | ||||||
Walgreen Co. | 9,900 | 392 | ||||||
Whole Foods Market, Inc. | 1,000 | 49 | ||||||
3,143 |
22 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Food, Beverage & Tobacco 0.8% | ||||||||
Altria Group, Inc. | 20,300 | 1,481 | ||||||
Anheuser-Busch Cos., Inc. | 7,800 | 400 | ||||||
Archer-Daniels-Midland Co. | 6,532 | 234 | ||||||
Brown-Forman Corp., Class B | 904 | 67 | ||||||
Campbell Soup Co. | 1,800 | 67 | ||||||
Coca-Cola Enterprises, Inc. | 4,000 | 103 | ||||||
ConAgra Foods, Inc. | 4,900 | 116 | ||||||
Constellation Brands, Inc., Class A * | 1,920 | 48 | ||||||
Dean Foods Co. | 1,300 | 36 | ||||||
General Mills, Inc. | 3,576 | 206 | ||||||
H.J. Heinz Co. | 3,400 | 159 | ||||||
Kellogg Co. | 2,500 | 132 | ||||||
Kraft Foods, Inc., Class A | 14,048 | 469 | ||||||
McCormick & Co., Inc. | 1,400 | 49 | ||||||
Molson Coors Brewing Co., Class B | 1,600 | 92 | ||||||
PepsiCo, Inc. | 16,460 | 1,213 | ||||||
Reynolds American, Inc. | 2,284 | 147 | ||||||
Sara Lee Corp. | 7,600 | 126 | ||||||
The Coca-Cola Co. | 20,600 | 1,272 | ||||||
The Hershey Co. | 1,700 | 73 | ||||||
The Pepsi Bottling Group, Inc. | 1,932 | 83 | ||||||
Tyson Foods, Inc., Class A | 2,500 | 40 | ||||||
UST, Inc. | 1,600 | 85 | ||||||
Wm. Wrigley Jr. Co. | 2,375 | 147 | ||||||
6,845 | ||||||||
Health Care Equipment & Services 0.7% | ||||||||
Aetna, Inc. | 5,696 | 320 | ||||||
AmerisourceBergen Corp. | 2,000 | 94 | ||||||
Baxter International, Inc. | 6,100 | 366 | ||||||
Becton, Dickinson & Co. | 2,600 | 217 | ||||||
Boston Scientific Corp. * | 10,887 | 151 | ||||||
C.R. Bard, Inc. | 1,000 | 84 | ||||||
Cardinal Health, Inc. | 4,100 | 279 | ||||||
CIGNA Corp. | 4,200 | 220 | ||||||
Coventry Health Care, Inc. * | 1,650 | 100 | ||||||
Covidien Ltd. | 4,950 | 206 | ||||||
Express Scripts, Inc. * | 3,200 | 202 | ||||||
Hospira, Inc. * | 1,530 | 63 | ||||||
Humana, Inc. * | 1,400 | 105 | ||||||
IMS Health, Inc. | 2,300 | 58 | ||||||
Laboratory Corp. of America Holdings * | 1,300 | 89 | ||||||
Manor Care, Inc. | 1,100 | 73 | ||||||
McKesson Corp. | 2,654 | 175 | ||||||
Medco Health Solutions, Inc. * | 2,641 | 249 | ||||||
Medtronic, Inc. | 11,800 | 560 | ||||||
Patterson Cos., Inc. * | 1,300 | 51 | ||||||
Quest Diagnostics, Inc. | 1,802 | 96 | ||||||
St. Jude Medical, Inc. * | 3,500 | 143 | ||||||
Stryker Corp. | 2,884 | 205 | ||||||
Tenet Healthcare Corp. * | 4,650 | 16 | ||||||
UnitedHealth Group, Inc. | 12,600 | 619 | ||||||
Varian Medical Systems, Inc. * | 900 | 44 | ||||||
WellPoint, Inc. * | 5,902 | 468 | ||||||
Zimmer Holdings, Inc. * | 2,300 | 160 | ||||||
5,413 | ||||||||
Household & Personal Products 0.4% | ||||||||
Avon Products, Inc. | 4,800 | 197 | ||||||
Colgate-Palmolive Co. | 5,300 | 404 | ||||||
Kimberly-Clark Corp. | 4,960 | 352 | ||||||
The Clorox Co. | 1,500 | 94 | ||||||
The Estee Lauder Cos., Inc., Class A | 1,100 | 48 | ||||||
The Procter & Gamble Co. | 31,717 | 2,205 | ||||||
3,300 | ||||||||
Insurance 0.7% | ||||||||
ACE Ltd. | 2,500 | 151 | ||||||
AFLAC, Inc. | 5,200 | 326 | ||||||
Ambac Financial Group, Inc. | 1,015 | 37 | ||||||
American International Group, Inc. | 25,551 | 1,613 | ||||||
AON Corp. | 2,625 | 119 | ||||||
Assurant, Inc. | 1,000 | 58 | ||||||
Cincinnati Financial Corp. | 1,984 | 79 | ||||||
Genworth Financial, Inc., Class A | 3,700 | 101 | ||||||
Lincoln National Corp. | 3,168 | 198 | ||||||
Loews Corp. | 4,800 | 236 | ||||||
Marsh & McLennan Cos., Inc. | 5,200 | 135 | ||||||
MBIA, Inc. | 1,350 | 58 | ||||||
MetLife, Inc. | 7,310 | 503 | ||||||
Principal Financial Group, Inc. | 3,065 | 207 | ||||||
Prudential Financial, Inc. | 5,200 | 503 | ||||||
SAFECO Corp. | 1,100 | 64 | ||||||
The Allstate Corp. | 6,700 | 351 | ||||||
The Chubb Corp. | 3,800 | 203 | ||||||
The Hartford Financial Services Group, Inc. | 2,900 | 281 | ||||||
The Progressive Corp. | 8,400 | 155 | ||||||
The Travelers Cos., Inc. | 6,453 | 337 | ||||||
Torchmark Corp. | 1,100 | 72 | ||||||
Unum Group | 2,349 | 55 | ||||||
XL Capital Ltd., Class A | 1,300 | 94 | ||||||
5,936 | ||||||||
Materials 0.5% | ||||||||
Air Products & Chemicals, Inc. | 2,300 | 225 | ||||||
Alcoa, Inc. | 8,472 | 335 | ||||||
Allegheny Technologies, Inc. | 735 | 75 | ||||||
Ashland, Inc. | 800 | 47 | ||||||
Ball Corp. | 800 | 40 | ||||||
Bemis Co., Inc. | 1,000 | 28 | ||||||
E.I. du Pont de Nemours & Co. | 9,592 | 475 | ||||||
Eastman Chemical Co. | 800 | 53 | ||||||
Ecolab, Inc. | 2,200 | 104 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 2,919 | 344 | ||||||
Hercules, Inc. | 900 | 17 | ||||||
International Flavors & Fragrances, Inc. | 1,100 | 58 | ||||||
International Paper Co. | 4,846 | 179 | ||||||
MeadWestvaco Corp. | 1,970 | 66 | ||||||
Monsanto Co. | 4,986 | 487 | ||||||
Newmont Mining Corp. | 4,201 | 214 | ||||||
Nucor Corp. | 3,600 | 223 | ||||||
Pactiv Corp. * | 1,500 | 41 |
See financial notes 23
Table of Contents
Schwab MarketTrack Growth Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
PPG Industries, Inc. | 1,700 | 127 | ||||||
Praxair, Inc. | 3,200 | 274 | ||||||
Rohm & Haas Co. | 1,505 | 78 | ||||||
Sealed Air Corp. | 1,764 | 44 | ||||||
Sigma-Aldrich Corp. | 1,200 | 62 | ||||||
Temple-Inland, Inc. | 1,200 | 64 | ||||||
The Dow Chemical Co. | 9,394 | 423 | ||||||
Titanium Metals Corp. * | 900 | 32 | ||||||
United States Steel Corp. | 900 | 97 | ||||||
Vulcan Materials Co. | 800 | 68 | ||||||
Weyerhaeuser Co. | 2,300 | 175 | ||||||
4,455 | ||||||||
Media 0.5% | ||||||||
CBS Corp., Class B | 7,905 | 227 | ||||||
Clear Channel Communications, Inc. | 5,217 | 197 | ||||||
Comcast Corp., Class A * | 31,764 | 669 | ||||||
Dow Jones & Co., Inc. | 800 | 48 | ||||||
Gannett Co., Inc. | 2,500 | 106 | ||||||
Meredith Corp. | 500 | 31 | ||||||
News Corp., Class A | 24,300 | 527 | ||||||
Omnicom Group, Inc. | 3,600 | 183 | ||||||
The DIRECTV Group, Inc. * | 5,400 | 143 | ||||||
The E.W. Scripps Co., Class A | 800 | 36 | ||||||
The Interpublic Group of Cos., Inc. * | 3,700 | 38 | ||||||
The McGraw-Hill Cos., Inc. | 3,800 | 190 | ||||||
The New York Times Co., Class A | 1,400 | 27 | ||||||
The Walt Disney Co. | 20,119 | 697 | ||||||
Time Warner, Inc. | 39,250 | 717 | ||||||
Tribune Co. | 803 | 24 | ||||||
Viacom, Inc., Class B * | 6,905 | 285 | ||||||
4,145 | ||||||||
Pharmaceuticals & Biotechnology 1.3% | ||||||||
Abbott Laboratories | 15,300 | 836 | ||||||
Allergan, Inc. | 2,600 | 176 | ||||||
Amgen, Inc. * | 12,138 | 705 | ||||||
Applied Biosystems Group-Applera Corp. | 2,000 | 74 | ||||||
Barr Pharmaceuticals, Inc. * | 1,100 | 63 | ||||||
Biogen Idec, Inc. * | 3,125 | 233 | ||||||
Bristol-Myers Squibb Co. | 19,000 | 570 | ||||||
Celgene Corp. * | 2,600 | 172 | ||||||
Eli Lilly and Co. | 9,900 | 536 | ||||||
Forest Laboratories, Inc. * | 3,400 | 133 | ||||||
Genzyme Corp. * | 2,400 | 182 | ||||||
Gilead Sciences, Inc. * | 8,600 | 397 | ||||||
Johnson & Johnson | 29,254 | 1,906 | ||||||
King Pharmaceuticals, Inc. * | 2,133 | 23 | ||||||
Merck & Co., Inc. | 21,600 | 1,258 | ||||||
Millipore Corp. * | 400 | 31 | ||||||
Mylan Laboratories, Inc. | 2,600 | 39 | ||||||
PerkinElmer, Inc. | 1,000 | 28 | ||||||
Pfizer, Inc. | 73,476 | 1,808 | ||||||
Schering-Plough Corp. | 14,100 | 430 | ||||||
Thermo Fisher Scientific, Inc. * | 3,530 | 208 | ||||||
Waters Corp. * | 1,300 | 100 | ||||||
Watson Pharmaceuticals, Inc. * | 1,000 | 31 | ||||||
Wyeth | 13,100 | 637 | ||||||
10,576 | ||||||||
Real Estate 0.2% | ||||||||
Apartment Investment & Management Co., Class A | 900 | 42 | ||||||
AvalonBay Communities, Inc. | 600 | 73 | ||||||
Boston Properties, Inc. | 800 | 87 | ||||||
CB Richard Ellis Group, Inc., Class A * | 1,300 | 32 | ||||||
Developers Diversified Realty Corp. | 1,200 | 60 | ||||||
Equity Residential | 2,600 | 109 | ||||||
General Growth Properties, Inc. | 2,400 | 130 | ||||||
Host Hotels & Resorts, Inc. | 5,000 | 111 | ||||||
Kimco Realty Corp. | 431 | 18 | ||||||
Plum Creek Timber Co., Inc. | 1,700 | 76 | ||||||
ProLogis | 1,700 | 122 | ||||||
Public Storage | 800 | 65 | ||||||
Simon Property Group, Inc. | 2,200 | 229 | ||||||
Vornado Realty Trust | 1,200 | 134 | ||||||
1,288 | ||||||||
Retailing 0.6% | ||||||||
Abercrombie & Fitch Co., Class A | 800 | 63 | ||||||
Amazon.com, Inc. * | 3,000 | 267 | ||||||
AutoNation, Inc. * | 2,190 | 39 | ||||||
AutoZone, Inc. * | 800 | 100 | ||||||
Bed Bath & Beyond, Inc. * | 2,800 | 95 | ||||||
Best Buy Co., Inc. | 4,505 | 219 | ||||||
Big Lots, Inc. * | 1,100 | 26 | ||||||
Circuit City Stores, Inc. | 2,000 | 16 | ||||||
Dillard’s, Inc., Class A | 500 | 12 | ||||||
eBay, Inc. * | 11,036 | 398 | ||||||
Expedia, Inc. * | 2,000 | 65 | ||||||
Family Dollar Stores, Inc. | 1,700 | 43 | ||||||
Genuine Parts Co. | 1,800 | 88 | ||||||
IAC/InterActiveCorp * | 1,600 | 47 | ||||||
J.C. Penney Co., Inc. | 2,800 | 158 | ||||||
Kohl’s Corp. * | 3,200 | 176 | ||||||
Limited Brands, Inc. | 3,738 | 82 | ||||||
Lowe’s Cos., Inc. | 15,200 | 409 | ||||||
Macy’s, Inc. | 5,144 | 165 | ||||||
Nordstrom, Inc. | 2,600 | 103 | ||||||
Office Depot, Inc. * | 3,300 | 62 | ||||||
OfficeMax, Inc. | 700 | 22 | ||||||
RadioShack Corp. | 1,900 | 39 | ||||||
Sears Holdings Corp. * | 1,000 | 135 | ||||||
Staples, Inc. | 7,125 | 166 | ||||||
Target Corp. | 8,800 | 540 | ||||||
The Gap, Inc. | 5,300 | 100 | ||||||
The Home Depot, Inc. | 18,936 | 597 | ||||||
The Sherwin-Williams Co. | 1,200 | 77 | ||||||
The TJX Cos., Inc. | 5,200 | 150 | ||||||
Tiffany & Co. | 1,400 | 76 | ||||||
4,535 | ||||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||
Advanced Micro Devices, Inc. * | 3,840 | 50 | ||||||
Altera Corp. | 3,680 | 72 |
24 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Analog Devices, Inc. | 3,400 | 114 | ||||||
Applied Materials, Inc. | 16,200 | 315 | ||||||
Broadcom Corp., Class A * | 4,350 | 142 | ||||||
Intel Corp. | 59,030 | 1,588 | ||||||
KLA-Tencor Corp. | 1,800 | 95 | ||||||
Linear Technology Corp. | 3,000 | 99 | ||||||
LSI Corp. * | 3,000 | 20 | ||||||
MEMC Electronic Materials, Inc. * | 2,000 | 146 | ||||||
Microchip Technology, Inc. | 2,000 | 66 | ||||||
Micron Technology, Inc. * | 5,400 | 57 | ||||||
National Semiconductor Corp. | 3,400 | 85 | ||||||
Novellus Systems, Inc. * | 1,325 | 38 | ||||||
NVIDIA Corp. * | 4,200 | 149 | ||||||
Teradyne, Inc. * | 1,700 | 21 | ||||||
Texas Instruments, Inc. | 14,800 | 482 | ||||||
Xilinx, Inc. | 3,200 | 78 | ||||||
3,617 | ||||||||
Software & Services 1.0% | ||||||||
Adobe Systems, Inc. * | 4,800 | 230 | ||||||
Affiliated Computer Services, Inc., Class A * | 1,271 | 64 | ||||||
Akamai Technologies, Inc. * | 1,600 | 63 | ||||||
Autodesk, Inc. * | 2,400 | 117 | ||||||
Automatic Data Processing, Inc. | 5,700 | 283 | ||||||
BMC Software, Inc. * | 2,400 | 81 | ||||||
CA, Inc. | 5,625 | 149 | ||||||
Citrix Systems, Inc. * | 1,800 | 77 | ||||||
Cognizant Technology Solutions Corp., Class A * | 2,800 | 116 | ||||||
Computer Sciences Corp. * | 1,680 | 98 | ||||||
Compuware Corp. * | 3,600 | 36 | ||||||
Convergys Corp. * | 1,354 | 25 | ||||||
Electronic Arts, Inc. * | 2,866 | 175 | ||||||
Electronic Data Systems Corp. | 4,600 | 99 | ||||||
Fidelity National Information Services, Inc. | 1,600 | 74 | ||||||
Fiserv, Inc. * | 1,800 | 100 | ||||||
Google, Inc., Class A * | 2,100 | 1,485 | ||||||
Intuit, Inc. * | 3,944 | 127 | ||||||
Microsoft Corp. | 86,420 | 3,181 | ||||||
Novell, Inc. * | 3,200 | 24 | ||||||
Oracle Corp. * | 38,295 | 849 | ||||||
Paychex, Inc. | 3,600 | 151 | ||||||
Symantec Corp. * | 9,321 | 175 | ||||||
Unisys Corp. * | 3,100 | 19 | ||||||
VeriSign, Inc. * | 2,500 | 85 | ||||||
Western Union Co. | 7,888 | 174 | ||||||
Yahoo!, Inc. * | 12,600 | 392 | ||||||
8,449 | ||||||||
Technology Hardware & Equipment 1.3% | ||||||||
Agilent Technologies, Inc. * | 4,437 | 163 | ||||||
Apple, Inc. * | 8,000 | 1,520 | ||||||
Ciena Corp. * | 457 | 22 | ||||||
Cisco Systems, Inc. * | 61,500 | 2,033 | ||||||
Corning, Inc. | 13,900 | 337 | ||||||
Dell, Inc. * | 23,740 | 726 | ||||||
EMC Corp. * | 23,186 | 589 | ||||||
Flextronics International Ltd. * | 2,416 | 30 | ||||||
Hewlett-Packard Co. | 28,403 | 1,468 | ||||||
International Business Machines Corp. | 15,620 | 1,814 | ||||||
Jabil Circuit, Inc. | 1,998 | 43 | ||||||
JDS Uniphase Corp. * | 1,573 | 24 | ||||||
Juniper Networks, Inc. * | 4,200 | 151 | ||||||
Lexmark International, Inc., Class A * | 1,300 | 55 | ||||||
Molex, Inc. | 1,875 | 54 | ||||||
Motorola, Inc. | 24,131 | 453 | ||||||
Network Appliance, Inc. * | 3,400 | 107 | ||||||
QLogic Corp. * | 1,738 | 27 | ||||||
QUALCOMM, Inc. | 16,200 | 692 | ||||||
SanDisk Corp. * | 1,800 | 80 | ||||||
Sun Microsystems, Inc. * | 30,800 | 176 | ||||||
Tektronix, Inc. | 900 | 34 | ||||||
Tellabs, Inc. * | 4,000 | 35 | ||||||
Teradata Corp. * | 2,000 | 57 | ||||||
Tyco Electronics Ltd. | 4,950 | 177 | ||||||
Xerox Corp. * | 9,400 | 164 | ||||||
11,031 | ||||||||
Telecommunication Services 0.6% | ||||||||
ALLTEL Corp. | 3,730 | 265 | ||||||
AT&T, Inc. | 61,655 | 2,577 | ||||||
CenturyTel, Inc. | 1,350 | 59 | ||||||
Citizens Communications Co. | 2,576 | 34 | ||||||
Embarq Corp. | 1,428 | 76 | ||||||
Qwest Communications International, Inc. * | 15,773 | 113 | ||||||
Sprint Nextel Corp. | 28,569 | 488 | ||||||
Verizon Communications, Inc. | 27,258 | 1,256 | ||||||
Windstream Corp. | 3,856 | 52 | ||||||
4,920 | ||||||||
Transportation 0.3% | ||||||||
Burlington Northern Santa Fe Corp. | 3,800 | 331 | ||||||
C.H. Robinson Worldwide, Inc. | 1,700 | 85 | ||||||
CSX Corp. | 4,400 | 197 | ||||||
Expeditors International of Washington, Inc. | 2,000 | 101 | ||||||
FedEx Corp. | 2,920 | 302 | ||||||
Norfolk Southern Corp. | 3,600 | 186 | ||||||
Ryder System, Inc. | 400 | 19 | ||||||
Southwest Airlines Co. | 7,480 | 106 | ||||||
Union Pacific Corp. | 2,500 | 320 | ||||||
United Parcel Service, Inc., Class B | 10,818 | 813 | ||||||
2,460 | ||||||||
Utilities 0.5% | ||||||||
Allegheny Energy, Inc. * | 1,070 | 65 | ||||||
Ameren Corp. | 1,800 | 97 | ||||||
American Electric Power Co., Inc. | 3,860 | 186 | ||||||
CenterPoint Energy, Inc. | 2,949 | 49 | ||||||
CMS Energy Corp. | 1,000 | 17 | ||||||
Consolidated Edison, Inc. | 2,100 | 99 | ||||||
Constellation Energy Group | 1,700 | 161 | ||||||
Dominion Resources, Inc. | 2,878 | 264 | ||||||
DTE Energy Co. | 1,700 | 84 | ||||||
Duke Energy Corp. | 11,348 | 218 | ||||||
Dynegy, Inc., Class A * | 3,100 | 29 |
See financial notes 25
Table of Contents
Schwab MarketTrack Growth Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Edison International | 3,200 | 186 | ||||||
Entergy Corp. | 2,100 | 252 | ||||||
Exelon Corp. | 6,524 | 540 | ||||||
FirstEnergy Corp. | 3,195 | 223 | ||||||
FPL Group, Inc. | 3,800 | 260 | ||||||
Integrys Energy Group, Inc. | 165 | 9 | ||||||
Nicor, Inc. | 500 | 22 | ||||||
NiSource, Inc. | 2,646 | 54 | ||||||
PG&E Corp. | 4,000 | 196 | ||||||
Pinnacle West Capital Corp. | 800 | 32 | ||||||
PPL Corp. | 3,600 | 186 | ||||||
Progress Energy, Inc. | 2,475 | 119 | ||||||
Public Service Enterprise Group, Inc. | 2,300 | 220 | ||||||
Questar Corp. | 1,200 | 68 | ||||||
Sempra Energy | 2,103 | 129 | ||||||
Southern Co. | 7,200 | 264 | ||||||
TECO Energy, Inc. | 1,300 | 22 | ||||||
The AES Corp. * | 6,000 | 128 | ||||||
Xcel Energy, Inc. | 3,850 | 87 | ||||||
4,266 | ||||||||
Total Common Stock (Cost $69,090) | 136,936 | |||||||
Other Investment Companies 82.8% of net assets | ||||||||
Schwab Institutional Select S&P 500 Fund (a) | 16,696,644 | 206,871 | ||||||
Schwab International Index Fund, Select Shares (a) | 6,507,938 | 168,881 | ||||||
Schwab Small-Cap Index Fund, Select Shares (a) | 6,272,591 | 159,010 | ||||||
Schwab Total Bond Market Fund (a) | 12,149,316 | 119,063 | ||||||
Schwab Value Advantage Money Fund, Institutional Shares (a) | 28,469,371 | 28,469 | ||||||
Total Other Investment Companies (Cost $492,071) | 682,294 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investment 0.5% of net assets | ||||||||
Commercial Paper & Other Obligations 0.5% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 4,112 | 4,112 | ||||||
Total Short-Term Investments (Cost $4,112) | 4,112 | |||||||
End of Investments. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $570,325 and the unrealized appreciation and depreciation were $259,211 and ($6,194), respectively, with a net unrealized appreciation of $253,017. |
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
26 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds and stocks, at value (cost $492,152) | $682,555 | |||||
Investments in unaffiliated issuers, at value (cost $73,121) | + | 140,787 | ||||
Total investments, at value (cost $565,273) | 823,342 | |||||
Receivables: | ||||||
Fund shares sold | 788 | |||||
Dividends | 741 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 3 | ||||
Total assets | 824,875 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 585 | |||||
Investment adviser and administrator fees | 15 | |||||
Transfer agent and shareholder services fees | 15 | |||||
Fund shares redeemed | 626 | |||||
Accrued expenses | + | 55 | ||||
Total liabilities | 1,296 | |||||
Net Assets | ||||||
Total assets | 824,875 | |||||
Total liabilities | − | 1,296 | ||||
Net assets | $823,579 | |||||
Net Assets by Source | ||||||
Capital received from investors | 549,253 | |||||
Net investment income not yet distributed | 5,523 | |||||
Net realized capital gains | 10,734 | |||||
Net unrealized capital gains | 258,069 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $685,888 | 32,520 | $21.09 | ||||||||
P Shares | $137,691 | 6,525 | $21.10 |
See financial notes 27
Table of Contents
Schwab MarketTrack Growth Portfolio
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds and stocks | $16,299 | |||||
Dividends received from unaffiliated issuers | 2,546 | |||||
Interest | + | 237 | ||||
Total investment income | 19,082 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on sales of affiliated underlying funds | 2,872 | |||||
Net realized gains received from affiliated underlying funds | 16,620 | |||||
Net realized gains on unaffiliated investments | + | 331 | ||||
Net realized gains | 19,823 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on affiliated underlying funds and stocks | 50,666 | |||||
Net unrealized gains on unaffiliated investments | + | 14,444 | ||||
Net unrealized gains | 65,110 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,300 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 1,617 | |||||
P Shares | 135 | |||||
Shareholder reports | 43 | |||||
Portfolio accounting fees | 41 | |||||
Professional fees | 39 | |||||
Registration fees | 21 | |||||
Custodian fees | 15 | |||||
Trustees’ fees | 9 | |||||
Overdraft expense | 2 | |||||
Other expenses | + | 41 | ||||
Total expenses | 5,263 | |||||
Expense reduction by adviser and Schwab | − | 1,553 | ||||
Net expenses | 3,710 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 19,082 | |||||
Net expenses | − | 3,710 | ||||
Net investment income | 15,372 | |||||
Net realized gains | 19,823 | |||||
Net unrealized gains | + | 65,110 | ||||
Increase in net assets from operations | $100,305 |
28 See financial notes
Table of Contents
Schwab MarketTrack Growth Portfolio
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $15,372 | $11,553 | ||||||
Net realized gains | 19,823 | 11,678 | ||||||
Net unrealized gains | + | 65,110 | 78,692 | |||||
Increase in net assets from operations | 100,305 | 101,923 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 14,374 | 10,988 | ||||||
P Shares | + | 3,227 | — | |||||
Total distributions from net investment income | 17,601 | 10,988 | ||||||
Distributions from net realized gains | ||||||||
Investor Shares | 5,401 | — | ||||||
P Shares | + | 1,126 | — | |||||
Total distributions from net realized gains | 6,527 | — | ||||||
Total distributions | $24,128 | $10,988 |
Transactions in Fund Shares* |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 5,776 | $114,724 | 4,979 | $88,820 | ||||||||||||||
P Shares | + | 1,197 | 23,356 | 7,185 | 131,591 | |||||||||||||
Total shares sold | 6,973 | $138,080 | 12,164 | $220,411 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 999 | $19,078 | 616 | $10,669 | ||||||||||||||
P Shares | + | 228 | 4,353 | — | — | |||||||||||||
Total shares reinvested | 1,227 | $23,431 | 616 | $10,669 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (5,670 | ) | ($112,764 | ) | (13,275 | ) | ($240,466 | ) | ||||||||||
P Shares | + | (1,092 | ) | (21,946 | ) | (993 | ) | (18,069 | ) | |||||||||
Total shares redeemed | (6,762 | ) | ($134,710 | ) | (14,268 | ) | ($258,535 | ) | ||||||||||
Net transactions in fund shares | 1,438 | $26,801 | (1,488 | ) | ($27,455 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 37,607 | $720,601 | 39,095 | $657,121 | ||||||||||||||
Total increase or decrease | + | 1,438 | 102,978 | (1,488 | ) | 63,480 | ||||||||||||
End of period | 39,045 | $823,579 | 37,607 | $720,601 | ||||||||||||||
Net investment income not yet distributed | $5,523 | $3,726 |
* | The portfolio started to offer P Shares on 4/6/06. |
See financial notes 29
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | ||||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 17.04 | 15.46 | 14.66 | 13.78 | 12.05 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.47 | 0.38 | 0.34 | 0.29 | 0.25 | |||||||||||||||
Net realized and unrealized gains | 1.41 | 1.58 | 0.74 | 0.88 | 1.77 | |||||||||||||||
Total income from investment operations | 1.88 | 1.96 | 1.08 | 1.17 | 2.02 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.50 | ) | (0.34 | ) | (0.28 | ) | (0.29 | ) | (0.29 | ) | ||||||||||
Distributions from net realized gains | (0.29 | ) | (0.04 | ) | — | — | — | |||||||||||||
Total distributions | (0.79 | ) | (0.38 | ) | (0.28 | ) | (0.29 | ) | (0.29 | ) | ||||||||||
Net asset value at end of period | 18.13 | 17.04 | 15.46 | 14.66 | 13.78 | |||||||||||||||
Total return (%) | 11.38 | 12.92 | 7.41 | 8.61 | 17.12 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||
Gross operating expenses1 | 0.72 | 0.73 | 0.73 | 0.74 | 0.74 | |||||||||||||||
Net investment income | 2.65 | 2.35 | 2.20 | 2.03 | 1.98 | |||||||||||||||
Portfolio turnover rate | 6 | 8 | 25 | 11 | 17 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 598 | 534 | 519 | 541 | 516 |
1 The expenses incurred by underlying funds in which the portfolio invests are not included in this ratio.
30 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
15 | .3% | Common Stock | 46,798 | 91,456 | ||||||||
82 | .0% | Other Investment Companies | 383,880 | 490,863 | ||||||||
2 | .7% | Short-Term Investment | 15,831 | 15,831 | ||||||||
100 | .0% | Total Investments | 446,509 | 598,150 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 187 | |||||||||
100 | .0% | Total Net Assets | 598,337 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 15.3% of net assets | ||||||||
Automobiles & Components 0.1% | ||||||||
Ford Motor Co. * | 12,185 | 108 | ||||||
General Motors Corp. | 3,650 | 143 | ||||||
Harley-Davidson, Inc. | 1,700 | 88 | ||||||
Johnson Controls, Inc. | 3,600 | 157 | ||||||
The Goodyear Tire & Rubber Co. * | 1,600 | 48 | ||||||
544 | ||||||||
Banks 0.6% | ||||||||
BB&T Corp. | 3,600 | 133 | ||||||
Comerica, Inc. | 1,100 | 51 | ||||||
Commerce Bancorp, Inc. | 1,200 | 49 | ||||||
Countrywide Financial Corp. | 3,498 | 54 | ||||||
Fannie Mae | 6,300 | 359 | ||||||
Fifth Third Bancorp | 4,058 | 127 | ||||||
First Horizon National Corp. | 800 | 21 | ||||||
Freddie Mac | 4,500 | 235 | ||||||
Hudson City Bancorp, Inc. | 2,400 | 38 | ||||||
Huntington Bancshares, Inc. | 1,597 | 29 | ||||||
KeyCorp | 3,000 | 85 | ||||||
M&T Bank Corp. | 500 | 50 | ||||||
Marshall & Ilsley Corp. | 1,344 | 57 | ||||||
MGIC Investment Corp. | 700 | 14 | ||||||
National City Corp. | 4,100 | 99 | ||||||
PNC Financial Services Group, Inc. | 2,100 | 152 | ||||||
Regions Financial Corp. | 5,151 | 140 | ||||||
Sovereign Bancorp, Inc. | 1,890 | 27 | ||||||
SunTrust Banks, Inc. | 2,300 | 167 | ||||||
Synovus Financial Corp. | 1,900 | 50 | ||||||
U.S. Bancorp | 11,654 | 386 | ||||||
Wachovia Corp. | 12,596 | 576 | ||||||
Washington Mutual, Inc. | 6,234 | 174 | ||||||
Wells Fargo & Co. | 22,470 | 764 | ||||||
Zions Bancorp | 600 | 36 | ||||||
3,873 | ||||||||
Capital Goods 1.4% | ||||||||
3M Co. | 5,000 | 432 | ||||||
American Standard Cos., Inc. | 1,100 | 41 | ||||||
Caterpillar, Inc. | 4,300 | 321 | ||||||
Cooper Industries Ltd., Class A | 1,600 | 84 | ||||||
Cummins, Inc. | 600 | 72 | ||||||
Danaher Corp. | 2,000 | 171 | ||||||
Deere & Co. | 1,500 | 232 | ||||||
Dover Corp. | 1,400 | 64 | ||||||
Eaton Corp. | 1,000 | 93 | ||||||
Emerson Electric Co. | 5,600 | 293 | ||||||
Fluor Corp. | 500 | 79 | ||||||
General Dynamics Corp. | 2,600 | 237 | ||||||
General Electric Co. | 68,560 | 2,822 | ||||||
Goodrich Corp. | 700 | 49 | ||||||
Honeywell International, Inc. | 5,700 | 344 | ||||||
Illinois Tool Works, Inc. | 2,800 | 160 | ||||||
Ingersoll-Rand Co., Ltd., Class A | 2,200 | 111 | ||||||
ITT Corp. | 1,400 | 94 | ||||||
L-3 Communications Holdings, Inc. | 700 | 77 | ||||||
Lockheed Martin Corp. | 2,400 | 264 | ||||||
Masco Corp. | 3,000 | 72 | ||||||
Northrop Grumman Corp. | 2,456 | 205 | ||||||
PACCAR, Inc. | 2,362 | 131 | ||||||
Pall Corp. | 1,100 | 44 | ||||||
Parker Hannifin Corp. | 1,050 | 84 | ||||||
Precision Castparts Corp. | 900 | 135 | ||||||
Raytheon Co. | 3,200 | 204 | ||||||
Rockwell Automation, Inc. | 800 | 55 | ||||||
Rockwell Collins, Inc. | 1,200 | 90 | ||||||
Terex Corp. * | 500 | 37 | ||||||
Textron, Inc. | 2,000 | 138 | ||||||
The Boeing Co. | 5,484 | 541 | ||||||
Tyco International Ltd. | 3,237 | 133 | ||||||
United Technologies Corp. | 6,900 | 528 | ||||||
W.W. Grainger, Inc. | 600 | 54 | ||||||
8,491 | ||||||||
Commercial Services & Supplies 0.1% | ||||||||
Allied Waste Industries, Inc. * | 2,100 | 27 | ||||||
Avery Dennison Corp. | 700 | 40 | ||||||
Cintas Corp. | 402 | 15 | ||||||
Equifax, Inc. | 900 | 35 | ||||||
Monster Worldwide, Inc. * | 666 | 27 | ||||||
Pitney Bowes, Inc. | 1,600 | 64 | ||||||
R.R. Donnelley & Sons Co. | 1,800 | 72 | ||||||
Robert Half International, Inc. | 1,200 | 36 | ||||||
Waste Management, Inc. | 3,712 | 135 | ||||||
451 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Brunswick Corp. | 600 | 13 | ||||||
Centex Corp. | 800 | 20 | ||||||
Coach, Inc. * | 2,700 | 99 | ||||||
D.R. Horton, Inc. | 1,790 | 23 |
See financial notes 31
Table of Contents
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Eastman Kodak Co. | 2,000 | 57 | ||||||
Fortune Brands, Inc. | 1,000 | 84 | ||||||
Harman International Industries, Inc. | 300 | 25 | ||||||
Hasbro, Inc. | 1,275 | 38 | ||||||
Jones Apparel Group, Inc. | 800 | 17 | ||||||
KB Home | 600 | 17 | ||||||
Leggett & Platt, Inc. | 300 | 6 | ||||||
Lennar Corp., Class A | 900 | 21 | ||||||
Liz Claiborne, Inc. | 800 | 23 | ||||||
Mattel, Inc. | 2,825 | 59 | ||||||
Newell Rubbermaid, Inc. | 1,872 | 55 | ||||||
NIKE, Inc., Class B | 2,600 | 172 | ||||||
Polo Ralph Lauren Corp. | 500 | 34 | ||||||
Pulte Homes, Inc. | 700 | 10 | ||||||
Snap-on, Inc. | 650 | 32 | ||||||
The Black & Decker Corp. | 600 | 54 | ||||||
The Stanley Works | 600 | 35 | ||||||
VF Corp. | 800 | 70 | ||||||
Whirlpool Corp. | 271 | 21 | ||||||
985 | ||||||||
Consumer Services 0.3% | ||||||||
Apollo Group, Inc., Class A * | 1,100 | 87 | ||||||
Carnival Corp. | 2,870 | 138 | ||||||
Darden Restaurants, Inc. | 950 | 41 | ||||||
H&R Block, Inc. | 1,200 | 26 | ||||||
Harrah’s Entertainment, Inc. | 1,200 | 106 | ||||||
International Game Technology | 2,100 | 92 | ||||||
Marriott International, Inc., Class A | 2,200 | 90 | ||||||
McDonald’s Corp. | 8,100 | 484 | ||||||
Starbucks Corp. * | 4,880 | 130 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 1,200 | 68 | ||||||
Wendy’s International, Inc. | 800 | 28 | ||||||
Wyndham Worldwide Corp. | 1,283 | 42 | ||||||
YUM! Brands, Inc. | 4,120 | 166 | ||||||
1,498 | ||||||||
Diversified Financials 1.4% | ||||||||
American Capital Strategies Ltd. | 600 | 26 | ||||||
American Express Co. | 8,310 | 507 | ||||||
Ameriprise Financial, Inc. | 1,842 | 116 | ||||||
Bank of America Corp. | 30,427 | 1,469 | ||||||
Bank of New York Mellon Corp. | 7,422 | 363 | ||||||
Capital One Financial Corp. | 2,400 | 157 | ||||||
CIT Group, Inc. | 1,300 | 46 | ||||||
Citigroup, Inc. | 32,666 | 1,369 | ||||||
CME Group, Inc. | 230 | 153 | ||||||
Discover Financial Services | 3,605 | 70 | ||||||
E *TRADE Financial Corp. * | 2,400 | 27 | ||||||
Federated Investors, Inc., Class B | 700 | 30 | ||||||
Franklin Resources, Inc. | 1,210 | 157 | ||||||
Janus Capital Group, Inc. | 1,400 | 48 | ||||||
JPMorgan Chase & Co. | 23,413 | 1,100 | ||||||
Legg Mason, Inc. | 800 | 66 | ||||||
Lehman Brothers Holdings, Inc. | 3,600 | 228 | ||||||
Leucadia National Corp. | 1,000 | 51 | ||||||
Merrill Lynch & Co., Inc. | 5,900 | 390 | ||||||
Moody’s Corp. | 2,000 | 87 | ||||||
Morgan Stanley | 7,210 | 485 | ||||||
Northern Trust Corp. | 1,400 | 105 | ||||||
NYSE Euronext | 1,500 | 141 | ||||||
SLM Corp. | 2,200 | 104 | ||||||
State Street Corp. | 2,400 | 191 | ||||||
T. Rowe Price Group, Inc. | 2,000 | 129 | ||||||
The Bear Stearns Cos., Inc. | 902 | 102 | ||||||
The Charles Schwab Corp. (a) | 6,883 | 160 | ||||||
The Goldman Sachs Group, Inc. | 2,779 | 689 | ||||||
8,566 | ||||||||
Energy 1.7% | ||||||||
Anadarko Petroleum Corp. | 3,020 | 178 | ||||||
Apache Corp. | 2,048 | 213 | ||||||
Baker Hughes, Inc. | 1,750 | 152 | ||||||
BJ Services Co. | 1,200 | 30 | ||||||
Chesapeake Energy Corp. | 2,300 | 91 | ||||||
Chevron Corp. | 14,127 | 1,293 | ||||||
ConocoPhillips | 10,585 | 899 | ||||||
CONSOL Energy, Inc. | 1,200 | 68 | ||||||
Devon Energy Corp. | 2,600 | 243 | ||||||
El Paso Corp. | 3,222 | 57 | ||||||
ENSCO International, Inc. | 800 | 44 | ||||||
EOG Resources, Inc. | 1,518 | 135 | ||||||
Exxon Mobil Corp. | 37,910 | 3,487 | ||||||
Halliburton Co. | 6,748 | 266 | ||||||
Hess Corp. | 1,800 | 129 | ||||||
Marathon Oil Corp. | 4,436 | 262 | ||||||
Murphy Oil Corp. | 1,100 | 81 | ||||||
Nabors Industries Ltd. * | 2,000 | 56 | ||||||
National-Oilwell Varco, Inc. * | 2,260 | 166 | ||||||
Noble Corp. | 1,800 | 95 | ||||||
Noble Energy | 1,000 | 77 | ||||||
Occidental Petroleum Corp. | 5,400 | 373 | ||||||
Peabody Energy Corp. | 1,300 | 72 | ||||||
Rowan Cos., Inc. | 600 | 23 | ||||||
Schlumberger Ltd. | 7,800 | 753 | ||||||
Smith International, Inc. | 1,300 | 86 | ||||||
Spectra Energy Corp. | 3,756 | 98 | ||||||
Sunoco, Inc. | 500 | 37 | ||||||
Tesoro Corp. | 900 | 55 | ||||||
The Williams Cos., Inc. | 3,000 | 109 | ||||||
Transocean, Inc. * | 1,616 | 193 | ||||||
Valero Energy Corp. | 4,000 | 282 | ||||||
Weatherford International Ltd. * | 1,820 | 118 | ||||||
XTO Energy, Inc. | 2,266 | 150 | ||||||
10,371 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Costco Wholesale Corp. | 3,000 | 202 | ||||||
CVS Caremark Corp. | 10,189 | 425 | ||||||
Safeway, Inc. | 2,800 | 95 | ||||||
Supervalu, Inc. | 786 | 30 | ||||||
Sysco Corp. | 3,500 | 120 | ||||||
The Kroger Co. | 5,300 | 156 | ||||||
Wal-Mart Stores, Inc. | 16,640 | 752 | ||||||
Walgreen Co. | 6,600 | 262 | ||||||
Whole Foods Market, Inc. | 800 | 40 | ||||||
2,082 |
32 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Altria Group, Inc. | 13,640 | 995 | ||||||
Anheuser-Busch Cos., Inc. | 5,200 | 267 | ||||||
Archer-Daniels-Midland Co. | 3,746 | 134 | ||||||
Brown-Forman Corp., Class B | 204 | 15 | ||||||
Campbell Soup Co. | 1,200 | 44 | ||||||
Coca-Cola Enterprises, Inc. | 1,800 | 46 | ||||||
ConAgra Foods, Inc. | 3,800 | 90 | ||||||
Constellation Brands, Inc., Class A * | 1,290 | 32 | ||||||
Dean Foods Co. | 800 | 22 | ||||||
General Mills, Inc. | 2,392 | 138 | ||||||
H.J. Heinz Co. | 2,300 | 108 | ||||||
Kellogg Co. | 1,700 | 90 | ||||||
Kraft Foods, Inc., Class A | 9,439 | 315 | ||||||
McCormick & Co., Inc. | 900 | 32 | ||||||
Molson Coors Brewing Co., Class B | 400 | 23 | ||||||
PepsiCo, Inc. | 11,070 | 816 | ||||||
Reynolds American, Inc. | 1,228 | 79 | ||||||
Sara Lee Corp. | 5,100 | 84 | ||||||
The Coca-Cola Co. | 13,810 | 853 | ||||||
The Hershey Co. | 700 | 30 | ||||||
The Pepsi Bottling Group, Inc. | 926 | 40 | ||||||
Tyson Foods, Inc., Class A | 1,700 | 27 | ||||||
UST, Inc. | 1,100 | 59 | ||||||
Wm. Wrigley Jr. Co. | 1,000 | 62 | ||||||
4,401 | ||||||||
Health Care Equipment & Services 0.6% | ||||||||
Aetna, Inc. | 4,136 | 232 | ||||||
AmerisourceBergen Corp. | 1,400 | 66 | ||||||
Baxter International, Inc. | 4,600 | 276 | ||||||
Becton, Dickinson & Co. | 1,800 | 150 | ||||||
Boston Scientific Corp. * | 7,307 | 101 | ||||||
C.R. Bard, Inc. | 600 | 50 | ||||||
Cardinal Health, Inc. | 2,775 | 189 | ||||||
CIGNA Corp. | 3,000 | 158 | ||||||
Coventry Health Care, Inc. * | 1,250 | 76 | ||||||
Covidien Ltd. | 3,237 | 135 | ||||||
Express Scripts, Inc. * | 2,000 | 126 | ||||||
Hospira, Inc. * | 1,020 | 42 | ||||||
Humana, Inc. * | 1,300 | 98 | ||||||
IMS Health, Inc. | 1,500 | 38 | ||||||
Laboratory Corp. of America Holdings * | 900 | 62 | ||||||
Manor Care, Inc. | 100 | 7 | ||||||
McKesson Corp. | 2,173 | 144 | ||||||
Medco Health Solutions, Inc. * | 1,784 | 168 | ||||||
Medtronic, Inc. | 7,800 | 370 | ||||||
Patterson Cos., Inc. * | 900 | 35 | ||||||
Quest Diagnostics, Inc. | 670 | 36 | ||||||
St. Jude Medical, Inc. * | 2,120 | 86 | ||||||
Stryker Corp. | 1,946 | 138 | ||||||
Tenet Healthcare Corp. * | 3,150 | 11 | ||||||
UnitedHealth Group, Inc. | 9,100 | 447 | ||||||
Varian Medical Systems, Inc. * | 700 | 34 | ||||||
WellPoint, Inc. * | 4,252 | 337 | ||||||
Zimmer Holdings, Inc. * | 1,500 | 104 | ||||||
3,716 | ||||||||
Household & Personal Products 0.4% | ||||||||
Avon Products, Inc. | 3,000 | 123 | ||||||
Colgate-Palmolive Co. | 3,600 | 274 | ||||||
Kimberly-Clark Corp. | 3,380 | 240 | ||||||
The Clorox Co. | 1,300 | 81 | ||||||
The Estee Lauder Cos., Inc., Class A | 700 | 31 | ||||||
The Procter & Gamble Co. | 21,032 | 1,462 | ||||||
2,211 | ||||||||
Insurance 0.7% | ||||||||
ACE Ltd. | 1,700 | 103 | ||||||
AFLAC, Inc. | 3,300 | 207 | ||||||
Ambac Financiall Group, Inc. | 884 | 32 | ||||||
American International Group, Inc. | 17,342 | 1,095 | ||||||
Aon Corp. | 2,025 | 92 | ||||||
Assurant, Inc. | 700 | 41 | ||||||
Cincinnati Financial Corp. | 623 | 25 | ||||||
Genworth Financial, Inc., Class A | 3,300 | 90 | ||||||
Lincoln National Corp. | 2,243 | 140 | ||||||
Loews Corp. | 3,300 | 162 | ||||||
Marsh & McLennan Cos., Inc. | 3,600 | 93 | ||||||
MBIA, Inc. | 550 | 24 | ||||||
MetLife, Inc. | 5,286 | 364 | ||||||
Principal Financial Group, Inc. | 2,329 | 158 | ||||||
Prudential Financial, Inc. | 3,500 | 338 | ||||||
SAFECO Corp. | 800 | 46 | ||||||
The Allstate Corp. | 4,700 | 246 | ||||||
The Chubb Corp. | 3,000 | 160 | ||||||
The Hartford Financial Services Group, Inc. | 2,300 | 223 | ||||||
The Progressive Corp. | 6,000 | 111 | ||||||
The Travelers Cos., Inc. | 4,841 | 253 | ||||||
Torchmark Corp. | 800 | 52 | ||||||
Unum Group | 2,757 | 64 | ||||||
XL Capital Ltd., Class A | 800 | 58 | ||||||
4,177 | ||||||||
Materials 0.5% | ||||||||
Air Products and Chemicals, Inc. | 1,500 | 147 | ||||||
Alcoa, Inc. | 5,648 | 224 | ||||||
Allegheny Technologies, Inc. | 492 | 50 | ||||||
Ashland, Inc. | 500 | 29 | ||||||
Ball Corp. | 800 | 40 | ||||||
Bemis Co., Inc. | 600 | 17 | ||||||
E.I. du Pont De Nemours & Co. | 6,484 | 321 | ||||||
Eastman Chemical Co. | 600 | 40 | ||||||
Ecolab, Inc. | 1,200 | 57 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 1,823 | 215 | ||||||
Hercules, Inc. | 1,300 | 24 | ||||||
International Flavors & Fragrances, Inc. | 500 | 26 | ||||||
International Paper Co. | 3,166 | 117 | ||||||
MeadWestvaco Corp. | 579 | 19 | ||||||
Monsanto Co. | 3,854 | 376 | ||||||
Newmont Mining Corp. | 2,754 | 140 | ||||||
Nucor Corp. | 2,400 | 149 | ||||||
Pactiv Corp. * | 1,000 | 27 |
See financial notes 33
Table of Contents
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
PPG Industries, Inc. | 1,200 | 90 | ||||||
Praxair, Inc. | 2,000 | 171 | ||||||
Rohm & Haas Co. | 1,421 | 74 | ||||||
Sealed Air Corp. | 1,242 | 31 | ||||||
Sigma-Aldrich Corp. | 1,000 | 52 | ||||||
Temple-Inland, Inc. | 800 | 43 | ||||||
The Dow Chemical Co. | 6,049 | 272 | ||||||
Titanium Metals Corp. * | 600 | 21 | ||||||
United States Steel Corp. | 700 | 76 | ||||||
Vulcan Materials Co. | 400 | 34 | ||||||
Weyerhaeuser Co. | 1,400 | 106 | ||||||
2,988 | ||||||||
Media 0.5% | ||||||||
CBS Corp., Class B | 5,309 | 153 | ||||||
Clear Channel Communications, Inc. | 4,080 | 154 | ||||||
Comcast Corp., Class A * | 20,691 | 436 | ||||||
Dow Jones & Co., Inc. | 600 | 36 | ||||||
Gannett Co., Inc. | 1,700 | 72 | ||||||
Meredith Corp. | 300 | 19 | ||||||
News Corp., Class A | 16,300 | 353 | ||||||
Omnicom Group, Inc. | 2,400 | 122 | ||||||
The DIRECTV Group, Inc. * | 3,600 | 95 | ||||||
The E.W. Scripps Co., Class A | 600 | 27 | ||||||
The Interpublic Group of Cos., Inc. * | 2,500 | 26 | ||||||
The McGraw-Hill Cos., Inc. | 2,400 | 120 | ||||||
The New York Times Co., Class A | 100 | 2 | ||||||
The Walt Disney Co. | 14,117 | 489 | ||||||
Time Warner, Inc. | 26,470 | 483 | ||||||
Tribune Co. | 254 | 8 | ||||||
Viacom, Inc., Class B * | 4,609 | 190 | ||||||
2,785 | ||||||||
Pharmaceuticals & Biotechnology 1.2% | ||||||||
Abbott Laboratories | 10,200 | 557 | ||||||
Allergan, Inc. | 1,800 | 122 | ||||||
Amgen, Inc. * | 7,840 | 456 | ||||||
Applied Biosystems Group-Applera Corp. | 1,400 | 52 | ||||||
Barr Pharmaceuticals, Inc. * | 600 | 34 | ||||||
Biogen Idec, Inc. * | 2,550 | 190 | ||||||
Bristol-Myers Squibb Co. | 12,800 | 384 | ||||||
Celgene Corp. * | 1,800 | 119 | ||||||
Eli Lilly and Co. | 6,500 | 352 | ||||||
Forest Laboratories, Inc. * | 2,400 | 94 | ||||||
Genzyme Corp. * | 1,700 | 129 | ||||||
Gilead Sciences, Inc. * | 5,960 | 275 | ||||||
Johnson & Johnson | 19,872 | 1,295 | ||||||
King Pharmaceuticals, Inc. * | 1,388 | 15 | ||||||
Merck & Co., Inc. | 14,500 | 845 | ||||||
Millipore Corp. * | 200 | 15 | ||||||
Mylan, Inc. | 1,700 | 26 | ||||||
PerkinElmer, Inc. | 600 | 16 | ||||||
Pfizer, Inc. | 49,386 | 1,215 | ||||||
Schering-Plough Corp. | 10,300 | 314 | ||||||
Thermo Fisher Scientific, Inc. * | 2,340 | 138 | ||||||
Waters Corp. * | 900 | 69 | ||||||
Watson Pharmaceuticals, Inc. * | 1,100 | 34 | ||||||
Wyeth | 8,800 | 428 | ||||||
7,174 | ||||||||
Real Estate 0.1% | ||||||||
Apartment Investment & Management Co., Class A | 600 | 28 | ||||||
AvalonBay Communities, Inc. | 400 | 49 | ||||||
Boston Properties, Inc. | 500 | 54 | ||||||
CB Richard Ellis Group, Inc., Class A * | 900 | 22 | ||||||
Developers Diversified Realty Corp. | 800 | 40 | ||||||
Equity Residential | 1,700 | 71 | ||||||
General Growth Properties, Inc. | 1,600 | 87 | ||||||
Host Hotels & Resorts, Inc. | 3,400 | 75 | ||||||
Kimco Realty Corp. | 1,001 | 42 | ||||||
Plum Creek Timber Co., Inc. | 1,200 | 54 | ||||||
ProLogis | 1,200 | 86 | ||||||
Public Storage | 600 | 49 | ||||||
Simon Property Group, Inc. | 1,450 | 151 | ||||||
Vornado Realty Trust | 800 | 89 | ||||||
897 | ||||||||
Retailing 0.5% | ||||||||
Abercrombie & Fitch Co., Class A | 500 | 39 | ||||||
Amazon.com, Inc. * | 2,000 | 178 | ||||||
AutoNation, Inc. * | 100 | 2 | ||||||
AutoZone, Inc. * | 500 | 62 | ||||||
Bed Bath & Beyond, Inc. * | 1,800 | 61 | ||||||
Best Buy Co., Inc. | 2,250 | 109 | ||||||
Big Lots, Inc. * | 1,200 | 29 | ||||||
Circuit City Stores, Inc. | 1,400 | 11 | ||||||
Dillard’s, Inc., Class A | 700 | 16 | ||||||
eBay, Inc. * | 7,416 | 268 | ||||||
Expedia, Inc. * | 1,400 | 46 | ||||||
Family Dollar Stores, Inc. | 1,100 | 28 | ||||||
Genuine Parts Co. | 650 | 32 | ||||||
IAC/InterActiveCorp * | 1,100 | 32 | ||||||
J.C. Penney Co., Inc. | 1,700 | 96 | ||||||
Kohl’s Corp. * | 2,200 | 121 | ||||||
Limited Brands, Inc. | 1,591 | 35 | ||||||
Lowe’s Cos., Inc. | 10,000 | 269 | ||||||
Macy’s, Inc. | 3,508 | 112 | ||||||
Nordstrom, Inc. | 1,800 | 71 | ||||||
Office Depot, Inc. * | 1,800 | 34 | ||||||
OfficeMax, Inc. | 600 | 19 | ||||||
RadioShack Corp. | 900 | 18 | ||||||
Sears Holdings Corp. * | 673 | 91 | ||||||
Staples, Inc. | 4,575 | 107 | ||||||
Target Corp. | 5,800 | 356 | ||||||
The Gap, Inc. | 3,862 | 73 | ||||||
The Home Depot, Inc. | 12,240 | 386 | ||||||
The Sherwin-Williams Co. | 1,100 | 70 | ||||||
The TJX Cos., Inc. | 3,600 | 104 | ||||||
Tiffany & Co. | 350 | 19 | ||||||
2,894 | ||||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||
Advanced Micro Devices, Inc. * | 2,040 | 27 | ||||||
Altera Corp. | 2,546 | 50 |
34 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Analog Devices, Inc. | 2,300 | 77 | ||||||
Applied Materials, Inc. | 10,900 | 212 | ||||||
Broadcom Corp., Class A * | 3,000 | 98 | ||||||
Intel Corp. | 38,360 | 1,032 | ||||||
KLA-Tencor Corp. | 1,600 | 84 | ||||||
Linear Technology Corp. | 1,300 | 43 | ||||||
LSI Corp. * | 2,000 | 13 | ||||||
MEMC Electronic Materials, Inc. * | 1,500 | 110 | ||||||
Microchip Technology, Inc. | 1,500 | 50 | ||||||
Micron Technology, Inc. * | 3,600 | 38 | ||||||
National Semiconductor Corp. | 2,200 | 55 | ||||||
Novellus Systems, Inc. * | 900 | 25 | ||||||
NVIDIA Corp. * | 4,050 | 143 | ||||||
Teradyne, Inc. * | 1,100 | 14 | ||||||
Texas Instruments, Inc. | 9,800 | 319 | ||||||
Xilinx, Inc. | 2,100 | 51 | ||||||
2,441 | ||||||||
Software & Services 1.0% | ||||||||
Adobe Systems, Inc. * | 3,900 | 187 | ||||||
Affiliated Computer Services, Inc., Class A * | 465 | 24 | ||||||
Akamai Technologies, Inc. * | 1,000 | 39 | ||||||
Autodesk, Inc. * | 1,600 | 78 | ||||||
Automatic Data Processing, Inc. | 3,900 | 193 | ||||||
BMC Software, Inc. * | 1,600 | 54 | ||||||
CA, Inc. | 3,825 | 101 | ||||||
Citrix Systems, Inc. * | 1,200 | 52 | ||||||
Cognizant Technology Solutions Corp., Class A * | 1,800 | 75 | ||||||
Computer Sciences Corp. * | 1,090 | 64 | ||||||
Compuware Corp. * | 2,400 | 24 | ||||||
Convergys Corp. * | 1,369 | 25 | ||||||
Electronic Arts, Inc. * | 2,292 | 140 | ||||||
Electronic Data Systems Corp. | 3,800 | 82 | ||||||
Fidelity National Information Services, Inc. | 1,000 | 46 | ||||||
Fiserv, Inc. * | 1,200 | 66 | ||||||
Google, Inc., Class A * | 1,400 | 990 | ||||||
Intuit, Inc. * | 2,654 | 85 | ||||||
Microsoft Corp. | 58,390 | 2,149 | ||||||
Novell, Inc. * | 2,200 | 17 | ||||||
Oracle Corp. * | 25,721 | 570 | ||||||
Paychex, Inc. | 2,475 | 103 | ||||||
Symantec Corp. * | 5,018 | 94 | ||||||
Unisys Corp. * | 2,100 | 13 | ||||||
VeriSign, Inc. * | 1,600 | 55 | ||||||
Western Union Co. | 5,704 | 126 | ||||||
Yahoo!, Inc. * | 7,500 | 233 | ||||||
5,685 | ||||||||
Technology Hardware & Equipment 1.2% | ||||||||
Agilent Technologies, Inc. * | 2,917 | 108 | ||||||
Apple, Inc. * | 5,430 | 1,031 | ||||||
Ciena Corp. * | 300 | 14 | ||||||
Cisco Systems, Inc. * | 42,100 | 1,392 | ||||||
Corning, Inc. | 9,550 | 232 | ||||||
Dell, Inc. * | 16,500 | 505 | ||||||
EMC Corp. * | 15,562 | 395 | ||||||
Flextronics International Ltd. * | 1,621 | 20 | ||||||
Hewlett-Packard Co. | 18,324 | 947 | ||||||
International Business Machines Corp. | 10,200 | 1,184 | ||||||
Jabil Circuit, Inc. | 441 | 10 | ||||||
JDS Uniphase Corp. * | 1,058 | 16 | ||||||
Juniper Networks, Inc. * | 3,000 | 108 | ||||||
Lexmark International, Inc., Class A * | 800 | 34 | ||||||
Molex, Inc. | 250 | 7 | ||||||
Motorola, Inc. | 16,150 | 303 | ||||||
Network Appliance, Inc. * | 2,800 | 88 | ||||||
QLogic Corp. * | 1,170 | 18 | ||||||
QUALCOMM, Inc. | 10,760 | 460 | ||||||
SanDisk Corp. * | 1,200 | 53 | ||||||
Sun Microsystems, Inc. * | 25,100 | 143 | ||||||
Tektronix, Inc. | 500 | 19 | ||||||
Tellabs, Inc. * | 2,700 | 24 | ||||||
Teradata Corp. * | 1,200 | 34 | ||||||
Tyco Electronics Ltd. | 3,237 | 116 | ||||||
Xerox Corp. * | 7,000 | 122 | ||||||
7,383 | ||||||||
Telecommunication Services 0.6% | ||||||||
ALLTEL Corp. | 2,510 | 178 | ||||||
AT&T, Inc. | 41,406 | 1,730 | ||||||
CenturyTel, Inc. | 900 | 40 | ||||||
Citizens Communications Co. | 1,732 | 23 | ||||||
Embarq Corp. | 943 | 50 | ||||||
Qwest Communications International, Inc. * | 11,922 | 86 | ||||||
Sprint Nextel Corp. | 18,876 | 323 | ||||||
Verizon Communications, Inc. | 19,036 | 877 | ||||||
Windstream Corp. | 2,595 | 35 | ||||||
3,342 | ||||||||
Transportation 0.3% | ||||||||
Burlington Northern Santa Fe Corp. | 2,500 | 218 | ||||||
C.H. Robinson Worldwide, Inc. | 1,500 | 75 | ||||||
CSX Corp. | 3,000 | 134 | ||||||
Expeditors International of Washington, Inc. | 1,400 | 71 | ||||||
FedEx Corp. | 2,160 | 223 | ||||||
Norfolk Southern Corp. | 2,500 | 129 | ||||||
Ryder System, Inc. | 400 | 19 | ||||||
Southwest Airlines Co. | 5,137 | 73 | ||||||
Union Pacific Corp. | 1,700 | 218 | ||||||
United Parcel Service, Inc., Class B | 6,785 | 510 | ||||||
1,670 | ||||||||
Utilities 0.5% | ||||||||
Allegheny Energy, Inc. * | 720 | 44 | ||||||
Ameren Corp. | 1,200 | 65 | ||||||
American Electric Power Co., Inc. | 2,880 | 139 | ||||||
CenterPoint Energy, Inc. | 1,924 | 32 | ||||||
CMS Energy Corp. | 700 | 12 | ||||||
Consolidated Edison, Inc. | 1,500 | 71 | ||||||
Constellation Energy Group | 1,000 | 95 | ||||||
Dominion Resources, Inc. | 1,837 | 168 | ||||||
DTE Energy Co. | 1,000 | 50 | ||||||
Duke Energy Corp. | 7,512 | 144 | ||||||
Dynegy, Inc., Class A * | 2,100 | 19 |
See financial notes 35
Table of Contents
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Edison International | 2,200 | 128 | ||||||
Entergy Corp. | 1,500 | 180 | ||||||
Exelon Corp. | 4,324 | 358 | ||||||
FirstEnergy Corp. | 2,030 | 141 | ||||||
FPL Group, Inc. | 2,600 | 178 | ||||||
Integrys Energy Group, Inc. | 165 | 9 | ||||||
Nicor, Inc. | 300 | 13 | ||||||
NiSource, Inc. | 1,651 | 34 | ||||||
PG&E Corp. | 2,700 | 132 | ||||||
Pinnacle West Capital Corp. | 600 | 24 | ||||||
PPL Corp. | 2,000 | 103 | ||||||
Progress Energy, Inc. | 1,593 | 76 | ||||||
Public Service Enterprise Group, Inc. | 1,500 | 143 | ||||||
Questar Corp. | 800 | 46 | ||||||
Sempra Energy | 1,360 | 84 | ||||||
Southern Co. | 4,500 | 165 | ||||||
TECO Energy, Inc. | 900 | 15 | ||||||
The AES Corp. * | 4,900 | 105 | ||||||
Xcel Energy, Inc. | 2,585 | 58 | ||||||
2,831 | ||||||||
Total Common Stock (Cost $46,798) | 91,456 | |||||||
Other Investment Companies 82.0% of net assets | ||||||||
Schwab Institutional Select S&P 500 Fund (a) | 7,979,027 | 98,860 | ||||||
Schwab International Index Fund, Select Shares (a) | 3,598,026 | 93,369 | ||||||
Schwab Small-Cap Index Fund, Select Shares (a) | 3,400,739 | 86,209 | ||||||
Schwab Total Bond Market Fund (a) | 20,422,053 | 200,136 | ||||||
Schwab Value Advantage Money Fund, Institutional Shares (a) | 12,289,369 | 12,289 | ||||||
Total Other Investment Companies (Cost $383,880) | 490,863 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investment 2.7% of net assets | ||||||||
Commercial Paper & Other Obligations 2.7% | ||||||||
Wells Fargo, Grand Cayman Time Deposit | ||||||||
4.75%, 11/01/07 | 15,831 | 15,831 | ||||||
Total Short-Term Investment (Cost $15,831) | 15,831 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $449,381, and the unrealized appreciation and depreciation were $152,856 and ($4,087), respectively, with net unrealized appreciation of $148,769. |
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
36 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds and stocks, at value (cost $383,928) | $491,023 | |||||
Investments in unaffiliated issuers, at value (cost $62,581) | + | 107,127 | ||||
Total investments, at value (cost $446,509) | 598,150 | |||||
Receivables: | ||||||
Dividends | 1,041 | |||||
Fund shares sold | 684 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 2 | ||||
Total assets | 599,879 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 951 | |||||
Investment adviser and administrator fees | 12 | |||||
Transfer agent and shareholder services fees | 12 | |||||
Fund shares redeemed | 518 | |||||
Accrued expenses | + | 49 | ||||
Total liabilities | 1,542 | |||||
Net Assets | ||||||
Total assets | 599,879 | |||||
Total liabilities | − | 1,542 | ||||
Net assets | $598,337 | |||||
Net Assets by Source | ||||||
Capital received from investors | 431,787 | |||||
Net investment income not yet distributed | 8,725 | |||||
Net realized capital gains | 6,184 | |||||
Net unrealized capital gains | 151,641 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$598,337 | 33,001 | $18.13 |
See financial notes 37
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds and stocks | $15,895 | |||||
Dividends received from unaffiliated issuers | 1,700 | |||||
Interest | + | 364 | ||||
Total investment income | 17,959 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on sales of affiliated underlying funds | 1,599 | |||||
Net realized gains received from affiliated underlying funds | 9,244 | |||||
Net realized gains on unaffiliated investments | + | 499 | ||||
Net realized gains | 11,342 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on unaffiliated investments and stocks | 25,506 | |||||
Net unrealized gains on affiliated underlying funds | + | 9,371 | ||||
Net unrealized gains | 34,877 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,470 | |||||
Transfer agent and shareholder service fees | 1,423 | |||||
Portfolio accounting fees | 36 | |||||
Professional fees | 36 | |||||
Registration fees | 26 | |||||
Shareholder reports | 23 | |||||
Custodian fees | 13 | |||||
Overdraft expense | 11 | |||||
Trustees’ fees | 8 | |||||
Other expenses | + | 38 | ||||
Total expenses | 4,084 | |||||
Expense reduction by adviser and Schwab | − | 1,227 | ||||
Net expenses | 2,857 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 17,959 | |||||
Net expenses | − | 2,857 | ||||
Net investment income | 15,102 | |||||
Net realized gains | 11,342 | |||||
Net unrealized gains | + | 34,877 | ||||
Increase in net assets from operations | $61,321 |
38 See financial notes
Table of Contents
Schwab MarketTrack Balanced Portfolio
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $15,102 | $12,264 | ||||||
Net realized gains | 11,342 | 9,257 | ||||||
Net unrealized gains | + | 34,877 | 42,200 | |||||
Increase in net assets from operations | 61,321 | 63,721 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | 15,639 | 11,244 | ||||||
Distributions from net realized gains | + | 9,027 | 1,491 | |||||
Total distributions | $24,666 | $12,735 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 6,844 | $118,314 | 3,966 | $64,139 | ||||||||||||||
Shares Reinvested | 1,416 | 23,639 | 779 | 12,213 | ||||||||||||||
Shares Redeemed | + | (6,605 | ) | (114,366 | ) | (6,981 | ) | (112,331 | ) | |||||||||
Net transactions in fund shares | 1,655 | $27,587 | (2,236 | ) | ($35,979 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 31,346 | $534,095 | 33,582 | $519,088 | ||||||||||||||
Total increase or decrease | + | 1,655 | 64,242 | (2,236 | ) | 15,007 | ||||||||||||
End of period | 33,001 | $598,337 | 31,346 | $534,095 | ||||||||||||||
Net investment income not yet distributed | $8,725 | $7,026 |
See financial notes 39
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 14.33 | 13.42 | 13.09 | 12.53 | 11.37 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.49 | 0.42 | 0.36 | 0.34 | 0.29 | |||||||||||||||
Net realized and unrealized gains | 0.78 | 0.92 | 0.32 | 0.57 | 1.16 | |||||||||||||||
Total income from investment operations | 1.27 | 1.34 | 0.68 | 0.91 | 1.45 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.51 | ) | (0.42 | ) | (0.35 | ) | (0.35 | ) | (0.29 | ) | ||||||||||
Distributions from net realized gains | (0.19 | ) | (0.01 | ) | — | — | — | |||||||||||||
Total distributions | (0.70 | ) | (0.43 | ) | (0.35 | ) | (0.35 | ) | (0.29 | ) | ||||||||||
Net asset value at end of period | 14.90 | 14.33 | 13.42 | 13.09 | 12.53 | |||||||||||||||
Total return (%) | 9.12 | 10.13 | 5.24 | 7.38 | 12.98 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||
Gross operating expenses1 | 0.73 | 0.74 | 0.75 | 0.75 | 0.75 | |||||||||||||||
Net investment income | 3.37 | 3.12 | 2.67 | 2.70 | 2.44 | |||||||||||||||
Portfolio turnover rate | 4 | 11 | 9 | 10 | 17 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 252 | 232 | 300 | 290 | 289 |
11/01/06- | 4/06/062- | |||||||
P Shares | 10/31/07 | 10/31/06 | ||||||
Per—Share Data ($) | ||||||||
Net asset value at beginning of period | 14.32 | 13.93 | ||||||
Income from investment operations: | ||||||||
Net investment income | 0.51 | 0.23 | ||||||
Net realized and unrealized gains | 0.78 | 0.35 | ||||||
Total income from investment operations | 1.29 | 0.58 | ||||||
Less distributions: | ||||||||
Distributions from net investment income | (0.55 | ) | (0.19 | ) | ||||
Distributions from net realized gains | (0.19 | ) | — | |||||
Total distributions | (0.74 | ) | (0.19 | ) | ||||
Net asset value at end of period | 14.87 | 14.32 | ||||||
Total return (%) | 9.32 | 4.22 | 3 | |||||
Ratios/Supplemental Data (%) | ||||||||
Ratios to average net assets: | ||||||||
Net operating expenses1 | 0.35 | 0.35 | 4 | |||||
Gross operating expenses1 | 0.58 | 0.60 | 4 | |||||
Net investment income | 3.48 | 2.81 | 4 | |||||
Portfolio turnover rate | 4 | 11 | 3 | |||||
Net assets, end of period ($ x 1,000,000) | 99 | 79 |
1 The expenses incurred by underlying funds in which the portfolio invests are not included in this ratio.
2 Commencement of operations.
3 Not annualized.
4 Annualized.
40 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
6 | .2% | Common Stock | 12,090 | 21,482 | ||||||||
92 | .1% | Other Investment Companies | 271,165 | 323,139 | ||||||||
1 | .7% | Short-Term Investment | 6,001 | 6,001 | ||||||||
100 | .0% | Total Investments | 289,256 | 350,622 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 158 | |||||||||
100 | .0% | Total Net Assets | 350,780 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 6.2% of net assets | ||||||||
Automobiles & Components 0.0% | ||||||||
Ford Motor Co. * | 2,921 | 26 | ||||||
General Motors Corp. | 825 | 32 | ||||||
Harley-Davidson, Inc. | 500 | 26 | ||||||
Johnson Controls, Inc. | 900 | 39 | ||||||
The Goodyear Tire & Rubber Co. * | 300 | 9 | ||||||
132 | ||||||||
Banks 0.3% | ||||||||
BB&T Corp. | 850 | 31 | ||||||
Comerica, Inc. | 300 | 14 | ||||||
Commerce Bancorp, Inc. | 200 | 8 | ||||||
Countrywide Financial Corp. | 798 | 12 | ||||||
Fannie Mae | 1,475 | 84 | ||||||
Fifth Third Bancorp | 867 | 27 | ||||||
First Horizon National Corp. | 200 | 5 | ||||||
Freddie Mac | 1,000 | 52 | ||||||
Hudson City Bancorp, Inc. | 500 | 8 | ||||||
Huntington Bancshares, Inc. | 423 | 8 | ||||||
KeyCorp | 700 | 20 | ||||||
M&T Bank Corp. | 199 | 20 | ||||||
Marshall & Ilsley Corp. | 322 | 14 | ||||||
MGIC Investment Corp. | 150 | 3 | ||||||
National City Corp. | 950 | 23 | ||||||
PNC Financial Services Group, Inc. | 400 | 29 | ||||||
Regions Financial Corp. | 1,148 | 31 | ||||||
Sovereign Bancorp, Inc. | 420 | 6 | ||||||
SunTrust Banks, Inc. | 500 | 36 | ||||||
Synovus Financial Corp. | 400 | 11 | ||||||
U.S. Bancorp | 2,922 | 97 | ||||||
Wachovia Corp. | 2,970 | 136 | ||||||
Washington Mutual, Inc. | 1,491 | 42 | ||||||
Wells Fargo & Co. | 5,120 | 174 | ||||||
Zions Bancorp | 100 | 6 | ||||||
897 | ||||||||
Capital Goods 0.6% | ||||||||
3M Co. | 1,200 | 104 | ||||||
American Standard Cos., Inc. | 300 | 11 | ||||||
Caterpillar, Inc. | 1,100 | 82 | ||||||
Cooper Industries Ltd., Class A | 300 | 16 | ||||||
Cummins, Inc. | 200 | 24 | ||||||
Danaher Corp. | 500 | 43 | ||||||
Deere & Co. | 400 | 62 | ||||||
Dover Corp. | 300 | 14 | ||||||
Eaton Corp. | 200 | 18 | ||||||
Emerson Electric Co. | 1,300 | 68 | ||||||
Fluor Corp. | 100 | 16 | ||||||
General Dynamics Corp. | 600 | 55 | ||||||
General Electric Co. | 16,190 | 666 | ||||||
Goodrich Corp. | 200 | 14 | ||||||
Honeywell International, Inc. | 1,275 | 77 | ||||||
Illinois Tool Works, Inc. | 700 | 40 | ||||||
Ingersoll-Rand Co., Ltd., Class A | 500 | 25 | ||||||
ITT Corp. | 300 | 20 | ||||||
L-3 Communications Holdings, Inc. | 200 | 22 | ||||||
Lockheed Martin Corp. | 700 | 77 | ||||||
Masco Corp. | 700 | 17 | ||||||
Northrop Grumman Corp. | 514 | 43 | ||||||
PACCAR, Inc. | 675 | 37 | ||||||
Pall Corp. | 200 | 8 | ||||||
Parker Hannifin Corp. | 225 | 18 | ||||||
Precision Castparts Corp. | 200 | 30 | ||||||
Raytheon Co. | 600 | 38 | ||||||
Rockwell Automation, Inc. | 300 | 21 | ||||||
Rockwell Collins, Inc. | 300 | 22 | ||||||
Terex Corp. * | 100 | 7 | ||||||
Textron, Inc. | 400 | 28 | ||||||
The Boeing Co. | 1,246 | 123 | ||||||
Tyco International Ltd. | 753 | 31 | ||||||
United Technologies Corp. | 1,600 | 123 | ||||||
W.W. Grainger, Inc. | 100 | 9 | ||||||
2,009 | ||||||||
Commercial Services & Supplies 0.0% | ||||||||
Allied Waste Industries, Inc. * | 500 | 6 | ||||||
Avery Dennison Corp. | 200 | 12 | ||||||
Cintas Corp. | 260 | 9 | ||||||
Equifax, Inc. | 200 | 8 | ||||||
Monster Worldwide, Inc. * | 191 | 8 | ||||||
Pitney Bowes, Inc. | 400 | 16 | ||||||
R.R. Donnelley & Sons Co. | 300 | 12 | ||||||
Robert Half International, Inc. | 300 | 9 | ||||||
Waste Management, Inc. | 907 | 33 | ||||||
113 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Brunswick Corp. | 100 | 2 | ||||||
Centex Corp. | 200 | 5 | ||||||
Coach, Inc. * | 600 | 22 | ||||||
D.R. Horton, Inc. | 420 | 5 |
See financial notes 41
Table of Contents
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Eastman Kodak Co. | 500 | 14 | ||||||
Fortune Brands, Inc. | 200 | 17 | ||||||
Harman International Industries, Inc. | 100 | 8 | ||||||
Hasbro, Inc. | 325 | 10 | ||||||
Jones Apparel Group, Inc. | 200 | 4 | ||||||
KB Home | 200 | 5 | ||||||
Leggett & Platt, Inc. | 300 | 6 | ||||||
Lennar Corp., Class A | 200 | 4 | ||||||
Liz Claiborne, Inc. | 200 | 6 | ||||||
Mattel, Inc. | 650 | 14 | ||||||
Newell Rubbermaid, Inc. | 436 | 13 | ||||||
NIKE, Inc., Class B | 600 | 40 | ||||||
Polo Ralph Lauren Corp. | 100 | 7 | ||||||
Pulte Homes, Inc. | 400 | 6 | ||||||
Snap-on, Inc. | 100 | 5 | ||||||
The Black & Decker Corp. | 100 | 9 | ||||||
The Stanley Works | 100 | 6 | ||||||
VF Corp. | 200 | 17 | ||||||
Whirlpool Corp. | 111 | 9 | ||||||
234 | ||||||||
Consumer Services 0.1% | ||||||||
Apollo Group, Inc., Class A * | 250 | 20 | ||||||
Carnival Corp. | 820 | 39 | ||||||
Darden Restaurants, Inc. | 300 | 13 | ||||||
H&R Block, Inc. | 600 | 13 | ||||||
Harrah’s Entertainment, Inc. | 200 | 18 | ||||||
International Game Technology | 556 | 24 | ||||||
Marriott International, Inc., Class A | 600 | 25 | ||||||
McDonald’s Corp. | 2,000 | 119 | ||||||
Starbucks Corp. * | 1,120 | 30 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 300 | 17 | ||||||
Wendy’s International, Inc. | 200 | 7 | ||||||
Wyndham Worldwide Corp. | 291 | 9 | ||||||
YUM! Brands, Inc. | 960 | 39 | ||||||
373 | ||||||||
Diversified Financials 0.6% | ||||||||
American Capital Strategies Ltd. | 150 | 6 | ||||||
American Express Co. | 1,820 | 111 | ||||||
Ameriprise Financial, Inc. | 364 | 23 | ||||||
Bank of America Corp. | 7,142 | 345 | ||||||
Bank of New York Mellon Corp. | 1,832 | 89 | ||||||
Capital One Financial Corp. | 450 | 29 | ||||||
CIT Group, Inc. | 300 | 11 | ||||||
Citigroup, Inc. | 7,782 | 326 | ||||||
CME Group, Inc. | 54 | 36 | ||||||
Discover Financial Services | 815 | 16 | ||||||
E *TRADE Financial Corp. * | 600 | 7 | ||||||
Federated Investors, Inc., Class B | 200 | 9 | ||||||
Franklin Resources, Inc. | 200 | 26 | ||||||
Janus Capital Group, Inc. | 400 | 14 | ||||||
JPMorgan Chase & Co. | 5,352 | 251 | ||||||
Legg Mason, Inc. | 190 | 16 | ||||||
Lehman Brothers Holdings, Inc. | 800 | 51 | ||||||
Leucadia National Corp. | 300 | 15 | ||||||
Merrill Lynch & Co., Inc. | 1,500 | 99 | ||||||
Moody’s Corp. | 400 | 17 | ||||||
Morgan Stanley | 1,630 | 110 | ||||||
Northern Trust Corp. | 300 | 23 | ||||||
NYSE Euronext | 400 | 37 | ||||||
SLM Corp. | 650 | 31 | ||||||
State Street Corp. | 500 | 40 | ||||||
T. Rowe Price Group, Inc. | 400 | 26 | ||||||
The Bear Stearns Cos., Inc. | 145 | 16 | ||||||
The Charles Schwab Corp. (a) | 2,125 | 49 | ||||||
The Goldman Sachs Group, Inc. | 628 | 156 | ||||||
1,985 | ||||||||
Energy 0.7% | ||||||||
Anadarko Petroleum Corp. | 734 | 43 | ||||||
Apache Corp. | 462 | 48 | ||||||
Baker Hughes, Inc. | 470 | 41 | ||||||
BJ Services Co. | 400 | 10 | ||||||
Chesapeake Energy Corp. | 500 | 20 | ||||||
Chevron Corp. | 3,520 | 322 | ||||||
ConocoPhillips | 2,596 | 221 | ||||||
CONSOL Energy, Inc. | 300 | 17 | ||||||
Devon Energy Corp. | 700 | 65 | ||||||
El Paso Corp. | 769 | 14 | ||||||
ENSCO International, Inc. | 200 | 11 | ||||||
EOG Resources, Inc. | 360 | 32 | ||||||
Exxon Mobil Corp. | 8,918 | 820 | ||||||
Halliburton Co. | 1,428 | 56 | ||||||
Hess Corp. | 300 | 21 | ||||||
Marathon Oil Corp. | 1,046 | 62 | ||||||
Murphy Oil Corp. | 300 | 22 | ||||||
Nabors Industries Ltd. * | 400 | 11 | ||||||
National-Oilwell Varco, Inc. * | 540 | 40 | ||||||
Noble Corp. | 400 | 21 | ||||||
Noble Energy | 300 | 23 | ||||||
Occidental Petroleum Corp. | 1,200 | 83 | ||||||
Peabody Energy Corp. | 400 | 22 | ||||||
Rowan Cos., Inc. | 100 | 4 | ||||||
Schlumberger Ltd. | 1,800 | 174 | ||||||
Smith International, Inc. | 300 | 20 | ||||||
Spectra Energy Corp. | 938 | 24 | ||||||
Sunoco, Inc. | 200 | 15 | ||||||
Tesoro Corp. | 200 | 12 | ||||||
The Williams Cos., Inc. | 700 | 26 | ||||||
Transocean, Inc. * | 474 | 57 | ||||||
Valero Energy Corp. | 1,000 | 70 | ||||||
Weatherford International Ltd. * | 440 | 29 | ||||||
XTO Energy, Inc. | 533 | 35 | ||||||
2,491 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Costco Wholesale Corp. | 700 | 47 | ||||||
CVS Caremark Corp. | 2,170 | 91 | ||||||
Safeway, Inc. | 650 | 22 | ||||||
Supervalu, Inc. | 318 | 13 | ||||||
Sysco Corp. | 1,000 | 34 | ||||||
The Kroger Co. | 1,200 | 35 | ||||||
Wal-Mart Stores, Inc. | 3,900 | 176 | ||||||
Walgreen Co. | 1,600 | 64 | ||||||
Whole Foods Market, Inc. | 100 | 5 | ||||||
487 |
42 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Altria Group, Inc. | 3,220 | 235 | ||||||
Anheuser-Busch Cos., Inc. | 1,200 | 61 | ||||||
Archer-Daniels-Midland Co. | 1,014 | 36 | ||||||
Brown-Forman Corp., Class B | 150 | 11 | ||||||
Campbell Soup Co. | 300 | 11 | ||||||
Coca-Cola Enterprises, Inc. | 700 | 18 | ||||||
ConAgra Foods, Inc. | 800 | 19 | ||||||
Constellation Brands, Inc., Class A * | 300 | 8 | ||||||
Dean Foods Co. | 200 | 6 | ||||||
General Mills, Inc. | 582 | 34 | ||||||
H.J. Heinz Co. | 600 | 28 | ||||||
Kellogg Co. | 400 | 21 | ||||||
Kraft Foods, Inc., Class A | 2,228 | 74 | ||||||
McCormick & Co., Inc. | 200 | 7 | ||||||
Molson Coors Brewing Co., Class B | 100 | 6 | ||||||
PepsiCo, Inc. | 2,560 | 189 | ||||||
Reynolds American, Inc. | 274 | 18 | ||||||
Sara Lee Corp. | 1,200 | 20 | ||||||
The Coca-Cola Co. | 3,220 | 199 | ||||||
The Hershey Co. | 400 | 17 | ||||||
The Pepsi Bottling Group, Inc. | 350 | 15 | ||||||
Tyson Foods, Inc., Class A | 400 | 6 | ||||||
UST, Inc. | 300 | 16 | ||||||
Wm. Wrigley Jr. Co. | 375 | 23 | ||||||
1,078 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Aetna, Inc. | 888 | 50 | ||||||
AmerisourceBergen Corp. | 400 | 19 | ||||||
Baxter International, Inc. | 900 | 54 | ||||||
Becton, Dickinson & Co. | 400 | 33 | ||||||
Boston Scientific Corp. * | 2,107 | 29 | ||||||
C.R. Bard, Inc. | 200 | 17 | ||||||
Cardinal Health, Inc. | 650 | 44 | ||||||
CIGNA Corp. | 600 | 32 | ||||||
Coventry Health Care, Inc. * | 300 | 18 | ||||||
Covidien Ltd. | 753 | 31 | ||||||
Express Scripts, Inc. * | 400 | 25 | ||||||
Hospira, Inc. * | 240 | 10 | ||||||
Humana, Inc. * | 200 | 15 | ||||||
IMS Health, Inc. | 350 | 9 | ||||||
Laboratory Corp. of America Holdings * | 200 | 14 | ||||||
Manor Care, Inc. | 100 | 7 | ||||||
McKesson Corp. | 422 | 28 | ||||||
Medco Health Solutions, Inc. * | 422 | 40 | ||||||
Medtronic, Inc. | 1,800 | 85 | ||||||
Patterson Cos., Inc. * | 200 | 8 | ||||||
Quest Diagnostics, Inc. | 278 | 15 | ||||||
St. Jude Medical, Inc. * | 500 | 20 | ||||||
Stryker Corp. | 602 | 43 | ||||||
Tenet Healthcare Corp. * | 750 | 3 | ||||||
UnitedHealth Group, Inc. | 2,000 | 98 | ||||||
Varian Medical Systems, Inc. * | 200 | 10 | ||||||
WellPoint, Inc. * | 900 | 71 | ||||||
Zimmer Holdings, Inc. * | 350 | 24 | ||||||
852 | ||||||||
Household & Personal Products 0.1% | ||||||||
Avon Products, Inc. | 700 | 29 | ||||||
Colgate-Palmolive Co. | 800 | 61 | ||||||
Kimberly-Clark Corp. | 756 | 53 | ||||||
The Clorox Co. | 300 | 19 | ||||||
The Estee Lauder Cos., Inc., Class A | 100 | 4 | ||||||
The Procter & Gamble Co. | 5,062 | 352 | ||||||
518 | ||||||||
Insurance 0.3% | ||||||||
ACE Ltd. | 400 | 24 | ||||||
AFLAC, Inc. | 800 | 50 | ||||||
Ambac Financial Group, Inc. | 162 | 6 | ||||||
American International Group, Inc. | 3,979 | 251 | ||||||
AON Corp. | 475 | 22 | ||||||
Assurant, Inc. | 200 | 12 | ||||||
Cincinnati Financial Corp. | 330 | 13 | ||||||
Genworth Financial, Inc., Class A | 300 | 8 | ||||||
Lincoln National Corp. | 501 | 31 | ||||||
Loews Corp. | 900 | 44 | ||||||
Marsh & McLennan Cos., Inc. | 800 | 21 | ||||||
MBIA, Inc. | 200 | 9 | ||||||
MetLife, Inc. | 1,178 | 81 | ||||||
Principal Financial Group, Inc. | 550 | 37 | ||||||
Prudential Financial, Inc. | 800 | 77 | ||||||
SAFECO Corp. | 200 | 12 | ||||||
The Allstate Corp. | 1,100 | 58 | ||||||
The Chubb Corp. | 600 | 32 | ||||||
The Hartford Financial Services Group, Inc. | 425 | 41 | ||||||
The Progressive Corp. | 1,400 | 26 | ||||||
The Travelers Cos., Inc. | 1,006 | 53 | ||||||
Torchmark Corp. | 200 | 13 | ||||||
Unum Group | 346 | 8 | ||||||
XL Capital Ltd., Class A | 200 | 14 | ||||||
943 | ||||||||
Materials 0.2% | ||||||||
Air Products & Chemicals, Inc. | 300 | 29 | ||||||
Alcoa, Inc. | 1,312 | 52 | ||||||
Allegheny Technologies, Inc. | 146 | 15 | ||||||
Ashland, Inc. | 100 | 6 | ||||||
Ball Corp. | 200 | 10 | ||||||
Bemis Co., Inc. | 200 | 6 | ||||||
E.I. du Pont de Nemours & Co. | 1,525 | 75 | ||||||
Eastman Chemical Co. | 100 | 7 | ||||||
Ecolab, Inc. | 400 | 19 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 480 | 56 | ||||||
Hercules, Inc. | 200 | 4 | ||||||
International Flavors & Fragrances, Inc. | 200 | 10 | ||||||
International Paper Co. | 739 | 27 | ||||||
MeadWestvaco Corp. | 294 | 10 | ||||||
Monsanto Co. | 664 | 65 | ||||||
Newmont Mining Corp. | 643 | 33 | ||||||
Nucor Corp. | 400 | 25 | ||||||
Pactiv Corp. * | 300 | 8 |
See financial notes 43
Table of Contents
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
PPG Industries, Inc. | 250 | 19 | ||||||
Praxair, Inc. | 500 | 43 | ||||||
Rohm & Haas Co. | 273 | 14 | ||||||
Sealed Air Corp. | 306 | 8 | ||||||
Sigma-Aldrich Corp. | 200 | 10 | ||||||
Temple-Inland, Inc. | 200 | 11 | ||||||
The Dow Chemical Co. | 1,372 | 62 | ||||||
Titanium Metals Corp. * | 100 | 3 | ||||||
United States Steel Corp. | 100 | 11 | ||||||
Vulcan Materials Co. | 200 | 17 | ||||||
Weyerhaeuser Co. | 350 | 26 | ||||||
681 | ||||||||
Media 0.2% | ||||||||
CBS Corp., Class B | 1,330 | 38 | ||||||
Clear Channel Communications, Inc. | 967 | 37 | ||||||
Comcast Corp., Class A * | 4,894 | 103 | ||||||
Dow Jones & Co., Inc. | 100 | 6 | ||||||
Gannett Co., Inc. | 400 | 17 | ||||||
Meredith Corp. | 100 | 6 | ||||||
News Corp., Class A | 3,880 | 84 | ||||||
Omnicom Group, Inc. | 600 | 31 | ||||||
The DIRECTV Group, Inc. * | 1,200 | 32 | ||||||
The E.W. Scripps Co., Class A | 100 | 4 | ||||||
The Interpublic Group of Cos., Inc. * | 600 | 6 | ||||||
The McGraw-Hill Cos., Inc. | 600 | 30 | ||||||
The New York Times Co., Class A | 200 | 4 | ||||||
The Walt Disney Co. | 3,077 | 107 | ||||||
Time Warner, Inc. | 6,380 | 116 | ||||||
Tribune Co. | 211 | 6 | ||||||
Viacom, Inc., Class B * | 1,330 | 55 | ||||||
682 | ||||||||
Pharmaceuticals & Biotechnology 0.5% | ||||||||
Abbott Laboratories | 2,400 | 131 | ||||||
Allergan, Inc. | 400 | 27 | ||||||
Amgen, Inc. * | 1,952 | 113 | ||||||
Applied Biosystems Group-Applera Corp. | 300 | 11 | ||||||
Barr Pharmaceuticals, Inc. * | 200 | 12 | ||||||
Biogen Idec, Inc. * | 480 | 36 | ||||||
Bristol-Myers Squibb Co. | 3,000 | 90 | ||||||
Celgene Corp. * | 300 | 20 | ||||||
Eli Lilly and Co. | 1,725 | 93 | ||||||
Forest Laboratories, Inc. * | 550 | 22 | ||||||
Genzyme Corp. * | 325 | 25 | ||||||
Gilead Sciences, Inc. * | 1,300 | 60 | ||||||
Johnson & Johnson | 4,622 | 301 | ||||||
King Pharmaceuticals, Inc. * | 366 | 4 | ||||||
Merck & Co., Inc. | 3,400 | 198 | ||||||
Millipore Corp. * | 100 | 8 | ||||||
Mylan Laboratories, Inc. | 400 | 6 | ||||||
PerkinElmer, Inc. | 200 | 6 | ||||||
Pfizer, Inc. | 11,557 | 284 | ||||||
Schering-Plough Corp. | 2,300 | 70 | ||||||
Thermo Fisher Scientific, Inc. * | 526 | 31 | ||||||
Waters Corp. * | 200 | 15 | ||||||
Watson Pharmaceuticals, Inc. * | 200 | 6 | ||||||
Wyeth | 2,000 | 97 | ||||||
1,666 | ||||||||
Real Estate 0.1% | ||||||||
Apartment Investment & Management Co., Class A | 100 | 5 | ||||||
AvalonBay Communities, Inc. | 100 | 12 | ||||||
Boston Properties, Inc. | 130 | 14 | ||||||
CB Richard Ellis Group, Inc., Class A * | 200 | 5 | ||||||
Developers Diversified Realty Corp. | 100 | 5 | ||||||
Equity Residential | 400 | 17 | ||||||
General Growth Properties, Inc. | 400 | 22 | ||||||
Host Hotels & Resorts, Inc. | 800 | 18 | ||||||
Kimco Realty Corp. | 168 | 7 | ||||||
Plum Creek Timber Co., Inc. | 300 | 13 | ||||||
ProLogis | 300 | 22 | ||||||
Public Storage | 100 | 8 | ||||||
Simon Property Group, Inc. | 300 | 31 | ||||||
Vornado Realty Trust | 200 | 22 | ||||||
201 | ||||||||
Retailing 0.2% | ||||||||
Abercrombie & Fitch Co., Class A | 100 | 8 | ||||||
Amazon.com, Inc. * | 300 | 27 | ||||||
AutoNation, Inc. * | 500 | 9 | ||||||
AutoZone, Inc. * | 150 | 19 | ||||||
Bed Bath & Beyond, Inc. * | 400 | 14 | ||||||
Best Buy Co., Inc. | 675 | 33 | ||||||
Big Lots, Inc. * | 200 | 5 | ||||||
Circuit City Stores, Inc. | 300 | 2 | ||||||
Dillard’s, Inc., Class A | 200 | 5 | ||||||
eBay, Inc. * | 1,708 | 62 | ||||||
Expedia, Inc. * | 300 | 10 | ||||||
Family Dollar Stores, Inc. | 300 | 8 | ||||||
Genuine Parts Co. | 250 | 12 | ||||||
IAC/InterActiveCorp * | 350 | 10 | ||||||
J.C. Penney Co., Inc. | 400 | 22 | ||||||
Kohl’s Corp. * | 500 | 27 | ||||||
Limited Brands, Inc. | 739 | 16 | ||||||
Lowe’s Cos., Inc. | 2,400 | 64 | ||||||
Macy’s, Inc. | 910 | 29 | ||||||
Nordstrom, Inc. | 400 | 16 | ||||||
Office Depot, Inc. * | 600 | 11 | ||||||
OfficeMax, Inc. | 100 | 3 | ||||||
RadioShack Corp. | 300 | 6 | ||||||
Sears Holdings Corp. * | 154 | 21 | ||||||
Staples, Inc. | 1,125 | 26 | ||||||
Target Corp. | 1,400 | 86 | ||||||
The Gap, Inc. | 1,362 | 26 | ||||||
The Home Depot, Inc. | 2,655 | 84 | ||||||
The Sherwin-Williams Co. | 200 | 13 | ||||||
The TJX Cos., Inc. | 800 | 23 | ||||||
Tiffany & Co. | 250 | 13 | ||||||
710 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Advanced Micro Devices, Inc. * | 560 | 7 | ||||||
Altera Corp. | 510 | 10 |
44 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Analog Devices, Inc. | 600 | 20 | ||||||
Applied Materials, Inc. | 2,600 | 51 | ||||||
Broadcom Corp., Class A * | 738 | 24 | ||||||
Intel Corp. | 9,100 | 245 | ||||||
KLA-Tencor Corp. | 300 | 16 | ||||||
Linear Technology Corp. | 500 | 17 | ||||||
LSI Corp. * | 500 | 3 | ||||||
MEMC Electronic Materials, Inc. * | 300 | 22 | ||||||
Microchip Technology, Inc. | 300 | 10 | ||||||
Micron Technology, Inc. * | 900 | 9 | ||||||
National Semiconductor Corp. | 600 | 15 | ||||||
Novellus Systems, Inc. * | 250 | 7 | ||||||
NVIDIA Corp. * | 600 | 21 | ||||||
Teradyne, Inc. * | 300 | 4 | ||||||
Texas Instruments, Inc. | 2,400 | 78 | ||||||
Xilinx, Inc. | 500 | 12 | ||||||
571 | ||||||||
Software & Services 0.4% | ||||||||
Adobe Systems, Inc. * | 800 | 38 | ||||||
Affiliated Computer Services, Inc., Class A * | 203 | 10 | ||||||
Akamai Technologies, Inc. * | 300 | 12 | ||||||
Autodesk, Inc. * | 400 | 20 | ||||||
Automatic Data Processing, Inc. | 900 | 45 | ||||||
BMC Software, Inc. * | 400 | 14 | ||||||
CA, Inc. | 850 | 22 | ||||||
Citrix Systems, Inc. * | 300 | 13 | ||||||
Cognizant Technology Solutions Corp., Class A * | 400 | 17 | ||||||
Computer Sciences Corp. * | 258 | 15 | ||||||
Compuware Corp. * | 600 | 6 | ||||||
Convergys Corp. * | 174 | 3 | ||||||
Electronic Arts, Inc. * | 424 | 26 | ||||||
Electronic Data Systems Corp. | 700 | 15 | ||||||
Fidelity National Information Services, Inc. | 250 | 11 | ||||||
Fiserv, Inc. * | 300 | 17 | ||||||
Google, Inc., Class A * | 300 | 212 | ||||||
Intuit, Inc. * | 626 | 20 | ||||||
Microsoft Corp. | 13,620 | 501 | ||||||
Novell, Inc. * | 500 | 4 | ||||||
Oracle Corp. * | 5,988 | 133 | ||||||
Paychex, Inc. | 525 | 22 | ||||||
Symantec Corp. * | 1,678 | 31 | ||||||
Unisys Corp. * | 500 | 3 | ||||||
VeriSign, Inc. * | 300 | 10 | ||||||
Western Union Co. | 1,392 | 31 | ||||||
Yahoo!, Inc. * | 2,000 | 62 | ||||||
1,313 | ||||||||
Technology Hardware & Equipment 0.5% | ||||||||
Agilent Technologies, Inc. * | 710 | 26 | ||||||
Apple, Inc. * | 1,200 | 228 | ||||||
Ciena Corp. * | 71 | 3 | ||||||
Cisco Systems, Inc. * | 9,930 | 328 | ||||||
Corning, Inc. | 2,250 | 55 | ||||||
Dell, Inc. * | 3,850 | 118 | ||||||
EMC Corp. * | 3,650 | 93 | ||||||
Flextronics International Ltd. * | 306 | 4 | ||||||
Hewlett-Packard Co. | 4,703 | 243 | ||||||
International Business Machines Corp. | 2,500 | 290 | ||||||
Jabil Circuit, Inc. | 322 | 7 | ||||||
JDS Uniphase Corp. * | 251 | 4 | ||||||
Juniper Networks, Inc. * | 600 | 22 | ||||||
Lexmark International, Inc., Class A * | 200 | 8 | ||||||
Molex, Inc. | 250 | 7 | ||||||
Motorola, Inc. | 3,666 | 69 | ||||||
Network Appliance, Inc. * | 500 | 16 | ||||||
QLogic Corp. * | 276 | 4 | ||||||
QUALCOMM, Inc. | 2,400 | 103 | ||||||
SanDisk Corp. * | 285 | 13 | ||||||
Sun Microsystems, Inc. * | 5,000 | 28 | ||||||
Tektronix, Inc. | 200 | 8 | ||||||
Tellabs, Inc. * | 600 | 5 | ||||||
Teradata Corp. * | 400 | 11 | ||||||
Tyco Electronics Ltd. | 753 | 27 | ||||||
Xerox Corp. * | 1,200 | 21 | ||||||
1,741 | ||||||||
Telecommunication Services 0.2% | ||||||||
ALLTEL Corp. | 500 | 36 | ||||||
AT&T, Inc. | 9,588 | 401 | ||||||
CenturyTel, Inc. | 250 | 11 | ||||||
Citizens Communications Co. | 410 | 5 | ||||||
Embarq Corp. | 222 | 12 | ||||||
Qwest Communications International, Inc. * | 2,524 | 18 | ||||||
Sprint Nextel Corp. | 4,454 | 76 | ||||||
Verizon Communications, Inc. | 4,188 | 193 | ||||||
Windstream Corp. | 516 | 7 | ||||||
759 | ||||||||
Transportation 0.1% | ||||||||
Burlington Northern Santa Fe Corp. | 600 | 52 | ||||||
C.H. Robinson Worldwide, Inc. | 200 | 10 | ||||||
CSX Corp. | 600 | 27 | ||||||
Expeditors International of Washington, Inc. | 300 | 15 | ||||||
FedEx Corp. | 460 | 48 | ||||||
Norfolk Southern Corp. | 600 | 31 | ||||||
Ryder System, Inc. | 100 | 5 | ||||||
Southwest Airlines Co. | 1,218 | 17 | ||||||
Union Pacific Corp. | 400 | 51 | ||||||
United Parcel Service, Inc., Class B | 1,712 | 129 | ||||||
385 | ||||||||
Utilities 0.2% | ||||||||
Allegheny Energy, Inc. * | 170 | 10 | ||||||
Ameren Corp. | 300 | 16 | ||||||
American Electric Power Co., Inc. | 580 | 28 | ||||||
CenterPoint Energy, Inc. | 474 | 8 | ||||||
CMS Energy Corp. | 200 | 3 | ||||||
Consolidated Edison, Inc. | 300 | 14 | ||||||
Constellation Energy Group | 200 | 19 | ||||||
Dominion Resources, Inc. | 435 | 40 | ||||||
DTE Energy Co. | 200 | 10 | ||||||
Duke Energy Corp. | 1,876 | 36 | ||||||
Dynegy, Inc., Class A * | 500 | 5 |
See financial notes 45
Table of Contents
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Edison International | 500 | 29 | ||||||
Entergy Corp. | 350 | 42 | ||||||
Exelon Corp. | 1,024 | 85 | ||||||
FirstEnergy Corp. | 533 | 37 | ||||||
FPL Group, Inc. | 600 | 41 | ||||||
Integrys Energy Group, Inc. | 82 | 5 | ||||||
Nicor, Inc. | 100 | 4 | ||||||
NiSource, Inc. | 376 | 8 | ||||||
PG&E Corp. | 600 | 29 | ||||||
Pinnacle West Capital Corp. | 100 | 4 | ||||||
PPL Corp. | 600 | 31 | ||||||
Progress Energy, Inc. | 354 | 17 | ||||||
Public Service Enterprise Group, Inc. | 400 | 38 | ||||||
Questar Corp. | 200 | 12 | ||||||
Sempra Energy | 297 | 18 | ||||||
Southern Co. | 1,100 | 40 | ||||||
TECO Energy, Inc. | 200 | 3 | ||||||
The AES Corp. * | 800 | 17 | ||||||
Xcel Energy, Inc. | 510 | 12 | ||||||
661 | ||||||||
Total Common Stock (Cost $12,090) | 21,482 | |||||||
Other Investment Companies 92.1% of net assets | ||||||||
Schwab Institutional Select S&P 500 Fund (a) | 361,851 | 4,483 | ||||||
Schwab International Index Fund, Select Shares (a) | 1,456,363 | 37,793 | ||||||
Schwab S&P 500 Index Fund, Select Shares (a) | 1,970,983 | 47,855 | ||||||
Schwab Small-Cap Index Fund, Select Shares (a) | 1,328,459 | 33,676 | ||||||
Schwab Total Bond Market Fund (a) | 19,315,151 | 189,288 | ||||||
Schwab Value Advantage Money Fund, Institutional Shares (a) | 10,043,609 | 10,044 | ||||||
Total Other Investment Companies (Cost $271,165) | 323,139 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investment 1.7% of net assets | ||||||||
Commercial Paper & Other Obligations 1.7% | ||||||||
Wells Fargo, Grand Cayman Time Deposit | ||||||||
4.75%, 11/01/07 | 6,001 | 6,001 | ||||||
Total Short-Term Investments (Cost $6,001) | 6,001 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $290,846 and the unrealized appreciation and depreciation were $62,158 and ($2,382), respectively, with net unrealized appreciation of $59,776. |
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
46 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds and stocks, at value (cost $271,186) | $323,188 | |||||
Investments in unaffiliated issuers, at value (cost $18,070) | + | 27,434 | ||||
Total investments, at value (cost $289,256) | 350,622 | |||||
Receivables: | ||||||
Dividends | 922 | |||||
Fund shares sold | 557 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 1 | ||||
Total assets | 352,103 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 883 | |||||
Investment adviser and administrator fees | 9 | |||||
Transfer agent and shareholder services fees | 6 | |||||
Fund shares redeemed | 379 | |||||
Accrued expenses | + | 46 | ||||
Total liabilities | 1,323 | |||||
Net Assets | ||||||
Total assets | 352,103 | |||||
Total liabilities | − | 1,323 | ||||
Net assets | $350,780 | |||||
Net Assets by Source | ||||||
Capital received from investors | 286,041 | |||||
Net investment income not yet distributed | 1,719 | |||||
Net realized capital gains | 1,654 | |||||
Net unrealized capital gains | 61,366 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $252,035 | 16,920 | $14.90 | ||||||||
P Shares | $98,745 | 6,642 | $14.87 |
See financial notes 47
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds and stocks | $12,399 | |||||
Dividends received from unaffiliated issuers | 399 | |||||
Interest | + | 194 | ||||
Total investment income | 12,992 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on sales of affiliated underlying funds | 325 | |||||
Net realized gains received from affiliated underlying funds | 3,648 | |||||
Net realized gains on unaffiliated investments | + | 63 | ||||
Net realized gains | 4,036 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on affiliated underlying funds and stocks | 11,636 | |||||
Net unrealized gains on unaffiliated investments | + | 2,228 | ||||
Net unrealized gains | 13,864 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,479 | |||||
Transfer agent and shareholder service fees | ||||||
Investor Shares | 604 | |||||
P Shares | 95 | |||||
Professional fees | 37 | |||||
Portfolio accounting fees | 31 | |||||
Registration fees | 17 | |||||
Custodian fees | 10 | |||||
Shareholder reports | 7 | |||||
Trustees’ fees | 7 | |||||
Overdraft expense | 4 | |||||
Other expenses | + | 37 | ||||
Total expenses | 2,328 | |||||
Expense reduction by adviser and Schwab | − | 784 | ||||
Net expenses | 1,544 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 12,992 | |||||
Net expenses | − | 1,544 | ||||
Net investment income | 11,448 | |||||
Net realized gains | 4,036 | |||||
Net unrealized gains | + | 13,864 | ||||
Increase in net assets from operations | $29,348 |
48 See financial notes
Table of Contents
Schwab MarketTrack Conservative Portfolio
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $11,448 | $9,485 | ||||||
Net realized gains | 4,036 | 4,385 | ||||||
Net unrealized gains | + | 13,864 | 15,692 | |||||
Increase in net assets from operations | 29,348 | 29,562 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 8,300 | 8,287 | ||||||
P Shares | + | 3,503 | 1,074 | |||||
Total distributions from net investment income | 11,803 | 9,361 | ||||||
Distributions from net realized gains | ||||||||
Investor Shares | 3,111 | 202 | ||||||
P Shares | + | 1,178 | — | |||||
Total distributions from net realized gains | 4,289 | 202 | ||||||
Total distributions | $16,092 | $9,563 |
Transactions in Fund Shares* |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 3,285 | $47,630 | 3,757 | $51,692 | ||||||||||||||
P Shares | + | 2,101 | 30,335 | 6,493 | 90,438 | |||||||||||||
Total shares sold | 5,386 | $77,965 | 10,250 | $142,130 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 745 | $10,688 | 587 | $8,073 | ||||||||||||||
P Shares | + | 327 | 4,681 | 78 | 1,074 | |||||||||||||
Total shares reinvested | 1,072 | $15,369 | 665 | $9,147 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (3,277 | ) | ($47,566 | ) | (10,556 | ) | ($146,482 | ) | ||||||||||
P Shares | + | (1,313 | ) | (19,043 | ) | (1,044 | ) | (14,366 | ) | |||||||||
Total shares redeemed | (4,590 | ) | ($66,609 | ) | (11,600 | ) | ($160,848 | ) | ||||||||||
Net transactions in fund shares | 1,868 | $26,725 | (685 | ) | ($9,571 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 21,694 | $310,799 | 22,379 | $300,371 | ||||||||||||||
Total increase or decrease | + | 1,868 | 39,981 | (685 | ) | 10,428 | ||||||||||||
End of period | 23,562 | $350,780 | 21,694 | $310,799 | ||||||||||||||
Net investment income not yet distributed | $1,719 | $1,190 |
* | The portfolio started to offer P Shares on 4/6/06. |
See financial notes 49
Table of Contents
Schwab MarketTrack Portfolios
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended. The list below shows all the funds in the trust including the funds in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) Schwab MarketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Schwab S&P 500 Index Fund Schwab Institutional Select S&P 500 Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index Fund Laudus U.S. MarketMasters Fund Laudus Small-Cap MarketMasters Fund Laudus International MarketMasters Fund Schwab Viewpoints Fund Schwab Premier Equity Fund Schwab Core Equity Fund | Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Financial Services Fund Schwab Health Care Fund Schwab Technology Fund Schwab Target 2010 Fund Schwab Target 2020 Fund Schwab Target 2030 Fund Schwab Target 2040 Fund Schwab Retirement Income Fund Schwab Fundamental US Large Company Index Fund Schwab Fundamental US Small-Mid Company Index Fund Schwab Fundamental International Large Company Index Fund | |
The Schwab MarketTrack Portfolios are mainly “fund of funds” as they invest a major portion of their assets in a combination of other Schwab Funds (underlying funds) to achieve their investment objectives and maintain their asset allocation. In addition, the portfolios may purchase individual securities to achieve their investment objectives. Each portfolio bears its share of the allocable expenses of the underlying funds in which they invest. The financial statements of the portfolios should be read in conjunction with the underlying funds’ financial statements.
Both Schwab MarketTrack Growth Portfolio and Schwab MarketTrack Conservative Portfolio offer two share classes: Investor Shares and P Shares. Shares of each class represent interest in the same portfolio, but each class has different expenses and investment minimums. Schwab MarketTrack All Equity Portfolio and Schwab MarketTrack Balanced Portfolio each offer one share class.
Shares are bought and sold at net asset value, or NAV, which is the price for all outstanding shares. Each share has a par value of 1/1,000 of a cent, and the trustees may authorize the issuance of as many shares as necessary.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds used in the preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America.
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and asked quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the current exchange rate. | |
• | Securities for which no quoted value is available or when a significant event has occurred between the time of the security’s last close and the time the fund calculates net asset value: valued at fair value, as determined in good faith by the fund’s investment adviser using guidelines adopted by the fund’s Board of Trustees and the Pricing Committee. Some of the more common reasons that may necessitate that a security be valued at fair value include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary |
50
Table of Contents
Schwab MarketTrack Portfolios
Financial Notes (continued)
2. Significant Accounting Policies (continued):
trading market is temporarily closed at a time when under normal conditions it would be open; the security’s primary pricing source is not able or willing to provide a price. |
• | Futures and forward currency contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a market value based on that day’s exchange rates (for forwards). When a fund closes out a futures or forwards position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly. | |
• | Underlying funds: valued at their respective net asset values as determined by those funds, in accordance with the 1940 Act. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost. |
(b) Portfolio Investments:
Futures Contract: The funds may invest in futures contracts. Futures contracts involve certain risks because they can be very sensitive to market movements.
One risk is that the price of a futures contract may not move in perfect correlation with the price of the underlying securities. Another risk is that, at certain times, it may be impossible for a fund to close out a position in a futures contract, due to a difference in trading hours or to market conditions that may reduce the liquidity for a futures contract or its underlying securities. The potential for losses associated with futures contracts may exceed amounts recorded in the Statement of Assets and Liabilities.
Because futures contracts carry inherent risks, a fund must give the broker a deposit of cash and/or securities (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another, but it is generally a percentage of the contract amount.
Futures are traded publicly on exchanges, and their market value changes daily. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
(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.
(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.
(e) Expenses:
Expenses that are specific to a fund or a class are charged directly to that fund or class. 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 its net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains once a year, except for the MarketTrack Conservative Portfolio, which makes distributions quarterly.
51
Table of Contents
Schwab MarketTrack Portfolios
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(g) Accounting Estimates:
The accounting policies described in this report conform with accounting principles generally accepted in the United States of America. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates.
(h) 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.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes.
(i) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
(j) New Accounting Standards:
Financial Accounting Standards Board Interpretation (FIN) No. 48 — Accounting for Uncertainty in Income Taxes — an Interpretation of SFAS No. 109, was issued in July 2006 and is effective for fiscal years beginning after December 15, 2006. This Interpretation provides new requirements for the recognition, measurement, and disclosure in the financial statements of a tax position taken or expected to be taken in a tax return when there is uncertainty about whether that tax position will ultimately be sustained. A fund with a fiscal year ending October 31 will implement FIN 48 no later than April 30, 2008, and it will apply to all open tax years.
Management is currently evaluating the impact of adopting FIN 48, and at this time, believes that the adoption will have no material impact on the funds’ financial statements.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.
Management is currently evaluating the impact of adopting SFAS No. 157 on the funds’ financial statements..
3. | Affiliates and Affiliated Transactions: |
(All dollar amounts are x 1,000)
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 it and the trust.
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Schwab MarketTrack Portfolios
Financial Notes (continued)
3. Affiliates and Affiliated Transactions (continued):
For its advisory and administrative services to each fund, the investment adviser is entitled to receive an annual fee payable monthly based on each fund’s average daily net assets described as follows:
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Average daily net assets | Portfolio | Portfolio | Portfolio | Portfolio | ||||||||||||
First $500 million | 0.44% | 0.44% | 0.44% | 0.44% | ||||||||||||
Over $500 million | 0.39% | 0.39% | 0.39% | 0.39% |
Charles Schwab & Co., Inc. (“Schwab”) is an affiliate of the investment adviser and is the trust’s transfer agent and shareholder services agent.
For its transfer agent and shareholder services, Schwab is entitled to receive an annual fee payable monthly based on each fund’s average daily net assets described as follows:
Transfer Agent Fees | Shareholder Service Fees | |||||||
Investor Shares | 0.05% | 0.20% | ||||||
P Shares* | 0.05% | 0.05% |
Although these agreements specify certain fees for these services, CSIM and Schwab have made additional agreements with the funds to limit the total expenses charged, excluding interest, taxes and certain non-routine expenses through February 27, 2008, as follows:
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Investor Shares | 0.50% | 0.50% | 0.50% | 0.50% | ||||||||||||
P Shares* | n/a | 0.35% | n/a | 0.35% |
* | P Shares are only offered by MarketTrack Growth Portfolio and MarketTrack Conservative Portfolio. |
Such expense reductions are disclosed in the Statement of Operations.
The funds may engage in certain transactions involving related parties. For instance, a fund may own shares of The Charles Schwab Corporation if that company is included in its index. Pursuant to an exemptive order issued by the SEC, the funds may invest in other related funds. As of October 31, 2007, the shares owned by each MarketTrack Portfolio as a percentage of the total shares of the underlying funds are:
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Schwab Equity Index Funds: | ||||||||||||||||
S&P 500 Index Fund | — | — | — | 0.6% | ||||||||||||
Small-Cap Index Fund | 9.6% | 9.2% | 5.0% | 2.0% | ||||||||||||
International Index Fund | 9.8% | 7.9% | 4.4% | 1.8% | ||||||||||||
Schwab Bond Funds: | ||||||||||||||||
Total Bond Market Fund | — | 7.5% | 12.6% | 11.9% | ||||||||||||
Schwab Institutional Select Funds: | ||||||||||||||||
Institutional Select S&P 500 Index | 9.4% | 6.7% | 3.2% | 0.1% | ||||||||||||
Schwab Money Funds: | ||||||||||||||||
Value Advantage Money Fund | — | 0.1% | — | ** | — | ** |
** | Less than 0.1% |
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Schwab MarketTrack Portfolios
Financial Notes (continued)
3. Affiliates and Affiliated Transactions (continued):
Schwab Charitable Giving Trust owns P Shares of MarketTrack Growth Portfolio and MarketTrack Conservative Portfolio. As of October 31, 2007, the shares owned by Charitable Giving Trust as a percentage of the total shares of the MarketTrack Portfolios are:
MarketTrack Growth Portfolio | MarketTrack Conservative Portfolio | |||||||
Schwab Charitable Giving Trust | 16.7% | 28.2% |
The funds may make direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and officers. As of October 31, 2007, there were no security transactions with other Schwab Funds.
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions within the Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. There was no interfund borrowing or lending activity for any fund during the period.
Trustees
Trustees may include people who are officers and/or directors of the investment adviser or Schwab. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these persons for their service as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
4. | Borrowing from Banks: |
The funds may borrow money from banks and custodians. The funds may obtain temporary bank loans through the trusts to which they belong, to use for meeting shareholder redemptions or for extraordinary or emergency purposes. The Schwab Funds have custodian overdraft facilities and uncommitted line of credit arrangements of $150 million and $100 million with State Street Corporation and Bank of America, N.A., respectively. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. There were no borrowings from the line of credit for the funds during the period.
5. | Purchases and Sales of Investment Securities: |
(All dollar amounts are x 1,000)
For the fiscal year ended October 31, 2007, purchases and sales of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
MarketTrack All Equity Portfolio | $ | 73,885 | $ | 751 | ||||
MarketTrack Growth Portfolio | 62,805 | 27,951 | ||||||
MarketTrack Balanced Portfolio | 49,152 | 35,157 | ||||||
MarketTrack Conservative Portfolio | 33,373 | 12,306 |
6. | Redemption Fee: |
(All dollar amounts are x 1,000)
The funds may impose a short-term redemption fee on any fund shares that are redeemed or exchanged by a shareholder within a specified number of days of the purchase date. The funds charge 2.00% of early withdrawal fees on shares (excluding P shares)
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Schwab MarketTrack Portfolios
Financial Notes (continued)
6. | Redemption Fee (continued): (All dollar amounts are x 1,000) |
redeemed or exchanged held 30 days or less after the purchase. Such amounts are net of the redemption fee proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior fiscal year are:
Current Period | Prior Period | |||||||
(11/01/06-10/31/07) | (11/01/05-10/31/06) | |||||||
MarketTrack All Equity Portfolio | $32 | $13 | ||||||
MarketTrack Growth Portfolio | ||||||||
Investor Shares | 25 | 11 | ||||||
MarketTrack Balanced Portfolio | 17 | 3 | ||||||
MarketTrack Conservative Portfolio | ||||||||
Investor Shares | 6 | 16 |
7. | Federal Income Taxes: |
(All dollar amounts are x 1,000)
As of October 31, 2007, the components of distributable earnings on a tax-basis were as follows:
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Undistributed ordinary income | $— | $6,081 | $8,914 | $1,719 | ||||||||||||
Undistributed long-term capital gains | 125 | * | 15,229 | 8,867 | 3,244 | |||||||||||
Unrealized appreciation | 171,007 | 259,211 | 152,856 | 62,158 | ||||||||||||
Unrealized depreciation | — | (6,194 | ) | (4,087 | ) | (2,382 | ) | |||||||||
Other net unrealized appreciation/(depreciation) | 285 | — | — | — | ||||||||||||
Net unrealized appreciation/(depreciation) | 171,292 | 253,017 | 148,769 | 59,776 |
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 carry forwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2007, the funds had no capital loss carry forwards, and $25,602 of capital losses carried from prior years for the MarketTrack All Equity Portfolio were utilized to offset current year’s capital gains.
The tax-basis components of distributions paid during the current and prior fiscal years were:
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio* | Portfolio | Portfolio | Portfolio | |||||||||||||
Current period distributions | ||||||||||||||||
Ordinary income | $10,511 | $17,601 | $15,698 | $11,803 | ||||||||||||
Long-term capital gains | 5 | 6,527 | 8,968 | 4,289 | ||||||||||||
Return of capital | — | — | — | — | ||||||||||||
Prior period distributions | ||||||||||||||||
Ordinary income | 5,267 | 10,988 | 11,244 | 9,361 | ||||||||||||
Long-term capital gains | — | — | 1,491 | 202 | ||||||||||||
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: paydowns on fixed-income 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 each fund for financial reporting purposes. Each fund 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)
7. | Federal Income Taxes (continued): (All dollar amounts are x 1,000) |
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2007, the funds made the following reclassifications:
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio* | Portfolio | Portfolio | Portfolio | |||||||||||||
Capital shares | $— | $— | $— | $— | ||||||||||||
Undistributed net investment income | 3,756 | 4,026 | 2,236 | 884 | ||||||||||||
Net realized capital gains and losses | (3,756 | ) | (4,026 | ) | (2,236 | ) | (884 | ) |
* | Tax information for MarketTrack All Equity Portfolio is as of December 31, 2006. |
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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
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, 2007, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as ‘financial statements‘) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2007 by correspondence with the transfer agent, custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 13, 2007
San Francisco, California
December 13, 2007
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Other Federal Tax Information (unaudited)
(All dollar amounts are x 1,000)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2007, qualify for the corporate dividends received deduction:
Percentage | ||||
MarketTrack All Equity Portfolio* | 72.28 | |||
MarketTrack Growth Portfolio | 30.33 | |||
MarketTrack Balanced Portfolio | 45.56 | |||
MarketTrack Conservative Portfolio | 72.04 |
For the fiscal year ended October 31, 2007, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2008 via IRS form 1099 of the amounts for use in preparing their 2007 income tax return.
MarketTrack All Equity Portfolio* | $ | 6,923 | ||
MarketTrack Growth Portfolio | 17,602 | |||
MarketTrack Balanced Portfolio | 15,698 | |||
MarketTrack Conservative Portfolio | 11,803 |
* | Tax information for MarketTrack All Equity Portfolio is as of December 31, 2006. |
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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 advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
Consistent with these responsibilities, 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 CSIM (the “Agreement”) with respect to existing funds in the Trust, including the funds covered in this annual report, 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. 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 memo regarding the responsibilities of trustees for the approval of investment advisory contracts. 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 at meetings held on May 2, 2007, and June 5, 2007, and approved the renewal of the Agreement for an additional one year term at the meeting held on June 5, 2007. The Board’s approval of the Agreement 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 information considered by the Trustees included specific information concerning changes in the nature, extent and quality of services provided by CSIM since the Trustees had last considered approval of the Agreement. The Trustees also considered investments in CSIM’s mutual fund infrastructure and the fact that 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 CSIM’s top three ranking in an independent survey regarding mutual fund client loyalty, 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.
Fund Performance. The Board considered fund performance in determining whether to renew the Agreement. Specifically, the Trustees considered each fund’s performance relative to a peer group and peer category of other mutual
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funds and appropriate indices/benchmarks, in light of total return, yield, when applicable, and market trends. As part of this review, the Trustees considered the composition of the peer group and peer category, selection criteria and the reputation of the third party who prepared the peer group and peer category analysis. In evaluating the performance of each fund, the Trustees considered both risk and shareholder risk expectations for such fund and the appropriateness of the benchmark used to compare the performance of each fund. The Trustees further considered the level of fund performance in the context of its review of fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the funds supported renewal of the Agreement.
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 other comparable 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 fees charged by CSIM to other mutual funds and to other types of accounts, such as wrap accounts, 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 Agreement.
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. The Board also considered information relating to changes to CSIM’s business operations and how these changes affected CSIM’s profitability under the Agreement. 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.
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 previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered existing contractual investment advisory fee schedules that include lower fees at higher graduated asset levels. The Board also considered certain existing commitments by CSIM and Schwab that are designed to pass along potential economies of scale to fund shareholders. 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, unanimously approved the continuation of the Agreement and concluded that the compensation under the Agreement 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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The tables below give information as of October 31, 2007, about the trustees and officers for The 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, and Laudus Trust. As of October 31, 2007, the Fund Complex included 70 funds.
The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Board 1—Director, Redwood Trust, Inc. Board 2—Director, PMI Group, Inc. | |||||
Donald F. Dorward 1931 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chief Executive Officer, Dorward & Associates (corporate management, marketing and communications consulting firm). From 1996-1999, Executive Vice President and Managing Director, Grey Advertising. Prior to 1996, President and Chief Executive Officer, Allen & Dorward Advertising. | 60 | None. | |||||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley. Until February 2004, Co-Chief Executive Officer, Aphton Corp. (bio-pharmaceuticals). | 70 | Board 1—Director, Mission West Properties Board 2—Director, TOUSA Board 3—Director, Harris-Stratex Networks Board 4—Director, Genitope Corp. Board 5—Director & Non-Executive Chairman, Solectron Corp. Board 6—Director, Ditech Networks | |||||
Robert G. Holmes 1931 (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, Semloh Financial, Inc. (international financial services and investment advisory firm). | 60 | None. | |||||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and founder of Smith Graham & Co.(investment advisors). | 60 | Board 1—Board of Cooper Industries Board 2—Chairman of the Audit Committee of Oneok Partners LP | |||||
Donald R. Stephens 1938 Trustee (Trustee of Schwab Capital Trust since 1989.) | Managing Partner, D. R. Stephens & Company (investments). | 60 | None. | |||||
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Independent Trustees continued | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Michael W. Wilsey 1943 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer, Wilsey Bennett, Inc. (real estate investment and management, and other investments). | 60 | None. | |||||
Interested Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served ) | Past Five Years | the Trustee | Other Directorships | |||||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc.; Chairman and Director, Charles 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 and Director, Schwab Holdings, Inc. Through June 2007, Director, U.S. Trust Company, N.A., U.S. Trust Company of New York. Until May 2003, Co-Chief Executive Officer, The Charles Schwab Corporation. | 60 | None | |||||
Randall W. Merk2 1954 Trustee (Trustee of Schwab Capital Trust since 2005.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | 70 | None. | |||||
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Officers of the Trust | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Randall W. Merk 1954 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2007.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer, Charles Schwab Investment Management, Inc.; Chief Financial Officer, Laudus Trust and Laudus Variable Insurance Trust; Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited. Through June 2007, Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust; Chief Financial Officer, Mutual Fund Division, UST Advisors, Inc. From December 1999 to November 2004, Sr. Vice President, Financial Reporting, Charles Schwab & Co. Inc. | |
Kimon Daifotis 1959 Senior Vice President and Chief Investment Officer-Fixed Income (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Fixed Income, Charles Schwab Investment Management, Inc. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Jeffrey Mortimer 1963 Senior Vice President and Chief Investment Officer-Equities (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Equities, Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer, Laudus Trust and Laudus Variable Insurance Trust. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Randall Fillmore 1960 Chief Compliance Officer and AML Officer (Officer of Schwab Capital Trust since 2002.) | Senior Vice President and Chief Compliance Officer, Charles Schwab Investment Management, Inc.; Senior Vice President, Charles Schwab & Co. Inc.; Chief Compliance Officer, Laudus Trust and Laudus Variable Insurance Trust. Through June 2007, Chief Compliance Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust. From 2002 to 2003, Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc. | |
Koji E. Felton 1959 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 1998.) | Senior Vice President, Chief Counsel and Corporate Secretary, Charles Schwab Investment Management, Inc.; Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. Through June 2007, Chief Legal Officer, Excelsior Funds Inc., Excelsior Tax Exempt Funds, Inc. and Excelsior Funds Trust. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust; since 2006, Chief Counsel, Laudus Trust and Variable Insurance Trust. Until July 2005, Senior Associate, Paul Hastings Janofsky & Walker LLP. | |
Cathy Sabo 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President-Compliance, Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust. Until 2004, Vice President, Client, Sales & Services Controls, Charles Schwab & Co., Inc. | |
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Officers of the Trust continued | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Michael Haydel 1970 Vice President (Officer of Schwab Capital Trust since 2006.) | Vice President, Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President and AML Officer, Laudus Trust and Laudus Variable Insurance Trust. Until March 2004, Director Charles Schwab & Co., Inc. | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after 20 years of service as a trustee, whichever comes first. Independent trustees elected prior to January 1, 2000 will retire on the following schedule: Messrs. Holmes and Dorward will retire on December 31, 2007, and Messrs. Stephens and Wilsey will retire on December 31, 2010. |
2 | In addition to their employment with the investment advisor and the distributor, Messrs. Schwab and Merk also own stock of The Charles Schwab Corporation. Mr. Schwab and Mr. Merk are Interested Trustees because they are employees of Schwab and/or the advisor. |
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 other officer serves at the pleasure of the Board. |
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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.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500T). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the “coupon rate”) until a specified date (the “maturity date”), at which time the issuer returns the money borrowed (“principal” or “face value”) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
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.
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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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 Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting Schwab’s website at www.schwab.com/schwabfunds, the SEC’s website at 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 Schwab’s website at www.schwab.com/schwabfunds or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fundtm
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 Technology Fundtm
Schwab Fundamental US Large Company Index Fundtm
Schwab Fundamental US Small-Mid Company Index Fundtm
Schwab Fundamental International Large Company Index Fundtm
Schwab Global Real Estate Fundtm
Schwab Institutional Select® S&P 500 Fund
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 Viewpoints Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
Bond Funds
Schwab YieldPlus Fund®
Schwab Short-Term Bond Market Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab Inflation Protected Fundtm
Schwab Tax-Free YieldPlus Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free YieldPlus Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity.1 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.
101 Montgomery Street, San Francisco, CA 94104
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.
© 2006 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC
Printed on recycled paper.
MFR13813-10
Table of Contents
Table of Contents
Table of Contents
Annual report dated October 31, 2007 enclosed.
Schwab Target Funds
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
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Table of Contents
Schwab Target Funds
Annual Report
October 31, 2007
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
A suite of five mutual funds to help keep your retirement
investments properly allocated over your lifetime.
In This Report | ||
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Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
The industry/sector classification of the funds’ portfolio holdings uses the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.
Table of Contents
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.schwab.com/schwabfunds.
Total Return for the Report Period | ||
Schwab Target 2010 Fund (Ticker Symbol: SWBRX) | 13.02% | |
Benchmark: Target 2010 Composite Index | 12.89% | |
Fund Category: Morningstar Target-Date 2000-2014 | 9.66% | |
Performance Details | pages 6-7 | |
Schwab Target 2020 Fund (Ticker Symbol: SWCRX) | 13.47% | |
Benchmark: Target 2020 Composite Index | 13.69% | |
Fund Category: Morningstar Target-Date 2015-2029 | 14.32% | |
Performance Details | pages 8-9 | |
Schwab Target 2030 Fund (Ticker Symbol: SWDRX) | 14.45% | |
Benchmark: Target 2030 Composite Index | 14.51% | |
Fund Category: Morningstar Target-Date 2030+ | 17.31% | |
Performance Details | pages 10-11 | |
Schwab Target 2040 Fund (Ticker Symbol: SWERX) | 15.32% | |
Benchmark: Target 2040 Composite Index | 15.47% | |
Fund Category: Morningstar Target-Date 2030+ | 17.31% | |
Performance Details | pages 12-13 | |
Schwab Retirement Income Fund (Ticker Symbol: SWARX) | 6.98% | |
Benchmark: Target Income Composite Index | 7.67% | |
Fund Category: Morningstar Conservative Allocation | 8.12% | |
Performance Details | pages 14-15 | |
Minimum Initial Investment1 | $ 100 | |
All fund and index figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc.
The Target 2010 Composite Index is derived using the following portion allocations: 43% Dow Jones Wilshire 5000 Composite Index, 16% MSCI EAFE Index, 35% Lehman Brothers U.S. Aggregate Bond Index, 3% Lehman Brothers U.S. Treasury Bills: 1–3 Months, and 3% FTSE EPRA/NAREIT Global Index.
The Target 2020 Composite Index is derived using the following portion allocations: 48% Dow Jones Wilshire 5000 Composite Index, 17% MSCI EAFE Index, 29% Lehman Brothers U.S. Aggregate Bond Index, 2% Lehman Brothers U.S. Treasury Bills: 1–3 Months, and 4% FTSE EPRA/NAREIT Global Index.
The Target 2030 Composite Index is derived using the following portion allocations: 52% Dow Jones Wilshire 5000 Composite Index, 19% MSCI EAFE Index, 22% Lehman Brothers U.S. Aggregate Bond Index, 2% Lehman Brothers U.S. Treasury Bills: 1–3 Months, and 5% FTSE EPRA/NAREIT Global Index.
The Target 2040 Composite Index is derived using the following portion allocations: 58% Dow Jones Wilshire 5000 Composite Index, 21% MSCI EAFE Index, 14% Lehman Brothers U.S. Aggregate Bond Index, 2% Lehman Brothers U.S. Treasury Bills: 1–3 Months, and 5% FTSE EPRA/NAREIT Global Index.
The Target Income Composite Index is derived using the following portion allocations: 15% Dow Jones Wilshire 5000 Composite Index, 5% MSCI EAFE Index, 50% Lehman Brothers U.S. Aggregate Bond Index, and 30% Lehman Brothers U.S. Treasury Bills: 1–3 Months.
1 | Please see prospectus for further detail and eligibility requirements. |
Schwab Target Funds 1
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From the Chairman
Charles Schwab
Chairman
Dear Shareholder,
I have been a fan of mutual funds throughout my long investing career. I say this because I firmly believe they are a cost-effective and convenient way for investors to achieve a diversified portfolio. And, as we face increasing uncertainty in global markets, diversification is as important now as it has ever been.
Research has indicated that spreading your money across, and equally important, within, different asset classes, such as stocks, bonds, and cash equivalents, can be the most important factor in determining overall portfolio performance. By maintaining diversification, your portfolio can be better positioned to help you weather the market ups and downs.
With a broad range of investment strategies and styles, Schwab Funds® provides an uncomplicated, effective way to build a well diversified portfolio. You can choose from an array of funds across a range of investment objectives and styles. If you prefer a single investment solution, we offer asset allocation funds based on either risk tolerance or time horizon.
Here at Schwab, our goal is to help you reach your financial goals. With quality funds and services, backed by the guidance and support you need—whatever type of investor you are—we can help you be financially fit today and in the future.
Thank you for investing with us.
Sincerely,
2 Schwab Target Funds
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From the President
Randall W. Merk is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report. He joined the firm in 2002 and has held a variety of executive positions at Schwab.
Dear Shareholder,
In returning to my role as President and CEO of Charles Schwab Investment Management, I would like to thank you for investing in Schwab Funds® and share my thoughts with you on the current market environment.
The reemergence of volatility during this past year has shaken financial markets, both domestically and globally. Subprime mortgage market issues have caused a chain reaction throughout equity and credit markets, and investors are undoubtedly concerned about their financial outlook in the near future. As riskier securities came under pressure during this past August’s market correction, investors fled to “safer haven” investments, such as U.S. Treasuries.
Attempting to time the market in this way can be both a frustrating and risky experience. We have always believed your best protection against swings in market volatility is to maintain a well-diversified investment portfolio that is built to provide long-term performance.
Thank you for entrusting us with your investments. I speak for all of us at Schwab when I say our goal is to give you the financial products, guidance, and personal relationship you need to be financially fit.
Sincerely,
Schwab Target Funds 3
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The Investment Environment
Jeffrey Mortimer, CFA, a senior vice president and chief investment officer, equities, has overall responsibility for the management of the funds.
During the past year, the global economy benefited from positive earnings growth, an ample supply of liquidity, and reasonably low volatility. Investors became increasingly bullish, and firms financed a record level of private equity buyouts, acquisitions, and stock buybacks. However, the housing market correction, and more recently, turmoil in the subprime mortgage market, has had a ripple effect throughout the U.S. and global economy. Several key issues continued to resonate with investors, including the deterioration of the housing market, the lagged effects of monetary policy, tightening of lending standards, and rising energy prices.
The U.S. economy grew at a sub-par pace during the early part of the report period, consistent with the Federal Reserve’s (the Fed’s) engineered soft landing. Throughout its statements, the Fed noted that the economy would grow at a more moderate rate as a result of prior rate increases, lagged effects of higher energy prices, and a cooling housing market. As any rate below 3% is generally considered to be sub-par, the economy appeared to be on a trend of underperformance. However, Gross Domestic Product (GDP) in the second and third quarter of 2007 surprised on the upside; 3.8% and an advanced 3.9%, respectively. Though consumer spending weighed heavily in recent improved GDP readings, tightening credit conditions and continued deterioration in the U.S. housing market remained imminent threats to household equity, a meaningful underpinning of consumer spending.
The housing market remained a significant headwind for U.S. economic growth during the report period. New- and existing-home sales trended downward, and inventories reached an alarming 10.5-month supply (existing homes) by September 2007. Initial concerns that troubles in the housing market would spill over to the rest of the economy became more pronounced, as declining housing starts and home sales caused builders and mortgage lenders to layoff thousands of employees. Delinquency rates on subprime mortgages and foreclosures on residential homes continued on an upward trend as well, further pushing back a recovery in an already weakened market.
The recent tightening of lending standards had a detrimental effect on economic growth as well. Though subprime mortgages were able to find their way into securitized structures via relaxed access to credit and ample liquidity, the increased frequency of defaults by subprime borrowers stressed securities holding these mortgages, leading to wider spreads and higher risk. Evidence that subprime issues had emerged became more pronounced after February’s spike in volatility, which only compounded throughout the report period. Liquidity in the
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
14.56% | S&P 500® Index: measures U.S. large-cap stocks |
9.27% | Russell 2000® Index: measures U.S. small-cap stocks |
24.91% | MSCI-EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East |
5.38% | Lehman Brothers U.S. Aggregate Bond Index: measures the U.S. bond market |
4.97% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Charles Schwab & Co., Inc.
4 Schwab Target Funds
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The Investment Environment continued
market for these riskier securities essentially dried up after this recent summer’s market correction, putting financial institutions laden with subprime debt into financial turmoil. While the Fed helped improve liquidity issues at first by pumping money into the banking system and using the discount rate to reduce rates, many lenders reduced or cancelled altogether certain subprime lending programs.
Market volatility also had a significant impact on quantitative strategies in July and August of 2007. In a recent report by Lehman Brothers, it is believed that several large multi-strategy managers experienced significant losses in their fixed income portfolios. In order to raise cash to cover potential redemptions, and hesitant to price their now lower-valued portfolios, money managers sold their most liquid holdings in the U.S. equity market. As trades came into the market, the adverse effect that followed was that long positions declined and short positions rallied. The end result was that billions of dollars were turned over during this “quant squeeze,” leading to wider spreads and volatility in market prices.
The timing of recent turmoil in the financial markets partially stems from the fact that monetary policy typically acts with a lagged effect on the broader economy. While generally accepted that the effects of Fed rate hikes have a lag of between three and 18 months, it’s also believed that most of the effects can be seen around the twelfth month. Working back from February 2007’s correction in global markets, the Fed funds target rate was 4.25%, yet the Fed didn’t stop raising rates until June 2006, when it finally reached 5.25%. The 12-month lag, therefore, would indicate that subsequent rate hikes were finally hitting the market, as we saw during the recent summer months.
The Fed held its target for the Fed funds rate for most of the period at 5.25%. However, as conditions in the market progressively worsened, the Fed cut twice, bringing the target rate down to 4.50% by the end of the report period. Although it noted recent economic growth was solid and conditions in financial markets were markedly improved, it also expressed its concern that conditions in the housing market could hinder the economic expansion in the near term.
Against this backdrop of economic data, the market priced in future Fed rate cuts. The housing market showed little to no sign that a bottom is anywhere in the near future, labor markets faced continued downward pressures, and energy prices remained elevated. Oil reached all time highs over the year, closing out just above $96 a barrel as of the end of the report period. While the tax-like effect of higher energy prices, declining equity values in residential real estate, and the lag effect of monetary policy remained significant headwinds for the U.S. economy, the Fed’s recent response to a volatile market eased investor concern toward the end of the period.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Target Funds 5
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Schwab Target 2010 Fund
Jeffrey Mortimer CFA (left), senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee (right) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Kimon Daifotis CFA, senior vice president and chief investment officer, fixed-income, is responsible for the overall management of the bond and cash portions of the fund.
The Schwab Target Funds (the funds) invest in a combination of other Schwab Funds and Laudus Funds (underlying funds). These underlying funds include stock, bond and money market mutual funds and are used by the funds to meet their various target asset allocations and investment styles. Performance of the funds thus reflects a blend of the results of their underlying funds.
Schwab Target 2010 Fund (the fund) returned 13.02% for the period, outperforming its benchmark, the Target 2010 Composite Index, which returned 12.89%. The fund has the shortest time horizon of the four dated funds and as such, has the lowest percentage of its assets allocated to equities. The fund’s primary target allocations are 62% of assets in equity securities and 35% in fixed-income securities. The Fund’s allocation to equity securities positively contributed to performance, as equity markets, both domestic and international, ended the period in positive territory. Within the equity allocation, top performing funds included those with an international equity focus, such as the Laudus Rosenberg International Small-Cap Fund and the Laudus International MarketMasters Fund. Within the fixed income allocation of the fund, the Schwab Total Bond Market Fund contributed to returns. However, during the report period, the markets experienced several spikes in volatility. Towards the end of the report period, the fixed income markets experienced a flight to safety, triggered in part by the increased frequency of defaults and the fear of contagion from the subprime mortgage market, as well as the market’s anxious anticipation of $200 billion in high yield securities to finance a number of leveraged buyouts (LBOs). The Federal Reserve’s (the Fed) subsequent moves to add liquidity into the banking system and cut the Fed funds target rate eased stress in the financial system.
As of 10/31/07:
Statistics
Number of Holdings | 12 |
Weighted Average
Market Cap
($ x 1,000,000) | $38,560 |
Price/Earnings Ratio (P/E) | 16.7 |
Price/Book Ratio (P/B) | 2.6 |
Portfolio Turnover Rate | 1% |
Asset Class Weightings % of Investments
Equity Funds - Domestic | 34.3% |
Equity Funds - International | 33.3% |
Fixed-Income Funds | 29.2% |
Short-Term Investments | 3.2% |
Total | 100.0% |
Top Holdings % of Net Assets1
Schwab Total Bond Market Fund | 27.4% |
Laudus Rosenberg International
Small Capitalization Fund,
Institutional Shares | 17.3% |
Schwab Core Equity Fund | 16.6% |
Laudus International MarketMasters
Fund, Select Shares | 11.5% |
Laudus Rosenberg U.S. Large
Capitalization Growth Fund,
Institutional Shares | 5.2% |
Schwab Dividend Equity Fund,
Select Shares | 5.0% |
Schwab Small-Cap Equity Fund,
Select Shares | 4.6% |
Schwab Global Real Estate
Fund, Select Shares | 4.4% |
Laudus Rosenberg US. Discovery
Fund, Institutional Shares | 2.8% |
Schwab YieldPlus Fund, Select Shares | 1.7% |
Total | 96.5% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Group of Funds includes the Laudus Rosenberg Funds, which are part of the Laudus Trust and distributed by ALPS Distributor, Inc., and the Laudus MarketMasters Funds, which are part of the Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Target Funds
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Schwab Target 2010 Fund
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1,3
$10,000 Investment1,3
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | Since Inception | ||||||
Fund: Schwab Target 2010 Fund (7/1/05) | 13.02% | 12.32% | ||||||
Benchmark: Target 2010 Composite Index3 | 12.89% | 12.19% | ||||||
Fund Category: Morningstar Target-Date 2000-2014 | 9.66% | 7.54% |
Fund Expense Ratios4: Net 0.89%; Gross 1.10%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | The Target 2010 Composite Index is derived using the following portion allocations: 43% Dow Jones Wilshire 5000 Composite Index, 16% MSCI EAFE Index, 35% Lehman Brothers U.S. Aggregate Bond Index, 3% Lehman Brothers U.S. Treasury Bills: 1–3 Months, and 3% FTSE EPRA/NAREIT Global Index. |
4 | As of 2/28/07 (amended on 10/31/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Target Funds invest. The annualized weighted average expense ratio of the Underlying Funds was 0.83%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Target Funds 7
Table of Contents
Schwab Target 2020 Fund
Jeffrey Mortimer CFA (left), senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee (right) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Kimon Daifotis CFA, senior vice president and chief investment officer, fixed-income, is responsible for the overall management of the bond and cash portions of the fund.
The Schwab Target Funds (the funds) invest in a combination of other Schwab Funds and Laudus Funds (underlying funds). These underlying funds include stock, bond and money market mutual funds and are used by the funds to meet their various target asset allocations and investment styles. Performance of the funds thus reflects a blend of the results of their underlying funds.
Schwab Target 2020 Fund (the fund) returned 13.47% for the report period, closely tracking its benchmark, the Target 2020 Composite Index, which returned 13.69%. The fund has the second shortest time horizon of the four dated funds and allocates its assets primarily to equity securities and fixed-income securities. The Fund’s primary target allocations are 69% of assets in equity securities and 29% of its assets in fixed-income securities. The fund’s emphasis on equity securities positively contributed to performance, as equity markets, both domestic and international, rallied during the period. Within the equity allocation, top performing funds included those with an international equity focus, such as the Laudus Rosenberg International Small-Cap Fund and the Laudus International MarketMasters Fund. Within the fixed income allocation of the fund, the Schwab Total Bond Market Fund contributed to returns. However, during the report period, the markets experienced several spikes in volatility. Towards the end of the report period, the fixed income markets experienced a flight to safety, triggered in part by the increased frequency of defaults and the fear of contagion from the subprime mortgage market, as well as the market’s anxious anticipation of $200 billion in high yield securities to finance a number of leveraged buyouts (LBOs). The Federal Reserve’s (the Fed) subsequent moves to add liquidity into the banking system and cut the Fed funds target rate eased stress in the financial system.
As of 10/31/07:
Statistics
Number of Holdings | 13 |
Weighted Average
Market Cap
($ x 1,000,000) | $38,066 |
Price/Earnings Ratio (P/E) | 16.4 |
Price/Book Ratio (P/B) | 2.6 |
Portfolio Turnover Rate | - |
Asset Class Weightings % of Investments
Equity Funds - Domestic | 37.0% |
Equity Funds - International | 35.7% |
Fixed-Income Funds | 22.8% |
Short-Term Investments | 4.5% |
Total | 100.0% |
Top Holdings % of Net Assets1
Schwab Total Bond Market Fund | 21.9% |
Laudus Rosenberg International
Small Capitalization Fund,
Institutional Shares | 20.2% |
Schwab Core Equity Fund | 17.2% |
Laudus International MarketMasters
Fund, Select Shares | 9.5% |
Laudus Rosenberg U.S. Large
Capitalization Growth Fund,
Institutional Shares | 6.3% |
Schwab Global Real Estate
Fund, Select Shares | 5.9% |
Schwab Dividend Equity Fund,
Select Shares | 5.8% |
Schwab Small-Cap Equity Fund,
Select Shares | 5.2% |
Laudus Rosenberg U.S. Discovery
Fund, Institutional Shares | 2.5% |
Schwab Value Advantage Money
Fund, Institutional Shares | 0.9% |
Total | 95.4% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Group of Funds includes the Laudus Rosenberg Funds, which are part of the Laudus Trust and distributed by ALPS Distributor, Inc., and the Laudus MarketMasters Funds, which are part of the Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Target Funds
Table of Contents
Schwab Target 2020 Fund
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1,3
$10,000 Investment1,3
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | Since Inception | ||||||
Fund: Schwab Target 2020 Fund (7/1/05) | 13.47% | 13.11% | ||||||
Benchmark: Target 2020 Composite Index3 | 13.69% | 13.12% | ||||||
Fund Category: Morningstar Target-Date 2015-2029 | 14.32% | 11.34% |
Fund Expense Ratios4: Net 0.92%; Gross 1.10%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | The Target 2020 Composite Index is derived using the following portion allocations: 48% Dow Jones Wilshire 5000 Composite Index, 17% MSCI EAFE Index, 29% Lehman Brothers U.S. Aggregate Bond Index, 2% Lehman Brothers U.S. Treasury Bills: 1–3 Months, and 4% FTSE EPRA/NAREIT Global Index. |
4 | As of 2/28/07 (amended on 10/31/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Target Funds invest. The annualized weighted average expense ratio of the Underlying Funds was 0.88%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Target Funds 9
Table of Contents
Schwab Target 2030 Fund
Jeffrey Mortimer CFA (left), senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee (right) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Kimon Daifotis CFA, senior vice president and chief investment officer, fixed-income, is responsible for the overall management of the bond and cash portions of the fund.
The Schwab Target Funds (the funds) invest in a combination of other Schwab Funds and Laudus Funds (underlying funds). These underlying funds include stock, bond and money market mutual funds and are used by the funds to meet their various target asset allocations and investment styles. Performance of the funds thus reflects a blend of the results of their underlying funds.
Schwab Target 2030 Fund (the fund) returned 14.45% for the period, closely tracking its benchmark, the Target 2030 Composite Index, which returned 14.51%. The fund has the second farthest time horizon of the four dated funds and as such, has an even larger percentage of its assets allocated to equities as compared to its earlier dated counterparts. The fund’s primary asset allocation targets are 76% of its assets towards equity securities and 22% of its assets towards fixed-income securities. The fund’s emphasis on equity securities positively contributed to performance, as equity markets, both domestic and international, rallied during the period. Within the equity allocation, top performing funds included those with an international equity focus, such as the Laudus Rosenberg International Small-Cap Fund and the Laudus International MarketMasters Fund. Within the fixed income allocation of the fund, the Schwab Total Bond Market Fund contributed to returns. However, during the report period, the markets experienced several spikes in volatility. Towards the end of the report period, the fixed income markets experienced a flight to safety, triggered in part by the increased frequency of defaults and the fear of contagion from the subprime mortgage market, as well as the market’s anxious anticipation of $200 billion in high yield securities to finance a number of leveraged buyouts (LBOs). The Federal Reserve’s (the Fed) subsequent moves to add liquidity into the banking system and cut the Fed funds target rate eased stress in the financial system.
As of 10/31/07:
Statistics
Number of Holdings | 13 |
Weighted Average
Market Cap
($ x 1,000,000) | $39,041 |
Price/Earnings Ratio (P/E) | 16.7 |
Price/Book Ratio (P/B) | 2.7 |
Portfolio Turnover Rate | - |
Asset Class Weightings % of Investments
Equity Funds - Domestic | 40.7% |
Equity Funds - International | 39.0% |
Fixed - Income Funds | 16.1% |
Short-Term Investments | 4.2% |
Total | 100.0% |
Top Holdings % of Net Assets1
Schwab Core Equity Fund | 19.9% |
Laudus Rosenberg International
Small Capitalization Fund,
Institutional Shares | 19.5% |
Schwab Total Bond Market Fund | 15.5% |
Laudus International MarketMasters
Fund, Select Shares | 13.9% |
Laudus Rosenberg U.S. Large
Capitalization Growth Fund,
Institutional Shares | 6.2% |
Schwab Dividend Equity Fund,
Select Shares | 5.9% |
Schwab Small-Cap Equity Fund,
Select Shares | 5.6% |
Schwab Global Real Estate
Fund, Select Shares | 5.4% |
Laudus Rosenberg US. Discovery
Fund, Institutional Shares | 3.0% |
Schwab Value Advantage Money
Fund, Institutional Shares | 0.6% |
Total | 95.5% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Group of Funds includes the Laudus Rosenberg Funds, which are part of the Laudus Trust and distributed by ALPS Distributor, Inc., and the Laudus MarketMasters Funds, which are part of the Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Target Funds
Table of Contents
Schwab Target 2030 Fund
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1,3
$10,000 Investment1,3
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | Since Inception | ||||||
Fund: Schwab Target 2030 Fund (7/1/05) | 14.45% | 13.93% | ||||||
Benchmark: Target 2030 Composite Index3 | 14.51% | 14.01% | ||||||
Fund Category: Morningstar Target-Date 2030+ | 17.31% | 14.30% |
Fund Expense Ratios4: Net 0.92%; Gross 1.21%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | The Target 2030 Composite Index is derived using the following portion allocations: 52% Dow Jones Wilshire 5000 Composite Index, 19% MSCI EAFE Index, 22% Lehman Brothers U.S. Aggregate Bond Index, 2% Lehman Brothers U.S. Treasury Bills: 1–3 Months, and 5% FTSE EPRA/NAREIT Global Index. |
4 | As of 2/28/07 (amended on 10/31/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Target Funds invest. The annualized weighted average expense ratio of the Underlying Funds was 0.89%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Target Funds 11
Table of Contents
Schwab Target 2040 Fund
Jeffrey Mortimer CFA (left), senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee (right) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Kimon Daifotis CFA, senior vice president and chief investment officer, fixed-income, is responsible for the overall management of the bond and cash portions of the fund.
The Schwab Target Funds (the funds) invest in a combination of other Schwab Funds and Laudus Funds (underlying funds). These underlying funds include stock, bond and money market mutual funds and are used by the funds to meet their various target asset allocations and investment styles. Performance of the funds thus reflects a blend of the results of their underlying funds.
Schwab Target 2040 Fund (the fund) returned 15.32% for the period, closely tracking its benchmark, the Target 2040 Composite Index, which returned 15.47%. The fund has the farthest time horizon of the four dated funds and as such, has the largest percentage of assets allocated to equity securities. The Fund’s primary target allocations are 84% of its assets to equity securities and 14% of its assets to fixed-income securities. The fund’s emphasis on equity securities positively contributed to performance, as equity markets, both domestic and international, rallied during the period. Within the equity allocation, top performing funds included those with an international equity focus, such as the Laudus Rosenberg International Small-Cap Fund and the Laudus International MarketMasters Fund. Within the fixed income allocation of the fund, the Schwab Total Bond Market Fund contributed to returns. However, during the report period, the markets experienced several spikes in volatility. Towards the end of the report period, the fixed income markets experienced a flight to safety, triggered in part by the increased frequency of defaults and the fear of contagion from the subprime mortgage market, as well as the market’s anxious anticipation of $200 billion in high yield securities to finance a number of leveraged buyouts (LBOs). The Federal Reserve’s (the Fed) subsequent moves to add liquidity into the banking system and cut the Fed funds target rate eased stress in the financial system.
As of 10/31/07:
Statistics
Number of Holdings | 14 |
Weighted Average
Market Cap
($ x 1,000,000) | $37,526 |
Price/Earnings Ratio (P/E) | 16.3 |
Price/Book Ratio (P/B) | 2.5 |
Portfolio Turnover Rate | - |
Asset Class Weightings % of Investments
Equity Funds-International | 42.5% |
Equity Funds-Domestic | 41.5% |
Fixed-Income Funds | 9.4% |
Short-Term Investments | 6.6% |
Total | 100.0% |
Top Holdings % of Net Assets1
Laudus Rosenberg International
Small Capitalization Fund,
Institutional Shares | 23.2% |
Schwab Core Equity Fund | 21.3% |
Laudus International MarketMasters
Fund, Select Shares | 11.2% |
Schwab Total Bond Market Fund | 8.8% |
Schwab Global Real Estate
Fund, Select Shares | 7.7% |
Laudus Rosenberg U.S. Large
Capitalization Growth Fund,
Institutional Shares | 5.8% |
Schwab Dividend Equity Fund,
Select Shares | 5.5% |
Schwab Small-Cap Equity Fund,
Select Shares | 5.4% |
Laudus Rosenberg U.S. Discovery
Fund, Institutional Shares | 3.2% |
Schwab Value Advantage Money
Fund, Institutional Shares | 0.5% |
Total | 92.6% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Group of Funds includes the Laudus Rosenberg Funds, which are part of the Laudus Trust and distributed by ALPS Distributor, Inc., and the Laudus MarketMasters Funds, which are part of the Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Target Funds
Table of Contents
Schwab Target 2040 Fund
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1,3
$10,000 Investment1,3
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | Since Inception | ||||||
Fund: Schwab Target 2040 Fund (7/1/05) | 15.32% | 14.99% | ||||||
Benchmark: Target 2040 Composite Index3 | 15.47% | 15.02% | ||||||
Fund Category: Morningstar Target-Date 2030+ | 17.31% | 14.30% |
Fund Expense Ratios4: Net 0.94%; Gross 1.41%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | The Target 2040 Composite Index is derived using the following portion allocations: 58% Dow Jones Wilshire 5000 Composite Index, 21% MSCI EAFE Index, 14% Lehman Brothers U.S. Aggregate Bond Index, 2% Lehman Brothers U.S. Treasury Bills: 1–3 Months, and 5% FTSE EPRA/NAREIT Global Index. |
4 | As of 2/28/07 (amended on 10/31/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Target Funds invest. The annualized weighted average expense ratio of the Underlying Funds was 0.93%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Target Funds 13
Table of Contents
Schwab Retirement Income Fund
Jeffrey Mortimer CFA (left), senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee (right) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Kimon Daifotis CFA, senior vice president and chief investment officer, fixed-income, is responsible for the overall management of the bond and cash portions of the fund.
The Schwab Target Funds (the funds) invest in a combination of other Schwab Funds and Laudus Funds (underlying funds). These underlying funds include stock, bond and money market mutual funds and are used by the funds to meet their various target asset allocations and investment styles. Performance of the funds thus reflects a blend of the results of their underlying funds.
Schwab Retirement Income Fund (the fund) returned 6.98% for the period, trailing its benchmark, the Target Income Composite Index, which returned 7.67%. The fund is designed for investors currently in retirement, and as such, has a majority of its portfolio invested in fixed income, ultra-short fixed income and money market funds. In addition, it seeks to provide current income with equity growth potential. Since the fund invests up to 75% of its assets in fixed-income and ultra-short fixed-income securities, the performance of the bond market had a significant impact on the fund’s performance. Within the fixed income allocation of the fund, the Schwab Total Bond Market Fund contributed to returns. However, during the report period, the markets experienced several spikes in volatility. Towards the end of the report period, the fixed income markets experienced a flight to safety, triggered in part by the increased frequency of defaults and the fear of contagion from the subprime mortgage market, as well as the market’s anxious anticipation of $200 billion in high yield securities to finance a number of leveraged buyouts (LBOs). The Federal Reserve’s (the Fed) subsequent moves to add liquidity into the banking system and cut the Fed funds target rate eased stress in the financial system.
As of 10/31/07:
Statistics
Number of Holdings | 7 |
Weighted Average
Market Cap
($ x 1,000,000) | $57,256 |
Price/Earnings Ratio (P/E) | 17.0 |
Price/Book Ratio (P/B) | 3.0 |
Portfolio Turnover Rate | - |
Asset Class Weightings % of Investments
Fixed-Income Funds | 69.7% |
Equity Funds- Domestic | 15.3% |
Short-Term Investments | 9.2% |
Equity Funds-International | 5.8% |
Total | 100.0% |
Top Holdings % of Net Assets1
Schwab Total Bond Market Fund | 46.7% |
Schwab YieldPlus Fund, Select Shares | 22.8% |
Schwab Dividend Equity Fund,
Select Shares | 15.3% |
Laudus International MarketMasters
Fund, Select Shares | 5.8% |
Schwab Value Advantage Money
Fund, Institutional Shares | 4.3% |
Total | 94.9% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Group of Funds includes the Laudus Rosenberg Funds, which are part of the Laudus Trust and distributed by ALPS Distributor, Inc., and the Laudus MarketMasters Funds, which are part of the Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Target Funds
Table of Contents
Schwab Retirement Income Fund
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1,3
$10,000 Investment1,3
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | Since Inception | ||||||
Fund: Schwab Retirement Income Fund (7/1/05) | 6.98% | 6.23% | ||||||
Benchmark: Target Income Composite Index3 | 7.67% | 6.68% | ||||||
Fund Category: Morningstar Conservative Allocation | 8.12% | 7.17% |
Fund Expense Ratios4: Net 0.72%; Gross 0.98%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | The Target Income Composite Index is derived using the following portion allocations: 15% Dow Jones Wilshire 5000 Composite Index, 5% MSCI EAFE Index, 50% Lehman Brothers U.S. Aggregate Bond Index, and 30% Lehman Brothers U.S. Treasury Bills: 1–3 Months. |
4 | As of 2/28/07 (amended on 10/31/07) as stated in the prospectus. Includes expenses of the Underlying Funds in which the Target Funds invest. The annualized weighted average expense ratio of the Underlying Funds was 0.62%. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Target Funds 15
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees; and, ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six-months beginning May 1, 2007 and held through October 31, 2007.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund or share class under the heading entitled ‘Expenses Paid During Period‘.
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/07 | at 10/31/07 | 5/1/07 - 10/31/07 | |||||||||||||
Schwab 2010 Target Fund | ||||||||||||||||
Actual Return | 0.06% | $ | 1,000 | $ | 1,042.00 | $ | 0.31 | |||||||||
Hypothetical 5% Return | 0.06% | $ | 1,000 | $ | 1,024.90 | $ | 0.31 | |||||||||
Schwab 2020 Target Fund | ||||||||||||||||
Actual Return | 0.04% | $ | 1,000 | $ | 1,039.50 | $ | 0.21 | |||||||||
Hypothetical 5% Return | 0.04% | $ | 1,000 | $ | 1,025.00 | $ | 0.20 | |||||||||
Schwab 2030 Target Fund | ||||||||||||||||
Actual Return | 0.03% | $ | 1,000 | $ | 1,043.70 | $ | 0.15 | |||||||||
Hypothetical 5% Return | 0.03% | $ | 1,000 | $ | 1,025.05 | $ | 0.15 | |||||||||
Schwab 2040 Target Fund | ||||||||||||||||
Actual Return | 0.01% | $ | 1,000 | $ | 1,044.30 | $ | 0.05 | |||||||||
Hypothetical 5% Return | 0.01% | $ | 1,000 | $ | 1,025.16 | $ | 0.05 | |||||||||
Schwab Retirement Income Fund | ||||||||||||||||
Actual Return | 0.10% | $ | 1,000 | $ | 1,020.20 | $ | 0.51 | |||||||||
Hypothetical 5% Return | 0.10% | $ | 1,000 | $ | 1,024.70 | $ | 0.51 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights; does not include expenses of underlying funds in which the Target Funds invest. |
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 184 days of the period, and divided by 365 days of the fiscal year. |
16 Schwab Target Funds
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 7/1/051- | ||||||||||
10/31/07 | 10/31/06 | 10/31/05 | ||||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 11.42 | 10.24 | 10.00 | |||||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.23 | 0.22 | 0.04 | |||||||||
Net realized and unrealized gains | 1.24 | 1.13 | 0.20 | |||||||||
Total income from investment operations | 1.47 | 1.35 | 0.24 | |||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.21 | ) | (0.17 | ) | — | |||||||
Distributions from net realized gains | (0.03 | ) | — | — | ||||||||
Total distributions | (0.24 | ) | (0.17 | ) | — | |||||||
Net asset value at end of period | 12.65 | 11.42 | 10.24 | |||||||||
Total return (%) | 13.02 | 13.39 | 2.40 | 2 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses3 | 0.06 | 0.06 | 0.06 | 4 | ||||||||
Gross operating expenses3 | 0.09 | 0.27 | 0.37 | 4 | ||||||||
Net investment income | 2.10 | 2.12 | 1.51 | 4 | ||||||||
Portfolio turnover rate | 1 | 0 | 5 | — | ||||||||
Net assets, end of period ($ x 1,000,000) | 138 | 62 | 32 |
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 1%.
See financial notes 17
Table of Contents
Schwab Target 2010 Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
97 | .1% | Other Investment Companies | 120,690 | 133,720 | ||||||||
2 | .6% | Short-Term Investment | 3,577 | 3,577 | ||||||||
99 | .7% | Total Investments | 124,267 | 137,297 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 471 | |||||||||
100 | .0% | Total Net Assets | 137,768 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Other Investment Companies 97.1% of net assets | ||||||||
Equity Funds 67.4% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 609,978 | 15,860 | ||||||
Laudus Rosenberg International Small Capitalization Fund, Institutional Shares (a) | 965,205 | 23,802 | ||||||
Laudus Rosenberg U.S. Discovery Fund, Institutional Shares (a) | 185,106 | 3,791 | ||||||
Laudus Rosenberg U.S. Large Capitalization Growth Fund, Institutional Shares (a) | 638,511 | 7,228 | ||||||
Schwab Core Equity Fund (a) | 1,114,590 | 22,838 | ||||||
Schwab Dividend Equity Fund, Select Shares (a) | 440,849 | 6,904 | ||||||
Schwab Global Real Estate Fund, Select Shares (a) | 619,134 | 6,080 | ||||||
Schwab Small-Cap Equity Fund, Select Shares (a) | 346,119 | 6,306 | ||||||
92,809 | ||||||||
Fixed-Income Funds 29.1% | ||||||||
Schwab Total Bond Market Fund (a) | 3,847,468 | 37,705 | ||||||
Schwab YieldPlus Fund, Select Shares (a) | 251,794 | 2,372 | ||||||
40,077 | ||||||||
Money Funds 0.6% | ||||||||
Schwab Value Advantage Money Fund, Institutional Shares (a) | 834,143 | 834 | ||||||
Total Other Investment Companies (Cost $120,690) | 133,720 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investment 2.6% of net assets | ||||||||
Commercial Paper & Other Obligations 2.6% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 3,577 | 3,577 | ||||||
Total Short-Term Investments (Cost $3,577) | 3,577 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $124,286 and the unrealized appreciation and depreciation were $13,276 and ($265), respectively, with a net unrealized appreciation of $13,011. |
(a) | Issuer is affiliated with the fund’s adviser. |
18 See financial notes
Table of Contents
Schwab Target 2010 Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $120,690) | $133,720 | |||||
Investments in unaffiliated issuers, at value (cost $3,577) | + | 3,577 | ||||
Total investments, at value (cost $124,267) | 137,297 | |||||
Receivables: | ||||||
Fund shares sold | 555 | |||||
Dividends | 188 | |||||
Due from investment adviser | 5 | |||||
Interest | + | 1 | ||||
Total assets | 138,046 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 186 | |||||
Fund shares redeemed | 66 | |||||
Accrued expenses | + | 26 | ||||
Total liabilities | 278 | |||||
Net Assets | ||||||
Total assets | 138,046 | |||||
Total liabilities | − | 278 | ||||
Net assets | $137,768 | |||||
Net Assets by Source | ||||||
Capital received from investors | 122,000 | |||||
Net investment income not yet distributed | 1,640 | |||||
Net realized capital gains | 1,098 | |||||
Net unrealized capital gains | 13,030 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$137,768 | 10,894 | $12.65 |
See financial notes 19
Table of Contents
Schwab Target 2010 Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds | $2,065 | |||||
Interest | + | 102 | ||||
Total investment income | 2,167 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains received from affiliated underlying funds | 1,292 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on affiliated underlying funds | 8,350 | |||||
Expenses | ||||||
Professional fees | 34 | |||||
Registration fees | 20 | |||||
Portfolio accounting fees | 16 | |||||
Shareholder reports | 8 | |||||
Trustees’ fees | 6 | |||||
Custodian fees | 5 | |||||
Other expenses | + | 1 | ||||
Total expenses | 90 | |||||
Expense reduction by adviser | − | 30 | ||||
Net expenses | 60 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 2,167 | |||||
Net expenses | − | 60 | ||||
Net investment income | 2,107 | |||||
Net realized gains | 1,292 | |||||
Net unrealized gains | + | 8,350 | ||||
Increase in net assets from operations | $11,749 |
20 See financial notes
Table of Contents
Schwab Target 2010 Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $2,107 | $965 | ||||||
Net realized gains | 1,292 | 245 | ||||||
Net unrealized gains | + | 8,350 | 4,325 | |||||
Increase in net assets from operations | 11,749 | 5,535 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | 1,251 | 592 | ||||||
Distributions from net realized gains | + | 165 | — | |||||
Total distributions | $1,416 | $592 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 7,558 | $90,601 | 3,028 | $32,857 | ||||||||||||||
Shares Reinvested | 113 | 1,309 | 52 | 546 | ||||||||||||||
Shares Redeemed | + | (2,209 | ) | (26,511 | ) | (749 | ) | (8,074 | ) | |||||||||
Net transactions in fund shares | 5,462 | $65,399 | 2,331 | $25,329 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 5,432 | $62,036 | 3,101 | $31,764 | ||||||||||||||
Total increase | + | 5,462 | 75,732 | 2,331 | 30,272 | |||||||||||||
End of period | 10,894 | $137,768 | 5,432 | $62,036 | ||||||||||||||
Net investment income not yet distributed | $1,640 | $603 |
See financial notes 21
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 7/1/051 - | ||||||||||
10/31/07 | 10/31/06 | 10/31/05 | ||||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 11.56 | 10.28 | 10.00 | |||||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.21 | 0.21 | 0.04 | |||||||||
Net realized and unrealized gains | 1.33 | 1.25 | 0.24 | |||||||||
Total income from investment operations | 1.54 | 1.46 | 0.28 | |||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.19 | ) | (0.18 | ) | — | |||||||
Distributions from net realized gains | (0.03 | ) | — | — | ||||||||
Total distributions | (0.22 | ) | (0.18 | ) | — | |||||||
Net asset value at end of period | 12.88 | 11.56 | 10.28 | |||||||||
Total return (%) | 13.47 | 14.36 | 2.80 | 2 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses3 | 0.04 | 0.04 | 0.04 | 4 | ||||||||
Gross operating expenses3 | 0.07 | 0.22 | 0.36 | 4 | ||||||||
Net investment income | 1.84 | 1.84 | 1.29 | 4 | ||||||||
Portfolio turnover rate | — | — | — | |||||||||
Net assets, end of period ($ x 1,000,000) | 225 | 84 | 35 |
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.
22 See financial notes
Table of Contents
Schwab Target 2020 Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
96 | .3% | Other Investment Companies | 196,386 | 216,158 | ||||||||
3 | .6% | Short-Term Investments | 8,125 | 8,125 | ||||||||
99 | .9% | Total Investments | 204,511 | 224,283 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 244 | |||||||||
100 | .0% | Total Net Assets | 224,527 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Other Investment Companies 96.3% of net assets | ||||||||
Equity Funds 72.6% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 824,668 | 21,441 | ||||||
Laudus Rosenberg International Small Capitalization Fund, Institutional Shares (a) | 1,838,288 | 45,332 | ||||||
Laudus Rosenberg U.S. Discovery Fund, Institutional Shares (a) | 269,181 | 5,513 | ||||||
Laudus Rosenberg U.S. Large Capitalization Growth Fund, Institutional Shares (a) | 1,250,808 | 14,159 | ||||||
Schwab Core Equity Fund (a) | 1,884,922 | 38,622 | ||||||
Schwab Dividend Equity Fund, Select Shares (a) | 838,465 | 13,130 | ||||||
Schwab Global Real Estate Fund, Select Shares (a) | 1,345,083 | 13,209 | ||||||
Schwab Small-Cap Equity Fund, Select Shares (a) | 639,006 | 11,643 | ||||||
163,049 | ||||||||
Fixed-Income Funds 22.8% | ||||||||
Schwab Total Bond Market Fund (a) | 5,019,895 | 49,195 | ||||||
Schwab YieldPlus Fund, Select Shares (a) | 206,034 | 1,941 | ||||||
51,136 | ||||||||
Money Funds 0.9% | ||||||||
Schwab Value Advantage Money Fund, Institutional Shares (a) | 1,973,298 | 1,973 | ||||||
Total Other Investment Companies (Cost $196,386) | 216,158 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 3.6% of net assets | ||||||||
Commercial Paper & Other Obligations 3.6% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 6,390 | 6,390 | ||||||
Wells Fargo, Grand Cayman Time Deposit | ||||||||
4.75%, 11/01/07 | 1,735 | 1,735 | ||||||
8,125 | ||||||||
Total Short-Term Investments (Cost $8,125) | 8,125 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $204,511 and the unrealized appreciation and depreciation were $19,960 and ($188), respectively, with a net unrealized appreciation of $19,772. |
(a) | Issuer is affiliated with the fund’s adviser. |
See financial notes 23
Table of Contents
Schwab Target 2020 Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $196,386) | $216,158 | |||||
Investment in unaffiliated issuers, at value (cost $8,125) | + | 8,125 | ||||
Total investments, at value (cost $204,511) | 224,283 | |||||
Receivables: | ||||||
Fund shares sold | 378 | |||||
Dividends | 242 | |||||
Due from investment adviser | 2 | |||||
Interest | + | 1 | ||||
Total assets | 224,906 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 238 | |||||
Fund shares redeemed | 113 | |||||
Accrued expenses | + | 28 | ||||
Total liabilities | 379 | |||||
Net Assets | ||||||
Total assets | 224,906 | |||||
Total liabilities | − | 379 | ||||
Net assets | $224,527 | |||||
Net Assets by Source | ||||||
Capital received from investors | 200,781 | |||||
Net investment income not yet distributed | 2,200 | |||||
Net realized capital gains | 1,774 | |||||
Net unrealized capital gains | 19,772 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$224,527 | 17,433 | $12.88 |
24 See financial notes
Table of Contents
Schwab Target 2020 Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds | $2,728 | |||||
Interest | + | 178 | ||||
Total investment income | 2,906 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains received from affiliated underlying funds | 2,089 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on affiliated underlying funds | 13,464 | |||||
Expenses | ||||||
Professional fees | 34 | |||||
Registration fees | 25 | |||||
Shareholder reports | 19 | |||||
Portfolio accounting fees | 17 | |||||
Trustees’ fees | 6 | |||||
Custodian fees | 6 | |||||
Other expenses | + | 1 | ||||
Total expenses | 108 | |||||
Expense reduction by adviser | − | 47 | ||||
Net expenses | 61 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 2,906 | |||||
Net expenses | − | 61 | ||||
Net investment income | 2,845 | |||||
Net realized gains | 2,089 | |||||
Net unrealized gains | + | 13,464 | ||||
Increase in net assets from operations | $18,398 |
See financial notes 25
Table of Contents
Schwab Target 2020 Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $2,845 | $1,061 | ||||||
Net realized gains | 2,089 | 353 | ||||||
Net unrealized gains | + | 13,464 | 5,874 | |||||
Increase in net assets from operations | 18,398 | 7,288 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | 1,577 | 687 | ||||||
Distributions from net realized gains | + | 231 | — | |||||
Total distributions | $1,808 | $687 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 12,465 | $152,246 | 4,728 | $51,841 | ||||||||||||||
Shares Reinvestd | 150 | 1,758 | 64 | 672 | ||||||||||||||
Shares Redeemed | + | (2,418 | ) | (29,709 | ) | (933 | ) | (10,204 | ) | |||||||||
Net transactions in fund shares | 10,197 | $124,295 | 3,859 | $42,309 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 7,236 | $83,642 | 3,377 | $34,732 | ||||||||||||||
Total increase | + | 10,197 | 140,885 | 3,859 | 48,910 | |||||||||||||
End of period | 17,433 | $224,527 | 7,236 | $83,642 | ||||||||||||||
Net investment income not yet distributed | $2,200 | $617 |
26 See financial notes
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 7/1/051- | ||||||||||
10/31/07 | 10/31/06 | 10/31/05 | ||||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 11.67 | 10.31 | 10.00 | |||||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.18 | 0.19 | 0.03 | |||||||||
Net realized and unrealized gains | 1.48 | 1.34 | 0.28 | |||||||||
Total income from investment operations | 1.66 | 1.53 | 0.31 | |||||||||
Less distributions: | ||||||||||||
Distributions from net income | (0.16 | ) | (0.17 | ) | — | |||||||
Distributions from net realized gains | (0.02 | ) | — | — | ||||||||
Total distributions | (0.18 | ) | (0.17 | ) | — | |||||||
Net asset value at end of period | 13.15 | 11.67 | 10.31 | |||||||||
Total return (%) | 14.45 | 14.99 | 3.10 | 2 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses3 | 0.03 | 0.03 | 0.03 | 4 | ||||||||
Gross operating expenses3 | 0.09 | 0.32 | 0.58 | 4 | ||||||||
Net investment income | 1.50 | 1.54 | 1.05 | 4 | ||||||||
Portfolio turnover rate | — | — | — | |||||||||
Net assets, end of period ($ x 1,000,000) | 162 | 56 | 19 |
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.
See financial notes 27
Table of Contents
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
96 | .1% | Other Investment Companies | 140,931 | 155,990 | ||||||||
3 | .6% | Short-Term Investments | 5,876 | 5,876 | ||||||||
99 | .7% | Total Investments | 146,807 | 161,866 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 412 | |||||||||
100 | .0% | Total Net Assets | 162,278 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Other Investment Companies 96.1% of net assets | ||||||||
Equity Funds 79.5% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 865,906 | 22,513 | ||||||
Laudus Rosenberg International Small Capitalization Fund, Institutional Shares (a) | 1,285,960 | 31,712 | ||||||
Laudus Rosenberg U.S. Discovery Fund, Institutional Shares (a) | 236,611 | 4,846 | ||||||
Laudus Rosenberg U.S. Large Capitalization Growth Fund, Institutional Shares (a) | 895,953 | 10,142 | ||||||
Schwab Core Equity Fund (a) | 1,575,368 | 32,279 | ||||||
Schwab Dividend Equity Fund, Select Shares (a) | 615,113 | 9,633 | ||||||
Schwab Global Real Estate Fund, Select Shares (a) | 899,170 | 8,830 | ||||||
Schwab Small-Cap Equity Fund, Select Shares (a) | 501,131 | 9,131 | ||||||
129,086 | ||||||||
Fixed-Income Funds 16.0% | ||||||||
Schwab Total Bond Market Fund (a) | 2,558,546 | 25,074 | ||||||
Schwab YieldPlus Fund, Select Shares (a) | 96,219 | 906 | ||||||
25,980 | ||||||||
Money Funds 0.6% | ||||||||
Schwab Value Advantage Money Fund, Institutional Shares (a) | 924,359 | 924 | ||||||
Total Other Investment Companies (Cost $140,931) | 155,990 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 3.6% of net assets | ||||||||
Commercial Paper & Other Obligations 3.6% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 1,296 | 1,296 | ||||||
Wells Fargo, Grand Cayman Time Deposit | ||||||||
4.75%, 11/01/07 | 4,580 | 4,580 | ||||||
Total Short-Term Investments (Cost $5,876) | 5,876 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $146,807 and the unrealized appreciation and depreciation were $15,109 and ($50), respectively, with a net unrealized appreciation of $15,059. |
(a) | Issuer is affiliated with the fund’s adviser. |
28 See financial notes
Table of Contents
Schwab Target 2030 Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $140,931) | $155,990 | |||||
Investments in unaffiliated issuers, at value (cost $5,876) | + | 5,876 | ||||
Total investments, at value (cost $146,807) | 161,866 | |||||
Receivables: | ||||||
Fund shares sold | 549 | |||||
Dividends | 123 | |||||
Due from investment adviser | 6 | |||||
Interest | + | 1 | ||||
Total assets | 162,545 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 121 | |||||
Fund shares redeemed | 118 | |||||
Accrued expenses | + | 28 | ||||
Total liabilities | 267 | |||||
Net Assets | ||||||
Total assets | 162,545 | |||||
Total liabilities | − | 267 | ||||
Net assets | $162,278 | |||||
Net Assets by Source | ||||||
Capital received from investors | 144,692 | |||||
Net investment income not yet distributed | 1,229 | |||||
Net realized capital gains | 1,298 | |||||
Net unrealized capital gains | 15,059 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$162,278 | 12,338 | $13.15 |
See financial notes 29
Table of Contents
Schwab Target 2030 Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,545 | |||||
Interest | + | 126 | ||||
Total investment income | 1,671 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains received from affiliated underlying funds | 1,486 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on affiliated underlying funds | 10,815 | |||||
Expenses | ||||||
Professional fees | 33 | |||||
Shareholder reports | 18 | |||||
Registration fees | 17 | |||||
Portfolio accounting fees | 16 | |||||
Trustees’ fees | 6 | |||||
Custodian fees | 6 | |||||
Other expenses | + | 1 | ||||
Total expenses | 97 | |||||
Expense reduction by adviser | − | 65 | ||||
Net expenses | 32 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 1,671 | |||||
Net expenses | − | 32 | ||||
Net investment income | 1,639 | |||||
Net realized gains | 1,486 | |||||
Net unrealized gains | + | 10,815 | ||||
Increase in net assets from operations | $13,940 |
30 See financial notes
Table of Contents
Schwab Target 2030 Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $1,639 | $547 | ||||||
Net realized gains | 1,486 | 192 | ||||||
Net unrealized gains | + | 10,815 | 3,992 | |||||
Increase in net assets from operations | 13,940 | 4,731 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | 895 | 360 | ||||||
Distributions from net realized gains | + | 133 | — | |||||
Total distributions | $1,028 | $360 |
Transactions in Fund Shares |
11/01/06-10/31/07 | 11/01/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 9,098 | $112,933 | 3,408 | $37,640 | ||||||||||||||
Shares Reinvested | 83 | 990 | 33 | 346 | ||||||||||||||
Shares Redeemed | + | (1,634 | ) | (20,477 | ) | (497 | ) | (5,487 | ) | |||||||||
Net transactions in fund shares | 7,547 | $93,446 | 2,944 | $32,499 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/01/06-10/31/07 | 11/01/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 4,791 | $55,920 | 1,847 | $19,050 | ||||||||||||||
Total increase | + | 7,547 | 106,358 | 2,944 | 36,870 | |||||||||||||
End of period | 12,338 | $162,278 | 4,791 | $55,920 | ||||||||||||||
Net investment income not yet distributed | $1,229 | $297 |
See financial notes 31
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 7/1/051- | ||||||||||
10/31/07 | 10/31/06 | 10/31/05 | ||||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 11.83 | 10.36 | 10.00 | |||||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.17 | 0.19 | 0.02 | |||||||||
Net realized and unrealized gains | 1.62 | 1.45 | 0.34 | |||||||||
Total income from investment operations | 1.79 | 1.64 | 0.36 | |||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.15 | ) | (0.17 | ) | — | |||||||
Distributions from net realized gains | (0.02 | ) | — | — | ||||||||
Total distributions | (0.17 | ) | (0.17 | ) | — | |||||||
Net asset value at end of period | 13.45 | 11.83 | 10.36 | |||||||||
Total return (%) | 15.32 | 16.06 | 3.60 | 2 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses3 | 0.01 | 0.01 | 0.01 | 4 | ||||||||
Gross operating expenses3 | 0.13 | 0.48 | 1.10 | 4 | ||||||||
Net investment income | 1.19 | 1.26 | 0.80 | 4 | ||||||||
Portfolio turnover rate | — | 1 | — | |||||||||
Net assets, end of period ($ x 1,000,000) | 118 | 34 | 9 |
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.
32 See financial notes
Table of Contents
Schwab Target 2040 Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
93 | .2% | Other Investment Companies | 99,735 | 110,096 | ||||||||
6 | .1% | Short-Term Investments | 7,182 | 7,182 | ||||||||
99 | .3% | Total Investments | 106,917 | 117,278 | ||||||||
0 | .7% | Other Assets and Liabilities, Net | 885 | |||||||||
100 | .0% | Total Net Assets | 118,163 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Other Investment Companies 93.2% of net assets | ||||||||
Equity Funds 83.4% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 510,685 | 13,278 | ||||||
Laudus Rosenberg International Small Capitalization Fund, Institutional Shares (a) | 1,112,807 | 27,442 | ||||||
Laudus Rosenberg U.S. Discovery Fund, Institutional Shares (a) | 181,778 | 3,723 | ||||||
Laudus Rosenberg U.S. Large Capitalization Growth Fund, Institutional Shares (a) | 607,862 | 6,881 | ||||||
Schwab Core Equity Fund (a) | 1,226,501 | 25,131 | ||||||
Schwab Dividend Equity Fund, Select Shares (a) | 417,217 | 6,534 | ||||||
Schwab Global Real Estate Fund, Select Shares (a) | 928,029 | 9,113 | ||||||
Schwab Small-Cap Equity Fund, Select Shares (a) | 353,102 | 6,433 | ||||||
98,535 | ||||||||
Fixed-Income Funds 9.3% | ||||||||
Schwab Total Bond Market Fund (a) | 1,059,867 | 10,387 | ||||||
Schwab YieldPlus Fund, Select Shares (a) | 61,715 | 581 | ||||||
10,968 | ||||||||
Money Funds 0.5% | ||||||||
Schwab Value Advantage Money Fund, Institutional Shares (a) | 593,097 | 593 | ||||||
Total Other Investment Companies (Cost $99,735) | 110,096 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 6.1% of net assets | ||||||||
Commercial Paper & Other Obligations 6.1% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 3,280 | 3,280 | ||||||
Citibank, Nassau Time Deposit | ||||||||
4.75%, 11/01/07 | 622 | 622 | ||||||
Wells Fargo, Grand Cayman Time Deposit | ||||||||
4.75%, 11/01/07 | 3,280 | 3,280 | ||||||
Total Short-Term Investments (Cost $7,182) | 7,182 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $106,918, and the unrealized appreciation and depreciation were $10,386, and ($26), respectively, with a net unrealized appreciation of $10,360. |
(a) | Issuer is affiliated with the fund’s adviser. |
See financial notes 33
Table of Contents
Schwab Target 2040 Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $99,735) | $110,096 | |||||
Investments in unaffiliated issuers, at value (cost $7,182) | + | 7,182 | ||||
Total investments, at value (cost $106,917) | 117,278 | |||||
Receivables: | ||||||
Fund shares sold | 960 | |||||
Dividends | 53 | |||||
Due from investment adviser | 8 | |||||
Interest | + | 1 | ||||
Total assets | 118,300 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 51 | |||||
Fund shares redeemed | 60 | |||||
Accrued expenses | + | 26 | ||||
Total liabilities | 137 | |||||
Net Assets | ||||||
Total assets | 118,300 | |||||
Total liabilities | − | 137 | ||||
Net assets | $118,163 | |||||
Net Assets by Source | ||||||
Capital received from investors | 106,321 | |||||
Net investment income not yet distributed | 631 | |||||
Net realized capital gains | 850 | |||||
Net unrealized capital gains | 10,361 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$118,163 | 8,784 | $13.45 |
34 See financial notes
Table of Contents
Schwab Target 2040 Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds | $788 | |||||
Interest | + | 91 | ||||
Total investment income | 879 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains received from affiliated underlying funds | 979 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on affiliated underlying funds | 7,922 | |||||
Expenses | ||||||
Professional fees | 33 | |||||
Shareholder reports | 20 | |||||
Registration fees | 16 | |||||
Portfolio accounting fees | 15 | |||||
Trustees’ fees | 6 | |||||
Custodian fees | 5 | |||||
Overdraft expense | 1 | |||||
Other expenses | + | 1 | ||||
Total expenses | 97 | |||||
Expense reduction by adviser | − | 89 | ||||
Net expenses | 8 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 879 | |||||
Net expenses | − | 8 | ||||
Net investment income | 871 | |||||
Net realized gains | 979 | |||||
Net unrealized gains | + | 7,922 | ||||
Increase in net assets from operations | $9,772 |
See financial notes 35
Table of Contents
Schwab Target 2040 Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $871 | $250 | ||||||
Net realized gains | 979 | 108 | ||||||
Net unrealized gains | + | 7,922 | 2,315 | |||||
Increase in net assets from operations | 9,772 | 2,673 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | 487 | 182 | ||||||
Distributions from net realized gains | + | 75 | — | |||||
Total distributions | $562 | $182 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/01/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 7,271 | $92,343 | 2,218 | $24,869 | ||||||||||||||
Shares Reinvested | 45 | 547 | 16 | 176 | ||||||||||||||
Shares Redeemed | + | (1,381 | ) | (17,633 | ) | (255 | ) | (2,853 | ) | |||||||||
Net transactions in fund shares | 5,935 | $75,257 | 1,979 | $22,192 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/01/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 2,849 | $33,696 | 870 | $9,013 | ||||||||||||||
Total increase | + | 5,935 | 84,467 | 1,979 | 24,683 | |||||||||||||
End of period | 8,784 | $118,163 | 2,849 | $33,696 | ||||||||||||||
Net investment income not yet distributed | $631 | $117 |
36 See financial notes
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 7/1/051- | ||||||||||
10/31/07 | 10/31/06 | 10/31/05 | ||||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 10.19 | 9.90 | 10.00 | |||||||||
Income / (loss) from investment operations: | ||||||||||||
Net investment income | 0.45 | 0.41 | 0.11 | |||||||||
Net realized and unrealized gains / (losses) | 0.25 | 0.32 | (0.09 | ) | ||||||||
Total income / (loss) from investment operations | 0.70 | 0.73 | 0.02 | |||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.45 | ) | (0.41 | ) | (0.12 | ) | ||||||
Distributions from net realized gains | — | (0.03 | ) | — | ||||||||
Total distributions | (0.45 | ) | (0.44 | ) | (0.12 | ) | ||||||
Net asset value at end of period | 10.44 | 10.19 | 9.90 | |||||||||
Total return (%) | 6.98 | 7.52 | 0.16 | 2 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses3 | 0.10 | 0.10 | 0.10 | 4 | ||||||||
Gross operating expenses3 | 0.15 | 0.36 | 0.64 | 4 | ||||||||
Net investment income | 4.43 | 4.20 | 3.40 | 4 | ||||||||
Portfolio turnover rate | — | 1 | — | |||||||||
Net assets, end of period ($ x 1,000,000) | 68 | 36 | 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.
See financial notes 37
Table of Contents
Schwab Retirement Income Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
94 | .9% | Other Investment Companies | 63,298 | 64,749 | ||||||||
4 | .9% | Short-Term Investments | 3,300 | 3,300 | ||||||||
99 | .8% | Total Investments | 66,598 | 68,049 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 167 | |||||||||
100 | .0% | Total Net Assets | 68,216 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Other Investment Companies 94.9% of net assets | ||||||||
Equity Funds 21.1% | ||||||||
Laudus International MarketMasters Fund, Select Shares (a) | 152,309 | 3,960 | ||||||
Schwab Dividend Equity Fund, Select Shares (a) | 664,503 | 10,406 | ||||||
14,366 | ||||||||
Fixed-Income Funds 69.5% | ||||||||
Schwab Total Bond Market Fund (a) | 3,248,123 | 31,832 | ||||||
Schwab YieldPlus Fund, Select Shares (a) | 1,654,162 | 15,582 | ||||||
47,414 | ||||||||
Money Funds 4.3% | ||||||||
Schwab Value Advantage Money Fund, Institutional Shares (a) | 2,969,028 | 2,969 | ||||||
Total Other Investment Companies (Cost $63,298) | 64,749 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 4.9% of net assets | ||||||||
Commercial Paper & Other Obligations 4.9% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 1,950 | 1,950 | ||||||
Wells Fargo, Grand Cayman Time Deposit | ||||||||
4.75%, 11/01/07 | 1,350 | 1,350 | ||||||
Total Short-Term Investments (Cost $3,300) | 3,300 | |||||||
End of Investments. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $66,601, and the unrealized appreciation and depreciation were $2,050, and ($602), respectively, with a net unrealized appreciation of $1,448. |
(a) | Issuer is affiliated with the fund’s adviser. |
38 See financial notes
Table of Contents
Schwab Retirement Income Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $63,298) | $64,749 | |||||
Investments in unaffiliated issuers, at value (cost $3,300) | + | 3,300 | ||||
Total investments, at value (cost $66,598) | 68,049 | |||||
Receivables: | ||||||
Fund shares sold | 317 | |||||
Dividends | 228 | |||||
Interest | + | 1 | ||||
Total assets | 68,595 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 221 | |||||
Fund shares redeemed | 68 | |||||
Distributions to shareholders | 67 | |||||
Accrued expenses | + | 23 | ||||
Total liabilities | 379 | |||||
Net Assets | ||||||
Total assets | 68,595 | |||||
Total liabilities | − | 379 | ||||
Net assets | $68,216 | |||||
Net Assets by Source | ||||||
Capital received from investors | 66,500 | |||||
Net realized gains | 265 | |||||
Net unrealized capital gains | 1,451 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$68,216 | 6,537 | $10.44 |
See financial notes 39
Table of Contents
Schwab Retirement Income Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends received from affiliated underlying funds | $2,366 | |||||
Interest | + | 65 | ||||
Total investment income | 2,431 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains received from affiliated underlying funds | 269 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on affiliated underlying funds | 739 | |||||
Expenses | ||||||
Professional fees | 34 | |||||
Portfolio accounting fees | 15 | |||||
Registration fees | 14 | |||||
Trustees’ fees | 6 | |||||
Shareholder reports | 5 | |||||
Custodian fees | + | 4 | ||||
Total expenses | 78 | |||||
Expense reduction by adviser | − | 25 | ||||
Net expenses | 53 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 2,431 | |||||
Net expenses | − | 53 | ||||
Net investment income | 2,378 | |||||
Net realized gains | 269 | |||||
Net unrealized gains | + | 739 | ||||
Increase in net assets from operations | $3,386 |
40 See financial notes
Table of Contents
Schwab Retirement Income Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06 -10/31/07 | 11/01/05 -10/31/06 | |||||||
Net investment income | $2,378 | $1,205 | ||||||
Net realized gains | 269 | 65 | ||||||
Net unrealized gains | + | 739 | 829 | |||||
Increase in net assets from operations | 3,386 | 2,099 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | 2,382 | 1,205 | ||||||
Dividends from net realized gains | + | — | 65 | |||||
Total distributions | $2,382 | $1,270 |
Transactions in Fund Shares |
11/1/06 -10/31/07 | 11/01/05 - 10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 4,894 | $50,795 | 3,030 | $30,303 | ||||||||||||||
Shares reinvested | 158 | 1,636 | 86 | 859 | ||||||||||||||
Shares redeemed | + | (2,088 | ) | (21,641 | ) | (953 | ) | (9,526 | ) | |||||||||
Net transactions in fund shares | 2,964 | $30,790 | 2,163 | $21,636 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06 -10/31/07 | 11/01/05 - 10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 3,573 | $36,422 | 1,410 | $13,957 | ||||||||||||||
Total increase | + | 2,964 | 31,794 | 2,163 | 22,465 | |||||||||||||
End of period | 6,537 | $68,216 | 3,573 | $36,422 | ||||||||||||||
Net investment income not yet distributed | $- | $4 |
See financial notes 41
Table of Contents
Schwab Target Funds
Financial Notes
1. Business Structure of the Funds
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended. The list below shows all the funds in the trust including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) Schwab Target 2010 Fund Schwab Target 2020 Fund Schwab Target 2030 Fund Schwab Target 2040 Fund Schwab Retirement Income Fund Schwab S&P 500 Index Fund Schwab Institutional Select S&P 500 Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index Fund Schwab MarketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Laudus U.S. MarketMasters Fund Laudus Small-Cap MarketMasters Fund | Laudus International MarketMasters Fund Schwab Viewpoints Fund Schwab Premier Equity Fund Schwab Core Equity Fund Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Financial Services Fund Schwab Health Care Fund Schwab Technology Fund Schwab Fundamental US Large Company Index Fund Schwab Fundamental US Small-Mid Company Index Fund Schwab Fundamental International Large Company Index 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 Funds and Laudus Funds (underlying funds) in accordance with its target portfolio allocation. Each fund bears its share of the allocable expenses of the underlying funds in which they invest. The financial statements of the funds should be read in conjunction with the underlying funds’ financial statements.
The funds offer one share class. Shares are bought and sold at net asset value, or NAV, which is the price for all outstanding shares. Each share has a par value of 1/1,000 of a cent, and the trustees may authorize the issuance of as many shares as necessary.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in the preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports.
(a) Security Valuation:
The funds value the investments in underlying funds every business day. The funds use the following policies to value these investments:
• | Underlying funds: valued at their respective net asset values as determined by those funds, in accordance with the 1940 Act for a given day. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost. |
(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). Any distributions from underlying funds are recorded in accordance with the character of the distributions.
42
Table of Contents
Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(d) Expenses:
Expenses that are specific to a fund or a class within the trust are charged directly to that fund or class. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(e) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains once a year, except for the Retirement Income Fund, which makes income distributions monthly.
(f) Accounting Estimates:
The accounting policies described in this report conform with accounting principles generally accepted in the United States of America. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates.
(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.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes.
(h) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
(i) New Accounting Standards:
Financial Accounting Standards Board Interpretation (FIN) No. 48 — Accounting for Uncertainty in Income Taxes – an Interpretation of SFAS No. 109, was issued in July 2006 and is effective for fiscal years beginning after December 15, 2006. This Interpretation provides new requirements for the recognition, measurement, and disclosure in the financial statements of a tax position taken or expected to be taken in a tax return when there is uncertainty about whether that tax position will ultimately be sustained. A fund with a fiscal year ending October 31 will implement FIN 48 no later than April 30, 2008, and it will apply to all open tax years.
Management is currently evaluating the impact of adopting FIN 48, and at this time, believes that the adoption will have no material impact on the funds’ financial statements.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.
Management is currently evaluating the impact of adopting SFAS No. 157 on the funds’ financial statements.
43
Table of Contents
Schwab Target Funds
Financial Notes (continued)
3. | Affiliates and Affiliated Transactions: |
(All dollar amounts are x 1,000)
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 it and the trust.
Charles Schwab & Co., Inc. (“Schwab”) is an affiliate of the investment adviser and is the trust’s transfer agent and shareholder services agent.
The underlying funds pay fees to the investment adviser for advisory and administrative services and to Schwab for transfer agent and shareholder services. The funds are not charged such fees directly. These fees are included in the net asset value of the underlying funds.
CSIM and Schwab have made agreements with the funds to limit the total expenses charged, excluding interest, taxes and certain non-routine expenses through February 27, 2008, as follows:
Target 2010 Fund | 0.06% | |||
Target 2020 Fund | 0.04% | |||
Target 2030 Fund | 0.03% | |||
Target 2040 Fund | 0.01% | |||
Retirement Income Fund | 0.10% |
The agreement to limit the funds’ total expenses charged is limited to each fund’s direct operating expenses and, therefore, does not apply to acquired fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
The funds may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the funds may invest in other related funds. As of October 31, 2007, the percentages of shares of other related funds owned by each Target fund are:
Target 2010 | Target 2020 | Target 2030 | Target 2040 | Retirement | ||||||||||||||||
Fund | Fund | Fund | Fund | Income Fund | ||||||||||||||||
Schwab Active Equity Funds: | ||||||||||||||||||||
Core Equity Fund | 1.1% | 1.8% | 1.5% | 1.2% | — | |||||||||||||||
Dividend Equity Fund | 0.3% | 0.6% | 0.5% | 0.3% | 0.5% | |||||||||||||||
Small-Cap Equity Fund | 1.0% | 1.8% | 1.4% | 1.0% | — | |||||||||||||||
Laudus MarketMasters Funds: | ||||||||||||||||||||
International MarketMasters Fund | 0.4% | 0.6% | 0.6% | 0.4% | 0.1% | |||||||||||||||
Laudus Rosenberg Funds: | ||||||||||||||||||||
U.S. Large Capitalization Growth Fund | 11.5% | 22.6% | 16.2% | 11.0% | — | |||||||||||||||
U.S. Discovery Fund | 0.4% | 0.6% | 0.5% | 0.4% | — | |||||||||||||||
International Small Capitalization Fund | 1.1% | 2.2% | 1.5% | 1.3% | — | |||||||||||||||
Schwab Bond Funds: | ||||||||||||||||||||
Total Bond Market Fund | 2.4% | 3.1% | 1.6% | 0.0% | 2.0% | |||||||||||||||
YieldPlus Fund | — | * | — | * | — | * | — | * | 0.2% | |||||||||||
Global Real Estate Fund | 2.0% | 4.3% | 2.9% | 3.0% | — | |||||||||||||||
Schwab Money Funds: | ||||||||||||||||||||
Value Advantage Money Fund | — | * | — | * | — | * | — | * | — | * |
* | Less than 0.1% |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions within the Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. There was no interfund borrowing or lending activity for any fund during the period.
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Schwab Target Funds
Financial Notes (continued)
3. | Affiliates and Affiliated Transactions (continued): (All dollar amounts are x 1,000) |
Trustees
Trustees may include people who are officers and/or directors of the investment adviser or Schwab. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these persons for their service as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
4. Borrowing from Banks:
The funds may borrow money from banks and custodians. The funds may obtain temporary bank loans through the trusts to which they belong, to use for meeting shareholder redemptions or for extraordinary or emergency purposes. The Schwab Funds have custodian overdraft facilities and uncommitted line of credit arrangements of $150 million and $100 million with State Street Corporation, and Bank of America, N.A., respectively. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. There were no borrowings from the line of credit for the funds during the period.
5. | Purchases and Sales of Investment Securities: |
(All dollar amounts are x 1,000)
For the fiscal year ended October 31, 2007, purchases and sales of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Target 2010 Fund | $66,617 | $1,302 | ||||||
Target 2020 Fund | 122,113 | — | ||||||
Target 2030 Fund | 91,229 | — | ||||||
Target 2040 Fund | 70,167 | — | ||||||
Retirement Income Fund | 28,507 | — |
6. | Redemption Fee: |
(All dollar amounts are x 1,000)
The funds may impose a short-term redemption fee on any fund shares that are redeemed or exchanged by a shareholder within a specified number of days of the purchase date. The funds charge 2.00% of early withdrawal fees on shares redeemed or exchanged 30 days or less after the purchase. Such amounts are net of the redemption fee proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior fiscal year are:
Current Period | Prior Period | |||||||
(11/01/06 – 10/31/07) | (11/01/05 – 10/31/06) | |||||||
Target 2010 Fund | $10 | $1 | ||||||
Target 2020 Fund | 25 | 11 | ||||||
Target 2030 Fund | 11 | 4 | ||||||
Target 2040 Fund | 14 | 5 | ||||||
Retirement Income Fund | — | — |
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Schwab Target Funds
Financial Notes (continued)
7. | Federal Income Taxes: |
(All dollar amounts are x 1,000)
As of October 31, 2007, the components of distributable earnings on a tax-basis were as follows:
Target 2010 | Target 2020 | Target 2030 | Target 2040 | Retirement | ||||||||||||||||
Fund | Fund | Fund | Fund | Income Fund | ||||||||||||||||
Undistributed ordinary income | $1,640 | $2,200 | $1,229 | $631 | $66 | |||||||||||||||
Undistributed long-term capital gains | 1,116 | 1,774 | 1,298 | 850 | 269 | |||||||||||||||
Unrealized appreciation | 13,276 | 19,960 | 15,109 | 10,386 | 2,050 | |||||||||||||||
Unrealized depreciation | (265 | ) | (188 | ) | (50 | ) | (26 | ) | (602 | ) | ||||||||||
Net unrealized appreciation/(depreciation) | $13,011 | $19,772 | $15,059 | $10,360 | $1,448 | |||||||||||||||
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 carry forwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2007, the funds had no capital loss carry forwards.
For tax purposes, realized net capital losses occurring after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of October 31, 2007, the funds had no aggregate deferred realized net capital losses.
The tax-basis components of distributions paid during the current and prior fiscal years were:
Target 2010 | Target 2020 | Target 2030 | Target 2040 | Retirement | ||||||||||||||||
Fund | Fund | Fund | Fund | Income Fund | ||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $1,251 | $1,577 | $895 | $487 | $2,382 | |||||||||||||||
Long-term capital gains | 165 | 231 | 133 | 75 | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $592 | $687 | $360 | $182 | $1,227 | |||||||||||||||
Long-term capital gains | — | — | — | — | 43 | |||||||||||||||
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; paydowns on fixed-income 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 each fund for financial reporting purposes. Each fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2007, the funds made the following reclassifications:
Target 2010 | Target 2020 | Target 2030 | Target 2040 | Retirement | ||||||||||||||||
Fund | Fund | Fund | Fund | Income Fund | ||||||||||||||||
Capital shares | $(1 | ) | $— | $— | $— | $— | ||||||||||||||
Undistributed net investment income | 181 | 315 | 188 | 130 | — | |||||||||||||||
Net realized capital gains and losses | (180 | ) | (315 | ) | (188 | ) | (130 | ) | — |
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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 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income 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 2020 Fund, Schwab Target 2030 Fund, Schwab Target 2040 Fund, and Schwab Retirement Income Fund (five of the portfolios constituting Schwab Capital Trust, hereafter referred to as the ‘Funds‘) at October 31, 2007, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as ‘financial statements‘) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2007 by correspondence with the transfer agent, custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 13, 2007
San Francisco, California
December 13, 2007
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Other Federal Tax Information: (unaudited)
(All dollar amounts are x 1,000)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2007, qualify for the corporate dividends received deduction:
Percentage | ||||
Target 2010 Fund | 23.38 | |||
Target 2020 Fund | 21.59 | |||
Target 2030 Fund | 14.59 | |||
Target 2040 Fund | — | |||
Retirement Income Fund | 88.07 |
For the fiscal year ended October 31, 2007, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2008 via IRS form 1099 of the amounts for use in preparing their 2007 income tax return.
Target 2010 Fund | $1,251 | |||
Target 2020 Fund | 1,577 | |||
Target 2030 Fund | 895 | |||
Target 2040 Fund | 486 | |||
Retirement Income Fund | 2,366 |
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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 advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
Consistent with these responsibilities, 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 CSIM (the “Agreement”) with respect to existing funds in the Trust, including the funds covered in this annual report, 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. 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 memo regarding the responsibilities of trustees for the approval of investment advisory contracts. 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 at meetings held on May 2, 2007, and June 5, 2007, and approved the renewal of the Agreement for an additional one year term at the meeting held on June 5, 2007. The Board’s approval of the Agreement 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 information considered by the Trustees included specific information concerning changes in the nature, extent and quality of services provided by CSIM since the Trustees had last considered approval of the Agreement. The Trustees also considered investments in CSIM’s mutual fund infrastructure and the fact that 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 CSIM’s top three ranking in an independent survey regarding mutual fund client loyalty, 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.
Fund Performance. The Board considered fund performance in determining whether to renew the Agreement. Specifically, the Trustees considered each fund’s performance relative to a peer group and peer category of other mutual
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funds and appropriate indices/benchmarks, in light of total return, yield, when applicable, and market trends. As part of this review, the Trustees considered the composition of the peer group and peer category, selection criteria and the reputation of the third party who prepared the peer group and peer category analysis. In evaluating the performance of each fund, the Trustees considered both risk and shareholder risk expectations for such fund and the appropriateness of the benchmark used to compare the performance of each fund. The Trustees further considered the level of fund performance in the context of its review of fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the funds supported renewal of the Agreement.
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 other comparable 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 fees charged by CSIM to other mutual funds and to other types of accounts, such as wrap accounts, 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 Agreement.
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. The Board also considered information relating to changes to CSIM’s business operations and how these changes affected CSIM’s profitability under the Agreement. 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.
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 previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered existing contractual investment advisory fee schedules that include lower fees at higher graduated asset levels. The Board also considered certain existing commitments by CSIM and Schwab that are designed to pass along potential economies of scale to fund shareholders. 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, unanimously approved the continuation of the Agreement and concluded that the compensation under the Agreement 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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The tables below give information as of October 31, 2007, about the trustees and officers for The 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, and Laudus Trust. As of October 31, 2007, the Fund Complex included 70 funds.
The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Board 1—Director, Redwood Trust, Inc. Board 2—Director, PMI Group, Inc. | |||||
Donald F. Dorward 1931 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chief Executive Officer, Dorward & Associates (corporate management, marketing and communications consulting firm). From 1996-1999, Executive Vice President and Managing Director, Grey Advertising. Prior to 1996, President and Chief Executive Officer, Allen & Dorward Advertising. | 60 | None. | |||||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley. Until February 2004, Co-Chief Executive Officer, Aphton Corp. (bio-pharmaceuticals). | 70 | Board 1—Director, Mission West Properties Board 2—Director, TOUSA Board 3—Director, Harris-Stratex Networks Board 4—Director, Genitope Corp. Board 5—Director & Non-Executive Chairman, Solectron Corp. Board 6—Director, Ditech Networks | |||||
Robert G. Holmes 1931 (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, Semloh Financial, Inc. (international financial services and investment advisory firm). | 60 | None. | |||||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and founder of Smith Graham & Co.(investment advisors). | 60 | Board 1—Board of Cooper Industries Board 2—Chairman of the Audit Committee of Oneok Partners LP | |||||
Donald R. Stephens 1938 Trustee (Trustee of Schwab Capital Trust since 1989.) | Managing Partner, D. R. Stephens & Company (investments). | 60 | None. | |||||
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Independent Trustees continued | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Michael W. Wilsey 1943 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer, Wilsey Bennett, Inc. (real estate investment and management, and other investments). | 60 | None. | |||||
Interested Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served ) | Past Five Years | the Trustee | Other Directorships | |||||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc.; Chairman and Director, Charles 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 and Director, Schwab Holdings, Inc. Through June 2007, Director, U.S. Trust Company, N.A., U.S. Trust Company of New York. Until May 2003, Co-Chief Executive Officer, The Charles Schwab Corporation. | 60 | None | |||||
Randall W. Merk2 1954 Trustee (Trustee of Schwab Capital Trust since 2005.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | 70 | None. | |||||
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Officers of the Trust | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Randall W. Merk 1954 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2007.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer, Charles Schwab Investment Management, Inc.; Chief Financial Officer, Laudus Trust and Laudus Variable Insurance Trust; Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited. Through June 2007, Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust; Chief Financial Officer, Mutual Fund Division, UST Advisors, Inc. From December 1999 to November 2004, Sr. Vice President, Financial Reporting, Charles Schwab & Co. Inc. | |
Kimon Daifotis 1959 Senior Vice President and Chief Investment Officer-Fixed Income (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Fixed Income, Charles Schwab Investment Management, Inc. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Jeffrey Mortimer 1963 Senior Vice President and Chief Investment Officer-Equities (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Equities, Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer, Laudus Trust and Laudus Variable Insurance Trust. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Randall Fillmore 1960 Chief Compliance Officer and AML Officer (Officer of Schwab Capital Trust since 2002.) | Senior Vice President and Chief Compliance Officer, Charles Schwab Investment Management, Inc.; Senior Vice President, Charles Schwab & Co. Inc.; Chief Compliance Officer, Laudus Trust and Laudus Variable Insurance Trust. Through June 2007, Chief Compliance Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust. From 2002 to 2003, Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc. | |
Koji E. Felton 1959 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 1998.) | Senior Vice President, Chief Counsel and Corporate Secretary, Charles Schwab Investment Management, Inc.; Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. Through June 2007, Chief Legal Officer, Excelsior Funds Inc., Excelsior Tax Exempt Funds, Inc. and Excelsior Funds Trust. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust; since 2006, Chief Counsel, Laudus Trust and Variable Insurance Trust. Until July 2005, Senior Associate, Paul Hastings Janofsky & Walker LLP. | |
Cathy Sabo 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President-Compliance, Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust. Until 2004, Vice President, Client, Sales & Services Controls, Charles Schwab & Co., Inc. | |
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Officers of the Trust continued | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Michael Haydel 1970 Vice President (Officer of Schwab Capital Trust since 2006.) | Vice President, Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President and AML Officer, Laudus Trust and Laudus Variable Insurance Trust. Until March 2004, Director Charles Schwab & Co., Inc. | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after 20 years of service as a trustee, whichever comes first. Independent trustees elected prior to January 1, 2000 will retire on the following schedule: Messrs. Holmes and Dorward will retire on December 31, 2007, and Messrs. Stephens and Wilsey will retire on December 31, 2010. |
2 | In addition to their employment with the investment advisor and the distributor, Messrs. Schwab and Merk also own stock of The Charles Schwab Corporation. Mr. Schwab and Mr. Merk are Interested Trustees because they are employees of Schwab and/or the advisor. |
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 other officer serves at the pleasure of the Board. |
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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.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500T). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the “coupon rate”) until a specified date (the “maturity date”), at which time the issuer returns the money borrowed (“principal” or “face value”) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
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.
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.
55
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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 Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting Schwab’s website at www.schwab.com/schwabfunds, the SEC’s website at 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 Schwab’s website at www.schwab.com/schwabfunds or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fundtm
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 Technology Fundtm
Schwab Fundamental US Large Company Index Fundtm
Schwab Fundamental US Small-Mid Company Index Fundtm
Schwab Fundamental International Large Company Index Fundtm
Schwab Global Real Estate Fundtm
Schwab Institutional Select® S&P 500 Fund
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 Viewpoints Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
Bond Funds
Schwab YieldPlus Fund®
Schwab Short-Term Bond Market Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab Inflation Protected Fundtm
Schwab Tax-Free YieldPlus Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free YieldPlus Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity.1 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
Investment Adviser
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
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.
© 2006 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC
Printed on recycled paper.
MFR33732-02
Table of Contents
Annual report dated October 31, 2007 enclosed.
Schwab Viewpoints Fundtm
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document faster via email.
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Schwab Target Funds
A suite of funds designed to help keep your retirement investments properly allocated over your lifetime.
• | Schwab Target 2010 Fund |
• | Schwab Target 2020 Fund |
• | Schwab Target 2030 Fund |
• | Schwab Target 2040 Fund |
• | Schwab Retirement Income Fund |
Schwab Target Funds are designed to help you avoid a common investing pitfall: failing to adjust your portfolio over time. Four of the funds are actively managed to reallocate your assets as you approach retirement, and one is designed to help produce income after you’ve retired.
The funds are designed to focus on asset allocation, helping you participate in market growth while helping to manage the impact of economic downturns. Whether you’re concerned with building capital or preserving your nest egg and generating income, there’s likely a Schwab Target Fund that’s right for your retirement goals.
Each Schwab Target Fund invests in a diversified combination of funds that deliver professional management, asset allocation and ongoing adjustments over time — all in a single investment. That makes the funds particularly attractive if you don’t have the time or interest to actively manage your portfolio.
Invest in the fund closest to your retirement date for asset allocation that matches your goals. To learn more about Schwab Target Funds log on to www.schwab.com/target.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800 435-4000. Please read the prospectus carefully before investing.
Investment value and return will fluctuate such that shares, when redeemed, may be worth more or less than original cost.
Charles Schwab & Co., Inc. Member SIPC
MKT32213 (02/07) © 2006 All Rights Reserved
MKT32213 (02/07) © 2006 All Rights Reserved
Table of Contents
Schwab Viewpoints Fundtm
Annual Report
October 31, 2007
Schwab Viewpoints Fundtm
In This Report | ||
1 | ||
2 | ||
3 | ||
4 | ||
6 | ||
8 | ||
9 | ||
27 | ||
34 | ||
36 | ||
39 | ||
43 |
Select Shares® are available on many Schwab Funds®
Schwab Funds offers Select Shares, a share class that carries lower expenses than Investor Sharestm in exchange for higher investment minimums on many of its funds. Select Shares are available for initial purchases of $50,000 or more of a single fund in a single account and for shareholders who add to their existing Investor Share position, bringing the value to or above $50,000. We encourage shareholders of Investor Shares to review their portfolio to see if they are eligible to exchange into Select Shares. If you believe you are eligible, you should contact Schwab or your financial intermediary to request a tax-free interclass exchange into Select Shares. Instructions for performing a tax-free interclass exchange can also be referenced on the Schwab Funds website at www.schwab.com/schwabfunds under Schwab Funds Investor Information. Select Shares may not be available through financial intermediaries other than Charles Schwab & Co., Inc.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
The industry/sector classification of the fund’s portfolio holdings uses the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.
Table of Contents
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.schwab.com/schwabfunds.
Total Return for the Report Period | ||
Schwab Viewpoints Fundtm | ||
Investor Shares (Ticker Symbol: SWOBX) | 10.24% | |
Select Shares® (Ticker Symbol: SWMBX) | 10.45% | |
Benchmark: Balanced Blended Index | 10.89% | |
Fund Category: Morningstar Moderate Allocation | 12.19% | |
Performance Details | pages 6-7 | |
Minimum Initial Investment1 | ||
Investor Shares | $ 100 | |
Select Shares | $ 50,000 | |
All fund and index figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc.
1 | Please see prospectus for further detail and eligibility requirements. |
Schwab Viewpoints Fund 1
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From the Chairman
Charles Schwab
Chairman
Dear Shareholder,
I have been a fan of mutual funds throughout my long investing career. I say this because I firmly believe they are a cost-effective and convenient way for investors to achieve a diversified portfolio. And, as we face increasing uncertainty in global markets, diversification is as important now as it has ever been.
Research has indicated that spreading your money across, and equally important, within, different asset classes, such as stocks, bonds, and cash equivalents, can be the most important factor in determining overall portfolio performance. By maintaining diversification, your portfolio can be better positioned to help you weather the market ups and downs.
With a broad range of investment strategies and styles, Schwab Funds® provides an uncomplicated, effective way to build a well diversified portfolio. You can choose from an array of funds across a range of investment objectives and styles. If you prefer a single investment solution, we offer asset allocation funds based on either risk tolerance or time horizon.
Here at Schwab, our goal is to help you reach your financial goals. With quality funds and services, backed by the guidance and support you need—whatever type of investor you are—we can help you be financially fit today and in the future.
Thank you for investing with us.
Sincerely,
2 Schwab Viewpoints Fund
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From the President
Randall W. Merk is President and CEO of Charles Schwab Investment Management, Inc. and the fund covered in this report. He joined the firm in 2002 and has held a variety of executive positions at Schwab.
Dear Shareholder,
In returning to my role as President and CEO of Charles Schwab Investment Management, I would like to thank you for investing in Schwab Funds® and share my thoughts with you on the current market environment.
The reemergence of volatility during this past year has shaken financial markets, both domestically and globally. Subprime mortgage market issues have caused a chain reaction throughout equity and credit markets, and investors are undoubtedly concerned about their financial outlook in the near future. As riskier securities came under pressure during this past August’s market correction, investors fled to “safer haven” investments, such as U.S. Treasuries.
Attempting to time the market in this way can be both a frustrating and risky experience. We have always believed your best protection against swings in market volatility is to maintain a well-diversified investment portfolio that is built to provide long-term performance.
Thank you for entrusting us with your investments. I speak for all of us at Schwab when I say our goal is to give you the financial products, guidance, and personal relationship you need to be financially fit.
Sincerely,
Schwab Viewpoints Fund 3
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The Investment Environment
Jeffrey Mortimer, CFA, a senior vice president and chief investment officer, equities, has overall responsibility for the management of the fund.
During the past year, the global economy benefited from positive earnings growth, an ample supply of liquidity, and reasonably low volatility. Investors became increasingly bullish, and firms financed a record level of private equity buyouts, acquisitions, and stock buybacks. However, the housing market correction, and more recently, turmoil in the subprime mortgage market, has had a ripple effect throughout the U.S. and global economy. Several key issues continued to resonate with investors, including the deterioration of the housing market, the lagged effects of monetary policy, tightening of lending standards, and rising energy prices.
The U.S. economy grew at a sub-par pace during the early part of the report period, consistent with the Federal Reserve’s (the Fed’s) engineered soft landing. Throughout its statements, the Fed noted that the economy would grow at a more moderate rate as a result of prior rate increases, lagged effects of higher energy prices, and a cooling housing market. As any rate below 3% is generally considered to be sub-par, the economy appeared to be on a trend of underperformance. However, Gross Domestic Product (GDP) in the second and third quarter of 2007 surprised on the upside; 3.8% and an advanced 3.9%, respectively. Though consumer spending weighed heavily in recent improved GDP readings, tightening credit conditions and continued deterioration in the U.S. housing market remained imminent threats to household equity, a meaningful underpinning of consumer spending.
The housing market remained a significant headwind for U.S. economic growth during the report period. New- and existing-home sales trended downward, and inventories reached an alarming 10.5-month supply (existing homes) by September 2007. Initial concerns that troubles in the housing market would spill over to the rest of the economy became more pronounced, as declining housing starts and home sales caused builders and mortgage lenders to layoff thousands of employees. Delinquency rates on subprime mortgages and foreclosures on residential homes continued on an upward trend as well, further pushing back a recovery in an already weakened market.
The recent tightening of lending standards had a detrimental effect on economic growth as well. Though subprime mortgages were able to find their way into securitized structures via relaxed access to credit and ample liquidity, the increased frequency of defaults by subprime borrowers stressed securities holding these mortgages, leading to wider spreads and higher risk. Evidence that subprime issues had emerged became more pronounced after February’s spike in volatility, which only compounded throughout the report period. Liquidity in the market for these riskier securities essentially dried up after this recent summer’s market
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
14.56% S&P 500® Index: measures U.S. large-cap stocks
9.27% Russell 2000® Index: measures U.S. small-cap stocks
24.91% MSCI-EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East
5.38% Lehman Brothers U.S. Aggregate Bond Index: measures the U.S. bond market
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Charles Schwab & Co., Inc.
4 Schwab Viewpoints Fund
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The Investment Environment continued
correction, putting financial institutions laden with subprime debt into financial turmoil. While the Fed helped improve liquidity issues at first by pumping money into the banking system and using the discount rate to reduce rates, many lenders reduced or cancelled altogether certain subprime lending programs.
Market volatility also had a significant impact on quantitative strategies in July and August of 2007. In a recent report by Lehman Brothers, it is believed that several large multi-strategy managers experienced significant losses in their fixed income portfolios. In order to raise cash to cover potential redemptions, and hesitant to price their now lower-valued portfolios, money managers sold their most liquid holdings in the U.S. equity market. As trades came into the market, the adverse effect that followed was that long positions declined and short positions rallied. The end result was that billions of dollars were turned over during this “quant squeeze,” leading to wider spreads and volatility in market prices.
The timing of recent turmoil in the financial markets partially stems from the fact that monetary policy typically acts with a lagged effect on the broader economy. While generally accepted that the effects of Fed rate hikes have a lag of between three and 18 months, it’s also believed that most of the effects can be seen around the twelfth month. Working back from February 2007’s correction in global markets, the Fed funds target rate was 4.25%, yet the Fed didn’t stop raising rates until June 2006, when it finally reached 5.25%. The 12-month lag, therefore, would indicate that subsequent rate hikes were finally hitting the market, as we saw during the recent summer months.
The Fed held its target for the Fed funds rate for most of the period at 5.25%. However, as conditions in the market progressively worsened, the Fed cut twice, bringing the target rate down to 4.50% by the end of the report period. Although it noted recent economic growth was solid and conditions in financial markets were markedly improved, it also expressed its concern that conditions in the housing market could hinder the economic expansion in the near term.
Against this backdrop of economic data, the market priced in future Fed rate cuts. The housing market showed little to no sign that a bottom is anywhere in the near future, labor markets faced continued downward pressures, and energy prices remained elevated. Oil reached all time highs over the year, closing out just above $96 a barrel as of the end of the report period. While the tax-like effect of higher energy prices, declining equity values in residential real estate, and the lag effect of monetary policy remained significant headwinds for the U.S. economy, the Fed’s recent response to a volatile market eased investor concern toward the end of the period.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Viewpoints Fund 5
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Schwab Viewpoints Fundtm
Jeffrey Mortimer, (left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee, (right) managing director and portfolio manager, co-manages the fund.
Schwab Viewpoints Fund uses a multi-manager strategy. CSIM, the funds’ investment advisor, uses rigorous criteria to select investment managers with proven long-term track records to manage a portion of each fund’s assets. In addition to selecting the investment managers and allocating assets among them, CSIM is responsible for monitoring and coordinating the overall management of the fund.
Schwab Viewpoints Fund Investor Shares returned 10.24% for the report period, tracking its benchmark, the Balanced Blended Index, which was up 10.89%. To meet its goal of providing capital growth and income, the fund invests in a mix of equity and fixed income securities. During this report period, the fund was generally overweight in stocks, as we believed stocks would have potential for higher returns. On the domestic side, TCW Investment Management Company (TCW) trailed its benchmark, the Russell 1000 Value Index. TCW, whose focus is on large-cap value, suffered from poor stock selection, particularly in the Consumer Discretionary, Health Care, and Telecommunications sectors. Positions in Tenet Healthcare Corp. and Quest Communications International, Inc. detracted from returns. Gardner Lewis Asset Management L.P., whose focus is on large-cap growth stocks, outperformed its benchmark, the Russell 1000 Growth Index, due to strong stock selection, particularly within the Health Care and Information Technology sectors. Stocks that performed well for the period included MEMC Electronic Materials, Inc., Apple Computer, Inc. and Cigna Corp. During the report period, allocations managed by CSIM trailed their respective benchmarks, as sector weights and stock selection were slightly negative.
On the international front, Harris Associates L.P. underperformed its benchmark, the MSCI EAFE, for the report period. Harris Associates, whose focus is on large-cap value, suffered from poor stock selection, particularly within the Consumer Discretionary, Financials, and Information Technology sectors. Among those stocks which suffered setbacks were Novartis AG, UBS AG, and Signet Group.
Pacific Investment Management Company LLC (PIMCO), whose investment style is fixed income-total return, outperformed its benchmark, the Lehman Brothers U.S. Aggregate Bond Index. During the report period, the fund’s above index duration contributed to returns, as yields fell sharply. An emphasis on shorter maturities, an underweight to corporate securities, and currency exposure also contributed to returns.
As of 10/31/07:
Statistics
Number of Long Holdings | 429 |
Number of Short Positions | 3 |
Weighted Average
Market Cap
($ x 1,000,000) | $63,839 |
Price/Earnings Ratio (P/E) | 17.8 |
Price/Book Ratio (P/B) | 2.7 |
Portfolio Turnover Rate | 244% |
Sector Weightings % of Investments
Financials | 21.4% |
Information Technology | 18.1% |
Consumer Discretionary | 17.0% |
Health Care | 14.3% |
Industrials | 10.2% |
Consumer Staples | 6.5% |
Energy | 4.2% |
Telecommunication Services | 3.9% |
Materials | 3.3% |
Utilities | 1.1% |
Total | 100.0% |
Top Holdings % of Net Assets1
Fannie Mae, 5.50%, 9/1/34 | 2.6% |
U.S. Treasury Note, 5.00%,
5/15/37 | 2.2% |
Fannie Mae TBA, 5.50%, 12/12/37 | 2.1% |
Fannie Mae, 5.00%, 2/1/36 | 1.7% |
Fannie Mae, 5.50%, 11/1/34 | 1.5% |
Ginnie Mae, 5.50%, 6/15/37 | 1.4% |
Fannie Mae, 5.50%, 4/1/35 | 1.1% |
Fannie Mae, 5.50%, 2/1/35 | 1.0% |
JPMorgan Chase & Co. | 1.0% |
American Express Co. | 1.0% |
Total | 15.6% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small company stocks are subject to greater volatility than other asset classes.
Foreign securities can involve risks such as political and economic instability and currency risk.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Viewpoints Fund
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Schwab Viewpoints Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||
Investor Shares (11/18/96) | 10.24% | 11.23% | 7.02% | 7.78% | ||||||||||||
Select Shares (6/3/04) | 10.45% | n/a | n/a | 9.12% | ||||||||||||
Benchmark: Balanced Blended Index | 10.89% | 10.13% | 6.95% | (11/18/96) 8.00% | ||||||||||||
(6/3/04) 9.09% | ||||||||||||||||
Fund Category: Morningstar Moderate Allocation | 12.19% | 11.20% | 6.58% | (11/18/96) 7.45% | ||||||||||||
(6/3/04) 9.93% |
Fund Expense Ratios3: Investor Shares: Net 1.11%; Gross 1.26% / Select Shares: Net 0.96%; Gross 1.21%
Investment Managers and Allocations
Investment Manager | Investment Style | % of Net Assets | ||||
Pacific Investment Management Company LLC | Fixed-Income Total Return | 32.1% | ||||
Gardner Lewis Asset Management L.P. | Large-Cap Growth | 20.9% | ||||
TCW Investment Management Company | Large-Cap Value | 18.5% | ||||
Harris Associates L.P. | International Value | 18.4% | ||||
Charles Schwab Investment Management, Inc. | Large-Cap Blend | 6.1% | ||||
Charles Schwab Investment Management, Inc. | Small-Cap Blend | 3.1% | ||||
Cash, overlay investments, and other assets | - | 0.9% |
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Because the fund originally used a different asset allocation strategy and a multi-fund strategy, its performance prior to June 3, 2002 does not reflect the current strategy and may have been different if it did.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. The Balanced Blended Index is composed of 60% S&P 500® Index and 40% Lehman Brothers U.S. Aggregate Bond Index. |
2 | Source for category information: Morningstar, Inc. |
3 | As of 2/28/07 as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Viewpoints Fund 7
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Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees; and, ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six-months beginning May 1, 2007 and held through October 31, 2007.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund or share class under the heading entitled ‘Expenses Paid During Period‘.
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/07 | at 10/31/07 | 5/1/07 - 10/31/07 | |||||||||||||
Schwab Viewpoints Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.04% | $ | 1,000 | $ | 1,018.40 | $ | 5.29 | |||||||||
Hypothetical 5% Return | 1.04% | $ | 1,000 | $ | 1,019.96 | $ | 5.30 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 0.89% | $ | 1,000 | $ | 1,019.10 | $ | 4.53 | |||||||||
Hypothetical 5% Return | 0.89% | $ | 1,000 | $ | 1,020.72 | $ | 4.53 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights. |
2 | Expenses for each share class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year. |
8 Schwab Viewpoints Fund
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Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 13.39 | 12.85 | 11.88 | 11.07 | 9.35 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.25 | 1 | 0.25 | 1 | 0.15 | 0.08 | 0.12 | |||||||||||||
Net realized and unrealized gains | 1.06 | 1 | 0.83 | 1 | 0.91 | 0.86 | 1.75 | |||||||||||||
Total income from investment operations | 1.31 | 1.08 | 1.06 | 0.94 | 1.87 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.16 | ) | (0.09 | ) | (0.13 | ) | (0.15 | ) | ||||||||||
Distributions from net realized gains | (0.60 | ) | (0.38 | ) | — | — | — | |||||||||||||
Total distributions | (0.84 | ) | (0.54 | ) | (0.09 | ) | (0.13 | ) | (0.15 | ) | ||||||||||
Net asset value at end of period | 13.86 | 13.39 | 12.85 | 11.88 | 11.07 | |||||||||||||||
Total return (%) | 10.24 | 8.59 | 8.92 | 8.59 | 20.25 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 1.02 | 2 | 1.03 | 2 | 1.10 | 1.10 | 1.10 | |||||||||||||
Gross operating expenses | 1.27 | 1.26 | 1.27 | 1.32 | 1.33 | |||||||||||||||
Net investment income | 1.84 | 1.90 | 1.14 | 0.68 | 1.13 | |||||||||||||||
Portfolio turnover rate | 244 | 244 | 283 | 242 | 256 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 112 | 122 | 130 | 130 | 109 |
11/1/06- | 11/1/05- | 11/1/04- | 6/3/043- | |||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | ||||||||||||
Per—Share Data ($) | ||||||||||||||||
Net asset value at beginning of period | 13.41 | 12.87 | 11.89 | 11.57 | ||||||||||||
Income from investment operations: | ||||||||||||||||
Net investment income | 0.27 | 1 | 0.29 | 1 | 0.15 | 0.02 | ||||||||||
Net realized and unrealized gains | 1.06 | 1 | 0.82 | 1 | 0.93 | 0.30 | ||||||||||
Total income from investment operations | 1.33 | 1.11 | 1.08 | 0.32 | ||||||||||||
Less distributions: | ||||||||||||||||
Distributions from net investment income | (0.26 | ) | (0.19 | ) | (0.10 | ) | — | |||||||||
Distributions from net realized gains | (0.60 | ) | (0.38 | ) | — | — | ||||||||||
Total distributions | (0.86 | ) | (0.57 | ) | (0.10 | ) | — | |||||||||
Net asset value at end of period | 13.88 | 13.41 | 12.87 | 11.89 | ||||||||||||
Total return (%) | 10.45 | 8.79 | 9.11 | 2.77 | 4 | |||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||
Ratios to average net assets: | ||||||||||||||||
Net operating expenses | 0.87 | 5 | 0.81 | 5 | 0.95 | 0.95 | 6 | |||||||||
Gross operating expenses | 1.22 | 1.24 | 1.22 | 1.29 | 6 | |||||||||||
Net investment income | 1.99 | 2.21 | 1.32 | 0.73 | 6 | |||||||||||
Portfolio turnover rate | 244 | 244 | 283 | 242 | 4 | |||||||||||
Net assets, end of period ($ x 1,000,000) | 28 | 28 | 9 | 2 |
1 Calculated based on average shares outstanding during the period.
2 The ratio of net operating expenses would have been 1.10% for both periods ended 10/31/06 and 10/31/07, respectively, if custody credits and dividend and interest expenses on short sales had not been included.
3 Commencement of operations.
4 Not annualized.
5 The ratio of net operating expenses would have been 0.95% for both periods ended 10/31/06 and 10/31/07, respectively, if custody credits and dividend and interest expenses on short sales had not been included.
6 Annualized.
See financial notes 9
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
46 | .9% | Common Stock | 53,212 | 65,567 | ||||||||
18 | .1% | Foreign Common Stock | 24,197 | 25,442 | ||||||||
7 | .2% | U.S. Government Securities | 10,087 | 10,070 | ||||||||
0 | .8% | Foreign Government Securities | 904 | 1,086 | ||||||||
2 | .9% | Corporate Bonds | 4,022 | 4,073 | ||||||||
0 | .4% | Municipal Bonds | 465 | 505 | ||||||||
—% | Asset-Backed Obligations | 1 | 1 | |||||||||
24 | .7% | Mortgage-Backed Securities | 34,814 | 34,629 | ||||||||
0 | .5% | Non-Agency Mortgage-Backed Securities | 650 | 647 | ||||||||
4 | .1% | Short-Term Investments | 5,673 | 5,673 | ||||||||
—% | Other Investment | 10 | 10 | |||||||||
0 | .3% | Purchased Options | 411 | 409 | ||||||||
105 | .9% | Total Investments | 134,446 | 148,112 | ||||||||
(3 | .6)% | Short Sales | (5,029 | ) | (5,018 | ) | ||||||
(0 | .2)% | Options Written | (277 | ) | (263 | ) | ||||||
(2 | .1)% | Other Assets and Liabilities | (2,963 | ) | ||||||||
100 | .0% | Net Assets | 139,868 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 46.9% of net assets | ||||||||
Automobiles & Components 0.4% | ||||||||
Drew Industries, Inc. * | 285 | 11 | ||||||
General Motors Corp. (a) | 14,605 | 573 | ||||||
Standard Motor Products, Inc. | 770 | 6 | ||||||
The Goodyear Tire & Rubber Co. * | 430 | 13 | ||||||
603 | ||||||||
Banks 0.7% | ||||||||
BancFirst Corp. (a) | 400 | 18 | ||||||
BancorpSouth, Inc. (a) | 630 | 15 | ||||||
Bank of Hawaii Corp. (a) | 630 | 33 | ||||||
Commerce Bancshares, Inc. | 200 | 9 | ||||||
Fannie Mae (a) | 14,200 | 811 | ||||||
KeyCorp | 910 | 26 | ||||||
Ocwen Financial Corp. * | 400 | 3 | ||||||
SVB Financial Group * | 600 | 31 | ||||||
946 | ||||||||
Capital Goods 4.7% | ||||||||
Accuride Corp. * | 635 | 6 | ||||||
Acuity Brands, Inc. (a) | 1,570 | 75 | ||||||
AGCO Corp. * | 1,645 | 98 | ||||||
Belden, Inc. (a) | 1,135 | 66 | ||||||
Crane Co. (a) | 1,575 | 75 | ||||||
Cubic Corp. | 300 | 14 | ||||||
Cummins, Inc. | 4,565 | 548 | ||||||
Danaher Corp. (a) | 7,000 | 600 | ||||||
EMCOR Group, Inc. (a) * | 2,755 | 95 | ||||||
Emerson Electric Co. (a) | 720 | 38 | ||||||
EnPro Industries, Inc. * | 290 | 12 | ||||||
Fluor Corp. | 230 | 36 | ||||||
General Electric Co. | 16,400 | 675 | ||||||
GrafTech International Ltd. * | 890 | 17 | ||||||
Honeywell International, Inc. (a) | 21,600 | 1,305 | ||||||
Lockheed Martin Corp. (a) | 2,830 | 311 | ||||||
McDermott International, Inc. * | 15,300 | 934 | ||||||
Northrop Grumman Corp. | 810 | 68 | ||||||
Precision Castparts Corp. | 3,850 | 577 | ||||||
Raytheon Co. (a) | 4,690 | 298 | ||||||
Teleflex, Inc. (a) | 1,080 | 79 | ||||||
The Boeing Co. (a) | 3,900 | 385 | ||||||
Thomas & Betts Corp. (a) * | 1,290 | 72 | ||||||
Tyco International Ltd. | 4,875 | 201 | ||||||
Wabtec Corp. | 545 | 20 | ||||||
6,605 | ||||||||
Commercial Services & Supplies 0.3% | ||||||||
ABM Industries, Inc. | 2,255 | 53 | ||||||
Heidrick & Struggles International, Inc. (a) | 435 | 19 | ||||||
IHS, Inc., Class A * | 360 | 23 | ||||||
IKON Office Solutions, Inc. (a) | 4,320 | 57 | ||||||
Spherion Corp. (a) * | 2,895 | �� | 25 | |||||
Steelcase, Inc., Class A (a) | 295 | 5 | ||||||
Viad Corp. (a) | 1,335 | 47 | ||||||
Waste Management, Inc. (a) | 5,900 | 215 | ||||||
444 | ||||||||
Consumer Durables & Apparel 1.2% | ||||||||
American Greetings Corp., Class A | 1,880 | 50 | ||||||
Blyth, Inc. (a) | 2,640 | 50 | ||||||
Coach, Inc. (a) * | 11,520 | 421 | ||||||
Deckers Outdoor Corp. * | 170 | 24 | ||||||
Furniture Brands International, Inc. | 2,870 | 35 | ||||||
Hasbro, Inc. (a) | 1,900 | 57 | ||||||
Kellwood Co. (a) | 1,350 | 22 | ||||||
Mattel, Inc. (a) | 16,500 | 345 | ||||||
Newell Rubbermaid, Inc. (a) | 2,020 | 59 | ||||||
NIKE, Inc., Class B (a) | 200 | 13 | ||||||
Phillips-Van Heusen Corp. (a) | 680 | 33 |
10 See financial notes
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Sony Corp. ADR (a) | 11,100 | 548 | ||||||
1,657 | ||||||||
Consumer Services 1.0% | ||||||||
Career Education Corp. (a) * | 1,190 | 43 | ||||||
DeVry, Inc. (a) | 2,440 | 133 | ||||||
Service Corp. International | 3,210 | 46 | ||||||
Wynn Resorts Ltd. (a) | 7,220 | 1,166 | ||||||
1,388 | ||||||||
Diversified Financials 5.0% | ||||||||
Advanta Corp., Class B | 380 | 6 | ||||||
American Capital Strategies Ltd. (a) | 12,800 | 556 | ||||||
American Express Co. (a) | 22,210 | 1,354 | ||||||
Ameriprise Financial, Inc. (a) | 1,750 | 110 | ||||||
Bank of America Corp. | 170 | 8 | ||||||
Bank of New York Mellon Corp. | 2,230 | 109 | ||||||
Citigroup, Inc. | 10,600 | 444 | ||||||
CME Group, Inc. (a) | 881 | 587 | ||||||
Federated Investors, Inc., Class B | 2,195 | 94 | ||||||
Franklin Resources, Inc. (a) | 1,660 | 215 | ||||||
JPMorgan Chase & Co. (a) | 29,690 | 1,396 | ||||||
Legg Mason, Inc. | 3,900 | 323 | ||||||
Merrill Lynch & Co., Inc. | 8,400 | 555 | ||||||
Morgan Stanley | 5,700 | 383 | ||||||
Northern Trust Corp. (a) | 100 | 8 | ||||||
The Goldman Sachs Group, Inc. | 3,170 | 786 | ||||||
6,934 | ||||||||
Energy 2.7% | ||||||||
Chevron Corp. (a) | 10,520 | 963 | ||||||
ConocoPhillips (a) | 9,500 | 807 | ||||||
Exxon Mobil Corp. (a) | 3,350 | 308 | ||||||
Frontier Oil Corp. | 290 | 13 | ||||||
Global Industries Ltd. * | 4,380 | 108 | ||||||
Holly Corp. (a) | 1,675 | 105 | ||||||
Marathon Oil Corp. | 880 | 52 | ||||||
National-Oilwell Varco, Inc. * | 9,870 | 723 | ||||||
Occidental Petroleum Corp. | 1,200 | 83 | ||||||
Schlumberger Ltd. | 140 | 14 | ||||||
SEACOR Holdings, Inc. * | 495 | 45 | ||||||
Stone Energy Corp. * | 500 | 22 | ||||||
Weatherford International Ltd. * | 8,855 | 575 | ||||||
3,818 | ||||||||
Food & Staples Retailing 0.6% | ||||||||
BJ’s Wholesale Club, Inc. * | 735 | 26 | ||||||
CVS Caremark Corp. (a) | 19,200 | 802 | ||||||
828 | ||||||||
Food, Beverage & Tobacco 0.8% | ||||||||
Alliance One International, Inc. * | 4,075 | 27 | ||||||
ConAgra Foods, Inc. | 3,150 | 75 | ||||||
General Mills, Inc. (a) | 1,620 | 94 | ||||||
Imperial Sugar Co. | 100 | 3 | ||||||
Kraft Foods, Inc., Class A (a) | 23,800 | 794 | ||||||
Reynolds American, Inc. (a) | 400 | 26 | ||||||
Sara Lee Corp. | 610 | 10 | ||||||
Seaboard Corp. | 2 | 3 | ||||||
The Coca-Cola Co. (a) | 1,940 | 120 | ||||||
Universal Corp. | 395 | 19 | ||||||
1,171 | ||||||||
Health Care Equipment & Services 4.6% | ||||||||
Aetna, Inc. (a) | 11,805 | 663 | ||||||
Alcon, Inc. (a) | 4,300 | 655 | ||||||
American Dental Partners, Inc. * | 515 | 13 | ||||||
AMERIGROUP Corp. * | 1,050 | 37 | ||||||
AmerisourceBergen Corp. (a) | 375 | 18 | ||||||
Analogic Corp. | 820 | 47 | ||||||
Apria Healthcare Group, Inc. * | 1,095 | 26 | ||||||
Baxter International, Inc. (a) | 11,510 | 691 | ||||||
Becton, Dickinson & Co. (a) | 560 | 47 | ||||||
Boston Scientific Corp. (a) * | 49,502 | 687 | ||||||
CIGNA Corp. (a) | 14,905 | 782 | ||||||
CONMED Corp. * | 425 | 12 | ||||||
Covidien Ltd. | 6,275 | 261 | ||||||
Emergency Medical Services Corp., Class A * | 510 | 15 | ||||||
Greatbatch, Inc. * | 2,130 | 53 | ||||||
Humana, Inc. (a) * | 16,285 | 1,221 | ||||||
Magellan Health Services, Inc. (a) * | 1,605 | 68 | ||||||
McKesson Corp. (a) | 10,780 | 713 | ||||||
MedCath Corp. (a) * | 1,590 | 44 | ||||||
Molina Healthcare, Inc. * | 380 | 14 | ||||||
Omnicell, Inc. * | 880 | 23 | ||||||
Tenet Healthcare Corp. (a) * | 77,000 | 270 | ||||||
WellPoint, Inc. (a) * | 230 | 18 | ||||||
6,378 | ||||||||
Household & Personal Products 1.5% | ||||||||
Avon Products, Inc. (a) | 21,500 | 881 | ||||||
Energizer Holdings, Inc. * | 2,645 | 276 | ||||||
Kimberly-Clark Corp. (a) | 8,800 | 624 | ||||||
NBTY, Inc. (a) * | 755 | 27 | ||||||
The Procter & Gamble Co. (a) | 4,150 | 288 | ||||||
2,096 | ||||||||
Insurance 2.0% | ||||||||
AFLAC, Inc. | 300 | 19 | ||||||
American Financial Group, Inc. (a) | 1,515 | 45 | ||||||
American International Group, Inc. (a) | 7,500 | 473 | ||||||
American Physicians Capital, Inc. (a) | 310 | 14 | ||||||
Delphi Financial Group, Inc., Class A (a) | 1,900 | 74 | ||||||
FBL Financial Group, Inc., Class A (a) | 345 | 14 | ||||||
Harleysville Group, Inc. (a) | 710 | 22 | ||||||
HCC Insurance Holdings, Inc. | 355 | 11 | ||||||
Lincoln National Corp. (a) | 840 | 52 |
See financial notes 11
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Loews Corp. (a) | 1,120 | 55 | ||||||
MetLife, Inc. (a) | 11,920 | 821 | ||||||
Nationwide Financial Services, Inc., Class A (a) | 430 | 23 | ||||||
Philadelphia Consolidated Holding Corp. (a) * | 640 | 26 | ||||||
Platinum Underwriters Holdings Ltd. | 895 | 32 | ||||||
Principal Financial Group, Inc. (a) | 1,840 | 125 | ||||||
Prudential Financial, Inc. (a) | 790 | 76 | ||||||
Reinsurance Group of America, Inc. | 405 | 23 | ||||||
The Chubb Corp. (a) | 860 | 46 | ||||||
The Hartford Financial Services Group, Inc. | 960 | 93 | ||||||
The Travelers Cos., Inc. (a) | 14,160 | 739 | ||||||
United America Indemnity Ltd., Class A * | 645 | 14 | ||||||
W. R. Berkley Corp. (a) | 830 | 25 | ||||||
2,822 | ||||||||
Materials 2.0% | ||||||||
AK Steel Holding Corp. (a) * | 1,125 | 56 | ||||||
Albemarle Corp. | 1,190 | 57 | ||||||
Ashland, Inc. | 265 | 16 | ||||||
Celanese Corp., Series A | 1,310 | 55 | ||||||
CF Industries Holdings, Inc. | 210 | 18 | ||||||
FMC Corp. (a) | 310 | 18 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 114 | 13 | ||||||
H.B. Fuller Co. (a) | 1,895 | 56 | ||||||
Headwaters, Inc. * | 2,190 | 31 | ||||||
International Paper Co. (a) | 1,215 | 45 | ||||||
Louisiana-Pacific Corp. (a) | 16,100 | 265 | ||||||
MeadWestvaco Corp. (a) | 17,600 | 592 | ||||||
Monsanto Co. (a) | 10,820 | 1,056 | ||||||
Newmont Mining Corp. | 5,700 | 290 | ||||||
OM Group, Inc. (a) * | 740 | 39 | ||||||
Owens-Illinois, Inc. * | 110 | 5 | ||||||
Packaging Corp. of America (a) | 390 | 12 | ||||||
Pactiv Corp. (a) * | 970 | 27 | ||||||
Rockwood Holdings, Inc. * | 1,170 | 46 | ||||||
Sonoco Products Co. (a) | 1,895 | 59 | ||||||
The Lubrizol Corp. (a) | 850 | 58 | ||||||
United States Steel Corp. | 100 | 11 | ||||||
2,825 | ||||||||
Media 1.8% | ||||||||
CBS Corp., Class B (a) | 3,910 | 112 | ||||||
Comcast Corp., Class A (a) * | 22,750 | 479 | ||||||
Comcast Corp., Special Class A (a) * | 28,950 | 605 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 2,050 | 67 | ||||||
Gemstar-TV Guide International, Inc. * | 2,725 | 19 | ||||||
Omnicom Group, Inc. | 1,930 | 98 | ||||||
Regal Entertainment Group, Class A | 755 | 17 | ||||||
The Interpublic Group of Cos., Inc. (a) * | 25,400 | 263 | ||||||
The Walt Disney Co. | 2,870 | 99 | ||||||
Time Warner, Inc. (a) | 40,200 | 734 | ||||||
2,493 | ||||||||
Pharmaceuticals & Biotechnology 3.3% | ||||||||
Abbott Laboratories | 9,900 | 541 | ||||||
Amgen, Inc. * | 5,200 | 302 | ||||||
Applied Biosystems Group-Applera Corp. | 2,170 | 81 | ||||||
Biogen Idec, Inc. (a) * | 350 | 26 | ||||||
Endo Pharmaceuticals Holdings, Inc. * | 320 | 9 | ||||||
Gilead Sciences, Inc. * | 15,340 | 708 | ||||||
Invitrogen Corp. * | 700 | 64 | ||||||
King Pharmaceuticals, Inc. (a) * | 1,680 | 18 | ||||||
Medicis Pharmaceutical Corp., Class A | 230 | 7 | ||||||
Merck & Co., Inc. (a) | 3,890 | 227 | ||||||
MGI Pharma, Inc. * | 310 | 10 | ||||||
Millennium Pharmaceuticals, Inc. (a) * | 38,700 | 457 | ||||||
Pfizer, Inc. (a) | 41,480 | 1,020 | ||||||
Regeneron Pharmaceuticals, Inc. * | 350 | 8 | ||||||
Schering-Plough Corp. | 2,660 | 81 | ||||||
Sciele Pharma, Inc. * | 660 | 17 | ||||||
Teva Pharmaceutical Industries Ltd. - ADR | 13,250 | 583 | ||||||
Watson Pharmaceuticals, Inc. (a) * | 15,800 | 483 | ||||||
4,642 | ||||||||
Real Estate 0.3% | ||||||||
CB Richard Ellis Group, Inc., Class A * | 14,945 | 364 | ||||||
Retailing 1.5% | ||||||||
Amazon.com, Inc. * | 940 | 84 | ||||||
Best Buy Co., Inc. (a) | 14,200 | 689 | ||||||
Blockbuster, Inc., Class A (a) * | 1,740 | 9 | ||||||
Circuit City Stores, Inc. | 21,500 | 170 | ||||||
Expedia, Inc. * | 550 | 18 | ||||||
J.C. Penney Co., Inc. | 6,500 | 366 | ||||||
Kohl’s Corp. * | 4,770 | 262 | ||||||
The Cato Corp., Class A | 400 | 8 | ||||||
The Gap, Inc. | 17,800 | 336 | ||||||
The Gymboree Corp. (a) * | 390 | 13 | ||||||
The Men’s Wearhouse, Inc. (a) | 1,860 | 79 | ||||||
The Pep Boys - Manny, Moe & Jack | 385 | 6 | ||||||
2,040 | ||||||||
Semiconductors & Semiconductor Equipment 1.8% | ||||||||
Advanced Energy Industries, Inc. (a) * | 1,825 | 29 | ||||||
Atmel Corp. * | 2,190 | 11 | ||||||
Broadcom Corp., Class A (a) * | 15,950 | 519 |
12 See financial notes
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Credence Systems Corp. (a) * | 7,475 | 23 | ||||||
Genesis Microchip, Inc. * | 555 | 4 | ||||||
Integrated Device Technology, Inc. * | 1,190 | 16 | ||||||
Intel Corp. | 18,170 | 489 | ||||||
LSI Corp. * | 46,300 | 306 | ||||||
MEMC Electronic Materials, Inc. * | 12,870 | 941 | ||||||
Photronics, Inc. * | 2,395 | 26 | ||||||
Teradyne, Inc. * | 2,310 | 29 | ||||||
Zoran Corp. * | 2,280 | 58 | ||||||
2,451 | ||||||||
Software & Services 3.1% | ||||||||
Adobe Systems, Inc. (a) * | 16,400 | 786 | ||||||
Ariba, Inc. (a) * | 875 | 11 | ||||||
BMC Software, Inc. (a) * | 1,960 | 66 | ||||||
Cadence Design Systems, Inc. * | 2,490 | 49 | ||||||
Computer Sciences Corp. * | 600 | 35 | ||||||
Convergys Corp. * | 1,520 | 28 | ||||||
CSG Systems International, Inc. (a) * | 3,585 | 74 | ||||||
Electronic Data Systems Corp. (a) | 7,440 | 161 | ||||||
FactSet Research Systems, Inc. | 390 | 28 | ||||||
Global Payments, Inc. (a) | 420 | 20 | ||||||
Google, Inc., Class A (a) * | 1,891 | 1,336 | ||||||
Greenfield Online, Inc. * | 225 | 3 | ||||||
Hewitt Associates, Inc., Class A * | 850 | 30 | ||||||
j2 Global Communications, Inc. * | 230 | 8 | ||||||
McAfee, Inc. (a) * | 730 | 30 | ||||||
Microsoft Corp. | 18,650 | 687 | ||||||
Novell, Inc. * | 8,200 | 62 | ||||||
Oracle Corp. * | 30,550 | 677 | ||||||
SPSS, Inc. (a) * | 315 | 12 | ||||||
Sybase, Inc. (a) * | 3,405 | 97 | ||||||
Sykes Enterprises, Inc. (a) * | 840 | 15 | ||||||
Symantec Corp. * | 1,390 | 26 | ||||||
Synopsys, Inc. (a) * | 2,685 | 76 | ||||||
Total System Services, Inc. | 930 | 28 | ||||||
Vignette Corp. * | 1,340 | 23 | ||||||
4,368 | ||||||||
Technology Hardware & Equipment 4.5% | ||||||||
ADC Telecommunications, Inc. * | 225 | 4 | ||||||
Alcatel-Lucent, ADR (a) | 40,765 | 395 | ||||||
Apple, Inc. * | 4,820 | 916 | ||||||
Checkpoint Systems, Inc. * | 200 | 6 | ||||||
Cisco Systems, Inc. * | 9,520 | 315 | ||||||
Corning, Inc. (a) | 31,400 | 762 | ||||||
Dolby Laboratories, Inc., Class A * | 1,815 | 75 | ||||||
Emulex Corp. (a) * | 2,570 | 56 | ||||||
Hewlett-Packard Co. (a) | 17,580 | 909 | ||||||
International Business Machines Corp. (a) | 11,520 | 1,338 | ||||||
Methode Electronics, Inc. | 2,170 | 27 | ||||||
Mettler-Toledo International, Inc. * | 150 | 16 | ||||||
Motorola, Inc. | 14,700 | 276 | ||||||
NCR Corp. (a) * | 12,765 | 352 | ||||||
Tech Data Corp. * | 1,400 | 55 | ||||||
Teradata Corp. * | 12,765 | 364 | ||||||
Tyco Electronics Ltd. | 9,275 | 331 | ||||||
Vishay Intertechnology, Inc. * | 2,495 | 31 | ||||||
Xerox Corp. (a) * | 2,370 | 41 | ||||||
6,269 | ||||||||
Telecommunication Services 1.9% | ||||||||
America Movil SAB de C.V., Class L ADR | 11,070 | 724 | ||||||
AT&T, Inc. (a) | 24,500 | 1,023 | ||||||
CenturyTel, Inc. | 860 | 38 | ||||||
Citizens Communications Co. (a) | 4,865 | 64 | ||||||
Qwest Communications International, Inc. (a) * | 113,000 | 811 | ||||||
Syniverse Holdings, Inc. * | 330 | 6 | ||||||
Telephone & Data Systems, Inc. | 290 | 20 | ||||||
USA Mobility, Inc. * | 100 | 2 | ||||||
Verizon Communications, Inc. | 110 | 5 | ||||||
2,693 | ||||||||
Transportation 0.5% | ||||||||
Con-way, Inc. | 1,085 | 46 | ||||||
Continental Airlines, Inc., Class B (a) * | 1,635 | 56 | ||||||
CSX Corp. (a) | 13,900 | 623 | ||||||
725 | ||||||||
Utilities 0.7% | ||||||||
ALLETE, Inc. (a) | 900 | 39 | ||||||
Ameren Corp. | 100 | 5 | ||||||
American Electric Power Co., Inc. (a) | 13,800 | 666 | ||||||
Edison International (a) | 1,460 | 85 | ||||||
FirstEnergy Corp. (a) | 350 | 24 | ||||||
Nicor, Inc. | 400 | 17 | ||||||
ONEOK, Inc. | 1,580 | 79 | ||||||
PG&E Corp. | 220 | 11 | ||||||
Public Service Enterprise Group, Inc. | 670 | 64 | ||||||
The AES Corp. (a) * | 790 | 17 | ||||||
1,007 | ||||||||
Total Common Stock (Cost $53,212) | 65,567 | |||||||
Foreign Common Stock 18.1% of net assets | ||||||||
Bermuda 0.1% | ||||||||
Retailing 0.1% | ||||||||
Giordano International Ltd. | 328,000 | 153 |
See financial notes 13
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
France 1.8% | ||||||||
Banks 0.5% | ||||||||
BNP Paribas | 6,500 | 720 | ||||||
Consumer Durables & Apparel 0.2% | ||||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 2,500 | 323 | ||||||
Media 1.1% | ||||||||
Societe Television Francaise 1 | 22,500 | 626 | ||||||
Vivendi | 6,100 | 276 | ||||||
Publicis Groupe | 15,700 | 640 | ||||||
1,542 | ||||||||
2,585 | ||||||||
Germany 1.7% | ||||||||
Automobiles & Components 0.9% | ||||||||
Bayerische Motoren Werke AG | 12,500 | 836 | ||||||
DaimlerChrysler AG - Reg’d | 3,400 | 372 | ||||||
1,208 | ||||||||
Insurance 0.5% | ||||||||
Allianz SE-Reg’d | 1,600 | 360 | ||||||
Hannover Rueckversicherung AG - Reg’d | 7,000 | 370 | ||||||
730 | ||||||||
Software & Services 0.3% | ||||||||
SAP AG | 7,100 | 384 | ||||||
2,322 | ||||||||
Ireland 0.4% | ||||||||
Banks 0.4% | ||||||||
Bank of Ireland | 34,000 | 627 | ||||||
Japan 2.6% | ||||||||
Automobiles & Components 0.3% | ||||||||
Honda Motor Co., Ltd. | 9,700 | 363 | ||||||
Diversified Financials 1.0% | ||||||||
Nikko Cordial Corp. | 29,200 | 418 | ||||||
Daiwa Securities Group, Inc. | 107,200 | 1,033 | ||||||
1,451 | ||||||||
Household & Personal Products 0.2% | ||||||||
Unicharm Corp. | 4,500 | 268 | ||||||
Pharmaceuticals & Biotechnology 0.0% | ||||||||
Takeda Pharmaceutical Co., Ltd. | 300 | 19 | ||||||
Semiconductors & Semiconductor Equipment 0.7% | ||||||||
Rohm Co., Ltd. | 10,700 | 937 | ||||||
Technology Hardware & Equipment 0.4% | ||||||||
OMRON Corp. | 23,000 | 567 | ||||||
3,605 | ||||||||
Luxembourg 0.2% | ||||||||
Telecommunication Services 0.2% | ||||||||
Millicom International Cellular S.A. * | 2,800 | 329 | ||||||
Mexico 0.3% | ||||||||
Media 0.3% | ||||||||
Grupo Televisa S.A. ADR (a) | 15,300 | 380 | ||||||
Netherlands 0.3% | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Koninklijke (Royal) Philips Electronics N.V. | 4,300 | 178 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASML Holding N.V. * | 4,977 | 173 | ||||||
351 | ||||||||
Republic of Korea 1.1% | ||||||||
Banks 0.1% | ||||||||
Kookmin Bank | 2,160 | 177 | ||||||
Semiconductors & Semiconductor Equipment 0.6% | ||||||||
Samsung Electronics Co., Ltd. | 1,370 | 845 | ||||||
Telecommunication Services 0.4% | ||||||||
SK Telecom Co., Ltd. | 2,370 | 556 | ||||||
1,578 | ||||||||
Singapore 0.3% | ||||||||
Technology Hardware & Equipment 0.3% | ||||||||
Flextronics International Ltd. * | 35,128 | 432 | ||||||
Spain 0.5% | ||||||||
Media 0.5% | ||||||||
Gestevision Telecinco S.A. | 22,500 | 650 | ||||||
Switzerland 3.1% | ||||||||
Capital Goods 0.0% | ||||||||
Geberit AG - Reg’d | 500 | 68 | ||||||
Commercial Services & Supplies 0.4% | ||||||||
Adecco S.A. - Reg’d | 10,200 | 615 | ||||||
Consumer Durables & Apparel 0.4% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 7,000 | 501 | ||||||
Diversified Financials 1.4% | ||||||||
Credit Suisse Group - Reg’d | 13,500 | 912 | ||||||
UBS AG - Reg’d | 19,100 | 1,024 | ||||||
1,936 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Nestle S.A. - Reg’d | 450 | 208 | ||||||
Givaudan S.A. - Reg’d | 170 | 167 | ||||||
375 |
14 See financial notes
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Pharmaceuticals & Biotechnology 0.6% | ||||||||
Novartis AG - Reg’d | 16,900 | 899 | ||||||
4,394 | ||||||||
United Kingdom 5.7% | ||||||||
Banks 1.5% | ||||||||
Barclays plc | 52,700 | 667 | ||||||
Lloyds TSB Group plc | 64,800 | 736 | ||||||
HSBC Holdings plc | 32,400 | 642 | ||||||
2,045 | ||||||||
Commercial Services & Supplies 0.6% | ||||||||
Experian Group Ltd. | 45,600 | 479 | ||||||
G4S plc | 87,400 | 386 | ||||||
865 | ||||||||
Consumer Services 0.0% | ||||||||
Compass Group plc | 6,200 | 45 | ||||||
Diversified Financials 0.5% | ||||||||
Schroders plc | 22,200 | 713 | ||||||
Food, Beverage & Tobacco 0.9% | ||||||||
Diageo plc | 24,900 | 571 | ||||||
Cadbury Schweppes plc | 56,500 | 752 | ||||||
1,323 | ||||||||
Media 0.9% | ||||||||
British Sky Broadcasting Group plc | 31,900 | 452 | ||||||
Johnston Press Group plc | 68,600 | 430 | ||||||
Trinity Mirror plc | 48,400 | 406 | ||||||
1,288 | ||||||||
Pharmaceuticals & Biotechnology 0.8% | ||||||||
GlaxoSmithKline plc | 41,300 | 1,061 | ||||||
Retailing 0.5% | ||||||||
Signet Group plc | 368,800 | 696 | ||||||
8,036 | ||||||||
Total Foreign Common Stock (Cost $24,197) | 25,442 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
U.S. Government Securities 7.2% of net assets | ||||||||
U.S. Treasury Bond | ||||||||
8.13%, 08/15/19 | 100 | 131 | ||||||
8.75%, 08/15/20 | 100 | 139 | ||||||
6.88%, 08/15/25 | 1,000 | 1,246 | ||||||
4.75%, 02/15/37 | 100 | 100 | ||||||
5.00%, 05/15/37 | 3,000 | 3,120 | ||||||
U.S. Treasury Inflation Protected Security | ||||||||
2.38%, 04/15/11 (a) | 210 | 213 | ||||||
2.00%, 04/15/12 | 205 | 206 | ||||||
2.50%, 07/15/16 | 412 | 426 | ||||||
2.38%, 01/15/25 | 221 | 225 | ||||||
2.00%, 01/15/26 (a) | 314 | 304 | ||||||
U.S. Treasury Note | ||||||||
3.75%, 05/15/08 (a) | 400 | 399 | ||||||
4.88%, 04/30/11 | 1,100 | 1,131 | ||||||
4.63%, 07/31/12 | 300 | 306 | ||||||
4.00%, 02/15/14 | 1,000 | 987 | ||||||
4.75%, 05/15/14 | 800 | 822 | ||||||
5.13%, 05/15/16 | 300 | 315 | ||||||
Total U.S. Government Securities (Cost $10,087) | 10,070 | |||||||
Foreign Government Securities 0.8% of net assets | ||||||||
Federative Republic of Brazil | ||||||||
12.50%, 01/05/22 | 500 | 336 | ||||||
Government of United Kingdom | ||||||||
4.25%, 03/07/11 | 200 | 406 | ||||||
Panama Government International Bond | ||||||||
6.70%, 01/26/36 (a) | 326 | 344 | ||||||
Total Foreign Government Securities (Cost $904) | 1,086 | |||||||
Corporate Bonds 2.9% of net assets | ||||||||
Fixed-Rate Obligations 0.8% | ||||||||
DaimlerChrysler NA Holding Corp. | ||||||||
5.75%, 09/08/11 (a) | 100 | 102 | ||||||
Edison Mission Energy | ||||||||
7.00%, 05/15/17 (c) | 100 | 98 | ||||||
El Paso Corp. | ||||||||
7.80%, 08/01/31 (a) | 100 | 100 | ||||||
General Motors Acceptance Corp. | ||||||||
8.00%, 11/01/31 | 200 | 185 | ||||||
HCA, Inc. | ||||||||
9.25%, 11/15/07 (c) | 200 | 211 | ||||||
Morgan Stanley | ||||||||
5.75%, 10/18/16 | 400 | 397 | ||||||
Verizon Communications, Inc. | ||||||||
5.55%, 02/15/16 (a) | 100 | 100 | ||||||
1,193 | ||||||||
Variable-Rate Obligations 2.1% | ||||||||
Amgen, Inc. | ||||||||
5.59%, 11/28/07 (b)(c) | 900 | 899 | ||||||
BellSouth Corp. | ||||||||
5.66%, 11/15/07 (a)(b) | 200 | 200 | ||||||
ConocoPhillips Australia Funding Co. | ||||||||
5.34%, 01/09/08 (a)(b) | 456 | 455 | ||||||
General Electric Capital Corp | ||||||||
6.50%, 03/15/08 (b)(c) | 300 | 630 | ||||||
SLM Corp. | ||||||||
5.01%, 11/20/07 (b)(c) | 500 | 496 | ||||||
Transocean, Inc. | ||||||||
5.87%, 12/05/07 (a)(b) | 200 | 200 | ||||||
2,880 | ||||||||
Total Corporate Bonds (Cost $4,022) | 4,073 | |||||||
See financial notes 15
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Municipal Bonds 0.4% of net assets | ||||||||
Revenue Bonds 0.4% | ||||||||
Tobacco Settlement Financing Corp. of Rhode Island Revenue Bond, Series 2002A | ||||||||
6.25%, 06/01/42 (a) | 500 | 505 | ||||||
Total Municipal Bonds (Cost $465) | 505 | |||||||
Asset-Backed Obligations 0.0% of net assets | ||||||||
Quest Trust Series 2004-X2 Class A1 | ||||||||
5.43%, 11/25/07 (a)(b)(c) | 1 | 1 | ||||||
Total Asset-Backed Obligations (Cost $1) | 1 | |||||||
Mortgage-Backed Securities 24.7% of net assets | ||||||||
Collateralized Mortgage Obligations 0.2% | ||||||||
Variable-Rate Obligations 0.2% | ||||||||
Freddie Mac Structured Series T-61 Class 1A1 | ||||||||
6.38%, 11/25/07 (a)(b) | 340 | 339 | ||||||
U.S. Government Agency Mortgages 24.4% | ||||||||
Fannie Mae | ||||||||
6.00%, 04/01/16 (a) | 20 | 21 | ||||||
6.00%, 03/01/18 (a) | 14 | 15 | ||||||
4.00%, 07/01/18 | 680 | 645 | ||||||
4.00%, 11/01/18 | 707 | 671 | ||||||
4.00%, 01/01/19 (a) | 17 | 16 | ||||||
4.00%, 04/01/19 (a) | 15 | 14 | ||||||
4.00%, 06/01/19 (a) | 115 | 109 | ||||||
4.00%, 06/01/19 (a) | 122 | 115 | ||||||
4.00%, 02/01/20 (a) | 392 | 370 | ||||||
4.00%, 03/01/20 (a) | 144 | 136 | ||||||
4.50%, 08/01/33 (a) | 203 | 190 | ||||||
5.50%, 02/01/34 | 614 | 607 | ||||||
5.50%, 04/01/34 | 265 | 262 | ||||||
5.50%, 09/01/34 | 3,626 | 3,582 | ||||||
5.50%, 11/01/34 | 2,096 | 2,070 | ||||||
5.50%, 02/01/35 | 1,450 | 1,432 | ||||||
5.50%, 02/01/35 | 693 | 684 | ||||||
5.50%, 02/01/35 (a) | 300 | 296 | ||||||
5.50%, 04/01/35 | 1,572 | 1,551 | ||||||
4.50%, 05/01/35 (a) | 417 | 389 | ||||||
5.50%, 05/01/35 (a) | 565 | 557 | ||||||
5.50%, 06/01/35 (a) | 81 | 79 | ||||||
4.50%, 09/01/35 | 874 | 816 | ||||||
4.50%, 09/01/35 | 905 | 844 | ||||||
5.50%, 09/01/35 (a) | 416 | 410 | ||||||
4.50%, 10/01/35 (a) | 88 | 82 | ||||||
5.00%, 02/01/36 (a) | 2,530 | 2,432 | ||||||
5.50%, 04/01/36 | 888 | 875 | ||||||
5.50%, 07/01/36 | 946 | 933 | ||||||
5.00%, 01/01/37 | 981 | 942 | ||||||
Fannie Mae TBA | ||||||||
5.00%, 12/12/37 | 1,000 | 959 | ||||||
5.50%, 11/13/37 | 50 | 49 | ||||||
5.50%, 12/12/37 | 3,000 | 2,956 | ||||||
6.00%, 11/13/37 | 1,000 | 1,007 | ||||||
6.00%, 12/12/37 | 1,000 | 1,006 | ||||||
Freddie Mac | ||||||||
6.00%, 09/01/22 | 145 | 147 | ||||||
Ginnie Mae | ||||||||
5.00%, 04/15/35 | 281 | 273 | ||||||
5.00%, 08/15/35 | 673 | 654 | ||||||
5.50%, 12/15/36 | 161 | 160 | ||||||
5.50%, 06/15/37 | 1,933 | 1,922 | ||||||
6.00%, 06/15/37 | 990 | 1,003 | ||||||
5.50%, 07/15/37 | 999 | 993 | ||||||
5.50%, 08/15/37 | 895 | 890 | ||||||
Ginnie Mae TBA | ||||||||
5.50%, 11/20/37 | 1,000 | 994 | ||||||
34,158 | ||||||||
Variable-Rate Obligations 0.1% | ||||||||
Fannie Mae | ||||||||
7.21%, 11/05/07 (a)(b) | 10 | 10 | ||||||
Freddie Mac | ||||||||
4.36%, 11/05/07 (a)(b) | 122 | 122 | ||||||
132 | ||||||||
Total Mortgage-Backed Securities (Cost $34,814) | 34,629 | |||||||
Non-Agency Mortgage-Backed Securities 0.5% of net assets | ||||||||
Fixed-Rate Obligations 0.1% | ||||||||
Bank of America Mortgage Securities Series 2004-2 Class 5A1 | ||||||||
6.50%, 10/25/31 (a) | 64 | 65 | ||||||
Residential Funding Mortgage | ||||||||
Security I Series -S9 Class A1 | ||||||||
6.50%, 03/25/32 (a) | 36 | 37 | ||||||
102 | ||||||||
Variable-Rate Obligations 0.4% | ||||||||
Bear Stearns Adjustable Rate | ||||||||
Mortgage Trust Series 2002-11 Class 1A1 | ||||||||
5.61%, 11/25/07 (a)(b) | 58 | 58 | ||||||
Bear Stearns Adjustable Rate | ||||||||
Mortgage Trust Series 2005-4 Class 23A2 | ||||||||
5.37%, 11/25/07 (a)(b) | 100 | 100 | ||||||
Washington Mutual Series 2003-R1 Class A1 | ||||||||
5.41%, 11/25/07 (a)(b) | 387 | 387 | ||||||
545 | ||||||||
Total Non-Agency Mortgage-Backed Securities (Cost $650) | 647 | |||||||
16 See financial notes
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 4.1% of net assets | ||||||||
Commercial Paper & Other Obligations 0.4% | ||||||||
Rabobank USA Financial Co. | ||||||||
4.80%, 11/01/07 | 600 | 600 | ||||||
Repurchase Agreement 3.4% | ||||||||
Fixed Income Clearing Corp. dated 10/31/07, due 11/01/07 at 4.55%, with a maturity value of $4,736 (fully collateralized by U.S. Government Agency Securities with a value of $4,845.) | 4,735 | 4,735 | ||||||
U.S. Treasury Obligations 0.3% | ||||||||
U.S. Treasury Bill | ||||||||
3.78%, 12/13/07 (a) | 15 | 15 | ||||||
3.74%, 12/13/07 (a) | 215 | 214 | ||||||
4.19%, 12/13/07 | 110 | 109 | ||||||
338 | ||||||||
Total Short-Term Investments (Cost $5,673) | 5,673 | |||||||
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Other Investment 0.0% of net assets | ||||||||
iShares Lehman Aggregate Bond Fund | 100 | 10 | ||||||
Total Other Investments (Cost $10) | 10 | |||||||
Notional Amount | Value | |||||||
Security | ($ x 1,000) | ($ x 1,000) | ||||||
Purchased Options 0.3% of net assets | ||||||||
Call Options 0.3% | ||||||||
3 Month LIBOR Swaption Call, Strike Price 4.50, Expires 12/19/08 | 1,000 | 6 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.50, Expires 12/19/08 | 1,000 | 6 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.55, Expires 09/19/08 | 5,300 | 33 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.72, Expires 12/31/08 | 1,000 | 8 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.72, Expires 12/31/08 | 1,000 | 8 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.75, Expires 03/31/08 | 2,000 | 14 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.75, Expires 09/08/09 | 14,700 | 117 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.75, Expires 09/26/08 | 2,000 | 16 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.75, Expires 09/26/08 | 2,000 | 16 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.75, Expires 12/15/08 | 2,600 | 21 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.84, Expires 11/23/07 | 1,000 | 5 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.84, Expires 11/23/07 | 900 | 4 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.00, Expires 02/01/08 | 2,100 | 20 | ||||||
90 Day Euro Dollar Futures, Strike Price 95.00, Expires 03/17/08 | 7 | 9 | ||||||
90 Day Euro Dollar Futures, Strike Price 95.25, Expires 03/17/08 | 7 | 6 | ||||||
90 Day Euro Dollar Futures, Strike Price 95.25, Expires 06/16/08 | 7 | 8 | ||||||
90 Day Euro Dollar Futures, Strike Price 95.25, Expires 12/17/07 | 7 | 2 | ||||||
U.S. Treasury Bond Futures, Strike Price 114.00, Expires 11/20/07 | 20 | — | ||||||
U.S. Treasury Note Futures, Strike Price 120.00, Expires 11/20/07 | 96 | 2 | ||||||
USD/JPY, Strike Price 104.65, Expires 03/31/10 | 1,100 | 56 | ||||||
USD/JPY, Strike Price 118.00, Expires 09/16/08 | 1,100 | 7 | ||||||
364 | ||||||||
Put Options 0.0% | ||||||||
90 Day Euro Dollar Futures, Strike Price 91.25, Expires 12/17/07 | 25 | — | ||||||
Euro BOBL, Strike Price 102.75, Expires 11/23/07 | 3 | — |
See financial notes 17
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Notional Amount | Value | |||||||
Security | ($ x 1,000) | ($ x 1,000) | ||||||
USD/JPY, Strike Price 104.65, Expires 03/31/10 | 1,100 | 45 | ||||||
45 | ||||||||
Total Purchased Options (Cost $411) | 409 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $135,001, and the unrealized appreciation and depreciation were $16,880 and ($3,769), respectively, with a net appreciation of $13,111. | ||||||||
As of 10/31/07, the values of certain foreign securities held by the fund aggregating $23,883 were adjusted from their closing market values following the guidelines adopted by the fund’s Board of Trustees. |
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for future contract, short sale, swap agreements, delayed-delivery securities and options written | |
(b) | Variable-rate security. | |
(c) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $2,335 or 1.7% of net assets. |
ADR — American Depositary Receipt
18 See financial notes
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short Sales 3.6% of net assets | ||||||||
U.S. Government Agency Mortgages 2.8% | ||||||||
Fannie Mae TBA | ||||||||
5.50%, 11/13/37 | 4,000 | 3,942 | ||||||
U.S. Government Agency Securities 0.8% | ||||||||
U.S. Treasury Note | ||||||||
3.63%, 05/15/13 | 700 | 682 | ||||||
U.S. Treasury Note | ||||||||
4.13%, 05/15/15 | 400 | 394 | ||||||
1,076 | ||||||||
Total Short Sales (Proceeds $5,029) | 5,018 | |||||||
Notional Amount | Value | |||||||
Security | ($ x 1,000) | ($ x 1,000) | ||||||
Options Written 0.2% of net assets | ||||||||
Call Options 0.2% | ||||||||
3 Month LIBOR Swaption Call, Strike Price 4.95, Expires 03/31/08 | 1,000 | 13 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.95, Expires 09/26/08 | 900 | 14 | ||||||
3 Month LIBOR Swaption Call, Strike Price 4.95, Expires 09/30/08 | 900 | 14 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.00, Expires 12/15/08 | 800 | 15 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.00, Expires 12/19/08 | 300 | 5 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.00, Expires 12/19/08 | 300 | 5 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.05, Expires 09/19/08 | 1,700 | 31 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.10, Expires 02/01/08 | 900 | 14 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.15, Expires 09/08/09 | 4,900 | 117 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.22, Expires 12/31/08 | 300 | 7 | ||||||
3 Month LIBOR Swaption Call, Strike Price 5.22, Expires 12/31/08 | 300 | 7 | ||||||
U.S. Treasury Note Futures, Strike Price 107.00, Expires 11/20/07 | 20 | 12 | ||||||
254 | ||||||||
Put Options 0.0% | ||||||||
USD/JPY, Strike Price 100.00, Expires 09/16/08 | 1,100 | 9 | ||||||
Total Options Written (Premiums $277) | 263 | |||||||
End of short sales and options written. | ||||||||
In addition to the above, the fund held the following at10/31/07. All numbers x 1000 except number of futures contracts. | ||||||||
Unrealized | ||||||||
Gains/ | ||||||||
Notional Amount | (Losses) | |||||||
(Foreign/USD) | (USD) | |||||||
Swap Agreements | ||||||||
Interest Rate Swaps | ||||||||
Australian Dollars | ||||||||
Receive fixed rate payments of 7.00%, Pay variable rate payments of 3 month BBS, expires 04/15/09, Pershing LLC | 2,200 | (10 | ) | |||||
Receive fixed rate payments of 7.00%, Pay variable rate payments of 6 month BBS, expires 12/15/09, Morgan Stanley | 1,000 | (4 | ) | |||||
(14 | ) | |||||||
Brazilian Real | ||||||||
Receive fixed rate payments of 10.115%, Pay variable rate payments of 3 month BRCDI, expires 01/02/12, Morgan Stanley | 6,200 | (78 | ) | |||||
Receive fixed rate payments of 10.15%, Pay variable rate payments of 1 month BRCDI, expires 01/02/12, Goldman Sachs & Co. | 1,900 | (46 | ) | |||||
Receive fixed rate payments of 10.575%, Pay variable rate payments of 0 month BRCDI, expires 01/02/12, UBS, AG | 2,500 | (19 | ) | |||||
(143 | ) | |||||||
British Pounds | ||||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 6 month LIBOR, expires 6/15/09, HSBC | 600 | (5 | ) |
See financial notes 19
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Unrealized | ||||||||
Gains/ | ||||||||
Notional Amount | (Losses) | |||||||
(Foreign/USD) | (USD) | |||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 6 month LIBOR, expires 9/15/10, Barclays Bank plc | 1,000 | (38 | ) | |||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 6 month LIBOR, expires 9/15/10, Royal Bank of Scotland | 100 | (2 | ) | |||||
Receive fixed rate payments of 6.00%, Pay variable rate payments of 6 month LIBOR, expires 9/18/09, MS Security Services | 1,700 | 4 | ||||||
(41 | ) | |||||||
Canadian Dollars | ||||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 06/20/12, Merrill Lynch | 2,200 | — | ||||||
Receive variable rate payments of 3 month LIBOR, Pay fixed rate payments of 5.50%, expires 06/20/17, Merrill Lynch | 1,600 | (3 | ) | |||||
(3 | ) | |||||||
European Euro | ||||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 6 month EURIB, expires 6/18/34, Deutsche Bank Securities, Inc. | 300 | 5 | ||||||
Japanese Yen | ||||||||
Receive variable rate payments of 6 month LIBOR, Pay fixed rate payments of 2.00%, expires 12/20/16, Barclays Bank plc | 10,000 | (4 | ) | |||||
Receive variable rate payments of 6 month LIBOR, Pay fixed rate payments of 2.00%, expires 12/20/16, UBS, AG | 20,000 | (7 | ) | |||||
(11 | ) | |||||||
Mexican Peso | ||||||||
Receive fixed rate payments of 7.91%, Pay variable rate payments of 1 month TIIE, expires 05/14/09, Citibank N.A. | 9,000 | (2 | ) | |||||
U.S. Dollars | ||||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments 3 month LIBOR, expires 12/19/37, Goldman Sachs & Co. | 100 | 8 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/09, Barclays Bank plc | 9,200 | 47 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/09, Citibank N.A. | 800 | 6 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/09, Merrill Lynch | 1,500 | 7 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/12, Deutsche Bank Securities, Inc. | 1,700 | 50 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/12, JPMorgan Chase & Co. | 7,100 | 139 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/12, Lehman Brothers, Inc. | 1,600 | 47 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/17, Deutsche Bank Securities, Inc. | 700 | 11 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/17, JP Morgan Chase & Co. | 700 | 7 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/17, Merrill Lynch | 1,400 | 13 | ||||||
Receive fixed rate payments of 5.00%, Pay variable rate payments of 3 month LIBOR, expires 12/19/37, Citibank N.A. | 600 | 40 |
20 See financial notes
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Unrealized | ||||||||
Gains/ | ||||||||
Notional Amount | (Losses) | |||||||
(Foreign/USD) | (USD) | |||||||
Receive variable rate payments of 3 month LIBOR, Pay fixed rate payments of 6.00%, expires 12/15/24, UBS, AG | 200 | 4 | ||||||
379 | ||||||||
Net unrealized gains on Interest Rate Swaps | 170 | |||||||
Credit Default Swaps - Purchased Protection | ||||||||
U.S. Dollars 0.1% | ||||||||
Allstate Corp., 6.125% due 02/15/12, Pay fixed rate payments of 0.26%, expires 12/20/08, Morgan Stanley | 100 | — | ||||||
AutoZone, Inc., 5.875% due 10/15/12, Pay fixed rate payments of 0.35%, expires 12/20/08, UBS, AG | 200 | (1 | ) | |||||
AutoZone, Inc., 5.875% due 10/15/12, Pay fixed rate payments of 0.635%, expires 06/20/17, JP Morgan Chase & Co. | 100 | — | ||||||
CDX HY-8, Pay fixed rate payments of 2.75%, expires 06/20/12, Merrill Lynch | 1,100 | 13 | ||||||
CDX HY-8, Pay fixed rate payments of 2.75%, expires 06/20/12, UBS, AG | 300 | (2 | ) | |||||
CDX IG8, Pay fixed rate payments of 0.35%, expires 06/20/12, Lehman Brothers, Inc. | 300 | 1 | ||||||
CDX IG9, Pay fixed rate payments of 0.80%, expires 12/20/17, Goldman Sachs & Co. | 1,200 | 8 | ||||||
DaimlerChrysler NA Holding Corp., 5.75% due 09/08/11, Pay fixed rate payments of 0.58%, expires 09/20/11, Barlcays Bank plc | 100 | (1 | ) | |||||
DJ CDX, Pay fixed rate payments of 0.1425%, expires 12/20/12, Morgan Stanley | 300 | 2 | ||||||
DJ CDX, Pay fixed rate payments of 0.1425%, expires 12/20/12, Morgan Stanley | 700 | 6 | ||||||
DJ CDX, Pay fixed rate payments of 0.65%, expires 12/20/16, Morgan Stanley | 500 | 10 | ||||||
DJ CDX, Pay fixed rate payments of 0.75%, expires 12/20/11, Barclays Bank plc | 900 | 28 | ||||||
Eaton Corp., 5.75% due 07/15/12, Pay fixed rate payments of 0.28%, expires 12/20/08, Citibank N.A. | 100 | — | ||||||
Eli Lilly & Co., 6.00% due 03/15/12, Pay fixed rate payments of 0.16%, expires 12/20/08, Barclays Bank plc | 100 | — | ||||||
Emerson Electric Co., 4.625% due 10/15/12, Pay fixed rate payments of 0.21%, expires 12/20/08, Morgan Stanley | 100 | — | ||||||
FedEx Corp., 7.25 % due 02/15/11, Pay fixed rate payments of 0.29%, expires 12/20/08, Citibank N.A. | 100 | — | ||||||
Home Depot, Inc., 5.375% due 04/01/06, Pay fixed rate payments of 0.12%, expires 12/20/08, Lehman Brothers, Inc. | 100 | — | ||||||
Ingersoll-Rand Co. Ltd., 6.48% due 06/01/25, Pay fixed rate payments of 0.32%, expires 12/20/08, Merrill Lynch | 100 | — | ||||||
Johnson & Johnson, Inc., 3.80% due 05/15/13, Pay fixed rate payments of 0.11%, expires 12/20/08, Lehman Brothers, Inc. | 100 | — | ||||||
Masco Corp., 5.875% due 07/15/12, Pay fixed rate payments of 0.30%, expires 12/20/08, Lehman Brothers, Inc. | 100 | — | ||||||
People’s Republic of China, 6.80% due 05/23/11, Pay fixed rate payments of 0.40%, expires 06/20/09, Lehman Brothers, Inc. | 200 | (1 | ) | |||||
RACEP 2006-3 D, 7.01% due 04/15/20, Pay fixed rate payments of 1.95%, expires 04/15/20, Merrill Lynch | 100 | 1 | ||||||
RACEP 2006-3 E, 9.61% due 04/15/20, Pay fixed rate payments of 4.03%, expires 04/15/20, Merrill Lynch | 100 | 2 | ||||||
RadioShack Corp., 7.375% due 05/15/11, Pay fixed rate payments of 0.35%, expires 12/20/08, Lehman Brothers, Inc. | 100 | — | ||||||
Republic of Hungary, 4.75% due 02/03/15, Pay fixed rate payments of 0.535%, expires 05/20/16, Morgan Stanley | 300 | (1 | ) |
See financial notes 21
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Unrealized | ||||||||
Gains/ | ||||||||
Notional Amount | (Losses) | |||||||
(Foreign/USD) | (USD) | |||||||
Republic of Hungary, 4.75% due 02/03/15, Pay fixed rate payments of 0.54%, expires 05/20/16, JPMorgan Chase & Co. | 100 | — | ||||||
Republic of Hungary, 4.75% due 02/03/15, Pay fixed rate payments of 0.545%, expires 05/20/16, Deutsche Bank Securities, Inc. | 200 | (1 | ) | |||||
SARA 2006-1A C, 6.84% due 12/15/19, Pay fixed rate payments of 1.88%, expires 12/15/19, Merrill Lynch | 100 | 3 | ||||||
SARA 2006-1A D, 8.81% due 12/15/19, Pay fixed rate payments of 3.78%, expires 12/15/19, Merrill Lynch | 100 | 4 | ||||||
Wal-Mart Stores, Inc., 3.375% due 10/01/08, Pay fixed rate payments of 0.14%, expires 12/20/08, Citibank N.A. | 200 | — | ||||||
Wal-Mart Stores, Inc., 5.75% due 12/19/30, Pay fixed rate payments of 0.147%, expires 06/20/17, Morgan Stanley | 100 | 1 | ||||||
Whirpool Corp., 8.60% due 05/01/10, Pay fixed rate payments of 0.29%, expires 12/20/08, Lehman Brothers, Inc. | 100 | — | ||||||
XL Capital Ltd., 6.50% due 01/15/12, Pay fixed rate payments of 0.205%, expires 03/20/12, Barclays Bank plc | 100 | 1 | ||||||
73 | ||||||||
Credit Default Swaps - Sold Protection | ||||||||
U.S. Dollars | ||||||||
AIG, 5.60% due 10/18/16, Receive fixed rate payments of 0.055%, expires 03/20/08, Lehman Brothers, Inc. | 600 | (1 | ) | |||||
DJ CDX, Receive fixed rate payment of 0.4575%, expires 12/20/15, Morgan Stanley | 200 | (3 | ) | |||||
DJ CDX, Receive fixed rate payment of 0.4620%, expires 12/20/15, Morgan Stanley | 500 | (8 | ) | |||||
DJ CDX, Receive fixed rate payment of 2.105%, expires 06/20/12, Citibank N.A. | 1,500 | 3 | ||||||
(9 | ) | |||||||
Net unrealized gains on Credit Default Swaps | 64 | |||||||
Total unrealized gains on swap agreements | 234 | |||||||
Net premium received/paid | (356 | ) | ||||||
Swap Agreements, at fair value | (122 | ) | ||||||
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains/Losses | ||||||||||
Futures Contracts | ||||||||||||
Futures Contracts - Long | ||||||||||||
90 Day Eurodollar, expires 03/17/08 | 5 | 1,194 | 3 | |||||||||
90 Day Eurodollar, expires 12/14/09 | 8 | 1,907 | — | |||||||||
90 Day Eurodollar, expires 09/15/08 | 92 | 22,009 | — | |||||||||
90 Day Eurodollar, expires 09/14/09 | 9 | 2,148 | — | |||||||||
90 Day Eurodollar, expires 06/15/09 | 14 | 3,345 | 1 | |||||||||
90 Day Eurodollar, expires 12/15/08 | 106 | 25,361 | 31 | |||||||||
90 Day Eurodollar, expires 12/17/07 | 3 | 714 | 2 | |||||||||
90 Day Eurodollar, expires 09/15/08 | 10 | 2,392 | (7 | ) | ||||||||
90 Day Eurodollar, expires 12/17/07 | 15 | 3,572 | 20 | |||||||||
90 Day Eurodollar, expires 03/16/09 | 8 | 1,913 | (3 | ) | ||||||||
90 Day LIBOR,, expires 03/19/08 | 5 | 1,223 | — | |||||||||
90 Day LIF, expires 03/20/08 | 10 | 2,446 | (3 | ) | ||||||||
90 Day LIF, expires 09/18/08 | 15 | 3,683 | (4 | ) | ||||||||
90 Day LIF, expires 12/18/08 | 21 | 5,159 | (3 | ) | ||||||||
EURIBOR, expires 12/16/08 | 12 | 4,158 | (6 | ) | ||||||||
EURIBOR, expires 06/17/08 | 29 | 10,042 | (1 | ) | ||||||||
EURIBOR, expires 03/17/08 | 10 | 3,461 | (3 | ) | ||||||||
Euro BOBL, expires 12/31/07 | 3 | 468 | — | |||||||||
Euro Gas Futures, expires 03/17/09 | 3 | 1,040 | (2 | ) |
22 See financial notes
Table of Contents
Schwab Viewpoints Fund
Portfolio Holdings continued
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains/Losses | ||||||||||
UK Treasury Bond, expires 12/27/07 | 1 | 223 | — | |||||||||
25 | ||||||||||||
Futures Contracts – Short | ||||||||||||
2 Years, U.S. Treasury Note, expires 12/31/07 | 13 | 2,692 | (7 | ) | ||||||||
5 Years, U.S. Treasury Note, expires 12/31/07 | 169 | 18,141 | (82 | ) | ||||||||
U.S. Treasury Bond, expires 12/19/07 | 52 | 5,855 | (54 | ) | ||||||||
10 Years, U.S. Treasury Note, expires 12/19/07 | 29 | 3,190 | (43 | ) | ||||||||
LIBOR, expires 06/25/08 | 42 | 10,297 | 14 | |||||||||
U.S. Treasury Bond, expires 12/19/07 | 44 | 4,954 | (48 | ) | ||||||||
(220 | ) | |||||||||||
Net realized losses on futures | (195 | ) | ||||||||||
Currency | Amount of | Currency | Amount of | |||||||||||||||||
Expiration | to be | Currency to be | to be | Currency to be | Unrealized | |||||||||||||||
Date | Received | Received | Delivered | Delivered | Gains / Losses | |||||||||||||||
Forward Foreign Currency Contracts | ||||||||||||||||||||
11/01/2007 | CAD | 14 | USD | 14 | 1 | |||||||||||||||
03/13/2008 | CLP | 17 | USD | 34 | 2 | |||||||||||||||
03/13/2008 | USD | 34 | CLP | 17 | (2 | ) | ||||||||||||||
11/05/2007 | USD | 81 | EUR | 56 | (2 | ) | ||||||||||||||
03/31/2008 | USD | 1,192 | EUR | 822 | (29 | ) | ||||||||||||||
12/13/2007 | JPY | 54,801 | USD | 478 | (3 | ) | ||||||||||||||
03/13/2008 | MXN | 946 | USD | 88 | 5 | |||||||||||||||
03/13/2008 | USD | 88 | MXN | 946 | (2 | ) | ||||||||||||||
07/02/2008 | BRL | 1,010 | USD | 565 | 64 | |||||||||||||||
12/20/2007 | CAD | 14 | USD | 15 | — | |||||||||||||||
11/01/2007 | USD | 1,557 | GBP | 749 | (49 | ) | ||||||||||||||
12/20/2007 | USD | 1,499 | GBP | 722 | (9 | ) | ||||||||||||||
01/07/2008 | USD | 880 | GBP | 424 | (30 | ) | ||||||||||||||
01/18/2008 | USD | 1,481 | GBP | 714 | (32 | ) | ||||||||||||||
01/23/2008 | USD | 659 | GBP | 318 | (10 | ) | ||||||||||||||
04/04/2008 | USD | 1,442 | GBP | 697 | (25 | ) | ||||||||||||||
11/01/2007 | GBP | 27 | USD | 56 | 1 | |||||||||||||||
04/21/2008 | USD | 1,660 | GBP | 803 | (32 | ) | ||||||||||||||
11/02/2007 | USD | 3 | RUB | 78 | — | |||||||||||||||
11/02/2007 | RUB | 78 | USD | 3 | — | |||||||||||||||
12/10/2007 | RUB | 276 | USD | 11 | 1 | |||||||||||||||
07/10/2008 | RUB | 7,330 | USD | 295 | 5 | |||||||||||||||
05/30/2008 | KRW | 10,559 | USD | 12 | — | |||||||||||||||
05/30/2008 | USD | 52 | KRW | 46,231 | (2 | ) | ||||||||||||||
08/04/2008 | KRW | 34,988 | USD | 39 | 1 | |||||||||||||||
01/10/2008 | CNY | 6,653 | USD | 905 | 3 | |||||||||||||||
Net realized losses on Forward Foreign Currency Contracts | (144 | ) |
See financial notes 23
Table of Contents
Schwab Viewpoints Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $134,446) | $148,112 | |||||
Foreign currency (cost $619) | 629 | |||||
Receivables: | ||||||
Investments sold | 9,213 | |||||
Investments sold short | 5,038 | |||||
Interest | 388 | |||||
Due from brokers for futures | 116 | |||||
Dividends | 99 | |||||
Fund shares sold | 20 | |||||
Foreign tax reclaims | 31 | |||||
Unrealized gains on swap agreements | 471 | |||||
Unrealized gains on forward foreign currency contracts | 83 | |||||
Prepaid expenses | + | 1 | ||||
Total assets | 164,201 | |||||
Liabilities | ||||||
Securities sold short, at value (proceeds $5,029) | 5,018 | |||||
Options written , at value (proceeds $277) | 263 | |||||
Premium on swap agreements | 356 | |||||
Payables: | ||||||
Investments bought | 17,997 | |||||
Investment adviser and administrator fees | 17 | |||||
Transfer agent and shareholder services fees | 3 | |||||
Fund shares redeemed | 30 | |||||
Due to brokers for futures | 20 | |||||
Payable to custodian | 5 | |||||
Unrealized losses on swap agreements | 237 | |||||
Unrealized losses on forward foreign currency contracts | 227 | |||||
Accrued expenses | + | 160 | ||||
Total liabilities | 24,333 | |||||
Net Assets | ||||||
Total assets | 164,201 | |||||
Total liabilities | − | 24,333 | ||||
Net assets | $139,868 | |||||
Net Assets by Source | ||||||
Capital received from investors | 117,560 | |||||
Net investment income not yet distributed | 2,312 | |||||
Net realized capital gains | 6,387 | |||||
Net unrealized capital gains | 13,609 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $112,318 | 8,102 | $13.86 | ||||||||
Select Shares | 27,550 | 1,985 | 13.88 |
24 See financial notes
Table of Contents
Schwab Viewpoints Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $63) | $1,680 | |||||
Interest | + | 2,516 | ||||
Total Investment Income | 4,196 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 7,571 | |||||
Net realized losses on short sales | (751 | ) | ||||
Net realized losses on foreign currency translations | (190 | ) | ||||
Net realized losses on written option contracts | (23 | ) | ||||
Net realized losses on futures contracts | (20 | ) | ||||
Net realized gains on swap agreements | + | 719 | ||||
Net realized gains | 7,306 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 3,905 | |||||
Net unrealized gains on short sales | 750 | |||||
Net unrealized losses on foreign currency translations | (91 | ) | ||||
Net unrealized gains on written option contracts | 43 | |||||
Net unrealized losses on futures contracts | (318 | ) | ||||
Net unrealized gains on swap agreements | + | 123 | ||||
Net unrealized gains | 4,412 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,139 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 297 | |||||
Select Shares | 57 | |||||
Shareholder reports | 106 | |||||
Custodian fees | 78 | |||||
Portfolio accounting fees | 76 | |||||
Professional fees | 49 | |||||
Registration fees | 30 | |||||
Trustees’ fees | 6 | |||||
Overdraft expense | 5 | |||||
Other expenses | + | 5 | ||||
Total expenses | 1,848 | |||||
Expense reduction by adviser and Schwab | − | 269 | ||||
Custody credits | − | 128 | ||||
Net expenses | 1,451 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 4,196 | |||||
Net expenses | − | 1,451 | ||||
Net investment income | 2,745 | |||||
Net realized gains | 7,306 | |||||
Net unrealized gains | + | 4,412 | ||||
Increase in net assets from operations | $14,463 |
See financial notes 25
Table of Contents
Schwab Viewpoints Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $2,745 | $2,769 | ||||||
Net realized gains | 7,306 | 5,964 | ||||||
Net unrealized gains | + | 4,412 | 3,185 | |||||
Increase in net assets from operations | 14,463 | 11,918 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 2,110 | 1,595 | ||||||
Select Shares | + | 541 | 137 | |||||
Total distributions from net investment income | 2,651 | 1,732 | ||||||
Distributions from net realized gains | ||||||||
Investor Shares | 5,431 | 3,736 | ||||||
Select Shares | + | 1,254 | 277 | |||||
Total distributions from net realized gains | 6,685 | 4,013 | ||||||
Total distributions | $9,336 | $5,745 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 616 | $8,271 | 1,613 | $20,830 | ||||||||||||||
Select Shares | + | 375 | 5,047 | 1,710 | 21,953 | |||||||||||||
Total shares sold | 991 | $13,318 | 3,323 | $42,783 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 555 | $7,169 | 395 | $5,034 | ||||||||||||||
Select Shares | + | 127 | 1,635 | 30 | 387 | |||||||||||||
Total shares reinvested | 682 | $8,804 | 425 | $5,421 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (2,169 | ) | ($29,082 | ) | (3,008 | ) | ($38,807 | ) | ||||||||||
Select Shares | + | (623 | ) | (8,345 | ) | (349 | ) | (4,516 | ) | |||||||||
Total shares redeemed | (2,792 | ) | ($37,427 | ) | (3,357 | ) | ($43,323 | ) | ||||||||||
Net transactions in fund shares | (1,119 | ) | ($15,305 | ) | 391 | $4,881 | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 11,206 | $150,046 | 10,815 | $138,992 | ||||||||||||||
Total increase or decrease | + | (1,119 | ) | (10,178 | ) | 391 | 11,054 | |||||||||||
End of period | 10,087 | $139,868 | 11,206 | $150,046 | ||||||||||||||
Net investment income not yet distributed | $2,312 | $2,194 |
26 See financial notes
Table of Contents
Schwab Viewpoints Fund
Financial Notes
1. Business Structure of the Fund:
Schwab Viewpoints 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 (the “1940 Act”), as amended. The list below shows all the funds in the trust including the fund discussed in this report, which is highlighted:
Schwab Capital Trust (organized May 7, 1993) Schwab Viewpoints Fund Schwab S&P 500 Index Fund Schwab Institutional Select S&P 500 Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index Fund Schwab MarketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Laudus U.S. MarketMasters Fund Laudus Small-Cap MarketMasters Fund Laudus International MarketMasters Fund Schwab Premier Equity Fund Schwab Core Equity Fund | Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Financial Services Fund Schwab Health Care Fund Schwab Technology Fund Schwab Target 2010 Fund Schwab Target 2020 Fund Schwab Target 2030 Fund Schwab Target 2040 Fund Schwab Retirement Income Fund Schwab Fundamental US Large Company Index Fund Schwab Fundamental US Small-Mid Company Index Fund Schwab Fundamental International Large Company Index Fund | |
Schwab Viewpoints Fund offers two share classes: Investor Shares and Select Shares®. Shares of each class represent interest in the same portfolio, but each class has different expenses and investment minimums.
Shares are bought and sold at net asset value, or NAV, which is the price for all outstanding shares. Each share has a par value of 1/1,000 of a cent, and the trustees may authorize the issuance of as many shares as necessary.
Effective May 1, 2006, the Laudus Balanced MarketMasters Fund was renamed the Schwab Viewpoints Fund.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the fund used in the preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America.
(a) Security Valuation:
The fund values the securities in its portfolio every business day. The fund uses the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and asked quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the current exchange rate. | |
• | Securities for which no quoted value is available or when a significant event has occurred between the time of the security’s last close and the time the fund calculates net asset value: valued at fair value, as determined in good faith by the fund’s investment adviser using guidelines adopted by the fund’s Board of Trustees and the Pricing Committee. Some of the more common reasons that may necessitate that a security be valued at fair value include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; or the security’s primary pricing source is not able or willing to provide a price, or certain foreign securities’ closing market values adjusted for changes in value that may occur between the close of a foreign exchange and the time at which the fund’s shares are priced. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. | |
• | Bonds and notes: valued at halfway between the most recent bid and asked quotes or, if such quotes are unavailable, at prices for securities of comparable maturity, credit quality and type. Valuations for bonds and notes are provided by an independent bond-pricing service. |
27
Table of Contents
Schwab Viewpoints Fund
Financial Notes, (continued)
2. Significant Accounting Policies (continued):
• | Futures and forward currency contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a market value based on that day’s exchange rates (for forwards). When a fund closes out a futures or forwards position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly. | |
• | Swap and Swaption (option on Swap) agreements: valued based on a model that utilizes market data, including swap yield curves to calculate prices, or are based on dealer quotes. | |
• | Options: open contracts are valued at their last quoted sale price. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost. | |
• | Mutual funds: valued at their respective net asset values as determined by those funds in accordance with the 1940 Act for a given day. |
(b) Portfolio Investments:
Futures Contract: The fund may invest in futures contracts. Futures contracts involve certain risks because they can be very sensitive to market movements.
One risk is that the price of a futures contract may not move in perfect correlation with the price of the underlying securities. Another risk is that, at certain times, it may be impossible for a fund to close out a position in a futures contract, due to a difference in trading hours or to market conditions that may reduce the liquidity for a futures contract or its underlying securities. The potential for losses associated with futures contracts may exceed amounts recorded in the Statement of Assets and Liabilities.
Because futures contracts carry inherent risks, a fund must give the broker a deposit of cash and/or securities (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another, but it is generally a percentage of the contract amount.
Futures are traded publicly on exchanges, and their market value changes daily. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
Forward Currency Contract: The fund may invest in forward currency contracts in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates. “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. Forwards are similar to futures except that they are not publicly traded, but are agreements directly between two parties.
As with futures, forwards involve certain risks that are not fully reflected in the fund’s financials. If counter-parties to the contracts or if the value of the foreign currency changes unfavorably, the fund could sustain a loss.
Short Sale: The fund may sell securities short (sell securities it does not own). When it does so, the fund also places assets worth at least 100% of the value of the short securities into a segregated account as collateral. If the market value of the short securities subsequently falls, the fund can realize a gain by closing the 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 exceeds amounts recorded in the Statement of Assets and Liabilities.
Repurchase Agreements: The fund may enter into repurchase agreements. In a repurchase agreement, the fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. The date, price and other conditions are all specified when the agreement is created.
The fund’s repurchase agreements will be fully collateralized by U.S. government securities. All collateral is held by the fund’s custodian (or, with tri-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement.
Swap Agreements: The fund may enter into swap agreements. In an interest rate swap, a fund and counterparty agree to swap payments that are based on two different interest rates.
The counterparty is typically a large financial institution, and the terms of the swap are specified in advance. For example, a fund may agree that for six months it will pay the counterparty the equivalent of the interest on a given amount invested at
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Financial Notes, (continued)
2. Significant Accounting Policies (continued):
LIBOR (the London Interbank Offered Rate). In exchange, the counterparty might agree to pay a fund the equivalent of the same amount invested in a certain bond index during this same six month period.
A credit swap or credit default swap is a bilateral financial contract in which one counterparty (the protection buyer) pays a periodic fee, typically expressed in basis points on a notional amount, in return for a contingent payment by the protection seller following a credit event of a reference entity. The definitions of a credit event and the settlement mechanism used to determine the contingent payment are flexible and determined by negotiation between the counterparties at the inception of the transaction.
Swap agreements carry certain risks. Because the net gains or losses stemming from a swap agreement depend on the movements of one rate relative to another, a fund could experience unanticipated losses if one or both rates failed to behave as expected. A fund also could lose money in an interest rate swap or a credit default swap if the counterparty failed to honor the terms of the swap agreement.
Options: The fund is authorized to write options and purchase put and call options. The risk in writing a call option is that the fund gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that the fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in purchasing an option is that a fund pays a premium whether or not the option is exercised. The fund also has the additional risk of being unable to enter into a closing transaction at an acceptable price if a liquid secondary market does not exist.
Delayed-Delivery: The fund may buy securities on a delayed-delivery basis. In these transactions, the fund agrees to buy a security for a stated price, with settlement generally occurring within two weeks. If the security’s value falls before settlement occurs, the fund could end up paying more for the security than its market value at the time of settlement. The fund has set aside sufficient securities as collateral for those securities bought on a delayed-delivery basis.
TBA: The fund may enter into “TBA” (to be announced) purchase commitments to purchase securities for a fixed price at a future date, typically not exceeding 45 days. TBAs may be considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines prior to settlement date.
Mortgage Dollar Roll: The funds may enter into mortgage dollar roll transactions. In these transactions, a fund sells mortgagebacked securities for delivery in the current month and simultaneously agrees to buy back, on a given date in the future, securities of a similar type, coupon rate and maturity. Dollar roll transactions involve the risk that the market value of the security sold short by the fund may decline below the repurchase price of similar securities.
(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. Gains and losses from paydowns on mortgage and asset backed securities are recorded as adjustments to interest income.
If the fund sells securities short, it records the proceeds received as an asset and the obligation to buy back the securities as a liability. At the time a short sale is initiated, the asset and liability are of equal value and effectively cancel each other out. Subsequently, the fund values the liability side of the transaction according to the market price of the securities sold short, and values the asset side according to the value of the proceeds. When the fund closes out a short position (buys the security), it records the outcome as a realized gain or loss. Interest and dividends accrued on securities sold short is recorded as an expense on the fund’s records.
Options purchased are recorded as assets to the extent of premium paid and written options are recorded as liabilities to the extent of premiums received. The fund will realize a gain or loss when the option transaction expires or closes. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of a security for a purchased put or call option is adjusted by the amount of the premium received or paid.
Swap premiums paid are recorded as assets and premiums received are recorded as liabilities. The fund begins recording gains and losses on swaps based on the effective date and terms of the swap agreement. Realized gains and losses are recognized on interest rate swaps at the termination or closing of the agreement on credit default swaps record gains or losses are recognized when a credit event occurs involving the underlying entity.
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Schwab Viewpoints Fund
Financial Notes, (continued)
2. Significant Accounting Policies (continued):
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.
(d) Investment Income:
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.
Interest income is recorded as it accrues. If the fund buys a debt security at a discount (that is, for less than its face value) or a premium (more than face value), it amortizes the discount or premium from the current date up to maturity. The fund then increases (in the case of discounts) or reduces (in the case of premiums) the income it records from the security. If the security is callable (meaning that the issuer has the option to pay it off before its maturity date), then the fund amortizes the premium to the security’s call date and price, rather than the maturity date and price.
(e) Expenses:
Expenses that are specific to a fund or a class within the trust are charged directly to that fund or class. 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 its net assets.
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 its net assets.
(f) Distributions to Shareholders:
The fund makes distributions from net investment income and net realized capital gains once a year.
(g) Custody Credit:
The fund has an arrangement with its custodian bank under which the fund receives a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts (if any) are disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform with accounting principles generally accepted in the United States of America. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates.
(i) Federal Income Taxes:
The fund intends to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the fund distributes substantially all of its net investment income and realized net capital gains (if any) to its respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes.
(j) Indemnification:
Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with their vendors and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown
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Schwab Viewpoints Fund
Financial Notes, (continued)
2. Significant Accounting Policies (continued):
as this would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss to be remote.
(k) New Accounting Standards:
Financial Accounting Standards Board Interpretation (FIN) No. 48 — Accounting for Uncertainty in Income Taxes — an Interpretation of SFAS No. 109, was issued in July 2006 and is effective for fiscal years beginning after December 15, 2006. This Interpretation provides new requirements for the recognition, measurement, and disclosure in the financial statements of a tax position taken or expected to be taken in a tax return when there is uncertainty about whether that tax position will ultimately be sustained. A fund with a fiscal year ending October 31 will implement FIN 48 no later than April 30, 2008, and it will apply to all open tax years.
Management is currently evaluating the impact of adopting FIN 48, and at this time, believes that the adoption will have no material impact on the fund’s financial statements.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.
Management is currently evaluating the impact of adopting SFAS No. 157 on the fund’s financial statements.
3. | Affiliates and Affiliated Transactions: |
(All dollar amounts are x 1,000)
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 it and the trust.
For its advisory and administrative services to the fund, the investment adviser is entitled to receive an annual fee payable monthly based on the fund’s average daily net assets described as follows:
Average daily net assets | ||||
First $500 million | 0.775% | |||
$500 million to $1 billion | 0.75% | |||
Over $1 billion | 0.725% |
Charles Schwab & Co., Inc. (“Schwab”) is an affiliate of the investment adviser and is the trust’s transfer agent and shareholder services agent.
For its transfer agent and shareholder services, Schwab is entitled to receive an annual fee payable monthly based on the fund’s average daily net assets described as follows:
Transfer Agent Fees | Shareholder Service Fees | |||||||
Investor Shares | 0.05% | 0.20% | ||||||
Select Shares | 0.05% | 0.15% |
Although these agreements specify certain fees for these services, CSIM and Schwab have made additional agreements with the fund to limit the total expenses charged, excluding interest, taxes and certain non-routine expenses through February 27, 2008, as follows:
Investor Shares | 1.10% | |||
Select Shares | 0.95% |
The fund may make direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and officers. As of October 31, 2007, Schwab Viewpoints Fund’s total security transactions with other Schwab Funds was $107.
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Schwab Viewpoints Fund
Financial Notes, (continued)
3. | Affiliates and Affiliated Transactions (continued): (All dollar amounts are x 1,000) |
Pursuant to an exemptive order issued by the SEC, the fund may enter into interfund borrowing and lending transactions within the Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. There was no interfund borrowing or lending activity for the fund during the period.
Trustees
Trustees may include people who are officers and / or directors of the investment adviser or Schwab. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these persons for their service as trustees, but it did pay non-interested persons (independent trustees), as noted in the fund’s Statement of Operations.
4. | Borrowing from Banks: |
The funds may borrow money from banks and custodians. The funds may obtain temporary bank loans through the trusts to which they belong, to use for meeting shareholder redemptions or for extraordinary or emergency purposes. The Schwab Funds have custodian overdraft facilities and an uncommitted line of credit arrangements of $150 million and $100 million with State Street Corporation, and Bank of America, N.A., respectively. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. There were no borrowings from the line of credit for the fund during the period.
5. | Purchases and Sales of Investment Securities: |
(All dollar amounts are x 1,000)
For the fiscal year ended October 31, 2007, purchases and sales of securities (excluding short-term obligations, government securities and securities sold short) were as follows:
Purchases of | Sales/Maturities | |||||
Securities | of Securities | |||||
$64,749 | $84,359 |
For the fiscal year ended October 31, 2007, purchases and sales of long-term government security transactions were as follows:
Purchases of | Sales/Maturities | |||||
Securities | of Securities | |||||
$292,387 | $282,133 |
6. | Options Written: |
(All dollar amounts are x 1,000)
For the fiscal year ended October 31, 2007, the fund’s swaptions and option activity was as follows:
Options Written | Number of Contracts | Premiums | ||||||
Beginning of Period | 6 | $44 | ||||||
Options Written | 15 | 277 | ||||||
Options Closed | (7 | ) | (35 | ) | ||||
Options Expired | (1 | ) | (9 | ) | ||||
Options Exercised | — | — | ||||||
End of Period | 13 | $277 |
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Schwab Viewpoints Fund
Financial Notes, (continued)
7. | Redemption Fee: |
(All dollar amounts are x 1,000)
The fund may impose a short-term redemption fee on any fund shares that are redeemed or exchanged by a shareholder within a specified number of days of the purchase date. The fund charges 2.00% of early withdrawal fees on shares redeemed or exchanged 30 days or less after the purchase. Such amounts are net of the redemption fee proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior fiscal year are:
Current Period | Prior Period | |||||||
(11/01/06-10/31/07) | (11/01/05-10/31/06) | |||||||
Investor Shares | $6 | $4 | ||||||
Select Shares | — | — |
8. | Federal Income Taxes: |
(All dollar amounts are x 1,000)
As of October 31, 2007, the components of distributable earnings on a tax-basis were as follows:
Undistributed ordinary income | $3,456 | |||
Undistributed long-term capital gains | 5,564 | |||
Unrealized appreciation | 16,880 | |||
Unrealized depreciation | (3,769 | ) | ||
Other unrealized appreciation / (depreciation) | 177 | |||
Net unrealized appreciation / (depreciation) | 13,288 | |||
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 carry forwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2007, the fund had no capital loss carry forwards.
For tax purposes, realized net capital losses occurring after October 31, may be deferred and treated as occurring on the first day of the following fiscal year. As of October 31, 2007, the fund had no aggregate deferred realized net capital losses.
The tax-basis components of distributions paid during the current and prior fiscal years were:
Current Period | Prior Period | |||||||
Ordinary income | $2,651 | $1,732 | ||||||
Long-term capital gains | 6,685 | 4,013 | ||||||
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 investment in non-U.S. securities: paydowns on fixed-income 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.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2007, the fund made the following reclassifications:
Capital Shares | $— | |||
Undistributed net investment income | 24 | |||
Net realized capital gains and losses | (24 | ) |
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Viewpoints Fund
Schwab Viewpoints 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 Viewpoints Fund (one of the portfolios constituting Schwab Capital Trust, hereafter referred to as the ‘Fund‘) at October 31, 2007, 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 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 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 at October 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 13, 2007
San Francisco, California
December 13, 2007
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Other Federal Tax Information (unaudited):
(All dollar amounts are x 1,000)
For corporate shareholders, 49.90% percentage of the fund’s dividend distributions paid during the fiscal year ended October 31, 2007, qualify for the corporate dividends received deduction.
For the fiscal year ended October 31, 2007, the fund designates $1,710 of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2008 via IRS form 1099 of the amounts for use in preparing their 2007 income tax return.
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The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreements must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreements or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreements. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
Consistent with these responsibilities, 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 (the “Trust”) and CSIM (the “Agreement”) with respect to existing funds in the Trust, including the fund covered in this annual report, and the individual sub-advisory agreements between CSIM and Gardner Lewis Asset Management L.P., Harris Associates L.P., Pacific Investment Management Company LLC and TCW Investment Management Company (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 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 memo regarding the responsibilities of trustees for the approval of investment advisory contracts. 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 and the Sub-Advisers, as appropriate. The Board also discusses with CSIM the fund’s operations and CSIM’s ability, consistent with the “manager of managers” structure of the fund to (i) identify and recommend to the trustees sub-advisers for the 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.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreements at meetings held on May 2, 2007, and June 5, 2007, and approved the renewal of the Agreements for an additional one year term at the meeting held on June 5, 2007. The Board’s approval of the Agreements 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 Agreements, including the resources of CSIM and its affiliates, and the Sub-Advisers, dedicated to the fund; |
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 fund grows 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 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 information considered by the Trustees included specific information concerning changes in the nature, extent and quality of services provided by CSIM since the Trustees had last considered approval of the Agreements. The Trustees also considered investments in CSIM’s mutual fund infrastructure and the fact that Schwab’s wide range of products, services, and channel alternatives such as free advice,
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investment and research tools, Internet access, and an array of account features that benefit the fund and its shareholders. The Trustees also considered CSIM’s top three ranking in an independent survey regarding mutual fund client loyalty, Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. In addition, the Trustees considered that many of the fund’s 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 fund and the resources each dedicates to the fund. In this regard, the Trustees evaluated among other things, each Sub-Adviser’s personnel, experience and compliance program. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM and the Sub-Advisers to the fund and the resources of CSIM, and its affiliates, and the Sub-Advisers dedicated to the fund supported renewal of the Agreements.
Fund Performance. The Board considered fund performance in determining whether to renew the Agreements. Specifically, the Trustees considered each fund’s performance relative to a peer group and peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, yield, when applicable, and market trends. As part of this review, the Trustees considered the composition of the peer group and peer category, selection criteria and the reputation of the third party who prepared the peer group and 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 profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the fund supported renewal of the Agreements.
Fund Expenses. With respect to the fund’s 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 other comparable 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 fees charged by CSIM and the Sub-Advisers to other similarly managed mutual funds and to other types of accounts, such as separate accounts, pooled vehicles, and wrap accounts, 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 fund are reasonable and supported renewal of the Agreements.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly and the compensation flowing to the Sub-Advisers, 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 and the Sub-Advisers from their relationship with the fund, such as whether, by virtue of its management of the fund, CSIM or any Sub-Adviser 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 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 fund, although, when doing so, the Board took into account the fact that the Sub-Advisers are compensated by CSIM, and not by the fund directly, and such compensation with respect to any Sub-Adviser reflects an arms-length negotiation between the Sub-Adviser and CSIM. The Board also considered information relating to changes to CSIM’s business operations and how these changes affected CSIM’s profitability under the Agreements. 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.
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 previously 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
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such funds at subsidized expense levels. The Trustees also considered existing contractual investment advisory fee schedules that include lower fees at higher graduated asset levels. The Board also considered certain existing commitments by CSIM and Schwab that are designed to pass along potential economies of scale to fund shareholders. 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, unanimously approved the continuation of the Agreements and concluded that the compensation under the Agreements 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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The tables below give information as of October 31, 2007, about the trustees and officers for The 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, and Laudus Trust. As of October 31, 2007, the Fund Complex included 70 funds.
The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Board 1—Director, Redwood Trust, Inc. Board 2—Director, PMI Group, Inc. | |||||
Donald F. Dorward 1931 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chief Executive Officer, Dorward & Associates (corporate management, marketing and communications consulting firm). From 1996-1999, Executive Vice President and Managing Director, Grey Advertising. Prior to 1996, President and Chief Executive Officer, Allen & Dorward Advertising. | 60 | None. | |||||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley. Until February 2004, Co-Chief Executive Officer, Aphton Corp. (bio-pharmaceuticals). | 70 | Board 1—Director, Mission West Properties Board 2—Director, TOUSA Board 3—Director, Harris-Stratex Networks Board 4—Director, Genitope Corp. Board 5—Director & Non-Executive Chairman, Solectron Corp. Board 6—Director, Ditech Networks | |||||
Robert G. Holmes 1931 (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, Semloh Financial, Inc. (international financial services and investment advisory firm). | 60 | None. | |||||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and founder of Smith Graham & Co.(investment advisors). | 60 | Board 1—Board of Cooper Industries Board 2—Chairman of the Audit Committee of Oneok Partners LP | |||||
Donald R. Stephens 1938 Trustee (Trustee of Schwab Capital Trust since 1989.) | Managing Partner, D. R. Stephens & Company (investments). | 60 | None. | |||||
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Independent Trustees continued | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Michael W. Wilsey 1943 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer, Wilsey Bennett, Inc. (real estate investment and management, and other investments). | 60 | None. | |||||
Interested Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served ) | Past Five Years | the Trustee | Other Directorships | |||||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc.; Chairman and Director, Charles 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 and Director, Schwab Holdings, Inc. Through June 2007, Director, U.S. Trust Company, N.A., U.S. Trust Company of New York. Until May 2003, Co-Chief Executive Officer, The Charles Schwab Corporation. | 60 | None | |||||
Randall W. Merk2 1954 Trustee (Trustee of Schwab Capital Trust since 2005.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | 70 | None. | |||||
40
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Officers of the Trust | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Randall W. Merk 1954 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2007.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer, Charles Schwab Investment Management, Inc.; Chief Financial Officer, Laudus Trust and Laudus Variable Insurance Trust; Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited. Through June 2007, Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust; Chief Financial Officer, Mutual Fund Division, UST Advisors, Inc. From December 1999 to November 2004, Sr. Vice President, Financial Reporting, Charles Schwab & Co. Inc. | |
Kimon Daifotis 1959 Senior Vice President and Chief Investment Officer-Fixed Income (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Fixed Income, Charles Schwab Investment Management, Inc. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Jeffrey Mortimer 1963 Senior Vice President and Chief Investment Officer-Equities (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Equities, Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer, Laudus Trust and Laudus Variable Insurance Trust. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Randall Fillmore 1960 Chief Compliance Officer and AML Officer (Officer of Schwab Capital Trust since 2002.) | Senior Vice President and Chief Compliance Officer, Charles Schwab Investment Management, Inc.; Senior Vice President, Charles Schwab & Co. Inc.; Chief Compliance Officer, Laudus Trust and Laudus Variable Insurance Trust. Through June 2007, Chief Compliance Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust. From 2002 to 2003, Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc. | |
Koji E. Felton 1959 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 1998.) | Senior Vice President, Chief Counsel and Corporate Secretary, Charles Schwab Investment Management, Inc.; Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. Through June 2007, Chief Legal Officer, Excelsior Funds Inc., Excelsior Tax Exempt Funds, Inc. and Excelsior Funds Trust. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust; since 2006, Chief Counsel, Laudus Trust and Variable Insurance Trust. Until July 2005, Senior Associate, Paul Hastings Janofsky & Walker LLP. | |
Cathy Sabo 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President-Compliance, Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust. Until 2004, Vice President, Client, Sales & Services Controls, Charles Schwab & Co., Inc. | |
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Officers of the Trust continued | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Michael Haydel 1970 Vice President (Officer of Schwab Capital Trust since 2006.) | Vice President, Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President and AML Officer, Laudus Trust and Laudus Variable Insurance Trust. Until March 2004, Director Charles Schwab & Co., Inc. | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after 20 years of service as a trustee, whichever comes first. Independent trustees elected prior to January 1, 2000 will retire on the following schedule: Messrs. Holmes and Dorward will retire on December 31, 2007, and Messrs. Stephens and Wilsey will retire on December 31, 2010. |
2 | In addition to their employment with the investment advisor and the distributor, Messrs. Schwab and Merk also own stock of The Charles Schwab Corporation. Mr. Schwab and Mr. Merk are Interested Trustees because they are employees of Schwab and/or the advisor. |
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 other officer serves at the pleasure of the Board. |
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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.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500T). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the “coupon rate”) until a specified date (the “maturity date”), at which time the issuer returns the money borrowed (“principal” or “face value”) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
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.
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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Table of Contents
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 Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting Schwab’s website at www.schwab.com/schwabfunds, the SEC’s website at 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 Schwab’s website at www.schwab.com/schwabfunds or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fundtm
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 Technology Fundtm
Schwab Fundamental US Large Company Index Fundtm
Schwab Fundamental US Small-Mid Company Index Fundtm
Schwab Fundamental International Large Company Index Fundtm
Schwab Global Real Estate Fundtm
Schwab Institutional Select® S&P 500 Fund
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 Viewpoints Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
Bond Funds
Schwab YieldPlus Fund®
Schwab Short-Term Bond Market Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab Inflation Protected Fundtm
Schwab Tax-Free YieldPlus Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free YieldPlus Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity.1 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
Investment Adviser
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
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.
© 2006 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC
Printed on recycled paper.
MFR36112-01
Table of Contents
Table of Contents
Table of Contents
Annual report dated October 31, 2007 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 Technology Fundtm
You could have received this
document faster via email.
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This wrapper is not part of the shareholder reports.
Schwab Target Funds
A suite of funds designed to help keep your retirement investments properly allocated over your lifetime.
• | Schwab Target 2010 Fund |
• | Schwab Target 2020 Fund |
• | Schwab Target 2030 Fund |
• | Schwab Target 2040 Fund |
• | Schwab Retirement Income Fund |
Schwab Target Funds are designed to help you avoid a common investing pitfall: failing to adjust your portfolio over time. Four of the funds are actively managed to reallocate your assets as you approach retirement, and one is designed to help produce income after you’ve retired.
The funds are designed to focus on asset allocation, helping you participate in market growth while helping to manage the impact of economic downturns. Whether you’re concerned with building capital or preserving your nest egg and generating income, there’s likely a Schwab Target Fund that’s right for your retirement goals.
Each Schwab Target Fund invests in a diversified combination of funds that deliver professional management, asset allocation and ongoing adjustments over time — all in a single investment. That makes the funds particularly attractive if you don’t have the time or interest to actively manage your portfolio.
Invest in the fund closest to your retirement date for asset allocation that matches your goals. To learn more about Schwab Target Funds log on to www.schwab.com/target.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800 435-4000. Please read the prospectus carefully before investing.
Investment value and return will fluctuate such that shares, when redeemed, may be worth more or less than original cost.
Charles Schwab & Co., Inc. Member SIPC
MKT32213 (02/07) © 2006 All Rights Reserved
MKT32213 (02/07) © 2006 All Rights Reserved
Table of Contents
Schwab Active Equity Funds
Annual Report
October 31, 2007
Schwab Premier Equity Fund®
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab Technology Fundtm
The power of Schwab Equity Ratings®.
The convenience and diversification of mutual funds.
In This Report | ||
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8 | ||
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Select Shares® are available on many Schwab Funds®
Schwab Funds offers Select Shares, a share class that carries lower expenses than Investor Sharestm in exchange for higher investment minimums on many of its funds. Select Shares are available for initial purchases of $50,000 or more of a single fund in a single account and for shareholders who add to their existing Investor Share position, bringing the value to or above $50,000. We encourage shareholders of Investor Shares to review their portfolio to see if they are eligible to exchange into Select Shares. If you believe you are eligible, you should contact Schwab or your financial intermediary to request a tax-free interclass exchange into Select Shares. Instructions for performing a tax-free interclass exchange can also be referenced on the Schwab Funds website at www.schwab.com/schwabfunds under Schwab Funds Investor Information. Select Shares may not be available through financial intermediaries other than Charles Schwab & Co., Inc.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).The industry/sector classification of the funds’ portfolio holdings uses the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).The industry/sector classification of the funds’ portfolio holdings uses the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.
Table of Contents
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.schwab.com/schwabfunds.
Total Return for | ||
the Report Period | ||
Schwab Premier Equity Fund® | ||
Investor Shares (Ticker Symbol: SWPNX) | 11.89% | |
Select Shares® (Ticker Symbol: SWPSX) | 12.20% | |
Benchmark: S&P 500® Index | 14.56% | |
Fund Category: Morningstar Large-Cap Blend | 15.22% | |
Performance Details | pages 6-7 | |
Schwab Core Equity Fundtm | ||
(Ticker Symbol: SWANX) | 13.88% | |
Benchmark: S&P 500® Index | 14.56% | |
Fund Category: Morningstar Large-Cap Blend | 15.22% | |
Performance Details | pages 8-9 | |
Schwab Dividend Equity Fundtm | ||
Investor Shares (Ticker Symbol: SWDIX) | 11.43% | |
Select Shares® (Ticker Symbol: SWDSX) | 11.55% | |
Benchmark: S&P 500® Index | 14.56% | |
Fund Category: Morningstar Large-Cap Value | 11.75% | |
Performance Details | pages 10-11 | |
Schwab Large-Cap Growth Fundtm | ||
Investor Shares (Ticker Symbol: SWLNX) | 15.32% | |
Select Shares® (Ticker Symbol: SWLSX) | 15.47% | |
Benchmark: Russell 1000 Growth Index | 19.23% | |
Fund Category: Morningstar Large-Cap Growth | 21.54% | |
Performance Details | pages 12-13 | |
Schwab Small-Cap Equity Fundtm | ||
Investor Shares (Ticker Symbol: SWSIX) | 2.59% | |
Select Shares® (Ticker Symbol: SWSCX) | 2.80% | |
Benchmark: S&P SmallCap 600 Index | 11.55% | |
Fund Category: Morningstar Small-Cap Blend | 10.32% | |
Performance Details | pages 14-15 | |
Schwab Hedged Equity Fundtm | ||
Investor Shares (Ticker Symbol: SWHIX) | 2.87%* | |
Select Shares® (Ticker Symbol: SWHEX) | 3.05%* | |
Benchmark: S&P 500® Index | 14.56% | |
Fund Category: Morningstar Long-Short | 7.48% | |
Performance Details | pages 16-17 | |
Schwab Financial Services Fundtm | ||
(Ticker Symbol: SWFFX) | 2.81%* | |
Benchmark: S&P 1500 SuperComposite Financials Sector Index | -2.83% | |
Fund Category: Morningstar Financial Services | 2.09% | |
Performance Details | pages 18-19 | |
Schwab Health Care Fundtm | ||
(Ticker Symbol: SWHFX) | 14.49% | |
Benchmark: S&P 1500 SuperComposite Health Care Sector Index | 11.12% | |
Fund Category: Morningstar Health Care | 12.85% | |
Performance Details | pages 20-21 | |
Schwab Technology Fundtm | ||
(Ticker Symbol: SWTFX) | 15.50% | |
Benchmark: S&P 1500 SuperComposite Technology Sector Index | 26.20% | |
Fund Category: Morningstar Technology | 28.95% | |
Performance Details | pages 22-23 | |
Minimum Initial Investment1 | ||
Investor Shares | $ 100 | |
Select Shares | $ 50,000 | |
All fund and index figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc.
* | One year return presented in the table differs from the return in the Financial Highlights. This is a result of the calculation of the Financial Highlights return adhering to GAAP presentation. |
1 | Please see prospectus for further detail and eligibility requirements. |
Schwab Active Equity Funds 1
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From the Chairman
Charles Schwab
Chairman
Dear Shareholder,
I have been a fan of mutual funds throughout my long investing career. I say this because I firmly believe they are a cost-effective and convenient way for investors to achieve a diversified portfolio. And, as we face increasing uncertainty in global markets, diversification is as important now as it has ever been.
Research has indicated that spreading your money across, and equally important, within, different asset classes, such as stocks, bonds, and cash equivalents, can be the most important factor in determining overall portfolio performance. By maintaining diversification, your portfolio can be better positioned to help you weather the market ups and downs.
With a broad range of investment strategies and styles, Schwab Funds® provides an uncomplicated, effective way to build a well diversified portfolio. You can choose from an array of funds across a range of investment objectives and styles. If you prefer a single investment solution, we offer asset allocation funds based on either risk tolerance or time horizon.
Here at Schwab, our goal is to help you reach your financial goals. With quality funds and services, backed by the guidance and support you need—whatever type of investor you are—we can help you be financially fit today and in the future.
Thank you for investing with us.
Sincerely,
2 Schwab Active Equity Funds
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From the President
Randall W. Merk is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report. He joined the firm in 2002 and has held a variety of executive positions at Schwab.
Dear Shareholder,
In returning to my role as President and CEO of Charles Schwab Investment Management, I would like to thank you for investing in Schwab Funds® and share my thoughts with you on the current market environment.
The reemergence of volatility during this past year has shaken financial markets, both domestically and globally. Subprime mortgage market issues have caused a chain reaction throughout equity and credit markets, and investors are undoubtedly concerned about their financial outlook in the near future. As riskier securities came under pressure during this past August’s market correction, investors fled to “safer haven” investments, such as U.S. Treasuries.
Attempting to time the market in this way can be both a frustrating and risky experience. We have always believed your best protection against swings in market volatility is to maintain a well-diversified investment portfolio that is built to provide long-term performance.
Thank you for entrusting us with your investments. I speak for all of us at Schwab when I say our goal is to give you the financial products, guidance, and personal relationship you need to be financially fit.
Sincerely,
Schwab Active Equity Funds 3
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The Investment Environment
Jeffrey Mortimer, CFA, a senior vice president and chief investment officer, equities, has overall responsibility for the management of the funds.
During the past year, the global economy benefited from positive earnings growth, an ample supply of liquidity, and reasonably low volatility. Investors became increasingly bullish, and firms financed a record level of private equity buyouts, acquisitions, and stock buybacks. However, the housing market correction, and more recently, turmoil in the subprime mortgage market, has had a ripple effect throughout the U.S. and global economy. Several key issues continued to resonate with investors, including the deterioration of the housing market, the lagged effects of monetary policy, tightening of lending standards, and rising energy prices.
The U.S. economy grew at a sub-par pace during the early part of the report period, consistent with the Federal Reserve’s (the Fed’s) engineered soft landing. Throughout its statements, the Fed noted that the economy would grow at a more moderate rate as a result of prior rate increases, lagged effects of higher energy prices, and a cooling housing market. As any rate below 3% is generally considered to be sub-par, the economy appeared to be on a trend of underperformance. However, Gross Domestic Product (GDP) in the second and third quarter of 2007 surprised on the upside; 3.8% and an advanced 3.9%, respectively. Though consumer spending weighed heavily in recent improved GDP readings, tightening credit conditions and continued deterioration in the U.S. housing market remained imminent threats to household equity, a meaningful underpinning of consumer spending.
The housing market remained a significant headwind for U.S. economic growth during the report period. New- and existing-home sales trended downward, and inventories reached an alarming 10.5-month supply (existing homes) by September 2007. Initial concerns that troubles in the housing market would spill over to the rest of the economy became more pronounced, as declining housing starts and home sales caused builders and mortgage lenders to layoff thousands of employees. Delinquency rates on subprime mortgages and foreclosures on residential homes continued on an upward trend as well, further pushing back a recovery in an already weakened market.
The recent tightening of lending standards had a detrimental effect on economic growth as well. Though subprime mortgages were able to find their way into securitized structures via relaxed access to credit and ample liquidity, the increased frequency of defaults by subprime borrowers stressed securities holding these mortgages, leading to wider spreads and higher risk. Evidence that subprime issues had emerged became more pronounced after February’s spike in volatility, which only compounded throughout the report period. Liquidity in the market for these riskier securities essentially dried up after this recent summer’s market
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
14.56% | S&P 500® Index: measures U.S. large-cap stocks |
9.27% | Russell 2000® Index: measures U.S. small-cap stocks |
24.91% | MSCI-EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East |
5.38% | Lehman Brothers U.S. Aggregate Bond Index: measures the U.S. bond market |
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Charles Schwab & Co., Inc.
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The Investment Environment continued
correction, putting financial institutions laden with subprime debt into financial turmoil. While the Fed helped improve liquidity issues at first by pumping money into the banking system and using the discount rate to reduce rates, many lenders reduced or cancelled altogether certain subprime lending programs.
Market volatility also had a significant impact on quantitative strategies in July and August of 2007. In a recent report by Lehman Brothers, it is believed that several large multi-strategy managers experienced significant losses in their fixed income portfolios. In order to raise cash to cover potential redemptions, and hesitant to price their now lower-valued portfolios, money managers sold their most liquid holdings in the U.S. equity market. As trades came into the market, the adverse effect that followed was that long positions declined and short positions rallied. The end result was that billions of dollars were turned over during this “quant squeeze,” leading to wider spreads and volatility in market prices.
The timing of recent turmoil in the financial markets partially stems from the fact that monetary policy typically acts with a lagged effect on the broader economy. While generally accepted that the effects of Fed rate hikes have a lag of between three and 18 months, it’s also believed that most of the effects can be seen around the twelfth month. Working back from February 2007’s correction in global markets, the Fed funds target rate was 4.25%, yet the Fed didn’t stop raising rates until June 2006, when it finally reached 5.25%. The 12-month lag, therefore, would indicate that subsequent rate hikes were finally hitting the market, as we saw during the recent summer months.
The Fed held its target for the Fed funds rate for most of the period at 5.25%. However, as conditions in the market progressively worsened, the Fed cut twice, bringing the target rate down to 4.50% by the end of the report period. Although it noted recent economic growth was solid and conditions in financial markets were markedly improved, it also expressed its concern that conditions in the housing market could hinder the economic expansion in the near term.
Against this backdrop of economic data, the market priced in future Fed rate cuts. The housing market showed little to no sign that a bottom is anywhere in the near future, labor markets faced continued downward pressures, and energy prices remained elevated. Oil reached all time highs over the year, closing out just above $96 a barrel as of the end of the report period. While the tax-like effect of higher energy prices, declining equity values in residential real estate, and the lag effect of monetary policy remained significant headwinds for the U.S. economy, the Fed’s recent response to a volatile market eased investor concern toward the end of the period.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Active Equity Funds 5
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Schwab Premier Equity Fund®
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-today co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Premier Equity Fund Investor Shares returned 11.89% for the report period, underperforming its benchmark, the S&P 500 Index, which was up 14.56%. Industry group weights positively contributed to performance; an overweight to Materials and underweight to Banks offset losses from an underweight to Energy, which performed well. Better performing stocks included MEMC Electronic Materials, Inc., Expedia, Inc. and McDermott International, Inc. Stock selection on whole was negative, however, as several tech names, such as Network Appliance, Inc. and BEA Systems, Inc. suffered setbacks. From a size perspective, the fund was also hurt due to its smaller-than-benchmark positions because large-cap stocks outperformed their smaller counterparts. The fund’s emphasis towards value-oriented companies relative to the S&P 500 partially explained the underperformance. Additionally, the fund’s emphasis on higher-rated stocks, as measured by Schwab Equity Ratings, detracted from performance, as lower-rated stocks outperformed their higher-rated counterparts during the report period.
As of 10/31/07:
Statistics
Number of Holdings | 106 |
Weighted Average
Market Cap
($ x 1,000,000) | $46,463 |
Price/Earnings Ratio (P/E) | 17.5 |
Price/Book Ratio (P/B) | 3.0 |
Portfolio Turnover Rate | 72% |
Sector Weightings % of Investments
Information Technology | 16.6% |
Financials | 16.4% |
Industrials | 13.6% |
Health Care | 13.0% |
Consumer Discretionary | 9.8% |
Energy | 9.1% |
Consumer Staples | 8.1% |
Materials | 5.2% |
Telecommunication Services | 3.8% |
Utilities | 3.5% |
Other | 0.9% |
Total | 100.0% |
Top Holdings % Net Assets1
AGCO Corp. | 1.5% |
Exxon Mobil Corp. | 1.4% |
Expedia, Inc. | 1.4% |
Merck & Co. Inc. | 1.4% |
McKesson Corp. | 1.4% |
Hewlett-Packard Co. | 1.4% |
Lockheed Martin Corp. | 1.4% |
The Coca-Cola Co. | 1.4% |
Albemarle Corp. | 1.3% |
Occidental Petroleum Corp. | 1.3% |
Total | 13.9% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
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Schwab Premier Equity Fund®
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | Since Inception | ||||||
Investor Shares (3/21/05) | 11.89% | 13.83% | ||||||
Select Shares (3/21/05) | 12.20% | 14.01% | ||||||
Benchmark: S&P 500® Index | 14.56% | 12.67% | ||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 12.69% |
Fund Expense Ratios3: Investor Shares: 1.18% / Select Shares: 1.03%
Style Assessment4
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. |
4 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
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Schwab Core Equity Fundtm
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-today co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA managing director and portfolio manager is responsible for the day-to-day co-management of the fund.
The Schwab Core Equity Fund returned 13.88% for the report period, underperforming its benchmark the S&P 500 Index, which returned 14.56%. Industry group weights positively contributed to performance; overweights to Materials and Tech Hardware and Equipment and an underweight to Banks helped offset losses from an underweight to rallying Energy stocks. Better performing securities included Hewlett-Packard Co., Lockheed Martin Corp., and International Business Machines Corp. On the whole, however, stock selection was negative. Positions in The McGraw-Hill Cos., Inc., Qwest Communications International, Inc. and Electronic Data Systems Corp. detracted from performance. From a size perspective, the fund’s smaller-than-benchmark positions detracted from performance, as large-cap stocks outperformed their smaller counterparts. Further, the fund’s underweight to Microsoft Corp. and lack of exposure to General Electric Co. detracted from performance, as these securities experienced positive returns for the report period and are large holdings in the S&P 500 Index, the fund’s benchmark.
As of 10/31/07:
Statistics
Number of Holdings | 113 |
Weighted Average
Market Cap
($ x 1,000,000) | $82,017 |
Price/Earnings Ratio (P/E) | 16.4 |
Price/Book Ratio (P/B) | 3.0 |
Portfolio Turnover | 18% |
Sector Weightings % of Investments
Financials | 21.7% |
Information Technology | 18.0% |
Health Care | 16.4% |
Industrials | 13.9% |
Energy | 8.0% |
Consumer Discretionary | 7.0% |
Consumer Staples | 4.3% |
Materials | 3.7% |
Utilities | 3.1% |
Telecommunication Services | 3.0% |
Other | 0.9% |
Total | 100.0% |
Top Holdings % Net Assets1
JPMorgan Chase & Co. | 4.9% |
International Business Machines
Corp. | 4.8% |
The Boeing Co. | 4.4% |
Pfizer, Inc. | 4.2% |
Hewlett-Packard Co. | 4.2% |
Exxon Mobil Corp. | 3.6% |
Lockheed Martin Corp. | 3.5% |
Raytheon Co. | 3.5% |
MetLife, Inc. | 2.7% |
Merck & Co., Inc. | 2.6% |
Total | 38.4% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
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Schwab Core Equity Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1
$10,000 Investment1
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Fund: Schwab Core Equity Fundtm (7/1/96) | 13.88% | 14.71% | 8.09% | |||||||||
Benchmark: S&P 500®Index | 14.56% | 13.87% | 7.10% | |||||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 13.63% | 6.87% |
Fund Expense Ratios3: Net 0.75%; Gross 0.81%
Style Assessment4
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
4 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
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Schwab Dividend Equity Fundtm
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Dividend Equity Fund Investor Shares returned 11.43% for the report period, underperforming its benchmark, the S&P 500 Index, which returned 14.56%. The fund is designed to seek current income and capital appreciation by primarily investing in dividend-paying stocks. For the period, non-dividend paying stocks outperformed, as the general upswing in the markets created a difficult environment for dividend-paying stocks. Industry group weights positively contributed to performance, as an overweight to Materials and an underweight to Retailers offset losses from an underweight in rallying Energy stocks. From a size perspective, the fund’s smaller-than-benchmark focus detracted from performance, as large-cap stocks outperformed their smaller counterparts. In addition, growth stocks rebounded during the quarter, costing the fund as its value and dividend focus hurt performance. Stock selection was slightly negative, as gains in Lockheed Martin Corp. and AT&T Corp. were offset by losses in several Bank names, in particular National City Corp. and Regions Financial Corp. The fund’s performance relative to a more growth-oriented benchmark, such as the S&P 500, was also weighed down by not holding General Electric Co. or Apple Computer, Inc. which both posted positive returns for the period.
As of 10/31/07:
Statistics
Number of Holdings | 117 |
Weighted Average
Market Cap
($ x 1,000,000) | $67,995 |
Price/Earnings Ratio (P/E) | 15.9 |
Price/Book Ratio (P/B) | 2.7 |
Portfolio Turnover | 18% |
Sector Weightings % of Investments
Financials | 17.4% |
Consumer Staples | 14.1% |
Industrials | 12.3% |
Health Care | 11.7% |
Utilities | 9.9% |
Information Technology | 9.3% |
Energy | 8.1% |
Materials | 7.4% |
Telecommunication Services | 5.6% |
Consumer Discretionary | 3.9% |
Other | 0.3% |
Total | 100.0% |
Top Holdings % Net Assets1
AT&T, Inc. | 2.5% |
Bank of New York Mellon Corp. | 2.1% |
Lockheed Martin Corp. | 1.7% |
Microsoft Corp. | 1.7% |
Chevron Corp. | 1.6% |
Merck & Co. Inc. | 1.6% |
Bank of America Corp. | 1.6% |
JPMorgan Chase & Co. | 1.5% |
Raytheon Co. | 1.4% |
Kimberly-Clark Corp. | 1.4% |
Total | 17.1% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
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Schwab Dividend Equity Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 3 Years | Since Inception | |||||||||
Investor Shares (9/2/03) | 11.43% | 12.97% | 14.94% | |||||||||
Select Shares (9/2/03) | 11.55% | 13.14% | 15.09% | |||||||||
Benchmark: S&P 500®Index | 14.56% | 13.16% | 12.86% | |||||||||
Fund Category: Morningstar Large-Cap Value | 11.75% | 13.32% | 13.75% |
Fund Expense Ratios3: Investor Shares: 1.05% / Select Shares: 0.90%
Style Assessment4
Yields1
SEC Yield | ||||
Investor Shares | 1.62% | |||
Select Shares | 1.77% | |||
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. |
4 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
Schwab Active Equity Funds 11
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Schwab Large-Cap Growth Fundtm
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Large-Cap Growth Fund Investor Shares returned 15.32% for the report period, underperforming its benchmark, the Russell 1000 Growth Index, which was up 19.23%. From a size perspective, the fund’s smaller-than-benchmark stocks detracted from returns. Although growth stocks outperformed value stocks, the fund’s slight tilt away from companies with high expectations for future growth held back returns versus its peers and the benchmark. In terms of industry group selection, overall weightings contributed positively; the fund benefited from an overweight in Materials, as well as an underweight in both the Retailing and Food and Staples relative to its benchmark. Better performing securities included Celanese Corp., Hewlett-Packard Co., and International Business Machines Corp. However, stock selection on whole was negative and hurt the fund’s performance relative to the benchmark. Securities suffering setbacks included such names as Moody’s Corp. and Sears Holdings Corp. Additionally, the fund’s underweight to Apple Computer, Inc. and Microsoft Corp. detracted from performance, as both companies experienced positive returns.
As of 10/31/07:
Statistics
Number of Holdings | 109 |
Weighted Average
Market Cap
($ x 1,000,000) | $71,328 |
Price/Earnings Ratio (P/E) | 19.6 |
Price/Book Ratio (P/B) | 4.5 |
Portfolio Turnover | 30% |
Sector Weightings % of Investments
Information Technology | 27.7% |
Health Care | 18.4% |
Industrials | 12.1% |
Financials | 10.0% |
Materials | 8.0% |
Consumer Discretionary | 7.5% |
Energy | 6.7% |
Consumer Staples | 5.5% |
Utilities | 3.0% |
Telecommunication Services | 0.5% |
Other | 0.6% |
Total | 100.0% |
Top Holdings % Net Assets1
Lockheed Martin Corp. | 4.8% |
Hewlett-Packard Co. | 4.5% |
International Business Machines
Corp. | 4.1% |
The Boeing Co. | 3.9% |
Celanese Corp., Series A | 3.7% |
Merck & Co., Inc. | 3.5% |
Exxon Mobil Corp. | 3.2% |
Baxter International, Inc. | 3.1% |
Franklin Resources, Inc. | 2.8% |
Energizer Holdings, Inc. | 2.2% |
Total | 35.8% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Active Equity Funds
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Schwab Large-Cap Growth Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | Since Inception | ||||||
Investor Shares (10/3/05) | 15.32% | 12.42% | ||||||
Select Shares (10/3/05) | 15.47% | 12.61% | ||||||
Benchmark: Russell 1000 Growth Index | 19.23% | 13.76% | ||||||
Fund Category: Morningstar Large-Cap Growth | 21.54% | 14.00% |
Fund Expense Ratios3: Investor Shares: Net 1.20%; Gross 1.26% / Select Shares: Net 0.99%; Gross 1.11%
Style Assessment4
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
4 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
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Schwab Small-Cap Equity Fundtm
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Small-Cap Equity Fund Investor Shares returned 2.59% for the report period, underperforming its benchmark, the S&P Small Cap 600 Index, which returned 11.55%. From a market cap perspective, the fund’s emphasis on smaller-than-benchmark stocks helped performance. Industry group weights positively contributed to performance, as an overweight to Materials and an underweight to Banks offset losses from underweights to Utilities and Energy. Better performing stocks included such names as DeVry, Inc. and AGCO Corp. Stock selection was the main reason for the fund’s underperformance. During the report period, the market rewarded small growth stocks over their value counterparts, which detracted from returns, as the fund had a slight tilt toward value during the period. Stocks rated highly by Schwab Equity Ratings in the small-cap space underperformed in the latter half of the fund’s fiscal year. On the downside, positions in CSG Systems International, Inc., Headwaters, Inc. and Kellwood Co. detracted from returns.
As of 10/31/07:
Statistics
Number of Holdings | 145 |
Weighted Average
Market Cap
($ x 1,000,000) | $2,245 |
Price/Earnings Ratio (P/E) | 21.0 |
Price/Book Ratio (P/B) | 2.1 |
Portfolio Turnover | 106% |
Sector Weightings % of Investments
Industrials | 22.1% |
Information Technology | 21.5% |
Consumer Discretionary | 14.3% |
Health Care | 11.6% |
Financials | 11.2% |
Materials | 8.3% |
Energy | 6.1% |
Consumer Staples | 2.7% |
Utilities | 1.5% |
Telecommunication Services | 0.2% |
Other | 0.5% |
Total | 100.0% |
Top Holdings % Net Assets1
DeVry, Inc. | 2.9% |
Global Industries Ltd. | 2.7% |
Sybase, Inc. | 2.5% |
EMCOR Group, Inc. | 2.4% |
Federated Investors, Inc.,
Class B | 2.1% |
The Men’s Warehouse, Inc. | 2.0% |
Acuity Brands, Inc. | 1.9% |
Crane Co. | 1.9% |
Thomas & Betts Corp. | 1.8% |
Delphi Financial Group, Inc.,
Class A | 1.7% |
Total | 21.9% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small company stocks are subject to greater volatility than other asset classes.
1 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Active Equity Funds
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Schwab Small-Cap Equity Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 3 Years | Since Inception | |||||||||
Investor Shares (7/1/03) | 2.59% | 13.65% | 18.78% | |||||||||
Select Shares (7/1/03) | 2.80% | 13.84% | 18.98% | |||||||||
Benchmark: S&P Small Cap 600 Index | 11.55% | 14.29% | 17.70% | |||||||||
Fund Category: Morningstar Small-Cap Blend | 10.32% | 13.62% | 16.56% |
Fund Expense Ratios3: Investor Shares: 1.29% / Select Shares4: Net 1.12%; Gross 1.14%
Style Assessment5
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. |
4 | Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
5 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
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Schwab Hedged Equity Fundtm
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Hedged Equity Fund Investor Shares returned 2.87% for the report period, underperforming its benchmark, the S&P 500 Index, which was up 14.56%. The fund seeks long-term capital appreciation with lower volatility than that of broad market indices, such as the S&P 500 Index. To pursue this investment objective, the fund establishes long and short positions in equity securities. On the long side, industry group bets were negative primarily due to overweights in Consumer Discretionary, as well as an underweight to rallying Energy stocks. On the short side, the fund benefited from a related overweight to Consumer Discretionary and underweights to Energy stocks. From a market cap perspective, although the long side of the portfolio was hurt due to being smaller than the benchmark, the short side benefited from an emphasis toward small-cap stocks. Stock selection on whole detracted from returns. On the long side, Collective Brands, Inc. and King Pharmaceuticals, Inc. suffered losses, while Occidental Petroleum Corp. and McKesson Corp. were up.
As of 10/31/07:
Statistics
Number of Holdings
Long Holdings | 109 |
Short Positions | 75 |
Weighted Average
Market Cap
($ x 1,000,000)
Long Holdings | $38,053 |
Short Positions | $3,319 |
Price/Earnings Ratio (P/E)
Long Holdings | 17.3 |
Short Positions | 119.7 |
Price/Book Ratio (P/B)
Long Holdings | 2.8 |
Short Positions | 3.1 |
Portfolio Turnover Rate1 | 72% |
Top Long Holdings % of Net Assets2
McKesson Corp. | 3.5% |
Occidental Petroleum Corp. | 3.1% |
ONEOK, Inc. | 3.0% |
Principal Financial Group, Inc. | 2.8% |
Loews Corp. | 2.7% |
Total | 15.1% |
Top Short Holdings % of Net Assets2
Equinix, Inc. | 2.1% |
Bucyrus International, Inc.,
Class A | 1.8% |
Hexcel Corp. | 1.8% |
Adams Respiratory Therapeutics, Inc. | 1.5% |
ITC Holdings Corp. | 1.4% |
Total | 8.6% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | Short positions have been excluded from the calculation of portfolio turnover because at the time of entering into the short position, the fund did not intend to hold the position for more than one year. |
2 | 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 Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | Since Inception | |||||||||
Investor Shares (3/1/05) | 2.87%* | n/a | 8.39% | |||||||||
Select Shares (9/3/02) | 3.05%* | 12.38% | 11.61% | |||||||||
Benchmark: S&P 500® Index | 14.56% | 13.87% | (3/1/05) 11.94% | |||||||||
(9/3/02) 12.73% | ||||||||||||
Fund Category: Morningstar Long-Short | 7.48% | 6.80% | (3/1/05) 6.77% | |||||||||
(9/3/02) 5.91% |
Fund Expense Ratios3: Investor Shares: 2.12% / Select Shares4: Net 1.91%; Gross 1.97%
The Hedged Equity Fund’s long positions can decline in value at the same time the value of its shorted stocks increases, thereby increasing the potential for loss. The potential loss associated with short positions is much greater than the original value of the securities sold. The use of borrowing and short sales may cause the fund to have higher expenses than those of equity funds that do not use such techniques.
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
* | One year return presented in the table differs from the return in the Financial Highlights. This is a result of the calculation of the Financial Highlights return adhering to GAAP presentation. |
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. Includes dividend expense on securities sold short. |
4 | Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. Includes dividend expense on securities sold short. |
Schwab Active Equity Funds 17
Table of Contents
Schwab Financial Services Fundtm
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Financial Services Fund returned 2.81% for the report period, outperforming its benchmark, the S&P 1500 SuperComposite Financials Sector Index, which lost 2.83%. From a size perspective, the fund’s smaller-than-benchmark position slightly detracted from returns, as large-cap stocks outperformed their smaller counterparts. Industry group weights positively contributed performance; the fund benefited from an underweight to Banks and Real Estate, as well as an overweight to Insurance. The fund’s emphasis on growth stocks during the report period benefited performance, as this group outperformed value stocks in the Financial sector. Better performing securities included Northern Trust Corp., Ameriprise Financial, Inc. and Loews Corp. On the downside, Comerica, Inc. and Moody’s Corp. suffered setbacks, which weighed down on performance.
As of 10/31/07:
Statistics
Number of Holdings | 42 |
Weighted Average
Market Cap
($ x 1,000,000) | $40,401 |
Price/Earnings Ratio (P/E) | 12.2 |
Price/Book Ratio (P/B) | 1.9 |
Portfolio Turnover | 54% |
Industry Weightings % of Investments
Diversified Financials | 46.0% |
Insurance | 37.4% |
Banks | 14.4% |
Real Estate | 1.7% |
Other | 0.5% |
Total | 100.0% |
Top Holdings % Net Assets1
Northern Trust Corp. | 5.5% |
JPMorgan Chase & Co. | 5.2% |
Bank of America Corp. | 4.9% |
Franklin Resources, Inc. | 4.8% |
Bank of New York Mellon Corp. | 4.8% |
Ameriprise Financial, Inc. | 4.8% |
State Street Corp. | 4.4% |
American Express Co. | 4.3% |
KeyCorp | 4.0% |
Principal Financial Group, Inc. | 3.9% |
Total | 46.6% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
18 Schwab Active Equity Funds
Table of Contents
Schwab Financial Services Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1
$10,000 Investment1
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | |||||||||
Fund: Schwab Financial Services Fundtm (7/3/00) | 2.81%* | 14.80% | 9.81% | |||||||||
Benchmark: S&P 1500 SuperComposite Financials Sector Index | -2.83% | 11.37% | 8.00% | |||||||||
Fund Category: Morningstar Financial Services | 2.09% | 12.61% | 10.60% |
Fund Expense Ratio3: 0.98%
Since the Financial Services Fund focuses its investments on companies involved in specific sectors, this fund may involve a greater degree of risk than an investment in mutual funds that do not concentrate their investments.
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
* | One year return presented in the table differs from the return in the Financial Highlights. This is a result of the calculation of the Financial Highlights return adhering to GAAP presentation. |
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. |
Schwab Active Equity Funds 19
Table of Contents
Schwab Health Care Fundtm
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Health Care Fund returned 14.49% for the report period, outperforming its benchmark, the S&P 1500 SuperComposite Health Care Sector Index, which returned 11.12%. Industry group weights were beneficial overall, as an overweight to Healthcare Equipment & Services and an underweight to Pharmaceutical & Biotechnology added value. Better performing securities included Schering-Plough Corp., Biogen Idec, Inc. and Baxter International, Inc. On the downside, the fund’s smaller-than-benchmark positions slightly detracted from performance, as large-cap stocks outperformed small-cap stocks. In terms of stock selection, Wellcare Health Plans, Inc., Forest Laboratories, Inc. and King Pharmaceuticals, Inc. suffered setbacks. Additionally, the fund’s underweight to Abbott Laboratories during the report period detracted from performance, as the company experienced positive returns.
As of 10/31/07:
Statistics
Number of Holdings | 87 |
Weighted Average
Market Cap
($ x 1,000,000) | $46,757 |
Price/Earnings Ratio (P/E) | 27.3 |
Price/Book Ratio (P/B) | 3.7 |
Portfolio Turnover | 34% |
Industry Weightings % of Investments
Pharmaceuticals & Biotechnology | 57.6% |
Health Care Equipment & Services | 38.9% |
Other | 3.5% |
Total | 100.0% |
Top Holdings % Net Assets1
Merck & Co. Inc. | 5.6% |
Schering-Plough Corp. | 5.1% |
Baxter International, Inc. | 5.0% |
Pfizer, Inc. | 4.9% |
Johnson & Johnson | 4.0% |
McKesson Corp. | 3.9% |
Becton Dickinson & Co. | 3.9% |
Biogen Idec, Inc. | 3.6% |
Abbott Laboratories | 3.4% |
CIGNA Corp. | 3.4% |
Total | 42.8% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
20 Schwab Active Equity Funds
Table of Contents
Schwab Health Care Fundtm
Performance Summary as of
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1
$10,000 Investment1
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | |||||||||
Fund: Schwab Health Care Fundtm (7/3/00) | 14.49% | 19.45% | 8.02% | |||||||||
Benchmark: S&P 1500 SuperComposite Health Care Sector Index | 11.12% | 8.73% | 2.92% | |||||||||
Fund Category: Morningstar Health Care | 12.85% | 12.90% | 3.86% |
Fund Expense Ratio3: 0.84%
Since the Health Care Fund focuses its investments on companies involved in specific sectors, this fund may involve a greater degree of risk than an investment in mutual funds that do not concentrate their investments.
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. |
Schwab Active Equity Funds 21
Table of Contents
Schwab Technology Fundtm
Jeffrey Mortimer, (lower left) CFA, senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Vivienne Hsu, (upper right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Larry Mano, (upper left) managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Paul Alan Davis, (lower right) CFA, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Technology Fund returned 15.50% for the report period, underperforming its benchmark the S&P 1500 SuperComposite Information Technology Sector Index, which was up 26.20%. In terms of market cap, the fund’s emphasis toward small-cap stocks benefited performance. However, industry group weights detracted from performance during the period, as an overweight to Software and Services and a slight underweight to Tech Hardware relative to the fund’s benchmark detracted from returns. In addition, an emphasis toward value-oriented technology companies hurt performance, as this group underperformed across all market cap areas. Stock selection also dampened the fund’s returns, as higher-rated securities in the fund, as measured by Schwab Equity Ratings, trailed the index. Gains made by such names as Apple Computer, Inc. and Hewlett-Packard Co. were offset by losses in Motorola, Inc. and Electronic Data Systems Corp. Additionally, the fund’s underweight to Microsoft Corp., Google, Inc. and EMC Corp. during the period detracted from performance, as these companies experienced positive returns.
At the quarterly Board of Trustees meeting held in November 2007, the Board of Trustees approved the closing and liquidation of the fund. The fund will redeem all of its outstanding shares on or shortly after February 15, 2008. Additional information appears in the prospectus supplement previously provided to shareholders of the fund.
As of 10/31/07:
Statistics
Number of Holdings | 74 |
Weighted Average
Market Cap
($ x 1,000,000) | $102,651 |
Price/Earnings Ratio (P/E) | 25.2 |
Price/Book Ratio (P/B) | 4.1 |
Portfolio Turnover | 60% |
Industry Weightings % of Investments
Technology Hardware & Equipment | 43.1% |
Software & Services | 32.6% |
Semiconductors & Semiconductor
Equipment | 15.4% |
Retailing | 3.4% |
Other | 5.5% |
Total | 100.0% |
Top Holdings % Net Assets1
Cisco Systems, Inc. | 8.0% |
Hewlett-Packard Co. | 7.7% |
Microsoft Corp. | 7.6% |
International Business Machines
Corp. | 7.4% |
Intel Corp. | 7.0% |
Apple, Inc. | 5.5% |
eBay, Inc. | 3.4% |
Xerox Corp. | 2.8% |
BMC Software, Inc. | 2.6% |
Electronic Data Systems Corp. | 2.6% |
Total | 54.6% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
22 Schwab Active Equity Funds
Table of Contents
Schwab Technology Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment1
$10,000 Investment1
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | |||||||||
Fund: Schwab Technology Fundtm (7/3/00) | 15.50% | 16.07% | -6.50% | |||||||||
Benchmark: S&P 1500 SuperComposite Technology Sector Index | 26.20% | 15.78% | -7.31% | |||||||||
Fund Category: Morningstar Technology | 28.95% | 18.18% | -8.41% |
Fund Expense Ratio3: 0.95%
Since the Technology Fund focuses its investments on companies involved in specific sectors, this fund may involve a greater degree of risk than an investment in mutual funds that do not concentrate their investments.
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/13/07) as stated in the prospectus. |
Schwab Active Equity Funds 23
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees; and, ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six-months beginning May 1, 2007 and held through October 31, 2007.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund or share class under the heading entitled ‘Expenses Paid During Period‘.
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 05/01/07 | at 10/31/07 | 05/01/07 - 10/31/07 | |||||||||||||
Schwab Premier Equity Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.15% | $ | 1,000 | $ | 1,028.70 | $ | 5.88 | |||||||||
Hypothetical 5% Return | 1.15% | $ | 1,000 | $ | 1,019.41 | $ | 5.85 | |||||||||
Select Shares® | ||||||||||||||||
Actual Return | 1.00% | $ | 1,000 | $ | 1,030.10 | $ | 5.12 | |||||||||
Hypothetical 5% Return | 1.00% | $ | 1,000 | $ | 1,020.16 | $ | 5.09 | |||||||||
Schwab Core Equity Fundtm | ||||||||||||||||
Actual Return | 0.75% | $ | 1,000 | $ | 1,039.00 | $ | 3.85 | |||||||||
Hypothetical 5% Return | 0.75% | $ | 1,000 | $ | 1,021.42 | $ | 3.82 | |||||||||
Schwab Dividend Equity Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.04% | $ | 1,000 | $ | 1,012.90 | $ | 5.28 | |||||||||
Hypothetical 5% Return | 1.04% | $ | 1,000 | $ | 1,019.96 | $ | 5.30 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 0.89% | $ | 1,000 | $ | 1,013.30 | $ | 4.52 | |||||||||
Hypothetical 5% Return | 0.89% | $ | 1,000 | $ | 1,020.72 | $ | 4.53 | |||||||||
Schwab Large-Cap Growth Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.18% | $ | 1,000 | $ | 1,065.20 | $ | 6.14 | |||||||||
Hypothetical 5% Return | 1.18% | $ | 1,000 | $ | 1,019.26 | $ | 6.01 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 0.99% | $ | 1,000 | $ | 1,065.90 | $ | 5.16 | |||||||||
Hypothetical 5% Return | 0.99% | $ | 1,000 | $ | 1,020.21 | $ | 5.04 | |||||||||
Schwab Small-Cap Equity Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.24% | $ | 1,000 | $ | 958.20 | $ | 6.12 | |||||||||
Hypothetical 5% Return | 1.24% | $ | 1,000 | $ | 1,018.95 | $ | 6.31 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.09% | $ | 1,000 | $ | 959.50 | $ | 5.38 | |||||||||
Hypothetical 5% Return | 1.09% | $ | 1,000 | $ | 1,019.71 | $ | 5.55 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights. |
2 | Expenses for each fund or Share Class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year. |
24 Schwab Active Equity Funds
Table of Contents
Fund Expenses (Unaudited) continued
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 05/01/07 | at 10/31/07 | 05/01/07 - 10/31/07 | |||||||||||||
Schwab Hedged Equity Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 2.10% | $ | 1,000 | $ | 998.20 | $ | 10.58 | |||||||||
Hypothetical 5% Return | 2.10% | $ | 1,000 | $ | 1,014.62 | $ | 10.66 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.95% | $ | 1,000 | $ | 998.80 | $ | 9.82 | |||||||||
Hypothetical 5% Return | 1.95% | $ | 1,000 | $ | 1,015.38 | $ | 9.91 | |||||||||
Schwab Financial Services Fundtm | ||||||||||||||||
Actual Return | 0.88% | $ | 1,000 | $ | 959.50 | $ | 4.35 | |||||||||
Hypothetical 5% Return | 0.88% | $ | 1,000 | $ | 1,020.77 | $ | 4.48 | |||||||||
Schwab Health Care Fundtm | ||||||||||||||||
Actual Return | 0.81% | $ | 1,000 | $ | 1,030.80 | $ | 4.15 | |||||||||
Hypothetical 5% Return | 0.81% | $ | 1,000 | $ | 1,021.12 | $ | 4.13 | |||||||||
Schwab Technology Fundtm | ||||||||||||||||
Actual Return | 0.94% | $ | 1,000 | $ | 1,112.90 | $ | 5.01 | |||||||||
Hypothetical 5% Return | 0.94% | $ | 1,000 | $ | 1,020.47 | $ | 4.79 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights. |
2 | Expenses for each fund or Share Class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year. |
Schwab Active Equity Funds 25
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 3/21/051 - | ||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | |||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 12.50 | 10.70 | 10.00 | |||||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.03 | 0.01 | 0.02 | |||||||||
Net realized and unrealized gains | 1.46 | 1.83 | 0.68 | |||||||||
Total income from investment operations | 1.49 | 1.84 | 0.70 | |||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.01 | ) | (0.04 | ) | — | |||||||
Net asset value at end of period | 13.98 | 12.50 | 10.70 | |||||||||
Total return (%) | 11.89 | 17.22 | 7.00 | 2 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses | 1.16 | 3 | 1.17 | 0.78 | 4 | |||||||
Gross operating expenses | 1.16 | 1.18 | 1.23 | 4 | ||||||||
Net investment income | 0.18 | 0.01 | 0.52 | 4 | ||||||||
Portfolio turnover rate | 72 | 73 | 33 | 2 | ||||||||
Net assets, end of period ($ x 1,000,000) | 663 | 690 | 364 |
11/1/06- | 11/1/05 - | 3/21/051 - | ||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | |||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 12.51 | 10.71 | 10.00 | |||||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.04 | 0.02 | 0.03 | |||||||||
Net realized and unrealized gains | 1.48 | 1.83 | 0.68 | |||||||||
Total income from investment operations | 1.52 | 1.85 | 0.71 | |||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.02 | ) | (0.05 | ) | — | |||||||
Net asset value at end of period | 14.01 | 12.51 | 10.71 | |||||||||
Total return (%) | 12.20 | 17.28 | 7.10 | 2 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses | 1.01 | 1.02 | 0.68 | 4 | ||||||||
Gross operating expenses | 1.01 | 1.03 | 1.08 | 4 | ||||||||
Net investment income | 0.32 | 0.17 | 0.63 | 4 | ||||||||
Portfolio turnover rate | 72 | 73 | 33 | 2 | ||||||||
Net assets, end of period ($ x 1,000,000) | 983 | 857 | 481 |
1 Commencement of operations.
2 Not annualized.
3 The ratio of net operating expenses would have been 1.15% if overdraft expenses had not been included.
4 Annualized.
26 See financial notes
Table of Contents
Schwab Premier Equity Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99 | .0% | Common Stock | 1,337,621 | 1,629,806 | ||||||||
0 | .9% | Short-Term Investments | 14,682 | 14,682 | ||||||||
99 | .9% | Total Investments | 1,352,303 | 1,644,488 | ||||||||
5 | .0% | Collateral Invested for Securities on Loan | 82,317 | 82,317 | ||||||||
(4 | .9)% | Other Assets and Liabilities, Net | (81,107 | ) | ||||||||
100 | .0% | Total Net Assets | 1,645,698 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 99.0% of net assets | ||||||||
Capital Goods 11.1% | ||||||||
AGCO Corp. (a) * | 415,000 | 24,767 | ||||||
Cooper Industries Ltd., Class A (a) | 325,000 | 17,027 | ||||||
ITT Corp. | 275,000 | 18,403 | ||||||
L-3 Communications Holdings, Inc. | 150,000 | 16,446 | ||||||
Lockheed Martin Corp. | 205,000 | 22,558 | ||||||
Northrop Grumman Corp. | 150,000 | 12,543 | ||||||
Raytheon Co. | 326,700 | 20,781 | ||||||
Teleflex, Inc. | 143,300 | 10,491 | ||||||
The Boeing Co. | 210,100 | 20,714 | ||||||
Thomas & Betts Corp. (a) * | 310,000 | 17,363 | ||||||
Wabtec Corp. | 50,000 | 1,877 | ||||||
182,970 | ||||||||
Commercial Services & Supplies 1.9% | ||||||||
Republic Services, Inc. | 450,000 | 15,385 | ||||||
Waste Management, Inc. | 425,000 | 15,466 | ||||||
30,851 | ||||||||
Consumer Durables & Apparel 2.7% | ||||||||
Hasbro, Inc. (a) | 350,000 | 10,447 | ||||||
Newell Rubbermaid, Inc. | 600,000 | 17,496 | ||||||
NIKE, Inc., Class B | 250,000 | 16,565 | ||||||
44,508 | ||||||||
Consumer Services 1.2% | ||||||||
ITT Educational Services, Inc. * | 150,000 | 19,078 | ||||||
Diversified Financials 7.4% | ||||||||
American Express Co. | 242,600 | 14,786 | ||||||
Ameriprise Financial, Inc. | 311,100 | 19,593 | ||||||
Bank of America Corp. | 282,000 | 13,615 | ||||||
Bank of New York Mellon Corp. | 300,000 | 14,655 | ||||||
Franklin Resources, Inc. | 145,000 | 18,804 | ||||||
JPMorgan Chase & Co. | 335,000 | 15,745 | ||||||
Northern Trust Corp. | 287,000 | 21,585 | ||||||
TD Ameritrade Holding Corp. * | 200,000 | 3,828 | ||||||
122,611 | ||||||||
Energy 9.1% | ||||||||
Chevron Corp. | 240,000 | 21,962 | ||||||
Exxon Mobil Corp. | 256,700 | 23,614 | ||||||
Frontier Oil Corp. | 280,000 | 12,821 | ||||||
Holly Corp. (a) | 255,000 | 16,014 | ||||||
Marathon Oil Corp. | 335,000 | 19,809 | ||||||
Occidental Petroleum Corp. | 325,000 | 22,441 | ||||||
Schlumberger Ltd. | 218,400 | 21,091 | ||||||
SEACOR Holdings, Inc. (a) * | 140,000 | 12,831 | ||||||
150,583 | ||||||||
Food & Staples Retailing 1.0% | ||||||||
BJ’s Wholesale Club, Inc. * | 460,000 | 16,505 | ||||||
Food, Beverage & Tobacco 6.0% | ||||||||
ConAgra Foods, Inc. | 550,000 | 13,052 | ||||||
General Mills, Inc. | 303,600 | 17,527 | ||||||
H.J. Heinz Co. | 300,000 | 14,034 | ||||||
Reynolds American, Inc. (a) | 250,000 | 16,107 | ||||||
Sara Lee Corp. | 942,200 | 15,584 | ||||||
The Coca-Cola Co. | 363,800 | 22,468 | ||||||
98,772 | ||||||||
Health Care Equipment & Services 7.2% | ||||||||
Aetna, Inc. | 365,520 | 20,531 | ||||||
Baxter International, Inc. | 366,700 | 22,006 | ||||||
Becton, Dickinson & Co. | 240,000 | 20,030 | ||||||
CIGNA Corp. | 414,000 | 21,731 | ||||||
Henry Schein, Inc. * | 200,000 | 11,980 | ||||||
McKesson Corp. | 344,500 | 22,772 | ||||||
119,050 | ||||||||
Household & Personal Products 1.1% | ||||||||
Energizer Holdings, Inc. * | 170,000 | 17,731 | ||||||
Insurance 8.9% | ||||||||
Lincoln National Corp. | 220,000 | 13,721 | ||||||
Loews Corp. | 430,000 | 21,109 | ||||||
MetLife, Inc. | 300,000 | 20,655 | ||||||
Nationwide Financial Services, Inc., Class A (a) | 350,000 | 18,778 | ||||||
Principal Financial Group, Inc. | 305,000 | 20,639 | ||||||
Prudential Financial, Inc. | 188,300 | 18,212 | ||||||
The Chubb Corp. | 325,000 | 17,339 |
See financial notes 27
Table of Contents
Schwab Premier Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
The Hartford Financial Services Group, Inc. | 174,000 | 16,883 | ||||||
147,336 | ||||||||
Materials 5.2% | ||||||||
Albemarle Corp. (a) | 470,000 | 22,447 | ||||||
Ashland, Inc. | 270,000 | 15,855 | ||||||
Packaging Corp. of America | 550,100 | 17,515 | ||||||
Pactiv Corp. * | 361,400 | 9,928 | ||||||
Sigma-Aldrich Corp. | 375,000 | 19,376 | ||||||
85,121 | ||||||||
Media 3.9% | ||||||||
Omnicom Group, Inc. | 300,000 | 15,294 | ||||||
Regal Entertainment Group, Class A (a) | 700,000 | 15,799 | ||||||
The Walt Disney Co. | 480,000 | 16,622 | ||||||
Viacom, Inc., Class B * | 400,000 | 16,516 | ||||||
64,231 | ||||||||
Pharmaceuticals & Biotechnology 5.8% | ||||||||
Applied Biosystems Group-Applera Corp. | 500,000 | 18,570 | ||||||
Forest Laboratories, Inc. * | 344,900 | 13,475 | ||||||
King Pharmaceuticals, Inc. * | 450,000 | 4,770 | ||||||
Merck & Co., Inc. | 392,000 | 22,838 | ||||||
Pfizer, Inc. | 558,500 | 13,745 | ||||||
Schering-Plough Corp. | 600,000 | 18,312 | ||||||
Warner Chilcott Ltd., Class A (a) * | 160,000 | 2,965 | ||||||
94,675 | ||||||||
Retailing 2.0% | ||||||||
Expedia, Inc. * | 700,000 | 22,862 | ||||||
IAC/InterActiveCorp (a) * | 350,000 | 10,311 | ||||||
33,173 | ||||||||
Semiconductors & Semiconductor Equipment 3.1% | ||||||||
Intel Corp. | 300,000 | 8,070 | ||||||
MEMC Electronic Materials, Inc. * | 275,000 | 20,136 | ||||||
Zoran Corp. * | 875,000 | 22,312 | ||||||
�� | ||||||||
50,518 | ||||||||
Software & Services 6.7% | ||||||||
BMC Software, Inc. * | 550,000 | 18,612 | ||||||
Convergys Corp. (a) * | 629,300 | 11,535 | ||||||
Electronic Data Systems Corp. | 680,600 | 14,694 | ||||||
Intuit, Inc. * | 300,000 | 9,651 | ||||||
Oracle Corp. * | 200,000 | 4,434 | ||||||
Sybase, Inc. * | 614,700 | 17,581 | ||||||
Symantec Corp. (a) * | 750,000 | 14,085 | ||||||
Synopsys, Inc. * | 700,000 | 19,782 | ||||||
110,374 | ||||||||
Technology Hardware & Equipment 6.8% | ||||||||
Apple, Inc. * | 60,000 | 11,397 | ||||||
Cisco Systems, Inc. * | 650,000 | 21,489 | ||||||
Hewlett-Packard Co. | 440,000 | 22,739 | ||||||
International Business Machines Corp. | 180,000 | 20,902 | ||||||
NCR Corp. * | 350,000 | 9,657 | ||||||
Seagate Technology | 200,000 | 5,568 | ||||||
Teradata Corp. * | 350,000 | 9,985 | ||||||
Xerox Corp. * | 600,000 | 10,464 | ||||||
112,201 | ||||||||
Telecommunication Services 3.8% | ||||||||
AT&T, Inc. | 325,000 | 13,582 | ||||||
CenturyTel, Inc. | 440,000 | 19,382 | ||||||
Qwest Communications International, Inc. * | 1,900,000 | 13,642 | ||||||
Telephone and Data Systems, Inc. | 225,000 | 15,705 | ||||||
62,311 | ||||||||
Transportation 0.6% | ||||||||
Continental Airlines, Inc., Class B (a) * | 300,000 | 10,305 | ||||||
Utilities 3.5% | ||||||||
Edison International | 150,000 | 8,723 | ||||||
ONEOK, Inc. (a) | 330,000 | 16,480 | ||||||
PG&E Corp. | 345,000 | 16,881 | ||||||
Public Service Enterprise Group, Inc. | 155,000 | 14,818 | ||||||
56,902 | ||||||||
Total Common Stock (Cost $1,337,621) | 1,629,806 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.9% of net assets | ||||||||
Repurchase Agreement 0.9% | ||||||||
Fixed Income Clearing Corp. dated 10/31/07, due 11/01/07 at 4.55%, with a maturity value of $14,172 (fully collateralized by Federal National Mortgage Association with a value of $14,456). | ||||||||
14,170 | 14,170 | |||||||
U.S. Treasury Obligations 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
3.68%, 12/20/07 (b) | 80 | 80 | ||||||
3.58%, 12/20/07 (b) | 85 | 84 |
28 See financial notes
Table of Contents
Schwab Premier Equity Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
3.92%, 12/20/07 (b) | 350 | 348 | ||||||
512 | ||||||||
Total Short-Term Investments (Cost $14,682) | 14,682 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 5.0% of net assets | ||||||||
State Street Navigator Security Lending Prime Portfolio | 82,316,649 | 82,317 | ||||||
End of collateral invested for securities on loan. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $1,352,303 and the unrealized appreciation and depreciation were $315,578 and ($23,393), respectively, with a net appreciation of $292,185. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. |
In addition to the above, the fund held the following at
10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 100 | 7,775 | 324 |
See financial notes 29
Table of Contents
Schwab Premier Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $80,430 (cost $1,352,303) | $1,644,488 | |||||
Collateral invested for securities on loan | 82,317 | |||||
Cash | 1 | |||||
Receivables: | ||||||
Investments sold | 8,803 | |||||
Fund shares sold | 1,345 | |||||
Dividends | 859 | |||||
Due from broker for futures | 95 | |||||
Income from securities on loan | 27 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 3 | ||||
Total assets | 1,737,940 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | 82,317 | |||||
Payables: | ||||||
Investments bought | 7,656 | |||||
Investment adviser and administrator fees | 117 | |||||
Transfer agent and shareholder service fees | 21 | |||||
Fund shares redeemed | 2,073 | |||||
Accrued expenses | + | 58 | ||||
Total liabilities | 92,242 | |||||
Net Assets | ||||||
Total assets | 1,737,940 | |||||
Total liabilities | − | 92,242 | ||||
Net assets | 1,645,698 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,252,795 | |||||
Net investment income not yet distributed | 2,367 | |||||
Net realized capital gains | 98,027 | |||||
Net unrealized capital gains | 292,509 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $662,942 | 47,404 | $13.98 | ||||||||
Select Shares | $982,756 | 70,167 | $14.01 |
30 See financial notes
Table of Contents
Schwab Premier Equity Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $21,343 | |||||
Interest | 740 | |||||
Securities on loan | + | 116 | ||||
Total Investment Income | 22,199 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 98,228 | |||||
Net realized gains on futures contracts | + | 371 | ||||
Net realized gains | 98,599 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 80,136 | |||||
Net unrealized gains on futures contracts | + | 324 | ||||
Net unrealized gains | 80,460 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 14,718 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 1,747 | |||||
Select Shares | 969 | |||||
Shareholder reports | 166 | |||||
Portfolio accounting fees | 72 | |||||
Custodian fees | 39 | |||||
Professional fees | 39 | |||||
Registration fees | 32 | |||||
Overdraft expense | 19 | |||||
Trustees’ fees | 15 | |||||
Other expenses | + | 15 | ||||
Total expenses | 17,831 | |||||
Custody Credits | − | 2 | ||||
Net expenses | 17,829 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 22,199 | |||||
Net expenses | − | 17,829 | ||||
Net investment income | 4,370 | |||||
Net realized gains | 98,599 | |||||
Net unrealized gains | + | 80,460 | ||||
Increase in net assets from operations | $183,429 |
See financial notes 31
Table of Contents
Schwab Premier Equity Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | ||||||||
Net investment income | $4,370 | $1,277 | |||||||
Net realized gains and losses | 98,599 | (26 | ) | ||||||
Net unrealized gains | + | 80,460 | 172,611 | ||||||
Increase in net assets from operations | $183,429 | $173,862 | |||||||
Distributions to Shareholders | |||||||||
Dividends from net investment income | |||||||||
Investor Shares | 334 | 1,487 | |||||||
Select Shares | + | 1,669 | 2,289 | ||||||
Dividends from net investment income | $2,003 | $3,776 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 6,110 | $80,950 | 33,411 | $393,500 | ||||||||||||||
Select Shares | + | 21,080 | 280,364 | 41,099 | 485,841 | |||||||||||||
Total Shares Sold | 27,190 | $361,314 | 74,510 | $879,341 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 24 | $306 | 118 | $1,352 | ||||||||||||||
Select Shares | + | 104 | 1,352 | 172 | 1,981 | |||||||||||||
Total Shares Reinvested | 128 | $1,658 | 290 | 3,333 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (13,943 | ) | ($186,154 | ) | (12,348 | ) | ($145,311 | ) | ||||||||||
Select Shares | + | (19,482 | ) | (259,173 | ) | (17,727 | ) | (205,961 | ) | |||||||||
Total Shares Redeemed | (33,425 | ) | ($445,327 | ) | (30,075 | ) | ($351,272 | ) | ||||||||||
Net transactions in fund shares | (6,107 | ) | (82,355 | ) | 44,725 | 531,402 | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 123,678 | $1,546,627 | 78,953 | $845,139 | ||||||||||||||
Total increase or decrease | + | (6,107 | ) | 99,071 | 44,725 | 701,488 | ||||||||||||
End of period | 117,571 | $1,645,698 | 123,678 | $1,546,627 | ||||||||||||||
Net investment income not yet distributed | $2,367 | $- |
32 See financial notes
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | ||||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 18.40 | 15.81 | 13.81 | 12.71 | 10.89 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.16 | 0.10 | 0.13 | 0.12 | 0.10 | |||||||||||||||
Net realized and unrealized gains | 2.35 | 2.58 | 2.03 | 1.09 | 1.79 | |||||||||||||||
Total income from investment operations | 2.51 | 2.68 | 2.16 | 1.21 | 1.89 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.10 | ) | (0.09 | ) | (0.16 | ) | (0.11 | ) | (0.07 | ) | ||||||||||
Distributions from net realized gains | (0.32 | ) | — | — | — | — | ||||||||||||||
Total distributions | (0.42 | ) | (0.09 | ) | (0.16 | ) | (0.11 | ) | (0.07 | ) | ||||||||||
Net asset value at end of period | 20.49 | 18.40 | 15.81 | 13.81 | 12.71 | |||||||||||||||
Total return (%) | 13.88 | 17.02 | 15.74 | 9.57 | 17.54 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.75 | 0.75 | 0.75 | 0.75 | 0.75 | |||||||||||||||
Gross operating expenses | 0.78 | 0.81 | 0.85 | 0.88 | 0.88 | |||||||||||||||
Net investment income | 0.91 | 0.63 | 0.93 | 0.89 | 0.94 | |||||||||||||||
Portfolio turnover rate | 18 | 42 | 48 | 86 | 73 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,133 | 1,125 | 547 | 263 | 237 |
See financial notes 33
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99 | .1% | Common Stock | 1,771,306 | 2,114,879 | ||||||||
0 | .9% | Short-Term Investments | 18,992 | 18,992 | ||||||||
100 | .0% | Total Investments | 1,790,298 | 2,133,871 | ||||||||
1 | .4% | Collateral Invested for Securities on Loan | 30,374 | 30,374 | ||||||||
(1 | .4)% | Other Assets and Liabilities, Net | (30,772 | ) | ||||||||
100 | .0% | Total Net Assets | 2,133,473 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 99.1% of net assets | ||||||||
Automobiles & Components 0.2% | ||||||||
The Goodyear Tire & Rubber Co. * | 130,000 | 3,920 | ||||||
Banks 0.4% | ||||||||
KeyCorp | 300,000 | 8,535 | ||||||
Capital Goods 13.6% | ||||||||
AGCO Corp. * | 115,000 | 6,863 | ||||||
Emerson Electric Co. | 177,600 | 9,283 | ||||||
Fluor Corp. | 44,200 | 6,984 | ||||||
General Dynamics Corp. | 49,400 | 4,494 | ||||||
Lockheed Martin Corp. | 682,400 | 75,091 | ||||||
Northrop Grumman Corp. | 219,000 | 18,313 | ||||||
Raytheon Co. | 1,177,900 | 74,926 | ||||||
The Boeing Co. | 958,100 | 94,459 | ||||||
290,413 | ||||||||
Consumer Durables & Apparel 1.5% | ||||||||
Hasbro, Inc. | 481,700 | 14,379 | ||||||
Newell Rubbermaid, Inc. | 493,900 | 14,402 | ||||||
NIKE, Inc., Class B | 55,800 | 3,697 | ||||||
32,478 | ||||||||
Consumer Services 0.5% | ||||||||
Service Corp. International | 664,000 | 9,608 | ||||||
Diversified Financials 11.9% | ||||||||
American Express Co. | 552,000 | 33,644 | ||||||
Ameriprise Financial, Inc. | 431,400 | 27,170 | ||||||
Bank of America Corp. | 75,000 | 3,621 | ||||||
Bank of New York Mellon Corp. | 524,800 | 25,637 | ||||||
Federated Investors, Inc., Class B | 107,500 | 4,623 | ||||||
Franklin Resources, Inc. | 403,100 | 52,274 | ||||||
JPMorgan Chase & Co. | 2,201,900 | 103,489 | ||||||
Northern Trust Corp. | 42,500 | 3,196 | ||||||
253,654 | ||||||||
Energy 8.0% | ||||||||
Chevron Corp. | 320,900 | 29,366 | ||||||
Exxon Mobil Corp. | 836,400 | 76,940 | ||||||
Holly Corp. | 300,000 | 18,840 | ||||||
Marathon Oil Corp. | 230,000 | 13,600 | ||||||
National-Oilwell Varco, Inc. * | 100,000 | 7,324 | ||||||
Occidental Petroleum Corp. | 300,000 | 20,715 | ||||||
Schlumberger Ltd. | 50,000 | 4,828 | ||||||
171,613 | ||||||||
Food, Beverage & Tobacco 4.0% | ||||||||
ConAgra Foods, Inc. | 793,100 | 18,820 | ||||||
General Mills, Inc. | 427,500 | 24,680 | ||||||
Reynolds American, Inc. (a) | 97,600 | 6,288 | ||||||
Sara Lee Corp. | 135,600 | 2,243 | ||||||
The Coca-Cola Co. | 540,500 | 33,381 | ||||||
85,412 | ||||||||
Health Care Equipment & Services 6.9% | ||||||||
Aetna, Inc. | 495,800 | 27,849 | ||||||
AmerisourceBergen Corp. | 106,200 | 5,003 | ||||||
Baxter International, Inc. | 493,400 | 29,609 | ||||||
Becton, Dickinson & Co. | 122,300 | 10,207 | ||||||
CIGNA Corp. | 324,600 | 17,038 | ||||||
Humana, Inc. * | 254,200 | 19,053 | ||||||
McKesson Corp. | 452,600 | 29,917 | ||||||
WellPoint, Inc. * | 116,700 | 9,246 | ||||||
147,922 | ||||||||
Household & Personal Products 0.3% | ||||||||
Energizer Holdings, Inc. * | 64,500 | 6,727 | ||||||
Insurance 9.4% | ||||||||
AFLAC, Inc. | 160,100 | 10,051 | ||||||
American Financial Group, Inc. (a) | 54,000 | 1,615 | ||||||
Lincoln National Corp. | 214,500 | 13,378 | ||||||
Loews Corp. | 266,700 | 13,092 | ||||||
MetLife, Inc. | 838,800 | 57,751 | ||||||
Nationwide Financial Services, Inc., Class A | 80,000 | 4,292 | ||||||
Principal Financial Group, Inc. | 460,600 | 31,169 | ||||||
Prudential Financial, Inc. | 209,700 | 20,282 | ||||||
The Chubb Corp. | 151,800 | 8,099 | ||||||
The Hartford Financial Services Group, Inc. | 247,600 | 24,025 | ||||||
The Travelers Cos., Inc. | 231,400 | 12,081 | ||||||
W. R. Berkley Corp. | 160,700 | 4,836 | ||||||
200,671 |
34 See financial notes
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Materials 3.7% | ||||||||
AK Steel Holding Corp. * | 111,700 | 5,599 | ||||||
Albemarle Corp. | 104,000 | 4,967 | ||||||
Celanese Corp., Series A | 305,500 | 12,819 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 29,480 | 3,469 | ||||||
International Paper Co. (a) | 325,000 | 12,012 | ||||||
Monsanto Co. | 74,400 | 7,264 | ||||||
Owens-Illinois, Inc. * | 23,600 | 1,048 | ||||||
Pactiv Corp. * | 251,000 | 6,895 | ||||||
Sonoco Products Co. | 324,500 | 10,034 | ||||||
The Lubrizol Corp. | 187,100 | 12,700 | ||||||
United States Steel Corp. | 28,300 | 3,054 | ||||||
79,861 | ||||||||
Media 3.6% | ||||||||
CBS Corp., Class B | 926,000 | 26,576 | ||||||
Omnicom Group, Inc. | 460,000 | 23,451 | ||||||
Regal Entertainment Group, | ||||||||
Class A (a) | 77,000 | 1,738 | ||||||
The Walt Disney Co. | 710,400 | 24,601 | ||||||
76,366 | ||||||||
Pharmaceuticals & Biotechnology 9.4% | ||||||||
Applied Biosystems Group-Applera Corp. | 550,000 | 20,427 | ||||||
Biogen Idec, Inc. * | 121,700 | 9,059 | ||||||
Endo Pharmaceutical Holdings, Inc. * | 85,000 | 2,491 | ||||||
King Pharmaceuticals, Inc. * | 330,000 | 3,498 | ||||||
Merck & Co., Inc. | 960,700 | 55,970 | ||||||
Pfizer, Inc. | 3,633,400 | 89,418 | ||||||
Schering-Plough Corp. | 666,500 | 20,342 | ||||||
201,205 | ||||||||
Retailing 1.2% | ||||||||
Amazon.com, Inc. * | 242,000 | 21,574 | ||||||
Expedia, Inc. * | 150,600 | 4,919 | ||||||
26,493 | ||||||||
Semiconductors & Semiconductor Equipment 0.6% | ||||||||
Intel Corp. | 455,000 | 12,239 | ||||||
Software & Services 5.4% | ||||||||
BMC Software, Inc. * | 457,600 | 15,485 | ||||||
Cadence Design Systems, Inc. * | 600,000 | 11,760 | ||||||
Computer Sciences Corp. * | 155,600 | 9,085 | ||||||
Electronic Data Systems Corp. | 1,826,200 | 39,428 | ||||||
McAfee, Inc. * | 150,500 | 6,223 | ||||||
Microsoft Corp. | 100,000 | 3,681 | ||||||
Symantec Corp. * | 359,900 | 6,759 | ||||||
Synopsys, Inc. * | 502,800 | 14,209 | ||||||
Total System Services, Inc. (a) | 256,800 | 7,694 | ||||||
114,324 | ||||||||
Technology Hardware & Equipment 12.0% | ||||||||
Apple, Inc. * | 190,000 | 36,091 | ||||||
Cisco Systems, Inc. * | 250,000 | 8,265 | ||||||
Dolby Laboratories, Inc., Class A * | 110,700 | 4,590 | ||||||
Hewlett-Packard Co. | 1,717,500 | 88,760 | ||||||
International Business Machines Corp. | 882,800 | 102,511 | ||||||
NCR Corp. * | 126,000 | 3,476 | ||||||
Teradata Corp. * | 126,000 | 3,595 | ||||||
Xerox Corp. * | 546,700 | 9,534 | ||||||
256,822 | ||||||||
Telecommunication Services 3.0% | ||||||||
AT&T, Inc. | 212,421 | 8,877 | ||||||
CenturyTel, Inc. | 197,400 | 8,696 | ||||||
Citizens Communications Co. | 1,274,100 | 16,767 | ||||||
Qwest Communications International, Inc. (a) * | 2,999,500 | 21,536 | ||||||
Telephone and Data Systems, Inc. | 70,000 | 4,886 | ||||||
Verizon Communications, Inc. | 56,300 | 2,594 | ||||||
63,356 | ||||||||
Transportation 0.3% | ||||||||
Continental Airlines, Inc., Class B * | 169,300 | 5,815 | ||||||
Utilities 3.2% | ||||||||
Edison International | 331,300 | 19,265 | ||||||
FirstEnergy Corp. | 100,000 | 6,970 | ||||||
ONEOK, Inc. | 390,000 | 19,477 | ||||||
PG&E Corp. | 57,000 | 2,789 | ||||||
Public Service Enterprise Group, Inc. | 160,000 | 15,296 | ||||||
The AES Corp. * | 170,400 | 3,648 | ||||||
67,445 | ||||||||
Total Common Stock (Cost $1,771,306) | 2,114,879 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.9% of net assets | ||||||||
Repurchase Agreement 0.9% | ||||||||
Fixed Income Clearing Corp. dated 10/31/07, due 11/01/07 at 4.55%, with a maturity value of $18,298 (fully collateralized by Federal Home Loan Bank with a value of $18,666.) | ||||||||
18,296 | 18,296 |
See financial notes 35
Table of Contents
Schwab Core Equity Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
3.92%, 12/20/07 (b) | 700 | 696 | ||||||
Total Short-Term Investments (Cost $18,992) | 18,992 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 1.4% of net assets | ||||||||
State Street Navigator Security Lending Prime Portfolio | 30,373,739 | 30,374 | ||||||
End of collateral invested for securities on loan. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $1,790,298, and the unrealized appreciation and depreciation were $387,684 and ($44,111), respectively, with a net unrealized appreciation of $343,573. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. |
In addition to the above, the fund held the following at
10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 200 | 15,549 | 569 |
36 See financial notes
Table of Contents
Schwab Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $29,260 (cost $1,790,298) | $2,133,871 | |||||
Collateral invested for securities on loan | 30,374 | |||||
Cash | 1 | |||||
Receivables: | ||||||
Fund shares sold | 3,263 | |||||
Dividends | 1,307 | |||||
Due from broker for futures | 189 | |||||
Income from securities on loan | 13 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 7 | ||||
Total assets | 2,169,027 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | 30,374 | |||||
Payables: | ||||||
Investments bought | 3,472 | |||||
Investment adviser and administrator fees | 111 | |||||
Transfer agent and shareholder service fees | 43 | |||||
Fund shares redeemed | 1,467 | |||||
Accrued expenses | + | 87 | ||||
Total liabilities | 35,554 | |||||
Net Assets | ||||||
Total assets | 2,169,027 | |||||
Total liabilities | − | 35,554 | ||||
Net assets | 2,133,473 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,773,023 | |||||
Net investment income not yet distributed | 12,196 | |||||
Net realized capital gains | 4,112 | |||||
Net unrealized capital gains | 344,142 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$2,133,473 | 104,102 | $20.49 |
See financial notes 37
Table of Contents
Schwab Core Equity Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $26,868 | |||||
Interest | 1,199 | |||||
Securities on loan | + | 68 | ||||
Total Investment Income | 28,135 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 3,215 | |||||
Net realized gains on futures contracts | + | 1,047 | ||||
Net realized gains | 4,262 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 189,410 | |||||
Net unrealized gains on futures contracts | + | 419 | ||||
Net unrealized gains | 189,829 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 8,579 | |||||
Transfer agent and shareholder service fees | 4,250 | |||||
Registration fees | 154 | |||||
Shareholder reports | 119 | |||||
Portfolio accounting fees | 76 | |||||
Custodian fees | 34 | |||||
Professional fees | 31 | |||||
Trustees’ fees | 14 | |||||
Overdraft expense | 1 | |||||
Other expenses | + | 11 | ||||
Total expenses | 13,269 | |||||
Custody Credits | − | 3 | ||||
Expense reduction by adviser and Schwab | − | 520 | ||||
Net expenses | 12,746 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 28,135 | |||||
Net expenses | − | 12,746 | ||||
Net investment income | 15,389 | |||||
Net realized gains | 4,262 | |||||
Net unrealized gains | + | 189,829 | ||||
Increase in net assets from operations | $209,480 |
38 See financial notes
Table of Contents
Schwab Core Equity Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $15,389 | $5,145 | ||||||
Net realized gains | 4,262 | 25,186 | ||||||
Net unrealized gains | + | 189,829 | 96,306 | |||||
Increase in net assets from operations | 209,480 | 126,637 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | 7,073 | 3,509 | ||||||
Distributions from net realized gains | + | 21,463 | — | |||||
Total distributions | $28,536 | $3,509 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 55,950 | $1,081,379 | 34,999 | $599,052 | ||||||||||||||
Shares Reinvested | 1,237 | 23,020 | 182 | 3,034 | ||||||||||||||
Shares Redeemed | + | (14,242 | ) | (277,177 | ) | (8,614 | ) | (146,741 | ) | |||||||||
Net transactions in fund shares | 42,945 | $827,222 | 26,567 | $455,345 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 61,157 | $1,125,307 | 34,590 | $546,834 | ||||||||||||||
Total increase | + | 42,945 | 1,008,166 | 26,567 | 578,473 | |||||||||||||
End of period | 104,102 | $2,133,473 | 61,157 | $1,125,307 | ||||||||||||||
Net investment income not yet distributed | $12,196 | $3,880 |
See financial notes 39
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 9/2/031- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 14.61 | 12.80 | 12.06 | 10.60 | 10.00 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.26 | 0.24 | 0.26 | 0.29 | 0.05 | |||||||||||||||
Net realized and unrealized gains | 1.38 | 1.97 | 0.93 | 1.49 | 0.55 | |||||||||||||||
Total income from investment operations | 1.64 | 2.21 | 1.19 | 1.78 | 0.60 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.24 | ) | (0.26 | ) | (0.32 | ) | — | |||||||||||
Distributions from net realized gains | (0.31 | ) | (0.16 | ) | (0.19 | ) | — | — | ||||||||||||
Total distributions | (0.55 | ) | (0.40 | ) | (0.45 | ) | (0.32 | ) | — | |||||||||||
Net asset value at end of period | 15.70 | 14.61 | 12.80 | 12.06 | 10.60 | |||||||||||||||
Total return (%) | 11.43 | 17.63 | 9.98 | 17.00 | 6.00 | 2 | ||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 1.04 | 1.05 | 1.07 | 0.65 | — | |||||||||||||||
Gross operating expenses | 1.04 | 1.05 | 1.09 | 1.19 | 1.34 | 3 | ||||||||||||||
Net investment income | 1.71 | 1.78 | 2.17 | 2.71 | 3.41 | 3 | ||||||||||||||
Portfolio turnover rate | 18 | 36 | 26 | 39 | 2 | 2 | ||||||||||||||
Net assets, end of period ($ x 1,000,000) | 760 | 624 | 528 | 267 | 94 |
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 9/2/031- | ||||||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 14.60 | 12.80 | 12.06 | 10.60 | 10.00 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.28 | 0.26 | 0.28 | 0.31 | 0.05 | |||||||||||||||
Net realized and unrealized gains | 1.37 | 1.98 | 0.93 | 1.48 | 0.55 | |||||||||||||||
Total income from investment operations | 1.65 | 2.24 | 1.21 | 1.79 | 0.60 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.28 | ) | (0.28 | ) | (0.28 | ) | (0.33 | ) | — | |||||||||||
Distributions from net realized gains | (0.31 | ) | (0.16 | ) | (0.19 | ) | — | — | ||||||||||||
Total distributions | (0.59 | ) | (0.44 | ) | (0.47 | ) | (0.33 | ) | — | |||||||||||
Net asset value at end of period | 15.66 | 14.60 | 12.80 | 12.06 | 10.60 | |||||||||||||||
Total return (%) | 11.55 | 17.86 | 10.17 | 17.07 | 6.00 | 2 | ||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.89 | 0.90 | 0.92 | 0.54 | — | |||||||||||||||
Gross operating expenses | 0.89 | 0.90 | 0.94 | 1.04 | 1.19 | 3 | ||||||||||||||
Net investment income | 1.83 | 1.92 | 2.32 | 2.83 | 3.41 | 3 | ||||||||||||||
Portfolio turnover rate | 18 | 36 | 26 | 39 | 2 | 2 | ||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,340 | 729 | 509 | 252 | 111 |
1 Commencement of operations.
2 Not annualized.
3 Annualized.
40 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99 | .2% | Common Stock | 1,739,100 | 2,084,079 | ||||||||
0 | .3% | Short-Term Investments | 5,833 | 5,833 | ||||||||
99 | .5% | Total Investments | 1,744,933 | 2,089,912 | ||||||||
0 | .5% | Other Assets and Liabilities, Net | 10,831 | |||||||||
100 | .0% | Total Net Assets | 2,100,743 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 99.2% of net assets | ||||||||
Banks 5.1% | ||||||||
Comerica, Inc. | 371,700 | 17,351 | ||||||
Fifth Third Bancorp | 200,000 | 6,256 | ||||||
Freddie Mac | 100,000 | 5,223 | ||||||
KeyCorp | 492,500 | 14,012 | ||||||
National City Corp. | 336,800 | 8,167 | ||||||
PNC Financial Services Group, Inc. | 318,400 | 22,976 | ||||||
Regions Financial Corp. | 556,571 | 15,094 | ||||||
SunTrust Banks, Inc. | 250,887 | 18,214 | ||||||
107,293 | ||||||||
Capital Goods 9.7% | ||||||||
Cooper Industries Ltd., Class A | 355,000 | 18,598 | ||||||
Eaton Corp. | 210,000 | 19,442 | ||||||
Emerson Electric Co. | 423,600 | 22,142 | ||||||
Harsco Corp. | 174,400 | 10,572 | ||||||
Lockheed Martin Corp. | 324,000 | 35,653 | ||||||
Northrop Grumman Corp. | 290,400 | 24,283 | ||||||
Raytheon Co. | 487,100 | 30,984 | ||||||
The Boeing Co. | 245,000 | 24,155 | ||||||
Tyco International Ltd. | 300,000 | 12,351 | ||||||
United Technologies Corp. | 75,000 | 5,744 | ||||||
203,924 | ||||||||
Commercial Services & Supplies 2.6% | ||||||||
Avery Dennison Corp. | 100,000 | 5,790 | ||||||
R.R. Donnelley & Sons Co. | 410,000 | 16,519 | ||||||
Republic Services, Inc. | 290,000 | 9,915 | ||||||
Waste Management, Inc. | 590,000 | 21,470 | ||||||
53,694 | ||||||||
Consumer Durables & Apparel 2.3% | ||||||||
Hasbro, Inc. | 475,000 | 14,179 | ||||||
Newell Rubbermaid, Inc. | 862,600 | 25,153 | ||||||
NIKE, Inc., Class B | 125,000 | 8,283 | ||||||
47,615 | ||||||||
Diversified Financials 5.9% | ||||||||
American Express Co. | 275,000 | 16,761 | ||||||
Bank of America Corp. | 675,400 | 32,608 | ||||||
Bank of New York Mellon Corp. | 879,845 | 42,980 | ||||||
JPMorgan Chase & Co. | 675,584 | 31,753 | ||||||
124,102 | ||||||||
Energy 8.0% | ||||||||
Boardwalk Pipeline Partners LP | 191,500 | 6,224 | ||||||
Chevron Corp. | 375,000 | 34,316 | ||||||
ConocoPhillips | 150,000 | 12,744 | ||||||
Exxon Mobil Corp. | 320,800 | 29,510 | ||||||
Marathon Oil Corp. | 400,000 | 23,652 | ||||||
Occidental Petroleum Corp. | 420,000 | 29,001 | ||||||
Schlumberger Ltd. | 153,400 | 14,814 | ||||||
Tesoro Corp. | 300,000 | 18,159 | ||||||
168,420 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
The Kroger Co. | 335,000 | 9,846 | ||||||
Food, Beverage & Tobacco 10.4% | ||||||||
Altria Group, Inc. | 410,000 | 29,901 | ||||||
Anheuser-Busch Cos., Inc. | 400,000 | 20,512 | ||||||
ConAgra Foods, Inc. | 650,000 | 15,424 | ||||||
General Mills, Inc. | 370,000 | 21,360 | ||||||
H.J. Heinz Co. | 485,000 | 22,688 | ||||||
Kellogg Co. | 340,000 | 17,949 | ||||||
Loews Corp. - Carolina Group | 265,000 | 22,732 | ||||||
Reynolds American, Inc. | 426,400 | 27,473 | ||||||
The Coca-Cola Co. | 406,000 | 25,075 | ||||||
UST, Inc. | 300,500 | 16,023 | ||||||
219,137 | ||||||||
Health Care Equipment & Services 3.2% | ||||||||
AmerisourceBergen Corp. | 150,000 | 7,067 | ||||||
Baxter International, Inc. | 325,000 | 19,503 | ||||||
Becton, Dickinson & Co. | 254,000 | 21,199 | ||||||
McKesson Corp. | 310,000 | 20,491 | ||||||
68,260 | ||||||||
Household & Personal Products 3.2% | ||||||||
Colgate-Palmolive Co. | 235,000 | 17,923 | ||||||
Kimberly-Clark Corp. | 435,000 | 30,837 | ||||||
The Procter & Gamble Co. | 253,950 | 17,655 | ||||||
66,415 |
See financial notes 41
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Insurance 6.3% | ||||||||
Aon Corp. | 396,250 | 17,958 | ||||||
Cincinnati Financial Corp. | 320,000 | 12,729 | ||||||
HCC Insurance Holdings, Inc. | 385,000 | 11,508 | ||||||
Lincoln National Corp. | 300,000 | 18,711 | ||||||
Principal Financial Group, Inc. | 215,000 | 14,549 | ||||||
The Allstate Corp. | 363,200 | 19,032 | ||||||
The Chubb Corp. | 351,000 | 18,726 | ||||||
The Travelers Cos., Inc. | 358,000 | 18,691 | ||||||
131,904 | ||||||||
Materials 7.4% | ||||||||
E.I. du Pont de Nemours & Co. | 335,000 | 16,586 | ||||||
Eastman Chemical Co. | 240,000 | 15,982 | ||||||
International Paper Co. | 500,000 | 18,480 | ||||||
Lyondell Chemical Co. | 300,000 | 14,235 | ||||||
PPG Industries, Inc. | 245,500 | 18,349 | ||||||
Rohm & Haas Co. | 309,000 | 16,031 | ||||||
Temple-Inland, Inc. | 338,300 | 18,157 | ||||||
The Dow Chemical Co. | 362,800 | 16,340 | ||||||
The Lubrizol Corp. | 250,000 | 16,970 | ||||||
Weyerhaeuser Co. | 50,000 | 3,795 | ||||||
154,925 | ||||||||
Media 1.4% | ||||||||
CBS Corp., Class B | 500,000 | 14,350 | ||||||
Regal Entertainment Group, Class A | 500,000 | 11,285 | ||||||
The McGraw-Hill Cos., Inc. | 65,000 | 3,253 | ||||||
28,888 | ||||||||
Pharmaceuticals & Biotechnology 8.3% | ||||||||
Abbott Laboratories | 425,000 | 23,213 | ||||||
Bristol-Myers Squibb Co. | 675,000 | 20,243 | ||||||
Eli Lilly and Co. | 444,000 | 24,043 | ||||||
Johnson & Johnson | 387,000 | 25,221 | ||||||
Merck & Co., Inc. | 560,000 | 32,626 | ||||||
PerkinElmer, Inc. | 270,500 | 7,444 | ||||||
Pfizer, Inc. | 1,100,000 | 27,071 | ||||||
Schering-Plough Corp. | 360,000 | 10,987 | ||||||
Wyeth | 95,000 | 4,620 | ||||||
175,468 | ||||||||
Retailing 0.3% | ||||||||
Genuine Parts Co. | 121,000 | 5,937 | ||||||
Semiconductors & Semiconductor Equipment 2.5% | ||||||||
Analog Devices, Inc. | 290,000 | 9,703 | ||||||
Applied Materials, Inc. | 800,000 | 15,536 | ||||||
Intel Corp. | 1,025,000 | 27,573 | ||||||
52,812 | ||||||||
Software & Services 3.5% | ||||||||
Accenture Ltd., Class A | 235,000 | 9,177 | ||||||
Electronic Data Systems Corp. | 560,000 | 12,090 | ||||||
FactSet Research Systems, Inc. | 100,900 | 7,115 | ||||||
Microsoft Corp. | 950,000 | 34,970 | ||||||
Paychex, Inc. | 266,300 | 11,126 | ||||||
74,478 | ||||||||
Technology Hardware & Equipment 3.2% | ||||||||
Harris Corp. | 180,000 | 10,901 | ||||||
Hewlett-Packard Co. | 520,000 | 26,873 | ||||||
International Business Machines Corp. | 230,000 | 26,708 | ||||||
Seagate Technology | 100,000 | 2,784 | ||||||
67,266 | ||||||||
Telecommunication Services 5.5% | ||||||||
ALLTEL Corp. | 184,800 | 13,148 | ||||||
AT&T, Inc. | 1,253,407 | 52,380 | ||||||
Citizens Communications Co. | 1,180,000 | 15,529 | ||||||
Embarq Corp. | 210,000 | 11,113 | ||||||
Verizon Communications, Inc. | 527,300 | 24,293 | ||||||
116,463 | ||||||||
Utilities 9.9% | ||||||||
Alliant Energy Corp. | 455,000 | 18,200 | ||||||
American Electric Power Co., Inc. | 451,000 | 21,743 | ||||||
Consolidated Edison, Inc. | 135,000 | 6,357 | ||||||
DTE Energy Co. | 425,000 | 21,080 | ||||||
Edison International | 441,000 | 25,644 | ||||||
FirstEnergy Corp. | 364,100 | 25,378 | ||||||
Northeast Utilities | 300,000 | 9,249 | ||||||
ONEOK, Inc. | 125,000 | 6,242 | ||||||
PG&E Corp. | 485,000 | 23,731 | ||||||
Progress Energy, Inc. | 375,000 | 18,000 | ||||||
Public Service Enterprise Group, Inc. | 225,000 | 21,510 | ||||||
TECO Energy, Inc. | 600,000 | 10,098 | ||||||
207,232 | ||||||||
Total Common Stock (Cost $1,739,100) | 2,084,079 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.3% of net assets | ||||||||
Commercial Paper & Other Obligations 0.3% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 5,052 | 5,052 |
42 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
4.24%, 12/20/07 (a) | 785 | 781 | ||||||
Total Short-Term Investments (Cost $5,833) | 5,833 | |||||||
End of Investments. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $1,744,933, and the unrealized appreciation and depreciation were $379,642 and ($34,663), respectively, with a net unrealized appreciation of $344,979. |
(a) | All or a portion of this security is held as collateral for open futures contracts. |
In addition to the above, the fund held the following at
10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Losses | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 150 | 11,662 | (131 | ) |
See financial notes 43
Table of Contents
Schwab Dividend Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $1,744,933) | $2,089,912 | |||||
Receivables: | ||||||
Investments sold | 20,914 | |||||
Dividends | 3,095 | |||||
Fund shares sold | 1,999 | |||||
Due from broker for futures | 142 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 9 | ||||
Total assets | 2,116,072 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 12,632 | |||||
Investment adviser and administrator fees | 129 | |||||
Transfer agent and shareholder service fees | 26 | |||||
Fund shares redeemed | 2,459 | |||||
Accrued expenses | + | 83 | ||||
Total liabilities | 15,329 | |||||
Net Assets | ||||||
Total assets | 2,116,072 | |||||
Total liabilities | − | 15,329 | ||||
Net assets | 2,100,743 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,747,053 | |||||
Net investment income not yet distributed | 1,709 | |||||
Net realized capital gains | 7,133 | |||||
Net unrealized capital gains | 344,848 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $760,257 | 48,413 | $15.70 | ||||||||
Select Shares | $1,340,486 | 85,584 | $15.66 |
44 See financial notes
Table of Contents
Schwab Dividend Equity Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $49,745 | |||||
Interest | + | 1,057 | ||||
Total Investment Income | 50,802 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 7,275 | |||||
Net realized gains on futures contracts | + | 979 | ||||
Net realized gains | 8,254 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 139,173 | |||||
Net unrealized losses on futures contracts | + | (380 | ) | |||
Net unrealized gains | 138,793 | |||||
Expenses | ||||||
Investment advisor and administrator fees | 14,246 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 1,863 | |||||
Select Shares | 1,113 | |||||
Registration fees | 187 | |||||
Shareholder reports | 91 | |||||
Portfolio accounting fees | 77 | |||||
Professional fees | 39 | |||||
Custodian fees | 38 | |||||
Trustees’ fees | 14 | |||||
Overdraft expense | 5 | |||||
Other expenses | + | 14 | ||||
Net expenses | 17,687 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 50,802 | |||||
Net expenses | − | 17,687 | ||||
Net investment income | 33,115 | |||||
Net realized gains | 8,254 | |||||
Net unrealized gains | + | 138,793 | ||||
Increase in net assets from operations | $180,162 |
See financial notes 45
Table of Contents
Schwab Dividend Equity Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $33,115 | $20,642 | ||||||
Net realized gains | 8,254 | 28,998 | ||||||
Net unrealized gains | + | 138,793 | 134,928 | |||||
Increase in net assets from operations | 180,162 | 184,568 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 11,773 | 9,859 | ||||||
Select Shares | + | 20,876 | 11,451 | |||||
Total distributions from net investment income | $32,649 | $21,310 | ||||||
Distributions from net realized gains | ||||||||
Investor Shares | 13,513 | 6,743 | ||||||
Select Shares | + | 16,664 | 6,563 | |||||
Total distributions from net realized gains | $30,177 | $13,306 | ||||||
Total distributions | $62,826 | $34,616 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 19,321 | $294,567 | 14,325 | $196,579 | ||||||||||||||
Select Shares | + | 49,096 | 751,702 | 19,222 | 265,952 | |||||||||||||
Total shares sold | 68,417 | $1,046,269 | 33,547 | $462,531 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 1,412 | $21,131 | 1,006 | $13,421 | ||||||||||||||
Select Shares | + | 1,561 | 23,343 | 972 | 12,969 | |||||||||||||
Total shares reinvested | 2,973 | $44,474 | 1,978 | $26,390 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (15,025 | ) | ($230,326 | ) | (13,861 | ) | ($187,504 | ) | ||||||||||
Select Shares | + | (14,990 | ) | (229,725 | ) | (10,090 | ) | (135,743 | ) | |||||||||
Total shares redeemed | (30,015 | ) | ($460,051 | ) | (23,951 | ) | ($323,247 | ) | ||||||||||
Net transactions in fund shares | 41,375 | $630,692 | 11,574 | $165,674 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 92,622 | $1,352,715 | 81,048 | $1,037,089 | ||||||||||||||
Total increase | + | 41,375 | 748,028 | 11,574 | 315,626 | |||||||||||||
End of period | 133,997 | $2,100,743 | 92,622 | $1,352,715 | ||||||||||||||
Net investment income not yet distributed | $1,709 | $1,243 |
46 See financial notes
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 10/3/051- | ||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | |||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 11.07 | 9.73 | 10.00 | |||||||||
Income / (loss) from investment operations: | ||||||||||||
Net investment income / (loss) | 0.02 | 0.01 | (0.00 | )2 | ||||||||
Net realized and unrealized gains or losses | 1.67 | 1.33 | (0.27 | ) | ||||||||
Total income / (loss) from investment operations | 1.69 | 1.34 | (0.27 | ) | ||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.01 | ) | (0.00 | )2 | — | |||||||
Net asset value at end of period | 12.75 | 11.07 | 9.73 | |||||||||
Total return (%) | 15.32 | 13.80 | (2.70 | )3 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses | 1.18 | 1.20 | 1.20 | 4 | ||||||||
Gross operating expenses | 1.18 | 1.26 | 1.71 | 4 | ||||||||
Net investment income or loss | 0.22 | 0.09 | (0.61 | )4 | ||||||||
Portfolio turnover rate | 30 | 53 | 4 | 3 | ||||||||
Net assets, end of period ($ x 1,000,000) | 119 | 70 | 25 |
11/1/06- | 11/1/05- | 10/3/051- | ||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | |||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 11.09 | 9.73 | 10.00 | |||||||||
Income / (loss) from investment operations: | ||||||||||||
Net investment income / (loss) | 0.04 | 0.02 | (0.00 | )2 | ||||||||
Net realized and unrealized gains or losses | 1.67 | 1.35 | (0.27 | ) | ||||||||
Total income / (loss) from investment operations | 1.71 | 1.37 | (0.27 | ) | ||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.03 | ) | (0.01 | ) | — | |||||||
Net asset value at end of period | 12.77 | 11.09 | 9.73 | |||||||||
Total return (%) | 15.47 | 14.04 | (2.70 | )3 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses | 0.99 | 0.99 | 0.99 | 4 | ||||||||
Gross operating expenses | 1.03 | 1.12 | 1.56 | 4 | ||||||||
Net investment income or loss | 0.33 | 0.26 | (0.40 | )4 | ||||||||
Portfolio turnover rate | 30 | 53 | 4 | 3 | ||||||||
Net assets, end of period ($ x 1,000,000) | 492 | 107 | 33 |
1 Commencement of operations.
2 Per share amount was less then $0.01.
3 Not annualized.
4 Annualized.
See financial notes 47
Table of Contents
Schwab Large Cap Growth Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99 | .5% | Common Stock | 532,158 | 607,528 | ||||||||
0 | .3% | Foreign Common Stock | 843 | 1,853 | ||||||||
0 | .6% | Short-Term Investments | 3,839 | 3,839 | ||||||||
100 | .4% | Total Investments | 536,840 | 613,220 | ||||||||
3 | .9% | Collateral Invested for Securities on Loan | 24,051 | 24,051 | ||||||||
(4 | .3)% | Other Assets and Liabilities, Net | (26,550 | ) | ||||||||
100 | .0% | Total Net Assets | 610,721 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 99.5% of net assets | ||||||||
Automobiles & Components 0.5% | ||||||||
The Goodyear Tire & Rubber Co. * | 93,200 | 2,810 | ||||||
Capital Goods 11.6% | ||||||||
Cooper Industries Ltd., Class A | 111,800 | 5,857 | ||||||
Emerson Electric Co. | 14,600 | 763 | ||||||
ITT Corp. | 48,000 | 3,212 | ||||||
Lockheed Martin Corp. | 266,200 | 29,293 | ||||||
Raytheon Co. | 122,800 | 7,811 | ||||||
The Boeing Co. | 242,100 | 23,869 | ||||||
Thomas & Betts Corp. * | 4,300 | 241 | ||||||
71,046 | ||||||||
Consumer Durables & Apparel 1.1% | ||||||||
Hasbro, Inc. (a) | 93,000 | 2,776 | ||||||
Newell Rubbermaid, Inc. | 131,300 | 3,829 | ||||||
6,605 | ||||||||
Consumer Services 1.8% | ||||||||
ITT Educational Services, Inc. (a) * | 83,900 | 10,671 | ||||||
Diversified Financials 4.8% | ||||||||
American Express Co. | 45,000 | 2,743 | ||||||
Bank of America Corp. | 20,700 | 1,000 | ||||||
Bank of New York Mellon Corp. | 79,000 | 3,859 | ||||||
Franklin Resources, Inc. | 133,800 | 17,351 | ||||||
JPMorgan Chase & Co. | 73,900 | 3,473 | ||||||
Northern Trust Corp. (a) | 15,000 | 1,128 | ||||||
29,554 | ||||||||
Energy 6.7% | ||||||||
Exxon Mobil Corp. | 210,800 | 19,391 | ||||||
Frontier Oil Corp. | 64,000 | 2,931 | ||||||
Holly Corp. | 175,000 | 10,990 | ||||||
Marathon Oil Corp. | 125,000 | 7,391 | ||||||
40,703 | ||||||||
Food, Beverage & Tobacco 3.3% | ||||||||
Altria Group, Inc. | 60,000 | 4,376 | ||||||
ConAgra Foods, Inc. | 29,500 | 700 | ||||||
General Mills, Inc. | 128,100 | 7,395 | ||||||
H.J. Heinz Co. | 23,500 | 1,100 | ||||||
Loews Corp. - Carolina Group | 49,500 | 4,246 | ||||||
The Coca-Cola Co. | 35,800 | 2,211 | ||||||
20,028 | ||||||||
Health Care Equipment & Services 8.5% | ||||||||
Aetna, Inc. | 19,900 | 1,118 | ||||||
Baxter International, Inc. | 320,000 | 19,203 | ||||||
Becton, Dickinson & Co. | 60,800 | 5,075 | ||||||
CIGNA Corp. | 40,500 | 2,126 | ||||||
Express Scripts, Inc. * | 18,000 | 1,136 | ||||||
Humana, Inc. * | 144,100 | 10,800 | ||||||
Kinetic Concepts, Inc. * | 52,000 | 3,125 | ||||||
Laboratory Corp. of America Holdings * | 6,300 | 433 | ||||||
McKesson Corp. | 78,500 | 5,189 | ||||||
WellPoint, Inc. * | 43,700 | 3,462 | ||||||
51,667 | ||||||||
Household & Personal Products 2.2% | ||||||||
Energizer Holdings, Inc. * | 128,000 | 13,350 | ||||||
Insurance 5.2% | ||||||||
AFLAC, Inc. | 154,300 | 9,687 | ||||||
Axis Capital Holdings Ltd. | 80,000 | 3,179 | ||||||
HCC Insurance Holdings, Inc. | 20,200 | 604 | ||||||
MetLife, Inc. | 37,500 | 2,582 | ||||||
Principal Financial Group, Inc. | 23,500 | 1,590 | ||||||
Prudential Financial, Inc. | 33,500 | 3,240 | ||||||
The Travelers Cos., Inc. | 41,500 | 2,167 | ||||||
W. R. Berkley Corp. | 290,300 | 8,735 | ||||||
31,784 | ||||||||
Materials 8.0% | ||||||||
AK Steel Holding Corp. * | 158,500 | 7,946 | ||||||
Celanese Corp., Series A | 544,900 | 22,864 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 74,080 | 8,718 | ||||||
Lyondell Chemical Co. | 43,600 | 2,069 | ||||||
Owens-Illinois, Inc. * | 55,000 | 2,443 | ||||||
Sonoco Products Co. | 109,000 | 3,370 |
48 See financial notes
Table of Contents
Schwab Large Cap Growth Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
The Lubrizol Corp. | 25,200 | 1,710 | ||||||
49,120 | ||||||||
Media 1.7% | ||||||||
Liberty Global, Inc., Series A (a) * | 140,500 | 5,514 | ||||||
Omnicom Group, Inc. | 64,000 | 3,263 | ||||||
The Walt Disney Co. | 46,000 | 1,593 | ||||||
10,370 | ||||||||
Pharmaceuticals & Biotechnology 10.0% | ||||||||
Abbott Laboratories | 27,000 | 1,475 | ||||||
Applied Biosystems Group-Applera Corp. | 120,500 | 4,475 | ||||||
Biogen Idec, Inc. * | 143,000 | 10,645 | ||||||
Endo Pharmaceutical Holdings, Inc. * | 40,000 | 1,172 | ||||||
Forest Laboratories, Inc. * | 35,000 | 1,367 | ||||||
King Pharmaceuticals, Inc. * | 86,100 | 913 | ||||||
Merck & Co., Inc. | 364,100 | 21,213 | ||||||
Pfizer, Inc. | 537,100 | 13,218 | ||||||
Schering-Plough Corp. | 225,100 | 6,870 | ||||||
61,348 | ||||||||
Retailing 3.5% | ||||||||
Amazon.com, Inc. * | 144,000 | 12,838 | ||||||
eBay, Inc. * | 165,500 | 5,974 | ||||||
Expedia, Inc. * | 57,500 | 1,878 | ||||||
GameStop Corp., Class A * | 15,000 | 888 | ||||||
21,578 | ||||||||
Semiconductors & Semiconductor Equipment 3.2% | ||||||||
Intel Corp. | 390,000 | 10,491 | ||||||
MEMC Electronic Materials, Inc. * | 10,000 | 732 | ||||||
NVIDIA Corp. * | 120,000 | 4,246 | ||||||
Texas Instruments, Inc. | 120,000 | 3,912 | ||||||
19,381 | ||||||||
Software & Services 9.8% | ||||||||
Accenture Ltd., Class A | 280,000 | 10,934 | ||||||
Autodesk, Inc. * | 84,400 | 4,127 | ||||||
BMC Software, Inc. * | 231,500 | 7,834 | ||||||
Cadence Design Systems, Inc. (a) * | 273,500 | 5,361 | ||||||
Electronic Data Systems Corp. | 106,000 | 2,288 | ||||||
Google, Inc., Class A * | 10,000 | 7,070 | ||||||
Intuit, Inc. * | 29,000 | 933 | ||||||
Microsoft Corp. | 75,000 | 2,761 | ||||||
Oracle Corp. * | 175,000 | 3,880 | ||||||
Symantec Corp. * | 131,000 | 2,460 | ||||||
Synopsys, Inc. * | 93,500 | 2,642 | ||||||
Total System Services, Inc. (a) | 310,700 | 9,309 | ||||||
59,599 | ||||||||
Technology Hardware & Equipment 13.9% | ||||||||
Agilent Technologies, Inc. * | 47,700 | 1,758 | ||||||
Apple, Inc. * | 50,000 | 9,497 | ||||||
Cisco Systems, Inc. * | 348,700 | 11,528 | ||||||
Dolby Laboratories, Inc., Class A * | 117,500 | 4,872 | ||||||
Hewlett-Packard Co. | 530,000 | 27,390 | ||||||
International Business Machines Corp. | 215,900 | 25,070 | ||||||
NCR Corp. * | 67,500 | 1,862 | ||||||
Seagate Technology | 25,000 | 696 | ||||||
Sun Microsystems, Inc. * | 50,000 | 286 | ||||||
Teradata Corp. * | 67,500 | 1,926 | ||||||
84,885 | ||||||||
Telecommunication Services 0.5% | ||||||||
Citizens Communications Co. | 177,300 | 2,333 | ||||||
Qwest Communications International, Inc. * | 88,900 | 639 | ||||||
2,972 | ||||||||
Transportation 0.2% | ||||||||
Continental Airlines, Inc., Class B * | 43,500 | 1,494 | ||||||
Utilities 3.0% | ||||||||
Edison International | 5,500 | 320 | ||||||
Exelon Corp. | 70,300 | 5,819 | ||||||
ONEOK, Inc. | 88,200 | 4,405 | ||||||
PG&E Corp. | 28,500 | 1,395 | ||||||
Public Service Enterprise Group, Inc. | 41,300 | 3,948 | ||||||
The AES Corp. * | 125,000 | 2,676 | ||||||
18,563 | ||||||||
Total Common Stock (Cost $532,158) | 607,528 | |||||||
Foreign Common Stock 0.3% of net assets | ||||||||
Bermuda 0.3% | ||||||||
Capital Goods 0.3% | ||||||||
Foster Wheeler Ltd. * | 12,500 | 1,853 | ||||||
Total Foreign Common Stock (Cost $843) | 1,853 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.6% of net assets | ||||||||
Commercial Paper & Other Obligations 0.6% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 3,705 | 3,705 |
See financial notes 49
Table of Contents
Schwab Large Cap Growth Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
4.24%, 12/20/07 (b) | 135 | 134 | ||||||
Total Short-Term Investments (Cost $3,839) | 3,839 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 3.9% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 24,050,699 | 24,051 | ||||||
End of collateral invested for securities on loan. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $536,927, and the unrealized appreciation and depreciation were $87,381 and ($11,088), respectively, with a net unrealized appreciation of $76,293. |
* | Non-income producing security. | |
(a) | All or portion of security is on loan. | |
(b) | All or a portion of this security is held as collateral for futures contracts. |
In addition to the above, the fund held the following at
10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Losses | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 15 | 1,166 | (12 | ) |
50 See financial notes
Table of Contents
Schwab Large Cap-Growth Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $24,339 (cost $536,840) | $613,220 | |||||
Collateral invested for securities on loan | 24,051 | |||||
Receivables: | ||||||
Fund shares sold | 1,472 | |||||
Dividends | 359 | |||||
Due from broker for futures | 14 | |||||
Income from securities on loan | 11 | |||||
Prepaid expenses | + | 2 | ||||
Total assets | 639,129 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | $24,051 | |||||
Payables: | ||||||
Investments bought | 3,486 | |||||
Investment adviser and administrator fees | 52 | |||||
Transfer agent and shareholder service fees | 9 | |||||
Fund shares redeemed | 760 | |||||
Accrued expenses | + | 50 | ||||
Total liabilities | 28,408 | |||||
Net Assets | ||||||
Total assets | 639,129 | |||||
Total liabilities | − | 28,408 | ||||
Net assets | 610,721 | |||||
Net Assets by Source | ||||||
Capital received from investors | 538,405 | |||||
Net investment income not yet distributed | 867 | |||||
Net realized capital losses | (4,919 | ) | ||||
Net unrealized capital gains | 76,368 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $118,594 | 9,302 | $12.75 | ||||||||
Select Shares | $492,127 | 38,529 | $12.77 |
See financial notes 51
Table of Contents
Schwab Large Cap-Growth Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $4,993 | |||||
Interest | 573 | |||||
Securities on loan | + | 25 | ||||
Total Investment Income | 5,591 | |||||
Net Realized Gains and Losses | ||||||
Net realized losses on investments | (2,572 | ) | ||||
Net realized gains on futures contracts | + | 531 | ||||
Net realized losses | (2,041 | ) | ||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 61,543 | |||||
Net unrealized losses on futures contracts | + | (17 | ) | |||
Net unrealized gains | 61,526 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,627 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 240 | |||||
Select Shares | 321 | |||||
Registration fees | 100 | |||||
Professional fees | 33 | |||||
Portfolio accounting fees | 43 | |||||
Shareholder reports | 50 | |||||
Custodian fees | 16 | |||||
Trustees’ fees | 8 | |||||
Other expenses | + | 3 | ||||
Total expenses | 4,441 | |||||
Expense reduction by adviser and Schwab | − | 129 | ||||
Net expenses | 4,312 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 5,591 | |||||
Net expenses | − | 4,312 | ||||
Net investment income | 1,279 | |||||
Net realized losses | (2,041 | ) | ||||
Net unrealized gains | + | 61,526 | ||||
Increase in net assets from operations | $60,764 |
52 See financial notes
Table of Contents
Schwab Large Cap-Growth Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||
Net investment income | $1,279 | $168 | ||||||||
Net realized losses | (2,041 | ) | (2,707 | ) | ||||||
Net unrealized gains | + | 61,526 | 16,030 | |||||||
Increase in net assets from operations | 60,764 | 13,491 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ||||||||||
Investor Shares | 92 | 7 | ||||||||
Select Shares | + | 458 | 23 | |||||||
Total distributions from net investment income | $550 | $30 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 5,538 | $65,288 | 5,260 | $54,737 | ||||||||||||||
Select Shares | + | 32,748 | 384,845 | 7,872 | 83,122 | |||||||||||||
Total shares sold | 38,286 | $450,133 | 13,132 | $137,859 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 7 | $80 | 1 | $7 | ||||||||||||||
Select Shares | + | 10 | 110 | 2 | 18 | |||||||||||||
Total shares reinvested | 17 | $190 | 3 | $25 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (2,566 | ) | ($30,404 | ) | (1,554 | ) | ($16,061 | ) | ||||||||||
Select Shares | + | (3,868 | ) | (46,276 | ) | (1,620 | ) | (16,801 | ) | |||||||||
Total shares redeemed | (6,434 | ) | ($76,680 | ) | (3,174 | ) | ($32,862 | ) | ||||||||||
Net transactions in fund shares | 31,869 | $373,643 | 9,961 | $105,022 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 15,962 | $176,864 | 6,001 | $58,381 | ||||||||||||||
Total increase | + | 31,869 | 433,857 | 9,961 | 118,483 | |||||||||||||
End of period | 47,831 | $610,721 | 15,962 | $176,864 | ||||||||||||||
Net investment income not yet distributed | $867 | $138 |
See financial notes 53
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 07/1/031- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 17.72 | 15.72 | 14.13 | 11.81 | 10.00 | |||||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||||||
Net investment income / (loss) | (0.09 | ) | (0.05 | ) | 0.01 | (0.04 | ) | (0.02 | ) | |||||||||||
Net realized and unrealized gains | 0.55 | 2.48 | 3.12 | 2.58 | 1.83 | |||||||||||||||
Total income / (loss) from investment operations | 0.46 | 2.43 | 3.13 | 2.54 | 1.81 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | — | (0.00 | )2 | — | — | — | ||||||||||||||
Distributions from net realized gains | (0.08 | ) | (0.43 | ) | (1.54 | ) | (0.22 | ) | — | |||||||||||
Total distributions | (0.08 | ) | (0.43 | ) | (1.54 | ) | (0.22 | ) | — | |||||||||||
Net asset value at end of period | 18.10 | 17.72 | 15.72 | 14.13 | 11.81 | |||||||||||||||
Total return (%) | 2.59 | 15.71 | 23.65 | 21.74 | 18.10 | 3 | ||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 1.24 | 1.29 | 1.28 | 1.30 | 1.30 | 4 | ||||||||||||||
Gross operating expenses | 1.24 | 1.29 | 1.38 | 1.61 | 1.73 | 4 | ||||||||||||||
Net investment income or loss | (0.43 | ) | (0.39 | ) | 0.11 | (0.35 | ) | (0.54 | )4 | |||||||||||
Portfolio turnover rate | 106 | 82 | 90 | 118 | 39 | 3 | ||||||||||||||
Net assets, end of period ($ x 1,000,000) | 420 | 431 | 170 | 37 | 26 |
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 07/1/031- | ||||||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 17.80 | 15.78 | 14.16 | 11.81 | 10.00 | |||||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||||||
Net investment income / (loss) | (0.10 | ) | (0.02 | ) | 0.00 | 2 | (0.02 | ) | (0.01 | ) | ||||||||||
Net realized and unrealized gains | 0.60 | 2.49 | 3.16 | 2.59 | 1.82 | |||||||||||||||
Total income / (loss) from investment operations | 0.50 | 2.47 | 3.16 | 2.57 | 1.81 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | — | (0.02 | ) | — | — | — | ||||||||||||||
Distributions from net realized gains | (0.08 | ) | (0.43 | ) | (1.54 | ) | (0.22 | ) | — | |||||||||||
Total distributions | (0.08 | ) | (0.45 | ) | (1.54 | ) | (0.22 | ) | — | |||||||||||
Net asset value at end of period | 18.22 | 17.80 | 15.78 | 14.16 | 11.81 | |||||||||||||||
Total return (%) | 2.80 | 15.89 | 23.83 | 22.00 | 18.10 | 3 | ||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 1.09 | 1.12 | 1.11 | 1.12 | 1.12 | 4 | ||||||||||||||
Gross operating expenses | 1.09 | 1.14 | 1.23 | 1.46 | 1.58 | 4 | ||||||||||||||
Net investment income or loss | (0.28 | ) | (0.21 | ) | 0.09 | (0.16 | ) | (0.36 | )4 | |||||||||||
Portfolio turnover rate | 106 | 82 | 90 | 118 | 39 | 3 | ||||||||||||||
Net assets, end of period ($ x 1,000,000) | 228 | 276 | 80 | 18 | 14 |
1 Commencement of operations.
2 Per share amount was less than $0.01.
3 Not annualized.
4 Annualized.
54 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
98 | .7% | Common Stock | 585,344 | 639,733 | ||||||||
0 | .8% | Foreign Common Stock | 5,171 | 5,209 | ||||||||
0 | .5% | Short-Term Investments | 3,559 | 3,559 | ||||||||
100 | .0% | Total Investments | 594,074 | 648,501 | ||||||||
5 | .7% | Collateral Invested for Securities on Loan | 36,910 | 36,910 | ||||||||
(5 | .7)% | Other Assets and Liabilities, Net | (37,064 | ) | ||||||||
100 | .0% | Total Net Assets | 648,347 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 98.7% of net assets | ||||||||
Automobiles & Components 0.4% | ||||||||
Drew Industries, Inc. * | 47,900 | 1,896 | ||||||
Standard Motor Products, Inc. (a) | 114,500 | 957 | ||||||
2,853 | ||||||||
Banks 2.4% | ||||||||
BancFirst Corp. (a) | 63,600 | 2,890 | ||||||
BancorpSouth, Inc. | 50,700 | 1,230 | ||||||
Bank of Hawaii Corp. | 101,300 | 5,385 | ||||||
Commerce Bancshares, Inc. | 34,300 | 1,618 | ||||||
Federal Agricultural Mortgage Corp., Class C | 14,900 | 437 | ||||||
First Citizens BancShares, Inc., Class A | 3,900 | 635 | ||||||
Ocwen Financial Corp. * | 60,000 | 448 | ||||||
SVB Financial Group (a) * | 55,000 | 2,848 | ||||||
15,491 | ||||||||
Capital Goods 14.8% | ||||||||
Accuride Corp. * | 106,300 | 1,084 | ||||||
Acuity Brands, Inc. | 253,900 | 12,136 | ||||||
AGCO Corp. * | 185,200 | 11,053 | ||||||
Belden CDT, Inc. | 184,600 | 10,757 | ||||||
Crane Co. | 252,900 | 11,998 | ||||||
Cubic Corp. | 50,500 | 2,272 | ||||||
EMCOR Group, Inc. * | 451,000 | 15,528 | ||||||
EnPro Industries, Inc. * | 48,200 | 1,977 | ||||||
GrafTech International Ltd. * | 142,600 | 2,695 | ||||||
Teleflex, Inc. | 152,700 | 11,179 | ||||||
Thomas & Betts Corp. * | 207,700 | 11,633 | ||||||
Wabtec Corp. (a) | 91,900 | 3,449 | ||||||
95,761 | ||||||||
Commercial Services & Supplies 5.3% | ||||||||
ABM Industries, Inc. | 367,300 | 8,639 | ||||||
Heidrick & Struggles International, Inc. | 12,600 | 545 | ||||||
IHS, Inc., Class A * | 55,300 | 3,487 | ||||||
IKON Office Solutions, Inc. | 704,200 | 9,295 | ||||||
Spherion Corp. * | 465,700 | 4,061 | ||||||
Steelcase, Inc., Class A | 45,100 | 806 | ||||||
Viad Corp. | 213,700 | 7,573 | ||||||
34,406 | ||||||||
Consumer Durables & Apparel 4.6% | ||||||||
American Greetings Corp., Class A | 305,800 | 8,055 | ||||||
Blyth, Inc. | 432,300 | 8,252 | ||||||
Furniture Brands International, Inc. (a) | 467,700 | 5,636 | ||||||
Kellwood Co. | 179,900 | 2,981 | ||||||
Phillips-Van Heusen Corp. | 106,700 | 5,100 | ||||||
30,024 | ||||||||
Consumer Services 4.1% | ||||||||
Career Education Corp. * | 155,700 | 5,565 | ||||||
DeVry, Inc. | 344,200 | 18,824 | ||||||
Service Corp. International | 162,700 | 2,354 | ||||||
26,743 | ||||||||
Diversified Financials 2.2% | ||||||||
Advanta Corp., Class B | 60,300 | 953 | ||||||
Federated Investors, Inc., Class B | 314,700 | 13,532 | ||||||
14,485 | ||||||||
Energy 6.2% | ||||||||
Frontier Oil Corp. | 49,200 | 2,253 | ||||||
Global Industries Ltd. * | 717,000 | 17,653 | ||||||
Holly Corp. | 96,600 | 6,067 | ||||||
Massey Energy Co. | 41,300 | 1,308 | ||||||
NATCO Group, Inc., Class A * | 4,800 | 256 | ||||||
SEACOR Holdings, Inc. * | 96,000 | 8,798 | ||||||
Stone Energy Corp. * | 80,600 | 3,593 | ||||||
39,928 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
BJ’s Wholesale Club, Inc. (a) * | 121,000 | 4,342 | ||||||
Food, Beverage & Tobacco 1.3% | ||||||||
Alliance One International, Inc. * | 666,000 | 4,349 | ||||||
Imperial Sugar Co. (a) * | 22,200 | 572 | ||||||
Seaboard Corp. | 310 | 506 | ||||||
Universal Corp. | 65,300 | 3,183 | ||||||
8,610 |
See financial notes 55
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Health Care Equipment & Services 8.8% | ||||||||
American Dental Partners, Inc. * | 85,800 | 2,127 | ||||||
AMERIGROUP Corp. * | 167,100 | 5,848 | ||||||
Analogic Corp. | 133,500 | 7,630 | ||||||
Apria Healthcare Group, Inc. * | 173,900 | 4,203 | ||||||
CONMED Corp. * | 69,800 | 1,985 | ||||||
Emergency Medical Services Corp., Class A (a) * | 85,200 | 2,588 | ||||||
Greatbatch, Inc. (a) * | 347,700 | 8,644 | ||||||
Magellan Health Services, Inc. * | 249,600 | 10,508 | ||||||
MedCath Corp. * | 257,500 | 7,140 | ||||||
Molina Healthcare, Inc. * | 62,500 | 2,382 | ||||||
Omnicell, Inc. * | 146,300 | 3,862 | ||||||
56,917 | ||||||||
Household & Personal Products 0.7% | ||||||||
NBTY, Inc. * | 121,400 | 4,322 | ||||||
Insurance 5.7% | ||||||||
American Financial Group, Inc. | 198,300 | 5,929 | ||||||
American Physicians Capital, Inc. | 44,350 | 1,932 | ||||||
Delphi Financial Group, Inc., Class A | 292,625 | 11,339 | ||||||
FBL Financial Group, Inc., Class A | 53,900 | 2,182 | ||||||
Hanover Insurance Group, Inc. | 700 | 32 | ||||||
Harleysville Group, Inc. | 107,600 | 3,354 | ||||||
HCC Insurance Holdings, Inc. | 57,100 | 1,707 | ||||||
Philadelphia Consolidated Holding Corp. * | 105,400 | 4,300 | ||||||
Reinsurance Group of America, Inc. | 63,500 | 3,628 | ||||||
The Navigators Group, Inc. * | 9,200 | 555 | ||||||
United America Indemnity Ltd., Class A * | 102,400 | 2,258 | ||||||
37,216 | ||||||||
Materials 8.3% | ||||||||
AK Steel Holding Corp. * | 102,700 | 5,148 | ||||||
Albemarle Corp. | 130,000 | 6,209 | ||||||
Ashland, Inc. | 43,300 | 2,543 | ||||||
CF Industries Holdings, Inc. | 38,000 | 3,340 | ||||||
FMC Corp. | 50,000 | 2,875 | ||||||
H.B. Fuller Co. | 311,500 | 9,167 | ||||||
Headwaters, Inc. (a) * | 326,900 | 4,691 | ||||||
OM Group, Inc. * | 123,500 | 6,543 | ||||||
Packaging Corp. of America | 64,500 | 2,054 | ||||||
Rockwood Holdings, Inc. * | 187,800 | 7,341 | ||||||
Schweitzer-Mauduit International, Inc. | 23,600 | 661 | ||||||
Sonoco Products Co. | 110,500 | 3,417 | ||||||
53,989 | ||||||||
Media 2.2% | ||||||||
DreamWorks Animation SKG, Inc., Class A * | 266,200 | 8,667 | ||||||
Gemstar — TV Guide International, Inc. * | 443,200 | 3,054 | ||||||
Regal Entertainment Group, Class A (a) | 107,000 | 2,415 | ||||||
14,136 | ||||||||
Pharmaceuticals & Biotechnology 2.8% | ||||||||
Invitrogen Corp. * | 115,800 | 10,523 | ||||||
King Pharmaceuticals, Inc. * | 41,500 | 440 | ||||||
Medicis Pharmaceutical Corp., Class A (a) | 37,100 | 1,101 | ||||||
MGI Pharma, Inc. * | 49,900 | 1,626 | ||||||
OSI Pharmaceuticals, Inc. * | 7,600 | 316 | ||||||
Regeneron Pharmaceuticals, Inc. * | 57,400 | 1,263 | ||||||
Sciele Pharma, Inc. (a) * | 110,400 | 2,808 | ||||||
18,077 | ||||||||
Real Estate 0.1% | ||||||||
Essex Property Trust, Inc. | 1,500 | 185 | ||||||
Kilroy Realty Corp. (a) | 2,000 | 130 | ||||||
315 | ||||||||
Retailing 2.9% | ||||||||
Blockbuster, Inc., Class A (a) * | 279,800 | 1,472 | ||||||
The Cato Corp., Class A | 66,400 | 1,333 | ||||||
The Gymboree Corp. * | 65,200 | 2,219 | ||||||
The Men’s Wearhouse, Inc. | 304,700 | 12,876 | ||||||
The Pep Boys - Manny, Moe & Jack | 62,800 | 924 | ||||||
18,824 | ||||||||
Semiconductors & Semiconductor Equipment 4.9% | ||||||||
Advanced Energy Industries, Inc. * | 283,100 | 4,530 | ||||||
Atmel Corp. * | 357,100 | 1,746 | ||||||
Credence Systems Corp. * | 1,211,600 | 3,695 | ||||||
Genesis Microchip, Inc. * | 90,500 | 668 | ||||||
Integrated Device Technology, Inc. * | 189,300 | 2,542 | ||||||
Photronics, Inc. * | 390,800 | 4,275 | ||||||
Teradyne, Inc. * | 378,800 | 4,675 | ||||||
Zoran Corp. * | 375,100 | 9,565 | ||||||
31,696 | ||||||||
Software & Services 10.2% | ||||||||
Ariba, Inc. * | 84,000 | 1,087 | ||||||
Convergys Corp. * | 249,100 | 4,566 | ||||||
CSG Systems International, Inc. * | 485,600 | 9,969 | ||||||
FactSet Research Systems, Inc. | 63,400 | 4,471 | ||||||
Global Payments, Inc. | 68,500 | 3,258 | ||||||
Hewitt Associates, Inc., Class A * | 140,100 | 4,943 | ||||||
j2 Global Communications, Inc. (a) * | 37,800 | 1,274 | ||||||
Novell, Inc. * | 1,333,300 | 10,080 | ||||||
SPSS, Inc. * | 25,100 | 954 | ||||||
Sybase, Inc. * | 557,000 | 15,930 | ||||||
Sykes Enterprises, Inc. * | 96,400 | 1,701 | ||||||
Synopsys, Inc. * | 137,100 | 3,874 | ||||||
Vignette Corp. * | 214,100 | 3,691 | ||||||
65,798 |
56 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Technology Hardware & Equipment 6.4% | ||||||||
ADC Telecommunications, Inc. * | 37,300 | 698 | ||||||
AVX Corp. | 12,400 | 192 | ||||||
Checkpoint Systems, Inc. * | 37,500 | 1,134 | ||||||
Dolby Laboratories, Inc., Class A * | 231,500 | 9,598 | ||||||
Emulex Corp. * | 420,900 | 9,117 | ||||||
Methode Electronics, Inc. | 356,700 | 4,473 | ||||||
Mettler-Toledo International, Inc. * | 24,800 | 2,637 | ||||||
Tech Data Corp. * | 224,600 | 8,834 | ||||||
Vishay Intertechnology, Inc. * | 406,700 | 5,120 | ||||||
41,803 | ||||||||
Telecommunication Services 0.2% | ||||||||
Syniverse Holdings, Inc. * | 54,500 | 910 | ||||||
USA Mobility, Inc. * | 21,100 | 330 | ||||||
1,240 | ||||||||
Transportation 2.0% | ||||||||
Con-way, Inc. | 172,900 | 7,367 | ||||||
Continental Airlines, Inc., Class B * | 161,500 | 5,548 | ||||||
12,915 | ||||||||
Utilities 1.5% | ||||||||
ALLETE, Inc. (a) | 145,600 | 6,361 | ||||||
Atmos Energy Corp. | 5,100 | 143 | ||||||
Nicor, Inc. (a) | 63,100 | 2,731 | ||||||
Northwest Natural Gas Co. | 12,600 | 607 | ||||||
9,842 | ||||||||
Total Common Stock (Cost $585,344) | 639,733 | |||||||
Foreign Common Stock 0.8% of net assets | ||||||||
Bermuda 0.8% | ||||||||
Insurance 0.8% | ||||||||
Platinum Underwriters Holdings Ltd. | 144,700 | 5,209 | ||||||
Total Foreign Common Stock (Cost $5,171) | 5,209 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.5% of net assets | ||||||||
Commercial Paper & Other Obligations 0.4% | ||||||||
Bank of America, London Time Depost | ||||||||
4.75%, 11/01/07 | 3,096 | 3,096 | ||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
3.85%, 12/20/07 (b) | 65 | 65 | ||||||
3.89%, 12/20/07 (b) | 400 | 398 | ||||||
463 | ||||||||
Total Short-Term Investments (Cost $3,559) | 3,559 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 5.7% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 36,910,373 | 36,910 | ||||||
End of collateral invested for securities on loan. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $594,275 and the unrealized appreciation and depreciation were $93,500 and (39,274), respectively, with a net unrealized appreciation of $54,226. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. |
In addition to the above, the fund held the following at 10/31/07. All numbers are x 1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, Long, expires 12/20/07 | 5 | 2,081 | 76 |
See financial notes 57
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $36,004 (cost $594,074) | $648,501 | |||||
Collateral invested for securities on loan | 36,910 | |||||
Receivables: | ||||||
Investments sold | 1,868 | |||||
Dividends | 284 | |||||
Fund shares sold | 102 | |||||
Due from broker for futures | 34 | |||||
Income from securities on loan | 17 | |||||
Prepaid expenses | + | 4 | ||||
Total assets | 687,720 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | $36,910 | |||||
Payables: | ||||||
Investment advisers and administrator fees | 53 | |||||
Transfer agent and shareholder service fees | 10 | |||||
Fund shares redeemed | 2,344 | |||||
Accrued expenses | + | 56 | ||||
Total liabilities | 39,373 | |||||
Net Assets | ||||||
Total assets | 687,720 | |||||
Total liabilities | − | 39,373 | ||||
Net assets | 648,347 | |||||
Net Assets by Source | ||||||
Capital received from investors | 560,531 | |||||
Net investment income not yet distributed | 7 | |||||
Net realized capital gains | 33,306 | |||||
Net unrealized capital gains | 54,503 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $420,145 | 23,208 | $18.10 | ||||||||
Select Shares | $228,202 | 12,523 | $18.22 |
58 See financial notes
Table of Contents
Schwab Small-Cap Equity Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $6,954 | |||||
Interest | 793 | |||||
Securities on loan | + | 203 | ||||
Total Investment Income | 7,950 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 34,769 | |||||
Net realized losses on futures contracts | + | (1,276 | ) | |||
Net realized gains | 33,493 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized losses on investments | (23,118 | ) | ||||
Net unrealized losses on futures contracts | + | (423 | ) | |||
Net unrealized losses | (23,541 | ) | ||||
Expenses | ||||||
Investment adviser and administrator fees | 9,349 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 1,250 | |||||
Select Shares | 482 | |||||
Registration fees | 101 | |||||
Shareholder reports | 101 | |||||
Portfolio accounting fees | 53 | |||||
Custodian fees | 50 | |||||
Professional fees | 36 | |||||
Trustees’ fees | 11 | |||||
Overdraft expense | 8 | |||||
Other expenses | + | 7 | ||||
Total expenses | 11,448 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 7,950 | |||||
Net expenses | − | 11,448 | ||||
Net investment losses | (3,498 | ) | ||||
Net realized gains | 33,493 | |||||
Net unrealized losses | + | (23,541 | ) | |||
Increase in net assets from operations | $6,454 |
See financial notes 59
Table of Contents
Schwab Small-Cap Equity Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||
Net investment losses | ($3,498 | ) | ($1,523 | ) | ||||||
Net realized gains | 33,493 | 3,306 | ||||||||
Net unrealized gains or losses | + | (23,541 | ) | 57,503 | ||||||
Increase in net assets from operations | 6,454 | 59,286 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ||||||||||
Investor Shares | — | 27 | ||||||||
Select Shares | + | — | 109 | |||||||
Total dividends from net investment income | — | 136 | ||||||||
Distributions from net realized gains | ||||||||||
Investor Shares | 2,059 | 5,522 | ||||||||
Select Shares | + | 1,551 | 2,565 | |||||||
Total distributions from net realized gains | 3,610 | 8,087 | ||||||||
Total distributions | $3,610 | $8,223 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 9,679 | $177,205 | 18,715 | $315,251 | ||||||||||||||
Select Shares | + | 22,102 | 408,478 | 13,258 | 225,539 | |||||||||||||
Total shares sold | 31,781 | $585,683 | 31,973 | $540,790 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 104 | $1,890 | 308 | $4,978 | ||||||||||||||
Select Shares | + | 49 | 897 | 142 | 2,297 | |||||||||||||
Total shares reinvested | 153 | $2,787 | 450 | $7,275 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (10,906 | ) | ($199,419 | ) | (5,534 | ) | ($92,761 | ) | ||||||||||
Select Shares | + | (25,103 | ) | (450,090 | ) | (3,006 | ) | (50,423 | ) | |||||||||
Total shares redeemed | (36,009 | ) | ($649,509 | ) | (8,540 | ) | ($143,184 | ) | ||||||||||
Net transactions in fund shares | (4,075 | ) | ($61,039 | ) | $23,883 | $404,881 | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 39,806 | $706,542 | 15,923 | $250,598 | ||||||||||||||
Total increase or decrease | + | (4,075 | ) | (58,195 | ) | 23,883 | 455,944 | |||||||||||
End of period | 35,731 | $648,347 | 39,806 | $706,542 | ||||||||||||||
Net investment income not yet distributed | $7 | $- |
60 See financial notes
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 3/1/051- | ||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | |||||||||
Per—Share Data ($) | ||||||||||||
Net asset value at beginning of period | 15.95 | 14.45 | 13.51 | |||||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.11 | 0.06 | 0.03 | |||||||||
Net realized and unrealized gains | 0.36 | 1.74 | 0.91 | |||||||||
Total income from investment operations | 0.47 | 1.80 | 0.94 | |||||||||
Less distributions: | ||||||||||||
Distributions from net investment income | (0.07 | ) | (0.04 | ) | — | |||||||
Distributions from net realized gains | — | (0.26 | ) | — | ||||||||
Total distributions | (0.07 | ) | (0.30 | ) | — | |||||||
Net asset value at end of period | 16.35 | 15.95 | 14.45 | |||||||||
Total return (%) | 2.94 | 12.71 | 6.96 | 2 | ||||||||
Ratios/Supplemental Data (%) | ||||||||||||
Ratios to average net assets: | ||||||||||||
Net operating expenses (including dividend expense on short sales) | 2.19 | 2.11 | 2.32 | 3 | ||||||||
Net operating expenses (excluding dividend expense on short sales) | 1.93 | 1.99 | 4 | 2.05 | 3,4 | |||||||
Gross operating expenses | 2.19 | 2.12 | 2.35 | 3 | ||||||||
Net investment income | 0.64 | 0.58 | 0.56 | 3 | ||||||||
Portfolio turnover rate | 72 | 100 | 87 | 2 | ||||||||
Net assets, end of period ($ x 1,000,000) | 211 | 207 | 33 |
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 15.98 | 14.46 | 13.01 | 11.53 | 9.84 | |||||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||||||
Net investment income / (loss) | 0.14 | 0.07 | 0.04 | (0.09 | ) | (0.09 | ) | |||||||||||||
Net realized and unrealized gains | 0.36 | 1.76 | 2.05 | 1.57 | 1.78 | |||||||||||||||
Total income / (loss) from investment operations | 0.50 | 1.83 | 2.09 | 1.48 | 1.69 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.09 | ) | (0.05 | ) | — | — | — | |||||||||||||
Distributions from net realized gains | — | (0.26 | ) | (0.64 | ) | — | — | |||||||||||||
Total distributions | (0.09 | ) | (0.31 | ) | (0.64 | ) | — | — | ||||||||||||
Net asset value at end of period | 16.39 | 15.98 | 14.46 | 13.01 | 11.53 | |||||||||||||||
Total return (%) | 3.11 | 12.82 | 16.52 | 12.84 | 17.17 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses (including dividend expense on short sales) | 2.03 | 5 | 1.90 | 2.26 | 2.43 | 2.37 | ||||||||||||||
Net operating expenses (excluding dividend expense on short sales) | 1.77 | 1.77 | 6 | 1.92 | 6 | 2.10 | 6 | 2.00 | ||||||||||||
Gross operating expenses | 2.04 | 1.97 | 2.39 | 2.71 | 2.77 | |||||||||||||||
Net investment income or loss | 0.79 | 0.77 | 0.55 | (0.86 | ) | (0.90 | ) | |||||||||||||
Portfolio turnover rate | 72 | 100 | 87 | 99 | 114 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 948 | 931 | 229 | 68 | 44 |
1 Commencement of operations.
2 Not annualized.
3 Annualized.
4 The ratio of net operating expenses would have been 2.00% and 1.98% for the periods ended 10/31/05 and 10/31/06, respectively, if interest expense had not been included.
5 The ratio of net operating expenses would have been 2.02% if overdraft expenses had not been included.
6 The ratio of net operating expenses would have been 2.00%, 1.82%, and 1.76% for the periods ended 10/31/04, 10/31/05 and 10/31/06, respectively, if interest expense had not been included.
See financial notes 61
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
100 | .0% | Common Stock | 993,508 | 1,159,783 | ||||||||
0 | .5% | Short-Term Investment | 5,700 | 5,700 | ||||||||
100 | .5% | Total Investments | 999,208 | 1,165,483 | ||||||||
(40 | .3)% | Short Sales | (459,416 | ) | (467,729 | ) | ||||||
39 | .8% | Other Assets and Liabilities, Net | 461,627 | |||||||||
100 | .0% | Total Net Assets | 1,159,381 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 100.0% of net assets | ||||||||
Automobiles & Components 0.3% | ||||||||
Lear Corp. * | 98,100 | 3,486 | ||||||
Banks 0.9% | ||||||||
KeyCorp (a) | 375,500 | 10,683 | ||||||
Capital Goods 14.8% | ||||||||
Acuity Brands, Inc. | 86,700 | 4,144 | ||||||
AGCO Corp. (a) * | 263,600 | 15,732 | ||||||
Cooper Industries Ltd., Class A | 70,200 | 3,678 | ||||||
EMCOR Group, Inc. * | 882,800 | 30,395 | ||||||
Emerson Electric Co. | 91,400 | 4,777 | ||||||
ITT Corp. | 23,100 | 1,546 | ||||||
Lockheed Martin Corp. (a) | 163,300 | 17,969 | ||||||
Perini Corp. * | 158,600 | 9,096 | ||||||
Raytheon Co. (a) | 446,600 | 28,408 | ||||||
Teleflex, Inc. | 209,800 | 15,359 | ||||||
The Boeing Co. | 246,200 | 24,273 | ||||||
Thomas & Betts Corp. (a) * | 281,300 | 15,756 | ||||||
171,133 | ||||||||
Commercial Services & Supplies 1.4% | ||||||||
Deluxe Corp. | 76,200 | 3,074 | ||||||
IKON Office Solutions, Inc. | 190,100 | 2,509 | ||||||
R.R. Donnelley & Sons Co. | 5,600 | 226 | ||||||
Waste Management, Inc. | 297,800 | 10,837 | ||||||
16,646 | ||||||||
Consumer Durables & Apparel 6.9% | ||||||||
American Greetings Corp., Class A | 180,400 | 4,752 | ||||||
Blyth, Inc. | 67,900 | 1,296 | ||||||
Hasbro, Inc. | 781,000 | 23,313 | ||||||
Newell Rubbermaid, Inc. (a) | 862,400 | 25,147 | ||||||
Phillips-Van Heusen Corp. | 305,600 | 14,608 | ||||||
Snap-on, Inc. (a) | 209,300 | 10,446 | ||||||
79,562 | ||||||||
Consumer Services 0.2% | ||||||||
DeVry, Inc. | 20,000 | 1,094 | ||||||
Triarc Cos., Inc., Class B | 157,100 | 1,759 | ||||||
2,853 | ||||||||
Diversified Financials 5.1% | ||||||||
Bank of America Corp. (a) | 239,700 | 11,573 | ||||||
Franklin Resources, Inc. | 147,200 | 19,089 | ||||||
JPMorgan Chase & Co. | 397,500 | 18,682 | ||||||
Northern Trust Corp. | 125,700 | 9,454 | ||||||
58,798 | ||||||||
Energy 8.1% | ||||||||
Exxon Mobil Corp. (a) | 307,800 | 28,315 | ||||||
Global Industries Ltd. (a) * | 857,100 | 21,102 | ||||||
Holly Corp. (a) | 139,800 | 8,779 | ||||||
Occidental Petroleum Corp. (a) | 514,200 | 35,505 | ||||||
93,701 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
BJ’s Wholesale Club, Inc. * | 8,400 | 301 | ||||||
Food, Beverage & Tobacco 3.1% | ||||||||
ConAgra Foods, Inc. | 962,400 | 22,838 | ||||||
H.J. Heinz Co. | 147,600 | 6,905 | ||||||
Sara Lee Corp. | 75,200 | 1,244 | ||||||
The Coca-Cola Co. (a) | 70,200 | 4,335 | ||||||
35,322 | ||||||||
Health Care Equipment & Services 10.0% | ||||||||
Aetna, Inc. (a) | 51,500 | 2,893 | ||||||
Baxter International, Inc. | 319,500 | 19,173 | ||||||
Becton, Dickinson & Co. (a) | 279,500 | 23,327 | ||||||
CIGNA Corp. | 59,700 | 3,133 | ||||||
Humana, Inc. * | 172,100 | 12,899 | ||||||
Magellan Health Services, Inc. (a) * | 323,700 | 13,628 | ||||||
McKesson Corp. (a) | 613,400 | 40,546 | ||||||
115,599 | ||||||||
Household & Personal Products 1.1% | ||||||||
Energizer Holdings, Inc. * | 125,200 | 13,058 | ||||||
Insurance 8.6% | ||||||||
Harleysville Group, Inc. | 70,400 | 2,194 | ||||||
Loews Corp. (a) | 630,000 | 30,927 | ||||||
Nationwide Financial Services, Inc., Class A (a) | 105,800 | 5,676 | ||||||
Principal Financial Group, Inc. (a) | 476,300 | 32,231 |
62 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Prudential Financial, Inc. (a) | 167,500 | 16,201 | ||||||
W. R. Berkley Corp. (a) | 422,412 | 12,710 | ||||||
99,939 | ||||||||
Materials 3.9% | ||||||||
AK Steel Holding Corp. * | 43,500 | 2,181 | ||||||
Ashland, Inc. (a) | 173,900 | 10,211 | ||||||
Celanese Corp., Series A (a) | 155,800 | 6,537 | ||||||
H.B. Fuller Co. | 158,100 | 4,653 | ||||||
Pactiv Corp. (a) * | 103,500 | 2,843 | ||||||
Rockwood Holdings, Inc. * | 62,700 | 2,451 | ||||||
Sonoco Products Co. (a) | 201,500 | 6,230 | ||||||
Spartech Corp. | 58,100 | 893 | ||||||
The Lubrizol Corp. (a) | 133,200 | 9,042 | ||||||
45,041 | ||||||||
Media 1.3% | ||||||||
DreamWorks Animation SKG, Inc., Class A (a) * | 317,900 | 10,351 | ||||||
Regal Entertainment Group, | ||||||||
Class A (a) | 101,100 | 2,282 | ||||||
The Walt Disney Co. | 59,000 | 2,043 | ||||||
14,676 | ||||||||
Pharmaceuticals & Biotechnology 6.5% | ||||||||
Applied Biosystems Group-Applera Corp. (a) | 697,500 | 25,905 | ||||||
Forest Laboratories, Inc. * | 99,000 | 3,868 | ||||||
King Pharmaceuticals, Inc. (a) * | 734,600 | 7,787 | ||||||
Merck & Co., Inc. | 66,000 | 3,845 | ||||||
Pfizer, Inc. | 230,600 | 5,675 | ||||||
Schering-Plough Corp. | 926,600 | 28,280 | ||||||
75,360 | ||||||||
Retailing 3.4% | ||||||||
Big Lots, Inc. * | 1,171,200 | 28,086 | ||||||
Collective Brands, Inc. (a) * | 611,700 | 11,310 | ||||||
Expedia, Inc. * | 16,900 | 552 | ||||||
39,948 | ||||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
Atmel Corp. * | 163,300 | 799 | ||||||
Semtech Corp. * | 40,000 | 684 | ||||||
Teradyne, Inc. (a) * | 147,300 | 1,818 | ||||||
3,301 | ||||||||
Software & Services 5.6% | ||||||||
BMC Software, Inc. (a) * | 803,300 | 27,184 | ||||||
Cadence Design Systems, Inc. (a) * | 335,700 | 6,580 | ||||||
Computer Sciences Corp. * | 4,000 | 233 | ||||||
Electronic Data Systems Corp. | 100,600 | 2,172 | ||||||
Hewitt Associates, Inc., Class A * | 119,600 | 4,219 | ||||||
j2 Global Communications, Inc. * | 100,000 | 3,369 | ||||||
Sybase, Inc. (a) * | 454,500 | 12,999 | ||||||
Synopsys, Inc. (a) * | 296,200 | 8,371 | ||||||
65,127 | ||||||||
Technology Hardware & Equipment 6.6% | ||||||||
Agilent Technologies, Inc. (a) * | 33,100 | 1,220 | ||||||
Avnet, Inc. * | 134,000 | 5,591 | ||||||
Brocade Communications Systems, Inc. (a) * | 309,100 | 2,940 | ||||||
Dolby Laboratories, Inc., | ||||||||
Class A (a) * | 528,600 | 21,916 | ||||||
Hewlett-Packard Co. (a) | 508,000 | 26,253 | ||||||
International Business Machines Corp. (a) | 117,500 | 13,644 | ||||||
Mettler-Toledo International, Inc. * | 21,700 | 2,308 | ||||||
NCR Corp. * | 6,500 | 179 | ||||||
Tech Data Corp. * | 5,400 | 212 | ||||||
Teradata Corp. * | 6,500 | 185 | ||||||
Trimble Navigation Ltd. * | 39,100 | 1,631 | ||||||
Vishay Intertechnology, Inc. * | 21,700 | 273 | ||||||
76,352 | ||||||||
Telecommunication Services 2.7% | ||||||||
CenturyTel, Inc. | 523,300 | 23,052 | ||||||
Qwest Communications International, Inc. (a) * | 298,900 | 2,146 | ||||||
Telephone and Data Systems, Inc. | 94,300 | 6,582 | ||||||
31,780 | ||||||||
Transportation 2.1% | ||||||||
Con-way, Inc. (a) | 344,400 | 14,675 | ||||||
Continental Airlines, Inc., | ||||||||
Class B * | 288,200 | 9,899 | ||||||
Union Pacific Corp. | 2,100 | 269 | ||||||
24,843 | ||||||||
Utilities 7.1% | ||||||||
Allegheny Energy, Inc. (a) * | 54,600 | 3,312 | ||||||
Dynegy, Inc., Class A (a) * | 659,400 | 6,073 | ||||||
FirstEnergy Corp. (a) | 203,900 | 14,212 | ||||||
ONEOK, Inc. (a) | 693,500 | 34,633 | ||||||
Public Service Enterprise Group, Inc. (a) | 251,500 | 24,044 | ||||||
82,274 | ||||||||
Total Common Stock (Cost $993,508) | 1,159,783 | |||||||
See financial notes 63
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investment 0.5% of net assets | ||||||||
Repurchase Agreement 0.5% | ||||||||
Fixed Income Clearing Corp. dated 10/31/07, due 11/01/07 at 4.55%, with a maturity value of $5,701 (fully collateralized by Federal Home Loan Bank with a value of $5,818.) | ||||||||
5,700 | 5,700 | |||||||
Total Short-Term Investment (Cost $5,700) | 5,700 | |||||||
End of Investments. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $999,208 and the unrealized appreciation and depreciation were $194,643 and ($28,368), respectively, with a net unrealized appreciation of $166,275. |
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for short sales. |
64 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Short Sales 40.3% of net assets | ||||||||
Banks 0.6% | ||||||||
Citizens Republic Bancorp, Inc. | 70,000 | 1,065 | ||||||
CVB Financial Corp. | 80,000 | 938 | ||||||
MB Financial, Inc. | 100,000 | 3,334 | ||||||
Sterling Financial Corp., Washington | 50,000 | 1,125 | ||||||
6,462 | ||||||||
Capital Goods 7.8% | ||||||||
Aircastle Ltd. | 68,500 | 2,213 | ||||||
Albany International Corp., | ||||||||
Class A | 34,200 | 1,282 | ||||||
Brady Corp., Class A | 118,600 | 4,376 | ||||||
Bucyrus International, Inc., | ||||||||
Class A | 257,000 | 21,203 | ||||||
Energy Conversion Devices, Inc. * | 562,700 | 15,356 | ||||||
Franklin Electric Co., Inc. | 54,000 | 2,353 | ||||||
Hexcel Corp. * | 834,400 | 20,885 | ||||||
Joy Global, Inc. | 29,600 | 1,719 | ||||||
Moog, Inc., Class A * | 49,700 | 2,294 | ||||||
NCI Building Systems, Inc. * | 241,400 | 9,458 | ||||||
UAP Holding Corp. | 296,900 | 9,450 | ||||||
90,589 | ||||||||
Consumer Durables & Apparel 2.3% | ||||||||
Hovnanian Enterprises, Inc., Class A * | 421,200 | 4,789 | ||||||
Meritage Homes Corp. * | 60,200 | 969 | ||||||
Pool Corp. | 208,200 | 4,909 | ||||||
Quiksilver, Inc. * | 1,053,300 | 14,219 | ||||||
Standard Pacific Corp. | 452,900 | 2,174 | ||||||
27,060 | ||||||||
Consumer Services 2.0% | ||||||||
Las Vegas Sands Corp. * | 43,000 | 5,722 | ||||||
Panera Bread Co., Class A * | 216,200 | 8,862 | ||||||
Scientific Games Corp., Class A * | 225,700 | 8,159 | ||||||
22,743 | ||||||||
Diversified Financials 0.9% | ||||||||
IntercontinentalExchange, Inc. * | 59,900 | 10,674 | ||||||
Energy 2.0% | ||||||||
CARBO Ceramics, Inc. | 21,300 | 957 | ||||||
Crosstex Energy, Inc. | 129,600 | 4,778 | ||||||
Delta Petroleum Corp. * | 409,400 | 7,656 | ||||||
Goodrich Petroleum Corp. * | 1,200 | 40 | ||||||
International Coal Group, Inc. * | 495,300 | 2,665 | ||||||
Petrohawk Energy Corp. * | 127,900 | 2,366 | ||||||
Quicksilver Resources, Inc. * | 48,300 | 2,753 | ||||||
RPC, Inc. | 32,100 | 359 | ||||||
TETRA Technologies, Inc. * | 96,700 | 1,904 | ||||||
23,478 | ||||||||
Food & Staples Retailing 0.9% | ||||||||
Whole Foods Market, Inc. | 209,000 | 10,354 | ||||||
Health Care Equipment & Services 1.8% | ||||||||
American Medical Systems Holdings, Inc. * | 620,300 | 7,933 | ||||||
Brookdale Senior Living, Inc. | 95,900 | 3,538 | ||||||
Health Management Associates, Inc., Class A | 340,700 | 2,252 | ||||||
The Cooper Cos., Inc. | 175,500 | 7,371 | ||||||
21,094 | ||||||||
Household & Personal Products 1.2% | ||||||||
Bare Escentuals, Inc. * | 519,400 | 12,829 | ||||||
Central Garden & Pet Co. * | 51,900 | 430 | ||||||
Central Garden & Pet Co., | ||||||||
Class A * | 53,800 | 448 | ||||||
13,707 | ||||||||
Materials 3.1% | ||||||||
Coeur d’Alene Mines Corp. * | 3,181,000 | 12,565 | ||||||
RTI International Metals, Inc. * | 89,100 | 6,966 | ||||||
Texas Industries, Inc. | 199,100 | 14,546 | ||||||
Westlake Chemical Corp. | 74,900 | 1,838 | ||||||
35,915 | ||||||||
Pharmaceuticals & Biotechnology 5.3% | ||||||||
Abraxis Bioscience, Inc. * | 311,300 | 7,733 | ||||||
Adams Respiratory Therapeutics, Inc. * | 401,500 | 17,642 | ||||||
Alexion Pharmaceuticals, Inc. * | 74,900 | 5,730 | ||||||
AMAG Pharmaceuticals, Inc. * | 144,200 | 9,424 | ||||||
Amylin Pharmaceuticals, Inc. * | 264,200 | 11,894 | ||||||
BioMarin Pharmaceuticals, Inc. * | 310,000 | 8,596 | ||||||
Exelixis, Inc. * | 22,100 | 243 | ||||||
61,262 | ||||||||
Real Estate 0.4% | ||||||||
Forest City Enterprises, Inc., Class A | 75,000 | 4,269 | ||||||
Retailing 3.2% | ||||||||
Borders Group, Inc. | 171,600 | 2,646 | ||||||
CarMax, Inc. * | 275,800 | 5,756 | ||||||
Chico’s FAS, Inc. * | 470,200 | 6,178 | ||||||
GSI Commerce, Inc. * | 65,000 | 1,852 | ||||||
Limited Brands, Inc. | 137,400 | 3,024 | ||||||
Tuesday Morning Corp. | 7,800 | 59 | ||||||
Urban Outfitters, Inc. * | 463,100 | 11,703 | ||||||
Zumiez, Inc. * | 131,100 | 5,488 | ||||||
36,706 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Advanced Micro Devices, Inc. * | 38,900 | 509 |
See financial notes 65
Table of Contents
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Software & Services 3.9% | ||||||||
ACI Worldwide, Inc. * | 153,200 | 3,504 | ||||||
Akamai Technologies, Inc. * | 230,700 | 9,041 | ||||||
Equinix, Inc. * | 203,800 | 23,775 | ||||||
Quality Systems, Inc. | 261,500 | 9,474 | ||||||
45,794 | ||||||||
Technology Hardware & Equipment 1.5% | ||||||||
Daktronics, Inc. | 551,400 | 16,443 | ||||||
Powerwave Technologies, Inc. * | 109,700 | 610 | ||||||
17,053 | ||||||||
Telecommunication Services 0.6% | ||||||||
Cbeyond, Inc. * | 42,200 | 1,651 | ||||||
NII Holdings, Inc. * | 89,100 | 5,168 | ||||||
6,819 | ||||||||
Transportation 0.3% | ||||||||
AirTran Holdings, Inc. * | 198,900 | 2,071 | ||||||
Knight Transportation, Inc. | 112,800 | 1,801 | ||||||
3,872 | ||||||||
Utilities 2.5% | ||||||||
Aqua America, Inc. | 333,400 | 7,755 | ||||||
Cleco Corp. | 185,300 | 4,883 | ||||||
ITC Holdings Corp. | 292,300 | 16,731 | ||||||
29,369 | ||||||||
Total Short Sales (Proceeds $459,416) | ||||||||
467,729 | ||||||||
End of Short Sale Positions. | ||||||||
* Non-income producing security. |
66 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $999,208) | $1,165,483 | |||||
Deposits with broker for short sales | 464,175 | |||||
Receivables: | ||||||
Fund shares sold | 886 | |||||
Dividends | 787 | |||||
Interest | 49 | |||||
Prepaid expenses | + | 6 | ||||
Total assets | 1,631,386 | |||||
Liabilities | ||||||
Securities sold short, at value (proceeds $459,416) | $467,729 | |||||
Payables: | ||||||
Investments bought | 1,588 | |||||
Investment adviser and administrator fees | 153 | |||||
Transfer agent and shareholder service fees | 64 | |||||
Fund shares redeemed | 2,300 | |||||
Dividends on short sales | 118 | |||||
Accrued expenses | + | 53 | ||||
Total liabilities | 472,005 | |||||
Net Assets | ||||||
Total assets | 1,631,386 | |||||
Total liabilities | − | 472,005 | ||||
Net assets | 1,159,381 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,038,538 | |||||
Net investment income not yet distributed | 8,210 | |||||
Net realized capital losses | (45,329 | ) | ||||
Net unrealized capital gains | 157,962 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $210,952 | 12,901 | $16.35 | ||||||||
Select Shares | 948,429 | 57,872 | $16.39 |
See financial notes 67
Table of Contents
Schwab Hedged Equity Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $16,021 | |||||
Interest | + | 21,671 | ||||
Total Investment Income | 37,692 | |||||
Net Realized Gains and Losses | ||||||
Net realized losses on short sales | (74,773 | ) | ||||
Net realized gains on investments | 52,839 | |||||
Net realized losses on futures contracts | + | (856 | ) | |||
Net realized losses | (22,790 | ) | ||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 34,630 | |||||
Net unrealized gains on short sales | + | 2,750 | ||||
Net unrealized gains | 37,380 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 22,107 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 593 | |||||
Select Shares | 1,099 | |||||
Dividends on short sales | 3,442 | |||||
Registration fees | 65 | |||||
Shareholder reports | 62 | |||||
Overdraft expense | 61 | |||||
Professional fees | 57 | |||||
Portfolio accounting fees | 47 | |||||
Custodian fees | 38 | |||||
Trustees’ fees | 13 | |||||
Other expenses | + | 10 | ||||
Total expenses | 27,594 | |||||
Expense reduction by adviser and Schwab | − | 80 | ||||
Custody credit | − | 27 | ||||
Net expenses | �� | 27,487 | ||||
Increase in Net Assets from Operations | ||||||
Total investment income | 37,692 | |||||
Net expenses | − | 27,487 | ||||
Net investment income | 10,205 | |||||
Net realized losses | (22,790 | ) | ||||
Net unrealized gains | + | 37,380 | ||||
Increase in net assets from operations | $24,795 |
68 See financial notes
Table of Contents
Schwab Hedged Equity Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||
Net investment income | $10,205 | $5,035 | ||||||||
Net realized losses | (22,790 | ) | (22,474 | ) | ||||||
Net unrealized gains | + | 37,380 | 102,223 | |||||||
Increase in net assets from operations | 24,795 | 84,784 | ||||||||
Distributions to Shareholders | ||||||||||
Dividends from net investment income | ||||||||||
Investor Shares | 943 | 185 | ||||||||
Select Shares | + | 5,319 | 1,326 | |||||||
Total dividends from net investment income | 6,262 | 1,511 | ||||||||
Distributions from net realized gains | ||||||||||
Investor Shares | — | 1,058 | ||||||||
Select Shares | + | — | 6,701 | |||||||
Total distributions from net realized gains | — | 7,759 | ||||||||
Total distributions | $6,262 | $9,270 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 7,347 | $118,205 | 14,290 | $215,250 | ||||||||||||||
Select Shares | + | 36,575 | 591,433 | 54,075 | 813,417 | |||||||||||||
Total shares sold | 43,922 | $709,638 | 68,365 | $1,028,667 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 54 | $864 | 75 | $1,100 | ||||||||||||||
Select Shares | + | 276 | 4,400 | 475 | 6,957 | |||||||||||||
Total shares reinvested | 330 | $5,264 | 550 | $8,057 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (7,485 | ) | ($120,355 | ) | (3,696 | ) | ($55,379 | ) | ||||||||||
Select Shares | + | (37,207 | ) | (591,582 | ) | (12,150 | ) | (181,325 | ) | |||||||||
Total shares redeemed | (44,692 | ) | ($711,937 | ) | (15,846 | ) | ($236,704 | ) | ||||||||||
Net transactions in fund shares | (440 | ) | $2,965 | 53,069 | $800,020 | |||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 71,213 | $1,137,883 | 18,144 | $262,349 | ||||||||||||||
Total increase or decrease | + | (440 | ) | 21,498 | 53,069 | 875,534 | ||||||||||||
End of period | 70,773 | $1,159,381 | 71,213 | $1,137,883 | ||||||||||||||
Net investment income not yet distributed | $8,210 | $4,267 |
See financial notes 69
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | ||||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 15.75 | 14.42 | 13.12 | 11.77 | 9.44 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.18 | 0.10 | 0.12 | 0.08 | 0.11 | |||||||||||||||
Net realized and unrealized gains | 0.25 | 1.98 | 2.21 | 1.37 | 2.37 | |||||||||||||||
Total income from investment operations | 0.43 | 2.08 | 2.33 | 1.45 | 2.48 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.11 | ) | (0.11 | ) | (0.09 | ) | (0.10 | ) | (0.15 | ) | ||||||||||
Distributions from net realized gains | (0.19 | ) | (0.64 | ) | (0.94 | ) | — | — | ||||||||||||
Total distributions | (0.30 | ) | (0.75 | ) | (1.03 | ) | (0.10 | ) | (0.15 | ) | ||||||||||
Net asset value at end of period | 15.88 | 15.75 | 14.42 | 13.12 | 11.77 | |||||||||||||||
Total return (%) | 2.75 | 14.85 | 18.62 | 12.39 | 26.68 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.90 | 0.98 | 1.07 | 1.05 | 1.04 | 1 | ||||||||||||||
Gross operating expenses | 0.90 | 0.98 | 1.15 | 1.25 | 1.49 | |||||||||||||||
Net investment income | 1.06 | 0.87 | 1.01 | 0.62 | 1.05 | |||||||||||||||
Portfolio turnover rate | 54 | 57 | 74 | 85 | 181 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 94 | 95 | 29 | 20 | 18 |
1 The ratio of net operating expenses would have been 1.03% if interest expense had not been included.
70 See financial notes
Table of Contents
Schwab Financial Services Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
96 | .4% | Common Stock | 79,168 | 90,229 | ||||||||
0 | .5% | Short-Term Investment | 473 | 473 | ||||||||
96 | .9% | Total Investments | 79,641 | 90,702 | ||||||||
5 | .3% | Collateral Invested for Securities on Loan | 4,994 | 4,994 | ||||||||
(2 | .2)% | Other Assets and Liabilities, Net | (2,054 | ) | ||||||||
100 | .0% | Total Net Assets | 93,642 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 96.4% of net assets | ||||||||
Banks 14.0% | ||||||||
1st Source Corp. | 6,000 | 115 | ||||||
BancFirst Corp. | 18,900 | 859 | ||||||
Bank of Hawaii Corp. | 20,400 | 1,084 | ||||||
Comerica, Inc. | 27,100 | 1,265 | ||||||
Commerce Bancshares, Inc. | 65,378 | 3,084 | ||||||
First Citizens BancShares, Inc., Class A | 3,208 | 522 | ||||||
KeyCorp | 130,000 | 3,699 | ||||||
M&T Bank Corp. | 13,200 | 1,313 | ||||||
SVB Financial Group (a) * | 11,600 | 601 | ||||||
Washington Mutual, Inc. | 19,000 | 530 | ||||||
13,072 | ||||||||
Diversified Financials 44.5% | ||||||||
Advanta Corp., Class B | 33,750 | 533 | ||||||
American Express Co. | 66,600 | 4,059 | ||||||
Ameriprise Financial, Inc. | 71,000 | 4,472 | ||||||
Bank of America Corp. | 94,100 | 4,543 | ||||||
Bank of New York Mellon Corp. | 92,400 | 4,514 | ||||||
Federated Investors, Inc., Class B | 80,000 | 3,440 | ||||||
Franklin Resources, Inc. | 35,000 | 4,539 | ||||||
JPMorgan Chase & Co. | 103,200 | 4,850 | ||||||
Morgan Stanley | 22,500 | 1,513 | ||||||
Northern Trust Corp. (a) | 67,900 | 5,107 | ||||||
State Street Corp. | 51,900 | 4,140 | ||||||
41,710 | ||||||||
Insurance 36.3% | ||||||||
American Financial Group, Inc. | 21,750 | 650 | ||||||
American Physicians Capital, Inc. | 13,250 | 577 | ||||||
Aon Corp. | 8,200 | 372 | ||||||
Assurant, Inc. | 17,100 | 999 | ||||||
Axis Capital Holdings Ltd. | 22,100 | 878 | ||||||
Genworth Financial, Inc., Class A | 102,400 | 2,796 | ||||||
Lincoln National Corp. | 38,700 | 2,414 | ||||||
Loews Corp. | 69,300 | 3,402 | ||||||
MetLife, Inc. | 51,000 | 3,511 | ||||||
Nationwide Financial Services, Inc., Class A | 41,000 | 2,200 | ||||||
Principal Financial Group, Inc. | 53,500 | 3,620 | ||||||
Prudential Financial, Inc. | 20,300 | 1,963 | ||||||
RenaissanceRe Holdings Ltd. | 1,700 | 99 | ||||||
The Chubb Corp. | 47,400 | 2,529 | ||||||
The Hartford Financial Services Group, Inc. | 31,500 | 3,056 | ||||||
The Travelers Cos., Inc. | 42,800 | 2,235 | ||||||
Transatlantic Holdings, Inc. | 6,800 | 507 | ||||||
W. R. Berkley Corp. | 19,125 | 576 | ||||||
XL Capital Ltd., Class A | 21,700 | 1,561 | ||||||
33,945 | ||||||||
Real Estate 1.6% | ||||||||
CB Richard Ellis Group, Inc., Class A * | 61,600 | 1,502 | ||||||
Total Common Stock (Cost $79,168) | 90,229 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investment 0.5% of net assets | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 473 | 473 | ||||||
Total Short-Term Investment (Cost $473) | 473 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 5.3% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 4,994,264 | 4,994 | ||||||
End of collateral invested for securities on loan. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $79,641 and the unrealized appreciation and depreciation were $14,194 and ($3,133), respectively, with a net unrealized appreciation of $11,061. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. |
See financial notes 71
Table of Contents
Schwab Financial Services Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $4,946 (cost $79,641) | $90,702 | |||||
Collateral invested for securities on loan | 4,994 | |||||
Receivables: | ||||||
Investments sold | 2,864 | |||||
Fund shares sold | 237 | |||||
Dividends | 61 | |||||
Income from securities on loan | 1 | |||||
Prepaid expenses | + | 1 | ||||
Total assets | 98,860 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | $4,994 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 4 | |||||
Transfer agent and shareholder service fees | 2 | |||||
Fund shares redeemed | 195 | |||||
Accrued expenses | + | 23 | ||||
Total liabilities | 5,218 | |||||
Net Assets | ||||||
Total assets | 98,860 | |||||
Total liabilities | − | 5,218 | ||||
Net assets | 93,642 | |||||
Net Assets by Source | ||||||
Capital received from investors | 81,582 | |||||
Net investment income not yet distributed | 860 | |||||
Net realized capital gains | 139 | |||||
Net unrealized capital gains | 11,061 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$93,642 | 5,895 | $15.88 |
72 See financial notes
Table of Contents
Schwab Financial Services Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $2,001 | |||||
Interest | 27 | |||||
Securities on loan | + | 3 | ||||
Total Investment Income | 2,031 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 184 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 1,303 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 561 | |||||
Transfer agent and shareholder service fees | 260 | |||||
Portfolio accounting fees | 35 | |||||
Professional fees | 27 | |||||
Registration fees | 20 | |||||
Shareholder reports | 14 | |||||
Custodian fees | 6 | |||||
Trustees’ fees | 6 | |||||
Overdraft expense | 2 | |||||
Other expenses | + | 1 | ||||
Total expenses | 932 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 2,031 | |||||
Net expenses | − | 932 | ||||
Net investment income | 1,099 | |||||
Net realized gains | 184 | |||||
Net unrealized gains | + | 1,303 | ||||
Increase in net assets from operations | $2,586 |
See financial notes 73
Table of Contents
Schwab Financial Services Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $1,099 | $557 | ||||||
Net realized gains | 184 | 1,188 | ||||||
Net unrealized gains | + | 1,303 | 5,742 | |||||
Increase in net assets from operations | 2,586 | 7,487 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | 704 | 264 | ||||||
Distributions from net realized gains | + | 1,228 | 1,580 | |||||
Total distributions | $1,932 | $1,844 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 2,478 | $39,875 | 5,038 | $75,696 | ||||||||||||||
Shares Reinvested | 108 | 1,727 | 114 | 1,645 | ||||||||||||||
Shares Redeemed | + | (2,738 | ) | (43,871 | ) | (1,089 | ) | (16,334 | ) | |||||||||
Net transactions in fund shares | (152 | ) | ($2,269 | ) | 4,063 | $61,007 | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 6,047 | $95,257 | 1,984 | $28,607 | ||||||||||||||
Total increase or decrease | + | (152 | ) | (1,615 | ) | 4,063 | 66,650 | |||||||||||
End of period | 5,895 | $93,642 | 6,047 | $95,257 | ||||||||||||||
Net investment income not yet distributed | $860 | $465 |
74 See financial notes
Table of Contents
Financial Highlights
| 11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | |||||||||||||||
10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | ||||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 15.05 | 14.03 | 10.78 | 8.43 | 7.12 | |||||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||||||
Net investment income / (loss) | 0.05 | (0.01 | ) | (0.02 | ) | (0.06 | ) | 0.01 | ||||||||||||
Net realized and unrealized gains | 2.11 | 1.03 | 3.27 | 2.41 | 1.33 | |||||||||||||||
Total income / (loss) from investment operations | 2.16 | 1.02 | 3.25 | 2.35 | 1.34 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | — | — | — | — | (0.03 | ) | ||||||||||||||
Distributions from net realized gains | (0.13 | ) | — | — | — | — | ||||||||||||||
Total distributions | (0.13 | ) | — | — | — | (0.03 | ) | |||||||||||||
Net asset value at end of period | 17.08 | 15.05 | 14.03 | 10.78 | 8.43 | |||||||||||||||
Total return (%) | 14.49 | 7.27 | 30.15 | 27.88 | 18.96 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.82 | 0.84 | 0.89 | 1.04 | 1.04 | |||||||||||||||
Gross operating expenses | 0.82 | 0.84 | 0.89 | 1.07 | 1.34 | |||||||||||||||
Net investment income or loss | 0.32 | (0.07 | ) | (0.28 | ) | (0.73 | ) | 0.13 | ||||||||||||
Portfolio turnover rate | 34 | 76 | 42 | 105 | 200 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 834 | 611 | 397 | 54 | 25 |
See financial notes 75
Table of Contents
Schwab Health Care Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
96 | .4% | Common Stock | 661,752 | 804,068 | ||||||||
—% | Rights | — | — | |||||||||
3 | .5% | Short-Term Investments | 28,876 | 28,876 | ||||||||
99 | .9% | Total Investments | 690,628 | 832,944 | ||||||||
0 | .9% | Collateral Invested for Securities on Loan | 7,953 | 7,953 | ||||||||
(0 | .8)% | Other Assets and Liabilities, Net | (6,802 | ) | ||||||||
100 | .0% | Total Net Assets | 834,095 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 96.4% of net assets | ||||||||
Health Care Equipment & Services 38.9% | ||||||||
Aetna, Inc. | 425,000 | 23,872 | ||||||
American Dental Partners, Inc. * | 35,000 | 868 | ||||||
AMERIGROUP Corp. * | 50,000 | 1,750 | ||||||
AmerisourceBergen Corp. | 275,000 | 12,955 | ||||||
Analogic Corp. | 60,000 | 3,429 | ||||||
Apria Healthcare Group, Inc. * | 45,000 | 1,088 | ||||||
ArthroCare Corp. * | 30,000 | 1,945 | ||||||
Baxter International, Inc. | 700,400 | 42,031 | ||||||
Becton, Dickinson & Co. | 391,300 | 32,658 | ||||||
C.R. Bard, Inc. | 45,000 | 3,762 | ||||||
Cardinal Health, Inc. | 40,000 | 2,721 | ||||||
Chemed Corp. | 15,000 | 860 | ||||||
CIGNA Corp. | 540,000 | 28,345 | ||||||
CONMED Corp. * | 75,000 | 2,133 | ||||||
Coventry Health Care, Inc. * | 125,000 | 7,539 | ||||||
Dade Behring Holdings, Inc. | 120,000 | 9,232 | ||||||
DENTSPLY International, Inc. | 100,000 | 4,148 | ||||||
Emergency Medical Services Corp., Class A (a) * | 20,000 | 607 | ||||||
Express Scripts, Inc. * | 300,000 | 18,930 | ||||||
Gen-Probe, Inc. * | 50,000 | 3,501 | ||||||
Greatbatch, Inc. * | 125,000 | 3,107 | ||||||
Hanger Orthopedic Group, Inc. * | 10,000 | 125 | ||||||
Health Net, Inc. * | 60,000 | 3,217 | ||||||
Henry Schein, Inc. * | 50,000 | 2,995 | ||||||
Hlth Corp. * | 40,000 | 564 | ||||||
Humana, Inc. * | 150,000 | 11,242 | ||||||
Intuitive Surgical, Inc. * | 4,000 | 1,307 | ||||||
Kinetic Concepts, Inc. * | 70,000 | 4,207 | ||||||
Laboratory Corp. of America Holdings * | 70,000 | 4,812 | ||||||
Lincare Holdings, Inc. * | 50,000 | 1,739 | ||||||
Magellan Health Services, Inc. * | 80,000 | 3,368 | ||||||
McKesson Corp. | 498,200 | 32,931 | ||||||
MedCath Corp. * | 70,000 | 1,941 | ||||||
Medco Health Solutions, Inc. * | 150,000 | 14,157 | ||||||
Medtronic, Inc. | 200,000 | 9,488 | ||||||
Omnicell, Inc. * | 60,000 | 1,584 | ||||||
Quidel Corp. * | 30,000 | 620 | ||||||
Stryker Corp. | 30,000 | 2,130 | ||||||
Synovis Life Technologies, Inc. * | 40,000 | 955 | ||||||
UnitedHealth Group, Inc. | 40,000 | 1,966 | ||||||
VCA Antech, Inc. * | 15,000 | 691 | ||||||
WellPoint, Inc. * | 240,000 | 19,015 | ||||||
324,535 | ||||||||
Pharmaceuticals & Biotechnology 57.5% | ||||||||
Abbott Laboratories | 525,000 | 28,675 | ||||||
Accelrys, Inc. * | 100,000 | 777 | ||||||
Albany Molecular Research, Inc. * | 25,000 | 452 | ||||||
Allergan, Inc. | 200,000 | 13,516 | ||||||
Alpharma, Inc., Class A * | 226,400 | 4,668 | ||||||
Amgen, Inc. * | 100,000 | 5,811 | ||||||
Applied Biosystems Group-Applera Corp. | 702,400 | 26,087 | ||||||
Biogen Idec, Inc. * | 400,000 | 29,776 | ||||||
Bristol-Myers Squibb Co. | 725,000 | 21,743 | ||||||
Celgene Corp. * | 50,000 | 3,300 | ||||||
Covance, Inc. * | 10,000 | 825 | ||||||
Cubist Pharmaceuticals, Inc. * | 20,000 | 468 | ||||||
Dionex Corp. * | 10,000 | 880 | ||||||
Eli Lilly and Co. | 475,000 | 25,721 | ||||||
Endo Pharmaceutical Holdings, Inc. * | 125,000 | 3,663 | ||||||
Forest Laboratories, Inc. * | 423,900 | 16,562 | ||||||
Genzyme Corp. * | 150,000 | 11,395 | ||||||
Gilead Sciences, Inc. * | 420,000 | 19,400 | ||||||
ImClone Systems, Inc. * | 20,000 | 863 | ||||||
Invitrogen Corp. (a) * | 80,000 | 7,270 | ||||||
Johnson & Johnson | 508,500 | 33,139 | ||||||
King Pharmaceuticals, Inc. * | 1,269,300 | 13,455 | ||||||
Medicis Pharmaceutical Corp., Class A (a) | 60,000 | 1,781 | ||||||
Merck & Co., Inc. | 800,000 | 46,608 | ||||||
MGI Pharma, Inc. * | 250,000 | 8,145 | ||||||
OSI Pharmaceuticals, Inc. * | 50,000 | 2,079 | ||||||
PerkinElmer, Inc. | 575,000 | 15,824 | ||||||
Perrigo Co. | 40,000 | 948 | ||||||
Pfizer, Inc. | 1,665,000 | 40,976 | ||||||
Regeneron Pharmaceuticals, Inc. * | 60,000 | 1,320 | ||||||
Schering-Plough Corp. | 1,380,000 | 42,118 | ||||||
Sciele Pharma, Inc. (a) * | 85,000 | 2,162 | ||||||
Techne Corp. * | 25,000 | 1,631 | ||||||
Thermo Fisher Scientific, Inc. * | 200,000 | 11,762 | ||||||
Varian, Inc. * | 15,000 | 1,108 | ||||||
ViaCell, Inc. * | 50,000 | 363 | ||||||
Warner Chilcott Ltd., Class A * | 85,000 | 1,575 | ||||||
Waters Corp. * | 78,000 | 6,004 | ||||||
Watson Pharmaceuticals, Inc. * | 531,300 | 16,237 |
76 See financial notes
Table of Contents
Schwab Health Care Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Wyeth | 214,800 | 10,446 | ||||||
479,533 | ||||||||
Total Common Stock (Cost $661,752) | 804,068 | |||||||
Rights 0.0% of net assets | ||||||||
Pharmaceuticals & Biotechnology 0.0% | ||||||||
OSI Pharmaceuticals, Inc. | 458 | — | ||||||
Total Rights (Cost $—) | — | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 3.5% of net assets | ||||||||
Commercial Paper & Other Obligations 3.4% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 3,920 | 3,920 | ||||||
Wells Fargo, Grand Cayman Time Deposit | ||||||||
4.75%, 11/01/07 | 24,100 | 24,100 | ||||||
28,020 | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
3.82%, 12/20/07 (b) | 180 | 179 | ||||||
3.85%, 12/20/07 (b) | 340 | 338 | ||||||
3.92%, 12/20/07 (b) | 340 | 339 | ||||||
856 | ||||||||
Total Short-Term Investments (Cost $28,876) | 28,876 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 0.9% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 7,952,687 | 7,953 | ||||||
End of collateral invested for securities on loan. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $690,951, and the unrealized appreciation and depreciation were $160,687 and ($18,694), respectively, with a net unrealized appreciation of $141,993. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. |
In addition to the above, the fund held the following at
10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 250 | 19,436 | 570 |
See financial notes 77
Table of Contents
Schwab Health Care Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $8,059 (cost $690,628) | $832,944 | |||||
Collateral invested for securities on loan | 7,953 | |||||
Receivables: | ||||||
Investments sold | 10,208 | |||||
Fund shares sold | 2,135 | |||||
Dividends | 510 | |||||
Due from broker for futures | 236 | |||||
Income from securities on loan | 5 | |||||
Interest | 3 | |||||
Prepaid expenses | + | 3 | ||||
Total assets | 853,997 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | $7,953 | |||||
Payables: | ||||||
Investments bought | 10,927 | |||||
Investment adviser and administrator fees | 36 | |||||
Transfer agent and shareholder service fees | 17 | |||||
Fund shares redeemed | 923 | |||||
Accrued expenses | + | 46 | ||||
Total liabilities | 19,902 | |||||
Net Assets | ||||||
Total assets | 853,997 | |||||
Total liabilities | − | 19,902 | ||||
Net assets | 834,095 | |||||
Net Assets by Source | ||||||
Capital received from investors | 684,982 | |||||
Net investment income not yet distributed | 2,267 | |||||
Net realized capital gains | 3,960 | |||||
Net unrealized capital gains | 142,886 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$834,095 | 48,842 | $17.08 |
78 See financial notes
Table of Contents
Schwab Health Care Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $7,417 | |||||
Interest | 548 | |||||
Securities on loan | + | 9 | ||||
Total Investment Income | 7,974 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 4,219 | |||||
Net realized gains on futures contracts | + | 455 | ||||
Net realized gains | 4,674 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 83,413 | |||||
Net unrealized gains on futures contracts | + | 249 | ||||
Net unrealized gains | 83,662 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,729 | |||||
Transfer agent and shareholder service fees | 1,750 | |||||
Shareholder reports | 71 | |||||
Registration fees | 49 | |||||
Portfolio accounting fees | 48 | |||||
Professional fees | 29 | |||||
Custodian fees | 15 | |||||
Trustees’ fees | 9 | |||||
Other expenses | + | 7 | ||||
Total expenses | 5,707 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 7,974 | |||||
Net expenses | − | 5,707 | ||||
Net investment income | 2,267 | |||||
Net realized gains | 4,674 | |||||
Net unrealized gains | + | 83,662 | ||||
Increase in net assets from operations | $90,603 |
See financial notes 79
Table of Contents
Schwab Health Care Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | ||||||||
Net investment income or losses | $2,267 | ($404 | ) | ||||||
Net realized gains | 4,674 | $8,957 | |||||||
Net unrealized gains | + | 83,662 | $19,048 | ||||||
Increase in net assets from operations | 90,603 | 27,601 | |||||||
Distributions to Shareholders | |||||||||
Distributions from net realized gains | $5,277 | $- |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 20,648 | $335,280 | 26,841 | $397,961 | ||||||||||||||
Shares Reinvested | 318 | 4,816 | — | — | ||||||||||||||
Shares Redeemed | + | (12,749 | ) | (202,578 | ) | (14,502 | ) | (211,167 | ) | |||||||||
Net transactions in fund shares | 8,217 | $137,518 | 12,339 | $186,794 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 40,625 | $611,251 | 28,286 | $396,856 | ||||||||||||||
Total increase | + | 8,217 | 222,844 | 12,339 | 214,395 | |||||||||||||
End of period | 48,842 | $834,095 | 40,625 | $611,251 | ||||||||||||||
Net investment income not yet distributed | $2,267 | $- |
80 See financial notes
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | ||||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 5.29 | 4.88 | 4.42 | 4.32 | 2.90 | |||||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||||||
Net investment loss | (0.03 | ) | (0.03 | ) | (0.01 | ) | (0.04 | ) | (0.02 | ) | ||||||||||
Net realized and unrealized gains | 0.85 | 0.44 | 0.47 | 0.14 | 1.44 | |||||||||||||||
Total income / (loss) from investment operations | 0.82 | 0.41 | 0.46 | 0.10 | 1.42 | |||||||||||||||
Net asset value at end of period | 6.11 | 5.29 | 4.88 | 4.42 | 4.32 | |||||||||||||||
Total return (%) | 15.50 | 8.40 | 10.41 | 2.31 | 48.97 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.94 | 0.95 | 0.97 | 1.02 | 1 | 1.04 | ||||||||||||||
Gross operating expenses | 0.94 | 0.95 | 0.97 | 1.02 | 1.25 | |||||||||||||||
Net investment loss | (0.41 | ) | (0.48 | ) | (0.23 | ) | (0.78 | ) | (0.65 | ) | ||||||||||
Portfolio turnover rate | 60 | 86 | 89 | 109 | 165 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 58 | 71 | 53 | 49 | 43 |
1 The ratio of net operating expenses would have been 1.01% if interest expense had not been included.
See financial notes 81
Table of Contents
Schwab Technology Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
94 | .7% | Common Stock | 41,854 | 55,154 | ||||||||
5 | .5% | Short-Term Investments | 3,185 | 3,185 | ||||||||
100 | .2% | Total Investments | 45,039 | 58,339 | ||||||||
3 | .0% | Collateral Invested for Securities on Loan | 1,732 | 1,732 | ||||||||
(3 | .2)% | Other Assets and Liabilities, Net | (1,873 | ) | ||||||||
100 | .0% | Total Net Assets | 58,198 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 94.7% of net assets | ||||||||
Retailing 3.4% | ||||||||
eBay, Inc. * | 55,000 | 1,986 | ||||||
Semiconductors & Semiconductor Equipment 15.5% | ||||||||
Amkor Technology, Inc. * | 5,000 | 57 | ||||||
Analog Devices, Inc. | 2,000 | 67 | ||||||
Applied Materials, Inc. | 30,000 | 583 | ||||||
Atmel Corp. * | 38,100 | 186 | ||||||
Cohu, Inc. | 5,000 | 82 | ||||||
Credence Systems Corp. * | 60,000 | 183 | ||||||
Integrated Device Technology, Inc. * | 6,900 | 93 | ||||||
Integrated Silicon Solution, Inc. * | 5,000 | 33 | ||||||
Intel Corp. | 150,700 | 4,054 | ||||||
MEMC Electronic Materials, Inc. * | 16,600 | 1,215 | ||||||
National Semiconductor Corp. | 14,600 | 367 | ||||||
NVIDIA Corp. * | 15,000 | 531 | ||||||
Semtech Corp. * | 5,000 | 85 | ||||||
Teradyne, Inc. * | 20,000 | 247 | ||||||
Texas Instruments, Inc. | 25,800 | 841 | ||||||
Zoran Corp. * | 15,000 | 382 | ||||||
9,006 | ||||||||
Software & Services 32.6% | ||||||||
Accenture Ltd., Class A | 8,000 | 312 | ||||||
Activision, Inc. * | 2,500 | 59 | ||||||
Adobe Systems, Inc. * | 2,500 | 120 | ||||||
Autodesk, Inc. * | 6,000 | 293 | ||||||
BMC Software, Inc. * | 45,000 | 1,523 | ||||||
CA, Inc. | 25,700 | 680 | ||||||
Cadence Design Systems, Inc. * | 50,000 | 980 | ||||||
Computer Sciences Corp. (a) * | 10,000 | 584 | ||||||
Convergys Corp. * | 19,000 | 348 | ||||||
DealerTrack Holdings, Inc. * | 2,000 | 98 | ||||||
Electronic Data Systems Corp. | 70,000 | 1,511 | ||||||
FactSet Research Systems, Inc. | 5,000 | 353 | ||||||
Global Payments, Inc. | 25,100 | 1,194 | ||||||
Google, Inc., Class A * | 1,500 | 1,061 | ||||||
Hewitt Associates, Inc., Class A * | 3,000 | 106 | ||||||
j2 Global Communications, Inc. * | 5,000 | 168 | ||||||
Microsoft Corp. | 120,000 | 4,417 | ||||||
Novell, Inc. * | 30,000 | 227 | ||||||
Oracle Corp. * | 60,000 | 1,330 | ||||||
Sybase, Inc. * | 25,000 | 715 | ||||||
Symantec Corp. * | 38,200 | 717 | ||||||
Synopsys, Inc. * | 25,000 | 707 | ||||||
Total System Services, Inc. (a) | 37,500 | 1,124 | ||||||
United Online, Inc. | 5,000 | 88 | ||||||
Vignette Corp. * | 10,000 | 172 | ||||||
WebMD Health Corp., Class A (a) * | 2,500 | 115 | ||||||
19,002 | ||||||||
Technology Hardware & Equipment 43.2% | ||||||||
ADC Telecommunications, Inc. * | 10,000 | 187 | ||||||
Agilent Technologies, Inc. * | 28,400 | 1,047 | ||||||
Apple, Inc. * | 17,000 | 3,229 | ||||||
Avnet, Inc. * | 5,000 | 209 | ||||||
Brocade Communications Systems, Inc. * | 7,500 | 71 | ||||||
Cisco Systems, Inc. * | 140,000 | 4,628 | ||||||
Cogent, Inc. * | 5,000 | 74 | ||||||
Corning, Inc. | 25,000 | 607 | ||||||
Dolby Laboratories, Inc., Class A * | 12,500 | 518 | ||||||
EMC Corp. * | 5,000 | 127 | ||||||
Harris Corp. | 15,000 | 908 | ||||||
Hewlett-Packard Co. | 87,000 | 4,496 | ||||||
InterDigital, Inc. * | 5,000 | 108 | ||||||
International Business Machines Corp. | 37,000 | 4,297 | ||||||
Juniper Networks, Inc. * | 5,000 | 180 | ||||||
Lexmark International, Inc., Class A * | 2,000 | 84 | ||||||
Methode Electronics, Inc. | 18,000 | 226 | ||||||
Mettler-Toledo International, Inc. * | 1,600 | 170 | ||||||
NCR Corp. * | 19,000 | 524 | ||||||
Plantronics, Inc. | 2,500 | 68 | ||||||
QUALCOMM, Inc. | 12,500 | 534 | ||||||
Seagate Technology | 5,000 | 139 | ||||||
Sun Microsystems, Inc. * | 100,000 | 571 | ||||||
Tech Data Corp. * | 5,000 | 197 | ||||||
Trimble Navigation Ltd. * | 6,000 | 250 | ||||||
Vishay Intertechnology, Inc. * | 4,300 | 54 | ||||||
Xerox Corp. * | 95,000 | 1,657 | ||||||
25,160 | ||||||||
Total Common Stock (Cost $41,854) | 55,154 | |||||||
82 See financial notes
Table of Contents
Schwab Technology Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 5.5% of net assets | ||||||||
Commercial Paper & Other Obligations 5.3% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 1,376 | 1,376 | ||||||
Citibank, Nassau Time Deposit | ||||||||
4.75%, 11/01/07 | 1,720 | 1,720 | ||||||
3,096 | ||||||||
U.S. Treasury Obligation 0.2% | ||||||||
U.S. Treasury Bill | ||||||||
3.92%, 12/20/07 (b) | 90 | 89 | ||||||
Total Short-Term Investments (Cost $3,185) | 3,185 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 3.0% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 1,731,565 | 1,732 | ||||||
End of collateral invested for securities on loan. | ||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $45,050, and the unrealized appreciation and depreciation were $13,755 and ($466), respectively, with a net unrealized appreciation of $13,289. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. |
In addition to the above, the fund held the following at
10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 25 | 1,944 | 77 |
See financial notes 83
Table of Contents
Schwab Technology Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $1,728 (cost $45,039) | $58,339 | |||||
Collateral invested for securities on loan | 1,732 | |||||
Receivables: | ||||||
Fund shares sold | 39 | |||||
Due from broker for futures | 24 | |||||
Dividends | 6 | |||||
Income from securities on loan | + | 1 | ||||
Total assets | 60,141 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | $1,732 | |||||
Payables: | ||||||
Investments bought | 138 | |||||
Investment adviser and administrator fees | 2 | |||||
Transfer agent and shareholder service fees | 1 | |||||
Fund shares redeemed | 47 | |||||
Accrued expenses | + | 23 | ||||
Total liabilities | 1,943 | |||||
Net Assets | ||||||
Total assets | 60,141 | |||||
Total liabilities | − | 1,943 | ||||
Net assets | 58,198 | |||||
Net Assets by Source | ||||||
Capital received from investors | 77,052 | |||||
Net realized capital losses | (32,231 | ) | ||||
Net unrealized capital gains | 13,377 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$58,198 | 9,530 | $6.11 |
84 See financial notes
Table of Contents
Schwab Technology Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $262 | |||||
Interest | 75 | |||||
Securities on loan | + | 6 | ||||
Total Investment Income | 343 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 4,112 | |||||
Net realized gains on futures contracts | + | 31 | ||||
Net realized gains | 4,143 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 4,799 | |||||
Net unrealized gains on futures contracts | + | 77 | ||||
Net unrealized gains | 4,876 | |||||
Expenses | ||||||
Investment Advisor and administrator fees | 349 | |||||
Transfer agent and shareholder service fees | 162 | |||||
Portfolio accounting fees | 35 | |||||
Professional fees | 27 | |||||
Registration fees | 11 | |||||
Custodian fees | 8 | |||||
Shareholder reports | 7 | |||||
Trustees’ fees | 6 | |||||
Other expenses | + | 1 | ||||
Total expenses | 606 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 343 | |||||
Net expenses | − | 606 | ||||
Net investment loss | (263 | ) | ||||
Net realized gains | 4,143 | |||||
Net unrealized gains | + | 4,876 | ||||
Increase in net assets from operations | $8,756 |
See financial notes 85
Table of Contents
Schwab Technology Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||
Net investment losses | ($263 | ) | ($339 | ) | ||||||
Net realized gains | 4,143 | 2,503 | ||||||||
Net unrealized gains | + | 4,876 | 1,658 | |||||||
Increase in net assets from operations | 8,756 | 3,822 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 2,650 | $14,499 | 7,995 | $41,697 | ||||||||||||||
Shares Redeemed | + | (6,549 | ) | (36,107 | ) | (5,489 | ) | (27,733 | ) | |||||||||
Net transactions in fund shares | (3,899 | ) | ($21,608 | ) | 2,506 | $13,964 | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 13,429 | $71,050 | 10,923 | $53,264 | ||||||||||||||
Total increase or decrease | + | (3,899 | ) | (12,852 | ) | 2,506 | 17,786 | |||||||||||
End of period | 9,530 | $58,198 | 13,429 | $71,050 |
86 See financial notes
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Schwab Active Equity Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended. The list below shows all the funds in the trust including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) Schwab Premier Equity Fund Schwab Core Equity Fund Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Financial Services Fund Schwab Health Care Fund Schwab Technology Fund Schwab S&P 500 Index Fund Schwab Institutional Select S&P 500 Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index Fund Schwab MarketTrack All Equity Portfolio | Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Laudus U.S. MarketMasters Fund Laudus Small-Cap MarketMasters Fund Laudus International MarketMasters Fund Schwab Viewpoints Fund Schwab Target 2010 Fund Schwab Target 2020 Fund Schwab Target 2030 Fund Schwab Target 2040 Fund Schwab Retirement Income Fund Schwab Fundamental US Large Company Index Fund Schwab Fundamental US Small-Mid Company Index Fund Schwab Fundamental International Large Company Index Fund | |
Schwab Premier Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund and Schwab Hedged Equity Fund offer two share classes: Investor Shares and Select Shares®. Shares of each class represent interest in the same portfolio, but each class has different expenses and investment minimums. Schwab Core Equity Fund, Schwab Financial Services Fund, Schwab Health Care Fund and Schwab Technology Fund each offer one share class.
Shares are bought and sold at net asset value, or NAV, which is the price for all outstanding shares. Each share has a par value of 1/1,000 of a cent, and the trustees may authorize the issuance of as many shares as necessary.
The Schwab Premier Equity Fund and the Schwab Large-Cap Growth Fund commenced operations on March 21, 2005 and October 3, 2005, respectively. The Schwab Hedged Equity Fund started offering Investor Shares on March 1, 2005 and the fund shares in existence prior to March 1, 2005 were designated as Select Shares.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds used in the preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America.
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and asked quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the current exchange rate. | |
• | Securities for which no quoted value is available or when a significant event has occurred between the time of the security’s last close and the time the fund calculates net asset value: valued at fair value, as determined in good faith by the fund’s investment adviser using guidelines adopted by the fund’s Board of Trustees and the Pricing Committee. Some of the more common reasons that may necessitate that a security be valued at fair value include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; the security’s primary pricing source is not able or willing to provide a price. |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
• | Futures contracts: Valued at their settlement prices as of the close of their exchanges (for futures) or at a market value based on that day’s exchange rates (for forwards). When a fund closes out a futures or forwards position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost. | |
• | Mutual funds: valued at their respective net asset values as determined by those funds in accordance with the 1940 Act for any given day. |
(b) Portfolio Investments:
Futures Contract: The funds may invest in futures contracts. Futures contracts involve certain risks because they can be very sensitive to market movements.
One risk is that the price of a futures contract may not move in perfect correlation with the price of the underlying securities. Another risk is that, at certain times, it may be impossible for a fund to close out a position in a futures contract, due to a difference in trading hours or to market conditions that may reduce the liquidity for a futures contract or its underlying securities. The potential for losses associated with futures contracts may exceed amounts recorded in the Statement of Assets and Liabilities.
Because futures contracts carry inherent risks, a fund must give the broker a deposit of cash and/or securities (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another, but it is generally a percentage of the contract amount.
Futures are traded publicly on exchanges, and their market value changes daily. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
Short Sale: Schwab Hedged Equity Fund may sell securities short (sell securities it does not own). When it does so, the fund also places assets worth at least 100% of the value of the short securities into a segregated account, as collateral. If the market value of the short securities subsequently falls, the fund can realize a gain by closing the 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.
Securities Lending: The funds may loan securities to certain brokers, dealers and other financial institutions that pay the funds negotiated fees. The funds receive cash, letters of credit or U.S. Government securities as collateral on these loans. All of the cash collateral received is reinvested in high quality, short-term investments. The value of the collateral must be at least 102% of the market value of the loaned securities as of the first day of the loan, and at least 100% each day thereafter. If the value of the collateral falls below 100%, it will be adjusted the following day.
Repurchase Agreement: The funds may enter into repurchase agreements. In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. The date, price and other conditions are all specified when the agreement is created.
The funds’ repurchase agreements will be fully collateralized by U.S. government securities or U.S. government agency securities. All collateral is held by the funds’ custodian (or, with tri-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement.
(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.
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 the fund closes out a short position (buys the security), it records the outcome as a realized gain or loss. Interest and dividends accrued on securities sold short are recorded as an expense on the fund’s records.
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Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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.
(d) Investment Income:
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. Interest income is recorded as it accrues. If the Funds buy a debt security at a discount (that is for less than its Face Value) or a premium (more than Face Value), it amortizes the discount or premium from the current date up to maturity. The funds then increase (in the case of discounts) or reduce (in the case of premiums) the income it records from the security.
(e) Expenses:
Expenses that are specific to a fund or a class are charged directly to that fund or class. 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 its net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income once a year, with the exception of Dividend Equity Fund which typically pays quarterly dividends. The funds make distributions from net realized capital gains once a year.
(g) Custody Credit:
Each fund has an arrangement with its custodian bank under which the fund receives a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts (if any) are disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform with accounting principles generally accepted in the United States of America. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates.
(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.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes.
(j) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
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Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(k) New Accounting Standards:
Financial Accounting Standards Board Interpretation (FIN) No. 48 — Accounting for Uncertainty in Income Taxes — an Interpretation of SFAS No. 109, was issued in July 2006 and is effective for fiscal years beginning after December 15, 2006. This Interpretation provides new requirements for the recognition, measurement, and disclosure in the financial statements of a tax position taken or expected to be taken in a tax return when there is uncertainty about whether that tax position will ultimately be sustained. A fund with a fiscal year ending October 31 will implement FIN 48 no later than April 30, 2008, and it will apply to all open tax years. Management is currently evaluating the impact of adopting FIN 48 and, at this time, believes that the adoption will have no material impact on the funds’ financial statements.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management is currently evaluating the impact of adopting SFAS No. 157 on the funds’ financial statements.
3. | Affiliates and Affiliated Transactions: |
(All dollar amounts are x 1,000)
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 it and the trust.
For its advisory and administrative services to each fund, the investment adviser is entitled to receive an annual fee payable monthly based on the fund’s average daily net assets described as follows:
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Average daily net assets | Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||||||
First $500 million | 0.91% | 0.54% | 0.775% | 0.87% | 0.975% | 1.675% | ||||||||||||||||||
$500 million to $1 billion | 0.885% | 0.49% | 0.77% | 0.85% | 0.93% | 1.65% | ||||||||||||||||||
$1 billion to $2 billion | 0.860% | n/a | 0.76% | 0.83% | 0.91% | 1.63% | ||||||||||||||||||
Over $2 billion | n/a | n/a | n/a | 0.81% | n/a | n/a | ||||||||||||||||||
Financial | Health Care | Technology | ||||||||||||||||||||||
Average daily net assets | Services Fund | Fund | Fund | |||||||||||||||||||||
First $500 million | 0.54% | 0.54% | 0.54% | |||||||||||||||||||||
$500 million to $1 billion | 0.515% | 0.515% | 0.515% | |||||||||||||||||||||
$1 billion to $2 billion | 0.490% | 0.490% | 0.490% | |||||||||||||||||||||
Over $2 billion | n/a | n/a | n/a |
Charles Schwab & Co., Inc. (“Schwab”) is an affiliate of the investment adviser and is the trust’s transfer agent and shareholder services agent.
For its transfer agent and shareholder services, Schwab is entitled to receive an annual fee payable monthly based on each fund’s average daily net assets described as follows:
Transfer Agent Fees | Shareholder Service Fees | |||||||
Investor Shares | 0.05% | 0.20% | ||||||
Select Shares* | 0.05% | 0.05% |
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Schwab Active Equity Funds
Financial Notes (continued)
3. | Affiliates and Affiliated Transactions (continued): (All dollar amounts are x 1,000) |
Although these agreements specify certain fees for these services, CSIM and Schwab have made additional agreements with the funds to limit the total expenses charged, excluding interest, taxes and certain non-routine expenses through February 27, 2008, as follows:
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Investor Shares | 1.30% | 0.75% | 1.10% | 1.20% | 1.30% | 2.00% | ** | |||||||||||||||||
Select Shares* | 1.15% | n/a | 0.95% | 0.99% | 1.12% | 1.77% | ** | |||||||||||||||||
Financial | Health Care | Technology | ||||||||||||||||||||||
Services Fund | Fund | Fund | ||||||||||||||||||||||
Investor Shares | 1.10% | 1.10% | 1.10% | |||||||||||||||||||||
Select Shares* | n/a | n/a | n/a |
* | Select Shares are only offered by Premier Equity Fund, Dividend Equity Fund, Large-Cap Growth Fund, Small-Cap Equity Fund, and Hedged Equity Fund. |
** | Excluding dividend and interest paid on securities sold short. |
The Schwab Target Funds invest portions of their portfolios in certain Schwab Active Equity Funds. The table below reflects the percentage of each Active Equity Fund’s shares owned by the Target Funds as of October 31, 2007.
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Schwab Target Funds: | ||||||||||||||||||||||||
Target 2010 | — | 1.1% | 0.3% | — | 1.0% | — | ||||||||||||||||||
Target 2020 | — | 1.8% | 0.6% | — | 1.8% | — | ||||||||||||||||||
Target 2030 | — | 1.5% | 0.5% | — | 1.4% | — | ||||||||||||||||||
Target 2040 | — | 1.2% | 0.3% | — | 1.0% | — | ||||||||||||||||||
Retirement Income | — | — | 0.5% | — | — | — | ||||||||||||||||||
Financial | Health | Technology | ||||||||||||||||||||||
Services Fund | Care Fund | Fund | ||||||||||||||||||||||
Schwab Target Funds: | ||||||||||||||||||||||||
Target 2010 | — | — | — | |||||||||||||||||||||
Target 2020 | — | — | — | |||||||||||||||||||||
Target 2030 | — | — | — | |||||||||||||||||||||
Target 2040 | — | — | — | |||||||||||||||||||||
Retirement Income | — | — | — |
Schwab Charitable Giving Trust owns Dividend Equity Fund. As of October 31, 2007, the shares owned by each Charitable Giving Trust as a percentage of the total shares of the Dividend Equity Fund are 4.23%.
The funds may make direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs.
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Financial Notes (continued)
3. | Affiliates and Affiliated Transactions (continued): (All dollar amounts are x 1,000) |
This practice is limited to funds that share the same investment adviser, trustees and officers. As of October 31, 2007, each fund’s total security transactions with other Schwab Funds were as follows:
Premier Equity Fund | $15,716 | |||
Core Equity Fund | 11,552 | |||
Dividend Equity Fund | 63 | |||
Large-Cap Growth Fund | 8,493 | |||
Small-Cap Equity Fund | 3,957 | |||
Hedged Equity Fund | — | |||
Financial Services Fund | — | |||
Health Care Fund | 2,596 | |||
Technology Fund | — |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions within the Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. There was no interfund borrowing or lending activity for any fund during the period.
Trustees
Trustees may include people who are officers and/or directors of the investment adviser or Schwab. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these persons for their service as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
4. Borrowing from Banks:
The funds may borrow money from banks and custodians. The funds may obtain temporary bank loans through the trusts to which they belong, to use for meeting shareholder redemptions or for extraordinary or emergency purposes. The Schwab Funds have custodian overdraft facilities and uncommitted line of credit arrangements of $150 million and $100 million with State Street Corporation and Bank of America, N.A., respectively. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. There were no borrowings from the line of credit for the funds during the period.
5. | Purchases and Sales of Investment Securities: |
(All dollar amounts are x 1,000)
For the fiscal year ended October 31, 2007, purchases and sales of securities (excluding short-term obligations and securities sold short) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Premier Equity Fund | $1,187,809 | $1,279,082 | ||||||
Core Equity Fund | 1,127,850 | 309,022 | ||||||
Dividend Equity Fund | 986,581 | 335,096 | ||||||
Large-Cap Growth Fund | 502,038 | 121,387 | ||||||
Small-Cap Equity Fund | 985,363 | 1,042,097 | ||||||
Hedged Equity Fund | 937,355 | 992,199 | ||||||
Financial Services Fund | 55,013 | 60,566 | ||||||
Health Care Fund | 353,213 | 236,833 | ||||||
Technology Fund | 37,343 | 60,905 |
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Financial Notes (continued)
6. | Redemption Fee: |
(All dollar amounts are x 1,000)
The funds may impose a short-term redemption fee on any fund shares that are redeemed or exchanged by a shareholder within a specified number of days of the purchase date. The funds charge a 2.00% redemption fee on shares held less than 30 days. Such amounts are net of the redemption fee proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior fiscal year are:
Current Period | Prior Period | |||||||
(11/01/06 – 10/31/07) | (11/01/05 – 10/31/06) | |||||||
Premier Equity Fund | ||||||||
Investor Shares | $16 | $38 | ||||||
Select Shares | 10 | 42 | ||||||
Core Equity Fund | 83 | 66 | ||||||
Dividend Equity Fund | ||||||||
Investor Shares | 45 | 19 | ||||||
Select Shares | 28 | 20 | ||||||
Large-Cap Growth Fund | ||||||||
Investor Shares | 15 | 5 | ||||||
Select Shares | 10 | 2 | ||||||
Small-Cap Equity Fund | ||||||||
Investor Shares | 30 | 34 | ||||||
Select Shares | 15 | 16 | ||||||
Hedged Equity Fund | ||||||||
Investor Shares | 14 | 32 | ||||||
Select Shares | 157 | 29 | ||||||
Financial Services Fund | 8 | 11 | ||||||
Health Care Fund | 58 | 42 | ||||||
Technology Fund | 4 | 5 |
7. | Subsequent Event: |
In November 2007, the Board of Trustees approved the closing and liquidation of Schwab Technology Fund (the “Fund”). Effective November 15, 2007, the Fund was closed to new investors, stopped selling shares, stopped accepting automatic investments and or exchanges into the Fund. The Fund will redeem all of its outstanding shares on or shortly after February 15, 2008 (the liquidation date), and distribute the proceeds to the Fund’s shareholders (subject to maintenance of appropriate reserves for liquidation and other expenses).
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Financial Notes (continued)
8. | Federal Income Taxes: |
(All dollar amounts are x 1,000)
As of October 31, 2007, the components of distributable earnings on a tax-basis were as follows:
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Undistributed ordinary income | $2,367 | $12,198 | $1,711 | $867 | $— | $8,209 | ||||||||||||||||||
Undistributed long-term capital gains | 98,351 | 4,680 | 7,001 | — | 33,589 | — | ||||||||||||||||||
Unrealized appreciation | 315,578 | 387,684 | 379,642 | 87,381 | 93,500 | 194,643 | ||||||||||||||||||
Unrealized depreciation | (23,393 | ) | (44,111 | ) | (34,663 | ) | (11,088 | ) | (39,274 | ) | (28,368 | ) | ||||||||||||
Other unrealized appreciation/(depreciation) | — | — | — | — | — | (8,313 | ) | |||||||||||||||||
Net unrealized appreciation/(depreciation) | $292,185 | $343,573 | $344,979 | $76,293 | $54,226 | $157,962 | ||||||||||||||||||
Financial | ||||||||||||||||||||||||
Services | Health | Technology | ||||||||||||||||||||||
Fund | Care Fund | Fund | ||||||||||||||||||||||
Undistributed ordinary income | $860 | $2,267 | $— | |||||||||||||||||||||
Undistributed long-term capital gains | 139 | 4,852 | — | |||||||||||||||||||||
Unrealized appreciation | 14,194 | 160,687 | 13,755 | |||||||||||||||||||||
Unrealized depreciation | (3,133 | ) | (18,694 | ) | (466 | ) | ||||||||||||||||||
Other unrealized appreciation/(depreciation) | — | — | — | |||||||||||||||||||||
Net unrealized appreciation/(depreciation) | $11,061 | $141,993 | $13,289 | |||||||||||||||||||||
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)
8. | Federal Income Taxes (continued): (All dollar amounts are x 1,000) |
Capital loss carry forwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2007, the following funds had capital loss carry forwards available to offset net capital gains before the expiration dates:
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Expire | Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||||||
2009 | $— | $— | $— | $— | $— | $— | ||||||||||||||||||
2010 | — | — | — | — | — | — | ||||||||||||||||||
2011 | — | — | — | — | — | — | ||||||||||||||||||
2012 | — | — | — | — | — | — | ||||||||||||||||||
2013 | — | — | — | 158 | — | |||||||||||||||||||
2014 | — | — | — | 2,674 | — | 22,535 | ||||||||||||||||||
2015 | — | — | — | 2,012 | — | 22,795 | ||||||||||||||||||
Total | — | — | — | 4,844 | — | 45,330 | ||||||||||||||||||
Financial | ||||||||||||||||||||||||
Services | Health Care | Technology | ||||||||||||||||||||||
Expire | Fund | Fund | Fund | |||||||||||||||||||||
2009 | $— | $— | $7,299 | |||||||||||||||||||||
2010 | — | — | 18,147 | |||||||||||||||||||||
2011 | — | — | 6,697 | |||||||||||||||||||||
2012 | — | — | — | |||||||||||||||||||||
2013 | — | — | — | |||||||||||||||||||||
2014 | — | — | — | |||||||||||||||||||||
Total | — | — | $32,143 |
As of October 31, 2007, the capital losses carried from prior years were utilized to offset current year’s capital gains as follows:
Premier | ||||||||
Equity Fund | Technology Fund | |||||||
Capital losses utilized | $571 | $4,232 |
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Financial Notes (continued)
8. | Federal Income Taxes (continued): (All dollar amounts are x 1,000) |
The tax-basis components of distributions paid during the current and prior fiscal years were:
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||
Ordinary income | $2,003 | $7,073 | $32,649 | $550 | $— | $6,262 | ||||||||||||||||||
Long-term capital gains | — | 21,463 | 30,177 | — | 3,610 | — | ||||||||||||||||||
Return of capital | — | — | — | — | — | — | ||||||||||||||||||
Prior period distributions | ||||||||||||||||||||||||
Ordinary income | $3,776 | $3,509 | $21,310 | $30 | $1,708 | $2,197 | ||||||||||||||||||
Long-term capital gains | — | — | 13,306 | — | 6,515 | 7,073 | ||||||||||||||||||
Return of capital | — | — | — | — | — | — | ||||||||||||||||||
Financial | ||||||||||||||||||||||||
Services | Health Care | Technology | ||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||
Ordinary income | $799 | $— | $— | |||||||||||||||||||||
Long-term capital gains | 1,133 | 5,277 | — | |||||||||||||||||||||
Return of capital | — | — | — | |||||||||||||||||||||
Prior period distributions | ||||||||||||||||||||||||
Ordinary income | $616 | — | — | |||||||||||||||||||||
Long-term capital gains | 1,228 | — | — | |||||||||||||||||||||
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; paydowns on fixed-income 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.
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Schwab Active Equity Funds
Financial Notes (continued)
8. | Federal Income Taxes (continued): (All dollar amounts are x 1,000) |
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2007, the funds made the following reclassifications:
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Capital Shares | — | — | — | — | $(3,505 | ) | — | |||||||||||||||||
Undistributed net investment income | — | — | — | — | 3,505 | — | ||||||||||||||||||
Net realized capital gains and losses | — | — | — | — | — | — | ||||||||||||||||||
Financial | ||||||||||||||||||||||||
Services | Health Care | Technology | ||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||
Capital Shares | — | — | $(263 | ) | ||||||||||||||||||||
Undistributed net investment income | — | — | 263 | |||||||||||||||||||||
Net realized capital gains and losses | — | — | — |
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Premier Equity Fund
Schwab Core Equity Fund
Schwab Dividend Equity Fund
Schwab Large-Cap Growth Fund
Schwab Small-Cap Equity Fund
Schwab Hedged Equity Fund
Schwab Financial Services Fund
Schwab Health Care Fund
Schwab Technology Fund
Schwab Premier Equity Fund
Schwab Core Equity Fund
Schwab Dividend Equity Fund
Schwab Large-Cap Growth Fund
Schwab Small-Cap Equity Fund
Schwab Hedged Equity Fund
Schwab Financial Services Fund
Schwab Health Care Fund
Schwab Technology Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Premier Equity Fund, Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund, Schwab Health Care Fund, and Schwab Technology Fund (nine of the portfolios constituting Schwab Capital Trust, hereafter referred to as the ‘Funds‘) at October 31, 2007, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as ‘financial statements‘) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 13, 2007
San Francisco, California
December 13, 2007
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Other Federal Tax Information (unaudited)
(All dollar amounts are x 1,000)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2007, qualify for the corporate dividends received deduction:
Percentage | ||||
Premier Equity Fund | 100 | |||
Core Equity Fund | 100 | |||
Dividend Equity Fund | 100 | |||
Large-Cap Growth Fund | 100 | |||
Small-Cap Equity Fund | — | |||
Hedged Equity Fund | 100 | |||
Health Care Fund | — | |||
Financial Services Fund | 100 | |||
Technology Fund | — |
For the fiscal year ended October 31, 2007, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2008 via IRS form 1099 of the amounts for use in preparing their 2007 income tax return.
Premier Equity Fund | $2,003 | |||
Core Equity Fund | 7,073 | |||
Dividend Equity Fund | 32,649 | |||
Large-Cap Growth Fund | 550 | |||
Small-Cap Equity Fund | — | |||
Hedged Equity Fund | 6,262 | |||
Health Care Fund | — | |||
Financial Services Fund | 799 | |||
Technology Fund | — |
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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 advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
Consistent with these responsibilities, 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 CSIM (the “Agreement”) with respect to existing funds in the Trust, including the funds covered in this annual report, 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. 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 memo regarding the responsibilities of trustees for the approval of investment advisory contracts. 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 at meetings held on May 2, 2007, and June 5, 2007, and approved the renewal of the Agreement for an additional one year term at the meeting held on June 5, 2007. The Board’s approval of the Agreement 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 information considered by the Trustees included specific information concerning changes in the nature, extent and quality of services provided by CSIM since the Trustees had last considered approval of the Agreement. The Trustees also considered investments in CSIM’s mutual fund infrastructure and the fact that 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 CSIM’s top three ranking in an independent survey regarding mutual fund client loyalty, 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.
Fund Performance. The Board considered fund performance in determining whether to renew the Agreement. Specifically, the Trustees considered each fund’s performance relative to a peer group and peer category of other mutual
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funds and appropriate indices/benchmarks, in light of total return, yield, when applicable, and market trends. As part of this review, the Trustees considered the composition of the peer group and peer category, selection criteria and the reputation of the third party who prepared the peer group and peer category analysis. In evaluating the performance of each fund, the Trustees considered both risk and shareholder risk expectations for such fund and the appropriateness of the benchmark used to compare the performance of each fund. The Trustees further considered the level of fund performance in the context of its review of fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the funds supported renewal of the Agreement.
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 other comparable 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 fees charged by CSIM to other mutual funds and to other types of accounts, such as wrap accounts, 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 Agreement.
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. The Board also considered information relating to changes to CSIM’s business operations and how these changes affected CSIM’s profitability under the Agreement. 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.
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 previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered existing contractual investment advisory fee schedules that include lower fees at higher graduated asset levels. The Board also considered certain existing commitments by CSIM and Schwab that are designed to pass along potential economies of scale to fund shareholders. 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, unanimously approved the continuation of the Agreement and concluded that the compensation under the Agreement 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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The tables below give information as of October 31, 2007, about the trustees and officers for The 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, and Laudus Trust. As of October 31, 2007, the Fund Complex included 70 funds.
The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Board 1—Director, Redwood Trust, Inc. Board 2—Director, PMI Group, Inc. | |||||
Donald F. Dorward 1931 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chief Executive Officer, Dorward & Associates (corporate management, marketing and communications consulting firm). From 1996-1999, Executive Vice President and Managing Director, Grey Advertising. Prior to 1996, President and Chief Executive Officer, Allen & Dorward Advertising. | 60 | None. | |||||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley. Until February 2004, Co-Chief Executive Officer, Aphton Corp. (bio-pharmaceuticals). | 70 | Board 1—Director, Mission West Properties Board 2—Director, TOUSA Board 3—Director, Harris-Stratex Networks Board 4—Director, Genitope Corp. Board 5—Director & Non-Executive Chairman, Solectron Corp. Board 6—Director, Ditech Networks | |||||
Robert G. Holmes 1931 (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, Semloh Financial, Inc. (international financial services and investment advisory firm). | 60 | None. | |||||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and founder of Smith Graham & Co.(investment advisors). | 60 | Board 1—Board of Cooper Industries Board 2—Chairman of the Audit Committee of Oneok Partners LP | |||||
Donald R. Stephens 1938 Trustee (Trustee of Schwab Capital Trust since 1989.) | Managing Partner, D. R. Stephens & Company (investments). | 60 | None. | |||||
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Independent Trustees continued | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Michael W. Wilsey 1943 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer, Wilsey Bennett, Inc. (real estate investment and management, and other investments). | 60 | None. | |||||
Interested Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served ) | Past Five Years | the Trustee | Other Directorships | |||||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc.; Chairman and Director, Charles 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 and Director, Schwab Holdings, Inc. Through June 2007, Director, U.S. Trust Company, N.A., U.S. Trust Company of New York. Until May 2003, Co-Chief Executive Officer, The Charles Schwab Corporation. | 60 | None | |||||
Randall W. Merk2 1954 Trustee (Trustee of Schwab Capital Trust since 2005.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | 70 | None. | |||||
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Officers of the Trust | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Randall W. Merk 1954 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2007.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer, Charles Schwab Investment Management, Inc.; Chief Financial Officer, Laudus Trust and Laudus Variable Insurance Trust; Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited. Through June 2007, Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust; Chief Financial Officer, Mutual Fund Division, UST Advisors, Inc. From December 1999 to November 2004, Sr. Vice President, Financial Reporting, Charles Schwab & Co. Inc. | |
Kimon Daifotis 1959 Senior Vice President and Chief Investment Officer-Fixed Income (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Fixed Income, Charles Schwab Investment Management, Inc. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Jeffrey Mortimer 1963 Senior Vice President and Chief Investment Officer-Equities (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Equities, Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer, Laudus Trust and Laudus Variable Insurance Trust. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Randall Fillmore 1960 Chief Compliance Officer and AML Officer (Officer of Schwab Capital Trust since 2002.) | Senior Vice President and Chief Compliance Officer, Charles Schwab Investment Management, Inc.; Senior Vice President, Charles Schwab & Co. Inc.; Chief Compliance Officer, Laudus Trust and Laudus Variable Insurance Trust. Through June 2007, Chief Compliance Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust. From 2002 to 2003, Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc. | |
Koji E. Felton 1959 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 1998.) | Senior Vice President, Chief Counsel and Corporate Secretary, Charles Schwab Investment Management, Inc.; Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. Through June 2007, Chief Legal Officer, Excelsior Funds Inc., Excelsior Tax Exempt Funds, Inc. and Excelsior Funds Trust. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust; since 2006, Chief Counsel, Laudus Trust and Variable Insurance Trust. Until July 2005, Senior Associate, Paul Hastings Janofsky & Walker LLP. | |
Cathy Sabo 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President-Compliance, Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust. Until 2004, Vice President, Client, Sales & Services Controls, Charles Schwab & Co., Inc. | |
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Officers of the Trust continued | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Michael Haydel 1970 Vice President (Officer of Schwab Capital Trust since 2006.) | Vice President, Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President and AML Officer, Laudus Trust and Laudus Variable Insurance Trust. Until March 2004, Director Charles Schwab & Co., Inc. | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after 20 years of service as a trustee, whichever comes first. Independent trustees elected prior to January 1, 2000 will retire on the following schedule: Messrs. Holmes and Dorward will retire on December 31, 2007, and Messrs. Stephens and Wilsey will retire on December 31, 2010. |
2 | In addition to their employment with the investment advisor and the distributor, Messrs. Schwab and Merk also own stock of The Charles Schwab Corporation. Mr. Schwab and Mr. Merk are Interested Trustees because they are employees of Schwab and/or the advisor. |
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 other officer serves at the pleasure of the Board. |
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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.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500T). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the “coupon rate”) until a specified date (the “maturity date”), at which time the issuer returns the money borrowed (“principal” or “face value”) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
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.
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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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 Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting Schwab’s website at www.schwab.com/schwabfunds, the SEC’s website at 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 Schwab’s website at www.schwab.com/schwabfunds or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fundtm
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 Technology Fundtm
Schwab Fundamental US Large Company Index Fundtm
Schwab Fundamental US Small-Mid Company Index Fundtm
Schwab Fundamental International Large Company Index Fundtm
Schwab Global Real Estate Fundtm
Schwab Institutional Select® S&P 500 Fund
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 Viewpoints Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
Bond Funds
Schwab YieldPlus Fund®
Schwab Short-Term Bond Market Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab Inflation Protected Fundtm
Schwab Tax-Free YieldPlus Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free YieldPlus Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity.1 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.
101 Montgomery Street, San Francisco, CA 94104
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.
© 2006 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC
Printed on recycled paper.
MFR26298-04
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Annual report dated October 31, 2007 enclosed.
Schwab Equity Index Funds
Schwab Institutional Select®
S&P 500 Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market
Index Fund®
Schwab International
Index Fund®
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Table of Contents
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Coming Soon —
Schwab Fundamental Emerging Markets Index Fundtm
Schwab Fundamental International Small-Mid Company Index Fundtm
Schwab Funds® is expanding its innovative product line of Fundamental Index Funds to include two new funds – Schwab Fundamental Emerging Markets Index Fund and Schwab Fundamental International Small-Mid Company Index Fund.
These Funds are designed to leverage the groundbreaking research of Rob Arnott and his firm, Research Affiliates, to capture market performance in two key asset classes, emerging markets and international small/mid. The Funds will be passively managed and track the FTSE RAFI Indices that select and weight stocks based on four fundamental financial measures: sales, cash flows, book value and dividends.
Schwab Fundamental Index Funds provide access to an advanced indexing approach intended to offset the risks of cap-weighted indexes while offering the potential for higher investment returns and lower volatility.
Participate in the subscription offer:
Invest between January 11 and January 30, 2008 and take advantage of the $10 per share subscription price1. The Funds will commence operations on January 31, 2008.
Schwab Clients: Visit: www.schwab.com/fundamental Call: 877-796-6740 | Institutional Advisors: Visit: www.schwabinstitutional.com Call: 877-824-5615 |
Schwab Fundamental Emerging Markets Index Fund | ||||||||||
Minimum | Expense | |||||||||
Share Class | Symbol* | Initial Investment | Ratio2 | |||||||
Investor | SFEMX | $100 | .84% | |||||||
Select | SFESX | $50,000 | .69% | |||||||
Institutional | SFENX | $500,000 | .60% | |||||||
Schwab Fundamental International Small-Mid Company Index Fund | ||||||||||
Minimum | Expense | |||||||||
Share Class | Symbol* | Initial Investment | Ratio2 | |||||||
Investor | SFIVX | $100 | .79% | |||||||
Select | SFSMX | $50,000 | .64% | |||||||
Institutional | SFILX | $500,000 | .55% | |||||||
Investors should consider carefully information contained in the prospectus including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at (877) 796-6740. Please read the prospectus carefully before investing. Investment value and return will fluctuate such that shares, when redeemed, may be worth more or less than original cost.
International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks.
Historically, small-cap stocks have been more volatile than the stocks of larger, more-established companies.
1 | Subscription orders must be received in good form by 4 p.m. EDT on January 30, 2008. Orders received after that time will be invested at the next determined net asset value (NAV) after receipt and acceptance of the order by Schwab. Sufficient assets must be in your account by 9 a.m. EDT on January 30, 2008. If you do not have sufficient assets to meet the minimum initial investment requirement for the fund you have selected, your order will be canceled. You may reinstate your order by bringing a check to your local Schwab branch by 4 p.m. EDT on January 30, 2008. Share prices will fluctuate once operations commence on January 31, 2008. |
2 | Net OER guaranteed through February 27, 2009 (excluding interest, taxes and certain non-routine expenses). |
Schwab Funds is the exclusive FTSE RAFI Index Series provider of non-exchange traded passively managed equity mutual funds. The Fundamental Index, Fundamentals Weighted and RAFI trade names and patent-pending concept are the exclusive property of Research Affiliates, LLC and are used by Charles Schwab Investment Management under license through FTSE. FTSE, Rob Arnott and Research Affiliates, LLC are not affiliated with Charles Schwab & Co., Inc. and its affiliates, parents and subsidiaries.
*These symbols are for trading at Schwab and have not received final approval from NASDAQ.
©2007 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. (1207-8826)
Table of Contents
Schwab Equity Index Funds
Annual Report
October 31, 2007
Schwab S&P 500 Index Fund
Schwab Institutional Select®
S&P 500 Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market
Index Fund®
Schwab International
Index Fund®
Six cost-efficient ways to tap into the power of
the stock market for long-term growth potential.
In This Report | ||
1 | ||
2 | ||
3 | ||
4 | ||
6 | ||
8 | ||
10 | ||
12 | ||
14 | ||
16 | ||
18 | ||
20 | ||
63 | ||
72 | ||
74 | ||
76 | ||
80 |
Select Shares® are available on many Schwab Funds®
Schwab Funds offers Select Shares, a share class that carries lower expenses than Investor Sharestm in exchange for higher investment minimums on many of its funds. Select Shares are available for initial purchases of $50,000 or more of a single fund in a single account and for shareholders who add to their existing Investor Share position, bringing the value to or above $50,000. We encourage shareholders of Investor Shares to review their portfolio to see if they are eligible to exchange into Select Shares. If you believe you are eligible, you should contact Schwab or your financial intermediary to request a tax-free interclass exchange into Select Shares. Instructions for performing a tax-free interclass exchange can also be referenced on the Schwab Funds website at www.schwab.com/schwabfunds under Schwab Funds Investor Information. Select Shares may not be available through financial intermediaries other than Charles Schwab & Co., Inc.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
The industry/sector classification of the funds’ portfolio holdings uses the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.
Table of Contents
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.schwab.com/schwabfunds.
Total Return for | ||
the Report Period | ||
Schwab S&P 500 Index Fund | ||
Investor Shares (Ticker Symbol: SWPIX) | 14.29% | |
Select Shares® (Ticker Symbol: SWPPX) | 14.50% | |
e.Shares (Ticker Symbol: SWPEX)1 | 14.49% | |
Benchmark: S&P 500® Index | 14.56% | |
Performance Details | pages 6-7 | |
Schwab Institutional Select® S&P 500 Fund | ||
(Ticker Symbol: ISLCX) | 14.43% | |
Benchmark: S&P 500® Index | 14.56% | |
Performance Details | pages 8-9 | |
Schwab 1000 Index® Fund | ||
Investor Shares (Ticker Symbol: SNXFX) | 14.81% | |
Select Shares® (Ticker Symbol: SNXSX) | 14.98% | |
Benchmark: Schwab 1000 Index® | 15.36% | |
Performance Details | pages 10-11 | |
Schwab Small-Cap Index Fund® | ||
Investor Shares (Ticker Symbol: SWSMX) | 11.16% | |
Select Shares® (Ticker Symbol: SWSSX) | 11.35% | |
Benchmark: Schwab Small-Cap Index® | 11.73% | |
Performance Details | pages 12-13 | |
Schwab Total Stock Market Index Fund® | ||
Investor Shares (Ticker Symbol: SWTIX) | 14.44% | |
Select Shares® (Ticker Symbol: SWTSX) | 14.62% | |
Benchmark: Dow Jones Wilshire 5000 Composite IndexSM | 15.28% | |
Performance Details | pages 14-15 | |
Schwab International Index Fund® | ||
Investor Shares (Ticker Symbol: SWINX) | 26.26% | |
Select Shares® (Ticker Symbol: SWISX) | 26.50% | |
Benchmark: Schwab International Index® | 26.44% | |
Performance Details | pages 16-17 | |
Minimum Initial Investment2 | ||
Investor Shares | $ 100 | |
Select Shares® | $ 50,000 | |
e.Shares ($500 for retirement, education and custodial accounts) | $ 1,000 | |
Institutional Select S&P 500 Fund | $ 75,000 | |
All fund and index figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and Schwab. 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.
1 | One year return presented in the table differs from the return in the Financial Highlights. This is a result of the calculation of the Financial Highlights return adhering to GAAP presentation. |
2 | Please see prospectus for further detail and eligibility requirements. |
Schwab Equity Index Funds 1
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From the Chairman
Charles Schwab
Chairman
Dear Shareholder,
I have been a fan of mutual funds throughout my long investing career. I say this because I firmly believe they are a cost-effective and convenient way for investors to achieve a diversified portfolio. And, as we face increasing uncertainty in global markets, diversification is as important now as it has ever been.
Research has indicated that spreading your money across, and equally important, within, different asset classes, such as stocks, bonds, and cash equivalents, can be the most important factor in determining overall portfolio performance. By maintaining diversification, your portfolio can be better positioned to help you weather the market ups and downs.
With a broad range of investment strategies and styles, Schwab Funds® provides an uncomplicated, effective way to build a well diversified portfolio. You can choose from an array of funds across a range of investment objectives and styles. If you prefer a single investment solution, we offer asset allocation funds based on either risk tolerance or time horizon.
Here at Schwab, our goal is to help you reach your financial goals. With quality funds and services, backed by the guidance and support you need—whatever type of investor you are—we can help you be financially fit today and in the future.
Thank you for investing with us.
Sincerely,
2 Schwab Equity Index Funds
Table of Contents
From the President
Randall W. Merk is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report. He joined the firm in 2002 and has held a variety of executive positions at Schwab.
Dear Shareholder,
In returning to my role as President and CEO of Charles Schwab Investment Management, I would like to thank you for investing in Schwab Funds® and share my thoughts with you on the current market environment.
The reemergence of volatility during this past year has shaken financial markets, both domestically and globally. Subprime mortgage market issues have caused a chain reaction throughout equity and credit markets, and investors are undoubtedly concerned about their financial outlook in the near future. As riskier securities came under pressure during this past August’s market correction, investors fled to “safer haven” investments, such as U.S. Treasuries.
Attempting to time the market in this way can be both a frustrating and risky experience. We have always believed your best protection against swings in market volatility is to maintain a well-diversified investment portfolio that is built to provide long-term performance.
Thank you for entrusting us with your investments. I speak for all of us at Schwab when I say our goal is to give you the financial products, guidance, and personal relationship you need to be financially fit.
Sincerely,
Schwab Equity Index Funds 3
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The Investment Environment
Jeffrey Mortimer, CFA, a senior vice president and chief investment officer, equities, has overall responsibility for the management of the funds.
During the past year, the global economy benefited from positive earnings growth, an ample supply of liquidity, and reasonably low volatility. Investors became increasingly bullish, and firms financed a record level of private equity buyouts, acquisitions, and stock buybacks. However, the housing market correction, and more recently, turmoil in the subprime mortgage market, has had a ripple effect throughout the U.S. and global economy. Several key issues continued to resonate with investors, including the deterioration of the housing market, the lagged effects of monetary policy, tightening of lending standards, and rising energy prices.
The U.S. economy grew at a sub-par pace during the early part of the report period, consistent with the Federal Reserve’s (the Fed’s) engineered soft landing. Throughout its statements, the Fed noted that the economy would grow at a more moderate rate as a result of prior rate increases, lagged effects of higher energy prices, and a cooling housing market. As any rate below 3% is generally considered to be sub-par, the economy appeared to be on a trend of underperformance. However, Gross Domestic Product (GDP) in the second and third quarter of 2007 surprised on the upside; 3.8% and an advanced 3.9%, respectively. Though consumer spending weighed heavily in recent improved GDP readings, tightening credit conditions and continued deterioration in the U.S. housing market remained imminent threats to household equity, a meaningful underpinning of consumer spending.
The housing market remained a significant headwind for U.S. economic growth during the report period. New- and existing-home sales trended downward, and inventories reached an alarming 10.5-month supply (existing homes) by September 2007. Initial concerns that troubles in the housing market would spill over to the rest of the economy became more pronounced, as declining housing starts and home sales caused builders and mortgage lenders to layoff thousands of employees. Delinquency rates on subprime mortgages and foreclosures on residential homes continued on an upward trend as well, further pushing back a recovery in an already weakened market.
The recent tightening of lending standards had a detrimental effect on economic growth as well. Though subprime mortgages were able to find their way into securitized structures via relaxed access to credit and ample liquidity, the increased frequency of defaults by subprime borrowers stressed securities holding these mortgages, leading to wider spreads and higher risk. Evidence that subprime issues had emerged became more pronounced after February’s spike in volatility, which only compounded throughout the report period. Liquidity in the market for these riskier securities essentially dried up after this recent summer’s market
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
14.56% | S&P 500® Index: measures U.S. large-cap stocks |
9.27% | Russell 2000® Index: measures U.S. small-cap stocks |
24.91% | MSCI-EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East |
5.38% | Lehman Brothers U.S. Aggregate Bond Index: measures the U.S. bond market |
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Charles Schwab & Co., Inc.
4 Schwab Equity Index Funds
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The Investment Environment continued
correction, putting financial institutions laden with subprime debt into financial turmoil. While the Fed helped improve liquidity issues at first by pumping money into the banking system and using the discount rate to reduce rates, many lenders reduced or cancelled altogether certain subprime lending programs.
Market volatility also had a significant impact on quantitative strategies in July and August of 2007. In a recent report by Lehman Brothers, it is believed that several large multi-strategy managers experienced significant losses in their fixed income portfolios. In order to raise cash to cover potential redemptions, and hesitant to price their now lower-valued portfolios, money managers sold their most liquid holdings in the U.S. equity market. As trades came into the market, the adverse effect that followed was that long positions declined and short positions rallied. The end result was that billions of dollars were turned over during this “quant squeeze,” leading to wider spreads and volatility in market prices.
The timing of recent turmoil in the financial markets partially stems from the fact that monetary policy typically acts with a lagged effect on the broader economy. While generally accepted that the effects of Fed rate hikes have a lag of between three and 18 months, it’s also believed that most of the effects can be seen around the twelfth month. Working back from February 2007’s correction in global markets, the Fed funds target rate was 4.25%, yet the Fed didn’t stop raising rates until June 2006, when it finally reached 5.25%. The 12-month lag, therefore, would indicate that subsequent rate hikes were finally hitting the market, as we saw during the recent summer months.
The Fed held its target for the Fed funds rate for most of the period at 5.25%. However, as conditions in the market progressively worsened, the Fed cut twice, bringing the target rate down to 4.50% by the end of the report period. Although it noted recent economic growth was solid and conditions in financial markets were markedly improved, it also expressed its concern that conditions in the housing market could hinder the economic expansion in the near term.
Against this backdrop of economic data, the market priced in future Fed rate cuts. The housing market showed little to no sign that a bottom is anywhere in the near future, labor markets faced continued downward pressures, and energy prices remained elevated. Oil reached all time highs over the year, closing out just above $96 a barrel as of the end of the report period. While the tax-like effect of higher energy prices, declining equity values in residential real estate, and the lag effect of monetary policy remained significant headwinds for the U.S. economy, the Fed’s recent response to a volatile market eased investor concern toward the end of the period.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Equity Index Funds 5
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Schwab S&P 500 Index Fund
Larry Mano, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab S&P 500 Index Fund Investor Shares returned 14.29% for the report period, tracking its benchmark, the S&P 500 Index, which was up 14.56%. Unlike the fund, the index does not include operational and transaction costs. The S&P 500 Index includes the stocks of 500 leading U.S. publicly traded companies from a broad range of industries and is market-capitalization weighted. Therefore, its returns are most heavily influenced by the largest names in the index. From an industry group perspective, Energy, Tech Hardware and Equipment, and Materials were among the top performers during the period. Better performing stocks included Exxon Mobil Corp., Apple, Inc., and Microsoft Corp. Among the industry groups that weighed down returns were Banks, Consumer Durables, and Retailing. Positions in Citigroup, Inc., Merrill Lynch & Co., Inc., and Amgen, Inc., detracted from returns.
As of 10/31/07:
Style Assessment1
Statistics
Number of Holdings | 502 |
Weighted Average
Market Cap
($ x 1,000,000) | $112,302 |
Price/Earnings Ratio (P/E) | 18.0 |
Price/Book Ratio (P/B) | 3.0 |
Portfolio Turnover Rate | 2% |
Sector Weightings % of Investments
Financials | 18.9% |
Information Technology | 17.1% |
Health Care | 11.9% |
Energy | 11.5% |
Industrials | 11.5% |
Consumer Staples | 9.7% |
Consumer Discretionary | 9.0% |
Telecommunication Services | 3.7% |
Utilities | 3.3% |
Materials | 3.3% |
Other | 0.1% |
Total | 100.0% |
Top Holdings % of Net Assets2
Exxon Mobil Corp. | 3.8% |
General Electric Co. | 3.1% |
Microsoft Corp. | 2.3% |
AT&T, Inc. | 1.9% |
The Procter & Gamble Co. | 1.6% |
Bank of America Corp. | 1.6% |
Citigroup, Inc. | 1.5% |
Cisco Systems, Inc. | 1.5% |
Chevron Corp. | 1.5% |
Johnson & Johnson | 1.4% |
Total | 20.2% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Standard & Poor’s®, S&P®, S&P 500®, Standard & Poor’s 500® and 500® are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the fund. The fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Equity Index Funds
Table of Contents
Schwab S&P 500 Index Fund
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Performance of a Hypothetical
$10,000 Investment in e.Shares1
$10,000 Investment in e.Shares1
Pre-Tax Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (5/1/96) | 14.29% | 13.55% | 6.77% | |||||||||
Select Shares (5/19/97) | 14.50% | 13.76% | 6.95% | |||||||||
e.Shares (5/1/96) | 14.49% | 13.69% | 6.87% | |||||||||
Benchmark: S&P 500® Index | 14.56% | 13.87% | 7.10% | |||||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 13.63% | 6.87% |
Fund Expense Ratios3: Investor Shares: 0.36% / Select Shares4: Net 0.19%; Gross 0.21% / e.Shares: 0.21%
Average Annual Total Returns After Tax1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (5/1/96) | ||||||||||||
Pre-Liquidation (still own shares) | 14.03% | 13.02% | 6.33% | |||||||||
Post-Liquidation (shares were sold) | 9.58% | 11.55% | 5.67% | |||||||||
Select Shares® (5/19/97) | ||||||||||||
Pre-Liquidation (still own shares) | 14.22% | 13.25% | 6.50% | |||||||||
Post-Liquidation (shares were sold) | 9.75% | 11.78% | 5.84% | |||||||||
e.Shares® (5/1/96) | ||||||||||||
Pre-Liquidation (still own shares) | 14.21% | 13.21% | 6.43% | |||||||||
Post-Liquidation (shares were sold) | 9.74% | 11.74% | 5.77% | |||||||||
Fund Category: Morningstar Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 12.36% | 12.78% | 5.65% | |||||||||
Post-Liquidation (shares were sold) | 9.17% | 11.46% | 5.36% |
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/07 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. |
3 | As of 2/28/07 (amended on 7/02/07) as stated in the prospectus. |
4 | Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Equity Index Funds 7
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Schwab Institutional Select® S&P 500 Fund
Larry Mano, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
Schwab Institutional Select S&P 500 Fund returned 14.43%, tracking its benchmark, the S&P 500 Index, which was up 14.56% for the report period. Unlike the fund, the index does not include operational and transaction costs. The S&P 500 Index includes the stocks of 500 leading U.S. publicly traded companies from a broad range of industries and is market-capitalization weighted. Therefore, its returns are most heavily influenced by the largest names in the index. For the report period, all sectors experienced positive returns, which benefited the fund. Among the industry groups that appreciated the most were Energy, Information Technology, and Materials. Better performing stocks included such names as Exxon Mobil Corp., General Electric Co., and Apple, Inc. Industry groups that appreciated the least included Retailing, Banks, and Consumer Durables and Apparel. On the downside, stocks that detracted from returns included such names as Citigroup Inc., Bank of America Corp., and Comcast Corp.
As of 10/31/07:
Style Assessment1
Statistics
Number of Holdings | 503 |
Weighted Average
Market Cap
($ x 1,000,000) | $111,914 |
Price/Earnings Ratio (P/E) | 18.1 |
Price/Book Ratio (P/B) | 3.0 |
Portfolio Turnover Rate | 1% |
Sector Weightings % of Investments
Financials | 18.7% |
Information Technology | 17.0% |
Health Care | 11.7% |
Energy | 11.6% |
Industrials | 11.3% |
Consumer Staples | 9.4% |
Consumer Discretionary | 9.0% |
Telecommunication Services | 3.6% |
Utilities | 3.3% |
Materials | 3.3% |
Other | 1.1% |
Total | 100.0% |
Top Holdings % of Net Assets2
Exxon Mobil Corp. | 3.8% |
General Electric Co. | 3.0% |
Microsoft Corp. | 2.3% |
AT&T, Inc. | 1.9% |
The Procter & Gamble Co. | 1.6% |
Bank of America Corp. | 1.6% |
Citigroup, Inc. | 1.5% |
Cisco Systems, Inc. | 1.4% |
Chevron Corp. | 1.4% |
Johnson & Johnson | 1.4% |
Total | 19.9% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Standard & Poor’s®, S&P®, S&P 500®, Standard & Poor’s 500® and 500® are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the fund. The fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Equity Index Funds
Table of Contents
Schwab Institutional Select® S&P 500 Fund
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$75,000 Investment1
$75,000 Investment1
Pre-Tax Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | |||||||||
Fund: Schwab Institutional Select® S&P 500 Fund (2/1/99) | 14.43% | 13.80% | 3.76% | |||||||||
Benchmark: S&P 500® Index | 14.56% | 13.87% | 3.86% | |||||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 13.63% | 4.60% |
Fund Expense Ratios3: Net 0.10%; Gross 0.23%
Average Annual Total Returns After Tax1,2
1 Year | 5 Years | Since Inception | ||||||||||
Fund: Schwab Institutional Select® S&P 500 Fund (2/1/99) | ||||||||||||
Pre-Liquidation (still own shares) | 14.14% | 13.31% | 3.35% | |||||||||
Post-Liquidation (shares were sold) | 9.64% | 11.82% | 2.99% | |||||||||
Fund Category: Morningstar Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 12.36% | 12.78% | n/a | |||||||||
Post-Liquidation (shares were sold) | 9.17% | 11.46% | n/a |
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/07 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. |
3 | As of 2/28/07 (amended on 7/02/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Equity Index Funds 9
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Schwab 1000 Index® Fund
Larry Mano, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab 1000 Index Fund Investor Shares returned 14.81% for the report period, tracking its benchmark, the Schwab 1000 Index, which returned 15.36%. Unlike the fund, the index does not include operational and transaction costs. The Schwab 1000 Index is comprised of the stocks of the largest 1,000 publicly traded companies in the United States. The Schwab 1000 Index is market-capitalization weighted, and therefore, its returns are most heavily influenced by the largest names in the index. With the exception of Financials, all sectors experienced positive returns, which benefited the fund. From an industry group perspective, Materials, Energy, and Tech Hardware and Equipment were among the top performers. Better performing stocks for the period included Exxon Mobil Corp., Apple, Inc., and General Electric Co. Industry groups that appreciated the least were Banks, Retailing, and Real Estate. On the downside, positions in Citigroup, Inc., Amgen, Inc., and Merrill Lynch & Co., Inc. detracted from returns.
As of 10/31/07:
Style Assessment1
Statistics
Number of Holdings | 970 |
Weighted Average
Market Cap
($ x 1,000,000) | $99,362 |
Price/Earnings Ratio (P/E) | 18.4 |
Price/Book Ratio (P/B) | 2.9 |
Portfolio Turnover Rate | 6% |
Sector Weightings % of Investments
Financials | 19.6% |
Information Technology | 16.5% |
Industrials | 11.6% |
Health Care | 11.5% |
Energy | 11.4% |
Consumer Discretionary | 9.6% |
Consumer Staples | 8.6% |
Materials | 3.8% |
Utilities | 3.6% |
Telecommunication Services | 3.6% |
Other | 0.2% |
Total | 100.0% |
Top Holdings % of Net Assets2
Exxon Mobil Corp. | 3.3% |
General Electric Co. | 2.7% |
Microsoft Corp. | 2.0% |
AT&T Corp. | 1.7% |
The Procter & Gamble Co. | 1.4% |
Bank of America Corp. | 1.4% |
Citigroup, Inc. | 1.3% |
Cisco Systems, Inc. | 1.3% |
ChevronTexaco Corp. | 1.3% |
Johnson & Johnson | 1.2% |
Total | 17.6% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Equity Index Funds
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Schwab 1000 Index® Fund
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Pre-Tax Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (4/2/91) | 14.81% | 14.07% | 7.23% | |||||||||
Select Shares (5/19/97) | 14.98% | 14.24% | 7.38% | |||||||||
Benchmark: Schwab 1000 Index® | 15.36% | 14.50% | 7.59% | |||||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 13.63% | 6.87% |
Fund Expense Ratios3: Investor Shares: 0.49% / Select Shares: 0.34%
Average Annual Total Returns After Tax1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (4/2/91) | ||||||||||||
Pre-Liquidation (still own shares) | 14.60% | 13.68% | 6.88% | |||||||||
Post-Liquidation (shares were sold) | 9.87% | 12.13% | 6.15% | |||||||||
Select Shares® (5/19/97) | ||||||||||||
Pre-Liquidation (still own shares) | 14.74% | 13.80% | 6.98% | |||||||||
Post-Liquidation (shares were sold) | 10.01% | 12.25% | 6.25% | |||||||||
Fund Category: Morningstar Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 12.36% | 12.78% | 5.65% | |||||||||
Post-Liquidation (shares were sold) | 9.17% | 11.46% | 5.36% |
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/07 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies. |
3 | As of 2/28/07 (amended on 7/02/07) as stated in the prospectus. |
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Schwab Small-Cap Index Fund®
Larry Mano, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab Small-Cap Index Fund Investor Shares returned 11.16% for the report period, tracking its benchmark, the Schwab Small-Cap Index, which returned 11.73%. The Schwab Small-Cap Index is comprised of the stocks of the second-largest 1,000 publicly traded companies in the United States. The index is market-capitalization weighted, and therefore, its returns are most heavily influenced by the largest names in the index. Unlike the fund, the index does not include operational and transaction costs. With the exception of Financials, all sectors experienced positive returns, which benefited the fund. From an industry group perspective, Materials, Food Beverage and Tobacco, and Capital Goods were among the top performers. Stocks that performed well for the period included Crocs, Inc., Hansen Natural Corp., and CF Industries Holdings, Inc. Industry groups that appreciated the least during the period were Banks, Retailing, and Real Estate. Stocks that detracted from returns included such names as Coldwater Creek, Inc., American Home Mortgage Investment Corp., and RAIT Financial Trust.
As of 10/31/07:
Style Assessment1
Statistics
Number of Holdings | 983 |
Weighted Average
Market Cap
($ x 1,000,000) | $1,868 |
Price/Earnings Ratio (P/E) | 29.4 |
Price/Book Ratio (P/B) | 2.4 |
Portfolio Turnover Rate | 31% |
Sector Weightings % of Investments
Financials | 18.2% |
Information Technology | 16.6% |
Industrials | 16.0% |
Consumer Discretionary | 15.5% |
Health Care | 11.9% |
Energy | 8.1% |
Materials | 4.9% |
Consumer Staples | 3.2% |
Utilities | 3.2% |
Telecommunication Services | 1.5% |
Others | 0.9% |
Total | 100.0% |
Top Holdings % of Net Assets 2
KBR, Inc. | 0.7% |
Crocs, Inc. | 0.5% |
First Solar, Inc. | 0.4% |
CF Industries Holdings, Inc. | 0.4% |
Chipotle Mexican Grill, Inc.,
Class A | 0.4% |
Hansen Natural Corp. | 0.4% |
Hewitt Associates, Inc. Class A | 0.3% |
Terra Industries, Inc. | 0.3% |
DeVry, Inc. | 0.3% |
Dresser-Rand Group, Inc. | 0.3% |
Total | 4.0% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | This list is not a recommendation of any security by the investment adviser. |
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Schwab Small-Cap Index Fund®
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Pre-Tax Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (12/3/93) | 11.16% | 17.58% | 7.82% | |||||||||
Select Shares (5/19/97) | 11.35% | 17.78% | 7.96% | |||||||||
Benchmark: Schwab Small-Cap Index® | 11.73% | 17.93% | 8.48% | |||||||||
Fund Category: Morningstar Small-Cap Blend | 10.32% | 17.98% | 9.21% |
Fund Expense Ratios3: Investor Shares: 0.57% / Select Shares: 0.42%
Average Annual Total Returns After Tax1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (12/3/93) | ||||||||||||
Pre-Liquidation (still own shares) | 8.44% | 16.77% | 6.81% | |||||||||
Post-Liquidation (shares were sold) | 9.03% | 15.19% | 6.33% | |||||||||
Select Shares® (5/19/97) | ||||||||||||
Pre-Liquidation (still own shares) | 8.57% | 16.92% | 6.91% | |||||||||
Post-Liquidation (shares were sold) | 9.15% | 15.34% | 6.43% | |||||||||
Fund Category: Morningstar Small-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 7.02% | 16.49% | 7.65% | |||||||||
Post-Liquidation (shares were sold) | 7.00% | 15.25% | 7.38% |
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/07 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. |
3 | As of 2/28/07 (amended on 7/02/07) as stated in the prospectus. |
Schwab Equity Index Funds 13
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Schwab Total Stock Market Index Fund®
Larry Mano, managing director and portfolio manager, is responsible for the day-to-day management of the fund.
The Schwab Total Stock Market Index Fund Investor Shares were up 14.44%, trailing its benchmark, the Dow Jones Wilshire 5000 Composite Index, which returned 15.28%. The Dow Jones Wilshire 5000 Composite Index includes all publicly traded stocks of companies headquartered in the United States for which pricing information is readily available, currently more than 4,800 stocks. Unlike the fund, the index does not include operational and transaction costs. With the exception of Financials, all sectors experienced positive returns, which benefited the fund. Among the top performing industry groups were Energy, Materials, and Tech Hardware and Equipment. Better performing securities included Exxon Mobil Corp., Apple, Inc., and General Electric Co. On the downside, Banks, Retailing, and Real Estate appreciated the least during the report period. Stocks that detracted from performance included such names as Citigroup, Inc., Merrill Lynch & Co., Inc., and Countrywide Financial Corp.
As of 10/31/07:
Style Assessment1
Statistics
Number of Holdings | 2442 |
Weighted Average
Market Cap
($ x 1,000,000) | $88,836 |
Price/Earnings Ratio (P/E) | 19.0 |
Price/Book Ratio (P/B) | 2.9 |
Portfolio Turnover Rate2 | 0% |
Sector Weightings % of Investments
Financials | 19.0% |
Information Technology | 17.0% |
Industrials | 11.6% |
Consumer Discretionary | 11.2% |
Health Care | 11.0% |
Energy | 10.4% |
Consumer Staples | 8.5% |
Materials | 3.9% |
Utilities | 3.3% |
Telecommunication Services | 3.2% |
Others | 0.9% |
Total | 100.0% |
Top Holdings % of Net Assets3
Exxon Mobil Corp. | 2.9% |
General Electric Co. | 2.2% |
Microsoft Corp. | 1.9% |
AT&T, Inc. | 1.4% |
Google, Inc., Class A | 1.3% |
The Procter & Gamble Co. | 1.2% |
Bank of America Corp. | 1.2% |
Citigroup, Inc. | 1.1% |
Berkshire Hathaway, Inc.,
Class A | 1.1% |
Cisco Systems, Inc. | 1.1% |
Total | 15.4% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
“Dow Jones”, “Wilshire”, “The DJW 5000SM”, “The Dow Jones Wilshire 5000SM” and “The Dow Jones Wilshire 5000 Composite IndexSM” are service marks of Dow Jones & Company, Inc. and Wilshire Associates Incorp rated. The Schwab Total Stock Market Index Fund, based on The Dow Jones Wilshire 5000 Composite IndexSM, is not sponsored, endorsed, sold or promoted by Dow Jones or Wilshire; and, neither Dow Jones nor Wilshire makes any representation regarding the advisability of investing in such a product.
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | Less than 1% |
3 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Equity Index Funds
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Schwab Total Stock Market Index Fund®
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Pre-Tax Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | Since Inception | |||||||||
Investor Shares (6/1/99) | 14.44% | 14.72% | 4.56% | |||||||||
Select Shares (6/1/99) | 14.62% | 14.92% | 4.72% | |||||||||
Benchmark: Dow Jones Wilshire 5000 Composite IndexSM | 15.28% | 15.30% | 4.80% | |||||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 13.63% | 4.43% |
Fund Expense Ratios3: Investor Shares: 0.53% / Select Shares: 0.38%
Average Annual Total Returns After Tax1,2
Fund Class and Inception Date | 1 Year | 5 Years | Since Inception | |||||||||
Investor Shares (6/1/99) | ||||||||||||
Pre-Liquidation (still own shares) | 14.25% | 14.37% | 4.26% | |||||||||
Post-Liquidation (shares were sold) | 9.61% | 12.74% | 3.77% | |||||||||
Select Shares® (6/1/99) | ||||||||||||
Pre-Liquidation (still own shares) | 14.40% | 14.46% | 4.35% | |||||||||
Post-Liquidation (shares were sold) | 9.76% | 12.83% | 3.86% | |||||||||
Fund Category: Morningstar Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 12.36% | 12.78% | n/a | |||||||||
Post-Liquidation (shares were sold) | 9.17% | 11.46% | n/a |
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/07 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies. |
3 | As of 2/28/07 (amended on 7/02/07) as stated in the prospectus. |
Schwab Equity Index Funds 15
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Schwab International Index Fund®
Larry Mano, managing director and portfolio manager, is responsible for the day-to-day co-management of the fund.
The Schwab International Index Fund Investor Shares were up 26.26% for the period, closely tracking its benchmark, the Schwab International Index, which returned 26.44%. The Schwab International Index is comprised of stocks of 350 of the largest publicly traded companies stocks within 21 developed countries. The Index is market-capitalization weighted and therefore, its returns are most heavily influenced by the largest names in the Index. Unlike the fund, the index does not include operational and transaction costs. Within the fund, Hong Kong, Finland, and Australia were among the top contributors to total return. With the exception of Health Care, all sectors experienced positive returns, which benefited the fund. Industry group weights in Materials, Software and Services, and Capital Goods positively contributed to returns. From an individual stock perspective, positions in Vodafone Group plc, DaimlerChrysler AG, and Telefonica S.A. contributed to returns. Ireland and Japan were among the countries that appreciated the least during the report period. Industry groups that lagged their counterparts yet still were positive, included Pharmaceuticals and Biotechnology and Semiconductors and Semiconductor Equipment. Positions in Mitsubishi UFJ Financial Group, Inc., Novartis AG, and UBS AG detracted from performance.
As of 10/31/07:
Style Assessment1
Country Weightings % of Investments
United Kingdom | 23.1% |
Japan | 15.1% |
France | 10.5% |
Germany | 9.0% |
Canada | 7.3% |
Switzerland | 7.1% |
Australia | 5.2% |
Spain | 4.6% |
Italy | 3.7% |
Netherlands | 3.3% |
Others | 11.1% |
Total | 100.0% |
Statistics
Number of Holdings | 350 |
Weighted Average
Market Cap
($ x 1,000,000) | $80,067 |
Price/Earnings Ratio (P/E) | 15.2 |
Price/Book Ratio (P/B) | 2.5 |
Portfolio Turnover Rate | 5% |
Sector Weightings % of Investments
Financials | 32.4% |
Energy | 9.7% |
Materials | 9.3% |
Consumer Discretionary | 8.5% |
Consumer Staples | 7.9% |
Industrials | 7.8% |
Telecommunication Services | 6.6% |
Utilities | 6.0% |
Health Care | 5.7% |
Information Technology | 5.3% |
Others | 0.8% |
Total | 100.0% |
Top Holdings % of Net Assets2
BP plc | 1.9% |
HSBC Holdings plc | 1.8% |
Vodafone Holdings plc | 1.6% |
Total S.A. | 1.5% |
Nestle S.A.-Reg’d | 1.4% |
Telefonica S.A. | 1.3% |
Nokia Oyj | 1.2% |
Toyota Motor Corp. | 1.2% |
Royal Dutch Shell plc, Class A | 1.2% |
BHP Billiton Ltd. | 1.2% |
Total | 14.3% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk.
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | This list is not a recommendation of any security by the investment adviser. |
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Table of Contents
Schwab International Index Fund®
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Pre-Tax Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (9/9/93) | 26.26% | 22.41% | 8.61% | |||||||||
Select Shares (5/19/97) | 26.50% | 22.63% | 8.77% | |||||||||
Benchmark: Schwab International Index® | 26.44% | 23.00% | 9.20% | |||||||||
Fund Category: Morningstar Foreign Large-Cap Blend | 27.71% | 21.98% | 8.60% |
Fund Expense Ratios3: Investor Shares: Net 0.69%; Gross 0.70% / Select Shares: Net 0.50%; Gross 0.55%
Average Annual Total Returns After Tax1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | |||||||||
Investor Shares (9/9/93) | ||||||||||||
Pre-Liquidation (still own shares) | 25.57% | 21.69% | 8.06% | |||||||||
Post-Liquidation (shares were sold) | 17.45% | 19.48% | 7.25% | |||||||||
Select Shares® (5/19/97) | ||||||||||||
Pre-Liquidation (still own shares) | 25.77% | 21.86% | 8.16% | |||||||||
Post-Liquidation (shares were sold) | 17.62% | 19.65% | 7.36% | |||||||||
Fund Category: Morningstar Foreign Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 24.08% | 21.00% | 7.35% | |||||||||
Post-Liquidation (shares were sold) | 17.20% | 18.90% | 6.81% |
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/07 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. |
3 | As of 2/28/07 (amended on 7/02/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Equity Index Funds 17
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees; and, ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six-months beginning May 1, 2007 and held through October 31, 2007.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund or share class under the heading entitled ‘Expenses Paid During Period‘.
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/07 | at 10/31/07 | 5/1/07 - 10/31/07 | |||||||||||||
Schwab S&P 500 Index Fund | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 1,053.60 | $ | 1.81 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.44 | $ | 1.79 | |||||||||
Select Shares® | ||||||||||||||||
Actual Return | 0.19% | $ | 1,000 | $ | 1,054.70 | $ | 0.98 | |||||||||
Hypothetical 5% Return | 0.19% | $ | 1,000 | $ | 1,024.25 | $ | 0.97 | |||||||||
e.Shares® | ||||||||||||||||
Actual Return | 0.20% | $ | 1,000 | $ | 1,054.90 | $ | 1.04 | |||||||||
Hypothetical 5% Return | 0.20% | $ | 1,000 | $ | 1,024.20 | $ | 1.02 | |||||||||
Institutional Select® S&P 500 Fund | ||||||||||||||||
Actual Return | 0.10% | $ | 1,000 | $ | 1,054.50 | $ | 0.52 | |||||||||
Hypothetical 5% Return | 0.10% | $ | 1,000 | $ | 1,024.70 | $ | 0.51 | |||||||||
Schwab 1000 Index Fund® | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.48% | $ | 1,000 | $ | 1,055.80 | $ | 2.49 | |||||||||
Hypothetical 5% Return | 0.48% | $ | 1,000 | $ | 1,022.79 | $ | 2.45 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 0.33% | $ | 1,000 | $ | 1,056.70 | $ | 1.71 | |||||||||
Hypothetical 5% Return | 0.33% | $ | 1,000 | $ | 1,023.54 | $ | 1.68 | |||||||||
Schwab Small-Cap Index Fund® | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.57% | $ | 1,000 | $ | 1,020.60 | $ | 2.90 | |||||||||
Hypothetical 5% Return | 0.57% | $ | 1,000 | $ | 1,022.33 | $ | 2.91 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 0.42% | $ | 1,000 | $ | 1,021.40 | $ | 2.14 | |||||||||
Hypothetical 5% Return | 0.42% | $ | 1,000 | $ | 1,023.09 | $ | 2.14 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights. |
2 | Expenses for each fund or Share Class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year. |
18 Schwab Equity Index Funds
Table of Contents
Fund Expenses (Unaudited) continued
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/07 | at 10/31/07 | 5/1/07 - 10/31/07 | |||||||||||||
Schwab Total Stock Market Index Fund® | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.52% | $ | 1,000 | $ | 1,051.90 | $ | 2.69 | |||||||||
Hypothetical 5% Return | 0.52% | $ | 1,000 | $ | 1,022.58 | $ | 2.65 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 0.37% | $ | 1,000 | $ | 1,053.00 | $ | 1.91 | |||||||||
Hypothetical 5% Return | 0.37% | $ | 1,000 | $ | 1,023.34 | $ | 1.89 | |||||||||
Schwab International Index Fund® | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.69% | $ | 1,000 | $ | 1,114.40 | $ | 3.68 | |||||||||
Hypothetical 5% Return | 0.69% | $ | 1,000 | $ | 1,021.73 | $ | 3.52 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 1,115.60 | $ | 2.67 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights. |
2 | Expenses for each fund or Share Class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year. |
Schwab Equity Index Funds 19
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 21.47 | 18.79 | 17.61 | 16.36 | 13.79 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.38 | 0.34 | 0.34 | 0.23 | 0.20 | |||||||||||||||
Net realized and unrealized gains | 2.65 | 2.64 | 1.14 | 1.23 | 2.57 | |||||||||||||||
Total income from investment operations | 3.03 | 2.98 | 1.48 | 1.46 | 2.77 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.33 | ) | (0.30 | ) | (0.30 | ) | (0.21 | ) | (0.20 | ) | ||||||||||
Net asset value at end of period | 24.17 | 21.47 | 18.79 | 17.61 | 16.36 | |||||||||||||||
Total return (%) | 14.29 | 16.03 | 8.44 | 9.03 | 20.39 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.35 | 0.36 | 0.37 | 0.37 | 0.36 | |||||||||||||||
Gross operating expenses | 0.35 | 0.36 | 0.40 | 0.45 | 0.46 | |||||||||||||||
Net investment income | 1.60 | 1.57 | 1.74 | 1.35 | 1.45 | |||||||||||||||
Portfolio turnover rate | 2 | 3 | 4 | 3 | 3 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 3,948 | 3,685 | 3,666 | 3,849 | 3,510 |
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 21.56 | 18.88 | 17.68 | 16.41 | 13.83 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.41 | 0.37 | 0.36 | 0.26 | 0.24 | |||||||||||||||
Net realized and unrealized gains | 2.68 | 2.65 | 1.16 | 1.24 | 2.57 | |||||||||||||||
Total income from investment operations | 3.09 | 3.02 | 1.52 | 1.50 | 2.81 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.37 | ) | (0.34 | ) | (0.32 | ) | (0.23 | ) | (0.23 | ) | ||||||||||
Net asset value at end of period | 24.28 | 21.56 | 18.88 | 17.68 | 16.41 | |||||||||||||||
Total return (%) | 14.50 | 16.18 | 8.66 | 9.25 | 20.62 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.19 | 0.19 | 0.19 | 0.19 | 0.19 | |||||||||||||||
Gross operating expenses | 0.20 | 0.21 | 0.25 | 0.30 | 0.31 | |||||||||||||||
Net investment income | 1.78 | 1.74 | 1.92 | 1.53 | 1.63 | |||||||||||||||
Portfolio turnover rate | 2 | 3 | 4 | 3 | 3 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 4,345 | 4,038 | 3,938 | 4,119 | 3,692 |
20 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Financial Highlights continued
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
e.Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 21.50 | 18.81 | 17.62 | 16.37 | 13.79 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.40 | 0.35 | 0.39 | 0.26 | 0.23 | |||||||||||||||
Net realized and unrealized gains | 2.67 | 2.67 | 1.11 | 1.21 | 2.56 | |||||||||||||||
Total income from investment operations | 3.07 | 3.02 | 1.50 | 1.47 | 2.79 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.37 | ) | (0.33 | ) | (0.31 | ) | (0.22 | ) | (0.21 | ) | ||||||||||
Net asset value at end of period | 24.20 | 21.50 | 18.81 | 17.62 | 16.37 | |||||||||||||||
Total return (%) | 14.44 | 16.25 | 8.58 | 9.10 | 20.55 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.20 | 0.21 | 0.24 | 0.28 | 0.28 | |||||||||||||||
Gross operating expenses | 0.20 | 0.21 | 0.25 | 0.30 | 0.31 | |||||||||||||||
Net investment income | 1.76 | 1.72 | 1.88 | 1.44 | 1.54 | |||||||||||||||
Portfolio turnover rate | 2 | 3 | 4 | 3 | 3 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 274 | 241 | 220 | 249 | 246 |
See financial notes 21
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2007
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date. 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99 | .8% | Common Stock | 5,286,878 | 8,551,595 | ||||||||
0 | .1% | Short-Term Investments | 5,314 | 5,314 | ||||||||
99 | .9% | Total Investments | 5,292,192 | 8,556,909 | ||||||||
1 | .5% | Collateral Invested for Securities on Loan | 133,348 | 133,348 | ||||||||
(1 | .4)% | Other Assets and Liabilities, Net | (123,243 | ) | ||||||||
100 | .0% | Net Assets | 8,567,014 |
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Common Stock 99.8% of net assets | ||||||||||
Automobiles & Components 0.6% | ||||||||||
Other Securities | 0.6 | 52,842 | ||||||||
Banks 4.3% | ||||||||||
Wachovia Corp. | 1,194,270 | 0.6 | 54,614 | |||||||
Wells Fargo & Co. | 2,123,976 | 0.8 | 72,236 | |||||||
Other Securities | 2.9 | 238,106 | ||||||||
4.3 | 364,956 | |||||||||
Capital Goods 9.2% | ||||||||||
3M Co. | 459,061 | 0.5 | 39,645 | |||||||
General Electric Co. | 6,434,867 | 3.1 | 264,859 | |||||||
The Boeing Co. | 510,490 | 0.6 | 50,329 | |||||||
United Technologies Corp. | 647,334 | 0.6 | 49,579 | |||||||
Other Securities | 4.4 | 386,411 | ||||||||
9.2 | 790,823 | |||||||||
Commercial Services & Supplies 0.5% | ||||||||||
Other Securities | 0.5 | 40,515 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||||
Other Securities | 1.0 | 88,549 | ||||||||
Consumer Services 1.6% | ||||||||||
McDonald’s Corp. | 752,901 | 0.5 | 44,948 | |||||||
Other Securities | 1.1 | 94,229 | ||||||||
1.6 | 139,177 | |||||||||
Diversified Financials 9.3% | ||||||||||
American Express Co. | 782,434 | 0.6 | 47,689 | |||||||
Bank of America Corp. | 2,818,232 | 1.6 | 136,064 | |||||||
Citigroup, Inc. | 3,067,843 | 1.5 | 128,543 | |||||||
JPMorgan Chase & Co. | 2,196,216 | 1.2 | 103,222 | |||||||
Merrill Lynch & Co., Inc. | 554,790 | 0.4 | 36,627 | |||||||
Morgan Stanley | 682,848 | 0.5 | 45,928 | |||||||
The Charles Schwab Corp. (c) | 642,696 | 0.2 | 14,936 | |||||||
The Goldman Sachs Group, Inc. | 256,167 | 0.7 | 63,509 | |||||||
Other Securities | 2.6 | 215,711 | ||||||||
9.3 | 792,229 | |||||||||
Energy 11.5% | ||||||||||
Chevron Corp. | 1,379,919 | 1.5 | 126,276 | |||||||
ConocoPhillips | 1,029,904 | 1.0 | 87,501 | |||||||
Exxon Mobil Corp. | 3,560,831 | 3.8 | 327,561 | |||||||
Occidental Petroleum Corp. | 548,444 | 0.4 | 37,870 | |||||||
Schlumberger Ltd. | 737,559 | 0.8 | 71,226 | |||||||
Other Securities | 4.0 | 338,524 | ||||||||
11.5 | 988,958 | |||||||||
Food & Staples Retailing 2.3% | ||||||||||
CVS Caremark Corp. | 965,200 | 0.5 | 40,316 | |||||||
Wal-Mart Stores, Inc. | 1,524,393 | 0.8 | 68,918 | |||||||
Other Securities | 1.0 | 87,150 | ||||||||
2.3 | 196,384 | |||||||||
Food, Beverage & Tobacco 5.0% | ||||||||||
Altria Group, Inc. | 1,313,189 | 1.1 | 95,771 | |||||||
PepsiCo, Inc. | 1,044,258 | 0.9 | 76,983 | |||||||
The Coca-Cola Co. | 1,312,447 | 0.9 | 81,057 | |||||||
Other Securities | 2.1 | 173,198 | ||||||||
5.0 | 427,009 | |||||||||
Health Care Equipment & Services 4.0% | ||||||||||
UnitedHealth Group, Inc. | 868,708 | 0.5 | 42,697 | |||||||
Other Securities | 3.5 | 300,520 | ||||||||
4.0 | 343,217 | |||||||||
Household & Personal Products 2.4% | ||||||||||
The Procter & Gamble Co. | 1,974,570 | 1.6 | 137,272 |
22 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Other Securities | 0.8 | 66,645 | ||||||||
2.4 | 203,917 | |||||||||
Insurance 4.5% | ||||||||||
American International Group, Inc. | 1,633,332 | 1.2 | 103,096 | |||||||
Other Securities | 3.3 | 279,067 | ||||||||
4.5 | 382,163 | |||||||||
Materials 3.3% | ||||||||||
Other Securities | 4,858,617 | 3.3 | 283,586 | |||||||
Media 2.9% | ||||||||||
Comcast Corp., Class A * | 1,949,048 | 0.5 | 41,027 | |||||||
The Walt Disney Co. | 1,305,276 | 0.5 | 45,202 | |||||||
Time Warner, Inc. | 2,390,129 | 0.5 | 43,644 | |||||||
Other Securities | 1.4 | 121,933 | ||||||||
2.9 | 251,806 | |||||||||
Pharmaceuticals & Biotechnology 7.8% | ||||||||||
Abbott Laboratories | 977,375 | 0.6 | 53,384 | |||||||
Amgen, Inc. * | 726,218 | 0.5 | 42,201 | |||||||
Bristol-Myers Squibb Co. | 1,259,128 | 0.4 | 37,761 | |||||||
Johnson & Johnson | 1,818,995 | 1.4 | 118,544 | |||||||
Merck & Co., Inc. | 1,401,827 | 1.0 | 81,671 | |||||||
Pfizer, Inc. | 4,477,857 | 1.3 | 110,200 | |||||||
Wyeth | 861,882 | 0.5 | 41,913 | |||||||
Other Securities | 2.1 | 186,370 | ||||||||
7.8 | 672,044 | |||||||||
Real Estate 0.9% | ||||||||||
Other Securities | 0.9 | 78,499 | ||||||||
Retailing 3.1% | ||||||||||
Other Securities | 3.1 | 261,076 | ||||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||||
Intel Corp. | 3,654,566 | 1.1 | 98,308 | |||||||
Other Securities | 1.5 | 122,770 | ||||||||
2.6 | 221,078 | |||||||||
Software & Services 6.2% | ||||||||||
Google, Inc., Class A * | 140,170 | 1.1 | 99,100 | |||||||
Microsoft Corp. | 5,296,763 | 2.3 | 194,974 | |||||||
Oracle Corp. * | 2,550,731 | 0.7 | 56,550 | |||||||
Other Securities | 2.1 | 178,712 | ||||||||
6.2 | 529,336 | |||||||||
Technology Hardware & Equipment 8.0% | ||||||||||
Apple, Inc. * | 539,125 | 1.2 | 102,407 | |||||||
Cisco Systems, Inc. * | 3,862,898 | 1.5 | 127,707 | |||||||
Dell, Inc. * | 1,388,594 | 0.5 | 42,491 | |||||||
Hewlett-Packard Co. | 1,711,058 | 1.1 | 88,428 | |||||||
International Business Machines Corp. | 913,147 | 1.3 | 106,035 | |||||||
QUALCOMM, Inc. | 1,048,358 | 0.5 | 44,796 | |||||||
Other Securities | 1.9 | 176,670 | ||||||||
8.0 | 688,534 | |||||||||
Telecommunication Services 3.7% | ||||||||||
AT&T, Inc. | 3,917,312 | 1.9 | 163,704 | |||||||
Verizon Communications, Inc. | 1,868,151 | 1.0 | 86,066 | |||||||
Other Securities | 0.8 | 69,011 | ||||||||
3.7 | 318,781 | |||||||||
Transportation 1.8% | ||||||||||
United Parcel Service, Inc., Class B | 662,790 | 0.6 | 49,775 | |||||||
Other Securities | 1.2 | 99,789 | ||||||||
1.8 | 149,564 | |||||||||
Utilities 3.3% | ||||||||||
Other Securities | 3.3 | 286,552 | ||||||||
Total Common Stock (Cost $5,286,878) | 8,551,595 | |||||||||
Security | Face Amount | % of Net | Value | |||||||
Rate, Maturity Date | ($ x 1,000) | Assets | ($ x 1,000) | |||||||
Short-Term Investments 0.1% of net assets | ||||||||||
Commercial Paper & Other Obligations 0.1% | ||||||||||
Other Securities | 0.1 | 4,533 | ||||||||
U.S. Treasury Obligation 0.0% | ||||||||||
Other Securities | 0.0 | 781 | ||||||||
Total Short-Term Investments (Cost $5,314) | 5,314 | |||||||||
End of Investments. | ||||||||||
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Collateral Invested for Securities on Loan 1.5% of net assets | ||||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 133,347,976 | 1.5 | 133,348 | |||||||
End of collateral invested for securities on loan. |
See financial notes 23
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
At 10/31/07 the tax basis cost of the fund’s investments was $5,337,903 and the unrealized appreciation and depreciation were $3,608,096 and ($389,090), respectively, with a net unrealized appreciation of $3,219,006. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Please see the complete schedule of holdings. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings. | |
(c) | Issuer is affiliated with the fund’s adviser. |
In addition to the above, the fund held the following at 10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 80 | 6,220 | 62 |
24 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $131,781 (cost $5,292,192) | $8,556,909 | |||||
Collateral invested for securities on loan | 133,348 | |||||
Receivables: | ||||||
Investments sold | 9,579 | |||||
Dividends | 7,790 | |||||
Fund shares sold | 3,894 | |||||
Due from brokers for futures | 76 | |||||
Income from securities on loan | 47 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 35 | ||||
Total assets | 8,711,679 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | 133,348 | |||||
Payables: | ||||||
Investments bought | 947 | |||||
Investment adviser and administrator fees | 61 | |||||
Transfer agent and shareholder services fees | 118 | |||||
Fund shares redeemed | 10,024 | |||||
Accrued expenses | + | 167 | ||||
Total liabilities | 144,665 | |||||
Net Assets | ||||||
Total assets | 8,711,679 | |||||
Total liabilities | − | 144,665 | ||||
Net assets | $8,567,014 | |||||
Net Assets by Source | ||||||
Capital received from investors | 6,031,301 | |||||
Net investment income not yet distributed | 111,174 | |||||
Net realized capital losses | (840,240 | ) | ||||
Net unrealized capital gains | 3,264,779 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $3,947,821 | 163,333 | $24.17 | ||||||||
Select Shares | $4,344,762 | 178,976 | $24.28 | ||||||||
e.Shares | $274,431 | 11,341 | $24.20 |
See financial notes 25
Table of Contents
Schwab S&P 500 Index Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (including $774 from affiliated issuer) | $162,075 | |||||
Interest | 999 | |||||
Securities on loan | + | 237 | ||||
Total Investment Income | 163,311 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 68,584 | |||||
Net realized gains on futures contracts | + | 2,396 | ||||
Net realized gains | 70,980 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 902,443 | |||||
Net unrealized losses on futures contracts | + | (327 | ) | |||
Net unrealized gains | 902,116 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 7,448 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 9,662 | |||||
Select Shares | 4,190 | |||||
e.Shares | 255 | |||||
Shareholder reports | 242 | |||||
Portfolio accounting fees | 211 | |||||
Custodian fees | 150 | |||||
Professional fees | 68 | |||||
Trustees’ fees | 47 | |||||
Registration fees | 38 | |||||
Overdraft expense | 25 | |||||
Other expenses | + | 161 | ||||
Total expenses | 22,497 | |||||
Expense reduction by adviser and Schwab | − | 447 | ||||
Net expenses | 22,050 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 163,311 | |||||
Net expenses | − | 22,050 | ||||
Net investment income | 141,261 | |||||
Net realized gains | 70,980 | |||||
Net unrealized gains | + | 902,116 | ||||
Increase in net assets from operations | $1,114,357 |
26 See financial notes
Table of Contents
Schwab S&P 500 Index Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | ||||||||
Net investment income | $141,261 | $130,176 | |||||||
Net realized gains or losses | 70,980 | (93,757 | ) | ||||||
Net unrealized gains | + | 902,116 | 1,136,153 | ||||||
Increase in net assets from operations | 1,114,357 | 1,172,572 | |||||||
Distributions to Shareholders | |||||||||
Distributions from net investment income | |||||||||
Investor Shares | 57,248 | 57,584 | |||||||
Select Shares | 68,517 | 67,949 | |||||||
e.Shares | + | 4,038 | 3,805 | ||||||
Total distributions from net investment income | $129,803 | $129,338 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 20,611 | $464,893 | 17,732 | $353,074 | ||||||||||||||
Select Shares | 25,425 | 576,994 | 30,407 | 606,896 | ||||||||||||||
e.Shares | + | 2,827 | 63,881 | 2,578 | 51,641 | |||||||||||||
Total shares sold | 48,863 | $1,105,768 | 50,717 | $1,011,611 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 2,499 | $54,840 | 2,823 | $55,000 | ||||||||||||||
Select Shares | 2,752 | 60,597 | 3,056 | 59,681 | ||||||||||||||
e.Shares | + | 169 | 3,715 | 177 | 3,443 | |||||||||||||
Total shares reinvested | 5,420 | $119,152 | 6,056 | $118,124 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (31,408 | ) | ($714,160 | ) | (44,003 | ) | ($874,140 | ) | ||||||||||
Select Shares | (36,485 | ) | (827,901 | ) | (54,785 | ) | (1,094,191 | ) | ||||||||||
e.Shares | + | (2,880 | ) | (65,195 | ) | (3,222 | ) | (63,959 | ) | |||||||||
Total shares redeemed | (70,773 | ) | ($1,607,256 | ) | (102,010 | ) | ($2,032,290 | ) | ||||||||||
Net transactions in fund shares | (16,490 | ) | ($382,336 | ) | (45,237 | ) | ($902,555 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 370,140 | $7,964,796 | 415,377 | $7,824,117 | ||||||||||||||
Total increase or decrease | + | (16,490 | ) | 602,218 | (45,237 | ) | 140,679 | |||||||||||
End of period | 353,650 | $8,567,014 | 370,140 | $7,964,796 | ||||||||||||||
Net investment income not yet distributed | $111,174 | $100,766 |
See financial notes 27
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | ||||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 10.99 | 9.57 | 8.95 | 8.30 | 7.00 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.21 | 0.16 | 0.15 | 0.13 | 0.12 | |||||||||||||||
Net realized and unrealized gains | 1.36 | 1.39 | 0.62 | 0.64 | 1.30 | |||||||||||||||
Total income from investment operations | 1.57 | 1.55 | 0.77 | 0.77 | 1.42 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.17 | ) | (0.13 | ) | (0.15 | ) | (0.12 | ) | (0.12 | ) | ||||||||||
Net asset value at end of period | 12.39 | 10.99 | 9.57 | 8.95 | 8.30 | |||||||||||||||
Total return (%) | 14.43 | 16.39 | 8.64 | 9.36 | 20.65 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.10 | 0.10 | 0.10 | 0.15 | 0.15 | |||||||||||||||
Gross operating expenses | 0.22 | 0.28 | 0.33 | 0.35 | 0.36 | |||||||||||||||
Net investment income | 1.89 | 1.84 | 1.82 | 1.56 | 1.65 | |||||||||||||||
Portfolio turnover rate | 1 | 2 | 3 | 3 | 4 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 3,103 | 2,080 | 1,246 | 348 | 272 |
28 See financial notes
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings as of October 31, 2007
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date. 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
98 | .9% | Common Stock | 2,529,004 | 3,068,754 | ||||||||
1 | .1% | Short-Term Investments | 33,524 | 33,524 | ||||||||
—% | Warrants | — | — | |||||||||
100 | .0% | Total Investments | 2,562,528 | 3,102,278 | ||||||||
5 | .0% | Collateral Invested for Securities on Loan | 155,381 | 155,381 | ||||||||
(5 | .0)% | Other Assets and Liabilities, Net | (154,721 | ) | ||||||||
100 | .0% | Net Assets | 3,102,938 |
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Common Stock 98.9% of net assets | ||||||||||
Automobiles & Components 0.6% | ||||||||||
Other Securities | 0.6 | 18,732 | ||||||||
Banks 4.2% | ||||||||||
Wachovia Corp. | 424,517 | 0.6 | 19,413 | |||||||
Wells Fargo & Co. | 751,313 | 0.8 | 25,552 | |||||||
Other Securities | 2.8 | 86,649 | ||||||||
4.2 | 131,614 | |||||||||
Capital Goods 9.1% | ||||||||||
3M Co. | 162,378 | 0.5 | 14,023 | |||||||
General Electric Co. | 2,291,625 | 3.0 | 94,323 | |||||||
The Boeing Co. | 178,331 | 0.6 | 17,582 | |||||||
United Technologies Corp. | 226,436 | 0.6 | 17,343 | |||||||
Other Securities | 4.4 | 137,803 | ||||||||
9.1 | 281,074 | |||||||||
Commercial Services & Supplies 0.5% | ||||||||||
Other Securities | 0.5 | 14,758 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||||
Other Securities | 1.0 | 31,920 | ||||||||
Consumer Services 1.6% | ||||||||||
McDonald’s Corp. | 274,297 | 0.5 | 16,376 | |||||||
Other Securities | 1.1 | 34,096 | ||||||||
1.6 | 50,472 | |||||||||
Diversified Financials 9.1% | ||||||||||
American Express Co. | 267,927 | 0.5 | 16,330 | |||||||
Bank of America Corp. | 1,000,720 | 1.6 | 48,315 | |||||||
Citigroup, Inc. | 1,094,623 | 1.5 | 45,865 | |||||||
JPMorgan Chase & Co. | 775,973 | 1.2 | 36,471 | |||||||
Morgan Stanley (a) | 236,866 | 0.5 | 15,932 | |||||||
The Charles Schwab Corp. (c) | 226,645 | 0.2 | 5,267 | |||||||
The Goldman Sachs Group, Inc. | 94,406 | 0.7 | 23,405 | |||||||
Other Securities | 2.9 | 91,726 | ||||||||
9.1 | 283,311 | |||||||||
Energy 11.6% | ||||||||||
Chevron Corp. | 484,603 | 1.4 | 44,346 | |||||||
ConocoPhillips | 364,720 | 1.0 | 30,987 | |||||||
Exxon Mobil Corp. | 1,293,711 | 3.8 | 119,008 | |||||||
Occidental Petroleum Corp. | 191,126 | 0.4 | 13,197 | |||||||
Schlumberger Ltd. | 262,380 | 0.8 | 25,338 | |||||||
Other Securities | 4.2 | 126,218 | ||||||||
11.6 | 359,094 | |||||||||
Food & Staples Retailing 2.3% | ||||||||||
CVS Caremark Corp. | 341,788 | 0.5 | 14,277 | |||||||
Wal-Mart Stores, Inc. | 546,919 | 0.8 | 24,726 | |||||||
Other Securities | 1.0 | 31,199 | ||||||||
2.3 | 70,202 | |||||||||
Food, Beverage & Tobacco 4.8% | ||||||||||
Altria Group, Inc. | 466,802 | 1.1 | 34,044 | |||||||
PepsiCo, Inc. | 365,266 | 0.9 | 26,927 | |||||||
The Coca-Cola Co. | 453,246 | 0.9 | 27,992 | |||||||
Other Securities | 1.9 | 61,082 | ||||||||
4.8 | 150,045 | |||||||||
Health Care Equipment & Services 3.9% | ||||||||||
UnitedHealth Group, Inc. | 299,817 | 0.5 | 14,736 | |||||||
Other Securities | 3.4 | 106,783 | ||||||||
3.9 | 121,519 | |||||||||
Household & Personal Products 2.3% | ||||||||||
The Procter & Gamble Co. | 705,041 | 1.6 | 49,014 |
See financial notes 29
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Other Securities | 0.7 | 23,654 | ||||||||
2.3 | 72,668 | |||||||||
Insurance 4.3% | ||||||||||
American International Group, Inc. | 578,755 | 1.2 | 36,531 | |||||||
Other Securities | 3.1 | 98,161 | ||||||||
4.3 | 134,692 | |||||||||
Materials 3.3% | ||||||||||
Other Securities | 3.3 | 100,788 | ||||||||
Media 3.0% | ||||||||||
Comcast Corp., Class A * | 694,652 | 0.5 | 14,622 | |||||||
The Walt Disney Co. | 464,954 | 0.5 | 16,101 | |||||||
Time Warner, Inc. | 883,514 | 0.5 | 16,133 | |||||||
Other Securities | 1.5 | 45,859 | ||||||||
3.0 | 92,715 | |||||||||
Pharmaceuticals & Biotechnology 7.7% | ||||||||||
Abbott Laboratories | 341,941 | 0.6 | 18,677 | |||||||
Amgen, Inc. * | 256,991 | 0.5 | 14,934 | |||||||
Bristol-Myers Squibb Co. | 438,711 | 0.4 | 13,157 | |||||||
Johnson & Johnson | 645,417 | 1.4 | 42,062 | |||||||
Merck & Co., Inc. | 488,086 | 0.9 | 28,436 | |||||||
Pfizer, Inc. | 1,608,986 | 1.3 | 39,597 | |||||||
Wyeth | 299,782 | 0.5 | 14,578 | |||||||
Other Securities | 2.1 | 68,327 | ||||||||
7.7 | 239,768 | |||||||||
Real Estate 1.0% | ||||||||||
Other Securities | 1.0 | 31,356 | ||||||||
Retailing 3.1% | ||||||||||
Other Securities | 3.1 | 95,109 | ||||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||||
Intel Corp. | 1,284,789 | 1.1 | 34,561 | |||||||
Other Securities | 1.5 | 46,448 | ||||||||
2.6 | 81,009 | |||||||||
Software & Services 6.2% | ||||||||||
Google, Inc., Class A * | 51,638 | 1.2 | 36,508 | |||||||
Microsoft Corp. | 1,920,893 | 2.3 | 70,708 | |||||||
Oracle Corp. * | 889,926 | 0.6 | 19,730 | |||||||
Other Securities | 2.1 | 63,871 | ||||||||
6.2 | 190,817 | |||||||||
Technology Hardware & Equipment 8.0% | ||||||||||
Apple, Inc. * | 189,805 | 1.2 | 36,054 | |||||||
Cisco Systems, Inc. * | 1,355,130 | 1.5 | 44,801 | |||||||
Dell, Inc. * | 505,796 | 0.5 | 15,477 | |||||||
Hewlett-Packard Co. | 612,315 | 1.0 | 31,644 | |||||||
International Business Machines Corp. | 335,073 | 1.3 | 38,909 | |||||||
QUALCOMM, Inc. | 368,227 | 0.5 | 15,734 | |||||||
Other Securities | 2.0 | 64,265 | ||||||||
8.0 | 246,884 | |||||||||
Telecommunication Services 3.6% | ||||||||||
AT&T, Inc. | 1,392,065 | 1.9 | 58,174 | |||||||
Verizon Communications, Inc. | 649,770 | 1.0 | 29,935 | |||||||
Other Securities | 0.7 | 24,978 | ||||||||
3.6 | 113,087 | |||||||||
Transportation 1.8% | ||||||||||
United Parcel Service, Inc., Class B | 238,638 | 0.6 | 17,922 | |||||||
Other Securities | 1.2 | 37,690 | ||||||||
1.8 | 55,612 | |||||||||
Utilities 3.3% | ||||||||||
Other Securities | 3.3 | 101,508 | ||||||||
Total Common Stock (Cost $2,529,004) | 3,068,754 | |||||||||
Security | Face Amount | % of Net | Value | |||||||
Rate, Maturity Date | ($ x 1,000) | Assets | ($ x 1,000) | |||||||
Short-Term Investments 1.1% of net assets | ||||||||||
Commercial Paper & Other Obligations 1.0% | ||||||||||
Wells Fargo, Grand Cayman Time Deposit 4.75%, 11/01/07 | 30,415 | 1.0 | 30,415 | |||||||
U.S. Treasury Obligations 0.1% | ||||||||||
Other Securities | 0.1 | 3,109 | ||||||||
Total Short-Term Investments (Cost $33,524) | 33,524 | |||||||||
30 See financial notes
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Warrants 0.0% of net assets | ||||||||||
Other Securities | 11,390 | 0.0 | — | |||||||
Total Warrants (Cost $—) | — | |||||||||
End of Investments. | ||||||||||
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Collateral Invested for Securities on Loan 5.0% of net assets | ||||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 155,380,890 | 5.0 | 155,381 | |||||||
End of collateral invested for securities on loan. | ||||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $2,574,259, and the unrealized appreciation and depreciation were $605,643 and ($77,624), respectively, with a net unrealized appreciation of $528,019. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings. | |
(c) | Issuer is affiliated with the fund’s adviser. | |
In addition to the above, the fund held the following at 10/31/2007. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 360 | 27,988 | 364 |
See financial notes 31
Table of Contents
Schwab Institutional Select S&P 500 Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $153,409 (cost $2,562,528) | $3,102,278 | |||||
Collateral invested for securities on loan | 155,381 | |||||
Receivables: | ||||||
Investments sold | 214 | |||||
Fund shares sold | 5,875 | |||||
Dividends | 2,728 | |||||
Due from brokers for futures | 366 | |||||
Income from securities on loan | 63 | |||||
Interest | 4 | |||||
Prepaid expenses | + | 12 | ||||
Total assets | 3,266,921 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | 155,381 | |||||
Payables: | ||||||
Investments bought | 333 | |||||
Transfer agent and shareholder services fees | 39 | |||||
Fund shares redeemed | 8,165 | |||||
Accrued expenses | + | 65 | ||||
Total liabilities | 163,983 | |||||
Net Assets | ||||||
Total assets | 3,266,921 | |||||
Total liabilities | − | 163,983 | ||||
Net assets | $3,102,938 | |||||
Net Assets by Source | ||||||
Capital received from investors | 2,571,637 | |||||
Net investment income not yet distributed | 41,397 | |||||
Net realized capital losses | (50,211 | ) | ||||
Net unrealized capital gains | 540,115 |
Net Asset Value (NAV)
Shares | |||||||||
Net Assets | ¸ | Outstanding | = | NAV | |||||
$3,102,938 | 250,460 | $12.39 |
32 See financial notes
Table of Contents
Schwab Institutional Select S&P 500 Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (including $252 from affiliated issuer and net of $3 foreign withholding tax) | $50,043 | |||||
Interest | 2,472 | |||||
Securities on loan | + | 233 | ||||
Total Investment Income | 52,748 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 12,228 | |||||
Net realized losses on futures contracts | + | (1,045 | ) | |||
Net realized gains | 11,183 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 294,855 | |||||
Net unrealized gains on futures contracts | + | 58 | ||||
Net unrealized gains | 294,913 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,898 | |||||
Transfer agent and shareholder service fees | 2,645 | |||||
Portfolio accounting fees | 101 | |||||
Custodian fees | 87 | |||||
Registration fees | 58 | |||||
Professional fees | 36 | |||||
Shareholder reports | 31 | |||||
Trustees’ fees | 19 | |||||
Overdraft expense | 3 | |||||
Other expenses | + | 32 | ||||
Total expenses | 5,910 | |||||
Expense reduction by adviser and Schwab | − | 3,262 | ||||
Net expenses | 2,648 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 52,748 | |||||
Net expenses | − | 2,648 | ||||
Net investment income | 50,100 | |||||
Net realized gains | 11,183 | |||||
Net unrealized gains | + | 294,913 | ||||
Increase in net assets from operations | $356,196 |
See financial notes 33
Table of Contents
Schwab Institutional Select S&P 500 Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | ||||||||
Net investment income | $50,100 | $29,583 | |||||||
Net realized gains or losses | 11,183 | (9,637 | ) | ||||||
Net unrealized gains | + | 294,913 | 227,054 | ||||||
Increase in net assets from operations | 356,196 | 247,000 | |||||||
Distributions to Shareholders | |||||||||
Distributions from net investment income | $32,922 | $18,248 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | 89,179 | $1,028,140 | 85,032 | $868,441 | ||||||||||||||
Shares Reinvested | 2,614 | 29,386 | 1,660 | 16,500 | ||||||||||||||
Shares Redeemed | + | (30,703 | ) | (358,242 | ) | (27,532 | ) | (279,438 | ) | |||||||||
Net transactions in fund shares | 61,090 | $699,284 | 59,160 | $605,503 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 189,370 | $2,080,380 | 130,210 | $1,246,125 | ||||||||||||||
Total increase | + | 61,090 | 1,022,558 | 59,160 | 834,255 | |||||||||||||
End of period | 250,460 | $3,102,938 | 189,370 | $2,080,380 | ||||||||||||||
Net investment income not yet distributed | $41,397 | $24,468 |
34 See financial notes
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 40.40 | 35.31 | 32.54 | 30.25 | 25.25 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.60 | 1 | 0.50 | 1 | 0.55 | 0.37 | 0.33 | |||||||||||||
Net realized and unrealized gains | 5.33 | 1 | 5.05 | 1 | 2.70 | 2.26 | 4.99 | |||||||||||||
Total income from investment operations | 5.93 | 5.55 | 3.25 | 2.63 | 5.32 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.52 | ) | (0.46 | ) | (0.48 | ) | (0.34 | ) | (0.32 | ) | ||||||||||
Net asset value at end of period | 45.81 | 40.40 | 35.31 | 32.54 | 30.25 | |||||||||||||||
Total return (%) | 14.81 | 15.84 | 10.04 | 8.78 | 21.34 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.48 | 0.49 | 0.50 | 0.50 | 0.49 | |||||||||||||||
Gross operating expenses | 0.48 | 0.49 | 0.50 | 0.50 | 0.51 | |||||||||||||||
Net investment income | 1.39 | 1.34 | 1.49 | 1.15 | 1.27 | |||||||||||||||
Portfolio turnover rate | 6 | 5 | 6 | 5 | 5 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 3,974 | 3,918 | 4,166 | 4,258 | 3,974 |
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/2/02- | ||||||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 40.43 | 35.34 | 32.56 | 30.27 | 25.26 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.66 | 1 | 0.56 | 1 | 0.56 | 0.42 | 0.37 | |||||||||||||
Net realized and unrealized gains | 5.34 | 1 | 5.04 | 1 | 2.74 | 2.25 | 4.99 | |||||||||||||
Total income from investment operations | 6.00 | 5.60 | 3.30 | 2.67 | 5.36 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.59 | ) | (0.51 | ) | (0.52 | ) | (0.38 | ) | (0.35 | ) | ||||||||||
Net asset value at end of period | 45.84 | 40.43 | 35.34 | 32.56 | 30.27 | |||||||||||||||
Total return (%) | 14.98 | 16.01 | 10.21 | 8.90 | 21.52 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.33 | 0.34 | 0.35 | 0.35 | 0.35 | |||||||||||||||
Gross operating expenses | 0.33 | 0.34 | 0.35 | 0.35 | 0.36 | |||||||||||||||
Net investment income | 1.54 | 1.48 | 1.63 | 1.30 | 1.41 | |||||||||||||||
Portfolio turnover rate | 6 | 5 | 6 | 5 | 5 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 3,311 | 2,924 | 2,328 | 2,138 | 1,996 |
1 Calculated based on the average shares outstanding during the period.
See financial notes 35
Table of Contents
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2007
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date. 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99 | .5% | Common Stock | 3,056,568 | 7,247,273 | ||||||||
0 | .2% | Foreign Common Stock | 7,751 | 15,553 | ||||||||
0 | .2% | Short-Term Investments | 17,029 | 17,029 | ||||||||
99 | .9% | Total Investments | 3,081,348 | 7,279,855 | ||||||||
5 | .6% | Collateral Invested for Securities on Loan | 409,235 | 409,235 | ||||||||
(5 | .5)% | Other Assets and Liabilities, Net | (403,896 | ) | ||||||||
100 | .0% | Net Assets | 7,285,194 |
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Common Stock 99.5% of net assets | ||||||||||
Automobiles & Components 0.6% | ||||||||||
Other Securities | 0.6 | 44,748 | ||||||||
Banks 4.0% | ||||||||||
Wachovia Corp. | 893,130 | 0.6 | 40,843 | |||||||
Wells Fargo & Co. | 1,566,896 | 0.7 | 53,290 | |||||||
Other Securities | 2.7 | 199,403 | ||||||||
4.0 | 293,536 | |||||||||
Capital Goods 9.0% | ||||||||||
3M Co. | 340,334 | 0.4 | 29,391 | |||||||
General Electric Co. | 4,761,122 | 2.7 | 195,968 | |||||||
The Boeing Co. | 366,089 | 0.5 | 36,093 | |||||||
United Technologies Corp. | 461,863 | 0.5 | 35,374 | |||||||
Other Securities | 4.9 | 359,064 | ||||||||
9.0 | 655,890 | |||||||||
Commercial Services & Supplies 0.7% | ||||||||||
Other Securities | 0.7 | 49,380 | ||||||||
Consumer Durables & Apparel 1.1% | ||||||||||
Other Securities | 1.1 | 79,351 | ||||||||
Consumer Services 1.9% | ||||||||||
McDonald’s Corp. | 553,736 | 0.5 | 33,058 | |||||||
Other Securities | 1.4 | 103,046 | ||||||||
1.9 | 136,104 | |||||||||
Diversified Financials 8.4% | ||||||||||
American Express Co. | 553,077 | 0.5 | 33,710 | |||||||
Bank of America Corp. | 2,074,268 | 1.4 | 100,146 | |||||||
Citigroup, Inc. | 2,273,662 | 1.3 | 95,266 | |||||||
JPMorgan Chase & Co. | 1,580,938 | 1.0 | 74,304 | |||||||
Morgan Stanley | 493,648 | 0.5 | 33,203 | |||||||
The Charles Schwab Corp. (c) | 476,315 | 0.2 | 11,069 | |||||||
The Goldman Sachs Group, Inc. | 190,732 | 0.7 | 47,286 | |||||||
Other Securities | 2.8 | 217,393 | ||||||||
8.4 | 612,377 | |||||||||
Energy 11.3% | ||||||||||
ChevronTexaco Corp. | 1,000,677 | 1.3 | 91,572 | |||||||
ConocoPhillips | 758,216 | 0.9 | 64,418 | |||||||
Exxon Mobil Corp. | 2,640,422 | 3.3 | 242,892 | |||||||
Occidental Petroleum Corp. | 388,616 | 0.4 | 26,834 | |||||||
Schlumberger Ltd. | 546,506 | 0.7 | 52,776 | |||||||
Other Securities | 4.7 | 346,561 | ||||||||
11.3 | 825,053 | |||||||||
Food & Staples Retailing 2.0% | ||||||||||
CVS Caremark Corp. | 708,261 | 0.4 | 29,584 | |||||||
Wal-Mart Stores, Inc. | 1,122,977 | 0.7 | 50,770 | |||||||
Other Securities | 0.9 | 66,299 | ||||||||
2.0 | 146,653 | |||||||||
Food, Beverage & Tobacco 4.4% | ||||||||||
Altria Group, Inc. | 973,215 | 1.0 | 70,977 | |||||||
PepsiCo, Inc. | 759,487 | 0.8 | 55,989 | |||||||
The Coca-Cola Co. | 934,204 | 0.8 | 57,696 | |||||||
Other Securities | 1.8 | 135,290 | ||||||||
4.4 | 319,952 | |||||||||
Health Care Equipment & Services 4.1% | ||||||||||
UnitedHealth Group, Inc. | 642,312 | 0.4 | 31,570 | |||||||
Other Securities | 3.7 | 269,896 | ||||||||
4.1 | 301,466 | |||||||||
Household & Personal Products 2.2% | ||||||||||
The Procter & Gamble Co. | 1,460,919 | 1.4 | 101,563 |
36 See financial notes
Table of Contents
Schwab 1000 Index Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Other Securities | 0.8 | 55,842 | ||||||||
2.2 | 157,405 | |||||||||
Insurance 5.4% | ||||||||||
American International Group, Inc. | 1,189,536 | 1.0 | 75,084 | |||||||
Berkshire Hathaway, Inc., Class A * | 393 | 0.7 | 52,073 | |||||||
Other Securities | 3.7 | 264,682 | ||||||||
5.4 | 391,839 | |||||||||
Materials 3.8% | ||||||||||
Other Securities | 3.8 | 275,886 | ||||||||
Media 3.2% | ||||||||||
Comcast Corp., Class A (a) * | 1,442,353 | 0.4 | 30,362 | |||||||
The Walt Disney Co. | 971,502 | 0.5 | 33,643 | |||||||
Time Warner, Inc. | 1,769,601 | 0.5 | 32,313 | |||||||
Other Securities | 1.8 | 132,987 | ||||||||
3.2 | 229,305 | |||||||||
Pharmaceuticals & Biotechnology 7.3% | ||||||||||
Abbott Laboratories | 715,646 | 0.6 | 39,089 | |||||||
Amgen, Inc. * | 523,560 | 0.4 | 30,424 | |||||||
Bristol-Myers Squibb Co. | 936,539 | 0.4 | 28,087 | |||||||
Johnson & Johnson | 1,342,217 | 1.2 | 87,472 | |||||||
Merck & Co., Inc. | 1,019,285 | 0.8 | 59,384 | |||||||
Pfizer, Inc. | 3,216,810 | 1.1 | 79,166 | |||||||
Wyeth | 624,283 | 0.4 | 30,359 | |||||||
Other Securities | 2.4 | 178,868 | ||||||||
7.3 | 532,849 | |||||||||
Real Estate 1.8% | ||||||||||
Other Securities | 1.8 | 131,070 | ||||||||
Retailing 3.1% | ||||||||||
Other Securities | 3.1 | 228,745 | ||||||||
Semiconductors & Semiconductor Equipment 2.5% | ||||||||||
Intel Corp. | 2,674,630 | 1.0 | 71,947 | |||||||
Other Securities | 1.5 | 112,901 | ||||||||
2.5 | 184,848 | |||||||||
Software & Services 6.2% | ||||||||||
Google, Inc., Class A * | 99,296 | 1.0 | 70,202 | |||||||
Microsoft Corp. | 3,946,588 | 2.0 | 145,274 | |||||||
Oracle Corp. * | 1,850,710 | 0.6 | 41,030 | |||||||
Other Securities | 2.6 | 196,935 | ||||||||
6.2 | 453,441 | |||||||||
Technology Hardware & Equipment 7.5% | ||||||||||
Apple, Inc. * | 399,714 | 1.1 | 75,926 | |||||||
Cisco Systems, Inc. * | 2,801,315 | 1.3 | 92,612 | |||||||
Dell, Inc. * | 1,053,499 | 0.5 | 32,237 | |||||||
Hewlett-Packard Co. | 1,259,118 | 0.9 | 65,071 | |||||||
International Business Machines Corp. | 635,690 | 1.0 | 73,816 | |||||||
QUALCOMM, Inc. | 768,228 | 0.5 | 32,826 | |||||||
Other Securities | 2.2 | 171,260 | ||||||||
7.5 | 543,748 | |||||||||
Telecommunication Services 3.6% | ||||||||||
AT&T Corp. | 2,896,027 | 1.7 | 121,025 | |||||||
Verizon Communications, Inc. | 1,349,537 | 0.9 | 62,173 | |||||||
Other Securities | 1.0 | 75,535 | ||||||||
3.6 | 258,733 | |||||||||
Transportation 1.8% | ||||||||||
United Parcel Service, Inc., Class B | 488,325 | 0.5 | 36,673 | |||||||
Other Securities | 1.3 | 93,231 | ||||||||
1.8 | 129,904 | |||||||||
Utilities 3.6% | ||||||||||
Other Securities | 3.6 | 264,990 | ||||||||
Total Common Stock (Cost $3,056,568) | 7,247,273 | |||||||||
Foreign Common Stock 0.2% of net assets | ||||||||||
Bermuda 0.1% | ||||||||||
Capital Goods 0.1% | ||||||||||
Other Securities | 0.1 | 4,808 | ||||||||
Consumer Services 0.0% | ||||||||||
Other Securities | 0.0 | 1,231 | ||||||||
0.1 | 6,039 | |||||||||
Cayman Islands 0.1% | ||||||||||
Energy 0.1% | ||||||||||
Other Securities | 0.1 | 8,492 | ||||||||
United Kingdom 0.0% | ||||||||||
Transportation 0.0% | ||||||||||
Other Securities | 0.0 | 1,022 | ||||||||
Total Foreign Common Stock (Cost $7,751) | 15,553 | |||||||||
Security | Face Amount | % of Net | Value | |||||||
Rate, Maturity Date | ($ x 1,000) | Assets | ($ x 1,000) | |||||||
Short-Term Investments 0.2% of net assets | ||||||||||
Repurchase Agreement 0.2% | ||||||||||
Other Securities | 0.2 | 16,457 |
See financial notes 37
Table of Contents
Schwab 1000 Index Fund
Portfolio Holdings continued
Security | Face Amount | % of Net | Value | |||||||
Rate, Maturity Date | ($ x 1,000) | Assets | ($ x 1,000) | |||||||
U.S. Treasury Obligations 0.0% | ||||||||||
Other Securities | 0.0 | 572 | ||||||||
Total Short-Term Investments (Cost $17,029) | 17,029 | |||||||||
End of Investments. | ||||||||||
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Collateral Invested for Securities on Loan 5.6% of net assets | ||||||||||
State Street Navigator Security Lending Prime Portfolio | 409,235,043 | 5.6 | 409,235 | |||||||
End of collateral invested for securities on loan. | ||||||||||
At 10/31/2007 the tax basis cost of the fund’s investments was $3,082,470 and the unrealized appreciation and depreciation were $4,299,861 and ($102,476), respectively, with a net unrealized appreciation of $4,197,385. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings. | |
(c) | Issuer is affiliated with the fund’s adviser | |
(d) | Fair-valued by Management. Please see complete schedule of holdings. |
In addition to the above, the fund held the following at
10/31/2007. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 130 | 10,107 | 33 |
38 See financial notes
Table of Contents
Schwab 1000 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $399,547 (cost $3,081,348) | $7,279,855 | |||||
Collateral invested for securities on loan | 409,235 | |||||
Cash | 5 | |||||
Receivables: | ||||||
Dividends | 6,396 | |||||
Fund shares sold | 2,997 | |||||
Income from securities on loan | 149 | |||||
Due from brokers for futures | 123 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 30 | ||||
Total assets | 7,698,792 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | 409,235 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 128 | |||||
Transfer agent and shareholder services fees | 106 | |||||
Fund shares redeemed | 3,973 | |||||
Accrued expenses | + | 156 | ||||
Total liabilities | 413,598 | |||||
Net Assets | ||||||
Total assets | 7,698,792 | |||||
Total liabilities | − | 413,598 | ||||
Net assets | $7,285,194 | |||||
Net Assets by Source | ||||||
Capital received from investors | 3,002,639 | |||||
Net investment income not yet distributed | 80,191 | |||||
Net realized capital gains | 3,824 | |||||
Net unrealized capital gains | 4,198,540 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $3,974,445 | 86,754 | $45.81 | ||||||||
Select Shares | $3,310,749 | 72,217 | $45.84 |
See financial notes 39
Table of Contents
Schwab 1000 Index Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (including $581 from affiliated issuer and net of $6 foreign withholding tax) | $130,358 | |||||
Interest | 848 | |||||
Securities on loan | + | 1,031 | ||||
Total Investment Income | 132,237 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 312,564 | |||||
Net realized gains on futures contracts | + | 898 | ||||
Net realized gains | 313,462 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 563,616 | |||||
Net unrealized gains on foreign currency translations | 1 | |||||
Net unrealized losses on futures contracts | + | (156 | ) | |||
Net unrealized gains | 563,461 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 15,526 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 9,929 | |||||
Select Shares | 3,091 | |||||
Shareholder reports | 246 | |||||
Portfolio accounting fees | 198 | |||||
Custodian fees | 119 | |||||
Registration fees | 71 | |||||
Professional fees | 55 | |||||
Trustees’ fees | 43 | |||||
Overdraft expense | 24 | |||||
Other expenses | + | 60 | ||||
Total expenses | 29,362 | |||||
Custody credit | − | 10 | ||||
Net expenses | 29,352 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 132,237 | |||||
Net expenses | − | 29,352 | ||||
Net investment income | 102,885 | |||||
Net realized gains | 313,462 | |||||
Net unrealized gains | + | 563,461 | ||||
Increase in net assets from operations | $979,808 |
40 See financial notes
Table of Contents
Schwab 1000 Index Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $102,885 | $92,450 | ||||||
Net realized gains | 313,462 | 200,595 | ||||||
Net unrealized gains | + | 563,461 | 688,962 | |||||
Increase in net assets from operations | 979,808 | 982,007 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 49,741 | 53,026 | ||||||
Select Shares | + | 42,503 | 33,855 | |||||
Total distributions from net investment income | $92,244 | $86,881 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 6,398 | $273,594 | 7,114 | $266,698 | ||||||||||||||
Select Shares | + | 11,316 | 486,239 | 17,151 | 640,701 | |||||||||||||
Total shares sold | 17,714 | $759,833 | 24,265 | $907,399 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 1,107 | $45,932 | 1,329 | $48,830 | ||||||||||||||
Select Shares | + | 856 | 35,483 | 769 | 28,221 | |||||||||||||
Total shares reinvested | 1,963 | $81,415 | 2,098 | $77,051 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (17,729 | ) | ($762,521 | ) | (29,454 | ) | ($1,101,605 | ) | ||||||||||
Select Shares | + | (12,279 | ) | (522,702 | ) | (11,469 | ) | (429,917 | ) | |||||||||
Total shares redeemed | (30,008 | ) | ($1,285,223 | ) | (40,923 | ) | ($1,531,522 | ) | ||||||||||
Net transactions in fund shares | (10,331 | ) | ($443,975 | ) | (14,560 | ) | ($547,072 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 169,302 | $6,841,605 | 183,862 | $6,493,551 | ||||||||||||||
Total increase or decrease | + | (10,331 | ) | 443,589 | (14,560 | ) | 348,054 | |||||||||||
End of period | 158,971 | $7,285,194 | 169,302 | $6,841,605 | ||||||||||||||
Net investment income not yet distributed | $80,191 | $71,145 |
See financial notes 41
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 25.92 | 22.31 | 19.92 | 18.22 | 13.27 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.32 | 1 | 0.23 | 1 | 0.14 | 0.13 | 0.11 | |||||||||||||
Net realized and unrealized gains | 2.35 | 1 | 3.67 | 1 | 2.38 | 1.68 | 4.98 | |||||||||||||
Total income from investment operations | 2.67 | 3.90 | 2.52 | 1.81 | 5.09 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.24 | ) | (0.14 | ) | (0.13 | ) | (0.11 | ) | (0.14 | ) | ||||||||||
Distributions from net realized gains | (3.05 | ) | (0.15 | ) | — | — | — | |||||||||||||
Total distributions | (3.29 | ) | (0.29 | ) | (0.13 | ) | (0.11 | ) | (0.14 | ) | ||||||||||
Net asset value at end of period | 25.30 | 25.92 | 22.31 | 19.92 | 18.22 | |||||||||||||||
Total return (%) | 11.16 | 17.62 | 12.66 | 9.98 | 38.72 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.57 | 0.57 | 0.58 | 0.59 | 0.56 | |||||||||||||||
Gross operating expenses | 0.57 | 0.57 | 0.58 | 0.59 | 0.60 | |||||||||||||||
Net investment income | 1.28 | 0.94 | 0.57 | 0.66 | 0.74 | |||||||||||||||
Portfolio turnover rate | 31 | 29 | 40 | 39 | 34 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 756 | 771 | 823 | 869 | 886 |
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 25.97 | 22.36 | 19.96 | 18.25 | 13.28 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.35 | 1 | 0.27 | 1 | 0.17 | 0.17 | 0.14 | |||||||||||||
Net realized and unrealized gains | 2.36 | 1 | 3.67 | 1 | 2.39 | 1.68 | 4.99 | |||||||||||||
Total income from investment operations | 2.71 | 3.94 | 2.56 | 1.85 | 5.13 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.28 | ) | (0.18 | ) | (0.16 | ) | (0.14 | ) | (0.16 | ) | ||||||||||
Distributions from net realized gains | (3.05 | ) | (0.15 | ) | — | — | — | |||||||||||||
Total distributions | (3.33 | ) | (0.33 | ) | (0.16 | ) | (0.14 | ) | (0.16 | ) | ||||||||||
Net asset value at end of period | 25.35 | 25.97 | 22.36 | 19.96 | 18.25 | |||||||||||||||
Total return (%) | 11.35 | 17.78 | 12.86 | 10.16 | 39.02 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.42 | 0.42 | 0.41 | 0.42 | 0.41 | |||||||||||||||
Gross operating expenses | 0.42 | 0.42 | 0.43 | 0.44 | 0.45 | |||||||||||||||
Net investment income | 1.43 | 1.10 | 0.74 | 0.82 | 0.89 | |||||||||||||||
Portfolio turnover rate | 31 | 29 | 40 | 39 | 34 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 969 | 889 | 795 | 761 | 759 |
1 Calculated based on the average shares outstanding during the period.
42 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2007
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date. 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
98 | .5% | Common Stock | 1,372,632 | 1,698,058 | ||||||||
0 | .6% | Foreign Common Stock | 9,379 | 10,165 | ||||||||
0 | .9% | Short-Term Investments | 15,171 | 15,171 | ||||||||
100 | .0% | Total Investments | 1,397,182 | 1,723,394 | ||||||||
35 | .3% | Collateral Invested for Securities on Loan | 609,313 | 609,313 | ||||||||
(35 | .3)% | Other Assets and Liabilities, Net | (608,174 | ) | ||||||||
100 | .0% | Net Assets | 1,724,533 |
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Common Stock 98.5% of net assets | ||||||||||
Automobiles & Components 1.1% | ||||||||||
Other Securities | 1.1 | 19,600 | ||||||||
Banks 6.6% | ||||||||||
Other Securities | 6.6 | 113,999 | ||||||||
Capital Goods 9.9% | ||||||||||
Bucyrus International, Inc., Class A | 44,546 | 0.2 | 3,675 | |||||||
Curtiss-Wright Corp. | 73,456 | 0.2 | 4,135 | |||||||
DRS Technologies, Inc. | 66,191 | 0.2 | 3,802 | |||||||
EMCOR Group, Inc. * | 106,004 | 0.2 | 3,650 | |||||||
First Solar, Inc. (a) * | 47,600 | 0.4 | 7,559 | |||||||
KBR, Inc. * | 261,000 | 0.7 | 11,192 | |||||||
The Toro Co. | 67,035 | 0.2 | 3,731 | |||||||
Washington Group International, Inc. * | 46,947 | 0.3 | 4,570 | |||||||
Other Securities | 7.5 | 128,172 | ||||||||
9.9 | 170,486 | |||||||||
Commercial Services & Supplies 4.2% | ||||||||||
Waste Connections, Inc. (a) * | 110,943 | 0.2 | 3,751 | |||||||
Other Securities | 4.0 | 68,040 | ||||||||
4.2 | 71,791 | |||||||||
Consumer Durables & Apparel 3.8% | ||||||||||
Crocs, Inc. (a) * | 114,418 | 0.5 | 8,553 | |||||||
Tempur-Pedic International, Inc. (a) | 123,062 | 0.3 | 4,430 | |||||||
Tupperware Brands Corp. (a) | 100,511 | 0.2 | 3,628 | |||||||
Other Securities | 2.8 | 48,691 | ||||||||
3.8 | 65,302 | |||||||||
Consumer Services 4.7% | ||||||||||
Chipotle Mexican Grill, Inc., Class A (a) * | 46,747 | 0.4 | 6,498 | |||||||
DeVry, Inc. | 98,080 | 0.3 | 5,364 | |||||||
Strayer Education, Inc. (a) | 22,771 | 0.2 | 4,246 | |||||||
Other Securities | 3.8 | 65,705 | ||||||||
4.7 | 81,813 | |||||||||
Diversified Financials 2.2% | ||||||||||
International Securities Exchange Holdings, Inc., Class A | 63,348 | 0.2 | 4,247 | |||||||
Waddell & Reed Financial, Inc., Class A (a) | 125,539 | 0.2 | 4,170 | |||||||
Other Securities | 1.8 | 30,323 | ||||||||
2.2 | 38,740 | |||||||||
Energy 8.1% | ||||||||||
Atwood Oceanics, Inc. * | 44,404 | 0.2 | 3,741 | |||||||
Dresser-Rand Group, Inc. * | 133,619 | 0.3 | 5,171 | |||||||
Global Industries Ltd. * | 149,682 | 0.2 | 3,685 | |||||||
Whiting Petroleum Corp. * | 67,211 | 0.2 | 3,633 | |||||||
Other Securities | 7.2 | 122,783 | ||||||||
8.1 | 139,013 | |||||||||
Food & Staples Retailing 0.8% | ||||||||||
Other Securities | 0.8 | 13,794 | ||||||||
Food, Beverage & Tobacco 2.0% | ||||||||||
Hansen Natural Corp. (a) * | 93,760 | 0.4 | 6,376 | |||||||
Other Securities | 1.6 | 28,742 | ||||||||
2.0 | 35,118 |
See financial notes 43
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Health Care Equipment & Services 5.9% | ||||||||||
Inverness Medical Innovations, Inc. (a) * | 75,156 | 0.3 | 4,516 | |||||||
Kyphon, Inc. * | 72,236 | 0.3 | 5,120 | |||||||
Other Securities | 5.3 | 91,525 | ||||||||
5.9 | 101,161 | |||||||||
Household & Personal Products 0.4% | ||||||||||
Other Securities | 0.4 | 6,236 | ||||||||
Insurance 3.1% | ||||||||||
Other Securities | 3.1 | 53,336 | ||||||||
Materials 4.9% | ||||||||||
CF Industries Holdings, Inc. | 74,553 | 0.4 | 6,553 | |||||||
Terra Industries, Inc. * | 155,300 | 0.3 | 5,729 | |||||||
Other Securities | 4.2 | 72,880 | ||||||||
4.9 | 85,162 | |||||||||
Media 2.4% | ||||||||||
Other Securities | 2.4 | 40,677 | ||||||||
Pharmaceuticals & Biotechnology 6.0% | ||||||||||
Alexion Pharmaceuticals, Inc. * | 49,028 | 0.2 | 3,751 | |||||||
BioMarin Pharmaceuticals, Inc. * | 131,314 | 0.2 | 3,641 | |||||||
Illumina, Inc. (a) * | 87,394 | 0.3 | 4,907 | |||||||
MGI Pharma, Inc. * | 133,691 | 0.3 | 4,356 | |||||||
Myriad Genetics, Inc. * | 67,265 | 0.2 | 3,724 | |||||||
Onyx Pharmaceuticals, Inc. * | 90,466 | 0.2 | 4,226 | |||||||
OSI Pharmaceuticals, Inc. * | 93,291 | 0.2 | 3,878 | |||||||
Varian, Inc. * | 49,971 | 0.2 | 3,692 | |||||||
Ventana Medical Systems, Inc. * | 51,706 | 0.3 | 4,550 | |||||||
Other Securities | 3.9 | 66,815 | ||||||||
6.0 | 103,540 | |||||||||
Real Estate 5.8% | ||||||||||
Digital Realty Trust, Inc. (a) | 96,504 | 0.2 | 4,245 | |||||||
Other Securities | 5.6 | 95,339 | ||||||||
5.8 | 99,584 | |||||||||
Retailing 3.4% | ||||||||||
Dick’s Sporting Goods, Inc. (a) * | 127,680 | 0.2 | 4,261 | |||||||
Other Securities | 3.2 | 55,139 | ||||||||
3.4 | 59,400 | |||||||||
Semiconductors & Semiconductor Equipment 4.0% | ||||||||||
Cree, Inc. (a) * | 134,296 | 0.2 | 3,760 | |||||||
Other Securities | 3.8 | 64,498 | ||||||||
4.0 | 68,258 | |||||||||
Software & Services 6.6% | ||||||||||
ANSYS, Inc. * | 125,648 | 0.3 | 4,876 | |||||||
Equinix, Inc. (a) * | 40,047 | 0.3 | 4,672 | |||||||
Hewitt Associates, Inc., Class A * | 168,138 | 0.3 | 5,932 | |||||||
Jack Henry & Associates, Inc. (a) | 125,520 | 0.2 | 3,668 | |||||||
Nuance Communications, Inc. (a) * | 228,357 | 0.3 | 5,049 | |||||||
VeriFone Holdings, Inc. (a) * | 76,243 | 0.2 | 3,769 | |||||||
Other Securities | 5.0 | 85,851 | ||||||||
6.6 | 113,817 | |||||||||
Technology Hardware & Equipment 5.9% | ||||||||||
Foundry Networks, Inc. * | 231,824 | 0.3 | 4,901 | |||||||
Itron, Inc. (a) * | 47,559 | 0.3 | 5,112 | |||||||
Other Securities | 5.3 | 92,469 | ||||||||
5.9 | 102,482 | |||||||||
Telecommunication Services 1.5% | ||||||||||
Time Warner Telecom, Inc., Class A * | 190,408 | 0.3 | 4,425 | |||||||
United States Cellular Corp. * | 39,840 | 0.2 | 3,751 | |||||||
Other Securities | 1.0 | 17,418 | ||||||||
1.5 | 25,594 | |||||||||
Transportation 2.0% | ||||||||||
Kirby Corp. * | 86,434 | 0.2 | 3,948 | |||||||
Other Securities | 1.8 | 30,079 | ||||||||
2.0 | 34,027 | |||||||||
Utilities 3.2% | ||||||||||
Other Securities | 3.2 | 55,128 | ||||||||
Total Common Stock (Cost $1,372,632) | 1,698,058 | |||||||||
Foreign Common Stock 0.6% of net assets | ||||||||||
Bermuda 0.6% | ||||||||||
Consumer Durables & Apparel 0.1% | ||||||||||
Other Securities | 0.1 | 909 | ||||||||
Insurance 0.4% | ||||||||||
Other Securities | 0.4 | 8,276 |
44 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Software & Services 0.1% | ||||||||||
Other Securities | 0.1 | 980 | ||||||||
Total Foreign Common Stock (Cost $9,379) | 10,165 | |||||||||
Security | Face Amount | % of Net | Value | |||||||
Rate, Maturity Date | ($ x 1,000) | Assets | ($ x 1,000) | |||||||
Short-Term Investments 0.9% of net assets | ||||||||||
Commercial Paper & Other Obligations 0.8% | ||||||||||
Wells Fargo, Grand Cayman Time Deposit 4.75%, 11/01/07 | 14,047,065 | 0.8 | 14,047 | |||||||
U.S. Treasury Obligation 0.1% | ||||||||||
Other Securities | 0.1 | 1,124 | ||||||||
Total Short-Term Investments (Cost $15,171) | 15,171 | |||||||||
End of Investments. | ||||||||||
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Collateral Invested for Securities on Loan 35.3% of net assets | ||||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 609,312,790 | 35.3 | 609,313 | |||||||
End of collateral invested for securities on loan. | ||||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $1,395,610, and the unrealized appreciation and depreciation were $468,572 and ($140,788), respectively, with a net unrealized appreciation of $327,784. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings. |
In addition to the above, the fund held the following at 10/31/2007. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, e-mini, Long, expires 12/21/07 | 165 | 13,733 | 714 |
See financial notes 45
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $605,077 (cost $1,397,182) | $1,723,394 | |||||
Collateral invested for securities on loan | 609,313 | |||||
Receivables: | ||||||
Dividends | 940 | |||||
Fund shares sold | 465 | |||||
Income from securities on loan | 437 | |||||
Due from brokers for futures | 224 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 7 | ||||
Total assets | 2,334,782 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | 609,313 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 40 | |||||
Transfer agent and shareholder services fees | 27 | |||||
Fund shares redeemed | 789 | |||||
Accrued expenses | + | 80 | ||||
Total liabilities | 610,249 | |||||
Net Assets | ||||||
Total assets | 2,334,782 | |||||
Total liabilities | − | 610,249 | ||||
Net assets | $1,724,533 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,133,361 | |||||
Net investment income not yet distributed | 17,463 | |||||
Net realized capital gains | 246,783 | |||||
Net unrealized capital gains | 326,926 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $755,905 | 29,875 | $25.30 | ||||||||
Select Shares | $968,628 | 38,209 | $25.35 |
46 See financial notes
Table of Contents
Schwab Small-Cap Index Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (net of $12 foreign withholding tax) | $27,814 | |||||
Interest | 856 | |||||
Securities on loan | + | 2,953 | ||||
Total Investment Income | 31,623 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 246,317 | |||||
Net realized losses on futures contracts | + | (1,662 | ) | |||
Net realized gains | 244,655 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized losses on investments | (87,002 | ) | ||||
Net unrealized gains on futures contracts | + | 532 | ||||
Net unrealized losses | (86,470 | ) | ||||
Expenses | ||||||
Investment adviser and administrator fees | 5,047 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 1,931 | |||||
Select Shares | 941 | |||||
Registration fees | 106 | |||||
Portfolio accounting fees | 90 | |||||
Custodian fees | 67 | |||||
Shareholder reports | 60 | |||||
Professional fees | 46 | |||||
Trustees’ fees | 14 | |||||
Overdraft expense | 9 | |||||
Other expenses | + | 22 | ||||
Total expenses | 8,333 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 31,623 | |||||
Net expenses | − | 8,333 | ||||
Net investment income | 23,290 | |||||
Net realized gains | 244,655 | |||||
Net unrealized losses | + | (86,470 | ) | |||
Increase in net assets from operations | $181,475 |
See financial notes 47
Table of Contents
Schwab Small-Cap Index Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | ||||||||
Net investment income | $23,290 | $16,970 | |||||||
Net realized gains | 244,655 | 192,404 | |||||||
Net unrealized gains or losses | + | (86,470 | ) | 62,683 | |||||
Increase in net assets from operations | 181,475 | 272,057 | |||||||
Distributions to Shareholders | |||||||||
Distributions from net investment income | |||||||||
Investor Shares | 6,876 | 4,995 | |||||||
Select Shares | + | 9,628 | 6,216 | ||||||
Total distributions from net investment income | 16,504 | 11,211 | |||||||
Distributions from net realized gains | |||||||||
Investor Shares | 88,653 | 5,339 | |||||||
Select Shares | + | 104,007 | 5,156 | ||||||
Total distributions from net realized gains | 192,660 | 10,495 | |||||||
Total distributions | $209,164 | $21,706 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 3,309 | $81,591 | 2,811 | $68,930 | ||||||||||||||
Select Shares | + | 4,151 | 101,982 | 5,327 | 128,328 | |||||||||||||
Total shares sold | 7,460 | $183,573 | 8,138 | $197,258 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 3,788 | $89,541 | 414 | $9,611 | ||||||||||||||
Select Shares | + | 4,407 | 104,234 | 451 | 10,498 | |||||||||||||
Total shares reinvested | 8,195 | $193,775 | 865 | $20,109 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (6,951 | ) | ($171,881 | ) | (10,390 | ) | ($251,597 | ) | ||||||||||
Select Shares | + | (4,571 | ) | (112,733 | ) | (7,116 | ) | (174,607 | ) | |||||||||
Total shares redeemed | (11,522 | ) | ($284,614 | ) | (17,506 | ) | ($426,204 | ) | ||||||||||
Net transactions in fund shares | 4,133 | $92,734 | (8,503 | ) | ($208,837 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 63,951 | $1,659,488 | 72,454 | $1,617,974 | ||||||||||||||
Total increase or decrease | + | 4,133 | 65,045 | (8,503 | ) | 41,514 | ||||||||||||
End of period | 68,084 | $1,724,533 | 63,951 | $1,659,488 | ||||||||||||||
Net investment income not yet distributed | $17,463 | $12,783 |
48 See financial notes
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 23.83 | 20.77 | 19.04 | 17.48 | 14.35 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.35 | 0.30 | 0.29 | 0.19 | 0.16 | |||||||||||||||
Net realized and unrealized gains | 3.06 | 3.01 | 1.69 | 1.53 | 3.14 | |||||||||||||||
Total income from investment operations | 3.41 | 3.31 | 1.98 | 1.72 | 3.30 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.28 | ) | (0.25 | ) | (0.25 | ) | (0.16 | ) | (0.17 | ) | ||||||||||
Net asset value at end of period | 26.96 | 23.83 | 20.77 | 19.04 | 17.48 | |||||||||||||||
Total return (%) | 14.44 | 16.05 | 10.45 | 9.93 | 23.24 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.52 | 0.53 | 0.54 | 0.56 | 0.53 | |||||||||||||||
Gross operating expenses | 0.52 | 0.53 | 0.54 | 0.56 | 0.59 | |||||||||||||||
Net investment income | 1.34 | 1.27 | 1.37 | 1.07 | 1.18 | |||||||||||||||
Portfolio turnover rate | 0 | 1 | 3 | 2 | 2 | 3 | ||||||||||||||
Net assets, end of period ($ x 1,000,000) | 673 | 607 | 600 | 592 | 469 |
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 23.90 | 20.83 | 19.09 | 17.52 | 14.37 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.37 | 0.31 | 0.31 | 0.22 | 0.20 | |||||||||||||||
Net realized and unrealized gains | 3.09 | 3.04 | 1.71 | 1.54 | 3.14 | |||||||||||||||
Total income from investment operations | 3.46 | 3.35 | 2.02 | 1.76 | 3.34 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.32 | ) | (0.28 | ) | (0.28 | ) | (0.19 | ) | (0.19 | ) | ||||||||||
Net asset value at end of period | 27.04 | 23.90 | 20.83 | 19.09 | 17.52 | |||||||||||||||
Total return (%) | 14.62 | 16.23 | 10.63 | 10.10 | 23.50 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.37 | 0.38 | 0.39 | 0.39 | 0.36 | |||||||||||||||
Gross operating expenses | 0.37 | 0.38 | 0.39 | 0.41 | 0.44 | |||||||||||||||
Net investment income | 1.49 | 1.41 | 1.52 | 1.23 | 1.35 | |||||||||||||||
Portfolio turnover rate | 0 | 1 | 3 | 2 | 2 | 3 | ||||||||||||||
Net assets, end of period ($ x 1,000,000) | 906 | 762 | 617 | 548 | 429 |
1 Less than 1%.
See financial notes 49
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2007
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date. 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
98 | .7% | Common Stock | 1,073,413 | 1,559,111 | ||||||||
0 | .2% | Foreign Common Stock | 1,070 | 2,737 | ||||||||
0 | .1% | Preferred Stock | 723 | 2,032 | ||||||||
0 | .9% | Short-Term Investments | 14,979 | 14,979 | ||||||||
99 | .9% | Total Investments | 1,090,185 | 1,578,859 | ||||||||
3 | .5% | Collateral Invested for Securities on Loan | 54,830 | 54,830 | ||||||||
(3 | .4)% | Other Assets and Liabilities, Net | (54,272 | ) | ||||||||
100 | .0% | Net Assets | 1,579,417 |
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Common Stock 98.7% of net assets | ||||||||||
Automobiles & Components 0.7% | ||||||||||
Other Securities | 0.7 | 10,269 | ||||||||
Banks 4.2% | ||||||||||
Wachovia Corp. | 171,582 | 0.5 | 7,846 | |||||||
Wells Fargo & Co. | 279,406 | 0.6 | 9,503 | |||||||
Other Securities | 3.1 | 48,362 | ||||||||
4.2 | 65,711 | |||||||||
Capital Goods 8.7% | ||||||||||
3M Co. | 65,000 | 0.4 | 5,613 | |||||||
General Electric Co. | 847,966 | 2.2 | 34,902 | |||||||
The Boeing Co. | 68,800 | 0.4 | 6,783 | |||||||
United Technologies Corp. | 84,068 | 0.4 | 6,439 | |||||||
Other Securities | 5.3 | 83,788 | ||||||||
8.7 | 137,525 | |||||||||
Commercial Services & Supplies 1.1% | ||||||||||
Other Securities | 1.1 | 17,635 | ||||||||
Consumer Durables & Apparel 1.4% | ||||||||||
Other Securities | 1.4 | 22,447 | ||||||||
Consumer Services 2.5% | ||||||||||
McDonald’s Corp. | 110,300 | 0.4 | 6,585 | |||||||
Other Securities | 2.1 | 32,575 | ||||||||
2.5 | 39,160 | |||||||||
Diversified Financials 7.9% | ||||||||||
American Express Co. | 105,150 | 0.4 | 6,409 | |||||||
Bank of America Corp. | 381,577 | 1.2 | 18,423 | |||||||
Citigroup, Inc. | 412,286 | 1.1 | 17,275 | |||||||
JPMorgan Chase & Co. | 295,944 | 0.9 | 13,909 | |||||||
Morgan Stanley | 90,300 | 0.4 | 6,074 | |||||||
The Charles Schwab Corp. (d) | 111,120 | 0.2 | 2,582 | |||||||
The Goldman Sachs Group, Inc. | 38,700 | 0.6 | 9,595 | |||||||
Other Securities | 3.1 | 50,869 | ||||||||
7.9 | 125,136 | |||||||||
Energy 10.3% | ||||||||||
Chevron Corp. | 178,939 | 1.1 | 16,375 | |||||||
ConocoPhillips | 134,223 | 0.7 | 11,404 | |||||||
Exxon Mobil Corp. | 493,166 | 2.9 | 45,366 | |||||||
Schlumberger Ltd. | 100,000 | 0.6 | 9,657 | |||||||
Other Securities | 5.0 | 80,414 | ||||||||
10.3 | 163,216 | |||||||||
Food & Staples Retailing 2.1% | ||||||||||
Wal-Mart Stores, Inc. | 334,100 | 1.0 | 15,105 | |||||||
Other Securities | 1.1 | 18,400 | ||||||||
2.1 | 33,505 | |||||||||
Food, Beverage & Tobacco 4.5% | ||||||||||
Altria Group, Inc. | 168,800 | 0.8 | 12,311 | |||||||
Kraft Foods, Inc., Class A | 185,513 | 0.4 | 6,198 | |||||||
PepsiCo, Inc. | 140,800 | 0.7 | 10,380 | |||||||
The Coca-Cola Co. | 202,200 | 0.8 | 12,488 | |||||||
Other Securities | 1.8 | 28,886 | ||||||||
4.5 | 70,263 | |||||||||
Health Care Equipment & Services 4.2% | ||||||||||
UnitedHealth Group, Inc. | 118,880 | 0.4 | 5,843 | |||||||
Other Securities | 3.8 | 61,157 | ||||||||
4.2 | 67,000 |
50 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Household & Personal Products 1.9% | ||||||||||
The Procter & Gamble Co. | 269,915 | 1.2 | 18,765 | |||||||
Other Securities | 0.7 | 10,952 | ||||||||
1.9 | 29,717 | |||||||||
Insurance 5.1% | ||||||||||
American International Group, Inc. | 211,922 | 0.9 | 13,376 | |||||||
Berkshire Hathaway, Inc., Class A * | 128 | 1.1 | 16,960 | |||||||
Other Securities | 3.1 | 50,917 | ||||||||
5.1 | 81,253 | |||||||||
Materials 3.9% | ||||||||||
Other Securities | 1,247,695 | 3.9 | 61,981 | |||||||
Media 3.6% | ||||||||||
News Corp., Class A | 253,950 | 0.4 | 5,503 | |||||||
The Walt Disney Co. | 195,410 | 0.4 | 6,767 | |||||||
Time Warner, Inc. | 367,052 | 0.4 | 6,702 | |||||||
Other Securities | 2.4 | 37,848 | ||||||||
3.6 | 56,820 | |||||||||
Pharmaceuticals & Biotechnology 6.7% | ||||||||||
Abbott Laboratories | 125,705 | 0.5 | 6,866 | |||||||
Amgen, Inc. * | 103,268 | 0.4 | 6,001 | |||||||
Genentech, Inc. * | 83,300 | 0.4 | 6,175 | |||||||
Johnson & Johnson | 246,370 | 1.0 | 16,056 | |||||||
Merck & Co., Inc. | 183,552 | 0.7 | 10,694 | |||||||
Pfizer, Inc. | 610,192 | 1.0 | 15,017 | |||||||
Wyeth | 109,400 | 0.3 | 5,320 | |||||||
Other Securities | 2.4 | 40,022 | ||||||||
6.7 | 106,151 | |||||||||
Real Estate 1.6% | ||||||||||
Other Securities | 1.6 | 25,536 | ||||||||
Retailing 3.3% | ||||||||||
Other Securities | 3.3 | 52,522 | ||||||||
Semiconductors & Semiconductor Equipment 2.5% | ||||||||||
Intel Corp. | 483,832 | 0.8 | 13,015 | |||||||
Other Securities | 1.7 | 26,123 | ||||||||
2.5 | 39,138 | |||||||||
Software & Services 7.2% | ||||||||||
Google, Inc., Class A * | 27,900 | 1.3 | 19,725 | |||||||
Microsoft Corp. | 800,850 | 1.9 | 29,479 | |||||||
Oracle Corp. * | 434,449 | 0.6 | 9,632 | |||||||
Other Securities | 3.4 | 54,538 | ||||||||
7.2 | 113,374 | |||||||||
Technology Hardware & Equipment 7.1% | ||||||||||
Apple, Inc. * | 75,000 | 0.9 | 14,246 | |||||||
Cisco Systems, Inc. * | 511,909 | 1.1 | 16,924 | |||||||
Dell, Inc. * | 178,900 | 0.4 | 5,474 | |||||||
Hewlett-Packard Co. | 249,636 | 0.8 | 12,901 | |||||||
International Business Machines Corp. | 131,510 | 1.0 | 15,271 | |||||||
QUALCOMM, Inc. | 135,100 | 0.4 | 5,773 | |||||||
Other Securities | 2.5 | 41,063 | ||||||||
7.1 | 111,652 | |||||||||
Telecommunication Services 3.2% | ||||||||||
AT&T, Inc. | 520,056 | 1.4 | 21,733 | |||||||
Verizon Communications, Inc. | 247,572 | 0.7 | 11,406 | |||||||
Other Securities | 1.1 | 16,735 | ||||||||
3.2 | 49,874 | |||||||||
Transportation 1.7% | ||||||||||
United Parcel Service, Inc., Class B | 91,480 | 0.4 | 6,870 | |||||||
Other Securities | 1.3 | 20,621 | ||||||||
1.7 | 27,491 | |||||||||
Utilities 3.3% | ||||||||||
Other Securities | 3.3 | 51,735 | ||||||||
Total Common Stock (Cost $1,073,413) | 1,559,111 | |||||||||
Foreign Common Stock 0.2% of net assets | ||||||||||
Bermuda 0.1% | ||||||||||
Capital Goods 0.1% | ||||||||||
Other Securities | 0.1 | 771 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||||
Other Securities | 0.0 | 90 | ||||||||
Consumer Services 0.0% | ||||||||||
Other Securities | 0.0 | 103 | ||||||||
0.1 | 964 | |||||||||
Cayman Islands 0.1% | ||||||||||
Energy 0.1% | ||||||||||
Other Securities | 0.1 | 1,552 | ||||||||
Singapore 0.0% | ||||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||||
Other Securities | 0.0 | 111 |
See financial notes 51
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
United Kingdom 0.0% | ||||||||||
Transportation 0.0% | ||||||||||
Other Securities | 0.0 | 110 | ||||||||
Total Foreign Common Stock (Cost $1,070) | 2,737 | |||||||||
Preferred Stock 0.1% of net assets | ||||||||||
Real Estate 0.1% | ||||||||||
Other Securities | 0.1 | 2,032 | ||||||||
Total Preferred Stock (Cost $723) | 2,032 | |||||||||
Security | Face Amount | % of Net | Value | |||||||
Rate, Maturity Date | ($ x 1,000) | Assets | ($ x 1,000) | |||||||
Short-Term Investments 0.9% of net assets | ||||||||||
Commercial Paper & Other Obligations 0.8% | ||||||||||
Wells Fargo, Grand Cayman Time Deposit 4.75%, 11/01/07 | 14,143 | 0.8 | 14,143 | |||||||
U.S. Treasury Obligations 0.1% | ||||||||||
Other Securities | 0.1 | 836 | ||||||||
Total Short-Term Investments (Cost $14,979) | 14,979 | |||||||||
End of Investments. | ||||||||||
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Collateral Invested for Securities on Loan 3.5% of net assets | ||||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 54,830,367 | 3.5 | 54,830 | |||||||
End of collateral invested for securities on loan. | ||||||||||
At 10/31/07 the tax basis cost of the fund’s investments was $1,090,527 and the unrealized appreciation and depreciation were $573,253 and ($84,921), respectively, with a net unrealized appreciation of $488,332. |
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. Please see complete schedule of holdings. | |
(b) | Fair-valued by Management. Please see complete schedule of holdings. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. Please see complete schedule of holdings. | |
(d) | Issuer is affiliated with the fund’s adviser. |
ADR — American Depositary Receipt. Please see complete schedule of holdings.
In addition to the above, the fund held the following at
10/31/07. All numbers are x 1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, e-mini, Long, expires 12/21/07 | 35 | 2,913 | 151 | |||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 130 | 10,107 | 370 | |||||||||
521 |
52 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $54,184 (cost $1,090,185) | $1,578,859 | |||||
Collateral invested for securities on loan | 54,830 | |||||
Cash | 2 | |||||
Receivables: | ||||||
Fund shares sold | 1,919 | |||||
Dividends | 1,271 | |||||
Due from brokers for futures | 170 | |||||
Income from securities on loan | 38 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 7 | ||||
Total assets | 1,637,098 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | 54,830 | |||||
Payables: | ||||||
Investments bought | 1,838 | |||||
Investment adviser and administrator fees | 31 | |||||
Transfer agent and shareholder services fees | 21 | |||||
Fund shares redeemed | 899 | |||||
Accrued expenses | + | 62 | ||||
Total liabilities | 57,681 | |||||
Net Assets | ||||||
Total assets | 1,637,098 | |||||
Total liabilities | − | 57,681 | ||||
Net assets | $1,579,417 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,071,303 | |||||
Net investment income not yet distributed | 16,410 | |||||
Net realized capital gains | 2,509 | |||||
Net unrealized capital gains | 489,195 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $673,171 | 24,969 | $26.96 | ||||||||
Select Shares | $906,246 | 33,520 | $27.04 |
See financial notes 53
Table of Contents
Schwab Total Stock Market Index Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (including $133 from affiliated issuer and net of $7 foreign withholding tax) | $26,583 | |||||
Interest | 759 | |||||
Securities on loan | + | 314 | ||||
Total Investment Income | 27,656 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 16,302 | |||||
Net realized losses on futures contracts | + | (137 | ) | |||
Net realized gains | 16,165 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 162,457 | |||||
Net unrealized gains on futures contracts | + | 429 | ||||
Net unrealized gains | 162,886 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,666 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 1,605 | |||||
Select Shares | 843 | |||||
Portfolio accounting fees | 121 | |||||
Registration fees | 96 | |||||
Custodian fees | 52 | |||||
Shareholder reports | 51 | |||||
Professional fees | 45 | |||||
Trustees’ fees | 13 | |||||
Other expenses | + | 14 | ||||
Total expenses | 6,506 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 27,656 | |||||
Net expenses | − | 6,506 | ||||
Net investment income | 21,150 | |||||
Net realized gains | 16,165 | |||||
Net unrealized gains | + | 162,886 | ||||
Increase in net assets from operations | $200,201 |
54 See financial notes
Table of Contents
Schwab Total Stock Market Index Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $21,150 | $17,272 | ||||||
Net realized gains | 16,165 | 3,650 | ||||||
Net unrealized gains | + | 162,886 | 172,034 | |||||
Increase in net assets from operations | 200,201 | 192,956 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 7,170 | 7,046 | ||||||
Select Shares | + | 10,364 | 8,255 | |||||
Total distributions from net investment income | $17,534 | $15,301 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 4,388 | $110,760 | 3,959 | $87,655 | ||||||||||||||
Select Shares | + | 7,297 | 184,566 | 8,052 | 178,696 | |||||||||||||
Total shares sold | 11,685 | $295,326 | 12,011 | $266,351 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 273 | $6,688 | 302 | $6,537 | ||||||||||||||
Select Shares | + | 349 | 8,568 | 315 | 6,824 | |||||||||||||
Total shares reinvested | 622 | $15,256 | 617 | $13,361 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (5,145 | ) | ($130,207 | ) | (7,691 | ) | ($169,892 | ) | ||||||||||
Select Shares | + | (6,015 | ) | (152,240 | ) | (6,111 | ) | (136,146 | ) | |||||||||
Total shares redeemed | (11,160 | ) | ($282,447 | ) | (13,802 | ) | ($306,038 | ) | ||||||||||
Net transactions in fund shares | 1,147 | $28,135 | (1,174 | ) | ($26,326 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 57,342 | $1,368,615 | 58,516 | $1,217,286 | ||||||||||||||
Total increase or decrease | + | 1,147 | 210,802 | (1,174 | ) | 151,329 | ||||||||||||
End of period | 58,489 | $1,579,417 | 57,342 | $1,368,615 | ||||||||||||||
Net investment income not yet distributed | $16,410 | $13,499 |
See financial notes 55
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 21.12 | 17.07 | 14.82 | 12.74 | 10.47 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.50 | 0.48 | 0.35 | 0.26 | 0.23 | |||||||||||||||
Net realized and unrealized gains | 4.92 | 3.92 | 2.18 | 2.05 | 2.25 | |||||||||||||||
Total income from investment operations | 5.42 | 4.40 | 2.53 | 2.31 | 2.48 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.62 | ) | (0.35 | ) | (0.28 | ) | (0.23 | ) | (0.21 | ) | ||||||||||
Net asset value at end of period | 25.92 | 21.12 | 17.07 | 14.82 | 12.74 | |||||||||||||||
Total return (%) | 26.26 | 26.15 | 17.30 | 18.40 | 24.24 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.69 | 0.69 | 0.68 | 0.69 | 0.65 | |||||||||||||||
Gross operating expenses | 0.69 | 0.70 | 0.72 | 0.73 | 0.74 | |||||||||||||||
Net investment income | 2.15 | 2.41 | 2.05 | 1.78 | 2.01 | |||||||||||||||
Portfolio turnover rate | 5 | 11 | 10 | 1 | 7 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 872 | 706 | 595 | 550 | 494 |
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/2/02- | ||||||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 21.14 | 17.09 | 14.83 | 12.75 | 10.47 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.54 | 0.50 | 0.38 | 0.28 | 0.25 | |||||||||||||||
Net realized and unrealized gains | 4.93 | 3.93 | 2.19 | 2.05 | 2.26 | |||||||||||||||
Total income from investment operations | 5.47 | 4.43 | 2.57 | 2.33 | 2.51 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.66 | ) | (0.38 | ) | (0.31 | ) | (0.25 | ) | (0.23 | ) | ||||||||||
Net asset value at end of period | 25.95 | 21.14 | 17.09 | 14.83 | 12.75 | |||||||||||||||
Total return (%) | 26.50 | 26.35 | 17.56 | 18.56 | 24.50 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 0.50 | 0.50 | 0.50 | 0.50 | 0.49 | |||||||||||||||
Gross operating expenses | 0.54 | 0.55 | 0.57 | 0.58 | 0.59 | |||||||||||||||
Net investment income | 2.34 | 2.60 | 2.23 | 1.97 | 2.19 | |||||||||||||||
Portfolio turnover rate | 5 | 11 | 10 | 1 | 7 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,264 | 954 | 776 | 687 | 629 |
56 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings as of October 31, 2007
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date. 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99 | .1% | Common Stock | 1,072,683 | 2,116,778 | ||||||||
0 | .2% | Preferred Stock | 1,902 | 3,761 | ||||||||
0 | .8% | Short-Term Investment | 16,332 | 16,332 | ||||||||
100 | .1% | Total Investments | 1,090,917 | 2,136,871 | ||||||||
8 | .0% | Collateral Invested for Securities on Loan | 171,240 | 171,240 | ||||||||
(8 | .1)% | Other Assets and Liabilities, Net | (172,222 | ) | ||||||||
100 | .0% | Net Assets | 2,135,889 |
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Common Stock 99.1% of net assets | ||||||||||
Australia 5.2% | ||||||||||
BHP Billiton Ltd. | 561,860 | 1.1 | 24,466 | |||||||
Commonwealth Bank of Australia | 208,546 | 0.6 | 12,011 | |||||||
Other Securities | 3.5 | 74,524 | ||||||||
5.2 | 111,001 | |||||||||
Austria 0.1% | ||||||||||
Other Securities | 0.1 | 2,714 | ||||||||
Belgium 1.2% | ||||||||||
Fortis NPV | 358,772 | 0.5 | 11,522 | |||||||
Other Securities | 0.7 | 13,935 | ||||||||
1.2 | 25,457 | |||||||||
Canada 7.3% | ||||||||||
Manulife Financial Corp. | 248,015 | 0.5 | 11,602 | |||||||
Royal Bank of Canada | 208,629 | 0.6 | 12,377 | |||||||
Other Securities | 6.2 | 131,945 | ||||||||
7.3 | 155,924 | |||||||||
Denmark 0.6% | ||||||||||
Other Securities | 0.6 | 12,895 | ||||||||
Finland 1.6% | ||||||||||
Nokia Oyj | 653,383 | 1.2 | 25,949 | |||||||
Other Securities | 0.4 | 8,785 | ||||||||
1.6 | 34,734 | |||||||||
France 10.6% | ||||||||||
Axa (a) | 294,219 | 0.6 | 13,215 | |||||||
BNP Paribas | 132,707 | 0.7 | 14,708 | |||||||
Sanofi-Aventis | 159,066 | 0.7 | 13,992 | |||||||
Suez S.A. | 210,302 | 0.6 | 13,721 | |||||||
Total S.A. (a) | 391,245 | 1.5 | 31,572 | |||||||
Other Securities | 6.5 | 138,312 | ||||||||
10.6 | 225,520 | |||||||||
Germany 8.8% | ||||||||||
Allianz SE-Reg’d | 73,400 | 0.8 | 16,528 | |||||||
BASF AG | 81,412 | 0.5 | 11,271 | |||||||
DaimlerChrysler AG - Reg’d | 171,504 | 0.9 | 18,763 | |||||||
Deutsche Bank AG – Reg’d (a) | 85,135 | 0.5 | 11,320 | |||||||
E.ON AG | 113,017 | 1.0 | 22,095 | |||||||
Siemens AG - Reg’d | 148,578 | 0.9 | 20,147 | |||||||
Other Securities | 4.2 | 87,953 | ||||||||
8.8 | 188,077 | |||||||||
Greece 0.3% | ||||||||||
Other Securities | 0.3 | 6,483 | ||||||||
Hong Kong 1.2% | ||||||||||
Other Securities | 1.2 | 25,940 | ||||||||
Ireland 0.6% | ||||||||||
Other Securities | 0.6 | 11,807 | ||||||||
Italy 3.7% | ||||||||||
Eni S.p.A. | 409,247 | 0.7 | 14,943 | |||||||
Intesa Sanpaolo S.p.A. | 1,516,907 | 0.6 | 12,034 | |||||||
UniCredito Italiano S.p.A. | 1,999,127 | 0.8 | 17,197 | |||||||
Other Securities | 1.6 | 35,760 | ||||||||
3.7 | 79,934 | |||||||||
Japan 15.1% | ||||||||||
Mitsubishi UFJ Financial Group, Inc. | 1,632,070 | 0.8 | 16,331 | |||||||
Nintendo Co., Ltd. | 18,239 | 0.5 | 11,583 |
See financial notes 57
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Sumitomo Mitsui Financial Group, Inc. | 1,436 | 0.5 | 11,763 | |||||||
Toyota Motor Corp. | 451,003 | 1.2 | 25,817 | |||||||
Other Securities | 12.1 | 257,722 | ||||||||
15.1 | 323,216 | |||||||||
Luxembourg 0.5% | ||||||||||
Other Securities | 0.5 | 10,063 | ||||||||
Netherlands 3.3% | ||||||||||
ING Groep N.V. - CVA | 360,281 | 0.8 | 16,284 | |||||||
Other Securities | 2.5 | 54,590 | ||||||||
3.3 | 70,874 | |||||||||
Norway 0.6% | ||||||||||
Other Securities | 0.6 | 13,491 | ||||||||
Portugal 0.4% | ||||||||||
Other Securities | 0.4 | 8,417 | ||||||||
Singapore 0.5% | ||||||||||
Other Securities | 0.5 | 11,406 | ||||||||
Spain 4.6% | ||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 585,315 | 0.7 | 14,813 | |||||||
Banco Santander Central Hispano S.A. | 1,035,917 | 1.1 | 22,655 | |||||||
Telefonica S.A. | 810,211 | 1.3 | 26,827 | |||||||
Other Securities | 1.5 | 33,135 | ||||||||
4.6 | 97,430 | |||||||||
Sweden 1.8% | ||||||||||
Other Securities | 1.8 | 38,520 | ||||||||
Switzerland 7.1% | ||||||||||
ABB Ltd. - Reg’d | 375,699 | 0.5 | 11,358 | |||||||
Credit Suisse Group - Reg’d | 201,032 | 0.6 | 13,585 | |||||||
Nestle S.A. - Reg’d | 65,630 | 1.4 | 30,313 | |||||||
Novartis AG - Reg’d | 447,192 | 1.1 | 23,788 | |||||||
Roche Holding AG - Genusschein | 115,224 | 0.9 | 19,681 | |||||||
UBS AG - Reg’d | 342,352 | 0.9 | 18,354 | |||||||
Other Securities | 1.7 | 34,319 | ||||||||
7.1 | 151,398 | |||||||||
United Kingdom 23.1% | ||||||||||
Anglo American plc | 218,499 | 0.7 | 15,198 | |||||||
AstraZeneca plc | 245,264 | 0.6 | 12,078 | |||||||
Barclays plc | 1,071,184 | 0.6 | 13,557 | |||||||
BHP Billiton plc | 385,794 | 0.7 | 14,816 | |||||||
BP plc | 3,155,561 | 1.9 | 41,054 | |||||||
GlaxoSmithKline plc | 941,879 | 1.1 | 24,193 | |||||||
HSBC Holdings plc | 1,921,805 | 1.8 | 38,103 | |||||||
Iberdrola S.A. | 819,620 | 0.6 | 13,222 | |||||||
Rio Tinto plc | 167,659 | 0.7 | 15,722 | |||||||
Royal Bank of Scotland Group plc | 1,626,109 | 0.8 | 17,562 | |||||||
Royal Dutch Shell plc, Class A | 588,320 | 1.2 | 25,813 | |||||||
Royal Dutch Shell plc, Class B | 454,943 | 0.9 | 19,849 | |||||||
Tesco plc | 1,290,117 | 0.6 | 13,124 | |||||||
Vodafone Group plc | 8,644,390 | 1.6 | 34,064 | |||||||
Other Securities | 9.3 | 194,322 | ||||||||
23.1 | 492,677 | |||||||||
United States 0.9% | ||||||||||
iShares MSCI EAFE Index Fund | 200,000 | 0.8 | 17,236 | |||||||
Other Securities | 0.1 | 1,564 | ||||||||
0.9 | 18,800 | |||||||||
Total Common Stock (Cost $1,072,683) | 2,116,778 | |||||||||
Preferred Stock 0.2% of net assets | ||||||||||
Germany 0.2% | ||||||||||
Other Securities | 0.2 | 3,761 | ||||||||
Total Preferred Stock (Cost $1,902) | 3,761 | |||||||||
Security | Face Amount | % of Net | Value | |||||||
Rate, Maturity Date | ($ x 1,000) | Assets | ($ x 1,000) | |||||||
Short-Term Investment 0.8% of net assets | ||||||||||
Wells Fargo, Grand Cayman Time Deposit 4.75%, 11/01/07 | 16,332 | 0.8 | 16,332 | |||||||
Total Short-Term Investments (Cost $16,332) | 16,332 | |||||||||
End of Investments. | ||||||||||
Security and Number | % of Net | Value | ||||||||
of Shares | Assets | ($ x 1,000) | ||||||||
Collateral Invested for Securities on Loan 8.0% of net assets | ||||||||||
Securities Lending Invesments Fund, a series of the Brown Brothers Investment Trust | 171,239,558 | 8.0 | 171,240 | |||||||
End of collateral invested for securities on loan. |
58 See financial notes
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
At 10/31/07 the tax basis cost of the fund’s investments was $1,106,071, and the unrealized appreciation and depreciation were $1,060,276 and ($29,476), respectively, with a net unrealized appreciation of $1,030,800. | ||||||||||
At 10/31/07, the values of certain foreign securities held by the fund aggregating $1,940,391 were adjusted from their closing market values following the guidelines adopted by the fund’s Board of Trustees. |
* | Non-income producing security. Please see complete schedule of holdings. | |
(a) | All or a portion of this security is on loan. | |
(b) | Fair-valued by Management. Please see complete schedule of holdings. |
See financial notes 59
Table of Contents
Schwab International Index Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value including securities on loan of $163,356 (cost $1,090,917) | $2,136,871 | |||||
Collateral invested for securities on loan | 171,240 | |||||
Receivables: | ||||||
Dividends | 3,516 | |||||
Fund shares sold | 2,291 | |||||
Reclaims | 431 | |||||
Income from securities on loan | 186 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 8 | ||||
Total assets | 2,314,545 | |||||
Liabilities | ||||||
Collateral invested for securities on loan | 171,240 | |||||
Payables: | ||||||
Investments bought | 6,347 | |||||
Investment adviser and administrator fees | 110 | |||||
Transfer agent and shareholder services fees | 24 | |||||
Fund shares redeemed | 804 | |||||
Accrued expenses | + | 131 | ||||
Total liabilities | 178,656 | |||||
Net Assets | ||||||
Total assets | 2,314,545 | |||||
Total liabilities | − | 178,656 | ||||
Net assets | $2,135,889 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,287,066 | |||||
Net investment income not yet distributed | 27,472 | |||||
Net realized capital losses | (224,632 | ) | ||||
Net unrealized capital gains | 1,045,983 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $871,512 | 33,622 | $25.92 | ||||||||
Select Shares | $1,264,377 | 48,729 | $25.95 |
60 See financial notes
Table of Contents
Schwab International Index Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (net of $4,844 foreign withholding tax) | $51,230 | |||||
Interest | 519 | |||||
Securities on loan | + | 1,389 | ||||
Total Investment Income | 53,138 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 36,172 | |||||
Net realized gains on foreign currency translations | + | 143 | ||||
Net realized gains | 36,315 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 363,697 | |||||
Net unrealized gains on foreign currency translations | + | 19 | ||||
Net unrealized gains | 363,716 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 7,366 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 1,946 | |||||
Select Shares | 1,094 | |||||
Custodian fees | 423 | |||||
Registration fees | 108 | |||||
Portfolio accounting fees | 108 | |||||
Shareholder reports | 76 | |||||
Professional fees | 48 | |||||
Trustees’ fees | 15 | |||||
Other expenses | + | 13 | ||||
Total expenses | 11,197 | |||||
Expense reduction by adviser and Schwab | − | 387 | ||||
Net expenses | 10,810 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 53,138 | |||||
Net expenses | − | 10,810 | ||||
Net investment income | 42,328 | |||||
Net realized gains | 36,315 | |||||
Net unrealized gains | + | 363,716 | ||||
Increase in net assets from operations | $442,359 |
See financial notes 61
Table of Contents
Schwab International Index Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $42,328 | $38,610 | ||||||
Net realized gains | 36,315 | 36,595 | ||||||
Net unrealized gains | + | 363,716 | 278,207 | |||||
Increase in net assets from operations | 442,359 | 353,412 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 20,568 | 12,022 | ||||||
Select Shares | + | 29,711 | 17,265 | |||||
Total distributions from net investment income | $50,279 | $29,287 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 6,551 | $149,920 | 5,781 | $111,778 | ||||||||||||||
Select Shares | + | 8,448 | 193,668 | 7,746 | 148,437 | |||||||||||||
Total shares sold | �� | 14,999 | $343,588 | 13,527 | $260,215 | |||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 875 | $18,798 | 619 | $11,010 | ||||||||||||||
Select Shares | + | 1,257 | 26,990 | 882 | 15,675 | |||||||||||||
Total shares reinvested | 2,132 | $45,788 | 1,501 | $26,685 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (7,214 | ) | ($164,681 | ) | (7,861 | ) | ($150,978 | ) | ||||||||||
Select Shares | + | (6,076 | ) | (140,165 | ) | (8,930 | ) | (171,954 | ) | |||||||||
Total shares redeemed | (13,290 | ) | ($304,846 | ) | (16,791 | ) | ($322,932 | ) | ||||||||||
Net transactions in fund shares | 3,841 | $84,530 | (1,763 | ) | ($36,032 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 78,510 | $1,659,279 | 80,273 | $1,371,186 | ||||||||||||||
Total increase or decrease | + | 3,841 | 476,610 | (1,763 | ) | 288,093 | ||||||||||||
End of period | 82,351 | $2,135,889 | 78,510 | $1,659,279 | ||||||||||||||
Net investment income not yet distributed | $27,472 | $34,946 |
62 See financial notes
Table of Contents
Schwab Equity Index Fund
Financial Notes
1. Business Structure of the Funds
Each of the fund’s discussed in this report is a series of Schwab Capital Trust, except for 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. The trusts are organized as a Massachusetts business trust and are registered under the Investment Company Act of 1940 (the “1940 Act”), as amended. The list below shows all the funds in each trust including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) Schwab S&P 500 Index Fund Schwab Institutional Select S&P 500 Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index Fund Schwab MarketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Laudus U.S. MarketMasters Fund Laudus Small-Cap MarketMasters Fund Laudus International MarketMasters Fund Schwab Viewpoints Fund Schwab Premier Equity Fund Schwab Core Equity Fund Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Financial Services Fund Schwab Health Care Fund Schwab Technology Fund Schwab Target 2010 Fund Schwab Target 2020 Fund Schwab Target 2030 Fund Schwab Target 2040 Fund Schwab Retirement Income Fund Schwab Fundamental US Large Company Index Fund Schwab Fundamental US Small-Mid Company Index Fund Schwab Fundamental International Large Company Index Fund | Schwab Investments (organized October 26, 1990) Schwab 1000 Index Fund Schwab YieldPlus Fund Schwab Short-Term Bond Market Fund Schwab Total Bond Market Fund Schwab GNMA Fund Schwab Inflation Protected Fund Schwab Tax-Free YieldPlus Fund Schwab Tax-Free Bond Fund Schwab California Tax-Free YieldPlus Fund Schwab California Tax-Free Bond Fund Schwab Global Real Estate Fund | |
The Schwab Equity Index Funds, with the exception of Schwab Institutional Select S&P 500 Fund, offer multiple share classes. Shares of each class represent interest in the same portfolio, but each class has different expenses and investment minimums. The e.Shares® are available only to clients of Schwab Institutional®, Charles Schwab Trust Company and certain tax-advantaged retirement plans, and can only be traded electronically. Schwab S&P 500 Index Fund offers three classes of shares: Investor Shares, Select Shares® and e.Shares®. Schwab 1000 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Market Index Fund and Schwab International Index Fund each offer two classes of shares: Investor Shares and Select Shares®. Schwab Institutional Select S&P 500 Fund offers one share class.
Shares are bought and sold at net asset value, or NAV, which is the price for all outstanding shares. Each share has a par value of 1/1,000 of a cent, and the trustees may authorize the issuance of as many shares as necessary.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds used in the preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America.
63
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Schwab Equity Index Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and asked quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the current exchange rate. | |
• | Securities for which no quoted value is available or when a significant event has occurred between the time of the security’s last close and the time the fund calculates net asset value: valued at fair value, as determined in good faith by the funds’ investment adviser using guidelines adopted by the funds’ Board of Trustees and the Pricing Committee. Some of the more common reasons that may necessitate that a security be valued at fair value include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; the security’s primary pricing source is not able or willing to provide a price, or certain foreign securities’ closing market values adjusted for changes in value that may occur between the close of a foreign exchange and the time at which a Fund’s shares are priced. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. | |
• | Futures and forward currency contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a market value based on that day’s exchange rates (for forwards). When a fund closes out a futures or forwards position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost. | |
• | Mutual funds: valued at their respective net asset values as determined by those funds in accordance with the 1940 Act for a given day. |
(b) Portfolio Investments:
Futures Contract: The funds may invest in futures contracts. Futures contracts involve certain risks because they can be very sensitive to market movements.
One risk is that the price of a futures contract may not move in perfect correlation with the price of the underlying securities. Another risk is that, at certain times, it may be impossible for a fund to close out a position in a futures contract, due to a difference in trading hours or to market conditions that may reduce the liquidity for a futures contract or its underlying securities. The potential for losses associated with futures contracts may exceed amounts recorded in the Statement of Assets and Liabilities.
Because futures contracts carry inherent risks, a fund must give the broker a deposit of cash and/or securities (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another, but it is generally a percentage of the contract amount.
Futures are traded publicly on exchanges, and their market value changes daily. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to / from broker”).
Forward Currency Contract: The Schwab International Index Fund may invest in forward currency contracts in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates. “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. Forwards are similar to futures except that they are not publicly traded, but are agreements directly between two parties.
As with futures, forwards involve certain risks that are not fully reflected in the fund’s financials. If counter-parties to the contracts or if the value of the foreign currency changes unfavorably, the fund could sustain a loss.
Repurchase Agreements: The funds may enter into repurchase agreements. In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. The date, price and other conditions are all specified when the agreement is created.
64
Table of Contents
Schwab Equity Index Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Each funds’ repurchase agreements will be fully collateralized by U.S. government securities. All collateral is held by the funds’ custodian (or, with tri-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement.
Securities Lending: The funds may loan securities to certain brokers, dealers and other financial institutions that pay the funds negotiated fees. The funds receive cash, letters of credit or U.S. Government securities as collateral on these loans. All of the cash collateral received is reinvested in high quality, short-term investments. The value of the collateral must be at least 102% of the market value of the loaned securities as of the first day of the loan, and at least 100% each day thereafter. If the value of the collateral falls below 100%, it will be adjusted the following day.
(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.
(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.
(e) Expenses:
Expenses that are specific to a fund or a class are charged directly to that fund or class. Expenses that are common to all funds within the trusts 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 its net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains once a year.
(g) Custody Credit:
Each fund has an arrangement with its custodian bank under which the fund receives a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts (if any) are disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform with accounting principles generally accepted in the United States of America. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates.
(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.
65
Table of Contents
Schwab Equity Index Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes.
(j) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
(k) New Accounting Standards:
Financial Accounting Standards Board Interpretation (FIN) No. 48 — Accounting for Uncertainty in Income Taxes — an Interpretation of SFAS No. 109, was issued in July 2006 and is effective for fiscal years beginning after December 15, 2006. This Interpretation provides new requirements for the recognition, measurement, and disclosure in the financial statements of a tax position taken or expected to be taken in a tax return when there is uncertainty about whether that tax position will ultimately be sustained. A fund with a fiscal year ending October 31 will implement FIN 48 no later than April 30, 2008 and it will apply to all open tax years. Management is currently evaluating the impact of adopting FIN 48, and at this time, believes that the adoption will have no material impact on the funds’ financial statements.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management is currently evaluating the impact of adopting SFAS No. 157 on the funds’ financial statements.
3. | Affiliates and Affiliated Transactions: |
(All dollar amounts are x 1,000)
Charles Schwab Investment Management, Inc. (CSIM or the investment adviser), a wholly owned subsidiary of The Charles Schwab Corporation, serves as each funds’ investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement (Advisory Agreement) between it and the trusts.
For its advisory and administrative services to each fund, the investment adviser is entitled to receive an annual fee payable monthly based on the fund’s average daily net assets described as follows:
Institutional | Total Stock | |||||||||||||||||||||||
S&P 500 | Select | 1000 | Small-Cap | Market | International | |||||||||||||||||||
Average daily net assets | Index Fund | S&P 500 Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||||
First $500 million | 0.15% | 0.15% | 0.30% | 0.33% | 0.30% | 0.43% | ||||||||||||||||||
$500 million to $5 billion | 0.09% | 0.09% | 0.22% | 0.28% | 0.22% | 0.38% | ||||||||||||||||||
$5 billion to $10 billion | 0.08% | 0.08% | 0.20% | 0.28% | 0.22% | 0.38% | ||||||||||||||||||
Over $10 billion | 0.07% | 0.07% | 0.18% | 0.28% | 0.22% | 0.38% |
Charles Schwab & Co., Inc. (“Schwab”) is an affiliate of the investment adviser and is the trusts’ transfer agent and shareholder services agent.
66
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Schwab Equity Index Fund
Financial Notes (continued)
3. | Affiliates and Affiliated Transactions (continued): (All dollar amounts are x 1,000) |
For its transfer agent and shareholder services, Schwab is entitled to receive an annual fee payable monthly based on each funds’ average daily net assets described as follows:
Transfer Agent Fees | Shareholder Service Fees | |||||||
Investor Shares | 0.05% | 0.20% | ||||||
Select Shares | 0.05% | 0.05% | ||||||
e. Shares* | 0.05% | 0.05% | ||||||
Institutional Select Shares | 0.05% | 0.05% |
* | e.Shares is only offered by S&P 500 Index Fund |
Although these agreements specify certain fees for these services, CSIM and Schwab have made additional agreements with the funds to limit the total expenses charged, excluding interest, taxes and certain non-routine expenses, through February 27, 2008, as follows:
Institutional | Total Stock | |||||||||||||||||||||||
S&P 500 | Select | 1000 | Small-Cap | Market | International | |||||||||||||||||||
Index Fund | S&P 500 Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||||||
Investor Shares | 0.37% | n/a | 0.51% | 0.60% | 0.58% | 0.69% | ||||||||||||||||||
Select Shares | 0.19% | n/a | 0.36% | 0.42% | 0.39% | 0.50% | ||||||||||||||||||
e.Shares* | 0.28% | n/a | n/a | n/a | n/a | n/a | ||||||||||||||||||
Institutional Select Shares | n/a | 0.10% | n/a | n/a | n/a | n/a |
* | e.Shares is only offered by S&P 500 Index Fund |
The funds may engage in certain transactions involving related parties. For instance, a fund may own shares of The Charles Schwab Corporation if that company is included in its index. The funds also may let other Schwab Funds buy and sell fund shares, particularly Schwab MarketTrack Portfolios, which seek to provide investors with allocated portfolios of Schwab Index funds. As of October 31, 2007, the percentages of fund shares owned by other Schwab Funds are:
Institutional | Total Stock | |||||||||||||||||||||||
S&P 500 | Select | 1000 | Small-Cap | Market | International | |||||||||||||||||||
Index Fund | S&P 500 Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||||||
Schwab MarketTrack Portfolios: | ||||||||||||||||||||||||
All Equity Portfolio | — | 9.4% | — | 9.6% | — | 9.8% | ||||||||||||||||||
Growth Portfolio | — | 6.7% | — | 9.2% | — | 7.9% | ||||||||||||||||||
Balanced Portfolio | — | 3.2% | — | 5.0% | — | 4.4% | ||||||||||||||||||
Conservative Portfolio | 0.6% | 0.1% | — | 2.0% | — | 1.8% | ||||||||||||||||||
Schwab Annuity Portfolios: | ||||||||||||||||||||||||
Growth Portfolio II | — | 0.4% | — | 0.6% | — | 0.5% |
The funds may make direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and officers. As of October 31, 2007, the funds’ total security transactions with other Schwab Funds were as follows:
S&P 500 Index Fund | $16,789 | |||
Institutional Select S&P 500 Fund | 85,870 | |||
1000 Index Fund | 245,663 | |||
Small-Cap Index Fund | 139,149 | |||
Total Stock Market Index Fund | 1,394 | |||
International Index Fund | 6,124 |
67
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Schwab Equity Index Fund
Financial Notes (continued)
3. | Affiliates and Affiliated Transactions (continued): (All dollar amounts are x 1,000) |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions within the Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. There was no interfund borrowing or lending activity for any funds during the period.
Trustees
Trustees may include people who are officers and/or directors of the investment adviser or Schwab. Federal securities law limit the percentage of such “interested persons” who may serve on a trust’s board, and the trusts were in compliance with these limitations throughout the report period. The trusts did not pay any of these persons for their service as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
4. Borrowing from Banks:
The funds may borrow money from banks and custodians. The funds may obtain temporary bank loans through the trusts to which they belong, to use for meeting shareholder redemptions or for extraordinary or emergency purposes. The Schwab Funds have custodian overdraft facilities and uncommitted line of credit arrangements of $150 million and $100 million with State Street Corporation and Bank of America, N.A., respectively. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. There were no borrowings from the line of credit for the funds during the period.
5. | Purchases and Sales of Investment Securities: |
(All dollar amounts are x 1,000)
For the fiscal year ended October 31, 2007, purchases and sales of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
S&P 500 Index Fund | $132,402 | 348,936 | ||||||
Institutional Select S&P 500 Fund | 772,934 | 19,581 | ||||||
1000 Index Fund | 450,668 | 743,557 | ||||||
Small-Cap Index Fund | 554,258 | 522,159 | ||||||
Total Stock Market Index Fund | 70,056 | 9,530 | ||||||
International Index Fund | 183,007 | 100,765 |
6. | Redemption Fee: |
(All dollar amounts are x 1,000)
The funds may impose a short-term redemption fee on any fund shares that are redeemed or exchanged by a shareholder within a specified number of days of the purchase date. The funds charge 2.00% of early withdrawal fees on shares redeemed or
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Schwab Equity Index Fund
Financial Notes (continued)
6. | Redemption Fee (continued): (All dollar amounts are x 1,000) |
exchanged 30 days or less after the purchase. The redemption amounts are net of the redemption fee proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the current and prior fiscal year are:
Current Period | Prior Period | |||||||
(11/01/06 — 10/31/07) | (11/01/05 — 10/31/06) | |||||||
S&P 500 Index Fund | ||||||||
Investor Shares | $109 | $57 | ||||||
Select Shares | 85 | 60 | ||||||
e.Shares | 4 | 2 | ||||||
Institutional Select S&P 500 Fund | 49 | 31 | ||||||
1000 Index Fund | ||||||||
Investor Shares | 90 | 87 | ||||||
Select Shares | 41 | 22 | ||||||
Small-Cap Index Fund | ||||||||
Investor Shares | 19 | 19 | ||||||
Select Shares | 3 | 5 | ||||||
Total Stock Market Index Fund | ||||||||
Investor Shares | 18 | 15 | ||||||
Select Shares | 29 | 28 | ||||||
International Index Fund | ||||||||
Investor Shares | 24 | 18 | ||||||
Select Shares | 29 | 63 |
7. | Federal Income Taxes: |
(All dollar amounts are x 1,000)
As of October 31, 2007, the components of distributable earnings on a tax-basis were as follows:
Institutional | Total Stock | |||||||||||||||||||||||
S&P 500 | Select | 1000 | Small-Cap | Market | International | |||||||||||||||||||
Index Fund | S&P 500 Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||||||
Undistributed ordinary income | $110,914 | $41,335 | $80,150 | $22,162 | $16,259 | $39,603 | ||||||||||||||||||
Undistributed long-term capital gains | — | — | 5,020 | 241,226 | 3,523 | — | ||||||||||||||||||
Unrealized appreciation | 3,608,096 | 605,643 | 4,299,861 | 468,572 | 573,253 | 1,060,276 | ||||||||||||||||||
Unrealized depreciation | (389,090 | ) | (77,624 | ) | (102,476 | ) | (140,788 | ) | (84,921 | ) | (29,476 | ) | ||||||||||||
Other unrealized appreciation/(depreciation) | — | — | — | — | — | 29 | ||||||||||||||||||
Net unrealized appreciation/(depreciation) | 3,219,006 | 528,019 | 4,197,385 | 327,784 | 488,332 | 1,030,829 | ||||||||||||||||||
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 carry forwards may be used to offset future realized capital gains for federal income tax purposes.
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Schwab Equity Index Fund
Financial Notes (continued)
7. | Federal Income Taxes (continued): (All dollar amounts are x 1,000) |
As of October 31, 2007, the following funds had capital loss carry forwards available to offset net capital gains before the expiration dates:
Institutional | Total Stock | |||||||||||||||||||||||
S&P 500 | Select | 1000 | Small-Cap | Market | International | |||||||||||||||||||
Expire | Index Fund | S&P 500 Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||||
2009 | $7,194 | $6,440 | $— | $— | $— | $61,592 | ||||||||||||||||||
2010 | 400,268 | 27,646 | — | — | — | 112,722 | ||||||||||||||||||
2011 | 72,381 | 1,609 | — | — | — | 39,016 | ||||||||||||||||||
2012 | 29,212 | — | — | — | — | 8,278 | ||||||||||||||||||
2013 | 175,896 | — | — | — | — | — | ||||||||||||||||||
2014 | 109,257 | 2,359 | — | — | — | — | ||||||||||||||||||
Total | $794,208 | $38,054 | $— | $— | $— | $221,608 | ||||||||||||||||||
As of October 31, 2007, the capital losses carried from prior years were utilized to offset current year’s capital gains as follows:
Institutional | Total Stock | |||||||||||||||||||||||
S&P 500 | Select | 1000 | Small-Cap | Market | International | |||||||||||||||||||
Index Fund | S&P 500 Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||||||
Capital losses utilized | $69,534 | $10,467 | $308,636 | $— | $13,418 | $36,036 |
The tax-basis components of distributions paid during the current and prior fiscal years were:
Institutional | Total Stock | |||||||||||||||||||||||
S&P 500 | Select | 1000 | Small-Cap | Market | International | |||||||||||||||||||
Index Fund | S&P 500 Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||
Ordinary income | $129,803 | $32,922 | $92,244 | $63,308 | $17,534 | $50,279 | ||||||||||||||||||
Long-term capital gains | — | — | — | 145,856 | — | — | ||||||||||||||||||
Return of capital | — | — | — | — | — | — | ||||||||||||||||||
Prior period distributions | ||||||||||||||||||||||||
Ordinary income | $129,338 | $18,249 | $86,881 | $11,211 | $15,301 | $29,287 | ||||||||||||||||||
Long-term capital gains | — | — | — | 10,495 | — | — | ||||||||||||||||||
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; paydowns on fixed-income 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 each fund for financial reporting purposes. Each fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
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Schwab Equity Index Fund
Financial Notes (continued)
7. | Federal Income Taxes (continued): (All dollar amounts are x 1,000) |
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2007, the funds made the following reclassifications:
Institutional | Total Stock | |||||||||||||||||||||||
S&P 500 | Select | 1000 | Small-Cap | Market | International | |||||||||||||||||||
Index Fund | S&P 500 Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||||||
Capital shares | $(1 | ) | $— | $(380 | ) | $(607 | ) | $— | $— | |||||||||||||||
Undistributed net investment income | (1,050 | ) | (249 | ) | (1,595 | ) | (2,106 | ) | (705 | ) | 477 | |||||||||||||
Net realized capital gains and losses | 1,051 | 249 | 1,975 | 2,713 | 705 | (477 | ) |
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab S&P 500 Index Fund
Schwab Institutional Select S&P 500 Fund
Schwab 1000 Index Fund
Schwab Small-Cap Index Fund
Schwab Total Stock Market Index Fund
Schwab International Index Fund
Schwab S&P 500 Index Fund
Schwab Institutional Select S&P 500 Fund
Schwab 1000 Index Fund
Schwab Small-Cap Index Fund
Schwab Total Stock Market Index Fund
Schwab International Index Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab 1000 Index Fund (one of the portfolios constituting Schwab Investments), Schwab S&P 500 Index Fund, Schwab Institutional Select S&P 500 Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund (five of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the ‘Funds‘) at October 31, 2007, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as ‘financial statements‘) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 13, 2007
San Francisco, California
December 13, 2007
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Other Federal Tax Information (unaudited)
(All dollar amounts are x 1,000)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2007, qualify for the corporate dividends received deduction:
Percentage | ||||
S&P 500 Index Fund | 100.00 | |||
Institutional Select S&P 500 Fund | 94.97 | |||
1000 Index Fund | 100.00 | |||
Small-Cap Index Fund | 28.23 | |||
Total Stock Market Index Fund | 100.00 | |||
International Index Fund | — |
For the fiscal year ended October 31, 2007, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2008 via IRS form 1099 of the amounts for use in preparing their 2007 income tax return.
S&P 500 Index Fund | $129,803 | |||
Institutional Select S&P 500 Fund | 32,922 | |||
1000 Index Fund | 92,244 | |||
Small-Cap Index Fund | 10,026 | |||
Total Stock Market Index Fund | 17,534 | |||
International Index Fund | 38,719 |
The Schwab International Index Fund may elect to pass on the benefits of the foreign tax credit of $4,792 to its shareholders for the year ended October 31, 2007. The respective foreign source income on the Fund is $52,405.
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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 advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
Consistent with these responsibilities, 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 and Schwab Investments (collectively, the “Trusts”) and CSIM (the “Agreement”) with respect to existing funds in the Trusts, including the funds covered in this annual report, 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. 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 memo regarding the responsibilities of trustees for the approval of investment advisory contracts. 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 at meetings held on May 2, 2007, and June 5, 2007, and approved the renewal of the Agreement for an additional one year term at the meeting held on June 5, 2007. The Board’s approval of the Agreement 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 information considered by the Trustees included specific information concerning changes in the nature, extent and quality of services provided by CSIM since the Trustees had last considered approval of the Agreement. The Trustees also considered investments in CSIM’s mutual fund infrastructure and the fact that 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 CSIM’s top three ranking in an independent survey regarding mutual fund client loyalty, 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.
Fund Performance. The Board considered fund performance in determining whether to renew the Agreement. Specifically, the Trustees considered each fund’s performance
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relative to a peer group and peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, yield, when applicable, and market trends. As part of this review, the Trustees considered the composition of the peer group and peer category, selection criteria and the reputation of the third party who prepared the peer group and peer category analysis. In evaluating the performance of each fund, the Trustees considered both risk and shareholder risk expectations for such fund and the appropriateness of the benchmark used to compare the performance of each fund. The Trustees further considered the level of fund performance in the context of its review of fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the funds supported renewal of the Agreement.
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 other comparable 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 fees charged by CSIM to other mutual funds and to other types of accounts, such as wrap accounts, 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 Agreement.
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. The Board also considered information relating to changes to CSIM’s business operations and how these changes affected CSIM’s profitability under the Agreement. 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.
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 previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered existing contractual investment advisory fee schedules that include lower fees at higher graduated asset levels. The Board also considered certain existing commitments by CSIM and Schwab that are designed to pass along potential economies of scale to fund shareholders. 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, unanimously approved the continuation of the Agreement and concluded that the compensation under the Agreement 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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The tables below give information as of October 31, 2007, about the trustees and officers for The 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, and Laudus Trust. As of October 31, 2007, the Fund Complex included 70 funds.
The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Board 1—Director, Redwood Trust, Inc. Board 2—Director, PMI Group, Inc. | |||||
Donald F. Dorward 1931 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chief Executive Officer, Dorward & Associates (corporate management, marketing and communications consulting firm). From 1996-1999, Executive Vice President and Managing Director, Grey Advertising. Prior to 1996, President and Chief Executive Officer, Allen & Dorward Advertising. | 60 | None. | |||||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley. Until February 2004, Co-Chief Executive Officer, Aphton Corp. (bio-pharmaceuticals). | 70 | Board 1—Director, Mission West Properties Board 2—Director, TOUSA Board 3—Director, Harris-Stratex Networks Board 4—Director, Genitope Corp. Board 5—Director & Non-Executive Chairman, Solectron Corp. Board 6—Director, Ditech Networks | |||||
Robert G. Holmes 1931 (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, Semloh Financial, Inc. (international financial services and investment advisory firm). | 60 | None. | |||||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and founder of Smith Graham & Co.(investment advisors). | 60 | Board 1—Board of Cooper Industries Board 2—Chairman of the Audit Committee of Oneok Partners LP | |||||
Donald R. Stephens 1938 Trustee (Trustee of Schwab Capital Trust since 1989.) | Managing Partner, D. R. Stephens & Company (investments). | 60 | None. | |||||
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Independent Trustees continued | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Michael W. Wilsey 1943 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer, Wilsey Bennett, Inc. (real estate investment and management, and other investments). | 60 | None. | |||||
Interested Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served ) | Past Five Years | the Trustee | Other Directorships | |||||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc.; Chairman and Director, Charles 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 and Director, Schwab Holdings, Inc. Through June 2007, Director, U.S. Trust Company, N.A., U.S. Trust Company of New York. Until May 2003, Co-Chief Executive Officer, The Charles Schwab Corporation. | 60 | None | |||||
Randall W. Merk2 1954 Trustee (Trustee of Schwab Capital Trust since 2005.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | 70 | None. | |||||
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Officers of the Trust | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Randall W. Merk 1954 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2007.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer, Charles Schwab Investment Management, Inc.; Chief Financial Officer, Laudus Trust and Laudus Variable Insurance Trust; Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited. Through June 2007, Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust; Chief Financial Officer, Mutual Fund Division, UST Advisors, Inc. From December 1999 to November 2004, Sr. Vice President, Financial Reporting, Charles Schwab & Co. Inc. | |
Kimon Daifotis 1959 Senior Vice President and Chief Investment Officer-Fixed Income (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Fixed Income, Charles Schwab Investment Management, Inc. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Jeffrey Mortimer 1963 Senior Vice President and Chief Investment Officer-Equities (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Equities, Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer, Laudus Trust and Laudus Variable Insurance Trust. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Randall Fillmore 1960 Chief Compliance Officer and AML Officer (Officer of Schwab Capital Trust since 2002.) | Senior Vice President and Chief Compliance Officer, Charles Schwab Investment Management, Inc.; Senior Vice President, Charles Schwab & Co. Inc.; Chief Compliance Officer, Laudus Trust and Laudus Variable Insurance Trust. Through June 2007, Chief Compliance Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust. From 2002 to 2003, Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc. | |
Koji E. Felton 1959 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 1998.) | Senior Vice President, Chief Counsel and Corporate Secretary, Charles Schwab Investment Management, Inc.; Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. Through June 2007, Chief Legal Officer, Excelsior Funds Inc., Excelsior Tax Exempt Funds, Inc. and Excelsior Funds Trust. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust; since 2006, Chief Counsel, Laudus Trust and Variable Insurance Trust. Until July 2005, Senior Associate, Paul Hastings Janofsky & Walker LLP. | |
Cathy Sabo 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President-Compliance, Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust. Until 2004, Vice President, Client, Sales & Services Controls, Charles Schwab & Co., Inc. | |
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Officers of the Trust continued | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Michael Haydel 1970 Vice President (Officer of Schwab Capital Trust since 2006.) | Vice President, Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President and AML Officer, Laudus Trust and Laudus Variable Insurance Trust. Until March 2004, Director Charles Schwab & Co., Inc. | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after 20 years of service as a trustee, whichever comes first. Independent trustees elected prior to January 1, 2000 will retire on the following schedule: Messrs. Holmes and Dorward will retire on December 31, 2007, and Messrs. Stephens and Wilsey will retire on December 31, 2010. |
2 | In addition to their employment with the investment advisor and the distributor, Messrs. Schwab and Merk also own stock of The Charles Schwab Corporation. Mr. Schwab and Mr. Merk are Interested Trustees because they are employees of Schwab and/or the advisor. |
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 other officer serves at the pleasure of the Board. |
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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.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500T). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the “coupon rate”) until a specified date (the “maturity date”), at which time the issuer returns the money borrowed (“principal” or “face value”) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
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.
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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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 Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting Schwab’s website at www.schwab.com/schwabfunds, the SEC’s website at 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 Schwab’s website at www.schwab.com/schwabfunds or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fundtm
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 Technology Fundtm
Schwab Fundamental US Large Company Index Fundtm
Schwab Fundamental US Small-Mid Company Index Fundtm
Schwab Fundamental International Large Company Index Fundtm
Schwab Global Real Estate Fundtm
Schwab Institutional Select® S&P 500 Fund
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 Viewpoints Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
Bond Funds
Schwab YieldPlus Fund®
Schwab Short-Term Bond Market Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab Inflation Protected Fundtm
Schwab Tax-Free YieldPlus Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free YieldPlus Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity.1 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
Investment Adviser
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
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.
© 2006 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC
Printed on recycled paper.
MFR13810-10
Table of Contents
Table of Contents
Table of Contents
Annual report dated October 31, 2007 enclosed.
Schwab Fundamental Indextm Funds
Company Index Fundtm
Schwab Fundamental US Small-
Mid Company Index Fundtm
Schwab Fundamental
International Large Company
Index Fundtm
You could have received this
document faster via email.
Save paper. Sign up for electronic delivery
at www.schwab.com/edelivery.
Table of Contents
This wrapper is not part of the shareholder reports.
Coming Soon —
Schwab Fundamental Emerging Markets Index Fundtm
Schwab Fundamental International Small-Mid Company Index Fundtm
Schwab Funds® is expanding its innovative product line of Fundamental Index Funds to include two new funds – Schwab Fundamental Emerging Markets Index Fund and Schwab Fundamental International Small-Mid Company Index Fund.
These Funds are designed to leverage the groundbreaking research of Rob Arnott and his firm, Research Affiliates, to capture market performance in two key asset classes, emerging markets and international small/mid. The Funds will be passively managed and track the FTSE RAFI Indices that select and weight stocks based on four fundamental financial measures: sales, cash flows, book value and dividends.
Schwab Fundamental Index Funds provide access to an advanced indexing approach intended to offset the risks of cap-weighted indexes while offering the potential for higher investment returns and lower volatility.
Participate in the subscription offer:
Invest between January 11 and January 30, 2008 and take advantage of the $10 per share subscription price1. The Funds will commence operations on January 31, 2008.
Schwab Clients: Visit: www.schwab.com/fundamental Call: 877-796-6740 | Institutional Advisors: Visit: www.schwabinstitutional.com Call: 877-824-5615 |
Schwab Fundamental Emerging Markets Index Fund | ||||||||||
Minimum | Expense | |||||||||
Share Class | Symbol* | Initial Investment | Ratio2 | |||||||
Investor | SFEMX | $100 | .84% | |||||||
Select | SFESX | $50,000 | .69% | |||||||
Institutional | SFENX | $500,000 | .60% | |||||||
Schwab Fundamental International Small-Mid Company Index Fund | ||||||||||
Minimum | Expense | |||||||||
Share Class | Symbol* | Initial Investment | Ratio2 | |||||||
Investor | SFIVX | $100 | .79% | |||||||
Select | SFSMX | $50,000 | .64% | |||||||
Institutional | SFILX | $500,000 | .55% | |||||||
Investors should consider carefully information contained in the prospectus including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at (877) 796-6740. Please read the prospectus carefully before investing. Investment value and return will fluctuate such that shares, when redeemed, may be worth more or less than original cost.
International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks.
Historically, small-cap stocks have been more volatile than the stocks of larger, more-established companies.
1 | Subscription orders must be received in good form by 4 p.m. EDT on January 30, 2008. Orders received after that time will be invested at the next determined net asset value (NAV) after receipt and acceptance of the order by Schwab. Sufficient assets must be in your account by 9 a.m. EDT on January 30, 2008. If you do not have sufficient assets to meet the minimum initial investment requirement for the fund you have selected, your order will be canceled. You may reinstate your order by bringing a check to your local Schwab branch by 4 p.m. EDT on January 30, 2008. Share prices will fluctuate once operations commence on January 31, 2008. |
2 | Net OER guaranteed through February 27, 2009 (excluding interest, taxes and certain non-routine expenses). |
Schwab Funds is the exclusive FTSE RAFI Index Series provider of non-exchange traded passively managed equity mutual funds. The Fundamental Index, Fundamentals Weighted and RAFI trade names and patent-pending concept are the exclusive property of Research Affiliates, LLC and are used by Charles Schwab Investment Management under license through FTSE. FTSE, Rob Arnott and Research Affiliates, LLC are not affiliated with Charles Schwab & Co., Inc. and its affiliates, parents and subsidiaries.
*These symbols are for trading at Schwab and have not received final approval from NASDAQ.
©2007 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. (1207-8826)
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Schwab Fundamental Indextm Funds
Annual Report
October 31, 2007
Schwab Fundamental US Large
Company Index Fundtm
Schwab Fundamental US Small-
Mid Company Index Fundtm
Schwab Fundamental
International Large Company
Index Fundtm
Schwab Fundamental Indextm Funds
In This Report | ||
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2 | ||
3 | ||
4 | ||
6 | ||
8 | ||
10 | ||
12 | ||
13 | ||
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Select Shares® are available on many Schwab Funds®
Schwab Funds offers Select Shares, a share class that carries lower expenses than Investor Sharestm in exchange for higher investment minimums on many of its funds. Select Shares are available for initial purchases of $50,000 or more of a single fund in a single account and for shareholders who add to their existing Investor Share position, bringing the value to or above $50,000. We encourage shareholders of Investor Shares to review their portfolio to see if they are eligible to exchange into Select Shares. If you believe you are eligible, you should contact Schwab or your financial intermediary to request a tax-free interclass exchange into Select Shares. Instructions for performing a tax-free interclass exchange can also be referenced on the Schwab Funds website at www.schwab.com/schwabfunds under Schwab Funds Investor Information. Select Shares may not be available through financial intermediaries other than Charles Schwab & Co., Inc.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
The industry/sector classification of the funds’ portfolio holdings uses the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.
Table of Contents
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.schwab.com/schwabfunds.
Total Return for the Report Period* | ||
Schwab Fundamental US Large Company Index Fundtm | ||
Investor Shares (Ticker Symbol: SFLVX)** | 7.40% | |
Select Shares® (Ticker Symbol: SFLSX) | 7.40% | |
Institutional Shares (Ticker Symbol: SFLNX) | 7.50% | |
Benchmark: FTSE RAFI U.S. 1000 Index® | 7.45% | |
Fund Category: Morningstar Large-Cap Blend | 6.07% | |
Performance Details | pages 6-7 | |
Schwab Fundamental US Small-Mid Company Index Fundtm | ||
Investor Shares (Ticker Symbol: SFSVX) | 3.40% | |
Select Shares® (Ticker Symbol: SFSSX) | 3.50% | |
Institutional Shares (Ticker Symbol: SFSNX) | 3.60% | |
Benchmark: FTSE RAFI U.S. Mid Small 1500 Index® | 4.09% | |
Fund Category: Morningstar Small-Cap Blend | 3.44% | |
Performance Details | pages 8-9 | |
Schwab Fundamental International Large Company Index Fundtm | ||
Investor Shares (Ticker Symbol: SFNVX) | 13.70% | |
Select Shares® (Ticker Symbol: SFNSX) | 13.90% | |
Institutional Shares (Ticker Symbol: SFNNX) | 14.00% | |
Benchmark: FTSE RAFI Developed ex U.S. 1000 Index® | 15.43% | |
Fund Category: Morningstar Foreign Large-Cap Blend | 16.07% | |
Performance Details | pages 10-11 | |
Minimum Initial Investment1 | ||
Investor Shares | $ 100 | |
Select Shares | $ 50,000 | |
Institutional Shares | $500,000 | |
All fund and index figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and Schwab. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc.
*Not annualized. For the period 4/2/07 (commencement of operation) - 10/31/07.
**Return for the report period presented in the table differs from the return in the Financial Highlights. This is a result of the calculation of the Financial Highlights return adheering to GAAP presentation.
1 | Please see prospectus for further detail and eligibility requirements. |
Schwab Fundamental Index Funds 1
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From the Chairman
Charles Schwab
Chairman
Dear Shareholder,
I have been a fan of mutual funds throughout my long investing career. I say this because I firmly believe they are a cost-effective and convenient way for investors to achieve a diversified portfolio. And, as we face increasing uncertainty in global markets, diversification is as important now as it has ever been.
Research has indicated that spreading your money across, and equally important, within, different asset classes, such as stocks, bonds, and cash equivalents, can be the most important factor in determining overall portfolio performance. By maintaining diversification, your portfolio can be better positioned to help you weather the market ups and downs.
With a broad range of investment strategies and styles, Schwab Funds® provides an uncomplicated, effective way to build a well diversified portfolio. You can choose from an array of funds across a range of investment objectives and styles. If you prefer a single investment solution, we offer asset allocation funds based on either risk tolerance or time horizon.
Here at Schwab, our goal is to help you reach your financial goals. With quality funds and services, backed by the guidance and support you need—whatever type of investor you are—we can help you be financially fit today and in the future.
Thank you for investing with us.
Sincerely,
2 Schwab Fundamental Index Funds
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From the President
Randall W. Merk is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report. He joined the firm in 2002 and has held a variety of executive positions at Schwab.
Dear Shareholder,
In returning to my role as President and CEO of Charles Schwab Investment Management, I would like to thank you for investing in Schwab Funds® and share my thoughts with you on the current market environment.
The reemergence of volatility during this past year has shaken financial markets, both domestically and globally. Subprime mortgage market issues have caused a chain reaction throughout equity and credit markets, and investors are undoubtedly concerned about their financial outlook in the near future. As riskier securities came under pressure during this past August’s market correction, investors fled to “safer haven” investments, such as U.S. Treasuries.
Attempting to time the market in this way can be both a frustrating and risky experience. We have always believed your best protection against swings in market volatility is to maintain a well-diversified investment portfolio that is built to provide long-term performance.
Thank you for entrusting us with your investments. I speak for all of us at Schwab when I say our goal is to give you the financial products, guidance, and personal relationship you need to be financially fit.
Sincerely,
Schwab Fundamental Index Funds 3
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The Investment Environment
Jeffrey Mortimer, CFA, a senior vice president and chief investment officer, equities, has overall responsibility for the management of the funds.
During the past year, the global economy benefited from positive earnings growth, an ample supply of liquidity, and reasonably low volatility. Investors became increasingly bullish, and firms financed a record level of private equity buyouts, acquisitions, and stock buybacks. However, the housing market correction, and more recently, turmoil in the subprime mortgage market, has had a ripple effect throughout the U.S. and global economy. Several key issues continued to resonate with investors, including the deterioration of the housing market, the lagged effects of monetary policy, tightening of lending standards, and rising energy prices.
The U.S. economy grew at a sub-par pace during the early part of the report period, consistent with the Federal Reserve’s (the Fed’s) engineered soft landing. Throughout its statements, the Fed noted that the economy would grow at a more moderate rate as a result of prior rate increases, lagged effects of higher energy prices, and a cooling housing market. As any rate below 3% is generally considered to be sub-par, the economy appeared to be on a trend of underperformance. However, Gross Domestic Product (GDP) in the second and third quarter of 2007 surprised on the upside; 3.8% and an advanced 3.9%, respectively. Though consumer spending weighed heavily in recent improved GDP readings, tightening credit conditions and continued deterioration in the U.S. housing market remained imminent threats to household equity, a meaningful underpinning of consumer spending.
The housing market remained a significant headwind for U.S. economic growth during the report period. New- and existing-home sales trended downward, and inventories reached an alarming 10.5-month supply (existing homes) by September 2007. Initial concerns that troubles in the housing market would spill over to the rest of the economy became more pronounced, as declining housing starts and home sales caused builders and mortgage lenders to layoff thousands of employees. Delinquency rates on subprime mortgages and foreclosures on residential homes continued on an upward trend as well, further pushing back a recovery in an already weakened market.
The recent tightening of lending standards had a detrimental effect on economic growth as well. Though subprime mortgages were able to find their way into securitized structures via relaxed access to credit and ample liquidity, the increased frequency of defaults by subprime borrowers stressed securities holding these mortgages, leading to wider spreads and higher risk. Evidence that subprime issues had emerged became more pronounced after February’s spike in volatility, which only compounded throughout the report period. Liquidity in the market for these riskier securities essentially dried up after this recent summer’s market
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
10.16% | S&P 500® Index: measures U.S. large-cap stocks |
4.09% | Russell 2000® Index: measures U.S. small-cap stocks |
12.99% | MSCI-EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East |
3.23% | Lehman Brothers U.S. Aggregate Bond Index: measures the U.S. bond market |
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Charles Schwab & Co., Inc.
4 Schwab Fundamental Index Funds
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The Investment Environment continued
correction, putting financial institutions laden with subprime debt into financial turmoil. While the Fed helped improve liquidity issues at first by pumping money into the banking system and using the discount rate to reduce rates, many lenders reduced or cancelled altogether certain subprime lending programs.
Market volatility also had a significant impact on quantitative strategies in July and August of 2007. In a recent report by Lehman Brothers, it is believed that several large multi-strategy managers experienced significant losses in their fixed income portfolios. In order to raise cash to cover potential redemptions, and hesitant to price their now lower-valued portfolios, money managers sold their most liquid holdings in the U.S. equity market. As trades came into the market, the adverse effect that followed was that long positions declined and short positions rallied. The end result was that billions of dollars were turned over during this “quant squeeze,” leading to wider spreads and volatility in market prices.
The timing of recent turmoil in the financial markets partially stems from the fact that monetary policy typically acts with a lagged effect on the broader economy. While generally accepted that the effects of Fed rate hikes have a lag of between three and 18 months, it’s also believed that most of the effects can be seen around the twelfth month. Working back from February 2007’s correction in global markets, the Fed funds target rate was 4.25%, yet the Fed didn’t stop raising rates until June 2006, when it finally reached 5.25%. The 12-month lag, therefore, would indicate that subsequent rate hikes were finally hitting the market, as we saw during the recent summer months.
The Fed held its target for the Fed funds rate for most of the period at 5.25%. However, as conditions in the market progressively worsened, the Fed cut twice, bringing the target rate down to 4.50% by the end of the report period. Although it noted recent economic growth was solid and conditions in financial markets were markedly improved, it also expressed its concern that conditions in the housing market could hinder the economic expansion in the near term.
Against this backdrop of economic data, the market priced in future Fed rate cuts. The housing market showed little to no sign that a bottom is anywhere in the near future, labor markets faced continued downward pressures, and energy prices remained elevated. Oil reached all time highs over the year, closing out just above $96 a barrel as of the end of the report period. While the tax-like effect of higher energy prices, declining equity values in residential real estate, and the lag effect of monetary policy remained significant headwinds for the U.S. economy, the Fed’s recent response to a volatile market eased investor concern toward the end of the period.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Fundamental Index Funds 5
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Schwab Fundamental US Large Company
Index Fundtm
Index Fundtm
Larry Mano, managing director and portfolio manager is responsible for the day-to-day management of the fund.
The Schwab Fundamental Index Funds are designed to provide access to an innovative, academic-based indexing approach that offsets the risk of traditional cap-weighted index products while offering the potential for higher returns and lower volatility. Instead of selecting and weighting companies based on market capitalization, selection and weighting for the Fundamental Index series of indices is based on financial, price-indifferent measures of company size, such as book equity value, cash flows, sales and dividends.
Schwab Fundamental US Large Company Index Fund Investor Shares returned 7.40% for the period from inception (4/2/07) through the end of the report period. The fund seeks investment results that correspond generally (before fees and expenses) to the price and yield of the FTSE RAFI U.S. 1000 Index, which returned 7.45% for the period. The FTSE RAFI U.S. 1000 Index includes the largest listed companies incorporated in the United States, ranked by fundamental value. Unlike the fund, the index does not include operational and transaction costs. In addition, this discussion covers only seven months of performance. From an industry sector perspective, Information Technology, Resources, and General Industries appreciated the most. Better performing stocks included such names as Exxon Mobil Corp., Microsoft Corp., and Intel Corp. Sectors that appreciated the least included Finance, Cyclical Services, and Utilities. Positions in Citigroup Inc., Merrill Lynch & Co., Inc., and Countrywide Financial Corp. detracted from returns.
As of 10/31/07:
Style Assessment1
Statistics
Number of Holdings | 977 |
Weighted Average
Market Cap
($ x 1,000,000) | $94,367 |
Price/Earnings Ratio (P/E) | 21.3 |
Price/Book Ratio (P/B) | 2.6 |
Portfolio Turnover Rate2 | 2% |
Sector Weightings % of Investments
Financials | 19.7% |
Consumer Discretionary | 12.5% |
Consumer Staples | 11.6% |
Industrials | 11.3% |
Energy | 10.8% |
Information Technology | 10.3% |
Health Care | 9.0% |
Utilities | 6.5% |
Materials | 4.1% |
Telecommunication Services | 4.1% |
Other | 0.1% |
Total | 100.0% |
Top Holdings % Net Assets3
Exxon Mobil Corp. | 3.2% |
General Electric Co. | 3.0% |
Kraft Foods, Inc., Class A | 2.2% |
Microsoft Corp. | 1.9% |
Chevron Corp. | 1.8% |
Verizon Communications, Inc. | 1.7% |
Citigroup, Inc. | 1.6% |
Bank of America Corp. | 1.5% |
General Motors Corp. | 1.4% |
Wal-Mart Stores, Inc. | 1.3% |
Total | 19.6% |
Source of Sector Classification: S&P and MSCI.
Index ownership—“FTSE®” is trademark of The Financial Times Limited (“FT”) and the London Exchange Plc (the “Exchange”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of Research Affiliates LLC (“RA”). Schwab Fundamental US Large Company Index Fund is not sponsored, endorsed, sold or promoted by FTSE or RA, and FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | Not annualized. |
3 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Fundamental Index Funds
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Schwab Fundamental US Large Company Index Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Performance of a Hypothetical
$500,000 Investment in Institutional Shares1
$500,000 Investment in Institutional Shares1
Total Returns1,2,3
Fund Class and Inception Date | Since Inception | |||
Investor Shares (4/2/07) | 7.40% | |||
Select Shares (4/2/07) | 7.40% | |||
Institutional Shares (4/2/07) | 7.50% | |||
Benchmark: FTSE RAFI U.S. 1000 Index | 7.45% | |||
Fund Category: Morningstar Large-Cap Value | 6.07% |
Fund Expense Ratios4: Investor Shares: Net 0.59%; Gross 0.77% / Select Shares: Net 0.44%; Gross 0.62% / Institutional Shares: Net 0.35%; Gross 0.62%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | Not annualized. |
4 | As of 4/2/07 (amended on 7/2/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/09. Gross Expense: Does not reflect the effect of contractual fee waivers. |
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Schwab Fundamental US Small-Mid Company
Index Fundtm
Index Fundtm
Larry Mano, managing director and portfolio manager is responsible for the day-to-day management of the fund.
The Schwab Fundamental Index Funds are designed to provide access to an innovative, academic-based indexing approach that offsets the risk of traditional cap-weighted index products while offering the potential for higher returns and lower volatility. Instead of selecting and weighting companies based on market capitalization, selection and weighting for the Fundamental Index series of indices is based on financial, price-indifferent measures of company size, such as book equity value, cash flows, sales and dividends.
Schwab Fundamental US Small-Mid Company Index Fund Investor Shares returned 3.40% for the period from inception (4/2/07) through the end of the report period. The fund seeks investment results that correspond generally (before fees and expenses) to the price and yield of the FTSE RAFI U.S. Mid Small 1500 Index which returned 4.09% for the period. The FTSE RAFI U.S. Mid Small 1500 Index is composed of the small and medium sized companies incorporated in the United States, ranked by fundamental value. Unlike the fund, the index does not include operational and transaction costs. In addition, this discussion covers only seven months of performance. From a sector perspective, General Industries, Non Cyclical Services, and Resources appreciated the most during the report period. Positions in McDermott International, Inc., DryShips, Inc., and Diana Shipping, Inc. contributed to returns. Sectors that appreciated the least were Cyclical Consumer Goods, Cyclical Services, and Finance. Wellcare Health Plans, Inc., Westwood One, Inc., and Brookfield Homes Corp. were among those stocks that detracted from performance.
As of 10/31/07:
Style Assessment1
Statistics
Number of Holdings | 1289 |
Weighted Average
Market Cap
($ x 1,000,000) | $2,052 |
Price/Earnings Ratio (P/E) | 28.2 |
Price/Book Ratio (P/B) | 2.3 |
Portfolio Turnover Rate2 | 4% |
Sector Weightings % of Investments
Financials | 18.9% |
Industrials | 18.6% |
Consumer Discretionary | 16.6% |
Information Technology | 15.8% |
Health Care | 9.3% |
Energy | 8.1% |
Materials | 5.9% |
Consumer Staples | 2.9% |
Telecommunication Services | 2.2% |
Utilities | 1.5% |
Other | 0.2% |
Total | 100.0% |
Top Holdings % Net Assets3
Cabela’s, Inc. | 0.5% |
DryShips, Inc. | 0.4% |
Denbury Resources, Inc. | 0.4% |
Foster Wheeler Ltd. | 0.3% |
TransDigm Group, Inc. | 0.3% |
Terra Industries, Inc. | 0.3% |
McDermott International, Inc. | 0.3% |
CF Industries Holdings, Inc. | 0.3% |
Cypress Semiconductor Corp. | 0.3% |
Golden Telecom, Inc. | 0.3% |
Total | 3.4% |
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
Index ownership—“FTSE®” is trademark of The Financial Times Limited (“FT”) and the London Exchange Plc (the “Exchange”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of Research Affiliates LLC (“RA”). Schwab Fundamental US Small-Mid Company Index Fund is not sponsored, endorsed, sold or promoted by FTSE or RA, and FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | Not annualized. |
3 | 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-Mid Company Index Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Performance of a Hypothetical
$500,000 Investment in Institutional Shares1
$500,000 Investment in Institutional Shares1
Total Returns1,2,3
Fund Class and Inception Date | Since Inception | |||
Investor Shares (4/2/07) | 3.40% | |||
Select Shares (4/2/07) | 3.50% | |||
Institutional Shares (4/2/07) | 3.60% | |||
Benchmark: FTSE RAFI U.S. Mid Small 1500 Index | 4.09% | |||
Fund Category: Morningstar Small-Cap Blend | 3.44% |
Fund Expense Ratios4: Investor Shares: Net 0.59%; Gross 0.77% / Select Shares: Net 0.44%; Gross 0.62% / Institutional Shares: Net 0.35%; Gross 0.62%
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | Not annualized. |
4 | As of 4/2/07 (amended on 7/2/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/09. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Fundamental Index Funds 9
Table of Contents
Schwab Fundamental International Large Company
Index Fundtm
Index Fundtm
Larry Mano, managing director and portfolio manager is responsible for the day-to-day management of the fund.
The Schwab Fundamental Index Funds are designed to provide access to an innovative, academic-based indexing approach that offsets the risk of traditional cap-weighted index products while offering the potential for higher returns and lower volatility. Instead of selecting and weighting companies based on market capitalization, selection and weighting for the Fundamental Index series of indices is based on financial, price-indifferent measures of company size, such as book equity value, cash flows, sales and dividends.
Schwab Fundamental International Large Company Index Fund Investor Shares returned 13.70% for the period from inception (4/2/07) through the end of the report period. The fund seeks investment results that correspond generally (before fees and expenses) to the price and yield of the FTSE RAFI Developed ex U.S. 1000 Index which returned 15.43% for the period. The FTSE RAFI Developed ex U.S. 1000 Index consists of the largest 1000 listed companies incorporated outside the United States, ranked by fundamental value. Unlike the fund, the index does not include operational and transaction costs. In addition, this discussion covers only seven months of performance. For the report period, all sectors experienced positive returns, which benefited the fund. Within the fund, Hong Kong, Finland, and Canada were among the top contributors to total returns. Sectors that appreciated the most included Non Cyclical Services, Resources, and Cyclical Consumer Goods. Positions in Vodafone Group, China Mobile Ltd, and Royal Dutch Shell contributed to performance. While New Zealand and Switzerland were among those countries that appreciated the least during the report period, Japan and Ireland experienced negative returns. Stocks that detracted from performance included Royal Bank of Scotland Group, Toyota Motor Corp., and Barclays.
As of 10/31/07:
Style Assessment1
Country Weightings % of Investments
United Kingdom | 19.0% |
Japan | 18.5% |
France | 11.1% |
Germany | 10.1% |
Canada | 4.9% |
Italy | 4.7% |
Hong Kong | 4.1% |
Australia | 4.1% |
Switzerland | 3.8% |
Spain | 3.4% |
Netherlands | 3.2% |
Other Countries | 13.1% |
Total | 100.0% |
Statistics
Number of Holdings | 1011 |
Weighted Average
Market Cap
($ x 1,000,000) | $67,714 |
Price/Earnings Ratio (P/E) | 15.8 |
Price/Book Ratio (P/B) | 2.2 |
Portfolio Turnover Rate2 | 50% |
Sector Weightings % of Investments
Financials | 24.0% |
Consumer Discretionary | 13.2% |
Energy | 11.2% |
Industrials | 10.7% |
Telecommunication Services | 9.6% |
Consumer Staples | 7.3% |
Materials | 7.2% |
Utilities | 7.1% |
Information Technology | 3.9% |
Health Care | 3.0% |
Other | 2.8% |
Total | 100.0% |
Top Holdings % Net Assets3
BP plc | 2.1% |
iShares MSCI EAFE Index Fund | 1.9% |
Vodafone Group plc | 1.6% |
Royal Dutch Shell plc, Class A | 1.5% |
DaimlerChrysler AG - Reg’d | 1.4% |
Total S.A. | 1.3% |
HSBC Holdings plc | 1.2% |
Royal Dutch Shell plc, Class B | 1.2% |
Eni S.p.A. | 1.1% |
Volkswagen AG | 1.1% |
Total | 14.4% |
1 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
2 | Not annualized. |
3 | 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 Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Performance of a Hypothetical
$500,000 Investment in Institutional Shares1
$500,000 Investment in Institutional Shares1
Total Returns1,2,3
Fund Class and Inception Date | Since Inception | |||
Investor Shares (4/2/07) | 13.70% | |||
Select Shares (4/2/07) | 13.90% | |||
Institutional Shares (4/2/07) | 14.00% | |||
Benchmark: FTSE RAFI Developed ex U.S. 1000 Index | 15.43% | |||
Fund Category: Morningstar Foreign Large-Cap Blend | 16.07% |
Fund Expense Ratios4: Investor Shares: Net 0.59%; Gross 0.82%/ Select Shares: Net 0.44%; Gross 0.67% / Institutional Shares: Net 0.35%; Gross 0.67%
Foreign securities can involve risks such as political and economic instability and currency risk.
Manager views and portfolio holdings may have changed since the report date. Source of Sector Classification: S&P and MSCI.
Index ownership—“FTSE®” is trademark of The Financial Times Limited (“FT”) and the London Exchange Plc (the “Exchange”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of Research Affiliates LLC (“RA”). Schwab Fundamental International Large Company Index Fund is not sponsored, endorsed, sold or promoted by FTSE or RA, and FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | Not annualized. |
4 | As of 4/2/07 (amended on 7/2/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/09. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Schwab Fundamental Index Funds 11
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees; and, ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six-months beginning May 1, 2007 and held through October 31, 2007.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund or share class under the heading entitled ‘Expenses Paid During Period‘.
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/07 | at 10/31/07 | 5/1/07 - 10/31/07 | |||||||||||||
Schwab Fundamental US Large Company Index Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.59% | $ | 1,000 | $ | 1,029.80 | $ | 3.02 | |||||||||
Hypothetical 5% Return | 0.59% | $ | 1,000 | $ | 1,022.23 | $ | 3.01 | |||||||||
Select Shares® | ||||||||||||||||
Actual Return | 0.44% | $ | 1,000 | $ | 1,030.70 | $ | 2.25 | |||||||||
Hypothetical 5% Return | 0.44% | $ | 1,000 | $ | 1,022.99 | $ | 2.24 | |||||||||
Institutional Shares | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 1,031.70 | $ | 1.79 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab Fundamental US Small-Mid Company Index Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.59% | $ | 1,000 | $ | 1,014.70 | $ | 3.00 | |||||||||
Hypothetical 5% Return | 0.59% | $ | 1,000 | $ | 1,022.23 | $ | 3.01 | |||||||||
Select Shares® | ||||||||||||||||
Actual Return | 0.44% | $ | 1,000 | $ | 1,015.70 | $ | 2.24 | |||||||||
Hypothetical 5% Return | 0.44% | $ | 1,000 | $ | 1,022.99 | $ | 2.24 | |||||||||
Institutional Shares | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 1,016.70 | $ | 1.78 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab Fundamental International Large Company Index Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.59% | $ | 1,000 | $ | 1,106.00 | $ | 3.13 | |||||||||
Hypothetical 5% Return | 0.59% | $ | 1,000 | $ | 1,022.23 | $ | 3.01 | |||||||||
Select Shares® | ||||||||||||||||
Actual Return | 0.44% | $ | 1,000 | $ | 1,108.00 | $ | 2.34 | |||||||||
Hypothetical 5% Return | 0.44% | $ | 1,000 | $ | 1,022.99 | $ | 2.24 | |||||||||
Institutional Shares | ||||||||||||||||
Actual Return | 0.36% | $ | 1,000 | $ | 1,108.90 | $ | 1.91 | |||||||||
Hypothetical 5% Return | 0.36% | $ | 1,000 | $ | 1,023.39 | $ | 1.84 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights. |
2 | Expenses for each fund or Share Class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year. |
12 Schwab Fundamental Index Funds
Table of Contents
Financial Highlights
4/2/071- | ||||
Investor Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.05 | |||
Net realized and unrealized gains | 0.68 | |||
Total income from investment operations | 0.73 | |||
Net asset value at end of period | 10.73 | |||
Total return (%) | 7.30 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.59 | 3 | ||
Gross operating expenses | 0.75 | 3 | ||
Net investment income | 1.45 | 3 | ||
Portfolio turnover rate | 2 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 47 |
4/2/071- | ||||
Select Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.05 | |||
Net realized and unrealized gains | 0.69 | |||
Total income from investment operations | 0.74 | |||
Net asset value at end of period | 10.74 | |||
Total return (%) | 7.40 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.44 | 3 | ||
Gross operating expenses | 0.60 | 3 | ||
Net investment income | 1.60 | 3 | ||
Portfolio turnover rate | 2 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 101 |
1 Commencement of operations.
2 Not annualized.
3 Annualized.
See financial notes 13
Table of Contents
Schwab Fundamental US Large Company Index Fundtm
Financial Highlights continued
4/2/071- | ||||
Institutional Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.05 | |||
Net realized and unrealized gains | 0.70 | |||
Total income from investment operations | 0.75 | |||
Net asset value at end of period | 10.75 | |||
Total return (%) | 7.50 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.35 | 3 | ||
Gross operating expenses | 0.60 | 3 | ||
Net investment income | 1.66 | 3 | ||
Portfolio turnover rate | 2 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 345 |
1 Commencement of operations.
2 Not annualized.
3 Annualized.
14 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
98 | .1% | Domestic Common Stock | 477,965 | 484,161 | ||||||||
0 | .1% | Foreign Common Stock | 348 | 389 | ||||||||
0 | .1% | Short-Term Investments | 731 | 731 | ||||||||
98 | .3% | Total Investments | 479,044 | 485,281 | ||||||||
1 | .7% | Other Assets and Liabilities | 8,245 | |||||||||
100 | .0% | Net Assets | 493,526 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Domestic Common Stock 98.1% of net assets | ||||||||
Automobiles & Components 3.5% | ||||||||
American Axle & Manufacturing Holdings, Inc. | 6,160 | 169 | ||||||
ArvinMeritor, Inc. | 9,835 | 146 | ||||||
Autoliv, Inc. | 4,350 | 275 | ||||||
BorgWarner, Inc. | 1,625 | 172 | ||||||
Cooper Tire & Rubber Co. | 9,590 | 214 | ||||||
Ford Motor Co. * | 710,325 | 6,301 | ||||||
General Motors Corp. | 177,760 | 6,966 | ||||||
Harley-Davidson, Inc. | 4,960 | 255 | ||||||
Johnson Controls, Inc. | 19,170 | 838 | ||||||
Lear Corp. * | 9,415 | 334 | ||||||
Tenneco, Inc. * | 2,660 | 81 | ||||||
The Goodyear Tire & Rubber Co. * | 14,990 | 452 | ||||||
TRW Automotive Holdings Corp. * | 30,650 | 910 | ||||||
Visteon Corp. * | 25,450 | 162 | ||||||
WABCO Holdings, Inc. | 886 | 45 | ||||||
17,320 | ||||||||
Banks 4.3% | ||||||||
Associated Banc-Corp | 2,560 | 74 | ||||||
Astoria Financial Corp. | 5,855 | 152 | ||||||
BancorpSouth, Inc. | 3,545 | 86 | ||||||
Bank of Hawaii Corp. | 2,420 | 129 | ||||||
BB&T Corp. | 19,675 | 727 | ||||||
BOK Financial Corp. | 920 | 50 | ||||||
City National Corp. | 1,720 | 116 | ||||||
Comerica, Inc. | 7,600 | 355 | ||||||
Commerce Bancorp, Inc. | 2,250 | 92 | ||||||
Commerce Bancshares, Inc. | 2,725 | 129 | ||||||
Countrywide Financial Corp. | 19,235 | 299 | ||||||
Cullen/Frost Bankers, Inc. | 2,220 | 118 | ||||||
Doral Financial Corp. * | 814 | 17 | ||||||
Downey Financial Corp. | 600 | 24 | ||||||
Fifth Third Bancorp | 19,990 | 625 | ||||||
First Horizon National Corp. | 4,875 | 127 | ||||||
FirstMerit Corp. | 2,360 | 50 | ||||||
Freddie Mac | 31,225 | 1,631 | ||||||
Fremont General Corp. | 3,520 | 10 | ||||||
Fulton Financial Corp. | 2,180 | 29 | ||||||
Hudson City Bancorp, Inc. | 10,790 | 169 | ||||||
Huntington Bancshares, Inc. | 10,727 | 192 | ||||||
IndyMac Bancorp, Inc. | 1,140 | 15 | ||||||
KeyCorp | 20,630 | 587 | ||||||
M&T Bank Corp. | 1,786 | 178 | ||||||
Marshall & Ilsley Corp. | 7,185 | 307 | ||||||
MGIC Investment Corp. | 1,240 | 24 | ||||||
National City Corp. | 31,614 | 767 | ||||||
New York Community Bancorp, Inc. | 16,265 | 303 | ||||||
People’s United Financial, Inc. | 10,552 | 188 | ||||||
PNC Financial Services Group, Inc. | 10,955 | 791 | ||||||
Popular, Inc. | 11,880 | 125 | ||||||
Radian Group, Inc. | 930 | 12 | ||||||
Regions Financial Corp. | 14,325 | 388 | ||||||
Sovereign Bancorp, Inc. | 12,825 | 185 | ||||||
SunTrust Banks, Inc. | 12,160 | 883 | ||||||
Synovus Financial Corp. | 6,910 | 182 | ||||||
TCF Financial Corp. | 6,865 | 156 | ||||||
The Colonial BancGroup, Inc. | 4,960 | 95 | ||||||
The PMI Group, Inc. | 1,335 | 21 | ||||||
The South Financial Group, Inc. | 3,530 | 73 | ||||||
Trustmark Corp. | 3,125 | 84 | ||||||
U.S. Bancorp | 59,300 | 1,966 | ||||||
UnionBanCal Corp. | 4,870 | 263 | ||||||
Valley National Bancorp | 5,167 | 106 | ||||||
Wachovia Corp. | 57,349 | 2,623 | ||||||
Washington Federal, Inc. | 4,550 | 110 | ||||||
Washington Mutual, Inc. | 46,155 | 1,287 | ||||||
Webster Financial Corp. | 2,725 | 99 | ||||||
Wells Fargo & Co. | 105,625 | 3,592 | ||||||
Whitney Holding Corp. | 2,930 | 75 | ||||||
Wilmington Trust Corp. | 4,330 | 157 | ||||||
Zions Bancorp | 3,235 | 191 | ||||||
21,034 | ||||||||
Capital Goods 8.5% | ||||||||
3M Co. | 21,475 | 1,855 | ||||||
Acuity Brands, Inc. | 1,220 | 58 | ||||||
AGCO Corp. * | 3,540 | 211 | ||||||
Alliant Techsystems, Inc. * | 2,120 | 234 | ||||||
American Standard Cos., Inc. | 7,860 | 293 | ||||||
Briggs & Stratton Corp. | 935 | 21 | ||||||
Builders FirstSource, Inc. * | 1,355 | 10 | ||||||
Carlisle Cos., Inc. | 3,225 | 127 | ||||||
Caterpillar, Inc. | 19,345 | 1,443 | ||||||
Cooper Industries Ltd., Class A | 4,270 | 224 | ||||||
Crane Co. | 3,325 | 158 | ||||||
Cummins, Inc. | 3,242 | 389 | ||||||
Danaher Corp. | 4,550 | 390 | ||||||
Deere & Co. | 6,043 | 936 | ||||||
Dover Corp. | 5,175 | 238 | ||||||
Eaton Corp. | 4,060 | 376 | ||||||
EMCOR Group, Inc. * | 4,240 | 146 |
See financial notes 15
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Emerson Electric Co. | 21,500 | 1,124 | ||||||
Flowserve Corp. | 2,925 | 231 | ||||||
Fluor Corp. | 2,935 | 464 | ||||||
GATX Corp. | 935 | 38 | ||||||
General Dynamics Corp. | 8,625 | 785 | ||||||
General Electric Co. | 353,755 | 14,561 | ||||||
Goodrich Corp. | 4,655 | 324 | ||||||
Harsco Corp. | 3,035 | 184 | ||||||
Honeywell International, Inc. | 23,640 | 1,428 | ||||||
Hubbell, Inc., Class B | 1,830 | 101 | ||||||
Illinois Tool Works, Inc. | 12,470 | 714 | ||||||
Ingersoll-Rand Co., Ltd., Class A | 8,535 | 430 | ||||||
ITT Corp. | 3,955 | 265 | ||||||
Jacobs Engineering Group, Inc. * | 3,840 | 335 | ||||||
Kennametal, Inc. | 2,220 | 202 | ||||||
L-3 Communications Holdings, Inc. | 2,035 | 223 | ||||||
Lennox International, Inc. | 935 | 33 | ||||||
Lockheed Martin Corp. | 9,135 | 1,005 | ||||||
Masco Corp. | 20,350 | 490 | ||||||
Mueller Industries, Inc. | 4,830 | 174 | ||||||
NACCO Industries, Inc., Class A | 207 | 21 | ||||||
Northrop Grumman Corp. | 15,095 | 1,262 | ||||||
Oshkosh Truck Corp. | 1,620 | 88 | ||||||
PACCAR, Inc. | 10,343 | 575 | ||||||
Pall Corp. | 2,540 | 102 | ||||||
Parker Hannifin Corp. | 6,318 | 508 | ||||||
Pentair, Inc. | 4,850 | 172 | ||||||
Precision Castparts Corp. | 716 | 107 | ||||||
Quanta Services, Inc. * | 4,791 | 158 | ||||||
Raytheon Co. | 16,010 | 1,018 | ||||||
Rockwell Automation, Inc. | 2,550 | 176 | ||||||
Rockwell Collins, Inc. | 3,430 | 257 | ||||||
Sequa Corp., Class A * | 556 | 97 | ||||||
Sequa Corp., Class B * | 50 | 9 | ||||||
SPX Corp. | 1,935 | 196 | ||||||
Tecumseh Products Co., Class A * | 970 | 17 | ||||||
Teleflex, Inc. ) | 820 | 60 | ||||||
Terex Corp. ) * | 1,925 | 143 | ||||||
Textron, Inc. | 8,120 | 562 | ||||||
The Boeing Co. | 19,760 | 1,948 | ||||||
The Shaw Group, Inc. * | 4,240 | 316 | ||||||
The Timken Co. | 3,765 | 125 | ||||||
Trinity Industries, Inc. | 2,625 | 95 | ||||||
Tyco International Ltd. | 14,335 | 590 | ||||||
United Rentals, Inc. * | 4,985 | 170 | ||||||
United Technologies Corp. | 24,615 | 1,885 | ||||||
URS Corp. * | 3,735 | 231 | ||||||
USG Corp. * | 1,925 | 76 | ||||||
W.W. Grainger, Inc. | 2,035 | 183 | ||||||
Washington Group International, Inc. * | 2,620 | 255 | ||||||
WESCO International, Inc. * | 2,620 | 122 | ||||||
41,744 | ||||||||
Commercial Services & Supplies 0.8% | ||||||||
Acco Brands Corp. * | 1,870 | 40 | ||||||
Allied Waste Industries, Inc. * | 35,265 | 446 | ||||||
Avery Dennison Corp. | 2,350 | 136 | ||||||
ChoicePoint, Inc. * | 3,825 | 150 | ||||||
Cintas Corp. | 4,450 | 163 | ||||||
Corrections Corp. of America * | 5,140 | 145 | ||||||
Deluxe Corp. | 2,145 | 87 | ||||||
Equifax, Inc. | 3,530 | 136 | ||||||
HNI Corp. | 620 | 27 | ||||||
IKON Office Solutions, Inc. | 11,025 | 146 | ||||||
Kelly Services, Inc., Class A | 1,640 | 34 | ||||||
Manpower, Inc. | 4,245 | 317 | ||||||
Monster Worldwide, Inc. * | 3,420 | 139 | ||||||
PHH Corp. * | 5,790 | 129 | ||||||
Pitney Bowes, Inc. | 9,905 | 397 | ||||||
R.R. Donnelley & Sons Co. | 8,320 | 335 | ||||||
Republic Services, Inc. | 3,270 | 112 | ||||||
Robert Half International, Inc. | 2,930 | 88 | ||||||
Steelcase, Inc., Class A | 2,375 | 42 | ||||||
The Brink’s Co. | 2,820 | 177 | ||||||
The Dun & Bradstreet Corp. | 1,220 | 118 | ||||||
United Stationers, Inc. * | 925 | 54 | ||||||
Waste Management, Inc. | 18,655 | 679 | ||||||
4,097 | ||||||||
Consumer Durables & Apparel 1.4% | ||||||||
American Greetings Corp., Class A | 4,250 | 112 | ||||||
Beazer Homes USA, Inc. | 835 | 9 | ||||||
Brunswick Corp. | 6,370 | 142 | ||||||
Centex Corp. | 4,390 | 110 | ||||||
Coach, Inc. * | 2,075 | 76 | ||||||
D.R. Horton, Inc. | 10,390 | 132 | ||||||
Eastman Kodak Co. | 26,740 | 766 | ||||||
Fortune Brands, Inc. | 4,360 | 365 | ||||||
Furniture Brands International, Inc. | 9,460 | 114 | ||||||
Garmin Ltd. | 1,370 | 147 | ||||||
Hanesbrands, Inc. * | 9,600 | 298 | ||||||
Harman International Industries, Inc. | 620 | 52 | ||||||
Hasbro, Inc. | 2,565 | 77 | ||||||
Hovnanian Enterprises, Inc., Class A * | 2,170 | 25 | ||||||
Jones Apparel Group, Inc. | 2,075 | 43 | ||||||
KB Home | 5,460 | 151 | ||||||
Kellwood Co. | 3,525 | 58 | ||||||
La-Z-Boy, Inc. | 10,600 | 84 | ||||||
Leggett & Platt, Inc. | 7,420 | 144 | ||||||
Lennar Corp., Class A | 5,600 | 128 | ||||||
Liz Claiborne, Inc. | 2,945 | 84 | ||||||
M.D.C. Holdings, Inc. | 1,635 | 66 | ||||||
Mattel, Inc. | 10,235 | 214 | ||||||
Meritage Homes Corp. * | 625 | 10 | ||||||
Mohawk Industries, Inc. * | 3,435 | 293 | ||||||
Newell Rubbermaid, Inc. | 13,350 | 389 | ||||||
NIKE, Inc., Class B | 10,428 | 691 | ||||||
NVR, Inc. * | 103 | 49 | ||||||
Polaris Industries, Inc. | 3,000 | 148 | ||||||
Polo Ralph Lauren Corp. | 720 | 50 | ||||||
Pulte Homes, Inc. | 20,270 | 301 | ||||||
Snap-on, Inc. | 3,430 | 171 | ||||||
Standard Pacific Corp. | 5,255 | 25 | ||||||
The Black & Decker Corp. | 2,130 | 192 | ||||||
The Ryland Group, Inc. | 835 | 24 | ||||||
The Stanley Works | 1,940 | 112 | ||||||
The Timberland Co., Class A * | 3,025 | 59 | ||||||
Toll Brothers, Inc. * | 3,595 | 82 | ||||||
Tupperware Brands Corp. | 3,140 | 113 | ||||||
VF Corp. | 2,645 | 230 | ||||||
WCI Communities, Inc. * | 1,455 | 8 |
16 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Whirlpool Corp. | 4,755 | 377 | ||||||
6,721 | ||||||||
Consumer Services 1.4% | ||||||||
Apollo Group, Inc., Class A * | 2,725 | 216 | ||||||
Boyd Gaming Corp. | 2,725 | 114 | ||||||
Brinker International, Inc. | 1,355 | 34 | ||||||
Burger King Holdings, Inc. | 3,540 | 94 | ||||||
Career Education Corp. * | 4,935 | 176 | ||||||
Carnival Corp. | 19,445 | 933 | ||||||
CBRL Group, Inc. | 320 | 13 | ||||||
Darden Restaurants, Inc. | 4,245 | 183 | ||||||
H&R Block, Inc. | 9,965 | 217 | ||||||
Harrah’s Entertainment, Inc. | 4,655 | 411 | ||||||
International Game Technology | 5,255 | 229 | ||||||
Jack In the Box, Inc. * | 4,240 | 133 | ||||||
Las Vegas Sands Corp. * | 1,270 | 169 | ||||||
Marriott International, Inc., Class A | 2,660 | 109 | ||||||
McDonald’s Corp. | 28,080 | 1,676 | ||||||
MGM MIRAGE * | 4,360 | 399 | ||||||
Royal Caribbean Cruises Ltd. | 10,505 | 450 | ||||||
Service Corp. International | 10,010 | 145 | ||||||
Six Flags, Inc. * | 5,465 | 18 | ||||||
Starbucks Corp. * | 8,190 | 218 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 4,970 | 283 | ||||||
Station Casinos, Inc. | 620 | 56 | ||||||
Tim Hortons, Inc. | 2,230 | 85 | ||||||
Wendy’s International, Inc. | 1,965 | 68 | ||||||
Wyndham Worldwide Corp. | 1,760 | 58 | ||||||
Yum! Brands, Inc. | 9,230 | 372 | ||||||
6,859 | ||||||||
Diversified Financials 7.5% | ||||||||
Allied Capital Corp. | 7,700 | 227 | ||||||
American Capital Strategies Ltd. | 6,255 | 272 | ||||||
American Express Co. | 20,695 | 1,261 | ||||||
AmeriCredit Corp. * | 2,770 | 39 | ||||||
Ameriprise Financial, Inc. | 6,200 | 391 | ||||||
Bank of America Corp. | 151,775 | 7,328 | ||||||
Bank of New York Mellon Corp. | 29,852 | 1,458 | ||||||
Capital One Financial Corp. | 7,310 | 479 | ||||||
CIT Group, Inc. | 6,305 | 222 | ||||||
Citigroup, Inc. | 192,655 | 8,072 | ||||||
CME Group, Inc. | 1,102 | 734 | ||||||
Discover Financial Services | 11,912 | 230 | ||||||
E *TRADE Financial Corp. * | 3,815 | 43 | ||||||
Federated Investors, Inc., Class B | 2,030 | 87 | ||||||
Franklin Resources, Inc. | 3,040 | 394 | ||||||
Janus Capital Group, Inc. | 5,165 | 178 | ||||||
Jefferies Group, Inc. | 3,030 | 81 | ||||||
JPMorgan Chase & Co. | 110,545 | 5,196 | ||||||
Lazard Ltd., Class A | 5,145 | 258 | ||||||
Legg Mason, Inc. | 720 | 60 | ||||||
Lehman Brothers Holdings, Inc. | 12,575 | 797 | ||||||
Leucadia National Corp. | 4,450 | 225 | ||||||
Merrill Lynch & Co., Inc. | 24,345 | 1,607 | ||||||
Moody’s Corp. | 2,820 | 123 | ||||||
Morgan Stanley | 32,325 | 2,174 | ||||||
Northern Trust Corp. | 4,360 | 328 | ||||||
Nuveen Investments, Inc., Class A | 620 | 40 | ||||||
NYSE Euronext | 3,920 | 368 | ||||||
Raymond James Financial, Inc. | 2,835 | 106 | ||||||
SLM Corp. | 10,235 | 483 | ||||||
State Street Corp. | 7,536 | 601 | ||||||
T. Rowe Price Group, Inc. | 3,745 | 241 | ||||||
TD Ameritrade Holding Corp. * | 5,870 | 112 | ||||||
The Bear Stearns Cos., Inc. | 3,748 | 426 | ||||||
The Charles Schwab Corp. (b) | 12,015 | 279 | ||||||
The Goldman Sachs Group, Inc. | 8,211 | 2,036 | ||||||
The Student Loan Corp. | 208 | 35 | ||||||
Tri-Continental Corp. | 3,240 | 79 | ||||||
W.P. Carey & Co. LLC | 925 | 32 | ||||||
37,102 | ||||||||
Energy 10.5% | ||||||||
Anadarko Petroleum Corp. | 17,235 | 1,017 | ||||||
Apache Corp. | 8,620 | 895 | ||||||
Arch Coal, Inc. | 630 | 26 | ||||||
Baker Hughes, Inc. | 5,475 | 475 | ||||||
BJ Services Co. | 1,970 | 50 | ||||||
Cameron International Corp. * | 1,475 | 144 | ||||||
Chesapeake Energy Corp. | 11,520 | 455 | ||||||
Chevron Corp. | 94,915 | 8,686 | ||||||
Cimarex Energy Co. | 1,345 | 54 | ||||||
CNX Gas Corp. * | 1,245 | 40 | ||||||
ConocoPhillips | 61,010 | 5,183 | ||||||
CONSOL Energy, Inc. | 3,135 | 177 | ||||||
Devon Energy Corp. | 11,970 | 1,118 | ||||||
Diamond Offshore Drilling, Inc. | 1,220 | 138 | ||||||
Dresser-Rand Group, Inc. * | 5,750 | 222 | ||||||
El Paso Corp. | 43,720 | 772 | ||||||
ENSCO International, Inc. | 1,830 | 102 | ||||||
EOG Resources, Inc. | 4,350 | 385 | ||||||
Exterran Holdings, Inc. * | 2,324 | 196 | ||||||
Exxon Mobil Corp. | 170,510 | 15,685 | ||||||
FMC Technologies, Inc. * | 4,440 | 269 | ||||||
Forest Oil Corp. * | 5,150 | 250 | ||||||
Foundation Coal Holdings, Inc. | 5,435 | 232 | ||||||
Frontier Oil Corp. | 2,830 | 130 | ||||||
Grant Prideco, Inc. * | 2,120 | 104 | ||||||
Halliburton Co. | 17,565 | 692 | ||||||
Hess Corp. | 12,450 | 891 | ||||||
Marathon Oil Corp. | 28,690 | 1,696 | ||||||
Massey Energy Co. | 3,440 | 109 | ||||||
Murphy Oil Corp. | 5,375 | 396 | ||||||
Nabors Industries Ltd. * | 5,700 | 160 | ||||||
National-Oilwell Varco, Inc. * | 5,670 | 415 | ||||||
Newfield Exploration Co. * | 4,555 | 245 | ||||||
Noble Corp. | 5,040 | 267 | ||||||
Noble Energy | 3,735 | 286 | ||||||
Occidental Petroleum Corp. | 25,430 | 1,756 | ||||||
Overseas Shipholding Group, Inc. | 2,120 | 158 | ||||||
Patterson-UTI Energy, Inc. | 4,645 | 93 | ||||||
Peabody Energy Corp. | 4,445 | 248 | ||||||
Pioneer Natural Resources Co. | 4,150 | 212 | ||||||
Pogo Producing Co. | 1,235 | 74 | ||||||
Pride International, Inc. * | 5,165 | 191 | ||||||
Rowan Cos., Inc. | 1,630 | 63 | ||||||
Schlumberger Ltd. | 13,590 | 1,312 | ||||||
SEACOR Holdings, Inc. * | 2,100 | 192 | ||||||
Ship Finance International Ltd. | 2,740 | 75 | ||||||
Smith International, Inc. | 3,340 | 221 |
See financial notes 17
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Southwestern Energy Co. * | 2,120 | 110 | ||||||
Spectra Energy Corp. | 29,540 | 767 | ||||||
Stone Energy Corp. * | 4,435 | 198 | ||||||
Sunoco, Inc. | 6,490 | 478 | ||||||
Teekay Corp. | 1,440 | 81 | ||||||
Tesoro Corp. | 5,060 | 306 | ||||||
The Williams Cos., Inc. | 19,575 | 714 | ||||||
Tidewater, Inc. | 2,120 | 116 | ||||||
Transocean, Inc. * | 3,750 | 448 | ||||||
USEC, Inc. * | 7,765 | 68 | ||||||
Valero Energy Corp. | 17,065 | 1,202 | ||||||
Weatherford International Ltd. * | 6,695 | 435 | ||||||
World Fuel Services Corp. | 3,220 | 143 | ||||||
XTO Energy, Inc. | 4,660 | 309 | ||||||
51,932 | ||||||||
Food & Staples Retailing 3.0% | ||||||||
BJ’s Wholesale Club, Inc. * | 7,070 | 254 | ||||||
Costco Wholesale Corp. | 16,015 | 1,077 | ||||||
CVS Caremark Corp. | 40,035 | 1,672 | ||||||
Longs Drug Stores Corp. | 3,130 | 164 | ||||||
Nash Finch Co. | 1,830 | 68 | ||||||
Pathmark Stores, Inc. * | 2,605 | 34 | ||||||
Performance Food Group Co. * | 1,755 | 47 | ||||||
Rite Aid Corp. * | 44,605 | 174 | ||||||
Ruddick Corp. | 2,935 | 100 | ||||||
Safeway, Inc. | 22,710 | 772 | ||||||
Supervalu, Inc. | 13,960 | 541 | ||||||
Sysco Corp. | 22,880 | 785 | ||||||
The Great Atlantic & Pacific Tea Co., Inc. * | 4,870 | 158 | ||||||
The Kroger Co. | 55,650 | 1,636 | ||||||
The Pantry, Inc. * | 1,020 | 29 | ||||||
Wal-Mart Stores, Inc. | 145,835 | 6,593 | ||||||
Walgreen Co. | 19,670 | 780 | ||||||
Weis Markets, Inc. | 2,820 | 124 | ||||||
Whole Foods Market, Inc. | 1,630 | 81 | ||||||
15,089 | ||||||||
Food, Beverage & Tobacco 7.0% | ||||||||
Altria Group, Inc. | 77,380 | 5,643 | ||||||
Anheuser-Busch Cos., Inc. | 20,075 | 1,029 | ||||||
Archer-Daniels-Midland Co. | 26,105 | 934 | ||||||
Brown-Forman Corp., Class A | 800 | 61 | ||||||
Brown-Forman Corp., Class B | 3,220 | 238 | ||||||
Bunge Ltd. | 6,175 | 711 | ||||||
Campbell Soup Co. | 10,430 | 386 | ||||||
Chiquita Brands International, Inc. * | 2,465 | 46 | ||||||
Coca-Cola Enterprises, Inc. | 28,695 | 741 | ||||||
ConAgra Foods, Inc. | 31,945 | 758 | ||||||
Constellation Brands, Inc., Class A * | 7,305 | 184 | ||||||
Corn Products International, Inc. | 2,035 | 87 | ||||||
Dean Foods Co. | 4,490 | 125 | ||||||
Del Monte Foods Co. | 8,830 | 91 | ||||||
Fresh Del Monte Produce, Inc. | 8,270 | 300 | ||||||
General Mills, Inc. | 12,555 | 725 | ||||||
H.J. Heinz Co. | 12,475 | 584 | ||||||
Hormel Foods Corp. | 3,960 | 144 | ||||||
Kellogg Co. | 11,260 | 594 | ||||||
Kraft Foods, Inc., Class A | 317,532 | 10,609 | ||||||
Loews Corp. - Carolina Group | 5,875 | 504 | ||||||
McCormick & Co., Inc. | 3,240 | 114 | ||||||
Molson Coors Brewing Co., Class B | 5,680 | 325 | ||||||
PepsiAmericas, Inc. | 5,280 | 189 | ||||||
PepsiCo, Inc. | 30,210 | 2,227 | ||||||
Pilgrim’s Pride Corp. | 1,640 | 49 | ||||||
Reynolds American, Inc. | 12,375 | 797 | ||||||
Sara Lee Corp. | 49,250 | 815 | ||||||
Seaboard Corp. | 17 | 28 | ||||||
Smithfield Foods, Inc. * | 10,306 | 295 | ||||||
The Coca-Cola Co. | 53,715 | 3,317 | ||||||
The Hershey Co. | 4,070 | 175 | ||||||
The J. M. Smucker Co. | 1,925 | 103 | ||||||
The Pepsi Bottling Group, Inc. | 9,335 | 402 | ||||||
Tyson Foods, Inc., Class A | 27,480 | 434 | ||||||
Universal Corp. | 4,125 | 201 | ||||||
UST, Inc. | 5,570 | 297 | ||||||
Wm. Wrigley Jr. Co. | 5,975 | 369 | ||||||
34,631 | ||||||||
Health Care Equipment & Services 3.2% | ||||||||
Advanced Medical Optics, Inc. * | 3,400 | 93 | ||||||
Aetna, Inc. | 12,180 | 684 | ||||||
Alcon, Inc. | 3,295 | 502 | ||||||
AmerisourceBergen Corp. | 11,870 | 559 | ||||||
Apria Healthcare Group, Inc. * | 4,430 | 107 | ||||||
Baxter International, Inc. | 11,760 | 706 | ||||||
Beckman Coulter, Inc. | 2,820 | 200 | ||||||
Becton, Dickinson & Co. | 3,855 | 322 | ||||||
Boston Scientific Corp. * | 29,485 | 409 | ||||||
C.R. Bard, Inc. | 1,420 | 119 | ||||||
Cardinal Health, Inc. | 15,120 | 1,029 | ||||||
CIGNA Corp. | 9,809 | 515 | ||||||
Community Health Systems, Inc. * | 2,450 | 81 | ||||||
Coventry Health Care, Inc. * | 4,250 | 256 | ||||||
Covidien Ltd. | 18,435 | 767 | ||||||
Dade Behring Holdings, Inc. | 1,320 | 102 | ||||||
DaVita, Inc. * | 2,080 | 136 | ||||||
DENTSPLY International, Inc. | 3,035 | 126 | ||||||
Express Scripts, Inc. * | 7,520 | 474 | ||||||
Health Management Associates, Inc., Class A | 7,795 | 52 | ||||||
Health Net, Inc. * | 4,070 | 218 | ||||||
Henry Schein, Inc. * | 2,930 | 175 | ||||||
Hillenbrand Industries, Inc. | 2,825 | 156 | ||||||
Hospira, Inc. * | 1,850 | 76 | ||||||
Humana, Inc. * | 5,670 | 425 | ||||||
IMS Health, Inc. | 3,640 | 92 | ||||||
Kindred Healthcare, Inc. * | 7,145 | 152 | ||||||
Laboratory Corp. of America Holdings * | 930 | 64 | ||||||
LifePoint Hospitals, Inc. * | 2,830 | 86 | ||||||
Lincare Holdings, Inc. * | 4,135 | 144 | ||||||
Magellan Health Services, Inc. * | 3,525 | 148 | ||||||
Manor Care, Inc. | 2,525 | 168 | ||||||
McKesson Corp. | 18,740 | 1,239 | ||||||
Medco Health Solutions, Inc. * | 13,780 | 1,301 | ||||||
Medtronic, Inc. | 14,205 | 674 | ||||||
Omnicare, Inc. | 2,350 | 69 | ||||||
Owens & Minor, Inc. | 1,335 | 54 | ||||||
Patterson Cos., Inc. * | 2,935 | 115 | ||||||
PharMerica Corp. * | 1,116 | 18 | ||||||
Quest Diagnostics, Inc. | 4,955 | 263 |
18 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
St. Jude Medical, Inc. * | 2,760 | 112 | ||||||
Stryker Corp. | 3,845 | 273 | ||||||
Tenet Healthcare Corp. * | 43,775 | 154 | ||||||
UnitedHealth Group, Inc. | 20,975 | 1,031 | ||||||
Universal Health Services, Inc., Class B | 825 | 40 | ||||||
Varian Medical Systems, Inc. * | 2,120 | 103 | ||||||
WellPoint, Inc. * | 14,710 | 1,165 | ||||||
Zimmer Holdings, Inc. * | 3,540 | 246 | ||||||
16,000 | ||||||||
Household & Personal Products 1.3% | ||||||||
Alberto-Culver Co. | 5,370 | 140 | ||||||
Avon Products, Inc. | 8,725 | 358 | ||||||
Colgate-Palmolive Co. | 9,230 | 704 | ||||||
Energizer Holdings, Inc. * | 720 | 75 | ||||||
Kimberly-Clark Corp. | 14,000 | 993 | ||||||
NBTY, Inc. * | 2,220 | 79 | ||||||
Spectrum Brands, Inc. * | 2,615 | 11 | ||||||
The Clorox Co. | 3,155 | 197 | ||||||
The Estee Lauder Cos., Inc., Class A | 7,660 | 336 | ||||||
The Procter & Gamble Co. | 50,275 | 3,495 | ||||||
6,388 | ||||||||
Insurance 6.0% | ||||||||
ACE Ltd. | 10,040 | 609 | ||||||
AFLAC, Inc. | 10,840 | 681 | ||||||
Alleghany Corp. * | 912 | 358 | ||||||
Allied World Assurance Holdings Ltd. | 3,540 | 170 | ||||||
Ambac Financial Group, Inc. | 2,035 | 75 | ||||||
American Financial Group, Inc. | 5,060 | 151 | ||||||
American International Group, Inc. | 70,460 | 4,447 | ||||||
American National Insurance Co. | 919 | 119 | ||||||
Aon Corp. | 12,360 | 560 | ||||||
Arch Capital Group Ltd. * | 2,225 | 166 | ||||||
Arthur J. Gallagher & Co. | 3,040 | 81 | ||||||
Aspen Insurance Holdings Ltd. | 3,225 | 88 | ||||||
Assurant, Inc. | 4,555 | 266 | ||||||
Axis Capital Holdings Ltd. | 1,950 | 77 | ||||||
Berkshire Hathaway, Inc., Class A * | 33 | 4,372 | ||||||
Berkshire Hathaway, Inc., Class B * | 408 | 1,801 | ||||||
Cincinnati Financial Corp. | 6,080 | 242 | ||||||
CNA Financial Corp. | 11,720 | 464 | ||||||
Conseco, Inc. * | 12,140 | 192 | ||||||
Endurance Specialty Holdings Ltd. | 2,330 | 91 | ||||||
Erie Indemnity Co., Class A | 2,225 | 127 | ||||||
Everest Re Group Ltd. | 1,725 | 184 | ||||||
Fidelity National Financial, Inc., Class A | 4,105 | 63 | ||||||
First American Corp. | 2,360 | 71 | ||||||
Genworth Financial, Inc., Class A | 31,455 | 859 | ||||||
Hanover Insurance Group, Inc. | 730 | 34 | ||||||
HCC Insurance Holdings, Inc. | 2,535 | 76 | ||||||
LandAmerica Financial Group, Inc. | 620 | 17 | ||||||
Lincoln National Corp. | 7,480 | 467 | ||||||
Loews Corp. | 11,665 | 573 | ||||||
Markel Corp. * | 613 | 333 | ||||||
Marsh & McLennan Cos., Inc. | 29,370 | 760 | ||||||
MBIA, Inc. | 4,170 | 179 | ||||||
Mercury General Corp. | 3,430 | 176 | ||||||
MetLife, Inc. | 22,505 | 1,549 | ||||||
Montpelier Re Holdings Ltd. | 1,980 | 35 | ||||||
Nationwide Financial Services, Inc., Class A | 4,565 | 245 | ||||||
Odyssey Re Holdings Corp. | 2,125 | 79 | ||||||
Old Republic International Corp. | 8,060 | 124 | ||||||
PartnerRe Ltd. | 2,930 | 244 | ||||||
Principal Financial Group, Inc. | 7,285 | 493 | ||||||
Protective Life Corp. | 3,435 | 147 | ||||||
Prudential Financial, Inc. | 12,480 | 1,207 | ||||||
Reinsurance Group of America, Inc. | 3,530 | 202 | ||||||
RenaissanceRe Holdings Ltd. | 2,725 | 159 | ||||||
SAFECO Corp. | 4,260 | 247 | ||||||
StanCorp Financial Group, Inc. | 2,225 | 123 | ||||||
The Allstate Corp. | 22,975 | 1,204 | ||||||
The Chubb Corp. | 13,575 | 724 | ||||||
The Commerce Group, Inc. | 1,845 | 67 | ||||||
The Hartford Financial Services Group, Inc. | 9,130 | 886 | ||||||
The Phoenix Cos., Inc. | 2,180 | 30 | ||||||
The Progressive Corp. | 17,945 | 332 | ||||||
The Travelers Cos., Inc. | 17,555 | 917 | ||||||
Torchmark Corp. | 2,040 | 133 | ||||||
Transatlantic Holdings, Inc. | 1,625 | 121 | ||||||
Unitrin, Inc. | 3,650 | 169 | ||||||
Unum Group | 17,145 | 400 | ||||||
W. R. Berkley Corp. | 2,560 | 77 | ||||||
Wesco Financial Corp. | 112 | 45 | ||||||
White Mountains Insurance Group Ltd. | 129 | 69 | ||||||
XL Capital Ltd., Class A | 6,185 | 445 | ||||||
29,402 | ||||||||
Materials 4.1% | ||||||||
AbitibiBowater, Inc. | 917 | 31 | ||||||
Air Products & Chemicals, Inc. | 6,675 | 653 | ||||||
Airgas, Inc. | 1,720 | 87 | ||||||
AK Steel Holding Corp. * | 3,445 | 173 | ||||||
Albemarle Corp. | 1,925 | 92 | ||||||
Alcoa, Inc. | 35,565 | 1,408 | ||||||
Allegheny Technologies, Inc. | 911 | 93 | ||||||
Ashland, Inc. | 2,550 | 150 | ||||||
Ball Corp. | 2,040 | 101 | ||||||
Bemis Co., Inc. | 2,355 | 66 | ||||||
Cabot Corp. | 930 | 33 | ||||||
Celanese Corp., Series A | 7,200 | 302 | ||||||
Chemtura Corp. | 3,930 | 37 | ||||||
Commercial Metals Co. | 1,145 | 36 | ||||||
Crown Holdings, Inc. * | 11,120 | 276 | ||||||
Cytec Industries, Inc. | 2,720 | 181 | ||||||
E.I. du Pont de Nemours & Co. | 33,345 | 1,651 | ||||||
Eastman Chemical Co. | 3,960 | 264 | ||||||
Ecolab, Inc. | 4,560 | 215 | ||||||
FMC Corp. | 1,640 | 94 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 6,685 | 787 | ||||||
Graphic Packaging Corp. * | 5,995 | 29 | ||||||
Greif, Inc., Class A | 1,212 | 77 | ||||||
Hercules, Inc. | 4,150 | 78 | ||||||
Huntsman Corp. | 20,865 | 550 |
See financial notes 19
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
International Flavors & Fragrances, Inc. | 3,535 | 185 | ||||||
International Paper Co. | 30,995 | 1,146 | ||||||
Louisiana-Pacific Corp. | 8,085 | 133 | ||||||
Lyondell Chemical Co. | 9,325 | 442 | ||||||
Martin Marietta Materials, Inc. | 610 | 79 | ||||||
MeadWestvaco Corp. | 14,340 | 482 | ||||||
Monsanto Co. | 8,095 | 790 | ||||||
Nalco Holding Co. | 6,370 | 158 | ||||||
Newmont Mining Corp. | 8,510 | 433 | ||||||
Nucor Corp. | 6,580 | 408 | ||||||
Olin Corp. | 1,255 | 29 | ||||||
Owens-Illinois, Inc. * | 9,845 | 437 | ||||||
Packaging Corp. of America | 3,445 | 110 | ||||||
Pactiv Corp. * | 3,560 | 98 | ||||||
PPG Industries, Inc. | 7,500 | 561 | ||||||
Praxair, Inc. | 6,985 | 597 | ||||||
Reliance Steel & Aluminum Co. | 720 | 42 | ||||||
Rockwood Holdings, Inc. * | 3,040 | 119 | ||||||
Rohm & Haas Co. | 7,000 | 363 | ||||||
RPM International, Inc. | 4,965 | 106 | ||||||
Sealed Air Corp. | 2,975 | 74 | ||||||
Sigma-Aldrich Corp. | 3,230 | 167 | ||||||
Silgan Holdings, Inc. | 1,220 | 67 | ||||||
Smurfit-Stone Container Corp. * | 22,805 | 276 | ||||||
Sonoco Products Co. | 5,555 | 172 | ||||||
Southern Copper Corp. | 4,355 | 608 | ||||||
Steel Dynamics, Inc. | 3,125 | 166 | ||||||
Temple-Inland, Inc. | 2,245 | 120 | ||||||
The Dow Chemical Co. | 43,080 | 1,940 | ||||||
The Lubrizol Corp. | 4,135 | 281 | ||||||
The Mosaic Co. * | 4,260 | 297 | ||||||
The Scotts Miracle-Gro Co., Class A | 4,420 | 203 | ||||||
The Valspar Corp. | 6,750 | 169 | ||||||
United States Steel Corp. | 2,695 | 291 | ||||||
Valhi, Inc. | 3,950 | 105 | ||||||
Vulcan Materials Co. | 723 | 62 | ||||||
Weyerhaeuser Co. | 9,730 | 739 | ||||||
Worthington Industries, Inc. | 7,065 | 177 | ||||||
20,096 | ||||||||
Media 3.1% | ||||||||
Belo Corp., Class A | 7,580 | 140 | ||||||
Cablevision Systems Corp., Class A * | 7,965 | 234 | ||||||
CBS Corp., Class B | 40,170 | 1,153 | ||||||
Charter Communications, Inc., Class A * | 21,205 | 44 | ||||||
Clear Channel Communications, Inc. | 13,605 | 514 | ||||||
Clear Channel Outdoor Holdings, Inc., Class A * | 8,370 | 213 | ||||||
Comcast Corp., Class A * | 51,310 | 1,080 | ||||||
Comcast Corp., Special Class A * | 23,270 | 486 | ||||||
Discovery Holding Co., Class A * | 8,815 | 251 | ||||||
Dow Jones & Co., Inc. | 4,235 | 253 | ||||||
EchoStar Communications Corp., Class A * | 5,070 | 248 | ||||||
Gannett Co., Inc. | 8,830 | 375 | ||||||
Getty Images, Inc. * | 2,720 | 77 | ||||||
Hearst-Argyle Television, Inc. | 1,140 | 25 | ||||||
Idearc, Inc. | 14,525 | 392 | ||||||
Lamar Advertising Co., Class A | 1,820 | 97 | ||||||
Liberty Global, Inc., Series A * | 3,070 | 121 | ||||||
Liberty Global, Inc., Series C * | 5,070 | 186 | ||||||
Liberty Media Corp. - Capital, Series A * | 717 | 90 | ||||||
Live Nation, Inc. * | 5,245 | 107 | ||||||
Meredith Corp. | 1,300 | 81 | ||||||
News Corp., Class A | 38,080 | 825 | ||||||
News Corp., Class B | 15,320 | 351 | ||||||
Omnicom Group, Inc. | 7,404 | 377 | ||||||
Regal Entertainment Group, Class A | 22,385 | 505 | ||||||
Scholastic Corp. * | 5,835 | 231 | ||||||
Sun-Times Media Group, Inc., Class A * | 33,505 | 74 | ||||||
The DIRECTV Group, Inc. * | 16,640 | 441 | ||||||
The E.W. Scripps Co., Class A | 4,545 | 205 | ||||||
The Interpublic Group of Cos., Inc. * | 12,405 | 128 | ||||||
The McClatchy Co., Class A | 3,480 | 58 | ||||||
The McGraw-Hill Cos., Inc. | 5,580 | 279 | ||||||
The New York Times Co., Class A | 8,600 | 168 | ||||||
The Walt Disney Co. | 43,500 | 1,506 | ||||||
The Washington Post Co., Class B | 238 | 202 | ||||||
Time Warner, Inc. | 139,055 | 2,539 | ||||||
Tribune Co. | 8,711 | 264 | ||||||
Viacom, Inc., Class B * | 14,900 | 615 | ||||||
Virgin Media, Inc. | 8,110 | 179 | ||||||
Warner Music Group Corp. | 5,760 | 59 | ||||||
15,173 | ||||||||
Pharmaceuticals & Biotechnology 5.6% | ||||||||
Abbott Laboratories | 35,775 | 1,954 | ||||||
Allergan, Inc. | 1,430 | 97 | ||||||
Amgen, Inc. * | 15,535 | 903 | ||||||
Applied Biosystems Group-Applera Corp. | 4,245 | 158 | ||||||
Barr Pharmaceuticals, Inc. * | 2,070 | 119 | ||||||
Biogen Idec, Inc. * | 4,550 | 339 | ||||||
Bristol-Myers Squibb Co. | 87,770 | 2,632 | ||||||
Charles River Laboratories International, Inc. * | 2,725 | 158 | ||||||
Eli Lilly and Co. | 31,415 | 1,701 | ||||||
Forest Laboratories, Inc. * | 2,455 | 96 | ||||||
Genentech, Inc. * | 5,270 | 391 | ||||||
Genzyme Corp. * | 4,650 | 353 | ||||||
Gilead Sciences, Inc. * | 3,860 | 178 | ||||||
Invitrogen Corp. * | 2,320 | 211 | ||||||
Johnson & Johnson | 65,885 | 4,294 | ||||||
King Pharmaceuticals, Inc. * | 10,700 | 113 | ||||||
Merck & Co., Inc. | 82,905 | 4,830 | ||||||
Mylan, Inc. | 2,875 | 43 | ||||||
PerkinElmer, Inc. | 4,250 | 117 | ||||||
Pfizer, Inc. | 235,470 | 5,795 | ||||||
Schering-Plough Corp. | 38,650 | 1,179 | ||||||
Thermo Fisher Scientific, Inc. * | 3,645 | 214 | ||||||
Watson Pharmaceuticals, Inc. * | 5,665 | 173 | ||||||
Wyeth | 33,440 | 1,626 | ||||||
27,674 |
20 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Real Estate 1.5% | ||||||||
AMB Property Corp. | 3,340 | 218 | ||||||
American Financial Realty Trust | 2,200 | 15 | ||||||
Annaly Capital Management, Inc. | 19,985 | 342 | ||||||
Apartment Investment & Management Co., Class A | 3,855 | 180 | ||||||
AvalonBay Communities, Inc. | 1,920 | 236 | ||||||
Boston Properties, Inc. | 3,290 | 356 | ||||||
Brandywine Realty Trust | 5,625 | 146 | ||||||
BRE Properties, Inc. | 1,720 | 94 | ||||||
Camden Property Trust | 1,720 | 107 | ||||||
CB Richard Ellis Group, Inc., Class A * | 7,730 | 188 | ||||||
CBL & Associates Properties, Inc. | 4,730 | 157 | ||||||
Colonial Properties Trust | 725 | 23 | ||||||
Cousins Properties, Inc. | 620 | 18 | ||||||
Developers Diversified Realty Corp. | 1,935 | 98 | ||||||
Duke Realty Corp. | 5,475 | 176 | ||||||
Equity Lifestyle Properties, Inc. | 1,120 | 56 | ||||||
Equity One, Inc. | 730 | 19 | ||||||
Equity Residential | 6,925 | 289 | ||||||
Essex Property Trust, Inc. | 1,356 | 167 | ||||||
Federal Realty Investment Trust | 1,370 | 121 | ||||||
First Industrial Realty Trust, Inc. | 730 | 30 | ||||||
Friedman, Billings, Ramsey Group, Inc., Class A | 7,940 | 34 | ||||||
General Growth Properties, Inc. | 3,650 | 198 | ||||||
Glimcher Realty Trust | 725 | 16 | ||||||
HCP, Inc. | 8,365 | 285 | ||||||
Health Care REIT, Inc. | 3,430 | 152 | ||||||
Healthcare Realty Trust, Inc. | 835 | 22 | ||||||
Highwoods Properties, Inc. | 835 | 30 | ||||||
Home Properties, Inc. | 720 | 37 | ||||||
Hospitality Properties Trust | 2,655 | 105 | ||||||
Host Hotels & Resorts, Inc. | 9,585 | 212 | ||||||
HRPT Properties Trust | 4,950 | 46 | ||||||
Impac Mortgage Holdings, Inc. | 7,320 | 8 | ||||||
iStar Financial, Inc. | 4,370 | 133 | ||||||
Kimco Realty Corp. | 4,560 | 189 | ||||||
Liberty Property Trust | 2,450 | 92 | ||||||
Mack-Cali Realty Corp. | 3,950 | 156 | ||||||
Nationwide Health Properties, Inc. | 5,835 | 182 | ||||||
Newcastle Investment Corp. | 730 | 11 | ||||||
NovaStar Financial, Inc. | 1,125 | 6 | ||||||
Pennsylvania Real Estate Investment Trust | 620 | 24 | ||||||
Plum Creek Timber Co., Inc. | 5,395 | 241 | ||||||
Post Properties, Inc. | 725 | 30 | ||||||
Potlatch Corp. | 620 | 30 | ||||||
ProLogis | 4,960 | 356 | ||||||
Public Storage | 2,330 | 189 | ||||||
Rayonier, Inc. | 1,835 | 89 | ||||||
Realty Income Corp. | 3,340 | 99 | ||||||
Redwood Trust, Inc. | 725 | 19 | ||||||
Regency Centers Corp. | 1,720 | 123 | ||||||
Senior Housing Properties Trust | 940 | 21 | ||||||
Simon Property Group, Inc. | 2,130 | 222 | ||||||
SL Green Realty Corp. | 2,557 | 309 | ||||||
Strategic Hotels & Resorts, Inc. | 1,755 | 38 | ||||||
The Macerich Co. | 1,470 | 126 | ||||||
Thornburg Mortgage, Inc. | 2,985 | 31 | ||||||
UDR, Inc. | 6,650 | 158 | ||||||
Ventas, Inc. | 2,325 | 100 | ||||||
Vornado Realty Trust | 2,993 | 334 | ||||||
Weingarten Realty Investors | 4,035 | 154 | ||||||
7,643 | ||||||||
Retailing 3.1% | ||||||||
Abercrombie & Fitch Co., Class A | 2,220 | 176 | ||||||
Advance Auto Parts, Inc. | 2,045 | 70 | ||||||
Amazon.com, Inc. * | 4,350 | 388 | ||||||
American Eagle Outfitters, Inc. | 3,435 | 82 | ||||||
AnnTaylor Stores Corp. * | 3,430 | 106 | ||||||
Asbury Automotive Group, Inc. | 7,645 | 140 | ||||||
AutoNation, Inc. * | 26,435 | 468 | ||||||
AutoZone, Inc. * | 1,823 | 227 | ||||||
Barnes & Noble, Inc. | 4,440 | 172 | ||||||
Bed Bath & Beyond, Inc. * | 2,665 | 90 | ||||||
Best Buy Co., Inc. | 13,250 | 643 | ||||||
Big Lots, Inc. * | 2,665 | 64 | ||||||
Blockbuster, Inc., Class A * | 38,875 | 204 | ||||||
Blockbuster, Inc., Class B * | 8,125 | 38 | ||||||
Borders Group, Inc. | 4,460 | 69 | ||||||
CarMax, Inc. * | 4,340 | 91 | ||||||
Charming Shoppes, Inc. * | 7,890 | 58 | ||||||
Circuit City Stores, Inc. | 5,045 | 40 | ||||||
Collective Brands, Inc. * | 3,640 | 67 | ||||||
Dillard’s, Inc., Class A | 2,775 | 64 | ||||||
Dollar Tree Stores, Inc. * | 3,745 | 143 | ||||||
eBay, Inc. * | 15,875 | 573 | ||||||
Expedia, Inc. * | 12,630 | 412 | ||||||
Family Dollar Stores, Inc. | 2,975 | 75 | ||||||
Foot Locker, Inc. | 3,195 | 48 | ||||||
GameStop Corp., Class A * | 2,040 | 121 | ||||||
Genuine Parts Co. | 7,100 | 348 | ||||||
Group 1 Automotive, Inc. | 1,235 | 38 | ||||||
IAC/InterActiveCorp * | 9,745 | 287 | ||||||
J.C. Penney Co., Inc. | 6,900 | 388 | ||||||
Kohl’s Corp. * | 6,695 | 368 | ||||||
Liberty Media Corp. – Interactive, Class A * | 20,020 | 425 | ||||||
Limited Brands, Inc. | 19,720 | 434 | ||||||
Lowe’s Cos., Inc. | 32,155 | 865 | ||||||
Macy’s, Inc. | 13,220 | 423 | ||||||
Nordstrom, Inc. | 5,055 | 199 | ||||||
O’Reilly Automotive, Inc. * | 2,430 | 80 | ||||||
Office Depot, Inc. * | 8,650 | 162 | ||||||
OfficeMax, Inc. | 1,855 | 59 | ||||||
Penske Automotive Group, Inc. | 3,595 | 80 | ||||||
PetSmart, Inc. | 1,740 | 52 | ||||||
Pier 1 Imports, Inc. * | 23,935 | 122 | ||||||
RadioShack Corp. | 10,080 | 208 | ||||||
Rent-A-Center, Inc. * | 9,670 | 155 | ||||||
Ross Stores, Inc. | 4,645 | 125 | ||||||
Saks, Inc. | 7,935 | 168 | ||||||
Sally Beauty Holdings, Inc. * | 3,525 | 33 | ||||||
Sears Holdings Corp. * | 5,221 | 704 | ||||||
Sonic Automotive, Inc., Class A | 2,560 | 65 | ||||||
Staples, Inc. | 15,800 | 369 | ||||||
Target Corp. | 23,615 | 1,449 | ||||||
The Gap, Inc. | 33,975 | 642 | ||||||
The Home Depot, Inc. | 52,526 | 1,655 |
See financial notes 21
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
The Pep Boys - Manny, Moe & Jack | 5,555 | 82 | ||||||
The Sherwin-Williams Co. | 3,545 | 227 | ||||||
The Talbots, Inc. | 1,635 | 24 | ||||||
The TJX Cos., Inc. | 11,880 | 344 | ||||||
Tiffany & Co. | 1,835 | 99 | ||||||
Williams-Sonoma, Inc. | 1,545 | 49 | ||||||
Zale Corp. * | 1,345 | 28 | ||||||
15,385 | ||||||||
Semiconductors & Semiconductor Equipment 1.5% | ||||||||
Advanced Micro Devices, Inc. * | 17,630 | 231 | ||||||
Altera Corp. | 3,750 | 74 | ||||||
Amkor Technology, Inc. * | 12,980 | 147 | ||||||
Analog Devices, Inc. | 5,465 | 183 | ||||||
Applied Materials, Inc. | 18,485 | 359 | ||||||
Atmel Corp. * | 15,690 | 77 | ||||||
Broadcom Corp., Class A * | 3,745 | 122 | ||||||
Fairchild Semiconductor International, Inc. * | 4,660 | 85 | ||||||
Intel Corp. | 142,800 | 3,841 | ||||||
International Rectifier Corp. * | 3,825 | 128 | ||||||
Intersil Corp., Class A | 2,835 | 86 | ||||||
KLA-Tencor Corp. | 3,030 | 159 | ||||||
Lam Research Corp. * | 2,220 | 111 | ||||||
Linear Technology Corp. | 1,655 | 55 | ||||||
LSI Corp. * | 7,440 | 49 | ||||||
Marvell Technology Group Ltd. * | 5,630 | 101 | ||||||
Maxim Integrated Products, Inc. | 2,465 | 67 | ||||||
Microchip Technology, Inc. | 2,980 | 99 | ||||||
Micron Technology, Inc. * | 22,375 | 235 | ||||||
National Semiconductor Corp. | 2,250 | 57 | ||||||
Novellus Systems, Inc. * | 3,140 | 89 | ||||||
NVIDIA Corp. * | 3,217 | 114 | ||||||
Spansion, Inc., Class A * | 3,810 | 27 | ||||||
Teradyne, Inc. * | 4,550 | 56 | ||||||
Texas Instruments, Inc. | 21,610 | 704 | ||||||
Xilinx, Inc. | 5,960 | 145 | ||||||
7,401 | ||||||||
Software & Services 3.8% | ||||||||
Accenture Ltd., Class A | 15,095 | 589 | ||||||
Activision, Inc. * | 4,550 | 108 | ||||||
Adobe Systems, Inc. * | 1,940 | 93 | ||||||
Affiliated Computer Services, Inc., Class A * | 3,855 | 195 | ||||||
Alliance Data Systems Corp. * | 720 | 58 | ||||||
Amdocs Ltd. * | 3,300 | 113 | ||||||
Automatic Data Processing, Inc. | 11,100 | 550 | ||||||
BEA Systems, Inc. * | 10,385 | 175 | ||||||
BMC Software, Inc. * | 3,040 | 103 | ||||||
Broadridge Financial Solutions, Inc. | 3,737 | 75 | ||||||
CA, Inc. | 7,005 | 185 | ||||||
Cadence Design Systems, Inc. * | 8,175 | 160 | ||||||
Ceridian Corp. * | 1,135 | 41 | ||||||
CheckFree Corp. * | 2,520 | 120 | ||||||
Citrix Systems, Inc. * | 2,630 | 113 | ||||||
Computer Sciences Corp. * | 12,745 | 744 | ||||||
Compuware Corp. * | 15,520 | 155 | ||||||
Convergys Corp. * | 1,765 | 32 | ||||||
DST Systems, Inc. * | 1,120 | 95 | ||||||
Electronic Arts, Inc. * | 3,150 | 193 | ||||||
Electronic Data Systems Corp. | 30,290 | 654 | ||||||
Fidelity National Information Services, Inc. | 7,820 | 361 | ||||||
Fiserv, Inc. * | 2,350 | 130 | ||||||
Google, Inc., Class A * | 1,002 | 708 | ||||||
Hewitt Associates, Inc., Class A * | 5,350 | 189 | ||||||
Intuit, Inc. * | 3,655 | 118 | ||||||
Iron Mountain, Inc. * | 4,955 | 172 | ||||||
MasterCard, Inc., Class A | 1,618 | 307 | ||||||
McAfee, Inc. * | 3,935 | 163 | ||||||
Microsoft Corp. | 254,465 | 9,367 | ||||||
MoneyGram International, Inc. | 2,625 | 42 | ||||||
Novell, Inc. * | 21,535 | 163 | ||||||
Oracle Corp. * | 54,680 | 1,212 | ||||||
Paychex, Inc. | 2,760 | 115 | ||||||
Perot Systems Corp., Class A * | 4,455 | 65 | ||||||
Symantec Corp. * | 9,545 | 179 | ||||||
Synopsys, Inc. * | 2,540 | 72 | ||||||
Total System Services, Inc. | 2,530 | 76 | ||||||
Unisys Corp. * | 9,460 | 57 | ||||||
VeriSign, Inc. * | 1,760 | 60 | ||||||
Western Union Co. | 5,610 | 124 | ||||||
Yahoo!, Inc. * | 12,755 | 397 | ||||||
18,628 | ||||||||
Technology Hardware & Equipment 4.7% | ||||||||
Agilent Technologies, Inc. * | 8,805 | 325 | ||||||
Andrew Corp. * | 2,705 | 40 | ||||||
Anixter International, Inc. * | 2,620 | 188 | ||||||
Apple, Inc. * | 4,865 | 924 | ||||||
Arrow Electronics, Inc. * | 5,395 | 216 | ||||||
Avnet, Inc. * | 5,780 | 241 | ||||||
AVX Corp. | 8,980 | 139 | ||||||
Benchmark Electronics, Inc. * | 1,040 | 21 | ||||||
Cisco Systems, Inc. * | 64,865 | 2,144 | ||||||
Corning, Inc. | 13,760 | 334 | ||||||
Dell, Inc. * | 56,850 | 1,740 | ||||||
Diebold, Inc. | 830 | 35 | ||||||
EMC Corp. * | 38,770 | 984 | ||||||
Flextronics International Ltd. * | 64,941 | 799 | ||||||
Harris Corp. | 2,725 | 165 | ||||||
Hewlett-Packard Co. | 65,005 | 3,360 | ||||||
Ingram Micro, Inc., Class A * | 33,165 | 704 | ||||||
Insight Enterprises, Inc. * | 4,205 | 116 | ||||||
International Business Machines Corp. | 37,095 | 4,308 | ||||||
Jabil Circuit, Inc. | 6,095 | 133 | ||||||
JDS Uniphase Corp. * | 5,860 | 89 | ||||||
Juniper Networks, Inc. * | 10,670 | 384 | ||||||
Lexmark International, Inc., Class A * | 5,045 | 212 | ||||||
Mettler-Toledo International, Inc. * | 1,300 | 138 | ||||||
Molex, Inc. | 2,930 | 84 | ||||||
Molex, Inc., Class A | 2,930 | 80 | ||||||
Motorola, Inc. | 69,100 | 1,298 | ||||||
NCR Corp. * | 4,865 | 134 | ||||||
Network Appliance, Inc. * | 4,230 | 133 | ||||||
QUALCOMM, Inc. | 16,185 | 692 | ||||||
SanDisk Corp. * | 3,445 | 153 | ||||||
Sanmina-SCI Corp. * | 121,395 | 268 | ||||||
Seagate Technology | 9,635 | 268 |
22 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Sun Microsystems, Inc. * | 79,815 | 456 | ||||||
SYNNEX Corp. * | 2,770 | 62 | ||||||
Tech Data Corp. * | 8,540 | 336 | ||||||
Tellabs, Inc. * | 18,760 | 165 | ||||||
Teradata Corp. * | 4,865 | 139 | ||||||
Tyco Electronics Ltd. | 14,135 | 504 | ||||||
UTStarcom, Inc. * | 14,205 | 46 | ||||||
Vishay Intertechnology, Inc. * | 12,940 | 163 | ||||||
Western Digital Corp. * | 5,560 | 144 | ||||||
Xerox Corp. * | 32,530 | 567 | ||||||
23,431 | ||||||||
Telecommunication Services 4.1% | ||||||||
ALLTEL Corp. | 14,700 | 1,046 | ||||||
American Tower Corp., Class A * | 4,665 | 206 | ||||||
AT&T, Inc. | 147,915 | 6,181 | ||||||
CenturyTel, Inc. | 3,765 | 166 | ||||||
Cincinnati Bell, Inc. * | 22,995 | 125 | ||||||
Citizens Communications Co. | 21,060 | 277 | ||||||
Crown Castle International Corp. * | 2,685 | 110 | ||||||
Embarq Corp. | 9,440 | 500 | ||||||
Level 3 Communications, Inc. * | 15,300 | 46 | ||||||
NII Holdings, Inc. * | 1,370 | 80 | ||||||
Qwest Communications International, Inc. * | 50,380 | 362 | ||||||
Sprint Nextel Corp. | 115,540 | 1,976 | ||||||
Telephone & Data Systems, Inc., Special Shares | 2,330 | 153 | ||||||
Telephone and Data Systems, Inc. | 2,625 | 183 | ||||||
United States Cellular Corp. * | 2,135 | 201 | ||||||
Verizon Communications, Inc. | 183,870 | 8,471 | ||||||
20,083 | ||||||||
Transportation 1.8% | ||||||||
Alaska Air Group, Inc. * | 2,725 | 69 | ||||||
Alexander & Baldwin, Inc. | 820 | 43 | ||||||
AMERCO * | 2,420 | 156 | ||||||
AMR Corp. * | 11,720 | 281 | ||||||
Avis Budget Group, Inc. * | 36,490 | 762 | ||||||
Burlington Northern Santa Fe Corp. | 8,820 | 769 | ||||||
C.H. Robinson Worldwide, Inc. | 2,180 | 109 | ||||||
Con-way, Inc. | 1,030 | 44 | ||||||
Continental Airlines, Inc., Class B * | 4,670 | 160 | ||||||
CSX Corp. | 13,370 | 599 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 3,225 | 111 | ||||||
Expeditors International of Washington, Inc. | 2,125 | 108 | ||||||
FedEx Corp. | 6,262 | 647 | ||||||
J.B. Hunt Transport Services, Inc. | 5,745 | 159 | ||||||
Kansas City Southern * | 2,830 | 109 | ||||||
Norfolk Southern Corp. | 13,450 | 695 | ||||||
Ryder System, Inc. | 4,055 | 194 | ||||||
Southwest Airlines Co. | 17,375 | 247 | ||||||
Union Pacific Corp. | 9,058 | 1,160 | ||||||
United Parcel Service, Inc., Class B | 29,480 | 2,214 | ||||||
Werner Enterprises, Inc. | 3,940 | 75 | ||||||
YRC Worldwide, Inc. * | 5,655 | 139 | ||||||
8,850 | ||||||||
Utilities 6.4% | ||||||||
AGL Resources, Inc. | 2,140 | 85 | ||||||
Allegheny Energy, Inc. * | 3,555 | 216 | ||||||
ALLETE, Inc. | 3,330 | 145 | ||||||
Alliant Energy Corp. | 7,475 | 299 | ||||||
Ameren Corp. | 10,350 | 560 | ||||||
American Electric Power Co., Inc. | 28,555 | 1,377 | ||||||
Aqua America, Inc. | 3,840 | 89 | ||||||
Aquila, Inc. * | 40,935 | 171 | ||||||
Atmos Energy Corp. | 3,860 | 108 | ||||||
Avista Corp. | 4,250 | 94 | ||||||
Black Hills Corp. | 2,825 | 125 | ||||||
CenterPoint Energy, Inc. | 28,710 | 481 | ||||||
Cleco Corp. | 3,635 | 96 | ||||||
CMS Energy Corp. | 14,210 | 241 | ||||||
Consolidated Edison, Inc. | 18,305 | 862 | ||||||
Constellation Energy Group | 6,080 | 576 | ||||||
Dominion Resources, Inc. | 12,295 | 1,127 | ||||||
DPL, Inc. | 4,020 | 117 | ||||||
DTE Energy Co. | 13,465 | 668 | ||||||
Duke Energy Corp. | 57,025 | 1,093 | ||||||
Dynegy, Inc., Class A * | 40,940 | 377 | ||||||
Edison International | 14,990 | 872 | ||||||
Energen Corp. | 2,120 | 136 | ||||||
Energy East Corp. | 11,150 | 311 | ||||||
Entergy Corp. | 6,917 | 829 | ||||||
Equitable Resources, Inc. | 2,180 | 123 | ||||||
Exelon Corp. | 20,855 | 1,726 | ||||||
FirstEnergy Corp. | 13,390 | 933 | ||||||
FPL Group, Inc. | 14,280 | 977 | ||||||
Great Plains Energy, Inc. | 2,970 | 89 | ||||||
Hawaiian Electric Industries, Inc. | 8,770 | 203 | ||||||
IDACORP, Inc. | 1,240 | 43 | ||||||
Integrys Energy Group, Inc. | 1,335 | 72 | ||||||
MDU Resources Group, Inc. | 8,680 | 244 | ||||||
Mirant Corp. * | 10,345 | 438 | ||||||
National Fuel Gas Co. | 4,445 | 216 | ||||||
New Jersey Resources Corp. | 720 | 35 | ||||||
Nicor, Inc. | 1,840 | 80 | ||||||
NiSource, Inc. | 19,175 | 392 | ||||||
Northeast Utilities | 8,015 | 247 | ||||||
NorthWestern Corp. | 2,725 | 75 | ||||||
NRG Energy, Inc. * | 4,960 | 226 | ||||||
NSTAR | 5,880 | 207 | ||||||
OGE Energy Corp. | 7,165 | 274 | ||||||
ONEOK, Inc. | 7,170 | 358 | ||||||
Pepco Holdings, Inc. | 10,065 | 287 | ||||||
PG&E Corp. | 15,015 | 735 | ||||||
Piedmont Natural Gas Co., Inc. | 3,550 | 91 | ||||||
Pinnacle West Capital Corp. | 4,885 | 197 | ||||||
PNM Resources, Inc. | 2,245 | 56 | ||||||
Portland General Electric Co. | 5,445 | 153 | ||||||
PPL Corp. | 11,855 | 613 | ||||||
Progress Energy, Inc. | 16,025 | 769 | ||||||
Public Service Enterprise Group, Inc. | 10,540 | 1,008 | ||||||
Puget Energy, Inc. | 9,100 | 257 | ||||||
Questar Corp. | 3,650 | 208 | ||||||
Reliant Energy, Inc. * | 153,820 | 4,233 | ||||||
SCANA Corp. | 7,685 | 312 | ||||||
Sempra Energy | 8,115 | 499 |
See financial notes 23
Table of Contents
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Sierra Pacific Resources | 10,700 | 181 | ||||||
Southern Co. | 37,995 | 1,393 | ||||||
Southern Union Co. | 5,250 | 165 | ||||||
Southwest Gas Corp. | 2,425 | 72 | ||||||
TECO Energy, Inc. | 16,685 | 281 | ||||||
The AES Corp. * | 25,970 | 556 | ||||||
UGI Corp. | 4,120 | 110 | ||||||
UIL Holdings Corp. | 725 | 26 | ||||||
Unisource Energy Corp. | 2,625 | 83 | ||||||
Vectren Corp. | 2,165 | 61 | ||||||
Westar Energy, Inc. | 7,870 | 209 | ||||||
WGL Holdings, Inc. | 1,245 | 42 | ||||||
Wisconsin Energy Corp. | 5,370 | 257 | ||||||
Xcel Energy, Inc. | 27,080 | 611 | ||||||
31,478 | ||||||||
Total Domestic Common Stock (Cost $477,965) | 484,161 | |||||||
Foreign Common Stock 0.1% of net assets | ||||||||
Cayman Islands 0.1% | ||||||||
Energy 0.1% | ||||||||
GlobalSantaFe Corp. | 3,045 | 247 | ||||||
Israel 0.0% | ||||||||
Software & Services 0.0% | ||||||||
Check Point Software Technologies Ltd. * | 2,355 | 60 | ||||||
United Kingdom 0.0% | ||||||||
Insurance 0.0% | ||||||||
Willis Group Holdings Ltd. | 1,945 | 82 | ||||||
Total Foreign Common Stock (Cost $348) | 389 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
3.55%, 12/20/07 (a) | 35 | 35 | ||||||
3.61%, 12/20/07 (a) | 260 | 259 | ||||||
3.80%, 12/20/07 (a) | 65 | 64 | ||||||
3.82%, 12/20/07 (a) | 240 | 239 | ||||||
3.91%, 12/20/07 (a) | 135 | 134 | ||||||
731 | ||||||||
Total Short-Term Investments (Cost $731) | 731 | |||||||
End of Investments. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $479,052, and the unrealized appreciation and depreciation were $25,848 and ($19,619), respectively, with a net appreciation of $6,229. |
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | Issuer is affiliated with the fund’s adviser. |
In addition to the above, the fund held the following at
10/31/07. All numbers are x 1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 105 | 8,163 | 27 |
24 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $479,044) | $485,281 | |||||
Receivables: | ||||||
Fund shares sold | 8,352 | |||||
Dividends | 417 | |||||
Due from brokers for futures | 27 | |||||
Prepaid expense | + | 1 | ||||
Total assets | 494,078 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 96 | |||||
Investment adviser and administrator fees | 18 | |||||
Transfer agent and shareholder services fees | 2 | |||||
Fund shares redeemed | 291 | |||||
Payable to custodian | 74 | |||||
Accrued expenses | + | 71 | ||||
Total liabilities | 552 | |||||
Net Assets | ||||||
Total assets | 494,078 | |||||
Total liabilities | − | 552 | ||||
Net assets | $493,526 | |||||
Net Assets by Source | ||||||
Capital received from investors | 484,493 | |||||
Net investment income not yet distributed | 2,358 | |||||
Net realized capital gains | 411 | |||||
Net unrealized capital gains | 6,264 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $47,127 | 4,394 | $10.73 | ||||||||
Select Shares | $101,192 | 9,426 | $10.74 | ||||||||
Institutional Shares | $345,207 | 32,106 | $10.75 |
See financial notes 25
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statement of
Operations
For April 2, 2007 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends, including $8 from affiliated issuer | $2,732 | |||||
Interest | + | 197 | ||||
Total Investment Income | 2,929 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 199 | |||||
Net realized gains on futures contracts | + | 212 | ||||
Net realized gains | 411 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 6,237 | |||||
Net unrealized gains on futures contracts | + | 27 | ||||
Net unrealized gains | 6,264 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 435 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 38 | |||||
Select Shares | 31 | |||||
Institutional Shares | 98 | |||||
FTSE RAFI Index fees | 101 | |||||
Registration fees | 73 | |||||
Custodian fees | 56 | |||||
Professional fees | 21 | |||||
Shareholder reports | 17 | |||||
Portfolio accounting fees | 17 | |||||
Trustees’ fees | 2 | |||||
Overdraft expense | 1 | |||||
Other expenses | + | 1 | ||||
Total expenses | 891 | |||||
Expense reduction by adviser and Schwab | − | 318 | ||||
Custody credits | − | 2 | ||||
Net expenses | 571 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 2,929 | |||||
Net expenses | − | 571 | ||||
Net investment income | 2,358 | |||||
Net realized gains | 411 | |||||
Net unrealized gains | + | 6,264 | ||||
Increase in net assets from operations | $9,033 |
26 See financial notes
Table of Contents
Schwab Fundamental US Large Company Index Fund
Statements of
Changes in Net Assets
For the current period only. Because the fund commenced operations on April 2, 2007, it has no prior report period. All numbers x 1,000.
Operations |
4/2/07*-10/31/07 | |||||
Net investment income | $2,358 | ||||
Net realized gains | 411 | ||||
Net unrealized gains | + | 6,264 | |||
Increase in net assets from operations | 9,033 |
Transactions in Fund Shares |
4/2/07*-10/31/07 | ||||||||||
SHARES | VALUE | |||||||||
Shares Sold | ||||||||||
Investor Shares | 5,488 | $57,669 | ||||||||
Select Shares | 10,673 | 112,016 | ||||||||
Institutional Shares | + | 34,072 | 360,153 | |||||||
Total shares sold | 50,233 | $529,838 | ||||||||
Shares Redeemed | ||||||||||
Investor Shares | (1,094 | ) | ($11,593 | ) | ||||||
Select Shares | (1,247 | ) | (13,075 | ) | ||||||
Institutional Shares | + | (1,966 | ) | (20,677 | ) | |||||
Total shares redeemed | (4,307 | ) | ($45,345 | ) | ||||||
Net transactions in fund shares | 45,926 | $484,493 | ||||||||
Shares Outstanding and Net Assets | ||||||||||
4/2/07*-10/31/07 | ||||||||||
SHARES | NET ASSETS | |||||||||
Beginning of period | 0 | $0 | ||||||||
Total increase | + | 45,926 | 493,526 | |||||||
End of period | 45,926 | $493,526 | ||||||||
Net investment income not yet distributed | $2,358 |
* | Commencement of operations. |
See financial notes 27
Table of Contents
Financial Highlights
4/2/071- | ||||
Investor Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.04 | |||
Net realized and unrealized gains | 0.30 | |||
Total income from investment operations | 0.34 | |||
Net asset value at end of period | 10.34 | |||
Total return (%) | 3.40 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.59 | 3 | ||
Gross operating expenses | 1.00 | 3 | ||
Net investment income | 1.08 | 3 | ||
Portfolio turnover rate | 4 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 25 |
4/2/071- | ||||
Select Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.04 | |||
Net realized and unrealized gains | 0.31 | |||
Total income from investment operations | 0.35 | |||
Net asset value at end of period | 10.35 | |||
Total return (%) | 3.50 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.44 | 3 | ||
Gross operating expenses | 0.85 | 3 | ||
Net investment income | 1.20 | 3 | ||
Portfolio turnover rate | 4 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 28 |
1 Commencement of operations.
2 Not annualized.
3 Annualized.
28 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fundtm
Financial Highlights continued
4/2/071- | ||||
Institutional Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.05 | |||
Net realized and unrealized gains | 0.31 | |||
Total income from investment operations | 0.36 | |||
Net asset value at end of period | 10.36 | |||
Total return (%) | 3.60 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.35 | 3 | ||
Gross operating expenses | 0.89 | 3 | ||
Net investment income | 1.36 | 3 | ||
Portfolio turnover rate | 4 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 33 |
1 Commencement of operations.
2 Not annualized.
3 Annualized.
See financial notes 29
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
96 | .6% | Domestic Common Stock | 83,397 | 83,456 | ||||||||
2 | .8% | Foreign Common Stock | 2,243 | 2,413 | ||||||||
0 | .2% | Short-Term Investments | 149 | 149 | ||||||||
99 | .6% | Total Investments | 85,789 | 86,018 | ||||||||
0 | .4% | Other Assets and Liabilities, Net | 324 | |||||||||
100 | .0% | Net Assets | 86,342 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Domestic Common Stock 96.6% of net assets | ||||||||
Automobiles & Components 1.0% | ||||||||
Aftermarket Technology Corp. * | 2,485 | 86 | ||||||
Drew Industries, Inc. * | 1,915 | 76 | ||||||
Fleetwood Enterprises, Inc. * | 7,315 | 66 | ||||||
Gentex Corp. | 6,870 | 143 | ||||||
Modine Manufacturing Co. | 5,215 | 121 | ||||||
Monaco Coach Corp. | 3,235 | 38 | ||||||
Sauer-Danfoss, Inc. | 2,940 | 76 | ||||||
Superior Industries International, Inc. | 4,360 | 88 | ||||||
Thor Industries, Inc. | 2,610 | 125 | ||||||
Winnebago Industries, Inc. | 2,365 | 61 | ||||||
880 | ||||||||
Banks 7.9% | ||||||||
1st Source Corp. | 2,240 | 43 | ||||||
Alabama National Bancorp | 1,080 | 85 | ||||||
AMCORE Financial, Inc. | 2,260 | 54 | ||||||
Anchor BanCorp Wisconsin, Inc. | 2,145 | 53 | ||||||
Arrow Financial Corp. | 921 | 21 | ||||||
BancFirst Corp. | 975 | 44 | ||||||
Bank Mutual Corp. | 3,460 | 38 | ||||||
Bank of Granite Corp. | 1,000 | 13 | ||||||
Bank of the Ozarks, Inc. | 860 | 25 | ||||||
BankUnited Financial Corp., Class A | 1,360 | 12 | ||||||
Banner Corp. | 560 | 18 | ||||||
Boston Private Financial Holdings, Inc. | 1,340 | 39 | ||||||
Brookline Bancorp, Inc. | 5,110 | 55 | ||||||
Cadence Financial Corp. | 890 | 14 | ||||||
Camden National Corp. | 745 | 25 | ||||||
Capital City Bank Group, Inc. | 995 | 28 | ||||||
Capitol Bancorp Ltd. | 480 | 10 | ||||||
Capitol Federal Financial | 3,280 | 108 | ||||||
Cascade Bancorp | 555 | 11 | ||||||
Cathay General Bancorp | 2,500 | 77 | ||||||
Centennial Bank Holdings, Inc. * | 2,230 | 12 | ||||||
Central Pacific Financial Corp. | 1,245 | 28 | ||||||
Chemical Financial Corp. | 3,030 | 76 | ||||||
Chittenden Corp. | 3,785 | 135 | ||||||
Citizens Republic Bancorp, Inc. | 5,900 | 90 | ||||||
City Bank | 580 | 14 | ||||||
City Holding Co. | 990 | 37 | ||||||
CoBiz, Inc. | 1,275 | 23 | ||||||
Columbia Banking System, Inc. | 755 | 23 | ||||||
Community Bank System, Inc. | 2,450 | 51 | ||||||
Community Banks, Inc. | 1,645 | 50 | ||||||
Community Trust Bancorp, Inc. | 1,395 | 41 | ||||||
Corus Bankshares, Inc. | 4,525 | 50 | ||||||
CVB Financial Corp. | 5,780 | 68 | ||||||
Dime Community Bancshares | 4,050 | 58 | ||||||
East West Bancorp, Inc. | 2,765 | 93 | ||||||
F.N.B. Corp. | 6,035 | 100 | ||||||
Farmers Capital Bank Corp. | 470 | 14 | ||||||
Federal Agricultural Mortgage Corp., Class C | 1,100 | 32 | ||||||
Financial Institutions, Inc. | 1,395 | 27 | ||||||
First BanCorp | 905 | 16 | ||||||
First BanCorp Puerto Rico | 11,830 | 104 | ||||||
First Busey Corp. | 4,315 | 89 | ||||||
First Charter Corp. | 2,625 | 80 | ||||||
First Citizens BancShares, Inc., Class A | 758 | 123 | ||||||
First Commonwealth Financial Corp. | 8,390 | 96 | ||||||
First Community Bancorp | 1,080 | 53 | ||||||
First Community Bancshares, Inc. | 775 | 27 | ||||||
First Financial Bancorp | 3,990 | 47 | ||||||
First Financial Bankshares, Inc. | 1,705 | 67 | ||||||
First Financial Corp. | 1,000 | 31 | ||||||
First Financial Holdings, Inc. | 985 | 28 | ||||||
First Indiana Corp. | 1,825 | 58 | ||||||
First Merchants Corp. | 1,465 | 32 | ||||||
First Midwest Bancorp, Inc. | 3,855 | 130 | ||||||
First Niagara Financial Group, Inc. | 7,555 | 100 | ||||||
FirstFed Financial Corp. * | 1,315 | 56 | ||||||
Flagstar Bancorp, Inc. | 8,325 | 67 | ||||||
Flushing Financial Corp. | 1,635 | 28 | ||||||
Frontier Financial Corp. | 2,955 | 66 | ||||||
Glacier Bancorp, Inc. | 2,280 | 46 | ||||||
Great Southern Bancorp, Inc. | 870 | 20 | ||||||
Hancock Holding Co. | 2,330 | 89 | ||||||
Hanmi Financial Corp. | 2,170 | 24 | ||||||
Harleysville National Corp. | 2,525 | 38 | ||||||
IBERIABANK Corp. | 750 | 37 | ||||||
Independent Bank Corp., Massachusetts | 895 | 26 | ||||||
Independent Bank Corp., Michigan | 2,260 | 24 | ||||||
Integra Bank Corp. | 1,445 | 25 | ||||||
International Bancshares Corp. | 5,012 | 110 | ||||||
Investors Bancorp, Inc. * | 2,865 | 43 | ||||||
Irwin Financial Corp. | 3,175 | 31 | ||||||
Kearny Financial Corp. | 2,735 | 36 | ||||||
KNBT Bancorp, Inc. | 1,950 | 33 |
30 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Lakeland Bancorp, Inc. | 1,937 | 26 | ||||||
MB Financial, Inc. | 2,345 | 78 | ||||||
Midwest Banc Holdings, Inc. | 2,220 | 30 | ||||||
Municipal Mortgage & Equity LLC | 3,970 | 86 | ||||||
Nara Bancorp, Inc. | 1,280 | 20 | ||||||
National Penn Bancshares, Inc. | 3,615 | 61 | ||||||
NBT Bancorp, Inc. | 3,155 | 78 | ||||||
NetBank, Inc. * | 10,295 | — | ||||||
New York Community Bancorp, Inc. | 85 | 2 | ||||||
NewAlliance Bancshares, Inc. | 5,775 | 81 | ||||||
Northwest Bancorp, Inc. | 2,280 | 67 | ||||||
OceanFirst Financial Corp. | 2,115 | 34 | ||||||
Ocwen Financial Corp. * | 2,705 | 20 | ||||||
Old National Bancorp | 7,125 | 119 | ||||||
Old Second Bancorp, Inc. | 775 | 22 | ||||||
Omega Financial Corp. | 2,210 | 60 | ||||||
Oriental Financial Group, Inc. | 3,155 | 39 | ||||||
Pacific Capital Bancorp | 3,070 | 64 | ||||||
Park National Corp. | 1,410 | 112 | ||||||
Partners Trust Financial Group, Inc. | 3,290 | 41 | ||||||
Peapack-Gladstone Financial Corp. | 845 | 21 | ||||||
Peoples Bancorp, Inc. | 1,475 | 37 | ||||||
PFF Bancorp, Inc. | 2,220 | 24 | ||||||
Pinnacle Financial Partners, Inc. * | 700 | 20 | ||||||
PrivateBancorp, Inc. | 1,255 | 35 | ||||||
Prosperity Bancshares, Inc. | 1,600 | 52 | ||||||
Provident Bankshares Corp. | 2,830 | 70 | ||||||
Provident Financial Services, Inc. | 4,990 | 79 | ||||||
Provident New York Bancorp | 1,585 | 20 | ||||||
Renasant Corp. | 2,500 | 58 | ||||||
S&T Bancorp, Inc. | 2,590 | 86 | ||||||
S.Y. Bancorp, Inc. | 965 | 24 | ||||||
Sandy Spring Bancorp, Inc. | 1,595 | 47 | ||||||
Santander BanCorp | 4,160 | 57 | ||||||
Seacoast Banking Corp. of Florida | 1,790 | 26 | ||||||
Signature Bank * | 1,590 | 54 | ||||||
Simmons First National Corp., Class A | 1,100 | 30 | ||||||
Sterling Bancorp | 2,245 | 33 | ||||||
Sterling Bancshares, Inc. | 3,725 | 45 | ||||||
Sterling Financial Corp. | 2,370 | 43 | ||||||
Sterling Financial Corp., Washington | 1,240 | 28 | ||||||
Suffolk Bancorp | 765 | 25 | ||||||
Sun Bancorp, Inc. * | 1,046 | 18 | ||||||
Susquehanna Bancshares, Inc. | 4,905 | 99 | ||||||
SVB Financial Group * | 1,635 | 85 | ||||||
Texas Capital Bancshares, Inc. * | 900 | 20 | ||||||
TierOne Corp. | 1,185 | 27 | ||||||
Tompkins Financial Corp., Inc. | 765 | 32 | ||||||
Triad Guaranty, Inc. * | 705 | 6 | ||||||
TrustCo Bank Corp. NY | 8,870 | 94 | ||||||
U.S.B. Holding Co., Inc. | 1,025 | 22 | ||||||
UCBH Holdings, Inc. | 3,400 | 58 | ||||||
UMB Financial Corp. | 2,805 | 118 | ||||||
Umpqua Holdings Corp. | 2,590 | 44 | ||||||
United Bankshares, Inc. | 3,595 | 109 | ||||||
United Community Banks, Inc. | 2,235 | 49 | ||||||
United Community Financial Corp. | 4,080 | 26 | ||||||
W Holding Co., Inc. | 24,080 | 51 | ||||||
Washington Trust Bancorp, Inc. | 585 | 15 | ||||||
Wauwatosa Holdings, Inc. * | 1,300 | 22 | ||||||
WesBanco, Inc. | 2,170 | 50 | ||||||
West Coast Bancorp | 765 | 21 | ||||||
Westamerica Bancorp | 2,070 | 100 | ||||||
Western Alliance Bancorp * | 965 | 22 | ||||||
Wilshire Bancorp, Inc. | 2,265 | 23 | ||||||
Wintrust Financial Corp. | 1,400 | 51 | ||||||
WSFS Financial Corp. | 235 | 14 | ||||||
6,805 | ||||||||
Capital Goods 11.4% | ||||||||
A.O. Smith Corp. | 3,260 | 122 | ||||||
A.S.V., Inc. * | 605 | 7 | ||||||
AAON, Inc. | 1,132 | 21 | ||||||
AAR Corp. * | 1,940 | 62 | ||||||
Accuride Corp. * | 3,960 | 40 | ||||||
Actuant Corp., Class A | 1,310 | 90 | ||||||
Albany International Corp., Class A | 2,930 | 110 | ||||||
American Railcar Industries, Inc. | 750 | 17 | ||||||
American Science & Engineering, Inc. | 530 | 32 | ||||||
American Woodmark Corp. | 895 | 23 | ||||||
Ameron International Corp. | 660 | 71 | ||||||
AMETEK, Inc. | 3,815 | 179 | ||||||
Apogee Enterprises, Inc. | 2,595 | 61 | ||||||
Applied Industrial Technologies, Inc. | 4,020 | 142 | ||||||
Argon ST, Inc. * | 965 | 19 | ||||||
Astec Industries, Inc. * | 1,090 | 49 | ||||||
Baldor Electric Co. | 2,470 | 100 | ||||||
Barnes Group, Inc. | 4,725 | 173 | ||||||
BE Aerospace, Inc. * | 3,545 | 176 | ||||||
Beacon Roofing Supply, Inc. * | 2,530 | 23 | ||||||
Belden, Inc. | 2,260 | 132 | ||||||
Blount International, Inc. * | 3,505 | 43 | ||||||
Brady Corp., Class A | 2,815 | 104 | ||||||
Bucyrus International, Inc., Class A | 755 | 62 | ||||||
Cascade Corp. | 755 | 47 | ||||||
Ceradyne, Inc. * | 750 | 51 | ||||||
CIRCOR International, Inc. | 1,090 | 55 | ||||||
CLARCOR, Inc. | 2,925 | 107 | ||||||
Cubic Corp. | 2,390 | 108 | ||||||
Curtiss-Wright Corp. | 2,705 | 152 | ||||||
Donaldson Co., Inc. | 3,375 | 145 | ||||||
DRS Technologies, Inc. | 2,360 | 136 | ||||||
DynCorp International, Inc., Class A * | 4,785 | 108 | ||||||
EDO Corp. | 1,635 | 95 | ||||||
Electro Rent Corp. | 3,105 | 45 | ||||||
Encore Wire Corp. | 2,240 | 47 | ||||||
Energy Conversion Devices, Inc. * | 530 | 14 | ||||||
EnerSys * | 6,875 | 125 | ||||||
EnPro Industries, Inc. * | 2,390 | 98 | ||||||
ESCO Technologies, Inc. * | 1,600 | 66 | ||||||
Esterline Technologies Corp. * | 2,570 | 141 | ||||||
Evergreen Solar, Inc. * | 1,905 | 22 | ||||||
Fastenal Co. | 5,320 | 237 | ||||||
Federal Signal Corp. | 7,100 | 95 | ||||||
Franklin Electric Co., Inc. | 1,180 | 51 | ||||||
FreightCar America, Inc. | 735 | 32 | ||||||
Gardner Denver, Inc. * | 2,695 | 97 | ||||||
GenCorp, Inc. * | 3,250 | 38 |
See financial notes 31
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
General Cable Corp. * | 1,855 | 133 | ||||||
Gibraltar Industries, Inc. | 2,455 | 44 | ||||||
Goodman Global, Inc. * | 6,320 | 156 | ||||||
Graco, Inc. | 2,740 | 108 | ||||||
GrafTech International Ltd. * | 6,710 | 127 | ||||||
Granite Construction, Inc. | 2,195 | 94 | ||||||
Griffon Corp. * | 3,865 | 60 | ||||||
H&E Equipment Services, Inc. * | 1,120 | 20 | ||||||
HEICO Corp. | 200 | 11 | ||||||
HEICO Corp., Class A | 1,245 | 54 | ||||||
Hexcel Corp. * | 5,105 | 128 | ||||||
IDEX Corp. | 3,842 | 136 | ||||||
II-VI, Inc. * | 765 | 27 | ||||||
Insituform Technologies, Inc., Class A * | 1,275 | 18 | ||||||
Interline Brands, Inc. * | 3,260 | 78 | ||||||
Ionatron, Inc. * | 4,100 | 15 | ||||||
Joy Global, Inc. | 2,905 | 169 | ||||||
Kaman Corp. | 2,720 | 103 | ||||||
Kaydon Corp. | 1,315 | 71 | ||||||
Lawson Products, Inc. | 580 | 20 | ||||||
Lincoln Electric Holdings, Inc. | 2,080 | 150 | ||||||
Lindsay Corp. | 240 | 12 | ||||||
McDermott International, Inc. * | 4,190 | 256 | ||||||
Medis Technologies Ltd. * | 200 | 3 | ||||||
Moog, Inc., Class A * | 2,615 | 121 | ||||||
MSC Industrial Direct Co., Inc., Class A | 2,725 | 133 | ||||||
MTC Technologies, Inc. * | 585 | 11 | ||||||
NCI Building Systems, Inc. * | 1,945 | 76 | ||||||
Nordson Corp. | 1,855 | 99 | ||||||
Orbital Sciences Corp. * | 2,855 | 73 | ||||||
Perini Corp. * | 2,180 | 125 | ||||||
Powell Industries, Inc. * | 1,270 | 53 | ||||||
Power-One, Inc. * | 2,250 | 13 | ||||||
Raven Industries, Inc. | 465 | 20 | ||||||
Regal-Beloit Corp. | 2,365 | 116 | ||||||
Robbins & Myers, Inc. | 1,300 | 94 | ||||||
Roper Industries, Inc. | 3,120 | 221 | ||||||
Simpson Manufacturing Co., Inc. | 2,985 | 89 | ||||||
Standex International Corp. | 1,450 | 31 | ||||||
Superior Essex, Inc. * | 2,945 | 98 | ||||||
TAL International Group, Inc. | 3,590 | 85 | ||||||
Taser International, Inc. * | 1,530 | 25 | ||||||
Teledyne Technologies, Inc. * | 2,070 | 108 | ||||||
Tennant Co. | 1,710 | 81 | ||||||
The Genlyte Group, Inc. * | 1,735 | 113 | ||||||
The Gorman-Rupp Co. | 770 | 30 | ||||||
The Greenbrier Cos., Inc. | 2,120 | 57 | ||||||
The Manitowoc Co., Inc. | 4,130 | 203 | ||||||
The Middleby Corp. * | 248 | 16 | ||||||
The Toro Co. | 2,070 | 115 | ||||||
Thomas & Betts Corp. * | 2,625 | 147 | ||||||
TransDigm Group, Inc. * | 6,080 | 277 | ||||||
Tredegar Corp. | 3,675 | 64 | ||||||
Trex Co., Inc. * | 500 | 5 | ||||||
Triumph Group, Inc. | 1,730 | 138 | ||||||
UAP Holding Corp. | 4,670 | 149 | ||||||
United Industrial Corp. | 440 | 36 | ||||||
Universal Forest Products, Inc. | 2,270 | 81 | ||||||
Valmont Industries, Inc. | 1,410 | 135 | ||||||
Vicor Corp. | 1,375 | 19 | ||||||
Wabash National Corp. | 3,045 | 31 | ||||||
Wabtec Corp. | 2,360 | 89 | ||||||
Walter Industries, Inc. | 4,995 | 153 | ||||||
Watsco, Inc. | 2,045 | 85 | ||||||
Watts Water Technologies, Inc., Class A | 2,775 | 79 | ||||||
Woodward Governor Co. | 1,950 | 131 | ||||||
Xerium Technologies, Inc. | 4,455 | 18 | ||||||
9,806 | ||||||||
Commercial Services & Supplies 4.0% | ||||||||
ABM Industries, Inc. | 5,110 | 120 | ||||||
Administaff, Inc. | 1,960 | 78 | ||||||
American Reprographics Co. * | 2,710 | 55 | ||||||
Bowne & Co., Inc. | 4,350 | 76 | ||||||
CBIZ, Inc. * | 6,495 | 58 | ||||||
CDI Corp. | 2,820 | 78 | ||||||
Cenveo, Inc. * | 4,675 | 106 | ||||||
Clean Harbors, Inc. * | 765 | 38 | ||||||
Consolidated Graphics, Inc. * | 1,280 | 82 | ||||||
Copart, Inc. * | 3,465 | 133 | ||||||
CoStar Group, Inc. * | 640 | 37 | ||||||
Covanta Holding Corp. * | 4,915 | 133 | ||||||
CRA International, Inc. * | 445 | 23 | ||||||
Diamond Management & Technology Consultants, Inc. | 1,500 | 16 | ||||||
Ennis, Inc. | 1,240 | 25 | ||||||
Equifax, Inc. | 210 | 8 | ||||||
FTI Consulting, Inc. * | 2,165 | 118 | ||||||
G&K Services, Inc., Class A | 2,150 | 87 | ||||||
Healthcare Services Group, Inc. | 870 | 19 | ||||||
Heidrick & Struggles International, Inc. | 870 | 38 | ||||||
Herman Miller, Inc. | 2,730 | 74 | ||||||
Hudson Highland Group, Inc. * | 2,685 | 31 | ||||||
Huron Consulting Group, Inc. * | 130 | 9 | ||||||
IHS, Inc., Class A * | 1,710 | 108 | ||||||
Innerworkings, Inc. * | 200 | 3 | ||||||
Interface, Inc., Class A | 4,225 | 81 | ||||||
Kenexa Corp. * | 535 | 16 | ||||||
Knoll, Inc. | 6,500 | 123 | ||||||
Korn/Ferry International * | 2,530 | 49 | ||||||
Labor Ready, Inc. * | 3,730 | 66 | ||||||
LECG Corp. * | 1,155 | 20 | ||||||
McGrath Rentcorp | 2,225 | 76 | ||||||
Mine Safety Appliances Co. | 2,485 | 114 | ||||||
Mobile Mini, Inc. * | 1,125 | 20 | ||||||
Navigant Consulting, Inc. * | 2,325 | 31 | ||||||
Pike Electric Corp. * | 2,020 | 40 | ||||||
Resources Connection, Inc. | 900 | 21 | ||||||
Rollins, Inc. | 2,510 | 76 | ||||||
Schawk, Inc. | 1,860 | 42 | ||||||
School Specialty, Inc. * | 2,500 | 84 | ||||||
Spherion Corp. * | 13,190 | 115 | ||||||
Stericycle, Inc. * | 2,390 | 139 | ||||||
TeleTech Holdings, Inc. * | 2,830 | 71 | ||||||
Tetra Tech, Inc. * | 4,755 | 111 | ||||||
The Advisory Board Co. * | 330 | 21 | ||||||
The Corporate Executive Board Co. | 450 | 32 | ||||||
The Geo Group, Inc. * | 2,590 | 82 | ||||||
The Standard Register Co. | 7,050 | 90 | ||||||
Viad Corp. | 3,165 | 112 |
32 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Volt Information Sciences, Inc. * | 3,150 | 49 | ||||||
Waste Connections, Inc. * | 4,730 | 160 | ||||||
Watson Wyatt Worldwide, Inc., Class A | 995 | 47 | ||||||
3,441 | ||||||||
Consumer Durables & Apparel 3.3% | ||||||||
Arctic Cat, Inc. | 2,400 | 35 | ||||||
Avatar Holdings, Inc. * | 745 | 35 | ||||||
Blyth, Inc. | 6,090 | 116 | ||||||
Brookfield Homes Corp. | 3,195 | 48 | ||||||
Callaway Golf Co. | 6,555 | 114 | ||||||
Carter’s, Inc. * | 2,025 | 45 | ||||||
Champion Enterprises, Inc. * | 8,105 | 96 | ||||||
Columbia Sportswear Co. | 2,580 | 126 | ||||||
Crocs, Inc. * | 460 | 34 | ||||||
CSS Industries, Inc. | 895 | 35 | ||||||
Deckers Outdoor Corp. * | 430 | 60 | ||||||
Ethan Allen Interiors, Inc. | 3,485 | 108 | ||||||
Fossil, Inc. * | 3,805 | 143 | ||||||
Iconix Brand Group, Inc. * | 900 | 21 | ||||||
JAKKS Pacific, Inc. * | 2,725 | 72 | ||||||
Jarden Corp. * | 4,777 | 170 | ||||||
K-Swiss, Inc., Class A | 2,530 | 59 | ||||||
Kenneth Cole Productions, Inc., Class A | 1,140 | 21 | ||||||
Kimball International, Inc., Class B | 4,625 | 62 | ||||||
Leapfrog Enterprises, Inc. * | 6,235 | 47 | ||||||
Levitt Corp., Class A | 1,130 | 2 | ||||||
M/I Homes, Inc. | 2,940 | 49 | ||||||
Marine Products Corp. | 3,180 | 26 | ||||||
National Presto Industries, Inc. | 445 | 24 | ||||||
Nautilus, Inc. | 1,875 | 12 | ||||||
Oakley, Inc. * | 3,455 | 101 | ||||||
Oxford Industries, Inc. | 1,010 | 26 | ||||||
Palm Harbor Homes, Inc. * | 3,200 | 46 | ||||||
Phillips-Van Heusen Corp. | 2,070 | 99 | ||||||
Pool Corp. | 1,780 | 42 | ||||||
Quiksilver, Inc. * | 8,550 | 115 | ||||||
RC2 Corp. * | 1,320 | 39 | ||||||
Russ Berrie & Co., Inc. * | 6,455 | 113 | ||||||
Sealy Corp. | 3,530 | 47 | ||||||
Skechers U.S.A., Inc., Class A * | 2,785 | 68 | ||||||
Skyline Corp. | 1,485 | 53 | ||||||
Smith & Wesson Holding Corp. * | 200 | 2 | ||||||
Steven Madden Ltd. | 575 | 13 | ||||||
Tarragon Corp. * | 1,360 | 3 | ||||||
Tempur-Pedic International, Inc. | 3,615 | 130 | ||||||
The Warnaco Group, Inc. * | 4,060 | 165 | ||||||
TOUSA, Inc. | 14,680 | 11 | ||||||
Under Armour, Inc., Class A * | 235 | 15 | ||||||
UniFirst Corp. | 2,025 | 76 | ||||||
Volcom, Inc. * | 1,235 | 36 | ||||||
Wolverine World Wide, Inc. | 2,750 | 70 | ||||||
2,830 | ||||||||
Consumer Services 5.0% | ||||||||
AFC Enterprises, Inc. * | 6,900 | 92 | ||||||
Ambassadors Groups, Inc. | 880 | 16 | ||||||
Ameristar Casinos, Inc. | 3,335 | 109 | ||||||
Applebee’s International, Inc. | 3,695 | 94 | ||||||
Bally Technologies, Inc. * | 3,025 | 122 | ||||||
BJ’s Restaurants, Inc. * | 560 | 11 | ||||||
Bluegreen Corp. * | 2,970 | 22 | ||||||
Bob Evans Farms, Inc. | 3,265 | 92 | ||||||
Bright Horizons Family Solutions, Inc. * | 1,295 | 50 | ||||||
California Pizza Kitchen, Inc. * | 1,900 | 31 | ||||||
CEC Entertainment, Inc. * | 2,480 | 74 | ||||||
Chipotle Mexican Grill, Inc., Class A * | 760 | 106 | ||||||
Choice Hotels International, Inc. | 1,090 | 42 | ||||||
Churchill Downs, Inc. | 1,095 | 56 | ||||||
CKE Restaurants, Inc. | 4,065 | 66 | ||||||
Coinstar, Inc. * | 1,325 | 46 | ||||||
Corinthian Colleges, Inc. * | 4,865 | 80 | ||||||
DeVry, Inc. | 3,585 | 196 | ||||||
Domino’s Pizza, Inc. | 3,315 | 51 | ||||||
Gaylord Entertainment Co. * | 1,640 | 89 | ||||||
IHOP Corp. | 1,290 | 82 | ||||||
International Speedway Corp., Class A | 2,390 | 106 | ||||||
Isle of Capri Casinos, Inc. * | 5,775 | 117 | ||||||
ITT Educational Services, Inc. * | 1,155 | 147 | ||||||
Jackson Hewitt Tax Service, Inc. | 1,705 | 53 | ||||||
Krispy Kreme Doughnuts, Inc. * | 4,275 | 14 | ||||||
Landry’s Restaurants, Inc. | 2,940 | 84 | ||||||
Life Time Fitness, Inc. * | 1,085 | 66 | ||||||
Matthews International Corp., Class A | 2,115 | 96 | ||||||
MTR Gaming Group, Inc. * | 2,105 | 18 | ||||||
Multimedia Games, Inc. * | 3,280 | 29 | ||||||
O’Charley’s, Inc. | 2,975 | 48 | ||||||
P.F. Chang’s China Bistro, Inc. * | 1,605 | 47 | ||||||
Panera Bread Co., Class A * | 1,175 | 48 | ||||||
Papa John’s International, Inc. * | 2,610 | 61 | ||||||
Penn National Gaming, Inc. * | 2,940 | 182 | ||||||
Pinnacle Entertainment, Inc. * | 2,585 | 76 | ||||||
Pre-Paid Legal Services, Inc. * | 760 | 45 | ||||||
Red Robin Gourmet Burgers, Inc. * | 1,080 | 43 | ||||||
Regis Corp. | 3,275 | 110 | ||||||
Ruby Tuesday, Inc. | 2,970 | 47 | ||||||
Scientific Games Corp., Class A * | 3,630 | 131 | ||||||
Shuffle Master, Inc. * | 1,560 | 21 | ||||||
Sonic Corp. * | 3,200 | 79 | ||||||
Sotheby’s | 1,600 | 87 | ||||||
Speedway Motorsports, Inc. | 2,715 | 99 | ||||||
Steiner Leisure Ltd. * | 760 | 34 | ||||||
Stewart Enterprises, Inc., Class A | 8,860 | 80 | ||||||
Strayer Education, Inc. | 347 | 65 | ||||||
Texas Roadhouse, Inc., Class A * | 2,710 | 34 | ||||||
The Cheesecake Factory, Inc. * | 2,635 | 59 | ||||||
The Marcus Corp. | 2,630 | 51 | ||||||
The Steak n Shake Co. * | 2,970 | 45 | ||||||
Triarc Cos., Inc., Class A | 1,765 | 20 | ||||||
Triarc Cos., Inc., Class B | 1,145 | 13 | ||||||
Trump Entertainment Resorts, Inc. * | 6,335 | 49 | ||||||
Universal Technical Institute, Inc. * | 780 | 15 | ||||||
Vail Resorts, Inc. * | 2,060 | 125 | ||||||
Weight Watchers International, Inc. | 1,880 | 96 | ||||||
WMS Industries, Inc. * | 2,392 | 83 | ||||||
Wynn Resorts Ltd. | 1,285 | 207 | ||||||
4,357 |
See financial notes 33
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Diversified Financials 2.7% | ||||||||
Advance America Cash Advance Centers, Inc. | 7,015 | 67 | ||||||
Advanta Corp., Class A | 352 | 5 | ||||||
Advanta Corp., Class B | 2,242 | 35 | ||||||
Affiliated Managers Group, Inc. * | 1,219 | 160 | ||||||
Apollo Investment Corp. | 2,600 | 54 | ||||||
Ares Capital Corp. | 2,795 | 46 | ||||||
Asset Acceptance Capital Corp. | 2,960 | 32 | ||||||
Calamos Asset Management, Inc., Class A | 2,275 | 77 | ||||||
Capital Southwest Corp. | 66 | 8 | ||||||
Cash America International, Inc. | 1,005 | 39 | ||||||
Cohen & Steers, Inc. | 1,240 | 47 | ||||||
CompuCredit Corp. * | 3,265 | 65 | ||||||
Credit Acceptance Corp. * | 1,575 | 35 | ||||||
Dollar Financial Corp. * | 765 | 25 | ||||||
Eaton Vance Corp. | 3,815 | 191 | ||||||
Encore Capital Group, Inc. * | 2,155 | 25 | ||||||
Financial Federal Corp. | 1,110 | 30 | ||||||
First Cash Financial Services, Inc. * | 590 | 12 | ||||||
GAMCO Investors, Inc., Class A | 1,635 | 101 | ||||||
GFI Group, Inc. * | 755 | 65 | ||||||
Greenhill & Co., Inc. | 335 | 25 | ||||||
IntercontinentalExchange, Inc. * | 225 | 40 | ||||||
International Securities Exchange Holdings, Inc. | 750 | 50 | ||||||
Investment Technology Group, Inc. * | 2,255 | 94 | ||||||
KKR Financial Holdings LLC | 1,337 | 21 | ||||||
Knight Capital Group, Inc., Class A * | 5,345 | 72 | ||||||
LaBranche & Co., Inc. * | 7,975 | 44 | ||||||
MCG Capital Corp. | 6,605 | 93 | ||||||
Merrill Lynch & Co., Inc. | — | — | ||||||
Nasdaq Stock Market, Inc. * | 2,830 | 132 | ||||||
Nelnet, Inc., Class A | 3,960 | 74 | ||||||
optionsXpress Holdings, Inc. | 1,310 | 39 | ||||||
PICO Holdings, Inc. * | 245 | 10 | ||||||
Piper Jaffray Cos., Inc. * | 1,305 | 67 | ||||||
Portfolio Recovery Associates, Inc. | 545 | 25 | ||||||
Resource America, Inc., Class A | 975 | 15 | ||||||
SEI Investments Co. | 3,590 | 114 | ||||||
SWS Group, Inc. | 1,520 | 29 | ||||||
The First Marblehead Corp. | 2,010 | 78 | ||||||
TradeStation Group, Inc. * | 1,585 | 19 | ||||||
Waddell & Reed Financial, Inc., Class A | 5,500 | 183 | ||||||
World Acceptance Corp. * | 260 | 8 | ||||||
2,351 | ||||||||
Energy 7.6% | ||||||||
Alon USA Energy, Inc. | 3,680 | 135 | ||||||
Alpha Natural Resources, Inc. * | 4,345 | 119 | ||||||
APCO Argentina, Inc. | 200 | 21 | ||||||
Atlas America, Inc. | 1,032 | 60 | ||||||
ATP Oil & Gas Corp. * | 745 | 43 | ||||||
Atwood Oceanics, Inc. * | 970 | 82 | ||||||
Aventine Renewable Energy Holdings, Inc. * | 4,615 | 48 | ||||||
Basic Energy Services, Inc. * | 1,745 | 35 | ||||||
Berry Petroleum Co., Class A | 2,260 | 110 | ||||||
Bill Barrett Corp. * | 2,380 | 111 | ||||||
Bois d’Arc Energy, Inc. * | 3,065 | 67 | ||||||
Brigham Exploration Co. * | 4,815 | 35 | ||||||
Bristow Group, Inc. * | 2,485 | 124 | ||||||
Bronco Drilling Co., Inc. * | 605 | 8 | ||||||
Cabot Oil & Gas Corp. | 3,250 | 129 | ||||||
CARBO Ceramics, Inc. | 980 | 44 | ||||||
Carrizo Oil & Gas, Inc. * | 955 | 49 | ||||||
Cheniere Energy, Inc. * | 340 | 14 | ||||||
Clayton Williams Energy, Inc. * | 2,305 | 69 | ||||||
Complete Production Services, Inc. * | 4,310 | 86 | ||||||
Comstock Resources, Inc. * | 4,075 | 149 | ||||||
Copano Energy LLC | 2,200 | 85 | ||||||
Crosstex Energy, Inc. | 2,260 | 83 | ||||||
Delek US Holdings, Inc. | 4,770 | 114 | ||||||
Delta Petroleum Corp. * | 2,315 | 43 | ||||||
Denbury Resources, Inc. * | 5,485 | 310 | ||||||
Dril-Quip, Inc. * | 1,085 | 58 | ||||||
Enbridge Energy Management LLC * | 647 | 35 | ||||||
Encore Acquisition Co. * | 3,905 | 143 | ||||||
Energy Partners Ltd. * | 1,775 | 27 | ||||||
EXCO Resources, Inc. * | 4,605 | 78 | ||||||
Gasco Energy, Inc. * | 2,080 | 5 | ||||||
General Maritime Corp. | 3,065 | 86 | ||||||
Global Industries Ltd. * | 5,105 | 126 | ||||||
Goodrich Petroleum Corp. * | 1,230 | 41 | ||||||
Grey Wolf, Inc. * | 8,585 | 48 | ||||||
GulfMark Offshore, Inc. * | 1,885 | 88 | ||||||
Harvest Natural Resources, Inc. * | 4,750 | 65 | ||||||
Helix Energy Solutions Group, Inc. * | 3,055 | 141 | ||||||
Helmerich & Payne, Inc. | 4,995 | 158 | ||||||
Hercules Offshore, Inc. * | 3,116 | 84 | ||||||
Holly Corp. | 2,070 | 130 | ||||||
Horizon Offshore, Inc. * | 1,250 | 20 | ||||||
Hornbeck Offshore Services, Inc. * | 1,940 | 76 | ||||||
International Coal Group, Inc. * | 14,755 | 79 | ||||||
ION Geophysical Corp. * | 2,505 | 38 | ||||||
Kinder Morgan Management LLC * | 2,532 | 129 | ||||||
Lufkin Industries, Inc. | 755 | 45 | ||||||
Mariner Energy, Inc. * | 4,900 | 123 | ||||||
Newpark Resources, Inc. * | 9,340 | 59 | ||||||
Oceaneering International, Inc. * | 2,500 | 193 | ||||||
Oil States International, Inc. * | 3,810 | 165 | ||||||
Pacific Ethanol, Inc. * | 200 | 2 | ||||||
Parallel Petroleum Corp. * | 955 | 20 | ||||||
Parker Drilling Co. * | 8,150 | 69 | ||||||
Penn Virginia Corp. | 1,940 | 94 | ||||||
Petrohawk Energy Corp. * | 3,820 | 71 | ||||||
Petroleum Development Corp. * | 355 | 16 | ||||||
PetroQuest Energy, Inc. * | 1,485 | 19 | ||||||
Pioneer Drilling Co. * | 1,260 | 15 | ||||||
Plains Exploration & Production Co. * | 3,745 | 191 | ||||||
Quicksilver Resources, Inc. * | 1,525 | 87 | ||||||
Range Resources Corp. | 2,510 | 113 | ||||||
Rentech, Inc. * | 1,200 | 3 | ||||||
Rosetta Resources, Inc. * | 5,430 | 103 | ||||||
RPC, Inc. | 2,415 | 27 | ||||||
St. Mary Land & Exploration Co. | 3,000 | 127 | ||||||
Superior Energy Services, Inc. * | 3,470 | 129 | ||||||
Swift Energy Co. * | 2,605 | 124 |
34 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
TETRA Technologies, Inc. * | 2,380 | 47 | ||||||
The Meridian Resource Corp. * | 23,660 | 60 | ||||||
Toreador Resources Corp. * | 200 | 2 | ||||||
Ultra Petroleum Corp. * | 1,840 | 130 | ||||||
Unit Corp. * | 2,210 | 106 | ||||||
VeraSun Energy * | 1,575 | 21 | ||||||
Verenium Corp. * | 200 | 1 | ||||||
W&T Offshore, Inc. | 3,820 | 102 | ||||||
W-H Energy Services, Inc. * | 1,630 | 94 | ||||||
Warren Resources, Inc. * | 330 | 5 | ||||||
Western Refining, Inc. | 4,435 | 163 | ||||||
Whiting Petroleum Corp. * | 3,650 | 197 | ||||||
6,551 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Casey’s General Stores, Inc. | 5,000 | 143 | ||||||
The Andersons, Inc. | 1,105 | 55 | ||||||
United Natural Foods, Inc. * | 3,055 | 88 | ||||||
286 | ||||||||
Food, Beverage & Tobacco 1.5% | ||||||||
Alico, Inc. | 230 | 11 | ||||||
Alliance One International, Inc. * | 10,830 | 71 | ||||||
Central European Distribution Corp * | 2,360 | 126 | ||||||
Farmer Brothers Co. | 1,825 | 45 | ||||||
Flowers Foods, Inc. | 6,337 | 139 | ||||||
Hansen Natural Corp. * | 755 | 51 | ||||||
J & J Snack Foods Corp. | 875 | 31 | ||||||
Lancaster Colony Corp. | 3,465 | 139 | ||||||
Lance, Inc. | 3,080 | 65 | ||||||
Ralcorp Holdings, Inc. * | 1,845 | 104 | ||||||
Reddy Ice Holdings, Inc. | 1,410 | 39 | ||||||
Sanderson Farms, Inc. | 2,700 | 94 | ||||||
The Hain Celestial Group, Inc. * | 2,590 | 91 | ||||||
Tootsie Roll Industries, Inc. | 2,835 | 73 | ||||||
TreeHouse Foods, Inc. * | 3,245 | 91 | ||||||
Vector Group Ltd. | 5,824 | 127 | ||||||
1,297 | ||||||||
Health Care Equipment & Services 5.7% | ||||||||
Align Technology, Inc. * | 765 | 16 | ||||||
Alliance Imaging, Inc. * | 7,375 | 73 | ||||||
Allscripts Healthcare Solutions, Inc. * | 40 | 1 | ||||||
Amedisys, Inc. * | 870 | 37 | ||||||
American Medical Systems Holdings, Inc. * | 1,265 | 16 | ||||||
AMERIGROUP Corp. * | 4,725 | 165 | ||||||
AMN Healthcare Services, Inc. * | 1,665 | 32 | ||||||
AmSurg Corp. * | 2,825 | 75 | ||||||
Analogic Corp. | 865 | 49 | ||||||
ArthroCare Corp. * | 760 | 49 | ||||||
Aspect Medical Systems, Inc. * | 200 | 3 | ||||||
Brookdale Senior Living, Inc. | 1,400 | 52 | ||||||
Centene Corp. * | 2,940 | 69 | ||||||
Cerner Corp. * | 2,505 | 149 | ||||||
Chemed Corp. | 995 | 57 | ||||||
CONMED Corp. * | 3,135 | 89 | ||||||
CorVel Corp. * | 465 | 12 | ||||||
Cross Country Healthcare, Inc. * | 2,965 | 47 | ||||||
Cyberonics, Inc. * | 200 | 3 | ||||||
Datascope Corp. | 1,005 | 36 | ||||||
DJO, Inc. * | 470 | 24 | ||||||
Eclipsys Corp. * | 1,080 | 24 | ||||||
Edwards Lifesciences Corp. * | 2,710 | 136 | ||||||
ev3, Inc. * | 307 | 5 | ||||||
Gen-Probe, Inc. * | 1,195 | 84 | ||||||
Gentiva Health Services, Inc. * | 5,525 | 105 | ||||||
Greatbatch, Inc. * | 1,120 | 28 | ||||||
Haemonetics Corp. * | 1,700 | 87 | ||||||
HealthExtras, Inc. * | 900 | 26 | ||||||
Healthspring, Inc. * | 1,250 | 26 | ||||||
Healthways, Inc. * | 760 | 46 | ||||||
Hlth Corp. * | 9,170 | 129 | ||||||
Hologic, Inc. * | 2,120 | 144 | ||||||
ICU Medical, Inc. * | 1,250 | 50 | ||||||
IDEXX Laboratories, Inc. * | 870 | 106 | ||||||
Immucor, Inc. * | 740 | 24 | ||||||
Integra LifeSciences Holdings * | 570 | 28 | ||||||
Intuitive Surgical, Inc. * | 375 | 123 | ||||||
Invacare Corp. | 5,765 | 156 | ||||||
InVentiv Health, Inc. * | 990 | 42 | ||||||
Inverness Medical Innovations, Inc. * | 1,280 | 77 | ||||||
Kinetic Concepts, Inc. * | 2,170 | 130 | ||||||
Kyphon, Inc. * | 750 | 53 | ||||||
Landauer, Inc. | 250 | 12 | ||||||
LCA-Vision, Inc. | 1,230 | 21 | ||||||
Matria Healthcare, Inc. * | 1,110 | 29 | ||||||
MedCath Corp. * | 2,380 | 66 | ||||||
Mentor Corp. | 890 | 38 | ||||||
Meridian Bioscience, Inc. | 525 | 17 | ||||||
Merit Medical Systems, Inc. * | 820 | 11 | ||||||
Molina Healthcare, Inc. * | 2,705 | 103 | ||||||
National Healthcare Corp. | 250 | 12 | ||||||
Nighthawk Radiology Holdings, Inc. * | 1,000 | 24 | ||||||
NuVasive, Inc. * | 200 | 9 | ||||||
Odyssey Healthcare, Inc. * | 1,000 | 10 | ||||||
Palomar Medical Technologies, Inc. * | 630 | 16 | ||||||
Pediatrix Medical Group, Inc. * | 2,155 | 141 | ||||||
PolyMedica Corp. | 1,610 | 85 | ||||||
PSS World Medical, Inc. * | 3,970 | 80 | ||||||
Psychiatric Solutions, Inc. * | 1,595 | 63 | ||||||
Radiation Therapy Services, Inc. * | 260 | 8 | ||||||
RehabCare Group, Inc. * | 2,845 | 59 | ||||||
Res-Care, Inc. * | 3,725 | 92 | ||||||
ResMed, Inc. * | 1,415 | 59 | ||||||
Respironics, Inc. * | 2,825 | 141 | ||||||
Sierra Health Services, Inc. * | 2,740 | 116 | ||||||
Sirona Dental Systems, Inc. * | 1,290 | 43 | ||||||
SonoSite, Inc. * | 1,200 | 42 | ||||||
STERIS Corp. | 5,610 | 163 | ||||||
Sunrise Senior Living, Inc. * | 2,845 | 105 | ||||||
SurModics, Inc. * | 635 | 36 | ||||||
Symmetry Medical, Inc. * | 1,570 | 27 | ||||||
The Cooper Cos., Inc. | 1,985 | 83 | ||||||
The TriZetto Group, Inc. * | 1,195 | 20 | ||||||
Thoratec Corp. * | 1,145 | 23 | ||||||
Universal American Financial Corp. * | 4,795 | 116 | ||||||
VCA Antech, Inc. * | 2,475 | 114 |
See financial notes 35
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Vital Signs, Inc. | 1,245 | 66 | ||||||
WellCare Health Plans, Inc. * | 985 | 24 | ||||||
West Pharmaceutical Services, Inc. | 1,220 | 50 | ||||||
Wright Medical Group, Inc. * | 2,150 | 57 | ||||||
Young Innovations, Inc. | 340 | 9 | ||||||
Zoll Medical Corp. * | 875 | 21 | ||||||
4,894 | ||||||||
Household & Personal Products 1.0% | ||||||||
Bare Escentuals, Inc. * | 5,135 | 127 | ||||||
Central Garden & Pet Co. * | 3,000 | 25 | ||||||
Central Garden & Pet Co., Class A * | 4,530 | 38 | ||||||
Chattem, Inc. * | 755 | 56 | ||||||
Church & Dwight Co., Inc. | 2,715 | 128 | ||||||
Elizabeth Arden, Inc. * | 3,070 | 76 | ||||||
Herbalife Ltd. | 3,805 | 168 | ||||||
Nu Skin Enterprises, Inc., Class A | 5,910 | 102 | ||||||
Prestige Brands Holdings, Inc. * | 2,510 | 26 | ||||||
Revlon, Inc., Class A * | 24,910 | 29 | ||||||
USANA Health Sciences, Inc. * | 630 | 26 | ||||||
WD-40 Co. | 1,915 | 76 | ||||||
877 | ||||||||
Insurance 3.3% | ||||||||
Alfa Corp. | 6,215 | 113 | ||||||
American Equity Investment Life Holding Co. | 3,835 | 38 | ||||||
Argo Group International Holdings Ltd. * | 2,459 | 105 | ||||||
Baldwin & Lyons, Inc., Class B | 2,350 | 62 | ||||||
Brown & Brown, Inc. | 4,940 | 124 | ||||||
Citizens, Inc. * | 4,280 | 37 | ||||||
CNA Surety Corp. * | 2,320 | 46 | ||||||
Crawford & Co., Class A * | 6,605 | 37 | ||||||
Crawford & Co., Class B * | 5,415 | 36 | ||||||
Delphi Financial Group, Inc., Class A | 3,320 | 129 | ||||||
FBL Financial Group, Inc., Class A | 2,700 | 109 | ||||||
First Acceptance Corp. * | 4,110 | 18 | ||||||
Harleysville Group, Inc. | 2,435 | 76 | ||||||
Hilb Rogal & Hobbs Co. | 1,760 | 78 | ||||||
Hilltop Holdings, Inc. * | 3,190 | 38 | ||||||
Horace Mann Educators Corp. | 4,670 | 97 | ||||||
Infinity Property & Casualty Corp. | 2,445 | 98 | ||||||
IPC Holdings Ltd. | 4,435 | 133 | ||||||
Kansas City Life Insurance Co. | 1,435 | 67 | ||||||
National Financial Partners Corp. | 1,525 | 83 | ||||||
National Western Life Insurance Co., Class A | 364 | 79 | ||||||
Philadelphia Consolidated Holding Corp. * | 2,595 | 106 | ||||||
PMA Capital Corp., Class A * | 5,570 | 55 | ||||||
Presidential Life Corp. | 2,945 | 52 | ||||||
ProAssurance Corp. * | 1,745 | 96 | ||||||
RLI Corp. | 1,310 | 76 | ||||||
Safety Insurance Group, Inc. | 1,005 | 36 | ||||||
Scottish Re Group Ltd. * | 32,340 | 83 | ||||||
Selective Insurance Group, Inc. | 5,140 | 125 | ||||||
State Auto Financial Corp. | 3,230 | 89 | ||||||
Stewart Information Services Corp. | 2,970 | 86 | ||||||
The Midland Co. | 1,615 | 103 | ||||||
The Navigators Group, Inc. * | 985 | 59 | ||||||
Tower Group, Inc. | 735 | 22 | ||||||
United America Indemnity Ltd., Class A * | 2,790 | 62 | ||||||
United Fire & Casualty Co. | 2,260 | 72 | ||||||
Zenith National Insurance Corp. | 2,390 | 96 | ||||||
2,821 | ||||||||
Materials 5.9% | ||||||||
A. Schulman, Inc. | 5,670 | 134 | ||||||
AMCOL International Corp. | 1,420 | 57 | ||||||
Apex Silver Mines Ltd. * | 395 | 8 | ||||||
AptarGroup, Inc. | 4,940 | 221 | ||||||
Arch Chemicals, Inc. | 3,050 | 139 | ||||||
Buckeye Technologies, Inc. * | 5,680 | 102 | ||||||
Caraustar Industries, Inc. * | 5,605 | 23 | ||||||
Carpenter Technology Corp. | 1,230 | 178 | ||||||
Century Aluminum Co. * | 1,815 | 106 | ||||||
CF Industries Holdings, Inc. | 2,825 | 248 | ||||||
Chesapeake Corp. | 5,045 | 37 | ||||||
Cleveland-Cliffs, Inc. | 1,620 | 155 | ||||||
Coeur d’Alene Mines Corp. * | 2,795 | 11 | ||||||
Compass Minerals International, Inc. | 2,830 | 105 | ||||||
Deltic Timber Corp. | 740 | 41 | ||||||
Eagle Materials, Inc. | 2,590 | 102 | ||||||
Ferro Corp. | 6,530 | 135 | ||||||
Florida Rock Industries, Inc. | 2,275 | 143 | ||||||
Georgia Gulf Corp. | 5,505 | 67 | ||||||
Glatfelter | 4,645 | 75 | ||||||
H.B. Fuller Co. | 5,180 | 153 | ||||||
Headwaters, Inc. * | 3,420 | 49 | ||||||
Hecla Mining Co. * | 3,365 | 32 | ||||||
Innospec, Inc. | 2,180 | 46 | ||||||
Metal Management, Inc. | 1,320 | 69 | ||||||
Minerals Technologies, Inc. | 1,930 | 136 | ||||||
Myers Industries, Inc. | 4,205 | 89 | ||||||
Neenah Paper, Inc. | 1,815 | 62 | ||||||
NewMarket Corp. | 1,735 | 93 | ||||||
NL Industries, Inc. | 11,065 | 122 | ||||||
OM Group, Inc. * | 2,715 | 144 | ||||||
PolyOne Corp. * | 17,205 | 138 | ||||||
Quanex Corp. | 3,450 | 142 | ||||||
Rock-Tenn Co., Class A | 3,915 | 114 | ||||||
Royal Gold, Inc. | 830 | 29 | ||||||
RTI International Metals, Inc. * | 740 | 58 | ||||||
Schnitzer Steel Industries, Inc., Class A | 1,740 | 115 | ||||||
Schweitzer-Mauduit International, Inc. | 3,310 | 93 | ||||||
Sensient Technologies Corp. | 5,845 | 175 | ||||||
Spartech Corp. | 3,585 | 55 | ||||||
Stepan Co. | 2,365 | 82 | ||||||
Stillwater Mining Co. * | 5,940 | 66 | ||||||
Symyx Technologies, Inc. * | 610 | 6 | ||||||
Terra Industries, Inc. * | 6,990 | 258 | ||||||
Texas Industries, Inc. | 1,945 | 142 | ||||||
Titanium Metals Corp. * | 4,590 | 162 | ||||||
Tronox, Inc., Class A | 1,805 | 15 | ||||||
Tronox, Inc., Class B | 1,850 | 15 | ||||||
W.R. Grace & Co. * | 4,565 | 135 | ||||||
Wausau Paper Corp. | 6,010 | 60 |
36 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Westlake Chemical Corp. | 4,385 | 108 | ||||||
Wheeling-Pittsburgh Corp. * | 2,510 | 49 | ||||||
Zoltek Cos., Inc. * | 200 | 9 | ||||||
5,108 | ||||||||
Media 2.9% | ||||||||
4Kids Entertainment, Inc. * | 705 | 12 | ||||||
Arbitron, Inc. | 860 | 44 | ||||||
Carmike Cinemas, Inc. | 2,675 | 43 | ||||||
Citadel Broadcasting Corp. | 24,565 | 108 | ||||||
CKX, Inc. * | 2,335 | 28 | ||||||
Courier Corp. | 255 | 10 | ||||||
Cox Radio, Inc., Class A * | 9,095 | 110 | ||||||
Crown Media Holdings, Inc., Class A * | 4,125 | 32 | ||||||
CTC Media, Inc. * | 2,600 | 65 | ||||||
Cumulus Media Inc., Class A * | 6,885 | 71 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 4,345 | 141 | ||||||
Emmis Communications Corp., Class A | 14,330 | 74 | ||||||
Entercom Communications Corp., Class A | 5,325 | 99 | ||||||
Entravision Communications Corp., Class A * | 10,255 | 93 | ||||||
Fisher Communications, Inc. * | 1,245 | 60 | ||||||
Gemstar — TV Guide International, Inc. * | 22,980 | 158 | ||||||
Gray Television, Inc. | 5,715 | 54 | ||||||
Harte-Hanks, Inc. | 3,735 | 66 | ||||||
Interactive Data Corp. | 4,885 | 157 | ||||||
John Wiley & Sons, Inc., Class A | 3,715 | 163 | ||||||
Journal Communications, Inc., Class A | 8,855 | 79 | ||||||
Journal Register Co. | 3,460 | 8 | ||||||
Lee Enterprises, Inc. | 4,370 | 70 | ||||||
Lin TV Corp., Class A * | 10,060 | 147 | ||||||
Martha Stewart Living Omnimedia, Inc., Class A * | 280 | 4 | ||||||
Marvel Entertainment, Inc. * | 2,615 | 65 | ||||||
Media General, Inc., Class A | 3,170 | 89 | ||||||
Mediacom Communications Corp., Class A * | 16,440 | 95 | ||||||
Morningstar, Inc. * | 235 | 17 | ||||||
PRIMEDIA, Inc. | 5,829 | 53 | ||||||
R.H. Donnelley Corp. * | 745 | 41 | ||||||
Radio One, Inc., Class D * | 11,530 | 40 | ||||||
RCN Corp. * | 1,920 | 28 | ||||||
Salem Communications Corp., Class A | 2,445 | 20 | ||||||
Sinclair Broadcast Group, Inc., Class A | 7,810 | 94 | ||||||
Valassis Communications, Inc. * | 5,785 | 57 | ||||||
Westwood One, Inc. | 11,320 | 24 | ||||||
2,519 | ||||||||
Pharmaceuticals & Biotechnology 3.4% | ||||||||
Affymetrix, Inc. * | 2,390 | 61 | ||||||
Albany Molecular Research, Inc. * | 3,945 | 71 | ||||||
Alpharma, Inc., Class A * | 5,295 | 109 | ||||||
Applera Corp.-Celera Group * | 2,585 | 42 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 1,850 | 179 | ||||||
Bruker BioSciences Corp. * | 4,035 | 42 | ||||||
Cambrex Corp. | 1,280 | 15 | ||||||
Celgene Corp. * | 1,090 | 72 | ||||||
Cephalon, Inc. * | 1,835 | 135 | ||||||
Covance, Inc. * | 2,475 | 204 | ||||||
Dionex Corp. * | 750 | 66 | ||||||
Endo Pharmaceuticals Holdings, Inc. * | 3,810 | 112 | ||||||
Enzo Biochem, Inc. * | 1,400 | 17 | ||||||
Enzon Pharmaceuticals, Inc. * | 200 | 2 | ||||||
eResearch Technology, Inc. * | 2,570 | 29 | ||||||
Geron Corp. * | 3,800 | 29 | ||||||
Idenix Pharmaceuticals, Inc. * | 200 | 1 | ||||||
Illumina, Inc. * | 235 | 13 | ||||||
ImClone Systems, Inc. * | 360 | 16 | ||||||
K-V Pharmaceutical Co., Class A * | 1,730 | 54 | ||||||
K-V Pharmaceutical Co., Class B * | 300 | 9 | ||||||
Keryx Biopharmaceuticals, Inc. * | 200 | 2 | ||||||
LifeCell Corp. * | 235 | 10 | ||||||
Luminex Corp. * | 200 | 3 | ||||||
Martek Biosciences Corp. * | 1,840 | 56 | ||||||
Maxygen, Inc. * | 2,400 | 18 | ||||||
Medicis Pharmaceutical Corp., Class A | 1,225 | 36 | ||||||
MGI Pharma, Inc. * | 1,350 | 44 | ||||||
Millennium Pharmaceuticals, Inc. * | 8,700 | 103 | ||||||
Millipore Corp. * | 1,520 | 118 | ||||||
Momenta Pharmaceutical, Inc. * | 200 | 3 | ||||||
Myriad Genetics, Inc. * | 530 | 29 | ||||||
Nabi Biopharmaceuticals * | 1,535 | 6 | ||||||
Nektar Therapeutics * | 85 | 1 | ||||||
Neurocrine Biosciences, Inc. * | 2,295 | 21 | ||||||
Noven Pharmaceuticals, Inc. * | 900 | 14 | ||||||
Onyx Pharmaceuticals, Inc. * | 540 | 25 | ||||||
OSI Pharmaceuticals, Inc. * | 1,030 | 43 | ||||||
Panacos Pharmaceutical, Inc. * | 300 | 1 | ||||||
Par Pharmaceutical Cos., Inc. * | 2,870 | 53 | ||||||
PAREXEL International Corp. * | 1,710 | 79 | ||||||
PDL BioPharma, Inc. * | 1,140 | 24 | ||||||
Perrigo Co. | 4,605 | 109 | ||||||
Pharmaceutical Product Development, Inc. | 2,965 | 125 | ||||||
PharmaNet Development Group, Inc. * | 895 | 29 | ||||||
Pharmion Corp. * | 1,270 | 61 | ||||||
PRA International * | 1,115 | 34 | ||||||
QIAGEN N.V. * | 393 | 9 | ||||||
Salix Pharmaceuticals Ltd. * | 1,495 | 17 | ||||||
Sciele Pharma, Inc. * | 1,335 | 34 | ||||||
Techne Corp. * | 865 | 56 | ||||||
The Medicines Co. * | 145 | 3 | ||||||
United Therapeutics Corp. * | 430 | 29 | ||||||
Valeant Pharmaceuticals International * | 6,775 | 99 | ||||||
Varian, Inc. * | 1,635 | 121 | ||||||
Ventana Medical Systems, Inc. * | 545 | 48 | ||||||
ViroPharma, Inc. * | 2,000 | 17 | ||||||
Waters Corp. * | 2,605 | 201 | ||||||
ZymoGenetics, Inc. * | 70 | 1 | ||||||
2,960 |
See financial notes 37
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Real Estate 4.4% | ||||||||
Acadia Realty Trust | 1,325 | 35 | ||||||
Alexander’s, Inc. * | 200 | 80 | ||||||
Alexandria Real Estate Equities, Inc. | 1,284 | 132 | ||||||
Anthracite Capital, Inc. | 11,725 | 98 | ||||||
Anworth Mortgage Asset Corp. | 8,655 | 59 | ||||||
Ashford Hospitality Trust | 5,245 | 52 | ||||||
BioMed Realty Trust, Inc. | 1,960 | 47 | ||||||
CapitalSource, Inc. | 3,300 | 60 | ||||||
Cedar Shopping Centers, Inc. | 545 | 7 | ||||||
Corporate Office Properties Trust | 1,835 | 76 | ||||||
Deerfield Triarc Capital Corp. | 1,970 | 19 | ||||||
DiamondRock Hospitality Co. | 2,175 | 42 | ||||||
Digital Realty Trust, Inc. | 2,470 | 109 | ||||||
EastGroup Properties, Inc. | 1,830 | 87 | ||||||
Entertainment Properties Trust | 1,830 | 100 | ||||||
Extra Space Storage, Inc. | 2,565 | 40 | ||||||
FelCor Lodging Trust, Inc. | 5,450 | 114 | ||||||
Forest City Enterprises, Inc., Class A | 1,960 | 112 | ||||||
Forest City Enterprises, Inc., Class B | 130 | 7 | ||||||
Franklin Street Properties Corp. | 5,770 | 94 | ||||||
Getty Realty Corp. | 2,860 | 81 | ||||||
GMH Communities Trust | 1,075 | 8 | ||||||
Gramercy Capital Corp. | 875 | 23 | ||||||
HomeBanc Corp. | 6,875 | — | ||||||
Inland Real Estate Corp. | 6,170 | 92 | ||||||
Investors Real Estate Trust | 3,425 | 37 | ||||||
Jones Lang LaSalle, Inc. | 1,181 | 113 | ||||||
Kilroy Realty Corp. | 1,635 | 106 | ||||||
LaSalle Hotel Properties | 1,840 | 76 | ||||||
Lexington Realty Trust | 4,870 | 96 | ||||||
LTC Properties, Inc. | 1,530 | 39 | ||||||
Maguire Properties, Inc. | 2,740 | 75 | ||||||
MFA Mortgage Investments, Inc. | 19,390 | 166 | ||||||
Mid-America Apartment Communities, Inc. | 1,845 | 96 | ||||||
National Health Investors, Inc. | 2,935 | 86 | ||||||
National Retail Properties, Inc. | 6,155 | 156 | ||||||
OMEGA Healthcare Investors, Inc. | 3,290 | 55 | ||||||
Parkway Properties, Inc. | 1,720 | 74 | ||||||
PS Business Parks, Inc. | 1,210 | 70 | ||||||
RAIT Financial Trust | 1,865 | 17 | ||||||
Ramco-Gershenson Properties Trust | 2,030 | 58 | ||||||
Saul Centers, Inc. | 1,085 | 59 | ||||||
Sovran Self Storage, Inc. | 1,410 | 67 | ||||||
Sun Communities, Inc. | 3,955 | 121 | ||||||
Sunstone Hotel Investors, Inc. | 2,605 | 72 | ||||||
Tanger Factory Outlet Centers, Inc. | 1,730 | 73 | ||||||
Taubman Centers, Inc. | 1,955 | 115 | ||||||
Tejon Ranch Co. * | 230 | 9 | ||||||
The St. Joe Co. | 2,970 | 101 | ||||||
U-Store-It Trust | 2,615 | 34 | ||||||
Universal Health Realty Income Trust | 1,900 | 70 | ||||||
Urstadt Biddle Properties, Class A | 1,795 | 30 | ||||||
Washington Real Estate Investment Trust | 3,855 | 136 | ||||||
3,781 | ||||||||
Retailing 4.0% | ||||||||
A.C. Moore Arts & Crafts, Inc. * | 2,260 | 38 | ||||||
Aaron Rents, Inc. | 3,720 | 79 | ||||||
Aeropostale, Inc. * | 3,270 | 75 | ||||||
bebe Stores, Inc. | 1,390 | 19 | ||||||
Big 5 Sporting Goods Corp. | 840 | 15 | ||||||
Blue Nile, Inc. * | 630 | 50 | ||||||
Brown Shoe Co., Inc. | 3,362 | 69 | ||||||
Building Materials Holding Corp. | 4,800 | 38 | ||||||
Cabela’s, Inc. * | 20,480 | 400 | ||||||
Charlotte Russe Holding, Inc. * | 615 | 9 | ||||||
Chico’s FAS, Inc. * | 8,005 | 105 | ||||||
Christopher & Banks Corp. | 1,140 | 16 | ||||||
Coldwater Creek, Inc. * | 2,540 | �� | 23 | |||||
Conn’s, Inc. * | 2,965 | 76 | ||||||
Cost Plus, Inc. * | 5,430 | 16 | ||||||
dELiA *s, Inc. * | 2,700 | 9 | ||||||
Dick’s Sporting Goods, Inc. * | 5,400 | 180 | ||||||
DSW, Inc., Class A * | 1,745 | 39 | ||||||
Fred’s, Inc., Class A | 4,730 | 50 | ||||||
Genesco, Inc. * | 2,480 | 115 | ||||||
GSI Commerce, Inc. * | 980 | 28 | ||||||
Guess?, Inc. | 1,735 | 89 | ||||||
Haverty Furniture Cos., Inc. | 3,995 | 34 | ||||||
Hibbett Sports, Inc. * | 585 | 14 | ||||||
Hot Topic, Inc. * | 4,420 | 34 | ||||||
J. Crew Group, Inc. * | 1,230 | 46 | ||||||
Jo-Ann Stores, Inc. * | 5,650 | 109 | ||||||
Jos. A. Bank Clothiers, Inc. * | 1,490 | 43 | ||||||
Lithia Motors, Inc., Class A | 4,035 | 68 | ||||||
LKQ Corp. * | 2,375 | 92 | ||||||
Netflix, Inc. * | 2,255 | 60 | ||||||
New York & Co., Inc. * | 4,400 | 31 | ||||||
NutriSystem, Inc. * | 530 | 16 | ||||||
Overstock.com, Inc. * | 1,080 | 42 | ||||||
Pacific Sunwear of California, Inc. * | 7,150 | 119 | ||||||
Priceline.com, Inc. * | 1,310 | 122 | ||||||
Select Comfort Corp. * | 1,370 | 16 | ||||||
Source Interlink Cos., Inc. * | 9,870 | 31 | ||||||
Stage Stores, Inc. | 3,195 | 60 | ||||||
Stamps.com, Inc. * | 2,345 | 32 | ||||||
Stein Mart, Inc. | 2,495 | 16 | ||||||
Systemax, Inc. | 3,585 | 84 | ||||||
The Buckle, Inc. | 2,215 | 95 | ||||||
The Cato Corp., Class A | 3,365 | 68 | ||||||
The Children’s Place Retail Stores, Inc. * | 1,640 | 42 | ||||||
The Dress Barn, Inc. * | 2,875 | 47 | ||||||
The Finish Line, Inc., Class A | 5,980 | 22 | ||||||
The Gymboree Corp. * | 1,820 | 62 | ||||||
The Men’s Wearhouse, Inc. | 3,055 | 129 | ||||||
Tractor Supply Co. * | 2,490 | 103 | ||||||
Tuesday Morning Corp. | 2,230 | 17 | ||||||
Tween Brands, Inc. * | 2,365 | 73 | ||||||
Urban Outfitters, Inc. * | 4,015 | 101 | ||||||
ValueVision Media, Inc., Class A * | 2,640 | 14 | ||||||
West Marine, Inc. * | 4,880 | 53 |
38 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Zumiez, Inc. * | 1,030 | 43 | ||||||
3,476 | ||||||||
Semiconductors & Semiconductor Equipment 3.3% | ||||||||
Actel Corp. * | 2,630 | 30 | ||||||
Advanced Analogic Technologies, Inc. * | 2,000 | 24 | ||||||
Advanced Energy Industries, Inc. * | 720 | 12 | ||||||
AMIS Holdings, Inc. * | 9,565 | 73 | ||||||
Applied Micro Circuits Corp. * | 9,760 | 31 | ||||||
Asyst Technologies, Inc. * | 4,995 | 24 | ||||||
Atheros Communications * | 745 | 26 | ||||||
ATMI, Inc. * | 1,715 | 55 | ||||||
Axcelis Technologies, Inc. * | 5,260 | 25 | ||||||
Brooks Automation, Inc. * | 1,290 | 17 | ||||||
Cabot Microelectronics Corp. * | 1,930 | 77 | ||||||
Cirrus Logic, Inc. * | 2,835 | 17 | ||||||
Cohu, Inc. | 1,610 | 26 | ||||||
Conexant Systems, Inc. * | 24,520 | 31 | ||||||
Credence Systems Corp. * | 10,615 | 32 | ||||||
Cree, Inc. * | 5,295 | 148 | ||||||
Cymer, Inc. * | 1,220 | 52 | ||||||
Cypress Semiconductor Corp. * | 6,705 | 245 | ||||||
Diodes, Inc. * | 1,147 | 38 | ||||||
DSP Group, Inc. * | 1,940 | 31 | ||||||
Entegris, Inc. * | 6,665 | 61 | ||||||
Exar Corp. * | 3,315 | 40 | ||||||
FEI Co. * | 1,420 | 41 | ||||||
FormFactor, Inc. * | 465 | 18 | ||||||
Genesis Microchip, Inc. * | 4,075 | 30 | ||||||
Hittite Microwave Corp. * | 735 | 37 | ||||||
Integrated Device Technology, Inc. * | 5,895 | 79 | ||||||
Kopin Corp. * | 5,900 | 24 | ||||||
Lattice Semiconductor Corp. * | 6,325 | 27 | ||||||
LTX Corp. * | 3,645 | 12 | ||||||
MEMC Electronic Materials, Inc. * | 2,500 | 183 | ||||||
Micrel, Inc. | 2,250 | 20 | ||||||
Microsemi Corp. * | 1,945 | 52 | ||||||
MKS Instruments, Inc. * | 3,150 | 63 | ||||||
Netlogic Microsystems, Inc. * | 540 | 18 | ||||||
OmniVision Technologies, Inc. * | 2,980 | 66 | ||||||
ON Semiconductor Corp. * | 7,975 | 81 | ||||||
Pericom Semiconductor Corp. * | 1,820 | 27 | ||||||
Photronics, Inc. * | 5,545 | 61 | ||||||
PMC-Sierra, Inc. * | 5,125 | 46 | ||||||
Rambus, Inc. * | 1,865 | 37 | ||||||
RF Micro Devices, Inc. * | 7,765 | 48 | ||||||
Rudolph Technologies, Inc. * | 1,380 | 18 | ||||||
Semtech Corp. * | 2,505 | 43 | ||||||
Silicon Image, Inc. * | 2,460 | 16 | ||||||
Silicon Laboratories, Inc. * | 2,270 | 99 | ||||||
Silicon Storage Technology, Inc. * | 4,055 | 14 | ||||||
SiRF Technology Holdings, Inc. * | 1,965 | 59 | ||||||
Skyworks Solutions, Inc. * | 12,710 | 117 | ||||||
Standard Microsystems Corp. * | 990 | 39 | ||||||
Supertex, Inc. * | 1,200 | 44 | ||||||
Tessera Technologies, Inc. * | 1,240 | 47 | ||||||
Trident Microsystems, Inc. * | 850 | 6 | ||||||
TriQuint Semiconductor, Inc. * | 9,020 | 57 | ||||||
Varian Semiconductor Equipment Associates, Inc. * | 2,252 | 104 | ||||||
Veeco Instruments, Inc. * | 1,340 | 24 | ||||||
Zoran Corp. * | 2,735 | 70 | ||||||
2,842 | ||||||||
Software & Services 5.8% | ||||||||
ACI Worldwide, Inc. * | 595 | 14 | ||||||
Acxiom Corp. | 5,575 | 73 | ||||||
Advent Software, Inc. * | 260 | 14 | ||||||
Akamai Technologies, Inc. * | 1,175 | 46 | ||||||
Ansoft Corp. * | 230 | 7 | ||||||
ANSYS, Inc. * | 1,000 | 39 | ||||||
Ariba, Inc. * | 2,745 | 36 | ||||||
Aspen Technology, Inc. * | 2,280 | 40 | ||||||
Autodesk, Inc. * | 3,370 | 165 | ||||||
BearingPoint, Inc. * | 15,120 | 72 | ||||||
Blackbaud, Inc. | 455 | 12 | ||||||
Blackboard, Inc. * | 1,235 | 62 | ||||||
Borland Software Corp. * | 3,890 | 17 | ||||||
CACI International, Inc., Class A * | 2,385 | 128 | ||||||
CDC Corp., Class A * | 2,870 | 21 | ||||||
CIBER, Inc. * | 7,670 | 60 | ||||||
CMGI, Inc. * | 6,955 | 10 | ||||||
CNET Networks, Inc. * | 2,780 | 22 | ||||||
Cognizant Technology Solutions Corp., Class A * | 2,770 | 115 | ||||||
Commvault Systems, Inc. * | 200 | 4 | ||||||
Concur Technologies, Inc. * | 1,000 | 36 | ||||||
CSG Systems International, Inc. * | 2,845 | 58 | ||||||
DealerTrack Holdings, Inc. * | 345 | 17 | ||||||
Digital River, Inc. * | 250 | 13 | ||||||
DivX, Inc. * | 50 | 1 | ||||||
EarthLink, Inc. * | 16,775 | 133 | ||||||
Entrust, Inc. * | 1,700 | 3 | ||||||
Epicor Software Corp. * | 1,045 | 12 | ||||||
EPIQ Systems, Inc. * | 1,570 | 30 | ||||||
Equinix, Inc. * | 530 | 62 | ||||||
eSPEED, Inc., Class A * | 3,620 | 37 | ||||||
Euronet Worldwide, Inc. * | 2,195 | 70 | ||||||
FactSet Research Systems, Inc. | 865 | 61 | ||||||
Fair Isaac Corp. | 2,385 | 90 | ||||||
FalconStor Software, Inc. * | 200 | 3 | ||||||
Forrester Research, Inc. * | 475 | 11 | ||||||
Gartner, Inc. * | 4,500 | 99 | ||||||
Gevity HR, Inc. | 2,815 | 28 | ||||||
Global Cash Access Holdings, Inc. * | 2,535 | 25 | ||||||
Global Payments, Inc. | 2,370 | 113 | ||||||
Heartland Payment Systems, Inc. | 1,605 | 48 | ||||||
Informatica Corp. * | 1,475 | 25 | ||||||
InfoSpace, Inc. | 2,710 | 52 | ||||||
infoUSA, Inc. | 3,315 | 35 | ||||||
Internap Network Services Corp. * | 1,365 | 23 | ||||||
Interwoven, Inc. * | 2,225 | 32 | ||||||
j2 Global Communications, Inc. * | 985 | 33 | ||||||
Jack Henry & Associates, Inc. | 3,480 | 102 | ||||||
JDA Software Group, Inc. * | 2,585 | 65 | ||||||
Jupitermedia Corp. * | 980 | 5 | ||||||
Lawson Software, Inc. * | 4,020 | 45 | ||||||
Macrovision Corp. * | 2,260 | 54 | ||||||
Magma Design Automation, Inc. * | 685 | 10 | ||||||
Manhattan Associates, Inc. * | 1,095 | 33 | ||||||
ManTech International Corp., Class A * | 1,760 | 70 | ||||||
MAXIMUS, Inc. | 2,145 | 103 |
See financial notes 39
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Mentor Graphics Corp. * | 4,280 | 69 | ||||||
MICROS Systems, Inc. * | 1,080 | 78 | ||||||
MicroStrategy, Inc., Class A * | 628 | 62 | ||||||
Midway Games, Inc. * | 4,600 | 14 | ||||||
MPS Group, Inc. * | 9,045 | 110 | ||||||
MSC.Software Corp. * | 2,415 | 33 | ||||||
NAVTEQ Corp. * | 2,355 | 182 | ||||||
Net 1 UEPS Technologies, Inc. * | 880 | 28 | ||||||
Nuance Communications, Inc. * | 3,155 | 70 | ||||||
Openwave Systems, Inc. | 4,435 | 18 | ||||||
Parametric Technology Corp. * | 3,100 | 59 | ||||||
Progress Software Corp. * | 2,550 | 83 | ||||||
Quality Systems, Inc. | 530 | 19 | ||||||
Quest Software, Inc. * | 4,180 | 73 | ||||||
RealNetworks, Inc. * | 5,845 | 42 | ||||||
Red Hat, Inc. * | 1,600 | 35 | ||||||
Renaissance Learning, Inc. | 2,540 | 36 | ||||||
S1 Corp. * | 5,470 | 46 | ||||||
Salesforce.com, Inc. * | 1,235 | 70 | ||||||
Sapient Corp. * | 3,180 | 22 | ||||||
SINA Corp. * | 980 | 56 | ||||||
Sohu.com, Inc. * | 760 | 46 | ||||||
Sonic Solutions * | 1,465 | 18 | ||||||
SonicWALL, Inc. * | 3,855 | 40 | ||||||
SPSS, Inc. * | 1,060 | 40 | ||||||
SRA International, Inc., Class A * | 2,815 | 77 | ||||||
Sybase, Inc. * | 5,125 | 147 | ||||||
Sykes Enterprises, Inc. * | 2,630 | 46 | ||||||
Syntel, Inc. | 2,335 | 99 | ||||||
Take-Two Interactive Software, Inc. * | 6,335 | 119 | ||||||
The Knot, Inc. * | 1,000 | 19 | ||||||
The Ultimate Software Group, Inc. * | 1,000 | 35 | ||||||
THQ, Inc. * | 2,930 | 79 | ||||||
TIBCO Software, Inc. * | 7,830 | 72 | ||||||
TNS, Inc. | 2,275 | 37 | ||||||
Tyler Technologies, Inc. * | 1,915 | 31 | ||||||
United Online, Inc. | 2,765 | 49 | ||||||
ValueClick, Inc. * | 2,260 | 61 | ||||||
VeriFone Holdings, Inc. * | 1,895 | 94 | ||||||
Vignette Corp. * | 1,620 | 28 | ||||||
Websense, Inc. * | 1,090 | 20 | ||||||
Wind River Systems, Inc. * | 3,050 | 38 | ||||||
Wright Express Corp. * | 1,000 | 39 | ||||||
5,033 | ||||||||
Technology Hardware & Equipment 6.2% | ||||||||
3Com Corp. * | 22,120 | 108 | ||||||
Adaptec, Inc. * | 16,195 | 57 | ||||||
ADC Telecommunications, Inc. * | 6,000 | 112 | ||||||
ADTRAN, Inc. | 4,045 | 97 | ||||||
Agilysys, Inc. | 4,122 | 71 | ||||||
Amphenol Corp., Class A | 3,840 | 170 | ||||||
Arris Group, Inc. * | 3,965 | 46 | ||||||
Avid Technology, Inc. * | 2,925 | 86 | ||||||
Avocent Corp. * | 2,190 | 59 | ||||||
Black Box Corp. | 1,940 | 78 | ||||||
Brightpoint, Inc. * | 10,500 | 170 | ||||||
Brocade Communications Systems, Inc. * | 8,520 | 81 | ||||||
Checkpoint Systems, Inc. * | 4,720 | 143 | ||||||
Ciena Corp. * | 1,280 | 61 | ||||||
Cogent, Inc. * | 2,780 | 41 | ||||||
Cognex Corp. | 1,365 | 25 | ||||||
Coherent, Inc. * | 2,600 | 85 | ||||||
CommScope, Inc. * | 2,605 | 123 | ||||||
Comtech Telecommunications Corp. * | 870 | 47 | ||||||
CTS Corp. | 3,195 | 39 | ||||||
Daktronics, Inc. | 1,165 | 35 | ||||||
Ditech Networks, Inc. * | 4,400 | 22 | ||||||
Dolby Laboratories, Inc., Class A * | 2,245 | 93 | ||||||
Dycom Industries, Inc. * | 3,910 | 110 | ||||||
Echelon Corp. * | 1,850 | 41 | ||||||
Electro Scientific Industries, Inc. * | 2,255 | 49 | ||||||
Electronics for Imaging, Inc. * | 2,980 | 68 | ||||||
Emulex Corp. * | 3,925 | 85 | ||||||
Excel Technology, Inc. * | 460 | 13 | ||||||
Extreme Networks, Inc. * | 4,765 | 21 | ||||||
F5 Networks, Inc. * | 1,490 | 54 | ||||||
Finisar Corp. * | 5,025 | 12 | ||||||
FLIR Systems, Inc. * | 1,945 | 135 | ||||||
Foundry Networks, Inc. * | 5,875 | 124 | ||||||
Harmonic, Inc. * | 2,225 | 27 | ||||||
Hughes Communications, Inc. * | 230 | 14 | ||||||
Hutchinson Technology, Inc. * | 4,600 | 109 | ||||||
Imation Corp. | 3,825 | 85 | ||||||
InterDigital, Inc. * | 745 | 16 | ||||||
Intermec, Inc. * | 4,035 | 103 | ||||||
Itron, Inc. * | 1,065 | 114 | ||||||
Ixia * | 1,415 | 15 | ||||||
KEMET Corp. * | 13,515 | 96 | ||||||
Littelfuse, Inc. * | 2,005 | 64 | ||||||
Loral Space & Communications, Inc. * | 1,950 | 79 | ||||||
MasTec, Inc. * | 4,510 | 71 | ||||||
Mercury Computer Systems, Inc. * | 2,100 | 33 | ||||||
Methode Electronics, Inc. | 3,730 | 47 | ||||||
MTS Systems Corp. | 880 | 39 | ||||||
Multi-Fineline Electronix, Inc. * | 720 | 10 | ||||||
National Instruments Corp. | 2,695 | 87 | ||||||
NETGEAR, Inc. * | 1,000 | 35 | ||||||
Newport Corp. * | 2,130 | 29 | ||||||
Novatel Wireless, Inc. * | 755 | 20 | ||||||
OSI Systems, Inc. * | 590 | 15 | ||||||
Palm, Inc. | 4,315 | 39 | ||||||
Park Electrochemical Corp. | 1,710 | 54 | ||||||
Photon Dynamics, Inc. * | 400 | 4 | ||||||
Plantronics, Inc. | 2,710 | 74 | ||||||
Plexus Corp. * | 5,180 | 134 | ||||||
Polycom, Inc. * | 3,450 | 97 | ||||||
Powerwave Technologies, Inc. * | 12,260 | 68 | ||||||
QLogic Corp. * | 7,080 | 110 | ||||||
Quantum Corp. * | 36,175 | 145 | ||||||
Rackable Systems, Inc. * | 1,560 | 21 | ||||||
Riverbed Technology, Inc. * | 540 | 18 | ||||||
Rofin-Sinar Technologies, Inc. * | 755 | 59 | ||||||
Rogers Corp. * | 1,570 | 77 | ||||||
ScanSource, Inc. * | 2,800 | 103 | ||||||
SeaChange International, Inc. * | 2,740 | 17 | ||||||
Sonus Networks, Inc. * | 2,590 | 18 | ||||||
Sycamore Networks, Inc. * | 7,905 | 34 | ||||||
Symmetricom, Inc. * | 1,535 | 7 | ||||||
Synaptics, Inc. * | 870 | 47 | ||||||
Technitrol, Inc. | 2,590 | 76 | ||||||
Tekelec * | 3,635 | 48 |
40 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Tektronix, Inc. | 3,730 | 141 | ||||||
Trimble Navigation Ltd. * | 3,455 | 144 | ||||||
ViaSat, Inc. * | 475 | 15 | ||||||
Zebra Technologies Corp., Class A * | 2,840 | 111 | ||||||
5,330 | ||||||||
Telecommunication Services 1.9% | ||||||||
Alaska Communication Systems Group, Inc. | 2,640 | 43 | ||||||
Cbeyond, Inc. * | 535 | 21 | ||||||
Centennial Communications Corp. * | 12,725 | 130 | ||||||
Cogent Communications Group, Inc. * | 645 | 18 | ||||||
Dobson Communications Corp., Class A * | 15,400 | 199 | ||||||
FairPoint Communications, Inc. | 3,330 | 62 | ||||||
General Communication, Inc., Class A * | 3,960 | 46 | ||||||
Golden Telecom, Inc. | 2,325 | 240 | ||||||
IDT Corp. | 1,475 | 12 | ||||||
IDT Corp., Class B | 7,250 | 58 | ||||||
InPhonic, Inc. * | 200 | — | ||||||
Iowa Telecommunications Services, Inc. | 2,930 | 58 | ||||||
iPCS, Inc. | 740 | 26 | ||||||
Leap Wireless International, Inc. * | 1,865 | 133 | ||||||
Neustar, Inc., Class A * | 575 | 20 | ||||||
North Pittsburgh Systems, Inc. | 1,120 | 27 | ||||||
NTELOS Holdings Corp. | 3,040 | 92 | ||||||
Premiere Global Services, Inc. * | 4,360 | 72 | ||||||
SBA Communications Corp., Class A * | 1,005 | 36 | ||||||
SureWest Communications | 2,370 | 63 | ||||||
Syniverse Holdings, Inc. * | 6,065 | 101 | ||||||
Time Warner Telecom, Inc., Class A * | 4,475 | 104 | ||||||
USA Mobility, Inc. * | 4,725 | 74 | ||||||
Vonage Holdings Corp. * | 800 | 2 | ||||||
1,637 | ||||||||
Transportation 2.6% | ||||||||
ABX Air, Inc. * | 12,530 | 79 | ||||||
AirTran Holdings, Inc. * | 6,115 | 64 | ||||||
American Commercial Lines, Inc. * | 1,745 | 26 | ||||||
Arkansas Best Corp. | 3,040 | 83 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 2,800 | 164 | ||||||
Diana Shipping, Inc. | 3,935 | 168 | ||||||
DryShips, Inc. | 2,880 | 339 | ||||||
Eagle Bulk Shipping, Inc. | 1,620 | 55 | ||||||
ExpressJet Holdings, Inc. * | 12,480 | 41 | ||||||
Forward Air Corp. | 775 | 25 | ||||||
Genco Shipping & Trading Ltd. | 1,585 | 114 | ||||||
Genesee & Wyoming, Inc., Class A * | 2,165 | 64 | ||||||
Heartland Express, Inc. | 3,285 | 46 | ||||||
Horizon Lines, Inc., Class A | 1,950 | 61 | ||||||
Hub Group, Inc., Class A * | 2,710 | 69 | ||||||
JetBlue Airways Corp. * | 10,730 | 98 | ||||||
Kirby Corp. * | 2,920 | 133 | ||||||
Knight Transportation, Inc. | 2,015 | 32 | ||||||
Landstar System, Inc. | 2,270 | 96 | ||||||
Macquarie Infrastructure Co., LLC | 600 | 25 | ||||||
Old Dominion Freight Line, Inc. * | 2,500 | 57 | ||||||
Pacer International, Inc. | 3,260 | 48 | ||||||
Quintana Maritime Ltd. | 1,525 | 43 | ||||||
Republic Airways Holdings, Inc. * | 3,410 | 73 | ||||||
Seaspan Corp. | 2,010 | 64 | ||||||
SkyWest, Inc. | 5,300 | 145 | ||||||
US Airways Group, Inc. * | 2,675 | 74 | ||||||
2,286 | ||||||||
Utilities 1.5% | ||||||||
American States Water Co. | 1,115 | 51 | ||||||
California Water Service Group | 1,940 | 86 | ||||||
Central Vermont Public Service Corp. | 2,245 | 71 | ||||||
CH Energy Group, Inc. | 2,705 | 126 | ||||||
El Paso Electric Co. * | 5,345 | 130 | ||||||
ITC Holdings Corp. | 970 | 56 | ||||||
MGE Energy, Inc. | 2,200 | 74 | ||||||
Northwest Natural Gas Co. | 3,045 | 147 | ||||||
Ormat Technologies, Inc. | 760 | 41 | ||||||
Otter Tail Corp. | 3,480 | 121 | ||||||
SJW Corp. | 1,490 | 52 | ||||||
South Jersey Industries, Inc. | 2,620 | 98 | ||||||
The Empire District Electric Co. | 3,710 | 89 | ||||||
The Laclede Group, Inc. | 4,190 | 146 | ||||||
1,288 | ||||||||
Total Domestic Common Stock (Cost $83,397) | 83,456 | |||||||
Foreign Common Stock 2.8% of net assets | ||||||||
Bermuda 1.9% | ||||||||
Capital Goods 0.5% | ||||||||
China Yuchai International Ltd. | 9,805 | 135 | ||||||
Foster Wheeler Ltd. * | 1,935 | 287 | ||||||
422 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Helen of Troy Ltd. * | 3,330 | 60 | ||||||
Consumer Services 0.1% | ||||||||
Orient-Express Hotels Ltd., Class A | 1,190 | 77 | ||||||
Diversified Financials 0.1% | ||||||||
Primus Guaranty Ltd. * | 2,605 | 24 | ||||||
W.P. Stewart & Co., Ltd. | 8,875 | 57 | ||||||
81 | ||||||||
Energy 0.5% | ||||||||
Knightsbridge Tankers Ltd. | 4,190 | 107 | ||||||
Nordic American Tanker Shipping Ltd. | 3,805 | 147 | ||||||
Tsakos Energy Navigation Ltd. | 1,845 | 128 | ||||||
382 | ||||||||
Insurance 0.4% | ||||||||
Assured Guaranty Ltd. | 4,065 | 94 | ||||||
Enstar Group Ltd. * | 210 | 27 | ||||||
Max Capital Group Ltd. | 3,815 | 108 | ||||||
Platinum Underwriters Holdings Ltd. | 4,115 | 148 | ||||||
�� | ||||||||
377 |
See financial notes 41
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Media 0.1% | ||||||||
Central European Media Enterprises Ltd., Class A * | 870 | 100 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ChipMOS TECHNOLOGIES (Bermuda) Ltd. * | 9,040 | 51 | ||||||
Software & Services 0.0% | ||||||||
VistaPrint Ltd. * | 630 | 30 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Xyratex Ltd. * | 775 | 13 | ||||||
Telecommunication Services 0.0% | ||||||||
Global Crossing Ltd. * | 785 | 17 | ||||||
1,610 | ||||||||
Canada 0.0% | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Optimal Group, Inc., Class A * | 760 | 4 | ||||||
Israel 0.1% | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Syneron Medical Ltd. * | 1,260 | 23 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Saifun Semiconductors Ltd. * | 720 | 7 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
AudioCodes Ltd. * | 200 | 1 | ||||||
Orbotech Ltd. * | 1,660 | 35 | ||||||
36 | ||||||||
66 | ||||||||
Luxembourg 0.3% | ||||||||
Telecommunication Services 0.3% | ||||||||
Millicom International Cellular S.A. * | 1,950 | 229 | ||||||
Netherlands 0.2% | ||||||||
Energy 0.1% | ||||||||
Core Laboratories N.V. * | 545 | 79 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Orthofix International N.V. * | 1,780 | 96 | ||||||
175 | ||||||||
Singapore 0.2% | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASE Test Ltd. * | 9,885 | 143 | ||||||
Verigy Ltd. * | 1,720 | 40 | ||||||
183 | ||||||||
Software & Services 0.0% | ||||||||
GigaMedia Ltd. * | 275 | 7 | ||||||
190 | ||||||||
United Kingdom 0.1% | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Nam Tai Electronics, Inc. | 5,760 | 70 | ||||||
Transportation 0.0% | ||||||||
UTI Worldwide, Inc. | 2,720 | 69 | ||||||
139 | ||||||||
Total Foreign Common Stock (Cost $2,243) | 2,413 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.2% of net assets | ||||||||
U.S. Treasury Obligations 0.2% | ||||||||
U.S. Treasury Bills | ||||||||
3.55%, 12/20/07 | 65 | 64 | ||||||
3.61%, 12/20/07 | 25 | 25 | ||||||
3.92%, 12/20/07 | 60 | 60 | ||||||
149 | ||||||||
Total Short-Term Investments (Cost $149) | 149 | |||||||
End of Investments. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $85,794, and the unrealized appreciation and depreciation were $6,793 and ($6,569), respectively, with a net appreciation of $224. |
* | Non-income producing security. |
42 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $85,789) | $86,018 | |||||
Cash | 27 | |||||
Receivables: | ||||||
Investments sold | 66 | |||||
Fund shares sold | 406 | |||||
Dividends | + | 44 | ||||
Total assets | 86,561 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 65 | |||||
Investment adviser and administrator fees | 14 | |||||
Transfer agent and shareholder services fees | 1 | |||||
Fund shares redeemed | 106 | |||||
Accrued expenses | + | 33 | ||||
Total liabilities | 219 | |||||
Net Assets | ||||||
Total assets | 86,561 | |||||
Total liabilities | − | 219 | ||||
Net assets | $86,342 | |||||
Net Assets by Source | ||||||
Capital received from investors | 85,675 | |||||
Net investment income not yet distributed | 364 | |||||
Net realized capital gains | 74 | |||||
Net unrealized capital gains | 229 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $25,214 | 2,439 | $10.34 | ||||||||
Select Shares | $27,908 | 2,696 | $10.35 | ||||||||
Institutional Shares | $33,220 | 3,207 | $10.36 |
See financial notes 43
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Statement of
Operations
For April 2, 2007 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $446 | |||||
Interest | + | 51 | ||||
Total investment income | 497 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 255 | |||||
Net realized losses on futures contracts | + | (181 | ) | |||
Net realized gains | 74 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 229 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 89 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 22 | |||||
Select Shares | 9 | |||||
Institutional Shares | 12 | |||||
Custodian fees | 45 | |||||
FTSE RAFI Index fees | 22 | |||||
Registration fees | 21 | |||||
Professional fees | 21 | |||||
Portfolio accounting fees | 20 | |||||
Shareholder reports | 7 | |||||
Trustees’ fees | 1 | |||||
Overdraft expense | 1 | |||||
Other expenses | + | 1 | ||||
Total expenses | 271 | |||||
Expense reduction by adviser and Schwab | − | 137 | ||||
Custody credits | − | 1 | ||||
Net expenses | 133 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 497 | |||||
Net expenses | − | 133 | ||||
Net investment income | 364 | |||||
Net realized gains | 74 | |||||
Net unrealized gains | + | 229 | ||||
Increase in net assets from operations | $667 |
44 See financial notes
Table of Contents
Schwab Fundamental US Small-Mid Company Index Fund
Statements of
Changes in Net Assets
For the current period only. Because the fund commenced operations on April 2, 2007, it has no prior report period. All numbers x 1,000.
Operations |
04/2/07*-10/31/07 | |||||
Net investment income | $364 | ||||
Net realized gains | 74 | ||||
Net unrealized gains | + | 229 | |||
Increase in net assets from operations | 667 |
Transactions in Fund Shares |
04/2/07*-10/31/07 | ||||||||||
SHARES | VALUE | |||||||||
Shares Sold | ||||||||||
Investor Shares | 2,855 | $29,380 | ||||||||
Select Shares | 3,146 | 32,410 | ||||||||
Institutional Shares | + | 3,509 | 35,812 | |||||||
Total shares sold | 9,510 | $97,602 | ||||||||
Shares Redeemed | ||||||||||
Investor Shares | (416 | ) | ($4,275 | ) | ||||||
Select Shares | (450 | ) | (4,561 | ) | ||||||
Institutional Shares | + | (302 | ) | (3,091 | ) | |||||
Total shares redeemed | (1,168 | ) | ($11,927 | ) | ||||||
Net transactions in fund shares | 8,342 | $85,675 | ||||||||
Shares Outstanding and Net Assets | ||||||||||
04/2/07*-10/31/07 | ||||||||||
SHARES | NET ASSETS | |||||||||
Beginning of period | 0 | $0 | ||||||||
Total increase | + | 8,342 | 86,342 | |||||||
End of period | 8,342 | $86,342 | ||||||||
Net investment income not yet distributed | $364 |
* | Commencement of operations. |
See financial notes 45
Table of Contents
Financial Highlights
4/2/071- | ||||
Investor Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.08 | |||
Net realized and unrealized gains | 1.29 | |||
Total income from investment operations | 1.37 | |||
Net asset value at end of period | 11.37 | |||
Total return (%) | 13.70 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.59 | 3 | ||
Gross operating expenses | 1.45 | 3 | ||
Net investment income | 2.16 | 3 | ||
Portfolio turnover rate | 50 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 27 |
4/2/071- | ||||
Select Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.08 | |||
Net realized and unrealized gains | 1.31 | |||
Total income from investment operations | 1.39 | |||
Net asset value at end of period | 11.39 | |||
Total return (%) | 13.90 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.44 | 3 | ||
Gross operating expenses | 1.33 | 3 | ||
Net investment income | 2.16 | 3 | ||
Portfolio turnover rate | 50 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 37 |
1 Commencement of operations.
2 Not annualized.
3 Annualized.
46 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fundtm
Financial Highlights continued
4/2/071- | ||||
Institutional Shares | 10/31/07 | |||
Per—Share Data ($) | ||||
Net asset value at beginning of period | 10.00 | |||
Income from investment operations: | ||||
Net investment income | 0.08 | |||
Net realized and unrealized gains | 1.32 | |||
Total income from investment operations | 1.40 | |||
Net asset value at end of period | 11.40 | |||
Total return (%) | 14.00 | 2 | ||
Ratios/Supplemental Data (%) | ||||
Ratios to average net assets: | ||||
Net operating expenses | 0.36 | 3,4 | ||
Gross operating expenses | 1.28 | 3 | ||
Net investment income | 2.30 | 3 | ||
Portfolio turnover rate | 50 | 2 | ||
Net assets, end of period ($ x 1,000,000) | 166 |
1 Commencement of operations.
2 Not annualized.
3 Annualized.
4 The ratio of net operating expenses would have been 0.35%, if overdraft expense had not been included.
See financial notes 47
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value 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 Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
97 | .2% | Foreign Common Stock | 207,725 | 223,201 | ||||||||
2 | .0% | Other Investment Companies | 4,372 | 4,502 | ||||||||
0 | .5% | Preferred Stock | 874 | 1,185 | ||||||||
—% | Rights | — | — | |||||||||
0 | .7% | Short-Term Investment | 1,530 | 1,530 | ||||||||
100 | .4% | Total Investments | 214,501 | 230,418 | ||||||||
(0 | .4)% | Other Assets and Liabilities | (901 | ) | ||||||||
100 | .0% | Net Assets | 229,517 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Foreign Common Stock 97.2% of net assets | ||||||||
Australia 4.1% | ||||||||
Banks 1.2% | ||||||||
Australia & New Zealand Banking Group Ltd. | 17,726 | 500 | ||||||
Commonwealth Bank of Australia | 12,547 | 723 | ||||||
National Australia Bank Ltd. | 20,186 | 817 | ||||||
St. George Bank Ltd. | 4,674 | 159 | ||||||
Westpac Banking Corp. | 17,163 | 482 | ||||||
2,681 | ||||||||
Capital Goods 0.1% | ||||||||
Leighton Holdings Ltd. | 2,119 | 124 | ||||||
Wesfarmers Ltd. | 3,815 | 157 | ||||||
281 | ||||||||
Commercial Services & Supplies 0.1% | ||||||||
Brambles Ltd. | 8,667 | 115 | ||||||
Consumer Services 0.0% | ||||||||
TABCORP Holdings Ltd. | 4,753 | 69 | ||||||
Diversified Financials 0.0% | ||||||||
Macquarie Bank Ltd. * | 1,246 | 100 | ||||||
Energy 0.2% | ||||||||
Caltex Australia Ltd. | 2,630 | 53 | ||||||
Origin Energy Ltd. | 5,454 | 47 | ||||||
Santos Ltd. | 8,119 | 107 | ||||||
Woodside Petroleum Ltd. | 3,935 | 192 | ||||||
399 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
AWB Ltd. | 30,767 | 86 | ||||||
Coles Group Ltd. | 13,659 | 206 | ||||||
Metcash Ltd. | 12,339 | 54 | ||||||
Woolworths Ltd. | 6,568 | 206 | ||||||
552 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Coca-Cola Amatil Ltd. | 7,177 | 69 | ||||||
Foster’s Group Ltd. | 19,060 | 114 | ||||||
Goodman Fielder Ltd. | 27,368 | 54 | ||||||
Lion Nathan Ltd. | 6,377 | 55 | ||||||
292 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Symbion Health Ltd. | 14,309 | 54 | ||||||
Insurance 0.2% | ||||||||
AMP Ltd. | 16,295 | 156 | ||||||
AXA Asia Pacific Holdings Ltd. | 13,982 | 107 | ||||||
Insurance Australia Group Ltd. | 18,148 | 80 | ||||||
QBE Insurance Group Ltd. | 3,125 | 96 | ||||||
Suncorp-Metway Ltd. | 8,230 | 156 | ||||||
595 | ||||||||
Materials 0.7% | ||||||||
Alumina Ltd. | 10,713 | 68 | ||||||
Amcor Ltd. | 16,290 | 107 | ||||||
BHP Billiton Ltd. | 17,749 | 773 | ||||||
BlueScope Steel Ltd. | 10,653 | 106 | ||||||
Boral Ltd. | 6,966 | 44 | ||||||
OneSteel Ltd. | 17,442 | 113 | ||||||
Orica Ltd. | 1,834 | 53 | ||||||
PaperlinX Ltd. | 20,533 | 53 | ||||||
Rio Tinto Ltd. | 2,513 | 261 | ||||||
1,578 | ||||||||
Media 0.1% | ||||||||
Fairfax Media Ltd. | 12,528 | 56 | ||||||
Publishing & Broadcasting Ltd. | 5,069 | 99 | ||||||
155 | ||||||||
Pharmaceuticals & Biotechnology 0.1% | ||||||||
CSL Ltd. | 3,420 | 116 | ||||||
Real Estate 0.4% | ||||||||
CFS Retail Property Trust | 18,804 | 43 | ||||||
Commonwealth Property Office Fund | 34,555 | 51 | ||||||
DB RREEF Trust | 26,020 | 51 | ||||||
GPT Group | 23,330 | 101 | ||||||
Lend Lease Corp., Ltd. | 3,982 | 75 | ||||||
Mirvac Group | 8,829 | 48 | ||||||
Multiplex Group | 16,600 | 78 | ||||||
Stockland | 12,898 | 108 | ||||||
Westfield Group | 16,098 | 329 | ||||||
884 | ||||||||
Telecommunication Services 0.5% | ||||||||
Telstra Corp., Ltd. | 241,089 | 1,055 | ||||||
Transportation 0.2% | ||||||||
Macquarie Airports | 19,437 | 80 | ||||||
Macquarie Infrastructure Group | 34,189 | 102 | ||||||
Qantas Airways Ltd. | 32,231 | 178 | ||||||
Transurban Group | 10,129 | 69 | ||||||
429 | ||||||||
9,355 |
48 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Austria 0.4% | ||||||||
Banks 0.1% | ||||||||
Erste Bank der oesterreichischen Sparkassen AG | 1,640 | 134 | ||||||
Raiffeisen International Bank-Holding AG | 331 | 55 | ||||||
189 | ||||||||
Capital Goods 0.0% | ||||||||
Wienerberger AG | 750 | 47 | ||||||
Energy 0.1% | ||||||||
OMV AG | 3,099 | 233 | ||||||
Insurance 0.0% | ||||||||
Wiener Staedtische Versicherung AG | 1,291 | 95 | ||||||
Materials 0.1% | ||||||||
Voestalpine AG | 1,079 | 97 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG | 3,168 | 91 | ||||||
Utilities 0.1% | ||||||||
EVN AG | 483 | 65 | ||||||
Oesterreichische Elektrizitaetswirtschafts AG, A Shares | 1,398 | 92 | ||||||
157 | ||||||||
909 | ||||||||
Belgium 1.8% | ||||||||
Banks 0.4% | ||||||||
Dexia S.A. | 15,406 | 496 | ||||||
KBC GROEP N.V. | 3,283 | 462 | ||||||
958 | ||||||||
Diversified Financials 0.7% | ||||||||
Compagnie Nationale a Portefeuille / Nationale Portefeuille Maatschappij | 1,297 | 93 | ||||||
Fortis - Strip VVPR * | 12,832 | — | ||||||
Fortis NL | 19,995 | 643 | ||||||
Fortis NPV | 21,898 | 703 | ||||||
Groupe Bruxelles Lambert S.A. | 1,556 | 199 | ||||||
KBC Ancora | 420 | 48 | ||||||
1,686 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Colruyt S.A. | 438 | 94 | ||||||
Delhaize Group | 2,546 | 243 | ||||||
337 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
InBev N.V. | 4,104 | 388 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Agfa Gevaert N.V. | 3,684 | 51 | ||||||
Materials 0.1% | ||||||||
Solvay S.A. | 1,195 | 182 | ||||||
Umicore | 253 | 63 | ||||||
245 | ||||||||
Pharmaceuticals & Biotechnology 0.0% | ||||||||
UCB S.A. | 991 | 58 | ||||||
Telecommunication Services 0.2% | ||||||||
Belgacom S.A. | 5,577 | 267 | ||||||
Mobistar S.A. | 704 | 64 | ||||||
331 | ||||||||
4,054 | ||||||||
Bermuda 0.4% | ||||||||
Capital Goods 0.0% | ||||||||
Johnson Electric Holdings Ltd. | 10,000 | 6 | ||||||
Noble Group Ltd. | 42,631 | 70 | ||||||
76 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Yue Yuen Industrial (Holdings) Ltd. | 16,500 | 51 | ||||||
Consumer Services 0.0% | ||||||||
Shangri-La Asia Ltd. | 14,000 | 45 | ||||||
Diversified Financials 0.1% | ||||||||
Guoco Group Ltd. | 5,000 | 77 | ||||||
Real Estate 0.1% | ||||||||
Chinese Estates Holdings Ltd. | 38,000 | 77 | ||||||
Great Eagle Holdings Ltd. | 3,000 | 12 | ||||||
Hongkong Land Holdings Ltd. | 10,000 | 50 | ||||||
Kerry Properties Ltd. | 6,500 | 57 | ||||||
196 | ||||||||
Retailing 0.1% | ||||||||
Esprit Holdings Ltd. | 4,100 | 68 | ||||||
Li & Fung Ltd. | 24,000 | 114 | ||||||
182 | ||||||||
Transportation 0.1% | ||||||||
Cosco Pacific Ltd. | 14,000 | 44 | ||||||
Orient Overseas International Ltd. | 8,000 | 82 | ||||||
126 | ||||||||
Utilities 0.0% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 19,100 | 75 | ||||||
828 | ||||||||
Canada 4.9% | ||||||||
Automobiles & Components 0.1% | ||||||||
Magna International, Inc., Class A | 3,060 | 290 | ||||||
Banks 1.0% | ||||||||
Bank of Montreal | 4,914 | 328 | ||||||
Bank of Nova Scotia | 8,749 | 495 | ||||||
Canadian Imperial Bank of Commerce | 3,116 | 336 | ||||||
National Bank of Canada | 1,213 | 70 | ||||||
Royal Bank of Canada | 10,179 | 604 | ||||||
The Toronto-Dominion Bank | 5,425 | 410 | ||||||
2,243 | ||||||||
Capital Goods 0.1% | ||||||||
Bombardier, Inc., Class A * | 9,300 | 56 | ||||||
Bombardier, Inc., Class B * | 36,491 | 216 | ||||||
Finning International, Inc. | 1,574 | 54 | ||||||
326 |
See financial notes 49
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Diversified Financials 0.1% | ||||||||
IGM Financial, Inc. | 1,735 | 101 | ||||||
Energy 1.2% | ||||||||
Cameco Corp. | 1,704 | 84 | ||||||
Canadian Natural Resources Ltd. | 3,154 | 262 | ||||||
Enbridge, Inc. | 4,114 | 178 | ||||||
EnCana Corp. | 6,848 | 479 | ||||||
Husky Energy, Inc. | 6,062 | 283 | ||||||
Imperial Oil Ltd. | 6,268 | 341 | ||||||
Nexen, Inc. | 2,738 | 93 | ||||||
Petro-Canada | 5,811 | 335 | ||||||
Suncor Energy, Inc. | 1,696 | 186 | ||||||
Talisman Energy, Inc. | 7,688 | 168 | ||||||
TransCanada Corp. | 6,826 | 290 | ||||||
2,699 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
George Weston Ltd. | 3,181 | 233 | ||||||
Loblaw Co., Ltd. | 4,640 | 215 | ||||||
Shoppers Drug Mart Corp. | 1,844 | 108 | ||||||
556 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Saputo, Inc. | 874 | 54 | ||||||
Insurance 0.8% | ||||||||
Great-West Lifeco, Inc. | 7,578 | 299 | ||||||
Manulife Financial Corp. | 10,635 | 498 | ||||||
Power Corp. of Canada | 6,282 | 269 | ||||||
Power Financial Corp. | 7,189 | 321 | ||||||
Sun Life Financial, Inc. | 6,217 | 361 | ||||||
1,748 | ||||||||
Materials 0.3% | ||||||||
Agrium, Inc. | 1,915 | 122 | ||||||
Barrick Gold Corp. | 2,740 | 122 | ||||||
Goldcorp, Inc. | 3,252 | 114 | ||||||
NOVA Chemicals Corp. | 2,136 | 77 | ||||||
Potash Corp. of Saskatchewan, Inc. | 1,138 | 142 | ||||||
Teck Cominco Ltd., Class B | 1,823 | 91 | ||||||
668 | ||||||||
Media 0.2% | ||||||||
Shaw Communications, Inc., Class B | 3,846 | 108 | ||||||
The Thomson Corp. | 6,545 | 309 | ||||||
417 | ||||||||
Pharmaceuticals & Biotechnology 0.0% | ||||||||
Biovail Corp. | 3,288 | 66 | ||||||
Real Estate 0.1% | ||||||||
Brookfield Asset Management, Inc., Class A | 2,739 | 112 | ||||||
Brookfield Properties Corp. | 3,589 | 90 | ||||||
202 | ||||||||
Retailing 0.0% | ||||||||
Canadian Tire Corp., Ltd., Class A | 951 | 88 | ||||||
Software & Services 0.0% | ||||||||
CGI Group, Inc., Class A * | 4,135 | 47 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Celestica, Inc. * | 11,891 | 79 | ||||||
Nortel Networks Corp. * | 2,490 | 40 | ||||||
Research In Motion Ltd. * | 741 | 93 | ||||||
212 | ||||||||
Telecommunication Services 0.5% | ||||||||
BCE, Inc. | 18,116 | 791 | ||||||
Rogers Communications, Inc., Class B | 2,358 | 120 | ||||||
Telus Corp. | 1,556 | 95 | ||||||
Telus Corp. - Non voting | 1,177 | 68 | ||||||
1,074 | ||||||||
Transportation 0.1% | ||||||||
Canadian National Railway Co. | 3,750 | 210 | ||||||
Canadian Pacific Railway Ltd. | 1,215 | 86 | ||||||
296 | ||||||||
Utilities 0.1% | ||||||||
Canadian Utilities Ltd., Class A | 1,370 | 79 | ||||||
TransAlta Corp. | 2,451 | 88 | ||||||
167 | ||||||||
11,254 | ||||||||
Cayman Islands 0.1% | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Tingyi (Cayman Islands) Holding Corp. | 30,000 | 46 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Semiconductor Manufacturing International Corp. * | 369,000 | 42 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Foxconn International Holdings Ltd. * | 32,000 | 89 | ||||||
Telecommunication Services 0.0% | ||||||||
Hutchison Telecommunications International Ltd. | 32,000 | 46 | ||||||
223 | ||||||||
Denmark 0.6% | ||||||||
Banks 0.1% | ||||||||
Danske Bank A/S | 7,184 | 318 | ||||||
Jyske Bank A/S - Reg’d * | 738 | 61 | ||||||
379 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Carlsberg A/S, Class B | 707 | 96 | ||||||
Danisco A/S | 650 | 50 | ||||||
146 | ||||||||
Pharmaceuticals & Biotechnology 0.1% | ||||||||
H. Lundbeck A/S | 2,512 | 72 | ||||||
Novo Nordisk A/S, Class B | 1,444 | 180 | ||||||
252 | ||||||||
Transportation 0.3% | ||||||||
AP Moller - Maersk A/S, Series A | 23 | 315 | ||||||
AP Moller - Maersk A/S, Series B | 23 | 319 | ||||||
634 | ||||||||
1,411 |
50 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Finland 1.3% | ||||||||
Capital Goods 0.1% | ||||||||
Kone Oyj, B Shares | 1,348 | 112 | ||||||
Metso Corp. | 966 | 59 | ||||||
171 | ||||||||
Energy 0.0% | ||||||||
Neste Oil Oyj | 2,579 | 93 | ||||||
Insurance 0.1% | ||||||||
Sampo Oyj, Class A | 6,152 | 193 | ||||||
Materials 0.3% | ||||||||
Outokumpu Oyj | 1,720 | 65 | ||||||
Stora Enso Oyj, Class R | 17,033 | 314 | ||||||
UPM-Kymmene Oyj | 10,558 | 237 | ||||||
616 | ||||||||
Media 0.0% | ||||||||
SanomaWSOY Oyj | 1,708 | 49 | ||||||
Software & Services 0.0% | ||||||||
TietoEnator Oyj | 2,480 | 61 | ||||||
Technology Hardware & Equipment 0.6% | ||||||||
Nokia Oyj | 35,464 | 1,409 | ||||||
Utilities 0.2% | ||||||||
Fortum Oyj | 8,860 | 385 | ||||||
2,977 | ||||||||
France 11.1% | ||||||||
Automobiles & Components 0.9% | ||||||||
Compagnie Generale des Etablissements Michelin, Class B | 1,952 | 263 | ||||||
PSA Peugeot Citroen | 9,624 | 897 | ||||||
Renault S.A. | 4,944 | 835 | ||||||
Valeo S.A. | 2,116 | 116 | ||||||
2,111 | ||||||||
Banks 1.3% | ||||||||
BNP Paribas | 10,826 | 1,200 | ||||||
Credit Agricole S.A. | 20,053 | 795 | ||||||
Natixis | 4,377 | 97 | ||||||
Societe Generale | 4,866 | 822 | ||||||
2,914 | ||||||||
Capital Goods 0.9% | ||||||||
Alstom | 1,184 | 281 | ||||||
Compagnie de Saint-Gobain | 5,557 | 599 | ||||||
Eiffage S.A. | 727 | 82 | ||||||
Legrand S.A. | 2,371 | 88 | ||||||
Safran S.A. | 3,379 | 86 | ||||||
Schneider Electric S.A. | 2,257 | 312 | ||||||
Thales S.A. | 1,879 | 117 | ||||||
Vallourec S.A. | 292 | 85 | ||||||
Vinci S.A. | 3,644 | 301 | ||||||
Wendel | 446 | 77 | ||||||
2,028 | ||||||||
Commercial Services & Supplies 0.0% | ||||||||
Societe BIC S.A. | 1,182 | 92 | ||||||
Consumer Durables & Apparel 0.4% | ||||||||
Christian Dior S.A. | 2,503 | 342 | ||||||
Hermes International | 517 | 68 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 3,018 | 390 | ||||||
Thomson | 5,629 | 98 | ||||||
898 | ||||||||
Consumer Services 0.1% | ||||||||
Accor S.A. | 2,351 | 225 | ||||||
Sodexho Alliance S.A. | 1,589 | 115 | ||||||
340 | ||||||||
Diversified Financials 0.0% | ||||||||
Eurazeo | 615 | 92 | ||||||
Energy 1.3% | ||||||||
Technip S.A. | 1,177 | 106 | ||||||
Total S.A. | 36,097 | 2,913 | ||||||
3,019 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Carrefour S.A. | 10,707 | 774 | ||||||
Casino Guichard-Perrachon S.A. | 2,734 | 306 | ||||||
1,080 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Groupe Danone | 3,510 | 302 | ||||||
Pernod Ricard S.A. | 434 | 101 | ||||||
403 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Essilor International S.A. | 1,457 | 93 | ||||||
Household & Personal Products 0.2% | ||||||||
L’Oreal S.A. | 3,897 | 513 | ||||||
Insurance 0.7% | ||||||||
Axa | 24,852 | 1,116 | ||||||
CNP Assurances | 2,436 | 311 | ||||||
Euler Hermes S.A. | 602 | 81 | ||||||
1,508 | ||||||||
Materials 0.4% | ||||||||
Air Liquide S.A. | 2,218 | 306 | ||||||
Arkema * | 1,434 | 98 | ||||||
Ciments Francais S.A. | 285 | 54 | ||||||
Imerys S.A. | 948 | 92 | ||||||
Lafarge S.A. | 2,431 | 398 | ||||||
948 | ||||||||
Media 0.6% | ||||||||
JC Decaux S.A. | 2,698 | 100 | ||||||
Lagardere S.C.A. | 2,106 | 179 | ||||||
PagesJaunes S.A. | 4,535 | 100 | ||||||
Publicis Groupe | 2,120 | 86 | ||||||
Societe Television Francaise 1 | 1,709 | 48 | ||||||
Vivendi | 21,783 | 984 | ||||||
1,497 | ||||||||
Pharmaceuticals & Biotechnology 0.4% | ||||||||
Sanofi-Aventis | 9,553 | 840 | ||||||
Real Estate 0.2% | ||||||||
Gecina S.A. | 551 | 95 | ||||||
Klepierre | 1,050 | 57 | ||||||
Unibail-Rodamco | 998 | 249 | ||||||
401 | ||||||||
Retailing 0.2% | ||||||||
Prinault-Printemps-Redoute S.A. | 2,241 | 446 |
See financial notes 51
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Software & Services 0.1% | ||||||||
Atos Origin S.A. * | 1,487 | 91 | ||||||
Cap Gemini S.A. | 1,435 | 92 | ||||||
Dassault Systemes S.A. | 949 | 59 | ||||||
242 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Alcatel-Lucent | 13,703 | 133 | ||||||
Telecommunication Services 0.9% | ||||||||
Bouygues S.A. | 3,699 | 357 | ||||||
France Telecom S.A. | 43,717 | 1,617 | ||||||
1,974 | ||||||||
Transportation 0.1% | ||||||||
Aeroports de Paris | 770 | 88 | ||||||
Air France-KLM | 3,510 | 134 | ||||||
Societe des Autoroutes Paris-Rhin-Rhone | 853 | 91 | ||||||
313 | ||||||||
Utilities 1.6% | ||||||||
Electricite de France (EDF) | 11,185 | 1,345 | ||||||
Gaz de France | 9,225 | 526 | ||||||
Suez S.A. | 19,132 | 1,248 | ||||||
Veolia Environnement | 5,831 | 522 | ||||||
3,641 | ||||||||
25,526 | ||||||||
Germany 9.6% | ||||||||
Automobiles & Components 2.7% | ||||||||
Bayerische Motoren Werke AG | 12,236 | 819 | ||||||
Continental AG | 1,325 | 200 | ||||||
DaimlerChrysler AG - Reg’d | 29,850 | 3,266 | ||||||
Volkswagen AG | 6,516 | 1,863 | ||||||
6,148 | ||||||||
Banks 0.2% | ||||||||
Commerzbank AG | 6,422 | 272 | ||||||
Deutsche Postbank AG | 1,867 | 136 | ||||||
Hypo Real Estate Holding AG | 2,349 | 139 | ||||||
547 | ||||||||
Capital Goods 0.8% | ||||||||
Heidelberger Druckmaschinen AG | 1,248 | 51 | ||||||
MAN AG | 1,538 | 275 | ||||||
Siemens AG - Reg’d | 10,444 | 1,416 | ||||||
1,742 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Adidas AG | 1,505 | 100 | ||||||
Consumer Services 0.1% | ||||||||
TUI AG * | 7,534 | 223 | ||||||
Diversified Financials 0.5% | ||||||||
Deutsche Bank AG - Reg’d | 7,034 | 935 | ||||||
Deutsche Boerse AG | 770 | 122 | ||||||
1,057 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Metro AG | 6,175 | 560 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Suedzucker AG | 4,584 | 104 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Celesio AG | 2,323 | 132 | ||||||
Fresenius Medical Care AG & Co. KGaA | 2,284 | 121 | ||||||
Fresenius SE | 718 | 56 | ||||||
309 | ||||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 1,315 | 104 | ||||||
Henkel KGaA | 2,023 | 94 | ||||||
198 | ||||||||
Insurance 0.9% | ||||||||
Allianz SE-Reg’d | 5,881 | 1,325 | ||||||
Hannover Rueckversicherung AG - Reg’d | 1,895 | 100 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 3,012 | 578 | ||||||
2,003 | ||||||||
Materials 1.4% | ||||||||
Altana AG | 4,216 | 102 | ||||||
BASF AG | 7,441 | 1,030 | ||||||
Bayer AG | 9,658 | 806 | ||||||
HeidelbergCement AG | 931 | 150 | ||||||
Lanxess | 1,777 | 89 | ||||||
Linde AG | 1,668 | 211 | ||||||
Salzgitter AG | 464 | 91 | ||||||
ThyssenKrupp AG | 8,565 | 571 | ||||||
Wacker Chemie AG | 260 | 64 | ||||||
3,114 | ||||||||
Pharmaceuticals & Biotechnology 0.1% | ||||||||
Merck KGaA | 1,209 | 151 | ||||||
Retailing 0.0% | ||||||||
Arcandor AG * | 3,068 | 99 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Infineon Technologies AG * | 8,807 | 129 | ||||||
Software & Services 0.1% | ||||||||
SAP AG | 4,652 | 252 | ||||||
Telecommunication Services 0.8% | ||||||||
Deutsche Telekom AG - Reg’d | 87,968 | 1,806 | ||||||
Transportation 0.3% | ||||||||
Deutsche Lufthansa AG | 6,693 | 198 | ||||||
Deutsche Post AG - Reg’d | 15,987 | 484 | ||||||
Fraport AG | 1,534 | 120 | ||||||
802 | ||||||||
Utilities 1.2% | ||||||||
E.ON AG | 8,935 | 1,747 | ||||||
RWE AG | 7,188 | 982 | ||||||
2,729 | ||||||||
22,073 | ||||||||
Greece 0.6% | ||||||||
Banks 0.2% | ||||||||
Alpha Bank A.E. | 2,708 | 101 | ||||||
EFG Eurobank Ergasias | 2,916 | 114 | ||||||
Emporiki Bank of Greece S.A. * | 1,690 | 51 | ||||||
National Bank of Greece S.A. | 1,503 | 105 |
52 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Piraeus Bank S.A. | 1,454 | 58 | ||||||
429 | ||||||||
Consumer Services 0.1% | ||||||||
OPAP S.A. | 2,790 | 114 | ||||||
Energy 0.0% | ||||||||
Hellenic Petroleum S.A. | 4,313 | 67 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Coca-Cola Hellenic Bottling Co., S.A. | 1,928 | 120 | ||||||
Materials 0.0% | ||||||||
Titan Cement Co. | 1,218 | 60 | ||||||
Telecommunication Services 0.1% | ||||||||
Cosmote Mobile Telecommunications S.A. | 2,554 | 88 | ||||||
Hellenic Telecommunications Organization S.A. (OTE) | 6,633 | 244 | ||||||
332 | ||||||||
Utilities 0.1% | ||||||||
Public Power Corp. S.A. (PPC) | 5,404 | 220 | ||||||
1,342 | ||||||||
Hong Kong 4.1% | ||||||||
Banks 0.4% | ||||||||
BOC Hong Kong (Holdings) Ltd. | 96,500 | 273 | ||||||
Dah Sing Banking Group Ltd. | 10,100 | 23 | ||||||
Dah Sing Financial Group | 400 | 4 | ||||||
Hang Seng Bank Ltd. | 26,800 | 548 | ||||||
The Bank of East Asia, Ltd. | 10,500 | 72 | ||||||
Wing Hang Bank Ltd. | 4,000 | 47 | ||||||
Wing Lung Bank Ltd. | 3,000 | 31 | ||||||
998 | ||||||||
Capital Goods 0.5% | ||||||||
Citic Pacific Ltd. | 40,000 | 252 | ||||||
Hutchison Whampoa Ltd. | 63,000 | 792 | ||||||
Shanghai Industrial Holdings Ltd. | 17,000 | 100 | ||||||
1,144 | ||||||||
Diversified Financials 0.0% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 3,000 | 100 | ||||||
Energy 0.4% | ||||||||
CNOOC Ltd. | 385,100 | 832 | ||||||
Real Estate 1.0% | ||||||||
Cheung Kong (Holdings) Ltd. | 22,500 | 441 | ||||||
China Overseas Land & Investment Ltd. | 56,333 | 135 | ||||||
Hang Lung Group Ltd. | 12,000 | 71 | ||||||
Hang Lung Properties Ltd. | 25,000 | 120 | ||||||
Henderson Investment Ltd. | 41,000 | 82 | ||||||
Henderson Land Development Co., Ltd. | 23,000 | 206 | ||||||
Hysan Development Co., Ltd. | 10,000 | 30 | ||||||
New World Development Co., Ltd. | 31,000 | 112 | ||||||
Sino Land Co. | 42,000 | 132 | ||||||
Sun Hung Kai Properties Ltd. | 25,600 | 489 | ||||||
Swire Pacific Ltd., Class A | 15,500 | 222 | ||||||
The Wharf (Holdings) Ltd. | 40,000 | 241 | ||||||
Wheelock & Co., Ltd. | 24,000 | 78 | ||||||
2,359 | ||||||||
Retailing 0.0% | ||||||||
China Resources Enterprise Ltd. | 22,000 | 97 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Lenovo Group Ltd. | 102,000 | 116 | ||||||
Telecommunication Services 1.2% | ||||||||
China Mobile Ltd. | 96,500 | 1,995 | ||||||
China Netcom Group Corp., (Hong Kong) Ltd. | 93,000 | 286 | ||||||
China Unicom Ltd. | 165,800 | 403 | ||||||
PCCW Ltd. | 80,000 | 52 | ||||||
2,736 | ||||||||
Transportation 0.2% | ||||||||
Cathay Pacific Airways Ltd. | 51,800 | 154 | ||||||
China Merchants Holdings International Co., Ltd. | 10,000 | 71 | ||||||
Hopewell Holdings Ltd. | 7,000 | 36 | ||||||
MTR Corp., Ltd. | 41,000 | 142 | ||||||
403 | ||||||||
Utilities 0.3% | ||||||||
CLP Holdings Ltd. | 37,500 | 253 | ||||||
Guangdong Investment Ltd. | 74,000 | 51 | ||||||
Hong Kong & China Gas Co., Ltd. | 43,900 | 118 | ||||||
Hongkong Electric Holdings Ltd. | 36,500 | 188 | ||||||
610 | ||||||||
9,395 | ||||||||
Ireland 0.4% | ||||||||
Banks 0.2% | ||||||||
Allied Irish Banks plc | 7,757 | 196 | ||||||
Anglo Irish Bank Corp., plc | 4,514 | 76 | ||||||
Bank of Ireland | 8,251 | 152 | ||||||
424 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Kerry Group plc, Class A | 1,957 | 59 | ||||||
Insurance 0.0% | ||||||||
Irish Life & Permanent plc | 3,459 | 79 | ||||||
Materials 0.1% | ||||||||
CRH plc | 4,730 | 182 | ||||||
Transportation 0.1% | ||||||||
Ryanair Holdings plc * | 9,605 | 80 | ||||||
824 | ||||||||
Italy 4.7% | ||||||||
Automobiles & Components 0.2% | ||||||||
Fiat S.p.A. | 15,742 | 510 | ||||||
Banks 0.9% | ||||||||
Banca Carige S.p.A. | 20,047 | 96 | ||||||
Banca Monte dei Paschi di Siena S.p.A. | 28,237 | 181 | ||||||
Banca Popolare dell’Emilia Romagna Scrl | 2,015 | 48 | ||||||
Banca Popolare di Milano Scarl | 3,330 | 52 | ||||||
Banco Popolare Scarl * | 4,867 | 117 | ||||||
Intesa Sanpaolo | 53,012 | 421 |
See financial notes 53
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
UniCredito Italiano S.p.A. | 102,933 | 886 | ||||||
Unione di Banche Italiane S.C.p.A. | 6,145 | 171 | ||||||
1,972 | ||||||||
Capital Goods 0.1% | ||||||||
Finmeccanica S.p.A. | 3,518 | 104 | ||||||
Pirelli & C. S.p.A. * | 83,423 | 107 | ||||||
211 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Benetton Group S.p.A. | 3,285 | 61 | ||||||
Luxottica Group S.p.A. | 2,577 | 91 | ||||||
152 | ||||||||
Consumer Services 0.1% | ||||||||
Autogrill S.p.A. | 3,929 | 79 | ||||||
Lottomatica S.p.A. | 1,288 | 46 | ||||||
125 | ||||||||
Diversified Financials 0.1% | ||||||||
IFIL Investments S.p.A. | 22,817 | 262 | ||||||
Mediobanca S.p.A. | 3,993 | 95 | ||||||
357 | ||||||||
Energy 1.1% | ||||||||
Eni S.p.A. | 66,854 | 2,441 | ||||||
Saipem S.p.A. | 1,812 | 80 | ||||||
Saras S.p.A. | 8,348 | 51 | ||||||
2,572 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Parmalat S.p.A. | 21,608 | 80 | ||||||
Insurance 0.5% | ||||||||
Alleanza Assicurazioni S.p.A. | 7,672 | 104 | ||||||
Assicurazioni Generali S.p.A. | 14,857 | 708 | ||||||
Fondiaria - Sai S.p.A. | 1,831 | 89 | ||||||
Mediolanum S.p.A. | 10,559 | 79 | ||||||
Unipol Gruppo Finanziario S.p.A. | 23,333 | 88 | ||||||
1,068 | ||||||||
Materials 0.0% | ||||||||
Italcementi S.p.A. | 1,711 | 39 | ||||||
Italcementi S.p.A. - RNC | 2,844 | 48 | ||||||
87 | ||||||||
Media 0.2% | ||||||||
Gruppo Editoriale L’Espresso S.p.A. | 9,235 | 47 | ||||||
Mediaset S.p.A. | 15,182 | 157 | ||||||
RCS MediaGroup S.p.A. | 12,426 | 68 | ||||||
Seat Pagine Gialle S.p.A. | 374,824 | 218 | ||||||
490 | ||||||||
Telecommunication Services 0.5% | ||||||||
Telecom Italia S.p.A. | 247,208 | 774 | ||||||
Telecom Italia S.p.A. RNC | 116,095 | 301 | ||||||
1,075 | ||||||||
Transportation 0.1% | ||||||||
Atlantia S.p.A. | 5,192 | 204 | ||||||
Utilities 0.8% | ||||||||
AEM S.p.A | 14,191 | 60 | ||||||
Enel S.p.A. | 121,932 | 1,462 | ||||||
Snam Rete Gas S.p.A | 43,175 | 279 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 30,912 | 121 | ||||||
1,922 | ||||||||
10,825 | ||||||||
Japan 18.6% | ||||||||
Automobiles & Components 2.5% | ||||||||
Aisin Seiki Co., Ltd. | 4,200 | 173 | ||||||
Bosch Corp. | 9,000 | 47 | ||||||
Bridgestone Corp. | 12,800 | 283 | ||||||
Calsonic Kansei Corp. | 4,000 | 21 | ||||||
Daihatsu Motor Co., Ltd. | 8,000 | 85 | ||||||
Denso Corp. | 8,100 | 329 | ||||||
Fuji Heavy Industries Ltd. | 24,000 | 125 | ||||||
Honda Motor Co., Ltd. | 20,900 | 783 | ||||||
Isuzu Motors Ltd. | 21,000 | 105 | ||||||
Koito Manufacturing Co., Ltd. | 5,000 | 70 | ||||||
Mazda Motor Corp. | 23,000 | 139 | ||||||
Mitsubishi Motors Corp. * | 112,000 | 220 | ||||||
NGK Spark Plug Co., Ltd. | 2,000 | 34 | ||||||
Nhk Spring Co., Ltd. | 5,000 | 43 | ||||||
Nissan Motors Co., Ltd. | 69,600 | 798 | ||||||
Nok Corp. | 2,900 | 65 | ||||||
Stanley Electric Co., Ltd. | 2,000 | 44 | ||||||
Sumitomo Rubber Industries Ltd. | 5,100 | 62 | ||||||
Suzuki Motor Corp. | 6,400 | 210 | ||||||
The Yokohama Rubber Co., Ltd. | 9,000 | 67 | ||||||
Toyoda Gosei Co., Ltd. | 1,100 | 39 | ||||||
Toyota Auto Body Co., Ltd. | 2,200 | 36 | ||||||
Toyota Industries Corp. | 3,100 | 133 | ||||||
Toyota Motor Corp. | 30,900 | 1,769 | ||||||
Yamaha Motor Co., Ltd. | 3,500 | 100 | ||||||
5,780 | ||||||||
Banks 0.8% | ||||||||
Fukuoka Financial Group, Inc. | 7,400 | 48 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 41,120 | 411 | ||||||
Mitsui Trust Holdings, Inc. | 9,000 | 72 | ||||||
Mizuho Financial Group, Inc. | 45 | 253 | ||||||
Sapporo Hokuyo Holdings, Inc. | 4 | 41 | ||||||
Shinsei Bank Ltd. | 13,000 | 42 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 29 | 238 | ||||||
The 77 Bank Ltd. | 6,000 | 41 | ||||||
The Bank Of Kyoto Ltd. | 4,000 | 51 | ||||||
The Bank of Yokohama Ltd. | 13,000 | 92 | ||||||
The Chiba Bank, Ltd. | 9,000 | 72 | ||||||
The Chugoku Bank Ltd. | 4,000 | 58 | ||||||
The Gunma Bank Ltd. | 6,000 | 43 | ||||||
The Hachijuni Bank, Ltd. | 8,000 | 61 | ||||||
The Hiroshima Bank Ltd. | 7,000 | 38 | ||||||
The Iyo Bank Ltd. | 5,000 | 49 | ||||||
The Joyo Bank, Ltd. | 9,000 | 56 | ||||||
The San-in Godo Bank Ltd. | 2,000 | 18 | ||||||
The Shizuoka Bank Ltd. | 9,000 | 94 | ||||||
The Sumitomo Trust & Banking Co., Ltd. | 7,000 | 52 | ||||||
Yamaguchi Financial Group, Inc. | 4,000 | 47 | ||||||
1,877 |
54 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Capital Goods 2.8% | ||||||||
Amada Co., Ltd. | 4,000 | 40 | ||||||
Asahi Glass Co., Ltd. | 15,000 | 207 | ||||||
Daikin Industries Ltd. | 2,400 | 121 | ||||||
Ebara Corp. | 9,000 | 42 | ||||||
Fanuc Ltd. | 1,000 | 110 | ||||||
Fuji Electric Holdings Co., Ltd. | 9,000 | 34 | ||||||
Fujikura Ltd. | 7,000 | 45 | ||||||
Hankyu Hanshin Holdings, Inc. | 14,000 | 66 | ||||||
Hino Motors Ltd. | 13,000 | 94 | ||||||
Hitachi Cable Ltd. | 8,000 | 54 | ||||||
Hitachi Construction Machinery Co. Ltd. | 2,100 | 86 | ||||||
Hitachi High-Technologies Corp. | 2,600 | 59 | ||||||
IHI Corp. | 21,000 | 50 | ||||||
Itochu Corp. | 37,000 | 468 | ||||||
JGC Corp. | 2,000 | 40 | ||||||
JS Group Corp. | 2,800 | 45 | ||||||
JTEKT Corp. | 3,200 | 62 | ||||||
Kajima Corp. | 13,000 | 46 | ||||||
Kandenko Co., Ltd. | 3,000 | 19 | ||||||
Kawasaki Heavy Industries Ltd. | 13,000 | 47 | ||||||
Keihan Electric Railway Co., Ltd. | 9,000 | 36 | ||||||
Kinden Corp. | 4,000 | 36 | ||||||
Komatsu Ltd. | 5,500 | 184 | ||||||
Kubota Corp. | 11,000 | 92 | ||||||
Marubeni Corp. | 52,000 | 447 | ||||||
Matsushita Electric Works Ltd. | 11,000 | 122 | ||||||
Minebea Co., Ltd. | 7,000 | 48 | ||||||
Mitsubishi Corp. | 28,600 | 890 | ||||||
Mitsubishi Electric Corp. | 27,000 | 329 | ||||||
Mitsubishi Heavy Industries Ltd. | 46,000 | 268 | ||||||
Mitsui & Co., Ltd. | 28,000 | 726 | ||||||
Mitsui Engineering & Shipbuilding Co., Ltd. | 11,000 | 65 | ||||||
NGK Insulators Ltd. | 2,000 | 71 | ||||||
Nippon Sheet Glass Co., Ltd. | 10,000 | 61 | ||||||
Nishimatsu Construction Co., Ltd. | 6,000 | 19 | ||||||
NSK Ltd. | 4,000 | 35 | ||||||
NTN Corp. | 6,000 | 57 | ||||||
Obayashi Corp. | 16,000 | 81 | ||||||
Shimizu Corp. | 18,000 | 94 | ||||||
SMC Corp. | 700 | 94 | ||||||
Sumitomo Corp. | 20,100 | 350 | ||||||
Sumitomo Electric Industries Ltd. | 10,800 | 175 | ||||||
Sumitomo Heavy Industries Ltd. | 7,000 | 92 | ||||||
Taisei Corp. | 30,000 | 90 | ||||||
The Furukawa Electric Co., Ltd. | 10,000 | 48 | ||||||
Toda Corp. | 5,000 | 26 | ||||||
Toto Ltd. | 6,000 | 43 | ||||||
Toyota Tsusho Corp. | 4,800 | 135 | ||||||
6,449 | ||||||||
Commercial Services & Supplies 0.2% | ||||||||
Dai Nippon Printing Co., Ltd. | 13,000 | 189 | ||||||
Kokuyo Co., Ltd. | 1,600 | 14 | ||||||
Secom Co., Ltd | 1,900 | 98 | ||||||
Sohgo Security Services Co., Ltd. | 1,100 | 18 | ||||||
Toppan Printing Co., Ltd. | 16,000 | 156 | ||||||
Toppon Forms Co., Ltd. | 1,100 | 11 | ||||||
486 | ||||||||
Consumer Durables & Apparel 1.2% | ||||||||
Casio Computer Co., Ltd. | 3,100 | 29 | ||||||
Daito Trust Construction Co., Ltd. | 1,800 | 84 | ||||||
Daiwa House Industry Co., Ltd. | 7,000 | 100 | ||||||
Funai Electric Co., Ltd. | 300 | 13 | ||||||
HASEKO Corp. * | 14,500 | 35 | ||||||
Heiwa Corp. | 1,100 | 12 | ||||||
Makita Corp. | 1,800 | 87 | ||||||
Matsushita Electric Industrial Co., Ltd. | 34,000 | 649 | ||||||
Nikon Corp. | 3,000 | 96 | ||||||
Nisshinbo Industries, Inc. | 4,000 | 55 | ||||||
Onward Holdings Co., Ltd. | 4,000 | 41 | ||||||
Pioneer Corp. | 3,600 | 40 | ||||||
Sankyo Co., Ltd. | 1,200 | 51 | ||||||
Sanyo Electric Co., Ltd. * | 121,000 | 200 | ||||||
Sega Sammy Holdings, Inc. | 3,000 | 41 | ||||||
Sekisui Chemical Co., Ltd. | 6,000 | 41 | ||||||
Sekisui House Ltd. | 8,000 | 102 | ||||||
Sharp Corp. | 15,000 | 237 | ||||||
Shimano, Inc. | 1,300 | 47 | ||||||
Sony Corp. | 14,200 | 701 | ||||||
Sumitomo Forestry Co., Ltd. | 3,000 | 23 | ||||||
Toyobo Co., Ltd. | 7,000 | 17 | ||||||
Victor Co. of Japan Ltd. * | 21,000 | 45 | ||||||
Yamaha Corp. | 1,500 | 35 | ||||||
2,781 | ||||||||
Consumer Services 0.0% | ||||||||
Benesse Corp. | 1,300 | 49 | ||||||
Oriental Land Co., Ltd. | 600 | 35 | ||||||
84 | ||||||||
Diversified Financials 0.6% | ||||||||
Acom Co., Ltd. | 3,860 | 92 | ||||||
Aiful Corp. | 2,800 | 66 | ||||||
Credit Saison Co., Ltd. | 2,500 | 80 | ||||||
Daiwa Securities Group, Inc. | 9,000 | 87 | ||||||
Hitachi Capital Corp. | 1,100 | 15 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 7,650 | 265 | ||||||
Nikko Cordial Corp. | 6,500 | 93 | ||||||
Nomura Holdings, Inc. | 13,100 | 233 | ||||||
Orient Corp. * | 7,000 | 10 | ||||||
ORIX Corp. | 560 | 115 | ||||||
Promise Co., Ltd. | 2,750 | 83 | ||||||
Sfcg Co., Ltd. | 120 | 20 | ||||||
Shinko Securities Co., Ltd. | 9,000 | 47 | ||||||
Takefuji Corp. | 3,980 | 101 | ||||||
1,307 | ||||||||
Energy 0.6% | ||||||||
Cosmo Oil Co., Ltd. | 34,000 | 148 | ||||||
INPEX Holdings, Inc. | 25 | 269 | ||||||
Japan Petroleum Exploration Co., Ltd. | 600 | 46 | ||||||
Nippon Mining Holdings, Inc. | 19,000 | 180 | ||||||
Nippon Oil Corp. | 41,000 | 363 | ||||||
Showa Shell Sekiyu K.K. | 9,500 | 112 | ||||||
TonenGeneral Sekiyu K.K. | 15,000 | 151 | ||||||
1,269 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Aeon Co., Ltd. | 11,700 | 184 |
See financial notes 55
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
FamilyMart Co., Ltd. | 1,700 | 50 | ||||||
Lawson, Inc. | 1,800 | 62 | ||||||
Ryoshoku Ltd. | 1,300 | 29 | ||||||
The Seiyu Ltd. * | 32,000 | 39 | ||||||
Uny Co., Ltd. | 4,000 | 35 | ||||||
399 | ||||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Ajinomoto Co., Inc. | 9,000 | 102 | ||||||
Asahi Breweries Ltd. | 6,800 | 112 | ||||||
Coca-Cola West Holdings Co., Ltd. | 2,100 | 49 | ||||||
Ezaki Glico Co., Ltd. | 2,000 | 21 | ||||||
House Foods Corp. | 3,200 | 51 | ||||||
Japan Tobacco, Inc. | 89 | 519 | ||||||
Kikkoman Corp. | 4,000 | 51 | ||||||
Kirin Brewery Co., Ltd. | 13,000 | 182 | ||||||
Meiji Dairies Corp. | 9,000 | 47 | ||||||
Meiji Seika Kaisha Ltd. | 10,200 | 45 | ||||||
Nichirei Corp. | 3,000 | 13 | ||||||
Nippon Meat Packers, Inc. | 4,000 | 40 | ||||||
Nisshin Seifun Group, Inc. | 5,500 | 49 | ||||||
Nissin Food Products Co., Ltd. | 1,600 | 50 | ||||||
Q.P. Corp. | 2,200 | 22 | ||||||
Sapporo Holdings Ltd. | 7,000 | 53 | ||||||
Toyo Suisan Kaisha Ltd. | 3,500 | 61 | ||||||
Yakult Honsha Co., Ltd. | 2,000 | 46 | ||||||
Yamazaki Baking Co., Ltd. | 4,000 | 35 | ||||||
1,548 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Alfresa Holdings Corp. | 1,400 | 81 | ||||||
Mediceo Paltac Holdings Co., Ltd. | 2,100 | 31 | ||||||
Olympus Corp. | 1,500 | 62 | ||||||
Suzuken Co., Ltd. | 1,300 | 42 | ||||||
Terumo Corp. | 2,000 | 98 | ||||||
314 | ||||||||
Household & Personal Products 0.1% | ||||||||
Kao Corp. | 4,000 | 115 | ||||||
Lion Corp. | 4,000 | 19 | ||||||
Shiseido Co., Ltd. | 3,000 | 72 | ||||||
Unicharm Corp. | 700 | 42 | ||||||
248 | ||||||||
Insurance 0.4% | ||||||||
Aioi Insurance Co., Ltd. | 12,000 | 70 | ||||||
Millea Holdings, Inc. | 6,200 | 244 | ||||||
Mitsui Sumitomo Insurance Co., Ltd. | 12,000 | 138 | ||||||
NIPPONKOA Insurance Co., Ltd. | 10,000 | 92 | ||||||
Nissay Dowa General Insurance Co., Ltd. | 7,000 | 40 | ||||||
Sompo Japan Insurance, Inc. | 8,000 | 94 | ||||||
T&D Holdings, Inc. | 1,850 | 111 | ||||||
The Fuji Fire and Marine Insurance Co., Ltd. | 4,000 | 14 | ||||||
803 | ||||||||
Materials 1.4% | ||||||||
Asahi Kasei Corp. | 15,000 | 115 | ||||||
Daicel Chemical Industries Ltd. | 6,000 | 44 | ||||||
Daido Steel Co., Ltd | 6,000 | 41 | ||||||
Dainippon Ink & Chemicals, Inc. | 19,000 | 91 | ||||||
Denki Kagaku Kogyo Kabushiki Kaisha | 9,000 | 53 | ||||||
Dowa Holdings Co., Ltd. | 4,000 | 47 | ||||||
Hitachi Chemical Co., Ltd. | 2,900 | 71 | ||||||
Hitachi Metals Ltd. | 4,000 | 52 | ||||||
JFE Holdings, Inc. | 5,100 | 299 | ||||||
JSR Corp. | 2,200 | 57 | ||||||
Kaneka Corp. | 6,000 | 53 | ||||||
Kobe Steel Ltd. | 31,000 | 112 | ||||||
Kuraray Co., Ltd. | 3,000 | 39 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 5,000 | 50 | ||||||
Mitsubishi Materials Corp. | 17,000 | 100 | ||||||
Mitsubishi Rayon Co., Ltd. | 9,000 | 51 | ||||||
Mitsui Chemicals, Inc. | 12,000 | 113 | ||||||
Mitsui Mining & Smelting Co., Ltd. | 11,000 | 46 | ||||||
Nippon Light Metal Co., Ltd. | 8,000 | 16 | ||||||
Nippon Paper Group, Inc. | 33 | 99 | ||||||
Nippon Steel Corp. | 46,000 | 306 | ||||||
Nisshin Steel Co., Ltd. | 15,000 | 58 | ||||||
Nitto Denko Corp. | 1,600 | 78 | ||||||
Oji Paper Co., Ltd. | 20,000 | 91 | ||||||
Shin-Etsu Chemical Co., Ltd. | 2,700 | 173 | ||||||
Showa Denko K.K. | 10,000 | 39 | ||||||
Sumitomo Bakelite Co., Ltd. | 2,000 | 12 | ||||||
Sumitomo Chemical Co., Ltd. | 19,000 | 169 | ||||||
Sumitomo Metal Industries, Ltd. | 24,000 | 119 | ||||||
Sumitomo Metal Mining Co., Ltd. | 2,000 | 45 | ||||||
Sumitomo Osaka Cement Co., Ltd. | 4,000 | 10 | ||||||
Taiheiyo Cement Corp. | 13,000 | 41 | ||||||
Taiyo Nippon Sanso Corp. | 4,000 | 36 | ||||||
Teijin Ltd. | 18,000 | 87 | ||||||
Tokuyama Corp. | 4,000 | 56 | ||||||
Tokyo Steel Manufacturing Co., Ltd. | 2,700 | 37 | ||||||
Toray Industries, Inc. | 16,000 | 123 | ||||||
Tosoh Corp. | 10,000 | 64 | ||||||
Toyo Seikan Kaisha Ltd. | 4,800 | 87 | ||||||
Ube Industries Ltd. | 16,000 | 57 | ||||||
3,237 | ||||||||
Media 0.1% | ||||||||
Dentsu, Inc. | 34 | 89 | ||||||
Fuji Television Network, Inc. | 20 | 41 | ||||||
Nippon Television Network Corp. | 440 | 57 | ||||||
Toho Co., Ltd. | 2,100 | 42 | ||||||
Tokyo Broadcasting System, Inc. | 2,000 | 53 | ||||||
TV Asahi Corp. | 9 | 16 | ||||||
298 | ||||||||
Pharmaceuticals & Biotechnology 0.5% | ||||||||
Astellas Pharma, Inc. | 2,600 | 115 | ||||||
Chugai Pharmaceutical Co., Ltd. | 4,400 | 76 | ||||||
Daiichi Sankyo Co., Ltd. | 3,700 | 105 | ||||||
Eisai Co., Ltd. | 1,800 | 76 | ||||||
Kyowa Hakko Kogyo Co., Ltd. | 6,000 | 66 | ||||||
Mitsubishi Tanabe Pharma Corp. | 4,000 | 46 | ||||||
Ono Pharmaceutical Co., Ltd. | 1,500 | 78 | ||||||
Shionogi & Co., Ltd. | 4,000 | 68 | ||||||
Taisho Pharmaceutical Co., Ltd. | 5,000 | 96 | ||||||
Takeda Pharmaceutical Co., Ltd. | 5,300 | 331 | ||||||
1,057 | ||||||||
Real Estate 0.2% | ||||||||
Leopalace21 Corp. | 2,000 | 64 | ||||||
Mitsubishi Estate Co., Ltd. | 4,000 | 120 | ||||||
Mitsui Fudosan Co., Ltd. | 4,000 | 111 |
56 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Sumitomo Realty & Development Co., Ltd. | 1,500 | 53 | ||||||
Tokyo Tatemono Co., Ltd. | 5,000 | 64 | ||||||
Tokyu Land Corp. | 4,000 | 41 | ||||||
453 | ||||||||
Retailing 0.3% | ||||||||
Aoyama Trading Co., Ltd. | 1,700 | 44 | ||||||
Canon Marketing Japan, Inc. | 1,700 | 33 | ||||||
EDION Corp. | 1,100 | 13 | ||||||
Fast Retailing Co., Ltd. | 1,200 | 69 | ||||||
H2O Retailing Corp. | 2,100 | 18 | ||||||
Isetan Co., Ltd. | 3,100 | 42 | ||||||
Izumi Co., Ltd. | 1,200 | 18 | ||||||
J Front Retailing Co., Ltd. * | 5,600 | 50 | ||||||
Marui Group Co., Ltd. | 6,400 | 66 | ||||||
Mitsukoshi, Ltd. | 7,000 | 32 | ||||||
Shimamura Co., Ltd. | 400 | 39 | ||||||
Takashimaya Co., Ltd. | 4,000 | 49 | ||||||
The Daiei, Inc. * | 19,050 | 136 | ||||||
Yamada Denki Co., Ltd. | 810 | 84 | ||||||
693 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Advantest Corp. | 1,700 | 49 | ||||||
Elpida Memory, Inc. * | 1,000 | 35 | ||||||
NEC Electronics Corp. * | 3,500 | 96 | ||||||
Rohm Co., Ltd. | 1,200 | 105 | ||||||
Sumco Corp. | 1,500 | 55 | ||||||
Tokyo Electron Ltd. | 1,300 | 76 | ||||||
416 | ||||||||
Software & Services 0.3% | ||||||||
CSK Holdings Corp. | 1,000 | 39 | ||||||
ITOCHU Techno-Solutions Corp. | 1,100 | 39 | ||||||
KONAMI Corp. | 2,000 | 59 | ||||||
Nintendo Co., Ltd. | 530 | 337 | ||||||
Nomura Research Institute, Ltd. | 3,300 | 117 | ||||||
NTT Data Corp. | 24 | 109 | ||||||
Oracle Corp. Japan | 1,000 | 46 | ||||||
746 | ||||||||
Technology Hardware & Equipment 1.9% | ||||||||
Alps Electric Co., Ltd. | 2,900 | 36 | ||||||
Brother Industries, Ltd. | 4,000 | 54 | ||||||
Canon, Inc. | 9,700 | 491 | ||||||
Citizen Holdings Co., Ltd. | 6,100 | 66 | ||||||
FUJIFILM Holdings Corp. | 7,400 | 354 | ||||||
Fujitsu Ltd. | 55,000 | 432 | ||||||
Hitachi Ltd. | 101,000 | 676 | ||||||
Hitachi Maxell Ltd. | 1,100 | 13 | ||||||
Hoya Corp. | 2,800 | 102 | ||||||
Ibiden Co., Ltd. | 1,100 | 93 | ||||||
Keyence Corp. | 300 | 69 | ||||||
Konica Minolta Holdings, Inc. | 6,000 | 105 | ||||||
Kyocera Corp. | 2,100 | 179 | ||||||
Mabuchi Motor Co., Ltd. | 700 | 47 | ||||||
Murata Manufacturing Co., Ltd. | 1,600 | 97 | ||||||
NEC Corp. | 65,000 | 323 | ||||||
Nidec Corp. | 1,300 | 98 | ||||||
Nippon Electric Glass Co., Ltd. | 5,000 | 85 | ||||||
Oki Electric Industry Co., Ltd. * | 16,000 | 27 | ||||||
OMRON Corp. | 2,100 | 52 | ||||||
Ricoh Co., Ltd. | 9,000 | 178 | ||||||
Seiko Epson Corp. | 4,800 | 113 | ||||||
Taiyo Yuden Co., Ltd. | 2,000 | 33 | ||||||
Tdk Corp. | 1,200 | 98 | ||||||
Toshiba Corp. | 63,000 | 534 | ||||||
Toshiba Tec Corp. | 3,000 | 19 | ||||||
Yokogawa Electric Corp. | 3,500 | 44 | ||||||
4,418 | ||||||||
Telecommunication Services 1.3% | ||||||||
KDDI Corp. | 45 | 340 | ||||||
Nippon Telegraph & Telephone Corp. | 387 | 1,771 | ||||||
NTT DoCoMo, Inc. | 528 | 768 | ||||||
Softbank Corp. | 3,500 | 82 | ||||||
2,961 | ||||||||
Transportation 1.0% | ||||||||
All Nippon Airways Co., Ltd. | 24,000 | 93 | ||||||
Central Japan Railway Co. | 23 | 238 | ||||||
East Japan Railway Co. | 51 | 420 | ||||||
Fukuyama Transporting Co., Ltd. | 3,400 | 15 | ||||||
Japan Airlines Corp. * | 61,000 | 138 | ||||||
Kamigumi Co., Ltd. | 5,000 | 41 | ||||||
Kawasaki Kisen Kaisha, Ltd. | 7,000 | 97 | ||||||
Keihin Electric Express Railway Co., Ltd. | 6,000 | 37 | ||||||
Keio Corp. | 10,000 | 61 | ||||||
Keisei Electric Railway Co., Ltd. | 8,000 | 44 | ||||||
Kintetsu Corp. | 28,000 | 85 | ||||||
Mitsui O.S.K. Lines, Ltd. | 11,000 | 182 | ||||||
Nagoya Railroad Co., Ltd. | 11,000 | 32 | ||||||
Nippon Express Co., Ltd. | 19,000 | 96 | ||||||
Nippon Yusen Kabushiki Kaisha | 19,000 | 196 | ||||||
Nishi-Nippon Railroad Co., Ltd. | 3,000 | 11 | ||||||
Odakyu Electric Railway Co., Ltd. | 10,000 | 70 | ||||||
Seino Holdings Co., Ltd. | 6,000 | 51 | ||||||
Tobu Railway Co., Ltd. | 7,000 | 33 | ||||||
Tokyu Corp. | 13,000 | 84 | ||||||
West Japan Railway Co. | 36 | 180 | ||||||
Yamato Holdings Co., Ltd. | 6,000 | 88 | ||||||
2,292 | ||||||||
Utilities 1.2% | ||||||||
Chubu Electric Power Co., Inc. | 13,600 | 348 | ||||||
Electric Power Development Co., Ltd. | 2,500 | 99 | ||||||
Hokkaido Electric Power Co., Inc. | 4,200 | 91 | ||||||
Hokuriku Electric Power Co. | 4,400 | 92 | ||||||
Kyushu Electric Power Co., Inc. | 11,300 | 276 | ||||||
Osaka Gas Co., Ltd. | 31,000 | 121 | ||||||
Shikoku Electric Power Co., Inc. | 3,900 | 98 | ||||||
The Chugoku Electric Power Co., Inc. | 8,400 | 165 | ||||||
The Kansai Electric Power Co., Inc. | 16,900 | 381 | ||||||
The Tokyo Electric Power Co., Inc. | 25,900 | 657 | ||||||
Toho Gas Co., Ltd. | 12,000 | 62 | ||||||
Tohoku Electric Power Co., Inc. | 11,600 | 245 | ||||||
Tokyo Gas Co., Ltd. | 35,000 | 156 | ||||||
2,791 | ||||||||
42,707 |
See financial notes 57
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Luxembourg 0.4% | ||||||||
Materials 0.3% | ||||||||
ArcelorMittal | 8,543 | 689 | ||||||
Media 0.1% | ||||||||
RTL Group | 962 | 98 | ||||||
SES FDR | 4,986 | 123 | ||||||
221 | ||||||||
910 | ||||||||
Netherlands 3.2% | ||||||||
Banks 0.1% | ||||||||
ABN AMRO Holding N.V. | 2,831 | 153 | ||||||
Capital Goods 0.2% | ||||||||
European Aeronautic Defence & Space Co. | 13,450 | 459 | ||||||
Commercial Services & Supplies 0.0% | ||||||||
Randstad Holding N.V. | 1,010 | 56 | ||||||
Consumer Durables & Apparel 0.2% | ||||||||
Koninklijke (Royal) Philips Electronics N.V. | 12,974 | 537 | ||||||
Diversified Financials 0.9% | ||||||||
ING Groep N.V. - CVA | 41,536 | 1,877 | ||||||
SNS Reaal | 5,758 | 139 | ||||||
2,016 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Koninklijke Ahold N.V. * | 33,341 | 502 | ||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Heineken Holding N.V. | 1,732 | 102 | ||||||
Heineken N.V. | 2,036 | 143 | ||||||
Koninklijke Numico N.V. (a) | 738 | 59 | ||||||
Unilever N.V. CVA | 35,268 | 1,148 | ||||||
1,452 | ||||||||
Insurance 0.2% | ||||||||
Aegon N.V. | 23,541 | 488 | ||||||
Materials 0.2% | ||||||||
Akzo Nobel N.V. | 3,943 | 318 | ||||||
James Hardie Industries N.V. CDI | 10,955 | 66 | ||||||
Koninklijke DSM N.V. | 2,760 | 157 | ||||||
541 | ||||||||
Media 0.1% | ||||||||
Reed Elsevier N.V. | 4,449 | 87 | ||||||
Wolters Kluwer N.V. | 1,635 | 51 | ||||||
138 | ||||||||
Real Estate 0.1% | ||||||||
Corio N.V. | 755 | 66 | ||||||
Rodamco Europe N.V. | 562 | 80 | ||||||
146 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASML Holding N.V. * | 3,046 | 106 | ||||||
STMicroelectronics N.V. | 9,525 | 163 | ||||||
269 | ||||||||
Telecommunication Services 0.2% | ||||||||
Koninklijke (Royal) KPN N.V. | 20,541 | 388 | ||||||
Transportation 0.1% | ||||||||
TNT N.V. | 3,228 | 133 | ||||||
7,278 | ||||||||
New Zealand 0.1% | ||||||||
Materials 0.0% | ||||||||
Fletcher Building Ltd. | 7,894 | 72 | ||||||
Telecommunication Services 0.1% | ||||||||
Telecom Corp. of New Zealand Ltd. | 27,824 | 93 | ||||||
Transportation 0.0% | ||||||||
Air New Zealand Ltd. | 10,092 | 17 | ||||||
Utilities 0.0% | ||||||||
Contact Energy Ltd. | 6,089 | 43 | ||||||
225 | ||||||||
Norway 1.6% | ||||||||
Banks 0.1% | ||||||||
DnB NOR A.S.A. | 17,841 | 296 | ||||||
Capital Goods 0.1% | ||||||||
Orkla A.S.A. | 12,214 | 229 | ||||||
Energy 1.2% | ||||||||
Aker Kvaerner A.S.A. | 3,200 | 112 | ||||||
Norsk Hydro A.S.A. | 17,028 | 250 | ||||||
StatoilHydro A.S.A. | 65,914 | 2,246 | ||||||
2,608 | ||||||||
Insurance 0.0% | ||||||||
Storebrand A.S.A. | 3,300 | 47 | ||||||
Materials 0.1% | ||||||||
Norske Skogindustrier A.S.A. | 5,200 | 57 | ||||||
Yara International A.S.A. | 3,200 | 125 | ||||||
182 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. * | 10,584 | 249 | ||||||
3,611 | ||||||||
Portugal 0.4% | ||||||||
Banks 0.2% | ||||||||
Banco BPI S.A. - Reg’d | 9,758 | 86 | ||||||
Banco Comercial Portugues S.A. - Reg’d | 30,338 | 148 | ||||||
Banco Espirito Santo S.A. - Reg’d | 3,644 | 89 | ||||||
323 | ||||||||
Materials 0.0% | ||||||||
CIMPOR-Cimentos de Portugal, SGPS S.A. | 5,088 | 46 | ||||||
Media 0.0% | ||||||||
PT Multimedia-Servicos de Telecomunicacoes e Multimedia, SGPS S.A. | 1,938 | 27 | ||||||
Telecommunication Services 0.1% | ||||||||
Portugal Telecom SGPS S.A. - Reg’d | 13,759 | 185 |
58 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Transportation 0.0% | ||||||||
Brisa - Auto-Estradas de Portugal S.A., Private Shares | 4,094 | 58 | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 39,871 | 257 | ||||||
896 | ||||||||
Singapore 0.9% | ||||||||
Banks 0.3% | ||||||||
DBS Group Holdings Ltd. | 13,056 | 204 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 20,897 | 134 | ||||||
United Overseas Bank Ltd. | 13,238 | 199 | ||||||
537 | ||||||||
Capital Goods 0.1% | ||||||||
Fraser & Neave Ltd. | 14,000 | 59 | ||||||
Keppel Corp., Ltd. | 10,000 | 103 | ||||||
SembCorp Industries Ltd. | 11,000 | 45 | ||||||
Singapore Technologies Engineering Ltd. | 20,700 | 55 | ||||||
262 | ||||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. | 19,000 | 60 | ||||||
Real Estate 0.1% | ||||||||
Capitaland Ltd. | 10,000 | 56 | ||||||
City Developments Ltd. | 9,000 | 100 | ||||||
UOL Group Ltd. | 12,000 | 44 | ||||||
200 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Chartered Semiconductor Manufacturing Ltd. * | 78,000 | 62 | ||||||
Telecommunication Services 0.2% | ||||||||
Singapore Telecommunications Ltd. | 137,486 | 391 | ||||||
�� | ||||||||
Transportation 0.2% | ||||||||
ComfortDelGro Corp., Ltd. | 29,000 | 39 | ||||||
Neptune Orient Lines Ltd. | 45,146 | 162 | ||||||
Singapore Airlines Ltd. | 15,270 | 208 | ||||||
SMRT Corp., Ltd. | 48,619 | 60 | ||||||
469 | ||||||||
1,981 | ||||||||
South Africa 0.0% | ||||||||
Materials 0.0% | ||||||||
Mondi Ltd. * | 742 | 7 | ||||||
Spain 3.4% | ||||||||
Banks 1.0% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 31,058 | 786 | ||||||
Banco de Sabadell S.A. | 7,430 | 76 | ||||||
Banco Espanol de Credito S.A. | 4,095 | 84 | ||||||
Banco Popular Espanol S.A. | 8,303 | 146 | ||||||
Banco Santander S.A. | 49,893 | 1,091 | ||||||
Bankinter S.A. | 6,926 | 103 | ||||||
2,286 | ||||||||
Capital Goods 0.2% | ||||||||
Acciona S.A. | 226 | 70 | ||||||
ACS, Actividades de Construccion y Servicios S.A. | 1,372 | 85 | ||||||
Fomento de Construcciones y Contratas S.A. (FCC) | 963 | 84 | ||||||
Gamesa Corp. Tecnologica S.A. | 1,021 | 52 | ||||||
Grupo Ferrovial S.A. | 942 | 83 | ||||||
Sacyr Vallehermoso S.A. | 1,065 | 50 | ||||||
Zardoya Otis S.A. | 1,824 | 62 | ||||||
486 | ||||||||
Energy 0.5% | ||||||||
Compania Espanola de Petroleos S.A. | 2,357 | 241 | ||||||
Repsol YPF S.A. | 21,775 | 861 | ||||||
1,102 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Altadis S.A. | 2,836 | 202 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 14,284 | 67 | ||||||
Materials 0.0% | ||||||||
Acerinox S.A. | 2,057 | 61 | ||||||
Media 0.0% | ||||||||
Gestevision Telecinco S.A. | 1,474 | 43 | ||||||
Real Estate 0.0% | ||||||||
Metrovacesa S.A. | 656 | 77 | ||||||
Retailing 0.1% | ||||||||
Industria de Diseno Textil S.A. | 1,484 | 111 | ||||||
Telecommunication Services 0.8% | ||||||||
Telefonica S.A. | 52,686 | 1,744 | ||||||
Transportation 0.0% | ||||||||
Abertis Infraestructuras S.A. | 3,024 | 101 | ||||||
Utilities 0.7% | ||||||||
Enagas | 1,718 | 49 | ||||||
Endesa S.A. | 5,534 | 288 | ||||||
Gas Natural SDG S.A. | 4,033 | 249 | ||||||
Iberdrola S.A. | 51,885 | 837 | ||||||
Union Fenosa S.A. | 2,993 | 199 | ||||||
1,622 | ||||||||
7,902 | ||||||||
Sweden 1.9% | ||||||||
Banks 0.5% | ||||||||
Nordea Bank AB | 27,883 | 499 | ||||||
Skandinaviska Enskilda Banken AB (SEB), Class A | 6,270 | 193 | ||||||
Svenska Handelsbanken AB, Class A | 7,273 | 242 | ||||||
Swedbank AB, Class A | 5,942 | 187 | ||||||
1,121 | ||||||||
Capital Goods 0.5% | ||||||||
Assa Abloy AB, B Shares | 4,032 | 85 | ||||||
Atlas Copco AB, A Shares | 3,032 | 51 | ||||||
Atlas Copco AB, B Shares | 5,200 | 81 |
See financial notes 59
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Sandvik AB | 9,829 | 187 | ||||||
Scania AB, A Shares | 3,227 | 93 | ||||||
Scania AB, B Shares | 4,500 | 123 | ||||||
Skanska AB, B Shares | 5,317 | 106 | ||||||
SKF AB, B shares | 3,962 | 77 | ||||||
Volvo AB, A Shares | 6,203 | 121 | ||||||
Volvo AB, B Shares | 15,950 | 314 | ||||||
1,238 | ||||||||
Commercial Services & Supplies 0.0% | ||||||||
Securitas AB, B Shares | 6,000 | 76 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, Series B | 7,747 | 150 | ||||||
Husqvarna AB, A Shares | 210 | 3 | ||||||
Husqvarna AB, B Shares | 3,200 | 39 | ||||||
192 | ||||||||
Diversified Financials 0.2% | ||||||||
Industrivarden AB, A Shares | 3,600 | 79 | ||||||
Industrivarden AB, C Shares | 2,700 | 55 | ||||||
Investor AB, A Shares | 3,149 | 77 | ||||||
Investor AB, B Shares | 6,969 | 173 | ||||||
384 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Swedish Match AB | 2,200 | 49 | ||||||
Materials 0.2% | ||||||||
Boliden AB | 3,400 | 60 | ||||||
Holmen AB, B Shares | 2,000 | 79 | ||||||
SSAB Svenskt Stal AB, Series A | 2,100 | 69 | ||||||
SSAB Svenskt Stal AB, Series B | 1,435 | 42 | ||||||
Svenska Cellulosa AB (SCA), B Shares | 10,800 | 191 | ||||||
441 | ||||||||
Retailing 0.1% | ||||||||
Hennes & Mauritz AB, Class B | 3,719 | 248 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Telefonaktiebolaget LM Ericsson, Class B | 75,626 | 226 | ||||||
Telecommunication Services 0.2% | ||||||||
Tele2 AB, B Shares | 5,200 | 123 | ||||||
TeliaSonera AB | 38,966 | 384 | ||||||
507 | ||||||||
4,482 | ||||||||
Switzerland 3.7% | ||||||||
Capital Goods 0.2% | ||||||||
ABB Ltd. - Reg’d | 11,705 | 354 | ||||||
Geberit AG - Reg’d | 451 | 61 | ||||||
Schindler Holding AG - Reg’d | 606 | 42 | ||||||
457 | ||||||||
Commercial Services & Supplies 0.1% | ||||||||
Adecco S.A. - Reg’d | 1,875 | 113 | ||||||
SGS S.A. - Reg’d | 68 | 89 | ||||||
202 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 2,487 | 178 | ||||||
Swatch Group AG | 304 | 97 | ||||||
Swatch Group AG - Reg’d | 1,159 | 73 | ||||||
348 | ||||||||
Diversified Financials 0.9% | ||||||||
Credit Suisse Group - Reg’d | 13,119 | 887 | ||||||
Julius Baer Holding AG - Reg’d | 690 | 60 | ||||||
Pargesa Holding S.A. | 779 | 89 | ||||||
UBS AG - Reg’d | 18,677 | 1,001 | ||||||
2,037 | ||||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Nestle S.A. - Reg’d | 3,635 | 1,679 | ||||||
Insurance 0.5% | ||||||||
Baloise Holding AG - Reg’d | 564 | 60 | ||||||
Swiss Life Holding - Reg’d * | 429 | 119 | ||||||
Swiss Re - Reg’d | 4,314 | 405 | ||||||
Zurich Financial Services AG - Reg’d | 1,994 | 602 | ||||||
1,186 | ||||||||
Materials 0.3% | ||||||||
Ciba Specialty Chemicals AG - Reg’d | 931 | 46 | ||||||
Clariant AG - Reg’d * | 2,529 | 32 | ||||||
Givaudan S.A. - Reg’d | 70 | 69 | ||||||
Holcim Ltd. - Reg’d | 2,516 | 288 | ||||||
Lonza Group AG - Reg’d | 398 | 47 | ||||||
Syngenta AG - Reg’d | 786 | 190 | ||||||
672 | ||||||||
Pharmaceuticals & Biotechnology 0.7% | ||||||||
Novartis AG - Reg’d | 17,588 | 936 | ||||||
Roche Holding AG | 441 | 84 | ||||||
Roche Holding AG - Genusschein | 3,677 | 628 | ||||||
1,648 | ||||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 786 | 291 | ||||||
Transportation 0.0% | ||||||||
Kuehne & Nagel International AG - Reg’d | 570 | 61 | ||||||
8,581 | ||||||||
Thailand 0.0% | ||||||||
Telecommunication Services 0.0% | ||||||||
Total Access Communication Public Co., Ltd. * | 55,400 | 67 | ||||||
67 | ||||||||
United Kingdom 18.9% | ||||||||
Automobiles & Components 0.1% | ||||||||
GKN plc | 13,648 | 105 | ||||||
Banks 3.3% | ||||||||
Alliance & Leicester plc | 5,175 | 85 | ||||||
Barclays plc | 78,363 | 992 | ||||||
Bradford & Bingley plc | 8,953 | 58 | ||||||
HBOS plc | 43,966 | 801 | ||||||
HSBC Holdings plc | 141,144 | 2,798 | ||||||
Lloyds TSB Group plc | 100,948 | 1,147 | ||||||
Northern Rock plc | 4,722 | 18 | ||||||
Royal Bank of Scotland Group plc | 117,007 | 1,264 |
60 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Standard Chartered plc | 10,772 | 419 | ||||||
7,582 | ||||||||
Capital Goods 0.4% | ||||||||
BAE Systems plc | 31,255 | 325 | ||||||
Bunzl plc | 3,278 | 50 | ||||||
Cobham plc | 17,593 | 77 | ||||||
Rolls-Royce Group plc * | 10,459 | 117 | ||||||
Rolls-Royce Group plc, B Shares * | 422,543 | 1 | ||||||
Smiths Group plc | 4,073 | 96 | ||||||
Tomkins plc | 18,833 | 87 | ||||||
Travis Perkins plc | 2,050 | 62 | ||||||
Wolseley plc | 6,764 | 118 | ||||||
933 | ||||||||
Commercial Services & Supplies 0.2% | ||||||||
Capita Group plc | 5,192 | 81 | ||||||
Experian Group Ltd. | 18,653 | 196 | ||||||
G4S plc | 11,210 | 49 | ||||||
Hays plc | 15,950 | 46 | ||||||
Rentokil Initial plc | 25,602 | 92 | ||||||
464 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Burberry Group plc | 6,331 | 81 | ||||||
Persimmon plc | 2,290 | 50 | ||||||
131 | ||||||||
Consumer Services 0.5% | ||||||||
Carnival plc | 5,873 | 275 | ||||||
Compass Group plc | 35,263 | 254 | ||||||
Enterprise Inns plc | 6,204 | 82 | ||||||
InterContinental Hotels Group plc | 6,213 | 145 | ||||||
Ladbrokes plc | 22,864 | 197 | ||||||
Mitchells & Butlers plc | 5,714 | 79 | ||||||
Rank Group plc | 14,119 | 30 | ||||||
Whitbread plc | 2,961 | 109 | ||||||
William Hill plc | 3,988 | 52 | ||||||
1,223 | ||||||||
Diversified Financials 0.3% | ||||||||
3i Group plc | 3,967 | 90 | ||||||
ICAP plc | 5,737 | 70 | ||||||
International Personal Finance | 14,938 | 77 | ||||||
Invesco plc | 7,135 | 109 | ||||||
Man Group plc | 4,419 | 54 | ||||||
Provident Financial plc | 1,573 | 29 | ||||||
Schroders plc | 3,238 | 104 | ||||||
Schroders plc - Non Voting | 2,215 | 62 | ||||||
595 | ||||||||
Energy 4.9% | ||||||||
BG Group plc | 17,062 | 316 | ||||||
BP plc | 366,440 | 4,767 | ||||||
Royal Dutch Shell plc, Class A | 79,741 | 3,498 | ||||||
Royal Dutch Shell plc, Class B | 60,688 | 2,648 | ||||||
11,229 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
J Sainsbury plc | 33,243 | 379 | ||||||
Tesco plc | 64,141 | 652 | ||||||
William Morrison Supermarkets plc | 24,783 | 153 | ||||||
1,184 | ||||||||
Food, Beverage & Tobacco 1.6% | ||||||||
Associated British Foods plc | 8,191 | 156 | ||||||
British American Tobacco plc | 18,812 | 717 | ||||||
Cadbury Schweppes plc | 21,671 | 288 | ||||||
Diageo plc | 23,970 | 550 | ||||||
Imperial Tobacco Group plc | 4,281 | 217 | ||||||
SABMiller plc | 8,370 | 252 | ||||||
Scottish & Newcastle plc | 15,964 | 261 | ||||||
Tate & Lyle plc | 7,280 | 66 | ||||||
Unilever plc | 36,103 | 1,224 | ||||||
3,731 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Smith & Nephew plc | 7,149 | 97 | ||||||
Household & Personal Products 0.1% | ||||||||
Reckitt Benckiser Group plc | 3,363 | 195 | ||||||
Insurance 1.0% | ||||||||
Aviva plc | 43,377 | 683 | ||||||
Friends Provident plc | 29,688 | 114 | ||||||
Legal & General Group plc | 122,187 | 357 | ||||||
Old Mutual plc | 87,249 | 335 | ||||||
Prudential plc | 34,789 | 568 | ||||||
Royal & Sun Alliance Insurance Group plc | 55,670 | 184 | ||||||
2,241 | ||||||||
Materials 1.2% | ||||||||
Anglo American plc | 10,898 | 758 | ||||||
Antofagasta plc | 7,210 | 126 | ||||||
BHP Billiton plc | 12,215 | 469 | ||||||
Imperial Chemical Industries plc | 12,235 | 168 | ||||||
Johnson Matthey plc | 2,653 | 99 | ||||||
Kazakhmys plc | 2,649 | 82 | ||||||
Lonmin plc | 1,173 | 84 | ||||||
Mondi plc | 4,863 | 45 | ||||||
Rexam plc | 10,030 | 113 | ||||||
Rio Tinto plc | 6,360 | 596 | ||||||
Xstrata plc | 2,948 | 213 | ||||||
2,753 | ||||||||
Media 0.4% | ||||||||
British Sky Broadcasting Group plc | 4,172 | 59 | ||||||
Daily Mail & General Trust | 3,204 | 41 | ||||||
EMAP plc | 2,477 | 45 | ||||||
ITV plc | 44,142 | 91 | ||||||
Pearson plc | 11,516 | 192 | ||||||
Reed Elsevier plc | 6,820 | 90 | ||||||
Reuters Group plc | 13,515 | 186 | ||||||
Trinity Mirror plc | 4,860 | 41 | ||||||
United Business Media plc | 3,203 | 49 | ||||||
WPP Group plc | 7,810 | 107 | ||||||
Yell Group plc | 8,829 | 84 | ||||||
985 | ||||||||
Pharmaceuticals & Biotechnology 0.9% | ||||||||
AstraZeneca plc | 11,215 | 552 | ||||||
GlaxoSmithKline plc | 52,008 | 1,336 | ||||||
Shire plc | 3,741 | 94 | ||||||
1,982 | ||||||||
Real Estate 0.2% | ||||||||
British Land Co., plc | 3,736 | 84 | ||||||
Hammerson plc | 1,934 | 45 | ||||||
Land Securities Group plc | 4,503 | 154 | ||||||
Liberty International plc | 3,594 | 90 |
See financial notes 61
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Segro plc | 6,780 | 66 | ||||||
439 | ||||||||
Retailing 0.4% | ||||||||
DSG International plc | 32,130 | 87 | ||||||
Home Retail Group plc | 14,046 | 128 | ||||||
Kesa Electricals plc | 11,718 | 78 | ||||||
Kingfisher plc | 47,511 | 195 | ||||||
Marks & Spencer Group plc | 15,566 | 212 | ||||||
Next plc | 2,301 | 106 | ||||||
Signet Group plc | 37,153 | 70 | ||||||
The Carphone Warehouse Group plc | 12,062 | 88 | ||||||
964 | ||||||||
Software & Services 0.0% | ||||||||
LogicaCMG plc | 12,058 | 41 | ||||||
The Sage Group plc | 12,131 | 61 | ||||||
102 | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Electrocomponents plc | 13,382 | 70 | ||||||
Telecommunication Services 2.0% | ||||||||
BT Group plc | 117,301 | 797 | ||||||
Cable & Wireless | 56,466 | 230 | ||||||
Vodafone Group plc | 922,804 | 3,636 | ||||||
4,663 | ||||||||
Transportation 0.1% | ||||||||
BBA Aviation plc | 14,460 | 73 | ||||||
British Airways plc * | 13,148 | 122 | ||||||
195 | ||||||||
Utilities 0.7% | ||||||||
British Energy Group plc | 9,546 | 106 | ||||||
Centrica plc | 51,748 | 398 | ||||||
International Power plc | 10,014 | 102 | ||||||
Kelda Group plc | 3,040 | 60 | ||||||
National Grid plc | 22,436 | 371 | ||||||
Scottish & Southern Energy plc | 7,217 | 234 | ||||||
Severn Trent plc | 4,070 | 123 | ||||||
United Utilities plc | 13,821 | 210 | ||||||
1,604 | ||||||||
43,467 | ||||||||
United States 0.0% | ||||||||
Diversified Financials 0.0% | ||||||||
NYSE Euronext * | 14 | 1 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Synthes, Inc. | 716 | 90 | ||||||
91 | ||||||||
Total Foreign Common Stock (Cost $207,725) | 223,201 | |||||||
Other Investment Companies 2.0% of net assets | ||||||||
United Kingdom 0.1% | ||||||||
Foreign & Colonial Investment Trust | 6,578 | 44 | ||||||
The Alliance Trust | 9,785 | 76 | ||||||
Witan Investment Trust | 7,081 | 73 | ||||||
193 | ||||||||
United States 1.9% | ||||||||
iShares MSCI EAFE Index Fund | 50,000 | 4,309 | ||||||
Total Other Investment Companies (Cost $4,372) | 4,502 | |||||||
Preferred Stock 0.5% of net assets | ||||||||
Germany 0.5% | ||||||||
Automobiles & Components 0.4% | ||||||||
Porsche AG | 96 | 256 | ||||||
Volkswagen AG | 2,991 | 566 | ||||||
822 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Fresenius SE | 1,216 | 97 | ||||||
Household & Personal Products 0.1% | ||||||||
Henkel KGaA | 2,194 | 112 | ||||||
1,031 | ||||||||
Italy 0.0% | ||||||||
Insurance 0.0% | ||||||||
Unipol Gruppo Finanziario S.p.A. | 22,106 | 79 | ||||||
Switzerland 0.0% | ||||||||
Capital Goods 0.0% | ||||||||
Schindler Holding AG | 1,071 | 75 | ||||||
Total Preferred Stock (Cost $874) | 1,185 | |||||||
Rights 0.0% of net assets | ||||||||
Spain 0.0% | ||||||||
Metrovacesa S.A. * | 656 | — | ||||||
Total Rights (Cost $—) | — | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investment 0.7% of net assets | ||||||||
Commercial Paper & Other Obligations 0.7% | ||||||||
Wells Fargo, Grand Cayman Time Deposit |
62 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
4.75%, 11/01/07 | 1,530 | 1,530 | ||||||
Total Short-Term Investment (Cost $1,530) | 1,530 | |||||||
End of Investments. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $214,678, and the unrealized appreciation and depreciation were $20,898 and ($5,158), respectively, with a net unrealized appreciation of $15,740. | ||||||||
At 10/31/07, the values of certain foreign securities held by the fund aggregating $212,582, were adjusted from their closing market values following the guidelines by the fund’s Board of Trustees. |
* | Non-income producing security. | |
(a) | Fair-valued by Management. |
CDI — CHESS Depository Interest
CVA — Dutch Certificate
FDR — Fiduciary Depositary Receipt
See financial notes 63
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $214,501) | $230,418 | |||||
Receivables: | ||||||
Fund shares sold | 1,207 | |||||
Dividends (net of $22 foreign withholding tax) | 352 | |||||
Foreign tax reclaims | 60 | |||||
Prepaid expenses | + | 1 | ||||
�� | ||||||
Total assets | 232,038 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,193 | |||||
Investment adviser and administrator fees | 205 | |||||
Transfer agent and shareholder services fees | 1 | |||||
Fund shares redeemed | 42 | |||||
Payable to custodian for foreign currency | 1 | |||||
Accrued expenses | + | 79 | ||||
Total liabilities | 2,521 | |||||
Net Assets | ||||||
Total assets | 232,038 | |||||
Total liabilities | − | 2,521 | ||||
Net assets | $229,517 | |||||
Net Assets by Source | ||||||
Capital received from investors | 211,488 | |||||
Net investment income not yet distributed | 1,587 | |||||
Net realized capital gains | 522 | |||||
Net unrealized capital gains | 15,920 |
Net Asset Value (NAV) by Share Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $27,160 | 2,388 | $11.37 | ||||||||
Select Shares | $36,764 | 3,229 | $11.39 | ||||||||
Institutional Shares | $165,593 | 14,529 | $11.40 |
64 See financial notes
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statement of
Operations
For April 2, 2007 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (net of $150 foreign withholding tax) | $1,820 | |||||
Interest | + | 87 | ||||
Total investment income | 1,907 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 476 | |||||
Net realized losses on foreign currency translations | (36 | ) | ||||
Net realized gains on futures contracts | + | 48 | ||||
Net realized gains | 488 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 15,917 | |||||
Net unrealized gains on foreign currency translations | + | 3 | ||||
Net unrealized gains | 15,920 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 215 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 22 | |||||
Select Shares | 12 | |||||
Institutional Shares | 51 | |||||
Custodian fees | 486 | |||||
FTSE RAFI Index fee | 49 | |||||
Registration fees | 35 | |||||
Portfolio accounting fees | 27 | |||||
Professional fees | 21 | |||||
Shareholder reports | 11 | |||||
Overdraft expense | 4 | |||||
Trustees’ fees | 1 | |||||
Other expenses | + | 1 | ||||
Total expenses | 935 | |||||
Expense reduction by adviser and Schwab | − | 649 | ||||
Net expenses | 286 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 1,907 | |||||
Net expenses | − | 286 | ||||
Net investment income | 1,621 | |||||
Net realized gains | 488 | |||||
Net unrealized gains | + | 15,920 | ||||
Increase in net assets from operations | $18,029 |
See financial notes 65
Table of Contents
Schwab Fundamental International Large Company Index Fund
Statements of
Changes in Net Assets
For the current period only. Because the fund commenced operations on April 2, 2007, it has no prior report period. All numbers x 1,000.
Operations |
4/2/07*-10/31/07 | |||||
Net investment income | $1,621 | ||||
Net realized gains | 488 | ||||
Net unrealized gains | + | 15,920 | |||
Increase in net assets from operations | 18,029 |
Transactions in Fund Shares |
4/2/07*-10/31/07 | ||||||||||
SHARES | VALUE | |||||||||
Shares Sold | ||||||||||
Investor Shares | 2,885 | $30,188 | ||||||||
Select Shares | 3,999 | 41,830 | ||||||||
Institutional Shares | + | 15,243 | 160,306 | |||||||
Total shares sold | 22,127 | $232,324 | ||||||||
Shares Redeemed | ||||||||||
Investor Shares | (497 | ) | ($5,264 | ) | ||||||
Select Shares | (770 | ) | (8,042 | ) | ||||||
Institutional Shares | + | (714 | ) | (7,530 | ) | |||||
Total shares redeemed | (1,981 | ) | ($20,836 | ) | ||||||
Net transactions in fund shares | 20,146 | $211,488 | ||||||||
Shares Outstanding and Net Assets | ||||||||||
4/2/07*-10/31/07 | ||||||||||
SHARES | NET ASSETS | |||||||||
Beginning of period | 0 | $0 | ||||||||
Total increase | + | 20,146 | 229,517 | |||||||
End of period | 20,146 | $229,517 | ||||||||
Net investment income not yet distributed | $1,587 |
* | Commencement of operations. |
66 See financial notes
Table of Contents
Schwab Fundamental Index Funds
Financial Notes
1. Business Structure of the Funds
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended. The list below shows all the funds in the trust including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) Schwab Fundamental US Large Company Index Fund Schwab Fundamental US Small-Mid Company Index Fund Schwab Fundamental International Large Company Index Fund Schwab S&P 500 Index Fund Schwab Institutional Select S&P 500 Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index Fund Schwab MarketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Laudus U.S. MarketMasters Fund | Laudus Small-Cap MarketMasters Fund Laudus International MarketMasters Fund Schwab Viewpoints Fund Schwab Premier Equity Fund Schwab Core Equity Fund Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Financial Services Fund Schwab Health Care Fund Schwab Technology Fund Schwab Target 2010 Fund Schwab Target 2020 Fund Schwab Target 2030 Fund Schwab Target 2040 Fund Schwab Retirement Income Fund | |
Schwab Fundamental U.S. Large Company Index Fund, Schwab Fundamental U.S. Small-Mid Company Index Fund, and Schwab Fundamental International Large Company Index Fund offer three classes of shares: Investor Shares, Select Shares, and Institutional Shares. Shares of each class represent interest in the same portfolio, but each class has different expenses and investment minimums.
Shares are bought and sold at net asset value, or NAV, which is the price for all outstanding shares. Each share has a par value of 1/1,000 of a cent, and the trustees may authorize the issuance of as many shares as necessary.
Schwab Fundamental U.S. Large Company Index Fund, Schwab Fundamental U.S. Small-Mid Company Index Fund and Schwab Fundamental International Large Company Index Fund, commenced operations on April 2, 2007.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds used in the preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America.
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and asked quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the current exchange rate. | |
• | Securities for which no quoted value is available or when a significant event has occurred between the time of the security’s last close and the time the fund calculates net asset value: valued at fair value, as determined in good faith by the funds’ investment adviser using guidelines adopted by the funds’ Board of Trustees and the Pricing Committee. Some of the more common reasons that may necessitate that a security be valued at fair value include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; or the security’s primary pricing source is not able or willing to provide a price, or certain foreign securities’ closing market prices adjusted for changes in value that may occur between the close of a foreign exchange and the time at which a fund’s |
67
Table of Contents
Schwab Fundamental Index Funds
Financial Notes, (continued)
2. Significant Accounting Policies (continued):
shares are priced. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. |
• | Futures and forwards currency contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a market value based on that day’s exchange rates (for forwards). When a fund closes out a futures or forwards position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost. | |
• | Mutual funds: valued at their respective net asset values as determined by those funds in accordance with the 1940 Act for a given day. |
(b) Portfolio Investments:
Futures Contract: The funds may invest in futures contracts. Futures contracts involve certain risks because they can be very sensitive to market movements.
One risk is that the price of a futures contract may not move in perfect correlation with the price of the underlying securities. Another risk is that, at certain times, it may be impossible for a fund to close out a position in a futures contract, due to a difference in trading hours or to market conditions that may reduce the liquidity for a futures contract or its underlying securities. The potential for losses associated with futures contracts may exceed amounts recorded in the Statement of Assets and Liabilities.
Because futures contracts carry inherent risks, a fund must give the broker a deposit of cash and/or securities (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another, but it is generally a percentage of the contract amount.
Futures are traded publicly on exchanges, and their market value changes daily. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
Forward Currency Contract: The funds may invest in forward currency contracts in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates. “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. Forwards are similar to futures except that they are not publicly traded, but are agreements directly between two parties.
As with futures, forwards involve certain risks that are not fully reflected in the fund’s financials. If counter-parties to the contracts or if the value of the foreign currency changes unfavorably, the fund could sustain a loss.
(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.
(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.
68
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Schwab Fundamental Index Funds
Financial Notes, (continued)
2. Significant Accounting Policies (continued):
(e) Expenses:
Expenses that are specific to a fund or a class are charged directly to that fund or class. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their net assets.
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 its average daily net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains once a year.
(g) Custody Credit:
The Schwab Fundamental U.S. Large Company Index Fund and Schwab Fundamental U.S. Small-Mid Company Index Fund each has an arrangement with its custodian bank under which the fund receives a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts (if any) are disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform with accounting principles generally accepted in the United States of America. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates.
(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.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes.
(j) 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, the funds expect the risk of loss to be remote.
(k) New Accounting Standards:
Financial Accounting Standards Board Interpretation (FIN) No. 48 — Accounting for Uncertainty in Income Taxes — an Interpretation of SFAS No. 109, was issued in July 2006 and is effective for fiscal years beginning after December 15, 2006. This Interpretation provides new requirements for the recognition, measurement, and disclosure in the financial statements of a tax position taken or expected to be taken in a tax return when there is uncertainty about whether that tax position will ultimately be sustained. The funds implemented FIN 48 upon inception and has determined that there is no impact to the funds’ financial statements at this time.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements.
69
Table of Contents
Schwab Fundamental Index Funds
Financial Notes, (continued)
2. Significant Accounting Policies (continued):
SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management is currently evaluating the impact of adopting SFAS No. 157 on the funds’ financial statements.
3. | Affiliates and Affiliated Transactions: |
(All dollar amounts are x 1,000)
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 it and the trust.
For its advisory and administrative services to each fund, the investment adviser is entitled to receive an annual fee payable monthly based on each fund’s average daily net assets described as follows:
Average daily net assets | ||||
First $500 million | 0.30% | |||
$500 million to $5 billion | 0.22% | |||
$5 billion to $10 billion | 0.20% | |||
Over $10 billion | 0.18% |
Charles Schwab & Co., Inc. (“Schwab”), is an affiliate of the investment adviser and is the trust’s transfer agent and shareholder services agent.
For its transfer agent and shareholder services, Schwab is entitled to receive an annual fee payable monthly based on each fund’s average daily net assets described as follows:
Transfer Agent Fees | Shareholder Service Fees | |||||||
Investor Shares | 0.05% | 0.20% | ||||||
Select Shares | 0.05% | 0.05% | ||||||
Institutional Shares | 0.05% | 0.05% |
Although these agreements specify certain fees for these services, CSIM and Schwab have made additional agreements with each fund to limit the total expenses charged, excluding interest, taxes and certain non-routine expenses, through February 27, 2009, as follows:
Investor Shares | 0.59% | |||
Select Shares | 0.44% | |||
Institutional Shares | 0.35% |
CSIM has entered into a license agreement with FTSE to use certain FTSE indexes and trademarks in connection with the offering and operation of certain registered investment companies. The funds have entered into a sub-license agreement with CSIM pursuant to which CSIM has agreed to sub-license certain FTSE indexes and trademarks to the funds. Under the sub-license agreement, each fund has agreed to pay its pro rata share of licensing fees directly to FTSE, and to reimburse CSIM for its pro rata share of a one-time advance licensing payment made by CSIM to FTSE.
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 funds may make direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and officers. As of October 31, 2007, each fund’s total security transactions with other Schwab Funds were as follows:
Fundamental US Large Company Index Fund | 628 | |||
Fundamental US Small-Mid Company Index Fund | 565 | |||
Fundamental International Large Company Index Fund | 6,124 |
70
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Schwab Fundamental Index Funds
Financial Notes, (continued)
3. | Affiliates and Affiliated Transactions (continued): (All dollar amounts are x 1,000) |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions within the Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. There was no interfund borrowing or lending activity for any fund during the period.
Trustees
Trustees may include people who are officers and/or directors of the investment adviser or Schwab. Federal securities law limit 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 persons for their service as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
4. Borrowing from Banks:
The funds may borrow money from banks and custodians. The funds may obtain temporary bank loans through the trusts to which they belong, to use for meeting shareholder redemptions or for extraordinary or emergency purposes. The Schwab Funds have custodian overdraft facilities and uncommitted line of credit arrangements of $150 million and $100 million with State Street Corporation and Bank of America, N.A., respectively. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. There was no borrowing from the line of credit for the funds during the period.
5. | Purchases and Sales of Investment Securities: |
(All dollar amounts are x 1,000)
For the fiscal year ended October 31, 2007, purchases and sales of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Fundamental U.S. Large Company Index Fund | 487,869 | 6,066 | ||||||
Fundamental U.S. Small-Mid Company Index Fund | 90,995 | 2,058 | ||||||
Fundamental International Large Company Index Fund | 283,865 | 71,071 |
6. | Redemption Fee: |
(All dollar amounts are x 1,000)
The funds may impose a short-term redemption fee on any fund shares that are redeemed or exchanged by a shareholder within a specified number of days of the purchase date. Each fund charges a redemption fee of 2.00% on shares sold or exchanged
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Schwab Fundamental Index Funds
Financial Notes, (continued)
6. | Redemption Fee: (continued): (All dollar amounts are x 1,000) |
30 days or less after purchasing them. Such amounts are net of the redemption fee proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the current period are:
Current Period | ||||
(04/02/07-10/31/07) | ||||
Fundamental U.S. Large Company Index Fund | ||||
Investor Shares | 2 | |||
Select Shares | 5 | |||
Institutional Shares | 23 | |||
Fundamental U.S. Small-Mid Company Index Fund | ||||
Investor Shares | 1 | |||
Select Shares | 6 | |||
Institutional Shares | — | |||
Fundamental International Large Company Index Fund | ||||
Investor Shares | 1 | |||
Select Shares | 9 | |||
Institutional Shares | 9 |
7. | Federal Income Taxes: |
(All dollar amounts are x 1,000)
As of October 31, 2007, the components of distributable earnings on a tax-basis were as follows:
Fundamental | Fundamental | Fundamental | ||||||||||
U.S. Large | U.S. Small-Mid | International Large | ||||||||||
Company Index Fund | Company Index Fund | Company Index Fund | ||||||||||
Undistributed ordinary income | $2,660 | $411 | $2,285 | |||||||||
Undistributed long-term capital gains | 143 | 32 | — | |||||||||
Unrealized appreciation | 25,848 | 6,793 | 20,898 | |||||||||
Unrealized depreciation | (19,619 | ) | (6,569 | ) | (5,158 | ) | ||||||
Other unrealized appreciation/(depreciation) | — | — | 3 | |||||||||
Net unrealized appreciation/(depreciation) | $6,229 | $224 | $15,743 | |||||||||
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 carry forwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2007, the funds had no capital loss carry forwards.
For tax purposes, realized net capital losses occurring after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of October 31, 2007, the funds had no aggregate deferred realized net capital losses.
As of October 31, 2007, the funds made no distributions.
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; paydowns on fixed-income 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 Fundamental Index Funds
Financial Notes, (continued)
7. | Federal Income Taxes (continued): (All dollar amounts are x 1,000) |
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2007, the funds made the following reclassifications:
Fundamental | Fundamental | Fundamental | ||||||||||
U.S. Large | U.S. Small-Mid | International Large | ||||||||||
Company Index Fund | Company Index Fund | Company Index Fund | ||||||||||
Capital shares | — | — | — | |||||||||
Undistributed net investment income | — | — | $(34 | ) | ||||||||
Net realized capital gains and losses | — | — | 34 |
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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-Mid Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small-Mid Company Index Fund
Schwab Fundamental International Large Company Index Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small-Mid Company Index Fund, and Schwab Fundamental International Large Company Index Fund (three of the portfolios constituting Schwab Capital Trust, hereafter referred to as the ‘Funds‘) at October 31, 2007, and the results of each of their operations, the changes in each of their net assets and the financial highlights for the period April 2, 2007 (commencement of operations) through October 31, 2007, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as ‘financial statements‘) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 13, 2007
San Francisco, California
December 13, 2007
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Other Federal Tax Information (unaudited):
(All dollar amounts are x 1,000)
The Fundamental International Large Company Index Fund may elect to pass on the benefits of the foreign tax credit of $148 to its shareholders for the year ended October 31, 2007. The respective foreign source income on the Fund is $1,899.
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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 advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
Consistent with these responsibilities, 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 CSIM (the “Agreement”) with respect to existing funds in the Trust, including the funds covered in this annual report, 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. 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 memo regarding the responsibilities of trustees for the approval of investment advisory contracts. 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 at meetings held on May 2, 2007, and June 5, 2007, and approved the renewal of the Agreement for an additional one year term at the meeting held on June 5, 2007. The Board’s approval of the Agreement 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 information considered by the Trustees included specific information concerning changes in the nature, extent and quality of services provided by CSIM since the Trustees had last considered approval of the Agreement. The Trustees also considered investments in CSIM’s mutual fund infrastructure and the fact that 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 CSIM’s top three ranking in an independent survey regarding mutual fund client loyalty, 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.
Fund Performance. The Board considered fund performance in determining whether to renew the Agreement. Specifically, the Trustees considered each fund’s performance relative to a peer group and peer category of other mutual
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funds and appropriate indices/benchmarks, in light of total return, yield, when applicable, and market trends. As part of this review, the Trustees considered the composition of the peer group and peer category, selection criteria and the reputation of the third party who prepared the peer group and peer category analysis. In evaluating the performance of each fund, the Trustees considered both risk and shareholder risk expectations for such fund and the appropriateness of the benchmark used to compare the performance of each fund. The Trustees further considered the level of fund performance in the context of its review of fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the funds supported renewal of the Agreement.
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 other comparable 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 fees charged by CSIM to other mutual funds and to other types of accounts, such as wrap accounts, 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 Agreement.
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. The Board also considered information relating to changes to CSIM’s business operations and how these changes affected CSIM’s profitability under the Agreement. 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.
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 previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered existing contractual investment advisory fee schedules that include lower fees at higher graduated asset levels. The Board also considered certain existing commitments by CSIM and Schwab that are designed to pass along potential economies of scale to fund shareholders. 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, unanimously approved the continuation of the Agreement and concluded that the compensation under the Agreement 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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The tables below give information as of October 31, 2007, about the trustees and officers for The 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, and Laudus Trust. As of October 31, 2007, the Fund Complex included 70 funds.
The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Board 1—Director, Redwood Trust, Inc. Board 2—Director, PMI Group, Inc. | |||||
Donald F. Dorward 1931 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chief Executive Officer, Dorward & Associates (corporate management, marketing and communications consulting firm). From 1996-1999, Executive Vice President and Managing Director, Grey Advertising. Prior to 1996, President and Chief Executive Officer, Allen & Dorward Advertising. | 60 | None. | |||||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley. Until February 2004, Co-Chief Executive Officer, Aphton Corp. (bio-pharmaceuticals). | 70 | Board 1—Director, Mission West Properties Board 2—Director, TOUSA Board 3—Director, Harris-Stratex Networks Board 4—Director, Genitope Corp. Board 5—Director & Non-Executive Chairman, Solectron Corp. Board 6—Director, Ditech Networks | |||||
Robert G. Holmes 1931 (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, Semloh Financial, Inc. (international financial services and investment advisory firm). | 60 | None. | |||||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and founder of Smith Graham & Co.(investment advisors). | 60 | Board 1—Board of Cooper Industries Board 2—Chairman of the Audit Committee of Oneok Partners LP | |||||
Donald R. Stephens 1938 Trustee (Trustee of Schwab Capital Trust since 1989.) | Managing Partner, D. R. Stephens & Company (investments). | 60 | None. | |||||
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Independent Trustees continued | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | �� | During the | Overseen by | |||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Michael W. Wilsey 1943 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer, Wilsey Bennett, Inc. (real estate investment and management, and other investments). | 60 | None. | |||||
Interested Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served ) | Past Five Years | the Trustee | Other Directorships | |||||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc.; Chairman and Director, Charles 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 and Director, Schwab Holdings, Inc. Through June 2007, Director, U.S. Trust Company, N.A., U.S. Trust Company of New York. Until May 2003, Co-Chief Executive Officer, The Charles Schwab Corporation. | 60 | None | |||||
Randall W. Merk2 1954 Trustee (Trustee of Schwab Capital Trust since 2005.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | 70 | None. | |||||
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Officers of the Trust | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Randall W. Merk 1954 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2007.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer, Charles Schwab Investment Management, Inc.; Chief Financial Officer, Laudus Trust and Laudus Variable Insurance Trust; Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited. Through June 2007, Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust; Chief Financial Officer, Mutual Fund Division, UST Advisors, Inc. From December 1999 to November 2004, Sr. Vice President, Financial Reporting, Charles Schwab & Co. Inc. | |
Kimon Daifotis 1959 Senior Vice President and Chief Investment Officer-Fixed Income (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Fixed Income, Charles Schwab Investment Management, Inc. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Jeffrey Mortimer 1963 Senior Vice President and Chief Investment Officer-Equities (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Equities, Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer, Laudus Trust and Laudus Variable Insurance Trust. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Randall Fillmore 1960 Chief Compliance Officer and AML Officer (Officer of Schwab Capital Trust since 2002.) | Senior Vice President and Chief Compliance Officer, Charles Schwab Investment Management, Inc.; Senior Vice President, Charles Schwab & Co. Inc.; Chief Compliance Officer, Laudus Trust and Laudus Variable Insurance Trust. Through June 2007, Chief Compliance Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust. From 2002 to 2003, Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc. | |
Koji E. Felton 1959 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 1998.) | Senior Vice President, Chief Counsel and Corporate Secretary, Charles Schwab Investment Management, Inc.; Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. Through June 2007, Chief Legal Officer, Excelsior Funds Inc., Excelsior Tax Exempt Funds, Inc. and Excelsior Funds Trust. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust; since 2006, Chief Counsel, Laudus Trust and Variable Insurance Trust. Until July 2005, Senior Associate, Paul Hastings Janofsky & Walker LLP. | |
Cathy Sabo 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President-Compliance, Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust. Until 2004, Vice President, Client, Sales & Services Controls, Charles Schwab & Co., Inc. | |
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Officers of the Trust continued | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Michael Haydel 1970 Vice President (Officer of Schwab Capital Trust since 2006.) | Vice President, Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President and AML Officer, Laudus Trust and Laudus Variable Insurance Trust. Until March 2004, Director Charles Schwab & Co., Inc. | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after 20 years of service as a trustee, whichever comes first. Independent trustees elected prior to January 1, 2000 will retire on the following schedule: Messrs. Holmes and Dorward will retire on December 31, 2007, and Messrs. Stephens and Wilsey will retire on December 31, 2010. |
2 | In addition to their employment with the investment advisor and the distributor, Messrs. Schwab and Merk also own stock of The Charles Schwab Corporation. Mr. Schwab and Mr. Merk are Interested Trustees because they are employees of Schwab and/or the advisor. |
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 other officer serves at the pleasure of the Board. |
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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.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500T). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the “coupon rate”) until a specified date (the “maturity date”), at which time the issuer returns the money borrowed (“principal” or “face value”) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
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.
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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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 Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting Schwab’s website at www.schwab.com/schwabfunds, the SEC’s website at 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 Schwab’s website at www.schwab.com/schwabfunds or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fundtm
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 Technology Fundtm
Schwab Fundamental US Large Company Index Fundtm
Schwab Fundamental US Small-Mid Company Index Fundtm
Schwab Fundamental International Large Company Index Fundtm
Schwab Global Real Estate Fundtm
Schwab Institutional Select® S&P 500 Fund
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 Viewpoints Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
Bond Funds
Schwab YieldPlus Fund®
Schwab Short-Term Bond Market Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab Inflation Protected Fundtm
Schwab Tax-Free YieldPlus Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free YieldPlus Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity.1 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
Investment Adviser
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
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.
© 2006 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC
Printed on recycled paper.
MFR39592-00
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Table of Contents
Annual Report October 31, 2007 |
COMMAND PERFORMANCETM
Laudus MarketMasters Fundstm
Laudus U.S. MarketMasters Fundtm
Laudus Small-Cap MarketMasters Fundtm
Laudus International MarketMasters Fundtm
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Three distinct Funds, each combining the expertise of leading
investment managers with Schwab’s overall supervision.
In This Report | ||
2 | ||
3 | ||
4 | ||
6 | ||
8 | ||
10 | ||
12 | ||
13 | ||
44 | ||
51 | ||
53 | ||
56 | ||
60 |
Select Shares® are available for the MarketMasters Fundstm
The Laudus MarketMasters Funds offers Select Shares, a share class that carries lower expenses than Investor Shares in exchange for higher investment minimums on many of its funds. Select Shares are available for initial purchases of $50,000 or more of a single fund in a single account and for shareholders who add to their existing Investor Share position, bringing the value to or above $50,000. We encourage shareholders to review their portfolio to see if they are eligible to exchange into Select Shares. If you believe you are eligible, you should contact Schwab or your financial intermediary to request a tax-free interclass exchange into Select Shares. Select Shares may not be available through financial intermediaries other than Charles Schwab & Co., Inc.
To learn more, please see the Funds’ prospectus at www.laudus.com. Or call 1.800.435.4000 to order a prospectus or to speak with a representative.
To learn more, please see the Funds’ prospectus at www.laudus.com. Or call 1.800.435.4000 to order a prospectus or to speak with a representative.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
Distributor and transfer agent: Charles Schwab & Co., Inc. (Schwab).
The industry/sector classification of the funds’ portfolio holdings uses the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.
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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.schwab.com/schwabfunds.
Total Return for the Report Period | ||
Laudus U.S. MarketMasters Fundtm | ||
Investor Shares (Ticker Symbol: SWOGX) | 16.90% | |
Select Shares® (Ticker Symbol: SWMGX) | 17.19% | |
Benchmark: S&P 500® Index | 14.56% | |
Fund Category: Morningstar Large-Cap Blend | 15.22% | |
Performance Details | pages 6-7 | |
Laudus Small-Cap MarketMasters Fundtm | ||
Investor Shares (Ticker Symbol: SWOSX) | 13.79% | |
Select Shares® (Ticker Symbol: SWMSX) | 14.04% | |
Benchmark: Russell 2000® Index | 9.27% | |
Fund Category: Morningstar Small-Cap Growth | 18.96% | |
Performance Details | pages 8-9 | |
Laudus International MarketMasters Fundtm | ||
Investor Shares (Ticker Symbol: SWOIX) | 36.01% | |
Select Shares® (Ticker Symbol: SWMIX) | 36.16% | |
Benchmark: MSCI-EAFE® Index | 24.91% | |
Fund Category: Morningstar Foreign Large-Cap Growth | 32.22% | |
Performance Details | pages 10-11 | |
Minimum Initial Investment1 | ||
Investor Shares | $ 100 | |
Select Shares | $ 50,000 | |
All fund and index figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and Schwab. 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.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
Source for category information: Morningstar, Inc.
1 | Please see prospectus for further detail and eligibility requirements. |
2 Laudus MarketMasters Funds
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From the President
Randall W. Merk is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report. He joined the firm in 2002 and has held a variety of executive positions at Schwab.
Dear Shareholder,
In returning to my role as President and CEO of Charles Schwab Investment Management, I would like to thank you for investing in Laudus Funds® and share my thoughts with you on the current market environment.
The reemergence of volatility during this past year has shaken financial markets, both domestically and globally. Subprime mortgage market issues have caused a chain reaction throughout equity and credit markets, and investors are undoubtedly concerned about their financial outlook in the near future. As riskier securities came under pressure during this past August’s market correction, investors fled to “safer haven” investments, such as U.S. Treasuries.
Attempting to time the market in this way can be both a frustrating and risky experience. We have always believed your best protection against swings in market volatility is to maintain a well-diversified investment portfolio that is built to provide long-term performance.
Thank you for entrusting us with your investments. I speak for all of us at Schwab when I say our goal is to give you the financial products, guidance, and personal relationship you need to be financially fit.
Sincerely,
Laudus MarketMasters Funds 3
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The Investment Environment
Jeffrey Mortimer, CFA, a senior vice president and chief investment officer, equities, has overall responsibility for the management of the funds.
During the past year, the global economy benefited from positive earnings growth, an ample supply of liquidity, and reasonably low volatility. Investors became increasingly bullish, and firms financed a record level of private equity buyouts, acquisitions, and stock buybacks. However, the housing market correction, and more recently, turmoil in the subprime mortgage market, has had a ripple effect throughout the U.S. and global economy. Several key issues continued to resonate with investors, including the deterioration of the housing market, the lagged effects of monetary policy, tightening of lending standards, and rising energy prices.
The U.S. economy grew at a sub-par pace during the early part of the report period, consistent with the Federal Reserve’s (the Fed’s) engineered soft landing. Throughout its statements, the Fed noted that the economy would grow at a more moderate rate as a result of prior rate increases, lagged effects of higher energy prices, and a cooling housing market. As any rate below 3% is generally considered to be sub-par, the economy appeared to be on a trend of underperformance. However, Gross Domestic Product (GDP) in the second and third quarter of 2007 surprised on the upside; 3.8% and an advanced 3.9%, respectively. Though consumer spending weighed heavily in recent improved GDP readings, tightening credit conditions and continued deterioration in the U.S. housing market remained imminent threats to household equity, a meaningful underpinning of consumer spending.
The housing market remained a significant headwind for U.S. economic growth during the report period. New- and existing-home sales trended downward, and inventories reached an alarming 10.5-month supply (existing homes) by September 2007. Initial concerns that troubles in the housing market would spill over to the rest of the economy became more pronounced, as declining housing starts and home sales caused builders and mortgage lenders to layoff thousands of employees. Delinquency rates on subprime mortgages and foreclosures on residential homes continued on an upward trend as well, further pushing back a recovery in an already weakened market.
The recent tightening of lending standards had a detrimental effect on economic growth as well. Though subprime mortgages were able to find their way into securitized structures via relaxed access to credit and ample liquidity, the increased frequency of defaults by subprime borrowers stressed securities holding these mortgages, leading to wider spreads and higher risk. Evidence that subprime issues had emerged became more pronounced after February’s spike in volatility, which only compounded throughout the report period. Liquidity in the market for these riskier securities essentially dried up after this recent summer’s market
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
14.56% | S&P 500® Index: measures U.S. large-cap stocks |
9.27% | Russell 2000® Index: measures U.S. small-cap stocks |
24.91% | MSCI-EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East |
5.38% | Lehman Brothers U.S. Aggregate Bond Index: measures the U.S. bond market |
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Charles Schwab & Co., Inc.
4 Laudus MarketMasters Funds
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The Investment Environment continued
correction, putting financial institutions laden with subprime debt into financial turmoil. While the Fed helped improve liquidity issues at first by pumping money into the banking system and using the discount rate to reduce rates, many lenders reduced or cancelled altogether certain subprime lending programs.
Market volatility also had a significant impact on quantitative strategies in July and August of 2007. In a recent report by Lehman Brothers, it is believed that several large multi-strategy managers experienced significant losses in their fixed income portfolios. In order to raise cash to cover potential redemptions, and hesitant to price their now lower-valued portfolios, money managers sold their most liquid holdings in the U.S. equity market. As trades came into the market, the adverse effect that followed was that long positions declined and short positions rallied. The end result was that billions of dollars were turned over during this “quant squeeze,” leading to wider spreads and volatility in market prices.
The timing of recent turmoil in the financial markets partially stems from the fact that monetary policy typically acts with a lagged effect on the broader economy. While generally accepted that the effects of Fed rate hikes have a lag of between three and 18 months, it’s also believed that most of the effects can be seen around the twelfth month. Working back from February 2007’s correction in global markets, the Fed funds target rate was 4.25%, yet the Fed didn’t stop raising rates until June 2006, when it finally reached 5.25%. The 12-month lag, therefore, would indicate that subsequent rate hikes were finally hitting the market, as we saw during the recent summer months.
The Fed held its target for the Fed funds rate for most of the period at 5.25%. However, as conditions in the market progressively worsened, the Fed cut twice, bringing the target rate down to 4.50% by the end of the report period. Although it noted recent economic growth was solid and conditions in financial markets were markedly improved, it also expressed its concern that conditions in the housing market could hinder the economic expansion in the near term.
Against this backdrop of economic data, the market priced in future Fed rate cuts. The housing market showed little to no sign that a bottom is anywhere in the near future, labor markets faced continued downward pressures, and energy prices remained elevated. Oil reached all time highs over the year, closing out just above $96 a barrel as of the end of the report period. While the tax-like effect of higher energy prices, declining equity values in residential real estate, and the lag effect of monetary policy remained significant headwinds for the U.S. economy, the Fed’s recent response to a volatile market eased investor concern toward the end of the period.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Laudus MarketMasters Funds 5
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Laudus U.S. MarketMasters Fundtm
Jeffrey Mortimer CFA (left), senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee (right), managing director and portfolio manager, co-manages the fund.
The Laudus MarketMasters Funds use a multi-manager strategy. CSIM, the funds’ investment adviser, uses rigorous criteria to select investment managers with proven long-term track records to manage a portion of each fund’s assets. In addition to selecting the investment managers and allocating assets among them, CSIM is responsible for monitoring and coordinating the overall management of the funds.
The Laudus U.S. MarketMasters Fund Investor Shares returned 16.90% for the period, outperforming its benchmark, the S&P 500 Index, which returned 14.56%. For the report period, all subadvisors outperformed their benchmarks. Thornburg Investment Management, had a positive impact on the fund, outperforming the S&P 500 Index, due to strong stock selection in the Materials, Consumer Discretionary, and Energy sectors. Positions in Freeport-McMoran Copper and Gold, Inc., Apache Corp., and Cytec Industries, Inc. contributed to returns. Harris Associates L.P., the fund’s large-cap value manager, outperformed the Russell 1000 Value Index, as a result of strong stock selection, particularly in the Consumer Discretionary, Financials, and Information Technology sectors. Positions in Tiffany & Co., McDonald’s Corp, and Intel Corp. contributed to returns. Gardner Lewis Asset Management L.P., whose focus is growth, outperformed its benchmark, the Russell 1000 Growth Index, due to strong stock selection, particularly within the Health Care and Information Technology sectors. Positions in MEMC Electronic Materials, Inc., Apple Inc. and Cigna Corp. contributed to returns. TCW Investment Management Company outperformed its benchmark, the Russell Mid-Cap Value Index, due to positive sector weights. Better performing stocks included such names as CONSOL Energy, Inc., Murphy Oil Corp., and Varian Medical Systems, Inc.
As of 10/31/07:
Statistics
Number of Holdings | 168 |
Weighted Average
Market Cap
($ x 1,000,000) | $56,521 |
Price/Earnings Ratio (P/E) | 22.8 |
Price/Book Ratio (P/B) | 3.0 |
Portfolio Turnover Rate | 60% |
Sector Weightings % of Investments
Information Technology | 22.2% |
Financials | 17.4% |
Consumer Discretionary | 17.3% |
Health Care | 12.2% |
Industrials | 8.7% |
Energy | 5.4% |
Telecommunication Services | 4.3% |
Materials | 3.4% |
Consumer Staples | 3.0% |
Utilities | 1.1% |
Other | 5.0% |
Total | 100.0% |
Top Holdings % of Net Assets1
Intel Corp. | 2.8% |
Google, Inc., Class A | 2.1% |
Dell, Inc. | 1.8% |
CME Group, Inc. | 1.7% |
Microsoft Corp. | 1.5% |
Comcast Corp., Special Class A | 1.5% |
YUM! Brands, Inc. | 1.4% |
Best Buy Co., Inc. | 1.4% |
Corning, Inc. | 1.3% |
WellPoint, Inc. | 1.2% |
Total | 16.7% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Laudus MarketMasters Funds
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Laudus U.S. MarketMasters Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||
Investor Shares (11/18/96) | 16.90% | 15.08% | 6.70% | 7.68% | ||||||||||||
Select Shares (6/4/04) | 17.19% | n/a | n/a | 11.70% | ||||||||||||
Benchmark: S&P 500® Index | 14.56% | 13.87% | 7.10% | (11/18/96) 8.75% | ||||||||||||
(6/4/04) 12.08% | ||||||||||||||||
Fund Category: Morningstar Large-Cap Blend | 15.22% | 13.63% | 6.87% | (11/18/96) 8.31% | ||||||||||||
(6/4/04) 12.14% |
Fund Expense Ratios3: Investor Shares: Net 1.25%; Gross 1.38% / Select Shares: Net 1.07%; Gross 1.33%
Style Assessment4
Investment Managers and Allocations
% of | ||||||
Investment Manager | Investment Style | Net Assets | ||||
Gardner Lewis Asset Management L.P. | Large-Cap Growth | 25.2% | ||||
Harris Associates L.P. | Mid/Large-Cap Value | 21.5% | ||||
TCW Investment Management Company | Small/Mid-Cap Blend | 19.3% | ||||
Thornburg Investment Management, Inc. | Large-Cap Blend | 32.9% | ||||
Cash and other assets | - | 1.1% | ||||
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Because the Fund was originally an asset allocation Fund with a multi-fund strategy, its performance prior to June 3, 2002 does not reflect the current strategy and may have been different if it did.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/2/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
4 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
Laudus MarketMasters Funds 7
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Laudus Small-Cap MarketMasters Fundtm
Jeffrey Mortimer CFA (left), senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee (right), managing director and portfolio manager, co-manages the fund.
The Laudus MarketMasters Funds use a multi-manager strategy. CSIM, the funds’ investment adviser, uses rigorous criteria to select investment managers with proven long-term track records to manage a portion of each fund’s assets. In addition to selecting the investment managers and allocating assets among them, CSIM is responsible for monitoring and coordinating the overall management of the funds.
The Laudus Small-Cap MarketMasters Fund Investor Shares posted a positive return of 13.79% for the period, outperforming its benchmark, the Russell 2000 Index, which was up 9.27%. A positive contributor to the fund’s returns was TAMRO Capital Partners LLC, which beat its benchmark, the Russell 2000 Value Index. Stock selection and sector weights were positive, particularly within the Financials and Energy sectors. Stocks that performed well included Willbros Group, Inc., General Cable Corp., and GAMCO Investors, Inc. Tocqueville Asset Management LP, whose focus is small-cap blend, also outperformed its benchmark, the Russell 2000 Index, mainly due to sector weights. Among the top performing stocks were Pharmion Corp., Aspen Technology, Inc. and Oceaneering International, Inc. The small-cap growth sleeve outperformed its benchmark, the Russell 2000 Growth Index, due to strong stock selection, particularly in the Industrials and Consumer Discretionary sectors. Previously, this sleeve was managed by Veredus Asset Management; as of July 2, 2007, Neuberger Berman Management, Inc. now manages the fund’s small-cap growth focus. Stocks that performed well included Perini Corp., Force Protection, Inc. and Quanta Services, Inc. TCW Investment Management Company also outperformed its benchmark, the Russell Mid-Cap Value Index. Stock selection and industry group bets were positive, contributing to the fund’s total return.
As of 10/31/07:
Statistics
Number of Holdings | 217 |
Weighted Average
Market Cap
($ x 1,000,000) | $2,165 |
Price/Earnings Ratio (P/E) | 41.4 |
Price/Book Ratio (P/B) | 2.7 |
Portfolio Turnover Rate | 83% |
Sector Weightings % of Investments
Information Technology | 29.5% |
Health Care | 16.1% |
Industrials | 13.9% |
Consumer Discretionary | 11.8% |
Financials | 9.7% |
Energy | 6.6% |
Consumer Staples | 3.1% |
Materials | 2.7% |
Telecommunication Services | 0.7% |
Others | 5.9% |
Total | 100.0% |
Top Holdings % of Net Assets1
Thoratec Corp. | 1.2% |
Wright Medical Group, Inc. | 1.2% |
The Hain Celestial Group, Inc. | 1.1% |
CARBO Ceramics, Inc. | 1.1% |
Martek Biosciences Corp. | 1.1% |
Baldor Electric Co. | 1.1% |
Knight Capital Group, Inc.,
Class A | 1.0% |
Analogic Corp. | 1.0% |
Pharmion Corp. | 1.0% |
Aspen Technology, Inc. | 1.0% |
Total | 10.8% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset categories.
Because the Fund originally used a multi-fund strategy, its performance prior to June 3, 2002 does not reflect the current strategy and may have been different if it did.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Laudus MarketMasters Funds
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Laudus Small-Cap MarketMasters Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||
Investor Shares (9/16/97) | 13.79% | 19.59% | 7.91% | 7.73% | ||||||||||||
Select Shares (6/9/04) | 14.04% | n/a | n/a | 11.77% | ||||||||||||
Benchmark: Russell 2000® Index | 9.27% | 18.66% | 8.00% | (9/16/97) 7.75% | ||||||||||||
(6/9/04) 12.47% | ||||||||||||||||
Fund Category: Morningstar Small-Cap Growth | 18.96% | 17.47% | 7.72% | (9/16/97) 7.36% | ||||||||||||
(6/9/04) 12.24% |
Fund Expense Ratios3: Investor Shares: Net 1.55% ; Gross 1.63%/ Select Shares: Net 1.37%; Gross 1.58%
Style Assessment4
Investment Managers and Allocations
% of | ||||||
Investment Manager | Investment Style | Net Assets | ||||
TAMRO Capital Partners LLC | Small-Cap Value/Blend | 25.3% | ||||
TCW Investment Management Company | Small/Mid-Cap Blend | 18.3% | ||||
Tocqueville Asset Management LP | Small-Cap Blend | 25.6% | ||||
Neuberger Berman Management Inc.5 | Small-Cap | 28.6% | ||||
Cash and other assets | - | 2.2% | ||||
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/2/07) as stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
4 | Source: Morningstar, Inc. This style assessment is the result of evaluating the fund based on a ten-factor model for value and growth characteristics. The fund’s market capitalization placement is determined by the geometric mean of its holdings’ market capitalizations. The assessment reflects the fund’s portfolio as of 10/31/07, which may have changed since then, and is not a precise indication of risk or performance—past, present, or future. |
5 | Prior to July 2, 2007, the Small-Cap Growth sleeve was managed by Veredus Asset Management LLC. |
Laudus MarketMasters Funds 9
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Laudus International MarketMasters Fundtm
Jeffrey Mortimer CFA (left), senior vice president and chief investment officer, equities, is responsible for the overall management of the fund.
Caroline Lee (right), managing director and portfolio manager, co-manages the fund.
The Laudus MarketMasters Funds use a multi-manager strategy. CSIM, the funds’ investment adviser, uses rigorous criteria to select investment managers with proven long-term track records to manage a portion of each fund’s assets. In addition to selecting the investment managers and allocating assets among them, CSIM is responsible for monitoring and coordinating the overall management of the funds.
Laudus MarketMasters International Fund Investor Shares returned 36.01%, outperforming its benchmark, the MSCI EAFE Index, which was up 24.91% for the report period. This index is also the benchmark for each of the fund’s investment managers. William Blair & Company, LLC, whose focus is international growth, outperformed the benchmark as a result of strong stock selection, particularly within the Consumer Discretionary, Energy, and Financials sectors. Positions in Companhia Vale do Rio Doce, Ryanair Holdings Plc, and Nintendo Co., Ltd contributed to returns. Mondrian Investment Partners Limited, also outperformed the benchmark with its focus on small-cap value. For the period, Mondrian’s performance can be attributed to its strong stock selection and sector weights, particularly within the Industrials and Health Care sectors. Stocks that contributed to returns included The Weir Group Plc and SMRT Corp. American Century Global Investment Management, Inc. whose focus is small/mid cap growth, also outperformed the benchmark, mainly due to strong stock selection, particularly in the Energy, Telecommunications, Health Care, and Industrials sectors. Wentworth, Hauser and Violich, Inc. also outperformed the benchmark, as a result of strong stock selection and sector weights, particularly within the Energy and Materials sectors. Positions in Companhia Vale de Rio Doce and Rio Tinto Plc contributed to returns. Harris Associates, L.P. whose focus is on large-cap value names underperformed the benchmark as a result of poor stock selection and sector weights.
As of 10/31/07:
Country Weightings % of Investments
United Kingdom | 18.1% |
Japan | 9.8% |
Switzerland | 7.2% |
Canada | 6.4% |
France | 5.8% |
Germany | 5.6% |
Australia | 5.5% |
Bermuda | 4.8% |
Cayman Islands | 4.5% |
Netherlands | 3.1% |
Singapore | 3.0% |
Republic of Korea | 2.6% |
Brazil | 2.5% |
Other | 21.1% |
Total | 100.0% |
Statistics
Number of Holdings | 549 |
Weighted Average
Market Cap
($ x 1,000,000) | $29,035 |
Price/Earnings Ratio (P/E) | 20.1 |
Price/Book Ratio (P/B) | 3.5 |
Portfolio Turnover Rate | 71% |
Sector Weightings % of Investments
Industrials | 19.6% |
Financials | 17.7% |
Consumer Discretionary | 14.9% |
Materials | 10.8% |
Energy | 10.6% |
Information Technology | 8.2% |
Consumer Staples | 7.1% |
Health Care | 4.1% |
Telecommunication Services | 1.7% |
Utilities | 0.9% |
Other | 4.4% |
Total | 100.0% |
Top Holdings % of Net Assets1
Companhia Vale do Rio Doce ADR | 1.2% |
BHP Billiton Ltd. ADR | 1.0% |
Potash Corp. of Saskatchewan, Inc. | 1.0% |
UBS AG - Reg’d | 1.0% |
Rio Tinto plc ADR | 0.9% |
GlaxoSmithKline plc | 0.8% |
Daiwa Securities Group, Inc. | 0.8% |
Noble Corp. | 0.8% |
Weatherford International Ltd. | 0.8% |
Transocean, Inc. | 0.8% |
Total | 9.1% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Laudus MarketMasters Funds
Table of Contents
Laudus International MarketMasters Fundtm
Performance Summary as of 10/31/07
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.schwab.com/schwabfunds.
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
$50,000 Investment in Select Shares1
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||
Investor Shares (10/16/96) | 36.01% | 26.74% | 14.34% | 13.92% | ||||||||||||
Select Shares (4/2/04) | 36.16% | n/a | n/a | 23.04% | ||||||||||||
Benchmark: MSCI EAFE® Index | 24.91% | 23.20% | 9.25% | (10/16/96) 8.63% | ||||||||||||
(4/2/04) 19.96% | ||||||||||||||||
Fund Category: Morningstar Foreign Large-Cap Growth | 32.22% | 22.55% | 9.14% | (10/16/96) 9.28% | ||||||||||||
(4/2/04) 19.78% |
Fund Expense Ratios3: Investor Shares: 1.64% / Select Shares4: Net 1.47%; Gross 1.59%
Investment Managers and Allocations
% of | ||||||
Investment Manager | Investment Style | Net Assets | ||||
American Century Global Investment Management, Inc. | International Small Company | 27.3% | ||||
Wentworth, Hauser and Violich | International Growth | 16.1% | ||||
Harris Associates L.P. | International Value | 20.6% | ||||
William Blair & Company, LLC | International Growth | 23.3% | ||||
Mondrian Investment Partners Limited | International Small Company | 11.9% | ||||
Cash and other assets | - | 0.8% | ||||
All figures on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.
Because the Fund originally used a multi-fund strategy, its performance prior to June 3, 2002 does not reflect the current strategy and may have been different if it did.
1 | Fund expenses may have been partially absorbed by CSIM and Schwab. 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. |
3 | As of 2/28/07 (amended on 7/2/07) as stated in the prospectus. |
4 | Net Expense: Expenses reduced by a contractual fee waiver in effect through at least 2/27/08. Gross Expense: Does not reflect the effect of contractual fee waivers. |
Laudus MarketMasters Funds 11
Table of Contents
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees; and, ongoing costs, such as management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six-months beginning May 1, 2007 and held through October 31, 2007.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund or share class under the heading entitled ‘Expenses Paid During Period‘.
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/07 | at 10/31/07 | 5/1/07 - 10/31/07 | |||||||||||||
Laudus U.S. MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.25% | $ | 1,000 | $ | 1,060.70 | 6.49 | ||||||||||
Hypothetical 5% Return | 1.25% | $ | 1,000 | $ | 1,018.90 | 6.36 | ||||||||||
Select Shares® | ||||||||||||||||
Actual Return | 1.07% | $ | 1,000 | $ | 1,062.10 | 5.56 | ||||||||||
Hypothetical 5% Return | 1.07% | $ | 1,000 | $ | 1,019.81 | 5.45 | ||||||||||
Laudus Small-Cap MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.56% | $ | 1,000 | $ | 1,038.50 | 8.02 | ||||||||||
Hypothetical 5% Return | 1.56% | $ | 1,000 | $ | 1,017.34 | 7.93 | ||||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.37% | $ | 1,000 | $ | 1,039.80 | 7.04 | ||||||||||
Hypothetical 5% Return | 1.37% | $ | 1,000 | $ | 1,018.30 | 6.97 | ||||||||||
Laudus International MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.58% | $ | 1,000 | $ | 1,144.10 | 8.54 | ||||||||||
Hypothetical 5% Return | 1.58% | $ | 1,000 | $ | 1,017.24 | 8.03 | ||||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.46% | $ | 1,000 | $ | 1,144.90 | 7.89 | ||||||||||
Hypothetical 5% Return | 1.46% | $ | 1,000 | $ | 1,017.85 | 7.43 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in Financial Highlights. |
2 | Expenses for each fund or share class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 days of the period, and divided by 365 days of the fiscal year. |
12 Laudus MarketMasters Funds
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 12.90 | 11.26 | 10.30 | 9.94 | 7.48 | |||||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||||||
Net investment income / (loss) | 0.03 | 0.03 | 0.02 | (0.03 | ) | (0.01 | ) | |||||||||||||
Net realized and unrealized gains / (losses) | 2.14 | 1.63 | 0.94 | 0.39 | 2.47 | |||||||||||||||
Total income / (loss) from investment operations | 2.17 | 1.66 | 0.96 | 0.36 | 2.46 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.05 | ) | (0.02 | ) | — | — | — | |||||||||||||
Net asset value at end of period | 15.02 | 12.90 | 11.26 | 10.30 | 9.94 | |||||||||||||||
Total return (%) | 16.90 | 14.71 | 9.32 | 3.62 | 32.89 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 1.22 | 1 | 1.20 | 1 | 1.25 | 1.25 | 1.25 | |||||||||||||
Gross operating expenses | 1.27 | 1.37 | 1.38 | 1.39 | 1.42 | |||||||||||||||
Net investment income / (loss) | 0.25 | 0.18 | 0.14 | (0.25 | ) | (0.12 | ) | |||||||||||||
Portfolio turnover rate | 60 | 65 | 83 | 72 | 97 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 137 | 134 | 150 | 180 | 169 |
11/1/06- | 11/1/05- | 11/1/04- | 6/4/042- | |||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | ||||||||||||
Per—Share Data ($) | ||||||||||||||||
Net asset value at beginning of period | 12.93 | 11.30 | 10.32 | 10.42 | ||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||
Net investment income / (loss) | 0.06 | 0.04 | 0.02 | (0.00 | )3 | |||||||||||
Net realized and unrealized gains / (losses) | 2.15 | 1.63 | 0.96 | (0.10 | ) | |||||||||||
Total income / (loss) from investment operations | 2.21 | 1.67 | 0.98 | (0.10 | ) | |||||||||||
Less distributions: | ||||||||||||||||
Distributions from net investment income | (0.08 | ) | (0.04 | ) | — | — | ||||||||||
Net asset value at end of period | 15.06 | 12.93 | 11.30 | 10.32 | ||||||||||||
Total return (%) | 17.19 | 14.81 | 9.50 | (0.96 | )4 | |||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||
Ratios to average net assets: | ||||||||||||||||
Net operating expenses | 1.04 | 5 | 0.97 | 5 | 1.07 | 1.07 | 6 | |||||||||
Gross operating expenses | 1.22 | 1.33 | 1.33 | 1.37 | 6 | |||||||||||
Net investment income / (loss) | 0.44 | 0.43 | 0.25 | (0.08 | )6 | |||||||||||
Portfolio turnover rate | 60 | 65 | 83 | 72 | 4 | |||||||||||
Net assets, end of period ($ x 1,000,000) | 10 | 8 | 2 | 1 |
1 The ratio of net operating expenses would have been 1.25% and 1.25% for the periods ended 10/31/06 and 10/31/07, respectively, if custody credits had not been included.
2 Commencement of operations.
3 Per-share amount is less than $0.01.
4 Not annualized.
5 The ratio of net operating expenses would have been 1.07% and 1.07% for the periods ended 10/31/06 and 10/31/07, respectively, if custody credits had not been included.
6 Annualized.
See financial notes 13
Table of Contents
Laudus U.S. MarketMasters Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
90 | .7% | Common Stock | 104,986 | 133,231 | ||||||||
4 | .0% | Foreign Common Stock | 4,795 | 5,954 | ||||||||
5 | .0% | Short-Term Investment | 7,287 | 7,287 | ||||||||
99 | .7% | Total Investments | 117,068 | 146,472 | ||||||||
0 | .3% | Other Assets and Liabilities | 454 | |||||||||
100 | .0% | Net Assets | 146,926 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 90.7% of net assets | ||||||||
Banks 3.3% | ||||||||
Freddie Mac | 23,826 | 1,245 | ||||||
Hudson City Bancorp, Inc. | 38,205 | 598 | ||||||
Marshall & Ilsley Corp. | 7,940 | 339 | ||||||
New York Community Bancorp, Inc. | 31,430 | 585 | ||||||
People’s United Financial, Inc. | 43,157 | 767 | ||||||
Wachovia Corp. | 29,600 | 1,354 | ||||||
4,888 | ||||||||
Capital Goods 6.1% | ||||||||
Alliant Techsystems, Inc. * | 5,000 | 552 | ||||||
Cummins, Inc. | 5,775 | 693 | ||||||
Danaher Corp. | 8,600 | 737 | ||||||
Dover Corp. | 9,800 | 451 | ||||||
General Electric Co. | 32,600 | 1,342 | ||||||
Hexcel Corp. * | 16,000 | 400 | ||||||
Honeywell International, Inc. | 12,000 | 725 | ||||||
Joy Global, Inc. | 12,800 | 743 | ||||||
McDermott International, Inc. * | 19,330 | 1,180 | ||||||
Pentair, Inc. | 5,700 | 202 | ||||||
Precision Castparts Corp. | 4,900 | 734 | ||||||
SPX Corp. | 6,390 | 647 | ||||||
Teleflex, Inc. | 6,915 | 506 | ||||||
8,912 | ||||||||
Consumer Durables & Apparel 0.9% | ||||||||
Coach, Inc. * | 14,490 | 530 | ||||||
Jones Apparel Group, Inc. | 16,965 | 355 | ||||||
Lennar Corp., Class A | 6,100 | 139 | ||||||
Snap-on, Inc. | 2,900 | 145 | ||||||
Toll Brothers, Inc. * | 6,900 | 158 | ||||||
1,327 | ||||||||
Consumer Services 6.0% | ||||||||
Carnival Corp. | 31,000 | 1,487 | ||||||
Las Vegas Sands Corp. * | 7,275 | 968 | ||||||
McDonald’s Corp. | 30,000 | 1,791 | ||||||
Regis Corp. | 14,702 | 494 | ||||||
The Cheesecake Factory, Inc. * | 22,800 | 512 | ||||||
Wynn Resorts Ltd. | 9,150 | 1,477 | ||||||
YUM! Brands, Inc. | 50,800 | 2,046 | ||||||
8,775 | ||||||||
Diversified Financials 10.3% | ||||||||
American Capital Strategies Ltd. | 16,700 | 725 | ||||||
American Express Co. | 15,600 | 951 | ||||||
Bank of New York Mellon Corp. | 35,000 | 1,710 | ||||||
Citigroup, Inc. | 29,800 | 1,249 | ||||||
CME Group, Inc. | 3,647 | 2,430 | ||||||
Discover Financial Services | 9,750 | 188 | ||||||
E *TRADE Financial Corp. * | 66,900 | 745 | ||||||
Federated Investors, Inc., Class B | 15,200 | 654 | ||||||
JPMorgan Chase & Co. | 30,000 | 1,410 | ||||||
Knight Capital Group, Inc., | ||||||||
Class A * | 38,300 | 514 | ||||||
Moody’s Corp. | 15,700 | 686 | ||||||
Morgan Stanley | 26,700 | 1,796 | ||||||
Nuveen Investments, Inc., Class A | 14,600 | 946 | ||||||
The Blackstone Group LP * | 8,353 | 212 | ||||||
The Goldman Sachs Group, Inc. | 3,930 | 974 | ||||||
15,190 | ||||||||
Energy 5.3% | ||||||||
Apache Corp. | 16,700 | 1,734 | ||||||
Cameron International Corp. * | 5,200 | 506 | ||||||
ConocoPhillips | 14,100 | 1,198 | ||||||
CONSOL Energy, Inc. | 10,200 | 576 | ||||||
Gazprom ADR | 20,800 | 1,036 | ||||||
Murphy Oil Corp. | 8,600 | 633 | ||||||
National-Oilwell Varco, Inc. * | 12,040 | 882 | ||||||
Weatherford International Ltd. * | 19,670 | 1,277 | ||||||
7,842 | ||||||||
Food & Staples Retailing 1.8% | ||||||||
CVS Caremark Corp. | 24,800 | 1,036 | ||||||
Rite Aid Corp. * | 228,400 | 893 | ||||||
Whole Foods Market, Inc. | 14,000 | 694 | ||||||
2,623 | ||||||||
Food, Beverage & Tobacco 0.8% | ||||||||
Kraft Foods, Inc., Class A | 33,700 | 1,126 | ||||||
Health Care Equipment & Services 7.8% | ||||||||
Alcon, Inc. | 5,410 | 824 | ||||||
Baxter International, Inc. | 12,200 | 732 | ||||||
Beckman Coulter, Inc. | 5,000 | 354 |
14 See financial notes
Table of Contents
Laudus U.S. MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Boston Scientific Corp. * | 31,353 | 435 | ||||||
CIGNA Corp. | 17,199 | 903 | ||||||
Eclipsys Corp. * | 27,750 | 626 | ||||||
Edwards Lifesciences Corp. * | 12,900 | 648 | ||||||
HEALTHSOUTH Corp. * | 18,500 | 371 | ||||||
Hillenbrand Industries, Inc. | 8,100 | 447 | ||||||
Hologic, Inc. * | 10,961 | 745 | ||||||
Hospira, Inc. * | 8,380 | 346 | ||||||
Humana, Inc. * | 19,200 | 1,439 | ||||||
McKesson Corp. | 11,100 | 734 | ||||||
Varian Medical Systems, Inc. * | 21,700 | 1,058 | ||||||
WellPoint, Inc. * | 22,950 | 1,818 | ||||||
11,480 | ||||||||
Household & Personal Products 0.5% | ||||||||
Energizer Holdings, Inc. * | 3,065 | 320 | ||||||
The Procter & Gamble Co. | 5,300 | 368 | ||||||
688 | ||||||||
Insurance 2.4% | ||||||||
American International Group, Inc. | 19,300 | 1,218 | ||||||
Assurant, Inc. | 4,910 | 287 | ||||||
MetLife, Inc. | 10,500 | 723 | ||||||
The Allstate Corp. | 23,200 | 1,216 | ||||||
3,444 | ||||||||
Materials 3.4% | ||||||||
Air Products & Chemicals, Inc. | 14,200 | 1,390 | ||||||
Cytec Industries, Inc. | 8,730 | 582 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 9,789 | 1,152 | ||||||
International Flavors & Fragrances, Inc. | 11,200 | 585 | ||||||
Monsanto Co. | 13,400 | 1,308 | ||||||
5,017 | ||||||||
Media 5.7% | ||||||||
Cablevision Systems Corp., | ||||||||
Class A * | 30,000 | 880 | ||||||
Comcast Corp., Special Class A * | 103,975 | 2,170 | ||||||
Liberty Media Corp. - Capital, Series A * | 10,010 | 1,251 | ||||||
The DIRECTV Group, Inc. * | 58,500 | 1,549 | ||||||
Time Warner, Inc. | 70,000 | 1,278 | ||||||
Viacom, Inc., Class B * | 30,000 | 1,239 | ||||||
8,367 | ||||||||
Pharmaceuticals & Biotechnology 3.2% | ||||||||
Abbott Laboratories | 12,500 | 683 | ||||||
Genentech, Inc. * | 14,900 | 1,104 | ||||||
Gilead Sciences, Inc. * | 19,350 | 894 | ||||||
Roche Holding AG - Genusschein | 4,500 | 768 | ||||||
Thermo Fisher Scientific, Inc. * | 13,300 | 782 | ||||||
Varian, Inc. * | 6,920 | 511 | ||||||
4,742 | ||||||||
Real Estate 0.3% | ||||||||
CB Richard Ellis Group, Inc., Class A * | 18,965 | 462 | ||||||
Retailing 4.7% | ||||||||
Best Buy Co., Inc. | 42,000 | 2,038 | ||||||
Coldwater Creek, Inc. * | 76,700 | 686 | ||||||
J.C. Penney Co., Inc. | 8,200 | 461 | ||||||
Kohl’s Corp. * | 6,030 | 332 | ||||||
Macy’s, Inc. | 13,896 | 445 | ||||||
Office Depot, Inc. * | 42,139 | 791 | ||||||
The Gap, Inc. | 26,700 | 505 | ||||||
Tiffany & Co. | 30,000 | 1,625 | ||||||
6,883 | ||||||||
Semiconductors & Semiconductor Equipment 8.4% | ||||||||
Analog Devices, Inc. | 19,400 | 649 | ||||||
ASML Holding N.V. ADR * | 13,499 | 471 | ||||||
Broadcom Corp., Class A * | 20,150 | 656 | ||||||
Intel Corp. | 153,900 | 4,140 | ||||||
International Rectifier Corp. * | 10,700 | 357 | ||||||
KLA-Tencor Corp. | 8,400 | 442 | ||||||
LSI Corp. * | 75,300 | 497 | ||||||
Maxim Integrated Products, Inc. | 18,100 | 491 | ||||||
MEMC Electronic Materials, Inc. * | 16,280 | 1,192 | ||||||
Micron Technology, Inc. * | 120,500 | 1,267 | ||||||
National Semiconductor Corp. | 55,700 | 1,400 | ||||||
ON Semiconductor Corp. * | 50,100 | 511 | ||||||
Teradyne, Inc. * | 24,650 | 304 | ||||||
12,377 | ||||||||
Software & Services 4.8% | ||||||||
Adobe Systems, Inc. * | 20,700 | 991 | ||||||
Google, Inc., Class A * | 4,306 | 3,044 | ||||||
Microsoft Corp. | 59,950 | 2,207 | ||||||
Oracle Corp. * | 38,600 | 856 | ||||||
7,098 | ||||||||
Technology Hardware & Equipment 8.6% | ||||||||
ADC Telecommunications, Inc. * | 22,500 | 421 | ||||||
Apple, Inc. * | 5,200 | 988 | ||||||
Cisco Systems, Inc. * | 11,200 | 370 | ||||||
Corning, Inc. | 78,750 | 1,911 | ||||||
Dell, Inc. * | 84,600 | 2,589 | ||||||
Diebold, Inc. | 13,680 | 572 | ||||||
Hewlett-Packard Co. | 33,700 | 1,742 | ||||||
Motorola, Inc. | 81,800 | 1,537 | ||||||
NCR Corp. * | 15,550 | 429 | ||||||
Sun Microsystems, Inc. * | 124,000 | 708 | ||||||
Teradata Corp. * | 15,550 | 444 | ||||||
Vishay Intertechnology, Inc. * | 37,200 | 468 | ||||||
Zebra Technologies Corp., | ||||||||
Class A * | 9,735 | 380 | ||||||
12,559 |
See financial notes 15
Table of Contents
Laudus U.S. MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Telecommunication Services 2.7% | ||||||||
America Movil SAB de C.V., | ||||||||
Class L ADR | 14,040 | 918 | ||||||
Crown Castle International Corp. * | 25,750 | 1,058 | ||||||
Level 3 Communications, Inc. * | 193,900 | 587 | ||||||
Sprint Nextel Corp. | 80,000 | 1,368 | ||||||
3,931 | ||||||||
Transportation 2.6% | ||||||||
Hertz Global Holdings, Inc. * | 65,650 | 1,423 | ||||||
JetBlue Airways Corp. * | 71,700 | 655 | ||||||
Union Pacific Corp. | 14,000 | 1,792 | ||||||
3,870 | ||||||||
Utilities 1.1% | ||||||||
Entergy Corp. | 13,600 | 1,630 | ||||||
Total Common Stock (Cost $104,986) | 133,231 | |||||||
Foreign Common Stock 4.0% of net assets | ||||||||
Hong Kong 0.6% | ||||||||
Telecommunication Services 0.6% | ||||||||
China Mobile Ltd. | 44,400 | 906 | ||||||
Israel 1.1% | ||||||||
Pharmaceuticals & Biotechnology 1.1% | ||||||||
Teva Pharmaceutical Industries Ltd. - ADR | 38,100 | 1,677 | ||||||
Luxembourg 0.3% | ||||||||
Telecommunication Services 0.3% | ||||||||
Millicom International Cellular S.A. * | 3,500 | 411 | ||||||
Singapore 0.3% | ||||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
Verigy Ltd. * | 17,237 | 396 | ||||||
Switzerland 0.6% | ||||||||
Diversified Financials 0.6% | ||||||||
UBS AG - Reg’d | 17,300 | 929 | ||||||
Taiwan 0.7% | ||||||||
Telecommunication Services 0.7% | ||||||||
Chunghwa Telecom Co., Ltd. - ADR | 54,643 | 1,049 | ||||||
United Kingdom 0.4% | ||||||||
Insurance 0.4% | ||||||||
Willis Group Holdings Ltd. | 13,830 | 586 | ||||||
Total Foreign Common Stock (Cost $4,795) | 5,954 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investment 5.0% of net assets | ||||||||
Repurchase Agreement 5.0% | ||||||||
Fixed Income Clearing Corp. dated 10/31/07, due 11/01/07 at 4.55%, with a maturity value of $7,288 (fully collateralized by U.S. Government Agency Securities with a value of $7,445). | ||||||||
7,287 | 7,287 | |||||||
Total Short-Term Investment (Cost $7,287) | 7,287 | |||||||
End of Investments. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $117,761 and the unrealized appreciation and depreciation were $32,647 and ($3,936), respectively, with a net unrealized appreciation of $28,711. |
* | Non-income producing security. |
ADR — American Depositary Receipt
16 See financial notes
Table of Contents
Laudus U.S. MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $117,068) | $146,472 | |||||
Cash | 124 | |||||
Receivables: | ||||||
Investments sold | 1,244 | |||||
Fund shares sold | 124 | |||||
Dividends | 55 | |||||
Foreign Tax Reclaims | 7 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 1 | ||||
Total assets | 148,028 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 687 | |||||
Investment adviser and administrator fees | 24 | |||||
Transfer agent and shareholder services fees | 3 | |||||
Fund shares redeemed | 344 | |||||
Accrued expenses | + | 44 | ||||
Total liabilities | 1,102 | |||||
Net Assets | ||||||
Total assets | 148,028 | |||||
Total liabilities | − | 1,102 | ||||
Net assets | $146,926 | |||||
Net Assets by Source | ||||||
Capital received from investors | 122,496 | |||||
Net investment income not yet distributed | 60 | |||||
Net realized capital losses | (5,034 | ) | ||||
Net unrealized capital gains | 29,404 |
Net Asset Value (NAV) by Shares Class
Shares | ||||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | |||||||
Investor Shares | $137,143 | 9,129 | $15.02 | |||||||||
Select Shares | $9,783 | 650 | $15.06 | * |
* | Due to rounding, net assets divided by shares outstanding does not equal net asset value. |
See financial notes 17
Table of Contents
Laudus U.S. MarketMasters Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (net of $21 foreign withholding tax ) | $1,775 | |||||
Interest | + | 338 | ||||
Total Investment Income | 2,113 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 16,848 | |||||
Net realized losses on foreign currency transactions | + | (1 | ) | |||
Net realized gains | 16,847 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 5,209 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,325 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 337 | |||||
Select Shares | 17 | |||||
Professional fees | 42 | |||||
Portfolio accounting fees | 33 | |||||
Custodian fees | 19 | |||||
Registration fees | 18 | |||||
Shareholder reports | 11 | |||||
Trustees’ fees | 6 | |||||
Other expenses | + | 4 | ||||
Total expenses | 1,812 | |||||
Custody credits | − | 39 | ||||
Expense reduction by adviser and Schwab | − | 36 | ||||
Net expenses | 1,737 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 2,113 | |||||
Net expenses | − | 1,737 | ||||
Net investment income | 376 | |||||
Net realized gains | 16,847 | |||||
Net unrealized gains | + | 5,209 | ||||
Increase in net assets from operations | $22,432 |
18 See financial notes
Table of Contents
Laudus U.S. MarketMasters Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $376 | $280 | ||||||
Net realized gains | 16,847 | 11,211 | ||||||
Net unrealized gains | + | 5,209 | 8,699 | |||||
Increase in net assets from operations | 22,432 | 20,190 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 541 | 196 | ||||||
Select Shares | + | 47 | 10 | |||||
Total distributions from net investment income | $588 | $206 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 409 | $5,822 | 233 | $2,811 | ||||||||||||||
Select Shares | + | 204 | 2,926 | 525 | 6,214 | |||||||||||||
Total shares sold | 613 | $8,748 | 758 | $9,025 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 39 | $517 | 16 | $188 | ||||||||||||||
Select Shares | + | 3 | 41 | 1 | 9 | |||||||||||||
Total shares reinvested | 42 | $558 | 17 | $197 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (1,676 | ) | ($23,334 | ) | (3,245 | ) | ($38,952 | ) | ||||||||||
Select Shares | + | (166 | ) | (2,331 | ) | (135 | ) | (1,655 | ) | |||||||||
Total shares redeemed | (1,842 | ) | ($25,665 | ) | (3,380 | ) | ($40,607 | ) | ||||||||||
Net transactions in fund shares | (1,187 | ) | ($16,359 | ) | (2,605 | ) | ($31,385 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 10,966 | $141,441 | 13,571 | $152,842 | ||||||||||||||
Total increase or decrease | + | (1,187 | ) | 5,485 | (2,605 | ) | (11,401 | ) | ||||||||||
End of period | 9,779 | $146,926 | 10,966 | $141,441 | ||||||||||||||
Net investment income not yet distributed | $60 | $273 |
See financial notes 19
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 14.20 | 13.38 | 12.18 | 11.08 | 7.18 | |||||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||||||
Net investment income or (loss) | (0.08 | )1 | (0.13 | ) | (0.14 | ) | (0.14 | ) | (0.09 | ) | ||||||||||
Net realized and unrealized gains or (losses) | 1.811 | 2.08 | 1.34 | 1.24 | 3.99 | |||||||||||||||
Total income / (loss) from investment operations | 1.73 | 1.95 | 1.20 | 1.10 | 3.90 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | — | — | — | — | (0.00 | )2 | ||||||||||||||
Distributions from net realized gains | (2.19 | ) | (1.13 | ) | — | — | — | |||||||||||||
Total distributions | (2.19 | ) | (1.13 | ) | — | — | (0.00 | )2 | ||||||||||||
Net asset value at end of period | 13.74 | 14.20 | 13.38 | 12.18 | 11.08 | |||||||||||||||
Total return (%) | 13.79 | 15.33 | 9.85 | 9.93 | 54.32 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 1.51 | 3 | 1.48 | 3 | 1.55 | 1.55 | 1.55 | |||||||||||||
Gross operating expenses | 1.59 | 1.63 | 1.69 | 1.77 | 1.80 | |||||||||||||||
Net investment income / (loss) | (0.60 | ) | (0.82 | ) | (0.95 | ) | (1.08 | ) | (0.98 | ) | ||||||||||
Portfolio turnover rate | 83 | 105 | 94 | 140 | 94 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 99 | 95 | 108 | 129 | 115 |
11/1/06- | 11/1/05- | 11/1/04- | 6/9/044- | |||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | ||||||||||||
Per—Share Data ($) | ||||||||||||||||
Net asset value at beginning of period | 14.27 | 13.41 | 12.19 | 12.11 | ||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||
Net investment income or (loss) | (0.04 | )1 | (0.02 | ) | (0.11 | ) | (0.03 | ) | ||||||||
Net realized and unrealized gains or (losses) | 1.81 | 1 | 2.01 | 1.33 | 0.11 | |||||||||||
Total income / (loss) from investment operations | 1.77 | 1.99 | 1.22 | 0.08 | ||||||||||||
Less distributions: | ||||||||||||||||
Distributions from net realized gains | (2.19 | ) | (1.13 | ) | — | — | ||||||||||
Net asset value at end of period | 13.85 | 14.27 | 13.41 | 12.19 | ||||||||||||
Total return (%) | 14.04 | 15.61 | 10.01 | 0.66 | 5 | |||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||
Ratios to average net assets: | ||||||||||||||||
Net operating expenses | 1.36 | 6 | 1.16 | 6 | 1.37 | 1.37 | 7 | |||||||||
Gross operating expenses | 1.66 | 1.55 | 1.63 | 1.79 | 7 | |||||||||||
Net investment income / (loss) | (0.29 | ) | (0.43 | ) | (0.76 | ) | (0.91 | )7 | ||||||||
Portfolio turnover rate | 83 | 105 | 94 | 140 | 5 | |||||||||||
Net assets, end of period ($ x 1,000,000) | 437 | 7 | 1 | 0.32 |
1 Calculated based on average shares outstanding during the period.
2 Per-share amount is less than $0.01.
3 The ratio of net operating expenses would have been 1.55% and 1.55% for the periods ended 10/31/06 and 10/31/07, respectively, if custody credits had not been included.
4 Commencement of operations.
5 Not annualized.
6 The ratio of net operating expenses would have been 1.36% and 1.37% for the periods ended 10/31/06 and 10/31/07, respectively, if custody credits had not been included.
7 Annualized.
20 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
90 | .5% | Common Stock | 461,722 | 485,249 | ||||||||
3 | .5% | Foreign Common Stock | 16,597 | 19,166 | ||||||||
0 | .3% | Other Investment Companies | 1,430 | 1,441 | ||||||||
5 | .6% | Short-Term Investments | 30,144 | 30,144 | ||||||||
99 | .9% | Total Investments | 509,893 | 536,000 | ||||||||
0 | .1% | Other Assets and Liabilities | 343 | |||||||||
100 | .0% | Net Assets | 536,343 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 90.5% of net assets | ||||||||
Banks 1.8% | ||||||||
Boston Private Financial Holdings, Inc. | 113,365 | 3,260 | ||||||
Marshall & Ilsley Corp. | 6,600 | 282 | ||||||
New York Community Bancorp, Inc. | 112,758 | 2,099 | ||||||
People’s United Financial, Inc. | 224,926 | 3,999 | ||||||
9,640 | ||||||||
Capital Goods 9.2% | ||||||||
Alliant Techsystems, Inc. * | 25,400 | 2,804 | ||||||
American Railcar Industries, Inc. | 27,735 | 628 | ||||||
Astec Industries, Inc. * | 30,000 | 1,360 | ||||||
Axsys Technologies, Inc. * | 70,900 | 2,792 | ||||||
Baldor Electric Co. | 141,715 | 5,714 | ||||||
BE Aerospace, Inc. * | 42,105 | 2,093 | ||||||
CAE, Inc. | 374,370 | 5,050 | ||||||
Dover Corp. | 6,900 | 317 | ||||||
Ducommun, Inc. * | 77,700 | 3,087 | ||||||
Esterline Technologies Corp. * | 26,900 | 1,474 | ||||||
General Cable Corp. * | 24,380 | 1,755 | ||||||
HEICO Corp. | 79,900 | 4,350 | ||||||
Hexcel Corp. * | 81,500 | 2,040 | ||||||
Insteel Industries, Inc. | 106,850 | 1,239 | ||||||
Joy Global, Inc. | 65,600 | 3,809 | ||||||
Michael Baker Corp. * | 30,100 | 1,589 | ||||||
Pentair, Inc. | 29,000 | 1,026 | ||||||
SPX Corp. | 32,660 | 3,308 | ||||||
Teleflex, Inc. | 70,085 | 5,131 | ||||||
49,566 | ||||||||
Commercial Services & Supplies 3.0% | ||||||||
Acco Brands Corp. * | 134,720 | 2,888 | ||||||
Cornell Cos., Inc. * | 86,130 | 2,143 | ||||||
FTI Consulting, Inc. * | 63,280 | 3,436 | ||||||
Steelcase, Inc., Class A | 160,856 | 2,875 | ||||||
The Geo Group, Inc. * | 70,820 | 2,240 | ||||||
Watson Wyatt Worldwide, Inc., Class A | 53,940 | 2,571 | ||||||
16,153 | ||||||||
Consumer Durables & Apparel 1.3% | ||||||||
Carter’s, Inc. * | 84,785 | 1,872 | ||||||
Jones Apparel Group, Inc. | 86,485 | 1,811 | ||||||
Lennar Corp., Class A | 23,700 | 541 | ||||||
Snap-on, Inc. | 11,300 | 564 | ||||||
Toll Brothers, Inc. * | 23,700 | 543 | ||||||
Volcom, Inc. * | 56,600 | 1,656 | ||||||
6,987 | ||||||||
Consumer Services 6.0% | ||||||||
Bally Technologies, Inc. * | 53,600 | 2,162 | ||||||
Bob Evans Farms, Inc. | 68,930 | 1,942 | ||||||
Capella Education Co. * | 41,100 | 2,548 | ||||||
Corinthian Colleges, Inc. * | 200,515 | 3,286 | ||||||
Gaylord Entertainment Co. * | 37,300 | 2,032 | ||||||
P.F. Chang’s China Bistro, Inc. * | 57,990 | 1,688 | ||||||
Regis Corp. | 75,806 | 2,547 | ||||||
Service Corp. International | 177,500 | 2,568 | ||||||
Sotheby’s | 37,320 | 2,022 | ||||||
Steiner Leisure Ltd. * | 30,500 | 1,372 | ||||||
Strayer Education, Inc. | 12,150 | 2,266 | ||||||
The Cheesecake Factory, Inc. * | 116,000 | 2,602 | ||||||
Vail Resorts, Inc. * | 52,225 | 3,170 | ||||||
WMS Industries, Inc. * | 57,060 | 1,978 | ||||||
32,183 | ||||||||
Diversified Financials 5.3% | ||||||||
Calamos Asset Management, Inc., Class A | 100,385 | 3,415 | ||||||
E *TRADE Financial Corp. * | 223,700 | 2,492 | ||||||
Federated Investors, Inc., Class B | 78,100 | 3,358 | ||||||
GAMCO Investors, Inc., Class A | 50,866 | 3,149 | ||||||
GFI Group, Inc. * | 25,750 | 2,223 | ||||||
KBW, Inc. * | 67,110 | 2,033 | ||||||
Knight Capital Group, Inc., Class A * | 406,725 | 5,454 | ||||||
Lazard Ltd., Class A | 39,400 | 1,978 | ||||||
Moody’s Corp. | 33,000 | 1,443 | ||||||
Raymond James Financial, Inc. | 81,860 | 3,049 | ||||||
28,594 | ||||||||
Energy 6.1% | ||||||||
Alpha Natural Resources, Inc. * | 73,055 | 2,005 | ||||||
Arena Resources, Inc. * | 79,960 | 2,919 | ||||||
Cameron International Corp. * | 3,800 | 370 | ||||||
CARBO Ceramics, Inc. | 129,500 | 5,817 | ||||||
Carrizo Oil & Gas, Inc. * | 46,275 | 2,378 |
See financial notes 21
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
CONSOL Energy, Inc. | 9,500 | 537 | ||||||
Helmerich & Payne, Inc. | 63,910 | 2,021 | ||||||
Massey Energy Co. | 51,850 | 1,643 | ||||||
Murphy Oil Corp. | 4,050 | 298 | ||||||
Oceaneering International, Inc. * | 27,400 | 2,117 | ||||||
TETRA Technologies, Inc. * | 193,150 | 3,803 | ||||||
Weatherford International Ltd. * | 2,600 | 169 | ||||||
Whiting Petroleum Corp. * | 70,995 | 3,838 | ||||||
Willbros Group, Inc. * | 129,300 | 4,948 | ||||||
32,863 | ||||||||
Food & Staples Retailing 1.1% | ||||||||
Performance Food Group Co. * | 87,070 | 2,350 | ||||||
United Natural Foods, Inc. * | 25,305 | 733 | ||||||
Whole Foods Market, Inc. | 53,700 | 2,660 | ||||||
5,743 | ||||||||
Food, Beverage & Tobacco 1.1% | ||||||||
The Hain Celestial Group, Inc. * | 168,510 | 5,908 | ||||||
Health Care Equipment & Services 9.2% | ||||||||
Allscripts Healthcare Solutions, Inc. * | 67,930 | 1,882 | ||||||
Analogic Corp. | 95,125 | 5,436 | ||||||
ArthroCare Corp. * | 54,000 | 3,501 | ||||||
Beckman Coulter, Inc. | 25,700 | 1,820 | ||||||
Bio-Reference Laboratories, Inc. * | 58,410 | 1,874 | ||||||
Centene Corp. * | 110,800 | 2,585 | ||||||
Eclipsys Corp. * | 90,500 | 2,042 | ||||||
Edwards Lifesciences Corp. * | 62,900 | 3,159 | ||||||
HEALTHSOUTH Corp. * | 94,860 | 1,902 | ||||||
Hillenbrand Industries, Inc. | 41,400 | 2,286 | ||||||
HMS Holdings Corp. * | 64,300 | 1,831 | ||||||
Hospira, Inc. * | 42,580 | 1,760 | ||||||
Omnicell, Inc. * | 71,500 | 1,887 | ||||||
OraSure Technologies, Inc. * | 252,117 | 2,287 | ||||||
Thoratec Corp. * | 333,600 | 6,662 | ||||||
VCA Antech, Inc. * | 45,000 | 2,072 | ||||||
Wright Medical Group, Inc. * | 244,650 | 6,483 | ||||||
49,469 | ||||||||
Household & Personal Products 0.2% | ||||||||
Prestige Brands Holdings, Inc. * | 113,764 | 1,190 | ||||||
Insurance 0.9% | ||||||||
Assurant, Inc. | 24,710 | 1,444 | ||||||
National Financial Partners Corp. | 27,000 | 1,476 | ||||||
ProAssurance Corp. * | 32,220 | 1,777 | ||||||
4,697 | ||||||||
Materials 2.7% | ||||||||
AbitibiBowater, Inc. | 66,170 | 2,267 | ||||||
AMCOL International Corp. | 56,900 | 2,295 | ||||||
Cytec Industries, Inc. | 44,650 | 2,978 | ||||||
Glatfelter | 160,600 | 2,581 | ||||||
International Flavors & Fragrances, Inc. | 57,300 | 2,992 | ||||||
Symyx Technologies, Inc. * | 153,300 | 1,412 | ||||||
14,525 | ||||||||
Media 0.5% | ||||||||
Getty Images, Inc. * | 30,150 | 852 | ||||||
Gray Television, Inc. | 202,725 | 1,918 | ||||||
2,770 | ||||||||
Pharmaceuticals & Biotechnology 6.8% | ||||||||
ICON plc ADR * | 35,900 | 2,082 | ||||||
Martek Biosciences Corp. * | 188,566 | 5,761 | ||||||
Myriad Genetics, Inc. * | 34,000 | 1,882 | ||||||
Perrigo Co. | 137,655 | 3,264 | ||||||
Pharmion Corp. * | 111,900 | 5,384 | ||||||
PRA International * | 19,368 | 585 | ||||||
Salix Pharmaceuticals Ltd. * | 419,900 | 4,913 | ||||||
Techne Corp. * | 27,300 | 1,781 | ||||||
The Medicines Co. * | 202,700 | 3,882 | ||||||
Thermo Fisher Scientific, Inc. * | 9,800 | 576 | ||||||
United Therapeutics Corp. * | 57,740 | 3,952 | ||||||
Varian, Inc. * | 35,338 | 2,611 | ||||||
36,673 | ||||||||
Real Estate 1.2% | ||||||||
Lexington Realty Trust | 167,585 | 3,317 | ||||||
Washington Real Estate Investment Trust | 80,448 | 2,833 | ||||||
6,150 | ||||||||
Retailing 2.6% | ||||||||
1-800-FLOWERS.COM, Inc., Class A * | 154,700 | 1,855 | ||||||
Chico’s FAS, Inc. * | 72,380 | 951 | ||||||
Coldwater Creek, Inc. * | 569,700 | 5,099 | ||||||
GameStop Corp., Class A * | 47,190 | 2,794 | ||||||
Macy’s, Inc. | 9,744 | 312 | ||||||
Netflix, Inc. * | 52,185 | 1,381 | ||||||
The Gap, Inc. | 13,900 | 263 | ||||||
Tuesday Morning Corp. | 148,900 | 1,135 | ||||||
13,790 | ||||||||
Semiconductors & Semiconductor Equipment 6.9% | ||||||||
ASML Holding N.V. ADR * | 9,777 | 341 | ||||||
Atheros Communications * | 78,700 | 2,762 | ||||||
Brooks Automation, Inc. * | 328,700 | 4,266 | ||||||
EMCORE Corp. * | 262,000 | 2,827 | ||||||
Exar Corp. * | 210,050 | 2,554 | ||||||
FEI Co. * | 118,100 | 3,426 | ||||||
International Rectifier Corp. * | 54,400 | 1,816 | ||||||
KLA-Tencor Corp. | 6,000 | 316 | ||||||
Kopin Corp. * | 754,500 | 3,003 | ||||||
LSI Corp. * | 387,400 | 2,557 | ||||||
Maxim Integrated Products, Inc. | 32,900 | 892 | ||||||
Micron Technology, Inc. * | 62,700 | 659 | ||||||
Microsemi Corp. * | 88,500 | 2,355 | ||||||
Teradyne, Inc. * | 147,800 | 1,824 | ||||||
Ultratech, Inc. * | 284,650 | 3,299 |
22 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Varian Semiconductor Equipment Associates, Inc. * | 36,800 | 1,694 | ||||||
Veeco Instruments, Inc. * | 130,100 | 2,351 | ||||||
36,942 | ||||||||
Software & Services 14.0% | ||||||||
ANSYS, Inc. * | 36,300 | 1,409 | ||||||
Aspen Technology, Inc. * | 302,100 | 5,269 | ||||||
Blackboard, Inc. * | 33,100 | 1,652 | ||||||
Concur Technologies, Inc. * | 50,310 | 1,813 | ||||||
DealerTrack Holdings, Inc. * | 32,700 | 1,605 | ||||||
Double-Take Software, Inc. (a) * | 128,320 | 3,058 | ||||||
Epicor Software Corp. * | 373,150 | 4,358 | ||||||
Equinix, Inc. * | 31,100 | 3,628 | ||||||
FalconStor Software, Inc. * | 224,801 | 3,154 | ||||||
Gevity HR, Inc. | 139,800 | 1,395 | ||||||
Informatica Corp. * | 195,150 | 3,333 | ||||||
Interwoven, Inc. * | 257,250 | 3,650 | ||||||
Limelight Networks, Inc. * | 209,945 | 2,681 | ||||||
Lionbridge Technologies, Inc. * | 489,300 | 2,275 | ||||||
ManTech International Corp., Class A * | 63,540 | 2,526 | ||||||
Mercadolibre, Inc. * | 39,500 | 1,765 | ||||||
Nuance Communications, Inc. * | 119,770 | 2,648 | ||||||
Omniture, Inc. * | 87,500 | 2,989 | ||||||
Parametric Technology Corp. * | 86,600 | 1,654 | ||||||
RightNow Technologies, Inc. * | 232,090 | 4,647 | ||||||
Safeguard Scientifics, Inc. (a) * | 774,914 | 1,821 | ||||||
Secure Computing Corp. * | 107,600 | 1,065 | ||||||
Taleo Corp. * | 61,500 | 1,719 | ||||||
The Ultimate Software Group, Inc. * | 65,520 | 2,261 | ||||||
TIBCO Software, Inc. * | 516,835 | 4,745 | ||||||
Vignette Corp. * | 299,800 | 5,169 | ||||||
Vocus, Inc. * | 74,710 | 2,688 | ||||||
74,977 | ||||||||
Technology Hardware & Equipment 8.2% | ||||||||
ADC Telecommunications, Inc. * | 64,970 | 1,215 | ||||||
Avocent Corp. * | 86,200 | 2,330 | ||||||
Diebold, Inc. | 64,425 | 2,696 | ||||||
Electro Scientific Industries, Inc. * | 145,750 | 3,180 | ||||||
Emulex Corp. * | 78,770 | 1,706 | ||||||
FLIR Systems, Inc. * | 44,140 | 3,063 | ||||||
Foundry Networks, Inc. * | 137,500 | 2,907 | ||||||
GSI Group, Inc. * | 365,600 | 3,437 | ||||||
L-1 Identity Solutions, Inc. * | 122,746 | 2,279 | ||||||
Packeteer, Inc. * | 330,533 | 2,872 | ||||||
Polycom, Inc. * | 105,500 | 2,952 | ||||||
Powerwave Technologies, Inc. * | 468,250 | 2,604 | ||||||
Sun Microsystems, Inc. * | 222,800 | 1,272 | ||||||
Tekelec * | 332,500 | 4,389 | ||||||
Trimble Navigation Ltd. * | 66,960 | 2,792 | ||||||
Vishay Intertechnology, Inc. * | 185,250 | 2,332 | ||||||
Zebra Technologies Corp., Class A * | 49,785 | 1,946 | ||||||
43,972 | ||||||||
Telecommunication Services 0.7% | ||||||||
SBA Communications Corp., Class A * | 101,960 | 3,630 | ||||||
Transportation 1.7% | ||||||||
Arkansas Best Corp. | 19,050 | 523 | ||||||
ExpressJet Holdings, Inc. * | 239,200 | 794 | ||||||
Grupo Aeroportuario del Sureste S.A.B. de C.V. | 39,200 | 2,338 | ||||||
JetBlue Airways Corp. * | 164,040 | 1,498 | ||||||
Kirby Corp. * | 53,130 | 2,427 | ||||||
Knight Transportation, Inc. | 78,100 | 1,247 | ||||||
8,827 | ||||||||
Total Common Stock (Cost $461,722) | 485,249 | |||||||
Foreign Common Stock 3.5% of net assets | ||||||||
Bermuda 1.0% | ||||||||
Consumer Services 1.0% | ||||||||
Orient-Express Hotels Ltd., Class A | 80,250 | 5,200 | ||||||
Canada 0.7% | ||||||||
Food, Beverage & Tobacco 0.7% | ||||||||
SunOpta, Inc. * | 269,860 | 4,043 | ||||||
China 0.4% | ||||||||
Consumer Services 0.4% | ||||||||
Ctrip.com International Ltd. ADR | 37,060 | 2,089 | ||||||
Netherlands 0.5% | ||||||||
Energy 0.5% | ||||||||
Core Laboratories N.V. * | 19,100 | 2,787 | ||||||
Singapore 0.4% | ||||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||
Verigy Ltd. * | 89,002 | 2,046 | ||||||
United Kingdom 0.5% | ||||||||
Insurance 0.5% | ||||||||
Willis Group Holdings Ltd. | 70,903 | 3,001 | ||||||
Total Foreign Common Stock (Cost $16,597) | 19,166 | |||||||
See financial notes 23
Table of Contents
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Other Investment Companies 0.3% of net assets | ||||||||
iShares Russell 2000 Index Fund | 17,500 | 1,441 | ||||||
Total Other Investment Companies (Cost $1,430) | 1,441 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 5.6% of net assets | ||||||||
Repurchase Agreement 4.3% | ||||||||
Fixed Income Clearing Corp. | ||||||||
dated 10/31/07, due 11/01/07 at 4.55%, with a maturity value of $22,914 (fully collateralized by U.S. Government Agency Securities with a value of $23,384.) | 22,911 | 22,911 | ||||||
U.S. Treasury Obligations 1.3% of net assets | ||||||||
U.S. Treasury Bills | ||||||||
3.82%, 12/20/07 (b) | 5,350 | 5,323 | ||||||
3.80%, 12/20/07 (b) | 1,175 | 1,169 | ||||||
3.61%, 12/20/07 (b) | 595 | 592 | ||||||
3.92%, 12/20/07 (b) | 150 | 149 | ||||||
7,233 | ||||||||
Total Short-Term Investments (Cost $30,144) | 30,144 | |||||||
End of Investments. | ||||||||
At 10/31/07, the tax basis cost of the fund’s investments was $511,620, and the unrealized appreciation and depreciation were $39,580 and ($15,200), respectively, with a net appreciation of $24,380. |
* | Non-income producing security. | |
(a) | Illiquid and /or restricted security. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. |
ADR — American Depositary Receipt
In addition to the above, the fund held the following at
10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, Long, expires 12/20/07 | 5 | 2,081 | 56 |
24 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $509,893) | $536,000 | |||||
Cash | 1 | |||||
Receivables: | ||||||
Investments sold | 4,630 | |||||
Fund shares sold | 1,675 | |||||
Dividends | 78 | |||||
Due from investment adviser | 74 | |||||
Due from broker for futures | 34 | |||||
Interest | 3 | |||||
Prepaid expenses | + | 1 | ||||
Total assets | 542,496 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 5,748 | |||||
Transfer agent and shareholder services fees | 7 | |||||
Fund shares redeemed | 333 | |||||
Accrued expenses | + | 65 | ||||
Total liabilities | 6,153 | |||||
Net Assets | ||||||
Total assets | 542,496 | |||||
Total liabilities | − | 6,153 | ||||
Net assets | $536,343 | |||||
Net Assets by Source | ||||||
Capital received from investors | 498,686 | |||||
Net investment income not yet distributed | 27 | |||||
Net realized capital gains | 11,467 | |||||
Net unrealized capital gains | 26,163 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $99,200 | 7,219 | $13.74 | ||||||||
Select Shares | $437,143 | 31,562 | $13.85 |
See financial notes 25
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends | $743 | |||||
Interest | + | 823 | ||||
Total Investment Income | 1,566 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 9,854 | |||||
Net realized gains on futures | + | 3,065 | ||||
Net realized gains | 12,919 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 10,413 | |||||
Net unrealized gains on futures | + | 56 | ||||
Net unrealized gains | 10,469 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,876 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 238 | |||||
Select Shares | 130 | |||||
Registration fees | 175 | |||||
Portfolio accounting fees | 64 | |||||
Professional fees | 42 | |||||
Shareholder reports | 31 | |||||
Custodian fees | 29 | |||||
Trustees’ fees | 6 | |||||
Overdraft expense | 1 | |||||
Other expenses | + | 2 | ||||
Total expenses | 2,594 | |||||
Custody credits | − | 42 | ||||
Expense reduction by adviser and Schwab | − | 225 | ||||
Net expenses | 2,327 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 1,566 | |||||
Net expenses | − | 2,327 | ||||
Net investment losses | (761 | ) | ||||
Net realized gains | 12,919 | |||||
Net unrealized gains | + | 10,469 | ||||
Increase in net assets from operations | $22,627 |
26 See financial notes
Table of Contents
Laudus Small-Cap MarketMasters Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||
Net investment losses | ($761 | ) | ($869 | ) | ||||||
Net realized gains | 12,919 | 16,152 | ||||||||
Net unrealized gains | + | 10,469 | 165 | |||||||
Increase in net assets from operations | 22,627 | 15,448 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net realized gains | ||||||||||
Investor Shares | 14,314 | 8,829 | ||||||||
Select Shares | + | 1,039 | 89 | |||||||
Total distributions from net realized gains | $15,353 | $8,918 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 743 | $9,969 | 190 | $2,628 | ||||||||||||||
Select Shares | + | 31,680 | 429,281 | 472 | 6,249 | |||||||||||||
Total shares sold | 32,423 | $439,250 | 662 | $8,877 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 1,070 | $13,314 | 623 | $8,135 | ||||||||||||||
Select Shares | + | 68 | 853 | 5 | 66 | |||||||||||||
Total shares reinvested | 1,138 | $14,167 | 628 | $8,201 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (1,296 | ) | ($17,359 | ) | (2,205 | ) | ($29,890 | ) | ||||||||||
Select Shares | + | (649 | ) | (8,781 | ) | (75 | ) | (1,031 | ) | |||||||||
Total shares redeemed | (1,945 | ) | ($26,140 | ) | (2,280 | ) | ($30,921 | ) | ||||||||||
Net transactions in fund shares | 31,616 | $427,277 | (990 | ) | ($13,843 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 7,165 | $101,792 | 8,155 | $109,105 | ||||||||||||||
Total increase or decrease | + | 31,616 | 434,551 | (990 | ) | (7,313 | ) | |||||||||||
End of period | 38,781 | $536,343 | 7,165 | $101,792 | ||||||||||||||
Net investment income not yet distributed | $27 | $7 |
See financial notes 27
Table of Contents
Financial Highlights
11/1/06- | 11/1/05- | 11/1/04- | 11/1/03- | 11/1/02- | ||||||||||||||||
Investor Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | 10/31/03 | |||||||||||||||
Per—Share Data ($) | ||||||||||||||||||||
Net asset value at beginning of period | 20.73 | 16.78 | 13.58 | 11.95 | 8.74 | |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.14 | 0.13 | 0.06 | 0.02 | 0.03 | |||||||||||||||
Net realized and unrealized gains | 6.84 | 3.98 | 3.16 | 1.65 | 3.18 | |||||||||||||||
Total income from investment operations | 6.98 | 4.11 | 3.22 | 1.67 | 3.21 | |||||||||||||||
Less distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.16 | ) | (0.16 | ) | (0.02 | ) | (0.04 | ) | (0.00 | )1 | ||||||||||
Distributions from net realized gains | (1.59 | ) | — | — | — | — | ||||||||||||||
Total distributions | (1.75 | ) | (0.16 | ) | (0.02 | ) | (0.04 | ) | (0.00 | )1 | ||||||||||
Net asset value at end of period | 25.96 | 20.73 | 16.78 | 13.58 | 11.95 | |||||||||||||||
Total return (%) | 36.01 | 24.66 | 23.75 | 13.98 | 36.74 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Net operating expenses | 1.56 | 2 | 1.57 | 2 | 1.65 | 1.65 | 1.65 | |||||||||||||
Gross operating expenses | 1.59 | 1.64 | 1.74 | 1.89 | 1.92 | |||||||||||||||
Net investment income | 0.62 | 0.52 | 0.37 | 0.15 | 0.33 | |||||||||||||||
Portfolio turnover rate | 71 | 90 | 53 | 69 | 99 | |||||||||||||||
Net assets, end of period ($ x 1,000,000) | 2,297 | 1,320 | 794 | 552 | 302 |
11/1/06- | 11/1/05- | 11/1/04- | 4/2/043- | |||||||||||||
Select Shares | 10/31/07 | 10/31/06 | 10/31/05 | 10/31/04 | ||||||||||||
Per—Share Data ($) | ||||||||||||||||
Net asset value at beginning of period | 20.77 | 16.81 | 13.61 | 13.64 | ||||||||||||
Income / (loss) from investment operations: | ||||||||||||||||
Net investment income / (loss) | 0.15 | 0.19 | 0.08 | 0.02 | ||||||||||||
Net realized and unrealized gains / (losses) | 6.86 | 3.96 | 3.17 | (0.05 | ) | |||||||||||
Total income / (loss) from investment operations | 7.01 | 4.15 | 3.25 | (0.03 | ) | |||||||||||
Less distributions: | ||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.19 | ) | (0.05 | ) | — | |||||||||
Distributions from net realized gains | (1.59 | ) | — | — | — | |||||||||||
Total distributions | (1.78 | ) | (0.19 | ) | (0.05 | ) | — | |||||||||
Net asset value at end of period | 26.00 | 20.77 | 16.81 | 13.61 | ||||||||||||
Total return (%) | 36.16 | 24.88 | 23.90 | (0.22 | )4 | |||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||
Ratios to average net assets: | ||||||||||||||||
Net operating expenses | 1.44 | 5 | 1.39 | 5 | 1.47 | 1.47 | 6 | |||||||||
Gross operating expenses | 1.55 | 1.60 | 1.68 | 1.86 | 6 | |||||||||||
Net investment income | 0.73 | 0.72 | 0.59 | 0.37 | 6 | |||||||||||
Portfolio turnover rate | 71 | 90 | 53 | 69 | 4 | |||||||||||
Net assets, end of period ($ x 1,000,000) | 1,255 | 628 | 274 | 81 |
1 Per-share amount is less than $0.01.
2 The ratio of net operating expenses would have been 1.64% and 1.59% for the periods ended 10/31/06 and 10/31/07, respectively, if custody credits had not been included.
3 Commencement of operations.
4 Not annualized.
5 The ratio of net operating expenses would have been 1.47% and 1.47% for the periods ended 10/31/06 and 10/31/07, respectively, if custody credits had not been included.
6 Annualized.
28 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
—% | Common Stock | 123 | 122 | |||||||||
95 | .2% | Foreign Common Stock | 2,559,782 | 3,379,924 | ||||||||
0 | .5% | Preferred Stock | 6,919 | 15,702 | ||||||||
0 | .1% | Other Investment Companies | 4,140 | 4,488 | ||||||||
—% | Warrants | — | — | |||||||||
3 | .5% | Short-Term Investments | 124,827 | 124,827 | ||||||||
99 | .3% | Total Investments | 2,695,791 | 3,525,063 | ||||||||
0 | .7% | Other Assets and Liabilities | 26,522 | |||||||||
100 | .0% | Net Assets | 3,551,585 |
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Common Stock 0.0% of net assets | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Central European Distribution Corp. * | 2,300 | 122 | ||||||
Total Common Stock (Cost $123) | 122 | |||||||
Foreign Common Stock 95.2% of net assets | ||||||||
Australia 5.5% | ||||||||
Capital Goods 0.7% | ||||||||
Boart Longyear Group * | 5,659,769 | 13,611 | ||||||
Bradken Ltd. | 511,777 | 7,069 | ||||||
NRW Holdings Ltd. * | 67,696 | 204 | ||||||
United Group Ltd. | 215,600 | 4,315 | ||||||
25,199 | ||||||||
Commercial Services & Supplies 0.3% | ||||||||
Seek Ltd. | 406,500 | 3,558 | ||||||
Transfield Services Ltd. | 481,489 | 7,108 | ||||||
10,666 | ||||||||
Diversified Financials 0.7% | ||||||||
Allco Finance Group Ltd. | 230,637 | 1,667 | ||||||
Babcock & Brown Ltd. | 304,501 | 8,817 | ||||||
HFA Holdings Ltd. | 1,112,484 | 2,681 | ||||||
Macquarie Bank Ltd. * | 135,000 | 10,782 | ||||||
23,947 | ||||||||
Energy 0.4% | ||||||||
Arrow Energy NL * | 841,094 | 2,260 | ||||||
WorleyParsons Ltd. | 294,421 | 13,309 | ||||||
15,569 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Woolworths Ltd. | 514,500 | 16,125 | ||||||
Insurance 0.2% | ||||||||
QBE Insurance Group Ltd. | 255,500 | 7,819 | ||||||
Materials 1.8% | ||||||||
BHP Billiton Ltd. | 259,600 | 11,304 | ||||||
BHP Billiton Ltd. ADR | 418,725 | 36,538 | ||||||
Incitec Pivot Ltd. | 35,700 | 2,965 | ||||||
Mount Gibson Iron Ltd. * | 2,143,086 | 6,059 | ||||||
Oxiana Ltd. | 1,454,300 | 5,796 | ||||||
62,662 | ||||||||
Pharmaceuticals & Biotechnology 0.4% | ||||||||
CSL Ltd. | 23,900, | 812 | ||||||
CSL Ltd. (b) | 429,100 | 14,588 | ||||||
15,400 | ||||||||
Real Estate 0.2% | ||||||||
Commonwealth Property Office Fund | 5,737,953 | 8,492 | ||||||
Retailing 0.2% | ||||||||
David Jones Ltd. | 1,094,084 | 5,066 | ||||||
Utilities 0.1% | ||||||||
Babcock & Brown Power | 1,019,000 | 3,122 | ||||||
194,067 | ||||||||
Austria 0.6% | ||||||||
Banks 0.5% | ||||||||
Erste Bank der oesterreichischen Sparkassen AG | 45,744 | 3,724 | ||||||
Raiffeisen International Bank-Holding AG | 74,775 | 12,440 | ||||||
16,164 | ||||||||
Capital Goods 0.1% | ||||||||
Andritz AG | 70,904 | 5,244 | ||||||
Energy 0.0% | ||||||||
Schoeller-Bleckmann Oilfield Equipment AG | 2,037 | 208 | ||||||
21,616 | ||||||||
Belgium 0.6% | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
InBev N.V. | 122,800 | 11,623 | ||||||
Materials 0.2% | ||||||||
Umicore | 30,135 | 7,535 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
EVS Broadcast Equipment S.A. | 26,839 | 2,966 | ||||||
22,124 | ||||||||
Bermuda 4.7% | ||||||||
Capital Goods 1.0% | ||||||||
Cooper Industries Ltd., Class A | 205,000 | 10,740 |
See financial notes 29
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Fong’s Industries Co., Ltd. (d) | 12,266,000 | 7,913 | ||||||
Ingersoll-Rand Co., Ltd., Class A | 177,125 | 8,918 | ||||||
Noble Group Ltd. | 4,755,000 | 7,834 | ||||||
35,405 | ||||||||
Commercial Services & Supplies 0.1% | ||||||||
Dore Holdings Ltd. | 9,548,000 | 3,400 | ||||||
Consumer Durables & Apparel 0.6% | ||||||||
Arts Optical International Holdings Ltd. (d) | 8,688,000 | 3,528 | ||||||
C C Land Holdings Ltd. | 4,435,000 | 8,793 | ||||||
Fibrechem Technologies Ltd. | 2,842,000 | 3,256 | ||||||
Peace Mark Holdings Ltd. | 3,162,000 | 5,210 | ||||||
20,787 | ||||||||
Diversified Financials 0.2% | ||||||||
REXCAPITAL Financial Holdings Ltd. * | 32,050,000 | 6,668 | ||||||
Energy 1.4% | ||||||||
Nabors Industries Ltd. * | 662,975 | 18,616 | ||||||
Seadrill Ltd. * | 222,400 | 5,325 | ||||||
Weatherford International Ltd. * | 412,300 | 26,762 | ||||||
50,703 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Synear Food Holdings Ltd. | 2,447,000 | 4,022 | ||||||
Insurance 0.1% | ||||||||
PartnerRe Ltd. | 51,525 | 4,290 | ||||||
Materials 0.2% | ||||||||
Aquarius Platinum Ltd. | 152,300 | 5,860 | ||||||
Media 0.1% | ||||||||
Central European Media Enterprises Ltd., Class A * | 16,500 | 1,893 | ||||||
Retailing 0.7% | ||||||||
Dufry South America Ltd. BDR * | 104,343 | 3,117 | ||||||
Esprit Holdings Ltd. | 609,200 | 10,175 | ||||||
Giordano International Ltd. | 8,992,000 | 4,204 | ||||||
Huabao International Holdings Ltd. | 2,875,000 | 2,741 | ||||||
Li & Fung Ltd. | 1,114,400 | 5,288 | ||||||
25,525 | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Vtech Holdings Ltd. | 132,000 | 1,127 | ||||||
Transportation 0.2% | ||||||||
Cosco Pacific Ltd. | 928,000 | 2,892 | ||||||
Golden Ocean Group Ltd. | 728,327 | 5,505 | ||||||
8,397 | ||||||||
168,077 | ||||||||
Brazil 2.1% | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Cyrela Brazil Realty S.A. | 139,100 | 2,420 | ||||||
Rossi Residencial S.A. | 47,600 | 1,606 | ||||||
4,026 | ||||||||
Consumer Services 0.1% | ||||||||
Anhanguera Educacional Participacoes S.A. * | 121,500 | 2,527 | ||||||
Diversified Financials 0.1% | ||||||||
Bovespa Holding S.A. * | 207,700 | 3,900 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Drogasil S.A. | 261,000 | 2,410 | ||||||
Materials 1.4% | ||||||||
Aracruz Celulose S.A. ADR | 38,200 | 2,937 | ||||||
Companhia Vale do Rio Doce ADR | 1,170,050 | 44,088 | ||||||
Fertilizantes Heringer S.A. * | 142,900 | 1,998 | ||||||
49,023 | ||||||||
Real Estate 0.1% | ||||||||
BR Malls Participacoes S.A. * | 230,400 | 3,393 | ||||||
Cyrela Commercial Properties S.A. Empreendimentos e Participacoes * | 25,320 | 203 | ||||||
Iguatemi Empresa de Shopping Centers S.A. | 84,500 | 1,440 | ||||||
5,036 | ||||||||
Retailing 0.2% | ||||||||
B2W Compania Global Do Varejo (B2W Varejo) | 63,700 | 3,456 | ||||||
Lojas Renner S.A. | 107,800 | 2,678 | ||||||
6,134 | ||||||||
Software & Services 0.0% | ||||||||
Totvs S.A. | 34,300 | 1,264 | ||||||
Transportation 0.0% | ||||||||
Localiza Rent a Car S.A. | 150,800 | 1,743 | ||||||
76,063 | ||||||||
Canada 6.3% | ||||||||
Banks 0.2% | ||||||||
Canadian Western Bank | 245,964 | 8,012 | ||||||
Capital Goods 0.1% | ||||||||
CAE, Inc. | 173,800 | 2,344 | ||||||
Consumer Durables & Apparel 0.4% | ||||||||
Gildan Activewear, Inc. * | 321,100 | 14,701 | ||||||
Energy 1.5% | ||||||||
Bayou Bend Petroleum Ltd. (b) * | 1,164,933 | 1,418 | ||||||
Canadian Natural Resources Ltd. | 87,550 | 7,284 | ||||||
CHC Helicopter Corp., Class A | 218,400 | 5,595 | ||||||
Ensign Energy Services, Inc. | 35,500 | 638 | ||||||
Petrobank Energy & Resources Ltd. * | 197,231 | 9,809 | ||||||
Precision Drilling Trust | 53,550 | 977 | ||||||
Suncor Energy, Inc. | 222,925 | 24,350 | ||||||
Talisman Energy, Inc. | 135,225 | 2,940 | ||||||
Trican Well Service Ltd. | 2,200 | 47 | ||||||
53,058 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Shoppers Drug Mart Corp. | 138,000 | 8,090 | ||||||
Insurance 0.1% | ||||||||
Manulife Financial Corp. | 110,575 | 5,130 | ||||||
Materials 2.1% | ||||||||
Agrium, Inc. | 90,600 | 5,759 | ||||||
Equinox Minerals Ltd. * | 432,100 | 2,365 | ||||||
FNX Mining Co., Inc. * | 89,700 | 3,622 | ||||||
Ivanhoe Mines Ltd. * | 31,400 | 432 | ||||||
Major Drilling Group International * | 133,464 | 8,802 | ||||||
Potash Corp. of Saskatchewan, Inc. | 274,025 | 33,656 |
30 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Sino-Forest Corp. * | 247,900 | 6,592 | ||||||
Teck Cominco Ltd., Class B | 264,300 | 13,215 | ||||||
74,443 | ||||||||
Real Estate 0.6% | ||||||||
Brookfield Asset Management, Inc., Class A | 115,487 | 4,711 | ||||||
Brookfield Asset Management, Inc., Class A | 151,400 | 6,185 | ||||||
Morguard Real Estate Investment Trust | 234,900 | 3,347 | ||||||
Northern Property Real Estate Investment Trust | 255,400 | 5,723 | ||||||
19,966 | ||||||||
Retailing 0.1% | ||||||||
The Forzani Group Ltd., Class A * | 98,471 | 1,876 | ||||||
Telecommunication Services 0.3% | ||||||||
Rogers Communications, Inc., Class B | 246,400 | 12,557 | ||||||
Transportation 0.7% | ||||||||
Canadian National Railway Co. | 181,100 | 10,140 | ||||||
Canadian Pacific Railway Ltd. | 163,825 | 11,530 | ||||||
Transat A.T., Inc., Class A | 65,578 | 2,760 | ||||||
24,430 | ||||||||
224,607 | ||||||||
Cayman Islands 4.5% | ||||||||
Automobiles & Components 0.2% | ||||||||
Xinyi Glass Holdings Co., Ltd. | 5,064,000 | 6,913 | ||||||
Capital Goods 0.1% | ||||||||
China Infrastructure Machinery Holdings Ltd. | 46,200 | 103 | ||||||
Haitian International Holdings Ltd. | 2,268,000 | 1,828 | ||||||
1,931 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Li Ning Co., Ltd. | 2,812,157 | 10,568 | ||||||
Consumer Services 0.1% | ||||||||
Ajisen China Holdings Ltd. * | 350,000 | 501 | ||||||
Ctrip.com International Ltd. ADR | 46,400 | 2,615 | ||||||
FU JI Food & Catering Services | 494,000 | 1,251 | ||||||
Home Inns & Hotels Management, Inc. ADR * | 27,000 | 1,189 | ||||||
5,556 | ||||||||
Diversified Financials 0.0% | ||||||||
Polytec Asset Holdings Ltd. | 3,055,000 | 953 | ||||||
Energy 2.2% | ||||||||
GlobalSantaFe Corp. | 292,625 | 23,711 | ||||||
Noble Corp. | 527,400 | 27,926 | ||||||
Transocean, Inc. * | 223,050 | 26,626 | ||||||
78,263 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
China Fishery Group Ltd. | 577,000 | 792 | ||||||
China Mengniu Dairy Co., Ltd. | 865,000 | 3,675 | ||||||
4,467 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Mindray Medical International Ltd. | 62,500 | 2,485 | ||||||
Materials 0.3% | ||||||||
AMVIG Holdings Ltd. | 4,602,000 | 6,427 | ||||||
Lee & Man Paper Manufacturing Ltd. | 688,000 | 2,752 | ||||||
9,179 | ||||||||
Media 0.3% | ||||||||
Focus Media Holding Ltd. ADR * | 148,346 | 9,198 | ||||||
Pico Far East Holdings Ltd. | 5,808,000 | 1,833 | ||||||
11,031 | ||||||||
Real Estate 0.4% | ||||||||
Agile Property Holdings Ltd. | 3,194,226 | 7,753 | ||||||
China Properties Group Ltd. | 3,029,000 | 2,315 | ||||||
E-House China Holdings Ltd. * | 53,760 | 1,908 | ||||||
Greentown China Holdings Ltd. | 1,265,205 | 2,706 | ||||||
14,682 | ||||||||
Retailing 0.2% | ||||||||
Belle International Holdings Ltd. | 2,414,000 | 3,916 | ||||||
Parkson Retail Group Ltd. | 339,000 | 3,869 | ||||||
7,785 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASM Pacific Technology Ltd. | 814,500 | 6,386 | ||||||
Software & Services 0.0% | ||||||||
Alibaba.com Ltd. * | 12,500 | 22 | ||||||
160,221 | ||||||||
Chile 0.1% | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Cencosud S.A. ADR (b) | 61,100 | 3,946 | ||||||
China 0.3% | ||||||||
Capital Goods 0.1% | ||||||||
Dongfang Electrical Machinery Co., Ltd. | 476,000 | 4,255 | ||||||
Energy 0.2% | ||||||||
China Oilfield Services Ltd. Class H | 1,940,800 | 4,753 | ||||||
9,008 | ||||||||
Denmark 0.5% | ||||||||
Capital Goods 0.3% | ||||||||
FLSmidth & Co. A/S | 90,500 | 9,864 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
East Asiatic Co. Ltd. A/S | 41,801 | 3,385 | ||||||
Pharmaceuticals & Biotechnology 0.1% | ||||||||
Alk-Abello A/S | 17,500 | 3,785 | ||||||
17,034 | ||||||||
Egypt 0.4% | ||||||||
Capital Goods 0.1% | ||||||||
Orascom Construction Industries | 53,200 | 4,881 | ||||||
Consumer Services 0.1% | ||||||||
Orascom Hotels & Development * | 221,988 | 2,891 |
See financial notes 31
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Diversified Financials 0.2% | ||||||||
Egyptian Financial Group-Hermes Holding | 510,800 | 5,149 | ||||||
12,921 | ||||||||
Finland 0.9% | ||||||||
Automobiles & Components 0.4% | ||||||||
Nokian Renkaat Oyj | 327,050 | 12,384 | ||||||
Capital Goods 0.1% | ||||||||
Outotec Oyj | 42,424 | 3,256 | ||||||
Ramirent Oyj | 77,200 | 1,725 | ||||||
4,981 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Nokia Oyj | 211,000 | 8,380 | ||||||
Transportation 0.2% | ||||||||
Finnlines Oyj | 222,570 | 5,031 | ||||||
30,776 | ||||||||
France 5.8% | ||||||||
Banks 0.6% | ||||||||
BNP Paribas | 184,000 | 20,393 | ||||||
Capital Goods 1.1% | ||||||||
Carbone Lorraine S.A. | 131,389 | 11,803 | ||||||
Nexans S.A. | 110,108 | 18,803 | ||||||
Societe Industrielle D’Aviations Latecoere S.A. (d) | 161,390 | 5,010 | ||||||
Vallourec S.A. | 10,500 | 3,057 | ||||||
38,673 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 66,400 | 8,578 | ||||||
Diversified Financials 0.3% | ||||||||
Eurazeo | 33,918 | 5,073 | ||||||
Financiere Marc de Lacharriere S.A. | 60,059 | 4,776 | ||||||
9,849 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Groupe Danone ADR | 153,100 | 2,633 | ||||||
Remy Cointreau S.A. | 26,446 | 2,041 | ||||||
4,674 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Essilor International S.A. | 31,000 | 1,981 | ||||||
Orpea * | 35,000 | 2,222 | ||||||
4,203 | ||||||||
Household & Personal Products 0.2% | ||||||||
L’Oreal S.A. | 52,000 | 6,846 | ||||||
Insurance 0.5% | ||||||||
April Group | 20,200 | 1,298 | ||||||
Axa | 190,000 | 8,534 | ||||||
Axa ADR | 88,625 | 3,964 | ||||||
Euler Hermes S.A. | 44,827 | 6,027 | ||||||
19,823 | ||||||||
Media 1.5% | ||||||||
Ipsos | 155,841 | 5,720 | ||||||
Publicis Groupe | 442,000 | 18,012 | ||||||
Seloger.com * | 80,251 | 5,369 | ||||||
Societe Television Francaise 1 | 639,000 | 17,777 | ||||||
Vivendi | 172,500 | 7,795 | ||||||
54,673 | ||||||||
Pharmaceuticals & Biotechnology 0.1% | ||||||||
Boiron S.A. | 91,556 | 2,400 | ||||||
Eurofins Scientific | 5,564 | 596 | ||||||
2,996 | ||||||||
Real Estate 0.1% | ||||||||
Klepierre | 38,800 | 2,111 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Neopost S.A. | 82,440 | 9,588 | ||||||
Telecommunication Services 0.1% | ||||||||
Iliad S.A. | 25,450 | 2,675 | ||||||
Transportation 0.1% | ||||||||
Norbert Dentressangle | 20,289 | 2,445 | ||||||
Utilities 0.5% | ||||||||
EDF Energies Nouvelles S.A. | 50,900 | 4,090 | ||||||
Sechilienne S.A. | 65,803 | 5,920 | ||||||
Veolia Environnement | 96,075 | 8,601 | ||||||
18,611 | ||||||||
206,138 | ||||||||
Georgia 0.0% | ||||||||
Diversified Financials 0.0% | ||||||||
Bank of Georgia - Reg’d GDR * | 29,700 | 980 | ||||||
Germany 5.5% | ||||||||
Automobiles & Components 1.3% | ||||||||
Bayerische Motoren Werke AG | 331,500 | 22,184 | ||||||
DaimlerChrysler AG - Reg’d | 96,000 | 10,503 | ||||||
ElringKlinger AG | 68,100 | 7,457 | ||||||
Leoni AG | 74,318 | 4,714 | ||||||
44,858 | ||||||||
Capital Goods 1.3% | ||||||||
Bauer AG | 21,000 | 1,615 | ||||||
Bilfinger Berger AG | 74,659 | 6,657 | ||||||
Gildemeister AG | 154,452 | 4,965 | ||||||
MTU Aero Engines Holding AG | 59,825 | 3,648 | ||||||
Pfeiffer Vacuum Technology AG | 32,897 | 2,807 | ||||||
Q-Cells AG * | 49,540 | 6,334 | ||||||
SGL Carbon AG * | 66,200 | 3,866 | ||||||
Solarworld AG | 153,660 | 10,431 | ||||||
Solon AG Fuer Solartechnik * | 25,482 | 3,198 | ||||||
Vossloh AG | 34,538 | 4,084 | ||||||
47,605 | ||||||||
Commercial Services & Supplies 0.4% | ||||||||
D&S Europe AG * | 170,343 | 3,221 | ||||||
GfK AG | 102,016 | 4,113 | ||||||
Wirecard AG * | 376,186 | 6,575 | ||||||
13,909 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Rational AG | 20,448 | 4,740 | ||||||
Household & Personal Products 0.1% | ||||||||
Henkel KGaA | 36,300 | 1,680 |
32 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Insurance 0.6% | ||||||||
Allianz SE-Reg’d | 45,800 | 10,313 | ||||||
Hannover Rueckversicherung AG - Reg’d | 198,100 | 10,457 | ||||||
20,770 | ||||||||
Materials 0.5% | ||||||||
BASF AG ADR | 88,875 | 12,355 | ||||||
K&S AG | 32,500 | 6,813 | ||||||
19,168 | ||||||||
Media 0.0% | ||||||||
CTS Eventim AG | 24,300 | 1,148 | ||||||
Real Estate 0.0% | ||||||||
Colonia Real Estate AG * | 34,100 | 1,031 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Kontron AG | 229,626 | 5,824 | ||||||
Software & Services 0.6% | ||||||||
SAP AG | 202,200 | 10,933 | ||||||
Software AG | 36,292 | 3,389 | ||||||
United Internet AG - Reg’d | 292,400 | 6,414 | ||||||
20,736 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Wincor Nixdorf AG | 75,684 | 7,540 | ||||||
Utilities 0.2% | ||||||||
RWE AG ADR | 40,225 | 5,489 | ||||||
194,498 | ||||||||
Greece 1.0% | ||||||||
Banks 0.2% | ||||||||
EFG Eurobank Ergasias | 87,468 | 3,413 | ||||||
National Bank of Greece S.A. | 74,680 | 5,218 | ||||||
8,631 | ||||||||
Capital Goods 0.1% | ||||||||
Michaniki S.A. | 278,121 | 3,146 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Jumbo S.A. | 58,000 | 2,093 | ||||||
Sprider Stores S.A. | 134,368 | 2,924 | ||||||
5,017 | ||||||||
Consumer Services 0.2% | ||||||||
Intralot S.A. Integrated Lottery | 150,500 | 6,529 | ||||||
Diversified Financials 0.2% | ||||||||
Hellenic Exchanges S.A. Holding | 151,072 | 5,287 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Coca-Cola Hellenic Bottling Co., S.A. | 84,500 | 5,245 | ||||||
33,855 | ||||||||
Hong Kong 1.1% | ||||||||
Capital Goods 0.2% | ||||||||
Melco International Development Ltd. | 3,172,000 | 6,014 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Fountain Set Holdings Ltd. | 11,129,430 | 3,314 | ||||||
Materials 0.3% | ||||||||
China National Building Material Co., Ltd., Class H | 1,942,000 | 8,609 | ||||||
Hung Hing Printing Group Ltd. (d) | 1,609,000 | 829 | ||||||
9,438 | ||||||||
Real Estate 0.5% | ||||||||
China Vanke Co., Ltd., Class B | 1,276,204 | 3,865 | ||||||
Kowloon Development Co., Ltd. | 1,195,000 | 3,718 | ||||||
Shenzhen Investment Ltd. | 8,091,000 | 7,822 | ||||||
Sino-Ocean Land Holdings Ltd. * | 2,346,827 | 4,227 | ||||||
19,632 | ||||||||
38,398 | ||||||||
India 0.9% | ||||||||
Banks 0.1% | ||||||||
Housing Development Finance Corp., Ltd. | 35,400 | 2,510 | ||||||
Capital Goods 0.2% | ||||||||
Asea Brown Boveri India Ltd. | 75,100 | 3,018 | ||||||
Bharat Heavy Electricals Ltd. | 47,000 | 3,136 | ||||||
Elecon Engineering Co., Ltd. | 311,331 | 2,434 | ||||||
8,588 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Voltas Ltd. | 899,806 | 5,030 | ||||||
Energy 0.1% | ||||||||
Aban Offshore Ltd. | 23,000 | 2,762 | ||||||
Household & Personal Products 0.1% | ||||||||
Dabur India Ltd. | 758,300 | 2,064 | ||||||
Real Estate 0.1% | ||||||||
Unitech Ltd. | 306,100 | 3,012 | ||||||
Software & Services 0.1% | ||||||||
Financial Technologies (India) Ltd. | 37,300 | 2,473 | ||||||
NIIT Ltd. | 412,178 | 1,283 | ||||||
3,756 | ||||||||
Telecommunication Services 0.1% | ||||||||
Bharti Airtel Ltd. * | 178,000 | 4,613 | ||||||
Tulip IT Services Ltd. | 60,000 | 1,431 | ||||||
6,044 | ||||||||
33,766 | ||||||||
Indonesia 0.3% | ||||||||
Banks 0.1% | ||||||||
PT Bank Rakyat Indonesia | 3,632,000 | 3,136 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
PT Bakrie Sumatera Plantations Tbk | 27,562,587 | 6,115 | ||||||
Materials 0.1% | ||||||||
PT Sumalindo Lestari Jaya Tbk * | 6,026,500 | 2,452 | ||||||
11,703 | ||||||||
Ireland 0.9% | ||||||||
Banks 0.5% | ||||||||
Bank of Ireland | 966,300 | 17,814 |
See financial notes 33
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Glanbia plc | 542,320 | 3,650 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
United Drug plc | 262,200 | 1,313 | ||||||
Media 0.2% | ||||||||
Independent News & Media plc | 1,517,813 | 5,621 | ||||||
Pharmaceuticals & Biotechnology 0.1% | ||||||||
ICON plc ADR * | 58,600 | 3,399 | ||||||
31,797 | ||||||||
Israel 0.0% | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Orbotech Ltd. * | 25,000 | 518 | ||||||
Italy 1.2% | ||||||||
Capital Goods 0.1% | ||||||||
Prysmian S.p.A. * | 117,851 | 3,404 | ||||||
Consumer Durables & Apparel 0.3% | ||||||||
Geox S.p.A. | 427,000 | 10,240 | ||||||
Tod’s S.p.A. | 23,350 | 1,964 | ||||||
12,204 | ||||||||
Consumer Services 0.1% | ||||||||
Snai S.p.A. * | 232,219 | 2,372 | ||||||
Diversified Financials 0.1% | ||||||||
Azimut Holding S.p.A. | 139,800 | 2,411 | ||||||
Energy 0.4% | ||||||||
Saipem S.p.A. | 330,300 | 14,659 | ||||||
Materials 0.1% | ||||||||
Polynt S.p.A. | 591,644 | 2,922 | ||||||
Transportation 0.1% | ||||||||
Autostrada Torino-Milano S.p.A. | 234,103 | 5,774 | ||||||
43,746 | ||||||||
Japan 9.8% | ||||||||
Automobiles & Components 0.6% | ||||||||
Denso Corp. | 148,500 | 6,033 | ||||||
F.C.C. Co., Ltd. | 340,700 | 6,407 | ||||||
Honda Motor Co., Ltd. | 273,800 | 10,253 | ||||||
22,693 | ||||||||
Banks 0.3% | ||||||||
Fukuoka Financial Group, Inc. | 725,000 | 4,673 | ||||||
Suruga Bank Ltd. | 406,000 | 5,330 | ||||||
10,003 | ||||||||
Capital Goods 2.0% | ||||||||
Komatsu Ltd. | 226,200 | 7,584 | ||||||
Mitsui & Co., Ltd. | 310,000 | 8,041 | ||||||
NGK Insulators Ltd. | 523,000 | 18,541 | ||||||
Nichias Corp. | 359,000 | 2,741 | ||||||
Takasago Thermal Engineering Co., Ltd. | 328,000 | 3,415 | ||||||
Takeuchi Mfg. Co., Ltd. | 89,700 | 5,437 | ||||||
The Japan Steel Works Ltd. | 495,000 | 8,097 | ||||||
Toyo Tanso Co., Ltd. | 94,527 | 9,490 | ||||||
Ushio, Inc. | 400,200 | 8,259 | ||||||
71,605 | ||||||||
Commercial Services & Supplies 0.3% | ||||||||
en-Japan, Inc. | 555 | 2,686 | ||||||
Meitec Corp. | 120,000 | 3,536 | ||||||
Takara Printing Co., Ltd. (d) | 295,780 | 2,719 | ||||||
8,941 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Makita Corp. | 21,400 | 1,031 | ||||||
Shimano, Inc. | 179,100 | 6,537 | ||||||
Tamron Co., Ltd. | 187,900 | 7,298 | ||||||
14,866 | ||||||||
Consumer Services 0.0% | ||||||||
Zensho Co., Ltd. | 132,400 | 1,348 | ||||||
Diversified Financials 1.3% | ||||||||
Daiwa Securities Group, Inc. | 3,034,300 | 29,242 | ||||||
Nikko Cordial Corp. | 763,000 | 10,926 | ||||||
ORIX Corp. | 24,820 | 5,091 | ||||||
45,259 | ||||||||
Energy 0.1% | ||||||||
Shinko Plantech Co., Ltd. | 281,400 | 4,444 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Nakanishi, Inc. | 10,900 | 1,370 | ||||||
So-net M3, Inc. * | 449 | 1,813 | ||||||
3,183 | ||||||||
Household & Personal Products 0.2% | ||||||||
Unicharm Corp. | 110,800 | 6,610 | ||||||
Materials 0.7% | ||||||||
Chugoku Marine Paints Ltd. | 163,000 | 2,214 | ||||||
Fujimi, Inc. | 42,700 | 856 | ||||||
Kuraray Co., Ltd. | 288,500 | 3,767 | ||||||
NIFCO, Inc. | 153,300 | 3,587 | ||||||
The Nippon Synthetic Chemical Industry Co., Ltd. | 990,000 | 6,610 | ||||||
Tokai Carbon Co., Ltd. | 569,000 | 7,136 | ||||||
24,170 | ||||||||
Media 0.1% | ||||||||
Jupiter Telecommunications Co., Ltd. * | 4,638 | 3,739 | ||||||
Pharmaceuticals & Biotechnology 0.0% | ||||||||
Takeda Pharmaceutical Co., Ltd. | 7,100 | 443 | ||||||
Real Estate 0.5% | ||||||||
Aeon Mall Co., Ltd. | 145,000 | 3,771 | ||||||
Ardepro Co., Ltd. | 3,700 | 1,244 | ||||||
K.K. DaVinci Advisors * | 3,208 | 3,347 | ||||||
Kenedix, Inc. | 985 | 2,173 | ||||||
Sumitomo Realty & Development Co., Ltd. | 216,000 | 7,624 | ||||||
18,159 | ||||||||
Retailing 0.4% | ||||||||
DeNa Co., Ltd. | 504 | 3,157 | ||||||
Honeys Co., Ltd. | 5,860 | 168 | ||||||
Nitori Co., Ltd. | 37,810 | 1,728 | ||||||
Yamada Denki Co., Ltd. | 73,400 | 7,568 | ||||||
12,621 |
34 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Semiconductors & Semiconductor Equipment 0.8% | ||||||||
Miraial Co., Ltd. | 22,918 | 1,052 | ||||||
Rohm Co., Ltd. | 284,098 | 24,890 | ||||||
Shinko Electric Industries Co., Ltd. | 135,500 | 3,132 | ||||||
29,074 | ||||||||
Software & Services 0.8% | ||||||||
Capcom Co., Ltd. | 280,800 | 8,031 | ||||||
Nintendo Co., Ltd. | 23,100 | 14,670 | ||||||
So-net Entertainment Corp. | 1,170 | 5,081 | ||||||
27,782 | ||||||||
Technology Hardware & Equipment 1.2% | ||||||||
Hosiden Corp. | 538,600 | 9,552 | ||||||
Mitsumi Electric Co., Ltd. | 277,500 | 12,787 | ||||||
Nippon Electric Glass Co., Ltd. | 158,000 | 2,685 | ||||||
OMRON Corp. | 646,200 | 15,893 | ||||||
Taiyo Yuden Co., Ltd. | 42,000 | 697 | ||||||
41,614 | ||||||||
346,554 | ||||||||
Luxembourg 1.0% | ||||||||
Energy 0.8% | ||||||||
Acergy S.A. | 178,000 | 5,159 | ||||||
Tenaris S.A. ADR | 415,325 | 22,344 | ||||||
27,503 | ||||||||
Telecommunication Services 0.2% | ||||||||
Millicom International Cellular S.A. * | 73,336 | 8,616 | ||||||
36,119 | ||||||||
Malaysia 0.4% | ||||||||
Banks 0.2% | ||||||||
Bumiputra-Commerce Holdings Berhad | 1,440,200 | 5,009 | ||||||
Malaysian Plantations Berhad | 3,759,900 | 3,361 | ||||||
8,370 | ||||||||
Capital Goods 0.1% | ||||||||
Tradewinds Corp. Berhad * | 4,911,200 | 1,980 | ||||||
Zelan Berhad | 733,300 | 1,331 | ||||||
3,311 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Kuala Lumpur Kepong Berhad | 560,600 | 2,483 | ||||||
14,164 | ||||||||
Mexico 0.5% | ||||||||
Diversified Financials 0.0% | ||||||||
Banco Compartamos S.A. de C.V. * | 291,100 | 1,502 | ||||||
Media 0.3% | ||||||||
Grupo Televisa S.A. ADR | 410,500 | 10,201 | ||||||
Transportation 0.2% | ||||||||
Grupo Aeroportuario del Pacifico S.A. de C.V., ADR | 98,593 | 5,171 | ||||||
16,874 | ||||||||
Netherlands 3.0% | ||||||||
Capital Goods 0.6% | ||||||||
Arcadis N.V. | 22,270 | 1,816 | ||||||
Draka Holding N.V. | 130,403 | 5,691 | ||||||
Imtech N.V. | 154,044 | 4,780 | ||||||
Koninklijke BAM Groep N.V. | 168,027 | 4,457 | ||||||
Koninklijke Boskalis Westminster N.V. CVA | 90,879 | 5,550 | ||||||
22,294 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Koninklijke (Royal) Philips Electronics N.V. | 120,500 | 4,985 | ||||||
TomTom N.V. * | 26,000 | 2,081 | ||||||
7,066 | ||||||||
Diversified Financials 0.0% | ||||||||
ING Groep N.V. ADR | 30,275 | 1,362 | ||||||
Energy 1.3% | ||||||||
Core Laboratories N.V. * | 53,700 | 7,837 | ||||||
Fugro N.V. CVA | 134,585 | 11,830 | ||||||
Schlumberger Ltd. | 268,275 | 25,908 | ||||||
45,575 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Sligro Food Group N.V. | 33,175 | 1,277 | ||||||
X 5 Retail Group N.V. GDR * | 66,300 | 2,401 | ||||||
3,678 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Unilever NV | 75,000 | 2,434 | ||||||
Pharmaceuticals & Biotechnology 0.3% | ||||||||
QIAGEN N.V. * | 438,657 | 10,327 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASML Holding N.V. * | 141,333 | 4,921 | ||||||
Software & Services 0.0% | ||||||||
Exact Holding NV | 14,640 | 651 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Smartrac N.V. * | 18,917 | 1,184 | ||||||
Transportation 0.2% | ||||||||
Koninklijke Vopak N.V. | 140,558 | 8,070 | ||||||
107,562 | ||||||||
New Zealand 0.4% | ||||||||
Consumer Services 0.1% | ||||||||
Sky City Entertainment Group Ltd. | 763,805 | 3,175 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Fisher & Paykel Healthcare Corp., Ltd. | 2,777,190 | 6,979 | ||||||
Retailing 0.0% | ||||||||
The Warehouse Group Ltd. | 356,137 | 1,555 | ||||||
Transportation 0.1% | ||||||||
Auckland International Airport Ltd. | 1,517,505 | 3,377 | ||||||
15,086 |
See financial notes 35
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Norway 0.8% | ||||||||
Capital Goods 0.1% | ||||||||
ODIM A.S.A. * | 295,112 | 5,188 | ||||||
Commercial Services & Supplies 0.1% | ||||||||
Stepstone A.S.A. * | 503,765 | 2,667 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Ekornes A.S.A. | 162,100 | 3,420 | ||||||
Energy 0.4% | ||||||||
Deep Sea Supply plc * | 826,501 | 3,878 | ||||||
Electromagnetic GeoServices A/S * | 135,750 | 2,175 | ||||||
Farstad Shipping A.S.A. (d) | 143,800 | 3,902 | ||||||
Sevan Marine A.S.A. * | 203,700 | 2,533 | ||||||
12,488 | ||||||||
Materials 0.0% | ||||||||
Yara International A.S.A. ADR | 7,975 | 310 | ||||||
Pharmaceuticals & Biotechnology 0.1% | ||||||||
Pronova BioPharma A/S * | 794,040 | 3,654 | ||||||
27,727 | ||||||||
Panama 0.0% | ||||||||
Transportation 0.0% | ||||||||
Copa Holdings S.A., Class A | 36,800 | 1,391 | ||||||
Philippines 0.1% | ||||||||
Real Estate 0.1% | ||||||||
Filinvest Land, Inc. * | 53,610,100 | 2,353 | ||||||
Portugal 0.1% | ||||||||
Capital Goods 0.0% | ||||||||
Mota-Engil, SGPS, S.A. | 109,201 | 907 | ||||||
Media 0.1% | ||||||||
Impresa-Sociedade Gestora de Participacoes S.A. * | 534,028 | 2,002 | ||||||
2,909 | ||||||||
Republic of Korea 2.5% | ||||||||
Automobiles & Components 0.0% | ||||||||
Hankook Tire Co., Ltd. | 70,110 | 1,484 | ||||||
Banks 0.1% | ||||||||
Kookmin Bank | 59,940 | 4,902 | ||||||
Capital Goods 0.2% | ||||||||
Jinsung T.E.C. | 144,671 | 2,279 | ||||||
TK Corp. | 69,448 | 2,966 | ||||||
5,245 | ||||||||
Consumer Services 0.3% | ||||||||
Hotel Shilla Co., Ltd. | 95,770 | 3,414 | ||||||
MegaStudy Co., Ltd. | 22,427 | 8,276 | ||||||
11,690 | ||||||||
Household & Personal Products 0.0% | ||||||||
LG Household & Health Care Ltd. | 2,917 | 650 | ||||||
Insurance 0.2% | ||||||||
LIG Non-Life Insurance Co., Ltd. | 232,310 | 7,206 | ||||||
Materials 0.2% | ||||||||
Hyundai Steel Co. | 22,600 | 2,254 | ||||||
SODIFF Advanced Materials Co., Ltd. | 30,800 | 3,196 | ||||||
5,450 | ||||||||
Retailing 0.0% | ||||||||
Gmarket, Inc. ADR * | 21,379 | 578 | ||||||
Semiconductors & Semiconductor Equipment 0.7% | ||||||||
Samsung Electronics Co., Ltd. | 39,000 | 24,047 | ||||||
Software & Services 0.2% | ||||||||
NHN Corp. * | 20,440 | 6,572 | ||||||
Telecommunication Services 0.4% | ||||||||
SK Telecom Co., Ltd. | 67,200 | 15,766 | ||||||
Transportation 0.2% | ||||||||
STX Pan Ocean Co., Ltd. | 2,455,000 | 6,315 | ||||||
89,905 | ||||||||
Russia 0.1% | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Wimm-Bill-Dann Foods ADR | 18,500 | 2,215 | ||||||
Singapore 3.0% | ||||||||
Capital Goods 0.5% | ||||||||
Hyflux Ltd. | 2,183,000 | 5,534 | ||||||
Midas Holdings Ltd. | 1,777,000 | 2,132 | ||||||
SembCorp Marine Ltd. | 1,341,000 | 4,163 | ||||||
Tat Hong Holdings Ltd. | 1,926,000 | 4,030 | ||||||
15,859 | ||||||||
Consumer Services 0.1% | ||||||||
Raffles Education Corp., Ltd. | 1,122,000 | 2,578 | ||||||
Diversified Financials 0.2% | ||||||||
Singapore Exchange Ltd. | 634,000 | 6,947 | ||||||
Energy 0.3% | ||||||||
Ezra Holdings Ltd. | 777,000 | 3,747 | ||||||
Straits Asia Resources Ltd. | 4,154,000 | 7,695 | ||||||
11,442 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Olam International Ltd. | 1,063,000 | 2,596 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Parkway Holdings Ltd. | 1,710,850 | 4,962 | ||||||
Household & Personal Products 0.0% | ||||||||
GP Batteries International Ltd. (d) | 1,719,000 | 1,503 | ||||||
Real Estate 0.8% | ||||||||
Capitaland Ltd. | 2,692,300 | 15,159 | ||||||
CapitaMall Trust | 2,025,000 | 5,168 | ||||||
Ho Bee Investment Ltd. | 703,000 | 901 | ||||||
Yanlord Land Group Ltd. | 2,422,000 | 6,606 | ||||||
27,834 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Unisteel Technology Ltd. | 3,069,750 | 3,999 | ||||||
Telecommunication Services 0.2% | ||||||||
MobileOne Ltd. | 2,874,900 | 4,188 |
36 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
StarHub Ltd. | 2,060,000 | 4,461 | ||||||
8,649 | ||||||||
Transportation 0.5% | ||||||||
SIA Engineering Co. | 1,563,000 | 5,141 | ||||||
Singapore Airport Ltd. | 2,217,000 | 4,620 | ||||||
SMRT Corp., Ltd. | 5,100,000 | 6,256 | ||||||
16,017 | ||||||||
Utilities 0.1% | ||||||||
Epure International Ltd. * | 2,011,000 | 3,302 | ||||||
105,688 | ||||||||
South Africa 1.0% | ||||||||
Capital Goods 0.2% | ||||||||
Murray & Roberts Holdings Ltd. | 478,000 | 7,355 | ||||||
Wilson Bayly Holmes-Ovcon Ltd. | 84,800 | 1,713 | ||||||
9,068 | ||||||||
Diversified Financials 0.1% | ||||||||
JSE Ltd. | 178,795 | 2,390 | ||||||
Food & Staples Retailing 0.2% | ||||||||
The Spar Group Ltd. | 757,765 | 6,785 | ||||||
Materials 0.1% | ||||||||
Exxaro Resources Ltd. | 286,707 | 4,658 | ||||||
Media 0.1% | ||||||||
Naspers Ltd., Class N | 83,700 | 2,661 | ||||||
Retailing 0.1% | ||||||||
Truworths International Ltd. | 451,800 | 2,283 | ||||||
Telecommunication Services 0.2% | ||||||||
MTN Group Ltd. | 344,000 | 6,705 | ||||||
34,550 | ||||||||
Spain 2.0% | ||||||||
Capital Goods 0.5% | ||||||||
Solaria Energia y Medio Ambiente S.A. * | 98,700 | 2,859 | ||||||
Tecnicas Reunidas S.A. | 158,562 | 13,353 | ||||||
16,212 | ||||||||
Commercial Services & Supplies 0.1% | ||||||||
Prosegur, Compania de Seguridad S.A. - Reg’d | 108,264 | 4,232 | ||||||
Diversified Financials 0.1% | ||||||||
Bolsas y Mercados Espanoles | 56,500 | 3,951 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Viscofan, S.A. | 170,385 | 4,401 | ||||||
Materials 0.2% | ||||||||
Tubacex, S.A. | 608,284 | 6,888 | ||||||
Media 0.4% | ||||||||
Gestevision Telecinco S.A. | 528,900 | 15,286 | ||||||
Pharmaceuticals & Biotechnology 0.4% | ||||||||
Grifols S.A. | 532,728 | 14,134 | ||||||
Retailing 0.2% | ||||||||
Industria de Diseno Textil S.A. | 84,800 | 6,340 | ||||||
71,444 | ||||||||
Sweden 0.3% | ||||||||
Capital Goods 0.1% | ||||||||
Hexagon AB, Series B | 67,200 | 1,627 | ||||||
Commercial Services & Supplies 0.1% | ||||||||
Intrum Justitia AB | 271,790 | 4,356 | ||||||
Materials 0.1% | ||||||||
Billerud | 301,000 | 3,634 | ||||||
Retailing 0.0% | ||||||||
Hemtex AB | 76,432 | 1,116 | ||||||
10,733 | ||||||||
Switzerland 7.1% | ||||||||
Capital Goods 1.0% | ||||||||
ABB Ltd. - Reg’d | 725,300 | 21,926 | ||||||
ABB Ltd. ADR | 50,000 | 1,511 | ||||||
Bucher Industries AG - Reg’d | 19,467 | 4,635 | ||||||
Geberit AG - Reg’d | 34,300 | 4,640 | ||||||
Meyer Burger Technology AG * | 9,173 | 3,080 | ||||||
35,792 | ||||||||
Commercial Services & Supplies 0.6% | ||||||||
Adecco S.A. - Reg’d | 290,500 | 17,515 | ||||||
SGS S.A. - Reg’d | 1,759 | 2,310 | ||||||
19,825 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 268,600 | 19,208 | ||||||
Diversified Financials 1.9% | ||||||||
Credit Suisse Group - Reg’d | 385,200 | 26,031 | ||||||
EFG International - Reg’d | 78,600 | 3,695 | ||||||
Partners Group - Reg’d | 29,900 | 4,067 | ||||||
UBS AG - Reg’d | 527,400 | 28,275 | ||||||
UBS AG - Reg’d | 98,850 | 5,307 | ||||||
67,375 | ||||||||
Food, Beverage & Tobacco 1.1% | ||||||||
Barry Callebaut AG - Reg’d * | 3,340 | 2,685 | ||||||
Lindt & Spruengli AG | 1,700 | 5,884 | ||||||
Nestle S.A. - Reg’d | 40,800 | 18,845 | ||||||
Nestle S.A. ADR - Reg’d | 103,825 | 12,002 | ||||||
39,416 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Galenica Holding AG - Reg’d. | 8,398 | 4,071 | ||||||
Nobel Biocare Holding AG | 3,890 | 1,136 | ||||||
5,207 | ||||||||
Materials 0.5% | ||||||||
Givaudan S.A. - Reg’d | 4,900 | 4,820 | ||||||
Gurit Holding AG | 504 | 482 | ||||||
Lonza Group AG - Reg’d | 76,100 | 8,878 | ||||||
Schmolz & Bickenbach AG - Reg’d | 32,815 | 3,247 | ||||||
17,427 | ||||||||
Pharmaceuticals & Biotechnology 1.1% | ||||||||
Actelion Ltd. * | 80,000 | 3,980 | ||||||
Basilea Pharmaceutica AG - Reg’d * | 12,200 | 2,305 | ||||||
Novartis AG - Reg’d | 481,500 | 25,613 | ||||||
Novartis AG ADR | 92,050 | 4,894 |
See financial notes 37
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Roche Holding AG - Genusschein | 22,500 | 3,843 | ||||||
40,635 | ||||||||
Transportation 0.2% | ||||||||
Kuehne & Nagel International AG - Reg’d | 66,900 | 7,190 | ||||||
252,075 | ||||||||
Taiwan 1.5% | ||||||||
Banks 0.4% | ||||||||
Chinatrust Financial Holding Co., Ltd. * | 20,958,123 | 15,375 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Merry Electronics Co., Ltd. | 746,528 | 2,716 | ||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
Epistar Corp. | 590,000 | 2,670 | ||||||
MediaTek, Inc. | 538,812 | 10,663 | ||||||
Realtek Semiconductor Corp. | 30,700 | 119 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 2,768,000 | 5,531 | ||||||
18,983 | ||||||||
Technology Hardware & Equipment 0.5% | ||||||||
Catcher Technology Co., Ltd. (b) | 64,444 | 445 | ||||||
Chicony Electronics Co., Ltd. | 827,000 | 1,611 | ||||||
Gemtek Technology Corp. (b) | 19,799 | 45 | ||||||
HannStar Display Corp. * | 9,221,436 | 4,298 | ||||||
Hon Hai Precision Industry Co., Ltd. | 1,023,026 | 7,843 | ||||||
Motech Industries, Inc. | 212,000 | 2,243 | ||||||
16,485 | ||||||||
53,559 | ||||||||
Thailand 0.1% | ||||||||
Energy 0.1% | ||||||||
Banpu Public Co., Ltd. NVDR | 224,400 | 2,955 | ||||||
Turkey 0.3% | ||||||||
Banks 0.2% | ||||||||
Asya Katilim Bankasi A/S * | 920,041 | 7,886 | ||||||
Food & Staples Retailing 0.1% | ||||||||
BIM Birlesik Magazalar A/S | 23,400 | 1,932 | ||||||
9,818 | ||||||||
United Arab Emirates 0.1% | ||||||||
Real Estate 0.1% | ||||||||
Emaar Properties | 907,300 | 3,188 | ||||||
United Kingdom 17.9% | ||||||||
Banks 1.6% | ||||||||
Barclays plc | 1,489,200 | 18,848 | ||||||
HSBC Holdings plc | 920,000 | 18,240 | ||||||
Lloyds TSB Group plc | 1,710,800 | 19,434 | ||||||
56,522 | ||||||||
�� | ||||||||
Capital Goods 1.9% | ||||||||
BAE Systems plc ADR | 49,850 | 2,099 | ||||||
Bodycote International plc (d) | 1,071,157 | 6,560 | ||||||
Chemring Group plc | 59,743 | 2,755 | ||||||
Chloride Group plc | 853,086 | 3,813 | ||||||
Cobham plc | 1,293,262 | 5,679 | ||||||
Rolls-Royce Group plc * | 911,282 | 10,224 | ||||||
Rolls-Royce Group plc, B Shares * | 35,454,313 | 74 | ||||||
Spirax-Sarco Engineering plc | 206,582 | 4,646 | ||||||
The Weir Group plc | 595,664 | 11,016 | ||||||
Ultra Electronics Holdings plc | 365,089 | 9,525 | ||||||
Vt Group plc | 685,100 | 8,594 | ||||||
WSP Group plc | 135,829 | 2,363 | ||||||
67,348 | ||||||||
Commercial Services & Supplies 2.0% | ||||||||
Aggreko plc | 243,700 | 3,189 | ||||||
Babcock International Group plc | 395,682 | 4,838 | ||||||
Capita Group plc | 542,238 | 8,468 | ||||||
De La Rue plc | 288,600 | 4,934 | ||||||
Experian Group Ltd. | 1,294,400 | 13,611 | ||||||
G4S plc | 2,483,400 | 10,977 | ||||||
Intertek Group plc | 223,200 | 4,787 | ||||||
Mitie Group plc | 497,643 | 2,888 | ||||||
RPS Group plc | 623,497 | 5,062 | ||||||
Serco Group plc | 864,112 | 8,127 | ||||||
Spice plc | 182,297 | 2,244 | ||||||
WS Atkins plc | 124,600 | 3,150 | ||||||
72,275 | ||||||||
Consumer Services 0.2% | ||||||||
Compass Group plc | 178,300 | 1,286 | ||||||
Domino’s Pizza UK & IRL plc | 271,940 | 1,356 | ||||||
Greene King plc | 161,121 | 3,046 | ||||||
Restaurant Group plc | 463,023 | 2,628 | ||||||
8,316 | ||||||||
Diversified Financials 1.4% | ||||||||
Ashmore Group plc | 259,600 | 1,583 | ||||||
BlueBay Asset Management plc | 192,000 | 1,844 | ||||||
Cattles plc | 801,679 | 5,714 | ||||||
IG Group Holdings plc | 1,449,625 | 12,577 | ||||||
Man Group plc | 423,000 | 5,198 | ||||||
RAB Capital plc | 1,320,759 | 3,013 | ||||||
Schroders plc | 627,500 | 20,167 | ||||||
50,096 | ||||||||
Energy 1.2% | ||||||||
BG Group plc | 620,000 | 11,495 | ||||||
Cairn Energy plc * | 85,312 | 4,189 | ||||||
Expro International Group plc | 490,152 | 12,509 | ||||||
Lamprell plc | 470,600 | 4,705 | ||||||
Tullow Oil plc | 290,390 | 3,863 | ||||||
Wellstream Holdings plc * | 384,292 | 7,403 | ||||||
44,164 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Tesco plc | 1,608,900 | 16,367 | ||||||
Food, Beverage & Tobacco 1.8% | ||||||||
British American Tobacco plc ADR | 85,775 | 6,577 | ||||||
Cadbury Schweppes plc | 1,609,300 | 21,407 | ||||||
Cadbury Schweppes plc ADR | 108,075 | 5,754 | ||||||
Diageo plc | 706,100 | 16,201 | ||||||
Diageo plc ADR | 154,525 | 14,178 | ||||||
64,117 |
38 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($ x 1,000) | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Southern Cross Healthcare Ltd. | 598,092 | 7,520 | ||||||
Household & Personal Products 0.4% | ||||||||
Reckitt Benckiser Group plc | 240,900 | 13,994 | ||||||
Insurance 0.3% | ||||||||
Admiral Group plc | 276,800 | 5,958 | ||||||
Amlin plc | 640,700 | 4,295 | ||||||
10,253 | ||||||||
Materials 2.2% | ||||||||
Anglo American plc ADR | 390,992 | 13,665 | ||||||
Croda International plc | 220,978 | 3,074 | ||||||
Ferrexpo plc * | 567,006 | 2,924 | ||||||
Rexam plc | 542,797 | 6,134 | ||||||
Rio Tinto plc ADR | 82,875 | 31,078 | ||||||
Victrex plc | 485,890 | 7,563 | ||||||
Xstrata plc | 166,600 | 12,013 | ||||||
76,451 | ||||||||
Media 1.2% | ||||||||
British Sky Broadcasting Group plc | 1,442,700 | 20,432 | ||||||
Johnston Press Group plc | 1,566,500 | 9,811 | ||||||
Rightmove plc | 180,900 | 2,242 | ||||||
Trinity Mirror plc | 1,417,000 | 11,888 | ||||||
44,373 | ||||||||
Pharmaceuticals & Biotechnology 0.9% | ||||||||
GlaxoSmithKline plc | 1,144,100 | 29,387 | ||||||
Hikma Pharmaceuticals plc | 352,910 | 3,655 | ||||||
33,042 | ||||||||
Retailing 0.8% | ||||||||
Tardus plc * | 96,220 | 2,624 | ||||||
Signet Group plc | 10,454,000 | 19,716 | ||||||
The Carphone Warehouse Group plc | 829,317 | 6,079 | ||||||
28,419 | ||||||||
Software & Services 0.4% | ||||||||
Autonomy Corp plc * | 214,600 | 4,401 | ||||||
Aveva Group plc | 193,829 | 4,665 | ||||||
Blinkx plc * | 941,800 | 624 | ||||||
Detica Group plc | 209,600 | 1,454 | ||||||
Xchanging Ltd. * | 368,824 | 2,087 | ||||||
13,231 | ||||||||
Technology Hardware & Equipment 0.9% | ||||||||
Halma plc | 1,084,942 | 5,114 | ||||||
Laird Group plc | 316,792 | 4,199 | ||||||
Rotork plc | 659,119 | 15,064 | ||||||
TT Electronics plc | 2,051,464 | 6,331 | ||||||
30,708 | ||||||||
637,196 | ||||||||
Total Foreign Common Stock (Cost $2,559,782) | 3,379,924 | |||||||
Preferred Stock 0.5% of net assets | ||||||||
Brazil 0.4% | ||||||||
Banks 0.2% | ||||||||
Banco Itau Holding Financeira S.A. | 167,800 | 4,790 | ||||||
Banco Sofisa S.A. * | 166,500 | 1,453 | ||||||
6,243 | ||||||||
Energy 0.2% | ||||||||
Petroleo Brasileiro S.A. | 173,600 | 7,224 | ||||||
13,467 | ||||||||
Germany 0.1% | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Hugo Boss AG | 33,079 | 2,235 | ||||||
Total Preferred Stock (Cost $6,919) | 15,702 | |||||||
Other Investment Companies 0.1% of net assets | ||||||||
iShares MSCI Emerging Markets Index | 25,000 | 4,180 | ||||||
WisdomTree International SmallCap Dividend Fund | 4,147 | 308 | ||||||
Total Other Investment Companies (Cost $4,140) | 4,488 | |||||||
Warrants 0.0% of net assets | ||||||||
Indonesia 0.0% | ||||||||
Bakrie Sumatera Plantations Tbk PT (c) * | 2,071,546 | — | ||||||
Total Warrants (Cost $—) | — | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 3.5% of net assets | ||||||||
Repurchase Agreement 3.5% | ||||||||
Fixed Income Clearing Corp. dated 10/31/07, due 11/01/07 at 4.55%, with a maturity value of $124,714 (fully collateralized by U.S. Government Agency Securities with a value of $127,207.) | ||||||||
124,698 | 124,698 | |||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill (a) |
See financial notes 39
Table of Contents
Laudus International MarketMasters Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
3.92%, 12/20/07 | 130 | 129 | ||||||
Total Short-Term Investments (Cost $124,827) | 124,827 | |||||||
End of Investments. | ||||||||
At 10/312007, the tax basis cost of the fund’s investments was $2,714,180, and the unrealized appreciation and depreciation were $844,472 and ($33,589), respectively, with a net unrealized appreciation of $810,883. | ||||||||
As of 10/31/2007, the values of certain foreign securities held by the fund aggregating $2,596,075 were adjusted from their market values following the guidelines adopted by the fund’s Board of Trustees. |
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $20,442 or 0.6% of net assets. | |
(c) | Fair-valued by management. | |
(d) | Illiquid and/or restricted security. |
ADR — American Depositary Receipt
BDR — Brazilian depositary receipt
CVA — Dutch Certificate
GDR — Global Depositary Receipt
NVDR — Non-Voting Depository Receipt
In addition to the above the fund held the following at 10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, Long, expires 12/20/07 | 5 | 2,081 | 108 | |||||||||
S & P 500 Index, Long, expires 12/20/07 | 2 | 777 | 28 | |||||||||
136 |
Amount of | Amount of | |||||||||||||||||||
Currency | Currency to be | Currency | Currency to be | Unrealized | ||||||||||||||||
Expiration | to be | Received | to be | Delivered | Losses | |||||||||||||||
Date | Received | ($ x 1,000) | Delivered | ($ x 1,000) | ($ x 1,000) | |||||||||||||||
Forward Foreign Currency Contracts | ||||||||||||||||||||
03/31/2008 | USD | 31,837 | EUR | 22,490 | (783 | ) | ||||||||||||||
01/07/2008 | USD | 20,430 | GBP | 10,200 | (733 | ) | ||||||||||||||
01/18/2008 | USD | 37,284 | GBP | 18,370 | (813 | ) | ||||||||||||||
01/23/2008 | USD | 18,138 | GBP | 8,880 | (275 | ) | ||||||||||||||
01/31/2008 | USD | 32,543 | GBP | 15,863 | (339 | ) | ||||||||||||||
04/04/2008 | USD | 45,546 | GBP | 22,410 | (802 | ) | ||||||||||||||
04/21/2008 | USD | 44,379 | GBP | 21,900 | (888 | ) | ||||||||||||||
(4,633 | ) |
40 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2007. All numbers x 1,000 except NAV.
Assets | ||||||
Investments, at value (cost $2,695,791) | $3,525,063 | |||||
Cash | 3 | |||||
Foreign currency, at value (cost $15,332) | 15,417 | |||||
Receivables: | ||||||
Investments sold | 36,419 | |||||
Fund shares sold | 8,724 | |||||
Dividends | 4,225 | |||||
Foreign tax reclaims | 1,027 | |||||
Due from brokers for futures | 43 | |||||
Interest | 14 | |||||
Prepaid expenses | + | 12 | ||||
Total assets | 3,590,947 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 31,363 | |||||
Investment adviser and administrator fees | 367 | |||||
Transfer agent and shareholder services fees | 88 | |||||
Unrealized depreciation on forward foreign currency contracts | 4,633 | |||||
Fund shares redeemed | 1,832 | |||||
Foreign capital gains tax expense | 838 | |||||
Accrued expenses | + | 241 | ||||
Total liabilities | 39,362 | |||||
Net Assets | ||||||
Total assets | 3,590,947 | |||||
Total liabilities | − | 39,362 | ||||
Net assets | $3,551,585 | |||||
Net Assets by Source | ||||||
Capital received from investors | 2,449,936 | |||||
Net investment income not yet distributed | 5,187 | |||||
Net realized capital gains | 271,577 | |||||
Net unrealized capital gains | 824,885 |
Net Asset Value (NAV) by Shares Class
Shares | |||||||||||
Share Class | Net Assets | ¸ | Outstanding | = | NAV | ||||||
Investor Shares | $2,296,549 | 88,477 | $25.96 | ||||||||
Select Shares | $1,255,036 | 48,272 | $26.00 |
See financial notes 41
Table of Contents
Laudus International MarketMasters Fund
Statement of
Operations
For November 1, 2006 through October 31, 2007. All numbers x 1,000.
Investment Income | ||||||
Dividends (net of foreign withholding tax of $4,177) | $52,790 | |||||
Interest | + | 3,802 | ||||
Total Investment Income | 56,592 | |||||
Net Realized Gains and Losses | ||||||
Net realized gains on investments | 279,579 | |||||
Net realized losses on foreign currency translations | (7,563 | ) | ||||
Net realized gains on futures contracts | + | 186 | ||||
Net realized gains | 272,202 | |||||
Net Unrealized Gains and Losses | ||||||
Net unrealized gains on investments | 519,482 | |||||
Net unrealized losses on foreign currency translations | (4,382 | ) | ||||
Net unrealized losses on futures contracts | + | (41 | ) | |||
Net unrealized gains | 515,059 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 32,845 | |||||
Transfer agent and shareholder service fees: | ||||||
Investor Shares | 4,304 | |||||
Select Shares | 1,760 | |||||
Custodian fees | 1,565 | |||||
Shareholder reports | 209 | |||||
Registration fees | 105 | |||||
Portfolio accounting fees | 130 | |||||
Professional fees | 84 | |||||
Overdraft expense | 21 | |||||
Trustees’ fees | 18 | |||||
Other expenses | + | 18 | ||||
Total expenses | 41,059 | |||||
Custody Credit | − | 840 | ||||
Expense reduction by adviser and Schwab | − | 718 | ||||
Net expenses | 39,501 | |||||
Increase in Net Assets from Operations | ||||||
Total investment income | 56,592 | |||||
Net expenses | − | 39,501 | ||||
Net investment income | 17,091 | |||||
Net realized gains | 272,202 | |||||
Net unrealized gains | + | 515,059 | ||||
Increase in net assets from operations | $804,352 |
42 See financial notes
Table of Contents
Laudus International MarketMasters Fund
Statements of
Changes in Net Assets
For the current and prior report periods. All numbers x 1,000.
Operations |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||
Net investment income | $17,091 | $9,552 | ||||||
Net realized gains | 272,202 | 184,320 | ||||||
Net unrealized gains | + | 515,059 | 113,036 | |||||
Increase in net assets from operations | 804,352 | 306,908 | ||||||
Distributions to Shareholders | ||||||||
Distributions from net investment income | ||||||||
Investor Shares | 10,102 | 7,908 | ||||||
Select Shares | + | 5,868 | 3,448 | |||||
Total distributions from net investment income | 15,970 | 11,356 | ||||||
Distributions from net realized gains | ||||||||
Investor Shares | 102,732 | — | ||||||
Select Shares | + | 49,061 | — | |||||
Total distributions from net realized gains | 151,793 | — | ||||||
Total distributions | $167,763 | $11,356 |
Transactions in Fund Shares |
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 39,201 | $892,836 | 36,898 | $713,186 | ||||||||||||||
Select Shares | + | 22,242 | 510,084 | 20,443 | 394,541 | |||||||||||||
Total shares sold | 61,443 | $1,402,920 | 57,341 | $1,107,727 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 4,681 | $95,215 | 406 | $7,287 | ||||||||||||||
Select Shares | + | 2,180 | 44,358 | 164 | 2,946 | |||||||||||||
Total shares reinvested | 6,861 | $139,573 | 570 | $10,233 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (19,082 | ) | ($431,924 | ) | (20,911 | ) | ($404,207 | ) | ||||||||||
Select Shares | + | (6,398 | ) | (143,587 | ) | (6,679 | ) | (129,171 | ) | |||||||||
Total shares redeemed | (25,480 | ) | ($575,511 | ) | (27,590 | ) | ($533,378 | ) | ||||||||||
Net transactions in fund shares | 42,824 | $966,982 | 30,321 | $584,582 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/06-10/31/07 | 11/1/05-10/31/06 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 93,925 | $1,948,014 | 63,604 | $1,067,880 | ||||||||||||||
Total increase | + | 42,824 | 1,603,571 | 30,321 | 880,134 | |||||||||||||
End of period | 136,749 | $3,551,585 | 93,925 | $1,948,014 | ||||||||||||||
Net investment income not yet distributed | $5,187 | $8,883 |
See financial notes 43
Table of Contents
Laudus MarketMasters Funds
Financial Notes
1. | Business Structure of the Funds: |
Each of the funds discussed in this report is a series of Schwab Capital Trust (the “trust”), a no-load, open-end management investment company. The trust organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended. The list below shows all the funds in the trust including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) Laudus U.S. MarketMasters Fund Laudus Small-Cap MarketMasters Fund Laudus International MarketMasters Fund Schwab S&P 500 Index Fund Schwab Institutional Select S&P 500 Fund Schwab Small-Cap Index Fund Schwab Total Stock Market Index Fund Schwab International Index Fund Schwab MarketTrack All Equity Portfolio Schwab MarketTrack Growth Portfolio Schwab MarketTrack Balanced Portfolio Schwab MarketTrack Conservative Portfolio Schwab Viewpoints Fund Schwab Premier Equity Fund Schwab Core Equity Fund | Schwab Dividend Equity Fund Schwab Large-Cap Growth Fund Schwab Small-Cap Equity Fund Schwab Hedged Equity Fund Schwab Financial Services Fund Schwab Health Care Fund Schwab Technology Fund Schwab Target 2010 Fund Schwab Target 2020 Fund Schwab Target 2030 Fund Schwab Target 2040 Fund Schwab Retirement Income Fund Schwab Fundamental US Large Company Index Fund Schwab Fundamental US Small-Mid Company Index Fund Schwab Fundamental International Large Company Index Fund | |
Laudus MarketMasters Funds offer two share classes: Investor Shares and Select Shares®. Shares of each class represent interest in the same portfolio, but each class has different expenses and investment minimums.
Shares are bought and sold at net asset value, or NAV, which is the price for all outstanding shares. Each share has a par value of 1/1,000 of a cent, and the trustees may authorize the issuance of as many shares as necessary.
Effective November 1, 2004, the Schwab MarketMasters Funds were renamed the Laudus MarketMasters Funds.
2. | Significant Accounting Policies: |
The following is a summary of the significant accounting policies the funds used in the preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America.
(a) | Security Valuation: |
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and asked quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the current exchange rate. |
• | Securities for which no quoted value is available or when a significant event has occurred between the time of the security’s last close and the time the fund calculates net asset value: valued at fair value, as determined in good faith by the funds’ investment adviser using guidelines adopted by the funds’ Board of Trustees and the Pricing Committee. Some of the more common reasons that may necessitate that a security be valued at fair value include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; the security’s primary pricing source is not able or willing to provide a price, or certain foreign securities closing market values adjusted for changes in value that may occur between the close of foreign exchange and the time at which fund shares are priced. The Board of Trustees regularly reviews fair value determinations, made by the funds, pursuant to the procedures. |
44
Table of Contents
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
• | Bonds and notes: valued at halfway between the most recent bid and asked quotes or, if such quotes are unavailable, at prices for securities of comparable maturity, credit quality and type. Valuations for bonds and notes are provided by an independent bond-pricing service. | |
• | Futures and forward currency contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a market value based on that day’s exchange rates (for forwards). When a fund closes out a futures or forwards position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost. | |
• | Mutual funds: valued at their respective net asset values as determined by those funds in accordance with the 1940 Act for a given day. |
(b) | Portfolio Investments: |
Delayed-Delivery: The funds may buy securities on a delayed-delivery basis. In these transactions, the funds agree to buy a security for a stated price, with settlement generally occurring within two weeks. If the security’s value falls before settlement occurs, the funds could end up paying more for the security than its market value at the time of settlement. The funds have set aside sufficient securities as collateral for those securities bought on a delayed-delivery basis.
Futures Contract: The funds may invest in futures contracts. Futures contracts involve certain risks because they can be very sensitive to market movements.
One risk is that the price of a futures contract may not move in perfect correlation with the price of the underlying securities. Another risk is that, at certain times, it may be impossible for a fund to close out a position in a futures contract, due to a difference in trading hours or to market conditions that may reduce the liquidity for a futures contract or its underlying securities. The potential for losses associated with futures contracts may exceed amounts recorded in the Statement of Assets and Liabilities.
Because futures carry inherent risks, a fund must give the broker a deposit of cash and/or securities (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another, but it is generally a percentage of the contract amount.
Futures are traded publicly on exchanges, and their market value changes daily. A fund records the change daily in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
Forward Currency Contract: Laudus International MarketMasters Fund may invest in forward currency contracts in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates. “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. Forwards are similar to futures except that they are not publicly traded, but are agreements directly between two parties.
As with futures, forwards involve certain risks that are not fully reflected in the fund’s financials. If counter-parties to the contracts or if the value of the foreign currency changes unfavorably, the fund could sustain a loss.
Repurchase Agreement: The funds may enter into a repurchase agreement. In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. The date, price and other conditions are all specified when the agreement is created.
The funds’ repurchase agreements will be fully collateralized by U.S. government securities. All collateral is held by the funds’ custodian (or, with tri-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement.
(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.
45
Table of Contents
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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.
(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.
(e) | Expenses: |
Expenses that are specific to a fund or a class within the trust are charged directly to that fund or class. 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 its net assets.
(f) | Distributions to Shareholders: |
The funds make distributions from net investment income and net realized capital gains once a year.
(g) | Custody Credit: |
Each fund has an arrangement with its custodian bank under which the fund receives a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts (if any) are disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.
(h) | Accounting Estimates: |
The accounting policies described in this report conform with accounting principles generally accepted in the United States of America. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates.
(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.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes.
(j) | Indemnification: |
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
46
Table of Contents
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(k) | New Accounting Standards: |
Financial Accounting Standards Board Interpretation (FIN) No. 48 — Accounting for Uncertainty in Income Taxes — an Interpretation of SFAS No. 109, was issued in July 2006 and is effective for fiscal years beginning after December 15, 2006. This Interpretation provides new requirements for the recognition, measurement, and disclosure in the financial statements of a tax position taken or expected to be taken in a tax return when there is uncertainty about whether that tax position will ultimately be sustained. A fund with a fiscal year ending October 31 will implement FIN 48 no later than April 30, 2008, and it will apply to all open tax years.
Management is currently evaluating the impact of adopting FIN 48, and at this time, believes that the adoption will have no material impact on each fund’s financial statements.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management is currently evaluating the impact of adopting SFAS No. 157 on each fund’s financial statements.
3. | Affiliates and Affiliated Transactions: |
(All dollar amounts are x 1,000)
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 it and the trust.
For its advisory and administrative services to each fund, the investment adviser is entitled to receive an annual fee payable monthly based on the funds’ average daily net assets described as follows:
U.S. | Small-Cap | International | ||||||||||
MarketMasters | MarketMasters | MarketMasters | ||||||||||
Average daily net assets | Fund | Fund | Fund | |||||||||
First $500 million | 0.925% | 1.17% | 1.29% | |||||||||
$500 million to $1 billion | 0.92% | 1.13% | 1.27% | |||||||||
Over $1 billion | 0.91% | 1.07% | 1.25% |
Charles Schwab & Co., Inc. (“Schwab”), is an affiliate of the investment adviser and is the trust’s transfer agent and shareholder services agent.
For its transfer agent and shareholder services, Schwab is entitled to receive an annual fee payable monthly based on the funds’ average daily net assets described as follows:
Transfer Agent Fees | Shareholder Service Fees | |||||||
Investor Shares | 0.05% | 0.20% | ||||||
Select Shares | 0.05% | 0.15% |
Although these agreements specify certain fees for these services, CSIM and Schwab have made additional agreements with the funds to limit the total expenses charged, excluding interest, taxes and certain non-routine expenses through February 27, 2008, as follows:
U.S. | ||||||||||||
MarketMasters | Small-Cap | International | ||||||||||
Fund | MarketMasters Fund | MarketMasters Fund | ||||||||||
Investor Shares | 1.25% | 1.55% | 1.65% | |||||||||
Select Shares | 1.07% | 1.37% | 1.47% |
47
Table of Contents
Laudus MarketMasters Funds
Financial Notes (continued)
3. | Affiliates and Affiliated Transactions (continued): (All dollar amounts are x 1,000) |
The funds may make direct transactions with certain other Schwab Funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and officers. As of October 31, 2007, each fund’s total security transactions (including in-kind redemptions) with other Schwab Funds were as follows:
U.S. MarketMasters Fund | $— | |||
Small-Cap MarketMasters Fund | — | |||
International MarketMasters Fund | 100 |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions within the Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. There was no interfund borrowing or lending activity for any funds during the period.
Trustees
Trustees may include people who are officers and/or directors of the investment adviser or Schwab. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these persons for their service as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
4. | Borrowing from Banks: |
The funds may borrow money from banks and custodians. The funds may obtain temporary bank loans through the trusts to which they belong, to use for meeting shareholder redemptions or for extraordinary or emergency purposes. The Schwab Funds have custodian overdraft facilities and uncommitted line of credit arrangements of $150 million and $100 million with State Street Corporation and Bank of America, N.A., respectively. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. There were no borrowings from the line of credit for any funds during the period.
5. | Purchases and Sales of Investment Securities: |
(All dollar amounts are x 1,000)
For the fiscal year ended October 31, 2007, purchases and sales of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
U.S. MarketMasters Fund | $82,257 | $98,161 | ||||||
Small-Cap MarketMasters Fund | 522,504 | 130,782 | ||||||
International MarketMasters Fund | 2,607,045 | 1,798,770 |
6. | Redemption Fee: |
(All dollar amounts are x 1,000)
The funds may impose a short-term redemption fee on any fund shares that are redeemed or exchanged by a shareholder within a specified number of days of the purchase date. The funds charge a redemption fee of 2.00% on shares held less than 30 days.
48
Table of Contents
Laudus MarketMasters Funds
Financial Notes (continued)
6. | Redemption Fee (continued): (All dollar amounts are x 1,000) |
Such amounts are net of the redemption fee proceeds on the Statement of Changes in Net Assets. The redemption fees charged during the current period and prior fiscal year are:
Current Period | Prior Period | |||||||
(11/01/06-10/31/07) | (11/01/05-10/31/06) | |||||||
U.S. MarketMasters Fund | ||||||||
Investor Shares | $8 | $5 | ||||||
Select Shares | — | |||||||
Small-Cap MarketMasters Fund | ||||||||
Investor Shares | 2 | 3 | ||||||
Select Shares | 3 | — | ||||||
International MarketMasters Fund | ||||||||
Investor Shares | 151 | 89 | ||||||
Select Shares | 33 | 47 |
7. | Federal Income Taxes: |
(All dollar amounts are x 1,000)
As of October 31, 2007, the components of distributable earnings on a tax-basis were as follows:
U.S. | Small-Cap | International | ||||||||||
MarketMasters | MarketMasters | MarketMasters | ||||||||||
Fund | Fund | Fund | ||||||||||
Undistributed ordinary income | $60 | $2,317 | $89,979 | |||||||||
Undistributed long-term capital gains | — | 10,958 | 200,687 | |||||||||
Unrealized appreciation | 32,647 | 39,580 | 844,472 | |||||||||
Unrealized depreciation | (3,936 | ) | (15,200 | ) | (33,589 | ) | ||||||
Other unrealized appreciation/(depreciation) | — | — | 100 | |||||||||
Net unrealized appreciation/(depreciation) | 28,711 | 24,380 | 810,983 |
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 carry forwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2007, the funds had no capital loss carry forwards, and $16,660 of capital losses carried from prior years for U.S. MarketMasters Fund were utilized to offset current year’s capital gains.
U.S. | Small-Cap | International | ||||||||||
MarketMasters | MarketMasters | MarketMasters | ||||||||||
Expire | Fund | Fund | Fund | |||||||||
2010 | $3,737 | $— | $— | |||||||||
2011 | 604 | |||||||||||
Total | $4,341 | $— | $— |
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Table of Contents
Laudus MarketMasters Funds
Financial Notes (continued)
7. | Federal Income Taxes (continued): (All dollar amounts are x 1,000) |
The tax-basis components of distributions paid during the current and prior fiscal years were:
U.S. | Small-Cap | International | ||||||||||
MarketMasters | MarketMasters | MarketMasters | ||||||||||
Fund | Fund | Fund | ||||||||||
Current period distributions | ||||||||||||
Ordinary income | $588 | $2,643 | $15,970 | |||||||||
Long-term capital gains | — | 12,710 | 151,793 | |||||||||
Return of capital | — | — | — | |||||||||
Prior period distributions | ||||||||||||
Ordinary income | 206 | — | $11,356 | |||||||||
Long-term capital gains | — | 8,918 | — | |||||||||
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 financing 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: paydowns on fixed-income 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 each fund for financial reporting purposes. Each fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2007, the funds made the following reclassifications:
U.S. | Small-Cap | International | ||||||||||
MarketMasters | MarketMasters | MarketMasters | ||||||||||
Fund | Fund | Fund | ||||||||||
Capital shares | $— | $(1 | ) | $— | ||||||||
Undistributed net investment income | (1 | ) | 781 | (4,817 | ) | |||||||
Net realized capital gains and losses | 1 | (780 | ) | 4,817 |
50
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Laudus U.S. MarketMasters Fund
Laudus Small-Cap MarketMasters Fund
Laudus International MarketMasters Fund
Laudus U.S. MarketMasters Fund
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 U.S. MarketMasters Fund, Laudus Small-Cap MarketMasters Fund, and Laudus International MarketMasters Fund (three of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the ‘Funds‘) at October 31, 2007, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as ‘financial statements‘) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 13, 2007
San Francisco, California
December 13, 2007
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Other Federal Tax Information (unaudited)
(All dollar amounts are x 1,000)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2007, qualify for the corporate dividends received deduction:
Percentage | ||||
U.S. MarketMasters Fund | 100 | % | ||
Small-Cap MarketMasters Fund | 20 | |||
International MarketMasters Fund | — |
For the fiscal year ended October 31, 2007, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2008 via IRS form 1099 of the amounts for use in preparing their 2007 income tax return.
U.S. MarketMasters Fund | $588 | |||
Small-Cap MarketMasters Fund | $619 | |||
International MarketMasters Fund | $15,970 |
The Laudus International MarketMasters Fund may elect to pass on the benefits of the foreign tax credit of $3,225 to its shareholders for the year ended October 31, 2007. The respective foreign source income on the Fund is $50,635.
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The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreements must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreements or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreements. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
Consistent with these responsibilities, 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 (the “Trust”) and CSIM (the “Agreement”) with respect to existing funds in the Trust, including the funds covered in this annual report, and the individual sub-advisory agreements between CSIM and Harris Associates L.P., TCW Investment Management Company, Thornburg Investment Management, Inc. and Gardner Lewis Asset Management L.P. relating to Laudus U.S. MarketMasters Fund; CSIM and TAMRO Capital Partners, LLC, TCW Investment Management Company and Tocqueville Asset Management LP relating to Laudus Small-Cap MarketMasters Fund; and CSIM and American Century Global Investment Management, Inc., Harris Associates L.P. and William Blair & Company, LLC relating to the Laudus International MarketMasters Fund (collectively, the “Sub-Advisers”). Such investment advisory and sub-advisory agreements are collectively referred to herein as the “Agreements”. The Trustees also review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM and the Sub-Advisers, including information about their affiliates, personnel and operations. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the funds that the Board reviews during the course of each year, including information that relates to fund operations and fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memo regarding the responsibilities of trustees for the approval of investment advisory contracts. 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 and the Sub-Advisers, as appropriate. 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.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreements at meetings held on May 2, 2007, and June 5, 2007, and approved the renewal of the Agreements for an additional one year term at the meeting held on June 5, 2007. The Board’s approval of the Agreements 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,
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experience, track record and compliance program. The information considered by the Trustees included specific information concerning changes in the nature, extent and quality of services provided by CSIM since the Trustees had last considered approval of the Agreements. The Trustees also considered investments in CSIM’s mutual fund infrastructure and the fact that 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 CSIM’s top three ranking in an independent survey regarding mutual fund client loyalty, 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. In this regard, the Trustees evaluated among other things, each Sub-Adviser’s personnel, experience and compliance program. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM and the Sub-Advisers to the funds and the resources of CSIM, and its affiliates, and the Sub-Advisers dedicated to the funds supported renewal of the Agreements.
Fund Performance. The Board considered fund performance in determining whether to renew the Agreements. Specifically, the Trustees considered each fund’s performance relative to a peer group and peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, yield, when applicable, and market trends. As part of this review, the Trustees considered the composition of the peer group and peer category, selection criteria and the reputation of the third party who prepared the peer group and 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 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.
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 other comparable 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 fees charged by CSIM and the Sub-Advisers to other similarly managed mutual funds and to other types of accounts, such as separate accounts, pooled vehicles and wrap accounts, 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.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly and the compensation flowing to the Sub-Advisers, 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 and the Sub-Advisers from their relationship with the funds, such as whether, by virtue of its management of the funds, CSIM or any Sub-Adviser 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 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. The Board also considered information relating to changes to CSIM’s business operations and how these changes affected CSIM’s profitability under the Agreements. 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.
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
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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 previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered existing contractual investment advisory fee schedules that include lower fees at higher graduated asset levels. The Board also considered certain existing commitments by CSIM and Schwab that are designed to pass along potential economies of scale to fund shareholders. 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, unanimously approved the continuation of the Agreements and concluded that the compensation under the Agreements 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.
Veredus Asset Management, LLC (“Veredus”) served as investment sub-adviser to the Laudus Small-Cap MarketMasters Fundtm (the “Fund”) pursuant to a sub-advisory agreement between Charles Schwab Investment Management, Inc. (“CSIM”), the Fund’s investment adviser and Veredus (the “Current Sub-Advisory Agreement”). On June 5, 2007, the Board of Trustees of Schwab Capital Trust (the “Trust”) authorized the officers of the Trust, to terminate on behalf of the Fund, the Current Sub-Advisory Agreement, dated January 16, 2002, as amended, between CSIM and Veredus, effective June 30, 2007.
At a meeting of the Board of Trustees of the Trust held on June 5, 2007, CSIM recommended, and the Board of Trustees, including a majority of Trustees who are not parties to the investment sub-advisory agreement or “interested persons” (as defined in the 1940 Act) of any party to the agreement (the “Independent Trustees”), approved a new investment sub-advisory agreement between CSIM and Neuberger Berman Management Inc. (“Neuberger”) (the “New Sub-Advisory Agreement”), to appoint Neuberger as sub-adviser to the Fund. The New Sub-Advisory Agreement to be effective on June 5, 2007, although Neuberger did not start managing a portion of the Fund until approximately July 1, 2007.
On June 5, 2007, the Board of Trustees held a meeting to decide, among other things, whether to approve the new Sub-Advisory Agreement. Before the meeting and in preparation for it, the Board of Trustees requested and received written materials from Neuberger about its (a) quality of investment management and other services; (b) investment management personnel; (c) operations and financial condition; (d) brokerage practices (including any soft dollar arrangements) and other investment strategies; (e) the level of the sub-advisory fees the Fund is charged, (f) the Fund’s overall fees and operating expenses; (g) Neuberger’s compliance systems; (h) Neuberger’s policies on and compliance procedures for personal securities transactions; (i) Neuberger’s reputation, expertise and resources in international financial markets; (j) Neuberger’s performance compared with similar advisers; and (k) Neuberger’s performance with respect to similar accounts managed by Neuberger. At the meeting, representatives from CSIM presented additional oral and written information to the Board of Trustees to help the Trustees evaluate Neuberger’s fees and other aspects of its agreement, including information about the Fund’s overall fees and operating expenses. When considering the fees to be paid to Neuerger, the Board took into account the fact that Neuberger will be compensated by CSIM, and not by the Fund directly, and that such compensation reflects an arms-length negotiation between CSIM and Neuberger. The Board of Trustees then discussed the written materials that they received before the meeting and CSIM’s oral presentations and other information that the Trustees received at the meeting, and deliberated on the approval of the New Sub-Advisory Agreement in light of this information. In their deliberations, the Board of Trustees did not identify any single piece of information that was all-important or controlling. Based on the Board of Trustees’ deliberations and its evaluation of the information described above, the Board of Trustees, including all of the Independent Trustees, unanimously: (a) concluded that the terms of the New Sub-Advisory Agreement are fair and reasonable; and (b) concluded that Neuberger’s fees are reasonable in light of the services that they provide to the Fund. The required Notice to Shareholders was sent to existing shareholders on June 14, 2007.
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The tables below give information as of October 31, 2007, about the trustees and officers for The 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, and Laudus Trust. As of October 31, 2007, the Fund Complex included 70 funds.
The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Board 1—Director, Redwood Trust, Inc. Board 2—Director, PMI Group, Inc. | |||||
Donald F. Dorward 1931 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chief Executive Officer, Dorward & Associates (corporate management, marketing and communications consulting firm). From 1996-1999, Executive Vice President and Managing Director, Grey Advertising. Prior to 1996, President and Chief Executive Officer, Allen & Dorward Advertising. | 60 | None. | |||||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley. Until February 2004, Co-Chief Executive Officer, Aphton Corp. (bio-pharmaceuticals). | 70 | Board 1—Director, Mission West Properties Board 2—Director, TOUSA Board 3—Director, Harris-Stratex Networks Board 4—Director, Genitope Corp. Board 5—Director & Non-Executive Chairman, Solectron Corp. Board 6—Director, Ditech Networks | |||||
Robert G. Holmes 1931 (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, Semloh Financial, Inc. (international financial services and investment advisory firm). | 60 | None. | |||||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and founder of Smith Graham & Co.(investment advisors). | 60 | Board 1—Board of Cooper Industries Board 2—Chairman of the Audit Committee of Oneok Partners LP | |||||
Donald R. Stephens 1938 Trustee (Trustee of Schwab Capital Trust since 1989.) | Managing Partner, D. R. Stephens & Company (investments). | 60 | None. | |||||
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Independent Trustees continued | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served1) | Past Five Years | the Trustee | Other Directorships | |||||
Michael W. Wilsey 1943 Trustee (Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer, Wilsey Bennett, Inc. (real estate investment and management, and other investments). | 60 | None. | |||||
Interested Trustees | ||||||||
Number of | ||||||||
and Position(s) with | Principal | Portfolios in | ||||||
the trust; (Terms of | Occupations | Fund Complex | ||||||
office, and length of | During the | Overseen by | ||||||
Time Served ) | Past Five Years | the Trustee | Other Directorships | |||||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1989.) | Chairman, Chief Executive Officer and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc.; Chairman and Director, Charles 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 and Director, Schwab Holdings, Inc. Through June 2007, Director, U.S. Trust Company, N.A., U.S. Trust Company of New York. Until May 2003, Co-Chief Executive Officer, The Charles Schwab Corporation. | 60 | None | |||||
Randall W. Merk2 1954 Trustee (Trustee of Schwab Capital Trust since 2005.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | 70 | None. | |||||
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Officers of the Trust | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Randall W. Merk 1954 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2007.) | Executive Vice President and President, Investment Management Services, Charles Schwab & Co., Inc.; Executive Vice President, Charles Schwab & Co., Inc. (2002— present); President and Chief Executive Officer, Charles Schwab Investment Management, Inc. (2007-present); Director, Charles Schwab Asset Management (Ireland) Limited and Charles Schwab Worldwide Funds PLC. From September 2002 to July 2004, Chief Executive Officer and President, Charles Schwab Investment Management, Inc. and Executive Vice President, Charles Schwab & Co., Inc. | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer, Charles Schwab Investment Management, Inc.; Chief Financial Officer, Laudus Trust and Laudus Variable Insurance Trust; Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited. Through June 2007, Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust; Chief Financial Officer, Mutual Fund Division, UST Advisors, Inc. From December 1999 to November 2004, Sr. Vice President, Financial Reporting, Charles Schwab & Co. Inc. | |
Kimon Daifotis 1959 Senior Vice President and Chief Investment Officer-Fixed Income (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Fixed Income, Charles Schwab Investment Management, Inc. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Jeffrey Mortimer 1963 Senior Vice President and Chief Investment Officer-Equities (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Investment Officer-Equities, Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer, Laudus Trust and Laudus Variable Insurance Trust. Prior to 2004, Vice President and Sr. Portfolio Manager, Charles Schwab Investment Management, Inc. | |
Randall Fillmore 1960 Chief Compliance Officer and AML Officer (Officer of Schwab Capital Trust since 2002.) | Senior Vice President and Chief Compliance Officer, Charles Schwab Investment Management, Inc.; Senior Vice President, Charles Schwab & Co. Inc.; Chief Compliance Officer, Laudus Trust and Laudus Variable Insurance Trust. Through June 2007, Chief Compliance Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust. From 2002 to 2003, Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc. | |
Koji E. Felton 1959 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 1998.) | Senior Vice President, Chief Counsel and Corporate Secretary, Charles Schwab Investment Management, Inc.; Senior Vice President and Deputy General Counsel, Charles Schwab & Co., Inc. Through June 2007, Chief Legal Officer, Excelsior Funds Inc., Excelsior Tax Exempt Funds, Inc. and Excelsior Funds Trust. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc. and Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust; since 2006, Chief Counsel, Laudus Trust and Variable Insurance Trust. Until July 2005, Senior Associate, Paul Hastings Janofsky & Walker LLP. | |
Cathy Sabo 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President-Compliance, Charles Schwab Investment Management, Inc., Laudus Trust and Laudus Variable Insurance Trust. Until 2004, Vice President, Client, Sales & Services Controls, Charles Schwab & Co., Inc. | |
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Officers of the Trust continued | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Michael Haydel 1970 Vice President (Officer of Schwab Capital Trust since 2006.) | Vice President, Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President and AML Officer, Laudus Trust and Laudus Variable Insurance Trust. Until March 2004, Director Charles Schwab & Co., Inc. | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after 20 years of service as a trustee, whichever comes first. Independent trustees elected prior to January 1, 2000 will retire on the following schedule: Messrs. Holmes and Dorward will retire on December 31, 2007, and Messrs. Stephens and Wilsey will retire on December 31, 2010. |
2 | In addition to their employment with the investment advisor and the distributor, Messrs. Schwab and Merk also own stock of The Charles Schwab Corporation. Mr. Schwab and Mr. Merk are Interested Trustees because they are employees of Schwab and/or the advisor. |
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 other officer serves at the pleasure of the Board. |
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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.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500T). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the “coupon rate”) until a specified date (the “maturity date”), at which time the issuer returns the money borrowed (“principal” or “face value”) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
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.
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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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 Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting Schwab’s website at www.schwab.com/schwabfunds, the SEC’s website at 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 Schwab’s website at www.schwab.com/schwabfunds or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fundtm
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 Technology Fundtm
Schwab Fundamental US Large Company Index Fundtm
Schwab Fundamental US Small-Mid Company Index Fundtm
Schwab Fundamental International Large Company Index Fundtm
Schwab Global Real Estate Fundtm
Schwab Institutional Select® S&P 500 Fund
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 Viewpoints Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2020 Fund
Schwab Target 2030 Fund
Schwab Target 2040 Fund
Schwab Retirement Income Fund
Bond Funds
Schwab YieldPlus Fund®
Schwab Short-Term Bond Market Fundtm
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab Inflation Protected Fundtm
Schwab® Premier Income Fund
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free YieldPlus Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity.1 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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For More Information about the Funds:
Investment Adviser
Charles Schwab Investment Management, Inc.
101 Montgomery Street, San Francisco, CA 94104
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.
© 2006 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. Printed on recycled paper. | MFR13812-10 |
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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 William Hasler, Mariann Byerwalter and Donald Stephens, currently serving on its audit committee, are “audit committee financial experts,” as such term is defined in Item 3 of Form N-CSR. Each of these members of Registrant’s audit committee is “independent” under the standards set forth in Item 3 of Form N-CSR.
The designation of each of Messrs. Hasler and Stephens and Ms. Byerwalter 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.
(a) Below are the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
Audit Fees
2006: $816,200 2007 : $943,025
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(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:
2006: $51,331 2007: $60,057
Nature of these services: tax provision review and procedures performed related to Registrant’s service provider conversion.
In each of the last two fiscal years there were no “Audit-Related Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(c) Below are the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.
Tax Fees
For services rendered to Registrant:
2006: $66,642 2007: $68,760
Nature of these services: preparation and review of tax returns.
In each of the last two fiscal years there were no “Tax Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(d) Below are the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
All Other Fees
For services rendered to Registrant:
2006: $12,054 2007: $13,158
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.
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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) The percentage of services described in paragraph (c) of this Item that were approved by the audit committee in 2005 pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X was 10.6% and the dollar amount was $10,901. This $10,901 equals 1.2% of the total fees paid by Registrant to its principal accountant in 2005. None of the services described in paragraphs (b) and (d) of this Item were approved 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.
2006: $282,520 2007: $188,361
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.
2006: $4,176,023 2007: $2,541,476
(h) | During the past fiscal year, all non-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant were pre-approved. Included in the audit committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence. |
Item 5: Audit Committee of Listed Registrants.
Not applicable.
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Item 6: Schedule of Investments.
Except as noted below, the schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form. The schedules of investments for the Schwab Institutional Select S&P 500 Index Fund, Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund are filed under this Item.
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Schwab International Index Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99.1 | % | Common Stock | 1,072,683 | 2,116,778 | ||||||||
0.2 | % | Preferred Stock | 1,902 | 3,761 | ||||||||
0.8 | % | Short-Term Investment | 16,332 | 16,332 | ||||||||
100.1 | % | Total Investments | 1,090,917 | 2,136,871 | ||||||||
8.0 | % | Collateral Invested for Securities on Loan | 171,240 | 171,240 | ||||||||
(8.1 | )% | Other Assets and Liabilities, Net | (172,222 | ) | ||||||||
100.0 | % | Total Net Assets | 2,135,889 |
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Common Stock 99.1% of net assets | ||||||||
Australia 5.2% | ||||||||
Banks 2.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | 302,761 | 8,548 | ||||||
Commonwealth Bank of Australia | 208,546 | 12,011 | ||||||
National Australia Bank Ltd. | 262,211 | 10,608 | ||||||
St. George Bank Ltd. (a) | 91,790 | 3,133 | ||||||
Westpac Banking Corp. | 298,794 | 8,387 | ||||||
42,687 | ||||||||
Capital Goods 0.1% | ||||||||
Wesfarmers Ltd. (a) | 59,508 | 2,449 | ||||||
Commercial Services & Supplies 0.1% | ||||||||
Brambles Ltd. | 236,391 | 3,147 | ||||||
Diversified Financials 0.2% | ||||||||
Macquarie Bank Ltd. (a)* | 41,564 | 3,319 | ||||||
Energy 0.2% | ||||||||
Woodside Petroleum Ltd. | 70,492 | 3,450 | ||||||
Food & Staples Retailing 0.4% | ||||||||
Coles Group Ltd. | 185,781 | 2,804 | ||||||
Woolworths Ltd. | 192,204 | 6,024 | ||||||
8,828 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Foster’s Group Ltd. | 310,703 | 1,855 | ||||||
Insurance 0.4% | ||||||||
AMP Ltd. | 283,951 | 2,719 | ||||||
QBE Insurance Group Ltd. | 132,410 | 4,052 | ||||||
Suncorp-Metway Ltd. | 148,012 | 2,812 | ||||||
9,583 | ||||||||
Materials 1.4% | ||||||||
BHP Billiton Ltd. | 561,860 | 24,466 | ||||||
Rio Tinto Ltd. | 44,243 | 4,592 | ||||||
29,058 | ||||||||
Real Estate 0.3% | ||||||||
Westfield Group | 324,025 | 6,625 | ||||||
111,001 | ||||||||
Austria 0.1% | ||||||||
Banks 0.1% | ||||||||
Erste Bank der oesterreichischen Sparkassen AG | 33,336 | 2,714 | ||||||
Belgium 1.2% | ||||||||
Banks 0.4% | ||||||||
Dexia S.A. | 129,799 | 4,179 | ||||||
KBC GROEP N.V. | 34,679 | 4,875 | ||||||
9,054 | ||||||||
Diversified Financials 0.5% | ||||||||
Fortis — Strip VVPR * | 143,508 | 2 | ||||||
Fortis NPV | 358,772 | 11,522 | ||||||
11,524 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
InBev N.V. | 33,347 | 3,156 | ||||||
Materials 0.1% | ||||||||
Solvay S.A. | 11,315 | 1,723 | ||||||
25,457 | ||||||||
Canada 7.3% | ||||||||
Banks 2.1% | ||||||||
Bank of Montreal | 82,275 | 5,487 | ||||||
Bank of Nova Scotia | 162,452 | 9,197 | ||||||
Canadian Imperial Bank of Commerce | 56,793 | 6,132 | ||||||
National Bank of Canada | 26,520 | 1,534 | ||||||
Royal Bank of Canada | 208,629 | 12,377 | ||||||
The Toronto-Dominion Bank | 118,956 | 8,985 | ||||||
43,712 |
See financial notes. 1
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Schwab International Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Energy 2.2% | ||||||||
Cameco Corp. | 53,209 | 2,622 | ||||||
Canadian Natural Resources Ltd. | 88,025 | 7,320 | ||||||
Enbridge, Inc. | 59,980 | 2,597 | ||||||
EnCana Corp. | 132,106 | 9,244 | ||||||
Imperial Oil Ltd. | 52,047 | 2,835 | ||||||
Nexen, Inc. | 84,914 | 2,875 | ||||||
Petro-Canada | 79,554 | 4,590 | ||||||
Suncor Energy, Inc. | 76,474 | 8,375 | ||||||
Talisman Energy, Inc. | 162,888 | 3,549 | ||||||
TransCanada Corp. | 91,572 | 3,895 | ||||||
47,902 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Shoppers Drug Mart Corp. | 34,748 | 2,037 | ||||||
Insurance 0.9% | ||||||||
Manulife Financial Corp. | 248,015 | 11,602 | ||||||
Power Corp. of Canada | 48,677 | 2,088 | ||||||
Sun Life Financial, Inc. | 97,223 | 5,649 | ||||||
19,339 | ||||||||
Materials 0.9% | ||||||||
Barrick Gold Corp. | 137,399 | 6,109 | ||||||
Goldcorp, Inc. | 107,739 | 3,790 | ||||||
Potash Corp. of Saskatchewan, Inc. | 49,635 | 6,179 | ||||||
Teck Cominco Ltd., Class B | 67,862 | 3,399 | ||||||
19,477 | ||||||||
Real Estate 0.2% | ||||||||
Brookfield Asset Management, Inc., Class A | 76,135 | 3,110 | ||||||
Technology Hardware & Equipment 0.5% | ||||||||
Nortel Networks Corp. * | 70,368 | 1,135 | ||||||
Research In Motion Ltd. * | 78,948 | 9,841 | ||||||
10,976 | ||||||||
Telecommunication Services 0.2% | ||||||||
Rogers Communications, Inc., Class B | 88,703 | 4,521 | ||||||
Transportation 0.2% | ||||||||
Canadian National Railway Co. | 86,466 | 4,850 | ||||||
155,924 | ||||||||
Denmark 0.6% | ||||||||
Banks 0.2% | ||||||||
Danske Bank A/S (a) | 76,837 | 3,401 | ||||||
Pharmaceuticals & Biotechnology 0.2% | ||||||||
Novo Nordisk A/S, Class B | 37,947 | 4,729 | ||||||
Transportation 0.2% | ||||||||
AP Moller — Maersk A/S, Series A | 187 | 2,563 | ||||||
AP Moller — Maersk A/S, Series B | 159 | 2,202 | ||||||
4,765 | ||||||||
12,895 | ||||||||
Finland 1.6% | ||||||||
Insurance 0.1% | ||||||||
Sampo Oyj, Class A (a) | 63,951 | 2,009 | ||||||
Materials 0.2% | ||||||||
Stora Enso Oyj, Class R (a) | 103,510 | 1,910 | ||||||
UPM-Kymmene Oyj | 83,482 | 1,875 | ||||||
3,785 | ||||||||
Technology Hardware & Equipment 1.2% | ||||||||
Nokia Oyj | 653,383 | 25,949 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 68,798 | 2,991 | ||||||
34,734 | ||||||||
France 10.6% | ||||||||
Automobiles & Components 0.5% | ||||||||
Compagnie Generale des Etablissements Michelin, Class B | 23,759 | 3,200 | ||||||
PSA Peugeot Citroen (a) | 28,624 | 2,668 | ||||||
Renault S.A. | 30,704 | 5,186 | ||||||
11,054 | ||||||||
Banks 1.4% | ||||||||
BNP Paribas | 132,707 | 14,708 | ||||||
Credit Agricole S.A. (a) | 120,954 | 4,792 | ||||||
Societe Generale | 64,365 | 10,874 | ||||||
30,374 | ||||||||
Capital Goods 1.1% | ||||||||
Alstom | 16,016 | 3,798 | ||||||
Compagnie de Saint-Gobain | 58,875 | 6,345 | ||||||
Schneider Electric S.A. | 38,335 | 5,303 | ||||||
Vallourec S.A. | 5,738 | 1,671 | ||||||
Vinci S.A. | 75,896 | 6,263 | ||||||
23,380 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
LVMH Moet Hennessy Louis Vuitton S.A. (a) | 40,824 | 5,274 | ||||||
Consumer Services 0.2% | ||||||||
Accor S.A. | 37,106 | 3,555 | ||||||
Energy 1.5% | ||||||||
Total S.A. (a) | 391,245 | 31,572 | ||||||
Food & Staples Retailing 0.3% | ||||||||
Carrefour S.A. | 96,720 | 6,989 |
2 See financial notes.
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Schwab International Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Groupe Danone (a) | 83,440 | 7,181 | ||||||
Pernod Ricard S.A. (a) | 18,257 | 4,228 | ||||||
11,409 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Essilor International S.A. (a) | 32,662 | 2,087 | ||||||
Household & Personal Products 0.3% | ||||||||
L’Oreal S.A. | 40,437 | 5,323 | ||||||
Insurance 0.6% | ||||||||
Axa (a) | 294,219 | 13,215 | ||||||
Materials 0.5% | ||||||||
Air Liquide S.A. (a) | 37,896 | 5,234 | ||||||
Lafarge S.A. | 27,323 | 4,467 | ||||||
9,701 | ||||||||
Media 0.5% | ||||||||
Lagardere S.C.A. | 22,134 | 1,877 | ||||||
Vivendi | 181,776 | 8,215 | ||||||
10,092 | ||||||||
Pharmaceuticals & Biotechnology 0.7% | ||||||||
Sanofi-Aventis | 159,066 | 13,992 | ||||||
Real Estate 0.1% | ||||||||
Unibail (a) | 12,110 | 3,024 | ||||||
Retailing 0.1% | ||||||||
Prinault-Printemps-Redoute S.A. | 12,173 | 2,421 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
Alcatel-Lucent | 358,710 | 3,487 | ||||||
Telecommunication Services 0.7% | ||||||||
Bouygues S.A. | 42,577 | 4,109 | ||||||
France Telecom S.A. | 288,588 | 10,672 | ||||||
14,781 | ||||||||
Utilities 1.1% | ||||||||
Electricite de France (EDF) (a) | 39,070 | 4,700 | ||||||
Suez S.A. | 210,302 | 13,721 | ||||||
Veolia Environnement | 59,976 | 5,369 | ||||||
23,790 | ||||||||
225,520 | ||||||||
Germany 8.8% | ||||||||
Automobiles & Components 1.5% | ||||||||
Bayerische Motoren Werke (BMW) AG | 54,349 | 3,637 | ||||||
Continental AG | 22,867 | 3,458 | ||||||
DaimlerChrysler AG — Reg’d | 171,504 | 18,763 | ||||||
Volkswagen AG | 25,393 | 7,259 | ||||||
33,117 | ||||||||
Banks 0.2% | ||||||||
Commerzbank AG | 105,004 | 4,449 | ||||||
Capital Goods 1.1% | ||||||||
MAN AG | 19,617 | 3,508 | ||||||
Siemens AG — Reg’d | 148,578 | 20,147 | ||||||
23,655 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Adidas AG | 34,078 | 2,273 | ||||||
Diversified Financials 0.8% | ||||||||
Deutsche Bank AG — Reg’d (a) | 85,135 | 11,320 | ||||||
Deutsche Boerse AG | 33,200 | 5,230 | ||||||
16,550 | ||||||||
Insurance 1.1% | ||||||||
Allianz SE-Reg’d | 73,400 | 16,528 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG — Reg’d | 36,694 | 7,044 | ||||||
23,572 | ||||||||
Materials 1.3% | ||||||||
BASF AG | 81,412 | 11,271 | ||||||
Bayer AG (a) | 127,406 | 10,636 | ||||||
Linde AG | 19,486 | 2,469 | ||||||
ThyssenKrupp AG | 66,828 | 4,451 | ||||||
28,827 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Infineon Technologies AG * | 111,699 | 1,640 | ||||||
Software & Services 0.4% | ||||||||
SAP AG | 146,240 | 7,908 | ||||||
Telecommunication Services 0.5% | ||||||||
Deutsche Telekom AG — Reg’d | 485,962 | 9,977 | ||||||
Transportation 0.2% | ||||||||
Deutsche Post AG — Reg’d | 125,827 | 3,813 | ||||||
Utilities 1.5% | ||||||||
E.ON AG | 113,017 | 22,095 | ||||||
RWE AG | 74,676 | 10,201 | ||||||
32,296 | ||||||||
188,077 | ||||||||
Greece 0.3% | ||||||||
Banks 0.3% | ||||||||
Alpha Bank A.E. | 65,044 | 2,415 |
See financial notes. 3
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Schwab International Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
National Bank of Greece S.A. | 58,220 | 4,068 | ||||||
6,483 | ||||||||
6,483 | ||||||||
Hong Kong 1.2% | ||||||||
Banks 0.1% | ||||||||
Hang Seng Bank Ltd. | 121,836 | 2,489 | ||||||
Capital Goods 0.2% | ||||||||
Hutchison Whampoa Ltd. | 336,370 | 4,228 | ||||||
Diversified Financials 0.3% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 185,018 | 6,177 | ||||||
Real Estate 0.5% | ||||||||
Cheung Kong (Holdings) Ltd. | 244,628 | 4,798 | ||||||
Sun Hung Kai Properties Ltd. | 210,604 | 4,025 | ||||||
Swire Pacific Ltd., Class A | 167,890 | 2,398 | ||||||
11,221 | ||||||||
Utilities 0.1% | ||||||||
CLP Holdings Ltd. | 270,080 | 1,825 | ||||||
25,940 | ||||||||
Ireland 0.6% | ||||||||
Banks 0.4% | ||||||||
Allied Irish Banks plc | 138,658 | 3,496 | ||||||
Anglo Irish Bank Corp., plc | 124,065 | 2,094 | ||||||
Bank of Ireland | 155,007 | 2,857 | ||||||
8,447 | ||||||||
Materials 0.2% | ||||||||
CRH plc | 87,100 | 3,360 | ||||||
11,807 | ||||||||
Italy 3.7% | ||||||||
Automobiles & Components 0.1% | ||||||||
Fiat S.p.A. (a) | 103,597 | 3,359 | ||||||
Banks 1.6% | ||||||||
Banco Popolare Scarl * | 109,760 | 2,634 | ||||||
Intesa Sanpaolo S.p.A. | 1,516,907 | 12,034 | ||||||
UniCredito Italiano S.p.A. | 1,999,127 | 17,197 | ||||||
Unione di Banche Italiane S.C.p.A. | 102,112 | 2,847 | ||||||
34,712 | ||||||||
Energy 0.7% | ||||||||
Eni S.p.A. | 409,247 | 14,943 | ||||||
Insurance 0.4% | ||||||||
Assicurazioni Generali S.p.A. | 200,193 | 9,541 | ||||||
Media 0.1% | ||||||||
Mediaset S.p.A. | 110,368 | 1,145 | ||||||
Telecommunication Services 0.4% | ||||||||
Telecom Italia RNC S.p.A. | 963,731 | 2,496 | ||||||
Telecom Italia S.p.A. | 1,808,111 | 5,666 | ||||||
8,162 | ||||||||
Utilities 0.4% | ||||||||
Enel S.p.A. | 673,205 | 8,072 | ||||||
79,934 | ||||||||
Japan 15.1% | ||||||||
Automobiles & Components 2.1% | ||||||||
Bridgestone Corp. | 91,657 | 2,029 | ||||||
Denso Corp. | 71,600 | 2,909 | ||||||
Honda Motor Co., Ltd. | 251,039 | 9,401 | ||||||
Nissan Motors Co., Ltd. | 337,196 | 3,868 | ||||||
Toyota Motor Corp. | 451,003 | 25,817 | ||||||
44,024 | ||||||||
Banks 2.1% | ||||||||
Mitsubishi UFJ Financial Group, Inc. | 1,632,070 | 16,331 | ||||||
Mitsui Trust Holdings, Inc. | 129,000 | 1,032 | ||||||
Mizuho Financial Group, Inc. | 1,821 | 10,235 | ||||||
Resona Holdings, Inc. | 948 | 1,699 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 1,436 | 11,763 | ||||||
The Bank of Yokohama Ltd. | 214,000 | 1,518 | ||||||
The Sumitomo Trust & Banking Co., Ltd. | 253,950 | 1,893 | ||||||
44,471 | ||||||||
Capital Goods 1.8% | ||||||||
Asahi Glass Co., Ltd. (a) | 143,000 | 1,969 | ||||||
Fanuc Ltd. | 32,300 | 3,541 | ||||||
Itochu Corp. | 237,000 | 2,995 | ||||||
Komatsu Ltd. | 140,609 | 4,714 | ||||||
Mitsubishi Corp. | 227,000 | 7,068 | ||||||
Mitsubishi Electric Corp. (a) | 303,000 | 3,694 | ||||||
Mitsubishi Heavy Industries Ltd. | 565,000 | 3,290 | ||||||
Mitsui & Co., Ltd. | 254,000 | 6,588 | ||||||
Sumitomo Corp. | 188,000 | 3,276 | ||||||
Sumitomo Electric Industries Ltd. | 124,000 | 2,008 | ||||||
39,143 | ||||||||
Commercial Services & Supplies 0.1% | ||||||||
Dai Nippon Printing Co., Ltd. | 87,000 | 1,263 | ||||||
Secom Co., Ltd | 38,500 | 1,981 | ||||||
3,244 | ||||||||
Consumer Durables & Apparel 0.8% | ||||||||
Matsushita Electric Industrial Co., Ltd. | 328,912 | 6,281 | ||||||
Sharp Corp. | 144,785 | 2,284 |
4 See financial notes.
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Sony Corp. | 167,500 | 8,272 | ||||||
16,837 | ||||||||
Diversified Financials 0.5% | ||||||||
Daiwa Securities Group, Inc. | 202,045 | 1,947 | ||||||
Nikko Cordial Corp. | 63,000 | 902 | ||||||
Nomura Holdings, Inc. | 311,000 | 5,542 | ||||||
ORIX Corp. | 16,000 | 3,282 | ||||||
11,673 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Aeon Co., Ltd. | 106,200 | 1,672 | ||||||
Seven & I Holdings Co., Ltd. | 133,203 | 3,439 | ||||||
5,111 | ||||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Japan Tobacco, Inc. | 750 | 4,371 | ||||||
Kirin Brewery Co., Ltd. | 136,000 | 1,901 | ||||||
6,272 | ||||||||
Household & Personal Products 0.1% | ||||||||
Kao Corp. (a) | 78,619 | 2,255 | ||||||
Insurance 0.5% | ||||||||
Millea Holdings, Inc. | 129,500 | 5,097 | ||||||
Mitsui Sumitomo Insurance Co., Ltd. | 211,875 | 2,430 | ||||||
Sompo Japan Insurance, Inc. | 140,920 | 1,657 | ||||||
T&D Holdings, Inc. | 37,000 | 2,227 | ||||||
11,411 | ||||||||
Materials 1.0% | ||||||||
JFE Holdings, Inc. | 91,000 | 5,327 | ||||||
Nippon Steel Corp. | 969,000 | 6,440 | ||||||
Shin-Etsu Chemical Co., Ltd. | 58,280 | 3,738 | ||||||
Sumitomo Chemical Co., Ltd. | 229,000 | 2,036 | ||||||
Sumitomo Metal Industries, Ltd. (a) | 658,000 | 3,257 | ||||||
20,798 | ||||||||
Pharmaceuticals & Biotechnology 0.8% | ||||||||
Astellas Pharma, Inc. | 79,370 | 3,523 | ||||||
Daiichi Sankyo Co., Ltd. | 105,500 | 3,000 | ||||||
Eisai Co., Ltd. (a) | 45,000 | 1,890 | ||||||
Takeda Pharmaceutical Co., Ltd. | 130,200 | 8,133 | ||||||
16,546 | ||||||||
Real Estate 0.5% | ||||||||
Mitsubishi Estate Co., Ltd. | 195,502 | 5,861 | ||||||
Mitsui Fudosan Co., Ltd. | 125,777 | 3,480 | ||||||
Sumitomo Realty & Development Co., Ltd. | 66,000 | 2,329 | ||||||
11,670 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Rohm Co., Ltd. (a) | 19,112 | 1,675 | ||||||
Tokyo Electron Ltd. | 28,000 | 1,644 | ||||||
3,319 | ||||||||
Software & Services 0.5% | ||||||||
Nintendo Co., Ltd. | 18,239 | 11,583 | ||||||
Technology Hardware & Equipment 1.7% | ||||||||
Canon, Inc. | 197,995 | 10,018 | ||||||
FUJIFILM Holdings Corp. | 79,811 | 3,818 | ||||||
Fujitsu Ltd. | 326,000 | 2,560 | ||||||
Hitachi Ltd. | 487,079 | 3,262 | ||||||
Hoya Corp. (a) | 69,607 | 2,535 | ||||||
Kyocera Corp. | 24,500 | 2,082 | ||||||
Murata Manufacturing Co., Ltd. (a) | 32,574 | 1,982 | ||||||
NEC Corp. (a) | 327,000 | 1,626 | ||||||
Ricoh Co., Ltd. | 94,000 | 1,858 | ||||||
Tdk Corp. | 22,000 | 1,806 | ||||||
Toshiba Corp. (a) | 471,178 | 3,990 | ||||||
35,537 | ||||||||
Telecommunication Services 0.7% | ||||||||
KDDI Corp. | 519 | 3,923 | ||||||
Nippon Telegraph & Telephone Corp. | 865 | 3,959 | ||||||
NTT DoCoMo, Inc. | 2,615 | 3,804 | ||||||
Softbank Corp. | 109,000 | 2,546 | ||||||
14,232 | ||||||||
Transportation 0.5% | ||||||||
Central Japan Railway Co. | 272 | 2,814 | ||||||
East Japan Railway Co. | 562 | 4,630 | ||||||
Mitsui O.S.K. Lines, Ltd. | 175,000 | 2,892 | ||||||
10,336 | ||||||||
Utilities 0.7% | ||||||||
Chubu Electric Power Co., Inc. | 102,100 | 2,616 | ||||||
Kyushu Electric Power Co., Inc. | 58,493 | 1,426 | ||||||
The Kansai Electric Power Co., Inc. | 130,000 | 2,928 | ||||||
The Tokyo Electric Power Co., Inc. | 181,890 | 4,615 | ||||||
Tohoku Electric Power Co., Inc. | 66,800 | 1,412 | ||||||
Tokyo Gas Co., Ltd. | 394,201 | 1,757 | ||||||
14,754 | ||||||||
323,216 | ||||||||
Luxembourg 0.5% | ||||||||
Materials 0.5% | ||||||||
ArcelorMittal | 98,640 | 7,959 |
See financial notes. 5
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
ArcelorMittal N.V. (a) | 26,262 | 2,104 | ||||||
10,063 | ||||||||
Netherlands 3.3% | ||||||||
Capital Goods 0.1% | ||||||||
European Aeronautic Defence & Space Co. | 61,252 | 2,088 | ||||||
Consumer Durables & Apparel 0.4% | ||||||||
Koninklijke (Royal) Philips Electronics N.V. | 201,710 | 8,345 | ||||||
Diversified Financials 0.8% | ||||||||
ING Groep N.V. — CVA | 360,281 | 16,284 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Koninklijke Ahold N.V. * | 222,779 | 3,357 | ||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Heineken N.V. | 43,960 | 3,086 | ||||||
Royal Numico N.V. (b) | 35,560 | 2,835 | ||||||
Unilever N.V. CVA (a) | 284,378 | 9,256 | ||||||
15,177 | ||||||||
Insurance 0.2% | ||||||||
Aegon N.V. | 212,115 | 4,397 | ||||||
Materials 0.3% | ||||||||
Akzo Nobel N.V. | 48,600 | 3,917 | ||||||
Koninklijke DSM N.V. (a) | 40,985 | 2,328 | ||||||
6,245 | ||||||||
Media 0.1% | ||||||||
Reed Elsevier N.V. | 132,985 | 2,585 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASML Holding N.V. (a)* | 77,935 | 2,714 | ||||||
Telecommunication Services 0.3% | ||||||||
Koninklijke (Royal) KPN N.V. | 339,449 | 6,409 | ||||||
Transportation 0.1% | ||||||||
TNT N.V. | 79,757 | 3,273 | ||||||
70,874 | ||||||||
Norway 0.6% | ||||||||
Banks 0.1% | ||||||||
DnB NOR A.S.A. | 117,439 | 1,946 | ||||||
Energy 0.4% | ||||||||
Norsk Hydro A.S.A. | 118,680 | 1,745 | ||||||
Statoil A.S.A. | 206,245 | 7,026 | ||||||
8,771 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. (a)* | 117,795 | 2,774 | ||||||
13,491 | ||||||||
Portugal 0.4% | ||||||||
Banks 0.2% | ||||||||
Banco Comercial Portugues S.A. — Reg’d (a) | 622,781 | 3,041 | ||||||
Media 0.0% | ||||||||
PT Multimedia-Servicos de Telecomunicacoes e Multimedia, SGPS, S.A. | 26,213 | 357 | ||||||
Telecommunication Services 0.1% | ||||||||
Portugal Telecom SGPS S.A. — Reg’d | 186,107 | 2,498 | ||||||
Utilities 0.1% | ||||||||
EDP — Energias de Portugal S.A. (a) | 391,312 | 2,521 | ||||||
8,417 | ||||||||
Singapore 0.5% | ||||||||
Banks 0.4% | ||||||||
DBS Group Holdings Ltd. | 175,246 | 2,743 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 437,552 | 2,809 | ||||||
United Overseas Bank Ltd. | 214,682 | 3,220 | ||||||
8,772 | ||||||||
Telecommunication Services 0.1% | ||||||||
Singapore Telecommunications Ltd. | 926,196 | 2,634 | ||||||
11,406 | ||||||||
Spain 4.6% | ||||||||
Banks 2.0% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 585,315 | 14,813 | ||||||
Banco de Sabadell S.A. | 185,508 | 1,888 | ||||||
Banco Popular Espanol S.A. | 197,744 | 3,470 | ||||||
Banco Santander Central Hispano S.A. | 1,035,917 | 22,655 | ||||||
42,826 | ||||||||
Capital Goods 0.1% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 37,491 | 2,328 | ||||||
Energy 0.3% | ||||||||
Repsol YPF S.A. | 154,504 | 6,104 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Altadis S.A. | 42,027 | 2,997 | ||||||
Retailing 0.2% | ||||||||
Industria de Diseno Textil S.A. | 41,211 | 3,081 |
6 See financial notes.
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Telecommunication Services 1.3% | ||||||||
Telefonica S.A. | 810,211 | 26,827 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 77,101 | 2,578 | ||||||
Utilities 0.5% | ||||||||
Endesa S.A. | 154,836 | 8,057 | ||||||
Iberdrola S.A. * | 163,736 | 2,632 | ||||||
10,689 | ||||||||
97,430 | ||||||||
Sweden 1.8% | ||||||||
Banks 0.6% | ||||||||
Nordea Bank AB | 346,815 | 6,212 | ||||||
Skandinaviska Enskilda Banken AB (SEB), Class A | 92,075 | 2,835 | ||||||
Svenska Handelsbanken AB, Class A | 82,642 | 2,748 | ||||||
Swedbank AB, Class A (a) | 64,379 | 2,023 | ||||||
13,818 | ||||||||
Capital Goods 0.3% | ||||||||
Sandvik AB | 179,447 | 3,410 | ||||||
Volvo AB, Class B | 188,427 | 3,705 | ||||||
7,115 | ||||||||
Diversified Financials 0.1% | ||||||||
Investor AB, Shares B | 68,068 | 1,692 | ||||||
Retailing 0.3% | ||||||||
Hennes & Mauritz AB, Class B | 82,506 | 5,513 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Telefonaktiebolaget LM Ericsson, Class B | 2,414,296 | 7,224 | ||||||
Telecommunication Services 0.2% | ||||||||
TeliaSonera AB | 320,134 | 3,158 | ||||||
38,520 | ||||||||
Switzerland 7.1% | ||||||||
Capital Goods 0.5% | ||||||||
ABB Ltd. — Reg’d | 375,699 | 11,358 | ||||||
Consumer Durables & Apparel 0.2% | ||||||||
Compagnie Financiere Richemont SA, Series A | 40,983 | 2,931 | ||||||
Diversified Financials 1.5% | ||||||||
Credit Suisse Group — Reg’d | 201,032 | 13,585 | ||||||
UBS AG — Reg’d | 342,352 | 18,354 | ||||||
31,939 | ||||||||
Food, Beverage & Tobacco 1.4% | ||||||||
Nestle S.A. — Reg’d | 65,630 | 30,313 | ||||||
Insurance 0.6% | ||||||||
Swiss Re — Reg’d | 62,331 | 5,860 | ||||||
Zurich Financial Services AG — Reg’d | 24,047 | 7,261 | ||||||
13,121 | ||||||||
Materials 0.7% | ||||||||
Holcim Ltd. — Reg’d | 33,439 | 3,823 | ||||||
Syngenta AG — Reg’d | 16,162 | 3,909 | ||||||
Xstrata plc | 100,849 | 7,272 | ||||||
15,004 | ||||||||
Pharmaceuticals & Biotechnology 2.0% | ||||||||
Novartis AG — Reg’d | 447,192 | 23,788 | ||||||
Roche Holding AG — Genusschein | 115,224 | 19,681 | ||||||
43,469 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
STMicroelectronics N.V. (a) | 99,193 | 1,697 | ||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG — Reg’d | 4,232 | 1,566 | ||||||
151,398 | ||||||||
United Kingdom 23.1% | ||||||||
Banks 4.6% | ||||||||
Barclays plc | 1,071,184 | 13,557 | ||||||
HBOS plc | 605,157 | 11,031 | ||||||
HSBC Holdings plc | 1,921,805 | 38,103 | ||||||
Lloyds TSB Group plc | 930,003 | 10,564 | ||||||
Royal Bank of Scotland Group plc | 1,626,109 | 17,562 | ||||||
Standard Chartered plc | 195,106 | 7,589 | ||||||
98,406 | ||||||||
Capital Goods 0.6% | ||||||||
BAE Systems plc | 553,004 | 5,745 | ||||||
Rolls-Royce Group plc * | 309,529 | 3,473 | ||||||
Rolls-Royce Group plc, B Shares * | 12,504,971 | 26 | ||||||
Smiths Group plc | 57,467 | 1,352 | ||||||
Wolseley plc | 100,048 | 1,740 | ||||||
12,336 | ||||||||
Commercial Services & Supplies 0.1% | ||||||||
Experian Group Ltd. | 178,990 | 1,882 | ||||||
Consumer Services 0.2% | ||||||||
Carnival plc | 30,775 | 1,441 | ||||||
Compass Group plc | 328,860 | 2,372 | ||||||
3,813 |
See financial notes. 7
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Diversified Financials 0.3% | ||||||||
3i Group plc | 67,451 | 1,526 | ||||||
Man Group plc | 305,124 | 3,750 | ||||||
5,276 | ||||||||
Energy 4.5% | ||||||||
BG Group plc | 556,473 | 10,317 | ||||||
BP plc | 3,155,561 | 41,054 | ||||||
Royal Dutch Shell plc, Class A (a) | 588,320 | 25,813 | ||||||
Royal Dutch Shell plc, Class B | 454,943 | 19,849 | ||||||
97,033 | ||||||||
Food & Staples Retailing 0.9% | ||||||||
J Sainsbury plc | 253,705 | 2,892 | ||||||
Tesco plc | 1,290,117 | 13,124 | ||||||
William Morrison Supermarkets plc | 347,379 | 2,144 | ||||||
18,160 | ||||||||
Food, Beverage & Tobacco 1.9% | ||||||||
British American Tobacco plc | 232,940 | 8,875 | ||||||
Cadbury Schweppes plc | 343,491 | 4,569 | ||||||
Diageo plc | 440,768 | 10,113 | ||||||
Imperial Tobacco Group plc | 106,921 | 5,427 | ||||||
SABMiller plc | 129,675 | 3,906 | ||||||
Unilever plc | 214,819 | 7,284 | ||||||
40,174 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Smith & Nephew plc | 175,479 | 2,376 | ||||||
Household & Personal Products 0.3% | ||||||||
Reckitt Benckiser Group plc | 101,843 | 5,916 | ||||||
Insurance 1.0% | ||||||||
Aviva plc | 425,163 | 6,699 | ||||||
Legal & General Group plc | 992,966 | 2,899 | ||||||
Old Mutual plc (a) | 874,614 | 3,357 | ||||||
Prudential plc | 394,603 | 6,446 | ||||||
Standard Life plc | 317,165 | 1,882 | ||||||
21,283 | ||||||||
Materials 2.3% | ||||||||
Anglo American plc | 218,499 | 15,198 | ||||||
BHP Billiton plc | 385,794 | 14,816 | ||||||
Imperial Chemical Industries plc | 178,135 | 2,444 | ||||||
Mondi Ltd. * | 24,010 | 236 | ||||||
Mondi plc | 60,027 | 556 | ||||||
Rio Tinto plc | 167,659 | 15,722 | ||||||
48,972 | ||||||||
Media 0.6% | ||||||||
British Sky Broadcasting Group plc | 195,898 | 2,774 | ||||||
Pearson plc | 143,637 | 2,396 | ||||||
Reed Elsevier plc | 192,191 | 2,521 | ||||||
Reuters Group plc | 196,728 | 2,712 | ||||||
WPP Group plc | 214,518 | 2,935 | ||||||
13,338 | ||||||||
Pharmaceuticals & Biotechnology 1.8% | ||||||||
AstraZeneca plc | 245,264 | 12,078 | ||||||
GlaxoSmithKline plc | 941,879 | 24,193 | ||||||
Shire plc | 92,033 | 2,305 | ||||||
38,576 | ||||||||
Real Estate 0.2% | ||||||||
British Land Co., plc | 90,252 | 2,042 | ||||||
Land Securities Group plc | 75,040 | 2,573 | ||||||
4,615 | ||||||||
Retailing 0.2% | ||||||||
Kingfisher plc | 351,895 | 1,448 | ||||||
Marks & Spencer Group plc | 275,748 | 3,749 | ||||||
5,197 | ||||||||
Telecommunication Services 2.0% | ||||||||
BT Group plc | 1,365,430 | 9,281 | ||||||
Vodafone Group plc | 8,644,390 | 34,064 | ||||||
43,345 | ||||||||
Utilities 1.5% | ||||||||
Centrica plc | 579,112 | 4,451 | ||||||
Iberdrola S.A. | 819,620 | 13,222 | ||||||
National Grid plc | 449,936 | 7,442 | ||||||
Scottish & Southern Energy plc | 146,282 | 4,744 | ||||||
United Utilities plc | 139,438 | 2,120 | ||||||
31,979 | ||||||||
492,677 | ||||||||
United States 0.9% | ||||||||
Diversified Financials 0.9% | ||||||||
iShares MSCI EAFE Index Fund | 200,000 | 17,236 | ||||||
NYSE Euronext * | 16,515 | 1,564 | ||||||
18,800 | ||||||||
Total Common Stock | ||||||||
(Cost $1,072,683) | 2,116,778 | |||||||
Preferred Stock 0.2% of net assets | ||||||||
Germany 0.2% | ||||||||
Porsche AG | 1,411 | 3,761 | ||||||
Total Preferred Stock | ||||||||
(Cost $1,902) | 3,761 | |||||||
8 See financial notes.
Table of Contents
Schwab International Index Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||||||
Short-Term Investment 0.8% of net assets | ||||||||||||
Wells Fargo, Grand Cayman Time Deposit 4.75%, 11/01/07 | 16,332 | 16,332 | ||||||||||
Total Short-Term Investments (Cost $16,332) | 16,332 | |||||||||||
End of Investments.
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 8.0% of net assets | ||||||||
Securities Lending Invesments Fund, a series of the Brown Brothers Investment Trust | 171,239,558 | 171,240 | ||||||
End of collateral invested for securities on loan.
At 10/31/07, the tax basis cost of the fund’s investments was $1,106,071, and the unrealized appreciation and depreciation were $1,060,276 and ($29,476), respectively, with a net unrealized appreciation of $1,030,800.
At 10/31/07, the values of certain foreign securities held by the fund aggregating $1,940,391 were adjusted from their closing market values following the guidelines adopted by the fund’s Board of Trustees.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | Fair-valued by Management. |
See financial notes. 9
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
98.5 | % | Common Stock | 1,372,632 | 1,698,058 | ||||||||
0.6 | % | Foreign Common Stock | 9,379 | 10,165 | ||||||||
0.9 | % | Short-Term Investments | 15,171 | 15,171 | ||||||||
100.0 | % | Total Investments | 1,397,182 | 1,723,394 | ||||||||
35.3 | % | Collateral Invested for Securities on Loan | 609,313 | 609,313 | ||||||||
(35.3 | )% | Other Assets and Liabilities, Net | (608,174 | ) | ||||||||
100.0 | % | Total Net Assets | 1,724,533 |
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Common Stock 98.5% of net assets | ||||||||
Automobiles & Components 1.1% | ||||||||
American Axle & Manufacturing Holdings, Inc. | 73,685 | 2,023 | ||||||
ArvinMeritor, Inc. (a) | 118,112 | 1,752 | ||||||
Cooper Tire & Rubber Co. | 103,123 | 2,298 | ||||||
Drew Industries, Inc. * | 31,813 | 1,259 | ||||||
Fleetwood Enterprises, Inc. (a)* | 104,244 | 938 | ||||||
Modine Manufacturing Co. (a) | 52,491 | 1,221 | ||||||
Sauer-Danfoss, Inc. (a) | 30,000 | 777 | ||||||
Tenneco, Inc. * | 73,718 | 2,257 | ||||||
Thor Industries, Inc. (a) | 55,964 | 2,686 | ||||||
TRW Automotive Holdings Corp. * | 58,343 | 1,732 | ||||||
Visteon Corp. * | 207,600 | 1,318 | ||||||
Winnebago Industries, Inc. (a) | 51,930 | 1,339 | ||||||
19,600 | ||||||||
Banks 6.6% | ||||||||
1st Source Corp. | 9,321 | 179 | ||||||
Alabama National Bancorp | 23,882 | 1,882 | ||||||
AMCORE Financial, Inc. | 36,593 | 868 | ||||||
Anchor BanCorp Wisconsin, Inc. (a) | 30,587 | 752 | ||||||
BancFirst Corp. (a) | 13,416 | 610 | ||||||
BancorpSouth, Inc. (a) | 114,368 | 2,775 | ||||||
Bank Mutual Corp. (a) | 92,793 | 1,031 | ||||||
BankAtlantic Bancorp, Inc., Class A (a) | 73,834 | 303 | ||||||
BankUnited Financial Corp., Class A (a) | 48,313 | 417 | ||||||
BOK Financial Corp. (a) | 36,306 | 1,980 | ||||||
Boston Private Financial Holdings, Inc. (a) | 61,772 | 1,777 | ||||||
Brookline Bancorp, Inc. (a) | 87,696 | 944 | ||||||
Cascade Bancorp (a) | 35,800 | 689 | ||||||
Cathay General Bancorp (a) | 74,622 | 2,311 | ||||||
Centennial Bank Holdings, Inc. * | 88,065 | 484 | ||||||
Centerline Holding Co. (a) | 75,523 | 1,042 | ||||||
Central Pacific Financial Corp. (a) | 49,532 | 1,111 | ||||||
Charter Financial Corp. | 3,000 | 152 | ||||||
Chemical Financial Corp. (a) | 41,203 | 1,030 | ||||||
Chittenden Corp. | 66,724 | 2,377 | ||||||
Citizens Republic Bancorp, Inc. (a) | 108,328 | 1,649 | ||||||
City Holding Co. | 31,200 | 1,180 | ||||||
Community Bank System, Inc. (a) | 50,200 | 1,050 | ||||||
Corus Bankshares, Inc. (a) | 55,148 | 608 | ||||||
CVB Financial Corp. (a) | 96,719 | 1,134 | ||||||
Downey Financial Corp. (a) | 29,930 | 1,219 | ||||||
F.N.B. Corp. (a) | 94,537 | 1,571 | ||||||
First BanCorp Puerto Rico (a) | 128,177 | 1,127 | ||||||
First Charter Corp. | 45,158 | 1,368 | ||||||
First Citizens BancShares, Inc., Class A | 12,265 | 1,997 | ||||||
First Commonwealth Financial Corp. (a) | 89,156 | 1,024 | ||||||
First Community Bancorp (a) | 33,716 | 1,642 | ||||||
First Financial Bancorp (a) | 61,089 | 718 | ||||||
First Financial Bankshares, Inc. | 30,321 | 1,183 | ||||||
First Midwest Bancorp, Inc. (a) | 74,463 | 2,508 | ||||||
First Niagara Financial Group, Inc. (a) | 177,436 | 2,342 | ||||||
FirstFed Financial Corp. (a)* | 27,495 | 1,176 | ||||||
FirstMerit Corp. | 123,282 | 2,614 | ||||||
Flagstar Bancorp, Inc. (a) | 52,630 | 426 | ||||||
Fremont General Corp. (a) | 86,162 | 239 | ||||||
Frontier Financial Corp. (a) | 53,785 | 1,194 | ||||||
Glacier Bancorp, Inc. (a) | 77,111 | 1,568 | ||||||
Hancock Holding Co. (a) | 45,710 | 1,738 | ||||||
Hanmi Financial Corp. (a) | 66,588 | 734 | ||||||
IBERIABANK Corp. | 17,100 | 848 | ||||||
International Bancshares Corp. | 82,195 | 1,797 | ||||||
Kearny Financial Corp. (a) | 55,000 | 729 | ||||||
MB Financial, Inc. (a) | 43,824 | 1,461 | ||||||
National Penn Bancshares, Inc. (a) | 77,578 | 1,308 | ||||||
NBT Bancorp, Inc. (a) | 56,685 | 1,398 | ||||||
NewAlliance Bancshares, Inc. (a) | 147,911 | 2,069 | ||||||
Northwest Bancorp, Inc. (a) | 37,693 | 1,110 |
See financial notes. 1
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Old National Bancorp (a) | 105,883 | 1,769 | ||||||
Pacific Capital Bancorp (a) | 66,442 | 1,377 | ||||||
Park National Corp. (a) | 16,953 | 1,344 | ||||||
PFF Bancorp, Inc. (a) | 30,461 | 324 | ||||||
PrivateBancorp, Inc. (a) | 25,876 | 729 | ||||||
Prosperity Bancshares, Inc. (a) | 48,065 | 1,553 | ||||||
Provident Bankshares Corp. (a) | 46,969 | 1,159 | ||||||
Provident Financial Services, Inc. (a) | 86,751 | 1,374 | ||||||
Provident New York Bancorp (a) | 68,700 | 873 | ||||||
S&T Bancorp, Inc. (a) | 34,881 | 1,155 | ||||||
Santander BanCorp (a) | 76,503 | 1,048 | ||||||
Signature Bank (a)* | 48,309 | 1,650 | ||||||
Sterling Bancshares, Inc. | 119,912 | 1,463 | ||||||
Sterling Financial Corp. | 49,700 | 912 | ||||||
Sterling Financial Corp., Washington | 75,747 | 1,704 | ||||||
Susquehanna Bancshares, Inc. (a) | 85,208 | 1,719 | ||||||
SVB Financial Group (a)* | 58,123 | 3,010 | ||||||
The South Financial Group, Inc. (a) | 120,725 | 2,494 | ||||||
TrustCo Bank Corp. NY (a) | 120,802 | 1,273 | ||||||
Trustmark Corp. | 79,677 | 2,150 | ||||||
UCBH Holdings, Inc. (a) | 155,725 | 2,658 | ||||||
UMB Financial Corp. (a) | 52,524 | 2,206 | ||||||
Umpqua Holdings Corp. (a) | 102,795 | 1,740 | ||||||
United Bankshares, Inc. (a) | 56,322 | 1,707 | ||||||
United Community Banks, Inc. (a) | 66,240 | 1,467 | ||||||
W Holding Co., Inc. (a) | 177,614 | 373 | ||||||
Washington Federal, Inc. | 137,039 | 3,311 | ||||||
Wells Fargo & Co. | 31,999 | 1,088 | ||||||
WesBanco, Inc. (a) | 38,698 | 893 | ||||||
Westamerica Bancorp (a) | 46,670 | 2,244 | ||||||
Western Alliance Bancorp (a)* | 19,631 | 446 | ||||||
Wintrust Financial Corp. (a) | 36,555 | 1,343 | ||||||
113,999 | ||||||||
Capital Goods 9.9% | ||||||||
A.O. Smith Corp. (a) | 36,730 | 1,373 | ||||||
AAR Corp. (a)* | 61,597 | 1,974 | ||||||
Actuant Corp., Class A | 46,574 | 3,213 | ||||||
Albany International Corp., Class A (a) | 37,700 | 1,414 | ||||||
Applied Industrial Technologies, Inc. | 60,166 | 2,133 | ||||||
Armstrong World Industries, Inc. (a)* | 25,800 | 1,058 | ||||||
Astec Industries, Inc. * | 33,395 | 1,513 | ||||||
Baldor Electric Co. | 63,308 | 2,553 | ||||||
Barnes Group, Inc. (a) | 61,640 | 2,264 | ||||||
Beacon Roofing Supply, Inc. (a)* | 51,982 | 467 | ||||||
Blount International, Inc. * | 56,662 | 693 | ||||||
Brady Corp., Class A (a) | 87,429 | 3,226 | ||||||
Briggs & Stratton Corp. (a) | 70,293 | 1,582 | ||||||
Bucyrus International, Inc., Class A | 44,546 | 3,675 | ||||||
Cascade Corp. | 19,000 | 1,197 | ||||||
Ceradyne, Inc. * | 43,712 | 2,990 | ||||||
CLARCOR, Inc. (a) | 84,698 | 3,088 | ||||||
Curtiss-Wright Corp. | 73,456 | 4,135 | ||||||
DHB Industries, Inc. * | 19,920 | 107 | ||||||
DRS Technologies, Inc. | 66,191 | 3,802 | ||||||
EMCOR Group, Inc. * | 106,004 | 3,650 | ||||||
Encore Wire Corp. (a) | 29,441 | 618 | ||||||
Energy Conversion Devices, Inc. (a)* | 53,663 | 1,464 | ||||||
EnPro Industries, Inc. * | 37,300 | 1,530 | ||||||
ESCO Technologies, Inc. (a)* | 35,469 | 1,468 | ||||||
Esterline Technologies Corp. (a)* | 43,811 | 2,400 | ||||||
Evergreen Solar, Inc. (a)* | 141,789 | 1,639 | ||||||
Federal Signal Corp. (a) | 61,659 | 826 | ||||||
First Solar, Inc. (a)* | 47,600 | 7,559 | ||||||
Force Protection, Inc. (a)* | 76,500 | 1,369 | ||||||
Franklin Electric Co., Inc. (a) | 28,318 | 1,234 | ||||||
FreightCar America, Inc. | 17,490 | 756 | ||||||
Gardner Denver, Inc. * | 87,112 | 3,147 | ||||||
GenCorp, Inc. * | 98,652 | 1,162 | ||||||
Gibraltar Industries, Inc. | 47,611 | 858 | ||||||
Goodman Global, Inc. * | 60,400 | 1,489 | ||||||
GrafTech International Ltd. * | 176,900 | 3,343 | ||||||
Granite Construction, Inc. | 54,956 | 2,353 | ||||||
Griffon Corp. * | 36,950 | 570 | ||||||
Hexcel Corp. * | 136,683 | 3,421 | ||||||
II-VI, Inc. * | 39,100 | 1,358 | ||||||
Insituform Technologies, Inc., Class A (a)* | 41,900 | 589 | ||||||
Interline Brands, Inc. (a)* | 48,634 | 1,162 | ||||||
Kaydon Corp. | 47,235 | 2,541 | ||||||
KBR, Inc. * | 261,000 | 11,192 | ||||||
Lennox International, Inc. (a) | 93,903 | 3,352 | ||||||
Moog, Inc., Class A (a)* | 61,372 | 2,832 | ||||||
Mueller Industries, Inc. (a) | 60,924 | 2,191 | ||||||
NACCO Industries, Inc., Class A | 12,477 | 1,292 | ||||||
Navistar International Corp. * | 32,000 | 2,016 | ||||||
NCI Building Systems, Inc. (a)* | 32,206 | 1,262 | ||||||
Nordson Corp. | 52,843 | 2,827 | ||||||
Orbital Sciences Corp. * | 96,436 | 2,462 | ||||||
Perini Corp. * | 36,530 | 2,095 | ||||||
RBC Bearings, Inc. * | 37,300 | 1,499 | ||||||
Regal-Beloit Corp. (a) | 51,347 | 2,518 | ||||||
Robbins & Myers, Inc. | 28,400 | 2,053 | ||||||
Sequa Corp., Class A (a)* | 10,613 | 1,845 | ||||||
Simpson Manufacturing Co., Inc. (a) | 53,994 | 1,619 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 89,100 | 3,094 | ||||||
Superior Essex, Inc. * | 35,600 | 1,184 | ||||||
TAL International Group, Inc. | 24,000 | 567 | ||||||
Teledyne Technologies, Inc. * | 56,225 | 2,941 |
2 See financial notes.
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
The Genlyte Group, Inc. * | 40,515 | 2,638 | ||||||
The Middleby Corp. (a)* | 25,852 | 1,685 | ||||||
The Toro Co. | 67,035 | 3,731 | ||||||
Tredegar Corp. | 47,200 | 822 | ||||||
Triumph Group, Inc. (a) | 24,801 | 1,975 | ||||||
UAP Holding Corp. (a) | 58,813 | 1,872 | ||||||
Universal Forest Products, Inc. (a) | 25,562 | 915 | ||||||
Valmont Industries, Inc. (a) | 30,047 | 2,876 | ||||||
Vicor Corp. | 14,517 | 204 | ||||||
Wabtec Corp. | 81,150 | 3,046 | ||||||
Walter Industries, Inc. | 81,415 | 2,495 | ||||||
Washington Group International, Inc. * | 46,947 | 4,570 | ||||||
Watsco, Inc. (a) | 34,982 | 1,457 | ||||||
Watts Water Technologies, Inc., Class A (a) | 43,107 | 1,226 | ||||||
Woodward Governor Co. | 47,317 | 3,170 | ||||||
170,486 | ||||||||
Commercial Services & Supplies 4.2% | ||||||||
ABM Industries, Inc. (a) | 70,209 | 1,651 | ||||||
Acco Brands Corp. * | 63,323 | 1,358 | ||||||
Administaff, Inc. (a) | 40,110 | 1,600 | ||||||
Cenveo, Inc. * | 89,242 | 2,015 | ||||||
Clean Harbors, Inc. (a)* | 24,300 | 1,196 | ||||||
Consolidated Graphics, Inc. * | 20,300 | 1,299 | ||||||
CoStar Group, Inc. (a)* | 30,183 | 1,736 | ||||||
CRA International, Inc. (a)* | 21,100 | 1,093 | ||||||
Deluxe Corp. | 86,046 | 3,471 | ||||||
Ennis, Inc. | 46,200 | 944 | ||||||
Equifax, Inc. | 16,408 | 632 | ||||||
First Advantage Corp. * | 30,852 | 566 | ||||||
FTI Consulting, Inc. (a)* | 62,908 | 3,416 | ||||||
G & K Services, Inc., Class A (a) | 36,730 | 1,489 | ||||||
Healthcare Services Group, Inc. (a) | 63,750 | 1,400 | ||||||
Heidrick & Struggles International, Inc. | 32,300 | 1,396 | ||||||
Huron Consulting Group, Inc. (a)* | 30,300 | 2,117 | ||||||
IHS, Inc., Class A * | 45,040 | 2,840 | ||||||
IKON Office Solutions, Inc. | 201,121 | 2,655 | ||||||
Interface, Inc., Class A | 87,900 | 1,682 | ||||||
Kelly Services, Inc., Class A | 39,523 | 831 | ||||||
Knoll, Inc. | 52,203 | 991 | ||||||
Korn/Ferry International * | 78,461 | 1,503 | ||||||
Labor Ready, Inc. * | 81,914 | 1,440 | ||||||
McGrath Rentcorp (a) | 28,432 | 975 | ||||||
Mine Safety Appliances Co. (a) | 45,989 | 2,106 | ||||||
Mobile Mini, Inc. * | 46,968 | 842 | ||||||
Navigant Consulting, Inc. (a)* | 74,848 | 987 | ||||||
PHH Corp. * | 84,363 | 1,886 | ||||||
Resources Connection, Inc. (a) | 78,750 | 1,793 | ||||||
Rollins, Inc. (a) | 72,970 | 2,216 | ||||||
School Specialty, Inc. (a)* | 26,093 | 881 | ||||||
Steelcase, Inc., Class A (a) | 113,842 | 2,034 | ||||||
TeleTech Holdings, Inc. * | 53,700 | 1,339 | ||||||
Tetra Tech, Inc. (a)* | 89,178 | 2,082 | ||||||
The Advisory Board Co. (a)* | 26,576 | 1,706 | ||||||
The Geo Group, Inc. * | 78,800 | 2,492 | ||||||
United Stationers, Inc. * | 47,167 | 2,731 | ||||||
Viad Corp. | 36,896 | 1,308 | ||||||
Waste Connections, Inc. (a)* | 110,943 | 3,751 | ||||||
Watson Wyatt Worldwide, Inc., Class A | 70,081 | 3,341 | ||||||
71,791 | ||||||||
Consumer Durables & Apparel 3.8% | ||||||||
American Greetings Corp., Class A | 91,711 | 2,416 | ||||||
Beazer Homes USA, Inc. (a) | 52,898 | 594 | ||||||
Blyth, Inc. | 49,309 | 941 | ||||||
Callaway Golf Co. | 94,369 | 1,634 | ||||||
Carter’s, Inc. (a)* | 79,014 | 1,745 | ||||||
Champion Enterprises, Inc. (a)* | 102,133 | 1,211 | ||||||
Columbia Sportswear Co. (a) | 23,419 | 1,142 | ||||||
Crocs, Inc. (a)* | 114,418 | 8,553 | ||||||
Deckers Outdoor Corp. * | 20,200 | 2,824 | ||||||
Ethan Allen Interiors, Inc. (a) | 52,179 | 1,610 | ||||||
Fossil, Inc. * | 69,666 | 2,617 | ||||||
Furniture Brands International, Inc. (a) | 76,502 | 922 | ||||||
Hovnanian Enterprises, Inc., Class A (a)* | 46,011 | 523 | ||||||
Iconix Brand Group, Inc. * | 68,600 | 1,567 | ||||||
JAKKS Pacific, Inc. (a)* | 46,174 | 1,224 | ||||||
Jarden Corp. (a)* | 90,008 | 3,197 | ||||||
K-Swiss, Inc., Class A (a) | 41,928 | 981 | ||||||
Kellwood Co. (a) | 40,528 | 672 | ||||||
Kimball International, Inc., Class B | 34,851 | 465 | ||||||
La-Z-boy, Inc. (a) | 82,009 | 647 | ||||||
Leapfrog Enterprises, Inc. (a)* | 21,325 | 160 | ||||||
Meritage Homes Corp. (a)* | 32,185 | 518 | ||||||
Movado Group, Inc. | 39,100 | 1,177 | ||||||
Oakley, Inc. * | 37,109 | 1,085 | ||||||
Oxford Industries, Inc. | 25,418 | 659 | ||||||
Polaris Industries, Inc. (a) | 56,423 | 2,775 | ||||||
Quiksilver, Inc. (a)* | 169,212 | 2,284 | ||||||
RC2 Corp. * | 34,486 | 1,028 | ||||||
Sealy Corp. (a) | 59,000 | 780 | ||||||
Skechers U.S.A., Inc., Class A * | 42,078 | 1,035 | ||||||
Standard Pacific Corp. (a) | 87,950 | 422 | ||||||
Steven Madden Ltd. | 32,500 | 724 | ||||||
Tempur-Pedic International, Inc. (a) | 123,062 | 4,430 | ||||||
The Timberland Co., Class A * | 77,360 | 1,509 | ||||||
The Warnaco Group, Inc. * | 76,463 | 3,111 | ||||||
Tupperware Brands Corp. (a) | 100,511 | 3,628 | ||||||
Under Armour, Inc., Class A (a)* | 30,720 | 1,912 |
See financial notes. 3
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
WCI Communities, Inc. (a)* | 56,688 | 310 | ||||||
Wolverine World Wide, Inc. | 88,536 | 2,270 | ||||||
65,302 | ||||||||
Consumer Services 4.7% | ||||||||
Ambassadors Groups, Inc. | 32,900 | 598 | ||||||
Ameristar Casinos, Inc. | 40,875 | 1,331 | ||||||
Applebee’s International, Inc. | 111,330 | 2,821 | ||||||
Bally Technologies, Inc. * | 74,462 | 3,003 | ||||||
Bob Evans Farms, Inc. (a) | 57,446 | 1,619 | ||||||
Bright Horizons Family Solutions, Inc. (a)* | 35,888 | 1,393 | ||||||
California Pizza Kitchen, Inc. * | 32,850 | 532 | ||||||
CBRL Group, Inc. | 40,753 | 1,626 | ||||||
CEC Entertainment, Inc. * | 51,238 | 1,527 | ||||||
Cedar Fair L.P. (a) | 74,132 | 1,822 | ||||||
Chipotle Mexican Grill, Inc., Class A (a)* | 46,747 | 6,498 | ||||||
Choice Hotels International, Inc. | 54,114 | 2,096 | ||||||
CKE Restaurants, Inc. (a) | 103,079 | 1,668 | ||||||
Coinstar, Inc. * | 45,600 | 1,571 | ||||||
Corinthian Colleges, Inc. (a)* | 127,029 | 2,082 | ||||||
DeVry, Inc. | 98,080 | 5,364 | ||||||
Domino’s Pizza, Inc. | 65,979 | 1,019 | ||||||
Escala Group, Inc. (a)* | 38,196 | 80 | ||||||
Gaylord Entertainment Co. * | 59,735 | 3,254 | ||||||
Icahn Enterprises L.P. (a) | 7,847 | 1,024 | ||||||
IHOP Corp. (a) | 28,572 | 1,810 | ||||||
INVESTools, Inc. * | 107,000 | 1,561 | ||||||
Isle of Capri Casinos, Inc. (a)* | 18,884 | 382 | ||||||
Jackson Hewitt Tax Service, Inc. (a) | 49,676 | 1,552 | ||||||
Krispy Kreme Doughnuts, Inc. (a)* | 96,600 | 309 | ||||||
Landry’s Restaurants, Inc. (a) | 23,236 | 667 | ||||||
Life Time Fitness, Inc. (a)* | 45,677 | 2,770 | ||||||
Matthews International Corp., Class A (a) | 44,484 | 2,027 | ||||||
P.F. Chang’s China Bistro, Inc. (a)* | 34,842 | 1,014 | ||||||
Papa John’s International, Inc. * | 38,155 | 889 | ||||||
Pinnacle Entertainment, Inc. * | 96,485 | 2,817 | ||||||
Red Robin Gourmet Burgers, Inc. (a)* | 21,327 | 854 | ||||||
Regis Corp. | 71,449 | 2,401 | ||||||
Ruby Tuesday, Inc. (a) | 87,914 | 1,404 | ||||||
Shuffle Master, Inc. (a)* | 41,612 | 569 | ||||||
Six Flags, Inc. (a)* | 114,908 | 372 | ||||||
Sonic Corp. (a)* | 97,229 | 2,409 | ||||||
Speedway Motorsports, Inc. (a) | 43,684 | 1,586 | ||||||
Steiner Leisure Ltd. * | 23,909 | 1,075 | ||||||
Stewart Enterprises, Inc., Class A (a) | 172,800 | 1,567 | ||||||
Strayer Education, Inc. (a) | 22,771 | 4,246 | ||||||
Texas Roadhouse, Inc., Class A * | 82,396 | 1,044 | ||||||
The Marcus Corp. (a) | 29,083 | 560 | ||||||
Triarc Cos., Inc., Class B (a) | 104,831 | 1,174 | ||||||
Universal Technical Institute, Inc. (a)* | 38,556 | 726 | ||||||
Vail Resorts, Inc. * | 50,871 | 3,087 | ||||||
WMS Industries, Inc. * | 58,051 | 2,013 | ||||||
81,813 | ||||||||
Diversified Financials 2.2% | ||||||||
Advance America Cash Advance Centers, Inc. | 87,065 | 832 | ||||||
Advanta Corp., Class B | 53,100 | 839 | ||||||
Calamos Asset Management, Inc., Class A | 37,596 | 1,279 | ||||||
Cash America International, Inc. | 47,770 | 1,863 | ||||||
Cohen & Steers, Inc. (a) | 20,528 | 772 | ||||||
CompuCredit Corp. (a)* | 33,600 | 670 | ||||||
Credit Acceptance Corp. * | 2,553 | 57 | ||||||
EZCORP, Inc., Class A * | 73,600 | 969 | ||||||
Financial Federal Corp. (a) | 41,123 | 1,111 | ||||||
First Cash Financial Services, Inc. * | 42,200 | 830 | ||||||
GAMCO Investors, Inc., Class A (a) | 21,000 | 1,300 | ||||||
GFI Group, Inc. (a)* | 20,642 | 1,782 | ||||||
Greenhill & Co., Inc. (a) | 18,382 | 1,360 | ||||||
International Securities Exchange Holdings, Inc., Class A | 63,348 | 4,247 | ||||||
Investment Technology Group, Inc. * | 70,365 | 2,948 | ||||||
KKR Financial Holdings LLC | 144,943 | 2,263 | ||||||
Knight Capital Group, Inc., Class A (a)* | 152,172 | 2,041 | ||||||
Merrill Lynch & Co., Inc. (a) | 9,860 | 651 | ||||||
optionsXpress Holdings, Inc. (a) | 59,947 | 1,784 | ||||||
PICO Holdings, Inc. (a)* | 25,900 | 1,068 | ||||||
Piper Jaffray Cos., Inc. * | 30,339 | 1,559 | ||||||
Portfolio Recovery Associates, Inc. (a) | 25,043 | 1,130 | ||||||
SWS Group, Inc. | 47,500 | 902 | ||||||
W.P. Carey & Co. LLC | 41,266 | 1,442 | ||||||
Waddell & Reed Financial, Inc., Class A (a) | 125,539 | 4,170 | ||||||
World Acceptance Corp. (a)* | 27,000 | 871 | ||||||
38,740 | ||||||||
Energy 8.1% | ||||||||
Alliance Resource Partners L.P. | 31,610 | 1,216 | ||||||
Alpha Natural Resources, Inc. (a)* | 86,661 | 2,378 | ||||||
Atlas America, Inc. (a) | 34,663 | 2,000 | ||||||
Atlas Pipeline Partners L.P. | 20,100 | 973 | ||||||
ATP Oil & Gas Corp. (a)* | 27,633 | 1,585 | ||||||
Atwood Oceanics, Inc. * | 44,404 | 3,741 | ||||||
Berry Petroleum Co., Class A | 56,612 | 2,758 | ||||||
Bill Barrett Corp. (a)* | 54,193 | 2,536 |
4 See financial notes.
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Boardwalk Pipeline Partners L.P. (a) | 27,505 | 894 | ||||||
BP Prudhoe Bay Royalty Trust (a) | 32,865 | 2,549 | ||||||
Bristow Group, Inc. (a)* | 39,987 | 1,995 | ||||||
Buckeye Partners L.P. (a) | 62,408 | 3,463 | ||||||
CARBO Ceramics, Inc. (a) | 30,420 | 1,366 | ||||||
Carrizo Oil & Gas, Inc. (a)* | 27,600 | 1,418 | ||||||
CNX Gas Corp. (a)* | 49,394 | 1,577 | ||||||
Complete Production Services, Inc. (a)* | 59,900 | 1,192 | ||||||
Comstock Resources, Inc. * | 62,426 | 2,282 | ||||||
Copano Energy LLC (a) | 48,700 | 1,885 | ||||||
Crosstex Energy L.P. (a) | 28,483 | 975 | ||||||
Crosstex Energy, Inc. (a) | 38,844 | 1,432 | ||||||
Delta Petroleum Corp. (a)* | 63,827 | 1,194 | ||||||
Dorchester Minerals L.P. | 27,392 | 612 | ||||||
Dresser-Rand Group, Inc. * | 133,619 | 5,171 | ||||||
Dril-Quip, Inc. (a)* | 38,950 | 2,077 | ||||||
Enbridge Energy Management LLC (a)* | 17,404 | 954 | ||||||
Encore Acquisition Co. (a)* | 72,377 | 2,656 | ||||||
Energy Partners Ltd. * | 41,068 | 630 | ||||||
Energy Transfer Equity L.P. | 52,400 | 1,865 | ||||||
Evergreen Energy, Inc. (a)* | 101,457 | 478 | ||||||
EXCO Resources, Inc. (a)* | 107,451 | 1,814 | ||||||
Exterran Holdings, Inc. * | 16,000 | 1,347 | ||||||
Foundation Coal Holdings, Inc. | 73,578 | 3,143 | ||||||
General Maritime Corp. (a) | 42,296 | 1,192 | ||||||
Global Industries Ltd. * | 149,682 | 3,685 | ||||||
Grey Wolf, Inc. * | 293,748 | 1,654 | ||||||
GulfMark Offshore, Inc. * | 33,200 | 1,546 | ||||||
Hercules Offshore, Inc. (a)* | 80,304 | 2,171 | ||||||
Holly Corp. | 55,506 | 3,486 | ||||||
Hornbeck Offshore Services, Inc. (a)* | 36,845 | 1,441 | ||||||
Hugoton Royalty Trust (a) | 60,360 | 1,472 | ||||||
Inergy Holdings L.P. | 5,000 | 242 | ||||||
Inergy, L.P. (a) | 58,352 | 2,035 | ||||||
International Coal Group, Inc. (a)* | 132,368 | 712 | ||||||
ION Geophysical Corp. (a)* | 33,000 | 500 | ||||||
Lufkin Industries, Inc. | 23,595 | 1,403 | ||||||
Magellan Midstream Holdings L.P. | 51,825 | 1,393 | ||||||
Magellan Midstream Partners (a) | 15,000 | 632 | ||||||
Mariner Energy, Inc. * | 139,466 | 3,487 | ||||||
Markwest Energy Partners L.P. (a) | 46,900 | 1,537 | ||||||
Natural Resource Partners L.P. (a) | 52,211 | 1,780 | ||||||
Newpark Resources, Inc. * | 117,110 | 734 | ||||||
NuStar GP Holdings LLC | 57,500 | 1,858 | ||||||
Oil States International, Inc. * | 80,336 | 3,470 | ||||||
Overseas Shipholding Group, Inc. | 45,361 | 3,375 | ||||||
Parallel Petroleum Corp. * | 46,800 | 958 | ||||||
Parker Drilling Co. * | 176,965 | 1,494 | ||||||
Penn Virginia Corp. | 55,778 | 2,700 | ||||||
Penn Virginia Resource Partners, L.P. (a) | 41,446 | 1,194 | ||||||
Petroleum Development Corp. * | 19,903 | 904 | ||||||
Pioneer Drilling Co. * | 79,231 | 965 | ||||||
Regency Energy Partners L.P. | 42,220 | 1,340 | ||||||
Rosetta Resources, Inc. (a)* | 81,400 | 1,547 | ||||||
RPC, Inc. (a) | 39,889 | 446 | ||||||
SEACOR Holdings, Inc. * | 33,816 | 3,099 | ||||||
Ship Finance International Ltd. (a) | 49,325 | 1,351 | ||||||
Stone Energy Corp. * | 46,969 | 2,094 | ||||||
Sunoco Logistics Partners L.P. (a) | 25,186 | 1,478 | ||||||
Swift Energy Co. * | 41,801 | 1,983 | ||||||
TC Pipelines L.P. (a) | 44,000 | 1,620 | ||||||
TETRA Technologies, Inc. (a)* | 101,974 | 2,008 | ||||||
USEC, Inc. (a)* | 141,823 | 1,248 | ||||||
W-H Energy Services, Inc. (a)* | 50,378 | 2,900 | ||||||
Warren Resources, Inc. (a)* | 64,545 | 980 | ||||||
Western Refining, Inc. (a) | 42,122 | 1,545 | ||||||
Whiting Petroleum Corp. * | 67,211 | 3,633 | ||||||
Williams Partners L.P. | 37,300 | 1,706 | ||||||
World Fuel Services Corp. (a) | 41,978 | 1,859 | ||||||
139,013 | ||||||||
Food & Staples Retailing 0.8% | ||||||||
Casey’s General Stores, Inc. (a) | 83,226 | 2,372 | ||||||
Longs Drug Stores Corp. | 48,705 | 2,557 | ||||||
Performance Food Group Co. * | 56,674 | 1,530 | ||||||
Ruddick Corp. (a) | 52,456 | 1,784 | ||||||
The Andersons, Inc. (a) | 24,000 | 1,192 | ||||||
The Great Atlantic & Pacific Tea Co., Inc. (a)* | 30,090 | 974 | ||||||
The Pantry, Inc. (a)* | 30,276 | 848 | ||||||
United Natural Foods, Inc. (a)* | 60,382 | 1,747 | ||||||
Weis Markets, Inc. (a) | 18,000 | 790 | ||||||
13,794 | ||||||||
Food, Beverage & Tobacco 2.0% | ||||||||
Alliance One International, Inc. * | 161,200 | 1,053 | ||||||
Central European Distribution Corp. (a)* | 40,717 | 2,165 | ||||||
Chiquita Brands International, Inc. (a)* | 70,202 | 1,316 | ||||||
Flowers Foods, Inc. | 125,426 | 2,752 | ||||||
Fresh Del Monte Produce, Inc. (a) | 45,646 | 1,656 | ||||||
Hansen Natural Corp. (a)* | 93,760 | 6,376 | ||||||
Lancaster Colony Corp. (a) | 35,943 | 1,444 | ||||||
Lance, Inc. | 40,100 | 849 | ||||||
PepsiAmericas, Inc. | 96,836 | 3,459 | ||||||
Pilgrim’s Pride Corp. (a) | 60,180 | 1,787 | ||||||
Ralcorp Holdings, Inc. (a)* | 41,235 | 2,322 | ||||||
Seaboard Corp. (a) | 975 | 1,591 | ||||||
The Hain Celestial Group, Inc. (a)* | 55,131 | 1,933 | ||||||
Tootsie Roll Industries, Inc. (a) | 58,851 | 1,517 |
See financial notes. 5
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
TreeHouse Foods, Inc. * | 48,000 | 1,339 | ||||||
Universal Corp. (a) | 42,745 | 2,083 | ||||||
Vector Group Ltd. (a) | 67,462 | 1,476 | ||||||
35,118 | ||||||||
Health Care Equipment & Services 5.9% | ||||||||
Align Technology, Inc. (a)* | 104,900 | 2,171 | ||||||
Allscripts Healthcare Solutions, Inc. (a)* | 68,775 | 1,905 | ||||||
Amedisys, Inc. (a)* | 42,100 | 1,787 | ||||||
American Medical Systems Holdings, Inc. (a)* | 96,525 | 1,235 | ||||||
AMERIGROUP Corp. * | 86,042 | 3,011 | ||||||
AMN Healthcare Services, Inc. * | 53,300 | 1,013 | ||||||
AmSurg Corp. * | 49,300 | 1,304 | ||||||
Analogic Corp. | 25,654 | 1,466 | ||||||
Apria Healthcare Group, Inc. (a)* | 69,737 | 1,686 | ||||||
ArthroCare Corp. (a)* | 44,230 | 2,868 | ||||||
Assisted Living Concepts, Inc. * | 88,600 | 780 | ||||||
Brookdale Senior Living, Inc. (a) | 37,769 | 1,393 | ||||||
Centene Corp. * | 72,092 | 1,682 | ||||||
Chemed Corp. | 45,900 | 2,631 | ||||||
CONMED Corp. * | 51,500 | 1,465 | ||||||
DJO, Inc. * | 31,700 | 1,583 | ||||||
Eclipsys Corp. (a)* | 77,367 | 1,745 | ||||||
ev3, Inc. * | 50,755 | 745 | ||||||
Haemonetics Corp. * | 42,455 | 2,182 | ||||||
HealthExtras, Inc. (a)* | 45,965 | 1,339 | ||||||
HEALTHSOUTH Corp. (a)* | 119,900 | 2,404 | ||||||
Healthspring, Inc. * | 39,949 | 839 | ||||||
Healthways, Inc. (a)* | 49,763 | 3,021 | ||||||
Immucor, Inc. * | 108,654 | 3,504 | ||||||
Integra LifeSciences Holdings (a)* | 30,348 | 1,471 | ||||||
Invacare Corp. (a) | 52,211 | 1,413 | ||||||
InVentiv Health, Inc. (a)* | 48,701 | 2,057 | ||||||
Inverness Medical Innovations, Inc. (a)* | 75,156 | 4,516 | ||||||
Kindred Healthcare, Inc. * | 51,492 | 1,094 | ||||||
Kyphon, Inc. * | 72,236 | 5,120 | ||||||
LCA-Vision, Inc. (a) | 31,043 | 530 | ||||||
LifePoint Hospitals, Inc. * | 94,241 | 2,876 | ||||||
Magellan Health Services, Inc. * | 65,910 | 2,775 | ||||||
Matria Healthcare, Inc. (a)* | 24,241 | 623 | ||||||
Mentor Corp. (a) | 67,396 | 2,869 | ||||||
Meridian Bioscience, Inc. | 58,350 | 1,931 | ||||||
NuVasive, Inc. * | 52,000 | 2,225 | ||||||
Odyssey HealthCare, Inc. * | 48,141 | 493 | ||||||
Owens & Minor, Inc. | 54,792 | 2,221 | ||||||
Palomar Medical Technologies, Inc. (a)* | 28,000 | 708 | ||||||
PharMerica Corp. (a)* | 18,847 | 301 | ||||||
PolyMedica Corp. (a) | 31,147 | 1,650 | ||||||
PSS World Medical, Inc. (a)* | 112,066 | 2,264 | ||||||
Psychiatric Solutions, Inc. * | 80,254 | 3,178 | ||||||
Sirona Dental Systems, Inc. (a)* | 22,565 | 759 | ||||||
STERIS Corp. | 105,358 | 3,060 | ||||||
Sunrise Senior Living, Inc. * | 70,877 | 2,622 | ||||||
SurModics, Inc. (a)* | 24,019 | 1,363 | ||||||
Symmetry Medical, Inc. (a)* | 55,991 | 960 | ||||||
The TriZetto Group, Inc. (a)* | 71,680 | 1,171 | ||||||
Thoratec Corp. (a)* | 85,626 | 1,710 | ||||||
Universal American Financial Corp. * | 72,702 | 1,764 | ||||||
West Pharmaceutical Services, Inc. (a) | 51,865 | 2,144 | ||||||
Wright Medical Group, Inc. * | 57,900 | 1,534 | ||||||
101,161 | ||||||||
Household & Personal Products 0.4% | ||||||||
Bare Escentuals, Inc. (a)* | 29,000 | 716 | ||||||
Chattem, Inc. (a)* | 30,713 | 2,282 | ||||||
Elizabeth Arden, Inc. * | 45,898 | 1,143 | ||||||
Nu Skin Enterprises, Inc., Class A | 88,122 | 1,522 | ||||||
USANA Health Sciences, Inc. (a)* | 14,029 | 573 | ||||||
6,236 | ||||||||
Insurance 3.1% | ||||||||
Alfa Corp. | 91,680 | 1,669 | ||||||
Allied World Assurance Holdings Ltd. | 43,800 | 2,098 | ||||||
American Equity Investment Life Holding Co. (a) | 77,764 | 760 | ||||||
Argo Group International Holdings Ltd. (a)* | 32,938 | 1,403 | ||||||
CNA Surety Corp. * | 41,000 | 811 | ||||||
Delphi Financial Group, Inc., Class A | 71,880 | 2,785 | ||||||
Employers Holdings, Inc. | 81,400 | 1,560 | ||||||
FBL Financial Group, Inc., Class A | 27,168 | 1,100 | ||||||
Harleysville Group, Inc. | 29,763 | 928 | ||||||
Hilb Rogal & Hobbs Co. | 61,219 | 2,698 | ||||||
Horace Mann Educators Corp. | 78,278 | 1,620 | ||||||
Infinity Property & Casualty Corp. | 31,792 | 1,279 | ||||||
IPC Holdings Ltd. | 97,977 | 2,930 | ||||||
LandAmerica Financial Group, Inc. | 26,933 | 748 | ||||||
Montpelier Re Holdings Ltd. | 168,649 | 3,019 | ||||||
National Financial Partners Corp. (a) | 47,738 | 2,610 | ||||||
National Western Life Insurance Co., Class A | 4,494 | 976 | ||||||
Odyssey Re Holdings Corp. (a) | 42,883 | 1,594 | ||||||
OneBeacon Insurance Group Ltd. | 42,500 | 914 | ||||||
ProAssurance Corp. (a)* | 55,989 | 3,087 | ||||||
RLI Corp. | 35,155 | 2,045 | ||||||
Security Capital Assurance Ltd (a) | 105,600 | 1,385 | ||||||
Selective Insurance Group, Inc. | 91,014 | 2,213 | ||||||
State Auto Financial Corp. (a) | 39,856 | 1,097 |
6 See financial notes.
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Stewart Information Services Corp. (a) | 28,543 | 828 | ||||||
The Commerce Group, Inc. | 76,448 | 2,790 | ||||||
The Navigators Group, Inc. * | 21,485 | 1,295 | ||||||
The Phoenix Cos., Inc. | 191,792 | 2,643 | ||||||
Tower Group, Inc. | 30,300 | 915 | ||||||
United Fire & Casualty Co. (a) | 34,300 | 1,099 | ||||||
Zenith National Insurance Corp. | 60,645 | 2,437 | ||||||
53,336 | ||||||||
Materials 4.9% | ||||||||
A. Schulman, Inc. | 40,409 | 954 | ||||||
AbitibiBowater, Inc. (a) | 43,098 | 1,477 | ||||||
AMCOL International Corp. (a) | 26,752 | 1,079 | ||||||
Arch Chemicals, Inc. | 42,772 | 1,951 | ||||||
Brush Engineered Materials, Inc. * | 31,000 | 1,497 | ||||||
Century Aluminum Co. * | 44,474 | 2,588 | ||||||
CF Industries Holdings, Inc. | 74,553 | 6,553 | ||||||
Coeur d’Alene Mines Corp. (a)* | 363,806 | 1,437 | ||||||
Compass Minerals International, Inc. (a) | 46,982 | 1,734 | ||||||
Eagle Materials, Inc. (a) | 49,690 | 1,963 | ||||||
Ferro Corp. (a) | 68,377 | 1,417 | ||||||
Georgia Gulf Corp. (a) | 41,655 | 504 | ||||||
Glatfelter (a) | 52,000 | 836 | ||||||
Graphic Packaging Corp. * | 190,915 | 939 | ||||||
Greif, Inc., Class A | 51,162 | 3,254 | ||||||
H.B. Fuller Co. | 102,816 | 3,026 | ||||||
Headwaters, Inc. (a)* | 69,114 | 992 | ||||||
Hecla Mining Co. * | 202,600 | 1,949 | ||||||
Kaiser Aluminum Corp. (a) | 15,800 | 1,197 | ||||||
Kronos Worldwide, Inc. (a) | 72,605 | 1,364 | ||||||
Metal Management, Inc. | 41,221 | 2,167 | ||||||
Minerals Technologies, Inc. (a) | 30,561 | 2,146 | ||||||
NewMarket Corp. | 29,600 | 1,591 | ||||||
NL Industries, Inc. (a) | 15,841 | 175 | ||||||
Olin Corp. | 117,891 | 2,686 | ||||||
OM Group, Inc. * | 50,600 | 2,681 | ||||||
PolyOne Corp. * | 149,375 | 1,194 | ||||||
Quanex Corp. (a) | 62,904 | 2,591 | ||||||
Rock-Tenn Co., Class A | 58,000 | 1,691 | ||||||
Rockwood Holdings, Inc. (a)* | 39,588 | 1,547 | ||||||
Royal Gold, Inc. (a) | 30,238 | 1,069 | ||||||
RTI International Metals, Inc. * | 34,466 | 2,695 | ||||||
Schnitzer Steel Industries, Inc., Class A | 34,955 | 2,309 | ||||||
Sensient Technologies Corp. (a) | 77,425 | 2,314 | ||||||
Silgan Holdings, Inc. | 40,012 | 2,183 | ||||||
Spartech Corp. | 57,913 | 890 | ||||||
Stillwater Mining Co. * | 68,941 | 767 | ||||||
Symyx Technologies, Inc. * | 44,812 | 413 | ||||||
Terra Industries, Inc. * | 155,300 | 5,729 | ||||||
Texas Industries, Inc. (a) | 34,751 | 2,539 | ||||||
Valhi, Inc. (a) | 70,458 | 1,881 | ||||||
W.R. Grace & Co. * | 89,500 | 2,649 | ||||||
Wausau Paper Corp. | 80,920 | 810 | ||||||
Worthington Industries, Inc. (a) | 112,360 | 2,809 | ||||||
Zoltek Cos., Inc. (a)* | 20,900 | 925 | ||||||
85,162 | ||||||||
Media 2.4% | ||||||||
Arbitron, Inc. | 49,256 | 2,493 | ||||||
Belo Corp., Class A | 141,200 | 2,612 | ||||||
Charter Communications, Inc., Class A * | 642,400 | 1,330 | ||||||
Citadel Broadcasting Corp. (a) | 90,623 | 399 | ||||||
CKX, Inc. * | 72,771 | 885 | ||||||
Clear Channel Outdoor Holdings, Inc., Class A (a)* | 57,000 | 1,449 | ||||||
Crown Media Holdings, Inc., Class A (a)* | 18,000 | 142 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 79,045 | 2,574 | ||||||
Entercom Communications Corp., Class A (a) | 40,084 | 744 | ||||||
Entravision Communications Corp., Class A * | 114,227 | 1,039 | ||||||
Gemstar-TV Guide International, Inc. * | 439,086 | 3,025 | ||||||
Harte-Hanks, Inc. (a) | 72,616 | 1,280 | ||||||
Hearst-Argyle Television, Inc. (a) | 44,980 | 1,003 | ||||||
Interactive Data Corp. | 62,030 | 1,994 | ||||||
Journal Communications, Inc., Class A | 70,878 | 631 | ||||||
Lee Enterprises, Inc. (a) | 72,940 | 1,171 | ||||||
Live Nation, Inc. * | 106,689 | 2,181 | ||||||
Marvel Entertainment, Inc. (a)* | 97,830 | 2,420 | ||||||
Media General, Inc., Class A (a) | 32,336 | 905 | ||||||
Morningstar, Inc. (a)* | 40,241 | 2,995 | ||||||
National CineMedia, Inc. (a) | 64,000 | 1,723 | ||||||
Radio One, Inc., Class A * | 130,307 | 455 | ||||||
RCN Corp. (a)* | 62,368 | 911 | ||||||
Regal Entertainment Group, Class A | 91,491 | 2,065 | ||||||
Scholastic Corp. * | 42,169 | 1,669 | ||||||
Sun-Times Media Group, Inc., Class A * | 34,680 | 77 | ||||||
The McClatchy Co., Class A (a) | 46,805 | 776 | ||||||
Valassis Communications, Inc. (a)* | 75,662 | 745 | ||||||
Warner Music Group Corp. (a) | 74,286 | 756 | ||||||
Westwood One, Inc. | 106,610 | 228 | ||||||
40,677 | ||||||||
Pharmaceuticals & Biotechnology 6.0% | ||||||||
Abraxis Bioscience, Inc. (a)* | 47,356 | 1,176 | ||||||
Adams Respiratory Therapeutics, Inc. (a)* | 53,510 | 2,351 |
See financial notes. 7
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Alexion Pharmaceuticals, Inc. * | 49,028 | 3,751 | ||||||
Alkermes, Inc. * | 161,042 | 2,609 | ||||||
Alpharma, Inc., Class A (a)* | 53,930 | 1,112 | ||||||
AMAG Pharmaceuticals, Inc. (a)* | 23,600 | 1,542 | ||||||
Applera Corp.-Celera Group (a)* | 111,317 | 1,816 | ||||||
Arena Pharmaceuticals, Inc. (a)* | 93,600 | 899 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 30,331 | 2,929 | ||||||
BioMarin Pharmaceuticals, Inc. * | 131,314 | 3,641 | ||||||
Bruker BioSciences Corp. * | 98,326 | 1,018 | ||||||
Cambrex Corp. | 48,200 | 549 | ||||||
Cepheid, Inc. (a)* | 84,500 | 2,187 | ||||||
Cubist Pharmaceuticals, Inc. (a)* | 90,432 | 2,116 | ||||||
CV Therapeutics, Inc. (a)* | 91,563 | 938 | ||||||
Dionex Corp. (a)* | 31,344 | 2,758 | ||||||
Exelixis, Inc. * | 153,672 | 1,690 | ||||||
Halozyme Therapeutics, Inc. (a)* | 109,300 | 1,003 | ||||||
Human Genome Sciences, Inc. (a)* | 191,181 | 1,809 | ||||||
Illumina, Inc. (a)* | 87,394 | 4,907 | ||||||
InterMune, Inc. (a)* | 40,300 | 803 | ||||||
Isis Pharmaceuticals, Inc. (a)* | 129,000 | 2,273 | ||||||
K-V Pharmaceutical Co., Class A (a)* | 55,701 | 1,746 | ||||||
LifeCell Corp. (a)* | 52,000 | 2,291 | ||||||
Ligand Pharmaceuticals, Inc., Class B | 155,000 | 834 | ||||||
MannKind Corp. (a)* | 40,532 | 370 | ||||||
Martek Biosciences Corp. (a)* | 51,576 | 1,576 | ||||||
Medarex, Inc. (a)* | 203,750 | 2,435 | ||||||
Medicis Pharmaceutical Corp., Class A (a) | 91,449 | 2,715 | ||||||
MGI Pharma, Inc. * | 133,691 | 4,356 | ||||||
Myriad Genetics, Inc. * | 67,265 | 3,724 | ||||||
Nektar Therapeutics * | 127,271 | 761 | ||||||
Onyx Pharmaceuticals, Inc. * | 90,466 | 4,226 | ||||||
OSI Pharmaceuticals, Inc. * | 93,291 | 3,878 | ||||||
Par Pharmaceutical Cos., Inc. * | 55,280 | 1,019 | ||||||
PAREXEL International Corp. * | 46,409 | 2,135 | ||||||
Perrigo Co. (a) | 122,551 | 2,906 | ||||||
Pharmion Corp. (a)* | 40,200 | 1,934 | ||||||
Progenics Pharmaceuticals, Inc. (a)* | 33,697 | 780 | ||||||
Regeneron Pharmaceuticals, Inc. * | 110,349 | 2,428 | ||||||
Salix Pharmaceuticals Ltd. (a)* | 75,233 | 880 | ||||||
Sciele Pharma, Inc. (a)* | 49,432 | 1,258 | ||||||
The Medicines Co. (a)* | 79,308 | 1,519 | ||||||
Theravance, Inc. * | 65,138 | 1,630 | ||||||
United Therapeutics Corp. (a)* | 31,576 | 2,161 | ||||||
Valeant Pharmaceuticals International * | 154,686 | 2,251 | ||||||
Varian, Inc. * | 49,971 | 3,692 | ||||||
Ventana Medical Systems, Inc. * | 51,706 | 4,550 | ||||||
ViroPharma, Inc. (a)* | 113,074 | 974 | ||||||
ZymoGenetics, Inc. (a)* | 47,177 | 634 | ||||||
103,540 | ||||||||
Real Estate 5.8% | ||||||||
Acadia Realty Trust | 49,400 | 1,309 | ||||||
Alexander’s, Inc.(a)* | 3,110 | 1,250 | ||||||
American Campus Communities, Inc. | 35,200 | 1,001 | ||||||
American Financial Realty Trust | 202,117 | 1,362 | ||||||
American Home Mortgage Investment Corp. | 69,569 | 8 | ||||||
Anthracite Capital, Inc. (a) | 89,000 | 740 | ||||||
Ashford Hospitality Trust (a) | 158,200 | 1,557 | ||||||
BioMed Realty Trust, Inc. (a) | 100,734 | 2,407 | ||||||
Corporate Office Properties Trust | 70,949 | 2,932 | ||||||
Cousins Properties, Inc. (a) | 61,645 | 1,775 | ||||||
Crystal River Capital, Inc. (a) | 38,100 | 554 | ||||||
DCT Industrial Trust, Inc. (a) | 259,200 | 2,781 | ||||||
Deerfield Triarc Capital Corp. (a) | 74,000 | 707 | ||||||
DiamondRock Hospitality Co. | 145,500 | 2,788 | ||||||
Digital Realty Trust, Inc. (a) | 96,504 | 4,245 | ||||||
Douglas Emmett, Inc. | 123,000 | 3,236 | ||||||
EastGroup Properties, Inc. (a) | 36,490 | 1,740 | ||||||
Entertainment Properties Trust | 40,655 | 2,231 | ||||||
Equity Lifestyle Properties, Inc. | 36,959 | 1,857 | ||||||
Equity One, Inc. (a) | 57,937 | 1,517 | ||||||
Extra Space Storage, Inc. | 88,958 | 1,398 | ||||||
FelCor Lodging Trust, Inc. | 95,494 | 2,000 | ||||||
First Industrial Realty Trust, Inc. (a) | 69,101 | 2,816 | ||||||
First Potomac Realty Trust | 37,100 | 775 | ||||||
Franklin Street Properties Corp. (a) | 89,265 | 1,451 | ||||||
Friedman, Billings, Ramsey Group, Inc., Class A | 268,917 | 1,156 | ||||||
Getty Realty Corp. | 27,142 | 772 | ||||||
Glimcher Realty Trust (a) | 56,548 | 1,255 | ||||||
Gramercy Capital Corp. (a) | 30,000 | 791 | ||||||
Healthcare Realty Trust, Inc. (a) | 73,581 | 1,945 | ||||||
Home Properties, Inc. (a) | 51,065 | 2,626 | ||||||
Inland Real Estate Corp. (a) | 100,236 | 1,494 | ||||||
LaSalle Hotel Properties (a) | 61,726 | 2,551 | ||||||
Lexington Realty Trust (a) | 108,091 | 2,139 | ||||||
Maguire Properties, Inc. (a) | 57,535 | 1,568 | ||||||
Medical Properties Trust, Inc. (a) | 75,700 | 994 | ||||||
Mid-America Apartment Communities, Inc. (a) | 38,952 | 2,026 | ||||||
National Health Investors, Inc. | 36,368 | 1,065 | ||||||
National Retail Properties, Inc. (a) | 100,426 | 2,546 | ||||||
Newcastle Investment Corp. (a) | 72,630 | 1,079 | ||||||
NorthStar Realty Finance Corp. (a) | 92,500 | 865 | ||||||
OMEGA Healthcare Investors, Inc. | 92,458 | 1,547 |
8 See financial notes.
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Parkway Properties, Inc. | 22,900 | 985 | ||||||
Pennsylvania Real Estate Investment Trust (a) | 57,012 | 2,175 | ||||||
Post Properties, Inc. (a) | 67,067 | 2,750 | ||||||
Potlatch Corp. | 59,803 | 2,850 | ||||||
PS Business Parks, Inc. | 24,638 | 1,436 | ||||||
RAIT Financial Trust (a) | 93,106 | 847 | ||||||
Redwood Trust, Inc. (a) | 40,429 | 1,065 | ||||||
Saul Centers, Inc. (a) | 17,300 | 948 | ||||||
Senior Housing Properties Trust | 114,516 | 2,567 | ||||||
Sovran Self Storage, Inc. (a) | 31,526 | 1,491 | ||||||
Strategic Hotels & Resorts, Inc. | 116,031 | 2,534 | ||||||
Sunstone Hotel Investors, Inc. | 101,409 | 2,820 | ||||||
Tanger Factory Outlet Centers, Inc. (a) | 47,734 | 2,011 | ||||||
Tejon Ranch Co. (a)* | 20,692 | 829 | ||||||
U-Store-It Trust (a) | 75,979 | 980 | ||||||
Washington Real Estate Investment Trust (a) | 69,282 | 2,440 | ||||||
99,584 | ||||||||
Retailing 3.4% | ||||||||
99 Cents Only Stores (a)* | 71,806 | 772 | ||||||
Aaron Rents, Inc., Class B (a) | 79,971 | 1,694 | ||||||
Aeropostale, Inc. (a)* | 124,632 | 2,854 | ||||||
Blockbuster, Inc., Class A (a)* | 336,021 | 1,767 | ||||||
Borders Group, Inc. (a) | 79,650 | 1,228 | ||||||
Brown Shoe Co., Inc. | 75,675 | 1,544 | ||||||
Building Materials Holding Corp. (a) | 39,348 | 309 | ||||||
Cabela’s, Inc., Class A (a)* | 50,136 | 979 | ||||||
Charming Shoppes, Inc. (a)* | 204,453 | 1,517 | ||||||
Christopher & Banks Corp. (a) | 48,724 | 668 | ||||||
Coldwater Creek, Inc. (a)* | 96,579 | 864 | ||||||
CSK Auto Corp. * | 67,403 | 768 | ||||||
Dick’s Sporting Goods, Inc. (a)* | 127,680 | 4,261 | ||||||
DSW, Inc., Class A (a)* | 5,000 | 113 | ||||||
Fred’s, Inc., Class A | 61,700 | 654 | ||||||
Genesco, Inc. * | 31,244 | 1,443 | ||||||
Group 1 Automotive, Inc. | 33,264 | 1,033 | ||||||
GSI Commerce, Inc. (a)* | 37,300 | 1,063 | ||||||
Guess?, Inc. | 66,072 | 3,395 | ||||||
Hibbett Sports, Inc. (a)* | 45,775 | 1,080 | ||||||
J. Crew Group, Inc. * | 52,600 | 1,967 | ||||||
Jo-Ann Stores, Inc. * | 40,400 | 779 | ||||||
Jos. A. Bank Clothiers, Inc. (a)* | 29,912 | 874 | ||||||
LKQ Corp. (a)* | 73,906 | 2,850 | ||||||
Netflix, Inc. (a)* | 95,086 | 2,517 | ||||||
New York & Co., Inc. (a)* | 13,500 | 95 | ||||||
NutriSystem, Inc. (a)* | 45,948 | 1,383 | ||||||
Pacific Sunwear of California, Inc. * | 102,861 | 1,720 | ||||||
Penske Automotive Group, Inc. (a) | 55,716 | 1,241 | ||||||
Pier 1 Imports, Inc. (a)* | 136,902 | 697 | ||||||
Rent-A-Center, Inc. * | 110,005 | 1,760 | ||||||
Sally Beauty Holdings, Inc. * | 147,250 | 1,362 | ||||||
Select Comfort Corp. (a)* | 67,801 | 775 | ||||||
Sonic Automotive, Inc., Class A (a) | 49,332 | 1,246 | ||||||
Stage Stores, Inc. | 59,527 | 1,117 | ||||||
The Buckle, Inc. (a) | 24,676 | 1,064 | ||||||
The Cato Corp., Class A (a) | 51,504 | 1,034 | ||||||
The Children’s Place Retail Stores, Inc. (a)* | 34,813 | 891 | ||||||
The Dress Barn, Inc. * | 79,412 | 1,302 | ||||||
The Finish Line, Inc., Class A | 57,517 | 216 | ||||||
The Gymboree Corp. * | 55,210 | 1,879 | ||||||
The Pep Boys — Manny, Moe & Jack (a) | 97,304 | 1,431 | ||||||
The Talbots, Inc. (a) | 32,970 | 485 | ||||||
Tween Brands, Inc. * | 42,755 | 1,313 | ||||||
Zale Corp. (a)* | 66,244 | 1,396 | ||||||
59,400 | ||||||||
Semiconductors & Semiconductor Equipment 4.0% | ||||||||
Advanced Energy Industries, Inc. * | 65,200 | 1,043 | ||||||
Amkor Technology, Inc. (a)* | 187,518 | 2,125 | ||||||
ANADIGICS, Inc. (a)* | 93,900 | 1,385 | ||||||
Applied Micro Circuits Corp. * | 433,863 | 1,397 | ||||||
Atheros Communications * | 89,843 | 3,153 | ||||||
ATMI, Inc. * | 51,954 | 1,670 | ||||||
Axcelis Technologies, Inc. (a)* | 144,941 | 680 | ||||||
Brooks Automation, Inc. * | 118,831 | 1,542 | ||||||
Cabot Microelectronics Corp. (a)* | 38,600 | 1,532 | ||||||
Cirrus Logic, Inc. * | 142,004 | 873 | ||||||
Conexant Systems, Inc. * | 635,555 | 814 | ||||||
Cree, Inc. (a)* | 134,296 | 3,760 | ||||||
Cymer, Inc. * | 55,265 | 2,349 | ||||||
Diodes, Inc. (a)* | 46,281 | 1,530 | ||||||
DSP Group, Inc. * | 47,711 | 753 | ||||||
Entegris, Inc. (a)* | 210,672 | 1,923 | ||||||
FEI Co. * | 42,400 | 1,230 | ||||||
FormFactor, Inc. * | 69,373 | 2,713 | ||||||
Hittite Microwave Corp. * | 18,809 | 945 | ||||||
Lattice Semiconductor Corp. * | 191,800 | 802 | ||||||
Micrel, Inc. | 93,905 | 850 | ||||||
Microsemi Corp. (a)* | 122,819 | 3,268 | ||||||
MKS Instruments, Inc. (a)* | 59,199 | 1,189 | ||||||
OmniVision Technologies, Inc. (a)* | 91,073 | 2,017 | ||||||
ON Semiconductor Corp. * | 313,046 | 3,193 | ||||||
Photronics, Inc. (a)* | 75,474 | 826 | ||||||
PMC-Sierra, Inc. (a)* | 340,923 | 3,072 | ||||||
Power Integrations, Inc. * | 62 | 2 | ||||||
RF Micro Devices, Inc. (a)* | 307,054 | 1,910 | ||||||
Semtech Corp. * | 114,129 | 1,953 |
See financial notes. 9
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Sigma Designs, Inc. (a)* | 35,000 | 2,057 | ||||||
Silicon Image, Inc. (a)* | 135,622 | 864 | ||||||
SiRF Technology Holdings, Inc. (a)* | 74,146 | 2,210 | ||||||
Skyworks Solutions, Inc. * | 261,808 | 2,414 | ||||||
Spansion, Inc., Class A (a)* | 68,263 | 481 | ||||||
Standard Microsystems Corp. * | 39,092 | 1,525 | ||||||
Tessera Technologies, Inc. * | 75,090 | 2,868 | ||||||
Trident Microsystems, Inc. * | 87,843 | 661 | ||||||
TriQuint Semiconductor, Inc. * | 211,300 | 1,325 | ||||||
Veeco Instruments, Inc. (a)* | 52,600 | 950 | ||||||
Vitesse Semiconductor Corp. * | 306,394 | 340 | ||||||
Zoran Corp. * | 80,924 | 2,064 | ||||||
68,258 | ||||||||
Software & Services 6.6% | ||||||||
ACI Worldwide, Inc. (a)* | 50,259 | 1,149 | ||||||
Acxiom Corp. | 117,376 | 1,542 | ||||||
Advent Software, Inc. (a)* | 28,114 | 1,556 | ||||||
ANSYS, Inc. * | 125,648 | 4,876 | ||||||
Ariba, Inc. (a)* | 147,100 | 1,904 | ||||||
Aspen Technology, Inc. * | 153,400 | 2,675 | ||||||
BearingPoint, Inc. (a)* | 316,657 | 1,517 | ||||||
Blackbaud, Inc. | 60,669 | 1,635 | ||||||
Blackboard, Inc. (a)* | 38,961 | 1,944 | ||||||
CACI International, Inc., Class A * | 51,027 | 2,748 | ||||||
Clarent Corp. * | 105,200 | — | ||||||
CMGI, Inc. * | 870,500 | 1,227 | ||||||
CNET Networks, Inc. (a)* | 222,430 | 1,797 | ||||||
CSG Systems International, Inc. (a)* | 78,045 | 1,602 | ||||||
DealerTrack Holdings, Inc. * | 44,336 | 2,176 | ||||||
EarthLink, Inc. * | 195,181 | 1,544 | ||||||
Epicor Software Corp. * | 89,100 | 1,041 | ||||||
Equinix, Inc. (a)* | 40,047 | 4,672 | ||||||
Euronet Worldwide, Inc. (a)* | 79,036 | 2,532 | ||||||
Gartner, Inc. (a)* | 86,849 | 1,902 | ||||||
Gevity HR, Inc. (a) | 37,581 | 375 | ||||||
Global Cash Access Holdings, Inc. (a)* | 50,118 | 501 | ||||||
Heartland Payment Systems, Inc. (a) | 6,000 | 180 | ||||||
Hewitt Associates, Inc., Class A * | 168,138 | 5,932 | ||||||
Informatica Corp. * | 140,581 | 2,401 | ||||||
InfoSpace, Inc. | 54,879 | 1,061 | ||||||
Internap Network Services Corp. (a)* | 79,600 | 1,326 | ||||||
Interwoven, Inc. * | 77,800 | 1,104 | ||||||
j2 Global Communications, Inc. * | 83,928 | 2,828 | ||||||
Jack Henry & Associates, Inc. (a) | 125,520 | 3,668 | ||||||
Macrovision Corp. (a)* | 83,851 | 2,012 | ||||||
Manhattan Associates, Inc. * | 47,647 | 1,437 | ||||||
ManTech International Corp., Class A * | 33,482 | 1,331 | ||||||
MAXIMUS, Inc. (a) | 36,974 | 1,772 | ||||||
Mentor Graphics Corp. (a)* | 130,767 | 2,095 | ||||||
MicroStrategy, Inc., Class A * | 15,662 | 1,540 | ||||||
Midway Games, Inc. (a)* | 34,900 | 109 | ||||||
Move, Inc. (a)* | 220,552 | 560 | ||||||
MPS Group, Inc. (a)* | 165,746 | 2,024 | ||||||
Nuance Communications, Inc. (a)* | 228,357 | 5,049 | ||||||
Openwave Systems, Inc. | 133,892 | 530 | ||||||
Perot Systems Corp., Class A * | 139,792 | 2,041 | ||||||
Progress Software Corp. * | 68,280 | 2,233 | ||||||
Quality Systems, Inc. (a) | 24,072 | 872 | ||||||
Quest Software, Inc. * | 104,788 | 1,823 | ||||||
RealNetworks, Inc. * | 188,330 | 1,367 | ||||||
SAIC, Inc. * | 181,600 | 3,579 | ||||||
Sapient Corp. * | 128,563 | 900 | ||||||
Secure Computing Corp. (a)* | 88,719 | 878 | ||||||
SPSS, Inc. * | 37,300 | 1,417 | ||||||
SRA International, Inc., Class A * | 67,495 | 1,853 | ||||||
Syntel, Inc. (a) | 883 | 38 | ||||||
Take-Two Interactive Software, Inc. (a)* | 103,504 | 1,944 | ||||||
The Ultimate Software Group, Inc. * | 37,000 | 1,277 | ||||||
TIBCO Software, Inc. * | 333,036 | 3,057 | ||||||
United Online, Inc. (a) | 103,887 | 1,828 | ||||||
VeriFone Holdings, Inc. (a)* | 76,243 | 3,769 | ||||||
Verint Systems, Inc. * | 44,222 | 1,109 | ||||||
WebMD Health Corp., Class A (a)* | 14,824 | 682 | ||||||
Websense, Inc. (a)* | 70,904 | 1,305 | ||||||
Wind River Systems, Inc. (a)* | 118,836 | 1,487 | ||||||
Wright Express Corp. * | 64,176 | 2,484 | ||||||
113,817 | ||||||||
Technology Hardware & Equipment 5.9% | ||||||||
3Com Corp. * | 630,919 | 3,079 | ||||||
Adaptec, Inc. * | 189,613 | 669 | ||||||
ADTRAN, Inc. | 101,505 | 2,443 | ||||||
Agilysys, Inc. (a) | 40,290 | 697 | ||||||
Andrew Corp. * | 244,100 | 3,579 | ||||||
Anixter International, Inc. (a)* | 47,443 | 3,409 | ||||||
Arris Group, Inc. (a)* | 174,790 | 2,010 | ||||||
Avid Technology, Inc. (a)* | 67,905 | 1,996 | ||||||
Avocent Corp. (a)* | 69,056 | 1,867 | ||||||
AVX Corp. (a) | 105,132 | 1,624 | ||||||
Benchmark Electronics, Inc. (a)* | 117,794 | 2,416 | ||||||
Black Box Corp. (a) | 22,192 | 887 | ||||||
Brightpoint, Inc. (a)* | 68,295 | 1,106 | ||||||
C-COR, Inc. * | 88,600 | 1,086 | ||||||
Checkpoint Systems, Inc. * | 62,444 | 1,889 | ||||||
Cogent, Inc. (a)* | 73,409 | 1,084 | ||||||
Cognex Corp. (a) | 61,809 | 1,111 | ||||||
Coherent, Inc. (a)* | 48,100 | 1,578 | ||||||
Comtech Telecommunications Corp. * | 37,800 | 2,051 | ||||||
Daktronics, Inc. (a) | 38,400 | 1,145 |
10 See financial notes.
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Dolby Laboratories, Inc., Class A * | 62,229 | 2,580 | ||||||
Dycom Industries, Inc. * | 68,932 | 1,947 | ||||||
Electro Scientific Industries, Inc. (a)* | 39,085 | 853 | ||||||
Electronics for Imaging, Inc. (a)* | 87,409 | 1,993 | ||||||
Emulex Corp. * | 146,290 | 3,169 | ||||||
Finisar Corp. (a)* | 360,100 | 835 | ||||||
Foundry Networks, Inc. * | 231,824 | 4,901 | ||||||
Harmonic, Inc. * | 114,900 | 1,416 | ||||||
Hughes Communications, Inc. (a)* | 10,000 | 596 | ||||||
Hutchinson Technology, Inc. (a)* | 30,886 | 733 | ||||||
Imation Corp. | 49,813 | 1,110 | ||||||
Insight Enterprises, Inc. * | 74,400 | 2,056 | ||||||
InterDigital, Inc. * | 76,594 | 1,646 | ||||||
Intermec, Inc. (a)* | 69,240 | 1,760 | ||||||
Itron, Inc. (a)* | 47,559 | 5,112 | ||||||
Ixia * | 108,640 | 1,136 | ||||||
KEMET Corp. * | 129,031 | 912 | ||||||
L-1 Identity Solutions, Inc. (a)* | 67,684 | 1,257 | ||||||
Littelfuse, Inc. * | 40,900 | 1,302 | ||||||
MasTec, Inc. (a)* | 73,273 | 1,157 | ||||||
MTS Systems Corp. | 30,175 | 1,342 | ||||||
National Instruments Corp. | 90,965 | 2,951 | ||||||
NETGEAR, Inc. * | 55,300 | 1,954 | ||||||
Newport Corp. * | 55,737 | 762 | ||||||
Palm, Inc. (a) | 165,160 | 1,490 | ||||||
Plantronics, Inc. (a) | 78,493 | 2,147 | ||||||
Plexus Corp. * | 63,162 | 1,630 | ||||||
Powerwave Technologies, Inc. (a)* | 159,674 | 888 | ||||||
Rackable Systems, Inc. (a)* | 31,589 | 431 | ||||||
Rofin-Sinar Technologies, Inc. (a)* | 27,768 | 2,183 | ||||||
Rogers Corp. (a)* | 23,367 | 1,146 | ||||||
ScanSource, Inc. (a)* | 33,778 | 1,248 | ||||||
Smart Modular Technologies (WWH), Inc. * | 82,600 | 730 | ||||||
Sonus Networks, Inc. * | 388,758 | 2,682 | ||||||
Sycamore Networks, Inc. * | 283,415 | 1,210 | ||||||
Synaptics, Inc. (a)* | 42,200 | 2,294 | ||||||
Technitrol, Inc. | 64,743 | 1,904 | ||||||
Tekelec (a)* | 110,627 | 1,460 | ||||||
UTStarcom, Inc. (a)* | 163,663 | 524 | ||||||
ViaSat, Inc. * | 42,919 | 1,309 | ||||||
102,482 | ||||||||
Telecommunication Services 1.5% | ||||||||
Alaska Communication Systems Group, Inc. | 75,300 | 1,225 | ||||||
Cincinnati Bell, Inc. (a)* | 395,445 | 2,143 | ||||||
Dobson Communications Corp., Class A * | 243,746 | 3,154 | ||||||
General Communication, Inc., Class A * | 78,500 | 921 | ||||||
IDT Corp., Class B (a)* | 76,705 | 616 | ||||||
Iowa Telecommunications Services, Inc. (a) | 50,800 | 1,002 | ||||||
iPCS, Inc. | 17,100 | 611 | ||||||
NeuStar, Inc., Class A * | 102,695 | 3,512 | ||||||
PAETEC Holding Corp. * | 98,700 | 1,327 | ||||||
Premiere Global Services, Inc. * | 128,800 | 2,123 | ||||||
Time Warner Telecom, Inc., Class A * | 190,408 | 4,425 | ||||||
United States Cellular Corp. * | 39,840 | 3,751 | ||||||
USA Mobility, Inc. (a)* | 50,109 | 784 | ||||||
25,594 | ||||||||
Transportation 2.0% | ||||||||
AirTran Holdings, Inc. (a)* | 125,398 | 1,305 | ||||||
Alaska Air Group, Inc. (a)* | 54,009 | 1,372 | ||||||
AMERCO (a)* | 13,104 | 846 | ||||||
American Commercial Lines, Inc. (a)* | 90,002 | 1,342 | ||||||
Arkansas Best Corp. (a) | 42,972 | 1,180 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 22,100 | 1,295 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 36,658 | 1,265 | ||||||
Eagle Bulk Shipping, Inc. (a) | 55,500 | 1,892 | ||||||
Forward Air Corp. (a) | 41,682 | 1,360 | ||||||
Genesee & Wyoming, Inc., Class A * | 65,972 | 1,934 | ||||||
Heartland Express, Inc. (a) | 95,652 | 1,333 | ||||||
Hub Group, Inc., Class A * | 65,292 | 1,656 | ||||||
JetBlue Airways Corp. (a)* | 285,303 | 2,605 | ||||||
Kirby Corp. * | 86,434 | 3,948 | ||||||
Knight Transportation, Inc. (a) | 80,288 | 1,282 | ||||||
Macquarie Infrastructure Co., LLC (a) | 60,251 | 2,516 | ||||||
Old Dominion Freight Line, Inc. * | 42,989 | 971 | ||||||
Pacer International, Inc. | 52,018 | 767 | ||||||
Republic Airways Holdings, Inc. * | 54,900 | 1,169 | ||||||
SkyWest, Inc. | 99,012 | 2,702 | ||||||
Werner Enterprises, Inc. (a) | 67,643 | 1,287 | ||||||
34,027 | ||||||||
Utilities 3.2% | ||||||||
ALLETE, Inc. (a) | 50,390 | 2,202 | ||||||
American States Water Co. (a) | 21,500 | 977 | ||||||
Amerigas Partners L.P. (a) | 59,000 | 2,236 | ||||||
Aquila, Inc. * | 576,791 | 2,411 | ||||||
Avista Corp. (a) | 86,012 | 1,897 | ||||||
Black Hills Corp. | 61,798 | 2,745 | ||||||
California Water Service Group (a) | 27,487 | 1,220 | ||||||
CH Energy Group, Inc. | 23,797 | 1,112 | ||||||
Cleco Corp. (a) | 79,915 | 2,106 | ||||||
El Paso Electric Co. * | 73,016 | 1,778 | ||||||
Ferrellgas Partners L.P. (a) | 58,100 | 1,301 |
See financial notes. 11
Table of Contents
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
IDACORP, Inc. | 70,798 | 2,470 | ||||||
ITC Holdings Corp. | 50,356 | 2,882 | ||||||
MGE Energy, Inc. (a) | 35,860 | 1,201 | ||||||
New Jersey Resources Corp. (a) | 45,609 | 2,246 | ||||||
Northwest Natural Gas Co. (a) | 44,895 | 2,163 | ||||||
NorthWestern Corp. (a) | 54,912 | 1,515 | ||||||
Otter Tail Corp. (a) | 45,409 | 1,573 | ||||||
Piedmont Natural Gas Co., Inc. (a) | 105,477 | 2,693 | ||||||
Portland General Electric Co. | 41,300 | 1,163 | ||||||
South Jersey Industries, Inc. | 47,960 | 1,801 | ||||||
Southwest Gas Corp. (a) | 68,496 | 2,038 | ||||||
Suburban Propane Partners L.P. | 47,200 | 2,273 | ||||||
The Empire District Electric Co. (a) | 46,600 | 1,121 | ||||||
The Laclede Group, Inc. | 27,877 | 970 | ||||||
UIL Holdings Corp. | 36,075 | 1,269 | ||||||
Unisource Energy Corp. (a) | 49,917 | 1,583 | ||||||
Vectren Corp. (a) | 124,117 | 3,480 | ||||||
WGL Holdings, Inc. (a) | 79,661 | 2,702 | ||||||
55,128 | ||||||||
Total Common Stock (Cost $1,372,632) | 1,698,058 | |||||||
Foreign Common Stock 0.6% of net assets | ||||||||
Bermuda 0.6% | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Helen of Troy Ltd. * | 50,500 | 909 | ||||||
Insurance 0.4% | ||||||||
Assured Guaranty Ltd. | 64,537 | 1,489 | ||||||
Enstar Group Ltd. * | 3,900 | 500 | ||||||
Max Capital Group Ltd. | 98,984 | 2,800 | ||||||
Platinum Underwriters Holdings Ltd. | 96,857 | 3,487 | ||||||
8,276 | ||||||||
Software & Services 0.1% | ||||||||
VistaPrint Ltd. * | 20,600 | 980 | ||||||
10,165 | ||||||||
Total Foreign Common Stock (Cost $9,379) | 10,165 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.9% of net assets | ||||||||
Commercial Paper & Other Obligations 0.8% | ||||||||
Wells Fargo, Grand Cayman Time Deposit 4.75%, 11/01/07 | 14,047 | 14,047 | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill 3.92%, 12/20/07 (b) | 1,130 | 1,124 | ||||||
Total Short-Term Investments (Cost $15,171) | 15,171 | |||||||
End of Investments.
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 35.3% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 609,312,790 | 609,313 | ||||||
End of collateral invested for securities on loan.
At 10/31/07 the tax basis cost of the fund’s investments was $1,395,610 and the unrealized appreciation and depreciation were $468,572 and ($140,788), respectively, with a net unrealized appreciation of $327,784.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. |
In addition to the above, the fund held the following at 10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, e-mini, Long, expires 12/21/07 | 165 | 13,733 | 714 |
12 See financial notes.
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
99.8 | % | Common Stock | 5,286,878 | 8,551,595 | ||||||||
0.1 | % | Short-Term Investments | 5,314 | 5,314 | ||||||||
99.9 | % | Total Investments | 5,292,192 | 8,556,909 | ||||||||
1.5 | % | Collateral Invested for Securities on Loan | 133,348 | 133,348 | ||||||||
(1.4 | )% | Other Assets and Liabilities, Net | (123,243 | ) | ||||||||
100.0 | % | Net Assets | 8,567,014 |
Number of | Value | |||||
Security | Shares | ($ x 1,000) | ||||
Common Stock 99.8% of net assets | ||||||
Automobiles & Components 0.6% | ||||||
Ford Motor Co. (a)* | 1,201,277 | 10,655 | ||||
General Motors Corp. (a) | 364,825 | 14,297 | ||||
Harley-Davidson, Inc. | 160,945 | 8,289 | ||||
Johnson Controls, Inc. | 374,052 | 16,354 | ||||
The Goodyear Tire & Rubber Co. * | 107,696 | 3,247 | ||||
52,842 | ||||||
Banks 4.3% | ||||||
BB&T Corp. | 339,616 | 12,556 | ||||
Comerica, Inc. | 108,308 | 5,056 | ||||
Commerce Bancorp, Inc. | 98,200 | 4,002 | ||||
Countrywide Financial Corp. (a) | 347,415 | 5,392 | ||||
Fannie Mae | 605,431 | 34,534 | ||||
Fifth Third Bancorp | 342,325 | 10,708 | ||||
First Horizon National Corp. (a) | 73,806 | 1,925 | ||||
Freddie Mac | 431,564 | 22,540 | ||||
Hudson City Bancorp, Inc. | 250,000 | 3,915 | ||||
Huntington Bancshares, Inc. | 153,126 | 2,742 | ||||
KeyCorp | 247,555 | 7,043 | ||||
M&T Bank Corp. | 50,455 | 5,019 | ||||
Marshall & Ilsley Corp. | 144,183 | 6,157 | ||||
MGIC Investment Corp. (a) | 24,520 | 475 | ||||
National City Corp. | 362,023 | 8,779 | ||||
PNC Financial Services Group, Inc. | 218,211 | 15,746 | ||||
Regions Financial Corp. | 428,131 | 11,611 | ||||
Sovereign Bancorp, Inc. (a) | 226,282 | 3,265 | ||||
SunTrust Banks, Inc. | 230,336 | 16,722 | ||||
Synovus Financial Corp. | 202,697 | 5,343 | ||||
U.S. Bancorp | 1,063,732 | 35,273 | ||||
Wachovia Corp. | 1,194,270 | 54,614 | ||||
Washington Mutual, Inc. | 556,299 | 15,510 | ||||
Wells Fargo & Co. | 2,123,976 | 72,236 | ||||
Zions Bancorp | 64,162 | 3,793 | ||||
364,956 | ||||||
Capital Goods 9.2% | ||||||
3M Co. | 459,061 | 39,645 | ||||
American Standard Cos., Inc. | 109,817 | 4,093 | ||||
Caterpillar, Inc. | 411,787 | 30,723 | ||||
Cooper Industries Ltd., Class A | 125,422 | 6,571 | ||||
Cummins, Inc. | 61,954 | 7,432 | ||||
Danaher Corp. | 148,019 | 12,681 | ||||
Deere & Co. | 146,984 | 22,768 | ||||
Dover Corp. | 116,823 | 5,374 | ||||
Eaton Corp. | 96,095 | 8,896 | ||||
Emerson Electric Co. | 520,938 | 27,229 | ||||
Fluor Corp. | 52,999 | 8,374 | ||||
General Dynamics Corp. | 258,472 | 23,511 | ||||
General Electric Co. | 6,434,867 | 264,859 | ||||
Goodrich Corp. | 75,218 | 5,240 | ||||
Honeywell International, Inc. | 527,320 | 31,855 | ||||
Illinois Tool Works, Inc. | 258,970 | 14,829 | ||||
Ingersoll-Rand Co., Ltd., Class A | 194,010 | 9,768 | ||||
ITT Corp. | 121,760 | 8,148 | ||||
L-3 Communications Holdings, Inc. | 74,495 | 8,168 | ||||
Lockheed Martin Corp. | 232,952 | 25,634 | ||||
Masco Corp. | 245,081 | 5,902 | ||||
Northrop Grumman Corp. | 220,121 | 18,407 | ||||
PACCAR, Inc. | 233,020 | 12,947 | ||||
Pall Corp. | 48,522 | 1,944 | ||||
Parker Hannifin Corp. | 115,506 | 9,283 | ||||
Precision Castparts Corp. | 85,000 | 12,734 | ||||
Raytheon Co. | 295,139 | 18,774 | ||||
Rockwell Automation, Inc. | 89,641 | 6,174 | ||||
Rockwell Collins, Inc. | 105,024 | 7,857 | ||||
Terex Corp. * | 60,000 | 4,453 | ||||
Textron, Inc. | 156,626 | 10,840 | ||||
The Boeing Co. | 510,490 | 50,329 | ||||
Tyco International Ltd. | 289,253 | 11,909 | ||||
United Technologies Corp. | 647,334 | 49,579 | ||||
W.W. Grainger, Inc. | 43,299 | 3,893 | ||||
790,823 | ||||||
Commercial Services & Supplies 0.5% | ||||||
Allied Waste Industries, Inc. * | 104,886 | 1,326 | ||||
Avery Dennison Corp. | 57,157 | 3,309 |
See financial notes. 1
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Cintas Corp. | 82,791 | 3,030 | ||||||
Equifax, Inc. | 82,320 | 3,169 | ||||||
Monster Worldwide, Inc. * | 78,126 | 3,170 | ||||||
Pitney Bowes, Inc. | 135,254 | 5,416 | ||||||
R.R. Donnelley & Sons Co. | 133,447 | 5,377 | ||||||
Robert Half International, Inc. | 104,073 | 3,132 | ||||||
Waste Management, Inc. | 345,865 | 12,586 | ||||||
40,515 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Brunswick Corp. | 56,303 | 1,256 | ||||||
Centex Corp. (a) | 73,429 | 1,840 | ||||||
Coach, Inc. * | 231,716 | 8,472 | ||||||
D.R. Horton, Inc. | 166,456 | 2,112 | ||||||
Eastman Kodak Co. (a) | 172,361 | 4,940 | ||||||
Fortune Brands, Inc. | 93,149 | 7,803 | ||||||
Harman International Industries, Inc. | 40,600 | 3,419 | ||||||
Hasbro, Inc. (a) | 108,795 | 3,248 | ||||||
Jones Apparel Group, Inc. | 68,284 | 1,430 | ||||||
KB Home (a) | 39,275 | 1,086 | ||||||
Leggett & Platt, Inc. | 109,803 | 2,134 | ||||||
Lennar Corp., Class A (a) | 80,382 | 1,837 | ||||||
Liz Claiborne, Inc. (a) | 63,619 | 1,811 | ||||||
Mattel, Inc. | 246,667 | 5,153 | ||||||
Newell Rubbermaid, Inc. | 189,418 | 5,523 | ||||||
NIKE, Inc., Class B | 241,742 | 16,018 | ||||||
Polo Ralph Lauren Corp., Class A | 24,100 | 1,658 | ||||||
Pulte Homes, Inc. | 124,686 | 1,850 | ||||||
Snap-on, Inc. | 36,954 | 1,844 | ||||||
The Black & Decker Corp. | 46,450 | 4,176 | ||||||
The Stanley Works | 37,174 | 2,139 | ||||||
VF Corp. | 56,207 | 4,897 | ||||||
Whirlpool Corp. | 49,291 | 3,903 | ||||||
88,549 | ||||||||
Consumer Services 1.6% | ||||||||
Apollo Group, Inc., Class A * | 88,210 | 6,992 | ||||||
Carnival Corp. | 278,107 | 13,344 | ||||||
Darden Restaurants, Inc. | 79,330 | 3,411 | ||||||
H&R Block, Inc. | 159,794 | 3,484 | ||||||
Harrah’s Entertainment, Inc. | 113,304 | 9,999 | ||||||
International Game Technology | 208,969 | 9,113 | ||||||
Marriott International, Inc., Class A | 201,734 | 8,293 | ||||||
McDonald’s Corp. | 752,901 | 44,948 | ||||||
Starbucks Corp. * | 438,010 | 11,686 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 137,073 | 7,794 | ||||||
Wendy’s International, Inc. | 66,758 | 2,320 | ||||||
Wyndham Worldwide Corp. | 114,543 | 3,760 | ||||||
YUM! Brands, Inc. | 348,466 | 14,033 | ||||||
139,177 | ||||||||
Diversified Financials 9.3% | ||||||||
American Capital Strategies Ltd. (a) | 55,500 | 2,409 | ||||||
American Express Co. | 782,434 | 47,689 | ||||||
Ameriprise Financial, Inc. | 162,761 | 10,251 | ||||||
Bank of America Corp. | 2,818,232 | 136,064 | ||||||
Bank of New York Mellon Corp. | 708,303 | 34,601 | ||||||
Capital One Financial Corp. (a) | 256,989 | 16,856 | ||||||
CIT Group, Inc. | 117,238 | 4,131 | ||||||
Citigroup, Inc. | 3,067,843 | 128,543 | ||||||
CME Group, Inc. | 24,890 | 16,583 | ||||||
Discover Financial Services | 301,624 | 5,821 | ||||||
E*TRADE Financial Corp. * | 264,098 | 2,942 | ||||||
Federated Investors, Inc., Class B | 46,211 | 1,987 | ||||||
Franklin Resources, Inc. | 105,536 | 13,686 | ||||||
Janus Capital Group, Inc. (a) | 115,451 | 3,984 | ||||||
JPMorgan Chase & Co. | 2,196,216 | 103,222 | ||||||
Legg Mason, Inc. | 81,700 | 6,776 | ||||||
Lehman Brothers Holdings, Inc. (a) | 328,806 | 20,827 | ||||||
Leucadia National Corp. (a) | 51,000 | 2,584 | ||||||
Merrill Lynch & Co., Inc. | 554,790 | 36,627 | ||||||
Moody’s Corp. | 146,491 | 6,405 | ||||||
Morgan Stanley | 682,848 | 45,928 | ||||||
Northern Trust Corp. | 126,934 | 9,547 | ||||||
NYSE Euronext | 80,000 | 7,510 | ||||||
SLM Corp. | 257,062 | 12,123 | ||||||
State Street Corp. | 217,528 | 17,352 | ||||||
T. Rowe Price Group, Inc. | 166,026 | 10,666 | ||||||
The Bear Stearns Cos., Inc. | 76,323 | 8,670 | ||||||
The Charles Schwab Corp. (c) | 642,696 | 14,936 | ||||||
The Goldman Sachs Group, Inc. | 256,167 | 63,509 | ||||||
792,229 | ||||||||
Energy 11.5% | ||||||||
Anadarko Petroleum Corp. | 287,632 | 16,976 | ||||||
Apache Corp. | 195,349 | 20,279 | ||||||
Baker Hughes, Inc. | 197,241 | 17,105 | ||||||
BJ Services Co. | 151,475 | 3,816 | ||||||
Chesapeake Energy Corp. (a) | 242,500 | 9,574 | ||||||
Chevron Corp. | 1,379,919 | 126,276 | ||||||
ConocoPhillips | 1,029,904 | 87,501 | ||||||
CONSOL Energy, Inc. | 98,100 | 5,543 | ||||||
Devon Energy Corp. | 278,173 | 25,981 | ||||||
El Paso Corp. | 412,734 | 7,289 | ||||||
ENSCO International, Inc. | 9,700 | 538 | ||||||
EOG Resources, Inc. | 151,607 | 13,432 | ||||||
Exxon Mobil Corp. | 3,560,831 | 327,561 | ||||||
Halliburton Co. | 577,656 | 22,771 | ||||||
Hess Corp. | 142,902 | 10,233 | ||||||
Marathon Oil Corp. | 445,922 | 26,367 | ||||||
Murphy Oil Corp. | 98,027 | 7,218 | ||||||
Nabors Industries Ltd. * | 175,496 | 4,928 | ||||||
National-Oilwell Varco, Inc. * | 223,610 | 16,377 | ||||||
Noble Corp. | 164,182 | 8,694 |
2 See financial notes.
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Noble Energy, Inc. | 54,000 | 4,133 | ||||||
Occidental Petroleum Corp. | 548,444 | 37,870 | ||||||
Peabody Energy Corp. | 100,000 | 5,575 | ||||||
Rowan Cos., Inc. | 64,341 | 2,508 | ||||||
Schlumberger Ltd. | 737,559 | 71,226 | ||||||
Smith International, Inc. | 60,000 | 3,963 | ||||||
Spectra Energy Corp. | 357,734 | 9,294 | ||||||
Sunoco, Inc. | 72,711 | 5,352 | ||||||
Tesoro Corp. | 43,000 | 2,603 | ||||||
The Williams Cos., Inc. | 369,702 | 13,490 | ||||||
Transocean, Inc. * | 180,188 | 21,509 | ||||||
Valero Energy Corp. | 343,985 | 24,227 | ||||||
Weatherford International Ltd. * | 208,531 | 13,536 | ||||||
XTO Energy, Inc. | 229,187 | 15,213 | ||||||
988,958 | ||||||||
Food & Staples Retailing 2.3% | ||||||||
Costco Wholesale Corp. | 275,971 | 18,562 | ||||||
CVS Caremark Corp. | 965,200 | 40,316 | ||||||
Safeway, Inc. | 277,435 | 9,433 | ||||||
Supervalu, Inc. | 126,724 | 4,910 | ||||||
Sysco Corp. | 361,295 | 12,389 | ||||||
The Kroger Co. | 472,546 | 13,888 | ||||||
Wal-Mart Stores, Inc. | 1,524,393 | 68,918 | ||||||
Walgreen Co. | 626,399 | 24,837 | ||||||
Whole Foods Market, Inc. (a) | 63,200 | 3,131 | ||||||
196,384 | ||||||||
Food, Beverage & Tobacco 5.0% | ||||||||
Altria Group, Inc. | 1,313,189 | 95,771 | ||||||
Anheuser-Busch Cos., Inc. | 476,108 | 24,415 | ||||||
Archer-Daniels-Midland Co. | 397,569 | 14,225 | ||||||
Brown-Forman Corp., Class B | 42,049 | 3,111 | ||||||
Campbell Soup Co. | 122,713 | 4,538 | ||||||
Coca-Cola Enterprises, Inc. | 191,467 | 4,942 | ||||||
ConAgra Foods, Inc. | 331,155 | 7,858 | ||||||
Constellation Brands, Inc., Class A * | 121,205 | 3,045 | ||||||
Dean Foods Co. | 44,400 | 1,233 | ||||||
General Mills, Inc. | 227,963 | 13,160 | ||||||
H.J. Heinz Co. | 216,951 | 10,149 | ||||||
Kellogg Co. | 156,085 | 8,240 | ||||||
Kraft Foods, Inc., Class A | 998,400 | 33,356 | ||||||
McCormick & Co., Inc. | 81,073 | 2,840 | ||||||
Molson Coors Brewing Co., Class B | 58,550 | 3,351 | ||||||
PepsiCo, Inc. | 1,044,258 | 76,983 | ||||||
Reynolds American, Inc. | 113,578 | 7,318 | ||||||
Sara Lee Corp. | 486,730 | 8,050 | ||||||
The Coca-Cola Co. | 1,312,447 | 81,057 | ||||||
The Hershey Co. | 99,392 | 4,285 | ||||||
The Pepsi Bottling Group, Inc. | 82,411 | 3,550 | ||||||
Tyson Foods, Inc., Class A | 138,602 | 2,190 | ||||||
UST, Inc. | 100,296 | 5,348 | ||||||
Wm. Wrigley Jr. Co. | 129,634 | 7,994 | ||||||
427,009 | ||||||||
Health Care Equipment & Services 4.0% | ||||||||
Aetna, Inc. | 351,072 | 19,720 | ||||||
AmerisourceBergen Corp. | 118,382 | 5,577 | ||||||
Baxter International, Inc. | 425,811 | 25,553 | ||||||
Becton, Dickinson & Co. | 162,294 | 13,545 | ||||||
Boston Scientific Corp. * | 646,650 | 8,969 | ||||||
C.R. Bard, Inc. | 64,512 | 5,394 | ||||||
Cardinal Health, Inc. | 260,880 | 17,748 | ||||||
CIGNA Corp. | 211,410 | 11,097 | ||||||
Coventry Health Care, Inc. * | 102,747 | 6,197 | ||||||
Covidien Ltd. | 309,353 | 12,869 | ||||||
Express Scripts, Inc. * | 176,254 | 11,122 | ||||||
Hospira, Inc. * | 94,468 | 3,904 | ||||||
Humana, Inc. * | 108,589 | 8,139 | ||||||
IMS Health, Inc. | 127,883 | 3,224 | ||||||
Laboratory Corp. of America Holdings * | 79,844 | 5,489 | ||||||
Manor Care, Inc. | 31,074 | 2,069 | ||||||
McKesson Corp. | 197,566 | 13,059 | ||||||
Medco Health Solutions, Inc. * | 192,338 | 18,153 | ||||||
Medtronic, Inc. | 721,996 | 34,251 | ||||||
Patterson Cos., Inc. (a)* | 77,344 | 3,025 | ||||||
Quest Diagnostics, Inc. | 89,642 | 4,767 | ||||||
St. Jude Medical, Inc. * | 211,659 | 8,621 | ||||||
Stryker Corp. | 187,442 | 13,308 | ||||||
Tenet Healthcare Corp. * | 48,977 | 172 | ||||||
UnitedHealth Group, Inc. | 868,708 | 42,697 | ||||||
Varian Medical Systems, Inc. * | 50,000 | 2,438 | ||||||
WellPoint, Inc. * | 394,699 | 31,272 | ||||||
Zimmer Holdings, Inc. * | 155,969 | 10,838 | ||||||
343,217 | ||||||||
Household & Personal Products 2.4% | ||||||||
Avon Products, Inc. | 288,320 | 11,815 | ||||||
Colgate-Palmolive Co. | 329,557 | 25,135 | ||||||
Kimberly-Clark Corp. | 294,411 | 20,871 | ||||||
The Clorox Co. | 96,612 | 6,045 | ||||||
The Estee Lauder Cos., Inc., Class A | 63,300 | 2,779 | ||||||
The Procter & Gamble Co. | 1,974,570 | 137,272 | ||||||
203,917 | ||||||||
Insurance 4.5% | ||||||||
ACE Ltd. | 204,495 | 12,394 | ||||||
AFLAC, Inc. | 324,968 | 20,402 | ||||||
Ambac Financial Group, Inc. (a) | 70,084 | 2,581 | ||||||
American International Group, Inc. | 1,633,332 | 103,096 | ||||||
AON Corp. | 209,515 | 9,495 | ||||||
Assurant, Inc. | 10,600 | 619 | ||||||
Cincinnati Financial Corp. | 107,986 | 4,296 | ||||||
Genworth Financial, Inc., Class A | 289,138 | 7,894 |
See financial notes. 3
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Lincoln National Corp. | 184,170 | 11,487 | ||||||
Loews Corp. | 280,987 | 13,794 | ||||||
Marsh & McLennan Cos., Inc. | 345,584 | 8,947 | ||||||
MBIA, Inc. | 83,124 | 3,578 | ||||||
MetLife, Inc. | 494,911 | 34,075 | ||||||
Principal Financial Group, Inc. | 178,412 | 12,073 | ||||||
Prudential Financial, Inc. | 311,081 | 30,088 | ||||||
SAFECO Corp. | 60,332 | 3,493 | ||||||
The Allstate Corp. | 395,082 | 20,702 | ||||||
The Chubb Corp. | 269,560 | 14,381 | ||||||
The Hartford Financial Services Group, Inc. | 203,517 | 19,747 | ||||||
The Progressive Corp. | 462,928 | 8,564 | ||||||
The Travelers Cos., Inc. | 445,852 | 23,278 | ||||||
Torchmark Corp. | 64,261 | 4,187 | ||||||
Unum Group | 216,938 | 5,063 | ||||||
XL Capital Ltd., Class A | 110,199 | 7,929 | ||||||
382,163 | ||||||||
Materials 3.3% | ||||||||
Air Products & Chemicals, Inc. | 142,154 | 13,910 | ||||||
Alcoa, Inc. | 544,137 | 21,542 | ||||||
Allegheny Technologies, Inc. | 54,355 | 5,553 | ||||||
Ashland, Inc. | 39,827 | 2,339 | ||||||
Ball Corp. | 60,522 | 3,001 | ||||||
Bemis Co., Inc. | 60,050 | 1,691 | ||||||
E.I. du Pont de Nemours & Co. | 589,978 | 29,210 | ||||||
Eastman Chemical Co. | 46,991 | 3,129 | ||||||
Ecolab, Inc. | 107,495 | 5,071 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 208,896 | 24,583 | ||||||
Hercules, Inc. | 77,522 | 1,458 | ||||||
International Flavors & Fragrances, Inc. | 48,667 | 2,541 | ||||||
International Paper Co. (a) | 305,503 | 11,291 | ||||||
MeadWestvaco Corp. | 113,577 | 3,821 | ||||||
Monsanto Co. | 346,476 | 33,826 | ||||||
Newmont Mining Corp. | 258,512 | 13,148 | ||||||
Nucor Corp. | 202,304 | 12,547 | ||||||
Pactiv Corp. * | 97,595 | 2,681 | ||||||
PPG Industries, Inc. | 111,661 | 8,346 | ||||||
Praxair, Inc. | 206,880 | 17,684 | ||||||
Rohm & Haas Co. | 89,042 | 4,620 | ||||||
Sealed Air Corp. | 108,110 | 2,695 | ||||||
Sigma-Aldrich Corp. | 78,826 | 4,073 | ||||||
Temple-Inland, Inc. | 65,759 | 3,529 | ||||||
The Dow Chemical Co. | 600,293 | 27,037 | ||||||
Titanium Metals Corp. * | 27,000 | 950 | ||||||
United States Steel Corp. | 78,948 | 8,519 | ||||||
Vulcan Materials Co. (a) | 57,904 | 4,951 | ||||||
Weyerhaeuser Co. | 129,633 | 9,840 | ||||||
283,586 | ||||||||
Media 2.9% | ||||||||
CBS Corp., Class B | 461,311 | 13,240 | ||||||
Clear Channel Communications, Inc. | 285,400 | 10,780 | ||||||
Comcast Corp., Class A * | 1,949,048 | 41,027 | ||||||
Dow Jones & Co., Inc. (a) | 28,392 | 1,698 | ||||||
Gannett Co., Inc. | 145,039 | 6,151 | ||||||
Meredith Corp. | 17,454 | 1,086 | ||||||
News Corp., Class A | 1,468,411 | 31,820 | ||||||
Omnicom Group, Inc. | 224,982 | 11,470 | ||||||
The DIRECTV Group, Inc. * | 341,500 | 9,043 | ||||||
The E.W. Scripps Co., Class A | 39,225 | 1,765 | ||||||
The Interpublic Group of Cos., Inc. * | 260,619 | 2,697 | ||||||
The McGraw-Hill Cos., Inc. | 226,411 | 11,330 | ||||||
The New York Times Co., Class A (a) | 82,087 | 1,606 | ||||||
The Walt Disney Co. | 1,305,276 | 45,202 | ||||||
Time Warner, Inc. | 2,390,129 | 43,644 | ||||||
Tribune Co. | 17,257 | 522 | ||||||
Viacom, Inc., Class B * | 453,503 | 18,725 | ||||||
251,806 | ||||||||
Pharmaceuticals & Biotechnology 7.8% | ||||||||
Abbott Laboratories | 977,375 | 53,384 | ||||||
Allergan, Inc. | 195,522 | 13,213 | ||||||
Amgen, Inc. * | 726,218 | 42,201 | ||||||
Applied Biosystems Group-Applera Corp. | 121,942 | 4,529 | ||||||
Barr Pharmaceuticals, Inc. * | 66,437 | 3,808 | ||||||
Biogen Idec, Inc. * | 204,261 | 15,205 | ||||||
Bristol-Myers Squibb Co. | 1,259,128 | 37,761 | ||||||
Celgene Corp. * | 161,400 | 10,653 | ||||||
Eli Lilly and Co. | 632,625 | 34,257 | ||||||
Forest Laboratories, Inc. * | 206,823 | 8,081 | ||||||
Genzyme Corp. * | 165,507 | 12,574 | ||||||
Gilead Sciences, Inc. * | 582,744 | 26,917 | ||||||
Johnson & Johnson | 1,818,995 | 118,544 | ||||||
King Pharmaceuticals, Inc. * | 172,292 | 1,826 | ||||||
Merck & Co., Inc. | 1,401,827 | 81,671 | ||||||
Millipore Corp. * | 16,708 | 1,297 | ||||||
Mylan Laboratories, Inc. | 65,849 | 990 | ||||||
PerkinElmer, Inc. | 71,880 | 1,978 | ||||||
Pfizer, Inc. | 4,477,857 | 110,200 | ||||||
Schering-Plough Corp. | 961,526 | 29,346 | ||||||
Thermo Fisher Scientific, Inc. * | 255,799 | 15,044 | ||||||
Waters Corp. * | 60,968 | 4,693 | ||||||
Watson Pharmaceuticals, Inc. * | 64,111 | 1,959 | ||||||
Wyeth | 861,882 | 41,913 | ||||||
672,044 | ||||||||
Real Estate 0.9% | ||||||||
Apartment Investment & Management Co., Class A | 57,401 | 2,682 | ||||||
AvalonBay Communities, Inc. | 33,250 | 4,078 | ||||||
Boston Properties, Inc. | 65,900 | 7,140 |
4 See financial notes.
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
CB Richard Ellis Group, Inc., Class A * | 14,700 | 358 | ||||||
Developers Diversified Realty Corp. | 40,000 | 2,016 | ||||||
Equity Residential | 186,292 | 7,783 | ||||||
General Growth Properties, Inc. | 75,000 | 4,077 | ||||||
Host Hotels & Resorts, Inc. | 42,458 | 941 | ||||||
Kimco Realty Corp. | 135,000 | 5,605 | ||||||
Plum Creek Timber Co., Inc. | 113,050 | 5,050 | ||||||
ProLogis | 155,206 | 11,134 | ||||||
Public Storage | 68,725 | 5,565 | ||||||
Simon Property Group, Inc. | 133,510 | 13,900 | ||||||
Vornado Realty Trust | 73,127 | 8,170 | ||||||
78,499 | ||||||||
Retailing 3.1% | ||||||||
Abercrombie & Fitch Co., Class A | 16,200 | 1,283 | ||||||
Amazon.com, Inc. * | 184,888 | 16,483 | ||||||
AutoNation, Inc. (a)* | 81,366 | 1,439 | ||||||
AutoZone, Inc. * | 29,807 | 3,708 | ||||||
Bed Bath & Beyond, Inc. * | 165,965 | 5,633 | ||||||
Best Buy Co., Inc. | 252,741 | 12,263 | ||||||
Big Lots, Inc. (a)* | 67,209 | 1,612 | ||||||
Circuit City Stores, Inc. | 25,708 | 204 | ||||||
Dillard’s, Inc., Class A (a) | 33,811 | 779 | ||||||
eBay, Inc. * | 710,906 | 25,664 | ||||||
Expedia, Inc. * | 128,000 | 4,180 | ||||||
Family Dollar Stores, Inc. | 90,192 | 2,286 | ||||||
Genuine Parts Co. | 106,453 | 5,224 | ||||||
IAC/InterActiveCorp * | 46,400 | 1,367 | ||||||
J.C. Penney Co., Inc. | 148,384 | 8,345 | ||||||
Kohl’s Corp. * | 214,451 | 11,788 | ||||||
Limited Brands, Inc. | 214,787 | 4,727 | ||||||
Lowe’s Cos., Inc. | 954,320 | 25,662 | ||||||
Macy’s, Inc. | 288,990 | 9,256 | ||||||
Nordstrom, Inc. | 142,282 | 5,611 | ||||||
Office Depot, Inc. * | 171,783 | 3,223 | ||||||
OfficeMax, Inc. | 47,067 | 1,490 | ||||||
RadioShack Corp. (a) | 79,867 | 1,647 | ||||||
Sears Holdings Corp. (a)* | 47,475 | 6,399 | ||||||
Staples, Inc. | 447,597 | 10,447 | ||||||
Target Corp. | 532,939 | 32,701 | ||||||
The Gap, Inc. | 352,174 | 6,656 | ||||||
The Home Depot, Inc. | 1,082,782 | 34,118 | ||||||
The Sherwin-Williams Co. | 67,751 | 4,331 | ||||||
The TJX Cos., Inc. | 292,939 | 8,475 | ||||||
Tiffany & Co. | 75,208 | 4,075 | ||||||
261,076 | ||||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||
Advanced Micro Devices, Inc. (a)* | 306,171 | 4,005 | ||||||
Altera Corp. | 224,794 | 4,410 | ||||||
Analog Devices, Inc. | 205,622 | 6,880 | ||||||
Applied Materials, Inc. | 868,949 | 16,875 | ||||||
Broadcom Corp., Class A * | 290,501 | 9,456 | ||||||
Intel Corp. | 3,654,566 | 98,308 | ||||||
KLA-Tencor Corp. | 123,967 | 6,527 | ||||||
Linear Technology Corp. (a) | 155,838 | 5,146 | ||||||
LSI Corp. * | 254,038 | 1,677 | ||||||
MEMC Electronic Materials, Inc. * | 70,000 | 5,125 | ||||||
Microchip Technology, Inc. | 68,000 | 2,256 | ||||||
Micron Technology, Inc. * | 432,113 | 4,541 | ||||||
National Semiconductor Corp. | 178,430 | 4,486 | ||||||
Novellus Systems, Inc. * | 78,774 | 2,238 | ||||||
NVIDIA Corp. * | 330,150 | 11,681 | ||||||
Teradyne, Inc. * | 131,483 | 1,622 | ||||||
Texas Instruments, Inc. | 939,340 | 30,622 | ||||||
Xilinx, Inc. | 214,068 | 5,223 | ||||||
221,078 | ||||||||
Software & Services 6.2% | ||||||||
Adobe Systems, Inc. * | 366,422 | 17,552 | ||||||
Affiliated Computer Services, Inc., Class A * | 59,172 | 2,998 | ||||||
Akamai Technologies, Inc. * | 50,000 | 1,959 | ||||||
Autodesk, Inc. * | 145,146 | 7,098 | ||||||
Automatic Data Processing, Inc. | 344,260 | 17,062 | ||||||
BMC Software, Inc. * | 142,401 | 4,819 | ||||||
CA, Inc. | 280,095 | 7,409 | ||||||
Citrix Systems, Inc. * | 88,145 | 3,789 | ||||||
Cognizant Technology Solutions Corp., Class A * | 180,000 | 7,463 | ||||||
Computer Sciences Corp. * | 109,953 | 6,420 | ||||||
Compuware Corp. * | 182,117 | 1,821 | ||||||
Convergys Corp. * | 92,806 | 1,701 | ||||||
Electronic Arts, Inc. * | 192,319 | 11,755 | ||||||
Electronic Data Systems Corp. | 344,188 | 7,431 | ||||||
Fidelity National Information Services, Inc. | 104,000 | 4,796 | ||||||
Fiserv, Inc. * | 106,597 | 5,905 | ||||||
Google, Inc., Class A * | 140,170 | 99,100 | ||||||
Intuit, Inc. * | 218,776 | 7,038 | ||||||
Microsoft Corp. | 5,296,763 | 194,974 | ||||||
Novell, Inc. * | 224,287 | 1,696 | ||||||
Oracle Corp. * | 2,550,731 | 56,550 | ||||||
Paychex, Inc. | 210,830 | 8,808 | ||||||
Symantec Corp. * | 595,034 | 11,175 | ||||||
Unisys Corp. * | 184,292 | 1,120 | ||||||
VeriSign, Inc. * | 148,800 | 5,073 | ||||||
Western Union Co. | 462,862 | 10,201 | ||||||
Yahoo!, Inc. * | 759,591 | 23,623 | ||||||
529,336 | ||||||||
Technology Hardware & Equipment 8.0% | ||||||||
Agilent Technologies, Inc. * | 268,167 | 9,882 | ||||||
Apple, Inc. * | 539,125 | 102,407 | ||||||
Ciena Corp. * | 47,966 | 2,296 | ||||||
Cisco Systems, Inc. * | 3,862,898 | 127,707 |
See financial notes. 5
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Comverse Technology, Inc. * | 81,808 | 1,572 | ||||||
Corning, Inc. | 997,429 | 24,208 | ||||||
Dell, Inc. * | 1,388,594 | 42,491 | ||||||
EMC Corp. * | 1,318,626 | 33,480 | ||||||
Flextronics International Ltd. * | 162,163 | 1,996 | ||||||
Hewlett-Packard Co. | 1,711,058 | 88,428 | ||||||
International Business Machines Corp. | 913,147 | 106,035 | ||||||
Jabil Circuit, Inc. | 110,485 | 2,401 | ||||||
JDS Uniphase Corp. (a)* | 127,689 | 1,949 | ||||||
Juniper Networks, Inc. * | 310,000 | 11,160 | ||||||
Lexmark International, Inc., Class A * | 56,416 | 2,369 | ||||||
Molex, Inc. | 86,848 | 2,480 | ||||||
Motorola, Inc. | 1,452,400 | 27,291 | ||||||
Network Appliance, Inc. * | 231,263 | 7,282 | ||||||
QLogic Corp. * | 107,172 | 1,664 | ||||||
QUALCOMM, Inc. | 1,048,358 | 44,796 | ||||||
SanDisk Corp. * | 111,600 | 4,955 | ||||||
Sun Microsystems, Inc. * | 2,221,752 | 12,686 | ||||||
Tektronix, Inc. | 55,351 | 2,095 | ||||||
Tellabs, Inc. * | 270,557 | 2,384 | ||||||
Teradata Corp. * | 116,524 | 3,324 | ||||||
Tyco Electronics Ltd. | 286,053 | 10,204 | ||||||
Xerox Corp. * | 630,296 | 10,992 | ||||||
688,534 | ||||||||
Telecommunication Services 3.7% | ||||||||
ALLTEL Corp. | 209,906 | 14,935 | ||||||
AT&T, Inc. | 3,917,312 | 163,704 | ||||||
CenturyTel, Inc. | 79,717 | 3,512 | ||||||
Citizens Communications Co. | 225,763 | 2,971 | ||||||
Embarq Corp. | 97,893 | 5,181 | ||||||
Qwest Communications International, Inc. * | 1,068,423 | 7,671 | ||||||
Sprint Nextel Corp. | 1,822,177 | 31,159 | ||||||
Verizon Communications, Inc. | 1,868,151 | 86,066 | ||||||
Windstream Corp. | 266,345 | 3,582 | ||||||
318,781 | ||||||||
Transportation 1.8% | ||||||||
Burlington Northern Santa Fe Corp. | 203,319 | 17,719 | ||||||
C.H. Robinson Worldwide, Inc. | 30,100 | 1,503 | ||||||
CSX Corp. | 275,126 | 12,317 | ||||||
Expeditors International of Washington, Inc. | 101,000 | 5,116 | ||||||
FedEx Corp. | 192,349 | 19,877 | ||||||
Norfolk Southern Corp. | 248,704 | 12,846 | ||||||
Ryder System, Inc. | 35,093 | 1,679 | ||||||
Southwest Airlines Co. | 470,201 | 6,682 | ||||||
Union Pacific Corp. | 172,213 | 22,050 | ||||||
United Parcel Service, Inc., Class B | 662,790 | 49,775 | ||||||
149,564 | ||||||||
Utilities 3.3% | ||||||||
Allegheny Energy, Inc. * | 104,525 | 6,340 | ||||||
Ameren Corp. | 125,730 | 6,797 | ||||||
American Electric Power Co., Inc. | 248,535 | 11,982 | ||||||
CenterPoint Energy, Inc. (a) | 174,137 | 2,919 | ||||||
CMS Energy Corp. | 117,771 | 1,999 | ||||||
Consolidated Edison, Inc. | 150,869 | 7,104 | ||||||
Constellation Energy Group | 114,391 | 10,833 | ||||||
Dominion Resources, Inc. | 184,758 | 16,929 | ||||||
DTE Energy Co. (a) | 110,514 | 5,481 | ||||||
Duke Energy Corp. | 790,869 | 15,161 | ||||||
Dynegy, Inc., Class A * | 249,712 | 2,300 | ||||||
Edison International | 208,567 | 12,128 | ||||||
Entergy Corp. | 132,173 | 15,844 | ||||||
Exelon Corp. | 428,054 | 35,434 | ||||||
FirstEnergy Corp. | 208,363 | 14,523 | ||||||
FPL Group, Inc. | 260,750 | 17,840 | ||||||
Integrys Energy Group, Inc. | 13,079 | 704 | ||||||
Nicor, Inc. | 21,182 | 917 | ||||||
NiSource, Inc. | 163,456 | 3,343 | ||||||
PG&E Corp. | 222,156 | 10,870 | ||||||
Pinnacle West Capital Corp. | 51,945 | 2,099 | ||||||
PPL Corp. | 236,742 | 12,240 | ||||||
Progress Energy, Inc. | 159,892 | 7,675 | ||||||
Public Service Enterprise Group, Inc. | 162,087 | 15,495 | ||||||
Questar Corp. | 100,000 | 5,708 | ||||||
Sempra Energy | 165,517 | 10,181 | ||||||
Southern Co. | 469,109 | 17,197 | ||||||
TECO Energy, Inc. | 115,104 | 1,937 | ||||||
The AES Corp. * | 418,510 | 8,960 | ||||||
Xcel Energy, Inc. (a) | 248,854 | 5,612 | ||||||
286,552 | ||||||||
Total Common Stock (Cost $5,286,878) | 8,551,595 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
Commercial Paper & Other Obligations 0.1% | ||||||||
Bank of America, London Time Deposit | ||||||||
4.75%, 11/01/07 | 4,533 | 4,533 | ||||||
U.S. Treasury Obligation 0.0% | ||||||||
U.S. Treasury Bill | ||||||||
3.92%, 12/20/07 (b) | 785 | 781 | ||||||
Total Short-Term Investments (Cost $5,314) | 5,314 |
6 See financial notes.
Table of Contents
Schwab S&P 500 Index Fund
Portfolio Holdings continued
End of Investments.
Value | ||||||||
Security | Number of Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 1.5% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 133,347,976 | 133,348 | ||||||
End of collateral invested for securities on loan. |
At 10/31/07 the tax basis cost of the fund’s investments was $5,337,903 and the unrealized appreciation and depreciation were $3,608,096 and ($389,090), respectively, with a net unrealized appreciation of $3,219,006.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | Issuer is affiliated with the fund’s adviser. |
In addition to the above, the fund held the following at 10/31/07. All numbers are x1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 80 | 6,220 | 62 |
See financial notes. 7
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||||||
98.9 | % | Common Stock | 2,529,004 | 3,068,754 | ||||||||||||
1.1 | % | Short-Term Investments | 33,524 | 33,524 | ||||||||||||
— | % | Warrants | — | — | ||||||||||||
100.0 | % | Total Investments | 2,562,528 | 3,102,278 | ||||||||||||
5.0 | % | Collateral Invested for Securities on Loan | 155,381 | 155,381 | ||||||||||||
(5.0 | )% | Other Assets and Liabilities, Net | (154,721 | ) | ||||||||||||
100.0 | % | Total Net Assets | 3,102,938 |
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Common Stock 98.9% of net assets | ||||||||
Automobiles & Components 0.6% | ||||||||
Ford Motor Co. (a)* | 423,411 | 3,756 | ||||||
General Motors Corp. (a) | 125,952 | 4,936 | ||||||
Harley-Davidson, Inc. | 57,625 | 2,968 | ||||||
Johnson Controls, Inc. | 130,707 | 5,714 | ||||||
The Goodyear Tire & Rubber Co. * | 45,040 | 1,358 | ||||||
18,732 | ||||||||
Banks 4.2% | ||||||||
BB&T Corp. | 120,447 | 4,453 | ||||||
Comerica, Inc. | 35,362 | 1,651 | ||||||
Commerce Bancorp, Inc. | 40,421 | 1,647 | ||||||
Countrywide Financial Corp. (a) | 132,922 | 2,063 | ||||||
Fannie Mae | 216,917 | 12,373 | ||||||
Fifth Third Bancorp | 124,110 | 3,882 | ||||||
First Horizon National Corp. (a) | 27,670 | 722 | ||||||
Freddie Mac | 153,720 | 8,029 | ||||||
Hudson City Bancorp, Inc. | 96,592 | 1,513 | ||||||
Huntington Bancshares, Inc. | 54,685 | 979 | ||||||
KeyCorp | 90,563 | 2,576 | ||||||
M&T Bank Corp. | 17,146 | 1,706 | ||||||
Marshall & Ilsley Corp. | 56,887 | 2,429 | ||||||
MGIC Investment Corp. (a) | 17,879 | 346 | ||||||
National City Corp. | 135,070 | 3,275 | ||||||
PNC Financial Services Group, Inc. | 78,243 | 5,646 | ||||||
Regions Financial Corp. | 161,942 | 4,392 | ||||||
Sovereign Bancorp, Inc. (a) | 77,461 | 1,118 | ||||||
SunTrust Banks, Inc. | 78,880 | 5,727 | ||||||
Synovus Financial Corp. | 72,459 | 1,910 | ||||||
U.S. Bancorp | 391,248 | 12,974 | ||||||
Wachovia Corp. | 424,517 | 19,413 | ||||||
Washington Mutual, Inc. | 208,871 | 5,823 | ||||||
Wells Fargo & Co. | 751,313 | 25,552 | ||||||
Zions Bancorp | 23,936 | 1,415 | ||||||
131,614 | ||||||||
Capital Goods 9.1% | ||||||||
3M Co. | 162,378 | 14,023 | ||||||
American Standard Cos., Inc. | 38,668 | 1,441 | ||||||
Caterpillar, Inc. | 144,570 | 10,786 | ||||||
Cooper Industries Ltd., Class A (a) | 42,029 | 2,202 | ||||||
Cummins, Inc. | 23,327 | 2,798 | ||||||
Danaher Corp. (a) | 52,868 | 4,529 | ||||||
Deere & Co. | 51,399 | 7,962 | ||||||
Dover Corp. | 45,547 | 2,095 | ||||||
Eaton Corp. | 33,144 | 3,068 | ||||||
Emerson Electric Co. | 183,267 | 9,579 | ||||||
Fluor Corp. | 18,442 | 2,914 | ||||||
General Dynamics Corp. | 90,028 | 8,189 | ||||||
General Electric Co. | 2,291,625 | 94,323 | ||||||
Goodrich Corp. | 27,778 | 1,935 | ||||||
Honeywell International, Inc. | 182,717 | 11,038 | ||||||
Illinois Tool Works, Inc. | 93,341 | 5,345 | ||||||
Ingersoll-Rand Co., Ltd. Class A | 68,128 | 3,430 | ||||||
ITT Corp. (a) | 41,118 | 2,752 | ||||||
L-3 Communications Holdings, Inc. | 27,888 | 3,058 | ||||||
Lockheed Martin Corp. | 81,339 | 8,951 | ||||||
Masco Corp. (a) | 87,407 | 2,105 | ||||||
Northrop Grumman Corp. | 78,134 | 6,534 | ||||||
PACCAR, Inc. | 83,050 | 4,614 | ||||||
Pall Corp. | 28,708 | 1,150 | ||||||
Parker Hannifin Corp. | 39,330 | 3,161 | ||||||
Precision Castparts Corp. | 30,527 | 4,573 | ||||||
Raytheon Co. (a) | 102,949 | 6,549 | ||||||
Rockwell Automation, Inc. | 37,580 | 2,589 | ||||||
Rockwell Collins, Inc. | 37,281 | 2,789 | ||||||
Terex Corp. * | 23,935 | 1,776 | ||||||
Textron, Inc. | 55,878 | 3,867 | ||||||
The Boeing Co. | 178,331 | 17,582 | ||||||
Tyco International Ltd. | 110,665 | 4,556 | ||||||
United Technologies Corp. | 226,436 | 17,343 | ||||||
W.W. Grainger, Inc. | 16,328 | 1,468 | ||||||
281,074 |
See financial notes. 1
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Commercial Services & Supplies 0.5% | ||||||||
Allied Waste Industries, Inc. * | 56,814 | 718 | ||||||
Avery Dennison Corp. | 21,519 | 1,246 | ||||||
Cintas Corp. | 29,385 | 1,076 | ||||||
Equifax, Inc. | 29,941 | 1,153 | ||||||
Monster Worldwide, Inc. * | 28,701 | 1,165 | ||||||
Pitney Bowes, Inc. | 49,337 | 1,975 | ||||||
R.R. Donnelley & Sons Co. | 49,022 | 1,975 | ||||||
Robert Half International, Inc. | 37,369 | 1,124 | ||||||
Waste Management, Inc. | 118,875 | 4,326 | ||||||
14,758 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Brunswick Corp. | 20,343 | 454 | ||||||
Centex Corp. (a) | 26,437 | 663 | ||||||
Coach, Inc. * | 82,912 | 3,031 | ||||||
D.R. Horton, Inc. | 56,890 | 722 | ||||||
Eastman Kodak Co. (a) | 65,052 | 1,864 | ||||||
Fortune Brands, Inc. | 30,230 | 2,532 | ||||||
Harman International Industries, Inc. | 14,856 | 1,251 | ||||||
Hasbro, Inc. (a) | 39,712 | 1,185 | ||||||
Jones Apparel Group, Inc. | 24,519 | 513 | ||||||
KB Home (a) | 17,435 | 482 | ||||||
Leggett & Platt, Inc. | 36,691 | 713 | ||||||
Lennar Corp., Class A (a) | 30,636 | 700 | ||||||
Liz Claiborne, Inc. (a) | 22,823 | 650 | ||||||
Mattel, Inc. | 86,002 | 1,797 | ||||||
Newell Rubbermaid, Inc. | 63,879 | 1,863 | ||||||
NIKE, Inc., Class B | 84,520 | 5,600 | ||||||
Polo Ralph Lauren Corp., Class A | 15,126 | 1,041 | ||||||
Pulte Homes, Inc. | 41,064 | 609 | ||||||
Snap-on, Inc. | 15,478 | 773 | ||||||
The Black & Decker Corp. (a) | 15,054 | 1,354 | ||||||
The Stanley Works | 18,245 | 1,050 | ||||||
VF Corp. | 19,884 | 1,732 | ||||||
Whirlpool Corp. | 16,942 | 1,341 | ||||||
31,920 | ||||||||
Consumer Services 1.6% | ||||||||
Apollo Group, Inc., Class A (a)* | 31,135 | 2,468 | ||||||
Carnival Corp. | 99,024 | 4,751 | ||||||
Darden Restaurants, Inc. | 32,568 | 1,400 | ||||||
H&R Block, Inc. | 62,411 | 1,361 | ||||||
Harrah’s Entertainment, Inc. | 41,420 | 3,655 | ||||||
International Game Technology | 75,435 | 3,290 | ||||||
Marriott International, Inc., Class A | 74,560 | 3,065 | ||||||
McDonald’s Corp. | 274,297 | 16,376 | ||||||
Starbucks Corp. * | 164,732 | 4,395 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 48,595 | 2,763 | ||||||
Wendy’s International, Inc. | 21,811 | 758 | ||||||
Wyndham Worldwide Corp. | 43,861 | 1,440 | ||||||
YUM! Brands, Inc. | 117,959 | 4,750 | ||||||
50,472 | ||||||||
Diversified Financials 9.1% | ||||||||
American Capital Strategies Ltd. (a) | 4,461 | 194 | ||||||
American Express Co. | 267,927 | 16,330 | ||||||
Ameriprise Financial, Inc. | 54,147 | 3,410 | ||||||
Bank of America Corp. | 1,000,720 | 48,315 | ||||||
Bank of New York Mellon Corp. | 252,070 | 12,314 | ||||||
Capital One Financial Corp. (a) | 90,935 | 5,964 | ||||||
CIT Group, Inc. | 44,014 | 1,551 | ||||||
Citigroup, Inc. | 1,094,623 | 45,865 | ||||||
CME Group, Inc. (a) | 12,323 | 8,210 | ||||||
Discover Financial Services | 118,179 | 2,281 | ||||||
E*TRADE Financial Corp. (a)* | 95,095 | 1,059 | ||||||
Federated Investors, Inc., Class B | 22,395 | 963 | ||||||
Franklin Resources, Inc. | 38,889 | 5,043 | ||||||
IntercontinentalExchange, Inc. * | 358 | 64 | ||||||
Janus Capital Group, Inc. (a) | 49,444 | 1,706 | ||||||
JPMorgan Chase & Co. | 775,973 | 36,471 | ||||||
Legg Mason, Inc. | 29,208 | 2,422 | ||||||
Lehman Brothers Holdings, Inc. (a) | 118,046 | 7,477 | ||||||
Leucadia National Corp. (a) | 18,851 | 955 | ||||||
Merrill Lynch & Co., Inc. | 196,686 | 12,985 | ||||||
Moody’s Corp. (a) | 52,238 | 2,284 | ||||||
Morgan Stanley (a) | 236,866 | 15,932 | ||||||
Northern Trust Corp. (a) | 42,284 | 3,180 | ||||||
NYSE Euronext | 28,000 | 2,628 | ||||||
SLM Corp. | 88,096 | 4,155 | ||||||
State Street Corp. | 75,798 | 6,046 | ||||||
T. Rowe Price Group, Inc. | 60,253 | 3,871 | ||||||
The Bear Stearns Cos., Inc. | 26,089 | 2,964 | ||||||
The Charles Schwab Corp. (c) | 226,645 | 5,267 | ||||||
The Goldman Sachs Group, Inc. | 94,406 | 23,405 | ||||||
283,311 | ||||||||
Energy 11.6% | ||||||||
Anadarko Petroleum Corp. | 99,127 | 5,851 | ||||||
Apache Corp. | 70,439 | 7,312 | ||||||
Baker Hughes, Inc. | 69,106 | 5,993 | ||||||
BJ Services Co. | 62,484 | 1,574 | ||||||
Chesapeake Energy Corp. (a) | 85,666 | 3,382 | ||||||
Chevron Corp. | 484,603 | 44,346 | ||||||
ConocoPhillips | 364,720 | 30,987 | ||||||
CONSOL Energy, Inc. | 35,518 | 2,007 | ||||||
Devon Energy Corp. | 95,345 | 8,905 | ||||||
El Paso Corp. | 156,840 | 2,770 | ||||||
ENSCO International, Inc. | 33,693 | 1,870 | ||||||
EOG Resources, Inc. | 52,465 | 4,648 | ||||||
Exxon Mobil Corp. | 1,293,711 | 119,008 | ||||||
Halliburton Co. | 221,340 | 8,725 | ||||||
Hess Corp. | 56,418 | 4,040 | ||||||
Marathon Oil Corp. | 156,070 | 9,228 |
2 See financial notes.
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Murphy Oil Corp. | 40,365 | 2,972 | ||||||
Nabors Industries Ltd. * | 63,294 | 1,777 | ||||||
National-Oilwell Varco, Inc. * | 78,414 | 5,743 | ||||||
Noble Corp. | 58,333 | 3,089 | ||||||
Noble Energy | 18,884 | 1,445 | ||||||
Occidental Petroleum Corp. | 191,126 | 13,197 | ||||||
Peabody Energy Corp. | 56,864 | 3,170 | ||||||
Rowan Cos., Inc. | 21,322 | 831 | ||||||
Schlumberger Ltd. | 262,380 | 25,338 | ||||||
Smith International, Inc. | 42,932 | 2,836 | ||||||
Spectra Energy Corp. | 139,807 | 3,632 | ||||||
Sunoco, Inc. (a) | 25,890 | 1,906 | ||||||
Tesoro Corp. | 15,707 | 951 | ||||||
The Williams Cos., Inc. | 128,496 | 4,689 | ||||||
Transocean, Inc. (a)* | 63,777 | 7,613 | ||||||
Valero Energy Corp. | 133,555 | 9,406 | ||||||
Weatherford International Ltd. * | 70,910 | 4,603 | ||||||
XTO Energy, Inc. | 79,083 | 5,250 | ||||||
359,094 | ||||||||
Food & Staples Retailing 2.3% | ||||||||
Costco Wholesale Corp. | 99,851 | 6,716 | ||||||
CVS Caremark Corp. | 341,788 | 14,277 | ||||||
Safeway, Inc. | 98,571 | 3,351 | ||||||
Supervalu, Inc. | 44,410 | 1,721 | ||||||
Sysco Corp. | 133,062 | 4,563 | ||||||
The Kroger Co. | 159,511 | 4,688 | ||||||
Wal-Mart Stores, Inc. | 546,919 | 24,726 | ||||||
Walgreen Co. | 221,112 | 8,767 | ||||||
Whole Foods Market, Inc. (a) | 28,116 | 1,393 | ||||||
70,202 | ||||||||
Food, Beverage & Tobacco 4.8% | ||||||||
Altria Group, Inc. | 466,802 | 34,044 | ||||||
Anheuser-Busch Cos., Inc. | 172,545 | 8,848 | ||||||
Archer-Daniels-Midland Co. | 143,238 | 5,125 | ||||||
Brown-Forman Corp., Class B | 16,996 | 1,257 | ||||||
Campbell Soup Co. | 49,798 | 1,842 | ||||||
Coca-Cola Enterprises, Inc. | 59,795 | 1,543 | ||||||
ConAgra Foods, Inc. | 113,894 | 2,703 | ||||||
Constellation Brands, Inc., Class A * | 40,550 | 1,019 | ||||||
Dean Foods Co. | 29,670 | 824 | ||||||
General Mills, Inc. | 76,437 | 4,413 | ||||||
H.J. Heinz Co. | 73,492 | 3,438 | ||||||
Kellogg Co. | 55,949 | 2,954 | ||||||
Kraft Foods, Inc., Class A | 327,339 | 10,936 | ||||||
McCormick & Co., Inc. | 30,029 | 1,052 | ||||||
Molson Coors Brewing Co., Class B | 22,080 | 1,264 | ||||||
PepsiCo, Inc. | 365,266 | 26,927 | ||||||
Reynolds American, Inc. (a) | 38,234 | 2,463 | ||||||
Sara Lee Corp. | 170,112 | 2,814 | ||||||
The Coca-Cola Co. | 453,246 | 27,992 | ||||||
The Hershey Co. | 33,936 | 1,463 | ||||||
The Pepsi Bottling Group, Inc. | 30,352 | 1,308 | ||||||
Tyson Foods, Inc., Class A | 56,288 | 889 | ||||||
UST, Inc. | 38,285 | 2,041 | ||||||
Wm. Wrigley Jr. Co. | 46,797 | 2,886 | ||||||
150,045 | ||||||||
Health Care Equipment & Services 3.9% | ||||||||
Aetna, Inc. | 118,028 | 6,630 | ||||||
AmerisourceBergen Corp. | 44,191 | 2,082 | ||||||
Baxter International, Inc. | 149,628 | 8,979 | ||||||
Becton, Dickinson & Co. | 55,996 | 4,673 | ||||||
Boston Scientific Corp. * | 254,923 | 3,536 | ||||||
C.R. Bard, Inc. | 22,961 | 1,920 | ||||||
Cardinal Health, Inc. | 89,828 | 6,111 | ||||||
CIGNA Corp. | 68,698 | 3,606 | ||||||
Coventry Health Care, Inc. * | 37,338 | 2,252 | ||||||
Covidien Ltd. | 110,666 | 4,604 | ||||||
Express Scripts, Inc. * | 61,322 | 3,869 | ||||||
Hospira, Inc. * | 34,724 | 1,435 | ||||||
Humana, Inc. * | 39,414 | 2,954 | ||||||
IMS Health, Inc. | 44,136 | 1,113 | ||||||
Laboratory Corp. of America Holdings (a)* | 28,547 | 1,963 | ||||||
Manor Care, Inc. (a) | 16,402 | 1,092 | ||||||
McKesson Corp. | 66,060 | 4,366 | ||||||
Medco Health Solutions, Inc. * | 65,131 | 6,147 | ||||||
Medtronic, Inc. | 256,343 | 12,161 | ||||||
Patterson Cos., Inc. (a)* | 29,903 | 1,169 | ||||||
Quest Diagnostics, Inc. | 33,988 | 1,807 | ||||||
St. Jude Medical, Inc. * | 75,808 | 3,088 | ||||||
Stryker Corp. | 65,866 | 4,676 | ||||||
Tenet Healthcare Corp. * | 104,890 | 368 | ||||||
UnitedHealth Group, Inc. | 299,817 | 14,736 | ||||||
Varian Medical Systems, Inc. * | 26,606 | 1,298 | ||||||
WellPoint, Inc. * | 140,406 | 11,124 | ||||||
Zimmer Holdings, Inc. * | 54,104 | 3,760 | ||||||
121,519 | ||||||||
Household & Personal Products 2.3% | ||||||||
Avon Products, Inc. | 101,050 | 4,141 | ||||||
Colgate-Palmolive Co. | 115,720 | 8,826 | ||||||
Kimberly-Clark Corp. | 101,618 | 7,204 | ||||||
The Clorox Co. | 35,935 | 2,248 | ||||||
The Estee Lauder Cos., Inc., Class A | 28,126 | 1,235 | ||||||
The Procter & Gamble Co. | 705,041 | 49,014 | ||||||
72,668 | ||||||||
Insurance 4.3% | ||||||||
ACE Ltd. | 72,438 | 4,390 | ||||||
AFLAC, Inc. | 114,470 | 7,186 | ||||||
Ambac Financial Group, Inc. (a) | 23,612 | 870 | ||||||
American International Group, Inc. | 578,755 | 36,531 |
See financial notes. 3
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
AON Corp. | 74,085 | 3,358 | ||||||
Assurant, Inc. | 2,646 | 155 | ||||||
Cincinnati Financial Corp. | 36,180 | 1,439 | ||||||
Genworth Financial, Inc., Class A | 101,526 | 2,772 | ||||||
Lincoln National Corp. | 66,689 | 4,159 | ||||||
Loews Corp. | 101,558 | 4,986 | ||||||
Marsh & McLennan Cos., Inc. | 122,795 | 3,179 | ||||||
MBIA, Inc. (a) | 28,989 | 1,248 | ||||||
MetLife, Inc. | 172,292 | 11,862 | ||||||
Principal Financial Group, Inc. | 60,011 | 4,061 | ||||||
Prudential Financial, Inc. | 108,250 | 10,470 | ||||||
SAFECO Corp. | 24,983 | 1,447 | ||||||
The Allstate Corp. | 140,118 | 7,342 | ||||||
The Chubb Corp. | 92,753 | 4,948 | ||||||
The Hartford Financial Services Group, Inc. | 70,833 | 6,873 | ||||||
The Progressive Corp. | 168,992 | 3,126 | ||||||
The Travelers Cos., Inc. | 157,103 | 8,202 | ||||||
Torchmark Corp. | 21,760 | 1,418 | ||||||
Unum Group | 79,850 | 1,864 | ||||||
XL Capital Ltd., Class A | 39,000 | 2,806 | ||||||
134,692 | ||||||||
Materials 3.3% | ||||||||
Air Products & Chemicals, Inc. | 49,047 | 4,799 | ||||||
Alcoa, Inc. | 193,195 | 7,649 | ||||||
Allegheny Technologies, Inc. | 22,442 | 2,293 | ||||||
Ashland, Inc. | 14,081 | 827 | ||||||
Ball Corp. | 23,247 | 1,153 | ||||||
Bemis Co., Inc. | 23,385 | 658 | ||||||
E.I. du Pont de Nemours & Co. | 204,975 | 10,148 | ||||||
Eastman Chemical Co. | 19,567 | 1,303 | ||||||
Ecolab, Inc. | 39,633 | 1,869 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 75,352 | 8,867 | ||||||
Hercules, Inc. | 34,216 | 644 | ||||||
International Flavors & Fragrances, Inc. | 18,476 | 965 | ||||||
International Paper Co. (a) | 103,735 | 3,834 | ||||||
MeadWestvaco Corp. | 40,330 | 1,357 | ||||||
Monsanto Co. | 121,070 | 11,820 | ||||||
Newmont Mining Corp. | 95,436 | 4,854 | ||||||
Nucor Corp. | 68,596 | 4,254 | ||||||
Pactiv Corp. * | 32,848 | 902 | ||||||
PPG Industries, Inc. | 36,837 | 2,753 | ||||||
Praxair, Inc. | 71,849 | 6,142 | ||||||
Rohm & Haas Co. | 32,084 | 1,664 | ||||||
Sealed Air Corp. | 38,546 | 961 | ||||||
Sigma-Aldrich Corp. | 31,228 | 1,614 | ||||||
Temple-Inland, Inc. | 25,295 | 1,358 | ||||||
The Dow Chemical Co. | 212,717 | 9,581 | ||||||
Titanium Metals Corp. * | 9,500 | 334 | ||||||
United States Steel Corp. | 26,465 | 2,856 | ||||||
Vulcan Materials Co. (a) | 20,167 | 1,724 | ||||||
Weyerhaeuser Co. | 47,492 | 3,605 | ||||||
100,788 | ||||||||
Media 3.0% | ||||||||
CBS Corp., Class B | 175,181 | 5,028 | ||||||
Clear Channel Communications, Inc. | 110,021 | 4,156 | ||||||
Comcast Corp., Class A * | 694,652 | 14,622 | ||||||
Dow Jones & Co., Inc. (a) | 12,548 | 751 | ||||||
Gannett Co., Inc. | 52,275 | 2,217 | ||||||
Meredith Corp. | 10,158 | 632 | ||||||
News Corp., Class A | 521,110 | 11,292 | ||||||
Omnicom Group, Inc. | 77,405 | 3,946 | ||||||
The DIRECTV Group, Inc. * | 171,742 | 4,548 | ||||||
The E.W. Scripps Co., Class A | 18,668 | 840 | ||||||
The Interpublic Group of Cos., Inc. (a)* | 98,946 | 1,024 | ||||||
The McGraw-Hill Cos., Inc. | 78,756 | 3,941 | ||||||
The New York Times Co., Class A (a) | 27,947 | 547 | ||||||
The Walt Disney Co. | 464,954 | 16,101 | ||||||
Time Warner, Inc. | 883,514 | 16,133 | ||||||
Tribune Co. | 17,183 | 520 | ||||||
Viacom, Inc., Class B * | 155,406 | 6,417 | ||||||
92,715 | ||||||||
Pharmaceuticals & Biotechnology 7.7% | ||||||||
Abbott Laboratories | 341,941 | 18,677 | ||||||
Allergan, Inc. | 66,336 | 4,483 | ||||||
Amgen, Inc. * | 256,991 | 14,934 | ||||||
Applied Biosystems Group-Applera Corp. | 42,903 | 1,593 | ||||||
Barr Pharmaceuticals, Inc. * | 24,999 | 1,433 | ||||||
Biogen Idec, Inc. * | 74,475 | 5,544 | ||||||
Bristol-Myers Squibb Co. | 438,711 | 13,157 | ||||||
Celgene Corp. (a)* | 81,113 | 5,353 | ||||||
Eli Lilly and Co. | 219,343 | 11,877 | ||||||
Forest Laboratories, Inc. * | 71,391 | 2,789 | ||||||
Genzyme Corp. * | 58,516 | 4,446 | ||||||
Gilead Sciences, Inc. * | 205,121 | 9,475 | ||||||
Johnson & Johnson | 645,417 | 42,062 | ||||||
King Pharmaceuticals, Inc. * | 58,246 | 617 | ||||||
Merck & Co., Inc. | 488,086 | 28,436 | ||||||
Millipore Corp. * | 10,252 | 796 | ||||||
Mylan Laboratories, Inc. | 52,502 | 790 | ||||||
PerkinElmer, Inc. | 30,180 | 831 | ||||||
Pfizer, Inc. | 1,608,986 | 39,597 | ||||||
Schering-Plough Corp. | 339,575 | 10,364 | ||||||
Thermo Fisher Scientific, Inc. * | 91,142 | 5,360 | ||||||
Waters Corp. * | 23,484 | 1,808 | ||||||
Watson Pharmaceuticals, Inc. * | 25,135 | 768 | ||||||
Wyeth | 299,782 | 14,578 | ||||||
239,768 |
4 See financial notes.
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Real Estate 1.0% | ||||||||
Apartment Investment & Management Co., Class A (a) | 21,462 | 1,003 | ||||||
AvalonBay Communities, Inc. | 17,470 | 2,142 | ||||||
Boston Properties, Inc. | 25,246 | 2,735 | ||||||
CB Richard Ellis Group, Inc., Class A * | 43,840 | 1,069 | ||||||
Developers Diversified Realty Corp. | 3,351 | 169 | ||||||
Equity Residential | 64,930 | 2,713 | ||||||
General Growth Properties, Inc. | 53,476 | 2,907 | ||||||
Host Hotels & Resorts, Inc. | 13,904 | 308 | ||||||
Kimco Realty Corp. | 50,459 | 2,095 | ||||||
Plum Creek Timber Co., Inc. | 39,327 | 1,757 | ||||||
ProLogis | 55,340 | 3,970 | ||||||
Public Storage | 26,453 | 2,142 | ||||||
Simon Property Group, Inc. | 49,263 | 5,129 | ||||||
Vornado Realty Trust | 28,795 | 3,217 | ||||||
31,356 | ||||||||
Retailing 3.1% | ||||||||
Abercrombie & Fitch Co., Class A | 2,345 | 186 | ||||||
Amazon.com, Inc. * | 68,802 | 6,134 | ||||||
AutoNation, Inc. (a)* | 33,277 | 589 | ||||||
AutoZone, Inc. * | 11,161 | 1,388 | ||||||
Bed Bath & Beyond, Inc. * | 55,704 | 1,891 | ||||||
Best Buy Co., Inc. (a) | 85,636 | 4,155 | ||||||
Big Lots, Inc. (a)* | 28,758 | 690 | ||||||
Circuit City Stores, Inc. | 31,614 | 251 | ||||||
Dillard’s, Inc., Class A (a) | 13,001 | 299 | ||||||
eBay, Inc. * | 259,823 | 9,380 | ||||||
Expedia, Inc. * | 46,056 | 1,504 | ||||||
Family Dollar Stores, Inc. | 31,138 | 789 | ||||||
Genuine Parts Co. | 37,885 | 1,859 | ||||||
IAC/InterActiveCorp * | 50,967 | 1,501 | ||||||
J.C. Penney Co., Inc. | 51,137 | 2,876 | ||||||
Kohl’s Corp. * | 72,829 | 4,003 | ||||||
Limited Brands, Inc. | 67,380 | 1,483 | ||||||
Lowe’s Cos., Inc. | 338,688 | 9,107 | ||||||
Macy’s, Inc. | 115,074 | 3,686 | ||||||
Nordstrom, Inc. | 51,414 | 2,028 | ||||||
Office Depot, Inc. * | 59,944 | 1,125 | ||||||
OfficeMax, Inc. | 18,600 | 589 | ||||||
RadioShack Corp. (a) | 30,179 | 622 | ||||||
Sears Holdings Corp. (a)* | 19,624 | 2,645 | ||||||
Staples, Inc. | 155,547 | 3,630 | ||||||
Target Corp. | 191,189 | 11,731 | ||||||
The Gap, Inc. | 119,039 | 2,250 | ||||||
The Home Depot, Inc. (a) | 402,912 | 12,696 | ||||||
The Sherwin-Williams Co. | 25,685 | 1,642 | ||||||
The TJX Cos., Inc. | 101,364 | 2,932 | ||||||
Tiffany & Co. | 26,720 | 1,448 | ||||||
95,109 | ||||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||
Advanced Micro Devices, Inc. (a)* | 118,328 | 1,548 | ||||||
Altera Corp. | 80,416 | 1,578 | ||||||
Analog Devices, Inc. | 75,732 | 2,534 | ||||||
Applied Materials, Inc. | 309,273 | 6,006 | ||||||
Broadcom Corp., Class A * | 104,349 | 3,397 | ||||||
Intel Corp. | 1,284,789 | 34,561 | ||||||
KLA-Tencor Corp. | 45,814 | 2,412 | ||||||
Linear Technology Corp. (a) | 63,430 | 2,095 | ||||||
LSI Corp. * | 88,938 | 587 | ||||||
MEMC Electronic Materials, Inc. * | 50,127 | 3,670 | ||||||
Microchip Technology, Inc. | 25,123 | 833 | ||||||
Micron Technology, Inc. * | 167,962 | 1,765 | ||||||
National Semiconductor Corp. (a) | 63,545 | 1,598 | ||||||
Novellus Systems, Inc. * | 30,462 | 865 | ||||||
NVIDIA Corp. (a)* | 124,882 | 4,418 | ||||||
Teradyne, Inc. * | 42,466 | 524 | ||||||
Texas Instruments, Inc. | 329,134 | 10,730 | ||||||
Xilinx, Inc. | 77,395 | 1,888 | ||||||
81,009 | ||||||||
Software & Services 6.2% | ||||||||
Adobe Systems, Inc. * | 130,054 | 6,230 | ||||||
Affiliated Computer Services, Inc., Class A * | 24,736 | 1,253 | ||||||
Akamai Technologies, Inc. (a)* | 22,341 | 876 | ||||||
Autodesk, Inc. * | 49,335 | 2,412 | ||||||
Automatic Data Processing, Inc. | 122,533 | 6,073 | ||||||
BMC Software, Inc. * | 47,638 | 1,612 | ||||||
CA, Inc. | 96,330 | 2,548 | ||||||
Citrix Systems, Inc. * | 40,263 | 1,731 | ||||||
Cognizant Technology Solutions Corp., Class A * | 63,048 | 2,614 | ||||||
Computer Sciences Corp. (a)* | 36,659 | 2,140 | ||||||
Compuware Corp. * | 84,168 | 842 | ||||||
Convergys Corp. * | 34,535 | 633 | ||||||
Electronic Arts, Inc. (a)* | 70,891 | 4,333 | ||||||
Electronic Data Systems Corp. | 115,773 | 2,500 | ||||||
Fidelity National Information Services, Inc. | 34,984 | 1,613 | ||||||
Fiserv, Inc. * | 38,455 | 2,130 | ||||||
Google, Inc., Class A * | 51,638 | 36,508 | ||||||
Intuit, Inc. * | 77,509 | 2,493 | ||||||
Microsoft Corp. | 1,920,893 | 70,708 | ||||||
Novell, Inc. (a)* | 67,760 | 512 | ||||||
Oracle Corp. * | 889,926 | 19,730 | ||||||
Paychex, Inc. | 77,035 | 3,218 | ||||||
Symantec Corp. * | 202,079 | 3,795 | ||||||
Unisys Corp. * | 76,793 | 467 | ||||||
VeriSign, Inc. * | 52,825 | 1,801 | ||||||
Western Union Co. | 170,779 | 3,764 | ||||||
Yahoo!, Inc. * | 266,264 | 8,281 | ||||||
190,817 |
See financial notes. 5
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Technology Hardware & Equipment 8.0% | ||||||||
Agilent Technologies, Inc. * | 91,235 | 3,362 | ||||||
Apple, Inc. * | 189,805 | 36,054 | ||||||
Ciena Corp. (a)* | 18,205 | 871 | ||||||
Cisco Systems, Inc. * | 1,355,130 | 44,801 | ||||||
Comverse Technology, Inc. * | 22,387 | 430 | ||||||
Corning, Inc. | 348,533 | 8,459 | ||||||
Dell, Inc. * | 505,796 | 15,477 | ||||||
EMC Corp. (a)* | 493,936 | 12,541 | ||||||
Flextronics International Ltd. * | 50,692 | 624 | ||||||
Hewlett-Packard Co. | 612,315 | 31,644 | ||||||
International Business Machines Corp. | 335,073 | 38,909 | ||||||
Jabil Circuit, Inc. | 39,840 | 866 | ||||||
JDS Uniphase Corp. (a)* | 40,810 | 623 | ||||||
Juniper Networks, Inc. (a)* | 121,165 | 4,362 | ||||||
Lexmark International, Inc., Class A * | 22,717 | 954 | ||||||
Molex, Inc. | 30,243 | 864 | ||||||
Motorola, Inc. | 536,507 | 10,081 | ||||||
Network Appliance, Inc. * | 85,381 | 2,689 | ||||||
QLogic Corp. * | 39,361 | 611 | ||||||
QUALCOMM, Inc. | 368,227 | 15,734 | ||||||
SanDisk Corp. * | 44,439 | 1,973 | ||||||
Sun Microsystems, Inc. * | 794,426 | 4,536 | ||||||
Tektronix, Inc. | 18,920 | 716 | ||||||
Tellabs, Inc. * | 98,199 | 865 | ||||||
Teradata Corp. * | 40,347 | 1,151 | ||||||
Tyco Electronics Ltd. | 110,666 | 3,947 | ||||||
Xerox Corp. * | 214,422 | 3,740 | ||||||
246,884 | ||||||||
Telecommunication Services 3.6% | ||||||||
ALLTEL Corp. | 83,644 | 5,951 | ||||||
AT&T, Inc. | 1,392,065 | 58,174 | ||||||
CenturyTel, Inc. | 27,376 | 1,206 | ||||||
Citizens Communications Co. | 80,897 | 1,065 | ||||||
Embarq Corp. | 34,289 | 1,814 | ||||||
Qwest Communications International, Inc. * | 359,699 | 2,583 | ||||||
Sprint Nextel Corp. | 639,232 | 10,931 | ||||||
Verizon Communications, Inc. | 649,770 | 29,935 | ||||||
Windstream Corp. | 106,162 | 1,428 | ||||||
113,087 | ||||||||
Transportation 1.8% | ||||||||
Burlington Northern Santa Fe Corp. | 79,571 | 6,934 | ||||||
C.H. Robinson Worldwide, Inc. | 38,695 | 1,932 | ||||||
CSX Corp. | 96,891 | 4,338 | ||||||
Expeditors International of Washington, Inc. | 36,600 | 1,854 | ||||||
FedEx Corp. (a) | 69,079 | 7,139 | ||||||
Norfolk Southern Corp. | 88,268 | 4,559 | ||||||
Ryder System, Inc. | 13,109 | 627 | ||||||
Southwest Airlines Co. | 176,000 | 2,501 | ||||||
Union Pacific Corp. | 60,967 | 7,806 | ||||||
United Parcel Service, Inc., Class B | 238,638 | 17,922 | ||||||
55,612 | ||||||||
Utilities 3.3% | ||||||||
Allegheny Energy, Inc. * | 37,995 | 2,305 | ||||||
Ameren Corp. (a) | 40,690 | 2,200 | ||||||
American Electric Power Co., Inc. | 89,047 | 4,293 | ||||||
CenterPoint Energy, Inc. (a) | 67,582 | 1,133 | ||||||
CMS Energy Corp. | 49,513 | 840 | ||||||
Consolidated Edison, Inc. | 51,296 | 2,416 | ||||||
Constellation Energy Group | 40,074 | 3,795 | ||||||
Dominion Resources, Inc. | 65,774 | 6,027 | ||||||
DTE Energy Co. | 39,498 | 1,959 | ||||||
Duke Energy Corp. | 279,673 | 5,361 | ||||||
Dynegy, Inc., Class A * | 85,396 | 786 | ||||||
Edison International (a) | 72,726 | 4,229 | ||||||
Entergy Corp. | 45,830 | 5,494 | ||||||
Exelon Corp. | 149,454 | 12,372 | ||||||
FirstEnergy Corp. | 70,934 | 4,944 | ||||||
FPL Group, Inc. | 89,988 | 6,157 | ||||||
Integrys Energy Group, Inc. | 16,703 | 899 | ||||||
Nicor, Inc. | 9,926 | 429 | ||||||
NiSource, Inc. | 60,733 | 1,242 | ||||||
PG&E Corp. | 77,850 | 3,809 | ||||||
Pinnacle West Capital Corp. | 21,516 | 869 | ||||||
PPL Corp. | 82,328 | 4,256 | ||||||
Progress Energy, Inc. | 56,745 | 2,724 | ||||||
Public Service Enterprise Group, Inc. | 56,198 | 5,373 | ||||||
Questar Corp. | 36,991 | 2,111 | ||||||
Sempra Energy | 58,492 | 3,598 | ||||||
Southern Co. | 160,216 | 5,873 | ||||||
TECO Energy, Inc. | 46,615 | 785 | ||||||
The AES Corp. * | 148,739 | 3,184 | ||||||
Xcel Energy, Inc. (a) | 90,687 | 2,045 | ||||||
101,508 | ||||||||
Total Common Stock | ||||||||
(Cost $2,529,004) | 3,068,754 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 1.1% of net assets | ||||||||
Commercial Paper & Other Obligations 1.0% | ||||||||
Wells Fargo, Grand Cayman Time Deposit | ||||||||
4.75%, 11/01/07 | 30,415 | 30,415 |
6 See financial notes.
Table of Contents
Schwab Institutional Select S&P 500 Fund
Portfolio Holdings continued
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
3.55%, 12/20/07 (b) | 425 | 423 | ||||||
3.89%, 12/20/07 (b) | 270 | 269 | ||||||
3.91%, 12/20/07 (b) | 370 | 368 | ||||||
3.92%, 12/20/07 (b) | 1,300 | 1,293 | ||||||
4.24%, 12/20/07 (b) | 760 | 756 | ||||||
3,109 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $33,524) | 33,524 | |||||||
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Warrants 0.0% of net assets | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Lucent Technologies, Inc. * | ||||||||
expires 12/10/07 | 11,390 | — | ||||||
— | ||||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
End of Investments.
Collateral Invested for Securities on Loan 5.0% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 155,380,890 | 155,381 |
End of collateral invested for securities on loan.
At 10/31/07, the tax basis cost of the fund’s investments was $2,574,259 and the unrealized appreciation and depreciation were $605,643 and ($77,624), respectively, with a net unrealized appreciation of $528,019.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | Issuer is affiliated with the fund’s adviser. |
In addition to the above, the fund held the following at 10/31/07. All numbers are x 1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contract | ||||||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 360 | 27,988 | 364 |
See financial notes. 7
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2007
This section shows all the securities in the fund’s portfolio and their value as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting Schwab’s website at www.schwab.com/schwabfunds.
Cost | Value | |||||||||||
Holdings by Category | ($ x 1,000) | ($ x 1,000) | ||||||||||
98.7 | % | Common Stock | 1,073,413 | 1,559,111 | ||||||||
0.2 | % | Foreign Common Stock | 1,070 | 2,737 | ||||||||
0.1 | % | Preferred Stock | 723 | 2,032 | ||||||||
0.9 | % | Short-Term Investments | 14,979 | 14,979 | ||||||||
99.9 | % | Total Investments | 1,090,185 | 1,578,859 | ||||||||
3.5 | % | Collateral Invested for Securities on Loan | 54,830 | 54,830 | ||||||||
(3.4 | )% | Other Assets and Liabilities, Net | (54,272 | ) | ||||||||
100.0 | % | Net Assets | 1,579,417 |
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Common Stock 98.7% of net assets | ||||||||
Automobiles & Components 0.7% | ||||||||
Aftermarket Technology Corp. * | 5,011 | 173 | ||||||
American Axle & Manufacturing Holdings, Inc. | 5,300 | 146 | ||||||
ArvinMeritor, Inc. (a) | 9,900 | 147 | ||||||
BorgWarner, Inc. | 5,400 | 571 | ||||||
Cooper Tire & Rubber Co. | 8,900 | 198 | ||||||
Drew Industries, Inc. * | 2,400 | 95 | ||||||
Ford Motor Co. (a)* | 148,736 | 1,319 | ||||||
General Motors Corp. (a) | 45,386 | 1,779 | ||||||
Gentex Corp. | 11,500 | 239 | ||||||
Harley-Davidson, Inc. | 25,500 | 1,313 | ||||||
Hawk Corp., Class A * | 1,800 | 29 | ||||||
Hayes Lemmerz International, Inc. * | 17,258 | 80 | ||||||
Johnson Controls, Inc. | 45,000 | 1,967 | ||||||
Lear Corp. * | 5,800 | 206 | ||||||
Modine Manufacturing Co. | 3,700 | 86 | ||||||
Monaco Coach Corp. | 1,200 | 14 | ||||||
Proliance International, Inc. * | 872 | 2 | ||||||
Sauer-Danfoss, Inc. | 3,800 | 98 | ||||||
Standard Motor Products, Inc. | 7,500 | 63 | ||||||
Stoneridge, Inc. * | 8,200 | 84 | ||||||
Strattec Security Corp. | 1,500 | 73 | ||||||
Superior Industries International, Inc. (a) | 800 | 16 | ||||||
Tenneco, Inc. * | 4,480 | 137 | ||||||
The Goodyear Tire & Rubber Co. * | 17,500 | 528 | ||||||
Thor Industries, Inc. | 4,500 | 216 | ||||||
TRW Automotive Holdings Corp. * | 7,800 | 232 | ||||||
Visteon Corp. * | 10,251 | 65 | ||||||
WABCO Holdings, Inc. | 5,133 | 261 | ||||||
Winnebago Industries, Inc. | 5,100 | 132 | ||||||
10,269 | ||||||||
Banks 4.2% | ||||||||
1st Source Corp. | 3,728 | 72 | ||||||
Abigail Adams National Bancorp | 550 | 7 | ||||||
Alabama National Bancorp | 1,600 | 126 | ||||||
AMCORE Financial, Inc. | 3,700 | 88 | ||||||
Ameris Bancorp | 1,800 | 30 | ||||||
Anchor BanCorp Wisconsin, Inc. | 3,100 | 76 | ||||||
Arrow Financial Corp. | 1,081 | 24 | ||||||
Associated Banc-Corp | 15,500 | 447 | ||||||
Astoria Financial Corp. | 8,300 | 216 | ||||||
BancFirst Corp. | 1,000 | 45 | ||||||
BancorpSouth, Inc. | 7,612 | 185 | ||||||
BancTrust Financial Group, Inc. (a) | 1,100 | 15 | ||||||
Bank Mutual Corp. | 6,168 | 69 | ||||||
Bank of Hawaii Corp. | 3,500 | 186 | ||||||
Bank of the Ozarks, Inc. | 2,800 | 81 | ||||||
BankAtlantic Bancorp, Inc., Class A | 2,200 | 9 | ||||||
BankUnited Financial Corp., Class A (a) | 2,200 | 19 | ||||||
Banner Corp. | 1,200 | 39 | ||||||
BB&T Corp. | 48,458 | 1,791 | ||||||
Berkshire Bancorp, Inc. | 3,600 | 59 | ||||||
Berkshire Hills Bancorp, Inc. | 1,400 | 39 | ||||||
BOK Financial Corp. | 4,540 | 248 | ||||||
Boston Private Financial Holdings, Inc. (a) | 2,129 | 61 | ||||||
Brookline Bancorp, Inc. | 2,405 | 26 | ||||||
Bryn Mawr Bank Corp. | 1,400 | 31 | ||||||
Camco Financial Corp. | 700 | 9 | ||||||
Camden National Corp. | 700 | 23 | ||||||
Capital City Bank Group, Inc. (a) | 1,875 | 53 | ||||||
Capitol Bancorp Ltd. | 1,500 | 32 | ||||||
Capitol Federal Financial | 6,920 | 229 | ||||||
Cascade Bancorp | 3,318 | 64 | ||||||
Cathay General Bancorp | 3,200 | 99 | ||||||
Centerline Holding Co. (a) | 3,900 | 54 | ||||||
Central Pacific Financial Corp. | 3,400 | 76 | ||||||
Century Bancorp Inc., Class A | 800 | 20 |
See financial notes. 1
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Charter Financial Corp. | 900 | 45 | ||||||
Chemical Financial Corp. | 1,383 | 35 | ||||||
Chittenden Corp. | 4,772 | 170 | ||||||
Citizens First Bancorp, Inc. | 700 | 13 | ||||||
Citizens Republic Bancorp, Inc. | 5,650 | 86 | ||||||
Citizens South Banking Corp. | 1,000 | 12 | ||||||
City Holding Co. | 1,800 | 68 | ||||||
City National Corp. | 3,100 | 210 | ||||||
Clayton Holdings, Inc. * | 8,000 | 38 | ||||||
Columbia Banking System, Inc. | 1,951 | 61 | ||||||
Comerica, Inc. | 13,496 | 630 | ||||||
Commerce Bancorp, Inc. | 11,320 | 461 | ||||||
Commerce Bancshares, Inc. | 13,997 | 660 | ||||||
Community Bank System, Inc. | 1,400 | 29 | ||||||
Community Trust Bancorp, Inc. | 2,487 | 72 | ||||||
Corus Bankshares, Inc. (a) | 4,000 | 44 | ||||||
Countrywide Financial Corp. (a) | 45,000 | 698 | ||||||
Cullen/Frost Bankers, Inc. | 6,300 | 335 | ||||||
CVB Financial Corp. | 5,811 | 68 | ||||||
Dime Community Bancshares | 3,375 | 49 | ||||||
Downey Financial Corp. | 2,000 | 81 | ||||||
East West Bancorp, Inc. | 2,600 | 88 | ||||||
F.N.B. Corp. | 2,639 | 44 | ||||||
Fannie Mae | 78,900 | 4,500 | ||||||
Fifth Third Bancorp | 42,601 | 1,333 | ||||||
First BanCorp Puerto Rico | 4,200 | 37 | ||||||
First Busey Corp., Class A | 1,500 | 31 | ||||||
First Charter Corp. | 3,500 | 106 | ||||||
First Citizens BancShares, Inc., Class A | 300 | 49 | ||||||
First Commonwealth Financial Corp. | 2,504 | 29 | ||||||
First Financial Bancorp | 1,839 | 22 | ||||||
First Financial Bankshares, Inc. | 2,000 | 78 | ||||||
First Financial Corp. | 600 | 18 | ||||||
First Financial Holdings, Inc. | 3,900 | 113 | ||||||
First Horizon National Corp. (a) | 10,800 | 282 | ||||||
First Indiana Corp. | 1,718 | 55 | ||||||
First M&F Corp. | 2,000 | 34 | ||||||
First Merchants Corp. | 1,041 | 23 | ||||||
First Midwest Bancorp, Inc. | 3,125 | 105 | ||||||
First Niagara Financial Group, Inc. | 7,670 | 101 | ||||||
First Place Financial Corp. | 2,900 | 48 | ||||||
First United Corp. | 2,200 | 43 | ||||||
FirstFed Financial Corp. (a)* | 400 | 17 | ||||||
FirstMerit Corp. | 7,300 | 155 | ||||||
Flagstar Bancorp, Inc. | 6,200 | 50 | ||||||
Flushing Financial Corp. | 3,300 | 56 | ||||||
Freddie Mac | 56,100 | 2,930 | ||||||
Fremont General Corp. (a) | 6,200 | 17 | ||||||
Frontier Financial Corp. | 1,575 | 35 | ||||||
Fulton Financial Corp. | 14,762 | 194 | ||||||
Glacier Bancorp, Inc. | 3,697 | 75 | ||||||
Great Lakes Bancorp, Inc. * | 506 | 7 | ||||||
Great Southern Bancorp, Inc. (a) | 1,400 | 33 | ||||||
Hancock Holding Co. | 2,100 | 80 | ||||||
Harleysville National Corp. | 1,274 | 19 | ||||||
Hawthorn Bancshares, Inc. | 750 | 22 | ||||||
Heritage Financial Corp. | 735 | 16 | ||||||
Home Federal Bancorp | 800 | 21 | ||||||
Horizon Financial Corp. | 2,695 | 47 | ||||||
Hudson City Bancorp, Inc. | 48,731 | 763 | ||||||
Huntington Bancshares, Inc. | 29,199 | 523 | ||||||
IBERIABANK Corp. | 875 | 43 | ||||||
Imperial Capital Bancorp, Inc. | 700 | 15 | ||||||
Independent Bank Corp., Massachusetts | 1,000 | 30 | ||||||
Independent Bank Corp., Michigan | 4,302 | 45 | ||||||
IndyMac Bancorp, Inc. (a) | 5,900 | 79 | ||||||
Integra Bank Corp. | 1,225 | 21 | ||||||
International Bancshares Corp. | 7,784 | 170 | ||||||
Irwin Financial Corp. | 3,700 | 36 | ||||||
Kearny Financial Corp. | 2,000 | 26 | ||||||
KeyCorp | 34,300 | 976 | ||||||
Lakeland Financial Corp. | 2,200 | 46 | ||||||
M&T Bank Corp. | 8,962 | 892 | ||||||
MainSource Financial Group, Inc. | 1,735 | 29 | ||||||
Marshall & Ilsley Corp. | 19,650 | 839 | ||||||
MASSBANK Corp. | 1,500 | 54 | ||||||
MB Financial, Inc. | 2,133 | 71 | ||||||
Merchants Bancshares, Inc. | 750 | 16 | ||||||
MGIC Investment Corp. (a) | 9,300 | 180 | ||||||
Midwest Banc Holdings, Inc. | 1,300 | 17 | ||||||
MutualFirst Financial, Inc. | 2,000 | 35 | ||||||
Nara Bancorp, Inc. | 4,000 | 62 | ||||||
National City Corp. | 64,643 | 1,568 | ||||||
National Penn Bancshares, Inc. (a) | 4,075 | 69 | ||||||
NBT Bancorp, Inc. | 1,400 | 35 | ||||||
New York Community Bancorp, Inc. | 27,585 | 513 | ||||||
NexCen Brands, Inc. * | 1,100 | 7 | ||||||
North Valley Bancorp | 1,500 | 27 | ||||||
Northrim BanCorp, Inc. | 3,281 | 75 | ||||||
Northwest Bancorp, Inc. | 5,000 | 147 | ||||||
Oak Hill Financial, Inc. | 1,000 | 29 | ||||||
OceanFirst Financial Corp. | 1,050 | 17 | ||||||
Ocwen Financial Corp. * | 8,420 | 63 | ||||||
Old National Bancorp | 6,244 | 104 | ||||||
Omega Financial Corp. | 1,000 | 27 | ||||||
Oriental Financial Group, Inc. | 1,663 | 21 | ||||||
PAB Bankshares, Inc. | 700 | 10 | ||||||
Pacific Capital Bancorp | 2,844 | 59 | ||||||
Park National Corp. | 845 | 67 | ||||||
Partners Trust Financial Group, Inc. | 6,470 | 80 | ||||||
People’s United Financial, Inc. | 25,987 | 462 | ||||||
Peoples Financial Corp. | 3,000 | 64 | ||||||
PFF Bancorp, Inc. | 1,680 | 18 |
2 See financial notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Pinnacle Financial Partners, Inc. * | 475 | 14 | ||||||
PNC Financial Services Group, Inc. | 27,998 | 2,020 | ||||||
Popular, Inc. (a) | 21,700 | 229 | ||||||
Prosperity Bancshares, Inc. | 2,400 | 78 | ||||||
Provident Bankshares Corp. | 1,657 | 41 | ||||||
Provident Financial Holdings, Inc. | 750 | 15 | ||||||
Provident Financial Services, Inc. | 5,217 | 83 | ||||||
R&G Financial Corp., Class B * | 2,550 | 4 | ||||||
Radian Group, Inc. (a) | 6,702 | 84 | ||||||
Regions Financial Corp. | 61,962 | 1,680 | ||||||
Renasant Corp. | 1,125 | 26 | ||||||
Republic Bancorp, Inc., Class A | 1,821 | 28 | ||||||
Roma Financial Corp. | 2,500 | 44 | ||||||
S&T Bancorp, Inc. | 1,400 | 46 | ||||||
S.Y. Bancorp, Inc. | 1,470 | 37 | ||||||
Sandy Spring Bancorp, Inc. | 2,900 | 86 | ||||||
Santander BanCorp | 4,686 | 64 | ||||||
Seacoast Banking Corp. of Florida (a) | 1,980 | 29 | ||||||
Shore Bancshares, Inc. | 750 | 18 | ||||||
Simmons First National Corp., Class A | 1,000 | 27 | ||||||
Southwest Bancorp, Inc. | 3,300 | 62 | ||||||
Sovereign Bancorp, Inc. (a) | 30,389 | 438 | ||||||
State Bancorp, Inc. | 1,058 | 17 | ||||||
Sterling Bancorp | 1,918 | 28 | ||||||
Sterling Bancshares, Inc. | 3,150 | 38 | ||||||
Sterling Financial Corp. | 1,562 | 29 | ||||||
Sterling Financial Corp., Washington | 1,827 | 41 | ||||||
Suffolk Bancorp | 2,400 | 79 | ||||||
Sun Bancorp, Inc. * | 3,827 | 66 | ||||||
SunTrust Banks, Inc. | 31,842 | 2,312 | ||||||
Susquehanna Bancshares, Inc. | 3,168 | 64 | ||||||
SVB Financial Group * | 2,200 | 114 | ||||||
Synovus Financial Corp. | 24,600 | 648 | ||||||
TCF Financial Corp. | 13,600 | 310 | ||||||
TF Financial Corp. | 700 | 20 | ||||||
The Colonial BancGroup, Inc. (a) | 10,100 | 194 | ||||||
The First of Long Island Corp. | 4,000 | 75 | ||||||
The PMI Group, Inc. | 8,100 | 130 | ||||||
The South Financial Group, Inc. | 4,500 | 93 | ||||||
Timberland Bancorp, Inc. | 2,000 | 29 | ||||||
Tompkins Financial Corp. | 931 | 39 | ||||||
Triad Guaranty, Inc. (a)* | 1,700 | 14 | ||||||
TriCo Bancshares | 400 | 9 | ||||||
TrustCo Bank Corp. NY | 2,857 | 30 | ||||||
Trustmark Corp. | 4,300 | 116 | ||||||
U.S. Bancorp | 158,531 | 5,257 | ||||||
U.S.B. Holding Co., Inc. | 1,958 | 43 | ||||||
UCBH Holdings, Inc. (a) | 9,400 | 160 | ||||||
UMB Financial Corp. | 3,574 | 150 | ||||||
Umpqua Holdings Corp. | 343 | 6 | ||||||
Union Bankshares Corp. | 1,050 | 22 | ||||||
UnionBanCal Corp. | 20,100 | 1,086 | ||||||
United Bankshares, Inc. | 3,400 | 103 | ||||||
United Community Banks, Inc. (a) | 3,750 | 83 | ||||||
Valley National Bancorp (a) | 8,977 | 184 | ||||||
W Holding Co., Inc. (a) | 11,938 | 25 | ||||||
Wachovia Corp. | 171,582 | 7,846 | ||||||
Washington Federal, Inc. | 7,942 | 192 | ||||||
Washington Mutual, Inc. | 78,449 | 2,187 | ||||||
Washington Trust Bancorp, Inc. | 1,000 | 25 | ||||||
Webster Financial Corp. | 4,663 | 169 | ||||||
Wells Fargo & Co. | 279,406 | 9,503 | ||||||
WesBanco, Inc. | 3,200 | 74 | ||||||
West Coast Bancorp | 1,200 | 33 | ||||||
Westamerica Bancorp | 1,700 | 82 | ||||||
Whitney Holding Corp. | 6,675 | 171 | ||||||
Willow Financial Bancorp, Inc. | 1,675 | 18 | ||||||
Wilmington Trust Corp. | 5,700 | 207 | ||||||
Wintrust Financial Corp. | 1,800 | 66 | ||||||
WSFS Financial Corp. | 1,000 | 58 | ||||||
Zions Bancorp | 7,725 | 457 | ||||||
65,711 | ||||||||
Capital Goods 8.7% | ||||||||
3D Systems Corp. (a)* | 1,400 | 31 | ||||||
3M Co. | 65,000 | 5,613 | ||||||
A.O. Smith Corp. | 1,300 | 49 | ||||||
AAON, Inc. | 6,113 | 112 | ||||||
AAR Corp. * | 5,000 | 160 | ||||||
Accuride Corp. * | 2,500 | 25 | ||||||
Aceto Corp. | 5,000 | 44 | ||||||
Actuant Corp., Class A | 2,840 | 196 | ||||||
Acuity Brands, Inc. | 5,200 | 249 | ||||||
Aecom Technology Corp. * | 8,000 | 270 | ||||||
Aerosonic Corp. * | 300 | 2 | ||||||
AGCO Corp. * | 6,762 | 404 | ||||||
Aircastle Ltd. | 5,500 | 178 | ||||||
Alamo Group, Inc. | 500 | 11 | ||||||
Albany International Corp., Class A | 3,918 | 147 | ||||||
Alliant Techsystems, Inc. * | 2,437 | 269 | ||||||
American Science & Engineering, Inc. (a) | 500 | 30 | ||||||
American Standard Cos., Inc. | 15,400 | 574 | ||||||
American Superconductor Corp. * | 700 | 19 | ||||||
American Woodmark Corp. | 4,000 | 101 | ||||||
Ameron International Corp. | 900 | 97 | ||||||
AMETEK, Inc. | 9,300 | 437 | ||||||
Ampco-Pittsburgh Corp. | 2,800 | 112 | ||||||
Apogee Enterprises, Inc. | 1,200 | 28 | ||||||
Applied Industrial Technologies, Inc. | 6,525 | 231 | ||||||
Armstrong World Industries, Inc. * | 3,500 | 144 | ||||||
Astronics Corp. * | 1,250 | 56 |
See financial notes. 3
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Badger Meter, Inc. | 4,000 | 154 | ||||||
Baldor Electric Co. | 3,800 | 153 | ||||||
Barnes Group, Inc. | 3,600 | 132 | ||||||
BE Aerospace, Inc. * | 6,200 | 308 | ||||||
Belden, Inc. | 4,400 | 256 | ||||||
Blount International, Inc. * | 1,200 | 15 | ||||||
Brady Corp., Class A | 1,400 | 52 | ||||||
Breeze-Eastern Corp. * | 500 | 6 | ||||||
Briggs & Stratton Corp. (a) | 3,500 | 79 | ||||||
C&D Technologies, Inc. (a)* | 4,500 | 22 | ||||||
Carlisle Cos., Inc. | 3,200 | 126 | ||||||
Cascade Corp. | 4,400 | 277 | ||||||
Caterpillar, Inc. | 53,800 | 4,014 | ||||||
Ceradyne, Inc. * | 2,500 | 171 | ||||||
Chase Corp. | 200 | 4 | ||||||
CIRCOR International, Inc. | 3,750 | 188 | ||||||
CLARCOR, Inc. | 3,400 | 124 | ||||||
Columbus McKinnon Corp. * | 2,400 | 80 | ||||||
Cooper Industries Ltd., Class A | 27,400 | 1,435 | ||||||
Crane Co. | 5,000 | 237 | ||||||
Cummins, Inc. | 7,800 | 936 | ||||||
Curtiss-Wright Corp. | 3,600 | 203 | ||||||
Danaher Corp. | 24,000 | 2,056 | ||||||
Deere & Co. | 19,000 | 2,943 | ||||||
Donaldson Co., Inc. | 6,500 | 279 | ||||||
Dover Corp. | 16,700 | 768 | ||||||
DRS Technologies, Inc. | 2,357 | 135 | ||||||
Ducommun, Inc. * | 3,200 | 127 | ||||||
DynCorp International, Inc., Class A * | 4,500 | 102 | ||||||
Eaton Corp. | 12,600 | 1,166 | ||||||
Electro Rent Corp. | 5,100 | 74 | ||||||
EMCOR Group, Inc. * | 7,800 | 269 | ||||||
Emerson Electric Co. | 70,000 | 3,659 | ||||||
Energy Conversion Devices, Inc. * | 600 | 16 | ||||||
ESCO Technologies, Inc. (a)* | 2,800 | 116 | ||||||
Esterline Technologies Corp. * | 2,400 | 131 | ||||||
Evergreen Solar, Inc. * | 1,000 | 12 | ||||||
Fastenal Co. | 13,200 | 587 | ||||||
Federal Signal Corp. | 5,300 | 71 | ||||||
First Solar, Inc. * | 5,000 | 794 | ||||||
Flow International Corp. * | 900 | 8 | ||||||
Flowserve Corp. | 3,900 | 308 | ||||||
Fluor Corp. | 5,600 | 885 | ||||||
Franklin Electric Co., Inc. (a) | 1,300 | 57 | ||||||
FreightCar America, Inc. | 2,500 | 108 | ||||||
FuelCell Energy, Inc. * | 1,200 | 12 | ||||||
Furmanite Corp. * | 1,400 | 17 | ||||||
Gardner Denver, Inc. * | 3,400 | 123 | ||||||
GATX Corp. | 4,000 | 164 | ||||||
GenCorp, Inc. * | 2,500 | 29 | ||||||
General Cable Corp. * | 4,700 | 338 | ||||||
General Dynamics Corp. | 31,400 | 2,856 | ||||||
General Electric Co. | 847,966 | 34,902 | ||||||
Gibraltar Industries, Inc. | 2,500 | 45 | ||||||
Global Power Equipment Group, Inc. * | 1,000 | 2 | ||||||
Goodman Global, Inc. * | 5,400 | 133 | ||||||
Goodrich Corp. | 8,404 | 585 | ||||||
Graco, Inc. | 7,012 | 276 | ||||||
GrafTech International Ltd. * | 8,600 | 163 | ||||||
Granite Construction, Inc. | 4,850 | 208 | ||||||
Hardinge, Inc. | 1,800 | 58 | ||||||
Harsco Corp. | 6,200 | 376 | ||||||
HEICO Corp., Class A | 2,286 | 99 | ||||||
Herley Industries, Inc. * | 4,000 | 61 | ||||||
Hexcel Corp. * | 2,000 | 50 | ||||||
Honeywell International, Inc. | 71,062 | 4,293 | ||||||
Hubbell, Inc., Class B | 3,800 | 209 | ||||||
Huttig Building Products, Inc. * | 811 | 3 | ||||||
IDEX Corp. | 7,225 | 256 | ||||||
II-VI, Inc. * | 3,800 | 132 | ||||||
Illinois Tool Works, Inc. | 51,700 | 2,960 | ||||||
Ingersoll-Rand Co., Ltd., Class A | 27,400 | 1,380 | ||||||
Insituform Technologies, Inc., Class A * | 1,300 | 18 | ||||||
Integrated Electrical Services, Inc. * | 5,105 | 119 | ||||||
ITT Corp. | 17,400 | 1,164 | ||||||
Jacobs Engineering Group, Inc. * | 10,600 | 924 | ||||||
Joy Global, Inc. | 19,350 | 1,123 | ||||||
Kadant, Inc. * | 1 | — | ||||||
Kaydon Corp. (a) | 3,300 | 177 | ||||||
KBR, Inc. * | 13,500 | 579 | ||||||
Kennametal, Inc. | 4,000 | 365 | ||||||
L-3 Communications Holdings, Inc. | 9,100 | 998 | ||||||
Ladish Co., Inc. * | 1,300 | 60 | ||||||
Lawson Products, Inc. | 2,000 | 71 | ||||||
Lennox International, Inc. | 4,771 | 170 | ||||||
Lincoln Electric Holdings, Inc. | 3,900 | 282 | ||||||
Lockheed Martin Corp. | 37,052 | 4,077 | ||||||
Lydall, Inc. * | 2,500 | 27 | ||||||
Magnetek, Inc. * | 1,500 | 8 | ||||||
Masco Corp. | 35,800 | 862 | ||||||
McDermott International, Inc. * | 25,000 | 1,526 | ||||||
Medis Technologies Ltd. (a)* | 1,110 | 16 | ||||||
Merrimac Industries, Inc. * | 600 | 6 | ||||||
Michael Baker Corp. * | 3,000 | 158 | ||||||
Moog, Inc., Class A * | 2,787 | 129 | ||||||
MSC Industrial Direct Co., Inc., Class A | 4,300 | 209 | ||||||
Mueller Industries, Inc. | 4,200 | 151 | ||||||
Mueller Water Products, Inc., Class B | 3,139 | 33 | ||||||
NACCO Industries, Inc., Class A | 1,300 | 135 | ||||||
NCI Building Systems, Inc. * | 2,900 | 114 | ||||||
Nordson Corp. | 4,000 | 214 | ||||||
Northrop Grumman Corp. | 30,032 | 2,511 | ||||||
Omega Flex, Inc. | 700 | 11 |
4 See financial notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Orbital Sciences Corp. * | 4,600 | 117 | ||||||
Oshkosh Truck Corp. | 9,000 | 488 | ||||||
Owens Corning, Inc. (a)* | 11,000 | 254 | ||||||
PACCAR, Inc. | 31,725 | 1,763 | ||||||
Pall Corp. | 10,900 | 437 | ||||||
Parker Hannifin Corp. | 16,500 | 1,326 | ||||||
Pentair, Inc. | 9,500 | 336 | ||||||
Perini Corp. * | 5,000 | 287 | ||||||
Plug Power, Inc. * | 2,248 | 8 | ||||||
Powell Industries, Inc. * | 1,000 | 42 | ||||||
Power-One, Inc. * | 6,000 | 34 | ||||||
Precision Castparts Corp. | 10,302 | 1,543 | ||||||
Quanta Services, Inc. * | 18,371 | 606 | ||||||
Quipp, Inc. | 900 | 5 | ||||||
Raven Industries, Inc. | 2,800 | 121 | ||||||
Raytheon Co. | 34,900 | 2,220 | ||||||
Regal-Beloit Corp. | 2,500 | 123 | ||||||
Rockwell Automation, Inc. | 15,700 | 1,081 | ||||||
Rockwell Collins, Inc. | 13,100 | 980 | ||||||
Roper Industries, Inc. | 6,500 | 460 | ||||||
Rush Enterprises, Inc., Class B * | 750 | 12 | ||||||
Sequa Corp., Class A * | 2,800 | 487 | ||||||
Simpson Manufacturing Co., Inc. (a) | 3,200 | 96 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 11,000 | 382 | ||||||
SPX Corp. | 8,610 | 872 | ||||||
Standex International Corp. | 3,000 | 64 | ||||||
Stantec, Inc. * | 1,690 | 66 | ||||||
SunPower Corp., Class A (a)* | 1,300 | 164 | ||||||
Taser International, Inc. * | 1,700 | 28 | ||||||
Tecumseh Products Co., Class A * | 3,200 | 58 | ||||||
Teledyne Technologies, Inc. * | 12,157 | 636 | ||||||
Teleflex, Inc. | 4,300 | 315 | ||||||
Tennant Co. | 4,200 | 198 | ||||||
Terex Corp. * | 7,400 | 549 | ||||||
Textron, Inc. | 23,600 | 1,633 | ||||||
The Allied Defense Group, Inc. * | 500 | 4 | ||||||
The Boeing Co. | 68,800 | 6,783 | ||||||
The Genlyte Group, Inc. * | 3,200 | 208 | ||||||
The Gorman-Rupp Co. | 3,593 | 139 | ||||||
The Greenbrier Cos., Inc. | 4,100 | 110 | ||||||
The Manitowoc Co., Inc. | 11,600 | 571 | ||||||
The Middleby Corp. * | 7,000 | 456 | ||||||
The Shaw Group, Inc. * | 4,500 | 336 | ||||||
The Timken Co. | 6,600 | 220 | ||||||
The Toro Co. | 4,100 | 228 | ||||||
Thomas & Betts Corp. * | 7,300 | 409 | ||||||
Titan International, Inc. | 800 | 24 | ||||||
TransDigm Group, Inc. * | 3,600 | 164 | ||||||
Tredegar Corp. | 5,100 | 89 | ||||||
Trinity Industries, Inc. | 1,650 | 60 | ||||||
Triumph Group, Inc. | 1,200 | 96 | ||||||
Tyco International Ltd. | 38,525 | 1,586 | ||||||
United Industrial Corp. (a) | 1,200 | 97 | ||||||
United Rentals, Inc. * | 5,900 | 202 | ||||||
United Technologies Corp. | 84,068 | 6,439 | ||||||
Universal Forest Products, Inc. | 2,500 | 90 | ||||||
URS Corp. * | 3,700 | 229 | ||||||
USG Corp. (a)* | 3,900 | 155 | ||||||
Valmont Industries, Inc. | 1,900 | 182 | ||||||
Vicor Corp. | 4,200 | 59 | ||||||
W.W. Grainger, Inc. | 7,300 | 656 | ||||||
Wabash National Corp. | 2,500 | 25 | ||||||
Wabtec Corp. | 2,828 | 106 | ||||||
Walter Industries, Inc. | 4,900 | 150 | ||||||
Watsco, Inc. | 3,400 | 142 | ||||||
Watts Water Technologies, Inc., Class A | 1,000 | 28 | ||||||
WESCO International, Inc. * | 4,800 | 224 | ||||||
Woodward Governor Co. | 4,000 | 268 | ||||||
137,525 | ||||||||
Commercial Services & Supplies 1.1% | ||||||||
A.T. Cross Co., Class A * | 2,400 | 27 | ||||||
ABM Industries, Inc. | 4,900 | 115 | ||||||
Administaff, Inc. | 2,800 | 112 | ||||||
Allied Waste Industries, Inc. * | 29,100 | 368 | ||||||
American Locker Group, Inc. * | 500 | 3 | ||||||
American Reprographics Co. * | 4,000 | 81 | ||||||
AMREP Corp. (a) | 2,500 | 93 | ||||||
Angelica Corp. | 2,500 | 43 | ||||||
Avery Dennison Corp. | 9,700 | 562 | ||||||
Bowne & Co., Inc. | 4,200 | 73 | ||||||
Casella Waste Systems, Inc., Class A * | 2,500 | 37 | ||||||
CDI Corp. | 3,700 | 102 | ||||||
Cenveo, Inc. * | 4,300 | 97 | ||||||
ChoicePoint, Inc. * | 6,900 | 271 | ||||||
Cintas Corp. | 15,350 | 562 | ||||||
Clean Harbors, Inc. * | 2,500 | 123 | ||||||
CompX International, Inc., Class A | 1,300 | 26 | ||||||
Consolidated Graphics, Inc. * | 3,900 | 250 | ||||||
Copart, Inc. * | 6,550 | 251 | ||||||
Cornell Cos., Inc. * | 4,600 | 114 | ||||||
Corrections Corp. of America * | 11,484 | 325 | ||||||
CoStar Group, Inc. * | 800 | 46 | ||||||
Covanta Holding Corp. * | 11,700 | 317 | ||||||
CRA International, Inc. * | 2,500 | 129 | ||||||
Deluxe Corp. | 3,800 | 153 | ||||||
Diamond Management & Technology Consultants, Inc. | 1,000 | 11 | ||||||
Ennis, Inc. | 4,500 | 92 | ||||||
Equifax, Inc. | 13,095 | 504 | ||||||
Exponent, Inc. * | 6,000 | 181 | ||||||
First Consulting Group, Inc. * | 4,800 | 61 | ||||||
FTI Consulting, Inc. * | 2,700 | 147 |
See financial notes. 5
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
G & K Services, Inc., Class A | 4,100 | 166 | ||||||
GP Strategies Corp. * | 1,500 | 16 | ||||||
Healthcare Services Group, Inc. (a) | 8,437 | 185 | ||||||
Heidrick & Struggles International, Inc. | 3,100 | 134 | ||||||
Herman Miller, Inc. | 5,700 | 155 | ||||||
HNI Corp. (a) | 4,000 | 173 | ||||||
Hudson Highland Group, Inc. * | 3,220 | 37 | ||||||
ICT Group, Inc. * | 3,000 | 33 | ||||||
IHS, Inc., Class A * | 3,600 | 227 | ||||||
IKON Office Solutions, Inc. | 12,500 | 165 | ||||||
Interface, Inc., Class A | 5,800 | 111 | ||||||
Kelly Services, Inc., Class A | 5,700 | 120 | ||||||
Kforce, Inc. * | 2,905 | 35 | ||||||
Knoll, Inc. | 4,000 | 76 | ||||||
Korn/Ferry International * | 3,600 | 69 | ||||||
Labor Ready, Inc. * | 6,000 | 105 | ||||||
Learning Tree International, Inc. * | 1,400 | 31 | ||||||
M&F Worldwide Corp. * | 1,200 | 63 | ||||||
Manpower, Inc. | 6,991 | 523 | ||||||
McGrath Rentcorp | 1,600 | 55 | ||||||
Mine Safety Appliances Co. (a) | 2,700 | 124 | ||||||
Mobile Mini, Inc. * | 1,200 | 22 | ||||||
Monster Worldwide, Inc. * | 9,800 | 398 | ||||||
Multi-Color Corp. | 2,625 | 60 | ||||||
Navigant Consulting, Inc. * | 5,000 | 66 | ||||||
On Assignment, Inc. * | 4,700 | 39 | ||||||
PHH Corp. * | 4,186 | 94 | ||||||
Pitney Bowes, Inc. | 20,000 | 801 | ||||||
R.R. Donnelley & Sons Co. | 17,000 | 685 | ||||||
Republic Services, Inc. | 26,550 | 908 | ||||||
Resources Connection, Inc. | 3,700 | 84 | ||||||
Robert Half International, Inc. | 14,000 | 421 | ||||||
Rollins, Inc. | 6,675 | 203 | ||||||
School Specialty, Inc. * | 1,600 | 54 | ||||||
Spherion Corp. * | 6,830 | 60 | ||||||
Steelcase, Inc., Class A | 11,500 | 206 | ||||||
Stericycle, Inc. * | 6,400 | 373 | ||||||
TeleTech Holdings, Inc. * | 5,000 | 125 | ||||||
Tetra Tech, Inc. * | 12,031 | 281 | ||||||
The Advisory Board Co. * | 1,000 | 64 | ||||||
The Brink’s Co. | 5,600 | 351 | ||||||
The Corporate Executive Board Co. | 2,700 | 192 | ||||||
The Dun & Bradstreet Corp. | 12,140 | 1,176 | ||||||
The Geo Group, Inc. * | 11,400 | 361 | ||||||
The Standard Register Co. | 4,100 | 53 | ||||||
TRC Cos., Inc. * | 1,350 | 16 | ||||||
United Stationers, Inc. * | 2,900 | 168 | ||||||
Viad Corp. | 3,625 | 128 | ||||||
Virco Manufacturing Corp. * | 1,170 | 13 | ||||||
Volt Information Sciences, Inc. * | 3,150 | 49 | ||||||
Waste Connections, Inc. * | 5,475 | 185 | ||||||
Waste Industries USA, Inc. | 4,000 | 144 | ||||||
Waste Management, Inc. | 48,100 | 1,750 | ||||||
Watson Wyatt Worldwide, Inc., Class A | 4,600 | 219 | ||||||
Westaff, Inc. * | 2,000 | 7 | ||||||
17,635 | ||||||||
Consumer Durables & Apparel 1.4% | ||||||||
American Greetings Corp., Class A | 8,500 | 224 | ||||||
Avatar Holdings, Inc. (a)* | 2,500 | 116 | ||||||
Beazer Homes USA, Inc. (a) | 2,553 | 29 | ||||||
Blyth, Inc. | 4,800 | 92 | ||||||
Brookfield Homes Corp. (a) | 3,074 | 46 | ||||||
Brunswick Corp. | 7,400 | 165 | ||||||
Callaway Golf Co. | 5,600 | 97 | ||||||
Carter’s, Inc. * | 5,000 | 110 | ||||||
Cavco Industries, Inc. * | 410 | 16 | ||||||
Centex Corp. (a) | 10,700 | 268 | ||||||
Chromcraft Revington, Inc. * | 1,300 | 7 | ||||||
Coach, Inc. * | 32,008 | 1,170 | ||||||
Columbia Sportswear Co. (a) | 4,350 | 212 | ||||||
Craftmade International, Inc. | 2,800 | 26 | ||||||
CSS Industries, Inc. | 3,400 | 135 | ||||||
D.R. Horton, Inc. | 24,604 | 312 | ||||||
Deckers Outdoor Corp. * | 2,500 | 349 | ||||||
DGSE Cos, Inc. * | 700 | 4 | ||||||
Dominion Homes, Inc. * | 500 | 1 | ||||||
Eastman Kodak Co. (a) | 22,700 | 651 | ||||||
Ethan Allen Interiors, Inc. | 4,200 | 130 | ||||||
Flexsteel Industries, Inc. | 600 | 8 | ||||||
Foamex International, Inc. * | 2,278 | 19 | ||||||
Fortune Brands, Inc. | 11,500 | 963 | ||||||
Fossil, Inc. * | 5,462 | 205 | ||||||
Furniture Brands International, Inc. (a) | 4,700 | 57 | ||||||
Garmin Ltd. (a) | 16,000 | 1,718 | ||||||
Hampshire Group Ltd. * | 2,000 | 25 | ||||||
Hanesbrands, Inc. * | 11,047 | 343 | ||||||
Harman International Industries, Inc. | 6,800 | 573 | ||||||
Hasbro, Inc. (a) | 14,500 | 433 | ||||||
Hovnanian Enterprises, Inc., Class A (a)* | 3,700 | 42 | ||||||
Jarden Corp. * | 7,059 | 251 | ||||||
Jones Apparel Group, Inc. | 12,156 | 255 | ||||||
K-Swiss, Inc., Class A | 2,400 | 56 | ||||||
KB Home (a) | 7,800 | 216 | ||||||
Kellwood Co. | 2,900 | 48 | ||||||
Kenneth Cole Productions, Inc., Class A | 3,100 | 58 | ||||||
Kimball International, Inc., Class B | 6,100 | 81 | ||||||
Leggett & Platt, Inc. | 16,200 | 315 | ||||||
Lennar Corp., Class A (a) | 12,190 | 279 | ||||||
Lenox Group, Inc. * | 3,300 | 13 | ||||||
Levitt Corp., Class A | 550 | 1 |
6 See financial notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Liz Claiborne, Inc. (a) | 8,600 | 245 | ||||||
M.D.C. Holdings, Inc. | 4,403 | 178 | ||||||
M/I Homes, Inc. | 1,800 | 30 | ||||||
Maidenform Brands, Inc. * | 5,000 | 74 | ||||||
Marine Products Corp. | 405 | 3 | ||||||
MarineMax, Inc. (a)* | 800 | 11 | ||||||
Mattel, Inc. | 34,300 | 717 | ||||||
Meritage Homes Corp. * | 1,000 | 16 | ||||||
Mohawk Industries, Inc. * | 4,819 | 411 | ||||||
Movado Group, Inc. | 3,300 | 99 | ||||||
Nautilus, Inc. (a) | 4,125 | 27 | ||||||
Newell Rubbermaid, Inc. | 23,900 | 697 | ||||||
NIKE, Inc., Class B | 41,400 | 2,743 | ||||||
NVR, Inc. * | 500 | 238 | ||||||
Oakley, Inc. * | 6,700 | 196 | ||||||
Oxford Industries, Inc. | 2,500 | 65 | ||||||
Palm Harbor Homes, Inc. (a)* | 2,700 | 38 | ||||||
Perry Ellis International, Inc. * | 2,500 | 58 | ||||||
Phillips-Van Heusen Corp. | 5,600 | 268 | ||||||
Polaris Industries, Inc. (a) | 3,200 | 157 | ||||||
Polo Ralph Lauren Corp., Class A | 7,500 | 516 | ||||||
Pool Corp. (a) | 5,662 | 134 | ||||||
Pulte Homes, Inc. | 20,244 | 300 | ||||||
Quiksilver, Inc. * | 4,000 | 54 | ||||||
RC2 Corp. * | 2,200 | 66 | ||||||
Russ Berrie & Co., Inc. * | 3,000 | 53 | ||||||
Skechers U.S.A., Inc., Class A * | 6,500 | 160 | ||||||
Skyline Corp. | 2,600 | 92 | ||||||
Snap-on, Inc. | 4,000 | 200 | ||||||
Standard Pacific Corp. (a) | 4,800 | 23 | ||||||
Stanley Furniture Co., Inc. | 5,200 | 71 | ||||||
Steven Madden Ltd. | 2,700 | 60 | ||||||
Sturm, Ruger & Co., Inc. * | 6,000 | 56 | ||||||
Superior Uniform Group, Inc. | 1,600 | 21 | ||||||
Tandy Brands Accessories, Inc. | 1,000 | 11 | ||||||
Tarragon Corp. (a)* | 4,422 | 9 | ||||||
Tempur-Pedic International, Inc. | 8,000 | 288 | ||||||
The Black & Decker Corp. | 7,100 | 638 | ||||||
The Boyds Collection Ltd. * | 34 | — | ||||||
The Ryland Group, Inc. (a) | 3,700 | 105 | ||||||
The Stanley Works | 6,600 | 380 | ||||||
The Timberland Co., Class A * | 5,300 | 103 | ||||||
The Warnaco Group, Inc. * | 2,500 | 102 | ||||||
Toll Brothers, Inc. * | 11,200 | 257 | ||||||
TOUSA, Inc. | 2,812 | 2 | ||||||
Tupperware Brands Corp. | 4,800 | 173 | ||||||
UniFirst Corp. | 1,500 | 56 | ||||||
Uniroyal Technology Corp. * | 1,100 | — | ||||||
Universal Electronics, Inc. * | 5,200 | 188 | ||||||
VF Corp. | 13,500 | 1,176 | ||||||
WCI Communities, Inc. (a)* | 3,800 | 21 | ||||||
Whirlpool Corp. | 6,849 | 542 | ||||||
Wolverine World Wide, Inc. | 7,800 | 200 | ||||||
22,447 | ||||||||
Consumer Services 2.5% | ||||||||
Ambassadors Groups, Inc. | 3,400 | 62 | ||||||
Ambassadors International, Inc. | 1,700 | 35 | ||||||
Ameristar Casinos, Inc. | 3,400 | 111 | ||||||
Apollo Group, Inc., Class A (a)* | 14,550 | 1,153 | ||||||
Applebee’s International, Inc. | 7,912 | 200 | ||||||
Bally Technologies, Inc. * | 3,000 | 121 | ||||||
Bob Evans Farms, Inc. | 2,200 | 62 | ||||||
Boyd Gaming Corp. | 7,800 | 326 | ||||||
Bright Horizons Family Solutions, Inc. * | 2,600 | 101 | ||||||
Brinker International, Inc. | 10,350 | 263 | ||||||
Buca, Inc. * | 1,100 | 3 | ||||||
Burger King Holdings, Inc. | 10,800 | 286 | ||||||
Career Education Corp. * | 8,614 | 308 | ||||||
Carnival Corp. | 50,000 | 2,399 | ||||||
CBRL Group, Inc. | 3,446 | 137 | ||||||
CEC Entertainment, Inc. * | 2,025 | 60 | ||||||
Cedar Fair L.P. | 5,300 | 130 | ||||||
Chipotle Mexican Grill, Inc., Class A (a)* | 2,600 | 361 | ||||||
Choice Hotels International, Inc. | 6,800 | 263 | ||||||
Churchill Downs, Inc. | 900 | 46 | ||||||
CKE Restaurants, Inc. (a) | 4,800 | 78 | ||||||
Coinstar, Inc. * | 5,000 | 172 | ||||||
Corinthian Colleges, Inc. * | 9,200 | 151 | ||||||
CPI Corp. | 2,900 | 96 | ||||||
Darden Restaurants, Inc. | 13,300 | 572 | ||||||
DeVry, Inc. | 4,800 | 262 | ||||||
Domino’s Pizza, Inc. | 5,100 | 79 | ||||||
Dover Downs Gaming & Entertainment, Inc. | 4,899 | 54 | ||||||
Dover Motorsports, Inc. | 1,400 | 9 | ||||||
Empire Resorts, Inc. * | 3,000 | 15 | ||||||
Gaylord Entertainment Co. * | 2,625 | 143 | ||||||
H&R Block, Inc. | 26,300 | 573 | ||||||
Harrah’s Entertainment, Inc. | 15,273 | 1,348 | ||||||
Icahn Enterprises L.P. (a) | 3,800 | 496 | ||||||
IHOP Corp. | 3,000 | 190 | ||||||
International Game Technology | 29,100 | 1,269 | ||||||
International Speedway Corp., Class A | 3,245 | 144 | ||||||
Interstate Hotels & Resorts, Inc. * | 2,582 | 13 | ||||||
Isle of Capri Casinos, Inc. * | 4,400 | 89 | ||||||
ITT Educational Services, Inc. (a)* | 6,000 | 763 | ||||||
Jack In the Box, Inc. * | 8,400 | 263 | ||||||
Jackson Hewitt Tax Service, Inc. | 3,000 | 94 | ||||||
Krispy Kreme Doughnuts, Inc. * | 2,100 | 7 | ||||||
Landry’s Restaurants, Inc. | 1,800 | 52 | ||||||
Las Vegas Sands Corp. * | 25,000 | 3,327 | ||||||
Life Time Fitness, Inc. * | 2,500 | 152 | ||||||
Luby’s, Inc. * | 1,400 | 15 |
See financial notes. 7
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Marriott International, Inc., Class A | 37,400 | 1,537 | ||||||
Matthews International Corp., Class A | 1,900 | 87 | ||||||
McDonald’s Corp. | 110,300 | 6,585 | ||||||
MGM MIRAGE * | 22,500 | 2,061 | ||||||
Monarch Casino & Resort, Inc. * | 8,000 | 245 | ||||||
MTR Gaming Group, Inc. * | 5,300 | 46 | ||||||
Multimedia Games, Inc. * | 1,500 | 13 | ||||||
Nobel Learning Communities, Inc. * | 500 | 7 | ||||||
O’Charley’s, Inc. | 400 | 6 | ||||||
P.F. Chang’s China Bistro, Inc. * | 800 | 23 | ||||||
Panera Bread Co., Class A * | 800 | 33 | ||||||
Papa John’s International, Inc. * | 3,400 | 79 | ||||||
Peet’s Coffee & Tea, Inc. * | 1,800 | 49 | ||||||
Penn National Gaming, Inc. * | 6,800 | 420 | ||||||
Pinnacle Entertainment, Inc. * | 3,800 | 111 | ||||||
Pre-Paid Legal Services, Inc. * | 3,600 | 215 | ||||||
Regis Corp. | 3,900 | 131 | ||||||
Royal Caribbean Cruises Ltd. | 16,500 | 707 | ||||||
Ruby Tuesday, Inc. | 5,600 | 89 | ||||||
Scientific Games Corp., Class A * | 6,500 | 235 | ||||||
Service Corp. International | 24,100 | 349 | ||||||
Shuffle Master, Inc. * | 2,812 | 38 | ||||||
Six Flags, Inc. * | 11,000 | 36 | ||||||
Sonic Corp. * | 7,968 | 197 | ||||||
Sotheby’s | 5,438 | 295 | ||||||
Speedway Motorsports, Inc. | 4,800 | 174 | ||||||
Starbucks Corp. * | 62,600 | 1,670 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 17,730 | 1,008 | ||||||
Station Casinos, Inc. | 4,650 | 418 | ||||||
Stewart Enterprises, Inc., Class A | 10,000 | 91 | ||||||
Strayer Education, Inc. | 700 | 131 | ||||||
Texas Roadhouse, Inc., Class A * | 5,900 | 75 | ||||||
The Cheesecake Factory, Inc. * | 2,887 | 65 | ||||||
The Steak n Shake Co. * | 1,580 | 24 | ||||||
Tim Hortons, Inc. | 13,949 | 529 | ||||||
Triarc Cos., Inc., Class B | 7,000 | 78 | ||||||
Vail Resorts, Inc. * | 3,800 | 231 | ||||||
Weight Watchers International, Inc. | 8,700 | 446 | ||||||
Wendy’s International, Inc. | 10,300 | 358 | ||||||
WMS Industries, Inc. * | 8,250 | 286 | ||||||
Wyndham Worldwide Corp. | 16,744 | 550 | ||||||
Wynn Resorts Ltd. | 4,000 | 646 | ||||||
YUM! Brands, Inc. | 48,000 | 1,933 | ||||||
39,160 | ||||||||
Diversified Financials 7.9% | ||||||||
Advance America Cash Advance Centers, Inc. | 6,500 | 62 | ||||||
Advanta Corp., Class A | 11,100 | 158 | ||||||
Advanta Corp., Class B | 7,500 | 119 | ||||||
Affiliated Managers Group, Inc. * | 1,800 | 237 | ||||||
AllianceBernstein Holding L.P. | 7,700 | 658 | ||||||
American Express Co. | 105,150 | 6,409 | ||||||
AmeriCredit Corp. * | 12,300 | 174 | ||||||
Ameriprise Financial, Inc. | 21,030 | 1,324 | ||||||
Asset Acceptance Capital Corp. | 2,500 | 27 | ||||||
ASTA Funding, Inc. | 2,000 | 71 | ||||||
Bank of America Corp. | 381,577 | 18,423 | ||||||
Bank of New York Mellon Corp. | 95,234 | 4,652 | ||||||
Blackrock, Inc. | 9,400 | 1,945 | ||||||
Calamos Asset Management, Inc., Class A | 2,500 | 85 | ||||||
Capital One Financial Corp. (a) | 33,710 | 2,211 | ||||||
Cash America International, Inc. | 2,500 | 98 | ||||||
CIT Group, Inc. | 18,600 | 655 | ||||||
Citigroup, Inc. | 412,286 | 17,275 | ||||||
CME Group, Inc. | 3,465 | 2,309 | ||||||
Cohen & Steers, Inc. (a) | 5,400 | 203 | ||||||
CompuCredit Corp. (a)* | 4,400 | 88 | ||||||
Credit Acceptance Corp. * | 2,400 | 54 | ||||||
Discover Financial Services | 45,150 | 871 | ||||||
Dollar Financial Corp. * | 2,500 | 82 | ||||||
E*TRADE Financial Corp. * | 34,335 | 382 | ||||||
Eaton Vance Corp. | 11,600 | 580 | ||||||
EZCORP, Inc., Class A * | 8,500 | 112 | ||||||
Federated Investors, Inc., Class B | 9,950 | 428 | ||||||
Financial Federal Corp. | 3,700 | 100 | ||||||
Franklin Resources, Inc. | 20,600 | 2,671 | ||||||
GAMCO Investors, Inc., Class A | 3,200 | 198 | ||||||
Greenhill & Co., Inc. (a) | 2,500 | 185 | ||||||
IntercontinentalExchange, Inc. * | 5,100 | 909 | ||||||
International Securities Exchange Holdings, Inc., Class A | 5,500 | 369 | ||||||
Investment Technology Group, Inc. * | 4,750 | 199 | ||||||
Janus Capital Group, Inc. (a) | 19,200 | 663 | ||||||
Jefferies Group, Inc. | 8,200 | 219 | ||||||
JPMorgan Chase & Co. | 295,944 | 13,909 | ||||||
Knight Capital Group, Inc., Class A * | 9,700 | 130 | ||||||
LaBranche & Co., Inc. * | 2,400 | 13 | ||||||
Legg Mason, Inc. | 10,050 | 834 | ||||||
Lehman Brothers Holdings, Inc. (a) | 47,744 | 3,024 | ||||||
Leucadia National Corp. (a) | 17,908 | 907 | ||||||
Merrill Lynch & Co., Inc. | 80,048 | 5,285 | ||||||
MF Global Ltd. * | 10,000 | 296 | ||||||
MicroFinancial, Inc. | 1,900 | 12 | ||||||
Moody’s Corp. | 26,600 | 1,163 | ||||||
Morgan Stanley | 90,300 | 6,074 | ||||||
Nasdaq Stock Market, Inc. * | 8,800 | 411 | ||||||
Nelnet, Inc., Class A | 4,500 | 84 | ||||||
Northern Trust Corp. | 18,500 | 1,391 | ||||||
Nuveen Investments, Inc., Class A | 7,300 | 473 | ||||||
Nymex Holdings, Inc. | 8,000 | 1,028 |
8 See financial notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
NYSE Euronext | 22,500 | 2,112 | ||||||
Penson Worldwide, Inc. * | 8,000 | 135 | ||||||
Piper Jaffray Cos., Inc. * | 950 | 49 | ||||||
Portfolio Recovery Associates, Inc. (a) | 2,000 | 90 | ||||||
Raymond James Financial, Inc. | 10,350 | 386 | ||||||
Resource America, Inc., Class A | 2,000 | 31 | ||||||
SEI Investments Co. | 19,400 | 613 | ||||||
Siebert Financial Corp. | 2,900 | 11 | ||||||
SLM Corp. | 37,300 | 1,759 | ||||||
State Street Corp. | 32,983 | 2,631 | ||||||
SWS Group, Inc. | 4,211 | 80 | ||||||
T. Rowe Price Group, Inc. | 21,400 | 1,375 | ||||||
TD Ameritrade Holding Corp. * | 47,100 | 901 | ||||||
The Bear Stearns Cos., Inc. | 13,620 | 1,547 | ||||||
The Charles Schwab Corp. (d) | 111,120 | 2,582 | ||||||
The First Marblehead Corp. (a) | 7,500 | 291 | ||||||
The Goldman Sachs Group, Inc. | 38,700 | 9,595 | ||||||
The Student Loan Corp. | 1,700 | 282 | ||||||
W.P. Carey & Co. LLC | 4,100 | 143 | ||||||
Waddell & Reed Financial, Inc., Class A | 7,250 | 241 | ||||||
Westwood Holdings Group, Inc. | 285 | 11 | ||||||
World Acceptance Corp. * | 1,000 | 32 | ||||||
125,136 | ||||||||
Energy 10.3% | ||||||||
Adams Resources & Energy, Inc. | 1,000 | 32 | ||||||
Alliance Resource Partners L.P. | 3,400 | 131 | ||||||
Alon USA Energy, Inc. | 3,700 | 136 | ||||||
Alpha Natural Resources, Inc. * | 5,200 | 143 | ||||||
Anadarko Petroleum Corp. | 39,060 | 2,305 | ||||||
Apache Corp. | 25,772 | 2,675 | ||||||
APCO Argentina, Inc. | 200 | 21 | ||||||
Arch Coal, Inc. | 7,000 | 287 | ||||||
Atlas America, Inc. | 2,670 | 154 | ||||||
ATP Oil & Gas Corp. * | 1,600 | 92 | ||||||
Atwood Oceanics, Inc. * | 2,400 | 202 | ||||||
Baker Hughes, Inc. | 28,300 | 2,454 | ||||||
Basic Energy Services, Inc. * | 3,000 | 59 | ||||||
Berry Petroleum Co., Class A | 4,000 | 195 | ||||||
BJ Services Co. | 28,600 | 720 | ||||||
Boardwalk Pipeline Partners L.P. (a) | 10,500 | 341 | ||||||
BP Prudhoe Bay Royalty Trust (a) | 2,200 | 171 | ||||||
Bristow Group, Inc. * | 1,800 | 90 | ||||||
Buckeye Partners L.P. (a) | 3,400 | 189 | ||||||
Cabot Oil & Gas Corp. | 27,200 | 1,080 | ||||||
Calumet Specialty Products Partners, L.P. | 5,000 | 233 | ||||||
Cameron International Corp. * | 9,100 | 886 | ||||||
CARBO Ceramics, Inc. (a) | 1,900 | 85 | ||||||
Chesapeake Energy Corp. (a) | 19,200 | 758 | ||||||
Chevron Corp. | 178,939 | 16,375 | ||||||
Cimarex Energy Co. | 5,508 | 223 | ||||||
CNX Gas Corp. * | 12,000 | 383 | ||||||
Compagnie Generale de Geophysique-Veritas S.A. * | 6,029 | 396 | ||||||
Comstock Resources, Inc. * | 4,500 | 164 | ||||||
ConocoPhillips | 134,223 | 11,404 | ||||||
CONSOL Energy, Inc. | 14,100 | 797 | ||||||
CREDO Petroleum Corp. * | 2,700 | 26 | ||||||
Cross Timbers Royalty Trust (a) | 1,500 | 60 | ||||||
Crosstex Energy L.P. (a) | 2,000 | 68 | ||||||
Delek US Holdings, Inc. | 5,000 | 120 | ||||||
Denbury Resources, Inc. * | 9,800 | 555 | ||||||
Devon Energy Corp. | 37,360 | 3,489 | ||||||
Diamond Offshore Drilling, Inc. | 12,300 | 1,393 | ||||||
Dresser-Rand Group, Inc. * | 6,000 | 232 | ||||||
Dril-Quip, Inc. * | 3,100 | �� | 165 | |||||
El Paso Corp. | 51,387 | 908 | ||||||
Enbridge Energy Management LLC * | 1,404 | 77 | ||||||
Encore Acquisition Co. * | 2,250 | 83 | ||||||
Energy Partners Ltd. * | 4,001 | 61 | ||||||
Energy Transfer Partners L.P. | 4,000 | 223 | ||||||
ENSCO International, Inc. | 11,200 | 622 | ||||||
Enterprise GP Holdings L.P. (a) | 2,100 | 76 | ||||||
Enterprise Products Partners L.P. (a) | 29,500 | 944 | ||||||
EOG Resources, Inc. | 22,800 | 2,020 | ||||||
Exterran Holdings, Inc. * | 4,720 | 397 | ||||||
Exxon Mobil Corp. | 493,166 | 45,366 | ||||||
FMC Technologies, Inc. * | 9,182 | 557 | ||||||
Forest Oil Corp. * | 4,450 | 216 | ||||||
Foundation Coal Holdings, Inc. | 3,700 | 158 | ||||||
Frontier Oil Corp. | 14,400 | 659 | ||||||
General Maritime Corp. (a) | 3,000 | 85 | ||||||
Global Industries Ltd. * | 14,400 | 355 | ||||||
Grant Prideco, Inc. * | 10,100 | 497 | ||||||
Grey Wolf, Inc. * | 15,000 | 84 | ||||||
Gulf Island Fabrication, Inc. | 2,800 | 98 | ||||||
GulfMark Offshore, Inc. * | 4,100 | 191 | ||||||
Halliburton Co. | 81,200 | 3,201 | ||||||
Harvest Natural Resources, Inc. * | 6,000 | 83 | ||||||
Helix Energy Solutions Group, Inc. * | 8,564 | 396 | ||||||
Helmerich & Payne, Inc. | 9,600 | 304 | ||||||
Hess Corp. | 24,200 | 1,733 | ||||||
Holly Corp. | 8,000 | 502 | ||||||
Hornbeck Offshore Services, Inc. (a)* | 5,000 | 196 | ||||||
Hugoton Royalty Trust | 4,846 | 118 | ||||||
Inergy, L.P. | 2,000 | 70 | ||||||
ION Geophysical Corp. (a)* | 5,200 | 79 | ||||||
Key Energy Services, Inc. * | 10,300 | 141 | ||||||
Kinder Morgan Energy Partners LP (a) | 15,000 | 788 |
See financial notes. 9
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Kinder Morgan Management LLC * | 4,077 | 207 | ||||||
Lufkin Industries, Inc. | 3,500 | 208 | ||||||
Magellan Midstream Partners | 2,400 | 101 | ||||||
Marathon Oil Corp. | 67,308 | 3,980 | ||||||
Mariner Energy, Inc. * | 6,601 | 165 | ||||||
Markwest Energy Partners L.P. | 1,000 | 33 | ||||||
Massey Energy Co. | 6,800 | 215 | ||||||
Matrix Service Co. * | 8,000 | 236 | ||||||
Murphy Oil Corp. | 14,500 | 1,068 | ||||||
Nabors Industries Ltd. * | 23,634 | 664 | ||||||
NATCO Group, Inc., Class A * | 1,200 | 64 | ||||||
National-Oilwell Varco, Inc. * | 28,080 | 2,057 | ||||||
Natural Resource Partners L.P. (a) | 4,000 | 136 | ||||||
Newfield Exploration Co. * | 10,600 | 571 | ||||||
Noble Corp. | 20,200 | 1,070 | ||||||
Noble Energy | 14,218 | 1,088 | ||||||
NuStar L.P. (a) | 1,600 | 99 | ||||||
Occidental Petroleum Corp. | 75,020 | 5,180 | ||||||
Oceaneering International, Inc. * | 2,200 | 170 | ||||||
Oil States International, Inc. * | 3,600 | 156 | ||||||
Overseas Shipholding Group, Inc. | 3,700 | 275 | ||||||
OYO Geospace Corp. * | 300 | 32 | ||||||
Parker Drilling Co. * | 18,300 | 154 | ||||||
Patterson-UTI Energy, Inc. | 13,200 | 263 | ||||||
Peabody Energy Corp. | 18,500 | 1,031 | ||||||
Penn Virginia Corp. | 5,000 | 242 | ||||||
Penn Virginia Resource Partners, L.P. | 5,000 | 144 | ||||||
Pioneer Natural Resources Co. | 10,133 | 517 | ||||||
Plains All American Pipeline, L.P. | 7,295 | 402 | ||||||
Plains Exploration & Production Co. * | 6,579 | 335 | ||||||
Pogo Producing Co. | 4,700 | 280 | ||||||
Pride International, Inc. * | 12,700 | 469 | ||||||
Quicksilver Resources, Inc. * | 4,200 | 239 | ||||||
Range Resources Corp. | 8,100 | 364 | ||||||
Rosetta Resources, Inc. * | 6,600 | 125 | ||||||
Rowan Cos., Inc. | 8,400 | 327 | ||||||
RPC, Inc. (a) | 11,475 | 128 | ||||||
Schlumberger Ltd. | 100,000 | 9,657 | ||||||
SEACOR Holdings, Inc. * | 1,250 | 115 | ||||||
Smith International, Inc. | 17,300 | 1,143 | ||||||
Spectra Energy Corp. | 50,178 | 1,304 | ||||||
St. Mary Land & Exploration Co. | 7,400 | 313 | ||||||
Stone Energy Corp. * | 3,476 | 155 | ||||||
Sunoco Logistics Partners L.P. (a) | 2,000 | 117 | ||||||
Sunoco, Inc. | 11,000 | 810 | ||||||
Superior Energy Services, Inc. * | 9,900 | 367 | ||||||
Swift Energy Co. * | 2,500 | 119 | ||||||
TC Pipelines L.P. | 2,400 | 88 | ||||||
Teekay Shipping Corp. | 6,000 | 336 | ||||||
TEL Offshore Trust | 83 | 2 | ||||||
TEPPCO Partners L.P. (a) | 7,000 | 282 | ||||||
Tesoro Corp. | 12,100 | 732 | ||||||
TETRA Technologies, Inc. * | 5,300 | 104 | ||||||
The Meridian Resource Corp. * | 3,100 | 8 | ||||||
The Williams Cos., Inc. | 44,860 | 1,637 | ||||||
Tidewater, Inc. | 7,700 | 421 | ||||||
Transocean, Inc. * | 27,731 | 3,310 | ||||||
Ultra Petroleum Corp. * | 13,000 | 921 | ||||||
Unit Corp. * | 4,400 | 210 | ||||||
USEC, Inc. (a)* | 14,300 | 126 | ||||||
Valero Energy Corp. | 47,980 | 3,379 | ||||||
Verenium Corp. (a)* | 1,100 | 6 | ||||||
W&T Offshore, Inc. | 5,000 | 134 | ||||||
W-H Energy Services, Inc. * | 3,400 | 196 | ||||||
Weatherford International Ltd. * | 21,200 | 1,376 | ||||||
Western Refining, Inc. | 5,600 | 205 | ||||||
Westmoreland Coal Co. * | 3,500 | 73 | ||||||
Whiting Petroleum Corp. * | 3,400 | 184 | ||||||
World Fuel Services Corp. | 2,100 | 93 | ||||||
XTO Energy, Inc. | 28,942 | 1,921 | ||||||
163,216 | ||||||||
Food & Staples Retailing 2.1% | ||||||||
Arden Group, Inc., Class A | 600 | 85 | ||||||
BJ’s Wholesale Club, Inc. * | 6,100 | 219 | ||||||
Casey’s General Stores, Inc. | 5,100 | 145 | ||||||
Costco Wholesale Corp. | 38,600 | 2,596 | ||||||
CVS Caremark Corp. | 125,640 | 5,248 | ||||||
Ingles Markets, Inc., Class A | 300 | 8 | ||||||
Longs Drug Stores Corp. | 3,300 | 173 | ||||||
Nash Finch Co. | 1,700 | 64 | ||||||
Pathmark Stores, Inc. * | 3,900 | 51 | ||||||
Performance Food Group Co. * | 1,900 | 51 | ||||||
PriceSmart, Inc. | 500 | 14 | ||||||
Rite Aid Corp. (a)* | 40,400 | 158 | ||||||
Ruddick Corp. | 3,100 | 105 | ||||||
Safeway, Inc. | 35,900 | 1,221 | ||||||
Spartan Stores, Inc. | 500 | 11 | ||||||
Supervalu, Inc. | 19,832 | 769 | ||||||
Sysco Corp. | 48,636 | 1,668 | ||||||
The Andersons, Inc. (a) | 1,000 | 50 | ||||||
The Great Atlantic & Pacific Tea Co., Inc. * | 2,200 | 71 | ||||||
The Kroger Co. | 60,800 | 1,787 | ||||||
The Pantry, Inc. * | 1,000 | 28 | ||||||
United Natural Foods, Inc. * | 2,600 | 75 | ||||||
Wal-Mart Stores, Inc. | 334,100 | 15,105 | ||||||
Walgreen Co. | 80,400 | 3,188 | ||||||
Weis Markets, Inc. | 1,700 | 75 | ||||||
Whole Foods Market, Inc. (a) | 10,900 | 540 | ||||||
33,505 | ||||||||
Food, Beverage & Tobacco 4.5% | ||||||||
Alliance One International, Inc. * | 10,800 | 70 | ||||||
Altria Group, Inc. | 168,800 | 12,311 |
10 See financial notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
American Italian Pasta Co., Class A * | 1,000 | 9 | ||||||
Anheuser-Busch Cos., Inc. | 61,500 | 3,154 | ||||||
Archer-Daniels-Midland Co. | 53,958 | 1,931 | ||||||
Bridgford Foods Corp. * | 300 | 2 | ||||||
Brown-Forman Corp., Class B | 9,912 | 733 | ||||||
Bunge Ltd. | 8,000 | 921 | ||||||
Campbell Soup Co. | 35,400 | 1,309 | ||||||
Chiquita Brands International, Inc. * | 3,200 | 60 | ||||||
Coca-Cola Bottling Co. Consolidated | 400 | 24 | ||||||
Coca-Cola Enterprises, Inc. | 30,000 | 774 | ||||||
ConAgra Foods, Inc. | 43,293 | 1,027 | ||||||
Constellation Brands, Inc., Class A * | 17,600 | 442 | ||||||
Corn Products International, Inc. | 5,800 | 247 | ||||||
Dean Foods Co. | 11,113 | 309 | ||||||
Del Monte Foods Co. | 16,031 | 166 | ||||||
Flowers Foods, Inc. | 7,158 | 157 | ||||||
Fresh Del Monte Produce, Inc. | 4,200 | 152 | ||||||
General Mills, Inc. | 31,300 | 1,807 | ||||||
Green Mountain Coffee Roasters, Inc. * | 2,700 | 101 | ||||||
Griffin Land & Nurseries, Inc. * | 300 | 11 | ||||||
H.J. Heinz Co. | 27,900 | 1,305 | ||||||
Hormel Foods Corp. | 11,500 | 419 | ||||||
J & J Snack Foods Corp. | 6,400 | 228 | ||||||
John B. Sanfilippo & Son, Inc. * | 5,000 | 43 | ||||||
Kellogg Co. | 34,400 | 1,816 | ||||||
Kraft Foods, Inc., Class A | 185,513 | 6,198 | ||||||
Lancaster Colony Corp. | 3,400 | 137 | ||||||
Lance, Inc. | 2,900 | 61 | ||||||
Loews Corp. — Carolina Group | 8,600 | 738 | ||||||
Maui Land & Pineapple Co, Inc. * | 800 | 24 | ||||||
McCormick & Co., Inc. | 11,300 | 396 | ||||||
MGP Ingredients, Inc. (a) | 3,400 | 32 | ||||||
Molson Coors Brewing Co., Class B | 17,000 | 973 | ||||||
Monterey Gourmet Foods, Inc. * | 700 | 3 | ||||||
National Beverage Corp. | 4,500 | 37 | ||||||
PepsiAmericas, Inc. | 13,200 | 471 | ||||||
PepsiCo, Inc. | 140,800 | 10,380 | ||||||
Pilgrim’s Pride Corp. | 1,400 | 42 | ||||||
Ralcorp Holdings, Inc. * | 6,700 | 377 | ||||||
Reynolds American, Inc. | 22,664 | 1,460 | ||||||
Rocky Mountain Chocolate Factory, Inc. | 2,427 | 41 | ||||||
Sanderson Farms, Inc. | 1,750 | 61 | ||||||
Sara Lee Corp. | 64,378 | 1,065 | ||||||
Seaboard Corp. | 200 | 326 | ||||||
Smithfield Foods, Inc. * | 6,300 | 181 | ||||||
Tasty Baking Co. | 500 | 5 | ||||||
The Boston Beer Co., Inc., Class A * | 2,500 | 131 | ||||||
The Coca-Cola Co. | 202,200 | 12,488 | ||||||
The Hain Celestial Group, Inc. * | 1,406 | 49 | ||||||
The Hershey Co. | 19,400 | 836 | ||||||
The J. M. Smucker Co. | 5,438 | 291 | ||||||
The Pepsi Bottling Group, Inc. | 23,400 | 1,008 | ||||||
Tootsie Roll Industries, Inc. | 2,462 | 63 | ||||||
TreeHouse Foods, Inc. * | 1,722 | 48 | ||||||
Tyson Foods, Inc., Class A | 30,340 | 479 | ||||||
Universal Corp. | 4,800 | 234 | ||||||
UST, Inc. | 12,700 | 677 | ||||||
Vector Group Ltd. | 3,921 | 86 | ||||||
Wm. Wrigley Jr. Co. | 20,750 | 1,280 | ||||||
Zapata Corp. * | 8,000 | 57 | ||||||
70,263 | ||||||||
Health Care Equipment & Services 4.2% | ||||||||
ABIOMED, Inc. * | 800 | 11 | ||||||
Advanced Medical Optics, Inc. (a)* | 4,111 | 113 | ||||||
Aetna, Inc. | 59,200 | 3,325 | ||||||
Align Technology, Inc. * | 8,700 | 180 | ||||||
Alliance Imaging, Inc. * | 1,800 | 18 | ||||||
Allscripts Healthcare Solutions, Inc. (a)* | 1,900 | 53 | ||||||
Amedisys, Inc. * | 3,334 | 142 | ||||||
America Service Group, Inc. * | 3,550 | 39 | ||||||
American Medical Systems Holdings, Inc. (a)* | 7,800 | 100 | ||||||
AMERIGROUP Corp. * | 4,300 | 150 | ||||||
AmerisourceBergen Corp. | 20,648 | 973 | ||||||
AMN Healthcare Services, Inc. * | 4,110 | 78 | ||||||
AmSurg Corp. * | 2,300 | 61 | ||||||
Analogic Corp. | 1,400 | 80 | ||||||
Apria Healthcare Group, Inc. * | 4,100 | 99 | ||||||
ArthroCare Corp. * | 1,400 | 91 | ||||||
Aspect Medical Systems, Inc. * | 3,700 | 51 | ||||||
Baxter International, Inc. | 53,018 | 3,182 | ||||||
Beckman Coulter, Inc. | 5,100 | 361 | ||||||
Becton, Dickinson & Co. | 21,300 | 1,778 | ||||||
BioScrip, Inc. * | 2,172 | 17 | ||||||
Boston Scientific Corp. * | 109,568 | 1,520 | ||||||
Brookdale Senior Living, Inc. | 300 | 11 | ||||||
C.R. Bard, Inc. | 8,000 | 669 | ||||||
Cantel Medical Corp. * | 3,571 | 64 | ||||||
Cardinal Health, Inc. | 36,160 | 2,460 | ||||||
Centene Corp. * | 1,000 | 23 | ||||||
Cerner Corp. * | 8,400 | 500 | ||||||
Cerus Corp. * | 500 | 4 | ||||||
Chemed Corp. | 3,900 | 224 | ||||||
Chindex International, Inc. * | 2,200 | 75 | ||||||
CIGNA Corp. | 38,400 | 2,016 | ||||||
Clinical Data, Inc. * | 175 | 5 |
See financial notes. 11
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Community Health Systems, Inc. * | 7,100 | 234 | ||||||
CONMED Corp. * | 1,700 | 48 | ||||||
CorVel Corp. * | 2,850 | 76 | ||||||
Coventry Health Care, Inc. * | 23,937 | 1,444 | ||||||
Covidien Ltd. | 38,525 | 1,603 | ||||||
Cross Country Healthcare, Inc. * | 4,600 | 72 | ||||||
CryoLife, Inc. * | 750 | 5 | ||||||
Cyberonics, Inc. * | 1,200 | 17 | ||||||
Dade Behring Holdings, Inc. | 8,200 | 631 | ||||||
Datascope Corp. | 2,500 | 90 | ||||||
DaVita, Inc. * | 8,250 | 538 | ||||||
DENTSPLY International, Inc. | 13,100 | 543 | ||||||
DJO, Inc. * | 3,000 | 150 | ||||||
Eclipsys Corp. * | 6,300 | 142 | ||||||
Edwards Lifesciences Corp. * | 3,900 | 196 | ||||||
Express Scripts, Inc. * | 25,200 | 1,590 | ||||||
Five Star Quality Care, Inc. * | 135 | 1 | ||||||
Gen-Probe, Inc. * | 3,400 | 238 | ||||||
Gentiva Health Services, Inc. * | 3,250 | 62 | ||||||
Greatbatch, Inc. * | 1,100 | 27 | ||||||
Haemonetics Corp. * | 3,700 | 190 | ||||||
Hanger Orthopedic Group, Inc. * | 5,400 | 67 | ||||||
Health Management Associates, Inc., Class A | 15,900 | 105 | ||||||
Health Net, Inc. * | 9,100 | 488 | ||||||
HealthExtras, Inc. * | 1,900 | 55 | ||||||
Healthspring, Inc. * | 4,600 | 97 | ||||||
HealthTronics, Inc. * | 3,500 | 17 | ||||||
Healthways, Inc. (a)* | 3,100 | 188 | ||||||
Henry Schein, Inc. * | 7,600 | 455 | ||||||
Hillenbrand Industries, Inc. | 5,800 | 320 | ||||||
Hlth Corp. * | 21,926 | 309 | ||||||
Hologic, Inc. * | 10,556 | 717 | ||||||
Hooper Holmes, Inc. * | 4,600 | 10 | ||||||
Hospira, Inc. * | 14,070 | 581 | ||||||
Humana, Inc. * | 18,900 | 1,417 | ||||||
ICU Medical, Inc. * | 550 | 22 | ||||||
IDEXX Laboratories, Inc. * | 2,500 | 304 | ||||||
Immucor, Inc. * | 6,795 | 219 | ||||||
IMS Health, Inc. | 19,300 | 487 | ||||||
Integra LifeSciences Holdings (a)* | 1,100 | 53 | ||||||
Intuitive Surgical, Inc. * | 1,050 | 343 | ||||||
Invacare Corp. | 2,000 | 54 | ||||||
InVentiv Health, Inc. * | 4,733 | 200 | ||||||
Inverness Medical Innovations, Inc. * | 741 | 45 | ||||||
Kindred Healthcare, Inc. * | 4,624 | 98 | ||||||
Kinetic Concepts, Inc. * | 5,600 | 337 | ||||||
Kyphon, Inc. * | 3,000 | 213 | ||||||
Laboratory Corp. of America Holdings * | 12,800 | 880 | ||||||
Landauer, Inc. | 1,100 | 54 | ||||||
LCA-Vision, Inc. (a) | 2,500 | 43 | ||||||
LifePoint Hospitals, Inc. * | 3,707 | 113 | ||||||
Lincare Holdings, Inc. * | 7,100 | 247 | ||||||
Magellan Health Services, Inc. * | 3,007 | 127 | ||||||
Manor Care, Inc. | 8,000 | 533 | ||||||
Matria Healthcare, Inc. * | 1,800 | 46 | ||||||
McKesson Corp. | 25,400 | 1,679 | ||||||
MedCath Corp. * | 1,500 | 42 | ||||||
Medco Health Solutions, Inc. * | 25,033 | 2,363 | ||||||
Medical Action Industries, Inc. * | 3,750 | 77 | ||||||
Medical Staffing Network Holdings, Inc. * | 1,800 | 9 | ||||||
Medtronic, Inc. | 95,374 | 4,525 | ||||||
Mentor Corp. | 3,000 | 128 | ||||||
Meridian Bioscience, Inc. | 11,250 | 372 | ||||||
Merit Medical Systems, Inc. * | 2,222 | 29 | ||||||
Molina Healthcare, Inc. * | 2,500 | 95 | ||||||
National Healthcare Corp. | 600 | 30 | ||||||
National Medical Health Card Systems, Inc. * | 800 | 8 | ||||||
Neogen Corp. * | 937 | 25 | ||||||
Novoste Corp. * | 400 | 1 | ||||||
Nutraceutical International Corp. * | 5,000 | 69 | ||||||
Odyssey HealthCare, Inc. * | 2,250 | 23 | ||||||
Omnicare, Inc. | 10,000 | 295 | ||||||
OraSure Technologies, Inc. * | 1,500 | 14 | ||||||
Owens & Minor, Inc. | 2,000 | 81 | ||||||
Patterson Cos., Inc. (a)* | 10,600 | 415 | ||||||
PDI, Inc. * | 2,900 | 29 | ||||||
Pediatrix Medical Group, Inc. * | 6,000 | 393 | ||||||
PharMerica Corp. * | 3,413 | 54 | ||||||
PolyMedica Corp. | 779 | 41 | ||||||
PSS World Medical, Inc. * | 5,800 | 117 | ||||||
Psychiatric Solutions, Inc. * | 4,400 | 174 | ||||||
Q-Med, Inc. * | 500 | 1 | ||||||
Quest Diagnostics, Inc. | 14,820 | 788 | ||||||
Regeneration Technologies, Inc. * | 1,700 | 18 | ||||||
RehabCare Group, Inc. * | 4,000 | 83 | ||||||
Res-Care, Inc. * | 4,500 | 110 | ||||||
ResMed, Inc. * | 4,000 | 166 | ||||||
Respironics, Inc. * | 6,300 | 315 | ||||||
Sierra Health Services, Inc. * | 21,500 | 909 | ||||||
SonoSite, Inc. * | 1,600 | 56 | ||||||
St. Jude Medical, Inc. * | 29,600 | 1,206 | ||||||
STERIS Corp. | 6,100 | 177 | ||||||
Stryker Corp. | 31,100 | 2,208 | ||||||
Sunrise Senior Living, Inc. * | 3,400 | 126 | ||||||
Tenet Healthcare Corp. * | 36,650 | 129 | ||||||
The Cooper Cos., Inc. | 2,781 | 117 | ||||||
The TriZetto Group, Inc. * | 5,900 | 96 | ||||||
Theragenics Corp. * | 2,500 | 12 | ||||||
Thoratec Corp. * | 2,636 | 53 | ||||||
UnitedHealth Group, Inc. | 118,880 | 5,843 | ||||||
Universal American Financial Corp. * | 4,000 | 97 | ||||||
Universal Health Services, Inc., Class B | 4,000 | 195 | ||||||
US Physical Therapy, Inc. * | 3,500 | 51 |
12 See financial notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Utah Medical Products, Inc. | 2,500 | 79 | ||||||
Varian Medical Systems, Inc. * | 11,900 | 580 | ||||||
VCA Antech, Inc. * | 7,900 | 364 | ||||||
VistaCare, Inc., Class A * | 1,000 | 7 | ||||||
Vital Signs, Inc. | 1,900 | 100 | ||||||
WellCare Health Plans, Inc. (a)* | 3,200 | 77 | ||||||
WellPoint, Inc. * | 57,723 | 4,573 | ||||||
West Pharmaceutical Services, Inc. | 4,600 | 190 | ||||||
Wright Medical Group, Inc. * | 4,200 | 111 | ||||||
Young Innovations, Inc. | 2,000 | 50 | ||||||
Zimmer Holdings, Inc. * | 20,300 | 1,411 | ||||||
67,000 | ||||||||
Household & Personal Products 1.9% | ||||||||
Alberto-Culver Co. | 6,950 | 181 | ||||||
Avon Products, Inc. | 39,000 | 1,598 | ||||||
Central Garden & Pet Co. * | 1,600 | 13 | ||||||
Central Garden & Pet Co., Class A * | 3,200 | 27 | ||||||
Chattem, Inc. * | 1,200 | 89 | ||||||
Church & Dwight Co., Inc. | 4,950 | 234 | ||||||
Colgate-Palmolive Co. | 42,500 | 3,241 | ||||||
Energizer Holdings, Inc. * | 6,333 | 661 | ||||||
Herbalife Ltd. | 5,800 | 256 | ||||||
Inter Parfums, Inc. | 675 | 16 | ||||||
Kimberly-Clark Corp. | 40,639 | 2,881 | ||||||
NBTY, Inc. * | 5,400 | 192 | ||||||
Nu Skin Enterprises, Inc., Class A | 6,500 | 112 | ||||||
Oil-Dri Corp. of America | 500 | 10 | ||||||
Spectrum Brands, Inc. * | 2,800 | 12 | ||||||
The Clorox Co. | 12,200 | 763 | ||||||
The Estee Lauder Cos., Inc., Class A | 12,800 | 562 | ||||||
The Procter & Gamble Co. | 269,915 | 18,765 | ||||||
USANA Health Sciences, Inc. (a)* | 1,000 | 41 | ||||||
WD-40 Co. | 1,600 | 63 | ||||||
29,717 | ||||||||
Insurance 5.1% | ||||||||
21st Century Holding Co. | 1,500 | 25 | ||||||
ACE Ltd. | 23,100 | 1,400 | ||||||
AFLAC, Inc. | 42,600 | 2,674 | ||||||
Alfa Corp. | 6,800 | 124 | ||||||
Alleghany Corp. * | 224 | 88 | ||||||
Allied World Assurance Holdings Ltd. | 4,900 | 235 | ||||||
Ambac Financial Group, Inc. (a) | 7,750 | 285 | ||||||
American Financial Group, Inc. | 10,750 | 321 | ||||||
American International Group, Inc. | 211,922 | 13,376 | ||||||
American National Insurance Co. | 1,300 | 168 | ||||||
American Physicians Capital, Inc. | 3,750 | 163 | ||||||
AmTrust Financial Services, Inc. | 7,500 | 105 | ||||||
AON Corp. | 25,500 | 1,156 | ||||||
Arch Capital Group Ltd. * | 3,900 | 292 | ||||||
Argo Group International Holdings Ltd. * | 1,556 | 66 | ||||||
Arthur J. Gallagher & Co. | 6,800 | 181 | ||||||
Assurant, Inc. | 11,500 | 672 | ||||||
Axis Capital Holdings Ltd. | 7,200 | 286 | ||||||
Baldwin & Lyons, Inc., Class B | 750 | 20 | ||||||
Berkshire Hathaway, Inc., Class A * | 128 | 16,960 | ||||||
Brown & Brown, Inc. | 11,000 | 277 | ||||||
Cincinnati Financial Corp. | 13,450 | 535 | ||||||
Citizens, Inc. (a)* | 5,000 | 43 | ||||||
CNA Financial Corp. | 20,900 | 828 | ||||||
CNA Surety Corp. * | 4,700 | 93 | ||||||
Conseco, Inc. * | 11,500 | 182 | ||||||
Crawford & Co., Class B * | 1,600 | 11 | ||||||
Delphi Financial Group, Inc., Class A | 6,772 | 262 | ||||||
EMC Insurance Group, Inc. | 1,200 | 32 | ||||||
Erie Indemnity Co., Class A | 5,500 | 313 | ||||||
Everest Re Group Ltd. | 2,900 | 309 | ||||||
FBL Financial Group, Inc., Class A | 2,090 | 85 | ||||||
Fidelity National Financial, Inc., Class A | 17,327 | 267 | ||||||
First American Corp. | 7,800 | 235 | ||||||
FPIC Insurance Group, Inc. * | 400 | 17 | ||||||
Genworth Financial, Inc., Class A | 37,500 | 1,024 | ||||||
Hanover Insurance Group, Inc. | 4,900 | 226 | ||||||
Harleysville Group, Inc. | 1,800 | 56 | ||||||
HCC Insurance Holdings, Inc. | 7,950 | 238 | ||||||
Hilb Rogal & Hobbs Co. | 3,000 | 132 | ||||||
Hilltop Holdings, Inc. * | 3,726 | 45 | ||||||
Horace Mann Educators Corp. | 4,300 | 89 | ||||||
Independence Holding Co. | 2,700 | 44 | ||||||
Infinity Property & Casualty Corp. | 2,500 | 100 | ||||||
LandAmerica Financial Group, Inc. (a) | 5,300 | 147 | ||||||
Lincoln National Corp. | 21,926 | 1,367 | ||||||
Loews Corp. | 45,000 | 2,209 | ||||||
Markel Corp. * | 300 | 163 | ||||||
Marsh & McLennan Cos., Inc. | 43,000 | 1,113 | ||||||
MBIA, Inc. | 11,250 | 484 | ||||||
Mercury General Corp. | 5,400 | 277 | ||||||
MetLife, Inc. | 62,000 | 4,269 | ||||||
National Financial Partners Corp. | 2,500 | 137 | ||||||
National Western Life Insurance Co., Class A | 300 | 65 | ||||||
Nationwide Financial Services, Inc., Class A | 16,400 | 880 | ||||||
NYMAGIC, Inc. | 2,100 | 60 | ||||||
Odyssey Re Holdings Corp. | 5,400 | 201 | ||||||
Old Republic International Corp. | 20,437 | 313 | ||||||
OneBeacon Insurance Group Ltd. | 8,200 | 176 |
See Financial Notes. 13
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
PartnerRe Ltd. | 1,900 | 158 | ||||||
Penn Treaty American Corp. * | 150 | 1 | ||||||
Philadelphia Consolidated Holding Corp. * | 5,500 | 224 | ||||||
PMA Capital Corp., Class A * | 700 | 7 | ||||||
Presidential Life Corp. | 1,000 | 18 | ||||||
Principal Financial Group, Inc. | 25,400 | 1,719 | ||||||
ProAssurance Corp. * | 1,670 | 92 | ||||||
Protective Life Corp. | 5,500 | 236 | ||||||
Prudential Financial, Inc. | 45,500 | 4,401 | ||||||
Reinsurance Group of America, Inc. | 5,100 | 291 | ||||||
RenaissanceRe Holdings Ltd. | 1,800 | 105 | ||||||
RLI Corp. | 2,800 | 163 | ||||||
SAFECO Corp. | 12,500 | 724 | ||||||
Safety Insurance Group, Inc. | 1,000 | 36 | ||||||
SCPIE Holdings, Inc. * | 700 | 19 | ||||||
Selective Insurance Group, Inc. | 5,400 | 131 | ||||||
StanCorp Financial Group, Inc. | 5,000 | 276 | ||||||
State Auto Financial Corp. | 3,800 | 105 | ||||||
Stewart Information Services Corp. | 1,400 | 41 | ||||||
The Allstate Corp. | 58,874 | 3,085 | ||||||
The Chubb Corp. | 33,094 | 1,765 | ||||||
The Commerce Group, Inc. | 5,700 | 208 | ||||||
The Hartford Financial Services Group, Inc. | 24,400 | 2,367 | ||||||
The Midland Co. | 4,300 | 274 | ||||||
The Navigators Group, Inc. * | 1,500 | 90 | ||||||
The Phoenix Cos., Inc. | 9,500 | 131 | ||||||
The Progressive Corp. | 85,200 | 1,576 | ||||||
The Travelers Cos., Inc. | 54,550 | 2,848 | ||||||
Torchmark Corp. | 10,600 | 691 | ||||||
Transatlantic Holdings, Inc. | 6,437 | 480 | ||||||
United Fire & Casualty Co. | 1,000 | 32 | ||||||
Unitrin, Inc. | 5,600 | 259 | ||||||
Unum Group | 23,914 | 558 | ||||||
Validus Holdings Ltd. * | 6,500 | 168 | ||||||
W. R. Berkley Corp. | 22,950 | 691 | ||||||
Wesco Financial Corp. | 200 | 80 | ||||||
White Mountains Insurance Group Ltd. | 200 | 107 | ||||||
XL Capital Ltd., Class A | 14,700 | 1,058 | ||||||
Zenith National Insurance Corp. | 3,400 | 137 | ||||||
81,253 | ||||||||
Materials 3.9% | ||||||||
A. Schulman, Inc. | 2,300 | 54 | ||||||
A.M. Castle & Co. | 1,500 | 45 | ||||||
AbitibiBowater, Inc. (a) | 1,196 | 41 | ||||||
AEP Industries, Inc. * | 400 | 16 | ||||||
Air Products & Chemicals, Inc. | 17,700 | 1,732 | ||||||
Airgas, Inc. | 7,500 | 379 | ||||||
AK Steel Holding Corp. * | 9,527 | 478 | ||||||
Albemarle Corp. | 9,000 | 430 | ||||||
Alcoa, Inc. | 71,664 | 2,837 | ||||||
Allegheny Technologies, Inc. | 7,700 | 787 | ||||||
AptarGroup, Inc. | 4,400 | 197 | ||||||
Arch Chemicals, Inc. | 2,700 | 123 | ||||||
Ashland, Inc. | 5,500 | 323 | ||||||
Ball Corp. | 8,700 | 431 | ||||||
Bemis Co., Inc. | 8,900 | 251 | ||||||
Buckeye Technologies, Inc. * | 3,700 | 66 | ||||||
Cabot Corp. | 5,200 | 182 | ||||||
Carpenter Technology Corp. | 2,500 | 362 | ||||||
Celanese Corp., Series A | 12,500 | 524 | ||||||
Century Aluminum Co. * | 3,100 | 180 | ||||||
CF Industries Holdings, Inc. | 4,400 | 387 | ||||||
Chemtura Corp. | 19,427 | 181 | ||||||
Chesapeake Corp. | 1,000 | 7 | ||||||
Cleveland-Cliffs, Inc. | 3,000 | 287 | ||||||
Commercial Metals Co. | 9,000 | 282 | ||||||
Compass Minerals International, Inc. | 5,000 | 185 | ||||||
Crown Holdings, Inc. * | 13,400 | 332 | ||||||
Cytec Industries, Inc. | 3,600 | 240 | ||||||
Deltic Timber Corp. | 700 | 39 | ||||||
E.I. du Pont de Nemours & Co. | 78,195 | 3,871 | ||||||
Eagle Materials, Inc. (a) | 4,143 | 164 | ||||||
Eastman Chemical Co. | 8,100 | 539 | ||||||
Ecolab, Inc. | 21,500 | 1,014 | ||||||
Ferro Corp. | 4,200 | 87 | ||||||
Florida Rock Industries, Inc. | 5,987 | 377 | ||||||
FMC Corp. | 6,200 | 356 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 30,122 | 3,545 | ||||||
Georgia Gulf Corp. | 3,300 | 40 | ||||||
Goldcorp, Inc. (a) | 18,759 | 659 | ||||||
Greif, Inc., Class A | 7,400 | 471 | ||||||
H.B. Fuller Co. | 6,500 | 191 | ||||||
Hawkins, Inc. | 1,900 | 30 | ||||||
Headwaters, Inc. * | 7,500 | 108 | ||||||
Hecla Mining Co. * | 12,000 | 115 | ||||||
Hercules, Inc. | 11,000 | 207 | ||||||
Huntsman Corp. | 17,500 | 461 | ||||||
International Flavors & Fragrances, Inc. | 7,400 | 386 | ||||||
International Paper Co. (a) | 39,304 | 1,453 | ||||||
Kronos Worldwide, Inc. | 6,060 | 114 | ||||||
Landec Corp. * | 2,500 | 37 | ||||||
Louisiana-Pacific Corp. | 8,300 | 137 | ||||||
Lyondell Chemical Co. | 19,930 | 946 | ||||||
Martin Marietta Materials, Inc. (a) | 4,200 | 543 | ||||||
Material Sciences Corp. * | 4,000 | 35 | ||||||
MeadWestvaco Corp. | 14,474 | 487 | ||||||
Metal Management, Inc. | 2,500 | 131 | ||||||
Minerals Technologies, Inc. | 3,100 | 218 | ||||||
Mod-Pac Corp. * | 500 | 4 | ||||||
Monsanto Co. | 43,290 | 4,226 | ||||||
Myers Industries, Inc. | 8,080 | 171 |
14 See Financial Notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Nalco Holding Co. | 13,600 | 338 | ||||||
Neenah Paper, Inc. | 1,231 | 42 | ||||||
NewMarket Corp. | 2,000 | 107 | ||||||
Newmont Mining Corp. | 32,251 | 1,640 | ||||||
NL Industries, Inc. | 5,300 | 59 | ||||||
NN, Inc. | 1,800 | 19 | ||||||
Nucor Corp. | 27,000 | 1,675 | ||||||
Olin Corp. | 4,820 | 110 | ||||||
OM Group, Inc. * | 2,400 | 127 | ||||||
Omnova Solutions, Inc. * | 3,400 | 19 | ||||||
Owens-Illinois, Inc. * | 13,700 | 609 | ||||||
Packaging Corp. of America | 8,500 | 271 | ||||||
Pactiv Corp. * | 12,400 | 341 | ||||||
Penford Corp. | 5,200 | 183 | ||||||
PolyOne Corp. * | 3,200 | 26 | ||||||
PPG Industries, Inc. | 13,900 | 1,039 | ||||||
Praxair, Inc. | 25,700 | 2,197 | ||||||
Quanex Corp. | 5,625 | 232 | ||||||
Reliance Steel & Aluminum Co. | 8,500 | 496 | ||||||
Rock-Tenn Co., Class A | 1,500 | 44 | ||||||
Rockwood Holdings, Inc. * | 5,900 | 231 | ||||||
Rohm & Haas Co. | 26,753 | 1,388 | ||||||
Royal Gold, Inc. | 2,200 | 78 | ||||||
RPM International, Inc. | 9,600 | 206 | ||||||
RTI International Metals, Inc. * | 1,500 | 117 | ||||||
Schnitzer Steel Industries, Inc., Class A | 1,650 | 109 | ||||||
Schweitzer-Mauduit International, Inc. | 3,300 | 92 | ||||||
Sealed Air Corp. | 12,000 | 299 | ||||||
Sensient Technologies Corp. | 4,800 | 143 | ||||||
Sigma-Aldrich Corp. | 12,600 | 651 | ||||||
Silgan Holdings, Inc. | 5,800 | 316 | ||||||
Smurfit-Stone Container Corp. * | 20,000 | 242 | ||||||
Sonoco Products Co. | 8,000 | 247 | ||||||
Southern Copper Corp. (a) | 22,800 | 3,185 | ||||||
Spartech Corp. | 4,200 | 65 | ||||||
Steel Dynamics, Inc. | 7,000 | 373 | ||||||
Stepan Co. | 1,200 | 42 | ||||||
Stillwater Mining Co. * | 11,233 | 125 | ||||||
Symyx Technologies, Inc. * | 3,800 | 35 | ||||||
Temple-Inland, Inc. | 8,800 | 472 | ||||||
Terra Industries, Inc. * | 7,500 | 277 | ||||||
Texas Industries, Inc. | 1,000 | 73 | ||||||
The Dow Chemical Co. | 78,766 | 3,548 | ||||||
The Lubrizol Corp. | 5,400 | 367 | ||||||
The Mosaic Co. * | 36,000 | 2,513 | ||||||
The Scotts Miracle-Gro Co., Class A | 5,600 | 257 | ||||||
The Valspar Corp. | 8,400 | 210 | ||||||
Titanium Metals Corp. * | 11,307 | 398 | ||||||
United States Steel Corp. | 9,900 | 1,068 | ||||||
Valhi, Inc. | 8,600 | 230 | ||||||
Vulcan Materials Co. (a) | 6,900 | 590 | ||||||
Wausau Paper Corp. | 4,700 | 47 | ||||||
Westlake Chemical Corp. (a) | 5,100 | 125 | ||||||
Weyerhaeuser Co. | 18,250 | 1,385 | ||||||
Worthington Industries, Inc. (a) | 7,200 | 180 | ||||||
Yamana Gold, Inc. | 14,751 | 222 | ||||||
61,981 | ||||||||
Media 3.6% | ||||||||
4Kids Entertainment, Inc. * | 4,000 | 68 | ||||||
Acme Communications, Inc. | 1,900 | 7 | ||||||
Alloy, Inc. * | 3,500 | 29 | ||||||
Arbitron, Inc. | 2,120 | 107 | ||||||
Belo Corp., Class A | 9,400 | 174 | ||||||
Cablevision Systems Corp., Class A * | 21,100 | 619 | ||||||
Carmike Cinemas, Inc. | 2,500 | 40 | ||||||
CBS Corp., Class B | 72,006 | 2,067 | ||||||
Citadel Broadcasting Corp. | 17,506 | 77 | ||||||
CKX, Inc. * | 7,300 | 89 | ||||||
Clear Channel Communications, Inc. | 49,721 | 1,878 | ||||||
Clear Channel Outdoor Holdings, Inc., Class A * | 28,700 | 730 | ||||||
Comcast Corp., Class A * | 227,004 | 4,778 | ||||||
Comcast Corp., Special Class A * | 64,200 | 1,340 | ||||||
Cox Radio, Inc., Class A * | 4,600 | 56 | ||||||
Crown Media Holdings, Inc., Class A (a)* | 6,000 | 47 | ||||||
Cumulus Media Inc., Class A * | 4,351 | 45 | ||||||
Daily Journal Corp. * | 500 | 23 | ||||||
Discovery Holding Co., Class A * | 22,323 | 636 | ||||||
Dow Jones & Co., Inc. (a) | 6,500 | 389 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 8,200 | 267 | ||||||
EchoStar Communications Corp., Class A * | 37,700 | 1,846 | ||||||
Emak Worldwide, Inc. * | 500 | 1 | ||||||
Emmis Communications Corp., Class A | 713 | 4 | ||||||
Entercom Communications Corp., Class A | 3,000 | 56 | ||||||
Entravision Communications Corp., Class A * | 5,000 | 46 | ||||||
Gannett Co., Inc. | 19,500 | 827 | ||||||
Gemstar-TV Guide International, Inc. * | 38,120 | 263 | ||||||
Getty Images, Inc. * | 4,600 | 130 | ||||||
Gray Television, Inc. | 5,600 | 53 | ||||||
Harte-Hanks, Inc. | 8,100 | 143 | ||||||
Hearst-Argyle Television, Inc. | 7,500 | 167 | ||||||
Idearc, Inc. | 12,378 | 334 | ||||||
Interactive Data Corp. | 20,700 | 665 | ||||||
John Wiley & Sons, Inc., Class A | 6,300 | 277 |
See Financial Notes. 15
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Journal Communications, Inc., Class A | 7,500 | 67 | ||||||
Journal Register Co. | 3,200 | 7 | ||||||
Lakes Entertainment, Inc. * | 1,800 | 15 | ||||||
Lamar Advertising Co., Class A | 9,200 | 492 | ||||||
Lee Enterprises, Inc. | 2,500 | 40 | ||||||
Liberty Global, Inc., Series A * | 37,575 | 1,475 | ||||||
Liberty Global, Inc., Series C * | 12,601 | 462 | ||||||
Liberty Media Corp. — Capital, Series A * | 11,161 | 1,395 | ||||||
Lin TV Corp., Class A * | 3,300 | 48 | ||||||
Live Nation, Inc. * | 6,215 | 127 | ||||||
Martha Stewart Living Omnimedia, Inc., Class A * | 3,900 | 54 | ||||||
Marvel Entertainment, Inc. * | 11,700 | 290 | ||||||
Media General, Inc., Class A | 2,000 | 56 | ||||||
Mediacom Communications Corp., Class A * | 7,600 | 44 | ||||||
Meredith Corp. | 3,800 | 237 | ||||||
Morningstar, Inc. * | 3,200 | 238 | ||||||
News Corp., Class A | 253,950 | 5,503 | ||||||
Nexstar Broadcasting Group, Inc., Class A * | 4,500 | 42 | ||||||
Omnicom Group, Inc. | 33,600 | 1,713 | ||||||
Playboy Enterprises, Inc., Class B * | 4,500 | 50 | ||||||
R.H. Donnelley Corp. * | 5,466 | 300 | ||||||
Radio One, Inc., Class A * | 9,500 | 33 | ||||||
Regal Entertainment Group, Class A (a) | 12,100 | 273 | ||||||
Salem Communications Corp., Class A | 900 | 7 | ||||||
Scholastic Corp. * | 2,200 | 87 | ||||||
Sinclair Broadcast Group, Inc., Class A | 7,300 | 88 | ||||||
Sun-Times Media Group, Inc., Class A * | 7,300 | 16 | ||||||
The DIRECTV Group, Inc. * | 101,476 | 2,687 | ||||||
The E.W. Scripps Co., Class A | 12,000 | 540 | ||||||
The Interpublic Group of Cos., Inc. (a)* | 34,537 | 358 | ||||||
The McClatchy Co., Class A (a) | 8,416 | 140 | ||||||
The McGraw-Hill Cos., Inc. | 34,600 | 1,731 | ||||||
The New York Times Co., Class A (a) | 13,200 | 258 | ||||||
The Walt Disney Co. | 195,410 | 6,767 | ||||||
The Washington Post Co., Class B | 600 | 509 | ||||||
Time Warner Cable, Inc., Class A * | 75,000 | 2,144 | ||||||
Time Warner, Inc. | 367,052 | 6,702 | ||||||
TiVo, Inc. * | 4,500 | 32 | ||||||
Tribune Co. | 11,376 | 344 | ||||||
Triple Crown Media, Inc. * | 560 | 3 | ||||||
Valassis Communications, Inc. * | 3,700 | 36 | ||||||
Value Line, Inc. | 300 | 13 | ||||||
Viacom, Inc., Class B * | 56,606 | 2,337 | ||||||
Virgin Media, Inc. | 15,000 | 332 | ||||||
Voyager Learning Co. * | 1,700 | 13 | ||||||
Warner Music Group Corp. | 11,700 | 119 | ||||||
Westwood One, Inc. | 7,200 | 15 | ||||||
World Wrestling Entertainment, Inc., Class A | 4,900 | 75 | ||||||
Xanadoo Co., Class A * | 63 | 25 | ||||||
XM Satellite Radio Holdings, Inc., Class A * | 15,300 | 203 | ||||||
56,820 | ||||||||
Pharmaceuticals & Biotechnology 6.7% | ||||||||
Abbott Laboratories | 125,705 | 6,866 | ||||||
Accelrys, Inc. * | 1,300 | 10 | ||||||
Adolor Corp. (a)* | 1,700 | 6 | ||||||
Affymetrix, Inc. * | 4,900 | 125 | ||||||
Albany Molecular Research, Inc. * | 1,600 | 29 | ||||||
Alkermes, Inc. * | 3,100 | 50 | ||||||
Allergan, Inc. | 26,468 | 1,789 | ||||||
Alpharma, Inc., Class A * | 3,700 | 76 | ||||||
Amgen, Inc. * | 103,268 | 6,001 | ||||||
Amylin Pharmaceuticals, Inc. * | 2,300 | 103 | ||||||
Aphton Corp. * | 800 | — | ||||||
Applera Corp.-Celera Group * | 5,600 | 91 | ||||||
Applied Biosystems Group-Applera Corp. | 16,500 | 613 | ||||||
Arena Pharmaceuticals, Inc. * | 800 | 8 | ||||||
ArQule, Inc. * | 8,800 | 69 | ||||||
Avigen, Inc. * | 900 | 4 | ||||||
Barr Pharmaceuticals, Inc. * | 8,781 | 503 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 3,000 | 290 | ||||||
BioCryst Pharmaceuticals, Inc. (a)* | 1,400 | 11 | ||||||
Biogen Idec, Inc. * | 28,125 | 2,094 | ||||||
BioMarin Pharmaceuticals, Inc. * | 1,800 | 50 | ||||||
Bradley Pharmaceuticals, Inc. * | 1,700 | 33 | ||||||
Bristol-Myers Squibb Co. | 162,750 | 4,881 | ||||||
Bruker BioSciences Corp. * | 2,100 | 22 | ||||||
Caliper Life Sciences, Inc. * | 700 | 4 | ||||||
Cambrex Corp. | 3,400 | 39 | ||||||
Celgene Corp. * | 27,000 | 1,782 | ||||||
Cell Genesys, Inc. * | 1,500 | 5 | ||||||
Cephalon, Inc. (a)* | 6,000 | 442 | ||||||
Charles River Laboratories International, Inc. * | 6,416 | 372 | ||||||
CollaGenex Pharmaceuticals, Inc. * | 3,000 | 31 | ||||||
Covance, Inc. * | 5,800 | 478 | ||||||
Cubist Pharmaceuticals, Inc. * | 1,900 | 44 | ||||||
CV Therapeutics, Inc. * | 1,100 | 11 | ||||||
Dendreon Corp. * | 1,400 | 10 | ||||||
Dionex Corp. * | 1,200 | 106 |
16 See Financial Notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Durect Corp. * | 2,000 | 12 | ||||||
Dyax Corp. * | 2,000 | 9 | ||||||
Eli Lilly & Co. | 92,400 | 5,003 | ||||||
Encysive Pharmaceuticals, Inc. * | 2,600 | 3 | ||||||
Endo Pharmaceuticals Holdings, Inc. * | 10,500 | 308 | ||||||
Enzo Biochem, Inc. * | 1,781 | 22 | ||||||
Enzon Pharmaceuticals, Inc. * | 4,400 | 42 | ||||||
eResearch Technology, Inc. * | 5,625 | 62 | ||||||
Exelixis, Inc. * | 7,300 | 80 | ||||||
Forest Laboratories, Inc. * | 27,500 | 1,074 | ||||||
Genentech, Inc. * | 83,300 | 6,175 | ||||||
Genzyme Corp. * | 20,732 | 1,575 | ||||||
Geron Corp. * | 1,000 | 8 | ||||||
Gilead Sciences, Inc. * | 75,840 | 3,503 | ||||||
Harvard Bioscience, Inc. * | 500 | 2 | ||||||
Human Genome Sciences, Inc. (a)* | 5,100 | 48 | ||||||
Illumina, Inc. * | 1,500 | 84 | ||||||
ImClone Systems, Inc. * | 6,935 | 299 | ||||||
ImmunoGen, Inc. * | 1,500 | 7 | ||||||
Impax Laboratories, Inc. * | 1,600 | 17 | ||||||
Incyte Corp. * | 2,600 | 22 | ||||||
Indevus Pharmaceuticals, Inc. * | 1,800 | 14 | ||||||
Inspire Pharmaceuticals, Inc. * | 1,300 | 8 | ||||||
InterMune, Inc. (a)* | 1,100 | 22 | ||||||
Invitrogen Corp. * | 3,629 | 330 | ||||||
Isis Pharmaceuticals, Inc. * | 1,900 | 33 | ||||||
Johnson & Johnson | 246,370 | 16,056 | ||||||
K-V Pharmaceutical Co., Class A * | 2,700 | 85 | ||||||
Kendle International, Inc. * | 2,700 | 109 | ||||||
King Pharmaceuticals, Inc. * | 18,516 | 196 | ||||||
Kosan Biosciences, Inc. * | 2,500 | 13 | ||||||
Lexicon Pharmaceuticals, Inc. * | 6,900 | 25 | ||||||
Ligand Pharmaceuticals, Inc., Class B | 2,300 | 12 | ||||||
Luminex Corp. (a)* | 800 | 13 | ||||||
Matrixx Initiatives, Inc. * | 1,700 | 29 | ||||||
Maxygen, Inc. * | 6,500 | 49 | ||||||
Medarex, Inc. * | 3,000 | 36 | ||||||
Medicis Pharmaceutical Corp., Class A (a) | 3,400 | 101 | ||||||
Merck & Co., Inc. | 183,552 | 10,694 | ||||||
MGI Pharma, Inc. * | 6,932 | 226 | ||||||
Millennium Pharmaceuticals, Inc. * | 25,856 | 306 | ||||||
Millipore Corp. * | 5,100 | 396 | ||||||
Mylan Laboratories, Inc. | 16,600 | 250 | ||||||
Myriad Genetics, Inc. * | 1,400 | 77 | ||||||
Nabi Biopharmaceuticals * | 2,800 | 11 | ||||||
Nektar Therapeutics * | 2,200 | 13 | ||||||
Neurocrine Biosciences, Inc. * | 1,400 | 13 | ||||||
Neurogen Corp. * | 800 | 3 | ||||||
Northfield Laboratories, Inc. * | 1,100 | 2 | ||||||
Noven Pharmaceuticals, Inc. * | 1,800 | 28 | ||||||
NPS Pharmacuticals, Inc. * | 1,000 | 5 | ||||||
Nuvelo, Inc. * | 300 | 1 | ||||||
Omrix Biopharmaceuticals, Inc. * | 5,500 | 192 | ||||||
Onyx Pharmaceuticals, Inc. * | 4,500 | 210 | ||||||
Orchid Cellmark, Inc. * | 280 | 2 | ||||||
OSI Pharmaceuticals, Inc. * | 4,998 | 208 | ||||||
OXiGENE, Inc. * | 900 | 3 | ||||||
Pain Therapeutics, Inc. * | 2,600 | 27 | ||||||
Par Pharmaceutical Cos., Inc. * | 1,900 | 35 | ||||||
PAREXEL International Corp. * | 2,400 | 110 | ||||||
PDL BioPharma, Inc. * | 9,500 | 201 | ||||||
PerkinElmer, Inc. | 11,477 | 316 | ||||||
Perrigo Co. | 7,300 | 173 | ||||||
Pfizer, Inc. | 610,192 | 15,017 | ||||||
Pharmaceutical Product Development, Inc. | 10,000 | 422 | ||||||
Pharmacopeia, Inc. * | 650 | 4 | ||||||
Pharmanet Development Group, Inc. * | 4,500 | 146 | ||||||
Pharmion Corp. * | 2,500 | 120 | ||||||
POZEN, Inc. (a)* | 1,300 | 12 | ||||||
Regeneron Pharmaceuticals, Inc. * | 5,200 | 114 | ||||||
Sangamo BioSciences, Inc. (a)* | 1,200 | 23 | ||||||
Savient Pharmaceuticals, Inc. * | 2,300 | 32 | ||||||
Schering-Plough Corp. | 121,750 | 3,716 | ||||||
Sciele Pharma, Inc. (a)* | 3,400 | 86 | ||||||
Sepracor, Inc. * | 9,100 | 251 | ||||||
SuperGen, Inc. * | 900 | 4 | ||||||
Techne Corp. * | 3,800 | 248 | ||||||
The Medicines Co. * | 1,700 | 33 | ||||||
Thermo Fisher Scientific, Inc. * | 37,302 | 2,194 | ||||||
Third Wave Technologies, Inc. * | 1,800 | 16 | ||||||
Trimeris, Inc. * | 500 | 4 | ||||||
Valeant Pharmaceuticals International * | 7,900 | 115 | ||||||
Varian, Inc. * | 5,800 | 429 | ||||||
Ventana Medical Systems, Inc. * | 2,400 | 211 | ||||||
Vertex Pharmaceuticals, Inc. * | 3,144 | 102 | ||||||
Vical, Inc. * | 1,600 | 8 | ||||||
ViroPharma, Inc. * | 6,000 | 52 | ||||||
Warner Chilcott Ltd., Class A * | 20,500 | 380 | ||||||
Waters Corp. * | 8,700 | 670 | ||||||
Watson Pharmaceuticals, Inc. * | 7,732 | 236 | ||||||
Wyeth | 109,400 | 5,320 | ||||||
XenoPort, Inc. * | 2,500 | 123 | ||||||
ZymoGenetics, Inc. * | 2,000 | 27 | ||||||
106,151 | ||||||||
Real Estate 1.6% | ||||||||
Alexander’s, Inc. * | 700 | 281 | ||||||
Alexandria Real Estate Equities, Inc. | 2,500 | 258 |
See Financial Notes. 17
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
AMB Property Corp. | 7,300 | 477 | ||||||
American Financial Realty Trust | 8,500 | 57 | ||||||
American Home Mortgage Investment Corp. | 4,500 | — | ||||||
American Land Lease, Inc. | 1,700 | 37 | ||||||
American Mortgage Acceptance Co. | 1,500 | 12 | ||||||
American Realty Investors, Inc. * | 1,037 | 8 | ||||||
Annaly Capital Management, Inc. | 9,400 | 161 | ||||||
Anthracite Capital, Inc. | 4,900 | 41 | ||||||
Anworth Mortgage Asset Corp. | 1,000 | 7 | ||||||
Apartment Investment & Management Co., Class A (a) | 7,400 | 346 | ||||||
AvalonBay Communities, Inc. | 6,100 | 748 | ||||||
Boston Properties, Inc. | 9,900 | 1,073 | ||||||
Brandywine Realty Trust | 7,363 | 190 | ||||||
BRE Properties, Inc., Class A | 5,000 | 274 | ||||||
Brookfield Properties Corp. | 26,700 | 667 | ||||||
Camden Property Trust | 2,300 | 143 | ||||||
CapitalSource, Inc. | 6,900 | 126 | ||||||
Capstead Mortgage Corp. | 2,240 | 26 | ||||||
CB Richard Ellis Group, Inc., Class A * | 17,500 | 427 | ||||||
CBL & Associates Properties, Inc. | 4,400 | 146 | ||||||
Colonial Properties Trust | 2,567 | 80 | ||||||
Consolidated-Tomoka Land Co. | 900 | 62 | ||||||
Corporate Office Properties Trust | 3,500 | 145 | ||||||
Cousins Properties, Inc. | 5,200 | 150 | ||||||
Developers Diversified Realty Corp. | 7,612 | 384 | ||||||
Douglas Emmett, Inc. | 9,000 | 237 | ||||||
Duke Realty Corp. | 12,990 | 418 | ||||||
EastGroup Properties, Inc. | 900 | 43 | ||||||
Entertainment Properties Trust | 2,200 | 121 | ||||||
Equity Lifestyle Properties, Inc. | 3,000 | 151 | ||||||
Equity One, Inc. | 6,600 | 173 | ||||||
Equity Residential | 24,700 | 1,032 | ||||||
Essex Property Trust, Inc. | 2,600 | 321 | ||||||
Federal Realty Investment Trust (a) | 5,200 | 459 | ||||||
FelCor Lodging Trust, Inc. | 5,700 | 119 | ||||||
First Industrial Realty Trust, Inc. (a) | 2,600 | 106 | ||||||
Forest City Enterprises, Inc., Class A | 10,400 | 592 | ||||||
Friedman, Billings, Ramsey Group, Inc., Class A | 12,080 | 52 | ||||||
General Growth Properties, Inc. | 20,460 | 1,112 | ||||||
Getty Realty Corp. | 2,000 | 57 | ||||||
Glimcher Realty Trust | 3,800 | 84 | ||||||
HCP, Inc. | 10,648 | 362 | ||||||
Health Care REIT, Inc. (a) | 5,200 | 230 | ||||||
Healthcare Realty Trust, Inc. | 4,900 | 130 | ||||||
Highwoods Properties, Inc. | 5,600 | 201 | ||||||
Home Properties, Inc. | 2,500 | 129 | ||||||
Hospitality Properties Trust | 6,000 | 238 | ||||||
Host Hotels & Resorts, Inc. | 39,254 | 870 | ||||||
HRPT Properties Trust | 13,500 | 127 | ||||||
Impac Mortgage Holdings, Inc. (a) | 4,800 | 5 | ||||||
Inland Real Estate Corp. | 5,500 | 82 | ||||||
iStar Financial, Inc. | 9,390 | 286 | ||||||
Jones Lang LaSalle, Inc. | 2,300 | 219 | ||||||
Kilroy Realty Corp. (a) | 1,800 | 117 | ||||||
Kimco Realty Corp. | 19,195 | 797 | ||||||
LaSalle Hotel Properties | 3,500 | 145 | ||||||
Lexington Realty Trust (a) | 3,000 | 59 | ||||||
Liberty Property Trust | 8,300 | 312 | ||||||
LTC Properties, Inc. | 2,800 | 71 | ||||||
Mack-Cali Realty Corp. | 5,900 | 234 | ||||||
Maguire Properties, Inc. | 3,000 | 82 | ||||||
MFA Mortgage Investments, Inc. | 5,500 | 47 | ||||||
Mid-America Apartment Communities, Inc. | 2,500 | 130 | ||||||
National Health Investors, Inc. | 3,100 | 91 | ||||||
National Health Realty, Inc. | 2,300 | 49 | ||||||
National Retail Properties, Inc. | 3,320 | 84 | ||||||
Nationwide Health Properties, Inc. (a) | 5,100 | 159 | ||||||
New Century Financial Corp. | 3,600 | — | ||||||
Newcastle Investment Corp. | 2,200 | 33 | ||||||
NovaStar Financial, Inc. (a) | 500 | 3 | ||||||
OMEGA Healthcare Investors, Inc. | 2,784 | 47 | ||||||
Parkway Properties, Inc. | 500 | 21 | ||||||
Pennsylvania Real Estate Investment Trust | 2,500 | 95 | ||||||
Plum Creek Timber Co., Inc. | 15,047 | 672 | ||||||
PMC Commercial Trust | 1,500 | 20 | ||||||
Post Properties, Inc. | 2,200 | 90 | ||||||
Potlatch Corp. | 2,753 | 131 | ||||||
ProLogis | 20,854 | 1,496 | ||||||
PS Business Parks, Inc. | 3,000 | 175 | ||||||
Public Storage | 14,590 | 1,181 | ||||||
RAIT Financial Trust (a) | 3,300 | 30 | ||||||
Ramco-Gershenson Properties Trust | 1,400 | 40 | ||||||
Rayonier, Inc. | 2,388 | 115 | ||||||
Realty Income Corp. (a) | 4,600 | 136 | ||||||
Redwood Trust, Inc. (a) | 2,500 | 66 | ||||||
Regency Centers Corp. | 5,700 | 407 | ||||||
Reis, Inc. * | 1,400 | 10 | ||||||
Saul Centers, Inc. | 2,100 | 115 | ||||||
Senior Housing Properties Trust | 4,950 | 111 | ||||||
SL Green Realty Corp. (a) | 4,750 | 573 | ||||||
Sovran Self Storage, Inc. | 800 | 38 | ||||||
Sun Communities, Inc. | 3,000 | 91 | ||||||
Tanger Factory Outlet Centers, Inc. | 1,600 | 67 | ||||||
Taubman Centers, Inc. | 4,100 | 241 | ||||||
Tejon Ranch Co. (a)* | 674 | 27 |
18 See Financial Notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
The Macerich Co. | 5,200 | 446 | ||||||
The St. Joe Co. (a) | 5,300 | 179 | ||||||
Thornburg Mortgage, Inc. (a) | 7,800 | 82 | ||||||
UDR, Inc. | 9,400 | 223 | ||||||
UMH Properties, Inc. | 1,600 | 21 | ||||||
Universal Health Realty Income Trust | 900 | 33 | ||||||
Urstadt Biddle Properties | 500 | 9 | ||||||
Urstadt Biddle Properties, Class A | 1,000 | 17 | ||||||
Ventas, Inc. | 5,800 | 249 | ||||||
Vornado Realty Trust | 10,500 | 1,173 | ||||||
Washington Real Estate Investment Trust | 3,100 | 109 | ||||||
Weingarten Realty Investors | 7,975 | 305 | ||||||
25,536 | ||||||||
Retailing 3.3% | ||||||||
99 Cents Only Stores * | 3,066 | 33 | ||||||
Aaron Rents, Inc., Class A | 2,175 | 43 | ||||||
Aaron Rents, Inc., Class B | 6,250 | 132 | ||||||
Abercrombie & Fitch Co., Class A | 5,800 | 459 | ||||||
Advance Auto Parts, Inc. | 9,540 | 326 | ||||||
Aeropostale, Inc. * | 6,600 | 151 | ||||||
Amazon.com, Inc. * | 33,700 | 3,004 | ||||||
America’s Car-Mart, Inc. * | 3,750 | 45 | ||||||
American Eagle Outfitters, Inc. | 18,150 | 432 | ||||||
AnnTaylor Stores Corp. * | 9,825 | 304 | ||||||
Asbury Automotive Group, Inc. | 4,100 | 75 | ||||||
Audiovox Corp., Class A * | 1,600 | 19 | ||||||
AutoNation, Inc. (a)* | 21,600 | 382 | ||||||
AutoZone, Inc. * | 6,100 | 759 | ||||||
Barnes & Noble, Inc. | 7,400 | 286 | ||||||
Bed Bath & Beyond, Inc. * | 23,700 | 804 | ||||||
Best Buy Co., Inc. | 39,225 | 1,903 | ||||||
Big Lots, Inc. (a)* | 11,100 | 266 | ||||||
Blockbuster, Inc., Class A (a)* | 15,300 | 80 | ||||||
Borders Group, Inc. | 5,700 | 88 | ||||||
Brown Shoe Co., Inc. | 6,675 | 136 | ||||||
Building Materials Holding Corp. (a) | 3,000 | 24 | ||||||
Cabela’s, Inc., Class A (a)* | 3,500 | 68 | ||||||
CarMax, Inc. (a)* | 17,046 | 356 | ||||||
Charlotte Russe Holding, Inc. * | 2,500 | 36 | ||||||
Charming Shoppes, Inc. * | 10,200 | 76 | ||||||
Chico’s FAS, Inc. * | 13,300 | 175 | ||||||
Christopher & Banks Corp. | 2,900 | 40 | ||||||
Circuit City Stores, Inc. | 16,500 | 131 | ||||||
Coldwater Creek, Inc. (a)* | 8,502 | 76 | ||||||
Collective Brands, Inc. * | 5,906 | 109 | ||||||
CSK Auto Corp. * | 3,500 | 40 | ||||||
Dick’s Sporting Goods, Inc. * | 11,000 | 367 | ||||||
Dillard’s, Inc., Class A (a) | 5,500 | 127 | ||||||
Dollar Tree Stores, Inc. * | 8,650 | 331 | ||||||
DSW, Inc., Class A (a)* | 3,500 | 79 | ||||||
Duckwall-ALCO Stores, Inc. * | 1,800 | 66 | ||||||
eBay, Inc. * | 110,848 | 4,002 | ||||||
Expedia, Inc. * | 31,345 | 1,024 | ||||||
Family Dollar Stores, Inc. | 12,700 | 322 | ||||||
Finlay Enterprises, Inc. * | 1,000 | 6 | ||||||
Foot Locker, Inc. | 14,100 | 210 | ||||||
GameStop Corp., Class A * | 12,048 | 713 | ||||||
Genesco, Inc. * | 4,300 | 199 | ||||||
Genuine Parts Co. | 13,500 | 662 | ||||||
Group 1 Automotive, Inc. | 1,400 | 43 | ||||||
Guess?, Inc. | 7,900 | 406 | ||||||
Handleman Co. (a) | 6,600 | 16 | ||||||
Hibbett Sports, Inc. * | 3,543 | 84 | ||||||
Hollywood Media Corp. * | 1,100 | 4 | ||||||
IAC/InterActiveCorp * | 31,345 | 923 | ||||||
J. Crew Group, Inc. * | 5,500 | 206 | ||||||
J.C. Penney Co., Inc. | 27,400 | 1,541 | ||||||
Kohl’s Corp. * | 28,300 | 1,556 | ||||||
Liberty Media Corp. — Interactive Class A * | 55,809 | 1,185 | ||||||
Limited Brands, Inc. | 31,520 | 694 | ||||||
Lithia Motors, Inc., Class A | 700 | 12 | ||||||
Lowe’s Cos., Inc. | 122,500 | 3,294 | ||||||
Macy’s, Inc. | 42,952 | 1,376 | ||||||
Midas, Inc. * | 6,800 | 109 | ||||||
Monro Muffler Brake, Inc. | 1,575 | 36 | ||||||
Mothers Work, Inc. * | 2,500 | 40 | ||||||
Netflix, Inc. (a)* | 6,000 | 159 | ||||||
Nordstrom, Inc. | 20,600 | 812 | ||||||
O’Reilly Automotive, Inc. * | 4,400 | 145 | ||||||
Office Depot, Inc. * | 26,000 | 488 | ||||||
OfficeMax, Inc. | 6,400 | 203 | ||||||
Pacific Sunwear of California, Inc. * | 7,475 | 125 | ||||||
Penske Automotive Group, Inc. | 2,000 | 45 | ||||||
PetSmart, Inc. | 11,100 | 332 | ||||||
Pomeroy IT Solutions, Inc. * | 2,100 | 17 | ||||||
Priceline.com, Inc. (a)* | 3,983 | 371 | ||||||
RadioShack Corp. | 10,700 | 221 | ||||||
Rent-A-Center, Inc. * | 7,750 | 124 | ||||||
Retail Ventures, Inc. * | 5,000 | 43 | ||||||
REX Stores Corp. * | 1,875 | 33 | ||||||
Ross Stores, Inc. | 13,400 | 362 | ||||||
Saks, Inc. | 10,800 | 229 | ||||||
Sally Beauty Holdings, Inc. * | 6,950 | 64 | ||||||
Sears Holdings Corp. (a)* | 12,885 | 1,737 | ||||||
Select Comfort Corp. (a)* | 4,500 | 51 | ||||||
Shoe Carnival, Inc. * | 1,200 | 19 | ||||||
Sonic Automotive, Inc., Class A | 1,400 | 35 | ||||||
Source Interlink Cos., Inc. * | 5,000 | 16 | ||||||
Stage Stores, Inc. | 2,700 | 51 | ||||||
Staples, Inc. | 61,800 | 1,442 | ||||||
Stein Mart, Inc. | 3,800 | 25 | ||||||
Systemax, Inc. (a) | 2,500 | 58 |
See Financial Notes. 19
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Target Corp. | 69,800 | 4,283 | ||||||
The Buckle, Inc. | 5,250 | 226 | ||||||
The Cato Corp., Class A | 4,300 | 86 | ||||||
The Children’s Place Retail Stores, Inc. * | 1,800 | 46 | ||||||
The Dress Barn, Inc. * | 6,000 | 98 | ||||||
The Finish Line, Inc., Class A | 3,600 | 14 | ||||||
The Gap, Inc. | 73,900 | 1,397 | ||||||
The Gymboree Corp. * | 2,500 | 85 | ||||||
The Home Depot, Inc. | 146,070 | 4,603 | ||||||
The Men’s Wearhouse, Inc. | 3,600 | 152 | ||||||
The Pep Boys — Manny, Moe & Jack | 5,000 | 74 | ||||||
The Sherwin-Williams Co. | 13,000 | 831 | ||||||
The Talbots, Inc. (a) | 5,700 | 84 | ||||||
The TJX Cos., Inc. | 40,400 | 1,169 | ||||||
The Wet Seal, Inc., Class A * | 6,000 | 16 | ||||||
Tiffany & Co. | 11,500 | 623 | ||||||
Tractor Supply Co. (a)* | 4,000 | 166 | ||||||
Trans World Entertainment Corp. * | 1,500 | 6 | ||||||
TravelCenters of America LLC * | 600 | 16 | ||||||
Tuesday Morning Corp. | 2,500 | 19 | ||||||
Tween Brands, Inc. * | 1,742 | 53 | ||||||
Urban Outfitters, Inc. * | 12,800 | 323 | ||||||
ValueVision Media, Inc., Class A * | 1,400 | 7 | ||||||
West Marine, Inc. * | 2,500 | 27 | ||||||
Williams-Sonoma, Inc. | 9,200 | 289 | ||||||
Winmark Corp. * | 1,200 | 25 | ||||||
Zale Corp. * | 5,020 | 106 | ||||||
52,522 | ||||||||
Semiconductors & Semiconductor Equipment 2.5% | ||||||||
Actel Corp. * | 1,100 | 13 | ||||||
Advanced Energy Industries, Inc. * | 3,900 | 62 | ||||||
Advanced Micro Devices, Inc. (a)* | 34,200 | 447 | ||||||
Alliance Semiconductor Corp. | 1,200 | 2 | ||||||
Altera Corp. | 30,400 | 596 | ||||||
AMIS Holdings, Inc. * | 7,100 | 54 | ||||||
Amkor Technology, Inc. * | 14,400 | 163 | ||||||
ANADIGICS, Inc. (a)* | 1,150 | 17 | ||||||
Analog Devices, Inc. | 30,200 | 1,011 | ||||||
Applied Materials, Inc. | 139,098 | 2,701 | ||||||
Asyst Technologies, Inc. * | 1,700 | 8 | ||||||
Atmel Corp. * | 37,900 | 185 | ||||||
ATMI, Inc. * | 1,400 | 45 | ||||||
Axcelis Technologies, Inc. * | 7,044 | 33 | ||||||
AXT, Inc. * | 800 | 4 | ||||||
Broadcom Corp., Class A * | 40,700 | 1,325 | ||||||
Brooks Automation, Inc. * | 5,585 | 73 | ||||||
Cabot Microelectronics Corp. * | 660 | 26 | ||||||
CEVA, Inc. * | 433 | 4 | ||||||
Cirrus Logic, Inc. * | 3,800 | 23 | ||||||
Cohu, Inc. | 1,100 | 18 | ||||||
Credence Systems Corp. * | 1,700 | 5 | ||||||
Cree, Inc. (a)* | 6,000 | 168 | ||||||
Cymer, Inc. * | 4,200 | 179 | ||||||
Cypress Semiconductor Corp. * | 8,500 | 311 | ||||||
Diodes, Inc. * | 6,412 | 212 | ||||||
DSP Group, Inc. * | 3,300 | 52 | ||||||
EMCORE Corp. (a)* | 1,500 | 16 | ||||||
Entegris, Inc. * | 14,299 | 131 | ||||||
Exar Corp. * | 3,834 | 47 | ||||||
Fairchild Semiconductor International, Inc. * | 8,600 | 157 | ||||||
FEI Co. * | 1,500 | 44 | ||||||
FormFactor, Inc. * | 2,500 | 98 | ||||||
FSI International, Inc. * | 1,300 | 3 | ||||||
hi/fn, Inc. * | 800 | 6 | ||||||
Integrated Device Technology, Inc. * | 16,120 | 217 | ||||||
Integrated Silicon Solution, Inc. * | 3,400 | 23 | ||||||
Intel Corp. | 483,832 | 13,015 | ||||||
International Rectifier Corp. * | 6,600 | 220 | ||||||
Intersil Corp., Class A | 12,364 | 375 | ||||||
IXYS Corp. * | 900 | 10 | ||||||
KLA-Tencor Corp. | 15,000 | 790 | ||||||
Kopin Corp. * | 2,500 | 10 | ||||||
Kulicke and Soffa Industries, Inc. * | 4,400 | 33 | ||||||
Lam Research Corp. * | 11,600 | 582 | ||||||
Lattice Semiconductor Corp. * | 4,600 | 19 | ||||||
Linear Technology Corp. (a) | 25,000 | 826 | ||||||
LSI Corp. * | 62,387 | 412 | ||||||
LTX Corp. * | 1,900 | 6 | ||||||
Marvell Technology Group Ltd. * | 32,400 | 584 | ||||||
Mattson Technology, Inc. * | 4,100 | 36 | ||||||
Maxim Integrated Products, Inc. | 25,453 | 690 | ||||||
MEMC Electronic Materials, Inc. * | 16,300 | 1,193 | ||||||
Micrel, Inc. | 6,800 | 62 | ||||||
Microchip Technology, Inc. | 16,475 | 546 | ||||||
Micron Technology, Inc. * | 52,699 | 554 | ||||||
Microsemi Corp. * | 7,652 | 204 | ||||||
MIPS Technologies, Inc. * | 1,100 | 9 | ||||||
MKS Instruments, Inc. * | 4,300 | 86 | ||||||
MoSys, Inc. * | 1,200 | 8 | ||||||
Nanometrics, Inc. * | 300 | 3 | ||||||
National Semiconductor Corp. (a) | 29,200 | 734 | ||||||
Novellus Systems, Inc. * | 11,171 | 317 | ||||||
NVIDIA Corp. * | 42,000 | 1,486 | ||||||
OmniVision Technologies, Inc. * | 4,800 | 106 | ||||||
ON Semiconductor Corp. * | 21,000 | 214 | ||||||
Pericom Semiconductor Corp. * | 600 | 9 | ||||||
Photronics, Inc. * | 9,400 | 103 | ||||||
PLX Technology, Inc. * | 1,300 | 14 | ||||||
PMC-Sierra, Inc. (a)* | 8,800 | 79 | ||||||
Rambus, Inc. * | 8,200 | 162 | ||||||
RF Micro Devices, Inc. (a)* | 13,700 | 85 | ||||||
Rudolph Technologies, Inc. * | 1,318 | 17 | ||||||
Semitool, Inc. * | 4,300 | 40 |
20 See Financial Notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Semtech Corp. * | 6,000 | 103 | ||||||
Silicon Image, Inc. * | 6,500 | 41 | ||||||
Silicon Laboratories, Inc. * | 5,000 | 219 | ||||||
Silicon Storage Technology, Inc. * | 7,000 | 23 | ||||||
SiRF Technology Holdings, Inc. * | 3,500 | 104 | ||||||
Skyworks Solutions, Inc. * | 5,689 | 52 | ||||||
Standard Microsystems Corp. * | 3,600 | 140 | ||||||
Supertex, Inc. (a)* | 1,400 | 51 | ||||||
Teradyne, Inc. * | 15,559 | 192 | ||||||
Tessera Technologies, Inc. * | 3,000 | 115 | ||||||
Texas Instruments, Inc. | 143,397 | 4,675 | ||||||
Three-Five Systems, Inc. * | 1,099 | — | ||||||
Trident Microsystems, Inc. * | 5,000 | 38 | ||||||
TriQuint Semiconductor, Inc. * | 5,310 | 33 | ||||||
Ultratech, Inc. * | 1,300 | 15 | ||||||
Varian Semiconductor Equipment Associates, Inc. * | 7,875 | 362 | ||||||
Veeco Instruments, Inc. * | 3,500 | 63 | ||||||
Virage Logic Corp. * | 1,400 | 12 | ||||||
Xilinx, Inc. | 27,600 | 673 | ||||||
Zoran Corp. * | 4,261 | 109 | ||||||
39,138 | ||||||||
Software & Services 7.2% | ||||||||
Accenture Ltd., Class A | 72,000 | 2,812 | ||||||
ACI Worldwide, Inc. * | 5,200 | 119 | ||||||
Activision, Inc. * | 22,866 | 541 | ||||||
Actuate Corp. * | 8,600 | 76 | ||||||
Acxiom Corp. | 13,300 | 175 | ||||||
Adobe Systems, Inc. * | 46,210 | 2,213 | ||||||
Advent Software, Inc. * | 4,100 | 227 | ||||||
Affiliated Computer Services, Inc., Class A * | 9,900 | 502 | ||||||
Akamai Technologies, Inc. (a)* | 12,138 | 476 | ||||||
Alliance Data Systems Corp. * | 6,600 | 531 | ||||||
Ansoft Corp. * | 4,600 | 138 | ||||||
Answerthink, Inc. * | 1,700 | 7 | ||||||
ANSYS, Inc. * | 6,800 | 264 | ||||||
Ariba, Inc. * | 11,570 | 150 | ||||||
Aspen Technology, Inc. * | 8,500 | 148 | ||||||
Authorize.Net Holdings, Inc. * | 4,700 | 110 | ||||||
Autodesk, Inc. * | 16,800 | 822 | ||||||
Automatic Data Processing, Inc. | 48,100 | 2,384 | ||||||
BEA Systems, Inc. * | 30,400 | 514 | ||||||
BearingPoint, Inc. * | 7,100 | 34 | ||||||
Blackbaud, Inc. | 3,000 | 81 | ||||||
BMC Software, Inc. * | 29,000 | 981 | ||||||
Borland Software Corp. * | 3,000 | 13 | ||||||
Bottomline Technologies, Inc. * | 5,000 | 80 | ||||||
Broadridge Financial Solutions, Inc. | 12,025 | 241 | ||||||
CA, Inc. | 47,508 | 1,257 | ||||||
CACI International, Inc., Class A * | 2,100 | 113 | ||||||
Cadence Design Systems, Inc. * | 22,600 | 443 | ||||||
Captaris, Inc. * | 2,200 | 10 | ||||||
Catapult Communications Corp. * | 1,600 | 12 | ||||||
Ceridian Corp. * | 19,500 | 701 | ||||||
CheckFree Corp. * | 7,900 | 375 | ||||||
Chordiant Software, Inc. * | 440 | 6 | ||||||
CIBER, Inc. * | 7,300 | 57 | ||||||
Citrix Systems, Inc. * | 20,000 | 860 | ||||||
CMGI, Inc. * | 39,500 | 56 | ||||||
CNET Networks, Inc. * | 9,983 | 81 | ||||||
Cognizant Technology Solutions Corp., Class A * | 21,200 | 879 | ||||||
Computer Sciences Corp. (a)* | 16,238 | 948 | ||||||
Compuware Corp. * | 27,900 | 279 | ||||||
Convergys Corp. * | 10,500 | 192 | ||||||
CSG Systems International, Inc. * | 5,400 | 111 | ||||||
DealerTrack Holdings, Inc. * | 3,100 | 152 | ||||||
Digimarc Corp. * | 7,500 | 68 | ||||||
Digital River, Inc. * | 2,100 | 111 | ||||||
DST Systems, Inc. * | 8,100 | 686 | ||||||
Dynamics Research Corp. * | 1,200 | 13 | ||||||
EarthLink, Inc. * | 17,050 | 135 | ||||||
Edgewater Technology, Inc. * | 767 | 6 | ||||||
Electronic Arts, Inc. * | 25,200 | 1,540 | ||||||
Electronic Data Systems Corp. | 42,100 | 909 | ||||||
eLoyalty Corp. * | 190 | 3 | ||||||
Entrust, Inc. * | 11,300 | 23 | ||||||
Epicor Software Corp. * | 4,000 | 47 | ||||||
EPIQ Systems, Inc. * | 825 | 16 | ||||||
Equinix, Inc. (a)* | 2,565 | 299 | ||||||
eSPEED, Inc., Class A * | 8,300 | 84 | ||||||
Euronet Worldwide, Inc. * | 2,500 | 80 | ||||||
Exlservice Holdings, Inc. * | 5,000 | 135 | ||||||
FactSet Research Systems, Inc. | 3,750 | 264 | ||||||
Fair Isaac Corp. | 7,744 | 294 | ||||||
FalconStor Software, Inc. * | 1,200 | 17 | ||||||
Fidelity National Information Services, Inc. | 16,314 | 752 | ||||||
Fiserv, Inc. * | 15,300 | 848 | ||||||
Forrester Research, Inc. * | 4,100 | 97 | ||||||
Gartner, Inc. * | 10,300 | 226 | ||||||
Global Payments, Inc. | 6,240 | 297 | ||||||
Google, Inc., Class A * | 27,900 | 19,725 | ||||||
GSE Systems, Inc. * | 424 | 4 | ||||||
Hewitt Associates, Inc., Class A * | 9,425 | 333 | ||||||
iGATE Corp. * | 9,600 | 84 | ||||||
Informatica Corp. * | 6,700 | 114 | ||||||
InfoSpace, Inc. | 3,872 | 75 | ||||||
infoUSA, Inc. | 4,800 | 50 | ||||||
Interactive Intelligence, Inc. * | 4,000 | 104 | ||||||
Internet Capital Group, Inc. * | 350 | 4 | ||||||
Intervoice, Inc. * | 1,678 | 16 | ||||||
Interwoven, Inc. * | 5,925 | 84 | ||||||
Intuit, Inc. * | 33,430 | 1,075 | ||||||
Iron Mountain, Inc. (a)* | 14,680 | 510 |
See Financial Notes. 21
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
j2 Global Communications, Inc. * | 4,000 | 135 | ||||||
Jack Henry & Associates, Inc. | 6,300 | 184 | ||||||
JDA Software Group, Inc. * | 4,500 | 112 | ||||||
Kana Software, Inc. * | 528 | 2 | ||||||
Lawson Software, Inc. * | 14,500 | 164 | ||||||
LookSmart, Ltd. * | 480 | 1 | ||||||
Macrovision Corp. * | 3,100 | 74 | ||||||
Magma Design Automation, Inc. * | 7,200 | 107 | ||||||
Manhattan Associates, Inc. * | 4,300 | 130 | ||||||
ManTech International Corp., Class A * | 5,000 | 199 | ||||||
MasterCard, Inc., Class A | 10,000 | 1,896 | ||||||
MAXIMUS, Inc. | 4,200 | 201 | ||||||
McAfee, Inc. * | 14,445 | 597 | ||||||
Mentor Graphics Corp. * | 8,200 | 131 | ||||||
MICROS Systems, Inc. * | 11,000 | 790 | ||||||
Microsoft Corp. | 800,850 | 29,479 | ||||||
MicroStrategy, Inc., Class A * | 856 | 84 | ||||||
Midway Games, Inc. (a)* | 5,600 | 17 | ||||||
Moldflow Corp. * | 300 | 5 | ||||||
MoneyGram International, Inc. | 7,500 | 120 | ||||||
Move, Inc. * | 5,020 | 13 | ||||||
MPS Group, Inc. * | 11,400 | 139 | ||||||
MSC.Software Corp. * | 1,800 | 25 | ||||||
Napster, Inc. * | 724 | 2 | ||||||
NAVTEQ Corp. * | 8,600 | 664 | ||||||
NetScout Systems, Inc. * | 7,300 | 113 | ||||||
Novell, Inc. * | 25,600 | 194 | ||||||
Nuance Communications, Inc. * | 1,974 | 44 | ||||||
NYFIX, Inc. * | 750 | 3 | ||||||
Omniture, Inc. * | 5,000 | 171 | ||||||
Openwave Systems, Inc. | 7,771 | 31 | ||||||
OPNET Technologies, Inc. * | 3,600 | 44 | ||||||
Oracle Corp. * | 434,449 | 9,632 | ||||||
Parametric Technology Corp. * | 8,680 | 166 | ||||||
Paychex, Inc. | 32,400 | 1,354 | ||||||
Perot Systems Corp., Class A * | 9,100 | 133 | ||||||
Phoenix Technologies Ltd. * | 4,100 | 47 | ||||||
PLATO Learning, Inc. * | 1,433 | 6 | ||||||
Progress Software Corp. * | 4,200 | 137 | ||||||
Quality Systems, Inc. | 2,000 | 72 | ||||||
Quest Software, Inc. * | 7,700 | 134 | ||||||
Radiant Systems, Inc. * | 3,800 | 62 | ||||||
RealNetworks, Inc. * | 18,900 | 137 | ||||||
Red Hat, Inc. * | 14,600 | 315 | ||||||
Renaissance Learning, Inc. (a) | 2,100 | 29 | ||||||
S1 Corp. * | 12,930 | 109 | ||||||
Saba Software, Inc. * | 3,849 | 18 | ||||||
SAIC, Inc. * | 9,500 | 187 | ||||||
Salesforce.com, Inc. * | 8,500 | 479 | ||||||
Sapient Corp. * | 9,100 | 64 | ||||||
SAVVIS, Inc. (a)* | 4,000 | 151 | ||||||
Secure Computing Corp. * | 3,200 | 32 | ||||||
SonicWALL, Inc. * | 7,400 | 77 | ||||||
SourceForge, Inc. (a)* | 4,527 | 12 | ||||||
SPSS, Inc. * | 3,200 | 122 | ||||||
SRA International, Inc., Class A * | 5,000 | 137 | ||||||
StarTek, Inc. | 3,900 | 42 | ||||||
SumTotal Systems, Inc. * | 463 | 2 | ||||||
SupportSoft, Inc. * | 11,600 | 56 | ||||||
Sybase, Inc. * | 19,036 | 544 | ||||||
Symantec Corp. * | 93,673 | 1,759 | ||||||
Synopsys, Inc. * | 13,684 | 387 | ||||||
Synplicity, Inc. * | 4,200 | 26 | ||||||
Syntel, Inc. | 2,500 | 106 | ||||||
Take-Two Interactive Software, Inc. (a)* | 6,000 | 113 | ||||||
TeleCommunication Systems, Inc., Class A * | 1,300 | 5 | ||||||
Think Partnership, Inc. * | 5,600 | 10 | ||||||
THQ, Inc. * | 5,425 | 147 | ||||||
TIBCO Software, Inc. * | 16,000 | 147 | ||||||
Total System Services, Inc. (a) | 16,300 | 488 | ||||||
Unisys Corp. * | 27,600 | 168 | ||||||
United Online, Inc. | 8,650 | 152 | ||||||
USinternetworking, Inc. * | 1,100 | — | ||||||
ValueClick, Inc. * | 8,500 | 231 | ||||||
VeriFone Holdings, Inc. * | 6,600 | 326 | ||||||
VeriSign, Inc. * | 20,875 | 712 | ||||||
Vignette Corp. * | 3,394 | 59 | ||||||
VMware, Inc., Class A (a)* | 30,000 | 3,745 | ||||||
WebMD Health Corp., Class A (a)* | 5,600 | 257 | ||||||
Websense, Inc. * | 7,500 | 138 | ||||||
Website Pros, Inc. * | 223 | 2 | ||||||
Western Union Co. | 62,932 | 1,387 | ||||||
Wind River Systems, Inc. * | 10,060 | 126 | ||||||
Yahoo!, Inc. * | 111,144 | 3,457 | ||||||
113,374 | ||||||||
Technology Hardware & Equipment 7.1% | ||||||||
3Com Corp. * | 17,900 | 87 | ||||||
Adaptec, Inc. * | 5,700 | 20 | ||||||
ADC Telecommunications, Inc. * | 9,431 | 176 | ||||||
ADTRAN, Inc. | 7,000 | 168 | ||||||
Agilent Technologies, Inc. * | 39,317 | 1,449 | ||||||
Agilysys, Inc. | 1,360 | 24 | ||||||
Alcatel-Lucent, ADR (a) | 58,935 | 571 | ||||||
Amphenol Corp., Class A | 17,600 | 779 | ||||||
Anaren, Inc. * | 3,300 | 52 | ||||||
Andrew Corp. * | 13,425 | 197 | ||||||
Anixter International, Inc. * | 3,300 | 237 | ||||||
Apple, Inc. * | 75,000 | 14,246 | ||||||
Arris Group, Inc. * | 2,600 | 30 | ||||||
Arrow Electronics, Inc. * | 12,000 | 480 | ||||||
Avici Systems, Inc. | 375 | 3 | ||||||
Avid Technology, Inc. (a)* | 3,756 | 110 | ||||||
Avnet, Inc. * | 11,288 | 471 | ||||||
Avocent Corp. * | 3,963 | 107 | ||||||
AVX Corp. | 14,000 | 216 |
22 See Financial Notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Aware, Inc. * | 1,100 | 5 | ||||||
Bel Fuse, Inc., Class A | 1,200 | 42 | ||||||
Bell Microproducts, Inc. * | 1,000 | 6 | ||||||
Benchmark Electronics, Inc. * | 4,830 | 99 | ||||||
Black Box Corp. | 1,700 | 68 | ||||||
Blue Coat Systems, Inc. * | 680 | 28 | ||||||
Brightpoint, Inc. * | 4,454 | 72 | ||||||
Brocade Communications Systems, Inc. * | 32,535 | 309 | ||||||
C-COR, Inc. * | 3,100 | 38 | ||||||
CalAmp Corp. * | 1,000 | 4 | ||||||
Checkpoint Systems, Inc. * | 4,600 | 139 | ||||||
Ciena Corp. * | 2,470 | 118 | ||||||
Cisco Systems, Inc. * | 511,909 | 16,924 | ||||||
Cogent, Inc. * | 7,500 | 111 | ||||||
Cognex Corp. | 2,900 | 52 | ||||||
Coherent, Inc. * | 1,300 | 43 | ||||||
Comarco, Inc. | 500 | 3 | ||||||
CommScope, Inc. * | 4,900 | 231 | ||||||
Comtech Telecommunications Corp. * | 2,175 | 118 | ||||||
Corning, Inc. | 121,807 | 2,956 | ||||||
Cosine Communications, Inc. * | 730 | 2 | ||||||
CPI International, Inc. * | 6,000 | 122 | ||||||
CTS Corp. | 5,800 | 72 | ||||||
Daktronics, Inc. (a) | 5,200 | 155 | ||||||
Data Domain, Inc. (a)* | 4,500 | 155 | ||||||
DDi Corp. * | 1 | — | ||||||
Dell, Inc. * | 178,900 | 5,474 | ||||||
Diebold, Inc. | 5,300 | 222 | ||||||
Dolby Laboratories, Inc., Class A * | 8,800 | 365 | ||||||
Dycom Industries, Inc. * | 3,300 | 93 | ||||||
Echelon Corp. * | 3,700 | 82 | ||||||
Electro Scientific Industries, Inc. * | 1,300 | 28 | ||||||
Electronics for Imaging, Inc. * | 3,400 | 78 | ||||||
EMC Corp. * | 199,686 | 5,070 | ||||||
EMS Technologies, Inc. * | 1,000 | 28 | ||||||
Emulex Corp. * | 5,900 | 128 | ||||||
Entertainment Distribution Co., Inc. * | 2,300 | 2 | ||||||
Excel Technology, Inc. * | 600 | 17 | ||||||
Extreme Networks, Inc. * | 4,500 | 20 | ||||||
F5 Networks, Inc. * | 6,600 | 238 | ||||||
Finisar Corp. * | 7,900 | 18 | ||||||
Flextronics International Ltd. * | 24,936 | 307 | ||||||
FLIR Systems, Inc. * | 4,800 | 333 | ||||||
Foundry Networks, Inc. * | 9,300 | 197 | ||||||
Frequency Electronics, Inc. | 500 | 5 | ||||||
Gerber Scientific, Inc. * | 5,400 | 60 | ||||||
Harmonic, Inc. * | 6,342 | 78 | ||||||
Harris Corp. | 14,000 | 848 | ||||||
Harris Stratex Networks, Inc., Class A * | 700 | 13 | ||||||
Hewlett-Packard Co. | 249,636 | 12,901 | ||||||
Hutchinson Technology, Inc. * | 2,500 | 59 | ||||||
I.D. Systems, Inc. * | 3,000 | 37 | ||||||
Imation Corp. | 2,000 | 45 | ||||||
Immersion Corp. * | 800 | 13 | ||||||
Ingram Micro, Inc., Class A * | 13,400 | 285 | ||||||
Insight Enterprises, Inc. * | 4,650 | 129 | ||||||
Intelli-Check, Inc. * | 500 | 2 | ||||||
InterDigital, Inc. * | 4,500 | 97 | ||||||
Intermec, Inc. * | 5,600 | 142 | ||||||
International Business Machines Corp. | 131,510 | 15,271 | ||||||
Iomega Corp. * | 12,400 | 49 | ||||||
Itron, Inc. (a)* | 2,500 | 269 | ||||||
Ixia * | 5,200 | 54 | ||||||
Jabil Circuit, Inc. | 15,400 | 335 | ||||||
JDS Uniphase Corp. (a)* | 14,053 | 214 | ||||||
Juniper Networks, Inc. * | 40,565 | 1,460 | ||||||
Keithley Instruments, Inc. | 3,200 | 32 | ||||||
KEMET Corp. * | 6,700 | 47 | ||||||
L-1 Identity Solutions, Inc. * | 756 | 14 | ||||||
LaserCard Corp. * | 1,000 | 10 | ||||||
LeCroy Corp. * | 900 | 9 | ||||||
Lexmark International, Inc., Class A * | 10,900 | 458 | ||||||
LightPath Technologies, Inc. * | 75 | — | ||||||
Littelfuse, Inc. * | 2,000 | 64 | ||||||
MasTec, Inc. * | 5,350 | 84 | ||||||
Maxwell Technologies, Inc. (a)* | 1,000 | 10 | ||||||
Measurement Specialties, Inc. * | 700 | 19 | ||||||
Mercury Computer Systems, Inc. * | 3,600 | 56 | ||||||
Merix Corp. * | 3,700 | 26 | ||||||
Methode Electronics, Inc. | 3,600 | 45 | ||||||
Mettler-Toledo International, Inc. * | 3,200 | 340 | ||||||
MOCON, Inc. | 600 | 7 | ||||||
Molex, Inc. | 16,125 | 461 | ||||||
Motorola, Inc. | 195,955 | 3,682 | ||||||
MRV Communications, Inc. * | 4,307 | 12 | ||||||
MTS Systems Corp. | 4,500 | 200 | ||||||
Multi-Fineline Electronix, Inc. * | 2,500 | 36 | ||||||
National Instruments Corp. | 5,675 | 184 | ||||||
NCR Corp. * | 23,800 | 657 | ||||||
NETGEAR, Inc. * | 3,000 | 106 | ||||||
Network Appliance, Inc. * | 27,500 | 866 | ||||||
Network Equipment Technologies, Inc. * | 5,000 | 74 | ||||||
Newport Corp. * | 4,200 | 57 | ||||||
Oplink Communications, Inc. * | 657 | 10 | ||||||
OSI Systems, Inc. * | 3,700 | 93 | ||||||
Packeteer, Inc. * | 6,100 | 53 | ||||||
Palm, Inc. (a) | 8,638 | 78 | ||||||
Park Electrochemical Corp. | 3,600 | 113 | ||||||
Parkervision, Inc. (a)* | 400 | 6 | ||||||
PC Connection, Inc. * | 5,500 | 81 | ||||||
PC-Tel, Inc. * | 6,400 | 56 |
See Financial Notes. 23
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Performance Technologies, Inc. * | 1,600 | 9 | ||||||
Photon Dynamics, Inc. * | 3,400 | 35 | ||||||
Planar Systems, Inc. * | 3,700 | 25 | ||||||
Plantronics, Inc. | 4,000 | 109 | ||||||
Plexus Corp. * | 3,700 | 95 | ||||||
Polycom, Inc. * | 9,200 | 257 | ||||||
Powerwave Technologies, Inc. * | 3,583 | 20 | ||||||
Presstek, Inc. * | 1,100 | 8 | ||||||
Printronix, Inc. | 2,400 | 38 | ||||||
QLogic Corp. * | 17,044 | 265 | ||||||
QUALCOMM, Inc. | 135,100 | 5,773 | ||||||
Quantum Corp. * | 5,500 | 22 | ||||||
Radisys Corp. * | 3,700 | 50 | ||||||
Research Frontiers, Inc. (a)* | 800 | 12 | ||||||
Richardson Electronics Ltd. | 1,300 | 10 | ||||||
Riverbed Technology, Inc. * | 5,500 | 186 | ||||||
Rofin-Sinar Technologies, Inc. * | 1,900 | 149 | ||||||
Rogers Corp. * | 2,500 | 123 | ||||||
SanDisk Corp. * | 11,000 | 488 | ||||||
Sanmina-SCI Corp. * | 41,316 | 91 | ||||||
ScanSource, Inc. * | 1,200 | 44 | ||||||
SCM Microsystems, Inc. * | 1,200 | 4 | ||||||
SeaChange International, Inc. * | 6,350 | 39 | ||||||
Seagate Technology | 37,066 | 1,032 | ||||||
Sirenza Microdevices, Inc. * | 1,300 | 22 | ||||||
Sonus Networks, Inc. * | 19,400 | 134 | ||||||
Stratasys, Inc. * | 2,700 | 70 | ||||||
Sun Microsystems, Inc. * | 248,230 | 1,417 | ||||||
Sycamore Networks, Inc. * | 27,900 | 119 | ||||||
Symmetricom, Inc. * | 8,450 | 40 | ||||||
Synaptics, Inc. * | 3,500 | 190 | ||||||
Tech Data Corp. * | 5,300 | 208 | ||||||
Technitrol, Inc. | 4,000 | 118 | ||||||
Tekelec * | 8,700 | 115 | ||||||
Tektronix, Inc. | 9,202 | 348 | ||||||
Tellabs, Inc. * | 34,564 | 305 | ||||||
Teradata Corp. * | 23,800 | 679 | ||||||
TESSCO Technologies, Inc. * | 1,350 | 21 | ||||||
ThinkEngine Networks, Inc. * | 2,600 | 3 | ||||||
Tollgrade Communications, Inc. * | 3,600 | 29 | ||||||
Trimble Navigation Ltd. * | 11,792 | 492 | ||||||
TTM Technologies, Inc. * | 4,400 | 56 | ||||||
Tyco Electronics Ltd. | 38,525 | 1,374 | ||||||
UTStarcom, Inc. (a)* | 9,500 | 30 | ||||||
Vertel Corp. * | 900 | — | ||||||
ViaSat, Inc. * | 3,500 | 107 | ||||||
Vishay Intertechnology, Inc. * | 36,688 | 462 | ||||||
Westell Technologies, Inc., Class A * | 15,960 | 31 | ||||||
Western Digital Corp. * | 18,700 | 485 | ||||||
Xerox Corp. * | 69,700 | 1,216 | ||||||
Xybernaut Corp. (b)* | 1,400 | — | ||||||
Zebra Technologies Corp., Class A * | 6,375 | 249 | ||||||
Zygo Corp. * | 3,500 | 41 | ||||||
111,652 | ||||||||
Telecommunication Services 3.2% | ||||||||
Alaska Communication Systems Group, Inc. | 5,000 | 81 | ||||||
ALLTEL Corp. | 30,587 | 2,176 | ||||||
American Tower Corp., Class A * | 33,800 | 1,493 | ||||||
AT&T, Inc. | 520,056 | 21,733 | ||||||
Atlantic Tele-Network, Inc. | 3,250 | 117 | ||||||
Centennial Communications Corp. * | 8,000 | 82 | ||||||
CenturyTel, Inc. | 13,500 | 595 | ||||||
Cincinnati Bell, Inc. * | 22,268 | 121 | ||||||
Citizens Communications Co. | 37,119 | 488 | ||||||
Cogent Communications Group, Inc. * | 3,900 | 108 | ||||||
Consolidated Communications Holdings, Inc. | 2,500 | 50 | ||||||
Crown Castle International Corp. * | 27,776 | 1,141 | ||||||
D&E Communications, Inc. | 5,500 | 82 | ||||||
Dobson Communications Corp., Class A * | 20,800 | 269 | ||||||
Embarq Corp. | 11,576 | 613 | ||||||
General Communication, Inc., Class A * | 10,500 | 123 | ||||||
HickoryTech Corp. | 4,600 | 42 | ||||||
IDT Corp., Class B * | 7,600 | 61 | ||||||
Iowa Telecommunications Services, Inc. | 2,500 | 49 | ||||||
Kratos Defense & Security Solutions, Inc. * | 1,800 | 5 | ||||||
Leap Wireless International, Inc. * | 1,800 | 128 | ||||||
Level 3 Communications, Inc. * | 93,000 | 282 | ||||||
Lynch Interactive Corp. * | 9 | 34 | ||||||
NeuStar, Inc., Class A * | 6,300 | 215 | ||||||
NII Holdings, Inc., Class B * | 1,900 | 110 | ||||||
North Pittsburgh Systems, Inc. | 3,500 | 85 | ||||||
NTELOS Holdings Corp. | 3,000 | 91 | ||||||
Qwest Communications International, Inc. * | 151,337 | 1,087 | ||||||
Rural Cellular Corp., Class A * | 4,200 | 186 | ||||||
SBA Communications Corp., Class A * | 9,300 | 331 | ||||||
Sprint Nextel Corp. | 236,530 | 4,045 | ||||||
SureWest Communications | 5,500 | 146 | ||||||
Syniverse Holdings, Inc. * | 10,400 | 174 | ||||||
Telephone & Data Systems, Inc. | 10,600 | 740 | ||||||
Time Warner Telecom, Inc., Class A * | 14,000 | 325 | ||||||
United States Cellular Corp. * | 6,100 | 574 | ||||||
USA Mobility, Inc. * | 3,000 | 47 | ||||||
Verizon Communications, Inc. | 247,572 | 11,406 | ||||||
Warwick Valley Telephone Co. | 1,100 | 14 |
24 See Financial Notes.
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Windstream Corp. | 31,624 | 425 | ||||||
49,874 | ||||||||
Transportation 1.7% | ||||||||
AirTran Holdings, Inc. * | 5,800 | 60 | ||||||
Alaska Air Group, Inc. * | 1,900 | 48 | ||||||
Alexander & Baldwin, Inc. | 3,400 | 178 | ||||||
AMERCO * | 900 | 58 | ||||||
AMR Corp. * | 19,500 | 468 | ||||||
Arkansas Best Corp. | 1,100 | 30 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 3,000 | 176 | ||||||
Avis Budget Group, Inc. * | 8,372 | 175 | ||||||
Burlington Northern Santa Fe Corp. | 30,300 | 2,641 | ||||||
C.H. Robinson Worldwide, Inc. | 15,000 | 749 | ||||||
Con-way, Inc. | 4,500 | 192 | ||||||
Continental Airlines, Inc., Class B * | 10,000 | 343 | ||||||
CSX Corp. | 36,700 | 1,643 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 3,500 | 121 | ||||||
Expeditors International of Washington, Inc. | 16,200 | 820 | ||||||
ExpressJet Holdings, Inc. * | 16,500 | 55 | ||||||
FedEx Corp. | 24,063 | 2,487 | ||||||
Forward Air Corp. | 2,600 | 85 | ||||||
Genco Shipping & Trading Ltd. (a) | 5,500 | 395 | ||||||
Heartland Express, Inc. | 8,941 | 125 | ||||||
Hertz Global Holdings, Inc. * | 26,000 | 564 | ||||||
Horizon Lines, Inc., Class A | 5,200 | 164 | ||||||
Hub Group, Inc., Class A * | 4,400 | 112 | ||||||
J.B. Hunt Transport Services, Inc. | 13,000 | 360 | ||||||
JetBlue Airways Corp. (a)* | 11,962 | 109 | ||||||
Kansas City Southern * | 5,050 | 195 | ||||||
Kirby Corp. * | 5,600 | 256 | ||||||
Knight Transportation, Inc. (a) | 4,050 | 65 | ||||||
Landstar System, Inc. | 15,200 | 640 | ||||||
MAIR Holdings, Inc. * | 1,100 | 6 | ||||||
Mesa Air Group, Inc. * | 10,100 | 47 | ||||||
Midwest Air Group, Inc. (a)* | 5,000 | 81 | ||||||
Norfolk Southern Corp. | 34,500 | 1,782 | ||||||
Old Dominion Freight Line, Inc. * | 4,050 | 91 | ||||||
Pacer International, Inc. | 2,800 | 41 | ||||||
Park-Ohio Holdings Corp. * | 2,600 | 62 | ||||||
Pinnacle Airlines Corp. * | 7,500 | 119 | ||||||
Quixote Corp. | 1,300 | 24 | ||||||
Republic Airways Holdings, Inc. * | 7,500 | 160 | ||||||
Ryder System, Inc. | 6,400 | 306 | ||||||
Saia, Inc. * | 6,100 | 86 | ||||||
SkyWest, Inc. | 4,000 | 109 | ||||||
Southwest Airlines Co. | 64,125 | 911 | ||||||
UAL Corp. * | 5,600 | 268 | ||||||
Union Pacific Corp. | 22,000 | 2,817 | ||||||
United Parcel Service, Inc., Class B | 91,480 | 6,870 | ||||||
US Airways Group, Inc. * | 5,900 | 163 | ||||||
Werner Enterprises, Inc. (a) | 5,832 | 111 | ||||||
YRC Worldwide, Inc. (a)* | 5,004 | 123 | ||||||
27,491 | ||||||||
Utilities 3.3% | ||||||||
AGL Resources, Inc. | 6,800 | 269 | ||||||
Allegheny Energy, Inc. * | 14,400 | 873 | ||||||
ALLETE, Inc. | 5,233 | 229 | ||||||
Alliant Energy Corp. | 11,800 | 472 | ||||||
Ameren Corp. | 15,100 | 816 | ||||||
American Electric Power Co., Inc. | 33,820 | 1,630 | ||||||
Aqua America, Inc. (a) | 4,894 | 114 | ||||||
Aquila, Inc. * | 33,200 | 139 | ||||||
Atmos Energy Corp. | 6,700 | 188 | ||||||
Avista Corp. | 3,800 | 84 | ||||||
Black Hills Corp. | 3,900 | 173 | ||||||
CenterPoint Energy, Inc. (a) | 26,100 | 437 | ||||||
Central Vermont Public Service Corp. | 6,200 | 197 | ||||||
CH Energy Group, Inc. | 1,900 | 89 | ||||||
Cleco Corp. | 3,400 | 90 | ||||||
CMS Energy Corp. | 19,900 | 338 | ||||||
Consolidated Edison, Inc. | 17,000 | 800 | ||||||
Constellation Energy Group | 15,500 | 1,468 | ||||||
Dominion Resources, Inc. | 24,740 | 2,267 | ||||||
DPL, Inc. | 11,452 | 333 | ||||||
DTE Energy Co. | 13,801 | 684 | ||||||
Duke Energy Corp. | 102,856 | 1,972 | ||||||
Dynegy, Inc., Class A * | 39,081 | 360 | ||||||
Edison International | 37,710 | 2,193 | ||||||
El Paso Electric Co. * | 5,300 | 129 | ||||||
Energen Corp. | 5,200 | 333 | ||||||
Energy East Corp. | 12,214 | 340 | ||||||
Entergy Corp. | 15,700 | 1,882 | ||||||
Equitable Resources, Inc. | 8,800 | 496 | ||||||
Exelon Corp. | 54,474 | 4,509 | ||||||
FirstEnergy Corp. | 28,217 | 1,967 | ||||||
Florida Public Utilites Co. | 1,599 | 19 | ||||||
FPL Group, Inc. | 32,900 | 2,251 | ||||||
Great Plains Energy, Inc. (a) | 6,500 | 194 | ||||||
Hawaiian Electric Industries, Inc. | 7,700 | 179 | ||||||
IDACORP, Inc. | 4,200 | 146 | ||||||
Integrys Energy Group, Inc. | 5,040 | 271 | ||||||
MDU Resources Group, Inc. | 16,425 | 462 | ||||||
Mirant Corp. * | 17,700 | 750 | ||||||
National Fuel Gas Co. | 5,800 | 281 | ||||||
New Jersey Resources Corp. | 4,150 | 204 | ||||||
Nicor, Inc. | 3,000 | 130 | ||||||
NiSource, Inc. | 22,864 | 468 | ||||||
Northeast Utilities | 15,624 | 482 | ||||||
Northwest Natural Gas Co. | 5,700 | 275 |
See Financial Notes. 25
Table of Contents
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
NRG Energy, Inc. * | 14,000 | 639 | ||||||
NSTAR | 7,734 | 272 | ||||||
OGE Energy Corp. | 6,500 | 249 | ||||||
ONEOK, Inc. | 12,900 | 644 | ||||||
Ormat Technologies, Inc. | 2,800 | 151 | ||||||
Otter Tail Corp. | 1,100 | 38 | ||||||
Pepco Holdings, Inc. | 14,000 | 399 | ||||||
PG&E Corp. | 29,900 | 1,463 | ||||||
Piedmont Natural Gas Co., Inc. | 3,200 | 82 | ||||||
Pinnacle West Capital Corp. | 6,800 | 275 | ||||||
PNM Resources, Inc. | 5,500 | 138 | ||||||
PPL Corp. | 32,500 | 1,680 | ||||||
Progress Energy, Inc. | 21,159 | 1,016 | ||||||
Public Service Enterprise Group, Inc. | 22,000 | 2,103 | ||||||
Puget Energy, Inc. | 7,500 | 212 | ||||||
Questar Corp. | 16,200 | 925 | ||||||
Reliant Energy, Inc. * | 28,125 | 774 | ||||||
SCANA Corp. | 10,405 | 422 | ||||||
Sempra Energy | 21,675 | 1,333 | ||||||
Sierra Pacific Resources | 20,476 | 345 | ||||||
Southern Co. | 58,600 | 2,148 | ||||||
Southern Union Co. | 9,874 | 311 | ||||||
Southwest Gas Corp. | 3,600 | 107 | ||||||
TECO Energy, Inc. | 23,700 | 399 | ||||||
The AES Corp. * | 55,096 | 1,180 | ||||||
The Laclede Group, Inc. | 3,300 | 115 | ||||||
UGI Corp. | 10,700 | 285 | ||||||
UIL Holdings Corp. | 3,166 | 111 | ||||||
Unisource Energy Corp. | 3,800 | 120 | ||||||
Unitil Corp. | 600 | 17 | ||||||
Vectren Corp. | 5,766 | 162 | ||||||
Westar Energy, Inc. | 8,200 | 218 | ||||||
WGL Holdings, Inc. | 3,000 | 102 | ||||||
Wisconsin Energy Corp. | 11,400 | 546 | ||||||
Xcel Energy, Inc. (a) | 34,195 | 771 | ||||||
51,735 | ||||||||
Total Common Stock | ||||||||
(Cost $1,073,413) | 1,559,111 | |||||||
Foreign Common Stock 0.2% of net assets | ||||||||
Bermuda 0.1% | ||||||||
Capital Goods 0.1% | ||||||||
Foster Wheeler Ltd. * | 5,200 | 771 | ||||||
Consumer Durables & Apparel 0.0% | ||||||||
Helen of Troy Ltd. * | 5,000 | 90 | ||||||
Consumer Services 0.0% | ||||||||
Orient-Express Hotels Ltd., Class A | 1,600 | 103 | ||||||
964 | ||||||||
Cayman Islands 0.1% | ||||||||
Energy 0.1% | ||||||||
GlobalSantaFe Corp. | 19,155 | 1,552 | ||||||
Singapore 0.0% | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Verigy Ltd. * | 4,813 | 111 | ||||||
United Kingdom 0.0% | ||||||||
Transportation 0.0% | ||||||||
UTI Worldwide, Inc. | 4,300 | 110 | ||||||
Total Foreign Common Stock | ||||||||
(Cost $1,070) | 2,737 | |||||||
Preferred Stock 0.1% of net assets | ||||||||
Real Estate 0.1% | ||||||||
Simon Property Group, Inc. | 19,520 | 2,032 | ||||||
Total Preferred Stock | ||||||||
(Cost $723) | 2,032 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($ x 1,000) | ($ x 1,000) | ||||||
Short-Term Investments 0.9% of net assets | ||||||||
Commercial Paper & Other Obligations 0.8% | ||||||||
Wells Fargo, Grand Cayman | ||||||||
Time Deposit | ||||||||
4.75%, 11/01/07 | 14,143 | 14,143 | ||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
4.24%, 12/20/07 (c) | 110 | 110 | ||||||
3.92%, 12/20/07 (c) | 730 | 726 | ||||||
836 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $14,979) | 14,979 | |||||||
End of Investments.
26 See Financial Notes.
Table of Contents
Number of | Value | |||||||
Security | Shares | ($ x 1,000) | ||||||
Collateral Invested for Securities on Loan 3.5% of net assets | ||||||||
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust | 54,830,367 | 54,830 | ||||||
End of collateral invested for securities on loan.
At 10/31/07 the tax basis cost of the fund’s investments was $1,090,527 and the unrealized appreciation and depreciation were $573,253 and ($84,921), respectively, with a net unrealized appreciation of $488,332.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | Fair-valued by Management. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | Issuer is affiliated with the fund’s adviser. |
ADR — American Depositary Receipt
In addition to the above, the fund held the following at 10/31/07. All numbers are x 1,000 except number of futures contracts.
Number of | Contract | Unrealized | ||||||||||
Contracts | Value | Gains | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, e-mini, Long, expires 12/21/07 | 35 | 2,913 | 151 | |||||||||
S & P 500 Index, e-mini, Long, expires 12/21/07 | 130 | 10,107 | 370 | |||||||||
521 |
See Financial Notes. 27
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, Randall W. Merk 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. |
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(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/ Randall W. Merk Chief Executive Officer |
Date: December 12, 2007
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/ Randall W. Merk Chief Executive Officer |
Date: December 12, 2007
By: | /s/ George Pereira Principal Financial Officer |
Date: December 12, 2007