Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07704
Schwab Capital Trust
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Marie Chandoha
Schwab Capital Trust
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 636-7000
Date of fiscal year end: December 31
Date of reporting period: December 31, 2015
Item 1: Report(s) to Shareholders.
Table of Contents
Moderate Payout
Enhanced Payout
Maximum Payout
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Moderate Payout
Enhanced Payout
Maximum Payout
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2 | |
3 | |
5 | |
Performance and Fund Facts | |
6 | |
8 | |
10 | |
12 | |
Financial Statements and Portfolio Holdings | |
13 | |
18 | |
23 | |
28 | |
37 | |
38 | |
39 | |
40 | |
44 |
Total Returns for the 12 Months Ended December 31, 2015 | |
Schwab Monthly Income Fund - Moderate Payout (Ticker Symbol: SWJRX) | -0.24% |
Moderate Payout Composite Index | 0.88% |
Fund Category: Morningstar Conservative Allocation | -2.32% |
Performance Details | pages 6-7 |
Schwab Monthly Income Fund - Enhanced Payout (Ticker Symbol: SWKRX) | 0.02% |
Enhanced Payout Composite Index | 0.90% |
Fund Category: Morningstar Conservative Allocation | -2.32% |
Performance Details | pages 8-9 |
Schwab Monthly Income Fund - Maximum Payout (Ticker Symbol: SWLRX) | 0.22% |
Maximum Payout Composite Index | 0.87% |
Fund Category: Morningstar Intermediate-Term Bond | -0.26% |
Performance Details | pages 10-11 |
Minimum Initial Investment1 | $100 |
1 | Please see prospectus for further detail and eligibility requirements. |
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![]() | Zifan Tang, Ph.D., CFA, Managing Director and Head of Asset Allocation Strategies, leads the portfolio management team and has overall responsibility for all aspects of the management of the funds. She was appointed portfolio manager of the funds in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Statistics | |
Number of Holdings | 6 |
Portfolio Turnover Rate | 14% |
12-Month Distribution Yield | 2.68% 2 |
Asset Class Weightings % of Investments3 | |
Fixed-Income Funds – Intermediate-Term Bond | 50.4% |
Equity Funds – Large-Cap | 28.2% |
Equity Funds – International | 11.9% |
Equity Funds – Global Real Estate | 7.5% |
Money Market Funds | 2.0% |
Total | 100.0% |
Top Holdings % of Net Assets4,5 | |
Schwab Total Bond Market Fund | 30.2% |
Schwab Dividend Equity Fund | 28.2% |
Schwab Intermediate-Term Bond Fund | 20.2% |
Laudus International MarketMasters Fund, Select Shares | 11.9% |
Schwab Global Real Estate Fund | 7.5% |
Total | 98.0% |
1 | The fund’s actual annual payout could be higher or lower than the targeted annual payout based on the interest rate environment and other market factors occurring during that year. The fund’s anticipated annual payout during a low interest rate environment is anticipated to be 1% to 3%, and, during a high interest rate environment, is anticipated to be 3% to 6%. For more information about payouts, please see the fund’s prospectus. |
2 | Calculation reflects the fund's monthly ordinary income distributions for the last 12 months divided by the fund's Net Asset Value as of the end of the reporting period. Distribution yield does not include capital gains distributions. Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the total return/yield may have been lower. |
3 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
4 | This list is not a recommendation of any security by the investment adviser. |
5 | The holdings listed exclude any temporary liquidity investments. |
Performance of Hypothetical
$10,000 Investment1
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Fund and Inception Date | 1 Year | 5 Years | Since Inception |
Fund: Schwab Monthly Income Fund – Moderate Payout (3/28/08) | -0.24% | 5.29% | 4.62% |
Moderate Payout Composite Index | 0.88% | 6.57% | 5.72% |
S&P 500 Index | 1.38% | 12.57% | 8.06% |
Barclays U.S. Aggregate Bond Index | 0.55% | 3.25% | 4.14% |
Fund Category: Morningstar Conservative Allocation | -2.32% | 4.30% | 4.29% |
1 | The fund’s routine expenses have been absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.66%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Statistics | |
Number of Holdings | 6 |
Portfolio Turnover Rate | 11% |
12-Month Distribution Yield | 2.41% 2 |
Asset Class Weightings % of Investments3 | |
Fixed-Income Funds – Intermediate-Term Bond | 65.4% |
Equity Funds – Large-Cap | 19.3% |
Equity Funds – International | 8.1% |
Equity Funds – Global Real Estate | 5.2% |
Money Market Funds | 2.0% |
Total | 100.0% |
Top Holdings % of Net Assets4,5 | |
Schwab Total Bond Market Fund | 39.1% |
Schwab Intermediate-Term Bond Fund | 26.1% |
Schwab Dividend Equity Fund | 19.3% |
Laudus International MarketMasters Fund, Select Shares | 8.1% |
Schwab Global Real Estate Fund | 5.2% |
Total | 97.8% |
1 | The fund’s actual annual payout could be higher or lower than the targeted annual payout based on the interest rate environment and other market factors occurring during that year. The fund’s anticipated annual payout during a low interest rate environment is anticipated to be 1% to 4%, and, during a high interest rate environment, is anticipated to be 4% to 7%. For more information about payouts, please see the fund’s prospectus. |
2 | Calculation reflects the fund's monthly ordinary income distributions for the last 12 months divided by the fund's Net Asset Value as of the end of the reporting period. Distribution yield does not include capital gains distributions. Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the total return/yield may have been lower. |
3 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
4 | This list is not a recommendation of any security by the investment adviser. |
5 | The holdings listed exclude any temporary liquidity investments. |
Performance of Hypothetical
$10,000 Investment1,2
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Fund and Inception Date | 1 Year | 5 Years | Since Inception |
Fund: Schwab Monthly Income Fund – Enhanced Payout (3/28/08) | 0.02% | 4.47% | 4.21% |
Enhanced Payout Composite Index | 0.90% | 5.44% | 5.24% |
S&P 500 Index | 1.38% | 12.57% | 8.06% |
Barclays U.S. Aggregate Bond Index | 0.55% | 3.25% | 4.14% |
Fund Category: Morningstar Conservative Allocation | -2.32% | 4.30% | 4.29% |
1 | The fund’s routine expenses have been absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
2 | On June 16, 2009, the Schwab Retirement Income Fund merged into the fund. |
3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.57%. Net Expense: Expenses reduced by a contractual fee waiver for so long as CSIM serves as the adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section in the financial statements. |
Statistics | |
Number of Holdings | 6 |
Portfolio Turnover Rate | 14% |
12-Month Distribution Yield | 2.30% 2 |
Asset Class Weightings % of Investments3 | |
Fixed-Income Funds – Intermediate-Term Bond | 80.3% |
Equity Funds – Large-Cap | 10.4% |
Equity Funds – International | 4.5% |
Equity Funds – Global Real Estate | 3.0% |
Money Market Funds | 1.8% |
Total | 100.0% |
Top Holdings % of Net Assets4,5 | |
Schwab Total Bond Market Fund | 48.1% |
Schwab Intermediate-Term Bond Fund | 32.1% |
Schwab Dividend Equity Fund | 10.4% |
Laudus International MarketMasters Fund, Select Shares | 4.5% |
Schwab Global Real Estate Fund | 3.0% |
Total | 98.1% |
1 | The fund’s actual annual payout could be higher or lower than the targeted annual payout based on the interest rate environment and other market factors occurring during that year. The fund’s anticipated annual payout during a low interest rate environment is anticipated to be 1% to 5%, and, during a high interest rate environment, is anticipated to be 5% to 8%. For more information about payouts, please see the fund’s prospectus. |
2 | Calculation reflects the fund's monthly ordinary income distributions for the last 12 months divided by the fund's Net Asset Value as of the end of the reporting period. Distribution yield does not include capital gains distributions. Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the total return/yield may have been lower. |
3 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
4 | This list is not a recommendation of any security by the investment adviser. |
5 | The holdings listed exclude any temporary liquidity investments. |
Performance of Hypothetical
$10,000 Investment1
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Fund and Inception Date | 1 Year | 5 Years | Since Inception |
Fund: Schwab Monthly Income Fund – Maximum Payout (3/28/08) | 0.22% | 3.24% | 3.45% |
Maximum Payout Composite Index | 0.87% | 4.29% | 4.71% |
S&P 500 Index | 1.38% | 12.57% | 8.06% |
Barclays U.S. Aggregate Bond Index | 0.55% | 3.25% | 4.14% |
Fund Category: Morningstar Intermediate-Term Bond | -0.26% | 3.22% | 4.20% |
1 | The fund’s routine expenses have been absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.47%. Net Expense: Expenses reduced by a contractual fee waiver for so long as CSIM serves as the adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section in the financial statements. |
As a fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
Expense Ratio1 (Annualized) | Beginning Account Value at 7/1/15 | Ending Account Value (Net of Expenses) at 12/31/15 | Expenses Paid During Period2 7/1/15–12/31/15 | |
Schwab Monthly Income Fund–Moderate Payout | ||||
Actual Return | 0.00% | $1,000.00 | $ 987.90 | $0.00 |
Hypothetical 5% Return | 0.00% | $1,000.00 | $1,025.21 | $0.00 |
Schwab Monthly Income Fund–Enhanced Payout | ||||
Actual Return | 0.00% | $1,000.00 | $ 992.80 | $0.00 |
Hypothetical 5% Return | 0.00% | $1,000.00 | $1,025.21 | $0.00 |
Schwab Monthly Income Fund–Maximum Payout | ||||
Actual Return | 0.00% | $1,000.00 | $ 996.50 | $0.00 |
Hypothetical 5% Return | 0.00% | $1,000.00 | $1,025.21 | $0.00 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period. The expenses incurred by the underlying funds in which the funds invest are not included in this ratio. |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
1/1/15– 12/31/15 | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | ||
Per-Share Data | ||||||
Net asset value at beginning of period | $11.21 | $11.14 | $10.52 | $9.92 | $9.87 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.22 1 | 0.23 | 0.21 | 0.24 | 0.23 | |
Net realized and unrealized gains (losses) | (0.24) | 0.44 | 0.74 | 0.63 | 0.06 | |
Total from investment operations | (0.02) | 0.67 | 0.95 | 0.87 | 0.29 | |
Less distributions: | ||||||
Distributions from net investment income | (0.28) | (0.31) | (0.21) | (0.27) | (0.24) | |
Distributions from net realized gains | (0.45) | (0.29) | (0.12) | — | — | |
Total distributions | (0.73) | (0.60) | (0.33) | (0.27) | (0.24) | |
Net asset value at end of period | $10.46 | $11.21 | $11.14 | $10.52 | $9.92 | |
Total return | (0.24%) | 6.09% | 9.10% | 8.86% | 2.97% | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses2 | 0.00% 3,4 | — | — | — | 0.00% 3 | |
Gross operating expenses2 | 0.23% | 0.25% | 0.30% | 0.44% | 0.46% | |
Net investment income (loss) | 1.98% | 2.00% | 2.02% | 2.38% | 2.30% | |
Portfolio turnover rate | 14% | 16% | 39% | 10% | 25% | |
Net assets, end of period (x 1,000,000) | $48 | $49 | $47 | $31 | $22 | |
Holdings by Category | Cost ($) | Value ($) | |
100.0% | Other Investment Companies | 48,146,563 | 48,024,330 |
100.0% | Total Investments | 48,146,563 | 48,024,330 |
0.0% | Other Assets and Liabilities, Net | 2,897 | |
100.0% | Net Assets | 48,027,227 |
Security | Number of Shares | Value ($) |
Other Investment Companies 100.0% of net assets | ||
Equity Funds 47.6% | ||
Global Real Estate 7.5% | ||
Schwab Global Real Estate Fund (a) | 509,074 | 3,599,152 |
International 11.9% | ||
Laudus International MarketMasters Fund, Select Shares (a) | 271,967 | 5,705,873 |
Security | Number of Shares | Value ($) |
Large-Cap 28.2% | ||
Schwab Dividend Equity Fund (a) | 945,939 | 13,574,225 |
22,879,250 | ||
Fixed-Income Funds 50.4% | ||
Intermediate-Term Bond 50.4% | ||
Schwab Intermediate-Term Bond Fund (a) | 958,264 | 9,678,465 |
Schwab Total Bond Market Fund (a) | 1,546,893 | 14,525,325 |
24,203,790 | ||
Money Market Fund 2.0% | ||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.02% (b) | 941,290 | 941,290 |
Total Other Investment Companies | ||
(Cost $48,146,563) | 48,024,330 |
(a) | Issuer is affiliated with the fund's investment adviser. |
(b) | The rate shown is the 7-day yield. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||
Other Investment Companies1 | $48,024,330 | $— | $— | $48,024,330 | |||||
Total | $48,024,330 | $— | $— | $48,024,330 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $47,205,273) | $47,083,040 | |
Investments in unaffiliated issuers, at value (cost $941,290) | + | 941,290 |
Total investments, at value (cost $48,146,563) | 48,024,330 | |
Receivables: | ||
Fund shares sold | 127,386 | |
Dividends | 42,178 | |
Due from investment adviser | 2,001 | |
Interest | 43 | |
Prepaid expenses | + | 2,702 |
Total assets | 48,198,640 | |
Liabilities | ||
Payables: | ||
Investments bought | 46,187 | |
Fund shares redeemed | 91,851 | |
Accrued expenses | + | 33,375 |
Total liabilities | 171,413 | |
Net Assets | ||
Total assets | 48,198,640 | |
Total liabilities | – | 171,413 |
Net assets | $48,027,227 | |
Net Assets by Source | ||
Capital received from investors | 47,022,574 | |
Net investment income not yet distributed | 2,446 | |
Net realized capital gains | 1,124,440 | |
Net unrealized capital depreciation | (122,233) |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$48,027,227 | 4,590,477 | $10.46 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $994,569 | |
Interest | + | 42 |
Total investment income | 994,611 | |
Expenses | ||
Professional fees | 32,139 | |
Transfer agent fees | 22,810 | |
Shareholder reports | 19,161 | |
Registration fees | 14,974 | |
Portfolio accounting fees | 12,846 | |
Independent trustees' fees | 7,070 | |
Proxy fees | 1,865 | |
Custodian fees | 1,572 | |
Other expenses | + | 1,604 |
Total expenses | 114,041 | |
Expense reduction by CSIM | – | 112,176 |
Net expenses | – | 1,865 |
Net investment income | 992,746 | |
Realized and Unrealized Gains (Losses) | ||
Realized capital gain distributions received from affiliated underlying funds | 1,800,288 | |
Net realized gains on sales of affiliated underlying funds | 445,483 | |
Net realized gains on unaffiliated issuers | + | 117 |
Net realized gains | 2,245,888 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | (3,374,148) |
Net realized and unrealized losses | (1,128,260) | |
Decrease in net assets resulting from operations | ($135,514) |
Operations | |||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||
Net investment income | $992,746 | $966,013 | |
Net realized gains | 2,245,888 | 2,288,004 | |
Net change in unrealized appreciation (depreciation) | + | (3,374,148) | (455,302) |
Increase (decrease) in net assets from operations | (135,514) | 2,798,715 | |
Distributions to Shareholders | |||
Distributions from net investment income | (1,248,331) | (1,307,174) | |
Distributions from net realized gains | + | (1,982,552) | (1,249,978) |
Total distributions | ($3,230,883) | ($2,557,152) |
Transactions in Fund Shares | |||||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 1,279,695 | $14,409,270 | 1,143,611 | $13,072,822 | |
Shares reinvested | 208,157 | 2,219,724 | 155,071 | 1,750,261 | |
Shares redeemed | + | (1,244,496) | (13,957,122) | (1,165,942) | (13,293,779) |
Net transactions in fund shares | 243,356 | $2,671,872 | 132,740 | $1,529,304 | |
Shares Outstanding and Net Assets | |||||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 4,347,121 | $48,721,752 | 4,214,381 | $46,950,885 | |
Total increase or decrease | + | 243,356 | (694,525) | 132,740 | 1,770,867 |
End of period | 4,590,477 | $48,027,227 | 4,347,121 | $48,721,752 | |
Net investment income not yet distributed | $2,446 | $1,084 |
1/1/15– 12/31/15 | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | ||
Per-Share Data | ||||||
Net asset value at beginning of period | $11.18 | $10.84 | $10.50 | $10.09 | $9.89 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.22 1 | 0.23 | 0.21 | 0.22 | 0.24 | |
Net realized and unrealized gains (losses) | (0.22) | 0.39 | 0.34 | 0.45 | 0.22 | |
Total from investment operations | — | 0.62 | 0.55 | 0.67 | 0.46 | |
Less distributions: | ||||||
Distributions from net investment income | (0.26) | (0.28) | (0.21) | (0.26) | (0.26) | |
Net asset value at end of period | $10.92 | $11.18 | $10.84 | $10.50 | $10.09 | |
Total return | 0.02% | 5.76% | 5.31% | 6.70% 2 | 4.69% 2 | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses3 | 0.00% 4,5 | — | 0.00% 4 | (0.00%) 4 | 0.00% 4 | |
Gross operating expenses3 | 0.13% | 0.15% | 0.15% | 0.18% | 0.15% | |
Net investment income (loss) | 1.99% | 2.03% | 1.99% | 2.17% | 2.43% | |
Portfolio turnover rate | 11% | 14% | 42% | 9% | 12% | |
Net assets, end of period (x 1,000,000) | $97 | $98 | $94 | $85 | $80 | |
Holdings by Category | Cost ($) | Value ($) | |
99.7% | Other Investment Companies | 94,673,098 | 96,752,379 |
99.7% | Total Investments | 94,673,098 | 96,752,379 |
0.3% | Other Assets and Liabilities, Net | 325,760 | |
100.0% | Net Assets | 97,078,139 |
Security | Number of Shares | Value ($) |
Other Investment Companies 99.7% of net assets | ||
Equity Funds 32.6% | ||
Global Real Estate 5.2% | ||
Schwab Global Real Estate Fund (a) | 717,615 | 5,073,540 |
International 8.1% | ||
Laudus International MarketMasters Fund, Select Shares (a) | 375,388 | 7,875,644 |
Security | Number of Shares | Value ($) |
Large-Cap 19.3% | ||
Schwab Dividend Equity Fund (a) | 1,301,005 | 18,669,416 |
31,618,600 | ||
Fixed-Income Funds 65.2% | ||
Intermediate-Term Bond 65.2% | ||
Schwab Intermediate-Term Bond Fund (a) | 2,503,887 | 25,289,254 |
Schwab Total Bond Market Fund (a) | 4,042,047 | 37,954,823 |
63,244,077 | ||
Money Market Fund 1.9% | ||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.02% (b) | 1,889,702 | 1,889,702 |
Total Other Investment Companies | ||
(Cost $94,673,098) | 96,752,379 |
(a) | Issuer is affiliated with the fund's investment adviser. |
(b) | The rate shown is the 7-day yield. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||
Other Investment Companies1 | $96,752,379 | $— | $— | $96,752,379 | |||||
Total | $96,752,379 | $— | $— | $96,752,379 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $92,783,396) | $94,862,677 | |
Investments in unaffiliated issuers, at value (cost $1,889,702) | + | 1,889,702 |
Total investments, at value (cost $94,673,098) | 96,752,379 | |
Receivables: | ||
Fund shares sold | 437,274 | |
Dividends | 109,871 | |
Due from investment adviser | 2,143 | |
Interest | 94 | |
Prepaid expenses | + | 3,216 |
Total assets | 97,304,977 | |
Liabilities | ||
Payables: | ||
Investments bought | 120,349 | |
Fund shares redeemed | 68,115 | |
Accrued expenses | + | 38,374 |
Total liabilities | 226,838 | |
Net Assets | ||
Total assets | 97,304,977 | |
Total liabilities | – | 226,838 |
Net assets | $97,078,139 | |
Net Assets by Source | ||
Capital received from investors | 93,352,825 | |
Net investment income not yet distributed | 2,156 | |
Net realized capital gains | 1,643,877 | |
Net unrealized capital appreciation | 2,079,281 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$97,078,139 | 8,893,818 | $10.92 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $1,979,320 | |
Interest | + | 94 |
Total investment income | 1,979,414 | |
Expenses | ||
Professional fees | 35,536 | |
Shareholder reports | 25,525 | |
Transfer agent fees | 23,193 | |
Registration fees | 16,024 | |
Portfolio accounting fees | 13,692 | |
Independent trustees' fees | 7,303 | |
Proxy fees | 2,689 | |
Custodian fees | 1,281 | |
Other expenses | + | 2,383 |
Total expenses | 127,626 | |
Expense reduction by CSIM | – | 124,937 |
Net expenses | – | 2,689 |
Net investment income | 1,976,725 | |
Realized and Unrealized Gains (Losses) | ||
Realized capital gain distributions received from affiliated underlying funds | 2,515,924 | |
Net realized gains on sales of affiliated underlying funds | 844,412 | |
Net realized gains on unaffiliated issuers | + | 189 |
Net realized gains | 3,360,525 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | (5,376,084) |
Net realized and unrealized losses | (2,015,559) | |
Decrease in net assets resulting from operations | ($38,834) |
Operations | |||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||
Net investment income | $1,976,725 | $1,952,225 | |
Net realized gains | 3,360,525 | 3,249,283 | |
Net change in unrealized appreciation (depreciation) | + | (5,376,084) | 104,844 |
Increase (decrease) in net assets from operations | (38,834) | 5,306,352 | |
Distributions to Shareholders | |||
Distributions from net investment income | ($2,335,165) | ($2,425,908) |
Transactions in Fund Shares | |||||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 1,768,913 | $19,823,256 | 2,138,964 | $23,718,230 | |
Shares reinvested | 131,261 | 1,457,760 | 135,844 | 1,508,717 | |
Shares redeemed | + | (1,736,547) | (19,400,268) | (2,189,460) | (24,260,384) |
Net transactions in fund shares | 163,627 | $1,880,748 | 85,348 | $966,563 | |
Shares Outstanding and Net Assets | |||||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 8,730,191 | $97,571,390 | 8,644,843 | $93,724,383 | |
Total increase or decrease | + | 163,627 | (493,251) | 85,348 | 3,847,007 |
End of period | 8,893,818 | $97,078,139 | 8,730,191 | $97,571,390 | |
Net investment income not yet distributed | $2,156 | $3,463 |
1/1/15– 12/31/15 | 1/1/14– 12/31/14 | 1/1/13– 12/31/13 | 1/1/12– 12/31/12 | 1/1/11– 12/31/11 | ||
Per-Share Data | ||||||
Net asset value at beginning of period | $10.37 | $10.22 | $10.29 | $10.09 | $9.90 | |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | 0.21 1 | 0.21 | 0.20 | 0.20 | 0.25 | |
Net realized and unrealized gains (losses) | (0.18) | 0.33 | (0.03) | 0.24 | 0.21 | |
Total from investment operations | 0.03 | 0.54 | 0.17 | 0.44 | 0.46 | |
Less distributions: | ||||||
Distributions from net investment income | (0.23) | (0.25) | (0.20) | (0.24) | (0.27) | |
Distributions from net realized gains | (0.22) | (0.14) | (0.04) | — | — | |
Total distributions | (0.45) | (0.39) | (0.24) | (0.24) | (0.27) | |
Net asset value at end of period | $9.95 | $10.37 | $10.22 | $10.29 | $10.09 | |
Total return | 0.22% | 5.29% | 1.66% | 4.43% | 4.70% | |
Ratios/Supplemental Data | ||||||
Ratios to average net assets: | ||||||
Net operating expenses2 | 0.00% 3,4 | — | — | 0.00% 4 | 0.00% 4 | |
Gross operating expenses2 | 0.23% | 0.22% | 0.21% | 0.19% | 0.17% | |
Net investment income (loss) | 2.01% | 2.05% | 1.96% | 1.99% | 2.53% | |
Portfolio turnover rate | 14% | 16% | 46% | 19% | 10% | |
Net assets, end of period (x 1,000,000) | $50 | $52 | $55 | $73 | $78 | |
Holdings by Category | Cost ($) | Value ($) | |
99.9% | Other Investment Companies | 49,307,339 | 50,239,088 |
99.9% | Total Investments | 49,307,339 | 50,239,088 |
0.1% | Other Assets and Liabilities, Net | 57,845 | |
100.0% | Net Assets | 50,296,933 |
Security | Number of Shares | Value ($) |
Other Investment Companies 99.9% of net assets | ||
Equity Funds 17.9% | ||
Global Real Estate 3.0% | ||
Schwab Global Real Estate Fund (a) | 214,934 | 1,519,583 |
International 4.5% | ||
Laudus International MarketMasters Fund, Select Shares (a) | 106,566 | 2,235,763 |
Security | Number of Shares | Value ($) |
Large-Cap 10.4% | ||
Schwab Dividend Equity Fund (a) | 365,623 | 5,246,685 |
9,002,031 | ||
Fixed-Income Funds 80.2% | ||
Intermediate-Term Bond 80.2% | ||
Schwab Intermediate-Term Bond Fund (a) | 1,595,729 | 16,116,866 |
Schwab Total Bond Market Fund (a) | 2,578,670 | 24,213,707 |
40,330,573 | ||
Money Market Fund 1.8% | ||
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.02% (b) | 906,484 | 906,484 |
Total Other Investment Companies | ||
(Cost $49,307,339) | 50,239,088 |
(a) | Issuer is affiliated with the fund's adviser. |
(b) | The rate shown is the 7-day yield. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||
Other Investment Companies1 | $50,239,088 | $— | $— | $50,239,088 | |||||
Total | $50,239,088 | $— | $— | $50,239,088 |
1 | As categorized in Portfolio Holdings. |
Assets | ||
Investments in affiliated underlying funds, at value (cost $48,400,855) | $49,332,604 | |
Investments in unaffiliated issuers, at value (cost $906,484) | + | 906,484 |
Total investments, at value (cost $49,307,339) | 50,239,088 | |
Receivables: | ||
Investments sold | 300,000 | |
Fund shares sold | 123,299 | |
Dividends | 71,678 | |
Due from investment adviser | 2,037 | |
Interest | 45 | |
Prepaid expenses | + | 2,426 |
Total assets | 50,738,573 | |
Liabilities | ||
Payables: | ||
Investments bought | 78,403 | |
Fund shares redeemed | 329,166 | |
Accrued expenses | + | 34,071 |
Total liabilities | 441,640 | |
Net Assets | ||
Total assets | 50,738,573 | |
Total liabilities | – | 441,640 |
Net assets | $50,296,933 | |
Net Assets by Source | ||
Capital received from investors | 48,902,156 | |
Net investment income not yet distributed | 2,321 | |
Net realized capital gains | 460,707 | |
Net unrealized capital appreciation | 931,749 |
Net Asset Value (NAV) | ||||
Net Assets | ÷ | Shares Outstanding | = | NAV |
$50,296,933 | 5,055,141 | $9.95 | ||
Investment Income | ||
Dividends received from affiliated underlying funds | $1,037,241 | |
Interest | + | 45 |
Total investment income | 1,037,286 | |
Expenses | ||
Professional fees | 32,207 | |
Transfer agent fees | 22,680 | |
Shareholder reports | 19,687 | |
Registration fees | 16,861 | |
Portfolio accounting fees | 12,858 | |
Independent trustees' fees | 7,079 | |
Proxy fees | 1,899 | |
Custodian fees | 1,330 | |
Other expenses | + | 1,649 |
Total expenses | 116,250 | |
Expense reduction by CSIM | – | 114,351 |
Net expenses | – | 1,899 |
Net investment income | 1,035,387 | |
Realized and Unrealized Gains (Losses) | ||
Realized capital gain distributions received from affiliated underlying funds | 749,643 | |
Net realized gains on sales of affiliated underlying funds | + | 435,310 |
Net realized gains | 1,184,953 | |
Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | (2,121,970) |
Net realized and unrealized losses | (937,017) | |
Increase in net assets resulting from operations | $98,370 |
Operations | |||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||
Net investment income | $1,035,387 | $1,118,743 | |
Net realized gains | 1,184,953 | 1,285,652 | |
Net change in unrealized appreciation (depreciation) | + | (2,121,970) | 390,696 |
Increase in net assets from operations | 98,370 | 2,795,091 | |
Distributions to Shareholders | |||
Distributions from net investment income | (1,139,558) | (1,274,514) | |
Distributions from net realized gains | + | (1,085,188) | (708,892) |
Total distributions | ($2,224,746) | ($1,983,406) |
Transactions in Fund Shares | |||||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||||
SHARES | VALUE | SHARES | VALUE | ||
Shares sold | 1,550,576 | $16,093,220 | 1,825,867 | $19,069,126 | |
Shares reinvested | 126,930 | 1,282,147 | 104,899 | 1,091,170 | |
Shares redeemed | + | (1,643,150) | (17,038,751) | (2,258,130) | (23,537,414) |
Net transactions in fund shares | 34,356 | $336,616 | (327,364) | ($3,377,118) | |
Shares Outstanding and Net Assets | |||||
1/1/15-12/31/15 | 1/1/14-12/31/14 | ||||
SHARES | NET ASSETS | SHARES | NET ASSETS | ||
Beginning of period | 5,020,785 | $52,086,693 | 5,348,149 | $54,652,126 | |
Total increase or decrease | + | 34,356 | (1,789,760) | (327,364) | (2,565,433) |
End of period | 5,055,141 | $50,296,933 | 5,020,785 | $52,086,693 | |
Net investment income not yet distributed | $2,321 | $2,181 |
Schwab Capital Trust (organized May 7, 1993) | Schwab MarketTrack Balanced Portfolio™ |
Schwab Monthly Income Fund-Moderate Payout | Schwab MarketTrack Conservative Portfolio™ |
Schwab Monthly Income Fund-Enhanced Payout | Laudus Small-Cap MarketMasters Fund™ |
Schwab Monthly Income Fund-Maximum Payout | Laudus International MarketMasters Fund™ |
Schwab Target 2010 Fund | Schwab Balanced Fund™ |
Schwab Target 2015 Fund | Schwab Core Equity Fund™ |
Schwab Target 2020 Fund | Schwab Dividend Equity Fund™ |
Schwab Target 2025 Fund | Schwab Large-Cap Growth Fund™ |
Schwab Target 2030 Fund | Schwab Small-Cap Equity Fund™ |
Schwab Target 2035 Fund | Schwab Hedged Equity Fund™ |
Schwab Target 2040 Fund | Schwab Financial Services Fund™ |
Schwab Target 2045 Fund | Schwab Health Care Fund™ |
Schwab Target 2050 Fund | Schwab ® International Core Equity Fund |
Schwab Target 2055 Fund | Schwab Fundamental US Large Company Index Fund |
Schwab ® S&P 500 Index Fund | Schwab Fundamental US Small Company Index Fund |
Schwab Small-Cap Index Fund® | Schwab Fundamental International Large Company Index Fund |
Schwab Total Stock Market Index Fund® | Schwab Fundamental International Small Company Index Fund |
Schwab International Index Fund® | Schwab Fundamental Emerging Markets Large Company Index Fund |
Schwab MarketTrack All Equity Portfolio™ | Schwab Fundamental Global Real Estate Index Fund |
Schwab MarketTrack Growth Portfolio™ |
Underlying Funds | Schwab Monthly Income Fund - Moderate Payout | Schwab Monthly Income Fund - Enhanced Payout | Schwab Monthly Income Fund - Maximum Payout | |||
Schwab Global Real Estate Fund | 1.4% | 1.9% | 0.6% | |||
Laudus International MarketMasters Fund, Select Shares | 0.3% | 0.4% | 0.1% | |||
Schwab Dividend Equity Fund | 0.8% | 1.0% | 0.3% | |||
Schwab Intermediate-Term Bond Fund | 2.8% | 7.4% | 4.7% | |||
Schwab Total Bond Market Fund | 1.1% | 2.8% | 1.8% |
Underlying Funds | Balance of Shares Held at 12/31/14 | Gross Purchases | Gross Sales | Balance of Shares Held at 12/31/15 | Market Value at 12/31/15 | Realized Gains (Losses) 01/01/15 to 12/31/15 | Distributions Received* 01/01/15 to 12/31/15 | |||||||
Schwab Global Real Estate Fund | 486,429 | 91,869 | (69,224) | 509,074 | $3,599,152 | $64,073 | $110,013 | |||||||
Laudus International MarketMasters Fund, Select Shares | 260,785 | 55,708 | (44,526) | 271,967 | 5,705,873 | 102,674 | 404,098 | |||||||
Schwab Dividend Equity Fund | 838,758 | 226,719 | (119,538) | 945,939 | 13,574,225 | 125,851 | 1,744,405 | |||||||
Schwab Intermediate-Term Bond Fund | 967,225 | 138,701 | (147,662) | 958,264 | 9,678,465 | 63,140 | 209,848 | |||||||
Schwab Total Bond Market Fund | 1,500,179 | 264,149 | (217,435) | 1,546,893 | 14,525,325 | 89,745 | 326,493 | |||||||
Total | $47,083,040 | $445,483 | $2,794,857 |
Underlying Funds | Balance of Shares Held at 12/31/14 | Gross Purchases | Gross Sales | Balance of Shares Held at 12/31/15 | Market Value at 12/31/15 | Realized Gains (Losses) 01/01/15 to 12/31/15 | Distributions Received* 01/01/15 to 12/31/15 | |||||||
Schwab Global Real Estate Fund | 665,588 | 140,001 | (87,974) | 717,615 | $5,073,540 | $93,468 | $150,353 | |||||||
Laudus International MarketMasters Fund, Select Shares | 356,639 | 84,749 | (66,000) | 375,388 | 7,875,644 | 126,420 | 560,006 | |||||||
Schwab Dividend Equity Fund | 1,165,335 | 325,271 | (189,601) | 1,301,005 | 18,669,416 | 312,956 | 2,404,145 | |||||||
Schwab Intermediate-Term Bond Fund | 2,505,461 | 249,852 | (251,426) | 2,503,887 | 25,289,254 | 124,593 | 540,190 | |||||||
Schwab Total Bond Market Fund | 3,920,352 | 463,789 | (342,094) | 4,042,047 | 37,954,823 | 186,975 | 840,550 | |||||||
Total | $94,862,677 | $844,412 | $4,495,244 |
Underlying Funds | Balance of Shares Held at 12/31/14 | Gross Purchases | Gross Sales | Balance of Shares Held at 12/31/15 | Market Value at 12/31/15 | Realized Gains (Losses) 01/01/15 to 12/31/15 | Distributions Received* 01/01/15 to 12/31/15 | |||||||
Schwab Global Real Estate Fund | 191,157 | 68,103 | (44,326) | 214,934 | $1,519,583 | $66,354 | $43,777 | |||||||
Laudus International MarketMasters Fund, Select Shares | 101,732 | 36,874 | (32,040) | 106,566 | 2,235,763 | 28,906 | 167,787 | |||||||
Schwab Dividend Equity Fund | 348,334 | 105,590 | (88,301) | 365,623 | 5,246,685 | 141,055 | 689,005 | |||||||
Schwab Intermediate-Term Bond Fund | 1,642,903 | 149,109 | (196,283) | 1,595,729 | 16,116,866 | 90,733 | 346,792 | |||||||
Schwab Total Bond Market Fund | 2,580,539 | 267,641 | (269,510) | 2,578,670 | 24,213,707 | 108,262 | 539,523 | |||||||
Total | $49,332,604 | $435,310 | $1,786,884 |
* | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Purchases of Securities | Sales/Maturities of Securities | ||
Schwab Monthly Income Fund - Moderate Payout | $9,316,907 | $7,060,000 | |
Schwab Monthly Income Fund - Enhanced Payout | 14,866,824 | 11,089,000 | |
Schwab Monthly Income Fund - Maximum Payout | 7,031,678 | 7,066,000 |
Schwab Monthly Income Fund - Moderate Payout | Schwab Monthly Income Fund - Enhanced Payout | Schwab Monthly Income Fund - Maximum Payout | |||
Undistributed ordinary income | $21,645 | $2,156 | $15,412 | ||
Undistributed long-term capital gains | 1,550,221 | 2,023,458 | 689,373 | ||
Unrealized appreciation on investments | 706,128 | 2,129,538 | 779,090 | ||
Unrealized depreciation on investments | (1,273,341) | (429,838) | (89,098) | ||
Net unrealized appreciation (depreciation) | ($567,213) | $1,699,700 | $689,992 |
Schwab Monthly Income Fund - Moderate Payout | Schwab Monthly Income Fund - Enhanced Payout | Schwab Monthly Income Fund - Maximum Payout | |||
Capital loss carryforwards utilized | $— | $890,822 | $— |
Schwab Monthly Income Fund - Moderate Payout | Schwab Monthly Income Fund - Enhanced Payout | Schwab Monthly Income Fund - Maximum Payout | |||
Current period distributions | |||||
Ordinary income | $1,417,238 | $2,335,165 | $1,200,377 | ||
Long-term capital gains | 1,813,645 | — | 1,024,369 | ||
Return of capital | — | — | — | ||
Prior period distributions | |||||
Ordinary income | $1,640,304 | $2,425,908 | $1,420,817 | ||
Long-term capital gains | 916,848 | — | 562,589 | ||
Return of capital | — | — | — |
Schwab Monthly Income Fund - Moderate Payout | Schwab Monthly Income Fund - Enhanced Payout | Schwab Monthly Income Fund - Maximum Payout | |||
Capital shares | $— | $— | $— | ||
Undistributed net investment income | 256,947 | 357,133 | 104,311 | ||
Net realized capital gains (losses) | (256,947) | (357,133) | (104,311) |
Schwab Monthly Income Fund—Moderate Payout
Schwab Monthly Income Fund—Enhanced Payout
Schwab Monthly Income Fund—Maximum Payout
San Francisco, California
February 16, 2016
Percentage | |
Schwab Monthly Income Fund - Moderate Payout | 28.07 |
Schwab Monthly Income Fund - Enhanced Payout | 23.31 |
Schwab Monthly Income Fund - Maximum Payout | 12.88 |
Schwab Monthly Income Fund - Moderate Payout | $504,407 |
Schwab Monthly Income Fund - Enhanced Payout | 692,124 |
Schwab Monthly Income Fund - Maximum Payout | 198,573 |
Schwab Monthly Income Fund - Moderate Payout | $1,813,645 |
Schwab Monthly Income Fund - Enhanced Payout | — |
Schwab Monthly Income Fund - Maximum Payout | 1,024,369 |
Proposal – To elect each of the following individuals as trustees of the Trust: | For | Withheld | ||
Walter W. Bettinger II | 1,781,628,338.445 | 341,201,457.803 | ||
Marie A. Chandoha | 2,069,741,484.184 | 53,088,312.064 | ||
Joseph R. Martinetto | 2,070,394,888.403 | 52,434,907.845 | ||
Robert W. Burns | 2,070,083,106.758 | 52,746,689.490 | ||
John F. Cogan | 1,909,915,620.213 | 212,914,176.035 | ||
Stephen T. Kochis | 2,067,778,859.342 | 55,050,936.906 | ||
David L. Mahoney | 2,068,011,019.030 | 54,818,777.218 | ||
Kiran M. Patel | 2,066,263,491.520 | 56,566,304.728 | ||
Kimberly S. Patmore | 2,069,034,220.641 | 53,795,575.607 | ||
Charles A. Ruffel | 2,070,448,922.775 | 52,380,873.473 | ||
Gerald B. Smith | 2,069,060,923.296 | 53,768,872.952 | ||
Joseph H. Wender | 2,065,502,834.216 | 57,326,962.032 |
Independent Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009;The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | Retired/Private Investor (Jan. 2009 – present); Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds. | 96 | Director, PS Business Parks, Inc. (2005 – 2012). |
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010; Schwab Strategic Trust since 2016) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow Stanford Institute for Economic Policy Research (2000 – present); Professor of Public Policy, Stanford University (1994 – 2015). | 96 | Director, Gilead Sciences, Inc. (2005 – present) |
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016) | CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant, LLC (wealth management) (Jan. 2008 – April 2012). | 96 | None |
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 96 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011; Schwab Strategic Trust since 2016) | Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 – Sept. 2013) | 96 | Director, KLA-Tencor Corporation (2008 – present) |
Independent Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust, and Laudus Trust since 2016) | Consultant, Patmore Management Consulting (management consulting) (2008 – present). | 96 | None |
Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2015) | Co-Chief Executive Officer, Kudu Investment Management, LLC (financial services) (Jan. 2015 – present); Partner, Kudu Advisors, LLC (financial services) (June 2008 – Jan. 2015); Advisor, Asset International, Inc. (publisher of financial services information) (Aug. 2008 – Jan. 2015). | 96 | None |
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust and Laudus Institutional Trust since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 96 | Director, Eaton (2012 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – 2013) Director, Oneok, Inc. (2009 – 2013) Lead Independent Director, Board of Cooper Industries (2002 – 2012) |
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010; Schwab Strategic Trust since 2016) | Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 – present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 – present). | 96 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Interested Trustees | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Walter W. Bettinger II2 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer, The Charles Schwab Corporation (Oct. 2008 – present); President and Chief Executive Officer (Oct. 2008 – present), Director (May 2008 – present), Charles Schwab & Co., Inc.; Director, Charles Schwab Bank (Apr. 2006 – present); and Director, Schwab Holdings, Inc. (May 2008 – present). | 96 | Director, The Charles Schwab Corporation (2008 – present) |
Interested Trustees (continued) | |||
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served1) | Principal Occupations During the Past Five Years | Number of Portfolios in Fund Complex Overseen by the Trustee | Other Directorships |
Marie A. Chandoha2 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust, and Laudus Trust since 2016) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – Aug. 2010). | 96 | None |
Joseph R. Martinetto2 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust, and Laudus Trust since 2016) | Senior Executive Vice President and Chief Financial Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (July 2015 – present); Executive Vice President and Chief Financial Officer of The Charles Schwab Corporation and Charles Schwab & Co., Inc. (May 2007 – July 2015); Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director, Executive Vice President and Chief Financial Officer, Schwab Holdings, Inc. (May 2007 – present). | 96 | None |
Officers of the Trust | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust since 2010) | Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; Trustee (Jan. 2016 – present), President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Director, Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited (Jan. 2011 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – Aug. 2010). |
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust since 2013) | Treasurer and Chief Financial Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Jan. 2016 – present); Assistant Treasurer, Schwab Funds and Laudus Funds (Dec. 2013 – Dec. 2015), Schwab ETFs (Nov. 2013 – Dec. 2015); Vice President, Charles Schwab Investment Management, Inc. (Oct. 2013 – present); Executive Director, J.P. Morgan Investor Services (Apr. 2011 – Sept. 2013); Assistant Treasurer, Massachusetts Financial Service Investment Management (May 2005 – Mar. 2011). |
Officers of the Trust (continued) | |
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust and Laudus Institutional Trust since 2006; Schwab Strategic Trust since 2009) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – Dec. 2015); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – Dec. 2015) and Schwab ETFs (Oct. 2009 – Dec. 2015); Director, Charles Schwab Worldwide Funds, plc and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present). |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Equities, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds, Laudus Funds and Schwab ETFs (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008). |
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (March 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present), Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs. |
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2005; Schwab Strategic Trust since 2009) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present). |
1 | Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first. |
2 | Mr. Bettinger, Ms. Chandoha, and Mr. Martinetto are Interested Trustees because they own stock of The Charles Schwab Corporation, the parent company of the investment adviser. |
3 | The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
THIS IS NOT PART OF THE SHAREHOLDER REPORT
INFORMATION.
INFORMATION.
Partnership
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity Fund™
Schwab Financial Services Fund™
Schwab Health Care Fund™
Schwab® International Core Equity Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund
Schwab Fundamental Emerging Markets Large Company Index Fund
Schwab Fundamental Global Real Estate Index Fund
Schwab Global Real Estate 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®
Schwab MarketTrack All Equity Portfolio™
Schwab MarketTrack Growth Portfolio™
Schwab MarketTrack Balanced Portfolio™
Schwab MarketTrack Conservative Portfolio™
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Schwab Intermediate-Term Bond Fund™
Schwab Total Bond Market Fund™
Schwab GNMA Fund™
Schwab® Treasury Inflation Protected Securities Index Fund
Schwab Tax-Free Bond Fund™
Schwab California Tax-Free Bond Fund™
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 many seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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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 Kiran Patel, currently serving on its audit committee, is an “audit committee financial expert,” as such term is defined in Item 3 of Form N-CSR. Each member of Registrant’s audit committee is “independent” under the standards set forth in Item 3 of Form N-CSR.
The designation of Mr. Patel as an “audit committee financial expert” pursuant to Item 3 of Form N-CSR does not (i) impose upon such individual any duties, obligations, or liability that are greater than the duties, obligations and liability imposed upon such individual as a member of Registrant’s audit committee or Board of Trustees in the absence of such designation; and (ii) affect the duties, obligations or liability of any other member of Registrant’s audit committee or Board of Trustees.
Item 4: Principal Accountant Fees and Services.
Registrant is composed of thirty-eight series. Three series have a fiscal year-end of December 31, whose annual financial statements are reported in Item 1, thirty-four series have a fiscal year-end of October 31, and one series has a fiscal year-end of February 28. Principal accountant fees disclosed in Items 4(a)-(d) and 4(g) include fees billed for services rendered to the thirty-eight series live during 2015 and 2014, based on their respective 2015 and 2014 fiscal years, as applicable.
The following table presents fees billed by the principal accountant in each of the last two fiscal years for the services rendered to the Funds:
(a) Audit Fees | (b)Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees3 | |||||||||||||||||||||||||
Fiscal Year 2015 | Fiscal Year 2014 | Fiscal Year 2015 | Fiscal Year 2014 | Fiscal Year 2015 | Fiscal Year 2014 | Fiscal Year 2015 | Fiscal Year 2014 | |||||||||||||||||||||
$1,275,248 | $ | 1,390,778 | $ | 0 | $ | 0 | $ | 126,645 | $ | 99,131 | $ | 12,838 | $ | 19,357 |
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1 | The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees. |
2 | The nature of the services includes tax compliance, tax advice and tax planning. |
3 | The nature of the services include agreed upon procedures relating to Charles Schwab Investment Management., Inc.’s, (“CSIM”) expenses for purposes of Section 15(c) of the Investment Company Act of 1940. |
(e) (1) | Registrant’s audit committee does not have pre-approval policies and procedures as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
(2) | There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by Registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
(f) Not applicable.
(g) Below are the aggregate non-audit fees billed in each of the last two fiscal years by Registrant’s principal accountant for services rendered to Registrant, to Registrant’s investment adviser, and to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant.
2015: $139,483 2014: $118,488
Although not required to be included in the amounts disclosed under this paragraph (g) or any other paragraph of this Item 4, below are the aggregate fees billed in each of the last two fiscal years by Registrant’s principal accountant for tax compliance services rendered to U.S. Trust, an entity under common control with Registrant’s investment adviser that does not provide services to Registrant.
(h) | During the past fiscal year, all non-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant were pre-approved. Included in the audit committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence. |
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
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Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
(a) | Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Marie Chandoha and Registrant’s Principal Financial Officer, George Pereira, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. |
(b) | During the second fiscal quarter of the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting. |
Item 12: Exhibits.
(a) | (1) | Registrant’s code of ethics (that is the subject of the disclosure required by Item 2(a)) is attached. | ||
(2) | Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. | |||
(3) | Not applicable. | |||
(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 |
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furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSR with the Commission. |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Capital Trust
By: | /s/ Marie Chandoha | |
Marie Chandoha | ||
Chief Executive Officer | ||
Date: | 02/09/2016 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Marie Chandoha | |
Marie Chandoha | ||
Chief Executive Officer | ||
Date: | 02/09/2016 | |
By: | /s/ George Pereira | |
George Pereira | ||
Principal Financial Officer | ||
Date: | 02/09/2016 |