UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
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: October 31
Date of reporting period: April 30, 2017
Item 1: Report(s) to Shareholders.
Semiannual Report | April 30, 2017
Schwab Equity Index Funds
Schwab® S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market
Index Fund®
Schwab International
Index Fund®
This page is intentionally left blank.
Five cost-efficient ways to tap into the power of the stock market for long-term growth potential.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS), which was developed by, and is the exclusive property of, MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Schwab. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
| Total Return for the 6 Months Ended April 30, 2017 |
| Schwab S&P 500 Index Fund (Ticker Symbol: SWPPX) | 13.28% |
| S&P 500® Index | 13.32% |
| Fund Category: Morningstar Large Blend | 12.90% |
| Performance Details | pages 9-10 |
| |
| Schwab 1000 Index Fund (Ticker Symbol: SNXFX) | 13.30% |
| Schwab 1000 Index® | 13.40% |
| Fund Category: Morningstar Large Blend | 12.90% |
| Performance Details | pages 11-12 |
| |
| Schwab Small-Cap Index Fund (Ticker Symbol: SWSSX) | 18.37% |
| Russell 2000® Index | 18.37% |
| Fund Category: Morningstar Small Blend | 16.89% |
| Performance Details | pages 13-14 |
| |
| Schwab Total Stock Market Index Fund (Ticker Symbol: SWTSX) | 13.79% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% |
| Fund Category: Morningstar Large Blend | 12.90% |
| Performance Details | pages 15-16 |
| |
| Schwab International Index Fund1 (Ticker Symbol: SWISX) | 11.57% |
| MSCI EAFE® Index (Net)2 | 11.47% |
| Fund Category: Morningstar Foreign Large Blend | 10.65% |
| Performance Details | pages 17-18 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
| 1 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations. See financial note 2 for more information. |
| 2 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.
Dear Shareholder,
At Charles Schwab Investment Management, we know that expenses matter. We’re focused on helping our investors achieve their financial goals, and one of the biggest ways that we can help with this is by keeping investing costs down. That’s because even small reductions in expenses can have a large impact on a portfolio’s long-term return potential.
Since our last shareholder report, you may have noticed that effective March 1, 2017, we lowered the expense ratios and eliminated investment minimums on our market cap index mutual funds, including all of the Schwab Equity Index Funds. This was a big step in leveling the playing field for even the smallest investors, as the industry typically reserves costs this low for only the largest institutions. It also follows similar reductions we instituted on five of our most popular exchange-traded funds (ETFs) in recent months. We’re proud that these latest expense reductions give us among the lowest-cost market cap index mutual funds and ETFs available in the industry today.
In addition to our mission to keep your investing costs down, we are also committed to ensuring that our index funds track the performance of their underlying indexes. Just as higher expenses can erode your earning potential, so can tracking difference (the difference between the return of an index fund
Asset Class Performance Comparison % returns during the six months ended 4/30/2017
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
From the President (continued)
“ For the six-month reporting period ended April 30, 2017, I’m happy to report that all five of the Schwab Equity Index Funds generated double-digit gains that tracked the returns of their respective indexes.”
and that of its underlying index). For the six-month reporting period ended April 30, 2017, I’m happy to report that all five of the Schwab Equity Index Funds generated double-digit gains that tracked the returns of their respective indexes.
As one of the largest providers of index mutual funds, it’s important that we deliver on both cost and performance. That’s why we continue to look for ways to not only further modernize the index investing landscape, but to share with you, our investors, the benefits of our scale and efficiency whenever and wherever we can.
Thank you for investing with Charles Schwab Investment Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab Equity Index Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.csimfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
The Investment Environment
Over the six-month reporting period ended April 30, 2017, both U.S. and international equity markets generated positive returns. The Dow Jones Industrial Average closed above 20,000 for the first time in January (and continued its climb to close above 21,000 in March), and the current bull market for U.S. stocks entered its eighth year. Meanwhile, improving global growth and continued accommodative central bank policies supported the performance of many international equities. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 13.32%, while the Russell 2000® Index, a U.S. small-cap company measure, returned 18.37% for the reporting period. Internationally, the MSCI EAFE® Index (Net), a broad measure of international developed equity performance, returned 11.47% for the same time period.
Market volatility generally eased over the reporting period, though fluctuations tied to elections in both the U.S. and abroad occurred during the six months. In the U.S., election-related volatility picked up in the weeks leading up to the U.S. presidential election and continued after Election Day. U.S. equity futures dropped sharply soon after the election results were announced, then rebounded almost immediately the following day and generally maintained an upward trajectory throughout most of the reporting period. This rally was fueled by investor expectations for reflationary policies from the Trump administration, including increased fiscal spending, tax reform, and reduced financial regulation. Traditionally cyclical sectors in particular, such as Information Technology, especially benefitted from these investor expectations. However, lack of progress in certain of the Trump administration’s policies increased uncertainty and contributed to muted stock market gains in the last months of the reporting period. Meanwhile, political uncertainty in the eurozone, including elections in the Netherlands and France, also contributed to overseas market volatility. In mid-March, center-right Dutch Prime Minister Mark Rutte beat far-right candidate Geert Wilders, while the race between front-runners Emmanuel Macron and Marine Le Pen in France was closer than many expected in the first round of voting. (Macron was elected to the French presidency in the run-off election the week following the end of the reporting period.)
The Federal Reserve (Fed) and the People’s Bank of China (PBOC) tightened monetary policies over the reporting period, while many other central banks maintained or increased accommodative policies. With improvements in several key U.S. economic measures and an uptick in inflation, the Fed raised the federal funds rate twice over the reporting period, first in December 2016 and again in March 2017. Market responses to these changes were muted as both increases were largely already priced into global equity markets. In China, prior accommodative measures led to credit expanding at twice the rate of economic growth, prompting the PBOC to take steps to address this imbalance and reduce long-term financial risk. Meanwhile, the European Central Bank extended its asset purchase program to at least December 2017 and announced it was loosening the restrictions on the types of bonds it is allowed to purchase. The Bank of Japan maintained negative interest rates, quantitative easing, and yield curve management over the six-month reporting period. The positive performance of many international equities and improvement in the global economic outlook over the reporting period suggested that these policies were achieving their intended results, effectively stimulating economic growth in both the eurozone and in Japan.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
The Investment Environment (continued)
U.S. economic data remained relatively steady compared to prior reporting periods. However, the spread between “hard” data, such as quarterly gross domestic product (GDP) numbers, and “soft” data, like consumer confidence and sentiment indexes, widened over the reporting period. Nonfarm payroll numbers were generally in line with expectations through February, fell noticeably in March, and then rebounded in April. GDP dropped to an annual rate of 2.1% in the fourth quarter of 2016 and fell even further in the first quarter of 2017, indicating a persistently moderate growth outlook. In contrast, consumer confidence rose after the November election of President Trump through the end of the reporting period, reaching its highest level since December 2000 in March. According to the National Federation of Independent Business (NFIB) Small Business Economic Trends Report, small business optimism also surged after Election Day and throughout the reporting period.
Overall global economic growth generally improved over the six-month reporting period. Eurozone economic activity picked up in both the fourth quarter of 2016 and the first quarter of 2017, and the entire eurozone bloc exited deflation by the end of January 2017. Meanwhile, the United Kingdom economy performed better than expected in the months following the decision in June 2016 to leave the European Union (Brexit) as progress toward an exit plan was made. In Japan, economic growth accelerated and consumer prices fell at a slower pace, with inflation on track to hit the target of 2% in the next two years, while rising inflation and decreasing lending costs in China contributed to a relatively stable economy over the reporting period.
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
 | Christopher Bliss, CFA, Vice President and Head of the Passive Equity Team, leads the portfolio management team for Schwab’s Passive Equity Funds and ETFs. He also has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2016, Mr. Bliss spent 12 years at BlackRock (formerly Barclays Global Investors) managing and leading institutional index teams, most recently as a Managing Director and Head of Americas Institutional Index team. Prior to BlackRock, he worked as an equity analyst and portfolio manager for Harris Bretall and before that, as a research analyst for JP Morgan. |
 | Chuck Craig, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab International Index Fund. Prior to joining CSIM in 2012, Mr. Craig worked at Guggenheim Funds (formerly Claymore Group), where he spent more than five years as a managing director of portfolio management and supervision, and three years as vice president of product research and development. Prior to that, he worked as an equity research analyst at First Trust Portfolios (formerly Niké Securities), and a trader and analyst at PMA Securities, Inc. |
 | Ferian Juwono, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the funds, except for the Schwab International Index Fund. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent more than three years as a portfolio manager, managing equity index funds for institutional clients, and nearly two years as a senior business analyst. Prior to that, Mr. Juwono worked for more than four years as a senior financial analyst with Union Bank of California. |
 | Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab International Index Fund. Prior to joining CSIM in 2012, Ms. Qin spent more than four years at The Bank of New York Mellon Corporation. During that time, Ms. Qin spent more than two years as an associate equity portfolio manager and nearly two years as a performance analyst. She also worked at Wells Fargo Funds Management as a mutual fund analyst and at CIGNA Reinsurance in Risk Management group as a risk analyst. |
 | David Rios, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab International Index Fund. He joined CSIM in 2008 and became a Portfolio Manager in September 2014. Prior to this role, Mr. Rios served as an Associate Portfolio Manager on the Schwab Equity Index Strategies team for four years. His first role with CSIM was as a trade operation specialist. He also previously worked as a senior fund accountant at Investors Bank & Trust (subsequently acquired by State Street Corporation). |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Fund Management (continued)
 | Sabya Sinha, Portfolio Manager, is responsible for the day-to-day co-management of the funds, except for the Schwab International Index Fund. Prior to joining CSIM in 2015, Mr. Sinha spent a year at F-Squared Investments on the product development and analytics team. Prior to F-Squared, he worked at IndexIQ Advisors as a senior index portfolio manager for three years and for Bank of America’s Columbia Management subsidiary as a portfolio manager for three years. |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab S&P 500 Index Fund (5/19/97) | 13.28% | 17.83% | 13.57% | 7.11% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Fund Category: Morningstar Large Blend3 | 12.90% | 16.53% | 12.14% | 6.19% |
| Fund Expense Ratio4: 0.03% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership – “Standard & Poor’s®,” “S&P®,” and “S&P 500®” are registered trademarks of Standard & Poor’s Financial Services LLC (S&P), and “Dow Jones®” is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones) and have been licensed for use by S& P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by Charles Schwab Investment Management, Inc. (CSIM). The “S&P 500® Index” is a product of S&P Dow Jones Indices LLC or its affiliates, and has been licensed for use by CSIM. The Schwab S&P 500 Index Fund is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates, and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, nor their respective affiliates make any representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On September 9, 2009, the Investor Share class, Select Share class and e.Shares class were combined into a single class of shares of the fund. The performance history of the fund prior to September 9, 2009 is that of the fund’s former Select Shares. On September 9, 2009, the Schwab Institutional Select S&P 500 Fund merged into the fund. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 508 |
| Weighted Average Market Cap (millions) | $166,980 |
| Price/Earnings Ratio (P/E) | 21.2 |
| Price/Book Ratio (P/B) | 3.0 |
| Portfolio Turnover Rate1 | 1% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Equity Index Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab 1000 Index Fund (4/2/91) | 13.30% | 17.87% | 13.22% | 7.01% |
| Schwab 1000 Index® | 13.40% | 18.06% | 13.51% | 7.28% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Fund Category: Morningstar Large Blend3 | 12.90% | 16.53% | 12.14% | 6.19% |
| Fund Expense Ratio4: 0.05% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On September 18, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 18, 2009 is that of the fund’s former Investor Shares. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. |
Schwab Equity Index Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 942 1 |
| Weighted Average Market Cap (millions) | $150,068 |
| Price/Earnings Ratio (P/E) | 21.3 |
| Price/Book Ratio (P/B) | 2.9 |
| Portfolio Turnover Rate2 | 2% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets3
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
| 1 | As a result of the Schwab 1000 Index’s once per year reconstitution and the effects of certain corporate actions, the fund may hold less than 1,000 securities. |
| 2 | Not annualized. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Small-Cap Index Fund (5/19/97) | 18.37% | 25.63% | 12.98% | 7.79% |
| Russell 2000® Index | 18.37% | 25.63% | 12.95% | 7.05% |
| Small-Cap Spliced Index | 18.37% | 25.63% | 12.95% | 7.85% |
| Fund Category: Morningstar Small Blend3 | 16.89% | 21.71% | 11.76% | 6.45% |
| Fund Expense Ratio4: 0.05% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership – “Russell 2000®” is a registered mark of the Frank Russell Company (Russell) and has been licensed for use by the Schwab Small-Cap Index Fund. The Schwab Small-Cap Index Fund is not sponsored, endorsed, sold or promoted by Russell and Russell makes no representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On August 21, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to August 21, 2009 is that of the fund’s former Select Shares. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the March 1, 2017 prospectus supplement. |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 1,928 |
| Weighted Average Market Cap (millions) | $2,295 |
| Price/Earnings Ratio (P/E) | 22.4 |
| Price/Book Ratio (P/B) | 2.2 |
| Portfolio Turnover Rate1 | 1% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Total Stock Market Index Fund (6/1/99) | 13.79% | 18.54% | 13.45% | 7.38% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 13.49% | 7.32% |
| Fund Category: Morningstar Large Blend3 | 12.90% | 16.53% | 12.14% | 6.19% |
| Fund Expense Ratio4: 0.03% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership – “Dow Jones®” is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones) and has been licensed for use by S& P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by Charles Schwab Investment Management, Inc. (CSIM). The “Dow Jones U.S. Total Stock Market IndexSM” is a product of S&P Dow Jones Indices LLC or its affiliates, and has been licensed for use by CSIM. The Schwab Total Stock Market Index Fund is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates, and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, nor their respective affiliates make any representation regarding the advisability of investing in the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On September 18, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 18, 2009 is that of the fund’s former Select Shares. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 2,353 |
| Weighted Average Market Cap (millions) | $138,082 |
| Price/Earnings Ratio (P/E) | 21.3 |
| Price/Book Ratio (P/B) | 2.8 |
| Portfolio Turnover Rate1 | 1% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab International Index Fund (5/19/97) | 11.57% | 12.40% | 6.75% | 1.16% |
| MSCI EAFE® Index (Net)3 | 11.47% | 11.29% | 6.78% | 0.87% |
| International Spliced Index | 11.47% | 11.29% | 6.85% | 1.21% |
| Fund Category: Morningstar Foreign Large Blend4 | 10.65% | 12.00% | 5.94% | 0.90% |
| Fund Expense Ratio5: 0.06% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Index ownership – “MSCI EAFE” is a registered mark of MSCI and has been licensed for use by the Schwab International Index Fund. The Schwab International Index Fund is not sponsored, endorsed, sold or promoted by MSCI and MSCI bears no liability with respect to the fund. The Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with the fund.
| 1 | Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On August 21, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to August 21, 2009 is that of the fund’s former Select Shares. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the March 1, 2017 prospectus supplement. |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 947 |
| Weighted Average Market Cap (millions) | $57,341 |
| Price/Earnings Ratio (P/E) | 17.9 |
| Price/Book Ratio (P/B) | 1.6 |
| Portfolio Turnover Rate1 | 1% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning November 1, 2016 and held through April 30, 2017.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, or any non-routine expenses, such as proxy fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs or non-routine expenses were included, your costs would have been higher.
| | Expense Ratio
(Annualized)1 | Beginning
Account Value
at 11/1/16 | Ending
Account Value
(Net of Expenses)
at 4/30/17 | Expenses Paid
During Period
11/1/16-4/30/172 |
| Schwab S&P 500 Index Fund | | | | |
| Actual Return | 0.07% | $1,000.00 | $1,132.80 | $0.37 |
| Hypothetical 5% Return | 0.07% | $1,000.00 | $1,024.45 | $0.35 |
| Schwab 1000 Index Fund | | | | |
| Actual Return | 0.21% | $1,000.00 | $1,133.00 | $1.11 |
| Hypothetical 5% Return | 0.21% | $1,000.00 | $1,023.76 | $1.05 |
| Schwab Small-Cap Index Fund | | | | |
| Actual Return | 0.13% | $1,000.00 | $1,183.70 | $0.70 |
| Hypothetical 5% Return | 0.13% | $1,000.00 | $1,024.16 | $0.65 |
| Schwab Total Stock Market Index Fund | | | | |
| Actual Return | 0.07% | $1,000.00 | $1,137.90 | $0.37 |
| Hypothetical 5% Return | 0.07% | $1,000.00 | $1,024.45 | $0.35 |
| Schwab International Index Fund | | | | |
| Actual Return | 0.14% | $1,000.00 | $1,115.70 | $0.73 |
| Hypothetical 5% Return | 0.14% | $1,000.00 | $1,024.11 | $0.70 |
| 1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. Effective March 1, 2017, the funds changed to a unitary fee structure. Under the new unitary fee structure the advisory fees changed to 0.03%, 0.05%, 0.05%, 0.03% and 0.06% for Schwab S&P 500 Index Fund, Schwab 1000 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund, respectively. If the fund expense changes had been in place throughout the entire most recent fiscal half-year, the expenses paid during the period under the actual return and hypothetical 5% return example would have been the following; Schwab S&P 500 Index Fund, $0.16 and $0.15, respectively, Schwab 1000 Index Fund, $0.26 and $0.25, respectively, Schwab Small-Cap Index Fund, $0.27 and $0.25, respectively, Schwab Total Stock Market Index Fund, $0.16 and $0.15, respectively, and for Schwab International Index Fund, $0.31 and $0.30, respectively. (See financial note 4) |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by the 365 days of the fiscal year. |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $33.38 | $33.00 | $31.99 | $27.78 | $22.35 | $19.82 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.36 1 | 0.69 1 | 0.67 1 | 0.56 | 0.52 | 0.44 |
| Net realized and unrealized gains (losses) | 4.02 | 0.69 | 0.92 | 4.13 | 5.40 | 2.49 |
| Total from investment operations | 4.38 | 1.38 | 1.59 | 4.69 | 5.92 | 2.93 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.69) | (0.68) | (0.58) | (0.48) | (0.49) | (0.40) |
| Distributions from net realized gains | (0.19) | (0.32) | — | — | — | — |
| Total distributions | (0.88) | (1.00) | (0.58) | (0.48) | (0.49) | (0.40) |
| Net asset value at end of period | $36.88 | $33.38 | $33.00 | $31.99 | $27.78 | $22.35 |
| Total return | 13.28% 2 | 4.40% | 5.10% | 17.16% | 27.06% | 15.09% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.07% 3,4 | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% |
| Gross operating expenses | 0.07% 3,4 | 0.09% | 0.09% | 0.09% | 0.09% | 0.10% |
| Net investment income (loss) | 2.05% 3 | 2.12% | 2.07% | 1.89% | 2.10% | 2.09% |
| Portfolio turnover rate | 1% 2 | 2% | 2% | 2% | 1% | 2% |
| Net assets, end of period (x 1,000,000) | $26,579 | $22,675 | $21,587 | $20,473 | $17,121 | $12,687 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Effective March 1, 2017, the fund changed to a unitary fee structure and the annual operating expense was reduced. The ratio presented for period ended 4/30/17 is a blended ratio. (See financial note 4)
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.3% | Common Stock | 14,080,322,208 | 26,386,267,205 |
| 0.0% | Other Investment Company | 4,719,058 | 4,719,058 |
| 1.2% | Short-Term Investments | 313,506,445 | 313,506,445 |
| 100.5% | Total Investments | 14,398,547,711 | 26,704,492,708 |
| (0.5%) | Other Assets and Liabilities, Net | | (125,550,848) |
| 100.0% | Net Assets | | 26,578,941,860 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 99.3% of net assets | |
| |
| Automobiles & Components 0.7% | |
| Other Securities | | 0.7 | 182,487,182 |
| |
| Banks 6.3% | |
| Bank of America Corp. | 12,922,211 | 1.1 | 301,604,405 |
| Citigroup, Inc. | 3,573,847 | 0.8 | 211,285,835 |
| JPMorgan Chase & Co. | 4,604,231 | 1.5 | 400,568,097 |
| Wells Fargo & Co. | 5,805,009 | 1.2 | 312,541,685 |
| Other Securities | | 1.7 | 437,111,144 |
| | | 6.3 | 1,663,111,166 |
| |
| Capital Goods 7.3% | |
| 3M Co. | 771,719 | 0.6 | 151,125,732 |
| General Electric Co. | 11,248,057 | 1.2 | 326,081,172 |
| Honeywell International, Inc. | 977,829 | 0.5 | 128,232,495 |
| The Boeing Co. | 735,554 | 0.5 | 135,952,446 |
| United Technologies Corp. | 967,258 | 0.4 | 115,094,029 |
| Other Securities | | 4.1 | 1,094,899,005 |
| | | 7.3 | 1,951,384,879 |
| |
| Commercial & Professional Services 0.5% | |
| Other Securities | | 0.5 | 142,755,432 |
| |
| Consumer Durables & Apparel 1.2% | |
| Other Securities | | 1.2 | 318,990,250 |
| |
| Consumer Services 1.7% | |
| McDonald's Corp. | 1,055,738 | 0.6 | 147,729,418 |
| Other Securities | | 1.1 | 299,272,464 |
| | | 1.7 | 447,001,882 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Diversified Financials 5.1% | |
| Berkshire Hathaway, Inc., Class B * | 2,443,530 | 1.5 | 403,695,591 |
| The Charles Schwab Corp. (a) | 1,573,881 | 0.2 | 61,145,277 |
| Other Securities | | 3.4 | 886,673,840 |
| | | 5.1 | 1,351,514,708 |
| |
| Energy 6.3% | |
| Chevron Corp. | 2,446,134 | 1.0 | 261,002,498 |
| Exxon Mobil Corp. | 5,352,341 | 1.6 | 437,018,643 |
| Schlumberger Ltd. | 1,804,028 | 0.5 | 130,954,393 |
| Other Securities | | 3.2 | 837,701,251 |
| | | 6.3 | 1,666,676,785 |
| |
| Food & Staples Retailing 2.0% | |
| Wal-Mart Stores, Inc. | 1,944,402 | 0.5 | 146,180,142 |
| Other Securities | | 1.5 | 387,800,024 |
| | | 2.0 | 533,980,166 |
| |
| Food, Beverage & Tobacco 5.3% | |
| Altria Group, Inc. | 2,500,391 | 0.7 | 179,478,066 |
| PepsiCo, Inc. | 1,844,563 | 0.8 | 208,952,097 |
| Philip Morris International, Inc. | 2,001,646 | 0.8 | 221,862,443 |
| The Coca-Cola Co. | 4,989,656 | 0.8 | 215,303,656 |
| Other Securities | | 2.2 | 586,326,859 |
| | | 5.3 | 1,411,923,121 |
| |
| Health Care Equipment & Services 5.4% | |
| Medtronic plc | 1,766,576 | 0.6 | 146,784,800 |
| UnitedHealth Group, Inc. | 1,239,610 | 0.8 | 216,782,997 |
| Other Securities | | 4.0 | 1,070,735,703 |
| | | 5.4 | 1,434,303,500 |
| |
| Household & Personal Products 1.9% | |
| The Procter & Gamble Co. | 3,297,190 | 1.1 | 287,943,603 |
| Other Securities | | 0.8 | 215,100,913 |
| | | 1.9 | 503,044,516 |
| |
| Insurance 2.7% | |
| Other Securities | | 2.7 | 703,774,791 |
| |
| Materials 2.8% | |
| Other Securities | | 2.8 | 752,061,384 |
| |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Media 3.2% | |
| Comcast Corp., Class A | 6,099,328 | 0.9 | 239,032,664 |
| The Walt Disney Co. | 1,874,783 | 0.8 | 216,724,915 |
| Other Securities | | 1.5 | 399,359,942 |
| | | 3.2 | 855,117,521 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 8.5% | |
| AbbVie, Inc. | 2,053,086 | 0.5 | 135,380,491 |
| Amgen, Inc. | 950,859 | 0.6 | 155,294,292 |
| Bristol-Myers Squibb Co. | 2,165,564 | 0.5 | 121,379,862 |
| Celgene Corp. * | 1,007,126 | 0.5 | 124,933,980 |
| Gilead Sciences, Inc. | 1,682,950 | 0.4 | 115,366,223 |
| Johnson & Johnson | 3,494,325 | 1.6 | 431,444,308 |
| Merck & Co., Inc. | 3,535,914 | 0.8 | 220,393,520 |
| Pfizer, Inc. | 7,665,033 | 1.0 | 259,997,919 |
| Other Securities | | 2.6 | 683,924,906 |
| | | 8.5 | 2,248,115,501 |
| |
| Real Estate 2.9% | |
| Other Securities | | 2.9 | 767,565,141 |
| |
| Retailing 5.6% | |
| Amazon.com, Inc. * | 510,480 | 1.8 | 472,188,895 |
| The Home Depot, Inc. | 1,571,850 | 0.9 | 245,365,785 |
| The Priceline Group, Inc. * | 63,115 | 0.4 | 116,562,044 |
| Other Securities | | 2.5 | 658,559,222 |
| | | 5.6 | 1,492,675,946 |
| |
| Semiconductors & Semiconductor Equipment 3.3% | |
| Intel Corp. | 6,084,505 | 0.8 | 219,954,856 |
| Other Securities | | 2.5 | 667,433,804 |
| | | 3.3 | 887,388,660 |
| |
| Software & Services 13.3% | |
| Alphabet, Inc., Class A * | 383,712 | 1.3 | 354,749,418 |
| Alphabet, Inc., Class C * | 379,875 | 1.3 | 344,151,555 |
| Facebook, Inc., Class A * | 3,034,300 | 1.7 | 455,903,575 |
| International Business Machines Corp. | 1,106,390 | 0.7 | 177,343,253 |
| MasterCard, Inc., Class A | 1,215,490 | 0.5 | 141,385,797 |
| Microsoft Corp. | 9,953,931 | 2.6 | 681,446,116 |
| Oracle Corp. | 3,864,686 | 0.7 | 173,756,283 |
| Visa, Inc., Class A | 2,392,300 | 0.8 | 218,225,606 |
| Other Securities | | 3.7 | 992,463,690 |
| | | 13.3 | 3,539,425,293 |
| |
| Technology Hardware & Equipment 5.7% | |
| Apple, Inc. | 6,759,715 | 3.7 | 971,033,060 |
| Cisco Systems, Inc. | 6,465,128 | 0.8 | 220,266,911 |
| Other Securities | | 1.2 | 319,546,124 |
| | | 5.7 | 1,510,846,095 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Telecommunication Services 2.2% | |
| AT&T, Inc. | 7,922,202 | 1.2 | 313,956,865 |
| Verizon Communications, Inc. | 5,259,278 | 0.9 | 241,453,453 |
| Other Securities | | 0.1 | 40,222,770 |
| | | 2.2 | 595,633,088 |
| |
| Transportation 2.2% | |
| Union Pacific Corp. | 1,049,650 | 0.4 | 117,518,814 |
| Other Securities | | 1.8 | 468,687,560 |
| | | 2.2 | 586,206,374 |
| |
| Utilities 3.2% | |
| Other Securities | | 3.2 | 840,283,824 |
| Total Common Stock | |
| (Cost $14,080,322,208) | | | 26,386,267,205 |
|
| Other Investment Company 0.0% of net assets | |
| |
| Securities Lending Collateral 0.0% | |
| Other Securities | | 0.0 | 4,719,058 |
| Total Other Investment Company | |
| (Cost $4,719,058) | | | 4,719,058 |
Security
Rate, Maturity Date | Face
Amount ($) | % of Net
Assets | Value
($) |
| Short-Term Investments 1.2% of net assets | |
| |
| Time Deposits 1.2% | |
Sumitomo Mitsui Banking Corp.
0.42%, 05/01/17 (d) | 232,106,445 | 0.9 | 232,106,445 |
| Other Securities | | 0.3 | 81,400,000 |
| | | 1.2 | 313,506,445 |
| Total Short-Term Investments | |
| (Cost $313,506,445) | | | 313,506,445 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $14,438,467,784 and the unrealized appreciation and depreciation were $12,608,993,697 and ($342,968,773), respectively, with a net unrealized appreciation of $12,266,024,924.
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $4,578,445. |
| (c) | The rate shown is the 7-day yield. |
| (d) | The rate shown is the current daily overnight rate. |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 1,568 | 186,631,200 | 2,278,307 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $26,386,267,205 | $— | $— | $26,386,267,205 | |
| Other Investment Company1 | 4,719,058 | — | — | 4,719,058 | |
| Short-Term Investments1 | — | 313,506,445 | — | 313,506,445 | |
| Total | $26,390,986,263 | $313,506,445 | $— | $26,704,492,708 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $2,278,307 | $— | $— | $2,278,307 | |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investment in affiliated issuer, at value (cost $26,372,402) | | $61,145,277 |
| Investments in unaffiliated issuers, at value (cost $14,367,456,251) including securities on loan of $4,578,445 | | 26,638,628,373 |
| Collateral invested for securities on loan, at value (cost $4,719,058) | + | 4,719,058 |
| Total investments, at value (cost $14,398,547,711) | | 26,704,492,708 |
| Cash | | 38,972 |
| Deposit with broker for futures contracts | | 19,450,000 |
| Receivables: | | |
| Fund shares sold | | 44,452,318 |
| Dividends | | 25,355,445 |
| Interest | | 10,974 |
| Income from securities on loan | + | 9,433 |
| Total assets | | 26,793,809,850 |
| Liabilities |
| Collateral held for securities on loan | | 4,719,058 |
| Payables: | | |
| Investments bought | | 196,331,856 |
| Investment adviser and administrator fees | | 643,321 |
| Fund shares redeemed | | 12,040,371 |
| Variation margin on futures contracts | | 869,624 |
| Accrued expenses | + | 263,760 |
| Total liabilities | | 214,867,990 |
| Net Assets |
| Total assets | | 26,793,809,850 |
| Total liabilities | – | 214,867,990 |
| Net assets | | $26,578,941,860 |
| Net Assets by Source | | |
| Capital received from investors | | 14,158,153,389 |
| Net investment income not yet distributed | | 155,298,299 |
| Net realized capital losses | | (42,733,132) |
| Net unrealized capital appreciation | | 12,308,223,304 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $26,578,941,860 | | 720,766,466 | | $36.88 |
| | | | | |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated issuer | | $224,433 |
| Dividends received from unaffiliated issuers | | 260,154,477 |
| Interest | | 259,930 |
| Securities on loan, net | + | 197,765 |
| Total investment income | | 260,836,605 |
| Expenses 1 |
| Investment adviser and administrator fees | | 6,081,116 |
| Shareholder service fees | | 1,495,075 |
| Transfer agent fees | | 263,422 |
| Registration fees | | 141,970 |
| Custodian fees | | 138,935 |
| Portfolio accounting fees | | 111,380 |
| Shareholder reports | | 70,845 |
| Professional fees | | 38,504 |
| Independent trustees' fees | | 38,386 |
| Index fees | | 35,796 |
| Other expenses | + | 154,066 |
| Total expenses | | 8,569,495 |
| Expense reduction by CSIM and its affiliates | – | 263,422 |
| Net expenses | – | 8,306,073 |
| Net investment income | | 252,530,532 |
| Realized and Unrealized Gains (Losses) |
| Net realized losses on unaffiliated issuers | | (35,872,197) |
| Net realized gains on futures contracts | + | 20,990,575 |
| Net realized losses | | (14,881,622) |
| Net change in unrealized appreciation (depreciation) on affiliated issuer | | 10,393,930 |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | | 2,780,915,067 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 3,230,200 |
| Net change in unrealized appreciation (depreciation) | + | 2,794,539,197 |
| Net realized and unrealized gains | | 2,779,657,575 |
| Increase in net assets resulting from operations | | $3,032,188,107 |
| 1 | See financial note 2(e) and financial note 4. |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $252,530,532 | $464,358,826 |
| Net realized gains (losses) | | (14,881,622) | 135,865,002 |
| Net change in unrealized appreciation (depreciation) | + | 2,794,539,197 | 367,870,298 |
| Increase in net assets from operations | | 3,032,188,107 | 968,094,126 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (467,541,204) | (445,863,757) |
| Distributions from net realized gains | + | (130,682,605) | (213,585,458) |
| Total distributions | | ($598,223,809) | ($659,449,215) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 95,266,769 | $3,387,288,392 | 138,449,264 | $4,442,657,641 |
| Shares reinvested | | 14,654,966 | 509,406,624 | 18,184,196 | 567,165,064 |
| Shares redeemed | + | (68,473,538) | (2,426,254,640) | (131,502,877) | (4,230,435,569) |
| Net transactions in fund shares | | 41,448,197 | $1,470,440,376 | 25,130,583 | $779,387,136 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 679,318,269 | $22,674,537,186 | 654,187,686 | $21,586,505,139 |
| Total increase | + | 41,448,197 | 3,904,404,674 | 25,130,583 | 1,088,032,047 |
| End of period | | 720,766,466 | $26,578,941,860 | 679,318,269 | $22,674,537,186 |
| Net investment income not yet distributed | | | $155,298,299 | | $370,308,971 |
Schwab Equity Index Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $52.40 | $53.67 | $53.63 | $48.31 | $40.23 | $37.44 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss)1 | 0.51 | 0.95 | 0.94 | 0.83 | 0.81 | 0.71 |
| Net realized and unrealized gains (losses) | 6.35 | 0.92 | 1.40 | 6.74 | 9.74 | 4.32 |
| Total from investment operations | 6.86 | 1.87 | 2.34 | 7.57 | 10.55 | 5.03 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.97) | (0.96) | (0.86) | (0.75) | (0.81) | (0.72) |
| Distributions from net realized gains | (0.86) | (2.18) | (1.44) | (1.50) | (1.66) | (1.52) |
| Total distributions | (1.83) | (3.14) | (2.30) | (2.25) | (2.47) | (2.24) |
| Net asset value at end of period | $57.43 | $52.40 | $53.67 | $53.63 | $48.31 | $40.23 |
| Total return | 13.30% 2 | 3.87% | 4.66% | 16.36% | 27.85% | 14.38% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.21% 3,4 | 0.29% | 0.29% | 0.29% | 0.29% | 0.29% |
| Gross operating expenses | 0.23% 3,4 | 0.33% | 0.33% | 0.33% | 0.34% | 0.34% |
| Net investment income (loss) | 1.87% 3 | 1.86% | 1.77% | 1.64% | 1.87% | 1.85% |
| Portfolio turnover rate | 2% 2 | 3% | 4% | 4% | 4% | 4% |
| Net assets, end of period (x 1,000,000) | $7,094 | $6,432 | $6,550 | $6,586 | $5,887 | $4,848 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Effective March 1, 2017, the fund changed to a unitary fee structure and the annual operating expense was reduced. The ratio presented for period ended 4/30/17 is a blended ratio. (See financial note 4)
Schwab Equity Index Funds | Semiannual Report
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 98.7% | Common Stock | 1,866,080,327 | 6,998,645,975 |
| 1.3% | Other Investment Companies | 95,691,492 | 95,691,492 |
| 100.0% | Total Investments | 1,961,771,819 | 7,094,337,467 |
| (0.0%) | Other Assets and Liabilities, Net | | (762,047) |
| 100.0% | Net Assets | | 7,093,575,420 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 98.7% of net assets | |
| |
| Automobiles & Components 0.9% | |
| Other Securities | | 0.9 | 66,966,230 |
| |
| Banks 6.3% | |
| Bank of America Corp. | 3,073,841 | 1.0 | 71,743,449 |
| Citigroup, Inc. | 851,556 | 0.7 | 50,343,991 |
| JPMorgan Chase & Co. | 1,091,578 | 1.3 | 94,967,286 |
| Wells Fargo & Co. | 1,378,696 | 1.0 | 74,228,993 |
| Other Securities | | 2.3 | 154,216,190 |
| | | 6.3 | 445,499,909 |
| |
| Capital Goods 7.5% | |
| 3M Co. | 180,854 | 0.5 | 35,416,639 |
| General Electric Co. | 2,668,102 | 1.1 | 77,348,277 |
| Honeywell International, Inc. | 239,099 | 0.4 | 31,355,443 |
| The Boeing Co. | 176,789 | 0.5 | 32,675,911 |
| United Technologies Corp. | 234,703 | 0.4 | 27,927,310 |
| Other Securities | | 4.6 | 325,486,782 |
| | | 7.5 | 530,210,362 |
| |
| Commercial & Professional Services 0.7% | |
| Other Securities | | 0.7 | 49,144,847 |
| |
| Consumer Durables & Apparel 1.3% | |
| Other Securities | | 1.3 | 89,092,444 |
| |
| Consumer Services 2.0% | |
| McDonald's Corp. | 249,636 | 0.5 | 34,931,566 |
| Other Securities | | 1.5 | 110,024,236 |
| | | 2.0 | 144,955,802 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Diversified Financials 5.0% | |
| Berkshire Hathaway, Inc., Class B * | 572,712 | 1.3 | 94,617,750 |
| The Charles Schwab Corp. (a) | 375,265 | 0.2 | 14,579,045 |
| Other Securities | | 3.5 | 243,909,540 |
| | | 5.0 | 353,106,335 |
| |
| Energy 6.0% | |
| Chevron Corp. | 580,437 | 0.9 | 61,932,628 |
| Exxon Mobil Corp. | 1,263,763 | 1.5 | 103,186,249 |
| Schlumberger Ltd. | 431,405 | 0.4 | 31,315,689 |
| Other Securities | | 3.2 | 230,522,305 |
| | | 6.0 | 426,956,871 |
| |
| Food & Staples Retailing 1.8% | |
| Wal-Mart Stores, Inc. | 451,627 | 0.5 | 33,953,318 |
| Other Securities | | 1.3 | 95,122,361 |
| | | 1.8 | 129,075,679 |
| |
| Food, Beverage & Tobacco 4.9% | |
| Altria Group, Inc. | 596,705 | 0.6 | 42,831,485 |
| PepsiCo, Inc. | 430,385 | 0.7 | 48,754,013 |
| Philip Morris International, Inc. | 460,065 | 0.7 | 50,993,604 |
| The Coca-Cola Co. | 1,200,348 | 0.7 | 51,795,016 |
| Other Securities | | 2.2 | 156,662,979 |
| | | 4.9 | 351,037,097 |
| |
| Health Care Equipment & Services 5.3% | |
| Medtronic plc | 405,722 | 0.5 | 33,711,441 |
| UnitedHealth Group, Inc. | 294,392 | 0.7 | 51,483,273 |
| Other Securities | | 4.1 | 287,510,907 |
| | | 5.3 | 372,705,621 |
| |
| Household & Personal Products 1.7% | |
| The Procter & Gamble Co. | 786,119 | 1.0 | 68,651,772 |
| Other Securities | | 0.7 | 54,223,898 |
| | | 1.7 | 122,875,670 |
| |
| Insurance 3.0% | |
| Other Securities | | 3.0 | 210,867,662 |
| |
| Materials 3.2% | |
| Other Securities | | 3.2 | 225,412,347 |
| |
Schwab Equity Index Funds | Semiannual Report
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Media 3.2% | |
| Comcast Corp., Class A | 1,415,446 | 0.8 | 55,471,329 |
| The Walt Disney Co. | 445,260 | 0.7 | 51,472,056 |
| Other Securities | | 1.7 | 117,505,345 |
| | | 3.2 | 224,448,730 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 8.0% | |
| AbbVie, Inc. | 494,626 | 0.5 | 32,615,638 |
| Amgen, Inc. | 228,102 | 0.5 | 37,253,619 |
| Bristol-Myers Squibb Co. | 506,839 | 0.4 | 28,408,326 |
| Celgene Corp. * | 242,540 | 0.4 | 30,087,087 |
| Gilead Sciences, Inc. | 415,344 | 0.4 | 28,471,831 |
| Johnson & Johnson | 829,387 | 1.4 | 102,404,413 |
| Merck & Co., Inc. | 832,218 | 0.7 | 51,872,148 |
| Pfizer, Inc. | 1,827,351 | 0.9 | 61,983,746 |
| Other Securities | | 2.8 | 191,437,694 |
| | | 8.0 | 564,534,502 |
| |
| Real Estate 3.7% | |
| Other Securities | | 3.7 | 265,467,894 |
| |
| Retailing 5.2% | |
| Amazon.com, Inc. * | 119,541 | 1.6 | 110,574,229 |
| The Home Depot, Inc. | 372,035 | 0.8 | 58,074,663 |
| The Priceline Group, Inc. * | 15,246 | 0.4 | 28,156,618 |
| Other Securities | | 2.4 | 168,758,876 |
| | | 5.2 | 365,564,386 |
| |
| Semiconductors & Semiconductor Equipment 3.2% | |
| Intel Corp. | 1,463,480 | 0.7 | 52,904,802 |
| Other Securities | | 2.5 | 174,625,856 |
| | | 3.2 | 227,530,658 |
| |
| Software & Services 12.9% | |
| Alphabet, Inc., Class A * | 89,288 | 1.2 | 82,548,542 |
| Alphabet, Inc., Class C * | 88,332 | 1.1 | 80,025,259 |
| Facebook, Inc., Class A * | 715,100 | 1.5 | 107,443,775 |
| International Business Machines Corp. | 265,740 | 0.6 | 42,595,465 |
| MasterCard, Inc., Class A | 291,210 | 0.5 | 33,873,547 |
| Microsoft Corp. | 2,360,038 | 2.3 | 161,568,201 |
| Oracle Corp. | 926,410 | 0.6 | 41,651,394 |
| Visa, Inc., Class A | 573,400 | 0.7 | 52,305,548 |
| Other Securities | | 4.4 | 310,457,121 |
| | | 12.9 | 912,468,852 |
| |
| Technology Hardware & Equipment 5.5% | |
| Apple, Inc. | 1,599,974 | 3.2 | 229,836,265 |
| Cisco Systems, Inc. | 1,554,615 | 0.7 | 52,965,733 |
| Other Securities | | 1.6 | 109,644,991 |
| | | 5.5 | 392,446,989 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Telecommunication Services 2.1% | |
| AT&T, Inc. | 1,882,041 | 1.1 | 74,585,285 |
| Verizon Communications, Inc. | 1,253,257 | 0.8 | 57,537,029 |
| Other Securities | | 0.2 | 18,006,524 |
| | | 2.1 | 150,128,838 |
| |
| Transportation 2.1% | |
| Union Pacific Corp. | 250,724 | 0.4 | 28,071,059 |
| Other Securities | | 1.7 | 123,633,080 |
| | | 2.1 | 151,704,139 |
| |
| Utilities 3.2% | |
| Other Securities | | 3.2 | 226,444,111 |
| Total Common Stock | |
| (Cost $1,866,080,327) | | | 6,998,645,975 |
|
| Other Investment Companies 1.3% of net assets | |
| |
| Money Market Fund 1.1% | |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (c) | 82,722,242 | 1.1 | 82,722,242 |
| |
| Securities Lending Collateral 0.2% | |
| Other Securities | | 0.2 | 12,969,250 |
| Total Other Investment Companies | |
| (Cost $95,691,492) | | | 95,691,492 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,943,196,641 and the unrealized appreciation and depreciation were $5,166,531,224 and ($15,390,398), respectively, with a net unrealized appreciation of $5,151,140,826.
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $12,507,336. |
| (c) | The rate shown is the 7-day yield. |
| | |
| REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 780 | 92,839,500 | 567,225 |
Schwab Equity Index Funds | Semiannual Report
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $6,998,645,975 | $— | $— | $6,998,645,975 | |
| Other Investment Companies1 | 95,691,492 | — | — | 95,691,492 | |
| Total | $7,094,337,467 | $— | $— | $7,094,337,467 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $567,225 | $— | $— | $567,225 | |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Equity Index Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investment in affiliated issuer, at value (cost $2,209,352) | | $14,579,045 |
| Investments in unaffiliated issuers, at value (cost $1,946,593,217) including securities on loan of $12,507,336 | | 7,066,789,172 |
| Collateral invested for securities on loan, at value (cost $12,969,250) | + | 12,969,250 |
| Total investments, at value (cost $1,961,771,819) | | 7,094,337,467 |
| Deposit with broker for futures contracts | | 3,900,000 |
| Receivables: | | |
| Dividends | | 6,563,364 |
| Fund shares sold | | 3,916,604 |
| Income from securities on loan | + | 21,557 |
| Total assets | | 7,108,738,992 |
| Liabilities |
| Collateral held for securities on loan | | 12,969,250 |
| Payables: | | |
| Investment adviser and administrator fees | | 288,308 |
| Fund shares redeemed | | 1,586,647 |
| Variation margin on futures contracts | | 218,400 |
| Accrued expenses | + | 100,967 |
| Total liabilities | | 15,163,572 |
| Net Assets |
| Total assets | | 7,108,738,992 |
| Total liabilities | – | 15,163,572 |
| Net assets | | $7,093,575,420 |
| Net Assets by Source | | |
| Capital received from investors | | 1,778,547,227 |
| Net investment income not yet distributed | | 38,587,057 |
| Net realized capital gains | | 143,308,263 |
| Net unrealized capital appreciation | | 5,133,132,873 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $7,093,575,420 | | 123,519,126 | | $57.43 |
| | | | | |
Schwab Equity Index Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated issuer | | $56,290 |
| Dividends received from unaffiliated issuers (net of foreign withholding taxes of $2,983) | | 70,156,838 |
| Securities on loan, net | + | 163,291 |
| Total investment income | | 70,376,419 |
| Expenses 1 |
| Investment adviser and administrator fees | | 5,480,902 |
| Shareholder service fees | | 2,126,991 |
| Portfolio accounting fees | | 41,874 |
| Shareholder reports | | 39,639 |
| Transfer agent fees | | 37,074 |
| Registration fees | | 34,237 |
| Custodian fees | | 31,009 |
| Professional fees | | 21,518 |
| Independent trustees' fees | | 16,961 |
| Interest expense | | 1,229 |
| Other expenses | + | 44,239 |
| Total expenses | | 7,875,673 |
| Expense reduction by CSIM and its affiliates | – | 858,722 |
| Net expenses | – | 7,016,951 |
| Net investment income | | 63,359,468 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on unaffiliated issuers | | 118,702,503 |
| Net realized gains on futures contracts | + | 4,931,016 |
| Net realized gains | | 123,633,519 |
| Net change in unrealized appreciation (depreciation) on affiliated issuer | | 2,683,145 |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | | 653,702,274 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 565,592 |
| Net change in unrealized appreciation (depreciation) | + | 656,951,011 |
| Net realized and unrealized gains | | 780,584,530 |
| Increase in net assets resulting from operations | | $843,943,998 |
| 1 | See financial note 2(e) and financial note 4. |
Schwab Equity Index Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $63,359,468 | $119,057,166 |
| Net realized gains | | 123,633,519 | 99,482,670 |
| Net change in unrealized appreciation (depreciation) | + | 656,951,011 | 26,057,919 |
| Increase in net assets from operations | | 843,943,998 | 244,597,755 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (118,201,282) | (116,634,011) |
| Distributions from net realized gains | + | (104,593,102) | (264,435,992) |
| Total distributions | | ($222,794,384) | ($381,070,003) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 4,149,809 | $230,531,774 | 7,018,989 | $351,323,719 |
| Shares reinvested | | 3,447,950 | 186,706,519 | 6,609,034 | 324,569,655 |
| Shares redeemed | + | (6,845,011) | (377,269,999) | (12,905,052) | (656,886,870) |
| Net transactions in fund shares | | 752,748 | $39,968,294 | 722,971 | $19,006,504 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 122,766,378 | $6,432,457,512 | 122,043,407 | $6,549,923,256 |
| Total increase or decrease | + | 752,748 | 661,117,908 | 722,971 | (117,465,744) |
| End of period | | 123,519,126 | $7,093,575,420 | 122,766,378 | $6,432,457,512 |
| Net investment income not yet distributed | | | $38,587,057 | | $93,428,871 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $25.60 | $26.29 | $28.13 | $27.62 | $21.26 | $20.55 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss)1 | 0.22 | 0.39 | 0.38 | 0.35 | 0.42 | 0.33 |
| Net realized and unrealized gains (losses) | 4.45 | 0.59 | (0.34) | 1.76 | 6.94 | 1.89 |
| Total from investment operations | 4.67 | 0.98 | 0.04 | 2.11 | 7.36 | 2.22 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.39) | (0.36) | (0.34) | (0.31) | (0.50) | (0.35) |
| Distributions from net realized gains | (0.76) | (1.31) | (1.54) | (1.29) | (0.50) | (1.16) |
| Total distributions | (1.15) | (1.67) | (1.88) | (1.60) | (1.00) | (1.51) |
| Net asset value at end of period | $29.12 | $25.60 | $26.29 | $28.13 | $27.62 | $21.26 |
| Total return | 18.37% 2 | 4.17% | 0.36% | 8.08% | 36.23% | 11.87% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.13% 3,4 | 0.17% | 0.17% | 0.17% | 0.17% | 0.17% |
| Gross operating expenses | 0.15% 3,4 | 0.20% | 0.20% | 0.21% | 0.20% | 0.21% |
| Net investment income (loss) | 1.53% 3 | 1.60% | 1.37% | 1.27% | 1.76% | 1.63% |
| Portfolio turnover rate | 1% 2 | 17% | 17% | 12% | 11% | 41% 5 |
| Net assets, end of period (x 1,000,000) | $3,172 | $2,619 | $2,607 | $2,567 | $2,351 | $1,675 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Effective March 1, 2017, the fund changed to a unitary fee structure and the annual operating expense was reduced. The ratio presented for period ended 4/30/17 is a blended ratio. (See financial note 4)
5
Portfolio turnover rate increase was mainly the result of trading activities in connection with the change in primary benchmark index effective December 14, 2011.
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.4% | Common Stock | 2,165,609,297 | 3,153,187,296 |
| 0.0% | Rights | 442,190 | 739,496 |
| 2.6% | Other Investment Company | 83,253,815 | 83,253,815 |
| 1.2% | Short-Term Investments | 35,939,495 | 35,939,495 |
| 103.2% | Total Investments | 2,285,244,797 | 3,273,120,102 |
| (3.2%) | Other Assets and Liabilities, Net | | (100,958,486) |
| 100.0% | Net Assets | | 3,172,161,616 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 99.4% of net assets | |
| |
| Automobiles & Components 1.2% | |
| Other Securities | | 1.2 | 38,431,274 |
| |
| Banks 13.5% | |
| Bank of the Ozarks, Inc. | 149,268 | 0.2 | 7,085,752 |
| F.N.B. Corp. | 518,499 | 0.2 | 7,383,426 |
| Hancock Holding Co. | 138,326 | 0.2 | 6,459,824 |
| IBERIABANK Corp. | 83,375 | 0.2 | 6,615,806 |
| Investors Bancorp, Inc. | 487,314 | 0.2 | 6,749,299 |
| PrivateBancorp, Inc. | 130,076 | 0.2 | 7,514,491 |
| Prosperity Bancshares, Inc. | 110,595 | 0.2 | 7,431,984 |
| Texas Capital Bancshares, Inc. * | 83,200 | 0.2 | 6,331,520 |
| Umpqua Holdings Corp. | 362,388 | 0.2 | 6,403,396 |
| Webster Financial Corp. | 149,327 | 0.2 | 7,587,305 |
| Other Securities | | 11.5 | 359,945,840 |
| | | 13.5 | 429,508,643 |
| |
| Capital Goods 9.2% | |
| Curtiss-Wright Corp. | 73,740 | 0.2 | 6,891,740 |
| EMCOR Group, Inc. | 99,097 | 0.2 | 6,514,637 |
| Teledyne Technologies, Inc. * | 55,426 | 0.2 | 7,473,088 |
| Other Securities | | 8.6 | 269,677,441 |
| | | 9.2 | 290,556,906 |
| |
| Commercial & Professional Services 3.7% | |
| Other Securities | | 3.7 | 116,064,390 |
| |
| Consumer Durables & Apparel 2.3% | |
| Other Securities | | 2.3 | 73,992,366 |
| |
| Consumer Services 4.1% | |
| Other Securities | | 4.1 | 129,934,562 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Diversified Financials 3.1% | |
| New Residential Investment Corp. | 488,397 | 0.3 | 8,141,578 |
| Other Securities | | 2.8 | 91,093,053 |
| | | 3.1 | 99,234,631 |
| |
| Energy 3.1% | |
| RSP Permian, Inc. * | 161,025 | 0.2 | 6,127,001 |
| Other Securities | | 2.9 | 91,002,657 |
| | | 3.1 | 97,129,658 |
| |
| Food & Staples Retailing 0.5% | |
| Other Securities | | 0.5 | 16,999,868 |
| |
| Food, Beverage & Tobacco 1.8% | |
| Other Securities | | 1.8 | 57,479,385 |
| |
| Health Care Equipment & Services 5.5% | |
| HealthSouth Corp. | 148,800 | 0.2 | 6,978,720 |
| Masimo Corp. * | 71,000 | 0.2 | 7,294,540 |
| Other Securities | | 5.1 | 161,820,322 |
| | | 5.5 | 176,093,582 |
| |
| Household & Personal Products 0.6% | |
| Other Securities | | 0.6 | 18,234,237 |
| |
| Insurance 2.4% | |
| CNO Financial Group, Inc. | 290,468 | 0.2 | 6,120,161 |
| Primerica, Inc. | 77,100 | 0.2 | 6,460,980 |
| Other Securities | | 2.0 | 63,319,042 |
| | | 2.4 | 75,900,183 |
| |
| Materials 5.1% | |
| Olin Corp. | 272,948 | 0.3 | 8,769,819 |
| The Chemours Co. | 301,200 | 0.4 | 12,135,348 |
| Other Securities | | 4.4 | 139,593,556 |
| | | 5.1 | 160,498,723 |
| |
| Media 1.6% | |
| Other Securities | | 1.6 | 49,736,103 |
| |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Pharmaceuticals, Biotechnology & Life Sciences 7.4% | |
| Exelixis, Inc. * | 377,072 | 0.3 | 8,446,413 |
| TESARO, Inc. * | 47,000 | 0.2 | 6,936,730 |
| Other Securities | | 6.9 | 220,431,872 |
| | | 7.4 | 235,815,015 |
| |
| Real Estate 7.9% | |
| DuPont Fabros Technology, Inc. | 122,124 | 0.2 | 6,295,492 |
| Gramercy Property Trust | 229,322 | 0.2 | 6,372,858 |
| Healthcare Realty Trust, Inc. | 187,281 | 0.2 | 6,142,817 |
| Hudson Pacific Properties, Inc. | 201,311 | 0.2 | 6,917,046 |
| Medical Properties Trust, Inc. | 485,753 | 0.2 | 6,348,792 |
| The GEO Group, Inc. | 198,420 | 0.2 | 6,611,354 |
| Other Securities | | 6.7 | 211,324,943 |
| | | 7.9 | 250,013,302 |
| |
| Retailing 3.1% | |
| Other Securities | | 3.1 | 97,600,958 |
| |
| Semiconductors & Semiconductor Equipment 4.0% | |
| Advanced Micro Devices, Inc. * | 1,242,043 | 0.5 | 16,519,172 |
| Cavium, Inc. * | 106,350 | 0.2 | 7,322,197 |
| Cirrus Logic, Inc. * | 102,500 | 0.2 | 6,595,875 |
| Microsemi Corp. * | 186,321 | 0.3 | 8,745,908 |
| MKS Instruments, Inc. | 87,389 | 0.2 | 6,838,189 |
| Other Securities | | 2.6 | 81,714,310 |
| | | 4.0 | 127,735,651 |
| |
| Software & Services 8.0% | |
| Aspen Technology, Inc. * | 127,699 | 0.2 | 7,852,212 |
| Blackbaud, Inc. | 79,069 | 0.2 | 6,357,938 |
| EPAM Systems, Inc. * | 79,383 | 0.2 | 6,112,491 |
| Fair Isaac Corp. | 51,391 | 0.2 | 6,962,453 |
| j2 Global, Inc. | 76,328 | 0.2 | 6,887,839 |
| LogMeIn, Inc. | 85,700 | 0.3 | 9,684,100 |
| MAXIMUS, Inc. | 107,617 | 0.2 | 6,563,561 |
| Take-Two Interactive Software, Inc. * | 161,512 | 0.3 | 10,151,029 |
| Other Securities | | 6.2 | 192,199,458 |
| | | 8.0 | 252,771,081 |
| |
| Technology Hardware & Equipment 5.3% | |
| Coherent, Inc. * | 39,689 | 0.3 | 8,556,948 |
| Other Securities | | 5.0 | 160,122,274 |
| | | 5.3 | 168,679,222 |
| |
| Telecommunication Services 0.8% | |
| Other Securities | | 0.8 | 25,286,710 |
| |
| Transportation 1.5% | |
| XPO Logistics, Inc. * | 161,802 | 0.3 | 7,991,401 |
| Other Securities | | 1.2 | 40,894,000 |
| | | 1.5 | 48,885,401 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Utilities 3.7% | |
| IDACORP, Inc. | 83,643 | 0.2 | 7,069,506 |
| Portland General Electric Co. | 149,008 | 0.2 | 6,756,023 |
| Southwest Gas Holdings, Inc. | 78,196 | 0.2 | 6,549,697 |
| WGL Holdings, Inc. | 83,033 | 0.2 | 6,846,901 |
| Other Securities | | 2.9 | 89,383,318 |
| | | 3.7 | 116,605,445 |
| Total Common Stock | |
| (Cost $2,165,609,297) | | | 3,153,187,296 |
|
| Rights 0.0% of net assets | |
| |
| Media 0.0% | |
| Other Securities | | 0.0 | 297,306 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% | |
| Other Securities | | 0.0 | 442,190 |
| Total Rights | |
| (Cost $442,190) | | | 739,496 |
|
| Other Investment Company 2.6% of net assets | |
| |
| Securities Lending Collateral 2.6% | |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 83,253,815 | 2.6 | 83,253,815 |
| Total Other Investment Company | |
| (Cost $83,253,815) | | | 83,253,815 |
Security
Rate, Maturity Date | Face
Amount ($) | % of Net
Assets | Value
($) |
| Short-Term Investments 1.2% of net assets | |
| |
| Time Deposits 1.2% | |
Barclays Capital, Inc.
0.42%, 05/01/17 (c) | 32,097,833 | 1.0 | 32,097,833 |
| Other Securities | | 0.2 | 3,841,662 |
| | | 1.2 | 35,939,495 |
| Total Short-Term Investments | |
| (Cost $35,939,495) | | | 35,939,495 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $2,297,663,908 and the unrealized appreciation and depreciation were $1,183,254,916 and ($207,798,722), respectively, with a net unrealized appreciation of $975,456,194.
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $80,171,978. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| CVR — | Contingent Value Rights |
| REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| Russell 2000 Index, mini, Long, expires 06/16/17 | 234 | 16,361,280 | 89,302 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $2,992,688,573 | $— | $— | $2,992,688,573 | |
| Materials | 160,498,723 | — | — * | 160,498,723 | |
| Rights 1 | — | — | 739,496 * | 739,496 | |
| Other Investment Company1 | 83,253,815 | — | — | 83,253,815 | |
| Short-Term Investments1 | — | 35,939,495 | — | 35,939,495 | |
| Total | $3,236,441,111 | $35,939,495 | $739,496 | $3,273,120,102 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $89,302 | $— | $— | $89,302 | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $2,201,990,982) including securities on loan of $80,171,978 | | $3,189,866,287 |
| Collateral invested for securities on loan, at value (cost $83,253,815) | + | 83,253,815 |
| Total investments, at value (cost $2,285,244,797) | | 3,273,120,102 |
| Deposit with broker for futures contracts | | 1,892,750 |
| Receivables: | | |
| Investments sold | | 1,895,152 |
| Fund shares sold | | 4,590,714 |
| Dividends | | 949,694 |
| Income from securities on loan | | 407,864 |
| Interest | | 1,112 |
| Foreign tax reclaims | + | 222 |
| Total assets | | 3,282,857,610 |
| Liabilities |
| Collateral held for securities on loan | | 83,253,815 |
| Payables: | | |
| Investments bought | | 23,691,264 |
| Investment adviser and administrator fees | | 127,458 |
| Fund shares redeemed | | 2,753,523 |
| Variation margin on futures contracts | | 588,131 |
| Due to custodian | | 157,270 |
| Accrued expenses | + | 124,533 |
| Total liabilities | | 110,695,994 |
| Net Assets |
| Total assets | | 3,282,857,610 |
| Total liabilities | – | 110,695,994 |
| Net assets | | $3,172,161,616 |
| Net Assets by Source | | |
| Capital received from investors | | 2,137,008,429 |
| Net investment income not yet distributed | | 12,566,692 |
| Net realized capital gains | | 34,621,888 |
| Net unrealized capital appreciation | | 987,964,607 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $3,172,161,616 | | 108,933,895 | | $29.12 |
| | | | | |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $2,509) | | $22,353,884 |
| Interest | | 51,700 |
| Securities on loan, net | + | 2,410,534 |
| Total investment income | | 24,816,118 |
| Expenses 1 |
| Investment adviser and administrator fees | | 1,721,121 |
| Shareholder service fees | | 181,191 |
| Index fees | | 124,772 |
| Registration fees | | 38,248 |
| Portfolio accounting fees | | 32,481 |
| Shareholder reports | | 24,252 |
| Transfer agent fees | | 19,587 |
| Custodian fees | | 16,893 |
| Professional fees | | 15,420 |
| Independent trustees' fees | | 6,218 |
| Other expenses | + | 18,357 |
| Total expenses | | 2,198,540 |
| Expense reduction by CSIM and its affiliates | – | 280,692 |
| Net expenses | – | 1,917,848 |
| Net investment income | | 22,898,270 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 42,479,909 |
| Net realized gains on futures contracts | + | 5,226,020 |
| Net realized gains | | 47,705,929 |
| Net change in unrealized appreciation (depreciation) on investments | | 410,699,200 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 696,794 |
| Net change in unrealized appreciation (depreciation) | + | 411,395,994 |
| Net realized and unrealized gains | | 459,101,923 |
| Increase in net assets resulting from operations | | $482,000,193 |
| 1 | See financial note 2(e) and financial note 4. |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $22,898,270 | $40,983,928 |
| Net realized gains | | 47,705,929 | 73,511,432 |
| Net change in unrealized appreciation (depreciation) | + | 411,395,994 | (17,644,520) |
| Increase in net assets from operations | | 482,000,193 | 96,850,840 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (39,963,730) | (36,921,658) |
| Distributions from net realized gains | + | (77,932,853) | (133,048,449) |
| Total distributions | | ($117,896,583) | ($169,970,107) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 14,202,656 | $403,929,274 | 19,812,273 | $485,854,730 |
| Shares reinvested | | 3,628,372 | 102,973,212 | 6,229,806 | 148,954,660 |
| Shares redeemed | + | (11,196,513) | (317,555,849) | (22,912,471) | (550,233,981) |
| Net transactions in fund shares | | 6,634,515 | $189,346,637 | 3,129,608 | $84,575,409 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 102,299,380 | $2,618,711,369 | 99,169,772 | $2,607,255,227 |
| Total increase | + | 6,634,515 | 553,450,247 | 3,129,608 | 11,456,142 |
| End of period | | 108,933,895 | $3,172,161,616 | 102,299,380 | $2,618,711,369 |
| Net investment income not yet distributed | | | $12,566,692 | | $29,632,152 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $38.19 | $37.69 | $36.96 | $32.53 | $25.80 | $22.92 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.40 1 | 0.75 1 | 0.72 1 | 0.60 | 0.57 | 0.47 |
| Net realized and unrealized gains (losses) | 4.82 | 0.75 | 0.83 | 4.49 | 6.70 | 2.83 |
| Total from investment operations | 5.22 | 1.50 | 1.55 | 5.09 | 7.27 | 3.30 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.74) | (0.70) | (0.61) | (0.51) | (0.54) | (0.42) |
| Distributions from net realized gains | (0.19) | (0.30) | (0.21) | (0.15) | — | — |
| Total distributions | (0.93) | (1.00) | (0.82) | (0.66) | (0.54) | (0.42) |
| Net asset value at end of period | $42.48 | $38.19 | $37.69 | $36.96 | $32.53 | $25.80 |
| Total return | 13.79% 2 | 4.19% | 4.36% | 15.93% | 28.76% | 14.71% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.07% 3,4 | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% |
| Gross operating expenses | 0.08% 3,4 | 0.10% | 0.11% | 0.10% | 0.10% | 0.10% |
| Net investment income (loss) | 1.96% 3 | 2.03% | 1.92% | 1.79% | 2.02% | 2.02% |
| Portfolio turnover rate | 1% 2 | 1% | 2% | 1% | 2% | 3% |
| Net assets, end of period (x 1,000,000) | $5,846 | $4,850 | $4,477 | $4,049 | $3,183 | $2,240 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Effective March 1, 2017, the fund changed to a unitary fee structure and the annual operating expense was reduced. The ratio presented for period ended 4/30/17 is a blended ratio. (See financial note 4)
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.6% | Common Stock | 3,472,334,120 | 5,824,673,305 |
| 0.0% | Rights | 34,633 | 65,690 |
| 0.4% | Other Investment Company | 22,506,953 | 22,506,953 |
| 0.2% | Short-Term Investment | 11,400,000 | 11,400,000 |
| 100.2% | Total Investments | 3,506,275,706 | 5,858,645,948 |
| (0.2%) | Other Assets and Liabilities, Net | | (13,013,671) |
| 100.0% | Net Assets | | 5,845,632,277 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 99.6% of net assets | |
| |
| Automobiles & Components 1.0% | |
| Other Securities | | 1.0 | 56,927,428 |
| |
| Banks 6.7% | |
| Bank of America Corp. | 2,341,001 | 0.9 | 54,638,963 |
| Citigroup, Inc. | 647,289 | 0.7 | 38,267,726 |
| JPMorgan Chase & Co. | 833,063 | 1.2 | 72,476,481 |
| Wells Fargo & Co. | 1,051,813 | 1.0 | 56,629,612 |
| Other Securities | | 2.9 | 168,404,649 |
| | | 6.7 | 390,417,431 |
| |
| Capital Goods 7.7% | |
| 3M Co. | 139,257 | 0.5 | 27,270,698 |
| General Electric Co. | 2,028,900 | 1.0 | 58,817,811 |
| Honeywell International, Inc. | 178,180 | 0.4 | 23,366,525 |
| The Boeing Co. | 133,036 | 0.4 | 24,589,044 |
| United Technologies Corp. | 173,998 | 0.4 | 20,704,022 |
| Other Securities | | 5.0 | 294,789,769 |
| | | 7.7 | 449,537,869 |
| |
| Commercial & Professional Services 0.9% | |
| Other Securities | | 0.9 | 55,564,256 |
| |
| Consumer Durables & Apparel 1.4% | |
| Other Securities | | 1.4 | 80,104,170 |
| |
| Consumer Services 2.2% | |
| McDonald's Corp. | 190,240 | 0.5 | 26,620,283 |
| Other Securities | | 1.7 | 102,805,955 |
| | | 2.2 | 129,426,238 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Diversified Financials 4.9% | |
| Berkshire Hathaway, Inc., Class B * | 444,402 | 1.3 | 73,419,654 |
| The Charles Schwab Corp. (a) | 285,070 | 0.2 | 11,074,969 |
| Other Securities | | 3.4 | 204,564,139 |
| | | 4.9 | 289,058,762 |
| |
| Energy 5.9% | |
| Chevron Corp. | 441,723 | 0.8 | 47,131,844 |
| Exxon Mobil Corp. | 967,499 | 1.4 | 78,996,293 |
| Schlumberger Ltd. | 325,003 | 0.4 | 23,591,968 |
| Other Securities | | 3.3 | 194,413,271 |
| | | 5.9 | 344,133,376 |
| |
| Food & Staples Retailing 1.8% | |
| Wal-Mart Stores, Inc. | 354,189 | 0.5 | 26,627,929 |
| Other Securities | | 1.3 | 76,429,100 |
| | | 1.8 | 103,057,029 |
| |
| Food, Beverage & Tobacco 4.8% | |
| Altria Group, Inc. | 449,423 | 0.6 | 32,259,583 |
| PepsiCo, Inc. | 332,458 | 0.6 | 37,660,842 |
| Philip Morris International, Inc. | 364,009 | 0.7 | 40,346,758 |
| The Coca-Cola Co. | 895,914 | 0.7 | 38,658,689 |
| Other Securities | | 2.2 | 129,335,307 |
| | | 4.8 | 278,261,179 |
| |
| Health Care Equipment & Services 5.3% | |
| Medtronic plc | 317,588 | 0.5 | 26,388,387 |
| UnitedHealth Group, Inc. | 224,995 | 0.7 | 39,347,126 |
| Other Securities | | 4.1 | 245,738,114 |
| | | 5.3 | 311,473,627 |
| |
| Household & Personal Products 1.7% | |
| The Procter & Gamble Co. | 597,824 | 0.9 | 52,207,970 |
| Other Securities | | 0.8 | 46,302,275 |
| | | 1.7 | 98,510,245 |
| |
| Insurance 2.9% | |
| Other Securities | | 2.9 | 172,213,598 |
| |
| Materials 3.3% | |
| Other Securities | | 3.3 | 195,770,445 |
| |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Media 3.1% | |
| Comcast Corp., Class A | 1,105,020 | 0.7 | 43,305,734 |
| The Walt Disney Co. | 337,839 | 0.7 | 39,054,188 |
| Other Securities | | 1.7 | 100,940,755 |
| | | 3.1 | 183,300,677 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 8.1% | |
| AbbVie, Inc. | 372,796 | 0.4 | 24,582,168 |
| Amgen, Inc. | 170,689 | 0.5 | 27,876,927 |
| Bristol-Myers Squibb Co. | 388,253 | 0.4 | 21,761,581 |
| Celgene Corp. * | 181,562 | 0.4 | 22,522,766 |
| Gilead Sciences, Inc. | 306,892 | 0.4 | 21,037,447 |
| Johnson & Johnson | 635,509 | 1.3 | 78,466,296 |
| Merck & Co., Inc. | 640,716 | 0.7 | 39,935,828 |
| Pfizer, Inc. | 1,393,425 | 0.8 | 47,264,976 |
| Other Securities | | 3.2 | 187,735,056 |
| | | 8.1 | 471,183,045 |
| |
| Real Estate 4.1% | |
| Other Securities | | 4.1 | 237,659,030 |
| |
| Retailing 5.1% | |
| Amazon.com, Inc. * | 92,425 | 1.5 | 85,492,201 |
| The Home Depot, Inc. | 284,763 | 0.8 | 44,451,504 |
| The Priceline Group, Inc. * | 11,476 | 0.4 | 21,194,106 |
| Other Securities | | 2.4 | 148,172,731 |
| | | 5.1 | 299,310,542 |
| |
| Semiconductors & Semiconductor Equipment 3.2% | |
| Intel Corp. | 1,103,197 | 0.7 | 39,880,572 |
| Other Securities | | 2.5 | 147,655,451 |
| | | 3.2 | 187,536,023 |
| |
| Software & Services 12.7% | |
| Alphabet, Inc., Class A * | 69,376 | 1.1 | 64,139,500 |
| Alphabet, Inc., Class C * | 69,027 | 1.1 | 62,535,701 |
| Facebook, Inc., Class A * | 549,607 | 1.4 | 82,578,452 |
| International Business Machines Corp. | 200,351 | 0.5 | 32,114,262 |
| MasterCard, Inc., Class A | 218,356 | 0.4 | 25,399,170 |
| Microsoft Corp. | 1,801,718 | 2.1 | 123,345,614 |
| Oracle Corp. | 697,513 | 0.5 | 31,360,184 |
| Visa, Inc., Class A | 431,504 | 0.7 | 39,361,795 |
| Other Securities | | 4.9 | 279,602,512 |
| | | 12.7 | 740,437,190 |
| |
| Technology Hardware & Equipment 5.5% | |
| Apple, Inc. | 1,224,362 | 3.0 | 175,879,601 |
| Cisco Systems, Inc. | 1,162,640 | 0.7 | 39,611,145 |
| Other Securities | | 1.8 | 109,323,743 |
| | | 5.5 | 324,814,489 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Telecommunication Services 2.0% | |
| AT&T, Inc. | 1,436,907 | 1.0 | 56,944,624 |
| Verizon Communications, Inc. | 957,069 | 0.8 | 43,939,038 |
| Other Securities | | 0.2 | 18,391,160 |
| | | 2.0 | 119,274,822 |
| |
| Transportation 2.1% | |
| Union Pacific Corp. | 190,270 | 0.4 | 21,302,629 |
| Other Securities | | 1.7 | 100,810,863 |
| | | 2.1 | 122,113,492 |
| |
| Utilities 3.2% | |
| Other Securities | | 3.2 | 184,588,342 |
| Total Common Stock | |
| (Cost $3,472,334,120) | | | 5,824,673,305 |
|
| Rights 0.0% of net assets | |
| |
| Media 0.0% | |
| Other Securities | | 0.0 | 31,280 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% | |
| Other Securities | | 0.0 | 34,410 |
| |
| Technology Hardware & Equipment 0.0% | |
| Other Securities | | 0.0 | — |
| Total Rights | |
| (Cost $34,633) | | | 65,690 |
|
| Other Investment Company 0.4% of net assets | |
| |
| Securities Lending Collateral 0.4% | |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (c) | 22,506,953 | 0.4 | 22,506,953 |
| Total Other Investment Company | |
| (Cost $22,506,953) | | | 22,506,953 |
Security
Rate, Maturity Date | Face
Amount ($) | % of Net
Assets | Value
($) |
| Short-Term Investment 0.2% of net assets | |
| |
| Time Deposit 0.2% | |
| Other Securities | | 0.2 | 11,400,000 |
| Total Short-Term Investment | |
| (Cost $11,400,000) | | | 11,400,000 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $3,542,250,210 and the unrealized appreciation and depreciation were $2,421,357,911 and ($104,962,173), respectively, with a net unrealized appreciation of $2,316,395,738.
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $21,538,581. |
| (c) | The rate shown is the 7-day yield. |
| (d) | The rate shown is the current daily overnight rate. |
| (e) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| CVR — | Contingent Value Rights |
| REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| Russell 2000 Index, mini, Long, expires 06/16/17 | 40 | 2,796,800 | 42,209 |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 135 | 16,068,375 | 192,159 |
| Net Unrealized Appreciation | 234,368 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $5,162,776,729 | $— | $— | $5,162,776,729 | |
| Consumer Durables & Apparel | 80,104,170 | — | — * | 80,104,170 | |
| Energy | 344,133,376 | — | — * | 344,133,376 | |
| Real Estate | 237,659,030 | — | — * | 237,659,030 | |
| Rights 1 | — | — | 65,690 * | 65,690 | |
| Other Investment Company1 | 22,506,953 | — | — | 22,506,953 | |
| Short-Term Investment1 | — | 11,400,000 | — | 11,400,000 | |
| Total | $5,847,180,258 | $11,400,000 | $65,690 | $5,858,645,948 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $234,368 | $— | $— | $234,368 | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investment in affiliated issuer, at value (cost $6,729,377) | | $11,074,969 |
| Investments in unaffiliated issuers, at value (cost $3,477,039,376) including securities on loan of $21,538,581 | | 5,825,064,026 |
| Collateral invested for securities on loan, at value (cost $22,506,953) | + | 22,506,953 |
| Total investments, at value (cost $3,506,275,706) | | 5,858,645,948 |
| Deposit with broker for futures contracts | | 3,393,850 |
| Receivables: | | |
| Investments sold | | 745,626 |
| Fund shares sold | | 7,205,258 |
| Dividends | | 5,025,278 |
| Income from securities on loan | | 139,002 |
| Interest | + | 373 |
| Total assets | | 5,875,155,335 |
| Liabilities |
| Collateral held for securities on loan | | 22,506,953 |
| Payables: | | |
| Investments bought | | 75,235 |
| Investment adviser and administrator fees | | 142,198 |
| Fund shares redeemed | | 6,580,772 |
| Variation margin on futures contracts | | 79,200 |
| Due to custodian | | 13,434 |
| Accrued expenses | + | 125,266 |
| Total liabilities | | 29,523,058 |
| Net Assets |
| Total assets | | 5,875,155,335 |
| Total liabilities | – | 29,523,058 |
| Net assets | | $5,845,632,277 |
| Net Assets by Source | | |
| Capital received from investors | | 3,482,333,604 |
| Net investment income not yet distributed | | 32,534,675 |
| Net realized capital losses | | (21,840,612) |
| Net unrealized capital appreciation | | 2,352,604,610 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $5,845,632,277 | | 137,598,176 | | $42.48 |
| | | | | |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated issuer | | $39,074 |
| Dividends received from unaffiliated issuers (net of foreign withholding taxes of $3,601) | | 54,209,859 |
| Interest | | 36,059 |
| Securities on loan, net | + | 578,583 |
| Total investment income | | 54,863,575 |
| Expenses 1 |
| Investment adviser and administrator fees | | 1,331,816 |
| Shareholder service fees | | 332,580 |
| Index fees | | 153,926 |
| Registration fees | | 60,736 |
| Portfolio accounting fees | | 43,387 |
| Transfer agent fees | | 37,196 |
| Custodian fees | | 36,526 |
| Shareholder reports | | 31,618 |
| Professional fees | | 17,574 |
| Independent trustees' fees | | 9,685 |
| Other expenses | + | 33,361 |
| Total expenses | | 2,088,405 |
| Expense reduction by CSIM and its affiliates | – | 199,955 |
| Net expenses | – | 1,888,450 |
| Net investment income | | 52,975,125 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on unaffiliated issuers | | 4,476,033 |
| Net realized gains on futures contracts | + | 4,045,223 |
| Net realized gains | | 8,521,256 |
| Net change in unrealized appreciation (depreciation) on affiliated issuer | | 1,729,709 |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | | 620,267,885 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 626,318 |
| Net change in unrealized appreciation (depreciation) | + | 622,623,912 |
| Net realized and unrealized gains | | 631,145,168 |
| Increase in net assets resulting from operations | | $684,120,293 |
| 1 | See financial note 2(e) and financial note 4. |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $52,975,125 | $93,562,870 |
| Net realized gains | | 8,521,256 | 11,000,475 |
| Net change in unrealized appreciation (depreciation) | + | 622,623,912 | 93,459,982 |
| Increase in net assets from operations | | 684,120,293 | 198,023,327 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (94,787,157) | (84,938,610) |
| Distributions from net realized gains | + | (24,251,175) | (36,762,493) |
| Total distributions | | ($119,038,332) | ($121,701,103) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 18,137,501 | $740,911,975 | 23,096,907 | $842,649,529 |
| Shares reinvested | | 2,290,336 | 91,911,169 | 2,656,745 | 94,819,269 |
| Shares redeemed | + | (9,853,628) | (402,696,102) | (17,507,062) | (640,225,552) |
| Net transactions in fund shares | | 10,574,209 | $430,127,042 | 8,246,590 | $297,243,246 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 127,023,967 | $4,850,423,274 | 118,777,377 | $4,476,857,804 |
| Total increase | + | 10,574,209 | 995,209,003 | 8,246,590 | 373,565,470 |
| End of period | | 137,598,176 | $5,845,632,277 | 127,023,967 | $4,850,423,274 |
| Net investment income not yet distributed | | | $32,534,675 | | $74,346,707 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $17.52 | $18.49 | $19.42 | $19.92 | $16.32 | $16.02 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.24 1 | 0.53 1 | 0.54 1 | 0.64 | 0.49 | 0.57 |
| Net realized and unrealized gains (losses) | 1.73 | (1.03) | (0.86) | (0.63) | 3.69 | 0.33 |
| Total from investment operations | 1.97 | (0.50) | (0.32) | 0.01 | 4.18 | 0.90 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.55) | (0.47) | (0.61) | (0.51) | (0.58) | (0.60) |
| Net asset value at end of period | $18.94 | $17.52 | $18.49 | $19.42 | $19.92 | $16.32 |
| Total return | 11.57% 2 | (2.64%) | (1.53%) | 0.09% | 26.40% | 6.07% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.14% 3,4 | 0.19% | 0.19% | 0.19% | 0.19% | 0.19% |
| Gross operating expenses | 0.17% 3,4 | 0.23% | 0.23% | 0.23% | 0.23% | 0.23% |
| Net investment income (loss) | 2.74% 3 | 3.06% | 2.82% | 3.42% | 2.88% | 3.66% |
| Portfolio turnover rate | 1% 2 | 4% | 7% | 2% | 5% | 31% 5 |
| Net assets, end of period (x 1,000,000) | $3,394 | $2,900 | $2,844 | $2,699 | $2,205 | $1,415 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Effective March 1, 2017, the fund changed to a unitary fee structure and the annual operating expense was reduced. The ratio presented for period ended 4/30/17 is a blended ratio. (See financial note 4)
5
Portfolio turnover rate increase was mainly the result of trading activities in connection with the change in primary benchmark index effective December 20, 2011.
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.6% | Common Stock | 2,717,668,950 | 3,311,221,395 |
| 0.6% | Preferred Stock | 18,339,785 | 20,066,159 |
| 0.0% | Rights | 151,087 | 121,959 |
| 0.6% | Other Investment Company | 22,103,193 | 22,103,193 |
| 1.1% | Short-Term Investments | 39,047,407 | 39,047,407 |
| 99.9% | Total Investments | 2,797,310,422 | 3,392,560,113 |
| 0.1% | Other Assets and Liabilities, Net | | 1,777,965 |
| 100.0% | Net Assets | | 3,394,338,078 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 97.6% of net assets | |
| |
| Australia 7.2% | |
| Australia & New Zealand Banking Group Ltd. | 733,288 | 0.5 | 17,950,141 |
| BHP Billiton Ltd. | 801,347 | 0.4 | 14,267,129 |
| Commonwealth Bank of Australia | 431,753 | 0.8 | 28,199,475 |
| National Australia Bank Ltd. | 665,884 | 0.5 | 16,901,559 |
| Westpac Banking Corp. | 839,116 | 0.6 | 21,997,222 |
| Other Securities | | 4.4 | 146,935,865 |
| | | 7.2 | 246,251,391 |
| |
| Austria 0.2% | |
| Other Securities | | 0.2 | 7,365,882 |
| |
| Belgium 1.1% | |
| Anheuser-Busch InBev S.A./N.V. | 190,619 | 0.6 | 21,496,167 |
| Other Securities | | 0.5 | 17,615,401 |
| | | 1.1 | 39,111,568 |
| |
| Denmark 1.7% | |
| Novo Nordisk A/S, Class B | 479,312 | 0.5 | 18,662,902 |
| Other Securities | | 1.2 | 38,837,979 |
| | | 1.7 | 57,500,881 |
| |
| Finland 1.0% | |
| Other Securities | | 1.0 | 32,911,736 |
| |
| France 10.3% | |
| AXA S.A. | 488,337 | 0.4 | 13,028,893 |
| BNP Paribas S.A. | 265,883 | 0.6 | 18,765,273 |
| L'Oreal S.A. | 63,352 | 0.4 | 12,616,524 |
| LVMH Moet Hennessy Louis Vuitton SE | 69,333 | 0.5 | 17,116,151 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Sanofi | 289,925 | 0.8 | 27,396,109 |
| TOTAL S.A. | 569,051 | 0.9 | 29,211,207 |
| Other Securities | | 6.7 | 230,897,119 |
| | | 10.3 | 349,031,276 |
| |
| Germany 8.8% | |
| Allianz SE | 114,365 | 0.6 | 21,772,534 |
| BASF SE | 229,281 | 0.7 | 22,336,310 |
| Bayer AG | 206,902 | 0.8 | 25,600,618 |
| Daimler AG | 241,363 | 0.5 | 17,984,991 |
| Deutsche Telekom AG | 818,934 | 0.4 | 14,364,752 |
| SAP SE | 245,789 | 0.7 | 24,619,690 |
| Siemens AG | 191,317 | 0.8 | 27,443,059 |
| Other Securities | | 4.3 | 145,369,200 |
| | | 8.8 | 299,491,154 |
| |
| Hong Kong 3.5% | |
| AIA Group Ltd. | 3,019,600 | 0.6 | 20,899,965 |
| Other Securities | | 2.9 | 96,379,213 |
| | | 3.5 | 117,279,178 |
| |
| Ireland 0.5% | |
| Other Securities | | 0.5 | 15,536,228 |
| |
| Israel 0.6% | |
| Other Securities | | 0.6 | 21,861,226 |
| |
| Italy 2.1% | |
| Other Securities | | 2.1 | 70,265,869 |
| |
| Japan 22.7% | |
| Mitsubishi UFJ Financial Group, Inc. | 3,195,109 | 0.6 | 20,246,105 |
| SoftBank Group Corp. | 205,300 | 0.5 | 15,572,552 |
| Sumitomo Mitsui Financial Group, Inc. | 338,446 | 0.4 | 12,566,707 |
| Toyota Motor Corp. | 654,803 | 1.0 | 35,438,432 |
| Other Securities | | 20.2 | 686,110,985 |
| | | 22.7 | 769,934,781 |
| |
| Netherlands 3.4% | |
| ING Groep N.V. | 974,876 | 0.5 | 15,890,016 |
| Unilever N.V. CVA | 407,503 | 0.6 | 21,347,224 |
| Other Securities | | 2.3 | 79,251,994 |
| | | 3.4 | 116,489,234 |
| |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| New Zealand 0.2% | |
| Other Securities | | 0.2 | 5,438,223 |
| |
| Norway 0.6% | |
| Other Securities | | 0.6 | 20,322,036 |
| |
| Portugal 0.1% | |
| Other Securities | | 0.1 | 5,085,144 |
| |
| Singapore 1.3% | |
| Other Securities | | 1.3 | 42,797,237 |
| |
| Spain 3.4% | |
| Banco Bilbao Vizcaya Argentaria S.A. | 1,678,054 | 0.4 | 13,443,930 |
| Banco Santander S.A. | 3,656,952 | 0.7 | 23,832,070 |
| Telefonica S.A. | 1,128,747 | 0.4 | 12,483,881 |
| Other Securities | | 1.9 | 64,844,516 |
| | | 3.4 | 114,604,397 |
| |
| Sweden 2.9% | |
| Other Securities | | 2.9 | 97,199,577 |
| |
| Switzerland 8.6% | |
| Nestle S.A. | 777,302 | 1.8 | 59,868,159 |
| Novartis AG | 558,366 | 1.3 | 42,985,843 |
| Roche Holding AG | 175,680 | 1.4 | 45,969,182 |
| UBS Group AG | 908,905 | 0.5 | 15,515,768 |
| Other Securities | | 3.6 | 126,502,728 |
| | | 8.6 | 290,841,680 |
| |
| United Kingdom 17.4% | |
| AstraZeneca plc | 316,731 | 0.6 | 18,968,815 |
| BP plc | 4,733,337 | 0.8 | 27,096,500 |
| British American Tobacco plc | 466,243 | 0.9 | 31,500,907 |
| Diageo plc | 629,808 | 0.5 | 18,331,918 |
| GlaxoSmithKline plc | 1,221,749 | 0.7 | 24,591,173 |
| HSBC Holdings plc | 4,953,812 | 1.2 | 40,850,705 |
| Lloyds Banking Group plc | 16,164,962 | 0.4 | 14,524,623 |
| Prudential plc | 647,211 | 0.4 | 14,364,094 |
| Reckitt Benckiser Group plc | 157,813 | 0.4 | 14,540,486 |
| Royal Dutch Shell plc, A Shares | 1,093,117 | 0.8 | 28,386,522 |
| Royal Dutch Shell plc, B Shares | 936,233 | 0.7 | 24,910,313 |
| Shire plc | 224,094 | 0.4 | 13,212,289 |
| Unilever plc | 321,982 | 0.5 | 16,565,425 |
| Vodafone Group plc | 6,675,453 | 0.5 | 17,193,561 |
| Other Securities | | 8.6 | 286,865,366 |
| | | 17.4 | 591,902,697 |
| Total Common Stock | |
| (Cost $2,717,668,950) | | | 3,311,221,395 |
|
| Preferred Stock 0.6% of net assets | |
| |
| Germany 0.5% | |
| Other Securities | | 0.5 | 18,396,563 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Italy 0.1% | |
| Other Securities | | 0.1 | 1,627,116 |
| |
| United Kingdom 0.0% | |
| Other Securities | | 0.0 | 42,480 |
| Total Preferred Stock | |
| (Cost $18,339,785) | | | 20,066,159 |
|
| Rights 0.0% of net assets | |
| |
| Australia 0.0% | |
| Other Securities | | 0.0 | 3,971 |
| |
| United Kingdom 0.0% | |
| Other Securities | | 0.0 | 117,988 |
| Total Rights | |
| (Cost $151,087) | | | 121,959 |
|
| Other Investment Company 0.6% of net assets | |
| |
| United States 0.6% | |
| Securities Lending Collateral 0.6% | |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 22,103,193 | 0.6 | 22,103,193 |
| Total Other Investment Company | |
| (Cost $22,103,193) | | | 22,103,193 |
Security
Rate, Maturity Date | Face
Amount ($) | % of Net
Assets | Value
($) |
| Short-Term Investments 1.1% of net assets | |
| |
| Time Deposits 1.1% | |
BNP Paribas
0.42%, 05/01/17 (c) | 33,991,664 | 1.0 | 33,991,664 |
| Other Securities | | 0.1 | 5,055,743 |
| | | 1.1 | 39,047,407 |
| Total Short-Term Investments | |
| (Cost $39,047,407) | | | 39,047,407 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $2,818,090,108 and the unrealized appreciation and depreciation were $779,902,609 and ($205,432,604), respectively, with a net unrealized appreciation of $574,470,005.
At 04/30/17, the values of certain foreign securities held by the fund aggregating $3,292,559,477 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial note 2(a) for additional information).
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $21,110,259. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| CDI — | CHESS Depositary Interest |
| CVA — | Dutch Certificate |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
| SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI EAFE Index, e-mini, Long expires 06/16/17 | 595 | 54,258,050 | 1,249,105 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $— | $728,330,574 | $— | $728,330,574 | |
| France | 1,767,324 | 347,263,952 | — | 349,031,276 | |
| Germany | 1,367,983 | 298,123,171 | — | 299,491,154 | |
| Hong Kong | 3,830,699 | 113,448,479 | — | 117,279,178 | |
| Ireland | 3,167,684 | 12,368,544 | — | 15,536,228 | |
| Israel | 13,823,885 | 8,037,341 | — | 21,861,226 | |
| Japan | 3,008,158 | 766,926,623 | — | 769,934,781 | |
| Netherlands | 9,406,377 | 107,082,857 | — | 116,489,234 | |
| New Zealand | 289,505 | 5,148,718 | — | 5,438,223 | |
| Portugal | — | 5,085,144 | — * | 5,085,144 | |
| Switzerland | 1,338,301 | 289,503,379 | — | 290,841,680 | |
| United Kingdom | 685,681 | 591,217,016 | — | 591,902,697 | |
| Preferred Stock1 | — | 20,023,679 | — | 20,023,679 | |
| United Kingdom | — | — | 42,480 | 42,480 | |
| Rights | | | | | |
| Australia | — | — | 3,971 | 3,971 | |
| United Kingdom | 117,988 | — | — | 117,988 | |
| Other Investment Company1 | 22,103,193 | — | — | 22,103,193 | |
| Short-Term Investments1 | — | 39,047,407 | — | 39,047,407 | |
| Total | $60,906,778 | $3,331,606,884 | $46,451 | $3,392,560,113 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $1,249,105 | $— | $— | $1,249,105 | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $26,803,757 and $7,918,102 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended April 30, 2017. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation by the fund. There were no transfers in or out of Level 3 during the period.
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $2,775,207,229) including securities on loan of $21,110,259 | | $3,370,456,920 |
| Collateral invested for securities on loan, at value (cost $22,103,193) | + | 22,103,193 |
| Total investments, at value (cost $2,797,310,422) | | 3,392,560,113 |
| Foreign currency, at value (cost $7,708) | | 7,809 |
| Deposit with broker for futures contracts | | 3,003,000 |
| Receivables: | | |
| Investments sold | | 506,982 |
| Dividends | | 12,141,414 |
| Fund shares sold | | 6,355,936 |
| Foreign tax reclaims | | 5,893,386 |
| Income from securities on loan | | 137,073 |
| Interest | + | 1,278 |
| Total assets | | 3,420,606,991 |
| Liabilities |
| Collateral held for securities on loan | | 22,103,193 |
| Payables: | | |
| Investments bought | | 42,479 |
| Investment adviser and administrator fees | | 162,313 |
| Fund shares redeemed | | 3,703,054 |
| Variation margin on futures contracts | | 98,198 |
| Accrued expenses | + | 159,676 |
| Total liabilities | | 26,268,913 |
| Net Assets |
| Total assets | | 3,420,606,991 |
| Total liabilities | – | 26,268,913 |
| Net assets | | $3,394,338,078 |
| Net Assets by Source | | |
| Capital received from investors | | 2,919,360,815 |
| Net investment income not yet distributed | | 13,533,168 |
| Net realized capital losses | | (134,921,515) |
| Net unrealized capital appreciation | | 596,365,610 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $3,394,338,078 | | 179,243,686 | | $18.94 |
| | | | | |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $4,449,220) | | $43,770,165 |
| Interest | | 32,436 |
| Securities on loan, net | + | 393,891 |
| Total investment income | | 44,196,492 |
| Expenses 1 |
| Investment adviser and administrator fees | | 1,813,056 |
| Shareholder service fees | | 183,891 |
| Index fees | | 182,167 |
| Custodian fees | | 163,426 |
| Registration fees | | 53,212 |
| Shareholder reports | | 47,504 |
| Portfolio accounting fees | | 37,308 |
| Professional fees | | 18,505 |
| Transfer agent fees | | 15,639 |
| Interest expense | | 7,390 |
| Independent trustees' fees | | 6,395 |
| Other expenses | + | 18,701 |
| Total expenses | | 2,547,194 |
| Expense reduction by CSIM and its affiliates | – | 330,201 |
| Net expenses | – | 2,216,993 |
| Net investment income | | 41,979,499 |
| Realized and Unrealized Gains (Losses) |
| Net realized losses on investments | | (9,500,837) |
| Net realized gains on futures contracts | | 2,062,102 |
| Net realized losses on foreign currency transactions | + | (704,073) |
| Net realized losses | | (8,142,808) |
| Net change in unrealized appreciation (depreciation) on investments | | 310,854,375 |
| Net change in unrealized appreciation (depreciation) on futures contracts | | 1,677,758 |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 316,359 |
| Net change in unrealized appreciation (depreciation) | + | 312,848,492 |
| Net realized and unrealized gains | | 304,705,684 |
| Increase in net assets resulting from operations | | $346,685,183 |
| 1 | See financial note 2(e) and financial note 4. |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $41,979,499 | $87,842,148 |
| Net realized losses | | (8,142,808) | (41,952,856) |
| Net change in unrealized appreciation (depreciation) | + | 312,848,492 | (119,132,636) |
| Increase (decrease) in net assets from operations | | 346,685,183 | (73,243,344) |
| Distributions to Shareholders | |
| Distributions from net investment income | | ($92,318,949) | ($77,100,360) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 29,639,167 | $524,273,101 | 64,054,024 | $1,096,906,593 |
| Shares reinvested | | 4,417,331 | 75,315,502 | 3,569,073 | 61,423,757 |
| Shares redeemed | + | (20,320,724) | (360,065,887) | (55,915,117) | (951,870,981) |
| Net transactions in fund shares | | 13,735,774 | $239,522,716 | 11,707,980 | $206,459,369 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 165,507,912 | $2,900,449,128 | 153,799,932 | $2,844,333,463 |
| Total increase | + | 13,735,774 | 493,888,950 | 11,707,980 | 56,115,665 |
| End of period | | 179,243,686 | $3,394,338,078 | 165,507,912 | $2,900,449,128 |
| Net investment income not yet distributed | | | $13,533,168 | | $63,872,618 |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Financial Notes, unaudited
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust, except Schwab 1000 Index Fund, which is a series of Schwab Investments. Both Schwab Capital Trust and Schwab Investments (the trusts) are no-load, open-end management investment companies. Each trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trusts as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) |
| Schwab S&P 500 Index Fund | Schwab Target 2045 Fund |
| Schwab Small-Cap Index Fund | Schwab Target 2050 Fund |
| Schwab Total Stock Market Index Fund | Schwab Target 2055 Fund |
| Schwab International Index Fund | Schwab Target 2060 Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Fundamental US Large Company Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Fundamental US Small Company Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Fundamental International Large Company Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Fundamental International Small Company Index Fund |
| Laudus Small-Cap MarketMasters Fund™ | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Fundamental Global Real Estate Index Fund |
| Schwab Balanced Fund™ | Schwab Target 2010 Index Fund |
| Schwab Core Equity Fund™ | Schwab Target 2015 Index Fund |
| Schwab Dividend Equity Fund™ | Schwab Target 2020 Index Fund |
| Schwab Large-Cap Growth Fund™ | Schwab Target 2025 Index Fund |
| Schwab Small-Cap Equity Fund™ | Schwab Target 2030 Index Fund |
| Schwab Hedged Equity Fund™ | Schwab Target 2035 Index Fund |
| Schwab Health Care Fund™ | Schwab Target 2040 Index Fund |
| Schwab ® International Core Equity Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab® Monthly Income Fund – Moderate Payout |
| Schwab Target 2030 Fund | Schwab® Monthly Income Fund – Enhanced Payout |
| Schwab Target 2035 Fund | Schwab® Monthly Income Fund – Maximum Payout |
| Schwab Target 2040 Fund | |
| |
| SCHWAB INVESTMENTS (ORGANIZED OCTOBER 26, 1990) |
| Schwab 1000 Index Fund | Schwab® U.S. Aggregate Bond Index Fund |
| Schwab Short-Term Bond Market Fund™ | Schwab® Short-Term Bond Index Fund |
| Schwab Intermediate-Term Bond Fund™ | Schwab Tax-Free Bond Fund™ |
| Schwab Total Bond Market Fund™ | Schwab California Tax-Free Bond Fund™ |
| Schwab GNMA Fund™ | Schwab Global Real Estate Fund™ |
| Schwab ® Treasury Inflation Protected Securities Index Fund | |
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds' Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The funds may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (SEC). For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the SEC.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
• Foreign equity security fair valuation: The Board has adopted procedures to fair value foreign equity securities that are traded in markets that close prior to the funds valuing their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the NAV of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures.
• Futures contracts: Futures contracts are valued at their settlement prices as of the close of their exchanges.
• Underlying funds: Mutual funds are valued at their respective NAVs. Exchange-traded funds (ETFs) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
• Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)—Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets.
• Level 3—significant unobservable inputs (including the funds' own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds' results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds' investments as of April 30, 2017 are disclosed in the Condensed Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their market value may change daily.
Securities Lending: Under the trusts’ Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreements allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. The aggregate market value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. Total costs and expenses, including lending agent fees and broker rebates, associated with securities lending activities under the trusts’ Securities Lending Program paid to the unaffiliated lending agents start at 10% of gross lending revenue, with subsequent breakpoints to a low of 7.5%.
As of April 30, 2017, the funds had securities on loan, all of which were classified as common stocks. The value of the securities on loan and the related collateral as of April 30, 2017, if any, are disclosed in each fund's Condensed Portfolio Holdings. The value of the securities on loan and the investment of cash collateral are also disclosed in each fund's Statement of Assets and Liabilities.
Cash Management Transactions: The funds, except for Schwab 1000 Index Fund, may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, may be subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed. Balances in the CMS Sweep are accounted for on a cost basis, which approximates market value.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures contract position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
In 2015, the Schwab International Index Fund filed claims to recover taxes previously withheld in certain European Union countries on the basis that those countries had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. These filings are subject to various administrative and judicial proceedings within these countries, and all professional fees associated with these filings have been paid by CSIM. No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty surrounding the ultimate resolution of proceedings, the likelihood of receipt of these claims, and the potential timing of payment.
(e) Expenses:
Prior to March 1, 2017, expenses that were specific to a fund were charged directly to the fund. Expenses that were common to all funds within a trust were allocated among the funds in proportion to their average daily net assets.
Effective March 1, 2017, pursuant to an Amended and Restated Investment Advisory and Administration Agreement (Advisory Agreement) between Charles Schwab Investment Management, Inc. (CSIM or the investment adviser) and each trust, the investment adviser will pay the operating expenses of each fund, excluding acquired fund fees and expenses, taxes, any brokerage expenses, and extraordinary or non-routine expenses. Taxes, any brokerage expenses and extraordinary or non-routine expenses that are specific to a fund are charged directly to the fund.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, State Street Bank and Trust Company (State Street), under which the funds may receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to a fund's operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of April 30, 2017, if any, are reflected in each fund's Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds' prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Tracking Error Risk. As an index fund, each fund seeks to track the performance of its comparative index, although it may not be successful in doing so. The divergence between the performance of a fund and its index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
Investment Style Risk. The funds are not actively managed. Therefore, each fund follows the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, a fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of a fund’s expenses, a fund’s performance may be below that of the index.
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Schwab Equity Index Funds
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
Sampling Index Tracking Risk. If a fund uses a sampling method, the fund will not fully replicate its comparative index and may hold securities not included in the index. As a result, the fund will be subject to the risk that the investment adviser’s investment strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. If a fund utilizes a sampling approach, it may not track the return of the index as well as it would if the fund purchased all of the securities in the index.
Concentration Risk. To the extent that a fund’s or an index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country or asset class.
Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, a fund’s performance could be impacted.
Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Mid-Cap Company Risk. Mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies and the value of securities issued by these companies may move sharply.
Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Foreign Investment Risk. A fund's investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund's investments, and could impair the fund's ability to meet its investment objective or invest in accordance with its investment strategies. To the extent a fund’s investments in a single country or a limited number of countries represent a higher percentage of the fund’s assets, the fund assumes the risk that economic, political and social conditions in those countries will have a significant impact on its investment performance and it may be subject to increased price volatility.
Derivatives Risk. A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk and market risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to lack of availability risk, credit risk, leverage risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause a fund to realize higher amounts of short-term capital gains. A fund's use of derivatives could reduce the fund's performance, increase its volatility, and could cause the fund to lose more than the initial amount invested.
Liquidity Risk. A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
CSIM, a wholly owned subsidiary of The Charles Schwab Corporation (CSC), serves as each fund's investment adviser and administrator pursuant to an Advisory Agreement between CSIM and each trust.
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Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Effective March 1, 2017, for its advisory and administrative services to the funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
Schwab
S&P 500
Index Fund | Schwab
1000
Index Fund | Schwab
Small-Cap
Index Fund | Schwab
Total Stock
Market
Index Fund | Schwab
International
Index Fund |
| 0.03% | 0.05% | 0.05% | 0.03% | 0.06% |
Prior to March 1, 2017, the advisory and administrative services fee of the Schwab 1000 Index Fund was as follows:
| % of Average Daily Net Assets | Schwab
1000
Index Fund |
| First $500 million | 0.30% |
| $500 million to $5 billion | 0.22% |
| $5 billion to $10 billion | 0.20% |
| Over $10 billion | 0.18% |
For the period from November 1, 2016 to February 28, 2017, the aggregate advisory and administrative services fee paid to CSIM by the Schwab 1000 Index Fund was 0.22%, annualized, as a percentage of the fund's average daily net assets.
Prior to March 1, 2017, the advisory and administrative services fees of the Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund were 0.06%, 0.15%, 0.06%, and 0.15%, respectively.
Shareholder Servicing
Prior to March 1, 2017, the Board had adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enabled each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, Schwab) (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds.
Pursuant to the Plan, each fund’s shares were subject to an annual shareholder servicing fee up to the amount set forth in the table below. The shareholder servicing fee paid to a particular service provider was made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds), and a fund paid no more than the amount set forth in the table below of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Payments under the Plan were made as described above without regard to whether the fee was more or less than the service provider’s actual cost of providing the services, and if more, such excess may have been retained as profit by the service provider.
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 |
| 0.02% | 0.10% | 0.02% | 0.02% | 0.02% |
Effective March 1, 2017, the Plan was terminated with respect to the funds and the funds are no longer charged shareholder servicing fees.
Expense Limitation
Effective March 1, 2017, the funds moved to a unitary fee structure and the expense limitation was terminated. Under the new unitary fee structure, CSIM pays the operating expenses of the funds, excluding acquired fund fees and expenses, taxes, any brokerage expenses and extraordinary or non-routine expenses.
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Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Prior to March 1, 2017, CSIM and its affiliates had made an additional agreement with the funds, for so long as CSIM served as the investment adviser to the funds, which may only have been amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (expense limitation). The expense limitation as a percentage of average daily net assets was as follows:
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 |
| 0.09% | 0.29% | 0.17% | 0.09% | 0.19% |
Investments in Affiliates
The funds may engage in certain transactions involving affiliates. For instance, a fund may own shares of CSC if that company is included in its index. The table below shows funds with investment activities involving CSC shares during the report period:
| Fund | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | Realized
Gains (Losses)
11/01/16
to 04/30/17 | Dividends
Received
11/01/16
to 04/30/17 |
| Schwab S&P 500 Index Fund | 1,480,381 | 93,500 | — | 1,573,881 | $61,145,277 | $— | $224,433 |
| Schwab 1000 Index Fund | 375,265 | — | — | 375,265 | $14,579,045 | $— | $56,290 |
| Schwab Total Stock Market Index Fund | 250,126 | 34,944 | — | 285,070 | $11,074,969 | $— | $39,074 |
Investments from Affiliates
Certain Schwab Funds may own shares of other Schwab funds. The table below reflects the percentages of shares of each fund in this report that are owned by other Schwab Funds as of April 30, 2017, as applicable:
| | Underlying Funds |
| | Schwab
S&P 500
Index Fund | Schwab
1000
Index Fund | Schwab
Small-Cap
Index Fund | Schwab
Total Stock
Market
Index Fund | Schwab
International
Index Fund |
| Schwab MarketTrack All Equity Portfolio | 0.7% | —% | 3.4% | —% | 2.5% |
| Schwab MarketTrack Balanced Portfolio | 0.4% | —% | 1.7% | —% | 1.1% |
| Schwab MarketTrack Conservative Portfolio | 0.1% | —% | 0.6% | —% | 0.4% |
| Schwab MarketTrack Growth Portfolio | 0.8% | —% | 3.4% | —% | 2.1% |
| Schwab MarketTrack Growth Portfolio II | 0.0%* | 0.0%* | 0.2% | —% | 0.2% |
| Schwab Target 2010 Fund | 0.0%* | —% | —% | —% | —% |
| Schwab Target 2015 Fund | 0.0%* | —% | —% | —% | —% |
| Schwab Target 2020 Fund | 0.3% | —% | —% | —% | —% |
| Schwab Target 2025 Fund | 0.3% | —% | —% | —% | —% |
| Schwab Target 2030 Fund | 0.6% | —% | —% | —% | —% |
| Schwab Target 2035 Fund | 0.3% | —% | —% | —% | —% |
| Schwab Target 2040 Fund | 0.6% | —% | —% | —% | —% |
| Schwab Target 2045 Fund | 0.1% | —% | —% | —% | —% |
| Schwab Target 2050 Fund | 0.1% | —% | —% | —% | —% |
| Schwab Target 2055 Fund | 0.0%* | —% | —% | —% | —% |
| Schwab Target 2060 Fund | 0.0%* | —% | —% | —% | —% |
Certain other related parties may own shares of the funds in this report. As of April 30, 2017, the shares owned by Schwab Charitable Giving Trust (an affiliate of Schwab) as a percentage of the total shares of the Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund were 3.9%, 9.0% and 4.5%, respectively.
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Schwab Equity Index Funds
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Other Affiliated Transactions
The professional fees related to foreign withholding tax claims discussed in financial note 2 were non-routine expenses. However, the investment adviser agreed to pay these professional fees, subject to reimbursement by the Schwab International Index Fund to the extent the fund is able to successfully recover taxes withheld in the future. As of April 30, 2017, the balance of professional fees related to foreign withholding tax subject to future reimbursement to the investment adviser was $131,932 for Schwab International Index Fund.
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
Interfund Transactions
The funds may engage in direct transactions with certain other Schwab funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended April 30, 2017, each fund’s total aggregate security transactions with other Schwab funds as well as any realized gains (losses) were as follows:
| | Total Aggregate Transactions | Realized Gains (Losses) |
| Schwab S&P 500 Index Fund | $77,806,606 | $161,383 |
| Schwab 1000 Index Fund | 53,996,914 | 12,205,594 |
| Schwab Small-Cap Index Fund | 15,810,447 | (1,283,688) |
| Schwab Total Stock Market Index Fund | 36,172,770 | (1,225,971) |
| Schwab International Index Fund | — | — |
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trusts were in compliance with these limitations throughout the report period. Effective March 1, 2017, the funds do not pay any interested or non-interested (independent trustees) trustees. The independent trustees are paid by CSIM. Prior to March 1, 2017, the funds paid independent trustees, as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other U.S. registered investment companies managed by CSIM in a joint, syndicated, committed $555 million line of credit (the Credit Facility). Under the terms of the Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund paid a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the Credit Facility. There were no borrowings from the line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
7. Derivatives:
Certain funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The fair value and variation margin for futures contracts held at April 30, 2017 are presented on the Condensed Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in unrealized gains (losses) on futures contracts are presented on the Statement of Operations, if any. Refer to financial note 2(b) for the funds'
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Financial Notes, unaudited (continued)
7. Derivatives (continued):
accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended April 30, 2017, the month-end average contract values of futures contracts held by the funds and the month-end average number of contracts held were as follows:
| | Contract Values | Number of Contracts |
| Schwab S&P 500 Index Fund | $196,691,657 | 1,722 |
| Schwab 1000 Index Fund | 57,452,904 | 498 |
| Schwab Small-Cap Index Fund | 25,788,783 | 329 |
| Schwab Total Stock Market Index Fund | 27,123,877 | 255 |
| Schwab International Index Fund | 31,177,371 | 360 |
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended April 30, 2017, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
| | Purchases
of Securities | Sales/Maturities
of Securities |
| Schwab S&P 500 Index Fund | $1,318,317,393 | $164,062,245 |
| Schwab 1000 Index Fund | 147,441,741 | 301,467,802 |
| Schwab Small-Cap Index Fund | 241,958,128 | 39,934,367 |
| Schwab Total Stock Market Index Fund | 453,532,123 | 45,300,627 |
| Schwab International Index Fund | 199,872,360 | 28,182,073 |
9. Redemption Fee:
Prior to February 28, 2017, the funds charged a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds on the Statement of Changes in Net Assets. Effective February 28, 2017, the funds no longer charge redemption fees. The redemption fees charged during the current and prior periods were as follows:
| | Current Period
(11/1/16-4/30/17) | Prior Period
(11/1/15-10/31/16) |
| Schwab S&P 500 Index Fund | $110,332 | $369,401 |
| Schwab 1000 Index Fund | 8,551 | 27,980 |
| Schwab Small-Cap Index Fund | 13,129 | 12,505 |
| Schwab Total Stock Market Index Fund | 35,265 | 54,925 |
| Schwab International Index Fund | 13,908 | 46,804 |
10. Federal Income Taxes:
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2016, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
| Expiration Date | 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 |
| October 31, 2017 | $— | | $— | | $— | | $— | | $13,252,761 |
| No expiration* | — | | — | | — | | — | | 95,507,243 |
| Total | $— | | $— | | $— | | $— | | $108,760,004 |
| * | As a result of the passage of the Regulated Investment Company Modernization Act of 2010, capital losses incurred after December 31, 2010 may now be carried forward indefinitely, but must retain the character of the original loss. |
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Financial Notes, unaudited (continued)
10. Federal Income Taxes (continued):
As of October 31, 2016, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2016, the funds did not incur any interest or penalties.
11. Recent Regulatory Development:
In October 2016, the SEC adopted new rules and amended existing rules (together, final rules) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the funds' financial statements and related disclosures.
12. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Investment Advisory Agreement Approval
The Investment Company Act of 1940 requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the Independent Trustees), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the investment advisory agreement between Schwab Capital Trust and Schwab Investments (collectively, the Trusts) and Charles Schwab Investment Management, Inc. (CSIM) with respect to the existing funds in the Trusts, including Schwab S&P 500 Index Fund, Schwab 1000 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund (each, a Fund and collectively, the Funds) (Current Advisory Agreement) with respect to each Fund at meetings held on May 9, 2016 and June 1, 2016, and the Board approved the renewal of the Current Advisory Agreement with respect to each Fund for an additional one-year term at the meeting held on June 1, 2016. The Board, including a majority of the Independent Trustees, also considered information specifically relating to its consideration of an amended and restated investment advisory agreement between the Trusts and CSIM with respect to the Funds (Proposed Advisory Agreement), including a proposed unitary fee structure, with respect to each Fund, and approved the Proposed Advisory Agreement at a meeting held on January 18, 2017.
In considering whether to approve the Proposed Advisory Agreement, the Board considered and discussed a wide variety of materials provided by CSIM. The Board also considered detailed information regarding the expenses of similarly situated competitor funds provided by CSIM based on information prepared by a third party. The Board had the opportunity to discuss the Proposed Advisory Agreement at length with representatives of CSIM and with independent legal counsel, including considering information and representations from CSIM supporting a conclusion that the Proposed Advisory Agreement will not result in any reduction in the nature or level of services that are provided to the Funds by CSIM. The Board, including the Independent Trustees, determined that the information received and the basis for the renewal of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016 would remain the basis for the Board’s approval of the Proposed Advisory Agreement,
as modified and updated by the consideration of performance information regarding the Funds received subsequent to those meeting and by the information contained in the materials received by the Board in connection with the proposed change in Fund fee structure and expenses as reflected in the Proposed Advisory Agreement.
The factors considered by the Board in approving the Proposed Advisory Agreement included:
| 1. | The nature, extent and quality of the services to be provided to the Funds under the Proposed Advisory Agreement, including the resources CSIM and its affiliates would be dedicating to the Funds; |
| 2. | Each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
| 3. | Each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds, exchange traded funds and other accounts; |
| 4. | The profitability of CSIM and its affiliates, including 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 Proposed Advisory Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. As part of its consideration of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, 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 had evaluated, among other things, CSIM’s experience, track record, compliance program, resources dedicated to hiring and retaining qualified personnel, and information security resources. The Trustees had also considered information provided by CSIM relating to each Fund’s portfolio management team, portfolio strategy and risk oversight structure and internal investment guidelines. The Trustees considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services and channel alternatives such as investment and research tools, internet access and an array of account features that benefit the Funds and certain of their shareholders. The Trustees had also considered Schwab’s reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that many of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board had 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
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
its affiliates dedicated to the Funds supported renewal of the Current Advisory Agreement with respect to the Funds. When considering the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Board acknowledged these previous considerations and took into account that, although the net compensation flowing to CSIM and its affiliates is expected to decrease, CSIM had undertaken that it would not reduce the nature, extent or quality of services provided under the Proposed Advisory Agreement as compared to the Current Advisory Agreement. In this regard, the Board noted that, in fact, under the Proposed Advisory Agreement, CSIM would be obligated to bear certain additional expenses and provide certain additional services to the Funds that CSIM is not currently required to bear and provide under the Current Advisory Agreement. The Board sought and received confirmation from CSIM and its affiliates that they are prepared to commit the resources necessary for the provision of services and bearing of expenses under the Proposed Advisory Agreement, notwithstanding the decrease in revenue to CSIM and its affiliates that would result (at current Fund asset levels) under the Proposed Advisory Agreement.
Fund Performance. In considering the renewal of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, the Board considered Fund performance. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered the risk profile for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees had further considered the level of Fund performance in the context of their review of Fund expenses and adviser profitability discussed below and had also noted that performance is reviewed throughout the year by a designated committee of the Board and by the Board. Following such evaluation the Board had concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Current Advisory Agreement with respect to the Funds. When considering the approval of the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Board took into account these considerations as well as the performance information relating to the Funds that CSIM had provided and the Board had reviewed subsequent to the approval of the Current Advisory Agreement.
Fund Expenses. As part of its consideration of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, the Trustees considered the rate of compensation called for by the Current Advisory Agreement and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and
calculated by an independent provider of investment company data. The Trustees considered the effects of CSIM’s and Schwab’s practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees had also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund or until the Board authorizes the termination of CSIM’s contractual commitment. The Trustees had also considered fees charged by CSIM to other mutual funds and to other types of accounts, such as exchange-traded funds and separately managed 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, and any differences in the nature and scope of the services CSIM provides to these other accounts, as well as differences in the market for these types of accounts. Following such evaluation, the Board had concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Current Advisory Agreement with respect to the Funds. In considering the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Board took into account these factors as well as that: (i) the structure of the proposed management fee would change to a unitary fee structure; (ii) CSIM will remove the shareholder servicing fee currently paid by each Fund; (iii) the expected total operating expenses for each Fund under the Proposed Advisory Agreement would be lower than what the total operating expenses could reach at any asset level under the current fee structure with the Current Advisory Agreement and the shareholder servicing fee; (iv) the fees payable by CSIM under the Proposed Advisory Agreement for each Fund would include some Fund operating costs that are currently paid by the Fund and outside the expense cap for the Fund, such as interest expenses; and (v) the proposed management fee for each Fund will remain competitive when compared to similarly situated competitor funds.
Profitability. In their consideration of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly, and reviewed profitability on a pre-tax basis, both with and without regard to distribution expenses. In this connection, the Trustees had reviewed management’s profitability analyses and methodology, together with certain commentary thereon from an independent accounting firm. The Trustees had also reviewed profitability of CSIM relating to the Schwab fund complex as a whole, noting the benefit to Fund shareholders of being part of the Schwab fund complex, including the allocations of certain fixed costs across other funds in the complex. The Trustees had 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
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Trustees considered whether the varied levels of compensation and profitability under the Current Advisory Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board had concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Current Advisory Agreement with respect to the Funds. As part of its consideration of the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Trustees took into account these considerations as well as additional information relating to the costs and net revenue reductions to CSIM and its affiliates in connection with implementing the proposed unitary fee structure under the Proposed Advisory Agreement. In particular, the Board considered, among other things, the additional expenses to be borne by CSIM under the Proposed Advisory Agreement, and the elimination of the shareholder servicing fees.
Economies of Scale. In considering the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, the Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated management fee schedule or other means, including any fee waivers or expense caps by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when Fund assets were relatively small through their contractual expense waivers. Based on this evaluation, the Board had concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale. In considering the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Board took these items into consideration, but noted that the structure of the management fee would change to a unitary fee structure. The Board concluded that, although each Fund’s unitary fee structure under the Proposed Advisory Agreement would not have breakpoints, each Fund would benefit from the fact that the expected total operating expenses under the Proposed Advisory Agreement for the Fund would be lower than what the total operating expenses could reach at any
asset level under the current fee structure with the Current Advisory Agreement and the shareholder servicing fee.
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 Proposed Advisory Agreement with respect to the Funds and concluded that the compensation under the Proposed Advisory Agreement with respect to the Funds is fair and reasonable in light of the services that CSIM will provide and the expenses it will bear thereunder and such other matters as the Trustees considered to be relevant in the exercise of their reasonable judgment.
Approval of Amendment to Proposed Advisory Agreement
At a meeting held on February 28, 2017, the Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the approval of an amendment to the Proposed Advisory Agreement to reflect a reduction to the rate paid by Schwab Capital Trust to CSIM as compensation for CSIM's services rendered to Schwab Small-Cap Index Fund and Schwab International Index Fund. The Board reviewed materials provided by CSIM and also took into account the detailed information that the Board reviewed at the May 9, 2016, June 1, 2016 and January 18, 2017 meetings during the course of its consideration and approval of the renewal of the Current Advisory Agreement and approval of the Proposed Advisory Agreement.
Based on the Trustees' deliberation and their evaluation of the information described above, the Board, including a majority of the Independent Trustees, approved the amendment to the Proposed Advisory Agreement with respect to Schwab Small-Cap Index Fund and Schwab International Index Fund and concluded the change to the rate paid by the Trust to CSIM as compensation for CSIM's services rendered to Schwab Small-Cap Index Fund and Schwab International Index Fund will not result in any reduction in the nature or quality of services provided by CSIM under the Proposed Advisory Agreement.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust and Schwab Investments, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 110 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| 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. | 110 | 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 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). | 110 | 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 – Apr. 2012). | 110 | None |
David L. Mahoney
1954
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 110 | Director, Symantec Corporation (2003 – present)
Director, Corcept Therapeutics Incorporated (2004 – present)
Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
| 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 |
Kiran M. Patel
1948
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus 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). | 110 | Director, KLA-Tencor Corporation (2008 – present) |
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). | 110 | 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 and Laudus 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). | 110 | 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 since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 110 | 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 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). | 110 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present)
Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
| 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 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); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 110 | Director, The Charles Schwab Corporation (2008 – present) |
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) (Mar. 2007 – Aug. 2010). | 110 | 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 (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 110 | 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 A. 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 and Laudus 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) (Mar. 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 and Laudus 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). |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
| 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 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 (Apr. 2005 – present). |
Omar Aguilar
1970
Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies
(Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 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 – Apr. 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 and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 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 (Apr. 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 and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 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 (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 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 and Laudus 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. |
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
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.
Bloomberg Barclays U.S. Aggregate Bond Index An index that represents securities that are SEC registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. The index excludes certain types of securities, including state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds.
Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $250 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Dow Jones U.S. Total Stock Market Index An index that measures the performance of all publicly traded stocks of companies headquartered in the U.S. for which pricing data is readily available - currently more than 3,800 stocks. The index is a float adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace.
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.
International Spliced Index An internally calculated index comprised of the Schwab International Index from inception of the Schwab International Index Fund until the close of business on December 20, 2011, the MSCI EAFE Index from December 21, 2011 until the close of business on February 28, 2013, and the MSCI EAFE Index (Net) from March 1, 2013 forward.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
restricted and illiquid securities Restricted securities are securities that are subject to legal restrictions on their sale. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933 (the 1933 Act), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. Illiquid securities generally are any securities that cannot be disposed of promptly and in the ordinary course of business at approximately the amount at which a fund has valued the instruments. The liquidity of a fund’s investments is monitored under the supervision and direction of the Board. Investments currently not considered liquid include repurchase agreements not maturing within seven days and certain restricted securities.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
Schwab 1000 Index An index that represents the performance of the largest 1,000 publicly traded companies in the United States. As a result of corporate actions, the index may be comprised of more or less than 1,000 securities.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Small-Cap Spliced Index An internally calculated index comprised of the Schwab Small-Cap Index from inception of the Schwab Small-Cap Index Fund until the close of business on December 14, 2011, and the Russell 2000 Index from December 15, 2011 forward.
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.
Schwab Equity Index Funds | Semiannual Report
Schwab Equity Index Funds
Charles Schwab Investment Management
As one of the nation’s largest asset managers, our goal is to provide investors with a diverse selection of foundational products that aim to deliver consistent performance at a competitive cost. The list below shows all currently available Schwab Funds.
Investors should carefully consider information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-877-824-5615 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Funds’ website at www.csimfunds.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.
Stock Funds
Schwab Core Equity Fund™
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity 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®
Asset Allocation Funds
Schwab Balanced Fund™
Schwab MarketTrack All Equity Portfolio™
Schwab MarketTrack Growth Portfolio™
Schwab MarketTrack Balanced Portfolio™
Schwab MarketTrack Conservative Portfolio™
Schwab Target Funds
Schwab Target Index Funds
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fund™
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™
Schwab® U.S. Aggregate Bond Index Fund
Schwab® Short-Term Bond Index Fund
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Some are 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®.
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
1-877-824-5615
© 2017 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
| 1 | You could lose money by investing in a money market fund. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The money market fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. |
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Semiannual Report | April 30, 2017
Schwab Active Equity Funds
Schwab Core Equity Fund™
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity Fund™
Schwab Health Care Fund™
Schwab® International Core
Equity Fund
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Schwab Active Equity Funds
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS), which was developed by, and is the exclusive property of, MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Schwab. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
| Total Return for the 6 Months Ended April 30, 2017 |
Schwab Core Equity Fund
(Ticker Symbol: SWANX) | 15.04% |
| S&P 500® Index | 13.32% |
| Fund Category: Morningstar Large Blend | 12.90% |
| Performance Details | pages 8-9 |
| |
Schwab Dividend Equity Fund
(Ticker Symbol: SWDSX) | 13.22% |
| Russell 1000® Value Index | 11.69% |
| Fund Category: Morningstar Large Value | 12.08% |
| Performance Details | pages 10-11 |
| |
Schwab Large-Cap Growth Fund
(Ticker Symbol: SWLSX) | 14.84% |
| Russell 1000® Growth Index | 15.23% |
| Fund Category: Morningstar Large Growth | 13.56% |
| Performance Details | pages 12-13 |
| |
Schwab Small-Cap Equity Fund
(Ticker Symbol: SWSCX) | 17.65% |
| Russell 2000® Index | 18.37% |
| Fund Category: Morningstar Small Blend | 16.89% |
| Performance Details | pages 14-15 |
| Total Return for the 6 Months Ended April 30, 2017 |
Schwab Hedged Equity Fund
(Ticker Symbol: SWHEX) | 8.29% 1 |
| S&P 500® Index | 13.32% |
| Fund Category: Morningstar Long-Short Equity | 6.81% |
| Performance Details | pages 16-17 |
| |
Schwab Health Care Fund2
(Ticker Symbol: SWHFX) | 13.25% |
| Dow Jones Global Health Care Index | 12.00% |
| Fund Category: Morningstar Health | 16.46% |
| Performance Details | pages 18-19 |
| |
Schwab International Core Equity Fund2
(Ticker Symbol: SICNX) | 14.99% |
| MSCI EAFE® Index (Net)3 | 11.47% |
| Fund Category: Morningstar Foreign Large Blend | 10.65% |
| Performance Details | pages 20-21 |
| Minimum Initial Investment4 | $100 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
| 1 | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations. See financial note 2 for more information. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | Please see the funds’ prospectus for further detail and eligibility requirements. |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.
Dear Shareholder,
At Charles Schwab Investment Management, we believe strategy is just as important as results. The foundational products we provide our investors are designed to deliver steady, reliable, long-term performance while making investing more transparent and less complicated. And that takes finding the right strategy for each fund we offer. As pleased as we are with the performance of the Schwab Active Equity Funds over the reporting period, we’re just as proud of the process behind it.
Since our last shareholder report, stock prices rallied in both the U.S. and abroad. The six-month reporting period ended April 30, 2017 was marked by steady gains for stocks, fueled by improving economic fundamentals and corporate earnings, in addition to investor optimism around tax reform and trade policy proposals promised by the new U.S. administration. The S&P 500® Index returned 13.3% over the six-month span, while other key domestic and international stock indexes reported similarly strong gains. Over the reporting period, most of the Schwab Active Equity Funds performed well and delivered solid gains.
Asset Class Performance Comparison % returns during the six months ended 4/30/2017
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
From the President (continued)
“ The foundational products we provide our investors are designed to deliver steady, reliable, long-term performance while making investing more transparent and less complicated.”
The question many market-watchers are pondering now is how much of the run-up in prices is due to strengthening in global economic conditions, and how much is predicated on tax reform and other policy measures that may or may not come to pass.
When it comes to managing the Schwab Active Equity Funds, we set such questions aside in favor of a bottom-up approach that focuses on each company’s underlying strengths. Utilizing Schwab Equity Ratings® and Schwab proprietary international stock research, the investment team looks for three qualities in the stocks of companies they select for the funds’ investments: strong fundamentals, attractive valuation, and recognized momentum. When those characteristics favorably align, the stock becomes a candidate for inclusion in one or more of the funds. Using a combination of these quantitative rankings and qualitative insights, the investment team seeks to optimize the balance between risk and return in each of the funds.
We feel that an approach that overlays quantitative signals with a deep understanding of companies, economics, and market dynamics can serve as a complement to the array of other products we offer that employ both passive and top-down active strategies. We believe that inefficiencies exist in the markets, and that our disciplined investment process can help exploit these inefficiencies and drive long-term performance for our investors’ portfolios.
Thank you for investing with Charles Schwab Investment Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab Active Equity Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.csimfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
The Investment Environment
Over the six-month reporting period ended April 30, 2017, both U.S. and international equity markets generated positive returns. The Dow Jones Industrial Average closed above 20,000 for the first time in January (and continued its climb to close above 21,000 in March), and the current bull market for U.S. stocks entered its eighth year. Meanwhile, improving global growth and continued accommodative central bank policies supported the performance of many international equities. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 13.32%, while the Russell 2000® Index, a U.S. small-cap company measure, returned 18.37% for the reporting period. Internationally, the MSCI EAFE® Index (Net), a broad measure of international developed equity performance, returned 11.47% for the same time period.
Market volatility generally eased over the reporting period, though fluctuations tied to elections in both the U.S. and abroad occurred during the six months. In the U.S., election-related volatility picked up in the weeks leading up to the U.S. presidential election and continued after Election Day. U.S. equity futures dropped sharply soon after the election results were announced, then rebounded almost immediately the following day and generally maintained an upward trajectory throughout most of the reporting period. This rally was fueled by investor expectations for reflationary policies from the Trump administration, including increased fiscal spending, tax reform, and reduced financial regulation. Traditionally cyclical sectors in particular, such as Information Technology, especially benefitted from these investor expectations. However, lack of progress in certain of the Trump administration’s policies increased uncertainty and contributed to muted stock market gains in the last months of the reporting period. Meanwhile, political uncertainty in the eurozone, including elections in the Netherlands and France, also contributed to overseas market volatility. In mid-March, center-right Dutch Prime Minister Mark Rutte beat far-right candidate Geert Wilders, while the race between front-runners Emmanuel Macron and Marine Le Pen in France was closer than many expected in the first round of voting. (Macron was elected to the French presidency in the run-off election the week following the end of the reporting period.)
The Federal Reserve (Fed) and the People’s Bank of China (PBOC) tightened monetary policies over the reporting period, while many other central banks maintained or increased accommodative policies. With improvements in several key U.S. economic measures and an uptick in inflation, the Fed raised the federal funds rate twice over the reporting period, first in December 2016 and again in March 2017. Market responses to these changes were muted as both increases were largely already priced into global equity markets. In China, prior accommodative measures led to credit expanding at twice the rate of economic growth, prompting the PBOC to take steps to address this imbalance and reduce long-term financial risk. Meanwhile, the European Central Bank extended its asset purchase program to at least December 2017 and announced it was loosening the restrictions on the types of bonds it is allowed to purchase. The Bank of Japan maintained negative interest rates, quantitative easing, and yield curve management over the six-month reporting period. The positive performance of many international equities and improvement in the global economic outlook over the reporting period suggested that these policies were achieving their intended results, effectively stimulating economic growth in both the eurozone and in Japan.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
The Investment Environment (continued)
U.S. economic data remained relatively steady compared to prior reporting periods. However, the spread between “hard” data, such as quarterly gross domestic product (GDP) numbers, and “soft” data, like consumer confidence and sentiment indexes, widened over the reporting period. Nonfarm payroll numbers were generally in line with expectations through February, fell noticeably in March, and then rebounded in April. GDP dropped to an annual rate of 2.1% in the fourth quarter of 2016 and fell even further in the first quarter of 2017, indicating a persistently moderate growth outlook. In contrast, consumer confidence rose after the November election of President Trump through the end of the reporting period, reaching its highest level since December 2000 in March. According to the National Federation of Independent Business (NFIB) Small Business Economic Trends Report, small business optimism also surged after Election Day and throughout the reporting period.
Overall global economic growth generally improved over the six-month reporting period. Eurozone economic activity picked up in both the fourth quarter of 2016 and the first quarter of 2017, and the entire eurozone bloc exited deflation by the end of January 2017. Meanwhile, the United Kingdom economy performed better than expected in the months following the decision in June 2016 to leave the European Union (Brexit) as progress toward an exit plan was made. In Japan, economic growth accelerated and consumer prices fell at a slower pace, with inflation on track to hit the target of 2% in the next two years, while rising inflation and decreasing lending costs in China contributed to a relatively stable economy over the reporting period.
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
 | Jonas Svallin, CFA, Vice President and Head of Active Equities, has overall responsibility for all aspects of the management of the funds and leads the Active Equity portfolio management and research team. Prior to joining CSIM in 2012, Mr. Svallin spent nearly three years as a partner and a director of quantitative analytics and research at Fiduciary Research & Consulting, where he provided oversight of quantitative analytics and risk management efforts. From 2003 to 2009, Mr. Svallin was a principal and head portfolio manager at Algert Coldiron Investors LLC (now known as Algert Global). Prior to joining Algert, Mr. Svallin worked as a quantitative research associate at RCM Capital Management and a senior consultant at FactSet Research Systems. |
 | Wei Li, Ph.D., CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2012, Ms. Li spent more than ten years at BlackRock, Inc. (formerly Barclays Global Investors), where she held a number of positions. From 2001 to 2009, she worked in various roles in the Global Advanced Active group, including portfolio management and quantitative research for both U.S. and international equity markets. After 2009, she worked in the defined contribution research and product development area for almost two years. |
 | Iain Clayton, CFA, FRM, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Core Equity Fund, Schwab International Core Equity Fund and Schwab Health Care Fund. Prior to joining CSIM in 2013, Mr. Clayton spent more than five years at SSI Investment Management, where he was a portfolio manager and director of quantitative research. In these roles, Mr. Clayton co-managed multiple investment strategies and developed quantitative models and valuation approaches. From 2004 to 2008, he worked as a portfolio manager and director at RCM Capital Management (now known as Allianz Global Investors) and helped manage various equity portfolios and developed fundamental-based stock selection models. Prior to that, he was a vice president at Eureka Investment Advisors for almost three years and also served as a senior quantitative analyst/assistant portfolio manager. He has also worked as a quantitative research analyst at RCM Capital Management. |
 | Xin Wen, CFA, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Large-Cap Growth Fund and the Schwab Dividend Equity Fund. Previously, she served as an Associate Portfolio Manager supporting the Schwab Active Equity Funds. Prior to joining CSIM in 2014, Ms. Wen spent nearly 10 years at Algert Global (formerly Algert Coldiron Investors), a quantitative market neutral hedge fund manager, where she held a number of positions, including Assistant Portfolio Manager and Macroeconomic Research Analyst. In her various roles, she supported both U.S. and International funds and acted as the lead portfolio manager for the Canadian fund. |
Schwab Active Equity Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Core Equity Fund (7/1/96) | 15.04% | 19.54% | 12.74% | 6.24% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Fund Category: Morningstar Large Blend3 | 12.90% | 16.53% | 12.14% | 6.19% |
| Fund Expense Ratio4: 0.73% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On May 21, 2009 and September 7, 2012, respectively, the Laudus U.S. MarketMasters Fund and the Schwab Premier Equity Fund merged into the fund. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 139 |
| Weighted Average Market Cap (millions) | $147,021 |
| Price/Earnings Ratio (P/E) | 20.1 |
| Price/Book Ratio (P/B) | 2.8 |
| Portfolio Turnover Rate1 | 42% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Dividend Equity Fund (9/2/03) | 13.22% | 15.22% | 11.08% | 5.70% |
| Russell 1000® Value Index | 11.69% | 16.55% | 13.32% | 5.53% |
| Dividend Equity Spliced Index | 11.69% | 16.55% | 13.09% | 6.88% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Fund Category: Morningstar Large Value3 | 12.08% | 15.85% | 11.69% | 5.18% |
| Fund Expense Ratio4: 0.89% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On October 7, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 7, 2009 is that of the fund’s former Select Shares. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 113 |
| Weighted Average Market Cap (millions) | $87,771 |
| Price/Earnings Ratio (P/E) | 18.2 |
| Price/Book Ratio (P/B) | 1.9 |
| Portfolio Turnover Rate1 | 37% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Large-Cap Growth Fund (10/3/05) | 14.84% | 19.64% | 12.63% | 7.06% |
| Russell 1000® Growth Index | 15.23% | 19.50% | 13.87% | 8.88% |
| Fund Category: Morningstar Large Growth3 | 13.56% | 17.81% | 12.22% | 7.56% |
| Fund Expense Ratios4: Net 0.99%; Gross 1.04% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On October 7, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 7, 2009 is that of the fund’s former Select Shares. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 118 |
| Weighted Average Market Cap (millions) | $171,798 |
| Price/Earnings Ratio (P/E) | 21.8 |
| Price/Book Ratio (P/B) | 4.1 |
| Portfolio Turnover Rate1 | 37% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Small-Cap Equity Fund (7/1/03) | 17.65% | 23.36% | 14.81% | 6.81% |
| Russell 2000® Index | 18.37% | 25.63% | 12.95% | 7.05% |
| Fund Category: Morningstar Small Blend3 | 16.89% | 21.71% | 11.76% | 6.45% |
| Fund Expense Ratio4: 1.10% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 28, 2009 is that of the fund’s former Select Shares. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 284 |
| Weighted Average Market Cap (millions) | $1,951 |
| Price/Earnings Ratio (P/E) | 20.0 |
| Price/Book Ratio (P/B) | 2.2 |
| Portfolio Turnover Rate1 | 51% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Hedged Equity Fund (9/3/02) | 8.29% 3 | 13.68% | 8.54% | 4.13% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Fund Category: Morningstar Long-Short Equity4 | 6.81% | 7.65% | 5.47% | 3.99% |
| Fund Expense Ratios5: Net 1.85%; Gross 1.87% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The Schwab Hedged Equity Fund’s long positions can decline in value at the same time the value of its shorted stocks increases, thereby increasing the potential for loss. The potential loss associated with short positions is much greater than the original value of the securities sold. The use of borrowing and short sales may cause the fund to have higher expenses than those of equity funds that do not use such techniques.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance history of the fund prior to September 28, 2009 is that of the fund’s former Select Shares. |
| 3 | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | |
| Long Holdings | 152 |
| Short Holdings | 111 |
| Weighted Average Market Cap (millions) | |
| Long Holdings | $73,198 |
| Short Holdings | $6,761 |
| Price/Earnings Ratio (P/E) | |
| Long Holdings | 19.8 |
| Short Holdings | 26.3 |
| Price/Book Ratio (P/B) | |
| Long Holdings | 2.5 |
| Short Holdings | 2.7 |
| Portfolio Turnover Rate1 | 87% |
| Portfolio Turnover Rate excluding short sales1 | 54% |
Top Equity Long Holdings % of Net Assets2
Top Equity Short Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Active Equity Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Health Care Fund (7/3/00) | 13.25% | 9.34% | 16.06% | 9.86% |
| Dow Jones Global Health Care Index | 12.00% | 7.58% | 14.30% | 8.43% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Fund Category: Morningstar Health2 | 16.46% | 12.67% | 16.77% | 10.79% |
| Fund Expense Ratio3: 0.80% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Since the Schwab Health Care Fund focuses its investments on companies involved in a specific sector, this fund may involve a greater degree of risk than an investment in mutual funds that do not concentrate their investments.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 81 |
| Weighted Average Market Cap (millions) | $95,866 |
| Price/Earnings Ratio (P/E) | 22.6 |
| Price/Book Ratio (P/B) | 3.9 |
| Portfolio Turnover Rate1 | 21% |
Industry Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Industry Classification: S&P and MSCI.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
| Fund: Schwab International Core Equity Fund (5/30/08) | 14.99% | 17.16% | 9.24% | 2.95% |
| MSCI EAFE® Index (Net)3 | 11.47% | 11.29% | 6.78% | 1.13% |
| MSCI EAFE® Index (Gross) | 11.73% | 11.83% | 7.27% | 1.59% |
| Fund Category: Morningstar Foreign Large Blend4 | 10.65% | 12.00% | 5.94% | 0.70% |
| Fund Expense Ratios5: Net 0.86%; Gross 0.91% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On October 7, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance history of the fund prior to October 7, 2009 is that of the fund’s former Institutional Shares. On December 3, 2009, the Laudus Rosenberg International Equity Fund merged into the fund. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 198 |
| Weighted Average Market Cap (millions) | $44,405 |
| Price/Earnings Ratio (P/E) | 14.2 |
| Price/Book Ratio (P/B) | 1.8 |
| Portfolio Turnover Rate1 | 40% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning November 1, 2016 and held through April 30, 2017.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, or any non-routine expenses, such as proxy fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs or non-routine expenses were included, your costs would have been higher.
| | Expense Ratio
(Annualized)1 | Beginning
Account Value
at 11/1/16 | Ending
Account Value
(Net of Expenses)
at 4/30/17 | Expenses Paid
During Period
11/1/16-4/30/172 |
| Schwab Core Equity Fund | | | | |
| Actual Return | 0.73% | $1,000.00 | $1,150.40 | $3.89 |
| Hypothetical 5% Return | 0.73% | $1,000.00 | $1,021.18 | $3.66 |
| Schwab Dividend Equity Fund | | | | |
| Actual Return | 0.88% | $1,000.00 | $1,132.20 | $4.65 |
| Hypothetical 5% Return | 0.88% | $1,000.00 | $1,020.44 | $4.41 |
| Schwab Large-Cap Growth Fund | | | | |
| Actual Return | 0.99% | $1,000.00 | $1,148.40 | $5.27 |
| Hypothetical 5% Return | 0.99% | $1,000.00 | $1,019.89 | $4.96 |
| Schwab Small-Cap Equity Fund | | | | |
| Actual Return | 1.09% | $1,000.00 | $1,176.50 | $5.88 |
| Hypothetical 5% Return | 1.09% | $1,000.00 | $1,019.39 | $5.46 |
| Schwab Hedged Equity Fund | | | | |
| Actual Return | 1.78% | $1,000.00 | $1,083.60 | $9.20 |
| Hypothetical 5% Return | 1.78% | $1,000.00 | $1,015.97 | $8.90 |
| Schwab Health Care Fund | | | | |
| Actual Return | 0.80% | $1,000.00 | $1,132.50 | $4.23 |
| Hypothetical 5% Return | 0.80% | $1,000.00 | $1,020.83 | $4.01 |
| Schwab International Core Equity Fund | | | | |
| Actual Return | 0.86% | $1,000.00 | $1,149.90 | $4.58 |
| Hypothetical 5% Return | 0.86% | $1,000.00 | $1,020.54 | $4.31 |
| 1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by the 365 days of the fiscal year. |
Schwab Active Equity Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $19.65 | $23.10 | $25.48 | $23.46 | $18.80 | $16.81 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.13 1 | 0.38 1 | 0.30 1 | 0.30 | 0.32 | 0.26 |
| Net realized and unrealized gains (losses) | 2.80 | (0.52) | 1.05 | 3.60 | 4.51 | 2.07 |
| Total from investment operations | 2.93 | (0.14) | 1.35 | 3.90 | 4.83 | 2.33 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.34) | (0.36) | (0.33) | (0.22) | (0.17) | (0.34) |
| Distributions from net realized gains | — | (2.95) | (3.40) | (1.66) | — | — |
| Total distributions | (0.34) | (3.31) | (3.73) | (1.88) | (0.17) | (0.34) |
| Net asset value at end of period | $22.24 | $19.65 | $23.10 | $25.48 | $23.46 | $18.80 |
| Total return | 15.04% 2 | (0.50%) | 5.61% | 17.88% | 25.89% | 13.99% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.73% 3 | 0.73% | 0.74% | 0.72% | 0.72% | 0.72% |
| Gross operating expenses | 0.73% 3 | 0.73% | 0.74% | 0.72% | 0.73% | 0.73% |
| Net investment income (loss) | 1.19% 3 | 1.93% | 1.29% | 1.19% | 1.51% | 1.37% |
| Portfolio turnover rate | 42% 2 | 80% | 81% | 63% | 80% | 45% 4 |
| Net assets, end of period (x 1,000,000) | $2,188 | $2,075 | $2,363 | $2,317 | $2,247 | $1,880 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Portfolio turnover excludes the impact of investment activities from mergers with other funds.
Schwab Active Equity Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.6% | Common Stock | 1,751,147,592 | 2,179,879,724 |
| 0.4% | Other Investment Company | 7,624,324 | 7,624,324 |
| 100.0% | Total Investments | 1,758,771,916 | 2,187,504,048 |
| 0.0% | Other Assets and Liabilities, Net | | 617,631 |
| 100.0% | Net Assets | | 2,188,121,679 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.6% of net assets |
| |
| Automobiles & Components 1.5% |
| Lear Corp. | 228,545 | 32,604,230 |
| |
| Banks 5.1% |
| Bank of America Corp. | 373,733 | 8,722,928 |
| Citigroup, Inc. | 729,100 | 43,104,392 |
| Citizens Financial Group, Inc. | 250,015 | 9,178,051 |
| Essent Group Ltd. * | 242,942 | 8,991,283 |
| JPMorgan Chase & Co. | 154,004 | 13,398,348 |
| Regions Financial Corp. | 1,363,700 | 18,750,875 |
| The PNC Financial Services Group, Inc. | 72,593 | 8,693,012 |
| | | 110,838,889 |
| |
| Capital Goods 8.2% |
| Allison Transmission Holdings, Inc. | 608,854 | 23,550,473 |
| Carlisle Cos., Inc. | 229,359 | 23,254,709 |
| Curtiss-Wright Corp. | 85,820 | 8,020,737 |
| Illinois Tool Works, Inc. | 23,614 | 3,260,857 |
| Ingersoll-Rand plc | 164,581 | 14,606,564 |
| L3 Technologies, Inc. | 38,923 | 6,685,804 |
| Oshkosh Corp. | 77,493 | 5,377,239 |
| Owens Corning | 511,903 | 31,149,298 |
| Stanley Black & Decker, Inc. | 311,058 | 42,350,547 |
| The Boeing Co. | 115,156 | 21,284,283 |
| | | 179,540,511 |
| |
| Commercial & Professional Services 1.3% |
| ManpowerGroup, Inc. | 239,199 | 24,154,315 |
| The Dun & Bradstreet Corp. | 42,357 | 4,642,751 |
| | | 28,797,066 |
| |
| Consumer Durables & Apparel 0.6% |
| Michael Kors Holdings Ltd. * | 255,983 | 9,555,845 |
| Ralph Lauren Corp. | 42,033 | 3,392,904 |
| | | 12,948,749 |
| |
| Consumer Services 2.6% |
| Aramark | 284,719 | 10,397,938 |
| Darden Restaurants, Inc. | 137,981 | 11,754,601 |
| Extended Stay America, Inc. | 187,571 | 3,271,238 |
| International Game Technology plc | 126,104 | 2,799,509 |
| Security | Number
of Shares | Value ($) |
| Las Vegas Sands Corp. | 93,475 | 5,514,090 |
| Starbucks Corp. | 160,092 | 9,615,126 |
| Wyndham Worldwide Corp. | 148,728 | 14,175,266 |
| | | 57,527,768 |
| |
| Diversified Financials 3.3% |
| Capital One Financial Corp. | 141,156 | 11,346,119 |
| Discover Financial Services | 305,014 | 19,090,826 |
| Morgan Stanley | 672,463 | 29,164,721 |
| The Bank of New York Mellon Corp. | 108,763 | 5,118,387 |
| Voya Financial, Inc. | 191,245 | 7,148,738 |
| | | 71,868,791 |
| |
| Energy 5.5% |
| Anadarko Petroleum Corp. | 34,631 | 1,974,660 |
| Baker Hughes, Inc. | 440,077 | 26,127,371 |
| Chevron Corp. | 190,793 | 20,357,613 |
| ConocoPhillips | 346,220 | 16,587,400 |
| Exxon Mobil Corp. | 336,806 | 27,500,210 |
| Rowan Cos. plc, Class A * | 121,345 | 1,707,324 |
| Valero Energy Corp. | 415,560 | 26,849,332 |
| | | 121,103,910 |
| |
| Food & Staples Retailing 2.7% |
| Sysco Corp. | 116,126 | 6,139,581 |
| Wal-Mart Stores, Inc. | 694,565 | 52,217,397 |
| | | 58,356,978 |
| |
| Food, Beverage & Tobacco 5.2% |
| Altria Group, Inc. | 21,661 | 1,554,827 |
| Bunge Ltd. | 153,453 | 12,127,391 |
| Dr Pepper Snapple Group, Inc. | 93,983 | 8,613,542 |
| Fresh Del Monte Produce, Inc. | 23,448 | 1,437,362 |
| Ingredion, Inc. | 50,749 | 6,283,741 |
| Kellogg Co. | 172,479 | 12,246,009 |
| PepsiCo, Inc. | 496,912 | 56,290,191 |
| Philip Morris International, Inc. | 96,107 | 10,652,500 |
| Tyson Foods, Inc., Class A | 74,484 | 4,786,342 |
| | | 113,991,905 |
| |
| Health Care Equipment & Services 5.6% |
| Allscripts Healthcare Solutions, Inc. * | 180,300 | 2,158,191 |
| Becton, Dickinson & Co. | 66,497 | 12,432,944 |
| Boston Scientific Corp. * | 336,607 | 8,879,693 |
| Express Scripts Holding Co. * | 75,989 | 4,661,165 |
| Hill-Rom Holdings, Inc. | 104,104 | 7,874,427 |
| Hologic, Inc. * | 766,196 | 34,593,750 |
| IDEXX Laboratories, Inc. * | 81,159 | 13,612,799 |
| Masimo Corp. * | 62,710 | 6,442,825 |
| McKesson Corp. | 50,404 | 6,970,369 |
| UnitedHealth Group, Inc. | 96,414 | 16,860,880 |
| WellCare Health Plans, Inc. * | 55,497 | 8,513,795 |
| | | 123,000,838 |
| |
Schwab Active Equity Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Household & Personal Products 3.0% |
| Colgate-Palmolive Co. | 259,276 | 18,678,243 |
| Energizer Holdings, Inc. | 99,214 | 5,876,445 |
| HRG Group, Inc. * | 96,708 | 1,935,127 |
| Kimberly-Clark Corp. | 26,807 | 3,478,208 |
| Spectrum Brands Holdings, Inc. | 245,625 | 35,303,682 |
| | | 65,271,705 |
| |
| Insurance 5.1% |
| American Financial Group, Inc. | 134,646 | 13,102,402 |
| CNA Financial Corp. | 51,442 | 2,328,265 |
| Everest Re Group Ltd. | 101,513 | 25,551,837 |
| Loews Corp. | 139,973 | 6,525,541 |
| Reinsurance Group of America, Inc. | 166,530 | 20,822,911 |
| The Allstate Corp. | 381,250 | 30,991,813 |
| The Travelers Cos., Inc. | 102,361 | 12,453,239 |
| | | 111,776,008 |
| |
| Materials 2.4% |
| Axalta Coating Systems Ltd. * | 393,690 | 12,350,055 |
| Berry Global Group, Inc. * | 450,616 | 22,530,800 |
| Celanese Corp., Series A | 69,741 | 6,070,257 |
| Eastman Chemical Co. | 54,697 | 4,362,086 |
| Owens-Illinois, Inc. * | 328,458 | 7,166,953 |
| | | 52,480,151 |
| |
| Media 2.8% |
| Comcast Corp., Class A | 747,994 | 29,313,885 |
| Live Nation Entertainment, Inc. * | 276,362 | 8,887,802 |
| Sinclair Broadcast Group, Inc., Class A | 277,716 | 10,955,896 |
| Twenty-First Century Fox, Inc., Class A | 409,299 | 12,499,991 |
| | | 61,657,574 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 8.9% |
| AbbVie, Inc. | 105,710 | 6,970,518 |
| Amgen, Inc. | 147,119 | 24,027,475 |
| Biogen, Inc. * | 20,479 | 5,554,110 |
| Celgene Corp. * | 172,531 | 21,402,471 |
| Johnson & Johnson | 228,039 | 28,155,975 |
| Merck & Co., Inc. | 748,949 | 46,681,991 |
| PAREXEL International Corp. * | 34,833 | 2,223,390 |
| Pfizer, Inc. | 1,417,558 | 48,083,567 |
| Thermo Fisher Scientific, Inc. | 65,310 | 10,797,702 |
| | | 193,897,199 |
| |
| Real Estate 3.1% |
| American Homes 4 Rent, Class A | 121,344 | 2,796,979 |
| Apartment Investment & Management Co., Class A | 208,565 | 9,122,633 |
| DuPont Fabros Technology, Inc. | 241,698 | 12,459,532 |
| Equity LifeStyle Properties, Inc. | 158,484 | 12,822,941 |
| Retail Properties of America, Inc., Class A | 291,686 | 3,891,091 |
| Senior Housing Properties Trust | 543,810 | 11,702,791 |
| SL Green Realty Corp. | 143,555 | 15,063,226 |
| | | 67,859,193 |
| |
| Retailing 5.2% |
| Amazon.com, Inc. * | 58,523 | 54,133,190 |
| Best Buy Co., Inc. | 355,332 | 18,409,751 |
| Burlington Stores, Inc. * | 75,653 | 7,483,595 |
| Staples, Inc. | 335,342 | 3,276,291 |
| Security | Number
of Shares | Value ($) |
| The Home Depot, Inc. | 120,080 | 18,744,488 |
| The TJX Cos., Inc. | 137,078 | 10,779,814 |
| | | 112,827,129 |
| |
| Semiconductors & Semiconductor Equipment 2.3% |
| Applied Materials, Inc. | 288,411 | 11,712,371 |
| Cirrus Logic, Inc. * | 111,915 | 7,201,730 |
| Intel Corp. | 561,820 | 20,309,793 |
| Maxim Integrated Products, Inc. | 215,841 | 9,529,380 |
| ON Semiconductor Corp. * | 142,898 | 2,026,294 |
| | | 50,779,568 |
| |
| Software & Services 13.1% |
| Activision Blizzard, Inc. | 626,901 | 32,755,577 |
| Akamai Technologies, Inc. * | 88,243 | 5,377,529 |
| Alphabet, Inc., Class A * | 76,579 | 70,798,817 |
| Alphabet, Inc., Class C * | 10,791 | 9,776,214 |
| Booz Allen Hamilton Holding Corp. | 83,028 | 2,983,196 |
| Citrix Systems, Inc. * | 199,176 | 16,121,306 |
| Facebook, Inc., Class A * | 166,569 | 25,026,992 |
| Fidelity National Information Services, Inc. | 117,086 | 9,857,470 |
| International Business Machines Corp. | 143,696 | 23,033,032 |
| MasterCard, Inc., Class A | 20,285 | 2,359,551 |
| Microsoft Corp. | 1,056,008 | 72,294,308 |
| Teradata Corp. * | 208,820 | 6,093,368 |
| Total System Services, Inc. | 188,298 | 10,791,358 |
| | | 287,268,718 |
| |
| Technology Hardware & Equipment 5.9% |
| Apple, Inc. | 556,336 | 79,917,667 |
| CDW Corp. | 173,281 | 10,239,174 |
| HP, Inc. | 1,604,621 | 30,198,967 |
| Xerox Corp. | 1,321,641 | 9,502,599 |
| | | 129,858,407 |
| |
| Telecommunication Services 1.0% |
| AT&T, Inc. | 456,704 | 18,099,179 |
| T-Mobile US, Inc. * | 63,504 | 4,271,914 |
| | | 22,371,093 |
| |
| Transportation 1.0% |
| Delta Air Lines, Inc. | 142,476 | 6,474,109 |
| FedEx Corp. | 72,203 | 13,696,909 |
| Union Pacific Corp. | 11,074 | 1,239,845 |
| | | 21,410,863 |
| |
| Utilities 4.2% |
| CenterPoint Energy, Inc. | 919,875 | 26,244,034 |
| Edison International | 131,335 | 10,502,860 |
| FirstEnergy Corp. | 989,489 | 29,625,301 |
| Southwest Gas Holdings, Inc. | 38,717 | 3,242,936 |
| UGI Corp. | 443,129 | 22,227,350 |
| | | 91,842,481 |
| Total Common Stock |
| (Cost $1,751,147,592) | | 2,179,879,724 |
|
Schwab Active Equity Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Other Investment Company 0.4% of net assets |
| |
| Money Market Fund 0.4% |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (a) | 7,624,324 | 7,624,324 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,762,335,791 and the unrealized appreciation and depreciation were $439,830,224 and ($14,661,967), respectively, with a net unrealized appreciation of $425,168,257.
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $2,179,879,724 | $— | $— | $2,179,879,724 | |
| Other Investment Company1 | 7,624,324 | — | — | 7,624,324 | |
| Total | $2,187,504,048 | $— | $— | $2,187,504,048 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Active Equity Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $1,758,771,916) | | $2,187,504,048 |
| Receivables: | | |
| Investments sold | | 25,378,547 |
| Dividends | | 1,358,954 |
| Fund shares sold | | 934,713 |
| Prepaid expenses | + | 25,658 |
| Total assets | | 2,215,201,920 |
| Liabilities |
| Payables: | | |
| Investments bought | | 24,169,109 |
| Investment adviser and administrator fees | | 837,506 |
| Shareholder service fees | | 399,034 |
| Independent trustees' fees | | 626 |
| Fund shares redeemed | | 1,566,959 |
| Accrued expenses | + | 107,007 |
| Total liabilities | | 27,080,241 |
| Net Assets |
| Total assets | | 2,215,201,920 |
| Total liabilities | – | 27,080,241 |
| Net assets | | $2,188,121,679 |
| Net Assets by Source | | |
| Capital received from investors | | 1,673,459,920 |
| Net investment income not yet distributed | | 5,555,364 |
| Net realized capital gains | | 80,374,263 |
| Net unrealized capital appreciation | | 428,732,132 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $2,188,121,679 | | 98,393,999 | | $22.24 |
| | | | | |
Schwab Active Equity Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $702) | | $20,526,414 |
| Securities on loan, net | + | 8,880 |
| Total investment income | | 20,535,294 |
| Expenses |
| Investment adviser and administrator fees | | 5,011,868 |
| Shareholder service fees | | 2,621,588 |
| Shareholder reports | | 45,340 |
| Portfolio accounting fees | | 30,520 |
| Transfer agent fees | | 23,179 |
| Registration fees | | 22,433 |
| Custodian fees | | 21,993 |
| Professional fees | | 19,204 |
| Independent trustees' fees | | 10,535 |
| Interest expense | | 494 |
| Other expenses | + | 16,760 |
| Total expenses | | 7,823,914 |
| Expense reduction by CSIM and its affiliates | – | 23,179 |
| Net expenses | – | 7,800,735 |
| Net investment income | | 12,734,559 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 83,465,969 |
| Net realized gains on futures contracts | + | 109,990 |
| Net realized gains | | 83,575,959 |
| Net change in unrealized appreciation (depreciation) on investments | | 203,736,869 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 57,970 |
| Net change in unrealized appreciation (depreciation) | + | 203,794,839 |
| Net realized and unrealized gains | | 287,370,798 |
| Increase in net assets resulting from operations | | $300,105,357 |
Schwab Active Equity Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $12,734,559 | $41,695,228 |
| Net realized gains | | 83,575,959 | 2,984,723 |
| Net change in unrealized appreciation (depreciation) | + | 203,794,839 | (60,205,448) |
| Increase (decrease) in net assets from operations | | 300,105,357 | (15,525,497) |
| Distributions to Shareholders | |
| Distributions from net investment income | | (35,084,460) | (37,055,587) |
| Distributions from net realized gains | + | — | (299,452,225) |
| Total distributions | | ($35,084,460) | ($336,507,812) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 1,373,210 | $29,076,181 | 9,848,997 | $188,207,369 |
| Shares reinvested | | 1,218,621 | 25,249,831 | 12,520,076 | 244,391,884 |
| Shares redeemed | + | (9,822,830) | (206,470,053) | (19,037,976) | (368,198,142) |
| Net transactions in fund shares | | (7,230,999) | ($152,144,041) | 3,331,097 | $64,401,111 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 105,624,998 | $2,075,244,823 | 102,293,901 | $2,362,877,021 |
| Total increase or decrease | + | (7,230,999) | 112,876,856 | 3,331,097 | (287,632,198) |
| End of period | | 98,393,999 | $2,188,121,679 | 105,624,998 | $2,075,244,823 |
| Net investment income not yet distributed | | | $5,555,364 | | $27,905,265 |
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $14.39 | $16.43 | $19.17 | $18.22 | $14.52 | $13.15 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.11 1 | 0.31 1 | 0.29 1 | 0.27 | 0.32 | 0.27 |
| Net realized and unrealized gains (losses) | 1.79 | (0.29) | (0.21) | 2.16 | 3.70 | 1.38 |
| Total from investment operations | 1.90 | 0.02 | 0.08 | 2.43 | 4.02 | 1.65 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.12) | (0.32) | (0.27) | (0.29) | (0.32) | (0.28) |
| Distributions from net realized gains | — | (1.74) | (2.55) | (1.19) | — | — |
| Total distributions | (0.12) | (2.06) | (2.82) | (1.48) | (0.32) | (0.28) |
| Net asset value at end of period | $16.17 | $14.39 | $16.43 | $19.17 | $18.22 | $14.52 |
| Total return | 13.22% 2 | 0.26% | 0.12% | 14.26% | 27.99% | 12.65% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.88% 3 | 0.88% | 0.88% | 0.89% | 0.89% | 0.89% |
| Gross operating expenses | 0.88% 3 | 0.89% | 0.88% | 0.89% | 0.89% | 0.89% |
| Net investment income (loss) | 1.43% 3 | 2.18% | 1.71% | 1.47% | 1.97% | 1.89% |
| Portfolio turnover rate | 37% 2 | 74% | 73% | 72% | 64% | 55% |
| Net assets, end of period (x 1,000,000) | $1,471 | $1,560 | $1,872 | $2,053 | $1,804 | $1,390 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.8% | Common Stock | 1,248,183,097 | 1,467,242,360 |
| 0.3% | Short-Term Investment | 4,705,920 | 4,705,920 |
| 100.1% | Total Investments | 1,252,889,017 | 1,471,948,280 |
| (0.1%) | Other Assets and Liabilities, Net | | (764,382) |
| 100.0% | Net Assets | | 1,471,183,898 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.8% of net assets |
| |
| Automobiles & Components 1.7% |
| Lear Corp. | 170,587 | 24,335,941 |
| |
| Banks 11.0% |
| Bank of America Corp. | 1,132,758 | 26,438,572 |
| Citigroup, Inc. | 855,640 | 50,585,437 |
| Citizens Financial Group, Inc. | 679,394 | 24,940,554 |
| JPMorgan Chase & Co. | 229,467 | 19,963,629 |
| Regions Financial Corp. | 1,538,968 | 21,160,810 |
| TCF Financial Corp. | 753,209 | 12,435,480 |
| Wells Fargo & Co. | 118,286 | 6,368,518 |
| | | 161,893,000 |
| |
| Capital Goods 10.4% |
| Allison Transmission Holdings, Inc. | 651,751 | 25,209,729 |
| Carlisle Cos., Inc. | 88,451 | 8,968,047 |
| Curtiss-Wright Corp. | 50,569 | 4,726,179 |
| Ingersoll-Rand plc | 153,943 | 13,662,441 |
| L3 Technologies, Inc. | 18,479 | 3,174,138 |
| Oshkosh Corp. | 266,704 | 18,506,590 |
| Owens Corning | 401,286 | 24,418,253 |
| Raytheon Co. | 62,466 | 9,695,348 |
| Stanley Black & Decker, Inc. | 170,577 | 23,224,058 |
| The Boeing Co. | 116,320 | 21,499,426 |
| The Timken Co. | 6,341 | 305,953 |
| | | 153,390,162 |
| |
| Consumer Services 0.4% |
| Wyndham Worldwide Corp. | 61,625 | 5,873,479 |
| |
| Diversified Financials 6.9% |
| Berkshire Hathaway, Inc., Class B * | 70,661 | 11,673,904 |
| Capital One Financial Corp. | 249,969 | 20,092,508 |
| Discover Financial Services | 287,079 | 17,968,275 |
| Morgan Stanley | 614,263 | 26,640,586 |
| The Goldman Sachs Group, Inc. | 54,905 | 12,287,739 |
| Voya Financial, Inc. | 332,564 | 12,431,242 |
| | | 101,094,254 |
| |
| Energy 11.1% |
| Anadarko Petroleum Corp. | 98,348 | 5,607,803 |
| Baker Hughes, Inc. | 371,984 | 22,084,690 |
| Security | Number
of Shares | Value ($) |
| Chevron Corp. | 315,269 | 33,639,202 |
| ConocoPhillips | 431,503 | 20,673,309 |
| Exxon Mobil Corp. | 605,367 | 49,428,216 |
| Noble Energy, Inc. | 82,159 | 2,656,200 |
| Rowan Cos. plc, Class A * | 579,739 | 8,156,928 |
| Valero Energy Corp. | 283,265 | 18,301,752 |
| World Fuel Services Corp. | 62,606 | 2,305,779 |
| | | 162,853,879 |
| |
| Food & Staples Retailing 1.0% |
| Wal-Mart Stores, Inc. | 188,799 | 14,193,909 |
| |
| Food, Beverage & Tobacco 5.0% |
| Bunge Ltd. | 18,803 | 1,486,001 |
| Dr Pepper Snapple Group, Inc. | 44,948 | 4,119,484 |
| Fresh Del Monte Produce, Inc. | 77,494 | 4,750,382 |
| Kellogg Co. | 101,737 | 7,223,327 |
| PepsiCo, Inc. | 286,568 | 32,462,423 |
| Philip Morris International, Inc. | 117,003 | 12,968,613 |
| Tyson Foods, Inc., Class A | 175,513 | 11,278,465 |
| | | 74,288,695 |
| |
| Health Care Equipment & Services 6.2% |
| Allscripts Healthcare Solutions, Inc. * | 740,376 | 8,862,301 |
| Becton, Dickinson & Co. | 106,815 | 19,971,200 |
| Boston Scientific Corp. * | 107,336 | 2,831,524 |
| Express Scripts Holding Co. * | 281,432 | 17,263,039 |
| Hill-Rom Holdings, Inc. | 43,487 | 3,289,357 |
| Hologic, Inc. * | 69,379 | 3,132,462 |
| IDEXX Laboratories, Inc. * | 90,757 | 15,222,671 |
| Masimo Corp. * | 36,453 | 3,745,181 |
| McKesson Corp. | 69,427 | 9,601,060 |
| UnitedHealth Group, Inc. | 42,761 | 7,478,044 |
| | | 91,396,839 |
| |
| Household & Personal Products 3.7% |
| Colgate-Palmolive Co. | 273,030 | 19,669,081 |
| HRG Group, Inc. * | 216,730 | 4,336,768 |
| Kimberly-Clark Corp. | 42,591 | 5,526,182 |
| Spectrum Brands Holdings, Inc. | 146,990 | 21,126,873 |
| The Procter & Gamble Co. | 49,534 | 4,325,804 |
| | | 54,984,708 |
| |
| Insurance 8.2% |
| CNA Financial Corp. | 69,303 | 3,136,654 |
| Everest Re Group Ltd. | 84,844 | 21,356,083 |
| Loews Corp. | 341,722 | 15,931,080 |
| Reinsurance Group of America, Inc. | 221,011 | 27,635,215 |
| The Allstate Corp. | 408,694 | 33,222,735 |
| The Travelers Cos., Inc. | 155,580 | 18,927,863 |
| | | 120,209,630 |
| |
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Materials 2.6% |
| Axalta Coating Systems Ltd. * | 260,018 | 8,156,765 |
| Berry Global Group, Inc. * | 349,406 | 17,470,300 |
| Cabot Corp. | 201,305 | 12,116,548 |
| | | 37,743,613 |
| |
| Media 0.1% |
| Live Nation Entertainment, Inc. * | 41,830 | 1,345,253 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 5.3% |
| Amgen, Inc. | 46,304 | 7,562,369 |
| Johnson & Johnson | 72,334 | 8,931,079 |
| Merck & Co., Inc. | 341,778 | 21,303,023 |
| Pfizer, Inc. | 1,183,695 | 40,150,934 |
| | | 77,947,405 |
| |
| Real Estate 5.8% |
| American Homes 4 Rent, Class A | 142,868 | 3,293,107 |
| Apartment Investment & Management Co., Class A | 166,569 | 7,285,728 |
| DuPont Fabros Technology, Inc. | 78,224 | 4,032,447 |
| Empire State Realty Trust, Inc., Class A | 78,664 | 1,636,211 |
| Equity LifeStyle Properties, Inc. | 208,157 | 16,841,983 |
| Outfront Media, Inc. | 128,668 | 3,365,955 |
| PS Business Parks, Inc. | 4,662 | 566,620 |
| Retail Properties of America, Inc., Class A | 1,128,328 | 15,051,896 |
| Senior Housing Properties Trust | 1,045,523 | 22,499,655 |
| SL Green Realty Corp. | 106,796 | 11,206,104 |
| | | 85,779,706 |
| |
| Retailing 1.0% |
| Best Buy Co., Inc. | 279,449 | 14,478,253 |
| |
| Semiconductors & Semiconductor Equipment 1.5% |
| Applied Materials, Inc. | 119,047 | 4,834,498 |
| Intel Corp. | 475,425 | 17,186,614 |
| | | 22,021,112 |
| |
| Software & Services 3.2% |
| Activision Blizzard, Inc. | 331,666 | 17,329,548 |
| Akamai Technologies, Inc. * | 34,800 | 2,120,712 |
| Alphabet, Inc., Class A * | 10,436 | 9,648,291 |
| CA, Inc. | 76,544 | 2,512,939 |
| CDK Global, Inc. | 69,155 | 4,495,767 |
| j2 Global, Inc. | 21,922 | 1,978,241 |
| Nuance Communications, Inc. * | 245,722 | 4,395,967 |
| Science Applications International Corp. | 57,830 | 4,221,012 |
| | | 46,702,477 |
| |
| Technology Hardware & Equipment 4.8% |
| Apple, Inc. | 62,473 | 8,974,246 |
| CDW Corp. | 68,352 | 4,038,920 |
| Security | Number
of Shares | Value ($) |
| Cisco Systems, Inc. | 249,479 | 8,499,750 |
| CommScope Holding Co., Inc. * | 214,713 | 9,026,535 |
| HP, Inc. | 1,164,576 | 21,917,320 |
| NCR Corp. * | 266,032 | 10,973,820 |
| NetApp, Inc. | 50,092 | 1,996,166 |
| Tech Data Corp. * | 35,356 | 3,381,801 |
| Xerox Corp. | 258,734 | 1,860,298 |
| | | 70,668,856 |
| |
| Telecommunication Services 2.2% |
| AT&T, Inc. | 814,445 | 32,276,455 |
| |
| Transportation 0.9% |
| Delta Air Lines, Inc. | 182,231 | 8,280,576 |
| FedEx Corp. | 17,841 | 3,384,438 |
| XPO Logistics, Inc. * | 47,987 | 2,370,078 |
| | | 14,035,092 |
| |
| Utilities 6.8% |
| CenterPoint Energy, Inc. | 1,067,812 | 30,464,676 |
| DTE Energy Co. | 16,318 | 1,706,700 |
| Exelon Corp. | 365,697 | 12,664,087 |
| FirstEnergy Corp. | 876,081 | 26,229,865 |
| PG&E Corp. | 36,866 | 2,471,865 |
| UGI Corp. | 522,178 | 26,192,449 |
| | | 99,729,642 |
| Total Common Stock |
| (Cost $1,248,183,097) | | 1,467,242,360 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investment 0.3% of net assets |
| |
| Time Deposit 0.3% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (a) | 4,705,920 | 4,705,920 |
| Total Short-Term Investment |
| (Cost $4,705,920) | | 4,705,920 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,253,143,613 and the unrealized appreciation and depreciation were $241,532,765 and ($22,728,098), respectively, with a net unrealized appreciation of $218,804,667.
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $1,467,242,360 | $— | $— | $1,467,242,360 | |
| Short-Term Investment1 | — | 4,705,920 | — | 4,705,920 | |
| Total | $1,467,242,360 | $4,705,920 | $— | $1,471,948,280 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $1,252,889,017) | | $1,471,948,280 |
| Receivables: | | |
| Dividends | | 1,526,767 |
| Fund shares sold | | 599,312 |
| Interest | | 121 |
| Prepaid expenses | + | 14,928 |
| Total assets | | 1,474,089,408 |
| Liabilities |
| Payables: | | |
| Investments bought | | 1,238,988 |
| Investment adviser and administrator fees | | 751,196 |
| Shareholder service fees | | 299,174 |
| Independent trustees' fees | | 832 |
| Fund shares redeemed | | 520,455 |
| Accrued expenses | + | 94,865 |
| Total liabilities | | 2,905,510 |
| Net Assets |
| Total assets | | 1,474,089,408 |
| Total liabilities | – | 2,905,510 |
| Net assets | | $1,471,183,898 |
| Net Assets by Source | | |
| Capital received from investors | | 1,199,192,325 |
| Net investment income not yet distributed | | 252,914 |
| Net realized capital gains | | 52,679,396 |
| Net unrealized capital appreciation | | 219,059,263 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $1,471,183,898 | | 90,968,243 | | $16.17 |
| | | | | |
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $3,445) | | $17,831,586 |
| Interest | + | 5,094 |
| Total investment income | | 17,836,680 |
| Expenses |
| Investment adviser and administrator fees | | 4,774,946 |
| Shareholder service fees | | 1,873,535 |
| Shareholder reports | | 39,428 |
| Portfolio accounting fees | | 29,006 |
| Professional fees | | 20,153 |
| Custodian fees | | 20,025 |
| Transfer agent fees | | 17,202 |
| Registration fees | | 11,831 |
| Independent trustees' fees | | 9,008 |
| Interest expense | | 1,376 |
| Other expenses | + | 13,210 |
| Total expenses | | 6,809,720 |
| Expense reduction by CSIM and its affiliates | – | 17,202 |
| Net expenses | – | 6,792,518 |
| Net investment income | | 11,044,162 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 61,265,850 |
| Net realized gains on futures contracts | + | 431,456 |
| Net realized gains | | 61,697,306 |
| Net change in unrealized appreciation (depreciation) on investments | | 123,952,198 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 65,112 |
| Net change in unrealized appreciation (depreciation) | + | 124,017,310 |
| Net realized and unrealized gains | | 185,714,616 |
| Increase in net assets resulting from operations | | $196,758,778 |
Schwab Active Equity Funds | Semiannual Report
Schwab Dividend Equity Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $11,044,162 | $36,519,772 |
| Net realized gains (losses) | | 61,697,306 | (9,553,682) |
| Net change in unrealized appreciation (depreciation) | + | 124,017,310 | (25,854,487) |
| Increase in net assets from operations | | 196,758,778 | 1,111,603 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (12,064,787) | (35,938,370) |
| Distributions from net realized gains | + | — | (195,568,378) |
| Total distributions | | ($12,064,787) | ($231,506,748) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 2,431,255 | $38,091,601 | 8,869,700 | $124,506,020 |
| Shares reinvested | | 494,318 | 7,883,086 | 11,191,095 | 160,580,768 |
| Shares redeemed | + | (20,307,183) | (319,163,111) | (25,625,568) | (366,896,176) |
| Net transactions in fund shares | | (17,381,610) | ($273,188,424) | (5,564,773) | ($81,809,388) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 108,349,853 | $1,559,678,331 | 113,914,626 | $1,871,882,864 |
| Total decrease | + | (17,381,610) | (88,494,433) | (5,564,773) | (312,204,533) |
| End of period | | 90,968,243 | $1,471,183,898 | 108,349,853 | $1,559,678,331 |
| Net investment income not yet distributed | | | $252,914 | | $1,273,539 |
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $15.20 | $17.68 | $18.38 | $15.66 | $12.48 | $11.18 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.05 1 | 0.20 1 | 0.13 1 | 0.11 | 0.14 | 0.07 |
| Net realized and unrealized gains (losses) | 2.14 | (0.12) | 1.08 | 2.70 | 3.17 | 1.29 |
| Total from investment operations | 2.19 | 0.08 | 1.21 | 2.81 | 3.31 | 1.36 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.17) | (0.20) | (0.09) | (0.09) | (0.13) | (0.06) |
| Distributions from net realized gains | (0.50) | (2.36) | (1.82) | — | — | — |
| Total distributions | (0.67) | (2.56) | (1.91) | (0.09) | (0.13) | (0.06) |
| Net asset value at end of period | $16.72 | $15.20 | $17.68 | $18.38 | $15.66 | $12.48 |
| Total return | 14.84% 2 | 0.54% | 7.00% | 18.06% | 26.76% | 12.18% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.99% 3 | 1.00% 4 | 0.99% | 0.99% | 0.99% | 0.99% |
| Gross operating expenses | 1.04% 3 | 1.04% | 1.03% | 1.04% | 1.05% | 1.05% |
| Net investment income (loss) | 0.59% 3 | 1.32% | 0.75% | 0.60% | 1.00% | 0.53% |
| Portfolio turnover rate | 37% 2 | 84% | 90% | 82% | 87% | 79% |
| Net assets, end of period (x 1,000,000) | $234 | $219 | $251 | $256 | $253 | $217 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
The ratio of net operating expenses would have been 0.99%, if certain non-routine expenses had not been incurred.
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.4% | Common Stock | 187,580,693 | 233,071,459 |
| 0.9% | Short-Term Investment | 1,986,056 | 1,986,056 |
| 100.3% | Total Investments | 189,566,749 | 235,057,515 |
| (0.3%) | Other Assets and Liabilities, Net | | (666,554) |
| 100.0% | Net Assets | | 234,390,961 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.4% of net assets |
| |
| Automobiles & Components 1.6% |
| Lear Corp. | 26,059 | 3,717,577 |
| |
| Banks 0.3% |
| Citigroup, Inc. | 7,374 | 435,951 |
| MGIC Investment Corp. * | 24,964 | 263,120 |
| | | 699,071 |
| |
| Capital Goods 7.2% |
| Allison Transmission Holdings, Inc. | 85,807 | 3,319,015 |
| Carlisle Cos., Inc. | 19,644 | 1,991,705 |
| Curtiss-Wright Corp. | 7,197 | 672,632 |
| Ingersoll-Rand plc | 21,599 | 1,916,911 |
| Lockheed Martin Corp. | 2,982 | 803,500 |
| Oshkosh Corp. | 17,408 | 1,207,941 |
| Owens Corning | 37,345 | 2,272,443 |
| Stanley Black & Decker, Inc. | 7,473 | 1,017,449 |
| The Boeing Co. | 19,882 | 3,674,790 |
| | | 16,876,386 |
| |
| Commercial & Professional Services 1.4% |
| ManpowerGroup, Inc. | 10,579 | 1,068,267 |
| Waste Management, Inc. | 30,300 | 2,205,234 |
| | | 3,273,501 |
| |
| Consumer Durables & Apparel 0.8% |
| Michael Kors Holdings Ltd. * | 50,525 | 1,886,098 |
| |
| Consumer Services 4.2% |
| Aramark | 79,300 | 2,896,036 |
| Darden Restaurants, Inc. | 17,830 | 1,518,938 |
| International Game Technology plc | 32,472 | 720,878 |
| Starbucks Corp. | 29,642 | 1,780,299 |
| Vail Resorts, Inc. | 5,354 | 1,058,272 |
| Wyndham Worldwide Corp. | 14,952 | 1,425,075 |
| Yum China Holdings, Inc. * | 11,069 | 377,674 |
| | | 9,777,172 |
| |
| Diversified Financials 0.4% |
| The Goldman Sachs Group, Inc. | 4,559 | 1,020,304 |
| |
| Security | Number
of Shares | Value ($) |
| Food & Staples Retailing 1.8% |
| Sysco Corp. | 13,925 | 736,215 |
| Wal-Mart Stores, Inc. | 47,710 | 3,586,838 |
| | | 4,323,053 |
| |
| Food, Beverage & Tobacco 6.4% |
| Altria Group, Inc. | 22,964 | 1,648,356 |
| Campbell Soup Co. | 21,927 | 1,261,679 |
| Dr Pepper Snapple Group, Inc. | 16,929 | 1,551,543 |
| Fresh Del Monte Produce, Inc. | 17,087 | 1,047,433 |
| Ingredion, Inc. | 5,262 | 651,541 |
| Kellogg Co. | 14,323 | 1,016,933 |
| PepsiCo, Inc. | 59,090 | 6,693,715 |
| Tyson Foods, Inc., Class A | 17,203 | 1,105,465 |
| | | 14,976,665 |
| |
| Health Care Equipment & Services 6.1% |
| Allscripts Healthcare Solutions, Inc. * | 137,920 | 1,650,903 |
| Becton, Dickinson & Co. | 6,648 | 1,242,977 |
| Boston Scientific Corp. * | 31,090 | 820,154 |
| Hill-Rom Holdings, Inc. | 7,413 | 560,719 |
| Hologic, Inc. * | 34,984 | 1,579,528 |
| IDEXX Laboratories, Inc. * | 14,878 | 2,495,487 |
| Masimo Corp. * | 6,934 | 712,399 |
| McKesson Corp. | 13,756 | 1,902,317 |
| UnitedHealth Group, Inc. | 7,980 | 1,395,542 |
| WellCare Health Plans, Inc. * | 12,422 | 1,905,659 |
| | | 14,265,685 |
| |
| Household & Personal Products 1.1% |
| Kimberly-Clark Corp. | 6,881 | 892,810 |
| Spectrum Brands Holdings, Inc. | 12,185 | 1,751,350 |
| | | 2,644,160 |
| |
| Insurance 2.8% |
| American Financial Group, Inc. | 4,798 | 466,893 |
| CNA Financial Corp. | 15,948 | 721,806 |
| Everest Re Group Ltd. | 9,733 | 2,449,893 |
| Reinsurance Group of America, Inc. | 4,291 | 536,547 |
| The Allstate Corp. | 28,671 | 2,330,666 |
| | | 6,505,805 |
| |
| Materials 2.2% |
| Axalta Coating Systems Ltd. * | 68,275 | 2,141,787 |
| Berry Global Group, Inc. * | 58,040 | 2,902,000 |
| | | 5,043,787 |
| |
| Media 5.0% |
| Comcast Corp., Class A | 133,644 | 5,237,508 |
| Live Nation Entertainment, Inc. * | 114,399 | 3,679,072 |
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Sinclair Broadcast Group, Inc., Class A | 23,473 | 926,010 |
| Twenty-First Century Fox, Inc., Class A | 63,920 | 1,952,117 |
| | | 11,794,707 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 10.3% |
| AbbVie, Inc. | 48,795 | 3,217,542 |
| Amgen, Inc. | 30,436 | 4,970,808 |
| Biogen, Inc. * | 7,358 | 1,995,563 |
| Celgene Corp. * | 18,720 | 2,322,216 |
| Charles River Laboratories International, Inc. * | 3,553 | 318,704 |
| Johnson & Johnson | 17,453 | 2,154,922 |
| Merck & Co., Inc. | 14,315 | 892,254 |
| PAREXEL International Corp. * | 35,559 | 2,269,731 |
| Pfizer, Inc. | 103,688 | 3,517,097 |
| Thermo Fisher Scientific, Inc. | 10,847 | 1,793,335 |
| VWR Corp. * | 21,744 | 614,485 |
| | | 24,066,657 |
| |
| Real Estate 4.0% |
| American Homes 4 Rent, Class A | 44,675 | 1,029,759 |
| Apartment Investment & Management Co., Class A | 20,301 | 887,966 |
| DuPont Fabros Technology, Inc. | 10,082 | 519,727 |
| Equity LifeStyle Properties, Inc. | 10,590 | 856,837 |
| PS Business Parks, Inc. | 4,043 | 491,386 |
| Retail Properties of America, Inc., Class A | 221,847 | 2,959,439 |
| Senior Housing Properties Trust | 97,320 | 2,094,326 |
| SL Green Realty Corp. | 5,575 | 584,985 |
| | | 9,424,425 |
| |
| Retailing 8.6% |
| Amazon.com, Inc. * | 10,605 | 9,809,519 |
| Best Buy Co., Inc. | 50,204 | 2,601,069 |
| Burlington Stores, Inc. * | 25,736 | 2,545,805 |
| Target Corp. | 20,056 | 1,120,128 |
| The Home Depot, Inc. | 26,213 | 4,091,849 |
| | | 20,168,370 |
| |
| Semiconductors & Semiconductor Equipment 2.1% |
| Applied Materials, Inc. | 73,383 | 2,980,084 |
| Intel Corp. | 21,712 | 784,889 |
| Maxim Integrated Products, Inc. | 26,934 | 1,189,136 |
| | | 4,954,109 |
| |
| Software & Services 20.8% |
| Activision Blizzard, Inc. | 46,755 | 2,442,949 |
| Adobe Systems, Inc. * | 5,303 | 709,223 |
| Alphabet, Inc., Class A * | 12,246 | 11,321,672 |
| Booz Allen Hamilton Holding Corp. | 29,069 | 1,044,449 |
| CDK Global, Inc. | 15,845 | 1,030,083 |
| Check Point Software Technologies Ltd. * | 10,635 | 1,106,146 |
| Conduent, Inc. * | 11,948 | 194,872 |
| eBay, Inc. * | 22,912 | 765,490 |
| Facebook, Inc., Class A * | 37,065 | 5,569,016 |
| Fidelity National Information Services, Inc. | 45,016 | 3,789,897 |
| First Data Corp., Class A * | 63,272 | 988,309 |
| GoDaddy, Inc., Class A * | 40,894 | 1,591,594 |
| International Business Machines Corp. | 11,278 | 1,807,751 |
| Security | Number
of Shares | Value ($) |
| MasterCard, Inc., Class A | 24,042 | 2,796,565 |
| Microsoft Corp. | 145,750 | 9,978,045 |
| Nuance Communications, Inc. * | 29,719 | 531,673 |
| Synopsys, Inc. * | 7,624 | 561,889 |
| Teradata Corp. * | 72,962 | 2,129,031 |
| Total System Services, Inc. | 8,621 | 494,070 |
| | | 48,852,724 |
| |
| Technology Hardware & Equipment 8.7% |
| Apple, Inc. | 92,234 | 13,249,414 |
| CDW Corp. | 29,789 | 1,760,232 |
| CommScope Holding Co., Inc. * | 35,271 | 1,482,793 |
| F5 Networks, Inc. * | 1,816 | 234,500 |
| HP, Inc. | 37,969 | 714,577 |
| NCR Corp. * | 40,757 | 1,681,226 |
| Tech Data Corp. * | 12,297 | 1,176,208 |
| | | 20,298,950 |
| |
| Telecommunication Services 1.0% |
| AT&T, Inc. | 27,437 | 1,087,328 |
| T-Mobile US, Inc. * | 20,331 | 1,367,667 |
| | | 2,454,995 |
| |
| Transportation 1.3% |
| Delta Air Lines, Inc. | 27,148 | 1,233,605 |
| FedEx Corp. | 6,847 | 1,298,876 |
| JetBlue Airways Corp. * | 26,437 | 577,120 |
| | | 3,109,601 |
| |
| Utilities 1.3% |
| CenterPoint Energy, Inc. | 31,847 | 908,595 |
| FirstEnergy Corp. | 29,903 | 895,296 |
| UGI Corp. | 22,603 | 1,133,766 |
| | | 2,937,657 |
| Total Common Stock |
| (Cost $187,580,693) | | 233,071,459 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investment 0.9% of net assets |
| |
| Time Deposit 0.9% |
| BNP Paribas |
| 0.42%, 05/01/17 (a) | 1,986,056 | 1,986,056 |
| Total Short-Term Investment |
| (Cost $1,986,056) | | 1,986,056 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $189,569,579 and the unrealized appreciation and depreciation were $48,310,835 and ($2,822,899), respectively, with a net unrealized appreciation of $45,487,936.
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $233,071,459 | $— | $— | $233,071,459 | |
| Short-Term Investment1 | — | 1,986,056 | — | 1,986,056 | |
| Total | $233,071,459 | $1,986,056 | $— | $235,057,515 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $189,566,749) | | $235,057,515 |
| Deposit with broker for futures contracts | | 40,500 |
| Receivables: | | |
| Fund shares sold | | 170,859 |
| Dividends | | 130,726 |
| Interest | | 46 |
| Prepaid expenses | + | 7,925 |
| Total assets | | 235,407,571 |
| Liabilities |
| Payables: | | |
| Investments bought | | 680,038 |
| Investment adviser and administrator fees | | 129,316 |
| Shareholder service fees | | 46,705 |
| Independent trustees' fees | | 316 |
| Fund shares redeemed | | 111,474 |
| Accrued expenses | + | 48,761 |
| Total liabilities | | 1,016,610 |
| Net Assets |
| Total assets | | 235,407,571 |
| Total liabilities | – | 1,016,610 |
| Net assets | | $234,390,961 |
| Net Assets by Source | | |
| Capital received from investors | | 181,832,334 |
| Net investment income not yet distributed | | 243,976 |
| Net realized capital gains | | 6,823,885 |
| Net unrealized capital appreciation | | 45,490,766 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $234,390,961 | | 14,020,433 | | $16.72 |
| | | | | |
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends | | $1,758,126 |
| Interest | + | 1,290 |
| Total investment income | | 1,759,416 |
| Expenses |
| Investment adviser and administrator fees | | 802,889 |
| Shareholder service fees | | 271,736 |
| Portfolio accounting fees | | 18,728 |
| Professional fees | | 17,781 |
| Shareholder reports | | 15,770 |
| Registration fees | | 10,444 |
| Transfer agent fees | | 7,129 |
| Custodian fees | | 5,949 |
| Independent trustees' fees | | 4,514 |
| Interest expense | | 78 |
| Other expenses | + | 1,921 |
| Total expenses | | 1,156,939 |
| Expense reduction by CSIM and its affiliates | – | 52,889 |
| Net expenses | – | 1,104,050 |
| Net investment income | | 655,366 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 6,830,937 |
| Net realized losses on futures contracts | + | (5,514) |
| Net realized gains | | 6,825,423 |
| Net change in unrealized appreciation (depreciation) on investments | | 23,668,189 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | (814) |
| Net change in unrealized appreciation (depreciation) | + | 23,667,375 |
| Net realized and unrealized gains | | 30,492,798 |
| Increase in net assets resulting from operations | | $31,148,164 |
Schwab Active Equity Funds | Semiannual Report
Schwab Large-Cap Growth Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $655,366 | $3,012,896 |
| Net realized gains | | 6,825,423 | 7,278,455 |
| Net change in unrealized appreciation (depreciation) | + | 23,667,375 | (9,588,620) |
| Increase in net assets from operations | | 31,148,164 | 702,731 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (2,362,093) | (2,760,714) |
| Distributions from net realized gains | + | (7,123,142) | (33,117,333) |
| Total distributions | | ($9,485,235) | ($35,878,047) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 660,462 | $10,425,704 | 1,470,303 | $21,865,357 |
| Shares reinvested | | 371,671 | 5,649,403 | 1,409,350 | 21,238,901 |
| Shares redeemed | + | (1,417,309) | (22,266,883) | (2,663,649) | (39,879,178) |
| Net transactions in fund shares | | (385,176) | ($6,191,776) | 216,004 | $3,225,080 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 14,405,609 | $218,919,808 | 14,189,605 | $250,870,044 |
| Total increase or decrease | + | (385,176) | 15,471,153 | 216,004 | (31,950,236) |
| End of period | | 14,020,433 | $234,390,961 | 14,405,609 | $218,919,808 |
| Net investment income not yet distributed | | | $243,976 | | $1,950,703 |
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $18.81 | $21.19 | $25.11 | $24.87 | $17.72 | $15.61 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.01 1 | 0.07 1 | 0.05 1 | (0.02) | 0.09 | 0.02 |
| Net realized and unrealized gains (losses) | 3.31 | 0.12 | 0.63 | 2.71 | 7.16 | 2.10 |
| Total from investment operations | 3.32 | 0.19 | 0.68 | 2.69 | 7.25 | 2.12 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.09) | (0.04) | (0.02) | (0.07) | (0.10) | (0.01) |
| Distributions from net realized gains | — | (2.53) | (4.58) | (2.38) | — | — |
| Total distributions | (0.09) | (2.57) | (4.60) | (2.45) | (0.10) | (0.01) |
| Net asset value at end of period | $22.04 | $18.81 | $21.19 | $25.11 | $24.87 | $17.72 |
| Total return | 17.65% 2 | 1.47% | 3.01% | 11.67% | 41.10% | 13.57% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 1.09% 3 | 1.09% | 1.09% | 1.10% | 1.10% | 1.12% |
| Gross operating expenses | 1.09% 3 | 1.10% | 1.09% | 1.10% | 1.11% | 1.12% |
| Net investment income (loss) | 0.14% 3 | 0.37% | 0.22% | (0.10%) | 0.42% | 0.11% |
| Portfolio turnover rate | 51% 2 | 85% | 95% | 103% | 84% | 101% |
| Net assets, end of period (x 1,000,000) | $626 | $571 | $630 | $666 | $590 | $388 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.4% | Common Stock | 548,809,067 | 622,605,033 |
| 1.4% | Other Investment Company | 9,047,203 | 9,047,203 |
| 0.4% | Short-Term Investment | 2,305,501 | 2,305,501 |
| 101.2% | Total Investments | 560,161,771 | 633,957,737 |
| (1.2%) | Other Assets and Liabilities, Net | | (7,525,034) |
| 100.0% | Net Assets | | 626,432,703 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.4% of net assets |
| |
| Automobiles & Components 1.7% |
| Cooper-Standard Holding, Inc. * | 40,621 | 4,593,017 |
| Tenneco, Inc. | 53,364 | 3,363,533 |
| Tower International, Inc. | 95,714 | 2,593,849 |
| | | 10,550,399 |
| |
| Banks 13.6% |
| 1st Source Corp. | 56,913 | 2,749,467 |
| BancFirst Corp. | 23,942 | 2,299,629 |
| Banco Latinoamericano de Comercio Exterior, S.A., Class E | 36,446 | 1,045,271 |
| Berkshire Hills Bancorp, Inc. | 16,400 | 615,000 |
| Boston Private Financial Holdings, Inc. | 34,051 | 531,196 |
| Camden National Corp. | 10,525 | 449,944 |
| Cathay General Bancorp | 83,510 | 3,177,555 |
| Central Pacific Financial Corp. | 37,533 | 1,174,032 |
| Central Valley Community Bancorp | 14,736 | 334,655 |
| Essent Group Ltd. * | 140,864 | 5,213,377 |
| Farmers Capital Bank Corp. | 10,558 | 438,157 |
| Federal Agricultural Mortgage Corp., Class C | 77,879 | 4,442,997 |
| Financial Institutions, Inc. | 43,731 | 1,464,989 |
| First BanCorp (Puerto Rico) * | 1,077,391 | 6,335,059 |
| First Citizens BancShares, Inc., Class A | 17,771 | 6,185,374 |
| First Community Bancshares, Inc. | 27,051 | 715,769 |
| First Financial Corp. | 47,923 | 2,338,642 |
| Fulton Financial Corp. | 37,483 | 691,561 |
| Great Southern Bancorp, Inc. | 5,287 | 265,143 |
| Hancock Holding Co. | 19,342 | 903,271 |
| Heartland Financial USA, Inc. | 43,240 | 2,075,520 |
| HomeTrust Bancshares, Inc. * | 3,493 | 87,325 |
| International Bancshares Corp. | 232,678 | 8,702,157 |
| MGIC Investment Corp. * | 611,611 | 6,446,380 |
| OFG Bancorp | 591,172 | 6,916,712 |
| Peapack-Gladstone Financial Corp. | 21,163 | 678,486 |
| Preferred Bank | 31,993 | 1,695,309 |
| Republic Bancorp, Inc., Class A | 48,259 | 1,736,359 |
| Synovus Financial Corp. | 9,750 | 407,550 |
| TCF Financial Corp. | 435,501 | 7,190,122 |
| Territorial Bancorp, Inc. | 6,710 | 207,675 |
| The Bank of NT Butterfield & Son Ltd. | 42,740 | 1,421,105 |
| Triumph Bancorp, Inc. * | 15,314 | 343,034 |
| United Community Banks, Inc. | 187,305 | 5,122,792 |
| Security | Number
of Shares | Value ($) |
| Waterstone Financial, Inc. | 23,910 | 454,290 |
| Wintrust Financial Corp. | 6,128 | 434,230 |
| | | 85,290,134 |
| |
| Capital Goods 9.8% |
| Aerojet Rocketdyne Holdings, Inc. * | 94,441 | 2,116,423 |
| Astec Industries, Inc. | 18,281 | 1,158,101 |
| Atkore International Group, Inc. * | 77,484 | 2,034,730 |
| Columbus McKinnon Corp. | 45,661 | 1,193,122 |
| Continental Building Products, Inc. * | 52,088 | 1,268,343 |
| Curtiss-Wright Corp. | 33,704 | 3,149,976 |
| EMCOR Group, Inc. | 65,827 | 4,327,467 |
| EnerSys | 90,179 | 7,494,777 |
| Engility Holdings, Inc. * | 9,432 | 267,397 |
| General Cable Corp. | 96,282 | 1,733,076 |
| Global Brass & Copper Holdings, Inc. | 117,943 | 4,204,668 |
| GMS, Inc. * | 42,858 | 1,549,745 |
| Harsco Corp. * | 68,627 | 895,582 |
| Hillenbrand, Inc. | 133,927 | 4,941,906 |
| Kadant, Inc. | 12,911 | 802,419 |
| Lydall, Inc. * | 11,396 | 597,151 |
| MasTec, Inc. * | 58,401 | 2,578,404 |
| Meritor, Inc. * | 95,914 | 1,708,228 |
| Moog, Inc., Class A * | 75,781 | 5,202,366 |
| Ply Gem Holdings, Inc. * | 194,496 | 3,744,048 |
| Regal Beloit Corp. | 46,338 | 3,653,751 |
| Sparton Corp. * | 99,579 | 2,217,624 |
| Univar, Inc. * | 81,381 | 2,429,223 |
| Vectrus, Inc. * | 86,934 | 2,211,601 |
| | | 61,480,128 |
| |
| Commercial & Professional Services 3.6% |
| ACCO Brands Corp. * | 190,794 | 2,718,814 |
| ARC Document Solutions, Inc. * | 59,050 | 217,304 |
| Barrett Business Services, Inc. | 3,680 | 212,189 |
| CRA International, Inc. | 15,306 | 580,710 |
| ICF International, Inc. * | 11,396 | 503,133 |
| Navigant Consulting, Inc. * | 96,512 | 2,313,393 |
| Quad Graphics, Inc. | 113,516 | 2,980,930 |
| The Brink's Co. | 55,547 | 3,410,586 |
| TriNet Group, Inc. * | 178,357 | 5,243,696 |
| TrueBlue, Inc. * | 153,606 | 4,201,124 |
| | | 22,381,879 |
| |
| Consumer Durables & Apparel 1.0% |
| La-Z-Boy, Inc. | 54,000 | 1,506,600 |
| M/I Homes, Inc. * | 31,868 | 865,535 |
| Perry Ellis International, Inc. * | 95,360 | 1,956,787 |
| Taylor Morrison Home Corp., Class A * | 84,984 | 1,963,130 |
| | | 6,292,052 |
| |
| Consumer Services 1.7% |
| BJ's Restaurants, Inc. * | 16,765 | 756,102 |
| Capella Education Co. | 19,655 | 1,873,122 |
| ClubCorp Holdings, Inc. | 73,634 | 990,377 |
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| K12, Inc. * | 52,041 | 980,973 |
| Red Rock Resorts, Inc., Class A | 149,584 | 3,497,274 |
| Regis Corp. * | 87,240 | 951,788 |
| Ruth's Hospitality Group, Inc. | 94,755 | 1,885,624 |
| | | 10,935,260 |
| |
| Diversified Financials 1.3% |
| Enova International, Inc. * | 100,810 | 1,431,502 |
| GAMCO Investors, Inc., Class A | 7,344 | 210,773 |
| Marlin Business Services Corp. | 6,464 | 164,509 |
| Nelnet, Inc., Class A | 64,827 | 2,917,863 |
| Regional Management Corp. * | 158,623 | 3,145,494 |
| | | 7,870,141 |
| |
| Energy 2.7% |
| Abraxas Petroleum Corp. * | 307,819 | 575,621 |
| Archrock, Inc. | 24,322 | 287,000 |
| Evolution Petroleum Corp. | 93,424 | 747,392 |
| Green Plains, Inc. | 111,009 | 2,553,207 |
| Matrix Service Co. * | 252,101 | 2,962,187 |
| McDermott International, Inc. * | 575,013 | 3,760,585 |
| Natural Gas Services Group, Inc. * | 27,827 | 762,460 |
| Overseas Shipholding Group, Inc., Class A * | 314,569 | 1,145,031 |
| Pacific Ethanol, Inc. * | 92,955 | 632,094 |
| REX American Resources Corp. * | 13,705 | 1,297,589 |
| TETRA Technologies, Inc. * | 469,711 | 1,564,138 |
| Unit Corp. * | 33,975 | 730,123 |
| W&T Offshore, Inc. * | 64,208 | 130,984 |
| | | 17,148,411 |
| |
| Food & Staples Retailing 0.7% |
| SpartanNash, Co. | 70,347 | 2,588,769 |
| SUPERVALU, Inc. * | 127,537 | 522,902 |
| Village Super Market, Inc., Class A | 48,384 | 1,276,854 |
| | | 4,388,525 |
| |
| Food, Beverage & Tobacco 1.9% |
| Coca-Cola Bottling Co. Consolidated | 9,826 | 2,081,736 |
| Dean Foods Co. | 268,752 | 5,305,165 |
| Fresh Del Monte Produce, Inc. | 72,944 | 4,471,467 |
| | | 11,858,368 |
| |
| Health Care Equipment & Services 4.3% |
| Allscripts Healthcare Solutions, Inc. * | 195,182 | 2,336,328 |
| Analogic Corp. | 16,100 | 1,156,785 |
| AngioDynamics, Inc. * | 98,782 | 1,533,097 |
| Cantel Medical Corp. | 28,104 | 2,091,219 |
| Cardiovascular Systems, Inc. * | 16,835 | 502,861 |
| Civitas Solutions, Inc. * | 19,759 | 351,710 |
| Community Health Systems, Inc. * | 16,769 | 144,381 |
| Exactech, Inc. * | 19,618 | 581,674 |
| Haemonetics Corp. * | 50,300 | 2,106,564 |
| Halyard Health, Inc. * | 69,905 | 2,761,247 |
| HealthSouth Corp. | 25,050 | 1,174,845 |
| HMS Holdings Corp. * | 77,051 | 1,577,234 |
| Magellan Health, Inc. * | 11,257 | 774,482 |
| Merit Medical Systems, Inc. * | 17,638 | 594,401 |
| Natus Medical, Inc. * | 27,604 | 966,140 |
| NxStage Medical, Inc. * | 20,015 | 598,248 |
| Orthofix International N.V. * | 89,387 | 3,535,256 |
| Quality Systems, Inc. * | 120,537 | 1,718,858 |
| RadNet, Inc. * | 89,732 | 542,879 |
| RTI Surgical, Inc. * | 82,975 | 336,049 |
| Security | Number
of Shares | Value ($) |
| Surmodics, Inc. * | 13,591 | 310,554 |
| Tenet Healthcare Corp. * | 83,981 | 1,315,982 |
| | | 27,010,794 |
| |
| Household & Personal Products 1.3% |
| HRG Group, Inc. * | 173,472 | 3,471,175 |
| USANA Health Sciences, Inc. * | 79,387 | 4,513,151 |
| | | 7,984,326 |
| |
| Insurance 2.3% |
| American Equity Investment Life Holding Co. | 42,464 | 1,007,246 |
| CNO Financial Group, Inc. | 84,238 | 1,774,895 |
| Crawford & Co., Class B | 51,516 | 562,040 |
| Employers Holdings, Inc. | 26,005 | 1,040,200 |
| Fidelity & Guaranty Life | 112,873 | 3,211,237 |
| James River Group Holdings Ltd. | 16,100 | 701,316 |
| National Western Life Group, Inc., Class A | 13,481 | 4,128,421 |
| State National Cos., Inc. | 14,110 | 206,994 |
| The Navigators Group, Inc. | 35,810 | 1,935,530 |
| | | 14,567,879 |
| |
| Materials 4.0% |
| A. Schulman, Inc. | 61,869 | 1,958,154 |
| AK Steel Holding Corp. * | 104,458 | 662,264 |
| Chase Corp. | 8,200 | 840,500 |
| Cliffs Natural Resources, Inc. * | 99,292 | 667,242 |
| Coeur Mining, Inc. * | 84,625 | 766,702 |
| Innophos Holdings, Inc. | 27,463 | 1,316,576 |
| Koppers Holdings, Inc. * | 78,753 | 3,343,065 |
| OMNOVA Solutions, Inc. * | 218,684 | 2,077,498 |
| Ryerson Holding Corp. * | 118,144 | 1,618,573 |
| SunCoke Energy, Inc. * | 191,515 | 1,756,193 |
| The Chemours Co. | 61,519 | 2,478,600 |
| Tredegar Corp. | 41,531 | 712,257 |
| Trinseo S.A. | 53,798 | 3,572,187 |
| Worthington Industries, Inc. | 69,985 | 3,044,347 |
| | | 24,814,158 |
| |
| Media 1.9% |
| Gannett Co., Inc. | 150,813 | 1,260,797 |
| Gray Television, Inc. * | 65,376 | 957,759 |
| Meredith Corp. | 52,586 | 3,078,910 |
| New Media Investment Group, Inc. | 48,602 | 639,602 |
| Sinclair Broadcast Group, Inc., Class A | 114,885 | 4,532,213 |
| tronc, Inc. * | 99,514 | 1,427,031 |
| | | 11,896,312 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 11.3% |
| Acorda Therapeutics, Inc. * | 149,501 | 2,414,441 |
| Akebia Therapeutics, Inc. * | 66,929 | 882,124 |
| Amphastar Pharmaceuticals, Inc. * | 56,666 | 855,657 |
| ANI Pharmaceuticals, Inc. * | 8,779 | 475,119 |
| BioSpecifics Technologies Corp. * | 30,271 | 1,717,274 |
| Cambrex Corp. * | 10,681 | 633,917 |
| Catalent, Inc. * | 162,834 | 4,767,780 |
| Cytokinetics, Inc. * | 34,097 | 559,191 |
| Depomed, Inc. * | 77,740 | 932,103 |
| Emergent BioSolutions, Inc. * | 221,176 | 6,615,374 |
| Endo International plc * | 62,470 | 710,284 |
| Exact Sciences Corp. * | 33,493 | 1,005,125 |
| FibroGen, Inc. * | 22,767 | 637,476 |
| Genomic Health, Inc. * | 127,850 | 4,201,151 |
| Horizon Pharma plc * | 125,127 | 1,924,453 |
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Impax Laboratories, Inc. * | 93,783 | 1,317,651 |
| INC Research Holdings, Inc., Class A * | 67,519 | 3,038,355 |
| Ironwood Pharmaceuticals, Inc. * | 123,060 | 2,008,339 |
| Lannett Co., Inc. *(a) | 16,975 | 441,350 |
| Ligand Pharmaceuticals, Inc. * | 25,549 | 2,840,282 |
| Momenta Pharmaceuticals, Inc. * | 56,982 | 817,692 |
| Myriad Genetics, Inc. * | 198,952 | 3,658,727 |
| PAREXEL International Corp. * | 58,652 | 3,743,757 |
| PDL BioPharma, Inc. | 396,033 | 891,074 |
| Phibro Animal Health Corp., Class A | 56,039 | 1,667,160 |
| PRA Health Sciences, Inc. * | 56,259 | 3,598,326 |
| Prestige Brands Holdings, Inc. * | 106,781 | 6,130,297 |
| Repligen Corp. * | 61,421 | 2,259,679 |
| Retrophin, Inc. * | 82,057 | 1,607,497 |
| SciClone Pharmaceuticals, Inc. * | 221,102 | 2,133,634 |
| Spectrum Pharmaceuticals, Inc. * | 193,775 | 1,474,628 |
| Sucampo Pharmaceuticals, Inc., Class A * | 95,769 | 972,055 |
| Vanda Pharmaceuticals, Inc. * | 206,691 | 3,152,038 |
| Xencor, Inc. * | 37,801 | 970,352 |
| | | 71,054,362 |
| |
| Real Estate 9.3% |
| Ashford Hospitality Prime, Inc. | 197,621 | 2,092,806 |
| Ashford Hospitality Trust, Inc. | 97,359 | 608,494 |
| CareTrust REIT, Inc. | 117,098 | 1,993,008 |
| CorEnergy Infrastructure Trust, Inc. | 52,968 | 1,932,273 |
| DuPont Fabros Technology, Inc. | 106,993 | 5,515,489 |
| Forestar Group, Inc. * | 177,513 | 2,511,809 |
| LaSalle Hotel Properties | 66,672 | 1,904,152 |
| Lexington Realty Trust | 519,795 | 5,286,315 |
| Mack-Cali Realty Corp. | 138,763 | 3,753,539 |
| MedEquities Realty Trust, Inc. | 259,708 | 3,069,749 |
| New Senior Investment Group, Inc. | 269,095 | 2,803,970 |
| Preferred Apartment Communities, Inc., Class A | 112,452 | 1,591,196 |
| PS Business Parks, Inc. | 51,787 | 6,294,192 |
| RE/MAX Holdings, Inc., Class A | 89,943 | 5,320,128 |
| Ryman Hospitality Properties, Inc. | 20,273 | 1,293,012 |
| Saul Centers, Inc. | 55,635 | 3,340,882 |
| Tier REIT, Inc. | 87,571 | 1,515,854 |
| UMH Properties, Inc. | 70,848 | 1,134,985 |
| Washington Prime Group, Inc. | 681,676 | 5,998,749 |
| | | 57,960,602 |
| |
| Retailing 3.4% |
| Big Lots, Inc. | 70,774 | 3,573,379 |
| Caleres, Inc. | 28,836 | 831,054 |
| Chico's FAS, Inc. | 71,467 | 987,674 |
| Francesca's Holdings Corp. * | 75,977 | 1,198,917 |
| Genesco, Inc. * | 34,174 | 1,821,474 |
| Kirkland's, Inc. * | 92,648 | 1,089,540 |
| Nutrisystem, Inc. | 33,940 | 1,814,093 |
| Rent-A-Center, Inc. (a) | 509,639 | 5,448,041 |
| Shutterfly, Inc. * | 29,922 | 1,552,952 |
| Tailored Brands, Inc. | 64,860 | 799,724 |
| The Children's Place, Inc. | 16,228 | 1,862,974 |
| Tilly's, Inc., Class A | 21,827 | 208,666 |
| | | 21,188,488 |
| |
| Semiconductors & Semiconductor Equipment 4.2% |
| Advanced Energy Industries, Inc. * | 80,231 | 5,921,048 |
| Amkor Technology, Inc. * | 324,654 | 3,824,424 |
| Cirrus Logic, Inc. * | 123,414 | 7,941,691 |
| IXYS Corp. | 95,563 | 1,333,104 |
| MKS Instruments, Inc. | 17,866 | 1,398,014 |
| Security | Number
of Shares | Value ($) |
| Semtech Corp. * | 37,180 | 1,269,697 |
| Synaptics, Inc. * | 19,147 | 1,048,681 |
| Xperi Corp. | 104,457 | 3,509,755 |
| | | 26,246,414 |
| |
| Software & Services 9.7% |
| Barracuda Networks, Inc. * | 164,337 | 3,340,971 |
| BroadSoft, Inc. * | 71,825 | 2,758,080 |
| Carbonite, Inc. * | 100,395 | 2,168,532 |
| Cardtronics plc, Class A * | 91,169 | 3,790,807 |
| Cass Information Systems, Inc. | 1,943 | 129,151 |
| CommVault Systems, Inc. * | 44,935 | 2,266,971 |
| DHI Group, Inc. * | 370,517 | 1,426,490 |
| Ebix, Inc. | 21,246 | 1,310,878 |
| EVERTEC, Inc. | 414,182 | 6,564,785 |
| Exa Corp. * | 10,480 | 144,205 |
| Fair Isaac Corp. | 15,527 | 2,103,598 |
| Five9, Inc. * | 103,338 | 1,885,402 |
| GoDaddy, Inc., Class A * | 83,979 | 3,268,463 |
| j2 Global, Inc. | 59,727 | 5,389,764 |
| Progress Software Corp. | 258,898 | 7,694,449 |
| Proofpoint, Inc. * | 35,696 | 2,690,408 |
| RealPage, Inc. * | 116,605 | 4,320,215 |
| Synchronoss Technologies, Inc. * | 46,886 | 750,176 |
| Take-Two Interactive Software, Inc. * | 104 | 6,536 |
| Travelport Worldwide Ltd. | 300,376 | 3,955,952 |
| Web.com Group, Inc. * | 191,509 | 3,696,124 |
| Zix Corp. * | 214,133 | 1,162,742 |
| | | 60,824,699 |
| |
| Technology Hardware & Equipment 6.0% |
| Anixter International, Inc. * | 9,521 | 776,438 |
| Bel Fuse, Inc., Class B | 58,793 | 1,422,791 |
| Ciena Corp. * | 175,419 | 4,018,849 |
| Eastman Kodak Co. * | 138,512 | 1,523,632 |
| Electronics For Imaging, Inc. * | 38,502 | 1,762,622 |
| Extreme Networks, Inc. * | 381,235 | 2,979,351 |
| Finisar Corp. * | 148,874 | 3,400,282 |
| Insight Enterprises, Inc. * | 101,375 | 4,267,887 |
| Itron, Inc. * | 57,543 | 3,731,663 |
| NETGEAR, Inc. * | 85,708 | 4,041,132 |
| PC Connection, Inc. | 9,190 | 264,121 |
| Plantronics, Inc. | 24,556 | 1,340,758 |
| Sanmina Corp. * | 53,051 | 1,976,150 |
| Tech Data Corp. * | 32,574 | 3,115,703 |
| TTM Technologies, Inc. * | 170,738 | 2,856,447 |
| | | 37,477,826 |
| |
| Telecommunication Services 0.8% |
| Hawaiian Telcom Holdco, Inc. * | 18,124 | 461,256 |
| IDT Corp., Class B | 132,742 | 2,016,351 |
| Telephone & Data Systems, Inc. | 63,808 | 1,752,168 |
| United States Cellular Corp. * | 26,770 | 1,048,848 |
| | | 5,278,623 |
| |
| Transportation 0.8% |
| Park-Ohio Holdings Corp. | 5,089 | 200,252 |
| SkyWest, Inc. | 37,438 | 1,392,694 |
| XPO Logistics, Inc. * | 45,515 | 2,247,986 |
| YRC Worldwide, Inc. * | 111,937 | 1,193,248 |
| | | 5,034,180 |
| |
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Utilities 2.1% |
| Atlantic Power Corp. * | 621,041 | 1,552,603 |
| Southwest Gas Holdings, Inc. | 101,798 | 8,526,600 |
| Spark Energy, Inc., Class A (a) | 83,339 | 2,991,870 |
| | | 13,071,073 |
| Total Common Stock |
| (Cost $548,809,067) | | 622,605,033 |
|
| Other Investment Company 1.4% of net assets |
| |
| Securities Lending Collateral 1.4% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 9,047,203 | 9,047,203 |
| Total Other Investment Company |
| (Cost $9,047,203) | | 9,047,203 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investment 0.4% of net assets |
| |
| Time Deposits 0.4% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (c) | 2,305,501 | 2,305,501 |
| Total Short-Term Investment |
| (Cost $2,305,501) | | 2,305,501 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $560,707,653 and the unrealized appreciation and depreciation were $105,078,135 and ($31,828,051), respectively, with a net unrealized appreciation of $73,250,084.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $8,748,305. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| | |
| REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| Russell 2000 Index, mini, Long, expires 06/16/17 | 21 | 1,468,320 | 30,899 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $622,605,033 | $— | $— | $622,605,033 | |
| Other Investment Company1 | 9,047,203 | — | — | 9,047,203 | |
| Short-Term Investment1 | — | 2,305,501 | — | 2,305,501 | |
| Total | $631,652,236 | $2,305,501 | $— | $633,957,737 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $30,899 | $— | $— | $30,899 | |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $551,114,568) including securities on loan of $8,748,305 | | $624,910,534 |
| Collateral invested for securities on loan, at value (cost $9,047,203) | + | 9,047,203 |
| Total investments, at value (cost $560,161,771) | | 633,957,737 |
| Deposit with broker for futures contracts | | 399,300 |
| Receivables: | | |
| Investments sold | | 18,228,700 |
| Fund shares sold | | 297,227 |
| Income from securities on loan | | 44,932 |
| Dividends | | 37,846 |
| Foreign tax reclaims | | 399 |
| Interest | | 78 |
| Prepaid expenses | + | 21,954 |
| Total assets | | 652,988,173 |
| Liabilities |
| Collateral held for securities on loan | | 9,047,203 |
| Payables: | | |
| Investments bought | | 16,222,048 |
| Investment adviser and administrator fees | | 412,630 |
| Shareholder service fees | | 124,603 |
| Independent trustees' fees | | 361 |
| Fund shares redeemed | | 661,619 |
| Variation margin on futures contracts | | 21,735 |
| Accrued expenses | + | 65,271 |
| Total liabilities | | 26,555,470 |
| Net Assets |
| Total assets | | 652,988,173 |
| Total liabilities | – | 26,555,470 |
| Net assets | | $626,432,703 |
| Net Assets by Source | | |
| Capital received from investors | | 504,964,760 |
| Distributions in excess of net investment income | | (816,522) |
| Net realized capital gains | | 48,457,600 |
| Net unrealized capital appreciation | | 73,826,865 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $626,432,703 | | 28,424,111 | | $22.04 |
| | | | | |
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $7,094) | | $3,653,433 |
| Interest | | 6,769 |
| Securities on loan, net | + | 148,833 |
| Total investment income | | 3,809,035 |
| Expenses |
| Investment adviser and administrator fees | | 2,523,687 |
| Shareholder service fees | | 750,893 |
| Portfolio accounting fees | | 24,524 |
| Shareholder reports | | 23,975 |
| Custodian fees | | 18,215 |
| Professional fees | | 17,582 |
| Registration fees | | 14,629 |
| Transfer agent fees | | 9,706 |
| Independent trustees' fees | | 5,744 |
| Interest expense | | 275 |
| Other expenses | + | 5,098 |
| Total expenses | | 3,394,328 |
| Expense reduction by CSIM and its affiliates | – | 9,706 |
| Net expenses | – | 3,384,622 |
| Net investment income | | 424,413 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 54,266,443 |
| Net realized gains on futures contracts | + | 480,204 |
| Net realized gains | | 54,746,647 |
| Net change in unrealized appreciation (depreciation) on investments | | 43,959,862 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 30,899 |
| Net change in unrealized appreciation (depreciation) | + | 43,990,761 |
| Net realized and unrealized gains | | 98,737,408 |
| Increase in net assets resulting from operations | | $99,161,821 |
Schwab Active Equity Funds | Semiannual Report
Schwab Small-Cap Equity Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $424,413 | $2,188,154 |
| Net realized gains (losses) | | 54,746,647 | (6,273,721) |
| Net change in unrealized appreciation (depreciation) | + | 43,990,761 | 12,056,144 |
| Increase in net assets from operations | | 99,161,821 | 7,970,577 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (2,651,266) | (1,300,102) |
| Distributions from net realized gains | + | — | (75,008,179) |
| Total distributions | | ($2,651,266) | ($76,308,281) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 1,366,301 | $29,438,831 | 4,063,466 | $71,865,992 |
| Shares reinvested | | 87,796 | 1,920,104 | 3,095,037 | 55,617,808 |
| Shares redeemed | + | (3,413,574) | (72,895,037) | (6,528,284) | (118,052,147) |
| Net transactions in fund shares | | (1,959,477) | ($41,536,102) | 630,219 | $9,431,653 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 30,383,588 | $571,458,250 | 29,753,369 | $630,364,301 |
| Total increase or decrease | + | (1,959,477) | 54,974,453 | 630,219 | (58,906,051) |
| End of period | | 28,424,111 | $626,432,703 | 30,383,588 | $571,458,250 |
| Distributions in excess of net investment income/Net investment income not yet distributed | | | ($816,522) | | $1,410,331 |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $16.25 | $17.46 | $19.02 | $18.62 | $16.36 | $15.32 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | (0.02) 1 | 0.03 1 | (0.01) 1 | (0.08) | (0.10) | (0.08) |
| Net realized and unrealized gains (losses) | 1.37 | 0.49 | 0.89 | 1.99 | 2.36 | 1.12 |
| Total from investment operations | 1.35 | 0.52 | 0.88 | 1.91 | 2.26 | 1.04 |
| Less distributions: | | | | | | |
| Distributions from net investment income | — | (0.12) | — | — | — | — |
| Distributions from net realized gains | (0.48) | (1.61) | (2.44) | (1.51) | — | — |
| Total distributions | (0.48) | (1.73) | (2.44) | (1.51) | — | — |
| Net asset value at end of period | $17.12 | $16.25 | $17.46 | $19.02 | $18.62 | $16.36 |
| Total return | 8.36% 2 | 3.55% | 4.84% | 11.07% | 13.81% | 6.79% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses (including dividend expense on short sales) | 1.78% 3 | 1.85% | 1.82% | 1.99% | 2.48% | 2.08% |
| Net operating expenses (excluding dividend expense on short sales)4 | 1.44% 3 | 1.57% | 1.54% | 1.52% | 1.48% | 1.53% |
| Gross operating expenses | 1.79% 3 | 1.87% | 1.84% | 2.02% | 2.52% | 2.13% |
| Net investment income (loss) | (0.25%) 3 | 0.22% | (0.06%) | (0.46%) | (0.49%) | (0.47%) |
| Portfolio turnover rate | 87% 2 | 142% | 146% | 142% | 130% | 109% |
| Net assets, end of period (x 1,000,000) | $258 | $204 | $212 | $200 | $193 | $194 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
The ratios of net operating expenses would have been 1.33%, if stock loan fees on short sales had not been incurred.
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.5% | Common Stock | 222,344,677 | 251,788,991 |
| 1.6% | Other Investment Company | 4,092,008 | 4,092,008 |
| 99.1% | Total Investments | 226,436,685 | 255,880,999 |
| (40.7%) | Short Sales | (101,573,372) | (105,132,590) |
| 41.6% | Other Assets and Liabilities, Net | | 107,375,697 |
| 100.0% | Net Assets | | 258,124,106 |
| Security | Number
of Shares | Value ($) |
| Common Stock 97.5% of net assets |
| |
| Automobiles & Components 0.7% |
| Lear Corp. | 13,525 | 1,929,477 |
| |
| Banks 6.3% |
| Bank of America Corp. (a) | 202,067 | 4,716,244 |
| CIT Group, Inc. | 16,610 | 769,209 |
| Citigroup, Inc. (a) | 96,007 | 5,675,934 |
| Citizens Financial Group, Inc. | 20,823 | 764,412 |
| Essent Group Ltd. * | 13,780 | 509,998 |
| MGIC Investment Corp. *(a) | 89,633 | 944,732 |
| Regions Financial Corp. (a) | 211,814 | 2,912,442 |
| | | 16,292,971 |
| |
| Capital Goods 6.2% |
| Allison Transmission Holdings, Inc. (a) | 85,439 | 3,304,781 |
| Argan, Inc. | 9,099 | 608,268 |
| L3 Technologies, Inc. | 3,016 | 518,058 |
| Lockheed Martin Corp. | 6,686 | 1,801,543 |
| Moog, Inc., Class A * | 10,335 | 709,498 |
| Oshkosh Corp. | 29,121 | 2,020,706 |
| Regal Beloit Corp. | 11,624 | 916,552 |
| The Boeing Co. (a) | 20,270 | 3,746,504 |
| The Timken Co. | 40,965 | 1,976,561 |
| WESCO International, Inc. * | 6,901 | 420,616 |
| | | 16,023,087 |
| |
| Commercial & Professional Services 2.6% |
| ACCO Brands Corp. * | 29,257 | 416,912 |
| LSC Communications, Inc. | 26,430 | 683,744 |
| ManpowerGroup, Inc. | 19,837 | 2,003,140 |
| The Brink's Co. (a) | 25,771 | 1,582,340 |
| West Corp. | 77,000 | 2,055,130 |
| | | 6,741,266 |
| |
| Consumer Durables & Apparel 1.5% |
| iRobot Corp. * | 13,384 | 1,067,240 |
| Lennar Corp., Class A | 16,262 | 821,231 |
| M.D.C. Holdings, Inc. | 24,626 | 763,652 |
| Michael Kors Holdings Ltd. * | 30,447 | 1,136,587 |
| | | 3,788,710 |
| |
| Security | Number
of Shares | Value ($) |
| Consumer Services 1.2% |
| ClubCorp Holdings, Inc. | 38,764 | 521,376 |
| International Game Technology plc (a) | 80,785 | 1,793,427 |
| Wyndham Worldwide Corp. | 7,528 | 717,494 |
| | | 3,032,297 |
| |
| Diversified Financials 2.8% |
| Ally Financial, Inc. (a) | 178,131 | 3,526,994 |
| Capital One Financial Corp. | 8,105 | 651,480 |
| Synchrony Financial | 82,315 | 2,288,357 |
| Voya Financial, Inc. (a) | 23,931 | 894,541 |
| | | 7,361,372 |
| |
| Energy 6.7% |
| Anadarko Petroleum Corp. | 27,671 | 1,577,800 |
| Apache Corp. (a) | 28,166 | 1,369,994 |
| Baker Hughes, Inc. (a) | 37,188 | 2,207,852 |
| Marathon Petroleum Corp. | 13,808 | 703,379 |
| Newfield Exploration Co. * | 35,627 | 1,233,407 |
| Southwestern Energy Co. *(a) | 360,735 | 2,709,120 |
| The Williams Cos., Inc. | 61,058 | 1,870,207 |
| Valero Energy Corp. (a) | 37,292 | 2,409,436 |
| World Fuel Services Corp. (a) | 89,274 | 3,287,961 |
| | | 17,369,156 |
| |
| Food & Staples Retailing 2.4% |
| CVS Health Corp. | 7,389 | 609,149 |
| Wal-Mart Stores, Inc. (a) | 74,079 | 5,569,259 |
| | | 6,178,408 |
| |
| Food, Beverage & Tobacco 4.9% |
| Bunge Ltd. | 11,015 | 870,515 |
| Dean Foods Co. (a) | 111,052 | 2,192,166 |
| Dr Pepper Snapple Group, Inc. (a) | 14,877 | 1,363,477 |
| Fresh Del Monte Produce, Inc. | 11,935 | 731,616 |
| PepsiCo, Inc. (a) | 50,700 | 5,743,296 |
| Tyson Foods, Inc., Class A | 13,996 | 899,383 |
| Universal Corp. | 11,230 | 824,844 |
| | | 12,625,297 |
| |
| Health Care Equipment & Services 5.4% |
| Allscripts Healthcare Solutions, Inc. * | 120,814 | 1,446,144 |
| Becton, Dickinson & Co. | 5,285 | 988,136 |
| Express Scripts Holding Co. * | 41,928 | 2,571,863 |
| Haemonetics Corp. * | 11,401 | 477,474 |
| Halyard Health, Inc. * | 11,435 | 451,682 |
| Hologic, Inc. *(a) | 27,581 | 1,245,282 |
| McKesson Corp. | 24,385 | 3,372,202 |
| Owens & Minor, Inc. | 56,009 | 1,940,712 |
| Zimmer Biomet Holdings, Inc. | 11,795 | 1,411,272 |
| | | 13,904,767 |
| |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Household & Personal Products 1.7% |
| HRG Group, Inc. *(a) | 221,767 | 4,437,558 |
| |
| Insurance 3.7% |
| CNA Financial Corp. | 29,258 | 1,324,217 |
| Everest Re Group Ltd. | 8,471 | 2,132,236 |
| Loews Corp. | 33,457 | 1,559,765 |
| The Allstate Corp. (a) | 56,954 | 4,629,791 |
| | | 9,646,009 |
| |
| Materials 4.4% |
| Axalta Coating Systems Ltd. * | 34,890 | 1,094,499 |
| Berry Global Group, Inc. * | 59,588 | 2,979,400 |
| Cabot Corp. (a) | 9,635 | 579,931 |
| Freeport-McMoRan, Inc. * | 70,274 | 895,993 |
| Huntsman Corp. | 38,366 | 950,326 |
| Newmont Mining Corp. | 19,098 | 645,703 |
| Owens-Illinois, Inc. *(a) | 56,431 | 1,231,324 |
| Steel Dynamics, Inc. (a) | 37,097 | 1,340,686 |
| Stepan Co. | 9,286 | 787,453 |
| Trinseo S.A. (a) | 8,205 | 544,812 |
| Worthington Industries, Inc. | 9,622 | 418,557 |
| | | 11,468,684 |
| |
| Media 2.2% |
| Live Nation Entertainment, Inc. *(a) | 145,686 | 4,685,262 |
| Sinclair Broadcast Group, Inc., Class A | 24,944 | 984,041 |
| | | 5,669,303 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 11.4% |
| AbbVie, Inc. (a) | 45,058 | 2,971,125 |
| Amgen, Inc. (a) | 27,822 | 4,543,889 |
| Biogen, Inc. *(a) | 11,992 | 3,252,350 |
| Celgene Corp. *(a) | 32,645 | 4,049,612 |
| Emergent BioSolutions, Inc. *(a) | 76,765 | 2,296,041 |
| Horizon Pharma plc * | 28,759 | 442,313 |
| INC Research Holdings, Inc., Class A * | 24,972 | 1,123,740 |
| Mallinckrodt plc * | 11,696 | 548,776 |
| Merck & Co., Inc. (a) | 44,165 | 2,752,805 |
| Mylan N.V. * | 28,254 | 1,055,287 |
| PAREXEL International Corp. * | 17,866 | 1,140,387 |
| Pfizer, Inc. (a) | 131,725 | 4,468,112 |
| United Therapeutics Corp. * | 5,844 | 734,591 |
| | | 29,379,028 |
| |
| Real Estate 4.0% |
| Alexander's, Inc. | 1,369 | 595,255 |
| Apartment Investment & Management Co., Class A | 30,423 | 1,330,702 |
| Brixmor Property Group, Inc. | 19,282 | 380,820 |
| Outfront Media, Inc. | 35,090 | 917,954 |
| PS Business Parks, Inc. | 5,443 | 661,542 |
| Retail Properties of America, Inc., Class A (a) | 262,558 | 3,502,524 |
| Senior Housing Properties Trust (a) | 119,973 | 2,581,819 |
| Washington Prime Group, Inc. | 36,076 | 317,469 |
| | | 10,288,085 |
| |
| Retailing 5.8% |
| Amazon.com, Inc. *(a) | 7,831 | 7,243,597 |
| Best Buy Co., Inc. | 11,242 | 582,448 |
| Burlington Stores, Inc. * | 17,556 | 1,736,639 |
| Security | Number
of Shares | Value ($) |
| Rent-A-Center, Inc. (a) | 121,412 | 1,297,894 |
| Shutterfly, Inc. *(a) | 18,347 | 952,209 |
| The Gap, Inc. | 53,284 | 1,396,041 |
| The TJX Cos., Inc. | 21,462 | 1,687,772 |
| | | 14,896,600 |
| |
| Semiconductors & Semiconductor Equipment 0.7% |
| Amkor Technology, Inc. * | 49,434 | 582,333 |
| Applied Materials, Inc. | 12,525 | 508,640 |
| ON Semiconductor Corp. * | 42,308 | 599,927 |
| | | 1,690,900 |
| |
| Software & Services 11.4% |
| Activision Blizzard, Inc. (a) | 27,794 | 1,452,236 |
| Alphabet, Inc., Class A *(a) | 4,102 | 3,792,381 |
| Barracuda Networks, Inc. * | 47,505 | 965,777 |
| CA, Inc. | 55,504 | 1,822,196 |
| Cardtronics plc, Class A *(a) | 33,000 | 1,372,140 |
| CDK Global, Inc. | 19,887 | 1,292,854 |
| Citrix Systems, Inc. * | 10,868 | 879,656 |
| CommVault Systems, Inc. * | 12,593 | 635,317 |
| Convergys Corp. | 36,474 | 821,030 |
| Electronic Arts, Inc. * | 8,764 | 831,002 |
| Endurance International Group Holdings, Inc. * | 78,017 | 592,929 |
| First Data Corp., Class A * | 75,536 | 1,179,872 |
| GoDaddy, Inc., Class A * | 33,827 | 1,316,547 |
| Microsoft Corp. | 12,952 | 886,694 |
| Nuance Communications, Inc. *(a) | 144,702 | 2,588,719 |
| Oracle Corp. | 22,582 | 1,015,287 |
| Progress Software Corp. | 78,592 | 2,335,754 |
| Take-Two Interactive Software, Inc. * | 31,297 | 1,967,016 |
| Teradata Corp. *(a) | 93,000 | 2,713,740 |
| Web.com Group, Inc. * | 44,592 | 860,626 |
| | | 29,321,773 |
| |
| Technology Hardware & Equipment 8.0% |
| Anixter International, Inc. * | 17,259 | 1,407,471 |
| Apple, Inc. (a) | 23,229 | 3,336,846 |
| Benchmark Electronics, Inc. *(a) | 71,780 | 2,275,426 |
| CommScope Holding Co., Inc. * | 36,622 | 1,539,589 |
| F5 Networks, Inc. * | 6,286 | 811,711 |
| HP, Inc. (a) | 117,174 | 2,205,215 |
| Jabil Circuit, Inc. | 16,133 | 468,180 |
| NCR Corp. *(a) | 75,135 | 3,099,319 |
| NetApp, Inc. | 24,554 | 978,477 |
| Rogers Corp. * | 9,802 | 1,009,018 |
| Seagate Technology plc | 18,117 | 763,269 |
| Tech Data Corp. * | 22,545 | 2,156,429 |
| Xerox Corp. | 68,753 | 494,334 |
| | | 20,545,284 |
| |
| Telecommunication Services 0.6% |
| T-Mobile US, Inc. *(a) | 6,321 | 425,214 |
| Telephone & Data Systems, Inc. (a) | 40,772 | 1,119,599 |
| | | 1,544,813 |
| |
| Transportation 1.0% |
| Avis Budget Group, Inc. * | 35,432 | 1,080,676 |
| JetBlue Airways Corp. * | 38,155 | 832,924 |
| XPO Logistics, Inc. * | 15,204 | 750,925 |
| | | 2,664,525 |
| |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Utilities 1.9% |
| CenterPoint Energy, Inc. | 63,001 | 1,797,418 |
| FirstEnergy Corp. (a) | 83,857 | 2,510,679 |
| UGI Corp. | 13,587 | 681,524 |
| | | 4,989,621 |
| Total Common Stock |
| (Cost $222,344,677) | | 251,788,991 |
|
| Other Investment Company 1.6% of net assets |
| |
| Money Market Fund 1.6% |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (b) | 4,092,008 | 4,092,008 |
| Total Other Investment Company |
| (Cost $4,092,008) | | 4,092,008 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $226,618,864 and the unrealized appreciation and depreciation were $37,608,332 and ($8,346,197), respectively, with a net unrealized appreciation of $29,262,135.
| * | Non-income producing security. |
| (a) | All or a portion of this security is held as collateral for short sales. |
| (b) | The rate shown is the 7-day yield. |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 5 | 595,125 | 2,967 |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
In addition to the above, the fund had the following short sale positions at 04/30/17:
| Security | Number
of Shares | Value ($) |
| Short Sales (40.7%) of net assets |
| |
| Automobiles & Components (1.2%) |
| Dorman Products, Inc. * | 24,359 | (2,025,451) |
| Tesla, Inc. * | 3,170 | (995,602) |
| | | (3,021,053) |
| |
| Banks (1.4%) |
| Flagstar Bancorp, Inc. * | 33,763 | (987,230) |
| LendingTree, Inc. * | 18,650 | (2,627,785) |
| | | (3,615,015) |
| |
| Capital Goods (3.5%) |
| Air Lease Corp. | 27,691 | (1,056,135) |
| Aircastle Ltd. | 33,746 | (797,081) |
| Armstrong World Industries, Inc. * | 24,076 | (1,125,553) |
| Granite Construction, Inc. | 33,390 | (1,759,987) |
| Johnson Controls International plc | 30,862 | (1,282,933) |
| Mercury Systems, Inc. * | 30,090 | (1,124,764) |
| Proto Labs, Inc. * | 22,580 | (1,309,640) |
| Rexnord Corp. * | 13,459 | (328,400) |
| Triumph Group, Inc. | 7,402 | (193,932) |
| | | (8,978,425) |
| |
| Commercial & Professional Services (1.9%) |
| Healthcare Services Group, Inc. | 28,291 | (1,298,840) |
| Korn/Ferry International | 43,382 | (1,405,577) |
| The Advisory Board Co. * | 9,604 | (490,764) |
| Verisk Analytics, Inc. * | 22,482 | (1,861,734) |
| | | (5,056,915) |
| |
| Consumer Durables & Apparel (1.4%) |
| G-III Apparel Group Ltd. * | 18,532 | (439,208) |
| TRI Pointe Group, Inc. * | 196,508 | (2,446,525) |
| Under Armour, Inc., Class A * | 31,870 | (684,886) |
| | | (3,570,619) |
| |
| Consumer Services (2.1%) |
| Caesars Acquisition Co., Class A * | 7,123 | (124,296) |
| Chipotle Mexican Grill, Inc. * | 1,584 | (751,561) |
| ILG, Inc. | 81,154 | (1,956,623) |
| Marriott Vacations Worldwide Corp. | 12,259 | (1,350,697) |
| Norwegian Cruise Line Holdings Ltd. * | 10,922 | (589,023) |
| Yum! Brands, Inc. | 12,224 | (803,728) |
| | | (5,575,928) |
| |
| Diversified Financials (0.9%) |
| LendingClub Corp. * | 380,860 | (2,228,031) |
| |
| Energy (3.6%) |
| Cheniere Energy, Inc. * | 49,384 | (2,239,564) |
| Golar LNG Ltd. | 101,320 | (2,584,673) |
| Kosmos Energy Ltd. * | 144,283 | (867,141) |
| Matador Resources Co. * | 14,765 | (320,105) |
| Oasis Petroleum, Inc. * | 16,164 | (192,998) |
| Parsley Energy, Inc., Class A * | 16,283 | (485,071) |
| RSP Permian, Inc. * | 27,314 | (1,039,298) |
| Security | Number
of Shares | Value ($) |
| SM Energy Co. | 31,642 | (714,793) |
| US Silica Holdings, Inc. | 20,651 | (857,016) |
| | | (9,300,659) |
| |
| Food & Staples Retailing (0.1%) |
| Casey's General Stores, Inc. | 2,113 | (236,804) |
| |
| Food, Beverage & Tobacco (0.1%) |
| Cal-Maine Foods, Inc. | 5,436 | (205,209) |
| |
| Health Care Equipment & Services (2.2%) |
| Acadia Healthcare Co., Inc. * | 27,641 | (1,204,595) |
| Amedisys, Inc. * | 10,860 | (588,612) |
| DENTSPLY SIRONA, Inc. | 3,815 | (241,261) |
| DexCom, Inc. * | 11,089 | (864,498) |
| Nevro Corp. * | 14,104 | (1,328,879) |
| Penumbra, Inc. * | 16,172 | (1,381,897) |
| | | (5,609,742) |
| |
| Household & Personal Products (0.9%) |
| Coty, Inc., Class A | 58,740 | (1,048,509) |
| WD-40 Co. | 11,747 | (1,231,673) |
| | | (2,280,182) |
| |
| Insurance (0.7%) |
| Enstar Group Ltd. * | 1,185 | (230,838) |
| Mercury General Corp. | 10,906 | (670,610) |
| RLI Corp. | 7,996 | (457,531) |
| Willis Towers Watson plc | 3,078 | (408,204) |
| | | (1,767,183) |
| |
| Materials (4.2%) |
| Allegheny Technologies, Inc. | 15,962 | (292,903) |
| AptarGroup, Inc. | 2,488 | (199,786) |
| Balchem Corp. | 7,030 | (570,555) |
| Ball Corp. | 43,450 | (3,340,871) |
| CF Industries Holdings, Inc. | 51,615 | (1,380,185) |
| Compass Minerals International, Inc. | 13,165 | (868,890) |
| Ferroglobe plc | 67,128 | (647,785) |
| Martin Marietta Materials, Inc. | 7,455 | (1,641,516) |
| Southern Copper Corp. | 54,924 | (1,942,662) |
| | | (10,885,153) |
| |
| Media (0.6%) |
| Liberty Broadband Corp., Class A * | 16,523 | (1,485,913) |
| Loral Space & Communications, Inc. * | 5,400 | (207,090) |
| | | (1,693,003) |
| |
| Pharmaceuticals, Biotechnology & Life Sciences (5.0%) |
| ACADIA Pharmaceuticals, Inc. * | 39,345 | (1,350,714) |
| Accelerate Diagnostics, Inc. * | 21,459 | (585,831) |
| Aerie Pharmaceuticals, Inc. * | 10,308 | (454,067) |
| Aimmune Therapeutics, Inc. * | 8,849 | (172,024) |
| Alnylam Pharmaceuticals, Inc. * | 36,980 | (1,982,128) |
| Clovis Oncology, Inc. * | 6,390 | (369,917) |
| Dermira, Inc. * | 29,946 | (1,019,961) |
| Illumina, Inc. * | 4,913 | (908,217) |
| Intercept Pharmaceuticals, Inc. * | 15,525 | (1,744,234) |
| Kite Pharma, Inc. * | 13,498 | (1,107,916) |
| Prothena Corp. plc * | 8,497 | (459,943) |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Sage Therapeutics, Inc. * | 4,666 | (331,286) |
| TESARO, Inc. * | 3,086 | (455,463) |
| TherapeuticsMD, Inc. * | 65,758 | (335,366) |
| Ultragenyx Pharmaceutical, Inc. * | 25,514 | (1,642,846) |
| | | (12,919,913) |
| |
| Real Estate (1.9%) |
| Acadia Realty Trust | 68,401 | (1,989,101) |
| Life Storage, Inc. | 5,400 | (423,306) |
| Terreno Realty Corp. | 41,377 | (1,277,722) |
| Weyerhaeuser Co. | 34,101 | (1,155,001) |
| | | (4,845,130) |
| |
| Retailing (1.6%) |
| CarMax, Inc. * | 20,566 | (1,203,111) |
| Five Below, Inc. * | 7,880 | (387,066) |
| Ollie's Bargain Outlet Holdings, Inc. * | 24,196 | (926,707) |
| RH * | 16,263 | (780,136) |
| TripAdvisor, Inc. * | 20,312 | (914,243) |
| | | (4,211,263) |
| |
| Semiconductors & Semiconductor Equipment (0.8%) |
| Cavium, Inc. * | 9,874 | (679,825) |
| First Solar, Inc. * | 16,079 | (475,134) |
| Inphi Corp. * | 3,375 | (139,792) |
| Integrated Device Technology, Inc. * | 5,733 | (137,535) |
| Qorvo, Inc. * | 9,760 | (663,973) |
| | | (2,096,259) |
| |
| Software & Services (3.1%) |
| ACI Worldwide, Inc. * | 69,957 | (1,503,376) |
| Benefitfocus, Inc. * | 10,863 | (342,184) |
| Ellie Mae, Inc. * | 5,467 | (556,322) |
| FireEye, Inc. * | 36,376 | (455,064) |
| Security | Number
of Shares | Value ($) |
| PTC, Inc. * | 10,801 | (583,794) |
| Q2 Holdings, Inc. * | 9,000 | (343,350) |
| ServiceNow, Inc. * | 2,723 | (257,269) |
| Symantec Corp. | 33,989 | (1,075,072) |
| Tableau Software, Inc., Class A * | 18,932 | (1,016,270) |
| WEX, Inc. * | 7,676 | (778,807) |
| Zillow Group, Inc., Class A * | 30,761 | (1,183,991) |
| | | (8,095,499) |
| |
| Technology Hardware & Equipment (3.0%) |
| Arista Networks, Inc. * | 10,739 | (1,499,594) |
| Coherent, Inc. * | 3,343 | (720,751) |
| Diebold Nixdorf, Inc. | 31,439 | (886,580) |
| Infinera Corp. * | 251,611 | (2,495,981) |
| Littelfuse, Inc. | 2,905 | (447,806) |
| Universal Display Corp. | 14,721 | (1,315,321) |
| ViaSat, Inc. * | 5,710 | (365,611) |
| | | (7,731,644) |
| |
| Telecommunication Services (0.2%) |
| Iridium Communications, Inc. * | 44,856 | (475,474) |
| |
| Utilities (0.3%) |
| American States Water Co. | 10,703 | (476,498) |
| New Jersey Resources Corp. | 6,369 | (256,989) |
| | | (733,487) |
| Total Short Sales |
| (Proceeds $101,573,372) | | (105,132,590) |
End of Short Sale Positions.
| * | Non-income producing security |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
Assets Valuation Input
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $251,788,991 | $— | $— | $251,788,991 | |
| Other Investment Company1 | 4,092,008 | — | — | 4,092,008 | |
| Total | $255,880,999 | $— | $— | $255,880,999 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $2,967 | $— | $— | $2,967 | |
Liabilities Valuation Input
| | | | | |
| | | | | |
| Other Financial Instruments | | | | | |
| Short Sales1 | ($105,132,590) | $— | $— | ($105,132,590) | |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $226,436,685) | | $255,880,999 |
| Cash | | 249,461 |
| Deposits with brokers for short sales and futures contracts | | 106,296,792 |
| Receivables: | | |
| Investments sold | | 1,628,609 |
| Fund shares sold | | 2,343,260 |
| Dividends | | 150,239 |
| Prepaid expenses | + | 12,764 |
| Total assets | | 366,562,124 |
| Liabilities |
| Securities sold short, at value (proceeds $101,573,372) | | 105,132,590 |
| Payables: | | |
| Investments bought | | 2,464,162 |
| Investment adviser and administrator fees | | 219,333 |
| Shareholder service fees | | 50,005 |
| Independent trustees' fees | | 270 |
| Fund shares redeemed | | 526,611 |
| Dividends on short sales | | 7,117 |
| Variation margin on futures contracts | | 1,400 |
| Accrued expenses | + | 36,530 |
| Total liabilities | | 108,438,018 |
| Net Assets |
| Total assets | | 366,562,124 |
| Total liabilities | – | 108,438,018 |
| Net assets | | $258,124,106 |
| Net Assets by Source | | |
| Capital received from investors | | 225,154,143 |
| Net investment loss | | (635,247) |
| Net realized capital gains | | 7,717,147 |
| Net unrealized capital appreciation | | 25,888,063 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $258,124,106 | | 15,081,343 | | $17.12 |
| | | | | |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends | | $1,823,516 |
| Expenses |
| Investment adviser and administrator fees | | 1,251,140 |
| Shareholder service fees | | 262,218 |
| Dividends on short sales | | 411,389 |
| Stock loan fees on short sales | | 131,903 |
| Professional fees | | 18,661 |
| Registration fees | | 13,264 |
| Portfolio accounting fees | | 11,091 |
| Transfer agent fees | | 10,128 |
| Custodian fees | | 9,742 |
| Shareholder reports | | 6,426 |
| Independent trustees' fees | | 4,492 |
| Interest expense | | 369 |
| Other expenses | + | 1,738 |
| Total expenses | | 2,132,561 |
| Expense reduction by CSIM and its affiliates | – | 10,128 |
| Net expenses | – | 2,122,433 |
| Net investment loss | | (298,917) |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 7,959,286 |
| Net realized gains on futures contracts | + | 152,860 |
| Net realized gains | | 8,112,146 |
| Net change in unrealized appreciation (depreciation) on investments | | 17,816,956 |
| Net change in unrealized appreciation (depreciation) on futures contracts | | 10,983 |
| Net change in unrealized appreciation (depreciation) on short sales | + | (7,945,528) |
| Net change in unrealized appreciation (depreciation) | + | 9,882,411 |
| Net realized and unrealized gains | | 17,994,557 |
| Increase in net assets resulting from operations | | $17,695,640 |
Schwab Active Equity Funds | Semiannual Report
Schwab Hedged Equity Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income (loss) | | ($298,917) | $444,158 |
| Net realized gains | | 8,112,146 | 7,153,419 |
| Net change in unrealized appreciation (depreciation) | + | 9,882,411 | (1,484,704) |
| Increase in net assets from operations | | 17,695,640 | 6,112,873 |
| Distributions to Shareholders | |
| Distributions from net investment income | | — | (1,497,867) |
| Distributions from net realized gains | + | (6,371,171) | (19,419,333) |
| Total distributions | | ($6,371,171) | ($20,917,200) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 4,021,717 | $68,204,528 | 3,865,291 | $61,376,265 |
| Shares reinvested | | 311,206 | 5,290,506 | 1,134,070 | 17,510,038 |
| Shares redeemed | + | (1,835,337) | (31,187,470) | (4,533,468) | (71,119,986) |
| Net transactions in fund shares | | 2,497,586 | $42,307,564 | 465,893 | $7,766,317 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 12,583,757 | $204,492,073 | 12,117,864 | $211,530,083 |
| Total increase or decrease | + | 2,497,586 | 53,632,033 | 465,893 | (7,038,010) |
| End of period | | 15,081,343 | $258,124,106 | 12,583,757 | $204,492,073 |
| Distributions in excess of net investment income | | | ($635,247) | | ($336,330) |
Schwab Active Equity Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $21.56 | $26.68 | $28.19 | $24.57 | $20.59 | $17.29 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.13 1 | 0.19 1 | 0.14 1 | 0.23 | 0.22 | 0.27 |
| Net realized and unrealized gains (losses) | 2.67 | (1.52) | 1.78 | 5.84 | 6.26 | 3.18 |
| Total from investment operations | 2.80 | (1.33) | 1.92 | 6.07 | 6.48 | 3.45 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.20) | (0.16) | (0.21) | (0.19) | (0.33) | (0.15) |
| Distributions from net realized gains | (0.37) | (3.63) | (3.22) | (2.26) | (2.17) | — |
| Total distributions | (0.57) | (3.79) | (3.43) | (2.45) | (2.50) | (0.15) |
| Net asset value at end of period | $23.79 | $21.56 | $26.68 | $28.19 | $24.57 | $20.59 |
| Total return | 13.25% 2 | (5.78%) | 7.26% | 27.06% | 35.46% | 20.10% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.80% 3 | 0.80% | 0.79% | 0.80% | 0.82% | 0.82% |
| Gross operating expenses | 0.81% 3 | 0.80% | 0.80% | 0.81% | 0.83% | 0.85% |
| Net investment income (loss) | 1.14% 3 | 0.82% | 0.52% | 0.93% | 1.06% | 1.44% |
| Portfolio turnover rate | 21% 2 | 54% | 75% | 57% | 54% | 60% |
| Net assets, end of period (x 1,000,000) | $839 | $853 | $1,118 | $1,064 | $816 | $511 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
Schwab Active Equity Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.2% | Common Stock | 631,679,528 | 832,392,123 |
| 0.5% | Short-Term Investment | 4,534,118 | 4,534,118 |
| 99.7% | Total Investments | 636,213,646 | 836,926,241 |
| 0.3% | Other Assets and Liabilities, Net | | 2,427,210 |
| 100.0% | Net Assets | | 839,353,451 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.2% of net assets |
| |
| Australia 0.9% |
| Health Care Equipment & Services 0.9% |
| Ansell Ltd. | 265,007 | 4,717,380 |
| Cochlear Ltd. | 30,283 | 3,170,035 |
| | | 7,887,415 |
| |
| Denmark 4.1% |
| Pharmaceuticals, Biotechnology & Life Sciences 4.1% |
| Genmab A/S * | 38,300 | 7,620,732 |
| H. Lundbeck A/S | 112,006 | 5,745,349 |
| Novo Nordisk A/S, Class B | 532,514 | 20,734,420 |
| | | 34,100,501 |
| |
| Finland 1.7% |
| Pharmaceuticals, Biotechnology & Life Sciences 1.7% |
| Orion Oyj, Class B | 250,100 | 14,333,114 |
| |
| France 0.7% |
| Pharmaceuticals, Biotechnology & Life Sciences 0.7% |
| Sanofi | 65,565 | 6,195,485 |
| |
| Hong Kong 0.3% |
| Health Care Equipment & Services 0.1% |
| Shanghai Pharmaceuticals Holding Co., Ltd., H Shares | 163,200 | 431,654 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.2% |
| CSPC Pharmaceutical Group Ltd. | 1,594,000 | 2,210,903 |
| | | 2,642,557 |
| |
| Ireland 1.9% |
| Health Care Equipment & Services 1.1% |
| Medtronic plc | 112,465 | 9,344,717 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.8% |
| Allergan plc | 28,361 | 6,916,113 |
| | | 16,260,830 |
| |
| Italy 1.2% |
| Pharmaceuticals, Biotechnology & Life Sciences 1.2% |
| Recordati S.p.A. | 262,535 | 9,726,156 |
| |
| Security | Number
of Shares | Value ($) |
| Japan 5.2% |
| Health Care Equipment & Services 2.0% |
| Hoya Corp. | 340,200 | 16,259,104 |
| Pharmaceuticals, Biotechnology & Life Sciences 3.2% |
| Astellas Pharma, Inc. | 1,270,900 | 16,759,499 |
| Shionogi & Co., Ltd. | 201,100 | 10,356,217 |
| | | 27,115,716 |
| | | 43,374,820 |
| |
| New Zealand 0.1% |
| Health Care Equipment & Services 0.1% |
| Fisher & Paykel Healthcare Corp., Ltd. | 69,000 | 477,342 |
| |
| Republic of Korea 0.1% |
| Health Care Equipment & Services 0.1% |
| Vieworks Co., Ltd. | 18,930 | 1,095,415 |
| |
| Spain 0.1% |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Grifols S.A. | 18,200 | 488,501 |
| |
| Switzerland 6.1% |
| Pharmaceuticals, Biotechnology & Life Sciences 6.1% |
| Lonza Group AG * | 86,310 | 17,659,884 |
| Novartis AG | 21,092 | 1,623,769 |
| Roche Holding AG | 116,288 | 30,428,417 |
| Tecan Group AG | 7,657 | 1,306,723 |
| | | 51,018,793 |
| |
| United Kingdom 3.8% |
| Pharmaceuticals, Biotechnology & Life Sciences 3.8% |
| GlaxoSmithKline plc | 1,289,898 | 25,962,866 |
| Indivior plc | 1,321,707 | 5,736,864 |
| | | 31,699,730 |
| |
| United States 73.0% |
| Health Care Equipment & Services 26.3% |
| Abbott Laboratories | 188,000 | 8,204,320 |
| Allscripts Healthcare Solutions, Inc. * | 459,400 | 5,499,018 |
| AngioDynamics, Inc. * | 78,500 | 1,218,320 |
| Anthem, Inc. | 11,600 | 2,063,524 |
| Becton, Dickinson & Co. | 86,700 | 16,210,299 |
| Boston Scientific Corp. * | 598,900 | 15,798,982 |
| Cardiovascular Systems, Inc. * | 36,400 | 1,087,268 |
| Centene Corp. * | 84,200 | 6,264,480 |
| Cigna Corp. | 50,200 | 7,849,774 |
| Community Health Systems, Inc. * | 374,950 | 3,228,320 |
| Express Scripts Holding Co. * | 321,860 | 19,742,892 |
| Haemonetics Corp. * | 187,928 | 7,870,425 |
| Halyard Health, Inc. * | 354,100 | 13,986,950 |
| HCA Holdings, Inc. * | 18,600 | 1,566,306 |
| Hill-Rom Holdings, Inc. | 203,300 | 15,377,612 |
| HMS Holdings Corp. * | 30,600 | 626,382 |
Schwab Active Equity Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Hologic, Inc. * | 144,216 | 6,511,352 |
| IDEXX Laboratories, Inc. * | 28,100 | 4,713,213 |
| Magellan Health, Inc. * | 36,500 | 2,511,200 |
| Masimo Corp. * | 94,000 | 9,657,560 |
| McKesson Corp. | 76,500 | 10,579,185 |
| Meridian Bioscience, Inc. | 140,800 | 2,083,840 |
| Natus Medical, Inc. * | 26,700 | 934,500 |
| Quality Systems, Inc. * | 372,100 | 5,306,146 |
| Teleflex, Inc. | 4,443 | 919,212 |
| UnitedHealth Group, Inc. | 199,791 | 34,939,450 |
| WellCare Health Plans, Inc. * | 80,276 | 12,315,141 |
| Zimmer Biomet Holdings, Inc. | 33,700 | 4,032,205 |
| | | 221,097,876 |
| Pharmaceuticals, Biotechnology & Life Sciences 46.7% |
| AbbVie, Inc. | 146,326 | 9,648,736 |
| Acorda Therapeutics, Inc. * | 48,242 | 779,108 |
| Agilent Technologies, Inc. | 275,100 | 15,144,255 |
| Alexion Pharmaceuticals, Inc. * | 24,000 | 3,066,720 |
| Alkermes plc * | 19,100 | 1,112,575 |
| AMAG Pharmaceuticals, Inc. * | 160,500 | 3,916,200 |
| Amgen, Inc. | 259,611 | 42,399,669 |
| Biogen, Inc. * | 92,664 | 25,131,403 |
| Bristol-Myers Squibb Co. | 46,134 | 2,585,811 |
| Celgene Corp. * | 291,206 | 36,124,104 |
| Eli Lilly & Co. | 131,362 | 10,779,566 |
| Emergent BioSolutions, Inc. * | 249,700 | 7,468,527 |
| Exelixis, Inc. * | 169,475 | 3,796,240 |
| Genomic Health, Inc. * | 282,383 | 9,279,105 |
| Gilead Sciences, Inc. | 342,635 | 23,487,629 |
| Horizon Pharma plc * | 100,800 | 1,550,304 |
| Johnson & Johnson | 509,002 | 62,846,477 |
| Luminex Corp. | 39,000 | 734,370 |
| Merck & Co., Inc. | 644,165 | 40,150,805 |
| Mylan N.V. * | 49,100 | 1,833,885 |
| Pacira Pharmaceuticals, Inc. * | 8,700 | 422,385 |
| PAREXEL International Corp. * | 74,400 | 4,748,952 |
| Pfizer, Inc. | 1,477,100 | 50,103,232 |
| Phibro Animal Health Corp., Class A | 9,500 | 282,625 |
| Prestige Brands Holdings, Inc. * | 209,283 | 12,014,937 |
| SciClone Pharmaceuticals, Inc. * | 13,763 | 132,813 |
| Thermo Fisher Scientific, Inc. | 131,150 | 21,683,030 |
| Vanda Pharmaceuticals, Inc. * | 50,500 | 770,125 |
| | | 391,993,588 |
| | | 613,091,464 |
| Total Common Stock |
| (Cost $631,679,528) | | 832,392,123 |
Security
Rate, Maturity Date | Face Amount
Local Currency | Value ($) |
| Short-Term Investment 0.5% of net assets |
| |
| Time Deposit 0.5% |
| Australia & New Zealand Banking Group Ltd. |
| U.S. Dollar | | |
| 0.42%, 05/01/17 (a) | 4,534,118 | 4,534,118 |
| Total Short-Term Investment |
| (Cost $4,534,118) | | 4,534,118 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $636,470,654 and the unrealized appreciation and depreciation were $221,814,590 and ($21,359,003), respectively, with a net unrealized appreciation of $200,455,587.
At 04/30/17, the values of certain foreign securities held by the fund aggregating $193,313,673 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial note 2(a) for additional information)
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 20 | 2,380,500 | 11,870 |
Schwab Active Equity Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $639,078,450 | $— | $— | $639,078,450 | |
| Australia 1 | — | 7,887,415 | — | 7,887,415 | |
| Denmark 1 | — | 34,100,501 | — | 34,100,501 | |
| Finland 1 | — | 14,333,114 | — | 14,333,114 | |
| France 1 | — | 6,195,485 | — | 6,195,485 | |
| Hong Kong1 | — | 2,642,557 | — | 2,642,557 | |
| Japan 1 | — | 43,374,820 | — | 43,374,820 | |
| New Zealand1 | — | 477,342 | — | 477,342 | |
| Republic of Korea1 | — | 1,095,415 | — | 1,095,415 | |
| Spain 1 | — | 488,501 | — | 488,501 | |
| Switzerland 1 | — | 51,018,793 | — | 51,018,793 | |
| United Kingdom1 | — | 31,699,730 | — | 31,699,730 | |
| Short-Term Investment1 | — | 4,534,118 | — | 4,534,118 | |
| Total | $639,078,450 | $197,847,791 | $— | $836,926,241 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $11,870 | $— | $— | $11,870 | |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $11,337,985 from Level 2 to Level 1 for the period ended April 30, 2017. The transfers between Level 2 and Level 1 were primarily due to the use of international fair valuation by the fund. There were no transfers from Level 1 to Level 2 and no transfers in or out of Level 3 during the period.
Schwab Active Equity Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $636,213,646) | | $836,926,241 |
| Deposit with broker for futures contracts | | 150,000 |
| Receivables: | | |
| Investments sold | | 7,008,729 |
| Foreign tax reclaims | | 1,251,760 |
| Dividends | | 708,575 |
| Fund shares sold | | 407,098 |
| Interest | | 159 |
| Prepaid expenses | + | 22,540 |
| Total assets | | 846,475,102 |
| Liabilities |
| Payables: | | |
| Investments bought | | 6,073,046 |
| Investment adviser and administrator fees | | 362,062 |
| Shareholder service fees | | 99,674 |
| Independent trustees' fees | | 585 |
| Fund shares redeemed | | 490,004 |
| Variation margin on futures contracts | | 5,600 |
| Due to custodian | | 16 |
| Accrued expenses | + | 90,664 |
| Total liabilities | | 7,121,651 |
| Net Assets |
| Total assets | | 846,475,102 |
| Total liabilities | – | 7,121,651 |
| Net assets | | $839,353,451 |
| Net Assets by Source | | |
| Capital received from investors | | 612,186,062 |
| Net investment income not yet distributed | | 3,671,009 |
| Net realized capital gains | | 22,840,132 |
| Net unrealized capital appreciation | | 200,656,248 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $839,353,451 | | 35,284,170 | | $23.79 |
| | | | | |
Schwab Active Equity Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $363,046) | | $8,021,556 |
| Interest | | 4,361 |
| Securities on loan, net | + | 33,410 |
| Total investment income | | 8,059,327 |
| Expenses |
| Investment adviser and administrator fees | | 2,201,472 |
| Shareholder service fees | | 990,231 |
| Custodian fees | | 36,793 |
| Shareholder reports | | 31,925 |
| Portfolio accounting fees | | 27,833 |
| Transfer agent fees | | 22,346 |
| Professional fees | | 16,619 |
| Registration fees | | 14,766 |
| Independent trustees' fees | | 6,639 |
| Interest expense | | 3,627 |
| Other expenses | + | 11,271 |
| Total expenses | | 3,363,522 |
| Expense reduction by CSIM and its affiliates | – | 22,346 |
| Net expenses | – | 3,341,176 |
| Net investment income | | 4,718,151 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 23,640,705 |
| Net realized gains on futures contracts | | 36,262 |
| Net realized losses on foreign currency transactions | + | (89,235) |
| Net realized gains | | 23,587,732 |
| Net change in unrealized appreciation (depreciation) on investments | | 75,440,091 |
| Net change in unrealized appreciation (depreciation) on futures contracts | | 11,870 |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 1,833 |
| Net change in unrealized appreciation (depreciation) | + | 75,453,794 |
| Net realized and unrealized gains | | 99,041,526 |
| Increase in net assets resulting from operations | | $103,759,677 |
Schwab Active Equity Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $4,718,151 | $8,080,909 |
| Net realized gains | | 23,587,732 | 13,851,929 |
| Net change in unrealized appreciation (depreciation) | + | 75,453,794 | (78,198,470) |
| Increase (decrease) in net assets from operations | | 103,759,677 | (56,265,632) |
| Distributions to Shareholders | |
| Distributions from net investment income | | (7,795,978) | (6,691,995) |
| Distributions from net realized gains | + | (13,907,780) | (149,840,338) |
| Total distributions | | ($21,703,758) | ($156,532,333) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 1,457,729 | $32,958,886 | 2,833,641 | $64,956,918 |
| Shares reinvested | | 885,124 | 19,145,216 | 6,099,701 | 139,195,182 |
| Shares redeemed | + | (6,619,078) | (147,730,310) | (11,272,005) | (256,438,361) |
| Net transactions in fund shares | | (4,276,225) | ($95,626,208) | (2,338,663) | ($52,286,261) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 39,560,395 | $852,923,740 | 41,899,058 | $1,118,007,966 |
| Total decrease | + | (4,276,225) | (13,570,289) | (2,338,663) | (265,084,226) |
| End of period | | 35,284,170 | $839,353,451 | 39,560,395 | $852,923,740 |
| Net investment income not yet distributed | | | $3,671,009 | | $6,748,836 |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $9.20 | $9.62 | $9.77 | $9.82 | $7.90 | $7.32 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.09 1 | 0.22 1 | 0.19 1 | 0.29 1 | 0.20 | 0.16 |
| Net realized and unrealized gains (losses) | 1.26 | (0.45) | (0.01) | (0.08) | 1.93 | 0.62 |
| Total from investment operations | 1.35 | (0.23) | 0.18 | 0.21 | 2.13 | 0.78 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.23) | (0.19) | (0.15) | (0.26) | (0.21) | (0.20) |
| Distributions from net realized gains | — | — | (0.18) | — | — | — |
| Total distributions | (0.23) | (0.19) | (0.33) | (0.26) | (0.21) | (0.20) |
| Net asset value at end of period | $10.32 | $9.20 | $9.62 | $9.77 | $9.82 | $7.90 |
| Total return | 14.99% 2 | (2.41%) | 2.05% | 2.20% | 27.70% | 11.17% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.86% 3 | 0.86% | 0.86% | 0.86% | 0.86% | 0.86% |
| Gross operating expenses | 0.90% 3 | 0.91% | 0.92% | 0.98% | 1.10% | 1.16% |
| Net investment income (loss) | 1.96% 3 | 2.40% | 2.02% | 2.95% | 2.40% | 2.45% |
| Portfolio turnover rate | 40% 2 | 90% | 87% | 90% | 75% | 112% |
| Net assets, end of period (x 1,000,000) | $900 | $772 | $679 | $423 | $147 | $78 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.5% | Common Stock | 778,968,275 | 878,246,361 |
| 3.3% | Other Investment Company | 29,353,775 | 29,353,775 |
| 100.8% | Total Investments | 808,322,050 | 907,600,136 |
| (0.8%) | Other Assets and Liabilities, Net | | (7,245,637) |
| 100.0% | Net Assets | | 900,354,499 |
| Security | Number
of Shares | Value ($) |
| Common Stock 97.5% of net assets |
| |
| Australia 5.0% |
| Banks 2.0% |
| Australia & New Zealand Banking Group Ltd. | 122,851 | 3,007,267 |
| National Australia Bank Ltd. | 577,183 | 14,650,138 |
| | | 17,657,405 |
| Consumer Services 1.0% |
| Aristocrat Leisure Ltd. | 647,360 | 9,513,387 |
| Energy 0.4% |
| Beach Energy Ltd. | 927,320 | 509,157 |
| Caltex Australia Ltd. | 133,700 | 2,984,354 |
| | | 3,493,511 |
| Food & Staples Retailing 0.3% |
| Metcash Ltd. * | 1,532,293 | 2,466,872 |
| Health Care Equipment & Services 0.1% |
| Cochlear Ltd. | 10,678 | 1,117,777 |
| Materials 0.1% |
| CSR Ltd. | 251,696 | 922,942 |
| Fortescue Metals Group Ltd. | 20,825 | 82,543 |
| Mineral Resources Ltd. | 2,964 | 23,705 |
| | | 1,029,190 |
| Transportation 0.9% |
| Qantas Airways Ltd. | 2,546,164 | 8,071,001 |
| Utilities 0.2% |
| AGL Energy Ltd. | 95,000 | 1,901,979 |
| | | 45,251,122 |
| |
| Austria 0.7% |
| Banks 0.2% |
| Raiffeisen Bank International AG * | 63,000 | 1,436,162 |
| Materials 0.4% |
| Lenzing AG | 20,750 | 3,869,628 |
| Real Estate 0.1% |
| CA Immobilien Anlagen AG * | 48,354 | 1,058,925 |
| | | 6,364,715 |
| |
| Belgium 1.4% |
| Materials 0.2% |
| Bekaert N.V. | 38,380 | 1,931,842 |
| Security | Number
of Shares | Value ($) |
| Transportation 1.2% |
| bpost S.A. | 435,854 | 10,446,516 |
| | | 12,378,358 |
| |
| Brazil 0.5% |
| Consumer Durables & Apparel 0.5% |
| MRV Engenharia e Participacoes S.A. | 930,400 | 4,672,446 |
| |
| Canada 0.4% |
| Diversified Financials 0.1% |
| TMX Group Ltd. | 9,400 | 531,063 |
| Energy 0.2% |
| Enerflex Ltd. | 60,429 | 851,730 |
| Inter Pipeline Ltd. | 43,900 | 894,369 |
| | | 1,746,099 |
| Food, Beverage & Tobacco 0.1% |
| Maple Leaf Foods, Inc. | 63,079 | 1,578,997 |
| | | 3,856,159 |
| |
| China 0.5% |
| Banks 0.2% |
| Industrial & Commercial Bank of China Ltd., Class H | 3,535,000 | 2,304,345 |
| Real Estate 0.3% |
| Longfor Properties Co., Ltd. | 1,373,000 | 2,375,739 |
| | | 4,680,084 |
| |
| Denmark 3.2% |
| Capital Goods 0.7% |
| Vestas Wind Systems A/S | 67,111 | 5,774,669 |
| Consumer Durables & Apparel 0.1% |
| Pandora A/S | 10,947 | 1,182,606 |
| Insurance 0.1% |
| Topdanmark A/S * | 45,707 | 1,251,407 |
| Pharmaceuticals, Biotechnology & Life Sciences 1.6% |
| H. Lundbeck A/S | 68,258 | 3,501,295 |
| Novo Nordisk A/S, Class B | 284,057 | 11,060,286 |
| | | 14,561,581 |
| Software & Services 0.1% |
| SimCorp A/S | 6,132 | 384,448 |
| Transportation 0.6% |
| Dfds A/S | 94,214 | 5,617,630 |
| | | 28,772,341 |
| |
| Finland 0.5% |
| Energy 0.5% |
| Neste Oyj | 121,174 | 4,937,742 |
| |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| France 8.6% |
| Automobiles & Components 0.1% |
| Compagnie Generale des Etablissements Michelin | 4,058 | 530,791 |
| Banks 2.2% |
| BNP Paribas S.A. | 67,650 | 4,774,547 |
| Credit Agricole S.A. | 985,921 | 14,664,423 |
| Societe Generale S.A. | 15,625 | 856,760 |
| | | 20,295,730 |
| Capital Goods 1.0% |
| Eiffage S.A. | 33,237 | 2,815,336 |
| Thales S.A. | 56,044 | 5,890,583 |
| | | 8,705,919 |
| Consumer Durables & Apparel 0.3% |
| Hermes International | 5,565 | 2,660,458 |
| Energy 0.2% |
| Gaztransport Et Technigaz S.A. | 52,836 | 1,972,171 |
| Household & Personal Products 1.6% |
| L'Oreal S.A. | 72,067 | 14,352,112 |
| Media 0.2% |
| Metropole Television S.A. | 71,810 | 1,634,707 |
| Pharmaceuticals, Biotechnology & Life Sciences 2.5% |
| Ipsen S.A. | 41,875 | 4,875,212 |
| Sanofi | 188,824 | 17,842,694 |
| | | 22,717,906 |
| Real Estate 0.1% |
| ICADE | 10,647 | 790,620 |
| Software & Services 0.3% |
| Atos SE | 25,000 | 3,274,631 |
| Technology Hardware & Equipment 0.1% |
| Neopost S.A. | 22,599 | 916,413 |
| | | 77,851,458 |
| |
| Germany 7.4% |
| Automobiles & Components 0.7% |
| Continental AG | 27,763 | 6,218,836 |
| Banks 1.3% |
| Aareal Bank AG | 292,019 | 11,745,243 |
| Capital Goods 0.8% |
| HOCHTIEF AG | 38,056 | 6,853,615 |
| Consumer Durables & Apparel 0.3% |
| Hugo Boss AG | 41,790 | 3,177,849 |
| Household & Personal Products 0.3% |
| Beiersdorf AG | 30,658 | 3,048,977 |
| Insurance 0.4% |
| Allianz SE | 17,487 | 3,329,133 |
| Materials 2.3% |
| BASF SE | 77,668 | 7,566,334 |
| Covestro AG | 172,407 | 13,435,909 |
| | | 21,002,243 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.4% |
| Bayer AG | 17,347 | 2,146,397 |
| Evotec AG * | 102,849 | 1,201,036 |
| | | 3,347,433 |
| Software & Services 0.4% |
| SAP SE | 19,326 | 1,935,807 |
| Software AG | 30,000 | 1,319,946 |
| | | 3,255,753 |
| Telecommunication Services 0.3% |
| Deutsche Telekom AG | 153,000 | 2,683,741 |
| Security | Number
of Shares | Value ($) |
| Utilities 0.2% |
| E.ON SE | 222,212 | 1,732,228 |
| | | 66,395,051 |
| |
| Hong Kong 4.5% |
| Capital Goods 0.4% |
| Shanghai Industrial Holdings Ltd. | 1,188,000 | 3,758,411 |
| Energy 0.9% |
| China Petroleum & Chemical Corp., Class H | 6,114,000 | 4,964,895 |
| China Shenhua Energy Co., Ltd., Class H | 1,167,000 | 2,716,545 |
| | | 7,681,440 |
| Food, Beverage & Tobacco 0.4% |
| WH Group Ltd. | 4,343,500 | 3,875,066 |
| Insurance 0.3% |
| Ping An Insurance Group Co. of China Ltd., Class H | 467,500 | 2,628,403 |
| Materials 1.0% |
| Sinopec Shanghai Petrochemical Co., Ltd., Class H | 16,795,000 | 9,384,800 |
| Real Estate 0.4% |
| Shenzhen Investment Ltd. | 2,156,000 | 977,041 |
| Yuexiu Property Co., Ltd. | 15,280,000 | 2,590,213 |
| | | 3,567,254 |
| Software & Services 0.3% |
| Tencent Holdings Ltd. | 81,629 | 2,557,708 |
| Technology Hardware & Equipment 0.7% |
| Kingboard Chemical Holdings Ltd. | 1,652,500 | 5,951,569 |
| Transportation 0.1% |
| Shenzhen Expressway Co., Ltd., Class H | 468,000 | 426,229 |
| Zhejiang Expressway Co., Ltd., Class H | 550,000 | 684,191 |
| | | 1,110,420 |
| | | 40,515,071 |
| |
| Israel 0.2% |
| Food & Staples Retailing 0.1% |
| Shufersal Ltd. | 141,868 | 699,195 |
| Telecommunication Services 0.1% |
| Bezeq The Israeli Telecommunication Corp., Ltd. | 933,981 | 1,569,206 |
| | | 2,268,401 |
| |
| Italy 1.2% |
| Consumer Durables & Apparel 0.2% |
| Moncler S.p.A. | 76,191 | 1,879,251 |
| Diversified Financials 0.1% |
| Banca IFIS S.p.A. | 22,011 | 949,472 |
| Energy 0.4% |
| Saras S.p.A. | 1,758,793 | 3,674,446 |
| Insurance 0.1% |
| Assicurazioni Generali S.p.A. | 52,780 | 836,036 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.4% |
| Recordati S.p.A. | 89,245 | 3,306,267 |
| | | 10,645,472 |
| |
| Japan 22.2% |
| Automobiles & Components 1.6% |
| Bridgestone Corp. | 25,500 | 1,063,637 |
| Subaru Corp. | 209,390 | 7,938,411 |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Suzuki Motor Corp. | 106,900 | 4,468,734 |
| Toyota Boshoku Corp. | 52,500 | 1,110,883 |
| | | 14,581,665 |
| Banks 2.4% |
| Aozora Bank Ltd. | 1,411,500 | 5,143,098 |
| Mitsubishi UFJ Financial Group, Inc. | 1,026,900 | 6,507,048 |
| Mizuho Financial Group, Inc. | 2,264,200 | 4,138,797 |
| Resona Holdings, Inc. | 303,400 | 1,686,658 |
| Sumitomo Mitsui Financial Group, Inc. | 111,400 | 4,136,350 |
| | | 21,611,951 |
| Capital Goods 2.2% |
| Hazama Ando Corp. | 562,900 | 4,008,788 |
| ITOCHU Corp. | 222,700 | 3,151,198 |
| Kanamoto Co., Ltd. | 19,200 | 520,573 |
| Nissin Electric Co., Ltd. | 109,000 | 1,288,489 |
| Penta-Ocean Construction Co., Ltd. | 175,000 | 886,568 |
| TOKAI Holdings Corp. | 574,100 | 4,420,315 |
| Tokyu Construction Co., Ltd. | 466,000 | 3,800,847 |
| Toshiba Plant Systems & Services Corp. | 114,000 | 1,854,732 |
| | | 19,931,510 |
| Consumer Durables & Apparel 1.1% |
| Bandai Namco Holdings, Inc. | 207,800 | 6,522,133 |
| Sega Sammy Holdings, Inc. | 287,200 | 3,856,086 |
| | | 10,378,219 |
| Consumer Services 0.2% |
| Round One Corp. | 201,200 | 1,718,354 |
| Diversified Financials 1.3% |
| Japan Securities Finance Co., Ltd. | 541,200 | 2,847,651 |
| Mitsubishi UFJ Lease & Finance Co., Ltd. | 765,300 | 3,999,356 |
| ORIX Corp. | 300,500 | 4,592,459 |
| | | 11,439,466 |
| Food, Beverage & Tobacco 0.5% |
| Kirin Holdings Co., Ltd. | 207,000 | 4,029,820 |
| Morinaga & Co., Ltd. | 12,000 | 567,067 |
| | | 4,596,887 |
| Health Care Equipment & Services 0.8% |
| Hoya Corp. | 120,800 | 5,773,368 |
| Miraca Holdings, Inc. | 26,600 | 1,226,423 |
| | | 6,999,791 |
| Household & Personal Products 0.2% |
| Dr. Ci:Labo Co., Ltd. | 68,038 | 1,998,273 |
| Materials 2.2% |
| Sanyo Special Steel Co., Ltd. | 361,000 | 1,986,127 |
| Tokuyama Corp. * | 1,232,000 | 6,065,166 |
| Tokyo Steel Manufacturing Co., Ltd. | 598,400 | 4,458,741 |
| Tosoh Corp. | 760,000 | 7,142,935 |
| | | 19,652,969 |
| Pharmaceuticals, Biotechnology & Life Sciences 2.0% |
| Astellas Pharma, Inc. | 823,000 | 10,852,992 |
| Shionogi & Co., Ltd. | 108,700 | 5,597,816 |
| Sumitomo Dainippon Pharma Co., Ltd. | 82,200 | 1,349,983 |
| | | 17,800,791 |
| Real Estate 0.5% |
| Daiwa House Industry Co., Ltd. | 25,000 | 743,224 |
| Kenedix Office Investment Corp. | 639 | 3,620,507 |
| | | 4,363,731 |
| Retailing 1.2% |
| Adastria Co., Ltd. | 117,950 | 2,929,418 |
| Geo Holdings Corp. | 340,525 | 3,761,519 |
| Security | Number
of Shares | Value ($) |
| PALTAC Corp. | 24,600 | 726,130 |
| T-Gaia Corp. | 206,100 | 3,556,239 |
| | | 10,973,306 |
| Semiconductors & Semiconductor Equipment 1.1% |
| Nuflare Technology, Inc. | 12,616 | 669,198 |
| SCREEN Holdings Co., Ltd. | 39,000 | 2,832,814 |
| Tokyo Electron Ltd. | 30,000 | 3,641,807 |
| Ulvac, Inc. | 59,832 | 2,808,991 |
| | | 9,952,810 |
| Software & Services 1.3% |
| Fujitsu Ltd. | 132,700 | 828,355 |
| Mixi, Inc. | 189,400 | 10,506,813 |
| | | 11,335,168 |
| Technology Hardware & Equipment 1.2% |
| Elecom Co., Ltd. | 179,600 | 3,713,072 |
| Hitachi High-Technologies Corp. | 167,900 | 6,702,418 |
| | | 10,415,490 |
| Telecommunication Services 0.9% |
| Nippon Telegraph & Telephone Corp. | 74,000 | 3,171,317 |
| NTT DOCOMO, Inc. | 72,497 | 1,754,215 |
| SoftBank Group Corp. | 45,100 | 3,420,955 |
| | | 8,346,487 |
| Transportation 1.5% |
| Central Japan Railway Co. | 18,145 | 3,043,072 |
| Japan Airlines Co., Ltd. | 340,700 | 10,759,779 |
| | | 13,802,851 |
| | | 199,899,719 |
| |
| Netherlands 2.5% |
| Commercial & Professional Services 0.2% |
| RELX N.V. | 97,473 | 1,883,544 |
| Household & Personal Products 0.9% |
| Unilever N.V. CVA | 145,131 | 7,602,751 |
| Materials 0.2% |
| Corbion N.V. | 55,952 | 1,736,433 |
| Semiconductors & Semiconductor Equipment 0.5% |
| BE Semiconductor Industries N.V. | 84,180 | 4,400,826 |
| Telecommunication Services 0.4% |
| Koninklijke KPN N.V. | 1,298,093 | 3,752,808 |
| Transportation 0.3% |
| PostNL N.V. | 576,859 | 2,858,283 |
| | | 22,234,645 |
| |
| Norway 0.5% |
| Energy 0.3% |
| Subsea 7 S.A. | 139,426 | 2,297,690 |
| Food, Beverage & Tobacco 0.1% |
| Austevoll Seafood A.S.A. | 112,731 | 906,715 |
| Materials 0.1% |
| Borregaard A.S.A. | 114,593 | 1,287,387 |
| | | 4,491,792 |
| |
| Republic of Korea 1.5% |
| Capital Goods 0.2% |
| Hyundai Development Co-Engineering & Construction | 33,130 | 1,300,337 |
| Food, Beverage & Tobacco 0.2% |
| KT&G Corp. | 23,662 | 2,110,147 |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Technology Hardware & Equipment 1.1% |
| Samsung Electronics Co., Ltd. | 5,223 | 10,239,312 |
| | | 13,649,796 |
| |
| Singapore 2.2% |
| Banks 0.4% |
| DBS Group Holdings Ltd. | 256,000 | 3,535,463 |
| Capital Goods 0.1% |
| United Engineers Ltd. | 584,800 | 1,204,217 |
| Real Estate 1.7% |
| CapitaLand Ltd. | 4,531,000 | 12,174,537 |
| Yanlord Land Group Ltd. | 1,926,000 | 2,570,941 |
| | | 14,745,478 |
| | | 19,485,158 |
| |
| South Africa 1.0% |
| Diversified Financials 0.1% |
| Investec Ltd. | 86,292 | 647,507 |
| Materials 0.9% |
| Mondi Ltd. | 316,197 | 8,198,420 |
| | | 8,845,927 |
| |
| Spain 3.8% |
| Banks 0.2% |
| Banco Santander S.A. | 296,161 | 1,930,058 |
| Capital Goods 1.8% |
| ACS Actividades de Construccion y Servicios S.A. | 433,963 | 16,078,571 |
| Food & Staples Retailing 0.6% |
| Distribuidora Internacional de Alimentacion S.A. | 966,801 | 5,748,401 |
| Media 0.6% |
| Mediaset Espana Comunicacion S.A. | 373,731 | 5,148,725 |
| Software & Services 0.1% |
| Amadeus IT Group S.A. | 17,239 | 930,376 |
| Telecommunication Services 0.5% |
| Telefonica S.A. | 393,388 | 4,350,850 |
| | | 34,186,981 |
| |
| Sweden 2.7% |
| Banks 0.1% |
| Nordea Bank AB | 86,956 | 1,069,456 |
| Commercial & Professional Services 0.4% |
| Intrum Justitia AB | 83,214 | 3,305,611 |
| Consumer Durables & Apparel 1.7% |
| Electrolux AB, B Shares | 171,800 | 5,098,521 |
| JM AB | 293,285 | 10,318,851 |
| | | 15,417,372 |
| Diversified Financials 0.1% |
| LE Lundbergfortagen AB, B Shares | 10,761 | 779,157 |
| Household & Personal Products 0.1% |
| Oriflame Holding AG * | 29,448 | 1,206,872 |
| Real Estate 0.3% |
| Hemfosa Fastigheter AB | 272,296 | 2,522,913 |
| | | 24,301,381 |
| |
| Switzerland 9.5% |
| Capital Goods 0.2% |
| Schindler Holding AG | 10,624 | 2,170,919 |
| Security | Number
of Shares | Value ($) |
| Consumer Durables & Apparel 0.5% |
| Forbo Holding AG | 3,029 | 4,968,675 |
| Diversified Financials 2.6% |
| Cembra Money Bank AG | 139,854 | 11,931,290 |
| Julius Baer Group Ltd. * | 52,929 | 2,760,071 |
| Pargesa Holding S.A. | 60,313 | 4,509,509 |
| UBS Group AG | 253,107 | 4,320,748 |
| | | 23,521,618 |
| Food, Beverage & Tobacco 1.8% |
| Nestle S.A. | 211,012 | 16,252,242 |
| Insurance 1.6% |
| Swiss Life Holding AG * | 42,956 | 13,979,509 |
| Materials 0.4% |
| Sika AG | 499 | 3,184,799 |
| Pharmaceuticals, Biotechnology & Life Sciences 2.1% |
| Lonza Group AG * | 11,259 | 2,303,703 |
| Roche Holding AG | 62,444 | 16,339,365 |
| | | 18,643,068 |
| Telecommunication Services 0.3% |
| Swisscom AG | 5,660 | 2,468,226 |
| | | 85,189,056 |
| |
| United Kingdom 17.5% |
| Banks 2.5% |
| HSBC Holdings plc | 1,257,732 | 10,371,657 |
| The Paragon Group of Cos. plc | 1,994,583 | 12,074,729 |
| | | 22,446,386 |
| Capital Goods 1.7% |
| QinetiQ Group plc | 2,993,618 | 11,392,100 |
| Spirax-Sarco Engineering plc | 61,815 | 4,162,326 |
| | | 15,554,426 |
| Consumer Services 1.6% |
| Carnival plc | 229,566 | 14,148,704 |
| Energy 2.5% |
| BP plc | 2,454,748 | 14,052,471 |
| Royal Dutch Shell plc, B Shares | 325,767 | 8,667,669 |
| | | 22,720,140 |
| Food, Beverage & Tobacco 1.3% |
| Diageo plc | 53,100 | 1,545,590 |
| Imperial Brands plc | 201,315 | 9,859,063 |
| | | 11,404,653 |
| Household & Personal Products 0.4% |
| Reckitt Benckiser Group plc | 35,832 | 3,301,469 |
| Insurance 1.5% |
| Legal & General Group plc | 600,000 | 1,912,244 |
| Old Mutual plc | 4,628,829 | 11,625,700 |
| | | 13,537,944 |
| Materials 0.2% |
| Centamin plc | 723,965 | 1,658,712 |
| Pharmaceuticals, Biotechnology & Life Sciences 2.6% |
| GlaxoSmithKline plc | 1,089,568 | 21,930,655 |
| Indivior plc | 245,052 | 1,063,647 |
| | | 22,994,302 |
| Real Estate 0.2% |
| Grainger plc | 539,473 | 1,746,114 |
| Retailing 0.7% |
| JD Sports Fashion plc | 1,120,175 | 6,459,373 |
| Software & Services 0.5% |
| Moneysupermarket.com Group plc | 1,096,058 | 4,910,088 |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Technology Hardware & Equipment 0.4% |
| Electrocomponents plc | 604,793 | 4,064,952 |
| Utilities 1.4% |
| Centrica plc | 4,849,356 | 12,426,223 |
| | | 157,373,486 |
| Total Common Stock |
| (Cost $778,968,275) | | 878,246,361 |
|
| Other Investment Company 3.3% of net assets |
| |
| Money Market Fund 3.3% |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (a) | 29,353,775 | 29,353,775 |
| Total Other Investment Company |
| (Cost $29,353,775) | | 29,353,775 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $810,316,471 and the unrealized appreciation and depreciation were $110,424,349 and ($13,140,684), respectively, with a net unrealized appreciation of $97,283,665.
At 04/30/17, the values of certain foreign securities held by the fund aggregating $842,119,470 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial note 2(a) for additional information).
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| | |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI EAFE Index, e-mini, Long expires 06/16/17 | 145 | 13,222,550 | 383,141 |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $— | $542,655,344 | $— | $542,655,344 | |
| Austria 1 | — | 2,495,087 | — | 2,495,087 | |
| Materials | 3,869,628 | — | — | 3,869,628 | |
| Brazil 1 | 4,672,446 | — | — | 4,672,446 | |
| Canada 1 | 3,856,159 | — | — | 3,856,159 | |
| Denmark 1 | — | 28,387,893 | — | 28,387,893 | |
| Software & Services | 384,448 | — | — | 384,448 | |
| France 1 | — | 77,060,838 | — | 77,060,838 | |
| Real Estate | 790,620 | — | — | 790,620 | |
| Israel 1 | — | 1,569,206 | — | 1,569,206 | |
| Food & Staples Retailing | 699,195 | — | — | 699,195 | |
| Italy 1 | — | 6,389,733 | — | 6,389,733 | |
| Diversified Financials | 949,472 | — | — | 949,472 | |
| Pharmaceuticals, Biotechnology & Life Sciences | 3,306,267 | — | — | 3,306,267 | |
| Singapore 1 | — | 4,739,680 | — | 4,739,680 | |
| Real Estate | 2,570,941 | 12,174,537 | — | 14,745,478 | |
| Sweden 1 | — | 23,094,509 | — | 23,094,509 | |
| Household & Personal Products | 1,206,872 | — | — | 1,206,872 | |
| United Kingdom1 | — | 133,180,986 | — | 133,180,986 | |
| Banks | 12,074,729 | 10,371,657 | — | 22,446,386 | |
| Real Estate | 1,746,114 | — | — | 1,746,114 | |
| Other Investment Company1 | 29,353,775 | — | — | 29,353,775 | |
| Total | $65,480,666 | $842,119,470 | $— | $907,600,136 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $383,141 | $— | $— | $383,141 | |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $7,402,316 from Level 2 to Level 1 for the period ended April 30, 2017. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation by the fund.
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $808,322,050) | | $907,600,136 |
| Foreign currency, at value (cost $674,498) | | 677,249 |
| Deposit with broker for futures contracts | | 966,000 |
| Receivables: | | |
| Investments sold | | 19,324,578 |
| Dividends | | 4,357,442 |
| Fund shares sold | | 3,177,379 |
| Foreign tax reclaims | | 1,157,064 |
| Prepaid expenses | + | 25,402 |
| Total assets | | 937,285,250 |
| Liabilities |
| Payables: | | |
| Investments bought | | 29,196,711 |
| Investment adviser and administrator fees | | 391,279 |
| Shareholder service fees | | 153,728 |
| Independent trustees' fees | | 280 |
| Fund shares redeemed | | 7,053,083 |
| Variation margin on futures contracts | | 30,202 |
| Accrued expenses | + | 105,468 |
| Total liabilities | | 36,930,751 |
| Net Assets |
| Total assets | | 937,285,250 |
| Total liabilities | – | 36,930,751 |
| Net assets | | $900,354,499 |
| Net Assets by Source | | |
| Capital received from investors | | 833,269,707 |
| Net investment income not yet distributed | | 5,903,132 |
| Net realized capital losses | | (38,455,682) |
| Net unrealized capital appreciation | | 99,637,342 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $900,354,499 | | 87,213,329 | | $10.32 |
| | | | | |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $1,052,966) | | $11,081,604 |
| Expenses |
| Investment adviser and administrator fees | | 2,282,701 |
| Shareholder service fees | | 954,367 |
| Custodian fees | | 149,564 |
| Portfolio accounting fees | | 37,445 |
| Registration fees | | 27,774 |
| Professional fees | | 22,844 |
| Shareholder reports | | 22,366 |
| Transfer agent fees | | 13,450 |
| Independent trustees' fees | | 6,125 |
| Interest expense | | 1,697 |
| Other expenses | + | 9,626 |
| Total expenses | | 3,527,959 |
| Expense reduction by CSIM and its affiliates | – | 141,567 |
| Net expenses | – | 3,386,392 |
| Net investment income | | 7,695,212 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 20,798,856 |
| Net realized gains on futures contracts | | 192,220 |
| Net realized losses on foreign currency transactions | + | (229,026) |
| Net realized gains | | 20,762,050 |
| Net change in unrealized appreciation (depreciation) on investments | | 84,332,663 |
| Net change in unrealized appreciation (depreciation) on futures contracts | | 446,510 |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 56,445 |
| Net change in unrealized appreciation (depreciation) | + | 84,835,618 |
| Net realized and unrealized gains | | 105,597,668 |
| Increase in net assets resulting from operations | | $113,292,880 |
Schwab Active Equity Funds | Semiannual Report
Schwab International Core Equity Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $7,695,212 | $17,231,802 |
| Net realized gains (losses) | | 20,762,050 | (42,955,497) |
| Net change in unrealized appreciation (depreciation) | + | 84,835,618 | 10,627,127 |
| Increase (decrease) in net assets from operations | | 113,292,880 | (15,096,568) |
| Distributions to Shareholders | |
| Distributions from net investment income | | ($18,825,782) | ($13,757,023) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 15,889,724 | $152,739,914 | 32,702,600 | $293,413,982 |
| Shares reinvested | | 1,739,337 | 15,723,609 | 1,360,473 | 12,393,908 |
| Shares redeemed | + | (14,275,708) | (134,353,450) | (20,795,558) | (184,509,327) |
| Net transactions in fund shares | | 3,353,353 | $34,110,073 | 13,267,515 | $121,298,563 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 83,859,976 | $771,777,328 | 70,592,461 | $679,332,356 |
| Total increase | + | 3,353,353 | 128,577,171 | 13,267,515 | 92,444,972 |
| End of period | | 87,213,329 | $900,354,499 | 83,859,976 | $771,777,328 |
| Net investment income not yet distributed | | | $5,903,132 | | $17,033,702 |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) |
| Schwab Core Equity Fund | Schwab Target 2045 Fund |
| Schwab Dividend Equity Fund | Schwab Target 2050 Fund |
| Schwab Large-Cap Growth Fund | Schwab Target 2055 Fund |
| Schwab Small-Cap Equity Fund | Schwab Target 2060 Fund |
| Schwab Hedged Equity Fund | Schwab Fundamental US Large Company Index Fund |
| Schwab Health Care Fund | Schwab Fundamental US Small Company Index Fund |
| Schwab International Core Equity Fund | Schwab Fundamental International Large Company Index Fund |
| Schwab ® S&P 500 Index Fund | Schwab Fundamental International Small Company Index Fund |
| Schwab Small-Cap Index Fund® | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab Total Stock Market Index Fund® | Schwab Fundamental Global Real Estate Index Fund |
| Schwab International Index Fund® | Schwab Target 2010 Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Target 2015 Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Target 2020 Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Target 2025 Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2030 Index Fund |
| Laudus Small-Cap MarketMasters Fund™ | Schwab Target 2035 Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2040 Index Fund |
| Schwab Balanced Fund™ | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab® Monthly Income Fund - Moderate Payout |
| Schwab Target 2030 Fund | Schwab® Monthly Income Fund - Enhanced Payout |
| Schwab Target 2035 Fund | Schwab® Monthly Income Fund - Maximum Payout |
| Schwab Target 2040 Fund | |
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds' Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The funds invest in certain other investment companies (underlying funds). For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC).
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
• Foreign equity security fair valuation: The Board has adopted procedures to fair value foreign equity securities that are traded in markets that close prior to the funds valuing their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the NAV of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures.
• Futures contracts and forward foreign currency exchange contracts (forwards): Futures contracts are valued at their settlement prices as of the close of their exchanges. Forwards are valued based on that day's forward exchange rates or by using an interpolated forward exchange rate for contracts with interim settlement dates.
• Underlying funds: Mutual funds are valued at their respective NAVs. Exchange-traded funds (ETFs) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
• Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)—Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets.
• Level 3—significant unobservable inputs (including the funds' own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds' results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds' investments as of April 30, 2017 are disclosed in the Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their market value may change daily.
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreements allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. The aggregate market value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. Total costs and expenses, including lending agent fees and broker rebates, associated with securities lending activities under the trust’s Securities Lending Program paid to the unaffiliated lending agents start at 10% of gross lending revenue, with subsequent breakpoints to a low of 7.5%.
As of April 30, 2017, the funds had securities on loan, all of which were classified as common stocks. The value of the securities on loan and the related collateral as of April 30, 2017, if any, are disclosed in each fund's Portfolio Holdings. The value of the securities on loan and the investment of cash collateral are also disclosed in each fund's Statement of Assets and Liabilities.
Cash Management Transactions: The funds may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, may be subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed. Balances in the CMS Sweep are accounted for on a cost basis, which approximates market value.
Short Sales: When a fund sells securities short (sells securities it does not own), the fund identifies assets worth at least 100% of the value of the short securities as collateral. If the market value of the short securities subsequently falls, the fund can realize a gain by closing the short position. However, if the value rises, the fund typically would have to add to its collateral or close out its short position at a loss. The potential for losses associated with short positions is much greater than the original value of the securities sold short and may exceed amounts recorded in the Statement of Assets and Liabilities.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
If a fund sells securities short, it records the proceeds received as an asset and the obligation to buy back the securities as a liability. At the time a short sale is initiated, the asset and liability are of equal value and effectively cancel each other out. Subsequently, the fund values the liability side of the transaction according to the market price of the securities sold short, and values the asset side according to the value of the proceeds. When a fund closes out a short position (buys the security), it records the outcome as a realized gain or loss. Dividends accrued on securities sold short are recorded as an expense on a fund’s records and presented in the Statement of Operations. A fund may also incur stock loan fees which represent the cost of borrowing securities used for short sale transactions.
Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures contract or forward position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income, if any, once a year, with the exception of Schwab Dividend Equity Fund which typically pays quarterly dividends. The funds make distributions from net realized capital gains, if any, once a year.
(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, State Street Bank and Trust Company (State Street), under which the funds may receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to a fund's operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of April 30, 2017, if any, are reflected in each fund's Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds' prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
Management Risk. The funds' investment adviser makes investment decisions for the funds using a strategy based largely on historical information. There is no guarantee that a strategy based on historical information will produce the desired results in the future. In addition, the portfolio optimization process used by each fund to assist in constructing the fund’s portfolio does not assure successful investment. Securities selected with the assistance of the process may be negatively impacted by factors or events not foreseen in developing the process. As a result, a fund may have a lower return than if it were managed using another process or strategy.
Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, a fund’s performance could be impacted.
Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Mid-Cap Company Risk. Mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies and the value of securities issued by these companies may move sharply.
Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Growth Investing Risk. Growth stocks can be volatile. Growth companies usually invest a high portion of earnings in their businesses and may lack the dividends of value stocks that can cushion stock prices in a falling market. The prices of growth stocks are based largely on projections of the issuer’s future earnings and revenues. If a company’s earnings or revenues fall short of expectations, its stock price may fall dramatically. Growth stocks may also be more expensive relative to their earnings or assets compared to value or other stocks.
Dividend Paying Risk. To the extent that a fund invests in dividend paying stocks, the fund’s performance will correlate with the performance of the dividend paying stock segment of the stock market, and the fund may underperform funds that do not limit their investments to dividend paying stocks. If stocks held by a fund reduce or stop paying dividends, the fund’s ability to generate income may be affected.
Derivatives Risk. A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk, market risk and management risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to lack of availability risk, credit risk, leverage risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause a fund to realize higher amounts of short-term capital gains. A fund's use of derivatives could reduce the fund's performance, increase its volatility, and could cause the fund to lose more than the initial amount invested.
Liquidity Risk. A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.
ETF Risk. When a fund invests in an ETF, it will bear a proportionate share of the ETF's expenses. In addition, lack of liquidity in the market for an ETF's shares can result in its value being more volatile than the underlying portfolio of securities.
REITs Risk. A fund's investments in real estate investment trusts (REITs) will be subject to the risks associated with the direct ownership of real estate, including fluctuations in the value of underlying properties, defaults by borrowers or tenants, changes in interest rates and risks related to general or local economic conditions. REITs are also subject to certain additional risks; for example, REITs are dependent upon specialized management skills and cash flows, and may have their investments in relatively few properties, a small geographic area or a single property type. Failure of a company to qualify as a REIT under federal tax law may have adverse consequences on a fund. In addition, REITs have their own expenses, and a fund will bear a proportionate share of those expenses.
Short Sales Risk. To the extent a fund establishes both long and short positions in equity securities the fund’s long positions could decline in value at the same time that the value of the stocks sold short increase, thereby increasing the fund’s overall potential for loss. The price of a borrowed security in a short sale transaction may be more or less than the price at which the security was sold
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
by the fund. A fund’s short sales may result in a loss if the prices of the borrowed securities rise and it costs more to replace the borrowed securities. In contrast to a fund’s long positions, the potential loss on the fund’s short positions is unlimited. In addition, the lender of the borrowed securities may require a fund to return the securities on short notice, which may require the fund to purchase the borrowed securities at an unfavorable price and could result in a loss to the fund.
Foreign Investment Risk. A fund's investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. To the extent a fund’s investments in a single country or a limited number of countries represent a higher percentage of the fund’s assets, the fund assumes the risk that economic, political and social conditions in those countries will have a significant impact on its investment performance and it may be subject to increased price volatility.
Emerging Markets Risk. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with a fund’s investments in emerging market countries and, at times, it may be difficult to value such investments.
Concentration Risk. The investments of certain funds are concentrated in issuers doing business in the same sector, and therefore, the companies in which a fund invests will be affected by many of the same factors, such as legislative or regulatory changes, intense competition for market share, and other competitive challenges. In addition, a fund is subject to the risks that stocks of these companies may underperform other segments of the equity market or stock market as a whole and are likely to have above-average volatility.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
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 between CSIM and the trust.
For its advisory and administrative services to the funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
| % of Average Daily Net Assets | Schwab
Core
Equity Fund | Schwab
Dividend
Equity Fund | Schwab
Large-Cap
Growth Fund | Schwab
Small-Cap
Equity Fund | Schwab
Hedged
Equity Fund | Schwab
International
Core
Equity Fund |
| Flat rate | 0.47% | 0.62% | 0.72% | 0.81% | 1.05% | 0.58% |
| % of Average Daily Net Assets | Schwab
Health Care
Fund |
| First $500 million | 0.54% |
| $500 million to $1 billion | 0.515% |
| Over $1 billion | 0.49% |
For the period ended April 30, 2017, the aggregate advisory fee paid to CSIM by the Schwab Health Care Fund was 0.53%, as a percentage of the fund's average daily net assets.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, Schwab) (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds.
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee up to 0.25%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds), and a fund will pay no more than 0.25% of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.
Expense Limitation
Although these agreements specify certain fees for these services, CSIM and its affiliates have made an additional agreement with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (expense limitation). The expense limitation as a percentage of average daily net assets is as follows:
Schwab
Core
Equity Fund | Schwab
Dividend
Equity Fund | Schwab
Large-Cap
Growth Fund | Schwab
Small-Cap
Equity Fund | Schwab
Hedged
Equity Fund | Schwab
Health Care
Fund | Schwab
International
Core Equity Fund |
| 0.75% | 0.89% | 0.99% | 1.12% | 1.33%* | 0.82% | 0.86% |
| * | Excludes dividends and stock loan fees paid on securities sold short. |
Investments from Affiliates
Certain Schwab funds may own shares of other Schwab funds. The table below reflects the percentages of shares of each fund in this report that are owned by other Schwab funds as of April 30, 2017, as applicable:
| | Underlying Funds | | | |
| | Schwab
Core
Equity Fund | Schwab
Dividend
Equity Fund | Schwab
Small-Cap
Equity Fund | Schwab
International Core
Equity Fund |
| Schwab Balanced Fund | 4.9% | —% | —% | —% |
| Schwab Monthly Income Fund - Enhanced Payout | —% | 1.2% | —% | —% |
| Schwab Monthly Income Fund - Maximum Payout | —% | 0.3% | —% | —% |
| Schwab Monthly Income Fund - Moderate Payout | —% | 0.9% | —% | —% |
| Schwab Target 2010 Fund | 0.2% | 0.0%* | 0.1% | 0.2% |
| Schwab Target 2015 Fund | 0.3% | 0.0%* | 0.2% | 0.4% |
| Schwab Target 2020 Fund | 2.0% | 0.1% | 1.8% | 3.0% |
| Schwab Target 2025 Fund | 2.3% | 0.2% | 2.0% | 3.2% |
| Schwab Target 2030 Fund | 4.8% | 0.9% | 4.7% | 7.0% |
| Schwab Target 2035 Fund | 2.3% | 0.6% | 2.5% | 3.5% |
| Schwab Target 2040 Fund | 5.7% | 1.7% | 6.8% | 8.8% |
| Schwab Target 2045 Fund | 0.7% | 0.2% | 0.9% | 1.0% |
| Schwab Target 2050 Fund | 0.6% | 0.2% | 0.8% | 0.9% |
| Schwab Target 2055 Fund | 0.3% | 0.1% | 0.5% | 0.5% |
| Schwab Target 2060 Fund | 0.0%* | 0.0%* | 0.0%* | 0.0%* |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other U.S. registered investment companies managed by CSIM in a joint, syndicated, committed $555 million line of credit (the Credit Facility). Under the terms of the Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund paid a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the Credit Facility. There were no borrowings from the line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended April 30, 2017, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
| | Purchases
of Securities | Sales/Maturities
of Securities |
| Schwab Core Equity Fund | $885,771,526 | $1,058,623,282 |
| Schwab Dividend Equity Fund | 562,025,892 | 834,645,227 |
| Schwab Large-Cap Growth Fund | 83,132,553 | 98,707,408 |
| Schwab Small-Cap Equity Fund | 311,450,205 | 352,972,457 |
| Schwab Hedged Equity Fund* | 211,191,601 | 203,782,754 |
| Schwab Health Care Fund | 177,466,125 | 295,294,926 |
| Schwab International Core Equity Fund | 327,805,417 | 314,014,069 |
| * | Including securities sold short. |
8. Derivatives:
Certain funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The fair value and variation margin for futures contracts held at April 30, 2017 are presented on the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the funds' accounting policies with respect
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
8. Derivatives (continued):
to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended April 30, 2017, the month-end average contract values of futures contracts held by the funds and the month-end average number of contracts held were as follows:
| | Contract Values | Number of Contracts |
| Schwab Core Equity Fund | $908,614 | 9 |
| Schwab Dividend Equity Fund | 681,461 | 6 |
| Schwab Large-Cap Growth Fund | 60,574 | 1 |
| Schwab Small-Cap Equity Fund | 2,669,488 | 36 |
| Schwab Hedged Equity Fund | 1,132,875 | 10 |
| Schwab Health Care Fund | 1,183,414 | 10 |
| Schwab International Core Equity Fund | 6,037,893 | 69 |
9. Redemption Fee:
Prior to February 28, 2017, the funds charged a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds on the Statement of Changes in Net Assets. Effective February 28, 2017, the funds no longer charge redemption fees. The redemption fees charged during the current and prior periods were as follows:
| | Current Period
(11/1/16-4/30/17) | Prior Period
(11/1/15-10/31/16) |
| Schwab Core Equity Fund | $1,679 | $21,676 |
| Schwab Dividend Equity Fund | 11,570 | 10,131 |
| Schwab Large-Cap Growth Fund | 2,514 | 590 |
| Schwab Small-Cap Equity Fund | 4,073 | 4,174 |
| Schwab Hedged Equity Fund | 9,890 | 4,852 |
| Schwab Health Care Fund | 8,925 | 28,881 |
| Schwab International Core Equity Fund | 3,125 | 20,115 |
10. Federal Income Taxes:
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2016, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
| Expiration Date | Schwab
Core
Equity Fund | | Schwab
Dividend
Equity Fund | | Schwab
Large-Cap
Growth Fund | | Schwab
Small-Cap
Equity Fund | | Schwab
Hedged
Equity Fund |
| October 31, 2017 | $1,636,581 | | $— | | $— | | $— | | $— |
| No expiration* | — | | 9,117,909 | | — | | 5,776,732 | | — |
| Total | $1,636,581 | | $9,117,909 | | $— | | $5,776,732 | | $— |
| Expiration Date | Schwab
Health Care
Fund | | Schwab
International
Core
Equity Fund |
| October 31, 2017 | $— | | $7,906,336 |
| No expiration* | — | | 49,872,747 |
| Total | $— | | $57,779,083 |
| * | As a result of the passage of the Regulated Investment Company Modernization Act of 2010, capital losses incurred after December 31, 2010 may now be carried forward indefinitely, but must retain the character of the original loss. |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Financial Notes, unaudited (continued)
10. Federal Income Taxes (continued):
As of October 31, 2016, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2016, the funds did not incur any interest or penalties.
11. Recent Regulatory Development:
In October 2016, the SEC adopted new rules and amended existing rules (together, final rules) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the funds' financial statements and related disclosures.
12. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 110 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| 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. | 110 | 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 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). | 110 | 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 – Apr. 2012). | 110 | None |
David L. Mahoney
1954
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 110 | Director, Symantec Corporation (2003 – present)
Director, Corcept Therapeutics Incorporated (2004 – present)
Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
| 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 |
Kiran M. Patel
1948
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus 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). | 110 | Director, KLA-Tencor Corporation (2008 – present) |
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). | 110 | 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 and Laudus 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). | 110 | 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 since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 110 | 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 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). | 110 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present)
Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
| 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 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); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 110 | Director, The Charles Schwab Corporation (2008 – present) |
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) (Mar. 2007 – Aug. 2010). | 110 | 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 (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 110 | 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 A. 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 and Laudus 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) (Mar. 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 and Laudus 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). |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
| 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 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 (Apr. 2005 – present). |
Omar Aguilar
1970
Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies
(Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 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 – Apr. 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 and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 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 (Apr. 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 and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 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 (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 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 and Laudus 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. |
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
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.
Bloomberg Barclays U.S. Aggregate Bond Index An index that represents securities that are SEC registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. The index excludes certain types of securities, including state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds.
Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $250 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Dividend Equity Spliced Index An internally calculated index, comprised of the S&P 500 Index from inception of the Schwab Dividend Equity Fund until the close of business on February 27, 2015, and the Russell 1000 Value Index thereafter.
Dow Jones Global Health Care Index An index that measures the performance of healthcare providers, researchers, and supplies producers around the world. The index is quoted in U.S. dollars.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Growth Index An index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell 1000 Value Index An index that measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
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.
Schwab Active Equity Funds | Semiannual Report
Schwab Active Equity Funds
Charles Schwab Investment Management
As one of the nation’s largest asset managers, our goal is to provide investors with a diverse selection of foundational products that aim to deliver consistent performance at a competitive cost. The list below shows all currently available Schwab Funds.
Investors should carefully consider information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-877-824-5615 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Funds’ website at www.csimfunds.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.
Stock Funds
Schwab Core Equity Fund™
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity 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®
Asset Allocation Funds
Schwab Balanced Fund™
Schwab MarketTrack All Equity Portfolio™
Schwab MarketTrack Growth Portfolio™
Schwab MarketTrack Balanced Portfolio™
Schwab MarketTrack Conservative Portfolio™
Schwab Target Funds
Schwab Target Index Funds
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fund™
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™
Schwab® U.S. Aggregate Bond Index Fund
Schwab® Short-Term Bond Index Fund
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Some are 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®.
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
1-877-824-5615
© 2017 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
| 1 | You could lose money by investing in a money market fund. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The money market fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. |
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Semiannual Report | April 30, 2017
Schwab Fundamental Index* Funds
Schwab Fundamental
US Large Company Index Fund
Schwab Fundamental
US Small Company Index Fund
Schwab Fundamental
International Large Company
Index Fund
Schwab Fundamental
International Small Company
Index Fund
Schwab Fundamental
Emerging Markets Large
Company Index Fund
| * | SCHWAB is a registered trademark of Charles Schwab & Co., Inc.
FUNDAMENTAL INDEX is a registered trademark of Research
Affiliates LLC. |
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Schwab Fundamental Index Funds
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS), which was developed by, and is the exclusive property of MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Schwab. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
| Total Return for the 6 Months Ended April 30, 2017 |
Schwab Fundamental US Large Company Index Fund
(Ticker Symbol: SFLNX) | 11.97% |
| Russell RAFI US Large Company Index | 12.20% |
| Russell 1000® Index | 13.46% |
| Fund Category: Morningstar Large Value | 12.08% |
| Performance Details | pages 9-10 |
| |
Schwab Fundamental US Small Company Index Fund
(Ticker Symbol: SFSNX) | 16.60% |
| Russell RAFI US Small Company Index | 16.70% |
| Russell 2000® Index | 18.37% |
| Fund Category: Morningstar Small Blend | 16.89% |
| Performance Details | pages 11-12 |
| |
Schwab Fundamental International Large Company Index Fund1
(Ticker Symbol: SFNNX) | 10.87% |
| Russell RAFI Developed ex US Large Company Index (Net)2 | 10.92% |
| MSCI EAFE® Index (Net)2 | 11.47% |
| Fund Category: Morningstar Foreign Large Value | 10.63% |
| Performance Details | pages 13-14 |
| Total Return for the 6 Months Ended April 30, 2017 |
Schwab Fundamental International Small Company Index Fund1
(Ticker Symbol: SFILX) | 11.40% |
| Russell RAFI Developed ex US Small Company Index (Net)2 | 11.58% |
| S&P Developed ex-U.S. Small Cap Index (Net)2 | 11.33% |
| Fund Category: Morningstar Foreign Small/Mid Blend | 13.23% |
| Performance Details | pages 15-16 |
| |
Schwab Fundamental Emerging Markets Large Company Index Fund1
(Ticker Symbol: SFENX) | 10.39% |
| Russell RAFI Emerging Markets Large Company Index (Net)2 | 10.28% |
| MSCI Emerging Markets Index (Net)2 | 8.88% |
| Fund Category: Morningstar Diversified Emerging Markets | 8.75% |
| Performance Details | pages 17-18 |
| Minimum Initial Investment3 | $100 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Index ownership — Russell® is a trademark owned by Frank Russell Company (Russell). The Russell RAFITM Index Series are calculated by Russell in conjunction with Research Affiliates® LLC (RA). Neither Russell nor RA sponsor, endorse or promote the Schwab Fundamental Index Funds and are not in any way connected to them and do not accept any liability in relation to their issue, operation and trading. Any intellectual property rights in the index values and constituent lists vests in Russell. “Research Affiliates®”, “Fundamental Index®” and “RAFI®” trade names are the exclusive property of RA. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use such intellectual property rights in the creation of the funds. For full disclaimer please see the funds' statement of additional information. Effective December 1, 2016, the name of the index series and the associated indices were changed by the index provider. No other changes to the index series or indices have occurred.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
| 1 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations. See financial note 2 for more information. |
| 2 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 3 | Effective May 1, 2017, there is no minimum initial investment for each fund. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.
Dear Shareholder,
At Charles Schwab Investment Management, we know that expenses matter. We’re focused on helping our investors achieve their financial goals, and one of the biggest ways that we can help with this is by keeping investing costs down. We understand that even small reductions in expenses can have a large impact on a portfolio’s long-term return potential.
That’s why we’re excited to announce that effective May 1, 2017, the expense ratios for the Schwab Fundamental Index Funds were reduced1, following similar expense reductions in recent months for the Schwab market cap index mutual funds and select market cap and Schwab Fundamental Index ETFs.
We are also committed to delivering differentiated performance for our investors in different types of market environments, and the Schwab Fundamental Index Funds play a key role in this commitment. Since our last shareholder report, stock prices have rallied, and we are pleased to report that the funds all generated solid returns in line with their indexes for the six-month reporting period ended April 30, 2017.
Asset Class Performance Comparison % returns during the six months ended 4/30/2017
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
Diversification does not ensure a profit and does not protect against losses in declining markets.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 1 | Includes all of the Schwab Fundamental Index Funds discussed in this report. This does not include the Schwab Fundamental Global Real Estate Index Fund. The expense ratio for the Schwab Fundamental Global Real Estate Index Fund was reduced effective June 1, 2017. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
From the President (continued)
“ We understand that even small reductions in expenses can have a large impact on a portfolio’s long-term return potential.”
We feel the innovative indexing approach the Schwab Fundamental Index Funds utilize helps create the opportunity for greater portfolio diversity and can serve as a complement to traditional market cap and actively managed strategies, helping to create the potential for more attractive risk-adjusted portfolios. Fundamental Index strategies differ from traditional market cap strategies in that they weight companies based on fundamental factors, such as adjusted sales, retained operating cash flow, and dividends plus buybacks, rather than market capitalization.
As one of the largest providers of index mutual funds, it’s important to us that we fulfill our investors’ expectations on both cost and performance. That’s why we continue to look for ways to not only further modernize the index investing landscape, but to share with investors, like you, the benefits of our scale and efficiency through some of the lowest expenses available in the industry today.
Thank you for investing with Charles Schwab Investment Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab Fundamental Index Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.csimfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
Schwab is a registered trademark of Charles Schwab & Co., Inc. Fundamental Index is a registered trademark of Research Affiliates LLC.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
The Investment Environment
Over the six-month reporting period ended April 30, 2017, both U.S. and overseas equity markets generated positive returns. The Dow Jones Industrial Average closed above 20,000 for the first time in January (and continued its climb to close above 21,000 in March), and the current bull market for U.S. stocks entered its eighth year. Meanwhile, improving global growth and continued accommodative central bank policies supported the performance of many international equities. Emerging markets fell early in the reporting period amid commodity price volatility and U.S. dollar strength. In early 2017, however, emerging markets rebounded in response to positive global economic data, as well as steadying oil prices and a weakening U.S. dollar. In this environment, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 13.32%, while the Russell 2000® Index, a U.S. small-cap company measure, returned 18.37% for the reporting period. Internationally, the MSCI EAFE® Index (Net), a broad measure of international developed equity performance, returned 11.47% for the same time period. Emerging markets continued to perform well through the end of 2016 and in early 2017, with the MSCI Emerging Markets Index (Net) returning 8.88% for the six-month reporting period.
Market volatility generally eased over the reporting period, though fluctuations tied to elections in both the U.S. and abroad occurred during the six months. In the U.S., election-related volatility picked up in the weeks leading up to the U.S. presidential election and continued after Election Day. U.S. equity futures dropped sharply soon after the election results were announced, then rebounded almost immediately the following day and generally maintained an upward trajectory throughout most of the reporting period. This rally was fueled by investor expectations for reflationary policies from the Trump administration, including increased fiscal spending, tax reform, and reduced financial regulation. Traditionally cyclical sectors in particular, such as Information Technology, especially benefitted from these investor expectations. However, lack of progress in certain of the Trump administration’s policies increased uncertainty and contributed to muted stock market gains in the last months of the reporting period. Meanwhile, political uncertainty in the eurozone, including elections in the Netherlands and France, also contributed to overseas market volatility. In mid-March, center-right Dutch Prime Minister Mark Rutte beat far-right candidate Geert Wilders, while the race between front-runners Emmanuel Macron and Marine Le Pen in France was closer than many expected in the first round of voting. (Macron was elected to the French presidency in the run-off election the week following the end of the reporting period.)
The Federal Reserve (Fed) and the People’s Bank of China (PBOC) tightened monetary policies over the reporting period, while many other central banks maintained or increased accommodative policies. With improvements in several key U.S. economic measures and an uptick in inflation, the Fed raised the federal funds rate twice over the reporting period, first in December 2016 and again in March 2017. Market responses to these changes were muted as both increases were largely already priced into global equity markets. In China, prior accommodative measures led to credit expanding at twice the rate of economic growth, prompting the PBOC to take steps to address this imbalance and reduce long-term financial risk. Meanwhile, the European Central Bank extended its asset purchase program to at least December 2017 and announced it was loosening the restrictions on the types of bonds it is allowed to purchase. The Bank of Japan maintained negative interest rates, quantitative easing, and yield curve management over the six-month reporting period. The positive performance of many international equities and improvement in the global economic outlook over the reporting period suggested that these policies were achieving their intended results, effectively stimulating economic growth in both the eurozone and in Japan.
U.S. economic data remained relatively steady compared to prior reporting periods. However, the spread between “hard” data, such as quarterly gross domestic product (GDP) numbers, and “soft” data, like consumer confidence and sentiment indexes, widened over the reporting period. Nonfarm payroll numbers were generally in line with expectations through February, fell noticeably in March, and then rebounded in April. GDP dropped to an annual rate of 2.1% in the fourth quarter of 2016 and fell even further in the first quarter of 2017, indicating a persistently moderate growth outlook. In contrast, consumer confidence rose after the November election of President Trump through the end of the reporting period, reaching its highest level since December 2000 in March. According to the National Federation of Independent Business (NFIB) Small Business Economic Trends Report, small business optimism also surged after Election Day and throughout the reporting period.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
The Investment Environment (continued)
Overall global economic growth generally improved over the six-month reporting period. Eurozone economic activity picked up in both the fourth quarter of 2016 and the first quarter of 2017, and the entire eurozone bloc exited deflation by the end of January 2017. Meanwhile, the United Kingdom economy performed better than expected in the months following the decision in June 2016 to leave the European Union (Brexit) as progress toward an exit plan was made. In Japan, economic growth accelerated and consumer prices fell at a slower pace, with inflation on track to hit the target of 2% in the next two years, while rising inflation and decreasing lending costs in China contributed to a relatively stable economy over the reporting period. Not all countries made economic progress, however. The end of 2016 marked two consecutive years of economic contraction for Brazil and its worst recession on record. Meanwhile, the decreasing likelihood of relaxed economic sanctions by the U.S. weighed on Russia’s economy and contributed to sluggish growth in this country.
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
 | Christopher Bliss, CFA, Vice President and Head of the Passive Equity Team, leads the portfolio management team for Schwab’s Passive Equity Funds and ETFs. He also has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2016, Mr. Bliss spent 12 years at BlackRock (formerly Barclays Global Investors) managing and leading institutional index teams, most recently as a Managing Director and Head of Americas Institutional Index team. Prior to BlackRock, he worked as an equity analyst and portfolio manager for Harris Bretall and before that, as a research analyst for JP Morgan. |
 | Chuck Craig, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund. Prior to joining CSIM in 2012, Mr. Craig worked at Guggenheim Funds (formerly Claymore Group), where he spent more than five years as a managing director of portfolio management and supervision, and three years as vice president of product research and development. Prior to that, he worked as an equity research analyst at First Trust Portfolios (formerly Niké Securities), and a trader and analyst at PMA Securities, Inc. |
 | Ferian Juwono, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental US Large Company Index Fund and Schwab Fundamental US Small Company Index Fund. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent more than three years as a portfolio manager, managing equity index funds for institutional clients, and nearly two years as a senior business analyst. Prior to that, Mr. Juwono worked for more than four years as a senior financial analyst with Union Bank of California. |
 | Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund. Prior to joining CSIM in 2012, Ms. Qin spent more than four years at The Bank of New York Mellon Corporation. During that time, Ms. Qin spent more than two years as an associate equity portfolio manager and nearly two years as a performance analyst. She also worked at Wells Fargo Funds Management as a mutual fund analyst and at CIGNA Reinsurance in Risk Management group as a risk analyst. |
 | David Rios, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, and Schwab Fundamental Emerging Markets Large Company Index Fund. He joined CSIM in 2008 and became a Portfolio Manager in September 2014. Prior to this role, Mr. Rios served as an Associate Portfolio Manager on the Schwab Equity Index Strategies team for four years. His first role with CSIM was as a trade operation specialist. He also previously worked as a senior fund accountant at Investors Bank & Trust (subsequently acquired by State Street Corporation). |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Fund Management (continued)
 | Sabya Sinha, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental US Large Company Index Fund and Schwab Fundamental US Small Company Index Fund. Prior to joining CSIM in 2015, Mr. Sinha spent a year at F-Squared Investments on the product development and analytics team. Prior to F-Squared, he worked at IndexIQ Advisors as a senior index portfolio manager for three years and for Bank of America’s Columbia Management subsidiary as a portfolio manager for three years. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Fundamental US Large Company Index Fund (4/2/07) | 11.97% | 15.01% | 13.31% | 7.36% |
| Russell RAFI US Large Company Index3 | 12.20% | 15.45% | 13.67% | N/A |
| Fundamental U.S. Large Company Spliced Index | 12.20% | 15.45% | 13.75% | 7.63% |
| Russell 1000® Index | 13.46% | 18.03% | 13.63% | 7.25% |
| Fund Category: Morningstar Large Value4 | 12.08% | 15.85% | 11.69% | 5.18% |
| Fund Expense Ratios5: Net 0.35%; Gross 0.39% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership—Russell® is a trademark owned by Frank Russell Company (Russell). The Russell RAFITM Index Series are calculated by Russell in conjunction with Research Affiliates® LLC (RA). Neither Russell nor RA sponsor, endorse or promote the Schwab Fundamental US Large Company Index Fund and are not in any way connected to it and do not accept any liability in relation to its issue, operation and trading. Any intellectual property rights in the index values and constituent list vests in Russell.“Research Affiliates®”, “Fundamental Index®” and “RAFI®” trade names are the exclusive property of RA. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use such intellectual property rights in the creation of this fund. For full disclaimer please see the fund’s statement of additional information. Effective December 1, 2016, the name of the index was changed by the index provider. No other changes to the index have occurred.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On October 27, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund, and the fund no longer offers multiple classes of shares. The performance history of the fund prior to October 27, 2009 is that of the fund’s former Institutional Shares. |
| 3 | The inception date of the Russell RAFI US Large Company Index is February 24, 2011. The fund began tracking the index on October 19, 2012. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the February 28, 2017 prospectus. Effective May 1, 2017, the management fee was reduced to 0.25%. For more information, see financial note 4 or refer to the prospectus dated May 1, 2017. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 653 |
| Weighted Average Market Cap (millions) | $134,518 |
| Price/Earnings Ratio (P/E) | 19.4 |
| Price/Book Ratio (P/B) | 2.4 |
| Portfolio Turnover Rate1 | 6% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Fundamental US Small Company Index Fund (4/2/07) | 16.60% | 21.29% | 13.68% | 8.54% |
| Russell RAFI US Small Company Index3 | 16.70% | 21.51% | 14.07% | N/A |
| Fundamental U.S. Small Company Spliced Index | 16.70% | 21.51% | 13.99% | 9.01% |
| Russell 2000® Index | 18.37% | 25.63% | 12.95% | 7.05% |
| Fund Category: Morningstar Small Blend4 | 16.89% | 21.71% | 11.76% | 6.45% |
| Fund Expense Ratios5: Net 0.35%; Gross 0.43% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Index ownership—Russell® is a trademark owned by Frank Russell Company (Russell). The Russell RAFITM Index Series are calculated by Russell in conjunction with Research Affiliates® LLC (RA). Neither Russell nor RA sponsor, endorse or promote the Schwab Fundamental US Small Company Index Fund and are not in any way connected to it and do not accept any liability in relation to its issue, operation and trading. Any intellectual property rights in the index values and constituent list vests in Russell. “Research Affiliates®”, “Fundamental Index®” and “RAFI®” trade names are the exclusive property of RA. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use such intellectual property rights in the creation of this fund. For full disclaimer please see the fund’s statement of additional information. Effective December 1, 2016, the name of the index was changed by the index provider. No other changes to the index have occurred.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On October 27, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund, and the fund no longer offers multiple classes of shares. The performance history of the fund prior to October 27, 2009 is that of the fund’s former Institutional Shares. |
| 3 | The inception date of the Russell RAFI US Small Company Index is February 24, 2011. The fund began tracking the index on October 19, 2012. |
| 4 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 5 | As stated in the February 28, 2017 prospectus. Effective May 1, 2017, the management fee was reduced to 0.25%. For more information, see financial note 4 or refer to the prospectus dated May 1, 2017. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 840 |
| Weighted Average Market Cap (millions) | $4,589 |
| Price/Earnings Ratio (P/E) | 22.2 |
| Price/Book Ratio (P/B) | 1.9 |
| Portfolio Turnover Rate1 | 8% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Fundamental International Large Company Index Fund (4/2/07) | 10.87% | 13.14% | 7.20% | 1.23% |
| Russell RAFI Developed ex US Large Company Index (Net)3,4 | 10.92% | 12.35% | 7.37% | N/A |
| Fundamental Developed ex-U.S. Large Company Spliced Index | 10.92% | 12.35% | 7.51% | 1.74% |
| MSCI EAFE® Index (Net)3 | 11.47% | 11.29% | 6.78% | 0.87% |
| Fund Category: Morningstar Foreign Large Value5 | 10.63% | 11.72% | 5.59% | -0.06% |
| Fund Expense Ratios6: Net 0.35%; Gross 0.46% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Index ownership—Russell® is a trademark owned by Frank Russell Company (Russell). The Russell RAFITM Index Series are calculated by Russell in conjunction with Research Affiliates® LLC (RA). Neither Russell nor RA sponsor, endorse or promote the Schwab Fundamental International Large Company Index Fund and are not in any way connected to it and do not accept any liability in relation to its issue, operation and trading. Any intellectual property rights in the index values and constituent list vests in Russell. “Research Affiliates®”, “Fundamental Index®” and “RAFI®” trade names are the exclusive property of RA. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use such intellectual property rights in the creation of this fund. For full disclaimer please see the fund’s statement of additional information. Effective December 1, 2016, the name of the index was changed by the index provider. No other changes to the index have occurred.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund, and the fund no longer offers multiple classes of shares. The performance history of the fund prior to October 19, 2009 is that of the fund’s former Institutional Shares. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | The inception date of the Russell RAFI Developed ex US Large Company Index (Net) is February 24, 2011. The fund began tracking the index on October 19, 2012. |
| 5 | 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. |
| 6 | As stated in the February 28, 2017 prospectus. Effective May 1, 2017, the management fee was reduced to 0.25%. For more information, see financial note 4 or refer to the prospectus dated May 1, 2017. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 839 |
| Weighted Average Market Cap (millions) | $54,514 |
| Price/Earnings Ratio (P/E) | 17.1 |
| Price/Book Ratio (P/B) | 1.3 |
| Portfolio Turnover Rate1 | 5% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Fundamental International Small Company Index Fund (1/31/08) | 11.40% | 16.99% | 9.81% | 6.28% |
| Russell RAFI Developed ex US Small Company Index (Net)3,4 | 11.58% | 15.83% | 10.45% | N/A |
| Fundamental Developed ex-U.S. Small Company Spliced Index | 11.58% | 15.83% | 10.33% | 7.50% |
| S&P Developed ex-U.S. Small Cap Index (Net)3 | 11.33% | 11.25% | 9.05% | 4.52% |
| Fund Category: Morningstar Foreign Small/Mid Blend5 | 13.23% | 14.51% | 8.62% | 4.71% |
| Fund Expense Ratios6: Net 0.49%; Gross 0.68% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Index ownership—Russell® is a trademark owned by Frank Russell Company (Russell). The Russell RAFITM Index Series are calculated by Russell in conjunction with Research Affiliates® LLC (RA). Neither Russell nor RA sponsor, endorse or promote the Schwab Fundamental International Small Company Index Fund and are not in any way connected to it and do not accept any liability in relation to its issue, operation and trading. Any intellectual property rights in the index values and constituent list vests in Russell. “Research Affiliates®”, “Fundamental Index®” and “RAFI®” trade names are the exclusive property of RA. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use such intellectual property rights in the creation of this fund. For full disclaimer please see the fund’s statement of additional information. Effective December 1, 2016, the name of the index was changed by the index provider. No other changes to the index have occurred.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund, and the fund no longer offers multiple classes of shares. The performance history of the fund prior to October 19, 2009 is that of the fund’s former Institutional Shares. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | The inception date of the Russell RAFI Developed ex US Small Company Index (Net) is February 24, 2011. The fund began tracking the index on October 19, 2012. |
| 5 | 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. |
| 6 | As stated in the February 28, 2017 prospectus. Effective May 1, 2017, the management fee was reduced to 0.39%. For more information, see financial note 4 or refer to the prospectus dated May 1, 2017. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 1,439 |
| Weighted Average Market Cap (millions) | $3,612 |
| Price/Earnings Ratio (P/E) | 16.7 |
| Price/Book Ratio (P/B) | 1.4 |
| Portfolio Turnover Rate1 | 7% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1,2
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Fundamental Emerging Markets Large Company Index Fund (1/31/08) | 10.39% | 24.48% | 1.13% | 1.03% |
| Russell RAFI Emerging Markets Large Company Index (Net)3,4 | 10.28% | 25.06% | 1.98% | N/A |
| Fundamental Emerging Markets Large Company Spliced Index | 10.28% | 25.06% | 1.95% | 2.50% |
| MSCI Emerging Markets Index (Net)3 | 8.88% | 19.13% | 1.49% | 1.20% |
| Fund Category: Morningstar Diversified Emerging Markets5 | 8.75% | 17.89% | 1.87% | 0.62% |
| Fund Expense Ratios6: Net 0.49%; Gross 0.88% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Index ownership—Russell® is a trademark owned by Frank Russell Company (Russell). The Russell RAFITM Index Series are calculated by Russell in conjunction with Research Affiliates® LLC (RA). Neither Russell nor RA sponsor, endorse or promote the Schwab Fundamental Emerging Markets Large Company Index Fund and are not in any way connected to it and do not accept any liability in relation to its issue, operation and trading. Any intellectual property rights in the index values and constituent list vests in Russell. “Research Affiliates®”, “Fundamental Index®” and “RAFI®” trade names are the exclusive property of RA. Charles Schwab Investment Management, Inc. has obtained full license from Russell to use such intellectual property rights in the creation of this fund. For full disclaimer please see the fund’s statement of additional information. Effective December 1, 2016, the name of the index was changed by the index provider. No other changes to the index have occurred.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund, and the fund no longer offers multiple classes of shares. The performance history of the fund prior to October 19, 2009 is that of the fund’s former Institutional Shares. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | The inception date of the Russell RAFI Emerging Markets Large Company Index (Net) is February 24, 2011. The fund began tracking the index on October 19, 2012. |
| 5 | 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. |
| 6 | As stated in the February 28, 2017 prospectus. Effective May 1, 2017, the management fee was reduced to 0.39%. For more information, see financial note 4 or refer to the prospectus dated May 1, 2017. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 299 |
| Weighted Average Market Cap (millions) | $64,147 |
| Price/Earnings Ratio (P/E) | 11.4 |
| Price/Book Ratio (P/B) | 1.1 |
| Portfolio Turnover Rate1 | 8% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning November 1, 2016 and held through April 30, 2017.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, or any non-routine expenses, such as proxy fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs or non-routine expenses were included, your costs would have been higher.
| | Expense Ratio
(Annualized)1 | Beginning
Account Value
at 11/1/16 | Ending
Account Value
(Net of Expenses)
at 4/30/17 | Expenses Paid
During Period
11/1/16-4/30/172 |
| Schwab Fundamental US Large Company Index Fund | | | | |
| Actual Return | 0.35% | $1,000.00 | $1,119.70 | $1.84 |
| Hypothetical 5% Return | 0.35% | $1,000.00 | $1,023.06 | $1.76 |
| Schwab Fundamental US Small Company Index Fund | | | | |
| Actual Return | 0.35% | $1,000.00 | $1,166.00 | $1.88 |
| Hypothetical 5% Return | 0.35% | $1,000.00 | $1,023.06 | $1.76 |
| Schwab Fundamental International Large Company Index Fund | | | | |
| Actual Return | 0.35% | $1,000.00 | $1,108.70 | $1.83 |
| Hypothetical 5% Return | 0.35% | $1,000.00 | $1,023.06 | $1.76 |
| Schwab Fundamental International Small Company Index Fund | | | | |
| Actual Return | 0.49% | $1,000.00 | $1,114.00 | $2.57 |
| Hypothetical 5% Return | 0.49% | $1,000.00 | $1,022.37 | $2.46 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | | | | |
| Actual Return | 0.49% | $1,000.00 | $1,103.90 | $2.56 |
| Hypothetical 5% Return | 0.49% | $1,000.00 | $1,022.37 | $2.46 |
| 1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. Effective May 1, 2017, the funds changed to a unitary fee structure. Under the new unitary fee structure the advisory fees changed to 0.25%, 0.25%, 0.25%, 0.39% and 0.39% for Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund and Schwab Fundamental Emerging Markets Large Company Index Fund, respectively. If the fund expense changes had been in place throughout the entire most recent fiscal half-year the expenses paid during period under the actual return and hypothetical 5% return example would have been the following; Schwab Fundamental US Large Company Index Fund, $1.31 and $1.25, respectively, Schwab Fundamental US Small Company Index Fund, $1.34 and $1.25, respectively, Schwab Fundamental International Large Company Index Fund, $1.31 and $1.25, respectively, Schwab Fundamental International Small Company Index Fund, $2.04 and $1.96, respectively, and for Schwab Fundamental Emerging Markets Large Company Index Fund, $2.03 and $1.96, respectively. (See financial note 4) |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by the 365 days of the fiscal year. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $15.12 | $15.14 | $15.56 | $13.65 | $10.76 | $9.51 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.16 1 | 0.34 1 | 0.33 1 | 0.26 | 0.24 | 0.21 |
| Net realized and unrealized gains (losses) | 1.62 | 0.44 | (0.10) | 1.87 | 2.89 | 1.22 |
| Total from investment operations | 1.78 | 0.78 | 0.23 | 2.13 | 3.13 | 1.43 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.34) | (0.34) | (0.26) | (0.22) | (0.24) | (0.18) |
| Distributions from net realized gains | (0.76) | (0.46) | (0.39) | — | — | — |
| Total distributions | (1.10) | (0.80) | (0.65) | (0.22) | (0.24) | (0.18) |
| Net asset value at end of period | $15.80 | $15.12 | $15.14 | $15.56 | $13.65 | $10.76 |
| Total return | 11.97% 2 | 5.61% | 1.44% | 15.74% | 29.67% | 15.29% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.35% 3 | 0.35% | 0.35% | 0.35% | 0.35% | 0.32% 4 |
| Gross operating expenses | 0.38% 3 | 0.39% | 0.39% | 0.39% | 0.41% | 0.44% |
| Net investment income (loss) | 2.11% 3 | 2.33% | 2.16% | 1.95% | 2.03% | 2.13% |
| Portfolio turnover rate | 6% 2 | 11% | 12% | 14% | 10% | 32% 5 |
| Net assets, end of period (x 1,000,000) | $5,273 | $4,569 | $4,886 | $4,465 | $3,020 | $1,960 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included.
5
Portfolio turnover would have been 12%, if rebalancing trades had not been included due to a change in the fund's index.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.7% | Common Stock | 3,923,808,379 | 5,255,670,949 |
| 0.3% | Other Investment Companies | 18,892,809 | 18,892,809 |
| 100.0% | Total Investments | 3,942,701,188 | 5,274,563,758 |
| (0.0%) | Other Assets and Liabilities, Net | | (1,724,175) |
| 100.0% | Net Assets | | 5,272,839,583 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 99.7% of net assets | |
| |
| Automobiles & Components 1.4% | |
| General Motors Co. | 732,368 | 0.5 | 25,369,227 |
| Other Securities | | 0.9 | 46,954,481 |
| | | 1.4 | 72,323,708 |
| |
| Banks 5.1% | |
| Bank of America Corp. | 1,491,794 | 0.7 | 34,818,472 |
| Citigroup, Inc. | 703,172 | 0.8 | 41,571,529 |
| JPMorgan Chase & Co. | 786,523 | 1.3 | 68,427,501 |
| Wells Fargo & Co. | 977,463 | 1.0 | 52,626,608 |
| Other Securities | | 1.3 | 71,134,057 |
| | | 5.1 | 268,578,167 |
| |
| Capital Goods 8.4% | |
| 3M Co. | 132,361 | 0.5 | 25,920,255 |
| Caterpillar, Inc. | 239,137 | 0.5 | 24,454,150 |
| General Electric Co. | 2,058,298 | 1.1 | 59,670,059 |
| The Boeing Co. | 131,372 | 0.5 | 24,281,487 |
| United Technologies Corp. | 260,392 | 0.6 | 30,984,044 |
| Other Securities | | 5.2 | 277,416,794 |
| | | 8.4 | 442,726,789 |
| |
| Commercial & Professional Services 0.6% | |
| Other Securities | | 0.6 | 30,968,950 |
| |
| Consumer Durables & Apparel 1.1% | |
| Other Securities | | 1.1 | 58,739,324 |
| |
| Consumer Services 1.8% | |
| McDonald's Corp. | 246,788 | 0.7 | 34,533,045 |
| Other Securities | | 1.1 | 61,329,293 |
| | | 1.8 | 95,862,338 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Diversified Financials 4.5% | |
| Berkshire Hathaway, Inc., Class B * | 321,926 | 1.0 | 53,185,395 |
| The Charles Schwab Corp. (b) | 72,715 | 0.1 | 2,824,978 |
| The Goldman Sachs Group, Inc. | 137,509 | 0.6 | 30,774,514 |
| Other Securities | | 2.8 | 150,390,346 |
| | | 4.5 | 237,175,233 |
| |
| Energy 13.4% | |
| Chevron Corp. | 1,195,912 | 2.4 | 127,603,810 |
| ConocoPhillips | 1,107,082 | 1.0 | 53,040,299 |
| Exxon Mobil Corp. | 2,421,681 | 3.7 | 197,730,254 |
| Marathon Petroleum Corp. | 479,362 | 0.5 | 24,418,700 |
| Phillips 66 | 387,908 | 0.6 | 30,861,960 |
| Schlumberger Ltd. | 365,810 | 0.5 | 26,554,148 |
| Valero Energy Corp. | 475,166 | 0.6 | 30,700,475 |
| Other Securities | | 4.1 | 215,098,143 |
| | | 13.4 | 706,007,789 |
| |
| Food & Staples Retailing 3.8% | |
| Costco Wholesale Corp. | 143,263 | 0.5 | 25,432,048 |
| CVS Health Corp. | 536,716 | 0.8 | 44,246,867 |
| Wal-Mart Stores, Inc. | 1,000,072 | 1.4 | 75,185,413 |
| Walgreens Boots Alliance, Inc. | 272,382 | 0.4 | 23,571,938 |
| Other Securities | | 0.7 | 33,717,871 |
| | | 3.8 | 202,154,137 |
| |
| Food, Beverage & Tobacco 4.8% | |
| PepsiCo, Inc. | 346,563 | 0.7 | 39,258,657 |
| Philip Morris International, Inc. | 403,288 | 0.8 | 44,700,442 |
| The Coca-Cola Co. | 845,843 | 0.7 | 36,498,125 |
| Other Securities | | 2.6 | 132,660,607 |
| | | 4.8 | 253,117,831 |
| |
| Health Care Equipment & Services 5.4% | |
| Anthem, Inc. | 177,950 | 0.6 | 31,655,526 |
| UnitedHealth Group, Inc. | 255,996 | 0.8 | 44,768,580 |
| Other Securities | | 4.0 | 207,546,948 |
| | | 5.4 | 283,971,054 |
| |
| Household & Personal Products 1.9% | |
| The Procter & Gamble Co. | 735,735 | 1.2 | 64,251,737 |
| Other Securities | | 0.7 | 35,761,048 |
| | | 1.9 | 100,012,785 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Insurance 3.6% | |
| American International Group, Inc. | 533,042 | 0.6 | 32,467,588 |
| The Travelers Cos., Inc. | 185,972 | 0.4 | 22,625,354 |
| Other Securities | | 2.6 | 135,220,554 |
| | | 3.6 | 190,313,496 |
| |
| Materials 4.0% | |
| Other Securities | | 4.0 | 211,238,835 |
| |
| Media 3.3% | |
| Comcast Corp., Class A | 983,014 | 0.7 | 38,524,319 |
| The Walt Disney Co. | 331,162 | 0.7 | 38,282,327 |
| Time Warner, Inc. | 318,633 | 0.6 | 31,630,698 |
| Other Securities | | 1.3 | 63,960,427 |
| | | 3.3 | 172,397,771 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 5.5% | |
| Amgen, Inc. | 134,923 | 0.4 | 22,035,624 |
| Johnson & Johnson | 483,607 | 1.1 | 59,710,956 |
| Merck & Co., Inc. | 745,962 | 0.9 | 46,495,811 |
| Pfizer, Inc. | 2,130,304 | 1.4 | 72,259,912 |
| Other Securities | | 1.7 | 90,446,694 |
| | | 5.5 | 290,948,997 |
| |
| Real Estate 1.2% | |
| Other Securities | | 1.2 | 62,664,831 |
| |
| Retailing 4.7% | |
| Lowe's Cos., Inc. | 322,245 | 0.5 | 27,352,156 |
| The Home Depot, Inc. | 281,543 | 0.8 | 43,948,862 |
| Other Securities | | 3.4 | 177,536,165 |
| | | 4.7 | 248,837,183 |
| |
| Semiconductors & Semiconductor Equipment 2.8% | |
| Intel Corp. | 1,846,976 | 1.3 | 66,768,182 |
| Other Securities | | 1.5 | 81,811,487 |
| | | 2.8 | 148,579,669 |
| |
| Software & Services 7.2% | |
| International Business Machines Corp. | 432,301 | 1.3 | 69,293,527 |
| Microsoft Corp. | 1,398,828 | 1.8 | 95,763,765 |
| Oracle Corp. | 793,644 | 0.7 | 35,682,234 |
| Other Securities | | 3.4 | 181,908,833 |
| | | 7.2 | 382,648,359 |
| |
| Technology Hardware & Equipment 5.9% | |
| Apple, Inc. | 1,043,957 | 2.8 | 149,964,423 |
| Cisco Systems, Inc. | 1,283,751 | 0.8 | 43,737,397 |
| Other Securities | | 2.3 | 116,323,257 |
| | | 5.9 | 310,025,077 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Telecommunication Services 3.3% | |
| AT&T, Inc. | 2,412,154 | 1.8 | 95,593,663 |
| Verizon Communications, Inc. | 1,194,249 | 1.0 | 54,827,972 |
| Other Securities | | 0.5 | 21,865,884 |
| | | 3.3 | 172,287,519 |
| |
| Transportation 2.1% | |
| Union Pacific Corp. | 221,935 | 0.5 | 24,847,842 |
| Other Securities | | 1.6 | 84,243,025 |
| | | 2.1 | 109,090,867 |
| |
| Utilities 3.9% | |
| Other Securities | | 3.9 | 205,000,240 |
| Total Common Stock | |
| (Cost $3,923,808,379) | | | 5,255,670,949 |
|
| Other Investment Companies 0.3% of net assets | |
| |
| Money Market Fund 0.1% | |
| Other Securities | | 0.1 | 7,360,159 |
| |
| Securities Lending Collateral 0.2% | |
| Other Securities | | 0.2 | 11,532,650 |
| Total Other Investment Companies | |
| (Cost $18,892,809) | | | 18,892,809 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $3,960,516,277 and the unrealized appreciation and depreciation were $1,473,557,989 and ($159,510,508), respectively, with a net unrealized appreciation of $1,314,047,481.
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $10,472,420. |
| (b) | Issuer is affiliated with the fund's investment adviser. |
| (c) | The rate shown is the 7-day yield. |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 160 | 19,044,000 | 218,132 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $5,255,670,949 | $— | $— | $5,255,670,949 | |
| Other Investment Companies1 | 18,892,809 | — | — | 18,892,809 | |
| Total | $5,274,563,758 | $— | $— | $5,274,563,758 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $218,132 | $— | $— | $218,132 | |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investment in affiliated issuer, at value (cost $1,270,946) | | $2,824,978 |
| Investments in unaffiliated issuers, at value (cost $3,929,897,592) including securities on loan of $10,472,420 | | 5,260,206,130 |
| Collateral invested for securities on loan, at value (cost $11,532,650) | + | 11,532,650 |
| Total investments, at value (cost $3,942,701,188) | | 5,274,563,758 |
| Deposit with broker for futures contracts | | 3,575,000 |
| Receivables: | | |
| Fund shares sold | | 5,819,271 |
| Dividends | | 5,682,132 |
| Income from securities on loan | + | 74,064 |
| Total assets | | 5,289,714,225 |
| Liabilities |
| Collateral held for securities on loan | | 11,532,650 |
| Payables: | | |
| Investment adviser and administrator fees | | 875,894 |
| Shareholder service fees | | 312,319 |
| Fund shares redeemed | | 2,067,998 |
| Variation margin on futures contracts | | 41,004 |
| Accrued expenses | + | 2,044,777 |
| Total liabilities | | 16,874,642 |
| Net Assets |
| Total assets | | 5,289,714,225 |
| Total liabilities | – | 16,874,642 |
| Net assets | | $5,272,839,583 |
| Net Assets by Source | | |
| Capital received from investors | | 3,899,540,846 |
| Net investment income not yet distributed | | 33,787,234 |
| Net realized capital gains | | 7,430,801 |
| Net unrealized capital appreciation | | 1,332,080,702 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $5,272,839,583 | | 333,716,971 | | $15.80 |
| | | | | |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated issuer | | $10,907 |
| Dividends received from unaffiliated issuers (net of foreign withholding taxes of $10,174) | | 61,351,831 |
| Securities on loan, net | + | 546,127 |
| Total investment income | | 61,908,865 |
| Expenses |
| Investment adviser and administrator fees | | 5,735,818 |
| Shareholder service fees | | 1,809,401 |
| Index fees | | 1,484,303 |
| Transfer agent fees | | 151,127 |
| Registration fees | | 99,257 |
| Shareholder reports | | 82,181 |
| Portfolio accounting fees | | 54,000 |
| Custodian fees | | 44,222 |
| Professional fees | | 35,374 |
| Independent trustees' fees | | 18,335 |
| Interest expense | | 3,036 |
| Other expenses | + | 48,098 |
| Total expenses | | 9,565,152 |
| Expense reduction by CSIM and its affiliates | – | 739,366 |
| Net expenses | – | 8,825,786 |
| Net investment income | | 53,083,079 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 17,523,120 |
| Net realized gains on futures contracts | + | 3,413,440 |
| Net realized gains | | 20,936,560 |
| Net change in unrealized appreciation (depreciation) on affiliated issuer | | 519,912 |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | | 482,580,022 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 472,956 |
| Net change in unrealized appreciation (depreciation) | + | 483,572,890 |
| Net realized and unrealized gains | | 504,509,450 |
| Increase in net assets resulting from operations | | $557,592,529 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $53,083,079 | $108,811,377 |
| Net realized gains | | 20,936,560 | 237,469,517 |
| Net change in unrealized appreciation (depreciation) | + | 483,572,890 | (96,510,495) |
| Increase in net assets from operations | | 557,592,529 | 249,770,399 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (106,432,914) | (108,957,758) |
| Distributions from net realized gains | + | (235,982,514) | (146,034,638) |
| Total distributions | | ($342,415,428) | ($254,992,396) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 47,807,679 | $748,285,011 | 60,574,518 | $881,245,699 |
| Shares reinvested | | 14,226,127 | 219,082,355 | 11,581,875 | 160,408,965 |
| Shares redeemed | + | (30,580,119) | (478,642,351) | (92,533,795) | (1,353,159,351) |
| Net transactions in fund shares | | 31,453,687 | $488,725,015 | (20,377,402) | ($311,504,687) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 302,263,284 | $4,568,937,467 | 322,640,686 | $4,885,664,151 |
| Total increase or decrease | + | 31,453,687 | 703,902,116 | (20,377,402) | (316,726,684) |
| End of period | | 333,716,971 | $5,272,839,583 | 302,263,284 | $4,568,937,467 |
| Net investment income not yet distributed | | | $33,787,234 | | $87,137,069 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $12.69 | $12.82 | $13.51 | $12.78 | $10.31 | $10.11 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.11 1 | 0.18 1 | 0.18 1 | 0.14 | 0.16 | 0.15 |
| Net realized and unrealized gains (losses) | 1.99 | 0.43 | (0.03) | 1.23 | 3.35 | 0.88 |
| Total from investment operations | 2.10 | 0.61 | 0.15 | 1.37 | 3.51 | 1.03 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.17) | (0.18) | (0.16) | (0.12) | (0.20) | (0.12) |
| Distributions from net realized gains | (0.09) | (0.56) | (0.68) | (0.52) | (0.84) | (0.71) |
| Total distributions | (0.26) | (0.74) | (0.84) | (0.64) | (1.04) | (0.83) |
| Net asset value at end of period | $14.53 | $12.69 | $12.82 | $13.51 | $12.78 | $10.31 |
| Total return | 16.60% 2 | 5.37% | 1.01% | 10.99% | 37.55% | 11.37% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.35% 3 | 0.35% | 0.35% | 0.35% | 0.35% | 0.32% 4 |
| Gross operating expenses | 0.42% 3 | 0.43% | 0.43% | 0.44% | 0.48% | 0.50% |
| Net investment income (loss) | 1.61% 3 | 1.50% | 1.37% | 1.14% | 1.41% | 1.46% |
| Portfolio turnover rate | 8% 2 | 30% | 31% | 29% | 27% | 92% 5 |
| Net assets, end of period (x 1,000,000) | $1,694 | $1,361 | $1,416 | $1,208 | $849 | $619 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included.
5
Portfolio turnover would have been 29%, if rebalancing trades had not been included due to a change in the fund's index.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.1% | Common Stock | 1,264,079,069 | 1,678,868,413 |
| 0.0% | Rights | 492 | — |
| 3.1% | Other Investment Companies | 52,151,103 | 52,151,103 |
| 102.2% | Total Investments | 1,316,230,664 | 1,731,019,516 |
| (2.2%) | Other Assets and Liabilities, Net | | (37,336,960) |
| 100.0% | Net Assets | | 1,693,682,556 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 99.1% of net assets | |
| |
| Automobiles & Components 1.2% | |
| Cooper Tire & Rubber Co. | 100,000 | 0.2 | 3,830,000 |
| Other Securities | | 1.0 | 16,414,451 |
| | | 1.2 | 20,244,451 |
| |
| Banks 5.4% | |
| East West Bancorp, Inc. | 72,100 | 0.2 | 3,912,867 |
| Other Securities | | 5.2 | 87,629,887 |
| | | 5.4 | 91,542,754 |
| |
| Capital Goods 12.6% | |
| Allison Transmission Holdings, Inc. | 106,900 | 0.2 | 4,134,892 |
| Donaldson Co., Inc. | 94,300 | 0.3 | 4,364,204 |
| EnerSys | 49,100 | 0.2 | 4,080,701 |
| Kennametal, Inc. | 129,700 | 0.3 | 5,392,926 |
| Masco Corp. | 114,000 | 0.2 | 4,220,280 |
| MRC Global, Inc. * | 231,400 | 0.2 | 4,218,422 |
| MSC Industrial Direct Co., Inc., Class A | 44,300 | 0.2 | 3,966,179 |
| Nordson Corp. | 30,750 | 0.2 | 3,849,900 |
| Regal Beloit Corp. | 61,200 | 0.3 | 4,825,620 |
| Spirit AeroSystems Holdings, Inc., Class A | 71,800 | 0.2 | 4,104,088 |
| Other Securities | | 10.3 | 170,500,028 |
| | | 12.6 | 213,657,240 |
| |
| Commercial & Professional Services 4.6% | |
| Other Securities | | 4.6 | 78,132,359 |
| |
| Consumer Durables & Apparel 2.8% | |
| Lennar Corp., Class A | 85,600 | 0.3 | 4,322,800 |
| Other Securities | | 2.5 | 43,094,461 |
| | | 2.8 | 47,417,261 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Consumer Services 5.1% | |
| Graham Holdings Co., Class B | 7,100 | 0.3 | 4,272,070 |
| Panera Bread Co., Class A * | 17,775 | 0.3 | 5,557,887 |
| The Wendy's Co. | 283,900 | 0.2 | 4,184,686 |
| Other Securities | | 4.3 | 71,900,556 |
| | | 5.1 | 85,915,199 |
| |
| Diversified Financials 5.1% | |
| E*TRADE Financial Corp. * | 112,800 | 0.2 | 3,897,240 |
| LPL Financial Holdings, Inc. | 104,300 | 0.3 | 4,384,772 |
| Raymond James Financial, Inc. | 53,800 | 0.2 | 4,009,176 |
| Other Securities | | 4.4 | 74,671,935 |
| | | 5.1 | 86,963,123 |
| |
| Energy 4.1% | |
| Other Securities | | 4.1 | 68,884,597 |
| |
| Food & Staples Retailing 0.9% | |
| Other Securities | | 0.9 | 15,590,064 |
| |
| Food, Beverage & Tobacco 2.4% | |
| Flowers Foods, Inc. | 197,150 | 0.2 | 3,866,111 |
| Sanderson Farms, Inc. | 34,100 | 0.2 | 3,948,098 |
| Universal Corp. | 55,500 | 0.2 | 4,076,475 |
| Other Securities | | 1.8 | 28,220,663 |
| | | 2.4 | 40,111,347 |
| |
| Health Care Equipment & Services 3.7% | |
| Envision Healthcare Corp. * | 72,099 | 0.2 | 4,039,707 |
| Other Securities | | 3.5 | 58,334,534 |
| | | 3.7 | 62,374,241 |
| |
| Household & Personal Products 0.8% | |
| Other Securities | | 0.8 | 13,056,193 |
| |
| Insurance 3.8% | |
| Allied World Assurance Co. Holdings AG | 83,200 | 0.3 | 4,417,088 |
| Aspen Insurance Holdings Ltd. | 76,500 | 0.2 | 4,004,775 |
| Old Republic International Corp. | 208,100 | 0.3 | 4,303,508 |
| Primerica, Inc. | 51,200 | 0.3 | 4,290,560 |
| Validus Holdings Ltd. | 73,500 | 0.2 | 4,063,080 |
| Other Securities | | 2.5 | 43,093,804 |
| | | 3.8 | 64,172,815 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Materials 6.5% | |
| Cliffs Natural Resources, Inc. * | 583,300 | 0.2 | 3,919,776 |
| Crown Holdings, Inc. * | 72,000 | 0.2 | 4,038,480 |
| Martin Marietta Materials, Inc. | 19,100 | 0.2 | 4,205,629 |
| Olin Corp. | 126,200 | 0.2 | 4,054,806 |
| Southern Copper Corp. | 119,600 | 0.2 | 4,230,252 |
| Other Securities | | 5.5 | 89,002,116 |
| | | 6.5 | 109,451,059 |
| |
| Media 2.0% | |
| Other Securities | | 2.0 | 34,198,185 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 2.6% | |
| Quintiles IMS Holdings, Inc. * | 61,826 | 0.3 | 5,210,695 |
| Other Securities | | 2.3 | 38,162,049 |
| | | 2.6 | 43,372,744 |
| |
| Real Estate 10.2% | |
| Equinix, Inc. | 10,286 | 0.3 | 4,296,462 |
| Mid-America Apartment Communities, Inc. | 42,276 | 0.2 | 4,194,202 |
| Outfront Media, Inc. | 156,200 | 0.2 | 4,086,192 |
| Realogy Holdings Corp. | 143,200 | 0.3 | 4,374,760 |
| Other Securities | | 9.2 | 156,499,224 |
| | | 10.2 | 173,450,840 |
| |
| Retailing 5.1% | |
| Other Securities | | 5.1 | 86,168,288 |
| |
| Semiconductors & Semiconductor Equipment 2.8% | |
| ON Semiconductor Corp. * | 307,900 | 0.3 | 4,366,022 |
| Qorvo, Inc. * | 61,700 | 0.2 | 4,197,451 |
| Teradyne, Inc. | 135,900 | 0.3 | 4,793,193 |
| Other Securities | | 2.0 | 34,947,074 |
| | | 2.8 | 48,303,740 |
| |
| Software & Services 5.8% | |
| First Data Corp., Class A * | 248,400 | 0.2 | 3,880,008 |
| Other Securities | | 5.6 | 94,977,809 |
| | | 5.8 | 98,857,817 |
| |
| Technology Hardware & Equipment 4.5% | |
| Benchmark Electronics, Inc. * | 121,600 | 0.2 | 3,854,720 |
| Insight Enterprises, Inc. * | 111,100 | 0.3 | 4,677,310 |
| Other Securities | | 4.0 | 67,907,554 |
| | | 4.5 | 76,439,584 |
| |
| Telecommunication Services 0.7% | |
| Other Securities | | 0.7 | 12,576,563 |
| |
| Transportation 3.2% | |
| Copa Holdings S.A., Class A | 41,800 | 0.3 | 4,866,356 |
| Landstar System, Inc. | 45,770 | 0.2 | 3,911,046 |
| SkyWest, Inc. | 103,400 | 0.2 | 3,846,480 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| United Continental Holdings, Inc. * | 63,500 | 0.3 | 4,458,335 |
| Other Securities | | 2.2 | 37,478,382 |
| | | 3.2 | 54,560,599 |
| |
| Utilities 3.2% | |
| Other Securities | | 3.2 | 53,427,350 |
| Total Common Stock | |
| (Cost $1,264,079,069) | | | 1,678,868,413 |
|
| Rights 0.0% of net assets | |
| |
| Technology Hardware & Equipment 0.0% | |
| Other Securities | | 0.0 | — |
| Total Rights | |
| (Cost $492) | | | — |
|
| Other Investment Companies 3.1% of net assets | |
| |
| Money Market Fund 0.8% | |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (b) | 13,818,253 | 0.8 | 13,818,253 |
| |
| Securities Lending Collateral 2.3% | |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 38,332,850 | 2.3 | 38,332,850 |
| Total Other Investment Companies | |
| (Cost $52,151,103) | | | 52,151,103 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,322,951,462 and the unrealized appreciation and depreciation were $481,146,250 and ($73,078,196), respectively, with a net unrealized appreciation of $408,068,054.
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $36,800,447. |
| (b) | The rate shown is the 7-day yield. |
| (c) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| CVR — | Contingent Value Rights |
| REIT — | Real Estate Investment Trust |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| Russell 2000 Index, mini, Long, expires 06/16/17 | 220 | 15,382,400 | 194,333 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $1,505,417,573 | $— | $— | $1,505,417,573 | |
| Real Estate | 173,450,840 | — | — * | 173,450,840 | |
| Rights 1 | — | — | — | — | |
| Technology Hardware & Equipment | — | — | — * | — | |
| Other Investment Companies1 | 52,151,103 | — | — | 52,151,103 | |
| Total | $1,731,019,516 | $— | $— | $1,731,019,516 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $194,333 | $— | $— | $194,333 | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $1,277,897,814) including securities on loan of $36,800,447 | | $1,692,686,666 |
| Collateral invested for securities on loan, at value (cost $38,332,850) | + | 38,332,850 |
| Total investments, at value (cost $1,316,230,664) | | 1,731,019,516 |
| Foreign currency, at value (cost $34) | | 25 |
| Deposit with broker for futures contracts | | 726,000 |
| Receivables: | | |
| Fund shares sold | | 2,243,458 |
| Dividends | | 810,309 |
| Income from securities on loan | + | 146,744 |
| Total assets | | 1,734,946,052 |
| Liabilities |
| Collateral held for securities on loan | | 38,332,850 |
| Payables: | | |
| Investment adviser and administrator fees | | 263,159 |
| Shareholder service fees | | 150,568 |
| Fund shares redeemed | | 1,660,246 |
| Variation margin on futures contracts | | 211,969 |
| Accrued expenses | + | 644,704 |
| Total liabilities | | 41,263,496 |
| Net Assets |
| Total assets | | 1,734,946,052 |
| Total liabilities | – | 41,263,496 |
| Net assets | | $1,693,682,556 |
| Net Assets by Source | | |
| Capital received from investors | | 1,242,588,825 |
| Net investment income not yet distributed | | 7,497,914 |
| Net realized capital gains | | 28,612,641 |
| Net unrealized capital appreciation | | 414,983,176 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $1,693,682,556 | | 116,581,301 | | $14.53 |
| | | | | |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $4,275) | | $15,229,660 |
| Interest | | 434 |
| Securities on loan, net | + | 662,290 |
| Total investment income | | 15,892,384 |
| Expenses |
| Investment adviser and administrator fees | | 1,978,730 |
| Shareholder service fees | | 722,545 |
| Index fees | | 478,682 |
| Registration fees | | 55,065 |
| Portfolio accounting fees | | 36,250 |
| Transfer agent fees | | 31,603 |
| Professional fees | | 23,695 |
| Custodian fees | | 22,368 |
| Independent trustees' fees | | 8,228 |
| Shareholder reports | | 6,179 |
| Interest expense | | 631 |
| Other expenses | + | 10,902 |
| Total expenses | | 3,374,878 |
| Expense reduction by CSIM and its affiliates | – | 541,833 |
| Net expenses | – | 2,833,045 |
| Net investment income | | 13,059,339 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 30,227,641 |
| Net realized gains on futures contracts | + | 2,072,213 |
| Net realized gains | | 32,299,854 |
| Net change in unrealized appreciation (depreciation) on investments | | 183,450,664 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 644,322 |
| Net change in unrealized appreciation (depreciation) | + | 184,094,986 |
| Net realized and unrealized gains | | 216,394,840 |
| Increase in net assets resulting from operations | | $229,454,179 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $13,059,339 | $20,356,322 |
| Net realized gains | | 32,299,854 | 11,892,831 |
| Net change in unrealized appreciation (depreciation) | + | 184,094,986 | 38,043,378 |
| Increase in net assets from operations | | 229,454,179 | 70,292,531 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (19,300,337) | (20,210,722) |
| Distributions from net realized gains | + | (10,058,079) | (61,589,342) |
| Total distributions | | ($29,358,416) | ($81,800,064) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 21,999,510 | $311,825,010 | 27,387,772 | $327,990,889 |
| Shares reinvested | | 1,290,347 | 18,451,962 | 4,713,120 | 54,342,269 |
| Shares redeemed | + | (13,911,731) | (197,507,032) | (35,294,191) | (425,576,331) |
| Net transactions in fund shares | | 9,378,126 | $132,769,940 | (3,193,299) | ($43,243,173) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 107,203,175 | $1,360,816,853 | 110,396,474 | $1,415,567,559 |
| Total increase or decrease | + | 9,378,126 | 332,865,703 | (3,193,299) | (54,750,706) |
| End of period | | 116,581,301 | $1,693,682,556 | 107,203,175 | $1,360,816,853 |
| Net investment income not yet distributed | | | $7,497,914 | | $13,738,912 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $7.96 | $8.19 | $8.84 | $9.05 | $7.16 | $7.26 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.11 1 | 0.24 1 | 0.25 1 | 0.30 | 0.23 | 0.22 |
| Net realized and unrealized gains (losses) | 0.73 | (0.25) | (0.60) | (0.26) | 1.87 | (0.08) 2 |
| Total from investment operations | 0.84 | (0.01) | (0.35) | 0.04 | 2.10 | 0.14 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.25) | (0.22) | (0.30) | (0.25) | (0.21) | (0.24) |
| Net asset value at end of period | $8.55 | $7.96 | $8.19 | $8.84 | $9.05 | $7.16 |
| Total return | 10.87% 3 | 0.07% | (4.07%) | 0.39% | 30.12% | 2.24% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.35% 4 | 0.35% | 0.35% | 0.35% | 0.34% 5 | 0.31% 5 |
| Gross operating expenses | 0.45% 4 | 0.46% | 0.46% | 0.48% | 0.52% | 0.56% |
| Net investment income (loss) | 2.71% 4 | 3.20% | 2.96% | 3.52% | 2.95% | 3.58% |
| Portfolio turnover rate | 5% 3 | 18% | 11% | 8% | 22% | 61% 6 |
| Net assets, end of period (x 1,000,000) | $1,154 | $971 | $1,173 | $908 | $646 | $501 |
| |
1
Calculated based on the average shares outstanding during the period.
2
The per share amount does not accord with the change in aggregate gains and losses in securities during the period because of the timing of fund transactions in relation to fluctuating market values.
3
Not annualized.
4
Annualized.
5
The ratio of net operating expenses would have been 0.35%, if voluntary waiver by CSIM had not been included.
6
Portfolio turnover would have been 37%, if rebalancing trades had not been included due to a change in the fund's index.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 98.3% | Common Stock | 1,131,136,761 | 1,134,432,458 |
| 0.8% | Preferred Stock | 9,790,008 | 9,415,437 |
| 1.3% | Other Investment Company | 15,185,130 | 15,185,130 |
| 0.4% | Short-Term Investments | 4,002,693 | 4,002,693 |
| 100.8% | Total Investments | 1,160,114,592 | 1,163,035,718 |
| (0.8%) | Other Assets and Liabilities, Net | | (9,358,379) |
| 100.0% | Net Assets | | 1,153,677,339 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 98.3% of net assets | |
| |
| Australia 6.3% | |
| Australia & New Zealand Banking Group Ltd. | 230,984 | 0.5 | 5,654,252 |
| BHP Billiton Ltd. | 477,988 | 0.7 | 8,510,066 |
| Commonwealth Bank of Australia | 102,895 | 0.6 | 6,720,475 |
| National Australia Bank Ltd. | 209,358 | 0.5 | 5,313,953 |
| Wesfarmers Ltd. | 160,659 | 0.4 | 5,171,541 |
| Westpac Banking Corp. | 241,920 | 0.5 | 6,341,874 |
| Other Securities | | 3.1 | 35,224,631 |
| | | 6.3 | 72,936,792 |
| |
| Austria 0.4% | |
| Other Securities | | 0.4 | 4,673,066 |
| |
| Belgium 0.8% | |
| Other Securities | | 0.8 | 8,884,400 |
| |
| Canada 6.8% | |
| Royal Bank of Canada | 73,844 | 0.4 | 5,056,370 |
| Suncor Energy, Inc. | 179,137 | 0.5 | 5,614,066 |
| Other Securities | | 5.9 | 67,260,666 |
| | | 6.8 | 77,931,102 |
| |
| Denmark 0.8% | |
| Other Securities | | 0.8 | 9,585,951 |
| |
| Finland 0.9% | |
| Other Securities | | 0.9 | 10,657,559 |
| |
| France 10.2% | |
| BNP Paribas S.A. | 85,558 | 0.5 | 6,038,443 |
| Engie S.A. | 442,350 | 0.5 | 6,237,153 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Orange S.A. | 334,175 | 0.4 | 5,172,139 |
| Sanofi | 90,184 | 0.7 | 8,521,827 |
| Societe Generale S.A. | 106,716 | 0.5 | 5,851,522 |
| TOTAL S.A. | 384,129 | 1.7 | 19,718,569 |
| Other Securities | | 5.9 | 65,613,304 |
| | | 10.2 | 117,152,957 |
| |
| Germany 9.0% | |
| Allianz SE | 35,904 | 0.6 | 6,835,318 |
| BASF SE | 102,077 | 0.9 | 9,944,232 |
| Bayer AG | 49,819 | 0.5 | 6,164,257 |
| Daimler AG | 114,905 | 0.7 | 8,562,064 |
| Deutsche Telekom AG | 372,406 | 0.6 | 6,532,297 |
| E.ON SE | 887,830 | 0.6 | 6,920,976 |
| Siemens AG | 58,285 | 0.7 | 8,360,568 |
| Other Securities | | 4.4 | 50,753,689 |
| | | 9.0 | 104,073,401 |
| |
| Hong Kong 1.4% | |
| Other Securities | | 1.4 | 15,927,241 |
| |
| Ireland 0.7% | |
| Other Securities | | 0.7 | 7,701,651 |
| |
| Israel 0.4% | |
| Other Securities | | 0.4 | 4,603,027 |
| |
| Italy 3.4% | |
| Enel S.p.A. | 1,422,363 | 0.6 | 6,762,174 |
| Eni S.p.A. | 681,826 | 0.9 | 10,575,810 |
| UniCredit S.p.A. * | 312,499 | 0.4 | 5,088,261 |
| Other Securities | | 1.5 | 16,901,000 |
| | | 3.4 | 39,327,245 |
| |
| Japan 21.3% | |
| Hitachi Ltd. | 928,000 | 0.4 | 5,126,613 |
| Honda Motor Co., Ltd. | 214,500 | 0.5 | 6,243,163 |
| Mitsubishi UFJ Financial Group, Inc. | 896,634 | 0.5 | 5,681,605 |
| Nippon Telegraph & Telephone Corp. | 125,508 | 0.5 | 5,378,724 |
| Toyota Motor Corp. | 210,018 | 1.0 | 11,366,333 |
| Other Securities | | 18.4 | 211,933,564 |
| | | 21.3 | 245,730,002 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Luxembourg 0.5% | |
| Other Securities | | 0.5 | 6,002,411 |
| |
| Netherlands 4.8% | |
| Koninklijke Ahold Delhaize N.V. | 221,883 | 0.4 | 4,596,361 |
| Royal Dutch Shell plc, A Shares | 424,825 | 1.0 | 11,077,239 |
| Royal Dutch Shell plc, B Shares | 665,914 | 1.5 | 17,717,946 |
| Other Securities | | 1.9 | 22,487,720 |
| | | 4.8 | 55,879,266 |
| |
| New Zealand 0.1% | |
| Other Securities | | 0.1 | 954,112 |
| |
| Norway 0.8% | |
| Other Securities | | 0.8 | 9,712,976 |
| |
| Portugal 0.2% | |
| Other Securities | | 0.2 | 2,500,691 |
| |
| Singapore 0.8% | |
| Other Securities | | 0.8 | 9,357,217 |
| |
| Spain 4.5% | |
| Banco Santander S.A. | 2,663,176 | 1.5 | 17,355,709 |
| Repsol S.A. | 321,358 | 0.4 | 5,072,101 |
| Telefonica S.A. | 942,329 | 0.9 | 10,422,108 |
| Other Securities | | 1.7 | 18,929,249 |
| | | 4.5 | 51,779,167 |
| |
| Sweden 2.5% | |
| Other Securities | | 2.5 | 28,603,241 |
| |
| Switzerland 6.3% | |
| Glencore plc * | 2,312,063 | 0.8 | 9,086,727 |
| Nestle S.A. | 160,326 | 1.1 | 12,348,382 |
| Novartis AG | 119,119 | 0.8 | 9,170,384 |
| Roche Holding AG | 30,255 | 0.7 | 7,916,653 |
| Other Securities | | 2.9 | 34,654,313 |
| | | 6.3 | 73,176,459 |
| |
| United Kingdom 15.4% | |
| AstraZeneca plc | 113,873 | 0.6 | 6,819,780 |
| Barclays plc | 1,820,187 | 0.4 | 4,984,409 |
| BHP Billiton plc | 316,317 | 0.4 | 4,822,314 |
| BP plc | 4,280,275 | 2.1 | 24,502,898 |
| British American Tobacco plc | 94,156 | 0.6 | 6,361,488 |
| GlaxoSmithKline plc | 326,967 | 0.6 | 6,581,141 |
| HSBC Holdings plc | 1,661,369 | 1.2 | 13,700,175 |
| Rio Tinto plc | 152,267 | 0.5 | 6,006,963 |
| Vodafone Group plc | 3,604,356 | 0.8 | 9,283,522 |
| Other Securities | | 8.2 | 94,219,834 |
| | | 15.4 | 177,282,524 |
| Total Common Stock | |
| (Cost $1,131,136,761) | | | 1,134,432,458 |
|
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Preferred Stock 0.8% of net assets | |
| |
| Germany 0.7% | |
| Volkswagen AG | 36,225 | 0.5 | 5,750,599 |
| Other Securities | | 0.2 | 2,162,015 |
| | | 0.7 | 7,912,614 |
| |
| Italy 0.1% | |
| Other Securities | | 0.1 | 1,351,492 |
| |
| Spain 0.0% | |
| Other Securities | | 0.0 | 134,519 |
| |
| United Kingdom 0.0% | |
| Other Securities | | 0.0 | 16,812 |
| Total Preferred Stock | |
| (Cost $9,790,008) | | | 9,415,437 |
|
| Other Investment Company 1.3% of net assets | |
| |
| United States 1.3% | |
| Securities Lending Collateral 1.3% | |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 15,185,130 | 1.3 | 15,185,130 |
| Total Other Investment Company | |
| (Cost $15,185,130) | | | 15,185,130 |
Security
Rate, Maturity Date | Face
Amount ($) | % of Net
Assets | Value
($) |
| Short-Term Investments 0.4% of net assets | |
| |
| Time Deposit 0.4% | |
| Other Securities | | 0.4 | 4,002,693 |
| Total Short-Term Investments | |
| (Cost $4,002,693) | | | 4,002,693 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,175,863,768 unrealized appreciation and depreciation were $99,171,964 and ($112,000,014), respectively, with a net unrealized depreciation of ($12,828,050).
At 04/30/17, the values of certain foreign securities held by the fund aggregating $1,053,141,196 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial note 2(a) for additional information)
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $14,326,945. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| CDI — | CHESS Depositary Interest |
| CVA — | Dutch Certificate |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
| SDR — | Swedish Depositary Receipt |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI EAFE Index, e-mini, Long expires 06/16/17 | 104 | 9,483,760 | 198,519 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $— | $350,480,335 | $— | $350,480,335 | |
| Australia | — | 72,928,733 | 8,059 * | 72,936,792 | |
| Canada | 77,931,102 | — | — | 77,931,102 | |
| France | 593,854 | 116,559,103 | — | 117,152,957 | |
| Germany | 54,775 | 104,018,626 | — | 104,073,401 | |
| Hong Kong | 278,706 | 15,648,535 | — | 15,927,241 | |
| Ireland | 3,466,699 | 4,234,952 | — | 7,701,651 | |
| Israel | 405,015 | 4,198,012 | — | 4,603,027 | |
| Italy | 93,310 | 39,045,892 | 188,043 | 39,327,245 | |
| Netherlands | 662,581 | 55,216,685 | — * | 55,879,266 | |
| Singapore | 758,576 | 8,598,641 | — | 9,357,217 | |
| Sweden | 707,141 | 27,896,100 | — | 28,603,241 | |
| Switzerland | 1,634,407 | 71,542,052 | — | 73,176,459 | |
| United Kingdom | 3,907,619 | 173,374,905 | — | 177,282,524 | |
| Preferred Stock1 | — | 9,398,625 | — | 9,398,625 | |
| United Kingdom | — | — | 16,812 | 16,812 | |
| Other Investment Company1 | 15,185,130 | — | — | 15,185,130 | |
| Short-Term Investments1 | — | 4,002,693 | — | 4,002,693 | |
| Total | $105,678,915 | $1,057,143,889 | $212,914 | $1,163,035,718 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $198,519 | $— | $— | $198,519 | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $4,000,501 and $1,398,237 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended April 30, 2017. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation by the fund. There were no transfers in or out of Level 3 during the period.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $1,144,929,462) including securities on loan of $14,326,945 | | $1,147,850,588 |
| Collateral invested for securities on loan, at value (cost $15,185,130) | + | 15,185,130 |
| Total investments, at value (cost $1,160,114,592) | | 1,163,035,718 |
| Foreign currency, at value (cost $701) | | 707 |
| Deposit with broker for futures contracts | | 882,000 |
| Receivables: | | |
| Dividends | | 3,710,443 |
| Fund shares sold | | 1,596,290 |
| Foreign tax reclaims | | 1,008,579 |
| Income from securities on loan | | 66,049 |
| Interest | + | 112 |
| Total assets | | 1,170,299,898 |
| Liabilities |
| Collateral held for securities on loan | | 15,185,130 |
| Payables: | | |
| Investments bought | | 16,812 |
| Investment adviser and administrator fees | | 153,968 |
| Shareholder service fees | | 60,897 |
| Fund shares redeemed | | 738,985 |
| Variation margin on futures contracts | | 16,302 |
| Accrued expenses | + | 450,465 |
| Total liabilities | | 16,622,559 |
| Net Assets |
| Total assets | | 1,170,299,898 |
| Total liabilities | – | 16,622,559 |
| Net assets | | $1,153,677,339 |
| Net Assets by Source | | |
| Capital received from investors | | 1,209,271,015 |
| Net investment income not yet distributed | | 9,710,784 |
| Net realized capital losses | | (68,423,567) |
| Net unrealized capital appreciation | | 3,119,107 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $1,153,677,339 | | 134,926,876 | | $8.55 |
| | | | | |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $1,580,968) | | $15,598,870 |
| Interest | | 7,978 |
| Securities on loan, net | + | 324,294 |
| Total investment income | | 15,931,142 |
| Expenses |
| Investment adviser and administrator fees | | 1,344,047 |
| Shareholder service fees | | 376,016 |
| Index fees | | 305,174 |
| Custodian fees | | 110,195 |
| Portfolio accounting fees | | 48,267 |
| Transfer agent fees | | 42,281 |
| Registration fees | | 40,247 |
| Professional fees | | 24,973 |
| Shareholder reports | | 16,610 |
| Independent trustees' fees | | 6,573 |
| Interest expense | | 1,257 |
| Other expenses | + | 16,406 |
| Total expenses | | 2,332,046 |
| Expense reduction by CSIM and its affiliates | – | 508,100 |
| Net expenses | – | 1,823,946 |
| Net investment income | | 14,107,196 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 6,966,511 |
| Net realized gains on futures contracts | | 466,734 |
| Net realized losses on foreign currency transactions | + | (299,538) |
| Net realized gains | | 7,133,707 |
| Net change in unrealized appreciation (depreciation) on investments | | 86,803,494 |
| Net change in unrealized appreciation (depreciation) on futures contracts | | 358,249 |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 112,556 |
| Net change in unrealized appreciation (depreciation) | + | 87,274,299 |
| Net realized and unrealized gains | | 94,408,006 |
| Increase in net assets resulting from operations | | $108,515,202 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $14,107,196 | $31,436,117 |
| Net realized gains | | 7,133,707 | 23,779,784 |
| Net change in unrealized appreciation (depreciation) | + | 87,274,299 | (76,971,398) |
| Increase (decrease) in net assets from operations | | 108,515,202 | (21,755,497) |
| Distributions to Shareholders | |
| Distributions from net investment income | | ($31,144,306) | ($31,819,112) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 21,328,067 | $174,055,560 | 40,777,391 | $309,566,525 |
| Shares reinvested | | 2,127,748 | 16,766,662 | 2,600,103 | 19,448,771 |
| Shares redeemed | + | (10,550,347) | (85,923,263) | (64,663,235) | (477,115,945) |
| Net transactions in fund shares | | 12,905,468 | $104,898,959 | (21,285,741) | ($148,100,649) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 122,021,408 | $971,407,484 | 143,307,149 | $1,173,082,742 |
| Total increase or decrease | + | 12,905,468 | 182,269,855 | (21,285,741) | (201,675,258) |
| End of period | | 134,926,876 | $1,153,677,339 | 122,021,408 | $971,407,484 |
| Net investment income not yet distributed | | | $9,710,784 | | $26,747,894 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $11.93 | $11.25 | $11.15 | $11.47 | $9.13 | $9.53 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss)1 | 0.12 | 0.25 | 0.22 | 0.22 | 0.22 | 0.21 |
| Net realized and unrealized gains (losses) | 1.21 | 0.66 | 0.12 | (0.23) | 2.42 | 0.03 |
| Total from investment operations | 1.33 | 0.91 | 0.34 | (0.01) | 2.64 | 0.24 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.29) | (0.23) | (0.19) | (0.31) | (0.30) | (0.25) |
| Distributions from net realized gains | — | — | (0.05) | — | — | (0.39) |
| Total distributions | (0.29) | (0.23) | (0.24) | (0.31) | (0.30) | (0.64) |
| Net asset value at end of period | $12.97 | $11.93 | $11.25 | $11.15 | $11.47 | $9.13 |
| Total return | 11.40% 2 | 8.29% | 3.09% | (0.07%) | 29.75% | 3.13% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.49% 3 | 0.49% | 0.49% | 0.49% | 0.47% 4,5 | 0.46% 6,7 |
| Gross operating expenses | 0.59% 3 | 0.68% | 0.71% | 0.80% | 0.93% | 0.92% 7 |
| Net investment income (loss) | 1.98% 3 | 2.24% | 1.98% | 1.87% | 2.21% | 2.42% |
| Portfolio turnover rate | 7% 2 | 40% | 37% | 41% | 29% | 89% 8 |
| Net assets, end of period (x 1,000,000) | $593 | $476 | $427 | $275 | $150 | $90 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Effective June 11, 2013, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/13 is a blended ratio.
5
The ratio of net operating expenses would have been 0.52%, if voluntary waiver by CSIM had not been included.
6
The ratio of net operating expenses would have been 0.51%, if voluntary waiver by CSIM had not been included.
7
The net operating and gross operating expense ratios would have been 0.50% and 0.97%, respectively, if vendor payments had not been included.
8
Portfolio turnover would have been 48%, if rebalancing trades had not been included due to a change in the fund's index.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at 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. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.8% | Common Stock | 481,151,760 | 580,337,835 |
| 0.4% | Preferred Stock | 1,593,130 | 2,033,000 |
| 0.0% | Rights | — | 1,085 |
| 2.0% | Other Investment Company | 11,988,020 | 11,988,020 |
| 1.1% | Short-Term Investments | 6,324,986 | 6,324,986 |
| 101.3% | Total Investments | 501,057,896 | 600,684,926 |
| (1.3%) | Other Assets and Liabilities, Net | | (7,466,531) |
| 100.0% | Net Assets | | 593,218,395 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 97.8% of net assets | |
| |
| Australia 5.5% | |
| Computershare Ltd. | 89,477 | 0.2 | 986,399 |
| Fairfax Media Ltd. | 1,141,223 | 0.2 | 904,727 |
| Goodman Group | 158,557 | 0.2 | 962,710 |
| Qantas Airways Ltd. | 349,622 | 0.2 | 1,108,255 |
| Other Securities | | 4.7 | 28,876,651 |
| | | 5.5 | 32,838,742 |
| |
| Austria 1.0% | |
| Wienerberger AG | 37,354 | 0.1 | 874,543 |
| Other Securities | | 0.9 | 5,154,058 |
| | | 1.0 | 6,028,601 |
| |
| Belgium 1.3% | |
| Other Securities | | 1.3 | 7,434,471 |
| |
| Canada 7.6% | |
| Waste Connections, Inc. | 19,734 | 0.3 | 1,815,461 |
| Other Securities | | 7.3 | 43,471,866 |
| | | 7.6 | 45,287,327 |
| |
| Denmark 1.4% | |
| FLSmidth & Co. A/S | 18,667 | 0.2 | 1,122,205 |
| Novozymes A/S, B Shares | 20,413 | 0.1 | 881,292 |
| Other Securities | | 1.1 | 6,405,271 |
| | | 1.4 | 8,408,768 |
| |
| Finland 1.5% | |
| Other Securities | | 1.5 | 8,896,616 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| France 3.8% | |
| Edenred | 36,089 | 0.2 | 924,480 |
| Neopost S.A. | 28,910 | 0.2 | 1,172,331 |
| Other Securities | | 3.4 | 20,629,623 |
| | | 3.8 | 22,726,434 |
| |
| Germany 3.5% | |
| Covestro AG | 14,523 | 0.2 | 1,131,797 |
| Symrise AG | 12,498 | 0.1 | 874,965 |
| Telefonica Deutschland Holding AG | 185,911 | 0.2 | 901,433 |
| Other Securities | | 3.0 | 17,763,286 |
| | | 3.5 | 20,671,481 |
| |
| Greece 0.0% | |
| Other Securities | | 0.0 | — |
| |
| Hong Kong 4.3% | |
| Hang Lung Properties Ltd. | 369,000 | 0.2 | 966,846 |
| Wynn Macau Ltd. * | 432,800 | 0.2 | 948,719 |
| Other Securities | | 3.9 | 23,339,443 |
| | | 4.3 | 25,255,008 |
| |
| Ireland 0.9% | |
| Other Securities | | 0.9 | 5,587,197 |
| |
| Israel 1.0% | |
| Other Securities | | 1.0 | 6,009,106 |
| |
| Italy 3.0% | |
| A2A S.p.A | 614,135 | 0.2 | 912,810 |
| Ferrari N.V. | 15,056 | 0.2 | 1,132,606 |
| Mediobanca S.p.A. | 105,139 | 0.2 | 1,011,075 |
| Unipol Gruppo Finanziario S.p.A. | 196,108 | 0.1 | 874,599 |
| Other Securities | | 2.3 | 13,629,093 |
| | | 3.0 | 17,560,183 |
| |
| Japan 36.6% | |
| FamilyMart UNY Holdings Co., Ltd. | 27,500 | 0.3 | 1,554,490 |
| Fujikura Ltd. | 136,800 | 0.2 | 1,028,460 |
| Hitachi Chemical Co., Ltd. | 36,800 | 0.2 | 1,053,920 |
| Hitachi Metals Ltd. | 67,790 | 0.2 | 949,352 |
| Kanematsu Corp. | 449,000 | 0.2 | 914,895 |
| Kinden Corp. | 68,900 | 0.2 | 1,042,393 |
| Konami Holdings Corp. | 21,400 | 0.2 | 890,824 |
| Kurita Water Industries Ltd. | 34,300 | 0.1 | 885,724 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Minebea Mitsumi, Inc. | 117,344 | 0.3 | 1,697,603 |
| Mitsubishi Gas Chemical Co., Inc. | 56,500 | 0.2 | 1,208,148 |
| Nichirei Corp. | 37,700 | 0.2 | 938,450 |
| NOK Corp. | 39,300 | 0.2 | 936,730 |
| North Pacific Bank Ltd. | 232,600 | 0.1 | 886,998 |
| NTN Corp. | 194,000 | 0.2 | 988,865 |
| Toyoda Gosei Co., Ltd. | 37,900 | 0.2 | 1,007,237 |
| Yaskawa Electric Corp. | 46,200 | 0.1 | 883,066 |
| Other Securities | | 33.5 | 200,488,678 |
| | | 36.6 | 217,355,833 |
| |
| Luxembourg 0.5% | |
| Other Securities | | 0.5 | 3,158,136 |
| |
| Netherlands 2.3% | |
| Aalberts Industries N.V. | 22,302 | 0.1 | 884,308 |
| ABN AMRO Group N.V. CVA | 35,380 | 0.2 | 928,839 |
| X5 Retail Group N.V. GDR * | 29,835 | 0.2 | 1,051,684 |
| Other Securities | | 1.8 | 10,853,078 |
| | | 2.3 | 13,717,909 |
| |
| New Zealand 1.0% | |
| Other Securities | | 1.0 | 5,799,468 |
| |
| Norway 1.4% | |
| Other Securities | | 1.4 | 8,097,939 |
| |
| Portugal 0.5% | |
| Other Securities | | 0.5 | 2,889,196 |
| |
| Singapore 2.0% | |
| City Developments Ltd. | 122,500 | 0.2 | 945,302 |
| Genting Singapore plc | 1,213,300 | 0.2 | 966,684 |
| Venture Corp., Ltd. | 105,700 | 0.2 | 922,487 |
| Other Securities | | 1.4 | 9,154,221 |
| | | 2.0 | 11,988,694 |
| |
| Spain 1.8% | |
| Other Securities | | 1.8 | 10,486,931 |
| |
| Sweden 2.2% | |
| Husqvarna AB, B Shares | 101,877 | 0.2 | 1,012,755 |
| Other Securities | | 2.0 | 12,079,781 |
| | | 2.2 | 13,092,536 |
| |
| Switzerland 3.2% | |
| Georg Fischer AG | 935 | 0.1 | 881,674 |
| Other Securities | | 3.1 | 17,895,151 |
| | | 3.2 | 18,776,825 |
| |
| United Kingdom 11.5% | |
| Croda International plc | 18,905 | 0.2 | 921,490 |
| IHS Markit Ltd. * | 24,017 | 0.2 | 1,042,338 |
| KAZ Minerals plc * | 167,850 | 0.2 | 1,094,738 |
| Melrose Industries plc | 393,371 | 0.2 | 1,204,953 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Spectris plc | 28,974 | 0.2 | 1,035,748 |
| Other Securities | | 10.5 | 62,971,167 |
| | | 11.5 | 68,270,434 |
| Total Common Stock | |
| (Cost $481,151,760) | | | 580,337,835 |
|
| Preferred Stock 0.4% of net assets | |
| |
| Germany 0.3% | |
| Other Securities | | 0.3 | 1,584,513 |
| |
| Italy 0.1% | |
| Other Securities | | 0.1 | 259,109 |
| |
| Sweden 0.0% | |
| Other Securities | | 0.0 | 188,003 |
| |
| United Kingdom 0.0% | |
| Other Securities | | 0.0 | 1,375 |
| Total Preferred Stock | |
| (Cost $1,593,130) | | | 2,033,000 |
|
| Rights 0.0% of net assets | |
| |
| Australia 0.0% | |
| Other Securities | | 0.0 | 1,085 |
| Total Rights | |
| (Cost $—) | | | 1,085 |
|
| Other Investment Company 2.0% of net assets | |
| |
| United States 2.0% | |
| Securities Lending Collateral 2.0% | |
| Wells Fargo Government Money Market Fund,Select Class 0.67% (b) | 11,988,020 | 2.0 | 11,988,020 |
| Total Other Investment Company | |
| (Cost $11,988,020) | | | 11,988,020 |
Security
Rate, Maturity Date | Face
Amount ($) | % of Net
Assets | Value
($) |
| Short-Term Investments 1.1% of net assets | |
| |
| Time Deposits 1.1% | |
| Barclays Capital, Inc. | 5,309,134 | 0.9 | 5,309,134 |
| Other Securities | | 0.2 | 1,015,852 |
| | | 1.1 | 6,324,986 |
| Total Short-Term Investments | |
| (Cost $6,324,986) | | | 6,324,986 |
End of Investments.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
At 04/30/17, the tax basis cost of the fund's investments was $506,478,973 and the unrealized appreciation and depreciation were $114,364,118 and ($20,158,165), respectively, with a net unrealized appreciation of $94,205,953.
At 04/30/17, the values of certain foreign securities held by the fund aggregating $477,958,976 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial note 2(a) for additional information)
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $11,449,179. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| CDI — | CHESS Depositary Interest |
| CVA — | Dutch Certificate |
| GDR — | Global Depositary Receipt |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI EAFE Index, e-mini, Long expires 06/16/17 | 120 | 10,942,800 | 208,081 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock | | | | | |
| Australia | 957,818 | 31,880,924 | — * | 32,838,742 | |
| Austria | 1,472,127 | 4,556,474 | — | 6,028,601 | |
| Belgium | 782,926 | 6,651,545 | — | 7,434,471 | |
| Canada | 45,287,327 | — | — | 45,287,327 | |
| Denmark | 457,765 | 7,951,003 | — | 8,408,768 | |
| Finland | 1,789,552 | 7,107,064 | — | 8,896,616 | |
| France | 3,696,673 | 19,029,761 | — | 22,726,434 | |
| Germany | 460,322 | 20,211,159 | — | 20,671,481 | |
| Greece | — | — | — * | — | |
| Hong Kong | 1,183,556 | 23,689,358 | 382,094 | 25,255,008 | |
| Ireland | 3,711,571 | 1,875,626 | — | 5,587,197 | |
| Israel | 276,481 | 5,732,625 | — | 6,009,106 | |
| Italy | 5,631,919 | 11,928,264 | — * | 17,560,183 | |
| Japan | 1,628,634 | 215,727,199 | — | 217,355,833 | |
| Luxembourg | 994,610 | 2,163,526 | — * | 3,158,136 | |
| Netherlands | 4,721,169 | 8,996,740 | — | 13,717,909 | |
| New Zealand | 1,464,538 | 4,334,930 | — | 5,799,468 | |
| Norway | 416,432 | 7,681,507 | — | 8,097,939 | |
| Portugal | 516,900 | 2,372,296 | — * | 2,889,196 | |
| Singapore | 688,687 | 11,300,007 | — * | 11,988,694 | |
| Spain | 373,939 | 10,112,992 | — * | 10,486,931 | |
| Sweden | 1,533,848 | 11,558,688 | — | 13,092,536 | |
| Switzerland | 3,506,680 | 15,270,145 | — | 18,776,825 | |
| United Kingdom | 22,027,804 | 46,242,630 | — * | 68,270,434 | |
| Preferred Stock1 | — | 1,584,513 | — | 1,584,513 | |
| Italy | 259,109 | — | — | 259,109 | |
| Sweden | 188,003 | — | — | 188,003 | |
| United Kingdom | — | — | 1,375 | 1,375 | |
| Rights 1 | — | — | 1,085 | 1,085 | |
| Other Investment Company | | | | | |
| United States1 | 11,988,020 | — | — | 11,988,020 | |
| Short-Term Investments1 | — | 6,324,986 | — | 6,324,986 | |
| Total | $116,016,410 | $484,283,962 | $384,554 | $600,684,926 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $208,081 | $— | $— | $208,081 | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017. The transfers in the amount of $5,816,405 and $21,636,778 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, were primarily due to the use of international fair valuation by the fund. The transfers into Level 3 from Level 1 or Level 2 are a result of the availability of current and reliable market-based data provided by third-party pricing services or other valuation techniques which utilize significant observable inputs.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $489,069,876) including securities on loan of $11,449,179 | | $588,696,906 |
| Collateral invested for securities on loan, at value (cost $11,988,020) | + | 11,988,020 |
| Total investments, at value (cost $501,057,896) | | 600,684,926 |
| Foreign currency, at value (cost $10,520) | | 10,622 |
| Deposit with broker for futures contracts | | 693,000 |
| Receivables: | | |
| Dividends | | 2,470,624 |
| Fund shares sold | | 1,933,757 |
| Foreign tax reclaims | | 210,033 |
| Income from securities on loan | | 60,672 |
| Interest | + | 187 |
| Total assets | | 606,063,821 |
| Liabilities |
| Collateral held for securities on loan | | 11,988,020 |
| Payables: | | |
| Investment adviser and administrator fees | | 326,324 |
| Shareholder service fees | | 42,245 |
| Fund shares redeemed | | 216,473 |
| Variation margin on futures contracts | | 18,432 |
| Accrued expenses | + | 253,932 |
| Total liabilities | | 12,845,426 |
| Net Assets |
| Total assets | | 606,063,821 |
| Total liabilities | – | 12,845,426 |
| Net assets | | $593,218,395 |
| Net Assets by Source | | |
| Capital received from investors | | 497,402,737 |
| Net investment income not yet distributed | | 214,681 |
| Net realized capital losses | | (4,229,387) |
| Net unrealized capital appreciation | | 99,830,364 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $593,218,395 | | 45,746,808 | | $12.97 |
| | | | | |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $747,103) | | $6,110,118 |
| Interest | | 6,912 |
| Securities on loan, net | + | 263,469 |
| Total investment income | | 6,380,499 |
| Expenses |
| Investment adviser and administrator fees | | 1,029,488 |
| Shareholder service fees | | 225,572 |
| Custodian fees | | 82,555 |
| Portfolio accounting fees | | 48,243 |
| Registration fees | | 36,896 |
| Transfer agent fees | | 23,405 |
| Professional fees | | 22,430 |
| Shareholder reports | | 11,462 |
| Index fees | | 10,955 |
| Independent trustees' fees | | 5,028 |
| Interest expense | | 239 |
| Other expenses | + | 16,561 |
| Total expenses | | 1,512,834 |
| Expense reduction by CSIM and its affiliates | – | 249,041 |
| Net expenses | – | 1,263,793 |
| Net investment income | | 5,116,706 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 1,513,951 |
| Net realized gains on futures contracts | | 291,082 |
| Net realized losses on foreign currency transactions | + | (52,620) |
| Net realized gains | | 1,752,413 |
| Net change in unrealized appreciation (depreciation) on investments | | 50,997,843 |
| Net change in unrealized appreciation (depreciation) on futures contracts | | 258,411 |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 51,035 |
| Net change in unrealized appreciation (depreciation) | + | 51,307,289 |
| Net realized and unrealized gains | | 53,059,702 |
| Increase in net assets resulting from operations | | $58,176,408 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $5,116,706 | $9,577,389 |
| Net realized gains | | 1,752,413 | 166,541 |
| Net change in unrealized appreciation (depreciation) | + | 51,307,289 | 26,137,507 |
| Increase in net assets from operations | | 58,176,408 | 35,881,437 |
| Distributions to Shareholders | |
| Distributions from net investment income | | ($11,632,113) | ($8,387,388) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 8,789,528 | $106,875,416 | 13,213,332 | $147,536,415 |
| Shares reinvested | | 784,700 | 9,086,829 | 604,755 | 6,525,310 |
| Shares redeemed | + | (3,700,158) | (44,913,129) | (11,915,246) | (132,914,627) |
| Net transactions in fund shares | | 5,874,070 | $71,049,116 | 1,902,841 | $21,147,098 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 39,872,738 | $475,624,984 | 37,969,897 | $426,983,837 |
| Total increase | + | 5,874,070 | 117,593,411 | 1,902,841 | 48,641,147 |
| End of period | | 45,746,808 | $593,218,395 | 39,872,738 | $475,624,984 |
| Net investment income not yet distributed | | | $214,681 | | $6,730,088 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $7.86 | $6.67 | $8.60 | $9.24 | $8.86 | $9.17 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.06 1 | 0.16 1 | 0.20 1 | 0.20 | 0.19 | 0.25 |
| Net realized and unrealized gains (losses) | 0.74 | 1.22 | (1.92) | (0.66) | 0.43 | (0.17) |
| Total from investment operations | 0.80 | 1.38 | (1.72) | (0.46) | 0.62 | 0.08 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.17) | (0.19) | (0.21) | (0.18) | (0.24) | (0.22) |
| Distributions from net realized gains | — | — | — | — | — | (0.17) |
| Total distributions | (0.17) | (0.19) | (0.21) | (0.18) | (0.24) | (0.39) |
| Net asset value at end of period | $8.49 | $7.86 | $6.67 | $8.60 | $9.24 | $8.86 |
| Total return | 10.39% 2 | 21.64% | (20.28%) | (5.03%) | 7.11% | 1.18% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 0.49% 3 | 0.49% | 0.49% | 0.49% | 0.51% 4,5 | 0.56% 6 |
| Gross operating expenses | 0.79% 3 | 0.88% | 0.85% | 0.85% | 0.88% | 0.91% |
| Net investment income (loss) | 1.42% 3 | 2.41% | 2.61% | 2.35% | 2.22% | 2.75% |
| Portfolio turnover rate | 8% 2 | 20% | 27% | 19% | 22% | 86% 7 |
| Net assets, end of period (x 1,000,000) | $425 | $336 | $304 | $346 | $353 | $314 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Effective June 11, 2013, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/13 is a blended ratio.
5
The ratio of net operating expenses would have been 0.56%, if voluntary waiver by CSIM had not been included.
6
The ratio of net operating expenses would have been 0.60%, if voluntary waiver by CSIM had not been included.
7
Portfolio turnover would have been 51%, if rebalancing trades had not been included due to a change in the fund's index.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows the fund's 50 largest portfolio holdings in unaffiliated issuers, and any holdings exceeding 1% of the fund's net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-877-824-5615. This complete schedule, filed on the fund's N-CSR(S), is also available on the SEC's website at www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 87.7% | Common Stock | 320,476,327 | 372,614,400 |
| 11.1% | Preferred Stock | 31,831,302 | 47,313,637 |
| 0.0% | Rights | — | — |
| 0.2% | Other Investment Company | 569,656 | 569,656 |
| 0.7% | Short-Term Investments | 3,029,566 | 3,029,566 |
| 99.7% | Total Investments | 355,906,851 | 423,527,259 |
| 0.3% | Other Assets and Liabilities, Net | | 1,438,169 |
| 100.0% | Net Assets | | 424,965,428 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Common Stock 87.7% of net assets | |
| |
| Brazil 6.5% | |
| Ambev S.A. | 356,550 | 0.5 | 2,051,197 |
| Banco do Brasil S.A. | 369,415 | 0.9 | 3,823,280 |
| Petroleo Brasileiro S.A. * | 1,298,858 | 1.4 | 5,876,278 |
| Vale S.A. | 772,076 | 1.6 | 6,681,977 |
| Other Securities | | 2.1 | 9,190,007 |
| | | 6.5 | 27,622,739 |
| |
| Chile 0.6% | |
| Other Securities | | 0.6 | 2,615,702 |
| |
| China 15.8% | |
| Bank of China Ltd., Class H | 10,198,234 | 1.2 | 4,933,014 |
| China Construction Bank Corp., Class H | 12,819,960 | 2.4 | 10,405,491 |
| China Mobile Ltd. | 662,055 | 1.7 | 7,048,648 |
| China Petroleum & Chemical Corp., Class H | 9,081,400 | 1.7 | 7,374,582 |
| CNOOC Ltd. | 3,393,075 | 0.9 | 3,958,351 |
| Industrial & Commercial Bank of China Ltd., Class H | 9,209,172 | 1.4 | 6,003,143 |
| PetroChina Co., Ltd., Class H | 4,794,000 | 0.8 | 3,368,175 |
| Other Securities | | 5.7 | 23,944,173 |
| | | 15.8 | 67,035,577 |
| |
| Colombia 0.5% | |
| Other Securities | | 0.5 | 1,913,743 |
| |
| Czech Republic 0.2% | |
| Other Securities | | 0.2 | 889,246 |
| |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Greece 1.0% | |
| Other Securities | | 1.0 | 4,085,225 |
| |
| Hungary 0.4% | |
| Other Securities | | 0.4 | 1,812,457 |
| |
| India 4.3% | |
| Reliance Industries Ltd. * | 202,661 | 1.0 | 4,392,001 |
| Other Securities | | 3.3 | 13,964,316 |
| | | 4.3 | 18,356,317 |
| |
| Indonesia 1.4% | |
| Other Securities | | 1.4 | 5,882,941 |
| |
| Malaysia 1.9% | |
| Other Securities | | 1.9 | 8,185,583 |
| |
| Mexico 2.8% | |
| America Movil S.A.B. de C.V., Series L | 3,140,019 | 0.6 | 2,413,571 |
| Other Securities | | 2.2 | 9,277,059 |
| | | 2.8 | 11,690,630 |
| |
| Peru 0.1% | |
| Other Securities | | 0.1 | 419,953 |
| |
| Philippines 0.2% | |
| Other Securities | | 0.2 | 681,826 |
| |
| Poland 2.5% | |
| KGHM Polska Miedz S.A. | 70,615 | 0.5 | 2,236,942 |
| Polski Koncern Naftowy Orlen S.A. | 98,347 | 0.7 | 2,939,157 |
| Other Securities | | 1.3 | 5,444,323 |
| | | 2.5 | 10,620,422 |
| |
| Republic of Korea 17.1% | |
| Hyundai Heavy Industries Co., Ltd. *(d) | 13,914 | 0.5 | 2,053,393 |
| Hyundai Mobis Co., Ltd. | 9,566 | 0.4 | 1,865,567 |
| Hyundai Motor Co. | 29,616 | 0.9 | 3,745,740 |
| Kia Motors Corp. | 75,310 | 0.5 | 2,305,312 |
| LG Chem Ltd. | 7,707 | 0.4 | 1,853,750 |
| LG Display Co., Ltd. | 76,812 | 0.5 | 1,979,300 |
| LG Electronics, Inc. | 41,371 | 0.6 | 2,511,369 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| POSCO | 22,349 | 1.2 | 5,276,217 |
| Samsung Electronics Co., Ltd. | 12,324 | 5.7 | 24,160,306 |
| Shinhan Financial Group Co., Ltd. | 51,323 | 0.5 | 2,142,807 |
| SK Hynix, Inc. | 62,182 | 0.7 | 2,945,770 |
| SK Innovation Co., Ltd. | 19,399 | 0.7 | 2,910,334 |
| Other Securities | | 4.5 | 19,117,477 |
| | | 17.1 | 72,867,342 |
| |
| Russia 11.5% | |
| Gazprom PJSC * | 5,757,400 | 3.3 | 13,829,995 |
| Gazprom PJSC ADR | 784,000 | 0.9 | 3,722,078 |
| Lukoil PJSC * | 221,305 | 2.6 | 10,954,702 |
| MMC Norilsk Nickel PJSC * | 10,887 | 0.4 | 1,672,768 |
| Mobile TeleSystems PJSC * | 348,922 | 0.4 | 1,678,454 |
| Sberbank of Russia PJSC * | 826,740 | 0.6 | 2,399,095 |
| Surgutneftegas OJSC * | 9,419,605 | 1.1 | 4,618,074 |
| Tatneft PJSC * | 342,930 | 0.5 | 2,270,990 |
| Other Securities | | 1.7 | 7,759,306 |
| | | 11.5 | 48,905,462 |
| |
| South Africa 6.0% | |
| MTN Group Ltd. | 494,554 | 1.1 | 4,677,155 |
| Sasol Ltd. | 146,413 | 1.1 | 4,486,805 |
| Standard Bank Group Ltd. | 181,376 | 0.5 | 2,014,105 |
| Other Securities | | 3.3 | 14,271,233 |
| | | 6.0 | 25,449,298 |
| |
| Taiwan 11.9% | |
| Hon Hai Precision Industry Co., Ltd. | 2,715,466 | 2.1 | 8,888,158 |
| Innolux Corp. | 4,541,357 | 0.5 | 2,119,639 |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 1,181,103 | 1.8 | 7,608,541 |
| Other Securities | | 7.5 | 32,037,059 |
| | | 11.9 | 50,653,397 |
| |
| Thailand 1.6% | |
| PTT PCL | 219,987 | 0.6 | 2,473,979 |
| Other Securities | | 1.0 | 4,255,248 |
| | | 1.6 | 6,729,227 |
| |
| Turkey 1.3% | |
| Other Securities | | 1.3 | 5,677,638 |
| |
| United Arab Emirates 0.1% | |
| Other Securities | | 0.1 | 519,675 |
| Total Common Stock | |
| (Cost $320,476,327) | | | 372,614,400 |
|
| Preferred Stock 11.1% of net assets | |
| |
| Brazil 8.3% | |
| Banco Bradesco S.A. | 397,716 | 1.0 | 4,186,352 |
| Gerdau S.A. | 545,306 | 0.4 | 1,683,653 |
| Itau Unibanco Holding S.A. | 576,085 | 1.7 | 7,125,627 |
| Petroleo Brasileiro S.A. * | 1,659,754 | 1.7 | 7,305,103 |
| Security | Number
of Shares | % of Net
Assets | Value
($) |
| Vale S.A. | 964,228 | 1.9 | 7,977,388 |
| Other Securities | | 1.6 | 7,052,763 |
| | | 8.3 | 35,330,886 |
| |
| Colombia 0.1% | |
| Other Securities | | 0.1 | 479,552 |
| |
| Republic of Korea 1.2% | |
| Samsung Electronics Co., Ltd. | 2,361 | 0.9 | 3,635,761 |
| Other Securities | | 0.3 | 1,333,201 |
| | | 1.2 | 4,968,962 |
| |
| Russia 1.5% | |
| Transneft PJSC * | 1,552 | 1.2 | 5,253,416 |
| Other Securities | | 0.3 | 1,280,821 |
| | | 1.5 | 6,534,237 |
| Total Preferred Stock | |
| (Cost $31,831,302) | | | 47,313,637 |
|
| Rights 0.0% of net assets | |
| |
| China 0.0% | |
| Other Securities | | 0.0 | — |
| Total Rights | |
| (Cost $—) | | | — |
|
| Other Investment Company 0.2% of net assets | |
| |
| United States 0.2% | |
| Securities Lending Collateral 0.2% | |
| Other Securities | | 0.2 | 569,656 |
| Total Other Investment Company | |
| (Cost $569,656) | | | 569,656 |
Security
Rate, Maturity Date | Face
Amount ($) | % of Net
Assets | Value
($) |
| Short-Term Investments 0.7% of net assets | |
| |
| Time Deposits 0.7% | |
Barclays Capital, Inc.
0.42%, 05/01/17 (a) | 3,023,661 | 0.7 | 3,023,661 |
| Other Securities | | 0.0 | 5,905 |
| | | 0.7 | 3,029,566 |
| Total Short-Term Investments | |
| (Cost $3,029,566) | | | 3,029,566 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $381,233,611 and the unrealized appreciation and depreciation were $61,187,236 and ($18,893,588), respectively, with a net unrealized appreciation of $42,293,648.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
At 04/30/17, the values of certain foreign securities held by the fund aggregating $274,323,563 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2(a) for additional information)
For the following notes, please refer to the complete schedule of portfolio holdings.
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $533,990. |
| (c) | The rate shown is the 7-day yield. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| GDR — | Global Depositary Receipt |
In additional to the above the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI Emerging Markets Index, e-mini, Long, expires 06/16/17 | 104 | 5,090,800 | 22,278 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $— | $88,039,047 | $— | $88,039,047 | |
| Brazil | 27,622,739 | — | — | 27,622,739 | |
| Chile | 2,615,702 | — | — | 2,615,702 | |
| China | 1,235,768 | 64,809,693 | 990,116 | 67,035,577 | |
| Colombia | 1,913,743 | — | — | 1,913,743 | |
| Malaysia | 1,246,576 | 6,939,007 | — | 8,185,583 | |
| Mexico | 11,690,630 | — | — | 11,690,630 | |
| Peru | 419,953 | — | — | 419,953 | |
| Poland | 671,912 | 9,948,510 | — | 10,620,422 | |
| Republic of Korea | — | 70,813,949 | 2,053,393 | 72,867,342 | |
| Russia | 45,183,384 | 3,722,078 | — | 48,905,462 | |
| South Africa | 1,205,452 | 24,243,846 | — | 25,449,298 | |
| Thailand | 5,890,756 | 838,471 | — | 6,729,227 | |
| United Arab Emirates | 519,675 | — | — | 519,675 | |
| Preferred Stock1 | — | 4,968,962 | — | 4,968,962 | |
| Brazil | 35,330,886 | — | — | 35,330,886 | |
| Colombia | 479,552 | — | — | 479,552 | |
| Russia | 6,534,237 | — | — | 6,534,237 | |
| Rights 1 | — | — | — | — | |
| China | — | — | — * | — | |
| Other Investment Company1 | 569,656 | — | — | 569,656 | |
| Short-Term Investments1 | — | 3,029,566 | — | 3,029,566 | |
| Total | $143,130,621 | $277,353,129 | $3,043,509 | $423,527,259 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $22,278 | $— | $— | $22,278 | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in the complete schedule of Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Condensed Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Condensed Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017. The transfers in the amount of $1,934,399 and $2,491,157 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, were primarily due to the use of international fair valuation by the fund. The transfers into Level 3 from Level 1 or Level 2 are a result of the availability of current and reliable market-based data provided by third-party pricing services or other valuation techniques which utilize significant observable inputs.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $355,337,195) including securities on loan of $533,990 | | $422,957,603 |
| Collateral invested for securities on loan, at value (cost $569,656) | + | 569,656 |
| Total investments, at value (cost $355,906,851) | | 423,527,259 |
| Foreign currency, at value (cost $1,345,985) | | 1,344,811 |
| Deposit with broker for futures contracts | | 218,000 |
| Receivables: | | |
| Fund shares sold | | 878,620 |
| Dividends | | 421,209 |
| Variation margin on futures contracts | | 18,024 |
| Foreign tax reclaims | | 4,983 |
| Income from securities on loan | | 354 |
| Interest | + | 108 |
| Total assets | | 426,413,368 |
| Liabilities |
| Collateral held for securities on loan | | 569,656 |
| Payables: | | |
| Investment adviser and administrator fees | | 146,977 |
| Shareholder service fees | | 23,837 |
| Foreign capital gains tax | | 265,905 |
| Fund shares redeemed | | 211,713 |
| Accrued expenses and other liabilities | + | 229,852 |
| Total liabilities | | 1,447,940 |
| Net Assets |
| Total assets | | 426,413,368 |
| Total liabilities | – | 1,447,940 |
| Net assets | | $424,965,428 |
| Net Assets by Source | | |
| Capital received from investors | | 448,684,822 |
| Net investment income not yet distributed | | 1,630,112 |
| Net realized capital losses | | (92,722,843) |
| Net unrealized capital appreciation | | 67,373,337 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $424,965,428 | | 50,036,490 | | $8.49 |
| | | | | |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $621,575) | | $3,584,375 |
| Interest | | 5,660 |
| Securities on loan, net | + | 354 |
| Total investment income | | 3,590,389 |
| Expenses |
| Investment adviser and administrator fees | | 940,320 |
| Shareholder service fees | | 134,005 |
| Custodian fees | | 266,156 |
| Portfolio accounting fees | | 38,016 |
| Registration fees | | 33,137 |
| Transfer agent fees | | 22,466 |
| Professional fees | | 21,761 |
| Index fees | | 10,448 |
| Shareholder reports | | 6,216 |
| Independent trustees' fees | | 4,623 |
| Interest expense | | 571 |
| Other expenses | + | 15,932 |
| Total expenses | | 1,493,651 |
| Expense reduction by CSIM and its affiliates | – | 571,567 |
| Net expenses | – | 922,084 |
| Net investment income | | 2,668,305 |
| Realized and Unrealized Gains (Losses) |
| Net realized losses on investments (net of foreign capital gain tax paid of $28) | | (6,989,385) |
| Net realized gains on futures contracts | | 458,183 |
| Net realized losses on foreign currency transactions | + | (82,689) |
| Net realized losses | | (6,613,891) |
| Net change in unrealized appreciation (depreciation) on investments (net of change in foreign capital gains tax of $95,570) | | 42,282,896 |
| Net change in unrealized appreciation (depreciation) on futures contracts | | 34,811 |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (9,258) |
| Net change in unrealized appreciation (depreciation) | + | 42,308,449 |
| Net realized and unrealized gains | | 35,694,558 |
| Increase in net assets resulting from operations | | $38,362,863 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $2,668,305 | $7,270,085 |
| Net realized losses | | (6,613,891) | (39,222,603) |
| Net change in unrealized appreciation (depreciation) | + | 42,308,449 | 93,365,255 |
| Increase in net assets from operations | | 38,362,863 | 61,412,737 |
| Distributions to Shareholders | |
| Distributions from net investment income | | ($7,176,164) | ($8,647,638) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 13,840,382 | $111,752,879 | 15,830,412 | $100,588,374 |
| Shares reinvested | | 660,956 | 4,970,387 | 944,255 | 5,589,988 |
| Shares redeemed | + | (7,158,041) | (58,538,750) | (19,713,318) | (127,760,306) |
| Net transactions in fund shares | | 7,343,297 | $58,184,516 | (2,938,651) | ($21,581,944) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 42,693,193 | $335,594,213 | 45,631,844 | $304,411,058 |
| Total increase or decrease | + | 7,343,297 | 89,371,215 | (2,938,651) | 31,183,155 |
| End of period | | 50,036,490 | $424,965,428 | 42,693,193 | $335,594,213 |
| Net investment income not yet distributed | | | $1,630,112 | | $6,137,971 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Financial Notes, unaudited
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) |
| Schwab Fundamental US Large Company Index Fund | Schwab Target 2015 Fund |
| Schwab Fundamental US Small Company Index Fund | Schwab Target 2020 Fund |
| Schwab Fundamental International Large Company Index Fund | Schwab Target 2025 Fund |
| Schwab Fundamental International Small Company Index Fund | Schwab Target 2030 Fund |
| Schwab Fundamental Emerging Markets Large Company Index Fund | Schwab Target 2035 Fund |
| Schwab Fundamental Global Real Estate Index Fund | Schwab Target 2040 Fund |
| Schwab ® S&P 500 Index Fund | Schwab Target 2045 Fund |
| Schwab Small-Cap Index Fund® | Schwab Target 2050 Fund |
| Schwab Total Stock Market Index Fund® | Schwab Target 2055 Fund |
| Schwab International Index Fund® | Schwab Target 2060 Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Target 2010 Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Target 2015 Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Target 2020 Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2025 Index Fund |
| Laudus Small-Cap MarketMasters Fund™ | Schwab Target 2030 Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2035 Index Fund |
| Schwab Balanced Fund™ | Schwab Target 2040 Index Fund |
| Schwab Core Equity Fund™ | Schwab Target 2045 Index Fund |
| Schwab Dividend Equity Fund™ | Schwab Target 2050 Index Fund |
| Schwab Large-Cap Growth Fund™ | Schwab Target 2055 Index Fund |
| Schwab Small-Cap Equity Fund™ | Schwab Target 2060 Index Fund |
| Schwab Hedged Equity Fund™ | Schwab® Monthly Income Fund - Moderate Payout |
| Schwab Health Care Fund™ | Schwab® Monthly Income Fund - Enhanced Payout |
| Schwab ® International Core Equity Fund | Schwab® Monthly Income Fund - Maximum Payout |
| Schwab Target 2010 Fund | |
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds' Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The funds may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (SEC). For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the SEC.
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
• Foreign equity security fair valuation: The Board has adopted procedures to fair value foreign equity securities that are traded in markets that close prior to the funds valuing their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the NAV of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures.
• Futures contracts: Futures contracts are valued at their settlement prices as of the close of their exchanges.
• Underlying funds: Mutual funds are valued at their respective NAVs. Exchange-traded funds (ETFs) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.
• Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)—Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets.
• Level 3—significant unobservable inputs (including the funds' own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds' results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds' investments as of April 30, 2017 are disclosed in the Condensed Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their market value may change daily.
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreements allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. The aggregate market value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. Total costs and expenses, including lending agent fees and broker rebates, associated with securities lending activities under the trust’s Securities Lending Program paid to the unaffiliated lending agents start at 10% of gross lending revenue, with subsequent breakpoints to a low of 7.5%.
As of April 30, 2017, the funds had securities on loan, all of which were classified as common stocks. The value of the securities on loan and the related collateral as of April 30, 2017, if any, are disclosed in each fund's Condensed Portfolio Holdings. The value of the securities on loan and the investment of cash collateral are also disclosed in each fund's Statement of Assets and Liabilities.
Cash Management Transactions: The funds may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, may be subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The funds bear the risk associated with the repayment of
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed. Balances in the CMS Sweep are accounted for on a cost basis, which approximates market value.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures contract position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
In 2015, the Schwab Fundamental International Large Company Index Fund filed claims to recover taxes previously withheld in certain European Union countries on the basis that those countries had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. These filings are subject to various administrative and judicial proceedings within these countries, and all professional fees associated with these filings have been paid by CSIM. No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty surrounding the ultimate resolution of proceedings, the likelihood of receipt of these claims, and the potential timing of payment.
(e) Expenses:
Prior to May 1, 2017, expenses that were specific to a fund were charged directly to the fund. Expenses that were common to all funds within the trust were allocated among the funds in proportion to their average daily net assets.
Pursuant to an Amended and Restated Investment Advisory and Administration Agreement (Advisory Agreement) between CSIM and each fund, effective May 1, 2017, CSIM pays the operating expenses of each fund, excluding acquired fund fees and expenses (AFFE), taxes, any brokerage expenses, and extraordinary or non-routine expenses. Taxes, any brokerage expenses and extraordinary or non-routine expenses that are specific to a fund are charged directly to the fund.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, State Street Bank and Trust Company (State Street), under which the funds may receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to a fund's operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of April 30, 2017, if any, are reflected in each fund's Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds' prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Tracking Error Risk. As an index fund, each fund seeks to track the performance of its respective index, although it may not be successful in doing so. The divergence between the performance of a fund and its index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
Investment Style Risk. The funds are not actively managed. Therefore, each fund follows the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, a fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of a fund’s expenses, a fund’s performance may be below that of its respective index.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
Sampling Index Tracking Risk. If a fund uses a sampling method, the fund will not fully replicate its respective index and may hold securities not included in the index. As a result, the fund is subject to the risk that the investment adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. If a fund utilizes a sampling approach, it may not track the return of the index as well as it would if the fund purchased all of the securities in the index.
Concentration Risk. To the extent that a fund’s or its respective index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country or asset class.
Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, a fund’s performance could be impacted.
Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Foreign Investment Risk. A fund's investments in securities of foreign issuers involve certain risks that may be greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund's investments, and could impair the fund's ability to meet its investment objective or invest in accordance with its investment strategy. Foreign securities also include American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs) and European Depositary Receipts (EDRs), which may be less liquid than the underlying shares in their primary trading market and GDRs, many of which are issued by companies in emerging markets, may be more volatile. To the extent a fund's investments in a single country or a limited number of countries represent a larger percentage of the fund's assets, the fund's performance may be adversely affected by the economic, political, regulatory and social conditions in those countries, and the fund's price may be more volatile than the price of a fund that is geographically diversified.
Emerging Markets Risk. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in developed countries. As a result, there may be an increased risk of illiquidity and price volatility associated with a fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar, and, at times, it may be difficult to value such investments.
ETF Risk. Certain funds may purchase shares of ETFs to gain exposure to a particular portion of the market while awaiting an opportunity to purchase securities directly. When a fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a proportionate share of the ETF's expenses. Therefore, it may be more costly to own an ETF than to own the underlying securities directly. In addition, while the risks of owning shares of an ETF generally reflect the risks of owning the underlying securities the ETF is designed to track, lack of liquidity in the market for an ETF's shares can result in its value being more volatile than the underlying portfolio securities.
Derivatives Risk. A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk and market risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to lack of availability risk, credit risk, leverage risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause a fund to realize higher amounts of short-term capital gains. A fund's use of derivatives could reduce the fund's performance, increase the fund's volatility, and could cause the fund to lose more than the initial amount invested.
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Financial Notes, unaudited (continued)
3. Risk Factors (continued):
Liquidity Risk. A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
Charles Schwab Investment Management, Inc. (CSIM or the investment adviser), a wholly owned subsidiary of The Charles Schwab Corporation (CSC), serves as each fund's investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement between CSIM and the trust.
For its advisory and administrative services to the funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
| % of Average Daily Net Assets | 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 |
| First $500 million | 0.30% | 0.30% | 0.30% | 0.40% | 0.50% |
| $500 million to $5 billion | 0.22% | 0.22% | 0.22% | 0.38% | 0.48% |
| $5 billion to $10 billion | 0.20% | 0.20% | 0.20% | 0.36% | 0.46% |
| over $10 billion | 0.18% | 0.18% | 0.18% | 0.34% | 0.44% |
For the period ended April 30, 2017, the aggregate advisory fees paid to CSIM by the funds, as a percentage of each fund's average daily net assets were as follows:
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 |
| 0.23% | 0.25% | 0.26% | 0.40% | 0.50% |
Subsequent to the reporting period ended April 30, 2017, and effective May 1, 2017, the funds changed to a unitary fee structure and the expense limitation discussed below was terminated. Under the new unitary fee structure, CSIM will pay the operating expenses of the fund, excluding AFFE, taxes, any brokerage expenses and extraordinary or non-routine expenses. Effective May 1, 2017, the advisory fee rate payable by each fund was changed as follows:
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 |
| 0.25% | 0.25% | 0.25% | 0.39% | 0.39% |
CSIM has a licensing agreement with the Frank Russell Company to use certain Russell indices and trademarks in connection with the offering and operation of certain registered investment companies. The funds have entered into a sub-license agreement with CSIM pursuant to which CSIM has agreed to sub-license certain Russell indices and trademarks to the funds. Under the sub-license agreement, each fund pays its pro rata share of licensing fees, as disclosed in each fund's Statement of Operations as Index fees.
Subsequent to the reporting period ended April 30, 2017, and effective May 1, 2017, CSIM will pay all applicable licensing fees for each fund under the unitary fee structure.
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Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, Schwab) (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds.
Pursuant to the Plan, each fund is subject to an annual shareholder servicing fee up to 0.10%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds). Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by Schwab or the service provider.
Subsequent to the reporting period ended April 30, 2017, and effective May 1, 2017, the Plan for each fund was terminated and the funds are no longer subject to shareholder servicing fees.
Expense Limitation
Although these agreements specify certain fees for these services, CSIM and its affiliates have made an additional agreement with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (expense limitation). The expense limitation as a percentage of average daily net assets is as follows:
Schwab
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 |
| 0.35% | 0.35% | 0.35% | 0.49% | 0.49% |
Investments in Affiliates
The funds may engage in certain transactions involving affiliates. For instance, a fund may own shares of CSC if that company is included in its index. Below is the summary of investment activities involving CSC shares owned by the Schwab Fundamental US Large Company Index Fund during the report period:
| Fund | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | Realized
Gains (Losses)
11/01/16
to 04/30/17 | Dividends
Received
11/01/16
to 04/30/17 |
| Schwab Fundamental US Large Company Index Fund | 72,715 | — | — | 72,715 | $2,824,978 | $— | $10,907 |
Investments from Affiliates
Certain Schwab Funds may own shares of other Schwab funds. The table below reflects the percentages of shares of each fund in this report that are owned by other Schwab Funds as of April 30, 2017, as applicable:
| | Underlying Funds |
| | Schwab
Fundamental
US Large
Company
Index Fund | Schwab
Fundamental
US Small
Company
Index Fund | Schwab
Fundamental
International Large
Company
Index Fund | Schwab
Fundamental
International Small
Company
Index Fund | Schwab
Fundamental
Emerging Markets
Large
Company
Index Fund |
| Schwab MarketTrack All Equity Portfolio | 1.6% | 2.7% | 3.2% | 5.4% | 7.3% |
| Schwab MarketTrack Balanced Portfolio | 0.9% | 1.4% | 1.4% | 2.3% | 3.1% |
| Schwab MarketTrack Conservative Portfolio | 0.3% | 0.5% | 0.2% | 1.3% | 1.0% |
| Schwab MarketTrack Growth Portfolio | 1.7% | 2.7% | 2.7% | 4.5% | 6.2% |
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Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Other Affiliated Transactions
The professional fees related to foreign withholding tax claims discussed in financial note 2 were non-routine expenses. However, the investment adviser agreed to pay these professional fees, subject to reimbursement by the Schwab Fundamental International Large Company Index Fund to the extent the fund is able to successfully recover taxes withheld in the future. As of April 30, 2017, the balance of professional fees related to foreign withholding tax subject to future reimbursement to the investment adviser was $47,807 for Schwab Fundamental International Large Company Index Fund.
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
Interfund Transactions
The funds may engage in direct transactions with certain other Schwab funds when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended April 30, 2017, each fund’s total aggregate security transactions with other Schwab funds as well as any realized gains (losses) were as follows:
| | Total Aggregate Transactions | Realized Gains (Losses) |
| Schwab Fundamental US Large Company Index Fund | $81,509,321 | ($1,525,586) |
| Schwab Fundamental US Small Company Index Fund | 27,964,213 | 1,310,924 |
| Schwab Fundamental International Large Company Index Fund | 9,434,695 | 57,052 |
| Schwab Fundamental International Small Company Index Fund | 3,182,612 | (4,328) |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 4,287,557 | 124,580 |
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. Subsequent to the reporting period ended April 30, 2017, and effective May 1, 2017, the funds do not pay any interested or non-interested (independent trustees) trustees. The independent trustees are paid by CSIM. Prior to May 1, 2017, the funds paid independent trustees, as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other U.S. registered investment companies managed by CSIM in a joint, syndicated, committed $555 million line of credit (the Credit Facility). Under the terms of the Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund paid a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the Credit Facility. There were no borrowings from the line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
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Financial Notes, unaudited (continued)
7. Derivatives:
Certain funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The fair value and variation margin for futures contracts held at April 30, 2017 are presented on the Condensed Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in unrealized gains (losses) on futures contracts are presented on the Statement of Operations, if any. Refer to financial note 2(b) for the funds' accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended April 30, 2017, the month-end average contract values of futures contracts held by the funds and the month-end average number of contracts held were as follows:
| | Contract Values | Number of Contracts |
| Schwab Fundamental US Large Company Index Fund | $33,210,114 | 293 |
| Schwab Fundamental US Small Company Index Fund | 15,521,100 | 194 |
| Schwab Fundamental International Large Company Index Fund | 9,331,051 | 108 |
| Schwab Fundamental International Small Company Index Fund | 8,673,739 | 101 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 3,273,320 | 71 |
8. Purchases and Sales/Maturities of Investment Securities:
For the period ended April 30, 2017, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
| | Purchases
of Securities | Sales/Maturities
of Securities |
| Schwab Fundamental US Large Company Index Fund | $530,192,754 | $295,755,918 |
| Schwab Fundamental US Small Company Index Fund | 283,138,464 | 132,366,398 |
| Schwab Fundamental International Large Company Index Fund | 137,340,967 | 50,248,649 |
| Schwab Fundamental International Small Company Index Fund | 100,045,925 | 38,398,527 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 77,713,405 | 28,383,891 |
9. Redemption Fee:
Prior to February 28, 2017, the funds charged a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds on the Statement of Changes in Net Assets. Effective February 28, 2017, the funds no longer charge redemption fees. The redemption fees charged during the current and prior periods were as follows:
| | Current Period
(11/1/16-4/30/17) | Prior Period
(11/1/15-10/31/16) |
| Schwab Fundamental US Large Company Index Fund | $31,673 | $71,689 |
| Schwab Fundamental US Small Company Index Fund | 7,915 | 15,918 |
| Schwab Fundamental International Large Company Index Fund | 3,741 | 34,029 |
| Schwab Fundamental International Small Company Index Fund | 2,570 | 5,204 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 9,496 | 43,985 |
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Financial Notes, unaudited (continued)
10. Federal Income Taxes:
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2016, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
| Expiration Date | 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 |
| October 31, 2017 | $— | | $— | | $38,420,971 | | $— | | $— |
| October 31, 2018 | — | | — | | 20,948,477 | | — | | — |
| No expiration* | — | | — | | — | | 1,521,731 | | 60,003,237 |
| Total | $— | | $— | | $59,369,448 | | $1,521,731 | | $60,003,237 |
| * | As a result of the passage of the Regulated Investment Company Modernization Act of 2010, capital losses incurred after December 31, 2010 may now be carried forward indefinitely, but must retain the character of the original loss. |
As of October 31, 2016, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2016, the funds did not incur any interest or penalties.
11. Recent Regulatory Development:
In October 2016, the SEC adopted new rules and amended existing rules (together, final rules) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the funds' financial statements and related disclosures.
12. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
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Shareholder Vote Results (Unaudited)
A Special Meeting of Shareholders of Schwab Capital Trust (the “Trust”) was held on April 28, 2017, for the purpose of seeking shareholder approval to approve an Amended and Restated Investment Advisory and Administration Agreement (“Proposed Advisory Agreement”) between Charles Schwab Investment Management, Inc. (“CSIM”) and the Trust, on behalf of each of Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund and Schwab Fundamental International Small Company Index Fund, each fund voting separately. The number of votes necessary to conduct the Special Meeting for each fund and approve the proposal was obtained. The results of the shareholder vote are listed below:
Proposal – To approve the Proposed Advisory
Agreement on behalf of each of the following funds: | For | Withheld | Abstain |
| Schwab Fundamental US Large Company Index Fund | 180,036,897.808 | 791,824.989 | 1,509,491.470 |
| Schwab Fundamental US Small Company Index Fund | 72,347,405.868 | 112,785.401 | 272,641.626 |
| Schwab Fundamental International Large Company Index Fund | 78,264,624.831 | 170,858.701 | 2,052,881.691 |
| Schwab Fundamental International Small Company Index Fund | 21,631,351.238 | 174,374.621 | 252,501.143 |
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Investment Advisory Agreement Approval
The Investment Company Act of 1940 requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the Independent Trustees), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the investment advisory agreement between Schwab Capital Trust (the Trust) and Charles Schwab Investment Management, Inc. (CSIM) with respect to the existing funds in the Trust, including Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, Schwab Fundamental Emerging Markets Large Company Index Fund (each, a Fund and collectively, the Funds) (Current Advisory Agreement) with respect to each Fund at meetings held on May 9, 2016 and June 1, 2016, and the Board approved the renewal of the Current Advisory Agreement with respect to each Fund for an additional one-year term at the meeting held on June 1, 2016. The Board, including a majority of the Independent Trustees, also considered information specifically relating to its consideration of an amended and restated investment advisory agreement between the Trust and CSIM with respect to the Funds (Proposed Advisory Agreement), including a proposed unitary fee structure, with respect to each Fund, and approved the Proposed Advisory Agreement at a meeting held on January 18, 2017, subject to shareholder approval for Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund and Schwab Fundamental International Small Company Index Fund (Voting Funds). Shareholder approval was not required for Schwab Fundamental Emerging Markets Large Company Index Fund.
In considering whether to approve the Proposed Advisory Agreement, the Board considered and discussed a wide variety of materials provided by CSIM. With respect to the Proposed Advisory Agreement, CSIM discussed at length the rationale for its recommendations and also explained that the Proposed Advisory Agreement would need to be submitted to and approved by the shareholders of each Voting Fund, which would require a proxy solicitation and a special meeting of shareholders, the costs of which would be borne by CSIM. The Board also considered detailed information regarding the
expenses of similarly situated competitor funds provided by CSIM based on information prepared by a third party. The Board had the opportunity to discuss the Proposed Advisory Agreement at length with representatives of CSIM and with independent legal counsel, including considering information and representations from CSIM supporting a conclusion that the Proposed Advisory Agreement will not result in any reduction in the nature or level of services that are provided to the Funds by CSIM. The Board, including the Independent Trustees, determined that the information received and the basis for the renewal of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016 would remain the basis for the Board’s approval of the Proposed Advisory Agreement, as modified and updated by the consideration of performance information regarding the Funds received subsequent to those meeting and by the information contained in the materials received by the Board in connection with the proposed change in Fund fee structure and expenses as reflected in the Proposed Advisory Agreement.
The factors considered by the Board in approving the Proposed Advisory Agreement included:
| 1. | The nature, extent and quality of the services to be provided to the Funds under the Proposed Advisory Agreement, including the resources CSIM and its affiliates would be dedicating to the Funds; |
| 2. | Each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
| 3. | Each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds, exchange traded funds and other accounts; |
| 4. | The profitability of CSIM and its affiliates, including 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 Proposed Advisory Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. As part of its consideration of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, 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 had evaluated, among other things, CSIM’s experience, track record, compliance program, resources dedicated to hiring and retaining qualified personnel, and information security resources. The Trustees had also considered information provided by CSIM relating to each Fund’s portfolio management team, portfolio strategy and risk oversight structure and internal investment guidelines. The Trustees considered investments in CSIM’s mutual fund infrastructure,
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Schwab’s wide range of products, services and channel alternatives such as investment and research tools, internet access and an array of account features that benefit the Funds and certain of their shareholders. The Trustees had also considered Schwab’s reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that many of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board had 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 Current Advisory Agreement with respect to the Funds. When considering the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Board acknowledged these previous considerations and took into account that, although the net compensation flowing to CSIM and its affiliates is expected to decrease, CSIM had undertaken that it would not reduce the nature, extent or quality of services provided under the Proposed Advisory Agreement as compared to the Current Advisory Agreement. In this regard, the Board noted that, in fact, under the Proposed Advisory Agreement, CSIM would be obligated to bear certain additional expenses and provide certain additional services to the Funds that CSIM is not currently required to bear and provide under the Current Advisory Agreement. The Board sought and received confirmation from CSIM and its affiliates that they are prepared to commit the resources necessary for the provision of services and bearing of expenses under the Proposed Advisory Agreement, notwithstanding the decrease in revenue to CSIM and its affiliates that would result (at current Fund asset levels) under the Proposed Advisory Agreement.
Fund Performance. In considering the renewal of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, the Board considered Fund performance. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered the risk profile for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees had further considered the level of Fund performance in the context of their review of Fund expenses and adviser profitability discussed below and had also noted that performance is reviewed throughout the year by a designated committee of the Board and by the Board. Following such evaluation the Board had concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Current Advisory Agreement with respect to the Funds. When considering the approval of the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Board took into account these considerations as well as the performance information relating to the Funds that CSIM
had provided and the Board had reviewed subsequent to the approval of the Current Advisory Agreement.
Fund Expenses. As part of its consideration of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, the Trustees considered the rate of compensation called for by the Current Advisory Agreement and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent provider of investment company data. The Trustees considered the effects of CSIM’s and Schwab’s practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees had also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund or until the Board authorizes the termination of CSIM’s contractual commitment. The Trustees had also considered fees charged by CSIM to other mutual funds and to other types of accounts, such as exchange-traded funds and separately managed 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, and any differences in the nature and scope of the services CSIM provides to these other accounts, as well as differences in the market for these types of accounts. Following such evaluation, the Board had concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Current Advisory Agreement with respect to the Funds. In considering the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Board took into account these factors as well as that: (i) the structure of the proposed management fee would change from a graduated investment management fee schedule to a flat rate management fee; (ii) CSIM will remove the shareholder servicing fee currently paid by each Fund with such removal being contingent upon shareholders of each Fund approving the Proposed Advisory Agreement, as applicable; (iii) the expected total operating expenses for each Fund under the Proposed Advisory Agreement would be lower than what the total operating expenses could reach at any asset level under the current fee structure with the Current Advisory Agreement and the shareholder servicing fee; (iv) the fees payable by CSIM under the Proposed Advisory Agreement for each Fund would include some Fund operating costs that are currently paid by the Fund and outside the expense cap for the Fund, such as interest expenses; (v) the proposed management fee for each Fund will remain competitive when compared to similarly situated competitor funds; and (vi) CSIM will bear the costs associated with obtaining shareholder approval of the Proposed Advisory Agreement for each Voting Fund.
Profitability. In their consideration of the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly, and reviewed
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
profitability on a pre-tax basis, both with and without regard to distribution expenses. In this connection, the Trustees had reviewed management’s profitability analyses and methodology, together with certain commentary thereon from an independent accounting firm. The Trustees had also reviewed profitability of CSIM relating to the Schwab fund complex as a whole, noting the benefit to Fund shareholders of being part of the Schwab fund complex, including the allocations of certain fixed costs across other funds in the complex. The Trustees had 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 Current Advisory Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board had concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Current Advisory Agreement with respect to the Funds. As part of its consideration of the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Trustees took into account these considerations as well as additional information relating to the costs and net revenue reductions to CSIM and its affiliates in connection with implementing the proposed unitary fee structure under the Proposed Advisory Agreement. In particular, the Board considered, among other things, the additional expenses to be borne by CSIM under the Proposed Advisory Agreement, the elimination of the shareholder servicing fees and the costs associated with soliciting shareholder approval of the Proposed Advisory Agreement.
Economies of Scale. In considering the Current Advisory Agreement at the meetings held on May 9, 2016 and June 1, 2016, the Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated management fee schedule or other means, including any fee waivers or expense caps by
CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when Fund assets were relatively small through their contractual expense waivers. The Trustees had also considered the existing contractual investment management fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board had concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale. In considering the Proposed Advisory Agreement at the meeting held on January 18, 2017, the Board took these items into consideration, but noted that the structure of the management fee would change from a graduated investment management fee schedule to a flat rate management fee. The Board concluded that, although each Fund’s unitary fee structure under the Proposed Advisory Agreement would not have breakpoints, each Fund would benefit from the fact that the expected total operating expenses under the Proposed Advisory Agreement for the Fund would be lower than what the total operating expenses could reach at any asset level under the current fee structure with the Current Advisory Agreement and the shareholder servicing fee.
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 Proposed Advisory Agreement with respect to the Funds, subject to shareholder approval, and concluded that the compensation under the Proposed Advisory Agreement with respect to the Funds is fair and reasonable in light of the services that CSIM will provide and the expenses it will bear thereunder and such other matters as the Trustees considered to be relevant in the exercise of their reasonable judgment.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 110 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| 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. | 110 | 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 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). | 110 | 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 – Apr. 2012). | 110 | None |
David L. Mahoney
1954
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 110 | Director, Symantec Corporation (2003 – present)
Director, Corcept Therapeutics Incorporated (2004 – present)
Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
| 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 |
Kiran M. Patel
1948
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus 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). | 110 | Director, KLA-Tencor Corporation (2008 – present) |
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). | 110 | 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 and Laudus 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). | 110 | 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 since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 110 | 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 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). | 110 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present)
Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
| 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 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); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 110 | Director, The Charles Schwab Corporation (2008 – present) |
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) (Mar. 2007 – Aug. 2010). | 110 | 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 (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 110 | 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 A. 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 and Laudus 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) (Mar. 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 and Laudus 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). |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
| 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 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 (Apr. 2005 – present). |
Omar Aguilar
1970
Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies
(Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 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 – Apr. 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 and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 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 (Apr. 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 and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 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 (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 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 and Laudus 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. |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
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.
Bloomberg Barclays U.S. Aggregate Bond Index An index that represents securities that are SEC registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. The index excludes certain types of securities, including state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds.
Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $250 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
Fundamental Developed ex-U.S. Large Company Spliced Index An internally calculated index comprised of the FTSE RAFI Developed ex-US 1000 Index from inception of the Schwab Fundamental International Large Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI Developed ex US Large Company Index (Net) from October 19, 2012 forward. The FTSE RAFI Developed ex-US 1000 Index is composed of the largest 1,000 listed companies incorporated outside the United States, ranked by four fundamental financial measures of size, sales, cash flows, book value and dividends. The index is rebalanced and reconstituted annually.
Fundamental Developed ex-U.S. Small Company Spliced Index An internally calculated index comprised of the FTSE RAFI Developed ex U.S. Mid Small 1500 Index from inception of the Schwab Fundamental International Small Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI Developed ex US Small Company Index (Net) from October 19, 2012 forward. The FTSE RAFI Developed ex U.S. Mid Small 1500 Index is designed to track the performance of small and mid-capitalization equities of companies domiciled in developed international markets (excluding the U.S.), selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.
Fundamental Emerging Markets Large Company Spliced Index An internally calculated index comprised of the FTSE RAFI Emerging Index from inception of the Schwab Fundamental Emerging Markets Large Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI Emerging Markets Large Company Index (Net) from October 19, 2012 forward. The FTSE RAFI Emerging Index is designed to track the performance of the largest emerging market equities, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.
Fundamental U.S. Large Company Spliced Index An internally calculated index comprised of the FTSE RAFI US 1000 Index from inception of the Schwab Fundamental US Large Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI US Large Company Index from October 19, 2012 forward. FTSE RAFI US 1000 Index is designed to track the performance of the largest U.S. equities, selected based on the following four fundamental measures of firm size, book value, income, sales and dividends. The 1,000 equities with the highest fundamental strength are weighted by their fundamental scale. The fundamentally weighted portfolio is rebalanced and reconstituted annually.
Fundamental U.S. Small Company Spliced Index An internally calculated index comprised of the FTSE RAFI US Mid Small 1500 Index from inception of the Schwab Fundamental US Small Company Index Fund until the close of business on October 18, 2012 and the Russell RAFI US Small Company Index from October 19, 2012 forward. The FTSE RAFI US Mid Small 1500 Index is composed of approximately 1,500 listed small and medium sized companies incorporated in the United States, ranked by fundamental value. The fundamentally weighted portfolio is rebalanced and reconstituted annually.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
restricted and illiquid securities Restricted securities are securities that are subject to legal restrictions on their sale. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933 (the 1933 Act), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. Illiquid securities generally are any securities that cannot be disposed of promptly and in the ordinary course of business at approximately the amount at which a fund has valued the instruments. The liquidity of a fund’s investments is monitored under the supervision and direction of the Board. Investments currently not considered liquid include repurchase agreements not maturing within seven days and certain restricted securities.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell RAFI Developed ex US Large Company Index (Net) An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Developed ex US Small Company Index (Net) An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Emerging Markets Large Company Index (Net) An index that ranks companies in the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Emerging Markets Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Emerging Markets Index measures the performance of the investable securities in emerging countries globally.
Russell RAFI US Large Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell RAFI US Small Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
S&P Developed ex-U.S. Small Cap Index (Net) An Index composed of the stocks representing the lowest 15% of float-adjusted market cap in each developed market country, excluding the U.S. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Index Funds
Charles Schwab Investment Management
As one of the nation’s largest asset managers, our goal is to provide investors with a diverse selection of foundational products that aim to deliver consistent performance at a competitive cost. The list below shows all currently available Schwab Funds.
Investors should carefully consider information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-877-824-5615 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Funds’ website at www.csimfunds.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.
Stock Funds
Schwab Core Equity Fund™
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity 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®
Asset Allocation Funds
Schwab Balanced Fund™
Schwab MarketTrack All Equity Portfolio™
Schwab MarketTrack Growth Portfolio™
Schwab MarketTrack Balanced Portfolio™
Schwab MarketTrack Conservative Portfolio™
Schwab Target Funds
Schwab Target Index Funds
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Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Some are 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®.
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
1-877-824-5615
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| 1 | You could lose money by investing in a money market fund. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The money market fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. |
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Semiannual Report | April 30, 2017
Laudus MarketMasters Funds™
Laudus Small-Cap MarketMasters Fund™
Laudus International MarketMasters Fund™
This page is intentionally left blank.
Two distinct Funds, each combining the expertise of leading investment managers with CSIM’s overall supervision.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS), which was developed by, and is the exclusive property of, MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Schwab. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
| Total Return for the 6 Months Ended April 30, 2017 |
| Laudus Small-Cap MarketMasters Fund | |
| Investor Shares (Ticker Symbol: SWOSX) | 20.03% 1 |
| Select Shares® (Ticker Symbol: SWMSX) | 20.08% |
| Russell 2000® Index | 18.37% |
| Fund Category: Morningstar Small Growth | 16.95% |
| Performance Details | pages 8-9 |
| |
| Laudus International MarketMasters Fund | |
| Investor Shares2 (Ticker Symbol: SWOIX) | 12.22% |
| Select Shares®2 (Ticker Symbol: SWMIX) | 12.32% |
| MSCI EAFE® Index (Net)3 | 11.47% |
| Fund Category: Morningstar Foreign Large Growth | 10.59% |
| Performance Details | pages 10-11 |
| |
| Minimum Initial Investment4 | |
| Investor Shares | $ 100 |
| Select Shares® | $ 50,000 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
Small-company stocks are subject to greater volatility than other asset categories.
Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
| 1 | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
| 2 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations. See financial note 2 for more information. |
| 3 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 4 | Please see the funds’ prospectus for further detail and eligibility requirements. |
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.
Dear Shareholder,
At Charles Schwab Investment Management, we believe strategy is just as important as results. The products we provide our investors are designed to deliver steady, reliable, long-term performance while making investing more transparent and less complicated. And that takes finding the right strategy for each fund we offer, whether we develop it in-house or partner with a third party manager. As pleased as we are with the performance of the Laudus MarketMasters Funds over the reporting period, we’re just as proud of the investment strategy behind it.
Since our last shareholder report, stock prices rallied in both the U.S. and abroad. The six-month reporting period ended April 30, 2017 was marked by steady gains for stocks, fueled by improving economic fundamentals and corporate earnings, in addition to investor optimism around tax reform and other policy proposals promised by the new U.S. administration.
Even when the market is rising on a consistent basis, we believe there is an important role for actively managed funds in an investor’s diversified portfolio. That’s because active funds typically offer the potential for investors to outperform the broader market. For example, during the reporting period, the Laudus Small-Cap MarketMasters Fund’s Investor Class returned 20.0%,
Asset Class Performance Comparison % returns during the six months ended 4/30/2017
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
From the President (continued)
“ As pleased as we are with the performance of the Laudus MarketMasters Funds over the reporting period, we’re just as proud of the investment strategy behind it.”
outperforming the 18.4% return of its benchmark, the Russell 2000® Index, as well as the S&P 500® Index’s 13.3% gain. Meanwhile, the Laudus International MarketMasters Fund’s Investor Class returned 12.2%, outperforming the 11.5% rise of the MSCI EAFE® Index (Net), a wide measure of the performance of international stocks.
Such outperformance can be a reflection of a variety of factors, including simple exposure to groups of stocks that respond differently to prevailing conditions, or the investing skill of the manager. Our sub-advisor oversight team is focused on identifying and selecting institutional money managers with proven experience delivering for investors. They combine handpicked sub-advisors with complementary strategies to produce diversification across small-cap and international markets. One of the qualities the team looks for is consistency in performance, because while short-term outperformance is always welcome, we believe that consistent performance over longer time periods is more important.
Along these lines, I’m pleased to report that the Laudus International MarketMasters Fund was recently named by Lipper as best-in-class among 206 funds in the International Multi-Cap Growth Fund category for the 10-year period ended November 30, 2016.1 It’s an honor to be recognized for this consistent performance because it reflects our commitment to delivering strong investment results for our investors over the long term—a commitment that drives us every day at Charles Schwab Investment Management.
Thank you for investing with Charles Schwab Investment Management, and for trusting us to help you achieve your financial goals. For more information about the Laudus MarketMasters Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.csimfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
| 1 | The Thomson Reuters Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. The Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the Lipper Fund Award. For more information, see www.lipperfundawards.com. Although Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Lipper. |
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
The Investment Environment
Over the six-month reporting period ended April 30, 2017, both U.S. and international equity markets generated solid returns. The current bull market for U.S. stocks entered its eighth year, with small-cap stocks in particular benefitting from expectations of potential policy changes from the new U.S. administration. Meanwhile, improving global growth and continued accommodative central bank policies supported the performance of many international equities. In this environment, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 13.32%, while the Russell 2000® Index, a U.S. small-cap company performance measure, returned 18.37%. Internationally, the MSCI EAFE® Index (Net), a broad measure of international developed equity performance, returned 11.47% for the six-month reporting period.
Market volatility generally eased over the reporting period, though fluctuations tied to elections in both the U.S. and abroad occurred during the six months. In the U.S., election-related volatility picked up in the weeks leading up to the U.S. presidential election in November and continued after Election Day. U.S. equity futures dropped sharply soon after the election results were announced, then rebounded almost immediately the following day and generally maintained an upward trajectory throughout most of the reporting period. This rally was especially noticeable among small-cap stocks, and was fueled by investor expectations for reflationary policies from the Donald Trump administration, including increased fiscal spending, tax reform, and reduced financial regulation. Meanwhile, political uncertainty in the eurozone, including elections in the Netherlands and France, also contributed to overseas market volatility. In mid-march, center-right Dutch Prime Minister Mark Rutte beat far-right candidate Geert Wilders, while the race between front-runners Emmanuel Macron and Marine Le Pen in France was closer than many expected in the first round of voting. (Macron was elected to the French presidency in the run-off election the week following the end of the reporting period.)
The Federal Reserve (Fed) and the People’s Bank of China (PBOC) tightened monetary policies over the reporting period, while many other central banks maintained or increased accommodative policies. With improvements in several key U.S. economic measures and an uptick in inflation, the Fed raised the federal funds rate twice over the reporting period in December 2016 and March 2017. Market responses to these changes were muted as both increases were largely already priced into global equity markets. In China, prior accommodative measures led to credit expanding at twice the rate of economic growth, prompting the PBOC to take steps to address this imbalance and reduce long-term financial risk. Meanwhile, the European Central Bank extended its asset purchase program to at least December 2017 and announced it was loosening the restrictions on the types of bonds it is allowed to purchase. In Asia, the Bank of Japan maintained negative interest rates, quantitative easing, and yield curve management over the six-month reporting period. The positive performance of many international equities and improvement in the global economic outlook over the reporting period suggested that these policies were achieving their intended results, effectively stimulating economic growth in both the eurozone and in Japan.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
The Investment Environment (continued)
Over the six-month reporting period, U.S. economic data remained relatively steady compared to prior reporting periods. However, the spread between “hard” data, such as quarterly gross domestic product (GDP) numbers, and “soft” data, like consumer confidence and sentiment indexes, widened over the reporting period. Nonfarm payroll numbers were generally in line with expectations through February, fell noticeably in March, and then rebounded April. GDP dropped to an annual rate of 2.1% in the fourth quarter of 2016 and fell even further in the first quarter of 2017, indicating a moderate growth outlook. In contrast, consumer confidence rose after the November election of President Trump through the end of the reporting period, in March reaching its highest level since December 2000. According to the National Federation of Independent Business (NFIB) Small Business Economic Trends Report, small business optimism also surged after Election Day and throughout the reporting period.
Overall global economic growth generally improved over the six-month reporting period. Eurozone economic activity picked up in both the fourth quarter of 2016 and the first quarter of 2017, and the entire eurozone bloc exited deflation by the end of January 2017. Meanwhile, the United Kingdom economy performed better than expected in the months following the decision in June to leave the European Union (Brexit) as progress toward an exit plan was made. In Japan, economic growth accelerated and consumer prices fell at a slower pace, with inflation on track to hit the target of 2% in the next two years, while rising inflation and decreasing lending costs in China contributed to a relatively stable economy over the reporting period.
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
 | Omar Aguilar, Ph.D., Senior Vice President and Chief Investment Officer of Equities and Multi-Asset Strategies, has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2011, Mr. Aguilar was with Financial Engines, where he was responsible for managing assets from leading retirement plan sponsors in the defined contribution market. Prior to joining Financial Engines in 2009, Mr. Aguilar was the head of quantitative equity for ING Investment Management, where he was responsible for building and developing the firm’s quantitative equity group. He joined ING in 2004 from Lehman Brothers, where he served as the head of quantitative research for its alternative investment management business. Prior to that, he was a director of quantitative research and portfolio manager with Merrill Lynch Investment Management and Bankers Trust. |
 | Jane Shi, Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2011, Ms. Shi was a vice president investment analyst at Bailard, Inc. since 2006, where she developed quantitative models for domestic equity and tactical asset allocation strategies, and was also responsible for performance measurement and attribution. Prior to that, she was a treasury analyst at Sun Microsystems, Inc. |
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Investor Shares (9/16/97) | 20.03% 2 | 21.98% | 10.11% | 5.14% |
| Select Shares® (6/9/04) | 20.08% | 22.15% | 10.27% | 5.29% |
| Russell 2000® Index | 18.37% | 25.63% | 12.95% | 7.05% |
| Fund Category: Morningstar Small Growth3 | 16.95% | 22.87% | 11.32% | 7.23% |
| Fund Expense Ratios4: Investor Shares: Net 1.35%; Gross 1.56% / Select Shares: Net 1.20%; Gross 1.52% |
Investment Managers and Allocations5
| Investment Managers | Investment Style | % of
Net Assets |
| Wellington Management Company, LLP | Small-Cap Value | 38.1% |
| Voya Investment Management Co. LLC | Small-Cap Growth | 37.6% |
| The Boston Company Asset Management, LLC | Small-/Mid-Cap Core | 20.7% |
| Mellon Capital Management Corp. | Small-Cap Blend | 0.0% 6 |
| Cash & other assets | | 3.6% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Total return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual and semiannual reports. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
| 5 | For more information about each of the investment manager’s investment styles, refer to the fund’s prospectus. |
| 6 | Less than 0.05%. |
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 274 |
| Weighted Average Market Cap (millions) | $2,701 |
| Price/Earnings Ratio (P/E) | 23.8 |
| Price/Book Ratio (P/B) | 2.4 |
| Portfolio Turnover Rate1 | 69% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S& P and MSCI.
Small-company stocks are subject to greater volatility than many other asset classes.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Investor Shares (10/16/96) | 12.22% | 14.82% | 7.55% | 3.46% |
| Select Shares® (4/2/04) | 12.32% | 14.98% | 7.72% | 3.61% |
| MSCI EAFE® Index (Net)2 | 11.47% | 11.29% | 6.78% | 0.87% |
| MSCI EAFE® Index (Gross) | 11.73% | 11.83% | 7.27% | 1.34% |
| Fund Category: Morningstar Foreign Large Growth3 | 10.59% | 11.46% | 6.38% | 1.87% |
| Fund Expense Ratios4: Investor Shares: Net 1.40%; Gross 1.61% / Select Shares: Net 1.25%; Gross 1.54% |
Investment Managers and Allocations5
| Investment Managers | Investment Style | % of
Net Assets |
| American Century Investment Management, Inc. | Investment Small-Cap Growth | 25.3% |
| Harris Associates L.P. | International Large-Cap Value | 25.6% |
| William Blair Investment Management, LLC | International Multi-Cap Growth | 23.5% |
| Mondrian Investment Partners Limited | International Small-Cap Value | 21.0% |
| Mellon Capital Management Corp. | International Blend | 3.4% |
| Cash & other assets | | 1.2% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
The fund’s performance relative to the index may be affected by fair-value pricing. See financial note 2 for more information.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 3 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
| 5 | For more information about each of the investment manager’s investment styles, refer to the fund’s prospectus. |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 1,215 |
| Weighted Average Market Cap (millions) | $28,065 |
| Price/Earnings Ratio (P/E) | 18.9 |
| Price/Book Ratio (P/B) | 2.2 |
| Portfolio Turnover Rate1 | 39% |
Sector Weightings % of Investments
Top Equity Holdings % of Net Assets2
Top Country Weightings % of Investments
Portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning November 1, 2016 and held through April 30, 2017.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, or any non-routine expenses, such as proxy fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs or non-routine expenses were included, your costs would have been higher.
| | Expense Ratio
(Annualized)1 | Beginning
Account Value
at 11/1/16 | Ending
Account Value
(Net of Expenses)
at 4/30/17 | Expenses Paid
During Period
11/1/16-4/30/172 |
| Laudus Small-Cap MarketMasters Fund | | | | |
| Investor Shares | | | | |
| Actual Return | 1.35% | $1,000.00 | $1,199.70 | $7.36 |
| Hypothetical 5% Return | 1.35% | $1,000.00 | $1,018.11 | $6.76 |
| Select Shares | | | | |
| Actual Return | 1.20% | $1,000.00 | $1,200.80 | $6.55 |
| Hypothetical 5% Return | 1.20% | $1,000.00 | $1,018.85 | $6.01 |
| Laudus International MarketMasters Fund | | | | |
| Investor Shares | | | | |
| Actual Return | 1.40% | $1,000.00 | $1,122.20 | $7.37 |
| Hypothetical 5% Return | 1.40% | $1,000.00 | $1,017.86 | $7.00 |
| Select Shares | | | | |
| Actual Return | 1.25% | $1,000.00 | $1,123.20 | $6.58 |
| Hypothetical 5% Return | 1.25% | $1,000.00 | $1,018.60 | $6.26 |
| 1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the 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 the 181 days of the period, and divided by the 365 days of the fiscal year. |
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Financial Statements
Financial Highlights
| Investor Shares | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $16.22 | $17.42 | $18.02 | $17.28 | $13.14 | $11.99 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss)1 | 0.03 | 0.01 | (0.05) | (0.05) | (0.02) | (0.10) |
| Net realized and unrealized gains (losses) | 3.21 | (0.15) | (0.17) 2 | 0.79 | 4.16 | 1.25 |
| Total from investment operations | 3.24 | (0.14) | (0.22) | 0.74 | 4.14 | 1.15 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.03) | — | (0.03) | — | — | — |
| Distributions from net realized gains | (0.19) | (1.06) | (0.35) | — | — | — |
| Total distributions | (0.22) | (1.06) | (0.38) | — | — | — |
| Net asset value at end of period | $19.24 | $16.22 | $17.42 | $18.02 | $17.28 | $13.14 |
| Total return | 19.97% 3 | (0.64%) | (1.18%) | 4.28% | 31.51% | 9.59% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 1.35% 4 | 1.35% | 1.35% | 1.35% | 1.35% | 1.42% 5 |
| Gross operating expenses | 1.54% 4 | 1.56% | 1.55% | 1.56% | 1.59% | 1.59% |
| Net investment income (loss) | 0.37% 4 | 0.04% | (0.26%) | (0.26%) | (0.16%) | (0.79%) |
| Portfolio turnover rate | 69% 3 | 85% | 51% | 79% | 97% | 144% |
| Net assets, end of period (x 1,000,000) | $64 | $55 | $62 | $70 | $76 | $65 |
| |
| Select Shares | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $16.55 | $17.73 | $18.33 | $17.56 | $13.33 | $12.14 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss)1 | 0.05 | 0.03 | (0.02) | (0.02) | (0.00) 6 | (0.08) |
| Net realized and unrealized gains (losses) | 3.27 | (0.15) | (0.17) 2 | 0.79 | 4.23 | 1.27 |
| Total from investment operations | 3.32 | (0.12) | (0.19) | 0.77 | 4.23 | 1.19 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.05) | — | (0.06) | — | — | — |
| Distributions from net realized gains | (0.19) | (1.06) | (0.35) | — | — | — |
| Total distributions | (0.24) | (1.06) | (0.41) | — | — | — |
| Net asset value at end of period | $19.63 | $16.55 | $17.73 | $18.33 | $17.56 | $13.33 |
| Total return | 20.08% 3 | (0.50%) | (0.99%) | 4.39% | 31.73% | 9.80% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 1.20% 4 | 1.20% | 1.20% | 1.20% | 1.20% | 1.27% 5 |
| Gross operating expenses | 1.50% 4 | 1.52% | 1.51% | 1.51% | 1.53% | 1.51% |
| Net investment income (loss) | 0.52% 4 | 0.19% | (0.09%) | (0.13%) | (0.03%) | (0.60%) |
| Portfolio turnover rate | 69% 3 | 85% | 51% | 79% | 97% | 144% |
| Net assets, end of period (x 1,000,000) | $108 | $98 | $107 | $122 | $113 | $88 |
1
Calculated based on the average shares outstanding during the period.
2
The per share amount does not accord with the change in aggregate gains and losses in securities during the period because of the timing of sales and repurchases of fund shares in relation to fluctuating market values.
3
Not annualized.
4
Annualized.
5
Effective June 6, 2012, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/12 is a blended ratio.
6
Per-share amount was less than $0.005.
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/laudusfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 92.9% | Common Stock | 140,224,668 | 159,555,797 |
| 7.9% | Other Investment Companies | 13,417,772 | 13,595,342 |
| 0.0% | Rights | 2,466 | 2,466 |
| 100.8% | Total Investments | 153,644,906 | 173,153,605 |
| (0.8%) | Other Assets and Liabilities, Net | | (1,301,830) |
| 100.0% | Net Assets | | 171,851,775 |
| Security | Number
of Shares | Value ($) |
| Common Stock 92.9% of net assets |
| |
| Automobiles & Components 0.6% |
| Dana, Inc. | 24,353 | 472,935 |
| Visteon Corp. * | 5,431 | 559,122 |
| | | 1,032,057 |
| |
| Banks 10.0% |
| 1st Source Corp. | 12,040 | 581,652 |
| Banc of California, Inc. | 22,920 | 497,364 |
| Bank of the Ozarks, Inc. | 2,193 | 104,102 |
| Banner Corp. | 12,481 | 688,951 |
| FCB Financial Holdings, Inc., Class A * | 8,300 | 392,175 |
| First Busey Corp. | 30,248 | 905,928 |
| First Midwest Bancorp, Inc. | 69,939 | 1,588,315 |
| Flushing Financial Corp. | 32,145 | 947,635 |
| Great Western Bancorp, Inc. | 39,842 | 1,641,490 |
| Hancock Holding Co. | 32,435 | 1,514,715 |
| Home BancShares, Inc. | 8,415 | 214,162 |
| Huntington Bancshares, Inc. | 39,848 | 512,445 |
| International Bancshares Corp. | 41,198 | 1,540,805 |
| KeyCorp | 41,760 | 761,702 |
| MB Financial, Inc. | 30,945 | 1,315,472 |
| MGIC Investment Corp. * | 113,176 | 1,192,875 |
| Northwest Bancshares, Inc. | 85,859 | 1,385,764 |
| Pinnacle Financial Partners, Inc. | 3,815 | 244,160 |
| SVB Financial Group * | 3,347 | 588,871 |
| Texas Capital Bancshares, Inc. * | 6,635 | 504,924 |
| | | 17,123,507 |
| |
| Capital Goods 11.2% |
| Actuant Corp., Class A | 18,719 | 511,029 |
| Albany International Corp., Class A | 39,702 | 1,935,472 |
| Babcock & Wilcox Enterprises, Inc. * | 36,943 | 346,156 |
| Beacon Roofing Supply, Inc. * | 10,265 | 508,836 |
| CIRCOR International, Inc. | 21,690 | 1,446,940 |
| Cubic Corp. | 29,384 | 1,525,030 |
| EnPro Industries, Inc. | 7,333 | 518,076 |
| ESCO Technologies, Inc. | 27,634 | 1,626,261 |
| GATX Corp. | 18,311 | 1,096,829 |
| HD Supply Holdings, Inc. * | 4,287 | 172,766 |
| Hubbell, Inc. | 3,962 | 448,221 |
| Lindsay Corp. | 6,916 | 600,724 |
| Luxfer Holdings plc ADR | 46,311 | 541,376 |
| Mueller Industries, Inc. | 51,362 | 1,645,638 |
| Security | Number
of Shares | Value ($) |
| Primoris Services Corp. | 35,995 | 826,805 |
| Regal Beloit Corp. | 6,411 | 505,507 |
| Simpson Manufacturing Co., Inc. | 11,974 | 499,436 |
| Snap-on, Inc. | 1,076 | 180,262 |
| Teledyne Technologies, Inc. * | 4,275 | 576,398 |
| Tennant Co. | 900 | 65,925 |
| The Toro Co. | 4,393 | 285,194 |
| Thermon Group Holdings, Inc. * | 47,002 | 963,541 |
| TriMas Corp. * | 62,942 | 1,444,519 |
| Watts Water Technologies, Inc., Class A | 8,136 | 506,059 |
| Woodward, Inc. | 8,036 | 543,796 |
| | | 19,320,796 |
| |
| Commercial & Professional Services 6.6% |
| ACCO Brands Corp. * | 75,822 | 1,080,464 |
| Essendant, Inc. | 39,404 | 658,047 |
| Exponent, Inc. | 7,453 | 455,751 |
| FTI Consulting, Inc. * | 35,593 | 1,231,162 |
| Healthcare Services Group, Inc. | 11,285 | 518,094 |
| Huron Consulting Group, Inc. * | 16,996 | 756,322 |
| ICF International, Inc. * | 5,800 | 256,070 |
| Knoll, Inc. | 23,240 | 556,830 |
| Korn/Ferry International | 14,581 | 472,424 |
| Matthews International Corp., Class A | 22,051 | 1,511,596 |
| Mistras Group, Inc. * | 31,660 | 712,350 |
| SP Plus Corp. * | 38,490 | 1,325,981 |
| Steelcase, Inc., Class A | 61,173 | 1,043,000 |
| The Advisory Board Co. * | 6,370 | 325,507 |
| TrueBlue, Inc. * | 17,012 | 465,278 |
| | | 11,368,876 |
| |
| Consumer Durables & Apparel 1.8% |
| CalAtlantic Group, Inc. | 8,780 | 318,012 |
| G-III Apparel Group Ltd. * | 39,739 | 941,814 |
| Helen of Troy Ltd. * | 4,800 | 451,200 |
| Nautilus, Inc. * | 19,030 | 346,346 |
| TRI Pointe Group, Inc. * | 43,740 | 544,563 |
| Universal Electronics, Inc. * | 8,012 | 555,232 |
| | | 3,157,167 |
| |
| Consumer Services 3.3% |
| Boyd Gaming Corp. * | 28,775 | 652,617 |
| Bright Horizons Family Solutions, Inc. * | 10,997 | 837,092 |
| ClubCorp Holdings, Inc. | 24,447 | 328,812 |
| Extended Stay America, Inc. | 27,623 | 481,745 |
| Jack in the Box, Inc. | 7,435 | 758,147 |
| Penn National Gaming, Inc. * | 25,399 | 469,374 |
| Planet Fitness, Inc., Class A | 41,028 | 853,382 |
| Sotheby's * | 11,310 | 535,642 |
| The Cheesecake Factory, Inc. | 11,120 | 713,459 |
| | | 5,630,270 |
| |
| Diversified Financials 3.2% |
| E*TRADE Financial Corp. * | 13,220 | 456,751 |
| Evercore Partners, Inc., Class A | 3,651 | 269,261 |
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| FNFV Group * | 21,454 | 293,920 |
| Green Dot Corp., Class A * | 11,366 | 389,740 |
| Houlihan Lokey, Inc. | 11,334 | 380,142 |
| Janus Capital Group, Inc. | 33,463 | 457,105 |
| Ladder Capital Corp. | 1 | 15 |
| Leucadia National Corp. | 25,731 | 653,310 |
| Raymond James Financial, Inc. | 6,172 | 459,937 |
| SLM Corp. * | 102,186 | 1,281,412 |
| Solar Capital Ltd. | 25,570 | 583,252 |
| Virtu Financial, Inc., Class A | 19,714 | 303,596 |
| | | 5,528,441 |
| |
| Energy 2.7% |
| Arch Coal, Inc., Class A * | 7,744 | 543,939 |
| Carrizo Oil & Gas, Inc. * | 14,766 | 371,365 |
| Dorian LPG Ltd. * | 41,230 | 374,781 |
| Dril-Quip, Inc. * | 3,573 | 184,188 |
| Era Group, Inc. * | 27,336 | 347,441 |
| Resolute Energy Corp. * | 12,590 | 471,495 |
| Scorpio Tankers, Inc. | 159,687 | 702,623 |
| SEACOR Holdings, Inc. * | 14,794 | 971,374 |
| Tesco Corp. * | 30,200 | 197,810 |
| Unit Corp. * | 10,072 | 216,447 |
| US Silica Holdings, Inc. | 6,000 | 249,000 |
| | | 4,630,463 |
| |
| Food & Staples Retailing 0.7% |
| Smart & Final Stores, Inc. * | 83,880 | 989,784 |
| U.S. Foods Holding Corp. * | 5,138 | 144,892 |
| | | 1,134,676 |
| |
| Food, Beverage & Tobacco 0.5% |
| Blue Buffalo Pet Products, Inc. * | 20,750 | 511,487 |
| Vector Group Ltd. | 14,768 | 320,761 |
| | | 832,248 |
| |
| Health Care Equipment & Services 6.5% |
| Allscripts Healthcare Solutions, Inc. * | 87,075 | 1,042,288 |
| Amedisys, Inc. * | 11,460 | 621,132 |
| Brookdale Senior Living, Inc. * | 16,413 | 213,205 |
| Chemed Corp. | 2,670 | 537,685 |
| CorVel Corp. * | 14,266 | 634,837 |
| DexCom, Inc. * | 6,535 | 509,469 |
| Haemonetics Corp. * | 26,888 | 1,126,069 |
| HealthEquity, Inc. * | 12,010 | 546,695 |
| HealthSouth Corp. | 18,542 | 869,620 |
| Hill-Rom Holdings, Inc. | 6,089 | 460,572 |
| ICU Medical, Inc. * | 6,027 | 926,953 |
| Masimo Corp. * | 2,694 | 276,781 |
| Merit Medical Systems, Inc. * | 20,602 | 694,287 |
| Natus Medical, Inc. * | 28,280 | 989,800 |
| Neogen Corp * | 1,335 | 83,210 |
| NuVasive, Inc. * | 6,819 | 494,446 |
| Omnicell, Inc. * | 7,786 | 322,340 |
| Owens & Minor, Inc. | 11,020 | 381,843 |
| Select Medical Holdings Corp. * | 28,029 | 385,399 |
| | | 11,116,631 |
| |
| Household & Personal Products 0.2% |
| Avon Products, Inc. * | 72,625 | 352,231 |
| |
| Security | Number
of Shares | Value ($) |
| Insurance 0.7% |
| Kemper Corp. | 17,580 | 691,773 |
| Primerica, Inc. | 4,525 | 379,195 |
| State National Cos., Inc. | 13,791 | 202,314 |
| | | 1,273,282 |
| |
| Materials 6.7% |
| Boise Cascade Co. * | 20,523 | 625,951 |
| Commercial Metals Co. | 22,739 | 423,855 |
| Deltic Timber Corp. | 14,753 | 1,141,440 |
| Ferroglobe Representation & Warranty Insurance *(b) | 1,153 | — |
| Greif, Inc., Class A | 32,340 | 1,895,771 |
| H.B. Fuller Co. | 9,674 | 511,077 |
| Hecla Mining Co. | 52,119 | 284,049 |
| KapStone Paper & Packaging Corp. | 19,545 | 412,204 |
| Methanex Corp. | 19,279 | 884,906 |
| Minerals Technologies, Inc. | 7,152 | 562,862 |
| Multi Packaging Solutions International Ltd. * | 34,680 | 622,506 |
| Neenah Paper, Inc. | 6,480 | 507,708 |
| Packaging Corp. of America | 4,894 | 483,429 |
| PolyOne Corp. | 10,983 | 430,643 |
| Sensient Technologies Corp. | 18,536 | 1,516,245 |
| The Mosaic Co. | 10,689 | 287,855 |
| US Concrete, Inc. * | 4,355 | 270,010 |
| Valvoline, Inc. | 13,333 | 296,659 |
| Worthington Industries, Inc. | 9,469 | 411,902 |
| | | 11,569,072 |
| |
| Media 1.9% |
| AMC Entertainment Holdings, Inc., Class A | 15,583 | 472,165 |
| IMAX Corp. * | 17,284 | 527,162 |
| Nexstar Media Group, Inc. | 16,674 | 1,150,506 |
| Sinclair Broadcast Group, Inc., Class A | 29,677 | 1,170,758 |
| | | 3,320,591 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 5.9% |
| Aerie Pharmaceuticals, Inc. * | 5,471 | 240,998 |
| Catalent, Inc. * | 17,716 | 518,724 |
| Charles River Laboratories International, Inc. * | 13,781 | 1,236,156 |
| Clovis Oncology, Inc. * | 2,685 | 155,435 |
| Dermira, Inc. * | 13,420 | 457,085 |
| Epizyme, Inc. * | 8,878 | 160,248 |
| Exact Sciences Corp. * | 15,957 | 478,870 |
| Exelixis, Inc. * | 3,633 | 81,379 |
| GW Pharmaceuticals plc ADR * | 208 | 24,696 |
| Halozyme Therapeutics, Inc. * | 19,644 | 273,837 |
| Horizon Pharma plc * | 15,401 | 236,867 |
| Jazz Pharmaceuticals plc * | 3,911 | 622,944 |
| Lexicon Pharmaceuticals, Inc. * | 14,109 | 220,241 |
| Ligand Pharmaceuticals, Inc. * | 3,272 | 363,748 |
| MacroGenics, Inc. * | 6,976 | 150,751 |
| Myovant Sciences Ltd. * | 5,364 | 69,678 |
| Pacira Pharmaceuticals, Inc. * | 6,414 | 311,400 |
| Phibro Animal Health Corp., Class A | 18,183 | 540,944 |
| Portola Pharmaceuticals, Inc. * | 7,495 | 299,725 |
| Prestige Brands Holdings, Inc. * | 9,177 | 526,852 |
| Prothena Corp. plc * | 4,784 | 258,958 |
| Radius Health, Inc. * | 7,114 | 277,944 |
| Sage Therapeutics, Inc. * | 13,910 | 987,610 |
| Sarepta Therapeutics, Inc. * | 7,310 | 265,061 |
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| TherapeuticsMD, Inc. * | 215,671 | 1,099,922 |
| Ultragenyx Pharmaceutical, Inc. * | 2,902 | 186,860 |
| | | 10,046,933 |
| |
| Real Estate 3.6% |
| Corporate Office Properties Trust | 23,157 | 758,160 |
| DiamondRock Hospitality Co. | 55,986 | 616,406 |
| DuPont Fabros Technology, Inc. | 11,105 | 572,463 |
| EastGroup Properties, Inc. | 5,491 | 429,671 |
| Education Realty Trust, Inc. | 19,297 | 748,145 |
| QTS Realty Trust, Inc., Class A | 13,636 | 728,708 |
| Ramco-Gershenson Properties Trust | 55,630 | 741,548 |
| Summit Hotel Properties, Inc. | 53,134 | 878,305 |
| Terreno Realty Corp. | 13,013 | 401,841 |
| Urban Edge Properties | 13,233 | 337,441 |
| | | 6,212,688 |
| |
| Retailing 4.6% |
| American Eagle Outfitters, Inc. | 41,953 | 591,118 |
| At Home Group, Inc. * | 22,095 | 386,884 |
| Big Lots, Inc. | 14,858 | 750,180 |
| Camping World Holdings, Inc., Class A | 17,233 | 532,844 |
| DSW, Inc., Class A | 15,819 | 326,188 |
| Fred's, Inc., Class A | 58,516 | 861,356 |
| J. Jill, Inc. * | 17,225 | 227,370 |
| Lithia Motors, Inc., Class A | 9,007 | 860,619 |
| Monro Muffler Brake, Inc. | 8,932 | 463,124 |
| Office Depot, Inc. | 167,420 | 832,077 |
| Pool Corp. | 3,128 | 374,171 |
| Stage Stores, Inc. | 44,400 | 127,872 |
| The Cato Corp., Class A | 24,180 | 545,501 |
| The Children's Place, Inc. | 4,855 | 557,354 |
| Williams-Sonoma, Inc. | 9,816 | 530,555 |
| | | 7,967,213 |
| |
| Semiconductors & Semiconductor Equipment 2.6% |
| Impinj, Inc. * | 8,010 | 300,215 |
| Integrated Device Technology, Inc. * | 32,858 | 788,263 |
| Marvell Technology Group Ltd. | 8,356 | 125,507 |
| Maxim Integrated Products, Inc. | 2,039 | 90,022 |
| Microsemi Corp. * | 13,904 | 652,654 |
| Monolithic Power Systems, Inc. | 4,195 | 383,842 |
| Power Integrations, Inc. | 6,462 | 426,169 |
| Synaptics, Inc. * | 9,628 | 527,326 |
| Teradyne, Inc. | 24,777 | 873,885 |
| United Microelectronics Corp. ADR | 143,052 | 277,521 |
| | | 4,445,404 |
| |
| Software & Services 8.7% |
| Broadridge Financial Solutions, Inc. | 2,912 | 203,665 |
| BroadSoft, Inc. * | 16,699 | 641,242 |
| Cardtronics plc, Class A * | 15,637 | 650,186 |
| CommVault Systems, Inc. * | 15,074 | 760,483 |
| Coupa Software, Inc. * | 10,987 | 304,889 |
| Criteo S.A. ADR * | 13,638 | 741,771 |
| Ellie Mae, Inc. * | 7,347 | 747,631 |
| Envestnet, Inc. * | 5,126 | 178,385 |
| EPAM Systems, Inc. * | 11,301 | 870,177 |
| Euronet Worldwide, Inc. * | 5,087 | 420,288 |
| Fair Isaac Corp. | 5,686 | 770,339 |
| First Data Corp., Class A * | 28,795 | 449,778 |
| Forrester Research, Inc. | 28,137 | 1,140,955 |
| Guidewire Software, Inc. * | 8,619 | 529,982 |
| j2 Global, Inc. | 5,615 | 506,698 |
| Security | Number
of Shares | Value ($) |
| Manhattan Associates, Inc. * | 7,896 | 368,664 |
| Match Group, Inc. * | 16,004 | 298,155 |
| Nuance Communications, Inc. * | 10,575 | 189,187 |
| Proofpoint, Inc. * | 9,966 | 751,137 |
| PROS Holdings, Inc. * | 11,706 | 288,553 |
| Rapid7, Inc. * | 19,104 | 323,813 |
| RingCentral, Inc., Class A * | 15,399 | 491,998 |
| SPS Commerce, Inc. * | 6,577 | 363,445 |
| Square, Inc., Class A * | 57,021 | 1,040,063 |
| Teradata Corp. * | 29,428 | 858,709 |
| WebMD Health Corp. * | 3,190 | 172,994 |
| WNS Holdings Ltd. ADR * | 26,410 | 845,648 |
| | | 14,908,835 |
| |
| Technology Hardware & Equipment 7.2% |
| Belden, Inc. | 24,940 | 1,738,318 |
| CalAmp Corp. * | 17,382 | 311,833 |
| Ciena Corp. * | 47,551 | 1,089,394 |
| Coherent, Inc. * | 2,834 | 611,010 |
| Cray, Inc. * | 17,306 | 309,777 |
| CTS Corp. | 30,136 | 666,006 |
| Diebold Nixdorf, Inc. | 32,185 | 907,617 |
| Electronics For Imaging, Inc. * | 12,308 | 563,460 |
| FLIR Systems, Inc. | 25,252 | 927,506 |
| Infinera Corp. * | 45,875 | 455,080 |
| Littelfuse, Inc. | 2,979 | 459,213 |
| Lumentum Holdings, Inc. * | 7,947 | 339,734 |
| Methode Electronics, Inc. | 15,202 | 677,249 |
| National Instruments Corp. | 10,453 | 364,914 |
| NetScout Systems, Inc. * | 9,132 | 343,820 |
| ScanSource, Inc. * | 15,194 | 600,163 |
| Universal Display Corp. | 4,506 | 402,611 |
| VeriFone Systems, Inc. * | 13,252 | 245,692 |
| Viavi Solutions, Inc. * | 112,986 | 1,129,860 |
| Zebra Technologies Corp., Class A * | 1,685 | 158,845 |
| | | 12,302,102 |
| |
| Telecommunication Services 0.5% |
| Boingo Wireless, Inc. * | 16,305 | 232,998 |
| Cogent Communications Holdings, Inc. | 12,573 | 565,785 |
| | | 798,783 |
| |
| Transportation 2.2% |
| Allegiant Travel Co. | 4,187 | 608,790 |
| Avis Budget Group, Inc. * | 29,306 | 893,833 |
| Forward Air Corp. | 13,239 | 703,917 |
| Knight Transportation, Inc. | 29,407 | 1,008,660 |
| Werner Enterprises, Inc. | 22,346 | 610,046 |
| | | 3,825,246 |
| |
| Utilities 1.0% |
| Calpine Corp. * | 35,645 | 363,579 |
| New Jersey Resources Corp. | 13,953 | 563,003 |
| Spire, Inc. | 10,674 | 731,703 |
| | | 1,658,285 |
| Total Common Stock |
| (Cost $140,224,668) | | 159,555,797 |
|
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 7.9% of net assets |
| |
| Equity Funds 1.4% |
| iShares Russell 2000 ETF | 9,713 | 1,350,690 |
| iShares Russell 2000 Growth ETF | 6,297 | 1,037,179 |
| | | 2,387,869 |
| |
| Money Market Fund 3.0% |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (a) | 5,252,833 | 5,252,833 |
| |
| U.S. Stock 3.5% |
| iShares Micro-Cap ETF | 68,800 | 5,954,640 |
| Total Other Investment Companies |
| (Cost $13,417,772) | | 13,595,342 |
|
| Rights 0.0% of net assets |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Dyax Corp. CVR *(b) | 1,269 | 1,408 |
| Tobira Therapeutics, Inc. *(b) | 77 | 1,058 |
| Total Rights |
| (Cost $2,466) | | 2,466 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $154,172,885 and the unrealized appreciation and depreciation were $24,957,435 and ($5,976,715), respectively, with a net appreciation of $18,980,720.
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| CVR — | Contingent Value Rights |
| ETF — | Exchange-traded fund |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| Russell 2000 Index, mini, Long, expires 06/16/17 | 8 | 559,360 | 11,771 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $147,986,725 | $— | $— | $147,986,725 | |
| Materials | 11,569,072 | — | — * | 11,569,072 | |
| Other Investment Companies1 | 13,595,342 | — | — | 13,595,342 | |
| Rights 1 | — | — | 2,466 | 2,466 | |
| Total | $173,151,139 | $— | $2,466 | $173,153,605 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $11,771 | $— | $— | $11,771 | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are not included in Investments in the schedule of Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $153,644,906) | | $173,153,605 |
| Deposit with broker for futures contracts | | 369,600 |
| Receivables: | | |
| Investments sold | | 1,478,695 |
| Dividends | | 31,169 |
| Fund shares sold | | 7,980 |
| Prepaid expenses | + | 20,478 |
| Total assets | | 175,061,527 |
| Liabilities |
| Payables: | | |
| Investments bought | | 2,879,448 |
| Investment adviser and administrator fees | | 136,650 |
| Shareholder service fees | | 19,621 |
| Independent trustees' fees | | 298 |
| Fund shares redeemed | | 114,789 |
| Variation margin on futures contracts | | 8,280 |
| Due to custodian | | 5,003 |
| Accrued expenses | + | 45,663 |
| Total liabilities | | 3,209,752 |
| Net Assets |
| Total assets | | 175,061,527 |
| Total liabilities | – | 3,209,752 |
| Net assets | | $171,851,775 |
| Net Assets by Source | | |
| Capital received from investors | | 136,458,982 |
| Net investment income not yet distributed | | 226,172 |
| Net realized capital gains | | 15,646,151 |
| Net unrealized capital appreciation | | 19,520,470 |
| Net Asset Value (NAV) by Shares Class | |
| Share Class | Net Assets | ÷ | Shares
Outstanding | = | NAV |
| Investor Shares | $64,275,302 | | 3,340,029 | | $19.24 |
| Select Shares | $107,576,473 | | 5,480,926 | | $19.63 |
| | | | | | |
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $2,420) | | $1,456,366 |
| Interest | + | 1,482 |
| Total investment income | | 1,457,848 |
| Expenses |
| Investment adviser and administrator fees | | 990,534 |
| Shareholder service fees: | | |
| Investor Shares | | 75,857 |
| Select Shares | | 105,735 |
| Custodian fees | | 30,521 |
| Portfolio accounting fees | | 26,895 |
| Professional fees | | 20,262 |
| Registration fees | | 15,117 |
| Shareholder reports | | 10,299 |
| Independent trustees' fees | | 4,333 |
| Transfer agent fees | | 2,513 |
| Interest expense | | 77 |
| Other expenses | + | 1,621 |
| Total expenses | | 1,283,764 |
| Expense reduction by CSIM and its affiliates | – | 220,800 |
| Net expenses | – | 1,062,964 |
| Net investment income | | 394,884 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 15,893,350 |
| Net realized gains on futures contracts | + | 43,211 |
| Net realized gains | | 15,936,561 |
| Net change in unrealized appreciation (depreciation) on investments | | 13,858,463 |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 30,574 |
| Net change in unrealized appreciation (depreciation) | + | 13,889,037 |
| Net realized and unrealized gains | | 29,825,598 |
| Increase in net assets resulting from operations | | $30,220,482 |
Laudus MarketMasters Funds | Semiannual Report
Laudus Small-Cap MarketMasters Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $394,884 | $210,511 |
| Net realized gains | | 15,936,561 | 1,168,816 |
| Net change in unrealized appreciation (depreciation) | + | 13,889,037 | (2,420,138) |
| Increase (decrease) in net assets from operations | | 30,220,482 | (1,040,811) |
| Distributions to Shareholders | |
| Distributions from net investment income | | | |
| Investor Shares | | (88,307) | — |
| Select Shares | + | (286,345) | — |
| Total distributions from net investment income | | (374,652) | — |
| Distributions from net realized gains | | | |
| Investor Shares | | (624,867) | (3,793,537) |
| Select Shares | + | (1,055,222) | (6,231,390) |
| Total distributions from net realized gains | | (1,680,089) | (10,024,927) |
| Total distributions | | ($2,054,741) | ($10,024,927) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares Sold | | | | | |
| Investor Shares | | 117,650 | $2,198,978 | 40,792 | $680,024 |
| Select Shares | + | 24,317 | 443,370 | 315,043 | 5,053,827 |
| Total shares sold | | 141,967 | $2,642,348 | 355,835 | $5,733,851 |
| Shares Reinvested | | | | | |
| Investor Shares | | 33,695 | $630,426 | 212,542 | $3,368,785 |
| Select Shares | + | 68,980 | 1,315,446 | 378,685 | 6,115,760 |
| Total shares reinvested | | 102,675 | $1,945,872 | 591,227 | $9,484,545 |
| Shares Redeemed | | | | | |
| Investor Shares | | (198,969) | ($3,703,586) | (440,313) | ($7,015,212) |
| Select Shares | + | (533,561) | (10,125,616) | (782,174) | (13,027,787) |
| Total shares redeemed | | (732,530) | ($13,829,202) | (1,222,487) | ($20,042,999) |
| Net transactions in fund shares | | (487,888) | ($9,240,982) | (275,425) | ($4,824,603) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 9,308,843 | $152,927,016 | 9,584,268 | $168,817,357 |
| Total increase or decrease | + | (487,888) | 18,924,759 | (275,425) | (15,890,341) |
| End of period | | 8,820,955 | $171,851,775 | 9,308,843 | $152,927,016 |
| Net investment income not yet distributed | | | $226,172 | | $205,940 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Financial Statements
Financial Highlights
| Investor Shares | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $21.17 | $22.71 | $22.95 | $23.68 | $19.03 | $17.45 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.05 1 | 0.17 1 | 0.18 1 | 0.25 | 0.23 | 0.21 |
| Net realized and unrealized gains (losses) | 2.52 | (0.24) | (0.10) | (0.66) | 4.85 | 1.52 |
| Total from investment operations | 2.57 | (0.07) | 0.08 | (0.41) | 5.08 | 1.73 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.15) | (0.27) | (0.32) | (0.32) | (0.43) | (0.15) |
| Distributions from net realized gains | — | (1.20) | — | — | — | — |
| Total distributions | (0.15) | (1.47) | (0.32) | (0.32) | (0.43) | (0.15) |
| Net asset value at end of period | $23.59 | $21.17 | $22.71 | $22.95 | $23.68 | $19.03 |
| Total return | 12.22% 2 | (0.14%) | 0.39% | (1.73%) | 27.23% | 10.05% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 1.40% 3 | 1.40% | 1.40% | 1.40% | 1.40% | 1.53% 4 |
| Gross operating expenses | 1.60% 3 | 1.61% | 1.59% | 1.59% | 1.60% | 1.62% |
| Net investment income (loss) | 0.46% 3 | 0.81% | 0.76% | 1.06% | 1.10% | 1.19% |
| Portfolio turnover rate | 39% 2 | 69% | 72% | 74% | 65% | 68% |
| Net assets, end of period (x 1,000,000) | $458 | $447 | $536 | $631 | $675 | $592 |
| |
| Select Shares | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $21.16 | $22.71 | $22.95 | $23.68 | $19.03 | $17.46 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.07 1 | 0.19 1 | 0.21 1 | 0.28 | 0.28 | 0.25 |
| Net realized and unrealized gains (losses) | 2.51 | (0.23) | (0.10) | (0.65) | 4.83 | 1.50 |
| Total from investment operations | 2.58 | (0.04) | 0.11 | (0.37) | 5.11 | 1.75 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.18) | (0.31) | (0.35) | (0.36) | (0.46) | (0.18) |
| Distributions from net realized gains | — | (1.20) | — | — | — | — |
| Total distributions | (0.18) | (1.51) | (0.35) | (0.36) | (0.46) | (0.18) |
| Net asset value at end of period | $23.56 | $21.16 | $22.71 | $22.95 | $23.68 | $19.03 |
| Total return | 12.32% 2 | 0.00% 5 | 0.56% | (1.57%) | 27.43% | 10.20% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses | 1.25% 3 | 1.25% | 1.25% | 1.25% | 1.25% | 1.37% 4 |
| Gross operating expenses | 1.53% 3 | 1.54% | 1.50% | 1.47% | 1.44% | 1.47% |
| Net investment income (loss) | 0.62% 3 | 0.93% | 0.91% | 1.20% | 1.26% | 1.40% |
| Portfolio turnover rate | 39% 2 | 69% | 72% | 74% | 65% | 68% |
| Net assets, end of period (x 1,000,000) | $1,128 | $1,063 | $1,395 | $1,592 | $1,590 | $1,062 |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
Annualized.
4
Effective June 6, 2012, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/12 is a blended ratio.
5
Less than 0.005%.
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15-20 days after calendar quarters on the fund's website at www.csimfunds.com/laudusfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 95.8% | Common Stock | 1,246,233,340 | 1,519,220,474 |
| 1.1% | Preferred Stock | 14,283,224 | 17,082,362 |
| 2.8% | Other Investment Companies | 45,488,117 | 45,488,092 |
| 0.0% | Rights | 2,658 | 2,440 |
| 0.0% | Short-Term Investments | 29,972 | 29,975 |
| 99.7% | Total Investments | 1,306,037,311 | 1,581,823,343 |
| 0.3% | Other Assets and Liabilities, Net | | 4,041,085 |
| 100.0% | Net Assets | | 1,585,864,428 |
| Security | Number
of Shares | Value ($) |
| Common Stock 95.8% of net assets |
| |
| Australia 4.2% |
| Banks 0.1% |
| Australia & New Zealand Banking Group Ltd. | 11,873 | 290,639 |
| Bank of Queensland Ltd. | 1,440 | 12,884 |
| Bendigo & Adelaide Bank Ltd. | 1,903 | 17,513 |
| Commonwealth Bank of Australia | 6,987 | 456,348 |
| National Australia Bank Ltd. | 10,736 | 272,503 |
| Westpac Banking Corp. | 13,570 | 355,734 |
| | | 1,405,621 |
| Capital Goods 0.0% |
| CIMIC Group Ltd. | 474 | 13,136 |
| Commercial & Professional Services 0.2% |
| Brambles Ltd. | 6,414 | 49,632 |
| Downer EDI Ltd. | 164,247 | 721,757 |
| SEEK Ltd. | 1,289 | 16,420 |
| Spotless Group Holdings Ltd. | 2,723,153 | 2,200,161 |
| | | 2,987,970 |
| Consumer Services 0.4% |
| Aristocrat Leisure Ltd. | 2,157 | 31,699 |
| Crown Resorts Ltd. | 1,727 | 16,148 |
| Domino's Pizza Enterprises Ltd. | 10,135 | 463,473 |
| Flight Centre Travel Group Ltd. | 276 | 6,492 |
| InvoCare Ltd. | 580,149 | 6,329,725 |
| Tabcorp Holdings Ltd. | 3,225 | 11,458 |
| Tatts Group Ltd. | 5,747 | 18,488 |
| | | 6,877,483 |
| Diversified Financials 0.9% |
| AMP Ltd. | 1,943,393 | 7,786,539 |
| ASX Ltd. | 772 | 29,266 |
| Challenger Ltd. | 2,242 | 22,144 |
| Macquarie Group Ltd. | 85,463 | 5,936,843 |
| | | 13,774,792 |
| Energy 0.0% |
| Caltex Australia Ltd. | 1,038 | 23,170 |
| Origin Energy Ltd. * | 6,996 | 37,647 |
| Santos Ltd. * | 7,280 | 18,900 |
| Woodside Petroleum Ltd. | 3,065 | 73,779 |
| | | 153,496 |
| Security | Number
of Shares | Value ($) |
| Food & Staples Retailing 0.0% |
| Wesfarmers Ltd. | 4,589 | 147,718 |
| Woolworths Ltd. | 5,229 | 105,112 |
| | | 252,830 |
| Food, Beverage & Tobacco 0.4% |
| Coca-Cola Amatil Ltd. | 2,276 | 15,951 |
| Costa Group Holdings Ltd. | 1,170,883 | 3,843,478 |
| Inghams Group Ltd. | 864,923 | 2,027,604 |
| Treasury Wine Estates Ltd. | 2,941 | 26,405 |
| | | 5,913,438 |
| Health Care Equipment & Services 0.1% |
| Cochlear Ltd. | 228 | 23,867 |
| Healthscope Ltd. | 6,723 | 11,103 |
| Nanosonics Ltd. * | 496,670 | 1,174,323 |
| Ramsay Health Care Ltd. | 564 | 30,243 |
| Sonic Healthcare Ltd. | 1,573 | 26,004 |
| | | 1,265,540 |
| Insurance 0.0% |
| Insurance Australia Group Ltd. | 9,835 | 45,653 |
| Medibank Pvt Ltd. | 10,964 | 23,868 |
| QBE Insurance Group Ltd. | 5,545 | 53,275 |
| Suncorp Group Ltd. | 5,203 | 53,636 |
| | | 176,432 |
| Materials 1.2% |
| Alumina Ltd. | 9,544 | 13,102 |
| Amcor Ltd. | 4,684 | 55,076 |
| BHP Billiton Ltd. | 12,979 | 231,077 |
| BlueScope Steel Ltd. | 224,620 | 1,962,491 |
| Boral Ltd. | 4,665 | 21,504 |
| Fortescue Metals Group Ltd. | 6,208 | 24,606 |
| Incitec Pivot Ltd. | 6,620 | 18,755 |
| James Hardie Industries plc CDI | 1,776 | 30,051 |
| Newcrest Mining Ltd. | 3,100 | 49,734 |
| Northern Star Resources Ltd. | 813,790 | 2,645,874 |
| Orica Ltd. | 414,300 | 5,739,928 |
| OZ Minerals Ltd. | 69,105 | 366,936 |
| Pact Group Holdings Ltd. | 1,527,365 | 8,060,908 |
| Rio Tinto Ltd. | 1,715 | 77,641 |
| South32 Ltd. | 21,533 | 44,623 |
| | | 19,342,306 |
| Media 0.0% |
| REA Group Ltd. | 247 | 11,343 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| CSL Ltd. | 1,844 | 182,851 |
| Real Estate 0.8% |
| Charter Hall Retail REIT | 1,776,835 | 5,947,557 |
| Dexus Property Group | 3,857 | 29,452 |
| Goodman Group | 7,138 | 43,340 |
| LendLease Group | 2,203 | 26,448 |
| Mirvac Group | 14,751 | 25,055 |
| Scentre Group | 21,526 | 69,454 |
| Shopping Centres Australasia Property Group | 3,390,072 | 5,864,530 |
| Stockland | 9,590 | 34,805 |
| The GPT Group | 7,163 | 28,137 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Vicinity Centres | 13,414 | 28,913 |
| Westfield Corp. | 7,984 | 54,295 |
| | | 12,151,986 |
| Retailing 0.1% |
| Bapcor Ltd. | 290,023 | 1,134,153 |
| Harvey Norman Holdings Ltd. | 2,689 | 8,434 |
| | | 1,142,587 |
| Software & Services 0.0% |
| Computershare Ltd. | 1,846 | 20,350 |
| Telecommunication Services 0.0% |
| Telstra Corp., Ltd. | 17,301 | 54,664 |
| TPG Telecom Ltd. | 1,746 | 7,703 |
| Vocus Group Ltd. | 2,601 | 6,557 |
| | | 68,924 |
| Transportation 0.0% |
| Aurizon Holdings Ltd. | 8,180 | 31,543 |
| Qantas Airways Ltd. | 2,388 | 7,570 |
| Sydney Airport | 4,385 | 22,648 |
| Transurban Group | 8,260 | 75,462 |
| | | 137,223 |
| Utilities 0.0% |
| AGL Energy Ltd. | 2,729 | 54,637 |
| APA Group | 4,441 | 30,457 |
| AusNet Services | 8,703 | 11,398 |
| DUET Group | 9,854 | 22,266 |
| | | 118,758 |
| | | 65,997,066 |
| |
| Austria 0.3% |
| Banks 0.0% |
| Erste Group Bank AG * | 1,218 | 43,609 |
| Raiffeisen Bank International AG * | 475 | 10,828 |
| | | 54,437 |
| Capital Goods 0.0% |
| ANDRITZ AG | 289 | 15,969 |
| Energy 0.0% |
| OMV AG | 586 | 26,992 |
| Materials 0.3% |
| Lenzing AG | 23,352 | 4,354,870 |
| voestalpine AG | 452 | 18,844 |
| | | 4,373,714 |
| | | 4,471,112 |
| |
| Belgium 0.7% |
| Banks 0.3% |
| KBC Group N.V. | 64,215 | 4,640,617 |
| Diversified Financials 0.0% |
| Groupe Bruxelles Lambert S.A. | 322 | 30,886 |
| Food & Staples Retailing 0.0% |
| Colruyt S.A. | 267 | 13,720 |
| Food, Beverage & Tobacco 0.0% |
| Anheuser-Busch InBev S.A./N.V. | 3,090 | 348,460 |
| Insurance 0.0% |
| Ageas | 777 | 31,815 |
| Materials 0.1% |
| Bekaert N.V. | 11,862 | 597,069 |
| Solvay S.A. | 296 | 37,648 |
| Umicore S.A. | 379 | 22,205 |
| | | 656,922 |
| Security | Number
of Shares | Value ($) |
| Media 0.0% |
| Telenet Group Holding N.V. * | 209 | 12,699 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.2% |
| Galapagos N.V. * | 34,980 | 3,064,545 |
| UCB S.A. | 504 | 39,337 |
| | | 3,103,882 |
| Semiconductors & Semiconductor Equipment 0.1% |
| X-Fab Silicon Foundries SE * | 231,530 | 2,057,998 |
| Telecommunication Services 0.0% |
| Proximus | 605 | 18,503 |
| | | 10,915,502 |
| |
| Brazil 0.8% |
| Consumer Services 0.2% |
| CVC Brasil Operadora e Agencia de Viagens S.A. | 368,800 | 3,597,312 |
| Food, Beverage & Tobacco 0.1% |
| Ambev S.A. ADR | 511,380 | 2,930,207 |
| Real Estate 0.2% |
| Iguatemi Empresa de Shopping Centers S.A. | 280,600 | 2,932,374 |
| Transportation 0.2% |
| EcoRodovias Infraestrutura e Logistica S.A. | 1,014,400 | 3,016,946 |
| Utilities 0.1% |
| Companhia de Saneamento Basico do Estado de Sao Paulo | 48,200 | 444,484 |
| Engie Brasil Energia S.A. | 40,900 | 438,115 |
| | | 882,599 |
| | | 13,359,438 |
| |
| Canada 5.1% |
| Capital Goods 1.4% |
| CAE, Inc. | 714,643 | 10,915,576 |
| Finning International, Inc. | 24,132 | 458,933 |
| New Flyer Industries, Inc. | 132,790 | 4,946,611 |
| WSP Global, Inc. | 170,585 | 6,214,565 |
| | | 22,535,685 |
| Commercial & Professional Services 0.2% |
| Ritchie Bros. Auctioneers, Inc. | 118,232 | 3,876,828 |
| Consumer Durables & Apparel 0.1% |
| BRP, Inc. * | 40,210 | 950,571 |
| Energy 1.0% |
| Canadian Energy Services & Technology Corp. | 359,130 | 1,696,926 |
| Canadian Natural Resources Ltd. | 113,527 | 3,616,098 |
| Enerflex Ltd. | 145,620 | 2,052,473 |
| Parex Resources, Inc. * | 252,170 | 3,131,229 |
| Suncor Energy, Inc. | 128,284 | 4,020,358 |
| Trican Well Service Ltd. * | 590,540 | 1,622,303 |
| | | 16,139,387 |
| Food, Beverage & Tobacco 0.3% |
| Premium Brands Holdings Corp. | 64,140 | 4,014,594 |
| Materials 0.4% |
| Alamos Gold, Inc., Class A | 59,136 | 423,251 |
| Hudbay Minerals, Inc. | 333,270 | 1,989,781 |
| Interfor Corp. * | 205,960 | 3,041,759 |
| Lundin Mining Corp. | 137,032 | 730,811 |
| | | 6,185,602 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Real Estate 0.5% |
| FirstService Corp. | 61,230 | 3,810,475 |
| Northview Apartment Real Estate Investment Trust | 204,133 | 3,402,092 |
| | | 7,212,567 |
| Retailing 0.1% |
| Dollarama, Inc. | 15,773 | 1,380,809 |
| Software & Services 0.6% |
| Constellation Software, Inc. | 2,772 | 1,267,824 |
| Shopify, Inc., Class A * | 56,580 | 4,297,251 |
| The Descartes Systems Group, Inc. * | 182,300 | 4,206,769 |
| | | 9,771,844 |
| Transportation 0.2% |
| Canadian National Railway Co. | 51,463 | 3,719,903 |
| Utilities 0.3% |
| Innergex Renewable Energy, Inc. | 286,538 | 2,926,149 |
| TransAlta Renewables, Inc. | 212,602 | 2,428,091 |
| | | 5,354,240 |
| | | 81,142,030 |
| |
| China 3.9% |
| Automobiles & Components 0.5% |
| Nexteer Automotive Group Ltd. | 4,803,288 | 7,479,367 |
| Banks 0.4% |
| Industrial & Commercial Bank of China Ltd., Class H | 9,359,000 | 6,100,810 |
| Capital Goods 0.2% |
| Lonking Holdings Ltd. | 14,023,000 | 3,904,593 |
| Consumer Durables & Apparel 0.2% |
| Q Technology Group Co., Ltd. * | 3,203,000 | 2,719,595 |
| Health Care Equipment & Services 0.1% |
| Microport Scientific Corp. * | 2,946,000 | 2,051,733 |
| Insurance 0.4% |
| Ping An Insurance Group Co. of China Ltd., Class H | 1,108,500 | 6,232,267 |
| Materials 0.3% |
| Anhui Conch Cement Co., Ltd., Class H | 488,500 | 1,708,311 |
| China Resources Cement Holdings Ltd. | 5,134,000 | 2,807,031 |
| | | 4,515,342 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| CSPC Pharmaceutical Group Ltd. | 688,000 | 954,267 |
| Real Estate 0.1% |
| China Overseas Land & Investment Ltd. | 726,000 | 2,105,826 |
| Retailing 0.1% |
| Ctrip.com International Ltd. ADR * | 43,929 | 2,218,854 |
| Software & Services 1.3% |
| Alibaba Group Holding Ltd. ADR * | 57,565 | 6,648,758 |
| Baidu, Inc. ADR * | 42,590 | 7,675,996 |
| SINA Corp. * | 9,319 | 715,792 |
| Tencent Holdings Ltd. | 158,500 | 4,966,331 |
| | | 20,006,877 |
| Technology Hardware & Equipment 0.2% |
| Tongda Group Holdings Ltd. | 8,470,000 | 3,327,089 |
| | | 61,616,620 |
| |
| Denmark 0.6% |
| Banks 0.0% |
| Danske Bank A/S | 2,784 | 101,222 |
| Capital Goods 0.0% |
| Vestas Wind Systems A/S | 896 | 77,098 |
| Security | Number
of Shares | Value ($) |
| Commercial & Professional Services 0.0% |
| ISS A/S | 665 | 27,584 |
| Consumer Durables & Apparel 0.1% |
| Pandora A/S | 12,730 | 1,375,224 |
| Food, Beverage & Tobacco 0.0% |
| Carlsberg A/S, Class B | 427 | 42,607 |
| Health Care Equipment & Services 0.1% |
| Ambu A/S, Class B | 20,890 | 1,027,778 |
| Coloplast A/S, Class B | 474 | 40,587 |
| William Demant Holding A/S * | 575 | 13,160 |
| | | 1,081,525 |
| Insurance 0.0% |
| Tryg A/S | 544 | 10,437 |
| Materials 0.2% |
| Chr. Hansen Holding A/S | 54,736 | 3,687,782 |
| Novozymes A/S, B Shares | 920 | 39,719 |
| | | 3,727,501 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Genmab A/S * | 6,140 | 1,221,705 |
| Novo Nordisk A/S, Class B | 7,726 | 300,826 |
| | | 1,522,531 |
| Telecommunication Services 0.0% |
| TDC A/S | 3,179 | 17,054 |
| Transportation 0.1% |
| AP Moeller - Maersk A/S, Series A | 15 | 24,885 |
| AP Moeller - Maersk A/S, Series B | 27 | 46,576 |
| DSV A/S | 35,608 | 1,982,847 |
| | | 2,054,308 |
| Utilities 0.0% |
| DONG Energy A/S | 597 | 23,508 |
| | | 10,060,599 |
| |
| Finland 0.2% |
| Automobiles & Components 0.0% |
| Nokian Renkaat Oyj | 452 | 19,427 |
| Capital Goods 0.0% |
| Kone Oyj, Class B | 1,364 | 62,433 |
| Metso Oyj | 439 | 15,722 |
| Wartsila Oyj Abp | 590 | 35,881 |
| | | 114,036 |
| Energy 0.0% |
| Neste Oyj | 509 | 20,741 |
| Insurance 0.0% |
| Sampo Oyj, A Shares | 1,807 | 86,479 |
| Materials 0.2% |
| Huhtamaki Oyj | 13,275 | 514,572 |
| Outokumpu Oyj | 221,110 | 2,117,346 |
| Stora Enso Oyj, R Shares | 2,194 | 26,038 |
| UPM-Kymmene Oyj | 2,158 | 56,856 |
| | | 2,714,812 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Orion Oyj, Class B | 403 | 23,096 |
| Technology Hardware & Equipment 0.0% |
| Nokia Oyj | 23,588 | 134,849 |
| Telecommunication Services 0.0% |
| Elisa Oyj | 565 | 19,214 |
| Utilities 0.0% |
| Fortum Oyj | 1,770 | 25,736 |
| | | 3,158,390 |
| |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| France 10.2% |
| Automobiles & Components 0.9% |
| Compagnie Generale des Etablissements Michelin | 30,771 | 4,024,879 |
| Peugeot S.A. * | 1,935 | 40,569 |
| Plastic Omnium S.A. | 25,589 | 1,001,470 |
| Renault S.A. | 778 | 72,549 |
| Valeo S.A. | 138,935 | 9,997,772 |
| | | 15,137,239 |
| Banks 1.2% |
| BNP Paribas S.A. | 260,912 | 18,414,434 |
| Credit Agricole S.A. | 4,544 | 67,587 |
| Natixis S.A. | 3,811 | 26,521 |
| Societe Generale S.A. | 3,101 | 170,036 |
| | | 18,678,578 |
| Capital Goods 1.5% |
| Airbus SE | 2,342 | 189,450 |
| Alstom S.A. * | 610 | 19,362 |
| Bouygues S.A. | 827 | 34,762 |
| Compagnie de Saint-Gobain | 2,019 | 108,939 |
| Dassault Aviation S.A. | 11 | 15,032 |
| Eiffage S.A. | 234 | 19,821 |
| Legrand S.A. | 1,080 | 69,909 |
| LISI | 115,288 | 4,520,995 |
| Nexans S.A. * | 73,410 | 4,080,997 |
| Rexel S.A. | 1,203 | 21,484 |
| Safran S.A. | 77,465 | 6,413,700 |
| Schneider Electric SE | 2,272 | 179,955 |
| Tarkett S.A. | 70,650 | 3,319,511 |
| Thales S.A. | 43,097 | 4,529,771 |
| Vinci S.A. | 2,060 | 175,591 |
| Zodiac Aerospace | 815 | 19,785 |
| | | 23,719,064 |
| Commercial & Professional Services 1.0% |
| Bureau Veritas S.A. | 307,456 | 7,123,863 |
| Edenred | 836 | 21,416 |
| Societe BIC S.A. | 114 | 12,811 |
| Teleperformance | 68,920 | 8,666,611 |
| | | 15,824,701 |
| Consumer Durables & Apparel 0.9% |
| Christian Dior SE | 11,884 | 3,259,358 |
| Hermes International | 2,997 | 1,432,775 |
| Kering | 12,216 | 3,786,448 |
| LVMH Moet Hennessy Louis Vuitton SE | 20,933 | 5,167,703 |
| SEB S.A. | 3,607 | 580,848 |
| | | 14,227,132 |
| Consumer Services 0.0% |
| Accor S.A. | 681 | 31,053 |
| Sodexo S.A. | 373 | 47,405 |
| | | 78,458 |
| Diversified Financials 0.0% |
| Eurazeo S.A. | 152 | 10,303 |
| Wendel S.A. | 112 | 15,700 |
| | | 26,003 |
| Energy 0.4% |
| TOTAL S.A. | 115,611 | 5,934,682 |
| Food & Staples Retailing 0.0% |
| Carrefour S.A. | 2,294 | 54,026 |
| Casino Guichard Perrachon S.A. | 222 | 13,370 |
| | | 67,396 |
| Security | Number
of Shares | Value ($) |
| Food, Beverage & Tobacco 0.9% |
| Danone S.A. | 121,385 | 8,495,241 |
| Pernod-Ricard S.A. | 42,858 | 5,363,748 |
| Remy Cointreau S.A. | 112 | 11,298 |
| | | 13,870,287 |
| Health Care Equipment & Services 0.4% |
| BioMerieux | 3,714 | 742,709 |
| Essilor International S.A. | 837 | 108,470 |
| Korian S.A. | 163,630 | 5,272,728 |
| | | 6,123,907 |
| Household & Personal Products 0.0% |
| L'Oreal S.A. | 1,018 | 202,734 |
| Insurance 0.0% |
| AXA S.A. | 7,838 | 209,119 |
| CNP Assurances | 680 | 14,204 |
| SCOR SE | 649 | 25,673 |
| | | 248,996 |
| Materials 0.2% |
| Air Liquide S.A. | 1,571 | 189,284 |
| Arkema S.A. | 21,936 | 2,322,649 |
| Imerys S.A. | 170 | 14,625 |
| | | 2,526,558 |
| Media 0.5% |
| Eutelsat Communications S.A. | 822 | 19,448 |
| JCDecaux S.A. | 359 | 12,672 |
| Lagardere S.C.A. | 457 | 13,989 |
| Publicis Groupe S.A. | 99,776 | 7,203,433 |
| SES S.A. | 1,452 | 31,736 |
| Vivendi S.A. | 4,162 | 82,554 |
| | | 7,363,832 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.6% |
| Boiron S.A. | 37,758 | 3,590,995 |
| Eurofins Scientific SE | 6,457 | 3,180,244 |
| Ipsen S.A. | 8,131 | 946,636 |
| Sanofi | 17,006 | 1,606,961 |
| | | 9,324,836 |
| Real Estate 0.0% |
| Fonciere Des Regions | 131 | 11,692 |
| Gecina S.A. | 164 | 23,325 |
| ICADE | 146 | 10,842 |
| Klepierre | 878 | 34,461 |
| Nexity S.A. * | 9,418 | 512,079 |
| | | 592,399 |
| Semiconductors & Semiconductor Equipment 0.1% |
| SOITEC * | 44,860 | 1,904,725 |
| STMicroelectronics N.V. | 2,543 | 40,825 |
| | | 1,945,550 |
| Software & Services 0.5% |
| Alten S.A. | 21,484 | 1,820,716 |
| Atos SE | 21,223 | 2,779,899 |
| Capgemini S.A. | 662 | 66,281 |
| Dassault Systemes S.A. | 521 | 46,484 |
| Worldline S.A. * | 91,490 | 3,034,150 |
| | | 7,747,530 |
| Technology Hardware & Equipment 0.3% |
| Ingenico Group S.A. | 56,055 | 5,075,610 |
| Telecommunication Services 0.0% |
| Iliad S.A. | 105 | 25,486 |
| Orange S.A. | 8,063 | 124,794 |
| SFR Group S.A. * | 349 | 11,426 |
| | | 161,706 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Transportation 0.0% |
| Aeroports de Paris | 118 | 15,739 |
| Bollore S.A. | 3,459 | 14,074 |
| Groupe Eurotunnel SE | 1,859 | 20,423 |
| | | 50,236 |
| Utilities 0.8% |
| Electricite de France S.A. | 1,463 | 12,213 |
| Engie S.A. | 6,399 | 90,226 |
| Rubis S.C.A. | 129,205 | 13,126,167 |
| Suez | 1,383 | 22,718 |
| Veolia Environnement S.A. | 1,910 | 36,348 |
| | | 13,287,672 |
| | | 162,215,106 |
| |
| Georgia 0.0% |
| Banks 0.0% |
| BGEO Group plc | 13,865 | 645,269 |
| |
| Germany 8.2% |
| Automobiles & Components 2.0% |
| Bayerische Motoren Werke AG | 86,339 | 8,248,980 |
| Continental AG | 37,434 | 8,385,113 |
| Daimler AG | 195,205 | 14,545,561 |
| Volkswagen AG | 129 | 20,800 |
| | | 31,200,454 |
| Banks 0.0% |
| Commerzbank AG * | 4,307 | 42,224 |
| Capital Goods 2.4% |
| Brenntag AG | 617 | 36,577 |
| Duerr AG | 88,231 | 8,792,254 |
| GEA Group AG | 729 | 30,992 |
| HOCHTIEF AG | 83 | 14,948 |
| KION Group AG | 15,197 | 1,029,526 |
| MAN SE | 140 | 14,709 |
| MTU Aero Engines AG | 90,848 | 13,030,677 |
| Norma Group SE | 64,327 | 3,449,186 |
| OSRAM Licht AG | 354 | 23,714 |
| Rational AG | 5,444 | 2,736,182 |
| Siemens AG | 24,402 | 3,500,293 |
| Stabilus S.A. | 76,947 | 5,573,082 |
| | | 38,232,140 |
| Consumer Durables & Apparel 0.1% |
| adidas AG | 9,220 | 1,848,504 |
| Hugo Boss AG | 262 | 19,923 |
| | | 1,868,427 |
| Diversified Financials 0.2% |
| Aurelius Equity Opportunities SE & Co. KGaA | 45,850 | 2,263,232 |
| Deutsche Bank AG * | 8,364 | 150,391 |
| Deutsche Boerse AG | 781 | 76,444 |
| | | 2,490,067 |
| Food & Staples Retailing 0.0% |
| METRO AG | 710 | 23,366 |
| Health Care Equipment & Services 0.2% |
| Carl Zeiss Meditec AG, Class B | 55,340 | 2,515,665 |
| Fresenius Medical Care AG & Co. KGaA | 869 | 77,140 |
| Fresenius SE & Co. KGaA | 1,657 | 134,433 |
| | | 2,727,238 |
| Household & Personal Products 0.0% |
| Beiersdorf AG | 403 | 40,079 |
| Henkel AG & Co. KGaA | 420 | 48,993 |
| | | 89,072 |
| Security | Number
of Shares | Value ($) |
| Insurance 0.9% |
| Allianz SE | 74,714 | 14,223,872 |
| Hannover Rueck SE | 240 | 28,791 |
| Muenchener Rueckversicherungs-Gesellschaft AG | 651 | 124,809 |
| | | 14,377,472 |
| Materials 0.4% |
| BASF SE | 42,156 | 4,106,792 |
| Covestro AG | 12,564 | 979,129 |
| Evonik Industries AG | 30,401 | 1,015,089 |
| HeidelbergCement AG | 602 | 55,732 |
| K&S AG | 751 | 17,918 |
| LANXESS AG | 364 | 26,283 |
| Linde AG | 750 | 134,766 |
| Symrise AG | 492 | 34,444 |
| ThyssenKrupp AG | 1,468 | 34,983 |
| | | 6,405,136 |
| Media 0.2% |
| Axel Springer SE | 220 | 12,344 |
| CTS Eventim AG & Co. KGaA | 81,800 | 3,148,466 |
| ProSiebenSat.1 Media SE | 930 | 39,478 |
| RTL Group S.A. * | 187 | 14,493 |
| | | 3,214,781 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.4% |
| Bayer AG | 3,353 | 414,877 |
| Merck KGaA | 522 | 61,320 |
| MorphoSys AG * | 37,980 | 2,305,837 |
| QIAGEN N.V. * | 95,769 | 2,868,970 |
| | | 5,651,004 |
| Real Estate 0.1% |
| Deutsche Wohnen AG | 1,442 | 49,307 |
| Vonovia SE | 62,321 | 2,256,281 |
| | | 2,305,588 |
| Retailing 0.4% |
| Fielmann AG | 90,057 | 6,884,744 |
| Zalando SE * | 343 | 15,130 |
| | | 6,899,874 |
| Semiconductors & Semiconductor Equipment 0.2% |
| Infineon Technologies AG | 157,851 | 3,262,708 |
| Software & Services 0.5% |
| Bechtle AG | 4,582 | 525,720 |
| SAP SE | 59,254 | 5,935,234 |
| United Internet AG | 489 | 22,507 |
| Wirecard AG | 13,834 | 818,010 |
| | | 7,301,471 |
| Telecommunication Services 0.2% |
| Deutsche Telekom AG | 176,019 | 3,087,513 |
| Telefonica Deutschland Holding AG | 3,571 | 17,315 |
| | | 3,104,828 |
| Transportation 0.0% |
| Deutsche Lufthansa AG | 1,118 | 19,288 |
| Deutsche Post AG | 3,922 | 140,972 |
| Fraport AG Frankfurt Airport Services Worldwide | 196 | 15,420 |
| | | 175,680 |
| Utilities 0.0% |
| E.ON SE | 8,843 | 68,934 |
| Innogy SE | 552 | 20,294 |
| RWE AG * | 1,950 | 32,298 |
| | | 121,526 |
| | | 129,493,056 |
| |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Hong Kong 1.6% |
| Banks 0.0% |
| BOC Hong Kong (Holdings) Ltd. | 15,000 | 61,643 |
| Hang Seng Bank Ltd. | 3,100 | 62,794 |
| The Bank of East Asia Ltd. | 4,800 | 19,849 |
| | | 144,286 |
| Capital Goods 0.0% |
| CK Hutchison Holdings Ltd. | 11,038 | 137,834 |
| NWS Holdings Ltd. | 7,384 | 13,867 |
| | | 151,701 |
| Consumer Durables & Apparel 0.0% |
| Li & Fung Ltd. | 28,000 | 11,724 |
| Techtronic Industries Co., Ltd. | 5,500 | 23,597 |
| Yue Yuen Industrial Holdings Ltd. | 3,000 | 11,860 |
| | | 47,181 |
| Consumer Services 0.7% |
| Galaxy Entertainment Group Ltd. | 397,000 | 2,205,516 |
| Melco International Development Ltd. | 2,864,000 | 5,879,977 |
| Melco Resorts & Entertainment Ltd. ADR | 122,135 | 2,680,863 |
| MGM China Holdings Ltd. | 3,600 | 8,189 |
| Sands China Ltd. | 10,000 | 45,292 |
| Shangri-La Asia Ltd. | 6,000 | 8,587 |
| SJM Holdings Ltd. | 8,683 | 8,418 |
| Wynn Macau Ltd. * | 6,400 | 14,029 |
| | | 10,850,871 |
| Diversified Financials 0.0% |
| First Pacific Co., Ltd. | 10,000 | 7,700 |
| Hong Kong Exchanges & Clearing Ltd. | 4,700 | 115,592 |
| | | 123,292 |
| Food, Beverage & Tobacco 0.0% |
| WH Group Ltd. | 32,000 | 28,549 |
| Insurance 0.2% |
| AIA Group Ltd. | 466,600 | 3,229,542 |
| Real Estate 0.0% |
| Cheung Kong Property Holdings Ltd. | 11,038 | 79,023 |
| Hang Lung Group Ltd. | 4,000 | 16,680 |
| Hang Lung Properties Ltd. | 9,000 | 23,581 |
| Henderson Land Development Co., Ltd. | 4,635 | 29,342 |
| Hongkong Land Holdings Ltd. | 4,700 | 36,223 |
| Hysan Development Co., Ltd. | 3,000 | 14,148 |
| Kerry Properties Ltd. | 3,000 | 11,215 |
| Link REIT | 9,000 | 64,692 |
| New World Development Co., Ltd. | 23,000 | 28,601 |
| Sino Land Co., Ltd. | 12,000 | 20,307 |
| Sun Hung Kai Properties Ltd. | 5,702 | 85,444 |
| Swire Pacific Ltd., Class A | 2,000 | 19,286 |
| Swire Properties Ltd. | 5,600 | 18,774 |
| The Wharf Holdings Ltd. | 5,349 | 45,606 |
| Wheelock & Co., Ltd. | 3,000 | 23,368 |
| | | 516,290 |
| Semiconductors & Semiconductor Equipment 0.2% |
| ASM Pacific Technology Ltd. | 207,400 | 3,087,663 |
| Technology Hardware & Equipment 0.2% |
| China High Precision Automation Group Ltd. *(e) | 766,000 | — |
| Sunny Optical Technology Group Co., Ltd. | 316,000 | 2,596,470 |
| | | 2,596,470 |
| Telecommunication Services 0.2% |
| HKBN Ltd. | 2,530,983 | 2,734,998 |
| HKT Trust & HKT Ltd. | 15,120 | 19,342 |
| PCCW Ltd. | 21,000 | 11,856 |
| | | 2,766,196 |
| Security | Number
of Shares | Value ($) |
| Transportation 0.1% |
| Cathay Pacific Airways Ltd. | 6,000 | 8,635 |
| MTR Corp., Ltd. | 6,000 | 34,519 |
| Pacific Basin Shipping Ltd. * | 9,827,000 | 1,951,886 |
| | | 1,995,040 |
| Utilities 0.0% |
| Cheung Kong Infrastructure Holdings Ltd. | 2,574 | 22,534 |
| CLP Holdings Ltd. | 6,500 | 68,550 |
| HK Electric Investments & HK Electric Investments Ltd. | 13,000 | 11,494 |
| Hong Kong & China Gas Co., Ltd. | 31,107 | 62,148 |
| Power Assets Holdings Ltd. | 5,500 | 49,468 |
| | | 214,194 |
| | | 25,751,275 |
| |
| Hungary 0.0% |
| Energy 0.0% |
| MOL Hungarian Oil & Gas plc | 7,916 | 595,500 |
| |
| India 1.9% |
| Automobiles & Components 0.2% |
| Maruti Suzuki India Ltd. | 19,452 | 1,971,561 |
| Motherson Sumi Systems Ltd. * | 103,645 | 646,120 |
| | | 2,617,681 |
| Banks 0.8% |
| Axis Bank Ltd. | 175,100 | 1,386,502 |
| HDFC Bank Ltd. | 119,002 | 2,855,849 |
| Indiabulls Housing Finance Ltd. | 339,404 | 5,360,217 |
| IndusInd Bank Ltd. | 51,883 | 1,165,037 |
| Yes Bank Ltd. | 97,688 | 2,476,219 |
| | | 13,243,824 |
| Capital Goods 0.1% |
| Eicher Motors Ltd. | 1,675 | 677,936 |
| Voltas Ltd. | 88,554 | 565,268 |
| | | 1,243,204 |
| Diversified Financials 0.1% |
| Multi Commodity Exchange of India Ltd. | 65,370 | 1,235,375 |
| Energy 0.0% |
| Bharat Petroleum Corp., Ltd. | 52,229 | 583,989 |
| Food, Beverage & Tobacco 0.0% |
| Britannia Industries Ltd. | 10,525 | 592,443 |
| Materials 0.1% |
| UPL Ltd. | 58,540 | 733,510 |
| Software & Services 0.6% |
| HCL Technologies Ltd. | 73,578 | 930,855 |
| Infosys Ltd. ADR | 295,000 | 4,295,200 |
| Vakrangee Ltd. | 926,490 | 4,923,959 |
| | | 10,150,014 |
| | | 30,400,040 |
| |
| Indonesia 0.9% |
| Banks 0.8% |
| PT Bank Central Asia Tbk | 1,521,800 | 2,023,904 |
| PT Bank Mandiri (Persero) Tbk | 8,559,200 | 7,490,247 |
| PT Bank Tabungan Negara (Persero) Tbk | 22,349,500 | 3,847,965 |
| | | 13,362,116 |
| Capital Goods 0.1% |
| PT Pembangunan Perumahan (Persero) Tbk | 4,060,600 | 968,093 |
| | | 14,330,209 |
| |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Ireland 0.8% |
| Banks 0.0% |
| Bank of Ireland * | 132,914 | 33,459 |
| Capital Goods 0.1% |
| DCC plc | 353 | 32,595 |
| Kingspan Group plc | 27,977 | 973,230 |
| | | 1,005,825 |
| Consumer Services 0.0% |
| Paddy Power Betfair plc | 318 | 35,392 |
| Food, Beverage & Tobacco 0.4% |
| Glanbia plc | 332,863 | 6,505,535 |
| Kerry Group plc, Class A | 641 | 52,382 |
| | | 6,557,917 |
| Materials 0.0% |
| CRH plc | 3,353 | 122,130 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.3% |
| ICON plc * | 9,229 | 779,758 |
| Shire plc | 57,665 | 3,399,853 |
| | | 4,179,611 |
| | | 11,934,334 |
| |
| Israel 0.3% |
| Banks 0.0% |
| Bank Hapoalim B.M. | 4,312 | 26,891 |
| Bank Leumi Le-Israel B.M. * | 5,857 | 27,391 |
| Mizrahi Tefahot Bank Ltd. | 507 | 8,179 |
| | | 62,461 |
| Capital Goods 0.0% |
| Elbit Systems Ltd. | 91 | 10,834 |
| Materials 0.0% |
| Frutarom Industries Ltd. | 189 | 11,110 |
| Israel Chemicals Ltd. | 2,525 | 10,881 |
| | | 21,991 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Taro Pharmaceutical Industries Ltd. * | 74 | 8,647 |
| Teva Pharmaceutical Industries Ltd. ADR | 3,690 | 116,530 |
| | | 125,177 |
| Real Estate 0.0% |
| Azrieli Group Ltd. | 224 | 11,915 |
| Software & Services 0.3% |
| Check Point Software Technologies Ltd. * | 31,906 | 3,318,543 |
| Mobileye N.V. * | 699 | 43,282 |
| Nice Ltd. | 236 | 15,941 |
| Wix.com Ltd. * | 7,864 | 648,387 |
| | | 4,026,153 |
| Telecommunication Services 0.0% |
| Bezeq The Israeli Telecommunication Corp., Ltd. | 8,089 | 13,591 |
| | | 4,272,122 |
| |
| Italy 4.0% |
| Automobiles & Components 0.1% |
| Brembo S.p.A. | 8,284 | 650,846 |
| Ferrari N.V. | 11,086 | 833,958 |
| Fiat Chrysler Automobiles N.V. * | 3,601 | 40,902 |
| | | 1,525,706 |
| Banks 1.1% |
| FinecoBank Banca Fineco S.p.A. | 684,332 | 4,875,002 |
| Intesa Sanpaolo S.p.A. | 4,310,483 | 12,582,726 |
| Security | Number
of Shares | Value ($) |
| Mediobanca S.p.A. | 2,293 | 22,051 |
| UniCredit S.p.A. * | 7,636 | 124,333 |
| | | 17,604,112 |
| Capital Goods 0.1% |
| Interpump Group S.p.A. | 46,185 | 1,224,804 |
| Leonardo S.p.A. * | 1,611 | 25,316 |
| Prysmian S.p.A. | 776 | 22,394 |
| | | 1,272,514 |
| Consumer Durables & Apparel 0.9% |
| Luxottica Group S.p.A. | 676 | 39,080 |
| Moncler S.p.A. | 221,550 | 5,464,529 |
| Prada S.p.A. | 733,200 | 3,431,484 |
| Salvatore Ferragamo S.p.A. | 148,379 | 4,751,433 |
| | | 13,686,526 |
| Diversified Financials 0.9% |
| Azimut Holding S.p.A. | 33,336 | 650,276 |
| Banca Generali S.p.A. | 131,329 | 3,773,845 |
| EXOR N.V. | 173,631 | 9,746,120 |
| | | 14,170,241 |
| Energy 0.0% |
| Eni S.p.A. | 10,281 | 159,469 |
| Saipem S.p.A. * | 30,731 | 13,228 |
| Snam S.p.A. | 9,777 | 43,195 |
| Tenaris S.A. | 1,883 | 29,416 |
| | | 245,308 |
| Food, Beverage & Tobacco 0.3% |
| Davide Campari-Milano S.p.A. | 422,670 | 4,997,849 |
| Health Care Equipment & Services 0.3% |
| Amplifon S.p.A. | 350,290 | 4,474,659 |
| Insurance 0.0% |
| Assicurazioni Generali S.p.A. | 4,730 | 74,923 |
| Poste Italiane S.p.A | 2,071 | 14,182 |
| UnipolSai Assicurazioni S.p.A. | 5,504 | 12,643 |
| | | 101,748 |
| Materials 0.2% |
| Buzzi Unicem S.p.A. | 155,620 | 3,998,865 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Recordati S.p.A. | 27,462 | 1,017,387 |
| Telecommunication Services 0.0% |
| Telecom Italia S.p.A. * | 46,380 | 41,167 |
| Transportation 0.0% |
| Atlantia S.p.A. | 1,647 | 41,767 |
| Utilities 0.0% |
| Enel S.p.A. | 30,819 | 146,519 |
| Terna - Rete Elettrica Nationale S.p.A. | 6,006 | 30,281 |
| | | 176,800 |
| | | 63,354,649 |
| |
| Japan 13.8% |
| Automobiles & Components 2.5% |
| Aisin Seiki Co., Ltd. | 800 | 39,182 |
| Bridgestone Corp. | 2,600 | 108,449 |
| Denso Corp. | 1,900 | 82,000 |
| F.C.C. Co., Ltd. | 123,500 | 2,358,110 |
| Honda Motor Co., Ltd. | 301,407 | 8,772,649 |
| Isuzu Motors Ltd. | 2,400 | 32,621 |
| Koito Manufacturing Co., Ltd. | 17,585 | 908,670 |
| Mazda Motor Corp. | 2,300 | 33,976 |
| Mitsubishi Motors Corp. | 2,700 | 17,292 |
| Musashi Seimitsu Industry Co., Ltd. | 110,000 | 2,701,899 |
| NGK Spark Plug Co., Ltd. | 700 | 15,181 |
| Nifco, Inc. | 193,900 | 9,682,718 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Nissan Motor Co., Ltd. | 9,700 | 92,398 |
| NOK Corp. | 400 | 9,534 |
| Stanley Electric Co., Ltd. | 600 | 17,569 |
| Subaru Corp. | 2,500 | 94,780 |
| Sumitomo Electric Industries Ltd. | 3,100 | 50,629 |
| Sumitomo Rubber Industries Ltd. | 800 | 14,399 |
| Suzuki Motor Corp. | 1,400 | 58,524 |
| The Yokohama Rubber Co., Ltd. | 500 | 9,818 |
| Toyo Tire & Rubber Co., Ltd. | 173,800 | 3,057,078 |
| Toyoda Gosei Co., Ltd. | 300 | 7,973 |
| Toyota Industries Corp. | 614 | 30,586 |
| Toyota Motor Corp. | 203,777 | 11,028,565 |
| Yamaha Motor Co., Ltd. | 1,100 | 26,123 |
| | | 39,250,723 |
| Banks 0.3% |
| Aozora Bank Ltd. | 5,000 | 18,219 |
| Concordia Financial Group Ltd. | 4,700 | 21,619 |
| Fukuoka Financial Group, Inc. | 3,000 | 13,686 |
| Japan Post Bank Co., Ltd. | 1,700 | 21,174 |
| Kyushu Financial Group, Inc. | 1,300 | 8,106 |
| Mebuki Financial Group, Inc. | 3,610 | 14,165 |
| Mitsubishi UFJ Financial Group, Inc. | 749,500 | 4,749,277 |
| Mizuho Financial Group, Inc. | 97,400 | 178,040 |
| Resona Holdings, Inc. | 8,900 | 49,477 |
| Seven Bank Ltd. | 2,900 | 9,740 |
| Shinsei Bank Ltd. | 7,000 | 13,069 |
| Sumitomo Mitsui Financial Group, Inc. | 5,500 | 204,218 |
| Sumitomo Mitsui Trust Holdings, Inc. | 1,300 | 44,532 |
| Suruga Bank Ltd. | 700 | 14,635 |
| The Bank of Kyoto Ltd. | 1,000 | 7,920 |
| The Chiba Bank Ltd. | 3,000 | 20,097 |
| The Chugoku Bank Ltd. | 700 | 10,399 |
| The Hachijuni Bank Ltd. | 1,511 | 8,923 |
| The Hiroshima Bank Ltd. | 2,086 | 9,005 |
| The Shizuoka Bank Ltd. | 2,454 | 20,713 |
| Yamaguchi Financial Group, Inc. | 1,274 | 14,115 |
| | | 5,451,129 |
| Capital Goods 2.1% |
| Amada Holdings Co., Ltd. | 1,326 | 15,765 |
| Asahi Glass Co., Ltd. | 4,000 | 34,658 |
| Daifuku Co., Ltd. | 154,715 | 3,910,831 |
| Daikin Industries Ltd. | 36,000 | 3,500,046 |
| DMG Mori Co., Ltd. | 200,900 | 3,317,329 |
| FANUC Corp. | 24,099 | 4,906,461 |
| Fuji Electric Co., Ltd. | 116,000 | 635,828 |
| Hino Motors Ltd. | 1,100 | 13,802 |
| Hitachi Construction Machinery Co., Ltd. | 500 | 12,890 |
| Hoshizaki Corp. | 200 | 16,687 |
| IHI Corp. * | 6,000 | 20,318 |
| ITOCHU Corp. | 102,929 | 1,456,442 |
| JGC Corp. | 800 | 13,970 |
| JTEKT Corp. | 900 | 14,197 |
| Kajima Corp. | 4,000 | 27,161 |
| Kawasaki Heavy Industries Ltd. | 6,000 | 18,166 |
| Keihan Holdings Co., Ltd. | 2,126 | 13,375 |
| Komatsu Ltd. | 68,100 | 1,819,736 |
| Kubota Corp. | 4,300 | 67,737 |
| Kurita Water Industries Ltd. | 500 | 12,911 |
| LIXIL Group Corp. | 1,100 | 27,492 |
| Mabuchi Motor Co., Ltd. | 200 | 11,290 |
| Makino Milling Machine Co., Ltd. | 164,000 | 1,461,047 |
| Makita Corp. | 1,000 | 35,680 |
| Marubeni Corp. | 6,645 | 40,958 |
| Minebea Mitsumi, Inc. | 41,587 | 601,634 |
| MISUMI Group, Inc. | 267,330 | 5,064,580 |
| Mitsubishi Corp. | 6,149 | 132,696 |
| Mitsubishi Electric Corp. | 7,800 | 108,860 |
| Security | Number
of Shares | Value ($) |
| Mitsubishi Heavy Industries Ltd. | 13,000 | 52,089 |
| Mitsui & Co., Ltd. | 6,900 | 97,432 |
| Nabtesco Corp. | 20,400 | 578,347 |
| Nachi-Fujikoshi Corp. | 544,000 | 2,900,719 |
| NGK Insulators Ltd. | 1,100 | 23,536 |
| Nichias Corp. | 51,000 | 520,598 |
| Nidec Corp. | 1,000 | 91,754 |
| NSK Ltd. | 1,800 | 24,615 |
| Obayashi Corp. | 2,600 | 25,243 |
| Seibu Holdings, Inc. | 700 | 12,229 |
| Shimizu Corp. | 2,000 | 19,180 |
| SMC Corp. | 237 | 66,802 |
| Sumitomo Corp. | 4,800 | 64,144 |
| Sumitomo Heavy Industries Ltd. | 2,000 | 13,952 |
| Taisei Corp. | 184,000 | 1,403,073 |
| THK Co., Ltd. | 500 | 12,897 |
| Toshiba Corp. * | 16,000 | 32,275 |
| TOTO Ltd. | 600 | 22,891 |
| Toyota Tsusho Corp. | 900 | 28,416 |
| | | 33,302,739 |
| Commercial & Professional Services 0.8% |
| Dai Nippon Printing Co., Ltd. | 2,000 | 22,265 |
| Nihon M&A Center, Inc. | 240,600 | 8,217,174 |
| Park24 Co., Ltd. | 28,200 | 727,612 |
| Recruit Holdings Co., Ltd. | 1,500 | 75,814 |
| Secom Co., Ltd. | 900 | 65,361 |
| Sohgo Security Services Co., Ltd. | 300 | 13,098 |
| Temp Holdings Co., Ltd. | 28,200 | 530,671 |
| Toppan Printing Co., Ltd. | 2,261 | 22,761 |
| Yumeshin Holdings Co., Ltd. | 444,900 | 3,098,432 |
| | | 12,773,188 |
| Consumer Durables & Apparel 0.2% |
| Asics Corp. | 600 | 10,619 |
| Bandai Namco Holdings, Inc. | 40,600 | 1,274,295 |
| Casio Computer Co., Ltd. | 1,036 | 14,601 |
| Haseko Corp. | 64,900 | 740,816 |
| Iida Group Holdings Co., Ltd. | 713 | 11,355 |
| Nikon Corp. | 1,400 | 19,986 |
| Panasonic Corp. | 9,000 | 107,624 |
| Rinnai Corp. | 100 | 8,316 |
| Sankyo Co., Ltd. | 200 | 6,975 |
| Sega Sammy Holdings, Inc. | 700 | 9,399 |
| Sekisui Chemical Co., Ltd. | 1,682 | 28,230 |
| Sekisui House Ltd. | 2,455 | 40,782 |
| Sharp Corp. * | 6,000 | 21,759 |
| Shimano, Inc. | 345 | 52,800 |
| Sony Corp. | 5,100 | 175,003 |
| Yamaha Corp. | 700 | 19,415 |
| | | 2,541,975 |
| Consumer Services 0.3% |
| Benesse Holdings, Inc. | 300 | 9,053 |
| McDonald's Holdings Co., Ltd. | 300 | 9,246 |
| Oriental Land Co., Ltd. | 900 | 51,691 |
| Resorttrust, Inc. | 237,200 | 4,082,821 |
| | | 4,152,811 |
| Diversified Financials 0.7% |
| Acom Co., Ltd. * | 2,000 | 8,884 |
| AEON Financial Service Co., Ltd. | 500 | 9,609 |
| Credit Saison Co., Ltd. | 711 | 12,955 |
| Daiwa Securities Group, Inc. | 805,900 | 4,902,590 |
| Japan Exchange Group, Inc. | 2,100 | 29,446 |
| Mitsubishi UFJ Lease & Finance Co., Ltd. | 2,200 | 11,497 |
| Nomura Holdings, Inc. | 14,700 | 88,341 |
| ORIX Corp. | 5,400 | 82,527 |
| SBI Holdings, Inc. | 836 | 11,597 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Tokai Tokyo Financial Holdings, Inc. | 456,500 | 2,310,937 |
| Zenkoku Hosho Co., Ltd. | 119,900 | 4,337,377 |
| | | 11,805,760 |
| Energy 0.0% |
| Idemitsu Kosan Co., Ltd. | 400 | 12,789 |
| Inpex Corp. | 3,800 | 36,413 |
| JXTG Holdings, Inc. | 12,485 | 56,333 |
| Showa Shell Sekiyu K.K. | 900 | 8,692 |
| | | 114,227 |
| Food & Staples Retailing 0.1% |
| Aeon Co., Ltd. | 2,700 | 40,017 |
| Cosmos Pharmaceutical Corp. | 4,600 | 930,749 |
| FamilyMart UNY Holdings Co., Ltd. | 300 | 16,958 |
| Lawson, Inc. | 229 | 15,194 |
| Seven & i Holdings Co., Ltd. | 3,100 | 130,925 |
| Sundrug Co., Ltd. | 200 | 7,014 |
| Tsuruha Holdings, Inc. | 5,900 | 597,241 |
| | | 1,738,098 |
| Food, Beverage & Tobacco 0.7% |
| Ajinomoto Co., Inc. | 2,178 | 42,441 |
| Ariake Japan Co., Ltd. | 62,800 | 3,978,492 |
| Asahi Group Holdings Ltd. | 94,800 | 3,581,895 |
| Calbee, Inc. | 300 | 10,488 |
| Coca-Cola Bottlers Japan, Inc. | 500 | 14,909 |
| Japan Tobacco, Inc. | 4,500 | 149,741 |
| Kikkoman Corp. | 314 | 9,664 |
| Kirin Holdings Co., Ltd. | 3,300 | 64,244 |
| MEIJI Holdings Co., Ltd. | 500 | 42,502 |
| NH Foods Ltd. | 409 | 11,658 |
| Nisshin Seifun Group, Inc. | 800 | 12,292 |
| Nissin Foods Holdings Co., Ltd. | 200 | 11,452 |
| Sakata Seed Corp. | 91,000 | 2,869,525 |
| Suntory Beverage & Food Ltd. | 600 | 27,033 |
| Toyo Suisan Kaisha Ltd. | 365 | 13,709 |
| Yakult Honsha Co., Ltd. | 400 | 22,798 |
| Yamazaki Baking Co., Ltd. | 500 | 10,553 |
| | | 10,873,396 |
| Health Care Equipment & Services 0.9% |
| Alfresa Holdings Corp. | 800 | 14,446 |
| Asahi Intecc Co., Ltd. | 10,000 | 444,562 |
| CYBERDYNE, Inc. * | 500 | 7,064 |
| Hogy Medical Co., Ltd. | 68,300 | 4,386,609 |
| Hoya Corp. | 62,500 | 2,987,049 |
| M3, Inc. | 800 | 20,451 |
| Medipal Holdings Corp. | 800 | 13,254 |
| Miraca Holdings, Inc. | 36,300 | 1,673,653 |
| Olympus Corp. | 92,200 | 3,555,031 |
| Suzuken Co., Ltd. | 300 | 9,927 |
| Sysmex Corp. | 600 | 36,545 |
| Terumo Corp. | 1,400 | 51,126 |
| Tsukui Corp. | 303,200 | 1,719,472 |
| | | 14,919,189 |
| Household & Personal Products 0.8% |
| Kao Corp. | 55,400 | 3,057,174 |
| Kose Corp. | 100 | 9,500 |
| Lion Corp. | 257,100 | 4,645,799 |
| Pigeon Corp. | 145,600 | 4,514,454 |
| Pola Orbis Holdings, Inc. | 39,600 | 914,475 |
| Shiseido Co., Ltd. | 1,500 | 40,636 |
| Unicharm Corp. | 1,600 | 38,911 |
| | | 13,220,949 |
| Insurance 0.3% |
| Dai-ichi Life Holdings, Inc. | 4,400 | 74,976 |
| Japan Post Holdings Co., Ltd. | 1,800 | 22,334 |
| Security | Number
of Shares | Value ($) |
| MS&AD Insurance Group Holdings, Inc. | 2,010 | 65,534 |
| Sompo Holdings, Inc. | 1,400 | 52,907 |
| Sony Financial Holdings, Inc. | 700 | 11,643 |
| T&D Holdings, Inc. | 2,400 | 35,687 |
| Tokio Marine Holdings, Inc. | 112,900 | 4,760,266 |
| | | 5,023,347 |
| Materials 0.4% |
| Air Water, Inc. | 578 | 11,133 |
| Asahi Kasei Corp. | 288,463 | 2,750,668 |
| Daicel Corp. | 1,100 | 12,628 |
| Hitachi Chemical Co., Ltd. | 20,700 | 592,830 |
| Hitachi Metals Ltd. | 1,000 | 14,004 |
| JFE Holdings, Inc. | 2,100 | 35,819 |
| JSR Corp. | 900 | 16,448 |
| Kaneka Corp. | 1,337 | 10,542 |
| Kansai Paint Co., Ltd. | 873 | 19,325 |
| Kanto Denka Kogyo Co., Ltd. | 117,100 | 1,029,787 |
| Kobe Steel Ltd. * | 1,400 | 12,438 |
| Kuraray Co., Ltd. | 1,400 | 22,595 |
| Maruichi Steel Tube Ltd. | 200 | 5,671 |
| Mitsubishi Chemical Holdings Corp. | 5,400 | 42,267 |
| Mitsubishi Gas Chemical Co., Inc. | 700 | 14,968 |
| Mitsubishi Materials Corp. | 404 | 12,030 |
| Mitsui Chemicals, Inc. | 4,000 | 20,467 |
| Mitsui Mining & Smelting Co., Ltd. | 178,858 | 603,493 |
| Nippon Paint Holdings Co., Ltd. | 700 | 26,851 |
| Nippon Steel & Sumitomo Metal Corp. | 3,300 | 74,318 |
| Nissan Chemical Industries Ltd. | 500 | 15,508 |
| Nitto Denko Corp. | 700 | 52,710 |
| Oji Holdings Corp. | 3,000 | 14,520 |
| Shin-Etsu Chemical Co., Ltd. | 1,624 | 141,154 |
| Sumitomo Chemical Co., Ltd. | 6,000 | 33,861 |
| Sumitomo Metal Mining Co., Ltd. | 2,000 | 27,083 |
| Taiheiyo Cement Corp. | 5,000 | 16,616 |
| Taiyo Nippon Sanso Corp. | 629 | 7,519 |
| Teijin Ltd. | 800 | 15,500 |
| Toray Industries, Inc. | 6,000 | 53,102 |
| Toyo Seikan Group Holdings Ltd. | 700 | 11,740 |
| | | 5,717,595 |
| Media 0.2% |
| Dentsu, Inc. | 900 | 50,802 |
| Hakuhodo DY Holdings, Inc. | 900 | 10,970 |
| Toho Co., Ltd. | 500 | 14,352 |
| Vector, Inc. | 241,300 | 3,343,246 |
| | | 3,419,370 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.5% |
| Astellas Pharma, Inc. | 8,700 | 114,728 |
| Chugai Pharmaceutical Co., Ltd. | 900 | 31,981 |
| Daiichi Sankyo Co., Ltd. | 2,400 | 53,337 |
| Eisai Co., Ltd. | 1,000 | 52,580 |
| Hisamitsu Pharmaceutical Co., Inc. | 300 | 15,358 |
| Kyowa Hakko Kirin Co., Ltd. | 1,100 | 18,899 |
| Mitsubishi Tanabe Pharma Corp. | 900 | 18,282 |
| Nippon Shinyaku Co., Ltd. | 52,700 | 2,802,525 |
| Ono Pharmaceutical Co., Ltd. | 1,700 | 35,065 |
| Otsuka Holdings Co., Ltd. | 1,600 | 73,694 |
| Santen Pharmaceutical Co., Ltd. | 1,500 | 21,106 |
| Shionogi & Co., Ltd. | 72,000 | 3,707,845 |
| Sumitomo Dainippon Pharma Co., Ltd. | 700 | 11,496 |
| Taisho Pharmaceutical Holdings Co., Ltd. | 100 | 8,228 |
| Takeda Pharmaceutical Co., Ltd. | 2,900 | 139,123 |
| | | 7,104,247 |
| Real Estate 0.0% |
| Aeon Mall Co., Ltd. | 500 | 8,503 |
| Daito Trust Construction Co., Ltd. | 300 | 44,146 |
| Daiwa House Industry Co., Ltd. | 2,300 | 68,377 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Daiwa House REIT Investment Corp. | 6 | 15,169 |
| Hulic Co., Ltd. | 1,200 | 11,317 |
| Japan Prime Realty Investment Corp. | 3 | 11,263 |
| Japan Real Estate Investment Corp. | 5 | 26,329 |
| Japan Retail Fund Investment Corp. | 10 | 19,536 |
| Mitsubishi Estate Co., Ltd. | 4,587 | 87,831 |
| Mitsui Fudosan Co., Ltd. | 4,000 | 88,009 |
| Nippon Building Fund, Inc. | 6 | 31,917 |
| Nippon Prologis REIT, Inc. | 6 | 12,679 |
| Nomura Real Estate Holdings, Inc. | 500 | 8,457 |
| Nomura Real Estate Master Fund, Inc. | 16 | 23,061 |
| Sumitomo Realty & Development Co., Ltd. | 1,495 | 40,388 |
| Tokyo Tatemono Co., Ltd. | 1,000 | 13,662 |
| Tokyu Fudosan Holdings Corp. | 2,000 | 10,923 |
| United Urban Investment Corp. | 12 | 18,139 |
| | | 539,706 |
| Retailing 0.2% |
| ABC-Mart, Inc. | 100 | 5,559 |
| Don Quijote Holdings Co., Ltd. | 500 | 18,217 |
| Fast Retailing Co., Ltd. | 230 | 75,122 |
| Hikari Tsushin, Inc. | 100 | 9,604 |
| Isetan Mitsukoshi Holdings Ltd. | 1,321 | 14,435 |
| J. Front Retailing Co., Ltd. | 1,000 | 14,415 |
| Marui Group Co., Ltd. | 800 | 10,956 |
| Nitori Holdings Co., Ltd. | 14,705 | 1,913,301 |
| Rakuten, Inc. | 3,800 | 38,928 |
| Ryohin Keikaku Co., Ltd. | 100 | 22,550 |
| Shimamura Co., Ltd. | 4,042 | 553,195 |
| Start Today Co., Ltd. | 19,800 | 422,498 |
| Takashimaya Co., Ltd. | 1,000 | 9,208 |
| USS Co., Ltd. | 900 | 15,922 |
| Yamada Denki Co., Ltd. | 2,500 | 13,129 |
| | | 3,137,039 |
| Semiconductors & Semiconductor Equipment 0.8% |
| Rohm Co., Ltd. | 400 | 28,091 |
| Sumco Corp. | 199,200 | 3,487,135 |
| Tokyo Electron Ltd. | 38,300 | 4,649,374 |
| Ulvac, Inc. | 106,000 | 4,976,485 |
| | | 13,141,085 |
| Software & Services 0.7% |
| Dena Co., Ltd. | 500 | 10,719 |
| Fujitsu Ltd. | 8,000 | 49,938 |
| GMO Payment Gateway, Inc. | 43,500 | 1,951,325 |
| Itochu Techno-Solutions Corp. | 121,700 | 3,543,287 |
| Kakaku.com, Inc. | 600 | 8,659 |
| Konami Holdings Corp. | 400 | 16,651 |
| LINE Corp. * | 200 | 6,901 |
| LINE Corp. ADR * | 16,244 | 557,819 |
| Mixi, Inc. | 201 | 11,150 |
| Nexon Co., Ltd. | 700 | 11,914 |
| Nintendo Co., Ltd. | 500 | 126,533 |
| Nomura Research Institute Ltd. | 560 | 19,500 |
| NTT Data Corp. | 500 | 23,217 |
| Obic Co., Ltd. | 300 | 16,208 |
| Oracle Corp., Japan | 8,100 | 466,677 |
| Otsuka Corp. | 200 | 10,713 |
| SCSK Corp. | 18,300 | 736,715 |
| SMS Co., Ltd. | 80,300 | 2,137,320 |
| TIS, Inc. | 22,200 | 559,568 |
| Trend Micro, Inc. | 500 | 21,999 |
| Yahoo Japan Corp. | 5,700 | 24,414 |
| | | 10,311,227 |
| Technology Hardware & Equipment 1.0% |
| Alps Electric Co., Ltd. | 52,500 | 1,543,117 |
| Anritsu Corp. | 375,200 | 3,034,603 |
| Brother Industries Ltd. | 1,000 | 20,576 |
| Security | Number
of Shares | Value ($) |
| Canon, Inc. | 4,365 | 144,865 |
| FUJIFILM Holdings Corp. | 1,800 | 66,806 |
| Hamamatsu Photonics K.K. | 600 | 17,644 |
| Hirose Electric Co., Ltd. | 100 | 13,440 |
| Hitachi High-Technologies Corp. | 300 | 11,976 |
| Hitachi Ltd. | 19,322 | 106,742 |
| Hitachi Maxell Ltd. | 106,400 | 2,102,604 |
| Keyence Corp. | 8,600 | 3,457,321 |
| Konica Minolta, Inc. | 1,800 | 15,935 |
| Kyocera Corp. | 1,300 | 73,626 |
| Murata Manufacturing Co., Ltd. | 824 | 110,684 |
| NEC Corp. | 11,000 | 27,351 |
| Nippon Electric Glass Co., Ltd. | 2,000 | 12,405 |
| Omron Corp. | 51,300 | 2,147,791 |
| Ricoh Co., Ltd. | 2,700 | 22,506 |
| Seiko Epson Corp. | 1,100 | 22,531 |
| Shimadzu Corp. | 1,000 | 16,976 |
| TDK Corp. | 500 | 30,978 |
| Topcon Corp. | 161,500 | 2,853,409 |
| Yaskawa Electric Corp. | 1,021 | 19,515 |
| Yokogawa Electric Corp. | 900 | 13,910 |
| | | 15,887,311 |
| Telecommunication Services 0.1% |
| KDDI Corp. | 7,400 | 196,204 |
| Nippon Telegraph & Telephone Corp. | 2,800 | 119,996 |
| NTT DOCOMO, Inc. | 5,600 | 135,504 |
| SoftBank Group Corp. | 3,431 | 260,250 |
| | | 711,954 |
| Transportation 0.0% |
| ANA Holdings, Inc. | 4,409 | 13,281 |
| Central Japan Railway Co. | 600 | 100,625 |
| East Japan Railway Co. | 1,338 | 120,076 |
| Hankyu Hanshin Holdings, Inc. | 1,000 | 33,033 |
| Japan Airlines Co., Ltd. | 500 | 15,791 |
| Japan Airport Terminal Co., Ltd. | 200 | 6,947 |
| Kamigumi Co., Ltd. | 1,000 | 9,087 |
| Keikyu Corp. | 2,000 | 22,958 |
| Keio Corp. | 2,000 | 16,017 |
| Keisei Electric Railway Co., Ltd. | 533 | 12,685 |
| Kintetsu Group Holdings Co., Ltd. | 7,000 | 25,563 |
| Mitsubishi Logistics Corp. | 1,000 | 12,938 |
| Mitsui O.S.K. Lines Ltd. | 5,000 | 15,308 |
| Nagoya Railroad Co., Ltd. | 4,000 | 18,375 |
| Nippon Express Co., Ltd. | 3,000 | 16,468 |
| Nippon Yusen K.K. * | 6,000 | 12,063 |
| Odakyu Electric Railway Co., Ltd. | 1,200 | 23,295 |
| Tobu Railway Co., Ltd. | 4,000 | 20,287 |
| Tokyu Corp. | 4,000 | 28,650 |
| West Japan Railway Co. | 641 | 42,831 |
| Yamato Holdings Co., Ltd. | 1,400 | 30,253 |
| | | 596,531 |
| Utilities 0.2% |
| Chubu Electric Power Co., Inc. | 2,631 | 35,326 |
| Electric Power Development Co., Ltd. | 600 | 13,919 |
| eRex Co., Ltd. | 263,900 | 3,163,532 |
| Hokuriku Electric Power Co. | 800 | 7,394 |
| Kyushu Electric Power Co., Inc. | 1,700 | 18,338 |
| Osaka Gas Co., Ltd. | 8,000 | 29,946 |
| The Chugoku Electric Power Co., Inc. | 1,100 | 11,992 |
| The Kansai Electric Power Co., Inc. | 2,900 | 39,191 |
| Toho Gas Co., Ltd. | 1,330 | 9,507 |
| Tohoku Electric Power Co., Inc. | 1,800 | 23,997 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Tokyo Electric Power Co. Holdings, Inc. * | 5,800 | 22,530 |
| Tokyo Gas Co., Ltd. | 8,000 | 37,143 |
| | | 3,412,815 |
| | | 219,146,411 |
| |
| Luxembourg 0.0% |
| Telecommunication Services 0.0% |
| Millicom International Cellular S.A. SDR | 257 | 14,082 |
| |
| Mexico 0.8% |
| Banks 0.2% |
| Grupo Financiero Banorte S.A.B. de C.V., Class O | 407,200 | 2,356,645 |
| Grupo Financiero Santander Mexico S.A.B. de C.V., Class B | 234,121 | 425,330 |
| | | 2,781,975 |
| Food, Beverage & Tobacco 0.1% |
| Arca Continental S.A.B. de C.V. | 166,904 | 1,231,217 |
| Media 0.5% |
| Grupo Televisa S.A.B. ADR | 326,500 | 7,933,950 |
| | | 11,947,142 |
| |
| Netherlands 2.0% |
| Banks 0.0% |
| ABN AMRO Group N.V. CVA | 1,141 | 29,955 |
| ING Groep N.V. | 15,672 | 255,446 |
| | | 285,401 |
| Capital Goods 0.5% |
| AerCap Holdings N.V. * | 636 | 29,262 |
| Boskalis Westminster N.V. | 43,110 | 1,585,707 |
| Koninklijke Philips N.V. | 185,134 | 6,393,135 |
| | | 8,008,104 |
| Commercial & Professional Services 0.3% |
| Randstad Holding N.V. | 39,214 | 2,337,858 |
| RELX N.V. | 4,022 | 77,720 |
| Wolters Kluwer N.V. | 71,031 | 3,014,141 |
| | | 5,429,719 |
| Energy 0.0% |
| Koninklijke Vopak N.V. | 333 | 15,028 |
| Food & Staples Retailing 0.0% |
| Koninklijke Ahold Delhaize N.V. | 5,179 | 107,284 |
| Food, Beverage & Tobacco 0.4% |
| Heineken Holding N.V. | 402 | 33,690 |
| Heineken N.V. | 932 | 83,128 |
| Refresco Group N.V. | 280,627 | 5,482,227 |
| | | 5,599,045 |
| Household & Personal Products 0.0% |
| Unilever N.V. CVA | 6,606 | 346,058 |
| Insurance 0.3% |
| Aegon N.V. | 7,364 | 37,585 |
| ASR Nederland N.V. * | 145,360 | 4,300,603 |
| NN Group N.V. | 1,274 | 42,239 |
| | | 4,380,427 |
| Materials 0.3% |
| Akzo Nobel N.V. | 24,341 | 2,128,915 |
| ArcelorMittal * | 7,439 | 58,458 |
| Koninklijke DSM N.V. | 734 | 52,524 |
| OCI N.V. * | 94,020 | 1,829,487 |
| | | 4,069,384 |
| Security | Number
of Shares | Value ($) |
| Media 0.0% |
| Altice N.V., Class A * | 1,473 | 36,599 |
| Altice N.V., Class B * | 431 | 10,720 |
| | | 47,319 |
| Real Estate 0.0% |
| Unibail-Rodamco SE | 401 | 98,462 |
| Semiconductors & Semiconductor Equipment 0.2% |
| ASML Holding N.V. | 17,254 | 2,281,483 |
| NXP Semiconductors N.V. * | 1,189 | 125,737 |
| | | 2,407,220 |
| Software & Services 0.0% |
| Gemalto N.V. | 322 | 18,028 |
| Telecommunication Services 0.0% |
| Koninklijke KPN N.V. | 13,632 | 39,410 |
| | | 30,850,889 |
| |
| New Zealand 1.8% |
| Consumer Services 0.3% |
| SKYCITY Entertainment Group Ltd. | 1,352,351 | 4,043,693 |
| Food, Beverage & Tobacco 0.3% |
| a2 Milk Co., Ltd. * | 1,800,300 | 4,177,107 |
| Health Care Equipment & Services 0.2% |
| Fisher & Paykel Healthcare Corp., Ltd. | 566,440 | 3,918,633 |
| Ryman Healthcare Ltd. | 1,821 | 10,786 |
| | | 3,929,419 |
| Materials 0.0% |
| Fletcher Building Ltd. | 2,756 | 16,173 |
| Telecommunication Services 0.0% |
| Spark New Zealand Ltd. | 7,180 | 18,196 |
| Transportation 0.5% |
| Auckland International Airport Ltd. | 1,728,415 | 8,190,269 |
| Utilities 0.5% |
| Contact Energy Ltd. | 2,757 | 9,862 |
| Mercury NZ Ltd. | 3,435,064 | 7,582,626 |
| Meridian Energy Ltd. | 6,222 | 11,827 |
| | | 7,604,315 |
| | | 27,979,172 |
| |
| Norway 0.4% |
| Banks 0.0% |
| DNB A.S.A. | 3,951 | 61,660 |
| Energy 0.2% |
| Aker BP A.S.A | 190,870 | 3,231,636 |
| Statoil A.S.A. | 4,538 | 74,736 |
| Subsea 7 S.A. | 44,864 | 739,342 |
| | | 4,045,714 |
| Food, Beverage & Tobacco 0.0% |
| Marine Harvest A.S.A. * | 1,525 | 25,373 |
| Orkla A.S.A. | 3,249 | 29,478 |
| | | 54,851 |
| Insurance 0.0% |
| Gjensidige Forsikring A.S.A. | 794 | 12,198 |
| Materials 0.0% |
| Norsk Hydro A.S.A. | 5,363 | 30,562 |
| Yara International A.S.A. | 708 | 26,327 |
| | | 56,889 |
| Media 0.0% |
| Schibsted A.S.A., B Shares | 341 | 7,637 |
| Schibsted A.S.A., Class A | 393 | 9,768 |
| | | 17,405 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Telecommunication Services 0.0% |
| Telenor A.S.A. | 3,036 | 49,042 |
| Transportation 0.2% |
| Golden Ocean Group Ltd. * | 358,310 | 2,759,991 |
| | | 7,057,750 |
| |
| Papua New Guinea 0.0% |
| Energy 0.0% |
| Oil Search Ltd. | 5,462 | 29,473 |
| |
| Peru 0.1% |
| Banks 0.1% |
| Credicorp Ltd. | 13,946 | 2,142,942 |
| |
| Portugal 0.0% |
| Banks 0.0% |
| Banco Espirito Santo S.A. *(e) | 42,176 | — |
| Energy 0.0% |
| Galp Energia, SGPS, S.A. | 1,999 | 31,067 |
| Food & Staples Retailing 0.0% |
| Jeronimo Martins, SGPS, S.A. | 1,001 | 18,369 |
| Utilities 0.0% |
| EDP - Energias de Portugal S.A. | 9,679 | 31,943 |
| | | 81,379 |
| |
| Republic of Korea 2.0% |
| Consumer Durables & Apparel 0.2% |
| HS Industries Co., Ltd. | 267,790 | 2,386,349 |
| Health Care Equipment & Services 0.2% |
| Vieworks Co., Ltd. | 48,600 | 2,812,318 |
| Household & Personal Products 0.2% |
| Korea Kolmar Co., Ltd. | 45,740 | 3,224,499 |
| Materials 0.1% |
| SK Materials Co., Ltd. | 12,600 | 1,951,829 |
| Media 0.4% |
| CJ CGV Co., Ltd. | 53,270 | 4,000,426 |
| Loen Entertainment, Inc. | 38,340 | 2,961,671 |
| | | 6,962,097 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.2% |
| Medy-Tox, Inc. | 7,220 | 3,172,869 |
| Technology Hardware & Equipment 0.7% |
| Samsung Electronics Co., Ltd. | 5,345 | 10,478,484 |
| | | 30,988,445 |
| |
| Russia 0.0% |
| Food & Staples Retailing 0.0% |
| X5 Retail Group N.V. GDR * | 15,991 | 563,683 |
| |
| Singapore 1.9% |
| Banks 0.0% |
| DBS Group Holdings Ltd. | 7,216 | 99,656 |
| Oversea-Chinese Banking Corp., Ltd. | 12,738 | 89,213 |
| United Overseas Bank Ltd. | 5,341 | 83,158 |
| | | 272,027 |
| Capital Goods 0.2% |
| Jardine Matheson Holdings Ltd. | 1,009 | 64,932 |
| Jardine Strategic Holdings Ltd. | 900 | 38,030 |
| Keppel Corp., Ltd. | 5,800 | 26,967 |
| Sarine Technologies Ltd. | 1,433,700 | 1,970,228 |
| Sembcorp Industries Ltd. | 3,800 | 8,233 |
| Security | Number
of Shares | Value ($) |
| Singapore Technologies Engineering Ltd. | 6,200 | 16,819 |
| Yangzijiang Shipbuilding Holdings Ltd. | 7,700 | 6,327 |
| | | 2,131,536 |
| Consumer Services 0.0% |
| Genting Singapore plc | 28,700 | 22,866 |
| Diversified Financials 0.0% |
| Singapore Exchange Ltd. | 3,200 | 16,957 |
| Food, Beverage & Tobacco 0.0% |
| Golden Agri-Resources Ltd. | 34,700 | 8,927 |
| Wilmar International Ltd. | 7,600 | 19,304 |
| | | 28,231 |
| Media 0.0% |
| Singapore Press Holdings Ltd. | 6,300 | 15,635 |
| Real Estate 0.8% |
| Ascendas Real Estate Investment Trust | 3,747,033 | 6,867,561 |
| CapitaLand Commercial Trust | 10,000 | 11,622 |
| CapitaLand Ltd. | 10,200 | 27,407 |
| CapitaLand Mall Trust | 3,967,500 | 5,594,563 |
| City Developments Ltd. | 1,927 | 14,870 |
| Global Logistic Properties Ltd. | 10,600 | 21,838 |
| Suntec Real Estate Investment Trust | 9,324 | 11,807 |
| UOL Group Ltd. | 2,100 | 10,877 |
| | | 12,560,545 |
| Retailing 0.0% |
| Jardine Cycle & Carriage Ltd. | 411 | 13,908 |
| Telecommunication Services 0.0% |
| Singapore Telecommunications Ltd. | 33,100 | 88,610 |
| StarHub Ltd. | 3,300 | 6,581 |
| | | 95,191 |
| Transportation 0.9% |
| ComfortDelGro Corp., Ltd. | 8,400 | 16,459 |
| Hutchison Port Holdings Trust, Class U | 25,700 | 10,404 |
| SATS Ltd. | 2,285,300 | 8,333,339 |
| SIA Engineering Co., Ltd. | 2,155,800 | 5,769,289 |
| Singapore Airlines Ltd. | 2,131 | 15,611 |
| | | 14,145,102 |
| | | 29,301,998 |
| |
| South Africa 0.4% |
| Capital Goods 0.0% |
| The Bidvest Group Ltd. | 32,115 | 383,326 |
| Diversified Financials 0.0% |
| RMB Holdings Ltd. | 109,839 | 503,761 |
| Food & Staples Retailing 0.2% |
| Bid Corp., Ltd. | 32,115 | 680,358 |
| Dis-Chem Pharmacies Ltd. * | 1,499,922 | 2,766,669 |
| The SPAR Group Ltd. | 51,300 | 691,437 |
| | | 4,138,464 |
| Insurance 0.1% |
| Sanlam Ltd. | 169,858 | 902,028 |
| Materials 0.1% |
| Kumba Iron Ore Ltd. * | 67,870 | 882,347 |
| | | 6,809,926 |
| |
| Spain 0.7% |
| Banks 0.2% |
| Banco Bilbao Vizcaya Argentaria S.A. | 27,078 | 216,941 |
| Banco De Sabadell S.A. | 21,398 | 41,157 |
| Banco Popular Espanol S.A. * | 12,700 | 8,887 |
| Banco Santander S.A. | 58,998 | 384,485 |
| Bankia S.A. | 18,661 | 22,658 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Bankinter S.A. | 182,392 | 1,605,589 |
| CaixaBank S.A. | 14,582 | 66,209 |
| | | 2,345,926 |
| Capital Goods 0.0% |
| ACS Actividades de Construccion y Servicios S.A. | 957 | 35,458 |
| Ferrovial S.A. | 1,960 | 41,694 |
| Zardoya Otis S.A. | 881 | 8,153 |
| | | 85,305 |
| Commercial & Professional Services 0.0% |
| Prosegur Cia de Seguridad S.A. | 72,450 | 472,966 |
| Energy 0.0% |
| Enagas S.A. | 903 | 23,728 |
| Repsol S.A. | 4,561 | 71,988 |
| | | 95,716 |
| Food & Staples Retailing 0.0% |
| Distribuidora Internacional de Alimentacion S.A. | 2,418 | 14,377 |
| Insurance 0.0% |
| Mapfre S.A. | 4,274 | 14,908 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Grifols S.A. | 1,188 | 31,887 |
| Retailing 0.0% |
| Industria de Diseno Textil S.A. | 4,409 | 168,958 |
| Software & Services 0.3% |
| Amadeus IT Group S.A. | 80,930 | 4,367,730 |
| Telecommunication Services 0.0% |
| Telefonica S.A. | 18,419 | 203,713 |
| Transportation 0.2% |
| Abertis Infraestructuras S.A. | 2,568 | 45,144 |
| Aena S.A. | 15,643 | 2,758,054 |
| International Consolidated Airlines Group S.A. | 3,376 | 24,466 |
| | | 2,827,664 |
| Utilities 0.0% |
| Endesa S.A. | 1,266 | 29,818 |
| Gas Natural SDG S.A. | 1,395 | 31,524 |
| Iberdrola S.A. | 22,342 | 160,611 |
| Red Electrica Corp. S.A. | 1,726 | 33,638 |
| | | 255,591 |
| | | 10,884,741 |
| |
| Sweden 4.1% |
| Automobiles & Components 0.1% |
| Dometic Group AB | 134,290 | 1,000,512 |
| Banks 0.2% |
| Nordea Bank AB | 12,276 | 150,980 |
| Skandinaviska Enskilda Banken AB, A Shares | 6,142 | 70,727 |
| Svenska Handelsbanken AB, A Shares | 6,153 | 87,298 |
| Swedbank AB, A Shares | 147,549 | 3,496,916 |
| | | 3,805,921 |
| Capital Goods 1.6% |
| Alfa Laval AB | 1,168 | 23,934 |
| Assa Abloy AB, Class B | 4,052 | 87,705 |
| Atlas Copco AB, A Shares | 2,715 | 101,419 |
| Atlas Copco AB, B Shares | 54,579 | 1,813,666 |
| Eltel AB | 268,232 | 1,746,181 |
| Saab AB, Class B | 129,100 | 6,397,131 |
| Sandvik AB | 4,312 | 69,130 |
| Skanska AB, B Shares | 1,356 | 32,411 |
| Security | Number
of Shares | Value ($) |
| SKF AB, B Shares | 411,806 | 9,037,148 |
| Volvo AB, B Shares | 322,133 | 5,260,708 |
| | | 24,569,433 |
| Commercial & Professional Services 0.5% |
| AF AB, B Shares | 353,944 | 7,458,635 |
| Intrum Justitia AB | 22,958 | 911,989 |
| Securitas AB, B Shares | 1,246 | 20,594 |
| | | 8,391,218 |
| Consumer Durables & Apparel 0.0% |
| Electrolux AB, B Shares | 958 | 28,431 |
| Husqvarna AB, B Shares | 62,618 | 622,483 |
| | | 650,914 |
| Consumer Services 0.2% |
| Scandic Hotels Group AB * | 325,300 | 3,662,096 |
| Diversified Financials 0.0% |
| Industrivarden AB, C Shares | 637 | 14,813 |
| Investor AB, B Shares | 1,841 | 84,118 |
| Kinnevik AB, Class B | 933 | 24,898 |
| LE Lundbergfortagen AB, B Shares | 187 | 13,540 |
| | | 137,369 |
| Energy 0.0% |
| Lundin Petroleum AB * | 743 | 14,168 |
| Food & Staples Retailing 0.0% |
| ICA Gruppen AB | 397 | 13,548 |
| Food, Beverage & Tobacco 0.4% |
| AAK AB | 87,268 | 6,245,951 |
| Swedish Match AB | 752 | 24,798 |
| | | 6,270,749 |
| Health Care Equipment & Services 0.0% |
| Getinge AB, B Shares | 777 | 15,177 |
| Household & Personal Products 0.0% |
| Svenska Cellulosa AB, S.C.A., B Shares | 2,459 | 81,411 |
| Materials 0.3% |
| Boliden AB | 47,020 | 1,343,281 |
| Hexpol AB | 53,801 | 597,709 |
| SSAB AB, A Shares * | 558,200 | 2,428,430 |
| | | 4,369,420 |
| Real Estate 0.1% |
| Fabege AB | 29,688 | 511,226 |
| Hufvudstaden AB, A Shares | 30,997 | 485,646 |
| | | 996,872 |
| Retailing 0.7% |
| Hennes & Mauritz AB, B Shares | 444,338 | 11,002,030 |
| Technology Hardware & Equipment 0.0% |
| Hexagon AB, B Shares | 1,045 | 45,479 |
| Telefonaktiebolaget LM Ericsson, B Shares | 12,410 | 80,626 |
| | | 126,105 |
| Telecommunication Services 0.0% |
| Tele2 AB, B Shares | 1,405 | 14,139 |
| Telia Co. AB | 10,509 | 42,786 |
| | | 56,925 |
| | | 65,163,868 |
| |
| Switzerland 5.5% |
| Capital Goods 0.5% |
| ABB Ltd. | 7,608 | 186,428 |
| Belimo Holding AG | 605 | 2,262,518 |
| Burckhardt Compression Holding AG | 9,308 | 2,855,545 |
| Daetwyler Holding AG | 15,053 | 2,547,666 |
| dormakaba Holding AG, Series B * | 689 | 590,350 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Geberit AG | 150 | 68,326 |
| Schindler Holding AG | 242 | 48,994 |
| | | 8,559,827 |
| Commercial & Professional Services 0.2% |
| Adecco Group AG | 32,932 | 2,446,907 |
| SGS S.A. | 22 | 49,540 |
| | | 2,496,447 |
| Consumer Durables & Apparel 0.8% |
| Cie Financiere Richemont S.A. | 91,810 | 7,671,504 |
| The Swatch Group AG | 197 | 15,283 |
| The Swatch Group AG - Bearer Shares | 13,640 | 5,456,935 |
| | | 13,143,722 |
| Diversified Financials 1.2% |
| Cembra Money Bank AG | 6,955 | 593,348 |
| Credit Suisse Group AG * | 976,239 | 14,888,586 |
| Julius Baer Group Ltd. * | 905 | 47,193 |
| Pargesa Holding S.A. | 133 | 9,944 |
| Partners Group Holding AG | 5,061 | 3,059,406 |
| UBS Group AG | 14,781 | 252,324 |
| | | 18,850,801 |
| Food, Beverage & Tobacco 0.3% |
| Aryzta AG * | 336 | 10,909 |
| Barry Callebaut AG * | 9 | 12,360 |
| Chocoladefabriken Lindt & Spruengli AG | 4 | 22,492 |
| Nestle S.A. | 54,418 | 4,191,300 |
| | | 4,237,061 |
| Health Care Equipment & Services 0.4% |
| Sonova Holding AG | 212 | 31,349 |
| Straumann Holding AG | 11,790 | 6,223,417 |
| | | 6,254,766 |
| Insurance 0.0% |
| Baloise Holding AG | 199 | 29,180 |
| Swiss Life Holding AG * | 128 | 41,656 |
| Swiss Re AG | 1,310 | 113,943 |
| Zurich Insurance Group AG | 608 | 168,257 |
| | | 353,036 |
| Materials 0.5% |
| EMS-Chemie Holding AG | 33 | 20,678 |
| Givaudan S.A. | 37 | 71,288 |
| LafargeHolcim Ltd. * | 125,900 | 7,139,590 |
| Sika AG | 9 | 57,441 |
| Syngenta AG * | 374 | 173,810 |
| | | 7,462,807 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.3% |
| Actelion Ltd. * | 392 | 104,719 |
| Galenica AG | 16 | 17,385 |
| Lonza Group AG * | 15,748 | 3,222,197 |
| Novartis AG | 9,054 | 697,023 |
| Roche Holding AG | 2,849 | 745,482 |
| | | 4,786,806 |
| Real Estate 0.0% |
| Swiss Prime Site AG * | 284 | 24,621 |
| Retailing 0.1% |
| Dufry AG * | 6,043 | 990,186 |
| Semiconductors & Semiconductor Equipment 0.2% |
| U-Blox AG * | 16,923 | 3,750,562 |
| Software & Services 0.3% |
| Temenos Group AG * | 51,430 | 4,451,565 |
| Technology Hardware & Equipment 0.3% |
| Logitech International S.A. | 165,640 | 5,535,887 |
| Telecommunication Services 0.0% |
| Swisscom AG | 104 | 45,353 |
| Security | Number
of Shares | Value ($) |
| Transportation 0.4% |
| Kuehne & Nagel International AG | 45,315 | 6,853,227 |
| | | 87,796,674 |
| |
| Taiwan 1.2% |
| Capital Goods 0.2% |
| Airtac International Group | 310,000 | 3,543,703 |
| Consumer Durables & Apparel 0.1% |
| Basso Industry Corp. | 775,000 | 2,208,361 |
| Semiconductors & Semiconductor Equipment 0.5% |
| Silergy Corp. | 189,000 | 3,417,691 |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 151,000 | 972,726 |
| Taiwan Semiconductor Manufacturing Co., Ltd. ADR | 88,707 | 2,933,541 |
| | | 7,323,958 |
| Technology Hardware & Equipment 0.4% |
| Advanced Ceramic X Corp. | 219,000 | 2,306,061 |
| Merry Electronics Co., Ltd. | 601,000 | 3,557,581 |
| | | 5,863,642 |
| | | 18,939,664 |
| |
| Thailand 0.2% |
| Food, Beverage & Tobacco 0.1% |
| Taokaenoi Food & Marketing PCL | 3,295,100 | 2,238,648 |
| Materials 0.1% |
| PTT Global Chemical PCL | 355,700 | 771,249 |
| | | 3,009,897 |
| |
| United Arab Emirates 0.1% |
| Banks 0.1% |
| Dubai Islamic Bank PJSC | 815,042 | 1,302,554 |
| |
| United Kingdom 16.6% |
| Automobiles & Components 0.0% |
| GKN plc | 6,834 | 31,759 |
| Banks 1.5% |
| Barclays plc | 68,742 | 188,243 |
| HSBC Holdings plc | 80,374 | 662,790 |
| Lloyds Banking Group plc | 17,399,890 | 15,634,237 |
| Royal Bank of Scotland Group plc * | 1,914,766 | 6,573,740 |
| Standard Chartered plc * | 13,270 | 124,013 |
| | | 23,183,023 |
| Capital Goods 3.7% |
| Ashtead Group plc | 256,628 | 5,413,805 |
| BAE Systems plc | 344,205 | 2,795,623 |
| Bunzl plc | 58,088 | 1,810,840 |
| CNH Industrial N.V. | 1,288,474 | 14,208,716 |
| Cobham plc | 8,004 | 13,736 |
| Diploma plc | 406,566 | 5,839,816 |
| IMI plc | 1,063 | 17,605 |
| Meggitt plc | 570,669 | 3,417,488 |
| Rolls-Royce Holdings plc * | 7,435 | 78,153 |
| Smiths Group plc | 151,875 | 3,228,627 |
| Spirax-Sarco Engineering plc | 147,989 | 9,964,870 |
| The Weir Group plc | 862 | 22,210 |
| Travis Perkins plc | 981 | 20,460 |
| Ultra Electronics Holdings plc | 245,760 | 6,652,055 |
| Wolseley plc | 71,599 | 4,550,624 |
| | | 58,034,628 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Commercial & Professional Services 1.4% |
| Babcock International Group plc | 60,664 | 706,676 |
| Capita plc | 2,611 | 18,819 |
| Experian plc | 212,874 | 4,579,506 |
| G4S plc | 1,296,893 | 5,120,816 |
| Interserve plc | 737,190 | 2,205,606 |
| Intertek Group plc | 19,569 | 1,029,940 |
| RELX plc | 4,406 | 89,330 |
| Rentokil Initial plc | 2,749,450 | 8,864,457 |
| | | 22,615,150 |
| Consumer Durables & Apparel 0.5% |
| Barratt Developments plc | 3,997 | 29,992 |
| Bellway plc | 163,973 | 6,043,302 |
| Burberry Group plc | 90,939 | 1,900,467 |
| Persimmon plc | 1,229 | 37,083 |
| Taylor Wimpey plc | 13,011 | 33,702 |
| The Berkeley Group Holdings plc | 540 | 22,776 |
| | | 8,067,322 |
| Consumer Services 0.5% |
| Carnival plc | 770 | 47,457 |
| Compass Group plc | 256,328 | 5,175,464 |
| Domino's Pizza Group plc | 109,357 | 467,927 |
| Greene King plc | 270,402 | 2,631,427 |
| InterContinental Hotels Group plc | 748 | 39,645 |
| Merlin Entertainments plc | 2,820 | 18,458 |
| TUI AG | 1,988 | 28,922 |
| Whitbread plc | 741 | 38,715 |
| William Hill plc | 3,364 | 12,781 |
| | | 8,460,796 |
| Diversified Financials 1.4% |
| 3i Group plc | 264,603 | 2,719,331 |
| Aberdeen Asset Management plc | 3,582 | 12,943 |
| Ashmore Group plc | 1,058,420 | 4,770,585 |
| Close Brothers Group plc | 27,788 | 608,818 |
| Hargreaves Lansdown plc | 1,036 | 18,496 |
| Intermediate Capital Group plc | 68,326 | 691,576 |
| Investec plc | 2,575 | 19,077 |
| Jupiter Fund Management plc | 120,967 | 744,094 |
| London Stock Exchange Group plc | 1,275 | 55,866 |
| NEX Group plc | 498,710 | 3,975,692 |
| Provident Financial plc | 23,205 | 963,176 |
| Schroders plc | 176,140 | 7,273,564 |
| Schroders plc, Non-Voting Shares | 1,100 | 33,040 |
| | | 21,886,258 |
| Energy 0.3% |
| BP plc | 76,731 | 439,255 |
| Petrofac Ltd. | 1,007 | 10,613 |
| Royal Dutch Shell plc, A Shares (d) | 17,935 | 465,744 |
| Royal Dutch Shell plc, A Shares (d) | 79,933 | 2,084,239 |
| Royal Dutch Shell plc, B Shares | 15,188 | 404,106 |
| TechnipFMC plc * | 54,660 | 1,643,251 |
| | | 5,047,208 |
| Food & Staples Retailing 0.0% |
| J. Sainsbury plc | 6,526 | 23,268 |
| Tesco plc * | 33,047 | 78,428 |
| WM Morrison Supermarkets plc | 8,839 | 27,457 |
| | | 129,153 |
| Food, Beverage & Tobacco 1.0% |
| Associated British Foods plc | 1,441 | 52,465 |
| British American Tobacco plc | 94,144 | 6,360,678 |
| Coca-Cola European Partners plc | 865 | 32,732 |
| Coca-Cola HBC AG CDI * | 719 | 19,947 |
| Diageo plc | 270,375 | 7,869,847 |
| Fevertree Drinks plc | 19,613 | 413,282 |
| Security | Number
of Shares | Value ($) |
| Greencore Group plc | 265,272 | 783,092 |
| Imperial Brands plc | 3,874 | 189,723 |
| Tate & Lyle plc | 1,823 | 17,878 |
| | | 15,739,644 |
| Health Care Equipment & Services 0.0% |
| Mediclinic International plc | 1,464 | 15,564 |
| Smith & Nephew plc | 3,607 | 59,260 |
| | | 74,824 |
| Household & Personal Products 0.3% |
| Reckitt Benckiser Group plc | 2,556 | 235,503 |
| Unilever plc | 91,870 | 4,726,555 |
| | | 4,962,058 |
| Insurance 0.1% |
| Admiral Group plc | 841 | 21,900 |
| Aviva plc | 16,404 | 111,554 |
| Direct Line Insurance Group plc | 5,477 | 24,750 |
| Hiscox Ltd. | 68,459 | 1,003,938 |
| Legal & General Group plc | 24,065 | 76,697 |
| Old Mutual plc | 19,936 | 50,071 |
| Prudential plc | 10,423 | 231,326 |
| RSA Insurance Group plc | 4,063 | 31,346 |
| St. James's Place plc | 2,101 | 31,228 |
| Standard Life plc | 7,879 | 37,084 |
| | | 1,619,894 |
| Materials 2.7% |
| Anglo American plc * | 5,668 | 81,151 |
| Antofagasta plc | 1,567 | 17,002 |
| BHP Billiton plc | 8,536 | 130,133 |
| Croda International plc | 200,177 | 9,757,268 |
| Elementis plc | 569,915 | 2,245,362 |
| Fresnillo plc | 878 | 16,508 |
| Glencore plc * | 5,331,046 | 20,951,748 |
| Johnson Matthey plc | 772 | 29,779 |
| Mondi plc | 1,464 | 37,876 |
| Randgold Resources Ltd. | 373 | 32,811 |
| Rio Tinto plc | 4,999 | 197,212 |
| RPC Group plc | 289,800 | 3,044,318 |
| Victrex plc | 254,801 | 6,320,231 |
| | | 42,861,399 |
| Media 0.6% |
| Cineworld Group plc | 647,228 | 5,901,285 |
| ITV plc | 14,455 | 39,312 |
| Pearson plc | 3,274 | 27,006 |
| Sky plc | 4,171 | 53,582 |
| UBM plc | 102,182 | 939,806 |
| WPP plc | 156,880 | 3,359,349 |
| | | 10,320,340 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.4% |
| AstraZeneca plc | 5,130 | 307,232 |
| GlaxoSmithKline plc | 271,656 | 5,467,850 |
| Hikma Pharmaceuticals plc | 571 | 14,327 |
| | | 5,789,409 |
| Real Estate 0.1% |
| Hammerson plc | 3,152 | 23,981 |
| Intu Properties plc | 3,656 | 13,058 |
| Land Securities Group plc | 3,198 | 45,801 |
| Segro plc | 144,445 | 908,550 |
| The British Land Co., plc | 3,899 | 33,154 |
| | | 1,024,544 |
| Retailing 0.4% |
| ASOS plc * | 72,430 | 5,458,987 |
| Dixons Carphone plc | 3,823 | 16,607 |
| Kingfisher plc | 8,978 | 39,718 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Marks & Spencer Group plc | 6,475 | 30,731 |
| Next plc | 557 | 31,049 |
| WH Smith plc | 39,555 | 905,937 |
| | | 6,483,029 |
| Software & Services 0.2% |
| Auto Trader Group plc | 3,893 | 20,220 |
| Micro Focus International plc | 41,526 | 1,391,326 |
| Moneysupermarket.com Group plc | 102,524 | 459,284 |
| Playtech plc | 59,153 | 734,651 |
| The Sage Group plc | 4,305 | 37,368 |
| Worldpay Group plc | 7,170 | 27,845 |
| | | 2,670,694 |
| Technology Hardware & Equipment 1.2% |
| Halma plc | 386,943 | 5,277,307 |
| Laird plc | 2,334,605 | 4,535,668 |
| Renishaw plc | 14,617 | 646,552 |
| Spectris plc | 255,123 | 9,120,009 |
| | | 19,579,536 |
| Telecommunication Services 0.0% |
| BT Group plc | 34,106 | 134,546 |
| Inmarsat plc | 1,758 | 18,592 |
| Vodafone Group plc | 107,947 | 278,033 |
| | | 431,171 |
| Transportation 0.3% |
| BBA Aviation plc | 1,012,940 | 4,086,219 |
| easyJet plc | 768 | 11,617 |
| Royal Mail plc | 3,646 | 19,012 |
| | | 4,116,848 |
| Utilities 0.0% |
| Centrica plc | 22,107 | 56,648 |
| National Grid plc | 15,214 | 196,995 |
| Severn Trent plc | 939 | 28,267 |
| SSE plc | 4,074 | 73,390 |
| United Utilities Group plc | 2,719 | 34,265 |
| | | 389,565 |
| | | 263,518,252 |
| |
| United States 0.5% |
| Insurance 0.5% |
| Willis Towers Watson plc | 60,166 | 7,979,215 |
| Total Common Stock |
| (Cost $1,246,233,340) | | 1,519,220,474 |
|
| Preferred Stock 1.1% of net assets |
| |
| Brazil 0.5% |
| Banks 0.3% |
| Itau Unibanco Holding S.A. | 395,350 | 4,890,106 |
| Energy 0.2% |
| Petroleo Brasileiro S.A. * | 790,900 | 3,481,002 |
| | | 8,371,108 |
| |
| Germany 0.6% |
| Automobiles & Components 0.0% |
| Bayerische Motoren Werke AG | 214 | 17,598 |
| Porsche Automobil Holding SE | 611 | 35,759 |
| Schaeffler AG | 807 | 13,919 |
| Volkswagen AG | 750 | 119,060 |
| | | 186,336 |
| Security | Number
of Shares | Value ($) |
| Capital Goods 0.2% |
| Jungheinrich AG | 73,770 | 2,568,684 |
| Health Care Equipment & Services 0.3% |
| Sartorius AG | 57,060 | 5,223,956 |
| Household & Personal Products 0.0% |
| Henkel AG & Co. KGaA | 720 | 97,966 |
| Materials 0.1% |
| Fuchs Petrolub SE | 11,715 | 604,251 |
| | | 8,681,193 |
| |
| Italy 0.0% |
| Banks 0.0% |
| Intesa Sanpaolo S.p.A. - RSP | 4,119 | 11,278 |
| Telecommunication Services 0.0% |
| Telecom Italia S.p.A. - RSP * | 25,361 | 18,099 |
| | | 29,377 |
| |
| United Kingdom 0.0% |
| Capital Goods 0.0% |
| Rolls-Royce Holdings plc *(e) | 527,885 | 684 |
| Total Preferred Stock |
| (Cost $14,283,224) | | 17,082,362 |
|
| Other Investment Companies 2.8% of net assets |
| |
| Equity Fund 0.0% |
| iShares MSCI EAFE ETF | 305 | 19,459 |
| |
| Money Market Fund 2.8% |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (a) | 45,468,633 | 45,468,633 |
| Total Other Investment Companies |
| (Cost $45,488,117) | | 45,488,092 |
|
| Rights 0.0% of net assets |
| |
| Australia 0.0% |
| Telecommunication Services 0.0% |
TPG Telecom Ltd.
expires 05/12/17 *(e) | 157 | 76 |
| |
| United Kingdom 0.0% |
| Capital Goods 0.0% |
Cobham plc
expires 05/4/17 * | 3,202 | 2,364 |
| Total Rights |
| (Cost $2,658) | | 2,440 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 0.0% of net assets |
| |
| U.S. Treasury Obligations 0.0% |
| United States Treasury Bills |
| 0.71%, 06/15/17 (b)(c) | 5,000 | 4,996 |
| 0.75%, 06/15/17 (b)(c) | 25,000 | 24,979 |
| Total Short-Term Investments |
| (Cost $29,972) | | 29,975 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,326,303,856 and the unrealized appreciation and depreciation were $289,149,100 and ($33,629,613), respectively, with a net unrealized appreciation of $255,519,487.
At 04/30/17, the values of certain foreign securities held by the fund aggregating $1,301,744,767 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial note 2(a) for additional information)
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| (b) | All or a portion of this security is held as collateral for open futures contracts. |
| (c) | The rate shown is the purchase yield. |
| (d) | Securities are traded on separate exchanges for the same entity. |
| (e) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| CDI — | CHESS Depositary Interest |
| CVA — | Dutch Certificate |
| ETF — | Exchange-traded fund |
| GDR — | Global Depositary Receipt |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
| SDR — | Swedish Depositary Receipt |
| |
| AUD — | Australian dollar |
| CHF — | Swiss franc |
| NZD — | New Zealand dollar |
| USD — | U.S. dollar |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI EAFE Index, e-mini, Long expires 06/16/17 | 250 | 22,797,500 | 674,753 |
Expiration
Date | Counterparty | Currency
to be
Received | Amount of
Currency
to be
Received | Currency
to be
Delivered | Amount of
Currency
to be
Delivered | Unrealized
Appreciation
(Depreciation)
($) |
| Forward Foreign Currency Exchange Contracts | | | | | | |
| 06/21/2017 | State Street Bank & Trust Co. | USD | 1,362,739 | AUD | 1,864,000 | (31,796) |
| 09/20/2017 | State Street Bank & Trust Co. | USD | 4,377,735 | CHF | 4,372,000 | (55,793) |
| 07/28/2017 | State Street Bank & Trust Co. | USD | 16,410,734 | NZD | 23,657,500 | 201,838 |
| Net Unrealized Appreciation on Forward Foreign Currency Exchange Contracts | 114,249 |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
Assets Valuation Input
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Common Stock1 | $— | $179,239,501 | $— | $179,239,501 | |
| Austria 1 | — | 97,398 | — | 97,398 | |
| Materials | 4,354,870 | 18,844 | — | 4,373,714 | |
| Belgium 1 | — | 8,857,504 | — | 8,857,504 | |
| Semiconductors & Semiconductor Equipment | 2,057,998 | — | — | 2,057,998 | |
| Brazil 1 | 13,359,438 | — | — | 13,359,438 | |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Canada 1 | $81,142,030 | $— | $— | $81,142,030 | |
| China 1 | — | 39,390,889 | — | 39,390,889 | |
| Retailing | 2,218,854 | — | — | 2,218,854 | |
| Software & Services | 15,040,546 | 4,966,331 | — | 20,006,877 | |
| France 1 | — | 130,105,877 | — | 130,105,877 | |
| Capital Goods | 4,520,995 | 19,198,069 | — | 23,719,064 | |
| Real Estate | 522,921 | 69,478 | — | 592,399 | |
| Software & Services | 4,854,866 | 2,892,664 | — | 7,747,530 | |
| Transportation | 15,739 | 34,497 | — | 50,236 | |
| Germany 1 | — | 91,139,390 | — | 91,139,390 | |
| Capital Goods | 5,573,082 | 32,659,058 | — | 38,232,140 | |
| Utilities | 20,294 | 101,232 | — | 121,526 | |
| Hong Kong1 | — | 6,402,894 | — | 6,402,894 | |
| Consumer Durables & Apparel | 11,860 | 35,321 | — | 47,181 | |
| Consumer Services | 2,680,863 | 8,170,008 | — | 10,850,871 | |
| Semiconductors & Semiconductor Equipment | 3,087,663 | — | — | 3,087,663 | |
| Technology Hardware & Equipment | — | 2,596,470 | — * | 2,596,470 | |
| Telecommunication Services | 19,342 | 2,746,854 | — | 2,766,196 | |
| India 1 | — | 20,250,026 | — | 20,250,026 | |
| Software & Services | 4,295,200 | 5,854,814 | — | 10,150,014 | |
| Ireland 1 | — | 190,981 | — | 190,981 | |
| Capital Goods | 973,230 | 32,595 | — | 1,005,825 | |
| Food, Beverage & Tobacco | 52,382 | 6,505,535 | — | 6,557,917 | |
| Pharmaceuticals, Biotechnology & Life Sciences | 779,758 | 3,399,853 | — | 4,179,611 | |
| Israel 1 | — | 120,792 | — | 120,792 | |
| Pharmaceuticals, Biotechnology & Life Sciences | 125,177 | — | — | 125,177 | |
| Software & Services | 4,010,212 | 15,941 | — | 4,026,153 | |
| Italy 1 | — | 62,337,262 | — | 62,337,262 | |
| Pharmaceuticals, Biotechnology & Life Sciences | 1,017,387 | — | — | 1,017,387 | |
| Japan 1 | — | 208,295,478 | — | 208,295,478 | |
| Real Estate | 50,056 | 489,650 | — | 539,706 | |
| Software & Services | 557,819 | 9,753,408 | — | 10,311,227 | |
| Mexico 1 | 11,947,142 | — | — | 11,947,142 | |
| Netherlands 1 | — | 20,435,565 | — | 20,435,565 | |
| Capital Goods | 29,262 | 7,978,842 | — | 8,008,104 | |
| Semiconductors & Semiconductor Equipment | 125,737 | 2,281,483 | — | 2,407,220 | |
| New Zealand1 | — | 20,374,857 | — | 20,374,857 | |
| Utilities | 7,582,626 | 21,689 | — | 7,604,315 | |
| Peru 1 | 2,142,942 | — | — | 2,142,942 | |
| Portugal 1 | — | 81,379 | — | 81,379 | |
| Banks | — | — | — * | — | |
| Republic of Korea1 | — | 24,026,348 | — | 24,026,348 | |
| Media | 2,961,671 | 4,000,426 | — | 6,962,097 | |
| Russia 1 | 563,683 | — | — | 563,683 | |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Description | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Other Significant
Observable Inputs
(Level 2) | Significant
Unobservable Inputs
(Level 3) | Total | |
| Singapore 1 | $— | $27,170,462 | $— | $27,170,462 | |
| Capital Goods | 1,970,228 | 161,308 | — | 2,131,536 | |
| South Africa1 | — | 2,671,462 | — | 2,671,462 | |
| Food & Staples Retailing | 2,766,669 | 1,371,795 | — | 4,138,464 | |
| Switzerland 1 | — | 74,999,786 | — | 74,999,786 | |
| Capital Goods | 5,118,063 | 3,441,764 | — | 8,559,827 | |
| Food, Beverage & Tobacco | 22,492 | 4,214,569 | — | 4,237,061 | |
| Taiwan 1 | — | 11,615,706 | — | 11,615,706 | |
| Semiconductors & Semiconductor Equipment | 2,933,541 | 4,390,417 | — | 7,323,958 | |
| Thailand 1 | 3,009,897 | — | — | 3,009,897 | |
| United Kingdom1 | — | 141,402,680 | — | 141,402,680 | |
| Capital Goods | 5,853,552 | 52,181,076 | — | 58,034,628 | |
| Commercial & Professional Services | 2,205,606 | 20,409,544 | — | 22,615,150 | |
| Diversified Financials | 3,975,692 | 17,910,566 | — | 21,886,258 | |
| Technology Hardware & Equipment | 13,655,677 | 5,923,859 | — | 19,579,536 | |
| United States1 | 7,979,215 | — | — | 7,979,215 | |
| Preferred Stock1 | — | 8,710,570 | — | 8,710,570 | |
| Brazil 1 | 8,371,108 | — | — | 8,371,108 | |
| United Kingdom1 | — | — | 684 | 684 | |
| Other Investment Companies1 | 45,488,092 | — | — | 45,488,092 | |
| Rights | | | | | |
| Australia 1 | — | — | 76 | 76 | |
| United Kingdom1 | 2,364 | — | — | 2,364 | |
| Short-Term Investments1 | — | 29,975 | — | 29,975 | |
| Total | $280,047,841 | $1,301,774,742 | $760 | $1,581,823,343 | |
| Other Financial Instruments | | | | | |
| Futures Contracts2 | $674,753 | $— | $— | $674,753 | |
| Forward Foreign Currency Exchange Contracts2 | — | 201,838 | — | 201,838 | |
Liabilities Valuation Input
| | | | | |
| | | | | |
| Other Financial Instruments | | | | | |
| Forward Foreign Currency Exchange Contracts2 | $— | ($87,589) | $— | ($87,589) | |
| * | Level 3 amount shown includes securities determined to have no value at April 30, 2017. |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts and forward foreign currency exchange contracts are not included in Investments in the schedule of Portfolio Holdings and are valued at unrealized appreciation or depreciation. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were security transfers in the amount of $10,488,567 and $26,964,846 from Level 1 to Level 2 and from Level 2 to Level 1, respectively, for the period ended April 30, 2017. The transfers between Level 1 and Level 2 were primarily due to the use of international fair valuation by the fund. There were no transfers in or out of Level 3 during the period.
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments, at value (cost $1,306,037,311) | | $1,581,823,343 |
| Foreign currency, at value (cost $2,124,573) | | 2,119,892 |
| Deposit with broker for futures contracts | | 1,957,200 |
| Receivables: | | |
| Investments sold | | 5,499,980 |
| Dividends | | 4,271,475 |
| Foreign tax reclaims | | 2,174,665 |
| Fund shares sold | | 336,346 |
| Unrealized appreciation on forward foreign currency exchange contracts | | 201,838 |
| Prepaid expenses | + | 28,073 |
| Total assets | | 1,598,412,812 |
| Liabilities |
| Payables: | | |
| Investments bought | | 9,528,919 |
| Investment adviser and administrator fees | | 1,360,469 |
| Shareholder service fees | | 152,639 |
| Independent trustees' fees | | 629 |
| Fund shares redeemed | | 942,081 |
| Foreign capital gains tax | | 158,794 |
| Variation margin on futures contracts | | 42,500 |
| Unrealized depreciation on forward foreign currency exchange contracts | | 87,589 |
| Accrued expenses and other liabilities | + | 274,764 |
| Total liabilities | | 12,548,384 |
| Net Assets |
| Total assets | | 1,598,412,812 |
| Total liabilities | – | 12,548,384 |
| Net assets | | $1,585,864,428 |
| Net Assets by Source | | |
| Capital received from investors | | 1,336,257,808 |
| Net investment income not yet distributed | | 1,275,137 |
| Net realized capital losses | | (28,004,501) |
| Net unrealized capital appreciation | | 276,335,984 |
| Net Asset Value (NAV) by Shares Class | |
| Share Class | Net Assets | ÷ | Shares
Outstanding | = | NAV |
| Investor Shares | $457,842,107 | | 19,404,433 | | $23.59 |
| Select Shares | $1,128,022,321 | | 47,869,218 | | $23.56 |
| | | | | | |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends (net of foreign withholding tax of $1,434,206) | | $13,923,232 |
| Expenses |
| Investment adviser and administrator fees | | 9,497,120 |
| Shareholder service fees: | | |
| Investor Shares | | 509,414 |
| Select Shares | | 856,488 |
| Custodian fees | | 476,271 |
| Portfolio accounting fees | | 84,825 |
| Shareholder reports | | 45,573 |
| Transfer agent fees | | 35,709 |
| Professional fees | | 30,279 |
| Registration fees | | 21,672 |
| Independent trustees' fees | | 8,626 |
| Interest expense | | 479 |
| Other expenses | + | 25,666 |
| Total expenses | | 11,592,122 |
| Expense reduction by CSIM and its affiliates | – | 1,928,896 |
| Net expenses | – | 9,663,226 |
| Net investment income | | 4,260,006 |
| Realized and Unrealized Gains (Losses) |
| Net realized gains on investments | | 2,021,488 |
| Net realized gains on futures contracts | | 2,078,274 |
| Net realized gains on foreign currency transactions | + | 714,594 |
| Net realized gains | | 4,814,356 |
| Net change in unrealized appreciation (depreciation) on investments (net of change in foreign capital gains tax of $71,553) | | 166,858,475 |
| Net change in unrealized appreciation (depreciation) on futures contracts | | 1,138,251 |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | (28,905) |
| Net change in unrealized appreciation (depreciation) | + | 167,967,821 |
| Net realized and unrealized gains | | 172,782,177 |
| Increase in net assets resulting from operations | | $177,042,183 |
Laudus MarketMasters Funds | Semiannual Report
Laudus International MarketMasters Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $4,260,006 | $14,639,509 |
| Net realized gains (losses) | | 4,814,356 | (9,854,169) |
| Net change in unrealized appreciation (depreciation) | + | 167,967,821 | (18,810,623) |
| Increase (decrease) in net assets from operations | | 177,042,183 | (14,025,283) |
| Distributions to Shareholders | |
| Distributions from net investment income | | | |
| Investor Shares | | (3,023,945) | (6,292,923) |
| Select Shares | + | (9,031,598) | (18,622,940) |
| Total distributions from net investment income | | (12,055,543) | (24,915,863) |
| Distributions from net realized gains | | | |
| Investor Shares | | — | (28,099,826) |
| Select Shares | + | — | (72,880,802) |
| Total distributions from net realized gains | | — | (100,980,628) |
| Total distributions | | ($12,055,543) | ($125,896,491) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares Sold | | | | | |
| Investor Shares | | 271,333 | $5,914,639 | 751,766 | $15,557,806 |
| Select Shares | + | 1,471,328 | 31,389,169 | 4,875,860 | 100,112,035 |
| Total shares sold | | 1,742,661 | $37,303,808 | 5,627,626 | $115,669,841 |
| Shares Reinvested | | | | | |
| Investor Shares | | 128,906 | $2,663,205 | 1,484,420 | $30,682,952 |
| Select Shares | + | 260,814 | 5,377,990 | 2,403,803 | 49,590,453 |
| Total shares reinvested | | 389,720 | $8,041,195 | 3,888,223 | $80,273,405 |
| Shares Redeemed | | | | | |
| Investor Shares | | (2,124,993) | ($46,050,846) | (4,715,236) | ($97,117,882) |
| Select Shares | + | (4,100,819) | (88,744,928) | (18,470,059) | (379,624,146) |
| Total shares redeemed | | (6,225,812) | ($134,795,774) | (23,185,295) | ($476,742,028) |
| Net transactions in fund shares | | (4,093,431) | ($89,450,771) | (13,669,446) | ($280,798,782) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 71,367,082 | $1,510,328,559 | 85,036,528 | $1,931,049,115 |
| Total increase or decrease | + | (4,093,431) | 75,535,869 | (13,669,446) | (420,720,556) |
| End of period | | 67,273,651 | $1,585,864,428 | 71,367,082 | $1,510,328,559 |
| Net investment income not yet distributed | | | $1,275,137 | | $9,070,674 |
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Financial Notes, unaudited
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) |
| Laudus Small-Cap MarketMasters Fund | Schwab Target 2045 Fund |
| Laudus International MarketMasters Fund | Schwab Target 2050 Fund |
| Schwab ® S&P 500 Index Fund | Schwab Target 2055 Fund |
| Schwab Small-Cap Index Fund® | Schwab Target 2060 Fund |
| Schwab Total Stock Market Index Fund® | Schwab Fundamental US Large Company Index Fund |
| Schwab International Index Fund® | Schwab Fundamental US Small Company Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Fundamental International Large Company Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Fundamental International Small Company Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Fundamental Global Real Estate Index Fund |
| Schwab Balanced Fund™ | Schwab Target 2010 Index Fund |
| Schwab Core Equity Fund™ | Schwab Target 2015 Index Fund |
| Schwab Dividend Equity Fund™ | Schwab Target 2020 Index Fund |
| Schwab Large-Cap Growth Fund™ | Schwab Target 2025 Index Fund |
| Schwab Small-Cap Equity Fund™ | Schwab Target 2030 Index Fund |
| Schwab Hedged Equity Fund™ | Schwab Target 2035 Index Fund |
| Schwab Health Care Fund™ | Schwab Target 2040 Index Fund |
| Schwab ® International Core Equity Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab® Monthly Income Fund - Moderate Payout |
| Schwab Target 2030 Fund | Schwab® Monthly Income Fund - Enhanced Payout |
| Schwab Target 2035 Fund | Schwab® Monthly Income Fund - Maximum Payout |
| Schwab Target 2040 Fund | |
Each fund in this report offers two share classes: Investor Shares and Select Shares®. Shares of each class represent an interest in the same portfolio, but each class has different expenses and investment minimums.
Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund or share class, as applicable. Each share has a par value of 1/1,000 of a cent, and the funds' Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The funds invest in certain other investment companies (underlying funds). For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC).
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at the mean of the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
• Foreign equity security fair valuation: The Board has adopted procedures to fair value foreign equity securities that are traded in markets that close prior to the funds valuing their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the NAV of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. The Board regularly reviews fair value determinations made by the funds pursuant to these procedures.
• Futures contracts and forward foreign currency exchange contracts (forwards): Futures contracts are valued at their settlement prices as of the close of their exchanges. Forwards are valued based on that day's forward exchange rates or by using an interpolated forward exchange rate for contracts with interim settlement dates.
• Short-term securities (60 days or less to maturity): A short-term security may be valued at its amortized cost when it approximates the security's market value.
• Underlying funds: Mutual funds are valued at their respective NAVs. Exchange-traded funds (ETFs) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.
• Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)—Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets.
• Level 3—significant unobservable inputs (including the funds' own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds' results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds' investments as of April 30, 2017 are disclosed in the Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their market value may change daily.
Forward Foreign Currency Exchange Contracts: Forwards are contracts to buy and sell a currency at a set price on a future date. The value of the forwards is accounted for as unrealized appreciation or depreciation until the contracts settle, at which time the gains or losses are realized.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the differences between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized appreciation to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures contract or forward position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
In 2015, the Laudus International MarketMasters Fund filed claims to recover taxes previously withheld in certain European Union countries on the basis that those countries had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. These filings are subject to various administrative and judicial proceedings within these countries, and all professional fees associated with these filings have been paid by CSIM. No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty surrounding the ultimate resolution of proceedings, the likelihood of receipt of these claims, and the potential timing of payment.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
For funds offering multiple share classes, the net investment income, other than class specific expenses, and the realized and unrealized gains or losses, are allocated daily to each class in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Custody Credit:
The funds have an arrangement with their custodian bank, State Street Bank and Trust Company (State Street), under which the funds may receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the funds’ operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of April 30, 2017, if any, are reflected in each fund's Statement of Assets and Liabilities.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds' prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
Investment Style Risk. The funds’ investment managers attempt to reduce the impact of the performance of any given investment style by investing in both value and growth style stocks. But whenever value stocks fall out of favor with investors, they may underperform growth stocks, and vice versa.
Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, a fund’s performance could be impacted.
Small-Cap Company Risk. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.
Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Mid-Cap Company Risk. Mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies and the value of securities issued by these companies may move sharply.
Management Risk. As with all actively managed funds, a fund is subject to the risk that its investment adviser and investment managers will select investments or allocate assets in a manner that could cause the fund to underperform or otherwise not meet its objective. Poor stock selection or a focus on securities in a particular sector may cause a fund to underperform its benchmark or other funds with a similar investment objective.
Foreign Investment Risk. A fund's investments in securities of foreign issuers involve certain risks that may be greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These restrictions may negatively impact the value or liquidity of a fund's investments, and could impair the fund's ability to meet its investment objective or invest in accordance with its investment strategy. These risks may be heightened in connection with investments in emerging markets.
Emerging Markets Risk. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in developed countries. As a result, there will tend to be an increased risk of price volatility associated with a fund's investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar, and, at times, it may be difficult to value such investments.
Currency Risk. As a result of a fund’s investments in securities denominated in, and/or receiving revenues in, foreign currencies, the fund will be subject to currency risk. This is the risk that those currencies will decline in value relative to the U.S. dollar. If such an event occurs, the dollar value of an investment in the fund would be adversely affected.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
Derivatives Risk. A fund’s use of derivative instruments involves risks different from, or possibly greater than the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk, market risk and management risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to credit risk, leverage risk, lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause a fund to realize higher amounts of short-term capital gains. A fund's use of derivatives could reduce the fund's performance, increase its volatility, and could cause the fund to lose more than the initial amount invested.
Multi-Manager Risk. Although CSIM monitors and seeks to coordinate the overall management of a fund, each investment manager makes investment decisions independently, and it is possible that the investment styles of the investment managers may not complement one another. As a result, a fund's exposure to a given stock, industry or investment style could unintentionally be smaller or larger than if a fund had a single manager.
Liquidity Risk. A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or a fund may have to sell them at a loss.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
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 between CSIM and the trust.
For its advisory and administrative services to the funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
| % of Average Daily Net Assets | Laudus Small-Cap
MarketMasters Fund | Laudus International
MarketMasters Fund |
| First $500 million | 1.17% | 1.29% |
| $500 million to $1 billion | 1.13% | 1.275% |
| Over $1 billion | 1.07% | 1.25% |
For the period ended April 30, 2017, the aggregate advisory fee paid to CSIM by the Laudus Small-Cap MarketMasters Fund and the Laudus International MarketMasters Fund were 1.17% and 1.27%, respectively, as a percentage of each fund's average daily net assets.
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enables a fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, Schwab) (together, “service providers”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds.
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee of up to 0.20% for Select Shares and 0.25% for Investor Shares. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds), and a fund will pay no more than 0.20% for Select Shares and 0.25% for Investor Shares of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service provider. Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Expense Limitation
Although these agreements specify certain fees for these services, CSIM and its affiliates have made an additional agreement with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (expense limitation). The expense limitation as a percentage of average daily net assets is as follows:
| | Laudus Small-Cap
MarketMasters Fund | Laudus International
MarketMasters Fund |
| Investor Shares | 1.35% | 1.40% |
| Select Shares | 1.20% | 1.25% |
Investments from Affiliates
Certain Schwab funds may own shares of other Schwab funds. The table below reflects the percentage of shares of each fund in this report that are owned by other Schwab funds as of April 30, 2017, as applicable:
| | Underlying Funds | |
| | Laudus Small-Cap
MarketMasters Fund | Laudus International
MarketMasters Fund |
| Schwab Balanced Fund | 17.7% | —% |
| Schwab Monthly Income Fund - Enhanced Payout | —% | 0.5% |
| Schwab Monthly Income Fund - Maximum Payout | —% | 0.1% |
| Schwab Monthly Income Fund - Moderate Payout | —% | 0.4% |
| Schwab Target 2010 Fund | 0.2% | 0.2% |
| Schwab Target 2015 Fund | 0.4% | 0.4% |
| Schwab Target 2020 Fund | 3.3% | 2.6% |
| Schwab Target 2025 Fund | 0.4% | 2.8% |
| Schwab Target 2030 Fund | 9.6% | 6.0% |
| Schwab Target 2035 Fund | 5.1% | 3.0% |
| Schwab Target 2040 Fund | 13.8% | 7.5% |
| Schwab Target 2045 Fund | 1.7% | 0.9% |
| Schwab Target 2050 Fund | 1.4% | 0.7% |
| Schwab Target 2055 Fund | 0.9% | 0.4% |
| Schwab Target 2060 Fund | 0.1% | 0.0%* |
Other Affiliated Transactions
The professional fees related to foreign withholding tax claims discussed in financial note 2 were non-routine expenses. However, the investment adviser agreed to pay these professional fees, subject to reimbursement by the Laudus International MarketMasters Fund to the extent the fund is able to successfully recover taxes withheld in the future. As of April 30, 2017, the balance of professional fees related to foreign withholding tax subject to future reimbursement to the investment adviser was $136,485 for Laudus International MarketMasters Fund.
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Financial Notes, unaudited (continued)
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other U.S. registered investment companies managed by CSIM in a joint, syndicated, committed $555 million line of credit (the Credit Facility). Under the terms of the Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund paid a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the Credit Facility. There were no borrowings from the line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended April 30, 2017, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
| | Purchases
of Securities | Sales/Maturities
of Securities |
| Laudus Small-Cap MarketMasters Fund | $113,464,225 | $124,206,899 |
| Laudus International MarketMasters Fund | 563,825,696 | 648,706,955 |
8. Derivatives:
The funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The fair value and variation margin for futures contracts held at April 30, 2017 are presented on the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the funds' accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended April 30, 2017, the month-end average contract values of futures contracts held by the funds and the month-end average number of contracts held were as follows:
| | Contract Values | Number of Contracts |
| Laudus Small-Cap MarketMasters Fund | $745,911 | 9 |
| Laudus International MarketMasters Fund | 29,398,414 | 344 |
The Laudus International MarketMasters Fund invested in forwards during the report period. The fund invested in forwards in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates and to hedge exposure to certain currencies. Refer to financial note 2(b) for the fund’s accounting policies with respect to forwards and financial note 3 for disclosures concerning the risks of investing in forwards. During the period ended April 30, 2017, the month-end average forward foreign currency notional amount and the month-end average unrealized appreciation were $29,483,451 and $385,139 respectively.
As of April 30, 2017, the derivatives contracts held by the funds, categorized by primary risk exposure, were:
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Financial Notes, unaudited (continued)
8. Derivatives (continued):
| | Laudus Small-Cap
MarketMasters Fund | | Laudus International
MarketMasters Fund |
| Asset Derivatives | Fair Value | |
| Equity Index - Futures Contracts1 | $11,771 | | $674,753 |
| Forward Foreign Currency Exchange Contracts2 | — | | 201,838 |
| Total | $11,771 | | $876,591 |
| Liability Derivatives | Fair Value | |
| Equity Index - Futures Contracts3 | $— | | $— |
| Forward Foreign Currency Exchange Contracts4 | — | | (87,589) |
| Total | $— | | ($87,589) |
| 1 | Includes cumulative unrealized appreciation of futures contracts as reported in the Schedule of Portfolio Holdings. Only current day's variation margin is reported within the Statement of Assets and Liabilities. |
| 2 | Statement of Assets and Liabilities location: Unrealized appreciation on forward foreign currency exchange contracts. |
| 3 | Includes cumulative unrealized depreciation of futures contracts as reported in the Schedule of Portfolio Holdings. Only current day's variation margin is reported within the Statement of Assets and Liabilities. |
| 4 | Statement of Assets and Liabilities location: Unrealized depreciation on forward foreign currency exchange contracts. |
The effects of the derivatives held by the funds in the Statement of Operations for the period ended April 30, 2017 were:
| | Laudus Small-Cap
MarketMasters Fund | Laudus International
MarketMasters Fund |
| Equity Index Futures Contracts | | |
| Realized Gains (Losses)1 | $43,211 | $2,078,274 |
| Change in Unrealized Appreciation (Depreciation)2 | 30,574 | 1,138,251 |
| Forward Foreign Currency Exchange Contracts | | |
| Realized Gains (Losses)1 | $— | $1,025,271 |
| Change in Unrealized Appreciation (Depreciation)2 | — | (109,472) |
| 1 | Statement of Operations location: Net realized gains (losses) on futures contracts and net realized gains (losses) on foreign currency transactions. |
| 2 | Statement of Operations location: Net change in unrealized appreciation (depreciation) on futures contracts and net change in unrealized appreciation (depreciation) on foreign currency translations. |
The funds' forwards are entered into pursuant to International Swaps and Derivatives Association, Inc. (ISDA) agreements which govern certain terms of derivative transactions. ISDA agreements typically contain, among other things, master netting provisions in the event of a default or other termination event. Master netting provisions allow the funds and the counterparty, in the event of a default or other termination event, to offset payable and receivable amounts for each party related to derivative contracts to one net amount payable by either the funds or the counterparty. The Laudus International MarketMasters Fund's forwards, which are
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Laudus MarketMasters Funds
Financial Notes, unaudited (continued)
8. Derivatives (continued):
reported gross in the Statement of Assets and Liabilities, are presented in the table below. The following table presents the fund's forwards, net of amounts available for offset under a master netting agreement and net of any related collateral received by the fund for assets and pledged by the fund for liabilities as of April 30, 2017.
| | | | Gross Amounts Not Offset in the
Statement of Assets & Liabilities |
| Counterparty | Net Amounts of Assets
Presented in the
Statement of Assets and Liabilities | | Financial
Instruments | | Cash Collateral
Received | | Net
Amounts(a) |
| State Street Bank & Trust Co. | $201,838 | | ($87,589) | | $— | | $114,249 |
| Total | $201,838 | | ($87,589) | | $— | | $114,249 |
| Counterparty | Net Amounts of Liabilities
Presented in the
Statement of Assets and Liabilities | | Financial
Instruments | | Cash Collateral
Pledged | | Net
Amounts(b) |
| State Street Bank & Trust Co. | ($87,589) | | $87,589 | | $— | | $— |
| Total | ($87,589) | | $87,589 | | $— | | $— |
| a | Represents the net amount due from the counterparty in the event of default. |
| b | Represents the net amount due to the counterparty in the event of default. |
9. Redemption Fee:
Prior to February 28, 2017, the funds charged a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds on the Statement of Changes in Net Assets. Effective February 28, 2017, the funds no longer charge redemption fees. The redemption fees charged during the current and prior periods were as follows:
| | Current Period
(11/1/16-4/30/17) | Prior Period
(11/1/15-10/31/16) |
| Laudus Small-Cap MarketMasters Fund | $202 | $110 |
| Laudus International MarketMasters Fund | 2,807 | 11,152 |
10. Federal Income Taxes:
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2016, the Laudus International MarketMasters Fund had capital loss carryforwards of $13,160,449 available to offset future net capital gains.
As of October 31, 2016, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2016, the funds did not incur any interest or penalties.
11. Recent Regulatory Development:
In October 2016, the SEC adopted new rules and amended existing rules (together, final rules) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the funds' financial statements and related disclosures.
12. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Approval of New Sub-Advisory Agreement
At a meeting of the Board held on December 13, 2016, CSIM recommended, and the Trustees, including a majority of the Independent Trustees, approved a new investment sub-advisory agreement between Charles Schwab Investment Management, Inc. (CSIM) and Voya Investment Management Co. LLC (Voya) (New Sub-Advisory Agreement), pursuant to which Voya was appointed as a sub-adviser to Laudus Small-Cap MarketMasters Fund (the Fund), a series of Schwab Capital Trust (the Trust).
The Board was provided with detailed materials related to Voya in advance of, and additional materials at, the meeting. The materials and related discussions included, but were not limited to, information about Voya’s (a) quality of investment management and other services; (b) investment management personnel; (c) operations and financial condition; (d) brokerage practices (including any soft dollar arrangements) and other investment strategies; (e) compliance systems; (f) policies on, and compliance procedures for, personal securities transactions; (g) reputation, expertise and resources; (h) performance compared with similar advisers; and (i) performance with respect to similar accounts managed by Voya. In addition, the Board was provided with information about the level of the sub- advisory fees to be paid to Voya, and comparable fees paid to Voya for managing similar accounts. The Independent Trustees received advice from independent counsel to the Independent Trustees. The proposed appointment of Voya was first reviewed and discussed in the Investment Oversight Committee of the Board (the Committee) on December 12, 2016. Following such discussion, the Committee recommended the New Sub-Advisory Agreement to the Board for approval.
In its consideration of the approval of the New Sub-Advisory Agreement, the Board considered a variety of specific factors, including:
| 1. | the nature, extent and quality of the services to be provided to the Fund under the New Sub-Advisory Agreement, including the resources of Voya to be dedicated to the Fund; |
| 2. | Voya’s investment performance in providing sub-advisory services with respect to similar accounts; |
| 3. | the Fund’s expenses and how those expenses would be impacted by the hiring of Voya; |
| 4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (Schwab), with respect to the Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
| 5. | the extent to which economies of scale may be realized as the Fund grows and whether fee levels in the New Sub-Advisory Agreement with Voya reflect the economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the sub- advisory services to be provided by Voya to the Fund and the resources Voya will dedicate to the Fund. In this regard, the Trustees considered the information provided by Voya with respect to its history, reputation, expertise, qualifications of its personnel, and experience in managing the type of strategies for which Voya was being engaged. The Board also considered reports regarding the search process undertaken by CSIM that led to the identification of Voya by CSIM as a well-qualified sub-adviser to the Fund with an investment style consistent with the Fund’s investment objective and strategies, and CSIM’s desired risk/return profile. The Trustees also considered the Trust’s Chief Compliance Officer’s evaluation of Voya’s compliance program and the recommended compliance monitoring program for Voya. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by Voya to the Fund and the resources of Voya to be dedicated to the Fund supported approval of the New Sub-Advisory Agreement with Voya.
Investment Performance. The Board considered Voya’s investment performance in determining whether to approve the New Sub-Advisory Agreement. Specifically, the Trustees considered Voya’s tracking error relative to appropriate benchmarks as well as its overall relative performance in providing investment advisory services to similar accounts. Following such evaluation, the Board concluded, within the context of its full deliberations, that the investment performance of Voya supported approval of the New Sub-Advisory Agreement.
Fund Expenses. With respect to the Fund’s expenses, the Trustees considered the rate of compensation to be paid under the New Sub-Advisory Agreement, and the Fund’s net operating expense ratio. When considering the fees to be paid to Voya, the Trustees took into account the fact that Voya will be compensated by CSIM, and not by the Fund directly, and that the fees paid to Voya would not impact the fees paid by the Fund to CSIM. The Trustees also considered fees charged by Voya to comparable sub-advised accounts. The Board considered CSIM’s statements that the fees to be paid to Voya are reasonable in light of the anticipated quality of services to be provided by Voya. Following such evaluation, the Board concluded, within the context of its full deliberations, that the fees to be paid to Voya are reasonable and supported approval of the New Sub-Advisory Agreement.
Profitability. With respect to the profitability of CSIM, the Trustees considered projected profitability to CSIM before and after the appointment of Voya as a new sub-adviser. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the expected profitability of CSIM
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Laudus MarketMasters Funds
supported approval of the New Sub-Advisory Agreement. With respect to Voya, no historical information regarding the profitability of its relationship to the Fund was available. The Trustees took into account, however, the fact that Voya will be compensated by CSIM, and not by the Fund directly, and that the compensation paid to Voya reflects an arms-length negotiation between CSIM and Voya, which are unaffiliated with each other.
Economies of Scale. The Board considered the existence of any economies of scale and whether those are passed along to the Fund’s shareholders through graduated investment advisory and sub-advisory fee schedules or other means, including any fee waivers by CSIM and its affiliates. In connection with its evaluation, the Board took into account the fact that the existing contractual investment advisory and sub-advisory fee schedules relating to the Fund include lower
fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Fund obtains reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including a majority of the Independent Trustees, approved the New Sub-Advisory Agreement for an initial two-year term and concluded that the compensation under the New Sub-Advisory Agreement is fair and reasonable in light of such services, and such other matters as the Trustees considered to be relevant in the exercise of their reasonable judgment.
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Laudus MarketMasters Funds
Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 110 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| 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. | 110 | 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 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). | 110 | 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 – Apr. 2012). | 110 | None |
David L. Mahoney
1954
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 110 | Director, Symantec Corporation (2003 – present)
Director, Corcept Therapeutics Incorporated (2004 – present)
Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
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| 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 |
Kiran M. Patel
1948
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus 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). | 110 | Director, KLA-Tencor Corporation (2008 – present) |
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). | 110 | 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 and Laudus 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). | 110 | 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 since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 110 | 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 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). | 110 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present)
Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
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Laudus MarketMasters Funds
| 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 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); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 110 | Director, The Charles Schwab Corporation (2008 – present) |
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) (Mar. 2007 – Aug. 2010). | 110 | 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 (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 110 | 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 A. 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 and Laudus 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) (Mar. 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 and Laudus 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). |
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| Officers of the Trust (continued) |
Name, Year of Birth, and Position(s) with the trust
(Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira
1964
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 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 (Apr. 2005 – present). |
Omar Aguilar
1970
Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies
(Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 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 – Apr. 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 and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 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 (Apr. 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 and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 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 (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 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 and Laudus 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. |
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Laudus MarketMasters Funds
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.
Bloomberg Barclays U.S. Aggregate Bond Index An index that represents securities that are SEC registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. The index excludes certain types of securities, including state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds.
Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $250 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
restricted and illiquid securities Restricted securities are securities that are subject to legal restrictions on their sale. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933 (the 1933 Act), or in a registered public offering. Certain restricted securities, such as Section 4(a)(2) commercial paper and Rule 144A securities under the 1933 Act, may be considered to be liquid if they meet the criteria for liquidity established by the Board. Illiquid securities generally are any securities that cannot be disposed of promptly and in the ordinary course of business at approximately the amount at which a fund has valued the instruments. The liquidity of a fund’s investments is monitored under the supervision and direction of the Board. Investments currently not considered liquid include repurchase agreements not maturing within seven days and certain restricted securities.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
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.
Laudus MarketMasters Funds | Semiannual Report
Laudus MarketMasters Funds
Laudus Funds®
Laudus Funds offer investors access to some of the world's leading investment managers. With a rigorous manager selection process and ongoing oversight by Charles Schwab Investment Management, Laudus Funds offer single and multi-manager strategies as a complement to other funds managed by Charles Schwab Investment Management. The list below shows all currently available Laudus Funds.
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 or, if available, the summary prospectus. Please call 1-877-824-5615 for a prospectus and brochure for any Laudus Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Laudus Funds’ website at www.csimfunds.com/laudusfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Laudus Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.csimfunds.com/laudusfunds_prospectus or the SEC’s website at www.sec.gov.
Laudus U.S. Large Cap Growth
Laudus U.S. Large Cap Growth Fund
Laudus MarketMasters Funds®
Laudus International MarketMasters Fund™
Laudus Small-Cap MarketMasters Fund™
Laudus Mondrian Funds™
Laudus Mondrian International Equity Fund
Laudus Mondrian Emerging Markets Fund
Laudus Mondrian International Government Fixed Income Fund
Laudus Mondrian Global Government Fixed Income Fund
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Laudus MarketMasters Funds
1-877-824-5615
Printed on recycled paper.
Charles Schwab Investment Management, Inc. (CSIM) is the investment adviser for Laudus Funds. The Laudus Group of Funds includes the Laudus Mondrian Funds and Laudus U.S. Large Cap Growth Fund, which are part of the Laudus Trust and distributed by ALPS Distributors, Inc. (ALPS); and the Laudus MarketMasters Funds, which are part of the Schwab Capital Trust and distributed by Charles Schwab & Co., Inc. (Schwab), Member SIPC. Schwab and CSIM, affiliates and subsidiaries of The Charles Schwab Corporation, are not affiliated with ALPS.
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Semiannual Report | April 30, 2017
Schwab Target Funds
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab Target 2045 Fund
Schwab Target 2050 Fund
Schwab Target 2055 Fund
Schwab Target 2060 Fund
This page is intentionally left blank.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
| Total Return for the 6 Months Ended April 30, 2017 |
| Schwab Target 2010 Fund (Ticker Symbol: SWBRX) | 4.64% |
| Target 2010 Composite Index | 4.34% |
| Fund Category: Morningstar Target-Date 2000-2010 | 4.70% |
| Performance Details | pages 9-10 |
| |
| Schwab Target 2015 Fund (Ticker Symbol: SWGRX) | 5.00% |
| Target 2015 Composite Index | 4.61% |
| Fund Category: Morningstar Target-Date 2015 | 5.32% |
| Performance Details | pages 11-12 |
| |
| Schwab Target 2020 Fund (Ticker Symbol: SWCRX) | 6.63% |
| Target 2020 Composite Index | 6.06% |
| Fund Category: Morningstar Target-Date 2020 | 5.77% |
| Performance Details | pages 13-14 |
| |
| Schwab Target 2025 Fund (Ticker Symbol: SWHRX) | 8.20% |
| Target 2025 Composite Index | 7.58% |
| Fund Category: Morningstar Target-Date 2025 | 7.26% |
| Performance Details | pages 15-16 |
| |
| Schwab Target 2030 Fund (Ticker Symbol: SWDRX) | 9.52% |
| Target 2030 Composite Index | 8.74% |
| Fund Category: Morningstar Target-Date 2030 | 8.34% |
| Performance Details | pages 17-18 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
The components that make up each of the composite indexes may vary over time. For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
Schwab Target Funds | Semiannual Report
Performance at a Glance (continued)
| Total Return for the 6 Months Ended April 30, 2017 |
| Schwab Target 2035 Fund (Ticker Symbol: SWIRX) | 10.55% |
| Target 2035 Composite Index | 9.73% |
| Fund Category: Morningstar Target-Date 2035 | 9.70% |
| Performance Details | pages 19-20 |
| |
| Schwab Target 2040 Fund (Ticker Symbol: SWERX) | 11.56% |
| Target 2040 Composite Index | 10.68% |
| Fund Category: Morningstar Target-Date 2040 | 10.17% |
| Performance Details | pages 21-22 |
| |
| Schwab Target 2045 Fund (Ticker Symbol: SWMRX) | 12.20% |
| Target 2045 Composite Index | 11.28% |
| Fund Category: Morningstar Target-Date 2045 | 10.85% |
| Performance Details | pages 23-24 |
| |
| Schwab Target 2050 Fund (Ticker Symbol: SWNRX) | 12.56% |
| Target 2050 Composite Index | 11.65% |
| Fund Category: Morningstar Target-Date 2050 | 10.75% |
| Performance Details | pages 25-26 |
| |
| Schwab Target 2055 Fund (Ticker Symbol: SWORX) | 13.00% |
| Target 2055 Composite Index | 12.02% |
| Fund Category: Morningstar Target-Date 2055 | 11.12% |
| Performance Details | pages 27-28 |
| |
| Schwab Target 2060 Fund (Ticker Symbol: SWPRX) | 13.04% |
| Target 2060 Composite Index | 12.11% |
| Fund Category: Morningstar Target-Date 2060+ | 11.41% |
| Performance Details | pages 29-30 |
| |
| Minimum Initial Investment1 | $ 100 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
The components that make up each of the composite indexes may vary over time. For index definitions, please see the Glossary.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
| 1 | Please see the funds’ prospectus for further detail and eligibility requirements. |
Schwab Target Funds | Semiannual Report
Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.
Dear Shareholder,
At Charles Schwab Investment Management, we believe strategy is just as important as results. The foundational products we provide our investors are designed to deliver steady, reliable, long-term performance while making investing more transparent and less complicated. And that takes finding the right strategy for each fund we offer, whether we develop it in-house or partner with a third party manager. As pleased as we are with the performance of the Schwab Target Funds in the most recent reporting period, we’re just as proud of the investment strategy behind it.
Since our last shareholder report, equity prices rose in both the U.S. and abroad, and the Schwab Target Funds all enjoyed gains over the six-month reporting period ended April 30, 2017. One dimension of this rally that is beginning to get more attention is the recent rebound of active fund managers, who have benefited of late from the positive performance of companies expected to gain the most from changes in the policy and economic environments.
While investor capital has started to flow back into active funds as a result (February marked the first month since April 2015 that actively managed funds saw positive inflows)1, we have consistently maintained that both active
Asset Class Performance Comparison % returns during the six months ended 4/30/2017
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 1 | Source: Morningstar DirectSM |
Schwab Target Funds | Semiannual Report
From the President (continued)
“ Since our last shareholder report, equity prices rose in both the U.S. and abroad, and the Schwab Target Funds all enjoyed gains over the six-month reporting period ended April 30, 2017.”
and passive strategies deserve consideration in an investor’s diversified portfolio. The Schwab Target Funds have exposure to both actively and passively managed funds for the long term, and this positioning helps our investors to access the best of both worlds. Active strategies offer the potential to outperform the benchmarks, broader diversification, and the ability to react to market conditions through experienced management. Meanwhile, passive strategies can be a vehicle for capturing market returns with low tracking error and reduced fund turnover, which helps keep investing costs down.
We believe combining both active and passive approaches in the Schwab Target Funds gives investors additional diversification, efficiency, and sophistication, and also provides the opportunity for better long-term results with potentially less volatility than self-directed investor asset allocation. It’s just one of the tools we are using at Charles Schwab Investment Management to help you achieve your retirement goals.
I want to thank you for investing with Charles Schwab Investment Management. For more information about the Schwab Target Funds, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.csimfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
Schwab Target Funds | Semiannual Report
The Investment Environment
Over the six-month reporting period ended April 30, 2017, equities both in the U.S. and abroad performed well. Meanwhile, global bond yields generally rose, driving many fixed income returns into negative territory (bond yields and fixed-rate bond prices move in opposite directions). The Federal Reserve (Fed) raised the federal funds rate twice over the reporting period, signaling confidence in the strength of the U.S. economy, while continued accommodative policies outside the U.S. began to show signs of success. Yields on many global government-backed securities rose over the reporting period, though remained relatively low compared to long-term averages. In this environment, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 13.32%, while the MSCI EAFE® Index (Net), a broad measure of developed international equity performance, returned 11.47%. In fixed-income markets, the Bloomberg Barclays U.S. Aggregate Bond Index returned -0.67% for the reporting period, and the Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index returned 0.22%.
The Fed tightened U.S. monetary policy over the reporting period, while many other central banks outside the U.S. maintained accommodative policies. With improvements in several key U.S. economic measures and an uptick in inflation, the Fed raised the federal funds rate in December 2016 and in March 2017. Market responses to these changes were muted as both increases were largely already priced into global equity markets. Meanwhile, the European Central Bank extended its asset purchase program to at least December 2017 and announced it was loosening the restrictions on the types of bonds it can purchase, causing the yield curve to steepen. In Asia, the Bank of Japan (BOJ) maintained negative interest rates, quantitative easing, and yield curve management over the six-month reporting period. The positive performance of many international equities and improvement in the global economic outlook over the reporting period suggested that these policies were achieving their intended results, effectively stimulating economic growth in both the eurozone and in Japan.
Market volatility generally eased over the reporting period, though fluctuations tied to elections in both the U.S. and abroad occurred during the six months. In the U.S., election-related volatility picked up in the weeks leading up to the U.S. presidential election and continued after Election Day. U.S. equity futures dropped sharply soon after the election results were announced, then rebounded almost immediately the following day and generally maintained an upward trajectory throughout most of the reporting period. This rally was fueled by investor expectations for reflationary policies from the Donald Trump administration, including increased fiscal spending, tax reform, and reduced financial regulation. However, lack of progress in certain of the Trump administration’s policies increased uncertainty and contributed to muted stock market gains in the last months of the reporting period. Meanwhile, political uncertainty in the eurozone, including elections in the Netherlands and France, also contributed to overseas market volatility. In mid-March, center-right Dutch Prime Minister Mark Rutte beat far-right candidate Geert Wilders, while the race between front-runners Emmanuel Macron and Marine Le Pen in France was closer than many expected in the first round of voting. (Macron was elected to the French presidency in the run-off election the week following the end of the reporting period.)
Schwab Target Funds | Semiannual Report
The Investment Environment (continued)
Overall global economic growth generally improved over the six-month reporting period. Eurozone economic activity picked up in both the fourth quarter of 2016 and the first quarter of 2017, and the entire eurozone bloc exited deflation by the end of January 2017. Meanwhile, the United Kingdom economy performed better than expected in the months following the decision in June to leave the European Union (Brexit) as progress toward an exit plan was made. In Japan, economic growth accelerated and consumer prices fell at a slower pace, with inflation on track to hit the target of 2% in the next two years, while rising inflation and decreasing lending costs in China contributed to a relatively stable economy over the reporting period. Not all countries made economic progress, however. The end of 2016 marked two consecutive years of economic contraction for Brazil and its worst recession on record. Meanwhile, the decreasing likelihood of relaxed economic sanctions by the U.S. weighed on Russia’s economy and contributed to sluggish growth in this country.
As bond yields remained low both overseas and in the U.S. (even with two federal funds rate increases by the Fed), the yields on many government-backed securities also remained low, with some in negative territory during the reporting period. The yield on the 10-year Japanese government bond stayed near 0.00% due to the BOJ’s yield curve management policy tool, while the 10-year German bund yield fluctuated between 0.00% and 0.50% over the six-month reporting period. In the U.S., short-term yields climbed in response to both Fed federal funds rate increases. Meanwhile longer-term yields, which are generally influenced by inflation and growth expectations, rose after the presidential election amid expectations for new policies from the Trump administration supported a positive growth outlook. As the reporting period continued and very little policy progress was made in Washington, the yields on longer-term U.S. Treasuries generally leveled off.
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
Schwab Target Funds | Semiannual Report
 | Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, 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, with the exception of the Schwab Target 2060 Fund, for which she has served as portfolio manager since its inception in August 2016. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2010 Fund (7/1/05) | 4.64% | 6.94% | 5.40% | 3.11% |
| Target 2010 Composite Index | 4.34% | 6.32% | 5.58% | 4.06% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 13.49% | 7.32% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.30% |
| Fund Category: Morningstar Target-Date 2000-20102 | 4.70% | 7.25% | 5.36% | 3.72% |
| Fund Expense Ratios3: Net 0.43%; Gross 0.57% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.43%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.47%, 0.33% and 0.33%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 22 |
| Portfolio Turnover Rate1 | 45% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Target 2015 Fund (3/12/08) | 5.00% | 7.29% | 5.97% | 5.09% |
| Target 2015 Composite Index | 4.61% | 6.63% | 6.17% | 5.15% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 13.49% | 9.27% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.12% |
| Fund Category: Morningstar Target-Date 20152 | 5.32% | 8.07% | 5.99% | 4.27% |
| Fund Expense Ratios3: Net 0.44%; Gross 0.52% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.44%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.43%, 0.35% and 0.35%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 21 |
| Portfolio Turnover Rate1 | 41% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2020 Fund (7/1/05) | 6.63% | 9.32% | 7.14% | 4.34% |
| Target 2020 Composite Index | 6.06% | 8.33% | 7.38% | 4.87% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 13.49% | 7.32% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.30% |
| Fund Category: Morningstar Target-Date 20202 | 5.77% | 8.62% | 5.92% | 3.76% |
| Fund Expense Ratios3: Net 0.49%; Gross 0.52% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.49%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.45%, 0.42% and 0.42%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 25 |
| Portfolio Turnover Rate1 | 40% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Target 2025 Fund (3/12/08) | 8.20% | 11.26% | 8.10% | 6.82% |
| Target 2025 Composite Index | 7.58% | 10.11% | 8.35% | 6.37% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 13.49% | 9.27% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.12% |
| Fund Category: Morningstar Target-Date 20252 | 7.26% | 10.31% | 7.06% | 4.90% |
| Fund Expense Ratios3: Net 0.56%; Gross 0.60% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.56%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.54%, 0.50% and 0.50%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 24 |
| Portfolio Turnover Rate1 | 32% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2030 Fund (7/1/05) | 9.52% | 12.78% | 8.83% | 5.24% |
| Target 2030 Composite Index | 8.74% | 11.49% | 9.10% | 5.51% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 13.49% | 7.32% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.30% |
| Fund Category: Morningstar Target-Date 20302 | 8.34% | 11.67% | 7.45% | 4.02% |
| Fund Expense Ratios3: Net 0.61%; Gross 0.64% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.61%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.60%, 0.57% and 0.57%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 23 |
| Portfolio Turnover Rate1 | 26% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | Since Inception |
| Fund: Schwab Target 2035 Fund (3/12/08) | 10.55% | 14.10% | 9.49% | 7.48% |
| Target 2035 Composite Index | 9.73% | 12.68% | 9.76% | 7.02% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 13.49% | 9.27% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.12% |
| Fund Category: Morningstar Target-Date 20352 | 9.70% | 13.17% | 8.31% | 5.50% |
| Fund Expense Ratios3: Net 0.65%; Gross 0.69% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.65%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.66%, 0.62% and 0.62%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 23 |
| Portfolio Turnover Rate1 | 20% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Target 2040 Fund (7/1/05) | 11.56% | 15.29% | 10.00% | 5.72% |
| Target 2040 Composite Index | 10.68% | 13.83% | 10.27% | 5.87% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 13.49% | 7.32% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.30% |
| Fund Category: Morningstar Target-Date 20402 | 10.17% | 13.79% | 8.37% | 4.23% |
| Fund Expense Ratios3: Net 0.70%; Gross 0.73% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.70%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.69%, 0.66% and 0.66%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 22 |
| Portfolio Turnover Rate1 | 17% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 3 Years | Since Inception |
| Fund: Schwab Target 2045 Fund (1/23/13) | 12.20% | 16.07% | 6.78% | 9.93% |
| Target 2045 Composite Index | 11.28% | 14.56% | 7.06% | 10.17% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 10.03% | 13.68% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.66% | 2.05% |
| Fund Category: Morningstar Target-Date 20452 | 10.85% | 14.47% | 5.75% | 8.45% |
| Fund Expense Ratios3: Net 0.72%; Gross 0.85% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.72%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.82%, 0.69% and 0.69%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 22 |
| Portfolio Turnover Rate1 | 9% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 3 Years | Since Inception |
| Fund: Schwab Target 2050 Fund (1/23/13) | 12.56% | 16.52% | 6.93% | 10.19% |
| Target 2050 Composite Index | 11.65% | 15.02% | 7.18% | 10.40% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 10.03% | 13.68% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.66% | 2.05% |
| Fund Category: Morningstar Target-Date 20502 | 10.75% | 14.49% | 5.81% | 8.33% |
| Fund Expense Ratios3: Net 0.74%; Gross 0.89% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.74%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.86%, 0.71% and 0.71%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 21 |
| Portfolio Turnover Rate1 | 9% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund and Laudus Mondrian Emerging Markets Fund are part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 3 Years | Since Inception |
| Fund: Schwab Target 2055 Fund (1/23/13) | 13.00% | 17.07% | 7.03% | 10.32% |
| Target 2055 Composite Index | 12.02% | 15.47% | 7.29% | 10.56% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 18.56% | 10.03% | 13.68% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.66% | 2.05% |
| Fund Category: Morningstar Target-Date 20552 | 11.12% | 14.73% | 5.95% | 8.83% |
| Fund Expense Ratios3: Net 0.76%; Gross 1.02% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.76%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective May 26, 2017, the gross expense ratio, the net expense ratio and the annualized weighted average expense ratio of the underlying funds changed to 0.99%, 0.73% and 0.73%, respectively. For more information, refer to the prospectus supplement dated May 26, 2017. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 21 |
| Portfolio Turnover Rate1 | 7% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund and Laudus Mondrian Emerging Markets Fund are part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
| Fund and Inception Date | 6 Months | Since Inception |
| Fund: Schwab Target 2060 Fund (8/25/16) | 13.04% | 11.12% |
| Target 2060 Composite Index | 12.11% | 9.78% |
| Dow Jones U.S. Total Stock Market IndexSM | 13.81% | 11.51% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | -1.43% |
| Fund Category: Morningstar Target-Date 2060+2 | 11.41% | 9.44% |
| Fund Expense Ratios3: Net 0.75%; Gross 1.85% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.75%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 20 |
| Portfolio Turnover Rate1 | 2% |
Asset Class Weightings % of Investments2
Top Holdings % of Net Assets3,4
Portfolio holdings may have changed since the report date.
The Laudus U.S. Large Cap Growth Fund and Laudus Mondrian Emerging Markets Fund are part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange-traded funds, and cash equivalents, including money market securities. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 4 | The holdings listed exclude any temporary liquidity investments. |
Schwab Target Funds | Semiannual Report
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning November 1, 2016 and held through April 30, 2017.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, or any non-routine expenses, such as proxy fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs or non-routine expenses were included, your costs would have been higher.
| | Expense Ratio
(Annualized)1 | Beginning
Account Value
at 11/1/16 | Ending
Account Value
(Net of Expenses)
at 4/30/17 | Expenses Paid
During Period
11/1/16-4/30/172 |
| Schwab Target 2010 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,046.40 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2015 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,050.00 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2020 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,066.30 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2025 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,082.00 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2030 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,095.20 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2035 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,105.50 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2040 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,115.60 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2045 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,122.00 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2050 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,125.60 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| Schwab Target 2055 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,130.00 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
Schwab Target Funds | Semiannual Report
Fund Expenses (Unaudited) (continued)
| | Expense Ratio
(Annualized)1 | Beginning
Account Value
at 11/1/16 | Ending
Account Value
(Net of Expenses)
at 4/30/17 | Expenses Paid
During Period
11/1/16-4/30/172 |
| Schwab Target 2060 Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,130.40 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| 1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. 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 181 days of the period, and divided by the 365 days of the fiscal year. |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $12.52 | $12.42 | $12.42 | $11.91 | $11.10 | $10.56 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.14 1 | 0.20 1 | 0.17 1 | 0.19 | 0.21 | 0.22 |
| Net realized and unrealized gains (losses) | 0.43 | 0.12 | 0.08 | 0.52 | 0.85 | 0.57 |
| Total from investment operations | 0.57 | 0.32 | 0.25 | 0.71 | 1.06 | 0.79 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.22) | (0.22) | (0.25) | (0.20) | (0.25) | (0.25) |
| Net asset value at end of period | $12.87 | $12.52 | $12.42 | $12.42 | $11.91 | $11.10 |
| Total return | 4.64% 2 | 2.68% | 2.03% | 6.08% | 9.74% | 7.63% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | — 4 | 0.00% 5 | 0.00% 5 | — | — | — |
| Gross operating expenses3 | 0.12% 4 | 0.14% | 0.14% | 0.17% | 0.18% | 0.18% |
| Net investment income (loss) | 2.23% 4 | 1.60% | 1.40% | 1.53% | 1.77% | 1.95% |
| Portfolio turnover rate | 45% 2,6 | 14% | 33% | 29% | 26% | 13% |
| Net assets, end of period (x 1,000,000) | $59 | $59 | $65 | $64 | $61 | $60 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
6
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 24% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 96.8% | Other Investment Companies | 52,240,819 | 57,420,409 |
| 2.7% | Short-Term Investments | 1,602,821 | 1,602,821 |
| 99.5% | Total Investments | 53,843,640 | 59,023,230 |
| 0.5% | Other Assets and Liabilities, Net | | 280,739 |
| 100.0% | Net Assets | | 59,303,969 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 96.8% of net assets |
| |
| Equity Funds 36.9% |
| Global Real Estate 1.9% |
| Schwab Global Real Estate Fund (a) | 149,055 | 1,105,990 |
| International 8.9% |
| Laudus International MarketMasters Fund, Select Shares (a) | 136,226 | 3,209,486 |
| Schwab International Core Equity Fund (a) | 200,737 | 2,071,609 |
| | | 5,281,095 |
| Large-Cap 24.1% |
| Dodge & Cox Stock Fund | 4,606 | 878,439 |
| Laudus U.S. Large Cap Growth Fund *(a) | 105,471 | 1,970,205 |
| Schwab Core Equity Fund (a) | 147,971 | 3,290,872 |
| Schwab Dividend Equity Fund (a) | 9,545 | 154,344 |
| Schwab S&P 500 Index Fund (a) | 193,036 | 7,119,179 |
| TCW Relative Value Large Cap Fund, Class I | 39,079 | 891,389 |
| | | 14,304,428 |
| Small-Cap 2.0% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 21,215 | 416,450 |
| Schwab Small-Cap Equity Fund (a) | 36,389 | 802,022 |
| | | 1,218,472 |
| | | 21,909,985 |
| |
| Fixed-Income Funds 55.7% |
| Inflation-Protected Bond 6.3% |
| Schwab Treasury Inflation Protected Securities Index Fund (a) | 333,151 | 3,714,637 |
| Intermediate-Term Bond 38.9% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 65,420 | 720,276 |
| Metropolitan West Total Return Bond Fund, Class I | 516,034 | 5,485,445 |
| Security | Number
of Shares | Value ($) |
| Schwab U.S. Aggregate Bond Index Fund (a) | 1,383,626 | 13,905,446 |
| Wells Fargo Core Bond Fund, Institutional Class | 231,687 | 2,970,224 |
| | | 23,081,391 |
| International Bond 0.8% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 52,042 | 494,403 |
| Short-Term Bond 9.7% |
| Schwab Short-Term Bond Index Fund (a) | 572,754 | 5,733,265 |
| | | 33,023,696 |
| |
| Money Market Fund 4.2% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 2,485,982 | 2,486,728 |
| Total Other Investment Companies |
| (Cost $52,240,819) | | 57,420,409 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 2.7% of net assets |
| |
| Time Deposits 2.7% |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (c) | 590,595 | 590,595 |
| BNP Paribas |
| 0.42%, 05/01/17 (c) | 421,631 | 421,631 |
| Sumitomo Mitsui Banking Corp. |
| 0.42%, 05/01/17 (c) | 590,595 | 590,595 |
| Total Short-Term Investments |
| (Cost $1,602,821) | | 1,602,821 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $54,090,227 and the unrealized appreciation and depreciation were $5,222,029 and ($289,026), respectively, with a net unrealized appreciation of $4,933,003.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $57,420,409 | $— | $— | $57,420,409 | |
| Short-Term Investments1 | — | 1,602,821 | — | 1,602,821 | |
| Total | $57,420,409 | $1,602,821 | $— | $59,023,230 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $41,486,287) | | $46,474,636 |
| Investments in unaffiliated issuers, at value (cost $12,357,353) | + | 12,548,594 |
| Total investments, at value (cost $53,843,640) | | 59,023,230 |
| Receivables: | | |
| Fund shares sold | | 311,428 |
| Dividends | | 49,054 |
| Due from investment adviser | | 6,282 |
| Interest | | 56 |
| Prepaid expenses | + | 16,406 |
| Total assets | | 59,406,456 |
| Liabilities |
| Payables: | | |
| Investments bought | | 26,351 |
| Independent trustees' fees | | 296 |
| Fund shares redeemed | | 55,809 |
| Accrued expenses | + | 20,031 |
| Total liabilities | | 102,487 |
| Net Assets |
| Total assets | | 59,406,456 |
| Total liabilities | – | 102,487 |
| Net assets | | $59,303,969 |
| Net Assets by Source | | |
| Capital received from investors | | 59,319,442 |
| Net investment income not yet distributed | | 159,311 |
| Net realized capital losses | | (5,354,374) |
| Net unrealized capital appreciation | | 5,179,590 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $59,303,969 | | 4,607,233 | | $12.87 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $519,815 |
| Dividends received from unaffiliated underlying funds | | 130,260 |
| Interest | + | 1,880 |
| Total investment income | | 651,955 |
| Expenses |
| Professional fees | | 13,072 |
| Registration fees | | 9,139 |
| Independent trustees' fees | | 4,004 |
| Transfer agent fees | | 3,530 |
| Portfolio accounting fees | | 2,766 |
| Shareholder reports | | 2,272 |
| Custodian fees | | 1,066 |
| Other expenses | + | 735 |
| Total expenses | | 36,584 |
| Expense reduction by CSIM | – | 36,584 |
| Net expenses | – | — |
| Net investment income | | 651,955 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 85,940 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 232,425 |
| Net realized gains on sales of affiliated underlying funds | | 1,960,525 |
| Net realized gains on sales of unaffiliated underlying funds | + | 374,137 |
| Net realized gains | | 2,653,027 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | (110,931) |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (501,624) |
| Net change in unrealized appreciation (depreciation) | + | (612,555) |
| Net realized and unrealized gains | | 2,040,472 |
| Increase in net assets resulting from operations | | $2,692,427 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $651,955 | $976,757 |
| Net realized gains | | 2,653,027 | 2,212,658 |
| Net change in unrealized appreciation (depreciation) | + | (612,555) | (1,623,498) |
| Increase in net assets from operations | | 2,692,427 | 1,565,917 |
| Distributions to Shareholders | |
| Distributions from net investment income | | ($1,060,087) | ($1,128,027) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 450,924 | $5,680,696 | 719,105 | $8,761,592 |
| Shares reinvested | | 78,082 | 964,310 | 87,514 | 1,059,786 |
| Shares redeemed | + | (672,141) | (8,443,579) | (1,250,841) | (15,300,270) |
| Net transactions in fund shares | | (143,135) | ($1,798,573) | (444,222) | ($5,478,892) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 4,750,368 | $59,470,202 | 5,194,590 | $64,511,204 |
| Total decrease | + | (143,135) | (166,233) | (444,222) | (5,041,002) |
| End of period | | 4,607,233 | $59,303,969 | 4,750,368 | $59,470,202 |
| Net investment income not yet distributed | | | $159,311 | | $567,443 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $11.72 | $12.23 | $12.81 | $12.22 | $11.13 | $10.48 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.13 1 | 0.18 1 | 0.17 1 | 0.19 | 0.20 | 0.20 |
| Net realized and unrealized gains (losses) | 0.43 | 0.11 | 0.08 | 0.60 | 1.12 | 0.66 |
| Total from investment operations | 0.56 | 0.29 | 0.25 | 0.79 | 1.32 | 0.86 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.22) | (0.21) | (0.27) | (0.20) | (0.23) | (0.21) |
| Distributions from net realized gains | (0.37) | (0.59) | (0.56) | — | — | — |
| Total distributions | (0.59) | (0.80) | (0.83) | (0.20) | (0.23) | (0.21) |
| Net asset value at end of period | $11.69 | $11.72 | $12.23 | $12.81 | $12.22 | $11.13 |
| Total return | 5.00% 2 | 2.59% | 1.99% | 6.56% | 12.06% | 8.41% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | — 4 | 0.00% 5 | 0.00% 5 | — | — | — |
| Gross operating expenses3 | 0.08% 4 | 0.08% | 0.09% | 0.11% | 0.14% | 0.19% |
| Net investment income (loss) | 2.23% 4 | 1.59% | 1.42% | 1.52% | 1.72% | 1.85% |
| Portfolio turnover rate | 41% 2,6 | 14% | 33% | 32% | 16% | 13% |
| Net assets, end of period (x 1,000,000) | $97 | $104 | $116 | $111 | $94 | $70 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
6
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 22% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 98.0% | Other Investment Companies | 85,718,620 | 95,515,600 |
| 1.9% | Short-Term Investments | 1,899,330 | 1,899,330 |
| 99.9% | Total Investments | 87,617,950 | 97,414,930 |
| 0.1% | Other Assets and Liabilities, Net | | 66,782 |
| 100.0% | Net Assets | | 97,481,712 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 98.0% of net assets |
| |
| Equity Funds 39.8% |
| Global Real Estate 1.9% |
| Schwab Global Real Estate Fund (a) | 243,569 | 1,807,284 |
| International 9.5% |
| Laudus International MarketMasters Fund, Select Shares (a) | 235,863 | 5,556,942 |
| Schwab International Core Equity Fund (a) | 357,280 | 3,687,130 |
| | | 9,244,072 |
| Large-Cap 26.1% |
| Dodge & Cox Stock Fund | 8,240 | 1,571,615 |
| Laudus U.S. Large Cap Growth Fund *(a) | 186,192 | 3,478,072 |
| Schwab Core Equity Fund (a) | 260,996 | 5,804,549 |
| Schwab Dividend Equity Fund (a) | 16,033 | 259,249 |
| Schwab S&P 500 Index Fund (a) | 345,294 | 12,734,431 |
| TCW Relative Value Large Cap Fund, Class I | 72,086 | 1,644,272 |
| | | 25,492,188 |
| Small-Cap 2.3% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 38,514 | 756,028 |
| Schwab Small-Cap Equity Fund (a) | 65,788 | 1,449,971 |
| | | 2,205,999 |
| | | 38,749,543 |
| |
| Fixed-Income Funds 53.9% |
| Inflation-Protected Bond 6.2% |
| Schwab Treasury Inflation Protected Securities Index Fund (a) | 545,731 | 6,084,906 |
| Intermediate-Term Bond 37.8% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 119,792 | 1,318,912 |
| Metropolitan West Total Return Bond Fund, Class I | 871,001 | 9,258,745 |
| Security | Number
of Shares | Value ($) |
| Schwab U.S. Aggregate Bond Index Fund (a) | 2,151,311 | 21,620,672 |
| Wells Fargo Core Bond Fund, Institutional Class | 363,773 | 4,663,571 |
| | | 36,861,900 |
| International Bond 0.8% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 77,288 | 734,238 |
| Short-Term Bond 9.1% |
| Schwab Short-Term Bond Index Fund (a) | 885,449 | 8,863,347 |
| | | 52,544,391 |
| |
| Money Market Fund 4.3% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 4,220,400 | 4,221,666 |
| Total Other Investment Companies |
| (Cost $85,718,620) | | 95,515,600 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 1.9% of net assets |
| |
| Time Deposits 1.9% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (c) | 975,476 | 975,476 |
| Citibank |
| 0.42%, 05/01/17 (c) | 923,854 | 923,854 |
| Total Short-Term Investments |
| (Cost $1,899,330) | | 1,899,330 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $87,937,228 and the unrealized appreciation and depreciation were $10,062,942 and ($585,240), respectively, with a net unrealized appreciation of $9,477,702.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $95,515,600 | $— | $— | $95,515,600 | |
| Short-Term Investments1 | — | 1,899,330 | — | 1,899,330 | |
| Total | $95,515,600 | $1,899,330 | $— | $97,414,930 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $67,647,187) | | $77,058,485 |
| Investments in unaffiliated issuers, at value (cost $19,970,763) | + | 20,356,445 |
| Total investments, at value (cost $87,617,950) | | 97,414,930 |
| Receivables: | | |
| Dividends | | 77,211 |
| Fund shares sold | | 66,801 |
| Due from investment adviser | | 6,676 |
| Interest | | 67 |
| Prepaid expenses | + | 12,752 |
| Total assets | | 97,578,437 |
| Liabilities |
| Payables: | | |
| Investments bought | | 42,967 |
| Independent trustees' fees | | 310 |
| Fund shares redeemed | | 32,150 |
| Accrued expenses | + | 21,298 |
| Total liabilities | | 96,725 |
| Net Assets |
| Total assets | | 97,578,437 |
| Total liabilities | – | 96,725 |
| Net assets | | $97,481,712 |
| Net Assets by Source | | |
| Capital received from investors | | 86,255,672 |
| Net investment income not yet distributed | | 243,400 |
| Net realized capital gains | | 1,185,660 |
| Net unrealized capital appreciation | | 9,796,980 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $97,481,712 | | 8,339,482 | | $11.69 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $885,809 |
| Dividends received from unaffiliated underlying funds | | 212,598 |
| Interest | + | 2,509 |
| Total investment income | | 1,100,916 |
| Expenses |
| Professional fees | | 13,228 |
| Registration fees | | 9,880 |
| Independent trustees' fees | | 4,143 |
| Transfer agent fees | | 4,104 |
| Shareholder reports | | 3,095 |
| Portfolio accounting fees | | 3,031 |
| Custodian fees | | 1,267 |
| Other expenses | + | 1,084 |
| Total expenses | | 39,832 |
| Expense reduction by CSIM | – | 39,832 |
| Net expenses | – | — |
| Net investment income | | 1,100,916 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 152,735 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 378,238 |
| Net realized gains on sales of affiliated underlying funds | | 521,060 |
| Net realized gains on sales of unaffiliated underlying funds | + | 462,158 |
| Net realized gains | | 1,514,191 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 2,805,531 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (647,480) |
| Net change in unrealized appreciation (depreciation) | + | 2,158,051 |
| Net realized and unrealized gains | | 3,672,242 |
| Increase in net assets resulting from operations | | $4,773,158 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $1,100,916 | $1,755,616 |
| Net realized gains | | 1,514,191 | 3,635,423 |
| Net change in unrealized appreciation (depreciation) | + | 2,158,051 | (2,475,029) |
| Increase in net assets from operations | | 4,773,158 | 2,916,010 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (1,851,464) | (1,912,081) |
| Distributions from net realized gains | + | (3,187,589) | (5,504,533) |
| Total distributions | | ($5,039,053) | ($7,416,614) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 531,614 | $6,160,562 | 1,773,195 | $20,460,018 |
| Shares reinvested | | 417,430 | 4,675,208 | 607,968 | 6,894,365 |
| Shares redeemed | + | (1,494,821) | (17,267,386) | (2,943,054) | (34,207,784) |
| Net transactions in fund shares | | (545,777) | ($6,431,616) | (561,891) | ($6,853,401) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 8,885,259 | $104,179,223 | 9,447,150 | $115,533,228 |
| Total decrease | + | (545,777) | (6,697,511) | (561,891) | (11,354,005) |
| End of period | | 8,339,482 | $97,481,712 | 8,885,259 | $104,179,223 |
| Net investment income not yet distributed | | | $243,400 | | $993,948 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $13.84 | $14.33 | $14.32 | $13.52 | $11.94 | $11.13 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.16 1 | 0.22 1 | 0.20 1 | 0.21 | 0.22 | 0.22 |
| Net realized and unrealized gains (losses) | 0.72 | 0.06 | 0.12 | 0.82 | 1.62 | 0.82 |
| Total from investment operations | 0.88 | 0.28 | 0.32 | 1.03 | 1.84 | 1.04 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.24) | (0.27) | (0.31) | (0.23) | (0.26) | (0.23) |
| Distributions from net realized gains | (0.51) | (0.50) | — | — | — | — |
| Total distributions | (0.75) | (0.77) | (0.31) | (0.23) | (0.26) | (0.23) |
| Net asset value at end of period | $13.97 | $13.84 | $14.33 | $14.32 | $13.52 | $11.94 |
| Total return | 6.63% 2 | 2.05% | 2.25% | 7.71% | 15.72% | 9.52% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | — 4 | 0.00% 5 | 0.00% 5 | — | — | — |
| Gross operating expenses3 | 0.03% 4 | 0.03% | 0.03% | 0.04% | 0.05% | 0.06% |
| Net investment income (loss) | 2.31% 4 | 1.59% | 1.42% | 1.48% | 1.71% | 1.89% |
| Portfolio turnover rate | 40% 2,6 | 9% | 25% | 26% | 14% | 13% |
| Net assets, end of period (x 1,000,000) | $548 | $530 | $536 | $499 | $415 | $306 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
6
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 24% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.0% | Other Investment Companies | 462,060,985 | 530,756,068 |
| 3.0% | Short-Term Investments | 16,567,585 | 16,567,585 |
| 100.0% | Total Investments | 478,628,570 | 547,323,653 |
| 0.0% | Other Assets and Liabilities, Net | | 182,239 |
| 100.0% | Net Assets | | 547,505,892 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.0% of net assets |
| |
| Equity Funds 49.7% |
| Global Real Estate 2.4% |
| Schwab Global Real Estate Fund (a) | 1,799,918 | 13,355,391 |
| International 12.7% |
| Laudus International MarketMasters Fund, Select Shares (a) | 1,746,095 | 41,137,992 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 190,425 | 1,491,028 |
| Schwab International Core Equity Fund (a) | 2,586,379 | 26,691,434 |
| | | 69,320,454 |
| Large-Cap 31.5% |
| Dodge & Cox Stock Fund | 51,677 | 9,856,303 |
| Laudus U.S. Large Cap Growth Fund *(a) | 1,279,443 | 23,900,000 |
| Schwab Core Equity Fund (a) | 2,007,559 | 44,648,121 |
| Schwab Dividend Equity Fund (a) | 106,256 | 1,718,157 |
| Schwab S&P 500 Index Fund (a) | 2,194,243 | 80,923,688 |
| TCW Relative Value Large Cap Fund, Class I | 498,850 | 11,378,767 |
| | | 172,425,036 |
| Small-Cap 3.1% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 291,798 | 5,728,006 |
| Schwab Small-Cap Equity Fund (a) | 503,911 | 11,106,192 |
| | | 16,834,198 |
| | | 271,935,079 |
| |
| Fixed-Income Funds 45.3% |
| Inflation-Protected Bond 3.4% |
| Schwab Treasury Inflation Protected Securities Index Fund (a) | 1,681,730 | 18,751,293 |
| Intermediate-Term Bond 34.1% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,112,099 | 12,244,213 |
| Metropolitan West Total Return Bond Fund, Class I | 4,682,578 | 49,775,798 |
| Schwab Intermediate-Term Bond Fund (a) | 401,706 | 4,045,179 |
| Security | Number
of Shares | Value ($) |
| Schwab U.S. Aggregate Bond Index Fund (a) | 10,081,367 | 101,317,739 |
| Wells Fargo Core Bond Fund, Institutional Class | 1,510,364 | 19,362,869 |
| | | 186,745,798 |
| International Bond 1.3% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 717,722 | 6,818,358 |
| Short-Term Bond 6.5% |
| Schwab Short-Term Bond Index Fund (a) | 3,539,165 | 35,427,041 |
| | | 247,742,490 |
| |
| Money Market Fund 2.0% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 11,075,176 | 11,078,499 |
| Total Other Investment Companies |
| (Cost $462,060,985) | | 530,756,068 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 3.0% of net assets |
| |
| Time Deposits 3.0% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (c) | 5,480,911 | 5,480,911 |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (c) | 5,480,911 | 5,480,911 |
| Citibank |
| 0.42%, 05/01/17 (c) | 5,480,911 | 5,480,911 |
| JPMorgan Chase Bank |
| 0.42%, 05/01/17 (c) | 124,852 | 124,852 |
| Total Short-Term Investments |
| (Cost $16,567,585) | | 16,567,585 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $479,690,433 and the unrealized appreciation and depreciation were $71,015,293 and ($3,382,073), respectively, with a net unrealized appreciation of $67,633,220.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $530,756,068 | $— | $— | $530,756,068 | |
| Short-Term Investments1 | — | 16,567,585 | — | 16,567,585 | |
| Total | $530,756,068 | $16,567,585 | $— | $547,323,653 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $362,533,286) | | $428,138,118 |
| Investments in unaffiliated issuers, at value (cost $116,095,284) | + | 119,185,535 |
| Total investments, at value (cost $478,628,570) | | 547,323,653 |
| Receivables: | | |
| Fund shares sold | | 464,388 |
| Dividends | | 362,781 |
| Due from investment adviser | | 11,285 |
| Interest | | 584 |
| Prepaid expenses | + | 22,333 |
| Total assets | | 548,185,024 |
| Liabilities |
| Payables: | | |
| Investments bought | | 222,855 |
| Independent trustees' fees | | 350 |
| Fund shares redeemed | | 420,143 |
| Accrued expenses | + | 35,784 |
| Total liabilities | | 679,132 |
| Net Assets |
| Total assets | | 548,185,024 |
| Total liabilities | – | 679,132 |
| Net assets | | $547,505,892 |
| Net Assets by Source | | |
| Capital received from investors | | 471,334,228 |
| Net investment income not yet distributed | | 1,153,478 |
| Net realized capital gains | | 6,323,103 |
| Net unrealized capital appreciation | | 68,695,083 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $547,505,892 | | 39,205,510 | | $13.97 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $4,868,700 |
| Dividends received from unaffiliated underlying funds | | 1,208,436 |
| Interest | + | 20,117 |
| Total investment income | | 6,097,253 |
| Expenses |
| Registration fees | | 14,661 |
| Professional fees | | 14,535 |
| Shareholder reports | | 13,599 |
| Portfolio accounting fees | | 10,053 |
| Transfer agent fees | | 7,195 |
| Independent trustees' fees | | 5,470 |
| Custodian fees | | 608 |
| Other expenses | + | 4,292 |
| Total expenses | | 70,413 |
| Expense reduction by CSIM | – | 70,413 |
| Net expenses | – | — |
| Net investment income | | 6,097,253 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 1,067,229 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 2,366,351 |
| Net realized gains on sales of affiliated underlying funds | | 1,862,374 |
| Net realized gains on sales of unaffiliated underlying funds | + | 2,581,341 |
| Net realized gains | | 7,877,295 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 23,140,033 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (3,099,779) |
| Net change in unrealized appreciation (depreciation) | + | 20,040,254 |
| Net realized and unrealized gains | | 27,917,549 |
| Increase in net assets resulting from operations | | $34,014,802 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $6,097,253 | $8,437,830 |
| Net realized gains | | 7,877,295 | 21,563,485 |
| Net change in unrealized appreciation (depreciation) | + | 20,040,254 | (18,731,756) |
| Increase in net assets from operations | | 34,014,802 | 11,269,559 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (9,169,294) | (10,024,736) |
| Distributions from net realized gains | + | (19,004,283) | (18,650,147) |
| Total distributions | | ($28,173,577) | ($28,674,883) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 3,440,206 | $47,202,172 | 6,250,271 | $84,821,765 |
| Shares reinvested | | 2,009,738 | 26,689,317 | 2,041,707 | 27,481,364 |
| Shares redeemed | + | (4,526,153) | (62,176,790) | (7,444,384) | (101,328,110) |
| Net transactions in fund shares | | 923,791 | $11,714,699 | 847,594 | $10,975,019 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 38,281,719 | $529,949,968 | 37,434,125 | $536,380,273 |
| Total increase or decrease | + | 923,791 | 17,555,924 | 847,594 | (6,430,305) |
| End of period | | 39,205,510 | $547,505,892 | 38,281,719 | $529,949,968 |
| Net investment income not yet distributed | | | $1,153,478 | | $4,225,519 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $13.45 | $14.11 | $14.54 | $13.63 | $11.73 | $10.84 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.16 1 | 0.20 1 | 0.19 1 | 0.21 | 0.21 | 0.19 |
| Net realized and unrealized gains (losses) | 0.90 | 0.06 | 0.15 | 0.93 | 1.93 | 0.89 |
| Total from investment operations | 1.06 | 0.26 | 0.34 | 1.14 | 2.14 | 1.08 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.23) | (0.26) | (0.32) | (0.23) | (0.24) | (0.19) |
| Distributions from net realized gains | (0.46) | (0.66) | (0.45) | — | — | — |
| Total distributions | (0.69) | (0.92) | (0.77) | (0.23) | (0.24) | (0.19) |
| Net asset value at end of period | $13.82 | $13.45 | $14.11 | $14.54 | $13.63 | $11.73 |
| Total return | 8.20% 2 | 2.01% | 2.36% | 8.44% | 18.54% | 10.14% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | — 4 | 0.00% 5 | 0.00% 5 | — | — | 0.00% 5 |
| Gross operating expenses3 | 0.03% 4 | 0.04% | 0.04% | 0.06% | 0.08% | 0.10% |
| Net investment income (loss) | 2.37% 4 | 1.53% | 1.37% | 1.39% | 1.57% | 1.73% |
| Portfolio turnover rate | 32% 2,6 | 5% | 21% | 27% | 10% | 13% |
| Net assets, end of period (x 1,000,000) | $476 | $443 | $409 | $344 | $251 | $141 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
6
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 21% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.4% | Other Investment Companies | 412,356,690 | 463,408,195 |
| 2.5% | Short-Term Investments | 12,180,622 | 12,180,622 |
| 99.9% | Total Investments | 424,537,312 | 475,588,817 |
| 0.1% | Other Assets and Liabilities, Net | | 376,318 |
| 100.0% | Net Assets | | 475,965,135 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.4% of net assets |
| |
| Equity Funds 61.7% |
| Global Real Estate 3.1% |
| Schwab Global Real Estate Fund (a) | 1,985,872 | 14,735,169 |
| International 16.3% |
| Laudus International MarketMasters Fund, Select Shares (a) | 1,884,229 | 44,392,438 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 498,196 | 3,900,878 |
| Schwab International Core Equity Fund (a) | 2,829,472 | 29,200,151 |
| | | 77,493,467 |
| Large-Cap 38.2% |
| Dodge & Cox Stock Fund | 50,014 | 9,539,257 |
| Laudus U.S. Large Cap Growth Fund *(a) | 1,434,756 | 26,801,241 |
| Schwab Core Equity Fund (a) | 2,260,049 | 50,263,481 |
| Schwab Dividend Equity Fund (a) | 221,699 | 3,584,880 |
| Schwab S&P 500 Index Fund (a) | 2,139,446 | 78,902,779 |
| TCW Relative Value Large Cap Fund, Class I | 562,202 | 12,823,837 |
| | | 181,915,475 |
| Small-Cap 4.1% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 349,456 | 6,859,828 |
| Schwab Small-Cap Equity Fund (a) | 573,385 | 12,637,395 |
| | | 19,497,223 |
| | | 293,641,334 |
| |
| Fixed-Income Funds 34.4% |
| Inflation-Protected Bond 1.1% |
| Schwab Treasury Inflation Protected Securities Index Fund (a) | 450,416 | 5,022,137 |
| Intermediate-Term Bond 28.3% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,357,927 | 14,950,779 |
| Metropolitan West Total Return Bond Fund, Class I | 3,610,133 | 38,375,719 |
| Security | Number
of Shares | Value ($) |
| Schwab Intermediate-Term Bond Fund (a) | 538,584 | 5,423,538 |
| Schwab U.S. Aggregate Bond Index Fund (a) | 6,451,975 | 64,842,350 |
| Wells Fargo Core Bond Fund, Institutional Class | 859,824 | 11,022,942 |
| | | 134,615,328 |
| International Bond 1.2% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 627,519 | 5,961,428 |
| Short-Term Bond 3.8% |
| Schwab Short-Term Bond Index Fund (a) | 1,811,074 | 18,128,852 |
| | | 163,727,745 |
| |
| Money Market Fund 1.3% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 6,037,305 | 6,039,116 |
| Total Other Investment Companies |
| (Cost $412,356,690) | | 463,408,195 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 2.5% of net assets |
| |
| Time Deposits 2.5% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (c) | 4,762,416 | 4,762,416 |
| Citibank |
| 0.42%, 05/01/17 (c) | 4,762,416 | 4,762,416 |
| JPMorgan Chase Bank |
| 0.42%, 05/01/17 (c) | 2,655,790 | 2,655,790 |
| Total Short-Term Investments |
| (Cost $12,180,622) | | 12,180,622 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $425,913,000 and the unrealized appreciation and depreciation were $52,822,128 and ($3,146,311), respectively, with a net unrealized appreciation of $49,675,817.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $463,408,195 | $— | $— | $463,408,195 | |
| Short-Term Investments1 | — | 12,180,622 | — | 12,180,622 | |
| Total | $463,408,195 | $12,180,622 | $— | $475,588,817 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $329,202,293) | | $376,695,661 |
| Investments in unaffiliated issuers, at value (cost $95,335,019) | + | 98,893,156 |
| Total investments, at value (cost $424,537,312) | | 475,588,817 |
| Receivables: | | |
| Fund shares sold | | 461,122 |
| Dividends | | 240,605 |
| Due from investment adviser | | 10,967 |
| Interest | | 426 |
| Prepaid expenses | + | 21,139 |
| Total assets | | 476,323,076 |
| Liabilities |
| Payables: | | |
| Investments bought | | 162,554 |
| Independent trustees' fees | | 307 |
| Fund shares redeemed | | 161,848 |
| Accrued expenses | + | 33,232 |
| Total liabilities | | 357,941 |
| Net Assets |
| Total assets | | 476,323,076 |
| Total liabilities | – | 357,941 |
| Net assets | | $475,965,135 |
| Net Assets by Source | | |
| Capital received from investors | | 423,023,609 |
| Net investment income not yet distributed | | 850,540 |
| Net realized capital gains | | 1,039,481 |
| Net unrealized capital appreciation | | 51,051,505 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $475,965,135 | | 34,441,451 | | $13.82 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $4,299,663 |
| Dividends received from unaffiliated underlying funds | | 1,050,773 |
| Interest | + | 14,459 |
| Total investment income | | 5,364,895 |
| Expenses |
| Registration fees | | 16,564 |
| Professional fees | | 14,185 |
| Shareholder reports | | 11,584 |
| Portfolio accounting fees | | 9,536 |
| Transfer agent fees | | 7,082 |
| Independent trustees' fees | | 5,187 |
| Custodian fees | | 738 |
| Other expenses | + | 3,407 |
| Total expenses | | 68,283 |
| Expense reduction by CSIM | – | 68,283 |
| Net expenses | – | — |
| Net investment income | | 5,364,895 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 1,078,728 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 2,270,643 |
| Net realized losses on sales of affiliated underlying funds | | (1,932,990) |
| Net realized gains on sales of unaffiliated underlying funds | + | 871,088 |
| Net realized gains | | 2,287,469 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 29,437,491 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (932,490) |
| Net change in unrealized appreciation (depreciation) | + | 28,505,001 |
| Net realized and unrealized gains | | 30,792,470 |
| Increase in net assets resulting from operations | | $36,157,365 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $5,364,895 | $6,517,460 |
| Net realized gains | | 2,287,469 | 17,092,704 |
| Net change in unrealized appreciation (depreciation) | + | 28,505,001 | (13,982,701) |
| Increase in net assets from operations | | 36,157,365 | 9,627,463 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (7,453,730) | (7,697,743) |
| Distributions from net realized gains | + | (15,212,564) | (19,307,598) |
| Total distributions | | ($22,666,294) | ($27,005,341) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 3,429,563 | $46,286,209 | 7,097,645 | $93,244,573 |
| Shares reinvested | | 1,686,255 | 21,971,905 | 2,002,536 | 26,213,202 |
| Shares redeemed | + | (3,634,702) | (48,960,990) | (5,154,240) | (68,264,079) |
| Net transactions in fund shares | | 1,481,116 | $19,297,124 | 3,945,941 | $51,193,696 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 32,960,335 | $443,176,940 | 29,014,394 | $409,361,122 |
| Total increase | + | 1,481,116 | 32,788,195 | 3,945,941 | 33,815,818 |
| End of period | | 34,441,451 | $475,965,135 | 32,960,335 | $443,176,940 |
| Net investment income not yet distributed | | | $850,540 | | $2,939,375 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $14.51 | $15.59 | $15.77 | $14.70 | $12.42 | $11.43 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.18 1 | 0.22 1 | 0.21 1 | 0.22 | 0.22 | 0.19 |
| Net realized and unrealized gains (losses) | 1.14 | 0.01 | 0.17 | 1.10 | 2.31 | 0.99 |
| Total from investment operations | 1.32 | 0.23 | 0.38 | 1.32 | 2.53 | 1.18 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.24) | (0.30) | (0.36) | (0.25) | (0.25) | (0.19) |
| Distributions from net realized gains | (0.58) | (1.01) | (0.20) | — | — | — |
| Total distributions | (0.82) | (1.31) | (0.56) | (0.25) | (0.25) | (0.19) |
| Net asset value at end of period | $15.01 | $14.51 | $15.59 | $15.77 | $14.70 | $12.42 |
| Total return | 9.52% 2 | 1.72% | 2.44% | 9.11% | 20.73% | 10.52% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | — 4 | 0.00% 5 | 0.00% 5 | — | — | — |
| Gross operating expenses3 | 0.02% 4 | 0.03% | 0.03% | 0.03% | 0.04% | 0.05% |
| Net investment income (loss) | 2.43% 4 | 1.51% | 1.36% | 1.38% | 1.59% | 1.62% |
| Portfolio turnover rate | 26% 2,6 | 5% | 19% | 26% | 10% | 12% |
| Net assets, end of period (x 1,000,000) | $889 | $814 | $789 | $727 | $621 | $444 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
6
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 18% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.8% | Other Investment Companies | 717,268,273 | 868,969,685 |
| 2.1% | Short-Term Investments | 19,158,218 | 19,158,218 |
| 99.9% | Total Investments | 736,426,491 | 888,127,903 |
| 0.1% | Other Assets and Liabilities, Net | | 489,793 |
| 100.0% | Net Assets | | 888,617,696 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.8% of net assets |
| |
| Equity Funds 70.7% |
| Global Real Estate 3.3% |
| Schwab Global Real Estate Fund (a) | 3,950,545 | 29,313,043 |
| International 19.2% |
| Laudus International MarketMasters Fund, Select Shares (a) | 4,054,457 | 95,523,006 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 1,542,701 | 12,079,351 |
| Schwab International Core Equity Fund (a) | 6,121,099 | 63,169,740 |
| | | 170,772,097 |
| Large-Cap 43.0% |
| Dodge & Cox Stock Fund | 95,963 | 18,302,934 |
| Laudus U.S. Large Cap Growth Fund *(a) | 3,311,485 | 61,858,543 |
| Schwab Core Equity Fund (a) | 4,705,517 | 104,650,704 |
| Schwab Dividend Equity Fund (a) | 781,836 | 12,642,291 |
| Schwab S&P 500 Index Fund (a) | 4,209,292 | 155,238,688 |
| TCW Relative Value Large Cap Fund, Class I | 1,277,722 | 29,144,829 |
| | | 381,837,989 |
| Small-Cap 5.2% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 849,499 | 16,675,671 |
| Schwab Small-Cap Equity Fund (a) | 1,337,259 | 29,473,179 |
| | | 46,148,850 |
| | | 628,071,979 |
| |
| Fixed-Income Funds 26.4% |
| Intermediate-Term Bond 23.0% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 2,716,419 | 29,907,777 |
| Metropolitan West Total Return Bond Fund, Class I | 5,527,141 | 58,753,508 |
| Schwab Intermediate-Term Bond Fund (a) | 1,102,763 | 11,104,820 |
| Security | Number
of Shares | Value ($) |
| Schwab U.S. Aggregate Bond Index Fund (a) | 9,252,038 | 92,982,981 |
| Wells Fargo Core Bond Fund, Institutional Class | 924,598 | 11,853,344 |
| | | 204,602,430 |
| International Bond 1.2% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 1,080,882 | 10,268,377 |
| Short-Term Bond 2.2% |
| Schwab Short-Term Bond Index Fund (a) | 1,996,782 | 19,987,783 |
| | | 234,858,590 |
| |
| Money Market Fund 0.7% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 6,037,305 | 6,039,116 |
| Total Other Investment Companies |
| (Cost $717,268,273) | | 868,969,685 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 2.1% of net assets |
| |
| Time Deposits 2.1% |
| Citibank |
| 0.42%, 05/01/17 (c) | 8,893,861 | 8,893,861 |
| JPMorgan Chase Bank |
| 0.42%, 05/01/17 (c) | 8,893,861 | 8,893,861 |
| Wells Fargo |
| 0.42%, 05/01/17 (c) | 1,370,496 | 1,370,496 |
| Total Short-Term Investments |
| (Cost $19,158,218) | | 19,158,218 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $740,140,091 and the unrealized appreciation and depreciation were $153,924,594 and ($5,936,782), respectively, with a net unrealized appreciation of $147,987,812.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $868,969,685 | $— | $— | $868,969,685 | |
| Short-Term Investments1 | — | 19,158,218 | — | 19,158,218 | |
| Total | $868,969,685 | $19,158,218 | $— | $888,127,903 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $578,297,358) | | $721,007,293 |
| Investments in unaffiliated issuers, at value (cost $158,129,133) | + | 167,120,610 |
| Total investments, at value (cost $736,426,491) | | 888,127,903 |
| Receivables: | | |
| Fund shares sold | | 600,078 |
| Dividends | | 337,891 |
| Due from investment adviser | | 13,778 |
| Interest | | 671 |
| Prepaid expenses | + | 26,344 |
| Total assets | | 889,106,665 |
| Liabilities |
| Payables: | | |
| Investments bought | | 244,782 |
| Independent trustees' fees | | 336 |
| Fund shares redeemed | | 196,931 |
| Accrued expenses | + | 46,920 |
| Total liabilities | | 488,969 |
| Net Assets |
| Total assets | | 889,106,665 |
| Total liabilities | – | 488,969 |
| Net assets | | $888,617,696 |
| Net Assets by Source | | |
| Capital received from investors | | 729,594,992 |
| Net investment income not yet distributed | | 1,377,303 |
| Net realized capital gains | | 5,943,989 |
| Net unrealized capital appreciation | | 151,701,412 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $888,617,696 | | 59,207,875 | | $15.01 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $8,301,057 |
| Dividends received from unaffiliated underlying funds | | 1,873,103 |
| Interest | + | 25,731 |
| Total investment income | | 10,199,891 |
| Expenses |
| Shareholder reports | | 21,946 |
| Registration fees | | 16,289 |
| Professional fees | | 15,324 |
| Portfolio accounting fees | | 11,845 |
| Transfer agent fees | | 8,628 |
| Independent trustees' fees | | 6,361 |
| Custodian fees | | 528 |
| Other expenses | + | 6,378 |
| Total expenses | | 87,299 |
| Expense reduction by CSIM | – | 87,299 |
| Net expenses | – | — |
| Net investment income | | 10,199,891 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 2,217,734 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 4,260,527 |
| Net realized gains on sales of affiliated underlying funds | | 908,957 |
| Net realized gains on sales of unaffiliated underlying funds | + | 2,656,351 |
| Net realized gains | | 10,043,569 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 58,757,640 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | (2,148,494) |
| Net change in unrealized appreciation (depreciation) | + | 56,609,146 |
| Net realized and unrealized gains | | 66,652,715 |
| Increase in net assets resulting from operations | | $76,852,606 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $10,199,891 | $12,054,689 |
| Net realized gains | | 10,043,569 | 36,819,129 |
| Net change in unrealized appreciation (depreciation) | + | 56,609,146 | (33,678,925) |
| Increase in net assets from operations | | 76,852,606 | 15,194,893 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (13,474,267) | (15,460,516) |
| Distributions from net realized gains | + | (32,750,422) | (51,660,998) |
| Total distributions | | ($46,224,689) | ($67,121,514) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 4,944,355 | $72,258,103 | 8,588,483 | $122,183,243 |
| Shares reinvested | | 3,168,835 | 44,553,824 | 4,601,025 | 65,104,505 |
| Shares redeemed | + | (5,012,817) | (73,062,868) | (7,687,009) | (109,898,546) |
| Net transactions in fund shares | | 3,100,373 | $43,749,059 | 5,502,499 | $77,389,202 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 56,107,502 | $814,240,720 | 50,605,003 | $788,778,139 |
| Total increase | + | 3,100,373 | 74,376,976 | 5,502,499 | 25,462,581 |
| End of period | | 59,207,875 | $888,617,696 | 56,107,502 | $814,240,720 |
| Net investment income not yet distributed | | | $1,377,303 | | $4,651,679 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $13.82 | $14.70 | $15.23 | $14.12 | $11.69 | $10.70 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.17 1 | 0.20 1 | 0.19 1 | 0.20 | 0.20 | 0.16 |
| Net realized and unrealized gains (losses) | 1.23 | 0.01 | 0.17 | 1.15 | 2.45 | 0.99 |
| Total from investment operations | 1.40 | 0.21 | 0.36 | 1.35 | 2.65 | 1.15 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.22) | (0.28) | (0.35) | (0.24) | (0.22) | (0.16) |
| Distributions from net realized gains | (0.55) | (0.81) | (0.54) | — | — | — |
| Total distributions | (0.77) | (1.09) | (0.89) | (0.24) | (0.22) | (0.16) |
| Net asset value at end of period | $14.45 | $13.82 | $14.70 | $15.23 | $14.12 | $11.69 |
| Total return | 10.55% 2 | 1.63% | 2.43% | 9.62% | 23.02% | 10.89% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | — 4 | 0.00% 5 | 0.00% 5 | — | — | — |
| Gross operating expenses3 | 0.03% 4 | 0.04% | 0.05% | 0.07% | 0.09% | 0.13% |
| Net investment income (loss) | 2.47% 4 | 1.46% | 1.28% | 1.28% | 1.42% | 1.45% |
| Portfolio turnover rate | 20% 2 | 3% | 14% | 24% | 5% | 11% |
| Net assets, end of period (x 1,000,000) | $400 | $361 | $337 | $282 | $204 | $111 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.6% | Other Investment Companies | 337,971,082 | 389,851,242 |
| 2.3% | Short-Term Investments | 9,187,793 | 9,187,793 |
| 99.9% | Total Investments | 347,158,875 | 399,039,035 |
| 0.1% | Other Assets and Liabilities, Net | | 473,837 |
| 100.0% | Net Assets | | 399,512,872 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.6% of net assets |
| |
| Equity Funds 77.8% |
| Global Real Estate 3.7% |
| Schwab Global Real Estate Fund (a) | 1,999,030 | 14,832,806 |
| International 21.7% |
| Laudus International MarketMasters Fund, Select Shares (a) | 2,014,764 | 47,467,842 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 975,745 | 7,640,085 |
| Schwab International Core Equity Fund (a) | 3,043,221 | 31,406,044 |
| | | 86,513,971 |
| Large-Cap 46.3% |
| Dodge & Cox Stock Fund | 43,558 | 8,307,771 |
| Laudus U.S. Large Cap Growth Fund *(a) | 1,721,873 | 32,164,588 |
| Schwab Core Equity Fund (a) | 2,284,286 | 50,802,522 |
| Schwab Dividend Equity Fund (a) | 508,633 | 8,224,597 |
| Schwab S&P 500 Index Fund (a) | 1,926,687 | 71,056,201 |
| TCW Relative Value Large Cap Fund, Class I | 628,012 | 14,324,964 |
| | | 184,880,643 |
| Small-Cap 6.1% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 447,843 | 8,791,165 |
| Schwab Small-Cap Equity Fund (a) | 715,028 | 15,759,206 |
| | | 24,550,371 |
| | | 310,777,791 |
| |
| Fixed-Income Funds 19.4% |
| Intermediate-Term Bond 17.2% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,128,170 | 12,421,150 |
| Metropolitan West Total Return Bond Fund, Class I | 1,834,433 | 19,500,026 |
| Schwab Intermediate-Term Bond Fund (a) | 452,701 | 4,558,699 |
| Security | Number
of Shares | Value ($) |
| Schwab U.S. Aggregate Bond Index Fund (a) | 2,909,551 | 29,240,991 |
| Wells Fargo Core Bond Fund, Institutional Class | 230,565 | 2,955,842 |
| | | 68,676,708 |
| International Bond 1.0% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 409,383 | 3,889,136 |
| Short-Term Bond 1.2% |
| Schwab Short-Term Bond Index Fund (a) | 499,284 | 4,997,828 |
| | | 77,563,672 |
| |
| Money Market Fund 0.4% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 1,509,326 | 1,509,779 |
| Total Other Investment Companies |
| (Cost $337,971,082) | | 389,851,242 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 2.3% of net assets |
| |
| Time Deposits 2.3% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (c) | 3,997,612 | 3,997,612 |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (c) | 3,997,612 | 3,997,612 |
| Citibank |
| 0.42%, 05/01/17 (c) | 1,192,569 | 1,192,569 |
| Total Short-Term Investments |
| (Cost $9,187,793) | | 9,187,793 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $348,236,366 and the unrealized appreciation and depreciation were $52,827,806 and ($2,025,137), respectively, with a net unrealized appreciation of $50,802,669.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $389,851,242 | $— | $— | $389,851,242 | |
| Short-Term Investments1 | — | 9,187,793 | — | 9,187,793 | |
| Total | $389,851,242 | $9,187,793 | $— | $399,039,035 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $285,007,883) | | $332,341,489 |
| Investments in unaffiliated issuers, at value (cost $62,150,992) | + | 66,697,546 |
| Total investments, at value (cost $347,158,875) | | 399,039,035 |
| Receivables: | | |
| Fund shares sold | | 553,504 |
| Dividends | | 107,397 |
| Due from investment adviser | | 10,570 |
| Interest | | 322 |
| Prepaid expenses | + | 18,452 |
| Total assets | | 399,729,280 |
| Liabilities |
| Payables: | | |
| Investments bought | | 81,921 |
| Independent trustees' fees | | 298 |
| Fund shares redeemed | | 100,760 |
| Accrued expenses | + | 33,429 |
| Total liabilities | | 216,408 |
| Net Assets |
| Total assets | | 399,729,280 |
| Total liabilities | – | 216,408 |
| Net assets | | $399,512,872 |
| Net Assets by Source | | |
| Capital received from investors | | 347,144,811 |
| Net investment income not yet distributed | | 542,010 |
| Net realized capital losses | | (54,109) |
| Net unrealized capital appreciation | | 51,880,160 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $399,512,872 | | 27,652,563 | | $14.45 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $3,867,100 |
| Dividends received from unaffiliated underlying funds | | 762,858 |
| Interest | + | 11,378 |
| Total investment income | | 4,641,336 |
| Expenses |
| Registration fees | | 14,341 |
| Professional fees | | 13,944 |
| Shareholder reports | | 11,786 |
| Portfolio accounting fees | | 9,047 |
| Transfer agent fees | | 7,324 |
| Independent trustees' fees | | 4,943 |
| Custodian fees | | 476 |
| Other expenses | + | 2,828 |
| Total expenses | | 64,689 |
| Expense reduction by CSIM | – | 64,689 |
| Net expenses | – | — |
| Net investment income | | 4,641,336 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 1,056,291 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 1,861,281 |
| Net realized losses on sales of affiliated underlying funds | | (2,400,102) |
| Net realized gains on sales of unaffiliated underlying funds | + | 364,912 |
| Net realized gains | | 882,382 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 32,309,283 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 247,268 |
| Net change in unrealized appreciation (depreciation) | + | 32,556,551 |
| Net realized and unrealized gains | | 33,438,933 |
| Increase in net assets resulting from operations | | $38,080,269 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $4,641,336 | $5,081,203 |
| Net realized gains | | 882,382 | 16,229,767 |
| Net change in unrealized appreciation (depreciation) | + | 32,556,551 | (14,418,236) |
| Increase in net assets from operations | | 38,080,269 | 6,892,734 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (5,834,076) | (6,503,748) |
| Distributions from net realized gains | + | (14,384,783) | (18,968,293) |
| Total distributions | | ($20,218,859) | ($25,472,041) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 2,634,435 | $36,853,595 | 5,272,101 | $71,143,858 |
| Shares reinvested | | 1,463,205 | 19,709,360 | 1,840,004 | 24,821,651 |
| Shares redeemed | + | (2,561,025) | (35,782,856) | (3,924,580) | (53,511,419) |
| Net transactions in fund shares | | 1,536,615 | $20,780,099 | 3,187,525 | $42,454,090 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 26,115,948 | $360,871,363 | 22,928,423 | $336,996,580 |
| Total increase | + | 1,536,615 | 38,641,509 | 3,187,525 | 23,874,783 |
| End of period | | 27,652,563 | $399,512,872 | 26,115,948 | $360,871,363 |
| Net investment income not yet distributed | | | $542,010 | | $1,734,750 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $15.12 | $16.42 | $16.77 | $15.49 | $12.67 | $11.55 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.19 1 | 0.22 1 | 0.21 1 | 0.21 | 0.22 | 0.17 |
| Net realized and unrealized gains (losses) | 1.48 | (0.03) 2 | 0.20 | 1.33 | 2.84 | 1.12 |
| Total from investment operations | 1.67 | 0.19 | 0.41 | 1.54 | 3.06 | 1.29 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.24) | (0.32) | (0.39) | (0.26) | (0.24) | (0.17) |
| Distributions from net realized gains | (0.75) | (1.17) | (0.37) | — | — | — |
| Total distributions | (0.99) | (1.49) | (0.76) | (0.26) | (0.24) | (0.17) |
| Net asset value at end of period | $15.80 | $15.12 | $16.42 | $16.77 | $15.49 | $12.67 |
| Total return | 11.56% 3 | 1.38% | 2.48% | 10.07% | 24.55% | 11.33% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses4 | — 5 | 0.00% 6 | 0.00% 6 | — | — | — |
| Gross operating expenses4 | 0.02% 5 | 0.03% | 0.03% | 0.04% | 0.04% | 0.06% |
| Net investment income (loss) | 2.52% 5 | 1.45% | 1.27% | 1.26% | 1.47% | 1.42% |
| Portfolio turnover rate | 17% 3 | 4% | 13% | 23% | 6% | 12% |
| Net assets, end of period (x 1,000,000) | $921 | $841 | $834 | $768 | $639 | $435 |
| |
1
Calculated based on the average shares outstanding during the period.
2
The per share amount does not agree with the change in aggregate gains and losses in securities during the period because of the timing of fund share transactions in relation to fluctuating market values for the investments.
3
Not annualized.
4
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
5
Annualized.
6
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 98.0% | Other Investment Companies | 724,692,216 | 902,539,419 |
| 2.0% | Short-Term Investments | 18,396,149 | 18,396,149 |
| 100.0% | Total Investments | 743,088,365 | 920,935,568 |
| (0.0%) | Other Assets and Liabilities, Net | | (74,609) |
| 100.0% | Net Assets | | 920,860,959 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 98.0% of net assets |
| |
| Equity Funds 85.0% |
| Global Real Estate 4.2% |
| Schwab Global Real Estate Fund (a) | 5,151,799 | 38,226,348 |
| International 24.1% |
| Laudus International MarketMasters Fund, Select Shares (a) | 5,048,342 | 118,938,943 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 2,990,467 | 23,415,359 |
| Schwab International Core Equity Fund (a) | 7,692,542 | 79,387,032 |
| | | 221,741,334 |
| Large-Cap 49.5% |
| Dodge & Cox Stock Fund | 99,997 | 19,072,520 |
| Laudus U.S. Large Cap Growth Fund *(a) | 4,517,126 | 84,379,905 |
| Schwab Core Equity Fund (a) | 5,639,832 | 125,429,867 |
| Schwab Dividend Equity Fund (a) | 1,547,888 | 25,029,347 |
| Schwab S&P 500 Index Fund (a) | 4,481,551 | 165,279,605 |
| TCW Relative Value Large Cap Fund, Class I | 1,605,702 | 36,626,069 |
| | | 455,817,313 |
| Small-Cap 7.2% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 1,216,736 | 23,884,530 |
| Schwab Small-Cap Equity Fund (a) | 1,943,852 | 42,842,494 |
| | | 66,727,024 |
| | | 782,512,019 |
| |
| Fixed-Income Funds 12.9% |
| Intermediate-Term Bond 11.8% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 2,138,256 | 23,542,197 |
| Metropolitan West Total Return Bond Fund, Class I | 2,815,244 | 29,926,043 |
| Security | Number
of Shares | Value ($) |
| Schwab Intermediate-Term Bond Fund (a) | 911,437 | 9,178,169 |
| Schwab U.S. Aggregate Bond Index Fund (a) | 4,132,017 | 41,526,766 |
| Wells Fargo Core Bond Fund, Institutional Class | 352,792 | 4,522,799 |
| | | 108,695,974 |
| International Bond 0.5% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 537,701 | 5,108,160 |
| Short-Term Bond 0.6% |
| Schwab Short-Term Bond Index Fund (a) | 521,153 | 5,216,746 |
| | | 119,020,880 |
| |
| Money Market Fund 0.1% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 1,006,217 | 1,006,520 |
| Total Other Investment Companies |
| (Cost $724,692,216) | | 902,539,419 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 2.0% of net assets |
| |
| Time Deposits 2.0% |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (c) | 9,165,921 | 9,165,921 |
| Sumitomo Mitsui Banking Corp. |
| 0.42%, 05/01/17 (c) | 9,230,228 | 9,230,228 |
| Total Short-Term Investments |
| (Cost $18,396,149) | | 18,396,149 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $747,278,293 and the unrealized appreciation and depreciation were $177,597,058 and ($3,939,783), respectively, with a net unrealized appreciation of $173,657,275.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $902,539,419 | $— | $— | $902,539,419 | |
| Short-Term Investments1 | — | 18,396,149 | — | 18,396,149 | |
| Total | $902,539,419 | $18,396,149 | $— | $920,935,568 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $625,109,792) | | $788,849,791 |
| Investments in unaffiliated issuers, at value (cost $117,978,573) | + | 132,085,777 |
| Total investments, at value (cost $743,088,365) | | 920,935,568 |
| Receivables: | | |
| Fund shares sold | | 412,614 |
| Dividends | | 157,973 |
| Due from investment adviser | | 16,650 |
| Interest | | 643 |
| Prepaid expenses | + | 26,052 |
| Total assets | | 921,549,500 |
| Liabilities |
| Payables: | | |
| Investments bought | | 125,417 |
| Independent trustees' fees | | 339 |
| Fund shares redeemed | | 501,538 |
| Accrued expenses | + | 61,247 |
| Total liabilities | | 688,541 |
| Net Assets |
| Total assets | | 921,549,500 |
| Total liabilities | – | 688,541 |
| Net assets | | $920,860,959 |
| Net Assets by Source | | |
| Capital received from investors | | 740,879,317 |
| Net investment income not yet distributed | | 1,104,211 |
| Net realized capital gains | | 1,030,228 |
| Net unrealized capital appreciation | | 177,847,203 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $920,860,959 | | 58,266,505 | | $15.80 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $9,420,430 |
| Dividends received from unaffiliated underlying funds | | 1,561,338 |
| Interest | + | 24,316 |
| Total investment income | | 11,006,084 |
| Expenses |
| Shareholder reports | | 35,233 |
| Registration fees | | 15,461 |
| Professional fees | | 15,419 |
| Portfolio accounting fees | | 12,030 |
| Transfer agent fees | | 11,572 |
| Independent trustees' fees | | 6,458 |
| Custodian fees | | 512 |
| Other expenses | + | 6,573 |
| Total expenses | | 103,258 |
| Expense reduction by CSIM | – | 103,258 |
| Net expenses | – | — |
| Net investment income | | 11,006,084 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 2,594,929 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 4,009,389 |
| Net realized losses on sales of affiliated underlying funds | | (3,246,422) |
| Net realized gains on sales of unaffiliated underlying funds | + | 1,989,560 |
| Net realized gains | | 5,347,456 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 79,678,995 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 385,996 |
| Net change in unrealized appreciation (depreciation) | + | 80,064,991 |
| Net realized and unrealized gains | | 85,412,447 |
| Increase in net assets resulting from operations | | $96,418,531 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $11,006,084 | $12,011,403 |
| Net realized gains | | 5,347,456 | 46,388,953 |
| Net change in unrealized appreciation (depreciation) | + | 80,064,991 | (45,981,770) |
| Increase in net assets from operations | | 96,418,531 | 12,418,586 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (13,243,888) | (16,331,843) |
| Distributions from net realized gains | + | (41,459,607) | (60,050,458) |
| Total distributions | | ($54,703,495) | ($76,382,301) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 4,184,562 | $64,103,167 | 7,586,960 | $112,421,088 |
| Shares reinvested | | 3,644,656 | 53,467,109 | 5,048,206 | 74,662,962 |
| Shares redeemed | + | (5,222,362) | (79,905,391) | (7,812,359) | (116,129,400) |
| Net transactions in fund shares | | 2,606,856 | $37,664,885 | 4,822,807 | $70,954,650 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 55,659,649 | $841,481,038 | 50,836,842 | $834,490,103 |
| Total increase | + | 2,606,856 | 79,379,921 | 4,822,807 | 6,990,935 |
| End of period | | 58,266,505 | $920,860,959 | 55,659,649 | $841,481,038 |
| Net investment income not yet distributed | | | $1,104,211 | | $3,342,015 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 1/23/13 1–
10/31/13 | |
| Per-Share Data |
| Net asset value at beginning of period | $12.00 | $12.51 | $12.67 | $11.66 | $10.00 | |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.15 2 | 0.16 2 | 0.14 2 | 0.16 | 0.02 | |
| Net realized and unrealized gains (losses) | 1.26 | 0.00 3 | 0.15 | 1.03 | 1.64 | |
| Total from investment operations | 1.41 | 0.16 | 0.29 | 1.19 | 1.66 | |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.18) | (0.23) | (0.29) | (0.18) | — | |
| Distributions from net realized gains | (0.44) | (0.44) | (0.16) | — | — | |
| Total distributions | (0.62) | (0.67) | (0.45) | (0.18) | — | |
| Net asset value at end of period | $12.79 | $12.00 | $12.51 | $12.67 | $11.66 | |
| Total return | 12.20% 4 | 1.40% | 2.37% | 10.30% | 16.60% 4 | |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses5 | — 6 | 0.00% 7 | 0.00% 7 | — | 0.00% 6,8 | |
| Gross operating expenses5 | 0.10% 6 | 0.13% | 0.20% | 0.32% | 1.08% 6 | |
| Net investment income (loss) | 2.44% 6 | 1.34% | 1.09% | 1.03% | 0.46% 6 | |
| Portfolio turnover rate | 9% 4 | 1% | 10% | 23% | 39% 4 | |
| Net assets, end of period (x 1,000,000) | $103 | $82 | $66 | $41 | $18 | |
| |
1
Commencement of operations.
2
Calculated based on the average shares outstanding during the period.
3
Per-share amount was less than $0.005.
4
Not annualized.
5
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
6
Annualized.
7
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
8
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if interest expense had not been incurred.
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.8% | Other Investment Companies | 93,196,360 | 100,446,158 |
| 2.0% | Short-Term Investments | 2,106,951 | 2,106,951 |
| 99.8% | Total Investments | 95,303,311 | 102,553,109 |
| 0.2% | Other Assets and Liabilities, Net | | 166,438 |
| 100.0% | Net Assets | | 102,719,547 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.8% of net assets |
| |
| Equity Funds 88.8% |
| Global Real Estate 4.1% |
| Schwab Global Real Estate Fund (a) | 565,322 | 4,194,687 |
| International 25.0% |
| Laudus International MarketMasters Fund, Select Shares (a) | 579,286 | 13,647,974 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 380,972 | 2,983,016 |
| Schwab International Core Equity Fund (a) | 884,625 | 9,129,329 |
| | | 25,760,319 |
| Large-Cap 51.6% |
| Dodge & Cox Stock Fund | 11,780 | 2,246,761 |
| Laudus U.S. Large Cap Growth Fund *(a) | 529,396 | 9,889,117 |
| Schwab Core Equity Fund (a) | 660,338 | 14,685,924 |
| Schwab Dividend Equity Fund (a) | 196,485 | 3,177,157 |
| Schwab S&P 500 Index Fund (a) | 503,889 | 18,583,427 |
| TCW Relative Value Large Cap Fund, Class I | 193,765 | 4,419,784 |
| | | 53,002,170 |
| Small-Cap 8.1% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 146,352 | 2,872,885 |
| Schwab Small-Cap Equity Fund (a) | 246,326 | 5,429,040 |
| | | 8,301,925 |
| | | 91,259,101 |
| |
| Fixed-Income Funds 9.0% |
| Intermediate-Term Bond 8.3% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 175,495 | 1,932,201 |
| Metropolitan West Total Return Bond Fund, Class I | 217,782 | 2,315,025 |
| Security | Number
of Shares | Value ($) |
| Schwab Intermediate-Term Bond Fund (a) | 86,492 | 870,974 |
| Schwab U.S. Aggregate Bond Index Fund (a) | 312,221 | 3,137,821 |
| Wells Fargo Core Bond Fund, Institutional Class | 20,123 | 257,972 |
| | | 8,513,993 |
| International Bond 0.5% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 51,469 | 488,959 |
| Short-Term Bond 0.2% |
| Schwab Short-Term Bond Index Fund (a) | 18,392 | 184,105 |
| | | 9,187,057 |
| Total Other Investment Companies |
| (Cost $93,196,360) | | 100,446,158 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 2.0% of net assets |
| |
| Time Deposits 2.0% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (b) | 1,027,090 | 1,027,090 |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (b) | 1,027,090 | 1,027,090 |
| Citibank |
| 0.42%, 05/01/17 (b) | 52,771 | 52,771 |
| Total Short-Term Investments |
| (Cost $2,106,951) | | 2,106,951 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $95,697,716 and the unrealized appreciation and depreciation were $7,058,477 and ($203,084), respectively, with a net unrealized appreciation of $6,855,393.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $100,446,158 | $— | $— | $100,446,158 | |
| Short-Term Investments1 | — | 2,106,951 | — | 2,106,951 | |
| Total | $100,446,158 | $2,106,951 | $— | $102,553,109 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $82,593,009) | | $89,274,415 |
| Investments in unaffiliated issuers, at value (cost $12,710,302) | + | 13,278,694 |
| Total investments, at value (cost $95,303,311) | | 102,553,109 |
| Receivables: | | |
| Fund shares sold | | 187,194 |
| Dividends | | 11,645 |
| Due from investment adviser | | 7,469 |
| Interest | | 74 |
| Prepaid expenses | + | 15,105 |
| Total assets | | 102,774,596 |
| Liabilities |
| Payables: | | |
| Investments bought | | 11,889 |
| Independent trustees' fees | | 273 |
| Fund shares redeemed | | 18,402 |
| Accrued expenses | + | 24,485 |
| Total liabilities | | 55,049 |
| Net Assets |
| Total assets | | 102,774,596 |
| Total liabilities | – | 55,049 |
| Net assets | | $102,719,547 |
| Net Assets by Source | | |
| Capital received from investors | | 95,686,249 |
| Net investment income not yet distributed | | 103,447 |
| Net realized capital losses | | (319,947) |
| Net unrealized capital appreciation | | 7,249,798 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $102,719,547 | | 8,031,805 | | $12.79 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $969,800 |
| Dividends received from unaffiliated underlying funds | | 136,379 |
| Interest | + | 2,784 |
| Total investment income | | 1,108,963 |
| Expenses |
| Professional fees | | 13,099 |
| Registration fees | | 12,485 |
| Shareholder reports | | 5,152 |
| Independent trustees' fees | | 4,069 |
| Transfer agent fees | | 3,845 |
| Portfolio accounting fees | | 2,872 |
| Custodian fees | | 1,046 |
| Other expenses | + | 853 |
| Total expenses | | 43,421 |
| Expense reduction by CSIM | – | 43,421 |
| Net expenses | – | — |
| Net investment income | | 1,108,963 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 264,754 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 375,024 |
| Net realized losses on sales of affiliated underlying funds | | (611,756) |
| Net realized losses on sales of unaffiliated underlying funds | + | (4,472) |
| Net realized gains | | 23,550 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 9,062,186 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 315,843 |
| Net change in unrealized appreciation (depreciation) | + | 9,378,029 |
| Net realized and unrealized gains | | 9,401,579 |
| Increase in net assets resulting from operations | | $10,510,542 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $1,108,963 | $980,012 |
| Net realized gains | | 23,550 | 3,459,499 |
| Net change in unrealized appreciation (depreciation) | + | 9,378,029 | (2,924,876) |
| Increase in net assets from operations | | 10,510,542 | 1,514,635 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (1,270,308) | (1,239,407) |
| Distributions from net realized gains | + | (3,146,401) | (2,410,714) |
| Total distributions | | ($4,416,709) | ($3,650,121) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 1,523,028 | $18,768,516 | 2,277,183 | $26,554,975 |
| Shares reinvested | | 363,903 | 4,308,619 | 304,143 | 3,570,641 |
| Shares redeemed | + | (677,005) | (8,338,177) | (1,020,715) | (11,929,960) |
| Net transactions in fund shares | | 1,209,926 | $14,738,958 | 1,560,611 | $18,195,656 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 6,821,879 | $81,886,756 | 5,261,268 | $65,826,586 |
| Total increase | + | 1,209,926 | 20,832,791 | 1,560,611 | 16,060,170 |
| End of period | | 8,031,805 | $102,719,547 | 6,821,879 | $81,886,756 |
| Net investment income not yet distributed | | | $103,447 | | $264,792 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 1/23/13 1–
10/31/13 | |
| Per-Share Data |
| Net asset value at beginning of period | $12.08 | $12.60 | $12.75 | $11.72 | $10.00 | |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.15 2 | 0.15 2 | 0.13 2 | 0.17 | 0.02 | |
| Net realized and unrealized gains (losses) | 1.32 | 0.01 | 0.18 | 1.04 | 1.70 | |
| Total from investment operations | 1.47 | 0.16 | 0.31 | 1.21 | 1.72 | |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.18) | (0.23) | (0.30) | (0.18) | — | |
| Distributions from net realized gains | (0.46) | (0.45) | (0.16) | — | — | |
| Total distributions | (0.64) | (0.68) | (0.46) | (0.18) | — | |
| Net asset value at end of period | $12.91 | $12.08 | $12.60 | $12.75 | $11.72 | |
| Total return | 12.56% 3 | 1.39% | 2.44% | 10.43% | 17.20% 3 | |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses4 | — 5 | 0.01% 6 | 0.00% 7 | — | 0.00% 5,8 | |
| Gross operating expenses4 | 0.11% 5 | 0.16% | 0.25% | 0.39% | 1.37% 5 | |
| Net investment income (loss) | 2.43% 5 | 1.31% | 1.05% | 0.99% | 0.40% 5 | |
| Portfolio turnover rate | 9% 3 | 1% | 8% | 23% | 40% 3 | |
| Net assets, end of period (x 1,000,000) | $85 | $68 | $53 | $33 | $14 | |
| |
1
Commencement of operations.
2
Calculated based on the average shares outstanding during the period.
3
Not annualized.
4
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
5
Annualized.
6
The ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
7
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
8
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if interest expense had not been incurred.
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.9% | Other Investment Companies | 76,419,956 | 82,738,286 |
| 1.8% | Short-Term Investments | 1,571,556 | 1,571,556 |
| 99.7% | Total Investments | 77,991,512 | 84,309,842 |
| 0.3% | Other Assets and Liabilities, Net | | 233,628 |
| 100.0% | Net Assets | | 84,543,470 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.9% of net assets |
| |
| Equity Funds 91.7% |
| Global Real Estate 4.4% |
| Schwab Global Real Estate Fund (a) | 496,583 | 3,684,645 |
| International 26.0% |
| Laudus International MarketMasters Fund, Select Shares (a) | 494,149 | 11,642,147 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 347,186 | 2,718,466 |
| Schwab International Core Equity Fund (a) | 742,671 | 7,664,361 |
| | | 22,024,974 |
| Large-Cap 52.6% |
| Dodge & Cox Stock Fund | 8,781 | 1,674,859 |
| Laudus U.S. Large Cap Growth Fund *(a) | 461,040 | 8,612,222 |
| Schwab Core Equity Fund (a) | 544,892 | 12,118,402 |
| Schwab Dividend Equity Fund (a) | 188,344 | 3,045,522 |
| Schwab S&P 500 Index Fund (a) | 412,819 | 15,224,761 |
| TCW Relative Value Large Cap Fund, Class I | 164,981 | 3,763,224 |
| | | 44,438,990 |
| Small-Cap 8.7% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 127,132 | 2,495,607 |
| Schwab Small-Cap Equity Fund (a) | 220,028 | 4,849,409 |
| | | 7,345,016 |
| | | 77,493,625 |
| |
| Fixed-Income Funds 6.2% |
| Intermediate-Term Bond 5.6% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 106,148 | 1,168,693 |
| Metropolitan West Total Return Bond Fund, Class I | 119,552 | 1,270,843 |
| Security | Number
of Shares | Value ($) |
| Schwab Intermediate-Term Bond Fund (a) | 46,918 | 472,460 |
| Schwab U.S. Aggregate Bond Index Fund (a) | 173,187 | 1,740,530 |
| Wells Fargo Core Bond Fund, Institutional Class | 9,462 | 121,299 |
| | | 4,773,825 |
| International Bond 0.5% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 41,974 | 398,756 |
| Short-Term Bond 0.1% |
| Schwab Short-Term Bond Index Fund (a) | 7,201 | 72,080 |
| | | 5,244,661 |
| Total Other Investment Companies |
| (Cost $76,419,956) | | 82,738,286 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 1.8% of net assets |
| |
| Time Deposits 1.8% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (b) | 726,466 | 726,466 |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (b) | 845,090 | 845,090 |
| Total Short-Term Investments |
| (Cost $1,571,556) | | 1,571,556 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $78,286,582 and the unrealized appreciation and depreciation were $6,112,403 and ($89,143), respectively, with a net unrealized appreciation of $6,023,260.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $82,738,286 | $— | $— | $82,738,286 | |
| Short-Term Investments1 | — | 1,571,556 | — | 1,571,556 | |
| Total | $82,738,286 | $1,571,556 | $— | $84,309,842 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $68,939,782) | | $74,739,368 |
| Investments in unaffiliated issuers, at value (cost $9,051,730) | + | 9,570,474 |
| Total investments, at value (cost $77,991,512) | | 84,309,842 |
| Receivables: | | |
| Fund shares sold | | 364,397 |
| Due from investment adviser | | 7,375 |
| Dividends | | 6,435 |
| Interest | | 55 |
| Prepaid expenses | + | 14,374 |
| Total assets | | 84,702,478 |
| Liabilities |
| Payables: | | |
| Investments bought | | 6,596 |
| Independent trustees' fees | | 273 |
| Fund shares redeemed | | 127,664 |
| Accrued expenses | + | 24,475 |
| Total liabilities | | 159,008 |
| Net Assets |
| Total assets | | 84,702,478 |
| Total liabilities | – | 159,008 |
| Net assets | | $84,543,470 |
| Net Assets by Source | | |
| Capital received from investors | | 78,417,876 |
| Net investment income not yet distributed | | 80,680 |
| Net realized capital losses | | (273,416) |
| Net unrealized capital appreciation | | 6,318,330 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $84,543,470 | | 6,549,175 | | $12.91 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $808,207 |
| Dividends received from unaffiliated underlying funds | | 100,902 |
| Interest | + | 2,252 |
| Total investment income | | 911,361 |
| Expenses |
| Professional fees | | 13,058 |
| Registration fees | | 11,043 |
| Shareholder reports | | 5,410 |
| Independent trustees' fees | | 4,022 |
| Transfer agent fees | | 4,021 |
| Portfolio accounting fees | | 2,779 |
| Custodian fees | | 1,217 |
| Other expenses | + | 750 |
| Total expenses | | 42,300 |
| Expense reduction by CSIM | – | 42,300 |
| Net expenses | – | — |
| Net investment income | | 911,361 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 223,204 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 287,145 |
| Net realized losses on sales of affiliated underlying funds | | (542,976) |
| Net realized gains on sales of unaffiliated underlying funds | + | 2,026 |
| Net realized losses | | (30,601) |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 7,730,201 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 295,287 |
| Net change in unrealized appreciation (depreciation) | + | 8,025,488 |
| Net realized and unrealized gains | | 7,994,887 |
| Increase in net assets resulting from operations | | $8,906,248 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $911,361 | $782,023 |
| Net realized gains (losses) | | (30,601) | 2,882,816 |
| Net change in unrealized appreciation (depreciation) | + | 8,025,488 | (2,387,792) |
| Increase in net assets from operations | | 8,906,248 | 1,277,047 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (1,025,272) | (1,001,880) |
| Distributions from net realized gains | + | (2,632,547) | (1,983,116) |
| Total distributions | | ($3,657,819) | ($2,984,996) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 1,311,524 | $16,311,684 | 1,940,302 | $22,754,852 |
| Shares reinvested | | 296,529 | 3,537,587 | 245,062 | 2,894,189 |
| Shares redeemed | + | (693,787) | (8,618,030) | (746,622) | (8,754,679) |
| Net transactions in fund shares | | 914,266 | $11,231,241 | 1,438,742 | $16,894,362 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 5,634,909 | $68,063,800 | 4,196,167 | $52,877,387 |
| Total increase | + | 914,266 | 16,479,670 | 1,438,742 | 15,186,413 |
| End of period | | 6,549,175 | $84,543,470 | 5,634,909 | $68,063,800 |
| Net investment income not yet distributed | | | $80,680 | | $194,591 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 1/23/13 1–
10/31/13 | |
| Per-Share Data |
| Net asset value at beginning of period | $12.09 | $12.63 | $12.79 | $11.74 | $10.00 | |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.15 2 | 0.15 2 | 0.13 2 | 0.16 | 0.02 | |
| Net realized and unrealized gains (losses) | 1.37 | 0.00 3 | 0.17 | 1.07 | 1.72 | |
| Total from investment operations | 1.52 | 0.15 | 0.30 | 1.23 | 1.74 | |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.17) | (0.23) | (0.30) | (0.18) | — | |
| Distributions from net realized gains | (0.45) | (0.46) | (0.16) | — | — | |
| Total distributions | (0.62) | (0.69) | (0.46) | (0.18) | — | |
| Net asset value at end of period | $12.99 | $12.09 | $12.63 | $12.79 | $11.74 | |
| Total return | 13.00% 4 | 1.28% | 2.36% | 10.59% | 17.40% 4 | |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses5 | — 6 | 0.01% 7 | 0.00% 8 | — | 0.00% 6,9 | |
| Gross operating expenses5 | 0.19% 6 | 0.27% | 0.44% | 0.68% | 2.78% 6 | |
| Net investment income (loss) | 2.43% 6 | 1.26% | 1.03% | 0.94% | 0.34% 6 | |
| Portfolio turnover rate | 7% 4 | 1% | 8% | 29% | 12% 4 | |
| Net assets, end of period (x 1,000,000) | $48 | $38 | $29 | $18 | $7 | |
| |
1
Commencement of operations.
2
Calculated based on the average shares outstanding during the period.
3
Per-share amount was less than $0.005.
4
Not annualized.
5
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
6
Annualized.
7
The ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
8
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
9
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if interest expense had not been incurred.
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.8% | Other Investment Companies | 43,550,765 | 47,261,891 |
| 1.7% | Short-Term Investments | 840,154 | 840,154 |
| 99.5% | Total Investments | 44,390,919 | 48,102,045 |
| 0.5% | Other Assets and Liabilities, Net | | 227,315 |
| 100.0% | Net Assets | | 48,329,360 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.8% of net assets |
| |
| Equity Funds 94.0% |
| Global Real Estate 4.5% |
| Schwab Global Real Estate Fund (a) | 291,061 | 2,159,671 |
| International 27.1% |
| Laudus International MarketMasters Fund, Select Shares (a) | 287,441 | 6,772,110 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 222,844 | 1,744,871 |
| Schwab International Core Equity Fund (a) | 440,911 | 4,550,206 |
| | | 13,067,187 |
| Large-Cap 53.3% |
| Dodge & Cox Stock Fund | 5,197 | 991,198 |
| Laudus U.S. Large Cap Growth Fund *(a) | 271,973 | 5,080,456 |
| Schwab Core Equity Fund (a) | 315,682 | 7,020,771 |
| Schwab Dividend Equity Fund (a) | 108,729 | 1,758,142 |
| Schwab S&P 500 Index Fund (a) | 235,993 | 8,703,425 |
| TCW Relative Value Large Cap Fund, Class I | 97,139 | 2,215,749 |
| | | 25,769,741 |
| Small-Cap 9.1% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 78,947 | 1,549,739 |
| Schwab Small-Cap Equity Fund (a) | 129,822 | 2,861,288 |
| | | 4,411,027 |
| | | 45,407,626 |
| |
| Fixed-Income Funds 3.8% |
| Intermediate-Term Bond 3.6% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 40,891 | 450,209 |
| Metropolitan West Total Return Bond Fund, Class I | 42,589 | 452,719 |
| Security | Number
of Shares | Value ($) |
| Schwab Intermediate-Term Bond Fund (a) | 17,550 | 176,724 |
| Schwab U.S. Aggregate Bond Index Fund (a) | 60,792 | 610,962 |
| Wells Fargo Core Bond Fund, Institutional Class | 2,803 | 35,937 |
| | | 1,726,551 |
| International Bond 0.2% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 12,704 | 120,691 |
| Short-Term Bond 0.0% |
| Schwab Short-Term Bond Index Fund (a) | 702 | 7,023 |
| | | 1,854,265 |
| Total Other Investment Companies |
| (Cost $43,550,765) | | 47,261,891 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 1.7% of net assets |
| |
| Time Deposits 1.7% |
| BNP Paribas |
| 0.42%, 05/01/17 (b) | 482,278 | 482,278 |
| Skandinaviska Enskilda Banken |
| 0.42%, 05/01/17 (b) | 357,876 | 357,876 |
| Total Short-Term Investments |
| (Cost $840,154) | | 840,154 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $44,530,549 and the unrealized appreciation and depreciation were $3,591,254 and ($19,758), respectively, with a net unrealized appreciation of $3,571,496.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $47,261,891 | $— | $— | $47,261,891 | |
| Short-Term Investments1 | — | 840,154 | — | 840,154 | |
| Total | $47,261,891 | $840,154 | $— | $48,102,045 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $39,726,625) | | $43,116,079 |
| Investments in unaffiliated issuers, at value (cost $4,664,294) | + | 4,985,966 |
| Total investments, at value (cost $44,390,919) | | 48,102,045 |
| Receivables: | | |
| Fund shares sold | | 247,722 |
| Due from investment adviser | | 6,977 |
| Dividends | | 2,253 |
| Interest | | 29 |
| Prepaid expenses | + | 12,850 |
| Total assets | | 48,371,876 |
| Liabilities |
| Payables: | | |
| Investments bought | | 2,323 |
| Independent trustees' fees | | 201 |
| Fund shares redeemed | | 15,547 |
| Accrued expenses | + | 24,445 |
| Total liabilities | | 42,516 |
| Net Assets |
| Total assets | | 48,371,876 |
| Total liabilities | – | 42,516 |
| Net assets | | $48,329,360 |
| Net Assets by Source | | |
| Capital received from investors | | 44,703,845 |
| Net investment income not yet distributed | | 43,199 |
| Net realized capital losses | | (128,810) |
| Net unrealized capital appreciation | | 3,711,126 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $48,329,360 | | 3,721,840 | | $12.99 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $465,086 |
| Dividends received from unaffiliated underlying funds | | 51,011 |
| Interest | + | 1,213 |
| Total investment income | | 517,310 |
| Expenses |
| Professional fees | | 12,978 |
| Registration fees | | 10,036 |
| Shareholder reports | | 5,307 |
| Transfer agent fees | | 3,945 |
| Independent trustees' fees | | 3,855 |
| Portfolio accounting fees | | 2,595 |
| Custodian fees | | 1,130 |
| Other expenses | + | 554 |
| Total expenses | | 40,400 |
| Expense reduction by CSIM | – | 40,400 |
| Net expenses | – | — |
| Net investment income | | 517,310 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 127,691 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 152,874 |
| Net realized losses on sales of affiliated underlying funds | | (281,772) |
| Net realized gains on sales of unaffiliated underlying funds | + | 502 |
| Net realized losses | | (705) |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 4,485,967 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 189,400 |
| Net change in unrealized appreciation (depreciation) | + | 4,675,367 |
| Net realized and unrealized gains | | 4,674,662 |
| Increase in net assets resulting from operations | | $5,191,972 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $517,310 | $418,835 |
| Net realized gains (losses) | | (705) | 1,609,792 |
| Net change in unrealized appreciation (depreciation) | + | 4,675,367 | (1,300,425) |
| Increase in net assets from operations | | 5,191,972 | 728,202 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (570,725) | (539,934) |
| Distributions from net realized gains | + | (1,461,213) | (1,092,479) |
| Total distributions | | ($2,031,938) | ($1,632,413) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 775,668 | $9,700,688 | 1,228,549 | $14,416,250 |
| Shares reinvested | | 163,811 | 1,964,096 | 134,412 | 1,590,086 |
| Shares redeemed | + | (381,482) | (4,756,315) | (479,820) | (5,646,620) |
| Net transactions in fund shares | | 557,997 | $6,908,469 | 883,141 | $10,359,716 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 3,163,843 | $38,260,857 | 2,280,702 | $28,805,352 |
| Total increase | + | 557,997 | 10,068,503 | 883,141 | 9,455,505 |
| End of period | | 3,721,840 | $48,329,360 | 3,163,843 | $38,260,857 |
| Net investment income not yet distributed | | | $43,199 | | $96,614 |
Schwab Target Funds | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 8/25/16 1–
10/31/16 | | | | |
| Per-Share Data |
| Net asset value at beginning of period | $9.83 | $10.00 | | | | |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss)2 | 0.10 | 0.01 | | | | |
| Net realized and unrealized gains (losses) | 1.17 | (0.18) | | | | |
| Total from investment operations | 1.27 | (0.17) | | | | |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.11) | — | | | | |
| Net asset value at end of period | $10.99 | $9.83 | | | | |
| Total return | 13.04% 3 | (1.70%) 3 | | | | |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses4 | — 5 | — 6 | | | | |
| Gross operating expenses4 | 3.89% 5 | 7.87% 6 | | | | |
| Net investment income (loss) | 1.85% 5 | 0.43% 6 | | | | |
| Portfolio turnover rate | 2% 3 | 0% 3 | | | | |
| Net assets, end of period (x 1,000,000) | $3 | $1 | | | | |
| |
1
Commencement of operations.
2
Calculated based on the average shares outstanding during the period.
3
Not annualized.
4
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
5
Annualized.
6
Annualized (except for non-recurring professional fees and shareholder report fees).
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.9% | Other Investment Companies | 2,590,563 | 2,743,967 |
| 1.9% | Short-Term Investments | 53,753 | 53,753 |
| 99.8% | Total Investments | 2,644,316 | 2,797,720 |
| 0.2% | Other Assets and Liabilities, Net | | 5,421 |
| 100.0% | Net Assets | | 2,803,141 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.9% of net assets |
| |
| Equity Funds 95.1% |
| Global Real Estate 4.3% |
| Schwab Global Real Estate Fund (a) | 16,143 | 119,778 |
| International 27.4% |
| Laudus International MarketMasters Fund, Select Shares (a) | 16,759 | 394,832 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 13,463 | 105,416 |
| Schwab International Core Equity Fund (a) | 26,012 | 268,446 |
| | | 768,694 |
| Large-Cap 53.8% |
| Dodge & Cox Stock Fund | 344 | 65,654 |
| Laudus U.S. Large Cap Growth Fund *(a) | 15,750 | 294,216 |
| Schwab Core Equity Fund (a) | 19,101 | 424,804 |
| Schwab Dividend Equity Fund (a) | 6,481 | 104,793 |
| Schwab S&P 500 Index Fund (a) | 13,486 | 497,376 |
| TCW Relative Value Large Cap Fund, Class I | 5,262 | 120,027 |
| | | 1,506,870 |
| Small-Cap 9.6% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 4,847 | 95,147 |
| Schwab Small-Cap Equity Fund (a) | 7,928 | 174,733 |
| | | 269,880 |
| | | 2,665,222 |
| |
| Fixed-Income Funds 2.8% |
| Intermediate-Term Bond 2.7% |
| Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 1,849 | 20,362 |
| Metropolitan West Total Return Bond Fund, Class I | 1,684 | 17,905 |
| Security | Number
of Shares | Value ($) |
| Schwab Intermediate-Term Bond Fund (a) | 562 | 5,655 |
| Schwab U.S. Aggregate Bond Index Fund (a) | 2,809 | 28,231 |
| Wells Fargo Core Bond Fund, Institutional Class | 237 | 3,035 |
| | | 75,188 |
| International Bond 0.1% |
| Laudus Mondrian International Government Fixed Income Fund (a) | 374 | 3,557 |
| | | 78,745 |
| Total Other Investment Companies |
| (Cost $2,590,563) | | 2,743,967 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 1.9% of net assets |
| |
| Time Deposits 1.9% |
| BNP Paribas |
| 0.42%, 05/01/17 (b) | 27,571 | 27,571 |
| Skandinaviska Enskilda Banken |
| 0.42%, 05/01/17 (b) | 26,182 | 26,182 |
| Total Short-Term Investments |
| (Cost $53,753) | | 53,753 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $2,644,316 and the unrealized appreciation and depreciation were $153,720 and ($316), respectively, with a net unrealized appreciation of $153,404.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the current daily overnight rate. |
Schwab Target Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $2,743,967 | $— | $— | $2,743,967 | |
| Short-Term Investments1 | — | 53,753 | — | 53,753 | |
| Total | $2,743,967 | $53,753 | $— | $2,797,720 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Target Funds | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $2,370,317) | | $2,516,984 |
| Investments in unaffiliated issuers, at value (cost $273,999) | + | 280,736 |
| Total investments, at value (cost $2,644,316) | | 2,797,720 |
| Receivables: | | |
| Fund shares sold | | 51,523 |
| Due from investment adviser | | 953 |
| Dividends | | 91 |
| Prepaid expenses | + | 4,902 |
| Total assets | | 2,855,189 |
| Liabilities |
| Payables: | | |
| Investments bought | | 25,092 |
| Independent trustees' fees | | 441 |
| Accrued expenses | + | 26,515 |
| Total liabilities | | 52,048 |
| Net Assets |
| Total assets | | 2,855,189 |
| Total liabilities | – | 52,048 |
| Net assets | | $2,803,141 |
| Net Assets by Source | | |
| Capital received from investors | | 2,640,831 |
| Net investment income not yet distributed | | 1,005 |
| Net realized capital gains | | 7,901 |
| Net unrealized capital appreciation | | 153,404 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $2,803,141 | | 255,046 | | $10.99 |
| | | | | |
Schwab Target Funds | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $13,690 |
| Dividends received from unaffiliated underlying funds | | 767 |
| Interest | + | 66 |
| Total investment income | | 14,523 |
| Expenses |
| Professional fees | | 18,971 |
| Independent trustees' fees | | 3,948 |
| Shareholder reports | | 3,485 |
| Custodian fees | | 2,049 |
| Portfolio accounting fees | | 1,226 |
| Transfer agent fees | | 306 |
| Registration fees | | 279 |
| Other expenses | + | 275 |
| Total expenses | | 30,539 |
| Expense reduction by CSIM | – | 30,539 |
| Net expenses | – | — |
| Net investment income | | 14,523 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 3,533 |
| Realized capital gain distributions received from unaffiliated underlying funds | | 3,705 |
| Net realized losses on sales of affiliated underlying funds | | (413) |
| Net realized gains on sales of unaffiliated underlying funds | + | 1,076 |
| Net realized gains | | 7,901 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | | 157,510 |
| Net change in unrealized appreciation (depreciation) on unaffiliated underlying funds | + | 6,523 |
| Net change in unrealized appreciation (depreciation) | + | 164,033 |
| Net realized and unrealized gains | | 171,934 |
| Increase in net assets resulting from operations | | $186,457 |
Schwab Target Funds | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 8/25/16*-10/31/16 |
| Net investment income | | $14,523 | $376 |
| Net realized gains | | 7,901 | — |
| Net change in unrealized appreciation (depreciation) | + | 164,033 | (10,629) |
| Increase (decrease) in net assets from operations | | 186,457 | (10,253) |
| Distributions to Shareholders | |
| Distributions from net investment income | | ($13,894) | $— |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 8/25/16*-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 193,803 | $2,030,014 | 62,839 | $627,951 |
| Shares reinvested | | 1,367 | 13,863 | — | — |
| Shares redeemed | + | (2,963) | (30,997) | — | — |
| Net transactions in fund shares | | 192,207 | $2,012,880 | 62,839 | $627,951 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 8/25/16*-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 62,839 | $617,698 | — | $— |
| Total increase | + | 192,207 | 2,185,443 | 62,839 | 617,698 |
| End of period | | 255,046 | $2,803,141 | 62,839 | $617,698 |
| Net investment income not yet distributed | | | $1,005 | | $376 |
| * | Commencement of operations. |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) |
| Schwab Target 2010 Fund | Schwab Small-Cap Equity Fund™ |
| Schwab Target 2015 Fund | Schwab Hedged Equity Fund™ |
| Schwab Target 2020 Fund | Schwab Health Care Fund™ |
| Schwab Target 2025 Fund | Schwab® International Core Equity Fund |
| Schwab Target 2030 Fund | Schwab Fundamental US Large Company Index Fund |
| Schwab Target 2035 Fund | Schwab Fundamental US Small Company Index Fund |
| Schwab Target 2040 Fund | Schwab Fundamental International Large Company Index Fund |
| Schwab Target 2045 Fund | Schwab Fundamental International Small Company Index Fund |
| Schwab Target 2050 Fund | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Schwab Target 2055 Fund | Schwab Fundamental Global Real Estate Index Fund |
| Schwab Target 2060 Fund | Schwab Target 2010 Index Fund |
| Schwab ® S&P 500 Index Fund | Schwab Target 2015 Index Fund |
| Schwab Small-Cap Index Fund® | Schwab Target 2020 Index Fund |
| Schwab Total Stock Market Index Fund® | Schwab Target 2025 Index Fund |
| Schwab International Index Fund® | Schwab Target 2030 Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Target 2035 Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Target 2040 Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Target 2045 Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Target 2050 Index Fund |
| Laudus Small-Cap MarketMasters Fund™ | Schwab Target 2055 Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2060 Index Fund |
| Schwab Balanced Fund™ | Schwab® Monthly Income Fund - Moderate Payout |
| Schwab Core Equity Fund™ | Schwab® Monthly Income Fund - Enhanced Payout |
| Schwab Dividend Equity Fund™ | Schwab® Monthly Income Fund - Maximum Payout |
| Schwab Large-Cap Growth Fund™ | |
The Schwab Target Funds are “funds of funds.” Each of the funds seeks to achieve its investment objective by investing in a combination of other affiliated Schwab and/or Laudus Funds and other unaffiliated, third-party mutual funds, in accordance with its target portfolio allocation. Each fund may also invest directly in equity and fixed-income securities, exchange-traded funds (ETFs), and cash equivalents, including money market securities.
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds' Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
The Schwab Target 2060 Fund commenced operations on August 25, 2016.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The financial statements of the funds should be read in conjunction with the underlying funds' financial statements. For more information about the underlying funds' operations and policies, please refer to those funds' semiannual and annual reports, which are filed and available on the U.S. Securities and Exchange Commission's (SEC) website at www.sec.gov or at the SEC's Public Reference Room in Washington D.C.
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Underlying funds: Mutual funds are valued at their respective NAVs.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.
• Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)—Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations.
• Level 3—significant unobservable inputs (including the funds' own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds' results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds' investments as of April 30, 2017 are disclosed in the Portfolio Holdings.
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(b) Accounting Policies for certain Portfolio Investments (if held):
Cash Management Transactions: The funds may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, may be subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed. Balances in the CMS Sweep are accounted for on a cost basis, which approximates market value.
(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.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets. Each fund bears its share of the allocable expenses of the underlying funds in which it invests. Such expenses are reflected in the net asset values of the underlying funds.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized 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.
(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 attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds' prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The funds are subject to asset allocation risk, which is the risk that the selection of the underlying funds and the allocation of a fund's assets among the various asset classes and market segments will cause the fund to underperform other funds with a similar investment objective.
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
Conflicts of Interest Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds may create a conflict of interest because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds. The investment adviser also may have an incentive to select an affiliated underlying fund for other reasons, including to increase assets under management or to support new investment strategies. In addition, other conflicts of interest may exist where the best interests of the affiliated underlying fund may not be aligned with those of the fund or vice versa. However, the investment adviser is a fiduciary to the fund and is legally obligated to act in the fund’s best interests when selecting underlying funds.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Direct Investment Risk. The funds may invest a portion of their assets directly in equity and fixed income securities, as well as other mutual funds or ETFs to maintain their asset allocations. A fund's direct investment in these securities is subject to the same or similar risks as an underlying fund's investment in the same security.
Underlying Fund Investment Risk. The value of your investment in the funds is based primarily on the prices of the underlying funds that the fund purchases. In turn, the price of each underlying fund is based on the value of its securities. The funds are subject to the performance and expenses of the underlying funds in which they invest. Before investing in the funds, investors should assess the risks associated with the underlying funds in which the funds may invest and the types of investments made by those underlying funds. These risks include any combination of the risks described below, although a fund's exposure to a particular risk will be proportionate to the fund's overall asset allocation and underlying fund allocation.
• Investment Risk. The funds may experience losses with respect to their investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective.
• Management Risk. Generally, the underlying funds are actively managed mutual funds. Any actively managed mutual fund is subject to the risk that its investment adviser (or subadviser(s)) will make poor security selections. An underlying fund's adviser applies its own investment techniques and risk analyses in making investment decisions for the underlying fund, but there can be no guarantee that they will produce the desired results.
• Fixed Income Risk. Interest rates rise and fall over time, which will affect an underlying fund's yield and share price. A change in a central bank’s monetary policy or improving economic conditions, among other things, may result in an increase in interest rates. A rise in interest rates could cause an underlying fund’s shares price to fall. The credit quality of a portfolio investment could also cause an underlying fund's share price to fall. An underlying fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations. Fixed income securities may be paid off earlier or later than expected. Either situation could cause an underlying fund to hold securities paying lower-than-market rates of interest, which could hurt the fund's yield or share price. Below investment-grade bonds (junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities.
• Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
• Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, the underlying fund’s performance could be impacted.
• Money Market Fund Risk. The funds may invest in underlying money market funds that either seek to maintain a stable $1 net asset value (“stable share price money market funds”) or have a share price that fluctuates (“variable share price money market funds”). Although an underlying stable share price money market fund seeks to maintain a stable $1 net asset value, it is possible to lose money by investing in such a money market fund. Because the share price of an underlying variable share price money market fund will fluctuate, when the fund sells the shares it owns they may be worth more or less than what the fund originally paid for them. In addition, neither type of money market fund is designed to offer capital appreciation. Certain underlying money market funds may impose a fee upon the sale of shares or may temporarily suspend the ability to sell shares if such fund's liquidity falls below required minimums.
• ETF Risk. When an underlying fund invests in an ETF, it will bear a proportionate share of the ETF's expenses. In addition, lack of liquidity in the market for an ETF's shares can result in its value being more volatile than the underlying portfolio of securities.
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
• Foreign Investment Risk. An underlying fund's investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. To the extent than an underlying fund invests a significant portion of its assets in any one country, the underlying fund will be subject to a greater risk of loss or volatility than if the underlying fund always maintained wide geographic diversity among the countries in which it invests.
• Emerging Markets Risk. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with an underlying fund's investments in emerging market countries and, at times, it may be difficult to value such investments.
• Derivatives Risk. An underlying fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right to buy or sell an instrument at a specific price before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. A swap is an agreement whereby two parties agree to exchange payment streams calculated in relation to a rate, index, instrument or certain securities and a predetermined amount. A credit default swap is an agreement in which the seller agrees to make a payment to the buyer in the event of a specified credit event in exchange for a fixed payment or series of fixed payments.
An underlying fund’s use of derivative instruments involves risks different from or possibly greater than the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as credit risk, leverage risk, liquidity risk, market risk and management risk, are discussed elsewhere in this section. An underlying fund’s use of derivatives is also subject to lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause an underlying fund to realize higher amounts of short-term capital gain. An underlying fund’s use of derivatives could reduce the underlying fund’s performance, increase its volatility, and could cause the fund to lose more than the initial amount invested. The use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) by an underlying fund could cause the fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.
• Leverage Risk. Certain underlying fund transactions, such as derivatives, short sales, reverse repurchase agreements, and mortgage dollar rolls, may give rise to a form of leverage and may expose an underlying fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of an underlying fund's portfolio securities, which means even a small amount of leverage can have a disproportionately large impact on the underlying fund.
• Liquidity Risk. An underlying fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or an underlying fund may have to sell them at a loss.
• Portfolio Turnover Risk. Certain of the underlying funds may buy and sell portfolio securities actively. If they do, their portfolio turnover rate and transaction costs will rise, which may lower the underlying fund's performance and may increase the likelihood of capital gain distributions.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
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 between CSIM and the trust.
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, Schwab) (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. The funds are not subject to any fee under the Plan.
Expense Limitation
CSIM and its affiliates have agreed with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expense charged, excluding interest, taxes and certain non-routine expenses to 0.00%.
The agreement to limit the funds' total expenses charged is limited to each fund's direct operating expenses and, therefore, does not apply to underlying fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
Investments in Affiliates
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 April 30, 2017, each Schwab Target Fund's ownership percentages of other related funds' shares are:
| Underlying Funds | Schwab
Target
2010
Fund | Schwab
Target
2015
Fund | Schwab
Target
2020
Fund | Schwab
Target
2025
Fund | Schwab
Target
2030
Fund | Schwab
Target
2035
Fund | Schwab
Target
2040
Fund | Schwab
Target
2045
Fund | Schwab
Target
2050
Fund | Schwab
Target
2055
Fund | Schwab
Target
2060
Fund |
| Laudus International MarketMasters Fund, Select Shares | 0.2% | 0.4% | 2.6% | 2.8% | 6.0% | 3.0% | 7.5% | 0.9% | 0.7% | 0.4% | 0.0%* |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | —% | —% | 0.4% | 1.1% | 3.5% | 2.2% | 6.9% | 0.9% | 0.8% | 0.5% | 0.0%* |
| Laudus Mondrian International Government Fixed Income Fund | 0.5% | 0.8% | 7.1% | 6.2% | 10.7% | 4.1% | 5.3% | 0.5% | 0.4% | 0.1% | 0.0%* |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 0.2% | 0.4% | 3.3% | 4.0% | 9.6% | 5.1% | 13.8% | 1.7% | 1.4% | 0.9% | 0.1% |
| Laudus U.S. Large Cap Growth Fund | 0.1% | 0.2% | 1.4% | 1.6% | 3.6% | 1.9% | 4.9% | 0.6% | 0.5% | 0.3% | 0.0%* |
| Schwab Core Equity Fund | 0.2% | 0.3% | 2.0% | 2.3% | 4.8% | 2.3% | 5.7% | 0.7% | 0.6% | 0.3% | 0.0%* |
| Schwab Dividend Equity Fund | 0.0%* | 0.0%* | 0.1% | 0.2% | 0.9% | 0.6% | 1.7% | 0.2% | 0.2% | 0.1% | 0.0%* |
| Schwab Global Real Estate Fund | 0.4% | 0.7% | 5.1% | 5.6% | 11.1% | 5.6% | 14.5% | 1.6% | 1.4% | 0.8% | 0.0%* |
| Schwab Intermediate-Term Bond Fund | —% | —% | 1.2% | 1.7% | 3.4% | 1.4% | 2.8% | 0.3% | 0.1% | 0.1% | 0.0%* |
| Schwab International Core Equity Fund | 0.2% | 0.4% | 3.0% | 3.2% | 7.0% | 3.5% | 8.8% | 1.0% | 0.9% | 0.5% | 0.0%* |
| Schwab S&P 500 Index Fund | 0.0%* | 0.0%* | 0.3% | 0.3% | 0.6% | 0.3% | 0.6% | 0.1% | 0.1% | 0.0%* | 0.0%* |
| Schwab Short-Term Bond Index Fund | 4.5% | 6.9% | 27.6% | 14.1% | 15.6% | 3.9% | 4.1% | 0.1% | 0.1% | 0.0%* | —% |
| Schwab Small-Cap Equity Fund | 0.1% | 0.2% | 1.8% | 2.0% | 4.7% | 2.5% | 6.8% | 0.9% | 0.8% | 0.5% | 0.0%* |
| Schwab Treasury Inflation Protected Securities Index Fund | 1.1% | 1.7% | 5.3% | 1.4% | —% | —% | —% | —% | —% | —% | —% |
| Schwab U.S. Aggregate Bond Index Fund | 1.3% | 2.0% | 9.3% | 6.0% | 8.6% | 2.7% | 3.8% | 0.3% | 0.2% | 0.1% | 0.0%* |
| Schwab Variable Share Price Money Fund, Ultra Shares | 0.4% | 0.7% | 1.8% | 1.0% | 0.1% | 0.2% | 0.2% | —% | —% | —% | —% |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Below is a summary of the funds' transactions with their affiliated underlying funds during the period ended April 30, 2017:
Schwab Target 2010 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 145,572 | 1,273 | (10,619) | 136,226 | $3,209,486 | | $108,607 | | $26,247 |
| Laudus Mondrian International Government Fixed Income Fund | 35,650 | 16,392 | — | 52,042 | 494,403 | | — | | 3,281 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 28,044 | 285 | (7,114) | 21,215 | 416,450 | | 77,212 | | 5,427 |
| Laudus U.S. Large Cap Growth Fund | 218,108 | 3,555 | (116,192) | 105,471 | 1,970,205 | | 944,289 | | 59,151 |
| Schwab Core Equity Fund | 206,034 | 3,299 | (61,362) | 147,971 | 3,290,872 | | 491,436 | | 68,347 |
| Schwab Dividend Equity Fund | 125,632 | 519 | (116,606) | 9,545 | 154,344 | | 158,331 | | 8,230 |
| Schwab Global Real Estate Fund | 161,504 | 4,949 | (17,398) | 149,055 | 1,105,990 | | 40,868 | | 34,309 |
| Schwab International Core Equity Fund | 226,044 | 5,681 | (30,988) | 200,737 | 2,071,609 | | 12,701 | | 51,357 |
| Schwab S&P 500 Index Fund | 100,633 | 107,138 | (14,735) | 193,036 | 7,119,179 | | 16,230 | | 88,356 |
| Schwab Short-Term Bond Index Fund | — | 572,754 | — | 572,754 | 5,733,265 | | — | | 5,309 |
| Schwab Short-Term Bond Market Fund | 618,557 | 19,442 | (637,999) | — | — | | 133,930 | | 33,304 |
| Schwab Small-Cap Equity Fund | 41,665 | 171 | (5,447) | 36,389 | 802,022 | | 42,146 | | 3,737 |
| Schwab Total Bond Market Fund | 1,451,313 | 60,820 | (1,512,133) | — | — | | (69,669) | | 150,141 |
| Schwab Treasury Inflation Protected Securities Index Fund | 336,959 | 7,065 | (10,873) | 333,151 | 3,714,637 | | 4,444 | | 47,309 |
| Schwab U.S. Aggregate Bond Index Fund | — | 1,383,626 | — | 1,383,626 | 13,905,446 | | — | | 12,188 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 2,477,273 | 8,709 | — | 2,485,982 | 2,486,728 | | — | | 9,062 |
| Total | | | | | $46,474,636 | | $1,960,525 | | $605,755 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2015 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 265,900 | 2,325 | (32,362) | 235,863 | $5,556,942 | | ($76,539) | | $47,942 |
| Laudus Mondrian International Government Fixed Income Fund | 76,743 | 545 | — | 77,288 | 734,238 | | — | | 4,873 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 48,557 | 472 | (10,515) | 38,514 | 756,028 | | 43,768 | | 9,001 |
| Laudus U.S. Large Cap Growth Fund | 404,597 | 6,402 | (224,807) | 186,192 | 3,478,072 | | 539,977 | | 106,530 |
| Schwab Core Equity Fund | 377,300 | 5,922 | (122,226) | 260,996 | 5,804,549 | | (268,618) | | 122,708 |
| Schwab Dividend Equity Fund | 235,802 | 940 | (220,709) | 16,033 | 259,249 | | 81,068 | | 14,893 |
| Schwab Global Real Estate Fund | 310,396 | 8,534 | (75,361) | 243,569 | 1,807,284 | | 1,633 | | 59,119 |
| Schwab International Core Equity Fund | 412,225 | 10,360 | (65,305) | 357,280 | 3,687,130 | | (40,223) | | 93,657 |
| Schwab S&P 500 Index Fund | 184,941 | 197,816 | (37,463) | 345,294 | 12,734,431 | | 113,288 | | 157,213 |
| Schwab Short-Term Bond Index Fund | — | 885,449 | — | 885,449 | 8,863,347 | | — | | 9,254 |
| Schwab Short-Term Bond Market Fund | 1,041,828 | 5,166 | (1,046,994) | — | — | | (25,578) | | 52,649 |
| Schwab Small-Cap Equity Fund | 79,817 | 295 | (14,324) | 65,788 | 1,449,971 | | (12,912) | | 6,443 |
| Schwab Total Bond Market Fund | 2,439,734 | 23,000 | (2,462,734) | — | — | | 195,650 | | 240,261 |
| Schwab Treasury Inflation Protected Securities Index Fund | 568,411 | 7,284 | (29,964) | 545,731 | 6,084,906 | | (30,454) | | 78,936 |
| Schwab U.S. Aggregate Bond Index Fund | — | 2,151,311 | — | 2,151,311 | 21,620,672 | | — | | 19,681 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 4,205,616 | 14,784 | — | 4,220,400 | 4,221,666 | | — | | 15,384 |
| Total | | | | | $77,058,485 | | $521,060 | | $1,038,544 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2020 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 1,886,513 | 16,496 | (156,914) | 1,746,095 | $41,137,992 | | ($376,517) | | $340,138 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 147,572 | 132,392 | (89,539) | 190,425 | 1,491,028 | | (159,381) | | 49,995 |
| Laudus Mondrian International Government Fixed Income Fund | 599,739 | 117,983 | — | 717,722 | 6,818,358 | | — | | 45,254 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 369,722 | 4,160 | (82,084) | 291,798 | 5,728,006 | | 296,745 | | 79,333 |
| Laudus U.S. Large Cap Growth Fund | 2,627,246 | 42,242 | (1,390,045) | 1,279,443 | 23,900,000 | | 2,374,054 | | 702,909 |
| Schwab Core Equity Fund | 2,454,798 | 38,313 | (485,552) | 2,007,559 | 44,648,121 | | (1,043,027) | | 793,836 |
| Schwab Dividend Equity Fund | 1,514,872 | 6,607 | (1,415,223) | 106,256 | 1,718,157 | | 376,631 | | 104,697 |
| Schwab Global Real Estate Fund | 1,997,312 | 59,890 | (257,284) | 1,799,918 | 13,355,391 | | (107,618) | | 415,178 |
| Schwab Intermediate-Term Bond Fund | 394,902 | 6,804 | — | 401,706 | 4,045,179 | | — | | 67,576 |
| Schwab International Core Equity Fund | 2,933,654 | 73,730 | (421,005) | 2,586,379 | 26,691,434 | | (212,734) | | 666,526 |
| Schwab S&P 500 Index Fund | 1,186,329 | 1,244,739 | (236,825) | 2,194,243 | 80,923,688 | | 104,828 | | 1,041,597 |
| Schwab Short-Term Bond Index Fund | — | 3,539,165 | — | 3,539,165 | 35,427,041 | | — | | 46,176 |
| Schwab Short-Term Bond Market Fund | 3,448,197 | 396,574 | (3,844,771) | — | — | | (107,957) | | 181,122 |
| Schwab Small-Cap Equity Fund | 570,876 | 2,100 | (69,065) | 503,911 | 11,106,192 | | (194,086) | | 45,923 |
| Schwab Total Bond Market Fund | 10,005,022 | 210,756 | (10,215,778) | — | — | | 911,436 | | 1,007,300 |
| Schwab Treasury Inflation Protected Securities Index Fund | 1,320,382 | 361,348 | — | 1,681,730 | 18,751,293 | | — | | 197,632 |
| Schwab U.S. Aggregate Bond Index Fund | — | 10,081,367 | — | 10,081,367 | 101,317,739 | | — | | 110,366 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 11,036,379 | 38,797 | — | 11,075,176 | 11,078,499 | | — | | 40,371 |
| Total | | | | | $428,138,118 | | $1,862,374 | | $5,935,929 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2025 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 1,937,469 | 45,721 | (98,961) | 1,884,229 | $44,392,438 | | ($229,190) | | $354,470 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 478,075 | 101,711 | (81,590) | 498,196 | 3,900,878 | | (199,436) | | 103,536 |
| Laudus Mondrian International Government Fixed Income Fund | 513,430 | 114,089 | — | 627,519 | 5,961,428 | | — | | 39,566 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 391,494 | 4,857 | (46,895) | 349,456 | 6,859,828 | | 36,718 | | 92,627 |
| Laudus U.S. Large Cap Growth Fund | 2,588,103 | 42,181 | (1,195,528) | 1,434,756 | 26,801,241 | | (257,382) | | 701,894 |
| Schwab Core Equity Fund | 2,433,088 | 38,300 | (211,339) | 2,260,049 | 50,263,481 | | (731,687) | | 793,567 |
| Schwab Dividend Equity Fund | 1,497,790 | 7,084 | (1,283,175) | 221,699 | 3,584,880 | | (488,041) | | 112,369 |
| Schwab Global Real Estate Fund | 1,979,164 | 61,827 | (55,119) | 1,985,872 | 14,735,169 | | (14,083) | | 429,043 |
| Schwab Intermediate-Term Bond Fund | 529,461 | 9,123 | — | 538,584 | 5,423,538 | | — | | 90,602 |
| Schwab International Core Equity Fund | 2,967,167 | 74,573 | (212,268) | 2,829,472 | 29,200,151 | | (103,720) | | 674,140 |
| Schwab S&P 500 Index Fund | 1,185,018 | 1,071,887 | (117,459) | 2,139,446 | 78,902,779 | | 104,097 | | 1,029,791 |
| Schwab Short-Term Bond Index Fund | — | 1,811,074 | — | 1,811,074 | 18,128,852 | | — | | 35,894 |
| Schwab Short-Term Bond Market Fund | 1,719,256 | 232,630 | (1,951,886) | — | — | | (66,107) | | 80,221 |
| Schwab Small-Cap Equity Fund | 645,885 | 2,494 | (74,994) | 573,385 | 12,637,395 | | (278,207) | | 54,536 |
| Schwab Total Bond Market Fund | 6,258,996 | 209,615 | (6,468,611) | — | — | | 294,048 | | 632,594 |
| Schwab Treasury Inflation Protected Securities Index Fund | 320,824 | 129,592 | — | 450,416 | 5,022,137 | | — | | 47,382 |
| Schwab U.S. Aggregate Bond Index Fund | — | 6,451,975 | — | 6,451,975 | 64,842,350 | | — | | 84,152 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 6,016,155 | 21,150 | — | 6,037,305 | 6,039,116 | | — | | 22,007 |
| Total | | | | | $376,695,661 | | ($1,932,990) | | $5,378,391 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2030 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 4,071,975 | 100,968 | (118,486) | 4,054,457 | $95,523,006 | | ($290,943) | | $745,860 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 1,471,129 | 241,865 | (170,293) | 1,542,701 | 12,079,351 | | (416,725) | | 305,901 |
| Laudus Mondrian International Government Fixed Income Fund | 819,346 | 261,536 | — | 1,080,882 | 10,268,377 | | — | | 63,818 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 911,800 | 10,743 | (73,044) | 849,499 | 16,675,671 | | 58,645 | | 204,879 |
| Laudus U.S. Large Cap Growth Fund | 5,350,156 | 87,197 | (2,125,868) | 3,311,485 | 61,858,543 | | 1,954,497 | | 1,450,963 |
| Schwab Core Equity Fund | 4,983,750 | 78,698 | (356,931) | 4,705,517 | 104,650,704 | | (959,761) | | 1,630,626 |
| Schwab Dividend Equity Fund | 3,059,015 | 15,542 | (2,292,721) | 781,836 | 12,642,291 | | 309,371 | | 246,801 |
| Schwab Global Real Estate Fund | 4,195,068 | 130,453 | (374,976) | 3,950,545 | 29,313,043 | | (195,579) | | 905,065 |
| Schwab Intermediate-Term Bond Fund | 1,084,084 | 18,679 | — | 1,102,763 | 11,104,820 | | — | | 185,510 |
| Schwab International Core Equity Fund | 6,163,321 | 238,539 | (280,761) | 6,121,099 | 63,169,740 | | (174,072) | | 1,418,843 |
| Schwab S&P 500 Index Fund | 2,434,925 | 1,952,027 | (177,660) | 4,209,292 | 155,238,688 | | 207,996 | | 2,108,944 |
| Schwab Short-Term Bond Index Fund | — | 1,996,782 | — | 1,996,782 | 19,987,783 | | — | | 42,832 |
| Schwab Short-Term Bond Market Fund | 1,808,325 | 343,360 | (2,151,685) | — | — | | (64,783) | | 84,223 |
| Schwab Small-Cap Equity Fund | 1,496,022 | 5,638 | (164,401) | 1,337,259 | 29,473,179 | | (318,136) | | 123,293 |
| Schwab Total Bond Market Fund | 8,413,016 | 397,933 | (8,810,949) | — | — | | 798,447 | | 835,400 |
| Schwab U.S. Aggregate Bond Index Fund | — | 9,252,038 | — | 9,252,038 | 92,982,981 | | — | | 143,826 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 6,016,155 | 21,150 | — | 6,037,305 | 6,039,116 | | — | | 22,007 |
| Total | | | | | $721,007,293 | | $908,957 | | $10,518,791 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2035 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 1,972,928 | 80,663 | (38,827) | 2,014,764 | $47,467,842 | | ($101,358) | | $367,053 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 916,890 | 136,680 | (77,825) | 975,745 | 7,640,085 | | (199,378) | | 188,143 |
| Laudus Mondrian International Government Fixed Income Fund | 267,860 | 141,523 | — | 409,383 | 3,889,136 | | — | | 23,704 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 481,347 | 5,657 | (39,161) | 447,843 | 8,791,165 | | (9,258) | | 107,886 |
| Laudus U.S. Large Cap Growth Fund | 2,555,620 | 41,652 | (875,399) | 1,721,873 | 32,164,588 | | (484,379) | | 693,084 |
| Schwab Core Equity Fund | 2,370,394 | 37,878 | (123,986) | 2,284,286 | 50,802,522 | | (421,476) | | 784,836 |
| Schwab Dividend Equity Fund | 1,463,222 | 7,878 | (962,467) | 508,633 | 8,224,597 | | (963,267) | | 125,219 |
| Schwab Global Real Estate Fund | 2,007,148 | 62,916 | (71,034) | 1,999,030 | 14,832,806 | | (7,904) | | 436,674 |
| Schwab Intermediate-Term Bond Fund | 445,033 | 7,668 | — | 452,701 | 4,558,699 | | — | | 76,155 |
| Schwab International Core Equity Fund | 3,013,564 | 137,902 | (108,245) | 3,043,221 | 31,406,044 | | (68,466) | | 698,459 |
| Schwab S&P 500 Index Fund | 1,160,179 | 804,321 | (37,813) | 1,926,687 | 71,056,201 | | 24,342 | | 1,013,056 |
| Schwab Short-Term Bond Index Fund | — | 499,284 | — | 499,284 | 4,997,828 | | — | | 6,813 |
| Schwab Short-Term Bond Market Fund | 436,073 | 102,410 | (538,483) | — | — | | (5,648) | | 24,384 |
| Schwab Small-Cap Equity Fund | 772,287 | 2,979 | (60,238) | 715,028 | 15,759,206 | | (216,830) | | 65,160 |
| Schwab Total Bond Market Fund | 2,584,207 | 204,597 | (2,788,804) | — | — | | 53,520 | | 249,542 |
| Schwab U.S. Aggregate Bond Index Fund | — | 2,909,551 | — | 2,909,551 | 29,240,991 | | — | | 57,721 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 1,504,039 | 5,287 | — | 1,509,326 | 1,509,779 | | — | | 5,502 |
| Total | | | | | $332,341,489 | | ($2,400,102) | | $4,923,391 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2040 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 5,015,124 | 193,602 | (160,384) | 5,048,342 | $118,938,943 | | ($383,411) | | $930,993 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 2,844,569 | 351,198 | (205,300) | 2,990,467 | 23,415,359 | | (510,263) | | 570,689 |
| Laudus Mondrian International Government Fixed Income Fund | 371,078 | 166,623 | — | 537,701 | 5,108,160 | | — | | 28,734 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 1,311,540 | 15,462 | (110,266) | 1,216,736 | 23,884,530 | | 52,980 | | 294,861 |
| Laudus U.S. Large Cap Growth Fund | 6,340,489 | 103,338 | (1,926,701) | 4,517,126 | 84,379,905 | | 683,337 | | 1,719,541 |
| Schwab Core Equity Fund | 5,897,454 | 93,818 | (351,440) | 5,639,832 | 125,429,867 | | (925,281) | | 1,943,912 |
| Schwab Dividend Equity Fund | 3,605,589 | 20,379 | (2,078,080) | 1,547,888 | 25,029,347 | | (1,340,879) | | 324,135 |
| Schwab Global Real Estate Fund | 5,214,413 | 162,298 | (224,912) | 5,151,799 | 38,226,348 | | (115,562) | | 1,126,046 |
| Schwab Intermediate-Term Bond Fund | 895,999 | 15,438 | — | 911,437 | 9,178,169 | | — | | 153,325 |
| Schwab International Core Equity Fund | 7,577,005 | 419,871 | (304,334) | 7,692,542 | 79,387,032 | | (188,687) | | 1,772,346 |
| Schwab S&P 500 Index Fund | 2,877,175 | 1,670,287 | (65,911) | 4,481,551 | 165,279,605 | | 111,906 | | 2,505,104 |
| Schwab Short-Term Bond Index Fund | — | 521,153 | — | 521,153 | 5,216,746 | | — | | 10,323 |
| Schwab Short-Term Bond Market Fund | 398,188 | 163,538 | (561,726) | — | — | | (13,798) | | 21,506 |
| Schwab Small-Cap Equity Fund | 2,164,424 | 8,170 | (228,742) | 1,943,852 | 42,842,494 | | (637,124) | | 178,677 |
| Schwab Total Bond Market Fund | 3,699,235 | 130,957 | (3,830,192) | — | — | | 20,360 | | 347,806 |
| Schwab U.S. Aggregate Bond Index Fund | — | 4,132,017 | — | 4,132,017 | 41,526,766 | | — | | 83,693 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 1,002,693 | 3,524 | — | 1,006,217 | 1,006,520 | | — | | 3,668 |
| Total | | | | | $788,849,791 | | ($3,246,422) | | $12,015,359 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2045 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 508,866 | 70,420 | — | 579,286 | $13,647,974 | | $— | | $97,778 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 326,696 | 54,276 | — | 380,972 | 2,983,016 | | — | | 65,620 |
| Laudus Mondrian International Government Fixed Income Fund | 27,675 | 23,794 | — | 51,469 | 488,959 | | — | | 2,544 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 138,358 | 7,994 | — | 146,352 | 2,872,885 | | — | | 34,202 |
| Laudus U.S. Large Cap Growth Fund | 629,495 | 35,401 | (135,500) | 529,396 | 9,889,117 | | (221,066) | | 172,874 |
| Schwab Core Equity Fund | 594,275 | 66,063 | — | 660,338 | 14,685,924 | | — | | 201,935 |
| Schwab Dividend Equity Fund | 363,102 | 11,591 | (178,208) | 196,485 | 3,177,157 | | (344,298) | | 35,558 |
| Schwab Global Real Estate Fund | 510,061 | 55,261 | — | 565,322 | 4,194,687 | | — | | 115,765 |
| Schwab Intermediate-Term Bond Fund | 72,332 | 14,160 | — | 86,492 | 870,974 | | — | | 12,419 |
| Schwab International Core Equity Fund | 791,812 | 92,813 | — | 884,625 | 9,129,329 | | — | | 182,167 |
| Schwab S&P 500 Index Fund | 286,728 | 217,161 | — | 503,889 | 18,583,427 | | — | | 260,855 |
| Schwab Short-Term Bond Index Fund | — | 18,392 | — | 18,392 | 184,105 | | — | | 189 |
| Schwab Short-Term Bond Market Fund | 19,815 | 102 | (19,917) | — | — | | 219 | | 1,048 |
| Schwab Small-Cap Equity Fund | 230,129 | 29,909 | (13,712) | 246,326 | 5,429,040 | | (25,831) | | 20,833 |
| Schwab Total Bond Market Fund | 239,299 | 36,676 | (275,975) | — | — | | (20,780) | | 23,350 |
| Schwab U.S. Aggregate Bond Index Fund | — | 312,221 | — | 312,221 | 3,137,821 | | — | | 7,417 |
| Total | | | | | $89,274,415 | | ($611,756) | | $1,234,554 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2050 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 437,758 | 56,391 | — | 494,149 | $11,642,147 | | $— | | $81,487 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 291,463 | 55,723 | — | 347,186 | 2,718,466 | | — | | 58,901 |
| Laudus Mondrian International Government Fixed Income Fund | 10,611 | 31,363 | — | 41,974 | 398,756 | | — | | 1,945 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 132,033 | 6,702 | (11,603) | 127,132 | 2,495,607 | | 3,548 | | 28,494 |
| Laudus U.S. Large Cap Growth Fund | 533,054 | 41,486 | (113,500) | 461,040 | 8,612,222 | | (178,437) | | 148,292 |
| Schwab Core Equity Fund | 502,864 | 52,014 | (9,986) | 544,892 | 12,118,402 | | (46,618) | | 167,480 |
| Schwab Dividend Equity Fund | 307,158 | 22,158 | (140,972) | 188,344 | 3,045,522 | | (270,741) | | 29,853 |
| Schwab Global Real Estate Fund | 432,848 | 63,735 | — | 496,583 | 3,684,645 | | — | | 102,246 |
| Schwab Intermediate-Term Bond Fund | 46,123 | 795 | — | 46,918 | 472,460 | | — | | 7,893 |
| Schwab International Core Equity Fund | 674,116 | 68,555 | — | 742,671 | 7,664,361 | | — | | 154,286 |
| Schwab S&P 500 Index Fund | 243,202 | 169,617 | — | 412,819 | 15,224,761 | | — | | 215,561 |
| Schwab Short-Term Bond Index Fund | — | 7,201 | — | 7,201 | 72,080 | | — | | 96 |
| Schwab Short-Term Bond Market Fund | 7,787 | 39 | (7,826) | — | — | | (123) | | 391 |
| Schwab Small-Cap Equity Fund | 204,300 | 27,099 | (11,371) | 220,028 | 4,849,409 | | (36,142) | | 17,306 |
| Schwab Total Bond Market Fund | 142,131 | 4,034 | (146,165) | — | — | | (14,463) | | 12,641 |
| Schwab U.S. Aggregate Bond Index Fund | — | 173,187 | — | 173,187 | 1,740,530 | | — | | 4,539 |
| Total | | | | | $74,739,368 | | ($542,976) | | $1,031,411 |
Schwab Target 2055 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 253,229 | 34,212 | — | 287,441 | $6,772,110 | | $— | | $47,701 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 181,271 | 41,573 | — | 222,844 | 1,744,871 | | — | | 36,225 |
| Laudus Mondrian International Government Fixed Income Fund | 5,883 | 6,821 | — | 12,704 | 120,691 | | — | | 801 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 74,976 | 7,371 | (3,400) | 78,947 | 1,549,739 | | (262) | | 17,221 |
| Laudus U.S. Large Cap Growth Fund | 304,056 | 26,316 | (58,399) | 271,973 | 5,080,456 | | (94,595) | | 85,055 |
| Schwab Core Equity Fund | 285,238 | 31,863 | (1,419) | 315,682 | 7,020,771 | | (7,984) | | 96,442 |
| Schwab Dividend Equity Fund | 176,609 | 7,300 | (75,180) | 108,729 | 1,758,142 | | (151,617) | | 17,334 |
| Schwab Global Real Estate Fund | 255,184 | 35,877 | — | 291,061 | 2,159,671 | | — | | 57,811 |
| Schwab Intermediate-Term Bond Fund | 16,060 | 1,490 | — | 17,550 | 176,724 | | — | | 2,828 |
| Schwab International Core Equity Fund | 389,951 | 50,960 | — | 440,911 | 4,550,206 | | — | | 91,113 |
| Schwab S&P 500 Index Fund | 139,575 | 96,418 | — | 235,993 | 8,703,425 | | — | | 123,989 |
| Schwab Short-Term Bond Index Fund | — | 702 | — | 702 | 7,023 | | — | | 18 |
| Schwab Short-Term Bond Market Fund | 753 | 3 | (756) | — | — | | (66) | | 30 |
| Schwab Small-Cap Equity Fund | 123,887 | 13,055 | (7,120) | 129,822 | 2,861,288 | | (23,467) | | 10,474 |
| Schwab Total Bond Market Fund | 46,142 | 3,661 | (49,803) | — | — | | (3,781) | | 4,298 |
| Schwab U.S. Aggregate Bond Index Fund | — | 60,792 | — | 60,792 | 610,962 | | — | | 1,437 |
| Total | | | | | $43,116,079 | | ($281,772) | | $592,777 |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2060 Fund:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus International MarketMasters Fund, Select Shares | 4,200 | 12,559 | — | 16,759 | $394,832 | | $— | | $1,308 |
| Laudus Mondrian Emerging Markets Fund, Institutional Shares | 2,913 | 10,550 | — | 13,463 | 105,416 | | — | | 1,004 |
| Laudus Mondrian International Government Fixed Income Fund | 96 | 278 | — | 374 | 3,557 | | — | | 6 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 1,289 | 3,558 | — | 4,847 | 95,147 | | — | | 433 |
| Laudus U.S. Large Cap Growth Fund | 4,896 | 10,854 | — | 15,750 | 294,216 | | — | | 2,191 |
| Schwab Core Equity Fund | 4,674 | 14,427 | — | 19,101 | 424,804 | | — | | 2,476 |
| Schwab Dividend Equity Fund | 2,545 | 3,936 | — | 6,481 | 104,793 | | — | | 548 |
| Schwab Global Real Estate Fund | 4,006 | 12,137 | — | 16,143 | 119,778 | | — | | 1,924 |
| Schwab Intermediate-Term Bond Fund | 97 | 465 | — | 562 | 5,655 | | — | | 66 |
| Schwab International Core Equity Fund | 6,116 | 19,896 | — | 26,012 | 268,446 | | — | | 2,373 |
| Schwab S&P 500 Index Fund | 2,327 | 11,159 | — | 13,486 | 497,376 | | — | | 4,455 |
| Schwab Small-Cap Equity Fund | 2,023 | 5,905 | — | 7,928 | 174,733 | | — | | 266 |
| Schwab Total Bond Market Fund | 1,129 | 222 | (1,351) | — | — | | (413) | | 91 |
| Schwab U.S. Aggregate Bond Index Fund | — | 2,809 | — | 2,809 | 28,231 | | — | | 82 |
| Total | | | | | $2,516,984 | | ($413) | | $17,223 |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
Shareholder Concentration
Certain accounts or CSIM affiliates may from time to time own (beneficially or of record) or control a significant percentage of a fund’s shares. As of April 30, 2017, a CSIM affiliate of the Schwab Target 2060 Fund owned 16% of the fund's outstanding shares. The CSIM affiliated ownership percentage is related to seed capital invested on the first day of operations to assist the fund in meeting its investment objectives. Over time, this ownership percentage is expected to decrease.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trusts were in compliance with these limitations throughout the report period. The trusts did not pay any of these interested persons for their services as trustees, but they did pay non-interested persons (independent trustees), as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
The funds were participants with other U.S. registered investment companies managed by CSIM in a joint, syndicated, committed $555 million line of credit (the Credit Facility). Under the terms of the Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund paid a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the Credit Facility.There were no borrowings from the line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended April 30, 2017, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
| | Purchases
of Securities | Sales/Maturities
of Securities |
| Schwab Target 2010 Fund | $26,088,367 | $28,419,138 |
| Schwab Target 2015 Fund | 40,122,941 | 49,649,999 |
| Schwab Target 2020 Fund | 209,658,434 | 221,736,477 |
| Schwab Target 2025 Fund | 144,976,094 | 142,473,790 |
| Schwab Target 2030 Fund | 226,407,694 | 215,440,406 |
| Schwab Target 2035 Fund | 81,482,172 | 74,770,777 |
| Schwab Target 2040 Fund | 144,352,893 | 143,733,103 |
| Schwab Target 2045 Fund | 19,934,284 | 8,301,991 |
| Schwab Target 2050 Fund | 15,012,506 | 6,455,200 |
| Schwab Target 2055 Fund | 8,269,307 | 2,906,701 |
| Schwab Target 2060 Fund | 2,011,599 | 37,722 |
The purchases and sales of securities include transactions where certain funds redeemed in kind their positions in the Schwab Total Bond Market Fund and the Schwab Short-Term Bond Market Fund, and made purchases in kind into the Schwab U.S. Aggregate Bond Index Fund and Schwab Short-Term Bond Index Fund. In the transaction, each of the Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 and Schwab Target 2040 Fund effected an in-kind redemption from the Schwab Total Bond Market Fund and simultaneously engaged in an in-kind purchase, using the securities and cash received, with Schwab U.S. Aggregate Bond Index Fund. Also, in the transaction, the Schwab Target 2020 Fund effected an in-kind redemption from the Schwab Short-Term Bond Market Fund and simultaneously engaged in an in-kind purchase, using the securities and cash received, with Schwab Short-Term Bond Index Fund. All in-kind redemptions and purchases were effected pursuant to the funds’ In-Kind Transactions Policy and Procedures adopted by the Board of Trustees. The funds realized gains (losses) in selling the Schwab Total Bond Market Fund and the Schwab Short-Term Bond Market Fund and those amounts are disclosed in the Affiliates and Affiliated Transactions in financial note 4.
8. Redemption Fee:
Prior to February 28, 2017, the funds charged a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds on the Statement of Changes in Net Assets. Effective February 28, 2017, the funds no longer charge redemption fees. The redemption fees charged during the current and prior periods were as follows:
| | Current Period
(11/1/16-4/30/17) | Prior Period
(11/1/15-10/31/16) |
| Schwab Target 2010 Fund | $998 | $1,591 |
| Schwab Target 2015 Fund | 107 | 2,546 |
| Schwab Target 2020 Fund | 3,521 | 5,615 |
| Schwab Target 2025 Fund | 858 | 5,667 |
| Schwab Target 2030 Fund | 3,488 | 7,742 |
| Schwab Target 2035 Fund | 557 | 3,566 |
| Schwab Target 2040 Fund | 3,012 | 6,637 |
| Schwab Target 2045 Fund | 3,277 | 1,974 |
| Schwab Target 2050 Fund | 758 | 1,498 |
| Schwab Target 2055 Fund | 324 | 1,252 |
| Schwab Target 2060 Fund* | 105 | — |
| * | Since commencement of operations 8/25/16. |
Schwab Target Funds | Semiannual Report
Financial Notes, unaudited (continued)
9. Federal Income Taxes:
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2016, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:
| Expiration Date | 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 |
| October 31, 2017 | $7,386,896 | | $— | | $— | | $— | | $— | | $— | | $— |
| Total | $7,386,896 | | $— | | $— | | $— | | $— | | $— | | $— |
| Expiration Date | Schwab
Target
2045
Fund | | Schwab
Target
2050
Fund | | Schwab
Target
2055
Fund | | Schwab
Target
2060
Fund |
| October 31, 2017 | $— | | $— | | $— | | $— |
| Total | $— | | $— | | $— | | $— |
As of October 31, 2016, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2016, the funds did not incur any interest or penalties.
10. Recent Regulatory Development:
In October 2016, the SEC adopted new rules and amended existing rules (together, final rules) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the funds' financial statements and related disclosures.
11. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
Schwab Target Funds | Semiannual Report
Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 110 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| 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. | 110 | 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 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). | 110 | 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 – Apr. 2012). | 110 | None |
David L. Mahoney
1954
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 110 | Director, Symantec Corporation (2003 – present)
Director, Corcept Therapeutics Incorporated (2004 – present)
Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Schwab Target Funds | Semiannual Report
| 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 |
Kiran M. Patel
1948
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus 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). | 110 | Director, KLA-Tencor Corporation (2008 – present) |
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). | 110 | 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 and Laudus 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). | 110 | 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 since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 110 | 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 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). | 110 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present)
Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Schwab Target Funds | Semiannual Report
| 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 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); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 110 | Director, The Charles Schwab Corporation (2008 – present) |
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) (Mar. 2007 – Aug. 2010). | 110 | 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 (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 110 | 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 A. 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 and Laudus 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) (Mar. 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 and Laudus 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). |
Schwab Target Funds | Semiannual Report
| 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 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 (Apr. 2005 – present). |
Omar Aguilar
1970
Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies
(Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 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 – Apr. 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 and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 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 (Apr. 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 and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 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 (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 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 and Laudus 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. |
Schwab Target Funds | Semiannual Report
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.
Bloomberg Barclays U.S. Aggregate Bond Index An index that represents securities that are SEC registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. The index excludes certain types of securities, including state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds.
Bloomberg Barclays U.S. Government/Credit 1 – 5 Year Index An index that includes investment-grade government and corporate bonds that are denominated in U.S. dollars and have maturities of 1-5 years. Bonds are represented in the index in proportion to their market value.
Bloomberg Barclays U.S. Intermediate Aggregate Bond Index An index that represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $250 million or more of outstanding face value. It excludes zero-coupon STRIPS.
Bloomberg Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L) An index that tracks inflation-protected securities issued by the U.S. Treasury that have at least one year remaining to maturity, are rated investment grade, and have $250 million or more of outstanding face value.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Citigroup Non-U.S. Dollar World Government Bond Index A market capitalization index that measures the total rate of return performance for the government bonds of 22 countries, excluding the U.S., with a remaining maturity of at least 1 year.
Dow Jones U.S. Total Stock Market Index An index that measures the performance of all publicly traded stocks of companies headquartered in the U.S. for which pricing data is readily available - currently more than 3,800 stocks. The index is a float adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
FTSE EPRA/NAREIT Global Index (Net) An index that provides a diverse representation of publicly traded equity real estate investment trusts (REITs) and listed property companies worldwide. The index constituents are free-float adjusted, and screened on liquidity, size and revenue. The index is comprised of countries in developed and emerging markets. The Net of Tax Index is calculated based on the maximum withholding tax rates applicable to dividends received by institutional investors who are not resident in the same country as the remitting company and who do not benefit from double taxation treaties.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
stock A share of ownership, or equity, in the issuing company.
Target 2010 Composite Index A custom blended index developed by CSIM based on the 2010 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a
Schwab Target Funds | Semiannual Report
combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion allocations: 24.5% S&P 500 Index, 2.1% Russell 2000 Index, 8.6% MSCI EAFE Index (Net), 37.9% Bloomberg Barclays U.S. Aggregate Bond Index, 1.9% FTSE EPRA/NAREIT Global Index (Net), 6.3% Bloomberg Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L), 1.2% Citigroup Non-U.S. Dollar World Government Bond Index, 1.2% Bloomberg Barclays U.S. Government/Credit Index, 9.7% Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, and 6.7% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2015 Composite Index A custom blended index developed by CSIM based on the 2015 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion allocations: 26.0% S&P 500 Index, 2.3% Russell 2000 Index, 9.1% MSCI EAFE Index (Net), 36.4% Bloomberg Barclays U.S. Aggregate Bond Index, 2.0% FTSE EPRA/NAREIT Global Index (Net), 6.1% Bloomberg Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L), 1.3% Citigroup Non-U.S. Dollar World Government Bond Index, 1.3% Bloomberg Barclays U.S. Government/Credit Index, 9.2% Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, and 6.3% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2020 Composite Index A custom blended index developed by CSIM based on the 2020 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion allocations: 31.6% S&P 500 Index, 3.0% Russell 2000 Index, 11.9% MSCI EAFE Index (Net), 31.2% Bloomberg Barclays U.S. Aggregate Bond Index, 2.5% FTSE EPRA/NAREIT Global Index (Net), 0.6% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 0.3% MSCI Emerging Markets Index (Net), 3.5% Bloomberg Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L), 1.7% Citigroup Non-U.S. Dollar World Government Bond Index, 2.2% Bloomberg Barclays U.S. Government/Credit Index, 6.6% Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, and 5.0% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2025 Composite Index A custom blended index developed by CSIM based on the 2025 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion allocations: 38.3% S&P 500 Index, 4.1% Russell 2000 Index, 14.9% MSCI EAFE Index (Net), 24.2% Bloomberg Barclays U.S. Aggregate Bond Index, 3.1% FTSE EPRA/NAREIT Global Index (Net), 1.2% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 0.8% MSCI Emerging Markets Index (Net), 1.1% Bloomberg Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L), 1.8% Citigroup Non-U.S. Dollar World Government Bond Index, 3.0% Bloomberg Barclays U.S. Government/Credit Index, 4.0% Bloomberg
Barclays U.S. Government/Credit 1-5 Year Index, and 3.7% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2030 Composite Index A custom blended index developed by CSIM based on the 2030 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion allocations: 43.0% S&P 500 Index, 5.1% Russell 2000 Index, 17.1% MSCI EAFE Index (Net), 18.4% Bloomberg Barclays U.S. Aggregate Bond Index, 3.5% FTSE EPRA/NAREIT Global Index (Net), 1.3% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 1.3% MSCI Emerging Markets Index (Net), 1.7% Citigroup Non-U.S. Dollar World Government Bond Index, 3.3% Bloomberg Barclays U.S. Government/Credit Index, 2.4% Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, and 2.9% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2035 Composite Index A custom blended index developed by CSIM based on the 2035 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion allocations: 46.6% S&P 500 Index, 6.1% Russell 2000 Index, 19.0% MSCI EAFE Index (Net), 13.0% Bloomberg Barclays U.S. Aggregate Bond Index, 3.9% FTSE EPRA/NAREIT Global Index (Net), 1.3% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 1.9% MSCI Emerging Markets Index (Net), 1.4% Citigroup Non-U.S. Dollar World Government Bond Index, 3.1% Bloomberg Barclays U.S. Government/Credit Index, 1.3% Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, and 2.5% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2040 Composite Index A custom blended index developed by CSIM based on the 2040 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion allocations: 49.7% S&P 500 Index, 7.2% Russell 2000 Index, 20.7% MSCI EAFE Index (Net), 8.3% Bloomberg Barclays U.S. Aggregate Bond Index, 4.2% FTSE EPRA/NAREIT Global Index (Net), 1.1% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 2.5% MSCI Emerging Markets Index (Net), 1.1% Citigroup Non-U.S. Dollar World Government Bond Index, 2.5% Bloomberg Barclays U.S. Government/Credit Index, 0.6% Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, and 2.2% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2045 Composite Index A custom blended index developed by CSIM based on the 2045 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion
Schwab Target Funds | Semiannual Report
allocations: 51.6% S&P 500 Index, 8.1% Russell 2000 Index, 21.8% MSCI EAFE Index (Net), 5.3% Bloomberg Barclays U.S. Aggregate Bond Index, 4.4% FTSE EPRA/NAREIT Global Index (Net), 0.9% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 2.9% MSCI Emerging Markets Index (Net), 0.8% Citigroup Non-U.S. Dollar World Government Bond Index, 1.9% Bloomberg Barclays U.S. Government/Credit Index, 0.2% Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, and 2.1% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2050 Composite Index A custom blended index developed by CSIM based on the 2050 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion allocations: 52.6% S&P 500 Index, 8.6% Russell 2000 Index, 22.5% MSCI EAFE Index (Net), 3.7% Bloomberg Barclays U.S. Aggregate Bond Index, 4.6% FTSE EPRA/NAREIT Global Index (Net), 0.7% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 3.2% MSCI Emerging Markets Index (Net), 0.6% Citigroup Non-U.S. Dollar World Government Bond Index, 1.4% Bloomberg Barclays U.S. Government/Credit Index, 0.1% Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, and 2.0% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2055 Composite Index A custom blended index developed by CSIM based on the 2055 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective March 1, 2014, the Dow Jones U.S. Total Stock Market Index was replaced by a combination of the S&P 500 Index and the Russell 2000 Index. Effective February 1, 2017, the composite is derived using the following portion
allocations: 53.5% S&P 500 Index, 9.2% Russell 2000 Index, 23.1% MSCI EAFE Index (Net), 2.2% Bloomberg Barclays U.S. Aggregate Bond Index, 4.7% FTSE EPRA/NAREIT Global Index (Net), 0.5% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 3.5% MSCI Emerging Markets Index (Net), 0.4% Citigroup Non-U.S. Dollar World Government Bond Index, 0.9% Bloomberg Barclays U.S. Government/Credit Index, and 2.0% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
Target 2060 Composite Index A custom blended index developed by CSIM based on the 2060 fund’s asset allocation glide schedule and will become more conservative as time elapses. Effective February 1, 2017, the composite is derived using the following portion allocations: 53.8% S&P 500 Index, 9.5% Russell 2000 Index, 23.4% MSCI EAFE Index (Net), 4.8% FTSE EPRA/NAREIT Global Index (Net), 3.6% MSCI Emerging Markets Index (Net), 1.7% Bloomberg Barclays U.S. Aggregate Bond Index, 0.7% Bloomberg Barclays U.S. Government/Credit Index, 0.4% Bloomberg Barclays U.S. Intermediate Aggregate Bond Index, 0.3% Citigroup Non-U.S. Dollar World Government Bond Index, 2.0% Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. The components that make up the composite index may vary over time. The composite index represents target allocations for 2017. Percentages listed may not total to 100% due to rounding.
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.
Schwab Target Funds | Semiannual Report
Charles Schwab Investment Management
As one of the nation’s largest asset managers, our goal is to provide investors with a diverse selection of foundational products that aim to deliver consistent performance at a competitive cost. The list below shows all currently available Schwab Funds.
Investors should carefully consider information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-877-824-5615 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Funds’ website at www.csimfunds.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.
Stock Funds
Schwab Core Equity Fund™
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity 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®
Asset Allocation Funds
Schwab Balanced Fund™
Schwab MarketTrack All Equity Portfolio™
Schwab MarketTrack Growth Portfolio™
Schwab MarketTrack Balanced Portfolio™
Schwab MarketTrack Conservative Portfolio™
Schwab Target Funds
Schwab Target Index Funds
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fund™
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™
Schwab® U.S. Aggregate Bond Index Fund
Schwab® Short-Term Bond Index Fund
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Some are 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®.
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
1-877-824-5615
© 2017 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
| 1 | You could lose money by investing in a money market fund. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The money market fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. |
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Semiannual Report | April 30, 2017
Schwab Balanced Fund™
This page is intentionally left blank.
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Schwab Balanced Fund | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
| Total Return for the 6 Months Ended April 30, 2017 |
| Schwab Balanced Fund (Ticker Symbol: SWOBX) | 8.84% |
| Balanced Blended Index | 8.14% |
| Fund Category: Morningstar Allocation—50% to 70% Equity | 7.52% |
| Performance Details | pages 8-9 |
| |
| Minimum Initial Investment1 | $ 100 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
The components that make up the composite index may vary over time. For index definition, please see the Glossary.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
| 1 | Please see the fund’s prospectus for further detail and eligibility requirements. |
Schwab Balanced Fund | Semiannual Report
Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
fund covered in this report.
Dear Shareholder,
At Charles Schwab Investment Management, we believe strategy is just as important as results. The foundational products we provide our investors are designed to deliver steady, reliable, long-term performance while making investing more transparent and less complicated. The Schwab Balanced Fund plays a key role in this respect, as it relies on a straightforward approach for helping our clients achieve their financial goals.
Since our last shareholder report, stock prices have rallied, with the S&P 500® Index rising 13.3% over the six-month period ended April 30, 2017. At this point in the market cycle, many investors may be tempted to make changes to their portfolios to try to get ahead of the next twist or turn. Some may question the longevity of the stock market’s now-eight-year surge, while others are more concerned about bond prices in light of expectations of additional interest rate hikes by the Federal Reserve later this year.
Because it’s never easy to predict which direction asset prices will go over a given period of time, we believe investors can benefit from spreading their investments across a range of diversified holdings. Typically, this means investing in a mix of stocks, bonds, cash and other assets whose prices are not closely correlated.
Asset Class Performance Comparison % returns during the six months ended 4/30/2017
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Schwab Balanced Fund | Semiannual Report
From the President (continued)
“ The Schwab Balanced Fund is just one example of how Charles Schwab Investment Management aims to simplify investing without sacrificing sophistication.”
And sometimes investors want a simplified way to achieve this diversification, which is where the Schwab Balanced Fund comes in. The Schwab Balanced Fund offers a diversified mix of stocks, bonds, and cash all in one convenient package, and the allocations to each asset class are adjusted over time in response to changing market conditions. The fund also invests in a range of underlying funds within asset classes to help spread risk even further and position the fund for more consistent performance.
The Schwab Balanced Fund is just one example of how Charles Schwab Investment Management aims to simplify investing without sacrificing sophistication. And it’s part of our longstanding commitment to our investors: provide you with an array of foundational products that help you achieve your financial goals.
I want to thank you for investing with Charles Schwab Investment Management. For more information about the Schwab Balanced Fund, please continue reading this report. In addition, you can find further details about this fund by visiting our website at www.csimfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
Schwab Balanced Fund | Semiannual Report
The Investment Environment
Over the six-month reporting period ended April 30, 2017, equities both in the U.S. and abroad performed well. Meanwhile, global bond yields generally rose, driving many fixed income returns into negative territory (bond yields and fixed-rate bond prices move in opposite directions). The Federal Reserve (Fed) raised the federal funds rate twice over the reporting period, signaling confidence in the strength of the U.S. economy, while continued accommodative policies outside the U.S. began to show signs of success. Yields on many global government-backed securities rose over the reporting period, though remained relatively low compared to long-term averages. In this environment, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 13.32%, while the MSCI EAFE® Index (Net), a broad measure of developed international equity performance, returned 11.47%. In fixed-income markets, the Bloomberg Barclays U.S. Aggregate Bond Index returned -0.67% for the reporting period, and the Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index returned 0.22%.
The Fed tightened U.S. monetary policy over the reporting period, while many other central banks outside the U.S. maintained accommodative policies. With improvements in several key U.S. economic measures and an uptick in inflation, the Fed raised the federal funds rate in December 2016 and in March 2017. Market responses to these changes were muted as both increases were largely already priced into global equity markets. Meanwhile, the European Central Bank extended its asset purchase program to at least December 2017 and announced it was loosening the restrictions on the types of bonds it can purchase, causing the yield curve to steepen. In Asia, the Bank of Japan (BOJ) maintained negative interest rates, quantitative easing, and yield curve management over the six-month reporting period. The positive performance of many international equities and improvement in the global economic outlook over the reporting period suggested that these policies were achieving their intended results, effectively stimulating economic growth in both the eurozone and in Japan.
Market volatility generally eased over the reporting period, though fluctuations tied to elections in both the U.S. and abroad occurred during the six months. In the U.S., election-related volatility picked up in the weeks leading up to the U.S. presidential election and continued after Election Day. U.S. equity futures dropped sharply soon after the election results were announced, then rebounded almost immediately the following day and generally maintained an upward trajectory throughout most of the reporting period. This rally was fueled by investor expectations for reflationary policies from the Donald Trump administration, including increased fiscal spending, tax reform, and reduced financial regulation. However, lack of progress in certain of the Trump administration’s policies increased uncertainty and contributed to muted stock market gains in the last months of the reporting period. Meanwhile, political uncertainty in the eurozone, including elections in the Netherlands and France, also contributed to overseas market volatility. In mid-March, center-right Dutch Prime Minister Mark Rutte beat far-right candidate Geert Wilders, while the race between front-runners Emmanuel Macron and Marine Le Pen in France was closer than many expected in the first round of voting. (Macron was elected to the French presidency in the run-off election the week following the end of the reporting period.)
Schwab Balanced Fund | Semiannual Report
The Investment Environment (continued)
Overall global economic growth generally improved over the six-month reporting period. Eurozone economic activity picked up in both the fourth quarter of 2016 and the first quarter of 2017, and the entire eurozone bloc exited deflation by the end of January 2017. Meanwhile, the United Kingdom economy performed better than expected in the months following the decision in June to leave the European Union (Brexit) as progress toward an exit plan was made. In Japan, economic growth accelerated and consumer prices fell at a slower pace, with inflation on track to hit the target of 2% in the next two years, while rising inflation and decreasing lending costs in China contributed to a relatively stable economy over the reporting period. Not all countries made economic progress, however. The end of 2016 marked two consecutive years of economic contraction for Brazil and its worst recession on record. Meanwhile, the decreasing likelihood of relaxed economic sanctions by the U.S. weighed on Russia’s economy and contributed to sluggish growth in this country.
As bond yields remained low both overseas and in the U.S. (even with two federal funds rate increases by the Fed), the yields on many government-backed securities also remained low, with some in negative territory during the reporting period. The yield on the 10-year Japanese government bond stayed near 0.00% due to the BOJ’s yield curve management policy tool, while the 10-year German bund yield fluctuated between 0.00% and 0.50% over the six-month reporting period. In the U.S., short-term yields climbed in response to both Fed federal funds rate increases. Meanwhile longer-term yields, which are generally influenced by inflation and growth expectations, rose after the presidential election amid expectations for new policies from the Trump administration supported a positive growth outlook. As the reporting period continued and very little policy progress was made in Washington, the yields on longer-term U.S. Treasuries generally leveled off.
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
Schwab Balanced Fund | Semiannual Report
 | Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, leads the portfolio management team and has overall responsibility for all aspects of the management of the fund. She was appointed portfolio manager of the fund in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Schwab Balanced Fund | Semiannual Report
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Fund and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Fund: Schwab Balanced Fund (11/18/96) | 8.84% | 12.25% | 8.18% | 5.13% |
| Balanced Blended Index | 8.14% | 11.58% | 8.87% | 6.19% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.30% |
| Fund Category: Morningstar Allocation—50% to 70% Equity2 | 7.52% | 10.42% | 7.25% | 4.87% |
| Fund Expense Ratios3: Net 0.62%; Gross 0.68% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
From June 3, 2002 to February 28, 2008, the fund used a manager of managers strategy, and therefore its performance during this time does not reflect the fund’s current multi-fund strategy and may have been different if it did.
| 1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.62%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as the investment adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Balanced Fund | Semiannual Report
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 7 |
| Portfolio Turnover Rate1 | 28% |
Asset Class Weightings % of Investments
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
The Laudus U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
Schwab Balanced Fund | Semiannual Report
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in the 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 November 1, 2016 and held through April 30, 2017.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for the fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, or any non-routine expenses, such as proxy fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs or non-routine expenses were included, your costs would have been higher.
| | Expense Ratio
(Annualized)1 | Beginning
Account Value
at 11/1/16 | Ending
Account Value
(Net of Expenses)
at 4/30/17 | Expenses Paid
During Period
11/1/16-4/30/172 |
| Schwab Balanced Fund | | | | |
| Actual Return | 0.00% | $1,000.00 | $1,088.40 | $0.00 |
| Hypothetical 5% Return | 0.00% | $1,000.00 | $1,024.80 | $0.00 |
| 1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the fund invests are not included in this ratio. |
| 2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by the 365 days of the fiscal year. |
Schwab Balanced Fund | Semiannual Report
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $14.51 | $15.40 | $15.56 | $14.28 | $12.51 | $11.61 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss)1 | 0.14 | 0.19 | 0.18 | 0.16 | 0.14 | 0.19 |
| Net realized and unrealized gains (losses) | 1.08 | 0.00 2 | 0.42 | 1.33 | 1.85 | 0.88 |
| Total from investment operations | 1.22 | 0.19 | 0.60 | 1.49 | 1.99 | 1.07 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.22) | (0.32) | (0.34) | (0.21) | (0.22) | (0.17) |
| Distributions from net realized gains | (0.86) | (0.76) | (0.42) | — | — | — |
| Total distributions | (1.08) | (1.08) | (0.76) | (0.21) | (0.22) | (0.17) |
| Net asset value at end of period | $14.65 | $14.51 | $15.40 | $15.56 | $14.28 | $12.51 |
| Total return | 8.84% 3 | 1.41% | 3.95% | 10.52% | 16.13% | 9.36% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses4 | — 5 | 0.00% 6 | 0.00% 6 | 0.00% 6 | 0.00% 6 | 0.00% 6 |
| Gross operating expenses4 | 0.05% 5 | 0.06% | 0.07% | 0.09% | 0.10% | 0.16% |
| Net investment income (loss) | 2.02% 5 | 1.34% | 1.18% | 1.09% | 1.06% | 1.54% |
| Portfolio turnover rate | 28% 3,7 | 19% | 5% | 27% | 33% | 38% |
| Net assets, end of period (x 1,000,000) | $309 | $282 | $305 | $202 | $165 | $117 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Less than $0.005.
3
Not annualized.
4
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
5
Annualized.
6
Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses and/or interest expense had not been incurred.
7
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 5% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
Schwab Balanced Fund | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.8% | Other Investment Companies | 277,200,600 | 307,863,820 |
| 99.8% | Total Investments | 277,200,600 | 307,863,820 |
| 0.2% | Other Assets and Liabilities, Net | | 740,489 |
| 100.0% | Net Assets | | 308,604,309 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 99.8% of net assets |
| |
| Equity Funds 60.2% |
| Large-Cap 50.3% |
| Laudus U.S. Large Cap Growth Fund *(a) | 2,543,234 | 47,507,607 |
| Schwab Core Equity Fund (a) | 4,833,885 | 107,505,599 |
| | | 155,013,206 |
| Small-Cap 9.9% |
| Laudus Small-Cap MarketMasters Fund, Select Shares (a) | 1,557,865 | 30,580,896 |
| | | 185,594,102 |
| |
| Fixed-Income Funds 36.6% |
| Intermediate-Term Bond 36.6% |
| Schwab Intermediate-Term Bond Fund (a) | 3,559,294 | 35,842,089 |
| Schwab U.S. Aggregate Bond Index Fund (a) | 7,682,885 | 77,212,993 |
| | | 113,055,082 |
| |
| Security | Number
of Shares | Value ($) |
| Money Market Funds 3.0% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 3,002,175 | 3,003,076 |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (b) | 6,211,560 | 6,211,560 |
| | | 9,214,636 |
| Total Other Investment Companies |
| (Cost $277,200,600) | | 307,863,820 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $279,756,016 and the unrealized appreciation and depreciation were $28,873,454 and ($765,650), respectively, with a net unrealized appreciation of $28,107,804.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $307,863,820 | $— | $— | $307,863,820 | |
| Total | $307,863,820 | $— | $— | $307,863,820 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab Balanced Fund | Semiannual Report
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $270,989,040) | | $301,652,260 |
| Investments in unaffiliated issuers, at value (cost $6,211,560) | + | 6,211,560 |
| Total investments, at value (cost $277,200,600) | | 307,863,820 |
| Receivables: | | |
| Fund shares sold | | 869,488 |
| Dividends | | 207,677 |
| Due from investment adviser | | 12,039 |
| Prepaid expenses | + | 16,794 |
| Total assets | | 308,969,818 |
| Liabilities |
| Payables: | | |
| Investments bought | | 104,015 |
| Independent trustees' fees | | 313 |
| Fund shares redeemed | | 220,952 |
| Accrued expenses | + | 40,229 |
| Total liabilities | | 365,509 |
| Net Assets |
| Total assets | | 308,969,818 |
| Total liabilities | – | 365,509 |
| Net assets | | $308,604,309 |
| Net Assets by Source | | |
| Capital received from investors | | 279,409,573 |
| Net investment income not yet distributed | | 576,550 |
| Net realized capital losses | | (2,045,034) |
| Net unrealized capital appreciation | | 30,663,220 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $308,604,309 | | 21,070,080 | | $14.65 |
| | | | | |
Schwab Balanced Fund | Semiannual Report
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $2,941,178 |
| Dividends received from unaffiliated underlying funds | + | 16,665 |
| Total investment income | | 2,957,843 |
| Expenses |
| Registration fees | | 18,720 |
| Shareholder reports | | 18,362 |
| Professional fees | | 14,280 |
| Portfolio accounting fees | | 8,365 |
| Transfer agent fees | | 6,247 |
| Independent trustees' fees | | 4,715 |
| Custodian fees | | 612 |
| Other expenses | + | 2,335 |
| Total expenses | | 73,636 |
| Expense reduction by CSIM | – | 73,636 |
| Net expenses | – | — |
| Net investment income | | 2,957,843 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 1,240,747 |
| Net realized losses on sales of affiliated underlying funds | + | (495,216) |
| Net realized gains | | 745,531 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 21,177,995 |
| Net realized and unrealized gains | | 21,923,526 |
| Increase in net assets resulting from operations | | $24,881,369 |
Schwab Balanced Fund | Semiannual Report
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $2,957,843 | $3,835,878 |
| Net realized gains | | 745,531 | 19,437,795 |
| Net change in unrealized appreciation (depreciation) | + | 21,177,995 | (19,051,501) |
| Increase in net assets from operations | | 24,881,369 | 4,222,172 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (4,244,870) | (6,125,816) |
| Distributions from net realized gains | + | (16,885,712) | (14,319,966) |
| Total distributions | | ($21,130,582) | ($20,445,782) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 2,848,695 | $41,118,406 | 5,997,037 | $86,468,453 |
| Shares reinvested | | 1,382,977 | 19,168,062 | 1,316,822 | 18,725,208 |
| Shares redeemed | + | (2,583,607) | (37,251,412) | (7,731,157) | (112,621,617) |
| Net transactions in fund shares | | 1,648,065 | $23,035,056 | (417,298) | ($7,427,956) |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 19,422,015 | $281,818,466 | 19,839,313 | $305,470,032 |
| Total increase or decrease | + | 1,648,065 | 26,785,843 | (417,298) | (23,651,566) |
| End of period | | 21,070,080 | $308,604,309 | 19,422,015 | $281,818,466 |
| Net investment income not yet distributed | | | $576,550 | | $1,863,577 |
Schwab Balanced Fund | Semiannual Report
Financial Notes, unaudited
1. Business Structure of the Fund:
Schwab Balanced Fund is a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) |
| Schwab Balanced Fund | Schwab Target 2045 Fund |
| Schwab ® S&P 500 Index Fund | Schwab Target 2050 Fund |
| Schwab Small-Cap Index Fund® | Schwab Target 2055 Fund |
| Schwab Total Stock Market Index Fund® | Schwab Target 2060 Fund |
| Schwab International Index Fund® | Schwab Fundamental US Large Company Index Fund |
| Schwab MarketTrack All Equity Portfolio™ | Schwab Fundamental US Small Company Index Fund |
| Schwab MarketTrack Growth Portfolio™ | Schwab Fundamental International Large Company Index Fund |
| Schwab MarketTrack Balanced Portfolio™ | Schwab Fundamental International Small Company Index Fund |
| Schwab MarketTrack Conservative Portfolio™ | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Laudus Small-Cap MarketMasters Fund™ | Schwab Fundamental Global Real Estate Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Target 2010 Index Fund |
| Schwab Core Equity Fund™ | Schwab Target 2015 Index Fund |
| Schwab Dividend Equity Fund™ | Schwab Target 2020 Index Fund |
| Schwab Large-Cap Growth Fund™ | Schwab Target 2025 Index Fund |
| Schwab Small-Cap Equity Fund™ | Schwab Target 2030 Index Fund |
| Schwab Hedged Equity Fund™ | Schwab Target 2035 Index Fund |
| Schwab Health Care Fund™ | Schwab Target 2040 Index Fund |
| Schwab ® International Core Equity Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab® Monthly Income Fund - Moderate Payout |
| Schwab Target 2030 Fund | Schwab® Monthly Income Fund - Enhanced Payout |
| Schwab Target 2035 Fund | Schwab® Monthly Income Fund - Maximum Payout |
| Schwab Target 2040 Fund | |
The Schwab Balanced Fund is a single class “fund of funds” which seeks to achieve its investment objective by investing in a diversified group of other Schwab and/or Laudus Funds, but also may invest in other unaffiliated, third party mutual funds, including exchange-traded funds (ETFs). In addition, the fund may invest a portion of its assets directly in equity and fixed-income securities to maintain its allocations.
The fund offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of the fund. Each share has a par value of 1/1,000 of a cent, and the fund's Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The financial statements of the fund should be read in conjunction with the underlying funds' financial statements. For more information about the underlying funds' operations and policies, please refer to those funds' semiannual and annual reports, which are filed and available on the U.S. Securities and Exchange Commission's (SEC) website at www.sec.gov or at the SEC's Public Reference Room in Washington D.C.
Schwab Balanced Fund | Semiannual Report
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The fund values the securities in its portfolio every business day. The fund uses the following policies to value various types of securities:
• Underlying funds: Mutual funds are valued at their respective NAVs.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value the fund’s securities when market prices are not “readily available” or are unreliable. For example, the fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. The fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that the fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the fund determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.
• Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)—Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations.
• Level 3—significant unobservable inputs (including the fund's own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the fund uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the fund in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the fund in the absence of market information. Assumptions used by the fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the fund's results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Schwab Balanced Fund | Semiannual Report
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
The levels associated with valuing the fund's investments as of April 30, 2017 are disclosed in the Portfolio Holdings.
(b) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the fund records certain foreign security dividends on the day it learns of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(d) Expenses:
Expenses that are specific to the fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets. The fund bears its share of the allocable expenses of the underlying funds in which it invests. Such expenses are reflected in the net asset values of the underlying funds.
(e) Distributions to Shareholders:
The fund makes distributions from net investment income and net realized capital gains, if any, once a year.
(f) Custody Credit:
The fund has an arrangement with its custodian bank, State Street Bank and Trust Company (State Street), under which the fund may receive a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The fund intends to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the fund distributes substantially all of its net investment income and net realized capital gains, if any, to its respective shareholders each year. As long as the fund meets the tax requirements, it is not required to pay federal income tax.
(i) Indemnification:
Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with its vendors and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the fund may involve certain risks, as discussed in the fund's prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The fund is subject to asset allocation risk, which is the risk that the selection of the underlying funds and the allocation of the fund's assets among the various asset classes and market segments will cause the fund to underperform other funds with a similar investment objective.
Schwab Balanced Fund | Semiannual Report
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
Conflicts of Interest Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds may create a conflict of interest because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds. The investment adviser also may have an incentive to select an affiliated underlying fund for other reasons, including to increase assets under management or to support new investment strategies. In addition, other conflicts of interest may exist where the best interests of the affiliated underlying fund may not be aligned with those of the fund or vice versa. However, the investment adviser is a fiduciary to the fund and is legally obligated to act in the fund’s best interests when selecting underlying funds.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in the fund will fluctuate, which means that an investor could lose money over short or long periods.
Direct Investment Risk. The fund may invest a portion of its assets directly in equity and fixed income securities, as well as other mutual funds or ETFs, to maintain its asset allocations. The fund's direct investment in these securities is subject to the same or similar risks as an underlying fund's investment in the same security.
Underlying Fund Investment Risk. The value of an investment in the fund is based primarily on the prices of the underlying funds that the fund purchases. In turn, the price of each underlying fund is based on the value of its securities. The fund is subject to the performance and expenses of the underlying funds in which it invests. Before investing in the fund, investors should assess the risks associated with the underlying funds in which the fund may invest and the types of investments made by those underlying funds. These risks include any combination of the risks described below, although the fund's exposure to a particular risk will be proportionate to the fund's overall asset allocation and underlying fund allocation.
• Investment Risk. The fund may experience losses with respect to its investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective.
• Management Risk. Generally, the underlying funds are actively managed mutual funds. Any actively managed mutual fund is subject to the risk that its investment adviser (or subadviser(s)) will select or allocate assets that could cause the fund to underperform or otherwise not meet its objective. An underlying fund's adviser applies its own investment techniques and risk analyses in making investment decisions for the underlying fund, but there can be no guarantee that they will produce the desired results.
• Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, the equity market tends to move in cycles, which may cause stock prices to fall over short or extended periods of time.
• Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, the underlying fund’s performance could be impacted.
• Growth Investing Risk. An underlying fund’s investments in growth stocks can be volatile. Growth companies usually invest a high portion of earnings in their businesses and may lack the dividends of value stocks that can cushion stock prices in a falling market. The prices of growth stocks are based largely on projections of the issuer’s future earnings and revenues. If a company’s earnings or revenues fall short of expectations, its stock price may fall dramatically. Growth stocks may also be more expensive relative to their earnings or assets compared to value or other stocks.
• Fixed Income Risk. Interest rates rise and fall over time, which will affect an underlying fund's yield and share price. A change in a central bank's monetary policy or improving economic conditions, among other things, may result in an increase in interest rates. A rise in interest rates could cause an underlying fund's share price to fall. The credit quality of a portfolio investment could also cause an underlying fund's share price to fall. An underlying fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations. Fixed income securities may be paid off earlier or later than expected. Either situation could cause an underlying fund to hold securities paying lower-than-market rates of interest, which could hurt the fund's yield or share price. Below investment-grade bonds (junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities.
• ETF Risk. When an underlying fund invests in an ETF, it will bear a proportionate share of the ETF's expenses. In addition, lack of liquidity in the market for an ETF's shares can result in its value being more volatile than the underlying portfolio of securities.
Schwab Balanced Fund | Semiannual Report
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
• Money Market Fund Risk. The fund may invest in underlying money market funds that either seek to maintain a stable $1 net asset value (“stable share price money market funds”) or that have a share price that fluctuates (“variable share price money market funds”). Although an underlying stable share price money market fund seeks to maintain a stable $1 net asset value, it is possible to lose money by investing in such a money market fund. Because the share price of an underlying variable share price money market fund will fluctuate, when the fund sells the shares it owns they may be worth more or less than what the fund originally paid for them. In addition, neither type of money market fund is designed to offer capital appreciation. Certain underlying money market funds may impose a fee upon the sale of shares or may temporarily suspend the ability to sell shares if such fund's liquidity falls below required minimums.
• Foreign Investment Risk. An underlying fund's investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. To the extent that an underlying fund invests a significant portion of its assets in any one country, the underlying fund will be subject to a greater risk of loss or volatility than if the underlying fund always maintained wide geographic diversity among the countries in which it invests.
• Emerging Markets Risk. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with an underlying fund's investments in emerging market countries and, at times, it may be difficult to value such investments.
• Derivatives Risk. An underlying fund may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right to buy or sell an instrument at a specific price before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. A swap is an agreement whereby two parties agree to exchange payment streams calculated in relation to a rate, index, instrument or certain securities and a predetermined amount. A credit default swap is an agreement in which the seller agrees to make a payment to the buyer in the event of a specified credit event in exchange for a fixed payment or series of fixed payments.
An underlying fund’s use of derivative instruments involves risks different from or possibly greater than the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as credit risk, leverage risk, liquidity risk, market risk and management risk, are discussed elsewhere in this section. An underlying fund’s use of derivatives is also subject to lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause an underlying fund to realize higher amounts of short-term capital gain. An underlying fund’s use of derivatives could reduce the underlying fund’s performance, increase its volatility, and could cause the fund to lose more than the initial amount invested. The use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) by an underlying fund could cause the fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.
• Leverage Risk. Certain underlying fund transactions, such as derivatives, short sales, reverse repurchase agreements, and mortgage dollar rolls, may give rise to a form of leverage and may expose an underlying fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of an underlying fund's portfolio securities, which means even a small amount of leverage can have a disproportionately large impact on the underlying fund.
• Liquidity Risk. An underlying fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or an underlying fund may have to sell them at a loss.
• Portfolio Turnover Risk. Certain of the underlying funds may buy and sell portfolio securities actively. If they do, their portfolio turnover rate and transaction costs will rise, which may lower the underlying fund's performance and may increase the likelihood of capital gain distributions.
Schwab Balanced Fund | Semiannual Report
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
• Securities Lending Risk. An underlying fund may lend its portfolio securities to brokers, dealers, and other financial institutions. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
• Mortgage-Backed and Mortgage Pass-Through Securities Risk. Certain of the mortgage-backed securities in which an underlying fund may invest are not backed by the full faith and credit of the U.S. government and there can be no assurance that the U.S. government would provide financial support to its agencies or instrumentalities where it was not obligated to do so. Mortgage-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to similar risk of decline in market value during periods of rising interest rates. Because of prepayment and extension risk, mortgage-backed securities react differently to changes in interest rates than other bonds. Small movements in interest rates-both increases and decreases-may quickly and significantly affect the value of certain mortgage-backed securities. Transactions in mortgage pass-through securities primarily occur through to be announced (TBA) transactions. Default by or bankruptcy of a counterparty to a TBA transaction could expose an underlying fund to possible losses because of an adverse market action, expenses, or delays in connection with the purchase or sale of the pools of mortgage pass-through securities specified in TBA transactions.
• Mortgage Dollar Rolls Risk. Mortgage dollar rolls are transactions in which an underlying fund sells mortgage-backed securities to a dealer and simultaneously agrees to repurchase similar securities in the future at a predetermined price. An underlying fund’s mortgage dollar rolls could lose money if the price of the mortgage-backed securities sold falls below the agreed upon repurchase price, or if the counterparty is unable to honor the agreement.
Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.
4. Affiliates and Affiliated Transactions:
Investment Adviser
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 between CSIM and the trust.
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the fund. The Plan enables the fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, Schwab) (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the fund. The fund is not subject to any fee under the Plan.
Expense Limitation
CSIM and its affiliates have agreed with the fund, for so long as CSIM serves as the investment adviser to the fund, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses to 0.00%.
The agreement to limit the fund's total expenses charged is limited to the fund's direct operating expenses and, therefore, does not apply to underlying fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
Schwab Balanced Fund | Semiannual Report
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Investments in Affiliates
The fund may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the fund may invest in other related funds. As of April 30, 2017, the fund's ownership percentages of other related funds' shares are:
| Laudus Small-Cap MarketMasters Fund, Select Shares | 17.7% |
| Laudus U.S. Large Cap Growth Fund | 2.8% |
| Schwab Core Equity Fund | 4.9% |
| Schwab Intermediate-Term Bond Fund | 10.9% |
| Schwab U.S. Aggregate Bond Index Fund | 7.1% |
| Schwab Variable Share Price Money Fund, Ultra Shares | 0.5% |
Below is a summary of the fund's transactions with its affiliated underlying funds during the period ended April 30, 2017.
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Laudus Small-Cap MarketMasters Fund, Select Shares | 1,668,454 | 20,091 | (130,680) | 1,557,865 | $30,580,896 | | $420 | | $383,137 |
| Laudus U.S. Large Cap Growth Fund | 2,515,641 | 41,001 | (13,408) | 2,543,234 | 47,507,607 | | (23,810) | | 682,242 |
| Schwab Core Equity Fund | 5,023,249 | 81,119 | (270,483) | 4,833,885 | 107,505,599 | | (939,307) | | 1,680,787 |
| Schwab Intermediate-Term Bond Fund | 3,296,863 | 262,431 | — | 3,559,294 | 35,842,089 | | — | | 582,173 |
| Schwab Total Bond Market Fund | 7,384,445 | 296,916 | (7,681,361) | — | — | | 467,481 | | 777,606 |
| Schwab U.S. Aggregate Bond Index Fund | — | 7,682,885 | — | 7,682,885 | 77,212,993 | | — | | 71,568 |
| Schwab Variable Share Price Money Fund, Ultra Shares | — | 3,002,175 | — | 3,002,175 | 3,003,076 | | — | | 4,412 |
| Total | | | | | $301,652,260 | | ($495,216) | | $4,181,925 |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the fund may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The fund had no interfund borrowing or lending activity during the period.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted on the fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the fund was a participant with other U.S. registered investment companies managed by CSIM in a joint, syndicated, committed $555 million line of credit (the Credit Facility). Under the terms of the Credit Facility, in addition to the interest charged on any borrowings by a fund, the fund paid a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the Credit Facility. There were no borrowings from the line of credit during the period.
The fund also has access to custodian overdraft facilities. The fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
Schwab Balanced Fund | Semiannual Report
Financial Notes, unaudited (continued)
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended April 30, 2017, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases
of Securities | Sales/Maturities
of Securities |
| $88,487,625 | $81,267,704 |
The purchases and sales of securities include transactions where the fund redeemed in kind its positions in the Schwab Total Bond Market Fund and made a purchase in kind into the Schwab U.S. Aggregate Bond Index Fund. In the transaction, the fund effected an in-kind redemption from the Schwab Total Bond Market Fund and simultaneously engaged in an in-kind purchase, using the securities and cash received, with Schwab U.S. Aggregate Bond Index Fund. The in-kind redemption and purchase were effected pursuant to the funds’ In-Kind Transactions Policy and Procedures adopted by the Board of Trustees. The fund realized gains (losses) in selling the Schwab Total Bond Market Fund and that amount is disclosed in the Affiliates and Affiliated Transactions in financial note 4.
8. Redemption Fee:
Prior to February 28, 2017, the fund charged a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds on the Statement of Changes in Net Assets. Effective February 28, 2017, the fund no longer charges redemption fees. The redemption fees charged during the current and prior periods were as follows:
Current Period
(11/1/16-4/30/17) | Prior Period
(11/1/15-10/31/16) |
| $1,999 | $6,464 |
9. Federal Income Taxes:
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2016, the fund had no capital loss carryforwards.
As of October 31, 2016, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the fund, and has determined that no provision for income tax is required in the fund’s financial statements. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2016, the fund did not incur any interest or penalties.
10. Recent Regulatory Development:
In October 2016, the SEC adopted new rules and amended existing rules (together, final rules) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the fund's financial statements and related disclosures.
11. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
Schwab Balanced Fund | Semiannual Report
Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the fund covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 110 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the fund’s Statement of Additional Information, which is available free by calling 1-877-824-5615.
| 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. | 110 | 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 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). | 110 | 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 – Apr. 2012). | 110 | None |
David L. Mahoney
1954
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 110 | Director, Symantec Corporation (2003 – present)
Director, Corcept Therapeutics Incorporated (2004 – present)
Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
Schwab Balanced Fund | Semiannual Report
| 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 |
Kiran M. Patel
1948
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus 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). | 110 | Director, KLA-Tencor Corporation (2008 – present) |
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). | 110 | 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 and Laudus 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). | 110 | 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 since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 110 | 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 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). | 110 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present)
Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
Schwab Balanced Fund | Semiannual Report
| 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 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); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 110 | Director, The Charles Schwab Corporation (2008 – present) |
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) (Mar. 2007 – Aug. 2010). | 110 | 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 (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 110 | 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 A. 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 and Laudus 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) (Mar. 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 and Laudus 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). |
Schwab Balanced Fund | Semiannual Report
| 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 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 (Apr. 2005 – present). |
Omar Aguilar
1970
Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies
(Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 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 – Apr. 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 and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 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 (Apr. 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 and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 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 (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 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 and Laudus 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. |
Schwab Balanced Fund | Semiannual Report
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Balanced Blended Index A custom blended index developed by CSIM that, effective August 1, 2013, is composed of 50% S&P 500 Index, 10% Russell 2000 Index, 25% Bloomberg Barclays U.S. Aggregate Bond Index, 12% Bloomberg Barclays U.S. Aggregate Intermediate Bond Index and 3% Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index. Prior to August 1, 2013 the Balanced Blended Index was composed of 60% S& P 500 Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index.
Bloomberg Barclays U.S. Aggregate Bond Index An index that represents securities that are SEC registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. The index excludes certain types of securities, including state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds.
Bloomberg Barclays U.S. Intermediate Aggregate Bond Index An index that represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $250 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Citigroup Non-U.S. Dollar World Government Bond Index A market capitalization index that measures the total rate of return performance for the government bonds of 22 countries, excluding the U.S., with a remaining maturity of at least 1 year.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
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.
Schwab Balanced Fund | Semiannual Report
Charles Schwab Investment Management
As one of the nation’s largest asset managers, our goal is to provide investors with a diverse selection of foundational products that aim to deliver consistent performance at a competitive cost. The list below shows all currently available Schwab Funds.
Investors should carefully consider information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-877-824-5615 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Funds’ website at www.csimfunds.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.
Stock Funds
Schwab Core Equity Fund™
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity 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®
Asset Allocation Funds
Schwab Balanced Fund™
Schwab MarketTrack All Equity Portfolio™
Schwab MarketTrack Growth Portfolio™
Schwab MarketTrack Balanced Portfolio™
Schwab MarketTrack Conservative Portfolio™
Schwab Target Funds
Schwab Target Index Funds
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fund™
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™
Schwab® U.S. Aggregate Bond Index Fund
Schwab® Short-Term Bond Index Fund
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Some are 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®.
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
1-877-824-5615
© 2017 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
| 1 | You could lose money by investing in a money market fund. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The money market fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. |
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Semiannual Report | April 30, 2017
Schwab MarketTrack Portfolios®
Schwab MarketTrack
All Equity Portfolio™
Schwab MarketTrack
Growth Portfolio™
Schwab MarketTrack
Balanced Portfolio™
Schwab MarketTrack
Conservative Portfolio™
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Schwab MarketTrack Portfolios
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
| Total Return for the 6 Months Ended April 30, 2017 |
| Schwab MarketTrack All Equity Portfolio (Ticker Symbol: SWEGX) | 13.40% |
| All Equity Composite Index | 13.71% |
| Fund Category: Morningstar Allocation—85%+ Equity | 11.73% |
| Performance Details | pages 8-9 |
| |
| Schwab MarketTrack Growth Portfolio (Ticker Symbol: SWHGX) | 10.64% |
| Growth Composite Index | 10.89% |
| Fund Category: Morningstar Allocation—70% to 85% Equity | 9.36% |
| Performance Details | pages 10-11 |
| |
| Schwab MarketTrack Balanced Portfolio (Ticker Symbol: SWBGX) | 7.64% |
| Balanced Composite Index | 7.93% |
| Fund Category: Morningstar Allocation—50% to 70% Equity | 7.52% |
| Performance Details | pages 12-13 |
| |
| Schwab MarketTrack Conservative Portfolio (Ticker Symbol: SWCGX) | 4.72% |
| Conservative Composite Index | 5.03% |
| Fund Category: Morningstar Allocation—30% to 50% Equity | 4.81% |
| Performance Details | pages 14-15 |
| |
| Minimum Initial Investment1 | $ 100 |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
The components that make up each of the composite indexes may vary over time. For index definitions, please see the Glossary.
Portfolio expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a portfolio’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or on the redemption of portfolio shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
| 1 | Please see the funds’ prospectus for further detail and eligibility requirements. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Marie Chandoha
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.
Dear Shareholder,
At Charles Schwab Investment Management, we believe strategy is just as important as results. The foundational products we provide our investors are designed to deliver steady, reliable, long-term performance while making investing more transparent and less complicated. And that takes finding the right strategy for each fund we offer. As pleased as we are with the performance of the Schwab MarketTrack Portfolios over the reporting period, we’re just as proud of the investment strategy behind it.
Since our last shareholder report, stock prices have risen, leading to gains for all four of the Schwab MarketTrack Portfolios during the six-month reporting period ended April 30, 2017. At this point in the market cycle, many investors may be tempted to make changes to try to get ahead of the next twist or turn. Some may question the longevity of the stock market’s now eight-year run, while others are more concerned about bond prices in light of expectations of additional interest rate hikes by the Federal Reserve later this year.
Because it’s never easy to predict which direction asset prices will go over a given period of time, we believe investors can benefit from spreading their
Asset Class Performance Comparison % returns during the six months ended 4/30/2017
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Data source: Index provider websites and CSIM.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views and portfolio holdings may have changed since the report date.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
From the President (continued)
“ Since our last shareholder report, stock prices have risen, leading to gains for all four of the Schwab MarketTrack Portfolios during the six-month reporting period ended April 30, 2017.”
money across a mix of stocks, bonds, cash, and other assets whose prices are not closely correlated. But we also believe in diversifying within asset classes as well.
When it comes to building the Schwab MarketTrack Portfolios, diversification is an important component of portfolio construction across a couple different elements. First, we look to combine a range of geographies within each asset class. In the Schwab MarketTrack All Equity Portfolio, for example, an investor has exposure to U.S., developed international, and emerging markets. We also include exposure to large-cap and small-cap market segments, as they tend to perform differently.
The second element relates to the underlying index strategies we include, as the Schwab MarketTrack Portfolios invest in a combination of both market cap and Fundamental Index funds. Market cap index strategies generally give more weight to the market’s biggest companies, whereas Fundamental Index strategies rely on factors such as a company’s adjusted sales, operating cash flow, and dividends plus buybacks when deciding security weightings. Historically, Fundamental Index strategies have outperformed their market cap counterparts when investors are focused more on valuations. These elements, combined with asset allocation to potentially help reduce risk, allow investors to choose the Schwab MarketTrack Portfolio that best matches their risk tolerance and goals.
Thank you for investing with Charles Schwab Investment Management, and for trusting us to help you achieve your financial goals. For more information about the Schwab MarketTrack Portfolios, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.csimfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
Schwab is a registered trademark of Charles Schwab & Co., Inc. Fundamental Index is a registered trademark of Research Affiliates LLC.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
The Investment Environment
Over the six-month reporting period ended April 30, 2017, equities both in the U.S. and abroad performed well. Meanwhile, global bond yields generally rose, driving many fixed income returns into negative territory (bond yields and fixed-rate bond prices move in opposite directions). The Federal Reserve (Fed) raised the federal funds rate twice over the reporting period, signaling confidence in the strength of the U.S. economy, while continued accommodative policies outside the U.S. began to show signs of success. Yields on many global government-backed securities rose over the reporting period, though remained relatively low compared to long-term averages. In this environment, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 13.32%, while the MSCI EAFE® Index (Net), a broad measure of developed international equity performance, returned 11.47%. In fixed-income markets, the Bloomberg Barclays U.S. Aggregate Bond Index returned -0.67% for the reporting period, and the Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index returned 0.22%.
The Fed tightened U.S. monetary policy over the reporting period, while many other central banks outside the U.S. maintained accommodative policies. With improvements in several key U.S. economic measures and an uptick in inflation, the Fed raised the federal funds rate in December 2016 and in March 2017. Market responses to these changes were muted as both increases were largely already priced into global equity markets. Meanwhile, the European Central Bank extended its asset purchase program to at least December 2017 and announced it was loosening the restrictions on the types of bonds it can purchase, causing the yield curve to steepen. In Asia, the Bank of Japan (BOJ) maintained negative interest rates, quantitative easing, and yield curve management over the six-month reporting period. The positive performance of many international equities and improvement in the global economic outlook over the reporting period suggested that these policies were achieving their intended results, effectively stimulating economic growth in both the eurozone and in Japan.
Market volatility generally eased over the reporting period, though fluctuations tied to elections in both the U.S. and abroad occurred during the six months. In the U.S., election-related volatility picked up in the weeks leading up to the U.S. presidential election and continued after Election Day. U.S. equity futures dropped sharply soon after the election results were announced, then rebounded almost immediately the following day and generally maintained an upward trajectory throughout most of the reporting period. This rally was fueled by investor expectations for reflationary policies from the Donald Trump administration, including increased fiscal spending, tax reform, and reduced financial regulation. However, lack of progress in certain of the Trump administration’s policies increased uncertainty and contributed to muted stock market gains in the last months of the reporting period. Meanwhile, political uncertainty in the eurozone, including elections in the Netherlands and France, also contributed to overseas market volatility. In mid-March, center-right Dutch Prime Minister Mark Rutte beat far-right candidate Geert Wilders, while the race between front-runners Emmanuel Macron and Marine Le Pen in France was closer than many expected in the first round of voting. (Macron was elected to the French presidency in the run-off election the week following the end of the reporting period.)
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
The Investment Environment (continued)
Overall global economic growth generally improved over the six-month reporting period. Eurozone economic activity picked up in both the fourth quarter of 2016 and the first quarter of 2017, and the entire eurozone bloc exited deflation by the end of January 2017. Meanwhile, the United Kingdom economy performed better than expected in the months following the decision in June to leave the European Union (Brexit) as progress toward an exit plan was made. In Japan, economic growth accelerated and consumer prices fell at a slower pace, with inflation on track to hit the target of 2% in the next two years, while rising inflation and decreasing lending costs in China contributed to a relatively stable economy over the reporting period. Not all countries made economic progress, however. The end of 2016 marked two consecutive years of economic contraction for Brazil and its worst recession on record. Meanwhile, the decreasing likelihood of relaxed economic sanctions by the U.S. weighed on Russia’s economy and contributed to sluggish growth in this country.
As bond yields remained low both overseas and in the U.S. (even with two federal funds rate increases by the Fed), the yields on many government-backed securities also remained low, with some in negative territory during the reporting period. The yield on the 10-year Japanese government bond stayed near 0.00% due to the BOJ’s yield curve management policy tool, while the 10-year German bund yield fluctuated between 0.00% and 0.50% over the six-month reporting period. In the U.S., short-term yields climbed in response to both Fed federal funds rate increases. Meanwhile longer-term yields, which are generally influenced by inflation and growth expectations, rose after the presidential election amid expectations for new policies from the Trump administration supported a positive growth outlook. As the reporting period continued and very little policy progress was made in Washington, the yields on longer-term U.S. Treasuries generally leveled off.
Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not an indication of future results.
For index definitions, please see the Glossary.
Nothing in this report represents a recommendation of a security by the investment adviser.
Management views may have changed since the report date.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
 | Zifan Tang, Ph.D., CFA, Senior Portfolio Manager, leads the portfolio management team and has overall responsibility for all aspects of the management of the funds. She was appointed portfolio manager of the funds in February 2012. Prior to joining CSIM in 2012, Ms. Tang was a product manager at Thomson Reuters and, from 1997 to 2009, worked as a portfolio manager at Barclays Global Investors, which was subsequently acquired by BlackRock. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack All Equity Portfolio
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Portfolio and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Portfolio: Schwab MarketTrack All Equity Portfolio (5/19/98) | 13.40% | 17.85% | 11.02% | 5.15% |
| All Equity Composite Index | 13.71% | 18.26% | 11.54% | 5.44% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Fund Category: Morningstar Allocation—85%+ Equity2 | 11.73% | 15.27% | 9.62% | 4.47% |
| Fund Expense Ratio3: 0.59% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.17%. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack All Equity Portfolio
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 9 |
| Portfolio Turnover Rate1 | 3% |
Asset Class Weightings % of Investments
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Growth Portfolio
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Portfolio and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Portfolio: Schwab MarketTrack Growth Portfolio (11/20/95) | 10.64% | 14.31% | 9.39% | 5.03% |
| Growth Composite Index | 10.89% | 14.75% | 9.87% | 5.50% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.30% |
| Fund Category: Morningstar Allocation—70% to 85% Equity2 | 9.36% | 12.57% | 8.22% | 4.33% |
| Fund Expense Ratio3: 0.59% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.18%. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Growth Portfolio
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 13 |
| Portfolio Turnover Rate1 | 20% |
Asset Class Weightings % of Investments
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Balanced Portfolio
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Portfolio and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Portfolio: Schwab MarketTrack Balanced Portfolio (11/20/95) | 7.64% | 10.64% | 7.44% | 4.51% |
| Balanced Composite Index | 7.93% | 11.15% | 7.98% | 5.32% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.30% |
| Fund Category: Morningstar Allocation—50% to 70% Equity2 | 7.52% | 10.42% | 7.25% | 4.87% |
| Fund Expense Ratio3: 0.62% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.21%. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Balanced Portfolio
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 13 |
| Portfolio Turnover Rate1 | 41% |
Asset Class Weightings % of Investments
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Conservative Portfolio
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment 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.csimfunds.com.
Average Annual Total Returns1
| Portfolio and Inception Date | 6 Months | 1 Year | 5 Years | 10 Years |
| Portfolio: Schwab MarketTrack Conservative Portfolio (11/20/95) | 4.72% | 7.00% | 5.43% | 3.85% |
| Conservative Composite Index | 5.03% | 7.62% | 6.06% | 5.03% |
| S&P 500® Index | 13.32% | 17.92% | 13.68% | 7.15% |
| Bloomberg Barclays U.S. Aggregate Bond Index | -0.67% | 0.83% | 2.27% | 4.30% |
| Fund Category: Morningstar Allocation—30% to 50% Equity2 | 4.81% | 7.63% | 5.27% | 4.14% |
| Fund Expense Ratio3: 0.67% |
All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indexes are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized.
For index definitions, please see the Glossary.
| 1 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. |
| 2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. |
| 3 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.23%. Reflects the total annual fund operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Conservative Portfolio
Performance and Fund Facts as of 04/30/17
| Number of Holdings | 13 |
| Portfolio Turnover Rate1 | 64% |
Asset Class Weightings % of Investments
Top Holdings % of Net Assets2,3
Portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than many other asset classes.
International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.
| 1 | Not annualized. |
| 2 | This list is not a recommendation of any security by the investment adviser. |
| 3 | The holdings listed exclude any temporary liquidity investments. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning November 1, 2016 and held through April 30, 2017.
Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, or any non-routine expenses, such as proxy fees. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs or non-routine expenses were included, your costs would have been higher.
| | Expense Ratio
(Annualized)1 | Beginning
Account Value
at 11/1/16 | Ending
Account Value
(Net of Expenses)
at 4/30/17 | Expenses Paid
During Period
11/1/16-4/30/172 |
| Schwab MarketTrack All Equity Portfolio | | | | |
| Actual Return | 0.40% | $1,000.00 | $1,134.00 | $2.12 |
| Hypothetical 5% Return | 0.40% | $1,000.00 | $1,022.82 | $2.01 |
| Schwab MarketTrack Growth Portfolio | | | | |
| Actual Return | 0.40% | $1,000.00 | $1,106.40 | $2.09 |
| Hypothetical 5% Return | 0.40% | $1,000.00 | $1,022.82 | $2.01 |
| Schwab MarketTrack Balanced Portfolio | | | | |
| Actual Return | 0.40% | $1,000.00 | $1,076.40 | $2.06 |
| Hypothetical 5% Return | 0.40% | $1,000.00 | $1,022.82 | $2.01 |
| Schwab MarketTrack Conservative Portfolio | | | | |
| Actual Return | 0.42% | $1,000.00 | $1,047.20 | $2.13 |
| Hypothetical 5% Return | 0.42% | $1,000.00 | $1,022.72 | $2.11 |
| 1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the portfolios invest are not included in this ratio. |
| 2 | Expenses for each portfolio are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by the 365 days of the fiscal year. |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack All Equity Portfolio
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $15.90 | $17.00 | $17.17 | $15.99 | $12.79 | $11.52 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.31 1 | 0.27 1 | 0.29 1 | 0.21 | 0.27 | 0.25 |
| Net realized and unrealized gains (losses) | 1.78 | 0.31 | (0.23) | 1.24 | 3.27 | 1.02 |
| Total from investment operations | 2.09 | 0.58 | 0.06 | 1.45 | 3.54 | 1.27 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.30) | (0.53) | (0.23) | (0.27) | (0.34) | — |
| Distributions from net realized gains | (0.44) | (1.15) | — | — | — | — |
| Total distributions | (0.74) | (1.68) | (0.23) | (0.27) | (0.34) | — |
| Net asset value at end of period | $17.25 | $15.90 | $17.00 | $17.17 | $15.99 | $12.79 |
| Total return | 13.40% 2 | 3.99% | 0.36% | 9.12% | 28.37% | 11.02% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | 0.40% 4 | 0.41% | 0.42% 5 | 0.50% | 0.50% | 0.50% |
| Gross operating expenses3 | 0.40% 4 | 0.42% | 0.43% 5 | 0.51% | 0.52% | 0.54% |
| Net investment income (loss) | 3.68% 4 | 1.73% | 1.67% | 1.24% | 1.84% | 1.93% |
| Portfolio turnover rate | 3% 2 | 6% | 42% 6 | 9% | 6% | 6% |
| Net assets, end of period (x 1,000,000) | $616 | $553 | $578 | $621 | $586 | $475 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Effective December 1, 2014, the management fee was reduced. The ratio presented for the period ended 10/31/15 is a blended ratio.
6
The portfolio turnover ratio increased due to the addition of Schwab Fundamental Index Funds to the portfolio during the period.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack All Equity Portfolio
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.6% | Other Investment Companies | 414,126,484 | 613,634,521 |
| 0.4% | Short-Term Investment | 2,622,996 | 2,622,996 |
| 100.0% | Total Investments | 416,749,480 | 616,257,517 |
| 0.0% | Other Assets and Liabilities, Net | | 168,212 |
| 100.0% | Net Assets | | 616,425,729 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 99.6% of net assets |
| |
| Equity Funds 99.6% |
| International 30.2% |
| Schwab Fundamental Emerging Markets Large Company Index Fund (a) | 3,674,601 | 31,197,363 |
| Schwab Fundamental International Large Company Index Fund (a) | 4,379,352 | 37,443,463 |
| Schwab Fundamental International Small Company Index Fund (a) | 2,449,498 | 31,769,994 |
| Schwab International Index Fund (a) | 4,512,287 | 85,462,715 |
| | | 185,873,535 |
| Large-Cap 44.7% |
| Schwab Fundamental US Large Company Index Fund (a) | 5,188,750 | 81,982,250 |
| Schwab S&P 500 Index Fund (a) | 5,253,216 | 193,738,610 |
| | | 275,720,860 |
| Small-Cap 24.7% |
| Schwab Fundamental US Small Company Index Fund (a) | 3,109,707 | 45,184,045 |
| Schwab Small-Cap Index Fund (a) | 3,669,508 | 106,856,081 |
| | | 152,040,126 |
| Total Other Investment Companies |
| (Cost $414,126,484) | | 613,634,521 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investment 0.4% of net assets |
| |
| Time Deposit 0.4% |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (b) | 2,622,996 | 2,622,996 |
| Total Short-Term Investment |
| (Cost $2,622,996) | | 2,622,996 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $428,170,718 and the unrealized appreciation and depreciation were $188,086,799 and ($0), respectively, with a net unrealized appreciation of $188,086,799.
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the current daily overnight rate. |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $613,634,521 | $— | $— | $613,634,521 | |
| Short-Term Investment1 | — | 2,622,996 | — | 2,622,996 | |
| Total | $613,634,521 | $2,622,996 | $— | $616,257,517 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack All Equity Portfolio
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $414,126,484) | | $613,634,521 |
| Investments in unaffiliated issuers, at value (cost $2,622,996) | + | 2,622,996 |
| Total investments, at value (cost $416,749,480) | | 616,257,517 |
| Receivables: | | |
| Investments sold | | 1,500,000 |
| Fund shares sold | | 159,681 |
| Interest | | 92 |
| Prepaid expenses | + | 18,315 |
| Total assets | | 617,935,605 |
| Liabilities |
| Payables: | | |
| Investments bought | | 1,000,000 |
| Investment adviser and administrator fees | | 64,916 |
| Shareholder service fees | | 121,838 |
| Independent trustees' fees | | 323 |
| Fund shares redeemed | | 257,290 |
| Accrued expenses | + | 65,509 |
| Total liabilities | | 1,509,876 |
| Net Assets |
| Total assets | | 617,935,605 |
| Total liabilities | – | 1,509,876 |
| Net assets | | $616,425,729 |
| Net Assets by Source | | |
| Capital received from investors | | 413,543,168 |
| Net investment income not yet distributed | | 4,258,957 |
| Net realized capital losses | | (884,433) |
| Net unrealized capital appreciation | | 199,508,037 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $616,425,729 | | 35,737,645 | | $17.25 |
| | | | | |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack All Equity Portfolio
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $11,979,153 |
| Interest | + | 3,507 |
| Total investment income | | 11,982,660 |
| Expenses |
| Investment adviser and administrator fees | | 381,607 |
| Shareholder service fees | | 708,462 |
| Shareholder reports | | 33,292 |
| Professional fees | | 14,376 |
| Registration fees | | 12,260 |
| Transfer agent fees | | 10,171 |
| Portfolio accounting fees | | 10,101 |
| Independent trustees' fees | | 5,589 |
| Custodian fees | | 492 |
| Other expenses | + | 3,668 |
| Total expenses | | 1,180,018 |
| Expense reduction by CSIM and its affiliates | – | 10,171 |
| Net expenses | – | 1,169,847 |
| Net investment income | | 10,812,813 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 7,657,042 |
| Net realized gains on sales of affiliated underlying funds | + | 2,895,843 |
| Net realized gains | | 10,552,885 |
| Net change in unrealized appreciation (depreciation) on investments | + | 52,088,294 |
| Net realized and unrealized gains | | 62,641,179 |
| Increase in net assets resulting from operations | | $73,453,992 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack All Equity Portfolio
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $10,812,813 | $9,512,618 |
| Net realized gains | | 10,552,885 | 16,087,296 |
| Net change in unrealized appreciation (depreciation) | + | 52,088,294 | (5,044,678) |
| Increase in net assets from operations | | 73,453,992 | 20,555,236 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (10,329,088) | (17,824,381) |
| Distributions from net realized gains | + | (15,056,778) | (38,823,520) |
| Total distributions | | ($25,385,866) | ($56,647,901) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 1,899,347 | $31,741,451 | 2,683,457 | $41,168,105 |
| Shares reinvested | | 1,434,727 | 23,299,953 | 3,463,150 | 52,155,040 |
| Shares redeemed | + | (2,385,691) | (39,744,354) | (5,333,614) | (81,715,079) |
| Net transactions in fund shares | | 948,383 | $15,297,050 | 812,993 | $11,608,066 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 34,789,262 | $553,060,553 | 33,976,269 | $577,545,152 |
| Total increase or decrease | + | 948,383 | 63,365,176 | 812,993 | (24,484,599) |
| End of period | | 35,737,645 | $616,425,729 | 34,789,262 | $553,060,553 |
| Net investment income not yet distributed | | | $4,258,957 | | $3,775,232 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Growth Portfolio
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $20.54 | $22.68 | $23.20 | $21.67 | $18.08 | $16.85 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.34 1 | 0.32 1 | 0.34 1 | 0.27 | 0.34 | 0.30 |
| Net realized and unrealized gains (losses) | 1.81 | 0.41 | (0.12) | 1.57 | 3.60 | 1.35 |
| Total from investment operations | 2.15 | 0.73 | 0.22 | 1.84 | 3.94 | 1.65 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.36) | (0.39) | (0.35) | (0.31) | (0.35) | (0.42) |
| Distributions from net realized gains | (0.42) | (2.48) | (0.39) | — | — | — |
| Total distributions | (0.78) | (2.87) | (0.74) | (0.31) | (0.35) | (0.42) |
| Net asset value at end of period | $21.91 | $20.54 | $22.68 | $23.20 | $21.67 | $18.08 |
| Total return | 10.64% 2 | 3.88% | 0.95% | 8.55% | 22.14% | 10.03% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | 0.40% 4 | 0.41% | 0.42% 5 | 0.50% | 0.50% | 0.50% |
| Gross operating expenses3 | 0.40% 4 | 0.41% | 0.42% 5 | 0.51% | 0.52% | 0.53% |
| Net investment income (loss) | 3.23% 4 | 1.61% | 1.50% | 1.20% | 1.71% | 1.78% |
| Portfolio turnover rate | 20% 2,6 | 12% | 36% 7 | 7% | 9% | 9% |
| Net assets, end of period (x 1,000,000) | $767 | $707 | $716 | $734 | $680 | $566 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Effective December 1, 2014, the management fee was reduced. The ratio presented for the period ended 10/31/15 is a blended ratio.
6
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 5% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
7
The portfolio turnover ratio increased due to the addition of Schwab Fundamental Index Funds to the portfolio during the period.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Growth Portfolio
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 98.0% | Other Investment Companies | 493,727,318 | 751,959,041 |
| 1.9% | Short-Term Investments | 14,391,437 | 14,391,437 |
| 99.9% | Total Investments | 508,118,755 | 766,350,478 |
| 0.1% | Other Assets and Liabilities, Net | | 939,741 |
| 100.0% | Net Assets | | 767,290,219 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 98.0% of net assets |
| |
| Equity Funds 80.4% |
| International 20.4% |
| Schwab Fundamental Emerging Markets Large Company Index Fund (a) | 3,103,342 | 26,347,372 |
| Schwab Fundamental International Large Company Index Fund (a) | 3,677,335 | 31,441,215 |
| Schwab Fundamental International Small Company Index Fund (a) | 2,053,418 | 26,632,825 |
| Schwab International Index Fund (a) | 3,819,676 | 72,344,664 |
| | | 156,766,076 |
| Large-Cap 40.0% |
| Schwab Fundamental US Large Company Index Fund (a) | 5,791,396 | 91,504,062 |
| Schwab S&P 500 Index Fund (a) | 5,828,932 | 214,971,024 |
| | | 306,475,086 |
| Small-Cap 20.0% |
| Schwab Fundamental US Small Company Index Fund (a) | 3,187,959 | 46,321,048 |
| Schwab Small-Cap Index Fund (a) | 3,676,932 | 107,072,270 |
| | | 153,393,318 |
| | | 616,634,480 |
| |
| Fixed-Income Fund 14.6% |
| Intermediate-Term Bond 14.6% |
| Schwab U.S. Aggregate Bond Index Fund (a) | 11,155,514 | 112,112,918 |
| |
| Security | Number
of Shares | Value ($) |
| Money Market Fund 3.0% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 23,204,681 | 23,211,643 |
| Total Other Investment Companies |
| (Cost $493,727,318) | | 751,959,041 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 1.9% of net assets |
| |
| Time Deposits 1.9% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (c) | 2,885,496 | 2,885,496 |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (c) | 7,695,214 | 7,695,214 |
| BNP Paribas |
| 0.42%, 05/01/17 (c) | 3,810,727 | 3,810,727 |
| Total Short-Term Investments |
| (Cost $14,391,437) | | 14,391,437 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $508,559,181 and the unrealized appreciation and depreciation were $257,985,654 and ($194,357), respectively, with a net unrealized appreciation of $257,791,297.
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $751,959,041 | $— | $— | $751,959,041 | |
| Short-Term Investments1 | — | 14,391,437 | — | 14,391,437 | |
| Total | $751,959,041 | $14,391,437 | $— | $766,350,478 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Growth Portfolio
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $493,727,318) | | $751,959,041 |
| Investments in unaffiliated issuers, at value (cost $14,391,437) | + | 14,391,437 |
| Total investments, at value (cost $508,118,755) | | 766,350,478 |
| Receivables: | | |
| Investments sold | | 1,300,000 |
| Fund shares sold | | 589,087 |
| Dividends | | 229,478 |
| Interest | | 504 |
| Prepaid expenses | + | 17,936 |
| Total assets | | 768,487,483 |
| Liabilities |
| Payables: | | |
| Investments bought | | 660,859 |
| Investment adviser and administrator fees | | 76,246 |
| Shareholder service fees | | 152,586 |
| Independent trustees' fees | | 336 |
| Fund shares redeemed | | 234,954 |
| Accrued expenses | + | 72,283 |
| Total liabilities | | 1,197,264 |
| Net Assets |
| Total assets | | 768,487,483 |
| Total liabilities | – | 1,197,264 |
| Net assets | | $767,290,219 |
| Net Assets by Source | | |
| Capital received from investors | | 494,244,021 |
| Distributions in excess of net investment income | | (441,421) |
| Net realized capital gains | | 15,255,896 |
| Net unrealized capital appreciation | | 258,231,723 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $767,290,219 | | 35,024,769 | | $21.91 |
| | | | | |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Growth Portfolio
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $13,421,208 |
| Interest | + | 19,204 |
| Total investment income | | 13,440,412 |
| Expenses |
| Investment adviser and administrator fees | | 481,481 |
| Shareholder service fees | | 900,675 |
| Shareholder reports | | 33,205 |
| Registration fees | | 15,870 |
| Professional fees | | 14,783 |
| Portfolio accounting fees | | 11,127 |
| Transfer agent fees | | 8,896 |
| Independent trustees' fees | | 6,068 |
| Custodian fees | | 564 |
| Other expenses | + | 4,614 |
| Total expenses | | 1,477,283 |
| Expense reduction by CSIM and its affiliates | – | 8,896 |
| Net expenses | – | 1,468,387 |
| Net investment income | | 11,972,025 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 8,303,751 |
| Net realized gains on sales of affiliated underlying funds | + | 10,232,572 |
| Net realized gains | | 18,536,323 |
| Net change in unrealized appreciation (depreciation) on investments | + | 44,149,832 |
| Net realized and unrealized gains | | 62,686,155 |
| Increase in net assets resulting from operations | | $74,658,180 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Growth Portfolio
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $11,972,025 | $11,228,277 |
| Net realized gains | | 18,536,323 | 15,589,084 |
| Net change in unrealized appreciation (depreciation) | + | 44,149,832 | 67,526 |
| Increase in net assets from operations | | 74,658,180 | 26,884,887 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (12,313,667) | (12,295,465) |
| Distributions from net realized gains | + | (14,243,881) | (78,132,750) |
| Total distributions | | ($26,557,548) | ($90,428,215) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 2,117,941 | $45,191,514 | 3,143,226 | $62,988,887 |
| Shares reinvested | | 1,199,044 | 25,000,064 | 4,371,390 | 85,329,538 |
| Shares redeemed | + | (2,706,851) | (57,821,588) | (4,668,623) | (93,835,305) |
| Net transactions in fund shares | | 610,134 | $12,369,990 | 2,845,993 | $54,483,120 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 34,414,635 | $706,819,597 | 31,568,642 | $715,879,805 |
| Total increase or decrease | + | 610,134 | 60,470,622 | 2,845,993 | (9,060,208) |
| End of period | | 35,024,769 | $767,290,219 | 34,414,635 | $706,819,597 |
| Distributions in excess of net investment income | | | ($441,421) | | ($99,779) |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Balanced Portfolio
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $17.35 | $19.07 | $19.50 | $18.55 | $16.33 | $15.41 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.26 1 | 0.27 1 | 0.29 1 | 0.26 | 0.31 | 0.29 |
| Net realized and unrealized gains (losses) | 1.04 | 0.35 | (0.08) | 1.08 | 2.23 | 1.01 |
| Total from investment operations | 1.30 | 0.62 | 0.21 | 1.34 | 2.54 | 1.30 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.30) | (0.33) | (0.30) | (0.27) | (0.32) | (0.38) |
| Distributions from net realized gains | (0.25) | (2.01) | (0.34) | (0.12) | — | — |
| Total distributions | (0.55) | (2.34) | (0.64) | (0.39) | (0.32) | (0.38) |
| Net asset value at end of period | $18.10 | $17.35 | $19.07 | $19.50 | $18.55 | $16.33 |
| Total return | 7.64% 2 | 3.92% | 1.10% | 7.28% | 15.82% | 8.61% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | 0.40% 4 | 0.41% | 0.42% 5 | 0.50% | 0.50% | 0.50% |
| Gross operating expenses3 | 0.40% 4 | 0.41% | 0.42% 5 | 0.51% | 0.52% | 0.53% |
| Net investment income (loss) | 2.90% 4 | 1.60% | 1.51% | 1.30% | 1.75% | 1.86% |
| Portfolio turnover rate | 41% 2,6 | 15% | 36% 7 | 16% | 12% | 12% |
| Net assets, end of period (x 1,000,000) | $530 | $516 | $512 | $522 | $481 | $425 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Effective December 1, 2014, the management fee was reduced. The ratio presented for the period ended 10/31/15 is a blended ratio.
6
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 7% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
7
The portfolio turnover ratio increased due to the addition of Schwab Fundamental Index Funds to the portfolio during the period.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.6% | Other Investment Companies | 378,963,016 | 516,935,082 |
| 2.4% | Short-Term Investments | 12,390,118 | 12,390,118 |
| 100.0% | Total Investments | 391,353,134 | 529,325,200 |
| 0.0% | Other Assets and Liabilities, Net | | 224,277 |
| 100.0% | Net Assets | | 529,549,477 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.6% of net assets |
| |
| Equity Funds 60.2% |
| International 15.1% |
| Schwab Fundamental Emerging Markets Large Company Index Fund (a) | 1,541,358 | 13,086,126 |
| Schwab Fundamental International Large Company Index Fund (a) | 1,935,741 | 16,550,585 |
| Schwab Fundamental International Small Company Index Fund (a) | 1,037,933 | 13,461,993 |
| Schwab International Index Fund (a) | 1,938,449 | 36,714,227 |
| | | 79,812,931 |
| Large-Cap 30.1% |
| Schwab Fundamental US Large Company Index Fund (a) | 3,037,288 | 47,989,146 |
| Schwab S&P 500 Index Fund (a) | 3,025,878 | 111,594,393 |
| | | 159,583,539 |
| Small-Cap 15.0% |
| Schwab Fundamental US Small Company Index Fund (a) | 1,674,683 | 24,333,149 |
| Schwab Small-Cap Index Fund (a) | 1,893,863 | 55,149,288 |
| | | 79,482,437 |
| | | 318,878,907 |
| |
| Fixed-Income Fund 34.7% |
| Intermediate-Term Bond 34.7% |
| Schwab U.S. Aggregate Bond Index Fund (a) | 18,300,832 | 183,923,363 |
| |
| Security | Number
of Shares | Value ($) |
| Money Market Fund 2.7% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 14,128,573 | 14,132,812 |
| Total Other Investment Companies |
| (Cost $378,963,016) | | 516,935,082 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 2.4% of net assets |
| |
| Time Deposits 2.4% |
| Australia & New Zealand Banking Group Ltd. |
| 0.42%, 05/01/17 (c) | 5,305,722 | 5,305,722 |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (c) | 5,305,722 | 5,305,722 |
| Citibank |
| 0.42%, 05/01/17 (c) | 1,778,674 | 1,778,674 |
| Total Short-Term Investments |
| (Cost $12,390,118) | | 12,390,118 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $394,380,923 and the unrealized appreciation and depreciation were $135,211,059 and ($266,782), respectively, with a net unrealized appreciation of $134,944,277.
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $516,935,082 | $— | $— | $516,935,082 | |
| Short-Term Investments1 | — | 12,390,118 | — | 12,390,118 | |
| Total | $516,935,082 | $12,390,118 | $— | $529,325,200 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Balanced Portfolio
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $378,963,016) | | $516,935,082 |
| Investments in unaffiliated issuers, at value (cost $12,390,118) | + | 12,390,118 |
| Total investments, at value (cost $391,353,134) | | 529,325,200 |
| Receivables: | | |
| Dividends | | 371,615 |
| Fund shares sold | | 365,269 |
| Interest | | 434 |
| Prepaid expenses | + | 20,398 |
| Total assets | | 530,082,916 |
| Liabilities |
| Payables: | | |
| Investments bought | | 107,548 |
| Investment adviser and administrator fees | | 56,411 |
| Shareholder service fees | | 106,729 |
| Independent trustees' fees | | 338 |
| Fund shares redeemed | | 218,259 |
| Accrued expenses | + | 44,154 |
| Total liabilities | | 533,439 |
| Net Assets |
| Total assets | | 530,082,916 |
| Total liabilities | – | 533,439 |
| Net assets | | $529,549,477 |
| Net Assets by Source | | |
| Capital received from investors | | 381,515,890 |
| Net investment income not yet distributed | | 470,355 |
| Net realized capital gains | | 9,591,166 |
| Net unrealized capital appreciation | | 137,972,066 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $529,549,477 | | 29,260,249 | | $18.10 |
| | | | | |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Balanced Portfolio
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $8,547,576 |
| Interest | + | 15,646 |
| Total investment income | | 8,563,222 |
| Expenses |
| Investment adviser and administrator fees | | 336,763 |
| Shareholder service fees | | 631,412 |
| Registration fees | | 18,871 |
| Shareholder reports | | 17,783 |
| Professional fees | | 14,268 |
| Portfolio accounting fees | | 9,842 |
| Transfer agent fees | | 7,437 |
| Independent trustees' fees | | 5,424 |
| Custodian fees | | 540 |
| Other expenses | + | 3,829 |
| Total expenses | | 1,046,169 |
| Expense reduction by CSIM and its affiliates | – | 7,437 |
| Net expenses | – | 1,038,732 |
| Net investment income | | 7,524,490 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 4,404,080 |
| Net realized gains on sales of affiliated underlying funds | + | 13,469,807 |
| Net realized gains | | 17,873,887 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 13,000,262 |
| Net realized and unrealized gains | | 30,874,149 |
| Increase in net assets resulting from operations | | $38,398,639 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Balanced Portfolio
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $7,524,490 | $8,114,394 |
| Net realized gains | | 17,873,887 | 7,614,608 |
| Net change in unrealized appreciation (depreciation) | + | 13,000,262 | 3,868,814 |
| Increase in net assets from operations | | 38,398,639 | 19,597,816 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (8,666,441) | (8,833,869) |
| Distributions from net realized gains | + | (7,379,404) | (53,151,015) |
| Total distributions | | ($16,045,845) | ($61,984,884) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 3,109,477 | $54,993,702 | 5,422,348 | $90,844,158 |
| Shares reinvested | | 851,062 | 14,782,939 | 3,496,216 | 57,722,533 |
| Shares redeemed | + | (4,433,332) | (78,429,210) | (6,040,389) | (102,580,180) |
| Net transactions in fund shares | | (472,793) | ($8,652,569) | 2,878,175 | $45,986,511 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 29,733,042 | $515,849,252 | 26,854,867 | $512,249,809 |
| Total increase or decrease | + | (472,793) | 13,700,225 | 2,878,175 | 3,599,443 |
| End of period | | 29,260,249 | $529,549,477 | 29,733,042 | $515,849,252 |
| Net investment income not yet distributed | | | $470,355 | | $1,612,306 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Conservative Portfolio
Financial Statements
Financial Highlights
| | 11/1/16–
4/30/17* | 11/1/15–
10/31/16 | 11/1/14–
10/31/15 | 11/1/13–
10/31/14 | 11/1/12–
10/31/13 | 11/1/11–
10/31/12 |
| Per-Share Data |
| Net asset value at beginning of period | $15.31 | $15.94 | $16.00 | $15.34 | $14.23 | $13.59 |
| Income (loss) from investment operations: | | | | | | |
| Net investment income (loss) | 0.19 1 | 0.24 1 | 0.25 1 | 0.23 | 0.26 | 0.26 |
| Net realized and unrealized gains (losses) | 0.52 | 0.30 | (0.05) | 0.67 | 1.10 | 0.69 |
| Total from investment operations | 0.71 | 0.54 | 0.20 | 0.90 | 1.36 | 0.95 |
| Less distributions: | | | | | | |
| Distributions from net investment income | (0.20) | (0.27) | (0.26) | (0.24) | (0.25) | (0.31) |
| Distributions from net realized gains | (0.12) | (0.90) | — | — | — | — |
| Total distributions | (0.32) | (1.17) | (0.26) | (0.24) | (0.25) | (0.31) |
| Net asset value at end of period | $15.70 | $15.31 | $15.94 | $16.00 | $15.34 | $14.23 |
| Total return | 4.72% 2 | 3.68% | 1.23% | 5.95% | 9.71% | 7.07% |
| Ratios/Supplemental Data |
| Ratios to average net assets: | | | | | | |
| Net operating expenses3 | 0.42% 4 | 0.43% | 0.43% 5 | 0.50% | 0.50% | 0.50% |
| Gross operating expenses3 | 0.42% 4 | 0.44% | 0.44% 5 | 0.54% | 0.55% | 0.55% |
| Net investment income (loss) | 2.51% 4 | 1.61% | 1.54% | 1.43% | 1.78% | 1.96% |
| Portfolio turnover rate | 64% 2,6 | 10% | 24% 7 | 9% | 15% | 19% |
| Net assets, end of period (x 1,000,000) | $260 | $238 | $228 | $223 | $203 | $189 |
| |
1
Calculated based on the average shares outstanding during the period.
2
Not annualized.
3
The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4
Annualized.
5
Effective December 1, 2014, the management fee was reduced. The ratio presented for the period ended 10/31/15 is a blended ratio.
6
The portfolio turnover ratio increased due to the in-kind transactions relating to Schwab Total Bond Market Fund and Schwab U.S. Aggregate Bond Index Fund. For comparison purposes, portfolio turnover rate would have been 11% without including these transactions. There were no transaction costs associated with these transactions. (See financial note 7)
7
The portfolio turnover ratio increased due to the addition of Schwab Fundamental Index Funds to the portfolio during the period.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.1% | Other Investment Companies | 209,214,446 | 252,384,586 |
| 2.8% | Short-Term Investments | 7,464,376 | 7,464,376 |
| 99.9% | Total Investments | 216,678,822 | 259,848,962 |
| 0.1% | Other Assets and Liabilities, Net | | 133,926 |
| 100.0% | Net Assets | | 259,982,888 |
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 97.1% of net assets |
| |
| Equity Funds 40.3% |
| International 10.2% |
| Schwab Fundamental Emerging Markets Large Company Index Fund (a) | 515,152 | 4,373,636 |
| Schwab Fundamental International Large Company Index Fund (a) | 595,737 | 5,093,549 |
| Schwab Fundamental International Small Company Index Fund (a) | 336,108 | 4,359,315 |
| Schwab International Index Fund (a) | 666,520 | 12,623,886 |
| | | 26,450,386 |
| Large-Cap 20.1% |
| Schwab Fundamental US Large Company Index Fund (a) | 1,013,402 | 16,011,758 |
| Schwab S&P 500 Index Fund (a) | 985,761 | 36,354,856 |
| | | 52,366,614 |
| Small-Cap 10.0% |
| Schwab Fundamental US Small Company Index Fund (a) | 546,793 | 7,944,908 |
| Schwab Small-Cap Index Fund (a) | 616,100 | 17,940,822 |
| | | 25,885,730 |
| | | 104,702,730 |
| |
| Fixed-Income Fund 54.7% |
| Intermediate-Term Bond 54.7% |
| Schwab U.S. Aggregate Bond Index Fund (a) | 14,144,802 | 142,155,257 |
| |
| Security | Number
of Shares | Value ($) |
| Money Market Fund 2.1% |
| Schwab Variable Share Price Money Fund, Ultra Shares 0.90% (a)(b) | 5,524,941 | 5,526,599 |
| Total Other Investment Companies |
| (Cost $209,214,446) | | 252,384,586 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 2.8% of net assets |
| |
| Time Deposits 2.8% |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (c) | 2,602,443 | 2,602,443 |
| BNP Paribas |
| 0.42%, 05/01/17 (c) | 2,259,490 | 2,259,490 |
| Sumitomo Mitsui Banking Corp. |
| 0.42%, 05/01/17 (c) | 2,602,443 | 2,602,443 |
| Total Short-Term Investments |
| (Cost $7,464,376) | | 7,464,376 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $218,261,856 and the unrealized appreciation and depreciation were $41,753,968 and ($166,862), respectively, with a net unrealized appreciation of $41,587,106.
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
The following is a summary of the inputs used to value the fund's investments as of April 30, 2017 (see financial note 2(a) for additional information):
| 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 | $252,384,586 | $— | $— | $252,384,586 | |
| Short-Term Investments1 | — | 7,464,376 | — | 7,464,376 | |
| Total | $252,384,586 | $7,464,376 | $— | $259,848,962 | |
| 1 | As categorized in Portfolio Holdings. |
The fund's policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2017.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Conservative Portfolio
Statement of Assets and Liabilities
As of April 30, 2017; unaudited
| Assets |
| Investments in affiliated underlying funds, at value (cost $209,214,446) | | $252,384,586 |
| Investments in unaffiliated issuers, at value (cost $7,464,376) | + | 7,464,376 |
| Total investments, at value (cost $216,678,822) | | 259,848,962 |
| Receivables: | | |
| Investments sold | | 800,000 |
| Dividends | | 282,028 |
| Fund shares sold | | 139,176 |
| Interest | | 261 |
| Prepaid expenses | + | 12,467 |
| Total assets | | 261,082,894 |
| Liabilities |
| Payables: | | |
| Investments bought | | 891,958 |
| Investment adviser and administrator fees | | 27,512 |
| Shareholder service fees | | 52,406 |
| Independent trustees' fees | | 306 |
| Fund shares redeemed | | 99,519 |
| Accrued expenses | + | 28,305 |
| Total liabilities | | 1,100,006 |
| Net Assets |
| Total assets | | 261,082,894 |
| Total liabilities | – | 1,100,006 |
| Net assets | | $259,982,888 |
| Net Assets by Source | | |
| Capital received from investors | | 216,796,916 |
| Net investment income not yet distributed | | 131,547 |
| Net realized capital losses | | (115,715) |
| Net unrealized capital appreciation | | 43,170,140 |
| Net Asset Value (NAV) |
| Net Assets | ÷ | Shares
Outstanding | = | NAV |
| $259,982,888 | | 16,563,101 | | $15.70 |
| | | | | |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Conservative Portfolio
Statement of Operations
For the period November 1, 2016 through April 30, 2017; unaudited
| Investment Income |
| Dividends received from affiliated underlying funds | | $3,489,027 |
| Interest | + | 9,302 |
| Total investment income | | 3,498,329 |
| Expenses |
| Investment adviser and administrator fees | | 155,059 |
| Shareholder service fees | | 292,777 |
| Registration fees | | 13,787 |
| Professional fees | | 13,505 |
| Shareholder reports | | 8,156 |
| Portfolio accounting fees | | 8,105 |
| Transfer agent fees | | 5,044 |
| Independent trustees' fees | | 4,542 |
| Custodian fees | | 805 |
| Other expenses | + | 1,947 |
| Total expenses | | 503,727 |
| Expense reduction by CSIM and its affiliates | – | 5,044 |
| Net expenses | – | 498,683 |
| Net investment income | | 2,999,646 |
| Realized and Unrealized Gains (Losses) |
| Realized capital gain distributions received from affiliated underlying funds | | 1,318,743 |
| Net realized gains on sales of affiliated underlying funds | + | 5,423,819 |
| Net realized gains | | 6,742,562 |
| Net change in unrealized appreciation (depreciation) on affiliated underlying funds | + | 1,339,452 |
| Net realized and unrealized gains | | 8,082,014 |
| Increase in net assets resulting from operations | | $11,081,660 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Conservative Portfolio
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
| Operations | |
| | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| Net investment income | | $2,999,646 | $3,685,571 |
| Net realized gains | | 6,742,562 | 2,120,710 |
| Net change in unrealized appreciation (depreciation) | + | 1,339,452 | 2,559,754 |
| Increase in net assets from operations | | 11,081,660 | 8,366,035 |
| Distributions to Shareholders | |
| Distributions from net investment income | | (3,061,238) | (3,884,346) |
| Distributions from net realized gains | + | (1,875,524) | (12,777,507) |
| Total distributions | | ($4,936,762) | ($16,661,853) |
| Transactions in Fund Shares | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | VALUE | SHARES | VALUE |
| Shares sold | | 2,600,497 | $40,266,129 | 3,067,103 | $46,365,503 |
| Shares reinvested | | 291,585 | 4,448,331 | 1,032,463 | 15,174,842 |
| Shares redeemed | + | (1,871,345) | (28,865,622) | (2,836,646) | (42,848,228) |
| Net transactions in fund shares | | 1,020,737 | $15,848,838 | 1,262,920 | $18,692,117 |
| Shares Outstanding and Net Assets | | | |
| | | 11/1/16-4/30/17 | 11/1/15-10/31/16 |
| | | SHARES | NET ASSETS | SHARES | NET ASSETS |
| Beginning of period | | 15,542,364 | $237,989,152 | 14,279,444 | $227,592,853 |
| Total increase | + | 1,020,737 | 21,993,736 | 1,262,920 | 10,396,299 |
| End of period | | 16,563,101 | $259,982,888 | 15,542,364 | $237,989,152 |
| Net investment income not yet distributed | | | $131,547 | | $193,139 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Financial Notes, unaudited
1. Business Structure of the Funds:
Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio, and Schwab MarketTrack Conservative Portfolio (the funds) are each a series of Schwab Capital Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB CAPITAL TRUST (ORGANIZED MAY 7, 1993) |
| Schwab MarketTrack All Equity Portfolio | Schwab Target 2045 Fund |
| Schwab MarketTrack Growth Portfolio | Schwab Target 2050 Fund |
| Schwab MarketTrack Balanced Portfolio | Schwab Target 2055 Fund |
| Schwab MarketTrack Conservative Portfolio | Schwab Target 2060 Fund |
| Schwab ® S&P 500 Index Fund | Schwab Fundamental US Large Company Index Fund |
| Schwab Small-Cap Index Fund® | Schwab Fundamental US Small Company Index Fund |
| Schwab Total Stock Market Index Fund® | Schwab Fundamental International Large Company Index Fund |
| Schwab International Index Fund® | Schwab Fundamental International Small Company Index Fund |
| Laudus Small-Cap MarketMasters Fund™ | Schwab Fundamental Emerging Markets Large Company Index Fund |
| Laudus International MarketMasters Fund™ | Schwab Fundamental Global Real Estate Index Fund |
| Schwab Balanced Fund™ | Schwab Target 2010 Index Fund |
| Schwab Core Equity Fund™ | Schwab Target 2015 Index Fund |
| Schwab Dividend Equity Fund™ | Schwab Target 2020 Index Fund |
| Schwab Large-Cap Growth Fund™ | Schwab Target 2025 Index Fund |
| Schwab Small-Cap Equity Fund™ | Schwab Target 2030 Index Fund |
| Schwab Hedged Equity Fund™ | Schwab Target 2035 Index Fund |
| Schwab Health Care Fund™ | Schwab Target 2040 Index Fund |
| Schwab ® International Core Equity Fund | Schwab Target 2045 Index Fund |
| Schwab Target 2010 Fund | Schwab Target 2050 Index Fund |
| Schwab Target 2015 Fund | Schwab Target 2055 Index Fund |
| Schwab Target 2020 Fund | Schwab Target 2060 Index Fund |
| Schwab Target 2025 Fund | Schwab® Monthly Income Fund - Moderate Payout |
| Schwab Target 2030 Fund | Schwab® Monthly Income Fund - Enhanced Payout |
| Schwab Target 2035 Fund | Schwab® Monthly Income Fund - Maximum Payout |
| Schwab Target 2040 Fund | |
The Schwab MarketTrack Portfolios are primarily “funds of funds.” Each of the funds seeks to achieve its investment objective by investing mainly in a combination of other Schwab Funds (underlying funds) in accordance with its target portfolio allocation. The funds may also invest directly in equity or fixed-income securities, other mutual funds, exchange-traded funds (ETFs) and cash equivalents, including money market securities to achieve their investment objectives.
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds' Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The financial statements of the funds should be read in conjunction with the underlying funds' financial statements. For more information about the underlying funds' operations and policies, please refer to those funds' semiannual and annual reports, which are filed and available on the U.S. Securities and Exchange Commission's (SEC) website at www.sec.gov or at the SEC's Public Reference Room in Washington D.C.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(a) Security Valuation:
Under procedures approved by the Board, the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• Underlying funds: Mutual funds are valued at their respective NAVs.
• Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the significant inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.
• Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)—Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations.
• Level 3—significant unobservable inputs (including the funds' own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds' results of operations.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds' investments as of April 30, 2017 are disclosed in the Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Cash Management Transactions: The funds may subscribe to the Brown Brothers Harriman & Co. (BBH) Cash Management Service Sweep (CMS Sweep). The BBH CMS Sweep is an investment product that automatically sweeps the funds’ cash balances into overnight offshore time deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the funds to earn interest on cash balances. Excess cash invested with deposit institutions domiciled outside of the U.S., as with any offshore deposit, may be subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. The funds bear the risk associated with the repayment of principal and payment of interest on such instruments by the institution with which the deposit is ultimately placed. Balances in the CMS Sweep are accounted for on a cost basis, which approximates market value.
(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.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets. Each fund bears its share of the allocable expenses of the underlying funds in which it invests. Such expenses are reflected in the net asset values of the underlying funds.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year, except for the Schwab MarketTrack Conservative Portfolio, which makes distributions from net investment income quarterly.
(g) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(h) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized 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.
(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 attributable to these arrangements to be remote.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds' prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The funds are subject to asset allocation risk, which is the risk that the selection of the underlying funds and the allocation of a fund's assets among the various asset classes and market segments will cause the fund to underperform other funds with a similar investment objective.
Conflicts of Interest Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds may create a conflict of interest because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds. The investment adviser also may have an incentive to select an affiliated underlying fund for other reasons, including to increase assets under management or to support new investment strategies. In addition, other conflicts of interest may exist where the best interests of the affiliated underlying fund may not be aligned with those of the fund or vice versa. However, the investment adviser is a fiduciary to the fund and is legally obligated to act in the fund’s best interests when selecting underlying funds.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in the fund will fluctuate, which means that an investor could lose money over short or long periods.
Direct Investment Risk. A fund may invest directly in individual securities as well as other mutual funds, ETFs and cash equivalents, including money market securities. A fund's direct investment in these securities is subject to the same or similar risks as an underlying fund's investment in the same security.
Underlying Fund Investment Risk. The value of your investment in the funds is based primarily on the prices of the underlying funds that the fund purchases. In turn, the price of each underlying fund is based on the value of its securities. The funds are subject to the performance and expenses of the underlying funds in which they invest. Before investing in the funds, investors should assess the risks associated with the underlying funds in which the funds may invest and the types of investments made by those underlying funds. These risks include any combination of the risks described below, although a fund's exposure to a particular risk will be proportionate to the fund's overall asset allocation and underlying fund allocation.
• Investment Risk. The funds may experience losses with respect to their investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective.
• Investment Style Risk. Some underlying funds seek to track the performance of various segments of the stock market, as measured by their respective indices. Each underlying fund follows these stocks during upturns as well as downturns. Because of their indexing strategy, the underlying funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of an underlying fund's expenses, the underlying fund's performance is normally below that of the index. A significant percentage of the index may be composed of securities in a single industry or sector of the economy. If the underlying fund is focused in an industry or sector, it may present more risks than if it were broadly diversified over numerous industries and sectors of the economy.
• Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, the equity market tends to move in cycles, which may cause stock prices to fall over short or extended periods of time.
• Tracking Error Risk. Each underlying index fund seeks to track the performance of its benchmark indices, although it may not be successful in doing so. The divergence between the performance of a fund and its benchmark index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
• Market Capitalization Risk. Securities issued by companies of different market capitalization tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, the underlying fund’s performance could be impacted.
• Money Market Fund Risk. The funds may invest in underlying money market funds that either seek to maintain a stable $1 net asset value (“stable share price money market funds”) or have a share price that fluctuates (“variable share price money market funds”). Although an underlying stable share price money market fund seeks to maintain a stable $1 net asset value, it is possible to lose money by investing in such a money market fund. Because the share price of an underlying variable share
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Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
price money market fund will fluctuate, when the fund sells the shares it owns they may be worth more or less than what the fund originally paid for them. In addition, neither type of money market fund is designed to offer capital appreciation. Certain underlying money market funds may impose a fee upon the sale of shares or may temporarily suspend the ability to sell shares if such fund's liquidity falls below required minimums.
• Concentration Risk. To the extent that an underlying fund's or the index's portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country or asset class, the underlying fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political, or regulatory occurrences affecting that market, industry, group of industries, sector, country or asset class.
• Foreign Investment Risk. An underlying fund's investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. To the extent that an underlying fund invests a significant portion of its assets in any one country, the underlying fund will be subject to a greater risk of loss or volatility than if the underlying fund always maintained wide geographic diversity among the countries in which it invests.
• Emerging Markets Risk. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with an underlying fund's investments in emerging market countries and, at times, it may be difficult to value such investments.
• Derivatives Risk. An underlying fund's use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. An underlying fund's use of derivatives could reduce the underlying fund's performance, increase volatility, and could cause the fund to lose more than the initial amount invested. In addition, investments in derivatives may involve leverage, which means a small percentage of assets invested in derivatives can have a disproportionately large impact on an underlying fund. However, these risks are less severe when the underlying fund uses derivatives for hedging rather than to enhance the underlying fund's returns or as a substitute for a position or security.
• ETF Risk. When an underlying fund invests in an ETF, it will bear a proportionate share of the ETF's expenses. In addition, lack of liquidity in the market for an ETF's shares can result in its value being more volatile than the underlying portfolio of securities.
• Credit Risk. An underlying fund may be subject to the risk that a decline in the credit quality of a portfolio investment could cause the underlying fund to lose money or underperform. An underlying fund could lose money if the issuer or guarantor of a portfolio investment fails to make timely principal or interest payments or otherwise honor its obligations.
• Liquidity Risk. An underlying fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or an underlying fund may have to sell them at a loss.
• Securities Lending Risk. An underlying fund may lend its portfolio securities to brokers, dealers, and other financial institutions. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
• Interest Rate Risk. An underlying fund’s investments in fixed income securities are subject to the risk that interest rates rise and fall over time. As with any investment whose yield reflects current interest rates, the underlying fund’s yield will change over time. During periods when interest rates are low, an underlying fund’s yield (and total return) also may be low. Changes in interest rates also may affect an underlying fund's share price: a rise in interest rates could cause the fund's share price to fall. The longer the underlying fund’s duration, the more sensitive to interest rate movements its share price is likely to be. A change in a central bank's monetary policy or improving economic conditions, among other things, may result in an increase in interest rates.
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Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
3. Risk Factors (continued):
• Sampling Index Tracking Risk. To the extent an underlying fund uses a sampling method, the underlying fund will not fully replicate its comparative index and may hold securities not included in the index. As a result, the underlying fund will be subject to the risk that the investment adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. If the underlying fund utilizes a sampling approach, it may not track the return of the index as well as it would if the underlying fund purchased all of the securities in the index.
• Portfolio Turnover Risk. Certain of the underlying funds may buy and sell portfolio securities actively. If they do, their portfolio turnover rate and transaction costs will rise, which may lower the underlying fund's performance and may increase the likelihood of capital gain distributions.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
4. Affiliates and Affiliated Transactions:
Investment Adviser
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 between CSIM and the trust.
For its advisory and administrative services to the funds, CSIM is entitled to receive an annual fee of 0.13%, payable monthly, based on a percentage of each fund's average daily net assets.
Shareholder Servicing
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, Schwab) (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds.
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee of up to 0.25%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds). Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.
Expense Limitation
Although these agreements specify certain fees for these services, CSIM and its affiliates have made an additional agreement with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (expense limitation). The expense limitation as a percentage of average daily net assets is as follows:
Schwab
MarketTrack
All Equity
Portfolio | Schwab
MarketTrack
Growth
Portfolio | Schwab
MarketTrack
Balanced
Portfolio | Schwab
MarketTrack
Conservative
Portfolio |
| 0.50% | 0.50% | 0.50% | 0.50% |
The agreement to limit the funds' total expenses charged is limited to each fund's direct operating expenses and, therefore, does not apply to underlying fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Investments in Affiliates
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 April 30, 2017, each Schwab MarketTrack Portfolio's ownership percentages of other related funds' shares are:
| Underlying Funds | Schwab
MarketTrack
All Equity
Portfolio | Schwab
MarketTrack
Growth
Portfolio | Schwab
MarketTrack
Balanced
Portfolio | Schwab
MarketTrack
Conservative
Portfolio |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 7.3% | 6.2% | 3.1% | 1.0% |
| Schwab Fundamental International Large Company Index Fund | 3.2% | 2.7% | 1.4% | 0.2% |
| Schwab Fundamental International Small Company Index Fund | 5.4% | 4.5% | 2.3% | 1.3% |
| Schwab Fundamental US Large Company Index Fund | 1.6% | 1.7% | 0.9% | 0.3% |
| Schwab Fundamental US Small Company Index Fund | 2.7% | 2.7% | 1.4% | 0.5% |
| Schwab International Index Fund | 2.5% | 2.1% | 1.1% | 0.4% |
| Schwab S&P 500 Index Fund | 0.7% | 0.8% | 0.4% | 0.1% |
| Schwab Small-Cap Index Fund | 3.4% | 3.4% | 1.7% | 0.6% |
| Schwab U.S. Aggregate Bond Index Fund | —% | 10.3% | 16.9% | 13.1% |
| Schwab Variable Share Price Money Fund, Ultra Shares | —% | 3.7% | 2.3% | 0.9% |
Below is a summary of the funds' transactions with their affiliated underlying funds during the period ended April 30, 2017:
Schwab MarketTrack All Equity Portfolio:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 3,607,099 | 215,040 | (147,538) | 3,674,601 | $31,197,363 | | $83,137 | | $602,733 |
| Schwab Fundamental International Large Company Index Fund | 4,235,015 | 265,696 | (121,359) | 4,379,352 | 37,443,463 | | 31,553 | | 1,104,948 |
| Schwab Fundamental International Small Company Index Fund | 2,349,239 | 125,490 | (25,231) | 2,449,498 | 31,769,994 | | 34,567 | | 682,505 |
| Schwab Fundamental US Large Company Index Fund | 4,955,852 | 348,703 | (115,805) | 5,188,750 | 81,982,250 | | 43,349 | | 5,370,032 |
| Schwab Fundamental US Small Company Index Fund | 3,296,472 | 57,923 | (244,688) | 3,109,707 | 45,184,045 | | 238,582 | | 828,294 |
| Schwab International Index Fund | 4,367,482 | 272,493 | (127,688) | 4,512,287 | 85,462,715 | | 205,885 | | 2,456,558 |
| Schwab S&P 500 Index Fund | 5,196,744 | 157,547 | (101,075) | 5,253,216 | 193,738,610 | | 629,932 | | 4,533,815 |
| Schwab Small-Cap Index Fund | 3,669,723 | 195,083 | (195,298) | 3,669,508 | 106,856,081 | | 1,628,838 | | 4,057,310 |
| Total | | | | | $613,634,521 | | $2,895,843 | | $19,636,195 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab MarketTrack Growth Portfolio:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 3,147,610 | 141,894 | (186,162) | 3,103,342 | $26,347,372 | | $90,752 | | $520,844 |
| Schwab Fundamental International Large Company Index Fund | 3,553,251 | 256,614 | (132,530) | 3,677,335 | 31,441,215 | | 42,410 | | 923,510 |
| Schwab Fundamental International Small Company Index Fund | 1,983,160 | 133,699 | (63,441) | 2,053,418 | 26,632,825 | | 56,463 | | 589,821 |
| Schwab Fundamental US Large Company Index Fund | 5,622,155 | 392,207 | (222,966) | 5,791,396 | 91,504,062 | | 192,108 | | 6,039,990 |
| Schwab Fundamental US Small Company Index Fund | 3,341,405 | 58,486 | (211,932) | 3,187,959 | 46,321,048 | | 192,304 | | 836,348 |
| Schwab International Index Fund | 3,753,848 | 311,597 | (245,769) | 3,819,676 | 72,344,664 | | 251,403 | | 2,152,382 |
| Schwab S&P 500 Index Fund | 5,944,233 | 148,751 | (264,052) | 5,828,932 | 214,971,024 | | 2,752,259 | | 5,170,577 |
| Schwab Small-Cap Index Fund | 3,800,083 | 145,263 | (268,414) | 3,676,932 | 107,072,270 | | 2,908,277 | | 4,122,562 |
| Schwab Total Bond Market Fund | 11,044,481 | 694,772 | (11,739,253) | — | — | | 3,746,596 | | 1,212,792 |
| Schwab U.S. Aggregate Bond Index Fund | — | 11,155,514 | — | 11,155,514 | 112,112,918 | | — | | 71,548 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 23,123,393 | 81,288 | — | 23,204,681 | 23,211,643 | | — | | 84,585 |
| Total | | | | | $751,959,041 | | $10,232,572 | | $21,724,959 |
Schwab MarketTrack Balanced Portfolio:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 1,694,518 | 36,669 | (189,829) | 1,541,358 | $13,086,126 | | $122,990 | | $275,748 |
| Schwab Fundamental International Large Company Index Fund | 1,971,662 | 63,403 | (99,324) | 1,935,741 | 16,550,585 | | (2,612) | | 499,619 |
| Schwab Fundamental International Small Company Index Fund | 1,090,979 | 26,898 | (79,944) | 1,037,933 | 13,461,993 | | 112,301 | | 311,475 |
| Schwab Fundamental US Large Company Index Fund | 3,063,991 | 241,169 | (267,872) | 3,037,288 | 47,989,146 | | 174,424 | | 3,207,089 |
| Schwab Fundamental US Small Company Index Fund | 1,831,742 | 59,328 | (216,387) | 1,674,683 | 24,333,149 | | 211,463 | | 440,577 |
| Schwab International Index Fund | 2,068,181 | 89,453 | (219,185) | 1,938,449 | 36,714,227 | | 333,298 | | 1,133,445 |
| Schwab S&P 500 Index Fund | 3,245,716 | 131,685 | (351,523) | 3,025,878 | 111,594,393 | | 5,046,303 | | 2,724,011 |
| Schwab Small-Cap Index Fund | 2,062,757 | 237,356 | (406,250) | 1,893,863 | 55,149,288 | | 1,917,123 | | 2,190,302 |
| Schwab Total Bond Market Fund | 18,701,725 | 624,942 | (19,326,667) | — | — | | 5,554,517 | | 1,982,876 |
| Schwab U.S. Aggregate Bond Index Fund | — | 18,300,832 | — | 18,300,832 | 183,923,363 | | — | | 135,013 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 14,079,080 | 49,493 | — | 14,128,573 | 14,132,812 | | — | | 51,501 |
| Total | | | | | $516,935,082 | | $13,469,807 | | $12,951,656 |
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab MarketTrack Conservative Portfolio:
| Underlying Funds | Balance
of Shares
Held at
10/31/16 | Gross
Purchases | Gross
Sales | Balance
of Shares
Held at
04/30/17 | Market
Value at
04/30/17 | | Realized
Gains (Losses)
11/01/16
to 04/30/17 | | Distributions
Received*
11/01/16
to 04/30/17 |
| Schwab Fundamental Emerging Markets Large Company Index Fund | 509,672 | 82,649 | (77,169) | 515,152 | $4,373,636 | | $19,375 | | $84,096 |
| Schwab Fundamental International Large Company Index Fund | 593,139 | 19,074 | (16,476) | 595,737 | 5,093,549 | | (2,560) | | 150,302 |
| Schwab Fundamental International Small Company Index Fund | 336,405 | 8,294 | (8,591) | 336,108 | 4,359,315 | | 750 | | 96,044 |
| Schwab Fundamental US Large Company Index Fund | 940,789 | 145,212 | (72,599) | 1,013,402 | 16,011,758 | | 67,554 | | 955,530 |
| Schwab Fundamental US Small Company Index Fund | 577,750 | 54,057 | (85,014) | 546,793 | 7,944,908 | | 50,689 | | 134,980 |
| Schwab International Index Fund | 628,667 | 80,620 | (42,767) | 666,520 | 12,623,886 | | 10,705 | | 343,504 |
| Schwab S&P 500 Index Fund | 1,001,572 | 83,772 | (99,583) | 985,761 | 36,354,856 | | 1,083,185 | | 830,700 |
| Schwab Small-Cap Index Fund | 637,089 | 89,827 | (110,816) | 616,100 | 17,940,822 | | 597,609 | | 654,299 |
| Schwab Total Bond Market Fund | 13,621,970 | 336,637 | (13,958,607) | — | — | | 3,596,512 | | 1,426,362 |
| Schwab U.S. Aggregate Bond Index Fund | — | 14,144,802 | — | 14,144,802 | 142,155,257 | | — | | 111,814 |
| Schwab Variable Share Price Money Fund, Ultra Shares | 5,505,587 | 19,354 | — | 5,524,941 | 5,526,599 | | — | | 20,139 |
| Total | | | | | $252,384,586 | | $5,423,819 | | $4,807,770 |
| * | Distributions received include distributions from net investment income and capital gains, if any, from the underlying funds. |
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex (for definition refer to Trustees and Officers section). All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review by the Board. The funds had no interfund borrowing or lending activity during the period.
5. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its affiliates. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted on each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
6. Borrowing from Banks:
During the period, the funds were participants with other U.S. registered investment companies managed by CSIM in a joint, syndicated, committed $555 million line of credit (the Credit Facility). Under the terms of the Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund paid a commitment fee of 0.15% per annum on its proportionate share of the unused portion of the Credit Facility. There were no borrowings from the line of credit during the period.
The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
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Schwab MarketTrack Portfolios
Financial Notes, unaudited (continued)
7. Purchases and Sales/Maturities of Investment Securities:
For the period ended April 30, 2017, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
| | Purchases
of Securities | Sales/Maturities
of Securities |
| Schwab MarketTrack All Equity Portfolio | $27,156,195 | $19,290,000 |
| Schwab MarketTrack Growth Portfolio | 145,089,932 | 142,785,856 |
| Schwab MarketTrack Balanced Portfolio | 208,344,785 | 221,420,325 |
| Schwab MarketTrack Conservative Portfolio | 165,405,691 | 151,797,453 |
The purchases and sales of securities include transactions where certain funds redeemed in kind their positions in the Schwab Total Bond Market Fund and made purchases in kind into the Schwab U.S. Aggregate Bond Index Fund. In the transaction, each of the Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio and Schwab MarketTrack Conservative Portfolio effected an in-kind redemption from the Schwab Total Bond Market Fund and simultaneously engaged in an in-kind purchase, using the securities and cash received, with Schwab U.S. Aggregate Bond Index Fund. All in-kind redemptions and purchases were effected pursuant to the funds’ In-Kind Transactions Policy and Procedures adopted by the Board of Trustees. The funds realized gains (losses) in selling the Schwab Total Bond Market Fund and those amounts are disclosed in the Affiliates and Affiliated Transactions in financial note 4.
8. Redemption Fee:
Prior to February 28, 2017, the funds charged a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds on the Statement of Changes in Net Assets. Effective February 28, 2017, the funds no longer charge redemption fees. The redemption fees charged during the current and prior periods were as follows:
| | Current Period
(11/1/16-4/30/17) | Prior Period
(11/1/15-10/31/16) |
| Schwab MarketTrack All Equity Portfolio | $2,773 | $5,050 |
| Schwab MarketTrack Growth Portfolio | 2,553 | 8,705 |
| Schwab MarketTrack Balanced Portfolio | 9,511 | 11,924 |
| Schwab MarketTrack Conservative Portfolio | 4,202 | 2,739 |
9. Federal Income Taxes:
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of October 31, 2016, the funds had no capital loss carryforwards.
As of October 31, 2016, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2016, the funds did not incur any interest or penalties.
10. Recent Regulatory Development:
In October 2016, the SEC adopted new rules and amended existing rules (together, final rules) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the funds' financial statements and related disclosures.
11. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
Schwab MarketTrack Portfolios | Semiannual Report
Schwab MarketTrack Portfolios
Trustees and Officers
The tables below give information about the trustees and officers of Schwab Capital Trust, which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 110 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
| 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. | 110 | 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 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). | 110 | 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 – Apr. 2012). | 110 | None |
David L. Mahoney
1954
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016) | Private Investor. | 110 | Director, Symantec Corporation (2003 – present)
Director, Corcept Therapeutics Incorporated (2004 – present)
Director, Adamas Pharmaceuticals, Inc. (2009 – present) |
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| 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 |
Kiran M. Patel
1948
Trustee
(Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus 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). | 110 | Director, KLA-Tencor Corporation (2008 – present) |
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). | 110 | 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 and Laudus 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). | 110 | 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 since 2010; Schwab Strategic Trust since 2016) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 – present). | 110 | 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 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). | 110 | Board Member and Chairman of the Audit Committee, Ionis Pharmaceuticals (1994 – present)
Lead Independent Director and Chair of Audit Committee, OUTFRONT Media Inc. (2014 – present) |
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| 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 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); Director, Schwab Holdings, Inc. (May 2008 – present); and Director, Charles Schwab Investment Management, Inc. (July 2016 – present). | 110 | Director, The Charles Schwab Corporation (2008 – present) |
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) (Mar. 2007 – Aug. 2010). | 110 | 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 (July 2015 – present), Chief Financial Officer (July 2015 – May 2017), Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director, Charles Schwab & Co., Inc. (May 2007 – present); Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – May 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc. | 110 | 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 A. 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 and Laudus 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) (Mar. 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 and Laudus 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). |
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| Officers of the Trust (continued) |
Name, Year of Birth, and Position(s) with the trust
(Terms of office, and length of Time Served3) | Principal Occupations During the Past Five Years |
George Pereira
1964
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 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 (Apr. 2005 – present). |
Omar Aguilar
1970
Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies
(Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies, Charles Schwab Investment Management, Inc. (Apr. 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 – Apr. 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 and Laudus Trust since 2011) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (Apr. 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 (Apr. 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 and Laudus Trust since 2011) | Senior Vice President (Sept. 2011 – present), Vice President (Mar. 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 (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (Apr. 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 and Laudus 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. |
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Schwab MarketTrack Portfolios
All Equity Composite Index A custom blended index developed by CSIM based on a comparable portfolio asset allocation. Effective December 1, 2014, the index is composed of 31.33% S&P 500 Index, 17.33% Russell 2000 Index, 13.50% Russell RAFI US Large Company Index, 7.50% Russell RAFI US Small Company Index, 13.83% MSCI EAFE Index (Net), 6% Russell RAFI Developed ex US Large Company Index (Net), 5% Russell RAFI Developed ex US Small Company Index (Net), 5% Russell RAFI Emerging Markets Large Company Index (Net), and 0.5% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. From March 1, 2014 to December 1, 2014, the index was comprised of 45% S&P 500 Index, 25% Russell 2000 Index and 30% MSCI EAFE Index (Net). On March 1, 2014, the combination of the S&P 500 Index and Russell 2000 Index replaced the Dow Jones U.S. Total Stock Market Index in the custom index. Prior to March 1, 2014, the index was comprised of 70% Dow Jones U.S. Total Stock Market Index and 30% MSCI EAFE Index (Net). The components that make up the composite may vary over time.
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Balanced Composite Index A custom blended index developed by CSIM based on a comparable portfolio asset allocation. Effective December 1, 2014 the Balanced Composite Index is composed of 21% S&P 500 Index, 10.50% Russell 2000 Index, 9% Russell RAFI US Large Company Index, 4.50% Russell RAFI US Small Company Index, 7% MSCI EAFE Index (Net), 3% Russell RAFI Developed ex US Large Company Index (Net), 2.50% Russell RAFI Developed ex US Small Company Index (Net), 2.50% Russell RAFI Emerging Markets Large Company Index (Net), 35% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. From March 1, 2014 to December 1, 2014, the index was comprised of 30% S&P 500 Index, 15% Russell 2000 Index, 15% MSCI EAFE Index (Net), 35% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index. On March 1, 2014, the combination of the S&P 500 Index and Russell 2000 Index replaced the Dow Jones U.S. Total Stock Market Index in the custom index. Prior to March 1, 2014, the index was comprised of 45% Dow Jones U.S. Total Stock Market Index, 15% MSCI EAFE Index (Net), 35% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index. The components that make up the composite may vary over time.
Bloomberg Barclays U.S. Aggregate Bond Index An index that represents securities that are SEC registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. The index excludes certain types of securities, including state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds.
Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $250 million or more of outstanding face value. It excludes zero-coupon STRIPS.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the capital gain or loss is considered unrealized appreciation or depreciation.
Conservative Composite Index A custom blended index developed by CSIM based on a comparable portfolio asset allocation. Effective December 1, 2014, the index is calculated using the following portion allocations: 14% S&P 500 Index, 7% Russell 2000 Index, 6% Russell RAFI US Large Company Index, 3% Russell RAFI US Small Company Index, 4.6% MSCI EAFE Index (Net), 2% Russell RAFI Developed ex US Large Company Index (Net), 1.7% Russell RAFI Developed ex US Small Company Index (Net), 1.7% Russell RAFI Emerging Markets Large Company Index (Net), 55% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index. From March 1, 2014 to December 1, 2014, the index was comprised of 20% S&P 500 Index, 10% Russell 2000 Index, 10% MSCI EAFE Index (Net), 55% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index. On March 1, 2014, the combination of the S&P 500 Index and Russell 2000 Index replaced the Dow Jones U.S. Total Stock Market Index in the custom index. Prior to March 1, 2014, the index was comprised of 30% Dow Jones U.S. Total Stock Market Index, 10% MSCI EAFE Index (Net), 55% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills 1 – 3 Month Index. The components that make up the composite may vary over time.
Dow Jones U.S. Total Stock Market Index An index that measures the performance of all publicly traded stocks of companies headquartered in the U.S. for which pricing data is readily available - currently more than 3,800 stocks. The index is a float adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.
Growth Composite Index A custom blended index developed by CSIM based on a comparable portfolio asset allocation. Effective December 1, 2014 the Growth Composite Index is composed of 28% S&P 500 Index, 14% Russell 2000 Index, 12% Russell RAFI US Large Company Index, 6% Russell RAFI US Small Company Index, 9.33% MSCI EAFE Index (Net), 4% Russell RAFI Developed ex US Large Company Index (Net),
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3.33% Russell RAFI Developed ex US Small Company Index (Net), 3.33% Russell RAFI Emerging Markets Large Company Index (Net), 15% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills 1-3 Month Index. From March 1, 2014 to December 1, 2014, the index was comprised of 40% S&P 500 Index, 20% Russell 2000 Index, 20% MSCI EAFE Index (Net), 15% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills: 1 – 3 Months Index. On March 1, 2014, the combination of the S&P 500 Index and Russell 2000 Index replaced the Dow Jones U.S. Total Stock Market Index in the custom index. Prior to March 1, 2014 the index was comprised of 60% Dow Jones U.S. Total Stock Market Index, 20% MSCI EAFE (Net) Index, 15% Bloomberg Barclays U.S. Aggregate Bond Index, and 5% Bloomberg Barclays U.S. Treasury Bills: 1 – 3 Months Index. The components that make up the composite may vary over time.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell RAFI Developed ex US Large Company Index (Net) An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Developed ex US Small Company Index (Net) An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Emerging Markets Large Company Index (Net) An index that ranks companies in the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Emerging Markets Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Emerging Markets Index measures the performance of the investable securities in emerging countries globally.
Russell RAFI US Large Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
Russell RAFI US Small Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.
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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Charles Schwab Investment Management
As one of the nation’s largest asset managers, our goal is to provide investors with a diverse selection of foundational products that aim to deliver consistent performance at a competitive cost. The list below shows all currently available Schwab Funds.
Investors should carefully consider information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-877-824-5615 for a prospectus and brochure for any Schwab Fund. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.
Proxy Voting Policies, Procedures and Results
A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab Funds’ website at www.csimfunds.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds at 1-877-824-5615.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.csimfunds.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.
Stock Funds
Schwab Core Equity Fund™
Schwab Dividend Equity Fund™
Schwab Large-Cap Growth Fund™
Schwab Small-Cap Equity Fund™
Schwab Hedged Equity 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®
Asset Allocation Funds
Schwab Balanced Fund™
Schwab MarketTrack All Equity Portfolio™
Schwab MarketTrack Growth Portfolio™
Schwab MarketTrack Balanced Portfolio™
Schwab MarketTrack Conservative Portfolio™
Schwab Target Funds
Schwab Target Index Funds
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fund™
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™
Schwab® U.S. Aggregate Bond Index Fund
Schwab® Short-Term Bond Index Fund
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Some are 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®.
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
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| 1 | You could lose money by investing in a money market fund. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The money market fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. |
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Item 2: Code of Ethics.
Not applicable to this semi-annual report.
Item 3: Audit Committee Financial Expert.
Not applicable to this semi-annual report.
Item 4: Principal Accountant Fees and Services.
Not applicable to this semi-annual report.
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
Except as noted below, the condensed portfolio holdings are included as part of the report to shareholders filed under Item 1 of this Form. The schedules of investments for the Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small Company Index Fund, Schwab Fundamental Emerging Markets Large Company Index Fund, Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund are filed under this Item.
Schwab S&P 500 Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at 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 fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.3% | Common Stock | 14,080,322,208 | 26,386,267,205 |
| 0.0% | Other Investment Company | 4,719,058 | 4,719,058 |
| 1.2% | Short-Term Investments | 313,506,445 | 313,506,445 |
| 100.5% | Total Investments | 14,398,547,711 | 26,704,492,708 |
| (0.5%) | Other Assets and Liabilities, Net | | (125,550,848) |
| 100.0% | Net Assets | | 26,578,941,860 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.3% of net assets |
| |
| Automobiles & Components 0.7% |
| BorgWarner, Inc. | 261,400 | 11,051,992 |
| Delphi Automotive plc | 352,900 | 28,373,160 |
| Ford Motor Co. | 5,012,997 | 57,499,076 |
| General Motors Co. | 1,742,800 | 60,370,592 |
| Harley-Davidson, Inc. | 223,470 | 12,695,331 |
| The Goodyear Tire & Rubber Co. | 344,936 | 12,497,031 |
| | | 182,487,182 |
| |
| Banks 6.3% |
| Bank of America Corp. | 12,922,211 | 301,604,405 |
| BB&T Corp. | 1,028,826 | 44,424,707 |
| Citigroup, Inc. | 3,573,847 | 211,285,835 |
| Citizens Financial Group, Inc. | 656,200 | 24,089,102 |
| Comerica, Inc. | 229,070 | 16,195,249 |
| Fifth Third Bancorp | 940,929 | 22,986,895 |
| Huntington Bancshares, Inc. | 1,354,493 | 17,418,780 |
| JPMorgan Chase & Co. | 4,604,231 | 400,568,097 |
| KeyCorp | 1,401,398 | 25,561,499 |
| M&T Bank Corp. | 200,598 | 31,174,935 |
| People's United Financial, Inc. | 406,600 | 7,103,302 |
| Regions Financial Corp. | 1,567,445 | 21,552,369 |
| SunTrust Banks, Inc. | 629,516 | 35,762,804 |
| The PNC Financial Services Group, Inc. | 626,878 | 75,068,640 |
| U.S. Bancorp | 2,061,728 | 105,725,412 |
| Wells Fargo & Co. | 5,805,009 | 312,541,685 |
| Zions Bancorp | 250,998 | 10,047,450 |
| | | 1,663,111,166 |
| |
| Capital Goods 7.3% |
| 3M Co. | 771,719 | 151,125,732 |
| Acuity Brands, Inc. | 60,500 | 10,654,050 |
| Allegion plc | 131,733 | 10,359,483 |
| AMETEK, Inc. | 289,400 | 16,553,680 |
| Arconic, Inc. | 576,054 | 15,743,556 |
| Caterpillar, Inc. | 754,162 | 77,120,606 |
| Cummins, Inc. | 195,262 | 29,472,846 |
| Deere & Co. | 374,386 | 41,785,222 |
| Dover Corp. | 198,670 | 15,671,090 |
| Eaton Corp. plc | 580,738 | 43,927,022 |
| Emerson Electric Co. | 836,915 | 50,449,236 |
| Fastenal Co. | 384,498 | 17,179,371 |
| Flowserve Corp. | 175,000 | 8,902,250 |
| Security | Number
of Shares | Value ($) |
| Fluor Corp. | 174,382 | 8,949,284 |
| Fortive Corp. | 384,687 | 24,335,300 |
| Fortune Brands Home & Security, Inc. | 205,600 | 13,104,944 |
| General Dynamics Corp. | 366,760 | 71,074,420 |
| General Electric Co. | 11,248,057 | 326,081,172 |
| Honeywell International, Inc. | 977,829 | 128,232,495 |
| Illinois Tool Works, Inc. | 399,036 | 55,102,881 |
| Ingersoll-Rand plc | 342,800 | 30,423,500 |
| Jacobs Engineering Group, Inc. | 160,934 | 8,838,495 |
| Johnson Controls International plc | 1,204,302 | 50,062,834 |
| L3 Technologies, Inc. | 97,283 | 16,710,301 |
| Lockheed Martin Corp. | 320,191 | 86,275,465 |
| Masco Corp. | 419,488 | 15,529,446 |
| Northrop Grumman Corp. | 223,467 | 54,963,943 |
| PACCAR, Inc. | 450,350 | 30,051,856 |
| Parker-Hannifin Corp. | 172,736 | 27,775,949 |
| Pentair plc | 208,982 | 13,481,429 |
| Quanta Services, Inc. * | 179,900 | 6,375,656 |
| Raytheon Co. | 376,388 | 58,419,182 |
| Rockwell Automation, Inc. | 168,521 | 26,516,779 |
| Rockwell Collins, Inc. | 208,605 | 21,713,694 |
| Roper Technologies, Inc. | 129,900 | 28,409,130 |
| Snap-on, Inc. | 72,782 | 12,193,168 |
| Stanley Black & Decker, Inc. | 200,081 | 27,241,028 |
| Textron, Inc. | 341,504 | 15,934,577 |
| The Boeing Co. | 735,554 | 135,952,446 |
| TransDigm Group, Inc. | 66,300 | 16,358,199 |
| United Rentals, Inc. * | 110,100 | 12,073,566 |
| United Technologies Corp. | 967,258 | 115,094,029 |
| W.W. Grainger, Inc. | 69,927 | 13,474,933 |
| Xylem, Inc. | 227,400 | 11,690,634 |
| | | 1,951,384,879 |
| |
| Commercial & Professional Services 0.5% |
| Cintas Corp. | 113,876 | 13,946,394 |
| Equifax, Inc. | 155,861 | 21,089,552 |
| Nielsen Holdings plc | 449,500 | 18,487,935 |
| Republic Services, Inc. | 289,334 | 18,225,149 |
| Robert Half International, Inc. | 156,742 | 7,217,969 |
| Stericycle, Inc. * | 114,100 | 9,737,294 |
| Verisk Analytics, Inc. * | 199,900 | 16,553,719 |
| Waste Management, Inc. | 515,216 | 37,497,420 |
| | | 142,755,432 |
| |
| Consumer Durables & Apparel 1.2% |
| Coach, Inc. | 361,928 | 14,256,344 |
| D.R. Horton, Inc. | 422,016 | 13,880,106 |
| Garmin Ltd. | 155,100 | 7,885,284 |
| Hanesbrands, Inc. | 481,600 | 10,503,696 |
| Hasbro, Inc. | 139,417 | 13,817,619 |
| Leggett & Platt, Inc. | 182,994 | 9,614,505 |
| Lennar Corp., Class A | 248,318 | 12,540,059 |
| Mattel, Inc. | 415,494 | 9,315,375 |
| Michael Kors Holdings Ltd. * | 212,100 | 7,917,693 |
| Mohawk Industries, Inc. * | 83,800 | 19,675,402 |
| Newell Brands, Inc. | 619,250 | 29,562,995 |
| NIKE, Inc., Class B | 1,716,948 | 95,136,089 |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| PulteGroup, Inc. | 370,186 | 8,392,116 |
| PVH Corp. | 99,900 | 10,092,897 |
| Ralph Lauren Corp. | 69,126 | 5,579,851 |
| Under Armour, Inc., Class A *(b) | 224,300 | 4,820,207 |
| Under Armour, Inc., Class C * | 225,892 | 4,384,564 |
| VF Corp. | 433,364 | 23,674,675 |
| Whirlpool Corp. | 96,622 | 17,940,773 |
| | | 318,990,250 |
| |
| Consumer Services 1.7% |
| Carnival Corp. | 529,221 | 32,689,981 |
| Chipotle Mexican Grill, Inc. * | 36,959 | 17,535,937 |
| Darden Restaurants, Inc. | 162,248 | 13,821,907 |
| H&R Block, Inc. | 284,905 | 7,062,795 |
| Marriott International, Inc., Class A | 404,726 | 38,214,229 |
| McDonald's Corp. | 1,055,738 | 147,729,418 |
| Royal Caribbean Cruises Ltd. | 212,600 | 22,663,160 |
| Starbucks Corp. | 1,886,024 | 113,274,601 |
| Wyndham Worldwide Corp. | 136,364 | 12,996,853 |
| Wynn Resorts Ltd. | 106,200 | 13,063,662 |
| Yum! Brands, Inc. | 425,085 | 27,949,339 |
| | | 447,001,882 |
| |
| Diversified Financials 5.1% |
| Affiliated Managers Group, Inc. | 73,800 | 12,220,542 |
| American Express Co. | 984,741 | 78,040,724 |
| Ameriprise Financial, Inc. | 198,514 | 25,380,015 |
| Berkshire Hathaway, Inc., Class B * | 2,443,530 | 403,695,591 |
| BlackRock, Inc. | 156,600 | 60,223,662 |
| Capital One Financial Corp. | 620,574 | 49,881,738 |
| CBOE Holdings, Inc. | 115,000 | 9,477,150 |
| CME Group, Inc. | 437,885 | 50,877,858 |
| Discover Financial Services | 487,773 | 30,529,712 |
| E*TRADE Financial Corp. * | 354,519 | 12,248,632 |
| Franklin Resources, Inc. | 452,105 | 19,490,247 |
| Intercontinental Exchange, Inc. | 773,230 | 46,548,446 |
| Invesco Ltd. | 537,247 | 17,696,916 |
| Leucadia National Corp. | 427,851 | 10,863,137 |
| Moody's Corp. | 213,929 | 25,312,079 |
| Morgan Stanley | 1,845,454 | 80,037,340 |
| Nasdaq, Inc. | 142,400 | 9,807,088 |
| Navient Corp. | 373,300 | 5,674,160 |
| Northern Trust Corp. | 284,118 | 25,570,620 |
| Raymond James Financial, Inc. | 163,000 | 12,146,760 |
| S&P Global, Inc. | 331,167 | 44,439,300 |
| State Street Corp. | 465,826 | 39,082,802 |
| Synchrony Financial | 1,010,499 | 28,091,872 |
| T. Rowe Price Group, Inc. | 321,979 | 22,825,091 |
| The Bank of New York Mellon Corp. | 1,334,273 | 62,790,887 |
| The Charles Schwab Corp. (a) | 1,573,881 | 61,145,277 |
| The Goldman Sachs Group, Inc. | 479,969 | 107,417,062 |
| | | 1,351,514,708 |
| |
| Energy 6.3% |
| Anadarko Petroleum Corp. | 718,209 | 40,952,277 |
| Apache Corp. | 494,006 | 24,028,452 |
| Baker Hughes, Inc. | 558,563 | 33,161,885 |
| Cabot Oil & Gas Corp. | 614,700 | 14,285,628 |
| Chesapeake Energy Corp. * | 968,366 | 5,093,605 |
| Chevron Corp. | 2,446,134 | 261,002,498 |
| Cimarex Energy Co. | 119,500 | 13,943,260 |
| Concho Resources, Inc. * | 194,777 | 24,670,455 |
| ConocoPhillips | 1,602,990 | 76,799,251 |
| Devon Energy Corp. | 667,258 | 26,350,018 |
| EOG Resources, Inc. | 744,312 | 68,848,860 |
| Security | Number
of Shares | Value ($) |
| EQT Corp. | 226,300 | 13,157,082 |
| Exxon Mobil Corp. | 5,352,341 | 437,018,643 |
| Halliburton Co. | 1,100,368 | 50,484,884 |
| Helmerich & Payne, Inc. | 140,100 | 8,495,664 |
| Hess Corp. | 352,140 | 17,194,996 |
| Kinder Morgan, Inc. | 2,473,644 | 51,031,276 |
| Marathon Oil Corp. | 1,069,452 | 15,902,751 |
| Marathon Petroleum Corp. | 686,052 | 34,947,489 |
| Murphy Oil Corp. | 184,892 | 4,840,473 |
| National Oilwell Varco, Inc. | 487,624 | 17,052,211 |
| Newfield Exploration Co. * | 244,700 | 8,471,514 |
| Noble Energy, Inc. | 569,468 | 18,410,900 |
| Occidental Petroleum Corp. | 973,650 | 59,918,421 |
| ONEOK, Inc. | 274,900 | 14,462,489 |
| Phillips 66 | 559,795 | 44,537,290 |
| Pioneer Natural Resources Co. | 222,300 | 38,455,677 |
| Range Resources Corp. | 230,100 | 6,095,349 |
| Schlumberger Ltd. | 1,804,028 | 130,954,393 |
| TechnipFMC plc * | 615,400 | 18,542,002 |
| Tesoro Corp. | 154,607 | 12,323,724 |
| The Williams Cos., Inc. | 1,052,198 | 32,228,825 |
| Transocean Ltd. * | 506,200 | 5,583,386 |
| Valero Energy Corp. | 579,340 | 37,431,157 |
| | | 1,666,676,785 |
| |
| Food & Staples Retailing 2.0% |
| Costco Wholesale Corp. | 561,892 | 99,747,068 |
| CVS Health Corp. | 1,315,051 | 108,412,804 |
| Sysco Corp. | 646,257 | 34,167,608 |
| The Kroger Co. | 1,173,794 | 34,802,992 |
| Wal-Mart Stores, Inc. | 1,944,402 | 146,180,142 |
| Walgreens Boots Alliance, Inc. | 1,101,711 | 95,342,070 |
| Whole Foods Market, Inc. | 421,432 | 15,327,482 |
| | | 533,980,166 |
| |
| Food, Beverage & Tobacco 5.3% |
| Altria Group, Inc. | 2,500,391 | 179,478,066 |
| Archer-Daniels-Midland Co. | 724,899 | 33,164,129 |
| Brown-Forman Corp., Class B | 222,884 | 10,546,871 |
| Campbell Soup Co. | 239,711 | 13,792,971 |
| ConAgra Brands, Inc. | 538,249 | 20,873,296 |
| Constellation Brands, Inc., Class A | 219,065 | 37,797,475 |
| Dr Pepper Snapple Group, Inc. | 231,700 | 21,235,305 |
| General Mills, Inc. | 735,480 | 42,297,455 |
| Hormel Foods Corp. | 363,400 | 12,748,072 |
| Kellogg Co. | 324,934 | 23,070,314 |
| McCormick & Co., Inc. - Non Voting Shares | 142,802 | 14,265,920 |
| Mead Johnson Nutrition Co. | 237,800 | 21,097,616 |
| Molson Coors Brewing Co., Class B | 238,130 | 22,834,286 |
| Mondelez International, Inc., Class A | 1,961,854 | 88,342,286 |
| Monster Beverage Corp. * | 522,600 | 23,715,588 |
| PepsiCo, Inc. | 1,844,563 | 208,952,097 |
| Philip Morris International, Inc. | 2,001,646 | 221,862,443 |
| Reynolds American, Inc. | 1,070,550 | 69,050,475 |
| The Coca-Cola Co. | 4,989,656 | 215,303,656 |
| The Hershey Co. | 182,328 | 19,727,889 |
| The JM Smucker Co. | 150,275 | 19,042,848 |
| The Kraft Heinz Co. | 762,718 | 68,942,080 |
| Tyson Foods, Inc., Class A | 370,090 | 23,781,983 |
| | | 1,411,923,121 |
| |
| Health Care Equipment & Services 5.4% |
| Abbott Laboratories | 2,215,194 | 96,671,066 |
| Aetna, Inc. | 428,475 | 57,874,118 |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| AmerisourceBergen Corp. | 218,146 | 17,898,879 |
| Anthem, Inc. | 341,429 | 60,736,805 |
| Baxter International, Inc. | 625,189 | 34,810,524 |
| Becton, Dickinson & Co. | 275,198 | 51,453,770 |
| Boston Scientific Corp. * | 1,728,574 | 45,599,782 |
| C.R. Bard, Inc. | 94,273 | 28,987,062 |
| Cardinal Health, Inc. | 407,233 | 29,561,043 |
| Centene Corp. * | 216,900 | 16,137,360 |
| Cerner Corp. * | 386,900 | 25,051,775 |
| Cigna Corp. | 327,008 | 51,134,241 |
| Danaher Corp. | 789,374 | 65,778,535 |
| DaVita, Inc. * | 204,000 | 14,078,040 |
| DENTSPLY SIRONA, Inc. | 290,400 | 18,364,896 |
| Edwards Lifesciences Corp. * | 272,900 | 29,928,943 |
| Envision Healthcare Corp. * | 145,000 | 8,124,350 |
| Express Scripts Holding Co. * | 770,295 | 47,249,895 |
| HCA Holdings, Inc. * | 373,600 | 31,460,856 |
| Henry Schein, Inc. * | 104,900 | 18,231,620 |
| Hologic, Inc. * | 367,800 | 16,606,170 |
| Humana, Inc. | 194,303 | 43,131,380 |
| IDEXX Laboratories, Inc. * | 115,300 | 19,339,269 |
| Intuitive Surgical, Inc. * | 49,031 | 40,983,542 |
| Laboratory Corp. of America Holdings * | 133,991 | 18,778,839 |
| McKesson Corp. | 275,575 | 38,109,267 |
| Medtronic plc | 1,766,576 | 146,784,800 |
| Patterson Cos., Inc. | 104,447 | 4,646,847 |
| Quest Diagnostics, Inc. | 171,680 | 18,113,957 |
| Stryker Corp. | 393,240 | 53,626,139 |
| The Cooper Cos., Inc. | 60,000 | 12,019,800 |
| UnitedHealth Group, Inc. | 1,239,610 | 216,782,997 |
| Universal Health Services, Inc., Class B | 119,100 | 14,382,516 |
| Varian Medical Systems, Inc. * | 123,906 | 11,243,230 |
| Zimmer Biomet Holdings, Inc. | 255,923 | 30,621,187 |
| | | 1,434,303,500 |
| |
| Household & Personal Products 1.9% |
| Church & Dwight Co., Inc. | 324,000 | 16,047,720 |
| Colgate-Palmolive Co. | 1,133,594 | 81,664,112 |
| Coty, Inc., Class A | 580,000 | 10,353,000 |
| Kimberly-Clark Corp. | 463,295 | 60,112,526 |
| The Clorox Co. | 168,057 | 22,467,540 |
| The Estee Lauder Cos., Inc., Class A | 280,652 | 24,456,015 |
| The Procter & Gamble Co. | 3,297,190 | 287,943,603 |
| | | 503,044,516 |
| |
| Insurance 2.7% |
| Aflac, Inc. | 525,473 | 39,347,418 |
| American International Group, Inc. | 1,200,454 | 73,119,653 |
| Aon plc | 334,150 | 40,044,536 |
| Arthur J. Gallagher & Co. | 238,300 | 13,299,523 |
| Assurant, Inc. | 74,246 | 7,145,435 |
| Chubb Ltd. | 598,665 | 82,166,771 |
| Cincinnati Financial Corp. | 192,903 | 13,906,377 |
| Lincoln National Corp. | 294,671 | 19,427,659 |
| Loews Corp. | 352,716 | 16,443,620 |
| Marsh & McLennan Cos., Inc. | 660,979 | 48,998,373 |
| MetLife, Inc. | 1,395,977 | 72,325,568 |
| Principal Financial Group, Inc. | 337,567 | 21,985,739 |
| Prudential Financial, Inc. | 553,831 | 59,276,532 |
| The Allstate Corp. | 468,310 | 38,068,920 |
| The Hartford Financial Services Group, Inc. | 472,795 | 22,864,366 |
| The Progressive Corp. | 756,820 | 30,060,891 |
| The Travelers Cos., Inc. | 365,060 | 44,413,200 |
| Torchmark Corp. | 143,266 | 10,989,935 |
| Unum Group | 303,840 | 14,076,907 |
| Security | Number
of Shares | Value ($) |
| Willis Towers Watson plc | 166,225 | 22,044,760 |
| XL Group Ltd. | 328,999 | 13,768,608 |
| | | 703,774,791 |
| |
| Materials 2.8% |
| Air Products & Chemicals, Inc. | 276,001 | 38,778,141 |
| Albemarle Corp. | 148,846 | 16,210,818 |
| Avery Dennison Corp. | 119,776 | 9,966,561 |
| Ball Corp. | 227,464 | 17,489,707 |
| CF Industries Holdings, Inc. | 297,325 | 7,950,471 |
| E.I. du Pont de Nemours & Co. | 1,108,104 | 88,371,294 |
| Eastman Chemical Co. | 188,616 | 15,042,126 |
| Ecolab, Inc. | 340,828 | 43,997,487 |
| FMC Corp. | 179,900 | 13,174,077 |
| Freeport-McMoRan, Inc. * | 1,705,440 | 21,744,360 |
| International Flavors & Fragrances, Inc. | 98,043 | 13,587,779 |
| International Paper Co. | 541,189 | 29,207,970 |
| LyondellBasell Industries N.V., Class A | 426,200 | 36,124,712 |
| Martin Marietta Materials, Inc. | 80,300 | 17,681,257 |
| Monsanto Co. | 561,300 | 65,453,193 |
| Newmont Mining Corp. | 673,046 | 22,755,685 |
| Nucor Corp. | 422,300 | 25,899,659 |
| PPG Industries, Inc. | 336,896 | 37,004,657 |
| Praxair, Inc. | 368,579 | 46,065,003 |
| Sealed Air Corp. | 236,068 | 10,391,713 |
| The Dow Chemical Co. | 1,431,035 | 89,868,998 |
| The Mosaic Co. | 434,300 | 11,695,699 |
| The Sherwin-Williams Co. | 103,736 | 34,718,364 |
| Vulcan Materials Co. | 173,271 | 20,944,998 |
| WestRock Co. | 334,889 | 17,936,655 |
| | | 752,061,384 |
| |
| Media 3.2% |
| CBS Corp., Class B - Non Voting Shares | 491,336 | 32,703,324 |
| Charter Communications, Inc., Class A * | 278,600 | 96,161,576 |
| Comcast Corp., Class A | 6,099,328 | 239,032,664 |
| Discovery Communications, Inc., Class A * | 159,800 | 4,599,044 |
| Discovery Communications, Inc., Class C * | 310,500 | 8,687,790 |
| DISH Network Corp., Class A * | 285,800 | 18,416,952 |
| News Corp., Class A | 443,000 | 5,634,960 |
| News Corp., Class B | 205,200 | 2,667,600 |
| Omnicom Group, Inc. | 293,847 | 24,130,716 |
| Scripps Networks Interactive, Inc., Class A | 116,593 | 8,711,829 |
| TEGNA, Inc. | 270,314 | 6,887,601 |
| The Interpublic Group of Cos., Inc. | 506,365 | 11,935,023 |
| The Walt Disney Co. | 1,874,783 | 216,724,915 |
| Time Warner, Inc. | 997,974 | 99,068,879 |
| Twenty-First Century Fox, Inc., Class A | 1,347,801 | 41,161,842 |
| Twenty-First Century Fox, Inc., Class B | 652,700 | 19,489,622 |
| Viacom, Inc., Class B | 448,853 | 19,103,184 |
| | | 855,117,521 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 8.5% |
| AbbVie, Inc. | 2,053,086 | 135,380,491 |
| Agilent Technologies, Inc. | 406,066 | 22,353,933 |
| Alexion Pharmaceuticals, Inc. * | 294,300 | 37,605,654 |
| Allergan plc | 434,268 | 105,900,595 |
| Amgen, Inc. | 950,859 | 155,294,292 |
| Biogen, Inc. * | 276,691 | 75,041,366 |
| Bristol-Myers Squibb Co. | 2,165,564 | 121,379,862 |
| Celgene Corp. * | 1,007,126 | 124,933,980 |
| Eli Lilly & Co. | 1,258,123 | 103,241,573 |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Gilead Sciences, Inc. | 1,682,950 | 115,366,223 |
| Illumina, Inc. * | 189,500 | 35,030,970 |
| Incyte Corp. * | 220,000 | 27,341,600 |
| Johnson & Johnson | 3,494,325 | 431,444,308 |
| Mallinckrodt plc * | 134,700 | 6,320,124 |
| Merck & Co., Inc. | 3,535,914 | 220,393,520 |
| Mettler-Toledo International, Inc. * | 32,500 | 16,686,150 |
| Mylan N.V. * | 593,651 | 22,172,865 |
| PerkinElmer, Inc. | 141,360 | 8,398,198 |
| Perrigo Co., plc | 179,400 | 13,264,836 |
| Pfizer, Inc. | 7,665,033 | 259,997,919 |
| Regeneron Pharmaceuticals, Inc. * | 98,800 | 38,382,812 |
| Thermo Fisher Scientific, Inc. | 500,137 | 82,687,650 |
| Vertex Pharmaceuticals, Inc. * | 316,200 | 37,406,460 |
| Waters Corp. * | 100,752 | 17,116,757 |
| Zoetis, Inc. | 623,300 | 34,973,363 |
| | | 2,248,115,501 |
| |
| Real Estate 2.9% |
| Alexandria Real Estate Equities, Inc. | 111,100 | 12,499,861 |
| American Tower Corp. | 546,300 | 68,801,022 |
| Apartment Investment & Management Co., Class A | 209,014 | 9,142,272 |
| AvalonBay Communities, Inc. | 173,299 | 32,899,082 |
| Boston Properties, Inc. | 196,676 | 24,899,182 |
| CBRE Group, Inc., Class A * | 377,640 | 13,523,288 |
| Crown Castle International Corp. | 470,200 | 44,480,920 |
| Digital Realty Trust, Inc. | 202,100 | 23,209,164 |
| Equinix, Inc. | 100,409 | 41,940,839 |
| Equity Residential | 475,622 | 30,715,669 |
| Essex Property Trust, Inc. | 85,100 | 20,804,397 |
| Extra Space Storage, Inc. | 167,400 | 12,643,722 |
| Federal Realty Investment Trust | 95,900 | 12,552,351 |
| GGP, Inc. | 744,100 | 16,080,001 |
| HCP, Inc. | 587,400 | 18,414,990 |
| Host Hotels & Resorts, Inc. | 934,311 | 16,770,882 |
| Iron Mountain, Inc. | 323,302 | 11,237,978 |
| Kimco Realty Corp. | 569,859 | 11,562,439 |
| Mid-America Apartment Communities, Inc. | 153,500 | 15,228,735 |
| Prologis, Inc. | 671,189 | 36,519,394 |
| Public Storage | 195,678 | 40,971,060 |
| Realty Income Corp. | 344,200 | 20,084,070 |
| Regency Centers Corp. | 193,800 | 12,244,284 |
| Simon Property Group, Inc. | 412,353 | 68,145,457 |
| SL Green Realty Corp. | 129,700 | 13,609,421 |
| The Macerich Co. | 152,100 | 9,495,603 |
| UDR, Inc. | 351,100 | 13,110,074 |
| Ventas, Inc. | 453,600 | 29,034,936 |
| Vornado Realty Trust | 215,456 | 20,735,485 |
| Welltower, Inc. | 472,000 | 33,719,680 |
| Weyerhaeuser Co. | 959,223 | 32,488,883 |
| | | 767,565,141 |
| |
| Retailing 5.6% |
| Advance Auto Parts, Inc. | 92,400 | 13,133,736 |
| Amazon.com, Inc. * | 510,480 | 472,188,895 |
| AutoNation, Inc. * | 91,733 | 3,852,786 |
| AutoZone, Inc. * | 36,498 | 25,263,551 |
| Bed Bath & Beyond, Inc. | 194,069 | 7,520,174 |
| Best Buy Co., Inc. | 353,957 | 18,338,512 |
| CarMax, Inc. * | 239,400 | 14,004,900 |
| Dollar General Corp. | 333,200 | 24,226,972 |
| Dollar Tree, Inc. * | 304,230 | 25,181,117 |
| Expedia, Inc. | 156,013 | 20,862,058 |
| Foot Locker, Inc. | 165,000 | 12,761,100 |
| Security | Number
of Shares | Value ($) |
| Genuine Parts Co. | 191,338 | 17,606,923 |
| Kohl's Corp. | 231,910 | 9,051,447 |
| L Brands, Inc. | 307,535 | 16,240,923 |
| LKQ Corp. * | 415,100 | 12,967,724 |
| Lowe's Cos., Inc. | 1,118,688 | 94,954,238 |
| Macy's, Inc. | 382,226 | 11,168,644 |
| Netflix, Inc. * | 554,400 | 84,379,680 |
| Nordstrom, Inc. | 139,796 | 6,747,953 |
| O'Reilly Automotive, Inc. * | 116,800 | 28,983,920 |
| Ross Stores, Inc. | 514,600 | 33,449,000 |
| Signet Jewelers Ltd. | 94,000 | 6,188,960 |
| Staples, Inc. | 781,869 | 7,638,860 |
| Target Corp. | 723,408 | 40,402,337 |
| The Gap, Inc. | 277,162 | 7,261,645 |
| The Home Depot, Inc. | 1,571,850 | 245,365,785 |
| The Priceline Group, Inc. * | 63,115 | 116,562,044 |
| The TJX Cos., Inc. | 836,006 | 65,743,512 |
| Tiffany & Co. | 140,028 | 12,833,566 |
| Tractor Supply Co. | 162,600 | 10,066,566 |
| TripAdvisor, Inc. * | 147,713 | 6,648,562 |
| Ulta Salon, Cosmetics & Fragrance, Inc. * | 74,900 | 21,079,856 |
| | | 1,492,675,946 |
| |
| Semiconductors & Semiconductor Equipment 3.3% |
| Advanced Micro Devices, Inc. * | 978,100 | 13,008,730 |
| Analog Devices, Inc. | 472,040 | 35,969,448 |
| Applied Materials, Inc. | 1,395,372 | 56,666,057 |
| Broadcom Ltd. | 520,220 | 114,869,778 |
| Intel Corp. | 6,084,505 | 219,954,856 |
| KLA-Tencor Corp. | 200,481 | 19,691,244 |
| Lam Research Corp. | 206,274 | 29,878,789 |
| Microchip Technology, Inc. | 281,523 | 21,277,508 |
| Micron Technology, Inc. * | 1,348,275 | 37,306,769 |
| NVIDIA Corp. | 759,482 | 79,213,972 |
| Qorvo, Inc. * | 172,500 | 11,735,175 |
| QUALCOMM, Inc. | 1,914,465 | 102,883,349 |
| Skyworks Solutions, Inc. | 235,100 | 23,448,874 |
| Texas Instruments, Inc. | 1,284,354 | 101,695,150 |
| Xilinx, Inc. | 313,563 | 19,788,961 |
| | | 887,388,660 |
| |
| Software & Services 13.3% |
| Accenture plc, Class A | 800,900 | 97,149,170 |
| Activision Blizzard, Inc. | 893,600 | 46,690,600 |
| Adobe Systems, Inc. * | 634,476 | 84,854,820 |
| Akamai Technologies, Inc. * | 222,141 | 13,537,273 |
| Alliance Data Systems Corp. | 72,500 | 18,098,175 |
| Alphabet, Inc., Class A * | 383,712 | 354,749,418 |
| Alphabet, Inc., Class C * | 379,875 | 344,151,555 |
| Autodesk, Inc. * | 254,981 | 22,966,139 |
| Automatic Data Processing, Inc. | 579,973 | 60,601,379 |
| CA, Inc. | 407,925 | 13,392,178 |
| Citrix Systems, Inc. * | 209,508 | 16,957,577 |
| Cognizant Technology Solutions Corp., Class A * | 792,496 | 47,732,034 |
| CSRA, Inc. | 199,340 | 5,796,807 |
| DXC Technology Co. * | 367,851 | 27,713,894 |
| eBay, Inc. * | 1,297,169 | 43,338,416 |
| Electronic Arts, Inc. * | 401,292 | 38,050,507 |
| Facebook, Inc., Class A * | 3,034,300 | 455,903,575 |
| Fidelity National Information Services, Inc. | 419,234 | 35,295,310 |
| Fiserv, Inc. * | 281,004 | 33,478,817 |
| Gartner, Inc. * | 116,500 | 13,291,485 |
| Global Payments, Inc. | 190,000 | 15,534,400 |
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| International Business Machines Corp. | 1,106,390 | 177,343,253 |
| Intuit, Inc. | 317,309 | 39,730,260 |
| MasterCard, Inc., Class A | 1,215,490 | 141,385,797 |
| Microsoft Corp. | 9,953,931 | 681,446,116 |
| Oracle Corp. | 3,864,686 | 173,756,283 |
| Paychex, Inc. | 411,865 | 24,415,357 |
| PayPal Holdings, Inc. * | 1,435,769 | 68,514,897 |
| Red Hat, Inc. * | 224,800 | 19,800,384 |
| salesforce.com, Inc. * | 844,965 | 72,768,386 |
| Symantec Corp. | 796,450 | 25,191,714 |
| Synopsys, Inc. * | 190,000 | 14,003,000 |
| Teradata Corp. * | 159,871 | 4,665,036 |
| The Western Union Co. | 629,625 | 12,504,352 |
| Total System Services, Inc. | 207,100 | 11,868,901 |
| VeriSign, Inc. * | 112,125 | 9,970,155 |
| Visa, Inc., Class A | 2,392,300 | 218,225,606 |
| Yahoo! Inc. * | 1,131,555 | 54,552,267 |
| | | 3,539,425,293 |
| |
| Technology Hardware & Equipment 5.7% |
| Amphenol Corp., Class A | 399,700 | 28,902,307 |
| Apple, Inc. | 6,759,715 | 971,033,060 |
| Cisco Systems, Inc. | 6,465,128 | 220,266,911 |
| Corning, Inc. | 1,173,687 | 33,860,870 |
| F5 Networks, Inc. * | 82,400 | 10,640,312 |
| FLIR Systems, Inc. | 186,200 | 6,839,126 |
| Harris Corp. | 157,600 | 17,633,864 |
| Hewlett Packard Enterprise Co. | 2,175,108 | 40,522,262 |
| HP, Inc. | 2,183,008 | 41,084,211 |
| Juniper Networks, Inc. | 510,965 | 15,364,718 |
| Motorola Solutions, Inc. | 219,322 | 18,855,112 |
| NetApp, Inc. | 342,374 | 13,643,604 |
| Seagate Technology plc | 384,000 | 16,177,920 |
| TE Connectivity Ltd. | 450,400 | 34,847,448 |
| Western Digital Corp. | 367,536 | 32,736,431 |
| Xerox Corp. | 1,173,566 | 8,437,939 |
| | | 1,510,846,095 |
| |
| Telecommunication Services 2.2% |
| AT&T, Inc. | 7,922,202 | 313,956,865 |
| CenturyLink, Inc. | 686,643 | 17,626,126 |
| Level 3 Communications, Inc. * | 371,900 | 22,596,644 |
| Verizon Communications, Inc. | 5,259,278 | 241,453,453 |
| | | 595,633,088 |
| |
| Transportation 2.2% |
| Alaska Air Group, Inc. | 163,600 | 13,920,724 |
| American Airlines Group, Inc. | 652,700 | 27,818,074 |
| C.H. Robinson Worldwide, Inc. | 184,895 | 13,441,867 |
| CSX Corp. | 1,181,591 | 60,072,086 |
| Delta Air Lines, Inc. | 946,300 | 42,999,872 |
| Expeditors International of Washington, Inc. | 239,800 | 13,450,382 |
| FedEx Corp. | 314,868 | 59,730,460 |
| JB Hunt Transport Services, Inc. | 108,100 | 9,692,246 |
| Kansas City Southern | 143,800 | 12,952,066 |
| Norfolk Southern Corp. | 369,092 | 43,364,619 |
| Ryder System, Inc. | 77,802 | 5,283,534 |
| Southwest Airlines Co. | 797,636 | 44,843,096 |
| Union Pacific Corp. | 1,049,650 | 117,518,814 |
| United Continental Holdings, Inc. * | 361,800 | 25,401,978 |
| United Parcel Service, Inc., Class B | 890,718 | 95,716,556 |
| | | 586,206,374 |
| |
| Security | Number
of Shares | Value ($) |
| Utilities 3.2% |
| AES Corp. | 887,049 | 10,032,524 |
| Alliant Energy Corp. | 275,969 | 10,851,101 |
| Ameren Corp. | 311,820 | 17,053,436 |
| American Electric Power Co., Inc. | 639,802 | 43,397,770 |
| American Water Works Co., Inc. | 231,000 | 18,424,560 |
| CenterPoint Energy, Inc. | 564,366 | 16,101,362 |
| CMS Energy Corp. | 343,584 | 15,598,714 |
| Consolidated Edison, Inc. | 403,765 | 32,010,489 |
| Dominion Resources, Inc. | 815,964 | 63,180,093 |
| DTE Energy Co. | 229,012 | 23,952,365 |
| Duke Energy Corp. | 905,399 | 74,695,417 |
| Edison International | 421,693 | 33,722,789 |
| Entergy Corp. | 224,253 | 17,101,534 |
| Eversource Energy | 420,000 | 24,948,000 |
| Exelon Corp. | 1,183,893 | 40,998,215 |
| FirstEnergy Corp. | 560,294 | 16,775,202 |
| NextEra Energy, Inc. | 604,238 | 80,702,027 |
| NiSource, Inc. | 427,662 | 10,370,804 |
| NRG Energy, Inc. | 378,600 | 6,398,340 |
| PG&E Corp. | 661,806 | 44,374,092 |
| Pinnacle West Capital Corp. | 140,061 | 11,917,790 |
| PPL Corp. | 892,570 | 34,015,843 |
| Public Service Enterprise Group, Inc. | 638,570 | 28,129,009 |
| SCANA Corp. | 175,300 | 11,624,143 |
| Sempra Energy | 320,369 | 36,208,104 |
| The Southern Co. | 1,280,925 | 63,790,065 |
| WEC Energy Group, Inc. | 408,878 | 24,745,297 |
| Xcel Energy, Inc. | 647,386 | 29,164,739 |
| | | 840,283,824 |
| Total Common Stock |
| (Cost $14,080,322,208) | | 26,386,267,205 |
|
| Other Investment Company 0.0% of net assets |
| |
| Securities Lending Collateral 0.0% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (c) | 4,719,058 | 4,719,058 |
| Total Other Investment Company |
| (Cost $4,719,058) | | 4,719,058 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 1.2% of net assets |
| |
| Time Deposits 1.2% |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (d) | 81,400,000 | 81,400,000 |
| Sumitomo Mitsui Banking Corp. |
| 0.42%, 05/01/17 (d) | 232,106,445 | 232,106,445 |
| Total Short-Term Investments |
| (Cost $313,506,445) | | 313,506,445 |
End of Investments.
Schwab Equity Index Funds | Semiannual Report
Schwab S&P 500 Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
At 04/30/17, the tax basis cost of the fund's investments was $14,438,467,784 and the unrealized appreciation and depreciation were $12,608,993,697 and ($342,968,773), respectively, with a net unrealized appreciation of $12,266,024,924.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $4,578,445. |
| (c) | The rate shown is the 7-day yield. |
| (d) | The rate shown is the current daily overnight rate. |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 1,568 | 186,631,200 | 2,278,307 |
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 98.7% | Common Stock | 1,866,080,327 | 6,998,645,975 |
| 1.3% | Other Investment Companies | 95,691,492 | 95,691,492 |
| 100.0% | Total Investments | 1,961,771,819 | 7,094,337,467 |
| (0.0%) | Other Assets and Liabilities, Net | | (762,047) |
| 100.0% | Net Assets | | 7,093,575,420 |
| Security | Number
of Shares | Value ($) |
| Common Stock 98.7% of net assets |
| |
| Automobiles & Components 0.9% |
| Adient plc | 29,818 | 2,193,412 |
| Autoliv, Inc. | 26,600 | 2,665,054 |
| BorgWarner, Inc. | 69,096 | 2,921,379 |
| Delphi Automotive plc | 82,400 | 6,624,960 |
| Ford Motor Co. | 1,208,087 | 13,856,758 |
| General Motors Co. | 418,200 | 14,486,448 |
| Gentex Corp. | 97,544 | 2,014,284 |
| Harley-Davidson, Inc. | 59,392 | 3,374,059 |
| Lear Corp. | 23,600 | 3,366,776 |
| Tesla, Inc. * | 35,208 | 11,057,777 |
| The Goodyear Tire & Rubber Co. | 83,100 | 3,010,713 |
| Thor Industries, Inc. | 14,500 | 1,394,610 |
| | | 66,966,230 |
| |
| Banks 6.3% |
| Associated Banc-Corp. | 42,800 | 1,065,720 |
| Bank of America Corp. | 3,073,841 | 71,743,449 |
| Bank of Hawaii Corp. | 12,970 | 1,056,796 |
| Bank of the Ozarks, Inc. | 15,000 | 712,050 |
| BankUnited, Inc. | 10,000 | 352,900 |
| BB&T Corp. | 269,400 | 11,632,692 |
| BOK Financial Corp. | 8,900 | 750,181 |
| Chemical Financial Corp. | 10,000 | 474,500 |
| CIT Group, Inc. | 61,388 | 2,842,878 |
| Citigroup, Inc. | 851,556 | 50,343,991 |
| Citizens Financial Group, Inc. | 163,500 | 6,002,085 |
| Comerica, Inc. | 51,128 | 3,614,750 |
| Commerce Bancshares, Inc. | 29,381 | 1,614,486 |
| Cullen/Frost Bankers, Inc. | 16,900 | 1,595,191 |
| East West Bancorp, Inc. | 45,800 | 2,485,566 |
| F.N.B. Corp. | 60,000 | 854,400 |
| Fifth Third Bancorp | 241,084 | 5,889,682 |
| First Citizens BancShares, Inc., Class A | 3,300 | 1,148,598 |
| First Horizon National Corp. | 70,500 | 1,293,675 |
| First Republic Bank | 44,600 | 4,123,716 |
| Hancock Holding Co. | 25,238 | 1,178,615 |
| Home BancShares, Inc. | 36,400 | 926,380 |
| Huntington Bancshares, Inc. | 329,006 | 4,231,017 |
| IBERIABANK Corp. | 13,454 | 1,067,575 |
| Investors Bancorp, Inc. | 108,730 | 1,505,910 |
| JPMorgan Chase & Co. | 1,091,578 | 94,967,286 |
| KeyCorp | 333,218 | 6,077,896 |
| M&T Bank Corp. | 49,343 | 7,668,396 |
| MGIC Investment Corp. * | 103,900 | 1,095,106 |
| Security | Number
of Shares | Value ($) |
| New York Community Bancorp, Inc. | 149,882 | 1,991,932 |
| PacWest Bancorp | 28,300 | 1,397,737 |
| People's United Financial, Inc. | 103,793 | 1,813,264 |
| Popular, Inc. | 31,529 | 1,321,380 |
| PrivateBancorp, Inc. | 23,900 | 1,380,703 |
| Prosperity Bancshares, Inc. | 23,100 | 1,552,320 |
| Radian Group, Inc. | 65,144 | 1,099,631 |
| Regions Financial Corp. | 390,106 | 5,363,957 |
| Signature Bank * | 15,700 | 2,173,665 |
| SunTrust Banks, Inc. | 155,993 | 8,861,962 |
| SVB Financial Group * | 14,900 | 2,621,506 |
| Synovus Financial Corp. | 44,657 | 1,866,663 |
| Texas Capital Bancshares, Inc. * | 14,890 | 1,133,129 |
| TFS Financial Corp. | 27,300 | 451,542 |
| The PNC Financial Services Group, Inc. | 157,034 | 18,804,821 |
| U.S. Bancorp | 472,705 | 24,240,312 |
| Umpqua Holdings Corp. | 32,000 | 565,440 |
| United Bankshares, Inc. | 13,000 | 518,700 |
| Webster Financial Corp. | 27,500 | 1,397,275 |
| Wells Fargo & Co. | 1,378,696 | 74,228,993 |
| Western Alliance Bancorp * | 27,800 | 1,331,620 |
| Wintrust Financial Corp. | 15,728 | 1,114,486 |
| Zions Bancorp | 48,798 | 1,953,384 |
| | | 445,499,909 |
| |
| Capital Goods 7.5% |
| 3M Co. | 180,854 | 35,416,639 |
| A.O. Smith Corp. | 50,800 | 2,737,104 |
| Acuity Brands, Inc. | 14,300 | 2,518,230 |
| AECOM * | 34,700 | 1,187,087 |
| AGCO Corp. | 14,200 | 908,658 |
| Air Lease Corp. | 19,700 | 751,358 |
| Allegion plc | 28,700 | 2,256,968 |
| Allison Transmission Holdings, Inc. | 13,700 | 529,916 |
| AMETEK, Inc. | 75,105 | 4,296,006 |
| Arconic, Inc. | 105,840 | 2,892,607 |
| BWX Technologies, Inc. | 32,900 | 1,617,693 |
| Carlisle Cos., Inc. | 20,736 | 2,102,423 |
| Caterpillar, Inc. | 180,796 | 18,488,199 |
| Colfax Corp. * | 15,000 | 607,050 |
| Crane Co. | 16,384 | 1,309,245 |
| Cummins, Inc. | 49,892 | 7,530,698 |
| Curtiss-Wright Corp. | 15,200 | 1,420,592 |
| Deere & Co. | 95,946 | 10,708,533 |
| Donaldson Co., Inc. | 32,900 | 1,522,612 |
| Dover Corp. | 50,237 | 3,962,695 |
| Eaton Corp. plc | 142,901 | 10,809,032 |
| EMCOR Group, Inc. | 8,100 | 532,494 |
| Emerson Electric Co. | 200,228 | 12,069,744 |
| Fastenal Co. | 92,300 | 4,123,964 |
| Flowserve Corp. | 43,023 | 2,188,580 |
| Fluor Corp. | 40,958 | 2,101,965 |
| Fortive Corp. | 92,520 | 5,852,815 |
| Fortune Brands Home & Security, Inc. | 52,900 | 3,371,846 |
| General Dynamics Corp. | 91,644 | 17,759,691 |
| General Electric Co. | 2,668,102 | 77,348,277 |
| Graco, Inc. | 15,694 | 1,692,598 |
| HD Supply Holdings, Inc. * | 51,900 | 2,091,570 |
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Hexcel Corp. | 26,300 | 1,361,025 |
| Honeywell International, Inc. | 239,099 | 31,355,443 |
| Hubbell, Inc. | 16,932 | 1,915,517 |
| Huntington Ingalls Industries, Inc. | 13,700 | 2,752,193 |
| IDEX Corp. | 28,906 | 3,028,193 |
| Illinois Tool Works, Inc. | 100,404 | 13,864,788 |
| Ingersoll-Rand plc | 82,400 | 7,313,000 |
| ITT, Inc. | 30,300 | 1,276,539 |
| Jacobs Engineering Group, Inc. | 38,756 | 2,128,480 |
| Johnson Controls International plc | 288,386 | 11,988,206 |
| L3 Technologies, Inc. | 23,374 | 4,014,952 |
| Lennox International, Inc. | 11,700 | 1,935,063 |
| Lincoln Electric Holdings, Inc. | 22,200 | 1,976,466 |
| Lockheed Martin Corp. | 76,564 | 20,630,170 |
| Masco Corp. | 108,836 | 4,029,109 |
| MSC Industrial Direct Co., Inc., Class A | 15,558 | 1,392,908 |
| Nordson Corp. | 18,000 | 2,253,600 |
| Northrop Grumman Corp. | 49,432 | 12,158,295 |
| Orbital ATK, Inc. | 10,200 | 1,009,800 |
| Oshkosh Corp. | 23,600 | 1,637,604 |
| Owens Corning | 36,900 | 2,245,365 |
| PACCAR, Inc. | 107,289 | 7,159,395 |
| Parker-Hannifin Corp. | 41,253 | 6,633,482 |
| Pentair plc | 57,895 | 3,734,806 |
| Quanta Services, Inc. * | 18,900 | 669,816 |
| Raytheon Co. | 91,290 | 14,169,121 |
| Regal Beloit Corp. | 7,000 | 551,950 |
| Rockwell Automation, Inc. | 39,549 | 6,223,035 |
| Rockwell Collins, Inc. | 50,483 | 5,254,775 |
| Roper Technologies, Inc. | 30,891 | 6,755,862 |
| Sensata Technologies Holding N.V. * | 30,100 | 1,239,518 |
| Snap-on, Inc. | 17,250 | 2,889,892 |
| Spirit AeroSystems Holdings, Inc., Class A | 37,400 | 2,137,784 |
| Stanley Black & Decker, Inc. | 46,641 | 6,350,172 |
| Teledyne Technologies, Inc. * | 12,600 | 1,698,858 |
| Textron, Inc. | 88,938 | 4,149,847 |
| The Boeing Co. | 176,789 | 32,675,911 |
| The Middleby Corp. * | 18,300 | 2,491,179 |
| The Toro Co. | 30,400 | 1,973,568 |
| TransDigm Group, Inc. | 16,600 | 4,095,718 |
| Trinity Industries, Inc. | 44,200 | 1,188,980 |
| United Rentals, Inc. * | 31,467 | 3,450,671 |
| United Technologies Corp. | 234,703 | 27,927,310 |
| USG Corp. * | 13,000 | 393,900 |
| Valmont Industries, Inc. | 3,500 | 533,225 |
| W.W. Grainger, Inc. | 17,876 | 3,444,705 |
| WABCO Holdings, Inc. * | 18,000 | 2,139,660 |
| Wabtec Corp. | 28,800 | 2,416,032 |
| Watsco, Inc. | 7,000 | 971,600 |
| Woodward, Inc. | 17,300 | 1,170,691 |
| Xylem, Inc. | 53,400 | 2,745,294 |
| | | 530,210,362 |
| |
| Commercial & Professional Services 0.7% |
| Cintas Corp. | 25,710 | 3,148,704 |
| Copart, Inc. * | 72,148 | 2,229,373 |
| Deluxe Corp. | 14,500 | 1,042,695 |
| Equifax, Inc. | 37,300 | 5,047,063 |
| IHS Markit Ltd. * | 71,132 | 3,087,129 |
| KAR Auction Services, Inc. | 44,400 | 1,936,728 |
| ManpowerGroup, Inc. | 21,591 | 2,180,259 |
| Nielsen Holdings plc | 110,500 | 4,544,865 |
| Republic Services, Inc. | 81,581 | 5,138,787 |
| Robert Half International, Inc. | 43,891 | 2,021,181 |
| Rollins, Inc. | 32,850 | 1,275,566 |
| Stericycle, Inc. * | 27,098 | 2,312,543 |
| The Dun & Bradstreet Corp. | 10,925 | 1,197,489 |
| Security | Number
of Shares | Value ($) |
| TransUnion * | 12,100 | 484,363 |
| Verisk Analytics, Inc. * | 47,800 | 3,958,318 |
| Waste Management, Inc. | 131,077 | 9,539,784 |
| | | 49,144,847 |
| |
| Consumer Durables & Apparel 1.3% |
| Brunswick Corp. | 29,300 | 1,662,775 |
| CalAtlantic Group, Inc. | 22,300 | 807,706 |
| Carter's, Inc. | 17,300 | 1,592,292 |
| Coach, Inc. | 89,730 | 3,534,465 |
| Columbia Sportswear Co. | 8,900 | 503,918 |
| D.R. Horton, Inc. | 107,597 | 3,538,865 |
| Garmin Ltd. | 39,886 | 2,027,804 |
| Hanesbrands, Inc. | 121,600 | 2,652,096 |
| Hasbro, Inc. | 34,225 | 3,392,040 |
| Leggett & Platt, Inc. | 39,744 | 2,088,150 |
| Lennar Corp., Class A | 60,775 | 3,069,137 |
| lululemon Athletica, Inc. * | 34,500 | 1,794,000 |
| Mattel, Inc. | 102,797 | 2,304,709 |
| Michael Kors Holdings Ltd. * | 33,300 | 1,243,089 |
| Mohawk Industries, Inc. * | 19,439 | 4,564,083 |
| Newell Brands, Inc. | 143,713 | 6,860,859 |
| NIKE, Inc., Class B | 403,612 | 22,364,141 |
| NVR, Inc. * | 1,098 | 2,318,153 |
| Polaris Industries, Inc. (b) | 19,200 | 1,636,992 |
| PulteGroup, Inc. | 98,799 | 2,239,773 |
| PVH Corp. | 25,514 | 2,577,679 |
| Ralph Lauren Corp. | 18,395 | 1,484,844 |
| Skechers U.S.A., Inc., Class A * | 20,000 | 505,000 |
| Toll Brothers, Inc. | 50,000 | 1,799,500 |
| Under Armour, Inc., Class A *(b) | 56,200 | 1,207,738 |
| Under Armour, Inc., Class C * | 56,598 | 1,098,567 |
| VF Corp. | 103,828 | 5,672,124 |
| Whirlpool Corp. | 24,515 | 4,551,945 |
| | | 89,092,444 |
| |
| Consumer Services 2.0% |
| Aramark | 65,800 | 2,403,016 |
| Bright Horizons Family Solutions, Inc. * | 12,900 | 981,948 |
| Carnival Corp. | 115,760 | 7,150,495 |
| Chipotle Mexican Grill, Inc. * | 8,050 | 3,819,484 |
| Cracker Barrel Old Country Store, Inc. (b) | 8,100 | 1,297,539 |
| Darden Restaurants, Inc. | 34,165 | 2,910,516 |
| Domino's Pizza, Inc. | 16,000 | 2,902,240 |
| Dunkin' Brands Group, Inc. | 28,000 | 1,564,080 |
| H&R Block, Inc. | 75,198 | 1,864,158 |
| Hilton Worldwide Holdings, Inc. | 41,600 | 2,453,152 |
| Jack in the Box, Inc. | 12,400 | 1,264,428 |
| Las Vegas Sands Corp. | 117,163 | 6,911,445 |
| Marriott International, Inc., Class A | 103,508 | 9,773,225 |
| McDonald's Corp. | 249,636 | 34,931,566 |
| MGM Resorts International | 147,287 | 4,523,184 |
| Norwegian Cruise Line Holdings Ltd. * | 33,900 | 1,828,227 |
| Panera Bread Co., Class A * | 7,000 | 2,188,760 |
| Royal Caribbean Cruises Ltd. | 52,391 | 5,584,881 |
| Service Corp. International | 63,100 | 2,033,082 |
| ServiceMaster Global Holdings, Inc. * | 41,700 | 1,588,770 |
| Six Flags Entertainment Corp. | 24,400 | 1,527,684 |
| Starbucks Corp. | 457,354 | 27,468,681 |
| Texas Roadhouse, Inc. | 19,700 | 923,536 |
| The Wendy's Co. | 60,900 | 897,666 |
| Vail Resorts, Inc. | 11,800 | 2,332,388 |
| Wyndham Worldwide Corp. | 34,917 | 3,327,939 |
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Wynn Resorts Ltd. | 24,842 | 3,055,815 |
| Yum! Brands, Inc. | 113,276 | 7,447,897 |
| | | 144,955,802 |
| |
| Diversified Financials 5.0% |
| Affiliated Managers Group, Inc. | 17,859 | 2,957,272 |
| AGNC Investment Corp. | 60,000 | 1,264,200 |
| Ally Financial, Inc. | 88,400 | 1,750,320 |
| American Express Co. | 238,877 | 18,931,002 |
| Ameriprise Financial, Inc. | 53,057 | 6,783,337 |
| Annaly Capital Management, Inc. | 214,600 | 2,534,426 |
| Berkshire Hathaway, Inc., Class B * | 572,712 | 94,617,750 |
| BlackRock, Inc. | 39,665 | 15,253,969 |
| Capital One Financial Corp. | 150,653 | 12,109,488 |
| CBOE Holdings, Inc. | 25,400 | 2,093,214 |
| Chimera Investment Corp. | 27,000 | 549,720 |
| CME Group, Inc. | 98,580 | 11,454,010 |
| Credit Acceptance Corp. *(b) | 3,200 | 650,400 |
| Discover Financial Services | 134,724 | 8,432,375 |
| E*TRADE Financial Corp. * | 86,290 | 2,981,320 |
| Eaton Vance Corp. | 39,084 | 1,677,876 |
| FactSet Research Systems, Inc. | 12,900 | 2,106,054 |
| Franklin Resources, Inc. | 114,858 | 4,951,528 |
| Intercontinental Exchange, Inc. | 183,550 | 11,049,710 |
| Invesco Ltd. | 110,190 | 3,629,659 |
| Lazard Ltd., Class A | 10,900 | 468,046 |
| Legg Mason, Inc. | 31,214 | 1,166,779 |
| Leucadia National Corp. | 101,178 | 2,568,909 |
| MarketAxess Holdings, Inc. | 11,500 | 2,213,980 |
| Moody's Corp. | 53,326 | 6,309,532 |
| Morgan Stanley | 449,448 | 19,492,560 |
| MSCI, Inc. | 29,450 | 2,954,424 |
| Nasdaq, Inc. | 36,337 | 2,502,529 |
| Navient Corp. | 45,000 | 684,000 |
| New Residential Investment Corp. | 50,000 | 833,500 |
| Northern Trust Corp. | 65,976 | 5,937,840 |
| Raymond James Financial, Inc. | 39,649 | 2,954,644 |
| S&P Global, Inc. | 84,736 | 11,370,724 |
| SEI Investments Co. | 42,148 | 2,137,325 |
| SLM Corp. * | 80,000 | 1,003,200 |
| Starwood Property Trust, Inc. | 47,500 | 1,077,775 |
| State Street Corp. | 118,450 | 9,937,955 |
| Stifel Financial Corp. * | 10,000 | 488,700 |
| Synchrony Financial | 257,300 | 7,152,940 |
| T. Rowe Price Group, Inc. | 76,550 | 5,426,630 |
| TD Ameritrade Holding Corp. | 87,231 | 3,338,330 |
| The Bank of New York Mellon Corp. | 335,996 | 15,811,972 |
| The Charles Schwab Corp. (a) | 375,265 | 14,579,045 |
| The Goldman Sachs Group, Inc. | 116,132 | 25,990,342 |
| Voya Financial, Inc. | 24,800 | 927,024 |
| | | 353,106,335 |
| |
| Energy 6.0% |
| Anadarko Petroleum Corp. | 166,148 | 9,473,759 |
| Antero Resources Corp. * | 30,000 | 635,700 |
| Apache Corp. | 118,700 | 5,773,568 |
| Baker Hughes, Inc. | 135,606 | 8,050,928 |
| Cabot Oil & Gas Corp. | 145,596 | 3,383,651 |
| Cheniere Energy, Inc. * | 74,900 | 3,396,715 |
| Chesapeake Energy Corp. * | 126,459 | 665,174 |
| Chevron Corp. | 580,437 | 61,932,628 |
| Cimarex Energy Co. | 29,115 | 3,397,138 |
| Concho Resources, Inc. * | 45,200 | 5,725,032 |
| ConocoPhillips | 385,266 | 18,458,094 |
| CONSOL Energy, Inc. * | 50,000 | 759,000 |
| Continental Resources, Inc. * | 25,800 | 1,094,178 |
| Security | Number
of Shares | Value ($) |
| Core Laboratories N.V. (b) | 13,300 | 1,473,906 |
| Devon Energy Corp. | 162,382 | 6,412,465 |
| Diamondback Energy, Inc. * | 26,800 | 2,675,712 |
| Energen Corp. * | 28,000 | 1,455,720 |
| Ensco plc, Class A | 50,000 | 394,500 |
| EOG Resources, Inc. | 173,204 | 16,021,370 |
| EQT Corp. | 51,600 | 3,000,024 |
| Exxon Mobil Corp. | 1,263,763 | 103,186,249 |
| Halliburton Co. | 280,788 | 12,882,553 |
| Helmerich & Payne, Inc. | 31,392 | 1,903,611 |
| Hess Corp. | 84,123 | 4,107,726 |
| HollyFrontier Corp. | 45,400 | 1,277,556 |
| Kinder Morgan, Inc. | 586,917 | 12,108,098 |
| Laredo Petroleum, Inc. * | 35,000 | 450,100 |
| Marathon Oil Corp. | 267,696 | 3,980,639 |
| Marathon Petroleum Corp. | 164,600 | 8,384,724 |
| Murphy Oil Corp. | 49,944 | 1,307,534 |
| Nabors Industries Ltd. | 86,107 | 890,346 |
| National Oilwell Varco, Inc. | 119,426 | 4,176,327 |
| Newfield Exploration Co. * | 63,666 | 2,204,117 |
| Noble Energy, Inc. | 134,622 | 4,352,329 |
| Oasis Petroleum, Inc. * | 70,000 | 835,800 |
| Occidental Petroleum Corp. | 244,916 | 15,072,131 |
| ONEOK, Inc. | 66,824 | 3,515,611 |
| Parsley Energy, Inc., Class A * | 60,000 | 1,787,400 |
| Patterson-UTI Energy, Inc. | 49,797 | 1,077,856 |
| PDC Energy, Inc. * | 16,959 | 936,646 |
| Phillips 66 | 131,400 | 10,454,184 |
| Pioneer Natural Resources Co. | 55,711 | 9,637,446 |
| Range Resources Corp. | 47,928 | 1,269,613 |
| Rice Energy, Inc. * | 45,000 | 958,050 |
| RSP Permian, Inc. * | 33,200 | 1,263,260 |
| Schlumberger Ltd. | 431,405 | 31,315,689 |
| SM Energy Co. | 25,000 | 564,750 |
| Targa Resources Corp. | 55,000 | 3,032,150 |
| TechnipFMC plc * | 131,568 | 3,964,144 |
| Tesoro Corp. | 36,712 | 2,926,314 |
| The Williams Cos., Inc. | 244,321 | 7,483,552 |
| Transocean Ltd. * | 153,900 | 1,697,517 |
| Valero Energy Corp. | 149,520 | 9,660,487 |
| Weatherford International plc * | 260,000 | 1,500,200 |
| Western Refining, Inc. | 25,000 | 862,250 |
| Whiting Petroleum Corp. * | 60,000 | 498,000 |
| WPX Energy, Inc. * | 105,000 | 1,252,650 |
| | | 426,956,871 |
| |
| Food & Staples Retailing 1.8% |
| Casey's General Stores, Inc. | 7,200 | 806,904 |
| Costco Wholesale Corp. | 133,759 | 23,744,897 |
| CVS Health Corp. | 323,111 | 26,637,271 |
| Rite Aid Corp. * | 169,300 | 677,200 |
| Sysco Corp. | 151,030 | 7,984,956 |
| The Kroger Co. | 307,226 | 9,109,251 |
| Wal-Mart Stores, Inc. | 451,627 | 33,953,318 |
| Walgreens Boots Alliance, Inc. | 268,969 | 23,276,577 |
| Whole Foods Market, Inc. | 79,332 | 2,885,305 |
| | | 129,075,679 |
| |
| Food, Beverage & Tobacco 4.9% |
| Altria Group, Inc. | 596,705 | 42,831,485 |
| Archer-Daniels-Midland Co. | 190,705 | 8,724,754 |
| Brown-Forman Corp., Class A | 16,800 | 807,408 |
| Brown-Forman Corp., Class B | 44,360 | 2,099,115 |
| Bunge Ltd. | 27,892 | 2,204,305 |
| Campbell Soup Co. | 53,858 | 3,098,989 |
| ConAgra Brands, Inc. | 136,097 | 5,277,842 |
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Constellation Brands, Inc., Class A | 54,132 | 9,339,935 |
| Dr Pepper Snapple Group, Inc. | 57,920 | 5,308,368 |
| Flowers Foods, Inc. | 56,925 | 1,116,299 |
| General Mills, Inc. | 183,700 | 10,564,587 |
| Hormel Foods Corp. | 81,188 | 2,848,075 |
| Ingredion, Inc. | 21,800 | 2,699,276 |
| Kellogg Co. | 79,931 | 5,675,101 |
| Lamb Weston Holdings, Inc. | 45,365 | 1,893,989 |
| McCormick & Co., Inc. - Non Voting Shares | 35,254 | 3,521,875 |
| Mead Johnson Nutrition Co. | 58,800 | 5,216,736 |
| Molson Coors Brewing Co., Class B | 58,272 | 5,587,702 |
| Mondelez International, Inc., Class A | 487,564 | 21,955,007 |
| Monster Beverage Corp. * | 137,700 | 6,248,826 |
| PepsiCo, Inc. | 430,385 | 48,754,013 |
| Philip Morris International, Inc. | 460,065 | 50,993,604 |
| Pilgrim's Pride Corp. | 15,000 | 389,400 |
| Pinnacle Foods, Inc. | 29,600 | 1,721,240 |
| Post Holdings, Inc. * | 9,200 | 774,548 |
| Reynolds American, Inc. | 228,392 | 14,731,284 |
| Seaboard Corp. | 105 | 444,571 |
| Snyder's-Lance, Inc. | 13,000 | 458,380 |
| The Coca-Cola Co. | 1,200,348 | 51,795,016 |
| The Hain Celestial Group, Inc. * | 20,400 | 754,596 |
| The Hershey Co. | 45,564 | 4,930,025 |
| The JM Smucker Co. | 36,901 | 4,676,095 |
| The Kraft Heinz Co. | 187,600 | 16,957,164 |
| TreeHouse Foods, Inc. * | 10,000 | 876,000 |
| Tyson Foods, Inc., Class A | 89,659 | 5,761,487 |
| | | 351,037,097 |
| |
| Health Care Equipment & Services 5.3% |
| Abbott Laboratories | 537,201 | 23,443,452 |
| ABIOMED, Inc. * | 12,100 | 1,576,872 |
| Acadia Healthcare Co., Inc. * | 10,000 | 435,800 |
| Aetna, Inc. | 110,234 | 14,889,306 |
| Alere, Inc. * | 12,700 | 624,459 |
| Align Technology, Inc. * | 23,400 | 3,150,108 |
| AmerisourceBergen Corp. | 54,220 | 4,448,751 |
| Anthem, Inc. | 81,423 | 14,484,337 |
| athenahealth, Inc. * | 12,000 | 1,176,120 |
| Baxter International, Inc. | 159,325 | 8,871,216 |
| Becton, Dickinson & Co. | 66,707 | 12,472,208 |
| Boston Scientific Corp. * | 429,507 | 11,330,395 |
| C.R. Bard, Inc. | 23,600 | 7,256,528 |
| Cantel Medical Corp. | 5,000 | 372,050 |
| Cardinal Health, Inc. | 104,710 | 7,600,899 |
| Centene Corp. * | 54,276 | 4,038,134 |
| Cerner Corp. * | 94,504 | 6,119,134 |
| Cigna Corp. | 78,854 | 12,330,400 |
| Danaher Corp. | 180,040 | 15,002,733 |
| DaVita, Inc. * | 53,450 | 3,688,584 |
| DENTSPLY SIRONA, Inc. | 76,190 | 4,818,256 |
| DexCom, Inc. * | 13,900 | 1,083,644 |
| Edwards Lifesciences Corp. * | 65,384 | 7,170,663 |
| Envision Healthcare Corp. * | 16,900 | 946,907 |
| Express Scripts Holding Co. * | 194,389 | 11,923,821 |
| HCA Holdings, Inc. * | 95,600 | 8,050,476 |
| HealthSouth Corp. | 13,500 | 633,150 |
| Henry Schein, Inc. * | 25,919 | 4,504,722 |
| Hill-Rom Holdings, Inc. | 17,300 | 1,308,572 |
| Hologic, Inc. * | 76,970 | 3,475,196 |
| Humana, Inc. | 46,391 | 10,297,874 |
| IDEXX Laboratories, Inc. * | 29,996 | 5,031,229 |
| Intuitive Surgical, Inc. * | 11,841 | 9,897,537 |
| Laboratory Corp. of America Holdings * | 30,368 | 4,256,075 |
| Masimo Corp. * | 7,000 | 719,180 |
| Security | Number
of Shares | Value ($) |
| McKesson Corp. | 70,347 | 9,728,287 |
| MEDNAX, Inc. * | 28,208 | 1,702,635 |
| Medtronic plc | 405,722 | 33,711,441 |
| Molina Healthcare, Inc. * | 6,900 | 343,551 |
| NuVasive, Inc. * | 7,500 | 543,825 |
| Patterson Cos., Inc. | 22,600 | 1,005,474 |
| Quest Diagnostics, Inc. | 42,747 | 4,510,236 |
| ResMed, Inc. | 43,716 | 2,972,251 |
| STERIS plc | 18,000 | 1,328,400 |
| Stryker Corp. | 89,954 | 12,267,027 |
| Teleflex, Inc. | 13,846 | 2,864,599 |
| The Cooper Cos., Inc. | 14,400 | 2,884,752 |
| UnitedHealth Group, Inc. | 294,392 | 51,483,273 |
| Universal Health Services, Inc., Class B | 27,874 | 3,366,064 |
| Varian Medical Systems, Inc. * | 31,371 | 2,846,605 |
| VCA, Inc. * | 20,300 | 1,858,871 |
| Veeva Systems, Inc., Class A * | 15,000 | 804,300 |
| WellCare Health Plans, Inc. * | 14,100 | 2,163,081 |
| West Pharmaceutical Services, Inc. | 22,500 | 2,070,675 |
| Zimmer Biomet Holdings, Inc. | 57,012 | 6,821,486 |
| | | 372,705,621 |
| |
| Household & Personal Products 1.7% |
| Church & Dwight Co., Inc. | 80,788 | 4,001,430 |
| Colgate-Palmolive Co. | 253,854 | 18,287,642 |
| Coty, Inc., Class A | 80,000 | 1,428,000 |
| Edgewell Personal Care Co. * | 19,900 | 1,422,651 |
| Herbalife Ltd. *(b) | 20,100 | 1,271,526 |
| Kimberly-Clark Corp. | 113,204 | 14,688,219 |
| Spectrum Brands Holdings, Inc. | 8,200 | 1,178,586 |
| The Clorox Co. | 40,425 | 5,404,418 |
| The Estee Lauder Cos., Inc., Class A | 75,068 | 6,541,426 |
| The Procter & Gamble Co. | 786,119 | 68,651,772 |
| | | 122,875,670 |
| |
| Insurance 3.0% |
| Aflac, Inc. | 127,713 | 9,563,149 |
| Alleghany Corp. * | 5,186 | 3,167,090 |
| Allied World Assurance Co. Holdings AG | 24,700 | 1,311,323 |
| American Financial Group, Inc. | 21,805 | 2,121,845 |
| American International Group, Inc. | 294,276 | 17,924,351 |
| American National Insurance Co. | 3,100 | 362,452 |
| AmTrust Financial Services, Inc. | 17,000 | 272,850 |
| Aon plc | 85,303 | 10,222,712 |
| Arch Capital Group Ltd. * | 37,000 | 3,587,890 |
| Arthur J. Gallagher & Co. | 61,120 | 3,411,107 |
| Aspen Insurance Holdings Ltd. | 9,000 | 471,150 |
| Assurant, Inc. | 19,192 | 1,847,038 |
| Assured Guaranty Ltd. | 41,600 | 1,586,208 |
| Axis Capital Holdings Ltd. | 27,862 | 1,836,106 |
| Brown & Brown, Inc. | 39,476 | 1,693,520 |
| Chubb Ltd. | 134,902 | 18,515,299 |
| Cincinnati Financial Corp. | 48,417 | 3,490,382 |
| CNA Financial Corp. | 9,150 | 414,129 |
| CNO Financial Group, Inc. | 26,000 | 547,820 |
| Erie Indemnity Co., Class A | 8,285 | 1,025,849 |
| Everest Re Group Ltd. | 12,720 | 3,201,751 |
| First American Financial Corp. | 16,600 | 720,606 |
| FNF Group | 88,169 | 3,610,521 |
| Lincoln National Corp. | 78,159 | 5,153,023 |
| Loews Corp. | 82,358 | 3,839,530 |
| Markel Corp. * | 4,447 | 4,311,811 |
| Marsh & McLennan Cos., Inc. | 138,820 | 10,290,727 |
| MetLife, Inc. | 339,644 | 17,596,956 |
| Old Republic International Corp. | 70,509 | 1,458,126 |
| Primerica, Inc. | 7,000 | 586,600 |
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Principal Financial Group, Inc. | 88,009 | 5,732,026 |
| Prudential Financial, Inc. | 133,597 | 14,298,887 |
| Reinsurance Group of America, Inc. | 19,510 | 2,439,530 |
| RenaissanceRe Holdings Ltd. | 13,907 | 1,977,158 |
| The Allstate Corp. | 102,998 | 8,372,707 |
| The Hanover Insurance Group, Inc. | 5,000 | 441,350 |
| The Hartford Financial Services Group, Inc. | 124,095 | 6,001,234 |
| The Progressive Corp. | 181,542 | 7,210,848 |
| The Travelers Cos., Inc. | 90,547 | 11,015,948 |
| Torchmark Corp. | 33,597 | 2,577,226 |
| Unum Group | 78,214 | 3,623,655 |
| Validus Holdings Ltd. | 25,509 | 1,410,138 |
| W. R. Berkley Corp. | 32,225 | 2,190,655 |
| White Mountains Insurance Group Ltd. | 1,313 | 1,127,788 |
| Willis Towers Watson plc | 33,266 | 4,411,737 |
| XL Group Ltd. | 93,067 | 3,894,854 |
| | | 210,867,662 |
| |
| Materials 3.2% |
| Air Products & Chemicals, Inc. | 61,778 | 8,679,809 |
| Albemarle Corp. | 42,839 | 4,665,595 |
| Alcoa Corp. | 35,280 | 1,189,994 |
| AptarGroup, Inc. | 18,200 | 1,461,460 |
| Ashland Global Holdings, Inc. | 20,300 | 2,507,050 |
| Avery Dennison Corp. | 26,560 | 2,210,058 |
| Axalta Coating Systems Ltd. * | 46,600 | 1,461,842 |
| Ball Corp. | 48,876 | 3,758,076 |
| Bemis Co., Inc. | 28,149 | 1,264,735 |
| Berry Global Group, Inc. * | 36,100 | 1,805,000 |
| Cabot Corp. | 14,000 | 842,660 |
| Celanese Corp., Series A | 44,643 | 3,885,727 |
| CF Industries Holdings, Inc. | 44,560 | 1,191,534 |
| Crown Holdings, Inc. * | 47,376 | 2,657,320 |
| E.I. du Pont de Nemours & Co. | 273,217 | 21,789,056 |
| Eagle Materials, Inc. | 14,650 | 1,405,960 |
| Eastman Chemical Co. | 45,762 | 3,649,519 |
| Ecolab, Inc. | 83,128 | 10,730,993 |
| FMC Corp. | 43,504 | 3,185,798 |
| Freeport-McMoRan, Inc. * | 369,757 | 4,714,402 |
| Graphic Packaging Holding Co. | 104,500 | 1,419,110 |
| Huntsman Corp. | 40,000 | 990,800 |
| International Flavors & Fragrances, Inc. | 24,408 | 3,382,705 |
| International Paper Co. | 126,807 | 6,843,774 |
| LyondellBasell Industries N.V., Class A | 111,800 | 9,476,168 |
| Martin Marietta Materials, Inc. | 21,449 | 4,722,855 |
| Monsanto Co. | 136,534 | 15,921,230 |
| NewMarket Corp. | 2,800 | 1,317,960 |
| Newmont Mining Corp. | 162,928 | 5,508,596 |
| Nucor Corp. | 99,976 | 6,131,528 |
| Olin Corp. | 25,000 | 803,250 |
| Packaging Corp. of America | 29,030 | 2,867,583 |
| Platform Specialty Products Corp. * | 50,000 | 708,500 |
| PPG Industries, Inc. | 81,712 | 8,975,246 |
| Praxair, Inc. | 89,328 | 11,164,213 |
| Reliance Steel & Aluminum Co. | 19,922 | 1,570,252 |
| Royal Gold, Inc. | 10,000 | 706,800 |
| RPM International, Inc. | 44,600 | 2,344,176 |
| Sealed Air Corp. | 58,102 | 2,557,650 |
| Sensient Technologies Corp. | 13,500 | 1,104,300 |
| Silgan Holdings, Inc. | 10,000 | 606,200 |
| Sonoco Products Co. | 33,970 | 1,776,971 |
| Steel Dynamics, Inc. | 74,400 | 2,688,816 |
| The Chemours Co. | 28,000 | 1,128,120 |
| The Dow Chemical Co. | 350,256 | 21,996,077 |
| The Mosaic Co. | 81,995 | 2,208,125 |
| The Scotts Miracle-Gro Co. | 14,668 | 1,416,929 |
| Security | Number
of Shares | Value ($) |
| The Sherwin-Williams Co. | 23,890 | 7,995,505 |
| The Valspar Corp. | 16,846 | 1,894,164 |
| United States Steel Corp. | 30,000 | 669,600 |
| Vulcan Materials Co. | 40,825 | 4,934,926 |
| W.R. Grace & Co. | 21,500 | 1,498,980 |
| Westlake Chemical Corp. | 14,000 | 871,500 |
| WestRock Co. | 77,542 | 4,153,150 |
| | | 225,412,347 |
| |
| Media 3.2% |
| CBS Corp., Class B - Non Voting Shares | 129,005 | 8,586,573 |
| Charter Communications, Inc., Class A * | 64,520 | 22,269,723 |
| Cinemark Holdings, Inc. | 34,600 | 1,494,720 |
| Comcast Corp., Class A | 1,415,446 | 55,471,329 |
| Discovery Communications, Inc., Class A * | 27,200 | 782,816 |
| Discovery Communications, Inc., Class C * | 34,700 | 970,906 |
| DISH Network Corp., Class A * | 67,372 | 4,341,452 |
| Liberty Broadband Corp., Class C * | 20,700 | 1,887,012 |
| Liberty Global plc, Class A * | 79,241 | 2,806,716 |
| Liberty Global plc, Series C * | 219,372 | 7,592,465 |
| Liberty Media Corp. - Liberty SiriusXM, Class A * | 30,446 | 1,159,993 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 62,700 | 2,381,973 |
| Live Nation Entertainment, Inc. * | 45,500 | 1,463,280 |
| News Corp., Class A | 118,782 | 1,510,907 |
| Omnicom Group, Inc. | 73,888 | 6,067,682 |
| Scripps Networks Interactive, Inc., Class A | 30,900 | 2,308,848 |
| Sirius XM Holdings, Inc. (b) | 688,800 | 3,409,560 |
| TEGNA, Inc. | 73,854 | 1,881,800 |
| The Interpublic Group of Cos., Inc. | 127,164 | 2,997,255 |
| The Madison Square Garden Co., Class A * | 6,933 | 1,398,871 |
| The Walt Disney Co. | 445,260 | 51,472,056 |
| Time Warner, Inc. | 237,680 | 23,594,494 |
| Twenty-First Century Fox, Inc., Class A | 353,928 | 10,808,961 |
| Twenty-First Century Fox, Inc., Class B | 109,000 | 3,254,740 |
| Viacom, Inc., Class B | 106,546 | 4,534,598 |
| | | 224,448,730 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 8.0% |
| AbbVie, Inc. | 494,626 | 32,615,638 |
| ACADIA Pharmaceuticals, Inc. * | 14,000 | 480,620 |
| Agilent Technologies, Inc. | 99,131 | 5,457,162 |
| Alexion Pharmaceuticals, Inc. * | 70,304 | 8,983,445 |
| Alkermes plc * | 44,700 | 2,603,775 |
| Allergan plc | 99,677 | 24,307,233 |
| Alnylam Pharmaceuticals, Inc. * | 10,000 | 536,000 |
| Amgen, Inc. | 228,102 | 37,253,619 |
| Bio-Rad Laboratories, Inc., Class A * | 6,900 | 1,505,994 |
| Bio-Techne Corp. | 12,563 | 1,345,246 |
| Biogen, Inc. * | 68,855 | 18,674,165 |
| BioMarin Pharmaceutical, Inc. * | 49,600 | 4,753,664 |
| Bristol-Myers Squibb Co. | 506,839 | 28,408,326 |
| Bruker Corp. | 33,900 | 826,821 |
| Catalent, Inc. * | 29,900 | 875,472 |
| Celgene Corp. * | 242,540 | 30,087,087 |
| Charles River Laboratories International, Inc. * | 14,400 | 1,291,680 |
| Eli Lilly & Co. | 300,371 | 24,648,444 |
| Exelixis, Inc. * | 35,000 | 784,000 |
| Gilead Sciences, Inc. | 415,344 | 28,471,831 |
| Illumina, Inc. * | 45,900 | 8,485,074 |
| Incyte Corp. * | 51,800 | 6,437,704 |
| Ionis Pharmaceuticals, Inc. * | 16,300 | 785,497 |
| Jazz Pharmaceuticals plc * | 19,200 | 3,058,176 |
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Johnson & Johnson | 829,387 | 102,404,413 |
| Mallinckrodt plc * | 15,320 | 718,814 |
| Merck & Co., Inc. | 832,218 | 51,872,148 |
| Mettler-Toledo International, Inc. * | 8,800 | 4,518,096 |
| Mylan N.V. * | 117,600 | 4,392,360 |
| Neurocrine Biosciences, Inc. * | 24,300 | 1,297,620 |
| PerkinElmer, Inc. | 32,300 | 1,918,943 |
| Perrigo Co., plc | 27,400 | 2,025,956 |
| Pfizer, Inc. | 1,827,351 | 61,983,746 |
| PRA Health Sciences, Inc. * | 6,800 | 434,928 |
| Quintiles IMS Holdings, Inc. * | 38,946 | 3,282,369 |
| Regeneron Pharmaceuticals, Inc. * | 24,400 | 9,479,156 |
| Seattle Genetics, Inc. * | 33,600 | 2,294,880 |
| TESARO, Inc. * | 6,000 | 885,540 |
| Thermo Fisher Scientific, Inc. | 123,798 | 20,467,523 |
| United Therapeutics Corp. * | 14,100 | 1,772,370 |
| Vertex Pharmaceuticals, Inc. * | 77,612 | 9,181,500 |
| Waters Corp. * | 25,000 | 4,247,250 |
| Zoetis, Inc. | 154,700 | 8,680,217 |
| | | 564,534,502 |
| |
| Real Estate 3.7% |
| Alexandria Real Estate Equities, Inc. | 24,500 | 2,756,495 |
| American Campus Communities, Inc. | 44,400 | 2,104,116 |
| American Homes 4 Rent, Class A | 67,200 | 1,548,960 |
| American Tower Corp. | 133,189 | 16,773,823 |
| Apartment Investment & Management Co., Class A | 49,418 | 2,161,543 |
| Apple Hospitality REIT, Inc. | 46,300 | 867,199 |
| AvalonBay Communities, Inc. | 41,849 | 7,944,614 |
| Boston Properties, Inc. | 47,905 | 6,064,773 |
| Brixmor Property Group, Inc. | 73,700 | 1,455,575 |
| Camden Property Trust | 26,864 | 2,211,713 |
| CBRE Group, Inc., Class A * | 104,537 | 3,743,470 |
| Colony NorthStar, Inc., Class A | 135,000 | 1,764,450 |
| CoreCivic, Inc. | 70,000 | 2,411,500 |
| Cousins Properties, Inc. | 60,000 | 509,400 |
| Crown Castle International Corp. | 114,627 | 10,843,714 |
| CubeSmart | 50,100 | 1,269,534 |
| CyrusOne, Inc. | 10,000 | 546,400 |
| DCT Industrial Trust, Inc. | 27,600 | 1,395,456 |
| DDR Corp. | 91,800 | 992,358 |
| Digital Realty Trust, Inc. | 51,100 | 5,868,324 |
| Douglas Emmett, Inc. | 47,600 | 1,793,092 |
| Duke Realty Corp. | 104,537 | 2,898,811 |
| DuPont Fabros Technology, Inc. | 17,000 | 876,350 |
| EPR Properties | 17,000 | 1,236,070 |
| Equinix, Inc. | 23,262 | 9,716,537 |
| Equity Commonwealth * | 40,300 | 1,289,197 |
| Equity LifeStyle Properties, Inc. | 23,400 | 1,893,294 |
| Equity Residential | 111,372 | 7,192,404 |
| Essex Property Trust, Inc. | 20,929 | 5,116,513 |
| Extra Space Storage, Inc. | 40,600 | 3,066,518 |
| Federal Realty Investment Trust | 21,596 | 2,826,701 |
| First Industrial Realty Trust, Inc. | 15,000 | 422,100 |
| Forest City Realty Trust, Inc., Class A | 61,800 | 1,396,680 |
| Gaming & Leisure Properties, Inc. | 45,000 | 1,566,000 |
| GGP, Inc. | 187,700 | 4,056,197 |
| Gramercy Property Trust | 41,433 | 1,151,423 |
| HCP, Inc. | 144,480 | 4,529,448 |
| Healthcare Realty Trust, Inc. | 28,600 | 938,080 |
| Healthcare Trust of America, Inc., Class A | 36,800 | 1,173,552 |
| Highwoods Properties, Inc. | 31,600 | 1,607,808 |
| Hospitality Properties Trust | 52,081 | 1,657,738 |
| Host Hotels & Resorts, Inc. | 240,139 | 4,310,495 |
| Hudson Pacific Properties, Inc. | 44,412 | 1,525,996 |
| Iron Mountain, Inc. | 77,466 | 2,692,718 |
| Security | Number
of Shares | Value ($) |
| Jones Lang LaSalle, Inc. | 18,800 | 2,159,368 |
| Kilroy Realty Corp. | 27,700 | 1,953,681 |
| Kimco Realty Corp. | 126,531 | 2,567,314 |
| Lamar Advertising Co., Class A | 26,170 | 1,886,072 |
| LaSalle Hotel Properties | 19,000 | 542,640 |
| Liberty Property Trust | 46,304 | 1,878,553 |
| Life Storage, Inc. | 10,000 | 783,900 |
| Medical Properties Trust, Inc. | 60,000 | 784,200 |
| Mid-America Apartment Communities, Inc. | 35,970 | 3,568,584 |
| National Retail Properties, Inc. | 43,000 | 1,815,460 |
| Omega Healthcare Investors, Inc. | 71,900 | 2,372,700 |
| Outfront Media, Inc. | 50,000 | 1,308,000 |
| Paramount Group, Inc. | 48,500 | 795,400 |
| Park Hotels & Resorts, Inc. | 18,047 | 463,267 |
| Prologis, Inc. | 162,080 | 8,818,773 |
| Public Storage | 46,709 | 9,779,930 |
| Rayonier, Inc. | 18,000 | 507,960 |
| Realogy Holdings Corp. | 75,200 | 2,297,360 |
| Realty Income Corp. | 86,400 | 5,041,440 |
| Regency Centers Corp. | 44,442 | 2,807,846 |
| Retail Properties of America, Inc., Class A | 35,000 | 466,900 |
| Ryman Hospitality Properties, Inc. | 8,000 | 510,240 |
| SBA Communications Corp. * | 38,300 | 4,844,567 |
| Senior Housing Properties Trust | 72,168 | 1,553,055 |
| Simon Property Group, Inc. | 97,150 | 16,055,009 |
| SL Green Realty Corp. | 31,851 | 3,342,126 |
| Spirit Realty Capital, Inc. | 146,700 | 1,381,914 |
| STORE Capital Corp. | 39,500 | 947,605 |
| Sun Communities, Inc. | 23,200 | 1,939,752 |
| Sunstone Hotel Investors, Inc. | 35,000 | 521,150 |
| Tanger Factory Outlet Centers, Inc. | 30,900 | 963,771 |
| Taubman Centers, Inc. | 19,800 | 1,238,490 |
| The Howard Hughes Corp. * | 11,500 | 1,415,765 |
| The Macerich Co. | 40,745 | 2,543,710 |
| UDR, Inc. | 85,262 | 3,183,683 |
| Uniti Group, Inc. * | 56,900 | 1,562,474 |
| Ventas, Inc. | 107,029 | 6,850,926 |
| VEREIT, Inc. | 208,200 | 1,742,634 |
| Vornado Realty Trust | 54,334 | 5,229,104 |
| Weingarten Realty Investors | 43,602 | 1,428,838 |
| Welltower, Inc. | 111,421 | 7,959,916 |
| Weyerhaeuser Co. | 243,126 | 8,234,678 |
| WP Carey, Inc. | 20,000 | 1,252,000 |
| | | 265,467,894 |
| |
| Retailing 5.2% |
| Advance Auto Parts, Inc. | 22,622 | 3,215,491 |
| Amazon.com, Inc. * | 119,541 | 110,574,229 |
| AutoNation, Inc. * | 10,166 | 426,972 |
| AutoZone, Inc. * | 9,033 | 6,252,552 |
| Bed Bath & Beyond, Inc. | 51,220 | 1,984,775 |
| Best Buy Co., Inc. | 85,826 | 4,446,645 |
| Burlington Stores, Inc. * | 10,100 | 999,092 |
| CarMax, Inc. * | 61,400 | 3,591,900 |
| CST Brands, Inc. | 11,500 | 555,335 |
| Dick's Sporting Goods, Inc. | 26,700 | 1,349,685 |
| Dollar General Corp. | 83,200 | 6,049,472 |
| Dollar Tree, Inc. * | 71,418 | 5,911,268 |
| Expedia, Inc. | 36,404 | 4,867,943 |
| Foot Locker, Inc. | 40,809 | 3,156,168 |
| Genuine Parts Co. | 45,830 | 4,217,277 |
| Kohl's Corp. | 56,465 | 2,203,829 |
| L Brands, Inc. | 78,823 | 4,162,643 |
| Liberty Interactive Corp., QVC Group, Class A * | 66,208 | 1,402,285 |
| Liberty Ventures, Series A * | 26,808 | 1,443,611 |
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| LKQ Corp. * | 99,600 | 3,111,504 |
| Lowe's Cos., Inc. | 273,436 | 23,209,248 |
| Macy's, Inc. | 93,676 | 2,737,213 |
| Netflix, Inc. * | 134,800 | 20,516,560 |
| Nordstrom, Inc. | 41,600 | 2,008,032 |
| O'Reilly Automotive, Inc. * | 27,466 | 6,815,688 |
| Penske Automotive Group, Inc. | 15,300 | 729,963 |
| Pool Corp. | 6,000 | 717,720 |
| Ross Stores, Inc. | 122,524 | 7,964,060 |
| Signet Jewelers Ltd. | 24,300 | 1,599,912 |
| Staples, Inc. | 197,970 | 1,934,167 |
| Target Corp. | 180,562 | 10,084,388 |
| The Gap, Inc. | 72,255 | 1,893,081 |
| The Home Depot, Inc. | 372,035 | 58,074,663 |
| The Priceline Group, Inc. * | 15,246 | 28,156,618 |
| The TJX Cos., Inc. | 202,290 | 15,908,085 |
| Tiffany & Co. | 33,573 | 3,076,965 |
| Tractor Supply Co. | 41,400 | 2,563,074 |
| TripAdvisor, Inc. * | 15,200 | 684,152 |
| Ulta Salon, Cosmetics & Fragrance, Inc. * | 19,900 | 5,600,656 |
| Williams-Sonoma, Inc. | 25,300 | 1,367,465 |
| | | 365,564,386 |
| |
| Semiconductors & Semiconductor Equipment 3.2% |
| Advanced Micro Devices, Inc. * | 150,000 | 1,995,000 |
| Analog Devices, Inc. | 113,653 | 8,660,359 |
| Applied Materials, Inc. | 354,889 | 14,412,042 |
| Broadcom Ltd. | 122,770 | 27,108,844 |
| Cavium, Inc. * | 15,000 | 1,032,750 |
| Cirrus Logic, Inc. * | 10,000 | 643,500 |
| Cypress Semiconductor Corp. | 105,500 | 1,478,055 |
| Integrated Device Technology, Inc. * | 47,100 | 1,129,929 |
| Intel Corp. | 1,463,480 | 52,904,802 |
| KLA-Tencor Corp. | 47,638 | 4,679,004 |
| Lam Research Corp. | 48,319 | 6,999,007 |
| Marvell Technology Group Ltd. | 114,162 | 1,714,713 |
| Maxim Integrated Products, Inc. | 93,500 | 4,128,025 |
| Microchip Technology, Inc. | 68,648 | 5,188,416 |
| Micron Technology, Inc. * | 333,400 | 9,225,178 |
| Microsemi Corp. * | 35,700 | 1,675,758 |
| MKS Instruments, Inc. | 8,000 | 626,000 |
| NVIDIA Corp. | 167,999 | 17,522,296 |
| ON Semiconductor Corp. * | 126,800 | 1,798,024 |
| Qorvo, Inc. * | 20,000 | 1,360,600 |
| QUALCOMM, Inc. | 468,578 | 25,181,382 |
| Skyworks Solutions, Inc. | 59,900 | 5,974,426 |
| Teradyne, Inc. | 62,600 | 2,207,902 |
| Texas Instruments, Inc. | 314,775 | 24,923,884 |
| Xilinx, Inc. | 78,605 | 4,960,762 |
| | | 227,530,658 |
| |
| Software & Services 12.9% |
| Accenture plc, Class A | 195,400 | 23,702,020 |
| Activision Blizzard, Inc. | 187,838 | 9,814,535 |
| Adobe Systems, Inc. * | 155,313 | 20,771,561 |
| Akamai Technologies, Inc. * | 55,509 | 3,382,718 |
| Alliance Data Systems Corp. | 17,871 | 4,461,138 |
| Alphabet, Inc., Class A * | 89,288 | 82,548,542 |
| Alphabet, Inc., Class C * | 88,332 | 80,025,259 |
| Amdocs Ltd. | 46,200 | 2,829,288 |
| ANSYS, Inc. * | 27,400 | 3,018,384 |
| Aspen Technology, Inc. * | 24,400 | 1,500,356 |
| Autodesk, Inc. * | 69,872 | 6,293,371 |
| Automatic Data Processing, Inc. | 143,151 | 14,957,848 |
| Booz Allen Hamilton Holding Corp. | 38,600 | 1,386,898 |
| Broadridge Financial Solutions, Inc. | 36,400 | 2,545,816 |
| Security | Number
of Shares | Value ($) |
| CA, Inc. | 88,681 | 2,911,397 |
| Cadence Design Systems, Inc. * | 92,587 | 3,015,559 |
| CDK Global, Inc. | 51,400 | 3,341,514 |
| Citrix Systems, Inc. * | 48,200 | 3,901,308 |
| Cognizant Technology Solutions Corp., Class A * | 191,832 | 11,554,041 |
| CoStar Group, Inc. * | 10,600 | 2,553,434 |
| CSRA, Inc. | 42,331 | 1,230,985 |
| DST Systems, Inc. | 10,980 | 1,351,748 |
| DXC Technology Co. * | 88,604 | 6,675,425 |
| eBay, Inc. * | 336,070 | 11,228,099 |
| Electronic Arts, Inc. * | 98,381 | 9,328,486 |
| Euronet Worldwide, Inc. * | 7,400 | 611,388 |
| Facebook, Inc., Class A * | 715,100 | 107,443,775 |
| Fair Isaac Corp. | 9,300 | 1,259,964 |
| Fidelity National Information Services, Inc. | 94,108 | 7,922,953 |
| First Data Corp., Class A * | 25,000 | 390,500 |
| Fiserv, Inc. * | 70,978 | 8,456,319 |
| FleetCor Technologies, Inc. * | 33,100 | 4,671,734 |
| Fortinet, Inc. * | 44,600 | 1,739,400 |
| Gartner, Inc. * | 26,400 | 3,011,976 |
| Genpact Ltd. | 44,550 | 1,087,911 |
| Global Payments, Inc. | 47,099 | 3,850,814 |
| Guidewire Software, Inc. * | 11,100 | 682,539 |
| IAC/InterActiveCorp * | 25,730 | 2,135,847 |
| International Business Machines Corp. | 265,740 | 42,595,465 |
| Intuit, Inc. | 82,344 | 10,310,292 |
| j2 Global, Inc. | 5,800 | 523,392 |
| Jack Henry & Associates, Inc. | 24,200 | 2,345,464 |
| Leidos Holdings, Inc. | 30,000 | 1,579,800 |
| Manhattan Associates, Inc. * | 15,200 | 709,688 |
| MasterCard, Inc., Class A | 291,210 | 33,873,547 |
| MAXIMUS, Inc. | 10,000 | 609,900 |
| Microsoft Corp. | 2,360,038 | 161,568,201 |
| Nuance Communications, Inc. * | 50,000 | 894,500 |
| Oracle Corp. | 926,410 | 41,651,394 |
| Paychex, Inc. | 102,528 | 6,077,860 |
| PayPal Holdings, Inc. * | 348,370 | 16,624,216 |
| Proofpoint, Inc. * | 6,500 | 489,905 |
| PTC, Inc. * | 39,700 | 2,145,785 |
| Red Hat, Inc. * | 57,283 | 5,045,487 |
| Sabre Corp. | 26,300 | 615,683 |
| salesforce.com, Inc. * | 199,040 | 17,141,325 |
| Science Applications International Corp. | 6,500 | 474,435 |
| ServiceNow, Inc. * | 45,800 | 4,327,184 |
| Splunk, Inc. * | 23,800 | 1,530,578 |
| SS&C Technologies Holdings, Inc. | 49,000 | 1,800,260 |
| Symantec Corp. | 196,689 | 6,221,273 |
| Synopsys, Inc. * | 48,700 | 3,589,190 |
| Take-Two Interactive Software, Inc. * | 25,200 | 1,583,820 |
| Teradata Corp. * | 35,844 | 1,045,928 |
| The Ultimate Software Group, Inc. * | 8,900 | 1,803,763 |
| The Western Union Co. | 163,440 | 3,245,918 |
| Total System Services, Inc. | 55,100 | 3,157,781 |
| Twitter, Inc. * | 145,700 | 2,401,136 |
| Tyler Technologies, Inc. * | 9,300 | 1,521,387 |
| Vantiv, Inc., Class A * | 51,300 | 3,182,652 |
| VeriSign, Inc. * | 29,605 | 2,632,477 |
| Visa, Inc., Class A | 573,400 | 52,305,548 |
| VMware, Inc., Class A *(b) | 24,100 | 2,268,292 |
| WEX, Inc. * | 13,100 | 1,329,126 |
| Workday, Inc., Class A * | 20,700 | 1,809,180 |
| Yahoo! Inc. * | 274,179 | 13,218,170 |
| Zillow Group, Inc., Class C * | 16,000 | 624,000 |
| | | 912,468,852 |
| |
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Technology Hardware & Equipment 5.5% |
| Amphenol Corp., Class A | 92,240 | 6,669,874 |
| Apple, Inc. | 1,599,974 | 229,836,265 |
| Arista Networks, Inc. * | 10,800 | 1,508,112 |
| ARRIS International plc * | 55,100 | 1,432,049 |
| Arrow Electronics, Inc. * | 28,800 | 2,030,400 |
| Avnet, Inc. | 42,546 | 1,646,105 |
| Brocade Communications Systems, Inc. | 127,300 | 1,600,161 |
| CDW Corp. | 42,900 | 2,534,961 |
| Ciena Corp. * | 16,000 | 366,560 |
| Cisco Systems, Inc. | 1,554,615 | 52,965,733 |
| Cognex Corp. | 26,700 | 2,278,578 |
| Coherent, Inc. * | 5,500 | 1,185,800 |
| CommScope Holding Co., Inc. * | 49,700 | 2,089,388 |
| Corning, Inc. | 307,163 | 8,861,652 |
| F5 Networks, Inc. * | 23,200 | 2,995,816 |
| FLIR Systems, Inc. | 38,200 | 1,403,086 |
| Harris Corp. | 38,807 | 4,342,115 |
| Hewlett Packard Enterprise Co. | 538,668 | 10,035,385 |
| HP, Inc. | 541,668 | 10,194,192 |
| IPG Photonics Corp. * | 12,900 | 1,629,528 |
| Jabil Circuit, Inc. | 62,300 | 1,807,946 |
| Juniper Networks, Inc. | 110,994 | 3,337,590 |
| Keysight Technologies, Inc. * | 39,100 | 1,463,513 |
| Littelfuse, Inc. | 3,500 | 539,525 |
| Motorola Solutions, Inc. | 49,912 | 4,290,935 |
| National Instruments Corp. | 31,200 | 1,089,192 |
| NCR Corp. * | 38,744 | 1,598,190 |
| NetApp, Inc. | 88,200 | 3,514,770 |
| Palo Alto Networks, Inc. * | 22,300 | 2,417,543 |
| Seagate Technology plc | 92,137 | 3,881,732 |
| SYNNEX Corp. | 9,300 | 1,008,399 |
| TE Connectivity Ltd. | 103,400 | 8,000,058 |
| Trimble, Inc. * | 59,000 | 2,090,370 |
| ViaSat, Inc. * | 13,600 | 870,808 |
| Western Digital Corp. | 86,893 | 7,739,559 |
| Xerox Corp. | 293,045 | 2,106,994 |
| Zebra Technologies Corp., Class A * | 11,500 | 1,084,105 |
| | | 392,446,989 |
| |
| Telecommunication Services 2.1% |
| AT&T, Inc. | 1,882,041 | 74,585,285 |
| CenturyLink, Inc. | 133,111 | 3,416,959 |
| Level 3 Communications, Inc. * | 91,920 | 5,585,059 |
| Sprint Corp. * | 200,000 | 1,806,000 |
| T-Mobile US, Inc. * | 90,900 | 6,114,843 |
| Verizon Communications, Inc. | 1,253,257 | 57,537,029 |
| Zayo Group Holdings, Inc. * | 30,900 | 1,083,663 |
| | | 150,128,838 |
| |
| Transportation 2.1% |
| Alaska Air Group, Inc. | 38,800 | 3,301,492 |
| AMERCO | 2,000 | 748,920 |
| American Airlines Group, Inc. | 151,900 | 6,473,978 |
| Avis Budget Group, Inc. * | 34,800 | 1,061,400 |
| C.H. Robinson Worldwide, Inc. | 43,348 | 3,151,400 |
| CSX Corp. | 294,626 | 14,978,786 |
| Delta Air Lines, Inc. | 244,400 | 11,105,536 |
| Expeditors International of Washington, Inc. | 59,698 | 3,348,461 |
| FedEx Corp. | 79,528 | 15,086,462 |
| Genesee & Wyoming, Inc., Class A * | 10,900 | 738,584 |
| JB Hunt Transport Services, Inc. | 26,491 | 2,375,183 |
| JetBlue Airways Corp. * | 75,900 | 1,656,897 |
| Kansas City Southern | 33,100 | 2,981,317 |
| Security | Number
of Shares | Value ($) |
| Kirby Corp. * | 8,900 | 628,340 |
| Macquarie Infrastructure Corp. | 23,100 | 1,879,647 |
| Norfolk Southern Corp. | 93,086 | 10,936,674 |
| Old Dominion Freight Line, Inc. | 19,400 | 1,717,288 |
| Ryder System, Inc. | 16,964 | 1,152,025 |
| Southwest Airlines Co. | 201,388 | 11,322,033 |
| Spirit Airlines, Inc. * | 9,000 | 515,430 |
| Union Pacific Corp. | 250,724 | 28,071,059 |
| United Continental Holdings, Inc. * | 94,182 | 6,612,518 |
| United Parcel Service, Inc., Class B | 198,835 | 21,366,809 |
| XPO Logistics, Inc. * | 10,000 | 493,900 |
| | | 151,704,139 |
| |
| Utilities 3.2% |
| AES Corp. | 196,502 | 2,222,438 |
| Alliant Energy Corp. | 74,800 | 2,941,136 |
| Ameren Corp. | 78,585 | 4,297,814 |
| American Electric Power Co., Inc. | 153,071 | 10,382,806 |
| American Water Works Co., Inc. | 54,500 | 4,346,920 |
| Aqua America, Inc. | 58,917 | 1,949,564 |
| Atmos Energy Corp. | 30,718 | 2,488,772 |
| Black Hills Corp. | 8,000 | 544,160 |
| Calpine Corp. * | 50,000 | 510,000 |
| CenterPoint Energy, Inc. | 133,911 | 3,820,481 |
| CMS Energy Corp. | 85,733 | 3,892,278 |
| Consolidated Edison, Inc. | 89,906 | 7,127,748 |
| Dominion Resources, Inc. | 200,608 | 15,533,077 |
| DTE Energy Co. | 55,897 | 5,846,267 |
| Duke Energy Corp. | 213,295 | 17,596,837 |
| Edison International | 99,454 | 7,953,336 |
| Entergy Corp. | 57,362 | 4,374,426 |
| Eversource Energy | 101,312 | 6,017,933 |
| Exelon Corp. | 284,519 | 9,852,893 |
| FirstEnergy Corp. | 127,391 | 3,814,087 |
| Great Plains Energy, Inc. | 52,000 | 1,538,680 |
| Hawaiian Electric Industries, Inc. | 16,000 | 536,320 |
| IDACORP, Inc. | 19,800 | 1,673,496 |
| MDU Resources Group, Inc. | 64,217 | 1,727,437 |
| National Fuel Gas Co. | 28,047 | 1,553,243 |
| NextEra Energy, Inc. | 145,308 | 19,407,336 |
| NiSource, Inc. | 95,880 | 2,325,090 |
| NRG Energy, Inc. | 98,800 | 1,669,720 |
| OGE Energy Corp. | 66,760 | 2,321,913 |
| ONE Gas, Inc. | 16,000 | 1,101,280 |
| PG&E Corp. | 158,237 | 10,609,791 |
| Pinnacle West Capital Corp. | 32,687 | 2,781,337 |
| Portland General Electric Co. | 27,200 | 1,233,248 |
| PPL Corp. | 211,761 | 8,070,212 |
| Public Service Enterprise Group, Inc. | 156,372 | 6,888,187 |
| SCANA Corp. | 44,531 | 2,952,851 |
| Sempra Energy | 82,678 | 9,344,268 |
| Southwest Gas Holdings, Inc. | 14,200 | 1,189,392 |
| The Southern Co. | 294,618 | 14,671,976 |
| UGI Corp. | 50,172 | 2,516,627 |
| Vectren Corp. | 22,800 | 1,354,776 |
| WEC Energy Group, Inc. | 96,477 | 5,838,788 |
| Westar Energy, Inc. | 25,500 | 1,326,765 |
| WGL Holdings, Inc. | 13,000 | 1,071,980 |
| Xcel Energy, Inc. | 160,409 | 7,226,425 |
| | | 226,444,111 |
| Total Common Stock |
| (Cost $1,866,080,327) | | 6,998,645,975 |
|
Schwab Equity Index Funds | Semiannual Report
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Other Investment Companies 1.3% of net assets |
| |
| Money Market Fund 1.1% |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (c) | 82,722,242 | 82,722,242 |
| |
| Securities Lending Collateral 0.2% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (c) | 12,969,250 | 12,969,250 |
| Total Other Investment Companies |
| (Cost $95,691,492) | | 95,691,492 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,943,196,641 and the unrealized appreciation and depreciation were $5,166,531,224 and ($15,390,398), respectively, with a net unrealized appreciation of $5,151,140,826.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $12,507,336. |
| (c) | The rate shown is the 7-day yield. |
| | |
| REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 780 | 92,839,500 | 567,225 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.4% | Common Stock | 2,165,609,297 | 3,153,187,296 |
| 0.0% | Rights | 442,190 | 739,496 |
| 2.6% | Other Investment Company | 83,253,815 | 83,253,815 |
| 1.2% | Short-Term Investments | 35,939,495 | 35,939,495 |
| 103.2% | Total Investments | 2,285,244,797 | 3,273,120,102 |
| (3.2%) | Other Assets and Liabilities, Net | | (100,958,486) |
| 100.0% | Net Assets | | 3,172,161,616 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.4% of net assets |
| |
| Automobiles & Components 1.2% |
| American Axle & Manufacturing Holdings, Inc. * | 136,050 | 2,393,119 |
| Cooper Tire & Rubber Co. | 89,799 | 3,439,302 |
| Cooper-Standard Holding, Inc. * | 24,000 | 2,713,680 |
| Dana, Inc. | 246,029 | 4,777,883 |
| Dorman Products, Inc. * | 44,900 | 3,733,435 |
| Fox Factory Holding Corp. * | 41,200 | 1,238,060 |
| Gentherm, Inc. * | 57,700 | 2,143,555 |
| Horizon Global Corp. * | 35,700 | 503,013 |
| LCI Industries | 39,300 | 3,975,195 |
| Modine Manufacturing Co. * | 90,700 | 1,097,470 |
| Motorcar Parts of America, Inc. * | 31,200 | 945,984 |
| Standard Motor Products, Inc. | 35,200 | 1,789,216 |
| Stoneridge, Inc. * | 42,600 | 835,386 |
| Strattec Security Corp. | 5,100 | 163,965 |
| Superior Industries International, Inc. | 37,500 | 815,625 |
| Tenneco, Inc. | 88,328 | 5,567,314 |
| Tower International, Inc. | 32,900 | 891,590 |
| Unique Fabricating, Inc. | 10,200 | 118,422 |
| Winnebago Industries, Inc. | 43,600 | 1,251,320 |
| Workhorse Group, Inc. *(a) | 18,500 | 37,740 |
| | | 38,431,274 |
| |
| Banks 13.5% |
| 1st Source Corp. | 26,203 | 1,265,867 |
| Access National Corp. | 23,724 | 672,101 |
| ACNB Corp. | 8,600 | 266,170 |
| Allegiance Bancshares, Inc. * | 22,100 | 863,005 |
| American National Bankshares, Inc. | 10,700 | 410,880 |
| Ameris Bancorp | 61,200 | 2,882,520 |
| Ames National Corp. | 15,500 | 478,950 |
| Arrow Financial Corp. | 19,794 | 677,945 |
| Astoria Financial Corp. | 153,200 | 3,123,748 |
| Atlantic Capital Bancshares, Inc. * | 26,200 | 513,520 |
| Banc of California, Inc. (a) | 82,800 | 1,796,760 |
| BancFirst Corp. | 12,316 | 1,182,952 |
| Banco Latinoamericano de Comercio Exterior, S.A., Class E | 50,257 | 1,441,371 |
| BancorpSouth, Inc. | 138,600 | 4,220,370 |
| Bank Mutual Corp. | 71,800 | 660,560 |
| Bank of Marin Bancorp | 9,100 | 574,665 |
| Bank of the Ozarks, Inc. | 149,268 | 7,085,752 |
| Security | Number
of Shares | Value ($) |
| BankFinancial Corp. | 28,200 | 416,796 |
| Bankwell Financial Group, Inc. | 7,700 | 278,278 |
| Banner Corp. | 47,757 | 2,636,186 |
| Bar Harbor Bankshares | 24,957 | 768,426 |
| Bear State Financial, Inc. | 31,000 | 290,780 |
| Beneficial Bancorp, Inc. | 113,011 | 1,808,176 |
| Berkshire Hills Bancorp, Inc. | 57,900 | 2,171,250 |
| Blue Hills Bancorp, Inc. | 43,900 | 794,590 |
| BNC Bancorp | 67,987 | 2,274,165 |
| BofI Holding, Inc. *(a) | 95,880 | 2,290,573 |
| Boston Private Financial Holdings, Inc. | 127,100 | 1,982,760 |
| Bridge Bancorp, Inc. | 31,400 | 1,138,250 |
| Brookline Bancorp, Inc. | 115,522 | 1,680,845 |
| Bryn Mawr Bank Corp. | 27,200 | 1,166,880 |
| BSB Bancorp, Inc. * | 8,867 | 258,473 |
| C&F Financial Corp. | 4,700 | 235,000 |
| Camden National Corp. | 25,550 | 1,092,263 |
| Capital Bank Financial Corp., Class A | 38,219 | 1,586,088 |
| Capital City Bank Group, Inc. | 15,300 | 315,333 |
| Capitol Federal Financial, Inc. | 218,857 | 3,201,878 |
| Carolina Financial Corp. | 21,200 | 654,232 |
| Cascade Bancorp * | 55,003 | 411,422 |
| Cathay General Bancorp | 119,726 | 4,555,574 |
| CenterState Banks, Inc. | 76,400 | 1,927,572 |
| Central Pacific Financial Corp. | 49,100 | 1,535,848 |
| Central Valley Community Bancorp | 13,500 | 306,585 |
| Century Bancorp, Inc., Class A | 4,700 | 296,335 |
| Charter Financial Corp. | 24,859 | 456,163 |
| Chemical Financial Corp. | 110,063 | 5,222,489 |
| Chemung Financial Corp. | 4,500 | 170,955 |
| Citizens & Northern Corp. | 20,300 | 471,975 |
| City Holding Co. | 27,800 | 1,976,302 |
| Clifton Bancorp, Inc. | 38,861 | 648,979 |
| CNB Financial Corp. | 20,700 | 494,523 |
| CoBiz Financial, Inc. | 60,600 | 995,658 |
| Codorus Valley Bancorp, Inc. | 10,920 | 316,571 |
| Columbia Banking System, Inc. | 97,400 | 3,848,274 |
| Community Bank System, Inc. | 71,522 | 4,001,656 |
| Community Trust Bancorp, Inc. | 25,180 | 1,131,841 |
| ConnectOne Bancorp, Inc. | 46,340 | 1,028,748 |
| County Bancorp, Inc. | 7,500 | 205,875 |
| CU Bancorp * | 30,200 | 1,125,705 |
| Customers Bancorp, Inc. * | 45,950 | 1,421,234 |
| CVB Financial Corp. | 162,619 | 3,502,813 |
| Dime Community Bancshares, Inc. | 50,600 | 984,170 |
| Eagle Bancorp, Inc. * | 52,980 | 3,173,502 |
| Enterprise Bancorp, Inc. | 14,531 | 508,730 |
| Enterprise Financial Services Corp. | 39,000 | 1,647,750 |
| Equity Bancshares, Inc., Class A * | 11,000 | 347,270 |
| ESSA Bancorp, Inc. | 12,500 | 189,125 |
| Essent Group Ltd. * | 122,700 | 4,541,127 |
| EverBank Financial Corp. | 176,600 | 3,443,700 |
| F.N.B. Corp. | 518,499 | 7,383,426 |
| Farmers Capital Bank Corp. | 13,815 | 573,323 |
| Farmers National Banc Corp. | 50,500 | 722,150 |
| FB Financial Corp. * | 11,300 | 409,512 |
| FCB Financial Holdings, Inc., Class A * | 47,169 | 2,228,735 |
| Federal Agricultural Mortgage Corp., Class C | 13,200 | 753,060 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Fidelity Southern Corp. | 34,748 | 782,525 |
| Financial Institutions, Inc. | 22,900 | 767,150 |
| First Bancorp (North Carolina) | 40,300 | 1,210,612 |
| First BanCorp (Puerto Rico) * | 221,700 | 1,303,596 |
| First Bancorp, Inc. | 18,296 | 493,443 |
| First Busey Corp. | 51,000 | 1,527,450 |
| First Business Financial Services, Inc. | 11,600 | 308,212 |
| First Citizens BancShares, Inc., Class A | 12,941 | 4,504,244 |
| First Commonwealth Financial Corp. | 144,929 | 1,871,033 |
| First Community Bancshares, Inc. | 24,600 | 650,916 |
| First Community Financial Partners, Inc. * | 20,900 | 272,745 |
| First Connecticut Bancorp, Inc. | 23,900 | 638,130 |
| First Defiance Financial Corp. | 16,300 | 874,332 |
| First Financial Bancorp | 105,289 | 2,911,241 |
| First Financial Bankshares, Inc. | 103,762 | 4,145,292 |
| First Financial Corp. | 17,700 | 863,760 |
| First Financial Northwest, Inc. | 10,300 | 161,504 |
| First Foundation, Inc. * | 39,400 | 618,580 |
| First Internet Bancorp | 7,900 | 233,445 |
| First Interstate BancSystem, Inc., Class A | 32,833 | 1,239,446 |
| First Merchants Corp. | 65,000 | 2,689,700 |
| First Mid-Illinois Bancshares, Inc. | 13,700 | 446,757 |
| First Midwest Bancorp, Inc. | 152,863 | 3,471,519 |
| First NBC Bank Holding Co. *(a) | 21,900 | 58,035 |
| First Northwest Bancorp * | 15,400 | 253,484 |
| Flagstar Bancorp, Inc. * | 33,700 | 985,388 |
| Flushing Financial Corp. | 47,500 | 1,400,300 |
| Franklin Financial Network, Inc. * | 18,464 | 748,715 |
| Fulton Financial Corp. | 293,549 | 5,415,979 |
| German American Bancorp, Inc. | 35,700 | 1,173,816 |
| Glacier Bancorp, Inc. | 122,111 | 4,124,910 |
| Great Southern Bancorp, Inc. | 16,300 | 817,445 |
| Great Western Bancorp, Inc. | 96,517 | 3,976,500 |
| Green Bancorp, Inc. * | 29,200 | 525,600 |
| Guaranty Bancorp | 27,920 | 702,188 |
| Hancock Holding Co. | 138,326 | 6,459,824 |
| Hanmi Financial Corp. | 51,600 | 1,498,980 |
| HarborOne Bancorp, Inc. * | 25,100 | 522,582 |
| Heartland Financial USA, Inc. | 37,000 | 1,776,000 |
| Heritage Commerce Corp. | 39,500 | 564,060 |
| Heritage Financial Corp. | 45,545 | 1,202,388 |
| Hilltop Holdings, Inc. | 122,313 | 3,401,525 |
| Hingham Institution for Savings | 2,496 | 448,007 |
| Home Bancorp, Inc. | 7,300 | 271,122 |
| Home BancShares, Inc. | 199,460 | 5,076,257 |
| HomeStreet, Inc. * | 38,622 | 1,004,172 |
| HomeTrust Bancshares, Inc. * | 29,400 | 735,000 |
| Hope Bancorp, Inc. | 209,179 | 3,830,067 |
| Horizon Bancorp | 29,850 | 805,652 |
| IBERIABANK Corp. | 83,375 | 6,615,806 |
| Impac Mortgage Holdings, Inc. * | 12,642 | 180,781 |
| Independent Bank Corp., Massachusetts | 43,800 | 2,772,540 |
| Independent Bank Corp., Michigan | 33,600 | 749,280 |
| Independent Bank Group, Inc. | 20,700 | 1,245,105 |
| International Bancshares Corp. | 90,360 | 3,379,464 |
| Investors Bancorp, Inc. | 487,314 | 6,749,299 |
| Kearny Financial Corp. | 144,832 | 2,114,547 |
| Lakeland Bancorp, Inc. | 65,597 | 1,275,862 |
| Lakeland Financial Corp. | 39,000 | 1,780,740 |
| LCNB Corp. | 12,200 | 270,230 |
| LegacyTexas Financial Group, Inc. | 71,900 | 2,718,539 |
| LendingTree, Inc. * | 10,000 | 1,409,000 |
| Live Oak Bancshares, Inc. | 30,100 | 726,915 |
| Macatawa Bank Corp. | 39,500 | 378,015 |
| MainSource Financial Group, Inc. | 38,144 | 1,304,525 |
| MB Financial, Inc. | 125,687 | 5,342,954 |
| MBT Financial Corp. | 27,100 | 303,520 |
| Mercantile Bank Corp. | 25,300 | 850,839 |
| Security | Number
of Shares | Value ($) |
| Merchants Bancshares, Inc. | 9,946 | 495,311 |
| Meridian Bancorp, Inc. | 85,044 | 1,492,522 |
| Meta Financial Group, Inc. | 13,400 | 1,137,660 |
| MGIC Investment Corp. * | 565,545 | 5,960,844 |
| Midland States Bancorp, Inc. | 5,700 | 196,650 |
| MidWestOne Financial Group, Inc. | 11,300 | 392,110 |
| MutualFirst Financial, Inc. | 8,100 | 266,895 |
| National Bank Holdings Corp., Class A | 41,100 | 1,297,527 |
| National Bankshares, Inc. | 9,300 | 391,065 |
| National Commerce Corp. * | 15,032 | 581,738 |
| Nationstar Mortgage Holdings, Inc. * | 55,597 | 895,668 |
| NBT Bancorp, Inc. | 66,723 | 2,547,484 |
| Nicolet Bankshares, Inc. * | 10,000 | 493,000 |
| NMI Holdings, Inc., Class A * | 90,100 | 1,045,160 |
| Northfield Bancorp, Inc. | 76,986 | 1,415,003 |
| Northrim BanCorp, Inc. | 10,000 | 320,000 |
| Northwest Bancshares, Inc. | 159,109 | 2,568,019 |
| OceanFirst Financial Corp. | 41,500 | 1,147,475 |
| Ocwen Financial Corp. * | 157,909 | 361,612 |
| OFG Bancorp | 80,900 | 946,530 |
| Old Line Bancshares, Inc. | 12,300 | 341,448 |
| Old National Bancorp | 212,609 | 3,571,831 |
| Old Second Bancorp, Inc. | 41,624 | 499,488 |
| Opus Bank | 34,942 | 787,942 |
| Oritani Financial Corp. | 59,950 | 1,016,153 |
| Orrstown Financial Services, Inc. | 11,100 | 238,095 |
| Pacific Continental Corp. | 32,400 | 810,000 |
| Pacific Mercantile Bancorp * | 21,300 | 165,075 |
| Pacific Premier Bancorp, Inc. * | 58,253 | 2,129,147 |
| Park National Corp. | 22,753 | 2,398,849 |
| Park Sterling Corp. | 85,000 | 1,045,500 |
| Peapack-Gladstone Financial Corp. | 27,300 | 875,238 |
| Penns Woods Bancorp, Inc. | 7,100 | 296,070 |
| PennyMac Financial Services, Inc., Class A * | 18,200 | 300,300 |
| People's Utah Bancorp | 24,800 | 654,720 |
| Peoples Bancorp, Inc. | 28,000 | 937,440 |
| Peoples Financial Services Corp. | 11,100 | 498,834 |
| PHH Corp. * | 97,563 | 1,258,563 |
| Pinnacle Financial Partners, Inc. | 76,820 | 4,916,480 |
| Preferred Bank | 19,800 | 1,049,202 |
| Premier Financial Bancorp, Inc. | 13,310 | 285,233 |
| PrivateBancorp, Inc. | 130,076 | 7,514,491 |
| Prosperity Bancshares, Inc. | 110,595 | 7,431,984 |
| Provident Bancorp, Inc. * | 8,700 | 185,310 |
| Provident Financial Holdings, Inc. | 7,600 | 146,148 |
| Provident Financial Services, Inc. | 100,451 | 2,580,586 |
| QCR Holdings, Inc. | 17,862 | 814,507 |
| Radian Group, Inc. | 358,640 | 6,053,843 |
| Renasant Corp. | 73,266 | 3,106,478 |
| Republic Bancorp, Inc., Class A | 16,100 | 579,278 |
| Republic First Bancorp, Inc. * | 79,100 | 680,260 |
| S&T Bancorp, Inc. | 60,681 | 2,182,089 |
| Sandy Spring Bancorp, Inc. | 37,500 | 1,621,875 |
| Seacoast Banking Corp. of Florida * | 56,520 | 1,367,784 |
| ServisFirst Bancshares, Inc. | 77,480 | 2,928,744 |
| Shore Bancshares, Inc. | 18,700 | 310,233 |
| SI Financial Group, Inc. | 13,600 | 203,320 |
| Sierra Bancorp | 21,200 | 531,484 |
| Simmons First National Corp., Class A | 50,284 | 2,748,021 |
| South State Corp. | 43,563 | 3,840,078 |
| Southern First Bancshares, Inc. * | 8,800 | 296,560 |
| Southern Missouri Bancorp, Inc. | 7,800 | 259,740 |
| Southern National Bancorp of Virginia, Inc. | 15,700 | 285,897 |
| Southside Bancshares, Inc. | 45,103 | 1,565,976 |
| Southwest Bancorp, Inc. | 32,600 | 845,970 |
| State Bank Financial Corp. | 56,700 | 1,522,962 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Sterling Bancorp | 207,605 | 4,826,816 |
| Stock Yards Bancorp, Inc. | 35,430 | 1,452,630 |
| Stonegate Bank | 23,300 | 1,069,470 |
| Summit Financial Group, Inc. | 12,800 | 279,936 |
| Sun Bancorp, Inc. | 17,780 | 443,611 |
| Territorial Bancorp, Inc. | 12,200 | 377,590 |
| Texas Capital Bancshares, Inc. * | 83,200 | 6,331,520 |
| The Bancorp, Inc. * | 108,100 | 697,245 |
| The Bank of NT Butterfield & Son Ltd. | 23,000 | 764,750 |
| The First of Long Island Corp. | 34,450 | 937,040 |
| Tompkins Financial Corp. | 23,042 | 1,904,882 |
| Towne Bank | 92,256 | 2,993,707 |
| TriCo Bancshares | 40,200 | 1,425,492 |
| TriState Capital Holdings, Inc. * | 34,900 | 869,010 |
| Triumph Bancorp, Inc. * | 29,300 | 656,320 |
| TrustCo Bank Corp. | 147,155 | 1,169,882 |
| Trustmark Corp. | 111,477 | 3,703,266 |
| UMB Financial Corp. | 73,600 | 5,335,264 |
| Umpqua Holdings Corp. | 362,388 | 6,403,396 |
| Union Bankshares Corp. | 69,268 | 2,371,736 |
| Union Bankshares, Inc. (a) | 5,900 | 248,095 |
| United Bankshares, Inc. | 150,556 | 6,007,184 |
| United Community Banks, Inc. | 111,400 | 3,046,790 |
| United Community Financial Corp. | 93,600 | 799,344 |
| United Financial Bancorp, Inc. | 79,107 | 1,366,178 |
| Univest Corp. of Pennsylvania | 45,175 | 1,368,803 |
| Valley National Bancorp | 413,970 | 4,868,287 |
| Veritex Holdings, Inc. * | 18,600 | 501,084 |
| Walker & Dunlop, Inc. * | 47,945 | 2,150,333 |
| Washington Federal, Inc. | 148,601 | 5,007,854 |
| Washington Trust Bancorp, Inc. | 24,100 | 1,185,720 |
| WashingtonFirst Bankshares, Inc. | 12,600 | 354,438 |
| Waterstone Financial, Inc. | 45,557 | 865,583 |
| Webster Financial Corp. | 149,327 | 7,587,305 |
| WesBanco, Inc. | 65,495 | 2,607,356 |
| West Bancorp, Inc. | 20,800 | 484,640 |
| Westamerica Bancorp | 43,900 | 2,415,378 |
| Western New England Bancorp, Inc. | 39,100 | 410,550 |
| Wintrust Financial Corp. | 84,966 | 6,020,691 |
| WSFS Financial Corp. | 46,100 | 2,175,920 |
| Xenith Bankshares, Inc. * | 12,710 | 343,424 |
| | | 429,508,643 |
| |
| Capital Goods 9.2% |
| AAON, Inc. | 68,187 | 2,499,054 |
| AAR Corp. | 55,520 | 1,998,165 |
| Actuant Corp., Class A | 102,623 | 2,801,608 |
| Advanced Drainage Systems, Inc. | 61,715 | 1,422,531 |
| Aegion Corp. * | 54,400 | 1,241,408 |
| Aerojet Rocketdyne Holdings, Inc. * | 101,900 | 2,283,579 |
| Aerovironment, Inc. * | 30,400 | 868,528 |
| Aircastle Ltd. | 75,000 | 1,771,500 |
| Alamo Group, Inc. | 15,800 | 1,249,148 |
| Albany International Corp., Class A | 47,500 | 2,315,625 |
| Allied Motion Technologies, Inc. | 7,974 | 180,531 |
| Altra Industrial Motion Corp. | 39,600 | 1,748,340 |
| Ameresco, Inc., Class A * | 27,700 | 178,665 |
| American Railcar Industries, Inc. (a) | 11,431 | 479,530 |
| American Superconductor Corp. * | 19,200 | 100,032 |
| American Woodmark Corp. * | 22,300 | 2,049,370 |
| Apogee Enterprises, Inc. | 46,500 | 2,534,250 |
| Applied Industrial Technologies, Inc. | 60,610 | 3,879,040 |
| Argan, Inc. | 21,000 | 1,403,850 |
| Armstrong Flooring, Inc. * | 35,700 | 685,083 |
| Astec Industries, Inc. | 30,895 | 1,957,198 |
| Astronics Corp. * | 30,492 | 991,295 |
| Atkore International Group, Inc. * | 21,400 | 561,964 |
| Security | Number
of Shares | Value ($) |
| Axon Enterprise, Inc. * | 82,500 | 2,027,850 |
| AZZ, Inc. | 42,200 | 2,491,910 |
| Babcock & Wilcox Enterprises, Inc. * | 90,700 | 849,859 |
| Barnes Group, Inc. | 81,240 | 4,465,763 |
| Beacon Roofing Supply, Inc. * | 101,182 | 5,015,592 |
| Blue Bird Corp. * | 7,000 | 130,200 |
| BMC Stock Holdings, Inc. * | 92,800 | 2,162,240 |
| Briggs & Stratton Corp. | 69,593 | 1,739,129 |
| Builders FirstSource, Inc. * | 142,800 | 2,286,228 |
| Caesarstone Ltd. * | 42,600 | 1,691,220 |
| CAI International, Inc. * | 24,500 | 505,190 |
| Chart Industries, Inc. * | 49,302 | 1,800,016 |
| CIRCOR International, Inc. | 29,500 | 1,967,945 |
| Columbus McKinnon Corp. | 30,600 | 799,578 |
| Comfort Systems USA, Inc. | 62,300 | 2,286,410 |
| Continental Building Products, Inc. * | 54,644 | 1,330,581 |
| CSW Industrials, Inc. * | 21,700 | 768,180 |
| Cubic Corp. | 42,015 | 2,180,579 |
| Curtiss-Wright Corp. | 73,740 | 6,891,740 |
| DigitalGlobe, Inc. * | 105,027 | 3,381,869 |
| DMC Global, Inc. | 22,100 | 338,130 |
| Douglas Dynamics, Inc. | 35,800 | 1,142,020 |
| Ducommun, Inc. * | 15,100 | 443,789 |
| DXP Enterprises, Inc. * | 24,700 | 901,056 |
| Dycom Industries, Inc. * | 51,757 | 5,468,645 |
| EMCOR Group, Inc. | 99,097 | 6,514,637 |
| Encore Wire Corp. | 32,995 | 1,458,379 |
| Energous Corp. *(a) | 23,500 | 296,570 |
| Energy Recovery, Inc. * | 53,600 | 452,384 |
| EnerSys | 71,574 | 5,948,515 |
| Engility Holdings, Inc. * | 28,234 | 800,434 |
| EnPro Industries, Inc. | 34,800 | 2,458,620 |
| ESCO Technologies, Inc. | 41,169 | 2,422,796 |
| Esterline Technologies Corp. * | 50,442 | 4,612,921 |
| Federal Signal Corp. | 94,400 | 1,473,584 |
| Foundation Building Materials, Inc. * | 24,400 | 395,036 |
| Franklin Electric Co., Inc. | 76,136 | 3,129,190 |
| FreightCar America, Inc. | 17,700 | 231,162 |
| FuelCell Energy, Inc. *(a) | 54,483 | 62,655 |
| GATX Corp. | 66,900 | 4,007,310 |
| Gencor Industries, Inc. * | 11,550 | 191,730 |
| Generac Holdings, Inc. * | 99,425 | 3,496,777 |
| General Cable Corp. | 84,076 | 1,513,368 |
| Gibraltar Industries, Inc. * | 50,000 | 1,962,500 |
| Global Brass & Copper Holdings, Inc. | 35,900 | 1,279,835 |
| GMS, Inc. * | 11,500 | 415,840 |
| Graham Corp. | 15,200 | 335,464 |
| Granite Construction, Inc. | 62,300 | 3,283,833 |
| Great Lakes Dredge & Dock Corp. * | 85,200 | 387,660 |
| Griffon Corp. | 48,800 | 1,171,200 |
| H&E Equipment Services, Inc. | 52,600 | 1,110,912 |
| Hardinge, Inc. | 18,000 | 189,000 |
| Harsco Corp. * | 129,000 | 1,683,450 |
| HC2 Holdings, Inc. * | 52,000 | 303,680 |
| Hillenbrand, Inc. | 97,700 | 3,605,130 |
| Hurco Cos., Inc. | 8,600 | 249,400 |
| Hyster-Yale Materials Handling, Inc. | 15,554 | 934,951 |
| IES Holdings, Inc. * | 12,900 | 258,000 |
| Insteel Industries, Inc. | 28,500 | 992,085 |
| JELD-WEN Holding, Inc. * | 42,800 | 1,413,684 |
| John Bean Technologies Corp. | 51,833 | 4,594,995 |
| Kadant, Inc. | 16,500 | 1,025,475 |
| Kaman Corp. | 42,755 | 2,052,668 |
| Kennametal, Inc. | 129,300 | 5,376,294 |
| KLX, Inc. * | 84,594 | 4,001,296 |
| Kratos Defense & Security Solutions, Inc. * | 125,900 | 959,358 |
| Lawson Products, Inc. * | 17,500 | 398,125 |
| Layne Christensen Co. * | 30,400 | 242,288 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Lindsay Corp. | 17,866 | 1,551,841 |
| LSI Industries, Inc. | 34,500 | 312,915 |
| Lydall, Inc. * | 26,600 | 1,393,840 |
| Masonite International Corp. * | 51,500 | 4,284,800 |
| MasTec, Inc. * | 110,173 | 4,864,138 |
| Mercury Systems, Inc. * | 75,501 | 2,822,227 |
| Meritor, Inc. * | 139,938 | 2,492,296 |
| Milacron Holdings Corp. * | 24,000 | 451,680 |
| Miller Industries, Inc. | 15,800 | 401,320 |
| Moog, Inc., Class A * | 53,157 | 3,649,228 |
| MRC Global, Inc. * | 159,278 | 2,903,638 |
| Mueller Industries, Inc. | 97,169 | 3,113,295 |
| Mueller Water Products, Inc., Class A | 264,500 | 2,975,625 |
| MYR Group, Inc. * | 23,800 | 1,005,788 |
| National Presto Industries, Inc. | 8,500 | 886,975 |
| Navistar International Corp. * | 81,107 | 2,182,589 |
| NCI Building Systems, Inc. * | 41,200 | 721,000 |
| Neff Corp., Class A * | 22,700 | 399,520 |
| NN, Inc. | 46,617 | 1,286,629 |
| NOW, Inc. * | 172,200 | 2,929,122 |
| NV5 Global, Inc. * | 13,100 | 506,970 |
| Omega Flex, Inc. | 5,672 | 318,596 |
| Orion Group Holdings, Inc. * | 50,600 | 382,030 |
| Patrick Industries, Inc. * | 27,200 | 1,932,560 |
| PGT Innovations, Inc. * | 76,600 | 834,940 |
| Plug Power, Inc. *(a) | 324,000 | 725,760 |
| Ply Gem Holdings, Inc. * | 32,400 | 623,700 |
| Powell Industries, Inc. | 13,000 | 448,370 |
| Preformed Line Products Co. | 3,300 | 174,669 |
| Primoris Services Corp. | 73,000 | 1,676,810 |
| Proto Labs, Inc. * | 41,400 | 2,401,200 |
| Quanex Building Products Corp. | 53,204 | 1,085,362 |
| Raven Industries, Inc. | 56,600 | 1,754,600 |
| RBC Bearings, Inc. * | 36,800 | 3,691,040 |
| REV Group, Inc. | 22,200 | 626,040 |
| Rexnord Corp. * | 137,050 | 3,344,020 |
| Rush Enterprises, Inc., Class A * | 50,387 | 1,902,109 |
| Rush Enterprises, Inc., Class B * | 10,000 | 346,400 |
| Simpson Manufacturing Co., Inc. | 67,494 | 2,815,175 |
| SiteOne Landscape Supply, Inc. * | 18,300 | 874,923 |
| Spartan Motors, Inc. | 51,800 | 427,350 |
| Sparton Corp. * | 14,600 | 325,142 |
| SPX Corp. * | 70,200 | 1,689,012 |
| SPX FLOW, Inc. * | 61,600 | 2,226,224 |
| Standex International Corp. | 22,400 | 2,104,480 |
| Sun Hydraulics Corp. | 42,450 | 1,648,758 |
| Sunrun, Inc. *(a) | 97,700 | 516,833 |
| Supreme Industries, Inc., Class A | 20,100 | 402,804 |
| Teledyne Technologies, Inc. * | 55,426 | 7,473,088 |
| Tennant Co. | 28,576 | 2,093,192 |
| Textainer Group Holdings Ltd. | 36,731 | 549,128 |
| The ExOne Co. *(a) | 14,600 | 147,314 |
| The Gorman-Rupp Co. | 29,031 | 830,867 |
| The Greenbrier Cos., Inc. | 42,801 | 1,859,703 |
| The KeyW Holding Corp. * | 75,300 | 714,597 |
| The Manitowoc Co., Inc. * | 195,300 | 1,165,941 |
| Thermon Group Holdings, Inc. * | 56,200 | 1,152,100 |
| Titan International, Inc. | 76,000 | 813,960 |
| Titan Machinery, Inc. * | 34,000 | 538,900 |
| TPI Composites, Inc. * | 10,400 | 204,360 |
| Trex Co., Inc. * | 48,178 | 3,526,148 |
| TriMas Corp. * | 73,700 | 1,691,415 |
| Triton International Ltd. | 64,100 | 1,962,101 |
| Triumph Group, Inc. | 82,200 | 2,153,640 |
| Tutor Perini Corp. * | 60,330 | 1,861,181 |
| Univar, Inc. * | 74,900 | 2,235,765 |
| Universal Forest Products, Inc. | 33,162 | 3,160,007 |
| Vectrus, Inc. * | 17,747 | 451,484 |
| Security | Number
of Shares | Value ($) |
| Veritiv Corp. * | 13,476 | 696,035 |
| Vicor Corp. * | 26,200 | 471,600 |
| Wabash National Corp. | 104,100 | 2,371,398 |
| Watts Water Technologies, Inc., Class A | 46,311 | 2,880,544 |
| Wesco Aircraft Holdings, Inc. * | 93,300 | 1,133,595 |
| Willis Lease Finance Corp. * | 6,500 | 147,615 |
| Woodward, Inc. | 86,858 | 5,877,681 |
| | | 290,556,906 |
| |
| Commercial & Professional Services 3.7% |
| ABM Industries, Inc. | 90,509 | 3,909,084 |
| Acacia Research Corp. * | 72,500 | 395,125 |
| ACCO Brands Corp. * | 170,185 | 2,425,136 |
| Advanced Disposal Services, Inc. * | 35,000 | 832,300 |
| Aqua Metals, Inc. *(a) | 17,400 | 287,100 |
| ARC Document Solutions, Inc. * | 64,500 | 237,360 |
| Barrett Business Services, Inc. | 13,500 | 778,410 |
| Brady Corp., Class A | 77,929 | 3,035,335 |
| Casella Waste Systems, Inc., Class A * | 70,800 | 1,065,540 |
| CBIZ, Inc. * | 76,500 | 1,204,875 |
| CECO Environmental Corp. | 50,352 | 568,474 |
| Cogint, Inc. *(a) | 24,100 | 127,730 |
| CRA International, Inc. | 14,500 | 550,130 |
| Deluxe Corp. | 82,372 | 5,923,371 |
| Ennis, Inc. | 38,200 | 672,320 |
| Essendant, Inc. | 57,734 | 964,158 |
| Exponent, Inc. | 44,300 | 2,708,945 |
| Franklin Covey Co. * | 17,900 | 380,375 |
| FTI Consulting, Inc. * | 69,400 | 2,400,546 |
| GP Strategies Corp. * | 20,376 | 552,190 |
| Healthcare Services Group, Inc. | 116,552 | 5,350,902 |
| Heidrick & Struggles International, Inc. | 29,800 | 640,700 |
| Heritage-Crystal Clean, Inc. * | 16,900 | 254,345 |
| Herman Miller, Inc. | 99,100 | 3,280,210 |
| Hill International, Inc. * | 50,500 | 204,525 |
| HNI Corp. | 75,489 | 3,529,866 |
| Huron Consulting Group, Inc. * | 35,052 | 1,559,814 |
| ICF International, Inc. * | 32,200 | 1,421,630 |
| InnerWorkings, Inc. * | 78,600 | 832,374 |
| Insperity, Inc. | 25,226 | 2,304,395 |
| Interface, Inc. | 104,500 | 2,079,550 |
| Kelly Services, Inc., Class A | 47,323 | 1,056,249 |
| Kforce, Inc. | 39,800 | 903,460 |
| Kimball International, Inc., Class B | 58,299 | 1,035,973 |
| Knoll, Inc. | 80,803 | 1,936,040 |
| Korn/Ferry International | 91,761 | 2,973,056 |
| Matthews International Corp., Class A | 53,059 | 3,637,194 |
| McGrath RentCorp | 38,235 | 1,330,960 |
| Mistras Group, Inc. * | 26,414 | 594,315 |
| Mobile Mini, Inc. | 73,868 | 2,120,012 |
| MSA Safety, Inc. | 51,189 | 3,985,064 |
| Multi-Color Corp. | 23,700 | 1,820,160 |
| Navigant Consulting, Inc. * | 75,648 | 1,813,283 |
| NL Industries, Inc. * | 25,000 | 202,500 |
| On Assignment, Inc. * | 83,039 | 4,298,929 |
| Quad Graphics, Inc. | 46,500 | 1,221,090 |
| Resources Connection, Inc. | 50,450 | 701,255 |
| RPX Corp. * | 75,700 | 971,988 |
| SP Plus Corp. * | 26,500 | 912,925 |
| Steelcase, Inc., Class A | 143,642 | 2,449,096 |
| Team, Inc. * | 46,613 | 1,253,890 |
| Tetra Tech, Inc. | 96,661 | 4,248,251 |
| The Advisory Board Co. * | 68,838 | 3,517,622 |
| The Brink's Co. | 72,900 | 4,476,060 |
| TRC Cos., Inc. * | 27,863 | 487,602 |
| TriNet Group, Inc. * | 72,046 | 2,118,152 |
| TrueBlue, Inc. * | 72,476 | 1,982,219 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| UniFirst Corp. | 24,306 | 3,383,395 |
| US Ecology, Inc. | 37,800 | 1,782,270 |
| Viad Corp. | 33,696 | 1,523,059 |
| VSE Corp. | 14,800 | 631,220 |
| WageWorks, Inc. * | 59,600 | 4,398,480 |
| West Corp. | 68,258 | 1,821,806 |
| | | 116,064,390 |
| |
| Consumer Durables & Apparel 2.3% |
| Acushnet Holdings Corp. | 37,500 | 684,750 |
| American Outdoor Brands Corp. * | 95,500 | 2,115,325 |
| AV Homes, Inc. * | 24,200 | 424,710 |
| Bassett Furniture Industries, Inc. | 14,909 | 448,016 |
| Beazer Homes USA, Inc. * | 47,640 | 591,212 |
| Callaway Golf Co. | 152,769 | 1,810,313 |
| Cavco Industries, Inc. * | 14,500 | 1,721,875 |
| Century Communities, Inc. * | 27,152 | 741,250 |
| Columbia Sportswear Co. | 45,300 | 2,564,886 |
| Crocs, Inc. * | 115,400 | 718,942 |
| CSS Industries, Inc. | 13,400 | 353,224 |
| Culp, Inc. | 16,000 | 513,600 |
| Deckers Outdoor Corp. * | 55,071 | 3,281,681 |
| Delta Apparel, Inc. * | 11,000 | 192,830 |
| Escalade, Inc. | 14,500 | 193,575 |
| Ethan Allen Interiors, Inc. | 38,179 | 1,137,734 |
| Flexsteel Industries, Inc. | 10,100 | 536,512 |
| Fossil Group, Inc. * | 64,400 | 1,110,900 |
| G-III Apparel Group Ltd. * | 72,210 | 1,711,377 |
| GoPro, Inc., Class A *(a) | 155,800 | 1,285,350 |
| Green Brick Partners, Inc. * | 35,840 | 369,152 |
| Helen of Troy Ltd. * | 45,983 | 4,322,402 |
| Hooker Furniture Corp. | 18,434 | 800,957 |
| Hovnanian Enterprises, Inc., Class A * | 218,000 | 510,120 |
| Iconix Brand Group, Inc. * | 70,800 | 495,600 |
| Installed Building Products, Inc. * | 34,471 | 1,839,028 |
| iRobot Corp. * | 44,845 | 3,575,940 |
| JAKKS Pacific, Inc. * | 51,300 | 251,370 |
| Johnson Outdoors, Inc., Class A | 8,500 | 308,720 |
| KB Home | 134,700 | 2,774,820 |
| La-Z-Boy, Inc. | 78,200 | 2,181,780 |
| LGI Homes, Inc. *(a) | 25,200 | 802,116 |
| Libbey, Inc. | 34,479 | 362,030 |
| Lifetime Brands, Inc. | 20,300 | 389,760 |
| M.D.C. Holdings, Inc. | 75,907 | 2,353,876 |
| M/I Homes, Inc. * | 41,000 | 1,113,560 |
| Malibu Boats, Inc., Class A * | 32,461 | 747,901 |
| Marine Products Corp. | 13,700 | 163,852 |
| MCBC Holdings, Inc. | 15,200 | 254,600 |
| Meritage Homes Corp. * | 63,985 | 2,492,216 |
| Movado Group, Inc. | 23,100 | 540,540 |
| NACCO Industries, Inc., Class A | 5,477 | 463,628 |
| Nautilus, Inc. * | 50,200 | 913,640 |
| Oxford Industries, Inc. | 25,196 | 1,460,864 |
| Perry Ellis International, Inc. * | 22,300 | 457,596 |
| Sequential Brands Group, Inc. * | 60,752 | 204,734 |
| Steven Madden Ltd. * | 101,176 | 3,849,747 |
| Sturm, Ruger & Co., Inc. (a) | 29,000 | 1,753,050 |
| Superior Uniform Group, Inc. | 9,527 | 173,773 |
| Taylor Morrison Home Corp., Class A * | 68,200 | 1,575,420 |
| The New Home Co., Inc. * | 33,349 | 388,849 |
| TopBuild Corp. * | 64,000 | 3,276,160 |
| TRI Pointe Group, Inc. * | 237,900 | 2,961,855 |
| UCP, Inc., Class A * | 12,900 | 147,705 |
| Unifi, Inc. * | 26,500 | 743,855 |
| Universal Electronics, Inc. * | 22,200 | 1,538,460 |
| Vera Bradley, Inc. * | 31,500 | 288,225 |
| Vince Holding Corp. *(a) | 46,214 | 46,214 |
| Security | Number
of Shares | Value ($) |
| William Lyon Homes, Class A * | 39,800 | 875,600 |
| Wolverine World Wide, Inc. | 157,747 | 3,803,280 |
| ZAGG, Inc. * | 39,621 | 281,309 |
| | | 73,992,366 |
| |
| Consumer Services 4.1% |
| American Public Education, Inc. * | 25,200 | 556,920 |
| Ascent Capital Group, Inc., Class A * | 14,700 | 188,307 |
| Belmond Ltd., Class A * | 132,400 | 1,641,760 |
| Biglari Holdings, Inc. * | 1,710 | 729,537 |
| BJ's Restaurants, Inc. * | 37,000 | 1,668,700 |
| Bloomin' Brands, Inc. | 175,213 | 3,800,370 |
| Bob Evans Farms, Inc. | 32,946 | 2,198,816 |
| Bojangles', Inc. * | 19,350 | 424,733 |
| Boyd Gaming Corp. * | 130,300 | 2,955,204 |
| Bridgepoint Education, Inc. * | 34,700 | 423,340 |
| Bright Horizons Family Solutions, Inc. * | 72,821 | 5,543,135 |
| Buffalo Wild Wings, Inc. * | 26,779 | 4,219,031 |
| Caesars Acquisition Co., Class A * | 78,500 | 1,369,825 |
| Caesars Entertainment Corp. *(a) | 87,400 | 970,140 |
| Cambium Learning Group, Inc. * | 18,000 | 87,660 |
| Capella Education Co. | 18,500 | 1,763,050 |
| Career Education Corp. * | 109,600 | 1,112,440 |
| Carriage Services, Inc. | 21,800 | 596,230 |
| Carrols Restaurant Group, Inc. * | 51,700 | 723,800 |
| Century Casinos, Inc. * | 32,600 | 268,298 |
| Chegg, Inc. * | 147,800 | 1,331,678 |
| Churchill Downs, Inc. | 21,514 | 3,588,535 |
| Chuy's Holdings, Inc. * | 27,800 | 828,440 |
| ClubCorp Holdings, Inc. | 108,111 | 1,454,093 |
| Collectors Universe, Inc. | 10,100 | 275,831 |
| Cracker Barrel Old Country Store, Inc. (a) | 32,116 | 5,144,662 |
| Dave & Buster's Entertainment, Inc. * | 62,468 | 3,998,577 |
| Del Frisco's Restaurant Group, Inc. * | 36,200 | 622,640 |
| Del Taco Restaurants, Inc. * | 49,600 | 652,240 |
| Denny's Corp. * | 118,900 | 1,510,030 |
| DeVry Education Group, Inc. | 100,884 | 3,818,459 |
| DineEquity, Inc. | 27,397 | 1,549,026 |
| El Pollo Loco Holdings, Inc. * | 31,000 | 389,050 |
| Eldorado Resorts, Inc. * | 48,009 | 918,172 |
| Empire Resorts, Inc. *(a) | 4,421 | 110,525 |
| Fiesta Restaurant Group, Inc. * | 50,100 | 1,219,935 |
| Fogo De Chao, Inc. * | 4,700 | 79,665 |
| Golden Entertainment, Inc. | 15,300 | 214,812 |
| Grand Canyon Education, Inc. * | 74,875 | 5,627,605 |
| Houghton Mifflin Harcourt Co. * | 199,494 | 2,294,181 |
| ILG, Inc. | 182,200 | 4,392,842 |
| International Speedway Corp., Class A | 43,500 | 1,613,850 |
| Intrawest Resorts Holdings, Inc. * | 23,900 | 563,562 |
| Isle of Capri Casinos, Inc. *(a) | 44,200 | 1,019,252 |
| J Alexander's Holdings, Inc. * | 21,043 | 231,473 |
| Jack in the Box, Inc. | 53,008 | 5,405,226 |
| Jamba, Inc. *(a) | 20,260 | 172,615 |
| K12, Inc. * | 58,449 | 1,101,764 |
| Kona Grill, Inc. * | 17,119 | 97,578 |
| La Quinta Holdings, Inc. * | 147,002 | 2,074,198 |
| Laureate Education, Inc., Class A * | 69,900 | 965,319 |
| Liberty Tax, Inc. | 11,700 | 164,385 |
| Lindblad Expeditions Holdings, Inc. * | 22,700 | 215,650 |
| Luby's, Inc. * | 27,700 | 81,438 |
| Marriott Vacations Worldwide Corp. | 35,885 | 3,953,809 |
| Monarch Casino & Resort, Inc. * | 17,800 | 524,566 |
| Nathan's Famous, Inc. * | 4,700 | 320,540 |
| Noodles & Co. *(a) | 15,900 | 93,015 |
| Papa John's International, Inc. | 45,011 | 3,558,570 |
| Penn National Gaming, Inc. * | 140,200 | 2,590,896 |
| Pinnacle Entertainment, Inc. * | 89,247 | 1,835,811 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Planet Fitness, Inc., Class A | 41,400 | 861,120 |
| Potbelly Corp. * | 34,100 | 475,695 |
| Red Lion Hotels Corp. * | 22,200 | 144,300 |
| Red Robin Gourmet Burgers, Inc. * | 21,700 | 1,274,875 |
| Red Rock Resorts, Inc., Class A | 45,300 | 1,059,114 |
| Regis Corp. * | 74,400 | 811,704 |
| Ruby Tuesday, Inc. * | 87,200 | 222,360 |
| Ruth's Hospitality Group, Inc. | 50,500 | 1,004,950 |
| Scientific Games Corp., Class A * | 86,800 | 2,061,500 |
| SeaWorld Entertainment, Inc. | 111,923 | 1,962,010 |
| Shake Shack, Inc., Class A * | 24,200 | 821,348 |
| Sonic Corp. | 73,401 | 1,973,019 |
| Sotheby's * | 81,400 | 3,855,104 |
| Speedway Motorsports, Inc. | 25,284 | 456,376 |
| Strayer Education, Inc. | 16,400 | 1,422,044 |
| Texas Roadhouse, Inc. | 110,896 | 5,198,805 |
| The Cheesecake Factory, Inc. | 73,667 | 4,726,475 |
| The Habit Restaurants, Inc., Class A * | 24,711 | 467,038 |
| The Marcus Corp. | 27,300 | 922,740 |
| Weight Watchers International, Inc. *(a) | 52,800 | 1,102,464 |
| Wingstop, Inc. | 24,300 | 715,149 |
| Zoe's Kitchen, Inc. * | 30,502 | 550,561 |
| | | 129,934,562 |
| |
| Diversified Financials 3.1% |
| AG Mortgage Investment Trust, Inc. | 41,300 | 782,635 |
| Anworth Mortgage Asset Corp. | 149,900 | 878,414 |
| Apollo Commercial Real Estate Finance, Inc. | 133,843 | 2,581,831 |
| Ares Commercial Real Estate Corp. | 41,900 | 579,477 |
| Arlington Asset Investment Corp., Class A (a) | 33,300 | 484,848 |
| ARMOUR Residential REIT, Inc. | 65,529 | 1,577,283 |
| Associated Capital Group, Inc., Class A | 9,700 | 326,405 |
| B. Riley Financial, Inc. | 13,500 | 203,175 |
| BGC Partners, Inc., Class A | 344,000 | 3,914,720 |
| Capstead Mortgage Corp. | 145,829 | 1,624,535 |
| Cohen & Steers, Inc. | 37,128 | 1,481,407 |
| Cowen Group, Inc., Class A * | 42,475 | 675,353 |
| CYS Investments, Inc. | 246,361 | 2,101,459 |
| Diamond Hill Investment Group, Inc. | 4,700 | 950,105 |
| Dynex Capital, Inc. | 77,200 | 534,224 |
| Encore Capital Group, Inc. * | 43,300 | 1,444,055 |
| Enova International, Inc. * | 44,836 | 636,671 |
| Evercore Partners, Inc., Class A | 62,600 | 4,616,750 |
| EZCORP, Inc., Class A * | 77,400 | 700,470 |
| FBR & Co. | 8,200 | 148,420 |
| Financial Engines, Inc. | 88,300 | 3,752,750 |
| FirstCash, Inc. | 78,127 | 4,058,698 |
| FNFV Group * | 111,036 | 1,521,193 |
| GAIN Capital Holdings, Inc. | 70,000 | 496,300 |
| GAMCO Investors, Inc., Class A | 9,700 | 278,390 |
| Great Ajax Corp. | 19,800 | 269,280 |
| Green Dot Corp., Class A * | 69,341 | 2,377,703 |
| Greenhill & Co., Inc. | 49,529 | 1,253,084 |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 84,645 | 1,855,418 |
| Hennessy Advisors, Inc. | 6,600 | 112,266 |
| Houlihan Lokey, Inc. | 36,500 | 1,224,210 |
| INTL. FCStone, Inc. * | 25,100 | 937,485 |
| Invesco Mortgage Capital, Inc. | 177,906 | 2,901,647 |
| Investment Technology Group, Inc. | 50,565 | 1,006,749 |
| Janus Capital Group, Inc. | 242,153 | 3,307,810 |
| KCG Holdings, Inc., Class A * | 72,581 | 1,444,362 |
| Ladder Capital Corp. | 70,955 | 1,038,072 |
| Ladenburg Thalmann Financial Services, Inc. * | 142,600 | 396,428 |
| Security | Number
of Shares | Value ($) |
| LendingClub Corp. * | 532,500 | 3,115,125 |
| Manning & Napier, Inc. | 22,200 | 128,760 |
| Marlin Business Services Corp. | 11,600 | 295,220 |
| Medley Management, Inc., Class A | 14,400 | 110,880 |
| Moelis & Co., Class A | 39,024 | 1,432,181 |
| MTGE Investment Corp. | 76,700 | 1,380,600 |
| Nelnet, Inc., Class A | 34,800 | 1,566,348 |
| New Residential Investment Corp. | 488,397 | 8,141,578 |
| New York Mortgage Trust, Inc. | 175,200 | 1,123,032 |
| NewStar Financial, Inc. | 36,500 | 392,010 |
| OM Asset Management plc | 72,800 | 1,132,768 |
| On Deck Capital, Inc. * | 74,200 | 352,450 |
| Oppenheimer Holdings, Inc., Class A | 13,800 | 238,740 |
| Orchid Island Capital, Inc. (a) | 49,659 | 526,385 |
| Owens Realty Mortgage, Inc. | 14,500 | 263,320 |
| PennyMac Mortgage Investment Trust | 109,621 | 1,960,024 |
| PICO Holdings, Inc. * | 39,800 | 640,780 |
| Piper Jaffray Cos. | 23,729 | 1,485,435 |
| PJT Partners, Inc., Class A | 26,900 | 932,354 |
| PRA Group, Inc. * | 72,581 | 2,337,108 |
| Pzena Investment Management, Inc., Class A | 27,100 | 278,859 |
| Redwood Trust, Inc. | 137,700 | 2,350,539 |
| Regional Management Corp. * | 15,700 | 311,331 |
| Resource Capital Corp. | 49,037 | 458,496 |
| Safeguard Scientifics, Inc. * | 36,500 | 463,550 |
| Silvercrest Asset Management Group, Inc., Class A | 9,800 | 133,770 |
| Stifel Financial Corp. * | 108,310 | 5,293,110 |
| Tiptree, Inc. | 55,800 | 393,390 |
| Virtu Financial, Inc., Class A | 38,271 | 589,373 |
| Virtus Investment Partners, Inc. | 8,700 | 925,680 |
| Waddell & Reed Financial, Inc., Class A | 132,600 | 2,385,474 |
| Western Asset Mortgage Capital Corp. | 78,856 | 830,354 |
| Westwood Holdings Group, Inc. | 11,500 | 641,700 |
| Wins Finance Holdings, Inc. *(a) | 2,000 | 91,680 |
| WisdomTree Investments, Inc. (a) | 190,100 | 1,587,335 |
| World Acceptance Corp. * | 8,900 | 470,810 |
| | | 99,234,631 |
| |
| Energy 3.1% |
| Abraxas Petroleum Corp. * | 221,800 | 414,766 |
| Adams Resources & Energy, Inc. | 2,900 | 117,798 |
| Alon USA Energy, Inc. | 48,900 | 591,201 |
| Archrock, Inc. | 117,228 | 1,383,290 |
| Ardmore Shipping Corp. | 46,500 | 360,375 |
| Atwood Oceanics, Inc. * | 121,621 | 952,292 |
| Bill Barrett Corp. * | 101,398 | 389,368 |
| Bristow Group, Inc. | 56,862 | 760,245 |
| California Resources Corp. *(a) | 49,100 | 574,470 |
| Callon Petroleum Co. * | 312,100 | 3,695,264 |
| CARBO Ceramics, Inc. * | 39,300 | 269,991 |
| Carrizo Oil & Gas, Inc. * | 102,411 | 2,575,637 |
| Clean Energy Fuels Corp. * | 213,938 | 522,009 |
| Cobalt International Energy, Inc. * | 827,000 | 323,440 |
| Contango Oil & Gas Co. * | 39,820 | 285,111 |
| CVR Energy, Inc. (a) | 24,800 | 542,872 |
| Dawson Geophysical Co. * | 32,400 | 162,972 |
| Delek US Holdings, Inc. | 97,187 | 2,339,291 |
| Denbury Resources, Inc. * | 544,100 | 1,207,902 |
| DHT Holdings, Inc. | 135,900 | 650,961 |
| Dorian LPG Ltd. * | 42,703 | 388,170 |
| Eclipse Resources Corp. * | 105,000 | 211,050 |
| EP Energy Corp., Class A *(a) | 60,500 | 273,460 |
| Era Group, Inc. * | 28,700 | 364,777 |
| Evolution Petroleum Corp. | 46,800 | 374,400 |
| EXCO Resources, Inc. * | 222,774 | 109,159 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Exterran Corp. * | 52,414 | 1,434,571 |
| Fairmount Santrol Holdings, Inc. * | 143,153 | 738,670 |
| Forum Energy Technologies, Inc. * | 105,755 | 1,787,260 |
| Frontline Ltd. (a) | 121,763 | 809,724 |
| GasLog Ltd. | 61,800 | 865,200 |
| Gener8 Maritime, Inc. * | 60,600 | 325,422 |
| Geospace Technologies Corp. * | 19,800 | 327,492 |
| Golar LNG Ltd. | 156,600 | 3,994,866 |
| Green Plains, Inc. | 61,700 | 1,419,100 |
| Helix Energy Solutions Group, Inc. * | 222,707 | 1,362,967 |
| Hornbeck Offshore Services, Inc. *(a) | 54,245 | 184,976 |
| Independence Contract Drilling, Inc. * | 46,000 | 212,060 |
| International Seaways, Inc. * | 29,098 | 562,464 |
| Isramco, Inc. * | 1,400 | 159,740 |
| Jagged Peak Energy, Inc. * | 53,000 | 590,420 |
| Jones Energy, Inc., Class A *(a) | 103,782 | 207,564 |
| Keane Group, Inc. *(a) | 52,500 | 725,550 |
| Mammoth Energy Services, Inc. * | 14,200 | 274,060 |
| Matador Resources Co. * | 150,162 | 3,255,512 |
| Matrix Service Co. * | 39,700 | 466,475 |
| McDermott International, Inc. * | 382,385 | 2,500,798 |
| Natural Gas Services Group, Inc. * | 20,500 | 561,700 |
| Navios Maritime Acquisition Corp. | 120,600 | 203,814 |
| Newpark Resources, Inc. * | 126,710 | 969,332 |
| Noble Energy, Inc. | 28,094 | 908,272 |
| Nordic American Tankers Ltd. (a) | 175,400 | 1,455,820 |
| Northern Oil & Gas, Inc. *(a) | 77,600 | 174,600 |
| Oasis Petroleum, Inc. * | 390,510 | 4,662,689 |
| Oil States International, Inc. * | 84,500 | 2,513,875 |
| Overseas Shipholding Group, Inc., Class A * | 85,400 | 310,856 |
| Pacific Ethanol, Inc. * | 65,500 | 445,400 |
| Panhandle Oil & Gas, Inc., Class A | 24,200 | 458,590 |
| Par Pacific Holdings, Inc. * | 54,038 | 884,602 |
| Parker Drilling Co. * | 181,265 | 299,087 |
| PDC Energy, Inc. * | 92,603 | 5,114,464 |
| PHI, Inc. - Non Voting Shares * | 19,572 | 229,580 |
| Pioneer Energy Services Corp. * | 118,500 | 361,425 |
| Renewable Energy Group, Inc. * | 64,600 | 675,070 |
| REX American Resources Corp. * | 8,500 | 804,780 |
| RigNet, Inc. * | 26,200 | 513,520 |
| Ring Energy, Inc. * | 68,900 | 826,800 |
| RSP Permian, Inc. * | 161,025 | 6,127,001 |
| Sanchez Energy Corp. * | 109,253 | 845,618 |
| Scorpio Tankers, Inc. | 268,102 | 1,179,649 |
| SEACOR Holdings, Inc. * | 25,700 | 1,687,462 |
| Seadrill Ltd. * | 586,200 | 404,361 |
| SemGroup Corp., Class A | 111,803 | 3,723,040 |
| Ship Finance International Ltd. (a) | 93,500 | 1,313,675 |
| Smart Sand, Inc. * | 20,600 | 250,908 |
| SRC Energy, Inc. * | 295,412 | 2,227,407 |
| Teekay Corp. | 87,700 | 761,236 |
| Teekay Tankers Ltd., Class A | 181,000 | 371,050 |
| Tesco Corp. * | 77,100 | 505,005 |
| TETRA Technologies, Inc. * | 186,374 | 620,625 |
| Tidewater, Inc. *(a) | 69,195 | 60,649 |
| Unit Corp. * | 80,078 | 1,720,876 |
| US Silica Holdings, Inc. | 125,300 | 5,199,950 |
| W&T Offshore, Inc. * | 121,800 | 248,472 |
| Western Refining, Inc. | 133,142 | 4,592,068 |
| Westmoreland Coal Co. * | 27,052 | 288,374 |
| WildHorse Resource Development Corp. * | 35,900 | 391,669 |
| Willbros Group, Inc. * | 69,500 | 191,125 |
| | | 97,129,658 |
| |
| Security | Number
of Shares | Value ($) |
| Food & Staples Retailing 0.5% |
| Ingles Markets, Inc., Class A | 21,231 | 991,488 |
| Natural Grocers by Vitamin Cottage, Inc. * | 12,600 | 137,844 |
| Performance Food Group Co. * | 63,600 | 1,583,640 |
| PriceSmart, Inc. | 33,200 | 2,886,740 |
| Smart & Final Stores, Inc. * | 37,600 | 443,680 |
| SpartanNash, Co. | 57,833 | 2,128,254 |
| SUPERVALU, Inc. * | 475,536 | 1,949,698 |
| The Andersons, Inc. | 48,123 | 1,797,394 |
| The Chefs' Warehouse, Inc. * | 28,300 | 386,295 |
| United Natural Foods, Inc. * | 83,682 | 3,475,313 |
| Village Super Market, Inc., Class A | 11,600 | 306,124 |
| Weis Markets, Inc. | 15,800 | 913,398 |
| | | 16,999,868 |
| |
| Food, Beverage & Tobacco 1.8% |
| AdvancePierre Foods Holdings, Inc. | 34,300 | 1,393,266 |
| Alico, Inc. | 4,700 | 140,765 |
| Alliance One International, Inc. * | 13,400 | 184,250 |
| Amplify Snack Brands, Inc. *(a) | 45,700 | 411,300 |
| B&G Foods, Inc. | 109,757 | 4,609,794 |
| Cal-Maine Foods, Inc. (a) | 51,116 | 1,929,629 |
| Calavo Growers, Inc. | 26,288 | 1,724,493 |
| Coca-Cola Bottling Co. Consolidated | 7,500 | 1,588,950 |
| Craft Brew Alliance, Inc. * | 27,800 | 378,080 |
| Darling Ingredients, Inc. * | 272,900 | 4,128,977 |
| Dean Foods Co. | 151,800 | 2,996,532 |
| Farmer Brothers Co. * | 13,700 | 486,350 |
| Fresh Del Monte Produce, Inc. | 52,461 | 3,215,859 |
| Freshpet, Inc. * | 34,850 | 409,487 |
| Inventure Foods, Inc. * | 29,000 | 107,300 |
| J&J Snack Foods Corp. | 25,281 | 3,402,317 |
| John B. Sanfilippo & Son, Inc. | 13,100 | 962,850 |
| Lancaster Colony Corp. | 31,256 | 3,935,130 |
| Landec Corp. * | 44,654 | 613,992 |
| Lifeway Foods, Inc. * | 10,100 | 96,960 |
| Limoneira Co. | 17,600 | 363,968 |
| MGP Ingredients, Inc. | 23,147 | 1,211,977 |
| National Beverage Corp. | 18,601 | 1,647,863 |
| Omega Protein Corp. | 39,500 | 795,925 |
| Primo Water Corp. * | 33,600 | 402,192 |
| Sanderson Farms, Inc. | 32,843 | 3,802,563 |
| Seaboard Corp. | 420 | 1,778,284 |
| Seneca Foods Corp., Class A * | 12,400 | 461,280 |
| Snyder's-Lance, Inc. | 132,610 | 4,675,829 |
| The Boston Beer Co., Inc., Class A * | 14,200 | 2,049,770 |
| Tootsie Roll Industries, Inc. (a) | 26,835 | 1,002,272 |
| Turning Point Brands, Inc. * | 9,200 | 145,452 |
| Universal Corp. | 40,424 | 2,969,143 |
| Vector Group Ltd. | 159,143 | 3,456,586 |
| | | 57,479,385 |
| |
| Health Care Equipment & Services 5.5% |
| AAC Holdings, Inc. *(a) | 11,800 | 84,488 |
| Abaxis, Inc. | 34,300 | 1,544,529 |
| Accuray, Inc. * | 141,000 | 641,550 |
| Aceto Corp. | 46,000 | 729,100 |
| Addus HomeCare Corp. * | 12,500 | 424,375 |
| Almost Family, Inc. * | 17,900 | 888,735 |
| Amedisys, Inc. * | 43,900 | 2,379,380 |
| American Renal Associates Holdings, Inc. * | 13,500 | 232,335 |
| AMN Healthcare Services, Inc. * | 79,800 | 3,259,830 |
| Analogic Corp. | 22,154 | 1,591,765 |
| AngioDynamics, Inc. * | 41,100 | 637,872 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Anika Therapeutics, Inc. * | 21,900 | 1,010,247 |
| AtriCure, Inc. * | 55,000 | 1,127,500 |
| Atrion Corp. | 2,300 | 1,189,330 |
| Avinger, Inc. * | 17,500 | 9,847 |
| AxoGen, Inc. * | 38,300 | 467,260 |
| BioScrip, Inc. * | 170,400 | 259,008 |
| BioTelemetry, Inc. * | 45,800 | 1,506,820 |
| Cantel Medical Corp. | 58,445 | 4,348,893 |
| Capital Senior Living Corp. * | 44,800 | 625,856 |
| Cardiovascular Systems, Inc. * | 51,700 | 1,544,279 |
| Castlight Health, Inc., Class B * | 76,373 | 294,036 |
| Cerus Corp. * | 160,500 | 698,175 |
| Chemed Corp. | 26,398 | 5,316,029 |
| Civitas Solutions, Inc. * | 23,800 | 423,640 |
| Community Health Systems, Inc. * | 196,100 | 1,688,421 |
| Computer Programs & Systems, Inc. (a) | 17,500 | 480,375 |
| ConforMIS, Inc. * | 56,000 | 314,720 |
| CONMED Corp. | 44,100 | 2,167,956 |
| Corindus Vascular Robotics, Inc. *(a) | 84,000 | 105,840 |
| CorVel Corp. * | 14,500 | 645,250 |
| Cotiviti Holdings, Inc. * | 19,000 | 794,010 |
| Cross Country Healthcare, Inc. * | 62,715 | 876,129 |
| CryoLife, Inc. * | 47,300 | 858,495 |
| Cutera, Inc. * | 18,705 | 365,683 |
| Diplomat Pharmacy, Inc. * | 70,588 | 1,101,173 |
| Endologix, Inc. * | 153,537 | 1,149,992 |
| Entellus Medical, Inc. * | 18,800 | 267,336 |
| Evolent Health, Inc., Class A * | 27,400 | 637,050 |
| Exactech, Inc. * | 22,500 | 667,125 |
| Genesis Healthcare, Inc. * | 48,100 | 116,402 |
| GenMark Diagnostics, Inc. * | 73,500 | 942,270 |
| Glaukos Corp. * | 29,200 | 1,387,876 |
| Globus Medical, Inc., Class A * | 116,500 | 3,533,445 |
| Haemonetics Corp. * | 87,100 | 3,647,748 |
| Halyard Health, Inc. * | 80,293 | 3,171,574 |
| HealthEquity, Inc. * | 71,334 | 3,247,124 |
| HealthSouth Corp. | 148,800 | 6,978,720 |
| HealthStream, Inc. * | 41,900 | 1,164,401 |
| HMS Holdings Corp. * | 139,352 | 2,852,535 |
| ICU Medical, Inc. * | 24,200 | 3,721,960 |
| Inogen, Inc. * | 27,098 | 2,246,153 |
| Insulet Corp. * | 95,000 | 4,123,950 |
| Integer Holdings Corp. * | 51,900 | 1,907,325 |
| Integra LifeSciences Holdings Corp. * | 99,496 | 4,573,831 |
| Invacare Corp. | 66,311 | 974,772 |
| InVivo Therapeutics Holdings Corp. *(a) | 58,398 | 221,912 |
| iRadimed Corp. * | 4,000 | 34,400 |
| iRhythm Technologies, Inc. * | 12,000 | 423,480 |
| IRIDEX Corp. * | 12,100 | 137,940 |
| K2M Group Holdings, Inc. * | 39,900 | 883,785 |
| Kindred Healthcare, Inc. | 144,823 | 1,390,301 |
| Landauer, Inc. | 16,200 | 852,120 |
| LeMaitre Vascular, Inc. | 22,335 | 664,466 |
| LHC Group, Inc. * | 25,700 | 1,390,370 |
| Magellan Health, Inc. * | 37,268 | 2,564,038 |
| Masimo Corp. * | 71,000 | 7,294,540 |
| Medidata Solutions, Inc. * | 91,200 | 5,967,216 |
| Meridian Bioscience, Inc. | 64,350 | 952,380 |
| Merit Medical Systems, Inc. * | 83,800 | 2,824,060 |
| Molina Healthcare, Inc. * | 70,943 | 3,532,252 |
| NantHealth, Inc. *(a) | 14,800 | 46,028 |
| National HealthCare Corp. | 18,188 | 1,353,551 |
| National Research Corp., Class A | 12,500 | 310,000 |
| Natus Medical, Inc. * | 51,000 | 1,785,000 |
| Neogen Corp * | 60,325 | 3,760,057 |
| Nevro Corp. * | 38,864 | 3,661,766 |
| Nobilis Health Corp. *(a) | 88,191 | 110,239 |
| Novocure Ltd. *(a) | 78,600 | 888,180 |
| Security | Number
of Shares | Value ($) |
| NuVasive, Inc. * | 80,800 | 5,858,808 |
| NxStage Medical, Inc. * | 104,600 | 3,126,494 |
| Omnicell, Inc. * | 57,200 | 2,368,080 |
| OraSure Technologies, Inc. * | 87,400 | 1,145,814 |
| Orthofix International N.V. * | 28,200 | 1,115,310 |
| Owens & Minor, Inc. | 103,200 | 3,575,880 |
| Oxford Immunotec Global plc * | 40,500 | 623,295 |
| Penumbra, Inc. * | 45,500 | 3,887,975 |
| PharMerica Corp. * | 47,100 | 1,111,560 |
| Quality Systems, Inc. * | 80,100 | 1,142,226 |
| Quidel Corp. * | 47,500 | 1,148,075 |
| Quorum Health Corp. * | 46,100 | 196,847 |
| RadNet, Inc. * | 48,000 | 290,400 |
| Rockwell Medical, Inc. *(a) | 78,700 | 676,820 |
| RTI Surgical, Inc. * | 75,200 | 304,560 |
| Second Sight Medical Products, Inc. *(a) | 96,771 | 112,254 |
| Select Medical Holdings Corp. * | 184,411 | 2,535,651 |
| Senseonics Holdings, Inc. * | 45,600 | 77,064 |
| STAAR Surgical Co. * | 66,600 | 692,640 |
| Surgery Partners, Inc. * | 35,400 | 608,880 |
| Surmodics, Inc. * | 20,400 | 466,140 |
| Tabula Rasa HealthCare, Inc. * | 10,800 | 145,584 |
| Tactile Systems Technology, Inc. * | 7,100 | 133,835 |
| Teladoc, Inc. *(a) | 40,400 | 1,001,920 |
| The Ensign Group, Inc. | 79,500 | 1,427,025 |
| The Providence Service Corp. * | 21,100 | 928,400 |
| The Spectranetics Corp. * | 68,736 | 1,965,850 |
| Tivity Health, Inc. * | 54,800 | 1,841,280 |
| TransEnterix, Inc. *(a) | 143,700 | 93,405 |
| Triple-S Management Corp., Class B * | 38,900 | 704,090 |
| U.S. Physical Therapy, Inc. | 19,300 | 1,266,080 |
| Utah Medical Products, Inc. | 5,200 | 325,520 |
| Vocera Communications, Inc. * | 37,100 | 940,856 |
| Wright Medical Group N.V. * | 173,161 | 5,262,363 |
| | | 176,093,582 |
| |
| Household & Personal Products 0.6% |
| Avon Products, Inc. * | 752,900 | 3,651,565 |
| Central Garden & Pet Co. * | 15,400 | 582,120 |
| Central Garden & Pet Co., Class A * | 57,500 | 2,025,725 |
| elf Beauty, Inc. *(a) | 16,000 | 436,000 |
| HRG Group, Inc. * | 192,500 | 3,851,925 |
| Inter Parfums, Inc. | 30,100 | 1,142,295 |
| Lifevantage Corp. * | 21,200 | 105,152 |
| Medifast, Inc. | 17,579 | 814,259 |
| Natural Health Trends Corp. (a) | 12,400 | 355,632 |
| Nature's Sunshine Products, Inc. | 15,000 | 151,500 |
| Nutraceutical International Corp. | 12,300 | 389,910 |
| Oil-Dri Corp. of America | 6,887 | 280,232 |
| Orchids Paper Products Co. (a) | 15,900 | 387,165 |
| Revlon, Inc., Class A * | 18,602 | 482,722 |
| Synutra International, Inc. * | 23,200 | 139,780 |
| USANA Health Sciences, Inc. * | 16,400 | 932,340 |
| WD-40 Co. | 23,900 | 2,505,915 |
| | | 18,234,237 |
| |
| Insurance 2.4% |
| Ambac Financial Group, Inc. * | 72,600 | 1,410,618 |
| American Equity Investment Life Holding Co. | 146,264 | 3,469,382 |
| AMERISAFE, Inc. | 30,735 | 1,768,799 |
| Argo Group International Holdings Ltd. | 47,531 | 3,134,669 |
| Atlas Financial Holdings, Inc. * | 16,900 | 218,855 |
| Baldwin & Lyons, Inc., Class B | 13,000 | 318,500 |
| Blue Capital Reinsurance Holdings Ltd. | 9,100 | 171,990 |
| Citizens, Inc. *(a) | 80,500 | 567,525 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| CNO Financial Group, Inc. | 290,468 | 6,120,161 |
| Crawford & Co., Class B | 20,800 | 226,928 |
| Donegal Group, Inc., Class A | 10,400 | 173,264 |
| eHealth, Inc. * | 23,600 | 334,648 |
| EMC Insurance Group, Inc. | 14,300 | 410,124 |
| Employers Holdings, Inc. | 51,300 | 2,052,000 |
| Enstar Group Ltd. * | 19,194 | 3,738,991 |
| FBL Financial Group, Inc., Class A | 16,468 | 1,095,122 |
| Federated National Holding Co. | 20,246 | 325,556 |
| Fidelity & Guaranty Life (a) | 19,200 | 546,240 |
| Genworth Financial, Inc., Class A * | 865,600 | 3,497,024 |
| Global Indemnity Ltd. * | 14,755 | 598,315 |
| Greenlight Capital Re Ltd., Class A * | 50,689 | 1,092,348 |
| Hallmark Financial Services, Inc. * | 21,200 | 222,812 |
| HCI Group, Inc. | 13,800 | 658,122 |
| Heritage Insurance Holdings, Inc. | 40,462 | 489,590 |
| Horace Mann Educators Corp. | 63,478 | 2,453,425 |
| Independence Holding Co. | 11,248 | 213,150 |
| Infinity Property & Casualty Corp. | 18,092 | 1,795,631 |
| Investors Title Co. | 2,200 | 392,084 |
| James River Group Holdings Ltd. | 24,700 | 1,075,932 |
| Kemper Corp. | 63,414 | 2,495,341 |
| Kinsale Capital Group, Inc. | 11,700 | 423,072 |
| Maiden Holdings Ltd. | 124,800 | 1,541,280 |
| MBIA, Inc. * | 214,184 | 1,799,146 |
| National General Holdings Corp. | 83,300 | 1,894,242 |
| National Western Life Group, Inc., Class A | 3,494 | 1,070,003 |
| OneBeacon Insurance Group Ltd., Class A | 33,400 | 532,730 |
| Patriot National, Inc. *(a) | 15,800 | 45,662 |
| Primerica, Inc. | 77,100 | 6,460,980 |
| RLI Corp. | 62,220 | 3,560,228 |
| Safety Insurance Group, Inc. | 22,770 | 1,648,548 |
| Selective Insurance Group, Inc. | 92,514 | 4,884,739 |
| State Auto Financial Corp. | 24,726 | 664,388 |
| State National Cos., Inc. | 46,500 | 682,155 |
| Stewart Information Services Corp. | 38,800 | 1,840,672 |
| The Navigators Group, Inc. | 39,240 | 2,120,922 |
| Third Point Reinsurance Ltd. * | 120,860 | 1,462,406 |
| Trupanion, Inc. *(a) | 21,300 | 338,457 |
| United Fire Group, Inc. | 36,800 | 1,619,200 |
| United Insurance Holdings Corp. | 24,400 | 372,344 |
| Universal Insurance Holdings, Inc. | 53,822 | 1,402,063 |
| WMIH Corp. * | 313,200 | 469,800 |
| | | 75,900,183 |
| |
| Materials 5.1% |
| A. Schulman, Inc. | 45,609 | 1,443,525 |
| AgroFresh Solutions, Inc. * | 35,000 | 196,350 |
| AK Steel Holding Corp. * | 505,900 | 3,207,406 |
| Allegheny Technologies, Inc. | 175,500 | 3,220,425 |
| American Vanguard Corp. | 42,700 | 715,225 |
| Ampco-Pittsburgh Corp. | 14,400 | 209,520 |
| Balchem Corp. | 50,700 | 4,114,812 |
| Boise Cascade Co. * | 60,800 | 1,854,400 |
| Calgon Carbon Corp. | 79,785 | 1,160,872 |
| Carpenter Technology Corp. | 75,844 | 3,079,266 |
| Century Aluminum Co. * | 83,000 | 1,132,120 |
| Chase Corp. | 12,100 | 1,240,250 |
| Clearwater Paper Corp. * | 27,200 | 1,321,920 |
| Cliffs Natural Resources, Inc. * | 454,359 | 3,053,293 |
| Codexis, Inc. * | 53,500 | 235,400 |
| Coeur Mining, Inc. * | 305,213 | 2,765,230 |
| Commercial Metals Co. | 183,500 | 3,420,440 |
| Deltic Timber Corp. | 19,121 | 1,479,392 |
| Ferro Corp. * | 143,800 | 2,576,896 |
| Ferroglobe plc | 108,500 | 1,047,025 |
| Security | Number
of Shares | Value ($) |
| Ferroglobe Representation & Warranty Insurance *(d) | 108,500 | — |
| Flotek Industries, Inc. *(a) | 88,700 | 1,065,287 |
| Forterra, Inc. * | 31,100 | 598,364 |
| FutureFuel Corp. | 40,400 | 624,584 |
| GCP Applied Technologies, Inc. * | 115,400 | 3,796,660 |
| Gold Resource Corp. | 81,400 | 268,620 |
| Greif, Inc., Class A | 42,494 | 2,490,998 |
| Greif, Inc., Class B | 8,700 | 585,945 |
| H.B. Fuller Co. | 82,094 | 4,337,026 |
| Handy & Harman Ltd. * | 4,800 | 130,800 |
| Hawkins, Inc. | 15,500 | 792,050 |
| Haynes International, Inc. | 21,325 | 901,834 |
| Headwaters, Inc. * | 125,600 | 2,984,256 |
| Hecla Mining Co. | 646,540 | 3,523,643 |
| Ingevity Corp. * | 71,500 | 4,520,945 |
| Innophos Holdings, Inc. | 30,300 | 1,452,582 |
| Innospec, Inc. | 40,900 | 2,699,400 |
| Kaiser Aluminum Corp. | 27,743 | 2,341,787 |
| KapStone Paper & Packaging Corp. | 142,303 | 3,001,170 |
| KMG Chemicals, Inc. | 16,800 | 882,840 |
| Koppers Holdings, Inc. * | 34,500 | 1,464,525 |
| Kraton Corp. * | 46,235 | 1,512,347 |
| Kronos Worldwide, Inc. | 30,700 | 537,864 |
| Louisiana-Pacific Corp. * | 236,672 | 6,091,937 |
| LSB Industries, Inc. *(a) | 28,000 | 308,560 |
| Materion Corp. | 37,529 | 1,427,978 |
| Minerals Technologies, Inc. | 56,622 | 4,456,151 |
| Multi Packaging Solutions International Ltd. * | 38,100 | 683,895 |
| Myers Industries, Inc. | 34,900 | 568,870 |
| Neenah Paper, Inc. | 28,353 | 2,221,458 |
| Olin Corp. | 272,948 | 8,769,819 |
| Olympic Steel, Inc. | 12,200 | 275,110 |
| OMNOVA Solutions, Inc. * | 65,700 | 624,150 |
| P.H. Glatfelter Co. | 69,400 | 1,492,794 |
| PolyOne Corp. | 142,676 | 5,594,326 |
| Quaker Chemical Corp. | 21,300 | 3,079,980 |
| Rayonier Advanced Materials, Inc. | 69,342 | 918,782 |
| Real Industry, Inc. * | 109,014 | 283,436 |
| Ryerson Holding Corp. * | 25,800 | 353,460 |
| Schnitzer Steel Industries, Inc., Class A | 43,300 | 818,370 |
| Schweitzer-Mauduit International, Inc. | 52,500 | 2,260,125 |
| Sensient Technologies Corp. | 73,514 | 6,013,445 |
| Stepan Co. | 34,200 | 2,900,160 |
| Stillwater Mining Co. * | 205,400 | 3,693,092 |
| Summit Materials, Inc., Class A * | 173,177 | 4,443,722 |
| SunCoke Energy, Inc. * | 96,800 | 887,656 |
| TerraVia Holdings, Inc. *(a) | 111,500 | 52,583 |
| The Chemours Co. | 301,200 | 12,135,348 |
| TimkenSteel Corp. * | 63,644 | 959,752 |
| Trecora Resources * | 27,400 | 302,770 |
| Tredegar Corp. | 42,100 | 722,015 |
| Trinseo S.A. | 45,700 | 3,034,480 |
| Tronox Ltd., Class A | 106,100 | 1,751,711 |
| UFP Technologies, Inc. * | 9,900 | 264,330 |
| United States Lime & Minerals, Inc. | 2,700 | 213,624 |
| US Concrete, Inc. * | 24,200 | 1,500,400 |
| Valhi, Inc. | 25,000 | 83,000 |
| Worthington Industries, Inc. | 76,417 | 3,324,140 |
| | | 160,498,723 |
| |
| Media 1.6% |
| AMC Entertainment Holdings, Inc., Class A | 92,300 | 2,796,690 |
| Central European Media Enterprises Ltd., Class A *(a) | 109,100 | 447,310 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Daily Journal Corp. * | 2,000 | 418,040 |
| Entercom Communications Corp., Class A | 43,000 | 543,950 |
| Entravision Communications Corp., Class A | 98,600 | 611,320 |
| Eros International plc *(a) | 49,290 | 490,436 |
| Gannett Co., Inc. | 195,800 | 1,636,888 |
| Global Eagle Entertainment, Inc. * | 77,200 | 239,320 |
| Gray Television, Inc. * | 100,493 | 1,472,222 |
| Hemisphere Media Group, Inc. * | 12,300 | 143,295 |
| IMAX Corp. * | 99,100 | 3,022,550 |
| Liberty Media Corp. - Liberty Braves, Class A * | 22,300 | 553,709 |
| Liberty Media Corp. - Liberty Braves, Class C * | 48,500 | 1,189,220 |
| Liberty Media Corp. - Liberty Formula One, Class A * | 40,700 | 1,380,137 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 74,800 | 2,619,496 |
| Loral Space & Communications, Inc. * | 20,500 | 786,175 |
| MDC Partners, Inc., Class A | 98,180 | 878,711 |
| Meredith Corp. | 61,300 | 3,589,115 |
| MSG Networks, Inc., Class A * | 97,200 | 2,425,140 |
| National CineMedia, Inc. | 95,700 | 1,135,959 |
| New Media Investment Group, Inc. | 73,382 | 965,707 |
| Nexstar Media Group, Inc. | 70,498 | 4,864,362 |
| Radio One, Inc., Class D * | 41,200 | 123,600 |
| Reading International, Inc., Class A * | 23,000 | 361,790 |
| Saga Communications, Inc., Class A | 6,400 | 328,000 |
| Salem Media Group, Inc. | 21,000 | 160,650 |
| Scholastic Corp. | 45,069 | 1,948,333 |
| Sinclair Broadcast Group, Inc., Class A | 121,202 | 4,781,419 |
| The E.W. Scripps Co., Class A * | 95,471 | 2,127,094 |
| The New York Times Co., Class A | 203,051 | 2,934,087 |
| Time, Inc. | 173,586 | 2,638,507 |
| Townsquare Media, Inc., Class A * | 10,100 | 122,210 |
| tronc, Inc. * | 45,517 | 652,714 |
| World Wrestling Entertainment, Inc., Class A | 62,900 | 1,347,947 |
| | | 49,736,103 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 7.4% |
| Accelerate Diagnostics, Inc. *(a) | 38,200 | 1,042,860 |
| Acceleron Pharma, Inc. * | 42,727 | 1,410,846 |
| AcelRx Pharmaceuticals, Inc. *(a) | 57,300 | 148,980 |
| Achillion Pharmaceuticals, Inc. * | 184,789 | 630,130 |
| Aclaris Therapeutics, Inc. * | 16,100 | 452,571 |
| Acorda Therapeutics, Inc. * | 72,039 | 1,163,430 |
| Adamas Pharmaceuticals, Inc. * | 27,472 | 449,991 |
| Aduro Biotech, Inc. *(a) | 55,181 | 532,497 |
| Advaxis, Inc. *(a) | 56,011 | 479,454 |
| Adverum Biotechnologies, Inc. * | 28,209 | 80,396 |
| Aerie Pharmaceuticals, Inc. * | 45,044 | 1,984,188 |
| Aevi Genomic Medicine, Inc. * | 44,012 | 70,419 |
| Agenus, Inc. * | 162,254 | 582,492 |
| Agile Therapeutics, Inc. * | 13,462 | 48,329 |
| Aimmune Therapeutics, Inc. * | 40,500 | 787,320 |
| Akebia Therapeutics, Inc. * | 52,447 | 691,251 |
| Albany Molecular Research, Inc. *(a) | 40,600 | 650,006 |
| Alder Biopharmaceuticals, Inc. * | 79,346 | 1,590,887 |
| AMAG Pharmaceuticals, Inc. * | 54,731 | 1,335,436 |
| Amicus Therapeutics, Inc. * | 220,404 | 1,692,703 |
| Amphastar Pharmaceuticals, Inc. * | 53,126 | 802,203 |
| Ampio Pharmaceuticals, Inc. * | 70,600 | 39,472 |
| AnaptysBio, Inc. * | 9,300 | 248,124 |
| Anavex Life Sciences Corp. *(a) | 51,200 | 288,256 |
| ANI Pharmaceuticals, Inc. * | 13,500 | 730,620 |
| Security | Number
of Shares | Value ($) |
| Applied Genetic Technologies Corp. * | 17,400 | 97,440 |
| Aptevo Therapeutics, Inc. * | 24,850 | 49,700 |
| Aratana Therapeutics, Inc. * | 62,700 | 388,740 |
| Ardelyx, Inc. * | 64,340 | 862,156 |
| Arena Pharmaceuticals, Inc. * | 585,600 | 784,704 |
| Argos Therapeutics, Inc. * | 22,200 | 9,546 |
| Array BioPharma, Inc. * | 275,379 | 2,387,536 |
| Arrowhead Pharmaceuticals, Inc. *(a) | 98,400 | 152,520 |
| Asterias Biotherapeutics, Inc. *(a) | 45,825 | 169,553 |
| Atara Biotherapeutics, Inc. * | 36,043 | 616,335 |
| Athersys, Inc. *(a) | 240,200 | 355,496 |
| Audentes Therapeutics, Inc. * | 10,700 | 159,430 |
| Avexis, Inc. * | 9,900 | 796,950 |
| Axovant Sciences Ltd. * | 37,600 | 911,424 |
| Axsome Therapeutics, Inc. * | 17,700 | 72,570 |
| Bellicum Pharmaceuticals, Inc. * | 47,900 | 640,423 |
| Bio-Path Holdings, Inc. * | 131,200 | 82,761 |
| BioCryst Pharmaceuticals, Inc. * | 136,700 | 866,678 |
| BioSpecifics Technologies Corp. * | 8,000 | 453,840 |
| BioTime, Inc. * | 163,100 | 554,540 |
| Bluebird Bio, Inc. * | 66,800 | 5,941,860 |
| Blueprint Medicines Corp. * | 48,464 | 2,257,453 |
| Cambrex Corp. * | 51,900 | 3,080,265 |
| Cara Therapeutics, Inc. *(a) | 39,117 | 621,569 |
| Catalent, Inc. * | 162,699 | 4,763,827 |
| Celldex Therapeutics, Inc. * | 159,500 | 531,135 |
| Cellular Biomedicine Group, Inc. * | 22,709 | 245,257 |
| Cempra, Inc. * | 69,178 | 297,465 |
| ChemoCentryx, Inc. * | 57,800 | 418,472 |
| Chimerix, Inc. * | 72,386 | 432,868 |
| ChromaDex Corp. *(a) | 44,800 | 139,328 |
| Cidara Therapeutics, Inc. *(a) | 17,159 | 132,982 |
| Clearside Biomedical, Inc. * | 14,000 | 111,440 |
| Clovis Oncology, Inc. * | 58,900 | 3,409,721 |
| Coherus Biosciences, Inc. * | 54,661 | 1,049,491 |
| Collegium Pharmaceutical, Inc. *(a) | 30,736 | 301,520 |
| Concert Pharmaceuticals, Inc. * | 32,122 | 509,776 |
| Corcept Therapeutics, Inc. * | 116,906 | 1,115,283 |
| Curis, Inc. * | 158,654 | 383,943 |
| Cytokinetics, Inc. * | 57,100 | 936,440 |
| CytomX Therapeutics, Inc. * | 31,800 | 499,578 |
| CytRx Corp. * | 126,000 | 64,109 |
| Depomed, Inc. * | 106,300 | 1,274,537 |
| Dermira, Inc. * | 48,500 | 1,651,910 |
| Dimension Therapeutics, Inc. * | 13,100 | 20,305 |
| Durect Corp. * | 163,276 | 143,258 |
| Dynavax Technologies Corp. * | 88,600 | 491,730 |
| Eagle Pharmaceuticals, Inc. * | 16,124 | 1,460,673 |
| Edge Therapeutics, Inc. * | 27,900 | 289,602 |
| Editas Medicine, Inc. *(a) | 10,300 | 194,155 |
| Egalet Corp. *(a) | 35,600 | 135,992 |
| Eiger BioPharmaceuticals, Inc. *(a) | 5,600 | 44,240 |
| Emergent BioSolutions, Inc. * | 50,700 | 1,516,437 |
| Enanta Pharmaceuticals, Inc. * | 26,322 | 835,724 |
| Endocyte, Inc. *(a) | 50,400 | 115,920 |
| Enzo Biochem, Inc. * | 61,100 | 537,680 |
| Epizyme, Inc. * | 65,259 | 1,177,925 |
| Esperion Therapeutics, Inc. * | 25,070 | 896,253 |
| Exact Sciences Corp. * | 172,162 | 5,166,582 |
| Exelixis, Inc. * | 377,072 | 8,446,413 |
| FibroGen, Inc. * | 100,209 | 2,805,852 |
| Five Prime Therapeutics, Inc. * | 45,000 | 1,568,700 |
| Flex Pharma, Inc. * | 19,700 | 67,768 |
| Flexion Therapeutics, Inc. * | 43,643 | 890,754 |
| Fluidigm Corp. * | 43,100 | 212,914 |
| Fortress Biotech, Inc. *(a) | 56,900 | 207,116 |
| Foundation Medicine, Inc. * | 20,500 | 727,750 |
| Genomic Health, Inc. * | 31,700 | 1,041,662 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Geron Corp. *(a) | 247,200 | 632,832 |
| Global Blood Therapeutics, Inc. * | 33,100 | 958,245 |
| GlycoMimetics, Inc. * | 19,600 | 84,280 |
| Halozyme Therapeutics, Inc. * | 177,400 | 2,472,956 |
| Heron Therapeutics, Inc. * | 70,860 | 1,087,701 |
| Heska Corp. * | 10,591 | 1,146,476 |
| Horizon Pharma plc * | 263,200 | 4,048,016 |
| Idera Pharmaceuticals, Inc. * | 166,529 | 391,343 |
| Ignyta, Inc. * | 57,745 | 511,043 |
| Immune Design, Corp. * | 16,243 | 106,392 |
| ImmunoGen, Inc. *(a) | 125,500 | 544,670 |
| Immunomedics, Inc. *(a) | 167,500 | 959,775 |
| Impax Laboratories, Inc. * | 123,800 | 1,739,390 |
| INC Research Holdings, Inc., Class A * | 70,500 | 3,172,500 |
| Infinity Pharmaceuticals, Inc. * | 67,500 | 145,125 |
| Innoviva, Inc. * | 130,100 | 1,533,228 |
| Inotek Pharmaceuticals Corp. *(a) | 27,800 | 55,600 |
| Inovio Pharmaceuticals, Inc. *(a) | 99,262 | 624,358 |
| Insmed, Inc. * | 95,714 | 1,765,923 |
| Insys Therapeutics, Inc. *(a) | 37,079 | 417,139 |
| Intellia Therapeutics, Inc. * | 10,700 | 155,899 |
| Intersect ENT, Inc. * | 39,868 | 757,492 |
| Intra-Cellular Therapies, Inc. * | 66,200 | 914,884 |
| Invitae Corp. *(a) | 52,700 | 581,281 |
| Ironwood Pharmaceuticals, Inc. * | 206,700 | 3,373,344 |
| Jounce Therapeutics, Inc. * | 11,700 | 331,344 |
| Kadmon Holdings, Inc. *(a) | 18,500 | 50,875 |
| Karyopharm Therapeutics, Inc. * | 49,263 | 503,468 |
| Keryx Biopharmaceuticals, Inc. *(a) | 155,234 | 918,985 |
| Kite Pharma, Inc. * | 71,042 | 5,831,127 |
| La Jolla Pharmaceutical Co. * | 28,079 | 814,291 |
| Lannett Co., Inc. *(a) | 48,300 | 1,255,800 |
| Lexicon Pharmaceuticals, Inc. *(a) | 68,300 | 1,066,163 |
| Ligand Pharmaceuticals, Inc. * | 31,143 | 3,462,167 |
| Lion Biotechnologies, Inc. * | 82,372 | 564,248 |
| Lipocine, Inc. *(a) | 26,100 | 110,664 |
| Loxo Oncology, Inc. * | 26,900 | 1,239,014 |
| Luminex Corp. | 64,200 | 1,208,886 |
| MacroGenics, Inc. * | 50,449 | 1,090,203 |
| MannKind Corp. *(a) | 100,576 | 87,863 |
| MediciNova, Inc. * | 46,400 | 266,800 |
| Medpace Holdings, Inc. * | 13,500 | 428,085 |
| Merrimack Pharmaceuticals, Inc. *(a) | 182,500 | 607,725 |
| MiMedx Group, Inc. *(a) | 176,350 | 2,237,881 |
| Minerva Neurosciences, Inc. * | 34,600 | 262,960 |
| Mirati Therapeutics, Inc. * | 19,648 | 89,398 |
| Momenta Pharmaceuticals, Inc. * | 106,086 | 1,522,334 |
| MyoKardia, Inc. * | 20,400 | 266,220 |
| Myovant Sciences Ltd. *(a) | 16,900 | 219,531 |
| Myriad Genetics, Inc. * | 115,186 | 2,118,271 |
| NanoString Technologies, Inc. * | 24,100 | 421,268 |
| NantKwest, Inc. *(a) | 27,900 | 87,885 |
| Natera, Inc. * | 40,300 | 364,715 |
| Nektar Therapeutics * | 234,171 | 4,442,224 |
| NeoGenomics, Inc. * | 89,888 | 678,654 |
| Neos Therapeutics, Inc. *(a) | 21,500 | 152,650 |
| NewLink Genetics Corp. * | 34,800 | 650,412 |
| Novan, Inc. *(a) | 7,800 | 42,432 |
| Novavax, Inc. *(a) | 420,621 | 343,269 |
| Ocular Therapeutix, Inc. *(a) | 38,470 | 383,161 |
| Omeros Corp. *(a) | 69,000 | 1,126,080 |
| OncoMed Pharmaceuticals, Inc. * | 36,500 | 143,810 |
| Ophthotech Corp. * | 47,243 | 140,312 |
| Organovo Holdings, Inc. *(a) | 154,441 | 447,879 |
| Otonomy, Inc. * | 38,439 | 513,161 |
| OvaScience, Inc. * | 56,701 | 85,619 |
| Pacific Biosciences of California, Inc. * | 132,900 | 523,626 |
| Pacira Pharmaceuticals, Inc. * | 59,300 | 2,879,015 |
| Security | Number
of Shares | Value ($) |
| Paratek Pharmaceuticals, Inc. * | 36,608 | 785,242 |
| PAREXEL International Corp. * | 85,080 | 5,430,656 |
| PDL BioPharma, Inc. | 310,200 | 697,950 |
| Pfenex, Inc. * | 23,397 | 112,540 |
| PharmAthene, Inc. | 99,400 | 72,244 |
| Phibro Animal Health Corp., Class A | 32,500 | 966,875 |
| Portola Pharmaceuticals, Inc. * | 82,400 | 3,295,176 |
| PRA Health Sciences, Inc. * | 39,400 | 2,520,024 |
| Prestige Brands Holdings, Inc. * | 87,600 | 5,029,116 |
| Progenics Pharmaceuticals Inc * | 117,600 | 931,392 |
| Protagonist Therapeutics, Inc. *(a) | 13,200 | 133,584 |
| Proteostasis Therapeutics, Inc. * | 10,000 | 60,450 |
| Prothena Corp. plc * | 65,453 | 3,542,971 |
| PTC Therapeutics, Inc. * | 53,136 | 645,602 |
| Puma Biotechnology, Inc. * | 44,200 | 1,794,520 |
| Ra Pharmaceuticals, Inc. * | 12,800 | 302,080 |
| Radius Health, Inc. * | 55,314 | 2,161,118 |
| Reata Pharmaceuticals, Inc., Class A *(a) | 17,500 | 362,950 |
| REGENXBIO, Inc. * | 41,000 | 856,900 |
| Regulus Therapeutics, Inc. *(a) | 61,781 | 95,761 |
| Repligen Corp. * | 57,100 | 2,100,709 |
| Retrophin, Inc. * | 57,593 | 1,128,247 |
| Revance Therapeutics, Inc. * | 37,208 | 809,274 |
| Rigel Pharmaceuticals, Inc. * | 219,800 | 657,202 |
| Sage Therapeutics, Inc. * | 48,295 | 3,428,945 |
| Sangamo Therapeutics, Inc. * | 113,700 | 545,760 |
| Sarepta Therapeutics, Inc. * | 86,200 | 3,125,612 |
| SciClone Pharmaceuticals, Inc. * | 78,000 | 752,700 |
| Selecta Biosciences, Inc. * | 7,700 | 92,862 |
| Seres Therapeutics, Inc. * | 27,600 | 271,308 |
| Sorrento Therapeutics, Inc. *(a) | 39,855 | 77,717 |
| Spark Therapeutics, Inc. * | 32,400 | 1,878,228 |
| Spectrum Pharmaceuticals, Inc. * | 136,700 | 1,040,287 |
| Stemline Therapeutics, Inc. * | 40,200 | 357,780 |
| Sucampo Pharmaceuticals, Inc., Class A * | 40,218 | 408,213 |
| Supernus Pharmaceuticals, Inc. * | 78,900 | 2,572,140 |
| Syndax Pharmaceuticals, Inc. * | 10,100 | 95,849 |
| Synergy Pharmaceuticals, Inc. *(a) | 336,400 | 1,385,968 |
| Synthetic Biologics, Inc. * | 118,100 | 67,317 |
| T2 Biosystems, Inc. *(a) | 21,600 | 103,896 |
| Teligent, Inc. * | 58,900 | 464,721 |
| TESARO, Inc. * | 47,000 | 6,936,730 |
| Tetraphase Pharmaceuticals, Inc. * | 52,053 | 412,780 |
| TG Therapeutics, Inc. *(a) | 74,950 | 828,198 |
| The Medicines Co. * | 114,328 | 5,638,657 |
| TherapeuticsMD, Inc. *(a) | 253,855 | 1,294,660 |
| Theravance Biopharma, Inc. *(a) | 68,100 | 2,746,473 |
| Titan Pharmaceuticals, Inc. * | 30,100 | 88,795 |
| Tokai Pharmaceuticals, Inc. *(a) | 15,000 | 9,174 |
| Trevena, Inc. * | 70,634 | 230,973 |
| Trovagene, Inc. * | 35,347 | 32,873 |
| Ultragenyx Pharmaceutical, Inc. * | 62,241 | 4,007,698 |
| Vanda Pharmaceuticals, Inc. * | 60,600 | 924,150 |
| Veracyte, Inc. * | 45,400 | 384,538 |
| Versartis, Inc. * | 53,335 | 981,364 |
| Vital Therapies, Inc. * | 35,847 | 143,388 |
| Voyager Therapeutics, Inc. * | 18,900 | 197,316 |
| vTv Therapeutics, Inc., Class A * | 7,000 | 38,570 |
| WaVe Life Sciences Ltd. *(a) | 11,500 | 242,650 |
| XBiotech, Inc. *(a) | 27,238 | 296,349 |
| Xencor, Inc. * | 57,528 | 1,476,744 |
| Zafgen, Inc. * | 44,572 | 217,511 |
| ZIOPHARM Oncology, Inc. *(a) | 200,264 | 1,409,859 |
| Zogenix, Inc. * | 40,225 | 442,475 |
| | | 235,815,015 |
| |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Real Estate 7.9% |
| Acadia Realty Trust | 130,257 | 3,787,874 |
| Agree Realty Corp. | 43,700 | 2,118,576 |
| Alexander & Baldwin, Inc. | 75,860 | 3,490,319 |
| Alexander's, Inc. | 3,741 | 1,626,624 |
| Altisource Portfolio Solutions S.A. *(a) | 19,887 | 439,304 |
| Altisource Residential Corp. | 87,800 | 1,262,564 |
| American Assets Trust, Inc. | 65,200 | 2,792,516 |
| Armada Hoffler Properties, Inc. | 51,600 | 735,816 |
| Ashford Hospitality Prime, Inc. | 52,487 | 555,837 |
| Ashford Hospitality Trust, Inc. | 128,682 | 804,263 |
| Bluerock Residential Growth REIT, Inc. | 41,408 | 515,944 |
| CareTrust REIT, Inc. | 102,065 | 1,737,146 |
| CatchMark Timber Trust, Inc., Class A | 57,209 | 669,917 |
| CBL & Associates Properties, Inc. | 279,000 | 2,580,750 |
| Cedar Realty Trust, Inc. | 148,800 | 800,544 |
| Chatham Lodging Trust | 61,234 | 1,185,490 |
| Chesapeake Lodging Trust | 93,585 | 2,181,466 |
| City Office REIT, Inc. | 44,500 | 558,475 |
| Colony Starwood Homes | 121,900 | 4,214,083 |
| Community Healthcare Trust, Inc. | 19,900 | 491,928 |
| Consolidated-Tomoka Land Co. | 7,600 | 412,148 |
| CorEnergy Infrastructure Trust, Inc. | 19,500 | 711,360 |
| CoreSite Realty Corp. | 54,500 | 5,332,825 |
| Cousins Properties, Inc. | 592,807 | 5,032,931 |
| DiamondRock Hospitality Co. | 340,717 | 3,751,294 |
| DuPont Fabros Technology, Inc. | 122,124 | 6,295,492 |
| Easterly Government Properties, Inc. | 49,500 | 995,940 |
| EastGroup Properties, Inc. | 52,490 | 4,107,342 |
| Education Realty Trust, Inc. | 120,213 | 4,660,658 |
| Farmland Partners, Inc. | 38,200 | 416,380 |
| FelCor Lodging Trust, Inc. | 228,313 | 1,769,426 |
| First Industrial Realty Trust, Inc. | 191,237 | 5,381,409 |
| First Potomac Realty Trust | 90,700 | 997,700 |
| Forestar Group, Inc. * | 77,000 | 1,089,550 |
| Four Corners Property Trust, Inc. | 102,300 | 2,386,659 |
| Franklin Street Properties Corp. | 173,965 | 2,110,195 |
| FRP Holdings, Inc. * | 12,700 | 542,290 |
| Getty Realty Corp. | 47,059 | 1,204,710 |
| Gladstone Commercial Corp. | 45,800 | 1,021,340 |
| Global Medical REIT, Inc. (a) | 28,400 | 263,268 |
| Global Net Lease, Inc. | 109,933 | 2,597,717 |
| Government Properties Income Trust | 113,947 | 2,429,350 |
| Gramercy Property Trust | 229,322 | 6,372,858 |
| Healthcare Realty Trust, Inc. | 187,281 | 6,142,817 |
| Hersha Hospitality Trust | 71,125 | 1,311,545 |
| HFF, Inc., Class A | 58,900 | 1,849,460 |
| Hudson Pacific Properties, Inc. | 201,311 | 6,917,046 |
| Independence Realty Trust, Inc. | 102,758 | 945,374 |
| InfraREIT, Inc. | 61,400 | 1,172,740 |
| Investors Real Estate Trust | 187,002 | 1,105,182 |
| iStar, Inc. * | 109,700 | 1,341,631 |
| Kennedy-Wilson Holdings, Inc. | 133,887 | 2,731,295 |
| Kite Realty Group Trust | 141,539 | 2,881,734 |
| LaSalle Hotel Properties | 176,279 | 5,034,528 |
| Lexington Realty Trust | 376,374 | 3,827,724 |
| LTC Properties, Inc. | 59,251 | 2,834,568 |
| Mack-Cali Realty Corp. | 147,500 | 3,989,875 |
| Marcus & Millichap, Inc. * | 24,979 | 644,458 |
| MedEquities Realty Trust, Inc. | 34,000 | 401,880 |
| Medical Properties Trust, Inc. | 485,753 | 6,348,792 |
| Monmouth Real Estate Investment Corp. | 107,100 | 1,606,500 |
| Monogram Residential Trust, Inc. | 277,124 | 2,821,122 |
| National Health Investors, Inc. | 59,368 | 4,343,957 |
| National Storage Affiliates Trust | 67,421 | 1,651,815 |
| New Senior Investment Group, Inc. | 119,769 | 1,247,993 |
| NexPoint Residential Trust, Inc. | 30,669 | 736,363 |
| Security | Number
of Shares | Value ($) |
| NorthStar Realty Europe Corp. | 97,800 | 1,137,414 |
| One Liberty Properties, Inc. | 26,400 | 640,992 |
| Parkway, Inc. | 76,038 | 1,532,166 |
| Pebblebrook Hotel Trust | 120,500 | 3,586,080 |
| Pennsylvania Real Estate Investment Trust | 106,167 | 1,470,413 |
| Physicians Realty Trust | 255,850 | 5,024,894 |
| Potlatch Corp. | 68,503 | 3,086,060 |
| Preferred Apartment Communities, Inc., Class A | 41,297 | 584,353 |
| PS Business Parks, Inc. | 33,238 | 4,039,747 |
| QTS Realty Trust, Inc., Class A | 76,787 | 4,103,497 |
| RAIT Financial Trust | 154,400 | 474,008 |
| Ramco-Gershenson Properties Trust | 133,821 | 1,783,834 |
| RE/MAX Holdings, Inc., Class A | 28,100 | 1,662,115 |
| Retail Opportunity Investments Corp. | 180,147 | 3,711,028 |
| Rexford Industrial Realty, Inc. | 108,116 | 2,696,413 |
| RLJ Lodging Trust | 207,635 | 4,462,076 |
| Ryman Hospitality Properties, Inc. | 72,985 | 4,654,983 |
| Sabra Health Care REIT, Inc. | 102,796 | 2,795,023 |
| Saul Centers, Inc. | 15,800 | 948,790 |
| Select Income REIT | 111,628 | 2,797,398 |
| Seritage Growth Properties, Class A (a) | 42,700 | 1,772,050 |
| Silver Bay Realty Trust Corp. | 56,433 | 1,209,359 |
| STAG Industrial, Inc. | 136,200 | 3,590,232 |
| Stratus Properties, Inc. | 9,200 | 274,620 |
| Summit Hotel Properties, Inc. | 155,800 | 2,575,374 |
| Sunstone Hotel Investors, Inc. | 366,654 | 5,459,478 |
| Tejon Ranch Co. * | 19,092 | 437,207 |
| Terreno Realty Corp. | 73,200 | 2,260,416 |
| The GEO Group, Inc. | 198,420 | 6,611,354 |
| The RMR Group, Inc., Class A | 11,919 | 628,727 |
| The St. Joe Co. * | 85,600 | 1,498,000 |
| Tier REIT, Inc. | 73,000 | 1,263,630 |
| Trinity Place Holdings, Inc. * | 32,544 | 232,039 |
| UMH Properties, Inc. | 42,900 | 687,258 |
| Universal Health Realty Income Trust | 19,444 | 1,356,219 |
| Urban Edge Properties | 142,487 | 3,633,418 |
| Urstadt Biddle Properties, Inc., Class A | 46,774 | 919,577 |
| Washington Prime Group, Inc. | 306,300 | 2,695,440 |
| Washington Real Estate Investment Trust | 126,382 | 4,002,518 |
| Whitestone REIT | 41,700 | 522,918 |
| Xenia Hotels & Resorts, Inc. | 164,462 | 2,871,507 |
| | | 250,013,302 |
| |
| Retailing 3.1% |
| 1-800-Flowers.com, Inc., Class A * | 46,800 | 503,100 |
| Aaron's, Inc. | 104,800 | 3,766,512 |
| Abercrombie & Fitch Co., Class A | 104,363 | 1,251,312 |
| America's Car-Mart, Inc. * | 11,500 | 428,950 |
| American Eagle Outfitters, Inc. | 279,615 | 3,939,775 |
| Asbury Automotive Group, Inc. * | 33,485 | 2,049,282 |
| Ascena Retail Group, Inc. * | 296,263 | 1,158,388 |
| At Home Group, Inc. * | 16,400 | 287,164 |
| Barnes & Noble Education, Inc. * | 79,195 | 824,420 |
| Barnes & Noble, Inc. | 96,110 | 821,740 |
| Big 5 Sporting Goods Corp. | 32,284 | 497,174 |
| Big Lots, Inc. | 72,410 | 3,655,981 |
| Boot Barn Holdings, Inc. * | 21,411 | 227,171 |
| Build-A-Bear Workshop, Inc. * | 25,700 | 267,280 |
| Caleres, Inc. | 68,275 | 1,967,685 |
| Camping World Holdings, Inc., Class A | 18,800 | 581,296 |
| Chico's FAS, Inc. | 207,151 | 2,862,827 |
| Citi Trends, Inc. | 24,846 | 466,856 |
| Conn's, Inc. *(a) | 35,300 | 621,280 |
| Core-Mark Holding Co., Inc. | 78,182 | 2,737,934 |
| Destination XL Group, Inc. * | 56,400 | 143,820 |
| DSW, Inc., Class A | 106,000 | 2,185,720 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Duluth Holdings, Inc., Class B * | 16,700 | 369,905 |
| Etsy, Inc. * | 180,263 | 1,939,630 |
| Express, Inc. * | 115,898 | 1,000,200 |
| Five Below, Inc. * | 88,200 | 4,332,384 |
| Francesca's Holdings Corp. * | 59,600 | 940,488 |
| Fred's, Inc., Class A (a) | 60,300 | 887,616 |
| FTD Cos., Inc. * | 28,097 | 561,940 |
| Gaia, Inc. * | 19,900 | 217,905 |
| Genesco, Inc. * | 32,744 | 1,745,255 |
| GNC Holdings, Inc., Class A (a) | 105,000 | 816,900 |
| Group 1 Automotive, Inc. | 34,300 | 2,364,985 |
| Guess?, Inc. | 94,900 | 1,059,084 |
| Haverty Furniture Cos., Inc. | 30,300 | 746,895 |
| Hibbett Sports, Inc. * | 39,475 | 1,026,350 |
| HSN, Inc. | 51,355 | 1,894,999 |
| Kirkland's, Inc. * | 27,800 | 326,928 |
| Lands' End, Inc. *(a) | 24,200 | 571,120 |
| Liberty TripAdvisor Holdings, Inc., Class A * | 111,811 | 1,643,622 |
| Lithia Motors, Inc., Class A | 38,537 | 3,682,210 |
| Lumber Liquidators Holdings, Inc. * | 39,398 | 967,221 |
| MarineMax, Inc. * | 45,300 | 921,855 |
| Monro Muffler Brake, Inc. | 51,046 | 2,646,735 |
| Nutrisystem, Inc. | 46,448 | 2,482,646 |
| Office Depot, Inc. | 883,300 | 4,390,001 |
| Ollie's Bargain Outlet Holdings, Inc. * | 30,900 | 1,183,470 |
| Overstock.com, Inc. * | 24,500 | 425,075 |
| Party City Holdco, Inc. * | 43,516 | 696,256 |
| PetMed Express, Inc. | 29,500 | 681,450 |
| Pier 1 Imports, Inc. | 144,900 | 976,626 |
| Rent-A-Center, Inc. (a) | 95,385 | 1,019,666 |
| RH *(a) | 56,841 | 2,726,663 |
| Sears Holdings Corp. *(a) | 17,600 | 179,872 |
| Sears Hometown & Outlet Stores, Inc. * | 16,800 | 56,280 |
| Select Comfort Corp. * | 71,112 | 2,197,361 |
| Shoe Carnival, Inc. | 19,750 | 501,058 |
| Shutterfly, Inc. * | 58,547 | 3,038,589 |
| Sonic Automotive, Inc., Class A | 52,774 | 1,034,370 |
| Sportsman's Warehouse Holdings, Inc. * | 44,500 | 182,005 |
| Stage Stores, Inc. (a) | 46,827 | 134,862 |
| Stein Mart, Inc. | 44,300 | 109,421 |
| Tailored Brands, Inc. | 78,169 | 963,824 |
| The Buckle, Inc. (a) | 53,164 | 994,167 |
| The Cato Corp., Class A | 40,904 | 922,794 |
| The Children's Place, Inc. | 29,690 | 3,408,412 |
| The Container Store Group, Inc. * | 25,200 | 103,824 |
| The Finish Line, Inc., Class A | 63,619 | 1,005,816 |
| Tile Shop Holdings, Inc. | 49,900 | 1,065,365 |
| Tilly's, Inc., Class A | 20,600 | 196,936 |
| Tuesday Morning Corp. * | 64,600 | 209,950 |
| Vitamin Shoppe, Inc. * | 39,400 | 760,420 |
| Wayfair, Inc., Class A *(a) | 52,498 | 2,399,684 |
| West Marine, Inc. * | 24,500 | 268,520 |
| Weyco Group, Inc. | 9,100 | 254,436 |
| Winmark Corp. | 4,500 | 580,950 |
| Zumiez, Inc. * | 30,100 | 540,295 |
| | | 97,600,958 |
| |
| Semiconductors & Semiconductor Equipment 4.0% |
| Advanced Energy Industries, Inc. * | 63,837 | 4,711,171 |
| Advanced Micro Devices, Inc. * | 1,242,043 | 16,519,172 |
| Alpha & Omega Semiconductor Ltd. * | 28,000 | 463,400 |
| Ambarella, Inc. * | 53,300 | 2,996,526 |
| Amkor Technology, Inc. * | 167,518 | 1,973,362 |
| Axcelis Technologies, Inc. * | 47,100 | 906,675 |
| Brooks Automation, Inc. | 114,231 | 2,885,475 |
| Cabot Microelectronics Corp. | 38,700 | 3,032,145 |
| Security | Number
of Shares | Value ($) |
| Cavium, Inc. * | 106,350 | 7,322,197 |
| CEVA, Inc. * | 32,336 | 1,164,096 |
| Cirrus Logic, Inc. * | 102,500 | 6,595,875 |
| Cohu, Inc. | 46,600 | 872,818 |
| Diodes, Inc. * | 59,781 | 1,398,278 |
| DSP Group, Inc. * | 31,400 | 390,930 |
| Entegris, Inc. * | 237,000 | 5,877,600 |
| Exar Corp. * | 73,800 | 960,138 |
| FormFactor, Inc. * | 123,391 | 1,369,640 |
| Ichor Holdings Ltd. * | 13,600 | 263,840 |
| Impinj, Inc. *(a) | 9,500 | 356,060 |
| Inphi Corp. * | 67,733 | 2,805,501 |
| Integrated Device Technology, Inc. * | 218,789 | 5,248,748 |
| IXYS Corp. | 42,600 | 594,270 |
| Kopin Corp. * | 95,000 | 387,600 |
| Lattice Semiconductor Corp. * | 197,000 | 1,351,420 |
| MACOM Technology Solutions Holdings, Inc. * | 53,690 | 2,624,367 |
| MaxLinear, Inc. * | 94,860 | 2,639,954 |
| Microsemi Corp. * | 186,321 | 8,745,908 |
| MKS Instruments, Inc. | 87,389 | 6,838,189 |
| Monolithic Power Systems, Inc. | 63,900 | 5,846,850 |
| Nanometrics, Inc. * | 40,600 | 1,281,133 |
| NeoPhotonics Corp. * | 50,663 | 393,145 |
| NVE Corp. | 8,500 | 691,985 |
| PDF Solutions, Inc. * | 44,800 | 852,096 |
| Photronics, Inc. * | 106,637 | 1,226,326 |
| Power Integrations, Inc. | 44,662 | 2,945,459 |
| Rambus, Inc. * | 179,700 | 2,249,844 |
| Rudolph Technologies, Inc. * | 46,700 | 1,144,150 |
| Semtech Corp. * | 108,329 | 3,699,435 |
| Sigma Designs, Inc. * | 48,758 | 302,300 |
| Silicon Laboratories, Inc. * | 67,350 | 4,791,952 |
| Synaptics, Inc. * | 56,400 | 3,089,028 |
| Ultra Clean Holdings, Inc. * | 55,500 | 1,067,820 |
| Ultratech, Inc. * | 35,200 | 1,074,304 |
| Veeco Instruments, Inc. * | 64,839 | 2,139,687 |
| Xcerra Corp. * | 84,400 | 827,120 |
| Xperi Corp. | 83,859 | 2,817,662 |
| | | 127,735,651 |
| |
| Software & Services 8.0% |
| 2U, Inc. * | 62,458 | 2,835,593 |
| 8x8, Inc. * | 144,600 | 2,103,930 |
| A10 Networks, Inc. * | 68,819 | 557,434 |
| ACI Worldwide, Inc. * | 192,752 | 4,142,240 |
| Actua Corp. * | 56,400 | 789,600 |
| Acxiom Corp. * | 132,700 | 3,835,030 |
| Alarm.com Holdings, Inc. * | 21,500 | 701,115 |
| ALJ Regional Holdings, Inc. * | 28,500 | 95,475 |
| Amber Road, Inc. * | 23,000 | 188,370 |
| American Software, Inc., Class A | 45,000 | 493,650 |
| Angie's List, Inc. * | 62,800 | 369,264 |
| Appfolio, Inc., Class A *(a) | 14,600 | 387,630 |
| Apptio, Inc., Class A * | 11,400 | 148,770 |
| Aspen Technology, Inc. * | 127,699 | 7,852,212 |
| Autobytel, Inc. * | 13,500 | 176,985 |
| Bankrate, Inc. * | 74,600 | 790,760 |
| Barracuda Networks, Inc. * | 34,500 | 701,385 |
| Bazaarvoice, Inc. * | 142,400 | 669,280 |
| Benefitfocus, Inc. * | 26,390 | 831,285 |
| Blackbaud, Inc. | 79,069 | 6,357,938 |
| Blackhawk Network Holdings, Inc. * | 90,502 | 3,660,806 |
| Blackline, Inc. * | 15,700 | 516,059 |
| Blucora, Inc. * | 63,100 | 1,164,195 |
| Bottomline Technologies de, Inc. * | 63,700 | 1,484,210 |
| Box, Inc., Class A * | 75,700 | 1,305,068 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Brightcove, Inc. * | 49,900 | 434,130 |
| BroadSoft, Inc. * | 52,250 | 2,006,400 |
| CACI International, Inc., Class A * | 40,158 | 4,738,644 |
| Callidus Software, Inc. * | 107,200 | 2,256,560 |
| Carbonite, Inc. * | 26,000 | 561,600 |
| Cardtronics plc, Class A * | 71,800 | 2,985,444 |
| Care.com, Inc. * | 23,800 | 282,030 |
| Cass Information Systems, Inc. | 20,640 | 1,371,941 |
| ChannelAdvisor Corp. * | 39,100 | 461,380 |
| Cimpress N.V. * | 40,300 | 3,307,824 |
| CommVault Systems, Inc. * | 64,347 | 3,246,306 |
| Convergys Corp. | 143,400 | 3,227,934 |
| Cornerstone OnDemand, Inc. * | 83,300 | 3,272,024 |
| Coupa Software, Inc. *(a) | 13,900 | 385,725 |
| CSG Systems International, Inc. | 51,100 | 1,916,761 |
| DHI Group, Inc. * | 76,400 | 294,140 |
| Digimarc Corp. *(a) | 17,200 | 496,220 |
| Ebix, Inc. | 42,400 | 2,616,080 |
| Ellie Mae, Inc. * | 54,700 | 5,566,272 |
| Endurance International Group Holdings, Inc. * | 119,602 | 908,975 |
| EnerNOC, Inc. * | 42,000 | 237,300 |
| Envestnet, Inc. * | 67,854 | 2,361,319 |
| EPAM Systems, Inc. * | 79,383 | 6,112,491 |
| Everbridge, Inc. * | 13,800 | 320,298 |
| EVERTEC, Inc. | 103,000 | 1,632,550 |
| Exa Corp. * | 21,600 | 297,216 |
| ExlService Holdings, Inc. * | 53,992 | 2,575,958 |
| Fair Isaac Corp. | 51,391 | 6,962,453 |
| Five9, Inc. * | 61,800 | 1,127,541 |
| Forrester Research, Inc. | 16,017 | 649,489 |
| Gigamon, Inc. * | 55,500 | 1,759,350 |
| Global Sources Ltd. * | 12,000 | 110,400 |
| Globant S.A. * | 39,851 | 1,509,954 |
| Glu Mobile, Inc. *(a) | 170,358 | 393,527 |
| Gogo, Inc. *(a) | 89,100 | 1,123,551 |
| GrubHub, Inc. * | 136,676 | 5,874,334 |
| GTT Communications, Inc. * | 40,643 | 1,117,683 |
| Guidance Software, Inc. * | 31,700 | 191,785 |
| Hortonworks, Inc. * | 82,800 | 861,948 |
| HubSpot, Inc. * | 46,689 | 3,130,497 |
| Imperva, Inc. * | 48,742 | 2,166,582 |
| Information Services Group, Inc. * | 48,500 | 152,775 |
| Instructure, Inc. * | 16,500 | 394,350 |
| j2 Global, Inc. | 76,328 | 6,887,839 |
| Jive Software, Inc. * | 82,300 | 415,615 |
| Limelight Networks, Inc. * | 90,900 | 285,426 |
| Liquidity Services, Inc. * | 37,500 | 292,500 |
| LivePerson, Inc. * | 80,400 | 566,820 |
| LogMeIn, Inc. | 85,700 | 9,684,100 |
| ManTech International Corp., Class A | 38,700 | 1,373,850 |
| Marchex, Inc., Class B * | 48,200 | 130,622 |
| MAXIMUS, Inc. | 107,617 | 6,563,561 |
| MicroStrategy, Inc., Class A * | 15,362 | 2,921,392 |
| MINDBODY, Inc., Class A * | 21,300 | 603,855 |
| Mitek Systems, Inc. * | 46,200 | 404,250 |
| MobileIron, Inc. * | 92,736 | 421,949 |
| Model N, Inc. * | 45,800 | 490,060 |
| MoneyGram International, Inc. * | 53,700 | 956,397 |
| Monotype Imaging Holdings, Inc. | 72,200 | 1,469,270 |
| NCI, Inc., Class A * | 10,000 | 148,500 |
| NeuStar, Inc., Class A * | 87,979 | 2,920,903 |
| New Relic, Inc. * | 33,800 | 1,351,324 |
| NIC, Inc. | 104,400 | 2,228,940 |
| Numerex Corp., Class A * | 21,400 | 96,300 |
| Park City Group, Inc. *(a) | 25,000 | 316,250 |
| Paycom Software, Inc. * | 70,907 | 4,272,147 |
| Paylocity Holding Corp. * | 33,245 | 1,311,183 |
| Security | Number
of Shares | Value ($) |
| Pegasystems, Inc. | 59,600 | 2,714,780 |
| Perficient, Inc. * | 61,997 | 1,079,988 |
| PFSweb, Inc. * | 18,923 | 138,516 |
| Planet Payment, Inc. * | 66,200 | 276,054 |
| Progress Software Corp. | 79,220 | 2,354,418 |
| Proofpoint, Inc. * | 67,000 | 5,049,790 |
| PROS Holdings, Inc. * | 41,600 | 1,025,440 |
| Q2 Holdings, Inc. * | 44,593 | 1,701,223 |
| QAD, Inc., Class A | 20,400 | 616,080 |
| Qualys, Inc. * | 44,026 | 1,690,598 |
| QuinStreet, Inc. * | 44,900 | 201,152 |
| Quotient Technology, Inc. * | 103,532 | 1,128,499 |
| Rapid7, Inc. * | 31,100 | 527,145 |
| RealNetworks, Inc. * | 52,657 | 240,642 |
| RealPage, Inc. * | 87,900 | 3,256,695 |
| Reis, Inc. | 11,900 | 223,720 |
| RetailMeNot, Inc. * | 65,800 | 763,280 |
| Rightside Group Ltd. * | 17,500 | 175,700 |
| RingCentral, Inc., Class A * | 96,968 | 3,098,128 |
| Rosetta Stone, Inc. * | 31,000 | 348,750 |
| Sapiens International Corp. N.V. | 33,066 | 392,163 |
| Science Applications International Corp. | 69,284 | 5,057,039 |
| SecureWorks Corp., Class A * | 9,300 | 80,445 |
| ServiceSource International, Inc. * | 105,500 | 396,680 |
| Shutterstock, Inc. * | 30,360 | 1,312,463 |
| Silver Spring Networks, Inc. * | 60,200 | 686,882 |
| SPS Commerce, Inc. * | 28,300 | 1,563,858 |
| Stamps.com, Inc. * | 25,700 | 2,728,055 |
| Sykes Enterprises, Inc. * | 60,293 | 1,797,334 |
| Synchronoss Technologies, Inc. * | 70,662 | 1,130,592 |
| Syntel, Inc. | 56,917 | 1,002,308 |
| Take-Two Interactive Software, Inc. * | 161,512 | 10,151,029 |
| TechTarget, Inc. * | 31,700 | 293,225 |
| Telenav, Inc. * | 61,700 | 536,790 |
| TeleTech Holdings, Inc. | 27,200 | 850,000 |
| The Hackett Group, Inc. | 41,600 | 824,928 |
| The Meet Group, Inc. * | 99,000 | 590,040 |
| The Rubicon Project, Inc. * | 57,661 | 329,244 |
| The Trade Desk, Inc., Class A *(a) | 16,100 | 601,335 |
| TiVo Corp. | 192,409 | 3,800,078 |
| Travelport Worldwide Ltd. | 187,862 | 2,474,143 |
| TrueCar, Inc. * | 87,259 | 1,528,778 |
| Unisys Corp. * | 77,550 | 876,315 |
| Varonis Systems, Inc. * | 15,900 | 499,260 |
| VASCO Data Security International, Inc. * | 45,900 | 619,650 |
| Verint Systems, Inc. * | 99,560 | 3,912,708 |
| VirnetX Holding Corp. *(a) | 65,700 | 216,810 |
| Virtusa Corp. * | 44,900 | 1,391,002 |
| Web.com Group, Inc. * | 77,200 | 1,489,960 |
| WebMD Health Corp. * | 59,070 | 3,203,366 |
| Workiva, Inc. * | 34,700 | 582,960 |
| Xactly Corp. * | 51,200 | 593,920 |
| XO Group, Inc. * | 39,800 | 698,490 |
| Zendesk, Inc. * | 131,994 | 3,794,828 |
| Zix Corp. * | 88,900 | 482,727 |
| | | 252,771,081 |
| |
| Technology Hardware & Equipment 5.3% |
| 3D Systems Corp. *(a) | 174,800 | 2,767,084 |
| Acacia Communications, Inc. *(a) | 8,000 | 366,720 |
| ADTRAN, Inc. | 79,800 | 1,596,000 |
| Aerohive Networks, Inc. * | 31,800 | 123,066 |
| Agilysys, Inc. * | 24,000 | 237,600 |
| Anixter International, Inc. * | 46,824 | 3,818,497 |
| Applied Optoelectronics, Inc. *(a) | 28,600 | 1,412,554 |
| Avid Technology, Inc. * | 43,642 | 244,613 |
| AVX Corp. | 72,454 | 1,225,197 |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Badger Meter, Inc. | 49,580 | 1,970,805 |
| Bel Fuse, Inc., Class B | 14,100 | 341,220 |
| Belden, Inc. | 69,108 | 4,816,828 |
| Benchmark Electronics, Inc. * | 80,594 | 2,554,830 |
| Black Box Corp. | 24,092 | 238,511 |
| CalAmp Corp. * | 63,500 | 1,139,190 |
| Calix, Inc. * | 62,600 | 419,420 |
| Ciena Corp. * | 223,874 | 5,128,953 |
| Clearfield, Inc. * | 16,700 | 236,305 |
| Coherent, Inc. * | 39,689 | 8,556,948 |
| Comtech Telecommunications Corp. | 37,500 | 525,375 |
| Control4 Corp. * | 31,800 | 537,420 |
| CPI Card Group, Inc. (a) | 30,300 | 109,080 |
| Cray, Inc. * | 62,100 | 1,111,590 |
| CTS Corp. | 52,200 | 1,153,620 |
| Daktronics, Inc. | 59,300 | 560,978 |
| Diebold Nixdorf, Inc. | 116,333 | 3,280,591 |
| Digi International, Inc. * | 44,700 | 554,280 |
| Eastman Kodak Co. * | 25,900 | 284,900 |
| Electro Scientific Industries, Inc. * | 42,900 | 299,442 |
| Electronics For Imaging, Inc. * | 77,588 | 3,551,979 |
| EMCORE Corp. | 50,590 | 455,310 |
| ePlus, Inc. * | 21,000 | 1,496,250 |
| Extreme Networks, Inc. * | 166,900 | 1,304,323 |
| Fabrinet * | 55,600 | 1,927,652 |
| FARO Technologies, Inc. * | 25,200 | 923,580 |
| Finisar Corp. * | 176,900 | 4,040,396 |
| Harmonic, Inc. * | 123,200 | 714,560 |
| II-VI, Inc. * | 100,700 | 3,338,205 |
| Immersion Corp. * | 46,379 | 406,744 |
| Infinera Corp. * | 246,404 | 2,444,328 |
| Insight Enterprises, Inc. * | 58,800 | 2,475,480 |
| InterDigital, Inc. | 57,700 | 5,187,230 |
| InvenSense, Inc. * | 133,100 | 1,711,666 |
| Itron, Inc. * | 54,869 | 3,558,255 |
| Kimball Electronics, Inc. * | 41,900 | 722,775 |
| Knowles Corp. * | 142,297 | 2,522,926 |
| KVH Industries, Inc. * | 30,800 | 246,400 |
| Littelfuse, Inc. | 35,800 | 5,518,570 |
| Lumentum Holdings, Inc. * | 85,800 | 3,667,950 |
| Maxwell Technologies, Inc. * | 50,000 | 305,000 |
| Mesa Laboratories, Inc. | 4,800 | 671,136 |
| Methode Electronics, Inc. | 59,900 | 2,668,545 |
| MTS Systems Corp. | 26,875 | 1,248,344 |
| NETGEAR, Inc. * | 52,800 | 2,489,520 |
| NetScout Systems, Inc. * | 149,300 | 5,621,145 |
| Novanta, Inc. * | 50,500 | 1,416,525 |
| Oclaro, Inc. *(a) | 175,000 | 1,401,750 |
| OSI Systems, Inc. * | 30,200 | 2,337,480 |
| Park Electrochemical Corp. | 32,946 | 570,625 |
| PC Connection, Inc. | 17,700 | 508,698 |
| Plantronics, Inc. | 57,130 | 3,119,298 |
| Plexus Corp. * | 56,462 | 2,935,459 |
| Pure Storage, Inc., Class A * | 107,400 | 1,139,514 |
| Quantenna Communications, Inc. * | 10,900 | 200,560 |
| Radisys Corp. * | 56,700 | 227,367 |
| Rogers Corp. * | 30,567 | 3,146,567 |
| Sanmina Corp. * | 123,700 | 4,607,825 |
| ScanSource, Inc. * | 45,205 | 1,785,597 |
| ShoreTel, Inc. * | 105,257 | 689,433 |
| Silicom Ltd. | 8,600 | 466,378 |
| Sonus Networks, Inc. * | 72,111 | 553,812 |
| Stratasys Ltd. * | 84,706 | 2,097,321 |
| Super Micro Computer, Inc. * | 67,326 | 1,642,754 |
| SYNNEX Corp. | 48,000 | 5,204,640 |
| Systemax, Inc. | 30,000 | 397,200 |
| Tech Data Corp. * | 59,067 | 5,649,759 |
| TTM Technologies, Inc. * | 120,192 | 2,010,812 |
| Security | Number
of Shares | Value ($) |
| Ubiquiti Networks, Inc. * | 43,772 | 2,255,133 |
| Universal Display Corp. | 67,952 | 6,071,511 |
| USA Technologies, Inc. * | 56,300 | 275,870 |
| ViaSat, Inc. * | 83,619 | 5,354,125 |
| Viavi Solutions, Inc. * | 387,100 | 3,871,000 |
| Vishay Intertechnology, Inc. | 221,928 | 3,628,523 |
| Vishay Precision Group, Inc. * | 16,500 | 283,800 |
| | | 168,679,222 |
| |
| Telecommunication Services 0.8% |
| ATN International, Inc. | 18,000 | 1,245,420 |
| Boingo Wireless, Inc. * | 51,500 | 735,935 |
| Cincinnati Bell, Inc. * | 68,129 | 1,284,232 |
| Cogent Communications Holdings, Inc. | 65,300 | 2,938,500 |
| Consolidated Communications Holdings, Inc. (a) | 84,974 | 2,011,334 |
| FairPoint Communications, Inc. * | 36,600 | 624,030 |
| General Communication, Inc., Class A * | 46,100 | 1,725,984 |
| Globalstar, Inc. *(a) | 680,789 | 1,300,307 |
| Hawaiian Telcom Holdco, Inc. * | 9,713 | 247,196 |
| IDT Corp., Class B | 25,400 | 385,826 |
| Intelsat S.A. *(a) | 40,100 | 118,295 |
| Iridium Communications, Inc. * | 133,700 | 1,417,220 |
| Lumos Networks Corp. * | 27,200 | 487,152 |
| NII Holdings, Inc. * | 147,900 | 127,608 |
| ORBCOMM, Inc. * | 121,600 | 1,172,224 |
| pdvWireless, Inc. *(a) | 15,305 | 392,573 |
| Shenandoah Telecommunications Co. | 77,900 | 2,492,800 |
| Spok Holdings, Inc. | 39,700 | 712,615 |
| Straight Path Communications, Inc., Class B * | 17,115 | 2,205,439 |
| Vonage Holdings Corp. * | 313,700 | 2,104,927 |
| Windstream Holdings, Inc. | 282,082 | 1,557,093 |
| | | 25,286,710 |
| |
| Transportation 1.5% |
| Air Transport Services Group, Inc. * | 81,500 | 1,498,785 |
| Allegiant Travel Co. | 22,581 | 3,283,277 |
| ArcBest Corp. | 40,572 | 1,073,129 |
| Atlas Air Worldwide Holdings, Inc. * | 42,100 | 2,441,800 |
| Celadon Group, Inc. | 39,100 | 154,445 |
| Costamare, Inc. | 40,200 | 270,948 |
| Covenant Transport Group, Inc., Class A * | 21,294 | 398,836 |
| Echo Global Logistics, Inc. * | 45,275 | 848,906 |
| Forward Air Corp. | 52,282 | 2,779,834 |
| Hawaiian Holdings, Inc. * | 86,700 | 4,707,810 |
| Heartland Express, Inc. | 75,400 | 1,517,048 |
| Hub Group, Inc., Class A * | 52,798 | 2,067,042 |
| Knight Transportation, Inc. | 112,500 | 3,858,750 |
| Marten Transport Ltd. | 35,365 | 877,052 |
| Matson, Inc. | 68,131 | 2,159,753 |
| P.A.M. Transportation Services, Inc. * | 4,000 | 75,080 |
| Park-Ohio Holdings Corp. | 13,600 | 535,160 |
| Radiant Logistics, Inc. * | 67,754 | 406,524 |
| Roadrunner Transportation Systems, Inc. * | 57,700 | 387,744 |
| Saia, Inc. * | 41,000 | 1,974,150 |
| Scorpio Bulkers, Inc. * | 89,575 | 667,334 |
| SkyWest, Inc. | 80,412 | 2,991,326 |
| Swift Transportation Co. * | 122,800 | 3,018,424 |
| Universal Logistics Holdings, Inc. | 11,747 | 163,871 |
| USA Truck, Inc. * | 14,200 | 95,282 |
| Werner Enterprises, Inc. | 73,649 | 2,010,618 |
| XPO Logistics, Inc. * | 161,802 | 7,991,401 |
| YRC Worldwide, Inc. * | 59,200 | 631,072 |
| | | 48,885,401 |
| |
Schwab Equity Index Funds | Semiannual Report
Schwab Small-Cap Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Utilities 3.7% |
| ALLETE, Inc. | 81,299 | 5,683,613 |
| American States Water Co. | 62,600 | 2,786,952 |
| AquaVenture Holdings Ltd. *(a) | 11,800 | 216,766 |
| Artesian Resources Corp., Class A | 10,500 | 403,305 |
| Atlantic Power Corp. * | 241,300 | 603,250 |
| Atlantica Yield plc | 92,484 | 1,927,367 |
| Avista Corp. | 101,530 | 4,095,720 |
| Black Hills Corp. | 84,898 | 5,774,762 |
| California Water Service Group | 75,774 | 2,705,132 |
| Chesapeake Utilities Corp. | 25,400 | 1,861,820 |
| Connecticut Water Service, Inc. | 18,400 | 987,528 |
| Consolidated Water Co., Ltd. | 20,376 | 240,437 |
| Delta Natural Gas Co., Inc. | 12,200 | 369,660 |
| Dynegy, Inc. * | 182,700 | 1,172,934 |
| El Paso Electric Co. | 66,503 | 3,431,555 |
| Genie Energy Ltd., Class B | 42,011 | 333,987 |
| Global Water Resources, Inc. (a) | 15,000 | 137,100 |
| IDACORP, Inc. | 83,643 | 7,069,506 |
| MGE Energy, Inc. | 58,940 | 3,789,842 |
| Middlesex Water Co. | 26,185 | 998,172 |
| New Jersey Resources Corp. | 141,100 | 5,693,385 |
| Northwest Natural Gas Co. | 45,995 | 2,741,302 |
| NorthWestern Corp. | 80,369 | 4,804,459 |
| NRG Yield, Inc., Class A | 59,933 | 1,039,238 |
| NRG Yield, Inc., Class C | 107,624 | 1,904,945 |
| ONE Gas, Inc. | 85,700 | 5,898,731 |
| Ormat Technologies, Inc. | 64,973 | 3,837,305 |
| Otter Tail Corp. | 66,253 | 2,616,994 |
| Pattern Energy Group, Inc. | 109,900 | 2,419,998 |
| PNM Resources, Inc. | 129,900 | 4,838,775 |
| Portland General Electric Co. | 149,008 | 6,756,023 |
| SJW Group. | 27,500 | 1,343,100 |
| South Jersey Industries, Inc. | 132,020 | 4,953,390 |
| Southwest Gas Holdings, Inc. | 78,196 | 6,549,697 |
| Spark Energy, Inc., Class A (a) | 7,900 | 283,610 |
| Spire, Inc. | 73,371 | 5,029,582 |
| TerraForm Global, Inc., Class A * | 144,200 | 684,950 |
| TerraForm Power, Inc., Class A * | 151,100 | 1,902,349 |
| The York Water Co. | 19,200 | 720,000 |
| Unitil Corp. | 22,100 | 1,070,303 |
| Vivint Solar, Inc. *(a) | 27,000 | 81,000 |
| WGL Holdings, Inc. | 83,033 | 6,846,901 |
| | | 116,605,445 |
| Total Common Stock |
| (Cost $2,165,609,297) | | 3,153,187,296 |
|
| Rights 0.0% of net assets |
| |
| Media 0.0% |
| Media General, Inc. CVR *(d) | 174,886 | 297,306 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Dyax Corp. CVR *(d) | 224,713 | 249,431 |
| Omthera Pharmaceutical CVR *(d) | 8,400 | — |
| Tobira Therapeutics, Inc. *(d) | 14,029 | 192,759 |
| | | 442,190 |
| Total Rights |
| (Cost $442,190) | | 739,496 |
|
| Security | Number
of Shares | Value ($) |
| Other Investment Company 2.6% of net assets |
| |
| Securities Lending Collateral 2.6% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 83,253,815 | 83,253,815 |
| Total Other Investment Company |
| (Cost $83,253,815) | | 83,253,815 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investments 1.2% of net assets |
| |
| Time Deposits 1.2% |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (c) | 32,097,833 | 32,097,833 |
| BNP Paribas |
| 0.42%, 05/01/17 (c) | 3,841,662 | 3,841,662 |
| Total Short-Term Investments |
| (Cost $35,939,495) | | 35,939,495 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $2,297,663,908 and the unrealized appreciation and depreciation were $1,183,254,916 and ($207,798,722), respectively, with a net unrealized appreciation of $975,456,194.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $80,171,978. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| CVR — | Contingent Value Rights |
| REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| Russell 2000 Index, mini, Long, expires 06/16/17 | 234 | 16,361,280 | 89,302 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.6% | Common Stock | 3,472,334,120 | 5,824,673,305 |
| 0.0% | Rights | 34,633 | 65,690 |
| 0.4% | Other Investment Company | 22,506,953 | 22,506,953 |
| 0.2% | Short-Term Investment | 11,400,000 | 11,400,000 |
| 100.2% | Total Investments | 3,506,275,706 | 5,858,645,948 |
| (0.2%) | Other Assets and Liabilities, Net | | (13,013,671) |
| 100.0% | Net Assets | | 5,845,632,277 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.6% of net assets |
| |
| Automobiles & Components 1.0% |
| Adient plc | 19,862 | 1,461,049 |
| American Axle & Manufacturing Holdings, Inc. * | 13,400 | 235,706 |
| Autoliv, Inc. | 21,000 | 2,103,990 |
| BorgWarner, Inc. | 44,800 | 1,894,144 |
| Cooper Tire & Rubber Co. | 15,600 | 597,480 |
| Cooper-Standard Holding, Inc. * | 5,400 | 610,578 |
| Dana, Inc. | 35,200 | 683,584 |
| Delphi Automotive plc | 63,485 | 5,104,194 |
| Dorman Products, Inc. * | 8,900 | 740,035 |
| Ford Motor Co. | 906,340 | 10,395,720 |
| General Motors Co. | 321,185 | 11,125,848 |
| Gentex Corp. | 59,600 | 1,230,740 |
| Gentherm, Inc. * | 13,007 | 483,210 |
| Harley-Davidson, Inc. | 42,093 | 2,391,303 |
| Horizon Global Corp. * | 3,717 | 52,373 |
| LCI Industries | 5,400 | 546,210 |
| Lear Corp. | 16,400 | 2,339,624 |
| Modine Manufacturing Co. * | 12,100 | 146,410 |
| Motorcar Parts of America, Inc. * | 13,800 | 418,416 |
| Standard Motor Products, Inc. | 7,500 | 381,225 |
| Stoneridge, Inc. * | 13,100 | 256,891 |
| Strattec Security Corp. | 1,500 | 48,225 |
| Tenneco, Inc. | 10,080 | 635,342 |
| Tesla, Inc. * | 28,319 | 8,894,148 |
| The Goodyear Tire & Rubber Co. | 53,637 | 1,943,269 |
| Thor Industries, Inc. | 10,000 | 961,800 |
| Tower International, Inc. | 5,564 | 150,784 |
| Visteon Corp. * | 8,000 | 823,600 |
| VOXX International Corp. * | 9,100 | 59,150 |
| Winnebago Industries, Inc. | 7,400 | 212,380 |
| | | 56,927,428 |
| |
| Banks 6.7% |
| 1st Source Corp. | 6,080 | 293,725 |
| Ameris Bancorp | 6,348 | 298,991 |
| Arrow Financial Corp. | 5,886 | 201,595 |
| Associated Banc-Corp. | 32,290 | 804,021 |
| Astoria Financial Corp. | 19,300 | 393,527 |
| Banc of California, Inc. | 15,000 | 325,500 |
| BancFirst Corp. | 2,300 | 220,915 |
| BancorpSouth, Inc. | 16,112 | 490,610 |
| Security | Number
of Shares | Value ($) |
| Bank Mutual Corp. | 18,268 | 168,066 |
| Bank of America Corp. | 2,341,001 | 54,638,963 |
| Bank of Hawaii Corp. | 10,000 | 814,800 |
| Bank of the Ozarks, Inc. | 22,800 | 1,082,316 |
| BankUnited, Inc. | 26,896 | 949,160 |
| Banner Corp. | 5,571 | 307,519 |
| BB&T Corp. | 194,107 | 8,381,540 |
| Beneficial Bancorp, Inc. | 29,899 | 478,384 |
| Berkshire Hills Bancorp, Inc. | 8,000 | 300,000 |
| BNC Bancorp | 11,012 | 368,351 |
| BofI Holding, Inc. *(b) | 20,000 | 477,800 |
| BOK Financial Corp. | 3,740 | 315,245 |
| Boston Private Financial Holdings, Inc. | 20,729 | 323,372 |
| Brookline Bancorp, Inc. | 33,705 | 490,408 |
| Bryn Mawr Bank Corp. | 3,400 | 145,860 |
| Camden National Corp. | 3,750 | 160,312 |
| Capital Bank Financial Corp., Class A | 10,300 | 427,450 |
| Capital City Bank Group, Inc. | 6,875 | 141,694 |
| Capitol Federal Financial, Inc. | 37,463 | 548,084 |
| Cathay General Bancorp | 16,006 | 609,028 |
| CenterState Banks, Inc. | 17,590 | 443,796 |
| Central Pacific Financial Corp. | 10,269 | 321,214 |
| Century Bancorp, Inc., Class A | 800 | 50,440 |
| Chemical Financial Corp. | 15,770 | 748,286 |
| CIT Group, Inc. | 44,300 | 2,051,533 |
| Citigroup, Inc. | 647,289 | 38,267,726 |
| Citizens Financial Group, Inc. | 116,300 | 4,269,373 |
| City Holding Co. | 4,800 | 341,232 |
| Columbia Banking System, Inc. | 9,951 | 393,164 |
| Comerica, Inc. | 43,459 | 3,072,551 |
| Commerce Bancshares, Inc. | 20,482 | 1,125,486 |
| Community Bank System, Inc. | 15,800 | 884,010 |
| Community Trust Bancorp, Inc. | 10,335 | 464,558 |
| ConnectOne Bancorp, Inc. | 11,100 | 246,420 |
| Cullen/Frost Bankers, Inc. | 15,600 | 1,472,484 |
| Customers Bancorp, Inc. * | 13,200 | 408,276 |
| CVB Financial Corp. | 19,411 | 418,113 |
| Dime Community Bancshares, Inc. | 6,875 | 133,719 |
| Eagle Bancorp, Inc. * | 11,760 | 704,424 |
| East West Bancorp, Inc. | 34,500 | 1,872,315 |
| Enterprise Financial Services Corp. | 7,400 | 312,650 |
| Essent Group Ltd. * | 14,900 | 551,449 |
| EverBank Financial Corp. | 35,300 | 688,350 |
| F.N.B. Corp. | 66,933 | 953,126 |
| FCB Financial Holdings, Inc., Class A * | 14,600 | 689,850 |
| Federal Agricultural Mortgage Corp., Class C | 5,100 | 290,955 |
| Fifth Third Bancorp | 178,314 | 4,356,211 |
| First BanCorp (Puerto Rico) * | 56,579 | 332,685 |
| First Busey Corp. | 16,033 | 480,188 |
| First Citizens BancShares, Inc., Class A | 1,900 | 661,314 |
| First Commonwealth Financial Corp. | 24,904 | 321,511 |
| First Financial Bancorp | 23,039 | 637,028 |
| First Financial Bankshares, Inc. | 18,200 | 727,090 |
| First Financial Corp. | 2,600 | 126,880 |
| First Hawaiian, Inc. | 11,000 | 327,470 |
| First Horizon National Corp. | 66,116 | 1,213,229 |
| First Interstate BancSystem, Inc., Class A | 8,900 | 335,975 |
| First Merchants Corp. | 9,041 | 374,117 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| First Midwest Bancorp, Inc. | 15,825 | 359,386 |
| First Republic Bank | 36,924 | 3,413,993 |
| First United Corp. * | 2,475 | 34,774 |
| Flagstar Bancorp, Inc. * | 8,060 | 235,674 |
| Flushing Financial Corp. | 6,800 | 200,464 |
| Fulton Financial Corp. | 37,785 | 697,133 |
| Glacier Bancorp, Inc. | 16,797 | 567,403 |
| Great Southern Bancorp, Inc. | 3,400 | 170,510 |
| Great Western Bancorp, Inc. | 13,000 | 535,600 |
| Hancock Holding Co. | 17,044 | 795,955 |
| Hanmi Financial Corp. | 14,700 | 427,035 |
| Heartland Financial USA, Inc. | 2,500 | 120,000 |
| Heritage Financial Corp. | 6,135 | 161,964 |
| Hilltop Holdings, Inc. | 14,975 | 416,455 |
| Home BancShares, Inc. | 34,000 | 865,300 |
| HomeStreet, Inc. * | 14,000 | 364,000 |
| Hope Bancorp, Inc. | 26,063 | 477,214 |
| Huntington Bancshares, Inc. | 265,936 | 3,419,937 |
| IBERIABANK Corp. | 12,858 | 1,020,282 |
| Impac Mortgage Holdings, Inc. * | 15,600 | 223,080 |
| Independent Bank Corp., Massachusetts | 5,700 | 360,810 |
| Independent Bank Corp., Michigan | 16,731 | 373,101 |
| International Bancshares Corp. | 13,484 | 504,302 |
| Investors Bancorp, Inc. | 78,997 | 1,094,108 |
| JPMorgan Chase & Co. | 833,063 | 72,476,481 |
| Kearny Financial Corp. | 29,323 | 428,116 |
| KeyCorp | 245,546 | 4,478,759 |
| Lakeland Bancorp, Inc. | 15,000 | 291,750 |
| Lakeland Financial Corp. | 5,550 | 253,413 |
| LegacyTexas Financial Group, Inc. | 8,700 | 328,947 |
| LendingTree, Inc. * | 2,444 | 344,360 |
| M&T Bank Corp. | 35,266 | 5,480,689 |
| MainSource Financial Group, Inc. | 5,535 | 189,297 |
| MB Financial, Inc. | 20,757 | 882,380 |
| Merchants Bancshares, Inc. | 3,650 | 181,770 |
| Meridian Bancorp, Inc. | 10,660 | 187,083 |
| Meta Financial Group, Inc. | 1,939 | 164,621 |
| MGIC Investment Corp. * | 102,800 | 1,083,512 |
| MutualFirst Financial, Inc. | 2,000 | 65,900 |
| National Bank Holdings Corp., Class A | 12,800 | 404,096 |
| Nationstar Mortgage Holdings, Inc. * | 10,200 | 164,322 |
| NBT Bancorp, Inc. | 11,500 | 439,070 |
| New York Community Bancorp, Inc. | 114,285 | 1,518,848 |
| Northfield Bancorp, Inc. | 15,765 | 289,761 |
| Northrim BanCorp, Inc. | 4,281 | 136,992 |
| Northwest Bancshares, Inc. | 19,350 | 312,309 |
| OceanFirst Financial Corp. | 7,150 | 197,697 |
| Ocwen Financial Corp. * | 18,620 | 42,640 |
| OFG Bancorp | 8,163 | 95,507 |
| Old National Bancorp | 29,600 | 497,280 |
| Oritani Financial Corp. | 6,000 | 101,700 |
| Pacific Premier Bancorp, Inc. * | 14,000 | 511,700 |
| PacWest Bancorp | 31,433 | 1,552,476 |
| Park National Corp. | 4,845 | 510,808 |
| People's United Financial, Inc. | 89,322 | 1,560,455 |
| Peoples Bancorp, Inc. | 13,100 | 438,588 |
| Peoples Financial Corp. * | 3,000 | 42,750 |
| PHH Corp. * | 22,086 | 284,909 |
| Pinnacle Financial Partners, Inc. | 9,466 | 605,824 |
| Popular, Inc. | 25,720 | 1,077,925 |
| Premier Financial Bancorp, Inc. | 2,909 | 62,340 |
| PrivateBancorp, Inc. | 21,000 | 1,213,170 |
| Prosperity Bancshares, Inc. | 17,300 | 1,162,560 |
| Provident Financial Holdings, Inc. | 4,350 | 83,651 |
| Provident Financial Services, Inc. | 14,017 | 360,097 |
| Radian Group, Inc. | 51,000 | 860,880 |
| Regions Financial Corp. | 273,873 | 3,765,754 |
| Renasant Corp. | 8,910 | 377,784 |
| Security | Number
of Shares | Value ($) |
| Republic Bancorp, Inc., Class A | 6,521 | 234,626 |
| S&T Bancorp, Inc. | 12,400 | 445,904 |
| Sandy Spring Bancorp, Inc. | 5,900 | 255,175 |
| Seacoast Banking Corp. of Florida * | 17,436 | 421,951 |
| ServisFirst Bancshares, Inc. | 17,000 | 642,600 |
| Shore Bancshares, Inc. | 1,250 | 20,738 |
| Signature Bank * | 11,500 | 1,592,175 |
| Simmons First National Corp., Class A | 11,900 | 650,335 |
| South State Corp. | 5,584 | 492,230 |
| Southside Bancshares, Inc. | 5,226 | 181,447 |
| Southwest Bancorp, Inc. | 7,800 | 202,410 |
| State Bank Financial Corp. | 6,200 | 166,532 |
| Sterling Bancorp | 28,685 | 666,926 |
| Stock Yards Bancorp, Inc. | 5,505 | 225,705 |
| Stonegate Bank | 8,900 | 408,510 |
| Sun Bancorp, Inc. | 3,863 | 96,382 |
| SunTrust Banks, Inc. | 111,657 | 6,343,234 |
| SVB Financial Group * | 11,800 | 2,076,092 |
| Synovus Financial Corp. | 28,042 | 1,172,156 |
| TCF Financial Corp. | 32,100 | 529,971 |
| Texas Capital Bancshares, Inc. * | 10,689 | 813,433 |
| TFS Financial Corp. | 21,200 | 350,648 |
| The First of Long Island Corp. | 9,000 | 244,800 |
| The PNC Financial Services Group, Inc. | 114,342 | 13,692,454 |
| Timberland Bancorp, Inc. | 2,000 | 44,340 |
| Tompkins Financial Corp. | 4,024 | 332,664 |
| Towne Bank | 21,600 | 700,920 |
| TriCo Bancshares | 5,682 | 201,484 |
| TriState Capital Holdings, Inc. * | 17,300 | 430,770 |
| TrustCo Bank Corp. | 20,657 | 164,223 |
| Trustmark Corp. | 24,262 | 805,984 |
| U.S. Bancorp | 372,737 | 19,113,953 |
| UMB Financial Corp. | 11,374 | 824,501 |
| Umpqua Holdings Corp. | 51,951 | 917,974 |
| Union Bankshares Corp. | 12,893 | 441,456 |
| United Bankshares, Inc. | 20,827 | 830,997 |
| United Community Banks, Inc. | 11,678 | 319,393 |
| United Financial Bancorp, Inc. | 14,699 | 253,852 |
| Univest Corp. of Pennsylvania | 5,795 | 175,588 |
| Valley National Bancorp | 77,242 | 908,366 |
| Walker & Dunlop, Inc. * | 9,700 | 435,045 |
| Washington Federal, Inc. | 23,242 | 783,255 |
| Washington Trust Bancorp, Inc. | 3,600 | 177,120 |
| Webster Financial Corp. | 21,963 | 1,115,940 |
| Wells Fargo & Co. | 1,051,813 | 56,629,612 |
| WesBanco, Inc. | 14,156 | 563,550 |
| Westamerica Bancorp | 5,200 | 286,104 |
| Western Alliance Bancorp * | 26,200 | 1,254,980 |
| Wintrust Financial Corp. | 13,200 | 935,352 |
| WSFS Financial Corp. | 6,000 | 283,200 |
| Zions Bancorp | 49,625 | 1,986,489 |
| | | 390,417,431 |
| |
| Capital Goods 7.7% |
| 3M Co. | 139,257 | 27,270,698 |
| A.O. Smith Corp. | 35,000 | 1,885,800 |
| AAON, Inc. | 10,279 | 376,725 |
| AAR Corp. | 8,400 | 302,316 |
| Actuant Corp., Class A | 10,280 | 280,644 |
| Acuity Brands, Inc. | 10,100 | 1,778,610 |
| Advanced Drainage Systems, Inc. | 7,807 | 179,951 |
| AECOM * | 31,725 | 1,085,312 |
| Aegion Corp. * | 17,800 | 406,196 |
| Aerojet Rocketdyne Holdings, Inc. * | 11,600 | 259,956 |
| Aerovironment, Inc. * | 4,200 | 119,994 |
| AGCO Corp. | 15,462 | 989,413 |
| Air Lease Corp. | 17,400 | 663,636 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Aircastle Ltd. | 14,100 | 333,042 |
| Alamo Group, Inc. | 2,500 | 197,650 |
| Albany International Corp., Class A | 6,718 | 327,503 |
| Allegion plc | 21,033 | 1,654,035 |
| Allison Transmission Holdings, Inc. | 38,555 | 1,491,307 |
| Altra Industrial Motion Corp. | 4,300 | 189,845 |
| American Railcar Industries, Inc. (b) | 4,500 | 188,775 |
| American Woodmark Corp. * | 4,000 | 367,600 |
| AMETEK, Inc. | 55,959 | 3,200,855 |
| Apogee Enterprises, Inc. | 6,600 | 359,700 |
| Applied Industrial Technologies, Inc. | 6,525 | 417,600 |
| Arconic, Inc. | 97,499 | 2,664,648 |
| Argan, Inc. | 2,852 | 190,656 |
| Armstrong Flooring, Inc. * | 4,247 | 81,500 |
| Armstrong World Industries, Inc. * | 14,595 | 682,316 |
| Astec Industries, Inc. | 5,700 | 361,095 |
| Astronics Corp. * | 2,932 | 95,319 |
| Axon Enterprise, Inc. * | 11,800 | 290,044 |
| AZZ, Inc. | 10,000 | 590,500 |
| Babcock & Wilcox Enterprises, Inc. * | 8,700 | 81,519 |
| Barnes Group, Inc. | 11,200 | 615,664 |
| Beacon Roofing Supply, Inc. * | 16,100 | 798,077 |
| BMC Stock Holdings, Inc. * | 23,915 | 557,220 |
| Briggs & Stratton Corp. | 11,400 | 284,886 |
| Builders FirstSource, Inc. * | 17,100 | 273,771 |
| BWX Technologies, Inc. | 24,900 | 1,224,333 |
| CAI International, Inc. * | 22,100 | 455,702 |
| Carlisle Cos., Inc. | 15,000 | 1,520,850 |
| Caterpillar, Inc. | 138,269 | 14,139,388 |
| Chart Industries, Inc. * | 4,400 | 160,644 |
| Chicago Bridge & Iron Co., N.V. | 25,800 | 776,064 |
| CIRCOR International, Inc. | 3,750 | 250,163 |
| Colfax Corp. * | 26,100 | 1,056,267 |
| Columbus McKinnon Corp. | 4,300 | 112,359 |
| Comfort Systems USA, Inc. | 7,700 | 282,590 |
| Continental Building Products, Inc. * | 8,721 | 212,356 |
| Crane Co. | 13,000 | 1,038,830 |
| Cubic Corp. | 4,500 | 233,550 |
| Cummins, Inc. | 36,500 | 5,509,310 |
| Curtiss-Wright Corp. | 9,100 | 850,486 |
| Deere & Co. | 70,154 | 7,829,888 |
| DigitalGlobe, Inc. * | 12,322 | 396,768 |
| DMC Global, Inc. | 6,800 | 104,040 |
| Donaldson Co., Inc. | 36,200 | 1,675,336 |
| Douglas Dynamics, Inc. | 4,907 | 156,533 |
| Dover Corp. | 38,161 | 3,010,140 |
| Ducommun, Inc. * | 3,200 | 94,048 |
| DXP Enterprises, Inc. * | 1,700 | 62,016 |
| Dycom Industries, Inc. * | 8,600 | 908,676 |
| Eaton Corp. plc | 107,577 | 8,137,124 |
| EMCOR Group, Inc. | 12,700 | 834,898 |
| Emerson Electric Co. | 152,970 | 9,221,032 |
| Encore Wire Corp. | 4,600 | 203,320 |
| EnerSys | 7,500 | 623,325 |
| Engility Holdings, Inc. * | 4,116 | 116,689 |
| EnPro Industries, Inc. | 4,900 | 346,185 |
| ESCO Technologies, Inc. | 3,900 | 229,515 |
| Esterline Technologies Corp. * | 5,900 | 539,555 |
| Fastenal Co. | 63,432 | 2,834,142 |
| Federal Signal Corp. | 12,800 | 199,808 |
| Flowserve Corp. | 27,700 | 1,409,099 |
| Fluor Corp. | 35,719 | 1,833,099 |
| Fortive Corp. | 65,987 | 4,174,338 |
| Fortune Brands Home & Security, Inc. | 35,900 | 2,288,266 |
| Franklin Electric Co., Inc. | 9,700 | 398,670 |
| GATX Corp. | 8,900 | 533,110 |
| Generac Holdings, Inc. * | 12,500 | 439,625 |
| General Cable Corp. | 6,700 | 120,600 |
| Security | Number
of Shares | Value ($) |
| General Dynamics Corp. | 66,800 | 12,945,172 |
| General Electric Co. | 2,028,900 | 58,817,811 |
| Gibraltar Industries, Inc. * | 6,300 | 247,275 |
| Global Brass & Copper Holdings, Inc. | 8,800 | 313,720 |
| Graco, Inc. | 10,812 | 1,166,074 |
| Granite Construction, Inc. | 8,150 | 429,587 |
| Great Lakes Dredge & Dock Corp. * | 11,600 | 52,780 |
| Griffon Corp. | 15,100 | 362,400 |
| H&E Equipment Services, Inc. | 6,800 | 143,616 |
| Hardinge, Inc. | 4,800 | 50,400 |
| Harsco Corp. * | 36,200 | 472,410 |
| HD Supply Holdings, Inc. * | 51,900 | 2,091,570 |
| HEICO Corp. | 6,469 | 459,734 |
| HEICO Corp., Class A | 13,250 | 812,225 |
| Herc Holdings, Inc. * | 5,820 | 264,635 |
| Hexcel Corp. | 21,200 | 1,097,100 |
| Hillenbrand, Inc. | 17,800 | 656,820 |
| Honeywell International, Inc. | 178,180 | 23,366,525 |
| Hubbell, Inc. | 11,300 | 1,278,369 |
| Huntington Ingalls Industries, Inc. | 10,672 | 2,143,898 |
| Hyster-Yale Materials Handling, Inc. | 2,300 | 138,253 |
| IDEX Corp. | 19,025 | 1,993,059 |
| IES Holdings, Inc. * | 5,105 | 102,100 |
| Illinois Tool Works, Inc. | 71,500 | 9,873,435 |
| Ingersoll-Rand plc | 61,300 | 5,440,375 |
| ITT, Inc. | 19,300 | 813,109 |
| Jacobs Engineering Group, Inc. | 26,500 | 1,455,380 |
| John Bean Technologies Corp. | 8,183 | 725,423 |
| Johnson Controls International plc | 218,221 | 9,071,447 |
| Kadant, Inc. | 3,001 | 186,512 |
| Kaman Corp. | 5,700 | 273,657 |
| KBR, Inc. | 24,000 | 337,200 |
| Kennametal, Inc. | 14,700 | 611,226 |
| KLX, Inc. * | 15,600 | 737,880 |
| Kratos Defense & Security Solutions, Inc. * | 49,080 | 373,990 |
| L.B. Foster Co., Class A | 1,400 | 19,880 |
| L3 Technologies, Inc. | 17,900 | 3,074,683 |
| Lawson Products, Inc. * | 5,500 | 125,125 |
| Layne Christensen Co. * | 4,500 | 35,865 |
| Lennox International, Inc. | 8,449 | 1,397,380 |
| Lincoln Electric Holdings, Inc. | 13,600 | 1,210,808 |
| Lindsay Corp. | 3,100 | 269,266 |
| Lockheed Martin Corp. | 59,135 | 15,933,926 |
| Lydall, Inc. * | 5,500 | 288,200 |
| Masco Corp. | 77,500 | 2,869,050 |
| Masonite International Corp. * | 8,700 | 723,840 |
| MasTec, Inc. * | 15,750 | 695,363 |
| Mercury Systems, Inc. * | 7,800 | 291,564 |
| Meritor, Inc. * | 22,600 | 402,506 |
| Micronet Enertec Technologies, Inc. * | 26,009 | 32,511 |
| Moog, Inc., Class A * | 7,587 | 520,848 |
| MRC Global, Inc. * | 15,600 | 284,388 |
| MSC Industrial Direct Co., Inc., Class A | 12,000 | 1,074,360 |
| Mueller Industries, Inc. | 11,800 | 378,072 |
| Mueller Water Products, Inc., Class A | 55,039 | 619,189 |
| MYR Group, Inc. * | 8,500 | 359,210 |
| National Presto Industries, Inc. | 2,900 | 302,615 |
| Navistar International Corp. * | 11,600 | 312,156 |
| NCI Building Systems, Inc. * | 14,480 | 253,400 |
| NN, Inc. | 16,700 | 460,920 |
| Nordson Corp. | 11,599 | 1,452,195 |
| Northrop Grumman Corp. | 41,259 | 10,148,064 |
| NOW, Inc. * | 18,205 | 309,667 |
| Ocean Power Technologies, Inc. *(b) | 121,730 | 174,074 |
| Omega Flex, Inc. | 700 | 39,319 |
| Orbital ATK, Inc. | 14,394 | 1,425,006 |
| Oshkosh Corp. | 14,300 | 992,277 |
| Owens Corning | 26,800 | 1,630,780 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| PACCAR, Inc. | 79,022 | 5,273,138 |
| Parker-Hannifin Corp. | 29,300 | 4,711,440 |
| Patrick Industries, Inc. * | 3,177 | 225,726 |
| Pentair plc | 42,885 | 2,766,511 |
| PGT Innovations, Inc. * | 10,000 | 109,000 |
| Powell Industries, Inc. | 2,800 | 96,572 |
| Preformed Line Products Co. | 1,000 | 52,930 |
| Primoris Services Corp. | 6,900 | 158,493 |
| Proto Labs, Inc. * | 4,800 | 278,400 |
| Quanex Building Products Corp. | 6,125 | 124,950 |
| Quanta Services, Inc. * | 38,271 | 1,356,324 |
| Raven Industries, Inc. | 5,600 | 173,600 |
| Raytheon Co. | 67,677 | 10,504,147 |
| RBC Bearings, Inc. * | 6,000 | 601,800 |
| Regal Beloit Corp. | 13,600 | 1,072,360 |
| Rexnord Corp. * | 29,900 | 729,560 |
| Rockwell Automation, Inc. | 28,431 | 4,473,618 |
| Rockwell Collins, Inc. | 37,301 | 3,882,661 |
| Roper Technologies, Inc. | 23,759 | 5,196,093 |
| Rush Enterprises, Inc., Class A * | 8,200 | 309,550 |
| Sensata Technologies Holding N.V. * | 34,800 | 1,433,064 |
| Simpson Manufacturing Co., Inc. | 16,200 | 675,702 |
| SiteOne Landscape Supply, Inc. * | 12,000 | 573,720 |
| Snap-on, Inc. | 12,280 | 2,057,268 |
| Spirit AeroSystems Holdings, Inc., Class A | 31,100 | 1,777,676 |
| SPX Corp. * | 7,110 | 171,067 |
| SPX FLOW, Inc. * | 7,110 | 256,955 |
| Standex International Corp. | 3,000 | 281,850 |
| Stanley Black & Decker, Inc. | 34,913 | 4,753,405 |
| Sun Hydraulics Corp. | 5,600 | 217,504 |
| Teledyne Technologies, Inc. * | 9,057 | 1,221,155 |
| Tennant Co. | 4,200 | 307,650 |
| Terex Corp. | 27,000 | 944,460 |
| Textainer Group Holdings Ltd. | 9,500 | 142,025 |
| Textron, Inc. | 68,300 | 3,186,878 |
| The Boeing Co. | 133,036 | 24,589,044 |
| The Gorman-Rupp Co. | 5,141 | 147,135 |
| The Greenbrier Cos., Inc. | 5,800 | 252,010 |
| The KeyW Holding Corp. * | 8,400 | 79,716 |
| The Manitowoc Co., Inc. * | 23,200 | 138,504 |
| The Middleby Corp. * | 14,000 | 1,905,820 |
| The Timken Co. | 19,300 | 931,225 |
| The Toro Co. | 25,900 | 1,681,428 |
| Thermon Group Holdings, Inc. * | 9,500 | 194,750 |
| Titan International, Inc. | 30,625 | 327,994 |
| Titan Machinery, Inc. * | 3,600 | 57,060 |
| TransDigm Group, Inc. | 11,800 | 2,911,414 |
| Trex Co., Inc. * | 5,400 | 395,226 |
| TriMas Corp. * | 9,293 | 213,274 |
| Trinity Industries, Inc. | 38,000 | 1,022,200 |
| Triton International Ltd. | 6,000 | 183,660 |
| Triumph Group, Inc. | 8,100 | 212,220 |
| Tutor Perini Corp. * | 7,100 | 219,035 |
| Twin Disc, Inc. * | 17,900 | 350,840 |
| United Rentals, Inc. * | 18,900 | 2,072,574 |
| United Technologies Corp. | 173,998 | 20,704,022 |
| Univar, Inc. * | 26,100 | 779,085 |
| Universal Forest Products, Inc. | 4,600 | 438,334 |
| USG Corp. * | 28,300 | 857,490 |
| Valmont Industries, Inc. | 6,100 | 929,335 |
| Vectrus, Inc. * | 1,938 | 49,303 |
| Veritiv Corp. * | 1,466 | 75,719 |
| Vicor Corp. * | 9,900 | 178,200 |
| W.W. Grainger, Inc. | 12,100 | 2,331,670 |
| Wabash National Corp. | 11,200 | 255,136 |
| WABCO Holdings, Inc. * | 12,733 | 1,513,572 |
| Wabtec Corp. | 19,456 | 1,632,164 |
| Watsco, Inc. | 6,800 | 943,840 |
| Security | Number
of Shares | Value ($) |
| Watts Water Technologies, Inc., Class A | 7,800 | 485,160 |
| Welbilt, Inc. * | 23,200 | 475,600 |
| Wesco Aircraft Holdings, Inc. * | 13,500 | 164,025 |
| WESCO International, Inc. * | 12,200 | 743,590 |
| Woodward, Inc. | 14,800 | 1,001,516 |
| Xylem, Inc. | 41,800 | 2,148,938 |
| | | 449,537,869 |
| |
| Commercial & Professional Services 0.9% |
| ABM Industries, Inc. | 13,900 | 600,341 |
| ACCO Brands Corp. * | 42,001 | 598,514 |
| ARC Document Solutions, Inc. * | 3,000 | 11,040 |
| Brady Corp., Class A | 15,400 | 599,830 |
| Casella Waste Systems, Inc., Class A * | 13,300 | 200,165 |
| CDI Corp. * | 5,500 | 44,825 |
| Cintas Corp. | 19,650 | 2,406,536 |
| Clean Harbors, Inc. * | 10,900 | 633,399 |
| Cogint, Inc. *(b) | 79,100 | 419,230 |
| CompX International, Inc. | 2,000 | 29,800 |
| Copart, Inc. * | 54,436 | 1,682,072 |
| Covanta Holding Corp. | 26,400 | 384,120 |
| CRA International, Inc. | 4,200 | 159,348 |
| Deluxe Corp. | 12,100 | 870,111 |
| Ennis, Inc. | 6,500 | 114,400 |
| Equifax, Inc. | 26,116 | 3,533,756 |
| Essendant, Inc. | 5,800 | 96,860 |
| Exponent, Inc. | 6,600 | 403,590 |
| FTI Consulting, Inc. * | 11,500 | 397,785 |
| GP Strategies Corp. * | 1,500 | 40,650 |
| Healthcare Services Group, Inc. | 20,256 | 929,953 |
| Heidrick & Struggles International, Inc. | 5,000 | 107,500 |
| Herman Miller, Inc. | 8,700 | 287,970 |
| HNI Corp. | 12,700 | 593,852 |
| Huron Consulting Group, Inc. * | 5,000 | 222,500 |
| ICF International, Inc. * | 6,500 | 286,975 |
| IHS Markit Ltd. * | 78,260 | 3,396,484 |
| InnerWorkings, Inc. * | 7,400 | 78,366 |
| Insperity, Inc. | 6,800 | 621,180 |
| Interface, Inc. | 24,700 | 491,530 |
| KAR Auction Services, Inc. | 36,200 | 1,579,044 |
| Kelly Services, Inc., Class A | 5,700 | 127,224 |
| Kforce, Inc. | 7,105 | 161,284 |
| Kimball International, Inc., Class B | 9,100 | 161,707 |
| Knoll, Inc. | 7,000 | 167,720 |
| Korn/Ferry International | 6,600 | 213,840 |
| LSC Communications, Inc. | 4,579 | 118,459 |
| ManpowerGroup, Inc. | 14,537 | 1,467,946 |
| Mastech Digital, Inc. * | 675 | 4,860 |
| Matthews International Corp., Class A | 5,300 | 363,315 |
| McGrath RentCorp | 4,600 | 160,126 |
| Mistras Group, Inc. * | 4,000 | 90,000 |
| Mobile Mini, Inc. | 14,700 | 421,890 |
| MSA Safety, Inc. | 8,700 | 677,295 |
| Multi-Color Corp. | 4,625 | 355,200 |
| Navigant Consulting, Inc. * | 14,000 | 335,580 |
| Nielsen Holdings plc | 75,100 | 3,088,863 |
| NL Industries, Inc. * | 7,800 | 63,180 |
| On Assignment, Inc. * | 12,700 | 657,479 |
| Pitney Bowes, Inc. | 35,500 | 471,795 |
| Quad Graphics, Inc. | 9,800 | 257,348 |
| Republic Services, Inc. | 52,445 | 3,303,511 |
| Resources Connection, Inc. | 11,300 | 157,070 |
| Robert Half International, Inc. | 26,900 | 1,238,745 |
| Rollins, Inc. | 21,927 | 851,425 |
| RPX Corp. * | 10,300 | 132,252 |
| RR Donnelley & Sons Co. | 12,212 | 153,505 |
| Steelcase, Inc., Class A | 11,500 | 196,075 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Stericycle, Inc. * | 19,900 | 1,698,266 |
| Team, Inc. * | 4,548 | 122,341 |
| Tetra Tech, Inc. | 13,131 | 577,107 |
| The Advisory Board Co. * | 13,800 | 705,180 |
| The Brink's Co. | 7,100 | 435,940 |
| The Dun & Bradstreet Corp. | 7,840 | 859,342 |
| TransUnion * | 27,900 | 1,116,837 |
| TRC Cos., Inc. * | 3,350 | 58,625 |
| TriNet Group, Inc. * | 11,600 | 341,040 |
| TrueBlue, Inc. * | 10,100 | 276,235 |
| UniFirst Corp. | 3,700 | 515,040 |
| US Ecology, Inc. | 3,500 | 165,025 |
| Verisk Analytics, Inc. * | 36,600 | 3,030,846 |
| Viad Corp. | 3,625 | 163,850 |
| Virco Manufacturing Corp. * | 1,170 | 5,324 |
| WageWorks, Inc. * | 11,900 | 878,220 |
| Waste Management, Inc. | 94,010 | 6,842,048 |
| West Corp. | 11,812 | 315,262 |
| Willdan Group, Inc. * | 8,400 | 238,308 |
| | | 55,564,256 |
| |
| Consumer Durables & Apparel 1.4% |
| American Outdoor Brands Corp. * | 12,400 | 274,660 |
| AV Homes, Inc. * | 6,500 | 114,075 |
| Beazer Homes USA, Inc. * | 10,835 | 134,462 |
| Brunswick Corp. | 18,400 | 1,044,200 |
| CalAtlantic Group, Inc. | 12,527 | 453,728 |
| Callaway Golf Co. | 31,065 | 368,120 |
| Carter's, Inc. | 14,400 | 1,325,376 |
| Cavco Industries, Inc. * | 1,610 | 191,187 |
| Coach, Inc. | 66,208 | 2,607,933 |
| Columbia Sportswear Co. | 6,900 | 390,678 |
| Crocs, Inc. * | 15,000 | 93,450 |
| CSS Industries, Inc. | 4,800 | 126,528 |
| D.R. Horton, Inc. | 74,190 | 2,440,109 |
| Deckers Outdoor Corp. * | 7,500 | 446,925 |
| Ethan Allen Interiors, Inc. | 10,200 | 303,960 |
| Flexsteel Industries, Inc. | 1,900 | 100,928 |
| Foamex International, Inc. *(e) | 2,278 | — |
| Fossil Group, Inc. * | 7,662 | 132,169 |
| G-III Apparel Group Ltd. * | 11,300 | 267,810 |
| Garmin Ltd. | 27,800 | 1,413,352 |
| GoPro, Inc., Class A *(b) | 49,800 | 410,850 |
| Hanesbrands, Inc. | 89,688 | 1,956,095 |
| Hasbro, Inc. | 25,100 | 2,487,661 |
| Helen of Troy Ltd. * | 7,900 | 742,600 |
| Hovnanian Enterprises, Inc., Class A * | 50,500 | 118,170 |
| Iconix Brand Group, Inc. * | 9,600 | 67,200 |
| Installed Building Products, Inc. * | 4,326 | 230,792 |
| iRobot Corp. * | 7,300 | 582,102 |
| JAKKS Pacific, Inc. * | 7,500 | 36,750 |
| Kate Spade & Co. * | 27,500 | 478,500 |
| KB Home | 19,700 | 405,820 |
| La-Z-Boy, Inc. | 17,600 | 491,040 |
| Leggett & Platt, Inc. | 33,800 | 1,775,852 |
| Lennar Corp., Class A | 49,752 | 2,512,476 |
| Libbey, Inc. | 7,232 | 75,936 |
| lululemon Athletica, Inc. * | 23,957 | 1,245,764 |
| M.D.C. Holdings, Inc. | 9,453 | 293,138 |
| M/I Homes, Inc. * | 3,000 | 81,480 |
| Marine Products Corp. | 405 | 4,844 |
| Mattel, Inc. | 76,700 | 1,719,614 |
| Meritage Homes Corp. * | 15,000 | 584,250 |
| Michael Kors Holdings Ltd. * | 38,700 | 1,444,671 |
| Mohawk Industries, Inc. * | 14,919 | 3,502,832 |
| Movado Group, Inc. | 5,800 | 135,720 |
| NACCO Industries, Inc., Class A | 1,900 | 160,835 |
| Security | Number
of Shares | Value ($) |
| Nautilus, Inc. * | 9,825 | 178,815 |
| Newell Brands, Inc. | 108,101 | 5,160,742 |
| NIKE, Inc., Class B | 310,390 | 17,198,710 |
| Nova Lifestyle, Inc. *(b) | 57,200 | 90,948 |
| NVR, Inc. * | 700 | 1,477,875 |
| Oxford Industries, Inc. | 2,500 | 144,950 |
| Perry Ellis International, Inc. * | 5,500 | 112,860 |
| Polaris Industries, Inc. (b) | 16,081 | 1,371,066 |
| PulteGroup, Inc. | 68,976 | 1,563,686 |
| PVH Corp. | 16,411 | 1,658,003 |
| Ralph Lauren Corp. | 12,400 | 1,000,928 |
| Sequential Brands Group, Inc. * | 18,160 | 61,199 |
| Skechers U.S.A., Inc., Class A * | 38,000 | 959,500 |
| Steven Madden Ltd. * | 14,112 | 536,962 |
| Sturm, Ruger & Co., Inc. (b) | 2,700 | 163,215 |
| Superior Uniform Group, Inc. | 3,200 | 58,368 |
| Taylor Morrison Home Corp., Class A * | 9,876 | 228,136 |
| Tempur Sealy International, Inc. * | 13,900 | 652,605 |
| Toll Brothers, Inc. | 31,200 | 1,122,888 |
| TopBuild Corp. * | 7,688 | 393,549 |
| TRI Pointe Group, Inc. * | 25,000 | 311,250 |
| Tupperware Brands Corp. | 14,300 | 1,026,883 |
| Under Armour, Inc., Class A *(b) | 50,500 | 1,085,245 |
| Under Armour, Inc., Class C * | 37,665 | 731,078 |
| Universal Electronics, Inc. * | 5,200 | 360,360 |
| Vera Bradley, Inc. * | 11,000 | 100,650 |
| VF Corp. | 71,900 | 3,927,897 |
| Vista Outdoor, Inc. * | 17,574 | 343,747 |
| Vuzix Corp. *(b) | 7,800 | 46,020 |
| Whirlpool Corp. | 17,614 | 3,270,568 |
| William Lyon Homes, Class A * | 14,900 | 327,800 |
| Wolverine World Wide, Inc. | 27,500 | 663,025 |
| | | 80,104,170 |
| |
| Consumer Services 2.2% |
| American Public Education, Inc. * | 5,600 | 123,760 |
| Aramark | 54,200 | 1,979,384 |
| Ascent Capital Group, Inc., Class A * | 3,116 | 39,916 |
| Belmond Ltd., Class A * | 12,600 | 156,240 |
| Biglari Holdings, Inc. * | 279 | 119,030 |
| BJ's Restaurants, Inc. * | 7,300 | 329,230 |
| Bloomin' Brands, Inc. | 20,900 | 453,321 |
| Bob Evans Farms, Inc. | 4,200 | 280,308 |
| Boyd Gaming Corp. * | 21,300 | 483,084 |
| Bridgepoint Education, Inc. * | 13,700 | 167,140 |
| Bright Horizons Family Solutions, Inc. * | 13,712 | 1,043,757 |
| Brinker International, Inc. | 12,650 | 559,003 |
| Buffalo Wild Wings, Inc. * | 4,800 | 756,240 |
| Caesars Entertainment Corp. *(b) | 41,600 | 461,760 |
| Career Education Corp. * | 25,114 | 254,907 |
| Carnival Corp. | 100,339 | 6,197,940 |
| Chipotle Mexican Grill, Inc. * | 6,879 | 3,263,879 |
| Choice Hotels International, Inc. | 12,200 | 764,940 |
| Churchill Downs, Inc. | 2,900 | 483,720 |
| Chuy's Holdings, Inc. * | 6,760 | 201,448 |
| ClubCorp Holdings, Inc. | 21,142 | 284,360 |
| Cracker Barrel Old Country Store, Inc. (b) | 5,146 | 824,338 |
| Darden Restaurants, Inc. | 28,900 | 2,461,991 |
| Dave & Buster's Entertainment, Inc. * | 12,600 | 806,526 |
| Denny's Corp. * | 21,100 | 267,970 |
| DeVry Education Group, Inc. | 9,400 | 355,790 |
| DineEquity, Inc. | 3,000 | 169,620 |
| Domino's Pizza, Inc. | 12,200 | 2,212,958 |
| Dover Motorsports, Inc. | 1,400 | 2,870 |
| Drive Shack, Inc. | 14,153 | 57,744 |
| Dunkin' Brands Group, Inc. | 21,600 | 1,206,576 |
| Eldorado Resorts, Inc. * | 5,800 | 110,925 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Extended Stay America, Inc. | 33,200 | 579,008 |
| Fiesta Restaurant Group, Inc. * | 4,300 | 104,705 |
| Golden Entertainment, Inc. | 3,400 | 47,736 |
| Graham Holdings Co., Class B | 900 | 541,530 |
| Grand Canyon Education, Inc. * | 14,900 | 1,119,884 |
| H&R Block, Inc. | 54,700 | 1,356,013 |
| Hilton Grand Vacations, Inc. * | 12,024 | 402,443 |
| Hilton Worldwide Holdings, Inc. | 46,182 | 2,723,353 |
| Houghton Mifflin Harcourt Co. * | 19,600 | 225,400 |
| Hyatt Hotels Corp., Class A * | 9,600 | 532,800 |
| ILG, Inc. | 25,089 | 604,896 |
| International Speedway Corp., Class A | 6,445 | 239,109 |
| Isle of Capri Casinos, Inc. *(b) | 11,800 | 272,108 |
| J Alexander's Holdings, Inc. * | 2,846 | 31,306 |
| Jack in the Box, Inc. | 7,000 | 713,790 |
| K12, Inc. * | 12,100 | 228,085 |
| La Quinta Holdings, Inc. * | 15,800 | 222,938 |
| Las Vegas Sands Corp. | 86,100 | 5,079,039 |
| Luby's, Inc. * | 6,900 | 20,286 |
| Marriott International, Inc., Class A | 72,592 | 6,854,137 |
| Marriott Vacations Worldwide Corp. | 4,080 | 449,534 |
| McDonald's Corp. | 190,240 | 26,620,283 |
| MGM Resorts International | 106,500 | 3,270,615 |
| Monarch Casino & Resort, Inc. * | 8,000 | 235,760 |
| Norwegian Cruise Line Holdings Ltd. * | 38,400 | 2,070,912 |
| Panera Bread Co., Class A * | 5,600 | 1,751,008 |
| Papa John's International, Inc. | 6,800 | 537,608 |
| Penn National Gaming, Inc. * | 17,000 | 314,160 |
| Pinnacle Entertainment, Inc. * | 9,800 | 201,586 |
| Planet Fitness, Inc., Class A | 24,700 | 513,760 |
| Red Robin Gourmet Burgers, Inc. * | 2,300 | 135,125 |
| Regis Corp. * | 17,300 | 188,743 |
| Royal Caribbean Cruises Ltd. | 38,400 | 4,093,440 |
| Ruby Tuesday, Inc. * | 33,713 | 85,968 |
| Scientific Games Corp., Class A * | 10,900 | 258,875 |
| SeaWorld Entertainment, Inc. | 28,211 | 494,539 |
| Service Corp. International | 44,900 | 1,446,678 |
| ServiceMaster Global Holdings, Inc. * | 30,000 | 1,143,000 |
| Six Flags Entertainment Corp. | 20,000 | 1,252,200 |
| Sonic Corp. | 12,868 | 345,892 |
| Sotheby's * | 11,338 | 536,968 |
| Speedway Motorsports, Inc. | 6,700 | 120,935 |
| Starbucks Corp. | 335,794 | 20,167,788 |
| Strayer Education, Inc. | 4,300 | 372,853 |
| Texas Roadhouse, Inc. | 16,100 | 754,768 |
| The Cheesecake Factory, Inc. | 13,087 | 839,662 |
| The Wendy's Co. | 50,775 | 748,423 |
| Vail Resorts, Inc. | 9,100 | 1,798,706 |
| Weight Watchers International, Inc. * | 6,500 | 135,720 |
| Wyndham Worldwide Corp. | 23,044 | 2,196,324 |
| Wynn Resorts Ltd. | 18,900 | 2,324,889 |
| Yum! Brands, Inc. | 79,700 | 5,240,275 |
| | | 129,426,238 |
| |
| Diversified Financials 4.9% |
| Affiliated Managers Group, Inc. | 14,617 | 2,420,429 |
| AG Mortgage Investment Trust, Inc. | 12,000 | 227,400 |
| AGNC Investment Corp. | 88,000 | 1,854,160 |
| Ally Financial, Inc. | 103,500 | 2,049,300 |
| American Express Co. | 171,903 | 13,623,313 |
| Ameriprise Financial, Inc. | 35,830 | 4,580,865 |
| Annaly Capital Management, Inc. | 247,253 | 2,920,058 |
| Anworth Mortgage Asset Corp. | 24,200 | 141,812 |
| Apollo Commercial Real Estate Finance, Inc. | 16,786 | 323,802 |
| Arlington Asset Investment Corp., Class A (b) | 6,941 | 101,061 |
| Security | Number
of Shares | Value ($) |
| ARMOUR Residential REIT, Inc. | 7,625 | 183,534 |
| Artisan Partners Asset Management, Inc., Class A | 5,500 | 161,150 |
| Associated Capital Group, Inc., Class A | 3,400 | 114,410 |
| Asta Funding, Inc. * | 6,000 | 50,400 |
| Atlanticus Holdings Corp. * | 4,629 | 12,035 |
| Berkshire Hathaway, Inc., Class B * | 444,402 | 73,419,654 |
| BGC Partners, Inc., Class A | 61,300 | 697,594 |
| BlackRock, Inc. | 28,832 | 11,087,922 |
| Blackstone Mortgage Trust, Inc., Class A | 18,102 | 558,990 |
| Capital One Financial Corp. | 109,257 | 8,782,078 |
| Capstead Mortgage Corp. | 21,740 | 242,184 |
| CBOE Holdings, Inc. | 22,896 | 1,886,859 |
| Chimera Investment Corp. | 33,940 | 691,018 |
| CIM Commercial Trust Corp. | 9,700 | 155,685 |
| CME Group, Inc. | 79,450 | 9,231,295 |
| Cohen & Steers, Inc. | 5,400 | 215,460 |
| Cowen Group, Inc., Class A * | 2,972 | 47,255 |
| Credit Acceptance Corp. *(b) | 3,400 | 691,050 |
| CYS Investments, Inc. | 25,500 | 217,515 |
| Discover Financial Services | 88,507 | 5,539,653 |
| Donnelley Financial Solutions, Inc. * | 4,579 | 101,745 |
| Dynex Capital, Inc. | 21,998 | 152,226 |
| E*TRADE Financial Corp. * | 59,698 | 2,062,566 |
| Eaton Vance Corp. | 22,700 | 974,511 |
| Encore Capital Group, Inc. * | 5,600 | 186,760 |
| Enova International, Inc. * | 6,313 | 89,645 |
| Evercore Partners, Inc., Class A | 12,300 | 907,125 |
| EZCORP, Inc., Class A * | 20,600 | 186,430 |
| FactSet Research Systems, Inc. | 9,650 | 1,575,459 |
| Federated Investors, Inc., Class B | 32,450 | 870,309 |
| Financial Engines, Inc. | 21,200 | 901,000 |
| FirstCash, Inc. | 13,896 | 721,897 |
| FNFV Group * | 16,478 | 225,749 |
| Franklin Resources, Inc. | 82,500 | 3,556,575 |
| GAMCO Investors, Inc., Class A | 3,400 | 97,580 |
| Green Dot Corp., Class A * | 12,149 | 416,589 |
| Greenhill & Co., Inc. | 4,500 | 113,850 |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 13,000 | 284,960 |
| Interactive Brokers Group, Inc., Class A | 13,600 | 473,688 |
| Intercontinental Exchange, Inc. | 140,430 | 8,453,886 |
| INTL. FCStone, Inc. * | 4,437 | 165,722 |
| Invesco Ltd. | 88,200 | 2,905,308 |
| Invesco Mortgage Capital, Inc. | 22,300 | 363,713 |
| Investment Technology Group, Inc. | 8,050 | 160,276 |
| Janus Capital Group, Inc. | 26,200 | 357,892 |
| KCG Holdings, Inc., Class A * | 15,533 | 309,107 |
| Lazard Ltd., Class A | 28,600 | 1,228,084 |
| Legg Mason, Inc. | 17,550 | 656,019 |
| LendingClub Corp. * | 93,500 | 546,975 |
| Leucadia National Corp. | 72,450 | 1,839,505 |
| LPL Financial Holdings, Inc. | 22,300 | 937,492 |
| MarketAxess Holdings, Inc. | 8,900 | 1,713,428 |
| MFA Financial, Inc. | 93,700 | 778,647 |
| Moody's Corp. | 37,800 | 4,472,496 |
| Morgan Stanley | 339,725 | 14,733,873 |
| Morningstar, Inc. | 5,500 | 402,215 |
| MSCI, Inc. | 23,000 | 2,307,360 |
| MTGE Investment Corp. | 14,600 | 262,800 |
| Nasdaq, Inc. | 26,100 | 1,797,507 |
| Navient Corp. | 72,000 | 1,094,400 |
| Nelnet, Inc., Class A | 6,400 | 288,064 |
| New Residential Investment Corp. | 71,750 | 1,196,073 |
| New York Mortgage Trust, Inc. | 18,600 | 119,226 |
| NewStar Financial, Inc. | 13,500 | 144,990 |
| Northern Trust Corp. | 50,100 | 4,509,000 |
| OneMain Holdings, Inc. * | 10,500 | 244,860 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| PennyMac Mortgage Investment Trust | 14,400 | 257,472 |
| PICO Holdings, Inc. * | 3,700 | 59,570 |
| Piper Jaffray Cos. | 3,950 | 247,270 |
| PRA Group, Inc. * | 9,800 | 315,560 |
| Raymond James Financial, Inc. | 30,750 | 2,291,490 |
| Redwood Trust, Inc. | 19,700 | 336,279 |
| Resource Capital Corp. | 37,950 | 354,833 |
| S&P Global, Inc. | 58,761 | 7,885,139 |
| Santander Consumer USA Holdings, Inc. * | 43,700 | 556,738 |
| SEI Investments Co. | 31,100 | 1,577,081 |
| SLM Corp. * | 93,396 | 1,171,186 |
| Starwood Property Trust, Inc. | 63,073 | 1,431,126 |
| State Street Corp. | 83,260 | 6,985,514 |
| Stifel Financial Corp. * | 11,785 | 575,933 |
| Synchrony Financial | 177,913 | 4,945,981 |
| T. Rowe Price Group, Inc. | 59,400 | 4,210,866 |
| TD Ameritrade Holding Corp. | 56,600 | 2,166,082 |
| The Bank of New York Mellon Corp. | 240,018 | 11,295,247 |
| The Charles Schwab Corp. (a) | 285,070 | 11,074,969 |
| The Goldman Sachs Group, Inc. | 86,355 | 19,326,249 |
| Two Harbors Investment Corp. | 107,000 | 1,068,930 |
| Virtus Investment Partners, Inc. | 3,475 | 369,740 |
| Voya Financial, Inc. | 45,389 | 1,696,641 |
| Waddell & Reed Financial, Inc., Class A | 14,750 | 265,353 |
| Western Asset Mortgage Capital Corp. | 4,607 | 48,512 |
| Westwood Holdings Group, Inc. | 1,785 | 99,603 |
| WisdomTree Investments, Inc. (b) | 20,500 | 171,175 |
| World Acceptance Corp. * | 3,000 | 158,700 |
| | | 289,058,762 |
| |
| Energy 5.9% |
| Abraxas Petroleum Corp. * | 36,200 | 67,694 |
| Adams Resources & Energy, Inc. | 2,300 | 93,426 |
| Alon USA Energy, Inc. | 8,700 | 105,183 |
| Anadarko Petroleum Corp. | 127,168 | 7,251,119 |
| Antero Resources Corp. * | 32,800 | 695,032 |
| Apache Corp. | 84,372 | 4,103,854 |
| Arch Coal, Inc., Class A * | 5,800 | 407,392 |
| Archrock, Inc. | 10,720 | 126,496 |
| Atwood Oceanics, Inc. * | 9,500 | 74,385 |
| Baker Hughes, Inc. | 97,965 | 5,816,182 |
| Bill Barrett Corp. * | 38,500 | 147,840 |
| Bonanza Creek Energy, Inc. *(b) | 2,127 | 119,836 |
| Bonanza Creek Energy, Inc. - Escrow Shares (e) | 237,300 | — |
| Bristow Group, Inc. | 19,700 | 263,389 |
| Cabot Oil & Gas Corp. | 112,800 | 2,621,472 |
| California Resources Corp. *(b) | 23,232 | 271,814 |
| Callon Petroleum Co. * | 61,700 | 730,528 |
| Carrizo Oil & Gas, Inc. * | 13,100 | 329,465 |
| Centennial Resource Development, Inc., Class A * | 33,700 | 555,713 |
| Cheniere Energy, Inc. * | 56,300 | 2,553,205 |
| Chesapeake Energy Corp. * | 172,130 | 905,404 |
| Chevron Corp. | 441,723 | 47,131,844 |
| Cimarex Energy Co. | 22,562 | 2,632,534 |
| Comstock Resources, Inc. *(b) | 10,160 | 88,798 |
| Concho Resources, Inc. * | 35,431 | 4,487,690 |
| ConocoPhillips | 291,231 | 13,952,877 |
| CONSOL Energy, Inc. * | 44,600 | 677,028 |
| Continental Resources, Inc. * | 23,600 | 1,000,876 |
| Core Laboratories N.V. (b) | 9,800 | 1,086,036 |
| CVR Energy, Inc. | 5,100 | 111,639 |
| Delek US Holdings, Inc. | 10,700 | 257,549 |
| Denbury Resources, Inc. * | 103,025 | 228,716 |
| Devon Energy Corp. | 128,060 | 5,057,089 |
| Diamond Offshore Drilling, Inc. * | 11,400 | 164,388 |
| Security | Number
of Shares | Value ($) |
| Diamondback Energy, Inc. * | 19,721 | 1,968,945 |
| Dril-Quip, Inc. * | 12,700 | 654,685 |
| Energen Corp. * | 22,600 | 1,174,974 |
| Ensco plc, Class A | 81,500 | 643,035 |
| EOG Resources, Inc. | 135,948 | 12,575,190 |
| EQT Corp. | 37,900 | 2,203,506 |
| Era Group, Inc. * | 2,850 | 36,224 |
| Exterran Corp. * | 5,360 | 146,703 |
| Exxon Mobil Corp. | 967,499 | 78,996,293 |
| Fairmount Santrol Holdings, Inc. * | 35,100 | 181,116 |
| Forum Energy Technologies, Inc. * | 11,200 | 189,280 |
| Frank's International N.V. (b) | 14,000 | 127,400 |
| Gastar Exploration, Inc. * | 240,300 | 314,793 |
| Geospace Technologies Corp. * | 1,800 | 29,772 |
| Gevo, Inc. *(b) | 301,600 | 313,664 |
| Green Plains, Inc. | 9,300 | 213,900 |
| Gulf Island Fabrication, Inc. | 4,100 | 40,795 |
| Gulfport Energy Corp. * | 39,003 | 619,368 |
| Halliburton Co. | 205,344 | 9,421,183 |
| Helix Energy Solutions Group, Inc. * | 39,464 | 241,520 |
| Helmerich & Payne, Inc. | 23,717 | 1,438,199 |
| Hess Corp. | 59,400 | 2,900,502 |
| HollyFrontier Corp. | 38,654 | 1,087,724 |
| Kinder Morgan, Inc. | 434,178 | 8,957,092 |
| Kosmos Energy Ltd. * | 75,600 | 454,356 |
| Laredo Petroleum, Inc. * | 40,100 | 515,686 |
| Marathon Oil Corp. | 198,714 | 2,954,877 |
| Marathon Petroleum Corp. | 123,408 | 6,286,404 |
| Matador Resources Co. * | 12,100 | 262,328 |
| Matrix Service Co. * | 8,000 | 94,000 |
| McDermott International, Inc. * | 39,100 | 255,714 |
| Murphy Oil Corp. | 38,000 | 994,840 |
| Nabors Industries Ltd. | 70,734 | 731,390 |
| National Oilwell Varco, Inc. | 88,022 | 3,078,129 |
| Natural Gas Services Group, Inc. * | 7,500 | 205,500 |
| Newfield Exploration Co. * | 45,100 | 1,561,362 |
| Newpark Resources, Inc. * | 11,500 | 87,975 |
| Noble Corp. plc | 54,955 | 263,784 |
| Noble Energy, Inc. | 109,448 | 3,538,438 |
| Oasis Petroleum, Inc. * | 51,700 | 617,298 |
| Occidental Petroleum Corp. | 178,253 | 10,969,690 |
| Oceaneering International, Inc. | 23,100 | 609,609 |
| Oil States International, Inc. * | 8,600 | 255,850 |
| ONEOK, Inc. | 52,129 | 2,742,507 |
| Pacific Ethanol, Inc. * | 10,200 | 69,360 |
| Panhandle Oil & Gas, Inc., Class A | 6,200 | 117,490 |
| Parker Drilling Co. * | 60,300 | 99,495 |
| Parsley Energy, Inc., Class A * | 47,100 | 1,403,109 |
| Patterson-UTI Energy, Inc. | 38,800 | 839,826 |
| PBF Energy, Inc., Class A | 21,913 | 489,098 |
| PDC Energy, Inc. * | 13,100 | 723,513 |
| PHI, Inc. - Non Voting Shares * | 4,000 | 46,920 |
| Phillips 66 | 104,165 | 8,287,367 |
| Pioneer Energy Services Corp. * | 13,100 | 39,955 |
| Pioneer Natural Resources Co. | 39,033 | 6,752,319 |
| QEP Resources, Inc. * | 49,600 | 585,776 |
| Range Resources Corp. | 46,305 | 1,226,619 |
| Resolute Energy Corp. * | 9,680 | 362,516 |
| REX American Resources Corp. * | 4,875 | 461,565 |
| Rice Energy, Inc. * | 43,736 | 931,139 |
| RigNet, Inc. * | 4,141 | 81,164 |
| Ring Energy, Inc. * | 22,800 | 273,600 |
| Rowan Cos. plc, Class A * | 40,600 | 571,242 |
| RPC, Inc. (b) | 16,118 | 292,864 |
| RSP Permian, Inc. * | 26,400 | 1,004,520 |
| Sanchez Energy Corp. * | 8,700 | 67,338 |
| Schlumberger Ltd. | 325,003 | 23,591,968 |
| SEACOR Holdings, Inc. * | 4,850 | 318,451 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| SemGroup Corp., Class A | 7,000 | 233,100 |
| SM Energy Co. | 22,500 | 508,275 |
| Southwestern Energy Co. * | 114,975 | 863,462 |
| SRC Energy, Inc. * | 63,800 | 481,052 |
| Superior Energy Services, Inc. * | 26,099 | 315,276 |
| Synthesis Energy Systems, Inc. * | 334,602 | 274,307 |
| Targa Resources Corp. | 44,900 | 2,475,337 |
| TechnipFMC plc * | 110,564 | 3,331,293 |
| Tellurian, Inc. *(b) | 23,000 | 230,690 |
| Tesco Corp. * | 7,000 | 45,850 |
| Tesoro Corp. | 28,900 | 2,303,619 |
| TETRA Technologies, Inc. * | 12,100 | 40,293 |
| The Williams Cos., Inc. | 192,883 | 5,908,006 |
| Transocean Ltd. * | 85,400 | 941,962 |
| Unit Corp. * | 19,300 | 414,757 |
| Uranium Energy Corp. *(b) | 226,400 | 280,736 |
| US Silica Holdings, Inc. | 15,500 | 643,250 |
| Valero Energy Corp. | 105,580 | 6,821,524 |
| Weatherford International plc * | 241,449 | 1,393,161 |
| Western Refining, Inc. | 19,153 | 660,587 |
| Westmoreland Coal Co. * | 9,600 | 102,336 |
| Whiting Petroleum Corp. * | 62,070 | 515,181 |
| World Fuel Services Corp. | 17,400 | 640,842 |
| WPX Energy, Inc. * | 83,753 | 999,173 |
| | | 344,133,376 |
| |
| Food & Staples Retailing 1.8% |
| Casey's General Stores, Inc. | 8,544 | 957,526 |
| Costco Wholesale Corp. | 102,485 | 18,193,137 |
| CVS Health Corp. | 239,537 | 19,747,430 |
| Ingles Markets, Inc., Class A | 4,200 | 196,140 |
| Performance Food Group Co. * | 10,000 | 249,000 |
| PriceSmart, Inc. | 7,100 | 617,345 |
| Rite Aid Corp. * | 261,480 | 1,045,920 |
| SpartanNash, Co. | 12,540 | 461,472 |
| Sprouts Farmers Market, Inc. * | 35,374 | 789,194 |
| SUPERVALU, Inc. * | 14,532 | 59,581 |
| Sysco Corp. | 113,036 | 5,976,213 |
| The Andersons, Inc. | 3,600 | 134,460 |
| The Kroger Co. | 221,532 | 6,568,424 |
| U.S. Foods Holding Corp. * | 20,100 | 566,820 |
| United Natural Foods, Inc. * | 15,300 | 635,409 |
| Wal-Mart Stores, Inc. | 354,189 | 26,627,929 |
| Walgreens Boots Alliance, Inc. | 199,422 | 17,257,980 |
| Weis Markets, Inc. | 6,900 | 398,889 |
| Whole Foods Market, Inc. | 70,777 | 2,574,160 |
| | | 103,057,029 |
| |
| Food, Beverage & Tobacco 4.8% |
| Alico, Inc. | 2,000 | 59,900 |
| Alliance One International, Inc. * | 2,460 | 33,825 |
| Altria Group, Inc. | 449,423 | 32,259,583 |
| Archer-Daniels-Midland Co. | 126,958 | 5,808,329 |
| B&G Foods, Inc. | 15,000 | 630,000 |
| Blue Buffalo Pet Products, Inc. * | 24,900 | 613,785 |
| Brown-Forman Corp., Class A | 10,000 | 480,600 |
| Brown-Forman Corp., Class B | 44,232 | 2,093,058 |
| Bunge Ltd. | 32,100 | 2,536,863 |
| Cal-Maine Foods, Inc. (b) | 5,200 | 196,300 |
| Calavo Growers, Inc. | 4,846 | 317,898 |
| Campbell Soup Co. | 40,100 | 2,307,354 |
| Coca-Cola Bottling Co. Consolidated | 1,248 | 264,401 |
| ConAgra Brands, Inc. | 98,193 | 3,807,925 |
| Constellation Brands, Inc., Class A | 40,769 | 7,034,283 |
| Darling Ingredients, Inc. * | 56,100 | 848,793 |
| Dean Foods Co. | 26,756 | 528,163 |
| Security | Number
of Shares | Value ($) |
| Dr Pepper Snapple Group, Inc. | 42,800 | 3,922,620 |
| Farmer Brothers Co. * | 4,500 | 159,750 |
| Flowers Foods, Inc. | 44,605 | 874,704 |
| Fresh Del Monte Produce, Inc. | 7,900 | 484,270 |
| General Mills, Inc. | 133,638 | 7,685,521 |
| Hormel Foods Corp. | 62,400 | 2,188,992 |
| Ingredion, Inc. | 18,200 | 2,253,524 |
| J&J Snack Foods Corp. | 3,259 | 438,596 |
| John B. Sanfilippo & Son, Inc. | 5,000 | 367,500 |
| Kellogg Co. | 57,300 | 4,068,300 |
| Lamb Weston Holdings, Inc. | 38,264 | 1,597,522 |
| Lancaster Colony Corp. | 5,200 | 654,680 |
| Landec Corp. * | 9,100 | 125,125 |
| Limoneira Co. | 2,900 | 59,972 |
| McCormick & Co., Inc. - Non Voting Shares | 28,200 | 2,817,180 |
| Mead Johnson Nutrition Co. | 43,200 | 3,832,704 |
| MGP Ingredients, Inc. | 5,500 | 287,980 |
| Molson Coors Brewing Co., Class B | 42,600 | 4,084,914 |
| Mondelez International, Inc., Class A | 354,424 | 15,959,713 |
| Monster Beverage Corp. * | 95,367 | 4,327,754 |
| National Beverage Corp. | 6,400 | 566,976 |
| PepsiCo, Inc. | 332,458 | 37,660,842 |
| Philip Morris International, Inc. | 364,009 | 40,346,758 |
| Pilgrim's Pride Corp. | 12,466 | 323,617 |
| Pinnacle Foods, Inc. | 30,300 | 1,761,945 |
| Post Holdings, Inc. * | 15,350 | 1,292,317 |
| Primo Water Corp. * | 1,000 | 11,970 |
| Reynolds American, Inc. | 190,706 | 12,300,537 |
| Rocky Mountain Chocolate Factory, Inc. | 3,427 | 44,482 |
| Sanderson Farms, Inc. | 5,850 | 677,313 |
| Seaboard Corp. | 100 | 423,401 |
| Snyder's-Lance, Inc. | 23,930 | 843,772 |
| The Boston Beer Co., Inc., Class A * | 2,100 | 303,135 |
| The Coca-Cola Co. | 895,914 | 38,658,689 |
| The Hain Celestial Group, Inc. * | 27,012 | 999,174 |
| The Hershey Co. | 31,300 | 3,386,660 |
| The JM Smucker Co. | 25,391 | 3,217,548 |
| The Kraft Heinz Co. | 139,204 | 12,582,650 |
| Tootsie Roll Industries, Inc. (b) | 8,294 | 309,764 |
| TreeHouse Foods, Inc. * | 12,522 | 1,096,927 |
| Tyson Foods, Inc., Class A | 69,284 | 4,452,190 |
| Universal Corp. | 4,800 | 352,560 |
| Vector Group Ltd. | 29,262 | 635,571 |
| | | 278,261,179 |
| |
| Health Care Equipment & Services 5.3% |
| Abaxis, Inc. | 5,600 | 252,168 |
| Abbott Laboratories | 398,112 | 17,373,608 |
| ABIOMED, Inc. * | 10,200 | 1,329,264 |
| Acadia Healthcare Co., Inc. * | 19,600 | 854,168 |
| Accuray, Inc. * | 21,200 | 96,460 |
| Aceto Corp. | 7,900 | 125,215 |
| Aetna, Inc. | 77,285 | 10,438,885 |
| Alere, Inc. * | 18,541 | 911,661 |
| Align Technology, Inc. * | 18,800 | 2,530,856 |
| Allscripts Healthcare Solutions, Inc. * | 54,860 | 656,674 |
| Amedisys, Inc. * | 10,834 | 587,203 |
| AmerisourceBergen Corp. | 39,596 | 3,248,852 |
| AMN Healthcare Services, Inc. * | 11,210 | 457,928 |
| Analogic Corp. | 6,000 | 431,100 |
| Anika Therapeutics, Inc. * | 4,606 | 212,475 |
| Antares Pharma, Inc. * | 28,100 | 87,672 |
| Anthem, Inc. | 61,923 | 11,015,482 |
| athenahealth, Inc. * | 7,800 | 764,478 |
| AtriCure, Inc. * | 13,800 | 282,900 |
| Atrion Corp. | 616 | 318,534 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Baxter International, Inc. | 113,006 | 6,292,174 |
| Becton, Dickinson & Co. | 48,608 | 9,088,238 |
| BioScrip, Inc. * | 88,272 | 134,173 |
| Boston Scientific Corp. * | 307,167 | 8,103,065 |
| Brookdale Senior Living, Inc. * | 51,725 | 671,908 |
| C.R. Bard, Inc. | 17,160 | 5,276,357 |
| Cantel Medical Corp. | 8,034 | 597,810 |
| Capital Senior Living Corp. * | 8,394 | 117,264 |
| Cardinal Health, Inc. | 74,518 | 5,409,262 |
| Cardiovascular Systems, Inc. * | 5,000 | 149,350 |
| Centene Corp. * | 42,541 | 3,165,050 |
| Cerner Corp. * | 67,900 | 4,396,525 |
| Chemed Corp. | 3,900 | 785,382 |
| Cigna Corp. | 60,251 | 9,421,449 |
| Community Health Systems, Inc. * | 23,796 | 204,884 |
| Computer Programs & Systems, Inc. (b) | 3,600 | 98,820 |
| ConforMIS, Inc. * | 55,500 | 311,910 |
| CONMED Corp. | 7,300 | 358,868 |
| Corindus Vascular Robotics, Inc. *(b) | 201,900 | 254,394 |
| CorVel Corp. * | 2,700 | 120,150 |
| Cross Country Healthcare, Inc. * | 12,500 | 174,625 |
| CryoLife, Inc. * | 9,050 | 164,258 |
| Danaher Corp. | 142,019 | 11,834,443 |
| DaVita, Inc. * | 34,300 | 2,367,043 |
| DENTSPLY SIRONA, Inc. | 53,888 | 3,407,877 |
| DexCom, Inc. * | 20,500 | 1,598,180 |
| Diplomat Pharmacy, Inc. * | 9,000 | 140,400 |
| Edwards Lifesciences Corp. * | 49,000 | 5,373,830 |
| Endologix, Inc. * | 13,700 | 102,613 |
| Envision Healthcare Corp. * | 27,392 | 1,534,774 |
| Express Scripts Holding Co. * | 140,852 | 8,639,862 |
| Five Star Senior Living, Inc. * | 14,335 | 27,237 |
| GenMark Diagnostics, Inc. * | 23,500 | 301,270 |
| Glaukos Corp. * | 3,000 | 142,590 |
| Globus Medical, Inc., Class A * | 13,900 | 421,587 |
| Haemonetics Corp. * | 16,300 | 682,644 |
| Halyard Health, Inc. * | 8,217 | 324,571 |
| HCA Holdings, Inc. * | 67,700 | 5,701,017 |
| HealthEquity, Inc. * | 8,000 | 364,160 |
| HealthSouth Corp. | 20,600 | 966,140 |
| HealthStream, Inc. * | 6,800 | 188,972 |
| Henry Schein, Inc. * | 19,453 | 3,380,931 |
| Hill-Rom Holdings, Inc. | 15,200 | 1,149,728 |
| HMS Holdings Corp. * | 31,500 | 644,805 |
| Hologic, Inc. * | 65,812 | 2,971,412 |
| Humana, Inc. | 34,500 | 7,658,310 |
| ICU Medical, Inc. * | 3,350 | 515,230 |
| IDEXX Laboratories, Inc. * | 20,500 | 3,438,465 |
| Inogen, Inc. * | 5,600 | 464,184 |
| Inovalon Holdings, Inc., Class A * | 26,000 | 318,500 |
| Insulet Corp. * | 16,000 | 694,560 |
| Integer Holdings Corp. * | 6,700 | 246,225 |
| Integra LifeSciences Holdings Corp. * | 17,400 | 799,878 |
| Intuitive Surgical, Inc. * | 8,650 | 7,230,275 |
| Invacare Corp. | 6,000 | 88,200 |
| K2M Group Holdings, Inc. * | 12,900 | 285,735 |
| Kindred Healthcare, Inc. | 11,559 | 110,966 |
| Laboratory Corp. of America Holdings * | 24,562 | 3,442,364 |
| Landauer, Inc. | 2,100 | 110,460 |
| LeMaitre Vascular, Inc. | 6,800 | 202,300 |
| LifePoint Health, Inc. * | 9,607 | 597,075 |
| LivaNova plc * | 10,400 | 548,080 |
| Magellan Health, Inc. * | 7,607 | 523,362 |
| Masimo Corp. * | 8,500 | 873,290 |
| McKesson Corp. | 49,303 | 6,818,112 |
| Medidata Solutions, Inc. * | 16,500 | 1,079,595 |
| MEDNAX, Inc. * | 24,300 | 1,466,748 |
| Medtronic plc | 317,588 | 26,388,387 |
| Security | Number
of Shares | Value ($) |
| Meridian Bioscience, Inc. | 10,050 | 148,740 |
| Merit Medical Systems, Inc. * | 10,277 | 346,335 |
| Molina Healthcare, Inc. * | 11,250 | 560,137 |
| National HealthCare Corp. | 4,100 | 305,122 |
| Natus Medical, Inc. * | 7,600 | 266,000 |
| Neogen Corp * | 10,257 | 639,319 |
| Nevro Corp. * | 6,000 | 565,320 |
| NuVasive, Inc. * | 10,000 | 725,100 |
| Nuvectra Corp. * | 2,233 | 18,266 |
| NxStage Medical, Inc. * | 18,700 | 558,943 |
| Omnicell, Inc. * | 7,400 | 306,360 |
| OraSure Technologies, Inc. * | 16,500 | 216,315 |
| Orthofix International N.V. * | 2,800 | 110,740 |
| Owens & Minor, Inc. | 16,200 | 561,330 |
| Patterson Cos., Inc. | 18,800 | 836,412 |
| Penumbra, Inc. * | 8,300 | 709,235 |
| PharMerica Corp. * | 4,813 | 113,587 |
| Premier, Inc., Class A * | 15,900 | 537,420 |
| Quality Systems, Inc. * | 10,500 | 149,730 |
| Quest Diagnostics, Inc. | 31,720 | 3,346,777 |
| Quidel Corp. * | 5,200 | 125,684 |
| Quorum Health Corp. * | 5,949 | 25,402 |
| ResMed, Inc. | 32,300 | 2,196,077 |
| RTI Surgical, Inc. * | 18,100 | 73,305 |
| SeaSpine Holdings Corp. * | 1,766 | 14,146 |
| Select Medical Holdings Corp. * | 22,600 | 310,750 |
| STERIS plc | 19,400 | 1,431,720 |
| Stryker Corp. | 72,200 | 9,845,914 |
| Surmodics, Inc. * | 4,200 | 95,970 |
| Teladoc, Inc. *(b) | 14,900 | 369,520 |
| Teleflex, Inc. | 9,600 | 1,986,144 |
| Tenet Healthcare Corp. * | 15,812 | 247,774 |
| The Cooper Cos., Inc. | 11,681 | 2,340,055 |
| The Ensign Group, Inc. | 10,600 | 190,270 |
| The Providence Service Corp. * | 4,800 | 211,200 |
| The Spectranetics Corp. * | 6,700 | 191,620 |
| Tivity Health, Inc. * | 8,100 | 272,160 |
| Triple-S Management Corp., Class B * | 5,300 | 95,930 |
| U.S. Physical Therapy, Inc. | 3,500 | 229,600 |
| UnitedHealth Group, Inc. | 224,995 | 39,347,126 |
| Universal Health Services, Inc., Class B | 21,600 | 2,608,416 |
| Utah Medical Products, Inc. | 2,500 | 156,500 |
| Varex Imaging Corp. * | 8,440 | 283,246 |
| Varian Medical Systems, Inc. * | 21,100 | 1,914,614 |
| VCA, Inc. * | 19,900 | 1,822,243 |
| Veeva Systems, Inc., Class A * | 23,700 | 1,270,794 |
| Vocera Communications, Inc. * | 3,700 | 93,832 |
| WellCare Health Plans, Inc. * | 9,659 | 1,481,787 |
| West Pharmaceutical Services, Inc. | 15,800 | 1,454,074 |
| Wright Medical Group N.V. * | 25,565 | 776,920 |
| Zimmer Biomet Holdings, Inc. | 46,400 | 5,551,760 |
| | | 311,473,627 |
| |
| Household & Personal Products 1.7% |
| Avon Products, Inc. * | 89,600 | 434,560 |
| Central Garden & Pet Co., Class A * | 8,600 | 302,978 |
| Church & Dwight Co., Inc. | 64,400 | 3,189,732 |
| Colgate-Palmolive Co. | 204,609 | 14,740,032 |
| Coty, Inc., Class A | 115,600 | 2,063,460 |
| Edgewell Personal Care Co. * | 15,533 | 1,110,454 |
| Energizer Holdings, Inc. | 15,933 | 943,712 |
| Herbalife Ltd. *(b) | 16,700 | 1,056,442 |
| HRG Group, Inc. * | 34,400 | 688,344 |
| Inter Parfums, Inc. | 5,613 | 213,013 |
| Kimberly-Clark Corp. | 81,739 | 10,605,635 |
| Medifast, Inc. | 3,500 | 162,120 |
| Nu Skin Enterprises, Inc. | 9,600 | 530,208 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Nutraceutical International Corp. | 5,000 | 158,500 |
| Oil-Dri Corp. of America | 1,600 | 65,104 |
| Orchids Paper Products Co. (b) | 2,500 | 60,875 |
| Revlon, Inc., Class A * | 5,400 | 140,130 |
| Spectrum Brands Holdings, Inc. | 6,500 | 934,245 |
| The Clorox Co. | 28,700 | 3,836,903 |
| The Estee Lauder Cos., Inc., Class A | 49,100 | 4,278,574 |
| The Procter & Gamble Co. | 597,824 | 52,207,970 |
| USANA Health Sciences, Inc. * | 5,364 | 304,944 |
| WD-40 Co. | 4,600 | 482,310 |
| | | 98,510,245 |
| |
| Insurance 2.9% |
| Aflac, Inc. | 93,894 | 7,030,783 |
| Alleghany Corp. * | 3,440 | 2,100,808 |
| Allied World Assurance Co. Holdings AG | 20,400 | 1,083,036 |
| Ambac Financial Group, Inc. * | 13,400 | 260,362 |
| American Equity Investment Life Holding Co. | 23,100 | 547,932 |
| American Financial Group, Inc. | 18,750 | 1,824,563 |
| American International Group, Inc. | 217,815 | 13,267,112 |
| American National Insurance Co. | 2,300 | 268,916 |
| AMERISAFE, Inc. | 4,000 | 230,200 |
| AmTrust Financial Services, Inc. | 25,628 | 411,329 |
| Aon plc | 61,496 | 7,369,681 |
| Arch Capital Group Ltd. * | 30,000 | 2,909,100 |
| Argo Group International Holdings Ltd. | 6,063 | 399,855 |
| Arthur J. Gallagher & Co. | 40,600 | 2,265,886 |
| Aspen Insurance Holdings Ltd. | 15,200 | 795,720 |
| Assurant, Inc. | 14,800 | 1,424,352 |
| Assured Guaranty Ltd. | 31,900 | 1,216,347 |
| Athene Holding Ltd., Class A * | 10,100 | 538,431 |
| Axis Capital Holdings Ltd. | 21,600 | 1,423,440 |
| Baldwin & Lyons, Inc., Class B | 1,950 | 47,775 |
| Brown & Brown, Inc. | 31,900 | 1,368,510 |
| Chubb Ltd. | 109,668 | 15,051,933 |
| Cincinnati Financial Corp. | 35,450 | 2,555,591 |
| Citizens, Inc. *(b) | 16,000 | 112,800 |
| CNA Financial Corp. | 6,900 | 312,294 |
| CNO Financial Group, Inc. | 39,000 | 821,730 |
| Crawford & Co., Class B | 5,800 | 63,278 |
| EMC Insurance Group, Inc. | 1,800 | 51,624 |
| Employers Holdings, Inc. | 7,500 | 300,000 |
| Enstar Group Ltd. * | 3,300 | 642,840 |
| Erie Indemnity Co., Class A | 6,300 | 780,066 |
| Everest Re Group Ltd. | 9,900 | 2,491,929 |
| FBL Financial Group, Inc., Class A | 5,190 | 345,135 |
| Federated National Holding Co. | 1,500 | 24,120 |
| First American Financial Corp. | 28,600 | 1,241,526 |
| FNF Group | 63,239 | 2,589,637 |
| Genworth Financial, Inc., Class A * | 117,800 | 475,912 |
| Greenlight Capital Re Ltd., Class A * | 7,400 | 159,470 |
| Horace Mann Educators Corp. | 8,300 | 320,795 |
| Independence Holding Co. | 2,970 | 56,282 |
| Infinity Property & Casualty Corp. | 2,500 | 248,125 |
| Kemper Corp. | 7,700 | 302,995 |
| Lincoln National Corp. | 51,626 | 3,403,702 |
| Loews Corp. | 60,174 | 2,805,312 |
| Maiden Holdings Ltd. | 18,900 | 233,415 |
| Markel Corp. * | 3,203 | 3,105,629 |
| Marsh & McLennan Cos., Inc. | 119,600 | 8,865,948 |
| MBIA, Inc. * | 25,250 | 212,100 |
| Mercury General Corp. | 11,600 | 713,284 |
| MetLife, Inc. | 254,703 | 13,196,162 |
| National General Holdings Corp. | 10,400 | 236,496 |
| National Western Life Group, Inc., Class A | 500 | 153,120 |
| Old Republic International Corp. | 57,622 | 1,191,623 |
| Security | Number
of Shares | Value ($) |
| OneBeacon Insurance Group Ltd., Class A | 14,800 | 236,060 |
| Primerica, Inc. | 10,700 | 896,660 |
| Principal Financial Group, Inc. | 61,041 | 3,975,600 |
| ProAssurance Corp. | 12,940 | 800,986 |
| Prudential Financial, Inc. | 100,972 | 10,807,033 |
| Reinsurance Group of America, Inc. | 12,900 | 1,613,016 |
| RenaissanceRe Holdings Ltd. | 10,432 | 1,483,117 |
| RLI Corp. | 9,200 | 526,424 |
| Safety Insurance Group, Inc. | 3,400 | 246,160 |
| Selective Insurance Group, Inc. | 19,300 | 1,019,040 |
| State Auto Financial Corp. | 5,500 | 147,785 |
| Stewart Information Services Corp. | 3,600 | 170,784 |
| The Allstate Corp. | 84,967 | 6,906,967 |
| The Hanover Insurance Group, Inc. | 9,400 | 829,738 |
| The Hartford Financial Services Group, Inc. | 83,262 | 4,026,550 |
| The Navigators Group, Inc. | 8,400 | 454,020 |
| The Progressive Corp. | 132,964 | 5,281,330 |
| The Travelers Cos., Inc. | 65,752 | 7,999,388 |
| Third Point Reinsurance Ltd. * | 20,100 | 243,210 |
| Torchmark Corp. | 22,200 | 1,702,962 |
| United Fire Group, Inc. | 5,000 | 220,000 |
| Universal Insurance Holdings, Inc. | 8,700 | 226,635 |
| Unum Group | 52,114 | 2,414,442 |
| Validus Holdings Ltd. | 16,857 | 931,855 |
| W. R. Berkley Corp. | 23,850 | 1,621,323 |
| White Mountains Insurance Group Ltd. | 1,300 | 1,116,622 |
| Willis Towers Watson plc | 28,624 | 3,796,115 |
| WMIH Corp. * | 165,100 | 247,650 |
| XL Group Ltd. | 57,900 | 2,423,115 |
| | | 172,213,598 |
| |
| Materials 3.3% |
| A. Schulman, Inc. | 5,300 | 167,745 |
| AdvanSix, Inc. * | 6,431 | 175,309 |
| Air Products & Chemicals, Inc. | 49,400 | 6,940,700 |
| AK Steel Holding Corp. * | 76,627 | 485,815 |
| Albemarle Corp. | 26,503 | 2,886,442 |
| Alcoa Corp. | 41,199 | 1,389,642 |
| Allegheny Technologies, Inc. | 20,092 | 368,688 |
| American Vanguard Corp. | 3,000 | 50,250 |
| Ampco-Pittsburgh Corp. | 4,500 | 65,475 |
| AptarGroup, Inc. | 13,800 | 1,108,140 |
| Ashland Global Holdings, Inc. | 16,523 | 2,040,590 |
| Avery Dennison Corp. | 20,000 | 1,664,200 |
| Axalta Coating Systems Ltd. * | 58,900 | 1,847,693 |
| Balchem Corp. | 9,800 | 795,368 |
| Ball Corp. | 40,000 | 3,075,600 |
| Bemis Co., Inc. | 21,600 | 970,488 |
| Berry Global Group, Inc. * | 24,600 | 1,230,000 |
| Boise Cascade Co. * | 5,500 | 167,750 |
| Cabot Corp. | 16,400 | 987,116 |
| Calgon Carbon Corp. | 12,500 | 181,875 |
| Carpenter Technology Corp. | 8,300 | 336,980 |
| Celanese Corp., Series A | 30,700 | 2,672,128 |
| Century Aluminum Co. * | 11,600 | 158,224 |
| CF Industries Holdings, Inc. | 58,500 | 1,564,290 |
| Chase Corp. | 5,200 | 533,000 |
| Clearwater Paper Corp. * | 5,472 | 265,939 |
| Cliffs Natural Resources, Inc. * | 65,500 | 440,160 |
| Codexis, Inc. * | 1,870 | 8,228 |
| Coeur Mining, Inc. * | 46,100 | 417,666 |
| Commercial Metals Co. | 22,800 | 424,992 |
| Compass Minerals International, Inc. | 7,300 | 481,800 |
| Crown Holdings, Inc. * | 33,100 | 1,856,579 |
| Deltic Timber Corp. | 1,500 | 116,055 |
| Domtar Corp. | 16,900 | 670,085 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| E.I. du Pont de Nemours & Co. | 201,907 | 16,102,083 |
| Eagle Materials, Inc. | 11,543 | 1,107,782 |
| Eastman Chemical Co. | 35,480 | 2,829,530 |
| Ecolab, Inc. | 60,404 | 7,797,552 |
| Ferro Corp. * | 21,000 | 376,320 |
| Flotek Industries, Inc. *(b) | 13,300 | 159,733 |
| FMC Corp. | 32,000 | 2,343,360 |
| Freeport-McMoRan, Inc. * | 295,518 | 3,767,854 |
| FutureFuel Corp. | 8,300 | 128,318 |
| GCP Applied Technologies, Inc. * | 13,600 | 447,440 |
| Graphic Packaging Holding Co. | 74,400 | 1,010,352 |
| Greif, Inc., Class A | 11,300 | 662,406 |
| H.B. Fuller Co. | 9,000 | 475,470 |
| Hawkins, Inc. | 2,700 | 137,970 |
| Haynes International, Inc. | 2,500 | 105,725 |
| Headwaters, Inc. * | 12,000 | 285,120 |
| Hecla Mining Co. | 114,500 | 624,025 |
| Huntsman Corp. | 52,800 | 1,307,856 |
| Ingevity Corp. * | 8,661 | 547,635 |
| Innophos Holdings, Inc. | 5,300 | 254,082 |
| Innospec, Inc. | 4,200 | 277,200 |
| International Flavors & Fragrances, Inc. | 18,100 | 2,508,479 |
| International Paper Co. | 97,573 | 5,266,015 |
| Kaiser Aluminum Corp. | 3,600 | 303,876 |
| KapStone Paper & Packaging Corp. | 15,800 | 333,222 |
| KMG Chemicals, Inc. | 1,600 | 84,080 |
| Koppers Holdings, Inc. * | 4,800 | 203,760 |
| Kraton Corp. * | 11,900 | 389,249 |
| Kronos Worldwide, Inc. | 11,720 | 205,334 |
| Louisiana-Pacific Corp. * | 32,900 | 846,846 |
| LyondellBasell Industries N.V., Class A | 77,832 | 6,597,040 |
| Martin Marietta Materials, Inc. | 14,000 | 3,082,660 |
| Materion Corp. | 4,000 | 152,200 |
| McEwen Mining, Inc. | 31,130 | 94,635 |
| Minerals Technologies, Inc. | 6,200 | 487,940 |
| Monsanto Co. | 101,126 | 11,792,303 |
| Myers Industries, Inc. | 8,080 | 131,704 |
| Neenah Paper, Inc. | 4,231 | 331,499 |
| NewMarket Corp. | 1,900 | 894,330 |
| Newmont Mining Corp. | 118,874 | 4,019,130 |
| Northern Technologies International Corp. * | 14,276 | 221,992 |
| Nucor Corp. | 71,200 | 4,366,696 |
| Olin Corp. | 41,920 | 1,346,890 |
| Olympic Steel, Inc. | 1,400 | 31,570 |
| OMNOVA Solutions, Inc. * | 10,400 | 98,800 |
| Owens-Illinois, Inc. * | 33,600 | 733,152 |
| P.H. Glatfelter Co. | 7,000 | 150,570 |
| Packaging Corp. of America | 20,100 | 1,985,478 |
| Platform Specialty Products Corp. * | 54,000 | 765,180 |
| PolyOne Corp. | 24,210 | 949,274 |
| PPG Industries, Inc. | 60,300 | 6,623,352 |
| Praxair, Inc. | 63,800 | 7,973,724 |
| Quaker Chemical Corp. | 3,200 | 462,720 |
| Rayonier Advanced Materials, Inc. | 6,960 | 92,220 |
| Reliance Steel & Aluminum Co. | 16,700 | 1,316,294 |
| Resolute Forest Products, Inc. * | 28,000 | 175,000 |
| Royal Gold, Inc. | 16,100 | 1,137,948 |
| RPM International, Inc. | 29,700 | 1,561,032 |
| Schnitzer Steel Industries, Inc., Class A | 3,450 | 65,205 |
| Schweitzer-Mauduit International, Inc. | 10,500 | 452,025 |
| Sealed Air Corp. | 43,300 | 1,906,066 |
| Sensient Technologies Corp. | 13,700 | 1,120,660 |
| Silgan Holdings, Inc. | 6,900 | 418,278 |
| Sonoco Products Co. | 22,600 | 1,182,206 |
| Steel Dynamics, Inc. | 64,100 | 2,316,574 |
| Stepan Co. | 7,500 | 636,000 |
| Summit Materials, Inc., Class A * | 24,591 | 631,005 |
| Security | Number
of Shares | Value ($) |
| SunCoke Energy, Inc. * | 15,217 | 139,540 |
| TerraVia Holdings, Inc. * | 359,100 | 169,352 |
| The Chemours Co. | 45,361 | 1,827,595 |
| The Dow Chemical Co. | 261,751 | 16,437,963 |
| The Mosaic Co. | 82,612 | 2,224,741 |
| The Scotts Miracle-Gro Co. | 12,500 | 1,207,500 |
| The Sherwin-Williams Co. | 18,601 | 6,225,383 |
| The Valspar Corp. | 18,000 | 2,023,920 |
| TimkenSteel Corp. * | 6,550 | 98,774 |
| Tredegar Corp. | 5,100 | 87,465 |
| Trinseo S.A. | 12,500 | 830,000 |
| Tronox Ltd., Class A | 27,600 | 455,676 |
| United States Steel Corp. | 46,000 | 1,026,720 |
| Universal Stainless & Alloy Products, Inc. * | 1,800 | 32,490 |
| Valhi, Inc. | 13,600 | 45,152 |
| Vulcan Materials Co. | 31,092 | 3,758,401 |
| W.R. Grace & Co. | 17,400 | 1,213,128 |
| Westlake Chemical Corp. | 7,500 | 466,875 |
| WestRock Co. | 60,669 | 3,249,432 |
| Worthington Industries, Inc. | 11,800 | 513,300 |
| | | 195,770,445 |
| |
| Media 3.1% |
| A. H. Belo Corp., Class A | 13,980 | 87,375 |
| AMC Entertainment Holdings, Inc., Class A | 21,900 | 663,570 |
| AMC Networks, Inc., Class A * | 15,100 | 901,168 |
| Cable One, Inc. | 900 | 613,674 |
| CBS Corp., Class B - Non Voting Shares | 91,190 | 6,069,606 |
| Central European Media Enterprises Ltd., Class A * | 9,900 | 40,590 |
| Charter Communications, Inc., Class A * | 50,372 | 17,386,400 |
| Cinemark Holdings, Inc. | 25,600 | 1,105,920 |
| Comcast Corp., Class A | 1,105,020 | 43,305,734 |
| Discovery Communications, Inc., Class A * | 26,061 | 750,036 |
| Discovery Communications, Inc., Class C * | 57,261 | 1,602,163 |
| DISH Network Corp., Class A * | 51,600 | 3,325,104 |
| Entercom Communications Corp., Class A | 11,000 | 139,150 |
| Gannett Co., Inc. | 19,500 | 163,020 |
| Global Eagle Entertainment, Inc. * | 17,114 | 53,053 |
| Gray Television, Inc. * | 25,500 | 373,575 |
| John Wiley & Sons, Inc., Class A | 9,000 | 474,300 |
| Liberty Broadband Corp., Class A * | 4,373 | 393,264 |
| Liberty Broadband Corp., Class C * | 17,496 | 1,594,935 |
| Liberty Global plc LiLAC., Class A * | 10,518 | 225,822 |
| Liberty Global plc LiLAC., Class C * | 38,896 | 849,489 |
| Liberty Global plc, Class A * | 59,475 | 2,106,605 |
| Liberty Global plc, Series C * | 145,775 | 5,045,273 |
| Liberty Media Corp. - Liberty Braves, Class A * | 1,749 | 43,428 |
| Liberty Media Corp. - Liberty Braves, Class C * | 7,098 | 174,043 |
| Liberty Media Corp. - Liberty Formula One, Class A * | 4,373 | 148,288 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 10,672 | 373,733 |
| Liberty Media Corp. - Liberty SiriusXM, Class A * | 17,495 | 666,560 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 42,690 | 1,621,793 |
| Lions Gate Entertainment Corp., Class A | 10,300 | 269,551 |
| Lions Gate Entertainment Corp., Class B * | 31,486 | 750,941 |
| Live Nation Entertainment, Inc. * | 35,657 | 1,146,729 |
| Loral Space & Communications, Inc. * | 2,800 | 107,380 |
| Meredith Corp. | 9,400 | 550,370 |
| MSG Networks, Inc., Class A * | 10,175 | 253,866 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| National CineMedia, Inc. | 13,200 | 156,684 |
| New Media Investment Group, Inc. | 11,500 | 151,340 |
| News Corp., Class A | 97,287 | 1,237,491 |
| News Corp., Class B | 25,000 | 325,000 |
| Nexstar Media Group, Inc. | 6,798 | 469,062 |
| Omnicom Group, Inc. | 56,200 | 4,615,144 |
| Regal Entertainment Group, Class A | 22,794 | 503,064 |
| Salem Media Group, Inc. | 5,700 | 43,605 |
| Scholastic Corp. | 7,300 | 315,579 |
| Scripps Networks Interactive, Inc., Class A | 22,800 | 1,703,616 |
| Sinclair Broadcast Group, Inc., Class A | 18,400 | 725,880 |
| Sirius XM Holdings, Inc. (b) | 375,300 | 1,857,735 |
| TEGNA, Inc. | 46,100 | 1,174,628 |
| The E.W. Scripps Co., Class A * | 18,547 | 413,227 |
| The Interpublic Group of Cos., Inc. | 95,337 | 2,247,093 |
| The Madison Square Garden Co., Class A * | 3,791 | 764,910 |
| The New York Times Co., Class A | 40,200 | 580,890 |
| The Walt Disney Co. | 337,839 | 39,054,188 |
| Time Warner, Inc. | 181,357 | 18,003,309 |
| Time, Inc. | 19,122 | 290,654 |
| Tribune Media Co., Class A | 18,500 | 676,360 |
| Twenty-First Century Fox, Inc., Class A | 253,178 | 7,732,056 |
| Twenty-First Century Fox, Inc., Class B | 106,221 | 3,171,759 |
| Viacom, Inc., Class B | 84,322 | 3,588,744 |
| World Wrestling Entertainment, Inc., Class A | 5,700 | 122,151 |
| | | 183,300,677 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 8.1% |
| AbbVie, Inc. | 372,796 | 24,582,168 |
| ACADIA Pharmaceuticals, Inc. * | 24,600 | 844,518 |
| Accelerate Diagnostics, Inc. * | 10,300 | 281,190 |
| Acceleron Pharma, Inc. * | 12,500 | 412,750 |
| Achillion Pharmaceuticals, Inc. * | 19,800 | 67,518 |
| Acorda Therapeutics, Inc. * | 8,400 | 135,660 |
| Aerie Pharmaceuticals, Inc. * | 8,500 | 374,425 |
| Agilent Technologies, Inc. | 71,917 | 3,959,031 |
| Agios Pharmaceuticals, Inc. * | 6,000 | 298,260 |
| Akorn, Inc. * | 26,000 | 869,700 |
| Albany Molecular Research, Inc. * | 8,800 | 140,888 |
| Alder Biopharmaceuticals, Inc. * | 14,600 | 292,730 |
| Alexion Pharmaceuticals, Inc. * | 53,000 | 6,772,340 |
| Alkermes plc * | 38,241 | 2,227,538 |
| Allergan plc | 78,787 | 19,212,998 |
| Alnylam Pharmaceuticals, Inc. * | 16,600 | 889,760 |
| AMAG Pharmaceuticals, Inc. * | 6,600 | 161,040 |
| Amgen, Inc. | 170,689 | 27,876,927 |
| Amicus Therapeutics, Inc. * | 27,200 | 208,896 |
| Aptevo Therapeutics, Inc. * | 5,200 | 10,400 |
| AquaBounty Technologies, Inc. * | 237 | 1,841 |
| Aratana Therapeutics, Inc. * | 10,100 | 62,620 |
| ArQule, Inc. * | 21,000 | 20,790 |
| Array BioPharma, Inc. * | 62,184 | 539,135 |
| Avexis, Inc. * | 4,900 | 394,450 |
| Bio-Rad Laboratories, Inc., Class A * | 4,900 | 1,069,474 |
| Bio-Techne Corp. | 7,800 | 835,224 |
| BioCryst Pharmaceuticals, Inc. * | 23,900 | 151,526 |
| Biogen, Inc. * | 50,112 | 13,590,876 |
| BioMarin Pharmaceutical, Inc. * | 40,705 | 3,901,167 |
| Bioverativ, Inc. * | 24,006 | 1,411,793 |
| Bluebird Bio, Inc. * | 10,900 | 969,555 |
| Blueprint Medicines Corp. * | 8,100 | 377,298 |
| Bristol-Myers Squibb Co. | 388,253 | 21,761,581 |
| Bruker Corp. | 29,700 | 724,383 |
| Calithera Biosciences, Inc. * | 20,500 | 222,425 |
| Cambrex Corp. * | 7,200 | 427,320 |
| Security | Number
of Shares | Value ($) |
| Catalent, Inc. * | 27,800 | 813,984 |
| Celgene Corp. * | 181,562 | 22,522,766 |
| Celldex Therapeutics, Inc. * | 25,800 | 85,914 |
| Charles River Laboratories International, Inc. * | 14,016 | 1,257,235 |
| Clovis Oncology, Inc. * | 10,600 | 613,634 |
| Coherus Biosciences, Inc. * | 13,200 | 253,440 |
| Collegium Pharmaceutical, Inc. * | 14,300 | 140,283 |
| CytomX Therapeutics, Inc. * | 19,500 | 306,345 |
| Depomed, Inc. * | 14,500 | 173,855 |
| Dermira, Inc. * | 9,400 | 320,164 |
| Eagle Pharmaceuticals, Inc. * | 2,500 | 226,475 |
| Eli Lilly & Co. | 227,189 | 18,643,129 |
| Emergent BioSolutions, Inc. * | 10,400 | 311,064 |
| Endo International plc * | 23,450 | 266,626 |
| Endocyte, Inc. * | 11,300 | 25,990 |
| Enzo Biochem, Inc. * | 43,981 | 387,033 |
| Exact Sciences Corp. * | 29,800 | 894,298 |
| Exelixis, Inc. * | 59,800 | 1,339,520 |
| FibroGen, Inc. * | 12,700 | 355,600 |
| Five Prime Therapeutics, Inc. * | 9,200 | 320,712 |
| Flexion Therapeutics, Inc. * | 11,400 | 232,674 |
| Fluidigm Corp. * | 6,000 | 29,640 |
| Foundation Medicine, Inc. * | 6,500 | 230,750 |
| Galectin Therapeutics, Inc. *(b) | 152,300 | 466,038 |
| Genomic Health, Inc. * | 8,400 | 276,024 |
| Geron Corp. *(b) | 46,200 | 118,272 |
| Gilead Sciences, Inc. | 306,892 | 21,037,447 |
| Global Blood Therapeutics, Inc. * | 8,100 | 234,495 |
| Halozyme Therapeutics, Inc. * | 28,000 | 390,320 |
| Harvard Bioscience, Inc. * | 19,300 | 46,320 |
| Heron Therapeutics, Inc. * | 8,200 | 125,870 |
| Horizon Pharma plc * | 42,700 | 656,726 |
| Idera Pharmaceuticals, Inc. * | 156,400 | 367,540 |
| Ignyta, Inc. * | 33,900 | 300,015 |
| Illumina, Inc. * | 34,200 | 6,322,212 |
| ImmunoGen, Inc. *(b) | 36,100 | 156,674 |
| Immunomedics, Inc. *(b) | 19,848 | 113,729 |
| Impax Laboratories, Inc. * | 13,800 | 193,890 |
| INC Research Holdings, Inc., Class A * | 14,000 | 630,000 |
| Incyte Corp. * | 41,300 | 5,132,764 |
| Innoviva, Inc. * | 13,700 | 161,455 |
| Inovio Pharmaceuticals, Inc. *(b) | 20,194 | 127,020 |
| Insmed, Inc. * | 15,000 | 276,750 |
| Intercept Pharmaceuticals, Inc. *(b) | 3,900 | 438,165 |
| Intra-Cellular Therapies, Inc. * | 8,000 | 110,560 |
| Intrexon Corp. *(b) | 15,900 | 331,356 |
| Ionis Pharmaceuticals, Inc. * | 29,400 | 1,416,786 |
| Ironwood Pharmaceuticals, Inc. * | 36,600 | 597,312 |
| Jazz Pharmaceuticals plc * | 14,400 | 2,293,632 |
| Johnson & Johnson | 635,509 | 78,466,296 |
| Juno Therapeutics, Inc. * | 18,800 | 468,872 |
| Keryx Biopharmaceuticals, Inc. *(b) | 24,800 | 146,816 |
| Kite Pharma, Inc. * | 11,900 | 976,752 |
| Lannett Co., Inc. *(b) | 8,800 | 228,800 |
| Lexicon Pharmaceuticals, Inc. * | 18,214 | 284,321 |
| Ligand Pharmaceuticals, Inc. * | 4,948 | 550,069 |
| Luminex Corp. | 12,900 | 242,907 |
| MacroGenics, Inc. * | 7,500 | 162,075 |
| Mallinckrodt plc * | 25,602 | 1,201,246 |
| Merck & Co., Inc. | 640,716 | 39,935,828 |
| Merrimack Pharmaceuticals, Inc. *(b) | 38,590 | 128,505 |
| Mettler-Toledo International, Inc. * | 5,900 | 3,029,178 |
| MiMedx Group, Inc. *(b) | 26,820 | 340,346 |
| Momenta Pharmaceuticals, Inc. * | 13,500 | 193,725 |
| Mylan N.V. * | 106,700 | 3,985,245 |
| Myriad Genetics, Inc. * | 16,600 | 305,274 |
| Nektar Therapeutics * | 43,600 | 827,092 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Neurocrine Biosciences, Inc. * | 17,200 | 918,480 |
| Novavax, Inc. *(b) | 52,500 | 42,845 |
| Omeros Corp. *(b) | 8,800 | 143,616 |
| OPKO Health, Inc. *(b) | 77,300 | 600,621 |
| Pacific Biosciences of California, Inc. * | 17,500 | 68,950 |
| Pacira Pharmaceuticals, Inc. * | 13,200 | 640,860 |
| PAREXEL International Corp. * | 13,800 | 880,854 |
| PerkinElmer, Inc. | 23,577 | 1,400,710 |
| Perrigo Co., plc | 34,000 | 2,513,960 |
| Pfizer, Inc. | 1,393,425 | 47,264,976 |
| Portola Pharmaceuticals, Inc. * | 13,300 | 531,867 |
| PRA Health Sciences, Inc. * | 8,100 | 518,076 |
| Prestige Brands Holdings, Inc. * | 16,300 | 935,783 |
| Progenics Pharmaceuticals Inc * | 39,500 | 312,840 |
| Proteostasis Therapeutics, Inc. * | 18,300 | 110,624 |
| Prothena Corp. plc * | 8,919 | 482,785 |
| PTC Therapeutics, Inc. * | 5,885 | 71,503 |
| Puma Biotechnology, Inc. * | 9,700 | 393,820 |
| Quintiles IMS Holdings, Inc. * | 30,243 | 2,548,880 |
| Radius Health, Inc. * | 8,000 | 312,560 |
| Reata Pharmaceuticals, Inc., Class A *(b) | 9,700 | 201,178 |
| Regeneron Pharmaceuticals, Inc. * | 18,000 | 6,992,820 |
| Repligen Corp. * | 9,886 | 363,706 |
| Retrophin, Inc. * | 9,400 | 184,146 |
| Revance Therapeutics, Inc. * | 16,500 | 358,875 |
| Rigel Pharmaceuticals, Inc. * | 48,200 | 144,118 |
| Sage Therapeutics, Inc. * | 8,400 | 596,400 |
| Sangamo Therapeutics, Inc. * | 14,600 | 70,080 |
| Sarepta Therapeutics, Inc. * | 9,800 | 355,348 |
| Seattle Genetics, Inc. * | 23,400 | 1,598,220 |
| Seres Therapeutics, Inc. * | 20,000 | 196,600 |
| Spark Therapeutics, Inc. * | 5,900 | 342,023 |
| Spectrum Pharmaceuticals, Inc. * | 24,200 | 184,162 |
| Spring Bank Pharmaceuticals, Inc. * | 28,300 | 271,397 |
| Sucampo Pharmaceuticals, Inc., Class A * | 4,300 | 43,645 |
| Supernus Pharmaceuticals, Inc. * | 10,797 | 351,982 |
| Synergy Pharmaceuticals, Inc. *(b) | 47,900 | 197,348 |
| TESARO, Inc. * | 8,095 | 1,194,741 |
| TG Therapeutics, Inc. * | 13,000 | 143,650 |
| The Medicines Co. * | 17,700 | 872,964 |
| TherapeuticsMD, Inc. *(b) | 35,777 | 182,463 |
| Theravance Biopharma, Inc. * | 13,214 | 532,921 |
| Thermo Fisher Scientific, Inc. | 89,002 | 14,714,701 |
| Trevena, Inc. * | 56,700 | 185,409 |
| Ultragenyx Pharmaceutical, Inc. * | 12,000 | 772,680 |
| United Therapeutics Corp. * | 11,200 | 1,407,840 |
| Vanda Pharmaceuticals, Inc. * | 13,953 | 212,783 |
| Vertex Pharmaceuticals, Inc. * | 58,044 | 6,866,605 |
| VWR Corp. * | 19,000 | 536,940 |
| Waters Corp. * | 19,772 | 3,359,065 |
| Xencor, Inc. * | 19,900 | 510,833 |
| ZIOPHARM Oncology, Inc. *(b) | 33,811 | 238,029 |
| Zoetis, Inc. | 113,579 | 6,372,918 |
| Zogenix, Inc. * | 27,800 | 305,800 |
| | | 471,183,045 |
| |
| Real Estate 4.1% |
| Acadia Realty Trust | 23,300 | 677,564 |
| Agree Realty Corp. | 5,000 | 242,400 |
| Alexander & Baldwin, Inc. | 17,800 | 818,978 |
| Alexander's, Inc. | 1,400 | 608,734 |
| Alexandria Real Estate Equities, Inc. | 19,300 | 2,171,443 |
| Altisource Residential Corp. | 10,789 | 155,146 |
| American Assets Trust, Inc. | 8,000 | 342,640 |
| American Campus Communities, Inc. | 29,900 | 1,416,961 |
| American Homes 4 Rent, Class A | 44,300 | 1,021,115 |
| American Realty Investors, Inc. * | 1,537 | 11,820 |
| Security | Number
of Shares | Value ($) |
| American Tower Corp. | 100,744 | 12,687,699 |
| Apartment Investment & Management Co., Class A | 39,211 | 1,715,089 |
| Apple Hospitality REIT, Inc. | 35,000 | 655,550 |
| Ashford Hospitality Prime, Inc. | 2,168 | 22,959 |
| Ashford Hospitality Trust, Inc. | 9,000 | 56,250 |
| AvalonBay Communities, Inc. | 32,619 | 6,192,391 |
| Boston Properties, Inc. | 34,000 | 4,304,400 |
| Brandywine Realty Trust | 45,663 | 774,901 |
| Brixmor Property Group, Inc. | 64,500 | 1,273,875 |
| Camden Property Trust | 23,800 | 1,959,454 |
| Care Capital Properties, Inc. | 16,741 | 449,831 |
| CareTrust REIT, Inc. | 7,131 | 121,370 |
| CBL & Associates Properties, Inc. | 54,085 | 500,286 |
| CBRE Group, Inc., Class A * | 65,800 | 2,356,298 |
| Cedar Realty Trust, Inc. | 33,200 | 178,616 |
| Chatham Lodging Trust | 8,234 | 159,410 |
| Chesapeake Lodging Trust | 18,500 | 431,235 |
| Colony NorthStar, Inc., Class A | 117,152 | 1,531,177 |
| Colony Starwood Homes | 23,740 | 820,692 |
| Columbia Property Trust, Inc. | 30,300 | 681,750 |
| Consolidated-Tomoka Land Co. | 2,000 | 108,460 |
| CoreCivic, Inc. | 30,985 | 1,067,433 |
| CorEnergy Infrastructure Trust, Inc. | 8,700 | 317,376 |
| CoreSite Realty Corp. | 7,300 | 714,305 |
| Corporate Office Properties Trust | 27,600 | 903,624 |
| Cousins Properties, Inc. | 117,997 | 1,001,795 |
| Crown Castle International Corp. | 83,623 | 7,910,736 |
| CubeSmart | 41,400 | 1,049,076 |
| CyrusOne, Inc. | 17,600 | 961,664 |
| DCT Industrial Trust, Inc. | 15,900 | 803,904 |
| DDR Corp. | 54,584 | 590,053 |
| DiamondRock Hospitality Co. | 59,386 | 653,840 |
| Digital Realty Trust, Inc. | 37,500 | 4,306,500 |
| Douglas Emmett, Inc. | 31,548 | 1,188,413 |
| Duke Realty Corp. | 79,590 | 2,207,031 |
| DuPont Fabros Technology, Inc. | 17,100 | 881,505 |
| EastGroup Properties, Inc. | 10,000 | 782,500 |
| Education Realty Trust, Inc. | 14,966 | 580,232 |
| Empire State Realty Trust, Inc., Class A | 22,502 | 468,042 |
| EPR Properties | 13,600 | 988,856 |
| Equinix, Inc. | 18,066 | 7,546,168 |
| Equity Commonwealth * | 33,150 | 1,060,468 |
| Equity LifeStyle Properties, Inc. | 20,700 | 1,674,837 |
| Equity Residential | 83,500 | 5,392,430 |
| Essex Property Trust, Inc. | 14,989 | 3,664,361 |
| Extra Space Storage, Inc. | 29,800 | 2,250,794 |
| Federal Realty Investment Trust | 17,100 | 2,238,219 |
| FelCor Lodging Trust, Inc. | 28,000 | 217,000 |
| First Industrial Realty Trust, Inc. | 33,800 | 951,132 |
| First Potomac Realty Trust | 14,800 | 162,800 |
| Forest City Realty Trust, Inc., Class A | 58,100 | 1,313,060 |
| Forestar Group, Inc. * | 4,933 | 69,802 |
| Four Corners Property Trust, Inc. | 11,616 | 271,001 |
| Franklin Street Properties Corp. | 22,500 | 272,925 |
| FRP Holdings, Inc. * | 8,500 | 362,950 |
| Gaming & Leisure Properties, Inc. | 50,948 | 1,772,990 |
| Getty Realty Corp. | 9,552 | 244,531 |
| GGP, Inc. | 143,409 | 3,099,068 |
| Global Net Lease, Inc. | 13,333 | 315,059 |
| Government Properties Income Trust | 22,900 | 488,228 |
| Gramercy Property Trust | 36,304 | 1,008,888 |
| Griffin Industrial Realty, Inc. | 300 | 9,081 |
| HCP, Inc. | 113,248 | 3,550,325 |
| Healthcare Realty Trust, Inc. | 24,600 | 806,880 |
| Healthcare Trust of America, Inc., Class A | 38,400 | 1,224,576 |
| Hersha Hospitality Trust | 10,000 | 184,400 |
| HFF, Inc., Class A | 9,800 | 307,720 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Highwoods Properties, Inc. | 21,854 | 1,111,931 |
| Hospitality Properties Trust | 39,500 | 1,257,285 |
| Host Hotels & Resorts, Inc. | 166,663 | 2,991,601 |
| Hudson Pacific Properties, Inc. | 39,100 | 1,343,476 |
| Investors Real Estate Trust | 28,600 | 169,026 |
| Invitation Homes, Inc. * | 31,500 | 678,825 |
| Iron Mountain, Inc. | 60,173 | 2,091,613 |
| iStar, Inc. * | 36,990 | 452,388 |
| Jones Lang LaSalle, Inc. | 9,300 | 1,068,198 |
| Kennedy-Wilson Holdings, Inc. | 12,200 | 248,880 |
| Kilroy Realty Corp. | 20,000 | 1,410,600 |
| Kimco Realty Corp. | 93,295 | 1,892,956 |
| Kite Realty Group Trust | 15,825 | 322,197 |
| Lamar Advertising Co., Class A | 20,200 | 1,455,814 |
| LaSalle Hotel Properties | 19,700 | 562,632 |
| Lexington Realty Trust | 71,667 | 728,853 |
| Liberty Property Trust | 33,100 | 1,342,867 |
| Life Storage, Inc. | 11,826 | 927,040 |
| LTC Properties, Inc. | 8,700 | 416,208 |
| Mack-Cali Realty Corp. | 18,500 | 500,425 |
| Maui Land & Pineapple Co., Inc. * | 800 | 10,920 |
| Medical Properties Trust, Inc. | 65,300 | 853,471 |
| Mid-America Apartment Communities, Inc. | 24,966 | 2,476,877 |
| Monmouth Real Estate Investment Corp. | 18,100 | 271,500 |
| Monogram Residential Trust, Inc. | 55,400 | 563,972 |
| National Health Investors, Inc. | 9,500 | 695,115 |
| National Retail Properties, Inc. | 35,520 | 1,499,654 |
| National Storage Affiliates Trust | 22,300 | 546,350 |
| New Century Financial Corp. *(e) | 3,600 | — |
| New Senior Investment Group, Inc. | 20,583 | 214,475 |
| NorthStar Realty Europe Corp. | 10,512 | 122,255 |
| Omega Healthcare Investors, Inc. | 41,394 | 1,366,002 |
| One Liberty Properties, Inc. | 1,400 | 33,992 |
| Outfront Media, Inc. | 36,703 | 960,150 |
| Paramount Group, Inc. | 45,900 | 752,760 |
| Park Hotels & Resorts, Inc. | 26,021 | 667,959 |
| Parkway, Inc. | 9,712 | 195,697 |
| Pebblebrook Hotel Trust | 21,700 | 645,792 |
| Pennsylvania Real Estate Investment Trust | 13,900 | 192,515 |
| Physicians Realty Trust | 24,400 | 479,216 |
| Piedmont Office Realty Trust, Inc., Class A | 40,600 | 887,110 |
| Potlatch Corp. | 5,753 | 259,173 |
| Preferred Apartment Communities, Inc., Class A | 3,700 | 52,355 |
| Prologis, Inc. | 122,234 | 6,650,752 |
| PS Business Parks, Inc. | 6,800 | 826,472 |
| Public Storage | 35,297 | 7,390,486 |
| QTS Realty Trust, Inc., Class A | 9,100 | 486,304 |
| Quality Care Properties, Inc. * | 19,109 | 331,541 |
| RAIT Financial Trust | 16,199 | 49,731 |
| Ramco-Gershenson Properties Trust | 22,500 | 299,925 |
| Rayonier, Inc. | 32,182 | 908,176 |
| RE/MAX Holdings, Inc., Class A | 9,200 | 544,180 |
| Realogy Holdings Corp. | 29,400 | 898,170 |
| Realty Income Corp. | 62,935 | 3,672,257 |
| Regency Centers Corp. | 29,368 | 1,855,470 |
| Retail Opportunity Investments Corp. | 14,400 | 296,640 |
| Retail Properties of America, Inc., Class A | 60,000 | 800,400 |
| Rexford Industrial Realty, Inc. | 14,402 | 359,186 |
| RLJ Lodging Trust | 30,400 | 653,296 |
| Ryman Hospitality Properties, Inc. | 15,237 | 971,816 |
| Sabra Health Care REIT, Inc. | 13,700 | 372,503 |
| Saul Centers, Inc. | 4,700 | 282,235 |
| SBA Communications Corp. * | 28,900 | 3,655,561 |
| Select Income REIT | 14,600 | 365,876 |
| Senior Housing Properties Trust | 57,819 | 1,244,265 |
| Seritage Growth Properties, Class A (b) | 5,300 | 219,950 |
| Security | Number
of Shares | Value ($) |
| Silver Bay Realty Trust Corp. | 13,033 | 279,297 |
| Simon Property Group, Inc. | 74,811 | 12,363,266 |
| SL Green Realty Corp. | 21,966 | 2,304,892 |
| Spirit Realty Capital, Inc. | 89,048 | 838,832 |
| STAG Industrial, Inc. | 11,900 | 313,684 |
| STORE Capital Corp. | 40,100 | 961,999 |
| Summit Hotel Properties, Inc. | 9,600 | 158,688 |
| Sun Communities, Inc. | 14,492 | 1,211,676 |
| Sunstone Hotel Investors, Inc. | 62,013 | 923,374 |
| Tanger Factory Outlet Centers, Inc. | 31,200 | 973,128 |
| Taubman Centers, Inc. | 15,400 | 963,270 |
| Tejon Ranch Co. * | 3,674 | 84,135 |
| Terreno Realty Corp. | 10,000 | 308,800 |
| The GEO Group, Inc. | 29,849 | 994,552 |
| The Howard Hughes Corp. * | 10,000 | 1,231,100 |
| The Macerich Co. | 27,405 | 1,710,894 |
| The RMR Group, Inc., Class A | 1,889 | 99,645 |
| The St. Joe Co. * | 18,800 | 329,000 |
| Tier REIT, Inc. | 20,000 | 346,200 |
| UDR, Inc. | 63,261 | 2,362,166 |
| UMH Properties, Inc. | 7,900 | 126,558 |
| Uniti Group, Inc. * | 42,753 | 1,173,997 |
| Universal Health Realty Income Trust | 4,700 | 327,825 |
| Urban Edge Properties | 16,046 | 409,173 |
| Urstadt Biddle Properties, Inc., Class A | 4,500 | 88,470 |
| Ventas, Inc. | 79,766 | 5,105,822 |
| VEREIT, Inc. | 256,000 | 2,142,720 |
| Vornado Realty Trust | 42,492 | 4,089,430 |
| Washington Prime Group, Inc. | 66,404 | 584,355 |
| Washington Real Estate Investment Trust | 9,700 | 307,199 |
| Weingarten Realty Investors | 23,175 | 759,445 |
| Welltower, Inc. | 82,058 | 5,862,223 |
| Weyerhaeuser Co. | 168,907 | 5,720,880 |
| Whitestone REIT | 2,100 | 26,334 |
| WP Carey, Inc. | 22,700 | 1,421,020 |
| Xenia Hotels & Resorts, Inc. | 35,200 | 614,592 |
| | | 237,659,030 |
| |
| Retailing 5.1% |
| Aaron's, Inc. | 14,675 | 527,419 |
| Abercrombie & Fitch Co., Class A | 11,800 | 141,482 |
| Advance Auto Parts, Inc. | 17,040 | 2,422,066 |
| Amazon.com, Inc. * | 92,425 | 85,492,201 |
| America's Car-Mart, Inc. * | 6,850 | 255,505 |
| American Eagle Outfitters, Inc. | 40,750 | 574,167 |
| Asbury Automotive Group, Inc. * | 6,500 | 397,800 |
| Ascena Retail Group, Inc. * | 34,141 | 133,491 |
| AutoNation, Inc. * | 13,800 | 579,600 |
| AutoZone, Inc. * | 6,800 | 4,706,892 |
| Barnes & Noble Education, Inc. * | 4,676 | 48,677 |
| Barnes & Noble, Inc. | 7,400 | 63,270 |
| Bed Bath & Beyond, Inc. | 35,500 | 1,375,625 |
| Best Buy Co., Inc. | 63,425 | 3,286,049 |
| Big Lots, Inc. | 9,200 | 464,508 |
| Burlington Stores, Inc. * | 17,000 | 1,681,640 |
| Cabela's, Inc. * | 12,700 | 693,420 |
| Caleres, Inc. | 6,675 | 192,374 |
| CarMax, Inc. * | 40,246 | 2,354,391 |
| Chico's FAS, Inc. | 26,200 | 362,084 |
| Core-Mark Holding Co., Inc. | 8,000 | 280,160 |
| CST Brands, Inc. | 21,286 | 1,027,901 |
| Dick's Sporting Goods, Inc. | 17,500 | 884,625 |
| Dillard's, Inc., Class A | 4,300 | 238,091 |
| Dollar General Corp. | 59,625 | 4,335,334 |
| Dollar Tree, Inc. * | 57,144 | 4,729,809 |
| DSW, Inc., Class A | 29,960 | 617,775 |
| Etsy, Inc. * | 31,300 | 336,788 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Expedia, Inc. | 26,469 | 3,539,435 |
| Express, Inc. * | 12,600 | 108,738 |
| Five Below, Inc. * | 15,800 | 776,096 |
| Foot Locker, Inc. | 29,900 | 2,312,466 |
| Francesca's Holdings Corp. * | 13,300 | 209,874 |
| Fred's, Inc., Class A (b) | 6,700 | 98,624 |
| FTD Cos., Inc. * | 8,070 | 161,400 |
| GameStop Corp., Class A | 19,348 | 439,006 |
| Genesco, Inc. * | 8,500 | 453,050 |
| Genuine Parts Co. | 33,100 | 3,045,862 |
| Group 1 Automotive, Inc. | 7,900 | 544,705 |
| Groupon, Inc. * | 88,400 | 346,528 |
| Guess?, Inc. | 16,800 | 187,488 |
| Hibbett Sports, Inc. * | 12,443 | 323,518 |
| HSN, Inc. | 6,269 | 231,326 |
| J.C. Penney Co., Inc. *(b) | 72,200 | 388,436 |
| Kirkland's, Inc. * | 8,700 | 102,312 |
| Kohl's Corp. | 45,900 | 1,791,477 |
| L Brands, Inc. | 56,120 | 2,963,697 |
| Lands' End, Inc. *(b) | 7,747 | 182,829 |
| Liberty Expedia Holdings, Inc., Class A * | 10,138 | 489,767 |
| Liberty Interactive Corp., QVC Group, Class A * | 104,609 | 2,215,619 |
| Liberty TripAdvisor Holdings, Inc., Class A * | 13,830 | 203,301 |
| Liberty Ventures, Series A * | 21,708 | 1,168,976 |
| Lithia Motors, Inc., Class A | 7,100 | 678,405 |
| LKQ Corp. * | 66,600 | 2,080,584 |
| Lowe's Cos., Inc. | 198,351 | 16,836,033 |
| Lumber Liquidators Holdings, Inc. * | 4,600 | 112,930 |
| Macy's, Inc. | 63,863 | 1,866,077 |
| MarineMax, Inc. * | 16,300 | 331,705 |
| Monro Muffler Brake, Inc. | 10,162 | 526,900 |
| Murphy USA, Inc. * | 6,875 | 478,294 |
| Netflix, Inc. * | 99,347 | 15,120,613 |
| Nordstrom, Inc. | 26,300 | 1,269,501 |
| Nutrisystem, Inc. | 13,300 | 710,885 |
| O'Reilly Automotive, Inc. * | 20,699 | 5,136,457 |
| Office Depot, Inc. | 99,656 | 495,290 |
| Ollie's Bargain Outlet Holdings, Inc. * | 10,377 | 397,439 |
| Penske Automotive Group, Inc. | 9,100 | 434,161 |
| Pier 1 Imports, Inc. | 15,800 | 106,492 |
| Pool Corp. | 9,962 | 1,191,654 |
| Rent-A-Center, Inc. (b) | 33,550 | 358,650 |
| RH *(b) | 6,300 | 302,211 |
| Ross Stores, Inc. | 90,000 | 5,850,000 |
| Sally Beauty Holdings, Inc. * | 31,150 | 592,473 |
| Sears Holdings Corp. *(b) | 26,785 | 273,743 |
| Select Comfort Corp. * | 12,200 | 376,980 |
| Shoe Carnival, Inc. | 6,300 | 159,831 |
| Shutterfly, Inc. * | 6,300 | 326,970 |
| Signet Jewelers Ltd. | 16,800 | 1,106,112 |
| Sonic Automotive, Inc., Class A | 11,200 | 219,520 |
| Staples, Inc. | 160,700 | 1,570,039 |
| Tailored Brands, Inc. | 21,100 | 260,163 |
| Target Corp. | 130,578 | 7,292,781 |
| The Buckle, Inc. (b) | 3,875 | 72,463 |
| The Cato Corp., Class A | 7,100 | 160,176 |
| The Children's Place, Inc. | 3,600 | 413,280 |
| The Finish Line, Inc., Class A | 7,161 | 113,215 |
| The Gap, Inc. | 51,800 | 1,357,160 |
| The Home Depot, Inc. | 284,763 | 44,451,504 |
| The Michaels Cos., Inc. * | 26,400 | 616,704 |
| The Priceline Group, Inc. * | 11,476 | 21,194,106 |
| The TJX Cos., Inc. | 153,647 | 12,082,800 |
| Tiffany & Co. | 25,600 | 2,346,240 |
| Tile Shop Holdings, Inc. | 13,900 | 296,765 |
| Tractor Supply Co. | 30,100 | 1,863,491 |
| Security | Number
of Shares | Value ($) |
| Trans World Entertainment Corp. * | 9,700 | 18,430 |
| TripAdvisor, Inc. * | 27,672 | 1,245,517 |
| Tuesday Morning Corp. * | 10,800 | 35,100 |
| Ulta Salon, Cosmetics & Fragrance, Inc. * | 13,800 | 3,883,872 |
| Urban Outfitters, Inc. * | 18,000 | 411,840 |
| Vitamin Shoppe, Inc. * | 4,200 | 81,060 |
| Wayfair, Inc., Class A *(b) | 7,500 | 342,825 |
| West Marine, Inc. * | 8,200 | 89,872 |
| Williams-Sonoma, Inc. | 16,200 | 875,610 |
| Winmark Corp. | 1,700 | 219,470 |
| Zumiez, Inc. * | 10,500 | 188,475 |
| | | 299,310,542 |
| |
| Semiconductors & Semiconductor Equipment 3.2% |
| Advanced Energy Industries, Inc. * | 12,500 | 922,500 |
| Advanced Micro Devices, Inc. * | 185,800 | 2,471,140 |
| Amkor Technology, Inc. * | 35,700 | 420,546 |
| Analog Devices, Inc. | 83,335 | 6,350,127 |
| Applied Materials, Inc. | 254,698 | 10,343,286 |
| AXT, Inc. * | 3,500 | 23,625 |
| Broadcom Ltd. | 92,604 | 20,447,889 |
| Brooks Automation, Inc. | 11,885 | 300,215 |
| Cabot Microelectronics Corp. | 5,660 | 443,461 |
| Cavium, Inc. * | 17,370 | 1,195,924 |
| CEVA, Inc. * | 7,233 | 260,388 |
| Cirrus Logic, Inc. * | 19,100 | 1,229,085 |
| Cohu, Inc. | 7,500 | 140,475 |
| Cree, Inc. * | 20,900 | 457,292 |
| Cypress Semiconductor Corp. | 69,226 | 969,856 |
| Diodes, Inc. * | 11,012 | 257,571 |
| DSP Group, Inc. * | 6,300 | 78,435 |
| Entegris, Inc. * | 35,399 | 877,895 |
| Exar Corp. * | 9,834 | 127,940 |
| First Solar, Inc. * | 16,479 | 486,954 |
| FormFactor, Inc. * | 14,600 | 162,060 |
| GSI Technology, Inc. * | 8,500 | 68,255 |
| Inphi Corp. * | 14,400 | 596,448 |
| Integrated Device Technology, Inc. * | 26,920 | 645,811 |
| Intel Corp. | 1,103,197 | 39,880,572 |
| IXYS Corp. | 6,900 | 96,255 |
| KLA-Tencor Corp. | 38,000 | 3,732,360 |
| Kopin Corp. * | 19,600 | 79,968 |
| Kulicke & Soffa Industries, Inc. * | 18,500 | 412,920 |
| Lam Research Corp. | 37,167 | 5,383,640 |
| Lattice Semiconductor Corp. * | 25,100 | 172,186 |
| MACOM Technology Solutions Holdings, Inc. * | 8,619 | 421,297 |
| Marvell Technology Group Ltd. | 111,400 | 1,673,228 |
| Maxim Integrated Products, Inc. | 61,700 | 2,724,055 |
| MaxLinear, Inc. * | 14,822 | 412,496 |
| Microchip Technology, Inc. | 53,380 | 4,034,462 |
| Micron Technology, Inc. * | 240,907 | 6,665,897 |
| Microsemi Corp. * | 26,738 | 1,255,082 |
| MKS Instruments, Inc. | 14,000 | 1,095,500 |
| Monolithic Power Systems, Inc. | 9,600 | 878,400 |
| Nanometrics, Inc. * | 5,300 | 167,242 |
| NVIDIA Corp. | 135,300 | 14,111,790 |
| ON Semiconductor Corp. * | 101,065 | 1,433,102 |
| PDF Solutions, Inc. * | 9,699 | 184,475 |
| Photronics, Inc. * | 18,000 | 207,000 |
| Power Integrations, Inc. | 8,900 | 586,955 |
| Qorvo, Inc. * | 30,074 | 2,045,934 |
| QUALCOMM, Inc. | 341,339 | 18,343,558 |
| Rambus, Inc. * | 19,600 | 245,392 |
| Rudolph Technologies, Inc. * | 16,418 | 402,241 |
| Semtech Corp. * | 21,700 | 741,055 |
| Silicon Laboratories, Inc. * | 9,200 | 654,580 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Skyworks Solutions, Inc. | 43,489 | 4,337,593 |
| SunPower Corp. *(b) | 15,500 | 107,570 |
| Synaptics, Inc. * | 8,450 | 462,806 |
| Teradyne, Inc. | 44,059 | 1,553,961 |
| Texas Instruments, Inc. | 230,797 | 18,274,506 |
| Ultratech, Inc. * | 4,800 | 146,496 |
| Veeco Instruments, Inc. * | 8,800 | 290,400 |
| Versum Materials, Inc. | 24,700 | 790,894 |
| Xcerra Corp. * | 19,192 | 188,082 |
| Xilinx, Inc. | 58,500 | 3,691,935 |
| Xperi Corp. | 11,100 | 372,960 |
| | | 187,536,023 |
| |
| Software & Services 12.7% |
| 2U, Inc. * | 7,000 | 317,800 |
| 8x8, Inc. * | 25,000 | 363,750 |
| Accenture plc, Class A | 145,797 | 17,685,176 |
| ACI Worldwide, Inc. * | 23,100 | 496,419 |
| Activision Blizzard, Inc. | 164,532 | 8,596,797 |
| Actua Corp. * | 8,050 | 112,700 |
| Acxiom Corp. * | 13,300 | 384,370 |
| Adobe Systems, Inc. * | 116,610 | 15,595,421 |
| Akamai Technologies, Inc. * | 41,438 | 2,525,232 |
| Alliance Data Systems Corp. | 13,044 | 3,256,174 |
| Alphabet, Inc., Class A * | 69,376 | 64,139,500 |
| Alphabet, Inc., Class C * | 69,027 | 62,535,701 |
| Amdocs Ltd. | 34,600 | 2,118,904 |
| Angie's List, Inc. * | 22,248 | 130,818 |
| ANSYS, Inc. * | 19,286 | 2,124,546 |
| Aspen Technology, Inc. * | 15,400 | 946,946 |
| Autodesk, Inc. * | 46,600 | 4,197,262 |
| Automatic Data Processing, Inc. | 104,862 | 10,957,030 |
| Bankrate, Inc. * | 14,600 | 154,760 |
| Bazaarvoice, Inc. * | 15,200 | 71,440 |
| Blackbaud, Inc. | 13,400 | 1,077,494 |
| Blackhawk Network Holdings, Inc. * | 19,203 | 776,761 |
| Blucora, Inc. * | 11,572 | 213,503 |
| Booz Allen Hamilton Holding Corp. | 32,700 | 1,174,911 |
| Bottomline Technologies de, Inc. * | 8,800 | 205,040 |
| Broadridge Financial Solutions, Inc. | 30,725 | 2,148,906 |
| BroadSoft, Inc. * | 12,900 | 495,360 |
| CA, Inc. | 78,408 | 2,574,135 |
| CACI International, Inc., Class A * | 4,100 | 483,800 |
| Cadence Design Systems, Inc. * | 62,500 | 2,035,625 |
| Callidus Software, Inc. * | 16,546 | 348,293 |
| Carbonite, Inc. * | 14,300 | 308,880 |
| Cardtronics plc, Class A * | 8,800 | 365,904 |
| CDK Global, Inc. | 32,620 | 2,120,626 |
| Citrix Systems, Inc. * | 34,200 | 2,768,148 |
| Cognizant Technology Solutions Corp., Class A * | 138,000 | 8,311,740 |
| CommerceHub, Inc., Series A * | 2,534 | 40,544 |
| CommerceHub, Inc., Series C * | 5,069 | 80,698 |
| CommVault Systems, Inc. * | 13,100 | 660,895 |
| Conduent, Inc. * | 38,811 | 633,007 |
| Convergys Corp. | 26,600 | 598,766 |
| CoreLogic, Inc. * | 23,100 | 987,294 |
| Cornerstone OnDemand, Inc. * | 12,500 | 491,000 |
| CoStar Group, Inc. * | 7,900 | 1,903,031 |
| Covisint Corp. * | 4,460 | 8,920 |
| CSG Systems International, Inc. | 8,900 | 333,839 |
| CSRA, Inc. | 36,138 | 1,050,893 |
| Dell Technologies, Inc., Class V * | 50,677 | 3,400,933 |
| Digimarc Corp. *(b) | 3,542 | 102,187 |
| DST Systems, Inc. | 8,200 | 1,009,502 |
| DXC Technology Co. * | 68,704 | 5,176,159 |
| eBay, Inc. * | 235,644 | 7,872,866 |
| Security | Number
of Shares | Value ($) |
| Ebix, Inc. | 8,303 | 512,295 |
| Edgewater Technology, Inc. * | 767 | 5,576 |
| Electronic Arts, Inc. * | 72,400 | 6,864,968 |
| Ellie Mae, Inc. * | 8,393 | 854,072 |
| Endurance International Group Holdings, Inc. * | 42,300 | 321,480 |
| EnerNOC, Inc. * | 9,754 | 55,110 |
| Envestnet, Inc. * | 7,300 | 254,040 |
| EPAM Systems, Inc. * | 12,000 | 924,000 |
| Euronet Worldwide, Inc. * | 11,900 | 983,178 |
| Everi Holdings, Inc. * | 28,300 | 179,705 |
| EVERTEC, Inc. | 14,000 | 221,900 |
| ExlService Holdings, Inc. * | 7,200 | 343,512 |
| Facebook, Inc., Class A * | 549,607 | 82,578,452 |
| Fair Isaac Corp. | 8,544 | 1,157,541 |
| Fidelity National Information Services, Inc. | 77,891 | 6,557,643 |
| FireEye, Inc. * | 39,700 | 496,647 |
| First Data Corp., Class A * | 35,000 | 546,700 |
| Fiserv, Inc. * | 48,600 | 5,790,204 |
| FleetCor Technologies, Inc. * | 21,800 | 3,076,852 |
| Forrester Research, Inc. | 6,800 | 275,740 |
| Fortinet, Inc. * | 34,800 | 1,357,200 |
| Gartner, Inc. * | 19,356 | 2,208,326 |
| Genpact Ltd. | 28,274 | 690,451 |
| Gigamon, Inc. * | 9,700 | 307,490 |
| Global Payments, Inc. | 38,028 | 3,109,169 |
| Glu Mobile, Inc. * | 38,900 | 89,859 |
| GoDaddy, Inc., Class A * | 15,100 | 587,692 |
| Gogo, Inc. *(b) | 16,000 | 201,760 |
| GrubHub, Inc. * | 20,400 | 876,792 |
| GSE Systems, Inc. * | 2,424 | 8,242 |
| Guidewire Software, Inc. * | 19,500 | 1,199,055 |
| Hortonworks, Inc. * | 26,900 | 280,029 |
| HubSpot, Inc. * | 11,300 | 757,665 |
| IAC/InterActiveCorp * | 18,072 | 1,500,157 |
| Imperva, Inc. * | 8,262 | 367,246 |
| Information Services Group, Inc. * | 7,500 | 23,625 |
| International Business Machines Corp. | 200,351 | 32,114,262 |
| Intuit, Inc. | 56,930 | 7,128,205 |
| j2 Global, Inc. | 13,300 | 1,200,192 |
| Jack Henry & Associates, Inc. | 19,400 | 1,880,248 |
| Jive Software, Inc. * | 27,994 | 141,370 |
| Leaf Group Ltd. * | 5,920 | 49,432 |
| Leidos Holdings, Inc. | 37,900 | 1,995,814 |
| Liquidity Services, Inc. * | 15,481 | 120,752 |
| LivePerson, Inc. * | 19,700 | 138,885 |
| LogMeIn, Inc. | 13,477 | 1,522,901 |
| Manhattan Associates, Inc. * | 16,300 | 761,047 |
| ManTech International Corp., Class A | 8,600 | 305,300 |
| MasterCard, Inc., Class A | 218,356 | 25,399,170 |
| MAXIMUS, Inc. | 16,300 | 994,137 |
| Microsoft Corp. | 1,801,718 | 123,345,614 |
| MicroStrategy, Inc., Class A * | 2,256 | 429,024 |
| Mitek Systems, Inc. * | 34,300 | 300,125 |
| MoneyGram International, Inc. * | 9,037 | 160,949 |
| Monotype Imaging Holdings, Inc. | 6,500 | 132,275 |
| NeuStar, Inc., Class A * | 20,100 | 667,320 |
| New Relic, Inc. * | 7,000 | 279,860 |
| NIC, Inc. | 26,000 | 555,100 |
| Nuance Communications, Inc. * | 59,974 | 1,072,935 |
| Oracle Corp. | 697,513 | 31,360,184 |
| Pandora Media, Inc. * | 55,300 | 600,005 |
| Paychex, Inc. | 73,664 | 4,366,802 |
| Paycom Software, Inc. * | 10,700 | 644,675 |
| Paylocity Holding Corp. * | 8,900 | 351,016 |
| PayPal Holdings, Inc. * | 261,944 | 12,499,968 |
| Pegasystems, Inc. | 12,800 | 583,040 |
| Perficient, Inc. * | 7,800 | 135,876 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| PRGX Global, Inc. * | 11,000 | 72,050 |
| Progress Software Corp. | 9,300 | 276,396 |
| Proofpoint, Inc. * | 9,000 | 678,330 |
| PROS Holdings, Inc. * | 7,826 | 192,911 |
| PTC, Inc. * | 29,380 | 1,587,989 |
| Qualys, Inc. * | 5,600 | 215,040 |
| Quotient Technology, Inc. * | 18,100 | 197,290 |
| RealPage, Inc. * | 12,600 | 466,830 |
| Red Hat, Inc. * | 43,564 | 3,837,117 |
| Reis, Inc. | 1,400 | 26,320 |
| Rightside Group Ltd. * | 5,920 | 59,437 |
| RingCentral, Inc., Class A * | 24,600 | 785,970 |
| Sabre Corp. | 43,200 | 1,011,312 |
| salesforce.com, Inc. * | 154,322 | 13,290,211 |
| Science Applications International Corp. | 11,785 | 860,187 |
| ServiceNow, Inc. * | 38,800 | 3,665,824 |
| ServiceSource International, Inc. * | 14,400 | 54,144 |
| Shutterstock, Inc. * | 4,000 | 172,920 |
| Splunk, Inc. * | 32,500 | 2,090,075 |
| SPS Commerce, Inc. * | 4,300 | 237,618 |
| SS&C Technologies Holdings, Inc. | 42,400 | 1,557,776 |
| Stamps.com, Inc. * | 5,827 | 618,536 |
| StarTek, Inc. * | 3,900 | 35,412 |
| Sykes Enterprises, Inc. * | 11,026 | 328,685 |
| Symantec Corp. | 139,573 | 4,414,694 |
| Synchronoss Technologies, Inc. * | 8,100 | 129,600 |
| Synopsys, Inc. * | 37,884 | 2,792,051 |
| Syntel, Inc. | 8,600 | 151,446 |
| Tableau Software, Inc., Class A * | 17,742 | 952,391 |
| Take-Two Interactive Software, Inc. * | 22,600 | 1,420,410 |
| TeleTech Holdings, Inc. | 9,100 | 284,375 |
| Teradata Corp. * | 27,000 | 787,860 |
| The Hackett Group, Inc. | 7,200 | 142,776 |
| The Ultimate Software Group, Inc. * | 6,600 | 1,337,622 |
| The Western Union Co. | 102,032 | 2,026,356 |
| TiVo Corp. | 36,770 | 726,207 |
| Total System Services, Inc. | 36,904 | 2,114,968 |
| Travelport Worldwide Ltd. | 42,100 | 554,457 |
| Twitter, Inc. * | 136,400 | 2,247,872 |
| Tyler Technologies, Inc. * | 8,600 | 1,406,874 |
| Unisys Corp. * | 18,200 | 205,660 |
| Vantiv, Inc., Class A * | 34,600 | 2,146,584 |
| VASCO Data Security International, Inc. * | 9,200 | 124,200 |
| Verint Systems, Inc. * | 16,210 | 637,053 |
| VeriSign, Inc. * | 22,275 | 1,980,693 |
| Virtusa Corp. * | 4,700 | 145,606 |
| Visa, Inc., Class A | 431,504 | 39,361,795 |
| VMware, Inc., Class A *(b) | 17,100 | 1,609,452 |
| Web.com Group, Inc. * | 18,523 | 357,494 |
| WebMD Health Corp. * | 7,074 | 383,623 |
| WEX, Inc. * | 8,900 | 902,994 |
| Workday, Inc., Class A * | 26,604 | 2,325,190 |
| Yahoo! Inc. * | 205,444 | 9,904,455 |
| Yelp, Inc. * | 14,300 | 506,363 |
| Zendesk, Inc. * | 27,000 | 776,250 |
| Zillow Group, Inc., Class A * | 8,797 | 338,597 |
| Zillow Group, Inc., Class C * | 26,594 | 1,037,166 |
| Zynga, Inc., Class A * | 212,600 | 614,414 |
| | | 740,437,190 |
| |
| Technology Hardware & Equipment 5.5% |
| 3D Systems Corp. *(b) | 18,800 | 297,604 |
| Acacia Communications, Inc. *(b) | 3,100 | 142,104 |
| ADTRAN, Inc. | 22,200 | 444,000 |
| Agilysys, Inc. * | 8,460 | 83,754 |
| Amphenol Corp., Class A | 67,700 | 4,895,387 |
| Anixter International, Inc. * | 8,200 | 668,710 |
| Security | Number
of Shares | Value ($) |
| Apple, Inc. | 1,224,362 | 175,879,601 |
| Arista Networks, Inc. * | 8,600 | 1,200,904 |
| ARRIS International plc * | 43,075 | 1,119,519 |
| Arrow Electronics, Inc. * | 18,532 | 1,306,506 |
| Avnet, Inc. | 26,588 | 1,028,690 |
| AVX Corp. | 14,000 | 236,740 |
| Badger Meter, Inc. | 8,000 | 318,000 |
| Belden, Inc. | 11,600 | 808,520 |
| Benchmark Electronics, Inc. * | 7,830 | 248,211 |
| Black Box Corp. | 4,100 | 40,590 |
| Brocade Communications Systems, Inc. | 87,737 | 1,102,854 |
| CalAmp Corp. * | 4,000 | 71,760 |
| CDW Corp. | 35,900 | 2,121,331 |
| Ciena Corp. * | 34,970 | 801,163 |
| Cisco Systems, Inc. | 1,162,640 | 39,611,145 |
| Cognex Corp. | 21,500 | 1,834,810 |
| Coherent, Inc. * | 5,500 | 1,185,800 |
| CommScope Holding Co., Inc. * | 47,382 | 1,991,939 |
| Communications Systems, Inc. | 53,328 | 229,844 |
| Comtech Telecommunications Corp. | 4,175 | 58,492 |
| Corning, Inc. | 217,007 | 6,260,652 |
| Cray, Inc. * | 7,600 | 136,040 |
| CTS Corp. | 8,800 | 194,480 |
| CUI Global, Inc. *(b) | 56,600 | 249,606 |
| Daktronics, Inc. | 8,700 | 82,302 |
| Diebold Nixdorf, Inc. | 23,500 | 662,700 |
| Digi International, Inc. * | 9,100 | 112,840 |
| Dolby Laboratories, Inc., Class A | 18,600 | 980,778 |
| EchoStar Corp., Class A * | 11,940 | 687,266 |
| Electro Scientific Industries, Inc. * | 9,900 | 69,102 |
| Electronics For Imaging, Inc. * | 15,500 | 709,590 |
| Extreme Networks, Inc. * | 27,500 | 214,912 |
| F5 Networks, Inc. * | 15,100 | 1,949,863 |
| Fabrinet * | 11,108 | 385,114 |
| FARO Technologies, Inc. * | 3,000 | 109,950 |
| Finisar Corp. * | 25,800 | 589,272 |
| Fitbit, Inc., Class A * | 39,300 | 224,796 |
| FLIR Systems, Inc. | 38,000 | 1,395,740 |
| Harmonic, Inc. * | 20,042 | 116,244 |
| Harris Corp. | 28,655 | 3,206,208 |
| Hewlett Packard Enterprise Co. | 389,936 | 7,264,508 |
| HP, Inc. | 404,136 | 7,605,840 |
| I.D. Systems, Inc. * | 5,500 | 36,135 |
| II-VI, Inc. * | 13,000 | 430,950 |
| Immersion Corp. * | 4,300 | 37,711 |
| Infinera Corp. * | 27,300 | 270,816 |
| Insight Enterprises, Inc. * | 8,950 | 376,795 |
| InterDigital, Inc. | 10,000 | 899,000 |
| InvenSense, Inc. * | 42,200 | 542,692 |
| IPG Photonics Corp. * | 9,800 | 1,237,936 |
| Itron, Inc. * | 5,700 | 369,645 |
| Jabil Circuit, Inc. | 35,300 | 1,024,406 |
| Juniper Networks, Inc. | 85,665 | 2,575,947 |
| Keysight Technologies, Inc. * | 44,058 | 1,649,091 |
| Kimball Electronics, Inc. * | 6,825 | 117,731 |
| Knowles Corp. * | 13,900 | 246,447 |
| Littelfuse, Inc. | 5,300 | 816,995 |
| Lumentum Holdings, Inc. * | 13,510 | 577,552 |
| Maxwell Technologies, Inc. * | 7,700 | 46,970 |
| Methode Electronics, Inc. | 9,500 | 423,225 |
| MOCON, Inc. | 600 | 17,910 |
| Motorola Solutions, Inc. | 37,933 | 3,261,100 |
| MTS Systems Corp. | 3,781 | 175,627 |
| National Instruments Corp. | 26,112 | 911,570 |
| NCR Corp. * | 35,100 | 1,447,875 |
| Neonode, Inc. *(b) | 31,951 | 53,997 |
| NetApp, Inc. | 64,900 | 2,586,265 |
| NETGEAR, Inc. * | 6,000 | 282,900 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| NetScout Systems, Inc. * | 26,000 | 978,900 |
| Oclaro, Inc. *(b) | 37,600 | 301,176 |
| OSI Systems, Inc. * | 7,500 | 580,500 |
| Palo Alto Networks, Inc. * | 22,000 | 2,385,020 |
| Park Electrochemical Corp. | 3,600 | 62,352 |
| PC Connection, Inc. | 7,000 | 201,180 |
| PC-Tel, Inc. | 8,900 | 68,886 |
| Plantronics, Inc. | 6,000 | 327,600 |
| Plexus Corp. * | 6,500 | 337,935 |
| Pure Storage, Inc., Class A * | 23,900 | 253,579 |
| Quantum Corp. * | 15,625 | 123,906 |
| Radisys Corp. * | 3,500 | 14,035 |
| Richardson Electronics Ltd. | 7,300 | 43,654 |
| Rogers Corp. * | 4,200 | 432,348 |
| Sanmina Corp. * | 20,900 | 778,525 |
| ScanSource, Inc. * | 6,300 | 248,850 |
| Seagate Technology plc | 72,766 | 3,065,632 |
| Sonus Networks, Inc. * | 10,860 | 83,405 |
| Super Micro Computer, Inc. * | 8,200 | 200,080 |
| SYNNEX Corp. | 8,400 | 910,812 |
| Systemax, Inc. | 8,000 | 105,920 |
| TE Connectivity Ltd. | 84,600 | 6,545,502 |
| Tech Data Corp. * | 8,300 | 793,895 |
| TESSCO Technologies, Inc. | 4,025 | 56,350 |
| Trimble, Inc. * | 62,084 | 2,199,636 |
| TTM Technologies, Inc. * | 11,000 | 184,030 |
| Ubiquiti Networks, Inc. * | 7,700 | 396,704 |
| Uni-Pixel, Inc. * | 161,500 | 74,936 |
| Universal Display Corp. | 10,100 | 902,435 |
| VeriFone Systems, Inc. * | 33,100 | 613,674 |
| ViaSat, Inc. * | 10,700 | 685,121 |
| Viavi Solutions, Inc. * | 37,553 | 375,530 |
| Vishay Intertechnology, Inc. | 36,488 | 596,579 |
| Vishay Precision Group, Inc. * | 5,620 | 96,664 |
| Western Digital Corp. | 64,998 | 5,789,372 |
| Xerox Corp. | 194,056 | 1,395,263 |
| Zebra Technologies Corp., Class A * | 13,275 | 1,251,434 |
| | | 324,814,489 |
| |
| Telecommunication Services 2.0% |
| AT&T, Inc. | 1,436,907 | 56,944,624 |
| ATN International, Inc. | 3,250 | 224,868 |
| CenturyLink, Inc. | 123,078 | 3,159,412 |
| Cincinnati Bell, Inc. * | 12,293 | 231,723 |
| Cogent Communications Holdings, Inc. | 9,900 | 445,500 |
| Consolidated Communications Holdings, Inc. (b) | 16,757 | 396,638 |
| Frontier Communications Corp. (b) | 257,368 | 483,852 |
| General Communication, Inc., Class A * | 10,500 | 393,120 |
| Iridium Communications, Inc. * | 17,544 | 185,966 |
| Level 3 Communications, Inc. * | 69,225 | 4,206,111 |
| Lumos Networks Corp. * | 1,500 | 26,865 |
| Shenandoah Telecommunications Co. | 14,200 | 454,400 |
| Spok Holdings, Inc. | 5,500 | 98,725 |
| Sprint Corp. * | 179,505 | 1,620,930 |
| Straight Path Communications, Inc., Class B * | 1,900 | 244,834 |
| T-Mobile US, Inc. * | 62,895 | 4,230,947 |
| Telephone & Data Systems, Inc. | 22,222 | 610,216 |
| United States Cellular Corp. * | 5,400 | 211,572 |
| Verizon Communications, Inc. | 957,069 | 43,939,038 |
| Vonage Holdings Corp. * | 36,400 | 244,244 |
| Windstream Holdings, Inc. | 32,157 | 177,507 |
| Zayo Group Holdings, Inc. * | 21,207 | 743,730 |
| | | 119,274,822 |
| |
| Security | Number
of Shares | Value ($) |
| Transportation 2.1% |
| Alaska Air Group, Inc. | 29,681 | 2,525,556 |
| Allegiant Travel Co. | 3,200 | 465,280 |
| AMERCO | 1,000 | 374,460 |
| American Airlines Group, Inc. | 114,597 | 4,884,124 |
| ArcBest Corp. | 4,800 | 126,960 |
| Atlas Air Worldwide Holdings, Inc. * | 6,500 | 377,000 |
| Avis Budget Group, Inc. * | 20,600 | 628,300 |
| C.H. Robinson Worldwide, Inc. | 33,200 | 2,413,640 |
| Celadon Group, Inc. | 8,890 | 35,116 |
| Covenant Transport Group, Inc., Class A * | 3,000 | 56,190 |
| CSX Corp. | 216,300 | 10,996,692 |
| Delta Air Lines, Inc. | 173,311 | 7,875,252 |
| Expeditors International of Washington, Inc. | 40,900 | 2,294,081 |
| FedEx Corp. | 55,763 | 10,578,241 |
| Forward Air Corp. | 4,600 | 244,582 |
| Genesee & Wyoming, Inc., Class A * | 14,800 | 1,002,848 |
| Hawaiian Holdings, Inc. * | 10,700 | 581,010 |
| Heartland Express, Inc. | 16,241 | 326,769 |
| Hertz Global Holdings, Inc. * | 7,460 | 123,015 |
| Hub Group, Inc., Class A * | 7,100 | 277,965 |
| JB Hunt Transport Services, Inc. | 19,600 | 1,757,336 |
| JetBlue Airways Corp. * | 70,599 | 1,541,176 |
| Kansas City Southern | 26,555 | 2,391,809 |
| Kirby Corp. * | 15,000 | 1,059,000 |
| Knight Transportation, Inc. | 14,650 | 502,495 |
| Landstar System, Inc. | 9,700 | 828,865 |
| Macquarie Infrastructure Corp. | 18,600 | 1,513,482 |
| Marten Transport Ltd. | 9,476 | 235,005 |
| Matson, Inc. | 10,500 | 332,850 |
| Norfolk Southern Corp. | 69,100 | 8,118,559 |
| Old Dominion Freight Line, Inc. | 15,102 | 1,336,829 |
| Park-Ohio Holdings Corp. | 3,600 | 141,660 |
| Roadrunner Transportation Systems, Inc. * | 4,900 | 32,928 |
| Ryder System, Inc. | 15,560 | 1,056,680 |
| Saia, Inc. * | 4,450 | 214,267 |
| SkyWest, Inc. | 14,300 | 531,960 |
| Southwest Airlines Co. | 146,115 | 8,214,585 |
| Spirit Airlines, Inc. * | 14,000 | 801,780 |
| Swift Transportation Co. * | 19,000 | 467,020 |
| Union Pacific Corp. | 190,270 | 21,302,629 |
| United Continental Holdings, Inc. * | 66,766 | 4,687,641 |
| United Parcel Service, Inc., Class B | 161,541 | 17,359,196 |
| Universal Logistics Holdings, Inc. | 3,300 | 46,035 |
| Werner Enterprises, Inc. | 10,032 | 273,874 |
| XPO Logistics, Inc. * | 22,010 | 1,087,074 |
| YRC Worldwide, Inc. * | 8,600 | 91,676 |
| | | 122,113,492 |
| |
| Utilities 3.2% |
| AES Corp. | 138,596 | 1,567,521 |
| ALLETE, Inc. | 14,633 | 1,022,993 |
| Alliant Energy Corp. | 52,600 | 2,068,232 |
| Ameren Corp. | 54,476 | 2,979,292 |
| American Electric Power Co., Inc. | 112,120 | 7,605,100 |
| American States Water Co. | 9,600 | 427,392 |
| American Water Works Co., Inc. | 42,400 | 3,381,824 |
| Aqua America, Inc. | 45,967 | 1,521,048 |
| Artesian Resources Corp., Class A | 4,000 | 153,640 |
| Atmos Energy Corp. | 22,672 | 1,836,885 |
| Avangrid, Inc. | 16,400 | 713,400 |
| Avista Corp. | 15,800 | 637,372 |
| Black Hills Corp. | 13,400 | 911,468 |
| Cadiz, Inc. * | 6,356 | 95,976 |
| California Water Service Group | 11,300 | 403,410 |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Calpine Corp. * | 65,100 | 664,020 |
| CenterPoint Energy, Inc. | 104,900 | 2,992,797 |
| Chesapeake Utilities Corp. | 2,770 | 203,041 |
| CMS Energy Corp. | 70,959 | 3,221,539 |
| Connecticut Water Service, Inc. | 5,100 | 273,717 |
| Consolidated Edison, Inc. | 71,510 | 5,669,313 |
| Delta Natural Gas Co., Inc. | 1,291 | 39,117 |
| Dominion Resources, Inc. | 144,154 | 11,161,844 |
| DTE Energy Co. | 40,348 | 4,219,997 |
| Duke Energy Corp. | 164,950 | 13,608,375 |
| Dynegy, Inc. * | 27,300 | 175,266 |
| Edison International | 78,210 | 6,254,454 |
| El Paso Electric Co. | 11,300 | 583,080 |
| Entergy Corp. | 37,993 | 2,897,346 |
| Eversource Energy | 73,136 | 4,344,278 |
| Exelon Corp. | 212,569 | 7,361,264 |
| FirstEnergy Corp. | 104,456 | 3,127,413 |
| Genie Energy Ltd., Class B | 12,800 | 101,760 |
| Great Plains Energy, Inc. | 41,341 | 1,223,280 |
| Hawaiian Electric Industries, Inc. | 27,100 | 908,392 |
| IDACORP, Inc. | 13,300 | 1,124,116 |
| MDU Resources Group, Inc. | 45,325 | 1,219,243 |
| MGE Energy, Inc. | 9,950 | 639,785 |
| Middlesex Water Co. | 9,400 | 358,328 |
| National Fuel Gas Co. | 20,700 | 1,146,366 |
| New Jersey Resources Corp. | 20,150 | 813,053 |
| NextEra Energy, Inc. | 108,672 | 14,514,232 |
| NiSource, Inc. | 65,764 | 1,594,777 |
| Northwest Natural Gas Co. | 6,300 | 375,480 |
| NorthWestern Corp. | 10,900 | 651,602 |
| NRG Energy, Inc. | 63,356 | 1,070,716 |
| NRG Yield, Inc., Class A | 8,300 | 143,922 |
| NRG Yield, Inc., Class C | 30,600 | 541,620 |
| OGE Energy Corp. | 41,200 | 1,432,936 |
| ONE Gas, Inc. | 8,525 | 586,776 |
| Ormat Technologies, Inc. | 8,600 | 507,916 |
| Otter Tail Corp. | 7,800 | 308,100 |
| Pattern Energy Group, Inc. | 14,497 | 319,224 |
| PG&E Corp. | 116,600 | 7,818,030 |
| Pinnacle West Capital Corp. | 28,000 | 2,382,520 |
| PNM Resources, Inc. | 21,200 | 789,700 |
| Portland General Electric Co. | 24,800 | 1,124,432 |
| PPL Corp. | 159,200 | 6,067,112 |
| Public Service Enterprise Group, Inc. | 121,300 | 5,343,265 |
| Pure Cycle Corp. * | 8,000 | 55,600 |
| SCANA Corp. | 31,005 | 2,055,942 |
| Sempra Energy | 56,096 | 6,339,970 |
| SJW Group. | 4,470 | 218,315 |
| South Jersey Industries, Inc. | 19,400 | 727,888 |
| Southwest Gas Holdings, Inc. | 13,400 | 1,122,384 |
| Spire, Inc. | 10,800 | 740,340 |
| TerraForm Power, Inc., Class A * | 9,400 | 118,346 |
| The Southern Co. | 231,773 | 11,542,295 |
| The York Water Co. | 6,100 | 228,750 |
| UGI Corp. | 36,400 | 1,825,824 |
| Unitil Corp. | 7,200 | 348,696 |
| Vectren Corp. | 23,366 | 1,388,408 |
| WEC Energy Group, Inc. | 74,077 | 4,483,140 |
| Westar Energy, Inc. | 33,000 | 1,716,990 |
| WGL Holdings, Inc. | 10,700 | 882,322 |
| Xcel Energy, Inc. | 123,508 | 5,564,035 |
| | | 184,588,342 |
| Total Common Stock |
| (Cost $3,472,334,120) | | 5,824,673,305 |
|
| Security | Number
of Shares | Value ($) |
| Rights 0.0% of net assets |
| |
| Media 0.0% |
| Media General, Inc. CVR *(e) | 18,400 | 31,280 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Dyax Corp. CVR *(e) | 31,000 | 34,410 |
| FRD Acquisition Co. CVR *(e) | 8,700 | — |
| | | 34,410 |
| |
| Technology Hardware & Equipment 0.0% |
| Gerber Scientific, Inc. CVR *(e) | 8,900 | — |
| Total Rights |
| (Cost $34,633) | | 65,690 |
|
| Other Investment Company 0.4% of net assets |
| |
| Securities Lending Collateral 0.4% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (c) | 22,506,953 | 22,506,953 |
| Total Other Investment Company |
| (Cost $22,506,953) | | 22,506,953 |
Security
Rate, Maturity Date | Face
Amount ($) | Value ($) |
| Short-Term Investment 0.2% of net assets |
| |
| Time Deposit 0.2% |
| Barclays Capital, Inc. |
| 0.42%, 05/01/17 (d) | 11,400,000 | 11,400,000 |
| Total Short-Term Investment |
| (Cost $11,400,000) | | 11,400,000 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $3,542,250,210 and the unrealized appreciation and depreciation were $2,421,357,911 and ($104,962,173), respectively, with a net unrealized appreciation of $2,316,395,738.
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund's investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $21,538,581. |
| (c) | The rate shown is the 7-day yield. |
| (d) | The rate shown is the current daily overnight rate. |
| (e) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| CVR — | Contingent Value Rights |
| REIT — | Real Estate Investment Trust |
Schwab Equity Index Funds | Semiannual Report
Schwab Total Stock Market Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| Russell 2000 Index, mini, Long, expires 06/16/17 | 40 | 2,796,800 | 42,209 |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 135 | 16,068,375 | 192,159 |
| Net Unrealized Appreciation | 234,368 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.6% | Common Stock | 2,717,668,950 | 3,311,221,395 |
| 0.6% | Preferred Stock | 18,339,785 | 20,066,159 |
| 0.0% | Rights | 151,087 | 121,959 |
| 0.6% | Other Investment Company | 22,103,193 | 22,103,193 |
| 1.1% | Short-Term Investments | 39,047,407 | 39,047,407 |
| 99.9% | Total Investments | 2,797,310,422 | 3,392,560,113 |
| 0.1% | Other Assets and Liabilities, Net | | 1,777,965 |
| 100.0% | Net Assets | | 3,394,338,078 |
| Security | Number
of Shares | Value ($) |
| Common Stock 97.6% of net assets |
| |
| Australia 7.2% |
| Banks 2.6% |
| Australia & New Zealand Banking Group Ltd. | 733,288 | 17,950,141 |
| Bank of Queensland Ltd. | 89,063 | 796,857 |
| Bendigo & Adelaide Bank Ltd. | 117,885 | 1,084,860 |
| Commonwealth Bank of Australia | 431,753 | 28,199,475 |
| National Australia Bank Ltd. | 665,884 | 16,901,559 |
| Westpac Banking Corp. | 839,116 | 21,997,222 |
| | | 86,930,114 |
| Capital Goods 0.0% |
| CIMIC Group Ltd. | 26,359 | 730,483 |
| Commercial & Professional Services 0.1% |
| Brambles Ltd. | 392,318 | 3,035,790 |
| SEEK Ltd. | 87,652 | 1,116,526 |
| | | 4,152,316 |
| Consumer Services 0.2% |
| Aristocrat Leisure Ltd. | 139,618 | 2,051,780 |
| Crown Resorts Ltd. | 86,330 | 807,214 |
| Domino's Pizza Enterprises Ltd. | 14,586 | 667,017 |
| Flight Centre Travel Group Ltd. | 11,202 | 263,490 |
| Tabcorp Holdings Ltd. | 197,467 | 701,556 |
| Tatts Group Ltd. | 359,783 | 1,157,430 |
| | | 5,648,487 |
| Diversified Financials 0.3% |
| AMP Ltd. | 751,244 | 3,009,989 |
| ASX Ltd. | 47,112 | 1,786,002 |
| Challenger Ltd. | 134,444 | 1,327,889 |
| Macquarie Group Ltd. | 77,669 | 5,395,418 |
| | | 11,519,298 |
| Energy 0.3% |
| Caltex Australia Ltd. | 64,807 | 1,446,575 |
| Oil Search Ltd. | 349,709 | 1,887,008 |
| Origin Energy Ltd. * | 452,042 | 2,432,563 |
| Santos Ltd. * | 445,659 | 1,156,975 |
| Woodside Petroleum Ltd. | 191,493 | 4,609,518 |
| | | 11,532,639 |
| Security | Number
of Shares | Value ($) |
| Food & Staples Retailing 0.5% |
| Wesfarmers Ltd. | 282,940 | 9,107,711 |
| Woolworths Ltd. | 318,979 | 6,412,007 |
| | | 15,519,718 |
| Food, Beverage & Tobacco 0.1% |
| Coca-Cola Amatil Ltd. | 149,082 | 1,044,828 |
| Treasury Wine Estates Ltd. | 179,536 | 1,611,938 |
| | | 2,656,766 |
| Health Care Equipment & Services 0.2% |
| Cochlear Ltd. | 13,562 | 1,419,675 |
| Healthscope Ltd. | 411,020 | 678,815 |
| Ramsay Health Care Ltd. | 33,875 | 1,816,448 |
| Sonic Healthcare Ltd. | 96,015 | 1,587,259 |
| | | 5,502,197 |
| Insurance 0.3% |
| Insurance Australia Group Ltd. | 597,474 | 2,773,402 |
| Medibank Pvt Ltd. | 707,986 | 1,541,258 |
| QBE Insurance Group Ltd. | 339,813 | 3,264,845 |
| Suncorp Group Ltd. | 325,817 | 3,358,730 |
| | | 10,938,235 |
| Materials 1.1% |
| Alumina Ltd. | 652,303 | 895,460 |
| Amcor Ltd. | 289,149 | 3,399,893 |
| BHP Billiton Ltd. | 801,347 | 14,267,129 |
| Boral Ltd. | 290,039 | 1,336,948 |
| Fortescue Metals Group Ltd. | 384,488 | 1,523,976 |
| Incitec Pivot Ltd. | 440,834 | 1,248,950 |
| James Hardie Industries plc CDI | 108,813 | 1,841,154 |
| Newcrest Mining Ltd. | 194,698 | 3,123,604 |
| Orica Ltd. | 96,446 | 1,336,213 |
| Rio Tinto Ltd. | 107,310 | 4,858,105 |
| South32 Ltd. | 1,361,508 | 2,821,448 |
| | | 36,652,880 |
| Media 0.0% |
| REA Group Ltd. | 11,834 | 543,469 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.3% |
| CSL Ltd. | 114,138 | 11,317,930 |
| Real Estate 0.6% |
| Dexus Property Group | 239,107 | 1,825,807 |
| Goodman Group | 454,420 | 2,759,102 |
| LendLease Group | 136,065 | 1,633,549 |
| Mirvac Group | 951,910 | 1,616,820 |
| Scentre Group | 1,341,771 | 4,329,226 |
| Stockland | 608,687 | 2,209,135 |
| The GPT Group | 438,599 | 1,722,851 |
| Vicinity Centres | 803,376 | 1,731,611 |
| Westfield Corp. | 484,604 | 3,295,536 |
| | | 21,123,637 |
| Retailing 0.0% |
| Harvey Norman Holdings Ltd. | 132,814 | 416,590 |
| Software & Services 0.0% |
| Computershare Ltd. | 115,712 | 1,275,616 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Telecommunication Services 0.1% |
| Telstra Corp., Ltd. | 1,053,996 | 3,330,173 |
| TPG Telecom Ltd. | 90,804 | 400,640 |
| Vocus Group Ltd. | 147,415 | 371,627 |
| | | 4,102,440 |
| Transportation 0.3% |
| Aurizon Holdings Ltd. | 498,416 | 1,921,967 |
| Qantas Airways Ltd. | 144,571 | 458,271 |
| Sydney Airport | 283,449 | 1,463,980 |
| Transurban Group | 502,152 | 4,587,606 |
| | | 8,431,824 |
| Utilities 0.2% |
| AGL Energy Ltd. | 167,663 | 3,356,754 |
| APA Group | 287,747 | 1,973,394 |
| AusNet Services | 407,266 | 533,380 |
| DUET Group | 616,563 | 1,393,224 |
| | | 7,256,752 |
| | | 246,251,391 |
| |
| Austria 0.2% |
| Banks 0.1% |
| Erste Group Bank AG * | 77,403 | 2,771,322 |
| Raiffeisen Bank International AG * | 31,357 | 714,821 |
| | | 3,486,143 |
| Capital Goods 0.0% |
| ANDRITZ AG | 19,563 | 1,080,995 |
| Energy 0.1% |
| OMV AG | 34,514 | 1,589,753 |
| Materials 0.0% |
| voestalpine AG | 29,000 | 1,208,991 |
| | | 7,365,882 |
| |
| Belgium 1.1% |
| Banks 0.1% |
| KBC Group N.V. | 61,980 | 4,479,100 |
| Diversified Financials 0.1% |
| Groupe Bruxelles Lambert S.A. | 21,293 | 2,042,387 |
| Food & Staples Retailing 0.0% |
| Colruyt S.A. | 17,161 | 881,837 |
| Food, Beverage & Tobacco 0.6% |
| Anheuser-Busch InBev S.A./N.V. | 190,619 | 21,496,167 |
| Insurance 0.1% |
| Ageas | 48,027 | 1,966,505 |
| Materials 0.1% |
| Solvay S.A. | 17,808 | 2,265,018 |
| Umicore S.A. | 25,057 | 1,468,018 |
| | | 3,733,036 |
| Media 0.0% |
| Telenet Group Holding N.V. * | 12,101 | 735,266 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| UCB S.A. | 32,863 | 2,564,923 |
| Telecommunication Services 0.0% |
| Proximus (a) | 39,640 | 1,212,347 |
| | | 39,111,568 |
| |
| Denmark 1.7% |
| Banks 0.2% |
| Danske Bank A/S | 172,155 | 6,259,302 |
| Capital Goods 0.1% |
| Vestas Wind Systems A/S | 54,860 | 4,720,513 |
| Security | Number
of Shares | Value ($) |
| Commercial & Professional Services 0.1% |
| ISS A/S | 40,953 | 1,698,740 |
| Consumer Durables & Apparel 0.1% |
| Pandora A/S | 27,457 | 2,966,184 |
| Food, Beverage & Tobacco 0.1% |
| Carlsberg A/S, Class B | 27,173 | 2,711,390 |
| Health Care Equipment & Services 0.1% |
| Coloplast A/S, Class B | 28,914 | 2,475,784 |
| William Demant Holding A/S * | 32,260 | 738,357 |
| | | 3,214,141 |
| Insurance 0.0% |
| Tryg A/S | 28,614 | 549,010 |
| Materials 0.1% |
| Chr. Hansen Holding A/S | 25,970 | 1,749,702 |
| Novozymes A/S, B Shares | 59,155 | 2,553,905 |
| | | 4,303,607 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.6% |
| Genmab A/S * | 14,469 | 2,878,965 |
| Novo Nordisk A/S, Class B | 479,312 | 18,662,902 |
| | | 21,541,867 |
| Telecommunication Services 0.0% |
| TDC A/S | 207,416 | 1,112,676 |
| Transportation 0.2% |
| AP Moeller - Maersk A/S, Series A | 924 | 1,532,909 |
| AP Moeller - Maersk A/S, Series B | 1,602 | 2,763,504 |
| DSV A/S | 48,692 | 2,711,436 |
| | | 7,007,849 |
| Utilities 0.1% |
| DONG Energy A/S | 35,950 | 1,415,602 |
| | | 57,500,881 |
| |
| Finland 1.0% |
| Automobiles & Components 0.0% |
| Nokian Renkaat Oyj | 30,079 | 1,292,819 |
| Capital Goods 0.2% |
| Kone Oyj, Class B | 83,581 | 3,825,701 |
| Metso Oyj | 30,201 | 1,081,617 |
| Wartsila Oyj Abp | 36,379 | 2,212,369 |
| | | 7,119,687 |
| Energy 0.0% |
| Neste Oyj (a) | 30,786 | 1,254,504 |
| Insurance 0.2% |
| Sampo Oyj, A Shares | 110,633 | 5,294,628 |
| Materials 0.2% |
| Stora Enso Oyj, R Shares | 141,926 | 1,684,362 |
| UPM-Kymmene Oyj | 135,953 | 3,581,909 |
| | | 5,266,271 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Orion Oyj, Class B | 26,910 | 1,542,200 |
| Technology Hardware & Equipment 0.3% |
| Nokia Oyj | 1,469,797 | 8,402,600 |
| Telecommunication Services 0.0% |
| Elisa Oyj | 33,232 | 1,130,119 |
| Utilities 0.1% |
| Fortum Oyj | 110,652 | 1,608,908 |
| | | 32,911,736 |
| |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| France 10.3% |
| Automobiles & Components 0.5% |
| Compagnie Generale des Etablissements Michelin | 46,156 | 6,037,253 |
| Peugeot S.A. * | 120,418 | 2,524,636 |
| Renault S.A. | 48,550 | 4,527,342 |
| Valeo S.A. | 59,684 | 4,294,865 |
| | | 17,384,096 |
| Banks 1.0% |
| BNP Paribas S.A. | 265,883 | 18,765,273 |
| Credit Agricole S.A. | 273,880 | 4,073,645 |
| Natixis S.A. | 235,018 | 1,635,534 |
| Societe Generale S.A. | 191,590 | 10,505,390 |
| | | 34,979,842 |
| Capital Goods 1.8% |
| Airbus SE | 143,778 | 11,630,576 |
| Alstom S.A. * | 37,761 | 1,198,548 |
| Bouygues S.A. | 52,322 | 2,199,296 |
| Compagnie de Saint-Gobain | 126,754 | 6,839,244 |
| Dassault Aviation S.A. | 607 | 829,492 |
| Eiffage S.A. | 15,867 | 1,344,012 |
| Legrand S.A. | 66,194 | 4,284,799 |
| Rexel S.A. | 77,313 | 1,380,681 |
| Safran S.A. | 78,838 | 6,527,378 |
| Schneider Electric SE | 140,229 | 11,106,936 |
| Thales S.A. | 26,755 | 2,812,122 |
| Vinci S.A. | 126,408 | 10,774,828 |
| Zodiac Aerospace | 52,992 | 1,286,408 |
| | | 62,214,320 |
| Commercial & Professional Services 0.1% |
| Bureau Veritas S.A. | 67,071 | 1,554,059 |
| Edenred | 55,957 | 1,433,431 |
| Societe BIC S.A. | 6,847 | 769,449 |
| | | 3,756,939 |
| Consumer Durables & Apparel 0.9% |
| Christian Dior SE | 13,691 | 3,754,953 |
| Hermes International | 6,714 | 3,209,760 |
| Kering | 19,055 | 5,906,251 |
| LVMH Moet Hennessy Louis Vuitton SE | 69,333 | 17,116,151 |
| SEB S.A. | 6,090 | 980,695 |
| | | 30,967,810 |
| Consumer Services 0.1% |
| Accor S.A. | 41,811 | 1,906,546 |
| Sodexo S.A. | 23,479 | 2,983,985 |
| | | 4,890,531 |
| Diversified Financials 0.1% |
| Eurazeo S.A. | 9,507 | 644,392 |
| Wendel S.A. | 7,561 | 1,059,905 |
| | | 1,704,297 |
| Energy 0.9% |
| TOTAL S.A. | 569,051 | 29,211,207 |
| Food & Staples Retailing 0.1% |
| Carrefour S.A. | 139,679 | 3,289,612 |
| Casino Guichard Perrachon S.A. | 13,859 | 834,652 |
| | | 4,124,264 |
| Food, Beverage & Tobacco 0.5% |
| Danone S.A. | 146,660 | 10,264,135 |
| Pernod-Ricard S.A. | 53,408 | 6,684,097 |
| Remy Cointreau S.A. | 5,148 | 519,313 |
| | | 17,467,545 |
| Security | Number
of Shares | Value ($) |
| Health Care Equipment & Services 0.2% |
| Essilor International S.A. | 51,817 | 6,715,117 |
| Household & Personal Products 0.4% |
| L'Oreal S.A. | 63,352 | 12,616,524 |
| Insurance 0.5% |
| AXA S.A. | 488,337 | 13,028,893 |
| CNP Assurances | 42,813 | 894,311 |
| SCOR SE | 39,088 | 1,546,202 |
| | | 15,469,406 |
| Materials 0.5% |
| Air Liquide S.A. | 96,950 | 11,681,136 |
| ArcelorMittal * | 457,643 | 3,596,315 |
| Arkema S.A. | 16,784 | 1,777,140 |
| Imerys S.A. | 8,347 | 718,101 |
| | | 17,772,692 |
| Media 0.4% |
| Eutelsat Communications S.A. | 42,441 | 1,004,132 |
| JCDecaux S.A. | 19,220 | 678,457 |
| Lagardere S.C.A. | 32,494 | 994,653 |
| Publicis Groupe S.A. | 47,259 | 3,411,913 |
| SES S.A. | 91,135 | 1,991,902 |
| Vivendi S.A. | 259,023 | 5,137,774 |
| | | 13,218,831 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.9% |
| Eurofins Scientific SE | 2,700 | 1,329,822 |
| Sanofi | 289,925 | 27,396,109 |
| | | 28,725,931 |
| Real Estate 0.3% |
| Fonciere Des Regions | 8,593 | 766,915 |
| Gecina S.A. | 10,487 | 1,491,549 |
| ICADE | 9,509 | 706,115 |
| Klepierre (a) | 53,561 | 2,102,263 |
| Unibail-Rodamco SE | 24,502 | 6,016,261 |
| | | 11,083,103 |
| Semiconductors & Semiconductor Equipment 0.1% |
| STMicroelectronics N.V. | 160,240 | 2,572,439 |
| Software & Services 0.3% |
| Atos SE | 22,145 | 2,900,668 |
| Capgemini S.A. | 40,684 | 4,073,361 |
| Dassault Systemes S.A. | 31,267 | 2,789,667 |
| | | 9,763,696 |
| Technology Hardware & Equipment 0.0% |
| Ingenico Group S.A. | 13,215 | 1,196,578 |
| Telecommunication Services 0.3% |
| Iliad S.A. | 6,876 | 1,668,969 |
| Orange S.A. | 500,086 | 7,739,999 |
| SFR Group S.A. * | 20,060 | 656,748 |
| | | 10,065,716 |
| Transportation 0.1% |
| Aeroports de Paris | 7,956 | 1,061,209 |
| Bollore S.A. | 202,640 | 824,528 |
| Groupe Eurotunnel SE | 113,376 | 1,245,515 |
| | | 3,131,252 |
| Utilities 0.3% |
| Electricite de France S.A. | 88,101 | 735,445 |
| Engie S.A. | 396,018 | 5,583,870 |
| Suez | 85,592 | 1,406,001 |
| Veolia Environnement S.A. (a) | 119,484 | 2,273,824 |
| | | 9,999,140 |
| | | 349,031,276 |
| |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Germany 8.8% |
| Automobiles & Components 1.0% |
| Bayerische Motoren Werke AG | 83,089 | 7,938,469 |
| Continental AG | 26,960 | 6,038,966 |
| Daimler AG | 241,363 | 17,984,991 |
| Volkswagen AG | 9,106 | 1,468,298 |
| | | 33,430,724 |
| Banks 0.1% |
| Commerzbank AG * | 259,072 | 2,539,823 |
| Capital Goods 1.0% |
| Brenntag AG | 38,160 | 2,262,191 |
| GEA Group AG | 46,234 | 1,965,516 |
| HOCHTIEF AG | 4,861 | 875,432 |
| MAN SE | 8,932 | 938,452 |
| OSRAM Licht AG | 22,359 | 1,497,816 |
| Siemens AG | 191,317 | 27,443,059 |
| | | 34,982,466 |
| Consumer Durables & Apparel 0.3% |
| adidas AG | 46,610 | 9,344,768 |
| Hugo Boss AG | 17,602 | 1,338,514 |
| | | 10,683,282 |
| Diversified Financials 0.4% |
| Deutsche Bank AG *(a) | 515,004 | 9,260,188 |
| Deutsche Boerse AG | 48,188 | 4,716,610 |
| | | 13,976,798 |
| Food & Staples Retailing 0.0% |
| METRO AG | 43,780 | 1,440,770 |
| Health Care Equipment & Services 0.4% |
| Fresenius Medical Care AG & Co. KGaA | 54,722 | 4,857,630 |
| Fresenius SE & Co. KGaA | 102,820 | 8,341,813 |
| | | 13,199,443 |
| Household & Personal Products 0.2% |
| Beiersdorf AG | 24,480 | 2,434,567 |
| Henkel AG & Co. KGaA | 24,790 | 2,891,772 |
| | | 5,326,339 |
| Insurance 0.9% |
| Allianz SE | 114,365 | 21,772,534 |
| Hannover Rueck SE | 15,006 | 1,800,182 |
| Muenchener Rueckversicherungs-Gesellschaft AG | 40,166 | 7,700,594 |
| | | 31,273,310 |
| Materials 1.3% |
| BASF SE | 229,281 | 22,336,310 |
| Covestro AG | 22,358 | 1,742,389 |
| Evonik Industries AG | 39,945 | 1,333,763 |
| HeidelbergCement AG | 36,540 | 3,382,779 |
| K&S AG (a) | 49,682 | 1,185,328 |
| LANXESS AG | 22,836 | 1,648,906 |
| Linde AG | 46,701 | 8,391,629 |
| Symrise AG | 29,749 | 2,082,679 |
| ThyssenKrupp AG | 88,924 | 2,119,107 |
| | | 44,222,890 |
| Media 0.1% |
| Axel Springer SE | 9,347 | 524,433 |
| ProSiebenSat.1 Media SE | 57,179 | 2,427,227 |
| RTL Group S.A. * | 8,951 | 693,746 |
| | | 3,645,406 |
| Security | Number
of Shares | Value ($) |
| Pharmaceuticals, Biotechnology & Life Sciences 0.9% |
| Bayer AG | 206,902 | 25,600,618 |
| Merck KGaA | 32,622 | 3,832,158 |
| QIAGEN N.V. * | 53,387 | 1,599,325 |
| | | 31,032,101 |
| Real Estate 0.2% |
| Deutsche Wohnen AG | 88,981 | 3,042,574 |
| Vonovia SE | 115,239 | 4,172,134 |
| | | 7,214,708 |
| Retailing 0.0% |
| Zalando SE * | 20,862 | 920,268 |
| Semiconductors & Semiconductor Equipment 0.2% |
| Infineon Technologies AG | 285,586 | 5,902,931 |
| Software & Services 0.8% |
| SAP SE | 245,789 | 24,619,690 |
| United Internet AG | 30,312 | 1,395,146 |
| | | 26,014,836 |
| Telecommunication Services 0.5% |
| Deutsche Telekom AG | 818,934 | 14,364,752 |
| Telefonica Deutschland Holding AG | 186,815 | 905,816 |
| | | 15,270,568 |
| Transportation 0.3% |
| Deutsche Lufthansa AG | 63,390 | 1,093,619 |
| Deutsche Post AG | 242,531 | 8,717,485 |
| Fraport AG Frankfurt Airport Services Worldwide | 12,132 | 954,467 |
| | | 10,765,571 |
| Utilities 0.2% |
| E.ON SE | 552,778 | 4,309,117 |
| Innogy SE | 37,210 | 1,367,983 |
| RWE AG * | 119,048 | 1,971,820 |
| | | 7,648,920 |
| | | 299,491,154 |
| |
| Hong Kong 3.5% |
| Banks 0.3% |
| BOC Hong Kong (Holdings) Ltd. | 948,500 | 3,897,895 |
| Hang Seng Bank Ltd. | 188,236 | 3,812,889 |
| The Bank of East Asia Ltd. | 305,000 | 1,261,253 |
| | | 8,972,037 |
| Capital Goods 0.4% |
| CK Hutchison Holdings Ltd. | 682,525 | 8,522,884 |
| Jardine Matheson Holdings Ltd. | 61,600 | 3,964,137 |
| Jardine Strategic Holdings Ltd. | 54,900 | 2,319,848 |
| NWS Holdings Ltd. | 402,000 | 754,935 |
| | | 15,561,804 |
| Consumer Durables & Apparel 0.1% |
| Li & Fung Ltd. | 1,378,000 | 577,019 |
| Techtronic Industries Co., Ltd. | 331,000 | 1,420,110 |
| Yue Yuen Industrial Holdings Ltd. | 199,000 | 786,703 |
| | | 2,783,832 |
| Consumer Services 0.3% |
| Galaxy Entertainment Group Ltd. | 597,000 | 3,316,607 |
| Melco Resorts & Entertainment Ltd. ADR | 45,490 | 998,505 |
| MGM China Holdings Ltd. | 254,000 | 577,796 |
| Sands China Ltd. | 592,400 | 2,683,062 |
| Shangri-La Asia Ltd. | 370,000 | 529,546 |
| SJM Holdings Ltd. | 572,000 | 554,520 |
| Wynn Macau Ltd. * | 425,200 | 932,059 |
| | | 9,592,095 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Diversified Financials 0.2% |
| First Pacific Co., Ltd. | 493,250 | 379,813 |
| Hong Kong Exchanges & Clearing Ltd. (a) | 290,118 | 7,135,175 |
| | | 7,514,988 |
| Food, Beverage & Tobacco 0.1% |
| WH Group Ltd. | 2,117,500 | 1,889,134 |
| Insurance 0.6% |
| AIA Group Ltd. | 3,019,600 | 20,899,965 |
| Real Estate 0.9% |
| Cheung Kong Property Holdings Ltd. | 679,025 | 4,861,282 |
| Hang Lung Group Ltd. | 225,000 | 938,232 |
| Hang Lung Properties Ltd. | 536,000 | 1,404,415 |
| Henderson Land Development Co., Ltd. | 266,681 | 1,688,212 |
| Hongkong Land Holdings Ltd. | 286,700 | 2,209,593 |
| Hysan Development Co., Ltd. | 156,000 | 735,713 |
| Kerry Properties Ltd. | 166,500 | 622,428 |
| Link REIT | 545,500 | 3,921,038 |
| New World Development Co., Ltd. | 1,434,666 | 1,784,019 |
| Sino Land Co., Ltd. | 800,000 | 1,353,802 |
| Sun Hung Kai Properties Ltd. | 359,604 | 5,388,665 |
| Swire Pacific Ltd., Class A | 127,590 | 1,230,330 |
| Swire Properties Ltd. | 277,600 | 930,668 |
| The Wharf Holdings Ltd. | 344,100 | 2,933,806 |
| Wheelock & Co., Ltd. | 204,000 | 1,589,039 |
| | | 31,591,242 |
| Semiconductors & Semiconductor Equipment 0.0% |
| ASM Pacific Technology Ltd. | 56,800 | 845,609 |
| Telecommunication Services 0.1% |
| HKT Trust & HKT Ltd. | 938,000 | 1,199,882 |
| PCCW Ltd. | 976,000 | 551,024 |
| | | 1,750,906 |
| Transportation 0.1% |
| Cathay Pacific Airways Ltd. | 259,000 | 372,758 |
| MTR Corp., Ltd. | 367,000 | 2,111,414 |
| | | 2,484,172 |
| Utilities 0.4% |
| Cheung Kong Infrastructure Holdings Ltd. | 167,000 | 1,462,022 |
| CLP Holdings Ltd. | 417,580 | 4,403,886 |
| HK Electric Investments & HK Electric Investments Ltd. | 644,000 | 569,404 |
| Hong Kong & China Gas Co., Ltd. | 1,958,867 | 3,913,579 |
| Power Assets Holdings Ltd. | 338,500 | 3,044,503 |
| | | 13,393,394 |
| | | 117,279,178 |
| |
| Ireland 0.5% |
| Banks 0.1% |
| Bank of Ireland * | 7,133,190 | 1,795,689 |
| Consumer Services 0.1% |
| Paddy Power Betfair plc | 19,553 | 2,176,139 |
| Food, Beverage & Tobacco 0.1% |
| Kerry Group plc, Class A | 38,763 | 3,167,684 |
| Materials 0.2% |
| CRH plc | 209,805 | 7,641,956 |
| Transportation 0.0% |
| Ryanair Holdings plc * | 43,580 | 754,760 |
| | | 15,536,228 |
| |
| Security | Number
of Shares | Value ($) |
| Israel 0.6% |
| Banks 0.1% |
| Bank Hapoalim B.M. | 264,940 | 1,652,248 |
| Bank Leumi Le-Israel B.M. * | 347,306 | 1,624,233 |
| Mizrahi Tefahot Bank Ltd. | 30,973 | 499,639 |
| | | 3,776,120 |
| Capital Goods 0.0% |
| Elbit Systems Ltd. | 6,178 | 735,516 |
| Materials 0.1% |
| Frutarom Industries Ltd. | 9,998 | 587,692 |
| Israel Chemicals Ltd. | 111,577 | 480,824 |
| | | 1,068,516 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.2% |
| Taro Pharmaceutical Industries Ltd. *(a) | 3,544 | 414,116 |
| Teva Pharmaceutical Industries Ltd. ADR | 229,655 | 7,252,505 |
| | | 7,666,621 |
| Real Estate 0.0% |
| Azrieli Group Ltd. | 11,367 | 604,650 |
| Software & Services 0.2% |
| Check Point Software Technologies Ltd. * | 32,771 | 3,408,512 |
| Mobileye N.V. * | 44,392 | 2,748,752 |
| Nice Ltd. | 15,579 | 1,052,348 |
| | | 7,209,612 |
| Telecommunication Services 0.0% |
| Bezeq The Israeli Telecommunication Corp., Ltd. | 476,268 | 800,191 |
| | | 21,861,226 |
| |
| Italy 2.1% |
| Automobiles & Components 0.1% |
| Ferrari N.V. | 30,129 | 2,266,491 |
| Fiat Chrysler Automobiles N.V. * | 228,290 | 2,593,032 |
| | | 4,859,523 |
| Banks 0.5% |
| Intesa Sanpaolo S.p.A. | 3,178,264 | 9,277,667 |
| Mediobanca S.p.A. | 139,974 | 1,346,068 |
| UniCredit S.p.A. * | 468,422 | 7,627,074 |
| | | 18,250,809 |
| Capital Goods 0.2% |
| CNH Industrial N.V. | 262,153 | 2,890,906 |
| Leonardo S.p.A. * | 96,417 | 1,515,159 |
| Prysmian S.p.A. | 46,111 | 1,330,703 |
| | | 5,736,768 |
| Consumer Durables & Apparel 0.1% |
| Luxottica Group S.p.A. | 42,574 | 2,461,232 |
| Diversified Financials 0.1% |
| EXOR N.V. | 27,867 | 1,564,209 |
| Energy 0.4% |
| Eni S.p.A. | 633,769 | 9,830,397 |
| Saipem S.p.A. * | 1,497,124 | 644,420 |
| Snam S.p.A. | 617,561 | 2,728,425 |
| Tenaris S.A. | 117,136 | 1,829,887 |
| | | 15,033,129 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Insurance 0.2% |
| Assicurazioni Generali S.p.A. | 293,312 | 4,646,066 |
| Poste Italiane S.p.A | 124,707 | 853,975 |
| UnipolSai Assicurazioni S.p.A. | 249,290 | 572,644 |
| | | 6,072,685 |
| Telecommunication Services 0.1% |
| Telecom Italia S.p.A. * | 2,813,706 | 2,497,423 |
| Transportation 0.1% |
| Atlantia S.p.A. | 103,819 | 2,632,762 |
| Utilities 0.3% |
| Enel S.p.A. | 1,918,958 | 9,123,078 |
| Terna - Rete Elettrica Nationale S.p.A. | 403,475 | 2,034,251 |
| | | 11,157,329 |
| | | 70,265,869 |
| |
| Japan 22.7% |
| Automobiles & Components 2.8% |
| Aisin Seiki Co., Ltd. | 48,900 | 2,394,983 |
| Bridgestone Corp. | 162,557 | 6,780,456 |
| Denso Corp. | 119,700 | 5,165,969 |
| Honda Motor Co., Ltd. | 405,239 | 11,794,747 |
| Isuzu Motors Ltd. | 145,300 | 1,974,929 |
| Koito Manufacturing Co., Ltd. | 28,800 | 1,488,183 |
| Mazda Motor Corp. | 138,800 | 2,050,391 |
| Mitsubishi Motors Corp. | 176,800 | 1,132,323 |
| NGK Spark Plug Co., Ltd. | 46,900 | 1,017,138 |
| Nissan Motor Co., Ltd. | 589,996 | 5,620,048 |
| NOK Corp. | 20,800 | 495,775 |
| Stanley Electric Co., Ltd. | 38,100 | 1,115,649 |
| Subaru Corp. | 154,100 | 5,842,252 |
| Sumitomo Electric Industries Ltd. | 189,200 | 3,090,004 |
| Sumitomo Rubber Industries Ltd. | 40,700 | 732,545 |
| Suzuki Motor Corp. | 86,100 | 3,599,233 |
| The Yokohama Rubber Co., Ltd. | 24,500 | 481,070 |
| Toyoda Gosei Co., Ltd. | 17,100 | 454,453 |
| Toyota Industries Corp. | 39,700 | 1,977,629 |
| Toyota Motor Corp. | 654,803 | 35,438,432 |
| Yamaha Motor Co., Ltd. | 69,400 | 1,648,148 |
| | | 94,294,357 |
| Banks 1.9% |
| Aozora Bank Ltd. | 296,000 | 1,078,539 |
| Concordia Financial Group Ltd. | 311,900 | 1,434,677 |
| Fukuoka Financial Group, Inc. | 180,000 | 821,138 |
| Japan Post Bank Co., Ltd. | 100,900 | 1,256,724 |
| Kyushu Financial Group, Inc. | 99,400 | 619,770 |
| Mebuki Financial Group, Inc. | 226,580 | 889,062 |
| Mitsubishi UFJ Financial Group, Inc. | 3,195,109 | 20,246,105 |
| Mizuho Financial Group, Inc. | 6,015,634 | 10,996,151 |
| Resona Holdings, Inc. | 547,700 | 3,044,769 |
| Seven Bank Ltd. | 149,400 | 501,785 |
| Shinsei Bank Ltd. | 411,000 | 767,359 |
| Sumitomo Mitsui Financial Group, Inc. | 338,446 | 12,566,707 |
| Sumitomo Mitsui Trust Holdings, Inc. | 82,800 | 2,836,374 |
| Suruga Bank Ltd. | 44,300 | 926,161 |
| The Bank of Kyoto Ltd. | 77,000 | 609,813 |
| The Chiba Bank Ltd. | 169,000 | 1,132,138 |
| The Chugoku Bank Ltd. | 43,400 | 644,750 |
| The Hachijuni Bank Ltd. | 95,000 | 561,008 |
| The Hiroshima Bank Ltd. | 116,000 | 500,761 |
| The Shizuoka Bank Ltd. | 132,000 | 1,114,164 |
| Yamaguchi Financial Group, Inc. | 50,000 | 553,974 |
| | | 63,101,929 |
| Security | Number
of Shares | Value ($) |
| Capital Goods 3.2% |
| Amada Holdings Co., Ltd. | 86,000 | 1,022,482 |
| Asahi Glass Co., Ltd. | 246,000 | 2,131,480 |
| Daikin Industries Ltd. | 58,400 | 5,677,853 |
| FANUC Corp. | 48,200 | 9,813,330 |
| Fuji Electric Co., Ltd. | 140,000 | 767,379 |
| Hino Motors Ltd. | 61,600 | 772,913 |
| Hitachi Construction Machinery Co., Ltd. | 23,300 | 600,669 |
| Hoshizaki Corp. | 11,900 | 992,849 |
| IHI Corp. * | 356,000 | 1,205,555 |
| ITOCHU Corp. | 368,400 | 5,212,849 |
| JGC Corp. | 57,300 | 1,000,576 |
| JTEKT Corp. | 53,100 | 837,597 |
| Kajima Corp. | 215,000 | 1,459,897 |
| Kawasaki Heavy Industries Ltd. | 357,000 | 1,080,857 |
| Keihan Holdings Co., Ltd. | 115,000 | 723,477 |
| Komatsu Ltd. | 231,609 | 6,188,946 |
| Kubota Corp. | 262,500 | 4,135,110 |
| Kurita Water Industries Ltd. | 25,000 | 645,571 |
| LIXIL Group Corp. | 64,900 | 1,622,033 |
| Mabuchi Motor Co., Ltd. | 11,300 | 637,891 |
| Makita Corp. | 57,600 | 2,055,150 |
| Marubeni Corp. | 424,600 | 2,617,121 |
| Minebea Mitsumi, Inc. | 89,000 | 1,287,553 |
| MISUMI Group, Inc. | 68,200 | 1,292,052 |
| Mitsubishi Corp. | 380,200 | 8,204,745 |
| Mitsubishi Electric Corp. | 489,700 | 6,834,458 |
| Mitsubishi Heavy Industries Ltd. | 793,000 | 3,177,445 |
| Mitsui & Co., Ltd. | 422,700 | 5,968,775 |
| Nabtesco Corp. | 28,000 | 793,810 |
| NGK Insulators Ltd. | 63,000 | 1,347,960 |
| Nidec Corp. | 59,800 | 5,486,879 |
| NSK Ltd. | 113,200 | 1,548,016 |
| Obayashi Corp. | 157,000 | 1,524,294 |
| Seibu Holdings, Inc. | 40,700 | 711,029 |
| Shimizu Corp. | 140,000 | 1,342,590 |
| SMC Corp. | 14,400 | 4,058,838 |
| Sumitomo Corp. | 296,400 | 3,960,892 |
| Sumitomo Heavy Industries Ltd. | 146,000 | 1,018,507 |
| Taisei Corp. | 255,000 | 1,944,475 |
| THK Co., Ltd. | 33,000 | 851,171 |
| Toshiba Corp. * | 978,178 | 1,973,151 |
| TOTO Ltd. | 36,300 | 1,384,928 |
| Toyota Tsusho Corp. | 55,800 | 1,761,772 |
| | | 107,674,925 |
| Commercial & Professional Services 0.4% |
| Dai Nippon Printing Co., Ltd. | 132,000 | 1,469,509 |
| Park24 Co., Ltd. | 25,000 | 645,047 |
| Recruit Holdings Co., Ltd. | 90,900 | 4,594,297 |
| Secom Co., Ltd. | 52,200 | 3,790,920 |
| Sohgo Security Services Co., Ltd. | 17,100 | 746,557 |
| Toppan Printing Co., Ltd. | 160,000 | 1,610,687 |
| | | 12,857,017 |
| Consumer Durables & Apparel 1.0% |
| Asics Corp. | 36,800 | 651,308 |
| Bandai Namco Holdings, Inc. | 47,500 | 1,490,863 |
| Casio Computer Co., Ltd. | 60,500 | 852,656 |
| Iida Group Holdings Co., Ltd. | 37,800 | 601,994 |
| Nikon Corp. | 81,700 | 1,166,301 |
| Panasonic Corp. | 557,012 | 6,660,885 |
| Rinnai Corp. | 8,500 | 706,843 |
| Sankyo Co., Ltd. | 10,600 | 369,679 |
| Sega Sammy Holdings, Inc. | 49,800 | 668,639 |
| Sekisui Chemical Co., Ltd. | 97,000 | 1,628,012 |
| Sekisui House Ltd. | 147,000 | 2,441,935 |
| Sharp Corp. *(a) | 355,000 | 1,287,422 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Shimano, Inc. | 18,600 | 2,846,617 |
| Sony Corp. | 317,200 | 10,884,501 |
| Yamaha Corp. | 40,300 | 1,117,773 |
| | | 33,375,428 |
| Consumer Services 0.1% |
| Benesse Holdings, Inc. | 19,300 | 582,421 |
| McDonald's Holdings Co., Ltd. (a) | 15,000 | 462,310 |
| Oriental Land Co., Ltd. | 54,200 | 3,112,940 |
| | | 4,157,671 |
| Diversified Financials 0.5% |
| Acom Co., Ltd. * | 88,800 | 394,430 |
| AEON Financial Service Co., Ltd. | 33,100 | 636,110 |
| Credit Saison Co., Ltd. | 34,000 | 619,534 |
| Daiwa Securities Group, Inc. | 404,000 | 2,457,682 |
| Japan Exchange Group, Inc. | 130,100 | 1,824,233 |
| Mitsubishi UFJ Lease & Finance Co., Ltd. | 123,600 | 645,917 |
| Nomura Holdings, Inc. | 905,700 | 5,442,920 |
| ORIX Corp. | 327,800 | 5,009,677 |
| SBI Holdings, Inc. | 48,290 | 669,886 |
| | | 17,700,389 |
| Energy 0.2% |
| Idemitsu Kosan Co., Ltd. | 20,100 | 642,635 |
| Inpex Corp. | 239,000 | 2,290,200 |
| JXTG Holdings, Inc. | 781,000 | 3,523,897 |
| Showa Shell Sekiyu K.K. | 49,300 | 476,128 |
| | | 6,932,860 |
| Food & Staples Retailing 0.4% |
| Aeon Co., Ltd. | 161,200 | 2,389,128 |
| FamilyMart UNY Holdings Co., Ltd. | 21,300 | 1,204,023 |
| Lawson, Inc. | 12,000 | 796,190 |
| Seven & i Holdings Co., Ltd. | 189,703 | 8,011,910 |
| Sundrug Co., Ltd. | 17,200 | 603,220 |
| Tsuruha Holdings, Inc. | 10,100 | 1,022,396 |
| | | 14,026,867 |
| Food, Beverage & Tobacco 0.9% |
| Ajinomoto Co., Inc. | 138,700 | 2,702,740 |
| Asahi Group Holdings Ltd. | 98,000 | 3,702,803 |
| Calbee, Inc. | 20,700 | 723,702 |
| Coca-Cola Bottlers Japan, Inc. | 32,600 | 972,047 |
| Japan Tobacco, Inc. | 274,300 | 9,127,536 |
| Kikkoman Corp. | 35,000 | 1,077,149 |
| Kirin Holdings Co., Ltd. | 203,000 | 3,951,949 |
| MEIJI Holdings Co., Ltd. | 29,000 | 2,465,140 |
| NH Foods Ltd. | 45,000 | 1,282,633 |
| Nisshin Seifun Group, Inc. | 49,400 | 759,016 |
| Nissin Foods Holdings Co., Ltd. | 15,200 | 870,383 |
| Suntory Beverage & Food Ltd. | 34,000 | 1,531,847 |
| Toyo Suisan Kaisha Ltd. | 22,800 | 856,316 |
| Yakult Honsha Co., Ltd. | 23,100 | 1,316,612 |
| Yamazaki Baking Co., Ltd. | 32,000 | 675,415 |
| | | 32,015,288 |
| Health Care Equipment & Services 0.5% |
| Alfresa Holdings Corp. | 51,900 | 937,191 |
| CYBERDYNE, Inc. *(a) | 33,471 | 472,897 |
| Hoya Corp. | 97,807 | 4,674,469 |
| M3, Inc. | 49,500 | 1,265,423 |
| Medipal Holdings Corp. | 43,300 | 717,393 |
| Miraca Holdings, Inc. | 14,800 | 682,371 |
| Olympus Corp. | 71,300 | 2,749,172 |
| Suzuken Co., Ltd. | 19,500 | 645,272 |
| Sysmex Corp. | 39,700 | 2,418,032 |
| Terumo Corp. | 85,200 | 3,111,378 |
| | | 17,673,598 |
| Security | Number
of Shares | Value ($) |
| Household & Personal Products 0.4% |
| Kao Corp. | 126,319 | 6,970,743 |
| Kose Corp. | 8,000 | 760,039 |
| Lion Corp. | 58,000 | 1,048,060 |
| Pola Orbis Holdings, Inc. | 21,200 | 489,568 |
| Shiseido Co., Ltd. | 96,200 | 2,606,115 |
| Unicharm Corp. | 100,500 | 2,444,078 |
| | | 14,318,603 |
| Insurance 0.7% |
| Dai-ichi Life Holdings, Inc. | 273,300 | 4,657,032 |
| Japan Post Holdings Co., Ltd. | 117,300 | 1,455,476 |
| MS&AD Insurance Group Holdings, Inc. | 124,662 | 4,064,489 |
| Sompo Holdings, Inc. | 89,300 | 3,374,692 |
| Sony Financial Holdings, Inc. | 40,600 | 675,288 |
| T&D Holdings, Inc. | 148,300 | 2,205,153 |
| Tokio Marine Holdings, Inc. | 169,899 | 7,163,547 |
| | | 23,595,677 |
| Materials 1.4% |
| Air Water, Inc. | 34,000 | 654,872 |
| Asahi Kasei Corp. | 324,000 | 3,089,535 |
| Daicel Corp. | 72,300 | 829,977 |
| Hitachi Chemical Co., Ltd. | 28,300 | 810,487 |
| Hitachi Metals Ltd. | 55,800 | 781,440 |
| JFE Holdings, Inc. | 134,500 | 2,294,112 |
| JSR Corp. | 49,900 | 911,952 |
| Kaneka Corp. | 72,000 | 567,708 |
| Kansai Paint Co., Ltd. | 55,200 | 1,221,922 |
| Kobe Steel Ltd. * | 83,900 | 745,372 |
| Kuraray Co., Ltd. | 88,000 | 1,420,242 |
| Maruichi Steel Tube Ltd. | 13,300 | 377,151 |
| Mitsubishi Chemical Holdings Corp. | 343,000 | 2,684,725 |
| Mitsubishi Gas Chemical Co., Inc. | 42,500 | 908,784 |
| Mitsubishi Materials Corp. | 27,200 | 809,928 |
| Mitsui Chemicals, Inc. | 220,000 | 1,125,673 |
| Nippon Paint Holdings Co., Ltd. | 40,500 | 1,553,513 |
| Nippon Steel & Sumitomo Metal Corp. | 203,941 | 4,592,857 |
| Nissan Chemical Industries Ltd. | 30,700 | 952,171 |
| Nitto Denko Corp. | 42,100 | 3,170,158 |
| Oji Holdings Corp. | 207,000 | 1,001,880 |
| Shin-Etsu Chemical Co., Ltd. | 96,760 | 8,410,149 |
| Sumitomo Chemical Co., Ltd. | 380,000 | 2,144,531 |
| Sumitomo Metal Mining Co., Ltd. | 119,000 | 1,611,436 |
| Taiheiyo Cement Corp. | 281,000 | 933,812 |
| Taiyo Nippon Sanso Corp. | 27,900 | 333,521 |
| Teijin Ltd. | 48,200 | 933,893 |
| Toray Industries, Inc. | 372,000 | 3,292,344 |
| Toyo Seikan Group Holdings Ltd. | 40,600 | 680,900 |
| | | 48,845,045 |
| Media 0.1% |
| Dentsu, Inc. | 53,700 | 3,031,210 |
| Hakuhodo DY Holdings, Inc. | 53,300 | 649,682 |
| Toho Co., Ltd. | 29,100 | 835,254 |
| | | 4,516,146 |
| Pharmaceuticals, Biotechnology & Life Sciences 1.2% |
| Astellas Pharma, Inc. | 536,550 | 7,075,544 |
| Chugai Pharmaceutical Co., Ltd. | 57,900 | 2,057,424 |
| Daiichi Sankyo Co., Ltd. | 148,700 | 3,304,684 |
| Eisai Co., Ltd. | 63,900 | 3,359,836 |
| Hisamitsu Pharmaceutical Co., Inc. | 14,600 | 747,433 |
| Kyowa Hakko Kirin Co., Ltd. | 62,300 | 1,070,375 |
| Mitsubishi Tanabe Pharma Corp. | 59,000 | 1,198,458 |
| Ono Pharmaceutical Co., Ltd. | 107,400 | 2,215,312 |
| Otsuka Holdings Co., Ltd. | 98,000 | 4,513,770 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Santen Pharmaceutical Co., Ltd. | 90,800 | 1,277,618 |
| Shionogi & Co., Ltd. | 75,700 | 3,898,387 |
| Sumitomo Dainippon Pharma Co., Ltd. | 41,500 | 681,561 |
| Taisho Pharmaceutical Holdings Co., Ltd. | 8,600 | 707,615 |
| Takeda Pharmaceutical Co., Ltd. | 175,900 | 8,438,553 |
| | | 40,546,570 |
| Real Estate 1.0% |
| Aeon Mall Co., Ltd. | 27,400 | 465,981 |
| Daito Trust Construction Co., Ltd. | 18,200 | 2,678,186 |
| Daiwa House Industry Co., Ltd. | 139,000 | 4,132,326 |
| Daiwa House REIT Investment Corp. | 352 | 889,915 |
| Hulic Co., Ltd. | 82,600 | 778,980 |
| Japan Prime Realty Investment Corp. | 196 | 735,865 |
| Japan Real Estate Investment Corp. | 340 | 1,790,391 |
| Japan Retail Fund Investment Corp. | 624 | 1,219,027 |
| Mitsubishi Estate Co., Ltd. | 313,502 | 6,002,873 |
| Mitsui Fudosan Co., Ltd. | 224,777 | 4,945,601 |
| Nippon Building Fund, Inc. | 343 | 1,824,615 |
| Nippon Prologis REIT, Inc. | 396 | 836,809 |
| Nomura Real Estate Holdings, Inc. | 31,300 | 529,415 |
| Nomura Real Estate Master Fund, Inc. | 957 | 1,379,340 |
| Sumitomo Realty & Development Co., Ltd. | 92,000 | 2,485,430 |
| Tokyo Tatemono Co., Ltd. | 48,500 | 662,610 |
| Tokyu Fudosan Holdings Corp. | 132,900 | 725,808 |
| United Urban Investment Corp. | 783 | 1,183,543 |
| | | 33,266,715 |
| Retailing 0.6% |
| ABC-Mart, Inc. | 8,180 | 454,724 |
| Don Quijote Holdings Co., Ltd. | 28,100 | 1,023,793 |
| Fast Retailing Co., Ltd. | 13,100 | 4,278,696 |
| Hikari Tsushin, Inc. | 5,100 | 489,818 |
| Isetan Mitsukoshi Holdings Ltd. | 85,700 | 936,460 |
| J. Front Retailing Co., Ltd. | 59,500 | 857,691 |
| Marui Group Co., Ltd. | 52,300 | 716,267 |
| Nitori Holdings Co., Ltd. | 20,600 | 2,680,313 |
| Rakuten, Inc. | 236,520 | 2,422,922 |
| Ryohin Keikaku Co., Ltd. | 5,800 | 1,307,895 |
| Shimamura Co., Ltd. | 5,400 | 739,053 |
| Start Today Co., Ltd. | 41,400 | 883,404 |
| Takashimaya Co., Ltd. | 81,000 | 745,849 |
| USS Co., Ltd. | 51,600 | 912,849 |
| Yamada Denki Co., Ltd. | 173,800 | 912,728 |
| | | 19,362,462 |
| Semiconductors & Semiconductor Equipment 0.2% |
| Rohm Co., Ltd. | 21,500 | 1,509,900 |
| Tokyo Electron Ltd. | 38,900 | 4,722,210 |
| | | 6,232,110 |
| Software & Services 0.6% |
| Dena Co., Ltd. | 25,700 | 550,938 |
| Fujitsu Ltd. | 458,000 | 2,858,982 |
| Kakaku.com, Inc. | 38,400 | 554,166 |
| Konami Holdings Corp. | 24,600 | 1,024,032 |
| LINE Corp. * | 10,700 | 369,183 |
| Mixi, Inc. | 10,100 | 560,289 |
| Nexon Co., Ltd. | 41,200 | 701,197 |
| Nintendo Co., Ltd. | 28,239 | 7,146,314 |
| Nomura Research Institute Ltd. | 32,300 | 1,124,716 |
| NTT Data Corp. | 31,100 | 1,444,116 |
| Obic Co., Ltd. | 15,400 | 831,994 |
| Oracle Corp., Japan | 9,600 | 553,099 |
| Otsuka Corp. | 13,300 | 712,416 |
| Security | Number
of Shares | Value ($) |
| Trend Micro, Inc. | 28,900 | 1,271,563 |
| Yahoo Japan Corp. | 353,000 | 1,511,976 |
| | | 21,214,981 |
| Technology Hardware & Equipment 1.7% |
| Alps Electric Co., Ltd. | 48,000 | 1,410,850 |
| Brother Industries Ltd. | 61,700 | 1,269,515 |
| Canon, Inc. | 269,395 | 8,940,674 |
| FUJIFILM Holdings Corp. | 108,411 | 4,023,633 |
| Hamamatsu Photonics K.K. | 33,000 | 970,399 |
| Hirose Electric Co., Ltd. | 8,185 | 1,100,067 |
| Hitachi High-Technologies Corp. | 15,900 | 634,714 |
| Hitachi Ltd. | 1,210,079 | 6,684,921 |
| Keyence Corp. | 24,200 | 9,728,740 |
| Konica Minolta, Inc. | 106,500 | 942,804 |
| Kyocera Corp. | 79,600 | 4,508,152 |
| Murata Manufacturing Co., Ltd. | 47,674 | 6,403,833 |
| NEC Corp. | 659,000 | 1,638,590 |
| Nippon Electric Glass Co., Ltd. | 114,000 | 707,066 |
| Omron Corp. | 50,100 | 2,097,551 |
| Ricoh Co., Ltd. | 174,100 | 1,451,195 |
| Seiko Epson Corp. | 70,400 | 1,442,022 |
| Shimadzu Corp. | 64,000 | 1,086,455 |
| TDK Corp. | 32,400 | 2,007,359 |
| Yaskawa Electric Corp. | 63,500 | 1,213,738 |
| Yokogawa Electric Corp. | 60,900 | 941,227 |
| | | 59,203,505 |
| Telecommunication Services 1.3% |
| KDDI Corp. | 461,000 | 12,222,977 |
| Nippon Telegraph & Telephone Corp. | 173,956 | 7,454,994 |
| NTT DOCOMO, Inc. | 344,700 | 8,340,728 |
| SoftBank Group Corp. | 205,300 | 15,572,552 |
| | | 43,591,251 |
| Transportation 1.1% |
| ANA Holdings, Inc. | 293,000 | 882,595 |
| Central Japan Railway Co. | 35,500 | 5,953,655 |
| East Japan Railway Co. | 81,660 | 7,328,382 |
| Hankyu Hanshin Holdings, Inc. | 68,500 | 2,262,789 |
| Japan Airlines Co., Ltd. | 27,200 | 859,014 |
| Japan Airport Terminal Co., Ltd. | 12,900 | 448,094 |
| Kamigumi Co., Ltd. | 51,000 | 463,446 |
| Keikyu Corp. | 111,000 | 1,274,154 |
| Keio Corp. | 157,000 | 1,257,327 |
| Keisei Electric Railway Co., Ltd. | 31,500 | 749,674 |
| Kintetsu Group Holdings Co., Ltd. | 440,000 | 1,606,787 |
| Mitsubishi Logistics Corp. | 25,000 | 323,439 |
| Mitsui O.S.K. Lines Ltd. | 273,000 | 835,819 |
| Nagoya Railroad Co., Ltd. | 227,000 | 1,042,809 |
| Nippon Express Co., Ltd. | 213,000 | 1,169,258 |
| Nippon Yusen K.K. * | 383,000 | 770,044 |
| Odakyu Electric Railway Co., Ltd. | 69,500 | 1,349,192 |
| Tobu Railway Co., Ltd. | 221,000 | 1,120,861 |
| Tokyu Corp. | 270,000 | 1,933,892 |
| West Japan Railway Co. | 40,700 | 2,719,527 |
| Yamato Holdings Co., Ltd. | 90,900 | 1,964,254 |
| | | 36,315,012 |
| Utilities 0.5% |
| Chubu Electric Power Co., Inc. | 161,900 | 2,173,821 |
| Electric Power Development Co., Ltd. | 33,800 | 784,100 |
| Hokuriku Electric Power Co. | 40,300 | 372,479 |
| Kyushu Electric Power Co., Inc. | 104,200 | 1,123,990 |
| Osaka Gas Co., Ltd. | 485,000 | 1,815,465 |
| The Chugoku Electric Power Co., Inc. | 70,100 | 764,189 |
| The Kansai Electric Power Co., Inc. | 176,500 | 2,385,251 |
| Toho Gas Co., Ltd. | 89,000 | 636,168 |
| Tohoku Electric Power Co., Inc. | 111,800 | 1,490,501 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Tokyo Electric Power Co. Holdings, Inc. * | 343,990 | 1,336,243 |
| Tokyo Gas Co., Ltd. | 481,201 | 2,234,168 |
| | | 15,116,375 |
| | | 769,934,781 |
| |
| Netherlands 3.4% |
| Banks 0.5% |
| ABN AMRO Group N.V. CVA | 69,861 | 1,834,077 |
| ING Groep N.V. | 974,876 | 15,890,016 |
| | | 17,724,093 |
| Capital Goods 0.3% |
| AerCap Holdings N.V. * | 36,690 | 1,688,107 |
| Boskalis Westminster N.V. | 21,558 | 792,964 |
| Koninklijke Philips N.V. | 236,827 | 8,178,221 |
| | | 10,659,292 |
| Commercial & Professional Services 0.3% |
| Randstad Holding N.V. | 29,790 | 1,776,018 |
| RELX N.V. | 250,204 | 4,834,879 |
| Wolters Kluwer N.V. | 77,045 | 3,269,340 |
| | | 9,880,237 |
| Energy 0.0% |
| Koninklijke Vopak N.V. | 16,676 | 752,557 |
| Food & Staples Retailing 0.2% |
| Koninklijke Ahold Delhaize N.V. | 319,603 | 6,620,655 |
| Food, Beverage & Tobacco 0.3% |
| Coca-Cola European Partners plc | 56,343 | 2,132,062 |
| Heineken Holding N.V. | 24,444 | 2,048,513 |
| Heineken N.V. | 57,270 | 5,108,097 |
| | | 9,288,672 |
| Household & Personal Products 0.6% |
| Unilever N.V. CVA | 407,503 | 21,347,224 |
| Insurance 0.1% |
| Aegon N.V. | 434,813 | 2,219,223 |
| NN Group N.V. | 81,004 | 2,685,663 |
| | | 4,904,886 |
| Materials 0.3% |
| Akzo Nobel N.V. | 63,012 | 5,511,162 |
| Koninklijke DSM N.V. | 45,998 | 3,291,534 |
| | | 8,802,696 |
| Media 0.1% |
| Altice N.V., Class A * | 91,755 | 2,279,763 |
| Altice N.V., Class B * | 24,908 | 619,520 |
| | | 2,899,283 |
| Semiconductors & Semiconductor Equipment 0.6% |
| ASML Holding N.V. | 93,533 | 12,367,795 |
| NXP Semiconductors N.V. * | 72,986 | 7,718,270 |
| | | 20,086,065 |
| Software & Services 0.0% |
| Gemalto N.V. | 19,973 | 1,118,219 |
| Telecommunication Services 0.1% |
| Koninklijke KPN N.V. | 832,010 | 2,405,355 |
| | | 116,489,234 |
| |
| New Zealand 0.2% |
| Health Care Equipment & Services 0.0% |
| Ryman Healthcare Ltd. | 97,507 | 577,526 |
| Materials 0.0% |
| Fletcher Building Ltd. | 171,142 | 1,004,323 |
| Security | Number
of Shares | Value ($) |
| Telecommunication Services 0.1% |
| Spark New Zealand Ltd. | 485,051 | 1,229,234 |
| Transportation 0.0% |
| Auckland International Airport Ltd. | 241,551 | 1,144,614 |
| Utilities 0.1% |
| Contact Energy Ltd. | 165,447 | 591,831 |
| Mercury NZ Ltd. | 131,151 | 289,505 |
| Meridian Energy Ltd. | 316,280 | 601,190 |
| | | 1,482,526 |
| | | 5,438,223 |
| |
| Norway 0.6% |
| Banks 0.1% |
| DNB A.S.A. | 240,518 | 3,753,599 |
| Energy 0.2% |
| Statoil A.S.A. | 285,563 | 4,702,905 |
| Food, Beverage & Tobacco 0.1% |
| Marine Harvest A.S.A. * | 98,944 | 1,646,241 |
| Orkla A.S.A. | 198,846 | 1,804,106 |
| | | 3,450,347 |
| Insurance 0.0% |
| Gjensidige Forsikring A.S.A. | 49,099 | 754,290 |
| Materials 0.1% |
| Norsk Hydro A.S.A. | 331,184 | 1,887,299 |
| Yara International A.S.A. | 45,058 | 1,675,481 |
| | | 3,562,780 |
| Media 0.0% |
| Schibsted A.S.A., B Shares | 20,539 | 460,007 |
| Schibsted A.S.A., Class A | 23,037 | 572,572 |
| | | 1,032,579 |
| Telecommunication Services 0.1% |
| Telenor A.S.A. | 189,774 | 3,065,536 |
| | | 20,322,036 |
| |
| Portugal 0.1% |
| Banks 0.0% |
| Banco Espirito Santo S.A. *(d) | 470,491 | — |
| Energy 0.0% |
| Galp Energia, SGPS, S.A. | 126,038 | 1,958,754 |
| Food & Staples Retailing 0.0% |
| Jeronimo Martins, SGPS, S.A. | 59,857 | 1,098,434 |
| Utilities 0.1% |
| EDP - Energias de Portugal S.A. | 614,491 | 2,027,956 |
| | | 5,085,144 |
| |
| Singapore 1.3% |
| Banks 0.5% |
| DBS Group Holdings Ltd. | 440,346 | 6,081,355 |
| Oversea-Chinese Banking Corp., Ltd. | 784,771 | 5,496,296 |
| United Overseas Bank Ltd. (a) | 337,233 | 5,250,619 |
| | | 16,828,270 |
| Capital Goods 0.1% |
| Keppel Corp., Ltd. | 353,600 | 1,644,070 |
| Sembcorp Industries Ltd. | 260,600 | 564,645 |
| Singapore Technologies Engineering Ltd. | 375,200 | 1,017,806 |
| Yangzijiang Shipbuilding Holdings Ltd. | 431,000 | 354,132 |
| | | 3,580,653 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Consumer Services 0.1% |
| Genting Singapore plc | 1,564,900 | 1,246,818 |
| Diversified Financials 0.0% |
| Singapore Exchange Ltd. | 186,900 | 990,366 |
| Food, Beverage & Tobacco 0.1% |
| Golden Agri-Resources Ltd. | 1,652,500 | 425,120 |
| Wilmar International Ltd. | 456,200 | 1,158,780 |
| | | 1,583,900 |
| Media 0.0% |
| Singapore Press Holdings Ltd. | 367,400 | 911,764 |
| Real Estate 0.2% |
| Ascendas Real Estate Investment Trust | 646,500 | 1,184,905 |
| CapitaLand Commercial Trust | 452,900 | 526,359 |
| CapitaLand Ltd. | 633,200 | 1,701,372 |
| CapitaLand Mall Trust | 644,100 | 908,244 |
| City Developments Ltd. | 113,500 | 875,851 |
| Global Logistic Properties Ltd. | 686,600 | 1,414,523 |
| Suntec Real Estate Investment Trust | 570,100 | 721,947 |
| UOL Group Ltd. | 128,200 | 664,005 |
| | | 7,997,206 |
| Retailing 0.0% |
| Jardine Cycle & Carriage Ltd. | 27,000 | 913,695 |
| Telecommunication Services 0.2% |
| Singapore Telecommunications Ltd. | 2,007,337 | 5,374,202 |
| StarHub Ltd. | 129,000 | 257,235 |
| | | 5,631,437 |
| Transportation 0.1% |
| ComfortDelGro Corp., Ltd. | 537,600 | 1,053,379 |
| Hutchison Port Holdings Trust, Class U | 1,165,600 | 471,868 |
| SATS Ltd. | 177,500 | 647,253 |
| Singapore Airlines Ltd. | 128,400 | 940,628 |
| | | 3,113,128 |
| | | 42,797,237 |
| |
| Spain 3.4% |
| Banks 1.4% |
| Banco Bilbao Vizcaya Argentaria S.A. | 1,678,054 | 13,443,930 |
| Banco De Sabadell S.A. | 1,313,148 | 2,525,712 |
| Banco Popular Espanol S.A. *(a) | 835,149 | 584,378 |
| Banco Santander S.A. | 3,656,952 | 23,832,070 |
| Bankia S.A. | 1,163,780 | 1,413,024 |
| Bankinter S.A. | 167,699 | 1,476,248 |
| CaixaBank S.A. | 898,609 | 4,080,081 |
| | | 47,355,443 |
| Capital Goods 0.1% |
| ACS Actividades de Construccion y Servicios S.A. | 59,422 | 2,201,618 |
| Ferrovial S.A. | 125,160 | 2,662,475 |
| Zardoya Otis S.A. | 44,981 | 416,267 |
| | | 5,280,360 |
| Energy 0.2% |
| Enagas S.A. | 59,610 | 1,566,401 |
| Repsol S.A. | 276,668 | 4,366,744 |
| | | 5,933,145 |
| Food & Staples Retailing 0.0% |
| Distribuidora Internacional de Alimentacion S.A. | 162,710 | 967,440 |
| Insurance 0.0% |
| Mapfre S.A. | 291,986 | 1,018,466 |
| Security | Number
of Shares | Value ($) |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Grifols S.A. | 76,566 | 2,055,087 |
| Retailing 0.3% |
| Industria de Diseno Textil S.A. | 270,631 | 10,370,899 |
| Software & Services 0.2% |
| Amadeus IT Group S.A. | 110,999 | 5,990,532 |
| Telecommunication Services 0.4% |
| Telefonica S.A. | 1,128,747 | 12,483,881 |
| Transportation 0.2% |
| Abertis Infraestructuras S.A. | 162,351 | 2,854,068 |
| Aena S.A. | 16,942 | 2,987,083 |
| International Consolidated Airlines Group S.A. | 219,643 | 1,591,742 |
| | | 7,432,893 |
| Utilities 0.5% |
| Endesa S.A. | 76,694 | 1,806,385 |
| Gas Natural SDG S.A. | 86,578 | 1,956,447 |
| Iberdrola S.A. | 1,378,272 | 9,908,075 |
| Red Electrica Corp. S.A. | 104,948 | 2,045,344 |
| | | 15,716,251 |
| | | 114,604,397 |
| |
| Sweden 2.9% |
| Banks 0.7% |
| Nordea Bank AB | 768,061 | 9,446,238 |
| Skandinaviska Enskilda Banken AB, A Shares | 375,695 | 4,326,255 |
| Svenska Handelsbanken AB, A Shares | 390,117 | 5,534,956 |
| Swedbank AB, A Shares | 225,321 | 5,340,114 |
| | | 24,647,563 |
| Capital Goods 0.9% |
| Alfa Laval AB (a) | 71,707 | 1,469,398 |
| Assa Abloy AB, Class B | 247,343 | 5,353,704 |
| Atlas Copco AB, A Shares | 164,269 | 6,136,276 |
| Atlas Copco AB, B Shares | 99,515 | 3,306,893 |
| Sandvik AB | 260,070 | 4,169,462 |
| Skanska AB, B Shares | 88,290 | 2,110,276 |
| SKF AB, B Shares | 102,017 | 2,238,779 |
| Volvo AB, B Shares | 389,056 | 6,353,618 |
| | | 31,138,406 |
| Commercial & Professional Services 0.0% |
| Securitas AB, B Shares | 73,924 | 1,221,846 |
| Consumer Durables & Apparel 0.1% |
| Electrolux AB, B Shares | 62,338 | 1,850,009 |
| Husqvarna AB, B Shares | 94,980 | 944,193 |
| | | 2,794,202 |
| Diversified Financials 0.3% |
| Industrivarden AB, C Shares | 41,251 | 959,284 |
| Investor AB, B Shares | 112,313 | 5,131,733 |
| Kinnevik AB, Class B | 55,465 | 1,480,130 |
| LE Lundbergfortagen AB, B Shares | 10,512 | 761,128 |
| | | 8,332,275 |
| Energy 0.0% |
| Lundin Petroleum AB * | 49,233 | 938,812 |
| Food & Staples Retailing 0.0% |
| ICA Gruppen AB | 19,005 | 648,568 |
| Food, Beverage & Tobacco 0.1% |
| Swedish Match AB | 45,711 | 1,507,389 |
| Health Care Equipment & Services 0.0% |
| Getinge AB, B Shares | 47,027 | 918,580 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Household & Personal Products 0.2% |
| Svenska Cellulosa AB, S.C.A., B Shares | 152,311 | 5,042,606 |
| Materials 0.1% |
| Boliden AB | 68,957 | 1,969,984 |
| Retailing 0.2% |
| Hennes & Mauritz AB, B Shares | 235,227 | 5,824,337 |
| Technology Hardware & Equipment 0.2% |
| Hexagon AB, B Shares | 62,898 | 2,737,373 |
| Telefonaktiebolaget LM Ericsson, B Shares | 758,296 | 4,926,519 |
| | | 7,663,892 |
| Telecommunication Services 0.1% |
| Millicom International Cellular S.A. SDR | 17,764 | 973,331 |
| Tele2 AB, B Shares | 92,610 | 931,997 |
| Telia Co. AB | 649,857 | 2,645,789 |
| | | 4,551,117 |
| | | 97,199,577 |
| |
| Switzerland 8.6% |
| Capital Goods 0.6% |
| ABB Ltd. | 468,546 | 11,481,368 |
| Geberit AG | 9,313 | 4,242,141 |
| Schindler Holding AG | 15,505 | 3,142,445 |
| | | 18,865,954 |
| Commercial & Professional Services 0.2% |
| Adecco Group AG | 40,654 | 3,020,666 |
| SGS S.A. | 1,393 | 3,136,769 |
| | | 6,157,435 |
| Consumer Durables & Apparel 0.4% |
| Cie Financiere Richemont S.A. | 130,172 | 10,876,975 |
| The Swatch Group AG | 11,639 | 902,940 |
| The Swatch Group AG - Bearer Shares | 7,707 | 3,083,328 |
| | | 14,863,243 |
| Diversified Financials 0.9% |
| Credit Suisse Group AG * | 491,447 | 7,495,041 |
| Julius Baer Group Ltd. * | 56,334 | 2,937,630 |
| Pargesa Holding S.A. | 8,318 | 621,924 |
| Partners Group Holding AG | 4,369 | 2,641,088 |
| UBS Group AG | 908,905 | 15,515,768 |
| | | 29,211,451 |
| Food, Beverage & Tobacco 1.9% |
| Aryzta AG * | 22,198 | 720,677 |
| Barry Callebaut AG * | 534 | 733,367 |
| Chocoladefabriken Lindt & Spruengli AG | 265 | 3,133,304 |
| Nestle S.A. | 777,302 | 59,868,159 |
| | | 64,455,507 |
| Health Care Equipment & Services 0.1% |
| Sonova Holding AG | 12,877 | 1,904,116 |
| Insurance 0.6% |
| Baloise Holding AG | 13,040 | 1,912,127 |
| Swiss Life Holding AG * | 7,680 | 2,499,363 |
| Swiss Re AG | 81,033 | 7,048,193 |
| Zurich Insurance Group AG | 37,845 | 10,473,159 |
| | | 21,932,842 |
| Materials 0.8% |
| EMS-Chemie Holding AG | 2,075 | 1,300,222 |
| Givaudan S.A. | 2,272 | 4,377,486 |
| Security | Number
of Shares | Value ($) |
| LafargeHolcim Ltd. * | 112,526 | 6,381,171 |
| Sika AG | 545 | 3,478,388 |
| Syngenta AG * | 23,106 | 10,738,129 |
| | | 26,275,396 |
| Pharmaceuticals, Biotechnology & Life Sciences 2.9% |
| Actelion Ltd. * | 24,181 | 6,459,743 |
| Galenica AG | 909 | 987,698 |
| Lonza Group AG * | 14,226 | 2,910,781 |
| Novartis AG | 558,366 | 42,985,843 |
| Roche Holding AG | 175,680 | 45,969,182 |
| | | 99,313,247 |
| Real Estate 0.0% |
| Swiss Prime Site AG * | 18,543 | 1,607,559 |
| Retailing 0.0% |
| Dufry AG * | 8,825 | 1,446,036 |
| Telecommunication Services 0.1% |
| Swisscom AG | 6,501 | 2,834,971 |
| Transportation 0.1% |
| Kuehne & Nagel International AG | 13,052 | 1,973,923 |
| | | 290,841,680 |
| |
| United Kingdom 17.4% |
| Automobiles & Components 0.1% |
| GKN plc | 438,934 | 2,039,839 |
| Banks 2.3% |
| Barclays plc | 4,202,874 | 11,509,170 |
| HSBC Holdings plc | 4,953,812 | 40,850,705 |
| Lloyds Banking Group plc | 16,164,962 | 14,524,623 |
| Royal Bank of Scotland Group plc * | 862,342 | 2,960,577 |
| Standard Chartered plc * | 815,454 | 7,620,739 |
| | | 77,465,814 |
| Capital Goods 0.9% |
| Ashtead Group plc | 123,822 | 2,612,140 |
| BAE Systems plc | 802,926 | 6,521,341 |
| Bunzl plc | 85,080 | 2,652,291 |
| Cobham plc | 399,549 | 685,681 |
| DCC plc | 22,861 | 2,110,893 |
| IMI plc | 72,442 | 1,199,765 |
| Meggitt plc | 179,669 | 1,075,959 |
| Rolls-Royce Holdings plc * | 461,941 | 4,855,696 |
| Smiths Group plc | 100,072 | 2,127,376 |
| The Weir Group plc | 55,366 | 1,426,520 |
| Travis Perkins plc | 59,574 | 1,242,471 |
| Wolseley plc | 63,614 | 4,043,121 |
| | | 30,553,254 |
| Commercial & Professional Services 0.5% |
| Babcock International Group plc | 58,617 | 682,830 |
| Capita plc | 158,039 | 1,139,100 |
| Experian plc | 233,332 | 5,019,614 |
| G4S plc | 381,811 | 1,507,591 |
| Intertek Group plc | 41,015 | 2,158,669 |
| RELX plc | 265,477 | 5,382,468 |
| | | 15,890,272 |
| Consumer Durables & Apparel 0.3% |
| Barratt Developments plc | 257,138 | 1,929,461 |
| Burberry Group plc | 109,653 | 2,291,557 |
| Persimmon plc | 78,292 | 2,362,312 |
| Taylor Wimpey plc | 803,910 | 2,082,358 |
| The Berkeley Group Holdings plc | 31,587 | 1,332,259 |
| | | 9,997,947 |
| Consumer Services 0.6% |
| Carnival plc | 48,082 | 2,963,409 |
| Compass Group plc | 413,428 | 8,347,436 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| InterContinental Hotels Group plc | 47,524 | 2,518,871 |
| Merlin Entertainments plc | 175,038 | 1,145,675 |
| TUI AG | 127,553 | 1,855,652 |
| Whitbread plc | 46,919 | 2,451,380 |
| William Hill plc | 221,805 | 842,735 |
| | | 20,125,158 |
| Diversified Financials 0.4% |
| 3i Group plc | 245,698 | 2,525,044 |
| Aberdeen Asset Management plc | 237,683 | 858,821 |
| Hargreaves Lansdown plc | 64,972 | 1,159,942 |
| Investec plc | 154,548 | 1,144,966 |
| London Stock Exchange Group plc | 79,377 | 3,478,019 |
| Provident Financial plc | 38,709 | 1,606,705 |
| Schroders plc | 35,184 | 1,452,896 |
| | | 12,226,393 |
| Energy 2.4% |
| BP plc | 4,733,337 | 27,096,500 |
| Petrofac Ltd. | 60,315 | 635,661 |
| Royal Dutch Shell plc, A Shares | 1,093,117 | 28,386,522 |
| Royal Dutch Shell plc, B Shares | 936,233 | 24,910,313 |
| | | 81,028,996 |
| Food & Staples Retailing 0.2% |
| J. Sainsbury plc | 391,405 | 1,395,537 |
| Tesco plc * | 2,059,473 | 4,887,566 |
| WM Morrison Supermarkets plc | 564,386 | 1,753,208 |
| | | 8,036,311 |
| Food, Beverage & Tobacco 2.0% |
| Associated British Foods plc | 90,769 | 3,304,808 |
| British American Tobacco plc | 466,243 | 31,500,907 |
| Coca-Cola HBC AG CDI * | 46,186 | 1,281,341 |
| Diageo plc | 629,808 | 18,331,918 |
| Imperial Brands plc | 238,296 | 11,670,145 |
| Tate & Lyle plc | 123,305 | 1,209,219 |
| | | 67,298,338 |
| Health Care Equipment & Services 0.1% |
| Mediclinic International plc | 84,173 | 894,867 |
| Smith & Nephew plc | 218,512 | 3,589,972 |
| | | 4,484,839 |
| Household & Personal Products 0.9% |
| Reckitt Benckiser Group plc | 157,813 | 14,540,486 |
| Unilever plc | 321,982 | 16,565,425 |
| | | 31,105,911 |
| Insurance 1.1% |
| Admiral Group plc | 55,617 | 1,448,304 |
| Aviva plc | 1,023,535 | 6,960,452 |
| Direct Line Insurance Group plc | 329,168 | 1,487,473 |
| Legal & General Group plc | 1,472,816 | 4,693,973 |
| Old Mutual plc | 1,209,116 | 3,036,798 |
| Prudential plc | 647,211 | 14,364,094 |
| RSA Insurance Group plc | 249,340 | 1,923,638 |
| St. James's Place plc | 125,254 | 1,861,693 |
| Standard Life plc | 508,809 | 2,394,798 |
| | | 38,171,223 |
| Materials 1.4% |
| Anglo American plc * | 347,489 | 4,975,156 |
| Antofagasta plc | 103,519 | 1,123,154 |
| BHP Billiton plc | 529,064 | 8,065,683 |
| Croda International plc | 32,210 | 1,570,019 |
| Fresnillo plc | 54,397 | 1,022,781 |
| Glencore plc * | 3,047,122 | 11,975,611 |
| Johnson Matthey plc | 48,529 | 1,871,929 |
| Mondi plc | 94,027 | 2,432,612 |
| Security | Number
of Shares | Value ($) |
| Randgold Resources Ltd. | 23,870 | 2,099,755 |
| Rio Tinto plc | 309,132 | 12,195,317 |
| | | 47,332,017 |
| Media 0.4% |
| ITV plc | 912,832 | 2,482,560 |
| Pearson plc | 206,989 | 1,707,386 |
| Sky plc | 261,109 | 3,354,283 |
| WPP plc | 323,158 | 6,919,943 |
| | | 14,464,172 |
| Pharmaceuticals, Biotechnology & Life Sciences 1.7% |
| AstraZeneca plc | 316,731 | 18,968,815 |
| GlaxoSmithKline plc | 1,221,749 | 24,591,173 |
| Hikma Pharmaceuticals plc | 33,976 | 852,499 |
| Shire plc | 224,094 | 13,212,289 |
| | | 57,624,776 |
| Real Estate 0.3% |
| Hammerson plc | 208,256 | 1,584,490 |
| Intu Properties plc | 260,419 | 930,114 |
| Land Securities Group plc | 196,786 | 2,818,303 |
| Segro plc | 236,150 | 1,485,369 |
| The British Land Co., plc | 253,077 | 2,151,953 |
| | | 8,970,229 |
| Retailing 0.2% |
| Dixons Carphone plc | 239,157 | 1,038,901 |
| Kingfisher plc | 547,200 | 2,420,780 |
| Marks & Spencer Group plc | 395,363 | 1,876,449 |
| Next plc | 34,990 | 1,950,469 |
| | | 7,286,599 |
| Software & Services 0.1% |
| Auto Trader Group plc | 231,645 | 1,203,132 |
| The Sage Group plc | 279,754 | 2,428,292 |
| Worldpay Group plc | 426,707 | 1,657,141 |
| | | 5,288,565 |
| Telecommunication Services 0.8% |
| BT Group plc | 2,095,056 | 8,264,878 |
| Inmarsat plc | 119,483 | 1,263,639 |
| Vodafone Group plc | 6,675,453 | 17,193,561 |
| | | 26,722,078 |
| Transportation 0.0% |
| easyJet plc | 37,117 | 561,444 |
| Royal Mail plc | 210,337 | 1,096,822 |
| | | 1,658,266 |
| Utilities 0.7% |
| Centrica plc | 1,371,492 | 3,514,377 |
| National Grid plc | 942,706 | 12,206,392 |
| Severn Trent plc | 57,848 | 1,741,392 |
| SSE plc | 253,010 | 4,557,810 |
| United Utilities Group plc | 167,568 | 2,111,729 |
| | | 24,131,700 |
| | | 591,902,697 |
| Total Common Stock |
| (Cost $2,717,668,950) | | 3,311,221,395 |
|
| Preferred Stock 0.6% of net assets |
| |
| Germany 0.5% |
| Automobiles & Components 0.3% |
| Bayerische Motoren Werke AG | 14,195 | 1,167,358 |
| Porsche Automobil Holding SE | 38,475 | 2,251,759 |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Schaeffler AG | 39,555 | 682,227 |
| Volkswagen AG | 45,924 | 7,290,284 |
| | | 11,391,628 |
| Household & Personal Products 0.2% |
| Henkel AG & Co. KGaA | 45,372 | 6,173,478 |
| Materials 0.0% |
| Fuchs Petrolub SE | 16,120 | 831,457 |
| | | 18,396,563 |
| |
| Italy 0.1% |
| Banks 0.0% |
| Intesa Sanpaolo S.p.A. - RSP | 209,571 | 573,823 |
| Telecommunication Services 0.1% |
| Telecom Italia S.p.A. - RSP * | 1,475,907 | 1,053,293 |
| | | 1,627,116 |
| |
| United Kingdom 0.0% |
| Capital Goods 0.0% |
| Rolls-Royce Holdings plc *(d) | 32,797,811 | 42,480 |
| Total Preferred Stock |
| (Cost $18,339,785) | | 20,066,159 |
|
| Rights 0.0% of net assets |
| |
| Australia 0.0% |
| Telecommunication Services 0.0% |
TPG Telecom Ltd.
expires 05/12/17 *(d) | 8,158 | 3,971 |
| |
| United Kingdom 0.0% |
| Capital Goods 0.0% |
Cobham plc
expires 05/4/17 * | 159,819 | 117,988 |
| Total Rights |
| (Cost $151,087) | | 121,959 |
|
| Other Investment Company 0.6% of net assets |
| |
| United States 0.6% |
| Securities Lending Collateral 0.6% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 22,103,193 | 22,103,193 |
| Total Other Investment Company |
| (Cost $22,103,193) | | 22,103,193 |
Security
Rate, Maturity Date | Face Amount
Local Currency | Value ($) |
| Short-Term Investments 1.1% of net assets |
| |
| Time Deposits 1.1% |
| Australia & New Zealand Banking Group Ltd. |
| Australian Dollar | | |
| 0.50%, 05/01/17 (c) | 110,048 | 82,404 |
| Barclays Capital, Inc. |
| U.S. Dollar | | |
| 0.42%, 05/01/17 (c) | 2,512,115 | 2,512,115 |
Security
Rate, Maturity Date | Face Amount
Local Currency | Value ($) |
| BNP Paribas |
| U.S. Dollar | | |
| 0.42%, 05/01/17 (c) | 33,991,664 | 33,991,664 |
| Brown Brothers Harriman |
| Danish Krone | | |
| (0.60%), 05/01/17 (c) | 31,115 | 4,557 |
| New Zealand Dollar | | |
| 0.65%, 05/01/17 (c) | 5,655 | 3,883 |
| Norwegian Krone | | |
| 0.05%, 05/02/17 (c) | 81,701 | 9,516 |
| Singapore Dollar | | |
| 0.01%, 05/02/17 (c) | 1,234 | 883 |
| Swiss Franc | | |
| (1.45%), 05/02/17 (c) | 577,072 | 579,971 |
| DNB |
| Euro | | |
| (0.58%), 05/02/17 (c) | 1,192,752 | 1,299,264 |
| ING Bank |
| Hong Kong Dollar | | |
| 0.01%, 05/02/17 (c) | 1,236,514 | 158,969 |
| Skandinaviska Enskilda Banken |
| Japanese Yen | | |
| (0.22%), 05/01/17 (c) | 8,367,343 | 75,060 |
| Swedish Krone | | |
| (0.95%), 05/02/17 (c) | 581,820 | 65,688 |
| Sumitomo Mitsui Banking Corp. |
| Great British Pound | | |
| 0.05%, 05/02/17 (c) | 203,392 | 263,433 |
| Total Short-Term Investments |
| (Cost $39,047,407) | | 39,047,407 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $2,818,090,108 and the unrealized appreciation and depreciation were $779,902,609 and ($205,432,604), respectively, with a net unrealized appreciation of $574,470,005.
At 04/30/17, the values of certain foreign securities held by the fund aggregating $3,292,559,477 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial note 2(a) for additional information).
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $21,110,259. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| CDI — | CHESS Depositary Interest |
| CVA — | Dutch Certificate |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
| SDR — | Swedish Depositary Receipt |
Schwab Equity Index Funds | Semiannual Report
Schwab International Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI EAFE Index, e-mini, Long expires 06/16/17 | 595 | 54,258,050 | 1,249,105 |
Schwab Equity Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.7% | Common Stock | 3,923,808,379 | 5,255,670,949 |
| 0.3% | Other Investment Companies | 18,892,809 | 18,892,809 |
| 100.0% | Total Investments | 3,942,701,188 | 5,274,563,758 |
| (0.0%) | Other Assets and Liabilities, Net | | (1,724,175) |
| 100.0% | Net Assets | | 5,272,839,583 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.7% of net assets |
| |
| Automobiles & Components 1.4% |
| Adient plc | 12,385 | 911,041 |
| BorgWarner, Inc. | 80,567 | 3,406,373 |
| Dana, Inc. | 92,500 | 1,796,350 |
| Delphi Automotive plc | 67,000 | 5,386,800 |
| Ford Motor Co. | 1,811,441 | 20,777,228 |
| General Motors Co. | 732,368 | 25,369,227 |
| Harley-Davidson, Inc. | 61,654 | 3,502,564 |
| Lear Corp. | 26,200 | 3,737,692 |
| The Goodyear Tire & Rubber Co. | 94,890 | 3,437,865 |
| Thor Industries, Inc. | 14,600 | 1,404,228 |
| Visteon Corp. * | 25,200 | 2,594,340 |
| | | 72,323,708 |
| |
| Banks 5.1% |
| Bank of America Corp. | 1,491,794 | 34,818,472 |
| BB&T Corp. | 145,575 | 6,285,928 |
| CIT Group, Inc. | 70,200 | 3,250,962 |
| Citigroup, Inc. | 703,172 | 41,571,529 |
| Citizens Financial Group, Inc. | 104,900 | 3,850,879 |
| Comerica, Inc. | 26,700 | 1,887,690 |
| Fifth Third Bancorp | 184,890 | 4,516,863 |
| Huntington Bancshares, Inc. | 194,827 | 2,505,475 |
| JPMorgan Chase & Co. | 786,523 | 68,427,501 |
| KeyCorp | 216,857 | 3,955,472 |
| M&T Bank Corp. | 21,319 | 3,313,186 |
| New York Community Bancorp, Inc. | 137,530 | 1,827,774 |
| People's United Financial, Inc. | 89,577 | 1,564,910 |
| PHH Corp. * | 97,958 | 1,263,658 |
| Regions Financial Corp. | 286,525 | 3,939,719 |
| SunTrust Banks, Inc. | 95,760 | 5,440,125 |
| The PNC Financial Services Group, Inc. | 93,235 | 11,164,891 |
| U.S. Bancorp | 319,160 | 16,366,525 |
| Wells Fargo & Co. | 977,463 | 52,626,608 |
| | | 268,578,167 |
| |
| Capital Goods 8.4% |
| 3M Co. | 132,361 | 25,920,255 |
| AECOM * | 55,854 | 1,910,765 |
| AGCO Corp. | 47,040 | 3,010,090 |
| AMETEK, Inc. | 36,200 | 2,070,640 |
| Arconic, Inc. | 171,810 | 4,695,567 |
| Armstrong World Industries, Inc. * | 33,000 | 1,542,750 |
| Carlisle Cos., Inc. | 10,900 | 1,105,151 |
| Security | Number
of Shares | Value ($) |
| Caterpillar, Inc. | 239,137 | 24,454,150 |
| Chicago Bridge & Iron Co., N.V. | 46,600 | 1,401,728 |
| Cummins, Inc. | 60,794 | 9,176,246 |
| Deere & Co. | 161,393 | 18,013,073 |
| Dover Corp. | 56,375 | 4,446,860 |
| Eaton Corp. plc | 123,016 | 9,304,930 |
| EMCOR Group, Inc. | 21,940 | 1,442,336 |
| Emerson Electric Co. | 249,110 | 15,016,351 |
| Fastenal Co. | 58,640 | 2,620,035 |
| Flowserve Corp. | 53,475 | 2,720,273 |
| Fluor Corp. | 134,750 | 6,915,370 |
| Fortive Corp. | 27,478 | 1,738,258 |
| Fortune Brands Home & Security, Inc. | 27,600 | 1,759,224 |
| General Dynamics Corp. | 69,316 | 13,432,748 |
| General Electric Co. | 2,058,298 | 59,670,059 |
| Herc Holdings, Inc. * | 19,453 | 884,528 |
| Honeywell International, Inc. | 131,345 | 17,224,583 |
| Hubbell, Inc. | 15,484 | 1,751,705 |
| Huntington Ingalls Industries, Inc. | 8,100 | 1,627,209 |
| IDEX Corp. | 12,800 | 1,340,928 |
| Illinois Tool Works, Inc. | 90,334 | 12,474,222 |
| Ingersoll-Rand plc | 62,382 | 5,536,402 |
| Jacobs Engineering Group, Inc. | 60,540 | 3,324,857 |
| Johnson Controls International plc | 303,658 | 12,623,063 |
| KBR, Inc. | 139,300 | 1,957,165 |
| L3 Technologies, Inc. | 41,266 | 7,088,261 |
| Lincoln Electric Holdings, Inc. | 20,200 | 1,798,406 |
| Lockheed Martin Corp. | 55,684 | 15,004,054 |
| Northrop Grumman Corp. | 56,033 | 13,781,877 |
| NOW, Inc. * | 67,400 | 1,146,474 |
| Oshkosh Corp. | 47,120 | 3,269,657 |
| Owens Corning | 36,450 | 2,217,982 |
| PACCAR, Inc. | 98,621 | 6,580,979 |
| Parker-Hannifin Corp. | 41,097 | 6,608,398 |
| Pentair plc | 45,837 | 2,956,945 |
| Quanta Services, Inc. * | 80,800 | 2,863,552 |
| Raytheon Co. | 82,815 | 12,853,716 |
| Rockwell Automation, Inc. | 27,550 | 4,334,992 |
| Rockwell Collins, Inc. | 32,230 | 3,354,821 |
| Roper Technologies, Inc. | 9,000 | 1,968,300 |
| Snap-on, Inc. | 9,100 | 1,524,523 |
| Stanley Black & Decker, Inc. | 33,103 | 4,506,973 |
| Terex Corp. | 57,100 | 1,997,358 |
| Textron, Inc. | 73,820 | 3,444,441 |
| The Boeing Co. | 131,372 | 24,281,487 |
| The Timken Co. | 39,265 | 1,894,536 |
| TransDigm Group, Inc. | 7,300 | 1,801,129 |
| Trinity Industries, Inc. | 63,300 | 1,702,770 |
| Triumph Group, Inc. | 46,800 | 1,226,160 |
| United Rentals, Inc. * | 27,800 | 3,048,548 |
| United Technologies Corp. | 260,392 | 30,984,044 |
| Valmont Industries, Inc. | 9,000 | 1,371,150 |
| W.W. Grainger, Inc. | 18,838 | 3,630,083 |
| WABCO Holdings, Inc. * | 12,500 | 1,485,875 |
| WESCO International, Inc. * | 23,800 | 1,450,610 |
| Xylem, Inc. | 27,955 | 1,437,167 |
| | | 442,726,789 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Commercial & Professional Services 0.6% |
| Cintas Corp. | 17,550 | 2,149,349 |
| Equifax, Inc. | 12,230 | 1,654,841 |
| LSC Communications, Inc. | 17,317 | 447,991 |
| ManpowerGroup, Inc. | 54,890 | 5,542,792 |
| Nielsen Holdings plc | 56,800 | 2,336,184 |
| Pitney Bowes, Inc. | 79,919 | 1,062,124 |
| Republic Services, Inc. | 65,763 | 4,142,411 |
| Robert Half International, Inc. | 46,310 | 2,132,576 |
| RR Donnelley & Sons Co. | 58,113 | 730,480 |
| The Dun & Bradstreet Corp. | 10,740 | 1,177,211 |
| Verisk Analytics, Inc. * | 21,000 | 1,739,010 |
| Waste Management, Inc. | 107,914 | 7,853,981 |
| | | 30,968,950 |
| |
| Consumer Durables & Apparel 1.1% |
| Coach, Inc. | 136,675 | 5,383,628 |
| D.R. Horton, Inc. | 52,200 | 1,716,858 |
| Fossil Group, Inc. * | 72,600 | 1,252,350 |
| Garmin Ltd. | 31,870 | 1,620,271 |
| Hanesbrands, Inc. | 49,300 | 1,075,233 |
| Hasbro, Inc. | 25,541 | 2,531,369 |
| Leggett & Platt, Inc. | 34,017 | 1,787,253 |
| Mattel, Inc. | 139,135 | 3,119,407 |
| Michael Kors Holdings Ltd. * | 36,100 | 1,347,613 |
| Mohawk Industries, Inc. * | 8,835 | 2,074,370 |
| Newell Brands, Inc. | 42,603 | 2,033,867 |
| NIKE, Inc., Class B | 244,954 | 13,572,901 |
| NVR, Inc. * | 1,129 | 2,383,601 |
| Polaris Industries, Inc. (a) | 19,900 | 1,696,674 |
| PulteGroup, Inc. | 79,300 | 1,797,731 |
| PVH Corp. | 17,600 | 1,778,128 |
| Ralph Lauren Corp. | 34,620 | 2,794,526 |
| Tupperware Brands Corp. | 21,158 | 1,519,356 |
| VF Corp. | 81,180 | 4,434,863 |
| Whirlpool Corp. | 25,955 | 4,819,325 |
| | | 58,739,324 |
| |
| Consumer Services 1.8% |
| Aramark | 49,500 | 1,807,740 |
| Brinker International, Inc. | 22,055 | 974,610 |
| Carnival Corp. | 109,210 | 6,745,902 |
| Chipotle Mexican Grill, Inc. * | 4,087 | 1,939,159 |
| Darden Restaurants, Inc. | 30,562 | 2,603,577 |
| DeVry Education Group, Inc. | 55,300 | 2,093,105 |
| H&R Block, Inc. | 78,965 | 1,957,542 |
| Hilton Grand Vacations, Inc. * | 4,870 | 162,999 |
| Hilton Worldwide Holdings, Inc. | 16,233 | 957,260 |
| International Game Technology plc | 53,600 | 1,189,920 |
| Las Vegas Sands Corp. | 80,100 | 4,725,099 |
| Marriott International, Inc., Class A | 75,025 | 7,083,860 |
| McDonald's Corp. | 246,788 | 34,533,045 |
| MGM Resorts International | 84,015 | 2,580,101 |
| Royal Caribbean Cruises Ltd. | 33,229 | 3,542,211 |
| Service Corp. International | 40,500 | 1,304,910 |
| Starbucks Corp. | 122,780 | 7,374,167 |
| Wyndham Worldwide Corp. | 44,640 | 4,254,638 |
| Wynn Resorts Ltd. | 29,304 | 3,604,685 |
| Yum China Holdings, Inc. * | 37,830 | 1,290,760 |
| Yum! Brands, Inc. | 78,130 | 5,137,048 |
| | | 95,862,338 |
| |
| Security | Number
of Shares | Value ($) |
| Diversified Financials 4.5% |
| AGNC Investment Corp. | 91,300 | 1,923,691 |
| Ally Financial, Inc. | 336,100 | 6,654,780 |
| American Express Co. | 259,017 | 20,527,097 |
| Ameriprise Financial, Inc. | 55,234 | 7,061,667 |
| Annaly Capital Management, Inc. | 305,761 | 3,611,037 |
| Berkshire Hathaway, Inc., Class B * | 321,926 | 53,185,395 |
| BlackRock, Inc. | 18,600 | 7,153,002 |
| Capital One Financial Corp. | 166,532 | 13,385,842 |
| CME Group, Inc. | 41,700 | 4,845,123 |
| Discover Financial Services | 127,922 | 8,006,638 |
| Donnelley Financial Solutions, Inc. * | 6,217 | 138,142 |
| FNFV Group * | 129,000 | 1,767,300 |
| Franklin Resources, Inc. | 143,609 | 6,190,984 |
| Intercontinental Exchange, Inc. | 22,300 | 1,342,460 |
| Invesco Ltd. | 105,800 | 3,485,052 |
| Legg Mason, Inc. | 69,120 | 2,583,706 |
| Leucadia National Corp. | 76,600 | 1,944,874 |
| Moody's Corp. | 23,770 | 2,812,466 |
| Morgan Stanley | 179,283 | 7,775,504 |
| Nasdaq, Inc. | 16,583 | 1,142,071 |
| Navient Corp. | 250,800 | 3,812,160 |
| Northern Trust Corp. | 27,910 | 2,511,900 |
| S&P Global, Inc. | 32,468 | 4,356,881 |
| SLM Corp. * | 299,500 | 3,755,730 |
| State Street Corp. | 85,936 | 7,210,030 |
| Synchrony Financial | 216,100 | 6,007,580 |
| T. Rowe Price Group, Inc. | 58,845 | 4,171,522 |
| TD Ameritrade Holding Corp. | 33,100 | 1,266,737 |
| The Bank of New York Mellon Corp. | 179,349 | 8,440,164 |
| The Charles Schwab Corp. (b) | 72,715 | 2,824,978 |
| The Goldman Sachs Group, Inc. | 137,509 | 30,774,514 |
| Thomson Reuters Corp. | 94,257 | 4,282,096 |
| Voya Financial, Inc. | 59,500 | 2,224,110 |
| | | 237,175,233 |
| |
| Energy 13.4% |
| Anadarko Petroleum Corp. | 154,079 | 8,785,585 |
| Apache Corp. | 210,368 | 10,232,300 |
| Baker Hughes, Inc. | 194,486 | 11,546,634 |
| Cabot Oil & Gas Corp. | 56,500 | 1,313,060 |
| California Resources Corp. *(a) | 134,563 | 1,574,387 |
| Chesapeake Energy Corp. * | 1,010,626 | 5,315,893 |
| Chevron Corp. | 1,195,912 | 127,603,810 |
| Cimarex Energy Co. | 14,445 | 1,685,443 |
| Concho Resources, Inc. * | 12,500 | 1,583,250 |
| ConocoPhillips | 1,107,082 | 53,040,299 |
| CONSOL Energy, Inc. * | 132,435 | 2,010,363 |
| Delek US Holdings, Inc. | 81,800 | 1,968,926 |
| Denbury Resources, Inc. * | 705,700 | 1,566,654 |
| Devon Energy Corp. | 227,927 | 9,000,837 |
| Diamond Offshore Drilling, Inc. * | 103,920 | 1,498,526 |
| Energen Corp. * | 22,210 | 1,154,698 |
| Ensco plc, Class A | 341,400 | 2,693,646 |
| EOG Resources, Inc. | 98,501 | 9,111,342 |
| EQT Corp. | 21,600 | 1,255,824 |
| Exxon Mobil Corp. | 2,421,681 | 197,730,254 |
| Halliburton Co. | 288,070 | 13,216,652 |
| Helmerich & Payne, Inc. | 35,595 | 2,158,481 |
| Hess Corp. | 275,404 | 13,447,977 |
| HollyFrontier Corp. | 250,402 | 7,046,312 |
| Kinder Morgan, Inc. | 439,300 | 9,062,759 |
| Marathon Oil Corp. | 708,719 | 10,538,652 |
| Marathon Petroleum Corp. | 479,362 | 24,418,700 |
| Murphy Oil Corp. | 197,550 | 5,171,859 |
| Nabors Industries Ltd. | 224,500 | 2,321,330 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| National Oilwell Varco, Inc. | 249,001 | 8,707,565 |
| Newfield Exploration Co. * | 41,507 | 1,436,972 |
| Noble Corp. plc | 389,700 | 1,870,560 |
| Noble Energy, Inc. | 97,270 | 3,144,739 |
| Occidental Petroleum Corp. | 339,900 | 20,917,446 |
| Oceaneering International, Inc. | 69,300 | 1,828,827 |
| ONEOK, Inc. | 55,020 | 2,894,602 |
| Patterson-UTI Energy, Inc. | 77,700 | 1,681,817 |
| PBF Energy, Inc., Class A | 68,500 | 1,528,920 |
| Phillips 66 | 387,908 | 30,861,960 |
| Pioneer Natural Resources Co. | 13,000 | 2,248,870 |
| QEP Resources, Inc. * | 96,342 | 1,137,799 |
| Schlumberger Ltd. | 365,810 | 26,554,148 |
| Seadrill Ltd. *(a) | 2,249,200 | 1,551,498 |
| SM Energy Co. | 40,500 | 914,895 |
| Southwestern Energy Co. * | 179,240 | 1,346,092 |
| Superior Energy Services, Inc. * | 134,000 | 1,618,720 |
| Tesoro Corp. | 70,692 | 5,634,859 |
| The Williams Cos., Inc. | 175,909 | 5,388,093 |
| Transocean Ltd. * | 383,800 | 4,233,314 |
| Valero Energy Corp. | 475,166 | 30,700,475 |
| Weatherford International plc * | 734,100 | 4,235,757 |
| Western Refining, Inc. | 45,500 | 1,569,295 |
| Whiting Petroleum Corp. * | 139,100 | 1,154,530 |
| World Fuel Services Corp. | 130,100 | 4,791,583 |
| | | 706,007,789 |
| |
| Food & Staples Retailing 3.8% |
| Casey's General Stores, Inc. | 12,712 | 1,424,634 |
| Costco Wholesale Corp. | 143,263 | 25,432,048 |
| CVS Health Corp. | 536,716 | 44,246,867 |
| Sysco Corp. | 210,039 | 11,104,762 |
| The Kroger Co. | 462,168 | 13,703,281 |
| United Natural Foods, Inc. * | 36,700 | 1,524,151 |
| Wal-Mart Stores, Inc. | 1,000,072 | 75,185,413 |
| Walgreens Boots Alliance, Inc. | 272,382 | 23,571,938 |
| Whole Foods Market, Inc. | 163,900 | 5,961,043 |
| | | 202,154,137 |
| |
| Food, Beverage & Tobacco 4.8% |
| Altria Group, Inc. | 303,916 | 21,815,090 |
| Archer-Daniels-Midland Co. | 452,374 | 20,696,111 |
| Brown-Forman Corp., Class B | 41,954 | 1,985,263 |
| Bunge Ltd. | 159,536 | 12,608,130 |
| Campbell Soup Co. | 34,330 | 1,975,348 |
| ConAgra Brands, Inc. | 94,920 | 3,680,998 |
| Constellation Brands, Inc., Class A | 10,920 | 1,884,137 |
| Dr Pepper Snapple Group, Inc. | 46,141 | 4,228,823 |
| General Mills, Inc. | 157,618 | 9,064,611 |
| Hormel Foods Corp. | 51,878 | 1,819,880 |
| Ingredion, Inc. | 19,900 | 2,464,018 |
| Kellogg Co. | 60,537 | 4,298,127 |
| Lamb Weston Holdings, Inc. | 16,073 | 671,048 |
| McCormick & Co., Inc. - Non Voting Shares | 19,978 | 1,995,802 |
| Mead Johnson Nutrition Co. | 24,600 | 2,182,512 |
| Molson Coors Brewing Co., Class B | 23,180 | 2,222,730 |
| Mondelez International, Inc., Class A | 356,295 | 16,043,964 |
| Monster Beverage Corp. * | 28,200 | 1,279,716 |
| PepsiCo, Inc. | 346,563 | 39,258,657 |
| Philip Morris International, Inc. | 403,288 | 44,700,442 |
| Reynolds American, Inc. | 99,910 | 6,444,195 |
| The Coca-Cola Co. | 845,843 | 36,498,125 |
| The Hershey Co. | 24,912 | 2,695,478 |
| The JM Smucker Co. | 27,025 | 3,424,608 |
| Security | Number
of Shares | Value ($) |
| The Kraft Heinz Co. | 26,974 | 2,438,180 |
| Tyson Foods, Inc., Class A | 104,915 | 6,741,838 |
| | | 253,117,831 |
| |
| Health Care Equipment & Services 5.4% |
| Abbott Laboratories | 384,807 | 16,792,977 |
| Aetna, Inc. | 108,591 | 14,667,386 |
| AmerisourceBergen Corp. | 63,967 | 5,248,492 |
| Anthem, Inc. | 177,950 | 31,655,526 |
| Baxter International, Inc. | 102,453 | 5,704,583 |
| Becton, Dickinson & Co. | 39,162 | 7,322,119 |
| Boston Scientific Corp. * | 109,465 | 2,887,687 |
| C.R. Bard, Inc. | 13,300 | 4,089,484 |
| Cardinal Health, Inc. | 173,167 | 12,570,193 |
| Centene Corp. * | 23,220 | 1,727,568 |
| Cerner Corp. * | 25,100 | 1,625,225 |
| Cigna Corp. | 37,709 | 5,896,556 |
| Community Health Systems, Inc. * | 262,662 | 2,261,520 |
| Danaher Corp. | 72,856 | 6,071,090 |
| DaVita, Inc. * | 36,120 | 2,492,641 |
| DENTSPLY SIRONA, Inc. | 23,335 | 1,475,705 |
| Edwards Lifesciences Corp. * | 11,900 | 1,305,073 |
| Express Scripts Holding Co. * | 325,607 | 19,972,733 |
| HCA Holdings, Inc. * | 120,674 | 10,161,958 |
| Henry Schein, Inc. * | 19,152 | 3,328,618 |
| Humana, Inc. | 58,170 | 12,912,577 |
| IDEXX Laboratories, Inc. * | 10,500 | 1,761,165 |
| Intuitive Surgical, Inc. * | 3,379 | 2,824,405 |
| Laboratory Corp. of America Holdings * | 16,399 | 2,298,320 |
| LifePoint Health, Inc. * | 22,130 | 1,375,380 |
| Magellan Health, Inc. * | 20,700 | 1,424,160 |
| McKesson Corp. | 96,417 | 13,333,507 |
| MEDNAX, Inc. * | 17,300 | 1,044,228 |
| Medtronic plc | 194,336 | 16,147,378 |
| Owens & Minor, Inc. | 48,902 | 1,694,454 |
| Patterson Cos., Inc. | 35,075 | 1,560,487 |
| Quest Diagnostics, Inc. | 55,252 | 5,829,639 |
| ResMed, Inc. | 19,600 | 1,332,604 |
| Stryker Corp. | 45,818 | 6,248,201 |
| Tenet Healthcare Corp. * | 73,693 | 1,154,769 |
| UnitedHealth Group, Inc. | 255,996 | 44,768,580 |
| Universal Health Services, Inc., Class B | 17,448 | 2,107,020 |
| Varex Imaging Corp. * | 1,781 | 59,770 |
| Varian Medical Systems, Inc. * | 25,203 | 2,286,920 |
| WellCare Health Plans, Inc. * | 13,900 | 2,132,399 |
| Zimmer Biomet Holdings, Inc. | 36,924 | 4,417,957 |
| | | 283,971,054 |
| |
| Household & Personal Products 1.9% |
| Avon Products, Inc. * | 481,025 | 2,332,971 |
| Church & Dwight Co., Inc. | 41,600 | 2,060,448 |
| Colgate-Palmolive Co. | 170,168 | 12,258,903 |
| Herbalife Ltd. *(a) | 33,100 | 2,093,906 |
| Kimberly-Clark Corp. | 73,701 | 9,562,705 |
| Nu Skin Enterprises, Inc. | 25,500 | 1,408,365 |
| The Clorox Co. | 21,720 | 2,903,747 |
| The Estee Lauder Cos., Inc., Class A | 36,034 | 3,140,003 |
| The Procter & Gamble Co. | 735,735 | 64,251,737 |
| | | 100,012,785 |
| |
| Insurance 3.6% |
| Aflac, Inc. | 123,498 | 9,247,530 |
| Alleghany Corp. * | 2,500 | 1,526,750 |
| American Financial Group, Inc. | 20,640 | 2,008,478 |
| American International Group, Inc. | 533,042 | 32,467,588 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Aon plc | 49,536 | 5,936,394 |
| Arch Capital Group Ltd. * | 25,575 | 2,480,008 |
| Arthur J. Gallagher & Co. | 25,800 | 1,439,898 |
| Assurant, Inc. | 32,355 | 3,113,845 |
| Assured Guaranty Ltd. | 49,200 | 1,875,996 |
| Axis Capital Holdings Ltd. | 42,650 | 2,810,635 |
| Chubb Ltd. | 65,338 | 8,967,641 |
| Cincinnati Financial Corp. | 23,680 | 1,707,091 |
| CNO Financial Group, Inc. | 85,700 | 1,805,699 |
| Everest Re Group Ltd. | 15,125 | 3,807,114 |
| First American Financial Corp. | 27,200 | 1,180,752 |
| FNF Group | 69,284 | 2,837,180 |
| Genworth Financial, Inc., Class A * | 354,100 | 1,430,564 |
| Lincoln National Corp. | 71,380 | 4,706,083 |
| Loews Corp. | 121,289 | 5,654,493 |
| Marsh & McLennan Cos., Inc. | 85,820 | 6,361,837 |
| MetLife, Inc. | 223,218 | 11,564,925 |
| Principal Financial Group, Inc. | 53,371 | 3,476,053 |
| Prudential Financial, Inc. | 87,037 | 9,315,570 |
| Reinsurance Group of America, Inc. | 19,200 | 2,400,768 |
| RenaissanceRe Holdings Ltd. | 16,225 | 2,306,708 |
| The Allstate Corp. | 131,743 | 10,709,389 |
| The Hartford Financial Services Group, Inc. | 141,427 | 6,839,410 |
| The Progressive Corp. | 194,145 | 7,711,439 |
| The Travelers Cos., Inc. | 185,972 | 22,625,354 |
| Torchmark Corp. | 26,765 | 2,053,143 |
| Unum Group | 70,125 | 3,248,891 |
| W. R. Berkley Corp. | 27,663 | 1,880,531 |
| White Mountains Insurance Group Ltd. | 1,729 | 1,485,107 |
| XL Group Ltd. | 79,585 | 3,330,632 |
| | | 190,313,496 |
| |
| Materials 4.0% |
| AdvanSix, Inc. * | 1,437 | 39,173 |
| Air Products & Chemicals, Inc. | 34,585 | 4,859,193 |
| Albemarle Corp. | 18,885 | 2,056,765 |
| Alcoa Corp. | 31,170 | 1,051,364 |
| Allegheny Technologies, Inc. | 69,611 | 1,277,362 |
| AptarGroup, Inc. | 18,900 | 1,517,670 |
| Ashland Global Holdings, Inc. | 21,735 | 2,684,273 |
| Avery Dennison Corp. | 27,400 | 2,279,954 |
| Ball Corp. | 67,080 | 5,157,781 |
| Bemis Co., Inc. | 37,038 | 1,664,117 |
| Cabot Corp. | 25,600 | 1,540,864 |
| Celanese Corp., Series A | 28,100 | 2,445,824 |
| CF Industries Holdings, Inc. | 148,255 | 3,964,339 |
| Commercial Metals Co. | 94,445 | 1,760,455 |
| Domtar Corp. | 66,982 | 2,655,836 |
| E.I. du Pont de Nemours & Co. | 185,986 | 14,832,384 |
| Eastman Chemical Co. | 46,520 | 3,709,970 |
| Ecolab, Inc. | 32,591 | 4,207,172 |
| FMC Corp. | 33,280 | 2,437,094 |
| Freeport-McMoRan, Inc. * | 1,228,740 | 15,666,435 |
| Graphic Packaging Holding Co. | 88,600 | 1,203,188 |
| Huntsman Corp. | 105,315 | 2,608,653 |
| International Flavors & Fragrances, Inc. | 11,535 | 1,598,636 |
| International Paper Co. | 153,593 | 8,289,414 |
| LyondellBasell Industries N.V., Class A | 200,280 | 16,975,733 |
| Monsanto Co. | 120,869 | 14,094,534 |
| Newmont Mining Corp. | 165,011 | 5,579,022 |
| Nucor Corp. | 134,716 | 8,262,132 |
| Owens-Illinois, Inc. * | 98,945 | 2,158,980 |
| Packaging Corp. of America | 18,021 | 1,780,114 |
| PPG Industries, Inc. | 64,800 | 7,117,632 |
| Praxair, Inc. | 72,395 | 9,047,927 |
| Reliance Steel & Aluminum Co. | 37,320 | 2,941,562 |
| Security | Number
of Shares | Value ($) |
| RPM International, Inc. | 25,765 | 1,354,208 |
| Sealed Air Corp. | 26,900 | 1,184,138 |
| Sonoco Products Co. | 30,255 | 1,582,639 |
| Steel Dynamics, Inc. | 78,550 | 2,838,797 |
| The Chemours Co. | 194,100 | 7,820,289 |
| The Dow Chemical Co. | 320,368 | 20,119,111 |
| The Mosaic Co. | 285,831 | 7,697,429 |
| The Sherwin-Williams Co. | 8,265 | 2,766,130 |
| The Valspar Corp. | 16,350 | 1,838,394 |
| United States Steel Corp. | 116,304 | 2,595,905 |
| Vulcan Materials Co. | 11,623 | 1,404,988 |
| WestRock Co. | 48,007 | 2,571,255 |
| | | 211,238,835 |
| |
| Media 3.3% |
| CBS Corp., Class B - Non Voting Shares | 150,121 | 9,992,054 |
| Charter Communications, Inc., Class A * | 9,306 | 3,212,059 |
| Comcast Corp., Class A | 983,014 | 38,524,319 |
| Discovery Communications, Inc., Class A * | 80,041 | 2,303,580 |
| Discovery Communications, Inc., Class C * | 121,967 | 3,412,637 |
| DISH Network Corp., Class A * | 35,035 | 2,257,655 |
| News Corp., Class A | 146,300 | 1,860,936 |
| News Corp., Class B | 56,300 | 731,900 |
| Omnicom Group, Inc. | 70,713 | 5,806,952 |
| Scripps Networks Interactive, Inc., Class A | 26,000 | 1,942,720 |
| TEGNA, Inc. | 81,330 | 2,072,288 |
| The Interpublic Group of Cos., Inc. | 80,605 | 1,899,860 |
| The Walt Disney Co. | 331,162 | 38,282,327 |
| Time Warner, Inc. | 318,633 | 31,630,698 |
| Time, Inc. | 84,200 | 1,279,840 |
| Twenty-First Century Fox, Inc., Class A | 331,021 | 10,109,381 |
| Twenty-First Century Fox, Inc., Class B | 146,500 | 4,374,490 |
| Viacom, Inc., Class B | 298,498 | 12,704,075 |
| | | 172,397,771 |
| |
| Pharmaceuticals, Biotechnology & Life Sciences 5.5% |
| AbbVie, Inc. | 166,322 | 10,967,273 |
| Agilent Technologies, Inc. | 47,636 | 2,622,362 |
| Allergan plc | 11,240 | 2,740,986 |
| Amgen, Inc. | 134,923 | 22,035,624 |
| Biogen, Inc. * | 19,850 | 5,383,519 |
| Bioverativ, Inc. * | 2,525 | 148,495 |
| Bristol-Myers Squibb Co. | 250,361 | 14,032,734 |
| Celgene Corp. * | 65,956 | 8,181,842 |
| Eli Lilly & Co. | 200,181 | 16,426,853 |
| Gilead Sciences, Inc. | 192,787 | 13,215,549 |
| Johnson & Johnson | 483,607 | 59,710,956 |
| Merck & Co., Inc. | 745,962 | 46,495,811 |
| Mettler-Toledo International, Inc. * | 3,700 | 1,899,654 |
| Mylan N.V. * | 88,775 | 3,315,746 |
| Perrigo Co., plc | 19,200 | 1,419,648 |
| Pfizer, Inc. | 2,130,304 | 72,259,912 |
| Thermo Fisher Scientific, Inc. | 39,045 | 6,455,310 |
| Waters Corp. * | 11,300 | 1,919,757 |
| Zoetis, Inc. | 30,600 | 1,716,966 |
| | | 290,948,997 |
| |
| Real Estate 1.2% |
| American Tower Corp. | 23,965 | 3,018,152 |
| AvalonBay Communities, Inc. | 10,599 | 2,012,114 |
| Boston Properties, Inc. | 21,290 | 2,695,314 |
| CBRE Group, Inc., Class A * | 42,900 | 1,536,249 |
| CoreCivic, Inc. | 69,400 | 2,390,830 |
| Crown Castle International Corp. | 23,680 | 2,240,128 |
| Digital Realty Trust, Inc. | 17,600 | 2,021,184 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Duke Realty Corp. | 41,700 | 1,156,341 |
| Equity Residential | 49,145 | 3,173,784 |
| GGP, Inc. | 81,800 | 1,767,698 |
| HCP, Inc. | 86,765 | 2,720,083 |
| Hospitality Properties Trust | 50,161 | 1,596,625 |
| Host Hotels & Resorts, Inc. | 188,878 | 3,390,360 |
| Iron Mountain, Inc. | 80,979 | 2,814,830 |
| Jones Lang LaSalle, Inc. | 12,700 | 1,458,722 |
| Kimco Realty Corp. | 59,260 | 1,202,385 |
| Park Hotels & Resorts, Inc. | 10,538 | 270,510 |
| Prologis, Inc. | 49,100 | 2,671,531 |
| Public Storage | 11,330 | 2,372,275 |
| Quality Care Properties, Inc. * | 8,473 | 147,007 |
| Simon Property Group, Inc. | 31,111 | 5,141,404 |
| SL Green Realty Corp. | 10,500 | 1,101,765 |
| The Macerich Co. | 18,997 | 1,185,983 |
| Ventas, Inc. | 46,678 | 2,987,859 |
| Vornado Realty Trust | 26,441 | 2,544,682 |
| Welltower, Inc. | 46,100 | 3,293,384 |
| Weyerhaeuser Co. | 169,874 | 5,753,632 |
| | | 62,664,831 |
| |
| Retailing 4.7% |
| Abercrombie & Fitch Co., Class A | 132,878 | 1,593,207 |
| Advance Auto Parts, Inc. | 9,845 | 1,399,368 |
| Amazon.com, Inc. * | 10,050 | 9,296,149 |
| American Eagle Outfitters, Inc. | 99,235 | 1,398,221 |
| AutoNation, Inc. * | 40,600 | 1,705,200 |
| AutoZone, Inc. * | 2,621 | 1,814,230 |
| Bed Bath & Beyond, Inc. | 162,505 | 6,297,069 |
| Best Buy Co., Inc. | 209,676 | 10,863,314 |
| Big Lots, Inc. | 42,265 | 2,133,960 |
| CarMax, Inc. * | 50,007 | 2,925,410 |
| Chico's FAS, Inc. | 99,000 | 1,368,180 |
| Core-Mark Holding Co., Inc. | 49,630 | 1,738,043 |
| CST Brands, Inc. | 36,700 | 1,772,243 |
| Dick's Sporting Goods, Inc. | 37,300 | 1,885,515 |
| Dillard's, Inc., Class A | 31,175 | 1,726,160 |
| Dollar General Corp. | 84,800 | 6,165,808 |
| Dollar Tree, Inc. * | 43,881 | 3,632,030 |
| Expedia, Inc. | 14,465 | 1,934,260 |
| Foot Locker, Inc. | 47,795 | 3,696,465 |
| GameStop Corp., Class A | 138,990 | 3,153,683 |
| Genuine Parts Co. | 44,500 | 4,094,890 |
| GNC Holdings, Inc., Class A (a) | 94,100 | 732,098 |
| Guess?, Inc. | 93,200 | 1,040,112 |
| J.C. Penney Co., Inc. *(a) | 228,710 | 1,230,460 |
| Kohl's Corp. | 227,645 | 8,884,984 |
| L Brands, Inc. | 67,620 | 3,571,012 |
| Liberty Interactive Corp., QVC Group, Class A * | 176,125 | 3,730,327 |
| LKQ Corp. * | 41,200 | 1,287,088 |
| Lowe's Cos., Inc. | 322,245 | 27,352,156 |
| Macy's, Inc. | 215,636 | 6,300,884 |
| Murphy USA, Inc. * | 47,400 | 3,297,618 |
| Nordstrom, Inc. | 73,555 | 3,550,500 |
| O'Reilly Automotive, Inc. * | 15,030 | 3,729,694 |
| Office Depot, Inc. | 358,600 | 1,782,242 |
| Ross Stores, Inc. | 61,880 | 4,022,200 |
| Signet Jewelers Ltd. | 23,700 | 1,560,408 |
| Staples, Inc. | 947,956 | 9,261,530 |
| Target Corp. | 367,583 | 20,529,511 |
| The Gap, Inc. | 233,875 | 6,127,525 |
| The Home Depot, Inc. | 281,543 | 43,948,862 |
| The Priceline Group, Inc. * | 3,284 | 6,064,957 |
| The TJX Cos., Inc. | 160,388 | 12,612,912 |
| Tiffany & Co. | 24,935 | 2,285,293 |
| Security | Number
of Shares | Value ($) |
| Tractor Supply Co. | 31,500 | 1,950,165 |
| Urban Outfitters, Inc. * | 56,454 | 1,291,668 |
| Williams-Sonoma, Inc. | 38,845 | 2,099,572 |
| | | 248,837,183 |
| |
| Semiconductors & Semiconductor Equipment 2.8% |
| Analog Devices, Inc. | 52,265 | 3,982,593 |
| Applied Materials, Inc. | 197,326 | 8,013,409 |
| Broadcom Ltd. | 9,388 | 2,072,964 |
| Intel Corp. | 1,846,976 | 66,768,182 |
| KLA-Tencor Corp. | 33,480 | 3,288,406 |
| Lam Research Corp. | 26,490 | 3,837,076 |
| Marvell Technology Group Ltd. | 203,530 | 3,057,021 |
| Maxim Integrated Products, Inc. | 66,100 | 2,918,315 |
| Microchip Technology, Inc. | 27,980 | 2,114,728 |
| Micron Technology, Inc. * | 300,612 | 8,317,934 |
| NVIDIA Corp. | 35,837 | 3,737,799 |
| QUALCOMM, Inc. | 354,855 | 19,069,908 |
| Skyworks Solutions, Inc. | 15,100 | 1,506,074 |
| Texas Instruments, Inc. | 209,309 | 16,573,087 |
| Versum Materials, Inc. | 3,392 | 108,612 |
| Xilinx, Inc. | 50,920 | 3,213,561 |
| | | 148,579,669 |
| |
| Software & Services 7.2% |
| Accenture plc, Class A | 121,465 | 14,733,705 |
| Activision Blizzard, Inc. | 125,200 | 6,541,700 |
| Adobe Systems, Inc. * | 27,107 | 3,625,290 |
| Akamai Technologies, Inc. * | 17,200 | 1,048,168 |
| Alliance Data Systems Corp. | 8,380 | 2,091,899 |
| Alphabet, Inc., Class A * | 18,489 | 17,093,450 |
| Alphabet, Inc., Class C * | 18,574 | 16,827,301 |
| Amdocs Ltd. | 41,600 | 2,547,584 |
| Autodesk, Inc. * | 18,100 | 1,630,267 |
| Automatic Data Processing, Inc. | 60,319 | 6,302,732 |
| Booz Allen Hamilton Holding Corp. | 36,300 | 1,304,259 |
| Broadridge Financial Solutions, Inc. | 22,700 | 1,587,638 |
| CA, Inc. | 100,305 | 3,293,013 |
| CACI International, Inc., Class A * | 11,124 | 1,312,632 |
| Citrix Systems, Inc. * | 26,863 | 2,174,291 |
| Cognizant Technology Solutions Corp., Class A * | 73,800 | 4,444,974 |
| Conduent, Inc. * | 33,505 | 546,467 |
| CSRA, Inc. | 54,100 | 1,573,228 |
| Dell Technologies, Inc., Class V * | 41,774 | 2,803,453 |
| DXC Technology Co. * | 90,215 | 6,796,798 |
| eBay, Inc. * | 142,627 | 4,765,168 |
| Electronic Arts, Inc. * | 21,908 | 2,077,317 |
| Facebook, Inc., Class A * | 33,700 | 5,063,425 |
| Fidelity National Information Services, Inc. | 68,223 | 5,743,694 |
| Fiserv, Inc. * | 38,038 | 4,531,847 |
| Global Payments, Inc. | 17,300 | 1,414,448 |
| IAC/InterActiveCorp * | 23,762 | 1,972,484 |
| International Business Machines Corp. | 432,301 | 69,293,527 |
| Intuit, Inc. | 39,022 | 4,885,945 |
| Leidos Holdings, Inc. | 42,200 | 2,222,252 |
| MasterCard, Inc., Class A | 94,638 | 11,008,292 |
| Microsoft Corp. | 1,398,828 | 95,763,765 |
| Oracle Corp. | 793,644 | 35,682,234 |
| Paychex, Inc. | 44,859 | 2,659,242 |
| PayPal Holdings, Inc. * | 62,700 | 2,992,044 |
| Symantec Corp. | 223,445 | 7,067,565 |
| Teradata Corp. * | 58,000 | 1,692,440 |
| The Western Union Co. | 210,710 | 4,184,701 |
| Total System Services, Inc. | 22,470 | 1,287,756 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Visa, Inc., Class A | 173,412 | 15,818,643 |
| Yahoo! Inc. * | 88,005 | 4,242,721 |
| | | 382,648,359 |
| |
| Technology Hardware & Equipment 5.9% |
| Amphenol Corp., Class A | 43,300 | 3,131,023 |
| Anixter International, Inc. * | 20,620 | 1,681,561 |
| Apple, Inc. | 1,043,957 | 149,964,423 |
| Arrow Electronics, Inc. * | 65,325 | 4,605,412 |
| Avnet, Inc. | 124,600 | 4,820,774 |
| Brocade Communications Systems, Inc. | 128,800 | 1,619,016 |
| CDW Corp. | 24,500 | 1,447,705 |
| Cisco Systems, Inc. | 1,283,751 | 43,737,397 |
| Corning, Inc. | 383,571 | 11,066,023 |
| F5 Networks, Inc. * | 12,000 | 1,549,560 |
| FLIR Systems, Inc. | 39,700 | 1,458,181 |
| Harris Corp. | 34,768 | 3,890,192 |
| Hewlett Packard Enterprise Co. | 701,100 | 13,061,493 |
| HP, Inc. | 1,097,291 | 20,651,017 |
| Jabil Circuit, Inc. | 135,695 | 3,937,869 |
| Juniper Networks, Inc. | 150,970 | 4,539,668 |
| Keysight Technologies, Inc. * | 37,600 | 1,407,368 |
| Motorola Solutions, Inc. | 88,772 | 7,631,729 |
| NCR Corp. * | 36,900 | 1,522,125 |
| NetApp, Inc. | 100,930 | 4,022,060 |
| Sanmina Corp. * | 41,500 | 1,545,875 |
| SYNNEX Corp. | 13,595 | 1,474,106 |
| Tech Data Corp. * | 50,640 | 4,843,716 |
| Vishay Intertechnology, Inc. | 81,840 | 1,338,084 |
| Western Digital Corp. | 111,305 | 9,913,936 |
| Xerox Corp. | 718,326 | 5,164,764 |
| | | 310,025,077 |
| |
| Telecommunication Services 3.3% |
| AT&T, Inc. | 2,412,154 | 95,593,663 |
| CenturyLink, Inc. | 525,607 | 13,492,332 |
| Frontier Communications Corp. (a) | 1,163,798 | 2,187,940 |
| Level 3 Communications, Inc. * | 31,200 | 1,895,712 |
| T-Mobile US, Inc. * | 32,900 | 2,213,183 |
| Telephone & Data Systems, Inc. | 75,627 | 2,076,717 |
| Verizon Communications, Inc. | 1,194,249 | 54,827,972 |
| | | 172,287,519 |
| |
| Transportation 2.1% |
| Alaska Air Group, Inc. | 21,100 | 1,795,399 |
| American Airlines Group, Inc. | 81,400 | 3,469,268 |
| Avis Budget Group, Inc. * | 70,490 | 2,149,945 |
| C.H. Robinson Worldwide, Inc. | 48,444 | 3,521,879 |
| CSX Corp. | 317,733 | 16,153,546 |
| Delta Air Lines, Inc. | 48,000 | 2,181,120 |
| Expeditors International of Washington, Inc. | 60,825 | 3,411,674 |
| FedEx Corp. | 101,733 | 19,298,750 |
| Hertz Global Holdings, Inc. * | 91,460 | 1,508,175 |
| JB Hunt Transport Services, Inc. | 18,945 | 1,698,609 |
| JetBlue Airways Corp. * | 72,200 | 1,576,126 |
| Kansas City Southern | 16,587 | 1,493,991 |
| Norfolk Southern Corp. | 81,979 | 9,631,713 |
| Ryder System, Inc. | 29,420 | 1,997,912 |
| Southwest Airlines Co. | 29,900 | 1,680,978 |
| Union Pacific Corp. | 221,935 | 24,847,842 |
| United Parcel Service, Inc., Class B | 117,941 | 12,673,940 |
| | | 109,090,867 |
| |
| Security | Number
of Shares | Value ($) |
| Utilities 3.9% |
| AES Corp. | 521,240 | 5,895,224 |
| Alliant Energy Corp. | 54,150 | 2,129,178 |
| Ameren Corp. | 80,190 | 4,385,591 |
| American Electric Power Co., Inc. | 146,801 | 9,957,512 |
| American Water Works Co., Inc. | 31,700 | 2,528,392 |
| Atmos Energy Corp. | 23,160 | 1,876,423 |
| Calpine Corp. * | 298,750 | 3,047,250 |
| CenterPoint Energy, Inc. | 163,470 | 4,663,799 |
| CMS Energy Corp. | 71,005 | 3,223,627 |
| Consolidated Edison, Inc. | 92,802 | 7,357,343 |
| Dominion Resources, Inc. | 134,480 | 10,412,786 |
| DTE Energy Co. | 53,130 | 5,556,867 |
| Duke Energy Corp. | 188,077 | 15,516,352 |
| Edison International | 81,976 | 6,555,621 |
| Entergy Corp. | 93,670 | 7,143,274 |
| Eversource Energy | 67,315 | 3,998,511 |
| Exelon Corp. | 410,973 | 14,231,995 |
| FirstEnergy Corp. | 232,165 | 6,951,020 |
| Great Plains Energy, Inc. | 59,770 | 1,768,594 |
| MDU Resources Group, Inc. | 69,358 | 1,865,730 |
| National Fuel Gas Co. | 23,245 | 1,287,308 |
| NextEra Energy, Inc. | 87,859 | 11,734,448 |
| NiSource, Inc. | 64,635 | 1,567,399 |
| NRG Energy, Inc. | 290,182 | 4,904,076 |
| OGE Energy Corp. | 55,784 | 1,940,168 |
| PG&E Corp. | 136,911 | 9,179,883 |
| Pinnacle West Capital Corp. | 33,085 | 2,815,203 |
| PPL Corp. | 202,475 | 7,716,322 |
| Public Service Enterprise Group, Inc. | 177,422 | 7,815,439 |
| SCANA Corp. | 35,959 | 2,384,441 |
| Sempra Energy | 57,515 | 6,500,345 |
| The Southern Co. | 268,406 | 13,366,619 |
| UGI Corp. | 44,780 | 2,246,165 |
| Vectren Corp. | 23,900 | 1,420,138 |
| WEC Energy Group, Inc. | 53,186 | 3,218,817 |
| Westar Energy, Inc. | 31,870 | 1,658,196 |
| Xcel Energy, Inc. | 137,185 | 6,180,184 |
| | | 205,000,240 |
| Total Common Stock |
| (Cost $3,923,808,379) | | 5,255,670,949 |
|
| Other Investment Companies 0.3% of net assets |
| |
| Money Market Fund 0.1% |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (c) | 7,360,159 | 7,360,159 |
| |
| Securities Lending Collateral 0.2% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (c) | 11,532,650 | 11,532,650 |
| Total Other Investment Companies |
| (Cost $18,892,809) | | 18,892,809 |
End of Investments.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
At 04/30/17, the tax basis cost of the fund's investments was $3,960,516,277 and the unrealized appreciation and depreciation were $1,473,557,989 and ($159,510,508), respectively, with a net unrealized appreciation of $1,314,047,481.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $10,472,420. |
| (b) | Issuer is affiliated with the fund's investment adviser. |
| (c) | The rate shown is the 7-day yield. |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| S&P 500 Index, e-mini, Long, expires 06/16/17 | 160 | 19,044,000 | 218,132 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 99.1% | Common Stock | 1,264,079,069 | 1,678,868,413 |
| 0.0% | Rights | 492 | — |
| 3.1% | Other Investment Companies | 52,151,103 | 52,151,103 |
| 102.2% | Total Investments | 1,316,230,664 | 1,731,019,516 |
| (2.2%) | Other Assets and Liabilities, Net | | (37,336,960) |
| 100.0% | Net Assets | | 1,693,682,556 |
| Security | Number
of Shares | Value ($) |
| Common Stock 99.1% of net assets |
| |
| Automobiles & Components 1.2% |
| American Axle & Manufacturing Holdings, Inc. * | 83,400 | 1,467,006 |
| Cooper Tire & Rubber Co. | 100,000 | 3,830,000 |
| Cooper-Standard Holding, Inc. * | 18,100 | 2,046,567 |
| Dorman Products, Inc. * | 14,600 | 1,213,990 |
| Gentex Corp. | 163,800 | 3,382,470 |
| LCI Industries | 15,695 | 1,587,549 |
| Standard Motor Products, Inc. | 24,000 | 1,219,920 |
| Superior Industries International, Inc. | 46,700 | 1,015,725 |
| Tenneco, Inc. | 58,800 | 3,706,164 |
| Tower International, Inc. | 28,600 | 775,060 |
| | | 20,244,451 |
| |
| Banks 5.4% |
| Associated Banc-Corp. | 83,000 | 2,066,700 |
| Astoria Financial Corp. | 57,300 | 1,168,347 |
| BancorpSouth, Inc. | 35,800 | 1,090,110 |
| Bank of Hawaii Corp. | 30,300 | 2,468,844 |
| Bank of the Ozarks, Inc. | 16,400 | 778,508 |
| BankUnited, Inc. | 55,900 | 1,972,711 |
| BOK Financial Corp. | 18,200 | 1,534,078 |
| Capitol Federal Financial, Inc. | 95,186 | 1,392,571 |
| Cathay General Bancorp | 24,800 | 943,640 |
| Columbia Banking System, Inc. | 20,600 | 813,906 |
| Commerce Bancshares, Inc. | 47,246 | 2,596,168 |
| Community Bank System, Inc. | 19,300 | 1,079,835 |
| Cullen/Frost Bankers, Inc. | 27,800 | 2,624,042 |
| CVB Financial Corp. | 48,680 | 1,048,567 |
| East West Bancorp, Inc. | 72,100 | 3,912,867 |
| EverBank Financial Corp. | 77,600 | 1,513,200 |
| F.N.B. Corp. | 109,300 | 1,556,432 |
| First Citizens BancShares, Inc., Class A | 4,600 | 1,601,076 |
| First Financial Bancorp | 41,600 | 1,150,240 |
| First Financial Bankshares, Inc. | 19,700 | 787,015 |
| First Horizon National Corp. | 169,400 | 3,108,490 |
| First Republic Bank | 35,500 | 3,282,330 |
| Fulton Financial Corp. | 109,200 | 2,014,740 |
| Glacier Bancorp, Inc. | 31,080 | 1,049,882 |
| Great Western Bancorp, Inc. | 21,100 | 869,320 |
| Hancock Holding Co. | 47,700 | 2,227,590 |
| IBERIABANK Corp. | 11,300 | 896,655 |
| International Bancshares Corp. | 39,100 | 1,462,340 |
| Investors Bancorp, Inc. | 71,800 | 994,430 |
| Security | Number
of Shares | Value ($) |
| MB Financial, Inc. | 25,145 | 1,068,914 |
| National Bank Holdings Corp., Class A | 28,200 | 890,274 |
| NBT Bancorp, Inc. | 22,755 | 868,786 |
| Northwest Bancshares, Inc. | 96,492 | 1,557,381 |
| Ocwen Financial Corp. * | 375,500 | 859,895 |
| Old National Bancorp | 67,525 | 1,134,420 |
| PacWest Bancorp | 21,500 | 1,061,885 |
| Park National Corp. | 9,300 | 980,499 |
| Popular, Inc. | 89,600 | 3,755,136 |
| PrivateBancorp, Inc. | 20,500 | 1,184,285 |
| Prosperity Bancshares, Inc. | 24,000 | 1,612,800 |
| Provident Financial Services, Inc. | 28,300 | 727,027 |
| Signature Bank * | 9,710 | 1,344,350 |
| SVB Financial Group * | 15,300 | 2,691,882 |
| Synovus Financial Corp. | 52,000 | 2,173,600 |
| TCF Financial Corp. | 110,400 | 1,822,704 |
| Texas Capital Bancshares, Inc. * | 11,400 | 867,540 |
| Trustmark Corp. | 51,900 | 1,724,118 |
| UMB Financial Corp. | 18,101 | 1,312,142 |
| Umpqua Holdings Corp. | 78,400 | 1,385,328 |
| United Bankshares, Inc. | 31,295 | 1,248,670 |
| Valley National Bancorp | 186,300 | 2,190,888 |
| Walter Investment Management Corp. *(a) | 373,600 | 399,752 |
| Washington Federal, Inc. | 74,700 | 2,517,390 |
| Webster Financial Corp. | 41,200 | 2,093,372 |
| Westamerica Bancorp | 20,170 | 1,109,753 |
| Wintrust Financial Corp. | 20,840 | 1,476,722 |
| Zions Bancorp | 86,900 | 3,478,607 |
| | | 91,542,754 |
| |
| Capital Goods 12.6% |
| A.O. Smith Corp. | 54,900 | 2,958,012 |
| AAR Corp. | 72,080 | 2,594,159 |
| Actuant Corp., Class A | 91,500 | 2,497,950 |
| Acuity Brands, Inc. | 11,000 | 1,937,100 |
| Aegion Corp. * | 54,915 | 1,253,160 |
| Air Lease Corp. | 38,500 | 1,468,390 |
| Aircastle Ltd. | 56,800 | 1,341,616 |
| Albany International Corp., Class A | 22,200 | 1,082,250 |
| Allegion plc | 20,400 | 1,604,256 |
| Allison Transmission Holdings, Inc. | 106,900 | 4,134,892 |
| Altra Industrial Motion Corp. | 24,600 | 1,086,090 |
| Apogee Enterprises, Inc. | 19,695 | 1,073,378 |
| Applied Industrial Technologies, Inc. | 55,920 | 3,578,880 |
| Astec Industries, Inc. | 19,250 | 1,219,488 |
| AZZ, Inc. | 13,900 | 820,795 |
| Babcock & Wilcox Enterprises, Inc. * | 93,900 | 879,843 |
| Barnes Group, Inc. | 41,265 | 2,268,337 |
| Beacon Roofing Supply, Inc. * | 47,280 | 2,343,670 |
| Briggs & Stratton Corp. | 91,400 | 2,284,086 |
| BWX Technologies, Inc. | 61,000 | 2,999,370 |
| Chart Industries, Inc. * | 39,810 | 1,453,463 |
| CIRCOR International, Inc. | 19,190 | 1,280,165 |
| Colfax Corp. * | 68,000 | 2,751,960 |
| Comfort Systems USA, Inc. | 35,000 | 1,284,500 |
| Crane Co. | 39,000 | 3,116,490 |
| Cubic Corp. | 35,190 | 1,826,361 |
| Curtiss-Wright Corp. | 29,500 | 2,757,070 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| DigitalGlobe, Inc. * | 37,800 | 1,217,160 |
| Donaldson Co., Inc. | 94,300 | 4,364,204 |
| DXP Enterprises, Inc. * | 31,200 | 1,138,176 |
| Dycom Industries, Inc. * | 16,070 | 1,697,956 |
| Encore Wire Corp. | 40,940 | 1,809,548 |
| EnerSys | 49,100 | 4,080,701 |
| EnPro Industries, Inc. | 19,470 | 1,375,555 |
| ESCO Technologies, Inc. | 19,700 | 1,159,345 |
| Esterline Technologies Corp. * | 33,500 | 3,063,575 |
| Federal Signal Corp. | 58,800 | 917,868 |
| Franklin Electric Co., Inc. | 28,460 | 1,169,706 |
| GATX Corp. | 62,900 | 3,767,710 |
| Generac Holdings, Inc. * | 69,800 | 2,454,866 |
| General Cable Corp. | 178,700 | 3,216,600 |
| Graco, Inc. | 29,340 | 3,164,319 |
| Granite Construction, Inc. | 40,100 | 2,113,671 |
| Griffon Corp. | 53,700 | 1,288,800 |
| H&E Equipment Services, Inc. | 60,020 | 1,267,622 |
| Harsco Corp. * | 238,700 | 3,115,035 |
| HD Supply Holdings, Inc. * | 58,600 | 2,361,580 |
| HEICO Corp. | 3,640 | 258,695 |
| HEICO Corp., Class A | 9,125 | 559,363 |
| Hexcel Corp. | 57,985 | 3,000,724 |
| Hillenbrand, Inc. | 48,500 | 1,789,650 |
| Hyster-Yale Materials Handling, Inc. | 21,200 | 1,274,332 |
| Kaman Corp. | 32,780 | 1,573,768 |
| Kennametal, Inc. | 129,700 | 5,392,926 |
| KLX, Inc. * | 59,800 | 2,828,540 |
| Lennox International, Inc. | 22,500 | 3,721,275 |
| Lindsay Corp. | 12,300 | 1,068,378 |
| Masco Corp. | 114,000 | 4,220,280 |
| Masonite International Corp. * | 19,200 | 1,597,440 |
| MasTec, Inc. * | 75,610 | 3,338,181 |
| Meritor, Inc. * | 61,300 | 1,091,753 |
| Moog, Inc., Class A * | 47,100 | 3,233,415 |
| MRC Global, Inc. * | 231,400 | 4,218,422 |
| MSC Industrial Direct Co., Inc., Class A | 44,300 | 3,966,179 |
| Mueller Industries, Inc. | 101,000 | 3,236,040 |
| Mueller Water Products, Inc., Class A | 80,000 | 900,000 |
| MYR Group, Inc. * | 31,000 | 1,310,060 |
| National Presto Industries, Inc. | 9,400 | 980,890 |
| Nordson Corp. | 30,750 | 3,849,900 |
| Orbital ATK, Inc. | 28,200 | 2,791,800 |
| Primoris Services Corp. | 49,500 | 1,137,015 |
| Quanex Building Products Corp. | 50,350 | 1,027,140 |
| Raven Industries, Inc. | 37,830 | 1,172,730 |
| RBC Bearings, Inc. * | 10,600 | 1,063,180 |
| Regal Beloit Corp. | 61,200 | 4,825,620 |
| Rexnord Corp. * | 70,300 | 1,715,320 |
| Rush Enterprises, Inc., Class A * | 62,960 | 2,376,740 |
| Simpson Manufacturing Co., Inc. | 29,485 | 1,229,819 |
| Spirit AeroSystems Holdings, Inc., Class A | 71,800 | 4,104,088 |
| SPX Corp. * | 70,800 | 1,703,448 |
| SPX FLOW, Inc. * | 83,200 | 3,006,848 |
| Standex International Corp. | 9,700 | 911,315 |
| Teledyne Technologies, Inc. * | 23,900 | 3,222,437 |
| Tennant Co. | 17,480 | 1,280,410 |
| Textainer Group Holdings Ltd. | 66,500 | 994,175 |
| The Greenbrier Cos., Inc. | 33,720 | 1,465,134 |
| The Middleby Corp. * | 13,624 | 1,854,635 |
| The Toro Co. | 58,740 | 3,813,401 |
| Titan International, Inc. | 125,375 | 1,342,766 |
| Titan Machinery, Inc. * | 62,600 | 992,210 |
| TriMas Corp. * | 55,500 | 1,273,725 |
| Tutor Perini Corp. * | 89,300 | 2,754,905 |
| Universal Forest Products, Inc. | 26,470 | 2,522,326 |
| USG Corp. * | 24,200 | 733,260 |
| Wabash National Corp. | 69,700 | 1,587,766 |
| Security | Number
of Shares | Value ($) |
| Wabtec Corp. | 42,120 | 3,533,447 |
| Watsco, Inc. | 21,145 | 2,934,926 |
| Watts Water Technologies, Inc., Class A | 26,555 | 1,651,721 |
| Woodward, Inc. | 38,200 | 2,584,994 |
| | | 213,657,240 |
| |
| Commercial & Professional Services 4.6% |
| ABM Industries, Inc. | 87,200 | 3,766,168 |
| ACCO Brands Corp. * | 119,700 | 1,705,725 |
| Brady Corp., Class A | 45,900 | 1,787,805 |
| CBIZ, Inc. * | 68,100 | 1,072,575 |
| Clean Harbors, Inc. * | 48,030 | 2,791,023 |
| Copart, Inc. * | 121,800 | 3,763,620 |
| Covanta Holding Corp. | 170,900 | 2,486,595 |
| Deluxe Corp. | 42,900 | 3,084,939 |
| Ennis, Inc. | 47,400 | 834,240 |
| Essendant, Inc. | 183,500 | 3,064,450 |
| FTI Consulting, Inc. * | 54,300 | 1,878,237 |
| Healthcare Services Group, Inc. | 36,555 | 1,678,240 |
| Herman Miller, Inc. | 50,510 | 1,671,881 |
| HNI Corp. | 41,700 | 1,949,892 |
| Huron Consulting Group, Inc. * | 18,061 | 803,715 |
| ICF International, Inc. * | 22,400 | 988,960 |
| Insperity, Inc. | 13,960 | 1,275,246 |
| Interface, Inc. | 55,285 | 1,100,172 |
| KAR Auction Services, Inc. | 73,100 | 3,188,622 |
| Kelly Services, Inc., Class A | 140,800 | 3,142,656 |
| Kforce, Inc. | 59,800 | 1,357,460 |
| Knoll, Inc. | 36,000 | 862,560 |
| Korn/Ferry International | 44,230 | 1,433,052 |
| Matthews International Corp., Class A | 16,715 | 1,145,813 |
| McGrath RentCorp | 30,825 | 1,073,018 |
| Mobile Mini, Inc. | 25,300 | 726,110 |
| MSA Safety, Inc. | 24,325 | 1,893,701 |
| Navigant Consulting, Inc. * | 56,825 | 1,362,095 |
| On Assignment, Inc. * | 30,500 | 1,578,985 |
| Quad Graphics, Inc. | 101,500 | 2,665,390 |
| Resources Connection, Inc. | 72,560 | 1,008,584 |
| Rollins, Inc. | 36,933 | 1,434,108 |
| Steelcase, Inc., Class A | 129,500 | 2,207,975 |
| Stericycle, Inc. * | 43,100 | 3,678,154 |
| Team, Inc. * | 30,200 | 812,380 |
| Tetra Tech, Inc. | 58,895 | 2,588,435 |
| The Brink's Co. | 60,300 | 3,702,420 |
| TrueBlue, Inc. * | 63,030 | 1,723,871 |
| UniFirst Corp. | 13,105 | 1,824,216 |
| Viad Corp. | 30,365 | 1,372,498 |
| West Corp. | 61,700 | 1,646,773 |
| | | 78,132,359 |
| |
| Consumer Durables & Apparel 2.8% |
| American Outdoor Brands Corp. * | 42,500 | 941,375 |
| Brunswick Corp. | 63,400 | 3,597,950 |
| CalAtlantic Group, Inc. | 25,400 | 919,988 |
| Carter's, Inc. | 37,000 | 3,405,480 |
| Columbia Sportswear Co. | 19,760 | 1,118,811 |
| Crocs, Inc. * | 175,360 | 1,092,493 |
| Deckers Outdoor Corp. * | 54,150 | 3,226,799 |
| Ethan Allen Interiors, Inc. | 23,500 | 700,300 |
| G-III Apparel Group Ltd. * | 62,100 | 1,471,770 |
| Helen of Troy Ltd. * | 22,930 | 2,155,420 |
| Iconix Brand Group, Inc. * | 224,800 | 1,573,600 |
| KB Home | 56,900 | 1,172,140 |
| La-Z-Boy, Inc. | 61,220 | 1,708,038 |
| Lennar Corp., Class A | 85,600 | 4,322,800 |
| lululemon Athletica, Inc. * | 34,800 | 1,809,600 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| M.D.C. Holdings, Inc. | 48,475 | 1,503,210 |
| Meritage Homes Corp. * | 33,200 | 1,293,140 |
| Oxford Industries, Inc. | 13,600 | 788,528 |
| Skechers U.S.A., Inc., Class A * | 67,135 | 1,695,159 |
| Steven Madden Ltd. * | 60,322 | 2,295,252 |
| Sturm, Ruger & Co., Inc. (a) | 22,000 | 1,329,900 |
| Tempur Sealy International, Inc. * | 39,115 | 1,836,449 |
| Toll Brothers, Inc. | 55,700 | 2,004,643 |
| Under Armour, Inc., Class A *(a) | 35,760 | 768,482 |
| Under Armour, Inc., Class C * | 45,688 | 886,804 |
| Unifi, Inc. * | 27,000 | 757,890 |
| Vista Outdoor, Inc. * | 53,200 | 1,040,592 |
| Wolverine World Wide, Inc. | 82,980 | 2,000,648 |
| | | 47,417,261 |
| |
| Consumer Services 5.1% |
| BJ's Restaurants, Inc. * | 24,000 | 1,082,400 |
| Bloomin' Brands, Inc. | 116,000 | 2,516,040 |
| Bob Evans Farms, Inc. | 47,155 | 3,147,125 |
| Boyd Gaming Corp. * | 43,300 | 982,044 |
| Bright Horizons Family Solutions, Inc. * | 16,600 | 1,263,592 |
| Buffalo Wild Wings, Inc. * | 10,100 | 1,591,255 |
| Caesars Entertainment Corp. *(a) | 129,000 | 1,431,900 |
| Capella Education Co. | 17,600 | 1,677,280 |
| Career Education Corp. * | 155,700 | 1,580,355 |
| Choice Hotels International, Inc. | 28,240 | 1,770,648 |
| Churchill Downs, Inc. | 6,100 | 1,017,480 |
| Cracker Barrel Old Country Store, Inc. (a) | 13,020 | 2,085,674 |
| DineEquity, Inc. | 19,830 | 1,121,188 |
| Domino's Pizza, Inc. | 15,000 | 2,720,850 |
| Dunkin' Brands Group, Inc. | 45,900 | 2,563,974 |
| Extended Stay America, Inc. | 47,600 | 830,144 |
| Graham Holdings Co., Class B | 7,100 | 4,272,070 |
| Grand Canyon Education, Inc. * | 19,600 | 1,473,136 |
| Houghton Mifflin Harcourt Co. * | 91,600 | 1,053,400 |
| Hyatt Hotels Corp., Class A * | 19,800 | 1,098,900 |
| ILG, Inc. | 47,000 | 1,133,170 |
| International Speedway Corp., Class A | 23,250 | 862,575 |
| Jack in the Box, Inc. | 28,400 | 2,895,948 |
| K12, Inc. * | 60,600 | 1,142,310 |
| La Quinta Holdings, Inc. * | 69,700 | 983,467 |
| Marriott Vacations Worldwide Corp. | 20,800 | 2,291,744 |
| Norwegian Cruise Line Holdings Ltd. * | 57,400 | 3,095,582 |
| Panera Bread Co., Class A * | 17,775 | 5,557,887 |
| Papa John's International, Inc. | 9,420 | 744,745 |
| Penn National Gaming, Inc. * | 119,200 | 2,202,816 |
| Red Robin Gourmet Burgers, Inc. * | 23,380 | 1,373,575 |
| Regis Corp. * | 130,200 | 1,420,482 |
| Ruby Tuesday, Inc. * | 395,750 | 1,009,162 |
| SeaWorld Entertainment, Inc. | 136,100 | 2,385,833 |
| ServiceMaster Global Holdings, Inc. * | 28,200 | 1,074,420 |
| Six Flags Entertainment Corp. | 36,800 | 2,304,048 |
| Sotheby's * | 50,220 | 2,378,419 |
| Strayer Education, Inc. | 26,900 | 2,332,499 |
| Texas Roadhouse, Inc. | 42,510 | 1,992,869 |
| The Cheesecake Factory, Inc. | 52,735 | 3,383,478 |
| The Wendy's Co. | 283,900 | 4,184,686 |
| Vail Resorts, Inc. | 10,860 | 2,146,588 |
| Weight Watchers International, Inc. *(a) | 179,092 | 3,739,441 |
| | | 85,915,199 |
| |
| Diversified Financials 5.1% |
| Affiliated Managers Group, Inc. | 21,900 | 3,626,421 |
| Anworth Mortgage Asset Corp. | 186,755 | 1,094,384 |
| BGC Partners, Inc., Class A | 110,100 | 1,252,938 |
| Capstead Mortgage Corp. | 116,350 | 1,296,139 |
| Security | Number
of Shares | Value ($) |
| CBOE Holdings, Inc. | 37,700 | 3,106,857 |
| Chimera Investment Corp. | 154,000 | 3,135,440 |
| Credit Acceptance Corp. *(a) | 6,000 | 1,219,500 |
| CYS Investments, Inc. | 127,200 | 1,085,016 |
| E*TRADE Financial Corp. * | 112,800 | 3,897,240 |
| Eaton Vance Corp. | 79,000 | 3,391,470 |
| Evercore Partners, Inc., Class A | 22,000 | 1,622,500 |
| EZCORP, Inc., Class A * | 148,300 | 1,342,115 |
| FactSet Research Systems, Inc. | 14,365 | 2,345,230 |
| Federated Investors, Inc., Class B | 94,900 | 2,545,218 |
| FirstCash, Inc. | 51,090 | 2,654,126 |
| Greenhill & Co., Inc. | 52,235 | 1,321,546 |
| Invesco Mortgage Capital, Inc. | 118,800 | 1,937,628 |
| Janus Capital Group, Inc. | 128,500 | 1,755,310 |
| KCG Holdings, Inc., Class A * | 55,700 | 1,108,430 |
| Lazard Ltd., Class A | 71,300 | 3,061,622 |
| LPL Financial Holdings, Inc. | 104,300 | 4,384,772 |
| MarketAxess Holdings, Inc. | 5,300 | 1,020,356 |
| MFA Financial, Inc. | 318,400 | 2,645,904 |
| Morningstar, Inc. | 11,700 | 855,621 |
| MSCI, Inc. | 31,800 | 3,190,176 |
| Nelnet, Inc., Class A | 29,040 | 1,307,090 |
| New Residential Investment Corp. | 160,700 | 2,678,869 |
| OneMain Holdings, Inc. * | 53,000 | 1,235,960 |
| PennyMac Mortgage Investment Trust | 90,800 | 1,623,504 |
| PRA Group, Inc. * | 36,600 | 1,178,520 |
| Raymond James Financial, Inc. | 53,800 | 4,009,176 |
| Redwood Trust, Inc. | 90,200 | 1,539,714 |
| Santander Consumer USA Holdings, Inc. * | 255,300 | 3,252,522 |
| SEI Investments Co. | 67,400 | 3,417,854 |
| Starwood Property Trust, Inc. | 97,400 | 2,210,006 |
| Stifel Financial Corp. * | 29,660 | 1,449,484 |
| Two Harbors Investment Corp. | 194,800 | 1,946,052 |
| Waddell & Reed Financial, Inc., Class A | 196,200 | 3,529,638 |
| Western Asset Mortgage Capital Corp. | 76,700 | 807,651 |
| World Acceptance Corp. * | 35,560 | 1,881,124 |
| | | 86,963,123 |
| |
| Energy 4.1% |
| Alon USA Energy, Inc. | 173,200 | 2,093,988 |
| Antero Resources Corp. * | 52,900 | 1,120,951 |
| Archrock, Inc. | 172,600 | 2,036,680 |
| Atwood Oceanics, Inc. * | 258,700 | 2,025,621 |
| Bill Barrett Corp. * | 230,300 | 884,352 |
| Bristow Group, Inc. | 184,300 | 2,464,091 |
| CARBO Ceramics, Inc. * | 129,280 | 888,153 |
| Carrizo Oil & Gas, Inc. * | 26,700 | 671,505 |
| Continental Resources, Inc. * | 30,600 | 1,297,746 |
| CVR Energy, Inc. (a) | 87,400 | 1,913,186 |
| Dril-Quip, Inc. * | 34,485 | 1,777,702 |
| EP Energy Corp., Class A *(a) | 166,200 | 751,224 |
| Forum Energy Technologies, Inc. * | 71,900 | 1,215,110 |
| Golar LNG Ltd. | 55,400 | 1,413,254 |
| Green Plains, Inc. | 98,500 | 2,265,500 |
| Gulfport Energy Corp. * | 37,000 | 587,560 |
| Helix Energy Solutions Group, Inc. * | 192,000 | 1,175,040 |
| Hornbeck Offshore Services, Inc. *(a) | 191,980 | 654,652 |
| Laredo Petroleum, Inc. * | 67,600 | 869,336 |
| Matrix Service Co. * | 40,800 | 479,400 |
| McDermott International, Inc. * | 462,900 | 3,027,366 |
| Newpark Resources, Inc. * | 233,240 | 1,784,286 |
| Nordic American Tankers Ltd. (a) | 92,085 | 764,305 |
| Oasis Petroleum, Inc. * | 143,800 | 1,716,972 |
| Oil States International, Inc. * | 97,800 | 2,909,550 |
| PDC Energy, Inc. * | 12,955 | 715,505 |
| Pioneer Energy Services Corp. * | 286,000 | 872,300 |
| Range Resources Corp. | 105,000 | 2,781,450 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Renewable Energy Group, Inc. * | 124,000 | 1,295,800 |
| REX American Resources Corp. * | 9,000 | 852,120 |
| Rowan Cos. plc, Class A * | 183,400 | 2,580,438 |
| RPC, Inc. (a) | 74,600 | 1,355,482 |
| SEACOR Holdings, Inc. * | 47,500 | 3,118,850 |
| SemGroup Corp., Class A | 42,100 | 1,401,930 |
| Ship Finance International Ltd. (a) | 65,700 | 923,085 |
| Targa Resources Corp. | 62,800 | 3,462,164 |
| Teekay Corp. | 202,100 | 1,754,228 |
| Tesco Corp. * | 124,300 | 814,165 |
| TETRA Technologies, Inc. * | 129,460 | 431,102 |
| Tidewater, Inc. *(a) | 1,412,800 | 1,238,319 |
| Unit Corp. * | 157,300 | 3,380,377 |
| US Silica Holdings, Inc. | 23,500 | 975,250 |
| W&T Offshore, Inc. * | 566,100 | 1,154,844 |
| WPX Energy, Inc. * | 250,600 | 2,989,658 |
| | | 68,884,597 |
| |
| Food & Staples Retailing 0.9% |
| Ingles Markets, Inc., Class A | 40,900 | 1,910,030 |
| Performance Food Group Co. * | 60,700 | 1,511,430 |
| PriceSmart, Inc. | 16,740 | 1,455,543 |
| Rite Aid Corp. * | 489,000 | 1,956,000 |
| SpartanNash, Co. | 77,900 | 2,866,720 |
| Sprouts Farmers Market, Inc. * | 69,400 | 1,548,314 |
| SUPERVALU, Inc. * | 420,100 | 1,722,410 |
| The Andersons, Inc. | 70,137 | 2,619,617 |
| | | 15,590,064 |
| |
| Food, Beverage & Tobacco 2.4% |
| B&G Foods, Inc. | 28,700 | 1,205,400 |
| Cal-Maine Foods, Inc. (a) | 33,900 | 1,279,725 |
| Darling Ingredients, Inc. * | 176,220 | 2,666,209 |
| Dean Foods Co. | 139,300 | 2,749,782 |
| Flowers Foods, Inc. | 197,150 | 3,866,111 |
| Fresh Del Monte Produce, Inc. | 52,200 | 3,199,860 |
| J&J Snack Foods Corp. | 10,135 | 1,363,968 |
| Lancaster Colony Corp. | 14,465 | 1,821,144 |
| Pilgrim's Pride Corp. | 95,600 | 2,481,776 |
| Pinnacle Foods, Inc. | 56,900 | 3,308,735 |
| Sanderson Farms, Inc. | 34,100 | 3,948,098 |
| Snyder's-Lance, Inc. | 51,788 | 1,826,045 |
| The Boston Beer Co., Inc., Class A * | 5,600 | 808,360 |
| The Hain Celestial Group, Inc. * | 44,140 | 1,632,739 |
| TreeHouse Foods, Inc. * | 29,485 | 2,582,886 |
| Universal Corp. | 55,500 | 4,076,475 |
| Vector Group Ltd. | 59,578 | 1,294,034 |
| | | 40,111,347 |
| |
| Health Care Equipment & Services 3.7% |
| Alere, Inc. * | 39,200 | 1,927,464 |
| Align Technology, Inc. * | 12,900 | 1,736,598 |
| Allscripts Healthcare Solutions, Inc. * | 140,400 | 1,680,588 |
| Amedisys, Inc. * | 20,170 | 1,093,214 |
| Analogic Corp. | 10,165 | 730,355 |
| Brookdale Senior Living, Inc. * | 171,500 | 2,227,785 |
| Chemed Corp. | 17,195 | 3,462,729 |
| CONMED Corp. | 25,195 | 1,238,586 |
| Envision Healthcare Corp. * | 72,099 | 4,039,707 |
| Haemonetics Corp. * | 34,500 | 1,444,860 |
| Halyard Health, Inc. * | 74,100 | 2,926,950 |
| HealthSouth Corp. | 61,400 | 2,879,660 |
| Hill-Rom Holdings, Inc. | 48,800 | 3,691,232 |
| HMS Holdings Corp. * | 41,000 | 839,270 |
| Hologic, Inc. * | 49,500 | 2,234,925 |
| Security | Number
of Shares | Value ($) |
| Integer Holdings Corp. * | 29,600 | 1,087,800 |
| Invacare Corp. | 119,365 | 1,754,666 |
| Kindred Healthcare, Inc. | 321,022 | 3,081,811 |
| LHC Group, Inc. * | 17,000 | 919,700 |
| Masimo Corp. * | 20,000 | 2,054,800 |
| Molina Healthcare, Inc. * | 44,657 | 2,223,472 |
| PharMerica Corp. * | 60,540 | 1,428,744 |
| Quality Systems, Inc. * | 70,100 | 999,626 |
| Select Medical Holdings Corp. * | 228,400 | 3,140,500 |
| Teleflex, Inc. | 15,100 | 3,124,039 |
| The Cooper Cos., Inc. | 16,100 | 3,225,313 |
| Triple-S Management Corp., Class B * | 76,900 | 1,391,890 |
| VCA, Inc. * | 37,600 | 3,443,032 |
| West Pharmaceutical Services, Inc. | 25,480 | 2,344,925 |
| | | 62,374,241 |
| |
| Household & Personal Products 0.8% |
| Central Garden & Pet Co., Class A * | 58,400 | 2,057,432 |
| Edgewell Personal Care Co. * | 50,100 | 3,581,649 |
| Energizer Holdings, Inc. | 60,100 | 3,559,723 |
| HRG Group, Inc. * | 86,400 | 1,728,864 |
| Spectrum Brands Holdings, Inc. | 9,400 | 1,351,062 |
| WD-40 Co. | 7,415 | 777,463 |
| | | 13,056,193 |
| |
| Insurance 3.8% |
| Allied World Assurance Co. Holdings AG | 83,200 | 4,417,088 |
| Ambac Financial Group, Inc. * | 75,900 | 1,474,737 |
| American Equity Investment Life Holding Co. | 109,615 | 2,600,068 |
| American National Insurance Co. | 8,000 | 935,360 |
| AmTrust Financial Services, Inc. | 41,600 | 667,680 |
| Argo Group International Holdings Ltd. | 28,970 | 1,910,571 |
| Aspen Insurance Holdings Ltd. | 76,500 | 4,004,775 |
| Brown & Brown, Inc. | 62,100 | 2,664,090 |
| CNA Financial Corp. | 28,000 | 1,267,280 |
| Employers Holdings, Inc. | 26,500 | 1,060,000 |
| Erie Indemnity Co., Class A | 27,700 | 3,429,814 |
| Horace Mann Educators Corp. | 28,890 | 1,116,599 |
| Infinity Property & Casualty Corp. | 13,665 | 1,356,251 |
| James River Group Holdings Ltd. | 21,200 | 923,472 |
| Kemper Corp. | 68,200 | 2,683,670 |
| Maiden Holdings Ltd. | 58,600 | 723,710 |
| Markel Corp. * | 3,782 | 3,667,027 |
| MBIA, Inc. * | 207,700 | 1,744,680 |
| Mercury General Corp. | 34,300 | 2,109,107 |
| Old Republic International Corp. | 208,100 | 4,303,508 |
| Primerica, Inc. | 51,200 | 4,290,560 |
| ProAssurance Corp. | 53,100 | 3,286,890 |
| RLI Corp. | 29,700 | 1,699,434 |
| Safety Insurance Group, Inc. | 17,005 | 1,231,162 |
| Selective Insurance Group, Inc. | 31,800 | 1,679,040 |
| Stewart Information Services Corp. | 35,900 | 1,703,096 |
| The Hanover Insurance Group, Inc. | 35,800 | 3,160,066 |
| Validus Holdings Ltd. | 73,500 | 4,063,080 |
| | | 64,172,815 |
| |
| Materials 6.5% |
| A. Schulman, Inc. | 59,433 | 1,881,054 |
| AK Steel Holding Corp. * | 132,000 | 836,880 |
| Axalta Coating Systems Ltd. * | 70,500 | 2,211,585 |
| Berry Global Group, Inc. * | 46,600 | 2,330,000 |
| Boise Cascade Co. * | 97,600 | 2,976,800 |
| Calgon Carbon Corp. | 58,100 | 845,355 |
| Carpenter Technology Corp. | 68,200 | 2,768,920 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Century Aluminum Co. * | 116,800 | 1,593,152 |
| Clearwater Paper Corp. * | 31,860 | 1,548,396 |
| Cliffs Natural Resources, Inc. * | 583,300 | 3,919,776 |
| Compass Minerals International, Inc. | 29,630 | 1,955,580 |
| Crown Holdings, Inc. * | 72,000 | 4,038,480 |
| Eagle Materials, Inc. | 16,070 | 1,542,238 |
| Ferro Corp. * | 65,230 | 1,168,922 |
| Greif, Inc., Class A | 62,200 | 3,646,164 |
| H.B. Fuller Co. | 42,280 | 2,233,652 |
| Hecla Mining Co. | 154,400 | 841,480 |
| Innophos Holdings, Inc. | 34,850 | 1,670,709 |
| Innospec, Inc. | 19,780 | 1,305,480 |
| Kaiser Aluminum Corp. | 24,580 | 2,074,798 |
| KapStone Paper & Packaging Corp. | 74,700 | 1,575,423 |
| Koppers Holdings, Inc. * | 28,160 | 1,195,392 |
| Kraton Corp. * | 39,400 | 1,288,774 |
| Louisiana-Pacific Corp. * | 78,300 | 2,015,442 |
| Martin Marietta Materials, Inc. | 19,100 | 4,205,629 |
| Materion Corp. | 48,460 | 1,843,903 |
| Minerals Technologies, Inc. | 22,620 | 1,780,194 |
| Neenah Paper, Inc. | 11,500 | 901,025 |
| NewMarket Corp. | 7,095 | 3,339,616 |
| Olin Corp. | 126,200 | 4,054,806 |
| P.H. Glatfelter Co. | 81,045 | 1,743,278 |
| Platform Specialty Products Corp. * | 80,500 | 1,140,685 |
| PolyOne Corp. | 88,400 | 3,466,164 |
| Quaker Chemical Corp. | 9,100 | 1,315,860 |
| Royal Gold, Inc. | 15,800 | 1,116,744 |
| Schnitzer Steel Industries, Inc., Class A | 134,510 | 2,542,239 |
| Schweitzer-Mauduit International, Inc. | 34,272 | 1,475,410 |
| Sensient Technologies Corp. | 35,200 | 2,879,360 |
| Silgan Holdings, Inc. | 56,400 | 3,418,968 |
| Southern Copper Corp. | 119,600 | 4,230,252 |
| Stepan Co. | 22,930 | 1,944,464 |
| Stillwater Mining Co. * | 73,970 | 1,329,981 |
| SunCoke Energy, Inc. * | 165,800 | 1,520,386 |
| The Scotts Miracle-Gro Co. | 36,500 | 3,525,900 |
| TimkenSteel Corp. * | 186,000 | 2,804,880 |
| Trinseo S.A. | 19,500 | 1,294,800 |
| Tronox Ltd., Class A | 206,300 | 3,406,013 |
| W.R. Grace & Co. | 30,000 | 2,091,600 |
| Westlake Chemical Corp. | 38,000 | 2,365,500 |
| Worthington Industries, Inc. | 51,700 | 2,248,950 |
| | | 109,451,059 |
| |
| Media 2.0% |
| AMC Networks, Inc., Class A * | 27,600 | 1,647,168 |
| Cable One, Inc. | 2,630 | 1,793,292 |
| Cinemark Holdings, Inc. | 87,100 | 3,762,720 |
| Gannett Co., Inc. | 352,300 | 2,945,228 |
| John Wiley & Sons, Inc., Class A | 43,600 | 2,297,720 |
| Lions Gate Entertainment Corp., Class A | 23,700 | 620,229 |
| Lions Gate Entertainment Corp., Class B * | 28,855 | 688,192 |
| Live Nation Entertainment, Inc. * | 81,500 | 2,621,040 |
| Loral Space & Communications, Inc. * | 23,300 | 893,555 |
| Meredith Corp. | 35,700 | 2,090,235 |
| National CineMedia, Inc. | 84,100 | 998,267 |
| Regal Entertainment Group, Class A | 94,300 | 2,081,201 |
| Scholastic Corp. | 47,500 | 2,053,425 |
| Sinclair Broadcast Group, Inc., Class A | 49,519 | 1,953,524 |
| Sirius XM Holdings, Inc. (a) | 710,000 | 3,514,500 |
| The New York Times Co., Class A | 110,100 | 1,590,945 |
| Tribune Media Co., Class A | 72,400 | 2,646,944 |
| | | 34,198,185 |
| |
| Security | Number
of Shares | Value ($) |
| Pharmaceuticals, Biotechnology & Life Sciences 2.6% |
| Alexion Pharmaceuticals, Inc. * | 22,500 | 2,875,050 |
| Bio-Rad Laboratories, Inc., Class A * | 13,400 | 2,924,684 |
| Bio-Techne Corp. | 13,865 | 1,484,664 |
| Bruker Corp. | 44,700 | 1,090,233 |
| Catalent, Inc. * | 29,700 | 869,616 |
| Charles River Laboratories International, Inc. * | 31,500 | 2,825,550 |
| Endo International plc * | 64,100 | 728,817 |
| Illumina, Inc. * | 16,560 | 3,061,282 |
| Impax Laboratories, Inc. * | 81,200 | 1,140,860 |
| Mallinckrodt plc * | 39,321 | 1,844,941 |
| Myriad Genetics, Inc. * | 109,400 | 2,011,866 |
| PAREXEL International Corp. * | 21,720 | 1,386,388 |
| PDL BioPharma, Inc. | 731,250 | 1,645,312 |
| PerkinElmer, Inc. | 59,300 | 3,523,013 |
| Prestige Brands Holdings, Inc. * | 15,200 | 872,632 |
| QIAGEN N.V. * | 92,755 | 2,790,998 |
| Quintiles IMS Holdings, Inc. * | 61,826 | 5,210,695 |
| Regeneron Pharmaceuticals, Inc. * | 5,300 | 2,058,997 |
| United Therapeutics Corp. * | 20,900 | 2,627,130 |
| Vertex Pharmaceuticals, Inc. * | 8,200 | 970,060 |
| VWR Corp. * | 50,600 | 1,429,956 |
| | | 43,372,744 |
| |
| Real Estate 10.2% |
| Acadia Realty Trust | 21,700 | 631,036 |
| Alexandria Real Estate Equities, Inc. | 27,000 | 3,037,770 |
| Altisource Portfolio Solutions S.A. *(a) | 32,500 | 717,925 |
| Altisource Residential Corp. | 98,000 | 1,409,240 |
| American Campus Communities, Inc. | 49,460 | 2,343,909 |
| Apartment Investment & Management Co., Class A | 68,300 | 2,987,442 |
| Apple Hospitality REIT, Inc. | 132,900 | 2,489,217 |
| Ashford Hospitality Trust, Inc. | 170,700 | 1,066,875 |
| Brandywine Realty Trust | 134,300 | 2,279,071 |
| Brixmor Property Group, Inc. | 107,300 | 2,119,175 |
| Camden Property Trust | 42,600 | 3,507,258 |
| Care Capital Properties, Inc. | 35,800 | 961,946 |
| CBL & Associates Properties, Inc. | 275,000 | 2,543,750 |
| Chesapeake Lodging Trust | 34,100 | 794,871 |
| Columbia Property Trust, Inc. | 141,400 | 3,181,500 |
| Corporate Office Properties Trust | 72,700 | 2,380,198 |
| Cousins Properties, Inc. | 69,000 | 585,810 |
| CubeSmart | 42,700 | 1,082,018 |
| DCT Industrial Trust, Inc. | 28,550 | 1,443,488 |
| DDR Corp. | 172,000 | 1,859,320 |
| DiamondRock Hospitality Co. | 170,100 | 1,872,801 |
| Douglas Emmett, Inc. | 56,500 | 2,128,355 |
| DuPont Fabros Technology, Inc. | 23,300 | 1,201,115 |
| EastGroup Properties, Inc. | 14,550 | 1,138,538 |
| EPR Properties | 23,900 | 1,737,769 |
| Equinix, Inc. | 10,286 | 4,296,462 |
| Equity Commonwealth * | 87,700 | 2,805,523 |
| Equity LifeStyle Properties, Inc. | 25,140 | 2,034,077 |
| Essex Property Trust, Inc. | 14,109 | 3,449,227 |
| Extra Space Storage, Inc. | 26,065 | 1,968,690 |
| Federal Realty Investment Trust | 21,700 | 2,840,313 |
| First Industrial Realty Trust, Inc. | 35,000 | 984,900 |
| Franklin Street Properties Corp. | 72,100 | 874,573 |
| Gaming & Leisure Properties, Inc. | 60,100 | 2,091,480 |
| Government Properties Income Trust | 51,100 | 1,089,452 |
| Gramercy Property Trust | 35,100 | 975,429 |
| Healthcare Realty Trust, Inc. | 49,300 | 1,617,040 |
| Healthcare Trust of America, Inc., Class A | 48,400 | 1,543,476 |
| Hersha Hospitality Trust | 44,325 | 817,353 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Highwoods Properties, Inc. | 49,300 | 2,508,384 |
| HomeBanc Corp. *(c) | 6,875 | — |
| Investors Real Estate Trust | 150,600 | 890,046 |
| Kilroy Realty Corp. | 28,700 | 2,024,211 |
| Lamar Advertising Co., Class A | 35,800 | 2,580,106 |
| LaSalle Hotel Properties | 79,140 | 2,260,238 |
| Lexington Realty Trust | 167,400 | 1,702,458 |
| Liberty Property Trust | 92,500 | 3,752,725 |
| Life Storage, Inc. | 13,470 | 1,055,913 |
| Mack-Cali Realty Corp. | 107,600 | 2,910,580 |
| Medical Properties Trust, Inc. | 75,500 | 986,785 |
| Mid-America Apartment Communities, Inc. | 42,276 | 4,194,202 |
| Monogram Residential Trust, Inc. | 96,100 | 978,298 |
| National Retail Properties, Inc. | 40,400 | 1,705,688 |
| Omega Healthcare Investors, Inc. | 58,890 | 1,943,370 |
| Outfront Media, Inc. | 156,200 | 4,086,192 |
| Paramount Group, Inc. | 77,200 | 1,266,080 |
| Parkway, Inc. | 3,650 | 73,548 |
| Pebblebrook Hotel Trust | 31,300 | 931,488 |
| Pennsylvania Real Estate Investment Trust | 69,600 | 963,960 |
| Piedmont Office Realty Trust, Inc., Class A | 143,400 | 3,133,290 |
| Potlatch Corp. | 32,900 | 1,482,145 |
| PS Business Parks, Inc. | 8,550 | 1,039,167 |
| RAIT Financial Trust | 246,700 | 757,369 |
| Rayonier, Inc. | 129,600 | 3,657,312 |
| Realogy Holdings Corp. | 143,200 | 4,374,760 |
| Realty Income Corp. | 51,600 | 3,010,860 |
| Regency Centers Corp. | 50,165 | 3,169,425 |
| Retail Properties of America, Inc., Class A | 171,200 | 2,283,808 |
| RLJ Lodging Trust | 108,500 | 2,331,665 |
| Ryman Hospitality Properties, Inc. | 30,500 | 1,945,290 |
| Sabra Health Care REIT, Inc. | 49,400 | 1,343,186 |
| SBA Communications Corp. * | 27,305 | 3,453,810 |
| Senior Housing Properties Trust | 165,500 | 3,561,560 |
| Spirit Realty Capital, Inc. | 158,400 | 1,492,128 |
| Sun Communities, Inc. | 17,555 | 1,467,774 |
| Sunstone Hotel Investors, Inc. | 123,943 | 1,845,511 |
| Tanger Factory Outlet Centers, Inc. | 39,380 | 1,228,262 |
| Taubman Centers, Inc. | 40,500 | 2,533,275 |
| The GEO Group, Inc. | 114,804 | 3,825,269 |
| Tier REIT, Inc. | 46,900 | 811,839 |
| UDR, Inc. | 101,400 | 3,786,276 |
| VEREIT, Inc. | 194,200 | 1,625,454 |
| Washington Prime Group, Inc. | 217,700 | 1,915,760 |
| Washington Real Estate Investment Trust | 47,100 | 1,491,657 |
| Weingarten Realty Investors | 62,000 | 2,031,740 |
| WP Carey, Inc. | 39,400 | 2,466,440 |
| Xenia Hotels & Resorts, Inc. | 96,400 | 1,683,144 |
| | | 173,450,840 |
| |
| Retailing 5.1% |
| Aaron's, Inc. | 97,400 | 3,500,556 |
| Asbury Automotive Group, Inc. * | 43,400 | 2,656,080 |
| Ascena Retail Group, Inc. * | 610,300 | 2,386,273 |
| Barnes & Noble Education, Inc. * | 174,400 | 1,815,504 |
| Barnes & Noble, Inc. | 170,900 | 1,461,195 |
| Burlington Stores, Inc. * | 21,500 | 2,126,780 |
| Cabela's, Inc. * | 32,600 | 1,779,960 |
| Caleres, Inc. | 77,542 | 2,234,761 |
| DSW, Inc., Class A | 138,036 | 2,846,302 |
| Express, Inc. * | 212,000 | 1,829,560 |
| Five Below, Inc. * | 24,900 | 1,223,088 |
| Fred's, Inc., Class A (a) | 172,570 | 2,540,231 |
| Genesco, Inc. * | 48,400 | 2,579,720 |
| Group 1 Automotive, Inc. | 53,200 | 3,668,140 |
| Hibbett Sports, Inc. * | 44,585 | 1,159,210 |
| Security | Number
of Shares | Value ($) |
| HSN, Inc. | 59,700 | 2,202,930 |
| Lands' End, Inc. *(a) | 40,000 | 944,000 |
| Liberty TripAdvisor Holdings, Inc., Class A * | 49,900 | 733,530 |
| Lithia Motors, Inc., Class A | 21,235 | 2,029,004 |
| Lumber Liquidators Holdings, Inc. *(a) | 78,200 | 1,919,810 |
| Monro Muffler Brake, Inc. | 17,540 | 909,449 |
| Netflix, Inc. * | 20,990 | 3,194,678 |
| Nutrisystem, Inc. | 22,630 | 1,209,574 |
| Penske Automotive Group, Inc. | 61,800 | 2,948,478 |
| Pier 1 Imports, Inc. | 473,185 | 3,189,267 |
| Pool Corp. | 21,880 | 2,617,286 |
| Rent-A-Center, Inc. (a) | 314,100 | 3,357,729 |
| RH *(a) | 30,300 | 1,453,491 |
| Sally Beauty Holdings, Inc. * | 145,465 | 2,766,744 |
| Select Comfort Corp. * | 54,570 | 1,686,213 |
| Shoe Carnival, Inc. | 31,300 | 794,081 |
| Shutterfly, Inc. * | 15,200 | 788,880 |
| Sonic Automotive, Inc., Class A | 115,100 | 2,255,960 |
| Stage Stores, Inc. (a) | 442,255 | 1,273,694 |
| The Buckle, Inc. (a) | 92,622 | 1,732,031 |
| The Cato Corp., Class A | 53,095 | 1,197,823 |
| The Children's Place, Inc. | 24,960 | 2,865,408 |
| The Finish Line, Inc., Class A | 125,452 | 1,983,396 |
| The Michaels Cos., Inc. * | 45,700 | 1,067,552 |
| TripAdvisor, Inc. * | 27,900 | 1,255,779 |
| Tuesday Morning Corp. * | 152,300 | 494,975 |
| Ulta Salon, Cosmetics & Fragrance, Inc. * | 12,900 | 3,630,576 |
| Vitamin Shoppe, Inc. * | 60,400 | 1,165,720 |
| Zumiez, Inc. * | 38,600 | 692,870 |
| | | 86,168,288 |
| |
| Semiconductors & Semiconductor Equipment 2.8% |
| Advanced Energy Industries, Inc. * | 16,200 | 1,195,560 |
| Advanced Micro Devices, Inc. * | 224,200 | 2,981,860 |
| Amkor Technology, Inc. * | 182,500 | 2,149,850 |
| Brooks Automation, Inc. | 63,390 | 1,601,231 |
| Cabot Microelectronics Corp. | 26,030 | 2,039,451 |
| Cirrus Logic, Inc. * | 31,035 | 1,997,102 |
| Cree, Inc. * | 99,300 | 2,172,684 |
| Cypress Semiconductor Corp. | 169,903 | 2,380,341 |
| Diodes, Inc. * | 39,600 | 926,244 |
| Entegris, Inc. * | 63,845 | 1,583,356 |
| First Solar, Inc. * | 103,600 | 3,061,380 |
| Integrated Device Technology, Inc. * | 57,880 | 1,388,541 |
| Microsemi Corp. * | 29,612 | 1,389,987 |
| MKS Instruments, Inc. | 32,550 | 2,547,037 |
| ON Semiconductor Corp. * | 307,900 | 4,366,022 |
| Photronics, Inc. * | 91,925 | 1,057,138 |
| Power Integrations, Inc. | 12,500 | 824,375 |
| Qorvo, Inc. * | 61,700 | 4,197,451 |
| Silicon Laboratories, Inc. * | 25,490 | 1,813,614 |
| Synaptics, Inc. * | 19,705 | 1,079,243 |
| Teradyne, Inc. | 135,900 | 4,793,193 |
| Veeco Instruments, Inc. * | 60,160 | 1,985,280 |
| Xperi Corp. | 23,000 | 772,800 |
| | | 48,303,740 |
| |
| Software & Services 5.8% |
| ACI Worldwide, Inc. * | 49,400 | 1,061,606 |
| Acxiom Corp. * | 66,015 | 1,907,833 |
| ANSYS, Inc. * | 25,400 | 2,798,064 |
| Cadence Design Systems, Inc. * | 64,400 | 2,097,508 |
| Cardtronics plc, Class A * | 19,300 | 802,494 |
| CDK Global, Inc. | 55,700 | 3,621,057 |
| Cimpress N.V. * | 13,920 | 1,142,554 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| CommVault Systems, Inc. * | 15,400 | 776,930 |
| Convergys Corp. | 116,400 | 2,620,164 |
| CoreLogic, Inc. * | 76,700 | 3,278,158 |
| CSG Systems International, Inc. | 26,145 | 980,699 |
| DST Systems, Inc. | 29,500 | 3,631,745 |
| EPAM Systems, Inc. * | 11,200 | 862,400 |
| Euronet Worldwide, Inc. * | 17,495 | 1,445,437 |
| Fair Isaac Corp. | 17,505 | 2,371,577 |
| First Data Corp., Class A * | 248,400 | 3,880,008 |
| FleetCor Technologies, Inc. * | 10,700 | 1,510,198 |
| Gartner, Inc. * | 30,947 | 3,530,743 |
| Genpact Ltd. | 109,350 | 2,670,327 |
| j2 Global, Inc. | 16,785 | 1,514,678 |
| Jack Henry & Associates, Inc. | 33,380 | 3,235,190 |
| Manhattan Associates, Inc. * | 22,480 | 1,049,591 |
| ManTech International Corp., Class A | 59,100 | 2,098,050 |
| MAXIMUS, Inc. | 36,780 | 2,243,212 |
| NeuStar, Inc., Class A * | 103,775 | 3,445,330 |
| Nuance Communications, Inc. * | 90,200 | 1,613,678 |
| Progress Software Corp. | 63,625 | 1,890,935 |
| PTC, Inc. * | 49,240 | 2,661,422 |
| Red Hat, Inc. * | 42,200 | 3,716,976 |
| Sabre Corp. | 37,200 | 870,852 |
| salesforce.com, Inc. * | 33,333 | 2,870,638 |
| Science Applications International Corp. | 40,600 | 2,963,394 |
| SS&C Technologies Holdings, Inc. | 30,000 | 1,102,200 |
| Sykes Enterprises, Inc. * | 48,255 | 1,438,482 |
| Synopsys, Inc. * | 50,000 | 3,685,000 |
| Take-Two Interactive Software, Inc. * | 42,755 | 2,687,152 |
| TiVo Corp. | 137,007 | 2,705,888 |
| Travelport Worldwide Ltd. | 124,100 | 1,634,397 |
| Unisys Corp. * | 163,000 | 1,841,900 |
| Vantiv, Inc., Class A * | 28,800 | 1,786,752 |
| Verint Systems, Inc. * | 27,700 | 1,088,610 |
| VeriSign, Inc. * | 42,100 | 3,743,532 |
| VMware, Inc., Class A *(a) | 26,300 | 2,475,356 |
| WebMD Health Corp. * | 23,800 | 1,290,674 |
| WEX, Inc. * | 13,400 | 1,359,564 |
| Zynga, Inc., Class A * | 295,800 | 854,862 |
| | | 98,857,817 |
| |
| Technology Hardware & Equipment 4.5% |
| ADTRAN, Inc. | 84,245 | 1,684,900 |
| AVX Corp. | 62,300 | 1,053,493 |
| Belden, Inc. | 30,240 | 2,107,728 |
| Benchmark Electronics, Inc. * | 121,600 | 3,854,720 |
| Cognex Corp. | 17,430 | 1,487,476 |
| Coherent, Inc. * | 11,140 | 2,401,784 |
| CommScope Holding Co., Inc. * | 87,500 | 3,678,500 |
| Comtech Telecommunications Corp. | 118,470 | 1,659,765 |
| Diebold Nixdorf, Inc. | 87,900 | 2,478,780 |
| Dolby Laboratories, Inc., Class A | 42,200 | 2,225,206 |
| Eastman Kodak Co. * | 73,700 | 810,700 |
| EchoStar Corp., Class A * | 43,400 | 2,498,104 |
| Electronics For Imaging, Inc. * | 20,402 | 934,004 |
| ePlus, Inc. * | 17,000 | 1,211,250 |
| Fabrinet * | 21,800 | 755,806 |
| Finisar Corp. * | 60,530 | 1,382,505 |
| Harmonic, Inc. * | 243,700 | 1,413,460 |
| II-VI, Inc. * | 36,100 | 1,196,715 |
| Insight Enterprises, Inc. * | 111,100 | 4,677,310 |
| InterDigital, Inc. | 25,400 | 2,283,460 |
| IPG Photonics Corp. * | 11,000 | 1,389,520 |
| Itron, Inc. * | 28,100 | 1,822,285 |
| Knowles Corp. * | 119,500 | 2,118,735 |
| Littelfuse, Inc. | 10,145 | 1,563,852 |
| Lumentum Holdings, Inc. * | 23,600 | 1,008,900 |
| Security | Number
of Shares | Value ($) |
| Methode Electronics, Inc. | 27,400 | 1,220,670 |
| MTS Systems Corp. | 19,580 | 909,491 |
| National Instruments Corp. | 64,742 | 2,260,143 |
| NETGEAR, Inc. * | 34,150 | 1,610,173 |
| NetScout Systems, Inc. * | 28,500 | 1,073,025 |
| OSI Systems, Inc. * | 12,200 | 944,280 |
| Plantronics, Inc. | 36,710 | 2,004,366 |
| Plexus Corp. * | 49,380 | 2,567,266 |
| Rogers Corp. * | 11,000 | 1,132,340 |
| ScanSource, Inc. * | 68,340 | 2,699,430 |
| Super Micro Computer, Inc. * | 35,300 | 861,320 |
| Trimble, Inc. * | 106,400 | 3,769,752 |
| TTM Technologies, Inc. * | 82,200 | 1,375,206 |
| VeriFone Systems, Inc. * | 83,900 | 1,555,506 |
| ViaSat, Inc. * | 18,315 | 1,172,709 |
| Viavi Solutions, Inc. * | 139,600 | 1,396,000 |
| Zebra Technologies Corp., Class A * | 23,220 | 2,188,949 |
| | | 76,439,584 |
| |
| Telecommunication Services 0.7% |
| ATN International, Inc. | 10,000 | 691,900 |
| Cincinnati Bell, Inc. * | 77,020 | 1,451,827 |
| Consolidated Communications Holdings, Inc. (a) | 48,714 | 1,153,060 |
| General Communication, Inc., Class A * | 43,600 | 1,632,384 |
| Iridium Communications, Inc. * | 88,900 | 942,340 |
| Spok Holdings, Inc. | 40,500 | 726,975 |
| Vonage Holdings Corp. * | 194,400 | 1,304,424 |
| Windstream Holdings, Inc. | 657,349 | 3,628,567 |
| Zayo Group Holdings, Inc. * | 29,800 | 1,045,086 |
| | | 12,576,563 |
| |
| Transportation 3.2% |
| Allegiant Travel Co. | 9,400 | 1,366,760 |
| AMERCO | 3,800 | 1,422,948 |
| ArcBest Corp. | 79,040 | 2,090,608 |
| Atlas Air Worldwide Holdings, Inc. * | 42,300 | 2,453,400 |
| Copa Holdings S.A., Class A | 41,800 | 4,866,356 |
| Echo Global Logistics, Inc. * | 31,700 | 594,375 |
| Forward Air Corp. | 24,825 | 1,319,945 |
| Genesee & Wyoming, Inc., Class A * | 27,365 | 1,854,252 |
| Hawaiian Holdings, Inc. * | 23,940 | 1,299,942 |
| Heartland Express, Inc. | 47,065 | 946,948 |
| Hub Group, Inc., Class A * | 60,510 | 2,368,966 |
| Kirby Corp. * | 49,700 | 3,508,820 |
| Knight Transportation, Inc. | 53,625 | 1,839,338 |
| Landstar System, Inc. | 45,770 | 3,911,046 |
| Macquarie Infrastructure Corp. | 26,700 | 2,172,579 |
| Marten Transport Ltd. | 34,500 | 855,600 |
| Matson, Inc. | 38,100 | 1,207,770 |
| Old Dominion Freight Line, Inc. | 36,475 | 3,228,767 |
| Roadrunner Transportation Systems, Inc. * | 106,700 | 717,024 |
| Saia, Inc. * | 32,850 | 1,581,728 |
| SkyWest, Inc. | 103,400 | 3,846,480 |
| Spirit Airlines, Inc. * | 45,000 | 2,577,150 |
| Swift Transportation Co. * | 75,900 | 1,865,622 |
| United Continental Holdings, Inc. * | 63,500 | 4,458,335 |
| Werner Enterprises, Inc. | 80,800 | 2,205,840 |
| | | 54,560,599 |
| |
| Utilities 3.2% |
| ALLETE, Inc. | 35,100 | 2,453,841 |
| American States Water Co. | 25,030 | 1,114,336 |
| Aqua America, Inc. | 81,375 | 2,692,699 |
| Avangrid, Inc. | 23,100 | 1,004,850 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental US Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Avista Corp. | 63,000 | 2,541,420 |
| Black Hills Corp. | 42,300 | 2,877,246 |
| California Water Service Group | 29,880 | 1,066,716 |
| Dynegy, Inc. * | 146,900 | 943,098 |
| El Paso Electric Co. | 43,790 | 2,259,564 |
| Hawaiian Electric Industries, Inc. | 110,900 | 3,717,368 |
| IDACORP, Inc. | 33,400 | 2,822,968 |
| MGE Energy, Inc. | 21,750 | 1,398,525 |
| New Jersey Resources Corp. | 72,500 | 2,925,375 |
| Northwest Natural Gas Co. | 28,105 | 1,675,058 |
| NorthWestern Corp. | 34,800 | 2,080,344 |
| ONE Gas, Inc. | 36,200 | 2,491,646 |
| Otter Tail Corp. | 35,580 | 1,405,410 |
| PNM Resources, Inc. | 100,900 | 3,758,525 |
| Portland General Electric Co. | 83,000 | 3,763,220 |
| South Jersey Industries, Inc. | 44,580 | 1,672,641 |
| Southwest Gas Holdings, Inc. | 41,000 | 3,434,160 |
| Spire, Inc. | 24,440 | 1,675,362 |
| WGL Holdings, Inc. | 44,300 | 3,652,978 |
| | | 53,427,350 |
| Total Common Stock |
| (Cost $1,264,079,069) | | 1,678,868,413 |
|
| Rights 0.0% of net assets |
| |
| Technology Hardware & Equipment 0.0% |
| Gerber Scientific, Inc. CVR *(c) | 19,700 | — |
| Total Rights |
| (Cost $492) | | — |
|
| Other Investment Companies 3.1% of net assets |
| |
| Money Market Fund 0.8% |
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.68% (b) | 13,818,253 | 13,818,253 |
| |
| Securities Lending Collateral 2.3% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 38,332,850 | 38,332,850 |
| Total Other Investment Companies |
| (Cost $52,151,103) | | 52,151,103 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,322,951,462 and the unrealized appreciation and depreciation were $481,146,250 and ($73,078,196), respectively, with a net unrealized appreciation of $408,068,054.
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $36,800,447. |
| (b) | The rate shown is the 7-day yield. |
| (c) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| CVR — | Contingent Value Rights |
| REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| Russell 2000 Index, mini, Long, expires 06/16/17 | 220 | 15,382,400 | 194,333 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 98.3% | Common Stock | 1,131,136,761 | 1,134,432,458 |
| 0.8% | Preferred Stock | 9,790,008 | 9,415,437 |
| 1.3% | Other Investment Company | 15,185,130 | 15,185,130 |
| 0.4% | Short-Term Investments | 4,002,693 | 4,002,693 |
| 100.8% | Total Investments | 1,160,114,592 | 1,163,035,718 |
| (0.8%) | Other Assets and Liabilities, Net | | (9,358,379) |
| 100.0% | Net Assets | | 1,153,677,339 |
| Security | Number
of Shares | Value ($) |
| Common Stock 98.3% of net assets |
| |
| Australia 6.3% |
| Banks 2.1% |
| Australia & New Zealand Banking Group Ltd. | 230,984 | 5,654,252 |
| Bendigo & Adelaide Bank Ltd. | 33,879 | 311,778 |
| Commonwealth Bank of Australia | 102,895 | 6,720,475 |
| National Australia Bank Ltd. | 209,358 | 5,313,953 |
| Westpac Banking Corp. | 241,920 | 6,341,874 |
| | | 24,342,332 |
| Capital Goods 0.0% |
| CIMIC Group Ltd. | 10,830 | 300,130 |
| Commercial & Professional Services 0.1% |
| Brambles Ltd. | 75,916 | 587,444 |
| Downer EDI Ltd. | 110,543 | 485,764 |
| | | 1,073,208 |
| Consumer Services 0.1% |
| Tabcorp Holdings Ltd. | 85,883 | 305,123 |
| Tatts Group Ltd. | 123,751 | 398,110 |
| | | 703,233 |
| Diversified Financials 0.2% |
| AMP Ltd. | 306,730 | 1,228,967 |
| BGP Holdings plc *(d) | 453,854 | 8,059 |
| Macquarie Group Ltd. | 14,409 | 1,000,947 |
| | | 2,237,973 |
| Energy 0.5% |
| Caltex Australia Ltd. | 44,792 | 999,815 |
| Origin Energy Ltd. * | 256,127 | 1,378,290 |
| Santos Ltd. * | 173,779 | 451,147 |
| Woodside Petroleum Ltd. | 72,763 | 1,751,512 |
| WorleyParsons Ltd. * | 73,978 | 624,883 |
| | | 5,205,647 |
| Food & Staples Retailing 0.9% |
| Metcash Ltd. * | 356,380 | 573,744 |
| Wesfarmers Ltd. | 160,659 | 5,171,541 |
| Woolworths Ltd. | 221,666 | 4,455,854 |
| | | 10,201,139 |
| Food, Beverage & Tobacco 0.0% |
| Coca-Cola Amatil Ltd. | 56,205 | 393,908 |
| Health Care Equipment & Services 0.0% |
| Sonic Healthcare Ltd. | 25,241 | 417,268 |
| Security | Number
of Shares | Value ($) |
| Insurance 0.3% |
| Insurance Australia Group Ltd. | 182,537 | 847,314 |
| Medibank Pvt Ltd. | 145,895 | 317,608 |
| QBE Insurance Group Ltd. | 126,847 | 1,218,717 |
| Suncorp Group Ltd. | 155,936 | 1,607,488 |
| | | 3,991,127 |
| Materials 1.4% |
| Amcor Ltd. | 65,900 | 774,870 |
| Arrium Ltd. *(d) | 11,838,630 | — |
| BHP Billiton Ltd. | 477,988 | 8,510,066 |
| BlueScope Steel Ltd. | 64,736 | 565,594 |
| Boral Ltd. | 81,557 | 375,941 |
| CSR Ltd. | 90,122 | 330,468 |
| Fortescue Metals Group Ltd. | 161,033 | 638,279 |
| Iluka Resources Ltd. | 54,457 | 342,210 |
| Incitec Pivot Ltd. | 158,756 | 449,780 |
| Newcrest Mining Ltd. | 25,447 | 408,255 |
| Orica Ltd. | 59,813 | 828,680 |
| Rio Tinto Ltd. | 54,180 | 2,452,820 |
| | | 15,676,963 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.2% |
| CSL Ltd. | 17,129 | 1,698,513 |
| Real Estate 0.2% |
| LendLease Group | 48,441 | 581,566 |
| Mirvac Group | 195,529 | 332,106 |
| Scentre Group | 190,958 | 616,126 |
| Stockland | 170,660 | 619,384 |
| Westfield Corp. | 64,001 | 435,237 |
| | | 2,584,419 |
| Telecommunication Services 0.1% |
| Telstra Corp., Ltd. | 463,679 | 1,465,026 |
| Transportation 0.1% |
| Aurizon Holdings Ltd. | 151,896 | 585,734 |
| Transurban Group | 44,412 | 405,743 |
| | | 991,477 |
| Utilities 0.1% |
| AGL Energy Ltd. | 48,681 | 974,635 |
| APA Group | 50,360 | 345,373 |
| DUET Group | 147,996 | 334,421 |
| | | 1,654,429 |
| | | 72,936,792 |
| |
| Austria 0.4% |
| Banks 0.1% |
| Erste Group Bank AG | 34,230 | 1,225,564 |
| Raiffeisen Bank International AG * | 25,921 | 590,901 |
| | | 1,816,465 |
| Energy 0.2% |
| OMV AG | 44,859 | 2,066,255 |
| Materials 0.1% |
| voestalpine AG | 18,958 | 790,346 |
| | | 4,673,066 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Belgium 0.8% |
| Banks 0.1% |
| KBC Group N.V. | 14,700 | 1,062,323 |
| Diversified Financials 0.1% |
| Groupe Bruxelles Lambert S.A. | 6,927 | 664,426 |
| Food & Staples Retailing 0.0% |
| Colruyt S.A. | 7,260 | 373,063 |
| Food, Beverage & Tobacco 0.3% |
| Anheuser-Busch InBev S.A./N.V. | 30,467 | 3,435,773 |
| Insurance 0.1% |
| Ageas | 21,703 | 888,647 |
| Materials 0.1% |
| Solvay S.A. | 6,085 | 773,957 |
| Umicore S.A. | 12,129 | 710,604 |
| | | 1,484,561 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| UCB S.A. | 4,548 | 354,967 |
| Telecommunication Services 0.1% |
| Proximus (a) | 20,293 | 620,640 |
| | | 8,884,400 |
| |
| Canada 6.8% |
| Automobiles & Components 0.2% |
| Magna International, Inc. | 58,927 | 2,461,461 |
| Banks 1.6% |
| Bank of Montreal | 39,261 | 2,780,095 |
| Canadian Imperial Bank of Commerce | 29,461 | 2,379,455 |
| National Bank of Canada | 20,033 | 778,543 |
| Royal Bank of Canada | 73,844 | 5,056,370 |
| The Bank of Nova Scotia | 69,015 | 3,836,386 |
| The Toronto-Dominion Bank | 85,752 | 4,034,908 |
| | | 18,865,757 |
| Capital Goods 0.1% |
| Bombardier, Inc., Class B * | 237,653 | 367,348 |
| Finning International, Inc. | 21,317 | 405,398 |
| SNC-Lavalin Group, Inc. | 10,140 | 407,814 |
| | | 1,180,560 |
| Diversified Financials 0.2% |
| Brookfield Asset Management, Inc., Class A | 43,932 | 1,623,976 |
| CI Financial Corp. | 19,115 | 373,884 |
| IGM Financial, Inc. | 9,234 | 277,416 |
| Onex Corp. | 6,515 | 470,065 |
| | | 2,745,341 |
| Energy 1.9% |
| ARC Resources Ltd. | 24,272 | 318,636 |
| Baytex Energy Corp. *(a) | 90,392 | 273,484 |
| Cameco Corp. | 34,467 | 330,518 |
| Canadian Natural Resources Ltd. | 85,745 | 2,731,177 |
| Cenovus Energy, Inc. | 120,595 | 1,202,372 |
| Crescent Point Energy Corp. | 59,171 | 585,620 |
| Enbridge, Inc. | 67,958 | 2,816,793 |
| Encana Corp. | 113,597 | 1,215,818 |
| Enerplus Corp. | 51,147 | 369,069 |
| Gibson Energy, Inc. | 25,253 | 342,429 |
| Husky Energy, Inc. * | 72,721 | 839,590 |
| Imperial Oil Ltd. | 27,341 | 795,364 |
| Inter Pipeline Ltd. | 16,474 | 335,623 |
| Keyera Corp. | 7,300 | 202,039 |
| Pembina Pipeline Corp. | 17,078 | 544,224 |
| Pengrowth Energy Corp. *(a) | 204,295 | 196,056 |
| Security | Number
of Shares | Value ($) |
| Penn West Petroleum Ltd. *(a) | 539,011 | 809,474 |
| Suncor Energy, Inc. | 179,137 | 5,614,066 |
| TransCanada Corp. | 42,272 | 1,962,712 |
| Vermilion Energy, Inc. | 7,654 | 269,478 |
| | | 21,754,542 |
| Food & Staples Retailing 0.4% |
| Alimentation Couche-Tard, Inc., Class B | 19,740 | 907,862 |
| Empire Co., Ltd., Class A | 42,500 | 654,756 |
| George Weston Ltd. | 6,811 | 611,670 |
| Loblaw Cos., Ltd. | 17,543 | 984,557 |
| Metro, Inc. | 24,694 | 846,259 |
| | | 4,005,104 |
| Food, Beverage & Tobacco 0.1% |
| Saputo, Inc. | 13,375 | 439,742 |
| Insurance 0.5% |
| Fairfax Financial Holdings Ltd. | 770 | 351,987 |
| Great-West Lifeco, Inc. | 18,654 | 501,795 |
| Intact Financial Corp. | 6,106 | 418,279 |
| Manulife Financial Corp. | 85,100 | 1,492,469 |
| Power Corp. of Canada | 42,844 | 992,752 |
| Power Financial Corp. | 20,214 | 513,698 |
| Sun Life Financial, Inc. | 30,175 | 1,065,702 |
| | | 5,336,682 |
| Materials 0.7% |
| Agnico-Eagle Mines Ltd. | 5,400 | 258,122 |
| Agrium, Inc. | 13,753 | 1,290,820 |
| Barrick Gold Corp. | 62,639 | 1,047,157 |
| First Quantum Minerals Ltd. | 52,470 | 500,080 |
| Goldcorp, Inc. | 42,920 | 598,028 |
| Kinross Gold Corp. * | 64,592 | 224,763 |
| Methanex Corp. | 7,700 | 353,849 |
| Potash Corp. of Saskatchewan, Inc. | 112,964 | 1,905,008 |
| Teck Resources Ltd., Class B | 81,868 | 1,698,474 |
| West Fraser Timber Co., Ltd. | 7,200 | 323,540 |
| Yamana Gold, Inc. | 97,478 | 262,074 |
| | | 8,461,915 |
| Media 0.1% |
| Quebecor, Inc., Class B | 7,925 | 241,921 |
| Shaw Communications, Inc., Class B | 34,655 | 734,710 |
| | | 976,631 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Valeant Pharmaceuticals International, Inc. * | 23,909 | 221,566 |
| Retailing 0.1% |
| Canadian Tire Corp., Ltd., Class A | 6,176 | 753,761 |
| Dollarama, Inc. | 3,100 | 271,382 |
| | | 1,025,143 |
| Software & Services 0.0% |
| CGI Group, Inc., Class A * | 8,592 | 414,667 |
| Technology Hardware & Equipment 0.1% |
| BlackBerry Ltd. * | 79,488 | 742,443 |
| Celestica, Inc. * | 25,766 | 367,129 |
| | | 1,109,572 |
| Telecommunication Services 0.3% |
| BCE, Inc. | 32,912 | 1,498,466 |
| Rogers Communications, Inc., Class B | 23,841 | 1,093,152 |
| TELUS Corp. | 27,571 | 917,384 |
| | | 3,509,002 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Transportation 0.3% |
| Canadian National Railway Co. | 33,717 | 2,437,168 |
| Canadian Pacific Railway Ltd. | 5,650 | 865,722 |
| | | 3,302,890 |
| Utilities 0.2% |
| Atco Ltd., Class I | 9,589 | 348,914 |
| Canadian Utilities Ltd., Class A | 13,593 | 391,843 |
| Emera, Inc. | 8,598 | 297,612 |
| Fortis, Inc. | 20,427 | 664,714 |
| TransAlta Corp. | 81,521 | 417,444 |
| | | 2,120,527 |
| | | 77,931,102 |
| |
| Denmark 0.8% |
| Banks 0.1% |
| Danske Bank A/S | 25,748 | 936,159 |
| Capital Goods 0.0% |
| Vestas Wind Systems A/S | 5,918 | 509,223 |
| Commercial & Professional Services 0.0% |
| ISS A/S | 11,336 | 470,220 |
| Consumer Durables & Apparel 0.0% |
| Pandora A/S | 2,697 | 291,357 |
| Food, Beverage & Tobacco 0.1% |
| Carlsberg A/S, Class B | 7,966 | 794,867 |
| Health Care Equipment & Services 0.0% |
| Coloplast A/S, Class B | 3,619 | 309,880 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.2% |
| Novo Nordisk A/S, Class B | 53,021 | 2,064,471 |
| Telecommunication Services 0.1% |
| TDC A/S | 140,978 | 756,272 |
| Transportation 0.3% |
| AP Moeller - Maersk A/S, Series A | 897 | 1,488,117 |
| AP Moeller - Maersk A/S, Series B | 898 | 1,549,081 |
| DSV A/S | 7,476 | 416,304 |
| | | 3,453,502 |
| | | 9,585,951 |
| |
| Finland 0.9% |
| Automobiles & Components 0.0% |
| Nokian Renkaat Oyj | 8,100 | 348,144 |
| Capital Goods 0.1% |
| Kone Oyj, Class B | 13,982 | 639,989 |
| Metso Oyj | 12,105 | 433,528 |
| Wartsila Oyj Abp | 9,385 | 570,744 |
| | | 1,644,261 |
| Energy 0.1% |
| Neste Oyj (a) | 13,942 | 568,125 |
| Food & Staples Retailing 0.1% |
| Kesko Oyj, B Shares | 15,499 | 725,892 |
| Insurance 0.1% |
| Sampo Oyj, A Shares (a) | 21,827 | 1,044,588 |
| Materials 0.2% |
| Stora Enso Oyj, R Shares (a) | 74,447 | 883,529 |
| UPM-Kymmene Oyj | 59,092 | 1,556,877 |
| | | 2,440,406 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Orion Oyj, Class B | 6,296 | 360,821 |
| Technology Hardware & Equipment 0.2% |
| Nokia Oyj | 397,145 | 2,270,416 |
| Security | Number
of Shares | Value ($) |
| Telecommunication Services 0.0% |
| Elisa Oyj | 8,874 | 301,778 |
| Utilities 0.1% |
| Fortum Oyj | 65,551 | 953,128 |
| | | 10,657,559 |
| |
| France 10.2% |
| Automobiles & Components 0.4% |
| Faurecia | 9,143 | 446,847 |
| Peugeot S.A. * | 46,121 | 966,955 |
| Renault S.A. | 20,992 | 1,957,528 |
| Valeo S.A. | 14,385 | 1,035,145 |
| | | 4,406,475 |
| Banks 1.2% |
| BNP Paribas S.A. | 85,558 | 6,038,443 |
| Credit Agricole S.A. | 99,578 | 1,481,106 |
| Natixis S.A. | 72,610 | 505,307 |
| Societe Generale S.A. | 106,716 | 5,851,522 |
| | | 13,876,378 |
| Capital Goods 1.7% |
| Airbus SE | 24,661 | 1,994,892 |
| Alstom S.A. * | 17,768 | 563,963 |
| Bouygues S.A. (a) | 38,277 | 1,608,930 |
| Compagnie de Saint-Gobain | 67,405 | 3,636,960 |
| Eiffage S.A. | 6,386 | 540,925 |
| Legrand S.A. | 12,596 | 815,351 |
| Rexel S.A. | 60,135 | 1,073,911 |
| Safran S.A. | 12,411 | 1,027,567 |
| Schneider Electric SE | 45,586 | 3,610,671 |
| Thales S.A. | 4,156 | 436,822 |
| Vinci S.A. | 41,242 | 3,515,406 |
| Zodiac Aerospace | 12,612 | 306,163 |
| | | 19,131,561 |
| Commercial & Professional Services 0.1% |
| Bureau Veritas S.A. | 13,717 | 317,828 |
| Teleperformance | 2,887 | 363,037 |
| | | 680,865 |
| Consumer Durables & Apparel 0.5% |
| Christian Dior SE | 3,755 | 1,029,863 |
| Kering | 4,246 | 1,316,082 |
| LVMH Moet Hennessy Louis Vuitton SE | 11,615 | 2,867,380 |
| | | 5,213,325 |
| Consumer Services 0.1% |
| Accor S.A. | 14,952 | 681,799 |
| Sodexo S.A. | 5,634 | 716,034 |
| | | 1,397,833 |
| Diversified Financials 0.1% |
| Eurazeo S.A. | 5,317 | 360,390 |
| Wendel S.A. | 2,357 | 330,406 |
| | | 690,796 |
| Energy 1.9% |
| CGG S.A. *(a) | 29,762 | 212,957 |
| TechnipFMC plc * | 39,283 | 1,180,970 |
| TOTAL S.A. | 384,129 | 19,718,569 |
| Vallourec S.A. *(a) | 107,763 | 689,299 |
| | | 21,801,795 |
| Food & Staples Retailing 0.3% |
| Carrefour S.A. | 99,191 | 2,336,070 |
| Casino Guichard Perrachon S.A. | 18,447 | 1,110,962 |
| Rallye S.A. | 27,177 | 593,854 |
| | | 4,040,886 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Food, Beverage & Tobacco 0.3% |
| Danone S.A. (a) | 35,008 | 2,450,067 |
| Pernod-Ricard S.A. | 9,801 | 1,226,611 |
| | | 3,676,678 |
| Health Care Equipment & Services 0.1% |
| Essilor International S.A. | 5,704 | 739,198 |
| Household & Personal Products 0.2% |
| L'Oreal S.A. | 9,769 | 1,945,492 |
| Insurance 0.4% |
| AXA S.A. | 147,441 | 3,933,744 |
| CNP Assurances | 16,345 | 341,427 |
| SCOR SE | 13,579 | 537,144 |
| | | 4,812,315 |
| Materials 0.3% |
| Air Liquide S.A. | 23,073 | 2,779,978 |
| Arkema S.A. | 7,301 | 773,051 |
| | | 3,553,029 |
| Media 0.4% |
| Eutelsat Communications S.A. | 13,950 | 330,050 |
| Publicis Groupe S.A. | 10,197 | 736,183 |
| Vivendi S.A. | 168,481 | 3,341,855 |
| | | 4,408,088 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.7% |
| Sanofi | 90,184 | 8,521,827 |
| Real Estate 0.1% |
| Klepierre | 5,638 | 221,291 |
| Unibail-Rodamco SE | 3,638 | 893,280 |
| | | 1,114,571 |
| Software & Services 0.1% |
| Atos SE | 4,917 | 644,054 |
| Capgemini S.A. | 9,455 | 946,653 |
| | | 1,590,707 |
| Telecommunication Services 0.4% |
| Orange S.A. | 334,175 | 5,172,139 |
| Transportation 0.1% |
| Air France-KLM * | 73,651 | 618,751 |
| Bollore S.A. | 73,322 | 298,342 |
| | | 917,093 |
| Utilities 0.8% |
| Electricite de France S.A. | 107,849 | 900,297 |
| Engie S.A. | 442,350 | 6,237,153 |
| Suez | 47,316 | 777,249 |
| Veolia Environnement S.A. (a) | 81,302 | 1,547,207 |
| | | 9,461,906 |
| | | 117,152,957 |
| |
| Germany 9.0% |
| Automobiles & Components 1.4% |
| Bayerische Motoren Werke AG | 47,068 | 4,496,960 |
| Continental AG | 7,914 | 1,772,714 |
| Daimler AG | 114,905 | 8,562,064 |
| Leoni AG | 7,460 | 405,275 |
| Volkswagen AG | 5,893 | 950,217 |
| | | 16,187,230 |
| Banks 0.1% |
| Commerzbank AG * | 171,545 | 1,681,748 |
| Capital Goods 1.0% |
| Brenntag AG | 13,151 | 779,614 |
| GEA Group AG | 9,490 | 403,442 |
| HOCHTIEF AG | 1,979 | 356,404 |
| Kloeckner & Co. SE * | 19,748 | 218,162 |
| Security | Number
of Shares | Value ($) |
| MAN SE | 2,950 | 309,945 |
| MTU Aero Engines AG | 2,572 | 368,912 |
| OSRAM Licht AG | 7,281 | 487,750 |
| Rheinmetall AG | 4,114 | 377,623 |
| Siemens AG | 58,285 | 8,360,568 |
| | | 11,662,420 |
| Commercial & Professional Services 0.0% |
| Bilfinger SE *(a) | 10,012 | 434,661 |
| Consumer Durables & Apparel 0.2% |
| adidas AG | 8,897 | 1,783,746 |
| Hugo Boss AG | 6,854 | 521,201 |
| | | 2,304,947 |
| Diversified Financials 0.4% |
| Deutsche Bank AG * | 225,720 | 4,058,628 |
| Deutsche Boerse AG | 7,831 | 766,493 |
| | | 4,825,121 |
| Food & Staples Retailing 0.1% |
| METRO AG | 44,127 | 1,452,190 |
| Food, Beverage & Tobacco 0.0% |
| Suedzucker AG | 14,930 | 319,521 |
| Health Care Equipment & Services 0.2% |
| Fresenius Medical Care AG & Co. KGaA | 10,078 | 894,616 |
| Fresenius SE & Co. KGaA | 16,243 | 1,317,799 |
| | | 2,212,415 |
| Household & Personal Products 0.1% |
| Beiersdorf AG | 4,194 | 417,099 |
| Henkel AG & Co. KGaA | 4,759 | 555,141 |
| | | 972,240 |
| Insurance 0.9% |
| Allianz SE | 35,904 | 6,835,318 |
| Hannover Rueck SE | 3,733 | 447,826 |
| Muenchener Rueckversicherungs-Gesellschaft AG | 13,732 | 2,632,688 |
| | | 9,915,832 |
| Materials 1.5% |
| Aurubis AG | 11,348 | 793,060 |
| BASF SE | 102,077 | 9,944,232 |
| Evonik Industries AG | 15,138 | 505,458 |
| Fuchs Petrolub AG | 1,213 | 54,775 |
| HeidelbergCement AG | 12,122 | 1,122,224 |
| K&S AG (a) | 30,396 | 725,197 |
| LANXESS AG | 10,327 | 745,676 |
| Linde AG | 13,705 | 2,462,630 |
| Salzgitter AG | 11,119 | 380,598 |
| ThyssenKrupp AG | 31,016 | 739,128 |
| | | 17,472,978 |
| Media 0.1% |
| ProSiebenSat.1 Media SE | 15,267 | 648,078 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.6% |
| Bayer AG | 49,819 | 6,164,257 |
| Merck KGaA | 4,273 | 501,956 |
| | | 6,666,213 |
| Real Estate 0.0% |
| Vonovia SE | 9,759 | 353,317 |
| Semiconductors & Semiconductor Equipment 0.1% |
| Infineon Technologies AG | 42,624 | 881,018 |
| Software & Services 0.3% |
| SAP SE | 30,243 | 3,029,319 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Telecommunication Services 0.6% |
| Deutsche Telekom AG | 372,406 | 6,532,297 |
| Freenet AG | 13,925 | 437,012 |
| | | 6,969,309 |
| Transportation 0.4% |
| Deutsche Lufthansa AG | 58,454 | 1,008,462 |
| Deutsche Post AG | 92,913 | 3,339,646 |
| | | 4,348,108 |
| Utilities 1.0% |
| E.ON SE | 887,830 | 6,920,976 |
| RWE AG * | 229,276 | 3,797,552 |
| Uniper SE * | 62,040 | 1,018,208 |
| | | 11,736,736 |
| | | 104,073,401 |
| |
| Hong Kong 1.4% |
| Banks 0.1% |
| BOC Hong Kong (Holdings) Ltd. | 158,500 | 651,361 |
| Hang Seng Bank Ltd. | 30,300 | 613,754 |
| | | 1,265,115 |
| Capital Goods 0.3% |
| CK Hutchison Holdings Ltd. | 38,000 | 474,517 |
| Jardine Matheson Holdings Ltd. | 15,900 | 1,023,210 |
| Jardine Strategic Holdings Ltd. | 15,200 | 642,289 |
| Noble Group Ltd. * | 12,025,931 | 1,229,199 |
| | | 3,369,215 |
| Consumer Durables & Apparel 0.1% |
| Li & Fung Ltd. | 1,224,000 | 512,534 |
| Yue Yuen Industrial Holdings Ltd. | 70,500 | 278,706 |
| | | 791,240 |
| Consumer Services 0.1% |
| Galaxy Entertainment Group Ltd. | 89,000 | 494,435 |
| Sands China Ltd. | 121,200 | 548,932 |
| SJM Holdings Ltd. | 432,000 | 418,799 |
| | | 1,462,166 |
| Diversified Financials 0.0% |
| Hong Kong Exchanges & Clearing Ltd. | 10,300 | 253,319 |
| Food, Beverage & Tobacco 0.1% |
| China Mengniu Dairy Co., Ltd. | 134,000 | 258,881 |
| Want Want China Holdings Ltd. | 415,000 | 298,442 |
| | | 557,323 |
| Insurance 0.2% |
| AIA Group Ltd. | 242,000 | 1,674,987 |
| Real Estate 0.4% |
| Cheung Kong Property Holdings Ltd. | 40,000 | 286,368 |
| Hongkong Land Holdings Ltd. | 42,900 | 330,630 |
| Link REIT | 41,500 | 298,301 |
| New World Development Co., Ltd. | 381,000 | 473,776 |
| Sun Hung Kai Properties Ltd. | 78,000 | 1,168,830 |
| Swire Pacific Ltd., Class A | 58,500 | 564,106 |
| Swire Pacific Ltd., Class B | 126,051 | 213,829 |
| The Wharf Holdings Ltd. | 62,000 | 528,614 |
| Wheelock & Co., Ltd. | 51,000 | 397,260 |
| | | 4,261,714 |
| Retailing 0.0% |
| Esprit Holdings Ltd. * | 422,084 | 327,474 |
| Transportation 0.0% |
| MTR Corp., Ltd. | 53,000 | 304,918 |
| Security | Number
of Shares | Value ($) |
| Utilities 0.1% |
| CLP Holdings Ltd. | 95,000 | 1,001,890 |
| Hong Kong & China Gas Co., Ltd. | 203,238 | 406,045 |
| Power Assets Holdings Ltd. | 28,000 | 251,835 |
| | | 1,659,770 |
| | | 15,927,241 |
| |
| Ireland 0.7% |
| Banks 0.0% |
| Bank of Ireland * | 1,304,324 | 328,347 |
| Commercial & Professional Services 0.1% |
| Experian plc | 40,917 | 880,237 |
| Food, Beverage & Tobacco 0.1% |
| Kerry Group plc, Class A | 4,617 | 377,298 |
| Materials 0.2% |
| CRH plc | 55,071 | 2,005,911 |
| Smurfit Kappa Group plc | 22,061 | 590,923 |
| | | 2,596,834 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Shire plc | 17,308 | 1,020,457 |
| Technology Hardware & Equipment 0.2% |
| Seagate Technology plc | 59,304 | 2,498,478 |
| | | 7,701,651 |
| |
| Israel 0.4% |
| Banks 0.1% |
| Bank Hapoalim B.M. | 50,145 | 312,720 |
| Bank Leumi Le-Israel B.M. * | 119,076 | 556,878 |
| | | 869,598 |
| Materials 0.1% |
| Israel Chemicals Ltd. | 116,497 | 502,025 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.2% |
| Teva Pharmaceutical Industries Ltd. | 75,149 | 2,383,279 |
| Software & Services 0.0% |
| Check Point Software Technologies Ltd. * | 3,894 | 405,015 |
| Telecommunication Services 0.0% |
| Bezeq The Israeli Telecommunication Corp., Ltd. | 263,736 | 443,110 |
| | | 4,603,027 |
| |
| Italy 3.4% |
| Banks 1.0% |
| Banca Monte dei Paschi di Siena S.p.A. *(d) | 22,446 | 188,043 |
| Banco BPM S.p.A. | 219,842 | 642,049 |
| BPER Banca | 73,679 | 403,073 |
| Intesa Sanpaolo S.p.A. | 1,242,598 | 3,627,267 |
| UniCredit S.p.A. * | 312,499 | 5,088,261 |
| Unione di Banche Italiane S.p.A. | 231,518 | 975,510 |
| | | 10,924,203 |
| Capital Goods 0.1% |
| Leonardo S.p.A. * | 19,063 | 299,568 |
| Prysmian S.p.A. | 13,306 | 383,994 |
| | | 683,562 |
| Consumer Durables & Apparel 0.0% |
| Luxottica Group S.p.A. | 8,009 | 463,006 |
| Diversified Financials 0.2% |
| EXOR N.V. | 35,472 | 1,991,087 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Energy 1.0% |
| Eni S.p.A. | 681,826 | 10,575,810 |
| Saipem S.p.A. * | 1,543,677 | 664,459 |
| Snam S.p.A. | 185,984 | 821,689 |
| | | 12,061,958 |
| Insurance 0.2% |
| Assicurazioni Generali S.p.A. | 117,706 | 1,864,464 |
| Poste Italiane S.p.A | 49,893 | 341,660 |
| | | 2,206,124 |
| Media 0.0% |
| Mediaset S.p.A. | 124,026 | 506,857 |
| Telecommunication Services 0.2% |
| Telecom Italia S.p.A. * | 2,775,188 | 2,463,234 |
| Transportation 0.1% |
| Atlantia S.p.A. | 28,228 | 715,838 |
| Utilities 0.6% |
| Enel S.p.A. | 1,422,363 | 6,762,174 |
| Italgas S.p.A. * | 20,641 | 93,310 |
| Terna - Rete Elettrica Nationale S.p.A. | 90,422 | 455,892 |
| | | 7,311,376 |
| | | 39,327,245 |
| |
| Japan 21.3% |
| Automobiles & Components 3.3% |
| Aisin Seiki Co., Ltd. | 23,800 | 1,165,656 |
| Bridgestone Corp. | 72,700 | 3,032,408 |
| Calsonic Kansei Corp. | 24,000 | 277,625 |
| Denso Corp. | 45,000 | 1,942,094 |
| Honda Motor Co., Ltd. | 214,500 | 6,243,163 |
| Isuzu Motors Ltd. | 62,700 | 852,223 |
| Koito Manufacturing Co., Ltd. | 4,500 | 232,529 |
| Mazda Motor Corp. | 62,900 | 929,176 |
| Mitsubishi Motors Corp. | 157,400 | 1,008,075 |
| NGK Spark Plug Co., Ltd. | 13,200 | 286,273 |
| NHK Spring Co., Ltd. | 35,700 | 398,801 |
| Nissan Motor Co., Ltd. | 326,800 | 3,112,956 |
| Stanley Electric Co., Ltd. | 10,000 | 292,821 |
| Subaru Corp. | 29,300 | 1,110,824 |
| Sumitomo Electric Industries Ltd. | 102,600 | 1,675,657 |
| Sumitomo Rubber Industries Ltd. | 23,300 | 419,369 |
| Suzuki Motor Corp. | 38,100 | 1,592,692 |
| The Yokohama Rubber Co., Ltd. | 15,800 | 310,241 |
| Toyota Industries Corp. | 15,400 | 767,141 |
| Toyota Motor Corp. | 210,018 | 11,366,333 |
| Yamaha Motor Co., Ltd. | 26,900 | 638,835 |
| | | 37,654,892 |
| Banks 1.3% |
| Aozora Bank Ltd. | 70,000 | 255,060 |
| Japan Post Bank Co., Ltd. | 35,100 | 437,175 |
| Mitsubishi UFJ Financial Group, Inc. | 896,634 | 5,681,605 |
| Mizuho Financial Group, Inc. | 1,850,616 | 3,382,795 |
| Resona Holdings, Inc. | 173,258 | 963,174 |
| Sumitomo Mitsui Financial Group, Inc. | 112,710 | 4,184,991 |
| Sumitomo Mitsui Trust Holdings, Inc. | 22,300 | 763,903 |
| | | 15,668,703 |
| Capital Goods 3.3% |
| Asahi Glass Co., Ltd. | 179,000 | 1,550,955 |
| Daikin Industries Ltd. | 10,200 | 991,680 |
| Ebara Corp. | 10,400 | 316,824 |
| FANUC Corp. | 7,400 | 1,506,611 |
| Fuji Electric Co., Ltd. | 57,000 | 312,433 |
| Security | Number
of Shares | Value ($) |
| Furukawa Electric Co., Ltd. | 11,700 | 473,636 |
| Hanwa Co., Ltd. | 50,000 | 354,520 |
| Hino Motors Ltd. | 34,300 | 430,372 |
| Hitachi Construction Machinery Co., Ltd. | 15,100 | 389,275 |
| IHI Corp. * | 172,000 | 582,459 |
| ITOCHU Corp. | 149,300 | 2,112,591 |
| JGC Corp. | 29,000 | 506,400 |
| JTEKT Corp. | 27,300 | 430,629 |
| Kajima Corp. | 51,000 | 346,301 |
| Kawasaki Heavy Industries Ltd. | 168,000 | 508,638 |
| Komatsu Ltd. | 85,400 | 2,282,018 |
| Kubota Corp. | 58,700 | 924,689 |
| LIXIL Group Corp. | 28,900 | 722,292 |
| Makita Corp. | 10,800 | 385,341 |
| Marubeni Corp. | 289,900 | 1,786,866 |
| Mitsubishi Corp. | 156,700 | 3,381,598 |
| Mitsubishi Electric Corp. | 177,800 | 2,481,451 |
| Mitsubishi Heavy Industries Ltd. | 392,000 | 1,570,692 |
| Mitsui & Co., Ltd. | 237,300 | 3,350,817 |
| Nagase & Co., Ltd. | 23,300 | 337,870 |
| NGK Insulators Ltd. | 12,700 | 271,732 |
| Nidec Corp. | 5,500 | 504,646 |
| NSK Ltd. | 38,000 | 519,652 |
| Obayashi Corp. | 40,300 | 391,268 |
| Shimizu Corp. | 43,000 | 412,367 |
| SMC Corp. | 2,000 | 563,727 |
| Sojitz Corp. | 287,800 | 731,669 |
| Sumitomo Corp. | 140,800 | 1,881,557 |
| Sumitomo Heavy Industries Ltd. | 65,000 | 453,445 |
| Taisei Corp. | 68,000 | 518,527 |
| Toshiba Corp. * | 732,000 | 1,476,568 |
| TOTO Ltd. | 7,600 | 289,957 |
| Toyota Tsusho Corp. | 49,900 | 1,575,492 |
| | | 37,627,565 |
| Commercial & Professional Services 0.3% |
| Dai Nippon Printing Co., Ltd. | 98,000 | 1,090,999 |
| Recruit Holdings Co., Ltd. | 18,300 | 924,925 |
| Secom Co., Ltd. | 11,300 | 820,640 |
| Toppan Printing Co., Ltd. | 73,000 | 734,876 |
| | | 3,571,440 |
| Consumer Durables & Apparel 1.0% |
| Bandai Namco Holdings, Inc. | 17,200 | 539,849 |
| Iida Group Holdings Co., Ltd. | 19,500 | 310,552 |
| Nikon Corp. | 44,700 | 638,111 |
| Panasonic Corp. | 319,250 | 3,817,669 |
| Sega Sammy Holdings, Inc. | 20,800 | 279,271 |
| Sekisui Chemical Co., Ltd. | 41,000 | 688,129 |
| Sekisui House Ltd. | 63,100 | 1,048,205 |
| Sharp Corp. *(a) | 293,000 | 1,062,576 |
| Shimano, Inc. | 2,100 | 321,392 |
| Sony Corp. | 77,000 | 2,642,203 |
| Sumitomo Forestry Co., Ltd. | 18,600 | 284,788 |
| | | 11,632,745 |
| Consumer Services 0.1% |
| Benesse Holdings, Inc. | 10,700 | 322,897 |
| Oriental Land Co., Ltd. | 5,500 | 315,888 |
| | | 638,785 |
| Diversified Financials 0.2% |
| Daiwa Securities Group, Inc. | 76,000 | 462,336 |
| Nomura Holdings, Inc. | 210,600 | 1,265,628 |
| ORIX Corp. | 61,400 | 938,359 |
| | | 2,666,323 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Energy 0.7% |
| Idemitsu Kosan Co., Ltd. | 35,200 | 1,125,411 |
| Inpex Corp. | 174,700 | 1,674,050 |
| JXTG Holdings, Inc. | 1,014,250 | 4,576,328 |
| San-Ai Oil Co., Ltd. | 39,800 | 338,081 |
| Showa Shell Sekiyu K.K. | 42,200 | 407,558 |
| | | 8,121,428 |
| Food & Staples Retailing 0.4% |
| Aeon Co., Ltd. | 98,300 | 1,456,894 |
| Lawson, Inc. | 3,700 | 245,492 |
| Seven & i Holdings Co., Ltd. | 74,400 | 3,142,207 |
| | | 4,844,593 |
| Food, Beverage & Tobacco 0.7% |
| Ajinomoto Co., Inc. | 34,500 | 672,275 |
| Asahi Group Holdings Ltd. | 28,200 | 1,065,500 |
| Coca-Cola Bottlers Japan, Inc. | 15,300 | 456,206 |
| Japan Tobacco, Inc. | 54,700 | 1,820,183 |
| Kewpie Corp. | 9,300 | 236,639 |
| Kirin Holdings Co., Ltd. | 92,300 | 1,796,872 |
| MEIJI Holdings Co., Ltd. | 5,900 | 501,528 |
| NH Foods Ltd. | 23,000 | 655,568 |
| Nisshin Seifun Group, Inc. | 17,930 | 275,489 |
| Suntory Beverage & Food Ltd. | 7,400 | 333,402 |
| Toyo Suisan Kaisha Ltd. | 8,500 | 319,241 |
| Yamazaki Baking Co., Ltd. | 16,100 | 339,818 |
| | | 8,472,721 |
| Health Care Equipment & Services 0.3% |
| Alfresa Holdings Corp. | 30,500 | 550,758 |
| Hoya Corp. | 23,700 | 1,132,689 |
| Medipal Holdings Corp. | 35,700 | 591,477 |
| Olympus Corp. | 11,200 | 431,848 |
| Suzuken Co., Ltd. | 15,730 | 520,519 |
| Terumo Corp. | 9,900 | 361,533 |
| | | 3,588,824 |
| Household & Personal Products 0.2% |
| Kao Corp. | 24,600 | 1,357,518 |
| Shiseido Co., Ltd. | 18,700 | 506,594 |
| Unicharm Corp. | 12,900 | 313,717 |
| | | 2,177,829 |
| Insurance 0.5% |
| Dai-ichi Life Holdings, Inc. | 57,000 | 971,280 |
| Japan Post Holdings Co., Ltd. | 33,300 | 413,191 |
| MS&AD Insurance Group Holdings, Inc. | 29,490 | 961,494 |
| Sompo Holdings, Inc. | 23,000 | 869,182 |
| T&D Holdings, Inc. | 42,850 | 637,160 |
| Tokio Marine Holdings, Inc. | 34,900 | 1,471,508 |
| | | 5,323,815 |
| Materials 2.0% |
| Air Water, Inc. | 14,000 | 269,653 |
| Asahi Kasei Corp. | 155,000 | 1,478,018 |
| Daicel Corp. | 24,300 | 278,955 |
| Denka Co., Ltd. | 63,000 | 324,596 |
| DIC Corp. | 11,500 | 409,362 |
| Dowa Holdings Co., Ltd. | 36,000 | 268,007 |
| JFE Holdings, Inc. | 111,600 | 1,903,516 |
| JSR Corp. | 22,700 | 414,856 |
| Kaneka Corp. | 37,000 | 291,739 |
| Kobe Steel Ltd. * | 96,100 | 853,757 |
| Kuraray Co., Ltd. | 34,800 | 561,641 |
| Mitsubishi Chemical Holdings Corp. | 218,500 | 1,710,240 |
| Mitsubishi Materials Corp. | 19,000 | 565,759 |
| Mitsui Chemicals, Inc. | 119,000 | 608,887 |
| Mitsui Mining & Smelting Co., Ltd. | 129,000 | 435,265 |
| Security | Number
of Shares | Value ($) |
| Nippon Paper Industries Co., Ltd. | 21,400 | 404,587 |
| Nippon Steel & Sumitomo Metal Corp. | 115,700 | 2,605,624 |
| Nitto Denko Corp. | 11,500 | 865,958 |
| Oji Holdings Corp. | 140,000 | 677,600 |
| Shin-Etsu Chemical Co., Ltd. | 21,200 | 1,842,654 |
| Showa Denko K.K. * | 31,100 | 594,008 |
| Sumitomo Chemical Co., Ltd. | 200,000 | 1,128,700 |
| Sumitomo Metal Mining Co., Ltd. | 60,000 | 812,489 |
| Taiheiyo Cement Corp. | 131,000 | 435,336 |
| Teijin Ltd. | 22,700 | 439,821 |
| Toray Industries, Inc. | 119,000 | 1,053,196 |
| Tosoh Corp. | 54,000 | 507,524 |
| Toyo Seikan Group Holdings Ltd. | 26,500 | 444,430 |
| Ube Industries Ltd. | 189,000 | 439,379 |
| | | 22,625,557 |
| Media 0.1% |
| Dentsu, Inc. | 11,901 | 671,777 |
| Hakuhodo DY Holdings, Inc. | 34,100 | 415,650 |
| | | 1,087,427 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.7% |
| Astellas Pharma, Inc. | 106,900 | 1,409,702 |
| Chugai Pharmaceutical Co., Ltd. | 7,500 | 266,506 |
| Daiichi Sankyo Co., Ltd. | 42,300 | 940,068 |
| Eisai Co., Ltd. | 13,000 | 683,535 |
| Kyowa Hakko Kirin Co., Ltd. | 17,900 | 307,539 |
| Mitsubishi Tanabe Pharma Corp. | 13,100 | 266,098 |
| Otsuka Holdings Co., Ltd. | 24,700 | 1,137,654 |
| Shionogi & Co., Ltd. | 7,700 | 396,534 |
| Takeda Pharmaceutical Co., Ltd. | 53,500 | 2,566,587 |
| | | 7,974,223 |
| Real Estate 0.4% |
| Daito Trust Construction Co., Ltd. | 4,700 | 691,619 |
| Daiwa House Industry Co., Ltd. | 39,300 | 1,168,348 |
| Mitsubishi Estate Co., Ltd. | 40,800 | 781,230 |
| Mitsui Fudosan Co., Ltd. | 42,000 | 924,095 |
| Sumitomo Realty & Development Co., Ltd. | 22,500 | 607,850 |
| | | 4,173,142 |
| Retailing 0.4% |
| Don Quijote Holdings Co., Ltd. | 8,000 | 291,471 |
| Fast Retailing Co., Ltd. | 1,900 | 620,574 |
| Isetan Mitsukoshi Holdings Ltd. | 54,100 | 591,161 |
| J. Front Retailing Co., Ltd. | 30,200 | 435,333 |
| K's Holdings Corp. | 16,800 | 323,173 |
| Nitori Holdings Co., Ltd. | 3,200 | 416,359 |
| Shimamura Co., Ltd. | 3,400 | 465,330 |
| Takashimaya Co., Ltd. | 44,000 | 405,152 |
| Yamada Denki Co., Ltd. | 140,600 | 738,375 |
| | | 4,286,928 |
| Semiconductors & Semiconductor Equipment 0.1% |
| Rohm Co., Ltd. | 7,700 | 540,755 |
| Tokyo Electron Ltd. | 8,000 | 971,149 |
| | | 1,511,904 |
| Software & Services 0.3% |
| Fujitsu Ltd. | 330,000 | 2,059,965 |
| Nintendo Co., Ltd. | 3,230 | 817,401 |
| NTT Data Corp. | 11,100 | 515,424 |
| | | 3,392,790 |
| Technology Hardware & Equipment 1.8% |
| Alps Electric Co., Ltd. | 11,400 | 335,077 |
| Brother Industries Ltd. | 26,400 | 543,196 |
| Canon, Inc. | 132,200 | 4,387,450 |
| FUJIFILM Holdings Corp. | 43,200 | 1,603,352 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Hitachi Ltd. | 928,000 | 5,126,613 |
| Ibiden Co., Ltd. | 23,000 | 404,859 |
| Japan Display, Inc. *(a) | 120,900 | 273,299 |
| Keyence Corp. | 1,146 | 460,708 |
| Konica Minolta, Inc. | 67,300 | 595,781 |
| Kyocera Corp. | 27,000 | 1,529,147 |
| Murata Manufacturing Co., Ltd. | 7,000 | 940,279 |
| NEC Corp. | 520,000 | 1,292,970 |
| Nippon Electric Glass Co., Ltd. | 87,000 | 539,603 |
| Omron Corp. | 16,000 | 669,877 |
| Ricoh Co., Ltd. | 129,200 | 1,076,935 |
| Seiko Epson Corp. | 27,000 | 553,048 |
| TDK Corp. | 10,600 | 656,729 |
| | | 20,988,923 |
| Telecommunication Services 1.3% |
| KDDI Corp. | 130,800 | 3,468,038 |
| Nippon Telegraph & Telephone Corp. | 125,508 | 5,378,724 |
| NTT DOCOMO, Inc. | 116,000 | 2,806,859 |
| SoftBank Group Corp. | 50,900 | 3,860,901 |
| | | 15,514,522 |
| Transportation 1.0% |
| ANA Holdings, Inc. | 136,000 | 409,669 |
| Central Japan Railway Co. | 11,500 | 1,928,649 |
| East Japan Railway Co. | 24,818 | 2,227,233 |
| Hankyu Hanshin Holdings, Inc. | 17,100 | 564,871 |
| Kawasaki Kisen Kaisha Ltd. *(a) | 209,000 | 549,529 |
| Kintetsu Group Holdings Co., Ltd. | 116,000 | 423,607 |
| Mitsui O.S.K. Lines Ltd. | 263,000 | 805,203 |
| Nagoya Railroad Co., Ltd. | 69,000 | 316,977 |
| Nippon Express Co., Ltd. | 137,000 | 752,058 |
| Nippon Yusen K.K. * | 478,000 | 961,047 |
| Odakyu Electric Railway Co., Ltd. | 13,500 | 262,073 |
| Seino Holdings Co., Ltd. | 32,500 | 376,411 |
| Tobu Railway Co., Ltd. | 66,000 | 334,737 |
| Tokyu Corp. | 60,000 | 429,754 |
| West Japan Railway Co. | 15,763 | 1,053,265 |
| Yamato Holdings Co., Ltd. | 35,500 | 767,118 |
| | | 12,162,201 |
| Utilities 0.9% |
| Chubu Electric Power Co., Inc. | 93,800 | 1,259,447 |
| Electric Power Development Co., Ltd. | 18,400 | 426,848 |
| Hokuriku Electric Power Co. | 30,800 | 284,674 |
| Kyushu Electric Power Co., Inc. | 43,000 | 463,834 |
| Osaka Gas Co., Ltd. | 248,000 | 928,320 |
| Shikoku Electric Power Co., Inc. | 27,600 | 331,613 |
| The Chugoku Electric Power Co., Inc. | 44,300 | 482,933 |
| The Kansai Electric Power Co., Inc. | 100,800 | 1,362,228 |
| Toho Gas Co., Ltd. | 34,000 | 243,030 |
| Tohoku Electric Power Co., Inc. | 62,200 | 829,241 |
| Tokyo Electric Power Co. Holdings, Inc. * | 497,900 | 1,934,112 |
| Tokyo Gas Co., Ltd. | 318,000 | 1,476,442 |
| | | 10,022,722 |
| | | 245,730,002 |
| |
| Luxembourg 0.5% |
| Energy 0.1% |
| Tenaris S.A. | 43,822 | 684,583 |
| Materials 0.3% |
| ArcelorMittal * | 506,836 | 3,982,890 |
| Media 0.1% |
| RTL Group S.A. * | 4,047 | 313,662 |
| SES S.A. | 22,482 | 491,380 |
| | | 805,042 |
| Security | Number
of Shares | Value ($) |
| Telecommunication Services 0.0% |
| Millicom International Cellular S.A. SDR | 9,671 | 529,896 |
| | | 6,002,411 |
| |
| Netherlands 4.8% |
| Banks 0.3% |
| ING Groep N.V. | 206,699 | 3,369,096 |
| Capital Goods 0.3% |
| Boskalis Westminster N.V. | 8,633 | 317,546 |
| Koninklijke Philips N.V. | 81,161 | 2,802,690 |
| | | 3,120,236 |
| Commercial & Professional Services 0.2% |
| Randstad Holding N.V. | 13,081 | 779,862 |
| RELX N.V. | 28,352 | 547,867 |
| Wolters Kluwer N.V. | 13,561 | 575,450 |
| | | 1,903,179 |
| Diversified Financials 0.0% |
| SNS Reaal N.V. *(a)(d) | 124,822 | — |
| Energy 2.5% |
| Fugro N.V. CVA * | 14,293 | 210,822 |
| Royal Dutch Shell plc, A Shares | 424,825 | 11,077,239 |
| Royal Dutch Shell plc, B Shares | 665,914 | 17,717,946 |
| | | 29,006,007 |
| Food & Staples Retailing 0.4% |
| Koninklijke Ahold Delhaize N.V. | 221,883 | 4,596,361 |
| Food, Beverage & Tobacco 0.1% |
| Heineken Holding N.V. | 9,258 | 775,860 |
| Heineken N.V. | 11,229 | 1,001,551 |
| | | 1,777,411 |
| Household & Personal Products 0.4% |
| Unilever N.V. CVA | 82,324 | 4,312,579 |
| Insurance 0.2% |
| Aegon N.V. | 277,247 | 1,415,029 |
| NN Group N.V. | 13,929 | 461,812 |
| | | 1,876,841 |
| Materials 0.2% |
| Akzo Nobel N.V. | 18,046 | 1,578,341 |
| Koninklijke DSM N.V. | 16,700 | 1,195,022 |
| | | 2,773,363 |
| Semiconductors & Semiconductor Equipment 0.1% |
| ASML Holding N.V. | 7,257 | 959,587 |
| NXP Semiconductors N.V. * | 3,362 | 355,532 |
| | | 1,315,119 |
| Software & Services 0.0% |
| Gemalto N.V. | 4,209 | 235,647 |
| Telecommunication Services 0.1% |
| Koninklijke KPN N.V. | 444,957 | 1,286,378 |
| VEON Ltd. ADR | 74,346 | 307,049 |
| | | 1,593,427 |
| | | 55,879,266 |
| |
| New Zealand 0.1% |
| Materials 0.0% |
| Fletcher Building Ltd. | 75,382 | 442,369 |
| Telecommunication Services 0.1% |
| Spark New Zealand Ltd. | 201,932 | 511,743 |
| | | 954,112 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Norway 0.8% |
| Banks 0.1% |
| DNB A.S.A. | 70,217 | 1,095,828 |
| Energy 0.4% |
| Statoil A.S.A. | 265,398 | 4,370,810 |
| Food, Beverage & Tobacco 0.1% |
| Marine Harvest A.S.A. * | 29,324 | 487,896 |
| Orkla A.S.A. | 59,669 | 541,370 |
| | | 1,029,266 |
| Materials 0.1% |
| Norsk Hydro A.S.A. | 160,062 | 912,137 |
| Yara International A.S.A. | 27,161 | 1,009,981 |
| | | 1,922,118 |
| Telecommunication Services 0.1% |
| Telenor A.S.A. | 80,165 | 1,294,954 |
| | | 9,712,976 |
| |
| Portugal 0.2% |
| Energy 0.1% |
| Galp Energia, SGPS, S.A. | 56,355 | 875,812 |
| Food & Staples Retailing 0.0% |
| Jeronimo Martins, SGPS, S.A. | 16,366 | 300,332 |
| Utilities 0.1% |
| EDP - Energias de Portugal S.A. | 401,351 | 1,324,547 |
| | | 2,500,691 |
| |
| Singapore 0.8% |
| Banks 0.3% |
| DBS Group Holdings Ltd. | 92,056 | 1,271,330 |
| Oversea-Chinese Banking Corp., Ltd. | 164,997 | 1,155,588 |
| United Overseas Bank Ltd. (a) | 65,052 | 1,012,841 |
| | | 3,439,759 |
| Capital Goods 0.1% |
| Keppel Corp., Ltd. | 212,000 | 985,698 |
| Sembcorp Industries Ltd. | 146,100 | 316,556 |
| | | 1,302,254 |
| Food, Beverage & Tobacco 0.1% |
| Wilmar International Ltd. | 211,966 | 538,409 |
| Media 0.0% |
| Singapore Press Holdings Ltd. | 111,600 | 276,954 |
| Real Estate 0.0% |
| CapitaLand Ltd. | 134,100 | 360,319 |
| Retailing 0.0% |
| Jardine Cycle & Carriage Ltd. | 11,600 | 392,551 |
| Technology Hardware & Equipment 0.1% |
| Flex Ltd. * | 49,067 | 758,576 |
| Telecommunication Services 0.1% |
| Singapore Telecommunications Ltd. | 541,186 | 1,448,906 |
| Transportation 0.1% |
| ComfortDelGro Corp., Ltd. | 163,100 | 319,580 |
| Singapore Airlines Ltd. | 70,970 | 519,909 |
| | | 839,489 |
| | | 9,357,217 |
| |
| Spain 4.5% |
| Banks 2.0% |
| Banco Bilbao Vizcaya Argentaria S.A. | 498,911 | 3,997,085 |
| Banco De Sabadell S.A. | 323,891 | 622,973 |
| Banco Popular Espanol S.A. *(a) | 632,106 | 442,303 |
| Security | Number
of Shares | Value ($) |
| Banco Santander S.A. | 2,663,176 | 17,355,709 |
| CaixaBank S.A. | 217,280 | 986,547 |
| | | 23,404,617 |
| Capital Goods 0.2% |
| ACS Actividades de Construccion y Servicios S.A. | 24,508 | 908,035 |
| Ferrovial S.A. | 38,315 | 815,059 |
| | | 1,723,094 |
| Energy 0.5% |
| Enagas S.A. | 14,228 | 373,876 |
| Repsol S.A. | 321,358 | 5,072,101 |
| | | 5,445,977 |
| Food & Staples Retailing 0.0% |
| Distribuidora Internacional de Alimentacion S.A. | 75,963 | 451,661 |
| Insurance 0.0% |
| Mapfre S.A. | 132,038 | 460,557 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Grifols S.A. | 7,812 | 209,680 |
| Retailing 0.1% |
| Industria de Diseno Textil S.A. | 33,827 | 1,296,291 |
| Software & Services 0.1% |
| Amadeus IT Group S.A. | 8,540 | 460,897 |
| Telecommunication Services 0.9% |
| Telefonica S.A. | 942,329 | 10,422,108 |
| Transportation 0.1% |
| Abertis Infraestructuras S.A. | 40,584 | 713,451 |
| Utilities 0.6% |
| Acciona S.A. | 3,976 | 328,022 |
| Endesa S.A. | 78,118 | 1,839,924 |
| Gas Natural SDG S.A. | 43,826 | 990,359 |
| Iberdrola S.A. | 501,452 | 3,604,821 |
| Red Electrica Corp. S.A. | 21,946 | 427,708 |
| | | 7,190,834 |
| | | 51,779,167 |
| |
| Sweden 2.5% |
| Automobiles & Components 0.1% |
| Autoliv, Inc. | 7,058 | 707,141 |
| Banks 0.5% |
| Nordea Bank AB | 211,298 | 2,598,715 |
| Skandinaviska Enskilda Banken AB, A Shares | 80,503 | 927,019 |
| Svenska Handelsbanken AB, A Shares | 79,528 | 1,128,338 |
| Swedbank AB, A Shares | 59,841 | 1,418,233 |
| | | 6,072,305 |
| Capital Goods 0.9% |
| Alfa Laval AB (a) | 21,416 | 438,850 |
| Assa Abloy AB, Class B | 29,978 | 648,870 |
| Atlas Copco AB, A Shares | 43,192 | 1,613,439 |
| Atlas Copco AB, B Shares | 20,332 | 675,634 |
| NCC AB, B Shares | 7,976 | 211,900 |
| Sandvik AB | 99,204 | 1,590,446 |
| Skanska AB, B Shares | 33,504 | 800,801 |
| SKF AB, B Shares | 38,577 | 846,578 |
| Trelleborg AB, B Shares (a) | 14,097 | 331,041 |
| Volvo AB, A Shares | 19,822 | 323,659 |
| Volvo AB, B Shares | 147,755 | 2,412,966 |
| | | 9,894,184 |
| Commercial & Professional Services 0.0% |
| Securitas AB, B Shares | 29,628 | 489,704 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Consumer Durables & Apparel 0.1% |
| Bonava AB | 9,717 | 157,110 |
| Electrolux AB, B Shares | 20,883 | 619,746 |
| | | 776,856 |
| Food, Beverage & Tobacco 0.0% |
| Swedish Match AB | 12,045 | 397,202 |
| Health Care Equipment & Services 0.0% |
| Getinge AB, B Shares | 15,271 | 298,289 |
| Household & Personal Products 0.1% |
| Svenska Cellulosa AB, S.C.A., B Shares | 34,350 | 1,137,236 |
| Materials 0.1% |
| Boliden AB | 24,184 | 690,895 |
| SSAB AB, A Shares * | 31,800 | 138,345 |
| SSAB AB, B Shares * | 55,680 | 197,545 |
| | | 1,026,785 |
| Retailing 0.2% |
| Hennes & Mauritz AB, B Shares | 68,034 | 1,684,556 |
| Technology Hardware & Equipment 0.3% |
| Hexagon AB, B Shares | 7,496 | 326,232 |
| Telefonaktiebolaget LM Ericsson, B Shares | 473,207 | 3,074,345 |
| | | 3,400,577 |
| Telecommunication Services 0.2% |
| Tele2 AB, B Shares | 94,116 | 947,153 |
| Telia Co. AB | 435,054 | 1,771,253 |
| | | 2,718,406 |
| | | 28,603,241 |
| |
| Switzerland 6.3% |
| Capital Goods 0.5% |
| ABB Ltd. | 143,995 | 3,528,490 |
| Geberit AG | 1,017 | 463,251 |
| Schindler Holding AG | 1,974 | 402,514 |
| Wolseley plc | 23,198 | 1,474,397 |
| | | 5,868,652 |
| Commercial & Professional Services 0.2% |
| Adecco Group AG | 21,888 | 1,626,318 |
| SGS S.A. | 229 | 515,664 |
| | | 2,141,982 |
| Consumer Durables & Apparel 0.3% |
| Cie Financiere Richemont S.A. | 28,668 | 2,395,455 |
| The Swatch Group AG | 3,510 | 272,302 |
| The Swatch Group AG - Bearer Shares | 2,399 | 959,764 |
| | | 3,627,521 |
| Diversified Financials 0.4% |
| Credit Suisse Group AG * | 148,056 | 2,257,997 |
| Julius Baer Group Ltd. * | 5,901 | 307,717 |
| UBS Group AG | 92,900 | 1,585,881 |
| | | 4,151,595 |
| Food, Beverage & Tobacco 1.1% |
| Aryzta AG * | 9,385 | 304,692 |
| Chocoladefabriken Lindt & Spruengli AG | 22 | 245,425 |
| Coca-Cola HBC AG CDI * | 15,986 | 443,501 |
| Nestle S.A. | 160,326 | 12,348,382 |
| | | 13,342,000 |
| Insurance 0.7% |
| Baloise Holding AG | 2,931 | 429,789 |
| Swiss Life Holding AG * | 1,568 | 510,287 |
| Security | Number
of Shares | Value ($) |
| Swiss Re AG | 33,522 | 2,915,720 |
| Zurich Insurance Group AG | 14,046 | 3,887,065 |
| | | 7,742,861 |
| Materials 1.2% |
| Clariant AG * | 18,524 | 375,143 |
| Givaudan S.A. | 325 | 626,181 |
| Glencore plc * | 2,312,063 | 9,086,727 |
| LafargeHolcim Ltd. * | 31,378 | 1,779,397 |
| Sika AG | 77 | 491,442 |
| Syngenta AG * | 4,094 | 1,902,618 |
| | | 14,261,508 |
| Pharmaceuticals, Biotechnology & Life Sciences 1.6% |
| Actelion Ltd. * | 1,447 | 389,710 |
| Lonza Group AG * | 1,774 | 362,978 |
| Novartis AG | 119,119 | 9,170,384 |
| Roche Holding AG | 30,255 | 7,916,653 |
| Roche Holding AG - Bearer Shares | 1,369 | 358,648 |
| | | 18,198,373 |
| Semiconductors & Semiconductor Equipment 0.1% |
| STMicroelectronics N.V. | 62,839 | 1,009,128 |
| Technology Hardware & Equipment 0.1% |
| TE Connectivity Ltd. | 18,950 | 1,466,161 |
| Telecommunication Services 0.1% |
| Swisscom AG | 1,950 | 850,361 |
| Transportation 0.0% |
| Kuehne & Nagel International AG | 3,414 | 516,317 |
| | | 73,176,459 |
| |
| United Kingdom 15.4% |
| Automobiles & Components 0.3% |
| Fiat Chrysler Automobiles N.V. * | 224,271 | 2,547,382 |
| GKN plc | 148,672 | 690,917 |
| | | 3,238,299 |
| Banks 2.3% |
| Barclays plc | 1,820,187 | 4,984,409 |
| HSBC Holdings plc | 1,661,369 | 13,700,175 |
| Lloyds Banking Group plc | 4,638,400 | 4,167,718 |
| Royal Bank of Scotland Group plc * | 328,944 | 1,129,325 |
| Standard Chartered plc * | 317,824 | 2,970,191 |
| | | 26,951,818 |
| Capital Goods 0.8% |
| Ashtead Group plc | 18,092 | 381,668 |
| BAE Systems plc | 239,418 | 1,944,546 |
| Balfour Beatty plc | 102,203 | 386,099 |
| Bunzl plc | 16,866 | 525,782 |
| Carillion plc | 76,563 | 220,531 |
| CNH Industrial N.V. | 81,940 | 903,598 |
| Cobham plc | 169,071 | 290,149 |
| DCC plc | 5,808 | 536,287 |
| IMI plc | 24,114 | 399,370 |
| Meggitt plc | 58,325 | 349,283 |
| Rolls-Royce Holdings plc * | 182,825 | 1,921,766 |
| Smiths Group plc | 28,407 | 603,889 |
| The Weir Group plc | 18,834 | 485,263 |
| Travis Perkins plc | 28,019 | 584,362 |
| | | 9,532,593 |
| Commercial & Professional Services 0.2% |
| Aggreko plc | 31,533 | 362,455 |
| Babcock International Group plc | 30,951 | 360,549 |
| Capita plc | 49,046 | 353,510 |
| G4S plc | 146,460 | 578,301 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Intertek Group plc | 6,805 | 358,155 |
| RELX plc | 31,701 | 642,728 |
| | | 2,655,698 |
| Consumer Durables & Apparel 0.2% |
| Barratt Developments plc | 48,531 | 364,157 |
| Burberry Group plc | 28,152 | 588,328 |
| Persimmon plc | 13,094 | 395,087 |
| Taylor Wimpey plc | 131,994 | 341,902 |
| The Berkeley Group Holdings plc | 7,437 | 313,674 |
| | | 2,003,148 |
| Consumer Services 0.3% |
| Carnival plc | 8,951 | 551,672 |
| Compass Group plc | 78,469 | 1,584,351 |
| InterContinental Hotels Group plc | 11,520 | 610,584 |
| Whitbread plc | 9,096 | 475,239 |
| William Hill plc | 78,254 | 297,321 |
| | | 3,519,167 |
| Diversified Financials 0.1% |
| 3i Group plc | 36,892 | 379,140 |
| Investec plc | 36,271 | 268,713 |
| Man Group plc | 241,435 | 480,484 |
| | | 1,128,337 |
| Energy 2.3% |
| Amec Foster Wheeler plc | 62,761 | 440,627 |
| BP plc | 4,280,275 | 24,502,898 |
| John Wood Group plc | 42,033 | 413,187 |
| Petrofac Ltd. | 26,392 | 278,146 |
| Subsea 7 S.A. | 38,902 | 641,091 |
| Tullow Oil plc *(a) | 126,008 | 341,861 |
| | | 26,617,810 |
| Food & Staples Retailing 0.7% |
| Booker Group plc | 142,633 | 358,392 |
| J. Sainsbury plc | 611,867 | 2,181,584 |
| Tesco plc * | 1,673,487 | 3,971,539 |
| WM Morrison Supermarkets plc | 577,842 | 1,795,008 |
| | | 8,306,523 |
| Food, Beverage & Tobacco 1.3% |
| Associated British Foods plc | 21,846 | 795,391 |
| British American Tobacco plc | 94,156 | 6,361,488 |
| Coca-Cola European Partners plc | 26,737 | 1,032,583 |
| Diageo plc | 99,379 | 2,892,640 |
| Imperial Brands plc | 58,243 | 2,852,353 |
| Tate & Lyle plc | 44,418 | 435,595 |
| | | 14,370,050 |
| Health Care Equipment & Services 0.1% |
| Smith & Nephew plc | 41,230 | 677,375 |
| Household & Personal Products 0.4% |
| Reckitt Benckiser Group plc | 22,887 | 2,108,749 |
| Unilever plc | 56,991 | 2,932,090 |
| | | 5,040,839 |
| Insurance 0.7% |
| Admiral Group plc | 10,625 | 276,682 |
| Aviva plc | 232,723 | 1,582,611 |
| Direct Line Insurance Group plc | 134,002 | 605,540 |
| Legal & General Group plc | 314,265 | 1,001,586 |
| Old Mutual plc | 373,925 | 939,145 |
| Phoenix Group Holdings | 32,129 | 307,278 |
| Prudential plc | 89,150 | 1,978,580 |
| RSA Insurance Group plc | 74,554 | 575,178 |
| Standard Life plc | 165,234 | 777,702 |
| Willis Towers Watson plc | 2,558 | 339,242 |
| | | 8,383,544 |
| Security | Number
of Shares | Value ($) |
| Materials 1.5% |
| Anglo American plc * | 246,591 | 3,530,554 |
| Antofagasta plc | 64,010 | 694,492 |
| BHP Billiton plc | 316,317 | 4,822,314 |
| DS Smith plc | 59,279 | 331,426 |
| Johnson Matthey plc | 23,839 | 919,551 |
| Mondi plc | 25,003 | 646,863 |
| Rio Tinto plc | 152,267 | 6,006,963 |
| | | 16,952,163 |
| Media 0.5% |
| Informa plc | 28,092 | 233,576 |
| ITV plc | 205,288 | 558,306 |
| Liberty Global plc, Class A * | 14,594 | 516,919 |
| Liberty Global plc, Series C * | 32,974 | 1,141,230 |
| Pearson plc | 105,293 | 868,528 |
| Sky plc | 77,584 | 996,667 |
| WPP plc | 63,618 | 1,362,284 |
| | | 5,677,510 |
| Pharmaceuticals, Biotechnology & Life Sciences 1.2% |
| AstraZeneca plc | 113,873 | 6,819,780 |
| GlaxoSmithKline plc | 326,967 | 6,581,141 |
| | | 13,400,921 |
| Real Estate 0.0% |
| Land Securities Group plc | 26,896 | 385,196 |
| Retailing 0.4% |
| Debenhams plc | 345,482 | 229,104 |
| Inchcape plc | 58,409 | 646,149 |
| Kingfisher plc | 323,817 | 1,432,547 |
| Marks & Spencer Group plc | 276,049 | 1,310,168 |
| Next plc | 13,157 | 733,419 |
| | | 4,351,387 |
| Software & Services 0.0% |
| The Sage Group plc | 56,953 | 494,358 |
| Telecommunication Services 1.0% |
| BT Group plc | 482,451 | 1,903,242 |
| Inmarsat plc | 33,916 | 358,692 |
| Vodafone Group plc | 3,604,356 | 9,283,522 |
| | | 11,545,456 |
| Transportation 0.2% |
| easyJet plc | 26,125 | 395,175 |
| FirstGroup plc * | 369,423 | 653,505 |
| International Consolidated Airlines Group S.A. | 53,174 | 385,520 |
| Royal Mail plc | 139,298 | 726,383 |
| | | 2,160,583 |
| Utilities 0.9% |
| Centrica plc | 937,290 | 2,401,757 |
| Drax Group plc | 79,113 | 330,953 |
| National Grid plc | 286,358 | 3,707,835 |
| Pennon Group plc | 23,128 | 256,585 |
| Severn Trent plc | 15,720 | 473,218 |
| SSE plc | 119,617 | 2,154,822 |
| United Utilities Group plc | 44,800 | 564,579 |
| | | 9,889,749 |
| | | 177,282,524 |
| Total Common Stock |
| (Cost $1,131,136,761) | | 1,134,432,458 |
|
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Preferred Stock 0.8% of net assets |
| |
| Germany 0.7% |
| Automobiles & Components 0.6% |
| Bayerische Motoren Werke AG | 8,187 | 673,277 |
| Volkswagen AG | 36,225 | 5,750,599 |
| | | 6,423,876 |
| Household & Personal Products 0.1% |
| Henkel AG & Co. KGaA | 7,553 | 1,027,689 |
| Materials 0.0% |
| Fuchs Petrolub SE | 4,564 | 235,408 |
| Utilities 0.0% |
| RWE AG, Non Voting Shares | 18,565 | 225,641 |
| | | 7,912,614 |
| |
| Italy 0.1% |
| Banks 0.0% |
| Intesa Sanpaolo S.p.A. - RSP | 69,978 | 191,606 |
| Telecommunication Services 0.1% |
| Telecom Italia S.p.A. - RSP | 1,625,269 | 1,159,886 |
| | | 1,351,492 |
| |
| Spain 0.0% |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Grifols S.A., Class B | 6,295 | 134,519 |
| |
| United Kingdom 0.0% |
| Capital Goods 0.0% |
| Rolls-Royce Holdings plc (d) | 12,980,575 | 16,812 |
| Total Preferred Stock |
| (Cost $9,790,008) | | 9,415,437 |
|
| Other Investment Company 1.3% of net assets |
| |
| United States 1.3% |
| Securities Lending Collateral 1.3% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (b) | 15,185,130 | 15,185,130 |
| Total Other Investment Company |
| (Cost $15,185,130) | | 15,185,130 |
Security
Rate, Maturity Date | Face Amount
Local Currency | Value ($) |
| Short-Term Investments 0.4% of net assets |
| |
| Time Deposits 0.4% |
| Brown Brothers Harriman |
| Australian Dollar | | |
| 0.50%, 05/01/17 (c) | 7,583 | 5,678 |
| Danish Krona | | |
| (0.60%), 05/01/17 (c) | 8,641 | 1,266 |
| New Zealand Dollar | | |
| 0.65%, 05/01/17 (c) | 1,203 | 826 |
| Norwegian Krone | | |
| 0.05%, 05/02/17 (c) | 202,348 | 23,567 |
| Singapore Dollar | | |
| 0.01%, 05/02/17 (c) | 3,447 | 2,467 |
Security
Rate, Maturity Date | Face Amount
Local Currency | Value ($) |
| Swedish Krone | | |
| (0.95%), 05/02/17 (c) | 10,330 | 1,166 |
| Swiss Franc | | |
| (1.45%), 05/02/17 (c) | 121,738 | 122,350 |
| DNB |
| Euro | | |
| (0.58%), 05/02/17 (c) | 447,433 | 487,389 |
| ING Bank |
| Hong Kong Dollar | | |
| 0.01%, 05/02/17 (c) | 192,530 | 24,752 |
| Royal Bank of Canada |
| Canadian Dollar | | |
| 0.05%, 05/01/17 (c) | 64,511 | 47,259 |
| Skandinaviska Enskilda Banken |
| Japanese Yen | | |
| (0.22%), 05/01/17 (c) | 5,998,535 | 53,811 |
| Sumitomo Mitsui Banking Corp. |
| Great British Pound | | |
| 0.05%, 05/02/17 (c) | 26,793 | 34,702 |
| U.S. Dollar | | |
| 0.42%, 05/01/17 (c) | 3,197,460 | 3,197,460 |
| Total Short-Term Investments |
| (Cost $4,002,693) | | 4,002,693 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $1,175,863,768 unrealized appreciation and depreciation were $99,171,964 and ($112,000,014), respectively, with a net unrealized depreciation of ($12,828,050).
At 04/30/17, the values of certain foreign securities held by the fund aggregating $1,053,141,196 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial note 2(a) for additional information)
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $14,326,945. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| CDI — | CHESS Depositary Interest |
| CVA — | Dutch Certificate |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
| SDR — | Swedish Depositary Receipt |
In addition to the above the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI EAFE Index, e-mini, Long expires 06/16/17 | 104 | 9,483,760 | 198,519 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 97.8% | Common Stock | 481,151,760 | 580,337,835 |
| 0.4% | Preferred Stock | 1,593,130 | 2,033,000 |
| 0.0% | Rights | — | 1,085 |
| 2.0% | Other Investment Company | 11,988,020 | 11,988,020 |
| 1.1% | Short-Term Investments | 6,324,986 | 6,324,986 |
| 101.3% | Total Investments | 501,057,896 | 600,684,926 |
| (1.3%) | Other Assets and Liabilities, Net | | (7,466,531) |
| 100.0% | Net Assets | | 593,218,395 |
| Security | Number
of Shares | Value ($) |
| Common Stock 97.8% of net assets |
| |
| Australia 5.5% |
| Banks 0.2% |
| Bank of Queensland Ltd. | 76,010 | 680,071 |
| Genworth Mortgage Insurance Australia Ltd. | 123,452 | 303,592 |
| | | 983,663 |
| Capital Goods 0.2% |
| GWA Group Ltd. | 109,046 | 254,665 |
| Monadelphous Group Ltd. | 81,572 | 762,662 |
| Seven Group Holdings Ltd. | 41,062 | 340,634 |
| | | 1,357,961 |
| Commercial & Professional Services 0.4% |
| ALS Ltd. | 168,070 | 786,137 |
| Cleanaway Waste Management Ltd. | 628,001 | 596,343 |
| McMillan Shakespeare Ltd. | 17,949 | 181,559 |
| Programmed Maintenance Services Ltd. | 215,303 | 277,119 |
| SEEK Ltd. | 28,245 | 359,789 |
| Spotless Group Holdings Ltd. | 546,447 | 441,500 |
| | | 2,642,447 |
| Consumer Durables & Apparel 0.0% |
| G.U.D. Holdings Ltd. | 29,608 | 275,601 |
| Consumer Services 0.5% |
| Ardent Leisure Group | 136,289 | 206,936 |
| Aristocrat Leisure Ltd. | 32,029 | 470,688 |
| Crown Resorts Ltd. | 87,366 | 816,901 |
| Flight Centre Travel Group Ltd. | 15,754 | 370,560 |
| InvoCare Ltd. | 18,989 | 207,180 |
| Navitas Ltd. | 70,288 | 241,367 |
| The Star Entertainment Grp Ltd. | 161,469 | 672,556 |
| | | 2,986,188 |
| Diversified Financials 0.4% |
| ASX Ltd. | 18,988 | 719,829 |
| Challenger Ltd. | 63,950 | 631,627 |
| IOOF Holdings Ltd. | 59,529 | 392,399 |
| IRESS Ltd. | 17,270 | 160,814 |
| Perpetual Ltd. | 6,810 | 268,944 |
| | | 2,173,613 |
| Security | Number
of Shares | Value ($) |
| Energy 0.2% |
| AWE Ltd. * | 352,062 | 119,684 |
| Beach Energy Ltd. | 552,843 | 303,545 |
| Washington H Soul Pattinson & Co., Ltd. | 19,609 | 276,387 |
| Whitehaven Coal Ltd. * | 253,366 | 518,268 |
| | | 1,217,884 |
| Food, Beverage & Tobacco 0.3% |
| Bega Cheese Ltd. | 41,327 | 185,387 |
| GrainCorp Ltd., Class A | 115,031 | 767,154 |
| Treasury Wine Estates Ltd. | 72,593 | 651,766 |
| | | 1,604,307 |
| Health Care Equipment & Services 0.5% |
| Ansell Ltd. | 25,146 | 447,623 |
| Australian Pharmaceutical Industries Ltd. | 224,600 | 374,477 |
| Cochlear Ltd. | 5,255 | 550,095 |
| Healthscope Ltd. | 84,327 | 139,269 |
| Primary Health Care Ltd. | 216,439 | 548,803 |
| Ramsay Health Care Ltd. | 12,532 | 671,992 |
| Sigma Pharmaceuticals Ltd. | 610,719 | 571,768 |
| | | 3,304,027 |
| Insurance 0.1% |
| nib Holdings Ltd. | 107,434 | 482,679 |
| Materials 0.6% |
| Adelaide Brighton Ltd. | 101,944 | 451,966 |
| DuluxGroup Ltd. | 63,551 | 321,778 |
| Mineral Resources Ltd. | 48,630 | 388,929 |
| Nufarm Ltd. | 51,233 | 389,384 |
| OceanaGold Corp. | 77,672 | 253,207 |
| Orora Ltd. | 237,145 | 534,693 |
| OZ Minerals Ltd. | 148,604 | 789,062 |
| Resolute Mining Ltd. | 154,436 | 143,392 |
| Western Areas Ltd. * | 82,204 | 136,430 |
| | | 3,408,841 |
| Media 0.4% |
| APN News & Media Ltd. | 53,933 | 100,515 |
| Event Hospitality & Entertainment Ltd. | 21,761 | 211,725 |
| Fairfax Media Ltd. | 1,141,223 | 904,727 |
| Nine Entertainment Co. Holdings Ltd. | 296,986 | 273,464 |
| NZME Ltd. | 54,123 | 33,435 |
| Seven West Media Ltd. | 807,408 | 446,783 |
| Southern Cross Media Group Ltd. | 257,510 | 248,887 |
| Village Roadshow Ltd. | 55,828 | 151,643 |
| | | 2,371,179 |
| Real Estate 0.6% |
| Charter Hall Retail REIT | 44,770 | 149,858 |
| Cromwell Property Group | 215,784 | 156,689 |
| Dexus Property Group | 112,514 | 859,150 |
| Goodman Group | 158,557 | 962,710 |
| Investa Office Fund | 67,331 | 239,377 |
| The GPT Group | 193,842 | 761,427 |
| Vicinity Centres | 145,082 | 312,712 |
| | | 3,441,923 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Retailing 0.5% |
| AP Eagers Ltd. | 31,349 | 188,497 |
| Automotive Holdings Group Ltd. | 135,677 | 378,606 |
| Harvey Norman Holdings Ltd. | 107,670 | 337,722 |
| JB Hi-Fi Ltd. | 34,640 | 640,006 |
| Myer Holdings Ltd. | 936,430 | 778,068 |
| Premier Investments Ltd. | 22,686 | 222,470 |
| Super Retail Group Ltd. | 43,672 | 308,439 |
| | | 2,853,808 |
| Software & Services 0.2% |
| carsales.com Ltd. | 19,598 | 171,886 |
| Computershare Ltd. | 89,477 | 986,399 |
| | | 1,158,285 |
| Telecommunication Services 0.0% |
| TPG Telecom Ltd. | 24,815 | 109,487 |
| Transportation 0.3% |
| Qantas Airways Ltd. | 349,622 | 1,108,255 |
| Qube Holdings Ltd. | 122,970 | 241,741 |
| Sydney Airport | 112,160 | 579,293 |
| Virgin Australia International Holdings *(d) | 176,214 | — |
| | | 1,929,289 |
| Utilities 0.1% |
| AusNet Services | 410,457 | 537,560 |
| | | 32,838,742 |
| |
| Austria 1.0% |
| Capital Goods 0.2% |
| ANDRITZ AG | 13,195 | 729,118 |
| Zumtobel Group AG | 10,529 | 219,251 |
| | | 948,369 |
| Energy 0.0% |
| Schoeller-Bleckmann Oilfield Equipment AG | 3,334 | 232,758 |
| Insurance 0.1% |
| UNIQA Insurance Group AG | 32,282 | 269,382 |
| Vienna Insurance Group AG Wiener Versicherung Gruppe | 20,412 | 529,499 |
| | | 798,881 |
| Materials 0.3% |
| Lenzing AG | 1,754 | 327,100 |
| RHI AG | 12,748 | 371,170 |
| Wienerberger AG | 37,354 | 874,543 |
| | | 1,572,813 |
| Real Estate 0.1% |
| BUWOG AG * | 8,790 | 237,363 |
| CA Immobilien Anlagen AG * | 8,325 | 182,313 |
| IMMOFINANZ AG * | 175,288 | 364,385 |
| | | 784,061 |
| Semiconductors & Semiconductor Equipment 0.1% |
| ams AG | 6,161 | 396,358 |
| Technology Hardware & Equipment 0.0% |
| Austria Technologie & Systemtechnik AG | 13,861 | 149,758 |
| Telecommunication Services 0.1% |
| Telekom Austria AG * | 43,607 | 306,240 |
| Transportation 0.1% |
| Oesterreichische Post AG | 14,166 | 601,424 |
| Security | Number
of Shares | Value ($) |
| Utilities 0.0% |
| Verbund AG | 14,332 | 237,939 |
| | | 6,028,601 |
| |
| Belgium 1.3% |
| Capital Goods 0.0% |
| Cie d'Entreprises CFE | 1,356 | 197,625 |
| Diversified Financials 0.1% |
| Ackermans & van Haaren N.V. | 2,418 | 395,747 |
| Gimv N.V. | 5,608 | 342,205 |
| | | 737,952 |
| Energy 0.0% |
| Euronav N.V. | 17,736 | 140,787 |
| Health Care Equipment & Services 0.1% |
| AGFA-Gevaert N.V. * | 88,141 | 447,224 |
| Household & Personal Products 0.1% |
| Ontex Group N.V. | 10,634 | 354,804 |
| Materials 0.3% |
| Bekaert N.V. | 14,871 | 748,526 |
| Nyrstar N.V. *(a) | 59,277 | 335,702 |
| Tessenderlo Chemie N.V. * | 8,333 | 342,021 |
| | | 1,426,249 |
| Media 0.1% |
| Telenet Group Holding N.V. * | 11,775 | 715,457 |
| Real Estate 0.1% |
| Befimmo S.A. | 3,355 | 195,794 |
| Cofinimmo S.A. | 3,364 | 407,138 |
| | | 602,932 |
| Retailing 0.1% |
| D'ieteren S.A./N.V. | 15,164 | 739,852 |
| Technology Hardware & Equipment 0.1% |
| Barco N.V. | 3,874 | 381,629 |
| EVS Broadcast Equipment S.A. | 4,537 | 182,730 |
| | | 564,359 |
| Telecommunication Services 0.1% |
| Orange Belgium S.A. * | 18,090 | 377,346 |
| Transportation 0.1% |
| bpost S.A. | 27,116 | 649,914 |
| Utilities 0.1% |
| Elia System Operator S.A./N.V. | 9,049 | 479,970 |
| | | 7,434,471 |
| |
| Canada 7.6% |
| Automobiles & Components 0.2% |
| Linamar Corp. | 14,532 | 617,880 |
| Martinrea International, Inc. | 55,271 | 421,907 |
| | | 1,039,787 |
| Banks 0.2% |
| Canadian Western Bank | 15,639 | 307,384 |
| Genworth MI Canada, Inc. | 15,005 | 372,638 |
| Home Capital Group, Inc. (a) | 13,270 | 78,159 |
| Laurentian Bank of Canada | 7,411 | 303,161 |
| | | 1,061,342 |
| Capital Goods 0.7% |
| Aecon Group, Inc. | 31,172 | 369,711 |
| Ag Growth International, Inc. | 4,462 | 181,186 |
| ATS Automation Tooling Systems, Inc. * | 20,056 | 191,296 |
| Bird Construction, Inc. | 24,219 | 169,083 |
| CAE, Inc. | 46,219 | 705,957 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| MacDonald, Dettwiler & Associates Ltd. | 6,999 | 345,579 |
| New Flyer Industries, Inc. | 6,192 | 230,661 |
| Richelieu Hardware Ltd. | 10,914 | 242,898 |
| Russel Metals, Inc. | 38,717 | 742,545 |
| Toromont Industries Ltd. | 14,181 | 504,472 |
| WSP Global, Inc. | 12,323 | 448,938 |
| | | 4,132,326 |
| Commercial & Professional Services 0.6% |
| Morneau Shepell, Inc. | 11,712 | 172,885 |
| Ritchie Bros. Auctioneers, Inc. | 9,355 | 306,751 |
| Stantec, Inc. | 17,848 | 458,017 |
| Transcontinental, Inc., Class A | 30,520 | 544,421 |
| Waste Connections, Inc. | 19,734 | 1,815,461 |
| | | 3,297,535 |
| Consumer Durables & Apparel 0.2% |
| Dorel Industries, Inc., Class B | 17,136 | 411,751 |
| Gildan Activewear, Inc. | 28,599 | 801,790 |
| | | 1,213,541 |
| Consumer Services 0.1% |
| EnerCare, Inc. | 12,940 | 205,516 |
| Great Canadian Gaming Corp. * | 10,027 | 179,010 |
| Restaurant Brands International, Inc. | 6,300 | 353,618 |
| | | 738,144 |
| Diversified Financials 0.1% |
| AGF Management Ltd., Class B | 90,746 | 453,381 |
| TMX Group Ltd. | 7,600 | 429,370 |
| | | 882,751 |
| Energy 1.4% |
| AltaGas Ltd. | 26,949 | 603,912 |
| Bonavista Energy Corp. | 289,700 | 609,090 |
| Bonterra Energy Corp. | 8,422 | 119,446 |
| Canadian Energy Services & Technology Corp. | 52,642 | 248,739 |
| Canyon Services Group, Inc. * | 46,395 | 215,143 |
| Crew Energy, Inc. * | 32,916 | 99,106 |
| Enerflex Ltd. | 35,149 | 495,415 |
| Ensign Energy Services, Inc. | 108,289 | 602,112 |
| Gran Tierra Energy, Inc. * | 118,951 | 299,763 |
| MEG Energy Corp. * | 72,462 | 328,058 |
| Mullen Group Ltd. | 46,492 | 509,861 |
| Parex Resources, Inc. * | 16,000 | 198,674 |
| Parkland Fuel Corp. | 37,862 | 823,780 |
| Pason Systems, Inc. | 21,896 | 325,140 |
| Peyto Exploration & Development Corp. | 21,202 | 385,816 |
| Precision Drilling Corp. * | 174,700 | 694,935 |
| Secure Energy Services, Inc. | 33,031 | 215,117 |
| ShawCor Ltd. | 23,496 | 589,530 |
| Tourmaline Oil Corp. * | 12,377 | 243,179 |
| Trinidad Drilling Ltd. * | 180,496 | 282,965 |
| Veresen, Inc. | 36,896 | 411,652 |
| Whitecap Resources, Inc. | 32,100 | 227,161 |
| | | 8,528,594 |
| Food & Staples Retailing 0.2% |
| The Jean Coutu Group (PJC), Inc., Class A | 29,514 | 483,017 |
| The North West Co., Inc. | 19,015 | 448,543 |
| | | 931,560 |
| Food, Beverage & Tobacco 0.2% |
| Cott Corp. | 24,300 | 319,716 |
| Maple Leaf Foods, Inc. | 27,163 | 679,945 |
| | | 999,661 |
| Security | Number
of Shares | Value ($) |
| Health Care Equipment & Services 0.1% |
| Chartwell Retirement Residences | 15,700 | 178,732 |
| Extendicare, Inc. | 34,500 | 252,485 |
| Medical Facilities Corp. | 11,286 | 134,518 |
| | | 565,735 |
| Insurance 0.1% |
| Industrial Alliance Insurance & Financial Services, Inc. | 18,624 | 785,727 |
| Materials 1.5% |
| Alamos Gold, Inc., Class A | 27,530 | 197,039 |
| Canam Group, Inc. | 22,174 | 197,691 |
| Canfor Corp. * | 34,895 | 524,045 |
| Cascades, Inc. | 39,019 | 469,926 |
| CCL Industries, Inc., Class B | 2,038 | 471,783 |
| Centerra Gold, Inc. | 70,977 | 366,571 |
| Chemtrade Logistics Income Fund | 22,581 | 314,468 |
| Dominion Diamond Corp. | 25,487 | 309,754 |
| Eldorado Gold Corp. | 176,008 | 643,405 |
| Franco-Nevada Corp. | 7,182 | 488,463 |
| Hudbay Minerals, Inc. | 52,556 | 313,784 |
| IAMGOLD Corp. * | 171,168 | 707,218 |
| Interfor Corp. * | 19,595 | 289,393 |
| Intertape Polymer Group, Inc. | 10,085 | 178,051 |
| Labrador Iron Ore Royalty Corp. | 13,216 | 171,657 |
| Lundin Mining Corp. | 83,525 | 445,450 |
| Nevsun Resources Ltd. | 83,465 | 185,267 |
| New Gold, Inc. * | 77,492 | 219,695 |
| Norbord, Inc. | 6,100 | 188,847 |
| Pan American Silver Corp. | 18,630 | 312,399 |
| Resolute Forest Products, Inc. * | 121,488 | 759,300 |
| SEMAFO, Inc. * | 56,900 | 130,886 |
| Silver Wheaton Corp. | 29,062 | 579,941 |
| Stella-Jones, Inc. | 4,300 | 136,209 |
| Western Forest Products, Inc. | 153,095 | 241,130 |
| | | 8,842,372 |
| Media 0.3% |
| Aimia, Inc. | 61,299 | 410,441 |
| Cineplex, Inc. | 12,960 | 510,121 |
| Cogeco Communications, Inc. | 6,631 | 379,435 |
| Corus Entertainment, Inc., Class B | 29,743 | 291,972 |
| Entertainment One Ltd. | 102,948 | 329,745 |
| | | 1,921,714 |
| Real Estate 0.6% |
| Artis Real Estate Investment Trust | 23,973 | 238,492 |
| Boardwalk Real Estate Investment Trust (a) | 5,477 | 184,767 |
| Canadian Apartment Properties REIT | 8,699 | 215,842 |
| Canadian Real Estate Investment Trust | 6,751 | 244,214 |
| Colliers International Group, Inc. | 3,834 | 187,733 |
| Cominar Real Estate Investment Trust | 23,713 | 245,807 |
| Dream Global Real Estate Investment Trust | 24,580 | 178,266 |
| Dream Office Real Estate Investment Trust | 19,717 | 280,650 |
| First Capital Realty, Inc. | 22,478 | 326,701 |
| Granite Real Estate Investment Trust | 7,204 | 258,384 |
| H&R Real Estate Investment Trust | 25,704 | 436,105 |
| RioCan Real Estate Investment Trust | 28,620 | 543,655 |
| Smart Real Estate Investment Trust | 8,925 | 211,577 |
| | | 3,552,193 |
| Retailing 0.2% |
| AutoCanada, Inc. | 10,200 | 175,448 |
| Hudson's Bay Co. (a) | 43,200 | 394,957 |
| Uni-Select, Inc. | 12,520 | 331,745 |
| | | 902,150 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Semiconductors & Semiconductor Equipment 0.0% |
| Canadian Solar, Inc. * | 13,419 | 178,473 |
| Software & Services 0.2% |
| Constellation Software, Inc. | 588 | 268,932 |
| DH Corp. (a) | 21,691 | 403,454 |
| Open Text Corp. | 14,750 | 511,423 |
| | | 1,183,809 |
| Transportation 0.3% |
| Air Canada * | 24,536 | 233,488 |
| Exchange Income Corp. | 6,230 | 159,966 |
| Student Transportation, Inc. | 28,192 | 167,494 |
| TFI International, Inc. | 28,870 | 628,560 |
| WestJet Airlines Ltd. | 28,142 | 465,511 |
| Westshore Terminals Investment Corp. | 12,956 | 226,556 |
| | | 1,881,575 |
| Utilities 0.4% |
| Algonquin Power & Utilities Corp. | 21,100 | 199,863 |
| Capital Power Corp. | 32,999 | 601,454 |
| Hydro One Ltd. | 12,500 | 220,138 |
| Innergex Renewable Energy, Inc. | 14,700 | 150,118 |
| Just Energy Group, Inc. (a) | 45,214 | 276,242 |
| Northland Power, Inc. | 17,946 | 317,232 |
| Superior Plus Corp. | 65,743 | 629,472 |
| Valener, Inc. | 15,857 | 253,819 |
| | | 2,648,338 |
| | | 45,287,327 |
| |
| Denmark 1.4% |
| Banks 0.2% |
| Jyske Bank A/S | 8,013 | 428,503 |
| Sydbank A/S | 10,770 | 391,754 |
| | | 820,257 |
| Capital Goods 0.4% |
| FLSmidth & Co. A/S | 18,667 | 1,122,205 |
| NKT Holding A/S * | 8,386 | 661,044 |
| Per Aarsleff Holding A/S | 7,544 | 193,505 |
| Rockwool International A/S, B Shares | 3,244 | 593,856 |
| | | 2,570,610 |
| Food, Beverage & Tobacco 0.1% |
| Royal Unibrew A/S | 5,500 | 239,146 |
| Schouw & Co. | 3,706 | 381,471 |
| | | 620,617 |
| Health Care Equipment & Services 0.2% |
| GN Store Nord A/S | 25,947 | 674,442 |
| William Demant Holding A/S * | 12,543 | 287,080 |
| | | 961,522 |
| Insurance 0.1% |
| Topdanmark A/S * | 8,225 | 225,192 |
| Tryg A/S | 21,021 | 403,325 |
| | | 628,517 |
| Materials 0.2% |
| Chr. Hansen Holding A/S | 5,679 | 382,617 |
| Novozymes A/S, B Shares | 20,413 | 881,292 |
| | | 1,263,909 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| H. Lundbeck A/S | 7,581 | 388,868 |
| Retailing 0.0% |
| Matas A/S | 12,074 | 186,543 |
| Software & Services 0.0% |
| SimCorp A/S | 3,487 | 218,619 |
| Security | Number
of Shares | Value ($) |
| Transportation 0.1% |
| D/S Norden A/S * | 19,128 | 382,306 |
| Dfds A/S | 6,155 | 367,000 |
| | | 749,306 |
| | | 8,408,768 |
| |
| Finland 1.5% |
| Capital Goods 0.6% |
| Cargotec Oyj, B Shares | 11,705 | 697,437 |
| Cramo Oyj | 11,407 | 296,600 |
| Konecranes Oyj | 13,306 | 558,018 |
| PKC Group Oyj * | 9,747 | 250,252 |
| Ramirent Oyj | 29,047 | 276,225 |
| Uponor Oyj | 12,648 | 239,512 |
| Valmet Oyj | 32,874 | 598,798 |
| Yit Oyj (a) | 77,274 | 611,219 |
| | | 3,528,061 |
| Commercial & Professional Services 0.1% |
| Caverion Corp. * | 43,910 | 358,966 |
| Lassila & Tikanoja Oyj | 10,719 | 208,187 |
| | | 567,153 |
| Consumer Durables & Apparel 0.1% |
| Amer Sports Oyj * | 20,974 | 464,226 |
| Materials 0.5% |
| Huhtamaki Oyj (a) | 14,954 | 579,654 |
| Kemira Oyj | 40,174 | 513,908 |
| Metsa Board Oyj | 52,525 | 372,612 |
| Outokumpu Oyj | 71,527 | 684,941 |
| Outotec Oyj *(a) | 61,788 | 458,479 |
| Tikkurila Oyj | 12,981 | 257,352 |
| | | 2,866,946 |
| Media 0.1% |
| Sanoma Oyj | 56,774 | 500,936 |
| Real Estate 0.0% |
| Sponda Oyj | 48,557 | 214,176 |
| Software & Services 0.1% |
| Tieto Oyj | 24,082 | 755,118 |
| | | 8,896,616 |
| |
| France 3.8% |
| Automobiles & Components 0.1% |
| Plastic Omnium S.A. | 12,214 | 478,016 |
| Capital Goods 0.2% |
| Dassault Aviation S.A. | 216 | 295,173 |
| Nexans S.A. * | 14,072 | 782,289 |
| Tarkett S.A. | 4,954 | 232,765 |
| | | 1,310,227 |
| Commercial & Professional Services 0.3% |
| Edenred | 36,089 | 924,480 |
| Elis S.A. | 12,870 | 266,367 |
| Societe BIC S.A. | 5,441 | 611,446 |
| SPIE S.A. | 8,464 | 234,581 |
| | | 2,036,874 |
| Consumer Durables & Apparel 0.1% |
| SEB S.A. | 5,101 | 821,433 |
| Consumer Services 0.1% |
| Elior Group | 17,025 | 424,756 |
| Diversified Financials 0.0% |
| Amundi S.A. | 4,024 | 264,803 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Energy 0.1% |
| Bourbon Corp. (a) | 21,357 | 240,784 |
| Etablissements Maurel et Prom * | 81,565 | 308,314 |
| | | 549,098 |
| Food, Beverage & Tobacco 0.1% |
| Remy Cointreau S.A. | 3,184 | 321,191 |
| Health Care Equipment & Services 0.2% |
| BioMerieux | 1,889 | 377,754 |
| Korian S.A. | 7,771 | 250,409 |
| Orpea | 4,029 | 411,524 |
| | | 1,039,687 |
| Insurance 0.1% |
| Coface S.A. * | 34,386 | 268,953 |
| Euler Hermes Group | 4,517 | 441,292 |
| | | 710,245 |
| Materials 0.2% |
| Eramet * | 4,828 | 232,339 |
| Imerys S.A. | 9,007 | 774,881 |
| Vicat S.A. | 5,962 | 424,089 |
| | | 1,431,309 |
| Media 0.5% |
| Havas S.A. | 32,204 | 297,847 |
| IPSOS | 11,182 | 358,596 |
| JCDecaux S.A. | 14,159 | 499,806 |
| Metropole Television S.A. | 24,920 | 567,287 |
| Technicolor S.A. | 84,555 | 429,348 |
| Television Francaise | 55,728 | 681,943 |
| | | 2,834,827 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Ipsen S.A. | 4,262 | 496,195 |
| Real Estate 0.5% |
| Fonciere Des Regions | 5,596 | 499,437 |
| Gecina S.A. | 4,988 | 709,435 |
| ICADE | 9,190 | 682,427 |
| Mercialys S.A. | 13,663 | 266,184 |
| Nexity S.A. * | 12,765 | 694,064 |
| | | 2,851,547 |
| Retailing 0.1% |
| Groupe Fnac S.A. * | 7,108 | 499,361 |
| Software & Services 0.4% |
| Alten S.A. | 5,629 | 477,044 |
| Altran Technologies S.A. * | 17,822 | 299,032 |
| Dassault Systemes S.A. | 8,317 | 742,049 |
| Sopra Steria Group | 2,423 | 363,279 |
| UBISOFT Entertainment * | 13,096 | 620,388 |
| | | 2,501,792 |
| Technology Hardware & Equipment 0.3% |
| Ingenico Group S.A. | 4,794 | 434,082 |
| Neopost S.A. | 28,910 | 1,172,331 |
| | | 1,606,413 |
| Telecommunication Services 0.1% |
| Iliad S.A. | 3,254 | 789,823 |
| SFR Group S.A. * | 5,390 | 176,464 |
| | | 966,287 |
| Transportation 0.3% |
| Aeroports de Paris | 5,332 | 711,207 |
| Europcar Groupe S.A. * | 16,570 | 202,103 |
| Groupe Eurotunnel SE | 60,903 | 669,063 |
| | | 1,582,373 |
| | | 22,726,434 |
| |
| Security | Number
of Shares | Value ($) |
| Germany 3.5% |
| Automobiles & Components 0.2% |
| ElringKlinger AG (a) | 14,622 | 291,896 |
| Grammer AG | 3,556 | 218,189 |
| Hella KGaA Hueck & Co. | 10,557 | 522,587 |
| SAF-Holland S.A. | 16,722 | 288,686 |
| | | 1,321,358 |
| Banks 0.1% |
| Aareal Bank AG | 10,113 | 406,753 |
| Capital Goods 0.7% |
| BayWa AG (a) | 12,916 | 470,138 |
| Deutz AG | 55,584 | 432,650 |
| Duerr AG | 4,159 | 414,446 |
| Heidelberger Druckmaschinen AG * | 79,238 | 221,166 |
| Indus Holding AG | 5,479 | 366,249 |
| KION Group AG | 12,901 | 873,983 |
| Krones AG | 3,564 | 423,157 |
| Norma Group SE | 5,463 | 292,924 |
| Pfeiffer Vacuum Technology AG | 1,793 | 232,787 |
| SGL Carbon SE *(a) | 14,298 | 144,525 |
| Vossloh AG * | 2,534 | 170,034 |
| Wacker Neuson SE | 10,990 | 277,650 |
| | | 4,319,709 |
| Commercial & Professional Services 0.0% |
| Bertrandt AG | 1,426 | 148,930 |
| Consumer Durables & Apparel 0.1% |
| Gerry Weber International AG (a) | 19,533 | 286,258 |
| Health Care Equipment & Services 0.1% |
| Carl Zeiss Meditec AG, Class B | 4,341 | 197,335 |
| Rhoen-Klinikum AG | 17,435 | 498,325 |
| | | 695,660 |
| Insurance 0.1% |
| Talanx AG * | 11,167 | 402,543 |
| Materials 0.4% |
| Covestro AG | 14,523 | 1,131,797 |
| Symrise AG | 12,498 | 874,965 |
| Wacker Chemie AG | 5,621 | 594,958 |
| | | 2,601,720 |
| Media 0.1% |
| Axel Springer SE | 12,974 | 727,934 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.2% |
| Gerresheimer AG | 5,508 | 432,094 |
| STADA Arzneimittel AG | 11,492 | 814,326 |
| | | 1,246,420 |
| Real Estate 0.2% |
| Deutsche Wohnen AG | 15,938 | 544,977 |
| LEG Immobilien AG * | 5,853 | 502,844 |
| TAG Immobilien AG | 15,474 | 220,315 |
| | | 1,268,136 |
| Retailing 0.1% |
| Fielmann AG | 3,405 | 260,308 |
| Semiconductors & Semiconductor Equipment 0.2% |
| Aixtron SE * | 42,765 | 234,464 |
| Siltronic AG * | 12,148 | 873,302 |
| SMA Solar Technology AG (a) | 10,415 | 269,491 |
| | | 1,377,257 |
| Software & Services 0.3% |
| Bechtle AG | 3,898 | 447,241 |
| CANCOM SE | 2,988 | 176,816 |
| Software AG | 11,622 | 511,347 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| United Internet AG | 12,368 | 569,252 |
| Wirecard AG (a) | 4,712 | 278,622 |
| | | 1,983,278 |
| Technology Hardware & Equipment 0.2% |
| Diebold Nixdorf AG | 8,055 | 615,419 |
| Jenoptik AG | 11,675 | 314,146 |
| | | 929,565 |
| Telecommunication Services 0.2% |
| Drillisch AG (a) | 5,313 | 284,757 |
| Telefonica Deutschland Holding AG | 185,911 | 901,433 |
| | | 1,186,190 |
| Transportation 0.3% |
| Fraport AG Frankfurt Airport Services Worldwide | 10,003 | 786,971 |
| Hamburger Hafen und Logistik AG | 10,411 | 197,313 |
| Hapag-Lloyd AG * | 9,870 | 290,288 |
| Sixt SE | 4,245 | 234,890 |
| | | 1,509,462 |
| | | 20,671,481 |
| |
| Greece 0.0% |
| Banks 0.0% |
| TT Hellenic Postbank S.A. *(d) | 24,275 | — |
| |
| Hong Kong 4.3% |
| Automobiles & Components 0.1% |
| Minth Group Ltd. | 69,000 | 256,063 |
| Xinyi Glass Holdings Ltd. * | 362,000 | 320,780 |
| | | 576,843 |
| Banks 0.1% |
| The Bank of East Asia Ltd. | 149,600 | 618,635 |
| Capital Goods 0.1% |
| Hopewell Holdings Ltd. | 45,000 | 171,681 |
| NWS Holdings Ltd. | 268,000 | 503,290 |
| | | 674,971 |
| Consumer Durables & Apparel 0.4% |
| Global Brands Group Holding Ltd. * | 3,502,000 | 413,428 |
| Pacific Textile Holdings Ltd. | 256,000 | 284,008 |
| Stella International Holdings Ltd. | 224,000 | 389,319 |
| Techtronic Industries Co., Ltd. | 170,000 | 729,362 |
| Texwinca Holdings Ltd. | 352,000 | 236,097 |
| | | 2,052,214 |
| Consumer Services 0.4% |
| Cafe De Coral Holdings Ltd. | 70,000 | 227,612 |
| Melco Resorts & Entertainment Ltd. ADR | 22,450 | 492,777 |
| MGM China Holdings Ltd. | 209,200 | 475,886 |
| Shangri-La Asia Ltd. | 322,000 | 460,848 |
| Wynn Macau Ltd. * | 432,800 | 948,719 |
| | | 2,605,842 |
| Diversified Financials 0.2% |
| First Pacific Co., Ltd. | 968,000 | 745,380 |
| Sun Hung Kai & Co., Ltd. | 315,000 | 234,273 |
| | | 979,653 |
| Energy 0.0% |
| Brightoil Petroleum Holdings Ltd. * | 756,000 | 204,952 |
| Food & Staples Retailing 0.2% |
| Dairy Farm International Holdings Ltd. | 60,700 | 539,924 |
| Sun Art Retail Group Ltd. | 705,000 | 726,326 |
| | | 1,266,250 |
| Security | Number
of Shares | Value ($) |
| Food, Beverage & Tobacco 0.3% |
| CP Pokphand Co., Ltd. | 1,820,000 | 156,503 |
| Tingyi (Cayman Islands) Holding Corp. | 656,000 | 842,539 |
| Uni-President China Holdings Ltd. | 242,000 | 170,026 |
| Vitasoy International Holdings Ltd. | 74,000 | 146,070 |
| WH Group Ltd. | 635,500 | 566,963 |
| | | 1,882,101 |
| Materials 0.2% |
| Huabao International Holdings Ltd. * | 683,000 | 373,755 |
| MMG Ltd. * | 804,000 | 274,530 |
| Shougang Fushan Resources Group Ltd. | 1,308,000 | 240,260 |
| | | 888,545 |
| Media 0.1% |
| Television Broadcasts Ltd. (d) | 99,400 | 382,094 |
| Real Estate 0.7% |
| Great Eagle Holdings Ltd. | 39,000 | 193,427 |
| Hang Lung Group Ltd. | 174,000 | 725,566 |
| Hang Lung Properties Ltd. | 369,000 | 966,846 |
| Hysan Development Co., Ltd. | 55,000 | 259,386 |
| Kerry Properties Ltd. | 173,500 | 648,595 |
| Shui On Land Ltd. | 873,500 | 194,118 |
| Sino Land Co., Ltd. | 362,000 | 612,595 |
| Swire Properties Ltd. | 131,400 | 440,525 |
| | | 4,041,058 |
| Retailing 0.3% |
| Chow Tai Fook Jewellery Group Ltd. | 388,200 | 426,615 |
| Giordano International Ltd. | 550,000 | 295,238 |
| Henderson Land Development Co., Ltd. | 87,858 | 556,181 |
| Luk Fook Holdings International Ltd. | 159,000 | 580,952 |
| Sa Sa International Holdings Ltd. | 412,000 | 176,300 |
| | | 2,035,286 |
| Semiconductors & Semiconductor Equipment 0.2% |
| ASM Pacific Technology Ltd. | 46,400 | 690,779 |
| Semiconductor Manufacturing International Corp. * | 457,800 | 578,316 |
| | | 1,269,095 |
| Technology Hardware & Equipment 0.4% |
| AAC Technologies Holdings, Inc. | 43,500 | 637,666 |
| FIH Mobile Ltd. | 1,407,000 | 482,677 |
| Ju Teng International Holdings Ltd. | 620,000 | 229,270 |
| Truly International Holdings Ltd. | 670,000 | 227,160 |
| VTech Holdings Ltd. | 51,300 | 649,663 |
| | | 2,226,436 |
| Telecommunication Services 0.2% |
| Hutchison Telecommunications Hong Kong Holdings Ltd. | 554,000 | 163,723 |
| PCCW Ltd. | 1,125,000 | 635,146 |
| SmarTone Telecommunications Holdings Ltd. | 116,500 | 163,154 |
| | | 962,023 |
| Transportation 0.4% |
| Cathay Pacific Airways Ltd. | 531,000 | 764,226 |
| Kerry Logistics Network Ltd. | 121,500 | 171,053 |
| Orient Overseas International Ltd. | 153,500 | 819,449 |
| Pacific Basin Shipping Ltd. * | 2,100,000 | 417,112 |
| SITC International Holdings Co., Ltd. | 317,000 | 227,074 |
| | | 2,398,914 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Utilities 0.0% |
| HK Electric Investments & HK Electric Investments Ltd. | 215,000 | 190,096 |
| | | 25,255,008 |
| |
| Ireland 0.9% |
| Banks 0.0% |
| Permanent TSB Group Holdings plc * | 65,413 | 174,573 |
| Capital Goods 0.2% |
| AerCap Holdings N.V. * | 18,635 | 857,396 |
| Fly Leasing Ltd. ADR * | 15,559 | 200,244 |
| Kingspan Group plc | 15,798 | 549,562 |
| | | 1,607,202 |
| Consumer Services 0.1% |
| Paddy Power Betfair plc | 3,946 | 439,168 |
| Food & Staples Retailing 0.1% |
| Total Produce plc | 159,843 | 352,238 |
| Food, Beverage & Tobacco 0.2% |
| C&C Group plc | 82,644 | 340,921 |
| Glanbia plc | 22,080 | 431,536 |
| Origin Enterprises plc | 38,350 | 311,221 |
| | | 1,083,678 |
| Health Care Equipment & Services 0.1% |
| UDG Healthcare plc | 46,659 | 451,914 |
| Materials 0.1% |
| James Hardie Industries plc CDI | 32,683 | 553,008 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| ICON plc * | 4,737 | 400,229 |
| Jazz Pharmaceuticals plc * | 1,956 | 311,552 |
| | | 711,781 |
| Transportation 0.0% |
| Irish Continental Group plc | 37,004 | 213,635 |
| | | 5,587,197 |
| |
| Israel 1.0% |
| Banks 0.2% |
| First International Bank of Israel Ltd. | 16,410 | 270,413 |
| Israel Discount Bank Ltd., Class A * | 276,468 | 669,375 |
| Mizrahi Tefahot Bank Ltd. | 23,505 | 379,170 |
| | | 1,318,958 |
| Capital Goods 0.1% |
| Elbit Systems Ltd. | 3,269 | 389,188 |
| Shikun & Binui Ltd. | 90,545 | 237,705 |
| | | 626,893 |
| Energy 0.2% |
| Delek Group Ltd. | 1,896 | 426,849 |
| Oil Refineries Ltd. | 686,697 | 272,590 |
| Paz Oil Co., Ltd. | 2,959 | 483,347 |
| | | 1,182,786 |
| Insurance 0.0% |
| Harel Insurance Investments & Finances Service Ltd. | 43,689 | 232,542 |
| Materials 0.1% |
| The Israel Corp., Ltd. * | 3,241 | 582,085 |
| Real Estate 0.1% |
| Azrieli Group Ltd. | 3,420 | 181,922 |
| Gazit-Globe Ltd. | 19,668 | 199,169 |
| | | 381,091 |
| Retailing 0.0% |
| Delek Automotive Systems Ltd. | 16,454 | 144,265 |
| Security | Number
of Shares | Value ($) |
| Software & Services 0.1% |
| Nice Ltd. | 7,021 | 474,263 |
| Telecommunication Services 0.2% |
| B Communications Ltd. | 14,342 | 276,481 |
| Cellcom Israel Ltd. * | 47,149 | 464,262 |
| Partner Communications Co., Ltd. * | 66,552 | 325,480 |
| | | 1,066,223 |
| | | 6,009,106 |
| |
| Italy 3.0% |
| Automobiles & Components 0.3% |
| Brembo S.p.A. | 3,149 | 247,406 |
| Ferrari N.V. | 15,056 | 1,132,606 |
| Piaggio & C. S.p.A. | 95,420 | 197,743 |
| | | 1,577,755 |
| Banks 0.4% |
| Banca Carige S.p.A. *(a) | 1,206,645 | 334,909 |
| Banca Popolare Di Sondrio Scarl | 211,257 | 787,084 |
| Credito Valtellinese S.p.A. | 66,525 | 240,464 |
| Mediobanca S.p.A. | 105,139 | 1,011,075 |
| | | 2,373,532 |
| Capital Goods 0.3% |
| Astaldi S.p.A. | 38,955 | 255,515 |
| C.I.R. S.p.A. - Compagnie Industriali Riunite | 194,328 | 312,442 |
| Danieli & C Officine Meccaniche S.p.A. | 4,473 | 111,822 |
| Interpump Group S.p.A. | 9,451 | 250,636 |
| Italmobiliare S.p.A. | 10,359 | 580,001 |
| Salini Impregilo S.p.A. | 57,903 | 197,043 |
| Trevi Finanziaria Industriale S.p.A. * | 163,122 | 162,052 |
| | | 1,869,511 |
| Consumer Durables & Apparel 0.3% |
| De'Longhi S.p.A. | 10,459 | 318,858 |
| Prada S.p.A. | 129,300 | 605,143 |
| Safilo Group S.p.A. * | 25,952 | 187,427 |
| Tod's S.p.A. | 5,399 | 417,266 |
| | | 1,528,694 |
| Consumer Services 0.1% |
| Autogrill S.p.A. | 32,602 | 370,780 |
| Diversified Financials 0.2% |
| Anima Holding S.p.A | 28,217 | 184,460 |
| Azimut Holding S.p.A. | 16,806 | 327,830 |
| Banca Generali S.p.A. | 10,002 | 287,416 |
| Cerved Information Solutions S.p.A | 20,365 | 217,421 |
| | | 1,017,127 |
| Energy 0.1% |
| Saras S.p.A. | 196,984 | 411,536 |
| Food & Staples Retailing 0.0% |
| MARR S.p.A. | 9,086 | 219,425 |
| Food, Beverage & Tobacco 0.1% |
| Davide Campari-Milano S.p.A. | 31,120 | 367,978 |
| Parmalat S.p.A. | 93,026 | 315,146 |
| | | 683,124 |
| Health Care Equipment & Services 0.0% |
| DiaSorin S.p.A. | 2,526 | 189,308 |
| Insurance 0.3% |
| Societa Cattolica di Assicurazioni S.c.r.l. | 53,940 | 479,435 |
| Unipol Gruppo Finanziario S.p.A. | 196,108 | 874,599 |
| UnipolSai Assicurazioni S.p.A. | 222,354 | 510,769 |
| | | 1,864,803 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Materials 0.1% |
| Buzzi Unicem S.p.A. | 17,811 | 457,678 |
| Media 0.1% |
| RCS MediaGroup S.p.A. * | 228,280 | 314,313 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Recordati S.p.A. | 9,098 | 337,054 |
| Real Estate 0.0% |
| Beni Stabili S.p.A * | 300,014 | 190,527 |
| Technology Hardware & Equipment 0.0% |
| Esprinet S.p.A. | 27,193 | 222,456 |
| Transportation 0.1% |
| Alitalia S.p.A. *(d) | 14,782 | — |
| Ansaldo STS S.p.A. | 15,638 | 209,865 |
| ASTM S.p.A. | 25,741 | 396,761 |
| Societa Iniziative Autostradali e Servizi S.p.A. | 31,552 | 317,919 |
| | | 924,545 |
| Utilities 0.5% |
| A2A S.p.A | 614,135 | 912,810 |
| ACEA S.p.A. | 18,136 | 260,971 |
| ERG S.p.A. | 36,908 | 458,171 |
| Hera S.p.A. | 288,040 | 823,808 |
| Iren S.p.A. | 262,006 | 552,255 |
| | | 3,008,015 |
| | | 17,560,183 |
| |
| Japan 36.6% |
| Automobiles & Components 2.4% |
| Aisan Industry Co., Ltd. | 29,100 | 261,584 |
| Akebono Brake Industry Co., Ltd. * | 84,500 | 270,276 |
| Eagle Industry Co., Ltd. | 11,700 | 165,608 |
| Exedy Corp. | 17,100 | 466,875 |
| F.C.C. Co., Ltd. | 17,700 | 337,964 |
| Futaba Industrial Co., Ltd. | 60,000 | 501,475 |
| G-Tekt Corp. | 13,800 | 243,461 |
| Kasai Kogyo Co., Ltd. | 16,100 | 199,924 |
| Keihin Corp. | 29,000 | 456,313 |
| KYB Corp. | 132,000 | 652,006 |
| Mitsuba Corp. | 14,700 | 278,473 |
| Musashi Seimitsu Industry Co., Ltd. | 11,300 | 277,559 |
| Nifco, Inc. | 7,200 | 359,544 |
| Nippon Seiki Co., Ltd. | 19,000 | 395,964 |
| Nissan Shatai Co., Ltd. | 62,400 | 587,543 |
| Nissin Kogyo Co., Ltd. | 24,700 | 424,736 |
| NOK Corp. | 39,300 | 936,730 |
| Pacific Industrial Co., Ltd. | 17,000 | 239,037 |
| Piolax, Inc. | 8,400 | 193,167 |
| Press Kogyo Co., Ltd. | 67,800 | 329,030 |
| Sanden Holdings Corp. * | 79,000 | 245,443 |
| Showa Corp. * | 57,700 | 492,364 |
| Sumitomo Riko Co., Ltd. | 28,600 | 291,500 |
| Tachi-S Co., Ltd. | 21,300 | 408,795 |
| Takata Corp. *(a) | 76,500 | 275,079 |
| Tokai Rika Co., Ltd. | 30,100 | 560,357 |
| Topre Corp. | 8,100 | 215,932 |
| Toyo Tire & Rubber Co., Ltd. | 43,400 | 763,390 |
| Toyoda Gosei Co., Ltd. | 37,900 | 1,007,237 |
| Toyota Boshoku Corp. | 31,800 | 672,878 |
| TPR Co., Ltd. | 6,300 | 212,546 |
| TS Tech Co., Ltd. | 23,500 | 617,337 |
| Unipres Corp. | 29,300 | 620,703 |
| Yorozu Corp. | 16,700 | 255,602 |
| | | 14,216,432 |
| Security | Number
of Shares | Value ($) |
| Banks 1.9% |
| Fukuoka Financial Group, Inc. | 176,000 | 802,891 |
| Hokuhoku Financial Group, Inc. | 32,800 | 515,205 |
| Mebuki Financial Group, Inc. | 146,600 | 575,234 |
| Nishi-Nippon Financial Holdings, Inc. | 45,700 | 435,770 |
| North Pacific Bank Ltd. | 232,600 | 886,998 |
| Senshu Ikeda Holdings, Inc. | 37,600 | 158,553 |
| Seven Bank Ltd. | 92,300 | 310,005 |
| Shinsei Bank Ltd. | 231,000 | 431,289 |
| Suruga Bank Ltd. | 13,900 | 290,601 |
| The 77 Bank Ltd. | 45,000 | 194,625 |
| The Awa Bank Ltd. | 27,000 | 178,344 |
| The Bank of Kyoto Ltd. | 36,000 | 285,107 |
| The Chiba Bank Ltd. | 129,000 | 864,177 |
| The Chugoku Bank Ltd. | 24,700 | 366,943 |
| The Daishi Bank Ltd. | 44,000 | 176,653 |
| The Gunma Bank Ltd. | 67,600 | 362,618 |
| The Hachijuni Bank Ltd. | 67,100 | 396,249 |
| The Hiroshima Bank Ltd. | 83,000 | 358,303 |
| The Hokkoku Bank Ltd. | 52,000 | 195,067 |
| The Hyakugo Bank Ltd. | 37,000 | 149,453 |
| The Iyo Bank Ltd. | 45,300 | 321,773 |
| The Juroku Bank Ltd. | 67,000 | 212,878 |
| The Keiyo Bank Ltd. | 43,000 | 187,304 |
| The Kiyo Bank Ltd. | 21,900 | 342,103 |
| The Musashino Bank Ltd. | 6,400 | 186,226 |
| The Nanto Bank Ltd. | 4,400 | 166,505 |
| The Ogaki Kyoritsu Bank Ltd. | 56,000 | 163,508 |
| The San-in Godo Bank Ltd. | 26,100 | 212,508 |
| The Shiga Bank Ltd. | 32,000 | 167,225 |
| The Shizuoka Bank Ltd. | 80,000 | 675,251 |
| Yamaguchi Financial Group, Inc. | 38,000 | 421,020 |
| | | 10,990,386 |
| Capital Goods 6.8% |
| Aica Kogyo Co., Ltd. | 12,300 | 350,575 |
| Amada Holdings Co., Ltd. | 67,500 | 802,529 |
| Asahi Diamond Industrial Co., Ltd. | 24,800 | 190,368 |
| Bunka Shutter Co., Ltd. | 19,900 | 152,907 |
| Central Glass Co., Ltd. | 104,000 | 449,337 |
| Chiyoda Corp. | 62,000 | 412,210 |
| Chudenko Corp. | 9,800 | 215,036 |
| CKD Corp. | 16,000 | 200,364 |
| COMSYS Holdings Corp. | 40,800 | 776,136 |
| Daifuku Co., Ltd. | 15,900 | 401,915 |
| Daihen Corp. | 31,000 | 196,828 |
| DMG Mori Co., Ltd. | 29,100 | 480,509 |
| Fuji Machine Manufacturing Co., Ltd. | 23,538 | 298,921 |
| Fujikura Ltd. | 136,800 | 1,028,460 |
| Fujitec Co., Ltd. | 18,700 | 221,616 |
| Furukawa Co., Ltd. | 98,000 | 189,138 |
| Futaba Corp. | 10,900 | 195,788 |
| Glory Ltd. | 15,400 | 517,108 |
| GS Yuasa Corp. | 142,000 | 657,912 |
| Hazama Ando Corp. | 38,600 | 274,896 |
| Hitachi Koki Co., Ltd. (a) | 23,700 | 184,416 |
| Hitachi Zosen Corp. | 86,300 | 501,194 |
| Hoshizaki Corp. | 6,300 | 525,626 |
| Inaba Denki Sangyo Co., Ltd. | 13,000 | 472,754 |
| Inabata & Co., Ltd. | 51,500 | 636,394 |
| Iseki & Co., Ltd. | 85,000 | 174,746 |
| Iwatani Corp. | 116,000 | 683,981 |
| Kanamoto Co., Ltd. | 8,300 | 225,039 |
| Kandenko Co., Ltd. | 47,000 | 467,193 |
| Kanematsu Corp. | 449,000 | 914,895 |
| Keihan Holdings Co., Ltd. | 77,000 | 484,415 |
| Kinden Corp. | 68,900 | 1,042,393 |
| Kitz Corp. | 45,200 | 316,504 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Komori Corp. | 14,400 | 190,313 |
| Kumagai Gumi Co., Ltd. | 83,000 | 223,298 |
| Kurita Water Industries Ltd. | 34,300 | 885,724 |
| Kuroda Electric Co., Ltd. | 19,800 | 413,065 |
| Kyowa Exeo Corp. | 41,700 | 630,040 |
| Kyudenko Corp. | 8,300 | 237,843 |
| Mabuchi Motor Co., Ltd. | 6,700 | 378,218 |
| Maeda Corp. | 35,000 | 321,867 |
| Maeda Road Construction Co., Ltd. | 26,000 | 479,427 |
| Makino Milling Machine Co., Ltd. | 35,000 | 311,809 |
| Meidensha Corp. | 64,000 | 233,999 |
| Minebea Mitsumi, Inc. | 117,344 | 1,697,603 |
| Mirait Holdings Corp. | 42,700 | 443,800 |
| MISUMI Group, Inc. | 36,100 | 683,916 |
| Mitsui Engineering & Shipbuilding Co., Ltd. | 493,000 | 756,809 |
| Miura Co., Ltd. | 13,800 | 231,232 |
| Nabtesco Corp. | 24,900 | 705,924 |
| Nachi-Fujikoshi Corp. | 65,000 | 346,593 |
| Namura Shipbuilding Co., Ltd. | 39,500 | 255,196 |
| Nichias Corp. | 33,000 | 336,858 |
| Nichiha Corp. | 10,300 | 323,108 |
| Nippo Corp. | 22,000 | 423,855 |
| Nippon Densetsu Kogyo Co., Ltd. | 12,500 | 247,078 |
| Nippon Sheet Glass Co., Ltd. * | 100,500 | 781,900 |
| Nippon Steel & Sumikin Bussan Corp. | 14,500 | 596,709 |
| Nishimatsu Construction Co., Ltd. | 79,000 | 401,839 |
| Nishio Rent All Co., Ltd. | 6,400 | 193,555 |
| Nisshinbo Holdings, Inc. | 68,300 | 698,173 |
| Nitta Corp. | 6,900 | 195,036 |
| Nitto Kogyo Corp. | 13,900 | 200,311 |
| Noritz Corp. | 15,000 | 291,721 |
| NTN Corp. | 194,000 | 988,865 |
| Oiles Corp. | 8,480 | 154,104 |
| OKUMA Corp. | 33,000 | 346,132 |
| Okumura Corp. | 45,000 | 278,122 |
| OSG Corp. | 14,100 | 290,481 |
| Penta-Ocean Construction Co., Ltd. | 70,300 | 356,147 |
| Ryobi Ltd. | 62,000 | 272,783 |
| Sanki Engineering Co., Ltd. | 22,100 | 191,203 |
| Sankyo Tateyama, Inc. | 18,700 | 273,630 |
| Sanwa Holdings Corp. | 46,200 | 465,703 |
| Seibu Holdings, Inc. | 45,600 | 796,632 |
| Shinmaywa Industries Ltd. | 44,000 | 370,808 |
| Sintokogio Ltd. | 19,800 | 172,404 |
| Sumitomo Mitsui Construction Co., Ltd. | 186,800 | 202,569 |
| Tadano Ltd. | 26,400 | 341,056 |
| Taihei Dengyo Kaisha Ltd. | 14,000 | 138,996 |
| Taikisha Ltd. | 11,200 | 279,177 |
| Takara Standard Co., Ltd. | 14,500 | 240,612 |
| Takasago Thermal Engineering Co., Ltd. | 15,700 | 242,898 |
| Takuma Co., Ltd. | 18,700 | 194,212 |
| The Japan Steel Works Ltd. | 27,400 | 439,886 |
| The Nippon Road Co., Ltd. | 46,000 | 206,359 |
| THK Co., Ltd. | 30,700 | 791,847 |
| Toa Corp. * | 9,600 | 176,582 |
| Toda Corp. | 66,000 | 407,428 |
| TOKAI Holdings Corp. (a) | 31,600 | 243,306 |
| Toshiba Machine Co., Ltd. | 53,000 | 220,215 |
| Toshiba Plant Systems & Services Corp. | 10,400 | 169,204 |
| Totetsu Kogyo Co., Ltd. | 6,000 | 173,448 |
| Toyo Engineering Corp. * | 57,000 | 142,337 |
| Trusco Nakayama Corp. | 15,300 | 349,401 |
| Tsubakimoto Chain Co. | 38,000 | 334,048 |
| Ushio, Inc. | 37,800 | 474,963 |
| Security | Number
of Shares | Value ($) |
| Wakita & Co., Ltd. | 23,000 | 265,204 |
| Yamazen Corp. | 33,400 | 316,546 |
| Yuasa Trading Co., Ltd. | 13,000 | 376,279 |
| Yurtec Corp. | 21,000 | 131,093 |
| | | 40,573,602 |
| Commercial & Professional Services 0.7% |
| Aeon Delight Co., Ltd. | 8,400 | 256,321 |
| Daiseki Co., Ltd. | 7,300 | 162,797 |
| Duskin Co., Ltd. | 22,200 | 497,991 |
| Kokuyo Co., Ltd. | 36,100 | 468,806 |
| Meitec Corp. | 5,500 | 237,728 |
| Nomura Co., Ltd. | 10,300 | 197,016 |
| Okamura Corp. | 22,300 | 197,453 |
| Park24 Co., Ltd. | 14,600 | 376,707 |
| Relia, Inc. | 20,300 | 200,671 |
| Sato Holdings Corp. | 9,600 | 219,364 |
| Sohgo Security Services Co., Ltd. | 11,500 | 502,071 |
| Temp Holdings Co., Ltd. | 24,400 | 459,162 |
| Toppan Forms Co., Ltd. | 29,900 | 301,714 |
| | | 4,077,801 |
| Consumer Durables & Apparel 1.9% |
| Alpine Electronics, Inc. | 30,400 | 442,361 |
| Asics Corp. | 26,800 | 474,322 |
| Casio Computer Co., Ltd. | 48,400 | 682,125 |
| Foster Electric Co., Ltd. | 16,400 | 273,829 |
| Fujitsu General Ltd. | 12,000 | 254,528 |
| Funai Electric Co., Ltd. (a) | 36,000 | 268,835 |
| Gunze Ltd. | 90,000 | 363,976 |
| Haseko Corp. | 63,500 | 724,835 |
| Heiwa Corp. | 16,000 | 412,361 |
| JVC Kenwood Corp. | 159,400 | 424,896 |
| Kurabo Industries Ltd. | 130,000 | 290,240 |
| Misawa Homes Co., Ltd. | 26,000 | 240,367 |
| Mizuno Corp. | 61,000 | 315,392 |
| Onward Holdings Co., Ltd. | 73,000 | 542,475 |
| PanaHome Corp. (a) | 38,000 | 422,181 |
| Pioneer Corp. * | 273,200 | 493,123 |
| Rinnai Corp. | 6,900 | 573,790 |
| Sangetsu Corp. | 22,300 | 393,495 |
| Sankyo Co., Ltd. | 14,900 | 519,643 |
| Sanyo Shokai Ltd. | 130,000 | 191,553 |
| Seiko Holdings Corp. | 70,000 | 291,591 |
| Seiren Co., Ltd. | 14,200 | 210,897 |
| Tamron Co., Ltd. | 12,400 | 231,935 |
| The Japan Wool Textile Co., Ltd. | 22,500 | 176,474 |
| Token Corp. | 3,450 | 273,101 |
| Tomy Co., Ltd. | 26,900 | 267,828 |
| TSI Holdings Co., Ltd. | 47,100 | 314,562 |
| Wacoal Holdings Corp. | 44,000 | 557,783 |
| Yamaha Corp. | 26,500 | 735,012 |
| | | 11,363,510 |
| Consumer Services 0.9% |
| Doutor Nichires Holdings Co., Ltd. | 12,700 | 269,311 |
| Dynam Japan Holdings Co., Ltd. | 214,000 | 412,519 |
| H.I.S. Co., Ltd. | 14,300 | 340,791 |
| Kyoritsu Maintenance Co., Ltd. | 4,600 | 134,409 |
| McDonald's Holdings Co., Ltd. (a) | 19,333 | 595,856 |
| MOS Food Services, Inc. | 5,300 | 166,135 |
| Ohsho Food Service Corp. | 4,400 | 164,064 |
| Plenus Co., Ltd. | 12,400 | 259,616 |
| Resorttrust, Inc. | 12,500 | 215,157 |
| Round One Corp. | 41,900 | 357,848 |
| Royal Holdings Co., Ltd. | 10,000 | 196,034 |
| Saint Marc Holdings Co., Ltd. | 5,600 | 170,591 |
| Saizeriya Co., Ltd. | 12,600 | 353,847 |
| Skylark Co., Ltd. | 31,800 | 480,943 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Tokyo Dome Corp. | 23,100 | 213,582 |
| Yoshinoya Holdings Co., Ltd. | 26,500 | 432,828 |
| Zensho Holdings Co., Ltd. | 22,200 | 380,000 |
| | | 5,143,531 |
| Diversified Financials 0.6% |
| Acom Co., Ltd. * | 31,100 | 138,139 |
| AEON Financial Service Co., Ltd. | 22,600 | 434,323 |
| Credit Saison Co., Ltd. | 38,800 | 706,997 |
| Fuyo General Lease Co., Ltd. | 4,100 | 191,405 |
| Hitachi Capital Corp. | 9,100 | 222,819 |
| Jaccs Co., Ltd. | 34,000 | 145,912 |
| Japan Exchange Group, Inc. | 26,500 | 371,577 |
| Mitsubishi UFJ Lease & Finance Co., Ltd. | 69,800 | 364,765 |
| Okasan Securities Group, Inc. | 34,000 | 198,256 |
| SBI Holdings, Inc. | 34,800 | 482,751 |
| Tokai Tokyo Financial Holdings, Inc. | 39,600 | 200,467 |
| Tokyo Century Corp. | 8,600 | 296,426 |
| | | 3,753,837 |
| Energy 0.3% |
| Fuji Oil Co., Ltd. | 89,000 | 286,622 |
| Itochu Enex Co., Ltd. | 60,000 | 500,192 |
| Japan Petroleum Exploration Co., Ltd. | 21,900 | 478,823 |
| Nippon Gas Co., Ltd. | 6,400 | 183,919 |
| Shinko Plantech Co., Ltd. | 24,400 | 182,451 |
| | | 1,632,007 |
| Food & Staples Retailing 1.8% |
| Ain Holdings, Inc. | 4,100 | 284,031 |
| Arcs Co., Ltd. | 33,400 | 715,415 |
| Axial Retailing, Inc. | 5,900 | 225,912 |
| Belc Co., Ltd. | 4,400 | 195,692 |
| Cawachi Ltd. | 13,100 | 344,459 |
| Cocokara fine, Inc. | 13,300 | 628,819 |
| Cosmos Pharmaceutical Corp. | 1,400 | 283,271 |
| Create SD Holdings Co., Ltd. | 7,800 | 183,213 |
| FamilyMart UNY Holdings Co., Ltd. | 27,500 | 1,554,490 |
| Heiwado Co., Ltd. | 23,400 | 501,719 |
| Kato Sangyo Co., Ltd. | 24,800 | 608,251 |
| Life Corp. | 6,500 | 172,947 |
| Matsumotokiyoshi Holdings Co., Ltd. | 15,700 | 787,400 |
| Ministop Co., Ltd. | 10,800 | 206,432 |
| Mitsubishi Shokuhin Co., Ltd. | 15,400 | 492,523 |
| San-A Co., Ltd. | 5,900 | 268,055 |
| Sugi Holdings Co., Ltd. | 10,800 | 535,199 |
| Sundrug Co., Ltd. | 16,500 | 578,671 |
| Tsuruha Holdings, Inc. | 7,400 | 749,082 |
| Valor Holdings Co., Ltd. | 23,300 | 556,980 |
| Welcia Holdings Co., Ltd. | 9,000 | 289,597 |
| Yaoko Co., Ltd. | 5,800 | 224,912 |
| Yokohama Reito Co., Ltd. | 25,900 | 261,725 |
| | | 10,648,795 |
| Food, Beverage & Tobacco 2.0% |
| Calbee, Inc. | 11,200 | 391,568 |
| DyDo Group Holdings, Inc. | 4,900 | 235,603 |
| Ezaki Glico Co., Ltd. | 10,400 | 548,056 |
| Fuji Oil Holdings, Inc. | 24,000 | 563,129 |
| Hokuto Corp. | 8,700 | 163,246 |
| House Foods Group, Inc. | 20,800 | 463,023 |
| Ito En Ltd. | 16,100 | 583,801 |
| Kagome Co., Ltd. | 16,200 | 441,396 |
| Kikkoman Corp. | 27,000 | 830,944 |
| Marudai Food Co., Ltd. | 40,000 | 183,126 |
| Maruha Nichiro Corp. | 11,900 | 340,364 |
| Megmilk Snow Brand Co., Ltd. | 18,700 | 558,078 |
| Morinaga & Co., Ltd. | 5,600 | 264,631 |
| Security | Number
of Shares | Value ($) |
| Morinaga Milk Industry Co., Ltd. | 101,000 | 798,416 |
| Nichirei Corp. | 37,700 | 938,450 |
| Nippon Flour Mills Co., Ltd. | 28,200 | 423,058 |
| Nippon Suisan Kaisha Ltd. | 100,600 | 485,652 |
| Nissin Foods Holdings Co., Ltd. | 14,500 | 830,300 |
| Prima Meat Packers Ltd. | 76,000 | 350,214 |
| Sapporo Holdings Ltd. | 24,200 | 677,134 |
| Takara Holdings, Inc. | 39,500 | 423,399 |
| The Nisshin Oillio Group Ltd. | 92,000 | 544,441 |
| Warabeya Nichiyo Holdings Co., Ltd. | 12,600 | 310,912 |
| Yakult Honsha Co., Ltd. | 13,800 | 786,547 |
| | | 12,135,488 |
| Health Care Equipment & Services 0.8% |
| BML, Inc. | 6,700 | 146,240 |
| Hogy Medical Co., Ltd. | 2,400 | 154,142 |
| Miraca Holdings, Inc. | 16,800 | 774,583 |
| NichiiGakkan Co., Ltd. | 26,700 | 202,449 |
| Nihon Kohden Corp. | 16,700 | 378,202 |
| Nikkiso Co., Ltd. | 19,000 | 194,028 |
| Nipro Corp. | 40,400 | 613,007 |
| Paramount Bed Holdings Co., Ltd. | 5,700 | 239,265 |
| Ship Healthcare Holdings, Inc. | 13,600 | 366,000 |
| Sysmex Corp. | 10,700 | 651,711 |
| Toho Holdings Co., Ltd. | 34,200 | 743,545 |
| Vital KSK Holdings, Inc. | 39,000 | 343,825 |
| | | 4,806,997 |
| Household & Personal Products 0.5% |
| Earth Chemical Co., Ltd. | 4,300 | 233,015 |
| Fancl Corp. | 14,000 | 235,501 |
| Kobayashi Pharmaceutical Co., Ltd. | 9,000 | 472,127 |
| Kose Corp. | 3,500 | 332,518 |
| Lion Corp. | 32,000 | 578,240 |
| Mandom Corp. | 4,800 | 227,842 |
| Pigeon Corp. | 9,500 | 294,556 |
| Pola Orbis Holdings, Inc. | 12,400 | 286,351 |
| | | 2,660,150 |
| Insurance 0.2% |
| Japan Post Insurance Co., Ltd, | 16,500 | 376,199 |
| Sony Financial Holdings, Inc. | 34,499 | 573,812 |
| | | 950,011 |
| Materials 4.0% |
| ADEKA Corp. | 35,500 | 524,008 |
| Aichi Steel Corp. | 7,300 | 285,412 |
| Asahi Holdings, Inc. | 16,700 | 311,493 |
| Chuetsu Pulp & Paper Co., Ltd. | 70,000 | 148,766 |
| Chugoku Marine Paints Ltd. | 26,000 | 192,290 |
| Daido Steel Co., Ltd. | 143,000 | 796,246 |
| Daio Paper Corp. (a) | 34,300 | 434,846 |
| FP Corp. | 5,100 | 242,849 |
| Fuji Seal International, Inc. | 12,400 | 294,954 |
| Fujimori Kogyo Co., Ltd. | 7,900 | 247,462 |
| Godo Steel Ltd. | 12,100 | 177,982 |
| Hitachi Chemical Co., Ltd. | 36,800 | 1,053,920 |
| Hitachi Metals Ltd. | 67,790 | 949,352 |
| Hokuetsu Kishu Paper Co., Ltd. | 60,800 | 423,974 |
| Ishihara Sangyo Kaisha Ltd. * | 22,300 | 218,355 |
| Kansai Paint Co., Ltd. | 29,600 | 655,233 |
| Kureha Corp. | 7,700 | 341,291 |
| Kyoei Steel Ltd. | 9,900 | 160,071 |
| Lintec Corp. | 22,800 | 502,710 |
| Maruichi Steel Tube Ltd. | 11,500 | 326,108 |
| Mitsubishi Gas Chemical Co., Inc. | 56,500 | 1,208,148 |
| Nihon Parkerizing Co., Ltd. | 22,200 | 284,970 |
| Nippon Kayaku Co., Ltd. | 45,000 | 614,832 |
| Nippon Light Metal Holdings Co., Ltd. | 236,500 | 528,407 |
| Nippon Paint Holdings Co., Ltd. | 10,000 | 383,583 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Nippon Shokubai Co., Ltd. | 10,500 | 705,334 |
| Nippon Soda Co., Ltd. | 56,000 | 303,444 |
| Nissan Chemical Industries Ltd. | 18,400 | 570,682 |
| Nisshin Steel Co., Ltd. | 48,700 | 594,775 |
| Nittetsu Mining Co., Ltd. | 4,700 | 250,503 |
| NOF Corp. | 45,000 | 507,077 |
| Pacific Metals Co., Ltd. * | 61,000 | 198,137 |
| Rengo Co., Ltd. | 110,800 | 669,999 |
| Sakai Chemical Industry Co., Ltd. | 55,000 | 188,466 |
| Sakata INX Corp. | 15,200 | 214,695 |
| Sanyo Chemical Industries Ltd. | 5,200 | 233,180 |
| Sanyo Special Steel Co., Ltd. | 59,000 | 324,602 |
| Sumitomo Bakelite Co., Ltd. | 81,000 | 520,521 |
| Sumitomo Osaka Cement Co., Ltd. | 153,000 | 664,032 |
| Taiyo Nippon Sanso Corp. | 34,700 | 414,810 |
| Toagosei Co., Ltd. | 48,000 | 563,913 |
| Toho Zinc Co., Ltd. | 64,000 | 282,953 |
| Tokai Carbon Co., Ltd. | 95,000 | 415,929 |
| Tokuyama Corp. * | 168,000 | 827,068 |
| Tokyo Ohka Kogyo Co., Ltd. | 9,500 | 307,964 |
| Tokyo Steel Manufacturing Co., Ltd. | 32,200 | 239,926 |
| Topy Industries Ltd. | 11,300 | 307,829 |
| Toyo Ink SC Holdings Co., Ltd. | 97,000 | 476,959 |
| Toyo Kohan Co., Ltd. | 52,700 | 188,613 |
| Toyobo Co., Ltd. | 387,000 | 684,560 |
| UACJ Corp. | 109,300 | 290,009 |
| Yamato Kogyo Co., Ltd. | 14,400 | 360,177 |
| Yodogawa Steel Works Ltd. | 10,300 | 266,799 |
| Zeon Corp. | 70,000 | 797,012 |
| | | 23,677,230 |
| Media 0.6% |
| Asatsu-DK, Inc. | 24,900 | 646,175 |
| Avex Group Holdings, Inc. | 20,200 | 297,086 |
| CyberAgent, Inc. | 15,300 | 475,368 |
| Daiichikosho Co., Ltd. | 10,100 | 438,360 |
| SKY Perfect JSAT Holdings, Inc. | 71,100 | 326,054 |
| Toei Co., Ltd. | 19,000 | 164,583 |
| Toho Co., Ltd. | 17,700 | 508,041 |
| Tokyo Broadcasting System Holdings, Inc. | 13,900 | 246,735 |
| TV Asahi Holdings Corp. | 9,500 | 175,786 |
| | | 3,278,188 |
| Pharmaceuticals, Biotechnology & Life Sciences 1.0% |
| Hisamitsu Pharmaceutical Co., Inc. | 9,300 | 476,105 |
| Kaken Pharmaceutical Co., Ltd. | 5,600 | 332,603 |
| Kissei Pharmaceutical Co., Ltd. | 7,700 | 200,931 |
| KYORIN Holdings, Inc. | 14,300 | 299,574 |
| Mochida Pharmaceutical Co., Ltd. | 4,300 | 324,479 |
| Nichi-iko Pharmaceutical Co., Ltd. | 11,700 | 181,629 |
| Nippon Shinyaku Co., Ltd. | 3,900 | 207,397 |
| Ono Pharmaceutical Co., Ltd. | 29,600 | 610,552 |
| Rohto Pharmaceutical Co., Ltd. | 23,500 | 438,746 |
| Santen Pharmaceutical Co., Ltd. | 48,100 | 676,800 |
| Sawai Pharmaceutical Co., Ltd. | 5,800 | 316,941 |
| Sumitomo Dainippon Pharma Co., Ltd. | 29,300 | 481,199 |
| Taisho Pharmaceutical Holdings Co., Ltd. | 8,500 | 699,387 |
| Tsumura & Co. | 16,300 | 528,239 |
| | | 5,774,582 |
| Real Estate 1.3% |
| Activia Properties, Inc. | 33 | 157,192 |
| Advance Residence Investment Corp. | 110 | 289,574 |
| Aeon Mall Co., Ltd. | 28,530 | 485,199 |
| Daikyo, Inc. | 129,000 | 268,649 |
| Frontier Real Estate Investment Corp. | 40 | 174,568 |
| Hulic Co., Ltd. | 17,000 | 160,323 |
| Security | Number
of Shares | Value ($) |
| Japan Excellent, Inc. | 141 | 165,027 |
| Japan Prime Realty Investment Corp. | 79 | 296,599 |
| Japan Real Estate Investment Corp. | 110 | 579,244 |
| Kenedix Office Investment Corp. | 48 | 271,963 |
| Leopalace21 Corp. | 108,700 | 577,779 |
| Mori Trust Sogo REIT, Inc. | 90 | 140,570 |
| Nippon Accommodations Fund, Inc. | 43 | 184,768 |
| Nippon Building Fund, Inc. | 142 | 755,380 |
| Nippon Prologis REIT, Inc. | 90 | 190,184 |
| Nomura Real Estate Holdings, Inc. | 50,200 | 849,094 |
| NTT Urban Development Corp. | 22,600 | 203,966 |
| Orix JREIT, Inc. | 180 | 285,445 |
| Relo Group, Inc. | 13,000 | 213,301 |
| Tokyo Tatemono Co., Ltd. | 33,700 | 460,411 |
| Tokyu Fudosan Holdings Corp. | 141,100 | 770,591 |
| Tokyu REIT, Inc. | 126 | 156,306 |
| United Urban Investment Corp. | 236 | 356,726 |
| | | 7,992,859 |
| Retailing 2.5% |
| ABC-Mart, Inc. | 4,800 | 266,830 |
| Adastria Co., Ltd. | 9,380 | 232,963 |
| Alpen Co., Ltd. | 12,100 | 216,977 |
| AOKI Holdings, Inc. | 23,600 | 291,515 |
| Aoyama Trading Co., Ltd. | 17,600 | 628,818 |
| Arcland Sakamoto Co., Ltd. | 17,300 | 214,005 |
| ASKUL Corp. | 5,100 | 148,535 |
| Autobacs Seven Co., Ltd. | 45,400 | 687,171 |
| Bic Camera, Inc. | 38,900 | 387,162 |
| Canon Marketing Japan, Inc. | 26,100 | 550,048 |
| Chiyoda Co., Ltd. | 15,700 | 391,703 |
| DCM Holdings Co., Ltd. | 76,100 | 662,546 |
| Doshisha Co., Ltd. | 11,700 | 236,561 |
| EDION Corp. (a) | 89,600 | 873,439 |
| Fuji Co., Ltd. | 10,000 | 247,669 |
| Geo Holdings Corp. | 41,200 | 455,105 |
| H2O Retailing Corp. | 46,100 | 782,473 |
| Hikari Tsushin, Inc. | 4,500 | 432,192 |
| IDOM, Inc. | 34,700 | 182,034 |
| Izumi Co., Ltd. | 10,200 | 510,149 |
| Joyful Honda Co., Ltd. | 10,500 | 347,387 |
| Kohnan Shoji Co., Ltd. | 21,000 | 405,243 |
| Komeri Co., Ltd. | 17,200 | 422,266 |
| Marui Group Co., Ltd. | 54,000 | 739,549 |
| Nojima Corp. | 13,200 | 196,924 |
| PALTAC Corp. | 18,400 | 543,122 |
| Rakuten, Inc. | 62,960 | 644,965 |
| Ryohin Keikaku Co., Ltd. | 3,100 | 699,047 |
| Sanrio Co., Ltd. | 16,700 | 305,126 |
| Seria Co., Ltd. | 4,568 | 204,640 |
| Shimachu Co., Ltd. | 22,900 | 529,538 |
| T-Gaia Corp. | 10,900 | 188,079 |
| United Arrows Ltd. | 9,800 | 303,639 |
| USS Co., Ltd. | 29,000 | 513,035 |
| Xebio Holdings Co., Ltd. | 24,900 | 414,122 |
| Yellow Hat Ltd. | 8,300 | 190,798 |
| | | 15,045,375 |
| Semiconductors & Semiconductor Equipment 0.6% |
| Advantest Corp. | 16,000 | 298,983 |
| Disco Corp. | 3,600 | 569,441 |
| Renesas Electronics Corp. *(a) | 26,700 | 254,327 |
| Sanken Electric Co., Ltd. | 67,000 | 308,128 |
| SCREEN Holdings Co., Ltd. | 6,300 | 457,609 |
| Shindengen Electric Manufacturing Co., Ltd. | 38,000 | 176,374 |
| Shinko Electric Industries Co., Ltd. | 46,100 | 329,778 |
| Sumco Corp. | 46,200 | 808,763 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Tokyo Seimitsu Co., Ltd. | 8,900 | 276,048 |
| Ulvac, Inc. | 6,200 | 291,077 |
| | | 3,770,528 |
| Software & Services 1.8% |
| Capcom Co., Ltd. | 13,200 | 284,721 |
| Dena Co., Ltd. | 30,586 | 655,680 |
| DTS Corp. | 7,500 | 196,902 |
| Fuji Soft, Inc. | 9,800 | 258,738 |
| Gree, Inc. | 55,300 | 443,433 |
| GungHo Online Entertainment, Inc. | 87,900 | 197,210 |
| Internet Initiative Japan, Inc. | 10,300 | 188,413 |
| Itochu Techno-Solutions Corp. | 15,200 | 442,547 |
| Konami Holdings Corp. | 21,400 | 890,824 |
| NEC Networks & System Integration Corp. | 17,900 | 374,192 |
| NET One Systems Co., Ltd. | 58,300 | 531,948 |
| Nexon Co., Ltd. | 23,361 | 397,589 |
| Nihon Unisys Ltd. | 23,100 | 323,864 |
| Nomura Research Institute Ltd. | 23,060 | 802,971 |
| NS Solutions Corp. | 9,700 | 212,537 |
| Obic Co., Ltd. | 5,900 | 318,751 |
| Oracle Corp., Japan | 3,700 | 213,173 |
| Otsuka Corp. | 15,000 | 803,477 |
| SCSK Corp. | 6,876 | 276,812 |
| Square Enix Holdings Co., Ltd. | 12,000 | 345,507 |
| TIS, Inc. | 32,800 | 826,750 |
| TKC Corp. | 5,800 | 157,727 |
| Transcosmos, Inc. | 11,500 | 276,073 |
| Trend Micro, Inc. | 17,200 | 756,778 |
| Yahoo Japan Corp. | 152,300 | 652,334 |
| | | 10,828,951 |
| Technology Hardware & Equipment 2.4% |
| Amano Corp. | 15,900 | 339,582 |
| Anritsu Corp. | 60,300 | 487,704 |
| Azbil Corp. | 19,400 | 653,196 |
| Canon Electronics, Inc. | 12,300 | 228,957 |
| Citizen Watch Co., Ltd. | 123,600 | 820,021 |
| Daiwabo Holdings Co., Ltd. | 164,000 | 576,773 |
| Eizo Corp. | 6,650 | 219,894 |
| Hamamatsu Photonics K.K. | 18,700 | 549,893 |
| Hirose Electric Co., Ltd. | 4,995 | 671,330 |
| Hitachi High-Technologies Corp. | 21,400 | 854,269 |
| Hitachi Kokusai Electric, Inc. | 10,900 | 244,462 |
| Hitachi Maxell Ltd. | 26,400 | 521,699 |
| Horiba Ltd. | 8,300 | 489,339 |
| Hosiden Corp. | 48,200 | 530,990 |
| Japan Aviation Electronics Industry Ltd. | 26,000 | 355,637 |
| Nichicon Corp. | 22,800 | 216,863 |
| Nippon Signal Co., Ltd. | 23,300 | 223,339 |
| Nissha Printing Co., Ltd. (a) | 7,100 | 176,641 |
| Oki Electric Industry Co., Ltd. | 34,200 | 511,050 |
| Riso Kagaku Corp. | 10,800 | 190,084 |
| Ryosan Co., Ltd. | 16,500 | 539,860 |
| Ryoyo Electro Corp. | 15,700 | 229,958 |
| Shimadzu Corp. | 41,000 | 696,010 |
| Siix Corp. | 5,000 | 199,408 |
| Taiyo Yuden Co., Ltd. | 46,600 | 568,815 |
| Topcon Corp. | 17,700 | 312,727 |
| Toshiba TEC Corp. * | 86,000 | 450,434 |
| UKC Holdings Corp. | 23,700 | 432,028 |
| Wacom Co., Ltd. | 60,100 | 222,760 |
| Yaskawa Electric Corp. | 46,200 | 883,066 |
| Yokogawa Electric Corp. | 56,100 | 867,041 |
| | | 14,263,830 |
| Security | Number
of Shares | Value ($) |
| Transportation 1.4% |
| Fukuyama Transporting Co., Ltd. | 66,000 | 401,260 |
| Hitachi Transport System Ltd. | 21,500 | 456,944 |
| Japan Airport Terminal Co., Ltd. | 8,100 | 281,361 |
| Kamigumi Co., Ltd. | 89,000 | 808,759 |
| Keikyu Corp. | 55,000 | 631,338 |
| Keio Corp. | 100,000 | 800,845 |
| Keisei Electric Railway Co., Ltd. | 19,200 | 456,944 |
| Kintetsu World Express, Inc. | 27,200 | 421,660 |
| Konoike Transport Co., Ltd. | 18,000 | 244,681 |
| Mitsubishi Logistics Corp. | 30,000 | 388,127 |
| Mitsui-Soko Holdings Co., Ltd. | 66,000 | 194,269 |
| Nankai Electric Railway Co., Ltd. | 109,000 | 536,045 |
| Nikkon Holdings Co., Ltd. | 19,000 | 397,271 |
| Nishi-Nippon Railroad Co., Ltd. | 108,000 | 456,848 |
| Sankyu, Inc. | 110,000 | 698,598 |
| Senko Co., Ltd. | 46,600 | 303,458 |
| Sotetsu Holdings, Inc. | 70,000 | 325,467 |
| The Sumitomo Warehouse Co., Ltd. | 45,000 | 273,071 |
| Trancom Co., Ltd. | 2,800 | 140,446 |
| Yusen Logistics Co., Ltd. | 17,200 | 163,731 |
| | | 8,381,123 |
| Utilities 0.2% |
| Hokkaido Electric Power Co., Inc. | 91,600 | 664,958 |
| Shizuoka Gas Co., Ltd. | 42,700 | 290,169 |
| The Okinawa Electric Power Co., Inc. | 17,850 | 435,493 |
| | | 1,390,620 |
| | | 217,355,833 |
| |
| Luxembourg 0.5% |
| Banks 0.0% |
| Espirito Santo Financial Group S.A. *(d) | 69,773 | — |
| Commercial & Professional Services 0.1% |
| IWG plc | 90,835 | 382,062 |
| Consumer Durables & Apparel 0.1% |
| Samsonite International S.A. | 188,800 | 728,534 |
| Materials 0.3% |
| APERAM S.A. | 16,721 | 840,651 |
| Ternium S.A. ADR | 31,026 | 785,578 |
| | | 1,626,229 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Eurofins Scientific SE | 431 | 212,279 |
| Retailing 0.0% |
| L'Occitane International S.A. | 99,750 | 209,032 |
| | | 3,158,136 |
| |
| Netherlands 2.3% |
| Banks 0.2% |
| ABN AMRO Group N.V. CVA | 35,380 | 928,839 |
| Capital Goods 0.6% |
| Aalberts Industries N.V. | 22,302 | 884,308 |
| Arcadis N.V. | 35,058 | 608,269 |
| IMCD Group N.V. | 4,860 | 261,788 |
| Koninklijke BAM Groep N.V | 128,770 | 724,902 |
| Sensata Technologies Holding N.V. * | 15,265 | 628,613 |
| TKH Group N.V. | 9,483 | 435,889 |
| | | 3,543,769 |
| Commercial & Professional Services 0.0% |
| Brunel International N.V. | 10,913 | 185,630 |
| Consumer Durables & Apparel 0.0% |
| TomTom N.V. * | 20,080 | 204,158 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Diversified Financials 0.2% |
| Euronext N.V. | 6,184 | 303,361 |
| HAL Trust | 3,367 | 676,502 |
| | | 979,863 |
| Energy 0.3% |
| Core Laboratories N.V. (a) | 4,247 | 470,652 |
| Koninklijke Vopak N.V. | 11,931 | 538,424 |
| Nostrum Oil & Gas plc * | 34,671 | 201,358 |
| SBM Offshore N.V. | 41,126 | 677,518 |
| | | 1,887,952 |
| Food & Staples Retailing 0.2% |
| X5 Retail Group N.V. GDR * | 29,835 | 1,051,684 |
| Food, Beverage & Tobacco 0.0% |
| Refresco Group N.V. | 9,581 | 187,171 |
| Materials 0.2% |
| Corbion N.V. | 24,091 | 747,648 |
| OCI N.V. * | 16,825 | 327,389 |
| | | 1,075,037 |
| Media 0.1% |
| Altice N.V., Class A * | 14,546 | 361,413 |
| Altice N.V., Class B * | 2,918 | 72,577 |
| | | 433,990 |
| Real Estate 0.1% |
| Eurocommercial Properties N.V. CVA | 7,072 | 274,823 |
| NSI N.V. | 44,338 | 187,201 |
| Vastned Retail N.V. | 5,390 | 201,357 |
| Wereldhave N.V. | 5,575 | 256,706 |
| | | 920,087 |
| Retailing 0.0% |
| Beter Bed Holding N.V. | 7,748 | 126,598 |
| Semiconductors & Semiconductor Equipment 0.2% |
| ASM International N.V. | 10,884 | 655,113 |
| BE Semiconductor Industries N.V. | 5,399 | 282,253 |
| | | 937,366 |
| Software & Services 0.1% |
| InterXion Holding N.V. * | 4,084 | 170,140 |
| Yandex N.V., Class A * | 17,258 | 470,453 |
| | | 640,593 |
| Transportation 0.1% |
| PostNL N.V. | 124,154 | 615,172 |
| | | 13,717,909 |
| |
| New Zealand 1.0% |
| Consumer Services 0.1% |
| SKYCITY Entertainment Group Ltd. | 139,319 | 416,581 |
| Energy 0.1% |
| Z Energy Ltd. | 90,323 | 462,231 |
| Food, Beverage & Tobacco 0.0% |
| Fonterra Co-operative Group Ltd. | 53,775 | 220,793 |
| Health Care Equipment & Services 0.0% |
| Fisher & Paykel Healthcare Corp., Ltd. | 37,424 | 258,899 |
| Media 0.1% |
| SKY Network Television Ltd. | 161,035 | 426,535 |
| Real Estate 0.0% |
| Kiwi Property Group Ltd. | 169,978 | 166,307 |
| Telecommunication Services 0.1% |
| Chorus Ltd. | 160,570 | 494,624 |
| Security | Number
of Shares | Value ($) |
| Transportation 0.2% |
| Air New Zealand Ltd. | 273,552 | 478,943 |
| Auckland International Airport Ltd. | 62,721 | 297,210 |
| Mainfreight Ltd. | 18,626 | 282,569 |
| | | 1,058,722 |
| Utilities 0.4% |
| Contact Energy Ltd. | 222,719 | 796,703 |
| Genesis Energy Ltd. | 171,655 | 251,628 |
| Infratil Ltd. | 254,933 | 516,393 |
| Mercury NZ Ltd. | 157,137 | 346,867 |
| Meridian Energy Ltd. | 201,590 | 383,185 |
| | | 2,294,776 |
| | | 5,799,468 |
| |
| Norway 1.4% |
| Automobiles & Components 0.0% |
| Kongsberg Automotive A.S.A. * | 264,828 | 194,010 |
| Banks 0.1% |
| SpareBank 1 SMN | 40,420 | 336,603 |
| Capital Goods 0.1% |
| Veidekke A.S.A. | 20,865 | 277,831 |
| Commercial & Professional Services 0.0% |
| Tomra Systems A.S.A. | 19,145 | 222,422 |
| Diversified Financials 0.1% |
| Aker A.S.A., A Shares | 7,442 | 282,590 |
| Energy 0.5% |
| Aker Solutions A.S.A. * | 101,702 | 579,231 |
| BW LPG Ltd. | 46,402 | 204,151 |
| Fred Olsen Energy A.S.A. *(a) | 186,751 | 438,815 |
| Petroleum Geo-Services A.S.A. * | 271,878 | 636,974 |
| TGS Nopec Geophysical Co. A.S.A. | 36,883 | 804,092 |
| | | 2,663,263 |
| Food, Beverage & Tobacco 0.1% |
| Austevoll Seafood A.S.A. | 29,966 | 241,022 |
| Bakkafrost P/F | 4,010 | 135,860 |
| Leroy Seafood Group A.S.A. | 5,952 | 299,396 |
| Salmar A.S.A. | 7,706 | 182,844 |
| | | 859,122 |
| Insurance 0.2% |
| Gjensidige Forsikring A.S.A. | 47,664 | 732,245 |
| Storebrand A.S.A. | 92,632 | 610,367 |
| | | 1,342,612 |
| Materials 0.0% |
| Borregaard A.S.A. | 22,231 | 249,753 |
| Media 0.1% |
| Schibsted A.S.A., B Shares | 11,449 | 256,420 |
| Schibsted A.S.A., Class A | 11,639 | 289,281 |
| | | 545,701 |
| Retailing 0.0% |
| XXL A.S.A. | 12,437 | 133,908 |
| Semiconductors & Semiconductor Equipment 0.1% |
| REC Silicon A.S.A. *(a) | 3,314,118 | 413,741 |
| Software & Services 0.1% |
| Atea A.S.A. * | 47,658 | 576,383 |
| | | 8,097,939 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Portugal 0.5% |
| Banks 0.1% |
| Banco Comercial Portugues S.A., Class R * | 2,866,605 | 640,434 |
| Banco Espirito Santo S.A. *(d) | 320,558 | — |
| | | 640,434 |
| Capital Goods 0.0% |
| Mota-Engil SGPS, S.A. | 100,597 | 255,761 |
| Food & Staples Retailing 0.1% |
| Sonae SGPS, S.A. * | 433,948 | 445,244 |
| Materials 0.1% |
| Semapa-Sociedade de Investimento e Gestao | 16,648 | 261,139 |
| The Navigator Co., S.A. | 110,672 | 468,275 |
| | | 729,414 |
| Media 0.0% |
| NOS SGPS, S.A. | 44,691 | 255,990 |
| Transportation 0.1% |
| CTT-Correios de Portugal S.A. | 48,515 | 276,910 |
| Utilities 0.1% |
| Redes Energeticas Nacionais SGPS, S.A. | 97,109 | 285,443 |
| | | 2,889,196 |
| |
| Singapore 2.0% |
| Capital Goods 0.4% |
| COSCO Shipping International Singapore Co., Ltd. *(a) | 940,431 | 192,070 |
| Sembcorp Marine Ltd. (a) | 504,196 | 586,939 |
| Singapore Technologies Engineering Ltd. | 321,900 | 873,219 |
| United Engineers Ltd. | 137,800 | 283,757 |
| Yangzijiang Shipbuilding Holdings Ltd. | 937,100 | 769,970 |
| | | 2,705,955 |
| Consumer Services 0.2% |
| Genting Singapore plc | 1,213,300 | 966,684 |
| Diversified Financials 0.1% |
| Singapore Exchange Ltd. | 80,200 | 424,972 |
| Energy 0.0% |
| Sakari Resources Ltd. *(d) | 18,000 | — |
| Food & Staples Retailing 0.1% |
| Olam International Ltd. | 308,204 | 421,454 |
| Real Estate 0.7% |
| Ascendas Real Estate Investment Trust | 244,500 | 448,120 |
| CapitaLand Commercial Trust | 200,002 | 232,442 |
| CapitaLand Mall Trust | 288,600 | 406,954 |
| City Developments Ltd. | 122,500 | 945,302 |
| Global Logistic Properties Ltd. | 245,300 | 505,363 |
| Mapletree Greater China Commercial Trust | 199,800 | 152,955 |
| Mapletree Industrial Trust | 127,400 | 163,209 |
| Mapletree Logistics Trust | 236,600 | 191,388 |
| Suntec Real Estate Investment Trust | 182,300 | 230,856 |
| UOL Group Ltd. | 90,800 | 470,294 |
| Wing Tai Holdings Ltd. | 154,600 | 209,011 |
| Yanlord Land Group Ltd. | 184,400 | 246,148 |
| | | 4,202,042 |
| Semiconductors & Semiconductor Equipment 0.1% |
| Kulicke & Soffa Industries, Inc. * | 19,827 | 442,539 |
| Technology Hardware & Equipment 0.1% |
| Venture Corp., Ltd. | 105,700 | 922,487 |
| Security | Number
of Shares | Value ($) |
| Telecommunication Services 0.1% |
| M1 Ltd. (a) | 127,100 | 197,426 |
| StarHub Ltd. | 145,900 | 290,935 |
| | | 488,361 |
| Transportation 0.2% |
| Hutchison Port Holdings Trust, Class U | 1,715,300 | 694,401 |
| SATS Ltd. | 119,649 | 436,300 |
| Singapore Post Ltd. | 287,300 | 283,499 |
| | | 1,414,200 |
| | | 11,988,694 |
| |
| Spain 1.8% |
| Banks 0.3% |
| Bankia S.A. | 562,538 | 683,015 |
| Bankinter S.A. | 95,077 | 836,959 |
| Caja de Ahorros del Mediterraneo *(d) | 5,382 | — |
| | | 1,519,974 |
| Capital Goods 0.4% |
| Construcciones y Auxiliar de Ferrocarriles S.A. | 5,439 | 218,648 |
| Fomento de Construcciones y Contratas S.A. * | 31,002 | 287,111 |
| Gamesa Corp. Tecnologica S.A. | 20,377 | 439,465 |
| Obrascon Huarte Lain S.A. (a) | 161,977 | 707,030 |
| Sacyr S.A. *(a) | 155,071 | 387,922 |
| Zardoya Otis S.A. | 24,768 | 229,210 |
| | | 2,269,386 |
| Commercial & Professional Services 0.1% |
| Applus Services S.A. | 18,224 | 228,444 |
| Prosegur Cia de Seguridad S.A. | 68,323 | 446,024 |
| | | 674,468 |
| Consumer Services 0.1% |
| Melia Hotels International S.A. | 15,517 | 230,092 |
| NH Hotel Group S.A. * | 41,685 | 215,600 |
| | | 445,692 |
| Diversified Financials 0.1% |
| Bolsas y Mercados Espanoles, SHMSF, S.A. | 12,269 | 439,060 |
| Energy 0.1% |
| Tecnicas Reunidas S.A. | 8,630 | 341,057 |
| Food, Beverage & Tobacco 0.1% |
| Ebro Foods S.A. | 18,791 | 419,706 |
| Pescanova S.A. *(d) | 1,125 | — |
| Viscofan S.A. | 8,431 | 503,936 |
| | | 923,642 |
| Insurance 0.1% |
| Grupo Catalana Occidente S.A. | 8,034 | 311,614 |
| Materials 0.2% |
| Acerinox S.A. | 57,077 | 795,105 |
| Ence Energia y Celulosa S.A. | 55,271 | 196,799 |
| Vidrala S.A. | 3,608 | 211,837 |
| | | 1,203,741 |
| Media 0.1% |
| Mediaset Espana Comunicacion S.A. | 31,107 | 428,547 |
| Promotora de Informaciones S.A., Class A * | 45,439 | 162,102 |
| | | 590,649 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.0% |
| Almirall S.A. | 9,446 | 170,545 |
| Software & Services 0.1% |
| Indra Sistemas S.A. * | 29,281 | 400,724 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Telecommunication Services 0.0% |
| Cellnex Telecom S.A.U. | 10,386 | 183,320 |
| Transportation 0.1% |
| Aena S.A. | 4,687 | 826,376 |
| Utilities 0.0% |
| EDP Renovaveis S.A. | 24,497 | 186,683 |
| | | 10,486,931 |
| |
| Sweden 2.2% |
| Capital Goods 0.5% |
| B&B Tools AB, B Shares | 9,686 | 221,993 |
| Indutrade AB | 12,893 | 304,528 |
| Inwido AB | 12,648 | 181,623 |
| Lindab International AB | 17,232 | 157,489 |
| Nibe Industrier AB, B Shares | 36,113 | 319,857 |
| Nolato AB, Class B | 5,617 | 178,802 |
| Peab AB | 71,567 | 781,572 |
| Saab AB, Class B | 11,435 | 566,624 |
| | | 2,712,488 |
| Commercial & Professional Services 0.2% |
| AF AB, B Shares | 15,267 | 321,721 |
| Intrum Justitia AB | 11,244 | 446,659 |
| Loomis AB, Class B | 15,557 | 564,684 |
| | | 1,333,064 |
| Consumer Durables & Apparel 0.4% |
| Husqvarna AB, B Shares | 101,877 | 1,012,755 |
| JM AB | 20,681 | 727,634 |
| Nobia AB | 29,916 | 309,376 |
| | | 2,049,765 |
| Consumer Services 0.0% |
| Betsson AB * | 31,050 | 265,224 |
| Diversified Financials 0.2% |
| LE Lundbergfortagen AB, B Shares | 8,515 | 616,534 |
| Ratos AB, B Shares (a) | 114,282 | 535,968 |
| | | 1,152,502 |
| Energy 0.0% |
| Lundin Petroleum AB * | 13,792 | 262,996 |
| Food & Staples Retailing 0.1% |
| Axfood AB | 24,910 | 395,290 |
| ICA Gruppen AB | 11,649 | 397,536 |
| | | 792,826 |
| Food, Beverage & Tobacco 0.1% |
| AAK AB | 3,971 | 284,213 |
| Health Care Equipment & Services 0.1% |
| Capio AB | 51,271 | 283,710 |
| Elekta AB, B Shares | 45,184 | 471,733 |
| | | 755,443 |
| Materials 0.2% |
| BillerudKorsnas AB | 30,789 | 493,250 |
| Hexpol AB | 26,891 | 298,749 |
| Holmen AB, B Shares | 8,430 | 355,223 |
| | | 1,147,222 |
| Media 0.1% |
| Modern Times Group MTG AB, B Shares | 13,794 | 449,776 |
| Real Estate 0.2% |
| Castellum AB | 27,167 | 372,048 |
| Fabege AB | 11,807 | 203,316 |
| Kungsleden AB | 24,687 | 138,216 |
| Wihlborgs Fastigheter AB | 7,806 | 152,058 |
| | | 865,638 |
| Security | Number
of Shares | Value ($) |
| Retailing 0.1% |
| Bilia AB, A Shares | 15,294 | 306,399 |
| Clas Ohlson AB, B Shares | 12,831 | 212,950 |
| Mekonomen AB | 7,456 | 147,734 |
| | | 667,083 |
| Telecommunication Services 0.0% |
| Com Hem Holding AB | 18,389 | 228,998 |
| Transportation 0.0% |
| SAS AB *(a) | 76,019 | 125,298 |
| | | 13,092,536 |
| |
| Switzerland 3.2% |
| Automobiles & Components 0.0% |
| Autoneum Holding AG | 561 | 165,792 |
| Banks 0.1% |
| Banque Cantonale Vaudoise | 413 | 299,215 |
| Valiant Holding AG | 2,460 | 282,344 |
| | | 581,559 |
| Capital Goods 0.9% |
| Arbonia AG * | 12,997 | 241,653 |
| Belimo Holding AG | 66 | 246,820 |
| Bucher Industries AG | 1,730 | 557,752 |
| Burckhardt Compression Holding AG | 549 | 168,425 |
| Conzzeta AG | 332 | 328,163 |
| Daetwyler Holding AG | 1,568 | 265,378 |
| dormakaba Holding AG, Series B * | 388 | 332,447 |
| Georg Fischer AG | 935 | 881,674 |
| Implenia AG | 3,626 | 278,368 |
| OC Oerlikon Corp. AG * | 55,110 | 662,105 |
| Schweiter Technologies AG | 188 | 225,954 |
| SFS Group AG * | 2,492 | 248,693 |
| Sulzer AG | 3,904 | 455,532 |
| Zehnder Group AG | 4,476 | 151,599 |
| | | 5,044,563 |
| Commercial & Professional Services 0.1% |
| DKSH Holding AG | 7,590 | 611,352 |
| Consumer Durables & Apparel 0.1% |
| Forbo Holding AG | 209 | 342,837 |
| Diversified Financials 0.3% |
| Cembra Money Bank AG | 3,792 | 323,505 |
| GAM Holding AG * | 59,907 | 767,656 |
| Partners Group Holding AG | 1,100 | 664,957 |
| Vontobel Holding AG | 3,334 | 196,354 |
| | | 1,952,472 |
| Food, Beverage & Tobacco 0.1% |
| Barry Callebaut AG * | 276 | 379,043 |
| Emmi AG * | 458 | 334,408 |
| | | 713,451 |
| Health Care Equipment & Services 0.2% |
| Sonova Holding AG | 5,501 | 813,430 |
| Straumann Holding AG | 508 | 268,151 |
| | | 1,081,581 |
| Household & Personal Products 0.0% |
| Oriflame Holding AG * | 6,203 | 254,218 |
| Insurance 0.1% |
| Helvetia Holding AG | 1,211 | 672,463 |
| Materials 0.2% |
| EMS-Chemie Holding AG | 730 | 457,428 |
| Schmolz & Bickenbach AG * | 464,011 | 425,064 |
| | | 882,492 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Galenica AG | 503 | 546,548 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Real Estate 0.3% |
| Allreal Holding AG * | 2,596 | 446,668 |
| Mobimo Holding AG * | 945 | 254,058 |
| PSP Swiss Property AG | 1,811 | 162,366 |
| Swiss Prime Site AG * | 7,930 | 687,480 |
| | | 1,550,572 |
| Retailing 0.2% |
| Dufry AG * | 4,380 | 717,692 |
| Valora Holding AG | 1,401 | 480,846 |
| | | 1,198,538 |
| Software & Services 0.0% |
| Temenos Group AG * | 3,237 | 280,181 |
| Technology Hardware & Equipment 0.2% |
| Inficon Holding AG * | 413 | 216,885 |
| Kudelski S.A. - BR | 8,241 | 142,949 |
| Logitech International S.A. | 21,135 | 706,357 |
| | | 1,066,191 |
| Telecommunication Services 0.1% |
| Sunrise Communications Group AG * | 7,884 | 585,605 |
| Transportation 0.2% |
| Flughafen Zuerich AG | 2,055 | 452,876 |
| Panalpina Welttransport Holding AG | 3,046 | 402,896 |
| Wizz Air Holdings plc * | 8,510 | 194,686 |
| | | 1,050,458 |
| Utilities 0.0% |
| BKW AG | 3,618 | 195,952 |
| | | 18,776,825 |
| |
| United Kingdom 11.5% |
| Banks 0.1% |
| The Paragon Group of Cos. plc | 52,033 | 314,995 |
| Capital Goods 1.7% |
| Bodycote plc | 58,363 | 630,216 |
| Chemring Group plc | 133,744 | 326,096 |
| Diploma plc | 18,766 | 269,550 |
| Fenner plc | 115,087 | 502,338 |
| Galliford Try plc | 24,507 | 456,748 |
| Grafton Group plc | 74,293 | 718,798 |
| Howden Joinery Group plc | 80,433 | 482,297 |
| Keller Group plc | 32,606 | 391,342 |
| Kier Group plc | 19,279 | 334,166 |
| Melrose Industries plc | 393,371 | 1,204,953 |
| Morgan Advanced Materials plc | 96,338 | 416,519 |
| QinetiQ Group plc | 166,726 | 634,470 |
| Rotork plc | 164,109 | 522,786 |
| Senior plc | 137,873 | 383,045 |
| SIG plc | 538,541 | 834,929 |
| Spirax-Sarco Engineering plc | 11,891 | 800,683 |
| Ultra Electronics Holdings plc | 13,897 | 376,154 |
| Vesuvius plc | 91,595 | 629,728 |
| | | 9,914,818 |
| Commercial & Professional Services 1.2% |
| Berendsen plc | 53,638 | 582,370 |
| De La Rue plc | 28,989 | 256,631 |
| Hays plc | 375,135 | 832,459 |
| HomeServe plc | 41,364 | 358,414 |
| IHS Markit Ltd. * | 24,017 | 1,042,338 |
| Interserve plc | 134,979 | 403,845 |
| Mitie Group plc | 189,455 | 514,321 |
| Pagegroup plc | 102,678 | 665,241 |
| PayPoint plc | 11,360 | 149,636 |
| Rentokil Initial plc | 205,736 | 663,310 |
| RPS Group plc | 109,786 | 361,530 |
| Security | Number
of Shares | Value ($) |
| Serco Group plc * | 381,337 | 570,659 |
| WS Atkins plc | 20,740 | 576,958 |
| | | 6,977,712 |
| Consumer Durables & Apparel 0.3% |
| Bellway plc | 18,474 | 680,868 |
| Bovis Homes Group plc | 26,561 | 316,669 |
| Coats Group plc * | 654,644 | 544,772 |
| Crest Nicholson Holdings plc | 34,524 | 270,046 |
| | | 1,812,355 |
| Consumer Services 0.9% |
| AA plc | 127,729 | 432,378 |
| Domino's Pizza Group plc | 36,857 | 157,707 |
| EI Group plc * | 357,842 | 648,157 |
| Greene King plc | 70,286 | 683,991 |
| Greggs plc | 30,307 | 422,220 |
| J.D. Wetherspoon plc | 25,908 | 333,715 |
| Ladbrokes Coral Group plc | 357,011 | 605,282 |
| Marston's plc | 200,379 | 370,991 |
| Merlin Entertainments plc | 73,776 | 482,886 |
| Mitchells & Butlers plc | 96,035 | 329,743 |
| SSP Group plc | 34,674 | 199,803 |
| The Restaurant Group plc | 73,725 | 333,858 |
| Thomas Cook Group plc | 512,650 | 635,546 |
| | | 5,636,277 |
| Diversified Financials 1.4% |
| Aberdeen Asset Management plc | 233,693 | 844,404 |
| Ashmore Group plc | 73,813 | 332,695 |
| Brewin Dolphin Holdings plc | 54,812 | 231,875 |
| Close Brothers Group plc | 23,133 | 506,830 |
| Hargreaves Lansdown plc | 12,357 | 220,609 |
| Henderson Group plc | 189,893 | 567,988 |
| IG Group Holdings plc | 66,718 | 469,769 |
| Intermediate Capital Group plc | 74,824 | 757,346 |
| International Personal Finance plc | 131,456 | 273,426 |
| Jupiter Fund Management plc | 76,651 | 471,497 |
| London Stock Exchange Group plc | 17,103 | 749,393 |
| NEX Group plc | 70,743 | 563,960 |
| Provident Financial plc | 20,760 | 861,691 |
| Schroders plc | 16,986 | 701,424 |
| SVG Capital plc * | 31,614 | 302,389 |
| TP ICAP plc | 60,511 | 359,030 |
| | | 8,214,326 |
| Energy 0.3% |
| EnQuest plc *(a) | 958,772 | 473,828 |
| Hunting plc | 66,914 | 486,799 |
| Premier Oil plc *(a) | 795,209 | 640,519 |
| Soco International plc | 91,255 | 172,858 |
| | | 1,774,004 |
| Food & Staples Retailing 0.0% |
| Conviviality plc | 73,052 | 287,635 |
| Food, Beverage & Tobacco 0.2% |
| Britvic plc | 42,771 | 367,992 |
| Cranswick plc | 13,135 | 456,274 |
| Dairy Crest Group plc | 55,559 | 413,102 |
| Greencore Group plc | 81,100 | 239,410 |
| | | 1,476,778 |
| Health Care Equipment & Services 0.2% |
| LivaNova plc * | 3,842 | 202,473 |
| Spire Healthcare Group plc | 40,640 | 178,018 |
| STERIS plc | 7,951 | 586,784 |
| | | 967,275 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Household & Personal Products 0.1% |
| McBride plc * | 75,846 | 189,595 |
| PZ Cussons plc | 45,733 | 198,195 |
| | | 387,790 |
| Insurance 0.5% |
| esure Group plc | 50,862 | 161,397 |
| Hiscox Ltd. | 59,111 | 866,852 |
| Lancashire Holdings Ltd. | 83,878 | 740,855 |
| Novae Group plc | 15,395 | 124,323 |
| Saga plc | 161,349 | 437,972 |
| St. James's Place plc | 44,668 | 663,916 |
| | | 2,995,315 |
| Materials 1.3% |
| Acacia Mining plc | 28,988 | 148,581 |
| Centamin plc | 145,745 | 333,924 |
| Croda International plc | 18,905 | 921,490 |
| Elementis plc | 121,866 | 480,130 |
| Essentra plc | 59,364 | 416,350 |
| Evraz plc * | 265,079 | 742,311 |
| Hill & Smith Holdings plc | 12,236 | 210,462 |
| KAZ Minerals plc * | 167,850 | 1,094,738 |
| Marshalls plc | 38,708 | 192,767 |
| Petropavlovsk plc * | 2,412,304 | 241,205 |
| Randgold Resources Ltd. | 8,448 | 743,139 |
| RPC Group plc | 33,098 | 347,691 |
| Synthomer plc | 52,344 | 335,319 |
| Vedanta Resources plc | 97,392 | 871,638 |
| Victrex plc | 16,434 | 407,638 |
| | | 7,487,383 |
| Media 0.3% |
| Cineworld Group plc | 23,417 | 213,511 |
| Daily Mail & General Trust plc | 59,240 | 548,986 |
| Trinity Mirror plc | 190,591 | 271,108 |
| UBM plc | 61,045 | 561,454 |
| | | 1,595,059 |
| Pharmaceuticals, Biotechnology & Life Sciences 0.1% |
| Genus plc | 8,593 | 190,873 |
| Indivior plc | 137,325 | 596,059 |
| | | 786,932 |
| Real Estate 0.6% |
| Countrywide plc | 65,938 | 144,971 |
| Derwent London plc | 6,132 | 233,749 |
| Grainger plc | 60,410 | 195,529 |
| Hammerson plc | 93,799 | 713,658 |
| Intu Properties plc | 148,021 | 528,673 |
| Mapeley Ltd. *(d) | 2,199 | — |
| Savills plc | 31,833 | 383,027 |
| Segro plc | 89,617 | 563,686 |
| Shaftesbury plc | 10,957 | 132,240 |
| The British Land Co., plc | 84,755 | 720,685 |
| | | 3,616,218 |
| Retailing 0.8% |
| B&M European Value Retail S.A. | 57,961 | 252,939 |
| Card Factory plc | 47,741 | 200,404 |
| Dixons Carphone plc | 124,740 | 541,872 |
| Dunelm Group plc | 20,671 | 162,379 |
| Halfords Group plc | 99,928 | 483,797 |
| Headlam Group plc | 29,125 | 241,802 |
| JD Sports Fashion plc | 36,536 | 210,681 |
| John Menzies plc | 35,199 | 315,253 |
| Lookers plc | 173,639 | 291,950 |
| N Brown Group plc | 91,457 | 282,515 |
| Pendragon plc | 1,081,348 | 490,197 |
| Pets at Home Group plc | 76,350 | 185,515 |
| Security | Number
of Shares | Value ($) |
| Sports Direct International plc *(a) | 99,299 | 394,319 |
| Vertu Motors plc | 312,598 | 196,365 |
| WH Smith plc | 26,085 | 597,430 |
| | | 4,847,418 |
| Semiconductors & Semiconductor Equipment 0.0% |
| Dialog Semiconductor plc * | 5,899 | 276,020 |
| Software & Services 0.4% |
| AVEVA Group plc | 10,816 | 285,326 |
| Computacenter plc | 42,746 | 453,713 |
| Fidessa Group plc | 7,886 | 241,764 |
| Gocompare.Com Group plc * | 20,991 | 25,043 |
| Micro Focus International plc | 12,152 | 407,152 |
| Moneysupermarket.com Group plc | 73,466 | 329,111 |
| Playtech plc | 27,875 | 346,194 |
| Rightmove plc | 3,093 | 167,691 |
| | | 2,255,994 |
| Technology Hardware & Equipment 0.5% |
| Electrocomponents plc | 120,718 | 811,373 |
| Halma plc | 40,230 | 548,675 |
| Laird plc | 138,776 | 269,614 |
| Spectris plc | 28,974 | 1,035,748 |
| Spirent Communications plc | 242,435 | 368,167 |
| | | 3,033,577 |
| Telecommunication Services 0.1% |
| KCOM Group plc | 155,356 | 178,077 |
| TalkTalk Telecom Group plc (a) | 190,999 | 477,942 |
| | | 656,019 |
| Transportation 0.5% |
| BBA Aviation plc | 179,340 | 723,461 |
| Go-Ahead Group plc | 12,288 | 278,519 |
| National Express Group plc | 155,674 | 720,420 |
| Northgate plc | 87,787 | 613,989 |
| Stagecoach Group plc | 157,419 | 415,220 |
| | | 2,751,609 |
| Utilities 0.0% |
| Telecom Plus plc | 12,610 | 204,925 |
| | | 68,270,434 |
| Total Common Stock |
| (Cost $481,151,760) | | 580,337,835 |
|
| Preferred Stock 0.4% of net assets |
| |
| Germany 0.3% |
| Automobiles & Components 0.1% |
| Schaeffler AG | 16,151 | 278,565 |
| Capital Goods 0.1% |
| Jungheinrich AG | 10,316 | 359,205 |
| Health Care Equipment & Services 0.1% |
| Draegerwerk AG & Co. KGaA | 6,454 | 706,385 |
| Transportation 0.0% |
| Sixt SE | 5,380 | 240,358 |
| | | 1,584,513 |
| |
| Italy 0.1% |
| Capital Goods 0.1% |
| Danieli & C Officine Meccaniche S.p.A - RSP | 14,338 | 259,109 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental International Small Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Sweden 0.0% |
| Transportation 0.0% |
| SAS AB | 3,078 | 188,003 |
| |
| United Kingdom 0.0% |
| Household & Personal Products 0.0% |
| Mcbride plc *(d) | 1,061,844 | 1,375 |
| Total Preferred Stock |
| (Cost $1,593,130) | | 2,033,000 |
|
| Rights 0.0% of net assets |
| |
| Australia 0.0% |
| Telecommunication Services 0.0% |
TPG Telecom Ltd.
expires 05/12/17 *(d) | 2,229 | 1,085 |
| Total Rights |
| (Cost $��) | | 1,085 |
|
| Other Investment Company 2.0% of net assets |
| |
| United States 2.0% |
| Securities Lending Collateral 2.0% |
| Wells Fargo Government Money Market Fund,Select Class 0.67% (b) | 11,988,020 | 11,988,020 |
| Total Other Investment Company |
| (Cost $11,988,020) | | 11,988,020 |
Security
Rate, Maturity Date | Face Amount
Local Currency | Value ($) |
| Short-Term Investments 1.1% of net assets |
| |
| Time Deposits 1.1% |
| Australia & New Zealand Banking Group Ltd. |
| Australian Dollar | | |
| 0.50%, 05/01/17 (c) | 51,558 | 38,607 |
| Barclays Capital, Inc. |
| U.S. Dollar | | |
| 0.42%, 05/01/17 (c) | 5,309,134 | 5,309,134 |
| Brown Brothers Harriman |
| Danish Krone | | |
| (0.60%), 05/01/17 (c) | 50,969 | 7,464 |
| New Zealand Dollar | | |
| 0.65%, 05/01/17 (c) | 11,198 | 7,688 |
| Norwegian Krone | | |
| 0.05%, 05/02/17 (c) | 387,507 | 45,132 |
| Singapore Dollar | | |
| 0.01%, 05/02/17 (c) | 15,761 | 11,281 |
| Swiss Franc | | |
| (1.45%), 05/02/17 (c) | 124,795 | 125,423 |
| DNB |
| Euro | | |
| (0.58%), 05/02/17 (c) | 123,148 | 134,145 |
| ING Bank |
| Hong Kong Dollar | | |
| 0.01%, 05/02/17 (c) | 3,361,791 | 432,199 |
| Royal Bank of Canada |
| Canadian Dollar | | |
| 0.05%, 05/01/17 (c) | 97,942 | 71,750 |
Security
Rate, Maturity Date | Face Amount
Local Currency | Value ($) |
| Skandinaviska Enskilda Banken |
| Japanese Yen | | |
| (0.22%), 05/01/17 (c) | 3,223,438 | 28,916 |
| Swedish Krone | | |
| (0.95%), 05/02/17 (c) | 370,675 | 41,850 |
| Sumitomo Mitsui Banking Corp. |
| Great British Pound | | |
| 0.05%, 05/02/17 (c) | 55,125 | 71,397 |
| Total Short-Term Investments |
| (Cost $6,324,986) | | 6,324,986 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $506,478,973 and the unrealized appreciation and depreciation were $114,364,118 and ($20,158,165), respectively, with a net unrealized appreciation of $94,205,953.
At 04/30/17, the values of certain foreign securities held by the fund aggregating $477,958,976 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund's Board of Trustees. (See financial 2(a) for additional information)
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $11,449,179. |
| (b) | The rate shown is the 7-day yield. |
| (c) | The rate shown is the current daily overnight rate. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| CDI — | CHESS Depositary Interest |
| CVA — | Dutch Certificate |
| GDR — | Global Depositary Receipt |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI EAFE Index, e-mini, Long expires 06/16/17 | 120 | 10,942,800 | 208,081 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited)
This section shows all the securities in the fund's portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is available on the SEC's website at www.sec.gov and may be viewed and copied at the SEC's Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after calendar quarters on the fund's website at www.csimfunds.com/schwabfunds_prospectus.
| Holdings by Category | Cost ($) | Value ($) |
| 87.7% | Common Stock | 320,476,327 | 372,614,400 |
| 11.1% | Preferred Stock | 31,831,302 | 47,313,637 |
| 0.0% | Rights | — | — |
| 0.2% | Other Investment Company | 569,656 | 569,656 |
| 0.7% | Short-Term Investments | 3,029,566 | 3,029,566 |
| 99.7% | Total Investments | 355,906,851 | 423,527,259 |
| 0.3% | Other Assets and Liabilities, Net | | 1,438,169 |
| 100.0% | Net Assets | | 424,965,428 |
| Security | Number
of Shares | Value ($) |
| Common Stock 87.7% of net assets |
| |
| Brazil 6.5% |
| Banks 1.2% |
| Banco Bradesco S.A. | 107,039 | 1,097,689 |
| Banco do Brasil S.A. | 369,415 | 3,823,280 |
| | | 4,920,969 |
| Capital Goods 0.1% |
| Embraer S.A. | 120,551 | 583,376 |
| Diversified Financials 0.1% |
| BM&F Bovespa S.A. - Bolsa de Valores Mercadorias e Futuros | 110,233 | 660,207 |
| Energy 1.7% |
| Petroleo Brasileiro S.A. * | 1,298,858 | 5,876,278 |
| Ultrapar Participacoes S.A. | 56,514 | 1,253,829 |
| | | 7,130,107 |
| Food, Beverage & Tobacco 0.8% |
| Ambev S.A. | 356,550 | 2,051,197 |
| BRF S.A. | 68,518 | 858,944 |
| JBS S.A. | 192,400 | 622,532 |
| | | 3,532,673 |
| Insurance 0.1% |
| Sul America S.A. | 86,955 | 459,972 |
| Materials 1.7% |
| Companhia Siderurgica Nacional S.A. * | 211,816 | 517,186 |
| Vale S.A. | 772,076 | 6,681,977 |
| | | 7,199,163 |
| Software & Services 0.1% |
| Cielo S.A. | 53,934 | 409,511 |
| Telecommunication Services 0.2% |
| Tim Participacoes S.A. | 217,147 | 701,920 |
| Transportation 0.1% |
| CCR S.A. | 90,300 | 503,555 |
| Security | Number
of Shares | Value ($) |
| Utilities 0.4% |
| Centrais Eletricas Brasileiras S.A. * | 83,116 | 472,921 |
| Companhia de Saneamento Basico do Estado de Sao Paulo | 62,910 | 580,135 |
| CPFL Energia S.A. | 57,161 | 468,230 |
| | | 1,521,286 |
| | | 27,622,739 |
| |
| Chile 0.6% |
| Energy 0.2% |
| Empresas Copec S.A. | 72,163 | 807,162 |
| Food & Staples Retailing 0.1% |
| Cencosud S.A. | 212,555 | 605,462 |
| Transportation 0.2% |
| Latam Airlines Group S.A. * | 51,957 | 655,483 |
| Utilities 0.1% |
| Enel Americas S.A. | 2,768,062 | 547,595 |
| | | 2,615,702 |
| |
| China 15.8% |
| Automobiles & Components 0.1% |
| Dongfeng Motor Group Co., Ltd., Class H | 430,000 | 451,640 |
| Banks 5.9% |
| Agricultural Bank of China Ltd., Class H | 3,124,600 | 1,440,409 |
| Bank of China Ltd., Class H | 10,198,234 | 4,933,014 |
| Bank of Communications Co., Ltd., Class H | 886,000 | 681,262 |
| China CITIC Bank Corp., Ltd., Class H | 813,000 | 514,646 |
| China Construction Bank Corp., Class H | 12,819,960 | 10,405,491 |
| China Merchants Bank Co., Ltd., Class H | 281,850 | 730,277 |
| China Minsheng Banking Corp., Ltd., Class H | 502,500 | 494,390 |
| Industrial & Commercial Bank of China Ltd., Class H | 9,209,172 | 6,003,143 |
| | | 25,202,632 |
| Capital Goods 0.4% |
| China Communications Construction Co., Ltd., Class H | 485,322 | 666,378 |
| China Railway Construction Corp., Ltd., Class H | 274,500 | 383,339 |
| China Railway Group Ltd., Class H | 444,000 | 375,519 |
| CITIC Ltd. | 313,000 | 453,852 |
| | | 1,879,088 |
| Consumer Durables & Apparel 0.2% |
| Belle International Holdings Ltd. (d) | 1,273,000 | 990,116 |
| Energy 3.9% |
| China Petroleum & Chemical Corp., Class H | 9,081,400 | 7,374,582 |
| China Shenhua Energy Co., Ltd., Class H | 671,500 | 1,563,119 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| CNOOC Ltd. | 3,393,075 | 3,958,351 |
| Kunlun Energy Co., Ltd. | 472,000 | 425,946 |
| PetroChina Co., Ltd., Class H | 4,794,000 | 3,368,175 |
| | | 16,690,173 |
| Food, Beverage & Tobacco 0.1% |
| China Resources Beer Holdings Co., Ltd. * | 215,000 | 517,047 |
| Health Care Equipment & Services 0.1% |
| Sinopharm Group Co., Ltd., Class H | 85,200 | 381,887 |
| Insurance 0.7% |
| China Life Insurance Co., Ltd., Class H | 268,000 | 815,327 |
| China Pacific Insurance Group Co., Ltd., Class H | 121,600 | 448,629 |
| PICC Property & Casualty Co., Ltd., Class H | 306,000 | 491,898 |
| Ping An Insurance Group Co. of China Ltd., Class H | 206,000 | 1,158,184 |
| | | 2,914,038 |
| Materials 0.5% |
| Anhui Conch Cement Co., Ltd., Class H | 140,000 | 489,588 |
| China National Building Material Co., Ltd., Class H | 1,500,000 | 997,120 |
| Jiangxi Copper Co., Ltd., Class H | 353,000 | 549,892 |
| | | 2,036,600 |
| Real Estate 0.4% |
| China Evergrande Group (b) | 527,000 | 562,095 |
| China Overseas Land & Investment Ltd. | 226,000 | 655,533 |
| China Resources Land Ltd. | 168,000 | 465,532 |
| | | 1,683,160 |
| Software & Services 0.6% |
| Alibaba Group Holding Ltd. ADR * | 4,882 | 563,871 |
| Baidu, Inc. ADR * | 3,728 | 671,897 |
| Tencent Holdings Ltd. | 39,400 | 1,234,533 |
| | | 2,470,301 |
| Technology Hardware & Equipment 0.2% |
| Lenovo Group Ltd. | 1,158,000 | 740,360 |
| Telecommunication Services 2.4% |
| China Mobile Ltd. | 662,055 | 7,048,648 |
| China Telecom Corp., Ltd., Class H | 2,803,000 | 1,367,257 |
| China Unicom (Hong Kong) Ltd. | 1,237,056 | 1,600,780 |
| | | 10,016,685 |
| Utilities 0.3% |
| China Resources Power Holdings Co., Ltd. | 308,000 | 554,527 |
| Huaneng Power International, Inc., Class H | 736,000 | 507,323 |
| | | 1,061,850 |
| | | 67,035,577 |
| |
| Colombia 0.5% |
| Banks 0.1% |
| Bancolombia S.A. | 28,626 | 263,102 |
| Energy 0.3% |
| Ecopetrol S.A. | 2,711,254 | 1,253,333 |
| Materials 0.1% |
| Grupo Argos S.A. | 57,298 | 397,308 |
| | | 1,913,743 |
| |
| Security | Number
of Shares | Value ($) |
| Czech Republic 0.2% |
| Utilities 0.2% |
| CEZ A/S | 50,966 | 889,246 |
| |
| Greece 1.0% |
| Banks 0.6% |
| Alpha Bank AE * | 373,648 | 795,987 |
| National Bank of Greece S.A. * | 3,675,670 | 1,144,477 |
| Piraeus Bank S.A. * | 3,139,711 | 667,009 |
| | | 2,607,473 |
| Consumer Services 0.1% |
| OPAP S.A. | 50,822 | 503,628 |
| Telecommunication Services 0.1% |
| Hellenic Telecommunications Organization S.A. | 47,735 | 463,602 |
| Utilities 0.2% |
| Public Power Corp. S.A. * | 138,731 | 510,522 |
| | | 4,085,225 |
| |
| Hungary 0.4% |
| Banks 0.2% |
| OTP Bank plc | 27,992 | 787,033 |
| Energy 0.2% |
| MOL Hungarian Oil & Gas plc | 13,631 | 1,025,424 |
| | | 1,812,457 |
| |
| India 4.3% |
| Automobiles & Components 0.4% |
| Mahindra & Mahindra Ltd. | 25,440 | 528,079 |
| Tata Motors Ltd. | 133,773 | 954,374 |
| Tata Motors Ltd., Class A | 55,591 | 241,684 |
| | | 1,724,137 |
| Banks 0.6% |
| Housing Development Finance Corp., Ltd. | 44,611 | 1,065,086 |
| ICICI Bank Ltd. | 195,151 | 841,504 |
| State Bank of India | 186,524 | 839,127 |
| | | 2,745,717 |
| Energy 2.0% |
| Bharat Petroleum Corp., Ltd. | 51,466 | 575,458 |
| Coal India Ltd. | 141,640 | 609,086 |
| Indian Oil Corp., Ltd. | 197,118 | 1,349,089 |
| Oil & Natural Gas Corp., Ltd. | 493,018 | 1,428,552 |
| Reliance Industries Ltd. * | 202,661 | 4,392,001 |
| | | 8,354,186 |
| Food, Beverage & Tobacco 0.1% |
| ITC Ltd. | 118,391 | 511,191 |
| Materials 0.3% |
| Hindalco Industries Ltd. | 209,421 | 648,032 |
| Tata Steel Ltd. | 68,611 | 478,674 |
| | | 1,126,706 |
| Software & Services 0.6% |
| Infosys Ltd. | 116,496 | 1,664,591 |
| Tata Consultancy Services Ltd. | 21,682 | 765,579 |
| | | 2,430,170 |
| Telecommunication Services 0.2% |
| Bharti Airtel Ltd. | 154,158 | 850,770 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Utilities 0.1% |
| NTPC Ltd. | 239,946 | 613,440 |
| | | 18,356,317 |
| |
| Indonesia 1.4% |
| Automobiles & Components 0.4% |
| PT Astra International Tbk | 2,093,500 | 1,403,046 |
| Banks 0.4% |
| PT Bank Central Asia Tbk | 416,700 | 554,187 |
| PT Bank Mandiri (Persero) Tbk | 647,300 | 566,459 |
| PT Bank Rakyat Indonesia (Persero) Tbk | 699,000 | 675,164 |
| | | 1,795,810 |
| Energy 0.1% |
| PT United Tractors Tbk | 270,600 | 545,590 |
| Food, Beverage & Tobacco 0.1% |
| Golden Agri-Resources Ltd. | 1,711,863 | 440,392 |
| Telecommunication Services 0.3% |
| PT Telekomunikasi Indonesia (Persero) Tbk | 3,802,300 | 1,254,327 |
| Utilities 0.1% |
| PT Perusahaan Gas Negara (Persero) Tbk | 2,440,300 | 443,776 |
| | | 5,882,941 |
| |
| Malaysia 1.9% |
| Banks 0.6% |
| CIMB Group Holdings Berhad | 465,000 | 614,489 |
| Malayan Banking Berhad | 603,600 | 1,331,387 |
| Public Bank Berhad | 183,065 | 841,308 |
| | | 2,787,184 |
| Capital Goods 0.2% |
| Sime Darby Berhad | 338,400 | 727,865 |
| Consumer Services 0.2% |
| Genting Berhad | 336,000 | 761,009 |
| Materials 0.1% |
| Petronas Chemicals Group Berhad | 279,700 | 470,355 |
| Telecommunication Services 0.5% |
| Axiata Group Berhad | 823,800 | 976,540 |
| DiGi.com Berhad | 330,800 | 391,687 |
| Maxis Berhad | 317,554 | 466,365 |
| Telekom Malaysia Berhad | 258,400 | 384,534 |
| | | 2,219,126 |
| Utilities 0.3% |
| Tenaga Nasional Berhad | 380,000 | 1,220,044 |
| | | 8,185,583 |
| |
| Mexico 2.8% |
| Banks 0.3% |
| Grupo Financiero Banorte S.A.B. de C.V., Class O | 111,600 | 645,878 |
| Grupo Financiero Santander Mexico S.A.B. de C.V., Class B | 254,700 | 462,716 |
| | | 1,108,594 |
| Capital Goods 0.1% |
| Alfa S.A.B. de C.V., Class A | 442,500 | 608,092 |
| Food & Staples Retailing 0.3% |
| Wal-Mart de Mexico S.A.B. de C.V. | 579,437 | 1,308,140 |
| Security | Number
of Shares | Value ($) |
| Food, Beverage & Tobacco 0.5% |
| Coca-Cola Femsa S.A.B. de C.V., Series L | 53,800 | 391,013 |
| Fomento Economico Mexicano S.A.B. de C.V. | 133,315 | 1,199,713 |
| Grupo Bimbo S.A.B. de C.V., Series A | 180,500 | 441,823 |
| | | 2,032,549 |
| Materials 0.8% |
| Cemex S.A.B. de C.V., Series CPO * | 1,686,400 | 1,551,557 |
| Grupo Mexico S.A.B. de C.V., Series B | 439,736 | 1,293,379 |
| Industrias Penoles S.A.B. de C.V. | 18,310 | 445,610 |
| | | 3,290,546 |
| Media 0.2% |
| Grupo Televisa S.A.B., Series CPO | 191,517 | 929,138 |
| Telecommunication Services 0.6% |
| America Movil S.A.B. de C.V., Series L | 3,140,019 | 2,413,571 |
| | | 11,690,630 |
| |
| Peru 0.1% |
| Banks 0.1% |
| Credicorp Ltd. | 2,733 | 419,953 |
| |
| Philippines 0.2% |
| Telecommunication Services 0.2% |
| PLDT, Inc. | 19,210 | 681,826 |
| |
| Poland 2.5% |
| Banks 0.4% |
| Bank Pekao S.A. | 15,581 | 564,659 |
| Powszechna Kasa Oszczednosci Bank Polski S.A. * | 113,189 | 1,030,536 |
| | | 1,595,195 |
| Energy 0.8% |
| Polski Koncern Naftowy Orlen S.A. | 98,347 | 2,939,157 |
| Polskie Gornictwo Naftowe i Gazownictwo S.A. | 313,076 | 533,825 |
| | | 3,472,982 |
| Insurance 0.3% |
| Powszechny Zaklad Ubezpieczen S.A. | 104,895 | 1,157,373 |
| Materials 0.5% |
| KGHM Polska Miedz S.A. | 70,615 | 2,236,942 |
| Telecommunication Services 0.1% |
| Orange Polska S.A. | 434,488 | 518,178 |
| Utilities 0.4% |
| PGE S.A. | 325,844 | 967,840 |
| Tauron Polska Energia S.A. * | 792,243 | 671,912 |
| | | 1,639,752 |
| | | 10,620,422 |
| |
| Republic of Korea 17.1% |
| Automobiles & Components 2.0% |
| Hankook Tire Co., Ltd. | 9,557 | 494,579 |
| Hyundai Mobis Co., Ltd. | 9,566 | 1,865,567 |
| Hyundai Motor Co. | 29,616 | 3,745,740 |
| Kia Motors Corp. | 75,310 | 2,305,312 |
| | | 8,411,198 |
| Banks 1.2% |
| Hana Financial Group, Inc. | 32,017 | 1,099,624 |
| Industrial Bank Of Korea | 40,879 | 448,302 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| KB Financial Group, Inc. | 37,227 | 1,636,403 |
| Shinhan Financial Group Co., Ltd. | 51,323 | 2,142,807 |
| | | 5,327,136 |
| Capital Goods 1.5% |
| CJ Corp. | 2,427 | 398,678 |
| Daelim Industrial Co., Ltd. | 5,542 | 390,932 |
| Hyundai Engineering & Construction Co., Ltd. | 15,906 | 677,535 |
| Hyundai Heavy Industries Co., Ltd. *(d) | 13,914 | 2,053,393 |
| LG Corp. | 14,384 | 854,430 |
| LG International Corp. | 12,963 | 370,001 |
| Samsung Heavy Industries Co., Ltd. * | 77,605 | 735,573 |
| SK Networks Co., Ltd. | 101,165 | 711,503 |
| | | 6,192,045 |
| Consumer Durables & Apparel 0.6% |
| LG Electronics, Inc. | 41,371 | 2,511,369 |
| Energy 1.0% |
| GS Holdings Corp. | 8,817 | 458,926 |
| S-Oil Corp. | 9,825 | 859,557 |
| SK Innovation Co., Ltd. | 19,399 | 2,910,334 |
| | | 4,228,817 |
| Food & Staples Retailing 0.2% |
| E-Mart, Inc. | 4,429 | 894,626 |
| Food, Beverage & Tobacco 0.2% |
| KT&G Corp. | 9,382 | 836,675 |
| Insurance 0.3% |
| Samsung Fire & Marine Insurance Co., Ltd. | 2,770 | 652,146 |
| Samsung Life Insurance Co., Ltd. | 6,418 | 617,023 |
| | | 1,269,169 |
| Materials 2.0% |
| Hyundai Steel Co. | 17,572 | 846,392 |
| LG Chem Ltd. | 7,707 | 1,853,750 |
| Lotte Chemical Corp. | 2,290 | 687,447 |
| POSCO | 22,349 | 5,276,217 |
| | | 8,663,806 |
| Retailing 0.1% |
| Lotte Shopping Co., Ltd. | 2,381 | 549,089 |
| Semiconductors & Semiconductor Equipment 0.7% |
| SK Hynix, Inc. | 62,182 | 2,945,770 |
| Technology Hardware & Equipment 6.5% |
| LG Display Co., Ltd. | 76,812 | 1,979,300 |
| Samsung Electro-Mechanics Co., Ltd. | 13,102 | 840,546 |
| Samsung Electronics Co., Ltd. | 12,324 | 24,160,306 |
| Samsung SDI Co., Ltd. | 5,504 | 664,461 |
| | | 27,644,613 |
| Telecommunication Services 0.1% |
| LG Uplus Corp. | 44,855 | 569,948 |
| Transportation 0.2% |
| Hyundai Glovis Co., Ltd. | 2,943 | 374,788 |
| Korean Air Lines Co., Ltd. * | 14,149 | 380,559 |
| | | 755,347 |
| Utilities 0.5% |
| Korea Electric Power Corp. | 40,154 | 1,600,549 |
| Korea Gas Corp. * | 11,406 | 467,185 |
| | | 2,067,734 |
| | | 72,867,342 |
| |
| Security | Number
of Shares | Value ($) |
| Russia 11.5% |
| Banks 0.6% |
| Sberbank of Russia PJSC * | 826,740 | 2,399,095 |
| VTB Bank PJSC * | 222,450,000 | 260,711 |
| | | 2,659,806 |
| Energy 8.9% |
| Gazprom PJSC * | 5,757,400 | 13,829,995 |
| Gazprom PJSC ADR | 784,000 | 3,722,078 |
| Lukoil PJSC * | 221,305 | 10,954,702 |
| NovaTek PJSC * | 112,160 | 1,370,065 |
| Rosneft PJSC * | 193,350 | 1,077,492 |
| Surgutneftegas OJSC * | 9,419,605 | 4,618,074 |
| Tatneft PJSC * | 342,930 | 2,270,990 |
| | | 37,843,396 |
| Food & Staples Retailing 0.2% |
| Magnit PJSC * | 5,569 | 858,504 |
| Materials 0.4% |
| MMC Norilsk Nickel PJSC * | 10,887 | 1,672,768 |
| Telecommunication Services 0.9% |
| Mobile TeleSystems PJSC * | 348,922 | 1,678,454 |
| Rostelecom PJSC * | 504,400 | 660,084 |
| Sistema PJSC FC * | 3,187,000 | 1,195,221 |
| | | 3,533,759 |
| Transportation 0.4% |
| Aeroflot Russian Airlines PJSC * | 346,000 | 1,068,168 |
| Globaltrans Investment plc GDR | 97,956 | 741,527 |
| | | 1,809,695 |
| Utilities 0.1% |
| RusHydro PJSC * | 33,556,000 | 527,534 |
| | | 48,905,462 |
| |
| South Africa 6.0% |
| Banks 0.8% |
| Barclays Africa Group Ltd. | 60,589 | 665,448 |
| Nedbank Group Ltd. | 30,580 | 515,574 |
| Standard Bank Group Ltd. | 181,376 | 2,014,105 |
| | | 3,195,127 |
| Capital Goods 0.3% |
| Barloworld Ltd. | 81,174 | 731,454 |
| The Bidvest Group Ltd. | 56,904 | 679,209 |
| | | 1,410,663 |
| Consumer Durables & Apparel 0.1% |
| Steinhoff International Holdings N.V. | 123,688 | 629,213 |
| Diversified Financials 0.3% |
| FirstRand Ltd. | 304,797 | 1,137,142 |
| Food & Staples Retailing 0.4% |
| Bid Corp., Ltd. | 39,828 | 843,758 |
| Shoprite Holdings Ltd. | 54,365 | 852,883 |
| | | 1,696,641 |
| Food, Beverage & Tobacco 0.1% |
| Tiger Brands Ltd. | 16,506 | 498,512 |
| Health Care Equipment & Services 0.1% |
| Netcare Ltd. | 176,467 | 350,165 |
| Insurance 0.2% |
| Sanlam Ltd. | 145,812 | 774,332 |
| Materials 1.9% |
| AngloGold Ashanti Ltd. | 75,483 | 864,425 |
| Gold Fields Ltd. | 252,961 | 829,082 |
| Impala Platinum Holdings Ltd. * | 217,396 | 697,582 |
| Kumba Iron Ore Ltd. * | 51,190 | 665,498 |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| Sappi Ltd. | 67,723 | 502,939 |
| Sasol Ltd. | 146,413 | 4,486,805 |
| | | 8,046,331 |
| Media 0.2% |
| Naspers Ltd., N Shares | 4,763 | 905,691 |
| Retailing 0.3% |
| Imperial Holdings Ltd. | 60,643 | 766,985 |
| Woolworths Holdings Ltd. | 81,033 | 439,247 |
| | | 1,206,232 |
| Telecommunication Services 1.3% |
| MTN Group Ltd. | 494,554 | 4,677,155 |
| Telkom SA SOC Ltd. | 84,707 | 473,998 |
| Vodacom Group Ltd. | 39,620 | 448,096 |
| | | 5,599,249 |
| | | 25,449,298 |
| |
| Taiwan 11.9% |
| Automobiles & Components 0.1% |
| Cheng Shin Rubber Industry Co., Ltd. | 191,000 | 394,168 |
| Banks 0.3% |
| CTBC Financial Holding Co., Ltd. | 1,076,201 | 672,050 |
| Mega Financial Holding Co., Ltd. | 779,340 | 625,652 |
| | | 1,297,702 |
| Capital Goods 0.3% |
| Far Eastern New Century Corp. | 856,817 | 720,924 |
| Walsin Lihwa Corp. | 1,023,000 | 458,531 |
| | | 1,179,455 |
| Consumer Durables & Apparel 0.1% |
| Pou Chen Corp. | 367,267 | 514,194 |
| Diversified Financials 0.2% |
| Fubon Financial Holding Co., Ltd. | 435,674 | 682,014 |
| Energy 0.1% |
| Formosa Petrochemical Corp. | 181,330 | 633,825 |
| Food, Beverage & Tobacco 0.2% |
| Uni-President Enterprises Corp. | 426,678 | 787,645 |
| Insurance 0.2% |
| Cathay Financial Holding Co., Ltd. | 438,599 | 702,904 |
| Materials 1.4% |
| China Steel Corp. | 1,702,198 | 1,364,165 |
| Formosa Chemicals & Fibre Corp. | 427,442 | 1,314,378 |
| Formosa Plastics Corp. | 427,732 | 1,285,271 |
| Nan Ya Plastics Corp. | 543,622 | 1,309,439 |
| Taiwan Cement Corp. | 571,299 | 664,488 |
| | | 5,937,741 |
| Retailing 0.1% |
| Hotai Motor Co., Ltd. | 34,000 | 391,840 |
| Semiconductors & Semiconductor Equipment 2.5% |
| Advanced Semiconductor Engineering, Inc. | 729,117 | 913,794 |
| MediaTek, Inc. | 171,138 | 1,230,160 |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 1,181,103 | 7,608,541 |
| United Microelectronics Corp. | 2,802,965 | 1,120,460 |
| | | 10,872,955 |
| Technology Hardware & Equipment 5.9% |
| Acer, Inc. * | 1,428,496 | 674,235 |
| Asustek Computer, Inc. | 168,041 | 1,650,899 |
| AU Optronics Corp. | 3,501,800 | 1,455,373 |
| Catcher Technology Co., Ltd. | 47,000 | 482,660 |
| Compal Electronics, Inc. | 1,990,305 | 1,332,363 |
| Delta Electronics, Inc. | 167,590 | 943,321 |
| Security | Number
of Shares | Value ($) |
| Foxconn Technology Co., Ltd. | 137,317 | 418,396 |
| Hon Hai Precision Industry Co., Ltd. | 2,715,466 | 8,888,158 |
| HTC Corp. * | 397,473 | 953,752 |
| Innolux Corp. | 4,541,357 | 2,119,639 |
| Inventec Corp. | 760,639 | 565,610 |
| Lite-On Technology Corp. | 416,167 | 725,942 |
| Pegatron Corp. | 418,264 | 1,231,821 |
| Quanta Computer, Inc. | 586,500 | 1,215,030 |
| Synnex Technology International Corp. | 489,850 | 530,774 |
| Wistron Corp. | 1,195,653 | 1,128,809 |
| WPG Holdings Ltd. | 487,000 | 617,344 |
| | | 24,934,126 |
| Telecommunication Services 0.5% |
| Chunghwa Telecom Co., Ltd. | 429,906 | 1,454,227 |
| Far EasTone Telecommunications Co., Ltd. | 159,622 | 393,077 |
| Taiwan Mobile Co., Ltd. | 129,334 | 477,524 |
| | | 2,324,828 |
| | | 50,653,397 |
| |
| Thailand 1.6% |
| Banks 0.2% |
| Kasikornbank PCL | 87,900 | 469,662 |
| The Siam Commercial Bank PCL | 131,000 | 590,807 |
| | | 1,060,469 |
| Energy 0.9% |
| PTT Exploration & Production PCL | 289,100 | 812,807 |
| PTT PCL | 219,987 | 2,473,979 |
| Thai Oil PCL | 199,900 | 450,772 |
| | | 3,737,558 |
| Materials 0.3% |
| PTT Global Chemical PCL | 394,900 | 856,244 |
| The Siam Cement PCL | 23,900 | 368,809 |
| | | 1,225,053 |
| Telecommunication Services 0.2% |
| Advanced Info Service PCL | 139,575 | 706,147 |
| | | 6,729,227 |
| |
| Turkey 1.3% |
| Banks 0.6% |
| Akbank T.A.S. | 264,010 | 706,638 |
| Turkiye Garanti Bankasi A/S | 306,510 | 827,409 |
| Turkiye Halk Bankasi A/S | 154,536 | 512,360 |
| Turkiye Is Bankasi, Class C | 304,815 | 601,563 |
| | | 2,647,970 |
| Capital Goods 0.2% |
| KOC Holding A/S | 144,844 | 680,737 |
| Diversified Financials 0.1% |
| Haci Omer Sabanci Holding A/S | 181,325 | 540,043 |
| Energy 0.2% |
| Tupras-Turkiye Petrol Rafinerileri A/S | 30,098 | 758,162 |
| Materials 0.1% |
| Eregli Demir ve Celik Fabrikalari TAS | 252,889 | 463,243 |
| Telecommunication Services 0.1% |
| Turkcell Iletisim Hizmetleri A/S * | 167,913 | 587,483 |
| | | 5,677,638 |
| |
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
| Security | Number
of Shares | Value ($) |
| United Arab Emirates 0.1% |
| Telecommunication Services 0.1% |
| Emirates Telecommunications Group Co. PJSC | 109,385 | 519,675 |
| Total Common Stock |
| (Cost $320,476,327) | | 372,614,400 |
|
| Preferred Stock 11.1% of net assets |
| |
| Brazil 8.3% |
| Banks 2.8% |
| Banco Bradesco S.A. | 397,716 | 4,186,352 |
| Itau Unibanco Holding S.A. | 576,085 | 7,125,627 |
| Itausa - Investimentos Itau S.A. | 258,503 | 805,468 |
| | | 12,117,447 |
| Energy 1.7% |
| Petroleo Brasileiro S.A. * | 1,659,754 | 7,305,103 |
| Food & Staples Retailing 0.3% |
| Compania Brasileira de Distribuicao Grupo Pao de Acucar | 58,515 | 1,322,743 |
| Materials 2.6% |
| Gerdau S.A. | 545,306 | 1,683,653 |
| Metalurgica Gerdau S.A. * | 826,477 | 1,197,774 |
| Vale S.A. | 964,228 | 7,977,388 |
| | | 10,858,815 |
| Telecommunication Services 0.3% |
| Telefonica Brasil S.A. | 74,572 | 1,111,044 |
| Utilities 0.6% |
| Centrais Eletricas Brasileiras S.A., Class B * | 67,520 | 487,140 |
| Companhia Energetica de Minas Gerais | 594,808 | 1,664,087 |
| Companhia Paranaense de Energia-Copel | 50,544 | 464,507 |
| | | 2,615,734 |
| | | 35,330,886 |
| |
| Colombia 0.1% |
| Banks 0.1% |
| Bancolombia S.A. | 49,124 | 479,552 |
| |
| Republic of Korea 1.2% |
| Automobiles & Components 0.2% |
| Hyundai Motor Co., Ltd. | 4,324 | 350,593 |
| Hyundai Motor Co., Ltd. 2nd | 8,398 | 732,638 |
| | | 1,083,231 |
| Materials 0.1% |
| LG Chem Ltd. | 1,565 | 249,970 |
| Technology Hardware & Equipment 0.9% |
| Samsung Electronics Co., Ltd. | 2,361 | 3,635,761 |
| | | 4,968,962 |
| |
| Russia 1.5% |
| Banks 0.0% |
| Sberbank of Russia PJSC * | 40,000 | 88,405 |
| Security | Number
of Shares | Value ($) |
| Energy 1.5% |
| Surgutneftegas * | 2,225,300 | 1,192,416 |
| Transneft PJSC * | 1,552 | 5,253,416 |
| | | 6,445,832 |
| | | 6,534,237 |
| Total Preferred Stock |
| (Cost $31,831,302) | | 47,313,637 |
|
| Rights 0.0% of net assets |
| |
| China 0.0% |
| Banks 0.0% |
Bank of Communications Co., Ltd., Class H
expires 05/31/17 *(d) | 1,772 | — |
| Total Rights |
| (Cost $—) | | — |
|
| Other Investment Company 0.2% of net assets |
| |
| United States 0.2% |
| Securities Lending Collateral 0.2% |
| Wells Fargo Government Money Market Fund, Select Class 0.67% (c) | 569,656 | 569,656 |
| Total Other Investment Company |
| (Cost $569,656) | | 569,656 |
Security
Rate, Maturity Date | Face Amount
Local Currency | Value ($) |
| Short-Term Investments 0.7% of net assets |
| |
| Time Deposits 0.7% |
| Barclays Capital, Inc. |
| U.S. Dollar | | |
| 0.42%, 05/01/17 (a) | 3,023,661 | 3,023,661 |
| Brown Brothers Harriman |
| Hong Kong Dollar | | |
| 0.01%, 05/02/17 (a) | 24,474 | 3,147 |
| South African Rand | | |
| 6.10%, 05/02/17 (a) | 13,457 | 1,007 |
| Euro | | |
| (0.58%), 05/02/17 (a) | 1,063 | 1,158 |
| Singapore Dollar | | |
| 0.01%, 05/02/17 (a) | 829 | 593 |
| Total Short-Term Investments |
| (Cost $3,029,566) | | 3,029,566 |
End of Investments.
At 04/30/17, the tax basis cost of the fund's investments was $381,233,611 and the unrealized appreciation and depreciation were $61,187,236 and ($18,893,588), respectively, with a net unrealized appreciation of $42,293,648.
Schwab Fundamental Index Funds | Semiannual Report
Schwab Fundamental Emerging Markets Large Company Index Fund
Portfolio Holdings as of April 30, 2017 (Unaudited) (continued)
At 04/30/17, the values of certain foreign securities held by the fund aggregating $274,323,563 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2(a) for additional information)
| * | Non-income producing security. |
| (a) | The rate shown is the current daily overnight rate. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $533,990. |
| (c) | The rate shown is the 7-day yield. |
| (d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
| | |
| ADR — | American Depositary Receipt |
| GDR — | Global Depositary Receipt |
In addition to the above, the fund held the following at 04/30/17:
| | Number of
Contracts | Contract
Value
($) | Unrealized
Appreciation
($) |
| Futures Contracts | | | |
| MSCI Emerging Markets Index, e-mini, Long, expires 06/16/17 | 104 | 5,090,800 | 22,278 |
Schwab Fundamental Index Funds | Semiannual Report
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 Chief Financial Officer, Mark Fischer, 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) | 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) | | Code of ethics – not applicable to this semi-annual report. |
| | (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. |
| (b) | A certification for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSR with the Commission. |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Capital Trust
| | |
| By: | | /s/ Marie Chandoha |
| | Marie Chandoha |
| | Chief Executive Officer |
Date: 06/12/2017
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: 06/12/2017
| | |
| By: | | /s/ Mark Fischer |
| | Mark Fischer |
| | Chief Financial Officer |
Date: 06/12/2017
